What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-10-25 compared with 2022-07-27 · 221 added, 161 removed, 534 unchanged (42% of the section changed)

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Due to the speed with which the COVID-19 situation continues to develop and evolve and the uncertainty of its duration and the timing of recovery, 3M is not able at this time to predict the extent to which the COVID-19 pandemic may have a material effect on its consolidated results of operations or financial condition.

During the first six month of 2022, 3M's costs for significant litigation (see Certain amounts adjusted for special items - (non-GAAP measures section below) included, among things, pre-tax charges associated with steps toward resolving Combat Arms Earplugs litigation and associated with additional commitments to address PFAS-related maters at its Zwijndrecht, Belgium site (approximately $1.2 billion and $355 million, respectively, in the second quarter of 2022).

During the first nine months of 2022, 3M's costs for significant litigation (see Certain amounts adjusted for special items - (non-GAAP measures section below) totaled approximately $2.2 billion pre-tax and included, among things, pre-tax charges associated with steps toward resolving Combat Arms Earplugs litigation and associated with additional commitments to address PFAS-related matters at its Zwijndrecht, Belgium site (approximately $1.3 billion and $355 million, respectively, in the first nine months of 2022).

These matters are further discussed in Note 14.

3M is experiencing interruption to a portion of the manufacturing at its site in Zwijndrecht, Belgium as more fully discussed in Note 14.

3M is also impacted by the Russia-Ukraine conflict.

Relevant risk factors can be found in Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q.

As discussed in Note 14, 3M received approval in June 2022 to begin the process toward restarting manufacturing operations at the Zwijndrecht facility.

The process for restarting previously-idled operations at the facility is progressing according to plan.

In the third quarter of 2022, 3M also completed the split-off of its Food Safety Division business resulting in a pre-tax gain of $2.7 billion.

See Certain amounts adjusted for special items - (non-GAAP measures) section below for additional discussion of these and other special items.

3M Belgium has experienced interruptions to portions of the manufacturing at its site in Zwijndrecht, Belgium, as more fully discussed in Note 14 .

As discussed in Note 14, 3M Belgium received agreement with authorities in June 2022 to begin the process toward restarting operations at the Zwijndrecht facility.

3M Belgium has provided information required by the Flemish environmental authorities to receive agreement from the authorities to restart operations, and has done so for production or sampling purposes.

Belgian government authorities continue to maintain oversight of these operations and compliance with applicable requirements.

With respect to the Russia-Ukraine conflict, the business and operational environment in Russia is impacted by, among other things, Russian laws and regulations as well as sanctions imposed by the U.S.

and other governments.

In light of the conflict, in March 2022, 3M suspended operations of its subsidiaries in Russia, the net sales of which was less than one percent of 3M’s consolidated net sales for 2021.

If the environment were to deteriorate, such as a lack of currency exchangeability coupled with an acute degradation in the ability to make key operational decisions, a need to deconsolidate these subsidiaries' operations could arise.

Additionally, the Company continues to evaluate options, some of which could lead to termination of activities of these subsidiaries and substantially their liquidation.

3M monitors factors such as its ability to access various exchange mechanisms;

the impact of government regulations on the Company’s ability to manage its Russian subsidiaries' capital structure, purchasing, product pricing, and labor relations;

and the current political and economic situation.

Based upon a review of factors as of June 30, 2022, the Company continues to consolidate its Russian subsidiaries.

As of June 30, 2022, the balance of accumulated other comprehensive loss associated with these subsidiaries was approximately $40 million and the amount of intercompany receivables due from these subsidiaries and their total net assets was approximately $90 million.

3M is also impacted by the Russia-Ukraine conflict.

In light of a number of factors, 3M suspended operations of its subsidiaries in Russia in March 2022, the net sales of which were less than one percent of 3M’s consolidated net sales for 2021.

Further, in September 2022, management committed to a plan to exit and dispose of the related net assets through an intended sale of the subsidiaries.

The associated charge in the third quarter of 2022 related to this action is further discussed in Note 13.

3M also has other operations that source certain raw materials from suppliers in Russia and have experienced related supply disruption due to the conflict.

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Though 3M monitors relevant factors as well as options to mitigate potential impacts, it is not able to predict the extent to which these circumstances may have a material effect on 3M’s consolidated results of operations or financial condition.

Relevant risk factors can be found in Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q.

Operating income margin and earnings per share attributable to 3M common shareholders – diluted:

The following table provides the increases (decreases) in operating income margins and diluted earnings per share for the three and six months ended June 30, 2022 and 2021.

The following table provides the increases (decreases) in operating income margins and diluted earnings per share for the three and nine months ended September 30, 2022 and 2021.

Three months ended

June 30, 2022 Six months ended

June 30, 2022

September 30, 2022 Nine months ended

September 30, 2022

net sales Earnings per

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Raw material impact (2.6) (0.31) (2.7) (0.97)

Divestitures — (0.02) — (0.02)

Foreign exchange impacts 0.1 (0.12) — (0.28)

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Net costs for significant litigation (3.1) (0.37) (8.5) (3.10)

Divestiture costs (0.1) (0.01) — (0.01)

Gain on business divestitures 31.6 4.71 10.4 4.69

Divestiture-related restructuring actions (0.5) (0.05) (0.2) (0.06)

Russia exit charges (1.2) (0.20) (0.4) (0.19)

Total special items 26.7 4.08 1.3 1.33

Current period 48.2 % $ 6.77 22.6 % $ 9.15

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Total organic growth/productivity and other:

• For the second quarter of 2022, the following components impacted operating margins and earnings per diluted share year-on-year:

• For the third quarter of 2022, the following components impacted operating margins and earnings per diluted share year-on-year:

◦ Declines in disposable respirator demand year-on-year negatively impacted operating margins by 0.3 percent and earnings per share by $0.07.

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▪ Strong pricing, spending discipline and benefits from restructuring actions taken in 2021

▪ Manufacturing headwinds from global supply chain challenges, including geopolitical impacts due to the Russia/Ukraine conflict as well as the COVID related shutdown in China

▪ Second quarter of 2021 pre-tax benefit of $91 million pre-tax ($0.12 per share after tax) from the impact of the favorable decision of the Brazilian Supreme Court regarding the calculation of past social taxes

▪ Recovery of sales backlog in China from earlier 2022 COVID-related shutdowns

▪ Manufacturing headwinds from global supply chain challenges;

geopolitical impacts due to the Russia/Ukraine conflict

▪ Increased investments in growth, productivity and sustainability

• For the first six months of 2022, the following components impacted operating margins and earnings per diluted share year-on-year:

• For the first nine months of 2022, the following components impacted operating margins and earnings per diluted share year-on-year:

◦ Declines in disposable respirator demand year-on-year negatively impacted operating margins by 0.3 percent and earnings per share by $0.19.

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▪ Strong pricing, spending discipline and benefits from restructuring actions taken in 2021

▪ Manufacturing headwinds from global supply chain challenges, including geopolitical impacts due to the Russia/Ukraine conflict as well as the COVID related shutdown in China

▪ Manufacturing headwinds from global supply chain challenges;

geopolitical impacts due to the Russia/Ukraine conflict as well as the COVID-related shutdown in China, offset by China backlog recovery later in 2022

▪ Second quarter of 2021 benefit of $91 million pre-tax ($0.12 per share after tax) from the impact of the favorable decision of the Brazilian Supreme Court regarding the calculation of past social taxes

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• 3M continued to experience inflationary pressures with year-on-year increases in raw material and logistics costs.

Divestitures:

• Divestiture impact includes lost income from divested businesses and remaining stranded costs (net of transition arrangement income).

3M completed the split-off of the Food Safety business in September 2022 (discussed in Note 3).

The impact also includes lost income from deconsolidation of the Aearo Entities in July 2022 (discussed in Note 14).

Foreign exchange impacts

• Foreign currency impacts (net of hedging) decreased operating income by approximately $84 million (or a decrease of pre-tax earnings by approximately $95 million) year-on-year for the second quarter of 2022 and decreased operating income by approximately $111 million (or a decrease of pre-tax earnings by approximately $121 million) year-on-year for the first six months of 2022 primarily the result of the strength of the U.S.

• Foreign currency impacts (net of hedging) decreased operating income by approximately $88 million (or a decrease of pre-tax earnings by approximately $87 million) year-on-year for the third quarter of 2022 and decreased operating income by approximately $199 million (or a decrease of pre-tax earnings by approximately $208 million) year-on-year for the first nine months of 2022, primarily resulting from the strength of the U.S.

These estimates include:

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Other expense (income), net:

• Lower income related to non-service cost components of pension and postretirement expense increased expense year-on-year for the first three and six months of 2022.

• Interest expense (net of interest income) increased for the three months ended June 30, 2022 compared to the same period year-on-year and decreased for the six months ended June 30, 2022 compared to the same period year-on-year.

• Lower income related to non-service cost components of pension and postretirement expense increased expense year-on-year for the third quarter and first nine months of 2022.

• Interest expense (net of interest income) decreased for the third quarter and first nine months of 2022 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 2022 was (38.3) percent, a decrease from 21.5 percent in the prior year.

The effective tax rate for the first six months of 2022 was 16.8 percent, as compared to 18.9 percent in the prior year.

The primary factor that decreased the Company's effective tax rate for both periods was the tax impact associated with the second quarter 2022 charge related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14).

• On an adjusted basis (as discussed below), the effective tax rate for the second quarter and first six months of 2022 was 19.8 percent and 18.7 percent, respectively, a decrease of 1.8 percentage points and a decrease of 0.5 percent, respectively, compared to the same period year-on-year.

Overall, the effective tax rate for the third quarter of 2022 was 6.6 percent, a decrease from 18.4 percent in the prior year.

The effective tax rate for the first nine months of 2022 was 9.5 percent, as compared to 18.8 percent in the prior year.

The primary factor that decreased the Company's effective tax rate for third quarter 2022 was the tax efficient structure associated with the third quarter 2022 gain on split-off of the Food Safety business (see Note 3).

The primary factors that decreased the Company's effective tax rate for the first nine months of 2022 were the tax efficient structure associated with the third quarter 2022 gain on split-off of the Food Safety business (see Note 3) and the tax impact associated with the second quarter 2022 charge related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14).

• On an adjusted basis (as discussed below), the effective tax rate for the third quarter and first nine months of 2022 was 16.2 percent and 17.9 percent, respectively, a decrease of 2.3 percentage points and a decrease of 1.1 percent, respectively, compared to the same period year-on-year.

Shares of common stock outstanding:

• Lower shares outstanding increased earnings per share year-on-year for the first three and six months of 2022.

• Lower shares outstanding increased earnings per share year-on-year for the third quarter and first nine months of 2022.

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

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Net costs include the impacts of any changes in accrued liabilities, external legal fees, and insurance recoveries, along with associated tax impacts.

Net costs related to respirator mask/asbestos and Combat Arms Earplugs matters are reflected as special items in the Safety and Industrial business segment while those associated with PFAS-related other environmental matters are primarily reflected as corporate special items in Corporate and Unallocated.

Prior to initiating voluntary chapter 11 bankruptcy proceedings in July 2022, net costs related to Combat Arms Earplugs and Aearo-respirator mask/asbestos matters along with non-Aearo respirator mask/asbestos matters were reflected as special items in the Safety and Industrial business segment.

During the bankruptcy period, net costs related to Combat Arms Earplugs and Aearo-respirator mask/asbestos matters are reflected as corporate special items in Corporate and Unallocated while those associated with non-Aearo respirator mask/asbestos matters continue to be reflected as special items in the Safety and Industrial business segment.

Net costs associated with PFAS-related other environmental matters are primarily reflected as corporate special items in Corporate and Unallocated.

Divestiture costs:

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

Gain on business divestitures:

• In the third quarter of 2022, 3M recorded a gain related to the split-off and combination of its Food Safety business with Neogen Corporation.

Refer to Note 3 for further details.

Divestiture-related restructuring actions:

• In the third quarter of 2022, following the split-off of the Food Safety business (see Note 3), management approved and committed to undertake certain restructuring actions addressing corporate functional costs across 3M in relation to the magnitude of amounts previously allocated to the divested business.

Refer to Note 5 for further details.

Russia exit charges:

• In the third quarter of 2022, 3M recorded a charge primarily related to impairment of net assets in Russia in connection with management's committed exit and disposal plan.

Refer to Note 13 for further details.

Operating Income (Loss)

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Rate Net Income

Attrib-utable to

3M Earnings per

Attributable to 3M Earnings per

Diluted Share Earnings per

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percent change

Three months ended June 30, 2021 GAAP

Three months ended September 30, 2021 GAAP

$ 562 18.7% $ 1,788 20.0 % $ 1,757 $ 324 18.4 % $ 1,434 $ 2.45

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Net costs for significant litigation 60 97 97 18 79 0.13

Three months ended June 30, 2021 adjusted amounts (non-GAAP measures)

Three months ended September 30, 2021 adjusted amounts (non-GAAP measures)

$ 622 20.7% $ 1,885 21.1 % $ 1,854 $ 342 18.5 % $ 1,513 $ 2.58

Three months ended June 30, 2022 GAAP

Three months ended September 30, 2022 GAAP

$ 652 22.5% $ 4,156 48.2 % $ 4,132 $ 271 6.6 % $ 3,859 $ 6.77 177 %

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Net costs for significant litigation 21 267 267 57 210 0.37

Three months ended June 30, 2022 adjusted amounts (non-GAAP measures)

Divestiture costs — 6 6 2 4 0.01

Gain on business divestitures — (2,724) (2,724) (39) (2,685) (4.71)

Divestiture-related restructuring actions — 41 41 9 32 0.05

Russia exit charges — 109 109 (2) 111 0.20

Total special items $ 21 $ (2,301) $ (2,301) $ 27 $ (2,328) (4.08)

Three months ended September 30, 2022 adjusted amounts (non-GAAP measures)

$ 673 23.2% $ 1,855 21.5 % $ 1,831 $ 298 16.2 % $ 1,531 $ 2.69 4 %

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Rate Net Income

Attrib-utable to

3M Earnings per

Attributable to 3M Earnings per

Diluted Share Earnings per

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percent change

Six months ended June 30, 2021 GAAP

Nine months ended September 30, 2021 GAAP

$ 1,976 21.6% $ 5,753 21.5 % $ 5,640 $ 1,058 18.8 % $ 4,582 $ 7.81

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Net costs for significant litigation 177 359 359 80 279 0.47

Six months ended June 30, 2021 adjusted amounts (non-GAAP measures)

Nine months ended September 30, 2021 adjusted amounts (non-GAAP measures)

$ 2,153 23.6% $ 6,112 22.9 % $ 5,999 $ 1,138 19.0 % $ 4,861 $ 8.28

Six months ended June 30, 2022 GAAP

Nine months ended September 30, 2022 GAAP

$ 581 6.6% $ 5,907 22.6 % $ 5,795 $ 550 9.5 % $ 5,236 $ 9.15 17 %

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Net costs for significant litigation 1,421 2,233 2,233 456 1,777 3.10

Six months ended June 30, 2022 adjusted amounts (non-GAAP measures)

Divestiture costs — 6 6 2 4 0.01

Gain on business divestitures — (2,724) (2,724) (39) (2,685) (4.69)

Divestiture-related restructuring actions — 41 41 9 32 0.06

Russia exit charges — 109 109 (2) 111 0.19

Total special items $ 1,421 $ (335) $ (335) $ 426 $ (761) $ (1.33)

Nine months ended September 30, 2022 adjusted amounts (non-GAAP measures)

$ 2,002 22.6% $ 5,572 21.3 % $ 5,460 $ 976 17.9 % $ 4,475 $ 7.82 (6) %

Sales and operating income (loss) by business segment:

The following tables contain sales and operating income (loss) results by business segment for the three and six months ended June 30, 2022 and 2021.

The following tables contain sales and operating income (loss) results by business segment for the three and nine months ended September 30, 2022 and 2021.

Refer to the section entitled “Performance by Business Segment” later in MD&A for additional discussion concerning 2022 versus 2021 results, including Corporate and Unallocated.

Refer to Note 16 for additional information on business segments.

Three months ended June 30,

Three months ended September 30,

2022 2021 % change

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Income (Loss) Net

Income (Loss)

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Total Company $ 8,619 $ 4,156 $ 8,942 $ 1,788 (3.6) % 132.5 %

Six months ended June 30,

Nine months ended September 30,

2022 2021 % change

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Income (Loss) Net

Income (Loss)

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Total Company $ 26,150 $ 5,907 $ 26,743 $ 5,753 (2.2) % 2.7 %

Three months ended June 30, 2022

Three months ended September 30, 2022

Worldwide Sales Change

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Total Company 2.0 — (0.5) (5.1) (3.6)

Six months ended June 30, 2022

Nine months ended September 30, 2022

Worldwide Sales Change

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Sales by geographic area:

Percent change information compares the three and six months ended June 30, 2022 with the same period last year, unless otherwise indicated.

Percent change information compares the three and nine months ended September 30, 2022 with the same period last year, unless otherwise indicated.

Additional discussion of business segment results is provided in the Performance by Business Segment section.

Three months ended June 30, 2022

Three months ended September 30, 2022

Americas Asia

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Total sales change 1.1 % (6.0) % (13.4) % (3.6) %

Six months ended June 30, 2022

Nine months ended September 30, 2022

Americas Asia

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

• For the second quarter of 2022, in the Americas geographic area, U.S.

total sales increased 2 percent which included increased organic sales of 2 percent.

• For the third quarter of 2022, in the Americas geographic area, U.S.

total sales was flat which included flat organic sales.

Total sales in Mexico increased 8 percent which included increased organic sales of 14 percent.

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In Brazil, total sales increased 9 percent which included increased organic sales of 11 percent.

In the Asia Pacific geographic area, China total sales decreased 11 percent which included decreased organic sales of 8 percent.

In Japan, total sales decreased 11 percent which included increased organic sales of 1 percent.

• For the first six months of 2022, in the Americas geographic area, U.S.

In the Asia Pacific geographic area, China total sales increased 3 percent which included increased organic sales of 8 percent.

In Japan, total sales decreased 17 percent which included flat organic sales.

• For the first nine months of 2022, in the Americas geographic area, U.S.

total sales increased 1 percent which included increased organic sales of 1 percent.

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The stronger U.S.

dollar had a negative impact on sales in the first three and six months of 2022 compared to the same periods last year.

Net of the Company’s hedging strategy, foreign currency negatively impacted earnings in the first three and six months of 2022 compared to the same period last year.

dollar had a negative impact on sales in the third quarter and first nine months of 2022 compared to the same periods last year.

Net of the Company’s hedging strategy, foreign currency negatively impacted earnings in the third quarter and first nine months of 2022 compared to the same period last year.

3M utilizes a number of tools to manage currency risk related to earnings including natural hedges such as pricing, productivity, hard currency, hard currency-indexed billings, and localizing source of supply.

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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 six months of 2022, the Company purchased $773 million of its own stock, compared to $734 million of stock purchases in the first six months of 2021.

As of June 30, 2022, approximately $4.8 billion remained available under the authorization.

In the first nine months of 2022, the Company purchased $928 million of its own stock, compared to $1,261 million of stock purchases in the first nine months of 2021.

As of September 30, 2022, approximately $4.7 billion remained available under the authorization.

In February 2022, 3M’s Board of Directors declared a first-quarter 2022 dividend of $1.49 per share, an increase of 1 percent.

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In May 2022, 3M's Board of Directors declared a second-quarter dividend of $1.49 per share.

3M expects to contribute approximately $200 million of cash to its global defined benefit pension and postretirement plans in 2022.

In August 2022, 3M's Board of Directors declared a third-quarter dividend of $1.49 per share.

3M expects to contribute approximately $100 million to $200 million of cash to its global defined benefit pension and postretirement plans in 2022.

The Company does not have a required minimum cash pension contribution obligation for its U.S.

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June 30, Six months ended

September 30, Nine months ended

September 30,

(Percent of net sales) 2022 2021 Change 2022 2021 Change

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Research, development and related expenses (R&D) 5.4 5.4 — 5.4 5.7 (0.3)

Gain on business divestitures (31.6) — (31.6) (10.4) — (10.4)

Operating income margin 48.2 % 20.0 % 28.2 % 22.6 % 21.5 % 1.1 %

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and research, development and related expenses (R&D).

The year-on-year decrease in defined benefit pension and postretirement service cost expense for the second quarter and first six months of 2022 was approximately $18 million and $34 million.

The year-on-year decrease in defined benefit pension and postretirement service cost expense for the third quarter and first nine months of 2022 was approximately $19 million and $53 million.

For total year 2021, the Company recognized consolidated defined benefit pre-tax pension and postretirement service cost expense of $503 million and a benefit of $297 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 $206 million.

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Cost of Sales:

Cost of sales, measured as a percent of sales, increased in the first three and six months of 2022 when compared to the same periods last year.

Increases were primarily due to 2022 special item costs for significant litigation from additional commitments to address PFAS-related maters at 3M's Zwijndrecht, Belgium site (discussed in Note 14), higher raw materials and logistics costs, manufacturing productivity headwinds which were further magnified by the combined impact of COVID-related lockdowns in China and the shutdown of certain operations in Belgium, compensation and benefit costs, and investments in growth, productivity and sustainability.

Cost of sales, measured as a percent of sales, increased in the third quarter and first nine months of 2022 when compared to the same periods last year.

Increases were primarily due to 2022 special item costs for significant litigation from additional commitments to address PFAS-related maters at 3M's Zwijndrecht, Belgium site (discussed in Note 14), higher raw materials and logistics costs, manufacturing productivity headwinds which were further magnified by the shutdown of certain operations in Belgium and progress on restarting previously-idled operations, and investments in growth, productivity and sustainability.

Selling, General and Administrative Expenses:

SG&A, measured as a percent of sales, increased in the first three and six months of 2022 when compared to the same period last year.

SG&A was impacted by increased special item costs for significant litigation primarily related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14) resulting in a 2022 second quarter pre-tax charge of approximately $1.2 billion, compensation and benefit costs, and continued investment on key growth initiatives.

SG&A, measured as a percent of sales, increased in the third quarter and first nine months of 2022 when compared to the same period last year.

SG&A was impacted by increased special item costs for significant litigation primarily related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14) resulting in a 2022 second quarter pre-tax charge of approximately $1.2 billion and other subsequent impacts, costs related to exiting Russia (see Note 13), divestiture-related restructuring charges (see Note 5), and continued investment on key growth initiatives.

Cost increases were partially offset by restructuring benefits and ongoing general 3M cost management.

Research, Development and Related Expenses:

R&D, measured as a percent of sales, decreased in the first three and six months of 2022 when compared to the same period last year.

R&D, measured as a percent of sales, was flat in the third quarter and decreased in first nine months of 2022 when compared to the same period last year.

3M continues to invest in a range of R&D activities from application development, product and manufacturing support, product development and technology development aimed at disruptive innovations.

Gain on Business Divestitures:

In the third quarter of 2022, 3M recorded a pre-tax gain of $2.7 billion ($2.7 billion after tax) related to the split-off and combination of its Food Safety business with Neogen Corporation.

Refer to Note 3 for further details.

Other Expense (Income), Net:

See Note 6 for a detailed breakout of this line item.

Interest expense (net of interest income) increased in the second quarter of 2022 primarily driven by foreign exchange;

net interest decreased in the first six months of 2022 compared to the same period year-on-year due to an early debt extinguishment pre-tax charge in the first quarter of 2021 and generation of incremental interest income.

