What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-05 compared with 2024-02-07 · 271 added, 315 removed, 526 unchanged (53% of the section changed)

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Forward-looking statements in Item 7 may involve risks and uncertainties that could cause results to differ materially from those projected (refer to the section entitled Cautionary Note Concerning Factors That May Affect Future Results in Item 1 and the risk factors provided in Item 1A for discussion of these risks and uncertainties).

Additional information about results of operations and financial condition for 2022 and 2021 (including the detailed discussion of the prior year 2022 to 2021 year-over-year changes) can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections in 3M's Annual Report on Form 10-K for the year ended December 31, 2022.

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

Effective in the first quarter of 2023, 3M made the following changes:

• Changes in measure of segment operating performance and segment composition used by 3M’s chief operating decision maker—impacting 3M’s disclosed measure of segment profit/loss (business segment operating income (loss))—and realignment of 3M's Consumer business segment from four divisions to three divisions.

See additional information in Note 21.

3M's disclosed disaggregated revenue was also updated as a result of these changes.

See additional information in Note 2.

• Changes to non-GAAP measures - certain amounts adjusted for special items.

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

Information provided herein reflects the impact of these changes for all periods presented.

3M manages its operations in four operating business segments:

Certain changes are reflective in this document for all applicable periods presented.

These include:

• As discussed in Note 2, on April 1, 2024, 3M completed the previously announced separation of its Health Care business (the Separation) through a pro rata distribution of 80.1% of the outstanding shares of Solventum Corporation (Solventum) to 3M stockholders.

As a result of the Separation, Solventum became an independent public company and 3M no longer consolidates Solventum into 3M’s financial results.

In connection with the Separation, the historical net income of Solventum and applicable assets and liabilities included in the Separation are reported in 3M's consolidated financial statements as discontinued operations.

• 3M made certain changes to the composition of segment information reviewed by 3M's chief operating decision maker (CODM) effective in the second quarter of 2024 largely as a result of the separation of Solventum and changes within its business segments effective in the first quarter of 2024 as further described in Note 22.

To the extent these changes impacted 3M's disclosed disaggregated revenue information, data in Note 3 has also been updated.

Certain additional information about results of operations and financial condition for 2023 and 2022, not otherwise impacted by reflection of the above for applicable prior periods presented, can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections in 3M's Annual Report on Form 10-K for the year ended December 31, 2023.

3M manages its continuing operations in three operating business segments:

Safety and Industrial;

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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).

The Company continues to make progress on the Health Care business spin-off.

The transaction is expected to be completed in the first half of 2024 and is subject to satisfaction of customary conditions, including final approval from the 3M Board of Directors and receipt of regulatory approvals, discussed in Note 3.

The completion of the spin will enable the creation of two world-class public companies well positioned to pursue their respective growth plans, tailor capital allocation strategies, and create long-term value for shareholders.

From a geographic perspective, any references to EMEA refer to Europe, Middle East and Africa on a combined basis.

References are made to organic sales change (which include both organic volume impacts and selling price impacts), which is defined as the change in net sales, absent the separate impacts on sales from foreign currency translation and acquisitions, net of divestitures.

Acquisition and divestiture sales change impacts, if any, are measured separately for the first twelve months post-transaction.

Acquisition and divestiture sales change impacts, if any, are measured separately for the first twelve months post-transaction and, beginning April 2024, include the impact of commercial agreements associated with the separation of Solventum.

3M believes this information is useful to investors and management in understanding ongoing operations and in analysis of ongoing operating trends.

3M is impacted by certain special items such as costs for significant litigation and the sales and income associated with manufactured PFAS products.

During 2023, 3M's costs for significant litigation (see Certain amounts adjusted for special items - (non-GAAP measures) section below) totaled approximately $15.2 billion pre-tax and included, among other things, pre-tax charges of $10.5 billion and $4.3 billion (inclusive of imputed interest) related to the PWS Settlement and the CAE Settlement (discussed in Note 18), respectively, both announced in 2023.

See Certain amounts adjusted for special items - (non-GAAP measures) section below for additional discussion of these and other special items, including references therein to where further information is provided.

Additional information regarding certain items impacting pre-2024 periods that may also be relevant in 2024 can be found in the Overview section of Part II, Item 7 as well as in further sections of 3M’s 2023 Annual Report on Form 10-K.

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

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

Earnings (loss) per diluted share Year ended December 31,

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

The following table provides the increases (decreases) in diluted earnings (loss) from continuing operations per share.

Earnings (loss) from continuing operations per diluted share Year ended December 31,

Same period last year $ (15.17) $ 7.07

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Divestiture-related restructuring actions — 0.05

Russia exit charges 0.20 —

Russia exit charges (benefits)

Manufactured PFAS products 0.28 0.90

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Restructuring and related charges 0.23 (0.59)

Raw material impact (0.24) (0.99)

Foreign exchange impacts (0.13) (0.10)

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Gain on business divestitures — 0.05

Divestiture-related restructuring actions — (0.05)

Russia exit (charges) benefits — 0.04

Manufactured PFAS products (0.20) (0.28)

Pension risk transfer cost (1.11) —

Solventum ownership benefit from change in value

Total special items (0.04) (21.21)

Current period $ 7.26 $ (15.17)

The Company refers to various "adjusted" amounts or measures on an “adjusted basis.” These exclude special items.

The Company refers to various "adjusted" amounts or measures on an “adjusted" basis.

These exclude special items.

These non-GAAP measures are further described and reconciled to the most directly comparable GAAP financial measures in the Certain amounts adjusted for special items - (non-GAAP measures) section below.

A discussion related to the components of year-on-year changes in earnings (loss) per diluted share follows:

A discussion related to the components of year-on-year changes in earnings (loss) from continuing operations per diluted share follows:

Organic growth/productivity and other:

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

• In 2024, the following components impacted earnings (loss) from continuing operations per diluted share year-on-year:

◦ Year-on-year increase of $0.77 per share as a result of benefits from organic growth (including from new product launches), productivity, strong spending discipline and restructuring (including a $30 million cumulative translation adjustment restructuring benefit as certain entities were substantially liquidated in the fourth quarter of 2024) partially offset by growth investments

◦ Nonrecurring items including gain on property sales resulted in a net year-on-year increase of $0.08 per share

◦ Income from transition services agreements with Solventum (refer to Note 2 for additional discussion) resulted in a net year-on-year increase of $0.08 per share.

The year-on-year impact of non-Solventum related transition services agreements is included in acquisitions/divestitures as further described below.

• In 2023, the following components impacted earnings (loss) from continuing operations per diluted share year-on-year:

◦ Declines in disposable respirator demand year-on-year and the 2022 exit of operations in Russia negatively impacted earnings (loss) per share by $0.38.

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and Europe's geopolitical impacts

• In 2022, the following components impacted earnings per diluted share year-on-year:

◦ Declines in disposable respirator demand year-on-year negatively impacted earnings per share by $0.29.

◦ Remaining organic growth/productivity and other impacts resulted in a net year-on-year benefit $0.51 to earnings per share which was impacted by the following:

▪ Benefits from strong pricing, spending discipline and 2021 restructuring actions

▪ Manufacturing headwinds from global supply chain challenges;

geopolitical impacts due to the Russia/Ukraine conflict as well as ongoing COVID-related challenges in China

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

▪ Increased investments in growth, productivity and sustainability

• In 2023, lower defined benefit pension and postretirement service cost decreased expense year-on-year.

• In 2024 and 2023, lower defined benefit pension and postretirement service cost decreased expense year-on-year.

Restructuring and related charges:

• 3M recorded restructuring pre-tax charges of $437 million and $59 million in 2023 and 2022, respectively, (refer to Note 5 for additional discussion).

In addition, 3M recorded certain related accelerated depreciation.

Raw material impact:

• In 2023, 3M continued to experience headwinds year-on-year from the carryover impact of raw material, logistics and energy cost inflation.

• In 2022, 3M experienced inflationary pressures with year-on-year increases in raw material and logistics costs driven by many geopolitical, logistics, and disruptive events that caused imbalance in the global supply chain.

• 3M recorded restructuring pre-tax charges of $187 million, $415 million, and $16 million in 2024, 2023, and 2022 respectively, related to the 2023 to 2025 structural reorganization actions and 2020 through 2022 operational/marketing capability actions (refer to Note 6 for additional discussion).

The 2024 pre-tax charge included a $30 million cumulative translation adjustment restructuring benefit as certain entities were substantially liquidated in the fourth quarter of 2024.

That benefit is reflected in organic growth/productivity and other as described above.

In addition, 3M recorded certain pre-tax adjustments, accelerated depreciation and other charges related to these actions of $44 million and $4 million in 2024 and 2023, respectively.

3M also recorded restructuring charges in 2023 and 2024 for PFAS exit actions and in 2022 for divestiture-related restructuring actions as further described in Note 6 which are part of the manufactured PFAS products and divestiture-related restructuring actions special items, respectively (see the Certain amounts adjusted for special items - (non-GAAP measures) section below).

Foreign exchange impacts:

• Foreign currency impacts (net of hedging) increased operating loss by approximately $162 million and decreased operating income by approximately $271 million (or an increase of pre-tax loss by approximately $159 million and a decrease in pre-tax earnings of approximately $280 million) year-on-year for 2023 and 2022, respectively.

• Foreign currency impacts (net of hedging) decreased operating income from continuing operations by approximately $101 million (or a decrease of pre-tax income by approximately $104 million) year-on-year for 2024.

Foreign currency impacts (net of hedging) increased operating loss from continuing operations by approximately $116 million (or a increase of pre-tax loss by approximately $111 million) year-on-year for 2023.

These estimates include:

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Acquisitions/divestitures:

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

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

◦ In 2023, 3M completed the sale of its dental local anesthetic business (discussed in Note 3).

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

◦ In 2022, 3M deconsolidated the Aearo Entities and, in 2023, reconsolidated those entities (discussed in Note 18).

• Acquisition and divestiture impacts are primarily measured separately for the first 12 months post-transaction, except as noted below.

Divestiture impact generally includes lost income from divested businesses.

Further relevant information includes:

◦ Divestiture impact also includes the effect of new commercial agreements associated with the April 2024 separation of Solventum (discussed in Note 2).

Divestiture impact further includes the year-on-year impact of transition services agreements over the duration of those agreements, other than those with Solventum (the impact of which are included in organic growth/productivity and other as described above).

◦ In 2023, 3M completed the sale of its dental local anesthetic business and in 2022 completed the split-off of the Food Safety business (discussed in Note 4).

◦ Deconsolidation/reconsolidation of Aearo entities - in the third quarter of 2022, 3M deconsolidated the Aearo Entities and, in the second quarter of 2023, reconsolidated those entities.

For each of the 12-months post-deconsolidation and post-reconsolidation, impacts are each reflected separately as divestiture and acquisition, respectively.

Other expense (income), net:

• Interest expense (net of interest income) included in other expense (income), net as presented above decreased in 2023 compared to the same period year-on-year driven by interest income on invested cash.

• Interest expense (net of interest income) decreased in 2022 compared to the same period year-on-year driven by debt maturities in the ordinary course and interest income on invested cash.

• Interest expense (net of interest income) included in other expense (income), net as presented above decreased year-on-year for both 2024 and 2023.

• Lower income related to non-service cost components of pension and postretirement expense increased expense year-on-year for both 2024 and 2023.

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• Certain items above reflect specific income tax rates associated therewith.

Overall, the effective tax rates for 2023, 2022, and 2021 were 27.8 percent on a pre-tax loss, 9.6 percent on pre-tax income and 17.8 percent on pre-tax income, respectively.

The primary factors that impacted the comparison of the 2023 and 2022 rates were the 2023 charges related to the PWS Settlement and the CAE Settlement (discussed in Note 18) and the tax impact associated with the 2022 charge related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 18), along with the tax efficient structure associated with the 2022 gain on split-off of the Food Safety business.

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

• On an adjusted basis (see section entitled Certain amounts adjusted for special items - (non-GAAP measures)) , the effective tax rates for 2023, 2022, and 2021 were 17.5 percent, 17.5 percent, and 18.1 percent, respectively.

Overall, the effective tax rates for 2024, 2023, and 2022 were 16.7 percent on a pre-tax income, 25.4 percent on pre-tax loss and 4.5 percent on pre-tax income, respectively.

The primary factors that impacted 2024 were the effective tax rate benefit on the change in value of 3M's retained ownership interest in Solventum offset by the effective tax rate on the PWS Settlement and the CAE Settlement (as discussed in Note 19), including 3M’s related decision in the fourth quarter of 2024 to defer certain deductions and accelerate income for tax purposes.

The primary factors that impacted the 2023 rate were the charges related to the PWS Settlement and the CAE Settlement (as discussed in Note 19).The 2022 rate was impacted by the tax efficient structure associated with the 2022 gain on split-off of the Food Safety business (see Note 4).

• On an adjusted basis (as discussed below ) , the effective tax rates for 2024, 2023, and 2022 were 19.6 percent, 19.2 percent, and 16.6 percent, respectively.

Shares of common stock outstanding:

• Lower shares outstanding increased earnings per share per diluted share for 2023 and 2022.

• Shares outstanding impacted earnings (loss) from continuing operations per share year-on-year.

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

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Certain measures adjust for the impacts of special items.

Special items for the periods presented include the items described below.

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

In 2023, 3M changed certain of its non-GAAP measures by adjusting for the results of manufactured PFAS products in arriving at results, adjusted for special items.

In the fourth quarter of 2022, 3M recorded a charge for PFAS manufacturing exit costs and included it as an adjustment in arriving at results, adjusted for special items.

The 2023 non-GAAP measure change involved expanding the extent of adjustment to include the sales and estimates of income (including exit costs) and associated activity regarding manufactured PFAS products that 3M plans to exit by the end of 2025.

The information herein reflects the impacts of these changes for all periods presented.

Special items for the periods presented include the items described in the section entitled “Description of special items”.

Because 3M provides certain information with respect to business segments, it is noteworthy that special items impacting operating income (loss) are reflected in Corporate and Unallocated, except as described with respect to net costs for significant litigation and manufactured PFAS products items in the “Description of special items” section.

The reconciliations below, therefore, also include impacted segments as applicable.

This document contains measures for which 3M provides the reported GAAP measure and a non-GAAP measure adjusted for special items.

The document also contains additional measures which are not defined under U.S.

These measures and reasons 3M believes they are useful to investors (and, as applicable, used by 3M) include:

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• Operating income (loss), segment operating income (loss) and operating income (loss) margin

• Income (loss) before taxes

• Income (loss) from continuing operations before taxes

• Provision for income taxes and effective tax rate

• Net income (loss)

• Earnings (loss) per share

• Net income (loss) from continuing operations

• Earnings (loss) per share from continuing operations

Special items for the periods presented include:

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Net costs include the impacts of changes in accrued liabilities (including interest imputation on applicable settlement obligations), external legal fees, and insurance recoveries, along with the associated tax impacts.

Associated tax impacts of significant litigation include impacts on Foreign Derived Intangible Income (FDII), Global Intangible Low Taxed Income (GILTI), foreign tax credits and tax costs of repatriation.

3M does not consider the elements of the net costs associated with these matters to be normal, operating expenses related to the Company’s ongoing operations, revenue generating activities, business strategy, industry, and regulatory environment.

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

In addition, during the voluntary chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023—see Note 18), costs associated with the Aearo portion of respirator mask/asbestos matters were reflected in corporate special items in Corporate and Unallocated.

In addition, during the voluntary chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023), costs associated with the Aearo portion of respirator mask/asbestos matters were reflected in corporate special items in Corporate and Unallocated.

Prior to the bankruptcy, costs associated with Combat Arms Earplugs matters were reflected as part of special items in the Safety and Industrial business segment.

Gain/loss on sale of business divestitures:

Gain/loss on business divestitures:

• In 2023, 3M recorded a gain related to the sale of its dental local anesthetic business partially offset by a loss associated with a previously contingent indemnification obligation from a 2020 divestiture.

Refer to Note 3 for further details.

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

Refer to Note 4 for further details.

Divestiture costs:

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

• These include certain limited costs that were not eligible to be included within discontinued operations related to separating and divesting substantially an entire business segment of 3M following public announcement of its intended divestiture.

As a result of completion of the April 2024 separation of Solventum, this includes the tax cost of updating 3M’s previous indefinite reinvestment plans on past unrepatriated earnings through the period of the Separation’s close and to tax positions retained by 3M.

Divestiture-related restructuring actions:

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

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

Refer to Note 6 for further details.

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

Refer to Note 17 for further details.

Pension risk transfer charge:

• In 2024, primarily in the second quarter, 3M recorded a non-cash pension settlement charge reflected in other expense (income), net as a result of transferring a portion of its U.S.

pension payment obligations and related plan assets to an insurance company (as discussed in Note 15).

Solventum ownership - change in value:

• This amount relates to the change in value of 3M's retained ownership interest in Solventum common stock reflected in other expense (income), net.

Year ended December 31, 2022

(Dollars in millions, except per share amounts) Net sales Operating income (loss) Operating income (loss) margin Income (loss) before taxes Provision (benefit) for income taxes Effective tax rate Net income (loss) attributable to 3M Earnings per diluted share

(Dollars in millions, except per share amounts) Net sales Operating income (loss) Operating income (loss) margin Income (loss) from continuing operations before taxes Provision (benefit) for income taxes Effective tax rate Net income (loss) from continuing operations attributable to 3M Earnings (loss) from continuing operations per diluted share

Safety and Industrial

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Manufactured PFAS products (1,351) 631 631 121 510 0.90

Gain on business divestitures — (2,724) (2,724) (39) (2,685) (4.73)

Russia exit charges (benefits) — 101 101 (2) 103 0.19

Divestiture-related restructuring actions — 41 41 9 32 0.05

Divestiture costs — 8 8 — 8 0.01

Total special items (1,351) 348 348 565 (217) (0.38)

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Year ended December 31, 2023

(Dollars in millions, except per share amounts) Net sales Sales change Operating income (loss) Operating income (loss) margin Income (loss) before taxes Provision (benefit) for income taxes Effective tax rate Net income (loss) attributable to 3M Earnings per diluted share Earnings (loss) per diluted share percent change

(Dollars in millions, except per share amounts) Net sales Sales change Operating income (loss) Operating income (loss) margin Income (loss) from continuing operations before taxes Provision (benefit) for income taxes Effective tax rate Net income (loss) from continuing operations attributable to 3M Earnings (loss) from continuing operations per diluted share Earnings (loss) from continuing operations per diluted share percent change

Safety and Industrial

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Total Company

GAAP amounts $ 34,229 (3.2) % $ 6,539 19.1 % $ 6,392 $ 612 9.6 % $ 5,777 $ 10.18 1 %

GAAP amounts $ 24,610 (5.9) % $ (10,689) (43.4) % $ (11,271) $ (2,867) 25.4 % $ (8,402) $ (15.17) N/M

Adjustments for special items:

Net costs for significant litigation 1

— 14,869 15,245 3,615 11,630 21.00

Manufactured PFAS products (1,289) 205 205 50 155 0.28

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Russia exit charges (benefits) — (18) (18) 3 (21) (0.04)

Divestiture-related restructuring actions — 41 41 9 32 0.05

Divestiture costs — 13 13 4 9 0.02

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Adjusted amounts (non-GAAP measures) $ 23,321 (6.0) % $ 4,344 18.6 % $ 4,138 $ 794 19.2 % $ 3,346 $ 6.04 (10)%

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

Year ended December 31, 2024

(Dollars in millions, except per share amounts) Net sales Sales change Operating income (loss) Operating income (loss) margin Income (loss) before taxes Provision (benefit) for income taxes Effective tax rate Net income (loss) attributable to 3M Earnings (loss) per diluted share Earnings (loss) per diluted share percent change

Safety and Industrial

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Total Company

GAAP amounts $ 32,681 (4.5) % $ (9,128) (27.9) % $ (9,688) $ (2,691) 27.8 % $ (6,995) $ (12.63) N/M

GAAP amounts $ 24,575 (0.1) % $ 4,822 19.6 % $ 4,819 $ 804 16.7 % $ 4,009 $ 7.26 148 %

Adjustments for special items:

Net costs for significant litigation — 81 800 68 732 1.32

— 14,869 15,245 3,615 11,630 21.00

Manufactured PFAS products (945) 144 144 34 110 0.20

Gain on business divestitures — (36) (36) (11) (25) (0.05)

Russia exit charges (benefits) — (18) (18) 3 (21) (0.04)

Divestiture costs — 20 20 (111) 131 0.24

Solventum ownership - change in value — — (1,564) — (1,564) (2.83)

Pension risk transfer charge — — 808 191 617 1.11

Total special items (945) 245 208 182 26 0.04

Adjusted amounts (non-GAAP measures) $ 23,630 1.3 % $ 5,067 21.4 % $ 5,027 $ 986 19.6 % $ 4,035 $ 7.30 21 %

Year ended December 31, 2023

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The following tables contain sales and operating income (loss) results by business segment for the years ended December 31, 2024, 2023 and 2022.

Refer to the section entitled Performance by Business Segment later in MD&A for additional discussion concerning 2023 versus 2022 results, including Corporate and Unallocated.

Refer to the section entitled Performance by Business Segment later in MD&A for additional discussion concerning 2024 versus 2023 results for 3M's reportable business segments, as well as discussion of Corporate and Unallocated and Other.

Corporate and Unallocated and Other are not reportable business segments as they do not meet the segment reporting criteria.

Refer to Note 22 for additional information on business segments.

2023 2022 % change

(Dollars in millions) Net Sales % of Total Operating Income (Loss) Net Sales % of Total Operating Income (Loss) Net Sales Operating Income (Loss)

Business Segments

2024 2023 2022

(Dollars in millions) Net Sales % of Total Operating Income (Loss) Net Sales % of Total Operating Income (Loss) Net Sales % of Total Operating Income (Loss)

Safety and Industrial $ 10,961 44.6 % $ 2,491 $ 10,956 44.5 % $ 2,324 $ 11,604 44.4 % $ 1,135

Transportation and Electronics 8,380 34.1 1,578 8,501 34.5 1,312 8,902 34.0 973

Health Care 8,195 25.1 1,603 8,427 24.6 1,799 (2.8) (10.9)

Consumer 4,931 20.1 932 5,026 20.4 904 5,292 20.2 978

Total reportable business segments

24,272 98.8 5,001 24,483 99.4 4,540 25,798 98.6 3,086

Corporate and Unallocated 271 1.1 (173) 90 0.4 (15,284) 82 0.3 1,213

Total Company $ 32,681 100.0 % $ (9,128) $ 34,229 100.0 % $ 6,539 (4.5) N/M

Other 32 0.1 (6) 37 0.2 55 281 1.1 70

Total Company $ 24,575 100.0 % $ 4,822 $ 24,610 100.0 % $ (10,689) $ 26,161 100.0 % $ 4,369

Operating Income (Loss) Change by Business Segment Safety and Industrial Transportation and Electronics Consumer Total Company

2024 vs 2023 % Change

7.2% 20.2% 3.1% N/M

2023 vs 2022 % Change

104.7% 34.9% (7.6)% N/M

Year ended December 31, 2023

Worldwide Sales Change

By Business Segment Organic sales Acquisitions Divestitures Translation Total sales change

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Transportation and Electronics (3.5) 0.7 (0.7) (1.0) (4.5)

Health Care 0.7 — (3.1) (0.4) (2.8)

Consumer (4.7) — (0.1) (0.2) (5.0)

Total Company (4.3) 0.3 (1.2) (0.7) (5.9)

Year ended December 31, 2024

By Business Segment Organic sales Acquisitions Divestitures Translation Total sales change

Safety and Industrial 0.7 % — % — % (0.7) % — %

Transportation and Electronics (1.0) 0.6 — (1.0) (1.4)

Consumer (1.2) — — (0.7) (1.9)

Total Company (0.2) 0.2 0.6 (0.7) (0.1)

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section for additional details on the impact of special items on sales (and sales change) and operating income (loss) by business segment.

Sales by geographic area:

Percent change information compares the years ended December 31, 2023 with the same prior year period, unless otherwise indicated.

Percent change information compares the years ended December 31, 2024 and 2023, unless otherwise indicated.

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

Year ended December 31, 2024

Americas Asia Pacific Europe, Middle East & Africa Other Unallocated Worldwide

Americas Asia Pacific Europe, Middle East & Africa Worldwide

Net sales (millions) $ 13,405 $ 6,994 $ 4,176 $ 24,575

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Year ended December 31, 2023

Americas Asia Pacific Europe, Middle East & Africa Other Unallocated Worldwide

Americas Asia Pacific Europe, Middle East & Africa Worldwide

Net sales (millions) $ 13,268 $ 7,068 $ 4,274 $ 24,610

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Organic sales (0.2) (12.4) (1.3) (4.3)

0.5 — 0.1 0.3

Divestitures (1.3) (1.0) (1.3) (1.2)

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• For 2024, in the Americas geographic area, U.S.

total sales were flat which included flat organic sales.

Total sales in Mexico increased 12 percent which included increased organic sales of 10 percent.

In Canada, total sales decreased 9 percent which included decreased organic sales of 5 percent.

In Brazil, total sales increased 4 percent which included increased organic sales of 3 percent.

In the Asia Pacific geographic area, China total sales decreased 15 percent which included decreased organic sales of 11 percent.

In Japan, total sales decreased 15 percent which included decreased organic sales of 9 percent.

total sales increased 2 percent which included flat organic sales.

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

• For 2023, in the Americas geographic area, U.S.

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

Total sales in Mexico increased 8 percent which included increased organic sales of 12 percent.

In Canada, total sales increased 9 percent which included increased organic sales of 13 percent.

In Brazil, total sales increased 15 percent which included increased organic sales of 12 percent.

In the Asia Pacific geographic area, China total sales decreased 6 percent which included decreased organic sales of 3 percent.

In Japan, total sales decreased 12 percent which included increased organic sales of 2 percent.

total sales were flat which included flat organic sales.

In the Asia Pacific geographic area, China/Hong Kong total sales decreased 17 percent which included decreased organic sales of 13 percent.

As discussed in the risk factors provided in Item 1A, the Company’s results are impacted by the effects of, and changes in, worldwide economic, political, regulatory, international trade, geopolitical, and other external conditions.

Managing currency risks:

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

3M also uses financial hedges to mitigate currency risk.

In the case of more liquid currencies, 3M hedges a portion of its aggregate exposure, using a 12, 24 or 36 month horizon, depending on the currency.

For less liquid currencies, financial hedging is frequently more expensive with more limitations on tenor.

Thus, this risk is largely managed via local operational actions using natural hedging tools as discussed above.

In either case, 3M’s hedging approach is designed to mitigate a portion of foreign currency risk and reduce volatility, ultimately allowing time for 3M’s businesses to respond to changes in the marketplace.

3M utilizes a number of tools to manage the impact of changes in foreign currency exchange rates including natural hedges such as pricing, productivity, hard currency, hard currency-indexed billings, and localizing source of supply.

3M also uses certain derivative instruments (with a tenor up to five years) and non-derivative instruments to mitigate currency risk.

As described in Note 17, these include instruments designated as cash flow hedges, net investment hedges or not designated in formal hedge relationships.

3M’s hedging approach is designed to mitigate a portion of foreign currency risk and reduce volatility, ultimately allowing time for 3M’s businesses to respond to changes in the marketplace.

Financial condition:

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

In November 2018, 3M’s Board of Directors replaced the Company’s February 2016 repurchase program with a new repurchase program.

In February 2025, 3M’s Board of Directors replaced the Company’s November 2018 repurchase program with a new repurchase program.

This new program authorizes the repurchase of up to $7.5 billion of 3M’s outstanding common stock, with no pre-established end date.

In 2023, the Company purchased $33 million of its own stock, compared to $1.5 billion of stock purchases in 2022.

As of December 31, 2023, approximately $4.2 billion remained available under the authorization.

In 2024, the Company purchased $1,801 million of its own stock, compared to $33 million of stock purchases in 2023.

In February 2024, 3M’s Board of Directors declared a first-quarter 2024 dividend of $1.51 per share.

In May 2024, 3M's Board of Directors declared a second-quarter 2024 dividend of $0.70 per share resetting 3M's dividend post-Solventum spin.

In August and November 2024, 3M's Board of Directors declared a third-quarter and fourth-quarter 2024 dividend respectively of $0.70 per share.

In February 2025, 3M's Board of Directors declared a first-quarter 2025 dividend of $0.73 per share, an increase of 4 percent.

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Refer to the section entitled Raw materials in Item 1 for discussion of 3M's sources and availability of raw materials in 2024.

Pension and postretirement defined benefit/contribution plans:

Pension and postretirement defined benefit pla ns:

On a worldwide basis, 3M’s pension and postretirement plans were 95 percent funded at year-end 2024.

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The primary U.S.

qualified pension plan year-end 2023 discount rate was 4.98%, down 20 basis points from the year-end 2022 discount rate of 5.18%.

The decrease in U.S.

discount rates resulted in a increased valuation of the projected benefit obligation (PBO).

qualified pension plan year-end 2024 discount rate was 5.65% , an increase of 67 basis points from the year-end 2023 discount rate of 4.98% .

The increase in U.S.

discount rates resulted in a decreased valuation of the projected benefit obligation (PBO).

The primary U.S.

qualified pension plan’s funded status decreased to 94% as of December 31, 2023 due to the higher PBO resulting from the discount rate decrease and the mortality table update discussed in Note 14, partially offset by the postive returns of the plan's assets.

qualified pension plan’s funded status remained at 94% as of December 31, 2024.

Additional detail and discussion of international plan asset returns and discount rates is provided in Note 15 (Pension and Postretirement Benefit Plans).

3M expects to contribute approximately $100 million to $200 million of cash to its global defined benefit pension and postretirement plans in 2024.

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

plans in 2024.

3M expects global defined benefit pension and postretirement expense in 2024 to increase by approximately $75 million pre-tax when compared to 2023.

In 2025, the Company expects to contribute an amount in the range of $100 million to $200 million of cash to its U.S.

and international retirement plans.

Refer to “Critical Accounting Estimates” within MD&A and Note 15 (Pension and Postretirement Benefit Plans) for additional information concerning 3M’s pension and post-retirement plans.

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Operating Expenses:

(Percent of net sales) 2023 2022 Change

(Percent of net sales) 2024 2023 2022 2024 vs 2023 Change

2023 vs 2022 Change

Cost of sales 58.8 % 60.9 % 60.6 % (2.1) % 0.3 %

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Operating income (loss) margin 19.6 % (43.4) % 16.7 % 63.0 % (60.1) %

The Company continues to make investments in the implementation of new business systems and solutions, including enterprise resource planning, with these investments impacting cost of sales, SG&A, and R&D.

Cost of Sales:

Cost of sales, measured as a percent of sales, increased in 2023 when compared to 2022.

Increases were primarily due to investments in growth, productivity and sustainability;

Cost of sales, measured as a percent of sales, decreased in 2024 when compared to 2023 and increased in 2023 when compared to 2022.

Decreases in 2024 were primarily due to ongoing manufacturing productivity, procurement and logistics savings net of inflation, along with lower year-on-year restructuring charges.

Increases in 2023 were primarily due to investments in growth, productivity and sustainability;

restructuring charges, and carryover impact of higher energy cost inflation partially offset by lower year-on-year net costs for significant litigation to address certain PFAS-related matters at 3M's Zwijndrecht, Belgium site, higher selling prices, spending discipline, sourcing actions and restructuring benefits.

See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

Selling, General and Administrative Expenses:

SG&A, measured as a percent of sales, increased in 2023 when compared to 2022.

SG&A in 2023 was primarily impacted by pre-tax charges of $10.3 billion and $4.2 billion in the second and third quarters related to the PWS Settlement and the CAE Settlement, respectively (both discussed in Note 18).

SG&A was also impacted by restructuring charges (see Note 5), divestiture costs (related to separating and preparing the Health Care business for spin-off) and continued investment in key growth initiatives.

These impacts were partially offset by 2022 net costs for significant litigation to address Combat Arms Earplugs litigation matters (for which a pre-tax charge of approximately $1.2 billion was reflected in 2022, discussed in Note 18), certain impairment costs related to exiting PFAS manufacturing (see Note 17), costs related to exiting Russia (see Note 17), divestiture-related restructuring charges (see Note 5), restructuring benefits and ongoing general 3M cost management.

SG&A, measured as a percent of sales, decreased in 2024 when compared to 2023 and increased in 2023 when compared to 2022.

Decreases in 2024 were primarily impacted by a $10.3 billion pre-tax charge related to the PWS Settlement and the $4.2 billion pre-tax charge related to the CAE Settlement in the second and third quarters of 2023 respectively (both discussed in Note 19).

SG&A in 2024 was also impacted by lower year-on-year restructuring charges.

SG&A in 2023 was also impacted by restructuring charges (see Note 6), and continued investment in key growth initiatives.

These impacts were partially offset by 2022 net costs for significant litigation to address Combat Arms Earplugs litigation matters (for which a pre-tax charge of approximately $1.2 billion was reflected in 2022, discussed in Note 19), certain impairment costs related to exiting PFAS manufacturing, costs related to exiting Russia, divestiture-related restructuring charges (see Note 6), restructuring benefits and ongoing general 3M cost management.

See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

Research, Development and Related Expenses:

R&D, measured as a percent of sales, increased in 2023 when compared to 2022.

R&D, measured as a percent of sales, decreased in 2024 when compared to 2023 and increased in 2023 when compared to 2022.

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

R&D was also impacted by restructuring charges.

See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

Gain on Business Divestitures:

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As a result of 3M's commitment to exit per- and polyfluoroalkyl substance (PFAS) manufacturing, 3M recorded a goodwill impairment charge related to the Advanced Materials reporting unit (within the Transportation and Electronics business) in 2022.

Refer to Note 17 for further details.

Other Expense (Income), Net:

See Note 7 for a detailed breakout of this line item.

Interest expense (net of interest income) increased in 2023 compared to 2022 driven by the addition of imputed interest associated with the obligations resulting from the PWS Settlement and the CAE Settlement (discussed in Note 18).

The non-service pension and postretirement net benefit decreased $119 million in 2023.

The lower year-on-year benefit in 2023 was primarily due to higher interest costs due to higher discount rates as of the year-end 2022, partially offset by a reduction in actuarial loss amortization, which was driven by the lower discount rates.

Refer to Note 14 for additional details.

Interest expense (net of interest income) increased year-on-year for both 2024 and 2023 primarily driven by the addition of imputed interest associated with the obligations resulting from the PWS Settlement and the CAE Settlement in the second and third quarters of 2023, respectively (discussed in Note 19), partially offset by additional interest income.

The non-service pension and postretirement net benefit decreased $0.9 billion and $0.1 billion in 2024 and 2023, respectively.

The lower year-on-year benefit in 2024 was largely due to the $0.8 billion 2024 pension settlement charge as a result of transferring a portion of U.S.

pension payment obligations and related plan assets to an insurance company.

See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

Solventum ownership - change in value resulted in a year-on-year benefit of $1.6 billion in 2024 following Solventum's separation from 3M in April 2024 (discussed in Note 2).

Provision (benefit) for Income Taxes:

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The primary noncontrolling interest relates to 3M India Limited, of which 3M’s effective ownership is 75 percent.

Certain Expenses Impacting Multiple Line Items within Results of Operations:

Stock compensation expense is discussed in Note 21 and impacts cost of sales, SG&A, and R&D.

As noted therein, higher stock-based compensation expense is recognized in the quarter in which 3M’s annual stock option and restricted stock unit grant is made because of accounting rules for grants to employees that are retiree-eligible.

Typically, the annual grant is made in the first quarter.

However, due to the spin-off of Solventum (see Note 2), the 2024 annual grant was made in May, after the April 1, 2024 separation.

Pre-tax defined benefit pension and postretirement service cost expense for continuing operations impacts cost of sales, SG&A, and R&D while the non-service cost component of pension and postretirement benefits for continuing operations impacts the other expense (income), net line item.

As discussed in Note 15, in 2024 for continuing operations, the Company recognized pre-tax defined benefit pension and postretirement benefit service cost expense of $194 million and non-service pension and postretirement net benefit costs (including settlements, curtailments, special termination benefits and other) of $828 million for a total pre-tax continuing operations defined benefit pension and postretirement expense of $1,022 million.

These 2024 amounts include the impacts of remeasurements of pension and postretirement pension plans during the year and $0.8 billion pension settlement charge associated the pension risk transfer special item (all discussed in Note 15).

For 2023 on a comparable continuing operations basis, the Company recognized pre-tax defined benefit pension and postretirement service cost expense of $222 million and a benefit of $109 million related to non-service pension and postretirement net benefit costs (including settlements, curtailments, special termination benefits and other) for a total pre-tax continuing operations defined benefit pension and postretirement expense of $113 million.

Performance by Business Segment

Item 1, Business Segments, provides an overview of 3M’s business segments.

The section entitled Business Segments in Item 1 provides an overview of 3M’s business segments.

In addition, disclosures relating to 3M’s business segments are provided in Note 22.

Effective in the first quarter of 2023, the measure of segment operating performance and segment composition used by 3M’s chief operating decision maker (CODM) changed and, as a result, 3M’s disclosed measure of segment profit/loss (business segment operating income (loss)) was updated for all comparative periods presented.

The change to business segment operating income (loss) aligns with the update to how the CODM assesses performance and allocates resources for the Company’s business segments (see Note 21 for additional details).

Information provided herein reflects the impact of these changes for all periods presented.

3M manages its operations in four business segments.

As discussed in Note 22, 3M made changes to the composition of segment information reviewed by 3M's chief operating decision maker (CODM) effective in the second quarter of 2024 largely as a result of the separation of Solventum and changes within its business segments effective in the first quarter of 2024.

Information provided herein reflects the impact of these changes for all applicable periods presented.

3M manages its continuing operations in three business segments.

The reportable segments are Safety and Industrial;

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and Consumer.

Corporate and Unallocated:

In addition to these four business segments, 3M assigns certain costs to “Corporate and Unallocated,” which is presented separately in the preceding business segments table and in Note 21.

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

Corporate special items include net costs for significant litigation impacting operating income (loss) associated with PFAS-related other environmental and Combat Arms Earplugs matters.

In addition, during the voluntary chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023—see Note 18) costs associated with the Aearo portion of respirator mask/asbestos matters were also included in corporate special items.

Prior to the bankruptcy, costs associated with Combat Arms Earplugs matters were not included in the Corporate net costs for significant litigation special item, instead being reflected in the Safety and Industrial business segment.

Corporate special items also include divestiture costs, gain/loss on business divestitures (see Note 3), divestiture-related restructuring costs (see Note 5), and Russia exit costs/benefits (see Note 17).

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

Other corporate expense-net includes items such as net costs related to limited unallocated corporate staff and centrally managed material resource centers of expertise costs, corporate philanthropic activity, gains/losses from sales of property, plant and equipment and other assets, and other net costs that 3M may choose not to allocate directly to its business segments.

Other corporate expense-net also includes costs and income from transition supply, manufacturing and service arrangements with divested businesses.

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

Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

Corporate and Unallocated operating expenses increased in 2023, when compared to the same period last year.

The subsections below provide additional information.

Corporate Special Items:

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section for additional details on the impact of special items and to Note 21 for additional information on the components of corporate special items.

Corporate special item net costs increased year-over-year primarily due to increased net costs for significant litigation as a result of pre-tax charges of $10.3 billion and $4.2 billion in the second and third quarters of 2023 related to the PWS Settlement and the CAE Settlement, respectively (both discussed in Note 18), and divestiture costs.

Other Corporate Expense - Net:

Other corporate operating expenses, net, increased in 2023 primarily due to higher pre-tax restructuring charges (see Note 5).

Operating Business Segments:

Information related to 3M’s business segments is presented in the tables that follow with additional context in the corresponding narrative below the tables.

Safety and Industrial Business (44.6% of consolidated sales):

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For Safety and Industrial these adjustments include net costs related to respirator mask/asbestos (Aearo-related and non-Aearo related).

During the voluntary Aearo chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023 —see Note 18), net costs related to Aearo-respirator mask/asbestos matters were reflected as corporate special items in Corporate and Unallocated while those associated with non-Aearo respirator mask/asbestos matters continued to be reflected as special items in the Safety and Industrial business segment.

During the voluntary Aearo chapter 11 bankruptcy period (which began in July 2022 and ended in June 2023), net costs related to Aearo-respirator mask/asbestos matters were reflected as corporate special items in Corporate and Unallocated while those associated with non-Aearo respirator mask/asbestos matters continued to be reflected as special items in the Safety and Industrial business segment.

Prior to the bankruptcy, costs associated with Combat Arms Earplugs matters were reflected in the Safety and Industrial business segment (rather than reflected in Corporate and Unallocated—see Note 22 for additional information).

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Year 2024 results:

Sales in Safety and Industrial were flat in U.S.

On an organic sales basis:

• Sales increased in roofing granules, industrial adhesives and tapes and in electrical markets, were flat in automotive aftermarket and personal safety, and decreased in industrial specialties and abrasives.

• Industrial end market demand was mixed as end user and channel remain cautious, including weaker EMEA industrial and manufacturing environment.

Growth primarily driven by strength in bonding solutions for electronic devices, cable accessories, auto body repair and roofing granules driven by replacement demand for residential roofs.

Business segment operating income margins increased year-on-year primarily driven by benefits from growth, productivity and spending discipline partially offset by translation, growth investments and dis-synergies due to the spin of Solventum.

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

Year 2023 results:

Sales in Safety and Industrial were down 5.6 percent in U.S.

On an organic sales basis:

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

• Sales increased in roofing granules and automotive aftermarket;

decreased in personal safety, industrial specialties, industrial adhesives and tapes, abrasives and electrical markets.

• Growth was held back by the disposable respirator sales decline within personal safety along with the exit of Russia (which, together, negatively impacted year-on-year organic growth by 5.2 percentage points);

declines within industrial adhesives and tapes due to consumer electronics softness, closure and masking systems was down as consumers pulled back on discretionary spending impacting e-commerce shipments (slowing down in packaging and shipping activity).

declines within industrial adhesives and tapes due to consumer electronics softness, industrial specialties was down as consumers pulled back on discretionary spending impacting e-commerce shipments (slowing down in packaging and shipping activity).

Business segment operating income margins increased year-on-year primarily due to lower special item costs for significant litigation.

2022 was impacted by a pre-tax charge of approximately $1.2 billion related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 18).

2022 was impacted by a pre-tax charge of approximately $1.2 billion related to steps toward resolving Combat Arms Earplugs litigation.

Margins were also impacted by aggressive spending discipline, benefits from restructuring, pricing and productivity actions offset by the lower sales volume, higher restructuring costs, inflation impacts, investments in the business and China-related challenges.

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

Year 2022 results:

Sales in Safety and Industrial were down 3.2 percent in U.S.

On an organic sales basis:

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

• Growth from continued improving general industrial manufacturing activity and other end-market demand was partially offset by the disposable respirator sales decline within personal safety, which negatively impacted year-on-year organic growth by 4.5 percentage points.

Business segment operating income margins decreased year-on-year due to special item costs for significant litigation primarily related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 18) resulting in a 2022 pre-tax charge of approximately $1.2 billion.

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

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

Adjusting for special item costs for significant litigation (non-GAAP measure), business segment operating income margins were consistent year-on-year.

Transportation and Electronics Business (34.1% of consolidated sales):

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Sales in Transportation and Electronics were down 1.4 percent in U.S.

Adjusting for special item PFAS manufactured products (non-GAAP measure), sales were up 3.1 percent in U.S.

On an organic sales basis:

• Sales increased in electronics, were flat in commercial branding and transportation, and decreased in advanced materials, and in automotive and aerospace.

• Growth was negatively impacted by headwinds related to PFAS manufactured products and automotive OEM build rates, partially offset by new product launches and spec-wins that drove share gain.

Acquisitions/divestitures:

• Divestiture and acquisition impacts relate to lost/gained Transportation and Electronics sales year-on-year from the Aearo Entities.

In the third quarter of 2022, 3M deconsolidated the Aearo Entities and, in the second quarter of 2023, reconsolidated those entities.

For each of the 12-months post-deconsolidation and post-reconsolidation, impacts are each reflected separately as divestiture and acquisition, respectively.

Business segment operating income margins increased year-on-year driven by benefits from non-PFAS manufacturing growth and productivity, spending discipline, and restructuring partially offset by dis-synergies due to the spin of Solventum.

Margins were also impacted by decreasing PFAS manufacturing.

Adjusting for special item PFAS manufactured products (non-GAAP measure), business segment operating income margins increased year-on-year as displayed above.

Year 2023 results:

Sales in Transportation and Electronics were down 4.5 percent in U.S.

Adjusting for special item PFAS manufactured products (non-GAAP measure), sales were down 4.5 percent in U.S.

On an organic sales basis:

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

• Sales increased in automotive and aerospace, were flat in commercial branding and transportation and decreased in electronics and advanced materials.

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

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• Divestiture and acquisition impacts relate to lost/gained Transportation and Electronics sales year-on-year from the Aearo Entities.

In the third quarter of 2022, 3M deconsolidated the Aearo Entities and, in the second quarter of 2023, reconsolidated those entities (discussed in Note 18).

In the third quarter of 2022, 3M deconsolidated the Aearo Entities and, in the second quarter of 2023, reconsolidated those entities.

For each of the 12-months post-deconsolidation and post-reconsolidation, impacts are each reflected separately as divestiture and acquisition, respectively.

Business segment operating income margins increased year-on-year due to lower operating losses on PFAS manufactured products.

In 2022, PFAS manufacturing products results included a $0.8 billion asset impairment charge (discussed in Note 17).

In 2022, PFAS manufacturing products results included an $0.8 billion asset impairment charge.

Margins were also impacted by lower sales volumes, inflation impacts, investments in the business, higher restructuring costs, manufacturing and supply chain headwinds and China-related challenges partially offset by benefits from aggressive spending discipline, pricing and productivity actions.

Adjusting for special item PFAS manufactured products (non-GAAP measure), business segment operating income margins decreased year-on-year as displayed above.

Year 2022 results:

Sales in Transportation and Electronics were down 3.9 percent in U.S.

On an organic sales basis:

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

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

Divestitures:

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

Business segment operating income margins decreased year-on-year due to a 2022 asset impairment charge of $0.8 billion as a result of 3M's announced exit from PFAS manufacturing (discussed in Note 17).

Margins were also impacted by increased raw materials and logistics costs, manufacturing productivity headwinds which were further magnified by the shutdown of certain operations in Belgium and investments in auto electrification, partially offset by selling price actions, strong spending discipline and restructuring actions.

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

Health Care Business (25.1% of consolidated sales):

Sales (millions) $ 8,195 $ 8,427

Sales change analysis:

Organic sales 0.7 % 3.2 %

Divestitures (3.1) (1.4)

Translation (0.4) (3.8)

Total sales change (2.8) % (2.0) %

Business segment operating income (millions) $ 1,603 $ 1,799

Percent change (10.9) % (11.5) %

Percent of sales 19.6 % 21.4 %

Year 2023 results:

Sales in Health Care were down 2.8 percent in U.S.

On an organic sales basis:

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

• Growth was held back by declines in separation and purification due to the normalization of post-COVID-related biopharma demand, declines in health information systems from tighter hospital budgets along with overall headwinds from the exit of Russia.

Divestitures:

• Divestiture impact relates to the lost sales year-on-year from the third quarter 2023 sale of the dental local anesthetic business and the third quarter 2022 split-off of the Food Safety business.

Business segment operating income margins decreased year-on-year due to manufacturing and supply chain headwinds, inflation impacts, investments in the business, restructuring costs, and added costs of building out the team ahead of the spin (referenced below) partially offset by benefits from aggressive spending discipline, pricing, productivity actions, and restructuring.

As discussed in Note 3, in the third quarter of 2022, 3M announced its intention to spin off the Health Care business as a separate public company.

3M expects to initially retain a 19.9% ownership position in the Health Care business.

Year 2022 results:

Sales in Health Care were down 2.0 percent in U.S.

On an organic sales basis:

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

• Growth was impacted by COVID-related trends on elective procedure volumes and ongoing inflationary pressures.

Divestitures:

• Divestiture impact relates to the lost sales year-on-year from the divestiture from the Food Safety Division split-off transaction and combination with Neogen completed in the third quarter of 2022.

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

Adjusting for special item PFAS manufacturing exit costs (non-GAAP measure), business segment operating income margins decreased year-on-year.

Consumer Business (20.1% of consolidated sales):

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On an organic sales basis:

• Sales decreased in home improvement, stationery and office, and home health and auto care.

• Growth was negatively impacted as consumers have shifted their spending patterns to more non-discretionary items.

Business segment operating income margins decreased year-on-year from lower sales volumes, inflation impacts, investments, manufacturing and supply chain headwinds, and higher restructuring costs partially offset by benefits from aggressive spending discipline, pricing, productivity actions and restructuring.

• Sales increased in home improvement, and decreased in home and auto care, packaging and expression and consumer safety and well-being.

• Growth was negatively impacted by softness in consumer discretionary spending along with product portfolio and geographic prioritization.

Business segment operating income margins increased year-on-year driven by benefits from productivity actions, portfolio initiatives, and spending discipline partially offset by organic decline and dis-synergies due to the spin of Solventum.

Year 2023 results:

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On an organic sales basis:

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

• Growth was impacted by softening trends in the Consumer retail business as consumers pulled back on discretionary spending and retailers took actions to reduce their inventories.

These impacts were partially offset by demand for Scotch Blue TM painter’s tape, Scotch-Brite TM , and Post-it ® -solutions.

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

• Sales decreased in consumer safety and well-being, packaging and expression, home improvement and in home and auto care.

• Growth was negatively impacted as consumers have shifted their spending patterns to more non-discretionary items.

Corporate and Unallocated and Other:

Outside of 3M's reportable operating segments, 3M has Corporate and Unallocated and Other which are not reportable business segments as they do not meet the segment reporting criteria.

Because Corporate and Unallocated and Other include a variety of miscellaneous items, they are subject to fluctuation on a quarterly and annual basis.

Corporate and Unallocated and Other are presented separately in the preceding business segments table and in Note 22.

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

◦ Corporate special items include net costs for significant litigation impacting operating income (loss) associated with PFAS-related other environmental and Combat Arms Earplugs matters.

Corporate special items for the periods presented also include divestiture costs, gain on business divestitures, divestiture-related restructuring actions and Russia exit charges/benefits.

Divestiture costs include costs that were not eligible to be part of discontinued operations related to separating and divesting substantially an entire business segment of 3M following public announcement of its intended divestiture.

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

Corporate special item net costs decreased year-over-year in 2024, primarily due to lower net costs for significant litigation associated with Corporate and Unallocated.

Corporate special item net costs increased year-over-year in 2023, primarily due to increased net costs for significant litigation as a result of pre-tax charges of $10.3 billion and $4.2 billion in the second and third quarters of 2023 related to the PWS Settlement and the CAE Settlement, respectively (both discussed in Note 19), and lower gains on business divestitures.

◦ Other corporate expense-net includes certain enterprise and governance activities resulting in unallocated corporate costs and other activity and net costs that 3M may choose not to allocate directly to its business segments.

Other corporate expense-net also includes costs previously allocated to Solventum prior to the Separation that were not eligible to be part of discontinued operations, commercial activity with Solventum post-Separation, and certain operations of the former Health Care business segment retained by 3M.

▪ Other corporate operating expenses, net, decreased year-over-year in 2024 primarily due to the extent of non-discontinued operations-eligible former Solventum-allocated costs included in Corporate and Unallocated prior to Solventum's April 2024 Separation.

Other corporate operating expenses, net, increased year-over-year in 2023 primarily due to higher restructuring charges (see Note 6).

◦ This category principally reflects activity associated with:

▪ Operations of businesses of the former Health Care segment divested prior to the Separation and therefore not reflected as discontinued operations within 3M's financial statements, along with limited-duration supply agreements with those previous divestitures.

▪ Transition arrangement agreements (e.g.

fees charged by 3M, net of underlying costs) related to divested businesses, including those related to the Separation, as well as other applicable divestitures.

◦ Operating income categorized as "Other" decreased year-over-year in 2024 primarily due to the extent of transition arrangement income from divested businesses (and associated costs) largely related to Solventum, which separated in April 2024.

Operating income categorized as "Other" decreased year-over-year in 2023 as a result of divestiture of the Food Safety Division and dental local anesthetic businesses (both formerly part of the "Other" category) and the extent of transition arrangement income from divested businesses other than Solventum.

Performance by Geographic Area

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Geographic Area Supplemental Information

Employees as of December 31, Capital Spending

for years ended December 31,

Property, Plant and Equipment - net as of December 31,

Employees as of December 31, Capital Spending - Continuing Operations

for years ended December 31, Property, Plant and Equipment -net - Continuing Operations as of December 31,

(Millions, except Employees) 2024 2023 2024 2023 2022 2024 2023

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The above table includes the impact of acquisitions, net of divestitures, and other actions.

Capital Spending/Net Property, Plant and Equipment:

Further, the 2023 employment amount includes the former Solventum health care business, the Separation of which was not completed until April 2024 and which at that time comprised approximately 17,000 employees.

Capital Spending/Property, Plant and Equipment - Net:

Amounts relative to these items in the above table relate to 3M's continuing operations and do not include amounts associated with discontinued operations (refer to Note 2 for the amount attributed to discontinued operations).

Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product demand and increasing manufacturing efficiency.

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The defined benefit pension and postretirement obligation represents the present value of the benefits that employees are entitled to in the future for services already rendered as of the measurement date.

The Company measures the present value of these future benefits by projecting benefit payment cash flows for each future period and discounting these cash flows back to the December 31 measurement date, using the yields of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits.

The annual measurement date is December 31.

The Company measures the present value of these future benefits by projecting benefit payment cash flows for each future period and discounting these cash flows back to the measurement date, using the yields of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits.

Service cost and interest cost are measured separately using the spot yield curve approach applied to each corresponding obligation.

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Using this methodology, the Company determined discount rates for its plans as follow:

Qualified Pension International Pension (weighted average) U.S.

Postretirement Medical

Weighted Average U.S.

Pension International Pension Postretirement Benefits

December 31, 2024 Liability:

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For the primary U.S.

qualified pension plan, the expected long-term rate of return on an annualized basis for 2024 is 7.75%, an increase from 7.50% in 2023.

qualified pension plan, the expected long-term rate of return on an annualized basis for 2025 is 8.00%, an increase from the weighted average of 7.63% in 2024.

Return on assets assumptions for international pension and other post-retirement benefit plans are calculated on a plan-by-plan basis using plan asset allocations and expected long-term rate of return assumptions.

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Changes in asset allocation and market performance over time, among other factors, cause these estimates to be subject to uncertainty.

For the year ended December 31, 2023, the Company recognized consolidated defined benefit pre-tax pension and postretirement service cost expense of $274 million and a benefit of $129 million related to all non-service pension and postretirement net benefit costs (after settlements, curtailments, special termination benefits and other) for a total consolidated defined benefit pre-tax pension and postretirement expense of $145 million, down from $178 million in 2022.

In 2024, defined benefit pension and postretirement service cost expense is anticipated to total approximately $250 million while non-service pension and postretirement net benefit costs is anticipated to be a benefit of approximately $30 million, for a total consolidated defined benefit pre-tax pension and postretirement expense of approximately $220 million, an increase of approximately $75 million compared to 2023.

In 2024 for continuing operations, the Company recognized pre-tax defined benefit pension and postretirement benefit service cost expense of $194 million and non-service pension and postretirement net benefit costs (including settlements, curtailments, special termination benefits and other) of $828 million for a total pre-tax continuing operations defined benefit pension and postretirement expense of $1,022 million, up from $113 million in 2023.

The 2024 amounts include the impacts of remeasurements of pension and postretirement pension plans during the year and $0.8 billion pension settlement charge associated the pension risk transfer special item (all discussed in Note 15).

Assessments of Goodwill:

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Based on the annual test in the fourth quarter of 2024 completed as of October 1, 2024, no goodwill impairment was indicated for any of the reporting units.

As of October 1, 2023, 3M had 20 primary reporting units, with ten reporting units accounting for approximately 95 percent of the goodwill.

These ten reporting units were comprised of the following divisions:

Abrasives, Display Materials and Systems, Electronics Materials Solutions, Health Information Systems, Industrial Adhesives and Tapes, Medical Solutions, Oral Care, Personal Safety, Separation and Purification Sciences, and Transportation Safety.

As of October 1, 2024, 3M had 16 primary reporting units, with five reporting units accounting for approximately 85 percent of the goodwill.

These five reporting units were comprised of the following divisions:

Commercial Branding and Transportation, Display Materials and Systems, Electronics Materials Solutions, Industrial Adhesives and Tapes, and Personal Safety.

3M is a highly integrated enterprise, where businesses share technology and leverage common fundamental strengths and capabilities, thus many of 3M’s businesses could not easily be sold on a stand-alone basis.

3M’s focus on research and development has resulted in a portion of 3M’s value being comprised of internally developed businesses.

As a result of 3M's December 2022 announced commitment to a plan to exit per- and polyfluoroalkyl substance (PFAS) manufacturing as described in Notes 4 and 17, 3M tested the Advanced Materials and Electronics Materials Solutions reporting units (within the Transportation and Electronics business) for impairment resulting in a goodwill impairment charge related to the Advanced Materials reporting unit.

3M will continue to monitor its reporting units and asset groups in 2025 for any triggering events or other indicators of impairment.

Assessments of Long-Lived Assets:

The Company makes certain estimates and judgments in impairment assessments of long-lived assets.

As discussed in Note 1, long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable.

An impairment loss is recognized when the carrying amount exceeds the estimated undiscounted future cash flows expected to result from the use of the asset group and its eventual disposition.

The amount of the impairment is based on the excess of the asset group’s carrying value over its fair value.

As discussed in Notes 4 and 17, in December 2022, as a result of 3M's commitment to a plan to exit per- and polyfluoroalkyl substance (PFAS) manufacturing, 3M recorded a charge related to impairment of long-lived assets.

Underlying fair values were determined primarily using discounted cash flow models.

Key assumptions included projected sales, EBITDA margins, capital expenditures, and discount rates.

Changes in underlying market and overall economic conditions, including changes in competitive conditions and customer preferences;

operational execution of activities associated with these asset groupings;

and items mentioned in Item 1A—Risk Factors with respect to 3M’s exit of PFAS manufacturing, among other factors, make these estimates subject to uncertainty.

Uncertainty in Income Tax Positions:

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operations, access to capital markets and repatriation of the earnings of its foreign affiliates that are not considered to be permanently reinvested.

For those international earnings still considered to be reinvested indefinitely, the Company currently has no plans or intentions to repatriate these funds for U.S.

For those international earnings considered to be reinvested indefinitely, the Company currently has no plans or intentions to repatriate these funds for U.S.

See Note 11 for further information on earnings considered to be reinvested indefinitely.

As of December 31, 2024, 3M owned 19.9% of Solventum Corporation common stock which ownership interest's fair value was $2.3 billion.

As previously disclosed, 3M intends to divest its ownership in Solventum within five years from its April 2024 spin-off.

3M maintains a strong liquidity profile.

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3M’s commercial paper program permits the Company to have a maximum of $5 billion outstanding with a maximum maturity of 397 days from date of issuance.

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

The Company had no commercial paper outstanding at December 31, 2024, compared to $1.8 billion commercial paper outstanding as of December 31, 2023.

The strength of 3M’s credit profile and significant ongoing cash flows provide 3M proven access to capital markets.

Additionally, the Company’s debt maturity profile is staggered to help ensure refinancing needs in any given year are reasonable in proportion to the total portfolio.

As of the date of this report, 3M has a credit rating of A3, negative outlook from Moody's Investors Service, a credit rating of BBB+, CreditWatch negative from S&P Global Ratings, and a credit rating of A-, stable outlook from Fitch.

The Company’s total debt at December 31, 2023 was consistent when compared to December 31, 2022 as maturities of $1.8 billion of fixed-rate notes were offset by issuances of commercial paper of $1.8 billion.

Additionally, the Company’s debt maturity profile is staggered to help ensure refinancing needs in any given year are reasonable in proportion to the total portfolio , including scheduled maturities in the next 12 months as referenced in Note 14.

As of the date of this report, 3M has a credit rating of A3, stable outlook from Moody's Investors Service, a credit rating of BBB+, negative outlook from S&P Global Ratings, and a credit rating of A-, stable outlook from Fitch.

The Company’s total debt associated with continuing operations at December 31, 2024 decreased when compared to December 31, 2023 as a result of $2.9 billion in debt maturities, consisting of $1.1 billion of medium-term notes and $1.8 billion repayment of commercial paper borrowings.

Amounts borrowed by Solventum during the first quarter of 2024 were a liability associated with discontinued operations and, as transferred obligations, became the sole responsibility of Solventum after the April 1, 2024 Separation, as discussed in Note 14.

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

In July 2017, the United Kingdom’s Financial Conduct Authority announced that it would no longer require banks to submit rates for the London InterBank Offered Rate (“LIBOR”) after 2021.

In November 2020, the ICE Benchmark Administration (IBA), LIBOR’s administrator, proposed extending the publication of USD LIBOR through June 2023.

Subsequently, in March of 2021, IBA ceased publication of certain LIBOR rates after December 31, 2021.

Certain USD LIBOR rates subject to a synthetic methodology will continue to be published until September 2024.

The Company's material debt securities, bank facilities, and derivative instruments that previously utilized LIBOR as the reference rate have transitioned to the Secured Overnight Financing Rate, or SOFR, as a reference rate as necessary.

Effective February 8, 2023, the Company updated its “well-known seasoned issuer” (WKSI) shelf registration statement, which registers an indeterminate amount of debt or equity securities for future issuance and sale.

This replaced 3M’s previous shelf registration dated February 10, 2020.

In May 2016, 3M entered into an amended and restated distribution agreement relating to the future issuance and sale (from time to time) of the Company’s medium-term notes program (Series F), up to the aggregate principal amount of $18 billion, which was an increase from the previous aggregate principal amount up to $9 billion of the same Series.

As of December 31, 2023, the total amount of debt issued as part of the medium-term notes program (Series F), inclusive of debt issued in February 2019 and prior years is approximately $17.6 billion (utilizing the foreign exchange rates applicable at the time of issuance for the euro denominated debt).

Effective February 8, 2023, the Company renewed its “well-known seasoned issuer” (WKSI) shelf registration statement, which registers an indeterminate amount of debt or equity securities for future issuance and sale.

3M also has a medium-term notes program (Series F) program, originally established in 2016, up to an aggregate principal amount of $18 billion.

As of December 31, 2024, the total amount of debt issued under the (Series F) program is approximately $17.6 billion (utilizing the foreign exchange rates applicable at the time of issuance for the euro denominated debt).

The Company has not issued any debt under the (Series F) program since February 2019 and does not intend to issue any additional debt under this program in the future.

Information with respect to long-term debt issuances and maturities for the periods presented is included in Note 14.

In May 2023, 3M entered into a $4.25 billion five-year revolving credit facility expiring in 2028;

the facility was amended in July and September 2023.

3M has a $4.25 billion five-year revolving credit facility that expires in May 2028.

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 December 31, 2024.

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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 December 31, 2023, this ratio was approximately 15 to 1.

At December 31, 2024, 3M was in compliance with this requirement.

Debt covenants do not restrict the payment of dividends.

The Company also had $355 million in stand-alone letters of credit and bank guarantees issued and outstanding at December 31, 2023.

The Company also had $0.5 billion in stand-alone letters of credit, bank guarantees, and other similar instruments issued and outstanding at December 31, 2024.

These instruments are utilized in connection with normal business activities.

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At December 31, 2024, 3M had $7.7 billion of cash, cash equivalents and marketable securities, of which approximately $3.5 billion was held by the Company’s foreign subsidiaries and approximately $4.2 billion was held in the United States.

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

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

At December 31, 2023, 3M had $5.8 billion of cash, cash equivalents and marketable securities, of which approximately $3.1 billion was held by the Company’s foreign subsidiaries and $2.7 billion was held by the United States.

The increase from December 31, 2022 primarily resulted from cash flow from operations.

The increase from December 31, 2023 was driven by $8.4 billion in proceeds from debt (primarily related to Solventum's issuance of debt prior to the Separation as discussed in Note 14) partially offset by approximately $4.6 billion in payments associated with PFAS-related other environmental liabilities and the CAE legal settlement (both discussed in Note 19 - note also the "Material Cash Requirements from Known Contractual and Other Obligations" section further below) and debt maturities.

Net Debt (non-GAAP measure):

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GAAP and may not be computed the same as similarly titled measures used by other companies.

The Company defines net debt as total debt less the total of cash, cash equivalents and current and long-term marketable securities.

The Company defines net debt as total debt less the total of cash, cash equivalents and current and long-term marketable securities all on a continuing operations basis.

3M believes net debt is meaningful to investors as 3M considers net debt and its components to be important indicators of liquidity and financial position.

The following table provides net debt as of December 31, 2023 and December 31, 2022.

(Millions) 2023 2022 Change

The table below provides net debt as of December 31, 2024 and December 31, 2023.

(Millions) December 31, 2024 December 31, 2023 Change

Total debt $ 13,044 $ 16,035 $ (2,991)

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Working capital (non-GAAP measure):

(Millions) 2023 2022 Change

(Millions) December 31, 2024 December 31, 2023 Change

Current assets $ 15,884 $ 16,379 $ (495)

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3M believes working capital is meaningful to investors as a measure of operational efficiency and short-term financial health.

Working capital decreased $4.1 billion compared with December 31, 2022.

Balance changes in current assets increased working capital by $1.7 billion, driven largely by increases in cash and cash equivalents partially offset by decreases in inventories.

Balance changes in current liabilities decreased working capital by $5.8 billion, primarily due to increases in the current portion of obligations resulting from the PWS Settlement and the CAE Settlement (discussed in Note 18).

Working capital increased $3.5 billion compared with December 31, 2023 primarily driven by lower balances of current liabilities principally of discontinued operations, short-term borrowings and current portions of long-term debt, and current liabilities relating to the PWS settlement (discussed in Note 19).

Discussions of cash flows from operating, investing and financing activities are provided in the sections that follow.

The Consolidated Statements of Cash Flows include the results of continuing and discontinued operations and, therefore, also include cash and cash equivalents associated with Solventum through its April 2024 separation from 3M that were presented in current assets of discontinued operations in the 3M Consolidated Balance Sheet.

Cash Flows from Operating Activities:

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

In 2023, cash flows provided by operating activities increased $1,089 million compared to the same period last year, primarily driven by decreases in inventories, increasing operating cash flow by $567 million in 2023, compared to inventory increases that decreased operating cash flow by $629 million in 2022.

The 2023 pre-tax charges of $10.5 billion and $4.3 billion (inclusive of imputed interest) related to the PWS Settlement and the CAE Settlement, respectively, along with the $1.2 billion pre-tax charge in 2022 related to steps toward resolving Combat Arms Earplugs litigation (all discussed in Note 18) largely impacted the net income component, with offsets in the other-net and deferred tax elements in each of those periods.

In 2024, cash flows provided by operating activities decreased $4.9 billion compared to the same period last year, primarily driven by approximately $4.6 billion in payments associated with PFAS-related other environmental liabilities and the CAE legal settlement (both discussed in Note 19).

The 2023 pre-tax charges of $10.5 billion related to the PWS Settlement and of $4.3 billion (inclusive of imputed interest) related to the CAE Settlement largely impacted the net income component within the Consolidated Statements of Cash Flows, with offsets in the other-net and deferred tax elements.

Cash Flows from Investing Activities:

Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product demand and increasing manufacturing efficiency.

The Company expects 2024 capital spending to be approximately $1.5 billion to $1.7 billion as 3M continues to invest in growth, productivity and sustainability.

3M records capital-related government grants earned as reductions to the cost of property, plant and equipment;

and associated unpaid liabilities and grant proceeds receivable are considered non-cash changes in such balances for purposes of preparation of statement of cash flows.

Investments in property, plant and equipment (PP&E) enable growth across many diverse markets, helping to meet product demand and increasing manufacturing efficiency.

3M invested $1.2 billion on PP&E in 2024.

The Company expects 2025 capital spending to be approximately $1.1 billion as 3M continues to invest in growth, productivity and sustainability.

3M invests in renewal and maintenance programs, which pertain to cost reduction, cycle time, maintaining and renewing current capacity, eliminating pollution, and compliance.

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

Refer to Note 3 for information on acquisitions and divestitures (including the 2022 cash payment from the Food Safety business split-off).

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

Purchases of marketable securities and investments and proceeds from maturities and sale of marketable securities and investments are primarily attributable to certificates of deposit/time deposits, commercial paper, and other securities, which are classified as available-for-sale.

Refer to Note 13 for more details about 3M’s diversified marketable securities portfolio.

Purchases of investments include additional survivor benefit insurance, plus investments in equity securities.

Cash Flows from Financing Activities:

2024 Debt Activity :

Total debt was approximately $16.0 billion at December 31, 2023 and $15.9 billion at December 31, 2022.

Maturities of $1.8 billion of fixed-rate notes were offset by net issuances of commercial paper of $1.8 billion (issuance and subsequent repayments/reissuances).

The gross commercial paper issuances and repayments, in addition to repayments of the fixed-rate notes, are largely reflected in “Proceeds from debt (maturities greater than 90 days)” and "Repayment of debt (maturities greater than 90 days)".

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

Debt cash flow activity includes proceeds from Solventum's issuance of $8.4 billion in aggregate principal amount of debt in the first quarter of 2024 partially offset by $2.9 billion in debt maturities, consisting of $1.1 billion of medium-term notes and $1.8 billion repayment of commercial paper borrowings.

Gross commercial paper issuances and repayments, in addition to repayments of the fixed-rate notes, are largely reflected in “Proceeds from debt (maturities greater than 90 days)” and "Repayment of debt (maturities greater than 90 days)".

The Company had no commercial paper outstanding at December 31, 2024, compared to $1.8 billion commercial paper outstanding as of December 31, 2023.

3M’s primary short-term liquidity needs are met through cash on hand and U.S.

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2023 Debt Activity :

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

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

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

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

Debt cash flow activity included maturities of $1.8 billion of fixed-rate notes offset by net issuances of commercial paper of $1.8 billion (issuance and subsequent repayments/reissuances).

Repurchases of Common Stock :

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

In 2023, the Company purchased $33 million of its own stock.

In 2024, the Company purchased $1.8 billion of its own stock.

For more information, refer to the table titled “Issuer Purchases of Equity Securities” in Part II, Item 5.

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3M has paid dividends since 1916.

Cash dividends declared and paid totaled $1.51 per share for the first quarter of 2024;

$0.70 per share for each of the second, third, and fourth quarters of 2024;

and $1.50 per share for each quarter in 2023.

In February 2025, 3M's Board of Directors declared a first-quarter 2025 dividend of $0.73 per share, an increase of 4 percent.

Cash flows from financing activity in 2024 also include $0.6 billion of net cash transferred to Solventum associated with the close of the Separation (discussed in Note 2).

Other cash flows from financing activities may include various other items, such as cash paid associated with certain derivative instruments, distributions to or sales of noncontrolling interests, changes in overdraft balances, and principal payments for finance leases.

Free Cash Flow (non-GAAP measure):

Free cash flow and free cash flow conversion are not defined under U.S.

generally accepted accounting principles (GAAP).

Therefore, they should not be considered a substitute for income (loss) or cash flow data prepared in accordance with U.S.

GAAP and may not be comparable to similarly titled measures used by other companies.

The Company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment.

It should not be inferred that the entire free cash flow amount is available for discretionary expenditures.

The Company defines free cash flow conversion as free cash flow divided by net income (loss) attributable to 3M.

The Company believes free cash flow and free cash flow conversion are meaningful to investors as they are useful measures of performance and the Company uses these measures as an indication of the strength of the company and its ability to generate cash.

Free cash flow and free cash flow conversion vary across quarters throughout the year.

Below find a recap of free cash flow and free cash flow conversion.

Refer to the preceding Cash Flows from Operating Activities and Cash Flows from Investing Activities sections for discussion of items that impacted the operating cash flow and purchases of PP&E components of the calculation of free cash flow.

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

Year ended December 31, (Millions) 2023 2022

Major GAAP Cash Flow Categories

Net cash provided by (used in) operating activities $ 6,680 $ 5,591

Net cash provided by (used in) investing activities (1,207) (1,046)

Net cash provided by (used in) financing activities (3,147) (5,350)

Free Cash Flow (non-GAAP measure)

Net cash provided by (used in) operating activities $ 6,680 $ 5,591

Purchases of property, plant and equipment (1,615) (1,749)

Free cash flow 5,065 3,842

Net income (loss) attributable to 3M $ (6,995) $ 5,777

Free cash flow conversion N/M 66 %

Material Cash Requirements from Known Contractual and Other Obligations:

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In addition to other matters discussed therein, Note 19 references that the Company expects to pay up to $12.5 billion in the aggregate from 2023 through 2036 pursuant to the terms of the PWS Settlement and expects to pay up to $6.0 billion in the aggregate from 2023 to 2029 pursuant to the terms of the CAE Settlement.

Through December 31, 2024, 3M has paid an aggregate amount of $5.0 billion relating to these settlements.

Note 8 provides further information regarding amounts due under these settlements.

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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 7. Management’s Discussion and Analysis