What changed in this filing

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Item 1. Business

2024-02-07 compared with 2023-02-08 · 51 added, 51 removed, 206 unchanged (33% of the section changed)

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The Securities and Exchange Commission (SEC) maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC.

The public can obtain any documents that the Company files with the SEC at http://www.sec.gov.

The public can obtain any documents that the Company files with the SEC at https://www.sec.gov.

The Company files annual reports, quarterly reports, proxy statements and other documents with the SEC under the Securities Exchange Act of 1934 (Exchange Act).

3M also makes available free of charge through its website (http://investors.3M.com) the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.

3M also makes available free of charge through its website (https://investors.3M.com) the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.

3M is a diversified technology company with a global presence in the following businesses :

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and Consumer.

In July 2022, 3M announced its intention to spin off the Health Care business as a separate public company (see Note 3 for additional information).

3M is among the leading manufacturers of products for many of the markets it serves.

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The reportable segments are Safety and Industrial, Transportation and Electronics, Health Care, and Consumer.

3M’s four business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources.

3M’s business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources.

In July 2022, 3M announced its intention to spin off the Health Care business as a separate public company (see Note 3 for additional information).

Refer to segment descriptions summarized below (Financial information and other disclosures relating to 3M’s business segments and operations in major geographic areas are provided in the Notes to Consolidated Financial Statements):

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Business Segment Safety and Industrial Transportation and Electronics Health Care Consumer

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• Food safety (divested in 2022)

• Consumer health and safety

• Home improvement

• Construction and home improvement markets

• Home, health and auto care

• Stationery and office

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• Advanced ceramic solutions

• Attachment tapes, films, sound and temperature management for transportation vehicles

• Attachment/bonding, films, sound and temperature management for transportation vehicles

• Premium large format graphic films for advertising and fleet signage

• Light management films and electronics assembly solutions

• Packaging and interconnection solutions

• Chip packaging and interconnection solutions

• Semiconductor production materials

• Solutions for data centers

• Reflective signage for highway, and vehicle safety

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• Robotics and automation

• Automotive/mobility

• Electronic materials

• Automotive electrification

• Data center solutions

• Extended reality

• Semiconductor

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• Appearance auto care

Distribution :

3M products are sold through numerous distribution channels, including directly to users and through numerous e-commerce and traditional wholesalers, retailers, jobbers, distributors and dealers in a wide variety of trades in many countries around the world.

Management believes the confidence of wholesalers, retailers, jobbers, distributors and dealers in 3M and its products — a confidence developed through long association with skilled marketing and sales representatives — has contributed significantly to 3M’s position in the marketplace and to its growth.

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Human Capital :

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3M is committed to the safety, health, and well-being of its employees.

The Company continuously evaluates opportunities to raise safety and health standards, visiting sites to identify and manage environmental health and safety risks;

The Company continuously evaluates opportunities to raise safety and health standards, training site leaders and conducting site visits to identify and manage environmental health and safety risks;

evaluating compliance with regulatory requirements and 3M policy;

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3M maintains talent and succession planning processes, including regular review by the Company’s chief executive officer (CEO) and reporting up through the Board of Directors.

The Company has a suite of high-potential leadership development programs which brings a consistent approach to leadership development.

3M also has development programs for managers and supervisors and provides learning opportunities for all employees, in addition to regular coaching and support from their supervisor.

The Company provides leadership development experiences through job-based or project-based assignments, assessment and coaching, and targeted skill-development where leaders are given the opportunity to learn, apply, and share their skills.

3M also has prioritized learning journeys for managers and supervisors and provides opportunities for all employees to learn, in addition to regular coaching and support from their supervisor.

With the Company’s global online employee learning platform, employees are able to access unique, just-in-time development resources in over 15 languages to support their career aspirations and advance their skills.

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A diverse, global workforce and inclusive culture that provides fair and equitable opportunities helps 3M remain competitive, advance its innovation culture, and serve customers.

3M focuses on attracting and advancing top talent and has publicly committed to advance global diversity in management across all dimensions, with additional specific goals to continue advancing pay equity and to increase the Company’s diversity with underrepresented groups.

3M has gender, race/ethnicities pay parity in all geographies, and processes in place to ensure this is maintained.

Additionally, 3M focuses on attracting and advancing top talent and has publicly committed to advance global diversity in management across all dimensions, with additional specific goals to increase the Company’s diversity with underrepresented groups.

3M supports these values with an internal CEO Inclusion Council, a forum led by senior management to advance diversity, equity, and inclusion initiatives.

The Company also plans to invest $50 million over 2020 to 2025 to address racial opportunity gaps through workforce development initiatives in the communities in which its employees live and 3M business operates.

The Company is on pace, having delivered over $39 million through 2023.

Compensation and Benefits :

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Raw Materials :

In 2022, many geopolitical, logistics, and disruptive events caused imbalance in the global supply chain, similar to the past few years.

The Company experienced raw material price inflation and constrained supply throughout the global marketplace and continued to deploy productivity projects to minimize the impact.

To help manage disruption in its manufacturing operations, 3M deployed careful management of existing raw material inventories, strategic relationships with key suppliers, and qualification of additional supply sources.

3M manages spend category price risks through negotiated supply contracts and price protection agreements.

In addition, 3M evaluates suppliers’ conformance with environmental and social compliance requirements.

Overall, on a consolidated basis, 3M experienced net raw material price inflation in 2022.

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In 2023, global supply chains moved towards greater balance, with disruptions driven from more isolated factors than in the prior year.

Overall, 3M experienced year-over-year market inflation in 2023 driven by the carryover of 2022 impacts, and effects of a historically strong labor market.

Market price risks were partially mitigated via negotiated supply contracts.

Patents, Trademarks and Licenses :

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Although an estimate of certain nearer-term capital expenditures is provided above, 3M cannot predict with certainty whether future costs of compliance with government regulations (including environmental regulations) will have a material effect on its capital expenditures, earnings or competitive position.

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Information about our Executive Officers :

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Roman 64 Chairman of the Board and Chief Executive Officer 2019 Chief Executive Officer, 2018-2019

Chief Operating Officer and Executive Vice President, 2017-2018

Executive Vice President, Industrial Business Group, 2014-2017

Banovetz 55 Executive Vice President, Chief Technology Officer and Environmental Responsibility 2021 Senior Vice President, Chief Technology Officer and Environmental Responsibility, 2021

Monish Patolawala 54 President, Chief Financial Officer

2023 Executive Vice President, Chief Financial and Transformation Officer, 2021-2023

Senior Vice President and Chief Financial Officer 2020-2021

Chief Financial Officer, Health Care and Vice President, Operational Transformation, General Electric, 2019-2020

Chief Financial Officer, Health Care, General Electric, 2015-2019

Banovetz 56 Executive Vice President, Chief Technology Officer and Environmental Responsibility

2023 Senior Vice President, Chief Technology Officer and Environmental Responsibility, 2021

Senior Vice President, Innovation and Stewardship and Chief Technology Officer, 2020

Senior Vice President of Research and Development and Chief Technology Officer, 2017-2019

Karina Chavez 49 Senior Vice President and Chief Strategy Officer 2021 Senior Vice President, Customer Operations, 2020-2021

Karina Chavez 50

Group President, Consumer

Senior Vice President and Chief Strategy Officer, 2021-2023

Senior Vice President, Customer Operations, 2020-2021

Global Business Director, Home Improvement Business, 2017-2020

64 Executive Vice President and Chief Public Affairs Officer

Independent communications and crisis management consultant, 2017-2023

Board member, The Rumsfeld Foundation, 2016 - present

Senior Advisory Committee Member, John F.

Kennedy School at Harvard University, 2007 - present

Zoe Dickson 50 Executive Vice President and Chief Human Resources Officer 2021 Senior Vice President, Talent, Learning and Insights, 2021

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Vice President, Global Human Resources Business Operations, Human Resources 2018-2019

HR Director, Consumer Business Group 2016-2018

Gibbons 62 Group President, Enterprise Operations 2021 Chief Executive Officer, Tirehub, 2018-2021

Executive Vice President, Global Development and Product Supply & CSCO, Mattel, Inc, 2013-2018

Hammes 48 Executive Vice President, Chief Country Governance and Services Officer 2021 Senior Vice President, Manufacturing & Supply Chain, 2019-2021

Senior Vice President, Business Transformation & Information Technology, 2017-2019

Vice President, Corporate Controller and Chief Accounting Officer, 2014-2017

Khandpur 55 Group President, Transportation & Electronics 2021 Executive Vice President, Transportation & Electronic Business Group, 2019-2021

Executive Vice President, Electronics & Energy Business Group, 2017-2019

Senior Vice President, Research and Development, and Chief Technology Officer, 2014-2017

Lavers 59 Group President, Consumer Business Group and Interim Group President, Health Care Business Group 2022 Executive Vice President, Consumer Business Group, 2020-2021

Vice President and General Manager, Automotive and Aerospace Solutions Division, 2019-2020

Vice President and General Manager, Construction and Home Improvement Division, 2015-2019

Chris Goralski

52 Group President, Safety & Industrial

2023 President, Industrial Adhesives & Tapes Division, 2020-2023

Vice President, Environmental Stewardship, Research & Development, 2018-2020

Chief Executive Officer, Healthcare

Chairman of the Board and Chief Executive Officer, Zimmer Biomet, 2021-2023

Chief Executive Officer, Zimmer Biotmet, 2017-2021

Mark Murphy 55 Executive Vice President, Chief Information and Digital Officer 2021 Chief Information Officer, Abbott Laboratories, 2020-2021

Global Chief Information Officer and Vice President, BTS, Abbott Laboratories, 2018-2020

Medical Devices Chief Information Officer and Divisional VP, Abbott Laboratories, 2017-2018

Monish Patolawala 53 Executive Vice President, Chief Financial and Transformation Officer 2021 Senior Vice President and Chief Financial Officer 2020-2021

Chief Financial Officer, Health Care and Vice President, Operational Transformation, General Electric, 2019-2020

Chief Financial Officer, Health Care, General Electric, 2015-2019

Rhodes 61 Executive Vice President, Chief Legal Affairs Officer 2022 Senior Vice President and Deputy General Counsel, 2021

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President and Chief Intellectual Property Counsel, Office of Intellectual Property Counsel and 3M Innovative Properties 2008-2019

Vale 56 Group President, Safety & Industrial Business Group 2021 Executive Vice President, Safety & Industrial Business Group, 2019-2021

Executive Vice President, Health Care Business Group, 2016-2019

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Cautionary Note Concerning Factors That May Affect Future Results

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

The Company may also make forward-looking statements in other reports filed with the Securities and Exchange Commission, in materials delivered to shareholders and in press releases.

The Company may also make forward-looking statements in other reports filed with the United States Securities and Exchange Commission ("SEC"), in materials delivered to shareholders and in press releases.

In addition, the Company’s representatives may from time to time make oral forward-looking statements.

Forward-looking statements relate to future events and typically address the Company’s expected future business and financial performance.

Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” “forecast” and other words and terms of similar meaning, typically identify such forward-looking statements.

Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” "would," “forecast” and other words and terms of similar meaning, typically identify such forward-looking statements.

In particular, these include, among others, statements relating to:

• worldwide economic, political, regulatory, international trade, geopolitical, capital markets and other external conditions, such as interest rates, monetary policy, financial conditions of our suppliers and customers, trade restrictions such as tariffs and retaliatory counter measures, inflation, recession, military conflicts, and natural and other disasters or climate change affecting the operations of the Company or our suppliers and customers,

• risks related to unexpected events such as the public health crises associated with the coronavirus (COVID-19) global pandemic,

• liabilities and the outcome of contingencies related to certain fluorochemicals known as "PFAS," as well as matters related to the Company's plans to discontinue the use of PFAS,

• risks related to the proposed class-action settlement (“PWS Settlement”) to resolve claims by public water systems in the United States regarding PFAS, including whether court approval of the PWS Settlement will be obtained, whether the number of plaintiffs that opt out of the PWS Settlement will exceed current expectations or will exceed the level that would permit 3M to terminate the PWS Settlement (and whether 3M will elect to terminate the PWS Settlement if this occurs), whether the PWS Settlement is appealed, the timing and amount of payments made under the PWS Settlement, and the impact of the PWS Settlement on other PFAS-related matters,

• the Company’s strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of financial performance, and market position,

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• the scope, nature or impact of acquisition, strategic alliance and divestiture activities,

• operational execution, including inability to generate productivity improvements as estimated,

• operational execution, including inability to generate productivity improvements and impact of organizational restructuring activities,

• future levels of indebtedness, common stock repurchases and capital spending,

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• the proposed spin-off of the Company's Health Care business to establish two separate public companies,

• the voluntary chapter 11 proceedings initiated by the Company's Aearo Entities, and

• matters relating to Combat Arms Earplugs (“CAE”), including those related to the August 2023 settlement that is intended to resolve, to the fullest extent possible, all litigation and alleged claims involving the CAE sold or manufactured by the Company's subsidiary Aearo Technologies and certain of its affiliates (“Aearo Entities”) and/or 3M (“CAE Settlement”), including, but not limited to, whether the anticipated full participation by plaintiffs in the CAE Settlement will be achieved, whether the number of plaintiffs who participate in the CAE Settlement will meet the full participation expectations or will fall below the level that would permit 3M to terminate the CAE Settlement (and whether 3M will elect to terminate the CAE Settlement if this occurs), whether there will be a significant number of future claims by plaintiffs that decline to participate in the CAE Settlement, whether the CAE Settlement is appealed or challenged, the filing and outcome of additional litigation, if any, relating to the products that are the subject of the CAE Settlement, or changes in laws or regulations related to the CAE products or CAE settlement, and

• laws and regulations, as well as legal compliance risks (including third-party risks), and legal and regulatory proceedings related to the same, including with regards to environmental matters and product liability, in the United States and other countries in which we operate.

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Important information as to these factors can be found in this document, including, among others, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings of “Overview,” “Financial Condition and Liquidity” and annually in “Critical Accounting Estimates.” Discussion of these factors is incorporated by reference from Part I, Item 1A, “Risk Factors,” of this document, and should be considered an integral part of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For additional information concerning factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Form 10-K, 10-Q and 8-K filed with the SEC from time to time.

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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-K

Item 1. Business