The non-service pension and postretirement net benefit decreased approximately $13 million and $25 million in the first three and six months of 2022, respectively, compared to the same period year-on-year.

Interest expense (net of interest income) decreased in the third quarter of 2022 primarily due to prior period debt maturities and foreign exchange;

net interest decreased in the first nine months of 2022 compared to the same period year-on-year due to an early debt extinguishment pre-tax charge in the first quarter of 2021 and generation of incremental interest income.

The non-service pension and postretirement net benefit decreased approximately $15 million and $40 million in the third quarter and first nine months of 2022, respectively, compared to the same period year-on-year.

Provision for Income Taxes:

Three months ended

June 30, Six months ended

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September 30,

(Percent of pre-tax income) 2022 2021 2022 2021

Effective tax rate 6.6 % 18.4 % 9.5 % 18.8 %

The primary factor that decreased the Company’s effective tax rate for the second quarter of 2022 and first six months of 2022 versus the same period in the prior year was the tax impact associated with the second quarter 2022 charge related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14).

3M currently estimates its effective tax rate for 2022 to be approximately 17.5 to 18.5 percent.

The tax rate can vary from quarter to quarter due to discrete items, such as the settlement of income tax audits, changes in tax laws, and employee share-based payment accounting;

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June 30, Six months ended

September 30, Nine months ended

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(Millions) 2022 2021 2022 2021

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(Millions) 2022 2021 2022 2021

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Corporate and Unallocated operating income includes “corporate special items” and “other corporate expense-net”.

Corporate special items include net costs for significant litigation associated with PFAS-related other environmental matters (see Note 14), gain/loss on sale of businesses (see Note 3), and divestiture-related restructuring costs.

Corporate special items include net costs for significant litigation associated with Combat Arms Earplugs and Aearo-respirator mask/asbestos matters during the chapter 11 bankruptcy period (which began in July 2022) and with PFAS-related other environmental matters (see Note 14).

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 (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 staff and centrally managed material resource centers of expertise costs, corporate philanthropic activity, and other net costs that 3M may choose not to allocate directly to its business segments.

Other corporate expense-net also includes costs and income from contract manufacturing, transition services and other arrangements with the acquirer of the former Drug Delivery business following its 2020 divestiture.

Other corporate expense-net also includes costs and income from transition supply, manufacturing and service arrangements with Neogen Corporation following the split-off of 3M's Food Safety business in 2022 and with the acquirer of the former Drug Delivery business following its 2020 divestiture.

Items classified as revenue from this activity are included in Corporate and Unallocated net sales.

Because 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 in the first three and six months of 2022, when compared to the same period last year.

Corporate and Unallocated operating expenses decreased in the third quarter and first nine months of 2022, when compared to the same period last year.

The subsections below provide additional information.

Corporate Special Items

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section for additional details on the impact of net costs for significant litigation, gain/loss on sale of businesses, and divestiture-related restructuring actions.

Corporate special item net costs increased in the first three and six months of 2022 year over year primarily due to additional commitments in 2022 to address PFAS-related maters at 3M's Zwijndrecht, Belgium site (discussed in Note 14),

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section for additional details on the impact of special items and to Note 16 for addition information on the components of corporate special items.

Corporate special item net costs decreased in the third quarter and first nine months of 2022 year over year primarily due to the gain on divestiture associated with the 2022 split-off of the Food Safety business (discussed in Note 3) partially offset by additional commitments in 2022 to address PFAS-related matters, including at 3M's Zwijndrecht, Belgium site (discussed in Note 14).

Other Corporate Expense - Net

Other corporate operating expenses, net, increased in the first three and six months of 2022, when compared to the same period last year primarily due to a $91 million pre-tax benefit from the impact of the favorable decision of the Brazilian Supreme Court included in the second quarter of 2021 regarding the calculation of past social taxes.

Other corporate operating expenses, net, increased when compared to the same period last year primarily due to a $91 million pre-tax benefit from the impact of the favorable decision of the Brazilian Supreme Court included in the second quarter of 2021 regarding the calculation of past social taxes.

Operating Business Segments:

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The preceding table also displays business segment operating income (loss) information adjusted for special items.

For Safety and Industrial these adjustments include net costs for respirator mask/asbestos and Combat Arms Earplugs litigation matters.

For Safety and Industrial these adjustments include net costs for respirator mask/asbestos (Aearo-related and non-Aearo related) and Combat Arms Earplugs litigation matters.

During the Aearo chapter 11 bankruptcy period (which began in July 2022 — see Note 14), net costs related to Combat Arms Earplugs and Aearo-respirator mask/asbestos matters are reflected as corporate special items in Corporate and Unallocated while those associated with non-Aearo respirator mask/asbestos matters continue to be reflected as special items in the Safety and Industrial business segment.

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section for additional details.

Second quarter 2022 results:

Third quarter 2022 results:

Sales in Safety and Industrial were down 3.7 percent in U.S.

On an organic sales basis:

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

• Growth from continued improving general industrial manufacturing activity and other end-market demand was partially offset by the disposable respirator sales decline within personal safety, which negatively impacted year-on-year second quarter organic growth by 5.7 percent.

COVID-related lockdowns in China also negatively impacted growth.

Business segment operating income margins decreased year-on-year due to special item costs for significant litigation primarily related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14) resulting in a 2022 second quarter pre-tax charge of approximately $1.2 billion.

Margins were also impacted by manufacturing productivity headwinds further magnified by the COVID-related lockdowns in China, partially offset by spending discipline and benefits from restructuring actions.

Adjusting for special item costs for significant litigation (non-GAAP measure), business segment operating income margins decreased year-on-year as displayed above.

First six months 2022 results:

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

• Growth from continued improving general industrial manufacturing activity, other end-market demand and backlog recovery from the 2022 second quarter COVID-related lockdowns in China were partially offset by the disposable respirator sales decline within personal safety, which negatively impacted year-on-year third quarter organic growth by 4.6 percentage points.

Business segment operating income margins increased year-on-year from selling price actions, strong spending discipline and restructuring actions which more than offset increased raw materials and logistics costs and manufacturing productivity headwinds.

Adjusting for special item costs for significant litigation (non-GAAP measure), business segment operating income margins increased year-on-year as displayed above.

First nine months 2022 results:

Sales in Safety and Industrial were down 2.9 percent in U.S.

On an organic sales basis:

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

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

Margins were also impacted by increased raw materials and logistics costs, manufacturing productivity headwinds further magnified by the COVID related lockdowns in China, partially offset by selling price actions, spending discipline and benefits from restructuring actions.

Margins were also impacted by increased raw materials and logistics costs, manufacturing productivity headwinds, partially offset by selling price actions, spending discipline and restructuring actions.

Adjusting for special item costs for significant litigation (non-GAAP measure), business segment operating income margins decreased year-on-year as displayed above.

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Organic sales 3.0 % 1.1 %

Divestitures (0.8) (0.3)

Translation (6.0) (4.1)

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Percent of sales 21.2 % 18.7 % 21.1 % 21.2 %

Second quarter 2022 results:

Third quarter 2022 results:

Sales in Transportation and Electronics were down 3.8 percent in U.S.

On an organic sales basis:

• Sales increased in advanced materials, commercial solutions, and automotive and aerospace, and decreased in electronics and transportation safety.

• Growth was held back by the COVID-related lockdowns in China along with the ongoing impacts of the semiconductor supply chain constraints on the automotive and consumer electronics end-markets.

Business segment operating income margins decreased year-on-year due to manufacturing productivity headwinds from the combined impact of COVID-related lockdowns in China and the continued shutdown during Q2 of certain operations in Belgium, partially offset by strong spending discipline and benefits from restructuring actions.

First six months 2022 results:

• Sales increased in automotive and aerospace, commercial solutions, and advanced materials, and decreased in transportation safety and electronics.

• Growth benefited from continued COVID-related backlog recovery in the greater China region which was partially offset by increased weakness in consumer electronics demand, along with the continued constraints in the semiconductor supply chain.

Divestitures:

• Divestiture impact relates to lost Transportation and Electronics sales year-on-year from deconsolidation of the Aearo Entities in July 2022.

First nine months 2022 results:

Sales in Transportation and Electronics were down 3.3 percent in U.S.

On an organic sales basis:

• Sales increased in commercial solutions and advanced materials, and decreased in automotive and aerospace, electronics and transportation safety.

• Growth was held back by the ongoing impacts of the semiconductor supply chain constraints on the automotive and consumer electronics end-markets along with the COVID-related lockdowns in China.

Business segment operating income margins decreased year-on-year due to increased raw materials and logistics costs, manufacturing productivity headwinds which were further magnified by the combined impact of COVID-related lockdowns in China and the shutdown of certain operations in Belgium and investments in auto electrification, partially offset by selling price actions, strong spending discipline and benefits from restructuring actions.

• Sales increased in commercial solutions, automotive and aerospace and advanced materials, and decreased in electronics and transportation safety.

• Growth was held back by the ongoing impacts of the semiconductor supply chain constraints on the automotive and consumer electronics end-markets.

Divestitures:

• Divestiture impact relates to lost Transportation and Electronics sales year-on-year from deconsolidation of the Aearo Entities in July 2022.

Business segment operating income margins decreased year-on-year due to increased raw materials and logistics costs, manufacturing productivity headwinds which were further magnified by the shutdown of certain operations in Belgium and investments in auto electrification, partially offset by selling price actions, strong spending discipline and restructuring actions.

Health Care Business:

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Organic sales 1.7 % 3.7 %

Divestitures (1.3) (0.5)

Translation (4.8) (3.6)

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Percent of sales 21.8 % 23.5 % 21.9 % 23.8 %

Second quarter 2022 results:

Sales in Health Care were up 0.6 percent in U.S.

Third quarter 2022 results:

Sales in Health Care were down 4.4 percent in U.S.

On an organic sales basis:

• Sales increased in separation and purification, health information systems, medical solutions, and oral care, and were flat in food safety.

• Sales increased in medical solutions and oral care, but continue to be impacted by COVID-related trends on elective procedure volumes.

• Sales increased in health information systems due to strong growth in revenue cycle management.

• Sales increased in separation and purification with sustained demand for biopharma filtration solutions for COVID-related vaccines.

Business segment operating income margins decreased year-on-year due to manufacturing productivity headwinds, investments in the business and transaction-related costs associated with the announced divestiture of the food safety business (see Note 3), partially offset by benefits from leverage on sales growth, strong spending discipline and benefits from restructuring actions.

• Sales increased in medical solutions, food safety, separation and purification, and health information systems, and decreased in oral care.

• Sales continue to be impacted by COVID-related trends on elective procedure volumes and ongoing inflationary pressures.

Divestitures:

• Divestiture impact relates to the lost sales year-on-year from the Food Safety Division split-off transaction in September 2022.

Business segment operating income margins decreased year-on-year due to increased raw materials and logistics costs, manufacturing productivity headwinds, and investments in the business, partially offset by selling price actions, strong spending discipline and benefits from restructuring actions.

As discussed in Note 3, in July 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.

The Company expects to complete the transaction by year-end 2023.

First six months 2022 results:

Sales in Health Care were up 1.6 percent in U.S.

First nine months 2022 results:

Sales in Health Care were down 0.4 percent in U.S.

On an organic sales basis:

• Sales increased in separation and purification, medical solutions, health information systems, food safety and oral care.

• Sales increased in medical solutions and oral care, but continue to be impacted by COVID-related trends on elective procedure volumes.

• Sales increased in separation and purification with sustained demand for biopharma filtration solutions for COVID-related vaccines and therapeutics.

• Sales increased in health information systems due to strong growth in revenue cycle management and clinician solutions.

Business segment operating income margins decreased year-on-year due to increased raw materials and logistics costs along with manufacturing productivity headwinds, investments in the business and transaction-related costs associated with the announced divestiture of the food safety business (see Note 3), partially offset by sales growth (including selling price actions), strong spending discipline and benefits from restructuring actions.

• Sales increased in separation and purification, medical solutions, food safety and health information systems, and decreased in oral care.

• Sales continue to be impacted by COVID-related trends on elective procedure volumes and ongoing inflationary pressures.

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.

Consumer Business:

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Percent of sales 21.3 % 21.5 % 19.0 % 21.0 %

Second quarter 2022 results:

Third quarter 2022 results:

Sales in Consumer totaled were down 1.7 percent in U.S.

On an organic sales basis:

• Sales increased in stationery and office and home care, and decreased in consumer health and safety and home improvement.

• Sales decreases primarily due to soft consumer market conditions and continued product availability issues.

Business segment operating income margins decreased year-on-year as a result of ongoing supply chain constraints, along with manufacturing productivity headwinds, partially offset by strong spending discipline and benefits from restructuring actions.

First six months 2022 results:

• Sales increased in consumer health and safety, stationery and office and home care and decreased in home improvement.

• Sales decreases impacted by soft back-to-school season performance due to elevated inventory levels at retailers.

Business segment operating income margins decreased year-on-year from increased raw materials, logistics and outsourced hardgoods manufacturing costs along with manufacturing productivity headwinds and investments in the business, partially offset by selling price actions, strong spending discipline and restructuring actions.

First nine months 2022 results:

Sales in Consumer totaled were down 1.7 percent in U.S.

On an organic sales basis:

• Sales increased in stationery and office, consumer health and safety, and home care and decreased in home improvement.

• Sales increases continue to be benefited by strength and demand in market-lead categories such as Filtrete TM air quality solutions and Command TM adhesives.

Business segment operating income margins decreased year-on-year as a result of increased raw materials, logistics and outsourced hardgoods manufacturing costs along with manufacturing productivity headwinds, partially offset by sales growth (including selling price actions), strong spending discipline and benefits from restructuring actions.

• Sales increased in consumer health and safety, stationery and office, and home care and decreased in home improvement.

• Sales increases continue to be benefited by strength and demand in market-lead categories such as Filtrete TM air quality solutions and Post-it® products.

Business segment operating income margins decreased year-on-year as a result of increased raw materials, logistics and outsourced hardgoods manufacturing costs along with manufacturing productivity headwinds and investments in the business, partially offset by sales growth (including selling price actions), strong spending discipline and restructuring actions.

FINANCIAL CONDITION AND LIQUIDITY

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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.

The Company had $350 million and no commercial paper outstanding at June 30, 2022 and December 31, 2021, respectively.

The Company had no commercial paper outstanding at September 30, 2022 and December 31, 2021.

The strength of 3M’s 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 July 2022, 3M has a credit rating of A1, stable outlook from Moody's Investors Service and a credit rating of A+, CreditWatch negative from S&P Global Ratings.

The Company’s total debt was lower at June 30, 2022 when compared to December 31, 2021.

Decreases in debt were largely due to the repayments of 500 million euros and $600 million aggregate principal amounts of fixed-rate medium-term notes in February 2022 and June 2022, respectively, offset by increases in commercial paper outstanding.

As of September 2022, 3M has a credit rating of A1, stable outlook from Moody's Investors Service and a credit rating of A+, CreditWatch negative from S&P Global Ratings.

The Company’s total debt was lower at September 30, 2022 when compared to December 31, 2021.

Decreases in debt were largely due to the repayments of 500 million euros and $600 million aggregate principal amounts of fixed-rate medium-term notes in February 2022 and June 2022, respectively.

For discussion of repayments of and proceeds from debt refer to the following “Cash Flows from Financing Activities” section.

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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, 2022, 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).

As of September 30, 2022, 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 to the Consolidated Financial Statements in 3M's Current Report on Form 8-K dated April 26, 2022 (which updated 3M’s 2021 Annual Report on Form 10-K).

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The 364-day credit agreement includes a provision under which 3M may convert any advances outstanding on the maturity date into term loans having a maturity date one year later.

These credit facilities were undrawn at June 30, 2022.

These credit facilities were undrawn at September 30, 2022.

Under both the $3.0 billion and $1.25 billion credit agreements, 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 (as defined in the 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 June 30, 2022, this ratio was approximately 15 to 1.

At September 30, 2022, this ratio was approximately 21 to 1.

Debt covenants do not restrict the payment of dividends.

As disclosed in Note 10, 3M has financing facilities that provide commitments of $650 million of term loans and $350 million of bridge financing along with $150 million of revolving credit related to the intended Food Safety Division split-off transaction.

Amounts outstanding under the term loan commitment are payable over five years following the closing date while those under the bridge financing facility have a term of 364 days following the borrowing date and are required to be repaid when certain conditions are met.

These commitments were undrawn at June 30, 2022.

The Company also had $321 million in stand-alone letters of credit and bank guarantees issued and outstanding at June 30, 2022.

As disclosed in Note 10, 3M had debt financing facilities providing commitments for term loans and potential bridge financing aggregating $1.0 billion related to the Food Safety Division split-off transaction and combination with Neogen (discussed in Note 3).

The debt commitments also included a $150 million revolving credit facility for the Food Safety business.

Coincident with completion of the September 2022 split-off, the Food Safety business term loan borrowings funded the cash payment to 3M discussed in Note 3.

The bridge financing component of these facilities was terminated early and not utilized.

Obligations under the commitments (including the $150 million revolving credit facility) transferred with the Food Safety business and became those of Neogen.

The Company also had $314 million in stand-alone letters of credit and bank guarantees issued and outstanding at September 30, 2022.

These instruments are utilized in connection with normal business activities.

Cash, cash equivalents and marketable securities:

At June 30, 2022, 3M had $3.0 billion of cash, cash equivalents and marketable securities, of which approximately $2.7 billion was held by the Company’s foreign subsidiaries and approximately $0.3 billion was held in the United States.

At September 30, 2022, 3M had $3.6 billion of cash, cash equivalents and marketable securities, of which approximately $2.9 billion was held by the Company’s foreign subsidiaries and approximately $0.7 billion was held in the United States.

These balances are invested in bank instruments and other high-quality fixed income securities.

At December 31, 2021, 3M had $4.8 billion of cash, cash equivalents and marketable securities, of which approximately $3.1 billion was held by the Company’s foreign subsidiaries and $1.7 billion was held by the United States.

The decrease from December 31, 2021 primarily resulted from cash flow from operations and proceeds from commercial paper offset by ongoing dividend payments, purchases of treasury stock, capital expenditures, and the fixed-rate medium-term note maturities in the first six months of 2022.

The decrease from December 31, 2021 primarily resulted from cash flow from operations and cash consideration and earlier borrowings related to the Food Safety transaction (see Note 3) offset by ongoing dividend payments, purchases of treasury stock, capital expenditures, and the fixed-rate medium-term note maturities in the first nine months of 2022.

Net Debt (non-GAAP measure):

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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 June 30, 2022 and December 31, 2021.

(Millions) June 30,

The following table provides net debt as of September 30, 2022 and December 31, 2021.

(Millions) September 30,

2022 December 31,

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Working capital (non-GAAP measure):

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Balance changes in current liabilities decreased working capital by $0.5 billion, primarily due to increases in short-term borrowings and current-portion of long-term debt and accounts payable.

Accounts receivable increased $254 million and inventory increased $660 million, respectively, from December 31, 2021, primarily as a result of increased sequential sales and related operating activity partially offset by foreign currency translation impacts.

Current portion of long-term debt increased as upcoming debt maturities now considered current were partially offset by the bond maturities in the first six months of 2022, while accounts payable also increased as a result of increased sequential operating activity partially offset by foreign currency translation impacts.

Inventory increased $630 million from December 31, 2021, primarily as a result of increased underlying operating activity partially offset by foreign currency translation impacts.

Current portion of long-term debt increased as upcoming debt maturities now considered current were partially offset by the bond maturities in the first nine months of 2022, while accounts payable also increased as a result of increased sequential operating activity partially offset by foreign currency translation impacts.

Cash flows from operating, investing and financing activities are provided in the tables that follow.

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Cash Flows from Operating Activities:

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Stock-based compensation expense 226 227

Gain on business divestitures (2,724) —

Income taxes (deferred and accrued income taxes) (506) (196)

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Cash flows from operating activities can fluctuate significantly from period to period, as working capital movements, tax timing differences and other items can significantly impact cash flows.

In the first six months of 2022, cash flows provided by operating activities decreased $1,437 million compared to the same period last year, with this decrease primarily due to increased variable compensation and benefits costs and increased net costs for significant litigation.

The combination of accounts receivable, inventories and accounts payable decreased operating cash flow by $893 million in the first six months of 2022, compared to an operating cash flow decrease of $570 million in the first six months of 2021.

In the first nine months of 2022, cash flows provided by operating activities decreased $1,780 million compared to the same period last year, with this decrease primarily due to increased variable compensation and benefits costs, increased payments related to net costs for significant litigation and the cash impact from capitalization of R&D for U.S.

tax purposes.

The combination of accounts receivable, inventories and accounts payable decreased operating cash flow by $1,310 million in the first nine months of 2022, compared to an operating cash flow decrease of $807 million in the first nine months of 2021.

Additional discussion on working capital changes is provided earlier in the “Financial Condition and Liquidity” section.

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Cash Flows from Investing Activities:

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Proceeds from sale of businesses, net of cash sold 13 —

Cash payment from Food Safety business split-off, net of divested cash 478 —

Other — net 1 18

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Finally, 3M also invests in other initiatives, such as information technology (IT), laboratory facilities, and a continued focus on investments in sustainability.

Refer to Note 3 for information on acquisitions and divestitures.

Refer to Note 3 for information on acquisitions and divestitures (including the cash payment from the Food Safety business split-off).

The Company is actively considering additional acquisitions, investments and strategic alliances, and from time to time may also divest certain businesses.

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Cash Flows from Financing Activities:

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Net cash provided by (used in) financing activities $ (4,035) $ (3,733)

Total debt was approximately $16.3 billion at June 30, 2022 and $17.4 billion at December 31, 2021.

The Company had $350 million and no commercial paper outstanding at June 30, 2022 and December 31, 2021, respectively.

In July 2022, 3M exchanged $350 million of commercial paper debt for obligations under $350 million of new debt securities due in 2030 that, in addition to obligations under certain other anticipated new debt, are intended to be assumed by Neogen Corporation in connection with the intended Food Safety Division split-off transaction expected to close in the third quarter of 2022 (see Note 3).

Total debt was approximately $15.7 billion at September 30, 2022 and $17.4 billion at December 31, 2021.

Decreases in debt were largely due to the repayments of 500 million euros and $600 million aggregate principal amounts of fixed-rate medium-term notes in February 2022 and June 2022, respectively.

The Company had no commercial paper outstanding at September 30, 2022 and December 31, 2021.

In conjunction with the Food Safety Division split-off transaction and combination with Neogen (discussed in Note 3), the associated non-cash debt-for-debt exchange in the third quarter of 2022 reduced, then-outstanding 3M commercial paper indebtedness of $350 million (borrowed earlier in the year) which became new term-debt obligations of Neogen.

Net commercial paper issuances in addition to repayments and borrowings by international subsidiaries are largely reflected in “Change in short-term debt – net” in the preceding table.

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Repurchases of common stock are made to support the Company’s stock-based employee compensation plans and for other corporate purposes.

In the first six months of 2022, the Company purchased $773 million of its own stock.

In the first nine months of 2022, the Company purchased $928 million of its own stock.

For more information, refer to the table titled “Issuer Purchases of Equity Securities” in Part II, Item 2.

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In May 2022, 3M's Board of Directors declared a second-quarter 2022 dividend of $1.49 per share.

In August 2022, 3M's Board of Directors declared a third-quarter dividend of $1.49 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 overdraft balances, and principal payments for finance leases.

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Refer to the preceding “Results of Operations” section for discussion of items that impacted the net income attributable to 3M component of the calculation of free cash flow conversion.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis