What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-21 compared with 2026-04-21 · 163 added, 86 removed, 267 unchanged (48% of the section changed)

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As discussed in Note 1, certain changes are reflective in this document for all applicable periods presented.

Effective in the first quarter of 2026, the Company made changes to the measure of segment operating performance and segment composition used by its CODM, impacting the disclosed measure of segment profit (business segment operating income).

Effective in the first and second quarters of 2026, the Company made changes to the measure of segment operating performance and segment composition used by its CODM, impacting the disclosed measure of segment profit (business segment operating income).

Further details are provided in Note 16.

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

Unless otherwise noted, all year-over-year ("YoY") comparisons in this MD&A refer to the first quarter of 2026 compared with the first quarter of 2025.

Financial highlights for the first quarter of 2026:

Unless otherwise noted, all year-over-year ("YoY") comparisons in this MD&A refer to the second quarter and the first six months of 2026 compared with the second quarter and first six months of 2025.

Financial highlights for the second quarter and the first six months of 2026:

Three months ended

March 31, 2026

June 30, 2026 Six months ended

June 30, 2026

GAAP Adjusted (a)

Net sales (millions) $ 6,500 $ 6,500 $ 12,530 $ 12,503

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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 electrical markets, adhesives, abrasives, and aerospace—supported by commercial excellence and innovation.

These were partially offset by weakness in consumer electronics, auto, roofing granules and consumer, and the YoY impact of the manufactured PFAS products special item.

Net sales change was driven by strength in industrial, safety, semiconductor and data center—supported by commercial excellence and innovation.

This strength was partially offset by weakness in consumer/consumer electronics, and the YoY impact of the manufactured PFAS products special item.

Three months ended

March 31, 2026

June 30, 2026 Six months ended

June 30, 2026

GAAP Adjusted (a)

Operating income margin 15.1 % 24.9 % 19.0 % 24.3 %

YoY change in operating income margin 2.3 ppts 0.3 ppts

YoY change in operating income margin (2.9) ppts 0.4 ppts (0.4) ppts 0.3 ppts

GAAP operating margins were affected by the YoY impact of special items.

The primary drivers were lower net costs for significant litigation, reflecting increased insurance recoveries (discussed in Note 15).

These were partially offset by higher costs related to manufactured PFAS products and 2026 transformation costs.

Outside of special items, both GAAP and adjusted operating margins reflect benefits from growth, broad-based productivity, and favorable foreign currency impacts, partially offset by tariff impacts, cost dis-synergies (from the exit of PFAS manufacturing and the 2024 spin of Solventum), and growth investments.

The primary drivers were higher losses on business divestitures, and transformation costs.

These drivers were partially offset by lower net costs for significant litigation and PFAS exit, which on a year-to-date basis reflect increased insurance recoveries (discussed in Note 15).

Outside of special items, both GAAP and adjusted operating margins reflect benefits from growth, productivity, and favorable foreign currency impacts, partially offset by tariff impacts, cost dis-synergies (following the exit of PFAS manufacturing and the 2024 spin of Solventum), and growth investments.

Three months ended

March 31, 2026

June 30, 2026 Six months ended

June 30, 2026

GAAP Adjusted (a)

Earning per diluted share (EPS) $ 1.78 $ 2.40 $ 3.01 $ 4.54

YoY change in EPS 33 % 11 % (11) % 12 %

GAAP EPS YoY was affected by the net impact of special items, including those impacting operating income discussed above, as well as by the negative impact from the decrease in Solventum's share price during the period in 2026 compared to an increase in 2025.

Outside of special items, both GAAP and adjusted EPS reflect the impact of the other operating income items discussed above, while a lower share count provided additional benefits.

EPS also benefited from tax timing and reduced pension expense, partially offset by higher interest costs (apart from special items).

3M completed its exit of PFAS manufacturing at the end of 2025 as discussed in Note 15.

GAAP EPS YoY was affected by the net impact of special items, including those impacting operating income discussed above, as well as by the impact of changes in Solventum's share price (which was a YoY benefit in the second quarter and YoY headwind in the first six months of 2026).

Outside of special items, both GAAP and adjusted EPS reflect the operating margin drivers discussed above, while non-operating benefits were primarily driven by a lower share count.

On a year-to-date basis, EPS also benefited from favorable tax timing.

