UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~

2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 1-3285

3M COMPANY

(Exact name of registrant as specified in its charter)


~~DELAWARE~~ Delaware		41-0417775
(State or other jurisdiction of incorporation)		(~~I.R.S.~~IRS Employer Identification No.)
~~incorporation or organization)~~		~~Identification No.)~~

3M Center, St. Paul, Minnesota	~~55144~~ 55144-1000
(Address of ~~principal executive offices)~~ Principal Executive Offices)		(Zip Code)

(Registrant’s Telephone Number, Including Area Code) (651) 733-1110

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

~~(651) 733-1110~~

~~(Registrant’s telephone number, including area code)~~

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $.01 Per Share

MMM

New York Stock Exchange

MMM

Chicago Stock Exchange, Inc.

1.500% Notes due 2026

MMM26

New York Stock Exchange

1.750% Notes due 2030

MMM30

New York Stock Exchange

1.500% Notes due 2031

MMM31

New York Stock Exchange

Note: The common stock of the Registrant is also traded on the SIX Swiss Exchange.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒	☒	Accelerated filer	☐

Non-accelerated filer ☐ ~~(Do not check if a smaller reporting company)~~	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at ~~September~~June 30, ~~2017~~ 2023
Common Stock, $0.01 par value per share						~~595,608,108~~551,992,430 shares

Table of Contents

3M COMPANY

Form 10-Q for the Quarterly Period Ended ~~September~~June 30, ~~2017~~

2023


					TABLE OF CONTENTS		BEGINNING PAGE
PART I					FINANCIAL INFORMATION

ITEM 1.			Financial Statements			3

	Index to Financial Statements:
					Consolidated Statement of Income (Loss)		3 3
					Consolidated Statement of Comprehensive Income (Loss)		4 4
					Consolidated Balance Sheet		5 5
					Consolidated Statement of Cash Flows		6 6
					Notes to Consolidated Financial Statements		7
					Note 1.Significant Accounting Policies		7 7
					Note 2. Revenue		8
					Note 3. Acquisitions and Divestitures		10 14
					Note 3.4. Goodwill and Intangible Assets		11 16
					Note 4.5. Restructuring Actions ~~and Exit Activities~~		12 18
					Note 5.6. Supplemental Income (Loss) Statement Information		13
					Note 7. Supplemental Equity and Comprehensive Income (Loss) Information		14 19
					Note 6.8. Income Taxes		18 23
					Note 7.9. Marketable Securities		18 24
					Note 8.10. Long-Term Debt and Short-Term Borrowings		19 25
					Note 9.11. Pension and Postretirement Benefit Plans		20 26
					Note ~~10.~~12. Derivatives		21 27
					Note ~~11.~~13. Fair Value Measurements		26 34
					Note ~~12.~~14. Commitments and Contingencies		27 37
					Note ~~13.~~15. Business Segments ~~Stock-Based Compensation~~		52 47
		~~Note 14.Business Segments~~		51
	~~Report of Independent Registered Public Accounting Firm~~	53

ITEM 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			54
					Index to Management’s Discussion and Analysis:
					Overview		54 54
					Results of Operations		62 62
					Performance by Business Segment		64 66
					Financial Condition and Liquidity		70 73
					Cautionary Note Concerning Factors That May Affect Future Results		75 80

ITEM 3.			Quantitative and Qualitative Disclosures About Market Risk			76 80

ITEM 4.			Controls and Procedures			76 81

PART II			OTHER INFORMATION

ITEM 1.			Legal Proceedings			77 82

ITEM 1A.			Risk Factors			77 82

ITEM 2.			Unregistered Sales of Equity Securities and Use of Proceeds			85 85

ITEM 3.			Defaults Upon Senior Securities			85 86

ITEM 4.			Mine Safety Disclosures			85 86

ITEM 5.			Other Information			85 86

ITEM 6.			Exhibits			86 86

Table of Contents

3M COMPANY

FORM 10-Q

For the Quarterly Period Ended ~~September~~June 30, ~~2017~~

2023

PART I. Financial Information

Item 1. Financial Statements.

3M Company and Subsidiaries

Consolidated Statement of Income

(Loss)

(Unaudited)

Three months ended

Nine months ended

September 30,

September 30,

(Millions, except per share amounts)

2017

2016

2017

2016

Net sales

$
8,172

$
7,709

$
23,667

$
22,780

Operating expenses

Cost of sales

4,045

3,847

11,921

11,324

Selling, general and administrative expenses

1,623

1,531

4,830

4,624

Research, development and related expenses

463

427

1,407

1,314

Gain on sale of businesses

—

—

(490)

(40)

Total operating expenses

6,131

5,805

17,668

17,222

Operating income

2,041

1,904

5,999

5,558

Interest expense and income

Interest expense

57

50

156

135

Interest income

(13)

(8)

(33)

(20)

Total interest expense — net

44

42

123

115

Income before income taxes

1,997

1,862

5,876

5,443

Provision for income taxes

564

531

1,532

1,541

Net income including noncontrolling interest

$
1,433

$
1,331

$
4,344

$
3,902

Less: Net income attributable to noncontrolling interest

4

2

9

7

Net income attributable to 3M

$
1,429

$
1,329

$
4,335

$
3,895

Weighted average 3M common shares outstanding — basic

597.6

604.4

597.9

606.2

Earnings per share attributable to 3M common shareholders — basic

$
2.39

$
2.20

$
7.25

$
6.43

Weighted average 3M common shares outstanding — diluted

612.7

618.8

612.5

620.3

Earnings per share attributable to 3M common shareholders — diluted

$
2.33

$
2.15

$
7.08

$
6.28

Cash dividends paid per 3M common share

$
1.175

$
1.11

$
3.525

$
3.33


	Three months ended June 30,				Six months ended June 30,
(Millions, except per share amounts)	2023		2022		2023		2022
Net sales	$	8,325	$	8,702	$	16,356	$	17,531

Operating expenses
Cost of sales	4,606		5,093		9,219		9,919
Selling, general and administrative expenses	12,204		3,023		13,909		4,905
Research, development and related expenses	473		476		945		956


Total operating expenses	17,283		8,592		24,073		15,780
Operating income (loss)	(8,958)		110		(7,717)		1,751

Other expense (income), net	65		50		117		88

Income (loss) before income taxes	(9,023)		60		(7,834)		1,663
Provision (benefit) for income taxes	(2,184)		(23)		(1,974)		279
Income (loss) of consolidated group	(6,839)		83		(5,860)		1,384

Income (loss) from unconsolidated subsidiaries, net of taxes	3		(1)		5		1
Net income (loss) including noncontrolling interest	(6,836)		82		(5,855)		1,385

Less: Net income (loss) attributable to noncontrolling interest	5		4		10		8

Net income (loss) attributable to 3M	$	(6,841)	$	78	$	(5,865)	$	1,377

Weighted average 3M common shares outstanding — basic	553.9		571.0		553.3		571.6
Earnings (loss) per share attributable to 3M common shareholders — basic	$	(12.35)	$	0.14	$	(10.60)	$	2.41

Weighted average 3M common shares outstanding — diluted	553.9		572.7		553.3		573.8
Earnings (loss) per share attributable to 3M common shareholders — diluted	$	(12.35)	$	0.14	$	(10.60)	$	2.40

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

Table of Contents

3M Company and Subsidiaries

Consolidated Statement of Comprehensive Income

(Loss)

(Unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,					Three months ended June 30,				Six months ended June 30,
(Millions)	2017		2016		2017		2016		(Millions)	2023		2022		2023		2022
Net income including noncontrolling interest	$	1,433	$	1,331	$	4,344	$	3,902
Net income (loss) including noncontrolling interest									Net income (loss) including noncontrolling interest	$	(6,836)	$	82	$	(5,855)	$	1,385
Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		44		17		269		192	Cumulative translation adjustment	25		(705)		141		(876)
Defined benefit pension and postretirement plans adjustment		80		67		241		203	Defined benefit pension and postretirement plans adjustment	50		85		101		172
Cash flow hedging instruments, unrealized gain (loss)		(49)		(45)		(176)		(182)
Cash flow hedging instruments									Cash flow hedging instruments	23		88		(1)		87
Total other comprehensive income (loss), net of tax		75		39		334		213	Total other comprehensive income (loss), net of tax	98		(532)		241		(617)
Comprehensive income (loss) including noncontrolling interest		1,508		1,370		4,678		4,115	Comprehensive income (loss) including noncontrolling interest	(6,738)		(450)		(5,614)		768
Comprehensive (income) loss attributable to noncontrolling interest		(3)		(3)		(11)		(7)	Comprehensive (income) loss attributable to noncontrolling interest	(6)		—		(11)		(3)
Comprehensive income (loss) attributable to 3M	$	1,505	$	1,367	$	4,667	$	4,108	Comprehensive income (loss) attributable to 3M	$	(6,744)	$	(450)	$	(5,625)	$	765

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

Table of Contents

3M Company and Subsidiaries

Consolidated Balance Sheet

(Unaudited)


	September 30,		December 31,
(Dollars in millions, except per share amount)	2017		2016		(Dollars in millions, except per share amount)	June 30, 2023		December 31, 2022
Assets					Assets
Current assets					Current assets
Cash and cash equivalents	$	2,831	$	2,398	Cash and cash equivalents	$	4,258	$	3,655
Marketable securities — current		586		280	Marketable securities — current	56		238
Accounts receivable — net		5,156		4,392
Accounts receivable — net of allowances of $160 and $174					Accounts receivable — net of allowances of $160 and $174	4,947		4,532
Inventories					Inventories
Finished goods		1,962		1,629	Finished goods	2,526		2,497
Work in process		1,164		1,039	Work in process	1,527		1,606
Raw materials and supplies		849		717	Raw materials and supplies	1,227		1,269
Total inventories		3,975		3,385	Total inventories	5,280		5,372
Prepaids					Prepaids	674		435
Other current assets		1,108		1,271	Other current assets	539		456
Total current assets		13,656		11,726	Total current assets	15,754		14,688
Marketable securities — non-current		17		17
Investments		139		128
Property, plant and equipment		24,659		23,499	Property, plant and equipment	26,459		25,998
Less: Accumulated depreciation		(16,001)		(14,983)	Less: Accumulated depreciation	(17,248)		(16,820)
Property, plant and equipment — net		8,658		8,516	Property, plant and equipment — net	9,211		9,178
Operating lease right of use assets					Operating lease right of use assets	812		829
Goodwill		9,221		9,166	Goodwill	12,869		12,790
Intangible assets — net		2,175		2,320	Intangible assets — net	4,470		4,699
Prepaid pension benefits		105		52
Other assets		1,266		981	Other assets	5,764		4,271
Total assets	$	35,237	$	32,906	Total assets	$	48,880	$	46,455
Liabilities					Liabilities
Current liabilities					Current liabilities
Short-term borrowings and current portion of long-term debt	$	835	$	972	Short-term borrowings and current portion of long-term debt	$	3,033	$	1,938
Accounts payable		1,824		1,798	Accounts payable	3,231		3,183
Accrued payroll		856		678	Accrued payroll	785		692
Accrued income taxes		374		299	Accrued income taxes	172		259
Operating lease liabilities — current					Operating lease liabilities — current	244		261
Other current liabilities		2,709		2,472	Other current liabilities	3,471		3,190
Total current liabilities		6,598		6,219	Total current liabilities	10,936		9,523

Long-term debt		10,828		10,678	Long-term debt	12,954		14,001
Pension and postretirement benefits		3,748		4,018	Pension and postretirement benefits	1,912		1,966
Operating lease liabilities					Operating lease liabilities	570		580
Other liabilities		1,861		1,648	Other liabilities	14,651		5,615
Total liabilities	$	23,035	$	22,563	Total liabilities	41,023		31,685
Commitments and contingencies (Note 12)
Commitments and contingencies (Note 14)					Commitments and contingencies (Note 14)
Equity					Equity
3M Company shareholders’ equity:					3M Company shareholders’ equity:
Common stock par value, $.01 par value, 944,033,056 shares issued	$	9	$	9
Common stock par value, $.01 par value; 944,033,056 shares issued					Common stock par value, $.01 par value; 944,033,056 shares issued	9		9
Shares outstanding - June 30, 2023: 551,992,430					Shares outstanding - June 30, 2023: 551,992,430
Shares outstanding - December 31, 2022: 549,245,105					Shares outstanding - December 31, 2022: 549,245,105
Additional paid-in capital		5,302		5,061	Additional paid-in capital	6,858		6,691
Retained earnings		39,454		37,907	Retained earnings	40,290		47,950
Treasury stock, at cost: 348,424,948 shares at September 30, 2017; 347,306,778 shares at December 31, 2016		(25,706)		(25,434)
Treasury stock, at cost:					Treasury stock, at cost:	(32,926)		(33,255)
Shares at June 30, 2023: 392,040,626					Shares at June 30, 2023: 392,040,626
Shares at December 31, 2022: 394,787,951					Shares at December 31, 2022: 394,787,951
Accumulated other comprehensive income (loss)		(6,913)		(7,245)	Accumulated other comprehensive income (loss)	(6,433)		(6,673)
Total 3M Company shareholders’ equity		12,146		10,298	Total 3M Company shareholders’ equity	7,798		14,722
Noncontrolling interest		56		45	Noncontrolling interest	59		48
Total equity	$	12,202	$	10,343	Total equity	7,857		14,770
Total liabilities and equity	$	35,237	$	32,906	Total liabilities and equity	$	48,880	$	46,455

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

Table of Contents

3M Company and Subsidiaries

Consolidated Statement of Cash Flows

(Unaudited)

Nine months ended

September 30,

(Millions)

2017

2016

Cash Flows from Operating Activities

Net income including noncontrolling interest

$
4,344

$
3,902

Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities

Depreciation and amortization

1,195

1,090

Company pension and postretirement contributions

(314)

(323)

Company pension and postretirement expense

244

180

Stock-based compensation expense

266

244

Gain on sale of businesses

(490)

(40)

Deferred income taxes

(105)

(100)

Changes in assets and liabilities

Accounts receivable

(595)

(469)

Inventories

(436)

(15)

Accounts payable

(25)

(107)

Accrued income taxes (current and long-term)

249

155

Other — net

47

(64)

Net cash provided by operating activities

4,380

4,453

Cash Flows from Investing Activities

Purchases of property, plant and equipment (PP&E)

(914)

(984)

Proceeds from sale of PP&E and other assets

18

18

Acquisitions, net of cash acquired

(12)

(17)

Purchases of marketable securities and investments

(1,055)

(1,036)

Proceeds from maturities and sale of marketable securities and investments

745

794

Proceeds from sale of businesses, net of cash sold

862

56

Other — net

2

(4)

Net cash used in investing activities

(354)

(1,173)

Cash Flows from Financing Activities

Change in short-term debt — net

60

(498)

Repayment of debt (maturities greater than 90 days)

(650)

(992)

Proceeds from debt (maturities greater than 90 days)

—

2,832

Purchases of treasury stock

(1,564)

(2,829)

Proceeds from issuance of treasury stock pursuant to stock option and benefit plans

582

741

Dividends paid to shareholders

(2,104)

(2,014)

Other — net

(23)

(20)

Net cash used in financing activities

(3,699)

(2,780)

Effect of exchange rate changes on cash and cash equivalents

106

10

Net increase (decrease) in cash and cash equivalents

433

510

Cash and cash equivalents at beginning of year

2,398

1,798

Cash and cash equivalents at end of period

$
2,831

$
2,308

Six months ended
June 30,
(Millions) 2023 2022
Cash Flows from Operating Activities
Net income (loss) including noncontrolling interest $ (5,855) $ 1,385
Adjustments to reconcile net income (loss) including noncontrolling interest to net cash provided by operating activities
Depreciation and amortization 915 921
Company pension and postretirement contributions (57) (80)
Company pension and postretirement expense 75 83
Stock-based compensation expense 176 182
Deferred income taxes (2,547) (451)
Changes in assets and liabilities
Accounts receivable (393) (457)
Inventories 101 (837)
Accounts payable 135 401
Accrued income taxes (current and long-term) (409) (9)
Other — net 10,643 1,000
Net cash provided by (used in) operating activities 2,784 2,138
Cash Flows from Investing Activities
Purchases of property, plant and equipment (PP&E) (852) (808)
Proceeds from sale of PP&E and other assets 23 56
Purchases of marketable securities and investments (775) (518)
Proceeds from maturities and sale of marketable securities and investments 945 456
Proceeds from sale of businesses, net of cash sold 3 13
Other — net 37 (13)
Net cash provided by (used in) investing activities (619) (814)
Cash Flows from Financing Activities
Change in short-term debt — net 651 344
Repayment of debt (maturities greater than 90 days) (1,802) (1,179)
Proceeds from debt (maturities greater than 90 days) 1,107 1
Purchases of treasury stock (29) (773)
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans 218 227
Dividends paid to shareholders (1,655) (1,700)
Other — net (9) (22)
Net cash provided by (used in) financing activities (1,519) (3,102)
Effect of exchange rate changes on cash and cash equivalents (43) (64)
Net increase (decrease) in cash and cash equivalents 603 (1,842)
Cash and cash equivalents at beginning of year 3,655 4,564
Cash and cash equivalents at end of period $ 4,258 $ 2,722
The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

Table of Contents

3M Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1. Significant Accounting Policies

Basis of Presentation

The interim consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. These adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of results for the full year. The interim consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q.

As described in 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K) and 3M’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2017 and June 30, 2017, effective in the first quarter of 2017, the Company changed its business segment reporting in its continuing effort to improve the alignment of businesses around markets and customers. These changes included the integration of the former Renewable Energy Division into existing divisions, the combining of two divisions to form the Automotive and Aerospace Solutions Division, and consolidation of U.S. customer account activity, impacting dual credit reporting. Segment information presented herein reflects the impact of these changes for all periods presented. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes included in its ~~Current Report on Form 8-K dated May 4, 2017.~~

~~Foreign Currency Translation~~

Local currencies generally are considered the functional currencies outside the United States. Assets and liabilities for operations in local-currency environments are translated at month-end exchange rates of the period reported. Income and expense items are translated at month-end exchange rates of each applicable month. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity.

3M has a subsidiary in Venezuela, the financial statements of which are remeasured as if its functional currency were that of its parent because Venezuela’s economic environment is considered highly inflationary. The operating income of this subsidiary represented less than 1.0 percent of 3M’s consolidated operating income for 2016. The Venezuelan government sets official rates of exchange and conditions precedent to purchase foreign currency at these rates with local currency. The government also operates various expanded secondary currency exchange mechanisms that have been eliminated and replaced from time to time. Such rates and conditions have been and continue to be subject to change. For the periods presented, the financial statements of 3M’s Venezuelan subsidiary were remeasured utilizing the rate associated with the secondary auction mechanism, Tipo de Cambio Complementario, which was redesigned by the Venezuelan government in June 2017 (DICOM2), or its predecessor. During the same periods, the Venezuelan government’s official exchange was Tipo de Cambio Protegido (DIPRO), or its predecessor.

~~Table of Contents~~

~~Note 1 in 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016~~ Annual Report on Form ~~10-K) provides~~10-K.

In the second quarter of 2023, 3M re-consolidated the Aearo Technology and certain of its related entities (collectively, the "Aearo Entities") as a result of the court dismissal of their voluntary bankruptcy proceedings. 3M had previously deconsolidated these entities in the third quarter of 2022. The Aearo Entities have appealed the court’s dismissal decision. See additional information ~~the Company considers~~ in determining the exchange rate used relative to its Venezuelan subsidiary as well as factors which could lead to its deconsolidation. The Company continues to monitor these circumstances. Changes in applicable exchange rates or exchange mechanisms may continueNote 14.

Effective in the ~~future. These~~first quarter of 2023, 3M made changes could impact the rate of exchange applicable to remeasure the Company’s net monetary assets (liabilities) denominated in Venezuelan Bolivars (VEF). As of September 30, 2017, the Company had a balance of net monetary assets denominated in VEF of less than 10 billion VEF and the DIPRO and DICOM2 exchange rates were approximately 10 VEF and 3,300 VEF per U.S. dollar, respectively. A need to deconsolidate the Company’s Venezuelan subsidiary’s operations may result from a lack of exchangeability of VEF-denominated cash coupled with an acute degradation in the ~~ability~~measure of segment operating performance and segment composition used by 3M’s chief operating decision maker—impacting 3M’s disclosed measure of segment profit/loss (business segment operating income (loss)). Also effective in the first quarter of 2023, 3M's Consumer business segment re-aligned from four divisions to ~~make key operational decisions due to government regulations~~three divisions, see additional information in ~~Venezuela. Based upon~~Note 15. 3M's disclosed disaggregated revenue was also updated as a ~~review~~result of ~~factors as~~these changes, see additional information in Note 2. Information provided herein reflects the impact of September 30, 2017, the Company continues to consolidate its Venezuelan subsidiary. As of September 30, 2017, the balance of accumulated other comprehensive loss associated with this subsidiary was approximately $145 million and the amount of intercompany receivables due from this subsidiary and its total equity balance were not significant.

~~Reclassifications~~

~~Certain amounts in prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation.~~

these changes for all periods presented.

Earnings (Loss) Per Share

The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is a result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans were not included in the computation of diluted earnings (loss) per share attributable to 3M common shareholders because they would ~~not~~ have had ~~a dilutive~~an anti-dilutive effect ~~(insignificant for the three months ended September 30, 2017; 1.1~~of 36.9 million and 36.5 million average options for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017; insignificant for the three months ended September 30, 2016;~~2023, respectively, and ~~4.0~~31.9 million and 27.5 million average options for the ~~nine~~three and six months ended ~~September~~June 30, ~~2016).~~2022, respectively. In periods of net losses, these antidilutive effects include all weighted option shares outstanding and weighted average shares is the same for the calculations of both basic and diluted loss per share. The computations for basic and diluted earnings (loss) per share follow:

Earnings (Loss) Per Share Computations

Three months ended

Nine months ended

September 30,

September 30,

(Amounts in millions, except per share amounts)

2017

2016

2017

2016

Numerator:

Net income attributable to 3M

$
1,429

$
1,329

$
4,335

$
3,895

Denominator:

Denominator for weighted average 3M common shares outstanding – basic

597.6

604.4

597.9

606.2

Dilution associated with the Company’s stock-based compensation plans

15.1

14.4

14.6

14.1

Denominator for weighted average 3M common shares outstanding – diluted

612.7

618.8

612.5

620.3

Earnings per share attributable to 3M common shareholders – basic

$
2.39

$
2.20

$
7.25

$
6.43

Earnings per share attributable to 3M common shareholders – diluted

$
2.33

$
2.15

$
7.08

$
6.28

~~New Accounting Pronouncements~~

~~In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09,~~ ~~Revenue from Contracts with Customers~~, and in August 2015 issued ASU No. 2015-14, which amended the standard as to effective date. The ASU provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific


	Three months ended June 30,				Six months ended June 30,
(Amounts in millions, except per share amounts)	2023		2022		2023		2022
Numerator:
Net income (loss) attributable to 3M	$	(6,841)	$	78	$	(5,865)	$	1,377

Denominator:
Denominator for weighted average 3M common shares outstanding – basic	553.9		571.0		553.3		571.6
Dilution associated with the Company’s stock-based compensation plans	—		1.7		—		2.2
Denominator for weighted average 3M common shares outstanding – diluted	553.9		572.7		553.3		573.8

Earnings (loss) per share attributable to 3M common shareholders — basic	$	(12.35)	$	0.14	$	(10.60)	$	2.41
Earnings (loss) per share attributable to 3M common shareholders — diluted	$	(12.35)	$	0.14	$	(10.60)	$	2.40

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~~guidance. The standard’s~~Supplier Finance Program Obligations

Under supplier finance programs, 3M agrees to pay participating banks the stated ~~core principle is~~amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices, generally within 90 days of the invoice date. 3M or the banks may terminate the agreements with advance notice. Separately, the banks may have arrangements with the suppliers that ~~an entity should recognize revenue~~provide them the option to ~~depict~~request early payment from the ~~transfer~~banks for invoices confirmed by 3M. 3M's outstanding balances of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligationsconfirmed invoices in the ~~contract, determining the transaction price, allocating the transaction price~~programs as of June 30, 2023 and December 31, 2022 were approximately $290 million and $260 million, respectively. These amounts are included within accounts payable on 3M's consolidated balance sheet.

New Accounting Pronouncements

Refer to Note 1 to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. During 2016, the FASB also issued ASU No. 2016-08, ~~Principal versus Agent Considerations (Reporting Revenue Gross versus Net); ASU No. 2016-10,~~ ~~Identifying Performance Obligations and Licensing; ASU No. 2016-12,~~ ~~Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20,~~ ~~Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers~~ which amend ASU No. 2014-09. These amendments include clarification of principal versus agent guidance in situations in which a revenue transaction involves a third party in providing goods or services to a customer. In such circumstances, an entity must determine whether the nature of its promise to the customer is to provide the underlying goods or services (i.e., the entity is the principal in the transaction) or to arrange for the third party to provide the underlying goods or services (i.e., the entity is the agent in the transaction). The amendments clarify, in terms of identifying performance obligations, how entities would determine whether promised goods or services are separately identifiable from other promises in a contract and, therefore, would be accounted for separately. The guidance allows entities to disregard goods or services that are immaterial in the context of a contract and provides an accounting policy election to account for shipping and handling activities as fulfillment costs rather than as additional promised services. With regard to the licensing, the amendments clarify how an entity would evaluate the nature of its promise in granting a license of intellectual property, which determines whether the entity recognizes revenue over time or at a point in time. The amendments also address implementation issues relative to transition (adding a practical expedient for contract modifications and clarifying what constitutes a completed contract when employing full or modified retrospective transition methods), collectability, noncash consideration, and the presentation of sales and other similar-type taxes (allowing entities to exclude sales-type taxes collected from transaction price). Finally, the amendments make certain technical corrections and provide additional guidance in the areas of disclosure of performance obligations, provisions for losses on certain types of contracts, scoping, and other areas. Overall, ASU No. 2014-09, as amended, provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. For 3M, the ASU is effective January 1, 2018 and the Company has concluded that it will utilize the modified retrospective method of adoption. 3M continues to evaluate the standard’s impact on its consolidated results of operations and financial condition. In addition to expanded disclosures regarding revenue, the ASU could impact the timing of revenue and certain cost recognition. 3M has conducted initial analyses, executed project management relative to the process of adopting this ASU, and is finalizing detailed contract reviews to complete necessary adjustments to existing accounting policies and quantify the ASU’s effect. For most of 3M’s revenue arrangements, no significant impacts are expected as these transactions are not accounted for under industry-specific guidance that will be superseded by the ASU and generally consist of a single performance obligation to transfer promised goods or services. However, 3M engages in some arrangements for which software industry-specific guidance (which the ASU supersedes) is presently utilized. The Company has considered these arrangements in the detailed contract reviews that have been conducted. While 3M will continue to finalize its efforts relative to the adoption of ASU No. 2014-09, based on the analysis completed to date, the Company does not expect this standard to have a material impact on its consolidated results of operations and financial condition.

~~In July 2015, the FASB issued ASU No. 2015-11,~~ ~~Simplifying the Measurement of Inventory~~, which modified previous requirements regarding measuring inventory at the lower of cost or market. Under previous standards, the market amount required consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaced market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminated the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. 3M adopted this standard prospectively beginning January 1, 2017. The adoption did not have a material impact on 3M’s consolidated results of operations and financial condition.

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Recognition and Measurement of~~Consolidated Financial ~~Assets and Financial Liabilities, which revises the accounting related to (1) the classification and measurement of investments in equity~~

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securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance requires the fair value measurement of investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies (collectively, equity securities) that do not result in consolidation and are not accounted for under the equity method. Entities will need to measure these investments and recognize changes in fair value in net income. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify under current guidance as available for sale in other comprehensive income (OCI). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. Instead, for these types of equity investments that do not otherwise qualify for the net asset value practical expedient, entities will be permitted to elect a practicability exception and measure the investment at cost less impairment plus or minus observable price changes (in orderly transactions). The ASU also establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option (FVO) has been elected. Under this guidance, an entity would be required to separately present in OCI the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. For derivative liabilities for which the FVO has been elected, however, any changes in fair value attributable to instrument-specific credit risk would continue to be presented in net income, which is consistent with current guidance. For 3M, this standard is effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained earnings, except for guidance relative to equity securities without readily determinable fair values which is applied prospectively. The Company is currently assessing this ASU’s impact on 3M’s consolidated results of operations and financial condition; however, 3M has historically held limited amounts of equity securities and cost method investments (less than $75 million in aggregate at September 30, 2017), and has not elected the FVO with respect to material financial liabilities.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases~~, replacing existing lease accounting guidance. The new standard introduces a lessee model that would require entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to current accounting. The ASU does not make fundamental changes to existing lessor accounting. However, it modifies what qualifies as a sales-type and direct financing lease and related accounting and aligns a number of the underlying principles with those of the new revenue standard, ASU No. 2014-09, such as evaluating how collectability should be considered and determining when profit can be recognized. The guidance eliminates existing real estate-specific provisions and requires expanded qualitative and quantitative disclosures. The standard requires modified retrospective transition by which it is applied at the beginning of the earliest comparative period presented in the year of adoption. For 3M, the ASU is effective January 1, 2019. Information under existing lease guidance with respect to rent expense for operating leases and the Company’s minimum lease payments for capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2016 is included in Note 14Statements in 3M’s ~~Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016~~2022 Annual Report on Form ~~10-K). The Company~~10-K for a discussion of applicable standards issued and not yet adopted by 3M.

NOTE 2. Revenue

Contract Balances:

Deferred revenue primarily relates to revenue that is ~~currently assessing this ASU’s impact on 3M’s consolidated results~~recognized over time for one-year software license contracts. Deferred revenue (current portion) as of ~~operations~~June 30, 2023 and ~~financial condition.~~

~~In March 2016, the FASB issued ASU No. 2016-06,~~ ~~Contingent Put~~December 31, 2022 was $521 million and ~~Call Options in Debt Instruments. This ASU clarified guidance used to determine if debt instruments that contain contingent put or call options require separation~~$538 million, respectively. Approximately $150 million and $350 million of the ~~embedded put or call feature~~December 31, 2022 balance was recognized as revenue during the three and six months ended June 30, 2023, respectively, while approximately $140 million and $340 million of the December 31, 2021 balance was recognized as revenue during the three and six months ended June 30, 2022, respectively.

Operating Lease Revenue:

Net sales includes rental revenue from durable medical devices as part of operating lease arrangements (reported within the debt instrument and trigger accounting for the feature as a derivative with changes in fair value recorded through income. Under the new guidance, fewer put or call options embedded in debt instruments require derivative accounting. For 3M, this ASU was effective January 1, 2017. The Company’s outstanding debt with embedded put provisions did not require separate derivative accounting under previous guidance. As a result, the adoption of this standard did not have a material impact on the Company’s consolidated results of operations and financial condition.

~~In March 2016, the FASB issued ASU No. 2016-07,~~ ~~Simplifying the Transition to the Equity Method of Accounting~~Medical Solutions Division), which ~~eliminated~~was $146 million and $285 million during the ~~previous requirement to apply~~three and six months ended June 30, 2023, respectively, and $148 million and $284 million during the equity method of accounting retrospectively (revising prior periods as if the equity method had always been applied) when an entity obtained significant influence over a previously held investment. The new guidance requires the investor to apply the equity method prospectively from the date the investment qualifies for the equity method. The investor would add the carrying value of the existing investment to the cost of any additional investment to determine the initial cost basis of the equity method investment. For 3M, this ASU

three and six months ended June 30, 2022, respectively.

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~~was effective January 1, 2017 on a prospective basis. 3M will apply this guidance~~Disaggregated revenue information:

The Company views the following disaggregated disclosures as useful to ~~investments that transition~~understanding the composition of revenue recognized during the respective reporting periods:


	Three months ended June 30,				Six months ended June 30,
Net Sales (Millions)	2023		2022		2023		2022
Abrasives	$	334	$	346	$	675	$	675
Automotive Aftermarket	305		289		617		584
Closure and Masking Systems	241		270		486		528
Electrical Markets	329		336		653		645
Industrial Adhesives and Tapes	545		586		1,089		1,207
Personal Safety	878		972		1,781		2,099
Roofing Granules	133		125		243		237

Total Safety and Industrial Business Segment	2,765		2,924		5,544		5,975

Advanced Materials	305		307		606		612
Automotive and Aerospace	477		428		939		888
Commercial Solutions	455		448		887		902
Electronics	714		863		1,386		1,786
Transportation Safety	240		222		423		420

Total Transportation and Electronics Business Segment	2,191		2,268		4,241		4,608


Food Safety	—		89		—		181
Health Information Systems	302		309		602		609
Medical Solutions	1,161		1,169		2,284		2,297
Oral Care	351		350		692		698
Separation and Purification Sciences	247		262		479		522
Other Health Care	14		—		28		—
Total Health Care Business Group	2,075		2,179		4,085		4,307

Construction and Home Improvement Markets	542		560		1,071		1,163
Home, Health and Auto Care	428		428		828		865
Stationery and Office	323		342		586		611

Total Consumer Business Group	1,293		1,330		2,485		2,639

Corporate and Unallocated	1		1		1		2
Total Company	$	8,325	$	8,702	$	16,356	$	17,531


	Three months ended June 30,				Six months ended June 30,
Net Sales (Millions)	2023		2022		2023		2022
Americas	$	4,678	$	4,751	$	9,077	$	9,189
Asia Pacific	2,134		2,447		4,314		5,217
Europe, Middle East and Africa	1,513		1,504		2,965		3,125

Worldwide	$	8,325	$	8,702	$	16,356	$	17,531

Americas included United States net sales to ~~the equity method after the adoption date.~~

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Measurement~~customers of ~~Credit Losses on Financial Instruments, which revises guidance~~$3.8 billion and $7.4 billion for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instrumentsthree and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized costsix months ended June 30, 2023, respectively, and ~~certain other instruments, including trade~~$3.9 billion and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. With respect to available-for-sale (AFS) debt securities, the ASU amends the current other-than-temporary impairment model. For such securities with unrealized losses, entities will still consider if a portion of any impairment is related only to credit losses and therefore recognized as a reduction in income. However, rather than also reflecting that credit loss amount as a permanent reduction in cost (amortized cost) basis of that AFS debt security, the ASU requires that credit losses be reflected as an allowance. As a result, under certain circumstances, a recovery in value could result in previous allowances, or portions thereof, reversing back into income. For 3M, this ASU is effective January 1, 2020, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently assessing this ASU’s impact on 3M’s consolidated results of operations and financial condition.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Classification of Certain Cash Receipts and Cash Payments,~~ which was intended to reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provided guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The ASU also provided guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. The Company early adopted ASU No. 2016-15 as of January 1, 2017. Since the associated changes in classification were immaterial to all prior periods presented, no impact was reflected in the Company’s pre-2017 consolidated results of operations and financial condition presented.

~~In October 2016, the FASB issued ASU No. 2016-16,~~ ~~Intra-Entity Transfers of Assets Other Than Inventory, which modifies existing guidance and is intended to reduce diversity in practice with respect to the accounting~~$7.5 billion for the income tax consequences of intra-entity transfers of assets. The ASU indicates that the current exception to income tax accounting that requires companies to defer the income tax effects of certain intercompany transactions would apply only to intercompany inventory transactions. That is, the exception would no longer apply to intercompany salesthree and transfers of other assets (e.g., intangible assets). Under the existing exception, income tax expense associated with intra-entity profits in an intercompany sale or transfer of assets is eliminated from earnings. Instead, that cost is deferred and recorded on the balance sheet (e.g., as a prepaid asset) until the assets leave the consolidated group. Similarly, the entity is prohibited from recognizing deferred tax assets for the increases in tax bases due to the intercompany sale or transfer. For 3M, this ASU is effective January 1, 2018. The standard requires modified retrospective transition with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. Upon adoption, a company would write off any income tax effects that had been deferred from past intercompany transactions involving non-inventory assets to opening retained earnings. In addition, an entity would record deferred tax assets with an offset to opening retained earnings for amounts that entity had previously not recognized under existing guidance but would recognize under the new guidance. While 3M could initiate additional relevant transactions prior to this ASU’s adoption date, based on deferred tax amounts related to applicable past intercompany transactions as of Septembersix months ended June 30, ~~2017, the Company does not expect this ASU to have a material impact on 3M’s consolidated results of operations and financial condition.~~

~~In October 2016, the FASB issued ASU No. 2016-17,~~ ~~Interests Held through Related Parties That Are under Common Control~~, which modified previous guidance with respect to how a decision maker that holds an indirect interest in a variable interest entity (VIE) through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under the ASU, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker

2022, respectively.

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held the interest itself. As a result of the ASU, in certain cases, previous consolidation conclusions may change. For 3M, the standard was effective January 1, 2017 with retrospective application to January 1, 2016. 3M does not have significant involvement with entities subject to consolidation considerations impacted by VIE model factors. As a result, the adoption of this ASU did not have a material impact on the Company’s consolidated results of operations and financial condition.

~~In November 2016, the FASB issued ASU No. 2016-18,~~ ~~Restricted Cash~~, which clarified guidance on the classification and presentation of restricted cash in the statement of cash flows. Under the ASU, changes in restricted cash and restricted cash equivalents would be included along with those of cash and cash equivalents in the statement of cash flows. As a result, entities would no longer present transfers between cash/equivalents and restricted cash/equivalents in the statement of cash flows. In addition, a reconciliation between the balance sheet and the statement of cash flows would be disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. The Company early adopted ASU No. 2016-18 as of January 1, 2017. Due to the immaterial use of restricted cash and restricted cash equivalents, no impact was reflected in the Company’s pre-2017 consolidated results of operations and financial condition presented.

~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~Clarifying the Definition of a Business~~, which narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The ASU requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the set) is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs. The standard also narrows the definition of outputs. The definition of a business affects areas of accounting such as acquisitions, disposals and goodwill. Under the new guidance, fewer acquired sets are expected to be considered businesses. For 3M, this ASU is effective January 1, 2018 on a prospective basis with early adoption permitted. 3M would apply this guidance to applicable transactions after the adoption date.

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. For 3M, this ASU is effective prospectively to impairment tests beginning January 1, 2020, with early adoption permitted at the time of any interim impairment test that may be performed prior to that date. 3M currently plans to apply this ASU in the fourth quarter of 2017 in conjunction with its annual goodwill impairment testing.

~~In February 2017, the FASB issued ASU No. 2017-05,~~ ~~Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU addresses scope-related questions that arose after the FASB issued its revenue guidance in ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~. The new standard clarifies the accounting for derecognition of nonfinancial assets and defines what is considered an in substance nonfinancial asset. Nonfinancial assets largely relate to items such as real estate, ships and intellectual property that do not constitute a business. The new ASU impacts entities derecognizing (e.g. selling) nonfinancial assets (or in substance nonfinancial assets), including partial interests therein, when the purchaser is not a customer. Under the new guidance, the seller would apply certain recognition and measurement principles of ASU No. 2014-09, ~~Revenue from Contracts with Customers~~, even though the purchaser is not a customer. For 3M, this new standard is effective coincident with the Company’s January 1, 2018 adoption of ASU No. 2014-09. The Company is currently assessing this ASU’s impact on 3M’s consolidated results of operations and financial condition.

~~In March 2017, the FASB issued ASU No. 2017-07,~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~. This ASU changes 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 would be included in operating expenses and only the service cost component would be 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

~~Table of Contents~~

amortization) would be reported outside of operating income. For 3M, this ASU is effective January 1, 2018 on a retrospective basis; however, guidance limiting the capitalization to only the service cost component is applied on prospective basis. The components of 3M’s net periodic defined benefit pension and postretirement benefit costs are presented in Note 9. These include components totaling a benefit of $31 million and $50 million for the three months ended September 30, 2017 and 2016, respectively, and $95 million and $156 million for the nine months ended September 30, 2017 and 2016, respectively, that would no longer be included within operating expenses and instead would be reported outside of income from operations under the new standard.

~~In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities~~, which amends the amortization period for certain purchased callable debt securities held at a premium. Under existing standards, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The new guidance shortens the amortization period to the earliest call date for certain callable debt securities that have explicit, noncontingent call features and are callable at a fixed price and preset date. The amendments do not require an accounting change for securities held at a discount. For 3M, this ASU is effective January 1, 2019 with a modified retrospective transition resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Early adoption is permitted. 3M’s marketable security portfolio includes very limited instances of callable debt securities held at a premium. As a result, the Company does not expect this ASU to have a material impact on 3M’s consolidated results of operations and financial condition.

~~In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting~~, that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. The general model for accounting for modifications of share-based payment awards is to record the incremental value arising from the changes as additional compensation cost. Under the new standard, fewer changes to the terms of an award would require accounting under this modification model. For 3M, this ASU is effective January 1, 2018, with early adoption permitted. Because the Company does not typically make changes to the terms or conditions of its issued share-based payment awards, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

~~In May 2017, the FASB issued ASU No. 2017-10,~~ ~~Determining the Customer of the Operation Services~~, that clarifies how an operating entity determines the customer of the operation services for transactions within the scope of a service concession arrangement. Service concession arrangements are typically agreements between a grantor and an operating entity whereby the operating entity will operate the grantor’s infrastructure (i.e. airports, roadways, bridges, and prisons) for a specified period of time. The operating entity also may be required to maintain the infrastructure and provide capital-intensive maintenance to enhance or extend its life. In such arrangements, typically the operation services (i.e. operation and maintenance of a roadway) would be used by third parties (i.e. drivers). The ASU clarifies that the grantor, not the third party, is the customer of the operation services in such arrangements. For 3M, this new standard is effective coincident with the Company’s January 1, 2018 adoption of ASU No. 2014-09. Because the Company is not typically a party to agreements within the scope of accounting for service concession arrangements, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

~~In July 2017, the FASB issued ASU No. 2017-11,~~ (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The new standard applies to issuers of financial instruments with down-round features. A down-round provision is a term in an equity-linked financial instrument (i.e. a freestanding warrant contract or an equity conversion feature embedded within a host debt or equity contract) that triggers a downward adjustment to the instrument’s strike price (or conversion price) if equity shares are issued at a lower price (or equity-linked financial instruments are issued at a lower strike price) than the instrument’s then-current strike price. The purpose of the feature is typically to protect the instrument’s counterparty from future issuances of equity shares at a more favorable price. The ASU amends (1) the classification of such instruments as liabilities or equity by revising the certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. For 3M, this ASU is effective January 1, 2019, with early adoption permitted. Because the Company has not issued financial instruments with down-round features, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

~~Table of Contents~~

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Targeted Improvements to Accounting for Hedging Activities~~. The ASU amends existing guidance to simplify the application of hedge accounting in certain situations and allow companies to better align their hedge accounting with their risk management activities. Existing standards contain certain requirements for an instrument to qualify for hedge accounting relative to initial and ongoing assessments of hedge effectiveness. While an initial quantitative test to establish the hedge relationship is highly effective would still be required, the new ASU permits subsequent qualitative assessments for certain hedges instead of a quantitative test and expands the timeline for performing the initial quantitative assessment. The ASU also simplifies related accounting by eliminating the requirement to separately measure and report hedge ineffectiveness. Instead, for qualifying cash flow and net investment hedges, the entire change in fair value (including the amount attributable to ineffectiveness) will be recorded within other comprehensive income and reclassified to earnings in the same income statement line that is used to present the earnings effect of the hedged item when the hedged item affects earnings. For fair value hedges, generally, the entire change in fair value of the hedging instrument would also be presented in the same income statement line as the hedged item. The new standard also simplifies the accounting for fair value hedges of interest rate risks and expands an entity’s ability to hedge nonfinancial and financial risk components. In addition, the guidance also eases certain documentation requirements, modifies the accounting for components excluded from the assessment of hedge effectiveness, and requires additional tabular disclosures of derivative and hedge-related information. For 3M, this ASU is effective January 1, 2019, with a modified retrospective transition resulting in a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the adoption date. Early adoption is permitted. The Company is currently assessing this ASU’s impact on 3M’s consolidated results of operations and financial condition.

NOTE 2.3. Acquisitions and Divestitures

Refer to Note 3 to the Consolidated Financial Statements in 3M's 2022 Annual Report on Form 10-K for more information on relevant pre-2023 acquisitions and divestitures.

Acquisitions:

3M makes acquisitions of certain businesses from time to time that are aligned with its strategic intent with respect to, among other factors, growth markets and adjacent product lines or technologies. Goodwill resulting from business combinations is largely attributable to the existing workforce of the acquired businesses and synergies expected to arise after 3M’s acquisition of these businesses.

~~In September 2017, 3M purchased all of~~

2023 acquisitions:

There were no acquisitions that closed during the ownership interests of Elution Technologies, LLC, a Vermont-based manufacturer of test kits that help enable food and beverage companies ensure their products are free from certain potentially harmful allergens such as peanuts, soy or milk. Elution is reported within the Company’s Health Care business.

In October 2017, 3M completed the acquisition of the underlying legal entities and associated assets of Scott Safety, which is headquartered in Monroe, North Carolina, from Johnson Controls for $2.0 billion of cash, net of closing and other adjustments. Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus systems, gas and flame detection instruments, and other safety devices that complement 3M’s personal safety portfolio. The business had revenues of approximately $570 million in 2016. Scott Safety will be reported within 3M’s Safety and Graphics business. The Company is in the process of completing its initial accounting for this acquisition and, accordingly, has not included disclosures relative to the allocation of purchase consideration to the respective assets and liabilities acquired. 3M expects to finalize the allocation of purchase price within the one year measurement-period following the acquisition.

~~Pro forma information related to acquisitions has not been included because the impact on the Company’s consolidated results of operations was not considered material.~~

six months ended June 30, 2023.

Divestitures:

3M may divest certain businesses from time to time based upon ~~reviews~~review of the Company’s portfolio considering, among other items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering if selling the businesses results in the greatest value creation for the Company and for shareholders.

As discussed in Note 15 (Business Segments), gains/losses on business divestitures are reflected in Corporate and Unallocated.

2023 divestitures and previously announced divestitures:

~~Table of Contents~~

In ~~January 2017,~~May 2023, 3M ~~sold~~entered into agreements to sell the assets associated with its dental local anesthetic business (part of ~~its safety prescription eyewear~~the Health Care business) to Pierrel S.p.A. for $70 million in cash, subject to closing and other adjustments. The dental local anesthetic business ~~with~~has annual sales of approximately ~~$45 million,~~$30 million. This transaction is expected to ~~HOYA Vision Care. The Company recorded a pre-tax gain of $29 million~~close in the ~~first~~third quarter of ~~2017~~2023.

In July 2022, 3M announced its intention to spin off the Health Care business as a ~~result~~separate public company. 3M expects to initially retain an ownership position of ~~this sale,~~19.9% in the business, which ~~was reported within~~3M intends to monetize over time. The spin-off transaction is intended to be tax-free for U.S. federal income tax purposes and is subject to customary conditions, including the filing and effectiveness of a Form 10 registration statement, receipt of a private letter ruling from the Internal Revenue Service and a tax opinion from external counsel, satisfactory completion of financing, and final approval by the Company’s ~~Safety and Graphics business.~~

~~In May 2017,~~Board of Directors, among other items. 3M ~~completed~~continues to work towards closing the ~~related sale~~transaction by year-end 2023 or ~~transfer of control, as applicable, of its identity management business~~early 2024, subject to Gemalto N.V. This business, with 2016 sales of approximately $205 million, is a leading provider in identity management solutions, including biometric hardware and software that enable identity verification and authentication,required conditions, as well as ~~secure materials~~additional factors such as conditions in the equity and ~~document readers. In June 2017,~~debt markets, other external conditions, and developments involving 3M ~~also completed the sale~~or any of its ~~tolling and automated license/number plate recognition business, with annual sales~~businesses, which could delay the completion of ~~approximately $40 million,~~the transaction relative to Neology, Inc. 3M’s tolling and automated license/number plate recognition business includes RFID readers and tags, automatic vehicle classification systems, lane controller and host software, and back office software and services. It also provides mobile and fixed cameras, software, and services in automated license/number plate recognition. 3M received proceeds of $833 million, or $809 million net of cash sold, and reflected a pre-tax gain of $461 million in the ~~second quarter of 2017 as a result of these two divestitures, which was reported within~~anticipated timeline. Because the ~~Company’s Safety and Graphics business.~~

In October 2017, 3M sold its electronic monitoring business to an affiliate of Apax Partners for $200 million, net of cash sold and closing and other adjustments. This business, with annual sales of approximately $95 million,intended transaction is a ~~provider of electronic monitoring technologies, serving hundreds of correctional~~spin-off, the Health Care business is not classified as held for sale.

Operating income and ~~law enforcement agencies around~~held-for-sale amounts:

With respect to the world. 3M expects to reflect a pre-tax gain of approximately $100 million in the fourth quarter of 2017 as a result of this divestiture, which will be reported within the Company’s Safety and Graphics business.

~~The aggregate~~businesses above, operating income information of the Health Care business is included in Note 15. Further, with the respect to these ~~divested~~ businesses, ~~was less than $20 million in 2016. The approximate~~there were no assets and liabilities associated with disposal groups classified as held for sale as of December 31, 2022 and there were immaterial amounts of ~~major~~ assets and liabilities associated with disposal groups classified as held-for-sale as of ~~September~~June 30, ~~2017 were not significant and, as of December 31, 2016, included the following:~~

December 31,

(Millions)

2016

Accounts receivable

$
25

Property, plant and equipment (net)

25

Intangible assets

35

Deferred revenue (other current liabilities)

35

~~In addition, approximately $50 million and $270 million of goodwill was estimated~~2023. Information related to ~~be attributable to~~other held for sale disposal groups classified as held-for-sale as of September 30, 2017 and December 31, 2016, respectively, based upon relative fair value. The amounts above have not been segregated and are classified within the existing corresponding line items on the Company’s consolidated balance sheet.

~~Refer to~~is included in Note ~~2 in 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K) for more information on 3M’s acquisitions and divestitures.~~

13.

Table of Contents

NOTE 3.4. Goodwill and Intangible Assets

~~Purchased~~

Goodwill

There was no goodwill recorded from acquisitions ~~totaled $6 million~~ during the first ~~nine~~six months of ~~2017, all of which is deductible for tax purposes.~~2023. The amounts in the “Translation and other” ~~column~~row in the following table primarily relate to changes in foreign currency exchange rates.

The goodwill ~~balances~~balance by business segment ~~as of December 31, 2016 and September 30, 2017, follow:~~

~~Goodwill~~

follows:

December 31, 2016

Acquisition

Divestiture

Translation

September 30, 2017

(Millions)

Balance

activity

activity

and other

Balance

Industrial

$
2,536

$
—

$
—

$
128

$
2,664

Safety and Graphics

3,324

—

(276)

98

3,146

Health Care

1,609

6

—

59

1,674

Electronics and Energy

1,489

—

—

37

1,526

Consumer

208

—

—

3

211

Total Company

$
9,166

$
6

$
(276)

$
325

$
9,221


(Millions)	Safety and Industrial		Transportation and Electronics		Health Care		Consumer		Total Company




Balance as of December 31, 2022	$	4,509	$	1,501	$	6,515	$	265	$	12,790



Translation and other	12		9		56		2		79
Balance as of June 30, 2023	$	4,521	$	1,510	$	6,571	$	267	$	12,869

Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as ~~a change in reporting units~~when events or ~~the testing of recoverability of a significant asset group within~~conditions indicate that goodwill assigned to a reporting ~~unit.~~unit may be impaired. At 3M, reporting units ~~generally~~ correspond to a division.

As described in Note ~~14,~~15, effective in the first quarter of ~~2017, the Company~~2023, 3M changed its measure of segment operating performance and the composition of reportable segments and realigned divisions within the Consumer business ~~segment reporting in its continuing effort to improve the alignment of its businesses around markets and customers.~~segment. For any ~~product~~ changes that resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact on goodwill of the associated reporting units. ~~During~~The impacts of these changes on reported amounts were immaterial and resulted in no impairment. As of June 30, 2023, the ~~first quarter of 2017, the Company completed its assessment of any potential~~Company's accumulated goodwill impairment ~~for reporting units impacted by this new structure and determined that no impairment existed.~~

loss is $0.3 billion.

Acquired Intangible Assets

The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of non-amortizable intangible assets ~~as of September 30, 2017, and December 31, 2016,~~ follow:

September 30,

December 31,

(Millions)

2017

2016

Customer related intangible assets

$
1,924

$
1,939

Patents

586

602

Other technology-based intangible assets

478

524

Definite-lived tradenames

393

420

Other amortizable intangible assets

211

211

Total gross carrying amount

$
3,592

$
3,696

Accumulated amortization — customer related

(865)

(797)

Accumulated amortization — patents

(500)

(497)

Accumulated amortization — other technology based

(293)

(302)

Accumulated amortization — definite-lived tradenames

(238)

(236)

Accumulated amortization — other

(167)

(173)

Total accumulated amortization

$
(2,063)

$
(2,005)

Total finite-lived intangible assets — net

$
1,529

$
1,691

Non-amortizable intangible assets (primarily tradenames)

646

629

Total intangible assets — net

$
2,175

$
2,320



(Millions)	June 30, 2023		December 31, 2022
Customer related intangible assets	$	4,084	$	4,062
Patents	429		426
Other technology-based intangible assets	2,089		2,081
Definite-lived tradenames	1,167		1,166
Other amortizable intangible assets	82		84
Total gross carrying amount	7,851		7,819

Accumulated amortization — customer related	(1,872)		(1,747)
Accumulated amortization — patents	(426)		(421)
Accumulated amortization — other technology-based	(1,098)		(1,000)
Accumulated amortization — definite-lived tradenames	(543)		(509)
Accumulated amortization — other	(59)		(60)
Total accumulated amortization	(3,998)		(3,737)

Total finite-lived intangible assets — net	3,853		4,082

Non-amortizable intangible assets (primarily tradenames)	617		617
Total intangible assets — net	$	4,470	$	4,699

~~Table of Contents~~

Certain tradenames acquired by 3M ~~does~~are not ~~amortize certain acquired tradenames~~amortized because they have been in existence for over 5560 years, have a history of leading-market share positions, have been and are intended to be continuously renewed, and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time.

Table of Contents

Amortization expense ~~for acquired intangible assets for the three and nine months ended September 30, 2017 and 2016~~ follows:


	Three months ended				Nine months ended
	September 30,				September 30,					Three months ended June 30,				Twelve months ended December 31,
(Millions)	2017		2016		2017		2016		(Millions)	2023		2022		2023		2022
Amortization expense	$	51	$	63	$	162	$	195	Amortization expense	$	121	$	129	$	243	$	260

Expected amortization expense for acquired amortizable intangible assets recorded as of ~~September~~June 30, ~~2017:~~

2023 follows:


	Remainder
	of												After
(Millions)	2017		2018		2019		2020		2021		2022		2022		(Millions)	Remainder of 2023		2024		2025		2026		2027		2028		After 2028
Amortization expense	$	49	$	192	$	183	$	174	$	162	$	148	$	602	Amortization expense	$	236	$	453	$	423	$	418	$	398	$	379	$	1,546

The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events. The table above excludes the impact of the carrying value of finite-lived intangible assets associated with disposal groups classified as held-for-sale at September 30, 2017. See Note 2 for additional details. 3M expenses the costs incurred to renew or extend the term of intangible assets.

NOTE 5. Restructuring Actions

2023 to 2025 Structural Reorganization Actions

In the first quarter of 2023, 3M announced it would undertake structural reorganization actions to reduce the size of the corporate center of the Company, simplify supply chain, streamline 3M’s geographic footprint, reduce layers of management, further align business go-to-market models to customers, and reduce manufacturing roles to align with production volumes. During the first six months of 2023, management approved and committed to undertake associated actions impacting approximately 5,100 positions resulting in a pre-tax charge of $52 million and $212 million in the first and second quarters of 2023, respectively. Remaining activities related to the restructuring actions approved and committed under this initiative are expected to be largely completed through the end of 2023. 3M expects to commit to further actions under this initiative. This aggregate initiative beginning in the first quarter of 2023 and continuing through 2025 is expected to impact approximately 8,500 positions worldwide with an expected pre-tax charge of $700 million to $900 million over that period.

The related restructuring charges for periods presented were recorded in the income (loss) statement as follows:


(Millions)	Three months ended June 30, 2023		Six months ended June 30, 2023
Cost of sales	$	47	$	63
Selling, general and administrative expenses	146		178
Research, development and related expenses	19		23
Total operating income impact	$	212	$	264

The business segment operating income (loss) impact of these restructuring charges is summarized as follows:


	Three months ended June 30, 2023						Six months ended June 30, 2023
(Millions)	Employee Related		Asset-Related and Other		Total		Employee Related		Asset-Related and Other		Total
Safety and Industrial	$	44	$	—	$	44	$	54	$	—	$	54
Transportation and Electronics	25		—		25		37		—		37
Health Care	10		—		10		12		—		12
Consumer	13		—		13		16		—		16
Corporate and unallocated	100		20		120		125		20		145
Total operating expense	$	192	$	20	$	212	$	244	$	20	$	264

Table of Contents

~~NOTE 4.~~Restructuring actions, including cash and non-cash impacts, follow:


(Millions)	Employee-Related		Asset-Related and Other		Total
Expense incurred in the first quarter of 2023	$	52	$	—	$	52
Incremental expense incurred in the second quarter of 2023	192		20		212


Non-cash changes	—		(20)		(20)
Cash payments	(56)		—		(56)
Accrued restructuring action balance as of June 30, 2023	$	188	$	—	$	188

2022 Restructuring Actions ~~and Exit Activities~~

~~2017 Restructuring Actions:~~

~~During~~

Operational/Marketing Capability Restructuring:

As described in Note 5 in 3M's 2022 Annual Report on Form 10-K, in late 2020, 3M announced it would undertake certain actions beginning in the ~~second~~fourth quarter of ~~2017,~~2020 to further enhance its operations and marketing capabilities to take advantage of certain global market trends while de-prioritizing investments in slower-growth end markets. In the first quarter of 2022, management approved and committed to undertake the remaining actions under this initiative resulting in a pre-tax charge of $18 million. This initiative, beginning in 2020 and ending with committed first quarter 2022 actions, impacted approximately 3,100 positions worldwide with a pre-tax charge of approximately $280 million over that period. Activities related to this restructuring were largely completed in the third quarter of 2022.

Divestiture-Related Restructuring:

As described in Note 5 in 3M's 2022 Annual Report on Form 10-K, during the third quarter of 2022, following the Food Safety Division split-off transaction and combination with Neogen completed in September 2022 (see Note 3 in 3M's 2022 Annual Report on Form 10-K) management approved and committed to undertake certain restructuring actions ~~primarily focused on portfolio and footprint optimization.~~ addressing corporate functional costs across 3M in relation to the magnitude of amounts previously allocated to the divested business.

These actions affected approximately ~~1,300~~850 positions worldwide and resulted in a ~~second~~third quarter ~~2017~~2022 pre-tax ~~charges~~charge of ~~$99 million. Remaining~~$41 million, within Corporate and Unallocated. The associated accrued restructuring balance as of December 31, 2022 was $10 million and remaining activities related to this divestiture-related restructuring ~~are expected to be~~were largely completed bythrough the ~~end~~first half of ~~2018.~~

~~Components~~2023.

NOTE 6. Supplemental Income (Loss) Statement Information

Other expense (income), net consists of ~~these restructuring charges are summarized by business segment as follows:~~

the following:

Second Quarter 2017

(Millions)

Employee-Related

Industrial

$
39

Safety and Graphics

9

Health Care

2

Electronics and Energy

7

Consumer

36

Corporate and Unallocated

6

Total Expense

$
99


	Three months ended June 30,				Six months ended June 30,
(Millions)	2023		2022		2023		2022
Interest expense	$	144	$	128	$	267	$	241
Interest income	(48)		(11)		(88)		(19)
Pension and postretirement net periodic benefit cost (benefit)	(31)		(67)		(62)		(134)
Total	$	65	$	50	$	117	$	88

~~The preceding restructuring charges were recorded~~

Pension and postretirement net periodic benefit costs described in the ~~income statement as follows:~~

(Millions)

Second Quarter 2017

Cost of sales

$
86

Selling, general and administrative expenses

5

Research, development and related expenses

8

Total

$
99

~~Components~~table above include all components of ~~these restructuring actions, follow:~~

(Millions)

Employee-Related

Expense incurred in the second quarter of 2017

$
99

Accrued restructuring action balances as of June 30, 2017

$
99

Cash payments

(3)

Accrued restructuring action balances as of September 30, 2017

$
96

~~2017 Exit Activities:~~

Indefined benefit plan net periodic benefit costs except service cost, which is reported in various operating expense lines. Refer to Note 11 for additional details on the ~~first quarter~~components of ~~2017, the Company recorded~~pension and postretirement net ~~pre-tax charges of $24 million related to exit activities. These charges related to employee reductions, primarily in Western Europe.~~

periodic benefit costs.

Table of Contents

NOTE 5.7. Supplemental Equity and Comprehensive Income (Loss) Information

Cash dividends declared and paid totaled $1.50 and $1.49 per share for the first and second quarters of 2023 and 2022, respectively, or $3.00 and $2.98 per share for the first six months of 2023 and 2022, respectively.

Consolidated ~~Statement of~~ Changes in Equity

Three months ended ~~September~~June 30, ~~2017~~

2023


			3M Company Shareholders
			Common						Accumulated
			Stock and						Other
			Additional						Comprehensive		Non-
			Paid-in		Retained		Treasury		Income		controlling					3M Company Shareholders
(Millions)	Total		Capital		Earnings		Stock		(Loss)		Interest		(Millions)	Total		Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interest
Balance at June 30, 2017	$	11,644	$	5,253	$	38,793	$	(25,466)	$	(6,989)	$	53

Net income		1,433				1,429						4
Balance at March 31, 2023													Balance at March 31, 2023	$	15,351	$	6,825	$	47,966	$	(32,963)	$	(6,530)	$	53
Net income (loss)													Net income (loss)	(6,836)				(6,841)						5
Other comprehensive income (loss), net of tax:													Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		44								45		(1)	Cumulative translation adjustment	25								24		1
Defined benefit pension and post-retirement plans adjustment		80								80		—	Defined benefit pension and post-retirement plans adjustment	50								50
Cash flow hedging instruments - unrealized gain (loss)		(49)								(49)		—
Cash flow hedging instruments													Cash flow hedging instruments	23								23
Total other comprehensive income (loss), net of tax		75											Total other comprehensive income (loss), net of tax	98
Dividends declared		(701)				(701)							Dividends declared	(828)				(828)

Stock-based compensation		58		58									Stock-based compensation	42		42
Reacquired stock		(394)						(394)

Issuances pursuant to stock option and benefit plans		87				(67)		154					Issuances pursuant to stock option and benefit plans	30				(7)		37
Balance at September 30, 2017	$	12,202	$	5,311	$	39,454	$	(25,706)	$	(6,913)	$	56
Balance at June 30, 2023													Balance at June 30, 2023	$	7,857	$	6,867	$	40,290	$	(32,926)	$	(6,433)	$	59

~~Nine~~

Three months ended ~~September~~June 30, ~~2017~~

3M Company Shareholders

Common

Accumulated

Stock and

Other

Additional

Comprehensive

Non-

Paid-in

Retained

Treasury

Income

controlling

(Millions)

Total

Capital

Earnings

Stock

(Loss)

Interest

Balance at December 31, 2016

$
10,343

$
5,070

$
37,907

$
(25,434)

$
(7,245)

$
45

Net income

4,344

4,335

9

Other comprehensive income (loss), net of tax:

Cumulative translation adjustment

269

267

2

Defined benefit pension and post-retirement plans adjustment

241

241

—

Cash flow hedging instruments - unrealized gain (loss)

(176)

(176)

—

Total other comprehensive income (loss), net of tax

334

Dividends declared

(2,104)

(2,104)

Stock-based compensation

241

241

Reacquired stock

(1,547)

(1,547)

Issuances pursuant to stock option and benefit plans

591

(684)

1,275

Balance at September 30, 2017

$
12,202

$
5,311

$
39,454

$
(25,706)

$
(6,913)

$
56

2022


			3M Company Shareholders
(Millions)	Total		Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interest
Balance at March 31, 2022	$	15,004	$	6,568	$	46,056	$	(30,860)	$	(6,834)	$	74
Net income	82				78						4
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	(705)								(701)		(4)
Defined benefit pension and post-retirement plans adjustment	85								85
Cash flow hedging instruments	88								88
Total other comprehensive income (loss), net of tax	(532)
Dividends declared	(848)				(848)
Stock-based compensation	48		48


Issuances pursuant to stock option and benefit plans	62				(17)		79
Balance at June 30, 2022	$	13,816	$	6,616	$	45,269	$	(30,781)	$	(7,362)	$	74

Table of Contents

~~Three~~Six months ended ~~September~~June 30, ~~2016~~

2023


			3M Company Shareholders
			Common						Accumulated
			Stock and						Other
			Additional						Comprehensive		Non-
			Paid-in		Retained		Treasury		Income		controlling					3M Company Shareholders
(Millions)	Total		Capital		Earnings		Stock		(Loss)		Interest		(Millions)	Total		Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interest
Balance at June 30, 2016	$	11,658	$	4,972	$	36,915	$	(24,088)	$	(6,184)	$	43

Net income		1,331				1,329						2
Balance at December 31, 2022													Balance at December 31, 2022	$	14,770	$	6,700	$	47,950	$	(33,255)	$	(6,673)	$	48
Net income (loss)													Net income (loss)	(5,855)				(5,865)						10
Other comprehensive income (loss), net of tax:													Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		17								16		1	Cumulative translation adjustment	141								140		1
Defined benefit pension and post-retirement plans adjustment		67								67		—	Defined benefit pension and post-retirement plans adjustment	101								101
Cash flow hedging instruments - unrealized gain (loss)		(45)								(45)		—
Cash flow hedging instruments													Cash flow hedging instruments	(1)								(1)
Total other comprehensive income (loss), net of tax		39											Total other comprehensive income (loss), net of tax	241
Dividends declared		(670)				(670)							Dividends declared	(1,655)				(1,655)

Stock-based compensation		49		49									Stock-based compensation	167		167
Reacquired stock		(771)						(771)					Reacquired stock	(29)						(29)

Issuances pursuant to stock option and benefit plans		133				(108)		241					Issuances pursuant to stock option and benefit plans	218				(140)		358
Balance at September 30, 2016	$	11,769	$	5,021	$	37,466	$	(24,618)	$	(6,146)	$	46
Balance at June 30, 2023													Balance at June 30, 2023	$	7,857	$	6,867	$	40,290	$	(32,926)	$	(6,433)	$	59

~~Nine~~

Six months ended ~~September~~June 30, ~~2016~~

3M Company Shareholders

Common

Accumulated

Stock and

Other

Additional

Comprehensive

Non-

Paid-in

Retained

Treasury

Income

controlling

(Millions)

Total

Capital

Earnings

Stock

(Loss)

Interest

Balance at December 31, 2015

$
11,468

$
4,800

$
36,296

$
(23,308)

$
(6,359)

$
39

Net income

3,902

3,895

7

Other comprehensive income (loss), net of tax:

Cumulative translation adjustment

192

192

—

Defined benefit pension and post-retirement plans adjustment

203

203

—

Cash flow hedging instruments - unrealized gain (loss)

(182)

(182)

—

Total other comprehensive income (loss), net of tax

213

Dividends declared

(2,014)

(2,014)

Stock-based compensation

221

221

Reacquired stock

(2,771)

(2,771)

Issuances pursuant to stock option and benefit plans

750

(711)

1,461

Balance at September 30, 2016

$
11,769

$
5,021

$
37,466

$
(24,618)

$
(6,146)

$
46

2022


			3M Company Shareholders
(Millions)	Total		Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interest
Balance at December 31, 2021	$	15,117	$	6,438	$	45,821	$	(30,463)	$	(6,750)	$	71
Net income	1,385				1,377						8
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	(876)								(871)		(5)
Defined benefit pension and post-retirement plans adjustment	172								172
Cash flow hedging instruments	87								87
Total other comprehensive income (loss), net of tax	(617)
Dividends declared	(1,700)				(1,700)
Stock-based compensation	178		178
Reacquired stock	(773)						(773)

Issuances pursuant to stock option and benefit plans	226				(229)		455
Balance at June 30, 2022	$	13,816	$	6,616	$	45,269	$	(30,781)	$	(7,362)	$	74

Table of Contents

Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component

Three months ended ~~September~~June 30, ~~2017~~

2023


							Total
			Defined Benefit		Cash Flow		Accumulated
			Pension and		Hedging		Other
	Cumulative		Postretirement		Instruments,		Comprehensive
	Translation		Plans		Unrealized		Income
(Millions)	Adjustment		Adjustment		Gain (Loss)		(Loss)		(Millions)	Cumulative Translation Adjustment		Defined Benefit Pension and Postretirement Plans Adjustment		Cash Flow Hedging Instruments, Unrealized Gain (Loss)		Total Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2017, net of tax:	$	(1,786)	$	(5,167)	$	(36)	$	(6,989)
Balance at March 31, 2023, net of tax:									Balance at March 31, 2023, net of tax:	$	(2,712)	$	(3,787)	$	(31)	$	(6,530)
Other comprehensive income (loss), before tax:									Other comprehensive income (loss), before tax:
Amounts before reclassifications		(29)		—		(80)		(109)	Amounts before reclassifications	3		—		72		75
Amounts reclassified out		—		119		2		121	Amounts reclassified out	39		65		(40)		64
Total other comprehensive income (loss), before tax		(29)		119		(78)		12	Total other comprehensive income (loss), before tax	42		65		32		139
Tax effect		74		(39)		29		64	Tax effect	(18)		(15)		(9)		(42)
Total other comprehensive income (loss), net of tax		45		80		(49)		76	Total other comprehensive income (loss), net of tax	24		50		23		97
Balance at September 30, 2017, net of tax:	$	(1,741)	$	(5,087)	$	(85)	$	(6,913)
Balance at June 30, 2023, net of tax:									Balance at June 30, 2023, net of tax:	$	(2,688)	$	(3,737)	$	(8)	$	(6,433)

~~Nine months ended September 30, 2017~~

Total

Defined Benefit

Cash Flow

Accumulated

Pension and

Hedging

Other

Cumulative

Postretirement

Instruments,

Comprehensive

Translation

Plans

Unrealized

Income

(Millions)

Adjustment

Adjustment

Gain (Loss)

(Loss)

Balance at December 31, 2016, net of tax:

$
(2,008)

$
(5,328)

$
91

$
(7,245)

Other comprehensive income (loss), before tax:

Amounts before reclassifications

30

—

(255)

(225)

Amounts reclassified out

—

357

(21)

336

Total other comprehensive income (loss), before tax

30

357

(276)

111

Tax effect

237

(116)

100

221

Total other comprehensive income (loss), net of tax

267

241

(176)

332

Balance at September 30, 2017, net of tax:

$
(1,741)

$
(5,087)

$
(85)

$
(6,913)

Three months ended ~~September~~June 30, ~~2016~~

Total

Defined Benefit

Cash Flow

Accumulated

Pension and

Hedging

Other

Cumulative

Postretirement

Instruments,

Comprehensive

Translation

Plans

Unrealized

Income

(Millions)

Adjustment

Adjustment

Gain (Loss)

(Loss)

Balance at June 30, 2016, net of tax:

$
(1,503)

$
(4,668)

$
(13)

$
(6,184)

Other comprehensive income (loss), before tax:

Amounts before reclassifications

(8)

—

(44)

(52)

Amounts reclassified out

—

103

(24)

79

Total other comprehensive income (loss), before tax

(8)

103

(68)

27

Tax effect

24

(36)

23

11

Total other comprehensive income (loss), net of tax

16

67

(45)

38

Balance at September 30, 2016, net of tax:

$
(1,487)

$
(4,601)

$
(58)

$
(6,146)

2022


(Millions)	Cumulative Translation Adjustment		Defined Benefit Pension and Postretirement Plans Adjustment		Cash Flow Hedging Instruments, Unrealized Gain (Loss)		Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2022, net of tax:	$	(2,113)	$	(4,666)	$	(55)	$	(6,834)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(664)		—		128		(536)
Amounts reclassified out	—		112		(15)		97
Total other comprehensive income (loss), before tax	(664)		112		113		(439)
Tax effect	(37)		(27)		(25)		(89)
Total other comprehensive income (loss), net of tax	(701)		85		88		(528)
Balance at June 30, 2022, net of tax:	$	(2,814)	$	(4,581)	$	33	$	(7,362)

Six months ended June 30, 2023


(Millions)	Cumulative Translation Adjustment		Defined Benefit Pension and Postretirement Plans Adjustment		Cash Flow Hedging Instruments, Unrealized Gain (Loss)		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2022, net of tax:	$	(2,828)	$	(3,838)	$	(7)	$	(6,673)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	108		—		78		186
Amounts reclassified out	39		129		(81)		87
Total other comprehensive income (loss), before tax	147		129		(3)		273
Tax effect	(7)		(28)		2		(33)
Total other comprehensive income (loss), net of tax	140		101		(1)		240
Balance at June 30, 2023, net of tax:	$	(2,688)	$	(3,737)	$	(8)	$	(6,433)

Table of Contents

~~Nine~~Six months ended ~~September~~June 30, ~~2016~~

2022


							Total
			Defined Benefit		Cash Flow		Accumulated
			Pension and		Hedging		Other
	Cumulative		Postretirement		Instruments,		Comprehensive
	Translation		Plans		Unrealized		Income
(Millions)	Adjustment		Adjustment		Gain (Loss)		(Loss)		(Millions)	Cumulative Translation Adjustment		Defined Benefit Pension and Postretirement Plans Adjustment		Cash Flow Hedging Instruments, Unrealized Gain (Loss)		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2015, net of tax:	$	(1,679)	$	(4,804)	$	124	$	(6,359)
Balance at December 31, 2021, net of tax:									Balance at December 31, 2021, net of tax:	$	(1,943)	$	(4,753)	$	(54)	$	(6,750)
Other comprehensive income (loss), before tax:									Other comprehensive income (loss), before tax:
Amounts before reclassifications		111		—		(180)		(69)	Amounts before reclassifications	(814)		—		134		(680)
Amounts reclassified out		—		307		(104)		203	Amounts reclassified out	—		227		(22)		205
Total other comprehensive income (loss), before tax		111		307		(284)		134	Total other comprehensive income (loss), before tax	(814)		227		112		(475)
Tax effect		81		(104)		102		79	Tax effect	(57)		(55)		(25)		(137)
Total other comprehensive income (loss), net of tax		192		203		(182)		213	Total other comprehensive income (loss), net of tax	(871)		172		87		(612)
Balance at September 30, 2016, net of tax	$	(1,487)	$	(4,601)	$	(58)	$	(6,146)
Balance at June 30, 2022, net of tax:									Balance at June 30, 2022, net of tax:	$	(2,814)	$	(4,581)	$	33	$	(7,362)

Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within cumulative translation ~~does~~do include impacts from items such as net investment hedge transactions. Reclassification adjustments are made to avoid double counting in comprehensive income (loss) items that are ~~also~~subsequently recorded as part of net income.

Reclassifications out of Accumulated Other Comprehensive Income (Loss) Attributable to 3M

Amount Reclassified from

Details about Accumulated Other

Accumulated Other Comprehensive Income


Comprehensive Income Components

Three months ended September 30,

Nine months ended September 30,

Location on Income

(Millions)

2017

2016

2017

2016

Statement

Gains (losses) associated with, defined benefit pension and postretirement plans amortization

Transition asset

$
—

$
—

$
—

$
1

See Note 9

Prior service benefit

21

22

65

69

See Note 9

Net actuarial loss

(140)

(125)

(422)

(377)

See Note 9

Total before tax

(119)

(103)

(357)

(307)

Tax effect

39

36

116

104

Provision for income taxes

Net of tax

$
(80)

$
(67)

$
(241)

$
(203)

Cash flow hedging instruments gains (losses)

Foreign currency forward/option contracts

$
(2)

$
24

$
21

$
105

Cost of sales

Interest rate swap contracts

—

—

—

(1)

Interest expense

Total before tax

(2)

24

21

104

Tax effect

—

(9)

(8)

(38)

Provision for income taxes

Net of tax

$
(2)

$
15

$
13

$
66

Total reclassifications for the period, net of tax

$
(82)

$
(52)

$
(228)

$
(137)


Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Location on Income (Loss) Statement
	Three months ended June 30,				Six months ended June 30,
(Millions)	2023		2022		2023		2022
Cumulative translation adjustment
Reclassification adjustment associated with Russia (see Note 13)	$	(39)	$	—	$	(39)	$	—		Selling, general and administrative expenses
Total before tax	(39)		—		(39)		—
Tax effect	—		—		—		—
Net of tax	(39)		—		(39)		—
Defined benefit pension and postretirement plans adjustments
Gains (losses) associated with defined benefit pension and postretirement plans amortization
Transition asset	$	(1)	$	(1)	$	(1)	$	(1)		Other (expense) income, net
Prior service benefit	14		15		27		28			Other (expense) income, net
Net actuarial loss	(78)		(125)		(155)		(252)			Other (expense) income, net
Curtailments/Settlements	—		(1)		—		(2)			Other (expense) income, net
Total before tax	(65)		(112)		(129)		(227)
Tax effect	15		27		28		55			Provision for income taxes
Net of tax	(50)		(85)		(101)		(172)
Cash flow hedging instruments gains (losses)
Foreign currency forward/option contracts	42		17		85		26			Cost of sales
Interest rate contracts	(2)		(2)		(4)		(4)			Interest expense
Total before tax	40		15		81		22
Tax effect	(8)		(3)		(18)		(5)			Provision for income taxes
Net of tax	32		12		63		17
Total reclassifications for the period, net of tax	$	(57)	$	(73)	(77)		$	(155)

Table of Contents

NOTE 6.8. Income Taxes

The ~~Company files~~effective tax rate for the second quarter of 2023 was 24.2 percent on a pre-tax loss, compared to (38.3) percent on pre-tax income ~~tax returns~~ in the ~~U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions,~~prior year. The primary factor that impacted the ~~Company is no longer subject~~comparison of these rates was the second quarter 2022 charge related to ~~U.S. federal, state and local, or non-U.S. income~~steps toward resolving Combat Arms Earplugs litigation (see Note 14). The effective tax ~~examinations by tax authorities~~rate for ~~years before 2005.~~

the first six months of 2023 was 25.2 percent, compared to 16.8 percent in the prior year. The ~~IRS has completed its field examination~~primary factor that impacted the comparison of the ~~Company’s U.S. federal income tax returns for~~six-month rates was the ~~years 2005 through 2014. The Company protested certain IRS positions within these tax years and entered into~~second quarter 2023 charge related to the ~~administrative appeals process~~proposed settlement agreement with ~~the IRS. In December 2012, the Company received a statutory notice of deficiency for the 2006 year. The Company filed a petition in Tax Court~~public water systems in the ~~first quarter of 2013 relating to the 2006 tax year.~~

Currently, the Company is under examination by the IRS for its U.S. federal income tax returns for the years 2015, 2016, and 2017. It is anticipated that the IRS will complete its examination of the Company for 2015 by the end of the fourth quarter of 2017, for 2016 by the end of the first quarter of 2018, and for 2017 by the end of the first quarter of 2019. As of September 30, 2017, the IRS has not proposed any significant adjustments to the Company’s tax positions for which the Company is not adequately reserved.

Payments relating to other proposed assessments arising from the 2005 through 2017 examinations may not be made until a final agreement is reached between the Company and the IRS on such assessments or upon a final resolution resulting from the administrative appeals process or judicial action. In addition to the U.S. federal examination, there is also audit activityUnited States regarding PFAS (discussed in ~~several U.S. state and foreign jurisdictions.~~

3M anticipates changes to the Company’s uncertain tax positions due to the closing and resolution of audit issues for various audit years mentioned above and closure of statutes. Currently, the Company is estimating a decrease in unrecognized tax benefits during the next 12 months as a result of anticipated resolutions of audit issues. Note 14).

The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016~~2022 are ~~$384~~$989 million and ~~$333~~$965 million, respectively.

~~The~~It is reasonably possible that the amount of unrecognized tax benefits could significantly change within the next 12 months. At this time, the Company ~~recognizes interest and penalties accrued related~~is not able to estimate the range by which these potential events could impact 3M’s unrecognized tax benefits in the next 12 months.

At June 30, 2023, 3M’s deferred tax ~~expense. The Company recognized in the consolidated statement~~assets, a component of ~~income~~other assets on a gross basis approximately $8 million and $11 million of expense for the three months ended September 30, 2017 and September 30, 2016, respectively, and approximately $16 million and $8 million of expense for the nine months ended September 30, 2017 and September 30, 2016, respectively. At September 30, 2017 and December 31, 2016, accrued interest and penalties in the consolidated balance sheet, onalso included a ~~gross basis were $64 million and $52 million, respectively. Included in these interest and penalty amounts are interest and penalties~~balance of approximately $2.4 billion as a result of the pre-tax charge related to ~~tax positions for which~~ the ~~ultimate deductibility is highly certain but for which there is uncertainty about~~proposed settlement agreement announced in the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

~~The effective tax rate for the third~~second quarter of ~~2017 was 28.3 percent, compared to 28.5 percent~~2023 with public water systems in the third quarter of 2016, a decrease of 0.2 percentage points. Primary factors that decreased the Company’s effective tax rate on a combined basis by 4.0 percentage points year-on-year included international taxes that were impacted by changes to the geographic mix of income before taxes and prior year cash optimization actions, increased benefits from the R&D tax credit, and other items. This decrease was partially offset by a 3.8 percentage point year-on-year increase to the Company’s effective tax rate. Primary factors that increased the effective tax rate included remeasurements of 3M’s uncertain tax positions and a lower year-on-year excess tax benefit related to employee share-based payments.

The effective tax rate for the first nine months of 2017 was 26.1 percent, compared to 28.3 percent in the first nine months of 2016, a decrease of 2.2 percentage points. Primary factors that decreased the Company’s effective tax rate on a combined basis by 3.0 percentage points for the first nine months of 2017 when compared to the same period for 2016 included international taxes that were impacted by changes to the geographic mix of income before taxes and prior year cash optimization actions, tax benefits resulting from the held-for-sale status of certain legal entities, increased benefits from the R&D tax credit, and other items. This decrease was partially offset by a 0.8 percentage point year-on-year

~~Table of Contents~~

~~increase, which included remeasurements of 3M’s uncertain tax positions and a lower year-on-year excess tax benefit related to employee share-based payments.~~

The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertaintyUnited States regarding ~~their realizability exits.~~PFAS (see Note 14). As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had valuation allowances of ~~$62~~$128 million and ~~$47~~$115 million on its deferred tax assets, respectively.

NOTE 7.9. Marketable Securities

The Company invests in asset-backed securities, certificates of deposit/time deposits, commercial paper, and other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current).


	September 30,		December 31,
(Millions)	2017		2016		(Millions)	June 30, 2023		December 31, 2022

Corporate debt securities	$	10	$	10
Commercial paper		446		14	Commercial paper	$	10	$	213
Certificates of deposit/time deposits		84		197	Certificates of deposit/time deposits	42		21

U.S. municipal securities		3		3	U.S. municipal securities	4		4
Asset-backed securities:
Automobile loan related		14		31
Credit card related		29		18
Other		—		7
Asset-backed securities total		43		56

Current marketable securities	$	586	$	280	Current marketable securities	56		238

U.S. municipal securities	$	17	$	17	U.S. municipal securities	23		23

Non-current marketable securities	$	17	$	17	Non-current marketable securities	23		23

Total marketable securities	$	603	$	297	Total marketable securities	$	79	$	261

~~Classification of marketable securities as current or non-current is based on the nature of the securities and availability for use in current operations.~~

At ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, gross unrealized, gross realized, and net realized gains and/or losses (pre-tax) were not material. The gross amounts of the realized gains or losses were not material. Cost of securities sold use the first in, first out (FIFO) method. Since these marketable securities are classified as available-for-sale securities, changes in fair value will flow through other comprehensive income, with amounts reclassified out of other comprehensive income into earnings upon sale or “other-than-temporary” impairment.

~~3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320,~~ ~~Investments-Debt and Equity Securities~~, when determining the classification of the impairment as “temporary” or “other-than-temporary”. A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of shareholders’ equity. Such an unrealized loss does not reduce net income attributable to 3M for the applicable accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors.

~~Table of Contents~~

The balances at ~~September~~June 30, ~~2017~~2023 for marketable securities by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

(Millions)

September 30, 2017

Due in one year or less

$
582

Due after one year through five years

17

Due after five years through ten years

4

Total marketable securities

$
603


(Millions)	June 30, 2023
Due in one year or less	$	56
Due after one year through five years	15
Due after five years through ten years	8
Total marketable securities	$	79

3M has a diversified marketable securities portfolio. Within this portfolio, asset-backed securities primarily include interests in automobile loans, credit cards and other asset-backed securities. 3M’s investment policy allows investments in asset-backed securities with minimum credit ratings

Table of Aa2 by Moody’s Investors Service or AA by Standard & Poor’s or Fitch Ratings or DBRS. Asset-backed securities must be rated by at least two of the aforementioned rating agencies, one of which must be Moody’s Investors Service or Standard & Poor’s. At September 30, 2017, all asset-backed security investments were in compliance with this policy. Approximately 79.9 percent of all asset-backed security investments were rated AAA or A-1+ by Standard & Poor’s and/or Aaa or P-1 by Moody’s Investors Service and/or AAA or F1+ by Fitch Ratings. Interest rate risk and credit risk related to the underlying collateral may impact the value of investments in asset-backed securities, while factors such as general conditions in the overall credit market and the nature of the underlying collateral may affect the liquidity of investments in asset-backed securities. 3M does not currently expect risk related to its holding in asset-backed securities to materially impact its financial condition or liquidity.

Contents

NOTE 8.10. Long-Term Debt and Short-Term Borrowings

In ~~June 2017,~~February 2023, 3M repaid $500 million aggregate principal amount of fixed-rate registered notes that matured. In March 2023, 3M repaid $650 million aggregate principal amount of ~~fixed rate~~fixed-rate medium-term notes that matured.

In ~~October 2017,~~May 2023, 3M ~~issued $650~~repaid 600 million euros aggregate principal amount of ~~5.5-year fixed rate~~fixed-rate medium-term notes ~~due 2023 with a coupon rate~~that matured.

2022 issuances, maturities, and extinguishments of ~~2.25%, $850 million aggregate principal amount of 10-year fixed rate medium-term notes due 2027 with a coupon rate of 2.875%,~~short- and ~~$500 million aggregate principal amount of 30-year fixed rate medium-term notes due 2047 with a coupon rate of 3.625%.~~

In October 2017, 3M, via cash tender offers, repurchased $305 million aggregate principal amount of its outstanding notes. This included $110 million of its $330 million principal amount of 6.375% notes due 2028 and $195 million of its $750 million principal amount of 5.70% notes due 2037. long-term debt are described in Note 12 to the Consolidated Financial Statements in 3M's 2022 Annual Report on Form 10-K.

The Company ~~will reflect~~had $1.8 billion in commercial paper outstanding at June 30, 2023, compared to no commercial paper outstanding as of December 31, 2022.

In May 2023, 3M entered into a $4.25 billion five-year revolving credit facility expiring in 2028; the facility was amended in July 2023. The revolving credit agreement includes a provision under which 3M may request an ~~early debt extinguishment charge~~increase of ~~approximately $95 million~~up to $1.0 billion (at lender’s discretion), bringing the total facility up to $5.25 billion. The agreement replaced the amended and restated $3.0 billion, five-year revolving credit agreement and the $1.25 billion 364-day credit facility that would have expired in November 2024 and November 2023, respectively. The credit facility was undrawn at June 30, 2023. Under the $4.25 billion credit facility, the Company is required to maintain its EBITDA to Interest Ratio as of the end of each fiscal quarter at not less than 3.0 to 1. This is calculated (based on amounts defined in the ~~fourth quarter~~amended agreement) as the ratio of ~~2017 within~~consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At June 30, 2023, this ratio, reflecting the July 2023 amendment, was approximately 17 to 1. Debt covenants do not restrict the payment of dividends.

Future Maturities of Long-term Debt

Maturities of long-term debt in the table below reflect the impact of put provisions associated with certain debt instruments and are net of the ~~differential between~~unamortized debt issue costs such that total maturities equal the carrying value ~~and~~of long-term debt as of June 30, 2023. The maturities of long-term debt for the ~~amount paid~~periods subsequent to ~~acquire the tendered notes and related expenses.~~

June 30, 2023 are as follows (in millions):


Remainder of 2023		2024		2025		2026		2027		2028		After 2028		Total
$	149	$	1,100	$	1,866	$	1,458	$	846	$	722	$	8,062	$	14,203

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NOTE 9.11. Pension and Postretirement Benefit Plans

~~Net~~

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~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 follow:

Benefit Plan Information


	Three months ended September 30,
	Qualified and Non-qualified													Three months ended June 30,
	Pension Benefits								Postretirement					Qualified and Non-qualified Pension Benefits								Postretirement Benefits
	United States				International				Benefits					United States				International
(Millions)	2017		2016		2017		2016		2017		2016		(Millions)	2023		2022		2023		2022		2023		2022
Net periodic benefit cost (benefit)													Net periodic benefit cost (benefit)
Operating expense													Operating expense
Service cost	$	67	$	64	$	33	$	35	$	13	$	13	Service cost	$	43	$	64	$	20	$	33	$	6	$	10
Non-operating expense													Non-operating expense
Interest cost		141		144		38		45		20		20	Interest cost	165		104		54		32		23		13
Expected return on plan assets		(259)		(261)		(69)		(78)		(21)		(23)	Expected return on plan assets	(244)		(241)		(75)		(70)		(19)		(17)
Amortization of transition (asset) obligation		—		—		—		—		—		—
Amortization of prior service cost (benefit)		(5)		(6)		(3)		(3)		(13)		(13)
Amortization of net actuarial (gain) loss		97		89		29		21		14		15
Amortization of transition asset													Amortization of transition asset	—		—		1		1		—		—
Amortization of prior service benefit													Amortization of prior service benefit	(6)		(6)		—		—		(8)		(9)
Amortization of net actuarial loss													Amortization of net actuarial loss	74		106		2		9		2		10
Settlements, curtailments, special termination benefits and other		—		—		—		—		—		—	Settlements, curtailments, special termination benefits and other	—		—		—		—		—		1
Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other	$	41	$	30	$	28	$	20	$	13	$	12
Total non-operating expense (benefit)													Total non-operating expense (benefit)	(11)		(37)		(18)		(28)		(2)		(2)
Total net periodic benefit cost (benefit)													Total net periodic benefit cost (benefit)	$	32	$	27	$	2	$	5	$	4	$	8

Nine months ended September 30,

Qualified and Non-qualified

Pension Benefits

Postretirement

United States
International

Benefits

(Millions)

2017

2016

2017

2016

2017

2016

Net periodic benefit cost (benefit)

Service cost

$
201

$
194

$
100

$
102

$
38

$
40

Interest cost

425

431

112

131

59

59

Expected return on plan assets

(777)

(782)

(208)

(234)

(63)

(68)

Amortization of transition (asset) obligation

—

—

—

(1)

—

—

Amortization of prior service cost (benefit)

(17)

(18)

(9)

(10)

(39)

(41)

Amortization of net actuarial (gain) loss

291

265

89

66

42

46

Settlements, curtailments, special termination benefits and other

—

—

—

—

—

—

Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other

$
123

$
90

$
84

$
54

$
37

$
36


	Six months ended June 30,
	Qualified and Non-qualified Pension Benefits								Postretirement Benefits
	United States				International
(Millions)	2023		2022		2023		2022		2023		2022
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	86	$	128	$	39	$	68	$	12	$	21
Non-operating expense
Interest cost	331		208		109		64		45		26
Expected return on plan assets	(488)		(482)		(150)		(142)		(38)		(35)
Amortization of transition asset	—		—		1		1		—		—
Amortization of prior service benefit	(12)		(12)		1		—		(16)		(16)
Amortization of net actuarial loss	147		212		4		20		4		20
Settlements, curtailments, special termination benefits and other	—		—		—		—		—		2
Total non-operating expense (benefit)	(22)		(74)		(35)		(57)		(5)		(3)
Total net periodic benefit cost (benefit)	$	64	$	54	$	4	$	11	$	7	$	18

For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023 contributions totaling ~~$311~~$53 million were made to the Company’s U.S. and international pension plans and $3$4 million to its postretirement plans. For total year 2017, the Company expects to contribute approximately $300 million to $500 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 2017. 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.

3M was informed in 2009, that the general partners of WG Trading Company, in which 3M’s benefit plans hold limited partnership interests, are the subject of a criminal investigation as well as civil proceedings by the SEC and CFTC (Commodity Futures Trading Commission). In March 2011, over the objections of 3M and six other limited partners of WG Trading Company, the district court judge ruled in favor of the court appointed receiver’s proposed distribution plan (and in April 2013, the United States Court of Appeals for the Second Circuit affirmed the district court’s ruling). The benefit plan trustee holdings of WG Trading Company interests were adjusted to reflect the decreased estimated fair market value, inclusive of estimated insurance proceeds, as of the annual measurement dates. In the first quarter of 2014, 3M and certain 3M benefit plans filed a lawsuit that was removed by the insurers to the U.S. District Court for the District of Minnesota against five insurers seeking insurance coverage for the WG Trading Company claim. In September 2015, the court ruled in favor of the defendant insurance companies on a motion for summary judgment and

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dismissed the lawsuit. In October 2015, 3M and the 3M benefit plans filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit. In May 2017, the appellate court affirmed the lower court’s decision. The decision will reduce U.S. pension and postretirement plan assets by $73 million at the December 31, 2017 measurement date and will not have a material adverse effect on the consolidated financial position of the Company.

As part of a diversified investment strategy, the U.S. pension and postretirement benefit plans made investments in the natural gas fired power generation industry during the period 2011 through 2013. In April 2017, one of these entities, Panda Temple Power, LLC, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. This investment represented less than one percent of the fair value of the U.S. pension and postretirement plans’ assets as of their 2016 measurement date.

NOTE ~~10.~~12. Derivatives

The Company uses interest rate swaps, currency ~~swaps, commodity price~~ swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate and interest rate ~~and commodity price~~ fluctuations. ~~The information that follows~~Note 14 to the Consolidated Financial Statements in 3M's 2022 Annual Report on Form 10-K explains the ~~various~~ types of derivatives and financial instruments used by 3M, how and why 3M uses such instruments, and how such instruments are accounted ~~for, and how such instruments impact 3M’s financial position and performance.~~

for. It also contains information regarding previously initiated contracts or instruments.

Additional information with respect to ~~the impacts~~derivatives is included elsewhere as follows:

•Impact on other comprehensive income of nonderivative hedging and derivative instruments is included in Note ~~5. Additional information with respect to the fair~~7.

•Fair value of derivative instruments is included in Note ~~11. References to information regarding derivatives~~13.

•Derivatives and/or hedging instruments associated with the Company’s long-term debt are ~~also made~~described in Note 1012 to the Consolidated Financial Statements in ~~3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016~~3M's 2022 Annual Report on Form ~~10-K).~~

~~Types~~10-K.

Refer to the section below titled Statement of ~~Derivatives/Hedging Instruments~~Income (Loss) Location and ~~Inclusion in Income/Other Comprehensive Income~~

Impact of Cash Flow ~~Hedges:~~

~~For derivative instruments that are designated~~ and ~~qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income~~Fair Value Derivative Instruments and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

~~Cash Flow Hedging - Foreign Currency Forward and Option Contracts:~~ The Company enters into foreign exchange forward and option contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. The settlement or extension of these derivatives will result in reclassifications (from accumulated other comprehensive income) to earnings in the period during which the hedged transactions affect earnings. 3M may dedesignate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously accumulated in other comprehensive income for dedesignated hedges remains in accumulated other comprehensive income until the forecasted transaction occurs or becomes probable of not occurring. Changes in the value of derivative instruments after dedesignation are recorded in earnings and are included in the Derivatives Not Designated as Hedging Instruments ~~section below. The maximum length~~for details on the location within the consolidated statements of ~~time over which 3M hedges its exposure to the variability in future cash flows of the forecasted transactions is 36 months.~~

~~Cash Flow Hedging — Interest Rate Contracts:~~ ~~The Company may use forward starting interest rate contracts to hedge exposure to variability in cash flows from interest payments on forecasted debt issuances. The amortization~~income (loss) for amounts of gains and losses ~~on forward starting interest rate swaps~~related to derivative instruments designated as cash flow or fair value hedges (along with similar information relative to the hedged items) and derivatives not designated as hedging instruments. Additional information relative to cash flow hedges, fair value hedges, net investment hedges and derivatives not designated as hedging instruments is included ~~in the tables~~ below as part of the gain/(loss) recognized in income on the effective portion of derivatives as a result of reclassification from accumulated other comprehensive income. Additional information regarding previously issued and terminated interest rate contracts can be found in Note 12 in 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K).

applicable.

Cash Flow Hedges:

~~Table of Contents~~

In the first nine months of 2016, the Company entered into forward starting interest rate swaps that expired in December 2016 with an aggregate notional amount of $300 million as a hedge against interest rate volatility associated with a forecasted issuance of fixed rate debt. Upon issuance of medium-term notes in September 2016, 3M terminated these interest rate swaps. The termination resulted in an immaterial loss within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

In the fourth quarter of 2016, the Company entered into forward starting interest rate swaps with a notional amount of $200 million as a hedge against interest rate volatility associated with a forecasted issuance of fixed rate debt. In the first, second, and third quarters of 2017, the Company entered into additional forward starting interest rate swaps with notional amounts of $200 million in each quarter as hedges against interest rate volatility associated with a forecasted issuance of fixed rate debt. Prior to the issuance of medium-term notes in October 2017, 3M terminated these interest rate swaps. The termination resulted in an immaterial loss within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

As of ~~September~~June 30, ~~2017,~~2023, the Company had a balance of ~~$85~~$8 million associated with the after-tax net unrealized loss associated with cash flow hedging instruments recorded in accumulated other comprehensive ~~income.~~income (loss). This includes a remaining balance of $8$90 million ~~(after tax~~(after-tax loss) related to ~~the~~ forward starting interest rate ~~swaps,~~swap and treasury rate lock contracts, which will be amortized over the respective lives of the ~~debt.~~underlying notes. Based on exchange rates as of ~~September~~June 30, ~~2017,~~2023, of the total after-tax net unrealized balance as of June 30, 2023, 3M expects to reclassify approximately $9$75 million ~~of the~~ after-tax net unrealized ~~foreign exchange cash flow hedging losses to earnings~~gain over the remainder of 2017, approximately $44 million of the after-tax net unrealized foreign exchange cash flow hedging losses to earnings in 2018, and approximately $32 million of the after-tax net unrealized foreign exchange cash flow hedging losses to earnings after 2018next 12 months (with the impact offset by earnings/losses from underlying hedged items). ~~3M expects to reclassify approximately $50 million~~

The amount of ~~the after-tax net unrealized foreign exchange cash flow hedging losses to earnings over the next 12 months.~~

~~The location~~pretax gain (loss) recognized in ~~the consolidated statements of income and~~other comprehensive income ~~and amounts of gains and losses~~(loss) related to derivative instruments designated as cash flow hedges ~~are~~is provided in the following table.

Pretax Gain (Loss) Recognized in

Pretax Gain (Loss)

Income on Effective Portion of

Ineffective Portion of Gain

Recognized in Other

Derivative as a Result of

(Loss) on Derivative and

Comprehensive

Reclassification from

Amount Excluded from

Income on Effective

Accumulated Other

Effectiveness Testing

Three months ended September 30, 2017

Portion of Derivative

Comprehensive Income

Recognized in Income

(Millions)

Amount

Location

Amount

Location

Amount

Foreign currency forward/option contracts

$
(77)

Cost of sales

$
(2)

Cost of sales

$
—

Interest rate swap contracts

(3)

Interest expense

—

Interest expense

—

Total

$
(80)

$
(2)

$
—

Nine months ended September 30, 2017

Portion of Derivative

Comprehensive Income

Recognized in Income

(Millions)

Amount

Location

Amount

Location

Amount

Foreign currency forward/option contracts

$
(249)

Cost of sales

$
21

Cost of sales

$
—

Interest rate swap contracts

(6)

Interest expense

—

Interest expense

—

Total

$
(255)

$
21

$
—

Three months ended September 30, 2016

Portion of Derivative

Comprehensive Income

Recognized in Income

(Millions)

Amount

Location

Amount

Location

Amount

Foreign currency forward/option contracts

$
(47)

Cost of sales

$
24

Cost of sales

$
—

Interest rate swap contracts

3

Interest expense

—

Interest expense

—

Total

$
(44)

$
24

$
—

Nine months ended September 30, 2016

Portion of Derivative

Comprehensive Income

Recognized in Income

(Millions)

Amount

Location

Amount

Location

Amount

Foreign currency forward/option contracts

$
(178)

Cost of sales

$
105

Cost of sales

$
—

Interest rate swap contracts

(2)

Interest expense

(1)

Interest expense

—

Total

$
(180)

$
104

$
—


	Pretax Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivative
	Three months ended June 30,				Six months ended June 30,
(Millions)	2023		2022		2023		2022
Foreign currency forward/option contracts	$	72	$	128	$	78	$	134
Interest rate contracts	—		—		—		—
Total	$	72	$	128	$	78	$	134

Fair Value Hedges:

3M had a fixed-to-floating interest rate swap that was terminated in 2007 with respect to the Company's 30-year $220 million principal amount debenture due in 2028. As this debt is still outstanding, its carrying value includes the remaining basis adjustment from this discontinued fair value hedge.

The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for active fair value hedges, as well as remaining amounts for discontinued fair value hedges:


(Millions)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
Location on the Consolidated Balance Sheet	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022

Long-term debt	$	907	$	903	$	(96)	$	(98)

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~~Fair Value Hedges:~~

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.

~~Fair Value Hedging - Interest Rate Swaps:~~ The Company manages interest expense using a mix of fixed and floating rate debt. To help manage borrowing costs, the Company may enter into interest rate swaps. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense. These fair value hedges are highly effective and, thus, there is no impact on earnings due to hedge ineffectiveness. Additional information regarding designated interest rate swaps can be found in Note 12 in 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K).

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items are as follows:


	~~Gain (Loss) on Derivative~~			~~Gain (Loss) on Hedged Item~~
~~Three months ended September 30, 2017~~	~~Recognized in Income~~			~~Recognized in Income~~
~~(Millions)~~	~~Location~~	~~Amount~~		~~Location~~	~~Amount~~
~~Interest rate swap contracts~~	~~Interest expense~~	$	—	~~Interest expense~~	$	—
~~Total~~		$	—		$	—

Nine months ended September 30, 2017

(Millions)

Location

Amount

Location

Amount

Interest rate swap contracts

Interest expense

$
(4)

Interest expense

$
4

Total

$
(4)

$
4

Three months ended September 30, 2016

(Millions)

Location

Amount

Location

Amount

Interest rate swap contracts

Interest expense

$
(10)

Interest expense

$
10

Total

$
(10)

$
10

Nine months ended September 30, 2016

(Millions)

Location

Amount

Location

Amount

Interest rate swap contracts

Interest expense

$
24

Interest expense

$
(24)

Total

$
24

$
(24)

Net Investment Hedges:

The Company may use non-derivative (foreign currency denominated debt) and derivative (foreign exchange forward contracts) instruments to hedge portions of the Company’s investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within other comprehensive income. The remainder of the change in value of such instruments is recorded in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. To the extent foreign currency denominated debt is not designated in or is dedesignated from a net investment hedge relationship, changes in value of that portion of foreign currency denominated debt due to exchange rate changes are recorded in earnings through their maturity date.

3M’s use of foreign exchange forward contracts designated in hedges of the Company’s net investment in foreign subsidiaries can vary by time period depending on when foreign currency denominated debt balances designated in such relationships are dedesignated, matured, or are newly issued and designated. Additionally, variation can occur in connection with the extent of the Company’s desired foreign exchange risk coverage.

~~Table of Contents~~

At ~~September~~June 30, ~~2017,~~2023, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately ~~250~~150 million ~~Euros and approximately 248 billion South Korean Won,~~euros, along with a principal amount of long-term debt instruments designated in net investment hedges totaling ~~4.4~~1.8 billion ~~Euros.~~euros. The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from ~~2017~~2023 to 2031.

The ~~location~~amount of gain (loss) excluded from effectiveness testing recognized in ~~the consolidated statements~~income relative to instruments designated in net investment hedge relationships is not material. The amount of ~~income and~~pretax gain (loss) recognized in other comprehensive income ~~and amounts of gains and losses~~(loss) related to derivative and nonderivative instruments designated as net investment hedges are as follows. ~~There were no reclassifications of the effective portion of net investment hedges out of accumulated other comprehensive income into income for the periods presented in the table below.~~


	Pretax Gain (Loss)						Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income (Loss)
	Recognized as						Three months ended June 30,				Six months ended June 30,
	Cumulative Translation
	within Other		Ineffective Portion of Gain (Loss) on
	Comprehensive Income		Instrument and Amount Excluded
	on Effective Portion of		from Effectiveness Testing
Three months ended September 30, 2017	Instrument		Recognized in Income
(Millions)	Amount		Location	Amount		(Millions)	2023		2022		2023		2022
Foreign currency denominated debt	$	(179)	N/A	$	—	Foreign currency denominated debt	$	(22)	$	133	$	(65)	$	192
Foreign currency forward contracts		(9)	Cost of sales		1	Foreign currency forward contracts	(1)		9		(3)		11
Total	$	(188)		$	1	Total	$	(23)	$	142	$	(68)	$	203

Nine months ended September 30, 2017

Comprehensive Income

Instrument and Amount Excluded

(Millions)

Amount

Location

Amount

Foreign currency denominated debt

$
(570)

N/A

$
—

Foreign currency forward contracts

(36)

Cost of sales

6

Total

$
(606)

$
6


~~Three months ended September 30, 2016~~	~~Comprehensive Income~~		~~Instrument and Amount Excluded~~
~~(Millions)~~	~~Amount~~		~~Location~~	~~Amount~~
~~Foreign currency denominated debt~~	$	~~(55)~~	~~N/A~~	$	—
~~Foreign currency forward contracts~~		~~(14)~~	~~Cost of sales~~		—
~~Total~~	$	~~(69)~~		$	—

Nine months ended September 30, 2016

Comprehensive Income

Instrument and Amount Excluded

(Millions)

Amount

Location

Amount

Foreign currency denominated debt

$
(105)

N/A

$
—

Foreign currency forward contracts

(41)

Cost of sales

1

Total

$
(146)

$
1

Derivatives Not Designated as Hedging Instruments:

Derivatives not designated as hedging instruments include de-designated foreign currency forward and option contracts that formerly were designated in cash flow hedging relationships (as referenced in the Cash Flow Hedges section above). In addition, 3M enters into foreign ~~exchange forward~~currency contracts that are not designated in ~~hedge~~hedging relationships to offset, in part, the impacts of changes in value of various non-functional currency denominated items including certain intercompany transactions and to further mitigate short-term currency impacts. In addition, the Company enters into commodity price swaps to offset, in part, fluctuations in costs associated with the use of certain precious metals.financing balances. These derivative instruments are not designated in hedging relationships; therefore, fair value gains and losses on these contracts are recorded in earnings. The Company does not hold or issue derivative financial instruments for trading purposes.

The Company revised amounts previously presented in the table below for the gain (loss) on derivatives recognized in income for the three and nine months ended September 30, 2016 relative to foreign currency forward contracts. This immaterial correction decreased the previously presented amount of the gain recognized in income in the disclosure table below by $4 million and $22 million for the three and nine months ended September 30, 2016, respectively. This revision had no impact on the Company’s consolidated results of operations, financial condition, or cash flows.

Table of Contents

Statement of Income (Loss) Location and Impact of Cash Flow and Fair Value Derivative Instruments and Derivatives Not Designated as Hedging Instruments

The location in the consolidated ~~statements~~statement of income (loss) and pre-tax amounts ~~of gains and losses~~recognized in income related to derivative instruments designated in cash flow or fair value hedging relationships and for derivatives not designated as hedging instruments are as follows:

Three months ended September 30, 2017

Nine months ended September 30, 2017

Gain (Loss) on Derivative Recognized in

Gain (Loss) on Derivative Recognized in

Income

Income

(Millions)

Location

Amount


Location

Amount

Foreign currency forward/option contracts

Cost of sales

$
3

Cost of sales

$
8

Foreign currency forward contracts

Interest expense

(67)

Interest expense

(163)

Total

$
(64)

$
(155)

Three months ended September 30, 2016

Nine months ended September 30, 2016

Gain (Loss) on Derivative Recognized in

Gain (Loss) on Derivative Recognized in

Income

Income

(Millions)

Location

Amount


Location

Amount

Foreign currency forward/option contracts

Cost of sales

$
(1)

Cost of sales

$
(7)

Foreign currency forward contracts

Interest expense

17

Interest expense

41

Total

$
16

$
34


	Location and Amount of Gain (Loss) Recognized in Income (Loss)
	Three months ended June 30,								Six months ended June 30,
	Cost of sales				Other expense (income), net				Cost of sales				Other expense (income), net
(Millions)	2023		2022		2023		2022		2023		2022		2023		2022
Information regarding cash flow and fair value hedging relationships:
Total amounts of income and expense line items presented in the consolidated statement of income (loss) in which the effects of derivatives are recorded	$	4,606	$	5,093	$	65	$	50	$	9,219	$	9,919	$	117	$	88
Gain or (loss) on cash flow hedging relationships:
Foreign currency forward/option contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income	42		17		—		—		85		26		—		—
Interest rate contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	—		—		(2)		(2)		—		—		(4)		(4)
Gain or (loss) on fair value hedging relationships:
Interest rate contracts:
Hedged items	—		—		9		23		—		—		(3)		71
Derivatives designated as hedging instruments	—		—		(9)		(23)		—		—		3		(71)

Information regarding derivatives not designated as hedging instruments:
Gain or (loss) on derivatives not designated as instruments:
Foreign currency forward/option contracts	(13)		(46)		39		(1)		(5)		(66)		13		24

Table of Contents

Location, ~~and~~ Fair Value, ~~Amount~~and Gross Notional Amounts of Derivative Instruments

The following tables summarize the fair value of 3M’s derivative instruments, excluding nonderivative instruments used as hedging instruments, and their location in the consolidated balance sheet. Notional amounts below are presented at period end foreign exchange rates, except for certain interest rate swaps, which are presented using the ~~contract~~ inception date’s foreign exchange rate. ~~Additional information with respect to the fair value of derivative instruments is included in Note 11.~~


	Gross		Assets			Liabilities					Gross Notional Amount						Assets											Liabilities
September 30, 2017	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount		(Millions)							Gross Notional Amount						Location				Fair Value Amount								Location					Fair Value Amount
Derivatives designated as
hedging instruments
(Millions)									(Millions)		June 30, 2023			December 31, 2022									Location					June 30, 2023			December 31, 2022					Location					June 30, 2023	December 31, 2022

Foreign currency forward/option contracts	$	2,215	Other current assets	$	12	Other current liabilities	$	80		Foreign currency forward/option contracts		$	4,188		$	2,368		Other current assets			$	104				$	89			Other current liabilities				$	28				$	27
Foreign currency forward/option contracts		1,431	Other assets		24	Other liabilities		52	Foreign currency forward/option contracts		706			835			Other assets		39						55				Other liabilities				9					9
Interest rate swap contracts		450	Other current assets		—	Other current liabilities		1
Interest rate swap contracts		1,303	Other assets		22	Other liabilities		2
Interest rate contracts									Interest rate contracts		800			800			Other assets		—				—					Other liabilities			99					102
Total derivatives designated as hedging instruments				$	58		$	135	Total derivatives designated as hedging instruments										143				144								136					138

Derivatives not designated as
hedging instruments
Derivatives not designated as hedging instruments									Derivatives not designated as hedging instruments
Foreign currency forward/option contracts	$	6,414	Other current assets	$	19	Other current liabilities	$	47	Foreign currency forward/option contracts		3,089			2,816			Other current assets		12				73					Other current liabilities			15					4
Total derivatives not designated as hedging instruments				$	19		$	47	Total derivatives not designated as hedging instruments										12				73								15					4

Total derivative instruments				$	77		$	182	Total derivative instruments										$	155			$	217							$	151				$	142

Gross

Assets

Liabilities

December 31, 2016

Notional

Fair

Fair

(Millions)

Amount

Location

Value Amount

Location

Value Amount

Derivatives designated as

hedging instruments

Foreign currency forward/option contracts

$
2,160

Other current assets

$
107

Other current liabilities

$
9

Foreign currency forward/option contracts

1,459

Other assets

86

Other liabilities

3

Interest rate swap contracts

1,953

Other assets

25

Other current liabilities

1

Total derivatives designated as hedging instruments

$
218

$
13

Derivatives not designated as

hedging instruments

Foreign currency forward/option contracts

$
5,655

Other current assets

$
41

Other current liabilities

$
82

Total derivatives not designated as hedging instruments

$
41

$
82

Total derivative instruments

$
259

$
95

Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments

The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency ~~swaps, commodity price~~ swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. As of September 30, 2017, 3M has International Swaps and Derivatives Association (ISDA) agreements with 17 applicable banks and financial institutions which contain netting provisions. In addition to a master agreement with 3M supported by a primary counterparty’s parent guarantee, 3M also has associated credit support agreements in place with 16 of its primary derivative counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral (when the market value of transactions covered by these agreements exceeds specified thresholds or if a counterparty’s credit rating has been

~~Table of Contents~~

~~downgraded to a predetermined rating).~~ The Company does not anticipate nonperformance by any of these counterparties.

3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. However, the following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period based on the 3M entity that is a party to the transactions. Derivatives not subject to master netting agreements are not eligible for net presentation. As

Table of ~~the applicable dates presented below, no collateral had been received or pledged related to these derivative instruments.~~

Contents

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties


			Gross Amounts not Offset in the							Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet						Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
			Consolidated Balance Sheet that are Subject												Gross Amount of Eligible Offsetting Recognized Derivative Liabilities						Cash Collateral Received						Net Amount of Derivative Assets
	Gross Amount of		to Master Netting Agreements
	Derivative Assets		Gross Amount of
	Presented in the		Eligible Offsetting
September 30, 2017	Consolidated		Recognized		Cash Collateral		Net Amount of
(Millions)	Balance Sheet		Derivative Liabilities		Received		Derivative Assets		(Millions)			June 30, 2023			December 31, 2022			June 30, 2023			December 31, 2022			June 30, 2023			December 31, 2022			June 30, 2023			December 31, 2022
Derivatives subject to master netting agreements	$	77	$	34	$	—	$	43	Derivatives subject to master netting agreements	$	155		$	217		$	46		$	40		$	—		$	—		$	109		$	177
Derivatives not subject to master netting agreements		—						—	Derivatives not subject to master netting agreements	—			—															—			—
Total	$	77					$	43	Total	$	155		$	217														$	109		$	177

December 31, 2016

(Millions)

Derivatives subject to master netting agreements

$
259

$
39

$
—

$
220

Derivatives not subject to master netting agreements

—

—

Total

$
259

$
220

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties

Gross Amounts not Offset in the




Consolidated Balance Sheet that are Subject


Gross Amount of

to Master Netting Agreements

Derivative Liabilities

Gross Amount of

Presented in the

Eligible Offsetting

September 30, 2017

Consolidated

Recognized

Cash Collateral

Net Amount of

(Millions)

Balance Sheet

Derivative Assets

Pledged

Derivative Liabilities

Derivatives subject to master netting agreements

$
182

$
34

$
—

$
148

Derivatives not subject to master netting agreements

—

—

Total

$
182

$
148

December 31, 2016

(Millions)

Derivatives subject to master netting agreements

$
93

$
39

$
—

$
54

Derivatives not subject to master netting agreements

2

2

Total

$
95

$
56


	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet				Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
					Gross Amount of Eligible Offsetting Recognized Derivative Assets				Cash Collateral Received				Net Amount of Derivative Liabilities
(Millions)	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Derivatives subject to master netting agreements	$	150	$	142	$	46	$	40	$	—	$	—	$	104	$	102
Derivatives not subject to master netting agreements	1		—										1		—
Total	$	151	$	142									$	105	$	102

~~Table of Contents~~

Currency Effects

3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, ~~decreased~~increased pre-tax income (loss) by approximately ~~$34~~$38 million and ~~$99~~$74 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, respectively, and increased pre-tax income (loss) by approximately $10 million and $27 million for the three and six months ended June 30, 2022, respectively. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate ~~risks and any impacts from swapping Venezuelan bolivars into U.S. dollars.~~

risks.

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NOTE ~~11.~~13. Fair Value Measurements

3M 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. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant

In addition to the ~~fair value measurement.~~

~~Assets and Liabilities that are Measured at Fair Value~~information above, refer to Note 15 to the Consolidated Financial Statements in 3M's 2022 Annual Report on Form 10-K for a ~~Recurring Basis:~~

~~For 3M,~~qualitative discussion of the assets and liabilities that are measured at fair value on a recurring ~~basis primarily relate to available-for-sale marketable securities~~ and certain derivative instruments. Derivatives include cash flow hedges, interest rate swaps and net investment hedges. The information in the following paragraphs and tables primarily addresses matters relative to these financial assets and liabilities. Separately, there were no material fair value measurements with respect to nonfinancial assets or liabilities that are recognized or disclosed at fair value in the Company’s financial statements on a recurringnonrecurring basis, ~~for the three and nine months ended September 30, 2017 and 2016.~~

~~3M uses various valuation techniques, which are primarily based upon the market and income approaches, with respect to financial assets and liabilities. Following is~~ a description of the valuation methodologies used ~~for the respective financial assets~~by 3M, and ~~liabilities measured at fair value.~~

~~Available-for-sale marketable securities — except certain U.S. municipal securities:~~

Marketable securities, except certain U.S. municipal securities, are valued utilizing multiple sources. A weighted average market price is used for these securities. Market prices are obtained for these securities from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple prices are used as inputs into a distribution-curve-based algorithm to determine the daily fair value to be used. 3M classifies U.S. treasury securities as level 1, while all other marketable securities (excluding certain U.S. municipal securities) are classified as level 2. Marketable securities are discussed further in Note 7.

~~Available-for-sale marketable securities — certain U.S. municipal securities only:~~

In both 2016 and 2014, 3M obtained municipal bonds from the City of Nevada, Missouri, which represents 3M’s only U.S. municipal securities holding as of September 30, 2017 and December 31, 2016. Due to the nature of this security,categorization within the valuation method utilized will include the financial health of the City of Nevada, any recent municipal bond issuances by Nevada, and macroeconomic considerations related to the direction of interest rates and the health of the overall municipal bond market, and as such has been classified as a level 3 security.

~~Table of Contents~~

~~Derivative instruments:~~

~~The Company’s derivative assets and liabilities within the scope~~framework of ASC ~~815,~~ ~~Derivatives and Hedging~~, are required to be recorded at fair value. The Company’s derivatives that are recorded at fair value include foreign currency forward and option contracts, commodity price swaps, interest rate swaps, and net investment hedges where the hedging instrument is recorded at fair value. Net investment hedges that use foreign currency denominated debt to hedge 3M’s net investment are not impacted by the fair value measurement standard under ASC 820, as the debt used as the hedging instrument is marked to a value with respect to changes in spot foreign currency exchange rates and not with respect to other factors that may impact fair value.

3M has determined that foreign currency forwards, commodity price swaps, currency swaps, foreign currency options, interest rate swaps and cross-currency swaps will be considered level 2 measurements. 3M uses inputs other than quoted prices that are observable for the asset. These inputs include foreign currency exchange rates, volatilities, and interest rates. Derivative positions are primarily valued using standard calculations or models that use, as their basis, readily observable market parameters. Industry standard data providers are 3M’s primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third-party or counterparty quotes and a net present value stream of cash flows model.

820.

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis.

Fair Value Measurements

Description

Fair Value at

Using Inputs Considered as

(Millions)

September 30, 2017

Level 1

Level 2

Level 3

Assets:

Available-for-sale:

Marketable securities:

Corporate debt securities

$
10

$
—

$
10

$
—

Commercial paper

446

—

446

—

Certificates of deposit/time deposits

84

—

84

—

Asset-backed securities:

Automobile loan related

14

—

14

—

Credit card related

29

—

29

—

U.S. municipal securities

20

—

—

20

Derivative instruments — assets:

Foreign currency forward/option contracts

55

—

55

—

Interest rate swap contracts

22

—

22

—

Liabilities:

Derivative instruments — liabilities:

Foreign currency forward/option contracts

179

—

179

—

Interest rate swap contracts

3

—

3

—


	Fair Value at				Fair Value Measurements Using Inputs Considered as
					Level 1				Level 2				Level 3
Description (Millions)	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Assets:
Available-for-sale:
Marketable securities:

Commercial paper	$	10	$	213	$	—	$	—	$	10	$	213	$	—	$	—
Certificates of deposit/time deposits	42		21		—		—		42		21		—		—

U.S. municipal securities	27		27		—		—		—		—		27		27
Derivative instruments — assets:
Foreign currency forward/option contracts	155		217		—		—		155		217		—		—


Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts	52		40		—		—		52		40		—		—
Interest rate contracts	99		102		—		—		99		102		—		—

~~Table of Contents~~

Fair Value Measurements

Description

Fair Value at

Using Inputs Considered as

(Millions)

December 31, 2016

Level 1

Level 2

Level 3

Assets:

Available-for-sale:

Marketable securities:

Corporate debt securities

$
10

$
—

$
10

$
—

Commercial paper

14

—

14

—

Certificates of deposit/time deposits

197

—

197

—

Asset-backed securities:

Automobile loan related

31

—

31

—

Credit card related

18

—

18

—

Other

7

—

7

—

U.S. municipal securities

20

—

—

20

Derivative instruments — assets:

Foreign currency forward/option contracts

234

—

234

—

Interest rate swap contracts

25

—

25

—

Liabilities:

Derivative instruments — liabilities:

Foreign currency forward/option contracts

94

—

94

—

Interest rate swap contracts

1

—

1

—

The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the table above that used significant unobservable inputs ~~(Level~~(level 3).


	Three months ended				Nine months ended
Marketable securities — certain U.S. municipal securities only	September 30,				September 30,				Marketable securities — certain U.S. municipal securities only	Three months ended June 30,				Six months ended June 30,
(Millions)	2017		2016		2017		2016		(Millions)	2023		2022		2023		2022
Beginning balance	$	20	$	18	$	20	$	12	Beginning balance	$	27	$	30	$	27	$	30
Total gains or losses:									Total gains or losses:
Included in earnings		—		—		—		—
Included in other comprehensive income		—		—		—		—
Included in earnings (losses)									Included in earnings (losses)	—		—		—		—
Included in other comprehensive income (loss)									Included in other comprehensive income (loss)	—		—		—		—
Purchases and issuances		—		—		—		6	Purchases and issuances	—		—		—		—
Sales and settlements		—		—		—		—	Sales and settlements	—		—		—		—
Transfers in and/or out of level 3		—		—		—		—	Transfers in and/or out of level 3	—		—		—		—
Ending balance	$	20	$	18	$	20	$	18	Ending balance	$	27	$	30	$	27	$	30

Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period		—		—		—		—	Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period	—		—		—		—

In addition, the plan assets of 3M’s pension and postretirement benefit plans are measured at fair value on a recurring basis (at least annually). Refer to Note 1113 to the Consolidated Financial Statements in ~~3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016~~3M's 2022 Annual Report on Form ~~10-K).~~

10-K.

Table of Contents

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis:

Disclosures are required for certain assets and liabilities that are measured at fair value, ~~including those~~but are recognized and disclosed at fair value on a nonrecurring basis in periods subsequent to initial recognition. For 3M, such measurements of fair value relate primarily to ~~long-lived asset impairments. During the nine months ended September 30, 2017, the Company recognized approximately $40 million in~~indefinite-lived and long-lived asset impairments, ~~related to its Electronics~~goodwill impairments, and ~~Energy business segment, with~~adjustment in carrying value of equity securities for which the ~~complete carrying amount~~measurement alternative of ~~such assets written off and included in operating income results.~~cost less impairment plus or minus observable price changes is used. There were no material ~~long-lived asset~~ impairments of assets or adjustments to equity securities using the measurement alternative for the ~~three~~first six months ~~ended September 30, 2017~~of 2023 and 2022. As discussed in Note 15 to the ~~three~~Consolidated Financial Statements in 3M's 2022 Annual Report on Form 10-K, in the third quarter of 2022, management committed to a plan to exit and ~~nine months ended September 30, 2016.~~

dispose of net assets in Russia through an intended sale of related subsidiaries and, as a result, recorded this held-for-sale disposal group at the lower of its fair value less cost to sell or carrying amount. In determining the carrying amount, the balance of cumulative translation adjustment within accumulated other comprehensive loss that would be eliminated upon sale was included and a current liability of approximately $50 million was recorded largely representing a reserve against the balance of cumulative translation adjustment. In the second quarter of 2023, 3M closed on the sale of these subsidiaries, resulting in an immaterial gain after reversing this reserve while reclassifying the balance of cumulative translation adjustment into earnings.

~~Table of Contents~~

Fair Value of Financial Instruments:

The Company’s financial instruments include cash and cash equivalents, marketable securities, accounts receivable, certain investments, accounts payable, borrowings, and derivative contracts. The fair values of cash equivalents, accounts receivable, accounts payable, and short-term borrowings and current portion of long-term debt approximated carrying values because of the short-term nature of these instruments. Available-for-sale marketable securities, in addition to certain derivative instruments, are recorded at fair values as indicated in the preceding disclosures. ~~For~~To estimate fair values (classified as level 2) for its long-term debt, the Company utilized third-party quotes, ~~to estimate fair values (classified as level 2).~~which are derived all or in part from model prices, external sources, market prices, or the third-party’s internal records. Information with respect to the carrying amounts and estimated fair values of these financial instruments follow:


	September 30, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair			June 30, 2023				December 31, 2022
(Millions)	Value		Value		Value		Value		(Millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, excluding current portion	$	10,828	$	11,336	$	10,678	$	11,168	Long-term debt, excluding current portion	$	12,954	$	11,471	$	14,001	$	12,484

The fair values reflected in the sections above consider the terms of the related debt absent the impacts of ~~derivative and~~ derivative/hedging activity. The carrying amount of long-term debt referenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair value hedges and by the designation of certain fixed rate Eurobond securities issued by the Company as hedging instruments of the Company’s net investment in its European subsidiaries. ~~Many of 3M’s fixed-rate bonds were trading at a premium at September 30, 2017 and December 31, 2016 due to the low interest rates and tightening of 3M’s credit spreads.~~

NOTE ~~12.~~14. Commitments and Contingencies

Legal Proceedings:

The Company and some of its subsidiaries are involved in numerous claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. These ~~include various~~claims, lawsuits and proceedings relate to matters including, but not limited to, products liability (involving products that the Company now or formerly manufactured and sold), intellectual property, ~~and~~ commercial, ~~claims and lawsuits, including those brought under the~~ antitrust, federal healthcare program related laws and regulations, such as the False Claims Act and anti-kickback laws, securities, and environmental ~~proceedings.~~laws in the United States and other jurisdictions. Unless otherwise stated, the Company is vigorously defending all such ~~litigation. Additional~~litigation and proceedings. From time to time, the Company also receives subpoenas, investigative demands or requests for information ~~about~~from various government agencies in the United States and foreign countries. The Company generally responds in a cooperative, thorough and timely manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company. Such requests can also lead to the assertion of claims or the commencement of administrative, civil, or criminal legal proceedings against the Company and others, as well as to settlements. The outcomes of legal proceedings and regulatory matters are often difficult to predict. Any determination that the Company’s ~~process~~operations or activities are not, or were not, in compliance with applicable laws or regulations could result in the imposition of fines, civil or criminal penalties, and equitable remedies, including disgorgement, suspension or debarment or injunctive relief.

Table of Contents

Process for ~~disclosure~~Disclosure and Recording of Liabilities Related to Legal Proceedings

Many lawsuits and claims involve highly complex issues relating to causation, scientific evidence, and alleged actual damages, all of which are otherwise subject to substantial uncertainties. Assessments of lawsuits and claims can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The categories of legal proceedings in which the Company is involved may include multiple lawsuits and claims, may be spread across multiple jurisdictions and courts which may handle the lawsuits and claims differently, may involve numerous and different types of plaintiffs, raising claims and legal theories based on specific allegations that may not apply to other matters, and may seek substantial compensatory and, in some cases, punitive, damages. These and other factors contribute to the complexity of these lawsuits and claims and make it difficult for the Company to predict outcomes and make reasonable estimates of any resulting losses. The Company's ability to predict outcomes and make reasonable estimates of potential losses is further influenced by the fact that a resolution of one or more matters within a category of legal proceedings may impact the resolution of other matters in that category in terms of timing, amount of liability, or both.

When making determinations about recording of liabilities ~~and insurance receivables~~ related to legal proceedings, the Company complies with the requirements of ASC 450, Contingencies, and related guidance, and records liabilities in those instances where it can reasonably estimate the amount of the loss and when the loss is probable. Where the reasonable estimate of the probable loss is a range, the Company records as an accrual in its financial statements the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be ~~found~~made. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred. Based on experience and developments, the Company reexamines its estimates of probable liabilities and associated expenses and receivables each period, and whether a loss previously determined to not be reasonably estimable and/or not probable is now able to be reasonably estimated or has become probable. Where appropriate, the Company makes additions to or adjustments of its reasonably estimated losses and/or accruals. As a result, the current accruals and/or estimates of loss and the estimates of the potential impact on the Company’s consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company will likely change over time.

Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, the Company may ultimately incur charges substantially in ~~Note 14 “Commitments~~excess of presently recorded liabilities, including with respect to matters for which no accruals are currently recorded because losses are not currently probable and ~~Contingencies”~~reasonably estimable. Many of the matters described herein are at varying stages, seek an indeterminate amount of damages or seek damages in amounts that the Company believes are not indicative of the ultimate losses that may be incurred. It is not uncommon for claims to be resolved over many years. As a matter progresses, the Company may receive information, through plaintiff demands, through discovery, in the ~~Company’s Annual Report~~form of reports of purported experts, or in the context of settlement or mediation discussions that purport to quantify an amount of alleged damages, but with which the Company may not agree. Such information may or may not lead the Company to determine that it is able to make a reasonable estimate as to a probable loss or range of loss in connection with a matter. However, even when a loss or range of loss is not probable and reasonably estimable, developments in, or the ultimate resolution of, a matter could be material to the Company and could have a material adverse effect on ~~Form 10-K~~the Company, its consolidated financial position, results of operations and cash flows. In addition, future adverse rulings or developments, or settlements in, one or more matters could result in future changes to determinations of probable and reasonably estimable losses in other matters.

Process for Disclosure and Recording of Insurance Receivables Related to Legal Proceedings

The Company estimates insurance receivables based on an analysis of the terms of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim and remaining coverage, and records an amount it has concluded is recognizable and expects to receive in light of the loss recovery and/or gain contingency models under ASC 450, ASC 610-30, and related guidance. For those insured legal proceedings where the Company has recorded an accrued liability in its financial statements, the Company also records receivables for the ~~year ended December 31, 2016~~amount of insurance that it concludes as ~~updated by~~recognizable from the Company’s ~~Current Report on Form 8-K dated May 4, 2017.~~

insurance program. For those insured matters where the Company has not recorded an accrued liability because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it concludes as recognizable for the expense incurred.

Table of Contents

The following sections first describe the significant legal proceedings in which the Company is involved, and then describe the liabilities and associated insurance receivables the Company has accrued relating to its significant legal proceedings.

Respirator Mask/Asbestos Litigation

As of ~~September~~June 30, ~~2017,~~2023, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately ~~2,330~~4,066 individual claimants, compared to approximately ~~2,660~~4,028 individual claimants with actions pending at December 31, ~~2016.~~

2022.

The vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of some of the Company’s mask and respirator products and seek damages from the Company and other defendants for alleged personal injury from workplace exposures to asbestos, silica, coal mine dust or other occupational dusts found in products manufactured by other defendants or generally in the workplace. A minority of the lawsuits and claims resolved by and currently pending against the Company generally allege personal injury from occupational exposure to asbestos from products previously manufactured by the Company, which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company premises.

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The Company’s current volume of new and pending matters is substantially lower than it experienced at the peak of filings in 2003. The Company expects that filing of claims ~~by unimpaired claimants~~ in the future will continue to be at much lower levels than in the past. Accordingly, the number of claims alleging more serious injuries, including mesothelioma, ~~and~~ other malignancies, and black lung disease, will represent a greater percentage of total claims than in the past. ~~The~~Over the past twenty plus years, the Company has prevailed in ~~all twelve cases taken to trial, including ten~~fifteen of the ~~eleven~~sixteen cases tried to verdict (such trials occurred in 1999, 2000, 2001, 2003, 2004, 2007, 2015, and the cases tried in 2016 and 2017–described below), and an appellate reversal in 2005 of the 2001 jury verdict adverse to the Company. The remaining case, tried in 2009, was dismissed by the court at the close of plaintiff’s evidence, based on the court’s legal finding that the plaintiff had not presented sufficient evidence to support a jury ~~verdict.~~(including the lawsuits in 2018 described below). In ~~August 2016,~~2018, 3M received a ~~unanimous defense~~jury verdict ~~from~~in its favor in two lawsuits – one in California state court in February and the other in Massachusetts state court in December – both involving allegations that 3M respirators were defective and failed to protect the plaintiffs against asbestos fibers. In April 2018, a jury in state court in Kentucky infound 3M’s ~~first respirator trial involving~~8710 respirators failed to protect two coal miners from coal mine ~~dust. The estate~~dust and awarded compensatory damages of approximately $2 million and punitive damages totaling $63 million. In August 2018, the trial court entered judgment and the Company appealed. In 2019, the Company settled a substantial majority of the ~~plaintiff alleged that the 3M 8710 respirator is defective and caused his death because it did not protect him from harmful~~then-pending coal mine ~~dust. The~~dust lawsuits in Kentucky and West Virginia for $340 million, including the jury ~~rejected plaintiff’s claim and returned a verdict finding no liability against 3M. The verdict is final as the plaintiff did not file an appeal. In September 2017, 3M received a unanimous~~ verdict in ~~its favor from~~April 2018 in the Kentucky case mentioned above, and the appeal was dismissed. In October 2020, 3M defended a respirator case before a jury in ~~state~~King County, Washington, involving a former shipyard worker who alleged 3M’s 8710 respirator was defective and that 3M acted negligently in failing to protect him against asbestos fibers. The jury delivered a complete defense verdict in favor of 3M, concluding that the 8710 respirator was not defective in design or warnings and any conduct by 3M was not a cause of plaintiff’s mesothelioma. The plaintiff appealed the verdict. In May 2022, the First Division intermediate appellate court in ~~Kentucky~~Washington affirmed in part and reversed in part 3M’s ~~second respirator~~ trial ~~involving coal mine dust. The jury ultimately determined~~victory, concluding that the ~~plaintiff’s claims were barred by~~trial court misapplied Washington law in instructing the ~~statute of limitations.~~jury about factual causation. The ~~plaintiff filed a motion for a new trial.~~

Washington Supreme Court declined to review the matter.

The Company has demonstrated in these past trial proceedings that its respiratory protection products are effective as claimed when used in the intended manner and in the intended circumstances. Consequently, the Company believes that claimants are unable to establish that their medical conditions, even if significant, are attributable to the Company’s respiratory protection products. Nonetheless, the Company’s litigation experience indicates that claims of persons ~~with malignant conditions~~alleging more serious injuries, including mesothelioma, other malignancies, and black lung disease, are costlier to resolve than the claims of unimpaired persons, and it therefore believes the average cost of resolving pending and future claims on a per-claim basis will continue to be higher than it experienced in prior periods when the vast majority of claims were asserted by medically unimpaired claimants.

Since the second half of 2020, the Company has experienced an increase in the number of cases filed that allege injuries from exposures to coal mine dust; that increase represents a substantial majority of the growth in case numbers referred to above. The rate of coal mine dust-related case filings decelerated in 2022 and has continued to decelerate in 2023. 3M moved two cases involving over 400 plaintiffs to federal court based on, among others, the Class Action Fairness Act. The federal district court remanded the cases to state court. In March 2023, the Sixth Circuit Court of Appeals granted 3M's petition to review the remand order, and in April 2023 reversed the district court's remand order; accordingly, those cases will remain in federal court.

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As previously reported, the State of West Virginia, through its Attorney General, filed a complaint in 2003 against the Company and two other manufacturers of respiratory protection products in the Circuit Court of Lincoln County, West Virginia, and amended its complaint in 2005. The amended complaint seeks substantial, but unspecified, compensatory damages primarily for reimbursement of the costs allegedly incurred by the State for worker’s compensation and healthcare benefits provided to all workers with occupational pneumoconiosis and unspecified punitive damages. ~~The case was inactive from~~In October 2019, the ~~fourth~~court granted the State’s motion to sever its unfair trade practices claim, which seeks civil penalties of up to $5,000 per violation under the state's Consumer Credit Protection Act relating to statements that the State contends were misleading about 3M’s respirators. In the first quarter of ~~2007 until late 2013, other than~~2023, a ~~case management conference in March 2011. In November 2013,~~bench trial for the unfair trade practices claims was continued indefinitely. An expert witness retained by the State ~~filed~~has recently estimated that 3M sold over five million respirators into the state during the relevant time period, and the State alleges that each respirator sold constitutes a ~~motion to bifurcate~~separate violation under the ~~lawsuit into~~Act. 3M disputes the expert's estimates and the State's position regarding what constitutes a separate ~~liability~~violation of the Act. 3M has asserted various additional defenses, including that the Company's marketing did not violate the Act at any time, and ~~damages proceedings. At~~that the ~~hearing on~~State's claims are barred under the ~~motion, the court declined to bifurcate the lawsuit.~~applicable statute of limitations. No liability has been recorded for any portion of this matter because the Company believes that liability is not probable and reasonably estimable at this time. In addition, the Company is not able to estimate a possible loss or range of loss given the lack of any meaningful discovery responses by the State of West Virginia ~~the otherwise minimal activity in this case~~as to key issues, and the ~~fact that the complaint asserts~~assertions of claims against two other manufacturers where a defendant’s share of liability may turn on the law of joint and several liability and by the amount of fault, if any, a ~~jury might~~factfinder may allocate to each defendant if the case iswere ultimately tried.

Respirator Mask/Asbestos Liabilities and Insurance ~~Receivables:~~

Receivables

The Company ~~annually~~regularly conducts a comprehensive legal review of its respirator mask/asbestos ~~liabilities in connection with finalizing and reporting its annual results of operations, unless significant changes in trends or new developments warrant an earlier review.~~liabilities. The Company reviews recent and historical claims data, including without limitation, (i) the number of pending claims filed against the Company, (ii) the nature and mix of those claims (i.e., the proportion of claims asserting usage of the Company’s mask or respirator products and alleging exposure to each of asbestos, silica, coal or other occupational dusts, and claims pleading use of asbestos-containing products allegedly manufactured by the Company), (iii) the costs to defend and resolve pending claims, and (iv) trends in filing rates and in costs to defend and resolve claims (collectively, the “Claims Data”). As part of its comprehensive legal review, the Company regularly provides the Claims Data to a third party with expertise in determining the impact of Claims Data on future filing trends and costs. The third party assists the Company in estimating the costs to defend and resolve pending and future claims. The Company uses ~~these estimates~~this analysis to develop its ~~best~~ estimate of probable liability.

Developments may occur that could affect the Company’s estimate of its liabilities. These developments include, but are not limited to, significant changes in (i) the key assumptions underlying the Company’s accrual, including the number

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of future claims, the nature and mix of those claims, and the average cost of defending and resolving claims and in maintaining trial readiness (ii) trial and appellate outcomes, (iii) the law and procedure applicable to these claims, and (iv) the financial viability of other co-defendants and insurers.

As a result of its review of its respirator mask/asbestos liabilities, of pending and expected lawsuits and of the cost of resolving claims of persons who claim more serious injuries, including mesothelioma, other malignancies, and black lung disease, the Company increased its accruals in the first six months of 2023 for respirator mask/asbestos liabilities by $33 million. In the first ~~nine~~six months of ~~2017,~~2023, the Company made payments for legal ~~fees~~defense costs and settlements of ~~$44~~$49 million related to the respirator mask/asbestos ~~litigation, $10 million of which occurred in the third quarter of 2017.~~litigation. As of ~~September~~June 30, ~~2017,~~2023, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of ~~$551~~$588 million. This accrual represents the Company’s ~~best~~ estimate of probable loss and reflects an estimation period for future claims that may be filed against the Company approaching the year 2050. The Company cannot estimate the amount or upper end of the range of amounts by which the liability may exceed the accrual the Company has established because of (i) the ~~(i)~~ inherent difficulty in projecting the number of claims that have not yet been asserted or the time period in which future claims may be asserted, (ii) the fact that complaints nearly always assert claims against multiple defendants where the damages alleged are typically not attributed to individual defendants so that a defendant’s share of liability may turn on the law of joint and several liability, which can vary by state, (iii) the multiple factors described above that the Company considers in estimating its liabilities, and (iv) the several possible developments described above that may occur that could affect the Company’s estimate of liabilities.

As of ~~September~~June 30, ~~2017,~~2023, the Company’s receivable for insurance recoveries related to the respirator mask/asbestos litigation was $4 million. ~~The~~In addition, the Company ~~is seeking~~continues to seek coverage under the policies of certain insolvent and other insurers. Once those claims for coverage are resolved, the Company will have collected substantially all of its remaining insurance coverage for respirator mask/asbestos claims.

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Respirator Mask/Asbestos Litigation — Aearo Technologies

On April 1, 2008, a subsidiary of the Company ~~purchased~~acquired the stock of Aearo Holding Corp., the parent of Aearo Technologies (“Aearo”). Aearo manufactured and sold various products, including personal protection equipment, such as eye, ear, head, face, fall and certain respiratory protection products.

~~As of September 30, 2017,~~ Aearo and/or other companies that previously owned and operated Aearo’s respirator business (American Optical Corporation, Warner-Lambert LLC, AO Corp. and Cabot Corporation (“Cabot”)) are named defendants, with multiple co-defendants, including the Company, in numerous lawsuits in various courts in which plaintiffs allege use of mask and respirator products and seek damages from Aearo and other defendants for alleged personal injury from workplace exposures to asbestos, silica-related, coal mine dust, or other occupational dusts found in products manufactured by other defendants or generally in the workplace.

As In July 2022, Aearo Technologies and certain of ~~September 30, 2017,~~its related entities (collectively, the "Aearo Entities") voluntarily initiated chapter 11 proceedings under the U.S. Bankruptcy Code seeking court supervision to establish a trust, funded by the Company, to efficiently and equitably satisfy all claims determined to be entitled to compensation (including the Aearo respirator mask/asbestos matters). This represented a change in strategy for managing the Combat Arms Version 2 earplugs and Aearo respirator mask/asbestos alleged litigation liabilities. The U.S. Bankruptcy Court had stayed the Aearo respirator mask/asbestos litigation matters during the chapter 11 proceedings. With the June 2023 dismissal of the Aearo bankruptcy that is described in the Product Liability Litigation section below, the stay of respirator mask/asbestos litigation is no longer in effect. For additional information, see the discussion within the section Product Liability Litigation with respect to Aearo Technologies Dual-Ended Combat Arms Earplugs.

During the voluntary chapter 11 proceedings, 3M's accrual relating to the commitments associated with funding that trust included Aearo respirator mask/asbestos matters. However, following the June 2023 dismissal of the Aearo bankruptcy, the Company, through its Aearo subsidiary, had accruals of ~~$18~~$44 million as of June 30, 2023 for product liabilities and defense costs related to current and future Aearo-related asbestos, silica-related and ~~silica-related~~coal mine dust claims. Responsibility for legal costs, as well as for settlements and judgments, is ~~currently~~ shared in an informal arrangement among Aearo, Cabot, American Optical Corporation and a subsidiary of Warner Lambert and their respective insurers (the “Payor Group”). Liability is allocated among the parties based on the number of years each company sold respiratory products under the “AO Safety” brand and/or owned the AO Safety Division of American Optical Corporation and the alleged years of exposure of the individual plaintiff. Aearo’s share of the contingent liability is further limited by an agreement entered into between Aearo and Cabot on July 11, 1995. This agreement provides that, so long as Aearo pays to Cabot a quarterly fee of $100,000, Cabot will retain responsibility and liability for, and indemnify Aearo against, any product liability claims involving exposure to asbestos, silica, or silica products for respirators sold prior to July 11, 1995. Because of the difficulty in determining how long a particular respirator remains in the stream of commerce after being sold, Aearo and Cabot have applied the agreement to claims arising out of the alleged use of respirators involving exposure to asbestos, silica or silica products prior to January 1, 1997. With these arrangements in place, Aearo’s potential liability is limited to exposures alleged to have arisen from the use of respirators involving exposure to asbestos, silica, or silica products on or after January 1, 1997. To date, Aearo has elected to pay the quarterly fee. Aearo could potentially be exposed to additional claims for some part of the pre-July 11, 1995 period covered by its agreement with Cabot if Aearo elects to discontinue its participation in this arrangement, or if Cabot is no longer able to meet its obligations in these matters.

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In March 2012, Cabot CSC Corporation and Cabot Corporation filed a lawsuit against Aearo in the Superior Court of Suffolk County, Massachusetts seeking declaratory relief as to the scope of Cabot’s indemnity obligations under the July 11, 1995 agreement, including whether Cabot has retained liability for coal workers’ pneumoconiosis claims, and seeking damages for breach of contract. In 2014, the court granted Aearo’s motion for summary judgment on two claims, but declined to rule on two issues: the specific liability for certain known coal mine dust lawsuits; and Cabot’s claim for allocation of liability between injuries allegedly caused by exposure to coal mine dust and injuries allegedly caused by exposure to silica dust. Following additional discovery, the parties filed new motions for summary judgment. In February 2016, the court ruled in favor of Aearo on these two remaining issues, and ordered that Cabot, and not Aearo, is solely responsible for all liability for the coal mine dust lawsuits under the 1995 agreement. In May 2017, the Massachusetts Court of Appeals affirmed the trial court order in favor of Aearo.

Developments may occur that could affect the estimate of Aearo’s liabilities. These developments include, but are not limited to: (i) significant changes in the number of future claims, (ii) significant changes in the average cost of resolving claims, (iii) significant changes in the legal costs of defending these claims, (iv) significant changes in the mix and nature of claims received, (v) trial and appellate outcomes, (vi) significant changes in the law and procedure applicable to these claims, (vii) significant changes in the liability allocation among the co-defendants, (viii) the financial viability of members of the Payor Group including exhaustion of available insurance coverage limits, and/or (ix) a determination that the interpretation of the contractual obligations on which Aearo has estimated its share of liability is inaccurate. The Company cannot determine the impact of these potential developments on its current estimate of Aearo’s share of liability for these existing and future claims. If any of the developments described above were to occur, the actual amount of these liabilities for existing and future claims could be significantly larger than the amount accrued.

Because of the inherent difficulty in projecting the number of claims that have not yet been asserted, the complexity of allocating responsibility for future claims among the Payor Group, and the several possible developments that may occur that could affect the estimate of Aearo’s liabilities, the Company cannot estimate the amount or range of amounts by which Aearo’s liability may exceed the accrual the Company has established.

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Environmental Matters and Litigation

The Company’s operations are subject to environmental laws and regulations including those pertaining to air emissions, wastewater discharges, toxic or hazardous substances, and the handling and disposal of solid and hazardous wastes enforceable by national, state, and local authorities around the world, ~~and~~many for which private parties in the United States and ~~abroad.~~abroad have rights of action. These laws and regulations ~~provide,~~can form the basis of, under certain circumstances, ~~a basis~~claims for the investigation and remediation of contamination, for capital investment in pollution control equipment, for restoration of and/or compensation for damages to natural resources, and for personal injury and property damage claims. The Company has incurred, and will continue to incur, costs and capital expenditures in complying with these laws and regulations, defending personal injury and property damage claims, and modifying its business operations in light of its environmental responsibilities. In its effort to satisfy its environmental responsibilities and comply with environmental laws and regulations, the Company has established, and periodically updates, policies relating to environmental standards of performance for its operations worldwide.

Under certain environmental laws, including the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") and similar state laws, the Company may be jointly and severally liable, ~~typically~~sometimes with other ~~companies,~~potentially responsible parties, for the costs of remediation of environmental contamination at current or former facilities and at off-site ~~locations.~~locations where hazardous substances have been released or disposed of. The Company has identified numerous locations, ~~most~~many of which are in the United States, at which it may have some ~~liability.~~liability for remediation of contamination. Please refer to the section entitled “Environmental Liabilities and Insurance Receivables” that follows for information on the amount of the ~~accrual.~~

accrual for such liabilities.

Environmental Matters

As previously reported, the Company has been voluntarily cooperating with ongoing reviews by local, state, federal (primarily the U.S. Environmental Protection Agency ~~(EPA)~~("EPA")), and international agencies of possible environmental and health effects of various perfluorinated compounds, including ~~perfluorooctanyl compounds such as~~ perfluorooctanoate ~~(“PFOA”~~("PFOA"), perfluorooctane sulfonate ~~(“PFOS”~~("PFOS"), ~~or similar compounds (“PFCs”~~perfluorohexane sulfonic acid ("PFHxS"), perfluorobutane sulfonate ("PFBS"), hexafluoropropylene oxide dimer acid ("HFPO-DA") and other per- and polyfluoroalkyl substances (collectively, "PFAS").

As a result of ~~its~~a phase-out decision in May 2000, the Company no longer manufactures ~~perfluorooctanyl~~certain PFAS compounds including PFOA, PFOS, PFHxS, and their pre-cursor compounds. The ~~company~~Company ceased manufacturing and

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using the vast majority of these compounds within approximately two years of the phase-out announcement and ceased all manufacturing and the last significant use of this chemistry by the end of 2008. The Company continues to manufacture a variety of shorter chain length PFAS compounds, including, but not limited to, pre-cursor compounds to PFBS. These compounds are used as input materials to a variety of products, including engineered fluorinated fluids, fluoropolymers and fluorelastomers, as well as surfactants, additives, and coatings. Through its ongoing life cycle management and its raw material composition identification processes associated with the Company’s policies covering the use of all persistent and bio-accumulative materials, the Company continues to review, control or eliminate the presence of certain ~~PFCs~~PFAS in purchased materials, as intended substances in products, or as byproducts in some of 3M’s ~~fluorochemical~~current manufacturing processes, products, and waste streams.

3M announced in December 2022 it will take two actions: exiting all PFAS manufacturing by the end of 2025; and working to discontinue the use of PFAS across its product portfolio by the end of 2025. 3M’s decision is based on careful consideration and a thorough evaluation of the evolving external landscape, including multiple factors such as accelerating regulatory trends focused on reducing or eliminating the presence of PFAS in the environment and changing stakeholder expectations.

PFAS Regulatory and Legislative Activity

Regulatory and legislative activities concerning ~~PFOA and/or PFOS continue~~PFAS are accelerating in the United States, Europe and elsewhere, and before certain international bodies. These activities include gathering of exposure and use information, risk assessment ~~and~~activities, consideration of regulatory ~~approaches.~~approaches, and increasingly strict restrictions on various uses of PFAS in products and on PFAS in manufacturing emissions, in some cases moving towards non-detectable limits for certain PFAS compounds. Regulations of PFAS in emissions and in environmental media such as soil and water (including drinking water) are increasingly being set at levels that continue to decrease. Global regulations also appear to be increasingly focused on a broader group of PFAS and may include those PFAS compounds used in current products. If such activity continues, including if regulations become final and enforceable, 3M may incur material costs to comply with new regulatory requirements or as a result of litigation or additional enforcement actions. Such regulatory changes may also have an impact on 3M’s reputation and may also increase its costs and potential litigation exposure to the extent legal defenses rely on regulatory thresholds, or changes in regulation influence public perception. Given divergent and rapidly evolving regulatory drinking water and other standards, there is currently significant uncertainty about the potential costs to industry and communities associated with remediation and control technologies that may be required.

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Europe

In the European Union, where 3M has PFAS manufacturing facilities in countries such as Germany and Belgium, recent regulatory activities have included both preliminary and on-going work on various restrictions of PFAS or certain PFAS compounds under the EU’s Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH") and the EU’s Persistent Organic Pollutants ("POPs") Regulation. PFOA, PFOS and PFHxS (and their related compounds) have also been listed in the Stockholm Convention, which has been ratified by more than 180 countries and aims for global elimination of certain listed substances (with narrow exceptions). In February 2023, an EU-wide restriction on the manufacturing, use, placing on the market and import of certain perfluorocarboxylic acids (C9-C14 PFCAs), which are PFAS substances, went into effect.

In February 2023, the European Chemicals Agency published the proposal it received in January 2023 from the national authorities of Germany, Denmark, the Netherlands, Norway and Sweden to restrict PFAS under the European Union’s chemicals regulation. The proposal aims to restrict the manufacture, placing on the market and use of PFAS under REACH. In March 2023, the six-month consultation phase on the PFAS Restriction Proposal started. If the proposed rule becomes enforceable prior to 3M's announced exit from PFAS manufacturing by the end of 2025, depending on the scope and obligations contained in any final rule, PFAS manufacturers and manufacturers of PFAS containing products including 3M Belgium could incur additional costs and potential exposures, including future compliance costs, possible litigation and/or enforcement actions.

Effective January 2023, the EU Food Contaminants Regulation targeting four PFAS (PFOS, PFOA, perfluorononanoic acid ("PFNA"), and, PFHxS) in foodstuff (eggs and animal derived meat) prohibits the sale in all member states of foods containing levels of these chemicals exceeding the regulatory thresholds. As member states implement the ~~database~~regulation, Dyneon, a 3M subsidiary that operates the Gendorf facility in Germany, in coordination with local authorities and farmers, has proposed a pilot program of ~~studies~~food sampling to determine if any remedial action is necessary.

The EU regulates PFAS in drinking water via a Drinking Water Directive, which includes a limit of 0.1 micrograms per liter (µg/l) (or 0.1 parts for billion (ppb)) for a sum of 20 PFAS in drinking water. January 2023 was the deadline for Member States to implement the Directive in their countries.

Dyneon has a recycling process for a critical emulsifier from which small amounts of PFOA are present after recycling, as an unintended and unavoidable byproduct of certain earlier process steps. With respect to the applicability of the amendment of the EU POPs Regulation with PFOA applicable since 2021, Dyneon proactively consulted with the relevant German competent authority regarding process improvements underway. The implementation of process improvements and analytical work is ongoing. Dyneon and the predecessor operators of the Gendorf facility have commissioned a voluntary feasibility study by an independent soil consultant and shared with the competent authority the initial study including soil management concept related to the Chemical Park in which Dyneon and other companies operate their plants.

3M Belgium, a subsidiary of the Company, has been working with the Public Flemish Waste Agency ("OVAM") for several years to investigate and remediate historical PFAS contamination at and near the 3M Belgium facility in Zwijndrecht, Antwerp, Belgium. In connection with a ring road construction project (the Oosterweel Project) in Antwerp that involved extensive soil work, an investigative committee with judicial investigatory powers was formed in June 2021 by the Flemish Parliament to investigate PFAS found in the soil and groundwater near the Zwijndrecht facility. 3M Belgium testified at Flemish parliamentary committee hearings in September and December 2021 on PFAS-related matters. The Flemish Parliament, the Minister of the Environment, and regulatory authorities initiated investigations and demands for information related to the release of PFAS from the Zwijndrecht facility. The Company has cooperated with the authorities in the investigations and information requests and is working with the authorities on an ongoing basis, as they continue to maintain oversight of 3M Belgium’s operations at the Zwijndrecht facility, as further discussed below. Separately, as previously disclosed, the Company is aware that certain residents of Zwijndrecht and non-governmental organizations filed a criminal complaint with an Antwerp investigatory judge against 3M Belgium, alleging it had unlawfully abandoned waste in violation of its environmental care obligations. Certain additional parties reportedly joined the complaint. 3M Belgium has not been served with any such complaint. In June 2023, the federal judicial police requested additional documents following earlier requests for documents that 3M Belgium had provided, and 3M Belgium has complied with the request for additional documents.

Safety measures – wastewater discharge. In August 2021, the Flemish Government served 3M Belgium with a safety measure requiring the capture of certain process wastewaters to prevent their entry into the site wastewater treatment plant. While 3M Belgium appealed the safety measure due to the belief it lacked adequate legal and factual foundation, 3M Belgium promptly implemented the required actions.

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In October 2021, the Province of Antwerp unilaterally adopted lower discharge limits for the nine PFAS compounds specifically identified in the water discharge permit for the Zwijndrecht facility and added a special condition that essentially prohibits discharge of any PFAS chemistry without a specific limit in the permit. 3M Belgium received a new two-year permit in May 2022 which contains strict new limits for 24 different PFAS, effective July 1, 2022. 3M Belgium believes that the recently installed additional control systems will enable it to meet these limits. Subsequently, the environmental enforcement agency informed 3M Belgium that the agency believes that 3M Belgium must apply for discharge limits for certain additional “short-chain” PFAS pursuant to the special condition. Although disagreeing with the agency’s position, 3M Belgium developed an application to amend the permit to add the additional PFAS. 3M Belgium has insufficient information to predict the limits that will be set forth for additional short-chain PFAS and is therefore unable to assess whether the current or future wastewater treatment system, as currently conceived, will meet future limits imposed. In December 2022, 3M Belgium received an official infraction report from the Flemish Environmental Inspectorate regarding the discharge of certain short chain PFAS compounds in wastewater from the Zwijndrecht facility. 3M Belgium previously identified these compounds and shared the results with the Inspectorate. The compounds at issue do not have specific discharge limits in the applicable wastewater discharge permit, and the infraction report references a special condition in the permit that prohibits detectable discharge of PFAS compounds that do not have a specific discharge limit in the permit. 3M Belgium disagrees with the Inspectorate’s interpretation of the special condition and the time period permitted for compliance with it. Moreover, 3M Belgium instituted a capturing process to prevent wastewaters containing short chain PFAS identified in the infraction report from entering the treatment system or its discharge. 3M Belgium notified the Inspectorate that complying with the special condition means ceasing the legally required extraction and treatment of contaminated groundwater. The Inspectorate acknowledged this fact but insisted that 3M Belgium continue to extract and treat groundwater. Groundwater treatment continues and 3M Belgium has applied for a modification of the water discharge permit to add parameters for the short chain PFAS. 3M Belgium will continue its efforts to comply with the special condition and to minimize discharge of all PFAS, including the PFAS identified in the infraction report, but an inability to meet discharge limits for short chain PFAS could have a significant adverse impact on 3M Belgium’s normal operations and the Company's businesses that receive products and other materials from the facility, some of which may not be available in similar quantities from other 3M facilities, which could in turn impact these businesses’ ability to fulfill supply obligations to their customers.

Safety measure – emissions. As previously disclosed, in October 2021, the Flemish environmental enforcement agency issued a new safety measure that prohibits all emissions of all forms of PFAS from the facility unless and until specifically approved on a process-by-process basis. 3M Belgium thereupon commenced an appeal process to the Council of States, seeking, among other things, urgent suspension of the safety measure during the pendency of the appeal process. At the same time, 3M Belgium complied with the safety measure by idling the affected production at the facility. The Council of States declined to grant urgent suspension of the safety measure. 3M Belgium established a regular cadence of meetings with the relevant authorities to review restart of specific PFAS-related production processes. The agency recently clarified that the safety measure applies to release of PFAS into water, and as such, reviews have been expanded as requested.

In October 2022, 3M Belgium received a report from the Flemish Inspectorate regarding certain health and safety issues noted during inspections of the Zwijndrecht facility in March 2022, alleging certain related deficiencies, some dating back to 2010. In December 2022, 3M Belgium provided the Inspectorate with responses to the allegations, including plans and timelines for compliance where applicable, and plans to continue to inform the Inspectorate on corrective actions to be taken.

As of July 2022, the authorities have approved the restart of key production processes and 3M Belgium continues to conduct required monitoring and reporting activities. Belgian government authorities continue to maintain oversight of 3M Belgium’s operations and compliance with applicable requirements at the Zwijndrecht facility. In September 2022, the environmental enforcement agency issued an infraction report alleging that 3M Belgium had misconstrued an exemption in the safety measure and thus not fully complied with the safety measure in the operation of certain production lines. Discussions are underway with the environmental enforcement agency and those production lines are now being addressed in accordance with the review and approval provisions of the safety measure. In July 2023, the Flemish Environmental Inspectorate issued an infraction report stating the actions taken are insufficient to ensure all necessary measures to reduce dust formation from the facility, and seeking a response from 3M Belgium by August 1. 3M Belgium has implemented additional control measures to address potential dust formation and is working to outline more structural actions to reduce potential dust formation.

Although the authorities have approved the restart and/or continued operation of key production processes, a negative development in their ongoing oversight review, such as the infraction reports referenced above, could impact or delay 3M Belgium's ability to fully restart all production processes, which in turn could have a significant adverse impact on 3M Belgium’s normal operations and the Company's businesses that receive products and other materials from the facility, some of which may not be available in similar quantities from other 3M facilities, which could impact these businesses’ ability to fulfill supply obligations to their customers.

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Notice of default – environmental law compliance. Also in September 2021, the Flemish Region issued a notice of default alleging violations of environmental laws and seeking PFAS-related information, indemnity and a remediation plan for soil and water impacts due to PFAS originating from the Zwijndrecht facility. In September 2021, 3M responded to the notice of default and announced a plan to invest up to 125 million euros in the next three years in actions related to the Zwijndrecht community, including support for local commercial farmers impacted by restrictions on sale of agricultural products, and enhancements to site discharge control technologies. 3M is also committed to payment for ongoing off-site descriptive soil investigation and appropriate soil remediation. In March 2022, the Company announced an investment of 150 million euros to advance remedial actions to address legacy PFAS previously produced at the Zwijndrecht facility. An accredited third-party soil remediation expert has progressed towards a remedial action plan based on a descriptive soil investigation that would help inform 3M Belgium’s remedial actions onsite and in certain surrounding areas. 3M Belgium representatives continue to have discussions with the relevant authorities regarding further soil remedial actions in connection with the Flemish Soil Decree, which requires both ~~PFOA~~public authorities and ~~PFOS~~private parties to remediate contaminated soil and groundwater in Flanders.

In February 2023, OVAM rejected a required descriptive soil investigation ("DSI") submitted by 3M Belgium, required that a new DSI be submitted by the end of March, and also required that 3M Belgium propose a plan to implement additional precautionary measures for individuals living in designated areas near the Zwijndrecht plant. At the end of March 2023, 3M Belgium submitted a revised DSI, along with an appeal of the rejection of the DSI. In May 2023, OVAM confirmed the main findings of the DSI for certain zones and set an October 2023 deadline to submit a remedial action plan related to these zones. 3M Belgium also submitted a proposal regarding precautionary measures that is being discussed with OVAM. 3M Belgium submitted two additional DSIs in May 2023 for areas around the Zwijndrecht plant. In July 2023, an appeal was filed by a local NGO with the Flemish government regarding the additional DSIs.

In December 2022, the Flemish Cabinet took steps to implement an executive action (the “Site Decision”) designed to expand 3M’s remedial obligations around the Zwijndrecht site. On March 31, 2023, the Site Decision was fully approved by the Flemish Cabinet and the Site Decision was published in April 2023. While the full impact of the Site Decision remains to be determined, it appears to establish a remediation zone within 5 kilometers of Zwijndrecht, and may create a presently undetermined amount of additional financial and remedial obligations for 3M Belgium. In June 2023, 3M Belgium submitted a petition for annulment of the Site Decision to the Belgian Council of State.

In July 2022, 3M Belgium and the Flemish Government announced an agreement in connection with the Zwijndrecht facility. Pursuant to the agreement, 3M Belgium, among other things, committed an aggregate of 571 million euros, which includes the previous commitments described above. In aggregate, the commitment includes enhancements to site discharge control technologies, support for qualifying local farmers, amounts to address certain identified priority remedial actions (which may include supporting additional actions as required under the Flemish Soil Decree), funds to be used by the Flemish Government in its sole discretion in connection with PFAS emissions from the Zwijndrecht facility, and support for the Oosterweel Project in cash and support services. The agreement contains certain provisions ending current litigation and providing certain releases of liability for 3M, while recognizing that the Flemish Government retains its authority to act in the future to protect its citizenry, as specified in the agreement. In connection with these actions, the Company recorded a pre-tax charge of approximately $500 million in the first half of 2022, with approximately $355 million in the second quarter of 2022.

Civil litigation - As of June 30, 2023, a total of eight actions against 3M Belgium are pending in Belgian civil courts, and 3M Belgium has ~~expanded,~~received pre-litigation notices from individuals in Belgium indicating potential claims. The pending cases include claims by neighboring and other companies for alleged soil and wastewater or rainwater contamination with PFAS; and tort liability claims and an environmental injunction procedure by environmental NGOs and several hundred individuals. While most of the actions are in early stages, one of the actions, brought by a family living near the 3M Belgium plant, had a hearing in February 2023 and, in May 2023, the presiding judge awarded provisional damages in the amount of 500 euros each to four family members, and denied other damages. Another case, involving an environmental injunction procedure, was brought by environmental NGOs originally against 3M Belgium’s contractors and later against 3M Belgium and seeks to accelerate the descriptive soil investigation and remediation process. In May 2023, the court denied the environmental injunction claim, subject to appeal.

In May 2023, the Netherlands government sent 3M Belgium a notice of liability stating it holds 3M Belgium liable for damages related to alleged PFAS contamination in the Netherlands. The notice purports to identify claims by the Netherlands government and references potential damages to other parties. 3M Belgium plans to meet with the Netherlands government to discuss the notice. 3M Belgium has also met with representatives of some of the private parties involved, which have indicated they may separately pursue claims.

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United States: Federal Activity

In the United States, the EPA has developed human health effects documents summarizing the available data ~~from these studies. In February 2014, the EPA initiated external peer review~~studies of ~~its draft human health effects documents for~~various PFAS, including PFOA and PFOS. ~~The peer review panel met~~In October 2021, EPA released its “PFAS Strategic Roadmap: EPA's Commitments to Action 2021-2024,” which presents EPA’s approach to PFAS, including investing in ~~August 2014.~~ research to increase the understanding of PFAS, pursuing a comprehensive approach to proactively control PFAS exposures to humans and the environment, and broadening and accelerating the scope of clean-up of PFAS in the environment.

In ~~May 2016, the~~June 2022, EPA ~~announced~~released new final lifetime health advisory levels for PFBS (2,000 ppt) and HFPO-DA and its salts (“GenX”) (4 ppt), and new interim lifetime health advisory levels for PFOA (.004 ppt) and PFOS (.02 ppt). Lifetime health advisories are intended to provide information about concentrations of drinking water contaminants at ~~70 parts per trillion (ppt) (superseding~~which adverse health effects are not expected to occur over the ~~provisional levels established by~~specified exposure duration.

In March 2023, EPA published proposed national primary drinking water standards for six PFAS – PFOA, PFOS, PFBS, PFHxS, PFNA, and HFPO-DA, along with an economic analysis including purported estimated costs of the ~~EPA in 2009 of 400 ppt for PFOA and 200 ppt for PFOS). Where~~proposed rule. For PFOA and PFOS, EPA has proposed a drinking water standard of 4 ppt. For the other four PFAS, EPA is proposing to adopt for the first time a drinking water standard based on a “hazard index” approach, under which the levels of those four compounds, if detected, would be input into an EPA-provided formula to determine whether they exceed EPA's cumulative risk threshold. 3M submitted comments on EPA’s proposal in May 2023. EPA has indicated that final rules will be published in January 2024. If the proposed drinking water standards are ~~found together, EPA recommends~~finalized, 3M could incur additional costs and potential exposures, including future compliance costs, possible litigation and/or enforcement actions.

In May 2021, the U.S. Agency for Toxic Substances and Disease Registry ("ATSDR") within the Department of Health and Human Services finalized a Toxicological Profile for certain PFAS that ~~the concentrations be added together, and the lifetime health advisory~~established minimal risk levels ("MRLs") for PFOS, PFOA and ~~PFOS combined~~several other PFAS. An MRL is ~~also 70 ppt. Lifetime~~an estimate of the daily human exposure to a hazardous substance that is likely to be without appreciable risk of adverse non-cancer health ~~advisories, while not enforceable, serve as guidance~~effects over a specified duration of exposure. MRLs establish a screening level and are ~~benchmarks~~not intended to define cleanup or action levels for ~~determining if concentrations~~ATSDR or other agencies.

In May 2022, EPA added five PFAS substances – HFPO-DA, PFOS, PFOA PFNA, and PFHxS - to its list of ~~chemicals~~Regional Screening and Removal Management Levels based on the May 2021 MRLs. EPA had previously added PFBS to both lists in ~~tap~~2014. Regional Screening Levels are used to identify contaminated media that may require further investigation, while Regional Removal Management Levels are used by EPA to support certain actions under CERCLA.

In November 2022, EPA published its final Drinking Water Contaminant Candidates List 5 (CCL 5), which includes a broad group of PFAS that are not currently subject to national primary drinking water ~~from public utilities are safe~~regulations but which EPA is considering for ~~public consumption. In an effort to collect exposure information~~regulation under the Safe Drinking Water Act ("SDWA"). In December 2022, EPA issued guidance to states for incorporating PFAS requirements into the Clean Water Act National Pollution Discharge Elimination System ("NPDES") permit program, including recommendations to require PFAS monitoring and incorporating limits for PFAS in industrial discharges.

In October 2021, EPA announced it will initiate a rulemaking to designate four PFAS compounds as hazardous constituents under the Resource Conservation and Recovery Act ("RCRA"). EPA has announced it plans to issue the proposed rule in August 2023.

In September 2022, EPA published in the Federal Register its proposal to list PFOA and PFOS, including their salts and structural isomers, as CERCLA hazardous substances. 3M submitted comments on ~~May 2, 2012~~EPA’s proposal in November 2022. In June 2023, EPA indicated that the timeline for issuance of a final rule would be extended from August 2023 to February 2024. In addition, EPA’s Advanced Notice of Proposed Rulemaking considering CERCLA hazardous substance designations for additional PFAS, including PFBS, PFHxS, PFNA, HFPO-DA, PFBA,perfluorohexanoic acid ("PFHxA"), PFDA and their precursor compounds as well as the precursor compounds of PFOS and PFOA, was published for public comment in April 2023 with comments due in August 2023.

If CERCLA or RCRA designations are finalized and become enforceable, 3M may be required to undertake additional investigative or remediation activities where 3M conducts operations or where 3M has disposed of waste. 3M may also face additional litigation from other entities that have liability under these laws for contribution to clean-up costs other entities might have.

EPA has also taken several actions to increase reporting and restrictions regarding PFAS under the Toxic Substances Control Act ("TSCA") and the Toxics Release Inventory ("TRI"), which is a part of the Emergency Planning and Community Right-to-Know Act. EPA has added more than 170 PFAS compounds to the list of substances that must be included in TRI reports as of July 2021. In December 2022, EPA published a proposed rule to adding PFAS subject to reporting under the Emergency Planning and Community Right-to-know Act to the list of Lower Thresholds for Chemicals of Special Concern, which would require TRI reporting of de minimis uses of those PFAS. 3M submitted comments to EPA’s proposal.

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In January 2023, EPA issued a test order under TSCA to manufacturers, including the Company, requiring them to conduct certain health and safety testing related to HFPO, a PFAS, and submit the results to EPA. 3M has submitted its initial response.

3M is in the process of amending its 2020 TSCA Chemical Data Reporting rule report for 3M’s Cordova plant due to the discovery of relatively small amounts of HFPO formed as a commercial byproduct by the facility. This issue has been self-disclosed to EPA.

In June 2023, EPA notified 3M that it intends to issue a TSCA test order for HFPO-DAF, a PFAS, to 3M. 3M expects that test order to be issued in July or August 2023.

In April 2022, EPA released draft Aquatic Life Criteria for PFOA and PFOS. These criteria, once finalized, may be used by states in developing water quality standards for protection of aquatic life under the Clean Water Act. 3M submitted comments on the draft criteria in July 2022.

United States: State Activity

Several state legislatures and state agencies have been evaluating or have taken actions related to cleanup standards, groundwater values or drinking water values for PFOS, PFOA, and other PFAS, and 3M has submitted various responsive comments. In Minnesota, the Minnesota Department of Health ("MDH") in 2022 stated that Health Based Values ("HBVs") “are levels that the MDH considers safe for all people to consume, including sensitive populations.” The current HBVs are 35 ppt for PFOA, 15 ppt for PFOS, 47 ppt for PFHxS, 7,000 ppt for PFBA, 200 ppt for PFHxA, and 100 ppt for PFBS.

The Minnesota Pollution Control Agency ("MPCA") published the final version of its PFAS Monitoring Plan in March 2022. Several 3M facilities - including Cottage Grove, Maplewood, Hutchinson, St. Paul, and Woodbury - are among the Minnesota facilities that are preliminarily scoped to be within the Monitoring Plan.

States with finalized drinking water standards for certain PFAS include California, Vermont, New Jersey, New York, New Hampshire, Michigan, Massachusetts, Pennsylvania, and Wisconsin.

Some other states have also been evaluating or have taken actions relating to PFOA, PFOS and other PFAS compounds in products such as food packaging, carpets and other products. For example, in June 2022, Colorado enacted a law which restricts the sale of certain consumer products, including carpets and furniture, fabric treatments, food packaging, and children’s products that contain intentionally added PFAS.

In October 2022, California passed legislation prohibiting the manufacture, distribution of sale of textiles and cosmetics containing certain PFAS. Additionally, in 2021 and 2022, California finalized its listing of PFOS (and its salts and transformation and degradation precursors) and PFOA as carcinogens, and PFNA as a reproductive toxicant under its Proposition 65 law. California has also proposed listing PFDA, PFHxS, and PFUNDA as reproductive toxicants under Proposition 65.

In the summer of 2021, the State of Maine passed its Act To Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution, which bans intentionally added PFAS in products effective January 1, 2030 and requires broad reporting of products containing intentionally-added PFAS effective January 1, 2023. In December 2022, 3M submitted to the Maine Department of Environmental Protection ("DEP") a list of ~~unregulated substances,~~products containing intentionally added PFAS that have been sold in the U.S. in the past two years in compliance with the law. 3M submitted an updated copy of that list to the Maine DEP in May 2023. In June 2023, Maine enacted legislation retroactive to January 1, 2023, that includes certain changes to the notification requirement in the original legislation, including ~~six PFCs,~~an extension of the compliance date until January 2025.

In May 2023, Minnesota enacted legislation that includes a broad PFAS prohibition and reporting statute. The statute requires product notifications starting in 2025 and a general prohibition on sales of PFAS-containing products no later than 2032 for all product categories, subject to exemptions that may be adopted by rulemaking. Several other states have introduced legislation that would impose similar obligations.

In October 2020, 3M and several other parties filed notices of appeal in the appellate division of the Superior Court of New Jersey to challenge the validity of the New Jersey PFOS and PFOA regulations. In January 2021, the appellate division of the court denied the group’s motion to stay the regulations. The court heard oral argument in November 2022.

In April 2021, 3M also filed a lawsuit against the Michigan Department of Environment, Great Lakes, and Energy ("EGLE") to invalidate the drinking water standards EGLE promulgated under an accelerated timeline. In November 2022, the court granted 3M’s motion for summary judgment on the merits and invalidated EGLE’s rule based on its failure to properly consider relevant costs. The court stayed the effect of its decision pending appeal. EGLE appealed the decision in December 2022, and the court scheduled oral argument in the case for July 2023.

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Between 2018 and 2022, seven states have enacted laws requiring written notification of firefighting personal protective equipment that contains PFAS, with most such laws providing for potential civil penalties for non-compliance. In November 2022, the Company identified it likely did not provide required notifications for some of its products, including its Scott Safety Self-Contained Breathing Apparatuses. The Company began providing written notices with those products starting November 2022. In addition, the Company continues to ~~be monitored during the period 2013-2015 by public water system suppliers~~work to determine the extent of ~~their occurrence. Through January 2017,~~any potential non-compliance, has made voluntary self-disclosures to states and customers as applicable, and has expressed its willingness to work with those states to address and resolve any potential non-compliance. The Company cannot predict at this time the ~~EPA~~ultimate outcome or actions that may be taken by those states.

The Company cannot predict what additional regulatory actions in the United States, Europe and elsewhere arising from the foregoing or other proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions to the Company, including to its manufacturing operations and its products. Given divergent and rapidly evolving regulatory standards, there is currently significant uncertainty about the potential costs to industry and communities associated with remediation and control technologies that may be required.

Litigation Related to Historical PFAS Manufacturing Operations in Alabama

As previously reported, ~~results for 4,920 public~~3M has resolved numerous claims relating to alleged PFAS contamination of properties and water supplies ~~nationwide. Based~~by 3M’s Decatur, Alabama manufacturing facility. In April 2019, 3M settled a lawsuit brought by the West Morgan-East Lawrence Water & Sewer Authority for $35 million, which will fund a new water filtration system, with 3M indemnifying the Water Authority from liability resulting from the resolution of certain lawsuits against the Water Authority alleging liability or damages related to 3M PFAS. In October 2021, 3M settled a class action brought by plaintiffs who were supplied drinking water by the Water Authority (the “Lindsey” case) for an immaterial amount. The court issued a final order approving the class settlement and dismissing the action in March 2022. In October 2021, 3M also reached agreements in principle to resolve litigation with several other parties, including previously disclosed Tennessee Riverkeeper organization, the St. John plaintiff class, and plaintiffs in the Stover, Owens, and Chandler matters. A court granted final approval of the St. John class settlement in April 2022, and plaintiffs in the Stover, Owens, and Chandler matters filed dismissals thereafter. In June 2022, the court dismissed the Tennessee Riverkeeper case with prejudice. In November 2021, 3M and the City of Decatur, Decatur Utilities and Morgan County executed a collaborative agreement under which the Company agreed to contribute approximately $99 million and also to continue to address certain PFAS-related matters in the area. The contribution relates to initiatives to improve the quality of life and overall environment in Decatur, including community redevelopment and recreation projects by the City, County and Decatur Utilities. It also includes addressing certain PFAS matters at the Morgan County landfill and reimbursement of costs previously incurred related to PFAS remediation. 3M will continue to address PFAS at certain other closed municipal sites at which the Company historically disposed waste and continue environmental characterization in the area. This work will complement the Interim Consent Order that 3M entered with the Alabama Department of Environmental Management (“ADEM") in 2020 and includes sampling of environmental media, such as ground water, regarding the potential presence of PFAS at the 3M Decatur facility and legacy disposal sites, as well as supporting the execution of appropriate remedial actions. In March 2022, 3M reached a settlement agreement with plaintiffs in the Billings matter, resulting in dismissal of the case in August 2022. In August 2022, 3M reached an agreement to settle personal injury claims brought by 37 individual plaintiffs in the King matter. 3M continues to negotiate with individual property owners regarding claims relating to former 3M disposal sites and has resolved several such claims for an immaterial amount.

In September 2020, the City of Guin Water Works and Sewer Board ("Guin WWSB") brought a lawsuit against 3M in Alabama state court alleging that PFAS contamination in the Guin water system stems from manufacturing operations at 3M’s Guin facility and disposal activity at a nearby landfill. Guin WWSB dismissed its lawsuit without prejudice in order to work with 3M to further investigate the presence of chemicals in the area; and in December 2021, the parties reached a settlement under which 3M agreed to contribute $30 million that will be used on a new treatment system for Guin’s drinking water and a new wastewater treatment facility.

In August 2022, Colbert County, Alabama, which opted out of the ~~2016 lifetime health advisory, 13 public~~St. John settlement, filed a lawsuit against 3M and several co-defendants alleging that discharge from operations in Decatur, Alabama has contaminated the Tennessee River, from which the County withdraws its drinking water. Defendants' joint motion to dismiss was denied in December 2022, and defendants have filed a petition for mandamus with the Supreme Court of Alabama, which remains pending. The case is in early stages of discovery.

In February 2023, the City of Muscle Shoals, Alabama filed a lawsuit against 3M and several co-defendants alleging that discharge from operations in Decatur, Alabama has contaminated the Tennessee River, from which the City withdraws its drinking water. Defendants filed a joint motion to dismiss in March 2023. Also in February 2023, two individuals who opted out of the St. John class settlement filed suit in Alabama state court against 3M, alleging PFAS contamination of their property resulting from 3M’s operations in Decatur. 3M removed the case to federal court and answered the complaint in March 2023. The case is in early stages of discovery.

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State Attorneys General Litigation related to PFAS

As previously reported, several state attorneys general have filed lawsuits against 3M and other defendants that are now pending in a federal Multi-District Litigation ("MDL") court in South Carolina regarding Aqueous Film Forming Foam (AFFF), described further below. The lawsuits generally seek, on a state-wide basis: injunctive relief, investigative and remedial work, compensatory damages, natural resource damages, attorneys’ fees, and, where available, punitive damages related to the states’ response to PFAS contamination. Currently in the AFFF MDL, state attorneys general lawsuits have been brought against 3M on behalf of the people of the states of Alaska, California, Florida, Illinois, Maine, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Vermont, and Wisconsin, as well as on behalf of the people of the territories of Guam, Puerto Rico, and the Northern Mariana Islands. Since March 2023, attorneys general have also brought suit against 3M on behalf of the people of Arizona, Arkansas, the District of Columbia, Kentucky, Maine (a second case, a purported “non-AFFF” case), Maryland (both AFFF and purported “non-AFFF” cases), New Mexico, Oregon, Rhode Island, Tennessee, Texas, and Washington.

There are also multiple state attorneys general lawsuits that are proceeding outside the AFFF MDL, as described below.

New Jersey. In March 2019, the New Jersey Attorney General filed two actions against 3M, E.I. DuPont De Nemours and Co. (“DuPont”), and Chemours Co. ("Chemours") on behalf of the New Jersey Department of Environmental Protection ("NJDEP"), the NJDEP’s commissioner, and the New Jersey Spill Compensation Fund regarding alleged discharges at two DuPont facilities in Pennsville, New Jersey (Salem County) and Parlin, New Jersey (Middlesex County). 3M is included as a defendant in both cases because it allegedly supplied PFOA to DuPont for use at the facilities at issue. Both cases expressly seek to have the defendants pay all costs necessary to investigate, remediate, assess, and restore the affected natural resources of New Jersey. DuPont removed these cases to federal court. In June 2020, the court consolidated the two actions, along with two others brought by the NJDEP relating to the DuPont facilities, for case management and pretrial purposes. The parties are conducting discovery. As of March 2023, the actions are stayed pending the parties’ participation in court-mandated mediation.

New Hampshire. In May 2019, the New Hampshire Attorney General filed two lawsuits alleging contamination of the state’s drinking water supplies ~~exceed~~and other natural resources by PFAS chemicals. As described above, one lawsuit was transferred to the ~~level~~AFFF MDL. The Company recently removed the other case to federal court and attempted to transfer it to the AFFF MDL, which was denied at this juncture in the litigation. In March 2023, the federal judge granted the state’s motion to remand the case back to state court. 3M has appealed that decision.

Vermont. In June 2019, the Vermont Attorney General filed two lawsuits alleging contamination of the state’s drinking water supplies and other natural resources by PFAS chemicals. As described above, one lawsuit was transferred to the AFFF MDL. The other suit asserts PFAS contamination from non-AFFF sources and names 3M and several entities related to DuPont and Chemours as defendants. In late 2022, the complaint was amended to add claims related to PFBS and GenX and to add a claim under Vermont’s Waste Management Act, which had been amended to add manufacturers as liable parties for ~~PFOA~~the release or threatened release of hazardous materials (which in Vermont includes certain PFAS compounds). This suit is proceeding in state court, where the parties are engaging in discovery and ~~46 exceed~~ the ~~level for PFOS (unchanged~~court has set a trial-ready date in October 2024.

Illinois. In March 2022, the Illinois Attorney General filed a lawsuit in Illinois state court against 3M alleging contamination of the state's natural resources by PFAS compounds disposed of by, or discharged, or emitted from 3M's Cordova plant. The complaint requests monetary damages, injunctive relief, civil penalties, a testing program, and a public outreach and information sharing program. The case was removed to federal court and 3M moved to transfer it to the ~~July 2016 EPA summary). A technical advisory issued by EPA~~AFFF MDL, which was denied at this stage in ~~September 2016 on laboratory analysis~~the litigation. The state has moved to remand the case back to state court, which remains pending. In January 2023, the Illinois Attorney General filed a new lawsuit against 3M and other defendants in Illinois state court, alleging contamination of a number of drinking water ~~samples stated~~systems and natural resource damages at several sites statewide, and seeking to recover monetary damages, injunctive relief for remediation, civil penalties and other relief. The complaint states that 65the Attorney General is not seeking damages for AFFF by this lawsuit. The case has been removed to federal court and, in June 2023, the U.S. Judicial Panel on Multidistrict Litigation (“JPML”) transferred the case to the AFFF MDL. In April 2023, the Illinois Attorney General filed a lawsuit against 3M and other defendants alleging PFAS contamination of state natural resources from AFFF.

California. The Company removed the previously-disclosed lawsuit filed by the California Attorney General to federal court and sought to have it transferred to the AFFF MDL.

Maine. In March 2023, Maine’s Attorney General filed two lawsuits in state court against 3M and other defendants that contain allegations related to PFAS contamination of state natural resources from AFFF and non-AFFF products, respectively. As described above, the AFFF lawsuit was removed to federal court and transferred to the AFFF MDL. 3M has removed the other lawsuit to federal court, where it has moved to transfer the case to the AFFF MDL, and the State has filed a motion for remand.

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Maryland. In May 2023, Maryland’s Attorney General filed two lawsuits in state court against 3M and other defendants that contain allegations related to PFAS contamination of state natural resources from AFFF and non-AFFF products, respectively.

In addition to the above state attorneys general actions, several other states and the District of Columbia, through their attorneys general, have announced selection processes to retain outside law firms to bring PFAS-related lawsuits against certain manufacturers including the Company. In addition, the Company is in discussions with several state attorneys general and agencies, responding to information and other requests relating to PFAS matters and exploring potential resolution of some of the matters raised.

Aqueous Film Forming Foam (AFFF) Environmental Litigation

3M manufactured and marketed AFFF containing certain PFAS for use in firefighting from approximately 1963 to 2002. As of June 30, 2023, approximately 4,996 lawsuits (including approximately 46 putative class actions and 451 public water ~~supplies had exceeded~~system cases) alleging injuries or damages from PFAS contamination or exposure allegedly caused by AFFF use have been filed against 3M (along with other defendants) in various state and federal courts. As further described below, a vast majority of these pending cases are in a federal MDL court in South Carolina. Additional AFFF cases continue to be filed in or transferred to the ~~combined level~~MDL. Claims in the MDL are asserted by individuals, public water systems, putative class members, state and territorial sovereigns, and other entities. Plaintiffs seek a variety of relief in cases in the MDL, including, where applicable, damages for ~~PFOA~~personal injury, property damage, water treatment costs, medical monitoring, natural resource damages, and ~~PFOS.~~punitive damages. The Company also continues to defend certain AFFF cases that remain in state court and is in discussions with pre-suit claimants for possible resolutions where appropriate.

AFFF MDL and Water System Cases

In December 2018, the JPML granted motions to transfer and consolidate all AFFF cases pending in federal courts to the U.S. District Court for the District of South Carolina to be managed in an MDL proceeding to centralize pre-trial proceedings. Over the past four years, the parties in the MDL have conducted substantial discovery, including ongoing master discovery and several rounds of discovery involving potential water supplier bellwether cases.

In the MDL, there are cases filed by approximately 451 public water systems ("PWS"). These ~~results~~include community water systems, which are ~~based~~public water systems that provide water for human use and consumption to a set population, and non-community water systems, which are public water systems that supply water to a varied population (for example, campgrounds or schools). There are approximately 50,000 community water systems in the United States. The MDL cases focus on ~~one~~AFFF, but the MDL also contains a number of cases with allegations related to the broader category of PFAS products. 3M and other defendants also face cases filed by approximately 55 public water systems outside of the MDL. Public water system cases include a variety of claims, including for product liability, negligence, and public nuisance. The cases seek damages for, among other things, remediation costs to remove PFAS from drinking water provided to communities, as well as punitive damages. The MDL court has repeatedly encouraged the parties in the MDL to negotiate to resolve cases, including these PWS cases. In October 2022, the court appointed a retired federal judge as mediator.

On June 22, 2023, 3M entered into a proposed class-action settlement to resolve a wide range of drinking water claims by public water systems in the United States (“PWS Settlement”), subject to court approval. Eligible class members are United States public water systems as defined in the PWS Settlement. Subject to court approval, the PWS Settlement would resolve the portion of the MDL that involves PWS drinking water claims in the United States by providing funding for treatment technologies to PWS that have tested positive for PFAS, funding for future testing, and funding for systems that test positive in the future.

Under the PWS Settlement, class members would agree to release 3M from any claim arising out of, relating to, or ~~more samples collected during~~involving (i) PFAS that has entered or may enter drinking water or the ~~period 2012-2015~~class member’s water system; (ii) the development, manufacture, formulation, distribution, sale, transportation, storage, loading, mixing, application, or use of PFAS or any product (including AFFF) manufactured with or containing PFAS; (iii) the transport, disposal, or arrangement for disposal of PFAS-containing waste or PFAS-containing wastewater, or a class member’s use of PFAS-containing water for irrigation or manufacturing; or (iv) representations about PFAS or any product (including AFFF) manufactured with or containing PFAS. The PWS Settlement would also require class members to release punitive- or exemplary-damages claims that arise out of conduct occurring at least in part before the PWS Settlement’s effective date and that relate to PFAS or any product (including AFFF) manufactured with or containing PFAS.

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If the court approves the PWS Settlement and all conditions in the PWS Settlement are met, 3M will pay $10.5 billion to $12.5 billion in total to resolve the claims released by the PWS Settlement. 3M recorded a pre-tax charge of $10.3 billion in the second quarter of 2023. The charge reflects the present value (discounted at an estimated 5.2% interest rate at time of proposed settlement) of the expected $12.5 billion nominal value of 3M’s payments under the PWS Settlement. The PWS Settlement calls for 3M to make payments annually from 2024 through 2036. The actual amounts that 3M will pay will be determined in part by which, if any, class members that do not ~~necessarily reflect current conditions~~have a positive test result for the presence of PFAS in their drinking water (as defined by the PWS Settlement) as of the date of the PWS Settlement receive such a test result by the end of 2025.

The PWS Settlement gives 3M the option to terminate the PWS Settlement if the numbers of eligible class members opting out of the Settlement exceed specified levels. The PWS Settlement provides that 3M does not admit any liability or wrongdoing and does not waive any defenses. The Settlement remains subject to preliminary and final approval from the MDL court.

The previously disclosed case filed by the City of Stuart, Florida that was selected by the MDL court as the first bellwether trial was also settled as a part of the PWS Settlement.

The MDL court has also directed the parties to submit a proposal for an initial set of personal injury bellwether cases. The MDL court has indicated that the parties will be expected to begin discovery on a set of 28 cases to be selected as potential personal injury bellwether cases. In September 2022, the court issued an order denying defendants’ MDL-wide summary judgment motions on the government contractor defense, which defense can be presented to a jury at future trials.

Outside the MDL, trial was also scheduled to occur in June 2023 in a lawsuit brought by the City of Rome, Georgia, which asserted claims against 3M and other defendants for compensatory damages, statutory damages for alleged violation of the Georgia Water Quality Control Act, punitive damages, attorneys’ fees, and injunctive relief. The parties reached a settlement agreement to resolve the case and, under the terms of the PWS Settlement, associated estimated payments factor in amounts related to the City of Rome settlement. The PWS Settlement amounts discussed above therefore include the City of Rome settlement.

Other AFFF Cases

In June 2019, several subsidiaries of Valero Energy Corporation, an independent petroleum refiner, filed eight AFFF cases against 3M and other defendants, including DuPont/Chemours, National Foam, Buckeye Fire Equipment, and Kidde-Fenwal, in various state courts. Plaintiffs seek damages that allegedly have been or will be incurred in investigating and remediating PFAS contamination at their properties and replacing or disposing of AFFF products containing long-chain PFAS compounds. Two of these ~~public water supplies. EPA reporting does not identify~~cases have been removed to federal court and transferred to the ~~sources~~AFFF MDL, and one case was voluntarily dismissed. Five cases remain pending in state courts where they are stayed by agreement of the parties.

As of June 30, 2023, the Company is aware of approximately 185 other AFFF suits originally filed in various state courts in which the Company has been named a defendant. 3M anticipates that most of these cases will eventually be removed to federal court and transferred to the AFFF MDL; however, several cases are expected to remain pending in state courts.

Separately, the Company is aware of pre-suit claims or demands by other parties related to the use and disposal of AFFF, one of which purports to represent a large group of firefighters. The Company had discussions with certain potential pre-suit claimants and, as a result of such discussions, reached a negotiated resolution for an immaterial amount with the City of Bemidji in March 2021.

Other PFAS-related Product and Environmental Litigation

3M manufactured and sold various products containing PFOA and PFOS, including Scotchgard, for several decades. Starting in 2017, 3M has been served with individual and putative class action complaints in various state and federal courts alleging, among other things, that 3M’s customers’ improper disposal of PFOA and PFOS resulted in the contamination of groundwater or surface water. The plaintiffs in these cases generally allege that 3M failed to warn its customers about the hazards of improper disposal of the product. They also generally allege that contaminated groundwater has caused various injuries, including personal injury, loss of use and enjoyment of their properties, diminished property values, investigation costs, and remediation costs. Several companies have been sued along with 3M, including Saint-Gobain Performance Plastics Corp., Honeywell International Inc. f/k/a Allied-Signal Inc. and/or AlliedSignal Laminate Systems, Inc., Wolverine World Wide Inc. ("Wolverine"), Georgia-Pacific LLC, DuPont, Chemours, and various carpet manufacturers.

The cases brought on behalf of drinking water providers described below will fall under the PWS Settlement if the water providers do not opt out of the PWS Settlement.

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In New York, 3M is defending 40 individual cases filed in the U.S. District Court for the Northern District of New York and five additional individual cases filed in New York state court against 3M, Saint-Gobain Performance Plastics Corp., Honeywell International Inc. and DuPont. Tonaga, Inc. (Taconic) is also a defendant in the state court actions. Plaintiffs allege that PFOA discharged from fabric coating facilities operated by non-3M entities (that allegedly had used PFOA-containing materials from 3M, among others) contaminated the drinking water in the Village of Hoosick Falls, the Town of Hoosick and Petersburg, New York. Plaintiffs in both the federal and state individual cases assert various tort claims for personal injury and property damage and in some cases request medical monitoring. A mediation involving plaintiffs from 32 of the federal and state cases and all of the defendants was held in April 2023. 3M and certain of the other defendants have agreed to settle the case with the plaintiffs involved in the mediation, subject in certain cases to court approval, and 3M’s share is not considered material. These cases will continue to move forward as to certain remaining defendants, and the other remaining cases continue. Additionally, 3M is defending a case in New York state court filed by the Town of Petersburgh in September 2022. Plaintiff alleges that 3M and several other manufacturers contributed to PFOA contamination in the town’s public water ~~supplies.~~

supply. Oral argument on a motion to dismiss that was filed by 3M and the other defendants is scheduled for July 2023. 3M is also defending 22 individual cases in the U.S. District Court for the Eastern District of New York filed by various drinking water providers, including 9 new complaints filed on behalf of additional water districts during the quarter ended June 30, 2023. The plaintiffs in these cases allege that products manufactured by 3M, DuPont, and additional unnamed defendants contaminated plaintiffs’ water supply sources with various PFAS compounds. 3M has filed answers in these cases and discovery is ongoing.

In Michigan, one consolidated putative class action was pending in the U.S. District Court for the Western District of Michigan against 3M and Wolverine. The action arose from Wolverine’s allegedly improper disposal of materials and wastes, including 3M Scotchgard, related to Wolverine’s shoe manufacturing operations. Plaintiffs allege Wolverine used 3M Scotchgard in its manufacturing process and that chemicals from 3M’s product contaminated the environment and drinking water sources after disposal. 3M and Wolverine agreed to settle the case with the plaintiffs, and 3M's share is not considered material; the court approved the class settlement in March 2023 and 3M's final payment related to the settlement was made in June 2023.

In Alabama and Georgia, 3M, together with multiple co-defendants, is defending two state court cases brought by municipal water utilities, relating to 3M’s sale of PFAS-containing products to carpet manufacturers in Georgia. In September 2022, the Company reached an agreement with the Gadsden Water Works and Sewer Board to resolve a similar matter. The plaintiffs in these two water utilities cases allege that the carpet manufacturers improperly discharged PFAS into the surface water and groundwater, contaminating drinking water supplies of cities located downstream along the Coosa River, including Centre, Alabama and Rome, Georgia. The Centre case has been set for trial in November 2023.The City of Rome case had been scheduled for trial in June 2023, as discussed in more detail above but, the case resolved by settlement between the parties shortly before trial. Another case originally filed in Georgia state court was brought by individuals asserting PFAS contamination by the Georgia carpet manufacturers and seeking economic damages and injunctive relief on behalf of a putative class of Rome and Floyd County water subscribers. That case continues, with class certification and other motions recently briefed.

In April 2023, another case that included similar allegations was filed by Shelby County, Alabama, and Talladega County, Alabama, against 3M and other defendants. Those cases have been removed to federal court, where they are proceeding through discovery.

3M, together with co-defendants, is also defending another putative class action in federal court in Georgia, in which plaintiffs seek relief on behalf of a class of individual ratepayers in Summerville, Georgia who allege their water supply was contaminated by PFAS discharged from a textile mill. In May 2021, the City of Summerville filed a motion to intervene in the lawsuit, which was granted in March 2022. This case is now proceeding through discovery, which has been extended by the court through November 2023.

In July 2022, a putative class action was filed against 3M and other PFAS manufacturers by The Utilities Board of Tuskegee on behalf of all drinking water utilities within Alabama whose finished drinking water has contained a detectable concentration level of PFOA, PFOS, GenX, or PFBS that exceed the June 2022 health advisory levels issued by the U.S. EPA. 3M filed a motion to dismiss the complaint in October 2022, which was granted in part and denied in part in February 2023. The claims that will proceed against 3M and other defendants, including negligence, wantonness, and public nuisance, are moving into discovery.

In California, 3M, Decra Roofing and certain DuPont-related entities were named as defendants in an action brought in state court by the City of Corona and a local utility authority, alleging PFAS contamination of the plaintiffs’ water sources and also referring to 3M's industrial minerals facility in Corona, California as a potential source of contamination. The court granted demurrers filed by Decra and the DuPont entities, while 3M answered the complaint in February 2022. This case has been removed to federal court and was transferred to the AFFF MDL. In October 2022, a putative class action was filed against the Company and other parties on behalf of individuals who have been drinking water from the Temescal Subbasin, from which the City of Corona gets its water, seeking injunctive relief, damages, and medical monitoring. This case has been removed to federal court and was transferred to the AFFF MDL.

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In Delaware, 3M, is defending one putative class action brought by individuals alleging PFAS contamination of their water supply resulting from the operations of local metal plating facilities. Plaintiffs allege that 3M supplied PFAS to the metal plating facilities. DuPont, Chemours, and the metal platers have also been named as defendants. This case was removed to federal court, and in September 2022, the court dismissed all but plaintiffs’ negligence claim. Plaintiffs have filed a third amended complaint which 3M moved to dismiss in December 2022. This motion has been fully briefed and is pending the court decision.

In New Jersey, 3M is a defendant in an action brought in federal court by Middlesex Water Company, a publicly traded water utility serving customers in and around certain portions of Middlesex County, New Jersey, which alleges PFAS contamination of its water system. The Court denied 3M’s motion for summary judgment in October 2022 and a trial date has been set for October 2, 2023. The parties are exploring potential resolution in advance of trial. In September 2020, 3M was named a defendant in a similar lawsuit brought by the Borough of Hopatcong. In January 2021, 3M was named a defendant in another similar lawsuit brought by the Pequannock Township. Fact discovery has closed in both the Hopatcong and Pequannock matters, and expert discovery is scheduled to commence in June 2023 (Hopatcong) and July 2023 (Pequannock).

3M, together with several co-defendants, is also defending 27 cases in New Jersey federal court brought by individuals with private drinking water wells near certain DuPont and Solvay facilities that were allegedly supplied with PFAS by 3M. These cases have all been coordinated for discovery, which is ongoing. 3M has agreed to settle with the plaintiffs in ten cases that sought property damages, subject in certain cases to court approval, and 3M’s share is not considered material. Plaintiffs in the 17 remaining individual cases in federal court allege personal injuries to themselves or their disabled adult children. In July 2022, plaintiffs sought leave to amend their complaints in the first five cases to add claims concerning seven non-PFAS chemistries as against defendants other than 3M, which motion was denied by the court. Nine of the remaining personal injury cases were filed in state court and removed to federal court. Plaintiffs are currently seeking remand in four of these cases. In December 2022, an additional personal injury case was filed in New Jersey State court.

3M and Middlesex Water Company are also defending a putative class action filed in New Jersey federal court in November 2021 by individuals who received drinking water from Middlesex Water Company that was allegedly contaminated with PFAS. The court denied 3M’s motion to dismiss, and the case is proceeding through discovery. In May 2022, Middlesex Water Company filed a third-party complaint against the Company in New Jersey state court in a putative class action of the state residents who are customers of the water company, seeking indemnity from the Company. After Middlesex Water Company removed the case to federal court in July 2022, plaintiffs filed a motion to remand the case to state court. The federal court remanded the case back to state court in April 2023 and 3M has since answered the third-party complaint. In March 2023, a personal injury lawsuit was filed against 3M by another Middlesex Water Company customer. In May 2023, 3M filed a motion to dismiss certain of the claims in that lawsuit.

In South Carolina, a putative class action lawsuit was filed in South Carolina state court against 3M, DuPont and DuPont related entities in March 2022. The lawsuit alleges property damage and personal injuries from contamination from PFAS compounds used and disposed of at the textile plant known as the Galey & Lord plant from 1966 until 2016. The complaint seeks remedies including damages, punitive damages, and medical monitoring. The case has been removed to federal court. Plaintiff filed a second amended complaint in December 2022, which 3M has moved to dismiss.

In Massachusetts, a putative class action lawsuit was filed in August 2022 in state court against 3M and several other defendants alleging PFAS contamination from waste generated by local paper manufacturing facilities. The lawsuit alleges property damage and also seeks medical monitoring on behalf of plaintiffs within the Town of Westminster. This case was removed to federal court. In February 2023, the federal court consolidated this action with a previously-filed federal case involving similar allegations and claims against 3M’s co-defendants. Thereafter, plaintiffs filed a second amended complaint asserting claims against 3M. 3M filed a motion to dismiss the second amended complaint in March 2023.

In Maine, a group of landowners filed a second amended complaint in October 2022 in federal district court, adding 3M and several other alleged chemical suppliers as defendants in a case previously filed against several paper mills, alleging PFAS contamination from waste generated by the paper mills. The lawsuit seeks to recover for alleged property damage. In March 2023, plaintiffs filed a third amended complaint limiting the scope of their claims to allegations pertaining to one paper mill and three defendants that allegedly supplied PFAS-containing products to that mill, including 3M. 3M has moved to dismiss this case.

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In October 2018, 3M and other defendants, including DuPont and Chemours, were named in a putative class action in the U.S. District Court for the Southern District of Ohio brought by the named plaintiff, a firefighter allegedly exposed to PFAS chemicals through his use of firefighting foam, purporting to represent a putative class of all U.S. individuals with detectable levels of PFAS in their blood. The plaintiff brings claims for negligence, battery, and conspiracy and seeks injunctive relief, including an order “establishing an independent panel of scientists” to evaluate PFAS. In March 2022, the court certified a class of "[i]ndividuals subject to the laws of Ohio, who have 0.05 [ppt] of PFOA (C-8) and at least 0.05 ppt of any other PFAS in their blood serum." The judge ordered additional briefing to permit defendants to narrow the proposed nationwide class by “show[ing] what states do not recognize the type of claim for relief filed by” the plaintiff. In September 2022, the Sixth Circuit granted the defendants’ request to appeal the district court’s class certification order. Defendants’ appeal is now fully briefed.

Other PFAS-related Matters

In July 2019, the Company received a written request from the Subcommittee on Environment of the Committee on Oversight and Reform, U.S. House of Representatives, seeking certain documents and information relating to the Company’s manufacturing and distribution of PFAS products. In September 2019, a 3M representative testified before and responded to questions from the Subcommittee on Environment with respect to PFAS and the Company’s environmental stewardship initiatives. The Company ~~is continuing~~continues to cooperate with the Subcommittee.

The Company continues to make progress in its work, under the supervision of state regulators, to ~~address its~~remediate historic disposal of ~~PFC-containing~~PFAS-containing waste associated with manufacturing operations at ~~the~~its Decatur, ~~Alabama,~~Alabama; Cottage Grove, ~~Minnesota,~~Minnesota; and Cordova, Illinois plants.

As previously reported, the Illinois EPA in August 2014 approved a request by the Company ~~entered into~~to establish a ~~voluntary remedial action agreement with the Alabama Department of Environmental Management (ADEM) to address the presence of PFCs in the soil~~groundwater management zone at ~~the Company’s~~its manufacturing facility in ~~Decatur, Alabama. Pursuant~~Cordova, Illinois, which includes ongoing pumping of impacted site groundwater, groundwater monitoring and routine reporting of results. In June 2022, the Illinois EPA provided notice of the termination of the Cordova May 2000 Site Remediation Agreement. The Company continues to ~~a permit issued by ADEM, for approximately twenty years,~~perform pumping of impacted site groundwater, groundwater monitoring and routine reporting of results to Illinois EPA. In addition, the Company ~~incorporated~~is treating its pumped groundwater at its Cordova wastewater treatment ~~plant sludge containing PFCs in fields at its Decatur facility. After a review of~~plant.

In Minnesota, the available options to address the presence of PFCs in the soil, ADEM agreed that the preferred remediation option is to use a multilayer cap over the former sludge incorporation areas on the manufacturing site with subsequent groundwater migration controls and treatment. Implementation of that plan continues and is expected to be completed in 2018.

~~The~~ Company continues to work with the ~~Minnesota Pollution Control Agency (MPCA)~~MPCA pursuant to the terms of the previously disclosed May 2007 Settlement Agreement and Consent Order to address the presence of certain ~~PFCs~~PFAS compounds in the soil and groundwater at former disposal sites in Washington County, Minnesota (Oakdale and Woodbury) and at the Company’s manufacturing facility at Cottage Grove, Minnesota. Under this agreement, the Company’s principal obligations include (i) evaluating releases of certain ~~PFCs~~PFAS compounds from these sites and proposing response actions; (ii) providing treatment or alternative drinking water upon identifying any level exceeding a ~~Health Based Value (“HBV”)~~HBV or Health Risk Limit ~~(“HRL”~~("HRL") (i.e., the amount of a chemical in drinking water determined by the ~~Minnesota Department of Health (MDH)~~MDH to be safe for human consumption over a lifetime) for certain ~~PFCs~~PFAS compounds for which a HBV and/or HRL exists as a result of contamination from these sites; (iii) remediating identified sources of other ~~PFCs~~PFAS compounds at these sites that are not controlled by actions to remediate PFOA and PFOS; and (iv) sharing information with the MPCA about certain perfluorinated compounds. ~~During 2008, the MPCA issued formal decisions adopting remedial options for the former disposal sites in Washington County, Minnesota (Oakdale and Woodbury).~~ In August 2009, the MPCA issued a ~~formal~~ decision adopting remedial options for the Company’s Cottage Grove manufacturing facility. ~~During~~In the spring and summer of 2010, 3M began implementing the ~~agreed upon~~approved remedial options at the Cottage Grove and Woodbury ~~sites.~~

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sites, and in late 2010, 3M commenced the approved remedial option at the Oakdale ~~site in late 2010. At each location the remedial options were recommended by the~~site. The Company has completed remediation work and ~~approved by the MPCA. Remediation work has been completed~~continues with operational and maintenance activities at the Oakdale and Woodbury ~~sites, and they are in an operational maintenance mode.~~sites. Remediation ~~will continue~~work has been substantially completed at the Cottage Grove site, ~~during 2017.~~

with operational and maintenance activities ongoing.

In ~~August 2014, the Illinois EPA approved a request by~~Alabama, as previously reported, the Company entered into a voluntary remedial action agreement with the ADEM to ~~establish a~~remediate the presence of PFAS in the soil and groundwater ~~management zone~~ at ~~its~~the Company’s manufacturing facility in ~~Cordova, Illinois, which includes ongoing pumping~~Decatur, Alabama associated with the historic (1978-1998) incorporation of ~~impacted~~wastewater treatment plant sludge. With ADEM’s agreement, 3M substantially completed installation of a multilayer cap on the former sludge incorporation areas. Further remediation activities, including certain on-site and off-site investigations and studies, will be conducted in accordance with the July 2020 Interim Consent Order described below.

The Company operates under a 2009 consent order issued under the federal TSCA (the “2009 TSCA consent order”) for the manufacture and use of two perfluorinated materials (FBSA and FBSEE) at its Decatur, Alabama site ~~groundwater, groundwater monitoring,~~that prohibits release of these materials into “the waters of the United States.” In March 2019, the Company halted the manufacture, processing, and ~~routine reporting~~use of ~~results.~~

In May 2017, the MDH issued new HBVs for PFOS and PFOA. The new HBVs are 35 ppt for PFOA and 27 ppt for PFOS. In connection with its announcement, the MDH stated that “Drinking water with PFOA and PFOS, eventhese materials at the ~~levels above~~site upon learning that these materials may have been released from certain specified processes at the ~~updated values, does not represent an immediate health risk.~~Decatur site into the Tennessee River. In April 2019, the Company voluntarily disclosed the releases to the U.S. EPA and ADEM. During June and July 2019, the Company took steps to fully control the aforementioned processes by capturing all wastewater produced by the processes and treating all air emissions. These ~~values are designed to reduce long-term health risks across the population~~processes have been back on-line and ~~are based on multiple safety factors to protect the most vulnerable citizens, which makes them overprotective for most of the residents~~ in ~~our state.”~~

operation since July 2019. The Company ~~cannot predict what additional~~continues to cooperate with the EPA and ADEM in their investigations and will work with the regulatory ~~actions arising~~authorities to demonstrate compliance with the release restrictions.

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The Company is authorized to discharge wastewater from its Decatur plant pursuant to an NPDES permit issued by ADEM. The NPDES permit requires monthly and quarterly reporting on the ~~foregoing proceedings~~quality and ~~activities, if any, may be taken regarding such compounds or~~quantity of pollutants discharged to the ~~consequences~~Tennessee River. In June 2019, as previously reported, the Company voluntarily disclosed to the EPA and ADEM that it had included incorrect values in certain of ~~any such actions.~~

~~Environmental Litigation~~

its monthly and quarterly reports. The Company has submitted the corrected values to both the EPA and ADEM.

As previously reported, as part of ongoing work with the EPA and ADEM to address compliance matters at the Decatur facility, the Company discovered it had not fully characterized its PFAS discharge in its NPDES permit. In September 2019, the Company disclosed the matter to the EPA and ADEM temporarily idled certain manufacturing processes at 3M Decatur, and installed wastewater treatment controls. The Company restarted idled processes in October 2019.

As a ~~former employee filed a purported class action lawsuit in 2002~~result of the Company’s discussions with ADEM to address these and other related matters in the Circuit Court of Morgan County, Alabama (the St. John case), seeking unstated damages and alleging that the plaintiffs suffered fear, increased risk, subclinical injuries, and property damage from exposure to certain perfluorochemicals at or near the Company’s Decatur, Alabama, manufacturing facility. The court in 2005 granted the Company’s motion to dismiss the named plaintiff’s personal injury-related claims on the basis that such claims are barred by the exclusivity provisions of the state’s Workers Compensation Act. The plaintiffs’ counsel filed an amended complaint in November 2006, limiting the case to property damage claims on behalf of a purported class of residents and property owners in the vicinity of the Decatur plant. In June 2015, the plaintiffs filed an amended complaint adding additional defendants, including BFI Waste Management Systemsstate of Alabama, ~~LLC; BFI Waste Management~~as previously reported, 3M and ADEM agreed to the terms of ~~North America, LLC; the City of Decatur, Alabama; Morgan County, Alabama; Municipal Utilities Board of Decatur;~~an interim Consent Order in July 2020 to cover all PFAS-related wastewater discharges and ~~Morgan County, Alabama, d/b/a Decatur Utilities.~~

In 2005, the judge in a second purported class action lawsuit filed by three residents of Morgan County, Alabama, seeking unstated compensatory and punitive damages involving alleged damage to their property fromair emissions ~~of certain perfluorochemical compounds~~ from the Company’s Decatur ~~Alabama, manufacturing facility that formerly manufactured those compounds (the Chandler case) granted~~facility. Under the interim Consent Order, the Company’s ~~motion~~principal obligations include commitments related to ~~abate~~(i) future ongoing site operations such as (a) providing notices or reports and performing various analytical and characterization studies and (b) future capital improvements; and (ii) remediation activities, including on-site and off-site investigations and studies. Obligations related to ongoing future site operations under the ~~case, effectively putting~~Consent Order will involve additional operating costs and capital expenditures over multiple years. As offsite investigation activities continue, additional remediation amounts may become probable and reasonably estimable.

As previously reported, in December 2019, the case on hold pending the resolution of class certification issues in the St. John case. Despite the stay, plaintiffs filed an amended complaint seeking damages for alleged personal injuries and property damage on behalf of the named plaintiffs and the members ofCompany received a ~~purported class. No further action in the case is expected unless and until the stay is lifted.~~

In February 2009, a resident of Franklin County, Alabama, filed a purported class action lawsuit in the Circuit Court of Franklin County (the Stover case) seeking compensatory damages and injunctive relief based on the application by the Decatur utility’s wastewater treatment plant of wastewater treatment sludge to farmland and grasslands in the state that allegedly contain PFOA, PFOS and other perfluorochemicals. The named plaintiff seeks to represent a class of all persons within the State of Alabama who have had PFOA, PFOS, and other perfluorochemicals released or deposited on their property. In March 2010, the Alabama Supreme Court ordered the case transferredgrand jury subpoena from Franklin County to Morgan County. In May 2010, consistent with its handling of the other matters, the Morgan County Circuit Court abated this case, putting it on hold pending the resolution of the class certification issues in the St. John case.

~~In October 2015, West Morgan-East Lawrence Water & Sewer Authority (Water Authority) filed an individual complaint against 3M Company, Dyneon, L.L.C, and Daikin America, Inc., in~~ the U.S. District Court for the Northern District of Alabama. The complaint also includes representative plaintiffs who brought the complaint on behalf of themselves, and a class of all owners and possessors of property who use water provided by the Water Authority and five

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local water works to which the Water Authority supplies water (collectively, the “Water Utilities”). The complaint seeks compensatory and punitive damages and injunctive relief based on allegations that the defendants’ chemicals, including PFOA and PFOS from their manufacturing processes in Decatur, have contaminated the water in the Tennessee River at the water intake, and that the chemicals cannot be removed by the water treatment processes utilized by the Water Authority. In September 2016, the court granted 3M’s motion to dismiss plaintiffs’ trespass claims with prejudice, negligence claims for personal injuries, and private nuisance claims, and denied the motion to dismiss the plaintiffs’ negligence claims for property damage, public nuisance, abatement of nuisance, battery and wantonness.

~~In June 2016, the Tennessee Riverkeeper, Inc. (Riverkeeper), a non-profit corporation, filed a lawsuit in the U.S. District Court~~Attorney’s Office for the Northern District of Alabama ~~against 3M; BFI Waste Systems of Alabama;~~for documents related to, among other matters, the City of Decatur, Alabama; and the Municipal Utilities Board of Decatur, Morgan County, Alabama. The complaint alleges that the defendants violated the Resource Conservation and Recovery Act in connectionCompany’s compliance with the ~~disposal of certain PFCs through their ownership~~2009 TSCA consent order and ~~operation of their respective sites. The complaint further alleges such practices may present an imminent and substantial endangerment~~unpermitted discharges to health and/or the environment and that Riverkeeper has suffered and will continue to suffer irreparable harm caused by defendants’ failure to abate the endangerment unless the court grants the requested relief, including declaratory and injunctive relief. The Company believes that the complaint lacks merit.

In July 2016, the City of Lake Elmo filed a lawsuit in the U.S. District Court for the District of Minnesota against 3M alleging that the City suffered damages from drinking water supplies contaminated with PFCs, including costs to construct alternative sources of drinking water. Trial is scheduled to begin in January 2019.

In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama filed a lawsuit in the Circuit Court of Etowah County Alabama against 3M and various carpet manufacturers. The complaint alleges that PFCs from the defendants’ facilities contaminated the Coosa River as its raw water source for drinking water and seeks unstated damages for the installation and operation of a filtration system, expenses to monitor PFC levels, and lost profits and sales.

In November 2016, the Town of Barnstable, Massachusetts filed an individual action in the U.S. District Court for the District of Massachusetts seeking unstated compensatory and punitive damages and other relief against 3M and other suppliers of AFFF for alleged contamination of the aquifer supplying drinking water to the Hyannis water system. The town seeks to recover costs associated with the investigation, treatment, remediation, and monitoring of drinking water supplies allegedly contaminated with certain PFCs used in AFFF. In January 2017, the County of Barnstable, Massachusetts, filed an individual action in the U.S. District Court for the District of Massachusetts seeking unstated compensatory and punitive damages and other relief (including indemnification and contribution in connection with claims asserted against the County by the Town of Barnstable) against 3M and other suppliers of AFFF for alleged contamination of the aquifer supplying drinking water to the Hyannis water system.

In January 2017, several hundred plaintiffs sued 3M, its subsidiary Dyneon, and Daikin American in Lawrence and Morgan Counties, Alabama. The plaintiffs are owners of property, residents, and holders of property interests who receive their water from the West Morgan-East Lawrence Water and Sewer Authority (Authority). They assert common law claims for negligence, nuisance, trespass, wantonness, and battery, and they seek injunctive relief and punitive damages. The plaintiffs contend that the defendants own and operate manufacturing and disposal facilities in Decatur that have released and continue to release PFOA, PFOS and related chemicals into the groundwater and surface water of their sites, resulting in discharge into the Tennessee River. The ~~plaintiffs also contend~~Company is cooperating and providing responsive documents with respect to this and other inquiries regarding its manufacturing facilities.

In addition, as previously reported, as part of its ongoing evaluation of regulatory compliance at its Cordova, Illinois facility, the Company discovered it had not fully characterized its PFAS discharge in its NPDES permit for the Cordova facility. In November 2019, the Company disclosed this matter to the EPA, and in January 2020 disclosed this matter to the Illinois Environmental Protection Agency ("IEPA"), submitted an NPDES permit application for the PFAS in its discharge, put on-line and in operation wastewater treatment specifically designed to treat PFAS. The Company continues to work with the EPA and IEPA to address these issues from the Cordova facility. In November 2022, the Company entered into an SDWA Administrative Consent Order that requires the ~~defendants have discharged into Bakers Creek~~Company to continue to sample and survey private and public drinking water wells within the vicinity of the Cordova facility, provide treatment of private water wells within a three-mile radius of the Cordova facility, and to provide alternate treatment/supply for the Camanche, Iowa public drinking water system. The Company continues to work with EPA and the ~~Decatur Utilities Dry Creek Wastewater Treatment Plant,~~City of Camanche as it implements the SDWA Administrative Consent Order.

In April 2022, the Company received a TSCA information request from EPA seeking information related to the operation of specific PFAS-related processes, and the Company is cooperating with this inquiry and is producing documents and information. In May 2022, the Company received a notice of potential violation and opportunity to confer and a notice of intent to file a complaint from EPA alleging violations of the RCRA related to the use of emergency spill containment units associated with certain chemical processes at the Cordova facility. In July 2023, 3M received from the EPA a draft of a federal administrative order for discussion, which would require 3M to determine the nature and extent of PFAS contamination around its Cordova facility, among other items.

The Company is also reviewing operations at its other plants with similar manufacturing processes, such as the plant in ~~turn, discharges wastewater containing these chemicals into the Tennessee River. The plaintiffs contend that, as~~Cottage Grove, Minnesota, to ensure those operations are in compliance with applicable environmental regulatory requirements and Company policies and procedures. As a result of these reviews, as previously reported, the ~~alleged discharges,~~Company discovered it had not fully characterized its PFAS discharge in its NPDES permit for the ~~water supplied by~~Cottage Grove facility. In March 2020, the ~~Authority~~Company disclosed this matter to the ~~plaintiffs was,~~MPCA and the EPA. In July 2020, the Company received an information request from MPCA for documents and information related to, among other matters, the Company’s compliance with the Clean Water Act at its Cottage Grove facility. The Company is cooperating with this inquiry and is ~~contaminated with PFOA, PFOS,~~producing documents and ~~related chemicals at a level dangerous~~information in response to ~~humans.~~

~~In May 2017,~~ the Water Works and Sewer Board of the Town of Centre, Alabama filed a lawsuit in the Circuit Court of Cherokee County Alabama against 3M, DuPont, and various carpet and textile manufacturers. The complaint alleges that PFCs from the defendants’ facilities contaminated the town’s raw water sourcerequest for ~~drinking water and seeks unstated damages for the installation and operation of a filtration system, expenses to monitor PFC levels, lost profits and sales, and injunctive relief.~~

information.

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AsSeparately, as previously reported, in June 2020, the Company reported to EPA and MPCA that it had not fully complied with elements of ~~September 30, 2017, eleven purported class actions have been filed against 3M~~the inspection, characterization and waste stream profile verification process of the Waste and Feedstream Analysis Plan (WAP/FAP) of its RCRA permit for its Cottage Grove incinerator. The Company and MPCA resolved the issues associated with the foregoing disclosure in a May 2022 stipulation agreement, and permanently retired the Cottage Grove hazardous waste incinerator in December 2021. In connection with the now closed incinerator, the Company in December 2022 received from EPA a draft Consent Agreement and Penalty Order under the Clean Air Act, with a proposed civil penalty to resolve issues raised in a Finding of Violation issued in 2019. The Company and EPA resolved this matter in which the Company has agreed to pay an administrative civil penalty. In October 2021, the Company received information requests from MPCA seeking additional toxicological and other ~~defendants~~information related to certain PFAS compounds. The Company is cooperating with these inquires and is producing documents and information in ~~federal or state courts - three in federal court in Colorado, four in federal court in Pennsylvania, and four in state court in New York. An individual complaint also has been filed in~~response to the ~~federal court in Pennsylvania. The complaints seek unstated damages and other remedies, such as medical monitoring, and allege~~requests. In June 2022, MPCA directed that the plaintiffs suffered personal injury and property damage from drinking water supplies contaminated with certain PFCs used in Aqueous Film Forming Foam (AFFF) at current or former airports and air force military bases located in Colorado, Pennsylvania, and New York.

In December 2010, the State of Minnesota, by its Attorney General Lori Swanson, acting in its capacity as trustee of the natural resources of the State of Minnesota, filed a lawsuit in Hennepin County District Court against 3M to recover damages (including unspecified assessment costs and reasonable attorney’s fees) for alleged injury to, destruction of, and loss of use of certain of the State’s natural resources under the Minnesota Environmental Response and Liability Act (MERLA) and the Minnesota Water Pollution Control Act (MWPCA), as well as statutory nuisance and common law claims of trespass, nuisance, and negligence with respect toCompany address the presence of ~~PFCs~~PFAS in its stormwater discharge from the Cottage Grove facility. The Company worked with MPCA to develop a plan to address its stormwater, which is embodied in an order issued by MPCA in December 2022. MPCA issued to the Company a Notice of Violation in March 2023, alleging that the Company is discharging stormwater containing PFAS at the 3M’s facility in Hutchinson, Minnesota. The Company is working with MPCA regarding the allegations in the ~~groundwater, surface water, fish~~Notice of Violation.

In February 2020, as previously reported, the Company received an information request from EPA for documents and information related to, among other matters, the Company’s compliance with the Clean Water Act at its facilities that manufacture, process, and use PFAS, including the Decatur, Cordova, and Cottage Grove facilities, and the Company has completed its production of responsive documents and information.

The Company continues to work with relevant federal and state agencies (including EPA, the U.S. Department of Justice, state environmental agencies and state attorneys general) as it conducts these reviews and responds to information, inspection, and other requests from the agencies. The Company cannot predict at this time the outcomes of resolving these compliance matters, what actions may be taken by the regulatory agencies or the potential consequences to the Company.

Other Environmental Litigation

In July 2018, the Company, along with more than 120 other ~~aquatic life,~~companies, was served with a complaint seeking cost recovery and ~~sediments (the “NRD Lawsuit”).~~contribution towards the cleaning up of approximately eight miles of the Lower Passaic River in New Jersey. The ~~State also~~plaintiff, Occidental Chemical Corporation, alleges that it agreed to design and pay the estimated $165 million cost to remove and cap sediment containing eight chemicals of concern, including PCBs and dioxins. The complaint seeks ~~declarations under MERLA that 3M is responsible for all damages~~to spread those costs among the ~~State may suffer~~defendants, including the Company. The Company’s involvement in the ~~future for injuries~~case relates to ~~natural resources from releases~~its past use of ~~PFCs into~~two commercial drum conditioning facilities in New Jersey. Whether, and to what extent, the ~~environment, and under MWPCA that 3M is responsible for compensation for future loss or destruction of fish, aquatic life, and other damages.~~

In November 2011, the Metropolitan Council filed a motion to intervene and a complaint in the NRD Lawsuit seeking compensatory damages and other legal, declaratory and equitable relief, including reasonable attorneys’ fees, for costs and fees that the Metropolitan Council alleges it willCompany may be required to ~~assess at some time in the future if the MPCA imposes restrictions on Metropolitan Council’s PFOS discharges~~contribute to the Mississippi River, including the installation and maintenance of a water treatment system. The Metropolitan Council’s intervention motion was based on several theories, including common law negligence, and statutory claims under MERLA for response costs and under the Minnesota Environmental Rights Act (MERA) for declaratory and equitable relief against 3M for PFOS and other PFC pollution of the waters and sediments of the Mississippi River. 3M did not object to the motion to intervene. In January 2012, 3M answered the Metropolitan Council’s complaint and filed a counterclaim alleging that the Metropolitan Council discharges PFCs to the Mississippi River and discharges PFC-containing sludge and bio solids from one or more of its wastewater treatment plants onto agricultural lands and local area landfills. Accordingly, 3M’s complaint against the Metropolitan Council asked that if the court finds that the State is entitled to any of the damages it sought, 3M be awarded contribution and apportionment from the Metropolitan Council, including attorneys’ fees, under MERLA, and contribution from and liability for the Metropolitan Council’s proportional share of damages awarded to the State under the MWPCA, as well as under statutory nuisance and common law theories of trespass, nuisance, and negligence. 3M also sought declaratory relief under MERA. In May 2017, the Metropolitan Council paid 3M approximately $1 million and agreed to dismiss its claims against 3M. As part of the settlement agreement, 3M agreed to dismiss its claims against the Metropolitan Council.

In April 2012, 3M filed a motion to disqualify the State of Minnesota’s counsel, Covington & Burling, LLP (Covington). In October 2012, the court granted 3M’s motion to disqualify Covington as counsel to the State, and the State and Covington appealed the court’s disqualification to the Minnesota Court of Appeals. In July 2013, the Minnesota Court of Appeals affirmed the district court’s disqualification order. In October 2013, the Minnesota Supreme Court granted both the State’s and Covington’s petition for review of the decision of the Minnesota Court of Appeals. In April 2014, the Minnesota Supreme Court affirmed in part, reversed in part, and remanded the case to the district court for further proceedings. The district court took evidence on the disqualification issues at a hearing in October 2015. In February 2016, the district court ruled that Covington violated the professional ethics rule against representing a client (here the State of Minnesota) in the same or substantially related matter where that person’s interests are materially adverse to the interests of a former client (3M). The district court, however, denied 3M’s motion to disqualify Covington because it further found that 3M impliedly waived by delaying to assert the conflict. Other activityissue in the case ~~which had been stayed pending the outcome of the disqualification issue, has resumed. Trial of the NRD Lawsuit is scheduled~~remains to begin in February 2018. In a separate but related action, the Company filed suit in the Ramsey County District Court against Covington for breach of its fiduciary duties to the Company and for breach of contract arising out of Covington’s representation of the State of Minnesota in the NRD Lawsuit. In September 2016, the court granted 3M’s motion for

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leave to amend the complaint to plead punitive damages. In February 2017, Covington settled this lawsuit with a payment by Covington or its insurer to 3M that is not material to 3M’s results of operations or financial condition.

For environmental matters and litigation ~~matters~~ described ~~in this section for which a~~above, unless otherwise described below, no liability ~~if any,~~ has been recorded as the Company believes ~~the amount recorded, as well as the possible loss or range of loss~~liability in ~~excess of the established accrual is not material to the Company’s consolidated results of operations or financial condition. For~~ those matters ~~for which a liability has not been recorded, the Company believes any such liability~~ is not probable and reasonably estimable and the Company is not able to estimate a possible loss or range of possible loss at this time.

The Company’s environmental liabilities and insurance receivables are described below.

Environmental Liabilities and Insurance Receivables

The Company periodically examines whether the contingent liabilities related to the environmental matters and litigation described above are probable and reasonably estimable based on experience and ongoing developments in those matters, including discussions regarding negotiated resolutions. During the first six months of 2023, as a result of ongoing review and recent developments in ongoing environmental matters and litigation (including the proposed PWS Settlement), the Company increased its accrual for PFAS-related other environmental liabilities by $10.3 billion and made related payments of $38 million. As of ~~September~~June 30, ~~2017,~~2023, the Company had recorded liabilities of ~~$38~~$10.9 billion for “other environmental liabilities.” These amounts are reflected in the consolidated balance sheet within other current liabilities ($0.3 billion) and other liabilities ($10.6 billion). The accruals represent the Company’s estimate of the probable loss in connection with the environmental matters and PFAS-related matters and litigation described above. The Company is not able to estimate a possible loss or range of possible loss in excess of the established accruals at this time.

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As of June 30, 2023, the Company had recorded liabilities of $32 million for estimated non-PFAS related “environmental remediation” costs ~~based upon an evaluation of currently~~to clean up, treat, or remove hazardous substances at current or former 3M manufacturing or third-party sites. The Company evaluates available facts with respect to each individual site each quarter and ~~also recorded related insurance receivables of $8 million. The Company~~ records liabilities for remediation costs on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company’s commitment to a plan of action. Liabilities for estimated costs of environmental remediation, depending on the site, are based primarily upon internal or third-party environmental studies, and estimates as to the number, participation level and financial viability of any other potentially responsible parties, the extent of the contamination and the nature of required remedial actions. The Company adjusts recorded liabilities as further information develops or circumstances change. The Company expects that it will pay the amounts recorded over the periods of remediation for the applicable sites, currently ranging up to 20 years.

As of September 30, 2017, the Company had recorded liabilities of $27 million for “other environmental liabilities” based upon an evaluation of currently available facts to implement the Settlement Agreement and Consent Order with the MPCA, the remedial action agreement with ADEM, and to address trace amounts of perfluorinated compounds in drinking water sources in the City of Oakdale, Minnesota, as well as presence in the soil and groundwater at the Company’s manufacturing facilities in Decatur, Alabama, and Cottage Grove, Minnesota, and at two former disposal sites in Washington County, Minnesota (Oakdale and Woodbury). The Company expects that most of the spending will occur over the next four years. During the first quarter of 2017, the Company collected from its insurer the outstanding receivable of $15 million related to “other environmental liabilities.”

It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods. Developments may occur that could affect the Company’s current assessment, including, but not limited to: (i) changes in the information available regarding the environmental impact of the Company’s operations and products; (ii) changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages; (iii) new and evolving analytical and remediation techniques; (iv) success in allocating liability to other potentially responsible parties; and (v) the financial viability of other potentially responsible parties and third-party indemnitors. For sites included in both “environmental remediation liabilities” and “other environmental liabilities,” at which remediation activity is largely complete and remaining activity relates primarily to operation and maintenance of the remedy, including required post-remediation monitoring, the Company believes the exposure to loss in excess of the amount accrued would not be material to the Company’s consolidated results of operations or financial condition. However, for locations at which remediation activity is largely ongoing, the Company cannot estimate a possible loss or range of possible loss in excess of the associated established accruals for the reasons described above.

~~Table~~The Company has both pre-1986 general and product liability occurrence coverage and post-1985 occurrence reported product liability and other environmental coverage for environmental matters and litigation. As of ~~Contents~~

~~Other Matters~~

~~Department of Labor Investigation~~

~~The U.S. Department of Labor (DOL) notified 3M in April 2015 that it had commenced an investigation of 3M’s pension plan pursuant~~June 30, 2023, the Company’s receivable for insurance recoveries related to the ~~federal Employee Retirement Income Security Act~~environmental matters and litigation was $8 million. Various factors could affect the timing and amount of ~~1974, as amended (ERISA). The DOL has stated its investigation relates~~recovery of this and future expected increases in the receivable, including (i) delays in or avoidance of payment by insurers; (ii) the extent to ~~certain private equity investments, plan expenses, securities lending,~~which insurers may become insolvent in the future, (iii) the outcome of negotiations with insurers, and ~~distributions~~(iv) the scope of ~~plan benefits. In response~~the insurers’ purported defenses and exclusions to ~~certain DOL requests,~~avoid coverage.

Product Liability Litigation

Aearo Technologies sold Dual-Ended Combat Arms – Version 2 earplugs starting in about 2003. 3M ~~produced documents~~acquired Aearo Technologies in 2008 and ~~made employees available for interviews. In December 2016,~~sold these earplugs from 2008 through 2015, when the ~~DOL issued certain subpoenas to~~product was discontinued. 3M and Aearo Technologies believe the Combat Arms Earplugs were effective and safe when used properly, but nevertheless, as discussed below, face litigation from approximately 239,000 claimants. As noted in the Respirator Mask/Asbestos Litigation — Aearo Technologies section above, in July 2022, the Aearo Entities voluntarily initiated chapter 11 proceedings under the U.S. Bankruptcy Code seeking court supervision to establish a trust, funded by the Company, to efficiently and equitably satisfy all claims determined to be entitled to compensation associated with these matters and those described in the earlier section Respirator Mask/Asbestos Litigation — Aearo Technologies. 3M ~~Investment Management Corp. relating to this investigation. 3M has produced additional responsive documents and is cooperating~~entered into an agreement with the ~~DOL~~Aearo Entities to fund this trust and to support the Aearo Entities as they continue to operate during the chapter 11 proceedings. 3M committed $1.0 billion to fund this trust and committed an additional $0.2 billion to fund projected related case expenses. Under the terms of the agreement, the Company would provide additional funding if required by the Aearo Entities. Related to these actions, which represented a change in ~~its investigation.~~strategy for managing the Combat Arms Version 2 earplugs and Aearo respirator mask/asbestos alleged litigation liabilities, 3M ~~anticipates that the DOL will conclude its investigation~~reflected a pre-tax charge of $1.2 billion (within selling, general and administrative expenses), inclusive of fees and net of related existing accruals, in ~~the first half of 2018.~~

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~~Product Liability Litigation~~

One customer obtained an order in the French courts against 3M Purification SAS (a French subsidiary) in October 2011 appointing an expert to determine the amount of commercial loss and property damage allegedly caused by allegedly defective 3M filters used in the customer’s manufacturing process. An Austrian subsidiary of this same customer also filed a claim against 3M Austria GmbH (an Austrian subsidiary) and 3M Purification SAS in the Austrian courts in September 2012 seeking damages for the same issue. The Company reached an agreement in principle to settle those two cases and finalized the settlement during the second quarter of ~~2017. The amounts agreed to~~2022.

As a result of the bankruptcy proceedings, 3M deconsolidated the Aearo Entities in ~~each~~the third quarter of ~~these settlements were~~2022, resulting in a charge that was not material to 3M. Upon the filings in late July 2022 in the U.S Bankruptcy Court for the Southern District of Indiana, all litigation against Aearo Entities that filed chapter 11 cases was automatically stayed.

The Aearo Entities also requested that the Bankruptcy Court confirm that Combat Arms Earplugs litigation against the Company was also stayed or order it enjoined. In August 2022, the Bankruptcy Court denied Aearo’s motion for a preliminary injunction to stay all Combat Arms related litigation against 3M. In September 2022, the bankruptcy judge certified Aearo’s request to appeal the decision directly to the Seventh Circuit Court of Appeals and in October the Seventh Circuit accepted the appeal. In December 2022, Aearo filed its opening brief with the Seventh Circuit appealing the bankruptcy court’s decision. Oral argument took place in April 2023.

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In February 2023, the plaintiffs filed with the Bankruptcy Court a motion to dismiss the bankruptcy filings of the Aearo Entities. In June 2023, the Bankruptcy Court granted the plaintiffs’ motion to dismiss. As a result of this dismissal, the Court’s previous stay on the Aearo Combat Arms and Aearo respirator mask/asbestos litigation was lifted. Also in June 2023, the bankruptcy judge certified a direct appeal of the motion to dismiss decision to the U.S. Court of Appeals for the Seventh Circuit. Aearo has appealed the decision.

As a result of the June 2023 bankruptcy dismissal, 3M reconsolidated the former deconsolidated Aearo Entities, in the second quarter of 2023, resulting in an immaterial income statement impact. A summary of affected material consolidated balance sheet amounts is included at the end of this Combat Arms litigation discussion.

Preceding Combat Arms Earplugs matters:

In December 2018, a military veteran filed an individual lawsuit against 3M in the San Bernardino Superior Court in California alleging that he sustained personal injuries while serving in the military caused by 3M’s Dual-Ended Combat Arms earplugs – Version 2. The plaintiff asserts claims of product liability and fraudulent misrepresentation and concealment. The plaintiff seeks various damages, including medical and related expenses, loss of income, and punitive damages.

In April 2019, the JPML granted motions to transfer and consolidate all cases pending in federal courts to the U.S. District Court for the Northern District of Florida to be managed in an MDL proceeding to centralize pre-trial proceedings. The plaintiffs and 3M filed preliminary summary judgment motions on the government contractor defense. In July 2020, the MDL court granted the plaintiffs’ summary judgment motion and denied the defendants’ summary judgment motion, ruling that plaintiffs’ claims are not barred by the government contractor defense. The court denied the Company’s ~~consolidated~~request to immediately certify the summary judgment ruling for appeal to the U.S. Court of Appeals for the Eleventh Circuit. In December 2020, the court granted the plaintiffs’ motion to consolidate three plaintiffs for the first bellwether trial, which began in March 2021.

In April 2021, 3M received an adverse jury verdict in the first bellwether trial. The jury awarded the three plaintiffs less than $1 million in compensatory damages and $6 million in punitive damages for a total of $7 million. 3M appealed the verdicts, challenging, among other rulings, the MDL court's denial of 3M’s motion to assert the government contractor defense. The next two bellwether trials occurred in May and June of 2021. In May 2021, 3M received a verdict in its favor in the second bellwether trial, in which a jury rejected claims that 3M knowingly sold earplugs with design defects. In June 2021, 3M received an adverse verdict in the third bellwether trial. The jury found 3M liable for strict liability failure to warn, but found 3M not liable for design defect or fraud. The jury apportioned fault 62 percent to 3M and 38 percent to the plaintiff for a total damage award of approximately $1 million. 3M appealed the verdict. In October 2021, 3M received an adverse verdict in the fourth bellwether trial, in which a jury awarded $8 million to the plaintiff. 3M received verdicts in its favor in the fifth and sixth bellwether trials. 3M received an adverse verdict in the seventh and eighth bellwether trials, in which the juries awarded the plaintiffs $13 million and $23 million, respectively. A post-trial order reduced the award in the seventh bellwether trial to $8 million. 3M prevailed in the ninth and tenth bellwether cases but received adverse verdicts in the eleventh bellwether case in which the jury awarded each of the two plaintiffs $15 million in compensatory and $40 million in punitive damages. A post-trial order reduced the compensatory and punitive damages award to one of the plaintiffs from $55 million to $22 million. 3M received adverse verdicts in the twelfth and thirteenth bellwether cases in which the jury awarded one plaintiff with $50 million and another with $8 million in compensatory damages. 3M prevailed in the fourteenth bellwether trial. Plaintiff in the fourteenth bellwether trial has filed a notice of appeal. In December 2022, the plaintiff voluntarily dismissed her Eleventh Circuit appeal of a jury verdict in favor of 3M and Aearo. No other cases that resulted in a defense verdict are on appeal before the Eleventh Circuit at this time. In April 2022, a jury returned a plaintiff’s verdict in the fifteenth bellwether trial, awarding $2.2 million in compensatory damages and declining to award punitive damages. A post-trial order reduced the compensatory damages award to $1.2 million. In May 2022, a jury returned a plaintiff’s verdict in the last scheduled federal bellwether trial. The jury awarded $5 million in compensatory damages and $72 million in punitive damages.

The above referenced 16 bellwether trial results do not include several bellwether cases that plaintiffs' counsel dismissed with prejudice either during discovery or after being set for trial.

The Company's appeals to the Eleventh Circuit from the adverse verdicts of ~~operations or financial condition.~~

the first and third bellwether trials as noted above are proceeding forward. Oral argument on the two appeals occurred in May 2023 and the Company expects a decision later in 2023.

As previously disclosed, following conclusion of the bellwether trial process and unsuccessful settlement discussions, and with another 2,000 cases being prepared for trial while the Company's appeals are still pending, the Aearo Entities and the Company adopted a change in strategy for managing these alleged litigation liabilities that led to the Aearo Entities initiating the chapter 11 proceedings as discussed above.

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As of ~~September~~June 30, ~~2017,~~2023, the Company is a named defendant in lawsuits (including 14 putative class actions) in various state and federal courts that purport to represent approximately 151,000 individual claimants making similar allegations.

An administrative docket of approximately 88,000 unfiled and unverified claims has also been maintained at the MDL court. With respect to the administrative docket, the MDL court in August 2021 provided notice of an intent to issue forthcoming transition orders requiring all claims be moved off the administrative docket to the active docket on a rolling basis over 12 months. The orders will provide that any case not moved to the active docket will be dismissed without prejudice, and the administrative docket will then be closed. The MDL court also ordered the parties to prepare for trial 2,000 cases in four waves of 500 cases over the next 14 months. After the preparation of these cases is completed, the cases will be remanded to the federal district courts where the cases were originally filed. In October 2022, the MDL court ordered that while the successor liability issue described below is on appeal, all wave discovery would be stayed, the transition of cases from the administrative docket to the active docket would stop, and that monthly settlement conferences involving ~~approximately 3,850~~all parties (except Aearo) would occur in the MDL.

The MDL court ordered a three-day mediation in July 2022; and again in September 2022, a two-day mediation session. In January 2023, the MDL judge ordered that the MDL mediation would stop while the bankruptcy court mediation was ongoing.

In May 2023, plaintiffs ~~(compared~~in the MDL filed a motion to ~~approximately 1,260~~lift the stay on 13 cases, which motion is pending, and the MDL court issued an order identifying 31 cases that would be the first cases to be remanded for trial. In August 2022, subsequent to Aearo’s chapter 11 filing, the MDL court issued an order prohibiting 3M from attempting to relitigate issues in the bankruptcy court and from financially supporting any collateral dispute regarding the MDL court’s previous rulings. 3M has appealed the order to the Eleventh Circuit Court of Appeals and made a motion to stay the order pending appeal. In October 2022, the Eleventh Circuit granted 3M’s motion to stay the order pending appeal. The Eleventh Circuit heard oral argument for this appeal in June 2023.

In September 2022, two MDL plaintiffs atfiled a lawsuit with the U.S. District Court for the Northern District of Florida, seeking to permanently enjoin 3M from transferring assets, issuing dividends or completing the announced spin-off of its Health Care business, to allegedly preserve assets for the Combat Arms claimants. The Company has filed a motion to dismiss the lawsuit and an opposition to the injunction motion. In December ~~31, 2016), most~~2022, the court dismissed the lawsuit on jurisdictional grounds. Also in December 2022, the MDL court granted plaintiffs’ motion for summary judgment that successor liability, claiming that 3M is fully and independently liable for injuries allegedly caused by the CAEv2 and certified the order for appeal to the Eleventh Circuit. In January 2023, 3M sought the Eleventh Circuit’s acceptance of ~~which are~~the appeal. Activity in the MDL is stayed pending resolution of this appeal. In June 2023, the MDL court lifted the stay as to the Aearo Entities but the MDL stay pending resolution of the Eleventh Circuit’s acceptance of the appeal of the successor liability decision remains in ~~federal or~~place.

3M is also defending lawsuits brought primarily by non-military plaintiffs in state court in ~~Minnesota,~~Hennepin County, Minnesota. 3M removed these actions to federal court, and the federal court remanded them to state court in ~~which~~March 2020. On appeal, the U.S. Court of Appeals for the Eighth Circuit ruled in October 2021 that the cases brought by non-military plaintiffs ~~claim they underwent~~were properly remanded to state court, whereas the cases brought by military contractor plaintiffs who had received the Combat Arms Earplugs from the military should have remained in federal court. In November 2021, the Eighth Circuit granted 3M's unopposed motion to vacate the remand orders in the remaining appeals of military service member cases. The military service member cases are expected to be remanded to federal court and transferred to the MDL. There are approximately 40 lawsuits involving approximately 1,000 plaintiffs pending in the state court. The state court cases are subject to a bellwether case selection process. The first trial in Hennepin County is scheduled to start in August 2023.

In May 2023, the federal and state MDL courts issued orders providing that mediation would resume, and appointing additional mediators. The parties participated in multiple mediation sessions and discussions in May, June and July 2023. The substance of the ongoing mediation discussions is confidential pursuant to the courts' mediation orders. Attempts to comprehensively resolve with finality all Combat Arms earplugs claims against the Aearo Entities and 3M outside of the bankruptcy proceedings and in a litigation settlement involve significant challenges that could cause the Company to incur substantial and material costs.

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Other than 3M’s funding commitment of approximately $1.0 billion relative to Combat Arms earplugs for its Aearo subsidiaries’ chapter 11 proceedings as described above and associated expenses, no liability has been recorded for the Combat Arms earplugs litigation because the Company believes any such liability is not probable and reasonably estimable and the Company is not able to estimate a possible loss or range of possible loss at this time. The accrued liability for the approximate $1.0 billion commitment is reflected within contingent liability claims and other (within other liabilities) on 3M’s consolidated balance sheet. Additionally, as a result of reconsolidation in the second quarter of 2023 of the former deconsolidated Aearo Entities, the following balances on 3M’s consolidated balance sheet as of December 31, 2022 do not appear on the comparative consolidated balance sheet as of June 30, 2023:

•$0.7 billion asset balance in equity and other investments (within other assets), reflecting 3M's equity investment interest in the entities.

•$0.6 billion net liability for former intercompany amounts due from 3M to the deconsolidated entities. The gross balances were reflected in other liabilities ($0.9 billion) and other assets ($0.3 billion).

As of June 30, 2023, the Company was a named defendant in approximately 5,493 lawsuits in the United States and one Canadian putative class action with a single named plaintiff, alleging that the Bair Hugger™ patient warming system caused a surgical site infections in various joint arthroplasty, cardiovascular, and other ~~surgeries and later developed surgical site infections due to the use of the Bair Hugger™ patient warming system.~~ surgeries.

The ~~complaints~~plaintiffs seek damages and other relief based on theories of strict liability, negligence, breach of express and implied warranties, failure to warn, design and manufacturing defect, fraudulent and/or negligent misrepresentation/concealment, unjust enrichment, and violations of various state consumer fraud, deceptive or unlawful trade practices and/or false advertising acts. ~~One case, from the U.S. District Court for the Western District of Tennessee is a putative nationwide class action.~~

The ~~U.S. Judicial Panel on Multidistrict Litigation (MDL) granted the plaintiffs’ motion to transfer and consolidate~~JPML consolidated all cases pending in federal courts to the U.S. District Court for the District of Minnesota to be managed in an MDL proceeding. In July 2019, the court excluded several of the plaintiffs’ causation experts, and granted summary judgment for 3M in all cases pending at that time in the MDL. Plaintiffs appealed that decision to the U.S. Court of Appeals for the Eighth Circuit. Plaintiffs also appealed a ~~multi-district proceeding during~~2018 jury verdict in favor of 3M in the ~~pre-trial phase~~first bellwether trial in the MDL and appealed the dismissal of another bellwether case. A panel of the appellate court in August 2021 reversed the district court’s exclusion of the plaintiffs’ causation experts and the grant of summary judgment for 3M. The Company sought further appellate en banc review by the full Eighth Circuit court. In November 2021, the Eighth Circuit court denied 3M’s petition for rehearing en banc. In February 2022, the Company filed a petition for a writ of certiorari in the U.S. Supreme Court. In May 2022, the U.S. Supreme Court declined 3M’s request to review the Eighth Circuit court’s decision. The MDL court has not yet issued a new case management order. Separately, in August 2021, the Eighth Circuit court affirmed the 2018 jury verdict in 3M’s favor in the only bellwether trial in the MDL.

In February 2022, the MDL court ordered the parties to engage in any mediation sessions that a court-appointed mediator deems appropriate. Mediation sessions took place in May and August 2022 without success in resolving the litigation. The MDL court has assigned a new mediator to facilitate discussions of the litigation and possible resolution. In April 2023, plaintiffs filed a motion to disqualify the judge and magistrate judge overseeing the MDL. The motion was denied by both the district court judge and magistrate judge. The plaintiffs appealed the denial of the motion to dismiss the magistrate judge to the district court and the parties are awaiting a ruling on the appeal.

In addition to the federal cases, there are eight state court cases relating to the Bair Hugger™ patient warming system. Three are pending in Missouri state court and combine Bair Hugger™ product liability claims with medical malpractice claims. One of the Missouri cases was tried in September and October of 2022; the jury returned a verdict in 3M’s favor on all the claims. The trial court denied plaintiff’s motion for a new trial, and plaintiffs have filed a notice of appeal. Another Missouri case is scheduled for trial in September 2024. There is also one case in Etowah County, Alabama that combines Bair Hugger™ product liability claims with medical malpractice claims. There have been state court cases filed in Pennsylvania and Montana that 3M has removed or will seek to remove to federal court ~~has set~~and seek to have transferred to the MDL. 3M resolved for an immaterial amount the final state court case, which was filed in Hidalgo County, Texas.

As previously disclosed, 3M had been named a ~~trial-ready date~~defendant in 61 cases in Minnesota state court. In January 2018, the ~~second quarter~~Minnesota state court excluded plaintiffs’ experts and granted 3M’s motion for summary judgment on general causation. The Minnesota Court of ~~2018~~Appeals affirmed the state court orders in their entirety and the Minnesota Supreme Court denied plaintiffs’ petition for review and entered the ~~two federal~~final dismissal in 2019, effectively ending the Minnesota state court ~~bellwether~~ cases. The ~~parties are negotiating~~Company is also a ~~trial date for~~defendant in a Ramsey County, Minnesota putative class action filed in June 2023 on behalf of patients who claim to have used the ~~remaining state court bellwether candidate.~~ Bair Hugger™ patient warming system alleging economic damages relating to representations made about the system. The Company has moved to dismiss the Ramsey County matter and anticipates a ruling later in 2023.

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In June 2016, the Company was served with a putative class action filed in the Ontario Superior Court of Justice for all Canadian residents who underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections that the representative plaintiff claims were due to the use of the Bair Hugger™ patient warming system. The representative plaintiff seeks relief (including punitive damages) under Canadian law based on theories similar to those asserted in the MDL. The Bair Hugger™ product line was acquired by 3M as part of the 2010 acquisition of Arizant, Inc., a leading manufacturer of patient warming solutions designed to prevent hypothermia and maintain normal body temperature in surgical settings. No liability has been recorded for this matter because the Company believes that any such liability is not probable and estimable at this time.

In September 2011, 3M Oral Care launched Lava Ultimate CAD/CAM dental restorative material. The product was originally indicated for inlay, onlay, veneer, and crown applications. In June 2015, 3M Oral Care voluntarily removed crown applications from the product’s instructions for use, following reports from dentists of patients’ crowns debonding, requiring additional treatment. The product remains on the market for other applications. 3M communicated with the U.S. Food and Drug Administration, as well as regulators outside the United States. 3M also informed customers and distributors of its action, offered to accept return of unused materials and provide refunds. As of September 30, 2017, there are two lawsuits pending that were brought by dentists and dental practices against 3M. The complaints allege 3M marketed and sold defective Lava Ultimate material used for dental crowns to dentists and, under various theories, seek monetary damages (replacement costs and business reputation loss), punitive damages, disgorgement of profits, injunction from marketing and selling Lava Ultimate for use in dental crowns, statutory penalties, and attorneys’ fees and costs. One lawsuit, pending in the U.S. District Court for the District of Minnesota, is a

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class action that names 39 plaintiffs and seeks certification of a class of dentists in the United States and its territories, and alternatively seeks subclasses in 13 states. The other lawsuit is an individual complaint against 3M in Madison County, Illinois.

For product liability litigation matters described in this section for which a liability has been recorded, the Company ~~believes~~is not able to estimate a possible loss or range of possible loss in excess of the established accruals at this time.

Securities and Shareholder Litigation

In July 2019, Heavy & General Laborers’ Locals 472 & 172 Welfare Fund filed a putative securities class action against 3M Company, its former Chairman and CEO, current Chairman and CEO, and former CFO in the U.S. District Court for the District of New Jersey. In August 2019, an individual plaintiff filed a similar putative securities class action in the same district. Plaintiffs allege that defendants made false and misleading statements regarding 3M's exposure to liability associated with PFAS and bring claims for damages under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 against all defendants, and under Section 20(a) of the Securities and Exchange Act of 1934 against the individual defendants. In October 2019, the court consolidated the securities class actions and appointed a group of lead plaintiffs. In January 2020, the defendants filed a motion to transfer venue to the U.S. District Court for the District of Minnesota. In August 2020, the court denied the motion to transfer venue, and in September 2020, the defendants filed a petition for writ of mandamus to the U.S. Court of Appeals for the Third Circuit. In November 2020, the federal Court of Appeals granted 3M’s petition for a writ of mandamus and directed the New Jersey federal court to transfer the action to the Minnesota federal court. The defendants filed a motion to dismiss the action in January 2021, and in September 2021, the Minnesota federal court granted 3M’s motion to dismiss the securities class action, which judgment is now final.

In October 2019, a stockholder derivative lawsuit was filed in the U.S. District Court for the District of New Jersey against 3M and several of its current and former executives and directors. In November and December 2019, two additional derivative lawsuits were filed in a Minnesota state court. The derivative lawsuits rely on similar factual allegations as the putative securities class action discussed above. The Minnesota state court cases were consolidated and stayed pending a decision on the motion to dismiss in the securities class action, and the Minnesota state plaintiffs have agreed to further stay their action pending a decision on the motion to dismiss the federal derivative lawsuit discussed below. In October 2020, the derivative action pending in the U.S. District Court for the District of New Jersey was dismissed, without prejudice, for failure to serve the complaint within the required time period. In May 2023, the Minnesota court dismissed the Minnesota state derivative action.

In August 2020, a stockholder who had previously submitted a books and records demand filed an additional follow-on derivative lawsuit in the U.S. District Court for the District of New Jersey against 3M and several of its current and former executives and directors. This derivative lawsuit, having been transferred to Minnesota federal court, also relies on similar factual allegations as the putative securities class action discussed above. In February 2021, an additional stockholder derivative lawsuit was filed in the District of Minnesota, making similar factual allegations as the putative securities class action discussed above. The Minnesota federal court consolidated these federal derivative suits and stayed them pending and through any appeal of the securities class action dismissal. The Minnesota federal plaintiffs then filed an amended complaint in February 2022. The defendants moved to dismiss the consolidated federal derivative action in May 2022, and the court dismissed the case in March 2023, which judgment is now final.

Federal False Claims Act / Qui Tam Litigation

In October 2019, 3M acquired Acelity, Inc. and its KCI subsidiaries, including Kinetic Concepts, Inc. and KCI USA, Inc. As previously disclosed in the SEC filings by the KCI entities, in 2009, Kinetic Concepts, Inc. received a subpoena from the U.S. Department of Health and Human Services Office of Inspector General. In 2011, following the completion of the government’s review and its decision declining to intervene in two qui tam actions described further below, the qui tam relator-plaintiffs’ pleadings were unsealed.

The government inquiry followed two qui tam actions filed in 2008 by two former employees against Kinetic Concepts, Inc. and KCI USA, Inc. (collectively, the “KCI defendants”) under seal in the U.S. District Court for the Central District of California. As 3M has previously disclosed, one qui tam action (the Godecke case) was dismissed in January 2022. In the remaining action (the Hartpence case), the complaint contains allegations that the KCI Defendants violated the federal False Claims Act by submitting false or fraudulent claims to federal healthcare programs by billing for V.A.C.® Therapy in a manner that was not consistent with the Local Coverage Determinations issued by the Durable Medical Equipment Medicare Administrative Contractors and seeks monetary damages.

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In June 2019, the district court entered summary judgment in the KCI Defendants’ favor on all of the relator-plaintiff’s claims. The relator-plaintiff then filed an appeal in the U.S. Court of Appeals for the Ninth Circuit. Oral argument in the Hartpence case was held in July 2020. The appellate court issued an opinion in August 2022 reversing the decision of the district court and remanding the case for further proceedings. The district court held a status conference in January 2023 where no case deadlines were set; the litigation remains in a pre-trial stage. The KCI Defendants filed a renewed motion for summary judgment in March 2023. Briefing on the motion for summary judgment is complete, but the district court granted a joint motion to vacate the hearing date to allow the parties to discuss a potential resolution of the case. The parties must provide a joint status report by the end of July 2023.

For the KCI-related matters described in this section for which a liability has been recorded, the amount recorded is not material to the Company’s consolidated results of operations or financial condition. ~~In addition, the~~The Company is not able to estimate a possible loss or range of possible loss in excess of the ~~established accruals~~recorded liability at this time.

~~NOTE 13. Stock-Based Compensation~~

Compliance Matter

The ~~3M 2016 Long-Term Incentive Plan (LTIP), as discussed~~Company, through its internal processes, discovered certain travel activities and related funding and record keeping issues raising concerns, arising from marketing efforts by certain business groups based in ~~3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K), provides for~~China. The Company initiated an internal investigation to determine whether the ~~issuance~~expenditures may have violated the U.S. Foreign Corrupt Practices Act (FCPA) or ~~delivery of up~~other potentially applicable anti-corruption laws. The Company has retained outside counsel and a forensic accounting firm to ~~123,965,000 shares of 3M common stock pursuant to awards granted under~~assist with the plan. Awards may be issued in the form of incentive stock options, nonqualified stock options, progressive stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards, and performance units and performance shares.~~The remaining total shares available for grant under the LTIP Program are 30,232,906 as of September 30, 2017.~~

The Company’s annual stock option and restricted stock unit grant is made in February to provide a strong and immediate link between the performance of individuals during the preceding year and the size of their annual stock compensation grants. The grant to eligible employees uses the closing stock price on the grant date. Accounting rules require recognition of expense under a non-substantive vesting period approach, requiring the full recognition of compensation expense by the date an employee is eligible to retire if awards become fully vested upon retirement. Under the LTIP, 3M employees are considered eligible to retire at age 55 and after having completed ten years of service. This retiree-eligible population represents 35 percent of the 2017 annual grant stock-based compensation award expense dollars; therefore, higher stock-based compensation expense is recognized in the first quarter of each fiscal year.

investigation. In ~~addition to the annual grants,~~July 2019, the Company ~~makes other minor grants~~voluntarily disclosed this investigation to both the Department of ~~stock options, restricted stock units~~Justice and ~~other stock-based grants.~~Securities and Exchange Commission and is cooperating with both agencies. The Company ~~issues cash settled restricted stock units and stock appreciation rights~~is in ~~certain countries. These grants do not result in the issuance of common stock and are considered immaterial by the Company.~~

Amounts recognized in the financial statements with respect to stock-based compensation programs, which include stock options, restricted stock, restricted stock units, performance shares and the General Employees’ Stock Purchase Plan (GESPP), are provided in the following table. Capitalized stock-based compensation amounts were not material for the three and nine months ended September 30, 2017 and 2016.

~~Stock-Based Compensation Expense~~

Three months ended

Nine months ended

September 30,

September 30,

(Millions)

2017

2016

2017

2016

Cost of sales

$
9

$
8

$
41

$
39

Selling, general and administrative expenses

45

36

186

166

Research, development and related expenses

6

7

39

39

Stock-based compensation expenses

$
60

$
51

$
266

$
244

Income tax benefits

$
(35)

$
(49)

$
(257)

$
(248)

Stock-based compensation expenses (benefits), net of tax

$
25

$
2

$
9

$
(4)

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~~Stock Option Program~~

~~The following table summarizes stock option activity during the nine months ended September 30, 2017:~~

Weighted

Average




Weighted

Remaining

Aggregate

Number of

Average

Contractual

Intrinsic Value

Options

Exercise Price

Life (months)

(millions)

Under option —

January 1

36,196,232

$
112.07

Granted:

Annual

5,409,628

175.93

Exercised

(5,203,405)

90.05

Canceled

(137,827)

161.38

September 30

36,264,628

$
124.57

72

$
3,095

Options exercisable

September 30

25,532,812

$
107.67

59

$
2,610

Stock options vest over a period from one year to three years with the expiration date at 10 years from date of grant. As of September 30, 2017, there was $85 million of compensation expense that has yet to be recognizeddiscussions related to non-vested stock option based awards. This expense is expected to be recognized over the remaining weighted-average vesting period of 22 months. The total intrinsic values of stock options exercised were $526 million and $573 million during the nine months ended September 30, 2017 and 2016, respectively. Cash received from options exercised was $468 million and $630 million for the nine months ended September 30, 2017 and 2016, respectively. The Company’s actual tax benefits realized for the tax deductions related to the exercise of employee stock options were $179 million and $212 million for the nine months ended September 30, 2017 and 2016, respectively.

~~For the primary 2017 annual stock option grant, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model and the assumptions that follow.~~

~~Stock Option Assumptions~~

Annual

2017

Exercise price

$
175.76

Risk-free interest rate

2.1
%
Dividend yield

2.5
%
Expected volatility

17.3
%
Expected life (months)

78

Black-Scholes fair value

$
23.51

Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2017 annual grant date, the Company estimated the expected volatility based upon the average of the most recent one year volatility, the median of the term of the expected life rolling volatility, the median of the most recent term of the expected life volatility of 3M stock, and the implied volatility on the grant date. The expected life assumption is based on the weighted average of historical grants.

potential resolution.

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~~Restricted Stock and Restricted Stock Units~~

~~The following table summarizes restricted stock and restricted stock unit activity during the nine months ended September 30, 2017:~~

Weighted

Average

Number of

Grant Date

Awards

Fair Value

Nonvested balance —

As of January 1

2,185,046

$
145.64

Granted

Annual

604,256

176.10

Other

2,986

179.64

Vested

(761,484)

126.78

Forfeited

(39,352)

157.63

As of September 30

1,991,452

$
161.90

As of September 30, 2017, there was $93 million of compensation expense that has yet to be recognized related to non-vested restricted stock units and restricted stock. This expense is expected to be recognized over the remaining weighted-average vesting period of 22 months. The total fair value of restricted stock units and restricted stock that vested during the nine months ended September 30, 2017 and 2016 was $135 million and $145 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the vesting of restricted stock units and restricted stock was $44 million and $54 million for the nine months ended September 30, 2017 and 2016, respectively.

Restricted stock units granted generally vest three years following the grant date assuming continued employment. Dividend equivalents equal to the dividends payable on the same number of shares of 3M common stock accrue on these restricted stock units during the vesting period, although no dividend equivalents are paid on any of these restricted stock units that are forfeited prior to the vesting date. Dividends are paid out in cash at the vest date on restricted stock units. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average restricted stock unit shares outstanding are included in the computation of diluted earnings per share.

~~Performance Shares~~

Instead of restricted stock units, the Company makes annual grants of performance shares to members of its executive management. The 2017 performance criteria for these performance shares (organic volume growth, return on invested capital, free cash flow conversion, and earning per share growth) were selected because the Company believes that they are important drivers of long-term stockholder value. The number of shares of 3M common stock that could actually be delivered at the end of the three-year performance period may be anywhere from 0% to 200% of each performance share granted, depending on the performance of the Company during such performance period. Non-substantive vesting requires that expense for the performance shares be recognized over one or three years depending on when each individual became a 3M executive. The 2017 performance share grant accrues dividends, therefore the grant date fair value is equal to the closing stock price on the date of grant. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average performance shares whose performance period is complete are included in computation of diluted earnings per share.

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~~The following table summarizes performance share activity during the nine months ended September 30, 2017:~~

Weighted

Average

Number of

Grant Date

Awards

Fair Value

Undistributed balance —

As of January 1

656,278

$
142.98

Granted

198,910

190.84

Distributed

(313,942)

124.88

Performance change

107,034

173.58

Forfeited

(10,769)

169.38

As of September 30

637,511

$
171.52

As of September 30, 2017, there was $36 million of compensation expense that has yet to be recognized related to performance shares. This expense is expected to be recognized over the remaining weighted-average earnings period of 10 months. The total fair values of performance shares that were distributed were $55 million and $54 million for the nine months ended September 30, 2017 and 2016, respectively. The Company’s actual tax benefits realized for the tax deductions related to the distribution of performance shares were $15 million for both the nine months ended September 30, 2017 and 2016.

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NOTE ~~14.~~15. Business Segments

3M’s businesses are organized, managed and internally grouped into segments based on differences in markets, products, technologies and services. 3M manages its operations in ~~five~~four business segments: ~~Industrial;~~ Safety and ~~Graphics;~~Industrial; Transportation and Electronics; Health Care; ~~Electronics and Energy;~~ and Consumer. 3M’s ~~five~~four business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. ~~Transactions among reportable segments are recorded at cost.~~In July 2022, 3M announced its intention to spin off the Health Care business as a separate public company (see Note 3 for additional information). 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income information shown. ~~The difference between~~

3M discloses business segment operating income (loss) as its measure of segment profit/loss, reconciled to both total 3M operating income (loss) and ~~pre-tax~~ income ~~relates to interest~~before taxes. Business segment operating income (loss) excludes certain expenses and ~~interest expense, which~~income that are not allocated to business ~~segments.~~

segments (as described below in “Corporate and Unallocated”).

Effective in the first quarter of ~~2017,~~2023, the measure of segment operating performance and segment composition used by 3M’s chief operating decision maker (CODM) changed and, as ~~part~~a result, 3M’s disclosed measure of ~~3M’s continuing effort~~segment profit/loss (business segment operating income (loss)) was updated. The change to ~~improve~~business segment operating income (loss) aligns with the ~~alignment of its businesses around markets~~update to how the CODM assesses performance and ~~customers~~allocates resources for the ~~Company made~~Company’s business segments. The changes included the ~~following changes:~~

~~Integrated the former Renewable Energy Division into existing divisions;~~

~~Combined two divisions to form the Automotive and Aerospace Solutions Division; and~~

~~Consolidated U.S. customer account activity - impacting dual credit reporting~~

~~Integration of former Renewable Energy Division~~

The (i) solar and wind and (ii) energy product lines (along with certain technology previously included in Corporate and Unallocated) of the former Renewable Energy Division (RED) were integrated into the existing Electrical Markets Division and Electronics Materials Solutions Division, respectively, within the Electronics and Energy business segment. In addition, the former RED’s window film product lines were moved into the Commercial Solutions Division within the Safety and Graphics business segment. This change resulted in a decrease in previously reported net sales and operating income for total year 2016 of $203 million and $38 million, respectively, in the Electronics and Energy segment. These decreases were offset by a $207 million and $29 million increase in previously reported total year 2016 net sales and operating income, respectively, in the Safety and Graphics business segment and a $4 million decrease and $9 million increase in previously reported net sales and operating income, respectively, in Corporate and Unallocated.

~~Creation of Automotive and Aerospace Solutions Division~~

The former Automotive Division and Aerospace and Commercial Transportation Division (both within the Industrial business segment) were combined to create the Automotive and Aerospace Solutions Division. Because this realignment was within the Industrial business segment, it had no impact on business segment reporting.

~~Consolidation of U.S. customer account activity - impacting dual credit reporting~~

The Company consolidated its customer account activity in the U.S. into more centralized sales districts to better serve customers. As discussed further below, 3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. This dual credit is based on which business segment provides customer account activity (“sales district”) with respect to a particular product sold in the U.S. Previously, a customer in the U.S. may have been aligned to several sales districts associated with multiple divisions or segments based on the individual products the customer purchased across 3M’s portfolio. The alignment of U.S. customer accounts to fewer, more focused sales districts therefore changed the attribution of dual credit across 3M’s business segments. As a result, previously reported aggregate business segment net sales and operating income for total year 2016 increased $163 million and $36 million, respectively, offset by similar increases in the elimination of dual credit net sales and operating income amounts.

items described below. The financial information presented herein reflects the impact of ~~the preceding~~these business segment reporting changes for all periods presented.

Reflecting gains/losses from sale of property, plant and equipment (PPE) and other assets within Corporate and Unallocated Change

3M updated its business segment operating performance measure to reflect all gains/lossesfrom sales of PPE and other assets within Corporate and Unallocated. Previously, certain of these gains/losses were included in 3M’s business segments’ operating performance.

Movement of certain businesses between segments

The businesses associated with two groups of products (each with approximately $25 million in sales) were realigned with one moving from the Consumer business segment to the Health Care business segment and the other moving from the Health Care business segment to the Consumer business segment.

Also effective in the first quarter of 2023, the Consumer business segment re-aligned from four divisions to the following three divisions: Home, Health and Auto Care; Construction and Home Improvement Markets; and Stationery and Office.

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Business Segment Information


	Three months ended				Nine months ended
	September 30,				September 30,
(Millions)	2017		2016		2017		2016		(Millions)	Three months ended June 30,				Six months ended June 30,
Net Sales									Net Sales	2023		2022		2023		2022
Industrial	$	2,764	$	2,603	$	8,193	$	7,856
Safety and Graphics		1,529		1,500		4,603		4,538
Safety and Industrial									Safety and Industrial	$	2,765	$	2,924	$	5,544	$	5,975
Transportation and Electronics									Transportation and Electronics	2,191		2,268		4,241		4,608
Health Care		1,476		1,371		4,339		4,176	Health Care	2,075		2,179		4,085		4,307
Electronics and Energy		1,414		1,250		3,838		3,468
Consumer		1,236		1,210		3,415		3,390	Consumer	1,293		1,330		2,485		2,639
Corporate and Unallocated		1		2		5		5	Corporate and Unallocated	1		1		1		2
Elimination of Dual Credit		(248)		(227)		(726)		(653)
Total Company	$	8,172	$	7,709	$	23,667	$	22,780	Total Company	$	8,325	$	8,702	$	16,356	$	17,531

Operating Income
Industrial	$	614	$	595	$	1,762	$	1,837
Safety and Graphics		410		372		1,661		1,152
										Three months ended June 30,				Six months ended June 30,
Operating Performance									Operating Performance	2023		2022		2023		2022
Safety and Industrial									Safety and Industrial	$	534	$	(707)	$	1,135	$	(80)
Transportation and Electronics									Transportation and Electronics	410		475		704		939
Health Care		471		431		1,317		1,350	Health Care	411		492		771		937
Electronics and Energy		394		304		920		716
Consumer		307		317		724		836	Consumer	235		248		414		467
Total business segment operating income (loss)									Total business segment operating income (loss)	1,590		508		3,024		2,263
Corporate and Unallocated		(100)		(65)		(225)		(189)	Corporate and Unallocated
Elimination of Dual Credit		(55)		(50)		(160)		(144)
Total Company	$	2,041	$	1,904	$	5,999	$	5,558
Corporate special items:									Corporate special items:
Net costs for significant litigation									Net costs for significant litigation	(10,357)		(379)		(10,439)		(566)
Divestiture costs									Divestiture costs	(125)		—		(227)		—

Russia exit (charges) benefits									Russia exit (charges) benefits	18		—		18		—
Total corporate special items									Total corporate special items	(10,464)		(379)		(10,648)		(566)
Other corporate expense - net									Other corporate expense - net	(84)		(19)		(93)		54
Total Corporate and Unallocated									Total Corporate and Unallocated	(10,548)		(398)		(10,741)		(512)
Total Company operating income (loss)									Total Company operating income (loss)	(8,958)		110		(7,717)		1,751

Other expense/(income), net									Other expense/(income), net	65		50		117		88
Income (loss) before income taxes									Income (loss) before income taxes	$	(9,023)	$	60	$	(7,834)	$	1,663

Corporate and ~~unallocated~~Unallocated

Corporate and Unallocated operating income (loss) includes ~~a variety~~“corporate special items” and “other corporate expense-net”. Corporate special items include net costs for significant litigation impacting operating income (loss) associated with PFAS-related other environmental and Combat Arms Earplugs matters. In addition, during the voluntary chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023—see Note 14), costs associated with the Aearo portion of ~~miscellaneous~~respirator mask/asbestos matters were also included in corporate special items. Prior to the bankruptcy, costs associated with Combat Arms Earplugs matters were not included in the Corporate net costs for significant litigation special item, instead being reflected in the Safety and Industrial business segment. Corporate special items also include divestiture costs, gain/loss on business divestitures (see Note 3), divestiture-related restructuring costs (see Note 5), and Russia exit costs/ benefits (see Note 13). Divestiture costs include costs related to separating and divesting substantially an entire business segment of 3M following public announcement of its intended divestiture. Other corporate expense-net includes items such as net costs related to limited unallocated corporate ~~investment gains~~staff and centrally managed material resource centers of expertise costs, corporate philanthropic activity, gains/losses ~~certain derivative gains~~from sales of PPE and ~~losses, certain insurance-related gains~~other assets, and ~~losses, certain litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed~~other net costs ~~(e.g. pension, stock-based compensation)~~ that ~~the Company~~3M may choose not to allocate directly to its business segments. Other corporate expense-net also includes costs and income from transition supply, manufacturing, and service arrangements with Neogen Corporation following the 2022 split-off of 3M's Food Safety business. Items classified as revenue from this activity are included in Corporate and Unallocated net sales. Because ~~this category~~Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. Management evaluates each of its five business segments based on net sales and operating income performance, including dual credit U.S. reporting to further incentivize U.S. sales growth. As a result, 3M reflects additional (“dual”) credit to another business segment when the customer account activity (“sales district”) with respect to the particular product sold to the external customer in the U.S. is provided by a different business segment. This additional dual credit is largely reflected at the division level. For example, certain respirators are primarily sold by the Personal Safety Division within the Safety and Graphics business segment; however, a sales district within the Industrial business segment provides the contact for sales of the product to particular customers in the U.S. market. In this example, the non-primary selling segment (Industrial) would also receive credit for the associated net sales initiated though its sales district and the related approximate operating income. The assigned operating income related to dual credit activity may differ from operating income that would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is reflected as a reconciling item entitled “Elimination of Dual Credit,” such that sales and operating income for the U.S. in total are unchanged.

~~Certain sales and operating income results for electronic bonding product lines are equally divided between the Electronics and Energy business segment and the Industrial business segment.~~

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM*

~~To the Shareholders and Board of Directors of 3M Company:~~

~~We have reviewed the accompanying consolidated balance sheetof 3M Company and its subsidiaries~~as of September 30, 2017, and the related consolidated statements of income and comprehensive income for the three-month and nine-month periods ended September 30, 2017 and 2016 and the consolidated statements of cash flows for the nine-month periods ended September 30, 2017 and 2016. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

~~We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidatedbalance sheet as of December 31, 2016, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows~~for the year then ended (not presented herein), and in our report dated February 9, 2017, except with respect to our opinion on the consolidated financial statements insofar as it relates to the business segment reporting changes discussed in Notes 3 and 16 as to which the date is May 4, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2016, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

~~/s/ PricewaterhouseCoopers LLP~~

~~PricewaterhouseCoopers LLP~~

~~Minneapolis, Minnesota~~

~~October 31, 2017~~

*Pursuant to Rule 436(c) of the Securities Act of 1933 (“Act”) this should not be considered a “report” within the meaning of Sections 7 and 11 of the Act and the independent registered public accounting firm liability under Section 11 does not extend to it.

~~Table of Contents~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of 3M’s financial statements with a narrative from the perspective of management. 3M’s MD&A is presented in the following sections:

~~Overview~~

~~Results of Operations~~

•Overview

~~Performance by Business Segment~~

•Results of Operations

~~Financial Condition and Liquidity~~

•Performance by Business Segment

~~Cautionary Note Concerning Factors That May Affect Future Results~~

•Financial Condition and Liquidity

•Cautionary Note Concerning Factors That May Affect Future Results

The term "N/M" used herein references "not meaningful" for certain percent changes.

Forward-looking statements in Part I, Item 2 may involve risks and uncertainties that could cause results to differ materially from those projected (refer to the section entitled ~~“Cautionary~~Cautionary Note Concerning Factors That May Affect Future ~~Results”~~Results in Part I, Item 2 and the risk factors provided in Part II, Item 1A for discussion of these risks and uncertainties).

OVERVIEW

3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products and services.

As described in 3M’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2017 and June 30, 2017, and also in 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K), effective Effective in the first quarter of ~~2017,~~2023, 3M made the ~~Company changed its~~following changes:

•Changes in measure of segment operating performance and segment composition used by 3M’s chief operating decision maker—impacting 3M’s disclosed measure of segment profit/loss (business segment operating income (loss))—and realignment of 3M's Consumer business segment reporting in its continued effort to improve the alignment of businesses around markets and customers. These changes included the integration of the former Renewable Energy Division into existing divisions, the combination of twofrom four divisions to ~~form~~three divisions. See additional information in Note 15. 3M's disclosed disaggregated revenue was also updated as a result of these changes. See additional information in Note 2.

•Changes to non-GAAP measures - certain amounts adjusted for special items. Refer to the ~~Automotive and Aerospace Solutions Division, and consolidation of U.S. customer account activity, impacting dual credit reporting. Business segment information presented~~Certain amounts adjusted for special items - (non-GAAP measures) section below for additional information.

Information provided herein reflects the impact of these changes for all periods presented. Refer to Note 14 for additional detail. This quarterly report on Form 10-Q should be read in conjunction with the Company’s consolidated statements and notes included in its Current Report on Form 8-K dated May 4, 2017.

3M manages its operations in ~~five~~four operating business segments: ~~Industrial;~~ Safety and ~~Graphics;~~Industrial; Transportation and Electronics; Health Care; ~~Electronics and Energy;~~ and Consumer. From a geographic perspective, any references to EMEA refer to Europe, Middle East and Africa on a combined basis. ~~Any references~~References are made to ~~“Membrana” refer~~organic sales change (which include both organic volume impacts and selling price impacts), which is defined as the change in net sales, absent the separate impacts on sales from foreign currency translation and acquisitions, net of divestitures. Acquisition and divestiture sales change impacts, if any, are measured separately for the first twelve months post-transaction. 3M believes this information is useful to investors and management in understanding ongoing operations and in analysis of ongoing operating trends.

3M has been and may continue to be impacted by the global pandemic and related effects associated with the coronavirus (COVID-19). The Overview section of Part II, Item 7 of the Company’s 2022 Annual Report on Form 10-K provides a description of how COVID-19 has impacted or may impact 3M. In addition within this Form 10-Q for the quarterly period ended June 30, 2023, risk factors with respect to COVID-19 can be found in Item 1A “Risk Factors” and certain COVID-19 impacts are referenced in various discussions within this Form 10-Q, including in this Item 2.

3M is also impacted by certain special items such as costs for significant litigation and the sales and income associated with manufactured PFAS products that 3M plans to exit by the end of 2025. During the first six months of 2023, 3M's costs for significant litigation (see Certain amounts adjusted for special items - (non-GAAP measures) section below) totaled approximately $10.5 billion pre-tax and included, among other things, a $10.3 billion pre-tax charge related to the ~~former Separations Media business acquired by 3M from Polypore~~proposed settlement agreement announced in ~~2015.~~

the second quarter of 2023 with public water systems in the United States regarding PFAS. See Certain amounts adjusted for special items - (non-GAAP measures) section below for additional discussion of these and other special items, including references therein to where further information is provided.

Additional information regarding certain items impacting pre-2023 periods that may also be relevant in 2023 can be found in the Overview section of Part II, Item 7 as well as in further sections of 3M’s 2022 Annual Report on Form 10-K.

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Earnings (loss) per share attributable to 3M common shareholders – diluted:

The following table provides the ~~increase (decrease)~~increases (decreases) in diluted earnings (loss) per ~~share~~share.



Earnings (loss) per diluted share	Three months ended June 30, 2023		Six months ended June 30, 2023
Same period last year	$	0.14	$	2.40
Net costs for significant litigation	2.34		2.73




Manufactured PFAS products	(0.03)		(0.05)
Total special items	2.31		2.68
Same period last year, excluding special items	$	2.45	$	5.08
Increase/(decrease) due to:
Total organic growth/productivity and other	0.06		(0.32)
Restructuring	(0.31)		(0.36)
Raw material impact	(0.04)		(0.18)
Foreign exchange impacts	(0.02)		(0.12)
Acquisitions/divestitures	(0.03)		(0.05)
Other expense (income), net	(0.03)		(0.05)
Income tax rate	0.02		—
Shares of common stock outstanding	0.07		0.14
Current period, excluding special items	2.17		4.14
Net costs for significant litigation	(14.43)		(14.51)
Divestiture costs	(0.19)		(0.34)


Russia exit (charges) benefits	0.04		0.04
Manufactured PFAS products	0.06		0.07
Total special items	(14.52)		(14.74)
Current period	$	(12.35)	$	(10.60)

The Company refers to various "adjusted" amounts or measures on an “adjusted basis.” These exclude special items. These non-GAAP measures are further described and reconciled to the most directly comparable GAAP financial measures in the Certain amounts adjusted for special items - (non-GAAP measures) section below.

A discussion related to the ~~three months and nine months ended September 30, 2017 compared to 2016.~~

Three months ended

Nine months ended

(Earnings per diluted share)

September 30, 2017

September 30, 2017

Same period last year

$
2.15

$
6.28

Increase/(decrease) in earnings per share - diluted, due to:

Organic growth/productivity

0.23

0.53

Foreign exchange impacts

(0.03)

(0.12)

Income tax rate

0.01

0.21

Shares of common stock outstanding/net interest

0.02

0.08

Divestiture gains

—

0.56

Operating loss/(income) from divested businesses

0.01

—

Incremental strategic investments

(0.06)

(0.46)

Current period

$
2.33

$
7.08

~~Earnings~~components of year-on-year changes in earnings (loss) per diluted share ~~increased 18 cents (or 8.4 percent)~~follows:

Total organic growth/productivity and ~~80 cents (or 12.7 percent)~~other:

•For the second quarter of 2023, the following components impacted operating margins and earnings (loss) per diluted share year-on-year:

◦Declines in disposable respirator demand year-on-year negatively impacted earnings (loss) per share by $0.09.

◦Remaining organic growth/productivity and other impacts resulted in a net year-on-year increase of $0.15 per share which was impacted by the following:

•Benefits from ongoing productivity actions, restructuring, strong spending discipline and higher selling prices

•Lower sales volumes (particularly electronics/consumer retail), inflation impacts and investments in growth, productivity, and sustainability

•For the first six months of 2023, the following components impacted operating margins and earnings (loss) per diluted share year-on-year:

◦Declines in disposable respirator demand year-on-year and the 2022 exit of operations in Russia negatively impacted earnings (loss) per share by $0.30.

◦Remaining organic growth/productivity and other impacts resulted in a net year-on-year decline of $0.02 per share which was impacted by the following:

▪Lower sales volumes (particularly electronics/consumer retail); investments in growth, productivity, and sustainability; manufacturing/supply chain headwinds; inflation impacts; China (COVID-related); and Europe geopolitical impacts

▪Benefits from spending discipline, restructuring, higher selling prices and ongoing productivity actions

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Restructuring:

•3M recorded restructuring pre-tax charges of $212 million and $264 million in the ~~third~~second quarter and first ~~nine~~six months of ~~2017,~~2023, respectively, ~~when~~ compared to no charges and $18 million in the same periods last ~~year. Organic growth/productivity includes~~

year, respectively, (refer to Note 5 for additional discussion).

Raw material impact:

~~Table~~•3M continued to experience headwinds year-on-year from the carryover impact of ~~Contents~~

~~benefits from~~ higher ~~organic local-currency sales,~~ raw material, logistics and energy cost decreases, and business transformation, which is having a positive impact on 3M’s productivity efforts. These benefits were partially offset by higher defined benefit pension expenses. During both the third quarter and first nine months of 2017, organic growth was the primary driver for the year-on-year benefit.

inflation.

Foreign exchange impacts

•Foreign currency impacts (net of hedging) decreased operating income (loss) by approximately $39 million (or a decrease of pre-tax earnings (loss) by approximately ~~$29~~$23 million) year-on-year for the second quarter of 2023 and decreased operating income (loss) by approximately $115 million (or a decrease of pre-tax earnings (loss) by approximately $99 million) year-on-year for the first six months of 2023, primarily resulting from the strength of the U.S. dollar. These estimates include: (a) the effects of year-on-year changes in exchange rates on translating current period functional currency profits into U.S. dollars and ~~$108 million~~on current period non-functional currency denominated purchases or transfers of goods between 3M operations, and (b) year-on-year changes in transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks.

Acquisitions/divestitures:

•Acquisition and divestiture impacts are measured separately for the first 12 months post-transaction.

•Divestiture impact includes lost income from divested businesses and remaining stranded costs (net of transition arrangement income). In the third quarter ~~and first nine months~~ of ~~2017, respectively, excluding~~2022, 3M completed the ~~impact~~split-off of ~~foreign currency changes on tax rates. This is equivalent to a year-on-year decrease of 3 cents and 12 cents per diluted share for~~the Food Safety business (discussed in Note 3).

•In the third quarter of 2022, 3M deconsolidated the Aearo Entities and, in the second quarter of 2023, reconsolidated those entities (discussed in Note 14). For each of the 12-months post-deconsolidation and post-reconsolidation, impacts are each reflected separately as divestiture and acquisition, respectively.

Other expense (income), net:

•Lower income related to non-service cost components of pension and postretirement expense increased expense year-on-year for the second quarter and first ~~nine~~six months of ~~2017, respectively.~~

2023.

•Interest expense (net of interest income) decreased for the second quarter and first six months of 2023 compared to the same period year-on-year.

Income tax rate:

•Certain items above reflect specific income tax rates associated therewith. Overall, the effective tax rate for the second quarter of 2023 was 24.2 percent on a pre-tax loss, compared to (38.3) percent on pre-tax income in the prior year. The primary factor that impacted the comparison of these rates was the second quarter 2022 charge related to steps toward resolving Combat Arms Earplugs litigation (see Note 14). The effective ~~income~~ tax rate for the first six months of 2023 was ~~28.3~~25.2 percent, compared to 16.8 percent in the prior year. The primary factor that impacted the comparison of the six-month rates was the second quarter 2023 charge related to the proposed settlement agreement with public water systems in the United States regarding PFAS (discussed in Note 14).

•On an adjusted basis (as discussed below), the effective tax rate for the second quarter and first six months of 2023 was 19.1 percent and 18.5 percent, respectively, a decrease of 0.7 percentage points and a decrease of 0.1 percent, respectively, compared to the same period year-on-year.

Shares of common stock outstanding:

•Lower shares outstanding increased earnings (loss) per share year-on-year for the second quarter and first six months of 2023.

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Certain amounts adjusted for special items - (non-GAAP measures):

In addition to reporting financial results in accordance with U.S. GAAP, 3M also provides certain non-GAAP measures. These measures are not in accordance with, nor are they a substitute for GAAP measures, and may not be comparable to similarly titled measures used by other companies.

Certain measures adjust for the impacts of special items. Special items for the periods presented include the items described below. Because 3M provides certain information with respect to business segments, it is noteworthy that special items impacting operating income (loss) are reflected in Corporate and Unallocated, except as described below with respect to net costs for significant litigation and manufactured PFAS products items.

In 2023, 3M changed certain of its non-GAAP measures by adjusting for the results of manufactured PFAS products in arriving at results, adjusted for special items. In the fourth quarter of 2022, 3M recorded a charge for PFAS manufacturing exit costs and included it as an adjustment in arriving at results, adjusted for special items. The 2023 non-GAAP measure change involved expanding the extent of adjustment to include the sales and estimates of income (including exit costs) and associated activity regarding manufactured PFAS products that 3M plans to exit by the end of 2025. The information herein reflects the impacts of these changes for all periods presented.

This document contains measures for which 3M provides the reported GAAP measure and a non-GAAP measure adjusted for special items. These measures and reasons 3M believes they are useful to investors (and, as applicable, used by 3M) include:


GAAP amounts for which a measure adjusted for special items is also provided:						Reasons 3M believes the measure is useful
•Net sales (and sales change)						Considered, in addition to segment operating performance, in evaluating and managing operations; useful in understanding underlying business performance, provides additional transparency to special items
•Operating income (loss), segment operating income (loss) and operating income (loss) margin
•Income (loss) before taxes
•Provision for income taxes and effective tax rate
•Net income (loss)
•Earnings (loss) per share

Special items for the periods presented include:

Net costs for significant litigation:

•These relate to 3M's respirator mask/asbestos (which include Aearo and non-Aearo items), PFAS-related other environmental, and Combat Arms Earplugs matters (as discussed in Note 14). Net costs include the impacts of changes in accrued liabilities (including interest imputation on contractual settlement obligations), external legal fees, and insurance recoveries, along with the associated tax impacts. Net costs related to respirator mask/asbestos are reflected as special items in the Safety and Industrial business segment while those impacting operating income (loss) associated with PFAS-related other environmental and Combat Arms Earplugs matters are reflected as corporate special items in Corporate and Unallocated. In addition, during the voluntary chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023—see Note 14), costs associated with the Aearo portion of respirator mask/asbestos matters were reflected in corporate special items in Corporate and Unallocated. Prior to the bankruptcy, costs associated with Combat Arms Earplugs matters were reflected as part of special items in the Safety and Industrial business segment.

Divestiture costs:

•These include costs related to separating and divesting substantially an entire business segment of 3M following public announcement of its intended divestiture.

Manufactured PFAS products:

•These amounts relate to sales and estimates of income regarding manufactured PFAS products that 3M plans to exit by the end of 2025 included within the Transportation and Electronics business segment. Estimated income does not contemplate impacts on non-operating items such as net interest income/expense and the non-service cost components portion of defined benefit plan net periodic benefit costs.

Russia exit charges/benefits:

•In the second quarter of 2023, 3M recorded a gain on final disposal of net assets in Russia. Previously, in the third quarter of ~~2017,~~2022, 3M recorded a decrease of 0.2 percentage points versus last year’s third quarter, and 26.1 percent in the first nine months of 2017, a decline of 2.2 percentage points versus last year’s first nine months. The third quarter and first nine months 2017 change in tax rate was driven by a number of factors as referenced in Note 6.

Lower shares outstanding, partially offset by higher interest expense, increased earnings per share. Weighted-average diluted shares outstanding in the third quarter and first nine months of 2017 declined 1.0 percent and 1.3 percent year-on-year, respectively, which benefited earnings per share. The decrease in the outstanding weighted-average diluted shares relates to the Company’s purchase of $380 million and $1.6 billion of its own stock in the third quarter and first nine months of 2017, respectively. Higher net interest expense was largely due to higher U.S. average debt balances and higher interest rates.

The third quarter and first nine months of 2017 had year-on-year operating income impacts from the following divestitures: Polyfoam and the remaining portion of the library system business (both in first quarter 2016), protective films business and cathode battery technology out-license business (both in fourth quarter 2016), prescription safety eyewear business (January 2017), and identity management business and tolling and automated license/number plate recognition business (both in the second quarter of 2017).

There was no incremental gain on divestiture impact during the third quarter of 2017. The pre-tax operating income increase during the first nine months of 2017 was approximately $450 million year-on-year, which is equivalent to a year-on-year increase of 56 cents per diluted share (largelycharge primarily related to ~~the identify management business).~~

~~Divestiture lost operating loss/(income) impacts, which are measured~~impairment of these assets in connection with management's committed exit and disposal plan. Refer to Note 13 for the first twelve months post-transaction, increased pre-tax earnings by approximately $10 million and decreased pre-tax earnings by approximately $2 million for the third quarter and first nine months of 2017, respectively.

Operating income results include year-on-year incremental strategic investments that decreased pre-tax earnings by approximately $48 million and $362 million in the third quarter and first nine months of 2017, respectively. These incremental strategic investments are comprised of 3M’s investments in growth initiatives and optimization of its portfolio and supply chain footprint. Additional discussion on strategic investments is provided later within “Divestitures and Strategic Investments” and also within the “Results of Operations” section.

further details.

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Three months ended June 30, 2022
(Dollars in millions, except per share amounts) Net sales Operating income (loss) Operating income (loss) margin Income (loss) before taxes Provision (benefit) for income taxes Effective tax rate Net income (loss) attributable to 3M Earnings per diluted share
Safety and Industrial
GAAP amounts $ (707) (24.2) %
Adjustments for special items:
Net costs for significant litigation 1,337
Total special items 1,337
Adjusted amounts (non-GAAP measures) $ 630 21.5 %
Transportation and Electronics
GAAP amounts $ 2,268 $ 475 21.0 %
Adjustments for special items:
Manufactured PFAS products (318) (20)
Total special items (318) (20)
Adjusted amounts (non-GAAP measures) $ 1,950 $ 455 23.4 %
Total Company
GAAP amounts $ 8,702 $ 110 1.3 % $ 60 $ (23) (38.3) % $ 78 $ 0.14
Adjustments for special items:
Net costs for significant litigation — 1,716 1,716 374 1,342 2.34
Manufactured PFAS products (318) (20) (20) (6) (14) (0.03)
Total special items (318) 1,696 1,696 368 1,328 2.31
Adjusted amounts (non-GAAP measures) $ 8,384 $ 1,806 21.6 % $ 1,756 $ 345 19.8 % $ 1,406 $ 2.45


	Three months ended June 30, 2023
(Dollars in millions, except per share amounts)	Net sales		Sales change		Operating income (loss)		Operating income (loss) margin		Income (loss) before taxes		Provision (benefit) for income taxes		Effective tax rate		Net income (loss) attributable to 3M		Earnings (loss) per diluted share		Earnings (loss) per diluted share percent change
Safety and Industrial
GAAP amounts					$	534	19.3	%
Adjustments for special items:
Net costs for significant litigation					80
Total special items					80
Adjusted amounts (non-GAAP measures)					$	614	22.2	%
Transportation and Electronics
GAAP amounts	$	2,191	(3.4)	%	$	410	18.7	%
Adjustments for special items:
Manufactured PFAS products	(332)				(41)
Total special items	(332)				(41)
Adjusted amounts (non-GAAP measures)	$	1,859	(4.7)	%	$	369	19.8	%
Total Company
GAAP amounts	$	8,325	(4.3)	%	$	(8,958)	(107.6)	%	$	(9,023)	$	(2,184)	24.2	%	$	(6,841)	$	(12.35)	N/M
Adjustments for special items:
Net costs for significant litigation1	—				10,437				10,449		2,457				7,992		14.43
Manufactured PFAS products	(332)				(41)				(41)		(10)				(31)		(0.06)
Russia exit charges (benefits)	—				(18)				(18)		3				(21)		(0.04)
Divestiture costs	—				125				125		20				105		0.19
Total special items	(332)				10,503				10,515		2,470				8,045		14.52
Adjusted amounts (non-GAAP measures)	$	7,993	(4.7)	%	$	1,545	19.3	%	$	1,492	$	286	19.1	%	$	1,204	$	2.17	(12)	%

1For the per share amount, this includes adjusting-out the impact of this item causing weighted average shares outstanding to be the same for both basic and diluted loss per share in periods of resulting net losses.


	Three months ended June 30, 2023
Sales Change	Organic sales		Acquisitions		Divestitures		Translation		Total sales change
Total Company	(2.2)	%	0.1	%	(1.3)	%	(0.9)	%	(4.3)	%
Remove manufactured PFAS products special item impact	(0.3)		—		(0.1)		—		(0.4)
Adjusted total Company (non-GAAP measures)	(2.5)	%	0.1	%	(1.4)	%	(0.9)	%	(4.7)	%

Transportation and Electronics	(1.3)	%	0.5	%	(1.3)	%	(1.3)	%	(3.4)	%
Remove manufactured PFAS products special item impact	(1.1)		0.1		(0.2)		(0.1)		(1.3)
Adjusted Transportation and Electronics (non-GAAP measures)	(2.4)	%	0.6	%	(1.5)	%	(1.4)	%	(4.7)	%

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	Six months ended June 30, 2022
(Dollars in millions, except per share amounts)	Net sales		Operating income (loss)		Operating income (loss) margin		Income (loss) before taxes		Provision (benefit) for income taxes		Effective tax rate		Net income (loss) attributable to 3M		Earnings per diluted share
Safety and Industrial
GAAP amounts			$	(80)	(1.3)	%
Adjustments for special items:
Net costs for significant litigation			1,400
Total special items			1,400
Adjusted amounts (non-GAAP measures)			$	1,320	22.1	%
Transportation and Electronics
GAAP amounts	$	4,608	$	939	20.4	%
Adjustments for special items:
Manufactured PFAS products	(638)		(36)
Total special items	(638)		(36)
Adjusted amounts (non-GAAP measures)	$	3,970	$	903	22.8	%
Total Company
GAAP amounts	$	17,531	$	1,751	10.0	%	$	1,663	$	279	16.8	%	$	1,377	$	2.40
Adjustments for special items:
Net costs for significant litigation	—		1,966				1,966		399				1,567		2.73
Manufactured PFAS products	(638)		(36)				(36)		(10)				(26)		(0.05)
Total special items	(638)		1,930				1,930		389				1,541		2.68
Adjusted amounts (non-GAAP measures)	$	16,893	$	3,681	21.8	%	$	3,593	$	668	18.6	%	$	2,918	$	5.08


	Six months ended June 30, 2023
(Dollars in millions, except per share amounts)	Net sales		Sales change		Operating income (loss)		Operating income (loss) margin		Income (loss) before taxes		Provision (benefit) for income taxes		Effective tax rate		Net income (loss) attributable to 3M		Earnings (loss) per diluted share		Earnings (loss) per diluted share percent change
Safety and Industrial
GAAP amounts					$	1,135	20.5	%
Adjustments for special items:
Net costs for significant litigation					41
Total special items					41
Adjusted amounts (non-GAAP measures)					$	1,176	21.2	%
Transportation and Electronics
GAAP amounts	$	4,241	(8.0)	%	$	704	16.6	%
Adjustments for special items:
Manufactured PFAS products	(677)				(51)
Total special items	(677)				(51)
Adjusted amounts (non-GAAP measures)	$	3,564	(10.2)	%	$	653	18.3	%
Total Company
GAAP amounts	$	16,356	(6.7)	%	$	(7,717)	(47.2)	%	$	(7,834)	$	(1,974)	25.2	%	$	(5,865)	$	(10.60)	N/M
Adjustments for special items:
Net costs for significant litigation1	—				10,480				10,492		2,464				8,028		14.51
Manufactured PFAS products	(677)				(51)				(51)		(13)				(38)		(0.07)
Russia exit charges (benefits)	—				(18)				$	(18)	3				(21)		(0.04)
Divestiture costs	—				227				227		40				187		0.34
Total special items	(677)				10,638				10,650		2,494				8,156		14.74
Adjusted amounts (non-GAAP measures)	$	15,679	(7.2)	%	$	2,921	18.6	%	$	2,816	$	520	18.5	%	$	2,291	$	4.14	(19)	%


	Six months ended June 30, 2023
Sales Change	Organic sales		Acquisitions		Divestitures		Translation		Total sales change
Total Company	(3.6)	%	0.1	%	(1.3)	%	(1.9)	%	(6.7)	%
Remove manufactured PFAS products special item impact	(0.5)		—		(0.1)		0.1		(0.5)
Adjusted total Company (non-GAAP measures)	(4.1)	%	0.1	%	(1.4)	%	(1.8)	%	(7.2)	%

Transportation and Electronics	(4.7)	%	0.2	%	(1.1)	%	(2.4)	%	(8.0)	%
Remove manufactured PFAS products special item impact	(2.3)		0.1		(0.2)		0.2		(2.2)
Adjusted Transportation and Electronics (non-GAAP measures)	(7.0)	%	0.3	%	(1.3)	%	(2.2)	%	(10.2)	%

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Sales and operating income (loss) by business segment:

The following tables contain sales and operating income (loss) results by business segment for the three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016. In addition to the discussion below, refer~~2022. Refer to the section entitled ~~“Performance~~Performance by Business ~~Segment”~~Segment later in MD&A for ~~a more detailed~~additional discussion ~~of the sales and operating income~~concerning 2023 versus 2022 results, ~~of the Company and its respective business segments (including~~including Corporate and ~~Unallocated).~~Unallocated. Refer to Note 1415 for additional information on business ~~segments, including Elimination~~segments.


	Three months ended June 30,
	2023		2022				% change
(Dollars in millions)	Net Sales		Operating Income (Loss)		Net Sales			Operating Income (Loss)		Net Sales		Operating Income (Loss)
Business Segments
Safety and Industrial	$	2,765	$	534	$	2,924		$	(707)	(5.5)	%	(175.6)	%
Transportation and Electronics	2,191		410		2,268			475		(3.4)		(13.8)
Health Care	2,075		411		2,179			492		(4.8)		(16.4)
Consumer	1,293		235		1,330			248		(2.7)		(5.1)
Corporate and Unallocated	1		(10,548)		1			(398)
Total Company	$	8,325	$	(8,958)	$	8,702		$	110	(4.3)	%	N/M

	Six months ended June 30,
	2023		2022				% change
(Dollars in millions)	Net Sales		Operating Income (Loss)		Net Sales			Operating Income (Loss)		Net Sales		Operating Income (Loss)
Business Segments
Safety and Industrial	$	5,544	$	1,135	$	5,975		$	(80)	(7.2)	%	N/M
Transportation and Electronics	4,241		704		4,608			939		(8.0)		(25.1)
Health Care	4,085		771		4,307			937		(5.2)		(17.7)
Consumer	2,485		414		2,639			467		(5.8)		(11.4)
Corporate and Unallocated	1		(10,741)		2			(512)
Total Company	$	16,356	$	(7,717)	$	17,531		$	1,751	(6.7)	%	N/M


	Three months ended June 30, 2023
Worldwide Sales Change By Business Segment	Organic sales		Acquisitions		Divestitures		Translation		Total sales change
Safety and Industrial	(4.6)	%	—	%	—	%	(0.9)	%	(5.5)	%
Transportation and Electronics	(1.3)		0.5		(1.3)		(1.3)		(3.4)
Health Care	0.1		—		(4.1)		(0.8)		(4.8)
Consumer	(2.2)		—		—		(0.5)		(2.7)
Total Company	(2.2)		0.1		(1.3)		(0.9)		(4.3)

	Six months ended June 30, 2023
Worldwide Sales Change By Business Segment	Organic sales		Acquisitions		Divestitures		Translation		Total sales change
Safety and Industrial	(5.3)	%	—	%	—	%	(1.9)	%	(7.2)	%
Transportation and Electronics	(4.7)		0.2		(1.1)		(2.4)		(8.0)
Health Care	0.8		—		(4.2)		(1.8)		(5.2)
Consumer	(4.5)		—		(0.1)		(1.2)		(5.8)
Total Company	(3.6)		0.1		(1.3)		(1.9)		(6.7)

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section for additional details on the impact of ~~Dual Credit. Further discussion of the Company’s~~special items on sales (and sales change) and operating income ~~results is in the section entitled “Operating Income” within the “Results of Operations” section.~~

Three months ended September 30,

2017

2016

% change


Net

Oper.

Net

Oper.

Net

Oper.

(Dollars in millions)

Sales

Income

Sales

Income

Sales

Income

Business Segments

Industrial

$
2,764

$
614

$
2,603

$
595

6.2
%
3.1
%
Safety and Graphics

1,529

410

1,500

372

1.9
%
10.5
%
Health Care

1,476

471

1,371

431

7.7
%
9.3
%
Electronics and Energy

1,414

394

1,250

304

13.1
%
29.9
%
Consumer

1,236

307

1,210

317

2.2
%
(3.2)
%
Corporate and Unallocated

1

(100)

2

(65)

—

—

Elimination of Dual Credit

(248)

(55)

(227)

(50)

—

—

Total Company

$
8,172

$
2,041

$
7,709

$
1,904

6.0
%
7.2
%

Three months ended September 30, 2017


Organic







Worldwide

local-

Total

Sales Change Analysis

currency

sales

By Business Segment

sales

Divestitures

Translation

change

Industrial

6.1
%
(0.6)
%
0.7
%
6.2
%
Safety and Graphics

6.0

(4.9)

0.8

1.9

Health Care

6.9

—

0.8

7.7

Electronics and Energy

13.2

(0.1)

—

13.1

Consumer

1.9

—

0.3

2.2

Total Company

6.6
%
(1.2)
%
0.6
%
6.0
%

Sales in U.S. dollars in the third quarter of 2017 increased 6.0 percent compared to the same period in 2016, with increases in organic local-currency sales (which includes organic volume impacts plus selling price impacts) and foreign currency translation, partially offset(loss) by ~~divestiture impacts. Total company organic local-currency sales increased 6.6 percent, with growth in all~~ business segments. Worldwide operating income margins for the third quarter of 2017 were 25.0 percent, compared to 24.7 percent for the third quarter of 2016, with operating income margins greater than 22 percent across all five business segments.

Divestitures reduced third quarter sales growth by 1.2 percent. As part of its ongoing portfolio management process, 3M sold its protective films business and cathode battery technology out-license business (both in fourth quarter 2016). In addition, 3M sold its prescription safety eyewear business (January 2017), its identify management business (May 2017), and its tolling and automated license/number plate recognition business (June 2017). Refer to Note 2 in the Consolidated Financial Statements for additional detail.

segment.

Table of Contents

Nine months ended September 30,

2017

2016

% change


Net

Oper.

Net

Oper.

Net

Oper.

(Dollars in millions)

Sales

Income

Sales

Income

Sales

Income

Business Segments

Industrial

$
8,193

$
1,762

$
7,856

$
1,837

4.3
%
(4.1)
%
Safety and Graphics

4,603

1,661

4,538

1,152

1.4
%
44.2
%
Health Care

4,339

1,317

4,176

1,350

3.9
%
(2.4)
%
Electronics and Energy

3,838

920

3,468

716

10.6
%
28.5
%
Consumer

3,415

724

3,390

836

0.7
%
(13.4)
%
Corporate and Unallocated

5

(225)

5

(189)

—

—

Elimination of Dual Credit

(726)

(160)

(653)

(144)

—

—

Total Company

$
23,667

$
5,999

$
22,780

$
5,558

3.9
%
7.9
%

Nine months ended September 30, 2017


Organic







Worldwide

local-

Total

Sales Change Analysis

currency

sales

By Business Segment

sales

Divestitures

Translation

change

Industrial

5.2
%
(0.6)
%
(0.3)
%
4.3
%
Safety and Graphics

4.6

(3.0)

(0.2)

1.4

Health Care

4.1

—

(0.2)

3.9

Electronics and Energy

11.0

(0.2)

(0.2)

10.6

Consumer

0.5

—

0.2

0.7

Total Company

5.0
%
(0.9)
%
(0.2)
%
3.9
%

Sales in U.S. dollars in the first nine months of 2017 increased 3.9 percent, with an increase in organic local-currency sales partially offset by divestiture and foreign currency translation impacts. Total company organic local-currency sales increased 5.0 percent, with growth in all business segments. All five of 3M’s business segments achieved operating income margins in excess of 21 percent. Worldwide operating income margins for the first nine months of 2017 were 25.3 percent, compared to 24.4 percent for the first nine months of 2016, helped by a net benefit from divestiture gains, net of lost operating income, partially offset by incremental strategic investments. Organic volume growth also benefited results.

In the first quarter of 2016, 3M completed the sale of the remaining portions of its library systems business. Also, in the first quarter of 2016, 3M divested the assets of 3M’s pressurized polyurethane foam adhesives business (formerly known as Polyfoam). These businesses were formerly part of the Company’s Safety and Graphics business and Industrial business, respectively. Additional acquisition and divestiture impacts that impacted the first nine months ended September 30, 2017 are provided in the preceding third quarter discussion.

~~Table of Contents~~

Sales by geographic area:

Percent change information compares the ~~third quarter~~three and ~~first nine~~six months ~~of 2017~~ended June 30, 2023 with the same ~~periods last~~prior year period, unless otherwise indicated. ~~From a geographic perspective, any references to EMEA refer to Europe, Middle East and Africa on a combined basis.~~ Additional discussion of ~~geographic area impacts by~~ business segment results is provided in the Performance by Business Segment section.

Three months ended September 30, 2017

Europe,

Latin

United

Asia

Middle East

America/

Other


States

Pacific

& Africa

Canada

Unallocated

Worldwide

Net sales (millions)

$
3,223

$
2,580

$
1,589

$
784

$
(4)

$
8,172

% of worldwide sales

39.4
%

31.6
%

19.4
%

9.6
%

—

100.0
%
Components of net sales change:

Volume — organic

3.8
%

13.4
%

3.3
%

4.4
%

—

6.6
%
Price

(0.2)

(0.6)

0.7

0.9

—

—

Organic local-currency sales

3.6

12.8

4.0

5.3

—

6.6

Divestitures

(1.6)

(0.5)

(0.8)

(2.1)

—

(1.2)

Translation

—

(1.5)

4.2

2.4

—

0.6

Total sales change

2.0
%

10.8
%

7.4
%

5.6
%

—

6.0
%

Total sales change:

Industrial

4.0
%

6.4
%

9.6
%

7.2
%

—

6.2
%
Safety and Graphics

(3.0)
%

6.2
%

8.7
%

(0.6)
%

—

1.9
%
Health Care

8.5
%

7.4
%

5.2
%

10.7
%

—

7.7
%
Electronics and Energy

(1.8)
%

19.2
%

4.8
%

8.3
%

—

13.1
%
Consumer

1.1
%

5.3
%

1.6
%

5.6
%

—

2.2
%

Organic local-currency sales change:

Industrial

5.0
%

8.7
%

5.2
%

5.6
%

—

6.1
%
Safety and Graphics

3.1
%

11.0
%

7.7
%

4.2
%

—

6.0
%
Health Care

8.5
%

8.8
%

1.6
%

8.6
%

—

6.9
%
Electronics and Energy

(1.5)
%

20.0
%

0.9
%

6.2
%

—

13.2
%
Consumer

1.1
%

7.1
%

(2.2)
%

2.7
%

—

1.9
%


	Three months ended June 30, 2023
	Americas			Asia Pacific			Europe, Middle East & Africa			Other Unallocated		Worldwide
Net sales (millions)	$	4,678		$	2,134		$	1,513		$	—	$	8,325
% of worldwide sales	56.2		%	25.6		%	18.2		%			100.0		%
Components of net sales change:
Organic sales	0.1			(8.1)			0.3					(2.2)
Acquisitions	0.2			—			—					0.1
Divestitures	(1.6)			(1.0)			(0.8)					(1.3)
Translation	(0.2)			(3.7)			1.1					(0.9)
Total sales change	(1.5)		%	(12.8)		%	0.6		%			(4.3)		%

	Six months ended June 30, 2023
	Americas			Asia Pacific			Europe, Middle East & Africa			Other Unallocated		Worldwide
Net sales (millions)	$	9,077		$	4,314		$	2,965		$	—	$	16,356
% of worldwide sales	55.5		%	26.4		%	18.1		%			100.0		%
Components of net sales change:
Organic sales	0.6			(11.7)			(2.2)					(3.6)
Acquisitions	0.1			—			—					0.1
Divestitures	(1.6)			(1.0)			(0.9)					(1.3)
Translation	(0.3)			(4.6)			(2.0)					(1.9)
Total sales change	(1.2)		%	(17.3)		%	(5.1)		%			(6.7)		%

Additional information beyond what is included in the preceding ~~table is~~tables are as follows:

In the Asia Pacific geographic area, where 3M’s Electronics and Energy business is concentrated, sales benefited from strengthened demand across most electronics market segments. In China/Hong Kong, both total sales and organic local-currency sales increased 23 percent. In Japan, total sales declined 1 percent, as organic local-currency sales growth of 5 percent was more than offset by foreign currency translation impacts.

In the EMEA geographic area, Central/East Europe and Middle East/Africa had both total sales and organic local-currency sales increases of 8 percent. West Europe total sales grew 7 percent, driven by foreign currency translation impacts, in addition to organic local-currency sales growth of 3 percent.

In the Latin America/Canada geographic area, total sales increased 8 percent in Mexico, driven by organic local-currency sales growth of 5 percent. In Canada, total sales increased 16 percent, driven by organic local-currency sales growth of 14 percent. In Brazil, total sales growth of 2 percent was driven by foreign currency translation impact, as organic local-currency sales growth was flat.

~~Selling prices were flat year-on-year for the third quarter of 2017, compared to a year-on-year decrease of 0.3 percent for~~•For the second quarter of ~~2017.~~2023, in the Americas geographic area, U.S. total sales decreased 1 percent which included flat organic sales. Total sales in Mexico increased 9 percent which included increased organic sales of 11 percent. In Canada, total sales decreased 16 percent which included decreased organic sales of 11 percent. In Brazil, total sales decreased 2 percent which included increased organic sales of 2 percent. In the Asia Pacific ~~strong volume growth~~geographic area, China total sales decreased 8 percent which included decreased organic sales of 4 percent. In Japan, total sales decreased 19 percent which included decreased organic sales of 13 percent.

•For the first six months of 2023, in ~~electronics had a negative impact on price. Latin America/~~the Americas geographic area, U.S. total sales were flat which included increased organic sales of 1 percent. Total sales in Mexico increased 7 percent which included increased organic sales of 11 percent. In Canada, ~~and EMEA had price growth, while~~total sales decreased 15 percent which included decreased organic sales of 9 percent. In Brazil, total sales increased 1 percent which included increased organic sales of 5 percent. In the ~~U.S. selling prices declined slightly.~~

~~Foreign currency translation increased year-on-year sales by 0.6 percent, with translation-related sales increases in both EMEA and Latin America/Canada. In~~ Asia Pacific ~~the U.S. dollar was weaker compared to the third quarter~~geographic area, China total sales decreased 16 percent which included decreased organic sales of ~~2016 by~~

11 percent. In Japan, total sales decreased 20 percent which included decreased organic sales of 12 percent.

~~Table of Contents~~

8 percent versus the Japanese Yen, while the Chinese Yuan was flat. In EMEA, the U.S. dollar was stronger compared to the third quarter of 2016 by 6 percent versus the Euro, while the British Pound was flat.

Nine months ended September 30, 2017

Europe,

Latin

United

Asia

Middle East

America/

Other


States

Pacific

& Africa

Canada

Unallocated

Worldwide

Net sales (millions)

$
9,291

$
7,335

$
4,771

$
2,277

$
(7)

$
23,667

% of worldwide sales

39.3
%

31.0
%

20.1
%

9.6
%

—

100.0
%
Components of net sales change:

Volume — organic

2.6
%

11.4
%

1.4
%

2.8
%

—

5.1
%
Price

(0.3)

(0.4)

0.5

1.0

—

(0.1)

Organic local-currency sales

2.3

11.0

1.9

3.8

—

5.0

Divestitures

(1.3)

(0.3)

(0.5)

(1.3)

—

(0.9)

Translation

—

(1.0)

(0.4)

2.2

—

(0.2)

Total sales change

1.0
%

9.7
%

1.0
%

4.7
%

—

3.9
%

Total sales change:

Industrial

3.9
%

6.1
%

3.0
%

4.3
%

—

4.3
%
Safety and Graphics

(1.2)
%

5.4
%

2.4
%

0.8
%

—

1.4
%
Health Care

4.7
%

6.9
%

(1.7)
%

10.4
%

—

3.9
%
Electronics and Energy

(0.6)
%

17.2
%

(1.2)
%

4.0
%

—

10.6
%
Consumer

(1.2)
%

6.7
%

(2.8)
%

6.9
%

—

0.7
%

Organic local-currency sales change:

Industrial

5.0
%

7.8
%

3.7
%

2.6
%

—

5.2
%
Safety and Graphics

2.8
%

8.3
%

4.9
%

3.2
%

—

4.6
%
Health Care

4.7
%

7.8
%

(0.6)
%

8.1
%

—

4.1
%
Electronics and Energy

0.4
%

17.8
%

(1.7)
%

2.5
%

—

11.0
%
Consumer

(1.2)
%

6.8
%

(2.6)
%

3.9
%

—

0.5
%

~~Additional information beyond what is included in the preceding table is as follows:~~

In the Asia Pacific geographic area, where 3M’s Electronics and Energy business is concentrated, sales benefited from strengthened demand across most electronics market segments. Total sales in China/Hong Kong grew 15 percent and Japan grew 5 percent. On an organic local-currency sales basis, China/Hong Kong grew 18 percent and Japan grew 9 percent.

In the EMEA geographic area, Central/East Europe and Middle East/Africa total sales and organic local-currency grew 2 percent. West Europe total sales grew 1 percent, as organic local-currency sales growth of 2 percent was partially offset by foreign currency translation.

In the Latin America/Canada geographic area, total sales increased 4 percent in Mexico, as organic local-currency sales growth of 7 percent was partially offset by foreign currency translation and divestitures. In Canada, both total sales and organic-local currency sales grew 6 percent. In Brazil total sales growth of 11 percent was driven by foreign currency translation, while organic local-currency sales increased 1 percent.

~~Foreign currency translation reduced year-on-year sales by 0.2 percent, with the translation-related sales increase in Latin America/Canada more than offset by the decreases in EMEA and Asia Pacific.~~

Managing currency risks:

The stronger U.S. dollar had a negative impact on sales in the second quarter and first six months of 2023 compared to the same period last year. Net of the Company’s hedging strategy, foreign currency negatively impacted earnings in the second quarter and first ~~nine~~six months of ~~2017.~~2023 compared to the same period last year. 3M utilizes a number of tools to ~~hedge~~manage currency risk related to ~~earnings. 3M uses~~earnings including natural hedges such as pricing, productivity, hard currency, ~~and~~ hard currency-indexed billings, and localizing source of supply. 3M also uses financial hedges to mitigate

~~Table of Contents~~

currency risk. In the case of more liquid currencies, 3M hedges a portion of its aggregate exposure, using a 12, 24 or 36 month horizon, depending on the currency in question. For less liquid currencies, financial hedging is frequently more expensive with more limitations on tenor. Thus, this risk is largely managed via local operational actions using natural hedging tools as discussed above. In either case, 3M’s hedging approach is designed to mitigate a portion of foreign currency risk and reduce volatility, ultimately allowing time for 3M’s businesses to respond to changes in the marketplace.

Table of Contents

Financial condition:

~~3M generated $4.380 billion of operating cash flows in the first nine months of 2017, a decrease of $73 million when compared to the first nine months of 2016.~~

Refer to the section entitled ~~“Financial~~Financial Condition and ~~Liquidity”~~Liquidity later in MD&A for a discussion of items impacting cash flows.

In ~~February 2016,~~November 2018, 3M’s Board of Directors ~~authorized~~replaced the Company’s February 2016 repurchase program with a new repurchase program. This new program authorizes the repurchase of up to $10 billion of 3M’s outstanding common stock, with no pre-established end date. In the first ~~nine~~six months of ~~2017,~~2023, the Company purchased ~~$1.6 billion~~$29 million of its own stock, compared to ~~$2.8 billion~~$773 million of stock purchases in the first ~~nine~~six months of ~~2016.~~2022. As of ~~September~~June 30, ~~2017,~~2023, approximately ~~$5.6~~$4.2 billion remained available under the ~~February 2016~~ authorization. ~~The Company expects to purchase $2.0 billion to $2.5 billion of its own stock in 2017.~~ In February ~~2017,~~2023, 3M’s Board of Directors declared a first-quarter ~~2017~~2023 dividend of ~~$1.175~~$1.50 per share, an increase of 61 percent. This marked the ~~59th~~65th consecutive year of dividend increases for 3M. In May ~~2017, 3M’s~~2023, 3M's Board of Directors declared a ~~second quarter 2017~~second-quarter 2023 dividend of ~~$1.175~~$1.50 per share. ~~In August 2017, 3M’s Board of Directors declared a third quarter 2017 dividend of $1.175 per share.~~

3M currently has an AA- credit rating with a stable outlook from Standard & Poor’s and has an A1 credit rating with a stable outlook from Moody’s Investors Service. The Company generates significant ongoing cash flow and has proven access to capital markets funding throughout business cycles.

3M expects to contribute approximately $300 million to $500 million of cash to its global defined benefit pension and postretirement plans in 2017. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2017.

~~Table of Contents~~

~~Divestitures and Strategic Investments:~~

In both the third quarter and first nine months of 2017, the Company continued to execute on accelerating investments in growth initiatives and footprint optimization. In addition, the Company divested certain businesses as it continued to focus its portfolio on opportunities that create greater value for its shareholders. As shown below, these divestitures and strategic investments led to a net year-on-year decrease of approximately $0.05 per diluted share and a benefit of $0.10 per diluted share, respectively, for the three and nine months ended September 30, 2017.

Three months ended September 30, 2017

Nine months ended September 30, 2017

Divestiture impacts and strategic investments net benefit/(cost) (in millions, except per share amounts)

Pre-tax impact

Impact per diluted share after-tax

Pre-tax impact

Impact per diluted share after-tax

Divestiture impacts:

2017 divestiture gains

$
—

$
490

Less: prior year divestiture gains

—

(40)

Year-on-year lost operating loss/(income) from divested businesses

10

(2)

Year-on-year divestiture impacts, net of lost operating loss/(income)

$
10

$
0.01

$
448

$
0.56

Strategic investments:

2017 portfolio and footprint optimization activities:

Restructuring actions and exit activities

$
—

$
(123)

Asset charges and accelerated depreciation

(24)

(140)

Other costs

(11)

(26)

Less: prior year portfolio and footprint optimization activities

6

21

Year-on-year portfolio and footprint optimization

(29)

$
(0.04)

(268)

$
(0.34)

Incremental year-on-year growth initiatives

(19)

(94)

Total incremental strategic investments

$
(48)

$
(0.06)

$
(362)

$
(0.46)

Year-on-year divestiture impacts and strategic investments net benefit/(cost)

$
(38)

$
(0.05)

$
86

$
0.10

~~The total pre-tax year-on-year divestiture impacts, net of strategic investments from the table above, are further detailed below by business group:~~

Three months ended

Nine months ended

(Millions)

September 30, 2017

September 30, 2017

Industrial

$
(12)

$
(114)

Safety and Graphics

5

460

Health Care

(4)

(49)

Electronics and Energy

(7)

(80)

Consumer

(13)

(88)

Corporate and Unallocated

(7)

(43)

Total pretax divestiture gains, net of strategic investments

$
(38)

$
86

~~Table of Contents~~

~~Fourth Quarter 2017 Items:~~

In October 2017, 3M sold its electronic monitoring business to an affiliate of Apax Partners for $200 million, net of cash sold and closing and other adjustments. 3M expects a pre-tax gain of approximately $100 million (or 12 cents per diluted share) in the fourth quarter of 2017 as a result of this divestiture. Refer to Note 2 for additional details.

In October 2017, 3M completed the acquisition of the underlying legal entities and associated assets of Scott Safety, which is headquartered in Monroe, North Carolina, from Johnson Controls for $2.0 billion, net of closing and other adjustments. The income from on-going operations, net of acquisition and integration costs, is expected to decrease earnings in the fourth quarter of 2017 by approximately 8 cents per diluted share. Refer to Note 2 for additional details.

During the fourth quarter of 2017, a debt extinguishment charge of approximately $95 million related to the repurchase of $305 million aggregate principal amount of the Company’s high coupon debt via tender offers is expected to decrease earnings by approximately 11 cents per diluted share. Refer to Note 8 for additional details.

Additionally in the fourth quarter of 2017, the Company will recognize additional incremental strategic investments comprised of growth initiatives and portfolio and footprint optimization charges. These incremental strategic investments are expected to decrease fourth quarter 2017 earnings year-on-year by approximately 6 cents to 10 cents per diluted share.

RESULTS OF OPERATIONS

Net Sales:

Refer to the preceding ~~sections entitled “Sales~~Overview section and ~~operating income~~the Performance by ~~business segment” and “Sales and operating income by geographic area”~~Business Segment section later in MD&A for additional discussion of sales change.

Operating Expenses:

Three months ended

Nine months ended

September 30,

September 30,

(Percent of net sales)

2017

2016

Change

2017

2016

Change

Cost of sales

49.4
%
49.9
%
(0.5)
%
50.5
%
49.7
%
0.8
%

Selling, general and administrative expenses

19.9

19.9

—

20.4

20.3

0.1

Research, development and related expenses

5.7

5.5

0.2

5.9

5.8

0.1

Gain from sale of businesses

—

—

—

(2.1)

(0.2)

(1.9)

Operating income

25.0
%
24.7
%
0.3
%
25.3
%
24.4
%
0.9
%


	Three months ended June 30,						Six months ended June 30,
(Percent of net sales)	2023		2022		Change		2023		2022		Change
Cost of sales	55.3	%	58.5	%	(3.2)	%	56.4	%	56.6	%	(0.2)	%
Selling, general and administrative expenses (SG&A)	146.6		34.7		111.9		85.0		27.9		57.1
Research, development and related expenses (R&D)	5.7		5.5		0.2		5.8		5.5		0.3


Operating income (loss) margin	(107.6)	%	1.3	%	(108.9)	%	(47.2)	%	10.0	%	(57.2)	%

~~3M expects global defined benefit pension~~

Stock compensation expense was $41 million and ~~postretirement expense in 2017 (before settlements, curtailments, special termination benefits~~$47 million for the second quarter of 2023 and ~~other) to increase by approximately $74~~2022, respectively, and was $176 million ~~pre-tax when compared to 2016,~~and $182 million for the six months ended June 30, 2023 and 2022, respectively, which impacts cost of sales; selling, general and administrative expenses (SG&A); and research, development and related expenses (R&D). ~~Refer~~The Company’s annual stock option and restricted stock unit grant is made in February. Accounting rules require recognition of expense under a non-substantive vesting period approach, requiring compensation expense recognition when an employee is eligible to 3M’s Current Report on Form 8-K dated May 4, 2017 (MD&A section entitled Critical Accounting Estimates — Pension and Postretirement Obligations and Note 11, Pension and Postretirement Benefit Plans) for background concerningretire. This retiree-eligible population represents 35 percent of the ~~change to~~annual grant stock-based compensation expense; therefore, higher stock-based compensation expense is recognized in the ~~spot yield curve approach and other factors that will impact~~first quarter each year.

3M expects global defined benefit pension and postretirement ~~expenses~~service cost expense in ~~2017.~~2023 to decrease by approximately $160 million pre-tax when compared to 2022, which impacts cost of sales, SG&A, and R&D. The year-on-year ~~increase~~decrease in defined benefit pension and postretirement service cost expense for the ~~third~~second quarter and first ~~nine~~six months of ~~2017~~2023 was ~~$20~~approximately $38 million and ~~$64~~$80 million, respectively.

For total year 2022, the Company recognized consolidated defined benefit pre-tax pension and postretirement service cost expense of $426 million and a benefit of $248 million related to all non-service pension and postretirement net benefit costs (after settlements, curtailments, special termination benefits and other) for a total consolidated defined benefit pre-tax pension and postretirement expense of $178 million.

For total year 2023, defined benefit pension and postretirement service cost expense is anticipated to total approximately $270 million while non-service pension and postretirement net benefit cost is anticipated to be a benefit of approximately $125 million, for a total consolidated defined benefit pre-tax pension and postretirement expense of approximately $145 million, a decrease in expense of approximately $30 million compared to 2022.

~~Table of Contents~~

The Company is ~~investing in~~continuing the ongoing deployment of an ~~initiative called business transformation,~~enterprise resource planning (ERP) system on a worldwide basis, with these investments impacting cost of sales, SG&A, and R&D. Business transformation encompasses the ongoing multi-year phased implementation of an enterprise resource planning (ERP) system on a worldwide basis, as well as changes in processes and internal/external service delivery across 3M.

In both the three and nine months ended September 30, 2017, strategic investments in growth initiatives, portfolio actions and footprint optimization, in addition to gains on divestitures, impacted 3M’s operating expenses. The table below reflects actual amounts within the period and does not include any year-on-year impacts.

Three months ended

Nine months ended

(Millions)

September 30, 2017

September 30, 2017

Cost of sales

$
18

$
220

Selling, general and administrative expenses

57

185

Research, development and related charges

—

9

Gain on sale of businesses

—

(490)

Total

$
75

$
(76)

Cost of Sales:

~~Cost of sales includes manufacturing, engineering and freight costs.~~

Cost of sales, measured as a percent of sales, decreased in the ~~third~~second quarter and first six months of ~~2017, helped by 6.6 percent organic sales volume growth~~2023 when compared to the same period last year. Decreases were primarily due to lower year-on-year net costs for significant litigation to address certain PFAS-related matters at 3M's Zwijndrecht, Belgium site, higher selling prices, spending discipline and ~~an approximate 1 percent year-on-year reduction in raw material input costs as a result of input management. This decrease was~~restructuring benefits. These decreases were partially offset by ~~year-on-year charges related to 3M’s optimization~~higher raw materials and energy costs; manufacturing productivity headwinds; investments in growth, productivity and sustainability; and restructuring charges.

Table of ~~its portfolio~~Contents

Selling, General and ~~supply chain footprint, foreign currency effects (net of hedge impacts), and higher defined benefit pension expense.~~

~~Cost of sales,~~Administrative Expenses:

SG&A, measured as a percent of sales, increased in the first nine months of 2017 due to incremental strategic investments in productivity, portfolio actions and footprint optimization, foreign currency effects (net of hedge impacts), and higher defined benefit pension expense. This was partially offset by an approximate 1.5 percent year-on-year reduction in raw material input costs as a result of input management. Selling prices decreased net sales year-on-year by 0.1 percent in the first nine months of 2017.

~~Selling, General and Administrative Expenses:~~

~~SG&A in dollars increased 6.1 percent and 4.5 percent in the third~~second quarter and first ~~nine~~six months of ~~2017, respectively,~~2023 when compared to the same period last ~~year,~~year. SG&A in 2023 was primarily impacted by ~~incremental strategic investments~~a $10.3 billion pre-tax charge related to the proposed settlement agreement announced in the second quarter of 2023 with public water systems in the United States regarding PFAS (see Note 14). SG&A was also impacted by restructuring charges, divestiture costs (related to separating and ~~higher defined benefit pension expense.~~

preparing the Health Care business for spin-off), continued investment in key growth initiatives and ongoing respirator mask/asbestos litigation matters. These impacts were partially offset by lower net costs for significant litigation to address Combat Arms Earplugs litigation matters (for which a pre-tax charge of approximately $1.2 billion was reflected in the second quarter of 2022), restructuring benefits and ongoing general 3M cost management.

Research, Development and Related Expenses:

R&D, ~~in dollars~~measured as a percent of sales, increased ~~$36 million and $93 million~~ in the ~~third~~second quarter and first ~~nine~~six months of ~~2017, respectively,~~2023 when compared to the same period last year. 3M ~~continued~~continues to invest in ~~its key initiatives, including~~a range of R&D activities from application development, product and manufacturing support, product development and technology development aimed at disruptive ~~innovation programs with the potential to create entirely new markets and disrupt existing markets.~~

~~Gain on Sale~~innovations. R&D was also impacted by restructuring charges.

Other Expense (Income), Net:

See Note 6 for a detailed breakout of ~~Businesses:~~

~~In January 2017, 3M completed the sale~~this line item.

Interest expense (net of assets related to its safety prescription eyewear business to HOYA Vision Care. 3M received proceeds of $53 million for this transaction and recognized, net of assets sold, transaction and other costs, a pre-tax gain of $29 million, which was reported within the Company’s Safety and Graphics business.

In May 2017, 3M completed the sale of its identity management business to Gemalto N.V. In June 2017, 3M completed the sale of its tolling and automated license/number plate recognition business to Neology, Inc. 3M received proceeds of $833 million, or $809 million net of cash sold, and reflected a pre-tax gain of $461 million as a result of these two

~~Table of Contents~~

~~divestitures~~interest income) decreased in the second quarter ~~of 2017, which was reported within the Company’s Safety~~ and ~~Graphics business. For more details, refer to Note 2.~~

~~In the~~ first quarter of 2016, 3M completed the sale of the remainder of the assets of 3M’s library systems business to One Equity Partners Capital Advisors L.P. (OEP). Also in the first quarter of 2016, 3M completed the sale of its pressurized polyurethane foam adhesives business (formerly known as Polyfoam) to Innovative Chemical Products Group, a portfolio company of Audax Private Equity. 3M received proceeds of $56 million for these transactions and recognized a pre-tax gain of $40 million as a result of these two divestitures in the first quarter of 2016. These businesses were formerly part of the Company’s Safety and Graphics business and Industrial business, respectively. Refer to Note 2 in 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K) for more information on 3M’s acquisitions and divestitures.

~~Operating Income:~~

3M uses operating income as one of its primary business segment performance measurement tools. Refer to the table below for a reconciliation of operating income margins for the three months and nine months ended September 30, 2017 versus the same periods last year.

Three months ended

Nine months ended

(Percent of net sales)

September 30, 2017

September 30, 2017

Same period last year

24.7
%
24.4
%
Increase/(decrease) in operating income margin, due to:

Organic volume/productivity

0.9

0.8

Selling price and raw material impact

0.3

0.3

Foreign exchange impacts

(0.4)

(0.4)

Pension and postretirement benefit costs

(0.3)

(0.3)

Divestiture gains

—

1.9

Operating loss/(income) from divested businesses

0.4

0.1

Incremental strategic investments

(0.6)

(1.5)

Current period

25.0
%
25.3
%

~~Operating income margins increased 0.3 percentage points in the third quarter of 2017 and increased 0.9 percentage points in the first nine~~six months of ~~2017 when~~2023 compared to the same ~~periods last year. 3M benefited from~~period year-on-year ~~divestiture gains (refer to Note 2), non-repeating~~primarily driven by interest income generated on invested cash.

The non-service pension and postretirement net ~~operating losses from divested businesses, higher organic local-currency sales growth~~benefit decreased approximately $36 million and productivity. 3M also benefited from raw material cost decreases. Items that reduced operating income margins included year-on-year incremental strategic investments in growth, productivity and portfolio actions, in addition to charges related to 3M’s optimization of its portfolio and supply chain footprint. Additional items that reduced operating margins included foreign currency effects (net of hedge impacts) and higher year-on-year defined benefit pension expense.

~~Interest Expense and Income:~~

Three months ended

Nine months ended

September 30,

September 30,

(Millions)

2017

2016

2017

2016

Interest expense

$
57

$
50

$
156

$
135

Interest income

(13)

(8)

(33)

(20)

Total

$
44

$
42

$
123

$
115

~~Interest expense was higher~~$72 million in the ~~third~~second quarter and first ~~nine~~six months of ~~2017~~2023, respectively, compared to the same periods last year, largely due to higher U.S. average debt balances and higher interest rates. Interest income was higher in the third quarter and first nine months of 2017 compared to the same periods last year, due to higher average cash balances and cash yields.

period year-on-year.

~~Table of Contents~~

Provision (benefit) for Income Taxes:


	Three months ended				Nine months ended					Three months ended June 30,				Six months ended June 30,
	September 30,				September 30,
(Percent of pre-tax income)	2017		2016		2017		2016
(Percent of pre-tax income/loss)									(Percent of pre-tax income/loss)	2023		2022		2023		2022
Effective tax rate	28.3	%	28.5	%	26.1	%	28.3	%	Effective tax rate	24.2	%	(38.3)	%	25.2	%	16.8	%

The primary factors that impacted the comparisons of the Company's effective tax rate for the ~~third~~second quarters and the first six months of 2023 and 2022 were the second quarter ~~of 2017 was 28.3 percent, compared~~2022 charge related to ~~28.5 percent~~steps toward resolving Combat Arms Earplugs litigation and the second quarter 2023 charge related to the proposed settlement agreement with public water systems in the third quarter of 2016, a decrease of 0.2 percentage points. The effective tax rate for the first nine months of 2017 was 26.1 percent, compared to 28.3 percent in the first nine months of 2016, a decrease of 2.2 percentage points. The changes in the rates between years are impacted by many factors, as described furtherUnited States regarding PFAS (both discussed in Note 6.

14).

The ~~Company currently anticipates its 2017 full-year~~ tax ~~rate will be 26.0 to 27.0 percent. The~~ rate can vary from quarter to quarter due to discrete items, such as the settlement of income tax audits, ~~and~~ changes in tax laws, and employee share-based payment accounting; as well as recurring factors, such as the geographic mix of income before taxes.

Refer to Note 8 for further discussion of income taxes.

Income from Unconsolidated Subsidiaries, Net of Taxes:


	Three months ended June 30,				Six months ended June 30,
(Millions)	2023		2022		2023		2022
Income (loss) from unconsolidated subsidiaries, net of taxes	$	3	$	(1)	$	5	$	1

Income (loss) from unconsolidated subsidiaries, net of taxes, ~~and foreign currency effects.~~

is attributable to the Company’s accounting under the equity method for ownership interests in certain entities such as Kindeva following 3M's divestiture of the drug delivery business in 2020. In the fourth quarter of 2022, 3M sold its remaining ownership interest in Kindeva.

Net Income (Loss) Attributable to Noncontrolling Interest:


	Three months ended				Nine months ended
	September 30,				September 30,					Three months ended June 30,				Six months ended June 30,
(Millions)	2017		2016		2017		2016		(Millions)	2023		2022		2023		2022
Net income attributable to noncontrolling interest	$	4	$	2	$	9	$	7
Net income (loss) attributable to noncontrolling interest									Net income (loss) attributable to noncontrolling interest	$	5	$	4	$	10	$	8

Net income (loss) attributable to noncontrolling interest represents the elimination of the income or loss attributable to non-3M ownership interests in 3M consolidated entities. The primary noncontrolling interest relates to 3M India Limited, of which 3M’s effective ownership is 75 percent.

~~Currency Effects:~~

3M estimates that year-on-year currency effects, including hedging impacts, decreased pre-tax income by $29 million and $108 million for the three and nine months ended September 30, 2017, respectively. This estimate includes the effect

Table of translating profits from local currencies into U.S. dollars; the impact of currency fluctuations on the transfer of goods between 3M operations in the United States and abroad; and transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks and any impacts from swapping Venezuelan bolivars into U.S. dollars. 3M estimates that year-on-year derivative and other transaction gains and losses decreased pre-tax income by $34 million and $99 million for the three and nine months ended September 30, 2017, respectively.

Contents

Significant Accounting ~~Policies and Critical Accounting Estimates:~~

Policies:

Information regarding new accounting standards is included in Note 1 to the Consolidated Financial Statements. ~~In addition, refer to the Critical Accounting Estimates section within MD&A of 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K).~~

~~Table of Contents~~

PERFORMANCE BY BUSINESS SEGMENT

~~Disclosures~~

Item 1, Business Segments, provides an overview of 3M’s business segments. In addition, disclosures relating to 3M’s business segments are provided in Note ~~14.~~15. Effective in the first quarter of ~~2017,~~2023, the measure of segment operating performance and segment composition used by 3M’s chief operating decision maker (CODM) changed and, as ~~part~~a result, 3M’s disclosed measure of ~~3M’s continuing effort~~segment profit/loss (business segment operating income (loss)) was updated for all comparative periods presented. The change to ~~improve~~business segment operating income (loss) aligns with the ~~alignment of its businesses around markets~~update to how the CODM assesses performance and ~~customers,~~allocates resources for the ~~Company made the following changes:~~

~~Integration of former Renewable Energy Division~~

Company’s business segments (see Note 15 for additional details).

3M’s former Renewable Energy Division (RED) has been integrated into existing divisions within the Electronics and Energy business segment and Safety and Graphics business segment. 3M is committed to leadership in sustainability and to enabling the advancement of energy solutions into the future. Integrating RED’s offerings into larger divisions already serving these segments will provide increased scale and build on strength by leveraging 3M’s existing brands, go-to-market capabilities, and relationships to support growth objectives.

~~Creation of Automotive and Aerospace Solutions Division~~

3M created the Automotive and Aerospace Solutions Division, which combined the former Automotive Division and Aerospace and Commercial Transportation Division, which were both within the Industrial business segment. Combining the strengths along with the deep industry knowledge of each business will enable this new division to utilize shared technology platforms and processes to deliver a broader set of innovative solutions, along with world-class quality and service to 3M’s customers. This combination will help accelerate the Company’s profitable growth and market relevance across the automotive, aerospace and commercial transportation industries.

~~Consolidation of U.S. customer account activity - impacting dual credit reporting~~

The Company consolidated its customer account activity in the U.S. into more centralized sales districts. This improved alignment reduces the complexity for customers when interacting with multiple businesses within 3M, creating a better customer experience. 3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. This dual credit is based on which business segment provides customer account activity with respect to a particular product sold in the U.S. The alignment of U.S. customer accounts to fewer, more focused sales districts changed the attribution of dual credit across 3M’s business segments.

~~Business segment information presented~~Information provided herein reflects the impact of these changes for all periods presented. 3M manages its operations in ~~five~~four business segments. The reportable segments are ~~Industrial;~~ Safety and ~~Graphics; Electronics~~Industrial; Transportation and ~~Energy;~~Electronics; Health Care; and Consumer.

Corporate and Unallocated:

In addition to these ~~five~~four business segments, 3M assigns certain costs to “Corporate and Unallocated,” which is presented separately in the preceding business segments table and in Note ~~14.~~15. Corporate and Unallocated operating income (loss) includes ~~a variety~~“corporate special items” and “other corporate expense-net”. Corporate special items include net costs for significant litigation impacting operating income (loss) associated with PFAS-related other environmental and Combat Arms Earplugs matters. In addition, during the voluntary chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023—see Note 14) costs associated with the Aearo portion of ~~miscellaneous~~respirator mask/asbestos matters were also included in corporate special items. Prior to the bankruptcy, costs associated with Combat Arms Earplugs matters were not included in the Corporate net costs for significant litigation special item, instead being reflected in the Safety and Industrial business segment. Corporate special items also include divestiture costs, gain/loss on business divestitures (see Note 3), divestiture-related restructuring costs (see Note 5), and Russia exit costs/benefits (see Note 13). Divestiture costs include costs related to separating and divesting substantially an entire business segment of 3M following public announcement of its intended divestiture. Other corporate expense-net includes items such as net costs related to limited unallocated corporate ~~investment gains~~staff and centrally managed material resource centers of expertise costs, corporate philanthropic activity, gains/losses ~~certain derivative gains~~from sales of property, plant and ~~losses, certain insurance-related gains~~equipment and ~~losses, certain litigation~~other assets, and ~~environmental expenses, corporate restructuring charges and certain under- or over-absorbed~~other net costs ~~(e.g. pension, stock-based compensation)~~ that ~~the Company determines~~3M may choose not to allocate directly to its business segments. Other corporate expense-net also includes costs and income from transition supply, manufacturing and service arrangements with Neogen Corporation following the 2022 split-off of 3M's Food Safety business. Items classified as revenue from this activity are included in Corporate and Unallocated net sales. Because ~~this category~~Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

Corporate and Unallocated operating expenses increased ~~by $35 million and $36 million~~ in the ~~third~~second quarter and first ~~nine~~six months of ~~2017, respectively,~~2023, when compared to the same period last year. ~~In both~~The subsections below provide additional information.

Corporate Special Items

Refer to the ~~first~~Certain amounts adjusted for special items - (non-GAAP measures) section for additional details on the impact of special items and ~~second quarters~~to Note 15 for additional information on the components of ~~2017,~~corporate special items. Corporate special item net costs increased year-over-year primarily due to increased net costs for significant litigation as a ~~portion~~result of the ~~severance actions were reflected in Corporate and Unallocated. In addition, 3M’s defined benefit pension and postretirement expense allocation~~$10.3 billion pre-tax charge related to ~~Corporate and Unallocated increased by $8 million and $27 million, respectively,~~the proposed settlement agreement announced in the ~~third~~second quarter of 2023 with public water systems in the United States regarding PFAS (see Note 14) and divestiture costs.

Other Corporate Expense - Net

Other corporate operating expenses, net, increased in the second quarter and first ~~nine~~six months of ~~2017~~2023, when compared to the same ~~periods~~period last year.

The year-on-year increase was primarily due to higher pre-tax restructuring charges (see Note 5).

~~Table of Contents~~

Operating Business Segments:

Information related to 3M’s business segments ~~for the third quarter and first nine months of 2017 and 2016~~ is presented in the tables that ~~follow. Organic local-currency~~follow with additional context in the corresponding narrative below the tables.

Refer to 3M's 2022 Annual Report on Form 10-K, Item 1, Business, for discussion of 3M products that are included in each business segment.

Table of Contents

Safety and Industrial Business:


	Three months ended June 30,					Six months ended June 30,
	2023			2022		2023			2022
Sales (millions)	$	2,765		$	2,924	$	5,544		$	5,975
Sales change analysis:
Organic sales	(4.6)		%			(5.3)		%


Translation	(0.9)					(1.9)
Total sales change	(5.5)		%			(7.2)		%

Business segment operating income (loss) (millions)	$	534		$	(707)	$	1,135		$	(80)
Percent change	(175.6)		%			N/M
Percent of sales	19.3		%	(24.2) %		20.5		%	(1.3) %

Adjusted business segment operating income (millions) (non-GAAP measure)	$	614		$	630	$	1,176		$	1,320
Percent change	(2.4)		%			(10.9)		%
Percent of sales	22.2		%	21.5 %		21.2		%	22.1 %

The preceding table also displays business segment operating income (loss) information adjusted for special items. For Safety and Industrial these adjustments include net costs related to respirator mask/asbestos (Aearo-related and non-Aearo related). During the voluntary Aearo chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023 —see Note 14), net costs related to Aearo-respirator mask/asbestos matters were reflected as corporate special items in Corporate and Unallocated while those associated with non-Aearo respirator mask/asbestos matters continued to be reflected as special items in the Safety and Industrial business segment. Prior to the bankruptcy, costs associated with Combat Arms Earplugs matters were reflected in the Safety and Industrial business segment (rather than reflected in Corporate and Unallocated--see note 15 for additional information). Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section for additional details.

Second quarter 2023 results:

Sales in Safety and Industrial were down 5.5 percent in U.S. dollars.

On an organic sales ~~include both~~basis:

•Sales increased in roofing granules, and automotive aftermarket and decreased in closure and masking systems, personal safety, industrial adhesives and tapes, abrasives and electrical markets.

•Growth was held back by disposable respirator sales decline within personal safety (which negatively impacted year-on-year second quarter organic growth by 4.8 percentage points); declines in closure and masking systems due to slowdown in packaging and shipping activity; and declines within industrial adhesives and tapes from continued end-market softness in electronics.

Business segment operating income (loss) margins increased year-on-year primarily due to lower special item costs for significant litigation. 2022 was impacted by a pre-tax charge in the second quarter of approximately $1.2 billion related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14). In addition, year-on-year margins increased from productivity actions, strong spending discipline, and pricing which more than offset the decline driven by lower sales volume, ~~impacts plus selling price~~restructuring costs, and inflation impacts. ~~Acquisition impacts, if any, are measured separately~~Adjusting for special items (non-GAAP measure), business segment operating income margins increased year-on-year as displayed above.

Table of Contents

First six months 2023 results:

Sales in Safety and Industrial were down 7.2 percent in U.S. dollars.

On an organic sales basis:

•Sales increased in automotive aftermarket, electrical markets, roofing granules, and abrasives and decreased in personal safety, industrial adhesives and tapes, and closure and masking systems.

•Growth was held back by the disposable respirator sales decline within personal safety along with the exit of Russia (which, together, negatively impacted year-on-year organic growth by 7.3 percentage points) for the first ~~twelve~~six months ~~post-transaction.~~ of 2023; declines within industrial adhesives and tapes due to consumer electronics softness, closure and masking systems was down as consumers pulled back on discretionary spending impacting e-commerce shipments (slowing down in packaging and shipping activity).

Business segment operating income (loss) margins increased year-on-year primarily due to lower special item costs for significant litigation. 2022 was impacted by a pre-tax charge in the second quarter of approximately $1.2 billion related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14). Margins were also impacted by aggressive spending discipline, pricing and productivity actions which were more than offset by the lower sales volume, restructuring costs, inflation impacts, investments in the business and China COVID-related challenges. Adjusting for special item costs for significant litigation (non-GAAP measure), business segment operating income margins decreased year-on-year as displayed above.

Transportation and Electronics Business:


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Sales (millions)	$	2,191		$	2,268		$	4,241		$	4,608
Sales change analysis:
Organic sales	(1.3)		%				(4.7)		%
Acquisitions	0.5		%				0.2
Divestitures	(1.3)						(1.1)
Translation	(1.3)						(2.4)
Total sales change	(3.4)		%				(8.0)		%

Business segment operating income (millions)	$	410		$	475		$	704		$	939
Percent change	(13.8)		%				(25.1)		%
Percent of sales	18.7		%	21.0		%	16.6		%	20.4		%

Adjusted sales (millions) (non-GAAP measure)	$	1,859		$	1,950		$	3,564		$	3,970
Sales change analysis:
Organic sales	(2.4)		%				(7.0)		%
Acquisitions	0.6						0.3
Divestitures	(1.5)						(1.3)
Translation	(1.4)						(2.2)
Total sales change	(4.7)		%				(10.2)		%

Adjusted business segment operating income (millions) (non-GAAP measure)	$	369		$	455		$	653		$	903
Percent change	(19.3)		%				(27.8)		%
Percent of sales	19.8		%	23.4		%	18.3		%	22.8		%

The ~~divestiture impacts, if any, foreign currency translation impacts~~preceding table also displays business segment sales (and sales change) and ~~total~~operating income (loss) information adjusted for special items. For Transportation and Electronics these adjustments include the sales ~~change are also provided for each business segment. Any references~~and estimates of income regarding PFAS manufactured products that 3M plans to ~~EMEA relate to Europe, Middle East and Africa on a combined basis.~~

exit by the end of 2025. Refer to the ~~preceding “Sales and operating income by geographic area”~~Certain amounts adjusted for special items - (non-GAAP measures) section for ~~organic local-currency sales growth by business segment within major geographic areas.~~

~~Industrial Business:~~

additional details.

Three months ended

Nine months ended

September 30,

September 30,


2017

2016

2017

2016

Sales (millions)

$
2,764

$
2,603

$
8,193

$
7,856

Sales change analysis:

Organic local-currency

6.1
%

(1.3)
%

5.2
%

(1.5)
%

Acquisitions

—

1.6

—

2.1

Divestitures

(0.6)

(0.2)

(0.6)

(0.2)

Translation

0.7

0.7

(0.3)

(1.2)

Total sales change

6.2
%

0.8
%

4.3
%

(0.8)
%

Operating income (millions)

$
614

$
595

$
1,762

$
1,837

Percent change

3.1
%

1.9
%

(4.1)
%

2.2
%

Percent of sales

22.2
%

22.9
%

21.5
%

23.4
%

~~The Industrial segment serves a broad range~~

Table of markets, such as automotive original equipment manufacturer (OEM) and automotive aftermarket (auto body shops and retail), electronics, appliance, paper and printing, packaging, food and beverage, and construction. Industrial products include tapes, a wide variety of coated, non-woven and bonded abrasives, adhesives, advanced ceramics, sealants, specialty materials, 3M purification (filtration products), closure systems for personal hygiene products, acoustic systems products, and components and products that are used in the manufacture, repair and maintenance of automotive, marine, aircraft and specialty vehicles. 3M is also a leading global supplier of precision grinding technology serving customers in the area of hard-to-grind precision applications in industrial, automotive, aircraft and cutting tools. 3M develops and produces advanced technical ceramics for demanding applications in the automotive, oil and gas, solar, industrial, electronics and defense industries.

~~Third Quarter 2017~~Contents

Second quarter 2023 results:

Sales in ~~Industrial totaled $2.8 billion, up 6.2~~Transportation and Electronics were down 3.4 percent in U.S. dollars. ~~Organic local-currency~~Adjusting for special item PFAS manufactured products (non-GAAP measure), sales ~~increased 6.1~~were down 4.7 percent ~~divestitures reduced sales by 0.6 percent, and foreign currency translation increased sales by 0.7 percent.~~

in U.S. dollars.

On an organic ~~local-currency~~ sales basis:

~~Sales grew in all businesses, led by advanced materials, industrial adhesives and tapes, and separations and purification sciences.~~

~~Abrasives, and automotive and aerospace solutions also showed positive growth, with strong performance~~•Sales increased in automotive ~~OEM platforms.~~

~~Acquisitions~~ and ~~divestitures:~~

~~In October 2016, 3M sold the assets of its temporary protective films business.~~

aerospace, transportation safety, and commercial solutions, were flat in advanced materials and decreased in electronics.

~~In January 2016, 3M completed its sale of the assets of 3M’s pressurized polyurethane foam adhesives business (formerly known as Polyfoam).~~

•Growth continued to be held back by soft end-market demand for electronics partially offset by growth in automotive and aerospace, which outpaced global car and light truck builds.

Acquisitions/divestitures:

•Divestiture and acquisition impacts relate to lost/gained Transportation and Electronics sales year-on-year from the Aearo Entities. In the third quarter of 2022, 3M deconsolidated the Aearo Entities and, in the second quarter of 2023, reconsolidated those entities (discussed in Note 14). For each of the 12-months post-deconsolidation and post-reconsolidation, impacts are each reflected separately as divestiture and acquisition, respectively.

~~Table of Contents~~

Business segment operating income margins decreased year-on-year from sales volume declines, restructuring costs, and inflation impacts partially offset by benefits from strong spending discipline, productivity actions, and pricing. Adjusting for special item PFAS manufactured products (non-GAAP measure), business segment operating income margins decreased year-on-year as displayed above.

Acquisition sales growth in 2016 related to the August 2015 acquisition of Membrana, a leading provider of microporous membranes and modules for filtration in the life sciences, industrial, and specialty segments.

~~Operating income:~~

~~Operating income margins decreased 0.7 percentage points, as third quarter footprint and portfolio actions reduced year-on-year operating income margins by 0.4 percentage points.~~

First ~~Nine Months 2017~~six months 2023 results:

Sales in ~~Industrial totaled $8.2 billion, up 4.3~~Transportation and Electronics were down 8.0 percent in U.S. dollars. ~~Organic local-currency~~Adjusting for special item PFAS manufactured products (non-GAAP measure), sales ~~increased 5.2~~were down 10.2 percent ~~divestitures reduced sales by 0.6 percent, and foreign currency translation reduced sales by 0.3 percent.~~

in U.S. dollars.

On an organic ~~local-currency~~ sales basis:

~~Sales grew~~•Sales increased in ~~all businesses, led by advanced materials,~~ automotive ~~and aerospace solutions, and industrial adhesives and tapes.~~

~~Acquisitions~~ and ~~divestitures:~~

~~In October 2016, 3M sold the assets of its temporary protective films business.~~

aerospace, transportation safety, commercial solutions, and advanced materials and decreased in electronics.

~~In January 2016, 3M completed its sale of the assets of 3M’s pressurized polyurethane foam adhesives business (formerly known as Polyfoam).~~

•Growth continued to be held back by consumer electronics end-market weakness.

Acquisitions/divestitures:

~~Operating income:~~

Operating income margins decreased 1.9 percentage points, as divestiture impacts related to the first quarter 2016 sale of the Polyfoam business resulted in a net year-on-year operating income margin reduction of 0.4 percentage points. In addition, incremental strategic investments decreased first nine months margins by 0.9 percentage points.

~~Safety~~•Divestiture and ~~Graphics Business:~~

Three months ended

Nine months ended

September 30,

September 30,


2017

2016

2017

2016

Sales (millions)

$
1,529

$
1,500

$
4,603

$
4,538

Sales change analysis:

Organic local-currency

6.0
%

1.5
%

4.6
%

2.1
%

Acquisitions

—

2.0

—

5.1

Divestitures

(4.9)

(2.1)

(3.0)

(2.2)

Translation

0.8

0.4

(0.2)

(1.9)

Total sales change

1.9
%

1.8
%

1.4
%

3.1
%

Operating income (millions)

$
410

$
372

$
1,661

$
1,152

Percent change

10.5
%

11.7
%

44.2
%

9.4
%

Percent of sales

26.8
%

24.8
%

36.1
%

25.4
%

~~The Safety~~acquisition impacts relate to lost/gained Transportation and ~~Graphics~~Electronics sales year-on-year from the Aearo Entities. In the third quarter of 2022, 3M deconsolidated the Aearo Entities and, in the second quarter of 2023, reconsolidated those entities (discussed in Note 14). For each of the 12-months post-deconsolidation and post-reconsolidation, impacts are each reflected separately as divestiture and acquisition, respectively.

Business segment ~~serves a broad range of markets that increase~~operating income margins decreased year-on-year from lower sales volumes, inflation impacts, investments in the ~~safety, security~~business, restructuring costs, manufacturing and supply chain headwinds and China COVID-related challenges partially offset by benefits from aggressive spending discipline, pricing and productivity ~~of people, facilities and systems. Major product offerings include personal protection products, such~~actions. Adjusting for special item PFAS manufacturing exit costs (non-GAAP measure), business segment operating income margins decreased year-on-year as respiratory, hearing, eye and fall protection equipment; traffic safety solutions, such as retroreflective sign sheeting; commercial solutions, including commercial graphics sheeting and systems, architectural design solutions for surfaces, and cleaning and protection products for commercial establishments; and roofing granules for asphalt shingles.

displayed above.

Table of Contents

~~Third Quarter 2017 results:~~

Sales in Safety and Graphics totaled $1.5 billion, up 1.9 percent in U.S. dollars. Organic local-currency sales increased 6.0 percent, divestitures reduced sales by 4.9 percent, and foreign currency translation increased sales by 0.8 percent.

~~On an organic local-currency sales basis:~~

~~Sales increases were led by personal safety, which continued to experience strong demand.~~

~~Sales also increased in roofing granules and transportation safety, while commercial solutions declined.~~

~~Acquisitions and divestitures:~~

~~Acquisition sales growth in 2016 reflected the acquisition of Capital Safety in August 2015. Capital Safety is a leading global provider of fall protection equipment.~~

~~In January 2017, 3M sold its safety prescription eyewear business.~~

In May 2017, 3M closed on the sale and transfer of control of its identity management business. In June 2017, 3M completed the sale of its tolling and automated license/number plate recognition business.

~~Operating income:~~

Operating income margins increased 2.0 percentage points, benefiting from higher organic sales volume, partially offset by third quarter footprint and portfolio actions, which resulted in a year-on-year operating income margin reduction of 0.6 percentage points.

~~First Nine Months 2017 results:~~

Sales in Safety and Graphics totaled $4.6 billion, up 1.4 percent in U.S. dollars. Organic local-currency sales increased 4.6 percent, divestitures reduced sales by 3.0 percent, and foreign currency translation reduced sales by 0.2 percent.

~~On an organic local-currency sales basis:~~

~~Sales growth was led by personal safety.~~

~~Roofing granules and transportation safety showed positive growth, while commercial solutions was flat.~~

~~Acquisitions and divestitures:~~

~~Acquisition sales growth in 2016 reflected the acquisition of Capital Safety in August 2015. Capital Safety is a leading global provider of fall protection equipment.~~

~~In the first quarter of 2016, 3M divested the remainder of the library systems business.~~

~~In January 2017, 3M sold its safety prescription eyewear business.~~

In the second quarter of 2017, 3M finalized the sale of its identity management business and tolling and automated license/number plate recognition business. 3M recorded a pre-tax gain of approximately $461 million as a result of these two divestitures.

~~Operating income:~~

Operating income margins increased 10.7 percentage points, largely driven by year-on-year divestiture gains that were partially offset by acquisition charges and incremental strategic investments, which combined resulted in a net operating income margin benefit of 9.7 percentage points.

In October 2017, 3M completed the acquisition of the underlying legal entities and associated assets of Scott Safety, which is headquartered in Monroe, North Carolina, from Johnson Controls for $2.0 billion, net of closing and other adjustments. This business will be reported within the Company’s Safety and Graphics business. Refer to Note 2 for additional details.

Also in October 2017, 3M completed the sale of its electronic monitoring business. The Company expects to reflect a pre-tax gain of approximately $100 million in the fourth quarter of 2017 as a result of this divestiture; which will be reported within the Safety and Graphics business. Refer to Note 2 for additional details.

~~Table of Contents~~

Health Care Business:

Three months ended

Nine months ended


September 30,

September 30,


2017

2016

2017

2016


Sales (millions)

$
1,476

$
1,371

$
4,339

$
4,176

Sales change analysis:

Organic local-currency

6.9
%

1.6
%

4.1
%

4.3
%

Acquisitions

—

—

—

0.3

Translation

0.8

(0.4)

(0.2)

(1.8)

Total sales change

7.7
%

1.2
%

3.9
%

2.8
%

Operating income (millions)

$
471

$
431

$
1,317

$
1,350

Percent change

9.3
%

(0.5)
%

(2.4)
%

5.0
%

Percent of sales

31.9
%

31.5
%

30.4
%

32.3
%

The Health Care segment serves markets that include medical clinics and hospitals, pharmaceuticals, dental and orthodontic practitioners, health information systems, and food manufacturing and testing. Products and services provided to these and other markets include medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, oral care solutions (dental and orthodontic products), health information systems, and food safety products.

~~Third Quarter 2017~~


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Sales (millions)	$	2,075		$	2,179		$	4,085		$	4,307
Sales change analysis:
Organic sales	0.1		%				0.8		%

Divestitures	(4.1)						(4.2)
Translation	(0.8)						(1.8)
Total sales change	(4.8)		%				(5.2)		%

Business segment operating income (millions)	$	411		$	492		$	771		$	937
Percent change	(16.4)		%				(17.7)		%
Percent of sales	19.8		%	22.6		%	18.9		%	21.8		%

Second quarter 2023 results:

Sales in Health Care ~~totaled $1.5 billion, up 7.7~~were down 4.8 percent in U.S. dollars. ~~Organic local-currency sales increased 6.9 percent and foreign currency translation increased sales by 0.8 percent.~~

On an organic ~~local-currency~~ sales basis:

Sales increased in all businesses, led by drug delivery systems, food safety, medical consumables (which is comprised of the critical and chronic care business and infection prevention business), and oral care.

~~Sales also increased in health information systems.~~

•Sales increased in oral care, were flat in medical solutions, and decreased in separation and purification and health information systems.

~~In developing markets, Health Care organic local-currency sales growth was led by China/Hong Kong and Latin America.~~

•Growth was held back by declines in separation and purification and health information systems, which continued to be negatively impacted by lower post-COVID-related biopharma demand and ongoing stress on hospital budgets.

~~Acquisitions:~~

~~In September 2017, 3M acquired Elution Technologies, LLC, a manufacturer of food safety test kids. Refer to Note 2 for additional details.~~

Divestitures:

~~Operating income:~~

Operating income margins increased 0.4 percentage points year-on-year, helped by organic local-currency sales growth. Incremental strategic investments, primarily related to accelerating future growth opportunities, reduced margins by 0.3 percentage points.

•Divestiture impact relates to the lost sales year-on-year from the Food Safety Division split-off transaction in the third quarter of 2022.

Business segment operating income margins decreased year-on-year due to lower sales volume, restructuring costs, and inflation impacts partially offset by benefits from strong spending discipline, productivity actions, and pricing.

As discussed in Note 3, in the third quarter of 2022, 3M announced its intention to spin off the Health Care business as a separate public company. 3M expects to initially retain a 19.9% ownership position in the Health Care business. In addition, as discussed in Note 3, in the second quarter of 2023, 3M entered into agreements to sell the assets associated with its dental local anesthetic business That transaction is expected to close in the third quarter of 2023.

First ~~Nine Months 2017~~six months 2023 results:

Sales in Health Care ~~totaled $4.3 billion, up 3.9~~were down 5.2 percent in U.S. dollars. ~~Organic local-currency sales increased 4.1 percent and foreign currency translation reduced sales by 0.2 percent.~~

On an organic ~~local-currency~~ sales basis:

~~Sales increased in drug delivery systems, food safety, medical consumables (which is comprised of the critical and chronic care and infection prevention businesses) and oral care.~~

~~Sales declined slightly in health information systems.~~

•Sales increased in medical solutions and oral care and decreased in separation and purification and health information systems.

•Growth was held back by declines in separation and purification due to the normalization of post-COVID-related biopharma demand, declines in health information systems from ongoing stress on hospital budgets along with overall headwinds from the exit of Russia.

Divestitures:

•Divestiture impact relates to the lost sales year-on-year from the divestiture from the Food Safety Division split-off transaction and combination with Neogen completed in the third quarter of 2022.

Business segment operating income margins decreased year-on-year due to due to manufacturing and supply chain headwinds, inflation impacts, investments in the business and restructuring costs partially offset by benefits from aggressive spending discipline, pricing and productivity actions.

Table of Contents

~~Acquisitions:~~

Acquisition sales growth in 2016 related to the March 2015 purchase of Ivera Medical Corp. Ivera is a manufacturer of health care products that disinfect and protect devices used for access into a patient’s bloodstream.

Consumer Business:

~~In September 2017, 3M acquired Elution Technologies, LLC, a manufacturer of food safety test kids.~~

~~Operating income:~~

Operating income margins decreased 1.9 percent year-on-year, as incremental strategic investments, primarily related to accelerating future growth opportunities, reduced margins by 1.1 percentage points.


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Sales (millions)	$	1,293		$	1,330		$	2,485		$	2,639
Sales change analysis:
Organic sales	(2.2)		%				(4.5)		%

Divestitures	—						(0.1)
Translation	(0.5)						(1.2)
Total sales change	(2.7)		%				(5.8)		%

Business segment operating income (millions)	$	235		$	248		$	414		$	467
Percent change	(5.1)		%				(11.4)		%
Percent of sales	18.2		%	18.6		%	16.7		%	17.7		%

~~Electronics and Energy Business:~~

Three months ended

Nine months ended

September 30,

September 30,


2017

2016

2017

2016

Sales (millions)

$
1,414

$
1,250

$
3,838

$
3,468

Sales change analysis:

Organic local-currency

13.2
%

(7.9)
%

11.0
%

(10.0)
%

Divestitures

(0.1)

—

(0.2)

—

Translation

—

0.6

(0.2)

(0.6)

Total sales change

13.1
%

(7.3)
%

10.6
%

(10.6)
%

Operating income (millions)

$
394

$
304

$
920

$
716

Percent change

29.9
%

(9.5)
%

28.5
%

(18.4)
%

Percent of sales

27.9
%

24.3
%

24.0
%

20.6
%

The Electronics and Energy segment includes solutions that improve the dependability, cost-effectiveness, and performance of electronic devices; electrical products, including infrastructure protection; telecommunications networks; and power generation and distribution. This segment’s electronics solutions include optical film solutions for the electronic display industry; high-performance fluids and abrasives; high-temperature and display tapes; flexible circuits, which use electronic packaging and interconnection technology; and touch systems products. This segment’s energy solutions include pressure sensitive tapes and resins; electrical insulation; infrastructure products that provide both protection and detection solutions; a wide array of fiber-optic and copper-based telecommunications systems; and renewable energy component solutions for the solar and wind power industries.

~~Third Quarter 2017~~

Second quarter 2023 results:

Sales in ~~Electronics and Energy totaled $1.4 billion, up 13.1~~Consumer were down 2.7 percent in U.S. dollars. ~~Organic local-currency sales increased 13.2 percent, divestitures reduced sales by 0.1 percent, and foreign currency translation was flat.~~

~~Total sales within the electronics-related businesses were up 18 percent and energy-related businesses sales were up 3 percent. Total sales increased 19 percent in Asia Pacific.~~

On an organic ~~local-currency~~ sales basis:

Sales increased 18 percent in 3M’s electronics-related businesses, with increases in both display materials and systems and electronics materials solutions, as the businesses drove increased inclusion in OEM platforms globally, including semiconductor manufacturing, electronic assembly, data center and automotive electrification.

~~Sales increased 2 percent in 3M’s energy-related businesses, as sales increases in electrical markets were partially offset by sales declines in telecommunications.~~

•Sales increased in home health and auto care, and decreased in stationery and office and home improvement.

~~Sales increased 20 percent in Asia Pacific, where 3M’s electronics business is concentrated.~~

•Growth was negatively impacted as discretionary spending trends on hardline categories remains soft.

Business segment operating income margins decreased year-on-year from lower sales volumes, restructuring costs, and inflation impacts, partially offset by benefits from strong spending discipline, productivity actions, and pricing.

First six months 2023 results:

Sales in Consumer were down 5.8 percent in U.S. dollars.

On an organic sales basis:

•Sales decreased in home improvement, home health and auto care, and stationery and office.

•Growth was negatively impacted as consumers have shifted their spending patterns to more non-discretionary items.

Business segment operating income margins decreased year-on-year from lower sales volumes, inflation impacts, investments, manufacturing and supply chain headwinds, and restructuring costs partially offset by benefits from aggressive spending discipline, pricing and productivity actions.

Table of Contents

~~Divestitures:~~

~~In December 2016, 3M sold the assets of its cathode battery technology out-licensing business, with annual sales of approximately $10 million.~~

~~Operating income:~~

Operating income margins increased 3.6 percentage points, driven by underlying productivity gains related to organic local-currency sales growth. Incremental strategic investments reduced margins by 0.3 percentage points.

~~First Nine Months 2017 results:~~

Sales in Electronics and Energy totaled $3.8 billion, up 10.6 percent in U.S. dollars. Organic local-currency sales increased 11.0 percent, divestitures reduced sales by 0.2 percent, and foreign currency translation reduced sales by 0.2 percent.

~~Total sales within the electronics-related businesses were up 17 percent while energy-related businesses were flat. Total sales increased 17 percent in Asia Pacific.~~

~~On an organic local-currency sales basis:~~

Sales increased 17 percent in 3M’s electronics-related businesses, with increases in both display materials and systems and electronics materials solutions, as the businesses drove increased inclusion in OEM platforms in addition to strengthened demand in consumer electronics.

~~Sales were flat in 3M’s energy-related businesses, as sales growth in electrical markets was offset by declines in telecommunications.~~

~~Sales increased 18 percent in Asia Pacific, where 3M’s electronics business is concentrated.~~

~~Divestitures:~~

~~In December 2016, 3M sold the assets of its cathode battery technology out-licensing business, with annual sales of approximately $10 million.~~

~~Operating income:~~

Operating income margins increased 3.4 percentage points, as benefits from higher organic volume were partially offset by first nine months of 2017 footprint and portfolio actions. These actions resulted in a year-on-year operating income margin reduction of 1.9 percentage points.

~~Consumer Business:~~

Three months ended

Nine months ended


September 30,

September 30,


2017

2016

2017

2016


Sales (millions)

$
1,236

$
1,210

$
3,415

$
3,390

Sales change analysis:

Organic local-currency

1.9
%

2.9
%

0.5
%

2.7
%

Translation

0.3

1.1

0.2

(0.8)

Total sales change

2.2
%

4.0
%

0.7
%

1.9
%

Operating income (millions)

$
307

$
317

$
724

$
836

Percent change

(3.2)
%

8.2
%

(13.4)
%

5.5
%

Percent of sales

24.8
%

26.2
%

21.2
%

24.7
%

The Consumer segment serves markets that include consumer retail, office retail, office business to business, home improvement, drug and pharmacy retail, and other markets. Products in this segment include office supply products, stationery products, construction and home improvement products (do-it-yourself), home care products, protective material products, certain consumer retail personal safety products, and consumer health care products.

~~Table of Contents~~

~~Third Quarter 2017 results:~~

~~Sales in Consumer totaled $1.2 billion, up 2.2 percent in U.S. dollars. Organic local-currency sales increased 1.9 percent, while foreign currency translation increased sales by 0.3 percent.~~

~~On an organic local-currency sales basis:~~

~~Sales grew in consumer health care, home improvement, and home care.~~

~~Strong performance in consumer brands, such as Command~~TM ~~damage-free mounting, ScotchBlue~~TM ~~painter’s tape and Filtrete~~TM ~~home filtration products, helped drive organic growth year-on-year.~~

~~The stationery and office supplies business declined due to continued channel inventory adjustments, primarily in the U.S. office retail and wholesale market.~~

~~Operating income:~~

~~Operating income margins declined 1.4 percentage points year-on-year, in part due to incremental strategic investments, which reduced margins by 1.1 percentage points.~~

~~First Nine Months 2017 results:~~

~~Sales in Consumer totaled $3.4 billion, up 0.7 percent in U.S. dollars. Organic local-currency sales increased 0.5 percent, while foreign currency translation increased sales by 0.2 percent.~~

~~On an organic local-currency sales basis:~~

~~Sales grew in home improvement, consumer health care, and home care.~~

~~The stationery and office supplies business declined due to channel inventory adjustments, primarily in the U.S. office retail and wholesale market.~~

~~Operating income:~~

~~Operating income margins declined 3.5 percentage points year-on-year, in part due to incremental strategic investments, which reduced margins by 2.6 percentage points.~~

FINANCIAL CONDITION AND LIQUIDITY

~~3M continues its transition to a better-optimized capital structure and is adding leverage at a measured pace.~~

The strength and stability of 3M’s business model and strong free cash flow capability, together with proven capital markets access, ~~enable~~provide financial flexibility to deploy capital in accordance with the ~~Company to implement this strategy.~~Company's stated priorities and meet needs associated with contractual commitments and other obligations. Investing in 3M’s ~~businesses~~business to drive organic growth and deliver strong returns on invested capital remains the first priority for capital ~~deployment, including~~deployment. This includes research and development, capital expenditures, and commercialization capability. ~~Investment in organic growth will be supplemented by complementary acquisitions.~~The Company also continues to actively manage its portfolio through acquisitions and divestitures to maximize value for shareholders. 3M ~~will also~~expects to continue ~~to return~~returning cash to shareholders through dividends and share repurchases. ~~Sources for~~To fund cash ~~availability~~needs in the United States, ~~such as~~the Company relies on ongoing cash flow from U.S. operations, ~~and~~ access to capital markets ~~have historically been sufficient~~and repatriation of the earnings of its foreign affiliates that are not considered to ~~fund dividend payments to shareholders and share repurchases, as well as funding U.S. acquisitions and other items as needed.~~be permanently reinvested. For those international earnings still considered to be reinvested indefinitely, the Company currently has no plans or intentions to repatriate these funds for U.S. operations. ~~However, if these international funds are needed for operations in the U.S., 3M would be required to accrue and pay U.S. taxes to repatriate them.~~ See Note 810 in ~~3M’s Current~~3M's 2022 Annual Report on Form ~~8-K dated May 4, 2017,~~10-K for further information on earnings considered to be reinvested indefinitely.

~~3M’s~~

3M maintains a strong liquidity profile. The Company’s primary short-term liquidity needs are met through cash on hand and U.S. commercial paper issuances. 3M believes it will have continuous access to the commercial paper market. 3M’s commercial paper program permits the Company to have a maximum of $5 billion outstanding with a maximum maturity of 397 days from date of issuance. ~~At September 30, 2017, there was approximately $225 million~~The Company had $1.8 billion in commercial paper ~~issued and outstanding.~~

~~Table~~outstanding at June 30, 2023, compared to no commercial paper outstanding as of ~~Contents~~

~~Total Debt:~~

~~The Company’s total debt was approximately $11.7 billion at both September 30, 2017 and~~ December 31, 2016. In May 2016, 3M issued 500 million Euro aggregate principal amount of 5.75-year fixed rate medium-term notes due February 2022 with a coupon rate of 0.375% and 500 million Euro aggregate principal amount of 15-year fixed rate medium-term notes due 2031 with a coupon rate of 1.50%. In September 2016, 3M issued $600 million aggregate principal amount of five-year fixed rate medium-term notes due 2021 with a coupon rate of 1.625%, $650 million aggregate principal amount of 10-year fixed rate medium-term notes due 2026 with a coupon rate of 2.250%, and $500 million aggregate principal amount of 30-year fixed rate medium-term notes due 2046 with a coupon rate of 3.125%. All of these 2016 issuances were under the medium-term notes program (Series F).

In September 2016, 3M repaid $1 billion aggregate principal amount of fixed rate medium-term notes that matured. In June 2017, 3M repaid $650 million aggregate principal amount of fixed rate medium-term notes that matured.

In October 2017, 3M issued $650 million aggregate principal amount of 5.5-year fixed rate medium-term notes due 2023 with a coupon rate of 2.25%, $850 million aggregate principal amount of 10-year fixed rate medium-term notes due 2027 with a coupon rate of 2.875%, and $500 million aggregate principal amount of 30-year fixed rate medium-term notes due 2047 with a coupon rate of 3.625%.

~~The proceeds from the debt issuance will be used to fund the notes repurchase described below, the purchase of Scott Safety (refer to Note 2 for details), and for general corporate purposes.~~

In October 2017, 3M, via cash tender offers, repurchased $305 million aggregate principal amount of its outstanding notes. This included $110 million of its $330 million principal amount of 6.375% notes due 2028 and $195 million of its $750 million principal amount of 5.70% notes due 2037. The Company will reflect an early debt extinguishment charge of approximately $95 million in the fourth quarter of 2017 within interest expense associated with the differential between the carrying value and the amount paid to acquire the tendered notes and related expenses.

As of September 30, 2017, the total amount of debt issued as part of the medium-term notes program (Series F), inclusive of debt issued in 2011, 2012, 2014, 2015 and the 2016 debt referenced above (excluding the October 2017 issuance above), is approximately $11.1 billion (utilizing the foreign exchange rates applicable at the time of issuance for the Euro denominated debt). Information with respect to long-term debt issuances and maturities for the periods presented is included in Note 10 of 3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016 Annual Report on Form 10-K) .

2022.

Total debt:

The strength of 3M’s ~~capital structure~~credit profile and significant ongoing cash flows provide 3M proven access to capital markets. Additionally, the Company’s debt maturity profile is staggered to help ensure refinancing needs in any given year are reasonable in proportion to the total portfolio. As of June 2023, 3M ~~currently~~ has ~~an AA-~~a credit rating ~~with a stable~~of A2, negative outlook from ~~Standard & Poor’s~~Moody's Investors Service, and ~~has an A1~~a credit rating ~~with a stable outlook~~of A-, CreditWatch negative from ~~Moody’s Investors Service.~~ S&P Global Ratings.

The Company’s ~~ongoing~~total debt at June 30, 2023 was consistent when compared to December 31, 2022 as maturities of $1.8 billion of fixed-rate notes were offset by issuances of commercial paper of $1.8 billion. For discussion of repayments of and proceeds from debt refer to the following Cash Flows from Financing Activities section.

In July 2017, the United Kingdom’s Financial Conduct Authority announced that it would no longer require banks to submit rates for the London InterBank Offered Rate (“LIBOR”) after 2021. In November 2020, the ICE Benchmark Administration (IBA), LIBOR’s administrator, proposed extending the publication of USD LIBOR through June 2023. Subsequently, in March of 2021, IBA ceased publication of certain LIBOR rates after December 31, 2021. USD LIBOR rates that did not cease on December 31, 2021 will continue to be published through June 30, 2023, and certain USD LIBOR rates subject to a synthetic methodology will continue to be published until September 2024. The Company anticipates its debt securities, bank facilities, and derivative instruments that previously utilized LIBOR as the reference rate will transition to the Secured Overnight Financing Rate, or SOFR, as a ~~more optimized capital structure, financed with additional low-cost debt, could impact 3M’s credit rating in the future.~~

reference rate as necessary.

Effective February ~~24, 2017,~~8, 2023, the Company updated its “well-known seasoned issuer” (WKSI) shelf registration statement, which registers an indeterminate amount of debt or equity securities for future issuance and sale. This replaced 3M’s previous shelf registration dated ~~May 16, 2014.~~February 10, 2020. In May 2016, ~~in connection with the WKSI shelf,~~ 3M entered into an amended and restated distribution agreement relating to the future issuance and sale (from time to time) of the Company’s medium-term notes program (Series F), up to the aggregate principal amount of $18 billion, which was an increase from the previous aggregate principal amount up to $9 billion of the same Series.

As of June 30, 2023, the total amount of debt issued as part of the medium-term notes program (Series F), inclusive of debt issued in February 2019 and prior years is approximately $17.6 billion (utilizing the foreign exchange rates applicable at the time of issuance for the euro denominated debt). Information with respect to long-term debt issuances and maturities for the periods presented is included in Note 10 of this Form 10-Q and Note 12 in 3M's 2022 Annual Report on Form 10-K.

In ~~March 2016,~~May 2023, 3M ~~amended and restated its existing $2.25~~entered into a $4.25 billion five-year revolving credit facility expiring in ~~August 2019 to a $3.75 billion five-year~~2028; the facility was amended in July 2023. The revolving ~~credit facility expiring in March 2021. This~~ credit agreement includes a provision under which 3M may request an increase of up to ~~$1.25~~$1.0 billion (at ~~lenders’~~lender’s discretion), bringing the total facility up to ~~$5.0~~$5.25 billion. ~~This~~The agreement replaced the amended and restated $3.0 billion, five-year revolving credit agreement and the $1.25 billion 364-day credit facility isthat would have expired in November 2024 and November 2023, respectively. The credit facility was undrawn at ~~September~~June 30, ~~2017.~~2023. Under the ~~$3.75~~$4.25 billion credit ~~agreement,~~facility, the Company is required to maintain its EBITDA to Interest Ratio as of the end of each fiscal quarter at not

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less than 3.0 to 1. This is calculated ~~(as~~(based on amounts defined in the amended agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At ~~September~~June 30, ~~2017,~~2023, this ratio, reflecting the July 2023 amendment, was approximately 4217 to 1. Debt covenants do not restrict the payment of dividends. ~~Apart from the committed facilities, $290~~

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The Company also had $315 million in stand-alone letters of credit and bank guarantees ~~were also~~ issued and outstanding at ~~September~~June 30, ~~2017.~~2023. These ~~lines of credit~~instruments are utilized in connection with normal business activities.

Cash, ~~Cash Equivalents~~cash equivalents and ~~Marketable Securities:~~

marketable securities:

At ~~September~~June 30, ~~2017,~~2023, 3M had ~~$3.4~~$4.3 billion of cash, cash equivalents and marketable securities, of which approximately ~~$3.3~~$3.2 billion was held by the Company’s foreign subsidiaries and approximately ~~$140 million~~$1.1 billion was held byin the United States. These balances are invested in bank instruments and other high-quality fixed income securities. At December 31, ~~2016,~~2022, 3M had $3.9 billion of cash, cash equivalents and marketable securities, of which approximately $2.7 billion was held by the Company’s foreign subsidiaries and $1.2 billion was held by the United ~~States totaled approximately $2.35 billion and $350 million, respectively.~~

States. The increase from December 31, 2022 primarily resulted from cash flow from operations.

Net Debt (non-GAAP measure):

Net debt is not defined under U.S. GAAP and may not be computed the same as similarly titled measures used by other companies. The Company defines net debt as total debt less the total of cash, cash equivalents and current and long-term marketable securities. 3M believes net debt is meaningful to investors as 3M considers net debt and its components to be important indicators of liquidity and financial position. The following table provides net debt as of ~~September~~June 30, ~~2017,~~2023 and December 31, ~~2016.~~

2022.



(Millions)	September 30, 2017		December 31, 2016		Change		(Millions)	June 30, 2023		December 31, 2022		Change
Total debt	$	11,663	$	11,650	$	13	Total debt	$	15,987	$	15,939	$	48
Less: Cash, cash equivalents and marketable securities		3,434		2,695		739	Less: Cash, cash equivalents and marketable securities	4,337		3,916		421
Net debt (non-GAAP measure)	$	8,229	$	8,955	$	(726)	Net debt (non-GAAP measure)	$	11,650	$	12,023	$	(373)

Refer to the ~~first nine months of 2017, net debt decreased by $726 million to a net debt balance of $8.2 billion, impacted by the increase in cash~~preceding Total Debt and ~~cash equivalents~~Cash, Cash Equivalents and ~~marketable securities.~~

Marketable Securities sections for additional details.

Balance Sheet:

3M’s strong balance sheet and liquidity provide the Company with significant flexibility to ~~take advantage of~~fund its numerous opportunities going forward. The Company will continue to invest in its operations to drive growth, including continual review of acquisition opportunities.

The Company uses working capital measures that place emphasis and focus on certain working capital ~~assets. These measures include working capital,~~assets, such as accounts receivable ~~turns,~~ and inventory ~~turns.~~

activity.

Working ~~Capital~~capital (non-GAAP measure):



(Millions)		September 30, 2017		December 31, 2016		Change	(Millions)	June 30, 2023		December 31, 2022		Change
Current assets	$	13,656	$	11,726	$	1,930	Current assets	$	15,754	$	14,688	$	1,066
Less: Current liabilities		(6,598)		(6,219)		(379)	Less: Current liabilities	10,936		9,523		1,413
Working capital (non-GAAP measure)	$	7,058	$	5,507	$	1,551	Working capital (non-GAAP measure)	$	4,818	$	5,165	$	(347)

Various assets and liabilities, including cash and short-term debt, can fluctuate significantly from month to month depending on short-term liquidity needs. Working capital is not defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures used by other companies. The Company defines working capital as current assets minus current liabilities. Working capital increased $1.551 billion compared to December 31, 2016. Current asset balance changes increased working capital by $1.930 billion, driven by increases in accounts receivable, and inventories (discussed further below), plus increases in cash. Current liability balance changes decreased working capital by $379 million, largely due to increases in other current liabilities and accrued payroll,

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~~partially offset by decreases in short-term debt.~~ 3M believes working capital is meaningful to investors as a measure of operational efficiency and short-term financial health.

~~Accounts Receivable~~

Working capital decreased $0.3 billion compared with December 31, 2022. Balance changes in current assets increased working capital by $1.1 billion, driven largely by increases in cash and ~~Inventory Turns (non-GAAP measures):~~

~~Accounts receivable~~cash equivalents and ~~inventory turns are not defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures used~~accounts receivable. Balance changes in current liabilities decreased working capital by other companies. 3M defines accounts receivable turns as quarterly net sales multiplied by 4 divided by ending accounts receivable – net, and defines inventory turns as quarterly manufacturing cost multiplied by 4 divided by ending inventory. 3M believes accounts receivable turns is meaningful$1.4 billion, primarily due to investors as a measure of how efficiently the Company manages credit and collects from its customers. For inventory turns calculation purposes, manufacturing cost is defined as cost of sales less freight and engineering costs. 3M believes inventory turns is meaningful to investors as a measure of how quickly inventory is sold. Details of these calculations follow.

Accounts receivable turns (non-GAAP measure)

(Millions, except turns)

September 30, 2017

December 31, 2016

Quarterly net sales

$
8,172

$
7,329

Ending accounts receivable - net

$
5,156

$
4,392

Accounts receivable turns

6.34

6.67

Inventory turns (non-GAAP measure)

(Millions, except turns)

September 30, 2017

December 31, 2016

Quarterly cost of sales

$
4,045

$
3,716

Less: Freight and engineering

$
165

$
160

Manufacturing cost

$
3,880

$
3,556

Ending inventory

$
3,975

$
3,385

Inventory turns

3.91

4.20

Concerning accounts receivable, higher September 2017 sales compared to December 2016 sales contributed to the accounts receivable increase. On a seasonal basis, both accounts receivable and inventory turns are historically higher at year-end,increases in short-term borrowings driven by ~~lower year-end accounts receivable~~issuances of commercial paper and ~~inventory balances.~~

increases in other current liabilities.

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Cash Flows:

Cash flows from operating, investing and financing activities are provided in the tables that follow. Individual amounts in the Consolidated Statement of Cash Flows exclude the effects of acquisitions, divestitures and exchange rate impacts on cash and cash equivalents, which are presented ~~as separate line items within~~separately in the ~~statement of~~ cash flows. Thus, the amounts presented in the following operating, investing and financing activities tables reflect changes in balances from period to period adjusted for these effects.

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Cash Flows from Operating Activities:


	Nine months ended
	September 30,					Six months ended June 30,
(Millions)	2017		2016		(Millions)	2023		2022
Net income (loss) including noncontrolling interest					Net income (loss) including noncontrolling interest	$	(5,855)	$	1,385
Depreciation and amortization					Depreciation and amortization	915		921

Net income including noncontrolling interest	$	4,344	$	3,902
Depreciation and amortization		1,195		1,090
Company pension contributions		(311)		(320)
Company postretirement contributions		(3)		(3)
Company pension expense		207		144
Company postretirement expense		37		36

Company pension and postretirement contributions					Company pension and postretirement contributions	(57)		(80)
Company pension and postretirement expense					Company pension and postretirement expense	75		83
Stock-based compensation expense		266		244	Stock-based compensation expense	176		182
Gain on sale of businesses		(490)		(40)

Income taxes (deferred and accrued income taxes)		144		55	Income taxes (deferred and accrued income taxes)	(2,956)		(460)
Accounts receivable		(595)		(469)	Accounts receivable	(393)		(457)
Inventories		(436)		(15)	Inventories	101		(837)
Accounts payable		(25)		(107)	Accounts payable	135		401
Other — net		47		(64)	Other — net	10,643		1,000
Net cash provided by operating activities	$	4,380	$	4,453
Net cash provided by (used in) operating activities					Net cash provided by (used in) operating activities	$	2,784	$	2,138

Cash flows from operating activities can fluctuate significantly from period to period, as ~~pension funding decisions,~~working capital movements, tax timing differences and other items can significantly impact cash flows.

In the first ~~nine~~six months of ~~2017,~~2023, cash flows provided by operating activities ~~decreased $73~~increased $646 million compared to the same period last ~~year. Factors that decreased operating cash flows were increases in accounts receivable and inventories. The~~year, primarily driven by the combination of accounts receivable, inventories and accounts ~~payable increased working capital~~payable. Cumulatively, they decreased operating cash flow by ~~$1.056 billion in the first nine months of 2017, compared to the working capital increases of $591~~$157 million in the first ~~nine~~six months of ~~2016. Additional discussion on working capital changes is provided earlier~~2023, compared to operating cash flow decreasing by $893 million for these items in the ~~“Financial Condition~~first six months of 2022. The second quarter pre-tax charges of approximately $10.3 billion in 2023 related to the proposed settlement agreement with public water systems in the United States regarding PFAS and ~~Liquidity” section.~~

$1.2 billion in 2022 related to steps toward resolving Combat Arms Earplugs litigation (both discussed in Note 14) largely impacted the net income component above, with offsets in the other-net and deferred tax elements in each of those periods.

Cash Flows from Investing Activities:


	Nine months ended
	September 30,					Six months ended June 30,
(Millions)	2017		2016		(Millions)	2023		2022

Purchases of property, plant and equipment (PP&E)	$	(914)	$	(984)	Purchases of property, plant and equipment (PP&E)	$	(852)	$	(808)
Proceeds from sale of PP&E and other assets		18		18	Proceeds from sale of PP&E and other assets	23		56
Acquisitions, net of cash acquired		(12)		(17)	Acquisitions, net of cash acquired	—		—
Purchases and proceeds from maturities and sale of marketable securities and investments, net		(310)		(242)	Purchases and proceeds from maturities and sale of marketable securities and investments, net	170		(62)
Proceeds from sale of businesses, net of cash sold		862		56	Proceeds from sale of businesses, net of cash sold	3		13

Other — net		2		(4)	Other — net	37		(13)
Net cash used in investing activities	$	(354)	$	(1,173)
Net cash provided by (used in) investing activities					Net cash provided by (used in) investing activities	$	(619)	$	(814)

Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product demand and increasing manufacturing efficiency. The Company expects 2023 capital spending to be approximately $1.5 billion to $1.8 billion as 3M continues to invest in growth, productivity and sustainability.

3M records capital-related government grants earned as reductions to the cost of property, plant and equipment; and associated unpaid liabilities and grant proceeds receivable are considered non-cash changes in such balances for purposes of preparation of statement of cash flows.

3M invests in renewal and maintenance programs, which pertain to cost reduction, cycle time, maintaining and renewing current capacity, eliminating pollution, ~~reduction,~~ and compliance. Costs related to maintenance, ordinary repairs, and certain other items are expensed. 3M also invests in growth, which adds to capacity, driven by new ~~growth capacity,~~products, both through expansion of current facilities and ~~by building~~ new facilities. Finally, 3M also invests in ~~corporate~~other initiatives, such as information technology (IT), laboratory facilities, and ~~information technology (IT). The Company expects 2017 capital spending to be approximately $1.4 billion.~~

a continued focus on investments in sustainability.

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Refer to Note 23 for information on acquisitions and divestitures. The Company is actively considering additional acquisitions, investments and strategic alliances, and from time to time may also divest certain businesses. ~~Proceeds from sale of businesses in the first nine months of 2017 relate to the divestiture of the assets of the prescription safety~~

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~~eyewear, identity management, and tolling and automated license/number plate recognition businesses within the Safety and Graphics business segment.~~

Purchases of marketable securities and investments and proceeds from maturities and sale of marketable securities and investments are primarily attributable to ~~asset-backed securities,~~ certificates of deposit/time deposits, commercial paper, and other securities, which are classified as available-for-sale. Refer to Note 79 for more details about 3M’s diversified marketable securities portfolio. Purchases of investments include additional survivor benefit insurance, plus ~~cost method and~~investments in equity ~~investments.~~

securities.

Cash Flows from Financing Activities:


	Nine months ended
	September 30,					Six months ended June 30,
(Millions)	2017		2016		(Millions)	2023		2022

Change in short-term debt — net	$	60	$	(498)	Change in short-term debt — net	$	651	$	344
Repayment of debt (maturities greater than 90 days)		(650)		(992)	Repayment of debt (maturities greater than 90 days)	(1,802)		(1,179)
Proceeds from debt (maturities greater than 90 days)		—		2,832	Proceeds from debt (maturities greater than 90 days)	1,107		1
Total cash change in debt	$	(590)	$	1,342	Total cash change in debt	(44)		(834)
Purchases of treasury stock		(1,564)		(2,829)	Purchases of treasury stock	(29)		(773)
Proceeds from issuances of treasury stock pursuant to stock option and benefit plans		582		741	Proceeds from issuances of treasury stock pursuant to stock option and benefit plans	218		227
Dividends paid to shareholders		(2,104)		(2,014)	Dividends paid to shareholders	(1,655)		(1,700)
Other — net		(23)		(20)	Other — net	(9)		(22)
Net cash used in financing activities	$	(3,699)	$	(2,780)
Net cash provided by (used in) financing activities					Net cash provided by (used in) financing activities	$	(1,519)	$	(3,102)

Total debt was approximately ~~$11.7~~$16.0 billion at ~~both September~~June 30, ~~2017~~2023 and ~~year-end 2016. Changes~~$15.9 billion at December 31, 2022. During the first six months of 2023, maturities of $1.8 billion of fixed-rate notes were offset by issuances of commercial paper of $1.8 billion. The Company had $1.8 billion in ~~short-term debt includes the net impact~~commercial paper outstanding at June 30, 2023, compared to no commercial paper outstanding as of December 31, 2022. Net commercial paper issuances in addition to repayments and borrowings by international subsidiaries are largely reflected in ~~addition to~~“Proceeds from debt (maturities greater than 90 days)” in the preceding table. 3M’s primary short-term liquidity needs are met through cash on hand and U.S. commercial paper issuances. 2022 issuances, ~~if any. Refer~~maturities, and extinguishments of short-and long-term debt are described in Note 10 to the ~~preceding “Total Debt” section for discussion of repayment of debt and proceeds from debt issuances.~~

Consolidated Financial Statements in 3M’s 2022 Annual Report on Form 10-K.

Repurchases of common stock are made to support the Company’s stock-based employee compensation plans and for other corporate purposes. In ~~February 2016, 3M’s Board~~the first six months of ~~Directors authorized~~2023, the ~~repurchase~~Company purchased $29 million of ~~up to $10 billion of 3M’s outstanding common stock, with no pre-established end date. The Company expects full-year 2017 gross share repurchases will be in the range of $2.0 billion to $2.5 billion.~~its own stock. For more information, refer to the table titled “Issuer Purchases of Equity Securities” in Part II, Item 2. The Company does not utilize derivative instruments linked to the Company’s stock.

3M has paid dividends ~~each year~~ since 1916. In February ~~2017,~~2023, 3M’s Board of Directors declared a first-quarter ~~2017~~2023 dividend of ~~$1.175~~$1.50 per share, an increase of 61 percent. This is equivalent to an annual dividend of ~~$4.70~~$6.00 per share and marked the ~~59th~~65th consecutive year of dividend ~~increases for 3M.~~increases. In May ~~2017, 3M’s~~2023, 3M's Board of Directors declared a second-quarter ~~2017~~2023 dividend of ~~$1.175~~$1.50 per share. ~~In August 2017, 3M’s Board of Directors declared a third-quarter 2017 dividend of $1.175 per share.~~

Other cash flows from financing activities may include various other items, such as cash paid associated with certain derivative instruments, distributions to or sales of noncontrolling interests, changes in ~~cash~~ overdraft balances, and principal payments for ~~capital~~finance leases.

Free Cash Flow (non-GAAP measure):

Free cash flow and free cash flow conversion are not defined under U.S. generally accepted accounting principles (GAAP). Therefore, they should not be considered a substitute for income (loss) or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The Company defines free cash flow conversion as free cash flow divided by net income (loss) attributable to 3M. The Company believes free cash flow and

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free cash flow conversion are meaningful to investors as they are useful measures of performance and the Company uses these measures as an indication of the strength of the company and its ability to generate cash. ~~The first quarter~~Free cash flow and free cash flow conversion vary across quarters throughout the year. Below find a recap of ~~each year is typically 3M’s seasonal low for~~ free cash flow and free cash flow conversion. ~~Below find a recap~~

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Refer to the preceding Cash Flows from Operating Activities and Cash Flows from Investing Activities sections for discussion of items that impacted the operating cash flow and purchases of PP&E components of the calculation of free cash flow. Refer to the preceding Results of Operations section for discussion of items that impacted the net income (loss) attributable to 3M component of the calculation of free cash flow conversion.


	Six months ended June 30,
(Millions)	2023			2022
Major GAAP Cash Flow Categories
Net cash provided by (used in) operating activities	$	2,784		$	2,138
Net cash provided by (used in) investing activities	(619)			(814)
Net cash provided by (used in) financing activities	(1,519)			(3,102)

Free Cash Flow (non-GAAP measure)
Net cash provided by (used in) operating activities	$	2,784		$	2,138
Purchases of property, plant and equipment	(852)			(808)
Free cash flow	1,932			1,330
Net income (loss) attributable to 3M	$	(5,865)		$	1,377
Free cash flow conversion	(33)		%	97		%

Material Cash Requirements from Known Contractual and Other Obligations:

See the Financial Condition and Liquidity - Material Cash Requirements from Known Contractual and Other Obligations section of Item 7 of 3M's 2022 Annual Report on Form 10-K. In addition, the Company expects to pay up to $12.5 billion in the aggregate from 2024 through 2036 pursuant to the terms of a proposed settlement agreement with public water systems in the United States related to PFAS. See Note 14 and the settlement agreement that is included in the exhibit list to this filing for ~~the nine months ended September 30, 2017 and 2016.~~

Nine months ended

September 30,

(Millions)

2017

2016

Major GAAP Cash Flow Categories

Net cash provided by operating activities

$
4,380

$
4,453

Net cash provided by (used in) investing activities

(354)

(1,173)

Net cash used in financing activities

(3,699)

(2,780)

Free Cash Flow (non-GAAP measure)

Net cash provided by operating activities

$
4,380

$
4,453

Purchases of property, plant and equipment (PP&E)

(914)

(984)

Free cash flow

$
3,466

$
3,469

Net income attributable to 3M

$
4,335

$
3,895

Free cash flow conversion

80
%

89
%

additional information.

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~~CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS~~

Cautionary Note Concerning Factors That May Affect Future Results

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may also make forward-looking statements in other reports filed with the Securities and Exchange Commission, in materials delivered to shareholders and in press releases. In addition, the Company’s representatives may from time to time make oral forward-looking statements.

Forward-looking statements relate to future events and typically address the Company’s expected future business and financial performance. Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” “forecast” and other words and terms of similar meaning, typically identify such forward-looking statements. In particular, these include, among others, statements relating to:

~~the Company’s strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of financial performance, and market position,~~

worldwide economic, political, and capital markets conditions, such as interest rates, foreign currency exchange rates, financial conditions of our suppliers and customers, and natural and other disasters or climate change affecting the operations of the Company or its suppliers and customers,

•worldwide economic, political, regulatory, international trade, geopolitical, capital markets and other external conditions, such as interest rates, monetary policy, financial conditions of our suppliers and customers, trade restrictions such as tariffs and retaliatory counter measures, inflation, recession, military conflicts, and natural and other disasters or climate change affecting the operations of the Company or our suppliers and customers,

~~new business opportunities, product development, and future performance or results of current or anticipated products,~~

•risks related to unexpected events such as the public health crises associated with the coronavirus (COVID-19) global pandemic,

~~the scope, nature or impact of acquisitions, strategic alliances and divestitures,~~

•liabilities and the outcome of contingencies related to certain fluorochemicals known as "PFAS," as well as matters related to the Company's plans to discontinue the use of PFAS,

~~the outcome of contingencies, such as legal and regulatory proceedings,~~

•risks related to the proposed class-action settlement (“Settlement”) to resolve claims by public water systems in the United States regarding PFAS, including whether court approval of the Settlement will be obtained, whether the number of plaintiffs that opt out of the Settlement will exceed current expectations or will exceed the level that would permit 3M to terminate the Settlement (and whether 3M will elect to terminate the Settlement if this occurs), whether the Settlement is appealed, the timing and amount of payments made under the Settlement, and the impact of the settlement on other PFAS-related matters,

~~future levels of indebtedness, common stock repurchases and capital spending,~~

•the Company’s strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of financial performance, and market position,

~~future availability of and access to credit markets,~~

•competitive conditions and customer preferences,

~~pension and postretirement obligation assumptions and future contributions,~~

•foreign currency exchange rates and fluctuations in those rates,

~~asset impairments,~~

•new business opportunities, product and service development, and future performance or results of current or anticipated products and services,

~~tax liabilities,~~

•fluctuations in the costs and availability of purchased components, compounds, raw materials and energy,

~~information technology security, and~~

•information technology systems including implementation of an enterprise resource planning (ERP) system,

~~the effects of changes in tax, environmental and other laws and regulations in the United States and other countries in which we operate.~~

•security breaches and other disruptions to information technology infrastructure,

•the scope, nature or impact of acquisition, strategic alliance and divestiture activities,

•operational execution, including inability to generate productivity improvements and impact of organizational restructuring activities,

•future levels of indebtedness, common stock repurchases and capital spending,

•future access to credit markets and the cost of credit,

•pension and postretirement obligation assumptions and future contributions,

•asset impairments,

•tax liabilities and effects of changes in tax rates, laws or regulations,

•the proposed spin-off of the Company's Health Care business to establish two separate public companies,

•the voluntary chapter 11 proceedings initiated by the Company's Aearo Entities, and

•laws and regulations, as well as legal compliance risks (including third-party risks), and legal and regulatory proceedings related to the same, including with regards to environmental matters and product liability, in the United States and other countries in which we operate.

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The Company assumes no obligation to update or revise any forward-looking statements.

Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. Important information as to these factors can be found in this document, including, among others, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings of “Overview,” “Financial Condition and Liquidity” and annually in “Critical Accounting Estimates.” Discussion of these factors is incorporated by reference from Part II, Item 1A, “Risk Factors,” of this document, and should be considered an integral part of Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For additional information concerning factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Form 10-K, 10-Q and 8-K filed with the SEC from time to time.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

In the context of Item 3, 3M is exposed to market risk due to the risk of loss arising from adverse changes in foreign currency exchange rates, interest rates and commodity prices. Changes in those factors could impact the Company’s results of operations and financial condition. For a discussion of sensitivity analysis related to these types of market risks, refer to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in ~~3M’s Current Report on Form 8-K dated May 4, 2017 (which updated 3M’s 2016~~3M's 2022 Annual Report on Form ~~10-K).~~10-K. There have been no material changes in information that would have been provided in the context of Item 3 from the end of the preceding year until ~~September~~June 30, ~~2017.~~2023. However, the Company does provide risk management discussion in various places in this Quarterly Report on Form 10-Q, primarily in the Derivatives note.

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Item 4. Controls and Procedures.

a. The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

b. There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company is implementing an enterprise resource planning (“ERP”) system on a worldwide basis, which is expected to improve the efficiency of certain financial and related transaction processes. The gradual implementation is expected to occur in phases over the next several years. The implementation of a worldwide ERP system will likely affect the processes that constitute ~~our~~the Company’s internal control over financial reporting and will require testing for effectiveness.

The Company completed implementation with respect to ~~elements of certain~~various processes/sub-processes in ~~limited~~certain subsidiaries/locations, including aspects relative to the United States, and will continue to roll out the ERP system over the next several years. As with any new information technology application ~~we implement,~~the Company implements, this application, along with the internal ~~controls~~control over financial reporting included in this process, was appropriately considered within the testing for effectiveness with respect to the implementation in these instances. WeThe Company concluded, as part of its evaluation described in the above paragraphs, that the implementation of the ERP system in these circumstances has not materially affected ~~our~~its internal control over financial reporting.

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3M COMPANY

FORM 10-Q

For the Quarterly Period Ended ~~September~~June 30, ~~2017~~

2023

PART II. Other Information

Item 1.Legal Proceedings.

Discussion of legal matters is incorporated by reference from Part I, Item 1, Note ~~12,~~14, “Commitments and ~~Contingencies”~~Contingencies,” of this document, and should be considered an integral part of Part II, Item 1, “Legal Proceedings.”

Item 1A. Risk Factors.

Provided below is a cautionary discussion of what we believe to be the most important risk factors applicable to the Company. Discussion of these factors is incorporated by reference into and considered an integral part of Part I, Item 2, “Management’s Discussion and Analysis of Financial ~~Conditions~~Condition and Results of Operations.”

Risks Related to the Global Economy and Public Health Crises

* ~~Results~~The Company’s results are impacted by the effects of, and changes in, worldwide economic, political, regulatory, international trade, geopolitical, and ~~capital markets~~other external conditions.

The Company operates in more than 70 countries and derives approximately 60 percent of its revenues from outside the United ~~States. The~~States, and, accordingly, the Company’s operations and the execution of its business isstrategies and plans are subject to global competition and economic and geopolitical risks ~~and may be adversely affected by factors in the United States and other countries~~ that are beyond its control, such as, ~~slower economic growth,~~among other things, disruptions in financial markets, economic downturns, military conflicts, public health emergencies such as COVID-19, political changes and trends such as protectionism, economic nationalism resulting in ~~the form of either contained~~government actions impacting international trade agreements or ~~widespread recessionary conditions, inflation, elevated unemployment levels, sluggish or uneven recovery,~~imposing trade restrictions such as tariffs and retaliatory counter measures, and government deficit reduction and other austerity measures in ~~specific countries~~locations or ~~regions, or in the various~~ industries in which the Company ~~operates;~~operates. Further escalation of specific trade tensions, including those between the U.S. and China, or more broadly in global trade conflict, could adversely impact the Company's business and operations around the world. The Company's business is also impacted by social, political, orand labor conditions in ~~specific countries or regions; natural and other disasters or climate change affecting the operations of~~locations in which the Company or its suppliers or customers ~~and suppliers; or~~operate; adverse changes in the availability and cost of ~~capital,~~capital; monetary policy; interest ~~rates, tax rates, tax laws,~~rates; inflation; recession; commodity prices; currency volatility or exchange ~~control,~~control; ability to expatriate ~~earnings~~earnings; and other laws and regulations in the jurisdictions in which the Company ~~operates.~~

* Changeor its suppliers or customers operate. For example, changes in local economic condition or outlooks, such as lower economic growth rates in China, Europe, or other key markets, impact the ~~Company’s credit ratings~~demand or profitability of the Company's products.

The global economy has been impacted by the military conflict between Russia and Ukraine. The U.S. and other governments have imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. 3M suspended operations of its subsidiaries in Russia in March 2022 and completed a sale of the related assets in June 2023. 3M also has other operations that source certain raw materials from suppliers in Russia and has experienced related supply disruption due to the conflict. These geopolitical tensions could ~~increase cost~~result in, among other things, cyberattacks, further supply chain disruptions impacting downstream customers, higher energy costs, lower consumer demand, and changes to foreign exchange rates and financial markets, any of ~~funding.~~ ~~The Company’s credit ratings are important to 3M’s cost of capital. The major rating agencies routinely evaluate~~which may adversely affect the ~~Company’s credit profile and assign debt ratings to 3M. This evaluation is based on a number of factors, which include financial strength,~~Company's business and ~~financial risk,~~supply chain.

Climate change, as well as ~~transparency with rating agencies~~related environmental and ~~timeliness~~social regulations, may negatively impact the Company or its customers and suppliers, in terms of ~~financial reporting.~~ availability and cost of natural resources, sources and supply of energy, product demand and manufacturing, and the health and well-being of individuals and communities in which we or our suppliers or customers operate.

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* Unexpected events, such as those related to the coronavirus (COVID-19) public health crisis, may increase the Company's cost of doing business and disrupt the Company's operations.

3M, ~~currently has an AA- credit rating with~~as a ~~stable outlook from Standard & Poor’s~~global company, is impacted by unexpected events, including war, acts of terrorism, public health crises (such as the COVID-19 pandemic), civil unrest, natural disasters, and has an A1 credit rating with a stable outlook from Moody’s Investors Service. The Company’s credit ratings have served to lower 3M’s borrowing costs and facilitate access to a variety of lenders. The Company’s ongoing transition to a better-optimized capital structure, financed with additional low-cost debt, could impact 3M’s credit ratingsevere weather in the ~~future. Failure to maintain strong investment grade ratings would~~locations in which the Company or its suppliers or customers operate, and these events have adversely affected, and could in the future adversely affect, the ~~Company’s cost~~Company's operations and financial performance. For example, the global pandemic associated with COVID-19, including related evolving governmental responses to the pandemic, has significantly increased economic and demand uncertainty, and has impacted and will continue to impact 3M’s operations, including its supply chain and its manufacturing and distribution capabilities. Although COVID-19 increased demand for certain 3M products, it also resulted in decreased demand from certain end markets, made it more difficult for 3M to serve customers, and resulted in conditions that had the potential to damage 3M's reputation, including third-party price gouging, counterfeiting, and other illegal or fraudulent activities involving 3M's products. Furthermore, COVID-19 has impacted and may further impact the broader economies of ~~funding~~affected countries, including negatively impacting economic growth, the proper functioning of financial and ~~could adversely affect liquidity~~capital markets, foreign currency exchange rates, and ~~access to capital markets.~~

* The Company’s results are affected by competitive conditions and customer preferences. ~~Demand~~interest rates. As the pandemic evolves, demand for ~~the Company’s~~personal protection products which impacts revenue and profit margins, is affected by (i) the development and timing of the introduction of competitive products; (ii) the Company’s response to downward pricing to stay competitive; (iii) changes in customer order patterns, such as ~~changes in~~disposable respirators has experienced a decline from prior levels. 3M is not able to predict the ~~levels~~impact of ~~inventory maintained by customers~~unexpected events, such as the COVID-19 pandemic, and ~~the timing~~unexpected events may have a material adverse effect on 3M's consolidated results of ~~customer purchases which may be affected by announced price changes, changes in the Company’s incentive programs,~~operations or the customer’s ability to achieve incentive goals; and (iv) changes in customers’ preferences for our products, including the success of products offered by our competitors, and changes in customer designs for their products that can affect the demand for some of the Company’s products.

financial condition.

* Foreign currency exchange rates and fluctuations in those rates may affect the Company’s ability to realize projected growth rates in its sales and earnings.

Because the Company’s financial statements are denominated in U.S. dollars and approximately 60 percent of the Company’s revenues are derived from outside the United States, the Company’s results of operations and its ability to realize projected growth rates in sales and earnings could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies.

For a discussion of the impact of foreign currency exchange rates on the Company, see Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Risks Related to Legal and Regulatory Proceedings

* The Company faces liabilities related to certain fluorochemicals, which could adversely impact our results.

As previously reported, governments in the United States and internationally have increasingly been regulating a broad group of perfluoroalkyl and polyfluoroalkyl substances produced by the Company, collectively known as “PFAS.” 3M has noticed several global regulatory trends related to PFAS, including declining emission standards and limits set as to the presence of certain compounds in various media, and the inclusion of a broadening group of PFAS. Developments in these and other global regulatory trends may require additional actions by 3M, including investigation, remediation, and compliance, or may result in additional litigation and enforcement action costs.

The Company has been voluntarily cooperating with various local, state, federal (primarily the U.S. Environmental Protection Agency (EPA)), and international agencies in their review of the environmental and health effects of certain PFAS produced by the Company.

The PFAS group contains several categories and classes of durable chemicals and materials with properties that include oil, water, temperature, chemical, and fire resistance, as well as electrical insulating properties. The strength of the carbon-fluorine bond also means that these compounds do not easily degrade. These characteristics have made PFAS substances critical to the manufacture of electronic devices such as cell phones, tablets, and semi-conductors. They are also used to help prevent contamination of medical products like surgical gowns and drapes. Commercial aircraft and low-emissions vehicles also rely on PFAS technology. PFAS compounds are manufactured by various companies, including 3M, and are used in everyday products, including some manufactured by 3M. As science and technology evolve and advance, and in response to evolving knowledge and the understanding that certain PFAS compounds had the potential to build up over time, 3M announced in 2000 that we would voluntarily phase out production of two PFAS substances, perfluorooctanoate (PFOA) and perfluorooctane sulfonate (PFOS) globally as a precautionary measure. We phased out of materials used to produce certain repellants and surfactant products, with most of these activities in the U.S. completed by the end of 2002. Phased out products included Aqueous Film Forming Foam (AFFF) and certain coatings for food packaging, for example. The Company continues to review, control, or eliminate the presence of certain PFAS in purchased materials, as intended substances in products, or as byproducts of some of 3M’s current manufacturing processes, products, and waste streams.

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*3M announced in December 2022 it will take two actions: exiting all PFAS manufacturing by the end of 2025; and working to discontinue the use of PFAS across its product portfolio by the end of 2025. 3M’s decision is based on careful consideration and a thorough evaluation of the evolving external landscape, including multiple factors such as accelerating regulatory trends focused on reducing or eliminating the presence of PFAS in the environment and changing stakeholder expectations. The Company recognized a $0.8 billion pre-tax charge in the fourth quarter of 2022 associated with this announcement related to asset impairments, and will incur additional expenses in connection with its exit activities. In addition, these two announced actions (the “exit”) involve risks, including the actual timing, costs, and financial impact of such exit; the Company’s ~~growth objectives are largely dependent~~ability to complete such exit, on the anticipated timing or at all; potential governmental or regulatory actions relating to PFAS manufacturing and ~~market acceptance of its new product offerings, including its~~production, or the Company’s exit plans; the Company’s ability to ~~continually renew its pipeline of new~~identify and manufacture acceptable substitutes for the discontinued products, and the possibility that such substitutes will not achieve the anticipated or desired commercial or operational results; potential litigation relating to ~~bring those~~the Company’s exit plans; and the possibility that the planned exit will involve greater costs than anticipated, or otherwise have negative impacts on the Company’s relationships with its customers and other counterparties.

3M currently is defending lawsuits concerning various PFAS-related products and chemistries, and is subject to ~~market.~~ ~~This ability may be adversely affected~~unasserted and asserted claims and governmental regulatory proceedings and inquiries related to the production and use of PFAS in a variety of jurisdictions, as discussed in Note 14, “Commitments and Contingencies,” within the Notes to Consolidated Financial Statements. 3M has seen increased public and private lawsuits being filed on behalf of states, counties, cities, and utilities alleging, among other things, harm to the general public and damages to natural resources, some of which are pending in the Aqueous Film Forming Foam (AFFF) multi-district litigation and some of which are pending in other jurisdictions. Various factors or developments in these and other disclosed actions could result in future charges that could have a material adverse effect on 3M. For example, we recorded a pre-tax charge of $897 million, inclusive of legal fees and other related obligations, in the first quarter of 2018 with respect to the settlement of a matter brought by ~~difficulties~~the State of Minnesota involving the presence of PFAS in the groundwater, surface water, fish or ~~delays~~other aquatic life, and sediments in ~~product development, such~~the state. In addition, as described in greater detail in Note 14, “Commitments and Contingencies,” within the ~~inability~~Notes to ~~identify viable new products, obtain adequate intellectual property protection, or gain market acceptance~~Consolidated Financial Statements, in June 2023, the Company entered into a proposed class-action settlement (“Settlement”) to resolve a wide range of ~~new products. There~~drinking water claims by public water systems in the United States regarding any PFAS, subject to court approval. If the court approves the Settlement and all conditions in the Settlement are ~~no guarantees that new products~~met, 3M will ~~prove~~pay $10.5 billion to $12.5 billion in total to resolve the claims released by the Settlement, with payments to be ~~commercially successful.~~

*made annually from 2024 through 2036, in exchange for a release of certain claims, as described further in Note 14. The ~~Company’s future results are subject~~Settlement gives 3M the option to ~~fluctuations in~~terminate the ~~costs~~Settlement if the numbers of eligible class members opting out of the Settlement exceed specified levels. Unexpected events related to the Settlement, including whether court approval of the Settlement will be obtained, whether the number of plaintiffs that opt out of the Settlement will exceed current expectations or will exceed the level that would permit 3M to terminate the Settlement (and whether 3M will elect to terminate the Settlement if this occurs), whether the Settlement is appealed, and ~~availability~~the impact of purchased components, compounds, raw materials and energy, including oil and natural gas and their derivatives, due to shortages, increased demand, supply interruptions, currency exchange risks, natural disasters andthe settlement on other ~~factors.~~ The Company depends on various components, compounds, raw materials, and energy (including oil and natural gas and their derivatives) supplied by others for the manufacturing of its products. It is possible that any of its supplier relationships could be interrupted due to natural and other disasters and other events, or be terminated in the future. Any sustained interruption in the Company’s receipt of adequate suppliesPFAS-related matters could have a material adverse effect on the Company’s results of operations, cash flows or its consolidated financial position.

Governmental inquiries, lawsuits, or laws and regulations involving PFAS could lead to our incurring liability for damages or other costs, civil or criminal proceedings, the imposition of fines and penalties, or other remedies, including orders to conduct remediation, as well as restrictions on or added costs for our business operations going forward, including in the form of restrictions on discharges at our manufacturing facilities, requiring the installation of control technologies, suspension or shutdown of facility operations, switching costs in seeking alternative sources of supply, potential customer damage claims due to supply disruptions or otherwise, and reporting requirements or bans on PFAS and PFAS-containing products manufactured by the Company. ~~In addition, while~~

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* The Company is subject to risks related to international, federal, state, and local treaties, laws, and regulations, as well as compliance risks related to legal or regulatory requirements, contract requirements, policies and practices, or other matters that require or encourage the Company ~~has~~or its suppliers, vendors, or channel partners to conduct business in a ~~process~~certain way. The outcome of legal and regulatory proceedings related to ~~minimize volatility in component~~compliance with these treaties, laws, regulations, and ~~material pricing, no assurance can be given that the Company will be able to successfully manage price fluctuations or that future price fluctuations or shortages will not~~requirements could have a material adverse effect on the ~~Company.~~

* Acquisitions, strategic alliances, divestitures,Company's reputation, ability to execute its strategy and ~~other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring could affect future results.~~ its results of operations.

The Company ~~monitors its business portfolio~~operates globally, including in some jurisdictions that pose potentially elevated risks of fraud or corruption or increased risk of internal control issues, and organizational structure and has made and may continue to make acquisitions, strategic alliances, divestitures and changes to its organizational structure. With respect to acquisitions, future results will be affected by the Company’s ability to integrate acquired businesses quickly and obtain the anticipated synergies.

* The Company’s future results may be affected if the Company generates fewer productivity improvements than estimated. The Company utilizes various tools, such as Lean Six Sigma, and engages in ongoing global business transformation. Business transformation is defined as changes in processes and internal/external service delivery across 3M to move to more efficient business models to improve operational efficiency and productivity, while allowing 3M to serve customers with greater speed and efficiency. This is enabled by the ongoing multi-year phased implementation of an enterprise resource planning (ERP) system on a worldwide basis. There can be no assurance that all of the projected productivity improvements will be realized.

* The Company employs information technology systems to support its business, including ongoing phased implementation of an ERP system as part of business transformation on a worldwide basis over the next several years. Security breaches and other disruptions to the Company’s information technology infrastructure could interfere with the Company’s operations, compromise information belonging to the Company and its customers, suppliers, and employees, exposing the Company to liability which could adversely impact the Company’s business and reputation. In the ordinary course of business, the Company relies on information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities. Additionally, the Company collects and stores certain data, including proprietary business information, and may have access to confidential or personal information in certain of our businesses that is subject to ~~privacy~~risks related to international, federal, state, and ~~security~~local treaties, laws, ~~regulations~~ and customer-imposed controls. Despite our cybersecurity measures (including employee and third-party training, monitoring of networks and systems, and maintenance of backup and protective systems) which are continuously reviewed and upgraded, the Company’s information technology networks and infrastructure may still be vulnerable to damage, disruptions or shutdowns due to attack by hackers or breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, service providers including cloud services, natural disasters or other catastrophic events. It is possible for such vulnerabilities to remain undetected for an extended period, up to and including several years. While we have experienced, and expect to continue to experience, these types of threats to the Company’s information technology networks and infrastructure, none of them to date has had a material impact to the Company. There may be other challenges and risks as the Company upgrades and standardizes its ERP system on a worldwide basis. Any such events could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to the Company’s reputation, which could adversely affect the Company’s business. Although the Company

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~~maintains insurance coverage for various cybersecurity risks, there can be no guarantee that all costs or losses incurred will be fully insured.~~

* The Company’s defined benefit pension and postretirement plans are subject to financial market risks that could adversely impact our results. The performance of financial markets and discount rates impact the Company’s funding obligations under its defined benefit plans. Significant changes in market interest rates, decreases in the fair value of plan assets and investment losses on plan assets, and relevant legislative or regulatory changes relating to defined benefit plan funding may increase the Company’s funding obligations and adversely impact its results of operations and cash flows.

* The Company’s future results may be affected by various legal and regulatory proceedings and legal compliance risks,regulations, including those involving product ~~liability, antitrust,~~liability; securities and corporate laws; antitrust; intellectual ~~property,~~property; environmental, health, and safety; tax; the U.S. Foreign Corrupt Practices Act (FCPA) and other anti-bribery, anti-corruption laws; international import and export requirements and trade sanctions compliance; regulations of the U.S. Food and Drug Administration (FDA) and similar foreign agencies; U.S. federal healthcare program-related laws and regulations including the False Claims Act, anti-kickback laws, and the Sunshine Act; and other matters. The Company is also subject to compliance risks related to legal or regulatory requirements, contract requirements, policies and practices, or other ~~matters.~~matters that require or encourage the Company and its suppliers, vendors, or channel parties, to conduct business in a certain way. Legal compliance risks also include third-party risks where the Company’s suppliers, vendors, or channel partners have business practices that are inconsistent with 3M’s Supplier Responsibility Code, 3M performance requirements, or with legal requirements.

The failure to comply with the FCPA and other anti-bribery and anti-corruption laws and regulations could result in significant civil fines and penalties or criminal sanctions against the Company, which could have a material adverse effect on our business, reputation, operating results and financial condition. These laws and regulations prohibit corrupt payments by the Company's employees, suppliers, vendors, channel partners or agents. The Company is also required to maintain accurate books and records and adequate internal controls under the FCPA's accounting provisions. From time to time, the Company receives reports internally and externally, via various reporting channels deployed by its Ethics and Compliance function or otherwise (such as shareholder communications), about business and other activities that raise compliance or other legal or litigation issues. The Company has in the past, and in the future could be, required to investigate such reports and cooperate with U.S. and foreign regulatory authorities in such investigations, audit, monitor compliance or alter its practices as part of such investigations. While the Company maintains and implements U.S. and international compliance programs, including policies and procedures, training, and internal controls designed to reduce the risk of noncompliance, the Company's employees, suppliers, vendors, channel partners or agents may violate such policies and procedures and engage in practices that contravene relevant laws and regulations.

The Company's results of operations could be adversely impacted if the costs to comply with these evolving treaties, laws, regulations, and requirements are greater than projected by the Company. In addition, the outcome of legal and regulatory proceedings related to compliance with these ~~legal proceedings~~treaties, laws, regulations, and requirements are difficult to reliably predict, may differ from the Company’s expectations, ~~because~~and have resulted and may in the ~~outcomes~~future result in, one or more of the following: criminal or civil sanctions, including fines; limitations on the extent to which the Company can conduct business; employee and business partner terminations due to policy violations; and private rights of action that result in litigation exposure, including ~~regulatory matters, are often difficult~~expenses and costs incurred in connection with settlement or court proceedings, for the Company. In addition, detecting, investigating and resolving actual or alleged violations of these acts is expensive and could consume significant time and attention of our senior management. Although the Company maintains general liability insurance to ~~reliably predict.~~mitigate monetary exposure, the amount of liability that may result from certain of these risks may not always be covered by, or could exceed, the applicable insurance coverage. Various factors or developments can lead the Company to change current estimates of liabilities and related insurance receivables where applicable, or make such estimates for matters previously not susceptible of reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments or changes in applicable law. A future adverse ruling, settlement, or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows or its consolidated financial position. In addition, negative publicity related to the matters noted above or other matters involving the Company may negatively impact the Company’s reputation. The Company also relies on patent and other intellectual property protection, and challenges to the Company’s intellectual property rights, or claims that the Company’s activities interfere with the intellectual property rights of a third party, could cause the Company to incur significant expenses to assert or defend against such claims, could result in reduced revenue, and could damage the Company’s reputation, any ~~particular period.~~of which could have an adverse effect on the Company. For a more detailed discussion of the legal proceedings involving the Company and the associated accounting estimates, see the discussion in Note 1214, “Commitments and ~~Contingencies”~~Contingencies,” within the Notes to Consolidated Financial Statements.

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Risks Related to Our Products and Customer Preferences

* The Company’s results are affected by competitive conditions and customer preferences.

Demand for the Company’s products, which impacts revenue and profit margins, is affected by, among other things, (i) the development and timing of the introduction of competitive products; (ii) the Company’s pricing strategies; (iii) changes in customer order patterns, such as changes in the levels of inventory maintained by customers, vendors, or channel partners; (iv) changes in customers’ preferences for our products, including the success of products offered by our competitors, and changes in customer designs for their products that can affect the demand for some of the Company’s products; and (v) changes in the business environment related to disruptive technologies, such as artificial intelligence, block-chain, expanded analytics, and other enhanced learnings from increasing volume of available data.

* The Company’s growth objectives are largely dependent on the timing and market acceptance of its new product offerings, including its ability to continually renew its pipeline of new products and to bring those products to market.

This ability is subject to difficulties or delays in product development, such as the inability to identify viable new products, obtain adequate intellectual property protection, or gain market acceptance of new products. There are no guarantees that new products will prove to be commercially successful.

* The Company’s future results are subject to vulnerability with respect to materials and fluctuations in the costs and availability of purchased components, compounds, raw materials, energy, and labor due to shortages, increased demand and wages, logistics, supply chain interruptions, manufacturing site disruptions, regulatory developments, natural disasters, and other disruptive factors.

The Company depends on various components, compounds, raw materials, and energy (including oil and natural gas and their derivatives) supplied by others for the manufacturing of its products. Supplier relationships have been and could be interrupted in the future due to supplier material shortage, climate impacts, natural and other disasters, and other disruptive events such as military conflicts, or be terminated. In addition, some of our suppliers are limited- or sole-source suppliers, and our ability to meet our obligations to customers depends on the performance, product quality, and stability of such suppliers and the Company's ability to source adequate alternatives in a cost effective manner. Any sustained interruption in the Company’s receipt of adequate supplies, supply chain disruptions impacting the distribution of products, or disruption to key manufacturing sites’ operations due to natural and other disasters or events, such as government actions relating to discharge or emission permits or other legal or regulatory requirements, could have a material adverse effect on the Company and its ability to fulfill supply obligations to its customers. The Company could incur contractual penalties, experience a deterioration in customer relationships, or suffer harm to its reputation if the Company is unable to fulfill its obligations to customers, any of which could have a material adverse effect on the Company. In addition, there can be no assurance that the Company's processes to minimize volatility in component and material pricing will be successful or that future price fluctuations or shortages will not have a material adverse effect on the Company.

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Risks Related to Our Business

* The Company employs information technology systems to support its business and collect, store, and/or use proprietary and confidential information, including ongoing phased implementation of an enterprise resource planning (ERP) system as part of its business transformation on a worldwide basis over the next several years. Security and data breaches, cyberattacks, and other cybersecurity incidents involving the Company’s information technology systems, networks and infrastructure could disrupt or interfere with the Company’s operations; result in the compromise and misappropriation of proprietary and confidential information belonging to the Company or its customers, suppliers, and employees; and expose the Company to numerous expenses, liabilities, and other negative consequences, any or all of which could adversely impact the Company’s business, reputation, and results of operations.

In the ordinary course of business, the Company relies on centralized and local information technology networks and systems, some of which are provided, hosted, or managed by vendors and other third parties, to process, transmit, and store electronic information, and to manage or support a variety of businesses. Additionally, the Company collects and stores certain data, including proprietary business information, and has access to confidential or personal information in certain of our businesses that is subject to privacy and cybersecurity laws, regulations, and customer-imposed controls. Third parties and threat actors, including organized criminals, nation-state entities, or nation-state supported actors, regularly attempt to gain unauthorized access to the Company’s information technology networks and infrastructure, data, and other information, and many such attempts are becoming increasingly sophisticated.Despite our cybersecurity and business continuity counter measures (including employee and third-party training, monitoring of networks and systems, patching, maintenance, and backup of systems and data), the Company’s information technology systems, networks and infrastructure are still potentially susceptible to attack, compromise, damage, disruption, or shutdown, including as a result of the exploitation of known or unknown hardware or software vulnerabilities, or zero day attacks, in our systems or in the systems of our vendors and third-party service providers, the introduction of computer viruses, malware or ransomware, service or cloud provider disruptions or security breaches, phishing attempts, employee error or malfeasance, power outages, telecommunication or utility failures, systems failures, natural disasters, or other catastrophic events. The Company’s increased adoption of remote working, initially driven by the pandemic, also introduces additional threats and risk of disruptions to our information technology systems, networks and infrastructure. Despite our cybersecurity counter measures, it is possible for security vulnerabilities or a cyberattack to remain undetected for an extended time period, up to and including several years, and the prioritization of decisions with respect to security measures and remediation of known vulnerabilities that we and the vendors and other third parties upon which we rely make may prove inadequate to protect against attacks. While we and third parties we utilize have experienced, and expect to continue to experience, cyberattacks on and breaches and other disruptions of the Company’s and the third parties' information technology systems and infrastructure, we do not believe that any such incidents to date have had a material impact on the Company. Any cybersecurity incident or information technology network disruption could result in numerous negative consequences, including the risk of legal claims or proceedings, investigations or enforcement actions by U.S., state, or foreign regulators; liabilities or penalties under applicable laws and regulations, including privacy laws and regulations in the U.S. and other jurisdictions; interference with the Company’s operations; the incurrence of remediation costs; loss of intellectual property protection; the loss of customer, supplier, or employee relationships; and damage to the Company’s reputation, any of which could adversely affect the Company’s business. Although the Company maintains insurance coverage for various cybersecurity and business continuity risks, there can be no guarantee that all costs or losses incurred will be fully insured.

* Acquisitions, strategic alliances, divestitures, and other strategic events resulting from portfolio management actions and other evolving business strategies could affect future results.

The Company monitors its business portfolio and organizational structure and has made and may continue to make acquisitions, strategic alliances, divestitures, and changes to its organizational structure. With respect to acquisitions and strategic alliances, future results will be affected by, as applicable, the Company’s ability to integrate acquired businesses quickly and obtain the anticipated synergies and the Company's ability to operationalize and derive anticipated benefits from alliances. Divestitures may include continued involvement in the divested businesses, such as through transitional or longer-term supply or distribution arrangements, following the transaction, and may result in unexpected liabilities through indemnification or other risk-shifting mechanisms in the applicable divestiture agreement. Any of the foregoing could adversely affect the Company’s future results.

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* The Company’s future results may be affected by its operational execution, including through organizational restructurings and scenarios where the Company generates fewer productivity improvements than planned.

The Company’s financial results depend on the successful execution of its business operating plans. The Company utilizes various tools, such as continuous improvement, to improve productivity and reduce expenses and engages in ongoing global business transformation, including restructurings from time to time, to streamline its operations, improve operational efficiency, productivity, and the speed and efficiency with which it serves customers. Workforce restructuring activities impact business groups, functions, and geographies, and the structural reorganization is expected to reduce the size of the corporate center, simplify supply chain, streamline 3M's geographic footprint, reduce layers of management, further align business go-to-market models to customers, and reduce manufacturing roles to align with production volumes, with the goal of improving the Company's longer-term outlook in overall performance. There can be no assurance that we will realize the benefits of such activities, or that such activities will not result in unexpected or negative consequences, such as a reduced ability to generate sales; a relationship impact with employees; or a reduced ability to provide the experience that our customers, suppliers, vendors, and channel partners expect from us. In addition, the ability to adapt to business model and other changes, including responding to evolving customer needs and service expectations, are important, and, if not done successfully, could negatively impact the Company’s ability to win new business and enhance revenue and 3M’s brand. Operational challenges, including those related to customer service, pace of change and productivity improvements, could have a material adverse effect on the Company’s business, financial condition, and results of operations.

Risks Related to Financial and Capital Markets and Tax Matters

* The Company's defined benefit pension and postretirement plans are subject to financial market risks that could adversely impact our results.

The performance of financial markets and discount rates impact the Company's funding obligations under its defined benefit plans. Significant changes in market interest rates, decreases in the fair value of plan assets and investment losses on plan assets, and legislative or regulatory changes relating to defined benefit plan funding may increase the Company's funding obligations and adversely impact its results of operations and cash flows.

* Change in the Company’s credit ratings could increase cost of funding.

The Company’s credit ratings are important to 3M’s cost of capital. The major rating agencies routinely evaluate the Company’s credit profile and assign debt ratings to 3M. This evaluation is based on a number of factors, which include financial strength, business and financial risk, as well as transparency with rating agencies and timeliness of financial reporting. The Company’s credit ratings have served to lower 3M’s borrowing costs and facilitate access to a variety of lenders. As of June 2023, 3M has a credit rating of A2, negative outlook from Moody's Investors Service, and a credit rating of A-, CreditWatch negative from S&P Global Ratings. Moody’s Investor Service downgraded the Company’s credit rating from A1 to A2, and S&P Global Ratings downgraded the Company’s credit rating from A to A- (and downgraded the Company’s short-term credit rating from A-2 to A-1), in connection with the Company’s announcement of the Settlement. The addition of further leverage to the Company’s capital structure could impact 3M’s credit ratings in the future. Failure to maintain strong investment grade ratings and further downgrades by the ratings agencies, would adversely affect the Company’s cost of funding and could adversely affect liquidity and access to capital markets.

* Changes in tax rates, laws, or regulations could adversely impact our financial results.

The Company’s business is subject to tax-related external conditions, such as tax rates, tax laws and regulations, changing political environments in the U.S. and foreign jurisdictions that impact tax examination, and assessment and enforcement approaches. In addition, changes in tax laws including further regulatory developments arising from U.S. or international tax reform legislation could result in a tax expense or benefit recorded to the Company’s Consolidated Statement of Earnings. In connection with the Base Erosion and Profit Shifting (BEPS) Integrated Framework provided by Organization for Economic Cooperation and Development (OECD), determination of multi-jurisdictional taxation rights and the rate of tax applicable to certain types of income may be subject to potential change. Due to the evolving nature of global tax laws and regulations and compliance approaches, it is currently not possible to assess the ultimate impact of these actions on our financial statements, but these actions could have an adverse impact on the Company's financial results.

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Risks Related to the Voluntary Chapter 11 Proceedings Initiated by the Company’s Aearo Entities

* The Company is subject to risks related to its subsidiaries’ chapter 11 proceedings.

On July 26, 2022, Aearo Technologies and certain of its related entities ("Aearo Entities"), all wholly owned subsidiaries of the Company, voluntarily initiated chapter 11 proceedings seeking bankruptcy court supervision to establish a trust – funded by the Company – to address potential liabilities related to Dual-Ended Combat Arms – Version 2 earplugs and mask/respirator products historically manufactured and sold by Aearo Entities. This represented a change in strategy for managing the Combat Arms Version 2 earplugs and Aearo respirator mask/asbestos alleged litigation liabilities. Aearo Entities were acquired by the Company in 2008 and they, along with its related subsidiaries, have operated as Company subsidiaries since that time. 3M has entered into a funding agreement with Aearo Entities and committed to fund a trust to satisfy all claims determined to be entitled to compensation, and to support Aearo Entities as they continue to operate during the chapter 11 proceedings. 3M committed $1.0 billion to fund this trust and an additional $0.2 billion to fund projected related case expenses. Under the terms of the funding agreement, 3M would provide additional funding if required by the Aearo Entities. As discussed in Note 14, “Commitments and Contingencies,” within the Notes to Consolidated Financial Statements, in June 2023, the bankruptcy court dismissed the bankruptcy proceeding, and the judge certified a direct appeal of the dismissal to the U.S. Court of Appeals for the Seventh Circuit. Aearo has appealed the decision. Following dismissal of the bankruptcy, Combat Arms earplugs claims against the Aearo Entities will proceed in the federal and state multidistrict litigation, and will continue to proceed against 3M, which is a defendants in those litigation matters. 3M has been engaged in active confidential mediation pursuant to the orders of the federal and state MDL courts. There are a number of risks and uncertainties associated with the chapter 11 proceedings, including, among others, those related to: legal risks related to the chapter 11 proceedings; potential impacts to the Company’s reputation and relationships with its customers, suppliers, federal contracting officials, employees, regulators, and other counterparties and community members; impacts to the Company’s liquidity or results of operations, including risks related to the amount that will be necessary to fully and finally resolve all of the Company’s obligations to make payments to resolve such claims under the terms of its funding and indemnification agreement with Aearo Entities; the costs of chapter 11 proceedings and length of time necessary to resolve the cases; and Aearo Entities’ ability to reach acceptable agreements with claimants and navigate the chapter 11 proceedings to obtain approval and consummation of a plan of reorganization. In addition, due to the dismissal of the Aearo Entities bankruptcy proceeding, attempts to comprehensibly resolve with finality all Combat Arms earplugs claims against the Aearo Entities and 3M outside of the bankruptcy proceeding and in a litigation settlement involve significant challenges that could cause the Company to incur substantial and material costs. Due to the inherent uncertainty of litigation, the Company cannot predict the timing, outcome, or financial impact of this matter, or any other ongoing or future related litigation.

Risks Related to the Planned Spin-off of the Company’s Health Care Business

* The Company is subject to risks related to its plan to spin off its Health Care business.

On July 26, 2022, the Company announced its intent to spin off its Health Care business, resulting in two standalone public companies, in a transaction that is intended to be tax-free for the Company’s stockholders for U.S. federal income tax purposes. The spin-off will be subject to the satisfaction of a number of conditions, including the filing and effectiveness of a Form 10 registration statement, receipt of a private letter ruling from the Internal Revenue Service and a tax opinion from external counsel, satisfactory completion of financing, final approval by the Company’s Board of Directors, and other customary conditions. The failure to satisfy all of the required conditions, as well as additional factors such as conditions in the equity and debt markets, other external conditions, or developments involving the Company or any of its businesses, many of which are outside of the Company’s control, could delay the completion of the spin-off relative to the anticipated timeline or prevent it from occurring. Any delay in the completion of the spin-off or any change to the anticipated terms of the transaction could reduce the expected benefits of the transaction, or delay the time at which such benefits are realized. There can also be no assurance that the anticipated benefits of the transaction will be realized if the spin-off is completed, or that the costs or dis-synergies of the transaction (including costs of related restructuring transactions), will not exceed the anticipated amounts. Whether or not the spin-off is ultimately completed, the pendency of the transaction may impose challenges on the Company and its business, including potential business disruption; the diversion of management time on matters relating to the transaction; the impact on the Company’s ability to retain talent; and potential impacts on the Company’s relationships with its customers, employees, regulators, and other counterparties. In addition, while it is intended that the transaction would be tax-free to the Company’s stockholders for U.S. federal income tax purposes, there is no assurance that the transactions will qualify for this treatment. If the spin-off was ultimately determined to be taxable, the Company, the Health Care business, or the Company’s stockholders could incur income tax liabilities that could be significant. Any of these factors could negatively impact our business, financial condition, results of operations, cash flows, and the price of our common stock.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

Repurchases of 3M common stock are made to support the Company’s stock-based employee compensation plans and for other corporate purposes. In ~~February 2016,~~November 2018, 3M’s Board of Directors ~~authorized~~replaced the Company’s February 2016 repurchase program with a new repurchase program. This new program authorizes the repurchase of up to $10 billion of 3M’s outstanding common stock, with no pre-established end date.

Issuer Purchases of Equity

Securities (registered pursuant to

Section 12 of the Exchange Act)

Maximum

Approximate

Dollar Value of

Total Number of

Shares that May

Shares Purchased

Yet Be Purchased

Total Number of

Average Price

as Part of Publicly

under the Plans

Shares Purchased

Paid per

Announced Plans

or Programs

Period

(1)

Share

or Programs (2)

(Millions)

January 1-31, 2017

1,245,580

$
177.61

1,245,347

$
6,835

February 1-28, 2017

1,038,362

$
182.41

1,037,719

$
6,645

March 1-31, 2017

1,168,893

$
190.75

1,168,893

$
6,422

Total January 1-March 31, 2017

3,452,835

$
183.50

3,451,959

$
6,422

April 1-30, 2017

934,900

$
191.64

933,463

$
6,244

May 1-31, 2017

1,017,290

$
197.80

1,017,000

$
6,042

June 1-30, 2017

396,770

$
208.83

396,770

$
5,960

Total April 1-June 30, 2017

2,348,960

$
197.21

2,347,233

$
5,960

Total January 1-June 30, 2017

5,801,795

$
189.05

5,799,192

$
5,960

July 1-31, 2017

431,272

$
205.00

431,272

$
5,871

August 1-31, 2017

572,552

$
204.69

572,552

$
5,754

September 1-30, 2017

893,559

$
209.62

893,559

$
5,567

Total July 1-September 30, 2017

1,897,383

$
207.08

1,897,383

$
5,567

Total January 1-September 30, 2017

7,699,178

$
193.49

7,696,575

$
5,567


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (Millions)
January 1 - 31, 2023	1,445	$	113.34	—	$	4,157
February 1 - 28, 2023	1,240	117.49		—	4,157
March 1 - 31, 2023	—	—		—	4,157
January 1 - March 31, 2023	2,685	115.25		—
April 1 - 30, 2023	—	—		—	4,157
May 1 - 31, 2023	—	—		—	4,157
June 1 - 30, 2023	—	—		—	4,157
April 1 - June 30, 2023	—	—		—
January 1 - June 30, 2023	2,685	$	115.25	—

~~(1)~~

~~The total number of shares purchased includes: (i) shares purchased under the Board’s authorizations described above, and (ii) shares purchased in connection with the exercise of stock options.~~

(1)The total number of shares purchased includes: (i) shares purchased under the Board’s authorizations described above, and (ii) shares purchased in connection with the exercise of stock options.

~~(2)~~

~~The total number of shares purchased as part of publicly announced plans or programs includes shares purchased under the Board’s authorizations described above.~~

(2)The total number of shares purchased as part of publicly announced plans or programs includes shares purchased under the Board’s authorizations described above.

~~Table of Contents~~

Item 3. Defaults Upon Senior Securities. — No matters require disclosure.

Item 4.Mine SafetyDisclosures.

Pursuant to Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), the Company is required to disclose, in connection with the mines it operates, information concerning mine safety violations or other regulatory matters in its periodic reports filed with the SEC. The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Act is included in Exhibit 95 to this quarterly report.

Item 5. Other Information. ~~— No matters require disclosure.~~

Insider Trading Arrangements and Policies

During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Under Iran Threat Reduction and Syria Human Rights Act of 2012

The Company is making the following disclosure under Section 13(r) of the Exchange Act:

Protection of Intellectual Property Rights in Iran Pursuant to Specific License

As part of its intellectual property (“IP”) protection efforts, 3M has obtained and maintains patents and trademarks in Iran. Periodically, 3M pays renewal fees, through IP service providers/counsel located in Germany, Dubai and Iran, to the Iran Intellectual Property Office (“IIPO”) for these patents and trademarks and has sought to prosecute and defend such trademarks. On January 26, 2022, the Office of Foreign Assets Control (“OFAC”) granted to 3M a specific license to make payments to IIPO at its account in Bank Melli, which was designated on November 5, 2018 by OFAC under its counter terrorism authority pursuant to Executive Order 13224. As authorized by OFAC’s specific license, in the quarter ended June 30, 2023, 3M paid $67 as part of its intellectual property protection efforts in Iran. 3M plans to continue these activities, as authorized under the specific license.

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Item 6. Exhibits.


10.1				Settlement Agreement, dated as of June 22, 2023, of 3M Company is incorporated by reference from our Form 8-K dated June 22, 2023.
10.2			~~(12)~~	~~Calculation of ratio of earnings~~Amendment No. 1, dated July 7, 2023, to ~~fixed charges.~~the Five-Year Credit Agreement is incorporated by reference from our Form 8-K dated July 10, 2023.
(31.1)			~~(15)~~	~~A letter from the Company’s independent registered public accounting firm regarding unaudited interim consolidated financial statements.~~
	~~(31.1)~~	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(31.2)			~~(31.2)~~	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.1)			~~(32.1)~~	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.2)			~~(32.2)~~	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(95)			~~(95)~~	Mine Safety Disclosures.
(101.INS)			~~(101.INS)~~	Inline XBRL Instance ~~Document.~~ Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
(101.SCH)			~~(101.SCH)~~	Inline XBRL Taxonomy Extension Schema ~~Document.~~ Document
(101.CAL)			~~(101.CAL)~~	Inline XBRL Taxonomy Extension Calculation Linkbase ~~Document.~~ Document
(101.DEF)			~~(101.DEF)~~	Inline XBRL Taxonomy Extension Definition Linkbase ~~Document.~~ Document
(101.LAB)			~~(101.LAB)~~	Inline XBRL Taxonomy Extension Label Linkbase ~~Document.~~ Document
(101.PRE)			~~(101.PRE)~~	Inline XBRL Taxonomy Extension Presentation Linkbase ~~Document.~~ Document
(104)				Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

3M COMPANY

(Registrant)

~~Date: October 31, 2017~~


Date: July 25, 2023	By	~~/s/ Nicholas C. Gangestad~~
	By	~~Nicholas C. Gangestad,~~ /s/ Monish Patolawala
		Monish Patolawala,
~~Senior~~
	Executive Vice President and Chief Financial and Transformation Officer
~~(Mr. Gangestad~~ (Mr. Patolawala is ~~the~~a Principal Financial Officer and has
been duly authorized to sign on behalf of the Registrant.)


	December 31, 2016		Acquisition		Divestiture		Translation		September 30, 2017
(Millions)	Balance		activity		activity		and other		Balance
Industrial	$	2,536	$	—	$	—	$	128	$	2,664
Safety and Graphics		3,324		—		(276)		98		3,146
Health Care		1,609		6		—		59		1,674
Electronics and Energy		1,489		—		—		37		1,526
Consumer		208		—		—		3		211
Total Company	$	9,166	$	6	$	(276)	$	325	$	9,221


	Second Quarter 2017
(Millions)	Employee-Related
Industrial	$	39
Safety and Graphics		9
Health Care		2
Electronics and Energy		7
Consumer		36
Corporate and Unallocated		6
Total Expense	$	99



(Millions)	Employee-Related
Expense incurred in the second quarter of 2017	$	99
Accrued restructuring action balances as of June 30, 2017	$	99
Cash payments		(3)
Accrued restructuring action balances as of September 30, 2017	$	96



	Amount Reclassified from
Details about Accumulated Other	Accumulated Other Comprehensive Income
Comprehensive Income Components	Three months ended September 30,				Nine months ended September 30,				Location on Income
(Millions)	2017		2016		2017		2016		Statement
Gains (losses) associated with, defined benefit pension and postretirement plans amortization
Transition asset	$	—	$	—	$	—	$	1	See Note 9
Prior service benefit		21		22		65		69	See Note 9
Net actuarial loss		(140)		(125)		(422)		(377)	See Note 9
Total before tax		(119)		(103)		(357)		(307)
Tax effect		39		36		116		104	Provision for income taxes
Net of tax	$	(80)	$	(67)	$	(241)	$	(203)

Cash flow hedging instruments gains (losses)
Foreign currency forward/option contracts	$	(2)	$	24	$	21	$	105	Cost of sales
Interest rate swap contracts		—		—		—		(1)	Interest expense
Total before tax		(2)		24		21		104
Tax effect		—		(9)		(8)		(38)	Provision for income taxes
Net of tax	$	(2)	$	15	$	13	$	66
Total reclassifications for the period, net of tax	$	(82)	$	(52)	$	(228)	$	(137)


Nine months ended September 30, 2017	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(249)	Cost of sales	$	21	Cost of sales	$	—
Interest rate swap contracts		(6)	Interest expense		—	Interest expense		—
Total	$	(255)		$	21		$	—


Three months ended September 30, 2016	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(47)	Cost of sales	$	24	Cost of sales	$	—
Interest rate swap contracts		3	Interest expense		—	Interest expense		—
Total	$	(44)		$	24		$	—


Nine months ended September 30, 2016	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(178)	Cost of sales	$	105	Cost of sales	$	—
Interest rate swap contracts		(2)	Interest expense		(1)	Interest expense		—
Total	$	(180)		$	104		$	—


			Fair Value Measurements
Description	Fair Value at		Using Inputs Considered as
(Millions)	September 30, 2017		Level 1		Level 2		Level 3
Assets:
Available-for-sale:
Marketable securities:
Corporate debt securities	$	10	$	—	$	10	$	—
Commercial paper		446		—		446		—
Certificates of deposit/time deposits		84		—		84		—
Asset-backed securities:
Automobile loan related		14		—		14		—
Credit card related		29		—		29		—
U.S. municipal securities		20		—		—		20
Derivative instruments — assets:
Foreign currency forward/option contracts		55		—		55		—
Interest rate swap contracts		22		—		22		—

Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts		179		—		179		—
Interest rate swap contracts		3		—		3		—


				Weighted
				Average
		Weighted		Remaining	Aggregate
	Number of	Average		Contractual	Intrinsic Value
	Options	Exercise Price		Life (months)	(millions)
Under option —
January 1	36,196,232	$	112.07
Granted:
Annual	5,409,628		175.93
Exercised	(5,203,405)		90.05
Canceled	(137,827)		161.38
September 30	36,264,628	$	124.57	72	$	3,095
Options exercisable
September 30	25,532,812	$	107.67	59	$	2,610


	Three months ended		Nine months ended
(Earnings per diluted share)	September 30, 2017		September 30, 2017
Same period last year	$	2.15	$	6.28
Increase/(decrease) in earnings per share - diluted, due to:
Organic growth/productivity		0.23		0.53
Foreign exchange impacts		(0.03)		(0.12)
Income tax rate		0.01		0.21
Shares of common stock outstanding/net interest		0.02		0.08
Divestiture gains		—		0.56
Operating loss/(income) from divested businesses		0.01		—
Incremental strategic investments		(0.06)		(0.46)
Current period	$	2.33	$	7.08


	Three months ended June 30, 2022
(Dollars in millions, except per share amounts)	Net sales		Operating income (loss)		Operating income (loss) margin		Income (loss) before taxes		Provision (benefit) for income taxes		Effective tax rate		Net income (loss) attributable to 3M		Earnings per diluted share
Safety and Industrial
GAAP amounts			$	(707)	(24.2)	%
Adjustments for special items:
Net costs for significant litigation			1,337
Total special items			1,337
Adjusted amounts (non-GAAP measures)			$	630	21.5	%
Transportation and Electronics
GAAP amounts	$	2,268	$	475	21.0	%
Adjustments for special items:
Manufactured PFAS products	(318)		(20)
Total special items	(318)		(20)
Adjusted amounts (non-GAAP measures)	$	1,950	$	455	23.4	%
Total Company
GAAP amounts	$	8,702	$	110	1.3	%	$	60	$	(23)	(38.3)	%	$	78	$	0.14
Adjustments for special items:
Net costs for significant litigation	—		1,716				1,716		374				1,342		2.34
Manufactured PFAS products	(318)		(20)				(20)		(6)				(14)		(0.03)
Total special items	(318)		1,696				1,696		368				1,328		2.31
Adjusted amounts (non-GAAP measures)	$	8,384	$	1,806	21.6	%	$	1,756	$	345	19.8	%	$	1,406	$	2.45


	Three months ended September 30, 2017
	Organic
Worldwide	local-						Total
Sales Change Analysis	currency						sales
By Business Segment	sales		Divestitures		Translation		change

Industrial	6.1	%	(0.6)	%	0.7	%	6.2	%
Safety and Graphics	6.0		(4.9)		0.8		1.9
Health Care	6.9		—		0.8		7.7
Electronics and Energy	13.2		(0.1)		—		13.1
Consumer	1.9		—		0.3		2.2
Total Company	6.6	%	(1.2)	%	0.6	%	6.0	%


	Three months ended September 30, 2017
							Europe,			Latin
	United			Asia			Middle East			America/			Other
	States			Pacific			& Africa			Canada			Unallocated		Worldwide
Net sales (millions)	$	3,223		$	2,580		$	1,589		$	784		$	(4)	$	8,172
% of worldwide sales		39.4	%		31.6	%		19.4	%		9.6	%		—		100.0	%
Components of net sales change:
Volume — organic		3.8	%		13.4	%		3.3	%		4.4	%		—		6.6	%
Price		(0.2)			(0.6)			0.7			0.9			—		—
Organic local-currency sales		3.6			12.8			4.0			5.3			—		6.6
Divestitures		(1.6)			(0.5)			(0.8)			(2.1)			—		(1.2)
Translation		—			(1.5)			4.2			2.4			—		0.6
Total sales change		2.0	%		10.8	%		7.4	%		5.6	%		—		6.0	%

Total sales change:
Industrial		4.0	%		6.4	%		9.6	%		7.2	%		—		6.2	%
Safety and Graphics		(3.0)	%		6.2	%		8.7	%		(0.6)	%		—		1.9	%
Health Care		8.5	%		7.4	%		5.2	%		10.7	%		—		7.7	%
Electronics and Energy		(1.8)	%		19.2	%		4.8	%		8.3	%		—		13.1	%
Consumer		1.1	%		5.3	%		1.6	%		5.6	%		—		2.2	%

Organic local-currency sales change:
Industrial		5.0	%		8.7	%		5.2	%		5.6	%		—		6.1	%
Safety and Graphics		3.1	%		11.0	%		7.7	%		4.2	%		—		6.0	%
Health Care		8.5	%		8.8	%		1.6	%		8.6	%		—		6.9	%
Electronics and Energy		(1.5)	%		20.0	%		0.9	%		6.2	%		—		13.2	%
Consumer		1.1	%		7.1	%		(2.2)	%		2.7	%		—		1.9	%


	Three months ended September 30, 2017				Nine months ended September 30, 2017
Divestiture impacts and strategic investments net benefit/(cost) (in millions, except per share amounts)	Pre-tax impact		Impact per diluted share after-tax		Pre-tax impact		Impact per diluted share after-tax
Divestiture impacts:
2017 divestiture gains	$	—			$	490
Less: prior year divestiture gains		—				(40)
Year-on-year lost operating loss/(income) from divested businesses		10				(2)
Year-on-year divestiture impacts, net of lost operating loss/(income)	$	10	$	0.01	$	448	$	0.56
Strategic investments:
2017 portfolio and footprint optimization activities:
Restructuring actions and exit activities	$	—			$	(123)
Asset charges and accelerated depreciation		(24)				(140)
Other costs		(11)				(26)
Less: prior year portfolio and footprint optimization activities		6				21
Year-on-year portfolio and footprint optimization		(29)	$	(0.04)		(268)	$	(0.34)
Incremental year-on-year growth initiatives		(19)				(94)
Total incremental strategic investments	$	(48)	$	(0.06)	$	(362)	$	(0.46)
Year-on-year divestiture impacts and strategic investments net benefit/(cost)	$	(38)	$	(0.05)	$	86	$	0.10


Accounts receivable turns (non-GAAP measure)
(Millions, except turns)		September 30, 2017		December 31, 2016
Quarterly net sales	$	8,172	$	7,329
Ending accounts receivable - net	$	5,156	$	4,392
Accounts receivable turns		6.34		6.67


Inventory turns (non-GAAP measure)
(Millions, except turns)		September 30, 2017		December 31, 2016
Quarterly cost of sales	$	4,045	$	3,716
Less: Freight and engineering	$	165	$	160
Manufacturing cost	$	3,880	$	3,556
Ending inventory	$	3,975	$	3,385
Inventory turns		3.91		4.20


					Maximum
					Approximate
					Dollar Value of
				Total Number of	Shares that May
				Shares Purchased	Yet Be Purchased
	Total Number of	Average Price		as Part of Publicly	under the Plans
	Shares Purchased	Paid per		Announced Plans	or Programs
Period	(1)	Share		or Programs (2)	(Millions)
January 1-31, 2017	1,245,580	$	177.61	1,245,347	$	6,835
February 1-28, 2017	1,038,362	$	182.41	1,037,719	$	6,645
March 1-31, 2017	1,168,893	$	190.75	1,168,893	$	6,422
Total January 1-March 31, 2017	3,452,835	$	183.50	3,451,959	$	6,422
April 1-30, 2017	934,900	$	191.64	933,463	$	6,244
May 1-31, 2017	1,017,290	$	197.80	1,017,000	$	6,042
June 1-30, 2017	396,770	$	208.83	396,770	$	5,960
Total April 1-June 30, 2017	2,348,960	$	197.21	2,347,233	$	5,960
Total January 1-June 30, 2017	5,801,795	$	189.05	5,799,192	$	5,960
July 1-31, 2017	431,272	$	205.00	431,272	$	5,871
August 1-31, 2017	572,552	$	204.69	572,552	$	5,754
September 1-30, 2017	893,559	$	209.62	893,559	$	5,567
Total July 1-September 30, 2017	1,897,383	$	207.08	1,897,383	$	5,567
Total January 1-September 30, 2017	7,699,178	$	193.49	7,696,575	$	5,567