What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-07-18 compared with 2025-04-22 · 281 added, 94 removed, 320 unchanged (54% of the section changed)

17 unchanged sentences

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

Financial highlights for first quarter of 2025:

• Sales of $6.0 billion, down 1.0 percent year-on-year (YoY), down 0.3 percent YoY organically 1 ;

adjusted sales of $5.8 billion, up 0.8 percent YoY, up 1.5 percent YoY organically 1

◦ Driven by strength in electrical markets, industrial adhesives and tapes, and aerospace;

softer auto, abrasives, and packaging/expression;

and YoY impact of applicable special item (manufactured PFAS products)

• Operating margin of 20.9%, up 1.8 percentage points YoY;

adjusted operating margin of 23.5%, up 2.2 percentage points YoY

◦ Reflecting benefits from growth, lower restructuring costs, productivity, transition service agreement reimbursement;

and the YoY impact of special items (primarily manufactured PFAS products), partially offset by continued growth investments in the business, timing of stock-based compensation, cost dis-synergies and foreign currency impacts.

• Earnings per diluted share (EPS) from continuing operations of $2.04, up 61 percent YoY;adjusted EPS from continuing operations of $1.88, up 10 percent YoY

◦ Driven by growth and productivity, lower restructuring costs, share buyback partially offset by higher growth investments, non-operating pension headwind;

and the YoY impact of special items (primarily the change in value of Solventum ownership).

Unless otherwise noted, any sales change analysis compares the second quarter and the first six months of 2025 with the corresponding periods in 2024, year-on-year (YoY).

Financial highlights for the second quarter and first six months of 2025:

Three months ended

June 30, 2025 Six months ended

June 30, 2025

GAAP Adjusted 1

Net sales (millions) $6,344 $6,158 $12,298 $11,938

Total sales change 1.4% 2.3% 0.2% 1.6%

Organic sales change 2

0.6% 1.5% 0.2% 1.5%

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

1 unchanged sentence

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.

2 Organic sales change (which includes both organic volume and selling price impacts), is defined as the change in net sales, absent the separate impacts from foreign currency translation and acquisitions, net of divestitures.

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

Net sales change was driven by strength in electronics, general industrial, and safety end markets partially offset by known softness in auto and auto aftermarket, while consumer remained soft.

Sales change also reflected the YoY impact of special item manufactured PFAS products.

Three months ended

June 30, 2025 Six months ended

June 30, 2025

GAAP Adjusted 1

Operating income margin 18.0 % 24.5 % 19.4 % 24.0 %

YoY change in operating income margin (2.3) ppts 2.9 ppts (0.3) ppts 2.5 ppts

GAAP operating margins were negatively affected by the YoY impact of special items (primarily an increase in net costs for significant litigation from the second quarter 2025 PFAS-related New Jersey Settlement, discussed in Note 17, and manufactured PFAS products).

Both GAAP and adjusted operating margins reflect benefits from growth, productivity (outside of special items) and lower restructuring costs, partially offset by growth investments, as well as foreign currency and gross tariff impacts.

Additionally, margins YoY were impacted by the timing and lower extent of stock-based compensation grants (see the Certain Expenses Impacting Multiple Line Items within Results of Operation discussion below), cost dis-synergies (from the ongoing exit of PFAS manufacturing and second quarter 2024 spin of Solventum), and by transition service agreement reimbursement from Solventum, which began in the second quarter of 2024.

Three months ended

June 30, 2025 Six months ended

June 30, 2025

GAAP Adjusted 1

Earning per diluted share (EPS) $1.34 $2.16 $3.38 $4.04

YoY change in EPS (38)% 12% (2)% 11%

GAAP EPS YoY was negatively affected by the net impact of special items.

This included second quarter 2024's $795 million pre-tax pension settlement charge (discussed in Note 13), an increase in net costs for significant litigation from the second quarter 2025 PFAS-related New Jersey Settlement, and the change in value of Solventum ownership.

Both GAAP and adjusted EPS reflects growth and productivity (outside of special items) and lower restructuring costs, a second quarter 2025 gain on the sale of an investment (see the Income from Unconsolidated Subsidiaries, Net of Taxes discussion below), and the impact of lower share count.

These were partially offset by higher growth investments, a non-operating interest and pension headwind (apart from pension special item), as well as foreign currency and gross tariff impacts.

Additionally, EPS YoY was impacted by the timing and lower extent of stock-based compensation grants, cost dis-synergies (from the ongoing exit of PFAS manufacturing and second quarter 2024 spin of Solventum), and by transition service agreement reimbursement from Solventum, which began in the second quarter of 2024.

Additional information regarding certain items impacting pre-2025 periods that may also be relevant in 2025 can be found in the Overview section of Part II, Item 7 as well as in further sections of 3M’s 2024 Annual Report on Form 10-K.

Results of Operations

Percent change information compares the three months ended March 31, 2025 and 2024, unless otherwise indicated.

Percent change information compares the three and six months ended June 30, 2025 and 2024, unless otherwise indicated.

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

Information regarding sales by geographic area is included below.

Three months ended March 31, 2025

Three months ended June 30, 2025

Americas Asia Pacific

4 unchanged sentences

0.6 2.3 (2.3) 0.6

Translation (0.6) 1.3 4.8 0.8

Total sales change — % 3.6 % 2.5 % 1.4 %

Six months ended June 30, 2025

Americas Asia Pacific EMEA

Net sales (millions) $ 6,689 $ 3,504 $ 2,105 $ 12,298

% of worldwide sales 54.4 % 28.5 % 17.1 % 100.0 %

Components of net sales change:

Organic sales 2

1.1 0.8 (3.7) 0.2

Divestitures 3

2 unchanged sentences

Total sales change 0.9 % 0.5 % (2.2) % 0.2 %

1 Organic sales change (which includes both organic volume and selling price impacts), is defined as the change in net sales, absent the separate impacts from foreign currency translation and acquisitions, net of divestitures.

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

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

For the first quarter of 2025, in the Americas geographic area, U.S.

total sales increased 3 percent which included increased organic sales of 1 percent.

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

Three months ended June 30, 2025 Six months ended June 30, 2025

Net sales change by particular country

Total sales change Organic sales change 2

United States

0.3 % 0.3 % 1.5 % 0.6 %

China/Hong Kong

6.0 5.8 4.6 4.7

Operating Expenses:

Three months ended

(Percent of net sales) 2025 2024 Change

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

(Percent of net sales) 2025 2024 Change 2025 2024 Change

Cost of sales 57.5 % 57.1 % 0.4 % 57.9 % 57.5 % 0.4 %

1 unchanged sentence

Research, development and related expenses (R&D) 4.5 4.5 — 4.7 4.4 0.3

Loss on business divestitures

0.1 — 0.1 — — —

Operating income margin

1 unchanged sentence

Cost of Sales measured as a percent of sales:

Increases in the first quarter of 2025 were primarily due to foreign currency impacts;

cost dis-synergies due to the spin of Solventum and PFAS exit partially offset by ongoing manufacturing productivity initiatives.

Increases in the second quarter and first six months of 2025 were primarily due to foreign currency impacts;

tariffs, and the exit of manufactured PFAS products partially, offset by ongoing procurement and logistics savings.

Additionally, cost of sales YoY for the six months ended June 30, 2025, was impacted by cost dis-synergies (from the ongoing exit of PFAS manufacturing and second quarter 2024 spin of Solventum).

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

SG&A measured as a percent of sales:

Decreases were primarily impacted by lower YoY restructuring charges, Solventum transition agreement income partially offset by timing of stock-based compensation grants.

Increases in the second quarter and decreases in the first six months of 2025 were primarily impacted by increases in net costs for significant litigation from the second quarter 2025 PFAS-related New Jersey Settlement.

These costs were partially offset by benefits from insurance recoveries in the second quarter of 2025, along with lower YoY restructuring charges.

Additionally, SG&A YoY for the three and six months ended June 30, 2025, was impacted by the timing of and extent of stock-based compensation grants, transition service agreement reimbursement, and cost dis-synergies (from the ongoing exit of PFAS manufacturing and second quarter 2024 spin of Solventum).

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

2 unchanged sentences

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

Loss on Business Divestitures measured as a percent of sales :

Applicable 2025 divestiture is discussed in Note 4.

Other Expense (Income), Net:

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

Interest expense (net of interest income) decreased in the first quarter of 2025 compared to the same period YoY driven by decreased imputed interest associated with the obligations resulting from the PWS Settlement and the CAE Settlement (discussed in Note 17).

The non-service pension and postretirement net benefit decreased approximately $39 million in the first quarter of 2025 compared to the same period YoY.

Interest expense (net of interest income):

increased in the second quarter and decreased in the first six months of 2025, compared to the same periods YoY.

• The increase in second quarter was driven by lower interest income from decreased cash balances.