3M completed its exit of PFAS manufacturing by the end of 2025.

As discussed in Note 15, the Company continues to address PFAS manufactured prior to exit through treatment, remediation, and disposition of its assets and interests in manufacturing facilities, which may include dismantling, cleaning, and repurposing.

Decisions or circumstances associated with the extent and type of remaining activity at particular locations and impacts on assets and potential obligations, among other factors, could result in additional expenses.

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Information regarding sales by geographic area is included below.

Three months ended March 31, 2026

Three months ended June 30, 2026

Americas Asia Pacific

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Total sales change 1.0 % 4.9 % 3.2 % 2.4 %

Six months ended June 30, 2026

Americas Asia Pacific EMEA

Net sales (millions) $ 6,669 $ 3,653 $ 2,208 $ 12,530

% of worldwide sales 53.2 % 29.2 % 17.6 % 100.0 %

Components of net sales change:

Organic sales (b)

(0.9) % 3.8 % (0.4) % 0.5 %

Divestitures (c)

(0.3) (0.2) (0.9) (0.4)

Translation 0.9 0.7 6.2 1.8

Total sales change (0.3) % 4.3 % 4.9 % 1.9 %

(c) Acquisition and divestiture sales change impacts are measured separately for the first twelve months post-transaction.

Operating Expenses:

Three months ended March 31,

(Percent of net sales) 2026 2025 Change

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

(Percent of net sales) 2026 2025 Change 2026 2025 Change

Cost of sales 58.7 % 57.5 % 1.2 % 59.0 % 57.9 % 1.1 %

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Research, development and related expenses (R&D) 4.6 4.5 0.1 4.9 4.7 0.2

Loss (gain) on business divestitures

Loss on business divestitures 5.2 0.1 5.1 2.7 — 2.7

Operating income margin

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Cost of Sales measured as a percent of sales:

Increases in the first quarter of 2026 were primarily due to cost dis-synergies due to the PFAS exit and tariff impacts, partially offset by ongoing manufacturing productivity initiatives.

Increases in the second quarter and first six months of 2026 were primarily due to cost dis-synergies following the exit of PFAS manufacturing and headwinds from rising oil prices and tariff impacts, partially offset by ongoing manufacturing productivity initiatives.

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 benefits from insurance recoveries reducing net costs from significant litigation.

Decreases in the second quarter and first six months of 2026 were primarily driven by lower net costs from significant litigation.

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

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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 information on 2026 items is discussed in Note 3.

Other Expense (Income), Net:

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

Interest expense (net of interest income) decreased YoY driven by reduced imputed interest associated with the obligations resulting from the PWS Settlement and the CAE Settlement (discussed in Note 15).

The non-service pension and postretirement net cost decreased approximately $30 million YoY.

Interest expense (net of interest income):

decreased YoY driven by a reduction in interest expense on debt and reduced imputed interest associated with obligations resulting from the PWS Settlement and the CAE Settlement (discussed in Note 15).

The non-service pension and postretirement net period cost decreased in the second quarter and first six months of 2026 YoY.

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

Solventum ownership - change in value resulted in a YoY headwind of $699 million in the first quarter of 2026 as Solventum's share price decreased during the period in 2026 compared to an increase in 2025.

Solventum ownership - change in value resulted in a YoY tailwind of $310 million in the second quarter of 2026 and YoY headwind of $389 million in the first six months of 2026, as Solventum's share price increased during the second quarter of 2026 compared a decrease in 2025 and decreased during the first six months of 2026 compared to an increase in 2025.

Provision for Income Taxes:

Three months ended

June 30, Six months ended

(Percent of pre-tax income) 2026 2025 2026 2025

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Adjusted effective tax rate (a)

The primary factors that increased the Company's effective tax rate YoY were the tax impacts of 3M's retained ownership interest in Solventum, partially offset by increased tax benefits from stock-based compensation.

19.3 20.8 18.5 20.9

The primary factors that decreased the Company's effective tax rate YoY for the three months ended June 30, 2026 were the tax impacts of 3M's retained ownership interest in Solventum and the tax impacts of net costs of significant litigation, partially offset by the loss on business divestiture.

The primary factors that decreased the Company's effective tax rate YoY for the six months ended June 30, 2026 were the increased tax benefits from stock-based compensation and the tax impacts of net costs of significant litigation, partially offset by the loss on business divestiture and the tax impacts of 3M's retained ownership interest in Solventum.

Income from Unconsolidated Subsidiaries, Net of Taxes:

Three months ended

June 30, Six months ended

(Millions) 2026 2025 2026 2025

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Three months ended

June 30, Six months ended

(Millions) 2026 2025 2026 2025

Net income attributable to noncontrolling interest

$ 5 $ 2 $ 11 $ 8

Net income attributable to noncontrolling interest represents the elimination of the income or loss attributable to non-3M ownership interests in 3M consolidated entities.

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Three months ended

June 30, Six months ended

Pre-tax amounts (millions) 2026 2025 2026 2025

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Safety and Industrial Business:

Three months ended March 31,

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

2026 2025 2026 2025

Sales (millions) $ 3,091 $ 2,857 $ 6,021 $ 5,602

1 unchanged sentence

Organic sales (b)

Divestitures (1.3) (0.7)

Translation 1.3 2.5

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Business segment operating income (millions)

$ 859 $ 738 $ 1,635 $ 1,437

Percent change 16.4 % 13.8 %

Percent of sales 27.8 % 25.8 % 27.2 % 25.7 %

First quarter 2026 results:

Second quarter 2026 results:

Sales in Safety and Industrial were up 8.2 percent in U.S.

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

Progress on commercial excellence and innovation drove growth, partially offset by weakness in roofing granules.

Business segment operating income margins increased YoY, driven by benefits from growth and broad-based productivity.

These benefits were partially offset by tariffs, continued growth investments and cost dis-synergies from the exit of PFAS manufacturing.

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

Progress on commercial excellence and innovation drove strong growth.

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

These benefits were partially offset by tariffs, continued growth investments, and cost dis-synergies following the exit of PFAS manufacturing.

First six months 2026 results:

Sales in Safety and Industrial were up 7.5 percent in U.S.

Organic sales increased in electrical markets, industrial adhesives and tapes, abrasives, personal safety, and industrial specialties, driven by progress on commercial excellence and innovation;

market weakness in roofing granules and automotive aftermarket resulted in decreased sales.

Business segment operating income margins increased YoY primarily driven by benefits from growth and productivity.

These benefits were partially offset by tariffs, continued growth investments, and cost dis-synergies following the exit of PFAS manufacturing.

Transportation and Electronics Business :

Three months ended March 31,

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

2026 2025 2026 2025

Sales (millions) $ 2,066 $ 1,944 $ 3,914 $ 3,760

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Percent of sales 24.4 % 24.6 % 23.1 % 23.1 %

First quarter 2026 results:

Second quarter 2026 results:

Sales in Transportation and Electronics were up 6.2 percent in U.S.

Organic growth was driven by strength in semiconductor, data center, aerospace, and commercial branding, partially offset by market weakness in consumer electronics, and auto.

Business segment operating income margins increased YoY, driven by benefits from growth and broad-based productivity.

These benefits were partially offset by tariffs, continued growth investments and cost dis-synergies from the exit of PFAS manufacturing.

Organic growth was driven by strength in semiconductor, aerospace, data center, advanced materials, and commercial branding.

Business segment operating income margins decreased YoY reflecting tariffs, continued growth investments, and cost dis-synergies following the exit of PFAS manufacturing, partially offset by benefits from growth and productivity.

First six months 2026 results:

Sales in Transportation and Electronics were up 4.1 percent in U.S.

Organic growth was driven by strength in semiconductor, aerospace, data center, advanced materials, and commercial branding, partially offset by weakness in auto and consumer electronics.

Business segment operating income margins were flat YoY due to benefits from growth and productivity, offset by tariffs, continued growth investments, and cost dis-synergies following the exit of PFAS manufacturing.

Consumer Business:

Three months ended March 31,

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

2026 2025 2026 2025

Sales (millions) $ 1,247 $ 1,270 $ 2,378 $ 2,394

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Organic sales (b)

(2.1) % (1.7) %

Translation 0.3 1.0

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Percent of sales 20.1 % 21.1 % 19.7 % 20.3 %

First quarter 2026 results:

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

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

Overall growth was constrained by weak U.S.

consumer discretionary spending, with pockets of strength in select products (for example, Scotch-Brite™) and international markets providing partial offset.

Business segment operating income margins decreased YoY, reflecting tariffs, continued growth investments and cost dis-synergies from the exit of PFAS manufacturing, partially offset by benefits from productivity.

Second quarter 2026 results:

Sales in Consumer were down 1.8 percent in U.S.

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

retailer inventory levels more than offset positive POS and share gains.

First six months 2026 results:

Sales in Consumer were down 0.7 percent in U.S.

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

retailer inventory levels more than offset positive POS and share gains.

Outside of 3M's reportable segments, 3M has Corporate, which is not a reportable business segment as it does not meet the segment reporting criteria.

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

Corporate-level income decreased YoY in the first quarter 2026, primarily due to Solventum-related items.

Corporate-level income decreased YoY in the second quarter and first six months of 2026, primarily due to Solventum-related items and corporate costs.

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

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These measures are not in accordance with, nor are they a substitute for GAAP measures, and may not be comparable to similarly titled measures used by other companies.

Certain measures adjust for the impacts of special items.

Certain measures adjust for the impact of special items.

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

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Special items for the periods presented include:

Net costs for significant litigation:

• These relate to 3M's respirator mask/asbestos (which include Aearo and non-Aearo items), PFAS-related other environmental, and Combat Arms Earplugs matters (as discussed in Note 15).

Net costs for significant litigation and PFAS exit:

• Net costs for significant litigation relate to 3M's respirator mask/asbestos (which include Aearo and non-Aearo items), PFAS-related other environmental, and Combat Arms Earplugs matters (as discussed in Note 15).

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

Associated tax impacts of significant litigation include impacts on Foreign Derived Intangible Income ("FDII"), Net Controlled Foreign Corporation Tested Income ("NCTI"), foreign tax credits, and tax costs of repatriation.

Associated tax impacts of significant litigation include impacts on Foreign-Derived Deduction Eligible Income ("FDDEI"), Net Controlled Foreign Corporation Tested Income ("NCTI"), foreign tax credits, and tax costs of repatriation.

PFAS exit costs include amounts outside of significant litigation related to impacted site disposition and treatment post-first quarter 2026 completion of substantive PFAS product sales.

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.

Business acquisition-related costs

• These include transaction and integration costs as applicable in the respective periods.

Gain/loss on business divestitures:

• In the third quarter of 2025, 3M classified a business as held for sale.

In the first quarter of 2026, 3M reflected an adjustment to carrying it at its selling price less cost to sell.

In the first half of 2026, 3M reflected an adjustment to carrying it at its selling price less cost to sell.

In the second quarter of 2026, 3M recorded a loss on the divestiture of its Dyneon GmbH subsidiary.

See Note 3 for additional information.

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Net costs include restructuring and other related items such as site closure, sale, moving and set-up, accelerated depreciation, and program management.

Three months ended March 31, 2025

Three months ended June 30, 2025

Total Company

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Net sales Operating income Operating income margin Income before taxes Provision for income taxes Effective tax rate Net income attributable to 3M EPS

Total company

GAAP amounts $ 6,344 $ 1,140 18.0 % $ 923 $ 245 26.6 % $ 723 $ 1.34

Adjustments for special items:

Net costs for significant litigation — 74 224 (2) 226 0.41

Net costs for significant litigation and PFAS exit — 347 471 46 425 0.79

Loss on business divestitures — 3 3 1 2 —

Manufactured PFAS products (186) 17 17 4 13 0.02

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

Three months ended March 31, 2026

Three months ended June 30, 2026

Total Company

(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 EPS percent change

Operating income Operating income margin Income before taxes Provision for income taxes Effective tax rate Net income attributable to 3M EPS EPS percent change

GAAP amounts $ 984 15.1 % $ 1,120 $ 183 16.3 % $ 933 $ 1.78 33 %

Adjustments for special items:

Net costs for significant litigation and PFAS exit 183 296 64 232 0.44

Business acquisition-related costs 12 12 — 12 0.02

Loss on business divestitures 336 336 20 316 0.61

Solventum ownership - change in value — (303) 11 (314) (0.60)

Transformation costs 100 100 24 76 0.15

Total special items 631 441 119 322 0.62

Adjusted amounts (non-GAAP measures) $ 1,615 24.9 % $ 1,561 $ 302 19.3 % $ 1,255 $ 2.40 11 %

Three months ended June 30, 2026

Sales change Organic sales Divestitures Translation Total sales change

Total Company 2.3 % (0.6) % 0.7 % 2.4 %

Remove manufactured PFAS products special item impact 3.1 (0.1) 0.1 3.1

Adjusted total Company (non-GAAP measures) 5.4 % (0.7) % 0.8 % 5.5 %

Six months ended June 30, 2025

Total Company

(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 EPS

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

Adjustments for special items:

Net costs (benefit) from significant litigation

— (170) (45) (25) (20) (0.04)

Net costs for significant litigation and PFAS exit — 421 695 44 651 1.20

Loss on business divestitures — 3 3 1 2 —

— 7 7 1 6 0.01

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 $ 2,865 24.0 % $ 2,725 $ 568 20.9 % $ 2,198 $ 4.04

Six months ended June 30, 2026

Total Company

(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 EPS percent change

GAAP amounts $ 12,530 1.9 % $ 2,381 19.0 % $ 1,998 $ 404 20.2 % $ 1,586 $ 3.01 (11) %

Adjustments for special items:

Net costs for significant litigation and PFAS exit — 13 251 39 212 0.40

Business acquisition-related costs — 12 12 — 12 0.02

Loss on business divestitures — 343 343 21 322 0.61

Manufactured PFAS products (27) 126 126 31 95 0.18

Solventum ownership - change in value — — 53 11 42 0.08

Transformation costs — 166 166 40 126 0.24

1 unchanged sentence

Adjusted amounts (non-GAAP measures) $ 12,503 4.7 % $ 3,041 24.3 % $ 2,949 $ 546 18.5 % $ 2,395 $ 4.54 12 %

Three months ended March 31, 2026

Organic sales Divestitures Translation Total sales change

Six months ended June 30, 2026

Sales change Organic sales Divestitures Translation Total sales change

Total Company 0.5 % (0.4) % 1.8 % 1.9 %

(1.4) % (0.1) % 2.8 % 1.3 %

Remove manufactured PFAS products special item impact

Adjusted total Company (non-GAAP measures) 3.3 % (0.4) % 1.8 % 4.7 %

1.2 % (0.1) % 2.8 % 3.9 %

Financial Condition and Liquidity

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

The Company had no commercial paper outstanding as of March 31, 2026 and December 31, 2025.

The Company had no commercial paper outstanding at June 30, 2026 and December 31, 2025.

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 had the following credit ratings:

Credit rating agency Long-term rating

Credit rating agency Long-term rating Outlook

Moody's Investors Service A3 Stable

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Fitch Ratings A- Stable

The Company’s total debt at March 31, 2026, remained largely consistent with December 31, 2025, as there were no material debt maturities or issuances during the quarter.

The Company’s total debt at June 30, 2026, remained largely consistent with December 31, 2025, as there were no material debt maturities or issuances during the period.

In February 2026, the Company renewed its "well-known seasoned issuer" shelf registration statement, which registers an indeterminate amount of debt or equity securities for future issuance and sale.

Information with respect to long-term debt issuances and maturities for the periods presented is included in Note 11.

3M has a principal amount of long-term debt of $1.5 billion which will mature in 2026.

Information with respect to long-term debt issuances and maturities for the periods presented is included in Note 11, as applicable.

3M has a principal amount of long-term debt of $1.5 billion that will mature in 2026.

The Company's financial condition and liquidity enable it to address these obligations by refinancing, redemption, or both.

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The revolving credit agreement includes a provision under which 3M may request an increase of up to $1.0 billion (at lenders' discretion), bringing the total facility up to $5.25 billion.

The credit facility was undrawn at March 31, 2026.

The credit facility was undrawn at June 30, 2026.

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, 2026, 3M was in compliance with this requirement.

At June 30, 2026, 3M was in compliance with this requirement.

Debt covenants do not restrict the payment of dividends.

In the first quarter of 2026, as discussed in Note 11, 3M entered into a $1.45 billion term loan facility which was undrawn as of March 31, 2026.

The facility was established to provide financing flexibility in connection with the Madison acquisition and venture formation described in Note 3.

The Company also had $0.6 billion in stand-alone letters of credit, bank guarantees, and other similar instruments issued and outstanding at March 31, 2026.

In April 2026, as discussed in Note 11, 3M and a subsidiary entered into a $1.43 billion term loan facility and a $200 million revolving credit facility, both of which were undrawn as of June 30, 2026.

These facilities were established to provide financing in connection with the Madison acquisition and venture formation described in Note 3.

In July 2026, $1.43 billion was drawn under the term loan facility to fund the acquisition.

The Company had $0.6 billion in stand-alone letters of credit, bank guarantees, and other similar instruments issued and outstanding at June 30, 2026.

These instruments are utilized in connection with normal business activities.

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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 March 31, 2026 and December 31, 2025.

(Billions) March 31, 2026 December 31, 2025

The table below provides the breakout of the balance between the Company's foreign subsidiaries and the United States as of June 30, 2026 and December 31, 2025.

(Billions) June 30, 2026 December 31, 2025

Foreign subsidiaries $ 2.8 $ 3.5

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Total cash, cash equivalents and marketable securities $ 3.3 $ 5.9

The decrease from December 31, 2025, was primarily driven by $2.0 billion in purchases of treasury stock, $0.4 billion in dividend payments and $0.3 billion in payments associated with CAE legal settlement and PFAS-related environmental liabilities.

Outflows associated with the CAE and PFAS matters were largely offset by $0.3 billion in insurance recoveries (as discussed in Note 15).

In addition, overall outflows were partially offset by $0.3 billion in proceeds from the issuances of treasury shares pursuant to option/benefit plans (see "Cash Flows from Operating Activities" section below for further discussion).

The decrease from December 31, 2025, was primarily driven by $3.0 billion in purchases of treasury stock.

Additionally, $1.0 billion in payments associated with the CAE legal settlement and PFAS-related environmental liabilities and $0.8 billion in dividend payments further reduced cash.

Overall outflows were partially offset by $0.4 billion in insurance recoveries related to the CAE and PFAS matters (as discussed in Note 15), $0.4 billion in proceeds from the issuances of treasury shares pursuant to option/benefit plans, and cash generated from operating activities (see "Cash Flows from Operating Activities" section below for further discussion).

Current equity investments:

Current equity investments consist of 3M's ownership interest in Solventum.

As of March 31, 2026, 3M owned approximately 15% of Solventum's common stock, with a fair value of $1.7 billion.

As of June 30, 2026, 3M owned approximately 15% of Solventum's common stock, with a fair value of $2.0 billion.

As previously disclosed, 3M expects to sell its ownership in Solventum within five years of its 2024 spin-off.

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

In the first three months of 2026, cash flows provided by operating activities increased by $0.7 billion YoY, primarily driven by lower net payments associated with PFAS-related environmental liabilities and the CAE legal settlement driven by insurance recoveries.

In the first six months of 2026, cash flows provided by operating activities of $1.6 billion increased by $2.6 billion YoY, primarily driven by lower net payments for PFAS-related environmental liabilities and the CAE legal settlement impacted by insurance recoveries.

Working capital, defined as current assets minus current liabilities, decreased from December 31, 2025.

This decrease was primarily driven by a reduction in current assets, including lower balances of cash, cash equivalents, and marketable securities, and a decrease in the fair value of 3M's remaining interest in Solventum.

This decrease was primarily driven by a reduction in current assets, including lower balances of cash, cash equivalents, and marketable securities, as well as an increase in current liabilities related to the PWS legal settlement.

Cash Flows from Investing Activities:

Investments in 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 2026.

3M invested $0.4 billion on PP&E in the first six months of 2026.

The Company expects 2026 capital spending to be approximately $1.1 billion as 3M continues to invest in growth, productivity and sustainability.

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

In the first three months of 2026, the Company purchased $2.0 billion of its own stock, compared to $1.3 billion of stock purchases in the first three months of 2025.

As of March 31, 2026, approximately $2.7 billion remained available under the authorization.

In the first six months of 2026, the Company purchased $3.0 billion of its own stock, compared to $2.2 billion of stock purchases in the first six months of 2025.

As of June 30, 2026, approximately $1.8 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 also had $0.3 billion in proceeds from issuance of treasury stock pursuant to stock option and benefit plans in the first three months of 2026.

The Company also had $0.4 billion in proceeds from issuance of treasury stock pursuant to stock option and benefit plans in the first six months of 2026.

3M has paid dividend continuously since 1916.

In February 2026, 3M's Board of Directors declared a first-quarter 2026 dividend of $0.78 per share, an increase of 7 percent.

In May 2026, 3M's Board of Directors declared a second-quarter 2026 dividend of $0.78 per share.

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

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Forward-Looking Statements

Certain statements in this document, as well as other filings we make with the United States Securities and Exchange Commission (“SEC”) and other written and oral information we release, including statements regarding our performance, estimates, expectations, beliefs, intentions, projections, strategies for the future, costs and effects of legal proceedings, or other events or developments in the future are considered "forward-looking statements" under the federal securities laws, including the Private Securities Litigation Reform Act of 1995, as amended (the "PSLRA").

Forward-looking statements may appear throughout this document and are typically identified by the words "aim," "anticipate," "believe," "can," "continue," "could," "estimate," "evaluate," "expect," "forecast," "future," "goal," "guidance," "impact," "initial," "intend," "likely," "may," "outlook," "plan," "possible," "potential," "predict," "probable," "project," "seek," "should," "strategy," "target," "will," "would," and other words that are similar to, or have the opposite meanings, of those words.

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The most important risks, uncertainties, and other factors that could cause the Company's actual results to differ from the Company's forward-looking statements include:

(1) worldwide economic, political, regulatory, international trade, geopolitical, tariffs, and retaliatory counter measures, capital markets, and other external conditions, (2) foreign currency exchange rates and fluctuations in those rates, (3) liabilities and contingencies related to 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 exit of PFAS manufacturing and work to discontinue use of PFAS across its product portfolio, (4) risks related to the PWS Settlement to resolve claims by public water suppliers in the United States regarding PFAS, as well as risks related to ongoing PFAS-related settlements and claims, (5) 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, (6) competitive conditions and customer preferences, (7) the timing and market acceptance of new product and service offerings, (8) 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, (9) unanticipated problems or delays when implementing new business systems and solutions, including with the phased implementation of a global enterprise resource planning system, or security breaches and other disruptions to the Company's information or operational technology infrastructure, (10) use of artificial intelligence technologies, (11) the impact of acquisitions, strategic alliances, divestitures, and other strategic events resulting from portfolio management actions and other evolving business strategies, (12) operational execution, including the extent to which the Company can realize the benefits of planned productivity improvements, as well as the impact of organizational restructuring activities, (13) financial market risks that may affect the Company's funding obligations under defined benefit pension and postretirement plans, (14) the Company’s credit ratings and its cost of funding, (15) tax-related external conditions, including changes in tax rates, laws, or regulations, (16) matters relating to the Company's Aearo Entities, Combat Arms Earplugs Settlement, and related products, and (17) matters relating to the spin-off of Solventum, the Company's former Health Care business, into an independent public company.

(1) worldwide economic, political, regulatory, international trade, geopolitical, tariffs, and retaliatory countermeasures, capital markets, and other external conditions, (2) foreign currency exchange rates and fluctuations in those rates, (3) liabilities and contingencies related to 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 exit of PFAS manufacturing and work to discontinue use of PFAS across its product portfolio, (4) risks related to the PWS Settlement to resolve claims by public water suppliers in the United States regarding PFAS, as well as risks related to ongoing PFAS-related settlements and claims, (5) 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, (6) competitive conditions and customer preferences, (7) the timing and market acceptance of new product and service offerings, (8) 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, (9) unanticipated problems or delays when implementing new business systems and solutions, including with the phased implementation of a global enterprise resource planning system, or security breaches and other disruptions to the Company's information or operational technology infrastructure, (10) use of artificial intelligence technologies, (11) the impact of acquisitions, strategic alliances, divestitures, and other strategic events resulting from portfolio management actions and other evolving business strategies, (12) operational execution, including the extent to which the Company can realize the benefits of planned productivity improvements, as well as the impact of organizational restructuring activities, (13) financial market risks that may affect the Company's funding obligations under defined benefit pension and postretirement plans, (14) the Company’s credit ratings and its cost of funding, (15) tax-related external conditions, including changes in tax rates, laws, or regulations, (16) matters relating to the Company's Aearo Entities, Combat Arms Earplugs Settlement, and related products, and (17) matters relating to the spin-off of Solventum, the Company's former Health Care business, into an independent public company.

Those risks, uncertainties, and other factors are further described in Part I, Item 1A, "Risk Factors" of the Company's Form 10-K for the year ended December 31, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis