8-K
3M Co (MMM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 21, 2023
3M COMPANY
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | File No. 1-3285 | 41-0417775 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 3M Center, St. Paul, Minnesota | 55144-1000 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s Telephone Number, Including Area Code) (651) 733-1110
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, Par Value $.01 Per Share | MMM | New York Stock Exchange |
| MMM | Chicago Stock Exchange, Inc. | |
| 0.950% Notes due 2023 | MMM23 | New York Stock Exchange |
| 1.500% Notes due 2026 | MMM26 | New York Stock Exchange |
| 1.750% Notes due 2030 | MMM30 | New York Stock Exchange |
| 1.500% Notes due 2031 | MMM31 | New York Stock Exchange |
Note: The common stock of the Registrant is also traded on the SIX Swiss Exchange.
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
This Current Report on Form 8-K is being furnished to include supplemental unaudited historical information (furnished hereunder as Exhibit 99 and incorporated herein by reference) that was updated as a result of the following:
•Changes in the measure of segment operating performance used by 3M’s chief operating decision maker impacting 3M’s segment reporting.
•Changes to non-GAAP measures - certain amounts adjusted for special items, adjusted free cash flow, adjusted free cash flow conversion, and adjusted EBITDA. The information reflects expanding the extent of special item adjustments to include the sales and estimates of income (including exit costs) and associated activity regarding manufactured PFAS products.
The Company did not operate using the new measure of segment operating performance until the first quarter of 2023 and will begin to report comparative results under this basis with the filing of its Quarterly Report on Form 10-Q for the quarter ending March 31, 2023. Until 3M’s interim financial statements as of and for the quarter ending March 31, 2023 are issued, amounts on the updated basis are not in accordance with U.S. GAAP and, as a result, are considered non-GAAP measures.
The Company is furnishing this information as it believes it is useful to investors to aid in understanding, on a timely basis, the impacts of these changes on historical periods as they prepare to consider 3M’s future results on the updated basis.
As used herein, the term “3M” or “Company” includes 3M Company and its subsidiaries unless the context indicates otherwise. The information contained in this Current Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking information about 3M's financial results and estimates and business prospects that involve substantial risks and uncertainties that could cause actual results to differ materially. Forward-looking statements relate to future events and typically address the Company’s expected future business and financial performance. Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” “forecast” and other words and terms of similar meaning, typically identify such forward-looking statements. In particular, these include, among others, statements relating to:
•worldwide economic, political, regulatory, international trade, geopolitical, capital markets and other external conditions, such as interest rates, monetary policy, financial conditions of our suppliers and customers, trade restrictions such as tariffs and retaliatory counter measures, inflation, recession, military conflicts, and natural and other disasters or climate change affecting the operations of the Company or our suppliers and customers,
•risks related to unexpected events such as the public health crises associated with the coronavirus (COVID-19) global pandemic,
•liabilities and the outcome of contingencies related to certain fluorochemicals known as "PFAS," as well as matters related to the Company's plans to discontinue the use of PFAS,
•the Company’s strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of financial performance, and market position,
•competitive conditions and customer preferences,
•foreign currency exchange rates and fluctuations in those rates,
•new business opportunities, product and service development, and future performance or results of current or anticipated products and services,
•fluctuations in the costs and availability of purchased components, compounds, raw materials and energy,
•information technology systems including implementation of an enterprise resource planning (ERP) system,
•security breaches and other disruptions to information technology infrastructure,
•the scope, nature or impact of acquisition, strategic alliance and divestiture activities,
•operational execution, including inability to generate productivity improvements as estimated,
•future levels of indebtedness, common stock repurchases and capital spending,
•future access to credit markets and the cost of credit,
•pension and postretirement obligation assumptions and future contributions,
•asset impairments,
•tax liabilities and effects of changes in tax rates, laws or regulations,
•the proposed spin-off of the Company's Health Care business to establish two separate public companies,
•the voluntary chapter 11 proceedings initiated by the Company's Aearo Entities, and
•laws and regulations, as well as legal compliance risks (including third-party risks), and legal and regulatory proceedings related to the same, including with regards to environmental matters and product liability, in the United States and other countries in which we operate.
For details of the risks stated above, see Part I, Item 1A “Risk Factors” of the Company’s annual report on Form 10-K for the year ended December 31, 2022. The Company assumes no obligation to update or revise any forward-looking statements.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit Number | Description |
|---|---|
| 99 | Supplemental unaudited historical business segment, disaggregated revenue, and non-GAAP measure information (furnished pursuant to Item 2.02 hereof) reflecting changes effected during the first quarter of 2023 relative to the measure of segment operating performance and calculations of certain non-GAAP measures. |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| 3M COMPANY | |
|---|---|
| By: | /s/ Monish Patolawala |
| Monish Patolawala, | |
| Executive Vice President, Chief Financial and Transformation Officer (Principal Financial Officer) |
Dated: February 21, 2023
Document
EXHIBIT 99
This Current Report on Form 8-K is being furnished to include supplemental unaudited historical information that was updated as a result of the following:
•Changes in the measure of segment operating performance used by 3M’s chief operating decision maker impacting 3M’s segment reporting.
•Changes to non-GAAP measures - certain amounts adjusted for special items, adjusted free cash flow, adjusted free cash flow conversion, and adjusted EBITDA. The information reflects expanding the extent of special item adjustments to include the sales and estimates of income (including exit costs) and associated activity regarding manufactured PFAS products.
The Company did not operate using the new measure of segment operating performance until the first quarter of 2023 and will begin to report comparative results under this basis with the filing of its Quarterly Report on Form 10-Q for the quarter ending March 31, 2023. Until 3M’s interim financial statements as of and for the quarter ending March 31, 2023 are issued, amounts on the updated basis are not in accordance with U.S. GAAP and, as a result, are considered non-GAAP measures.
The Company is furnishing this information as it believes it is useful to investors to aid in understanding, on a timely basis, the impacts of these changes on historical periods as they prepare to consider 3M’s future results on the updated basis.
As used herein, the term “3M” or “Company” includes 3M Company and its subsidiaries unless the context indicates otherwise. The information contained in this Current Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act.
Changes in the measure of segment operating performance used by 3M’s chief operating decision maker (CODM)
Note 19 to 3M’s consolidated financial statements in its 2022 Annual Report on Form 10-K describes 3M’s business segments and measure of segment operating performance used by 3M’s CODM.
Effective in the first quarter of 2023, the measure of segment operating performance used by 3M’s CODM changed and, as a result, 3M’s disclosed measure of segment profit/loss (business segment operating income) will be updated for all comparative periods presented. The change to business segment sales and operating income aligns with the update to how the CODM assesses performance and allocates resources for the Company’s business segments. The changes included the following:
Reflecting gains/losses from sale of property, plant and equipment (PPE) and other assets within Corporate and Unallocated Change
3M updated its business segment operating performance measure to reflect all gains/losses from sales of PPE and other assets within Corporate and Unallocated. Previously, certain of these gains/losses were included in 3M’s business segments’ operating performance. In aggregate, for example relative to 2022, this change included ascribing approximately $135 million of gains previously included in the various business segments to Corporate and Unallocated as further reflected in the tables that follow.
Movement of certain businesses between segments
The businesses associated with two groups of products (each with approximately $25 million in sales) were realigned with one moving from the Consumer business segment to the Health Care business segment and the other moving from the Health Care business segment to the Consumer business segment.
Also effective in the first quarter of 2023, the Consumer business re-aligned from four divisions to the following three divisions: Home, Health and Auto Care; Construction and Home Improvement Markets; and Stationery and Office.
The tables below provide additional information with respect to the expected impact of the changes described above on previously reported segment and disaggregated revenue information. 3M discloses business segment operating income as its measure of segment profit/loss, reconciled to both total 3M operating income and income before taxes.
EXHIBIT 99
| Updated Basis (non-GAAP measure)* | Total Year | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Sales (Millions) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Previously Reported | Impact of Changes | Updated basis (non-GAAP measure)* | |||||||
| Safety and Industrial | ||||||||||||||
| 2022 | $ | 3,051 | $ | 2,924 | $ | 2,894 | $ | 2,735 | $ | 11,604 | $ | — | $ | 11,604 |
| 2021 | 3,099 | 3,029 | 3,005 | 2,848 | 11,981 | — | 11,981 | |||||||
| 2020 | 10,972 | — | 10,972 | |||||||||||
| Transportation and Electronics | ||||||||||||||
| 2022 | $ | 2,340 | $ | 2,268 | $ | 2,239 | $ | 2,055 | $ | 8,902 | $ | — | $ | 8,902 |
| 2021 | 2,396 | 2,355 | 2,327 | 2,184 | 9,262 | — | 9,262 | |||||||
| 2020 | 8,406 | — | 8,406 | |||||||||||
| Health Care | ||||||||||||||
| 2022 | $ | 2,128 | $ | 2,179 | $ | 2,076 | $ | 2,044 | $ | 8,421 | $ | 6 | $ | 8,427 |
| 2021 | 2,071 | 2,166 | 2,173 | 2,191 | 8,597 | 4 | 8,601 | |||||||
| 2020 | 7,832 | 3 | 7,835 | |||||||||||
| Consumer | ||||||||||||||
| 2022 | $ | 1,309 | $ | 1,330 | $ | 1,409 | $ | 1,244 | $ | 5,298 | $ | (6) | $ | 5,292 |
| 2021 | 1,287 | 1,399 | 1,434 | 1,389 | 5,513 | (4) | 5,509 | |||||||
| 2020 | 4,976 | (3) | 4,973 | |||||||||||
| Corporate and Unallocated | ||||||||||||||
| 2022 | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 4 | $ | — | $ | 4 |
| 2021 | (2) | 1 | 3 | — | 2 | — | 2 | |||||||
| 2020 | (2) | — | (2) | |||||||||||
| Total Company | ||||||||||||||
| 2022 | $ | 8,829 | $ | 8,702 | $ | 8,619 | $ | 8,079 | $ | 34,229 | $ | — | $ | 34,229 |
| 2021 | 8,851 | 8,950 | 8,942 | 8,612 | 35,355 | — | 35,355 | |||||||
| 2020 | 32,184 | — | 32,184 |
* Amounts reflect first quarter of 2023 changes in measure of segment operating performance as described herein. Until 3M’s interim financial statements as of and for the quarter ending March 31, 2023 are issued, amounts on the updated basis are not in accordance with U.S. GAAP and, as a result, are considered non-GAAP measures.
EXHIBIT 99
| Updated Basis (non-GAAP measure)* | Total Year | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Performance (millions) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Previously Reported | Impact of Changes | Updated basis (non-GAAP measure)* | |||||||
| Safety and Industrial | ||||||||||||||
| 2022 | $ | 627 | $ | (707) | $ | 652 | $ | 563 | $ | 1,199 | $ | (64) | $ | 1,135 |
| 2021 | 747 | 661 | 563 | 489 | 2,466 | (6) | 2,460 | |||||||
| 2020 | 2,588 | (56) | 2,532 | |||||||||||
| Transportation and Electronics | ||||||||||||||
| 2022 | $ | 464 | $ | 475 | $ | 475 | $ | (441) | $ | 1,012 | $ | (39) | $ | 973 |
| 2021 | 555 | 506 | 435 | 373 | 1,880 | (11) | 1,869 | |||||||
| 2020 | 1,701 | (11) | 1,690 | |||||||||||
| Health Care | ||||||||||||||
| 2022 | $ | 445 | $ | 492 | $ | 450 | $ | 412 | $ | 1,815 | $ | (16) | $ | 1,799 |
| 2021 | 465 | 547 | 508 | 514 | 2,037 | (3) | 2,034 | |||||||
| 2020 | 1,662 | (1) | 1,661 | |||||||||||
| Consumer | ||||||||||||||
| 2022 | $ | 219 | $ | 248 | $ | 299 | $ | 212 | $ | 994 | $ | (16) | $ | 978 |
| 2021 | 268 | 291 | 310 | 295 | 1,162 | 2 | 1,164 | |||||||
| 2020 | 1,119 | (2) | 1,117 | |||||||||||
| Total business segment operating income | ||||||||||||||
| 2022 | $ | 1,755 | $ | 508 | $ | 1,876 | $ | 746 | $ | 5,020 | $ | (135) | $ | 4,885 |
| 2021 | 2,035 | 2,005 | 1,816 | 1,671 | 7,545 | (18) | 7,527 | |||||||
| 2020 | 7,070 | (70) | 7,000 | |||||||||||
| Corporate and Unallocated | ||||||||||||||
| 2022 | $ | (114) | $ | (398) | $ | 2,280 | $ | (114) | $ | 1,519 | $ | 135 | $ | 1,654 |
| 2021 | (41) | (34) | (28) | (55) | (176) | 18 | (158) | |||||||
| 2020 | 91 | 70 | 161 | |||||||||||
| Total Company operating income | ||||||||||||||
| 2022 | $ | 1,641 | $ | 110 | $ | 4,156 | $ | 632 | $ | 6,539 | $ | — | $ | 6,539 |
| 2021 | 1,994 | 1,971 | 1,788 | 1,616 | 7,369 | — | 7,369 | |||||||
| 2020 | 7,161 | — | 7,161 | |||||||||||
| Other expense/(income), net | ||||||||||||||
| 2022 | $ | 147 | $ | — | $ | 147 | ||||||||
| 2021 | 165 | — | 165 | |||||||||||
| 2020 | 366 | — | 366 | |||||||||||
| Income before income taxes | ||||||||||||||
| 2022 | $ | 6,392 | $ | — | $ | 6,392 | ||||||||
| 2021 | 7,204 | — | 7,204 | |||||||||||
| 2020 | 6,795 | — | 6,795 |
EXHIBIT 99
| Disaggregated revenue information | ||||||
|---|---|---|---|---|---|---|
| Updated Basis (non-GAAP measure)* | ||||||
| Year ended December 31, | ||||||
| Net Sales (Millions) | 2022 | 2021 | 2020 | |||
| Abrasives | $ | 1,343 | $ | 1,296 | $ | 1,077 |
| Automotive Aftermarket | 1,209 | 1,164 | 1,028 | |||
| Closure and Masking Systems | 1,046 | 1,033 | 993 | |||
| Electrical Markets | 1,304 | 1,229 | 1,093 | |||
| Industrial Adhesives and Tapes | 2,331 | 2,353 | 2,000 | |||
| Personal Safety | 3,916 | 4,470 | 4,408 | |||
| Roofing Granules | 455 | 428 | 389 | |||
| Other Safety and Industrial | — | 8 | (16) | |||
| Total Safety and Industrial Business Segment | 11,604 | 11,981 | 10,972 | |||
| Advanced Materials | 1,205 | 1,200 | 1,029 | |||
| Automotive and Aerospace | 1,754 | 1,756 | 1,522 | |||
| Commercial Solutions | 1,751 | 1,717 | 1,486 | |||
| Electronics | 3,359 | 3,673 | 3,497 | |||
| Transportation Safety | 833 | 907 | 880 | |||
| Other Transportation and Electronics | — | 9 | (8) | |||
| Total Transportation and Electronics Business Segment | 8,902 | 9,262 | 8,406 | |||
| Drug Delivery | — | — | 146 | |||
| Food Safety | 244 | 368 | 337 | |||
| Health Information Systems | 1,259 | 1,220 | 1,140 | |||
| Medical Solutions | 4,581 | 4,632 | 4,288 | |||
| Oral Care | 1,327 | 1,396 | 1,052 | |||
| Separation and Purification Sciences | 992 | 984 | 870 | |||
| Other Health Care | 24 | 1 | 2 | |||
| Total Health Care Business Group | 8,427 | 8,601 | 7,835 | |||
| Home, Health and Auto Care | 1,655 | 1,741 | 1,649 | |||
| Construction and Home Improvement Markets | 2,346 | 2,465 | 2,191 | |||
| Stationery and Office | 1,291 | 1,306 | 1,132 | |||
| Other Consumer | — | (3) | 1 | |||
| Total Consumer Business Group | 5,292 | 5,509 | 4,973 | |||
| Corporate and Unallocated | 4 | 2 | (2) | |||
| Total Company | $ | 34,229 | $ | 35,355 | $ | 32,184 |
EXHIBIT 99
Changes to Non-GAAP Measures - Certain Amounts Adjusted for Special Items, Adjusted Free Cash Flow, Adjusted Free Cash Flow Conversion, and Adjusted EBITDA
In 2023, 3M is changing certain of its non-GAAP measures by adjusting for the results of manufactured PFAS products in arriving at results, adjusted for special items. In the fourth quarter of 2022, 3M record a charge for PFAS manufacturing exit costs and included it as an adjustment in arriving at results, adjusted for special items. The 2023 non-GAAP measure change involves expanding the extent of adjustment to include the sales and estimates of income (including exit costs) and associated activity regarding manufactured PFAS products that 3M plans to exit by the end of 2025. This change also impacts other non-GAAP measures such as adjusted free cash flow, adjusted free cash flow conversion and adjusted EBITDA to similarly include relevant special item adjustments for manufactured PFAS products.
The discussion and tables below include information with respect to historical amounts adjusted for special items (non-GAAP measures) reflective of the changes in measure of segment operating performance and non-GAAP measures described above.
Certain amounts adjusted for special items - (non-GAAP measures):
| Year ended December 31, 2020 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||
| Safety and Industrial | ||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,532 | 23.1 | % | ||||||||||||
| Adjustments for special items: | ||||||||||||||||
| Net costs for significant litigation | 205 | |||||||||||||||
| Total special items | 205 | |||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 2,737 | 25.0 | % | ||||||||||||
| Transportation and Electronics | ||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,406 | $ | 1,690 | 20.1 | % | ||||||||||
| Adjustments for special items: | ||||||||||||||||
| Manufactured PFAS products | (1,063) | (108) | ||||||||||||||
| Total special items | (1,063) | (108) | ||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 7,343 | $ | 1,582 | 21.5 | % | ||||||||||
| Total Company | ||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 32,184 | $ | 7,161 | 22.3 | % | $ | 6,795 | $ | 1,337 | 19.7 | % | $ | 5,449 | $ | 9.36 |
| Adjustments for special items: | ||||||||||||||||
| Net costs for significant litigation | — | 353 | 353 | 136 | 217 | 0.37 | ||||||||||
| Manufactured PFAS products | (1,063) | (108) | (108) | (23) | (85) | (0.15) | ||||||||||
| Gain on business divestitures | — | (389) | (389) | (86) | (303) | (0.52) | ||||||||||
| Divestiture-related restructuring actions | — | 55 | 55 | 9 | 46 | 0.08 | ||||||||||
| Total special items | (1,063) | (89) | (89) | 36 | (125) | (0.22) | ||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 31,121 | $ | 7,072 | 22.7 | % | $ | 6,706 | $ | 1,373 | 20.5 | % | $ | 5,324 | $ | 9.14 |
EXHIBIT 99
| Year ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,460 | 20.5 | % | ||||||||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 249 | |||||||||||||||||||||||||||||||||||||
| Total special items | 249 | |||||||||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 2,709 | 22.6 | % | ||||||||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 9,262 | $ | 1,869 | 20.2 | % | ||||||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (1,258) | (135) | ||||||||||||||||||||||||||||||||||||
| Total special items | (1,258) | (135) | ||||||||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 8,004 | $ | 1,734 | 21.7 | % | ||||||||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 35,355 | $ | 7,369 | 20.8 | % | $ | 7,204 | $ | 1,285 | 17.8 | % | $ | 5,921 | $ | 10.12 | ||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 463 | $ | 463 | $ | 104 | $ | 359 | 0.61 | |||||||||||||||||||||||||||||
| Manufactured PFAS products | (1,258) | (135) | $ | (135) | $ | (29) | $ | (106) | (0.18) | |||||||||||||||||||||||||||||
| Total special items | (1,258) | 328 | $ | 328 | $ | 75 | $ | 253 | 0.43 | |||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures (a) | $ | 34,097 | $ | 7,697 | 22.6 | % | $ | 7,532 | $ | 1,360 | 18.1 | % | $ | 6,174 | $ | 10.55 | Year ended December 31, 2022 | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| (Dollars in millions, except per share amounts) | Sales | Sales Change | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | Earnings per diluted share percent change | ||||||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 1,135 | 9.8 | % | ||||||||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 1,414 | |||||||||||||||||||||||||||||||||||||
| Total special items | 1,414 | |||||||||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 2,549 | 22.0 | % | ||||||||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,902 | (3.9) | % | $ | 973 | 10.9 | % | ||||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (1,351) | 631 | ||||||||||||||||||||||||||||||||||||
| Total special items | (1,351) | 631 | ||||||||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 7,551 | (5.6) | % | $ | 1,604 | 21.2 | % | ||||||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 34,229 | (3.2) | % | $ | 6,539 | 19.1 | % | $ | 6,392 | $ | 612 | 9.6 | % | $ | 5,777 | 10.18 | 1 | % | |||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 2,291 | 2,291 | 476 | 1,815 | 3.20 | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (1,351) | 631 | 631 | 121 | 510 | 0.90 | ||||||||||||||||||||||||||||||||
| Gain on business divestitures | — | (2,724) | (2,724) | (39) | (2,685) | (4.73) | ||||||||||||||||||||||||||||||||
| Divestiture-related restructuring actions | — | 41 | 41 | 9 | 32 | 0.05 | ||||||||||||||||||||||||||||||||
| Divestiture costs | — | 60 | 60 | 13 | 47 | 0.08 | ||||||||||||||||||||||||||||||||
| Russia exit charges | — | 109 | 109 | (2) | 111 | 0.20 | ||||||||||||||||||||||||||||||||
| Total special items | (1,351) | 408 | 408 | 578 | (170) | (0.30) | ||||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 32,878 | (3.6) | % | $ | 6,947 | 21.1 | % | $ | 6,800 | $ | 1,190 | 17.5 | % | $ | 5,607 | $ | 9.88 | (6) | % |
EXHIBIT 99
| Three months ended March 31, 2021 | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 747 | 24.1 | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 65 | |||||||||||||||||||||||||||||||
| Total special items | 65 | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 812 | 26.2 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,396 | $ | 555 | 23.2 | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (331) | (34) | ||||||||||||||||||||||||||||||
| Total special items | (331) | (34) | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 2,065 | $ | 521 | 25.3 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,851 | $ | 1,994 | 22.5 | % | $ | 1,945 | $ | 319 | 16.4 | % | $ | 1,624 | 2.77 | |||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 135 | 135 | 32 | 103 | 0.18 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (331) | (34) | (34) | (8) | (26) | (0.05) | ||||||||||||||||||||||||||
| Total special items | (331) | 101 | 101 | 24 | 77 | 0.13 | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 8,520 | $ | 2,095 | 24.6 | % | $ | 2,046 | $ | 343 | 16.8 | % | $ | 1,701 | $ | 2.90 | Three months ended March 31, 2022 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 627 | 20.6 | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 63 | |||||||||||||||||||||||||||||||
| Total special items | 63 | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 690 | 22.6 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,340 | $ | 464 | 19.8 | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (320) | (16) | ||||||||||||||||||||||||||||||
| Total special items | (320) | (16) | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 2,020 | $ | 448 | 22.2 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,829 | $ | 1,641 | 18.6 | % | $ | 1,603 | $ | 302 | 18.8 | % | $ | 1,299 | 2.26 | |||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 250 | 250 | 25 | 225 | 0.39 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (320) | (16) | (16) | (4) | (12) | (0.02) | ||||||||||||||||||||||||||
| Total special items | (320) | 234 | 234 | 21 | 213 | 0.37 | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 8,509 | $ | 1,875 | 22.0 | % | $ | 1,837 | $ | 323 | 17.5 | % | $ | 1,512 | $ | 2.63 |
EXHIBIT 99
| Three months ended June 30, 2021 | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 661 | 21.8 | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 52 | |||||||||||||||||||||||||||||||
| Total special items | 52 | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 713 | 23.6 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,355 | $ | 506 | 21.5 | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (323) | (44) | ||||||||||||||||||||||||||||||
| Total special items | (323) | (44) | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 2,032 | $ | 462 | 22.7 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,950 | $ | 1,971 | 22.0 | % | $ | 1,938 | $ | 415 | 21.5 | % | $ | 1,524 | $ | 2.59 | ||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 127 | 127 | 30 | 97 | 0.16 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (323) | (44) | (44) | (10) | (34) | (0.05) | ||||||||||||||||||||||||||
| Total special items | (323) | 83 | 83 | 20 | 63 | 0.11 | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 8,627 | $ | 2,054 | 23.8 | % | $ | 2,021 | $ | 435 | 21.6 | % | $ | 1,587 | $ | 2.70 | Three months ended June 30, 2022 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | (707) | (24.2) | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 1,337 | |||||||||||||||||||||||||||||||
| Total special items | 1,337 | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 630 | 21.5 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,268 | $ | 475 | 21.0 | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (318) | (20) | ||||||||||||||||||||||||||||||
| Total special items | (318) | (20) | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 1,950 | $ | 455 | 23.4 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,702 | $ | 110 | 1.3 | % | $ | 60 | $ | (23) | (38.3) | % | $ | 78 | $ | 0.14 | ||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 1,716 | 1,716 | 374 | 1,342 | 2.34 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (318) | (20) | (20) | (6) | (14) | (0.03) | ||||||||||||||||||||||||||
| Total special items | (318) | 1,696 | 1,696 | 368 | 1,328 | 2.31 | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 8,384 | $ | 1,806 | 21.6 | % | $ | 1,756 | $ | 345 | 19.8 | % | $ | 1,406 | $ | 2.45 |
EXHIBIT 99
| Three months ended September 30, 2021 | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 563 | 18.7 | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 60 | |||||||||||||||||||||||||||||||
| Total special items | 60 | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 623 | 20.7 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,327 | $ | 435 | 18.7 | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (321) | (49) | ||||||||||||||||||||||||||||||
| Total special items | (321) | (49) | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 2,006 | $ | 386 | 19.2 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,942 | $ | 1,788 | 20.0 | % | $ | 1,757 | $ | 324 | 18.4 | % | $ | 1,434 | 2.45 | |||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 97 | 97 | 18 | 79 | 0.13 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (321) | (49) | (49) | (11) | (38) | (0.06) | ||||||||||||||||||||||||||
| Total special items | (321) | 48 | 48 | 7 | 41 | 0.07 | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 8,621 | $ | 1,836 | 21.3 | % | $ | 1,805 | $ | 331 | 18.4 | % | $ | 1,475 | $ | 2.52 | Three months ended September 30, 2022 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 652 | 22.5 | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 21 | |||||||||||||||||||||||||||||||
| Total special items | 21 | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 673 | 23.2 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,239 | $ | 475 | 21.2 | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (350) | (65) | ||||||||||||||||||||||||||||||
| Total special items | (350) | (65) | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 1,889 | $ | 410 | 21.7 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,619 | $ | 4,156 | 48.2 | % | $ | 4,132 | $ | 271 | 6.6 | % | $ | 3,859 | 6.77 | |||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 267 | 267 | 57 | 210 | 0.37 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (350) | (65) | (65) | (16) | (49) | (0.09) | ||||||||||||||||||||||||||
| Gain on business divestitures | — | (2,724) | (2,724) | (39) | (2,685) | (4.71) | ||||||||||||||||||||||||||
| Divestiture-related restructuring actions | — | 41 | 41 | 9 | 32 | 0.05 | ||||||||||||||||||||||||||
| Divestiture costs | — | 6 | 6 | 2 | 4 | 0.01 | ||||||||||||||||||||||||||
| Russia exit charges | — | 109 | 109 | (2) | 111 | 0.20 | ||||||||||||||||||||||||||
| Total special items | (350) | (2,366) | (2,366) | 11 | (2,377) | (4.17) | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 8,269 | $ | 1,790 | 21.6 | % | $ | 1,766 | $ | 282 | 15.9 | % | $ | 1,482 | $ | 2.60 |
EXHIBIT 99
| Three months ended December 31, 2021 | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 489 | 17.2 | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | 72 | |||||||||||||||||||||||||||||||
| Total special items | 72 | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 561 | 19.7 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,184 | $ | 373 | 17.1 | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (283) | (8) | ||||||||||||||||||||||||||||||
| Total special items | (283) | (8) | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 1,901 | $ | 365 | 19.2 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,612 | $ | 1,616 | 18.8 | % | $ | 1,564 | $ | 227 | 14.5 | % | $ | 1,339 | 2.31 | |||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 104 | 104 | 24 | 80 | 0.14 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (283) | (8) | (8) | — | (8) | (0.02) | ||||||||||||||||||||||||||
| Total special items | (283) | 96 | 96 | 24 | 72 | 0.12 | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures (a) | $ | 8,329 | $ | 1,712 | 20.5 | % | $ | 1,660 | $ | 251 | 15.0 | % | $ | 1,411 | $ | 2.43 | Three months December 31, 2022 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| (Dollars in millions, except per share amounts) | Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||||||||||||||||||
| Safety and Industrial | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 563 | 20.6 | % | ||||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | (7) | |||||||||||||||||||||||||||||||
| Total special items | (7) | |||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 556 | 20.4 | % | ||||||||||||||||||||||||||||
| Transportation and Electronics | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 2,055 | $ | (441) | (21.4) | % | ||||||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Manufactured PFAS products | (363) | 732 | ||||||||||||||||||||||||||||||
| Total special items | (363) | 732 | ||||||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 1,692 | $ | 291 | 17.1 | % | ||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Updated basis (non-GAAP measure)* | $ | 8,079 | $ | 632 | 7.8 | % | $ | 597 | $ | 62 | 10.5 | % | $ | 541 | 0.98 | |||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Net costs for significant litigation | — | 58 | 58 | 20 | 38 | 0.07 | ||||||||||||||||||||||||||
| Manufactured PFAS products | (363) | 732 | 732 | 147 | 585 | 1.05 | ||||||||||||||||||||||||||
| Divestiture costs | — | 54 | 54 | 11 | 43 | 0.08 | ||||||||||||||||||||||||||
| Total special items | (363) | 844 | 844 | 178 | 666 | 1.20 | ||||||||||||||||||||||||||
| Adjusted amounts (non-GAAP measures) (a) | $ | 7,716 | $ | 1,476 | 19.1 | % | $ | 1,441 | $ | 240 | 16.6 | % | $ | 1,207 | $ | 2.18 |
EXHIBIT 99
| Year ended December 31, 2022 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Sales Change (b) | Organic sales | Acquisitions | Divestitures | Translation | Total sales change | |||||
| Total Company | 1.2 | % | — | % | (0.5) | % | (3.9) | % | (3.2) | % |
| Remove manufactured PFAS products impact | (0.4) | — | — | — | (0.4) | |||||
| Adjusted total Company (non-GAAP measures) (a) | 0.8 | % | — | % | (0.5) | % | (3.9) | % | (3.6) | % |
| Transportation and Electronics | 1.2 | % | — | % | (0.5) | % | (4.6) | % | (3.9) | % |
| Remove manufactured PFAS products impact | (2.2) | — | — | 0.5 | (1.7) | |||||
| Adjusted Transportation and Electronics (non-GAAP measures) (a) | (1.0) | % | — | % | (0.5) | % | (4.1) | % | (5.6) | % |
(a) In addition to reporting financial results in accordance with U.S. GAAP, 3M also provides non-GAAP measures that adjust for the impacts of special items. Special items for the periods presented include the items described in the section entitled “Description of Special Items”. Net sales (and sales change), operating income, segment operating income, operating income margin, income before taxes, provision for income taxes, effective tax rate, net income, and earnings per share are all measures for which 3M provides the reported GAAP measure and a measure adjusted for special items. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company considers these non-GAAP measures in evaluating and managing its operations. The Company believes that discussion of results adjusted for special items is useful to investors in understanding underlying business performance, while also providing additional transparency to the special items. The determination of these items may not be comparable to similarly titled measures used by other companies.
(b) Total sales change is calculated based on reported sales results. The components of sales change include organic local-currency sales, acquisitions, divestitures, and translation. Organic local-currency sales include both organic volume impacts (which excludes acquisition and divestiture impacts) and selling price changes. Acquisition and divestiture impacts are measured separately for the first 12 months post-transaction.
EXHIBIT 99
Adjusted free cash flow and adjusted free cash flow conversion (non-GAAP measures):
| Year ended <br>December 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| Major GAAP Cash Flow Categories (dollars in millions) | 2022 | |||||||
| Net cash provided by (used in) operating activities | $ | 5,591 | ||||||
| Net cash provided by (used in) investing activities | (1,046) | |||||||
| Net cash provided by (used in) financing activities | (5,350) | Adjusted Free Cash Flow (non-GAAP measure) <br>(dollars in millions) | Year ended <br>December 31, | |||||
| --- | --- | --- | --- | --- | ||||
| 2022 | ||||||||
| Net cash provided by (used in) operating activities | $ | 5,591 | ||||||
| Adjustments for special items: | ||||||||
| Net costs for significant litigation after-tax payment impacts | 716 | |||||||
| Divestiture costs after-tax payment impacts | 8 | |||||||
| Divestiture gains - closing cost after tax payment impacts | 27 | |||||||
| Divestiture-related restructuring after-tax payment impacts | 28 | |||||||
| Russia exit charges after-tax payment impacts | 2 | |||||||
| TCJA transition tax payment | 68 | |||||||
| Manufactured PFAS products impact | (36) | |||||||
| Total adjustments for special items | 813 | |||||||
| Adjusted net cash provided by (used in) operating activities (c) | 6,404 | |||||||
| Purchases of property, plant and equipment (PPE) | (1,749) | |||||||
| Manufactured PFAS products impact — removing related purchases of PPE | 175 | |||||||
| Adjusted free cash flow (c) | $ | 4,830 | ||||||
| Adjusted net income attributable to 3M (a) | $ | 5,607 | ||||||
| Adjusted free cash flow conversion (c) | 86 | % |
(c) Adjusted net cash provided by (used in) operating activities, adjusted free cash flow and adjusted free cash flow conversion are not defined under U.S. GAAP. Therefore, they should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines adjusted net cash provided by (used in) operating activities as net cash provided by operating activities, adjusted for special items. The Company defines adjusted free cash flow as adjusted net cash provided by (used in) operating activities less purchases of property, plant and equipment (PPE) adjusted for the estimated impact of such purchases associated with manufactured PFAS products activity. Cash payments associated with special items in the determination of adjusted net cash provided by (used in) operating activities are reflected net of applicable tax using the U.S. statutory corporate tax rate during the period of payment. It should not be inferred that the entire adjusted free cash flow amount is available for discretionary expenditures. The Company defines adjusted free cash flow conversion as adjusted free cash flow divided by net income attributable to 3M, adjusted for special items. Special items for the periods presented include the items described in the section entitled “Description of Special Items”. The Company believes adjusted net cash provided by (used in) operating activities, adjusted free cash flow and adjusted free cash flow conversion all are meaningful to investors as they are useful measures of performance and the Company uses these measures as an indication of the strength of the Company and its ability to generate cash.
EXHIBIT 99
Adjusted EBITDA and adjusted EBITDA margin (non-GAAP measures):
| Year ended December 31, | ||||||
|---|---|---|---|---|---|---|
| Adjusted EBITDA (non-GAAP measure) (dollars in millions) | 2022 | 2021 | ||||
| Adjusted net sales (a) | $ | 32,878 | $ | 34,097 | ||
| Net income attributable to 3M | 5,777 | 5,921 | ||||
| Add/(subtract): | ||||||
| Net income/(loss) attributable to noncontrolling interest | 14 | 8 | ||||
| (Income)/loss from unconsolidated subsidiaries, net of taxes | (11) | (10) | ||||
| Provision for income taxes | 612 | 1,285 | ||||
| Other expense/(income): | ||||||
| Interest (income)/expense | 395 | 462 | ||||
| Pension & OPEB non-service cost (benefit) | (248) | (297) | ||||
| Depreciation and amortization (DA) expense | 1,831 | 1,915 | ||||
| Adjustments for special items: | ||||||
| Net costs for significant litigation | 2,291 | 463 | ||||
| Manufactured PFAS products impact: | ||||||
| Remove manufactured PFAS products operating (income) loss | 631 | (135) | ||||
| Subtract PFAS-related amount include in DA above | (68) | (56) | ||||
| Gain on business divestitures | (2,724) | — | ||||
| Divestiture-related restructuring actions | 41 | — | ||||
| Divestiture costs | 60 | — | ||||
| Russia exit charges | 109 | — | ||||
| Total special items | 340 | 272 | ||||
| Adjusted EBITDA (d) | $ | 8,710 | $ | 9,556 | ||
| Adjusted EBITDA margin (d) | 26.5 | % | 28.0 | % |
(d) Adjusted EBITDA and adjusted EBITDA margin are not defined under U.S. GAAP. Therefore, adjusted EBITDA and adjusted EBITDA margin should not be considered a substitute for other measures prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines adjusted EBITDA as net income attributable to 3M, adjusted for net income/(loss) attributable to noncontrolling interest, (income)/loss from unconsolidated subsidiaries, provision for income taxes, other expense/(income), depreciation and amortization expense, and special items. The Company defines adjusted EBITDA margin as adjusted EBITDA divided by net sales, adjusted for special items. Special items for the periods presented include the items described in the section entitled “Description of Special Items”. The Company considers these non-GAAP measures in evaluating and managing the Company’s operations. The Company believes adjusted EBITDA and adjusted EBITDA margin are meaningful to investors as they provide useful analyses of ongoing underlying operating trends.
Description of Special Items:
In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides various non-GAAP measures that incorporate adjustments for the impacts of special items. Special items incorporated in the preparation of these non-GAAP measures for the periods presented include the items described below. These items align with those included in the section “Supplemental Financial Information — Non-GAAP Measures, Description of Special Items” within the Form 8-K dated January 24, 2023 which is largely repeated below, with the exception of the expansion of the extent of adjustment relative to PFAS manufactured products to include the sales and estimates of income (including exit costs) and associated activity regarding manufactured PFAS products that 3M plans to exit by the end of 2025.
Net costs for significant litigation:
•These relate to 3M's respirator mask/asbestos, PFAS-related other environmental, and Combat Arms Earplugs matters. Net costs include the impacts of changes in accrued liabilities, external legal fees, and insurance recoveries, along with the associated tax impacts. Prior to initiating voluntary chapter 11 bankruptcy proceedings in July 2022, net costs related to Combat Arms Earplugs and Aearo-respirator mask/asbestos matters along with non-Aearo respirator mask/asbestos matters were reflected as special items in the Safety and Industrial business segment. During the bankruptcy period, net costs related to Combat Arms Earplugs and Aearo-respirator mask/asbestos matters are reflected as corporate special items in Corporate and Unallocated. In 2022, 3M made payments of approximately $907 million related to net costs for significant litigation.
EXHIBIT 99
Divestiture costs:
•These include costs related to separating and divesting substantially an entire business segment of 3M following public announcement of its intended divestiture. In the 2022, 3M made payments of approximately $11 million associated with divestiture costs.
Gain/loss on sale of businesses divestitures:
•In 2022, 3M recorded a pre-tax gain of $2.7 billion ($2.7 billion after tax) related to the split-off and combination of its Food Safety business with Neogen Corporation. In 2022, 3M made payments of approximately $34 million related to closing costs of the transaction that were part of the determination of the gain thereon.
Divestiture-related restructuring actions:
•In the third quarter of 2022, following the split-off of the Food Safety business, management approved and committed to undertake certain restructuring actions addressing corporate functional costs across 3M in relation to the magnitude of amounts previously allocated to the divested business. In 2022, 3M made payments of approximately $34 million and associated with divestiture-related restructuring actions.
Russia exit charges:
•In 2022, 3M recorded a charge primarily related to impairment of net assets in Russia in connection with management’s committed exit and disposal plan. In 2022, 3M made payments of approximately $3 million related to Russia exit charges.
Enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA)
•In 2022, 3M made payments of approximately $68 million related to the transition tax expense incurred as a result of the 2017 enactment of the TCJA.
Manufactured PFAS products:
•These amounts relate to sales and estimates of income and associated activity regarding manufactured PFAS products that 3M plans to exit by the end of 2025 included within the Transportation and Electronics business segment. 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. Relative to the impact of the activity of manufactured PFAS products on cash provided by (used in) operating activities, amounts are based on estimates of associated income, depreciation/amortization, and certain changes in working capital.
17