This decrease in the first six months was driven by decreased imputed interest associated with the obligations resulting from the PWS Settlement and CAE Settlement partially offset by additional imputed interest from the New Jersey Settlement (all discussed in Note 17).

Non-service pension and postretirement net period cost (benefit):

decreased by approximately $773 million in the second quarter of 2025 and $734 million in the first six months of 2025, compared to the same periods YoY.

• This change was largely due to the $795 million pension settlement charge in the second quarter 2024, which occurred as a result of transferring a portion of U.S.

pension payment obligations and related plan assets to an insurance company (see Note 13).

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

Solventum ownership - change in value resulted in a YoY benefit of $0.3 billion in the first quarter of 2025.

Provision (benefit) for Income Taxes:

Three months ended

(Percent of pre-tax income/loss) 2025 2024

Solventum ownership - change in value:

decreased by approximately $1,120 million in the second quarter of 2025 and $777 million in the first six months of 2025, compared to the same periods YoY.

Provision for Income Taxes:

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

(Percent of pre-tax income) 2025 2024 2025 2024

Effective tax rate 26.6 % 14.4 % 22.1 % 18.1 %

The primary factors that decreased the Company's effective tax rate for first quarter 2025 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 and CAE Settlements (as discussed in Note 17) and implementation of Pillar Two Model Rules published by the Organization for Economic Cooperation and Development (OECD).

On an adjusted basis, the effective tax rate for the first quarter of 2025 was 20.9%, no change from the prior year.

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

Adjusted effective tax rate 1

20.8 19.1 20.9 19.9

The primary factors that increased the Company's effective tax rate for the three and six months ending June 30, 2025, when compared to 2024, were the tax effect of the change in value of 3M's retained ownership interest in Solventum and application of Pillar Two Model Rules published by the Organization for Economic Cooperation and Development (OECD).

These were partially offset by the 2024 charge related to the Company's change in assertion on earnings no longer considered permanently reinvested.

Income from Unconsolidated Subsidiaries, Net of Taxes:

Three months ended

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

(Millions) 2025 2024 2025 2024

1 unchanged sentence

Income (loss) from unconsolidated subsidiaries, net of taxes, is attributable to the Company’s accounting under the equity method for ownership interests in certain entities.

Net Income (Loss) Attributable to Noncontrolling Interest:

Three months ended

In the second quarter of 2025, 3M sold its interest in one of these investments, resulting in a pre-tax gain of $47 million.

Because this was an ownership disposition, the impact of taxes thereon was reflected separately in provision for income taxes.

Net Income Attributable to Noncontrolling Interest:

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

(Millions) 2025 2024 2025 2024

7 unchanged sentences

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

Pre-tax continuing operations stock compensation expense was $85 million and $26 million for the first quarter of 2025 and 2024, respectively.

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.

Additionally, 2025 stock compensation expense YoY was impacted by the lower extent of the 2025 annual grant.

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

Refer to Note 13 for additional information.

For the first quarter of 2025, the Company recognized pre-tax defined benefit pension and postretirement benefit service cost expense of $41 million and non-service pension and postretirement net benefit costs (including settlements, curtailments, special termination benefits and other) of $28 million for a total pre-tax continuing operations defined benefit pension and postretirement expense of $69 million.

For the first quarter of 2024 on a comparable continuing operations basis, the Company recognized pre-tax defined benefit pension and postretirement service cost expense of $52 million and a benefit of $11 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 $41 million.

On a continuing operations basis, pre-tax stock compensation expense and defined benefit pension and postretirement expense for the periods presented were the following:

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

Pre-tax amounts (millions) 2025 2024 2025 2024

Stock compensation expense $ 44 $ 154 $ 129 $ 180

Defined benefit pension and postretirement benefit expense

Service cost $ 43 $ 48 $ 84 $ 100

Non-service cost (benefit) 23 796 51 785

Total defined pension and postretirement expense $ 66 $ 844 $ 135 $ 885

In the second quarter of 2024, 3M recorded a non-cash pension settlement charge, part of non-service cost above, 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 13).

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

Performance by Business Segment

The section entitled Business Segments in Item 1 within 3M's 2024 Annual Report on Form 10-K provides an overview of 3M’s business segments including discussion of 3M products that are included in each business segment.

In addition, disclosures relating to 3M’s business segments are provided in Note 19.

Disclosures relating to 3M’s business segments are provided in Note 19.

3M manages its continuing operations in three business segments.

3 unchanged sentences

Safety and Industrial Business:

Three months ended

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

2025 2024 2025 2024

Sales (millions) $ 2,857 $ 2,759 $ 5,602 $ 5,491

4 unchanged sentences

Business segment operating income (millions)

$ 721 $ 612 $ 1,417 $ 1,269

Percent change 18.0 % 11.7 %

Percent of sales 25.3 % 22.2 % 25.3 % 23.1 %

First quarter 2025 results:

Second quarter 2025 results:

Sales in Safety and Industrial were up 3.6 percent in U.S.

On an organic sales basis:

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

• Growth primarily came from electrical markets with strong demand for cable accessories from construction of data centers and renewable energy projects and from industrial adhesives and tapes with strength in industrial and electronic bonding solutions driven by continued share gains in structural adhesives.

Business segment operating income margins increased YoY driven by benefits from growth, lower restructuring costs, productivity partially offset by continued growth investments in the business, timing of stock-based compensation and cost dis-synergies due to the spin of Solventum.

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

• Growth primarily came from electrical markets and industrial adhesives and tapes, driven by new product innovation and commercial excellence.

Abrasives also contributed to growth through the launch of new products and the execution of a commercial strategy aimed at increasing sales effectiveness.

Automotive aftermarket continued to face challenges in a market with decreased collision repair claim rates.

Business segment operating income margins increased YoY driven by benefits from growth, productivity and lower restructuring costs.

These benefits were partially offset by continued growth investments in the business, timing and extent of stock-based compensation, and cost dis-synergies from the ongoing exit of PFAS manufacturing.

Adjusting for special item net costs for significant litigation (non-GAAP measure) related to respirator mask/asbestos, business segment operating income margins increased YoY from 22.6 percent to 25.8 percent.

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

First six months 2025 results:

Sales in Safety and Industrial were up 2.0 percent in U.S.

On an organic sales basis:

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

• Growth primarily came from strong demand trends in industrial adhesives and tapes and electrical markets.

This growth was partially offset by ongoing challenges in automotive aftermarket.

Business segment operating income margins increased year-on-year primarily driven by benefits from growth, productivity and lower restructuring costs.

These benefits were partially offset by continued growth investments in the business and cost dis-synergies due to the 2024 spin of Solventum and ongoing exit of PFAS manufacturing.

Adjusting for special item costs for significant litigation (non-GAAP measure) related to respirator mask/asbestos, business segment operating income margins increased YoY from 23.4 percent to 25.7 percent.

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

Transportation and Electronics Business :

Three months ended

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

2025 2024 2025 2024

Sales (millions) $ 2,130 $ 2,143 $ 4,120 $ 4,247

1 unchanged sentence

Organic sales 2

(1.5) % (2.8) %

Divestitures 3

Translation 1.0 (0.2)

3 unchanged sentences

Percent of sales 21.7 % 20.0 % 19.8 % 21.4 %

First quarter 2025 results:

Second quarter 2025 results:

Sales in Transportation and Electronics were down 0.6 percent in U.S.

On an organic sales basis:

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

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

• Growth was negatively impacted by headwinds related to PFAS manufactured products.

• The electronics business was negatively impacted by lower device demand, while the automotive OEM business was down reflecting continued weakness in auto builds, particularly in Europe and the U.S.

This was partially offset by growth from commercial aircraft and defense related business in aerospace and from project wins in advanced materials.

Business segment operating income margins decreased YoY due to challenging comparison against last year's strong share gains from spec-in wins and new product introductions in automotive and consumer electronics, cost dis-synergies due to the spin of Solventum and exit of PFAS manufacturing, continued growth investments in the business, timing of stock-based compensation partially offset by benefits from growth, lower restructuring costs and productivity.

Adjusting for special item PFAS manufactured products (non-GAAP measure), sales of $1,816 million were down 0.4 percent YoY in U.S.

dollars, or up 1.1 percent organically while business segment operating income margins decreased YoY from 26.3 percent to 21.5 percent.

• The automotive OEM business was down reflecting continued weakness in auto builds, particularly in Europe and the U.S..

This was partially offset by growth in commercial graphics and automotive personalization, driven by demand for premium fleet wrap new product innovation and expanding sales coverage.

Divestitures:

• Impact relates to the lost sales year-on-year from a divestiture discussed in Note 4.

Business segment operating income margins increased YoY driven by benefits from growth, productivity and lower restructuring costs.

Adjusting for special item PFAS manufactured products (non-GAAP measure), sales of $1,944 million were up 1.9 percent YoY in U.S.

dollars, or up 1.0 percent organically;

while business segment operating income margins increased YoY from 22.3 percent to 24.6 percent.

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

First six months 2025 results:

Sales in Transportation and Electronics were down 3.0 percent in U.S.

On an organic sales basis:

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

• Growth was negatively impacted by headwinds related to PFAS manufactured products.

• The electronics business was negatively impacted from declines in the automotive OEM business reflecting continued weakness in auto builds, particularly in Europe and the U.S.

This was partially offset by demand in commercial graphics and personal auto, electronics, and aerospace and defense.

Divestitures:

• Impact relates to the lost sales year-on-year from a divestiture discussed in Note 4.

Business segment operating income margins decreased YoY due to challenging comparison against last year's strong share gains from spec-in wins and new product introductions in automotive and consumer electronics, continued growth investments in the business, and cost dis-synergies due to the 2024 spin of Solventum and ongoing exit of PFAS manufacturing, partially offset by benefits from growth, productivity and lower restructuring costs.

Adjusted for special item PFAS manufacturing products (non-GAAP measure), sales of $3,760 million were up 0.8 percent YoY in U.S.

dollars, or up 1.0 percent organically;

while business segment operating income margins decreased YoY from 24.3 percent to 23.1 percent.

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

Consumer Business:

Three months ended

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

2025 2024 2025 2024

Sales (millions) $ 1,270 $ 1,263 $ 2,394 $ 2,403

6 unchanged sentences

Percent of sales 21.1 % 17.4 % 20.3 % 18.1 %

First quarter 2025 results:

Second quarter 2025 results:

Sales in Consumer were up 0.6 percent in U.S.

On an organic sales basis:

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

• Growth in home improvement supported by new product launches, service improvements, and increased investment in advertising and merchandising;

partially offset by soft consumer discretionary spending.

Business segment operating income margins increased YoY driven by benefits from growth and productivity partially offset by continued growth investments in the business, timing and extent of stock-based compensation, and cost dis-synergies from the ongoing exit of PFAS manufacturing.

First six months 2025 results:

Sales in Consumer were down 0.4 percent in U.S.

On an organic sales basis:

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

• Growth was led by consumer safety & well-being driven by demand for Filtrete™ filters and respiratory products.

• Home improvement and home and auto care were both flat with growth driven by investment and new product innovation in paint protection and Meguiar’s™ auto care partially offset by soft consumer spending, principally in Command™ and packaging and expression.

Business segment operating income margins increased YoY driven by benefits from growth, productivity, and lower restructuring costs partially offset by continued growth investments in the business, timing of stock-based compensation and cost dis-synergies due to the spin of Solventum.

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

• Growth driven by new product launches, service improvements, and increased advertising and merchandising investment;

partially offset by soft consumer discretionary spending.

Business segment operating income margins increased YoY driven by benefits from growth, productivity, and lower restructuring costs partially offset by continued growth investments in the business and cost dis-synergies due to the 2024 spin of Solventum and ongoing exit of PFAS manufacturing.

Corporate and Other:

2 unchanged sentences

Corporate and Other are further described in Note 19.

Other corporate operating expenses, net, decreased YoY in the first three months of 2025 primarily due to the extent of transition arrangement income from divested businesses (and associated costs) largely related to Solventum's April 2024 Separation as well as the extent of non-discontinued operations-eligible former Solventum-allocated costs included in Corporate and Other prior to the Separation.

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section and Note 19 for additional details on the components of corporate special items and their impact.

Refer to the Certain amounts adjusted for special items - (non-GAAP measures) section below and Note 19 for details on the components of corporate special items and their impact.

Other corporate operating income, net, decreased YoY in the second quarter of 2025, and increased YoY in the first six months of 2025, primarily due to higher unallocated corporate costs relating to certain enterprise and governance activities.

The first six months of 2024 was impacted by the extent of transition arrangement income from divested businesses (and associated costs) largely related to Solventum's April 2024 Separation as well as the extent of non-discontinued operations-eligible former Solventum-allocated costs included in Corporate and Other prior to the Separation.

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

8 unchanged sentences

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:

These measures and

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

GAAP amounts for which a measure adjusted for special items is also provided:

15 unchanged sentences

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 Other.

Loss on business divestitures:

• In June 2025, 3M completed a divestiture for immaterial proceeds slightly below the business's book value (as discussed in Note 4).

Divestiture costs:

4 unchanged sentences

Estimated income does not contemplate impacts on non-operating items such as net interest income/expense and the non-service cost components portion of defined benefit plan net periodic benefit costs.

Pension risk transfer charge:

• In the second quarter of 2024, 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 13).

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.

Three months ended March 31, 2024

Three months ended June 30, 2024

Amounts from continuing operations

18 unchanged sentences

Net costs for significant litigation — 19 221 (25) 246 0.44

Manufactured PFAS products (281) (2) (2) (1) (1) —

Divestiture costs — 14 14 (113) 127 0.23

Manufactured PFAS products (236) (2) (2) (1) (1) —

Pension risk transfer charge

— — 795 188 607 1.09

Solventum ownership - change in value

— — (1,113) — (1,113) (2.00)

Total special items (236) 31 (85) 49 (134) (0.24)

Adjusted amounts (non-GAAP measures) $ 6,019 $ 1,303 21.6 % $ 1,325 $ 252 19.1 % $ 1,070 $ 1.93

Three months ended March 31, 2025

Three months ended June 30, 2025

Amounts from continuing operations

19 unchanged sentences

Net costs for significant litigation — 347 471 46 425 0.79

Loss on business divestitures

Manufactured PFAS products (186) 17 17 4 13 0.02

2 unchanged sentences

Adjusted amounts (non-GAAP measures) $ 6,158 2.3 % $ 1,507 24.5 % $ 1,421 $ 296 20.8 % $ 1,170 $ 2.16 12 %

Three months ended March 31, 2025

Three months ended June 30, 2025

Sales Change Organic sales Acquisitions Divestitures Translation Total sales change

7 unchanged sentences

Adjusted Transportation and Electronics (non-GAAP measures) 1.0 % — % (0.1) % 1.0 % 1.9 %

Six months ended June 30, 2024

Amounts from continuing operations

(Dollars in millions, except per share amounts) Net sales Operating income

Operating income margin

Income before taxes

Provision for income taxes

Effective tax rate Net income attributable to 3M

Safety and Industrial

GAAP amounts $ 1,269 23.1 %

Adjustments for special items:

Net costs for significant litigation 18

Adjusted amounts (non-GAAP measures) $ 1,287 23.4 %

Transportation and Electronics

GAAP amounts $ 4,247 $ 909 21.4 %

Adjustments for special items:

Manufactured PFAS products (517) (4)

Adjusted amounts (non-GAAP measures) $ 3,730 $ 905 24.3 %

Total Company

GAAP amounts $ 12,271 $ 2,421 19.7 % $ 2,339 $ 423 18.1 % $ 1,909 $ 3.44

Adjustments for special items:

Net costs for significant litigation — 89 495 6 489 0.88

Divestiture costs — 20 20 (111) 131 0.24

Manufactured PFAS products (517) (4) (4) (2) (2) —

Pension risk transfer charge

— — 795 188 607 1.09

Solventum ownership - change in value

— — (1,113) — (1,113) (2.01)

Total special items (517) 105 193 81 112 0.20

Adjusted amounts (non-GAAP measures) $ 11,754 $ 2,526 21.5 % $ 2,532 $ 504 19.9 % $ 2,021 $ 3.64

Six months ended June 30, 2025

Amounts from continuing operations

(Dollars in millions, except per share amounts) Net sales Sales change Operating income

Operating income margin

Income before taxes

Provision for income taxes

Effective tax rate Net income attributable to 3M

EPS percent change

Safety and Industrial

GAAP amounts $ 1,417 25.3 %

Adjustments for special items:

Net costs for significant litigation 20

Adjusted amounts (non-GAAP measures) $ 1,437 25.7 %

Transportation and Electronics

GAAP amounts $ 4,120 (3.0) % $ 814 19.8 %

Adjustments for special items:

Manufactured PFAS products (360) 55

Adjusted amounts (non-GAAP measures) $ 3,760 0.8 % $ 869 23.1 %

Total Company

GAAP amounts $ 12,298 0.2 % $ 2,386 19.4 % $ 2,308 $ 510 22.1 % $ 1,839 $ 3.38 (2) %

Adjustments for special items:

Net costs for significant litigation — 421 695 44 651 1.20

Loss on business divestitures

Manufactured PFAS products (360) 55 55 13 42 0.08

Solventum ownership - change in value — — (336) — (336) (0.62)

Total special items (360) 479 417 58 359 0.66

Adjusted amounts (non-GAAP measures) $ 11,938 1.6 % $ 2,865 24.0 % $ 2,725 $ 568 20.9 % $ 2,198 $ 4.04 11 %

Six months ended June 30, 2025

Sales Change Organic sales Acquisitions Divestitures Translation Total sales change

Total Company 0.2 % — % 0.5 % (0.5) % 0.2 %

Remove manufactured PFAS products special item impact 1.3 — — 0.1 1.4

Adjusted total Company (non-GAAP measures) 1.5 % — % 0.5 % (0.4) % 1.6 %

Transportation and Electronics (2.8) % — % — % (0.2) % (3.0) %

Remove manufactured PFAS products special item impact 3.8 — — — 3.8

Adjusted Transportation and Electronics (non-GAAP measures) 1.0 % — % — % (0.2) % 0.8 %

Financial Condition and Liquidity

7 unchanged sentences

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

As of March 31, 2025, 3M owned 19.9% of Solventum Corporation common stock which ownership interest's fair value was $2.6 billion.

As of June 30, 2025, 3M owned 19.9% of Solventum Corporation common stock which ownership interest's fair value was $2.6 billion.

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

4 unchanged sentences

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 no commercial paper outstanding as of March 31, 2025 and December 31, 2024.

The Company had no commercial paper outstanding as of June 30, 2025 and December 31, 2024.

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

1 unchanged sentence

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+, stable outlook from S&P Global Ratings, and a credit rating of A-, stable outlook from Fitch.

The Company’s total debt at March 31, 2025 increased when compared to December 31, 2024 as a result of issuance of $1.1 billion in aggregate principal amount of debt partially offset by $750 million aggregate principal amount of debt maturities.

The Company’s total debt at June 30, 2025, increased slightly when compared to December 31, 2024, due the issuance of $1.1 billion in aggregate principal amount of debt, $0.2 billion in foreign currency remeasurement partially offset by debt maturities with an aggregate principal amount of $1.25 billion.

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

1 unchanged sentence

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 March 31, 2025, 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).

As of June 30, 2025, 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.

2 unchanged sentences

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 credit facility was undrawn at March 31, 2025.

The credit facility was undrawn at June 30, 2025.

Under the $4.25 billion credit facility, the Company is required to maintain its EBITDA to Interest Ratio as of the end of each fiscal quarter at not less than 3.0 to 1.

This is calculated (based on amounts defined in the amended agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period.

At March 31, 2025, 3M was in compliance with this requirement.

At June 30, 2025, 3M was in compliance with this requirement.

Debt covenants do not restrict the payment of dividends.

The Company also had $0.7 billion in stand-alone letters of credit, bank guarantees, and other similar instruments issued and outstanding at March 31, 2025.

The Company also had $0.6 billion in stand-alone letters of credit, bank guarantees, and other similar instruments issued and outstanding at June 30, 2025.

These instruments are utilized in connection with normal business activities.

Cash, cash equivalents and marketable securities:

At March 31, 2025, 3M had $7.0 billion of cash, cash equivalents and marketable securities, of which approximately $3.2 billion was held by the Company’s foreign subsidiaries and approximately $3.8 billion was held in the United States.

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

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 $4.2 billion was held by the United States.

The decrease from December 31, 2024 was driven by $0.7 billion in payments associated with the CAE legal settlement (discussed in Note 17), debt maturities of $0.8 billion, purchases of treasury stock of $1.3 billion and dividend payments of $0.4 billion, partially offset by $1.1 billion in proceeds from debt and $0.9 billion of proceeds from issuances of treasury shares pursuant to option/benefit plans.

Cash, cash equivalents and marketable securities are invested in bank instruments and other high quality securities.

The table below provides the breakout of the balance between the Company's foreign subsidiaries and the United States as of June 30, 2025 and December 31, 2024.

(Billions) June 30, 2025 December 31, 2024

Foreign subsidiaries $ 3.7 $ 3.5

United States 0.5 4.2

Total cash, cash equivalents and marketable securities $ 4.2 $ 7.7

The decrease from December 31, 2024, was impacted by negative cash flow from operating activities for the first half of 2025, which included $3.1 billion in payments associated with the PWS and CAE legal settlements (as discussed in Note 17).

Other significant cash activities included $1.3 billion in debt maturities, $2.2 billion in purchases of treasury stock, and $0.8 in dividend payments.

Additionally, 3M had $1.1 billion in proceeds from debt and $1.0 of proceeds from issuances of treasury shares pursuant to option/benefit plans,

Net Debt (non-GAAP measure):

3 unchanged sentences

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 table below provides net debt as of March 31, 2025 and December 31, 2024.

(Millions) March 31, 2025 December 31, 2024 Change

The table below provides net debt as of June 30, 2025 and December 31, 2024.

(Millions) June 30, 2025 December 31, 2024 Change

Total debt $ 13,146 $ 13,044 $ 102

7 unchanged sentences

Working capital (non-GAAP measure):

(Millions) March 31, 2025 December 31, 2024 Change

(Millions) June 30, 2025 December 31, 2024 Change

Current assets $ 13,427 $ 15,884 $ (2,457)

6 unchanged sentences

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

Working capital increased $1.6 billion compared with December 31, 2024 primarily driven by lower balances of current liabilities relating to CAE legal settlement, short-term borrowings and current portions of long-term debt.

Working capital increased from December 31, 2024, primarily due to lower balances of current liabilities related to the PWS and CAE legal settlements, short-term borrowings and current portions of long-term debt.

This increase was partially offset by decreases in cash, cash equivalents, and marketable securities, as well as increases in accounts receivable and inventories.

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

2 unchanged sentences

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 the first three months of 2025, cash flows provided by operating activities decreased $0.8 billion compared to the same period last year, primarily driven by approximately $0.7 billion in payments associated with the CAE legal settlement .

In the first six months of 2025, cash flows provided by operating activities decreased $2.8 billion compared to the same period last year, primarily driven by approximately $3.1 billion in payments associated with the PWS and CAE legal settlements.

Cash Flows from Investing Activities:

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 $0.2 billion on PP&E in the first three months of 2025.

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

3M invested $0.4 billion on PP&E in the first six months of 2025.

The Company expects 2025 capital spending to be approximately $1.0 billion as 3M continues to invest in growth, productivity and sustainability.

6 unchanged sentences

Cash Flows from Financing Activities:

Debt cash flow activity includes proceeds from issuance of $1.1 billion in aggregate principal amount of debt partially offset by $750 million aggregate principal amount of debt maturities in the first quarter of 2025.

Debt cash flow activity includes $1.3 billion aggregate principal amount of debt maturities partially offset by proceeds from issuance of $1.1 billion in aggregate principal amount of debt in the first six months of 2025.

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 as of March 31, 2025 and December 31, 2024.

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

4 unchanged sentences

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

In the first three months of 2025, the Company purchased $1.3 billion of its own stock, compared to $21 million of stock purchases in the first three months of 2024.

As of March 31, 2025, approximately $6.6 billion remained available under the authorization.

In the first six months of 2025, the Company purchased $2.2 billion of its own stock, compared to $421 million of stock purchases in the first six months of 2024.

As of June 30, 2025, approximately $5.7 billion remained available under the authorization.

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

The Company does not utilize derivative instruments linked to the Company’s stock.

The Company also had $0.9 billion in proceeds from issuance of treasury stock pursuant to stock option and benefit plans in the first three months of 2025.

The Company also had $1.0 billion in proceeds from issuance of treasury stock pursuant to stock option and benefit plans in the first six months of 2025.

3M has paid dividends since 1916.

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

In May 2025, 3M's Board of Directors declared a second-quarter 2025 dividend of $0.73 per share.

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

17 unchanged sentences

• liabilities and the outcome of contingencies related to certain fluorochemicals known as "PFAS," including liabilities related to claims, lawsuits, and government regulatory proceedings concerning various PFAS-related products and chemistries, as well as risks related to the Company's plans to exit PFAS manufacturing and work to discontinue use of PFAS across its product portfolio,

• risks related to the class-action settlement (“PWS Settlement”) to resolve claims by public water suppliers in the United States regarding PFAS,

• risks related to the class-action settlement (“PWS Settlement”) to resolve claims by public water suppliers in the United States regarding PFAS, as well as risks related to other settlements related to PFAS,

• legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the Company's reports on Form 10-K, 10-Q, and 8-K, as well as compliance risks related to legal or regulatory requirements, government contract requirements, policies and practices, or other matters that require or encourage the Company or its customers, suppliers, vendors, or channel partners to conduct business in a certain way,

2 unchanged sentences

• the availability and cost of purchased components, compounds, raw materials and energy due to shortages, increased demand and wages, tariffs, supply chain interruptions, or natural or other disasters,

• unanticipated problems or delays with the phased implementation of a global enterprise resource planning (ERP) system, or security breaches and other disruptions to the Company's information or operational technology infrastructure,

• unanticipated problems or delays when implementing new business systems and solutions, including with the phased implementation of a global enterprise resource planning (ERP) system, or security breaches and other disruptions to the Company's information or operational technology infrastructure,

• the impact of acquisitions, strategic alliances, divestitures, and other strategic events resulting from portfolio management actions and other evolving business strategies,

15 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis