What changed in this filing

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Item 1. Financial Statements

2023-10-24 compared with 2023-07-25 · 389 added, 382 removed, 1303 unchanged (37% of the section changed)

3 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(Millions, except per share amounts) 2023 2022 2023 2022

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Research, development and related expenses 430 461 1,375 1,417

Gain on business divestitures ( 36 ) ( 2,724 ) ( 36 ) ( 2,724 )

Total operating expenses 10,966 4,463 35,039 20,243

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(Millions) 2023 2022 2023 2022

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Consolidated Balance Sheet

(Dollars in millions, except per share amount) June 30, 2023 December 31, 2022

(Dollars in millions, except per share amount) September 30, 2023 December 31, 2022

Current assets

34 unchanged sentences

944,033,056 shares issued

Shares outstanding - June 30, 2023:

Shares outstanding - September 30, 2023:

Shares outstanding - December 31, 2022:

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( 32,889 ) ( 33,255 )

Shares at June 30, 2023:

Shares at September 30, 2023:

Shares at December 31, 2022:

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Consolidated Statement of Cash Flows

Six months ended

Nine months ended

September 30,

(Millions) 2023 2022

6 unchanged sentences

Stock-based compensation expense 222 226

Gain on business divestitures ( 36 ) ( 2,724 )

Deferred income taxes ( 3,468 ) ( 495 )

12 unchanged sentences

Proceeds from sale of businesses, net of cash sold 60 13

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

Other — net 28 1

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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 in Note 14.

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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 have had an anti-dilutive effect of 36.9 million and 36.5 million average options for the three and six months ended June 30, 2023, respectively, and 31.9 million and 27.5 million average options for the three and six months ended June 30, 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.

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 have had an anti-dilutive effect of 35.6 million and 36.0 million average options for the three and nine months ended September 30, 2023, respectively, and 31.7 million and 28.9 million average options for the three and nine months ended September 30, 2022, respectively.

In periods of net losses, these anti-dilutive 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:

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(Amounts in millions, except per share amounts) 2023 2022 2023 2022

11 unchanged sentences

Separately, the banks may have arrangements with the suppliers that provide them the option to request early payment from the banks for invoices confirmed by 3M.

3M's outstanding balances of confirmed invoices in the programs as of June 30, 2023 and December 31, 2022 were approximately $ 290 million and $ 260 million, respectively.

3M's outstanding balances of confirmed invoices in the programs as of September 30, 2023 and December 31, 2022 were approximately $ 320 million and $ 260 million, respectively.

These amounts are included within accounts payable on 3M's consolidated balance sheet.

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Deferred revenue primarily relates to revenue that is recognized over time for one-year software license contracts.

Deferred revenue (current portion) as of June 30, 2023 and December 31, 2022 was $ 521 million and $ 538 million, respectively.

Approximately $ 150 million and $ 350 million of the 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.

Deferred revenue (current portion) as of September 30, 2023 and December 31, 2022 was $ 501 million and $ 538 million, respectively.

Approximately $ 110 million and $ 460 million of the December 31, 2022 balance was recognized as revenue during the three and nine months ended September 30, 2023, respectively, while approximately $ 100 million and $ 440 million of the December 31, 2021 balance was recognized as revenue during the three and nine months ended September 30, 2022, respectively.

Operating Lease Revenue:

Net sales includes rental revenue from durable medical devices as part of operating lease arrangements (reported within the Medical Solutions Division), which was $ 146 million and $ 285 million during the three and six months ended June 30, 2023, respectively, and $ 148 million and $ 284 million during the three and six months ended June 30, 2022, respectively.

Net sales includes rental revenue from durable medical devices as part of operating lease arrangements (reported within the Medical Solutions Division), which was $ 154 million and $ 439 million during the three and nine months ended September 30, 2023, respectively, and $ 145 million and $ 429 million during the three and nine months ended September 30, 2022, respectively.

Disaggregated revenue information:

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June 30, Six months ended

September 30, Nine months ended

September 30,

Net Sales (Millions) 2023 2022 2023 2022

27 unchanged sentences

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June 30, Six months ended

September 30, Nine months ended

September 30,

Net Sales (Millions) 2023 2022 2023 2022

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Worldwide $ 8,312 $ 8,619 $ 24,668 $ 26,150

Americas included United States net sales to customers of $ 3.8 billion and $ 7.4 billion for the three and six months ended June 30, 2023, respectively, and $ 3.9 billion and $ 7.5 billion for the three and six months ended June 30, 2022, respectively.

Americas included United States net sales to customers of $ 3.9 billion and $ 11.3 billion for the three and nine months ended September 30, 2023, respectively, and $ 3.9 billion and $ 11.4 billion for the three and nine months ended September 30, 2022, respectively.

Acquisitions and Divestitures

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2023 acquisitions:

There were no acquisitions that closed during the six months ended June 30, 2023.

There were no acquisitions that closed during the nine months ended September 30, 2023.

Divestitures:

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2023 divestitures and previously announced divestitures:

In May 2023, 3M entered into agreements to sell the assets associated with its dental local anesthetic business (part of 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 has annual sales of approximately $ 30 million.

This transaction is expected to close in the third quarter of 2023.

In August 2023, 3M completed the sale of assets associated with its dental local anesthetic business (part of the Health Care business) to Pierrel S.p.A.

for approximately $ 60 million in cash.

The dental local anesthetic business had annual sales of approximately $ 30 million.

The gain on this transaction, net of a loss associated with a previous contingent indemnification obligation from a 2020 divestiture, resulted in a 2023 net pre-tax gain of $ 36 million.

In July 2022, 3M announced its intention to spin off the Health Care business as a separate public company.

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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 Board of Directors, among other items.

3M continues to work towards closing the transaction by year-end 2023 or early 2024, subject to required conditions, as well as additional factors such as conditions in the equity and debt markets, other external conditions, and developments involving 3M or any of its businesses, which could delay the completion of the transaction relative to the anticipated timeline.

3M expects to close the transaction in the first half of 2024, subject to required conditions, as well as additional factors such as conditions in the equity and debt markets, other external conditions, and developments involving 3M or any of its businesses, which could delay the completion of the transaction relative to the anticipated timeline.

Because the intended transaction is a spin-off, the Health Care business is not classified as held for sale.

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With respect to the businesses above, operating income information of the Health Care business is included in Note 15.

Further, with the respect to these businesses, 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 assets and liabilities associated with disposal groups classified as held-for-sale as of June 30, 2023.

Further, with the respect to these businesses, there were no assets and liabilities associated with disposal groups classified as held for sale as of December 31, 2022 and September 30, 2023.

Information related to other held for sale disposal groups is included in Note 13.

Goodwill and Intangible Assets

There was no goodwill recorded from acquisitions during the first six months of 2023.

There was no goodwill recorded from acquisitions during the first nine months of 2023.

The amounts in the “Translation and other” row in the following table primarily relate to changes in foreign currency exchange rates.

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

Divestiture activity — — ( 4 ) — ( 4 )

Translation and other ( 17 ) ( 3 ) ( 43 ) ( 2 ) ( 65 )

Balance as of June 30, 2023 $ 4,521 $ 1,510 $ 6,571 $ 267 $ 12,869

Balance as of September 30, 2023 $ 4,492 $ 1,498 $ 6,468 $ 263 $ 12,721

Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as when events or conditions indicate that goodwill assigned to a reporting unit may be impaired.

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The impacts of these changes on reported amounts were immaterial and resulted in no impairment.

As of June 30, 2023, the Company's accumulated goodwill impairment loss is $ 0.3 billion.

As of September 30, 2023, the Company's accumulated goodwill impairment 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 follow:

(Millions) June 30,

(Millions) September 30,

2023 December 31,

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June 30, Twelve months ended

September 30, Nine months ended

September 30,

(Millions) 2023 2022 2023 2022

Amortization expense $ 122 $ 124 $ 365 $ 384

Expected amortization expense for acquired amortizable intangible assets recorded as of June 30, 2023 follows:

Expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2023 follows:

(Millions) Remainder of 2023

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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.

During 2023, management approved and committed to undertake associated actions impacting approximately 5,200 positions resulting in a pre-tax charge of $ 62 million and $ 326 million in the third quarter and nine months ended September 30, 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.

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 pr e-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

(Millions) Three months ended September 30, 2023 Nine months ended September 30, 2023

Cost of sales $ 4 $ 67

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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

Three months ended September 30, 2023 Nine months ended September 30, 2023

(Millions) Employee Related Asset-Related and Other Total Employee Related Asset-Related and Other Total

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Incremental expense incurred in the second quarter of 2023 192 20 212

Incremental expense incurred in the third quarter of 2023 30 32 62

Non-cash changes — ( 52 ) ( 52 )

Cash payments ( 156 ) — ( 156 )

Accrued restructuring action balance as of June 30, 2023

Accrued restructuring action balance as of September 30, 2023

$ 118 $ — $ 118

2023 to 2025 PFAS Exit Actions

As further discussed in Note 14, 3M announced in December 2022 that it will exit all PFAS manufacturing by the end of 2025.

In the third quarter of 2023, 3M management approved and committed to undertake certain related workforce actions impacting approximately 100 positions resulting in a pre-tax charge of $ 40 million primarily impacting cost of sales.

These charges are reflected within the Transportation and Electronics business segment.

There were no material cash payments during the 2023 periods presented related to these actions.

The remaining period of activities related to these approved and committed actions aligns with 3M's PFAS exit timeframe.

2022 Restructuring Actions

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September 30, Nine months ended

September 30,

(Millions) 2023 2022 2023 2022

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Total $ 200 $ 24 $ 317 $ 112

In addition to interest primarily related to outstanding debt, interest expense includes imputed interest associated with the obligations resulting from the PFAS-related public water systems proposed settlement and the Combat Arms Earplugs settlement (discussed in Note 14).

Pension and postretirement net periodic benefit costs described in the table above include all components of defined benefit plan net periodic benefit costs except service cost, which is reported in various operating expense lines.

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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.

Cash dividends declared and paid totaled $ 1.50 and $ 1.49 per share for the first, second and third quarters of 2023 and 2022, respectively, or $ 4.50 and $ 4.47 per share for the first nine months of 2023 and 2022, respectively.

Consolidated Changes in Equity

Three months ended June 30, 2023

Three months ended September 30, 2023

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, 2023

Balance at June 30, 2023

$ 7,857 $ 6,867 $ 40,290 $ ( 32,926 ) $ ( 6,433 ) $ 59

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Stock-based compensation 45 45

Reacquired stock ( 2 ) ( 2 )

Dividend to noncontrolling interest

Issuances pursuant to stock option and benefit plans 27 ( 12 ) 39

Balance at June 30, 2023

Balance at September 30, 2023

$ 4,731 $ 6,912 $ 37,375 $ ( 32,889 ) $ ( 6,726 ) $ 59

Three months ended June 30, 2022

Three months ended September 30, 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

Balance at June 30, 2022

$ 13,816 $ 6,616 $ 45,269 $ ( 30,781 ) $ ( 7,362 ) $ 74

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Stock-based compensation 47 47

Reacquired stock ( 191 ) ( 191 )

Split-off of Food Safety business ( 1,988 ) ( 1,988 )

Issuances pursuant to stock option and benefit plans 84 ( 33 ) 117

Balance at June 30, 2022

Balance at September 30, 2022

$ 14,156 $ 6,663 $ 48,245 $ ( 32,843 ) $ ( 7,985 ) $ 76

Six months ended June 30, 2023

Nine months ended September 30, 2023

3M Company Shareholders

11 unchanged sentences

Reacquired stock ( 31 ) ( 31 )

Dividend to noncontrolling interest

Issuances pursuant to stock option and benefit plans 245 ( 152 ) 397

Balance at June 30, 2023

Balance at September 30, 2023

$ 4,731 $ 6,912 $ 37,375 $ ( 32,889 ) $ ( 6,726 ) $ 59

Six months ended June 30, 2022

Nine months ended September 30, 2022

3M Company Shareholders

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Reacquired stock ( 964 ) ( 964 )

Split-off of Food Safety business ( 1,988 ) ( 1,988 )

Issuances pursuant to stock option and benefit plans 310 ( 262 ) 572

Balance at June 30, 2022

Balance at September 30, 2022

$ 14,156 $ 6,663 $ 48,245 $ ( 32,843 ) $ ( 7,985 ) $ 76

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

Three months ended June 30, 2023

Three months ended September 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 March 31, 2023, net of tax:

Balance at June 30, 2023, net of tax:

$ ( 2,688 ) $ ( 3,737 ) $ ( 8 ) $ ( 6,433 )

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Total other comprehensive income (loss), net of tax ( 364 ) 50 21 ( 293 )

Balance at June 30, 2023, net of tax:

Balance at September 30, 2023, net of tax:

$ ( 3,052 ) $ ( 3,687 ) $ 13 $ ( 6,726 )

Three months ended June 30, 2022

Three months ended September 30, 2022

Balance at March 31, 2022, net of tax:

Balance at June 30, 2022, net of tax:

$ ( 2,814 ) $ ( 4,581 ) $ 33 $ ( 7,362 )

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Total other comprehensive income (loss), net of tax ( 819 ) 86 110 ( 623 )

Balance at June 30, 2022, net of tax:

Balance at September 30, 2022, net of tax:

$ ( 3,633 ) $ ( 4,495 ) $ 143 $ ( 7,985 )

Six months ended June 30, 2023

Nine months ended September 30, 2023

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Total other comprehensive income (loss), net of tax ( 224 ) 151 20 ( 53 )

Balance at June 30, 2023, net of tax:

Balance at September 30, 2023, net of tax:

$ ( 3,052 ) $ ( 3,687 ) $ 13 $ ( 6,726 )

Six months ended June 30, 2022

Nine months ended September 30, 2022

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Total other comprehensive income (loss), net of tax ( 1,690 ) 258 197 ( 1,235 )

Balance at June 30, 2022, net of tax:

Balance at September 30, 2022, net of tax:

$ ( 3,633 ) $ ( 4,495 ) $ 143 $ ( 7,985 )

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June 30, Six months ended

September 30, Nine months ended

September 30,

(Millions) 2023 2022 2023 2022

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Total reclassifications for the period, net of tax $ ( 21 ) $ ( 63 ) ( 98 ) $ ( 218 )

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 tax rate for the first six months of 2023 was 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).

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

The effective tax rate for the third quarter of 2023 was 27.4 percent on a pre-tax loss, compared to 6.6 percent on pre-tax income in the prior year.

The primary factors that impacted the comparison of these rates were the third quarter 2023 charge related to the settlement agreement to resolve Combat Arms Earplugs litigation (see Note 14) and the tax efficient structure associated with the third quarter 2022 gain on split-off of the Food Safety business.

The effective tax rate for the first nine months of 2023 was 25.8 percent, compared to 9.5 percent in the prior year.

The primary factors that impacted the comparison of the nine-month rates were the third quarter 2023 charge related to the settlement agreement to resolve Combat Arms Earplugs litigation, the second quarter 2023 charge related to the proposed settlement agreement with public water systems in the United States regarding PFAS, and the tax impact associated with the second quarter 2022 charge related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14), along with the tax efficient structure associated with the third quarter 2022 gain on split-off of the Food Safety business.

The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of September 30, 2023 and December 31, 2022 are $ 945 million and $ 965 million, respectively.

It is reasonably possible that the amount of unrecognized tax benefits could significantly change within the next 12 months.

At this time, the Company 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 assets, a component of other assets on the consolidated balance sheet, also included a balance of approximately $ 2.4 billion as a result of the 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).

As of June 30, 2023 and December 31, 2022, the Company had valuation allowances of $ 128 million and $ 115 million on its deferred tax assets, respectively.

At September 30, 2023, 3M’s deferred tax assets, a component of other assets on the consolidated balance sheet, also included a balance of approximately $ 3.5 billion as a result of the 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 and the third quarter 2023 charge related to the settlement agreement to resolve Combat Arms Earplugs litigation (both discussed in Note 14).

As of September 30, 2023 and December 31, 2022, the Company had valuation allowances of $ 166 million and $ 115 million on its deferred tax assets, respectively.

Marketable Securities

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The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current).

(Millions) June 30, 2023 December 31, 2022

(Millions) September 30, 2023 December 31, 2022

Commercial paper $ — $ 213

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Total marketable securities $ 96 $ 261

At June 30, 2023 and December 31, 2022, gross unrealized, gross realized, and net realized gains and/or losses (pre-tax) were not material.

The balances at June 30, 2023 for marketable securities by contractual maturity are shown below.

At September 30, 2023 and December 31, 2022, gross unrealized, gross realized, and net realized gains and/or losses (pre-tax) were not material.

The balances at September 30, 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) June 30, 2023

(Millions) September 30, 2023

Due in one year or less $ 73

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2022 issuances, maturities, and extinguishments of short- and 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 had $ 1.8 billion in commercial paper outstanding at June 30, 2023, compared to no commercial paper outstanding as of December 31, 2022.

The Company had $ 1.9 billion in commercial paper outstanding at September 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 facility was amended in July and September 2023.

The revolving credit agreement includes a provision under which 3M may request an increase of 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.

The credit facility was undrawn at September 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 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 June 30, 2023, this ratio, reflecting the July 2023 amendment, was approximately 17 to 1.

At September 30, 2023, this ratio was approximately 15 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 unamortized debt issue costs such that total maturities equal the carrying value of long-term debt as of June 30, 2023.

The maturities of long-term debt for the periods subsequent to June 30, 2023 are as follows (in millions):

The maturities of long-term debt for the periods subsequent to September 30, 2023 are as follows (in millions):

2024 2025 2026 2027 2028 After 2028

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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 six months ended June 30, 2023 and 2022 follow:

Components of net periodic benefit cost and other supplemental information for the three and nine months ended September 30, 2023 and 2022 follow:

Benefit Plan Information

Three months ended June 30,

Three months ended September 30,

Qualified and Non-qualified Pension Benefits Postretirement Benefits

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Amortization of net actuarial loss 73 106 2 10 2 10

Settlements, curtailments, special termination benefits and other — — — — — 1

Total non-operating expense (benefit) ( 10 ) ( 36 ) ( 17 ) ( 27 ) ( 4 ) ( 2 )

Total net periodic benefit cost (benefit) $ 32 $ 28 $ 4 $ 5 $ 2 $ 8

Six months ended June 30,

Nine months ended September 30,

Qualified and Non-qualified Pension Benefits Postretirement Benefits

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Total net periodic benefit cost (benefit) $ 96 $ 82 $ 8 $ 16 $ 9 $ 26

For the six months ended June 30, 2023 contributions totaling $ 53 million were made to the Company’s U.S.

For the nine months ended September 30, 2023 contributions totaling $ 78 million were made to the Company’s U.S.

and international pension plans and $ 7 million to its postretirement plans.

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Cash Flow Hedges:

As of June 30, 2023, the Company had a balance of $ 8 million associated with the after-tax net unrealized loss associated with cash flow hedging instruments recorded in accumulated other comprehensive income (loss).

As of September 30, 2023, the Company had a balance of $ 13 million associated with the after-tax net unrealized gain associated with cash flow hedging instruments recorded in accumulated other comprehensive income (loss).

This includes a remaining balance of $ 89 million (after-tax loss) related to forward starting interest rate swap and treasury rate lock contracts, which will be amortized over the respective lives of the underlying notes.

Based on exchange rates as of June 30, 2023, of the total after-tax net unrealized balance as of June 30, 2023, 3M expects to reclassify approximately $ 75 million after-tax net unrealized gain over the next 12 months (with the impact offset by earnings/losses from underlying hedged items).

Based on exchange rates as of September 30, 2023, of the total after-tax net unrealized balance as of September 30, 2023, 3M expects to reclassify approximately $ 84 million after-tax net unrealized gain over the next 12 months (with the impact offset by earnings/losses from underlying hedged items).

The amount of pretax gain (loss) recognized in other comprehensive income (loss) related to derivative instruments designated as cash flow hedges is provided in the following table.

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June 30, Six months ended

September 30, Nine months ended

September 30,

(Millions) 2023 2022 2023 2022

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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,

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 (Millions)

September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

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Net Investment Hedges:

At June 30, 2023, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 150 million euros, along with a principal amount of long-term debt instruments designated in net investment hedges totaling 1.8 billion euros.

At September 30, 2023, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 150 million euros, along with a principal amount of long-term debt instruments designated in net investment hedges totaling 1.8 billion euros.

The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from 2023 to 2031.

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September 30, Nine months ended

September 30,

(Millions) 2023 2022 2023 2022

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Location and Amount of Gain (Loss) Recognized in Income (Loss)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

Cost of sales Other expense (income), net Cost of sales Other expense (income), net

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(Millions) Location Fair Value Amount Location Fair Value Amount

September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

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Gross Amount of Eligible Offsetting Recognized Derivative Liabilities Cash Collateral Received Net Amount of Derivative Assets

(Millions) June 30,

(Millions) September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

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Gross Amount of Eligible Offsetting Recognized Derivative Assets Cash Collateral Received Net Amount of Derivative Liabilities

(Millions) June 30,

(Millions) September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

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Currency Effects

3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income (loss) by approximately $ 38 million and $ 74 million for the three and six months ended June 30, 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.

3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, decreased pre-tax loss by approximately $ 18 million and $ 92 million for the three and nine months ended September 30, 2023, respectively, and increased pre-tax income by approximately $ 43 million and $ 70 million for the three and nine months ended September 30, 2022, respectively.

These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks.

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Level 1 Level 2 Level 3

Description (Millions) June 30,

Description (Millions) September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

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municipal securities only Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(Millions) 2023 2022 2023 2022

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For 3M, such measurements of fair value relate primarily to indefinite-lived and long-lived asset impairments, goodwill impairments, and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used.

There were no material impairments of assets or adjustments to equity securities using the measurement alternative for the first six months of 2023 and 2022.

There were no material impairments of assets or adjustments to equity securities using the measurement alternative for the first nine months of 2023 and 2022.

As discussed in Note 15 to the 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 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.

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Information with respect to the carrying amounts and estimated fair values of these financial instruments follow:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(Millions) Carrying Value Fair Value Carrying Value Fair Value

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Respirator Mask/Asbestos Litigation

As of June 30, 2023, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 4,066 individual claimants, compared to approximately 4,028 individual claimants with actions pending December 31, 2022.

As of September 30, 2023, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 3,980 individual claimants, compared to approximately 4,028 individual claimants with actions pending December 31, 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.

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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.

The rate of coal mine dust-related case filings decelerated in 2022 and has stayed significantly lower than in 2021.

3M moved two cases involving over 400 plaintiffs to federal court based on, among others, the Class Action Fairness Act.

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These developments include, but are not limited to, significant changes in (i) the key assumptions underlying the Company’s accrual, including the number 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 six months of 2023, the Company made payments for legal defense costs and settlements of $ 49 million related to the respirator mask/asbestos litigation.

As of June 30, 2023, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of $ 588 million.

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 nine months of 2023 for respirator mask/asbestos liabilities by $ 64 million.

In the first nine months of 2023, the Company made payments for legal defense costs and settlements of $ 67 million related to the respirator mask/asbestos litigation.

As of September 30, 2023, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of $ 601 million.

This accrual represents the Company’s 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 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 June 30, 2023, the Company’s receivable for insurance recoveries related to the respirator mask/asbestos litigation was $ 4 million.

As of September 30, 2023, the Company’s receivable for insurance recoveries related to the respirator mask/asbestos litigation was $ 4 million.

In addition, the Company continues to seek coverage under the policies of certain insolvent and other insurers.

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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.

Bankruptcy Court had stayed the Aearo respirator mask/asbestos litigation matters during the chapter 11 proceedings.

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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 $ 44 million as of June 30, 2023 for product liabilities and defense costs related to current and future Aearo-related asbestos, silica-related and coal mine dust claims.

However, following the June 2023 dismissal of the Aearo bankruptcy, the Company, through its Aearo subsidiary, had accruals of $ 54 million as of September 30, 2023 for product liabilities and defense costs related to current and future Aearo-related asbestos, silica-related and coal mine dust claims.

Responsibility for legal costs, as well as for settlements and judgments, is shared in an informal arrangement among Aearo, Cabot, American Optical Corporation and a subsidiary of Warner Lambert and their respective insurers (the “Payor Group”).

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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, many for which private parties in the United States and abroad have rights of action.

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, which are enforceable by national, state, and local authorities around the world, and many for which private parties in the United States and abroad may have rights of action.

These laws and regulations can form the basis of, under certain circumstances, 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.

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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, sometimes with other potentially responsible parties, for the costs of remediation of environmental contamination at current or former facilities and at off-site locations where hazardous substances have been released or disposed of.

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, sometimes with other potentially responsible parties, for the costs of investigation and remediation of environmental contamination at current or former facilities and at off-site locations where hazardous substances have been released or disposed of.

The Company has identified numerous locations, many of which are in the United States, at which it may have some liability for remediation of contamination.

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

The Company ceased manufacturing and 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 ceased manufacturing and using the vast majority of those compounds within approximately two years of the phase-out announcement and ceased all manufacturing and the last significant use of those compounds 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.

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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 PFAS in purchased materials, as intended substances in products, or as byproducts in some of 3M’s current manufacturing processes, products, and waste streams.

3M announced in December 2022 it will take two actions:

3M announced in December 2022 it will take two actions with respect to PFAS:

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.

3M is progressing toward exiting all PFAS manufacturing by the end of 2025.

3M is also working to discontinue the use of PFAS across its product portfolio by the end of 2025.

3M has already eliminated the PFAS use in certain product categories, and has made progress across its product portfolio in a variety of applications.

With respect to PFAS-containing products not manufactured by 3M but manufactured by companies other than 3M in the Company's supply chains, the Company continues to evaluate the availability of third-party products that do not contain PFAS.

Depending on the availability and feasibility of such third-party products not containing PFAS, the Company continues to evaluate whether there may be some circumstances in which the use of PFAS-containing materials manufactured by third parties and used in certain applications in 3M’s product portfolios, such as lithium ion batteries and printed circuit boards widely used in commerce across a variety of industries, may continue beyond 2025.

In such instances, the Company intends to continue to evaluate the adoption of third-party products that do not contain PFAS to the extent such products are available and such adoption is feasible.

PFAS Regulatory and Legislative Activity

Regulatory and legislative activities concerning 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 activities, consideration of regulatory 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.

These activities include gathering of exposure and use information, risk assessment activities, consideration of regulatory approaches, and increasingly strict restrictions on various uses of PFAS in products and on PFAS in manufacturing emissions and environmental media, 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 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 3M products or generated as byproducts or degradation products from production processes.

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.

Given divergent and rapidly evolving regulatory drinking water and other environmental standards, there is currently significant uncertainty about the potential costs to industry and communities associated with remediation and control technologies that may be required.

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).

PFOA, PFOS and PFHxS (and their related compounds) are listed under several Annexes of the POPs Regulation, resulting in a ban in manufacture, placing on the market and use as well as some waste management requirements of these substances in EU Member States.

These substances 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.

The proposal aims to restrict the manufacture, placing on the market and use of PFAS under REACH, subject to certain exceptions.

In March 2023, the six-month consultation phase on the PFAS Restriction Proposal started and, in September 2023, the Company submitted comments to the proposal.

Depending on the timing, 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 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 food sampling to determine if any remedial action is necessary.

Further sampling and assessment of results is ongoing.

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.

A majority of Member States have adopted the EU Directive.

Some Member States, including Germany, adopted more restrictive limits for certain PFAS substances.

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.

The implementation of process improvements and analytical work is ongoing.

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 necessary to meet applicable limits until the process is phased out in accordance with the Company’s announced exit from the manufacture of PFAS.

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.

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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.

With respect to wastewater discharge at 3M Belgium's Zwijndrecht facility, the most recent developments include the following:

3M Belgium has applied for a modification of the water discharge permit to add parameters for certain short chain PFAS, In September 2023, the permitting authority rejected the application to add the additional short chain PFAS to 3M Belgium's discharge permit.

3M Belgium is evaluating the potential impact of this action and potential next steps.

3M Belgium cannot at this time predict the outcome of any potential appeal on discharge limits for short chain PFAS and is therefore unable to assess whether the current Zwijndrecht wastewater treatment system, or currently conceived additional treatment technology, will meet any discharge limits imposed with respect to manufacturing at the Zwijndrecht facility.

It is possible that additional actions will be required to reduce the source of the PFAS for which no limit is provided in the permit or that the wastewater treatment system will be unable to meet future discharge limits.

If 3M Belgium is unable to meet discharge limits for short chain PFAS, such development 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 Zwijndrecht facility, some of which may not be available or in similar quantities from other 3M facilities, which could in turn impact these businesses' ability to fulfill supply obligations to their customers.

As previously disclosed, 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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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.

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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.

Moreover, 3M Belgium instituted a capturing process to reduce or 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.

Groundwater treatment continues, and 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.

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.

With respect to emissions at 3M Belgium's Zwijndrecht facility, the most recent developments include the following:

In July 2023, the Flemish Environmental Inspectorate issued an infraction report stating the actions taken by 3M Belgium to address a September 2022 infraction report are insufficient to ensure all necessary measures to reduce dust formation from the facility.

3M Belgium has implemented additional control measures to address potential dust formation and is working to outline further actions to reduce potential dust formation.

Also in the third quarter of 2023, the Flemish authorities responsible for maintaining oversight of 3M Belgium's operations at the Zwijndrecht facility requested analyses of the projected cumulative impacts of continued PFAS-related manufacturing (rather than the analysis previously accepted on a process-by-process basis).

In September 2023, the authorities expressed concerns based upon new information from the process identified in the September 2022 infraction report and stated their intention to investigate compliance with the emission safety measure further.

As previously disclosed in the Company’s Form 8-K, 3M Belgium on September 22, 2023 idled all PFAS manufacturing processes at the Zwijndrecht facility in response to the actions by the Flemish authorities.

Subsequently, in September 2023, the Flemish Environmental Inspectorate issued an infraction report to 3M Belgium and instructed that all PFAS-related manufacturing processes at the Zwijndrecht facility be suspended until specifically approved due to emissions of certain PFAS molecules from the Zwijndrecht facility.

Discussions with the Flemish authorities regarding the infraction report and future operations at the Zwijndrecht facility continue and 3M Belgium is evaluating whether there may be options to restart the idled PFAS manufacturing processes, as well as other options to further accelerate the discontinuance of all PFAS manufacturing at its Zwijndrecht facility.

A review by 3M Belgium of the underlying facts related to the manufacturing processes cited by the Environmental Inspectorate is also underway.

In addition, although 3M Belgium has not received notice of any official action, recent statements by the Flemish Minister of the Environment to the effect that the government will review the integrated environmental permit for the Zwijndrecht manufacturing site suggests the potential for action that would affect that permit.

The integrated environmental permit is essential for the Zwijndrecht site’s overall manufacturing and processing operations.

A negative development in the discussions with the Flemish authorities regarding resumption of PFAS manufacturing at the Zwijndrecht facility or a negative action relating to the facility's integrated environmental permit, 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 Zwijndrecht facility, some of which may not be available or in similar quantities from other 3M facilities, which could in turn impact those businesses’ ability to fulfill supply obligations to their customers.

As previously disclosed, in October 2021, the Flemish environmental enforcement agency issued a new safety measure that prohibits, with limited exceptions, 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 State, 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.

The Council of State 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.

The agency subsequently 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.

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.

As of July 2022, the authorities had approved the restart of key production processes and 3M Belgium continues to conduct required monitoring and reporting activities.

In September 2022, the environmental enforcement agency issued an infraction report alleging that 3M Belgium had not "fully complied" with the safety measure in the operation of certain production lines.

Those production lines were determined to require approval under the provisions of the safety measure.

Notice of default – environmental law compliance (soil remediation) .

With respect to soil remediation and environmental law compliance at 3M Belgium's Zwijndrecht facility, the most recent developments include the following:

As part of ongoing soil remediation activities related to the Zwijndrecht facility, OVAM has required required 3M Belgium to submit descriptive soil investigation ("DSI").

In February 2023, OVAM rejected a 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 a document identifying proposed precautionary measures that were subsequently approved by OVAM.

3M Belgium also appealed the rejection of the DSI.

In May 2023, OVAM confirmed the main findings of the resubmitted DSI for certain zones and set an October 2023 deadline to submit a remedial action plan related to these zones.

3M Belgium submitted two additional DSIs in May 2023 for areas around the Zwijndrecht plant, both of which were rejected by OVAM.

3M Belgium has appealed the rejection of these DSIs and intends to submit a consolidated DSI for all zones, and 3M Belgium has submitted a remedial master plan for approval.

Although 3M Belgium proposed altering the October 1, 2023 deadline for the submission of certain additional DSI(s) and remedial action plans (RAP), the Flemish government informed 3M Belgium in late September 2023 that the plans were to be submitted by October 1, 2023.

3M Belgium was unable to meet the October 1, 2023 deadline, given the complexity of the issues involved and the short notice received from the Flemish government that the deadline for submission would not be extended.

3M Belgium informed the authorities that it could not meet the October 1, 2023 deadline but is continuing to work with external consultants to prepare additional DSI(s) and RAP for submission.

Separately, 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 September 2023, the Flemish government submitted its response to the petition.

3M Belgium intends to submit a final submission responding to the Flemish government’s arguments in November 2023.

The Flemish government also indicated that the Netherlands and other parties would seek to intervene in the annulment proceeding.

As previously disclosed, 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.

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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 public authorities and 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.

In June 2023, 3M Belgium submitted a petition for annulment of the Site Decision to the Belgian Council of State.

Various proposed amendments to the soil decree are pending, including a proposal to allow OVAM to require financial security for remediation work and a proposal to impose a percentage of the cost of remediating river sediment on various parties while requiring financial assurance for such work.

In July 2022, 3M Belgium and the Flemish Government announced an agreement in connection with the Zwijndrecht facility.

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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 received pre-litigation notices from individuals in Belgium indicating potential claims.

Litigation and investigations

As of September 30, 2023, a total of eight actions against 3M Belgium are pending in Belgian civil courts, and 3M Belgium has 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;

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In May 2023, the court denied the environmental injunction claim, subject to appeal.

Certain additional parties reportedly joined the complaint.

3M Belgium has not been served with any such complaint.

3M Belgium has been cooperating with the investigation regarding this complaint, including document and interview requests from the federal judicial police, and additional information requested by the authorities.

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.

3M Belgium has met, and intends to continue 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, including purported class action claims.

United States:

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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 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.

EPA has indicated that it expects to issue the final designation in February 2024.

In addition, EPA published an 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, for public comment in April 2023 and the Company submitted comments to the proposal in August 2023.

In May 2023, EPA sent two proposed rules under the Resource Conservation and Recovery Act (“RCRA”) to the United States Office of Management and Budget (“OMB”) for review.

One of the proposed rules would list PFOA, PFOS, PFBS, and Gen-X as hazardous constituents under RCRA.

The other proposed rule would expand the definition of hazardous waste subject to corrective action under RCRA.

If CERCLA or RCRA designations are finalized and become enforceable, 3M may be required to undertake additional investigative or remediation activities, including 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.

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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.

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.

In October 2023, EPA finalized a rule adding PFAS that are 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.

In September 2023, EPA finalized a rule imposing reporting and recordkeeping requirements under TSCA for manufacturers or importers, including 3M, of certain PFAS in any year since January 2011 to report certain data to EPA regarding each PFAS produced, including the following:

chemical identity, total volumes, uses, byproducts, information about environmental and health effects, number of individuals exposed during manufacture, and the manner or method of disposal.

Companies will have 18 months from the date of the rule’s publication in the Federal Register to comply with its requirements.

In January 2023, EPA issued a test order under TSCA to several 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 submitted an initial response in early 2023.

In July 2023, 3M submitted an amended response requesting an exemption from the requirements of the order, subject to 3M’s obligation to reimburse participating manufacturers for a fair share of the testing costs ultimately incurred under the order, which request was conditionally approved by EPA in July 2023.

In August 2023, EPA issued a TSCA test order to 3M and other manufacturers requiring them to conduct certain health and safety testing related HFPO-DAF, a PFAS.

In September 2023, 3M submitted a response to EPA requesting an exemption from the requirements of the order, subject to 3M’s obligation to reimburse the participating manufacturers for a fair and equitable share of the testing costs ultimately incurred under the order.

3M amended 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.

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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.

In 2023, the Minnesota legislature passed a law requiring the Commissioner of Health to amend the health risk limit for PFOS in groundwater so it does not exceed 15 ppt by January 1, 2026.

The Minnesota Pollution Control Agency ("MPCA") published the final version of its PFAS Monitoring Plan in March 2022.

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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.

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

At its Greystone, Wisconsin plant where the Company conducts mining operations, the tap water available for consumption on the grounds was recently sampled and tested, and the level of certain PFAS exceeded the state's maximum contaminant level.

Wisconsin Department of Natural Resources (DNR) in October 2023 instructed the plant to notify potential drinking water users on the grounds of the plant, and indicated that a notice of violation would be issued to the plant.

At this time, the Company cannot predict the ultimate outcome or actions that may be taken by Wisconsin DNR.

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.

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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 September 2023, MPCA opened a rulemaking to establish a program to collect the information required by the statute.

MPCA also issued a request for comments, with comments due in November 2023.

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 drinking water regulations for PFOS and PFOA.

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.

The court heard oral argument in November 2022, and issued its opinion in August 2023 upholding the rule’s validity.

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.

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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.

EGLE appealed the decision in December 2022.

In August 2023, the Michigan Court of Appeals upheld the lower court’s decision that EGLE’s rule was invalid.

EGLE has appealed this ruling to the Michigan Supreme Court.

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.

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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.

Defendants' joint motion to dismiss was denied in December 2022, and defendants' petition for mandamus with the Supreme Court of Alabama was denied in September 2023.

3M has also filed a notice of stay pending final approval of the proposed public water supplier class action settlement described below.

The case is in early stages of discovery.

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Defendants filed a joint motion to dismiss in March 2023.

3M has also filed a notice of stay pending final approval of the proposed public water supplier class action settlement described below.

Also in February 2023, two individuals who opted out of the St.

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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.

Currently in the AFFF MDL, state attorneys general lawsuits have been brought against 3M on behalf of the people of the states of Alaska, Arizona, Arkansas, California, Florida, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Rhode Island, Tennessee, Texas, Vermont, Washington, and Wisconsin, as well as on behalf of the people of the District of Columbia and the territories of Guam, Puerto Rico, and the Northern Mariana Islands.

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

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In March 2023, the federal judge granted the state’s motion to remand the case back to state court.

3M has appealed that decision.

3M has appealed that decision and oral argument was held in October 2023.

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.

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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 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 the court has set a trial-ready date in October 2024.

This suit is proceeding in state court, where the parties are engaging in discovery and the court has set a trial-ready date in March 2025.

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 AFFF MDL, which was denied at this stage in the litigation.

The state has moved to remand the case back to state court, which remains pending.

The case was removed to federal court and 3M moved to transfer it to the AFFF MDL, which was denied.

In September 2023, the federal judge granted the state's motion to remand the case back to state court.

3M is considering its options.

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 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 the 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.

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.

Both cases have been removed to federal court and the U.S.

Judicial Panel on Multidistrict Litigation (“JPML”) has transferred both cases to the AFFF MDL.

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.

In July 2023, following 3M’s removal of the other lawsuit to federal court, a federal district court ordered that the “non-AFFF” lawsuit be remanded to state court.

3M is appealing the remand decision.

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.

As described above, the AFFF lawsuit was removed to federal court and transferred to the AFFF MDL.

3M has also removed the “non-AFFF” case to federal court.

3M’s motion to transfer the “non-AFFF” case to the MDL was denied and the state’s motion to remand the case back to state court is pending.

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.

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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 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 of September 30, 2023, approximately 6,006 lawsuits (including approximately 48 putative class actions and 689 public water 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.

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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.

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 eligible PWS that have tested positive for PFAS, funding for future testing, and funding for eligible 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 involving (i) PFAS that has entered or may enter drinking water or the class member’s water system;

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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 charge reflected 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, as amended to include payments to the cities of Stuart, Rome and Middlesex (as discussed below), calls for 3M to make payments from 2023 through 2036.

The actual amounts that 3M will pay will be determined in part by which, if any, class members that do not 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.

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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 August 2023, the Court granted preliminary approval of the settlement, and a final approval hearing has been set for February 2, 2024.

The deadline for eligible public water suppliers to opt out of the PWS Settlement is December 11, 2023.

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 in connection with the PWS Settlement.

The MDL court has also directed the parties to submit a proposal for an initial set of 28 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.

Outside the MDL, a trial was also scheduled to occur in June 2023 in a water provider lawsuit brought by the City of Rome, Georgia.

3M reached a settlement agreement to resolve the case.

3M also reached a settlement in a water provider lawsuit brought by Middlesex Water Company.

Under the terms of the PWS Settlement, 3M's payments due under the PWS Settlement factor in amounts related to the City of Rome and Middlesex settlements.

Other AFFF Cases

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Two of these cases have been removed to federal court and transferred to the 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.

The five cases that remain pending in state courts are stayed by agreement of the parties.

As of September 30, 2023, the Company is aware of approximately 194 other AFFF suits outside the AFFF MDL 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.

however, several cases are expected to remain pending in state courts, including a case in Illinois state court brought by an oil refinery worker alleging harm caused by PFAS and other chemicals.

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.

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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.

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.

(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.

In New York, 3M is defending 10 cases involving 20 individual plaintiffs pending in the U.S.

District Court for the Northern District of New York against 3M, Saint-Gobain Performance Plastics Corp., Honeywell International Inc.

Plaintiffs assert various tort claims for personal injury and/or property damage and in some cases request medical monitoring.

3M has settled 32 personal injury and/or property damage cases that were pending or threatened against it in New York state and federal court concerning alleged PFOA contamination in Hoosick Falls and/or Petersburgh.

3M, Saint-Gobain and Honeywell previously settled a class action (Baker), with the federal court granting final approval in February 2022.

3M, Saint-Gobain and Honeywell collectively contributed a total amount of $ 65 million to resolve the plaintiffs' claims on behalf of themselves and the proposed classes.

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 supply.

Oral argument on a motion to dismiss that was filed by 3M and the other defendants is scheduled for July 2023.

Oral argument on a motion to dismiss that was filed by 3M and the other defendants was adjourned.

This matter is stayed pending approval of the PWS Settlement.

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.

3M has filed answers in these cases and discovery is stayed through at least December 2023 in connection with the pending approval of a separate public water suppliers settlement involving 3M and DuPont.

In Michigan, one consolidated putative class action was pending in the U.S.

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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.

The Centre case has been set for trial in November 2023, although 3M has filed a notice of stay pending final approval of the PWS Settlement.

The parties are engaged in mediation.

3M reached a settlement agreement to resolve the City of Rome case and, under the terms of the PWS Settlement, 3M’s payments due under the PWS Settlement factor in amounts related to the City of Rome settlement.

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.

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Those cases have been removed to federal court, where they are proceeding through discovery.

3M has filed a notice of stay of this case pending final approval of the PWS Settlement.

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.

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This case is now proceeding through discovery, which has been extended by the court through November 2023.

However, the portion of the case relating to Summerville’s claims has been stayed as to 3M pending final approval of the PWS Settlement.

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.

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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.

3M has filed a notice of stay of this case pending final approval of the PWS Settlement.

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.

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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 November 2022, plaintiffs filed a third amended complaint seeking to replead certain previously dismissed claims and, in August 2023, the court once again dismissed all but plaintiffs' negligence claim.

In New Jersey, 3M was 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 alleged PFAS contamination of its water system.

The parties settled in August 2023 and included in the PWS Settlement noted above, and the case was dismissed in September 2023.

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).

Those cases are stayed pending approval of the PWS Settlement.

3M, together with several co-defendants, is also defending 30 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 20 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.

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The federal court remanded the case back to state court in April 2023 and 3M has since answered the third-party complaint.

The parties in those two class actions have agreed to participate in mediation.

Discovery in the action in federal court is stayed pending the outcome of mediation.

A trial in the state court action has been nominally set for March 2024.

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 May 2023, 3M filed a motion to dismiss certain of the claims in that lawsuit and plaintiff subsequently amended his complaint to withdraw certain claims against 3M.

The case is now proceeding in discovery.

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.

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The case has been removed to federal court.

Plaintiff filed a second amended complaint in December 2022, which 3M has moved to dismiss.

Plaintiff filed a second amended complaint in November 2022, and 3M and DuPont filed a joint motion to dismiss, which was largely denied in September 2023.

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.

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3M filed a motion to dismiss the second amended complaint in March 2023.

The magistrate judge recently issued a report and recommendation on the motion to dismiss, which recommends dismissal of several claims against 3M but denies dismissal of claims based on negligence, breach of warranty for failure to warn and medical monitoring.

3M has filed objections objecting to the portions of the report that recommend denial of dismissing those claims.

Plaintiffs and the other defendants have filed objections to other aspects of the report and recommendation.

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.

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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.

Defendants’ appeal is now fully briefed and oral argument was held in October 2023.

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 continues to cooperate with the Subcommittee.

The Company continues to make progress in its work, under the supervision of state regulators, to remediate historic disposal of PFAS-containing waste associated with manufacturing operations at its Decatur, Alabama;

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In addition, the Company is treating its pumped groundwater at its Cordova wastewater treatment plant.

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.

Separately, in July 2023, 3M received from the EPA a draft for discussion of a federal administrative order under the RCRA, which would require 3M to determine the nature and extent of PFAS contamination around its Cordova facility, among other items.

In Minnesota, the Company continues to work with the MPCA pursuant to the terms of the previously disclosed May 2007 Settlement Agreement and Consent Order to address the presence of certain 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.

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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 is in negotiations with EPA, the U.S.

Department of Justice, and the Alabama, Illinois and Minnesota state environmental agencies to address claims arising under the Clean Water Act and the Toxic Substances Control Act related to the Company’s plants in those states.

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.

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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 June 30, 2023, the Company had recorded liabilities of $ 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).

During the first nine 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 $ 10.5 billion and made related payments of $ 201 million.

As of September 30, 2023, the Company had recorded liabilities of $ 10.9 billion for “other environmental liabilities.” These amounts are reflected in the consolidated balance sheet within other current liabilities ($ 3.1 billion) and other liabilities ($ 7.8 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.

As of June 30, 2023, the Company had recorded liabilities of $ 32 million for estimated non-PFAS related “environmental remediation” costs to clean up, treat, or remove hazardous substances at current or former 3M manufacturing or third-party sites.

As of September 30, 2023, the Company had recorded liabilities of $ 35 million for estimated non-PFAS related “environmental remediation” costs 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 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.

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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 June 30, 2023, the Company’s receivable for insurance recoveries related to the environmental matters and litigation was $ 8 million.

As of September 30, 2023, the Company’s receivable for insurance recoveries related to the environmental matters and litigation was $ 8 million.

Various factors could affect the timing and amount of recovery of this and future expected increases in the receivable, including (i) delays in or avoidance of payment by insurers;

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Product Liability Litigation

Combat Arms Earplugs

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 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.

Aearo Technologies sold Dual-Ended Combat Arms – Version 2 Earplugs starting in about 1999.

3M acquired Aearo Technologies in 2008 and sold these earplugs from 2008 through 2015, when the 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.

3M and Aearo Technologies believe the Combat Arms Earplugs were effective and safe when used properly, but nevertheless, as discussed below, prior to the CAE Settlement (as defined below), the Aearo Entities and 3M faced litigation from a significant number of claimants (in the range of 260,000 to 285,000 individual claimants).

As noted in the Respirator Mask/Asbestos Litigation — Aearo Technologie s 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 entered into an agreement with the Aearo Entities to fund this trust and to support the Aearo Entities as they continue to operate during the chapter 11 proceedings.

3M entered into an agreement with the Aearo Entities to fund this trust and to support the Aearo Entities in connection with 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 strategy for managing the Combat Arms Version 2 earplugs and Aearo respirator mask/asbestos alleged litigation liabilities, 3M 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 second quarter of 2022.

Under the terms of the agreement, the Company would provide additional funding if required by the Aearo Entities to resolve the matter as part of the chapter 11 proceeding.

Related to these actions, 3M 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 second quarter of 2022.

As a result of the bankruptcy proceedings, 3M deconsolidated the Aearo Entities in the third quarter of 2022, resulting in a charge that was not material to 3M.

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Court of Appeals for the Seventh Circuit.

Aearo has appealed the decision.

Aearo appealed the decision and the Seventh Circuit accepted the direct appeal.

Aearo’s appeals of the Bankruptcy Court’s preliminary injunction and motion to dismiss rulings are stayed as a result of the CAE Settlement (as defined below).

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:

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.

The court denied the Company’s 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 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.

As of June 30, 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 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 in the MDL filed a motion to 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 filed 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 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 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 place.

3M is also defending lawsuits brought primarily by non-military plaintiffs in state court in Hennepin County, Minnesota.

3M removed these actions to federal court, and the federal court remanded them to state court in 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 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.

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:

Related to the dismissal of the bankruptcy, in May 2023, the federal and state MDL courts issued orders providing that mediation would resume.

In August 2023, 3M and the Aearo Entities entered into a settlement arrangement (the “CAE Settlement”) which is structured to promote participation by claimants and is intended to resolve, to the fullest extent possible, all litigation and alleged claims involving the Combat Arms Earplugs sold or manufactured by the Aearo Entities and/or 3M, as well as potential future claims.

Pursuant to the CAE Settlement, 3M will contribute a total amount of $ 6.0 billion between 2023 and 2029, which is structured under the CAE Settlement to include $ 5.0 billion in cash consideration and $ 1.0 billion in 3M common stock.

The Company may, in its sole discretion, settle the equity portion in cash.The actual amount, payment terms and dates are subject to satisfaction of certain participation thresholds claimants must meet, including that at least 98 % of individuals with actual or potential litigation claims involving the Combat Arms Earplugs (calculated as described in the CAE Settlement) must have enrolled in the CAE Settlement and provided 3M with a full release of claims involving the Combat Arms Earplugs.

The CAE Settlement contemplates that the shares of 3M common stock to be issued in the CAE Settlement, if and when issued, will be issued in reliance on the exemption from registration provided by Section 3(a)(10) of the Securities Act of 1933, as amended.

In October 2023, the MDL court issued an order to hold a hearing jointly with the Fourth Judicial District Court of Minnesota, to be held on December 11, 2023, to consider whether the proposed transfer of common stock by the Company as partial consideration in the settlement of claims pursuant to the CAE Settlement is fair to claimants, as required by 15 U.S.C.

Section 77c(a)(10).

The CAE Settlement provides that 3M does not admit any liability or wrongdoing.

As a result of the CAE Settlement, 3M recorded a pre-tax charge of $ 4.2 billion in the third quarter of 2023.

The charge reflected the $ 5.3 billion pre-tax present value (discounted at an estimated 5.6 % interest rate at time consummation) of contributions under the CAE Settlement net of 3M’s then-existing accrual of $ 1.1 billion related to this matter.

Implementation of the CAE Settlement terms began in September 2023, when 3M paid $ 10 million to fund administrative expenses connected to the settlement and paid $ 147 million in exchange for releases from the 13 bellwether plaintiffs that obtained a verdict against 3M and the Aearo defendants.

The MDL court cases and Eleventh Circuit appeals for the 13 bellwether plaintiffs have all been dismissed consistent with the terms of the CAE Settlement.

During the first nine months of 2023, as a result of ongoing review and recent developments in ongoing litigation (including the CAE Settlement), the Company increased its existing accrual for Combat Arms Earplugs by $ 4.2 billion and made the related payments noted above.

As of September 30, 2023, the Company had an accrued liability of $ 5.2 billion related to Combat Arms Earplugs.

This amount is reflected within contingent liability claims and other within other current liabilities ($ 1.8 billion) and within other liabilities ($ 3.4 billion) on 3M’s consolidated balance sheet.

The accruals represent the Company’s estimate of the probable loss in connection with the CAE Settlement.

The Company is not able to estimate a possible loss or range of possible loss in excess of the established accruals at this time.

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

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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.

Insect Repellent

In October 2023, a putative class action was filed against 3M in the United States District Court in the Southern District of California with various allegations related to the alleged presence of benzene, a known human carcinogen, in 3M’s Ultrathon™ Insect Repellent 8 spray.

The plaintiffs seek damages and other relief based on theories of negligence, strict liability, and violations of California’s unfair competition law and Maryland’s consumer protection act.

3M is assessing the allegations in the complaint and will respond within the time established by the court proceedings.

No liability has been recorded for this litigation matter because the Company believes that any such liability is not probable and estimable at this time.

As of September 30, 2023, the Company was a named defendant in approximately 5,922 lawsuits in the United States and one Canadian putative class action with a single named plaintiff, alleging that they underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger™ patient warming system.

The 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.

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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.

In February 2022, the MDL court ordered the parties to engage in any mediation sessions that a court-appointed mediator deemed 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.

The MDL court 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, which motion was denied.

The parties, working with the mediator, agreed on the beginning of a bellwether process, which is underway, with federal court trials to potentially begin in 2024.

In addition to the federal cases, there are four state court cases relating to the Bair Hugger™ patient warming system.

Two 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;

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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.

The other Missouri case is scheduled for trial in 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 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.

Finally, a putative class action has been filed in Ramsey County, Minnesota, seeking economic damages for the use of the Bair Hugger™ system in orthopedic surgeries of medically obese people in Minnesota from May 2017 to the present.

The Ramsey County court denied a motion to dismiss in August 2023.

Two other state cases have been resolved in 2023, including a Missouri state court case that was voluntarily dismissed in June 2023.

As previously disclosed, 3M had been named a defendant in 61 cases in Minnesota state court.

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The Minnesota Court of Appeals affirmed the state court orders in their entirety and the Minnesota Supreme Court denied plaintiffs’ petition for review and entered the final dismissal in 2019, effectively ending the Minnesota state court cases.

The Company is also a defendant in a Ramsey County, Minnesota putative class action filed in June 2023 on behalf of patients who claim to have used the 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.

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.

For product liability litigation matters described in this section for which a liability has been recorded, the Company 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.

For product liability litigation matters described in this section for which a liability has been recorded, the amount recorded is not material to the Company's results of operations or financial condition.

In addition, the Company is not able to estimate a possible loss or range of possible loss in excess of the recorded liability at this time.

Federal False Claims Act / Qui Tam Litigation

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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.

In July 2023, the parties filed a joint status report with the court notifying the court of the parties’ agreement to mediate the matter, with mediation currently scheduled for November 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.

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Foreign Corrupt Practices Act ("FCPA") or other potentially applicable anti-corruption laws.

The Company has retained outside counsel and a forensic accounting firm to assist with the investigation.

In July 2019, the Company voluntarily disclosed this investigation to both the Department of Justice and Securities and Exchange Commission and is cooperating with both agencies.

The Company is in discussions related to potential resolution.

In July 2019, the Company voluntarily disclosed this investigation to both the Department of Justice ("DOJ") and Securities and Exchange Commission ("SEC") and cooperated with both agencies.

In August 2023, the Company resolved the investigation with both agencies.

The DOJ closed its investigation with no action taken against the Company.

Without admitting or denying the findings, the Company entered into a voluntary settlement with the SEC which found violations of the books and records and internal accounting controls provisions of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934.

The resolution includes an agreement to cease and desist from committing any violations of these provisions and payment of approximately $ 6.5 million .

Business Segments

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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.

The businesses associated with two groups of products (each with approximately $ 25 million in annual 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:

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(Millions) Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

Net Sales 2023 2022 2023 2022

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

Operating Performance 2023 2022 2023 2022

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Divestiture costs ( 132 ) ( 6 ) ( 359 ) ( 6 )

Gain on business divestitures 36 2,724 36 2,724

Divestiture-related restructuring actions — ( 41 ) — ( 41 )

Russia exit (charges) benefits — ( 109 ) 18 ( 109 )

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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 1. Financial Statements