10-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

Commission file number 1-3285

3M COMPANY

State of Incorporation: Delaware I.R.S. Employer Identification No. 41-0417775

Principal executive offices: 3M Center, St. Paul, Minnesota 55144

Telephone number: (651) 733-1110

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, Inc.
	MMM	Chicago Stock Exchange, Inc.
1.500% Notes due 2026	MMM26	New York Stock Exchange, Inc.
Floating Rate Notes due 2020		New York Stock Exchange, Inc.
0.375% Notes due 2022	MMM22A	New York Stock Exchange, Inc.
0.950% Notes due 2023	MMM23	New York Stock Exchange, Inc.
1.750% Notes due 2030	MMM30	New York Stock Exchange, Inc.
1.500% Notes due 2031	MMM31	New York Stock Exchange, Inc.

Note: The common stock of the registrant is also traded on the SWX Swiss Exchange.

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  ☐     No  ☒

The aggregate market value of voting stock held by nonaffiliates of the registrant, computed by reference to the closing price and shares outstanding, was approximately $91.3 billion as of January 31, 2020 (approximately $99.7 billion as of June 30, 2019, the last business day of the registrant’s most recently completed second quarter).

Shares of common stock outstanding at January 31, 2020: 575.6 million

DOCUMENTS INCORPORATED BY REFERENCE

Parts of the Company’s definitive proxy statement (to be filed pursuant to Regulation 14A within 120 days after Registrant’s fiscal year-end of December 31, 2019) for its annual meeting to be held on May 12, 2020, are incorporated by reference in this Form 10-K in response to Part III, Items 10, 11, 12, 13 and 14.

3M COMPANY

FORM 10-K

For the Year Ended December 31, 2019

Pursuant to Part IV, Item 16, a summary of Form 10-K content follows, including hyperlinked cross-references (in the EDGAR filing). This allows users to easily locate the corresponding items in Form 10-K, where the disclosure is fully presented. The summary does not include certain Part III information that will be incorporated by reference from the proxy statement, which will be filed after this Form 10-K filing.

		Beginning Page
PART I
ITEM 1	Business	4
ITEM 1A	Risk Factors	10
ITEM 1B	Unresolved Staff Comments	13
ITEM 2	Properties	13
ITEM 3	Legal Proceedings	13
ITEM 4	Mine Safety Disclosures	13
PART II
ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
ITEM 6	Selected Financial Data	15
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	MD&A is designed to provide a reader of 3M’s financial statements with a narrative from the perspective of management. 3M’s MD&A is presented in eight sections:
	Overview	16
	Results of Operations	25
	Performance by Business Segment	30
	Performance by Geographic Area	37
	Critical Accounting Estimates	37
	New Accounting Pronouncements	41
	Financial Condition and Liquidity	41
	Financial Instruments	49
ITEM 7A	Quantitative and Qualitative Disclosures About Market Risk	50
ITEM 8	Financial Statements and Supplementary Data	51
	Index to Financial Statements	51
	Management’s Responsibility for Financial Reporting	51
	Management’s Report on Internal Control Over Financial Reporting	52
	Report of Independent Registered Public Accounting Firm	53
	Consolidated Statement of Income for the years ended December 31, 2019, 2018 and 2017	56
	Consolidated Statement of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017	57
	Consolidated Balance Sheet at December 31, 2019 and 2018	58

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		Beginning Page
ITEM 8	Financial Statements and Supplementary Data (continued)
	Consolidated Statement of Changes in Equity for the years ended December 31, 2019, 2018 and 2017	59
	Consolidated Statement of Cash Flows for the years ended December 31, 2019, 2018 and 2017	60
	Notes to Consolidated Financial Statements	61
	Note 1. Significant Accounting Policies	61
	Note 2. Revenue	69
	Note 3. Acquisitions and Divestitures	71
	Note 4. Goodwill and Intangible Assets	74
	Note 5. Restructuring Actions	76
	Note 6. Supplemental Income Statement Information	78
	Note 7. Supplemental Balance Sheet Information	79
	Note 8. Supplemental Equity and Comprehensive Income Information	80
	Note 9. Supplemental Cash Flow Information	81
	Note 10. Income Taxes	82
	Note 11. Marketable Securities and Held-to-Maturity Debt Securities	85
	Note 12. Long-Term Debt and Short-Term Borrowings	86
	Note 13. Pension and Postretirement Benefit Plans	89
	Note 14. Derivatives	98
	Note 15. Fair Value Measurements	106
	Note 16. Commitments and Contingencies	109
	Note 17. Leases	124
	Note 18. Stock-Based Compensation	127
	Note 19. Business Segments and Geographic Information	130
	Note 20. Quarterly Data (Unaudited)	134
ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	135
ITEM 9A	Controls and Procedures	135
ITEM 9B	Other Information	135
PART III
ITEM 10	Directors, Executive Officers and Corporate Governance	136
ITEM 11	Executive Compensation	136
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	137
ITEM 13	Certain Relationships and Related Transactions, and Director Independence	137
ITEM 14	Principal Accounting Fees and Services	137
PART IV
ITEM 15	Exhibits, Financial Statement Schedules	138
ITEM 16	Form 10-K Summary	140

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3M COMPANY

ANNUAL REPORT ON FORM 10-K

For the Year Ended December 31, 2019

PART I

Item 1. Business.

3M Company was incorporated in 1929 under the laws of the State of Delaware to continue operations begun in 1902. The Company’s ticker symbol is MMM. As used herein, the term “3M” or “Company” includes 3M Company and its subsidiaries unless the context indicates otherwise. In this document, for any references to Note 1 through Note 20, refer to the Notes to Consolidated Financial Statements in Item 8.

Available Information

The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC. The public can obtain any documents that the Company files with the SEC at http://www.sec.gov. The Company files annual reports, quarterly reports, proxy statements and other documents with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934 (Exchange Act).

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

General

3M is a diversified technology company with a global presence in the following businesses: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. 3M is among the leading manufacturers of products for many of the markets it serves. Most 3M products involve expertise in product development, manufacturing and marketing, and are subject to competition from products manufactured and sold by other technologically oriented companies.

At December 31, 2019, the Company employed 96,163 people (full-time equivalents), with 39,662 employed in the United States and 56,501 employed internationally.

Business Segments

As described in Notes 4 and 19, effective in the second quarter of 2019, the Company realigned its former five business segments into four to enable the Company to better serve global customers and markets. In addition, certain product lines were moved to better align with their respective end customers. Earlier in the first quarter of 2019, the Company changed its business segment reporting in its continuing effort to improve the alignment of businesses around markets and customers. These changes included the realignment of certain customer account activity in various countries (affecting dual credit reporting), creation of the Closure and Masking Systems and Medical Solutions divisions, and certain other actions that impacted segment reporting. Business segment information presented herein reflects the impact of these changes for all periods presented. 

3M manages its operations in four business segments. The reportable segments are Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. 3M’s four business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. Financial information and other disclosures relating to 3M’s business segments and operations in major geographic areas are provided in the Notes to Consolidated Financial Statements.

Safety and Industrial Business: This segment includes businesses that serve the global industrial, electrical and safety markets. This business segment consists of personal safety, industrial adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket, and roofing granules. This segment also includes the Communication Markets Division (which was substantially sold in 2018) and the refrigeration filtration product lines (within Other Safety and Industrial).

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This segment’s industrial offerings include tapes, a wide variety of coated, non-woven and bonded abrasives, adhesives, sealants, specialty materials, closure systems for personal hygiene products, and acoustic systems products. 3M is also a leading global supplier of precision grinding technology serving customers in the area of hard-to-grind precision applications in industrial, automotive, aircraft and cutting tools. Major products include vinyl, polyester, foil and specialty industrial tapes and adhesives; Scotch® Masking Tape, Scotch® Filament Tape and Scotch® Packaging Tape; packaging equipment; 3M™ VHB™ Bonding Tapes; conductive, low surface energy, sealants, hot melt, spray and structural adhesives; reclosable fasteners; label materials for durable goods; coated, nonwoven and microstructured surface finishing and grinding abrasives for the industrial market. In the first quarter of 2018, 3M divested a polymer additives compounding business and in May 2018 divested an abrasives glass products business.

This segment’s electrical offerings include infrastructure protection and renewable energy solutions. This segment serves the world’s electrical markets, including electrical utilities, electrical construction, maintenance and repair, original equipment manufacturers (OEM), outside plant and enterprise, as well as aerospace, military, automotive and medical markets, with products that enable the efficient transmission of electrical power. Products in this segment include pressure sensitive tapes and resins, electrical insulation, as well as the 3M™ Aluminum Conductor Composite Reinforced (ACCR) electrical power cable that increases transmission capacity for existing power lines. This segment also includes renewable energy component solutions for the solar and wind power industries, as well as infrastructure products solutions that provide municipalities both protection and detection solutions for electrical, oil, natural gas, water, rebar and other infrastructure assets. In June 2018, 3M completed the sale of substantially all of its Communication Markets Division, with the remaining telecommunications systems services portion based in Germany sold in December 2018.

This segment’s safety market offerings include personal protection products, such as certain disposable and reusable respirators, fall protection equipment, personal protective equipment, head and face protection, body protection, hearing protection and protective eyewear, plus reflective materials that are widely used on apparel, footwear and accessories, enhancing visibility in low-light situations. Other segment products include natural and color-coated mineral granules for asphalt shingles. In October 2017, 3M completed the acquisition of the underlying legal entities and associated assets of Scott Safety, a premier manufacturer of innovative products, including self-contained breathing apparatus systems, gas and flame detection instruments, and other safety devices that complement 3M’s personal safety portfolio. In January 2017, 3M sold the assets of its safety prescription eyewear business. In February 2018, 3M sold certain personal safety product offerings primarily focused on noise, environmental, and heat stress monitoring. In August 2019, 3M completed the sale of its gas and flame detection business.

Transportation and Electronics Business: This segment includes businesses that serve global transportation and electronic original equipment manufacturer (OEM) customers. This business segment consists of electronics (display materials and systems, electronic materials solutions), automotive and aerospace, commercial solutions, advanced materials, and transportation safety.

This segment’s transportation-related businesses include components and products that are used in the manufacture, repair and maintenance of automotive, marine, aircraft and specialty vehicles; fluoroelastomers for seals, tubes and gaskets in engines; Thinsulate™ Acoustic Insulation and components for cabin noise reduction and catalytic converters; functional and decorative graphics; abrasion-resistant films; adhesives; sealants; masking tapes; fasteners and tapes for attaching nameplates, trim, moldings, interior panels and carpeting; coated, nonwoven and microstructured finishing and grinding abrasives; structural adhesives; and other specialty materials. In transportation safety, 3M provides reflective sheeting used on highway signs, construction work-zone devices, trucks and other vehicles, and also provides pavement marking systems. In May 2017, 3M completed the divestiture of its identity management business. In June 2017, 3M also completed the sale of its tolling and automated license/number plate recognition business and in October 2017, sold its electronic monitoring business.

This segment’s electronics solutions include the display materials and systems business, which provides films that serve numerous market segments of the electronic display industry. 3M provides distinct products for five market segments, including products for: 1) computer monitors 2) televisions 3) handheld devices such as cellular phones and tablets 4) notebook PCs and 5) automotive displays. This segment also provides computer screen filters that address display light control, privacy, and glare reduction needs. Major electronics products also include packaging and interconnection devices; high performance fluids and abrasives used in the manufacture of computer chips, and for cooling electronics and lubricating computer hard disk drives; and high-temperature and display tapes. Flexible circuits use electronic packaging and interconnection technology, providing more connections in less space, and are used in ink-jet printer cartridges, cell phones and electronic devices. This segment also includes touch systems products, including touch screens, touch monitors, and touch sensor components.

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Other businesses within this segment include major commercial products such as films, inks, and related products used to produce graphics for vehicles, signs and interior surfaces; spill-control sorbents; nonwoven abrasive materials for floor maintenance and commercial cleaning; and floor matting. 3M also develops and produces advanced technical ceramics for demanding applications in the automotive, oil and gas, solar, industrial, electronics and defense industries.

Health Care Business: Products and services provided to these and other markets include medical and surgical supplies, skin health and infection prevention products, oral care solutions (dental and orthodontic products), separation and purification sciences, health information systems, inhalation and transdermal drug delivery systems, and food safety products.

In medical solutions, 3M is a supplier of medical tapes, dressings, wound closure products, and orthopedic casting materials, in addition to acute wound care, skin integrity and disinfecting port protection products. 3M also markets a variety of surgical drapes, masks and preps, electrodes, stethoscopes, as well as sterilization assurance equipment and patient warming solutions designed to prevent hypothermia in surgical settings. In our drug delivery systems business, our products include metered-dose inhalers and transdermal skin patches and related components. This segment also includes a comprehensive line of filtration products for the separation, clarification and purification of fluids and gases. Oral care solutions include restoratives, adhesives, finishing and polishing products, crowns, impression materials, preventive sealants, professional tooth whiteners, prophylaxis and orthodontic appliances, as well as digital workflow solutions to transform traditional impression and analog processes. In health information systems, 3M develops and markets computer software for hospital coding, recording, and data classification and provides related consulting services. 3M provides food safety products that make it faster and easier for food processors to test the microbiological quality of food. In September 2017, 3M purchased all of the ownership interests of Elution Technologies, LLC, a Vermont-based manufacturer of test kits that help enable food and beverage companies ensure their products are free from certain potentially harmful allergens such as peanuts, soy or milk. In February 2019, 3M completed the acquisition of the technology business of M*Model. M*Model’s technology business provides cloud-based, conversational artificial intelligence powered systems that expand 3M’s Health Information Systems business. In October, 2019, 3M completed the acquisition of Acelity Inc. and its KCI subsidiaries. Acelity is a leading global medical technology company focused on advanced wound care and specialty surgical applications marketed under the KCI brand that expand 3M’s presence in advanced and surgical wound care within 3M’s medical solutions division.

Consumer Business: This business serves global consumers and consists of home improvement, stationery and office supplies, home care, and consumer health care. This segment also includes, within the Construction and Home Improvement Division, certain retail auto care product lines. Products in this segment include office supply products, stationery products, home improvement products (do-it-yourself), home care products, protective material products, certain consumer retail personal safety products, and consumer health care products.

Major consumer products include Scotch® brand products, such as Scotch® Magic™ Tape, Scotch® Glue Stick and Scotch® Cushioned Mailer; Post-it® Products, such as Post-it® Flags, Post-it® Extreme Notes, Post-it® Note Pads, Post-it® Labeling & Cover-up Tape, and Post-it® Pop-up Notes and Dispensers; home improvement products, including ScotchBlue™ painter tapes, surface-preparation and wood-finishing materials, Command™ Adhesive Products and Filtrete™ Filters for furnaces and air conditioners and Filtrete™ Room Air Purifiers; home care products, including Scotch-Brite® Scour Pads, Scotch-Brite® Scrub Sponges, Scotch-Brite® Microfiber Cloth products, O-Cel-O™ Sponges; protective material products, such as Scotchgard™ Fabric Protectors; certain maintenance-free respirators; certain consumer retail personal safety products, including safety glasses, hearing protectors, and 3M Thinsulate™ Insulation, which is used in jackets, pants, gloves, hats and boots to keep people warm; Nexcare™ Adhesive Bandages; and ACE® branded (and related brands) elastic bandage, supports and thermometer product lines. Retail auto care product offerings include paint finishing and detailing products, including a complete system of cleaners, dressings, polishes, waxes and other products.

Distribution

3M products are sold through numerous distribution channels, including directly to users and through numerous e-commerce and traditional wholesalers, retailers, jobbers, distributors and dealers in a wide variety of trades in many countries around the world. Management believes the confidence of wholesalers, retailers, jobbers, distributors and dealers in 3M and its products — a confidence developed through long association with skilled marketing and sales representatives — has contributed significantly to 3M’s position in the marketplace and to its growth.

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Research and Patents

Research and product development constitutes an important part of 3M’s activities and has been a major driver of 3M’s sales and profit growth. Research, development and related expenses totaled $1.911 billion in 2019, $1.821 billion in 2018 and $1.870 billion in 2017. Research and development, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.253 billion in 2019, $1.253 billion in 2018 and $1.352 billion in 2017. Related expenses primarily include technical support; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments.

The Company’s products are sold around the world under various trademarks. The Company also owns, or holds licenses to use, numerous U.S. and foreign patents. The Company’s research and development activities generate a steady stream of inventions that are covered by new patents. Patents applicable to specific products extend for varying periods according to the date of patent application filing or patent grant and the legal term of patents in the various countries where patent protection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends upon the type of patent, the scope of its coverage and the availability of legal remedies in the country.

The Company believes that its patents provide an important competitive advantage in many of its businesses. In general, no single patent or group of related patents is in itself essential to the Company as a whole or to any of the Company’s business segments.

Raw Materials

In 2019, the Company experienced raw material price inflation across many material markets in all geographies. In response, the Company continued to deploy productivity projects to minimize the impact of raw material inflation and market supply challenges, including input management, reformulations, and multi-sourcing activities. These succeeded in partially offsetting the overall raw material headwinds experienced throughout the year. To date, the Company is receiving sufficient quantities of all raw materials to meet its reasonably foreseeable production requirements. It is difficult to predict future shortages of raw materials or the impact any such shortages would have. 3M has avoided disruption to its manufacturing operations through careful management of existing raw material inventories, strategic relationships with key suppliers, and development as well as qualification of additional supply sources. 3M manages spend category price risks through negotiated supply contracts, price protection agreements and commodity price swaps. In addition, 3M evaluates suppliers’ conformance with environmental and social compliance requirements.

Environmental Law Compliance

3M’s manufacturing operations are affected by national, state and local environmental laws around the world. 3M has made, and plans to continue making, necessary expenditures for compliance with applicable laws. 3M is also involved in remediation actions relating to environmental matters from past operations at certain sites (refer to “Environmental Matters and Litigation” in Note 16, Commitments and Contingencies).

Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities for anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company’s commitment to a plan of action, or approval by regulatory agencies. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives.

In 2019, 3M expended approximately $59 million for capital projects related to protecting the environment. This amount excludes expenditures for remediation actions relating to existing matters caused by past operations that do not contribute to current or future revenues, which are expensed. Capital expenditures for environmental purposes have included pollution control devices — such as wastewater treatment plant improvements, scrubbers, containment structures, solvent recovery units and thermal oxidizers — at new and existing facilities constructed or upgraded in the normal course of business. The Company places consistent emphasis on environmental responsibility. While capital expenditures (other than for remediation projects) for known projects are presently expected to be approximately $150 million to $220 million over the next two years for new or expanded programs to build facilities or modify manufacturing processes to minimize waste and reduce emissions, 3M cannot predict with certainty whether future costs of

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such cleanup activities, capital expenditures or operating costs for environmental compliance will have a material effect on its capital expenditures, earnings or competitive position.

Information about our Executive Officers

Following is a list of the executive officers of 3M, and their age, present position, the year elected to their present position and other positions they have held during the past five years. No family relationships exist among any of the executive officers named, nor is there any undisclosed arrangement or understanding pursuant to which any person was selected as an officer. This information is presented in the table below as of the date of the 10-K filing (February 6, 2020).

Name	Age	Present Position	Year Elected to Present Position	Other Positions Held During 2015-2019
Michael F. Roman	60	Chairman of the Board, President and Chief Executive Officer	2019	Chief Executive Officer, 2018-2019 Chief Operating Officer and Executive Vice President, 2017-2018 Executive Vice President, Industrial Business Group, 2014-2017
John P. Banovetz	52	Senior Vice President, Research and Development and Chief Technology Officer	2017	Managing Director, DACH Region, 2016-2017 Vice President, Corporate Research Laboratory, Research and Development, 2015-2016 Global Business Director, Industrial Adhesives and Tapes Division, 2012-2015
Julie L. Bushman	58	Executive Vice President, International Operations	2017	Senior Vice President, Business Transformation and Information Technology, 2013-2017
Ivan K. Fong	58	Senior Vice President, Legal Affairs and General Counsel	2012
Nicholas C. Gangestad	55	Senior Vice President and Chief Financial Officer	2014
Eric D. Hammes	45	Senior Vice President, Enterprise Operations	2019	Senior Vice President, Manufacturing & Supply Chain, 2019 Senior Vice President, Business Transformation & Information Technology, 2017-2019 Vice President, Corporate Controller and Chief Accounting Officer, 2014-2017
Paul A. Keel	50	Executive Vice President, Consumer Business Group	2019	Senior Vice President, Business Development and Marketing-Sales, 2017-2019 Senior Vice President, Supply Chain, 2014-2017
Ashish K. Khandpur	52	Executive Vice President, Transportation & Electronics Business Group	2019	Executive Vice President, Electronics & Energy Business Group, 2017-2019 Senior Vice President, Research and Development, and Chief Technology Officer, 2014-2017
Kristen M. Ludgate	57	Senior Vice President, Human Resources	2018	Senior Vice President, Corporate Communications and Enterprise Services, 2018 Vice President, Global Human Resources Business Operations, Human Resources, 2017-2018 Vice President, Associate General Counsel and Chief Compliance Officer, Compliance and Business Conduct, 2015-2017 Associate General Counsel, Labor and Employment, Office of General Counsel, 2013-2015
Mojdeh Poul	57	Executive Vice President, Health Care Business Group	2019	Executive Vice President, Safety and Graphics Business Group, 2018-2019 President and General Manager, 3M Canada, 2016-2018 Vice President and General Manager, Infection Prevention Division, 2014-2016

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Name	Age	Present Position	Year Elected to Present Position	Other Positions Held During 2015-2019
Denise R. Rutherford	57	Senior Vice President, Corporate Affairs	2019	Vice President, Research & Development and Commercialization, Industrial Business Group, 2017-2019 Managing Director, 3M Japan, 2016-2017 Vice President, Greater China Area and Managing Director, 3M China, 2015-2016 Vice President, Latin America, 2013-2015
Stephen M. Shafer	44	Senior Vice President, 3M Strategy & Business Development	2019	Senior Vice President, Business Development and Marketing-Sales, 2019 Vice President, Greater China Area and Managing Director, 3M China, 2016-2019 Vice President, Business Transformation, 2014-2016
Ty R. Silberhorn	52	Senior Vice President, Business Transformation and Information Technology	2019	Vice President and General Manager, Industrial Adhesives and Tapes Division, 2015-2019
Michael G. Vale	53	Executive Vice President, Safety and Industrial Business Group	2019	Executive Vice President, Health Care Business Group, 2016-2019 Executive Vice President, Consumer Business Group, 2012-2016

Cautionary Note Concerning Factors That May Affect Future Results

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may also make forward-looking statements in other reports filed with the Securities and Exchange Commission, in materials delivered to shareholders and in press releases. In addition, the Company’s representatives may from time to time make oral forward-looking statements.

Forward-looking statements relate to future events and typically address the Company’s expected future business and financial performance. Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” “forecast” and other words and terms of similar meaning, typically identify such forward-looking statements. In particular, these include, among others, statements relating to:

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

● worldwide economic, political, regulatory, capital markets and other external conditions, such as interest rates, foreign currency exchange rates, financial conditions of our suppliers and customers, trade restrictions such as tariffs in addition to retaliatory counter measures, and natural and other disasters or climate change affecting the operations of the Company or our suppliers and customers,

● new business opportunities, product development, and future performance or results of current or anticipated products,

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

● liabilities related to certain fluorochemicals and the outcome of contingencies, such as legal and regulatory proceedings,

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

● future availability of and access to credit markets,

● pension and postretirement obligation assumptions and future contributions,

● asset impairments,

● tax liabilities,

● information technology security, and

● the effects of changes in tax (including the Tax Cuts and Jobs Act), environmental and other laws and regulations in the United States and other countries in which we operate.

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The Company assumes no obligation to update or revise any forward-looking statements.

Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. Important information as to these factors can be found in this document, including, among others, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings of “Overview,” “Financial Condition and Liquidity,” and annually in “Critical Accounting Estimates.” Discussion of these factors is incorporated by reference from Part I, Item 1A, “Risk Factors,” of this document, and should be considered an integral part of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For additional information concerning factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Form 10-K, 10-Q and 8-K filed with the SEC from time to time.

Item 1A. Risk Factors

Provided below is a cautionary discussion of what we believe to be the most important risk factors applicable to the Company. Discussion of these factors is incorporated by reference into and considered an integral part of Part I, Item 2, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.”

* Results are impacted by the effects of, and changes in, worldwide economic, political, regulatory, capital markets and other external conditions. The Company operates in more than 70 countries and derives approximately 60 percent of its revenues from outside the United States. The Company’s business is subject to global competition and geopolitical risks and has been and will in the future be adversely affected by factors in the United States and other countries that are beyond its control, such as slower economic growth, disruptions in financial markets, economic downturns in the form of either contained or widespread recessionary conditions, inflation, elevated unemployment levels, sluggish or uneven recovery, government actions impacting international trade agreements, imposing trade restrictions such as tariffs, and retaliatory counter measures, government deficit reduction and other austerity measures in specific countries or regions, or in the various industries in which the Company operates; social, political or labor conditions in specific countries or regions; natural and other disasters, including public health crises, such as pandemics and epidemics, affecting the operations of the Company or its customers and suppliers; or adverse changes in the availability and cost of capital, interest rates, tax rates, tax laws, or exchange control, ability to expatriate earnings and other regulations in the jurisdictions in which the Company operates. Natural occurrences and human activities are increasingly releasing greenhouse gases into the atmosphere, contributing to changes in the earth’s climate. Climate change, as well as related environmental and social regulations, may negatively impact the Company or its customers and suppliers, in terms of availability and cost of natural resources, sources and supply of energy, product demand and manufacturing, and the health and well-being of individuals and communities in which we operate.

* The Company faces liabilities related to certain fluorochemicals, which could adversely impact our results.

As previously reported, the Company has been voluntarily cooperating with various local, state, federal (primarily the U.S. Environmental Protection Agency (EPA)), and international agencies in their review of the environmental and health effects of a broad group of perfluoroalkyl and polyfluoroalkyl substances produced by the Company, collectively known as “PFAS.” The PFAS group contains several categories and classes of durable chemicals and materials with properties that include oil, water, temperature, chemical and fire resistance, as well as electrical insulating properties. The strength of the carbon-fluorine bond also means that these compounds do not easily degrade. These characteristics have made PFAS critical to the manufacture of electronic devices such as cell phones, tablets and semi-conductors. They are also used to help prevent infections in products like surgical gowns and drapes. Commercial aircraft and low-emissions vehicles also rely on PFAS technology. PFAS compounds are manufactured by various companies, including 3M, and are used in everyday products. As science and technology evolve and advance, and in response to evolving knowledge and the understanding that PFAS compounds had the potential to build up over time, 3M announced in 2000 that we would voluntarily phase out production of perfluorooctanoate (PFOA) and perfluorooctane sulfonate (PFOS) globally as a precautionary measure. We phased out of materials used to produce certain repellants and surfactant products, with most of these activities in the U.S. completed by the end of 2002. Phased out products included Aqueous Film Forming Foam (AFFF) and coatings for food packaging, for example. 3M currently is defending lawsuits concerning various PFAS-related products and chemistries, and is subject to unasserted and asserted claims and governmental regulatory proceedings and inquiries related to the production and use of PFAS in a variety of jurisdictions, as discussed in Note 16, “Commitments and Contingencies,” within the Notes to Consolidated Financial Statements. An adverse outcome in any one or more of these matters could be material to our financial results. For example, we recorded a pre-tax charge of $897 million, inclusive of legal fees and other related obligations, in the first quarter of 2018 with respect to the settlement of a matter brought by the State of Minnesota involving the presence of PFAS in the groundwater, surface

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water, fish or other aquatic life, and sediments in the state. Governmental inquiries or lawsuits involving PFAS could lead to our incurring liability for damages or other costs, civil or criminal proceedings, the imposition of fines and penalties, or other remedies, as well as restrictions on or added costs for our business operations going forward, including in the form of restrictions on discharges at our manufacturing facilities or otherwise.

* The Company’s future results may be affected by various asserted and unasserted legal and regulatory proceedings and legal compliance risks, including those involving product liability, antitrust, intellectual property, environmental, the U.S. Foreign Corrupt Practices Act and other anti-bribery laws, U.S. trade sanctions compliance, regulations of the U.S. Food and Drug Administration (FDA) and similar foreign agencies, U.S. federal healthcare program-related laws and regulations including the False Claims Act, anti-kickback laws, the Sunshine Act, or other matters. The outcome of these legal proceedings may differ from the Company’s expectations because the outcomes of litigation, including regulatory matters, are often difficult to reliably predict. Although the Company maintains general liability insurance, the amount of liability that may result from certain of these risks may not always be covered by, or could exceed, the applicable insurance coverage. Various factors or developments can lead the Company to change current estimates of liabilities and related insurance receivables where applicable, or make such estimates for matters previously not susceptible of reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments or changes in applicable law. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in any particular period. In addition, negative publicity related to product liability, environmental, health and safety matters involving the Company may negatively impact the Company’s reputation. For a more detailed discussion of the legal proceedings involving the Company and the associated accounting estimates, see the discussion in Note 16, “Commitments and Contingencies,” within the Notes to Consolidated Financial Statements.

* The Company’s results are affected by competitive conditions and customer preferences. Demand for the Company’s products, which impacts revenue and profit margins, is affected by (i) the development and timing of the introduction of competitive products; (ii) the Company’s response to downward pricing to stay competitive; (iii) changes in customer order patterns, such as changes in the levels of inventory maintained by customers and the timing of customer purchases which may be affected by announced price changes, changes in the Company’s incentive programs, or the customer’s ability to achieve incentive goals; (iv) changes in customers’ preferences for our products, including the success of products offered by our competitors, and changes in customer designs for their products that can affect the demand for some of the Company’s products; and (v) changes in the business environment related to disruptive technologies, such as artificial intelligence, block-chain, expanded analytics and other enhanced learnings from increasing volume of available data.

* Foreign currency exchange rates and fluctuations in those rates may affect the Company’s ability to realize projected growth rates in its sales and earnings. Because the Company’s financial statements are denominated in U.S. dollars and approximately 60 percent of the Company’s revenues are derived from outside the United States, the Company’s results of operations and its ability to realize projected growth rates in sales and earnings could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies.

* The Company’s growth objectives are largely dependent on the timing and market acceptance of its new product offerings, including its ability to continually renew its pipeline of new products and to bring those products to market. This ability is subject to difficulties or delays in product development, such as the inability to identify viable new products, obtain adequate intellectual property protection, or gain market acceptance of new products. There are no guarantees that new products will prove to be commercially successful.

* The Company’s future results are subject to fluctuations in the costs and availability of purchased components, compounds, raw materials and energy, including oil and natural gas and their derivatives, due to shortages, increased demand, supply interruptions, currency exchange risks, natural disasters and other factors. The Company depends on various components, compounds, raw materials, and energy (including oil and natural gas and their derivatives) supplied by others for the manufacturing of its products. Supplier relationships have been and could be interrupted in the future due to natural and other disasters and other events, or be terminated. Any sustained interruption in the Company’s receipt of adequate supplies could have a material adverse effect on the Company. In addition, while the Company has a process to minimize volatility in component and material pricing, no assurance can be given that the Company will be able to successfully manage price fluctuations or that future price fluctuations or shortages will not have a material adverse effect on the Company.

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* The Company employs information technology systems to support its business, including ongoing phased implementation of an ERP system as part of business transformation on a worldwide basis over the next several years. Security breaches and other disruptions to the Company’s information technology infrastructure could interfere with the Company’s operations, compromise information belonging to the Company or its customers, suppliers, and employees, exposing the Company to liability which could adversely impact the Company’s business and reputation. In the ordinary course of business, the Company relies on centralized and local information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of businesses. Additionally, the Company collects and stores certain data, including proprietary business information, and has access to confidential or personal information in certain of our businesses that is subject to privacy and security laws, regulations and customer-imposed controls. Despite our cybersecurity measures (including employee and third-party training, monitoring of networks and systems, patching, maintenance, and backup of systems and data), the Company’s information technology networks and infrastructure are still potentially be vulnerable to damage, disruptions or shutdowns due to attacks by hackers, breaches, employee error or malfeasance, power outages, computer viruses, ransomware, telecommunication or utility failures, systems failures, service or cloud provider breaches, natural disasters or other catastrophic events. It is possible for such vulnerabilities to remain undetected for an extended period, up to and including several years. While we have experienced, and expect to continue to experience, these types of vulnerabilities to the Company’s information technology networks and infrastructure, none of them to date has had a material impact to the Company. There may be other challenges and risks as the Company upgrades and standardizes its ERP system on a worldwide basis. Any such events could result in legal claims or proceedings, liability or penalties under privacy laws, disruptions or shutdowns, and damage to the Company’s reputation, which could adversely affect the Company’s business. Although the Company maintains insurance coverage for various cybersecurity and business continuity risks, there can be no guarantee that all costs or losses incurred will be fully insured.

* Acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring could affect future results. The Company monitors its business portfolio and organizational structure and has made and may continue to make acquisitions, strategic alliances, divestitures and changes to its organizational structure. With respect to acquisitions, including, for example, the recently completed acquisition of Acelity, Inc. and its KCI subsidiaries (a leading global medical technology company), future results will be affected by the Company’s ability to integrate acquired businesses quickly and obtain the anticipated synergies. The Company realigned from five to four business segments, effective in April of 2019, to better serve its global customers and markets. Successful execution of the realignment and the associated adjustments of our portfolio and business operating model, as well as other organizational changes, will be important to the Company’s future results.

* The Company’s future results may be affected by its operational execution, including scenarios where the Company generates fewer productivity improvements than estimated. The Company’s financial results depend on the successful execution of its business operating plans. The Company utilizes various tools, such as Lean Six Sigma, and engages in ongoing global business transformation. Business transformation is defined as changes in processes and internal/external service delivery across 3M to move to more efficient business models to improve operational efficiency and productivity, while allowing 3M to serve customers with greater speed and efficiency. This is enabled by the ongoing multi-year phased implementation of an enterprise resource planning (ERP) system. There can be no assurance that all of the projected productivity improvements will be realized. Operational challenges, including those related to productivity improvements, could have a material adverse effect on the Company’s business, financial conditions and results of operations.

* The Company's defined benefit pension and postretirement plans are subject to financial market risks that could adversely impact our results. The performance of financial markets and discount rates impact the Company's funding obligations under its defined benefit plans. Significant changes in market interest rates, decreases in the fair value of plan assets and investment losses on plan assets, and legislative or regulatory changes relating to defined benefit plan funding may increase the Company's funding obligations and adversely impact its results of operations and cash flows.

* Change in the Company’s credit ratings could increase cost of funding. The Company’s credit ratings are important to 3M’s cost of capital. The major rating agencies routinely evaluate the Company’s credit profile and assign debt ratings to 3M. This evaluation is based on a number of factors, which include financial strength, business and financial risk, as well as transparency with rating agencies and timeliness of financial reporting. 3M currently has an A1 credit rating with a stable outlook from Moody’s Investors Service and has an AA- credit rating with Standard & Poor’s; Standard & Poor’s placed 3M on “CreditWatch Negative” in January 2020. The Company’s credit ratings have served to lower 3M’s borrowing costs and facilitate access to a variety of lenders. The addition of further leverage to the Company’s capital structure could impact 3M’s credit ratings in the future. Failure to maintain

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strong investment grade ratings would adversely affect the Company’s cost of funding and could adversely affect liquidity and access to capital markets.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

In the U.S., 3M’s general offices, corporate research laboratories, and certain division laboratories are located in St. Paul, Minnesota. The Company operates 71 manufacturing facilities in 29 states. Internationally, the Company operates 100 manufacturing and converting facilities in 35 countries.

3M owns the majority of its physical properties. 3M’s physical facilities are highly suitable for the purposes for which they were designed. Because 3M is a global enterprise characterized by substantial intersegment cooperation, properties are often used by multiple business segments.

Item 3. Legal Proceedings.

Discussion of legal matters is incorporated by reference from Part II, Item 8, Note 16, “Commitments and Contingencies,” of this document, and should be considered an integral part of Part I, Item 3, “Legal Proceedings.”

Item 4. Mine Safety Disclosures.

Pursuant to Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), the Company is required to disclose, in connection with the mines it operates, information concerning mine safety violations or other regulatory matters in its periodic reports filed with the SEC. For the year 2019, the information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Act is included in Exhibit 95 to this annual report.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Equity compensation plans’ information is incorporated by reference from Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this document, and should be considered an integral part of Item 5. At January 31, 2020, there were 73,905 shareholders of record. 3M’s stock ticker symbol is MMM and is listed on the New York Stock Exchange, Inc. (NYSE), the Chicago Stock Exchange, Inc., and the SWX Swiss Exchange. Cash dividends declared and paid totaled $1.44 and $1.36 per share for each quarter in 2019 and 2018, respectively.

Issuer Purchases of Equity Securities

Repurchases of 3M common stock are made to support the Company’s stock-based employee compensation plans and for other corporate purposes. In November 2018, 3M’s Board of Directors replaced the Company’s February 2016 repurchase program with a new repurchase program. This new program authorizes the repurchase of up to $10 billion of 3M’s outstanding common stock, with no pre-established end date.

Issuer Purchases of Equity Securities

(registered pursuant to Section 12 of the Exchange Act)

					Maximum
					Approximate
					Dollar Value of
				Total Number of	Shares that May
				Shares Purchased	Yet Be Purchased
	Total Number of	Average Price		as Part of Publicly	under the Plans
	Shares Purchased	Paid per		Announced Plans	or Programs
Period	(1)	Share		or Programs (2)	(Millions)
January 1-31, 2019	1,723,445	$	192.18	1,723,187	$	9,065
February 1-28, 2019	1,052,365	$	204.91	1,048,301	$	8,850
March 1-31, 2019	355,200	$	204.83	355,200	$	8,777
Total January 1-March 31, 2019	3,131,010	$	197.89	3,126,688	$	8,777
April 1-30, 2019	—	$	—	—	$	8,777
May 1-31, 2019	1,172,572	$	170.30	1,172,572	$	8,578
June 1-30, 2019	1,197,673	$	169.25	1,197,673	$	8,375
Total April 1-June 30, 2019	2,370,245	$	169.77	2,370,245	$	8,375
July 1-31, 2019	240,464	$	173.41	240,358	$	8,333
August 1-31, 2019	333,679	$	161.29	332,239	$	8,280
September 1-30, 2019	276,127	$	166.25	276,127	$	8,234
Total July 1-September 30, 2019	850,270	$	166.33	848,724	$	8,234
October 1-31, 2019	279,237	$	161.31	279,237	$	8,189
November 1-30, 2019	322,500	$	170.75	322,500	$	8,134
December 1-31, 2019	358,079	$	171.49	358,079	$	8,072
Total October 1-December 31, 2019	959,816	$	168.28	959,816	$	8,072
Total January 1-December 31, 2019	7,311,341	$	181.22	7,305,473	$	8,072

(1) The total number of shares purchased includes: (i) shares purchased under the Board’s authorizations described above, and (ii) shares purchased in connection with the exercise of stock options.

(2) The total number of shares purchased as part of publicly announced plans or programs includes shares purchased under the Board’s authorizations described above.

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Item 6. Selected Financial Data.

(Dollars in millions, except per share amounts)	2019*		2018**		2017		2016		2015
Years ended December 31:
Net sales	$	32,136	$	32,765	$	31,657	$	30,109	$	30,274
Net income attributable to 3M		4,570		5,349		4,858		5,050		4,833
Per share of 3M common stock:
Net income attributable to 3M — basic		7.92		9.09		8.13		8.35		7.72
Net income attributable to 3M — diluted		7.81		8.89		7.93		8.16		7.58
Cash dividends declared per 3M common share		5.76		5.44		4.70		4.44		3.075
Cash dividends paid per 3M common share		5.76		5.44		4.70		4.44		4.10
At December 31:
Total assets	$	44,659	$	36,500	$	37,987	$	32,906	$	32,883
Long-term debt (excluding portion due within one year) and long-term lease obligations		17,629		13,486		12,156		10,723		8,799

* The Company adopted ASU No. 2016-02 and related standards (collectively, Accounting Standards Codification (ASC) 842, Leases), as described in Note 1, on January 1, 2019 using the modified retrospective method of adoption. The adoption resulted in the recording of right of use assets and associated lease liabilities of $0.8 billion each as of January 1, 2019, $0.5 billion of which relates to long-term operating lease obligations.

** The Company adopted ASU No. 2014-09 and related standards (collectively, ASC 606, Revenue from Contracts with Customers), as described in Note 2, on January 1, 2018 using the modified retrospective method of adoption, the impact of which was not material to the Company’s consolidated results of operations and financial condition. Prior periods have not been restated.

Cash dividends declared and paid totaled $1.44 and $1.36 per share for each quarter in 2019 and 2018, respectively. 3M typically declares and pays dividends in the same quarter.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of 3M’s financial statements with a narrative from the perspective of management. 3M’s MD&A is presented in eight sections:

● Overview

● Results of Operations

● Performance by Business Segment

● Performance by Geographic Area

● Critical Accounting Estimates

● New Accounting Pronouncements

● Financial Condition and Liquidity

● Financial Instruments

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

OVERVIEW

3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products and services. As more fully described in both the Performance by Business Segment section in MD&A and in Note 19, effective in the second quarter of 2019, the Company realigned its former five business segments into four and moved certain product lines to better align with their respective end customers. Earlier in the first quarter of 2019, the Company changed its business segment reporting in its continuing effort to improve the alignment of businesses around markets and customers. Business segment information presented herein reflects the impact of these changes for all periods presented. 3M manages its operations in four operating business segments: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. From a geographic perspective, any references to EMEA refer to Europe, Middle East and Africa on a combined basis.

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

The following table provides the increase (decrease) in diluted earnings per share for 2019 compared to the same period last year, in addition to 2018 compared to 2017. As applicable, certain items in the table reflect specific income tax rates associated therewith.

	Year ended December 31,
(Earnings per diluted share)	2019		2018
Same period last year	$	8.89	$	7.93
Significant litigation-related charges		1.28		—
TCJA enactment		0.29		1.24
Same period last year, excluding significant litigation-related charges and TCJA enactment	$	10.46	$	9.17
Increase/(decrease) in earnings per share - diluted, due to:
2017 divestiture of identity management business		—		(0.54)
2018 divestiture of Communication Markets Division, net of related restructuring actions		(0.50)		0.50
Organic growth/productivity and other		(0.60)		0.74
2019 restructuring actions		(0.41)		—
Acquisitions/divestitures		(0.07)		(0.15)
Foreign exchange impacts		—		(0.05)
Income tax rate		—		0.61
Shares of common stock outstanding		0.22		0.18
Current period, excluding significant litigation-related charges, TCJA measurement period adjustment, and Venezuelan deconsolidation	$	9.10	$	10.46
Significant litigation-related charges		(1.01)		(1.28)
TCJA measurement period adjustment		—		(0.29)
Loss on deconsolidation of Venezuelan subsidiary		(0.28)		—
Current period	$	7.81	$	8.89

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Year 2019 EPS:

For year ended December 31, 2019, net income attributable to 3M was $4.570 billion, or $7.81 per diluted share basis, compared to $5.349 billion, or $8.89 per diluted share, for year ended December 31, 2018, a decrease of 12.1 percent on a per diluted share basis.

The Company refers to various “adjusted” amounts or measures on an “adjusted basis”. These exclude the 2019 charge related to the deconsolidation of the Company’s Venezuelan subsidiary, the 2018 and 2019 significant litigation-related charges, and the 2017 enactment and 2018 measurement period adjustments to the provisional amounts recorded related to the 2017 enactment of the Tax Cuts and Jobs Act (TCJA). These non-GAAP measures are further described and reconciled to the most directly comparable GAAP financial measures in the Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures) section below.

On an adjusted basis, net income attributable to 3M was $5.322 billion, or $9.10 per diluted share for 2019 compared to $6.295 billion, or $10.46 per diluted share for 2018, a decrease of 13.0 percent on a per diluted share basis.

For 2019, while 3M experienced sales growth in its Consumer and Health Care segments, this was more than offset by declines in 3M’s Safety and Industrial and Transportation and Electronics segments. These two businesses were impacted by softness in certain end markets (China, automotive and electronics) and channel inventory adjustments, particularly within Asia Pacific and the United States. Earnings were also impacted by second quarter restructuring actions taken to address lower sales volumes, as well as inventory reductions to drive improved cash flow. Further restructuring actions were taken in fourth quarter to realign 3M’s organizational structure and operating model to improve growth and operational efficiency. Partially offsetting these impacts were benefits in the second half of 2019 from the second quarter restructuring actions.

Additional discussion related to the components of the year-on-year change in earnings per diluted share follows:

2018 divestiture of Communication Markets Division, net of related restructuring actions:

● In 2018, 3M completed the sale of substantially all of its Communication Markets Division and reflected a pre-tax gain of $509 million as a result of this divestiture and was reported within the Company’s Safety and Industrial business. During 2018, management approved and committed to undertake certain restructuring actions as further described in Note 5, related to addressing corporate functional costs following the Communication Markets Division divestiture resulting in a 2018 pre-tax charge of $127 million, net of adjustments for reductions in cost estimates of $10 million. The aggregate net impact of the gain on sale and related restructuring actions increased earnings per diluted share by 50 cents per diluted share for the full year 2018.

Organic growth/productivity and other:

● Negative organic local-currency sales growth as a result of softness in certain end markets and channel inventory adjustments, along with actions taken by 3M in response to lower sales volumes and high inventory levels, which resulted in lower manufacturing and inventory absorption, reduced earnings per diluted share. Partially offsetting these impacts were benefits from restructuring actions taken in the second quarter of 2019.

● Defined benefit pension and postretirement service cost expense decreased expense year-on-year, which benefited earnings per diluted share.

● Lower income related to non-service cost components of pension and postretirement expense, increased expense year-on-year.

● Interest expense (net of interest income) increased $88 million for 2019, as a result of higher U.S. average debt balances, partially offset by the increase in interest income driven by higher balances in cash, cash equivalents and marketable securities during the year resulting from the proceeds from debt issuances in advance of the October 2019 Acelity acquisition.

2019 restructuring actions:

● During the second quarter of 2019, in light of slower than expected 2019 sales, and additionally in the fourth quarter to realign 3M’s organizational structure and operating model to improve growth and operational efficiency, management approved and committed to undertake certain restructuring actions. The Company recorded a fourth quarter 2019 pre-tax

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charge of $134 million and second quarter 2019 pre-tax charge of $148 million, which when combined, resulted in a full year 2019 impact of 41 cents per diluted share. See Note 5 for additional details.

Acquisitions/divestitures:

● Acquisition impacts, which are measured for the first twelve months post-transaction, relate to the acquisitions of M*Modal (first quarter 2019), and Acelity (fourth quarter 2019). These items collectively decreased earnings per diluted share by 19 cents year-on-year for 2019. The net impacts related to these acquisitions included income from operations, more than offset by transaction and integration costs. Interest expense related to financing costs of these acquisitions is also included. Expenses related to the October 2019 acquisition of Acelity also include financing costs and the tax effect of repatriating funds in advance of the close of the acquisition.

● Divestiture impacts include the incremental year-on-year pre-tax gain on divestitures and the lost operating income from divested businesses (other than lost income related to the divestiture of the Communication Markets Division). These items collectively increased earnings per diluted share by 16 cents year-on-year for 2019. The net impacts included 14 cents for 2019 related to the gain from the third quarter 2019 divestiture of the Company’s gas and flame detection business and 7 cents from the second quarter 2019 “held for sale” tax benefit related to the legal entities associated with the divestiture. Other incremental year-on-year gains/losses on divestitures and the lost operating income from divested businesses decreased earnings per share by 5 cents for 2019.

● In addition to divestiture impacts above, remaining stranded costs and lost operating income related to the 2018 divestiture of the Communication Markets Division decreased earnings per diluted share by 4 cents year-on-year for 2019.

Foreign exchange impacts:

● Foreign currency impacts (net of hedging) were essentially flat year-on-year, excluding the impact of foreign currency changes on tax rates.

Income tax rate:

● Certain items above reflect specific income tax rates associated therewith. Overall, the effective tax rate for 2019 was 19.8 percent, a decrease of 3.6 percentage points versus 2018. On an adjusted basis (as discussed below), the effective tax rate decreased 0.5 percentage points year-on-year for 2019.

● Factors that decreased the effective tax rate on a GAAP basis for 2019 included prior year measurement period adjustments related to 2017 Tax Cuts and Jobs Act (TCJA), prior year resolution of the NRD lawsuit (as described in Note 16) and geographical income mix. These decreases were partially offset by the deconsolidation of the Venezuelan subsidiary, adjustments to uncertain tax positions, and significant litigation-related charges. Refer to Note 10 for additional details.

Shares of common stock outstanding:

● Lower shares outstanding increased earnings per share year-on-year by 22 cents per diluted share for 2019. Weighted-average diluted shares outstanding in 2019 declined 2.8 percent year-on-year which benefited earnings per share. The decrease in the outstanding weighted-average diluted shares relates to the Company’s purchase of $1.4 billion of its own stock in 2019.

Year 2018 EPS:

2017 divestiture of identity management business:

● In May 2017, 3M completed the divestiture of its identity management business and reflected a pre-tax gain of $457 million, which was reported within the Company’s Transportation and Electronics business.

Organic growth/productivity and other:

● 2018 year-on-year benefits include higher organic local-currency sales, selling price increases, and business transformation, which had a positive impact on 3M’s productivity efforts. Higher raw material costs partially offset these year-on-year benefits.

● Lower year-on-year restructuring (other than activity related to the Communication Markets Division divestiture), portfolio and footprint actions increased pre-tax earnings by approximately $307 million in 2018. 2017 charges included $99 million in restructuring actions and $207 million in asset charges, accelerated depreciation and other costs.

● Interest expense (net of interest income) increased $8 million year-on-year. While 2017 interest expense included a $96 million early debt extinguishment charge, 2018 net interest expense increased as a result of higher U.S. average debt balances and higher borrowing costs.

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● On a combined basis, higher defined benefit pension and postretirement service cost expense and defined contribution expense, in addition to lower income related to non-service cost components of pension and postretirement expense, increased expense year-on-year.

Acquisitions/other divestiture gains:

● In aggregate, acquisitions, year-on-year divestitures gains (other than the sale of the Communication Markets Division and identity management business), and lost operating income from divested businesses (other than lost income related to the divestiture of the Communication Markets Division) decreased earnings per diluted share by 10 cents in 2018.

● Remaining stranded costs and lost operating income related to the divestiture of the Communication Markets Division decreased earnings per diluted share by 5 cents year-on-year in 2018.

Foreign exchange impacts:

● Foreign currency impacts (net of hedging) decreased pre-tax earnings year-on-year by approximately $42 million, or the equivalent of 5 cents per diluted share, excluding the impact of foreign currency changes on tax rates.

Income tax rate:

● Certain items above reflect specific income tax rates associated therewith. The effective tax rate for full year 2018 was 23.4 percent, a decrease of 12.1 percentage points versus 2017. On an adjusted basis (as described below), the effective income tax rate was 20.1 percent for 2018 versus 25.4 percent for 2017.

● Factors that decreased the effective tax rate on a GAAP basis for 2018 primarily related to the favorable aspects of the TCJA such as the decrease in the U.S. income tax rate and foreign-derived intangible income (FDII), reduced transitional impact of TCJA related to transition tax and remeasurement of deferred tax assets/liabilities and increased benefits from the R&D tax credit. These decreases were partially offset by the elimination of the domestic manufacturing deduction, the global intangible low-taxed income (GILTI) provision, and lower excess tax benefits related to employee share-based payments. Refer to Note 10 for additional details.

Shares of common stock outstanding:

● Lower shares outstanding increased earnings per share by 18 cents per diluted share for full year 2018. Weighted-average diluted shares outstanding in 2018 declined 1.8 percent year-on-year, which benefited earnings per share. The decrease in the outstanding weighted-average diluted shares relates to the Company’s purchase of $4.9 billion of its own stock in the 2018.

2018 divestiture of Communication Markets Division, net of related restructuring actions and exit activities:

● As discussed above, in 2018, 3M completed the sale of substantially all of its Communication Markets Division and reflected a pre-tax gain of $509 million as a result of this divestiture. The divestiture was reported within the Company’s Safety and Industrial business. Also as discussed above, during 2018, management approved and committed to undertake certain restructuring actions related to addressing corporate functional costs following the Communication Markets Division divestiture that resulted in a pre-tax charge of $127 million, net of adjustments for reductions in cost estimates. The aggregate net impact of the gain on sale and related restructuring actions increased earnings per diluted share by 50 cents per diluted share for 2018.

Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures):

In 2019, the Company recorded significant litigation-related charges of $762 million ($590 million after tax) related to PFAS (certain perfluorinated compounds) matters and coal mine dust respirator mask lawsuits of which $214 million ($166 million after tax) occurred in the fourth quarter. The aggregate 2019 pre-tax charge was reflected in cost of sales ($328 million) and selling, general and administrative expense ($434 million). In 2018, 3M recorded significant litigation-related charges of $897 million ($770 million after tax) for PFAS matters related to the previously disclosed agreement reached with the State of Minnesota that resolved the Natural Resource Damages (NRD) lawsuit. Essentially all of the aggregate 2018 pre-tax charge was reflected in selling, general and administrative expense. These charges are further discussed in Note 16.

In the second quarter of 2019, 3M recorded a pre-tax charge of $162 million related to the deconsolidation of the Company’s Venezuelan subsidiary as further discussed in Note 1.

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With respect to the enactment of the 2017 Tax Cuts and Jobs Act (TCJA), 3M recorded a $762 million tax expense in 2017 and additional net tax expense of $176 million in 2018 as a measurement period adjustment to the TCJA’s enactment. See Note 10 for details.

In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides non-GAAP measures that adjust for the impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary and measurement period adjustments to the enactment of the TCJA. These items represent significant amounts that impacted the Company’s financial results. Operating income, income before taxes, net income, earnings per share, and effective tax rate are all measures for which 3M provides the reported GAAP measure and an adjusted measure. 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 the Company’s operations. The Company believes that discussion of results adjusted for these items is meaningful to investors as it provides a useful analysis of ongoing underlying operating trends. The determination of these items may not be comparable to similarly titled measures used by other companies.

(Dollars in millions, except per share amounts)		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
Full Year 2017 GAAP	$	7,692	24.3	%	$	7,548	$	2,679	35.5	%	$	4,858	$	7.93
Adjustment for TCJA enactment								(762)				762		1.24
Full Year 2017 adjusted amounts (non-GAAP measures)	$	7,692	24.3	%	$	7,548	$	1,917	25.4	%	$	5,620	$	9.17
Full Year 2018 GAAP	$	7,207	22.0	%	$	7,000	$	1,637	23.4	%	$	5,349	$	8.89	12.1	%
Adjustment for significant litigation-related charges		897				897		127				770		1.28
Adjustment for measurement period accounting for TCJA								(176)				176		0.29
Full Year 2018 adjusted amounts (non-GAAP measures)	$	8,104	24.7	%	$	7,897	$	1,588	20.1	%	$	6,295	$	10.46	14.1	%
Full Year 2019 GAAP	$	6,174	19.2	%	$	5,712	$	1,130	19.8	%	$	4,570	$	7.81	(12.1)	%
Adjustment for significant litigation-related charges		762				762		172				590		1.01
Adjustment for loss on deconsolidation of Venezuelan subsidiary						162		—				162		0.28
Full Year 2019 adjusted amounts (non-GAAP measures)	$	6,936	21.6	%	$	6,636	$	1,302	19.6	%	$	5,322	$	9.10	(13.0)	%

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Year 2019 sales and operating income by business segment:

The following tables contain sales and operating income results by business segment for the years ended December 31, 2019 and 2018. Refer to the section entitled “Performance by Business Segment” later in MD&A for additional discussion concerning both 2019 versus 2018 results and 2018 versus 2017 results, including Corporate and Unallocated. Refer to Note 19 for additional information on business segments, including Elimination of Dual Credit.

													2019 vs 2018
	2019						2018						% change
	Net		% of		Oper.		Net		% of		Oper.		Net		Oper.
(Dollars in millions)	Sales		Total		Income		Sales		Total		Income		Sales		Income
Business Segments
Safety and Industrial	$	11,607	36.1	%	$	2,648	$	12,494	38.1	%	$	3,423	(7.1)	%	(22.6)	%
Transportation and Electronics		9,602	29.9			2,221		10,106	30.8			2,649	(5.0)		(16.1)
Health Care		7,431	23.1			1,863		6,826	20.8			1,921	8.9		(3.0)
Consumer		5,089	15.8			1,105		5,086	15.5			1,071	0.1		3.3
Corporate and Unallocated		110	0.3			(1,243)		50	0.2			(1,409)	—		—
Elimination of Dual Credit		(1,703)	(5.2)			(420)		(1,797)	(5.4)			(448)	—		—
Total Company	$	32,136	100.0	%	$	6,174	$	32,765	100.0	%	$	7,207	(1.9)	%	(14.3)	%

	Year ended December 31, 2019
Worldwide Sales Change	Organic local-								Total sales
By Business Segment	currency sales		Acquisitions		Divestitures		Translation		change
Safety and Industrial	(3.3)	%	—	%	(1.7)	%	(2.1)	%	(7.1)	%
Transportation and Electronics	(3.5)		—		—		(1.5)		(5.0)
Health Care	1.6		9.4		(0.1)		(2.0)		8.9
Consumer	1.3		—		—		(1.2)		0.1
Total Company	(1.5)	%	2.0	%	(0.7)	%	(1.7)	%	(1.9)	%

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Year 2019 sales results by geographic area/business segment:

Percent change information compares the year ended December 31, 2019 with the same period last year, unless otherwise indicated. Additional discussion of business segment results is provided in the Performance by Business Segment section.

	Year ended December 31, 2019
							Europe,			Latin
	United			Asia			Middle East			America/			Other
	States			Pacific			& Africa			Canada			Unallocated		Worldwide
Net sales (millions)	$	13,159		$	9,796		$	6,226		$	2,965		$	(10)	$	32,136
% of worldwide sales		40.9	%		30.5	%		19.4	%		9.2	%		—		100.0	%
Components of net sales change:
Volume — organic		(1.9)	%		(2.8)	%		(2.2)	%		0.3	%		—		(2.1)	%
Price		0.8			(0.1)			1.3			0.8			—		0.6
Organic local-currency sales		(1.1)			(2.9)			(0.9)			1.1			—		(1.5)
Acquisitions		4.1			0.3			1.0			0.8			—		2.0
Divestitures		(0.5)			(0.2)			(1.9)			(0.6)			—		(0.7)
Translation		—			(1.7)			(4.6)			(3.3)			—		(1.7)
Total sales change		2.5	%		(4.5)	%		(6.4)	%		(2.0)	%		—		(1.9)	%
Total sales change:
Safety and Industrial		(5.7)	%		(7.2)	%		(11.0)	%		(3.9)	%		—		(7.1)	%
Transportation and Electronics		(4.3)	%		(5.2)	%		(6.6)	%		(1.5)	%		—		(5.0)	%
Health Care		18.4	%		2.1	%		0.6	%		1.0	%		—		8.9	%
Consumer		2.4	%		(3.6)	%		(5.1)	%		(1.2)	%		—		0.1	%
Organic local-currency sales change:
Safety and Industrial		(4.4)	%		(4.3)	%		(2.4)	%		0.6	%		—		(3.3)	%
Transportation and Electronics		(4.2)	%		(4.0)	%		(2.2)	%		1.1	%		—		(3.5)	%
Health Care		1.1	%		2.8	%		1.4	%		0.9	%		—		1.6	%
Consumer		2.4	%		(1.8)	%		(0.1)	%		2.2	%		—		1.3	%

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

● In the Asia Pacific geographic area, China/Hong Kong total sales decreased 7 percent and organic local-currency sales decreased 4 percent. In Japan, total sales decreased 2 percent and organic local currency sales decreased 3 percent.

● In the Latin America/Canada geographic area, total sales in Mexico were flat while organic local-currency sales increased 1 percent. In Canada, total sales and organic local-currency sales increased 3 percent. In Brazil, total sales decreased 4 percent while organic local-currency sales increased 3 percent.

Foreign currency translation decreased year-on-year sales by 1.7 percent, while selling prices increased by 0.6 percent year-on-year for 2019, with price growth in EMEA, Latin America/Canada, and the U.S., while Asia Pacific was flat.

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Year 2018 sales results by geographic area/business segment:

Percent change information compares the full year 2018 with the full year 2017, unless otherwise indicated. Additional discussion of business segment results is provided in the Performance by Business Segment section.

	Year ended December 31, 2018
							Europe,			Latin
	United			Asia			Middle East			America/			Other
	States			Pacific			& Africa			Canada			Unallocated		Worldwide
Net sales (millions)	$	12,840		$	10,254		$	6,654		$	3,024		$	(7)	$	32,765
% of worldwide sales		39.2	%		31.3	%		20.3	%		9.2	%		—		100.0	%
Components of net sales change:
Volume — organic		2.1	%		3.5	%		—	%		2.1	%		—		2.1	%
Price		1.1			0.3			1.7			2.0			—		1.1
Organic local-currency sales		3.2			3.8			1.7			4.1			—		3.2
Acquisitions		1.9			0.5			2.2			0.7			—		1.4
Divestitures		(1.3)			(0.6)			(2.5)			(1.4)			—		(1.3)
Translation		—			0.8			1.7			(3.7)			—		0.2
Total sales change		3.8	%		4.5	%		3.1	%		(0.3)	%		—		3.5	%
Total sales change:
Safety and Industrial		6.9	%		4.0	%		4.6	%		(1.4)	%		—		4.6	%
Transportation and Electronics		1.4	%		3.5	%		1.8	%		(0.8)	%		—		2.5	%
Health Care		0.1	%		8.4	%		3.9	%		1.5	%		—		2.9	%
Consumer		3.4	%		(0.7)	%		(1.8)	%		(0.7)	%		—		1.6	%
Organic local-currency sales change:
Safety and Industrial		3.6	%		2.9	%		1.8	%		2.4	%		—		2.8	%
Transportation and Electronics		4.9	%		3.2	%		2.7	%		5.4	%		—		3.7	%
Health Care		—	%		7.5	%		2.5	%		5.2	%		—		2.6	%
Consumer		3.4	%		(1.6)	%		(3.6)	%		4.5	%		—		1.5	%

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

● In the Asia Pacific geographic area, China/Hong Kong total sales increased 10 percent and organic local-currency sales increased 8 percent. In Japan, total sales and organic local currency sales decreased 2 percent.

● In the Latin America/Canada geographic area, total sales increased 1 percent in Mexico, as organic local-currency sales increases of 4 percent were partially offset by lost sales from divested businesses and foreign currency translation impacts. In Canada, total sales and organic local currency increased 5 percent. In Brazil, total sales decreased 8 percent, as organic local-currency sales growth of 5 percent was more than offset by foreign currency translation impacts.

Foreign currency translation increased year-on-year sales by 0.2 percent, with the translation-related sales increase in EMEA and Asia Pacific partially offset by the decreases in Latin America/Canada. Selling prices increased by 1.1 percent year-on-year for 2018, with strong price growth in Latin America/Canada, EMEA and the U.S. In Asia Pacific, price grew slightly, as strong volume growth in electronics had a negative impact on price.

Managing currency risks:

The stronger U.S. dollar had a negative impact on sales in full year 2019 compared to the same period last year. Net of the Company’s hedging strategy, foreign currency was neutral to earnings for full year 2019 compared to the same period last year. 3M utilizes a number of tools to hedge currency risk related to earnings. 3M uses natural hedges such as pricing, productivity, hard currency and hard currency-indexed billings, and localizing source of supply. 3M also uses financial hedges to mitigate currency risk. In the case of more liquid currencies, 3M hedges a portion of its aggregate exposure, using a 12, 24 or 36 month horizon, depending on the currency in question. For less liquid currencies, financial hedging is frequently more expensive with more limitations on tenor. Thus, this risk is

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largely managed via local operational actions using natural hedging tools as discussed above. In either case, 3M’s hedging approach is designed to mitigate a portion of foreign currency risk and reduce volatility, ultimately allowing time for 3M’s businesses to respond to changes in the marketplace.

Financial condition:

3M generated $7.070 billion of operating cash flow in 2019, an increase of $631 million when compared to 2018. This increase was primarily due to significant litigation-related charges and the timing of associated payments that impacted 2019 and 2018. This followed an operating cash flow increase of $199 million when comparing 2018 to 2017. Refer to the section entitled “Financial Condition and Liquidity” later in MD&A for a discussion of items impacting cash flows.

In November 2018, 3M’s Board of Directors replaced the Company’s February 2016 repurchase program with a new repurchase program. This new program authorizes the repurchase of up to $10 billion of 3M’s outstanding common stock, with no pre-established end date. In 2019, the Company purchased $1.4 billion of its own stock, compared to purchases of $4.9 billion in 2018 and $2.1 billion in 2017. The Company expects to purchase approximately $1.0 billion of its own stock in 2020. In February 2020, 3M’s Board of Directors declared a first-quarter 2020 dividend of $1.47 per share, an increase of 2 percent. This marked the 62^nd consecutive year of dividend increases for 3M.

Raw materials:

In 2019, the Company experienced raw material price inflation across many material markets in all geographies. In response, the Company continued to deploy productivity projects to minimize the impact of raw material inflation and market supply challenges, including input management, reformulations, and multi-sourcing activities. These succeeded in partially offsetting the overall raw material headwinds experienced throughout the year. To date, the Company is receiving sufficient quantities of all raw materials to meet its reasonably foreseeable production requirements. It is difficult to predict future shortages of raw materials or the impact any such shortages would have. 3M has avoided disruption to its manufacturing operations through careful management of existing raw material inventories, strategic relationships with key suppliers, and development as well as qualification of additional supply sources. 3M manages spend category price risks through negotiated supply contracts, price protection agreements and commodity price swaps. In addition, 3M evaluates suppliers’ conformance with environmental and social compliance requirements.

Pension and postretirement defined benefit/contribution plans:

On a worldwide basis, 3M’s pension and postretirement plans were 87 percent funded at year-end 2019. The primary U.S. qualified pension plan, which is approximately 67 percent of the worldwide pension obligation, was 93 percent funded and the international pension plans were 87 percent funded. The U.S. non-qualified pension plan is not funded due to tax considerations and other factors. Asset returns in 2019 for the primary U.S. qualified pension plan were 16.3%, as 3M strategically invests in both growth assets and fixed income matching assets to manage its funded status. For the primary U.S. qualified pension plan, the expected long-term rate of return on an annualized basis for 2020 is 6.75%. The primary U.S. qualified pension plan year-end 2019 discount rate was 3.25%, down 1.11 percentage points from the year-end 2018 discount rate of 4.36%. The decrease in U.S. discount rates resulted in an increased valuation of the projected benefit obligation (PBO). The primary U.S. qualified pension plan’s funded status decreased 3 percentage points in 2019 due to the higher PBO resulting from the significant discount rate decrease and partially offset by higher return on assets. Additional detail and discussion of international plan asset returns and discount rates is provided in Note 13 (Pension and Postretirement Benefit Plans).

3M expects to contribute approximately $100 million to $200 million of cash to its global defined benefit pension and postretirement plans in 2020. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2020. 3M expects global defined benefit pension and postretirement expense in 2020 (before settlements, curtailments, special termination benefits and other) to increase by approximately $34 million pre-tax when compared to 2019. Refer to “Critical Accounting Estimates” within MD&A and Note 13 (Pension and Postretirement Benefit Plans) for additional information concerning 3M’s pension and post-retirement plans.

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2020 closed and recently announced divestitures:

As discussed in Note 3, in December 2019, 3M agreed to sell substantially all of its drug delivery business for approximately $650 million in consideration, subject to closing and other adjustments. 3M expects a pre-tax gain of approximately $400 million as a result of the divestiture that will be reported within the Company’s Health Care business. The sale is expected to close in the first half of 2020.

Also as discussed in Note 3, in January 2020, 3M completed the sale of its advanced ballistic-protection business for $91 million, subject to closing and other adjustments, plus contingent consideration of up to $25 million depending on the outcome of pending tenders. The Company previously reflected an immaterial impact in 2019 as a result of measuring the disposal group at the lower of its carrying amount or fair value less cost to sell.

RESULTS OF OPERATIONS

Net Sales:

Refer to the preceding “Overview” section and the “Performance by Business Segment” section later in MD&A for additional discussion of sales change.

Operating Expenses:

							2019 versus		2018 versus
(Percent of net sales)	2019		2018		2017		2018		2017
Cost of sales	53.4	%	50.9	%	50.8	%	2.5	%	0.1	%
Selling, general and administrative expenses	21.9		23.2		20.9		(1.3)		2.3
Research, development and related expenses	5.9		5.6		5.9		0.3		(0.3)
Gain on sale of businesses	(0.4)		(1.7)		(1.9)		1.3		0.2
Operating income margin	19.2	%	22.0	%	24.3	%	(2.8)	%	(2.3)	%

Operating income margins decreased year over year for both 2019 and 2018. The decrease from 2018 to 2019 was primarily driven by softness in certain end markets and channel inventory adjustments, along with actions taken by 3M in response to lower sales volumes and high inventory levels, which resulted in lower manufacturing and inventory absorption. Additionally, higher year-on-year restructuring actions taken decreased operating income margins, partially offset by lower year-on-year significant litigation-related charges. The decrease from 2017 to 2018 was driven primarily by the charge related to the significant litigation-related charges (as discussed in the Selling, General and Administrative Expenses section below). A number of factors impact the various income statement line items, such as raw material cost management, portfolio and footprint actions, divestitures, foreign currency, cost management, and pension and postretirement service cost effects. Expanded discussion of each of the income statement line items follows in the various sections below. Pension and postretirement service cost expense is recorded in cost of sales; selling, general and administrative expenses (SG&A); and research, development and related expenses (R&D). In total, 3M’s defined benefit pension and postretirement service cost expense decreased $58 million in 2019, compared to an increase of $21 million in 2018. Refer to Note 13 (Pension and Postretirement Plans) for the service cost components of net periodic benefit costs.

The Company is investing in an initiative called business transformation, with these investments impacting cost of sales, SG&A, and R&D. Business transformation encompasses the ongoing multi-year phased implementation of an enterprise resource planning (ERP) system on a worldwide basis, as well as changes in processes and internal/external service delivery across 3M.

Cost of Sales:

Cost of sales includes manufacturing, engineering and freight costs.

Cost of sales, measured as a percent of sales, increased during full year 2019 when compared to full year 2018. Increases primarily related to lower sales volume year-on-year, which resulted in cost absorption penalties from lower sales volumes as all businesses worked to reduce inventories and improve cash flow and significant litigation-related charges taken in 2019 (as discussed earlier in the Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan

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subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures). These factors were partially offset by selling price increases, which increased net sales year-on-year by 0.6 percent for full year 2019.

Cost of sales as a percent of sales, increased during 2018 primarily due to foreign currency effects (net of hedge losses). Additionally, cost of sales for full year 2018 were increased by the 2018 Communication Markets Division related restructuring charges as discussed in Note 5. This increase was partially offset by 2017 portfolio and supply chain footprint optimization charges that did not repeat in 2018 and selling price increases. Selling prices increased net sales year-on-year by 1.1 percent for full year 2018. These were partially offset by raw material cost increases and higher defined benefit pension and postretirement service cost expense and defined contribution expense.

Selling, General and Administrative Expenses:

SG&A in dollars decreased 7.5 percent for full year 2019 when compared to full year 2018. The decrease primarily related to indirect cost reductions and lower year-on-year impact related to significant litigation-related charges (as discussed earlier in the Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures) section).

SG&A in dollars increased 14.7 percent for full year 2018 when compared to full year 2017. The increase is primarily associated with the Communication Markets Division-related restructuring charges (as discussed in Note 5) and the charge related to the Minnesota NRD resolution (as discussed earlier in the Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures) section and further in Note 16). This increase was partially offset by 2017 portfolio and supply chain footprint optimization charges that did not repeat in 2018.

Research, Development and Related Expenses:

R&D in dollars increased $90 million for the full year 2019 when compared to full year 2018. R&D, measured as a percent of sales was 5.9% in 2019, compared to 5.6% in 2018 and 5.9% in 2017. The increase from 2018 was driven by 3M continued investment in its key initiatives, including R&D aimed at disruptive innovation programs with the potential to create entirely new markets and disrupt existing markets. In addition, R&D increased due to additional spending related to the Company’s acquisitions in 2019.

R&D in dollars decreased $49 million for full year 2018 when compared to full year 2017. The decrease primarily relates to R&D no longer incurred related to the Communication Markets Division, which was divested in 2018.

Gain on Sale of Businesses:

During the first quarter of 2019, the Company sold certain oral care technology comprising a business and reflected an earnout on a previous divestiture resulting in an aggregate immaterial gain. During 2019, the Company sold its gas and flame detection business for a pre-tax gain of $112 million. 3M also divested certain businesses in 2018 and 2017, resulting in gains of $547 million and $586 million, respectively. Refer to Note 3 for additional details on these divestitures.

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Operating Income Margin:

3M uses operating income as one of its primary business segment performance measurement tools. Refer to the table below for a reconciliation of operating income margins for 2019 and 2018.

	Year ended December 31,
(Percent of net sales)	2019		2018
Same period last year	22.0	%	24.3	%
Significant litigation-related charges	2.7		—
Same period last year, excluding significant litigation-related charges	24.7	%	24.3	%
Increase/(decrease) in operating income margin, due to:
2017 divestiture of identity management business	—		(1.3)
2018 divestiture of Communication Markets Division, net of related restructuring actions	(1.2)		1.2
Organic volume/productivity and other	(1.6)		0.7
2019 restructuring actions	(0.8)		—
Acquisitions/divestitures	(0.3)		(0.1)
Selling price and raw material impact	0.4		0.1
Foreign exchange impacts	0.4		(0.2)
Current period, excluding significant litigation-related charges	21.6	%	24.7	%
Significant litigation-related charges	(2.4)		(2.7)
Current period	19.2	%	22.0	%

Year 2019 operating income:

Operating income margins decreased 2.8 percentage points in 2019 when compared to 2018. Excluding the significant litigation-related charges, operating margins decreased 3.1 percentage points to 21.6 percent in 2019 when compared to 2018. Refer to the Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures) section above for additional details on the significant litigation-related charges.

Additional discussion related to the components of the year-on-year change in operating income margins follows:

2018 divestiture of Communication Markets Division, net of related restructuring actions:

● In 2018, 3M completed the sale of substantially all of its Communication Markets Division and reflected a pre-tax gain of $509 million as a result of this divestiture. During 2018, management approved and committed to undertake certain restructuring actions as described in Note 5 related to addressing corporate functional costs following the Communication Markets Division divestiture resulting in a 2018 pre-tax charge of $127, net of adjustments for reductions in cost estimates of $10 million.

Organic volume/productivity and other:

● Negative organic local sales volume growth as a result of softness in certain end markets and channel inventory adjustments, along with actions taken by 3M in response to lower sales volumes and high inventory levels, which resulted in lower manufacturing and inventory absorption, reduced operating margins. Partially offsetting these impacts were benefits from restructuring actions taken in the second quarter of 2019.

● Operating income margins increased year-on-year due to lower defined benefit pension and postretirement service cost expense.

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2019 restructuring actions:

● During the second quarter of 2019, in light of slower than expected 2019 sales, and additionally in the fourth quarter to realign 3M’s organizational structure and operating model to improve growth and operational efficiency, management approved and committed to undertake certain restructuring actions. Of the total $282 million charge reflected in 2019, $148 million was recorded in the second quarter, of which $35 million was associated with a voluntary retirement incentive program that impacted second quarter other expense (income), and an additional $134 million recorded in the fourth quarter.

Acquisitions/divestitures:

● Acquisition-related impacts relate to the on-going integration of M*Modal and Acelity, which decreased operating income margins year-on-year.

● Divestiture impacts (which is comprised of higher year-on-year divestiture gains other than the Communication Markets Division in addition to lost operating income from divested businesses) increased operating income margins year-on-year and primary related to the gain from the divestiture of the Company’s gas and flame detection business.

● Remaining stranded costs to be addressed from the 2018 divestiture of the Communication Markets Division also reduced operating margins year-on-year.

Selling price and raw material impact:

● Higher selling prices, partially offset by raw material cost increases, benefited operating income margins year-on-year for 2019.

Foreign exchange impacts:

● Foreign currency effects (net of hedge gains) increased operating income margins year-on-year.

Significant litigation-related charges:

● Operating income margins for 2018 and 2019 included the $897 million and $762 million impact, respectively, of significant litigation-related charges (as discussed earlier in the Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures) section.

Year 2018 operating income:

Operating income margins decreased 2.3 percentage points for the full year 2018 when compared to full year 2017.

2017 divestiture of identity management business:

● Operating income margins decreased year-on-year due to the gain on the May 2017 divestiture of the Company’s former identity management business.

Organic volume/productivity and other:

● Operating income margins increased year-on-year due to benefits from organic local-currency growth and productivity, in addition to lower year-on-year portfolio and supply chain footprint optimization charges.

● Operating income margins decreased year-on-year due to higher defined benefit pension and postretirement service cost expense and defined contribution expense.

Acquisitions/other divestiture gains:

● Acquisition impacts (primarily related to Scott Safety), in addition to lower year-on-year divestiture gains (excluding the identity management business and Communication Markets Division), decreased operating margins year-on-year.

● Remaining stranded costs to be addressed from the divestiture of the Communication Markets Division reduced operating margins year-on-year.

● Operating income margins increased year-on-year due to the lost lower-margin operating income from divested businesses.

Selling price and raw material impact:

● Higher selling prices, partially offset by raw material cost increases, benefited operating income margins year-on-year.

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Foreign exchange impacts:

● Foreign currency effects (net of hedge gains) decreased operating income margins year-on-year for the full year 2018.

2018 divestiture of Communication Markets Division, net of related restructuring actions:

● As discussed above, in 2018, 3M completed the sale of substantially all of its Communication Markets Division and reflected a pre-tax gain of $509 million as a result of this divestiture. Also as discussed above, during 2018, management approved and committed to undertake certain restructuring actions related to addressing corporate functional costs following the Communication Markets Division divestiture that resulted in a pre-tax charge of $127 million, net of adjustments for reductions in cost estimates.

Significant litigation-related charges:

● Operating income margins for 2018 decreased 2.7 percentage points year-on-year as a result of significant litigation-related charges. See the Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures) section for further details.

Other Expense (Income), Net:

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

Interest expense (net of interest income) increased during 2019 and 2018. The increase in 2019 was driven by higher U.S. average debt balances, partially offset by the year-on-year increase in interest income driven by higher balances in cash, cash equivalents and marketable securities during the year resulting from the proceeds from debt issuances in advance of the October 2019 Acelity acquisition. While 2017 interest expense included a $96 million early debt extinguishment charge, 2018 net interest expense increased as a result of higher U.S. average debt balances and higher borrowing costs.

The increase in other expense (income) during 2019 was primarily due to the impact of deconsolidation of the Company’s Venezuelan subsidiary. Refer to Note 1 for additional details.

In addition, other expense (income) was impacted by lower year-on-year pension and postretirement net periodic benefit non-service benefits of $5 million and $55 million for 2019 and 2018, respectively. The lower year-on-year benefit in 2019 was primarily due to the second quarter 2019 charge associated with the voluntary retirement incentive program in addition to pension settlement charges in the fourth quarter 2019 related to employee retirements. The decrease in 2018 was primarily due to an increase in net actuarial amortization expense. Refer to Note 13 for additional details.

Provision for Income Taxes:

(Percent of pre-tax income)	2019		2018		2017
Effective tax rate	19.8	%	23.4	%	35.5	%

The effective tax rate for 2019 was 19.8 percent, a decrease of 3.6 percentage points when compared to 2018. The effective tax rate for 2018 was 23.4 percent, compared to 35.5 percent in 2017, a decrease of 12.1 percentage points. The changes in the tax rates between years were impacted by many factors, including measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA), prior year resolution of the NRD lawsuit, and geographical income mix offset by the impact from the deconsolidation of the Company’s Venezuelan subsidiary as further described in the Overview, Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA) - (non-GAAP measures) section and in Note 10. Additional factors that impacted the tax rates between years were adjustments to uncertain tax positions, and significant litigation-related charges.

3M currently estimates its effective tax rate for 2020 will be approximately 20 to 21 percent. The tax rate can vary from quarter to quarter due to discrete items, such as the settlement of income tax audits, changes in tax laws, and employee share-based payment accounting; as well as recurring factors, such as the geographic mix of income before taxes.

Refer to Note 10 for further discussion of income taxes.

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Net Income Attributable to Noncontrolling Interest:

(Millions)	2019		2018		2017
Net income attributable to noncontrolling interest	$	12	$	14	$	11

Net income attributable to noncontrolling interest represents the elimination of the income or loss attributable to non-3M ownership interests in 3M consolidated entities. The amount primarily relates to 3M India Limited, of which 3M’s effective ownership is 75 percent.

Currency Effects:

3M estimates that year-on-year currency effects, including hedging impacts, increased pre-tax income by $1 million in 2019 and decreased pre-tax income by $42 million in 2018. These estimates include the effect of translating profits from local currencies into U.S. dollars; the impact of currency fluctuations on the transfer of goods between 3M operations in the United States and abroad; and transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks. 3M estimates that year-on-year derivative and other transaction gains and losses increased pre-tax income by approximately $201 million in 2019 and decreased pre-tax income by approximately $92 million in 2018. Refer to Note 14 in the Consolidated Financial Statements for additional information concerning 3M’s hedging activities.

PERFORMANCE BY BUSINESS SEGMENT

For a detailed discussion of the markets served and types of products offered by 3M’s business segments, see Item 1, Business Segments. Disclosures relating to 3M’s business segments are provided in Note 19. Effective in the second quarter of 2019, to enable the Company to better serve global customers and markets, the Company made the following changes to its business segments:

Realignment of the Company’s business segments from five to four

The Company realigned its former five business segments into four: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. Existing divisions were largely realigned to this new structure. In addition, certain retail auto care product lines formerly in the Automotive Aftermarket Division (now within the Safety and Industrial business segment) were moved to the Construction and Home Improvement Division (within the Consumer business segment). Also, product lines relating to the refrigeration filtration business, formerly included in the Separation and Purification Sciences Division (now within the Health Care business segment) were moved to Other Safety and Industrial (within the Safety and Industrial business segment). 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. Dual credit, which is based on which business segment provides customer account activity with respect to a particular product sold in a specific country, was reduced as a result of the closer alignment between customer account activity and their respective markets. The four business segments are as follows:

Safety and Industrial: This segment includes businesses that serve the global industrial, electrical and safety markets. This business segment consists of personal safety, industrial adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket, and roofing granules. This segment also includes the Communication Markets Division (which was substantially sold in 2018) and the refrigeration filtration product lines (within Other Safety and Industrial).

Transportation and Electronics: This segment includes businesses that serve global transportation and electronic original equipment manufacturer (OEM) customers. This business segment consists of electronics (display materials and systems, electronic materials solutions), automotive and aerospace, commercial solutions, advanced materials, and transportation safety.

Health Care: This business segment serves the global healthcare industry and includes medical solutions, oral care, separation and purification sciences, health information systems, drug delivery systems, and food safety.

Consumer: This business serves global consumers and consists of home improvement, stationery and office supplies, home care, and consumer health care. This segment also includes, within the Construction and Home Improvement Division, certain retail auto care product lines.

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In addition, as part of 3M’s continuing effort to improve the alignment of its businesses around markets and customers, the Company made the following changes, effective in the first quarter of 2019, and other revisions impacting business segment reporting:

Continued alignment of customer account activity

● As part of 3M’s regular customer-focus initiatives, the Company realigned certain customer account activity (“sales district”) to correlate with the primary divisional product offerings in various countries and reduce complexity for customers when interacting with multiple 3M businesses. This largely impacted the amount of dual credit certain business segments receive as a result of sales district attribution. 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. This dual credit is based on which business segment provides customer account activity with respect to a particular product sold in a specific country.

Creation of Closure and Masking Systems Division and Medical Solutions Division

● 3M created the Closure and Masking Systems Division, which combines the masking tape, packaging tape and personal care portfolios formerly within Industrial Adhesives and Tapes Division in the former Industrial business segment into a separate division also within the former Industrial business segment. 3M created the Medical Solutions Division in the Health Care business segment, which combines the former Critical and Chronic Care Division and Infection Prevention Division (which were also both within the Health Care business segment).

Additional actions impacting business segment reporting

● The business associated with certain safety products sold through retail channels in the Asia Pacific region was realigned from the Personal Safety Division within the former Safety and Graphics business segment to the Construction and Home Improvement Division within the Consumer business segment. In addition, certain previously non-allocated costs related to manufacturing and technology of centrally managed material resource centers of expertise within Corporate and Unallocated are now reflected as being allocated to the business segments.

Business segment information presented herein reflects the impact of these changes for all periods presented. 3M manages its operations in four business segments. The reportable segments are Safety and Industrial; Transportation and Electronics; Health Care; and Consumer.

Corporate and Unallocated:

In addition to these four business segments, 3M assigns certain costs to “Corporate and Unallocated,” which is presented separately in the preceding business segments table and in Note 19. Corporate and Unallocated includes a variety of miscellaneous items, such as corporate investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension) that the Company determines not to allocate directly to its business segments. Corporate and Unallocated also includes sales, costs, and income from contract manufacturing, transition services and other arrangements with the acquirer of the Communication Markets Division following its divestiture in 2018. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

Corporate and Unallocated operating expenses decreased by $166 million in 2019 when compared to 2018. In 2018 and 2019, significant litigation-related charges of $897 million and $762 million, respectively, were reflected in Corporate and Unallocated. In 2018 and 2019, operating expenses included $127 million (net of adjustments for reductions in cost estimates) and $140 million, respectively, of the restructuring actions further discussed in Note 5. In the third quarter, operating expenses were partially offset by a gain related to sales of certain properties. In addition, 3M’s defined benefit pension and postretirement service-cost expense allocation to Corporate and Unallocated decreased year-on-year.

Corporate and Unallocated operating expenses increased by $1 billion in 2018 when compared to 2017. Beginning in the second quarter of 2018, the operating income from contractual manufacturing and other arrangements described in the paragraph above were included in Corporate and Unallocated. In addition, in 2018, operating expenses included the restructuring charge of $127 million, net of adjustments for reductions in cost estimates, as discussed in Note 5 related to addressing corporate functional costs following the Communication Markets Division divestiture. In the first quarter of 2018, the Minnesota NRD resolution ($897 million), inclusive of

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legal fees and other related obligations, was reflected in Corporate and Unallocated. In addition, 3M’s defined benefit pension and postretirement service-cost expense allocation to Corporate and Unallocated increased year-on-year.

Operating Business Segments:

Information related to 3M’s business segments is presented in the tables that follow. Organic local-currency sales include both organic volume impacts plus selling price impacts. Acquisition and divestiture impacts, if any, are measured separately for the first twelve months post-transaction. Foreign currency translation impacts and total sales change are also provided for each business segment. Any references to EMEA relate to Europe, Middle East and Africa on a combined basis.

The following discusses total year results for 2019 compared to 2018 and 2018 compared to 2017, for each business segment. Refer to the preceding year 2019 and 2018 sales results by geographic area/business segment sections for additional sales change information.

Safety and Industrial Business (36.1% of consolidated sales):

	2019			2018			2017
Sales (millions)	$	11,607		$	12,494		$	11,946
Sales change analysis:
Organic local-currency		(3.3)	%		2.8	%
Acquisitions		—			3.7
Divestitures		(1.7)			(2.1)
Translation		(2.1)			0.2
Total sales change		(7.1)	%		4.6	%
Operating income (millions)	$	2,648		$	3,423		$	2,603
Percent change		(22.6)	%		31.5	%
Percent of sales		22.8	%		27.4	%		21.8	%

Year 2019 results:

Sales in Safety and Industrial totaled $11.6 billion, a decrease of 7.1 percent compared to the same period last year. Organic local-currency sales decreased 3.3 percent, divestitures decreased sales by 1.7 percent, and foreign currency translation decreased sales by 2.1 percent.

On an organic local-currency sales basis:

● Sales increased in roofing granules and personal safety, while electrical markets, industrial adhesives and tapes, abrasives, automotive aftermarket, and closure and masking systems declined year-on-year.

Divestitures:

● In February 2018, 3M closed on the sale of certain personal safety product offerings primarily focused on noise, environmental, and heat stress monitoring.

● In May 2018, 3M divested an abrasives glass products business.

● In 2018, 3M completed the sale of substantially all of its Communication Markets Division.

● In August 2019, 3M completed the sale of its gas and flame detection business.

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Operating income:

● Operating income margins decreased 4.6 percentage points, primarily related to the gain on the 2018 divestiture of the Communication Markets Division, partially offset by the gain on the third quarter 2019 divestiture of the gas and flame detection business, resulting in a net year-on-year operating income margin reduction of 3.2 percentage points. Operating income margins were also impacted by sales declines, particularly in Asia Pacific and the U.S, in addition to inventory reductions and restructuring impacts.

Year 2018 results:

Sales in Safety and Industrial totaled $12.5 billion, up 4.6 percent in U.S. dollars, compared to full year 2017. Organic local-currency sales increased 2.8 percent, acquisitions increased sales by 3.7 percent, divestitures decreased sales by 2.1 percent, and foreign currency translation increased sales by 0.2 percent.

On an organic local-currency sales basis:

● Sales growth increased in personal safety, electrical markets, industrial adhesives and tapes, and abrasives, while automotive aftermarket and closure and masking declined.

● Sales also declined in roofing granules, as production slowed within the shingle manufacturing industry when compared to prior year.

Acquisitions and divestitures:

● Acquisition sales growth in 2018 reflects the acquisition of Scott Safety in October 2017. Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus systems.

● In 2018, certain personal safety product offerings primarily focused on noise, environmental, and heat stress monitoring (February 2018), and its abrasives glass products business (May 2018).

● Also in 2018, 3M completed the sale of substantially all of its Communication Markets Division and recorded a pre-tax gain of approximately $509 million. Refer to Note 3 for additional details.

● 2017 divestitures that impacted 2018 results include the sale of its safety prescription eyewear business (first quarter 2017) and assets of its electrical marking/labeling business (fourth quarter 2017).

Operating income:

● Operating income margins increased 5.6 percentage points, primarily driven by the Communication Markets Division divestiture gain.

Transportation and Electronics Business (29.9% of consolidated sales):

	2019			2018			2017
Sales (millions)	$	9,602		$	10,106		$	9,861
Sales change analysis:
Organic local-currency		(3.5)	%		3.7	%
Divestitures		—			(1.7)
Translation		(1.5)			0.5
Total sales change		(5.0)	%		2.5	%
Operating income (millions)	$	2,221		$	2,649		$	2,986
Percent change		(16.1)	%		(11.3)	%
Percent of sales		23.1	%		26.2	%		30.3	%

Year 2019 results:

Sales in Transportation and Electronics totaled $9.6 billion, down 5.0 percent in U.S. dollars. Organic local-currency sales decreased 3.5 percent and foreign currency translation decreased sales by 1.5 percent.

Total sales decreased 6 percent within the electronics-related businesses in addition to a 5 percent decrease in Asia Pacific.

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On an organic local-currency sales basis:

● Sales increased in advanced materials and transportation safety, while commercial solutions and automotive and aerospace solutions declined.

● Automotive and aerospace was impacted by the decline in global car and light truck builds along with channel inventory reductions within its Automotive OEM business, particularly in China.

● Sales decreased 6 percent in 3M’s electronics-related businesses, with decreases in both display materials and systems and electronics materials solutions. Electronics-related growth was impacted by soft consumer electronics and factory automation end markets in addition to channel inventory adjustments.

● Sales decreased 4 percent in Asia Pacific, where 3M’s electronics business is concentrated.

Operating income:

● Operating income margins decreased 3.1 percentage points, primarily impacted by continued sales declines, particularly in Asia Pacific and the U.S, in addition to inventory reductions. Operating income margins were also impacted by the restructuring charges initiated in 2019.

In January 2020, 3M completed the sale of its advanced ballistic-protection business to Avon Rubber p.l.c for $91 million, subject to closing and other adjustments, plus contingent considerations of up to $25 million depending on the outcome of certain tenders. Refer to Note 3 for additional details.

Year 2018 results:

Sales in Transportation and Electronics totaled $10.1 billion, up 2.5 percent in U.S. dollars. Organic local-currency sales increased 3.7 percent, divestitures reduced sales by 1.7 percent, and foreign currency translation increased sales by 0.5 percent.

Total sales within the electronics-related business increased 3 percent and increased 4 percent in Asia Pacific.

On an organic local-currency sales basis:

● Sales increased in advanced materials, commercial solutions, automotive and aerospace and transportation safety.

● Sales also increased 3 percent in 3M’s electronics-related businesses, driven by increases in electronics materials solutions. Sales were flat in display materials and systems due to softness in consumer electronics.

● Sales increased 3 percent in Asia Pacific, where 3M’s electronics business is concentrated.

Divestitures:

● 2017 divestitures that impacted 2018 results included the sale of 3M’s identity management business and tolling and automated license/number plate business (both in second quarter 2017) and electronic monitoring business (fourth quarter 2017).

Operating income:

● Operating income margins decreased 4.1 percentage points, which primarily related to the impact on operating margins from the 2017 gain on sale of the identify management and electronic monitoring businesses.

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Health Care Business (23.1% of consolidated sales):

	2019			2018			2017
Sales (millions)	$	7,431		$	6,826		$	6,635
Sales change analysis:
Organic local-currency		1.6	%		2.6	%
Acquisitions		9.4			—
Divestitures		(0.1)			(0.1)
Translation		(2.0)			0.4
Total sales change		8.9	%		2.9	%
Operating income (millions)	$	1,863		$	1,921		$	1,877
Percent change		(3.0)	%		2.3	%
Percent of sales		25.1	%		28.1	%		28.3	%

Year 2019 results:

Sales in Health Care totaled $7.4 billion, up 8.9 percent in U.S. dollars. Organic local-currency sales increased 1.6 percent, acquisitions increased sales by 9.4 percent, divestitures decreased sales by 0.1 percent, and foreign currency translation decreased sales by 2.0 percent.

On an organic local-currency sales basis:

● Sales increased in health information systems, food safety, and medical solutions, while separation and purification sciences decreased, and oral care was flat.

● Drug delivery declined year-on-year, as continued softness in the business negatively impacted overall Health Care organic growth.

Acquisitions:

● In February 2019, 3M acquired M*Modal, a leading healthcare technology provider of cloud-based, conversational artificial intelligence-powered systems that help physicians efficiently capture and improve the patient narrative.

● In October 2019, 3M completed the acquisition of Acelity Inc. and its KCI subsidiaries, a leading global medical technology company focused on advanced wound care and specialty surgical applications.

Divestitures:

● In the first quarter of 2018, 3M completed the sale of its polymer additives compounding business.

● In the first quarter of 2019, the Company sold certain oral care technology comprising a business.

Operating income:

● Operating income margins decreased 3.0 percentage points year-on-year, driven by a 3.6 percentage point impact related to the M*Modal and Acelity acquisitions. Operating income margin was also impacted by the restructuring charges initiated in 2019.

In December 2019, 3M agreed to sell substantially all of its drug delivery business to an affiliate of Altaris Capital Partners, LLC. Subject to closing and other adjustments, 3M will receive approximately $650 million in consideration. The sale is expected to close in the first half of 2020. See Note 3 for additional details.

Year 2018 results:

Sales in Health Care totaled $6.8 billion, up 2.9 percent in U.S. dollars. Organic local-currency sales increased 2.6 percent, divestitures decreased sales by 0.1 percent, and foreign currency translation increased sales by 0.4 percent.

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On an organic local-currency sales basis:

● Sales growth was led by food safety, health information systems, separation and purification sciences, and medical solutions.

● Oral care sales also increased, with continued positive growth internationally, particularly in developing economies.

● Sales declined in drug delivery systems.

Divestitures:

● In the first quarter of 2018, 3M completed the sale of its polymer additives compounding business.

Operating income:

● Operating income margins decreased 0.2 percentage points year-on-year.

Consumer Business (15.8% of consolidated sales):

	2019			2018			2017
Sales (millions)	$	5,089		$	5,086		$	5,006
Sales change analysis:
Organic local-currency		1.3	%		1.5	%
Acquisitions		—			0.2
Translation		(1.2)			(0.1)
Total sales change		0.1	%		1.6	%
Operating income (millions)	$	1,105		$	1,071		$	1,051
Percent change		3.3	%		1.9	%
Percent of sales		21.7	%		21.0	%		21.0	%

Year 2019 results:

Sales in Consumer totaled $5.1 billion, an increase of 0.1 percent in U.S. dollars. Organic local-currency sales increased 1.3 percent and foreign currency translation decreased sales by 1.2 percent.

On an organic local-currency sales basis:

● Sales grew in home improvement, while stationery and office decreased. Consumer health care and home care were flat.

● Geographically, the U.S. showed particular strength in the Company’s Filtrete^TM and Command^TM brands, while Asia Pacific was impacted by lower consumer demand for respiratory solutions.

Operating income:

● Operating income margins increased 0.7 percentage points year-on-year. Increases in operating income margins were primarily due to benefits from portfolio and footprint actions taken, partially offset by the restructuring charges initiated in 2019.

Year 2018 results:

Sales in Consumer totaled $5.1 billion, an increase of 1.6 percent in U.S. dollars. Organic local-currency sales increased 1.5 percent, acquisitions increased sales by 0.2 percent and foreign currency translation decreased sales by 0.1 percent.

On an organic local-currency sales basis:

● Sales grew in home improvement, building on a track record of strong performance over the past several years.

● Stationery and office supplies and home care were flat, while consumer health care declined.

Acquisitions:

● Acquisition sales growth in 2018 reflects certain safety products sold through retail channels in the Asia Pacific region from the acquisition of Scott Safety in October 2017.

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Operating income:

● Operating income margins were flat year-on-year.

PERFORMANCE BY GEOGRAPHIC AREA

While 3M manages its businesses globally and believes its business segment results are the most relevant measure of performance, the Company also utilizes geographic area data as a secondary performance measure. Export sales are generally reported within the geographic area where the final sales to 3M customers are made. A portion of the products or components sold by 3M’s operations to its customers are exported by these customers to different geographic areas. As customers move their operations from one geographic area to another, 3M’s results will follow. Thus, net sales in a particular geographic area are not indicative of end-user consumption in that geographic area. Financial information related to 3M operations in various geographic areas is provided in Note 19.

Refer to the “Overview” section for a summary of net sales by geographic area and business segment.

Geographic Area Supplemental Information

										Property, Plant and
										Equipment - net
	Employees as of December 31,			Capital Spending						as of December 31,
(Millions, except Employees)	2019	2018	2017	2019		2018		2017		2019		2018
United States	39,662	37,412	36,958	$	1,164	$	994	$	852	$	5,442	$	4,915
Asia Pacific	18,724	18,971	18,283		241		238		209		1,637		1,624
Europe, Middle East and Africa	21,412	20,884	20,869		240		295		256		1,823		1,751
Latin America and Canada	16,365	16,249	15,426		54		50		56		431		448
Total Company	96,163	93,516	91,536	$	1,699	$	1,577	$	1,373	$	9,333	$	8,738

Employment:

Employment increased 2,647 positions in 2019 and increased by 1,980 positions in 2018. The above table includes the impact of acquisitions (which involved approximately 5,500 positions in 2019), net of divestitures and other actions.

Capital Spending/Net Property, Plant and Equipment:

Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product demand and increasing manufacturing efficiency. In 2019, 69% of 3M’s capital spending was within the United States, followed by Asia Pacific, Europe, Middle East and Africa; and Latin America/Canada. 3M is increasing its investment in manufacturing and sourcing capability in order to more closely align its product capability with its sales in major geographic areas in order to best serve its customers throughout the world with proprietary, automated, efficient, safe and sustainable processes. Capital spending is discussed in more detail later in MD&A in the section entitled “Cash Flows from Investing Activities.”

CRITICAL ACCOUNTING ESTIMATES

Information regarding significant accounting policies is included in Note 1 of the consolidated financial statements. As stated in Note 1, the preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The Company believes its most critical accounting estimates relate to legal proceedings, pension and postretirement obligations, goodwill and certain long-lived assets, and uncertainty in income tax positions. Senior management has discussed the development, selection and disclosure of its critical accounting estimates with the Audit Committee of 3M’s Board of Directors.

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Legal Proceedings:

Assessments of lawsuits and claims can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The Company accrues an estimated liability for legal proceeding claims that are both probable and estimable in accordance with Accounting Standard Codification (ASC) 450, Contingencies. Please refer to the section entitled “Process for Disclosure and Recording of Liabilities Related to Legal Proceedings” (contained in “Legal Proceedings” in Note 16) for additional information about such estimates.

Pension and Postretirement Obligations:

The Company makes certain estimates and judgements in relation to its defined benefit pension and postretirement obligations.

The benefit obligation represents the present value of the benefits that employees are entitled to in the future for services already rendered as of the measurement date. The Company measures the present value of these future benefits by projecting benefit payment cash flows for each future period and discounting these cash flows back to the December 31 measurement date, using the yields of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. Service cost and interest cost are measured separately using the spot yield curve approach applied to each corresponding obligation. Service costs are determined based on duration-specific spot rates applied to the service cost cash flows. The interest cost calculation is determined by applying duration-specific spot rates to the year-by-year projected benefit payments. The spot yield curve approach does not affect the measurement of the total benefit obligations as the change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income.

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

	U.S. Qualified Pension		International Pension (weighted average)		U.S. Postretirement Medical
December 31, 2019 Liability:
Benefit obligation	3.25	%	1.81	%	3.13	%
2020 Net Periodic Benefit Cost Components:
Service cost	3.44	%	1.61	%	3.35	%
Interest cost	2.88	%	1.61	%	2.73	%

Another significant element in determining the Company’s pension expense is the expected return on plan assets. The expected return on plan assets for the primary U.S. qualified pension plan is based on strategic asset allocation of the plan, long-term capital market return expectations, and expected performance from active investment management. For the primary U.S. qualified pension plan, the expected long-term rate of return on an annualized basis for 2020 is 6.75%, a decrease from 7.00% in 2019. Return on assets assumptions for international pension and other post-retirement benefit plans are calculated on a plan-by-plan basis using plan asset allocations and expected long-term rate of return assumptions. The weighted average expected return for the international pension plan is 4.70% for 2020, compared to 4.90% for 2019. Refer to Note 13 for information on how the 2019 rates were determined.

3M follows ASC 820, Fair Value Measurements and Disclosures in determining the fair value of plan assets within the Company’s pension and postretirement benefit plans. While the Company believes the valuation methods used to determine the fair value of plan assets are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. See Note 13 for additional discussion of actuarial assumptions used in determining defined benefit pension and postretirement health care liabilities and expenses.

For the year ended December 31, 2019, the Company recognized consolidated defined benefit pre-tax pension and postretirement service cost expense of $425 million and a benefit of $68 million related to all non-service pension and postretirement net benefit costs (after settlements, curtailments, special termination benefits and other) for a total consolidated defined benefit pre-tax pension and postretirement expense of $357 million, down from $410 million in 2018.

In 2020, defined benefit pension and postretirement service cost expense is anticipated to total approximately $458 million while non-service pension and postretirement net benefit costs (before settlements, curtailments, special termination benefits and other) is

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anticipated to be a benefit of approximately $67 million, for a total consolidated defined benefit pre-tax pension and postretirement expense of $391 million, an increase of approximately $34 million compared to 2019.

The table below summarizes the impact on 2020 pension expense for the U.S. and international pension plans of a 0.25 percentage point increase/decrease in the expected long-term rate of return on plan assets and discount rate assumptions used to measure plan liabilities and 2019 net periodic benefit cost. The table assumes all other factors are held constant, including the slope of the discount rate yield curves.

	Increase (Decrease) in Net Periodic Benefit Cost
	Discount Rate				Expected Return on Assets
(Millions)	-0.25%		+0.25%		-0.25%		+0.25%
U.S. pension plans	$	36	$	(35)	$	38	$	(38)
International pension plans		24		(24)		17		(17)

Goodwill and Certain Long-Lived Assets:

The Company makes certain estimates and judgments in relation to goodwill and certain long-lived assets. Those include considerations made in the valuation of certain acquired identifiable definite-lived and indefinite-lived assets as a result of business combinations as well as considerations in the recoverability and impairment assessments of long-lived assets and goodwill.

Acquisition of certain identifiable definite-lived and indefinite-lived assets

In conjunction with an acquisition of a business, the Company records identifiable definite-lived and indefinite-lived intangible assets acquired at their respective fair values as of the date of acquisition. The corresponding fair value estimates for these assets acquired include projected future cash flows, associated discount rates used to calculate present value, asset life cycles, royalty rates, and customer retention rates. The fair value calculated for indefinite-lived intangible assets such as certain tradenames, in addition to intangible assets that are definite-lived such as patents, customer relationships, tradenames and other technology-based assets may change during the finalization of the purchase price allocation, due to the significant estimates used in determining their fair value. As a result, the Company may make adjustments to the provisional amounts recorded for certain items as part of the purchase price allocation subsequent to the acquisition, not to exceed one year after the acquisition date, until the purchase accounting allocation is finalized.

Assessments of long-lived assets and goodwill

As of December 31, 2019, net property, plant and equipment totaled $9.3 billion and net identifiable intangible assets totaled $6.4 billion, of which $0.6 billion related to indefinite-lived tradenames. In addition, 3M goodwill totaled approximately $13.4 billion as of December 31, 2019. Long-lived assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount exceeds the estimated undiscounted cash flows from the asset’s or asset group’s ongoing use and eventual disposition. If an impairment is identified, the amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Indefinite-lived intangible assets are tested for impairment annually and are tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. An impairment loss would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset. Goodwill is tested for impairment annually in the fourth quarter of each year, as further discussed below, and is tested between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. If future non-cash asset impairment charges are taken, 3M would expect that only a portion of the long-lived assets or goodwill would be impaired.

Management makes estimates and assumptions in preparing the consolidated financial statements for which actual results will emerge over long periods of time. This includes the recoverability of long-lived assets employed in the business, including assets of acquired businesses. These estimates and assumptions are closely monitored by management and periodically adjusted as circumstances warrant. For instance, expected asset lives may be shortened or an impairment recorded based on a change in the expected use of the asset or performance of the related asset group. Factors which could result in future impairment charges include, among others, changes in worldwide economic conditions, changes in competitive conditions and customer preferences, and fluctuations in foreign currency exchange rates. These risk factors are discussed in Item 1A, “Risk Factors,” of this document. In addition, changes in the weighted average cost of capital could also impact impairment testing results.

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As of December 31, 2019, the $0.6 billion of indefinite-lived tradenames primarily relates to Capital Safety (acquired in 2015), whose tradenames ($520 million at acquisition date) have been in existence for over 55 years (refer to Note 4 for more detail). The primary valuation technique used in estimating the fair value of indefinite lived intangible assets (tradenames) is a discounted cash flow approach. Specifically, a relief of royalty rate is applied to estimated sales, with the resulting amounts then discounted using an appropriate market/technology discount rate. The relief of royalty rate is the estimated royalty rate a market participant would pay to acquire the right to market/produce the product. Based on impairment testing in the third quarter of 2019, no impairment was indicated. The discounted cash flows related to the Capital Safety tradenames exceeded its book value by more than 20 percent in aggregate.

3M goodwill totaled approximately $13.4 billion as of December 31, 2019. 3M’s annual goodwill impairment testing is performed in the fourth quarter of each year. Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting unit. Reporting units are one level below the business segment level, but are required to be combined when reporting units within the same segment have similar economic characteristics. At 3M, reporting units correspond to a division. 3M did not combine any of its reporting units for impairment testing. An impairment loss would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit, and the loss would equal that difference. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups, or by using a discounted cash flow analysis. 3M typically uses the price/earnings ratio approach for stable and growing businesses that have a long history and track record of generating positive operating income and cash flows. 3M uses the discounted cash flow approach for start-up, loss position and declining businesses, in addition to using for businesses where the price/earnings ratio valuation method indicates additional review is warranted. 3M also uses discounted cash flow as an additional tool for businesses that may be growing at a slower rate than planned due to economic or other conditions. Where applicable, 3M used a weighted-average discounted cash flow analysis for certain divisions, using projected cash flows that were weighted based on different sales growth and terminal value assumptions, among other factors. The weighting was based on management’s estimates of the likelihood of each scenario occurring.

As described in Note 19, effective in the second quarter of 2019, the Company realigned its former five business segments into four to enable the Company to better serve global customers and markets. In addition, effective in the first quarter of 2019, 3M made business segment reporting changes to align its businesses around markets and customers. For any product moves that resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact on goodwill of the associated reporting units. During both the first and second quarters of 2019, the Company completed its assessment of any potential goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed. The discussion that follows relates to the separate fourth quarter 2019 annual impairment test and is in the context of the reporting unit structure that existed at that time.

Based on the annual test in the fourth quarter of 2019, no goodwill impairment was indicated for any of the reporting units. As of October 1, 2019, 3M had 23 primary reporting units, with ten reporting units accounting for approximately 91 percent of the goodwill. These ten reporting units were comprised of the following divisions: Advanced Materials, Display Materials and Systems, Electronics Materials Solutions, Health Information Systems, Industrial Adhesives and Tapes, Medical Solutions, Oral Care Solutions, Personal Safety, Separation and Purification Sciences, and Transportation Safety.

3M is a highly integrated enterprise, where businesses share technology and leverage common fundamental strengths and capabilities, thus many of 3M’s businesses could not easily be sold on a stand-alone basis. 3M’s focus on research and development has resulted in a portion of 3M’s value being comprised of internally developed businesses that have no goodwill associated with them.

3M will continue to monitor its reporting units and asset groups in 2020 for any triggering events or other indicators of impairment.

Uncertainty in Income Tax Positions:

The extent of 3M’s operations involves dealing with uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company follows guidance provided by ASC 740, Income Taxes, a subset of which relates to uncertainty in income taxes, to record these liabilities (refer to Note 10 for additional

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information). The Company adjusts these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the tax liabilities. If the Company’s estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding new accounting pronouncements is included in Note 1 to the Consolidated Financial Statements.

FINANCIAL CONDITION AND LIQUIDITY

The strength and stability of 3M’s business model and strong free cash flow capability, together with proven capital markets access, positions the Company to be able to add further leverage to its capital structure. Investing in 3M’s businesses to drive organic growth remains the first priority for capital deployment, including research and development, capital expenditures, and commercialization capability. Investment in organic growth will be supplemented by complementary acquisitions. 3M will also continue to return cash to shareholders through dividends and share repurchases. Sources for cash availability in the United States, such as ongoing cash flow from operations and access to capital markets, have historically been sufficient to fund dividend payments to shareholders, as well as funding U.S. acquisitions and other items as needed. The TCJA creates additional repatriation opportunities for 3M to access international cash positions on a continual and on-going basis and will help support U.S. capital deployments needs. For those international earnings still considered to be reinvested indefinitely, the Company currently has no plans or intentions to repatriate these funds for U.S. operations. See Note 10 for further information on earnings considered to be reinvested indefinitely.

3M’s primary short-term liquidity needs are met through cash on hand and U.S. commercial paper issuances. 3M believes it will have continuous access to the commercial paper market. 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. At December 31, 2019, there was approximately $150 million in commercial paper issued and outstanding.

Total Debt:

The strength of 3M’s capital structure and significant ongoing cash flows provide 3M proven access to capital markets. Additionally, the Company’s maturity profile is staggered to help ensure refinancing needs in any given year are reasonable in proportion to the total portfolio. 3M currently has an A1 credit rating with a stable outlook from Moody’s Investors Service and has an AA- credit rating with Standard & Poor’s; Standard & Poor’s placed 3M on “CreditWatch Negative” in January 2020.

The Company’s total debt was $5.7 billion higher at December 31, 2019 when compared to December 31, 2018. Increases in debt related to the first quarter and third quarter 2019 issuances of $2.25 billion of medium-term notes and $3.25 billion of other registered notes, respectively, in addition to the 69 billion Japanese Yen (approximately $632 million at December 31, 2019 exchange rates) outstanding from the 80 billion Japanese Yen credit facility established in September 2019 and the 150 million Euro (approximately $168 million at December 31, 2019 exchange rates) outstanding credit facility established in November 2019. Total debt also increased as a result of debt assumed from the October 2019 Acelity Inc. acquisition that was not settled at close as discussed below. These increases were partially offset by the June 2019 repayment of $625 million aggregate principal amount of fixed-rate medium-term notes that matured in addition to lower commercial paper outstanding. For discussion of repayments of and proceeds from debt refer to the following “Cash Flows from Financing Activities” section.

In conjunction with the October 2019 acquisition of Acelity Inc. of the debt assumed, 3M did not immediately settle at close $0.5 billion of notes and, instead, satisfied and discharged those notes via an in-substance defeasance. Refer to Note 12 for additional information.

In July 2017, the United Kingdom’s Financial Conduct Authority announced that it would no longer require banks to submit rates for the London InterBank Offered Rate (“LIBOR”) after 2021. The Company is in the process of reviewing its debt securities, bank facilities, derivative instruments and commercial contracts that utilize LIBOR as the reference rate. 3M will continue its impact assessment and monitor regulatory developments during the transition period.

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Effective February 24, 2017, the Company updated its “well-known seasoned issuer” (WKSI) shelf registration statement, which registers an indeterminate amount of debt or equity securities for future issuance and sale. This replaced 3M’s previous shelf registration dated May 16, 2014. In May 2016, in connection with the WKSI shelf, 3M entered into an amended and restated distribution agreement relating to the future issuance and sale (from time to time) of the Company’s medium-term notes program (Series F), up to the aggregate principal amount of $18 billion, which was an increase from the previous aggregate principal amount up to $9 billion of the same Series.

As of December 31, 2019, the total amount of debt issued as part of the medium-term notes program (Series F), inclusive of debt issued in February 2019 and prior years is approximately $17.6 billion (utilizing the foreign exchange rates applicable at the time of issuance for the Euro denominated debt). Additionally, the August 2019 debt was issued under the WKSI shelf registration, but not as part of the medium-term notes program (Series F). Information with respect to long-term debt issuances and maturities for the periods presented is included in Note 12.

In November 2019, 3M amended and restated its existing $3.75 billion five-year revolving credit facility expiring in March 2021 to a $3.0 billion five-year revolving credit facility expiring in November 2024. The revolving credit agreement includes a provision under which 3M may request an increase of up to $1.0 billion (at lender’s discretion), bringing the total facility up to $4.0 billion. In addition, 3M entered into a $1.25 billion 364-day credit facility expiring in November 2020. The 364-day credit agreement includes a provision under which 3M may convert any advances outstanding on the maturity date into term loans with a maturity date one year later. These credit facilities were undrawn at December 31, 2019. Under both the $3.0 billion and $1.25 billion credit agreements, 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 (as defined in the agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At December 31, 2019, this ratio was approximately 17 to 1. Debt covenants do not restrict the payment of dividends.

Apart from the committed credit facilities described above, in September 2019, 3M entered into a credit facility expiring in July 2020 in the amount of 80 billion Japanese Yen. At December 31, 2019, 69 billion Japanese Yen, or approximately $632 million at December 31, 2019 exchange rates, was drawn and outstanding. In November 2019, 3M entered into a credit facility expiring in November 2020 in the amount of 150 million Euros. At December 31, 2019, 150 million Euros, or $168 million at December 31, 2019 exchange rates, was drawn and outstanding. The Company also had an additional $268 million in stand-alone letters of credit and bank guarantees were also issued and outstanding at December 31, 2019. These instruments are utilized in connection with normal business activities.

Cash, Cash Equivalents and Marketable Securities:

At December 31, 2019, 3M had $2.5 billion of cash, cash equivalents and marketable securities, of which approximately $2.4 billion was held by the Company’s foreign subsidiaries and approximately $100 million was held by the United States. These balances are invested in bank instruments and other high-quality fixed income securities. At December 31, 2018, 3M had $3.3 billion of cash, cash equivalents and marketable securities, of which approximately $3.1 billion was held by the Company’s foreign subsidiaries and approximately $160 million was held by the United States. Specifics concerning marketable securities investments are provided in Note 11.

Net Debt (non-GAAP measure):

Net debt is not defined under U.S. GAAP and may not be computed the same as similarly titled measures used by other companies. The Company defines net debt as total debt less the total of cash, cash equivalents and current and long-term marketable securities.

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3M believes net debt is meaningful to investors as 3M considers net debt and its components to be important indicators of liquidity and financial position. The following table provides net debt as of December 31, 2019 and 2018.

	December 31,					2019 versus
(Millions)	2019		2018		2018
Total debt	$	20,313	$	14,622	$	5,691
Less: Cash, cash equivalents and marketable securities		2,494		3,270		(776)
Net debt (non-GAAP measure)	$	17,819	$	11,352	$	6,467

Refer to the preceding “Total Debt” and “Cash, Cash Equivalents and Marketable Securities” sections for additional details.

Balance Sheet:

3M’s continuous focus on its balance sheet and liquidity provide the Company with significant flexibility to fund its numerous opportunities going forward. The Company will continue to invest in its operations to drive growth, including continual review of acquisition opportunities.

The Company uses working capital measures that place emphasis and focus on certain working capital assets, such as accounts receivable and inventory activity.

Working Capital (non-GAAP measure):

	December 31,					2019 versus
(Millions)		2019		2018		2018
Current assets	$	12,971	$	13,709	$	(738)
Less: Current liabilities		9,222		7,244		1,978
Working capital (non-GAAP measure)	$	3,749	$	6,465	$	(2,716)

Various assets and liabilities, including cash and short-term debt, can fluctuate significantly from month to month depending on short-term liquidity needs. Working capital is not defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures used by other companies. The Company defines working capital as current assets minus current liabilities. 3M believes working capital is meaningful to investors as a measure of operational efficiency and short-term financial health.

Working capital decreased $2,716 million compared with December 31, 2018. Current asset balance changes decreased working capital by $738 million, driven by reductions in cash and cash equivalents. Working capital decreases also relate to decreases in accounts receivable and in inventories (discussed further below). Current liability balance changes decreased working capital by $1,978 million, primarily due to increases the current portion of long-term debt due to upcoming maturities in 2020, accruals related to respirator mask/asbestos and other environmental liabilities, net of related subsequent payments (refer to Note 16 for additional details on these accruals), in addition to the current portion of operating lease liabilities due to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (refer to Note 17 for additional details on leases).

Accounts receivable decreased $229 million from December 31, 2018, primarily due to lower year-on-year sales in addition to continued focus on improving cash flows, partially offset by the receivables acquired from the M*Modal and Acelity Inc. acquisitions. Inventory decreased $232 million from December 31, 2018 as a result of the Company’s commitment to improve its response to slowing growth conditions in several key end markets and channel inventory adjustments by customers partially offset by inventory from the Acelity Inc. acquisition.

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Return on Invested Capital (non-GAAP measure):

Return on Invested Capital (ROIC) is not defined under U.S. generally accepted accounting principles. Therefore, ROIC 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 ROIC as adjusted net income (net income including non-controlling interest plus after-tax interest expense) divided by average invested capital (equity plus debt). The Company believes ROIC is meaningful to investors as it focuses on shareholder value creation. The calculation is provided in the below table.

In 2019, ROIC of 17.5 percent was lower than 2018. The decrease in 2019 when compared to 2018 was driven by lower net income from the 2019 impact of significant litigation-related charges in addition to the charge from the deconsolidation of the Company’s Venezuela subsidiary. ROIC was also negatively impacted by the increase in cash and cash equivalents in anticipation of the funding of the acquisition of Acelity.

In 2018, ROIC of 22.2 percent was higher than 2017. The increase in 2018 when compared to 2017 was negatively impacted by the measurement period adjustments taken in 2018 to the expense recorded in December 2017 from the enactment of the TCJA, the impact from the resolution of the Minnesota natural resource damages (NRD) resolution, and the impact from the gain on sale of the Communication Markets Division, net of restructuring actions related to addressing corporate functional costs following the divestiture, which combined reduced ROIC by 2 percentage points in 2018.

Years ended December 31
(Millions)	2019			2018			2017
Return on Invested Capital (non-GAAP measure)
Net income including non-controlling interest	$	4,582		$	5,363		$	4,869
Interest expense (after-tax) (1)		359			268			208
Adjusted net income (Return)	$	4,941		$	5,631		$	5,077
Average shareholders' equity (including non-controlling interest) (2)	$	10,198		$	10,407		$	11,627
Average short-term and long-term debt (3)		17,982			14,912			12,156
Average invested capital	$	28,180		$	25,318		$	23,783
Return on invested capital (non-GAAP measure)		17.5	%		22.2	%		21.3	%
(1) Effective income tax rate used for interest expense		19.8	%		23.4	%		35.5	%
(2) Calculation of average equity (includes non-controlling interest)
Ending total equity as of:
March 31	$	9,757		$	11,039		$	11,040
June 30		10,142			10,428			11,644
September 30		10,764			10,311			12,202
December 31		10,126			9,848			11,622
Average total equity	$	10,198		$	10,407		$	11,627
(3) Calculation of average debt
Ending short-term and long-term debt as of:
March 31	$	16,370		$	15,660		$	11,711
June 30		15,806			14,519			11,301
September 30		19,439			14,846			11,663
December 31		20,313			14,622			13,949
Average short-term and long-term debt	$	17,982		$	14,912		$	12,156

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Cash Flows:

Cash flows from operating, investing and financing activities are provided in the tables that follow. Individual amounts in the Consolidated Statement of Cash Flows exclude the effects of acquisitions, divestitures and exchange rate impacts on cash and cash equivalents, which are presented separately in the cash flows. Thus, the amounts presented in the following operating, investing and financing activities tables reflect changes in balances from period to period adjusted for these effects.

Cash Flows from Operating Activities:

Years Ended December 31
(Millions)	2019		2018		2017
Net income including noncontrolling interest	$	4,582	$	5,363	$	4,869
Depreciation and amortization		1,593		1,488		1,544
Company pension and postretirement contributions		(210)		(370)		(967)
Company pension and postretirement expense		357		410		334
Stock-based compensation expense		278		302		324
Gain on sale of businesses		(111)		(545)		(586)
Income taxes (deferred and accrued income taxes)		(68)		77		1,074
Loss on deconsolidation of Venezuelan subsidiary		162		—		—
Accounts receivable		345		(305)		(245)
Inventories		370		(509)		(387)
Accounts payable		(117)		408		24
Other — net		(111)		120		256
Net cash provided by operating activities	$	7,070	$	6,439	$	6,240

Cash flows from operating activities can fluctuate significantly from period to period, as pension funding decisions, tax timing differences and other items can significantly impact cash flows.

In 2019, cash flows provided by operating activities increased $631 million compared to the same period last year, with this increase primarily due to lower year-on-year significant litigation-related charges and the timing of associated payments. Additional factors that increased operating cash flows were decreases in inventory and accounts receivable. The combination of accounts receivable, inventories and accounts payable increased working capital by $598 million in 2019, compared to the working capital decreases of $406 million in 2018. Additional discussion on working capital changes is provided earlier in the “Financial Condition and Liquidity” section.

In 2018, cash flows provided by operating activities increased $199 million compared to the same period last year, with the increase primarily made up of higher net income and lower year-on-year pension and postretirement contributions. The increase was partially offset primarily due to the significant litigation-related charges from the previously disclosed resolution of the Minnesota natural resource damages (NRD) in the first quarter of 2018 and year-on-year increases in income tax payments. Additional factors that decreased operating cash flows were increases in inventory and accounts receivable. The combination of accounts receivable, inventories and accounts payable increased working capital by $406 million in 2018, compared to the working capital increases of $608 million in 2017. Additional discussion on working capital changes is provided earlier in the “Financial Condition and Liquidity” section.

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Cash Flows from Investing Activities:

Years ended December 31
(Millions)	2019		2018		2017
Purchases of property, plant and equipment (PP&E)	$	(1,699)	$	(1,577)	$	(1,373)
Proceeds from sale of PP&E and other assets		123		262		49
Acquisitions, net of cash acquired		(4,984)		13		(2,023)
Purchases and proceeds from maturities and sale of marketable securities and investments, net		(192)		669		(798)
Proceeds from sale of businesses, net of cash sold		236		846		1,065
Other — net		72		9		(6)
Net cash provided by (used in) investing activities	$	(6,444)	$	222	$	(3,086)

Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product demand and increasing manufacturing efficiency. The Company expects 2020 capital spending to be approximately $1.6 billion to $1.8 billion as 3M continues to invest in its businesses.

3M invests in renewal and maintenance programs, which pertain to cost reduction, cycle time, maintaining and renewing current capacity, eliminating pollution, and compliance. Costs related to maintenance, ordinary repairs, and certain other items are expensed. 3M also invests in growth, which adds to capacity, driven by new products, both through expansion of current facilities and new facilities. Finally, 3M also invests in other initiatives, such as information technology (IT), laboratory facilities, and a continued focus on investments in sustainability.

Refer to Note 3 for information on acquisitions and divestitures. The Company is actively considering additional acquisitions, investments and strategic alliances, and from time to time may also divest certain businesses. Acquisitions, net of cash acquired, in 2019 primarily includes the purchase of M*Modal and Acelity Inc. Proceeds from sale of businesses in 2019 primarily relate to the sale of 3M’s gas and flame detection business and the sale of certain oral care technology comprising a business.

Purchases of marketable securities and investments and proceeds from maturities and sale of marketable securities and investments are primarily attributable to asset-backed securities, certificates of deposit/time deposits, commercial paper, and other securities, which are classified as available-for-sale. Purchases of marketable securities and investments include the purchase of a $0.5 billion of held-to-maturity treasury security (further discussed in Note 11) that was transferred to a trust as part of the in-substance defeasance of a portion of the debt assumed as a result of the Company’s acquisition of Acelity Inc. Refer to Note 11 for more details about 3M’s diversified marketable securities portfolio. Purchases of investments include additional survivor benefit insurance, plus investments in equity securities.

Cash Flows from Financing Activities:

Years ended December 31
(Millions)	2019		2018		2017
Change in short-term debt — net	$	(316)	$	(284)	$	578
Repayment of debt (maturities greater than 90 days)		(2,716)		(1,034)		(962)
Proceeds from debt (maturities greater than 90 days)		6,281		2,251		1,987
Total cash change in debt	$	3,249	$	933	$	1,603
Purchases of treasury stock		(1,407)		(4,870)		(2,068)
Proceeds from issuances of treasury stock pursuant to stock option and benefit plans		547		485		734
Dividends paid to stockholders		(3,316)		(3,193)		(2,803)
Other — net		(197)		(56)		(121)
Net cash used in financing activities	$	(1,124)	$	(6,701)	$	(2,655)

2019 Debt Activity:

Total debt was approximately $20.3 billion at December 31, 2019 and $14.6 billion at December 31, 2018. Increases in debt related to the first quarter and third quarter 2019 issuances of $2.25 billion of medium-term notes and $3.25 billion of other registered notes,

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respectively, 69 billion Japanese Yen (approximately $632 million at December 31, 2019 exchange rates) outstanding from the 80 billion Japanese Yen credit facility established in September 2019, 150 million Euro (approximately $168 million at December 31, 2019 exchange rates) outstanding credit facility established in November 2019, and $0.5 billion of debt assumed and not yet repaid as a result of the Company’s acquisition of Acelity Inc. Repayment of debt primarily consists of the June 2019 repayment of $625 million aggregate principal amount of fixed-rate medium-term notes that had matured, in addition to debt assumed and subsequently repaid as a result of the Company’s acquisitions of M*Modal and Acelity Inc. as discussed in Note 3. Outstanding commercial paper was $150 million at December 31, 2019, as compared to $435 million at December 31, 2018. Net commercial paper issuances, repayments and borrowings by international subsidiaries are largely reflected in “Change in short-term debt – net” in the preceding table. 3M’s primary short-term liquidity needs are met through cash on hand and U.S. commercial paper issuances. Refer to Note 12 for more detail regarding debt issuances.

2018 Debt Activity:

The Company’s total debt was $0.7 billion higher at December 31, 2018 when compared to December 31, 2017. Increases in debt related to the third quarter 2018 issuance of $2.25 billion of medium-term notes, which was partially offset by the $450 million third quarter repayment and 500 million Euro fourth quarter repayment of maturing medium-term notes, the net impact of repayments and borrowings of international subsidiaries along with foreign currency effects, and lower year on year commercial paper balance. Outstanding commercial paper decreased $310 million from December 31, 2017 to December 31, 2018. Net commercial paper issuances and repayments and borrowings by international subsidiaries are largely reflected in “Change in short-term debt – net” in the preceding table. 3M’s primary short-term liquidity needs are met through cash on hand and U.S. commercial paper issuances. Refer to Note 12 for more detail regarding debt issuances.

Repurchases of Common Stock:

Repurchases of common stock are made to support the Company’s stock-based employee compensation plans and for other corporate purposes. In November 2018, 3M’s Board of Directors replaced the Company’s February 2016 repurchase program with a new repurchase program. This new program authorizes the repurchase of up to $10 billion of 3M’s outstanding common stock, with no pre-established end date. In 2019, the Company purchased $1.4 billion of its own stock, compared to purchases of $4.9 billion and $2.1 billion in 2018 and 2017, respectively. The Company expects full-year 2020 gross share repurchases to be approximately $1.0 billion. For more information, refer to the table titled “Issuer Purchases of Equity Securities” in Part II, Item 5. The Company does not utilize derivative instruments linked to the Company’s stock.

Dividends Paid to Shareholders:

Cash dividends paid to shareholders totaled $3.316 billion ($5.76 per share) in 2019, $3.193 billion ($5.44 per share) in 2018, and $2.803 billion $4.70 per share) in 2017. 3M has paid dividends since 1916. In February 2020, 3M’s Board of Directors declared a first-quarter 2020 dividend of $1.47 per share, an increase of 2 percent. This is equivalent to an annual dividend of $5.88 per share and marked the 62^nd consecutive year of dividend increases.

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 cash overdraft balances, and principal payments for finance leases.

Free Cash Flow (non-GAAP measure):

Free cash flow and free cash flow conversion are not defined under U.S. generally accepted accounting principles (GAAP). Therefore, they should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The Company defines free cash flow conversion as free cash flow divided by net income attributable to 3M. The Company believes free cash flow and free cash flow conversion are meaningful to investors as they are useful measures of performance and the Company uses these measures as an indication of the strength of the company and its ability to

47

generate cash. The first quarter of each year is typically 3M’s seasonal low for free cash flow and free cash flow conversion. Below find a recap of free cash flow and free cash flow conversion for 2019, 2018 and 2017.

In 2019, free cash flow conversion was impacted by the $762 million pre-tax charge related to the significant litigation-related charges, the $162 million pre-tax impact from the deconsolidation of the Company’s Venezuelan subsidiary, and the $112 million pre-tax divestiture gain from the gas and flame detection business.

In 2018, free cash flow conversion was impacted by the $176 million measurement period adjustment to the tax expense recorded in December 2017 from the enactment of the TCJA, the $897 million pre-tax charge related to the significant litigation-related charges from the previously disclosed resolution of the Minnesota natural resource damages (NRD), and the $381 million pre-tax gain on sale of the Communication Markets Division, net of restructuring actions related to addressing corporate functional costs following the divestiture.

Refer to the preceding “Cash Flows from Operating Activities” section for discussion of additional items that impacted operating cash flow. Refer to the preceding “Cash Flows from Investing Activities” section for discussion on capital spending for property, plant and equipment.

Years ended December 31
(Millions)	2019			2018			2017
Major GAAP Cash Flow Categories
Net cash provided by (used in) operating activities	$	7,070		$	6,439		$	6,240
Net cash provided by (used in) investing activities		(6,444)			222			(3,086)
Net cash provided by (used in) financing activities		(1,124)			(6,701)			(2,655)
Free Cash Flow (non-GAAP measure)
Net cash provided by (used in) operating activities	$	7,070		$	6,439		$	6,240
Purchases of property, plant and equipment (PP&E)		(1,699)			(1,577)			(1,373)
Free cash flow	$	5,371		$	4,862		$	4,867
Net income attributable to 3M	$	4,570		$	5,349		$	4,858
Free cash flow conversion		118	%		91	%		100	%

Off-Balance Sheet Arrangements and Contractual Obligations:

As of December 31, 2019, the Company has not utilized special purpose entities to facilitate off-balance sheet financing arrangements. Refer to the section entitled “Warranties/Guarantees” in Note 16 for discussion of accrued product warranty liabilities and guarantees.

In addition to guarantees, 3M, in the normal course of business, periodically enters into agreements that require the Company to indemnify either major customers or suppliers for specific risks, such as claims for injury or property damage arising out of the use of 3M products or the negligence of 3M personnel, or claims alleging that 3M products infringe third-party patents or other intellectual property. While 3M’s maximum exposure under these indemnification provisions cannot be estimated, these indemnifications are not expected to have a material impact on the Company’s consolidated results of operations or financial condition.

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Contractual Obligations

A summary of the Company’s significant contractual obligations as of December 31, 2019, follows:

			Payments due by year
													After
(Millions)	Total		2020		2021		2022		2023		2024		2024
Total debt (Note 12)	$	20,313	$	2,795	$	1,682	$	1,603	$	1,811	$	1,101	$	11,321
Interest on long-term debt		6,185		508		471		424		398		362		4,022
Operating leases (Note 17)		931		267		191		138		97		65		173
Finance leases (Note 17)		138		21		17		16		15		14		55
Tax Cuts and Jobs Act (TCJA) transition tax (Note 10)		686		33		69		69		129		172		214
Unconditional purchase obligations and other		1,689		990		280		159		187		45		28
Total contractual cash obligations	$	29,942	$	4,614	$	2,710	$	2,409	$	2,637	$	1,759	$	15,813

Long-term debt payments due in 2020 include floating rate notes totaling $149 million as a result of put provisions associated with these debt instruments.

During the fourth quarter of 2017, 3M recorded a net tax expense related to the enactment of the Tax Cuts and Jobs Act (TCJA). The expense is primarily related to the TCJA’s transition tax. The transition tax is payable over 8 years at the election of the taxpayer. See Note 10 for additional details.

Unconditional purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding on the Company. Included in the unconditional purchase obligations category above are certain obligations related to take or pay contracts, capital commitments, service agreements and utilities. These estimates include both unconditional purchase obligations with terms in excess of one year and normal ongoing purchase obligations with terms of less than one year. Many of these commitments relate to take or pay contracts, in which 3M guarantees payment to ensure availability of products or services that are sold to customers. The Company expects to receive consideration (products or services) for these unconditional purchase obligations. Contractual capital commitments are included in the preceding table, but these commitments represent a small part of the Company’s expected capital spending. The purchase obligation amounts do not represent the entire anticipated purchases in the future but represent only those items for which the Company is contractually obligated. The majority of 3M’s products and services are purchased as needed, with no unconditional commitment. For this reason, these amounts will not provide a reliable indicator of the Company’s expected future cash outflows on a stand-alone basis.

Other obligations, included in the preceding table within the caption entitled “Unconditional purchase obligations and other” include the current portion of the liability for uncertain tax positions under ASC 740, which is expected to be paid out in cash in the next 12 months, when applicable. The Company is not able to reasonably estimate the timing of the long-term payments, or the amount by which the liability will increase or decrease over time; therefore, the long-term portion of the total net tax liability of $961 million is excluded from the preceding table. In addition, the transition tax prescribed under the Tax Cuts and Jobs Act (TCJA) is separately included in the table above. Refer to Note 10 for further details. Additionally, included within the caption entitled “Unconditional purchase obligations and other” are operating lease commitments that have not yet commenced, which as of December 31, 2019, totaled approximately $23 million. These commitments pertain to 3M’s right of use buildings.

As discussed in Note 13, the Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2019 and Company contributions to its U.S. and international pension plans are expected to be largely discretionary in future years; therefore, amounts related to these plans are not included in the preceding table.

FINANCIAL INSTRUMENTS

The Company enters into foreign exchange forward contracts, options and swaps to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies and certain intercompany financing transactions. The Company manages interest rate risks using a mix of fixed and floating rate debt. To help manage borrowing costs, the Company may enter into interest rate swaps. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and

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floating interest amounts calculated by reference to an agreed-upon notional principal amount. The Company manages commodity price risks through negotiated supply contracts, price protection agreements and commodity price swaps.

Refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”, for further discussion of foreign exchange rates risk, interest rates risk, commodity prices risk and value at risk analysis.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

In the context of Item 7A, 3M is exposed to market risk due to the risk of loss arising from adverse changes in foreign currency exchange rates, interest rates and commodity prices. Changes in those factors could impact the Company’s results of operations and financial condition. Senior management provides oversight for risk management and derivative activities, determines certain of the Company’s financial risk policies and objectives, and provides guidelines for derivative instrument utilization. Senior management also establishes certain associated procedures relative to control and valuation, risk analysis, counterparty credit approval, and ongoing monitoring and reporting.

The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. The Company does not anticipate nonperformance by any of these counterparties.

Foreign Exchange Rates Risk:

Foreign currency exchange rates and fluctuations in those rates may affect the Company’s net investment in foreign subsidiaries and may cause fluctuations in cash flows related to foreign denominated transactions. 3M is also exposed to the translation of foreign currency earnings to the U.S. dollar. The Company enters into foreign exchange forward and option contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. 3M may dedesignate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The maximum length of time over which 3M hedges its exposure to the variability in future cash flows of the forecasted transactions is 36 months. In addition, 3M enters into foreign currency forward contracts that are not designated in hedging relationships to offset, in part, the impacts of certain intercompany activities (primarily associated with intercompany licensing arrangements and intercompany financing transactions). As circumstances warrant, the Company also uses foreign currency forward contracts and foreign currency denominated debt as hedging instruments to hedge portions of the Company’s net investments in foreign operations. The dollar equivalent gross notional amount of the Company’s foreign exchange forward and option contracts designated as either cash flow hedges or net investment hedges was $3.0 billion at December 31, 2019. The dollar equivalent gross notional amount of the Company’s foreign exchange forward and option contracts not designated as hedging instruments was $2.7 billion at December 31, 2019. In addition, as of December 31, 2019, the Company had 4.1 billion Euros in principal amount of foreign currency denominated debt designated as non-derivative hedging instruments in certain net investment hedges as discussed in Note 14 in the “Net Investment Hedges” section.

Interest Rates Risk:

The Company may be impacted by interest rate volatility with respect to existing debt and future debt issuances. 3M manages interest rate risk and expense using a mix of fixed and floating rate debt. In addition, the Company may enter into interest rate swaps that are designated and qualify as fair value hedges. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The dollar equivalent (based on inception date foreign currency exchange rates) gross notional amount of the Company’s interest rate swaps at December 31, 2019 was $1.1 billion. Additional details about 3M’s long-term debt can be found in Note 12, including references to information regarding derivatives and/or hedging instruments, further discussed in Note 14, associated with the Company’s long-term debt.

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Commodity Prices Risk:

The Company manages commodity price risks through negotiated supply contracts, price protection agreements and commodity price swaps. The related mark-to-market gain or loss on qualifying hedges was included in other comprehensive income to the extent effective, and reclassified into cost of sales in the period during which the hedged transaction affected earnings. The Company may enter into other commodity price swaps to offset, in part, fluctuation and costs associated with the use of certain commodities and precious metals. These instruments are not designated in hedged relationships and the extent to which they were outstanding at December 31, 2019 was not material.

Value At Risk:

The value at risk analysis is performed annually to assess the Company’s sensitivity to changes in currency rates, interest rates, and commodity prices. A Monte Carlo simulation technique was used to test the impact on after-tax earnings related to financial instruments (primarily debt), derivatives and underlying exposures outstanding at December 31, 2019. The model (third-party bank dataset) used a 95 percent confidence level over a 12-month time horizon. The exposure to changes in currency rates model used 9 currencies, interest rates related to three currencies, and commodity prices related to five commodities. This model does not purport to represent what actually will be experienced by the Company. This model does not include certain hedge transactions, because the Company believes their inclusion would not materially impact the results. The following table summarizes the possible adverse and positive impacts to after-tax earnings related to these exposures.

	Adverse impact on after-tax				Positive impact on after-tax
	earnings				earnings
(Millions)	2019		2018		2019		2018
Foreign exchange rates	$	(133)	$	(290)	$	137	$	305
Interest rates		(11)		(20)		10		17
Commodity prices		(2)		(6)		1		8

An analysis of the global exposures related to purchased components and materials is performed at each year-end. A one percent price change would result in a pre-tax cost or savings of approximately $70 million per year. The global energy exposure is such that a ten percent price change would result in a pre-tax cost or savings of approximately $40 million per year. Global energy exposure includes energy costs used in 3M production and other facilities, primarily electricity and natural gas.

Item 8. Financial Statements and Supplementary Data.

Index to Financial Statements

A complete summary of Form 10-K content, including the index to financial statements, is found at the beginning of this document.

Management’s Responsibility for Financial Reporting

Management is responsible for the integrity and objectivity of the financial information included in this report. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Where necessary, the financial statements reflect estimates based on management’s judgment.

Management has established and maintains a system of internal control over financial reporting for the Company and its subsidiaries. This system and its established accounting procedures and related controls are designed to provide reasonable assurance that assets are safeguarded, that the books and records properly reflect all transactions, that policies and procedures are implemented by qualified personnel, and that published financial statements are properly prepared and fairly presented. The Company’s system of internal control over financial reporting is supported by widely communicated written policies, including business conduct policies, which are designed to require all employees to maintain high ethical standards in the conduct of Company affairs. Internal auditors continually review the accounting and control system.

3M Company

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Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Management conducted an assessment of the Company’s internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019 excluded M*Modal and Acelity, which were acquired by the Company in February 2019 and October 2019, respectively. The total assets and total net sales of M*Modal and Acelity collectively represent 2 percent and 2 percent, respectively, of the related consolidated financial statement amounts as of December 31, 2019. Companies are allowed to exclude acquisitions from their assessment of internal control over financial reporting during the year of acquisition while integrating the acquired company under guidelines established by the Securities and Exchange Commission. Based on the assessment, management concluded that, as of December 31, 2019, the Company’s internal control over financial reporting is effective.

The Company’s internal control over financial reporting as of December 31, 2019 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019.

3M Company

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of 3M Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of 3M Company and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded M*Modal and Acelity Inc. from its assessment of internal control over financial reporting as of December 31, 2019 because they were acquired by the Company in purchase business combinations during 2019. We have also excluded M*Modal and Acelity Inc. from our audit of internal control over financial reporting. M*Modal and Acelity Inc. are wholly-owned subsidiaries whose total assets and total net sales excluded from management’s assessment and our audit of internal control over financial reporting collectively represent 2

53

percent and 2 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2019.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Legal Proceedings Contingencies

As described in Note 16 to the consolidated financial statements, management records liabilities for legal proceedings in those instances where it can reasonably estimate the amount of the loss and when the liability is probable. Where the reasonable estimate of the probable loss is a range, management records the most likely estimate of the loss, or the low end of the range if there is no one best estimate. Management either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be made. Management discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if management believes there is at least a reasonable possibility that a loss may be incurred.

The principal considerations for our determination that performing procedures relating to legal proceedings contingencies is a critical audit matter are there was significant judgment by management when assessing the likelihood of a loss being incurred and when estimating the loss or range of loss for each claim, which in turn led to significant auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assessment of the liabilities and disclosures associated with legal proceedings.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s evaluation of the liability related to legal proceedings, including controls over determining the likelihood of a loss and whether the amount of loss can be reasonably estimated, as well as financial statement disclosures. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsel, evaluating the reasonableness of management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable and reasonably estimable, and evaluating the sufficiency of the Company’s disclosures related to legal proceedings.

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Valuation of Acelity Inc. Intangible Assets

As described in Note 3 to the consolidated financial statements, the Company completed the acquisition of Acelity Inc. resulting in net assets acquired of approximately $4.3 billion, including $3.6 billion of intangible assets. Management disclosed that the fair value of intangible assets acquired involved the use of significant estimates and assumptions with respect to projected future cash flows, associated discount rates used to calculate present value, asset life cycles, royalty rates, and customer retention rates. As disclosed by management, the allocation of purchase consideration related to Acelity Inc. is considered preliminary with provisional amounts.

The principal considerations for our determination that performing procedures relating to the valuation of Acelity Inc. intangible assets is a critical audit matter are there was significant auditor judgment and subjectivity in applying procedures relating to the fair value measurement of intangible assets acquired due to the significant amount of judgment by management when developing the estimate; significant audit effort was required in evaluating the significant assumptions relating to the estimate, such as the projected future cash flows, associated discount rates used to calculate present value, asset life cycles, royalty rates, and customer retention rates; and the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the intangible assets and controls over development of the assumptions related to the valuation of the intangible assets, including projected future cash flows, associated discount rates used to calculate present value, asset life cycles, royalty rates, and customer retention rates. These procedures also included, among others, reading the purchase agreement and testing management’s process for estimating the fair value of intangible assets. Testing management’s process included evaluating the appropriateness of the valuation methods and the reasonableness of significant assumptions, including the projected future cash flows, associated discount rates used to calculate present value, asset life cycles, royalty rates, and customer retention rates. Evaluating the reasonableness of the projected cash flows, asset life cycles, royalty rates, and customer retention rates involved considering economic and industry factors and the past performance of the acquired businesses. The discount rates were evaluated by considering the cost of capital of comparable businesses and other industry factors. Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s valuation methods and certain significant assumptions.

/s/ PricewaterhouseCoopers LLP

Minneapolis, Minnesota

February 6, 2020

We have served as the Company’s auditor since 1975.

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3M Company and Subsidiaries

Consolidated Statement of Income

Years ended December 31

(Millions, except per share amounts)	2019		2018		2017
Net sales	$	32,136	$	32,765	$	31,657
Operating expenses
Cost of sales		17,136		16,682		16,055
Selling, general and administrative expenses		7,029		7,602		6,626
Research, development and related expenses		1,911		1,821		1,870
Gain on sale of businesses		(114)		(547)		(586)
Total operating expenses		25,962		25,558		23,965
Operating income		6,174		7,207		7,692
Other expense (income), net		462		207		144
Income before income taxes		5,712		7,000		7,548
Provision for income taxes		1,130		1,637		2,679
Net income including noncontrolling interest	$	4,582	$	5,363	$	4,869
Less: Net income attributable to noncontrolling interest		12		14		11
Net income attributable to 3M	$	4,570	$	5,349	$	4,858
Weighted average 3M common shares outstanding — basic		577.0		588.5		597.5
Earnings per share attributable to 3M common shareholders — basic	$	7.92	$	9.09	$	8.13
Weighted average 3M common shares outstanding — diluted		585.1		602.0		612.7
Earnings per share attributable to 3M common shareholders — diluted	$	7.81	$	8.89	$	7.93

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

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3M Company and Subsidiaries

Consolidated Statement of Comprehensive Income

Years ended December 31

(Millions)	2019		2018		2017
Net income including noncontrolling interest	$	4,582	$	5,363	$	4,869
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		211		(467)		373
Defined benefit pension and postretirement plans adjustment		(560)		444		52
Cash flow hedging instruments		(72)		176		(203)
Total other comprehensive income (loss), net of tax		(421)		153		222
Comprehensive income (loss) including noncontrolling interest		4,161		5,516		5,091
Comprehensive (income) loss attributable to noncontrolling interest		(11)		(8)		(14)
Comprehensive income (loss) attributable to 3M	$	4,150	$	5,508	$	5,077

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

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3M Company and Subsidiaries

Consolidated Balance Sheet

At December 31

(Dollars in millions, except per share amount)	2019		2018
Assets
Current assets
Cash and cash equivalents	$	2,353	$	2,853
Marketable securities — current		98		380
Accounts receivable — net of allowances of $161 and $95		4,791		5,020
Inventories
Finished goods		2,003		2,120
Work in process		1,194		1,292
Raw materials and supplies		937		954
Total inventories		4,134		4,366
Prepaids		704		741
Other current assets		891		349
Total current assets		12,971		13,709
Property, plant and equipment		26,124		24,873
Less: Accumulated depreciation		(16,791)		(16,135)
Property, plant and equipment — net		9,333		8,738
Operating lease right of use assets		858		—
Goodwill		13,444		10,051
Intangible assets — net		6,379		2,657
Other assets		1,674		1,345
Total assets	$	44,659	$	36,500
Liabilities
Current liabilities
Short-term borrowings and current portion of long-term debt	$	2,795	$	1,211
Accounts payable		2,228		2,266
Accrued payroll		702		749
Accrued income taxes		194		243
Operating lease liabilities — current		247		—
Other current liabilities		3,056		2,775
Total current liabilities		9,222		7,244
Long-term debt		17,518		13,411
Pension and postretirement benefits		3,911		2,987
Operating lease liabilities		607		—
Other liabilities		3,275		3,010
Total liabilities	$	34,533	$	26,652
Commitments and contingencies (Note 16)
Equity
3M Company shareholders’ equity:
Common stock par value, $.01 par value; 944,033,056 shares issued	$	9	$	9
Shares outstanding - 2019: 575,184,835
Shares outstanding - 2018: 576,575,168
Additional paid-in capital		5,907		5,643
Retained earnings		42,135		40,636
Treasury stock		(29,849)		(29,626)
Accumulated other comprehensive income (loss)		(8,139)		(6,866)
Total 3M Company shareholders’ equity		10,063		9,796
Noncontrolling interest		63		52
Total equity	$	10,126	$	9,848
Total liabilities and equity	$	44,659	$	36,500

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

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3M Company and Subsidiaries

Consolidated Statement of Changes in Equity

Years Ended December 31

			3M Company Shareholders
			Common						Accumulated
			Stock and						Other
			Additional						Comprehensive		Non-
			Paid-in		Retained		Treasury		Income		controlling
(Dollars in millions, except per share amounts)	Total		Capital		Earnings		Stock		(Loss)		Interest
Balance at December 31, 2016	$	10,343	$	5,070	$	37,907	$	(25,434)	$	(7,245)	$	45
Net income		4,869				4,858						11
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		373								370		3
Defined benefit pension and post-retirement plans adjustment		52								52		—
Cash flow hedging instruments - unrealized gain (loss)		(203)								(203)		—
Total other comprehensive income (loss), net of tax		222
Dividends declared ($4.70 per share, Note 8)		(2,803)				(2,803)
Stock-based compensation		291		291
Reacquired stock		(2,044)						(2,044)
Issuances pursuant to stock option and benefit plans		744				(847)		1,591
Balance at December 31, 2017	$	11,622	$	5,361	$	39,115	$	(25,887)	$	(7,026)	$	59
Net income		5,363				5,349						14
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		(467)								(461)		(6)
Defined benefit pension and post-retirement plans adjustment		444								444		—
Cash flow hedging instruments - unrealized gain (loss)		176								176		—
Total other comprehensive income (loss), net of tax		153
Dividends declared ($5.44 per share, Note 8)		(3,193)				(3,193)
Transfer of ownership involving non-wholly owned subsidiaries		—				14				1		(15)
Stock-based compensation		291		291
Reacquired stock		(4,888)						(4,888)
Issuances pursuant to stock option and benefit plans		500				(649)		1,149
Balance at December 31, 2018	$	9,848	$	5,652	$	40,636	$	(29,626)	$	(6,866)	$	52
Impact of adoption of ASU No. 2018-02 (See Note 1)		—				853				(853)
Impact of adoption of ASU No. 2016-02 (See Note 1)		14				14
Net income		4,582				4,570						12
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		211								212		(1)
Defined benefit pension and post-retirement plans adjustment		(560)								(560)		—
Cash flow hedging instruments - unrealized gain (loss)		(72)								(72)		—
Total other comprehensive income (loss), net of tax		(421)
Dividends declared ($5.76 per share, Note 8)		(3,316)				(3,316)
Stock-based compensation		264		264
Reacquired stock		(1,381)						(1,381)
Issuances pursuant to stock option and benefit plans		536				(622)		1,158
Balance at December 31, 2019	$	10,126	$	5,916	$	42,135	$	(29,849)	$	(8,139)	$	63

Supplemental share information	2019	2018	2017
Treasury stock
Beginning balance	367,457,888	349,148,819	347,306,778
Reacquired stock	7,575,647	23,526,293	10,209,963
Issuances pursuant to stock options and benefit plans	(6,185,314)	(5,217,224)	(8,367,922)
Ending balance	368,848,221	367,457,888	349,148,819

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

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3M Company and Subsidiaries

Consolidated Statement of Cash Flows

Years ended December 31

(Millions)	2019		2018		2017
Cash Flows from Operating Activities
Net income including noncontrolling interest	$	4,582	$	5,363	$	4,869
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities
Depreciation and amortization		1,593		1,488		1,544
Company pension and postretirement contributions		(210)		(370)		(967)
Company pension and postretirement expense		357		410		334
Stock-based compensation expense		278		302		324
Gain on sale of businesses		(111)		(545)		(586)
Deferred income taxes		(273)		(57)		107
Loss on deconsolidation of Venezuelan subsidiary		162		—		—
Changes in assets and liabilities
Accounts receivable		345		(305)		(245)
Inventories		370		(509)		(387)
Accounts payable		(117)		408		24
Accrued income taxes (current and long-term)		205		134		967
Other — net		(111)		120		256
Net cash provided by (used in) operating activities		7,070		6,439		6,240
Cash Flows from Investing Activities
Purchases of property, plant and equipment (PP&E)		(1,699)		(1,577)		(1,373)
Proceeds from sale of PP&E and other assets		123		262		49
Acquisitions, net of cash acquired		(4,984)		13		(2,023)
Purchases of marketable securities and investments		(1,635)		(1,828)		(2,152)
Proceeds from maturities and sale of marketable securities and investments		1,443		2,497		1,354
Proceeds from sale of businesses, net of cash sold		236		846		1,065
Other — net		72		9		(6)
Net cash provided by (used in) investing activities		(6,444)		222		(3,086)
Cash Flows from Financing Activities
Change in short-term debt — net		(316)		(284)		578
Repayment of debt (maturities greater than 90 days)		(2,716)		(1,034)		(962)
Proceeds from debt (maturities greater than 90 days)		6,281		2,251		1,987
Purchases of treasury stock		(1,407)		(4,870)		(2,068)
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans		547		485		734
Dividends paid to shareholders		(3,316)		(3,193)		(2,803)
Other — net		(197)		(56)		(121)
Net cash provided by (used in) financing activities		(1,124)		(6,701)		(2,655)
Effect of exchange rate changes on cash and cash equivalents		(2)		(160)		156
Net increase (decrease) in cash and cash equivalents		(500)		(200)		655
Cash and cash equivalents at beginning of year		2,853		3,053		2,398
Cash and cash equivalents at end of period	$	2,353	$	2,853	$	3,053

The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.

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Notes to Consolidated Financial Statements

NOTE 1. Significant Accounting Policies

Consolidation: 3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products. All applicable subsidiaries are consolidated. All intercompany transactions are eliminated. As used herein, the term “3M” or “Company” refers to 3M Company and subsidiaries unless the context indicates otherwise.

Basis of presentation: Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation.

Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States with the exception of 3M’s subsidiaries in Argentina, the economy of which was considered highly inflationary beginning in 2018, and accordingly the financial statements of these subsidiaries are remeasured as if their functional currency is that of their parent. Assets and liabilities for operations in local-currency environments are translated at month-end exchange rates of the period reported. Income and expense items are translated at average monthly currency exchange rates in effect during the period. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity.

3M had a consolidating subsidiary in Venezuela, the financial statements of which were remeasured as if its functional currency were that of its parent because Venezuela’s economic environment is considered highly inflationary. The operating income of this subsidiary was immaterial as a percent of 3M’s consolidated operating income for the periods presented. In light of circumstances, including the country’s unstable environment and heightened unrest leading to sustained lack of demand, and expectation that these circumstances will continue for the foreseeable future, during May 2019, 3M concluded it no longer met the criteria of control in order to continue consolidating its Venezuelan operations. As a result, as of May 31, 2019, the Company began reflecting its interest in the Venezuelan subsidiary as an equity investment that does not have a readily determinable fair value. This resulted in a pre-tax charge of $162 million within other expense (income) in the second quarter of 2019. The charge primarily relates to $144 million of foreign currency translation losses associated with foreign currency movements before Venezuela was accounted for as a highly inflationary economy and pension elements previously included in accumulated other comprehensive loss along with write-down of intercompany receivable and investment balances associated with this subsidiary. Beginning May 31, 2019, 3M’s consolidated balance sheets and statements of operations no longer include the Venezuelan entity’s operations other than an immaterial equity investment and associated loss or income thereon largely only to the extent, if any, that 3M provides support or materials and receives funding or dividends.

Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash and cash equivalents: Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when acquired.

Marketable securities: Marketable securities include available-for-sale debt securities and are recorded at fair value. Cost of securities sold use the first in, first out (FIFO) method. The classification of marketable securities as current or non-current is based on the availability for use in current operations. 3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320, Investments-Debt and Equity Securities, when determining the classification of the impairment as “temporary” or “other-than-temporary”. A temporary impairment charge results in an unrealized loss being recorded in accumulated other comprehensive income as a component of shareholders’ equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors. Amounts are reclassified out of accumulated other comprehensive income and into earnings upon sale or “other-than-temporary” impairment.

Investments: All equity securities that do not result in consolidation and are not accounted for under the equity method are measured at fair value with changes therein reflected in net income. 3M utilizes the measurement alternative for equity investments that do not

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have readily determinable fair values and measures these investments at cost less impairment plus or minus observable price changes in orderly transactions. The balance of these securities is disclosed in Note 7.

Other assets: Other assets include deferred income taxes, product and other insurance receivables, the cash surrender value of life insurance policies, medical equipment in rental arrangements utilized primarily by hospitals and other medical clinics, prepaid pension and postretirement and other long-term assets. Investments in life insurance are reported at the amount that could be realized under contract at the balance sheet date, with any changes in cash surrender value or contract value during the period accounted for as an adjustment of premiums paid. Cash outflows and inflows associated with life insurance activity are included in “Purchases of marketable securities and investments” and “Proceeds from maturities and sale of marketable securities and investments,” respectively.

Inventories: Inventories are stated at the lower of cost or net realizable value (NRV), which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation market. Cost is determined on a first-in, first-out basis.

Property, plant and equipment: Property, plant and equipment, including capitalized interest and internal direct engineering costs, are recorded at cost. Depreciation of property, plant and equipment generally is computed using the straight-line method based on the estimated useful lives of the assets. The estimated useful lives of buildings and improvements primarily range from ten to forty years, with the majority in the range of twenty to forty years. The estimated useful lives of machinery and equipment primarily range from three to fifteen years, with the majority in the range of five to ten years. Fully depreciated assets other than capitalized internally developed software are retained in property, plant and equipment and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Conditional asset retirement obligations: A liability is initially recorded at fair value for an asset retirement obligation associated with the retirement of tangible long-lived assets in the period in which it is incurred if a reasonable estimate of fair value can be made. Conditional asset retirement obligations exist for certain long-term assets of the Company. The obligation is initially measured at fair value using expected present value techniques. Over time the liabilities are accreted for the change in their present value and the initial capitalized costs are depreciated over the remaining useful lives of the related assets. The asset retirement obligation liability was $137 million and $122 million at December 31, 2019 and 2018, respectively.

Goodwill: Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually in the fourth quarter of each year, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting unit. Reporting units are one level below the business segment level, but are required to be combined when reporting units within the same segment have similar economic characteristics. 3M did not combine any of its reporting units for impairment testing. The impairment loss is measured as the amount by which the carrying value of the reporting unit’s net assets exceeds its estimated fair value, not to exceed the carrying value of the reporting unit’s goodwill. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups or by using a discounted cash flow analysis. Companies have the option to first assess qualitative factors to determine whether the fair value of a reporting unit is not “more likely than not” less than its carrying amount, which is commonly referred to as “Step 0”. 3M has chosen not to apply Step 0 for its annual goodwill assessments.

Intangible assets: Intangible asset types include customer related, patents, other technology-based, tradenames and other intangible assets acquired from an independent party. Intangible assets with a definite life are amortized over a period ranging from four to twenty years on a systematic and rational basis (generally straight line) that is representative of the asset’s use. The estimated useful lives vary by category, with customer-related largely between twelve to nineteen years, patents largely between six to seventeen years, other technology-based largely between six to fifteen years, definite lived tradenames largely between six and twenty years, and other intangibles largely between five to thirteen years. Intangible assets are removed from their respective gross asset and accumulated

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amortization accounts when they are no longer in use. Refer to Note 4 for additional details on the gross amount and accumulated amortization of the Company’s intangible assets. Costs related to internally developed intangible assets, such as patents, are expensed as incurred, within “Research, development and related expenses.”

Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount exceeds the estimated undiscounted cash flows from the asset’s or asset group’s ongoing use and eventual disposition. If an impairment is identified, the amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Indefinite-lived intangible assets are tested for impairment annually, and are tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. An impairment loss would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset.

Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairment or accelerated depreciation/amortization of assets associated with such actions. Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Severance amounts for which affected employees in certain circumstances are required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees’ remaining service periods. Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company. Asset impairment charges related to intangible assets and property, plant and equipment reflect the excess of the assets’ carrying values over their fair values.

Revenue (sales) recognition: The Company sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk or significant payment terms extended to customers. The vast majority of 3M’s customer arrangements contain a single performance obligation to transfer manufactured goods as the promise to transfer the individual goods is not separately identifiable from other promises in the contracts and, therefore, not distinct. However, to a limited extent 3M also enters into customer arrangements that involve intellectual property out-licensing, multiple performance obligations (such as equipment, installation and service), software with coterminous post-contract support, services and non-standard terms and conditions.

The Company recognizes revenue in light of the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. Revenue is recognized when control of goods has transferred to customers. For the majority of the Company’s customer arrangements, control transfers to customers at a point-in-time when goods/services have been delivered as that is generally when legal title, physical possession and risks and rewards of goods/services transfers to the customer. In limited arrangements, control transfers over time as the customer simultaneously receives and consumes the benefits as 3M completes the performance obligation(s).

Revenue is recognized at the transaction price which the Company expects to be entitled. When determining the transaction price, 3M estimates variable consideration applying the portfolio approach practical expedient under ASC 606. The main sources of variable consideration for 3M are customer rebates, trade promotion funds, and cash discounts. These sales incentives are recorded as a reduction to revenue at the time of the initial sale using the most-likely amount estimation method. The most-likely amount method is based on the single most likely outcome from a range of possible consideration outcomes. The range of possible consideration outcomes are primarily derived from the following inputs: sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. Because 3M serves numerous markets, the sales incentive programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. There are no material instances where variable consideration is constrained and not recorded at the initial time of sale. Free goods are accounted for as an expense and recorded in cost of sales. Product returns are recorded as a reduction to revenue based on anticipated sales returns that occur in the normal course of business. 3M primarily has assurance-type warranties that do not result in separate performance obligations. Sales, use, value-added, and other excise taxes are not recognized in revenue. The Company has elected to present revenue net of sales taxes and other similar taxes.

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For substantially all arrangements recognized over time, the Company applies the “right to invoice” practical expedient. As a result, 3M recognizes revenue at the invoice amount when the entity has a right to invoice a customer at an amount that corresponds directly with the value to the customer of the Company’s performance completed to date.

For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using 3M’s best estimate of the standalone selling price of each distinct good or service in the contract.

The Company did not recognize any material revenue in the current reporting period for performance obligations that were fully satisfied in previous periods.

The Company does not have material unfulfilled performance obligation balances for contracts with an original length greater than one year in any years presented. Additionally, the Company does not have material costs related to obtaining a contract with amortization periods greater than one year for any year presented.

3M applies ASC 606 utilizing the following allowable exemptions or practical expedients:

● Exemption to not disclose the unfulfilled performance obligation balance for contracts with an original length of one year or less.

● Practical expedient relative to costs of obtaining a contract by expensing sales commissions when incurred because the amortization period would have been one year or less.

● Portfolio approach practical expedient relative to estimation of variable consideration.

● “Right to invoice” practical expedient based on 3M’s right to invoice the customer at an amount that reasonably represents the value to the customer of 3M’s performance completed to date.

● Election to present revenue net of sales taxes and other similar taxes.

● Sales-based royalty exemption permitting future intellectual property out-licensing royalty payments to be excluded from the otherwise required remaining performance obligations disclosure

The Company recognizes revenue from the rental of durable medical devices in light of the guidance of ASC 842, Leases. The Company recognizes rental revenue based on the length of time a device is used by the patient/organization, (i) at the contracted rental rate for contracted customers and (ii) generally, retail price for non-contracted customers. The leases are short-term in nature, generally providing for daily or monthly pricing, and are all classified as operating leases.

Accounts receivable and allowances: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for bad debts, cash discounts, product returns and various other items. The allowance for doubtful accounts and product returns is based on the best estimate of the amount of probable credit losses in existing accounts receivable and anticipated sales returns. The Company determines the allowances based on historical write-off experience by industry and regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monthly. The Company does not have any significant off-balance-sheet credit exposure related to its customers.

Advertising and merchandising: These costs are charged to operations in the period incurred, and totaled $348 million in 2019, $396 million in 2018 and $411 million in 2017.

Research, development and related expenses: These costs are charged to operations in the period incurred and are shown on a separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.911 billion in 2019, $1.821 billion in 2018 and $1.870 billion in 2017. Research and development expenses, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.253 billion in 2019, $1.253 billion in 2018 and $1.352 billion in 2017. Related expenses primarily include technical support; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments.

Internal-use software: The Company capitalizes direct costs of services used in the development of, and external software acquired for use as, internal-use software. Amounts capitalized are amortized over a period of three to seven years, generally on a straight-line basis, unless another systematic and rational basis is more representative of the software’s use. Amounts are reported as a component

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of either machinery and equipment or finance leases within property, plant and equipment. Fully depreciated internal-use software assets are removed from property, plant and equipment and accumulated depreciation accounts.

Environmental: Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities related to anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company’s commitment to a plan of action, or approval by regulatory agencies. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives.

Income taxes: The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. As of December 31, 2019 and 2018, the Company had valuation allowances of $158 million and $67 million on its deferred tax assets, respectively. The Company recognizes and measures its uncertain tax positions based on the rules under ASC 740, Income Taxes. As described in the “New Accounting Pronouncements” section, 3M adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The Company’s accounting policy for income taxes has been updated to indicate the uses of the portfolio approach for releasing income tax effects from accumulated other comprehensive loss.

Earnings per share: The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans during the years 2019, 2018 and 2017 were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would have had an anti-dilutive effect (8.9 million average options for 2019, 2.9 million average options for 2018, and 0.8 million average options for 2017). The computations for basic and diluted earnings per share for the years ended December 31 follow:

Earnings Per Share Computations

(Amounts in millions, except per share amounts)	2019		2018		2017
Numerator:
Net income attributable to 3M	$	4,570	$	5,349	$	4,858
Denominator:
Denominator for weighted average 3M common shares outstanding – basic		577.0		588.5		597.5
Dilution associated with the Company’s stock-based compensation plans		8.1		13.5		15.2
Denominator for weighted average 3M common shares outstanding – diluted		585.1		602.0		612.7
Earnings per share attributable to 3M common shareholders – basic	$	7.92	$	9.09	$	8.13
Earnings per share attributable to 3M common shareholders – diluted	$	7.81	$	8.89	$	7.93

Stock-based compensation: The Company recognizes compensation expense for its stock-based compensation programs, which include stock options, restricted stock, restricted stock units (RSUs), performance shares, and the General Employees’ Stock Purchase Plan (GESPP). Under applicable accounting standards, the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. However, with respect to income taxes, the related deduction from taxes payable is based on the award’s intrinsic value at the time of exercise (for an option) or on the fair value upon vesting of the award (for RSUs), which can be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the deferred tax benefit recognized as compensation cost is recognized in the financial statements. These excess tax benefits/deficiencies are recognized as income tax benefit/expense in the statement of income and, within the statement of cash flows, are classified in operating activities in the same manner as other cash flows related to income taxes. The extent of excess tax benefits/deficiencies is subject to variation in 3M stock price and timing/extent of RSU vestings and employee stock option exercises.

Comprehensive income: Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Changes in Equity. Accumulated other comprehensive income (loss) is composed of foreign currency translation effects (including hedges of net investments in international companies), defined benefit pension and postretirement plan adjustments, unrealized gains and losses on

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available-for-sale debt securities, and unrealized gains and losses on cash flow hedging instruments. The Company uses the portfolio approach for releasing income tax effects from accumulated other comprehensive income.

Derivatives and hedging activities: All derivative instruments within the scope of ASC 815, Derivatives and Hedging, are recorded on the balance sheet at fair value. The Company uses interest rate swaps, currency and commodity price swaps, and foreign currency forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with U.S. generally accepted accounting principles. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. Cash flows from derivative instruments are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives.

Credit risk: The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. The Company does not anticipate nonperformance by any of these counterparties. 3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation.

Fair value measurements: 3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Acquisitions: The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations. This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting. In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations. These transactions are largely reflected as additional asset purchase and investment activity.

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Leases: 3M determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. 3M determines certain service agreements that contain the right to use an underlying asset are not leases because 3M does not control how and for what purpose the identified asset is used. Examples of such agreements include master supply agreements, product processing agreements, warehouse and distribution services agreements, power purchase agreements, and transportation purchase agreements.

After adoption of ASU 2016-02 and related standards, operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is 3M’s incremental borrowing rate or, if available, the rate implicit in the lease. 3M determines the incremental borrowing rate for leases using a portfolio approach based primarily on the lease term and the economic environment of the applicable country or region.

As a lessee, the Company leases distribution centers, office space, land, and equipment. Certain 3M lease agreements include rental payments adjusted annually based on changes in an inflation index. 3M’s leases do not contain material residual value guarantees or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term.

Certain leases include one or more options to renew, with terms that can extend the lease term up to five years. 3M includes options to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, 3M is not reasonably certain to exercise such options.

For the measurement and classification of its lease agreements, 3M groups lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments primarily include payments for non-lease components, such as maintenance costs, payments for leased assets used beyond their noncancelable lease term as adjusted for contractual options to terminate or renew, and payments for non-components such as sales tax. Certain 3M leases contain immaterial variable lease payments based on number of units produced.

New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases, and in July 2018, issued ASU No. 2018-10 and 2018-11 and in December 2018, issued ASU No. 2018-20 and in March 2019, issued ASU No. 2019-01, which amended the standard, replacing existing lease accounting guidance. The new standard introduced a lessee model that requires entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to current accounting. The ASU did not make fundamental changes to previous lessor accounting. However, it modified what qualifies as a sales-type and direct financing lease and related accounting and aligned a number of the underlying principles with those of the ASC 606 revenue standard, such as evaluating how collectability should be considered and determining when profit can be recognized. The guidance eliminated existing real estate-specific provisions and requires expanded qualitative and quantitative disclosures. For 3M, the ASU was effective January 1, 2019. As amended, the ASU provided for retrospective transition applied to earliest period presented or an adoption method by which entities would not need to recast the comparative periods presented. 3M did not recast prior periods as it adopted this ASU. As a result of adopting this ASU, 3M recorded approximately $0.8 billion of lease assets and lease liabilities related to its operating leases and a $14 million adjustment to retained earnings related to transition upon this ASU’s adoption.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope, and in November 2018, issued ASU No. 2018-19 and in April 2019, issued ASU No. 2019-04 and in May 2019, issued ASU No. 2019-05, and in November 2019, issued ASU No. 2019-11, which amended the standard. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. With respect to available-for-sale (AFS) debt securities, the ASU amends the current other-than-temporary impairment model. For such securities with unrealized losses, entities will still consider if a portion of any impairment is related only to credit losses and therefore recognized as a reduction in income. However, rather than also reflecting that

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credit loss amount as a permanent reduction in cost (amortized cost) basis of that AFS debt security, the ASU requires that credit losses be reflected as an allowance. As a result, under certain circumstances, a recovery in value could result in previous allowances, or portions thereof, reversing back into income. For 3M, this ASU is effective January 1, 2020, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Based on the conducted analyses and due to the nature and extent of 3M’s financial instruments in scope of this ASU (primarily accounts receivable) and the historical, current and expected credit quality of its customers, the Company does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities and in October 2018, issued ASU No. 2018-16, which amended the standard. The ASU amends existing guidance to simplify the application of hedge accounting in certain situations and allow companies to better align their hedge accounting with their risk management activities. Existing standards contain certain requirements for an instrument to qualify for hedge accounting relative to initial and ongoing assessments of hedge effectiveness. While an initial quantitative test to establish the hedge relationship is highly effective would still be required, the new ASU permits subsequent qualitative assessments for certain hedges instead of a quantitative test and expands the timeline for performing the initial quantitative assessment. The ASU also simplifies related accounting by eliminating the requirement to separately measure and report hedge ineffectiveness. Instead, for qualifying cash flow and net investment hedges, the entire change in fair value (including the amount attributable to ineffectiveness) will be recorded within other comprehensive income and reclassified to earnings in the same income statement line that is used to present the earnings effect of the hedged item when the hedged item affects earnings. For fair value hedges, generally, the entire change in fair value of the hedging instrument would also be presented in the same income statement line as the hedged item. The new standard also simplifies the accounting for fair value hedges of interest rate risks and expands an entity’s ability to hedge nonfinancial and financial risk components. In addition, the guidance also eases certain documentation requirements, modifies the accounting for components excluded from the assessment of hedge effectiveness, and requires additional tabular disclosures of derivative and hedge-related information. For 3M, this ASU was effective January 1, 2019, with a modified retrospective transition resulting in a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the adoption date. The adoption of this ASU did not have a material impact on 3M’s consolidated results of operations and financial condition.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income (AOCI) arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. An entity that elects to make this reclassification must consider all items in AOCI that have tax effects stranded as a result of the tax rate change, and must disclose the reclassification of these tax effects as well as the entity’s policy for releasing income tax effects from AOCI. The ASU may be applied either retrospectively or as of the beginning of the period of adoption. For 3M, this ASU was effective January 1, 2019 and resulted in a reclassification between retained earnings and AOCI. As a result of adopting this ASU, the Company increased retained earnings by approximately $0.9 billion, with an offsetting increase to accumulated other comprehensive loss for the same amount.

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In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e. hosting arrangement) with the guidance on capitalizing costs in ASC 350-40, Internal-Use Software. The ASU permits either a prospective or retrospective transition approach. For 3M, the ASU is effective as of January 1, 2020 and the Company plans on prospective adoption. While the Company utilized limited cloud-computing services where significant implementation costs were incurred for the periods presented, 3M will apply this ASU to its expected expanded use of applicable services.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step-up in the tax basis of goodwill. The transition requirements are primarily prospective and the effective date for 3M is January 1, 2021, with early adoption permitted. As 3M does not have material activity associated with items such as franchise taxes or the types of transactions described above, does not typically have entities subject to relevant loss limitations and is not currently addressing

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enacted tax law changes for which this ASU applies, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In January 2020, the FASB issued ASU No. 2020-01, Clarifying the Interactions between Topic 321, Investments—Equity Securities, Topic 323, Investments—Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging. This ASU clarifies that when accounting for certain equity securities, a Company should consider observable transactions before applying or upon discontinuing the equity method of accounting for the purposes of applying the measurement alternative. Further, this ASU notes when determining the accounting for certain derivatives, a Company should not consider if the underlying securities would be accounted for under the equity method or fair value option. The transition requirements are prospective and the effective date for 3M is January 1, 2021, with early adoption permitted. As 3M does not currently have a material amount of equity securities and equity method investments or relevant derivatives, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition, but will apply such guidance, where applicable, to future circumstances.

NOTE 2. Revenue

The Company adopted ASU No. 2014-09 and related standards (collectively, ASC 606, Revenue from Contracts with Customers), on January 1, 2018 using the modified retrospective method of adoption. Prior periods have not been restated. Due to the cumulative net impact of adopting ASC 606, the January 1, 2018 balance of retained earnings was increased by less than $2 million, primarily relating to the accelerated recognition for software installation service and training revenue. This cumulative impact reflects retrospective application of ASC 606 only to contracts that were not completed as of January 1, 2018. Further, the Company applied the practical expedient permitting the effect of all contract modifications that occurred before January 1, 2018 to be aggregated in the transition accounting. The impact of applying ASC 606 as compared with previous guidance applied to revenues and costs was not material for the year ended December 31, 2018.

Contract Balances:

Deferred revenue primarily relates to revenue that is recognized over time for one-year software license contracts. Refer to Note 7 for deferred revenue balances at December 31, 2018 and 2019. Approximately $600 million of the December 31, 2018 balance was recognized as revenue during the year ended December 31, 2019, while approximately $500 million of the December 31, 2017 balance was recognized as revenue during the year ended December 31, 2018.

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Disaggregated revenue information:

The Company views the following disaggregated disclosures as useful to understanding the composition of revenue recognized during the respective reporting periods:

	Year ended
	December 31,
Net Sales (Millions)	2019		2018		2017
Abrasives	$	1,414	$	1,533	$	1,498
Automotive Aftermarket		1,243		1,374		1,388
Closure and Masking Systems		1,111		1,224		1,259
Communication Markets		—		175		387
Electrical Markets		1,200		1,243		1,196
Industrial Adhesives and Tapes		2,737		2,880		2,773
Personal Safety		3,508		3,606		2,960
Roofing Granules		366		353		372
Other Safety and Industrial		28		106		113
Total Safety and Industrial Business Segment	$	11,607	$	12,494	$	11,946
Advanced Materials	$	1,246	$	1,236	$	1,123
Automotive and Aerospace		1,943		2,109		2,047
Commercial Solutions		1,760		1,829		1,743
Electronics		3,710		3,965		3,842
Transportation Safety		949		957		1,103
Other Transportation and Electronics		(6)		10		3
Total Transportation and Electronics Business Segment	$	9,602	$	10,106	$	9,861
Drug Delivery	$	406	$	444	$	486
Food Safety		341		328		303
Health Information Systems		1,177		837		791
Medical Solutions		3,406		3,036		2,934
Oral Care		1,321		1,353		1,322
Separation and Purification Sciences		790		822		797
Other Health Care		(10)		6		2
Total Health Care Business Group	$	7,431	$	6,826	$	6,635
Consumer Health Care	$	383	$	391	$	425
Home Care		991		1,012		1,028
Home Improvement		2,305		2,233		2,118
Stationery and Office		1,373		1,396		1,386
Other Consumer		37		54		49
Total Consumer Business Group	$	5,089	$	5,086	$	5,006
Corporate and Unallocated	$	110	$	50	$	2
Elimination of Dual Credit		(1,703)		(1,797)		(1,793)
Total Company	$	32,136	$	32,765	$	31,657

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	Year ended December 31, 2019
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,643	$	2,877	$	2,672	$	1,419	$	(4)	$	11,607
Transportation and Electronics			2,304		5,228		1,472		601		(3)		9,602
Health Care			3,597		1,490		1,743		603		(2)		7,431
Consumer			3,119		984		545		442		(1)		5,089
Corporate and Unallocated			100		—		1		9		—		110
Elimination of Dual Credit			(604)		(783)		(207)		(109)		—		(1,703)
Total Company		$	13,159	$	9,796	$	6,226	$	2,965	$	(10)	$	32,136

	Year ended December 31, 2018
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,921	$	3,099	$	3,001	$	1,476	$	(3)	$	12,494
Transportation and Electronics			2,406		5,514		1,578		610		(2)		10,106
Health Care			3,039		1,458		1,733		596		—		6,826
Consumer			3,045		1,021		574		447		(1)		5,086
Corporate and Unallocated			48		—		—		3		(1)		50
Elimination of Dual Credit			(619)		(838)		(232)		(108)		—		(1,797)
Total Company		$	12,840	$	10,254	$	6,654	$	3,024	$	(7)	$	32,765

	Year ended December 31, 2017
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,605	$	2,981	$	2,869	$	1,497	$	(6)	$	11,946
Transportation and Electronics			2,372		5,328		1,550		615		(4)		9,861
Health Care			3,037		1,346		1,667		587		(2)		6,635
Consumer			2,943		1,029		585		450		(1)		5,006
Corporate and Unallocated			6		(1)		1		(4)		—		2
Elimination of Dual Credit			(591)		(874)		(216)		(112)		—		(1,793)
Total Company		$	12,372	$	9,809	$	6,456	$	3,033	$	(13)	$	31,657

NOTE 3. Acquisitions and Divestitures

Acquisitions:

3M makes acquisitions of certain businesses from time to time that are aligned with its strategic intent with respect to, among other factors, growth markets and adjacent product lines or technologies. Goodwill resulting from business combinations is largely attributable to the existing workforce of the acquired businesses and synergies expected to arise after 3M’s acquisition of these businesses.

2019 acquisitions:

In February 2019, 3M completed the acquisition of all of the ownership interests of the technology business of M*Modal for $0.7 billion of cash, net of cash acquired, and assumption of $0.3 billion of M*Modal’s debt. Based in Pittsburgh, Pennsylvania, M*Modal is a leading healthcare technology provider of cloud-based, conversational artificial intelligence-powered systems that help physicians efficiently capture and improve the patient narrative. The allocation of purchase consideration related to M*Modal was completed in the fourth quarter of 2019. Net sales and operating loss (inclusive of transaction and integration costs) of this business included in

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3M’s consolidated results of operations in 2019 were approximately $300 million and $25 million, respectively. M*Modal is reported within the Company’s Health Care business.

In October 2019, 3M completed the acquisition of all of the ownership interests of Acelity Inc. and its KCI subsidiaries for consideration of $4.5 billion net of cash acquired as shown in the table below, and assumption of $2.3 billion of debt (see also Note 12). Acelity is a leading global medical technology company focused on advanced wound care and specialty surgical applications marketed under the KCI brand. The allocation of purchase consideration related to Acelity Inc. and its KCI subsidiaries is considered preliminary with provisional amounts primarily related to intangible assets, working capital, certain tax-related and contingent liability amounts. 3M expects to finalize the allocation of purchase price within the one-year measurement-period following the acquisition. Net sales and operating loss (inclusive of transaction and integration costs) of this business included in 3M’s consolidated results of operations in 2019 were approximately $350 million and $45 million, respectively. Acelity is reported within the Company’s Health Care business.

Proforma information related to these acquisitions has not been included as the impact on the Company’s consolidated results of operations was not considered material. The following table shows the impact on the consolidated balance sheet of the purchase price allocations related to the 2019 acquisitions and assigned finite-lived asset weighted average lives.

	2019 Acquisition Activity
							Finite-Lived
							Intangible-Asset
(Millions)							Weighted-Average
Asset (Liability)	M*Modal		Acelity		Total		Lives (Years)
Accounts receivable	$	75	$	295	$	370
Inventory		—		186		186
Other current assets		2		65		67
Property, plant, and equipment		8		147		155
Purchased finite-lived intangible assets:
Customer related intangible assets		275		1,760		2,035	18
Other technology-based intangible assets		160		1,390		1,550	10
Definite-lived tradenames		11		485		496	16
Purchased goodwill		517		2,952		3,469
Other assets		58		73		131
Accounts payable and other liabilities		(127)		(438)		(565)
Interest bearing debt		(251)		(2,322)		(2,573)
Deferred tax asset/(liability) and accrued income taxes		(24)		(288)		(312)
Net assets acquired	$	704	$	4,305	$	5,009
Supplemental information:
Cash paid	$	708	$	4,486	$	5,194
Less: Cash acquired		4		206		210
Cash paid, net of cash acquired	$	704	$	4,280	$	4,984
Consideration payable		—		25		25
	$	704	$	4,305	$	5,009

Purchased identifiable finite-lived intangible assets related to acquisitions which closed in 2019 totaled $4.081 billion. The associated finite-lived intangible assets acquired will be amortized on a systematic and rational basis (generally straight line) over a weighted-average life of 14 years (lives ranging from 6 to 19 years).

2018 acquisition:

There were no acquisitions that closed during 2018.

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2017 acquisitions:

In September 2017, 3M purchased all of the ownership interests of Elution Technologies, LLC, a Vermont-based manufacturer of test kits that help enable food and beverage companies ensure their products are free from certain potentially harmful allergens such as peanuts, soy or milk. Elution is reported within the Company’s Health Care business.

In October 2017, 3M completed the acquisition of the underlying legal entities and associated assets of Scott Safety, which is headquartered in Monroe, North Carolina, from Johnson Controls for $2.0 billion of cash, net of cash acquired. Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus systems, gas and flame detection instruments, and other safety devices that complement 3M’s personal safety portfolio.

Divestitures:

3M may divest certain businesses from time to time based upon review of the Company’s portfolio considering, among other items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering if selling the businesses results in the greatest value creation for the Company and for shareholders.

2019 divestitures, announced divestitures and recently closed divestitures:

During the first quarter of 2019, the Company sold certain oral care technology comprising a business and reflected an earnout on a previous divestiture resulting in an aggregate immaterial gain.

In August 2019, 3M closed on the sale of its gas and flame detection business, a leader in fixed and portable gas and flame detection, to Teledyne Technologies Incorporated. 3M’s gas and flame business was part of the overall October 2017 acquisition of underlying legal entities and associated assets of Scott Safety. This business has annual sales of approximately $120 million. The transaction resulted in a pre-tax gain of $112 million that was reported within the Company’s Safety and Industrial business.

In December 2019, 3M agreed to sell substantially all of its drug delivery business to an affiliate of Altaris Capital Partners, LLC. Subject to closing and other adjustments, 3M will receive approximately $650 million in consideration including cash, an interest-bearing security, and a 17 percent noncontrolling interest in the new company. The business that is being divested has annual sales of approximately $380 million. 3M will retain its transdermal drug delivery components business. The sale is expected to close in the first half of 2020, subject to customary closing conditions and regulatory approvals. 3M expects a pre-tax gain of approximately $400 million as a result of the divestiture that will be reported within the Company’s Health Care business. Following completion of the transaction, 3M’s will reflect its ownership interest in the divested business using the equity method of accounting.

In January 2020, 3M completed the sale of its advanced ballistic-protection business to Avon Rubber p.l.c for $91 million, before closing and other adjustments. Further contingent consideration of up to $25 million may be received depending on the outcome of pending tenders. The business, with annual sales of approximately $85 million, consists of ballistic helmets, body armor, flat armor and related helmet-attachment products serving government and law enforcement. The Company reflected an immaterial impact in the third quarter of 2019 within the Transportation and Electronics business as a result of measuring this disposal group at the lower of its carrying amount or fair value less cost to sell.

2018 divestitures:

In February 2018, 3M closed on the sale of certain personal safety product offerings primarily focused on noise, environmental, and heat stress monitoring to TSI, Inc. This business has annual sales of approximately $15 million. The transaction resulted in a pre-tax gain of less than $20 million that was reported within the Company’s Safety and Industrial business. In addition, during the first quarter of 2018, 3M divested a polymer additives compounding business, formerly part of the Company’s Health Care business, and reflected a gain on final closing adjustments from a prior divestiture which, in aggregate, were not material. In May 2018, 3M divested an abrasives glass products business, formerly part of the Company’s Safety and Industrial business, with annual sales of approximately $10 million. The transaction resulted in a pre-tax gain of less than $15 million. The Company also reflected an immaterial gain in the fourth quarter from an earnout on a previous divestiture.

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In June 2018, 3M completed the sale of substantially all of its Communication Markets Division to Corning Incorporated. This business, with annual sales of approximately $400 million, consists of optical fiber and copper passive connectivity solutions for the

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telecommunications industry including 3M’s xDSL, FTTx, and structured cabling solutions and, in certain countries, telecommunications system integration services. 3M received cash proceeds of $772 million and reflected a pre-tax gain of $494 million as a result of this divestiture. In December 2018, the Company completed the sale of the remaining telecommunications system integration services portion of the business based in Germany, resulting in a pre-tax gain of $15 million. These divestiture impacts were reported within the Company’s Safety and Industrial business.

2017 divestitures:

In January 2017, 3M sold the assets of its safety prescription eyewear business, with annual sales of approximately $45 million, to HOYA Vision Care. The Company recorded a pre-tax gain of $29 million in the first quarter of 2017 as a result of this sale, which was reported within the Company’s Safety and Industrial business.

In May 2017, 3M completed the divestiture of its identity management business to Gemalto N.V. This business, with 2016 sales of approximately $205 million, is a leading provider in identity management solutions, including biometric hardware and software that enable identity verification and authentication, as well as secure materials and document readers. In June 2017, 3M also completed the sale of its tolling and automated license/number plate recognition business, with annual sales of approximately $40 million, to Neology, Inc. 3M’s tolling and automated license/number plate recognition business includes RFID readers and tags, automatic vehicle classification systems, lane controller and host software, and back office software and services. It also provides mobile and fixed cameras, software, and services in automated license/number plate recognition. 3M received proceeds of $833 million, or $809 million net of cash sold, and reflected a pre-tax gain of $458 million as a result of these two divestitures, which was reported within the Company’s Transportation and Electronics business.

In October 2017, 3M sold its electronic monitoring business to an affiliate of Apax Partners. This business, with annual sales of approximately $95 million, is a provider of electronic monitoring technologies, serving hundreds of correctional and law enforcement agencies around the world. 3M received proceeds of $201 million, net of cash sold, and reflected a pre-tax gain of $98 million in the fourth quarter of 2017 as a result of this divestiture, which was reported within the Company’s Transportation and Electronics business.

In the fourth quarter of 2017, 3M sold the assets of an electrical marking/labeling business within its Safety and Industrial business. The former activity, proceeds and gain were not considered material.

Operating income and held for sale amounts

The aggregate operating income of these businesses was approximately $40 million, $85 million, and $115 million in 2019, 2018, and 2017, respectively. The approximate amounts of major assets and liabilities associated with disposal groups classified as held-for-sale as of December 31, 2018 were not material and as of December 31, 2019 included the following:

	December 31,
(Millions)	2019
Inventory	$	70
Property, plant and equipment		150
Intangible assets		35

In addition, approximately $30 million of goodwill was estimated to be attributable to disposal groups classified as held-for-sale as of December 31, 2019, based upon relative fair value. The amounts above have not been segregated and are classified within the existing corresponding line items on the Company’s consolidated balance sheet.

NOTE 4. Goodwill and Intangible Assets

Goodwill

Goodwill from acquisitions total $3.5 billion in 2019, none of which is deductible for tax purposes. There were no acquisitions that closed during 2018. The acquisition activity in the following table also includes the net impact of adjustments to the preliminary allocation of purchase price within the one year measurement-period following prior acquisitions, which increased goodwill by $7 million during 2018. The amounts in the “Translation and other” column in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balance by business segment follows:

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(Millions)	Safety and Industrial		Transportation and Electronics		Health Care		Consumer		Total Company
Balance as of December 31, 2017	$	5,077	$	1,886	$	3,317	$	233	$	10,513
Acquisition activity		7		—		—		—		7
Divestiture activity		(268)		—		(4)		—		(272)
Translation and other		(100)		(29)		(65)		(3)		(197)
Balance as of December 31, 2018		4,716		1,857		3,248		230		10,051
Acquisition activity		—		—		3,469		—		3,469
Divestiture activity		(49)		—		—		—		(49)
Translation and other		(46)		(27)		22		24		(27)
Balance as of December 31, 2019	$	4,621	$	1,830	$	6,739	$	254	$	13,444

Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as a change in reporting units or the testing of recoverability of a significant asset group within a reporting unit. At 3M, reporting units correspond to a division.

As described in Note 19, effective in the second quarter of 2019, the Company realigned its former five business segments into four to enable the Company to better serve global customers and markets. In addition, effective in the first quarter of 2019, the Company changed its business segment reporting in its continuing effort to improve the alignment of its businesses around markets and customers. For any product changes that resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact on goodwill of the associated reporting units. Goodwill balances reported above reflect these business segment reporting changes in the earliest period presented. During the first and second quarters of 2019, the Company completed its assessment of any potential goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed. The Company also completed its annual goodwill impairment test in the fourth quarter of 2019 for all reporting units and determined that no impairment existed. In addition, the Company had no impairments of goodwill in 2018 or 2017.

Acquired Intangible Assets

The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of non-amortizable intangible assets, as of December 31, follow:

	December 31,		December 31,
(Millions)	2019		2018
Customer related intangible assets	$	4,316	$	2,291
Patents		538		542
Other technology-based intangible assets		2,124		576
Definite-lived tradenames		1,158		664
Other amortizable intangible assets		125		125
Total gross carrying amount	$	8,261	$	4,198
Accumulated amortization — customer related		(1,180)		(998)
Accumulated amortization — patents		(499)		(487)
Accumulated amortization — other technology-based		(435)		(333)
Accumulated amortization — definite-lived tradenames		(316)		(276)
Accumulated amortization — other		(90)		(88)
Total accumulated amortization	$	(2,520)	$	(2,182)
Total finite-lived intangible assets — net	$	5,741	$	2,016
Non-amortizable intangible assets (primarily tradenames)		638		641
Total intangible assets — net	$	6,379	$	2,657

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Certain tradenames acquired by 3M are not amortized because they have been in existence for over 55 years, have a history of leading-market share positions, have been and are intended to be continuously renewed, and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time.

Amortization expense for the years ended December 31 follows:

(Millions)	2019		2018		2017
Amortization expense	$	341	$	249	$	238

Expected amortization expense for acquired amortizable intangible assets recorded as of December 31, 2019 follows:

											After
(Millions)	2020		2021		2022		2023		2024		2024
Amortization expense	$	535	$	523	$	511	$	482	$	455	$	3,200

The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events. The table above excludes the impact of the carrying value of finite-lived intangible assets associated with disposal groups classified as held-for-sale at December 31, 2019. See Note 3 for additional details. 3M expenses the costs incurred to renew or extend the term of intangible assets.

NOTE 5. Restructuring Actions

2019 Restructuring Actions:

During the second quarter of 2019, in light of slower than expected 2019 sales, management approved and committed to undertake certain restructuring actions. These actions impacted approximately 2,000 positions worldwide, including attrition. The Company recorded second quarter 2019 pre-tax charges of $148 million. Additionally, during the fourth quarter of 2019, to realign 3M’s organizational structure and operating model to improve growth and operational efficiency, management approved and committed to undertake certain restructuring actions. These actions impacted approximately 1,500 positions worldwide. The Company recorded fourth quarter 2019 pre-tax charges of $134 million. These restructuring charges were recorded in the income statement as follows:

(Millions)	Second and Fourth Quarter 2019
Cost of sales	$	72
Selling, general and administrative expenses		137
Research, development and related expenses		37
Total operating income impact		246
Other expense (income), net		36
Total income before income taxes impact	$	282

The second quarter 2019 actions included a voluntary early retirement incentive initial charge (further discussed in Note 13), the charge for which is included in other expense (income), net above.

The operating income impact of these restructuring charges are summarized by business segment as follows:

	Second and Fourth Quarter 2019
(Millions)	Employee-Related		Asset-Related		Total
Safety and Industrial	$	50	$	—	$	50
Transportation and Electronics		31		—		31
Health Care		17		—		17
Consumer		8		—		8
Corporate and Unallocated		100		40		140
Total Operating Expense	$	206	$	40	$	246

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Restructuring actions, including cash and non-cash impacts, follow:

(Millions)	Employee-Related		Asset-Related		Total
Expense incurred in the second quarter and fourth quarter of 2019	$	242	$	40	$	282
Non-cash changes		(36)		(40)		(76)
Cash payments		(52)		—		(52)
Adjustments		(14)		—		(14)
Accrued restructuring action balances as of December 31, 2019	$	140	$	—	$	140

Remaining activities related to this restructuring are expected to be completed largely through 2020.

2018 Restructuring Actions:

During the second quarter and fourth quarter of 2018, management approved and committed to undertake certain restructuring actions related to addressing corporate functional costs following the Communication Markets Division divestiture. These actions affected approximately 1,200 positions worldwide and resulted in a second quarter 2018 pre-tax charge of $105 million and a fourth quarter pre-tax charge of $22 million, net of adjustments for reductions in cost estimates of $10 million, essentially all within Corporate and Unallocated. The restructuring charges were recorded in the income statement as follows:

(Millions)	Second and Fourth Quarter 2018
Cost of sales	$	27
Selling, general and administrative expenses		105
Research, development and related expenses		5
Total	$	137

Restructuring actions, including cash and non-cash impacts, follow:

(Millions)	Employee-Related		Asset-Related		Total
Expense incurred in the second quarter and fourth quarter of 2018	$	125	$	12	$	137
Non-cash changes		—		(12)		(12)
Cash payments		(24)		—		(24)
Adjustments		(17)		—		(17)
Accrued restructuring action balances as of December 31, 2018	$	84	$	—	$	84
Cash payments		(76)		—		(76)
Adjustments		(5)		—		(5)
Accrued restructuring action balances as of December 31, 2019	$	3	$	—	$	3

Remaining activities related to this restructuring were substantially completed in 2019.

2017 Restructuring Actions:

During the second quarter of 2017, management approved and committed to undertake certain restructuring actions primarily focused on portfolio and footprint optimization. These actions affected approximately 1,300 positions worldwide and resulted in a second quarter 2017 pre-tax charge of $99 million. The restructuring charges were recorded in the income statement as follows:

(Millions)	Second Quarter 2017
Cost of sales	$	86
Selling, general and administrative expenses		5
Research, development and related expenses		8
Total	$	99

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The impact of these restructuring charges are summarized by business segment as follows:

	Second Quarter 2017
(Millions)		Employee-Related
Safety and Industrial		45
Transportation and Electronics		10
Health Care		2
Consumer		36
Corporate and Unallocated		6
Total	$	99

Restructuring actions, including cash and non-cash impacts, follow:

(Millions)	Employee-Related
Expense incurred in the second quarter of 2017	$	99
Cash payments		(8)
Adjustments		(3)
Accrued restructuring action balances as of December 31, 2017	$	88
Cash payments		(20)
Adjustments		(28)
Accrued restructuring action balances as of December 31, 2018	$	40
Cash payments		(21)
Adjustments		1
Accrued restructuring action balances as of December 31, 2019	$	20

Remaining activities related to this restructuring were substantially completed in 2019, with payments occurring over time in accordance with applicable severance arrangements into 2020. A portion of the adjustments detailed above include certain severance accruals taken in 2017, the obligation for which was relieved and reflected as part of the gain on divestiture when that business was sold in 2018.

NOTE 6. Supplemental Income Statement Information

Other expense (income), net consists of the following:

(Millions)	2019		2018		2017
Interest expense	$	448	$	350	$	322
Interest income		(80)		(70)		(50)
Pension and postretirement net periodic benefit cost (benefit)		(68)		(73)		(128)
Loss on deconsolidation of Venezuelan subsidiary		162		—		—
Total	$	462	$	207	$	144

Pension and postretirement net periodic benefit costs described in the table above include all components of defined benefit plan net periodic benefit costs except service cost, which is reported in various operating expense lines. Pension and postretirement net periodic benefit costs for 2019 included a second quarter charge related to the voluntary early retirement incentive program announced in May 2019 in addition to U.S. non-qualified pension plan settlement charges of $32 million recognized in the fourth quarter of 2019. Refer to Note 13 for additional details on the voluntary early retirement incentive program in addition to the components of pension and postretirement net periodic benefit costs.

In the second quarter of 2019, the Company incurred a charge of $162 million related to the deconsolidation of its Venezuelan subsidiary. Refer to Note 1 for additional details.

The Company recorded an early debt extinguishment charge of approximately $96 million which was included within interest expense in the fourth quarter of 2017.

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NOTE 7. Supplemental Balance Sheet Information

Additional supplemental balance sheet information is provided in the table that follows.

(Millions)	2019		2018
Other current assets
Derivative assets-current	$	75	$	88
Held-to-maturity debt security held in trust		470		—
Insurance related (receivables, prepaid expenses and other)		172		103
Other		174		158
Total other current assets	$	891	$	349
Property, plant and equipment - at cost
Land	$	351	$	340
Buildings and leasehold improvements		7,877		7,564
Machinery and equipment		16,586		15,776
Construction in progress		1,310		1,193
Gross property, plant and equipment		26,124		24,873
Accumulated depreciation		(16,791)		(16,135)
Property, plant and equipment - net	$	9,333	$	8,738
Other assets
Deferred income taxes	$	521	$	365
Prepaid pension and post retirement		230		208
Insurance related receivables and other		67		68
Cash surrender value of life insurance policies		254		251
Equity method investments		70		70
Equity and other investments		126		118
Other		406		265
Total other assets	$	1,674	$	1,345
Other current liabilities
Accrued rebates	$	594	$	558
Deferred revenue		430		617
Derivative liabilities		17		32
Employee benefits and withholdings		229		228
Contingent liability claims and other		566		244
Property, sales-related and other taxes		247		273
Pension and postretirement benefits		67		76
Other		906		747
Total other current liabilities	$	3,056	$	2,775
Other liabilities
Accrued income taxes – long-term portion	$	1,507	$	1,274
Employee benefits		312		299
Contingent liability claims and other		787		789
Finance lease obligations		111		75
Deferred income taxes		301		279
Other		257		294
Total other liabilities	$	3,275	$	3,010

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NOTE 8. Supplemental Equity and Comprehensive Income Information

Common stock ($.01 par value per share) of 3.0 billion shares is authorized, with 944,033,056 shares issued as of December 31, 2019, 2018 and 2017. Preferred stock, without par value, of 10 million shares is authorized but unissued.

Cash dividends declared and paid totaled $1.44, $1.36, and $1.175 per share for each quarter in 2019, 2018 and 2017, respectively, which resulted in total year declared and paid dividends of $5.76, $5.44, and $4.70 per share, respectively.

Transfer of Ownership Interest Involving Non-Wholly Owned Subsidiaries

During 2018, a wholly owned subsidiary in India was sold to 3M India Limited, which is 75 percent owned by the Company. Because the Company retained its controlling interest in the subsidiary involved, the sale resulted in a deemed dividend to 3M, resulting in an increase in 3M Company shareholders’ equity and a decrease in noncontrolling interest. Refer to the Consolidated Statement of Changes in Equity for further details.

Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component

			Defined Benefit		Cash Flow		Total
			Pension and		Hedging		Accumulated
	Cumulative		Postretirement		Instruments,		Other
	Translation		Plans		Unrealized		Comprehensive
(Millions)	Adjustment		Adjustment		Gain (Loss)		Income (Loss)
Balance at December 31, 2016, net of tax:	$	(2,008)	$	(5,328)	$	91	$	(7,245)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		91		(604)		(311)		(824)
Amounts reclassified out		—		487		(7)		480
Total other comprehensive income (loss), before tax		91		(117)		(318)		(344)
Tax effect		279		169		115		563
Total other comprehensive income (loss), net of tax		370		52		(203)		219
Balance at December 31, 2017, net of tax:	$	(1,638)	$	(5,276)	$	(112)	$	(7,026)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(414)		55		133		(226)
Amounts reclassified out		—		606		96		702
Total other comprehensive income (loss), before tax		(414)		661		229		476
Tax effect		(47)		(217)		(53)		(317)
Total other comprehensive income (loss), net of tax		(461)		444		176		159
Transfer of ownership involving non-wholly owned subsidiaries		1		—		—		1
Balance at December 31, 2018, net of tax:	$	(2,098)	$	(4,832)	$	64	$	(6,866)
Impact of adoption of ASU No. 2018-02 (See Note 1)		(13)		(817)		(23)		(853)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		102		(1,227)		(26)		(1,151)
Amounts reclassified out		142		459		(70)		531
Total other comprehensive income (loss), before tax		244		(768)		(96)		(620)
Tax effect		(32)		208		24		200
Total other comprehensive income (loss), net of tax		212		(560)		(72)		(420)
Balance at December 31, 2019, net of tax:	$	(1,899)	$	(6,209)	$	(31)	$	(8,139)

Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within cumulative translation does include impacts from items such as net investment hedge transactions. Reclassification adjustments are made to avoid double counting in comprehensive income items that are subsequently recorded as part of net income.

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Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M

	Amounts Reclassified from
Details about Accumulated Other	Accumulated Other Comprehensive Income
Comprehensive Income Components	Year ended December 31,						Location on Income
(Millions)	2019		2018		2017		Statement
Cumulative translation adjustment
Deconsolidation of Venezuelan subsidiary	$	(142)	$	—	$	—	Other (expense) income, net
Total before tax		(142)		—		—
Tax effect		—		—		—	Provision for income taxes
Net of tax	$	(142)	$	—	$	—
Defined benefit pension and postretirement plans adjustments
Gains (losses) associated with defined benefit pension and postretirement plans amortization
Prior service benefit		69		76		89	See Note 13
Net actuarial loss		(478)		(678)		(570)	See Note 13
Curtailments/Settlements		(48)		(4)		(6)	See Note 13
Deconsolidation of Venezuelan subsidiary		(2)		—		—	Other (expense) income, net
Total before tax		(459)		(606)		(487)
Tax effect		110		145		117	Provision for income taxes
Net of tax	$	(349)	$	(461)	$	(370)
Cash flow hedging instruments gains (losses)
Foreign currency forward/option contracts	$	74	$	(95)	$	8	Cost of sales
Interest rate swap contracts		(4)		(1)		(1)	Interest expense
Total before tax		70		(96)		7
Tax effect		(17)		19		(3)	Provision for income taxes
Net of tax	$	53	$	(77)	$	4
Total reclassifications for the period, net of tax	$	(438)	$	(538)	$	(366)

NOTE 9. Supplemental Cash Flow Information

(Millions)	2019		2018		2017
Cash income tax payments, net of refunds	$	1,198	$	1,560	$	1,604
Cash interest payments		370		314		199

Cash interest payments include interest paid on debt and finance lease balances. Cash interest payments exclude the cash paid for early debt extinguishment costs. Additional details are described in Note 12.

Individual amounts in the Consolidated Statement of Cash Flows exclude the impacts of acquisitions, divestitures and exchange rate impacts, which are presented separately.

Transactions related to investing and financing activities with significant non-cash components are as follows:

● 3M sold and leased-back, under finance leases, certain recently constructed machinery and equipment in return for municipal securities with certain cities in the United States. In aggregate, the values totaled approximately $9 million in 2019, $13 million in 2018, and $13 million in 2017, as of the transaction date.

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NOTE 10. Income Taxes

Income Before Income Taxes

(Millions)	2019		2018		2017
United States	$	3,008	$	3,487	$	4,149
International		2,704		3,513		3,399
Total	$	5,712	$	7,000	$	7,548

Provision for Income Taxes

(Millions)	2019		2018		2017
Currently payable
Federal	$	534	$	698	$	1,022
State		59		109		59
International		673		763		722
Tax Cuts and Jobs Act (TCJA) non-current transition tax provision		—		176		623
Deferred
Federal		(32)		(38)		162
State		(26)		(17)		15
International		(78)		(54)		76
Total	$	1,130	$	1,637	$	2,679

Components of Deferred Tax Assets and Liabilities

(Millions)	2019		2018
Deferred tax assets:
Accruals not currently deductible
Employee benefit costs	$	169	$	187
Product and other claims		280		228
Miscellaneous accruals		119		113
Pension costs		824		643
Stock-based compensation		218		203
Net operating/capital loss/tax credit carryforwards		150		71
Foreign tax credits		66		—
Inventory		70		54
Other		113		24
Gross deferred tax assets		2,009		1,523
Valuation allowance		(158)		(67)
Total deferred tax assets	$	1,851	$	1,456
Deferred tax liabilities:
Product and other insurance receivables	$	—	$	(7)
Accelerated depreciation		(580)		(521)
Intangible amortization		(1,021)		(799)
Currency translation		(30)		(35)
Other		—		(8)
Total deferred tax liabilities	$	(1,631)	$	(1,370)
Net deferred tax assets	$	220	$	86

The net deferred tax assets are included as components of Other Assets and Other Liabilities within the Consolidated Balance Sheet. See Note 7 “Supplemental Balance Sheet Information” for further details.

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As of December 31, 2019, the Company had tax effected operating losses, capital losses, and tax credit carryovers for federal (approximately $82 million), state (approximately $79 million), and international (approximately $55 million), with all amounts before limitation impacts and valuation allowances. Federal tax attribute carryovers will expire after one to 10 years, the state after one to 11 years, and the international after one year to an indefinite carryover period. As of December 31, 2019, the Company has provided $158 million of valuation allowance against certain of these deferred tax assets based on management’s determination that it is more-likely-than-not that the tax benefits related to these assets will not be realized.

Reconciliation of Effective Income Tax Rate

	2019		2018		2017
Statutory U.S. tax rate	21.0	%	21.0	%	35.0	%
State income taxes - net of federal benefit	0.5		1.0		0.8
International income taxes - net	0.2		0.2		(6.3)
Global Intangible Low Taxed Income (GILTI)	1.8		1.1		—
Foreign Derived Intangible Income (FDII)	(2.9)		(1.3)		—
U.S. TCJA enactment - net impacts	—		2.5		10.1
U.S. research and development credit	(1.7)		(1.5)		(0.7)
Reserves for tax contingencies	2.3		1.2		2.2
Domestic Manufacturer’s deduction	—		—		(1.8)
Employee share-based payments	(1.3)		(1.4)		(3.2)
All other - net	(0.1)		0.6		(0.6)
Effective worldwide tax rate	19.8	%	23.4	%	35.5	%

The effective tax rate for 2019 was 19.8 percent, compared to 23.4 percent in 2018, a decrease of 3.6 percentage points, impacted by several factors. Primary factors that decreased the effective tax rate for 2019 included prior year measurement period adjustments related to 2017 Tax Cuts and Jobs Act (TCJA), prior year resolution of the NRD lawsuit (as described in Note 16), and geographical income mix. These decreases were partially offset by the deconsolidation of the Venezuelan subsidiary, adjustments to uncertain tax positions, and significant litigation-related charges.

The effective tax rate for 2018 was 23.4 percent, compared to 35.5 percent in 2017, a decrease of 12.1 percentage points, impacted by several factors. Primary factors that decreased the Company’s effective tax rate included favorable aspects of the Tax Cuts and Jobs Act (TCJA) including the decrease in the U.S. income tax rate and foreign-derived intangible income (FDII), reduced transitional impact of TCJA related to transition tax and remeasurement of deferred tax assets/liabilities, increased benefits from the R&D tax credit, and favorable adjustment to prior year uncertain tax provisions. These decreases were partially offset by the elimination of the domestic manufacturing deduction, the global intangible low-taxed income (GILTI) provision, and lower excess tax benefits related to employee share-based payments.

The TCJA was enacted in December 2017, after which the SEC staff issued Staff Accounting Bulletin (SAB) 118, which provided a measurement period of up to one year from the TCJA’s enactment date for companies to complete their accounting under ASC 740. In connection with the enactment of the TCJA, the Company recorded a net tax expense of $762 million in the fourth quarter of 2017 and additional net charges of $176 million as measurement period adjustments in 2018, which are comprised of both a transition tax in addition to a remeasurement of deferred tax assets/liabilities and other impacts.

The TCJA’s transition tax is payable over eight years beginning in 2018. As of December 31, 2019 and December 31, 2018, 3M reflected $653 million and $649 million, respectively, in accrued income taxes – long-term portion and $33 million payable within one year associated with the transition tax.

The Company adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, as described in Note 1, on January 1, 2019. The purpose of this ASU was to allow a reclassification to retained earnings of one-time income tax effects stranded in accumulated other comprehensive income (AOCI) arising from the change in the U.S. federal corporate tax rate as a result of TCJA. The effect of this adoption resulted in a reclassification between retained earnings and AOCI, which

83

increased retained earnings by approximately $0.9 billion, with an offsetting increase to accumulated other comprehensive loss for the same amount.

The IRS has completed its field examination of the Company’s U.S. federal income tax returns for 2005 through 2015, but the years have not closed as the Company is in the process of resolving issues identified during those examinations. The Company is under examination or in appeals for 2015 through 2018. In addition to the U.S. federal examination, there is also audit activity in several U.S. state and foreign jurisdictions. As of December 31, 2019, no taxing authority proposed significant adjustments to the Company’s tax positions for which the Company is not adequately reserved.

It is reasonably possible that the amount of unrecognized tax benefits could significantly change within the next 12 months. The Company has ongoing federal, state and international income tax audits in various jurisdictions and evaluates uncertain tax positions that may be challenged by local tax authorities and not fully sustained. These uncertain tax positions are reviewed on an ongoing basis and adjusted in light of facts and circumstances including progression of tax audits, developments in case law and closing of statutes of limitation. At this time, the Company expects approximately $50 million of unrecognized tax benefits to be recognized within the next 12 months.

The Company recognizes the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (UTB) is as follows:

Federal, State and Foreign Tax

(Millions)	2019		2018		2017
Gross UTB Balance at January 1	$	647	$	530	$	319
Additions based on tax positions related to the current year		76		129		119
Additions for tax positions of prior years		132		146		149
Additions related to recent acquisitions		396		—		—
Reductions for tax positions of prior years		(56)		(123)		(38)
Settlements		(4)		(17)		(3)
Reductions due to lapse of applicable statute of limitations		(24)		(18)		(16)
Gross UTB Balance at December 31	$	1,167	$	647	$	530
Net UTB impacting the effective tax rate at December 31	$	1,178	$	655	$	526

The total amount of UTB, if recognized, would affect the effective tax rate by $1,178 million as of December 31, 2019, $655 million as of December 31, 2018, and $526 million as of December 31, 2017. The ending net UTB results from adjusting the gross balance for deferred items, interest and penalties, and deductible taxes. The net UTB is included as components of Other Assets, Accrued Income Taxes, and Other Liabilities within the Consolidated Balance Sheet.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. The Company recognized in the consolidated statement of income on a gross basis approximately $33 million of expense, $12 million of expense, and $20 million of expense in 2019, 2018, and 2017, respectively. The amount of interest and penalties recognized may be an expense or benefit due to new or remeasured unrecognized tax benefit accruals. At December 31, 2019, and December 31, 2018, accrued interest and penalties in the consolidated balance sheet on a gross basis were $102 million and $69 million, respectively. Included in these interest and penalty amounts are interest and penalties related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

As a result of certain employment commitments and capital investments made by 3M, income from certain manufacturing activities in the following countries is subject to reduced tax rates or, in some cases, is exempt from tax for years through the following: China (2019), Korea (2019), Switzerland (2023), Singapore (2025), and Brazil (2028). The income tax benefits attributable to the tax status of these subsidiaries are estimated to be $127 million (22 cents per diluted share) in 2019, $227 million (38 cents per diluted share) in 2018, and $228 million (37 cents per diluted share) in 2017.

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The Company has not provided deferred taxes on approximately $14 billion of undistributed earnings from non-U.S. subsidiaries as of December 31, 2019 which are indefinitely reinvested in operations. Because of the multiple avenues in which to repatriate the earnings to minimize tax cost, and because a large portion of these earnings are not liquid, it is not practical to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely.

NOTE 11. Marketable Securities and Held-to-Maturity Debt Securities

Marketable Securities

The Company invests in asset-backed securities, certificates of deposit/time deposits, commercial paper, and other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current).

(Millions)	December 31, 2019		December 31, 2018
Commercial paper	$	85	$	366
Certificates of deposit/time deposits		10		10
U.S. municipal securities		3		3
Asset-backed securities		—		1
Current marketable securities	$	98	$	380
U.S. municipal securities	$	43	$	37
Non-current marketable securities	$	43	$	37
Total marketable securities	$	141	$	417

At December 31, 2019 and 2018, gross unrealized, gross realized, and net realized gains and/or losses (pre-tax) were not material.

The balance at December 31, 2019, for marketable securities by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

(Millions)	December 31, 2019
Due in one year or less	$	98
Due after one year through five years		14
Due after five years through ten years		20
Due after ten years		9
Total marketable securities	$	141

Held-to-Maturity Debt Securities

In connection with the in-substance debt defeasance of the Third Lien Notes described in Note 12, the Company purchased a $0.5 billion U.S. Treasury security in the fourth quarter of 2019 that matures in the second quarter of 2020 and transferred it to a trust with irrevocable instructions to use the proceeds from its maturity to satisfy the redemption of the Third Lien Notes in May 2020. This debt security is considered held-to-maturity due to the restrictions in satisfying and discharging the Third Lien Notes, is carried at amortized cost, and is reflected in other current assets on the Company’s consolidated balance sheet. At December 31, 2019, the difference between the amortized cost of the U.S. Treasury security and its fair value was not material.

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NOTE 12. Long-Term Debt and Short-Term Borrowings

The following debt tables reflect effective interest rates, which include the impact of interest rate swaps, as of December 31, 2019. If the debt was issued on a combined basis, the debt has been separated to show the impact of the fixed versus floating effective interest rates. Carrying value includes the impact of debt issuance costs and fair value hedging activity. For notes subject to in-substance defeasance, the final maturity reflected below is that associated with the redemption date included in the irrevocable instructions given to the trust. Long-term debt and short-term borrowings as of December 31 consisted of the following:

Long-Term Debt

(Millions)	Currency/	Effective		Final	Carrying Value
Description / 2019 Principal Amount	Fixed vs. Floating	Interest Rate		Maturity Date	2019		2018
Medium-term note (repaid in 2019)	USD Floating	—	%	2019	$	—	$	596
Medium-term note (repaid in 2019)	USD Fixed	—	%	2019		—		25
Third lien senior secured notes subject to in-substance defeasance ($445 million)	USD Fixed	12.50	%	2020		463		—
Medium-term note (650 million Euros)	Euro Floating	—	%	2020		726		743
Medium-term note ($300 million)	USD Floating	2.16	%	2020		299		294
Medium-term note ($200 million)	USD Floating	1.98	%	2020		200		197
Eurobond (300 million Euros)	Euro Floating	—	%	2021		346		357
Eurobond (300 million Euros)	Euro Fixed	1.97	%	2021		334		341
Medium-term note ($600 million)	USD Fixed	1.63	%	2021		599		599
Medium-term note ($200 million)	USD Fixed	3.07	%	2021		199		199
Medium-term note ($200 million)	USD Floating	1.90	%	2021		204		201
Medium-term note (500 million Euros)	Euro Fixed	0.45	%	2022		557		570
Medium-term note ($600 million)	USD Fixed	2.17	%	2022		597		596
Medium-term note ($450 million)	USD Fixed	2.76	%	2022		449		—
Medium-term note (600 million Euros)	Euro Fixed	1.14	%	2023		665		680
Medium-term note ($650 million)	USD Fixed	2.26	%	2023		648		648
Registered note ($500 million)	USD Fixed	1.86	%	2023		497		—
Medium-term note ($300 million)	USD Floating	2.21	%	2024		299		299
Medium-term note ($300 million)	USD Fixed	3.30	%	2024		299		298
Medium-term note ($500 million)	USD Fixed	2.98	%	2024		503		—
Medium-term note ($550 million)	USD Fixed	3.04	%	2025		547		547
Registered note ($750 million)	USD Fixed	2.12	%	2025		743		—
Medium-term note (750 million Euros)	Euro Fixed	1.66	%	2026		826		844
Medium-term note ($650 million)	USD Fixed	2.37	%	2026		643		642
Medium-term note ($850 million)	USD Fixed	2.95	%	2027		842		841
30-year debenture ($220 million)	USD Fixed	6.44	%	2028		226		226
Medium-term note ($600 million)	USD Fixed	3.62	%	2028		597		597
Medium-term note ($800 million)	USD Fixed	3.38	%	2029		796		—
Registered note ($1 billion)	USD Fixed	2.50	%	2029		984		—
Medium-term note (500 million Euros)	Euro Fixed	1.90	%	2030		549		562
Medium-term note (500 million Euros)	Euro Fixed	1.54	%	2031		554		567
30-year bond ($555 million)	USD Fixed	5.73	%	2037		551		551
Floating rate note ($96 million)	USD Floating	1.58	%	2041		96		95
Medium-term note ($325 million)	USD Fixed	4.05	%	2044		314		314
Floating rate note ($55 million)	USD Floating	1.54	%	2044		53		53
Medium-term note ($500 million)	USD Fixed	3.37	%	2046		475		474
Medium-term note ($500 million)	USD Fixed	3.68	%	2047		492		491
Medium-term note ($650 million)	USD Fixed	4.07	%	2048		637		637
Medium-term note ($500 million)	USD Fixed	3.78	%	2048		506		—
Registered note ($1 billion)	USD Fixed	3.37	%	2049		968		—
Other borrowings	Various	1.63	%	2020-2040		76		72
Total long-term debt					$	19,359	$	14,156
Less: current portion of long-term debt						1,841		745
Long-term debt (excluding current portion)					$	17,518	$	13,411

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Post-Swap Borrowing (Long-Term Debt, Including Current Portion)

	2019				2018
	Carrying		Effective		Carrying		Effective
(Millions)	Value		Interest Rate		Value		Interest Rate
Fixed-rate debt	$	17,061	3.01	%	$	11,249	2.67	%
Floating-rate debt		2,298	1.06	%		2,907	1.44	%
Total long-term debt, including current portion	$	19,359			$	14,156

Short-Term Borrowings and Current Portion of Long-Term Debt

	Effective		Carrying Value
(Millions)	Interest Rate		2019		2018
Current portion of long-term debt	3.85	%	$	1,841	$	745
U.S. dollar commercial paper	1.61	%		150		435
Japan subsidiary credit facility	0.13	%		632		—
Germany subsidiary credit facility	0.25	%		168		—
Other borrowings	4.85	%		4		31
Total short-term borrowings and current portion of long-term debt			$	2,795	$	1,211

Other short-term borrowings primarily consisted of bank borrowings by international subsidiaries.

Future Maturities of Long-term Debt

Maturities of long-term debt in the table below reflect the impact of put provisions associated with certain debt instruments and are net of the unaccreted debt issue costs such that total maturities equal the carrying value of long-term debt as of December 31, 2019. The maturities of long-term debt for the periods subsequent to December 31, 2019 are as follows (in millions):

										After
2020		2021		2022		2023		2024		2024		Total
$	1,841	$	1,682	$	1,603	$	1,811	$	1,101	$	11,321	$	19,359

As a result of put provisions associated with certain debt instruments, long-term debt payments due in 2020 include floating rate notes totaling $149 million (classified as current portion of long-term debt).

Credit Facilities

In November 2019, 3M amended and restated its existing $3.75 billion five-year revolving credit facility expiring in March 2021 to a $3.0 billion five-year revolving credit facility expiring in November 2024. The revolving credit agreement includes a provision under which 3M may request an increase of up to $1.0 billion (at lender’s discretion), bringing the total facility up to $4.0 billion. In addition, 3M entered into a $1.25 billion 364-day credit facility expiring in November 2020. The 364-day credit agreement includes a provision under which 3M may convert any advances outstanding on the maturity date into term loans having a maturity date one year later. These credit facilities were undrawn at December 31, 2019. Under both the $3.0 billion and $1.25 billion credit agreements, 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 (as defined in the agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At December 31, 2019, this ratio was approximately 17 to 1. Debt covenants do not restrict the payment of dividends.

Other Credit Facilities

Apart from the committed credit facilities described above, in September 2019, 3M entered into a credit facility expiring in July 2020 in the amount of 80 billion Japanese Yen. At December 31, 2019, 69 billion Japanese Yen, or approximately $632 million at December 31, 2019 exchange rates, was drawn and outstanding. In November 2019, 3M entered into a credit facility expiring in November 2020 in the amount of 150 million Euros. At December 31, 2019, 150 million Euros, or $168 million at December 31, 2019 exchange rates, was drawn and outstanding.

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The Company also had an additional $268 million in stand-alone letters of credit and bank guarantees issued and outstanding at December 31, 2019. These instruments are utilized in connection with normal business activities.

Long-Term Debt Issuances

The principal amounts, interest rates and maturity dates of individual long-term debt issuances can be found in the long-term debt table found at the beginning of this note.

In February 2019, 3M issued $2.25 billion aggregate principal amount of fixed rate medium-term notes. These were comprised of $450 million of 3-year notes due 2022 with a coupon rate of 2.75%, $500 million of remaining 5-year notes due 2024 with a coupon rate of 3.25%, $800 million of 10-year notes due 2029 with a coupon rate of 3.375%, and $500 million of remaining 29.5-year notes due 2048 with a coupon rate of 4.00%. Issuances of the 5-year and 29.5-year notes were pursuant to a reopening of existing securities issued in September 2018.

In August 2019, 3M issued $3.25 billion aggregate principal amount of fixed rate registered notes. These were comprised of $500 million of 3.5-year notes due 2023 with a coupon rate of 1.75%, $750 million of 5.5-year notes due 2025 with a coupon rate of 2.00%, $1.0 billion of 10-year notes due 2029 with a coupon rate of 2.375%, and $1.0 billion of 30-year notes due 2049 with a coupon rate of 3.25%.

In September 2018, 3M issued $2.25 billion aggregate principal amount of medium-term notes. These were comprised of $400 million of 3-year fixed rate notes due 2021 with a coupon rate of 3.00%, $300 million of 5.5-year fixed rate notes due 2024 with a coupon rate of 3.25%, $300 million of 5.5-year floating rate notes due 2024 with a rate based on a floating three-month LIBOR index, $600 million aggregate principal amount of 10-year fixed rate medium-term notes due 2028 with a coupon rate of 3.625%, and $650 million of 30-year fixed rate notes due 2048 with a coupon rate of 4.00%. Upon debt issuance, the Company entered into a fixed-to-floating interest rate swap on $200 million aggregate principal amount of the 3-year fixed rate notes issued with an interest rate based on a three-month LIBOR index.

In October 2017, 3M issued $2.0 billion aggregate principal amount of fixed rate medium-term notes. These were comprised of $650 million of 5.5-year notes due 2023 with a coupon rate of 2.25%, $850 million of 10-year notes due 2027 with a coupon rate of 2.875%, and $500 million of 30-year notes due 2047 with a coupon rate of 3.625%.

Long-Term Debt Maturities and Extinguishments

In June 2019, 3M repaid $625 million aggregate principal amount of fixed-rate medium-term notes that matured.

In 2019, 3M also assumed approximately $2.6 billion of debt in connection with the acquisitions of Acelity and M*Modal (See Note 3) of which $2.1 billion was immediately redeemed or paid at close.

In November and August 2018, respectively, 3M repaid 500 million Euros and $450 million aggregate principal amount of floating rate medium-term notes that matured.
​

In October 2017, 3M, via cash tender offers, repurchased $305 million aggregate principal amount of its outstanding notes. This included $110 million of its $330 million principal amount of 6.375% notes due 2028 and $195 million of its $750 million principal amount of 5.70% notes due 2037. The Company recorded an early debt extinguishment charge of approximately $96 million in the fourth quarter of 2017 within interest expense, the cash outflow for which is recorded within other financing activities on the statement of cash flows. This charge reflected the differential between the carrying value and the amount paid to acquire the tendered notes and related expenses.

In June 2017, 3M repaid $650 million aggregate principal amount of fixed rate medium-term notes that matured.

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In-Substance Defeasance

In conjunction with the October 2019 acquisition of Acelity (See Note 3), 3M assumed outstanding debt of the business, of which $445 million in principal amount of third lien senior secured notes (Third Lien Notes) maturing in 2021 with a coupon rate of 12.5% was not immediately redeemed at closing. Instead, at closing, 3M satisfied and discharged the Third Lien Notes via an in-substance defeasance, whereby 3M transferred held-to-maturity debt securities to a trust with irrevocable instructions to redeem the Third Lien Notes on May 1, 2020. The trust assets are restricted from use in 3M’s operations and may only be used for the redemption of the Third Lien Notes. These actions, however, do not represent a legal defeasance. Therefore, as of December 31, 2019, this debt is included in current portion of long-term debt and the related trust assets comprised of a held-to-maturity debt security are included in other current assets on the Company’s consolidated balance sheet.

Floating Rate Notes

At various times, 3M has issued floating rate notes containing put provisions. 3M would be required to repurchase these securities at various prices ranging from 99 percent to 100 percent of par value according to the reduction schedules for each security. In December 2004, 3M issued a forty-year $60 million floating rate note, with a rate based on a floating LIBOR index. Under the terms of this floating rate note due in 2044, holders have an annual put feature at 100 percent of par value from 2014 and every anniversary thereafter until final maturity. Under the terms of the floating rate notes due in 2027, 2040 and 2041, holders have put options that commence ten years from the date of issuance and each third anniversary thereafter until final maturity at prices ranging from 99 percent to 100 percent of par value. For the periods presented, 3M was required to repurchase an immaterial amount of principal on the aforementioned floating rate notes.

NOTE 13. Pension and Postretirement Benefit Plans

3M has company-sponsored retirement plans covering substantially all U.S. employees and many employees outside the United States. In total, 3M has over 75 defined benefit plans in 28 countries. Pension benefits associated with these plans generally are based on each participant’s years of service, compensation, and age at retirement or termination. The primary U.S. defined-benefit pension plan was closed to new participants effective January 1, 2009. The Company also provides certain postretirement health care and life insurance benefits for its U.S. employees who reach retirement age while employed by the Company and were employed by the Company prior to January 1, 2016. Most international employees and retirees are covered by government health care programs. The cost of company-provided postretirement health care plans for international employees is not material and is combined with U.S. amounts in the tables that follow.

The Company has made deposits for its defined benefit plans with independent trustees. Trust funds and deposits with insurance companies are maintained to provide pension benefits to plan participants and their beneficiaries. There are no plan assets in the non-qualified plan due to its nature. For its U.S. postretirement health care and life insurance benefit plans, the Company has set aside amounts at least equal to annual benefit payments with an independent trustee.

The Company also sponsors employee savings plans under Section 401(k) of the Internal Revenue Code. These plans are offered to substantially all regular U.S. employees. For eligible employees hired prior to January 1, 2009, employee 401(k) contributions of up to 5% of eligible compensation matched in cash at rates of 45% or 60%, depending on the plan in which the employee participates. Employees hired on or after January 1, 2009, receive a cash match of 100% for employee 401(k) contributions of up to 5% of eligible compensation and receive an employer retirement income account cash contribution of 3% of the participant’s total eligible compensation. All contributions are invested in a number of investment funds pursuant to the employees’ elections. Employer contributions to the U.S. defined contribution plans were $186 million, $173 million and $159 million for 2019, 2018 and 2017, respectively. 3M subsidiaries in various international countries also participate in defined contribution plans. Employer contributions to the international defined contribution plans were $96 million, $99 million and $88 million for 2019, 2018 and 2017, respectively.

In May 2019 (as part of the 2019 restructuring actions discussed in Note 5), the Company began offering a voluntary early retirement incentive program to certain eligible participants of its U.S. pension plans who meet age and years of pension service requirements. The eligible participants who accepted the offer and retired by July 1, 2019 received an enhanced pension benefit. Pension benefits were enhanced by adding one additional year of pension service and one additional year of age for certain benefit calculations.

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Approximately 800 participants accepted the offer and retired before July 1, 2019. As a result, the Company incurred a $35 million charge related to these special termination benefits in the second quarter of 2019.

In the fourth quarter of 2019, the Company recognized a non-operating $32 million settlement expense in its U.S. non-qualified pension plan. The charge is related to lump sum payments made to employees at retirement. The settlement expense is an accelerated recognition of past actuarial losses.

In May 2019, 3M modified the 3M Retiree Life Insurance Plan postretirement benefit to close it to new participants effective August 1, 2019 (which results in employees who retire on or after August 1, 2019 not being eligible to participate in the plan) and reducing the maximum life insurance and death benefit to $8,000 for deaths on or after August 1, 2019. Due to these changes, the plan was re-measured in the second quarter of 2019, resulting in a decrease to the accumulated projected benefit obligation liability of approximately $150 million and a related increase to shareholders’ equity, specifically accumulated other comprehensive income in addition to an immaterial income statement benefit prospectively.

The following tables include a reconciliation of the beginning and ending balances of the benefit obligation and the fair value of plan assets as well as a summary of the related amounts recognized in the Company’s consolidated balance sheet as of December 31 of the respective years. 3M also has certain non-qualified unfunded pension and postretirement benefit plans, inclusive of plans related to supplement/excess benefits for employees impacted by particular relocations and other matters, that individually and in the aggregate are not significant and which are not included in the tables that follow. The obligations for these plans are included within other liabilities in the Company’s consolidated balance sheet and aggregated less than $40 million as of December 31, 2019 and 2018.

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Change in benefit obligation
Benefit obligation at beginning of year	$	15,948	$	17,360	$	6,965	$	7,502	$	2,175	$	2,410
Acquisitions/Transfers		—		—		9		(11)		—		—
Service cost		251		288		131		143		43		52
Interest cost		620		563		156		157		82		79
Participant contributions		—		—		7		9		—		—
Foreign exchange rate changes		—		—		55		(387)		—		(13)
Plan amendments		—		—		3		7		(171)		—
Actuarial (gain) loss		2,209		(1,226)		906		(144)		225		(244)
Benefit payments		(1,128)		(1,034)		(302)		(304)		(112)		(109)
Settlements, curtailments, special termination benefits and other		35		(3)		1		(7)		—		—
Benefit obligation at end of year	$	17,935	$	15,948	$	7,931	$	6,965	$	2,242	$	2,175
Change in plan assets
Fair value of plan assets at beginning of year	$	14,803	$	15,686	$	6,170	$	6,737	$	1,260	$	1,397
Acquisitions/Transfers		—		(4)		4		—		—		—
Actual return on plan assets		2,323		(95)		858		(38)		187		(32)
Company contributions		101		254		106		112		3		4
Participant contributions		—		—		7		9		—		—
Foreign exchange rate changes		—		—		80		(346)		—		—
Benefit payments		(1,128)		(1,034)		(302)		(304)		(112)		(109)
Settlements, curtailments, special termination benefits and other		—		(4)		—		—		—		—
Fair value of plan assets at end of year	$	16,099	$	14,803	$	6,923	$	6,170	$	1,338	$	1,260
Funded status at end of year	$	(1,836)	$	(1,145)	$	(1,008)	$	(795)	$	(904)	$	(915)

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	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Amounts recognized in the Consolidated Balance Sheet as of Dec. 31,
Non-current assets	$	—	$	—	$	230	$	208	$	—	$	—
Accrued benefit cost
Current liabilities		(48)		(60)		(15)		(13)		(4)		(3)
Non-current liabilities		(1,788)		(1,085)		(1,223)		(990)		(900)		(912)
Ending balance	$	(1,836)	$	(1,145)	$	(1,008)	$	(795)	$	(904)	$	(915)

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Amounts recognized in accumulated other comprehensive income as of Dec. 31,
Net transition obligation (asset)	$	—	$	—	$	10	$	—	$	—	$	—
Net actuarial loss (gain)		5,899		5,374		1,967		1,713		663		584
Prior service cost (credit)		(128)		(152)		(5)		(20)		(262)		(123)
Ending balance	$	5,771	$	5,222	$	1,972	$	1,693	$	401	$	461

The balance of amounts recognized for international plans in accumulated other comprehensive income as of December 31 in the preceding table are presented based on the foreign currency exchange rate on that date.

The pension accumulated benefit obligation represents the actuarial present value of benefits based on employee service and compensation as of the measurement date and does not include an assumption about future compensation levels. The accumulated benefit obligation of the U.S. pension plans was $17.125 billion and $15.033 billion at December 31, 2019 and 2018, respectively. The accumulated benefit obligation of the international pension plans was $7.355 billion and $6.438 billion at December 31, 2019 and 2018, respectively.

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 31:

	Qualified and Non-qualified Pension Plans
	United States				International
(Millions)	2019		2018		2019		2018
Projected benefit obligation	$	17,935	$	593	$	2,986	$	2,613
Accumulated benefit obligation		17,125		521		2,752		2,415
Fair value of plan assets		16,099		9		1,778		1,633

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Components of net periodic cost and other amounts recognized in other comprehensive income

The service cost component of defined benefit net periodic benefit cost is recorded in cost of sales, selling, general and administrative expenses, and research, development and related expenses. As discussed in Note 6, the other components of net periodic benefit cost are reflected in other expense (income), net. Components of net periodic benefit cost and other supplemental information for the years ended December 31 follow:

	Qualified and Non-qualified
	Pension Benefits												Postretirement
	United States						International						Benefits
(Millions)	2019		2018		2017		2019		2018		2017		2019		2018		2017
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	251	$	288	$	268	$	131	$	143	$	142	$	43	$	52	$	52
Non-operating expense
Interest cost		620		563		565		156		157		157		82		79		80
Expected return on plan assets		(1,040)		(1,087)		(1,035)		(299)		(307)		(292)		(81)		(84)		(86)
Amortization of prior service benefit		(24)		(23)		(23)		(12)		(13)		(13)		(33)		(40)		(53)
Amortization of net actuarial loss		366		503		388		78		114		126		34		61		56
Settlements, curtailments, special termination benefits and other		70		—		2		10		4		4		5		—		(4)
Total non-operating expense (benefit)		(8)		(44)		(103)		(67)		(45)		(18)		7		16		(7)
Total net periodic benefit cost (benefit)	$	243	$	244	$	165	$	64	$	98	$	124	$	50	$	68	$	45
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Prior service cost (benefit)	$	—	$	—	$	—	$	3	$	7	$	6	$	(171)	$	—	$	(1)
Amortization of prior service benefit		24		23		23		12		13		13		33		40		53
Net actuarial (gain) loss		926		(44)		607		344		194		(244)		119		(127)		69
Amortization of net actuarial loss		(366)		(503)		(388)		(78)		(114)		(126)		(34)		(61)		(56)
Foreign currency		—		—		—		7		(83)		167		(1)		(2)		—
Settlements and curtailments		(35)		—		(2)		(8)		(4)		(4)		(5)		—		—
Total recognized in other comprehensive (income) loss	$	549	$	(524)	$	240	$	280	$	13	$	(188)	$	(59)	$	(150)	$	65
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss	$	792	$	(280)	$	405	$	344	$	111	$	(64)	$	(9)	$	(82)	$	110

Weighted-average assumptions used to determine benefit obligations as of December 31

	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount rate	3.25	%	4.36	%	3.68	%	1.81	%	2.50	%	2.41	%	3.27	%	4.41	%	3.79	%
Compensation rate increase	3.21	%	4.10	%	4.10	%	2.88	%	2.89	%	2.89	%	N/A		N/A		N/A

Weighted-average assumptions used to determine net cost for years ended December 31

	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount rate - service cost	4.44	%	3.78	%	4.42	%	2.39	%	2.27	%	2.32	%	4.53	%	3.86	%	4.50	%
Discount rate - interest cost	4.02	%	3.35	%	3.61	%	2.26	%	2.14	%	2.25	%	4.15	%	3.52	%	3.80	%
Expected return on assets	7.00	%	7.25	%	7.25	%	4.90	%	5.02	%	5.16	%	6.43	%	6.53	%	6.48	%
Compensation rate increase	4.10	%	4.10	%	4.10	%	2.89	%	2.89	%	2.90	%	N/A		N/A		N/A

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The Company provides eligible retirees in the U.S. postretirement health care benefit plans to a savings account benefits-based plan. The contributions provided by the Company to the health savings accounts increase 3 percent per year for employees who retired prior to January 1, 2016 and increase 1.5 percent for employees who retire on or after January 1, 2016. Therefore, the Company no longer has material exposure to health care cost inflation.

The Company determines the discount rate used to measure plan liabilities as of the December 31 measurement date for the pension and postretirement benefit plans, which is also the date used for the related annual measurement assumptions. The discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year. The Company sets its rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. Using this methodology, the Company determined a discount rate of 3.25% for the U.S. pension plans and 3.27% for the postretirement benefit plans as of December 31, 2019, which is a decrease of 1.11 percentage points and 1.14 percentage points, respectively, from the rates used as of December 31, 2018. A decrease in the discount rate increases the Projected Benefit Obligation (PBO), the significant decrease in the discount rate as of December 31, 2019 resulted in an approximately $2.0 billion higher PBO for the U.S. pension plans. For the international pension and postretirement plans the discount rates also reflect the current rate at which the associated liabilities could be effectively settled at the end of the year. If the country has a deep market in corporate bonds the Company matches the expected cash flows from the plan either to a portfolio of bonds that generate sufficient cash flow or a notional yield curve generated from available bond information. In countries that do not have a deep market in corporate bonds, government bonds are considered with a risk premium to approximate corporate bond yields.

The Company measures service cost and interest cost separately using the spot yield curve approach applied to each corresponding obligation. Service costs are determined based on duration-specific spot rates applied to the service cost cash flows. The interest cost calculation is determined by applying duration-specific spot rates to the year-by-year projected benefit payments. The spot yield curve approach does not affect the measurement of the total benefit obligations as the change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income.

For the primary U.S. qualified pension plan, the Company’s assumption for the expected return on plan assets was 7.00% in 2019. Projected returns are based primarily on broad, publicly traded equity and fixed-income indices and forward-looking estimates of active portfolio and investment management. As of December 31, 2019, the Company’s 2020 expected long-term rate of return on U.S. plan assets is 6.75%. The expected return assumption is based on the strategic asset allocation of the plan, long term capital market return expectations and expected performance from active investment management. The 2019 expected long-term rate of return is based on an asset allocation assumption of 23% global equities, 14% private equities, 47% fixed-income securities, and 16% absolute return investments independent of traditional performance benchmarks, along with positive returns from active investment management. The actual net rate of return on plan assets in 2019 was 16.3%. In 2018 the plan earned a rate of return of -0.5% and in 2017 earned a return of 12.4%. The average annual actual return on the plan assets over the past 10 and 25 years has been 8.9% and 9.4%, respectively. Return on assets assumptions for international pension and other post-retirement benefit plans are calculated on a plan-by-plan basis using plan asset allocations and expected long-term rate of return assumptions.

As of December 31, 2019, the Company converted to the “Pri-2012 Aggregate Mortality Table” and updated the mortality improvement scales to the Society of Actuaries Scale MP-2019. The December 31, 2019 update resulted in a small decrease to the U.S. pension PBO and U.S. accumulated postretirement benefit obligations.

During 2019, the Company contributed $207 million to its U.S. and international pension plans and $3 million to its postretirement plans. During 2018, the Company contributed $366 million to its U.S. and international pension plans and $4 million to its postretirement plans. In 2020, the Company expects to contribute an amount in the range of $100 million to $200 million of cash to its U.S. and international retirement plans. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2020. Future contributions will depend on market conditions, interest rates and other factors.

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Future Pension and Postretirement Benefit Payments

The following table provides the estimated pension and postretirement benefit payments that are payable from the plans to participants.

	Qualified and Non-qualified
	Pension Benefits				Postretirement
(Millions)	United States		International		Benefits
2020 Benefit Payments	$	1,103	$	246	$	121
2021 Benefit Payments		1,096		253		128
2022 Benefit Payments		1,104		272		136
2023 Benefit Payments		1,106		284		142
2024 Benefit Payments		1,111		302		148
Next five years		5,521		1,656		789

Plan Asset Management

3M’s investment strategy for its pension and postretirement plans is to manage the funds on a going-concern basis. The primary goal of the trust funds is to meet the obligations as required. The secondary goal is to earn the highest rate of return possible, without jeopardizing its primary goal, and without subjecting the Company to an undue amount of contribution risk. Fund returns are used to help finance present and future obligations to the extent possible within actuarially determined funding limits and tax-determined asset limits, thus reducing the potential need for additional contributions from 3M. The investment strategy has used long duration cash bonds and derivative instruments to offset a significant portion of the interest rate sensitivity of U.S. pension liabilities.

Normally, 3M does not buy or sell any of its own securities as a direct investment for its pension and other postretirement benefit funds. However, due to external investment management of the funds, the plans may indirectly buy, sell or hold 3M securities. The aggregate amount of 3M securities are not considered to be material relative to the aggregate fund percentages.

The discussion that follows references the fair value measurements of certain assets in terms of levels 1, 2 and 3. See Note 15 for descriptions of these levels. While the company believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

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U.S. Pension Plans and Postretirement Benefit Plan Assets

In order to achieve the investment objectives in the U.S. pension plans and U.S. postretirement benefit plans, the investment policies include a target strategic asset allocation. The investment policies allow some tolerance around the target in recognition that market fluctuations and illiquidity of some investments may cause the allocation to a specific asset class to vary from the target allocation, potentially for long periods of time. Acceptable ranges have been designed to allow for deviation from strategic targets and to allow for the opportunity for tactical over- and under-weights. The portfolios will normally be rebalanced when the quarter-end asset allocation deviates from acceptable ranges. The allocation is reviewed regularly by the named fiduciary of the plans. Approximately 50% of the postretirement benefit plan assets are in a 401(h) account. The 401(h) account assets are in the same trust as the primary U.S. pension plan and invested with the same investment objectives as the primary U.S. pension plan.

The fair values of the assets held by the U.S. pension plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
U.S. equities	$	1,575	$	1,369	$	—	$	—	$	—	$	—	$	1,575	$	1,369
Non-U.S. equities		1,585		1,234		—		—		—		—		1,585		1,234
Index and long/short equity funds*														417		372
Total Equities	$	3,160	$	2,603	$	—	$	—	$	—	$	—	$	3,577	$	2,975
Fixed Income
U.S. government securities	$	2,346	$	1,889	$	916	$	732	$	—	$	—	$	3,262	$	2,621
Non-U.S. government securities		—		—		61		44		—		—		61		44
Preferred and convertible securities		—		—		52		44		—		—		52		44
U.S. corporate bonds		10		9		3,566		2,941		—		—		3,576		2,950
Non-U.S. corporate bonds		—		—		759		475		—		—		759		475
Derivative instruments		(5)		2		109		111		—		—		104		113
Other*														—		9
Total Fixed Income	$	2,351	$	1,900	$	5,463	$	4,347	$	—	$	—	$	7,814	$	6,256
Private Equity
Growth equity	$	80	$	45	$	—	$	—	$	—	$	—	$	80	$	45
Partnership investments*														1,865		2,064
Total Private Equity	$	80	$	45	$	—	$	—	$	—	$	—	$	1,945	$	2,109
Absolute Return
Fixed income and other	$	1	$	28	$	117	$	114	$	—	$	—	$	118	$	142
Hedge fund/fund of funds*														2,010		1,866
Partnership investments*														589		429
Total Absolute Return	$	1	$	28	$	117	$	114	$	—	$	—	$	2,717	$	2,437
Cash and Cash Equivalents
Cash and cash equivalents	$	20	$	412	$	5	$	4	$	—	$	—	$	25	$	416
Repurchase agreements and derivative margin activity		—		—		(1)		(1)		—		—		(1)		(1)
Cash and cash equivalents, valued at net asset value*														480		870
Total Cash and Cash Equivalents	$	20	$	412	$	4	$	3	$	—	$	—	$	504	$	1,285
Total	$	5,612	$	4,988	$	5,584	$	4,464	$	—	$	—	$	16,557	$	15,062
Other items to reconcile to fair value of plan assets													$	(458)	$	(259)
Fair value of plan assets													$	16,099	$	14,803

* In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

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The fair values of the assets held by the postretirement benefit plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
U.S. equities	$	337	$	356	$	—	$	—	$	—	$	—	$	337	$	356
Non-U.S. equities		77		58		—		—		—		—		77		58
Index and long/short equity funds*														33		34
Total Equities	$	414	$	414	$	—	$	—	$	—	$	—	$	447	$	448
Fixed Income
U.S. government securities	$	136	$	112	$	242	$	213	$	—	$	—	$	378	$	325
Non-U.S. government securities		—		—		6		4		—		—		6		4
U.S. corporate bonds		—		—		203		162		—		—		203		162
Non-U.S. corporate bonds		—		—		46		32		—		—		46		32
Derivative instruments		—		—		5		5		—		—		5		5
Total Fixed Income	$	136	$	112	$	502	$	416	$	—	$	—	$	638	$	528
Private Equity
Growth equity	$	4	$	2	$	—	$	—	$	—	$	—	$	4	$	2
Partnership investments*														92		101
Total Private Equity	$	4	$	2	$	—	$	—	$	—	$	—	$	96	$	103
Absolute Return
Fixed income and other	$	—	$	1	$	5	$	5	$	—	$	—	$	5	$	6
Hedge fund/fund of funds*														92		80
Partnership investments*														27		18
Total Absolute Return	$	—	$	1	$	5	$	5	$	—	$	—	$	124	$	104
Cash and Cash Equivalents
Cash and cash equivalents	$	33	$	47	$	1	$	5	$	—	$	—	$	34	$	52
Repurchase agreements and derivative margin activity		—		—		—		—		—		—		—		—
Cash and cash equivalents, valued at net asset value*														22		37
Total Cash and Cash Equivalents	$	33	$	47	$	1	$	5	$	—	$	—	$	56	$	89
Total	$	587	$	576	$	508	$	426	$	—	$	—	$	1,361	$	1,272
Other items to reconcile to fair value of plan assets													$	(23)	$	(12)
Fair value of plan assets													$	1,338	$	1,260

*In accordance with ASC 820-10, certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded.

Fixed income includes derivative instruments such as credit default swaps, interest rate swaps and futures contracts. Corporate debt includes bonds and notes, asset backed securities, collateralized mortgage obligations and private placements. Swaps and derivative instruments are valued by the custodian using closing market swap curves and market derived inputs. U.S. government and government agency bonds and notes are valued at the closing price reported in the active market in which the individual security is traded. Corporate bonds and notes, asset backed securities and collateralized mortgage obligations are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. Private placements are valued by the custodian using recognized pricing services and sources. 

The private equity portfolio is a diversified mix of derivative instruments, growth equity and partnership interests. Derivative investments are written options that are valued by independent parties using market inputs and valuation models. Growth equity investments are valued at the closing price reported in the active market in which the individual securities are traded. 

Absolute return consists primarily of partnership interests in hedge funds, hedge fund of funds or other private fund vehicles. Corporate debt instruments are valued at either the yields currently available on comparable securities of issuers with similar credit

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ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risk ratings.

Other items to reconcile to fair value of plan assets include, interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable.

The balances of and changes in the fair values of the U.S. pension plans’ and postretirement plans’ level 3 assets for the periods ended December 31, 2019 and 2018 were not material.

International Pension Plans Assets

Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below of asset categories is presented in aggregate for over 70 defined benefit plans in 25 countries; however, there is significant variation in asset allocation policy from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. The Company provides standard funding and investment guidance to all international plans with more focused guidance to the larger plans.

Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when necessary.

The fair values of the assets held by the international pension plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
Growth equities	$	638	$	460	$	796	$	248	$	—	$	—	$	1,434	$	708
Value equities		696		446		10		42		—		—		706		488
Core equities		61		55		88		742		5		5		154		802
Equities, valued at net asset value*														18		16
Total Equities	$	1,395	$	961	$	894	$	1,032	$	5	$	5	$	2,312	$	2,014
Fixed Income
Domestic government	$	353	$	334	$	433	$	351	$	4	$	5	$	790	$	690
Foreign government		22		150		603		321		—		—		625		471
Corporate debt securities		3		56		1,599		993		9		9		1,611		1,058
Fixed income securities, valued at net asset value*														449		961
Total Fixed Income	$	378	$	540	$	2,635	$	1,665	$	13	$	14	$	3,475	$	3,180
Private Equity
Real estate	$	6	$	5	$	207	$	75	$	4	$	4	$	217	$	84
Real estate, valued at net asset value*														36		37
Partnership investments*														85		89
Total Private Equity	$	6	$	5	$	207	$	75	$	4	$	4	$	338	$	210
Absolute Return
Derivatives	$	—	$	1	$	3	$	1	$	—	$	—	$	3	$	2
Insurance		—		—		—		—		513		496		513		496
Other		—		—		—		33		5		8		5		41
Other, valued at net asset value*														1		—
Hedge funds*														195		186
Total Absolute Return	$	—	$	1	$	3	$	34	$	518	$	504	$	717	$	725
Cash and Cash Equivalents
Cash and cash equivalents	$	94	$	71	$	39	$	22	$	—	$	—	$	133	$	93
Cash and cash equivalents, valued at net asset value*														1		1
Total Cash and Cash Equivalents	$	94	$	71	$	39	$	22	$	—	$	—	$	134	$	94
Total	$	1,873	$	1,578	$	3,778	$	2,828	$	540	$	527	$	6,976	$	6,223
Other items to reconcile to fair value of plan assets													$	(53)	$	(53)
Fair value of plan assets													$	6,923	$	6,170

*In accordance with ASC 820-10, certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

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Equities consist primarily of mandates in public equity securities managed to various public equity indices. Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded.

Fixed Income investments include domestic and foreign government, and corporate, (including mortgage backed and other debt) securities. Governments, corporate bonds and notes and mortgage backed securities are valued at the closing price reported if traded on an active market or at yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

Private equity funds consist of partnership interests in a variety of funds. Real estate consists of property funds and REITS (Real Estate Investment Trusts). REITS are valued at the closing price reported in the active market in which it is traded.

Absolute return consists of private partnership interests in hedge funds, insurance contracts, derivative instruments, hedge fund of funds, and other alternative investments. Insurance consists of insurance contracts, which are valued using cash surrender values which is the amount the plan would receive if the contract was cashed out at year end. Derivative instruments consist of interest rate swaps that are used to help manage risks.

Other items to reconcile to fair value of plan assets include the net of interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable.

The balances of and changes in the fair values of the international pension plans’ level 3 assets consist primarily of insurance contracts under the absolute return asset class. The aggregate of net purchases and net unrealized gains increased this balance by $17 million in 2019 and decreased this balance by $11 million in 2018.

NOTE 14. Derivatives

The Company uses interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments used by 3M, how and why 3M uses such instruments, how such instruments are accounted for, and how such instruments impact 3M’s financial position and performance.

3M adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities as of January 1, 2019. The disclosures contained within this note have been updated to reflect the new guidance, except for prior period amounts presented, as the disclosure changes were adopted prospectively. For derivative instruments that are designated in a cash flow or fair value hedging relationship, the impact of this accounting standard was to remove the requirement to test for ineffectiveness. Prior to the adoption of this ASU, any gain or loss related to hedge ineffectiveness was recognized in current earnings. For any net investment hedges entered into on or after January 1, 2019, amounts excluded from the assessment of hedge effectiveness, including the time value of the forward contract at the inception of the hedge, are recognized in earnings using an amortization approach over the life of the hedging instrument on a straight-line basis. Any difference between the change in the fair value of the excluded component and the amount amortized into earnings during the period is recorded in cumulative translation within other comprehensive income.

Additional information with respect to derivatives is included elsewhere as follows:

● Impact on other comprehensive income of nonderivative hedging and derivative instruments is included in Note 8.

● Fair value of derivative instruments is included in Note 15.

● Derivatives and/or hedging instruments associated with the Company’s long-term debt are also described in Note 12.

Types of Derivatives/Hedging Instruments and Inclusion in Income/Other Comprehensive Income:

Cash Flow Hedges:

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction

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affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized in current earnings.

Cash Flow Hedging - Foreign Currency Forward and Option Contracts: The Company enters into foreign exchange forward and option contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. The settlement or extension of these derivatives will result in reclassifications (from accumulated other comprehensive income) to earnings in the period during which the hedged transactions affect earnings. 3M may dedesignate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously included in accumulated other comprehensive income for dedesignated hedges remains in accumulated other comprehensive income until the forecasted transaction occurs or becomes probable of not occurring. Changes in the value of derivative instruments after dedesignation are recorded in earnings and are included in the Derivatives Not Designated as Hedging Instruments section below. The maximum length of time over which 3M hedges its exposure to the variability in future cash flows of the forecasted transactions is 36 months.

Cash Flow Hedging — Interest Rate Contracts: The Company may use forward starting interest rate contracts to hedge exposure to variability in cash flows from interest payments on forecasted debt issuances.

In the fourth quarter of 2016, the Company entered into forward starting interest rate swaps with a notional amount of $200 million as a hedge against interest rate volatility associated with a forecasted issuance of fixed rate debt. In 2017, the Company entered into additional forward starting interest rate swaps with notional amounts of $600 million as hedges against interest rate volatility associated with a forecasted issuance of fixed rate debt. Prior to the issuance of medium-term notes in October 2017, 3M terminated these interest rate swaps. The termination resulted in an immaterial loss within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

During 2018, the Company entered into forward starting interest rate swaps with a notional amount of $1.2 billion as hedges
against interest rate volatility associated with forecasted issuances of fixed rate debt. Concurrent with the issuance of the medium-term notes in September 2018, 3M terminated $500 million of these interest rate swaps. The termination resulted in an immaterial gain within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

As of December 31, 2018, the Company had $700 million of notional amount in outstanding forward starting interest rate swaps as hedges against interest rate volatility with forecasted issuances of fixed rate debt. During 2019, the Company entered into additional forward starting interest rate swaps with a notional amount of $743 million. Concurrent with the issuance of the medium-term notes in February 2019 and the additional issuance of registered notes in August 2019, 3M terminated all outstanding interest rate swaps related to forecasted issuances of debt. These terminations resulted in a net loss of $143 million within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

The amortization of gains and losses on forward starting interest rate swaps is included in the tables below as part of the gain/(loss) reclassified from accumulated other comprehensive income into income.

As of December 31, 2019, the Company had a balance of $31 million associated with the after-tax net unrealized loss associated with cash flow hedging instruments recorded in accumulated other comprehensive income. This includes a remaining balance of $112 million (after-tax loss) related to the forward starting interest rate swaps, which will be amortized over the respective lives of the notes. Based on exchange rates as of December 31, 2019, 3M expects to reclassify approximately $42 million and $20 million of the after-tax net unrealized foreign exchange cash flow hedging gains to earnings in 2020 and 2021, respectively, in addition to reclassifying approximately $93 million of the after-tax net unrealized foreign exchange cash flow hedging losses to earnings after 2021 (with the impact offset by earnings/losses from underlying hedged items).

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The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative instruments designated as cash flow hedges are provided in the following table. Reclassifications of amounts from accumulated other comprehensive income into income include accumulated gains (losses) on dedesignated hedges at the time earnings are impacted by the forecasted transaction.

	Pretax Gain (Loss)
	Recognized in Other		Pretax Gain (Loss) Reclassified
	Comprehensive		from Accumulated Other
	Income on Derivative		Comprehensive Income into Income
Year ended December 31, 2019 (Millions)	Amount		Location	Amount
Foreign currency forward/option contracts	$	96	Cost of sales	$	74
Interest rate swap contracts		(122)	Interest expense		(4)
Total	$	(26)		$	70

			Pretax Gain (Loss) Recognized in
	Pretax Gain (Loss)		Income on Effective Portion of			Ineffective Portion of Gain
	Recognized in Other		Derivative as a Result of			(Loss) on Derivative and
	Comprehensive		Reclassification from			Amount Excluded from
	Income on Effective		Accumulated Other			Effectiveness Testing
	Portion of Derivative		Comprehensive Income			Recognized in Income
Year ended December 31, 2018 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	151	Cost of sales	$	(95)	Cost of sales	$	—
Interest rate swap contracts		(18)	Interest expense		(1)	Interest expense		—
Total	$	133		$	(96)		$	—

Year ended December 31, 2017 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(305)	Cost of sales	$	8	Cost of sales	$	—
Interest rate swap contracts		(6)	Interest expense		(1)	Interest expense		—
Total	$	(311)		$	7		$	—

Fair Value Hedges:

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.

Fair Value Hedging - Interest Rate Swaps: The Company manages interest expense using a mix of fixed and floating rate debt. To help manage borrowing costs, the Company may enter into interest rate swaps. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense.

In November 2013, 3M issued a Eurobond due in 2021 for a face amount of 600 million Euros. Upon debt issuance, 3M completed a fixed-to-floating interest rate swap on a notional amount of 300 million Euros as a fair value hedge of a portion of the fixed interest rate Eurobond obligation.

In June 2014, 3M issued $950 million aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into an interest rate swap to convert $600 million of a $625 million note that was due in 2019, included in this issuance, to an interest rate based on a floating three-month LIBOR index as a fair value hedge of a portion of the fixed interest rate medium-term note obligation. This interest rate swap matured in conjunction with the repayment of the $625 million aggregate principal amount of fixed-rate medium notes that matured in June 2019.

In August 2015, 3M issued $1.5 billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into two interest rate swaps as fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first converted a $450 million three-year fixed rate note that matured in August 2018 at which time the associated interest rate swap also matured, and

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the second converted $300 million of a five-year fixed rate note that is due in 2020, included in this issuance, to an interest rate based on a floating three-month LIBOR index.

In the fourth quarter of 2017, the Company entered into an interest rate swap with a notional amount of $200 million that converted the company’s fixed-rate medium-term note due 2020 into a floating-rate note as a hedge of its exposure to changes in the fair value that is attributable to interest rate risk.

In September 2018, the Company entered into an interest rate swap with a notional amount of $200 million that converted a portion of the Company’s $400 million aggregate principal amount of fixed rate medium-term notes due 2021 into a floating rate note with an interest rate based on a three-month LIBOR index as a hedge of its exposure to changes in fair value that are attributable to interest rate risk.

Refer to the section below titled Statement of Income Location and Impact of Cash Flow and Fair Value Derivative Instruments for details on the location within the consolidated statements of income for amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items for the year ended December 31, 2019.

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items are as follows for periods prior to 2019:

	Gain (Loss) on Derivative			Gain (Loss) on Hedged Item
	Recognized in Income			Recognized in Income
Year ended December 31, 2018 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(5)	Interest expense	$	5
Total		$	(5)		$	5

Year ended December 31, 2017 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(9)	Interest expense	$	9
Total		$	(9)		$	9

The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:

					Cumulative Amount of Fair Value Hedging
	Carrying Value of the				Adjustment Included in the Carrying Value
	Hedged Liabilities (in millions)				of the Hedged Liabilities (in millions)
Location on the Consolidated Balance Sheet	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Short-term borrowings and current portion of long-term debt	$	499	$	596	$	—	$	(4)
Long-term debt		775		1,276		22		18
Total	$	1,274	$	1,872	$	22	$	14

Net Investment Hedges:

The Company may use non-derivative (foreign currency denominated debt) and derivative (foreign exchange forward contracts) instruments to hedge portions of the Company’s investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within other comprehensive income. The remainder of the change in value of such instruments is recorded in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. To the extent foreign currency denominated debt is not designated in or is dedesignated from a net investment hedge relationship, changes in value of that portion of foreign currency denominated debt due to exchange rate changes are recorded in earnings through their maturity date.

3M’s use of foreign exchange forward contracts designated in hedges of the Company’s net investment in foreign subsidiaries can vary by time period depending on when foreign currency denominated debt balances designated in such relationships are dedesignated, matured, or are newly issued and designated. Additionally, variation can occur in connection with the extent of the Company’s desired foreign exchange risk coverage.

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During the first quarter of 2018, the Company dedesignated 300 million Euros of foreign currency denominated debt from a former net investment hedge relationship.

At December 31, 2019, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 200 million Euros, along with a principal amount of long-term debt instruments designated in net investment hedges totaling 4.1 billion Euros. The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from 2020 to 2031.

The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative and nonderivative instruments designated as net investment hedges are as follows. There were no reclassifications of the effective portion of net investment hedges out of accumulated other comprehensive income into income for the periods presented in the table below.

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation		Amount of Gain (Loss) Excluded
	within Other		from Effectiveness Testing
	Comprehensive Income		Recognized in Income
Year ended December 31, 2019 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	108	Cost of sales	$	—
Foreign currency forward contracts		32	Cost of sales		20
Total	$	140		$	20

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation
	within Other		Ineffective Portion of Gain (Loss) on
	Comprehensive Income		Instrument and Amount Excluded
	on Effective Portion of		from Effectiveness Testing
	Instrument		Recognized in Income
Year ended December 31, 2018 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	222	Cost of sales	$	(2)
Foreign currency forward contracts		18	Cost of sales		4
Total	$	240		$	2

Year ended December 31, 2017 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(667)	N/A	$	—
Foreign currency forward contracts		(58)	Cost of sales		7
Total	$	(725)		$	7

Derivatives Not Designated as Hedging Instruments:

Derivatives not designated as hedging instruments include dedesignated foreign currency forward and option contracts that formerly were designated in cash flow hedging relationships (as referenced in the Cash Flow Hedges section above). In addition, 3M enters into foreign currency forward contracts to offset, in part, the impacts of certain intercompany activities (primarily associated with intercompany licensing arrangements) and enters into commodity price swaps to offset, in part, fluctuations in costs associated with the use of certain commodities and precious metals. These derivative instruments are not designated in hedging relationships; therefore, fair value gains and losses on these contracts are recorded in earnings. The Company does not hold or issue derivative financial instruments for trading purposes.

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The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows:

	Gain (Loss) on Derivative Recognized in Income
		Year ended December 31,
			2019		2018		2017
(Millions)	Location		Amount		Amount		Amount
Foreign currency forward/option contracts	Cost of sales	$	2	$	13	$	11
Foreign currency forward contracts	Interest expense		(13)		(109)		(141)
Total		$	(11)	$	(96)	$	(130)

Statement of Income Location and Impact of Cash Flow and Fair Value Derivative Instruments

The location in the consolidated statement of income and pre-tax amounts recognized in income related to derivative instruments designated in a cash flow or fair value hedging relationship are as follows:

	Location and Amount of Gain (Loss) Recognized in Income
	Year ended December 31, 2019
(Millions)		Cost of Goods Sold		Other expense (income), net
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded	$	17,136	$	462
The effects of fair value and cash flow hedging:
Gain or (loss) on cash flow hedging relationships:
Foreign currency forward/option contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	$	74	$	—
Interest rate swap contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income		—		(4)
Gain or (loss) on fair value hedging relationships:
Interest rate swap contracts:
Hedged items	$	—	$	(8)
Derivatives designated as hedging instruments		—		8

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Location and Fair Value Amount of Derivative Instruments:

The following tables summarize the fair value of 3M’s derivative instruments, excluding nonderivative instruments used as hedging instruments, and their location in the consolidated balance sheet. Notional amounts below are presented at period end foreign exchange rates, except for certain interest rate swaps, which are presented using the inception date’s foreign exchange rate. Additional information with respect to the fair value of derivative instruments is included in Note 15.

	Gross		Assets			Liabilities
	Notional			Fair			Fair
December 31, 2019 (Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	1,995	Other current assets	$	64	Other current liabilities	$	9
Foreign currency forward/option contracts		1,041	Other assets		50	Other liabilities		3
Interest rate swap contracts		500	Other current assets		—	Other current liabilities		—
Interest rate swap contracts		603	Other assets		17	Other liabilities		—
Total derivatives designated as hedging instruments				$	131		$	12
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,684	Other current assets	$	11	Other current liabilities	$	8
Total derivatives not designated as hedging instruments				$	11		$	8
Total derivative instruments				$	142		$	20

	Gross		Assets			Liabilities
	Notional			Fair			Fair
December 31, 2018 (Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,277	Other current assets	$	74	Other current liabilities	$	12
Foreign currency forward/option contracts		1,099	Other assets		39	Other liabilities		4
Interest rate swap contracts		1,000	Other current assets		—	Other current liabilities		14
Interest rate swap contracts		1,403	Other assets		19	Other liabilities		17
Total derivatives designated as hedging instruments				$	132		$	47
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,484	Other current assets	$	14	Other current liabilities	$	6
Total derivatives not designated as hedging instruments				$	14		$	6
Total derivative instruments				$	146		$	53

Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments:

The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. As of December 31, 2019, 3M has International Swaps and Derivatives Association (ISDA) agreements with 17 applicable banks and financial institutions which contain netting provisions. In addition to a master agreement with 3M supported by a primary counterparty’s parent guarantee,

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3M also has associated credit support agreements in place with 16 of its primary derivative counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral (when the market value of transactions covered by these agreements exceeds specified thresholds or if a counterparty’s credit rating has been downgraded to a predetermined rating). The Company does not anticipate nonperformance by any of these counterparties.

3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. However, the following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period based on the 3M entity that is a party to the transactions. Derivatives not subject to master netting agreements are not eligible for net presentation. As of the applicable dates presented below, no cash collateral had been received or pledged related to these derivative instruments.

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Assets		Gross Amount of
	Presented in the		Eligible Offsetting		Cash
	Consolidated		Recognized		Collateral		Net Amount of
December 31, 2019 (Millions)	Balance Sheet		Derivative Liabilities		Received		Derivative Assets
Derivatives subject to master netting agreements	$	142	$	14	$	—	$	128
Derivatives not subject to master netting agreements		—						—
Total	$	142					$	128

December 31, 2018 (Millions)
Derivatives subject to master netting agreements	$	146	$	38	$	—	$	108
Derivatives not subject to master netting agreements		—						—
Total	$	146					$	108

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Liabilities		Gross Amount of
	Presented in the		Eligible Offsetting		Cash		Net Amount of
	Consolidated		Recognized		Collateral		Derivative
December 31, 2019 (Millions)	Balance Sheet		Derivative Assets		Pledged		Liabilities
Derivatives subject to master netting agreements	$	20	$	14	$	—	$	6
Derivatives not subject to master netting agreements		—						—
Total	$	20					$	6

December 31, 2018 (Millions)
Derivatives subject to master netting agreements	$	53	$	38	$	—	$	15
Derivatives not subject to master netting agreements		—						—
Total	$	53					$	15

Foreign Currency Effects

3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income by approximately $201 million in 2019 and decreased pre-tax income by approximately $92 million in 2018. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks.

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NOTE 15. Fair Value Measurements

3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Refer to Note 1 for additional details.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis:

For 3M, assets and liabilities that are measured at fair value on a recurring basis primarily relate to available-for-sale marketable securities and certain derivative instruments. Derivatives include cash flow hedges, interest rate swaps and net investment hedges. The information in the following paragraphs and tables primarily addresses matters relative to these financial assets and liabilities. Separately, there were no material fair value measurements with respect to nonfinancial assets or liabilities that are recognized or disclosed at fair value in the Company’s financial statements on a recurring basis for 2019 and 2018.

3M uses various valuation techniques, which are primarily based upon the market and income approaches, with respect to financial assets and liabilities. Following is a description of the valuation methodologies used for the respective financial assets and liabilities measured at fair value.

Available-for-sale marketable securities — except certain U.S. municipal securities:

Marketable securities, except certain U.S. municipal securities, are valued utilizing multiple sources. A weighted average price is used for these securities. Market prices are obtained for these securities from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple prices are used as inputs into a distribution-curve-based algorithm to determine the daily fair value to be used. 3M classifies U.S. treasury securities as level 1, while all other marketable securities (excluding certain U.S. municipal securities) are classified as level 2. Marketable securities are discussed further in Note 11.

Available-for-sale marketable securities —certain U.S. municipal securities only:

3M holds municipal securities with certain cities in the United States as of December 31, 2019. Due to the nature of these securities, the valuation method utilized includes referencing the carrying value of the corresponding finance lease obligation as adjusted for additional issuances when 3M sells its assets to the municipality and decreases in the form of bond amortization payments, and as such will be classified as level 3 securities separately. Refer to Note 9 for additional discussion of the non-cash nature of these securities.

Investments:

Investments include equity securities that are traded in an active market. Closing stock prices are readily available from active markets and are representative of fair value. 3M classifies these securities as Level 1. Investments are included within other assets on the Company’s consolidated balance sheet.

Derivative instruments:

The Company’s derivative assets and liabilities within the scope of ASC 815, Derivatives and Hedging, are required to be recorded at fair value. The Company’s derivatives that are recorded at fair value include foreign currency forward and option contracts, commodity price swaps, interest rate swaps, and net investment hedges where the hedging instrument is recorded at fair value. Net investment hedges that use foreign currency denominated debt to hedge 3M’s net investment are not impacted by the fair value measurement standard under ASC 820, as the debt used as the hedging instrument is marked to a value with respect to changes in spot foreign currency exchange rates and not with respect to other factors that may impact fair value.

3M has determined that foreign currency forwards, commodity price swaps, currency swaps, foreign currency options, interest rate swaps and cross-currency swaps will be considered level 2 measurements. 3M uses inputs other than quoted prices that are observable for the asset. These inputs include foreign currency exchange rates, volatilities, and interest rates. Derivative positions are primarily valued using standard calculations/models that use as their basis readily observable market parameters. Industry standard data providers are 3M’s primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third-party or counterparty quotes and a net present value stream of cash flows model.

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The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis.

			Fair Value Measurements
Description	Fair Value at		Using Inputs Considered as
(Millions)	December 31, 2019		Level 1		Level 2		Level 3
Assets:
Available-for-sale:
Marketable securities:
Commercial paper	$	85	$	—	$	85	$	—
Certificates of deposit/time deposits		10		—		10		—
U.S. municipal securities		46		—		—		46
Investments		25		25		—		—
Derivative instruments — assets:
Foreign currency forward/option contracts		125		—		125		—
Interest rate swap contracts		17		—		17		—
Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts		20		—		20		—

			Fair Value Measurements
Description	Fair Value at		Using Inputs Considered as
(Millions)	December 31, 2018		Level 1		Level 2		Level 3
Assets:
Available-for-sale:
Marketable securities:
Commercial paper	$	366	$	—	$	366	$	—
Certificates of deposit/time deposits		10		—		10		—
Asset-backed securities		1		—		1		—
U.S. municipal securities		40		—		—		40
Derivative instruments — assets:
Foreign currency forward/option contracts		127		—		127		—
Interest rate swap contracts		19		—		19		—
Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts		22		—		22		—
Interest rate swap contracts		31		—		31		—

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The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the table above that used significant unobservable inputs (level 3).

Marketable securities — certain U.S. municipal securities only
(Millions)	2019		2018		2017
Beginning balance	$	40	$	30	$	20
Total gains or losses:
Included in earnings		—		—		—
Included in other comprehensive income		—		—		—
Purchases and issuances		9		13		13
Sales and settlements		(3)		(3)		(3)
Transfers in and/or out of level 3		—		—		—
Ending balance		46		40		30
Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period		—		—		—

In addition, the plan assets of 3M’s pension and postretirement benefit plans are measured at fair value on a recurring basis (at least annually). Refer to Note 13.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis:

Disclosures are required for certain assets and liabilities that are measured at fair value, but are recognized and disclosed at fair value on a nonrecurring basis in periods subsequent to initial recognition. For 3M, such measurements of fair value relate primarily to long-lived asset impairments and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used. During 2017, the Company recognized approximately $61 million in long-lived asset impairments within its Safety and Industrial and Transportation and Electronics business segments, with the complete carrying amount of such assets written off and included in operating income results. There were no material long-lived asset impairments for 2018 and 2019. There were no material adjustments to equity securities using the measurement alternative for 2019.

Fair Value of Financial Instruments:

The Company’s financial instruments include cash and cash equivalents, marketable securities, held-to-maturity debt securities, accounts receivable, certain investments, accounts payable, borrowings, and derivative contracts. The fair values of cash equivalents, accounts receivable, held-to-maturity debt securities, accounts payable, and short-term borrowings and current portion of long-term debt approximated carrying values because of the short-term nature of these instruments. Available-for-sale marketable securities, in addition to certain derivative instruments, are recorded at fair values as indicated in the preceding disclosures. To estimate fair values (classified as level 2) for its long-term debt, the Company utilized third-party quotes, which are derived all or in part from model prices, external sources, market prices, or the third-party’s internal records. Information with respect to the carrying amounts and estimated fair values of these financial instruments follow:

	December 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(Millions)	Value		Value		Value		Value
Long-term debt, excluding current portion	$	17,518	$	18,475	$	13,411	$	13,586

The fair values reflected above consider the terms of the related debt absent the impacts of derivative/hedging activity. The carrying amount of long-term debt referenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair value hedges and by the designation of certain fixed rate Eurobond securities issued by the Company as hedging instruments of the Company’s net investment in its European subsidiaries. A number of 3M’s fixed-rate bonds were trading at a premium at December 31, 2019 and 2018 due to the lower interest rates and tighter credit spreads compared to issuance levels.

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NOTE 16. Commitments and Contingencies

Unconditional Purchase Obligations:

Unconditional purchase obligations are defined as an agreement to purchase goods or services that is enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances). The Company estimates its total unconditional purchase obligation commitment (for those contracts with terms in excess of one year) as of December 31, 2019, at $983 million. Payments by year are estimated as follows: 2020 ($306 million), 2021 ($278 million), 2022 ($156 million), 2023 ($184 million), 2024 ($42 million) and after 2024 ($17 million). Many of these commitments relate to take or pay contracts, in which 3M guarantees payment to ensure availability of products or services that are sold to customers. The Company expects to receive consideration (products or services) for these unconditional purchase obligations. The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated. The majority of 3M’s products and services are purchased as needed, with no unconditional commitment. For this reason, these amounts will not provide an indication of the Company’s expected future cash outflows related to purchases.

Warranties/Guarantees:

3M’s accrued product warranty liabilities, recorded on the Consolidated Balance Sheet as part of current and long-term liabilities, are estimated at approximately $51 million at December 31, 2019, and $48 million at December 31, 2018. Further information on product warranties are not disclosed, as the Company considers the balance immaterial to its consolidated results of operations and financial condition. The fair value of 3M guarantees of loans with third parties and other guarantee arrangements are not material.

Related Party Activity:

3M does not have any material related party activity.

Legal Proceedings:

The Company and some of its subsidiaries are involved in numerous claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. These claims, lawsuits and proceedings include, but are not limited to, products liability (involving products that the Company now or formerly manufactured and sold), intellectual property, commercial, antitrust, federal False Claims Act, securities, and state and federal environmental laws. Unless otherwise stated, the Company is vigorously defending all such litigation and proceedings. From time to time, the Company also receives subpoenas or requests for information from various government agencies. The Company generally responds to such subpoenas and requests in a cooperative, thorough and timely manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company. Such subpoenas and requests can also lead to the assertion of claims or the commencement of administrative, civil or criminal legal proceedings against the Company and others, as well as to settlements. The outcomes of legal proceedings and regulatory matters are often difficult to predict. Any determination that the Company’s operations or activities are not, or were not, in compliance with applicable laws or regulations could result in the imposition of fines, civil or criminal penalties, and equitable remedies, including disgorgement, suspension or debarment or injunctive relief.

Process for Disclosure and Recording of Liabilities Related to Legal Proceedings

Many lawsuits and claims involve highly complex issues relating to causation, scientific evidence, and alleged actual damages, all of which are otherwise subject to substantial uncertainties. Assessments of lawsuits and claims can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. When making determinations about recording liabilities related to legal proceedings, the Company complies with the requirements of ASC 450, Contingencies, and related guidance, and records liabilities in those instances where it can reasonably estimate the amount of the loss and when liability is probable. Where the reasonable estimate of the probable loss is a range, the Company records as an accrual in its financial statements the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be made. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred.

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Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of presently recorded liabilities. Many of the matters described are at preliminary stages or seek an indeterminate amount of damages. It is not uncommon for claims to be resolved over many years. A future adverse ruling, settlement, unfavorable development, or increase in accruals for one or more of these matters could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. Although the Company cannot estimate its exposure to all legal proceedings, the Company currently believes that the ultimate outcome of legal proceedings or future charges, if any, would not have a material adverse effect on the consolidated financial position of the Company. Based on experience and developments, the Company reexamines its estimates of probable liabilities and associated expenses and receivables each period, and whether it is able to estimate a liability previously determined to be not estimable and/or not probable. Where appropriate, the Company makes additions to or adjustments of its estimated liabilities. As a result, the current estimates of the potential impact on the Company’s consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company could change in the future.

Process for Disclosure and Recording of Insurance Receivables Related to Legal Proceedings

The Company estimates insurance receivables based on an analysis of the terms of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim and remaining coverage, and records an amount it has concluded is likely to be recovered. For those insured legal proceedings where the Company has recorded an accrued liability in its financial statements, the Company also records receivables for the amount of insurance that it expects to recover under the Company’s insurance program. For those insured matters where the Company has not recorded an accrued liability because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it expects to recover for the expense incurred.

The following sections first describe the significant legal proceedings in which the Company is involved, and then describe the liabilities and associated insurance receivables the Company has accrued relating to its significant legal proceedings.

Respirator Mask/Asbestos Litigation

As of December 31, 2019, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 1,727 individual claimants, compared to approximately 2,320 individual claimants with actions pending at December 31, 2018.

The vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of some of the Company’s mask and respirator products and seek damages from the Company and other defendants for alleged personal injury from workplace exposures to asbestos, silica, coal mine dust or other occupational dusts found in products manufactured by other defendants or generally in the workplace. A minority of the lawsuits and claims resolved by and currently pending against the Company generally allege personal injury from occupational exposure to asbestos from products previously manufactured by the Company, which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company premises.

The Company’s current volume of new and pending matters is substantially lower than it experienced at the peak of filings in 2003. The Company expects that filing of claims by unimpaired claimants in the future will continue to be at much lower levels than in the past. Accordingly, the number of claims alleging more serious injuries, including mesothelioma, other malignancies, and black lung disease, will represent a greater percentage of total claims than in the past. Over the past twenty plus years, the Company has prevailed in fourteen of the fifteen cases tried to a jury (including the lawsuits in 2018 described below). In 2018, 3M received a jury verdict in its favor in two lawsuits – one in California state court in February and the other in Massachusetts state court in December – both involving allegations that 3M respirators were defective and failed to protect the plaintiffs against asbestos fibers. In April 2018, a jury in state court in Kentucky found 3M’s 8710 respirators failed to protect two coal miners from coal mine dust and awarded compensatory damages of approximately $2 million and punitive damages totaling $63 million. In August 2018, the trial court entered judgment and the Company appealed. During March and April 2019, the Company agreed in principle to settle a substantial majority of the coal mine dust lawsuits in Kentucky and West Virginia for $340 million, including the jury verdict in April 2018 in the Kentucky case mentioned above. That settlement has now been completed, and the appeal has been dismissed.

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The Company has demonstrated in these past trial proceedings that its respiratory protection products are effective as claimed when used in the intended manner and in the intended circumstances. Consequently, the Company believes that claimants are unable to establish that their medical conditions, even if significant, are attributable to the Company’s respiratory protection products. Nonetheless, the Company’s litigation experience indicates that claims of persons alleging more serious injuries, including mesothelioma, other malignancies, and black lung disease, are costlier to resolve than the claims of unimpaired persons, and it therefore believes the average cost of resolving pending and future claims on a per-claim basis will continue to be higher than it experienced in prior periods when the vast majority of claims were asserted by medically unimpaired claimants.

As previously reported, the State of West Virginia, through its Attorney General, filed a complaint in 2003 against the Company and two other manufacturers of respiratory protection products in the Circuit Court of Lincoln County, West Virginia, and amended its complaint in 2005. The amended complaint seeks substantial, but unspecified, compensatory damages primarily for reimbursement of the costs allegedly incurred by the State for worker’s compensation and healthcare benefits provided to all workers with occupational pneumoconiosis and unspecified punitive damages. The case was inactive from the fourth quarter of 2007 until late 2013, other than a case management conference in March 2011. In October 2019, the court granted the State’s motion to sever its unfair trade practices claim. In January 2020, the manufacturers filed a petition with the West Virginia Supreme Court, challenging the trial court’s rulings. No liability has been recorded for this matter because the Company believes that liability is not probable and estimable at this time. In addition, the Company is not able to estimate a possible loss or range of loss given the lack of any meaningful discovery responses by the State of West Virginia, the otherwise minimal activity in this case, and the assertions of claims against two other manufacturers where a defendant’s share of liability may turn on the law of joint and several liability and by the amount of fault, if any, a jury may allocate to each defendant if the case were ultimately tried.

Respirator Mask/Asbestos Liabilities and Insurance Receivables

The Company regularly conducts a comprehensive legal review of its respirator mask/asbestos liabilities. The Company reviews recent and historical claims data, including without limitation, (i) the number of pending claims filed against the Company, (ii) the nature and mix of those claims (i.e., the proportion of claims asserting usage of the Company’s mask or respirator products and alleging exposure to each of asbestos, silica, coal or other occupational dusts, and claims pleading use of asbestos-containing products allegedly manufactured by the Company), (iii) the costs to defend and resolve pending claims, and (iv) trends in filing rates and in costs to defend and resolve claims, (collectively, the “Claims Data”). As part of its comprehensive legal review, the Company regularly provides the Claims Data to a third party with expertise in determining the impact of Claims Data on future filing trends and costs. The third party assists the Company in estimating the costs to defend and resolve pending and future claims. The Company uses these estimates to develop its best estimate of probable liability.

Developments may occur that could affect the Company’s estimate of its liabilities. These developments include, but are not limited to, significant changes in (i) the key assumptions underlying the Company’s accrual, including, the number of future claims, the nature and mix of those claims, the average cost of defending and resolving claims, and in maintaining trial readiness (ii) trial and appellate outcomes, (iii) the law and procedure applicable to these claims, and (iv) the financial viability of other co-defendants and insurers.

As a result of the March and April 2019 settlements-in-principle of the coal mine dust lawsuits mentioned above, the Company’s assessment of other current and expected coal mine dust lawsuits (including the costs to resolve all current and expected coal mine dust lawsuits in Kentucky and West Virginia), its review of its respirator mask/asbestos liabilities, and the cost of resolving claims of persons who claim more serious injuries, including mesothelioma, other malignancies, and black lung disease, the Company increased its accruals in 2019 for respirator mask/asbestos liabilities by $337 million, of which $313 million pre-tax was accrued in the first quarter of 2019. In 2019, the Company made payments for legal defense costs and settlements of $402 million related to the respirator mask/asbestos litigation. As of December 31, 2019, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of $608 million. This accrual represents the Company’s best estimate of probable loss and reflects an estimation period for future claims that may be filed against the Company approaching the year 2050. The Company cannot estimate the amount or upper end of the range of amounts by which the liability may exceed the accrual the Company has established because of the (i) inherent difficulty in projecting the number of claims that have not yet been asserted or the time period in which future claims may be asserted, (ii) the complaints nearly always assert claims against multiple defendants where the damages alleged are typically not attributed to individual defendants so that a defendant’s share of liability may turn on the law of joint and several liability, which can vary by state, (iii) the multiple factors described above that the Company considers in estimating its liabilities, and (iv) the several possible developments described above that may occur that could affect the Company’s estimate of liabilities.

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As of December 31, 2019, the Company’s receivable for insurance recoveries related to the respirator mask/asbestos litigation was $4 million. The Company continues to seek coverage under the policies of certain insolvent and other insurers. Once those claims for coverage are resolved, the Company will have collected substantially all of its remaining insurance coverage for respirator mask/asbestos claims.

Respirator Mask/Asbestos Litigation — Aearo Technologies

On April 1, 2008, a subsidiary of the Company acquired the stock of Aearo Holding Corp., the parent of Aearo Technologies (“Aearo”). Aearo manufactured and sold various products, including personal protection equipment, such as eye, ear, head, face, fall and certain respiratory protection products.

As of December 31, 2019, Aearo and/or other companies that previously owned and operated Aearo’s respirator business (American Optical Corporation, Warner-Lambert LLC, AO Corp. and Cabot Corporation (“Cabot”)) are named defendants, with multiple co-defendants, including the Company, in numerous lawsuits in various courts in which plaintiffs allege use of mask and respirator products and seek damages from Aearo and other defendants for alleged personal injury from workplace exposures to asbestos, silica-related, coal mine dust, or other occupational dusts found in products manufactured by other defendants or generally in the workplace.

As of December 31, 2019, the Company, through its Aearo subsidiary, had accruals of $50 million for product liabilities and defense costs related to current and future Aearo-related asbestos and silica-related claims. This accrual represents the Company’s best estimate of Aearo’s probable loss and reflects an estimation period for future claims that may be filed against Aearo approaching the year 2050. The accrual was increased by $22 million from the year-end 2018, reflecting the Company’s assessment of pending and expected lawsuits, its review of its respirator mask/asbestos liabilities, and the cost of resolving claims of persons who claim more serious injuries. Responsibility for legal costs, as well as for settlements and judgments, is currently shared in an informal arrangement among Aearo, Cabot, American Optical Corporation and a subsidiary of Warner Lambert and their respective insurers (the “Payor Group”). Liability is allocated among the parties based on the number of years each company sold respiratory products under the “AO Safety” brand and/or owned the AO Safety Division of American Optical Corporation and the alleged years of exposure of the individual plaintiff. Aearo’s share of the contingent liability is further limited by an agreement entered into between Aearo and Cabot on July 11, 1995. This agreement provides that, so long as Aearo pays to Cabot a quarterly fee of $100,000, Cabot will retain responsibility and liability for, and indemnify Aearo against, any product liability claims involving exposure to asbestos, silica, or silica products for respirators sold prior to July 11, 1995. Because of the difficulty in determining how long a particular respirator remains in the stream of commerce after being sold, Aearo and Cabot have applied the agreement to claims arising out of the alleged use of respirators involving exposure to asbestos, silica or silica products prior to January 1, 1997. With these arrangements in place, Aearo’s potential liability is limited to exposures alleged to have arisen from the use of respirators involving exposure to asbestos, silica, or silica products on or after January 1, 1997. To date, Aearo has elected to pay the quarterly fee. Aearo could potentially be exposed to additional claims for some part of the pre-July 11, 1995 period covered by its agreement with Cabot if Aearo elects to discontinue its participation in this arrangement, or if Cabot is no longer able to meet its obligations in these matters.

Developments may occur that could affect the estimate of Aearo’s liabilities. These developments include, but are not limited to: (i) significant changes in the number of future claims, (ii) significant changes in the average cost of resolving claims, (iii) significant changes in the legal costs of defending these claims, (iv) significant changes in the mix and nature of claims received, (v) trial and appellate outcomes, (vi) significant changes in the law and procedure applicable to these claims, (vii) significant changes in the liability allocation among the co-defendants, (viii) the financial viability of members of the Payor Group including exhaustion of available insurance coverage limits, and/or (ix) a determination that the interpretation of the contractual obligations on which Aearo has estimated its share of liability is inaccurate. The Company cannot determine the impact of these potential developments on its current estimate of Aearo’s share of liability for these existing and future claims. If any of the developments described above were to occur, the actual amount of these liabilities for existing and future claims could be significantly larger than the amount accrued.

Because of the inherent difficulty in projecting the number of claims that have not yet been asserted, the complexity of allocating responsibility for future claims among the Payor Group, and the several possible developments that may occur that could affect the estimate of Aearo’s liabilities, the Company cannot estimate the amount or range of amounts by which Aearo’s liability may exceed the accrual the Company has established.

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Environmental Matters and Litigation

The Company’s operations are subject to environmental laws and regulations including those pertaining to air emissions, wastewater discharges, toxic substances, and the handling and disposal of solid and hazardous wastes enforceable by national, state, and local authorities around the world, and private parties in the United States and abroad. These laws and regulations provide, under certain circumstances, a basis for the remediation of contamination, for capital investment in pollution control equipment, for restoration of or compensation for damages to natural resources, and for personal injury and property damage claims. The Company has incurred, and will continue to incur, costs and capital expenditures in complying with these laws and regulations, defending personal injury and property damage claims, and modifying its business operations in light of its environmental responsibilities. In its effort to satisfy its environmental responsibilities and comply with environmental laws and regulations, the Company has established, and periodically updates, policies relating to environmental standards of performance for its operations worldwide.

Under certain environmental laws, including the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and similar state laws, the Company may be jointly and severally liable, typically with other companies, for the costs of remediation of environmental contamination at current or former facilities and at off-site locations. The Company has identified numerous locations, most of which are in the United States, at which it may have some liability. Please refer to the section entitled “Environmental Liabilities and Insurance Receivables” that follows for information on the amount of the accrual for such liabilities.

Environmental Matters

As previously reported, the Company has been voluntarily cooperating with ongoing reviews by local, state, federal (primarily the U.S. Environmental Protection Agency (EPA)), and international agencies of possible environmental and health effects of various perfluorinated compounds, including perfluorooctanoate (“PFOA”), perfluorooctane sulfonate (“PFOS”), perfluorohexane sulfonate (“PFHxS”), or other per- and polyfluoroalkyl substances (collectively “PFAS”). As a result of its phase-out decision in May 2000, the Company no longer manufactures certain PFAS compounds including PFOA, PFOS, PFHxS, and their pre-cursor compounds. The Company ceased manufacturing and using the vast majority of these compounds within approximately two years of the phase-out announcement and ceased all manufacturing and the last significant use of this chemistry by the end of 2008. The Company continues to manufacture a variety of shorter chain length PFAS compounds, including, but not limited to, pre-cursor compounds to perfluorobutane sulfonate (“PFBS”). These compounds are used as input materials to a variety of products, including engineered fluorinated fluids, fluoropolymers and fluorelastomers, as well as surfactants, additives, and coatings. Through its ongoing life cycle management and its raw material composition identification processes associated with the Company’s policies covering the use of all persistent and bio-accumulative materials, the Company continues to review, control or eliminate the presence of certain PFAS in purchased materials or as byproducts in some of 3M’s current fluorochemical manufacturing processes, products, and waste streams.

Regulatory activities concerning PFAS continue in the United States, Europe and elsewhere, and before certain international bodies. These activities include gathering of exposure and use information, risk assessment, and consideration of regulatory approaches. As the database of studies of both PFOA and PFOS has expanded, the EPA has developed human health effects documents summarizing the available data from these studies. In February 2014, the EPA initiated external peer review of its draft human health effects documents for PFOA and PFOS. The peer review panel met in August 2014. In May 2016, the EPA announced lifetime health advisory levels for PFOA and PFOS at 70 parts per trillion (ppt) (superseding the provisional levels established by the EPA in 2009 of 400 ppt for PFOA and 200 ppt for PFOS). Where PFOA and PFOS are found together, EPA recommends that the concentrations be added together, and the lifetime health advisory for PFOA and PFOS combined is also 70 ppt. Lifetime health advisories, which are non-enforceable and non-regulatory, provide information about concentrations of drinking water contaminants at which adverse health effects are not expected to occur over the specified exposure duration. To collect exposure information under the Safe Drinking Water Act, the EPA published on May 2, 2012 a list of unregulated substances, including six PFAS chemicals, required to be monitored during the period 2013-2015 by public water system suppliers to determine the extent of their occurrence. Through January 2017, the EPA reported results for 4,920 public water supplies nationwide. Based on the 2016 lifetime health advisory, 13 public water supplies exceed the level for PFOA and 46 exceed the level for PFOS (unchanged from the July 2016 EPA summary). A technical advisory issued by EPA in September 2016 on laboratory analysis of drinking water samples stated that 65 public water supplies had exceeded the combined level for PFOA and PFOS. These results are based on one or more samples collected during the period 2012-2015 and do not necessarily reflect current conditions of these public water supplies. EPA reporting does not identify the sources of the PFOA and PFOS in the public water supplies.

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The Company is continuing to make progress in its work, under the supervision of state regulators, to remediate its historic disposal of PFAS-containing waste associated with manufacturing operations at its Decatur, Alabama; Cottage Grove, Minnesota; and Cordova, Illinois plants. As previously reported, the Company entered into a voluntary remedial action agreement with the Alabama Department of Environmental Management (ADEM) to remediate the presence of PFAS in the soil at the Company’s manufacturing facility in Decatur, Alabama. For approximately 20 years (1978-1998), pursuant to a permit issued by ADEM, the Company incorporated its wastewater treatment plant sludge, which contained PFAS, in fields at its Decatur facility. After a review of the available options to address the presence of PFAS in the soil, ADEM agreed that the preferred remediation option is to use a multilayer cap over the former sludge incorporation areas on the manufacturing site with subsequent groundwater migration controls and treatment. Implementation of that plan continues.

The Company continues to work with the Minnesota Pollution Control Agency (MPCA) pursuant to the terms of the previously disclosed May 2007 Settlement Agreement and Consent Order to address the presence of certain PFAS in the soil and groundwater at former disposal sites in Washington County, Minnesota (Oakdale and Woodbury) and at the Company’s manufacturing facility at Cottage Grove, Minnesota. Under this agreement, the Company’s principal obligations include (i) evaluating releases of certain PFAS from these sites and proposing response actions; (ii) providing treatment or alternative drinking water upon identifying any level exceeding a Health Based Value (“HBV”) or Health Risk Limit (“HRL”) (i.e., the amount of a chemical in drinking water determined by the Minnesota Department of Health (MDH) to be safe for human consumption over a lifetime) for certain PFAS for which a HBV and/or HRL exists as a result of contamination from these sites; (iii) remediating identified sources of other PFAS at these sites that are not controlled by actions to remediate PFOA and PFOS; and (iv) sharing information with the MPCA about certain perfluorinated compounds. During 2008, the MPCA issued formal decisions adopting remedial options for the former disposal sites in Washington County, Minnesota (Oakdale and Woodbury). In August 2009, the MPCA issued a formal decision adopting remedial options for the Company’s Cottage Grove manufacturing facility. During the spring and summer of 2010, 3M began implementing the agreed upon remedial options at the Cottage Grove and Woodbury sites. 3M commenced the remedial option at the Oakdale site in late 2010. At each location the remedial options were recommended by the Company and approved by the MPCA. Remediation work has been completed at the Oakdale and Woodbury sites, and they are in an operational maintenance mode. Remediation continued at the Cottage Grove site during 2019.

In August 2014, the Illinois EPA approved a request by the Company to establish a groundwater management zone at its manufacturing facility in Cordova, Illinois, which includes ongoing pumping of impacted site groundwater, groundwater monitoring and routine reporting of results.

In May 2017, the MDH issued new HBVs for PFOS and PFOA. The new HBVs are 35 ppt for PFOA and 27 ppt for PFOS. In connection with its announcement the MDH stated that “Drinking water with PFOA and PFOS, even at the levels above the updated values, does not represent an immediate health risk. These values are designed to reduce long-term health risks across the population and are based on multiple safety factors to protect the most vulnerable citizens, which makes them overprotective for most of the residents in our state.” In December 2017, the MDH issued a new HBV for perfluorobutane sulfonate (PFBS) of 2 parts per billion (ppb). In February 2018, the MDH published reports finding no unusual rates of certain cancers or adverse birth outcomes (low birth rates or premature births) among residents of Washington and Dakota Counties in Minnesota. In April 2019, the MDH issued a new HBV for PFOS of 15 ppt and a new HBV for PFHxS of 47 ppt.

In May 2018, the EPA announced a four-step PFAS action plan, which includes evaluating the need to set Safe Drinking Water Act maximum contaminant levels (MCLs) for PFOA and PFOS and beginning the steps necessary to designate PFOA and PFOS as “hazardous substances” under CERCLA. In November 2018, the EPA asked for public comment on draft toxicity assessments for two PFAS compounds, including PFBS. In February 2019, the EPA issued a PFAS Action Plan that outlines short- and long-term actions the EPA is taking to address PFAS – actions that include developing a national drinking water determination for PFOA and PFOS, strengthening enforcement authorities and evaluating cleanup approaches, nationwide drinking water monitoring for PFAS, expanding scientific knowledge for understanding and managing risk from PFAS, and developing consistent risk communication tools for communicating with other agencies and the public. With respect to groundwater contaminated with PFOA and PFOS, the EPA issued interim recommendations in December 2019, providing guidance for screening levels and preliminary remediation goals for groundwater that is a current or potential drinking water source, to inform final clean-up levels of contaminated sites.

The U.S. Agency for Toxic Substances and Disease Registry (ATSDR) within the Department of Health and Human Services released a draft Toxicological Profile for PFAS for public review and comment in June 2018. In the draft report, ATSDR proposed draft minimal risk levels (MRLs) for PFOS, PFOA and several other PFAS. An MRL is an estimate of the daily human exposure to a

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hazardous substance that is likely to be without appreciable risk of adverse non-cancer health effects over a specified duration of exposure. MRLs are not intended to define cleanup or action levels for ATSDR or other agencies. In August 2018, 3M submitted comments on the ATSDR proposal, noting that there are major shortcomings with the current draft, especially with the MRLs, and that the ATSDR’s profile must reflect the best science and full weight of evidence known about these chemicals.

Several state legislatures and state agencies have been evaluating or have taken actions related to cleanup standards, groundwater values or drinking water values for PFOS, PFOA, and other PFAS, and 3M has submitted various responsive comments. In September 2019, 3M and several other parties filed a lawsuit in New Hampshire state court to enjoin new PFAS regulations in New Hampshire. In November 2019, the court issued a preliminary injunction preventing the regulations from being enforced. New Hampshire has made a motion to appeal that decision with the State supreme court.

The Company cannot predict what additional regulatory actions arising from the foregoing or other proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions.

Litigation Related to Historical PFAS Manufacturing Operations in Alabama

As previously reported, a former employee filed a putative class action lawsuit against 3M, BFI Waste Management Systems of Alabama, and others in the Circuit Court of Morgan County, Alabama (the “St. John” case), seeking property damage from exposure to certain perfluorochemicals at or near the Company’s Decatur, Alabama, manufacturing facility. The St. John case was stayed through January 2020, pending ongoing mediation between the parties involved in this case and another case discussed below. The parties have submitted a joint motion to extend the stay through April 2020. Two additional putative class actions filed in the same court by certain residents in the vicinity of the Decatur plant seeking relief on similar grounds (the Chandler case and the Stover case, respectively) are stayed pending the resolution of class certification issues in the St. John case.

In October 2015, West Morgan-East Lawrence Water & Sewer Authority (Water Authority) filed an individual complaint against 3M Company, Dyneon, L.L.C, and Daikin America, Inc., in the U.S. District Court for the Northern District of Alabama. The complaint also includes representative plaintiffs who brought the complaint on behalf of themselves, and a class of all owners and possessors of property who use water provided by the Water Authority and five local water works to which the Water Authority supplies water (collectively, the “Water Utilities”). The complaint seeks compensatory and punitive damages and injunctive relief based on allegations that the defendants’ chemicals, including PFOA and PFOS from their manufacturing processes in Decatur, have contaminated the water in the Tennessee River at the water intake, and that the chemicals cannot be removed by the water treatment processes utilized by the Water Authority. In April 2019, 3M and the Water Authority settled the lawsuit for $35 million, which will fund a new water filtration system, with 3M indemnifying the Water Authority from liability resulting from the resolution of the currently pending and future lawsuits against the Water Authority alleging liability or damages related to 3M PFAS. The putative class claims brought by the representative plaintiffs remain, and a motion for class certification is currently pending.

In June 2016, the Tennessee Riverkeeper, Inc. (Riverkeeper), a non-profit corporation, filed a lawsuit in the U.S. District Court for the Northern District of Alabama against 3M; BFI Waste Systems of Alabama; the City of Decatur, Alabama; and the Municipal Utilities Board of Decatur, Morgan County, Alabama. The complaint alleges that the defendants violated the Resource Conservation and Recovery Act in connection with the disposal of certain PFAS through their ownership and operation of their respective sites. The complaint further alleges such practices may present an imminent and substantial endangerment to health and/or the environment and that Riverkeeper has suffered and will continue to suffer irreparable harm caused by defendants’ failure to abate the endangerment unless the court grants the requested relief, including declaratory and injunctive relief. This case has been stayed through April 2020, pending ongoing mediation between the parties in conjunction with the St. John case.

In August 2016, a group of over 200 plaintiffs filed a putative class action against West Morgan-East Lawrence Water and Sewer Authority (Water Authority), 3M, Dyneon, Daikin, BFI, and the City of Decatur in state court in Lawrence County, Alabama (the “Billings” case). Plaintiffs are residents of Lawrence, Morgan and other counties who are or have been customers of the Water Authority. They contend defendants have released PFAS that contaminate the Tennessee River and, in turn, their drinking water, causing damage to their health and properties. In January 2017, the court in the St. John case, discussed above, stayed this litigation pending resolution of the St. John case.

In January 2017, several hundred plaintiffs sued 3M, its subsidiary Dyneon, and Daikin America in Lawrence and Morgan Counties, Alabama (the “Owens” case). The plaintiffs are owners of property, residents, and holders of property interests who receive their

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water from the West Morgan-East Lawrence Water and Sewer Authority (Water Authority). They assert common law claims for negligence, nuisance, trespass, wantonness, and battery, and they seek injunctive relief and punitive damages. The plaintiffs contend that the defendants own and operate manufacturing and disposal facilities in Decatur that have released and continue to release PFOA, PFOS and related chemicals into the groundwater and surface water of their sites, resulting in discharges into the Tennessee River. The plaintiffs contend that, as a result of the alleged discharges, the water supplied by the Water Authority to the plaintiffs was, and is, contaminated with PFOA, PFOS, and related chemicals at a level dangerous to humans. The court denied a motion by co-defendant Daikin to stay this case pending resolution of the St. John case, and the case is progressing through discovery.

In November 2017, a putative class action (the “King” case) was filed against 3M, its subsidiary Dyneon, Daikin America, and the West Morgan-East Lawrence Water and Sewer Authority (Water Authority) in the U.S. District Court for the Northern District of Alabama. The plaintiffs are residents of Lawrence and Morgan County, Alabama who receive their water from the Water Authority and seek injunctive relief, attorneys’ fees, compensatory and punitive damages for their alleged personal injuries. The plaintiffs contend that the defendants own and operate manufacturing and disposal facilities in Decatur that have released and continue to release PFOA, PFOS and related chemicals into the groundwater and surface water of their sites, resulting in discharges into the Tennessee River. The plaintiffs contend that, as a result of the alleged discharges, the water supplied by the Water Authority to the plaintiffs was, and is, contaminated with PFOA, PFOS, and related chemicals at a level dangerous to humans. In November 2019, the King plaintiffs amended their complaint to withdraw all class allegations, dismiss the Water Authority as a defendant, and add 24 new individual plaintiffs (for a total of 59 plaintiffs).

In March 2018, an individual plaintiff filed a lawsuit in the U.S. District Court for the Northern District of Alabama raising allegations and claims substantially similar to those asserted by the plaintiffs in the King case. This case was dismissed without prejudice when the plaintiffs joined a previously pending case.

In January 2018, certain property owners in Trinity, Alabama filed a lawsuit against 3M, Dyneon, and three unnamed defendants in the U.S. District Court for the Northern District of Alabama. The plaintiffs assert claims for negligence, strict liability, trespass, nuisance, wanton and reckless conduct, and citizen suit claims for violation of the Resource Conservation and Recovery Act. They allege these claims arise from the defendants’ contamination of their property by disposal of PFAS in a landfill located on their property. The plaintiffs seek compensatory and punitive damages and a court order directing the defendants to remediate all PFAS contamination on their property. In September 2018, the case was dismissed by stipulation of the parties.

In July 2019, 3M announced that it had initiated an investigation into the possible presence of PFAS in three closed municipal landfills in Decatur that accepted waste from 3M’s Decatur plant and other companies in the 1960s through the 1980s. 3M is working with local and state entities as it conducts its investigation and will report the results and recommended remedial action, if any, to those entities and the public.

Litigation Related to Historical PFAS Manufacturing Operations in Minnesota

In July 2016, the City of Lake Elmo filed a lawsuit in the U.S. District Court for the District of Minnesota against 3M alleging that the City suffered damages from drinking water supplies contaminated with PFAS, including costs to construct alternative sources of drinking water. In April 2019, 3M and the City of Lake Elmo agreed to settle the lawsuit for less than $5 million.

State Attorneys General Litigation related to PFAS

Minnesota. In December 2010, the State of Minnesota, by its Attorney General, filed a lawsuit in Hennepin County District Court against 3M seeking damages and injunctive relief with respect to the presence of PFAS in the groundwater, surface water, fish or other aquatic life, and sediments in the state of Minnesota (the “NRD Lawsuit”). In February 2018, 3M and the State of Minnesota reached a resolution of the NRD Lawsuit. Under the terms of the settlement, 3M agreed to provide an $850 million grant to the State for a special “3M Water Quality and Sustainability Fund.” This Fund, which is administered by the State, will enable projects that support water sustainability in the Twin Cities East Metro region, such as continued delivery of water to residents and enhancing groundwater recharge to support sustainable growth. The projects will also result in habitat and recreation improvements, such as fishing piers, trails, and open space preservation. 3M recorded a pre-tax charge of $897 million, inclusive of legal fees and other related obligations, in the first quarter of 2018 associated with the resolution of this matter.

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New York. The State of New York, by its Attorney General, has filed four lawsuits (in June 2018, February 2019, July 2019, and November 2019) against 3M and other defendants seeking to recover the costs incurred in responding to PFAS contamination allegedly caused by Aqueous Film Forming Foam (AFFF) manufactured by 3M and others. Each of the four suits was filed in Albany County Supreme Court before being removed to federal court, and each has been transferred to the multi-district litigation (MDL) proceeding for AFFF cases, which is discussed further below. The state is seeking compensatory and punitive damages, and injunctive and equitable relief in the form of a monetary fund for the State’s reasonably expected future damages, and/or requiring defendants to perform investigative and remedial work.

Ohio. In December 2018, the State of Ohio, by its Attorney General, filed a lawsuit in the Common Pleas Court of Lucas County, Ohio against 3M, Tyco Fire Products LP, Chemguard, Inc., Buckeye Fire Equipment Co., National Foam, Inc., and Angus Fire Armour Corp., seeking injunctive relief and compensatory and punitive damages for remediation costs and alleged injury to Ohio natural resources from AFFF manufacturers. This case was removed to federal court and transferred to the MDL.

New Jersey. In March 2019, the New Jersey Attorney General filed two actions against 3M, DuPont, and Chemours on behalf of the New Jersey Department of Environmental Protection (NJDEP), the NJDEP’s commissioner, and the New Jersey Spill Compensation Fund regarding alleged discharges at two DuPont facilities in Pennsville, New Jersey (Salem County) and Parlin, New Jersey (Middlesex County). 3M is included as a defendant in both cases because it allegedly supplied PFOA to DuPont for use at the facilities at issue. Both cases expressly seek to have the defendants pay all costs necessary to investigate, remediate, assess, and restore the affected natural resources of New Jersey. DuPont removed these cases to federal court. In August 2019, the court stayed all proceedings in these actions pending a ruling on NJDEP’s motions to remand the cases to state court.

In May 2019, the New Jersey Attorney General and NJDEP filed a lawsuit against 3M, DuPont, and six other companies, alleging natural resource damages from AFFF products and seeking damages, including punitive damages, and associated fees. This case was removed to federal court and transferred to the AFFF MDL.

New Hampshire. In May 2019, the New Hampshire Attorney General filed two lawsuits alleging contamination of the state’s drinking water supplies and other natural resources by PFAS chemicals. The first lawsuit was filed against 3M and seven co-defendants, alleging PFAS contamination resulting from the use of AFFF products at several sites around the state. This case was removed to federal court and transferred to the AFFF MDL. The second suit asserts PFAS contamination from non-AFFF sources and names 3M, DuPont, and Chemours as defendants. This suit remains in state court in early stages of litigation; 3M’s motion to dismiss remains pending.

Vermont. In June 2019, the Vermont Attorney General filed two lawsuits alleging contamination of the state’s drinking water supplies and other natural resources by PFAS chemicals. The first lawsuit was filed against 3M and ten co-defendants, alleging PFAS contamination resulting from the use of AFFF products at several sites around the state. This case was removed to federal court and transferred to the AFFF MDL. The second suit asserts PFAS contamination from non-AFFF sources and names 3M and several entities related to DuPont and Chemours as defendants. This suit remains in state court in early stages of litigation; 3M’s motion to dismiss remains pending.

Michigan. In May 2019, the Michigan Attorney General issued a request for proposal seeking outside legal expertise in pursuing claims against manufacturers, distributors, and other parties related to PFAS. In January 2020, the Michigan Attorney General filed a lawsuit in state court against 3M, Dyneon, DuPont, Chemours and others seeking injunctive and equitable relief and damages for alleged injury to Michigan public natural resources and its residents relating to PFAS.

Guam. In September 2019, the Attorney General of Guam filed a lawsuit against 3M and other defendants relating to contamination of the territory’s drinking water supplies and other natural resources by PFAS, allegedly resulting from the use of AFFF products at several sites around the island. This lawsuit has been removed to federal court and transferred to the AFFF MDL.

Commonwealth of Northern Mariana Islands. In December 2019, the Attorney General of the Commonwealth of Northern Mariana Islands, a U.S. territory, filed a lawsuit against 3M and other defendants relating to contamination of the territory’s drinking water supplies and other natural resources by PFAS, allegedly resulting from the use of AFFF products.

In addition to the above state attorneys general actions, the Company is in discussions with several other state attorneys general and responding to information and other requests relating to PFAS matters.

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Aqueous Film Forming Foam (AFFF) Environmental Litigation

3M manufactured and marketed AFFF for use in firefighting at airports and military bases from approximately 1963 to 2002. As of December 31, 2019, 150 putative class action and other lawsuits have been filed against 3M (along with other defendants) in various state and federal courts where current or former airports, military bases, or fire training facilities are or were located. As previously noted, some of these cases have been brought by state or territory attorneys general. In these cases, plaintiffs typically allege that certain PFAS used in AFFF contaminated the soil and groundwater where AFFF was used and seek damages for loss of use and enjoyment of properties, diminished property values, investigation costs, remediation costs, and in some cases, personal injury and funds for medical monitoring. The United States, the U.S. Department of Defense and several companies have been sued along with 3M, including but not limited to Ansul Co. (acquired by Tyco, Inc.), Angus Fire, Buckeye Fire Protection Co., Chemguard, Chemours, DuPont, National Foam, Inc., and United Technologies Corp.

In December 2018, the U.S. Judicial Panel on Multidistrict Litigation granted motions to transfer and consolidate all AFFF cases pending in federal courts to the U.S. District Court for the District of South Carolina to be managed in an MDL proceeding to centralize pre-trial proceedings. Additional AFFF cases continue to be transferred into the MDL as they are filed or removed to federal court. As of December 31, 2019, there were 147 cases in the MDL, 142 of which name 3M as a defendant. The parties in the MDL are currently in the process of conducting discovery.

In June 2019, several subsidiaries of Valero Energy Corporation, an independent petroleum refiner, filed eight AFFF cases against 3M and other defendants, including DuPont/Chemours, National Foam, Buckeye Fire Equipment, and Kidde-Fenwal, in various state courts. Plaintiffs seek damages that allegedly have been or will be incurred in investigating and remediating PFAS contamination at their properties and replacing or disposing of AFFF products containing long-chain PFAS. Two of these cases have been removed to federal court and transferred to the AFFF MDL. Five cases remain pending in state courts where they are in early stages of litigation, after Valero dismissed its Ohio state court action without prejudice in October 2019.

In September 2019, an individual plaintiff filed an AFFF lawsuit against 3M, together with the State of Alaska, Chemguard, Tyco Fire Equipment Co., DuPont, Chemours and other co-defendants, in state court in Alaska. Plaintiff in this case seeks property damages and medical monitoring on behalf of a putative class. Also in September 2019, 3M was named a defendant, together with Tyco Fire Products, Chemguard, Buckeye Fire Protection and other co-defendants, in an AFFF action filed by individual plaintiffs in state court of New York. Plaintiffs in the New York case seek damages for alleged property damage and personal injuries, as well as injunctive relief in the form of medical monitoring and property testing and remediation.

Other PFAS-related Product and Environmental Litigation

3M manufactured and sold products containing various PFOA and PFOS, including Scotchgard, for several decades. Starting in 2017, 3M has been served with individual and putative class action complaints in various state and federal courts alleging, among other things, that 3M’s customers’ improper disposal of PFOA and PFOS resulted in the contamination of groundwater or surface water. The plaintiffs in these cases generally allege that 3M failed to warn its customers about the hazards of improper disposal of the product. They also generally allege that contaminated groundwater has caused various injuries, including personal injury, loss of use and enjoyment of their properties, diminished property values, investigation costs, and remediation costs. Several companies have been sued along with 3M, including Saint-Gobain Performance Plastics Corp., Honeywell International Inc. f/k/a Allied-Signal Inc. and/or AlliedSignal Laminate Systems, Inc., Wolverine World Wide Inc., Georgia-Pacific LLC, E.I. DuPont De Nemours and Co., Chemours Co., and various carpet manufacturers.

In New York, 3M is defending 47 individual cases and one putative class action filed in the U.S. District Court for the Northern District of New York and four additional cases filed in New York state court against 3M, Saint-Gobain Performance Plastics Corp. (Saint-Gobain), Honeywell International Inc. and E.I. DuPont De Nemours and Co. (DuPont). The plaintiffs allege that 3M manufactured and sold PFOA that was used for manufacturing purposes at Saint-Gobain’s and Honeywell’s facilities located in the Village of Hoosick Falls and the Town of Hoosick. The plaintiffs claim that the drinking water around Hoosick Falls became contaminated with unsafe levels of PFOA due to the activities of the defendants and allege that they suffered bodily injury due to the ingestion and inhalation of PFOA. The plaintiffs seek unstated compensatory, consequential, and punitive damages, as well as attorneys’ fees and costs. In addition, 3M is defending eight cases filed by Nassau County drinking water providers in the U.S. District Court for the Eastern District of New York. The plaintiffs in these cases allege that 3M, DuPont, and additional unnamed defendants

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are responsible for the contamination of plaintiffs’ water supply sources with various PFAS compounds. These cases are in the preliminary stages of litigation.

In Michigan, one consolidated putative class action is pending in the U.S. District Court for the Western District of Michigan against 3M and Wolverine World Wide (Wolverine) and other defendants. The action arises from Wolverine’s allegedly improper disposal of materials and wastes, including 3M Scotchgard, related to Wolverine’s shoe manufacturing operations. Plaintiffs allege Wolverine used 3M Scotchgard in its manufacturing process and that chemicals from 3M’s product contaminated the environment and drinking water sources after disposal. In addition to the consolidated federal court putative class action, as of December 31, 2019, 3M has been named as a defendant in approximately 257 private individual actions in Michigan state court based on similar allegations. These cases are coordinated for pre-trial purposes. Four of these cases were selected for bellwether trials in 2020, with the first trial scheduled in March 2020. In January 2020, the court issued the first round of dispositive motion rulings related to the first two bellwether cases, including dismissing the second bellwether case entirely and dismissing certain plaintiffs’ medical monitoring, risk of future disease, and granting summary judgment to the defendants on one plaintiff’s cholesterol injury claims.

Wolverine also filed a third-party complaint against 3M in a suit by the State of Michigan and intervenor townships that seeks to compel Wolverine to investigate and address contamination associated with its historic disposal activity. 3M filed an answer and counterclaims to Wolverine’s third-party complaint in June 2019. In September and October 2019, the parties (including 3M as third-party defendant) engaged in mediation. In December 2019, the State of Michigan, the intervening townships, and Wolverine announced that they had tentatively resolved the State and townships’ claims against Wolverine in exchange for a $70 million payment and certain future remediation measures by Wolverine. 3M and Wolverine continue to engage in productive settlement discussions.

3M is also a defendant, together with Georgia-Pacific as co-defendant, in a putative class action in federal court in Michigan brought by residents of Parchment, who allege that the municipal drinking water is contaminated from waste generated by a paper mill owned by Georgia-Pacific’s corporate predecessor. Defendants have moved to dismiss certain claims in the complaint, and the parties have begun discovery on the remaining claims.

In Alabama and Georgia, 3M is defending four state court cases, including three brought by municipal water utilities, relating to 3M’s sale of PFAS-containing products to carpet manufacturers in Georgia. The plaintiffs in these cases allege that the carpet manufacturers improperly discharged PFAS into the surface water and groundwater, contaminating drinking water supplies of cities located downstream along the Coosa River, including Rome, Georgia and Centre and Gadsden, Alabama. The three water utility cases remain in the early stages of litigation. One state court case was brought by individuals asserting PFAS contamination by the Georgia carpet manufacturers and seeking economic damages and injunctive relief on behalf of a putative class of Rome and Floyd County water subscribers. This case has been removed to federal court where it remains in early stages of litigation.

In Delaware, 3M is defending one putative class action brought by individuals alleging PFAS contamination of their water supply resulting from the operations of local metal plating facilities. Plaintiffs allege that 3M supplied PFAS to the metal plating facilities. DuPont, Chemours, and the metal platers have also been named as defendants. This case has been removed from state court to federal court, and plaintiffs have filed a motion to remand to state court. 3M has also filed a motion to dismiss.

In Maine, 3M was defending one individual action in state court relating to contamination of drinking water and dairy farm operations by PFAS from wastewater sludge. In October 2019, the plaintiffs filed a notice voluntarily dismissing their case without prejudice.

In New Jersey, 3M is defending an action brought in federal court by Middlesex Water Company, alleging PFAS contamination of its water wells. 3M’s motion to transfer the case to the AFFF MDL was denied. 3M has moved to dismiss the complaint, and the case is currently in the early stages of discovery. In addition, 3M is defending a case brought in state court by multiple individuals with private drinking water wells near Dupont and Solvay facilities that were allegedly supplied with PFAS by 3M. Plaintiffs seek medical monitoring and damages. This case has been removed to federal court, where it remains in early stages. On a separate matter, 3M was dismissed without prejudice from a class action that was previously pending in federal court in New Jersey, relating to the DuPont Chambers Works plant.

In October 2018, 3M and other defendants, including DuPont and Chemours, were named in a putative class action in the U.S. District Court for the Southern District of Ohio brought by the named plaintiff, a firefighter allegedly exposed to PFAS chemicals through his use of firefighting foam, purporting to represent a putative class of all U.S. individuals with detectable levels of PFAS in their blood.

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The plaintiff brings claims for negligence, battery, and conspiracy and seeks injunctive relief, including an order “establishing an independent panel of scientists” to evaluate PFAS. 3M and other entities jointly filed a motion to dismiss in February 2019. In September 2019, the court denied the defendants’ motion to dismiss. In February 2020, the court denied 3M’s motion to transfer the case to the AFFF MDL.

Other PFAS-related Matters

In July 2019, the Company received a written request from the Subcommittee on Environment of the Committee on Oversight and Reform, U.S. House of Representatives, seeking certain documents and information relating to the Company’s manufacturing and distribution of PFAS products. In September 2019, a 3M representative testified before and responded to questions from the Subcommittee on Environment with respect to PFAS and the Company’s environmental stewardship initiatives. The Company continues to cooperate with the Subcommittee.

The Company operates under a 2009 consent order issued under the federal Toxic Substances Control Act (TSCA) (the “2009 TSCA consent order”) for the manufacture and use of two perfluorinated materials (FBSA and FBSEE) at its Decatur, Alabama site that does not permit release of these materials into “the waters of the United States.” In March 2019, the Company halted the manufacture, processing, and use of these materials at the site upon learning that these materials may have been released from certain specified processes at the Decatur site into the Tennessee River. In April 2019, the Company voluntarily disclosed the releases to the U.S. Environmental Protection Agency (EPA) and the Alabama Department of Environmental Management (ADEM). During June and July 2019, the Company took steps to fully control the aforementioned processes by capturing all wastewater produced by the processes and by treating all air emissions. These processes have been back on-line and in operation since July 2019. The Company continues to cooperate with the EPA and ADEM in their investigations and will work with the regulatory authorities to demonstrate compliance with the release restrictions.

The Company is authorized to discharge wastewater from its Decatur plant pursuant to the terms of a Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit issued by ADEM. The NPDES permit requires the Company to report on a monthly and quarterly basis the quality and quantity of pollutants discharged to the Tennessee River. In June 2019, the Company voluntarily disclosed to the EPA and ADEM that it had included incorrect values in certain of its monthly and quarterly reports. The Company has submitted the corrected values to both the EPA and ADEM.

As part of ongoing work with the EPA and ADEM to address compliance matters at the Decatur facility, the Company discovered it had not fully characterized its PFAS discharge in its NPDES permit. In September 2019, the Company disclosed the matter to the EPA and ADEM and announced that it had elected to temporarily idle certain other manufacturing processes at 3M Decatur. The Company is reviewing its operations at the plant, has installed wastewater treatment controls, has restarted certain processes, and is working to re-start the remaining idled processes in compliance with regulatory requirements and Company policies and procedures.

In December 2019, the Company received a grand jury subpoena from the U.S. Attorney’s Office for the Northern District of Alabama for documents related to, among other matters, the Company’s compliance with the 2009 TSCA consent order and unpermitted discharges to the Tennessee River. The Company is cooperating with this inquiry and will produce documents in response to the subpoena.

In addition, as part of its ongoing evaluation of regulatory compliance at its Cordova, Illinois facility, the Company discovered it had not fully characterized its PFAS discharge in its NPDES permit for the Cordova facility. In November 2019, the Company disclosed this matter to the EPA, and in January 2020 disclosed this matter to the Illinois Environmental Protection Agency (IEPA). The Company continues to work with the EPA and IEPA to address the discharge from the Cordova facility.

The Company is also reviewing operations at its other plants with similar manufacturing processes, such as those in Cottage Grove, Minnesota, to ensure those operations are in compliance with applicable environmental regulatory requirements and Company policies and procedures.

The Company will continue to work with relevant state and federal agencies as it conducts these reviews.

The Company cannot predict at this time the outcomes of resolving these compliance matters or what potential actions may be taken by the regulatory agencies.

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Securities Litigation

In July 2019, Heavy & General Laborers’ Locals 472 & 172 Welfare Fund filed a putative securities class action against 3M Company, its former Chairman and CEO, current Chairman and CEO, and current CFO in the U.S. District Court for the District of New Jersey. In August 2019, an individual plaintiff filed a similar putative securities class action in the same district. Plaintiffs allege that defendants made false and misleading statements regarding 3M's exposure to liability associated with PFAS, and bring claims for damages under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 against all defendants, and under Section 20(a) of the Securities and Exchange Act of 1934 against the individual defendants. In October 2019, the court consolidated the securities class actions and appointed a group of lead plaintiffs. The suit is in the early stages of litigation.

In October 2019, a follow-on derivative lawsuit was filed in the U.S. District Court for the District of New Jersey against 3M and several of its current and former executives and directors. In November and December 2019, two additional derivative lawsuits were filed in a Minnesota state court. The derivative lawsuits rely on similar factual allegations as the putative securities class action discussed above. Plaintiffs have agreed to stay these cases pending a ruling on a motion to dismiss the securities class action.

Other Environmental Litigation

In July 2018, the Company, along with more than 120 other companies, was served with a complaint seeking cost recovery and contribution towards the cleaning up of approximately eight miles of the Lower Passaic River in New Jersey. The plaintiff, Occidental Chemical Corporation, alleges that it agreed to design and pay the estimated $165 million cost to remove and cap sediment containing eight chemicals of concern, including PCBs and dioxins. The complaint seeks to spread those costs among the defendants, including the Company. The Company’s involvement in the case relates to its past use of two commercial drum conditioning facilities in New Jersey. Whether, and to what extent, the Company may be required to contribute to the costs at issue in the case remains to be determined.

For environmental matters and litigation described above, unless otherwise stated, no liability has been recorded as the Company believes liability in those matters is not probable and estimable and the Company is not able to estimate a possible loss or range of loss at this time. The Company’s environmental liabilities and insurance receivables are described below.

Environmental Liabilities and Insurance Receivables

The Company periodically examines whether the contingent liabilities related to the environmental matters and litigation described above are probable and estimable based on experience and developments in those matters. During the first quarter of 2019, the EPA issued its PFAS Action Plan and the Company settled the litigation with the Water Authority (both matters are described in more detail above). The Company completed a comprehensive review with the assistance of environmental consultants and other experts regarding environmental matters and litigation related to historical PFAS manufacturing operations in Minnesota, Alabama, Gendorf Germany, and at four former landfills in Alabama. As a result of these developments and of that review, the Company increased its accrual for “other environmental liabilities” by $235 million pre-tax (including the settlement with the Water Authority) in the first quarter of 2019. During the fourth quarter of 2019, 3M updated its evaluation of certain customer-related litigation based on continued, productive settlement discussions with multiple parties. As previously disclosed, 3M has been engaged in mediation and resolution negotiations in multiple cases. In addition, during the fourth quarter, the Company updated its assessment of environmental matters and litigation related to its historical PFAS manufacturing operations and expanded its evaluation of other 3M sites that may have used certain PFAS-containing materials and locations at which they were disposed. As a result of these actions during the fourth quarter the Company recorded a pre-tax charge of $214 million. As of December 31, 2019, the Company had recorded liabilities of $445 million for “other environmental liabilities.” The accruals represent the Company’s best estimate of the probable loss. The Company is not able to estimate a possible loss or range of loss in excess of the established accruals at this time.

As of December 31, 2019, the Company had recorded liabilities of $19 million for estimated non-PFAS related “environmental remediation” costs to clean up, treat, or remove hazardous substances at current or former 3M manufacturing or third-party sites. The Company evaluates available facts with respect to each individual site each quarter and records liabilities for remediation costs on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company’s commitment to a plan of action. Liabilities for estimated costs of environmental remediation, depending on the site, are based primarily upon internal or third-party environmental studies, and estimates as to the number, participation level and financial

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viability of any other potentially responsible parties, the extent of the contamination and the nature of required remedial actions. The Company adjusts recorded liabilities as further information develops or circumstances change. The Company expects that it will pay the amounts recorded over the periods of remediation for the applicable sites, currently ranging up to 20 years.

It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods. Developments may occur that could affect the Company’s current assessment, including, but not limited to: (i) changes in the information available regarding the environmental impact of the Company’s operations and products; (ii) changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages; (iii) new and evolving analytical and remediation techniques; (iv) success in allocating liability to other potentially responsible parties; and (v) the financial viability of other potentially responsible parties and third-party indemnitors. For sites included in both “environmental remediation liabilities” and “other environmental liabilities,” at which remediation activity is largely complete and remaining activity relates primarily to operation and maintenance of the remedy, including required post-remediation monitoring, the Company believes the exposure to loss in excess of the amount accrued would not be material to the Company’s consolidated results of operations or financial condition. However, for locations at which remediation activity is largely ongoing, the Company cannot estimate a possible loss or range of loss in excess of the associated established accruals for the reasons described above.

The Company has both pre-1986 general and product liability occurrence coverage and post-1985 occurrence reported product liability and other environmental coverage for environmental matters and litigation. As of December 31, 2019, the Company’s receivable for insurance recoveries related to the environmental matters and litigation was $33 million. The Company increased its receivable for insurance recoveries by $25 million in the first quarter of 2019. Various factors could affect the timing and amount of recovery of this and future expected increases in the receivable, including (i) delays in or avoidance of payment by insurers; (ii) the extent to which insurers may become insolvent in the future, (iii) the outcome of negotiations with insurers, and (iv) the scope of the insurers’ purported defenses and exclusions to avoid coverage.

Product Liability Litigation

As of December 31, 2019, the Company was a named defendant in nine lawsuits in the United States involving 12 plaintiffs (compared to approximately 5,015 plaintiffs at December 31, 2018) and one Canadian punitive class action with a single named plaintiff, alleging that the Bair Hugger™ patient warming system caused a surgical site infection.

As previously disclosed, 3M had been a named defendant in lawsuits in federal courts involving over 5,000 plaintiffs. The plaintiffs claim they underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger™ patient warming system. The plaintiffs seek damages and other relief based on theories of strict liability, negligence, breach of express and implied warranties, failure to warn, design and manufacturing defect, fraudulent and/or negligent misrepresentation/concealment, unjust enrichment, and violations of various state consumer fraud, deceptive or unlawful trade practices and/or false advertising acts.

The U.S. Judicial Panel on Multidistrict Litigation (JPML) consolidated all cases pending in federal courts to the U.S. District Court for the District of Minnesota to be managed in a multi-district litigation (MDL) proceeding. In July 2019, the court excluded several of the plaintiffs’ causation experts, and granted summary judgment for 3M in all cases pending at that time in the MDL. Plaintiffs have appealed that decision to the U.S. Court of Appeals for the Eighth Circuit. Plaintiffs have also appealed a 2018 jury verdict in favor of 3M in the first bellwether trial in the MDL and appealed the dismissal of another bellwether case.

Among the nine remaining lawsuits in the United States, eight are in the MDL court. Of the eight cases in the MDL, four cases were removed from a Missouri state court. Three of those four were dismissed with the July 2019 MDL summary judgment decision referenced above. Plaintiffs, however, have filed motions to remand all four Missouri cases to state court. All eight remaining lawsuits in the MDL court have been stayed pending the appeal of the summary judgment decision. The ninth case is one the Company has been defending in Hidalgo County, Texas, which combines Bair Hugger product liability claims with medical malpractice claims. In August 2019, the U.S. District Court managing the MDL enjoined the individual plaintiff from pursuing his claims in Texas state court because he had previously filed and dismissed a claim in the MDL. That plaintiff has appealed the order to the U.S. Court of Appeals for the Eighth Circuit. The Texas state court has stayed the entire case while the appeal is pending.

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As previously disclosed, 3M had been named a defendant in 61 cases in Minnesota state court. In January 2018, the Minnesota state court excluded plaintiffs’ experts and granted 3M’s motion for summary judgment on general causation. Plaintiffs appealed that ruling and the state court’s punitive damages ruling. The Minnesota Court of Appeals affirmed the Minnesota state court orders in their entirety and the Minnesota Supreme Court denied plaintiffs’ petition for review. Final dismissal was entered in April 2019, effectively ending the Minnesota state court cases.

In June 2016, the Company was served with a putative class action filed in the Ontario Superior Court of Justice for all Canadian residents who underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger™ patient warming system. The representative plaintiff seeks relief (including punitive damages) under Canadian law based on theories similar to those asserted in the MDL.

No liability has been recorded for the Bair Hugger™ litigation because the Company believes that any such liability is not probable and estimable at this time.

In September 2011, 3M Oral Care launched Lava Ultimate CAD/CAM dental restorative material. The product was originally indicated for inlay, onlay, veneer, and crown applications. In June 2015, 3M Oral Care voluntarily removed crown applications from the product’s instructions for use, following reports from dentists of patients’ crowns debonding, requiring additional treatment. The product remains on the market for other applications. 3M communicated with the U.S. Food and Drug Administration, as well as regulators outside the United States. 3M also informed customers and distributors of its action, offered to accept return of unused materials and provide refunds. In May 2018, 3M reached a preliminary settlement for an amount that did not have a material impact to the Company of the lawsuit pending in the U.S. District Court for the District of Minnesota that sought certification of a class of dentists in the United States and its territories. In September 2019, the court issued an order granting final approval of the settlement.

Aearo Technologies sold Dual-Ended Combat Arms – Version 2 earplugs starting in about 2003. 3M acquired Aearo Technologies in 2008 and sold these earplugs from 2008 through 2015, when the product was discontinued. In December 2018, a military veteran filed an individual lawsuit against 3M in the San Bernardino Superior Court in California alleging that he sustained personal injuries while serving in the military caused by 3M’s Dual-Ended Combat Arms earplugs – Version 2. The plaintiff asserts claims of product liability and fraudulent misrepresentation and concealment. The plaintiff seeks various damages, including medical and related expenses, loss of income, and punitive damages. As of December 31, 2019, the Company is a named defendant in approximately 2,531 lawsuits (including 14 putative class actions) in various state and federal courts that purport to represent approximately 11,318 individual claimants making similar allegations. In April 2019, the U.S. Judicial Panel on Multidistrict Litigation granted motions to transfer and consolidate all cases pending in federal courts to the U.S. District Court for the Northern District of Florida to be managed in a multi-district litigation (MDL) proceeding to centralize pre-trial proceedings. The court conducted a case management conference in June 2019 on a discovery plan and scheduling. Discovery is underway. No liability has been recorded for these matters because the Company believes that any such liability is not probable and estimable at this time.

For product liability litigation matters described in this section for which a liability has been recorded, the amount recorded is not material to the Company’s consolidated results of operations or financial condition. In addition, the Company is not able to estimate a possible loss or range of loss in excess of the established accruals at this time.

Federal False Claims Act / Qui Tam Litigation

In October 2019, 3M acquired Acelity, Inc. and its KCI subsidiaries, including Kinetic Concepts, Inc. and KCI USA, Inc. As previously disclosed in the SEC filings by KCI entities, in 2009, Kinetic Concepts, Inc. received a subpoena from the U.S. Department of Health and Human Services Office of Inspector General. In 2011, following the completion of the government’s review and its decision declining to intervene in two qui tam actions described further below, the qui tam relator-plaintiffs’ pleadings were unsealed.

The government inquiry followed two qui tam actions filed in 2008 by two former employees against Kinetic Concepts, Inc. and KCI USA, Inc. (collectively, the “KCI defendants”) under seal in the U.S. District Court for the Central District of California. The complaints contain allegations that the KCI Defendants violated the federal False Claims Act by submitting false or fraudulent claims to federal healthcare programs by billing for V.A.C.^® Therapy in a manner that was not consistent with the Local Coverage Determinations issued by the Durable Medical Equipment Medicare Administrative Contractors and seek monetary damages. One complaint (the “Godecke case”) also contains allegations that the KCI Defendants retaliated against the relator-plaintiff for alleged whistle-blowing behavior.

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In October 2016, the KCI Defendants filed counterclaims in the Godecke case, asserting breach of contract and conversion. In August 2017, the fraud claim of the Godecke case was dismissed. In January 2018, the district court stayed the retaliation claim and the KCI Defendants' counterclaims pending the relator-plaintiff’s appeal. In September 2019, the U.S. Court of Appeals for the Ninth Circuit reversed and remanded the case to the district court for further proceedings. During a January 2020 status conference, the district court ordered a stay of the proceedings until April 2020. In June 2019, following discovery, the district court in the second case (the “Hartpence case”) entered summary judgment in the KCI Defendants’ favor on all of the relator-plaintiff’s claims. The plaintiff then filed an appeal in the U.S. Court of Appeals for the Ninth Circuit, which is pending. No liability has been recorded for these matters because the Company believes that any such liability is not probable and estimable at this time.

Compliance Matter

The Company, through its internal processes, discovered certain travel activities and related funding and record keeping issues raising concerns, arising from marketing efforts by certain business groups based in China. The Company initiated an internal investigation to determine whether the expenditures may have violated the U.S. Foreign Corrupt Practices Act (FCPA) or other potentially applicable anti-corruption laws. The Company has retained outside counsel and a forensic accounting firm to assist with the investigation. In July 2019, the Company voluntarily disclosed this investigation to both the Department of Justice and Securities and Exchange Commission and is cooperating with both agencies. The Company cannot predict at this time the outcome of its investigation or what potential actions may be taken by the Department of Justice or Securities and Exchange Commission.

NOTE 17. Leases

The Company adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on January 1, 2019 using the modified retrospective method of adoption. 3M elected the transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. Due to the cumulative net impact of adopting ASC 842, the January 1, 2019 balance of retained earnings was increased by $14 million, primarily relating to previously deferred gains from sale-leaseback transactions. In addition, adoption of the new standard resulted in the recording of right of use assets and associated lease liabilities of $0.8 billion each as of January 1, 2019. The Company’s accounting for finance leases (previously called capital leases) remains substantially unchanged. ASC 842 did not have a material impact on 3M’s consolidated income statement. 3M elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. The Company did not elect the hindsight practical expedient.

The components of lease expense are as follows:

	Year ended
(Millions)	December 31, 2019
Operating lease cost	$	308
Finance lease cost:
Amortization of assets		20
Interest on lease liabilities		2
Variable lease cost		93
Total net lease cost	$	423

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Short-term lease cost and income related to sub-lease activity is immaterial for the Company.

Supplemental balance sheet information related to leases is as follows:

	Location on Face of		As of:
(Millions unless noted)	Balance Sheet	December 31, 2019
Operating leases:
Operating lease right of use assets	Operating lease right of use assets	$	858
Current operating lease liabilities	Operating lease liabilities – current	$	247
Noncurrent operating lease liabilities	Operating lease liabilities		607
Total operating lease liabilities		$	854
Finance leases:
Property and equipment, at cost	Property, plant and equipment	$	239
Accumulated amortization	Property, plant and equipment (accumulated depreciation)		(102)
Property and equipment, net		$	137
Current obligations of finance leases	Other current liabilities	$	21
Finance leases, net of current obligations	Other liabilities		111
Total finance lease liabilities		$	132
Weighted average remaining lease term (in years):
Operating leases			5.7
Finance leases			9.0
Weighted average discount rate:
Operating leases			3.2	%
Finance leases			3.8	%

Supplemental cash flow and other information related to leases is as follows:

	Year ended
(Millions)	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	309
Operating cash flows from finance leases		2
Financing cash flows from finance leases		18
Right of use assets obtained in exchange for lease liabilities:
Operating leases		326
Finance leases		61

In the first quarter of 2019, 3M sold and leased-back certain recently constructed machinery and equipment in return for municipal securities, which in aggregate, were recorded as a finance lease asset and obligation of approximately $9 million. During 2019, the Company sold and leased-back an office location and a manufacturing site resulting in a combined gain of $82 million.

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Maturities of lease liabilities were as follows:

	December 31, 2019
(Millions)	Finance Leases		Operating Leases
2020	$	21	$	267
2021		17		191
2022		16		138
2023		15		97
2024		14		65
After 2024		55		173
Total	$	138	$	931
Less: Amounts representing interest		6		77
Present value of future minimum lease payments		132		854
Less: Current obligations		21		247
Long-term obligations	$	111	$	607

As of December 31, 2019, the Company has additional operating lease commitments that have not yet commenced of approximately $23 million. These commitments pertain to 3M’s right of use buildings.

Disclosures related to periods prior to adoption of new lease standard:

Capital and Operating Leases:

Rental expense under operating leases was $393 million in 2018 and $343 million in 2017. Accumulated depreciation for capital leases totaled $54 million as of December 31, 2018. It is 3M’s practice to secure renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain a presence in a leased facility. 3M has the following primary capital leases:

● In 2003, 3M recorded a capital lease asset and obligation of approximately 34 million British Pound (GBP), or approximately $43 million at December 31, 2018, exchange rates, for a building in the United Kingdom (with a lease term of 22 years).

● 3M sold and leased-back certain recently constructed machinery and equipment in return for municipal securities, which in aggregate, were recorded as a capital lease asset and obligation of approximately $13 million in 2018 and $13 million in 2017, with an average remaining lease term remaining of 15 years at December 31, 2018.

Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2018, were as follows:

			Operating
(Millions)	Capital Leases		Leases
2019	$	18	$	283
2020		16		208
2021		14		153
2022		12		122
2023		12		92
After 2023		32		253
Total	$	104	$	1,111
Less: Amounts representing interest		12
Present value of future minimum lease payments		92
Less: Current obligations under capital leases		17
Long-term obligations under capital leases	$	75

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NOTE 18. Stock-Based Compensation

The 3M 2016 Long-Term Incentive Plan provides for the issuance or delivery of up to 123,965,000 shares of 3M common stock pursuant to awards granted under the plan. Awards may be issued in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards, and performance units and performance shares. As of December 31, 2019, the remaining shares available for grant under the LTIP Program are 22 million and there were approximately 6,700 participants with outstanding options, restricted stock, or restricted stock units.

The Company’s annual stock option and restricted stock unit grant is made in February to provide a strong and immediate link between the performance of individuals during the preceding year and the size of their annual stock compensation grants. The grant to eligible employees uses the closing stock price on the grant date. Accounting rules require recognition of expense under a non-substantive vesting period approach, requiring compensation expense recognition when an employee is eligible to retire. Employees are considered eligible to retire at age 55 and after having completed ten years of service. This retiree-eligible population represents 37 percent of the annual grant’s stock-based compensation expense; therefore, higher stock-based compensation expense is recognized in the first quarter.

In addition to the annual grants, the Company makes other minor grants of stock options, restricted stock units and other stock-based grants. The Company issues cash settled restricted stock units and stock appreciation rights in certain countries. These grants do not result in the issuance of common stock and are considered immaterial by the Company.

Beginning in 2016, as a result of the Company’s application of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, certain excess tax benefits at the time of exercise (for an option) or upon vesting (for restricted stock units) are recognized as income tax benefits in the statement of income. These amounts totaled $89 million, $100 million, and $228 million for 2019, 2018 and 2017, respectively, and are reflected in the “income tax benefits” line within the stock-based compensation table below.

Amounts recognized in the financial statements with respect to stock-based compensation programs, which include stock options, restricted stock, restricted stock units, performance shares and the General Employees’ Stock Purchase Plan (GESPP), are provided in the following table. Capitalized stock-based compensation amounts were not material.

Stock-Based Compensation Expense

	Years ended December 31
(Millions)	2019		2018		2017
Cost of sales	$	47	$	48	$	49
Selling, general and administrative expenses		185		207		229
Research, development and related expenses		46		47		46
Stock-based compensation expenses	$	278	$	302	$	324
Income tax benefits		(141)		(154)		(327)
Stock-based compensation expenses (benefits), net of tax	$	137	$	148	$	(3)

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Stock Option Program

The following table summarizes stock option activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
	Number of	Average		Number of	Average		Number of	Average
(Options in thousands)	Options	Exercise Price		Options	Exercise Price		Options	Exercise Price
Under option —
January 1	34,569	$	138.98	34,965	$	125.73	36,196	$	112.07
Granted:
Annual	3,434		200.80	3,211		233.19	5,410		175.93
Exercised	(4,193)		89.89	(3,482)		91.01	(6,474)		90.37
Forfeited	(135)		201.27	(125)		188.00	(167)		162.36
December 31	33,675	$	151.15	34,569	$	138.98	34,965	$	125.73
Options exercisable
December 31	26,487	$	136.75	26,117	$	121.98	24,281	$	108.50

Stock options generally vest over a period from one to three years with the expiration date at 10 years from date of grant. As of December 31, 2019, there was $62 million of compensation expense that has yet to be recognized related to non-vested stock option based awards. This expense is expected to be recognized over the remaining weighted-average vesting period of 20 months. For options outstanding at December 31, 2019, the weighted-average remaining contractual life was 64 months and the aggregate intrinsic value was $1.1 billion. For options exercisable at December 31, 2019, the weighted-average remaining contractual life was 54 months and the aggregate intrinsic value was $1.1 billion.

The total intrinsic values of stock options exercised during 2019, 2018 and 2017 was $433 million, $469 million and $703 million, respectively. Cash received from options exercised during 2019, 2018 and 2017 was $375 million, $316 million and $585 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the exercise of employee stock options for 2019, 2018 and 2017 was $91 million, $99 million and $238 million, respectively.

For the primary annual stock option grant, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model and the assumptions that follow.

Stock Option Assumptions

	Annual
	2019			2018			2017
Exercise price	$	201.12		$	233.63		$	175.76
Risk-free interest rate		2.6	%		2.7	%		2.1	%
Dividend yield		2.5	%		2.4	%		2.5	%
Expected volatility		20.4	%		21.0	%		17.3	%
Expected life (months)		79			78			78
Black-Scholes fair value	$	34.19		$	41.59		$	23.51

Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2019 annual grant date, the Company estimated the expected volatility based upon the following three volatilities of 3M stock: the median of the term of the expected life rolling volatility; the median of the most recent term of the expected life volatility; and the implied volatility on the grant date. The expected term assumption is based on the weighted average of historical grants.

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Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
		Average			Average			Average
	Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
(Shares in thousands)	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Nonvested balance —
As of January 1	1,789	$	180.02	1,994	$	162.60	2,185	$	145.64
Granted
Annual	564		200.41	467		233.61	604		176.10
Other	15		180.08	8		207.76	21		233.77
Vested	(732)		149.33	(640)		164.83	(769)		127.21
Forfeited	(63)		192.52	(40)		186.48	(47)		158.25
As of December 31	1,573	$	201.11	1,789	$	180.02	1,994	$	162.60

As of December 31, 2019, there was $72 million of compensation expense that has yet to be recognized related to non-vested restricted stock and restricted stock units. This expense is expected to be recognized over the remaining weighted-average vesting period of 22 months. The total fair value of restricted stock and restricted stock units that vested during the years ended December 31, 2019, 2018 and 2017 was $144 million, $155 million and $136 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the vesting of restricted stock and restricted stock units for 2019, 2018 and 2017 was $28 million, $29 million and $45 million, respectively.

Restricted stock units granted generally vest three years following the grant date assuming continued employment. Dividend equivalents equal to the dividends payable on the same number of shares of 3M common stock accrue on these restricted stock units during the vesting period, although no dividend equivalents are paid on any of these restricted stock units that are forfeited prior to the vesting date. Dividends are paid out in cash at the vest date on restricted stock units. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average restricted stock unit shares outstanding are included in the computation of diluted earnings per share.

Performance Shares

Instead of restricted stock units, the Company makes annual grants of performance shares to members of its executive management. The 2019 performance criteria for these performance shares (organic volume growth, return on invested capital, free cash flow conversion, and earnings per share growth) were selected because the Company believes that they are important drivers of long-term stockholder value. The number of shares of 3M common stock that could actually be delivered at the end of the three-year performance period may be anywhere from 0% to 200% of each performance share granted, depending on the performance of the Company during such performance period. When granted, these performance shares are awarded at 100% of the estimated number of shares at the end of the three-year performance period and are reflected under “Granted” in the table below. Non-substantive vesting requires that expense for the performance shares be recognized over one or three years depending on when each individual became a 3M executive. The performance share grants accrue dividends, therefore the grant date fair value is equal to the closing stock price on the date of grant. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average performance shares whose performance period is complete are included in computation of diluted earnings per share.

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The following table summarizes performance share activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
		Average			Average			Average
	Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
(Shares in thousands)	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Undistributed balance —
As of January 1	562	$	188.96	686	$	171.90	656	$	142.98
Granted	166		207.49	166		229.13	201		191.28
Distributed	(210)		162.16	(206)		159.82	(314)		124.88
Performance change	(48)		204.73	(56)		198.39	155		173.91
Forfeited	(26)		209.96	(28)		204.09	(12)		171.36
As of December 31	444	$	205.58	562	$	188.96	686	$	171.90

As of December 31, 2019, there was $16 million of compensation expense that has yet to be recognized related to performance shares. This expense is expected to be recognized over the remaining weighted-average earnings period of 20 months. The total fair value of performance shares that were distributed were $45 million, $48 million, and $55 million for 2019, 2018 and 2017, respectively. The Company’s actual tax benefits realized for the tax deductions related to the distribution of performance shares were $9 million, $11 million, and $15 million per year for 2019, 2018, and 2017, respectively.

General Employees’ Stock Purchase Plan (GESPP):

As of December 31, 2019, shareholders have approved 60 million shares for issuance under the Company’s GESPP. Substantially all employees are eligible to participate in the plan. Participants are granted options at 85% of market value at the date of grant. There are no GESPP shares under option at the beginning or end of each year because options are granted on the first business day and exercised on the last business day of the same month.

The weighted-average fair value per option granted during 2019, 2018 and 2017 was $27.14, $31.91 and $30.07, respectively. The fair value of GESPP options was based on the 15% purchase price discount. The Company recognized compensation expense for GESSP options of $30 million in 2019, $30 million in 2018, and $26 million in 2017.

NOTE 19. Business Segments and Geographic Information

3M’s businesses are organized, managed and internally grouped into segments based on differences in markets, products, technologies and services. 3M manages its operations in four business segments: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. 3M’s four business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income information shown. The difference between operating income and pre-tax income relates to other expense (income), which is not allocated to business segments. Further information about which is included in Note 6.

Effective in the second quarter of 2019, to enable the Company to better serve global customers and markets, the Company made the following changes to its business segments:

Realignment of the Company’s business segments from five to four

The Company realigned its former five business segments into four: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. Existing divisions were largely realigned to this new structure. In addition, certain retail auto care product lines formerly in the Automotive Aftermarket Division (now within the Safety and Industrial business segment) were moved to the Construction and Home Improvement Division (within the Consumer business segment). Also, product lines relating to the refrigeration filtration business, formerly included in the Separation and Purification Sciences Division (now within the Health Care business segment) were moved to Other Safety and Industrial (within the Safety and Industrial business segment). 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. Dual credit, which is

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based on which business segment provides customer account activity with respect to a particular product sold in a specific country, was reduced as a result of the closer alignment between customer account activity and their respective markets. The four business segments are as follows:

Safety and Industrial: This segment includes businesses that serve the global industrial, electrical and safety markets. This business segment consists of personal safety, industrial adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket, and roofing granules. This segment also includes the Communication Markets Division (which was substantially sold in 2018) and the refrigeration filtration product lines (within Other Safety and Industrial).

Transportation and Electronics: This segment includes businesses that serve global transportation and electronic original equipment manufacturer (OEM) customers. This business segment consists of electronics (display materials and systems, electronic materials solutions), automotive and aerospace, commercial solutions, advanced materials, and transportation safety.

Health Care: This business segment serves the global healthcare industry and includes medical solutions, oral care, separation and purification sciences, health information systems, drug delivery systems, and food safety.

Consumer: This business serves global consumers and consists of home improvement, stationery and office supplies, home care, and consumer health care. This segment also includes, within the Construction and Home Improvement Division, certain retail auto care product lines.

In addition, as part of 3M’s continuing effort to improve the alignment of its businesses around markets and customers, the Company made the following changes, effective in the first quarter of 2019, and other revisions impacting business segment reporting:

Continued alignment of customer account activity

● As part of 3M’s regular customer-focus initiatives, the Company realigned certain customer account activity (“sales district”) to correlate with the primary divisional product offerings in various countries and reduce complexity for customers when interacting with multiple 3M businesses. This largely impacted the amount of dual credit certain business segments receive as a result of sales district attribution. 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. This dual credit is based on which business segment provides customer account activity with respect to a particular product sold in a specific country.

Creation of Closure and Masking Systems Division and Medical Solutions Division

● 3M created the Closure and Masking Systems Division, which combines the masking tape, packaging tape and personal care portfolios formerly within Industrial Adhesives and Tapes Division in the former Industrial business segment into a separate division also within the former Industrial business segment. 3M created the Medical Solutions Division in the Health Care business segment, which combines the former Critical and Chronic Care Division and Infection Prevention Division (which were also both within the Health Care business segment).

Additional actions impacting business segment reporting

● The business associated with certain safety products sold through retail channels in the Asia Pacific region was realigned from the Personal Safety Division within the former Safety and Graphics business segment to the Construction and Home Improvement Division within the Consumer business segment. In addition, certain previously non-allocated costs related to manufacturing and technology of centrally managed material resource centers of expertise within Corporate and Unallocated are now reflected as being allocated to the business segments.

The financial information presented herein reflects the impact of the preceding business segment reporting changes for all periods presented.

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Business Segment Products

Business Segment	Major Products
Safety and Industrial	Tapes, coated, nonwoven and bonded abrasives, adhesives, sealants, specialty materials, closure systems for personal hygiene products, abrasion-resistant films, structural adhesives, infrastructure protection products, renewable energy component solutions, roofing granules for asphalt shingles, personal protection products, fall protection products, and self-contained breathing apparatus systems
Transportation and Electronics	Optical film solutions for electronic displays, packaging and interconnection devices, insulating and splicing solutions for the electronics and electrical industries, touch screens and touch monitors, acoustic systems products, automotive components, advanced ceramics, commercial graphics systems, commercial cleaning and protection products, and transportation safety products
Health Care	Medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental and orthodontic products, health information systems, filtration products, and food safety products
Consumer	Consumer and office tapes and adhesives, repositionable notes, indexing systems, home improvement products, furnace filters, painter tapes, mounting products, home care products, sponges, scouring pads, high-performance clothes, protective material products, paint finishing and detailing products, and adhesive bandages and braces

Business Segment Information

	Net Sales						Operating Income
(Millions)	2019		2018		2017		2019		2018		2017
Safety and Industrial	$	11,607	$	12,494	$	11,946	$	2,648	$	3,423	$	2,603
Transportation and Electronics		9,602		10,106		9,861		2,221		2,649		2,986
Health Care		7,431		6,826		6,635		1,863		1,921		1,877
Consumer		5,089		5,086		5,006		1,105		1,071		1,051
Corporate and Unallocated		110		50		2		(1,243)		(1,409)		(367)
Elimination of Dual Credit		(1,703)		(1,797)		(1,793)		(420)		(448)		(458)
Total Company	$	32,136	$	32,765	$	31,657	$	6,174	$	7,207	$	7,692

	Assets						Depreciation & Amortization						Capital Expenditures
(Millions)	2019		2018		2017		2019		2018		2017		2019		2018		2017
Safety and Industrial	$	12,593	$	13,086	$	13,560	$	682	$	528	$	424	$	391	$	375	$	255
Transportation and Electronics		7,611		7,773		7,786		324		337		437		390		339		382
Health Care		15,210		7,092		7,258		277		216		257		264		245		217
Consumer		2,792		2,963		2,909		91		97		117		130		115		110
Corporate and Unallocated		6,453		5,586		6,474		219		310		309		524		503		409
Total Company	$	44,659	$	36,500	$	37,987	$	1,593	$	1,488	$	1,544	$	1,699	$	1,577	$	1,373

Corporate and unallocated operating income includes a variety of miscellaneous items, such as corporate investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension, stock-based compensation) that the Company may choose not to allocate directly to its business segments. Corporate and Unallocated also includes sales, costs, and income from contract manufacturing, transition services and other arrangements with the acquirer of all of the Communication Markets Division following its divestiture in 2018. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

3M business segment reporting measures include dual credit to business segments for certain sales and related operating income. Management evaluates each of its four business segments based on net sales and operating income performance, including dual credit reporting to further incentivize sales growth. As a result, 3M reflects additional (“dual”) credit to another business segment when the customer account activity (“sales district”) with respect to the particular product sold to the external customer is provided by a different business segment. This additional dual credit is largely reflected at the division level. For example, privacy screen protection products are primarily sold by the Display Materials and Systems Division within the Transportation and Electronics business

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segment; however, certain sales districts within the Consumer business segment provide the customer account activity for sales of the product to particular customers. In this example, the non-primary selling segment (Consumer) would also receive credit for the associated net sales initiated through its sales district and the related approximate operating income. The assigned operating income related to dual credit activity may differ from operating income that would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is reflected as a reconciling item entitled “Elimination of Dual Credit,” such that sales and operating income in total are unchanged.

Geographic Information

Geographic area information is used by the Company as a secondary performance measure to manage its businesses. Export sales and certain income and expense items are generally reported within the geographic area where the final sales to 3M customers are made.

							Property, Plant and
	Net Sales						Equipment - net
(Millions)	2019		2018		2017		2019		2018
United States	$	13,159	$	12,840	$	12,372	$	5,442	$	4,915
Asia Pacific		9,796		10,254		9,809		1,637		1,624
Europe, Middle East and Africa		6,226		6,654		6,456		1,823		1,751
Latin America and Canada		2,965		3,024		3,033		431		448
Other Unallocated		(10)		(7)		(13)		—		—
Total Company	$	32,136	$	32,765	$	31,657	$	9,333	$	8,738

Asia Pacific included China/Hong Kong net sales to customers of $3.337 billion, $3.574 billion and $3.255 billion in 2019, 2018, and 2017, respectively. China/Hong Kong net property, plant and equipment (PP&E) was $553 million and $542 million at December 31, 2019 and 2018, respectively.

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NOTE 20. Quarterly Data (Unaudited)

(Millions, except per-share amounts)	First		Second		Third		Fourth		Year
2019	Quarter		Quarter		Quarter		Quarter		2019
Net sales	$	7,863	$	8,171	$	7,991	$	8,111	$	32,136
Cost of sales		4,310		4,313		4,188		4,325		17,136
Net income including noncontrolling interest		893		1,131		1,588		970		4,582
Net income attributable to 3M		891		1,127		1,583		969		4,570
Earnings per share attributable to 3M common shareholders - basic		1.54		1.95		2.75		1.68		7.92
Earnings per share attributable to 3M common shareholders - diluted		1.51		1.92		2.72		1.66		7.81

(Millions, except per-share amounts)	First		Second		Third		Fourth		Year
2018	Quarter		Quarter		Quarter		Quarter		2018
Net sales	$	8,278	$	8,390	$	8,152	$	7,945	$	32,765
Cost of sales		4,236		4,227		4,159		4,060		16,682
Net income including noncontrolling interest		606		1,862		1,546		1,349		5,363
Net income attributable to 3M		602		1,857		1,543		1,347		5,349
Earnings per share attributable to 3M common shareholders - basic		1.01		3.14		2.64		2.32		9.09
Earnings per share attributable to 3M common shareholders - diluted		0.98		3.07		2.58		2.27		8.89

Gross profit is calculated as net sales minus cost of sales.

In 2019, the Company recorded significant litigation-related charges related to PFAS (certain perfluorinated compounds) matters and coal mine dust respirator mask lawsuits as further described in Note 16, which reduced net income by $590 million, or $1.01 per diluted share, of which $424 million, or $0.72 per diluted share occurred in the first quarter and $166 million, or $0.29 per diluted share occurred in the fourth quarter. In the second quarter of 2019, the Company recorded a non-operating charge related to the deconsolidation of its Venezuelan subsidiary, which reduced net income by $162 million, or $0.28 per diluted share.

In the first quarter of 2018, the Company recorded significant litigation-related charges related to the previously disclosed resolution of the State of Minnesota Natural Resource Damages (NRD) lawsuit, which reduced net income by $710 million, or $1.16 per diluted share. Refer to Note 16 for additional details. Additionally, the first quarter of 2018 was impacted by a measurement period adjustment related to the enactment of the Tax Cuts and Jobs Act (TCJA), which reduced net income by $217 million, or $0.36 per diluted share. Refer to Note 10 for additional details.

In the fourth quarter of 2018, the Company’s ongoing IRS examination under the Compliance Assurance Process (CAP) and new guidance released under the Tax Cuts and Jobs Act resulted in a charge that reduced net income by $60 million, or $0.11 per diluted share. Additionally, in the fourth quarter of 2018, the Company finalized the tax impact related to TCJA with a reversal of previously recorded tax expense that increased net income by $41 million, or $0.07 per diluted share. On a combined basis, these items, including the impacts detailed above for the first quarter of 2018, reduced net income by $946 million, or $1.57 per diluted share in 2018.

134

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

a. The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

b. The Company’s management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f). Management conducted an assessment of the Company’s internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Based on the assessment, management concluded that, as of December 31, 2019, the Company’s internal control over financial reporting is effective. Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019 excluded M*Modal and Acelity, which were acquired by the Company in February 2019 and October 2019, respectively. The total assets and total net sales of M*Modal and Acelity collectively represent 2 percent and 2 percent, respectively, of the related consolidated financial statement amounts as of December 31, 2019. Companies are allowed to exclude acquisitions from their assessment of internal control over financial reporting during the year of acquisition while integrating the acquired company under guidelines established by the Securities and Exchange Commission. The Company’s internal control over financial reporting as of December 31, 2019 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019.

c. There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company is implementing an enterprise resource planning (“ERP”) system on a worldwide basis, which is expected to improve the efficiency of certain financial and related transaction processes. The gradual implementation is expected to occur in phases over the next several years. The implementation of a worldwide ERP system will likely affect the processes that constitute our internal control over financial reporting and will require testing for effectiveness.

The Company completed implementation with respect to various processes/sub-processes in certain subsidiaries/locations, including aspects relative to the United States, and will continue to roll out the ERP system over the next several years. As with any new information technology application we implement, this application, along with the internal controls over financial reporting included in this process, was appropriately considered within the testing for effectiveness with respect to the implementation in these instances. We concluded, as part of its evaluation described in the above paragraphs, that the implementation of the ERP system in these circumstances has not materially affected our internal control over financial reporting.

Item 9B. Other Information.

None.

135

PART III

Documents Incorporated by Reference

In response to Part III, Items 10, 11, 12, 13 and 14, parts of the Company’s definitive proxy statement (to be filed pursuant to Regulation 14A within 120 days after Registrant’s fiscal year-end of December 31, 2019) for its annual meeting to be held on May 12, 2020, are incorporated by reference in this Form 10-K.

Item 10. Directors, Executive Officers and Corporate Governance.

The information relating to directors and nominees of 3M is set forth under the caption “Proposal No. 1” in 3M’s proxy statement for its annual meeting of stockholders to be held on May 12, 2020 (“3M Proxy Statement”) and is incorporated by reference herein. Information about executive officers is included in Item 1 of this Annual Report on Form 10-K. The information required by Items 405, 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is contained under the captions “Delinquent Section 16(a) Reports,” “Corporate Governance At 3M — Board Membership Criteria — Identification, Evaluation, and Selection of Nominees,,” “—Nominees Proposed By Shareholders,” “—Shareholder Nominations”, and “—Proxy Access Nominations” and “Corporate Governance At 3M -- Board Committees – Audit Committee” of the 3M Proxy Statement and such information is incorporated by reference herein.

Code of Ethics. All of our employees, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer and Controller, are required to abide by 3M’s long-standing business conduct policies to ensure that our business is conducted in a consistently legal and ethical manner. 3M has posted the text of such code of ethics on its website (http://www.3M.com/businessconduct). At the same website, any future amendments to the code of ethics will also be posted. Any person may request a copy of the code of ethics, at no cost, by writing to us at the following address:

3M Company

3M Center, Building 220-11W-09

St. Paul, MN 55144-1000

Attention: Vice President, 3M Ethics & Compliance

Item 11. Executive Compensation.

The information required by Item 402 of Regulation S-K is contained under the captions “Executive Compensation” (excluding the information under the caption “— Compensation Committee Report”) and “Director Compensation and Stock Ownership Guidelines” of the 3M Proxy Statement. Such information is incorporated by reference.

The information required by Items 407(e)(4) and (e)(5) of Regulation S-K is contained in the “Executive Compensation” section under the captions “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” of the 3M Proxy Statement. Such information (other than the Compensation Committee Report, which shall not be deemed to be “filed”) is incorporated by reference.

136

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information relating to security ownership of certain beneficial owners and management is set forth under the designation “Security Ownership of Management” and “Security Ownership of Certain Beneficial Owners” in the 3M Proxy Statement and such information is incorporated by reference herein.

Equity compensation plans information as of December 31, 2019 follows:

Equity Compensation Plans Information (1)

	A	B		C
	Number of	Weighted-		Number of securities
	securities to be	average exercise		remaining available for
	issued upon	price of		future issuance under
	exercise of	outstanding		equity compensation
	outstanding	options,		plans (excluding
	options, warrants	warrants and		securities reflected in
Plan Category (options and shares in thousands)	and rights	rights		column (A))
Equity compensation plans approved by security holders
Stock options	33,675	$	151.15	—
Restricted stock units	1,573			—
Performance shares	444			—
Non-employee director deferred stock units	232			—
Total	35,924			22,165
Employee stock purchase plan	—			24,190
Subtotal	35,924			46,355
Total	35,924			46,355

(1) In column B, the weighted-average exercise price is only applicable to stock options. In column C, the number of securities remaining available for future issuance for stock options, restricted stock units, and stock awards for non-employee directors is approved in total and not individually with respect to these items.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

With respect to certain relationships and related transactions as set forth in Item 404 of Regulation S-K, no matters require disclosure with respect to transactions with related persons. The information required by Item 404(b) and Item 407(a) of Regulation S-K is contained under the section “Corporate Governance at 3M” under the captions “Director Independence” and “Related Person Transaction Policy and Procedures” of the 3M Proxy Statement and such information is incorporated by reference herein.

Item 14. Principal Accounting Fees and Services.

The information relating to principal accounting fees and services is set forth in the section entitled “Audit Committee Matters” under the designation “Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Accounting Firm” and “Fees of the Independent Accounting Firm” in the 3M Proxy Statement and such information is incorporated by reference herein.

137

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) (1) Financial Statements. The consolidated financial statements filed as part of this report are listed in the index to financial statements at the beginning of this document.

(a) (2) Financial Statement Schedules. Financial statement schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the Consolidated Financial Statements or the notes thereto. The financial statements of unconsolidated subsidiaries are omitted because, considered in the aggregate, they would not constitute a significant subsidiary.

(a) (3) Exhibits. The exhibits are either filed with this report or incorporated by reference into this report. See (b) Exhibits, which follow.

(b) Exhibits.

(3)Articles of Incorporation and bylaws

(3.1)	Certificate of incorporation, as amended as of December 4, 2017, is incorporated by reference from our Form 8-K dated December 7, 2017.
(3.2)	Amended and Restated Bylaws, as adopted as of November 10, 2015, are incorporated by reference from our Form 8-K dated November 10, 2015.

(4)Instruments defining the rights of security holders, including indentures:

(4.1)	Indenture, dated as of November 17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M’s senior debt securities, is incorporated by reference from our Form 8-K dated December 7, 2000.
(4.2)	First Supplemental Indenture, dated as of July 29, 2011, to Indenture dated as of November 17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M’s senior debt securities, is incorporated by reference from our Form 10-Q for the quarter ended June 30, 2011.
(4.3)	Description of Securities is filed herewith.

(10)Material contracts and management compensation plans and arrangements:

(10.1)*	3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.2)*	Form of Stock Option Award Agreement under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.3)*	Form of Stock Appreciation Right Award Agreement under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.4)*	Form of Restricted Stock Unit Award Agreement under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.5)*	Form of Performance Share Award Agreement for performance share awards granted under the 3M Company 2016 Long-Term Incentive Plan prior to February 5, 2018, is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.6)*	Form of Performance Share Award Agreement for performance share awards granted under the 3M Company 2016 Long-Term Incentive Plan on or after February 5, 2018 is incorporated by reference from our Form 10-K for the year ended December 31, 2017.
(10.7)*	Form of Stock Issuance Award Agreement for stock issuances on or after January 1, 2019 to Non-Employee Directors under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2018.
(10.8)*	Form of Deferred Stock Unit Award Agreement for deferred stock units granted on or after January 1, 2019 to Non-Employee Directors under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2018.

138

(10.9)*	3M 2008 Long-Term Incentive Plan (including amendments through February 2, 2016) is incorporated by reference from our Form 10-K for the year ended December 31, 2015.
(10.10)*	Form of Agreement for Stock Option Grants to Executive Officers under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 13, 2008.
(10.11)*	Form of Stock Option Agreement for options granted to Executive Officers under the 3M 2008 Long-Term Incentive Plan, commencing February 9, 2010, is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.12)*	Form of Stock Option Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.13)*	Form of Restricted Stock Unit Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.14)*	Amended and Restated 3M VIP Excess Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.15)*	Amended and Restated 3M VIP (Voluntary Investment Plan) Plus Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.16)*	3M Deferred Compensation Excess Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.17)*	3M Performance Awards Deferred Compensation Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.18)*	3M Annual Incentive Plan (including amendments through February 3, 2020) is incorporated herewith.
(10.19)*	3M Executive Annual Incentive Plan is incorporated by reference from our Form 8-K dated May 14, 2007.
(10.20)*	3M Executive Severance Plan is incorporated herewith.
(10.21)*	3M Compensation Plan for Non-Employee Directors, as amended, through November 8, 2004, is incorporated by reference from our Form 10-K for the year ended December 31, 2004.
(10.22)*	Amendment of 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.23)*	Amendment of 3M Compensation Plan for Non-Employee Directors as of August 12, 2013, is incorporated by reference from our Form 10-Q for the quarter ended September 30, 2013.
(10.24)*	Amendment and Restatement of 3M Compensation Plan for Non-Employee Directors as of January 1, 2019, is incorporated by reference from our Form 10-K for the year ended December 31, 2018.
(10.25)*	3M Executive Life Insurance Plan, as amended, is incorporated by reference from our Form 10-K for the year ended December 31, 2017.
(10.26)*	Policy on Reimbursement of Incentive Payments is incorporated by reference from our Form 10-Q for the quarter ended June 30, 2018.
(10.27)*	Amended and Restated 3M Nonqualified Pension Plan I is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.28)*	Amended and Restated 3M Nonqualified Pension Plan II is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.29)*	Amended and Restated 3M Nonqualified Pension Plan III is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
3	Policy on Reimbursement of Incentive Compensation (effective May 11, 2010) is incorporated by reference from our Form 10-Q dated August 4, 2010.
(10.30)	Amended and restated five-year credit agreement as of November 15, 2019, is incorporated by reference from our Form 8-K dated November 19, 2019.
(10.31)	364-day credit agreement as of November 15, 2019, is incorporated by reference from our Form 8-K dated November 19, 2019.
(10.32)	Registration Rights Agreement as of August 4, 2009, between 3M Company and State Street Bank and Trust Company as Independent Fiduciary of the 3M Employee Retirement Income Plan, is incorporated by reference from our Form 8-K dated August 5, 2009.

139

Filed herewith, in addition to items, if any, specifically identified above:

(21)	Subsidiaries of the Registrant.
(23)	Consent of independent registered public accounting firm.
(24)	Power of attorney.
(31.1)	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(31.2)	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.1)	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.2)	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(95)	Mine Safety Disclosures.
(101.INS)	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
(101.SCH)	Inline XBRL Taxonomy Extension Schema Document
(101.CAL)	Inline XBRL Taxonomy Extension Calculation Linkbase Document
(101.DEF)	Inline XBRL Taxonomy Extension Definition Linkbase Document
(101.LAB)	Inline XBRL Taxonomy Extension Label Linkbase Document
(101.PRE) (104)	Inline XBRL Taxonomy Extension Presentation Linkbase Document Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

________________________

* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form 10-K.

Item 16. Form 10-K Summary.

A Form 10-K summary is provided at the beginning of this document, with hyperlinked cross-references. This allows users to easily locate the corresponding items in Form 10-K, where the disclosure is fully presented. The summary does not include certain Part III information that is incorporated by reference from a future proxy statement filing.

140

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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/ Nicholas C. Gangestad
	Nicholas C. Gangestad,
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February 6, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 6, 2020.

Signature	Title
Michael F. Roman	Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer and Director)
Theresa E. Reinseth	Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer)
Thomas K. Brown	Director
Pamela J. Craig	Director
David B. Dillon	Director
Michael L. Eskew	Director
Herbert L. Henkel	Director
Amy E. Hood Muhtar Kent	Director Director
Edward M. Liddy	Director
Dambisa F. Moyo	Director
Gregory R. Page	Director
Patricia A. Woertz	Director

Nicholas C. Gangestad, by signing his name hereto, does hereby sign this document pursuant to powers of attorney duly executed by the other persons named, filed with the Securities and Exchange Commission on behalf of such other persons, all in the capacities and on the date stated, such persons constituting a majority of the directors of the Company.

By	/s/ Nicholas C. Gangestad
Nicholas C. Gangestad, Attorney-in-Fact

141

EX-4.3

EXHIBIT 4.3

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

DESCRIPTION OF COMMON STOCK

The following description of our Common Stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Certificate of Incorporation (the “Certificate of Incorporation”) and our Amended and Restated Bylaws (the “Bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of Delaware General Corporation Law for additional information.

General

We are authorized to issue up to 3,000,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock without par value.

Voting Rights

Each holder of our common stock is entitled to one vote per share on all matters to be voted upon by the stockholders.

Dividends

Subject to preferences that may be applicable to any outstanding preferred stock, the holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available for that purpose.

Rights Upon Liquidation

In the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.

Preemptive or Conversion Rights

The holders of our common stock have no preemptive or conversion rights or other subscription rights.  There are no redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

The board of directors has the authority, without action by the stockholders, to designate and issue preferred stock in one or more series and to designate the rights, preferences and privileges of each series, which may be greater than the rights of the common stock.  It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of holders of the common stock until the board of directors determines the specific rights of the holders of such preferred stock.  However, the effects might include, among other things:

restricting dividends on the common stock,

diluting the voting power of the common stock,

impairing the liquidation rights of the common stock, or

delaying or preventing a change in control of us without further action by the stockholders.

No shares of preferred stock are outstanding, and we have no present plans to issue any shares of preferred stock.

Anti-Takeover Effects of Our Certificate of Incorporation and Bylaws and Delaware Law

Some provisions of Delaware law and our Certificate of Incorporation and Bylaws, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids.  These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board.  We believe that these provisions give our board the flexibility to exercise its fiduciary duties in a manner consistent with the interests of our shareholders.

STOCKHOLDER MEETINGS.  Under our bylaws, the board of directors or the chairman of the board, the chief executive officer or the secretary (with the concurrence of a majority of the board) may call special meetings of stockholders; in addition, record holders of 25% or more of the total 3M shares entitled to vote on the matter or matters to be brought before a special meeting may also cause the meeting to be held, but, if the Company’s board of directors determines in good faith that the business specified in the stockholders’ request will be included in an upcoming annual meeting of stockholders within 90 days after the request, the special meeting will not be held.

REQUIREMENTS FOR ADVANCE NOTIFICATION OF STOCKHOLDER NOMINATIONS AND PROPOSALS.  Our bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.

DELAWARE LAW.  We are subject to Section 203 of the Delaware General Corporation Law.  In general, Section 203 prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date the person became an interested stockholder, unless the “business combination” or the transaction in which the person became an interested stockholder is approved in a prescribed manner.  Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder.  Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns or within three years prior to the determination of interested stockholder status, did own, 15% or more of a corporation’s voting stock.  The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by the board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

ELIMINATION OF STOCKHOLDER ACTION BY WRITTEN CONSENT.  Our Certificate of Incorporation eliminates the right of stockholders to act by written consent without a meeting.

ELIMINATION OF CUMULATIVE VOTING.  Our Certificate of Incorporation and Bylaws do not provide for cumulative voting in the election of directors.

UNDESIGNATED PREFERRED STOCK.  The authorization of undesignated preferred stock makes it possible for the board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us.  These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of us.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is EQ Shareowner Services.

Exchange Listing

Our common stock is traded on the New York Stock Exchange, our primary exchange, under the symbol “MMM.” Our common stock is also listed on the Chicago Stock Exchange under the same symbol.

DESCRIPTION OF THE NOTES

The following description of our 1.500% Notes due 2026 (the “2026 Notes”), our Floating Rate Notes due 2020 (the “2020 Notes”), our 0.950% Notes due 2023 (the “2023 Notes”), our 1.750% Notes due 2030 (the “2030 Notes”), our 0.375% Notes due 2022 (the “2022 Notes”), and our 1.500% Notes due 2031 (the “2031 Notes”) is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the indenture, dated as of November 17, 2000, as amended on July 29, 2011, between us

and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “Indenture”).  Each of the notes is part of our medium-term notes, Series F, registered with the Securities and Exchange Commission.

We encourage you to read the above referenced indenture, as supplemented, for additional information.

General

The notes are our unsecured and unsubordinated obligations and rank equally with all of our other existing and future unsecured and unsubordinated indebtedness. The Indenture does not limit the amount of notes, debentures or other evidence of indebtedness that we may issue under the Indenture or otherwise and provides that debt securities under the Indenture may be issued from time to time in one or more series. Our company, without the consent of Holders of any debt securities, may issue additional debt securities with terms different from those of debt securities previously issued, and it may reopen a previous series of debt securities and issue additional debt securities of that series.

Principal and Maturity

We initially issued €750 million aggregate principal amount of the 2026 notes, which remains the aggregate principal amount outstanding.  The 2026 notes mature on November 9, 2026.

We initially issued €650 million aggregate principal amount of the 2020 notes, which remains the aggregate principal amount outstanding.  The 2020 notes mature on May 15, 2020.

We initially issued €600 million aggregate principal amount of the 2023 notes, which remains the aggregate principal amount outstanding.  The 2023 notes mature on May 15, 2023.

We initially issued €500 million aggregate principal amount of the 2030 notes, which remains the aggregate principal amount outstanding.  The 2030 notes mature on May 15, 2030.

We initially issued €500 million aggregate principal amount of the 2022 notes, which remains the aggregate principal amount outstanding.  The 2022 notes mature on February 22, 2022.

We initially issued €500 million aggregate principal amount of the 2031 notes, which remains the aggregate principal amount outstanding.  The 2031 notes mature on February 15, 2031.

The notes were issued in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.

CERTAIN PROVISIONS RELATING TO THE 2026 NOTES

Interest

The 2026 notes mature on November 9, 2026 and accrue interest at a rate per year equal to 1.500%.  Interest on the 2026 notes accrued from the last interest payment date on which interest was paid or duly provided for, or, if no interest has been paid or duly provided for, from their date of ongoing issuance.  Interest on the 2026 notes is payable annually in arrears on November 9 of each year.

Interest on the 2026 notes is computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the 2026 notes (on the date of original issuance (November 12, 2014), if no interest has been paid on the 2026 notes), to but excluding the next scheduled interest payment date. 

If any interest payment date, the maturity date for the notes or earlier date of redemption falls on a day that is not a Business Day, the required payment will be made on the next Business Day as if it were made on the date the payment was due and no interest will accrue on the amount so payable for the period from and after that interest payment date, that maturity date or that date of redemption, as the case may be.  For purposes of the 2026 notes, “Business Day” means any day other than a Saturday or Sunday, (1) which is not a day on which banking institution in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the TARGET2 system, or any successor thereto, is open.

Optional Redemption

The 2026 notes are redeemable, in whole but not in part at our option, at any time at a redemption price equal to the greater of (i) 100% of the principal amount of such 2026 notes or (ii) as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the redemption date on an annual basis (based on the actual number of days elapsed divided by 365 (or, if any of those days elapsed fall in a leap year, the sum of (x) the number of those days falling in a leap year divided by 366 and (y) the number of those days falling in a non-leap year divided by 365)) at the Reference Dealer Rate (as defined below), plus in each case, accrued interest thereon to the date of redemption.

        For the purposes of this "Optional Redemption" section,

        "Business Day" means, in relation to any place, a day on which commercial banks and foreign exchange markets settle payments in that place.

        "Quotation Agent" means the Reference Dealer (as defined below).

        "Reference Dealer" means any of Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch, J.P. Morgan Securities plc or their respective successors.

        "Reference Dealer Rate" means with respect to the Reference Dealer and any redemption date, the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded upwards), at which the gross redemption yield (as calculated by the Reference Dealer) on the 2026 notes, if they were to be purchased at such price on the third Business Day prior to the date fixed for redemption, would be equal to the gross redemption yield on such Business Day of the Reference Bond on the basis of the middle market price of the Reference Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by the Reference Dealer.

        "Reference Bond" means, in relation to the Reference Dealer Rate, at the discretion of the Reference Dealer, an European government bond whose maturity is closest to the maturity of the 2026 notes, or such other European government bond as the Reference Dealer, may, with the advice of three brokers of, or market makers in, European government bonds selected by the Reference Dealer, determine to be appropriate for determining the Reference Dealer Rate.

        Notice of any redemption will be given to the holders of the 2026 notes at least 30 days but not more than 60 days before the redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the 2026 notes called for redemption.

        The 2026 notes are also subject to redemption prior to maturity if certain events occur involving United States taxation. If any of these special tax events do occur, the notes may be redeemed at a redemption price of 100% of their principal amount plus accrued and unpaid interest to, but not including, the date fixed for redemption. See "—Redemption for Tax Reasons."

Payment of Additional Interest

        We will, subject to the exceptions and limitations set forth below, pay as additional interest to a noteholder that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on the 2026 notes after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge of whatever nature imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided for in the 2026 notes to be then due and payable. However, we will not be required to make any payment of additional interest for or on account of:

(a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such holder (or between a fiduciary, settlor or beneficiary of, or a person holding a power over, such holder, if such holder is an estate or a trust, or a member or shareholder of such holder, if such holder is a partnership or corporation) and the United States, including, without limitation, such holder (or such

fiduciary, settlor, beneficiary, person holding a power, member or shareholder) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein, or (ii) the presentation by the holder of a note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurs later;

(b) any estate, inheritance, gift, sales, transfer, personal property or any similar tax, assessment or other governmental charge;

(c) any tax, assessment or other governmental charge that would not have been imposed but for such holder's past or present status as a controlled foreign corporation, passive foreign investment company (including a qualified election fund) or foreign private foundation or other tax exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States Federal income tax;

(d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on a note;

(e) any tax, assessment or other governmental charge required to be deducted or withheld by any paying agent from any payment on a note, if such payment can be made without such deduction or withholding by any other paying agent;

(f) any tax, assessment or other governmental charge that would not have been imposed but for the holder's failure to comply with any applicable certification, information, documentation or other reporting requirement concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner of a note if, without regard to any tax treaty, such compliance is required by statute or regulation of the United States as a precondition to relief or exemption from such tax, assessment or other governmental charge;

(g) any tax, assessment or other governmental charge imposed by reason of the holder (i) owning or having owned, directly or indirectly, actually or constructively, 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (ii) receiving interest described in Section 881(c)(3)(A) of the United States Internal Revenue Code or (iii) being a controlled foreign corporation with respect to the United States that is related to the Company by actual or constructive stock ownership;

(h) any tax, assessment or other governmental charge that is imposed on a payment pursuant to Sections 1471 through 1474 of the United States Internal Revenue Code (FATCA), any Treasury regulations and official interpretations thereof, and any regulations or official law, agreement or interpretations thereof implementing an intergovernmental approach thereto; or

(i) any combination of items (a), (b), (c), (d), (e), (f) (g) and (h);

nor shall such additional interest be paid with respect to any payment on a note to a holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the holder of the 2026 notes.  

        For purposes of the foregoing, the holding of or the receipt of any payment with respect to a note shall not constitute a connection between the holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or a person having power over, such holder if such holder is an estate, a trust, a partnership or a corporation) and the United States.

        The term "United States Alien" means any person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the

members of which is, for United States Federal income tax purposes, a foreign corporation, a nonresident alien individual or a non-resident alien fiduciary of a foreign estate or trust.

Redemption for Tax Reasons

        If, in the written opinion of independent counsel chosen by the Company, there is a substantial probability that the Company has or will become obligated to pay additional interest on the 2026 notes as described above under the heading "—Payment of Additional Interest", as a result of any of the following events occurring on or after November 12, 2014 (a) any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or any change in official position regarding the application or interpretation of such laws, regulations or rulings, (b) any action taken by a taxing authority of the United States or any political subdivision thereof or therein affecting taxation, which action is generally applied or is taken with respect to the Company, (c) a decision rendered by a court of competent jurisdiction in the United States or any political subdivision thereof or therein, whether or not such decision was rendered with respect to the Company, (d) a private letter ruling or technical advice memorandum issued by the National Office of the United States Internal Revenue Service on substantially the same facts as those affecting the Company or (e) any change, amendment, application, interpretation or execution of the laws of the United States (or any regulations or rulings promulgated thereunder) shall have been officially proposed, which change, amendment, action, application, interpretation or execution would have effect after November 12, 2014 and the Company determines that such obligation cannot be avoided by the use of reasonable measures then available to the Company, then the Company may, at its option, upon not less than 30 nor more than 60 days' prior notice to the holders for the time being of the notes, redeem the notes in whole, but not in part, at a redemption price equal to 100%. of the principal amount thereof plus accrued interest, if any, to the date fixed for redemption, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest if a payment in respect to the notes were due on such date and, at the time such notification of redemption is given, such obligation to pay such additional interest remains in effect. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee (i) a certificate stating that the Company is entitled to effect such redemption and that the conditions precedent to the right of the Company to so redeem have occurred and (ii) an opinion of independent counsel chosen by the Company to the effect that there is a substantial probability that the Company has or will become obligated to pay additional interest on the notes.

CERTAIN PROVISIONS RELATING TO THE 2020 NOTES, THE 2023 NOTES AND THE 2030 NOTES

The 2020 Notes

        The 2020 notes bear interest at a rate equivalent to the 3-month EURIBOR (as defined below) (the "Base Rate") plus 0.23% per year; provided, however, that the minimum interest rate shall be zero. The 2020 notes bear interest from their date of original issuance (May 20, 2015) or from the immediately preceding interest payment date to which interest has been paid. Interest on the 2020 notes is payable quarterly in arrears on February 15, May 15, August 15 and November 15, (the "Floating Rate Interest Payment Date"). The interest rate on the 2020 notes will be reset quarterly on February 15, May 15, August 15 and November 15. The interest rate on the 2020 notes will be determined on the second TARGET business day preceding the interest reset date (a "EURIBOR Interest Determination Date"). Interest on a Floating Rate Interest Payment Date will be paid to the persons, or "holders," in whose names the 2020 notes are registered on the security register at the close of business on the regular record date. The regular record date will be the fifteenth calendar day, whether or not a Business Day, immediately preceding the related Floating Rate Interest Payment Date. Interest on the 2020 notes will be computed on the basis of a 360-day year and the actual number of days in the period for which interest is being calculated.

        The 2020 notes bear interest at a base rate equal to the interest rate for deposits in euros designated as "EURIBOR" and sponsored jointly by the European Banking Federation and ACI—the Financial Market Association (or any company established by the joint sponsors for purposes of compiling and publishing that rate) on a EURIBOR Interest Determination Date, and will be determined in accordance with the following provisions:

· EURIBOR will be the offered rate for deposits in euros having a maturity of three months beginning on such interest reset date, as that rate appears on Reuters Page EURIBOR01 as of 11:00 A.M., Brussels time, on the relevant EURIBOR Interest Determination Date.

· If the rate described above does not appear on Reuters Page EURIBOR01, EURIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., Brussels time, on the relevant EURIBOR Interest Determination Date, at which deposits of the following kind are offered to prime banks in the Euro-zone interbank market by the principal Euro-zone office of each of four major banks in that market selected by us: euro deposits having a maturity of three months and in a principal amount of not less than €1,000,000 that is representative for a single transaction in such market at such time. The Paying and Calculation Agent will request the principal Euro-zone office of each of these banks to provide a quotation in writing of its rate. If at least two quotations are provided in writing, EURIBOR for such EURIBOR Interest Determination Date will be the arithmetic mean (rounded upwards) of such quotations.

· If fewer than two quotations are provided as described above, EURIBOR for the relevant EURIBOR Interest Determination Date will be the arithmetic mean of the rates for loans of the following kind to leading Euro-Zone banks quoted in writing, at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date, by three major banks in the Euro-Zone selected by us: loans of euros having a maturity of three months and in a principal amount of not less than €1,000,000 that is representative for a single transaction in such market at such time.

· If fewer than three banks selected by us are quoting as described above, EURIBOR shall be the EURIBOR in effect on such EURIBOR Interest Determination Date.

        If any Floating Rate Interest Payment Date, maturity date or earlier date of redemption falls on a day that is not a Business Day, the required payment will be made on the next Business Day as if it were made on the date the payment was due and no interest will accrue on the amount so payable for the period from and after that Floating Rate Interest Payment Date, that maturity date or that date of redemption, as the case may be. For purposes of the notes, "Business Day" means any day other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the Trans-European Automated Real Time Gross Settlement Express Transfer system (the TARGET2 system), or any successor thereto, is open.

The 2023 Notes

        The 2023 notes bear interest at 0.950% per year from May 20, 2015 or from the immediately preceding interest payment date to which interest has been paid. Interest on the 2023 notes is payable annually in arrears on May 15, commencing May 15, 2016 (the "2023 Interest Payment Date"). Interest on a 2023 Interest Payment Date will be paid to the persons, or "holders," in whose names the 2023 notes are registered on the security register at the close of business on the regular record date. The regular record date for the 2023 notes will be the fifteenth calendar day, whether or not a Business Day, immediately preceding the related 2023 Interest Payment Date. Interest on the 2023 notes will be computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the 2023 notes (or May 20, 2015, if no interest has been paid on the 2023 notes), to but excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

        If any 2023 Interest Payment Date, the Maturity Date for the 2023 notes or earlier date of redemption falls on a day that is not a Business Day, the required payment will be made on the next Business Day as if it were made on the date the payment was due and no interest will accrue on the amount so payable for the period from and after that 2023 Interest Payment Date, that Maturity Date or that date of redemption, as the case may be. For purposes of the 2023 notes, "Business Day" means any day other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the TARGET2 system, or any successor thereto, is open.

The 2030 Notes

        The 2030 notes bear interest at 1.750% per year from May 20, 2015 or from the immediately preceding interest payment date to which interest has been paid. Interest on the 2030 notes is payable annually in arrears on May 15, commencing May 15, 2016 (the "2030 Interest Payment Date"). Interest on a 2030 Interest Payment Date will be paid to the persons, or "holders," in whose names the 2030 notes are registered on the security register at the close of business on the regular record date. The regular record date for the 2030 notes will be the fifteenth calendar day, whether or not a Business Day, immediately preceding the related 2030 Interest Payment Date. Interest on the 2030 notes will be computed on the basis of the ACTUAL/ACTUAL (ICMA) payment convention described above under "Description of Notes—2023 Notes."

        If any 2030 Interest Payment Date, the Maturity Date for the 2030 notes or earlier date of redemption falls on a day that is not a Business Day, the required payment will be made on the next Business Day as if it were made on the date the payment was due and no interest will accrue on the amount so payable for the period from and after that 2030 Interest Payment Date, that Maturity Date or that date of redemption, as the case may be. For purposes of the 2030 notes, "Business Day" means any day other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the TARGET2 system, or any successor thereto, is open.

Optional Redemption

        The 2023 notes and the 2030 notes are redeemable, in whole but not in part at our option, at any time at a redemption price equal to the greater of (i) 100% of the principal amount of the notes of the applicable tranche or (ii) as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the redemption date on an annual basis (based on the actual number of days elapsed divided by 365 (or, if any of those days elapsed fall in a leap year, the sum of (x) the number of those days falling in a leap year divided by 366 and (y) the number of those days falling in a non-leap year divided by 365)) at the Reference Dealer Rate (as defined below), plus, in the case of the 2023 notes, 10 basis points, and in the case of the 2030 notes, 15 basis points, plus in each case, accrued interest thereon to the date of redemption.

        For the purposes of this "Optional Redemption" section,

        "Business Day" means, in relation to any place, a day on which commercial banks and foreign exchange markets settle payments in that place.

        "Quotation Agent" means the Reference Dealer (as defined below).

        "Reference Dealer" means any of Barclays Bank PLC, Citigroup Global Markets Limited, Deutsche Bank AG, London Branch or their respective successors.

        "Reference Dealer Rate" means with respect to the Reference Dealer and any redemption date, the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded upwards), at which the gross redemption yield (as calculated by the Reference Dealer) on the notes to be redeemed, if they were to be purchased at such price on the third Business Day prior to the date fixed for redemption, would be equal to the gross redemption yield on such Business Day of the Reference Bond on the basis of the middle market price of the Reference Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by the Reference Dealer.

        "Reference Bond" means, in relation to the Reference Dealer Rate, at the discretion of the Reference Dealer, an European government bond whose maturity is closest to the maturity of the notes to be redeemed, or such other European government bond as the Reference Dealer, may, with the advice of three brokers of, or market makers in, European government bonds selected by the Reference Dealer, determine to be appropriate for determining the Reference Dealer Rate.

        Notice of any redemption will be given to the Noteholders at least 30 days but not more than 60 days before the redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the 2023 notes and the 2030 notes called for redemption.

        The notes are also subject to redemption prior to maturity if certain events occur involving United States taxation. If any of these special tax events do occur, the notes may be redeemed at a redemption price of 100% of their principal amount plus accrued and unpaid interest to, but not including, the date fixed for redemption. See "—Redemption for Tax Reasons."

Payment of Additional Interest

        We will, subject to the exceptions and limitations set forth below, pay as additional interest to a noteholder of the 2020 notes, the 2023 notes or the 2030 notes that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on such note after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge of whatever nature imposed upon or as a result of such payment by the United States (or any political subdivision or taxing

authority thereof or therein), will not be less than the amount provided for in such note to be then due and payable. However, we will not be required to make any payment of additional interest for or on account of:

(a) any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such holder (or between a fiduciary, settlor or beneficiary of, or a person holding a power over, such holder, if such holder is an estate or a trust, or a member or shareholder of such holder, if such holder is a partnership or corporation) and the United States, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, person holding a power, member or shareholder) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein, or (ii) the presentation by the holder of a note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurs later;

(b) any estate, inheritance, gift, sales, transfer, personal property or any similar tax, assessment or other governmental charge;

(c) any tax, assessment or other governmental charge that would not have been imposed but for such holder's past or present status as a controlled foreign corporation, passive foreign investment company (including a qualified election fund) or foreign private foundation or other tax exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States Federal income tax;

(d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on a note;

(e) any tax, assessment or other governmental charge required to be deducted or withheld by any paying agent from any payment on a note, if such payment can be made without such deduction or withholding by any other paying agent;

(f) any tax, assessment or other governmental charge that would not have been imposed but for the holder's failure to comply with any applicable certification, information, documentation or other reporting requirement concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner of a note if, without regard to any tax treaty, such compliance is required by statute or regulation of the United States as a precondition to relief or exemption from such tax, assessment or other governmental charge;

(g) any tax, assessment or other governmental charge imposed by reason of the holder (i) owning or having owned, directly or indirectly, actually or constructively, 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (ii) receiving interest described in Section 881(c)(3)(A) of the United States Internal Revenue Code or (iii) being a controlled foreign corporation with respect to the United States that is related to the Company by actual or constructive stock ownership;

(h) any tax, assessment or other governmental charge that is imposed on a payment pursuant to Sections 1471 through 1474 of the United States Internal Revenue Code (FATCA), any Treasury regulations and official interpretations thereof, and any regulations or official law, agreement or interpretations thereof implementing an intergovernmental approach thereto; or

(i) any combination of items (a), (b), (c), (d), (e), (f) (g) and (h);

nor shall such additional interest be paid with respect to any payment on a note to a holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the holder of such note.

        For purposes of the foregoing, the holding of or the receipt of any payment with respect to a note shall not constitute a connection between the holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or a person having power over, such holder if such holder is an estate, a trust, a partnership or a corporation) and the United States.

        The term "United States Alien" means any person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States Federal income tax purposes, a foreign corporation, a nonresident alien individual or a non-resident alien fiduciary of a foreign estate or trust.

Redemption for Tax Reasons

        If, in the written opinion of independent counsel chosen by the Company, there is a substantial probability that the Company has or will become obligated to pay additional interest on 2020 notes, the 2023 notes or the 2030 notes the notes as described above under the heading "—Payment of Additional Interest," as a result of any of the following events occurring on or after May 13, 2015 (a) any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or any change in official position regarding the application or interpretation of such laws, regulations or rulings, (b) any action taken by a taxing authority of the United States or any political subdivision thereof or therein affecting taxation, which action is generally applied or is taken with respect to the Company, (c) a decision rendered by a court of competent jurisdiction in the United States or any political subdivision thereof or therein, whether or not such decision was rendered with respect to the Company, (d) a private letter ruling or technical advice memorandum issued by the National Office of the United States Internal Revenue Service on substantially the same facts as those affecting the Company or (e) any change, amendment, application, interpretation or execution of the laws of the United States (or any regulations or rulings promulgated thereunder) shall have been officially proposed, which change, amendment, action, application, interpretation or execution would have effect after May 13, 2015 and the Company determines that such obligation cannot be avoided by the use of reasonable measures then available to the Company, then the Company may, at its option, upon not less than 30 nor more than 60 days' prior notice to the holders for the time being of the notes, redeem the notes in whole, but not in part, at a redemption price equal to 100%. of the principal amount thereof plus accrued interest, if any, to the date fixed for redemption, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest if a payment in respect to the notes were due on such date and, at the time such notification of redemption is given, such obligation to pay such additional interest remains in effect. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee (i) a certificate stating that the Company is entitled to effect such redemption and that the conditions precedent to the right of the Company to so redeem have occurred and (ii) an opinion of independent counsel chosen by the Company to the effect that there is a substantial probability that the Company has or will become obligated to pay additional interest on the notes.

CERTAIN PROVISIONS RELATING TO THE 2022 NOTES AND THE 2031 NOTES

The 2022 Notes

        The 2022 notes bear interest at 0.375% per year from May 31, 2016 or from the immediately preceding interest payment date to which interest has been paid. Interest on the 2022 notes is payable annually in arrears on February 15, commencing February 15, 2017 (the "2022 Interest Payment Date"). Interest on a 2022 Interest Payment Date will be paid to the persons, or "holders," in whose names the 2022 notes are registered on the security register at the close of business on the regular record date. The regular record date for the 2022 notes will be the fifteenth calendar day, whether or not a Business Day, immediately preceding the related 2022 Interest Payment Date. Interest on the 2022 notes will be computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the 2022 notes (or May 31, 2016, if no interest has been paid on the 2022 notes), to but excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

        If any 2022 Interest Payment Date, the Maturity Date for the 2022 notes or earlier date of redemption falls on a day that is not a Business Day, the required payment will be made on the next Business Day as if it were made on the date the payment was due and no interest will accrue on the amount so payable for the period from and after that 2022 Interest Payment Date, that Maturity Date or that date of redemption, as the case may be. For purposes of the 2022 notes, "Business Day" means any day other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the TARGET2 system, or any successor thereto, is open.

The 2031 Notes

        The 2031 notes bear interest at 1.500% per year from May 31, 2016 or from the immediately preceding interest payment date to which interest has been paid. Interest on the 2031 notes is payable annually in arrears on June 2, commencing June 2, 2017 (the "2031

Interest Payment Date"). Interest on a 2031 Interest Payment Date will be paid to the persons, or "holders," in whose names the 2031 notes are registered on the security register at the close of business on the regular record date. The regular record date for the 2031 notes will be the fifteenth calendar day, whether or not a Business Day, immediately preceding the related 2031 Interest Payment Date. Interest on the 2031 notes will be computed on the basis of the ACTUAL/ACTUAL (ICMA) payment convention described above under "Description of Notes—2022 Notes."

        If any 2031 Interest Payment Date, the Maturity Date for the 2031 notes or earlier date of redemption falls on a day that is not a Business Day, the required payment will be made on the next Business Day as if it were made on the date the payment was due and no interest will accrue on the amount so payable for the period from and after that 2031 Interest Payment Date, that Maturity Date or that date of redemption, as the case may be. For purposes of the 2031 notes, "Business Day" means any day other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the TARGET2 system, or any successor thereto, is open.

Further Issuances

        We may, from time to time, without the consent of or notice to existing note holders, create and issue further notes having the same terms and conditions as the notes of either tranche in all respects, except for issue date, issue price and, to the extent applicable, the first payment of interest. Additional notes issued in this manner will be consolidated with and will form a single tranche of debt securities with the related previously outstanding notes of the related tranche; provided,  however, that the issuance of such additional notes will not be so consolidated for United States federal income tax purposes unless such issuance constitutes a "qualified reopening" within the meaning of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury regulations promulgated thereunder.

Optional Redemption

        The notes of each tranche are redeemable, in whole but not in part at our option, at any time prior to November 15, 2021, in the case of the 2022 notes (three months prior to the maturity date of such notes), and March 2, 2031 in the case of the 2031 notes (three months, prior to the maturity of such notes), at a redemption price equal to the greater of (i) 100% of the principal amount of the notes of the applicable tranche or (ii) as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the redemption date on an annual basis (based on the actual number of days elapsed divided by 365 (or, if any of those days elapsed fall in a leap year, the sum of (x) the number of those days falling in a leap year divided by 366 and (y) the number of those days falling in a non-leap year divided by 365)) at the Reference Dealer Rate (as defined below), plus, in the case of the 2022 notes, 12.5 basis points, and in the case of the 2031 notes, 20 basis points, plus in each case, accrued interest thereon to the date of redemption.

        In addition, at any time on or after November 15, 2021, in the case of the 2022 notes (three months prior to the maturity date of such notes), and March 2, 2031 in the case of the 2031 notes (three months prior to the maturity date of such notes), the notes will be redeemable, in whole but not in part at our option, at a redemption price equal to 100% of the principal amount of the notes of the applicable tranche plus accrued interest thereon to the date of redemption.

        For the purposes of this "Optional Redemption" section,

        "Business Day" means, in relation to any place, a day on which commercial banks and foreign exchange markets settle payments in that place.

        "Quotation Agent" means the Reference Dealer (as defined below) specified by us.

        "Reference Dealer" means any of Barclays Bank PLC, Credit Suisse Securities (Europe) Limited and Deutsche Bank AG, London Branch or their respective successors.

        "Reference Dealer Rate" means with respect to the Reference Dealer and any redemption date, the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded upwards), at which the gross redemption yield (as calculated by the Reference Dealer) on the notes to be redeemed, if they were to be purchased at such price on the third Business Day prior to the date fixed for redemption, would be equal to the gross redemption yield on such Business Day of the Reference Bond on the basis of

the middle market price of the Reference Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by the Reference Dealer.

        "Reference Bond" means, in relation to the Reference Dealer Rate, at the discretion of the Reference Dealer, an European government bond whose maturity is closest to the maturity of the notes to be redeemed, or such other European government bond as the Reference Dealer, may, with the advice of three brokers of, or market makers in, European government bonds selected by the Reference Dealer, determine to be appropriate for determining the Reference Dealer Rate.

        Notice of any redemption will be given to the noteholders at least 30 days but not more than 60 days before the redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the notes called for redemption.

        The notes are also subject to redemption prior to maturity if certain events occur involving United States taxation. If any of these special tax events do occur, the notes may be redeemed at a redemption price of 100% of their principal amount plus accrued and unpaid interest to, but not including, the date fixed for redemption. See "—Redemption for Tax Reasons."

Payment of Additional Interest

        We will, subject to the exceptions and limitations set forth below, pay as additional interest to a noteholder that is a United States Alien (as defined below) such amounts as may be necessary so that every net payment on such note after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge of whatever nature imposed upon or as a result of such payment by the United States (or any political subdivision or taxing authority thereof or therein), will not be less than the amount provided for in such note to be then due and payable. However, we will not be required to make any payment of additional interest for or on account of:

(a)  any tax, assessment or other governmental charge that would not have been imposed but for (i) the existence of any present or former connection between such holder (or between a fiduciary, settlor or beneficiary of, or a person holding a power over, such holder, if such holder is an estate or a trust, or a member or shareholder of such holder, if such holder is a partnership or corporation) and the United States, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, person holding a power, member or shareholder) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein, or (ii) the presentation by the holder of a note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurs later;

(b) any estate, inheritance, gift, sales, transfer, personal property or any similar tax, assessment or other governmental charge;

(c) any tax, assessment or other governmental charge that would not have been imposed but for such holder's past or present status as a controlled foreign corporation, passive foreign investment company (including a qualified election fund) or foreign private foundation or other tax exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid United States federal income tax;

(d) any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on a note

(e) any tax, assessment or other governmental charge required to be deducted or withheld by any paying agent from any payment on a note, if such payment can be made without such deduction or withholding by any other paying agent;

(f) any tax, assessment or other governmental charge that would not have been imposed but for the holder's failure to comply with any applicable certification, information, documentation or other reporting requirement concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner of a note if, without regard to any tax treaty, such compliance is required by statute or regulation of the United States as a precondition to relief or exemption from such tax, assessment or other governmental charge;

(g) any tax, assessment or other governmental charge imposed by reason of the holder (i) owning or having owned, directly or indirectly, actually or constructively, 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (ii) receiving interest described in Section 881(c)(3)(A) of the United States Internal Revenue Code or (iii) being a controlled foreign corporation with respect to the United States that is related to the Company by actual or constructive stock ownership;

(h) any tax, assessment or other governmental charge that is imposed on a payment pursuant to Sections 1471 through 1474 of the United States Internal Revenue Code (FATCA), any Treasury regulations and official interpretations thereof, and any regulations or official law, agreement or interpretations thereof implementing an intergovernmental approach thereto; or

(i) any combination of items (a), (b), (c), (d), (e), (f) (g) and (h);

nor shall such additional interest be paid with respect to any payment on a note to a holder that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the additional interest had such beneficiary, settlor, member or beneficial owner been the holder of such note.

        For purposes of the foregoing, the holding of or the receipt of any payment with respect to a note shall not constitute a connection between the holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or a person having power over, such holder if such holder is an estate, a trust, a partnership or a corporation) and the United States.

        The term "United States Alien" means any person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a non-resident alien fiduciary of a foreign estate or trust.

Redemption for Tax Reasons

        If, in the written opinion of independent counsel chosen by the Company, there is a substantial probability that the Company has or will become obligated to pay additional interest on the notes as described above under the heading "—Payment of Additional Interest," as a result of any of the following events occurring on or after May 23, 2016 (a) any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or any change in official position regarding the application or interpretation of such laws, regulations or rulings, (b) any action taken by a taxing authority of the United States or any political subdivision thereof or therein affecting taxation, which action is generally applied or is taken with respect to the Company, (c) a decision rendered by a court of competent jurisdiction in the United States or any political subdivision thereof or therein, whether or not such decision was rendered with respect to the Company, (d) a private letter ruling or technical advice memorandum issued by the National Office of the United States Internal Revenue Service on substantially the same facts as those affecting the Company or (e) any change, amendment, application, interpretation or execution of the laws of the United States (or any regulations or rulings promulgated thereunder) shall have been officially proposed, which change, amendment, action, application, interpretation or execution would have effect after May 23, 2016 and the Company determines that such obligation cannot be avoided by the use of reasonable measures then available to the Company, then the Company may, at its option, upon not less than 30 nor more than 60 days' prior notice to the holders for the time being of the notes, redeem the notes in whole, but not in part, at a redemption price equal to 100% of the principal amount thereof plus accrued interest, if any, to the date fixed for redemption, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such additional interest if a payment in respect to the notes were due on such date and, at the time such notification of redemption is given, such obligation to pay such additional interest remains in effect. Prior to the publication of any notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee (i) a certificate stating that the Company is entitled to effect such redemption and that the conditions precedent to the right of the Company to so redeem have occurred and (ii) an opinion of independent counsel chosen by the Company to the effect that there is a substantial probability that the Company has or will become obligated to pay additional interest on the notes.

GENERAL PROVISIONS OF OUR INDENTURE APPLICABLE TO ALL NOTES

Events of Default

An event of default with respect to any of the notes will occur under the indenture if:

we fail to pay interest on any debt security of that series for 30 days after the payment is due,

we fail to pay the principal of or any premium on any debt security of that series when due,

we fail to deposit any sinking fund payment when due on debt securities of that series,

we fail to perform any other covenant in the indenture that applies to debt securities of that series for 90 days after we have received written notice of the failure to perform in the manner specified in the indenture,

we default under any Indebtedness for borrowed money, including other series of debt securities, or under any mortgage, lien or other similar encumbrance, indenture or instrument, including the indenture, which secures any Indebtedness for borrowed money, and which results in acceleration of the maturity of an outstanding principal amount of Indebtedness greater than $200 million, unless this acceleration is rescinded (or the Indebtedness is discharged) within 10 days after we have received written notice of the default in the manner specified in the indenture,

commencement of voluntary or involuntary bankruptcy, insolvency or reorganization, or

any other event of default that may be specified for the debt securities of that series when that series is created occurs.  (Section 501)

If an event of default for any series of debt securities occurs and continues, the trustee or the Holders of at least 25% in aggregate principal amount of the outstanding debt securities of the series may declare the entire principal of all the debt securities of that series to be due and payable immediately.  If such a declaration occurs, the Holders of a majority of the aggregate principal amount of the outstanding debt securities of that series can, subject to the specific payment conditions set forth in the indenture, rescind the declaration.  (Section 502)

The prospectus supplement relating to each series of debt securities which are original issue discount securities will describe the particular provisions that relate to the acceleration of maturity of a portion of the principal amount of that series when an event of default occurs and continues.

An event of default for a particular series of debt securities does not necessarily constitute an event of default for any other series of debt securities issued under the indenture.  The indenture requires us to file a certificate with the trustee each year that states the nature of the default if any default exists under the terms of the indenture.  (Section 1011) The trustee must transmit notice to the Holders of debt securities of any default, except that no such notice to Holders shall be given until at least 30 days after the occurrence of a default in the performance, or breach, of any covenant or warranty of the Company in the indenture, and continuance of such default or breach for a period of 90 days after there has been given to the Company by the trustee, or to the Company and the trustee by Holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series, written notice of such default or breach.  (Section 602)

Other than its duties in the case of a default, a trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any Holders, unless the Holders offer the trustee reasonable indemnification.  (Sections 601, 603) If reasonable indemnification is provided, then, subject to other rights of the trustee provided in the indenture, the Holders of a majority in principal amount of the outstanding debt securities of any series may, with respect to the debt securities of that series, direct the time, method and place of:

conducting any proceeding for any remedy available to the trustee, or

exercising any trust or power conferred upon the trustee.  (Sections 512, 603)

The Holder of a debt security of any series will have the right to begin any proceeding with respect to the indenture or for any remedy only if:

the Holder has previously given the trustee written notice of a continuing event of default with respect to that series,

the Holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made a written request of, and offered reasonable indemnification to, the trustee to begin the proceeding,

the trustee has not started the proceeding within 60 days after receiving the request, and

the trustee has not received directions inconsistent with the request from the Holders of a majority in aggregate principal amount of the outstanding debt securities of that series during those 60 days.  (Section 507)

However, the Holder of any debt security will have an absolute right to receive payment of principal of and any premium and interest on the debt security when due and to institute suit to enforce this payment.  (Section 508)

Defeasance

Defeasance and Discharge.  At the time that we establish a series of debt securities under the indenture, we can provide that the debt securities of that series are subject to the defeasance and discharge provisions of the indenture.  If we so provide, we will be discharged from our obligations on the debt securities of that series if we

deposit with the trustee, in trust, sufficient money or Government Obligations, as defined below, to pay the principal, interest, any premium and any other sums due on the debt securities of that series, such as sinking fund payments, on the dates these payments are due under the indenture and the terms of the debt securities.  (Section 403) As used above, “ Government Obligations ” mean:

securities of the same government which issued the currency in which the series of debt securities are denominated and/or in which interest is payable, or

securities of government agencies backed by the full faith and credit of the government.  (Section 101)

In the event that we deposit funds in trust and discharge our obligations under a series of debt securities as described above, then:

the indenture will no longer apply to the debt securities of that series, except for the obligations to compensate, reimburse and indemnify the trustee, to register the transfer and exchange of debt securities, to replace lost, stolen or mutilated debt securities and to maintain paying agencies and the trust funds; and

Holders of debt securities of that series can only look to the trust fund for payment of principal, any premium and interest on the debt securities of that series.  (Section 403)

Under federal income tax law, that deposit and discharge may be treated as an exchange of the related debt securities for an interest in the trust mentioned above.  Each holder might be required to recognize gain or loss equal to the difference between:

the holder’s cost or other tax basis for the debt securities, and

the value of the holder’s interest in the trust.

Holders might be required to include in income a share of the income, gain or loss of the trust, including gain or loss recognized in connection with any substitution of collateral, as described in this section under the heading “—Substitution of Collateral” below.

Defeasance of Covenants and Events of Default.  At the time that we establish a series of debt securities under the indenture, we can provide that the debt securities of that series are subject to the covenant defeasance provisions of the indenture.  If we so provide and we make the deposit described in this section under the heading “—Defeasance and Discharge” above:

we will not have to comply with the following restrictive covenants contained in the indenture:  Consolidation, Merger or Sale or Lease of Property as Entirety (Sections 801, 803, 804); Restrictions on Secured Debt (Section 1008); Maintenance of Properties (Section 1005); Payment of Taxes and Other Claims (Section 1007); Restrictions on Sale and Lease-Back Transactions (Section 1009); Classification of Restricted and Unrestricted Subsidiaries (Section 1010); and any other covenant we designate when we establish the series of debt securities; and

we will not have to treat the events described in the fourth bullet point under the heading “—Events of Default” as they relate to the covenants listed above that have been defeased and no longer are in effect and the events described in the fifth, sixth and seventh bullet points under the heading “—Events of Default” as events of default under the indenture in connection with that series.

In the event of a defeasance, our obligations under the indenture and the debt securities, other than with respect to the covenants and the events of default specifically referred to above, will remain in effect.  (Section 1501)

If we exercise our option not to comply with the covenants listed above and the debt securities of that series become immediately due and payable because an event of default has occurred, other than as a result of an event of default specifically referred to above, the amount of money and/or Government Obligations on deposit with the trustee will be sufficient to pay the principal, interest, any premium and any other sums due on the debt securities of that series, such as sinking fund payments, on the date the payments are due under the indenture and the terms of the debt securities, but may not be sufficient to pay amounts due at the time of acceleration.  However, we would remain liable for the balance of the payments.  (Section 1501)

Substitution of Collateral.  At the time that we establish a series of debt securities under the indenture, we can provide for our ability to, at any time, withdraw any money or Government Obligations deposited pursuant to the defeasance provisions described above if we simultaneously substitute other money and/or Government Obligations which would satisfy our payment obligations on the debt securities of that series pursuant to the defeasance provisions applicable to those debt securities.  (Section 402)

EX-10.18

EXHIBIT 10.18

3M ANNUAL INCENTIVE PLAN

1. Purposes.

The purposes of the 3M Annual Incentive Plan are to help 3M attract and retain outstanding employees; to stimulate and reward business growth and creativity that leads to accelerating growth and profit for 3M and its stockholders; to align a portion of eligible employees’ pay with business performance and achievement of plans; and to provide an incentive to employees and improve their line of sight from business performance to 3M financial results.

2. Definitions.

(a) “Committee” means the Compensation Committee of 3M’s Board of Directors.

(b) “Company” means 3M Company and those of its subsidiaries and affiliates that pay any portion of the compensation of its employees in the form of annual incentive compensation determined in accordance with this Plan.

(c) “Participant” means an employee of the Company whose participation in the Plan has been approved by the Company pursuant to Section 4.

(d) “Plan” means this 3M Annual Incentive Plan.

(e) “Plan Administrator” means:

(i) with respect to Section 16 Officers, the Committee; and

(ii) with respect to all other employees of the Company, 3M’s Vice President, Total Rewards and Services, or his or her successor.

(f) “Plan Year” means the 12-month period ending on December 31.

(g) “Retires” or “Retirement” means the termination of a Participant's employment with the Company after attaining age 55 with at least 10 years of employment service.

(h) “Section 16 Officer” means an employee of the Company who is subject to Section 16 of the Securities Exchange Act of 1934, as amended.

3. Term and Termination of the Plan.

This Plan initially became effective as of January 1, 2007, and was most recently amended effective as of February 3, 2020.  The Plan shall remain in effect until it is terminated by the Committee. 

4. Participation.

The Plan Administrator will determine:

(a) which employees will be eligible to participate in and earn annual incentive compensation under this Plan, and the target amount of their annual incentive compensation for each Plan Year;    

(b) the business unit(s) to which each Participant is assigned for all or a portion of each Plan Year for the purpose of applying the Plan’s payout formula (as described in Exhibit A hereto) to the performance of the Company and/or such business unit to determine the amount of annual incentive compensation earned by such Participant for each Plan Year; and

(c) the performance metrics to be used in measuring the performance of the Company and each of its business units for purposes of computing the annual incentive compensation earned under this Plan, and the percentage weighting applied to each of such performance metrics (subject to the requirement that the sum of such percentage weightings shall always equal 100% for the Company and each of its business units).

5. Amounts of Annual Incentive.

The amount of annual incentive compensation earned by a Participant during a Plan Year will be determined by multiplying such Participant’s target annual incentive compensation amount for such Plan Year (allocated among each of the applicable performance metrics) by the payout percentage corresponding to the performance of the relevant business unit or the Company for such Plan Year, as determined under the Plan’s payout formula described in Exhibit A hereto.    For those Participants selected by the Plan Administrator, this amount may be adjusted up or down to reflect the individual performance or circumstances of such Participant during such Plan Year (as determined by the Plan Administrator in its discretion).  The performance of the Company and its business units for each Plan Year shall be determined by the Company in good faith, subject to such adjustments as the Committee may approve in its discretion to recognize circumstances which it believes to warrant special consideration.  Subject to any such adjustments approved by the Committee, the Company’s determination of its performance and the performance of its business units for purposes of this Plan will be final, conclusive and binding on all persons interested in the Plan.

6. Payments of Annual Incentive.

All annual incentive compensation under this Plan shall be paid in the form of cash or in the form of shares of 3M stock, restricted stock or restricted stock units delivered pursuant to the 3M Company 2016 Long-Term Incentive Plan and/or its successor (subject to such restrictions as shall be determined by the Committee in its discretion).  All annual incentive payments for a Plan Year shall be completed no later than March 15 of the year following the end of such Plan Year.

7. Plan Administration.

This Plan will be administered by the Plan Administrator; provided, however, that actions of the Plan Administrator with respect to individuals who are not Section 16 Officers shall be subject to the supervision and direction of the Committee.  The Plan Administrator will have full power and authority to interpret the Plan, to establish, amend and rescind any rules, forms or procedures as she deems

2

necessary for the proper administration of the Plan, and to take any other action as she deems necessary or advisable in connection with the Plan.  With respect to Participants who live in or are subject to taxation in one or more countries other than the United States, the Plan Administrator may modify the provisions or operation of the Plan to enable it to comply with the provisions of applicable laws or regulations or to accommodate the applicable tax rules and laws.  Any decision made, action taken or interpretation made by the Plan Administrator that is not inconsistent with the provisions of this Plan will be final, conclusive and binding on all persons interested in the Plan.

8. Amendments.

The Committee may at any time amend, modify or terminate this Plan, in whole or in part. 

9. Rights of Participants.

Nothing in this Plan or the fact that a person has received or become eligible to receive annual incentive compensation hereunder shall be deemed to give such person any right to be retained in the employ of the Company or to interfere with the right of the Company to discipline or terminate the employment of such person at any time for any reason whatsoever.  No person shall have any claim or right to receive annual incentive compensation under this Plan, except as provided in accordance with the provisions of this Plan and as approved by the Plan Administrator.    Unless otherwise specifically determined by the Company, the annual incentive compensation earned under this Plan will not be deemed a part of any Participant’s compensation for purposes of determining such Participant’s payments or benefits under any Company benefit plan, severance program or severance pay law of any country.  This Plan will be unfunded.  The Company will not have any obligation to set aside funds or segregate assets to ensure the payment of any annual incentive compensation earned hereunder.  This Plan will not establish any fiduciary relationship between the Company and any Participant or other person.

10. Changes in Employment Status.

If a Participant’s employment with the Company terminates for any reason other than death or Retirement, participation in this Plan will end and any annual incentive compensation that would otherwise have been payable to such Participant for the Plan Year in which such termination occurs shall be cancelled (unless the Plan Administrator determines, in his, her or its discretion, that the Plan should pay all or a portion of such annual incentive compensation despite such termination).  A Participant who participates in the Plan for only part of a Plan Year (whether due to being newly hired, transferred to a new position, a  job reclassification,  a leave of absence, a termination of employment or any other reason) may receive prorated annual incentive compensation for such Plan Year, as determined by the Plan Administrator in his, her or its discretion.  A Participant who participates in the Plan for a full Plan Year but who experiences one or more changes in positions or business units during such Plan Year will be entitled to receive adjusted annual incentive compensation for such Plan Year, based on such prorations as shall be determined by the Plan Administrator in his, her or its discretion. The estate of a Participant who dies during a Plan Year or after the end of a Plan Year but prior to receiving payment for such Plan Year shall be entitled to receive either prorated annual incentive compensation or the full unreduced annual incentive compensation for such Plan Year, as determined by the Plan Administrator in his, her or its discretion.  A Participant who Retires from employment with the Company during a Plan Year or after the end of a Plan Year but prior to receiving payment for such Plan Year shall be entitled to receive either prorated annual incentive

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compensation or the full unreduced annual incentive compensation for such Plan Year, as determined by the Plan Administrator in his, her or its discretion.

11. Clawback Provisions.

The gross amount of all payments actually or constructively received by a Participant under the Plan will be subject to recoupment by the Company to the extent required to comply with applicable laws, the rules of any securities exchange or automated quotation system on which the shares of the Company’s common stock are then listed, quoted or traded, or any policy of the Company providing for the reimbursement of incentive compensation.

12. Withholding.

All payments of annual incentive compensation made pursuant to this Plan will be subject to withholding for all applicable taxes and contributions required by law to be withheld therefrom.

13. No Assignment.

No right or interest of a Participant under this Plan shall be assignable or transferable, or subject to the claims of any creditor or to any liens.

14. Successors.

All obligations of 3M under this Plan with respect to the payment of annual incentive compensation will be binding upon any successor to 3M, regardless of the reason or circumstances for such succession (whether by reason of merger, consolidation or the purchase of substantially all of the business and assets of 3M).

15. Validity.

In the event any provision of this Plan should be determined to be illegal or invalid for any reason, it shall not affect the remaining provisions of the Plan which shall remain in effect as if the illegal or invalid provision had never been included herein.

16. Governing Law.

The provisions of this Plan shall be governed by, and interpreted and construed in accordance with, the laws of the State of Delaware,  disregarding the choice-of-law principles thereof.

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3M ANNUAL INCENTIVE PLAN

EXHIBIT A

Payout formula for Business Unit Local Currency Sales vs. Plan performance metric:

Performance vs. Plan	payout %
Below Threshold	0.00%
Threshold 85%	25.00%
90%	50.00%
91%	55.00%
92%	60.00%
93%	65.00%
94%	70.00%
95%	75.00%
96%	80.00%
97%	85.00%
98%	90.00%
99%	95.00%
Target 100%	100.00%
101%	108.50%
102%	117.00%
103%	125.50%
104%	134.00%
105%	142.50%
106%	151.00%
107%	159.50%
108%	168.00%
109%	176.50%
110%	185.00%
Maximum 112%	200.00%

Payout formula for Business Unit Net Income Less Working Capital Charge vs. Plan performance metric:

Performance vs. Plan	payout %
Below Threshold	0.00%
Threshold 85%	62.50%
86%	65.00%
87%	67.50%
88%	70.00%
89%	72.50%
90%	75.00%
91%	77.50%
92%	80.00%
93%	82.50%
94%	85.00%
95%	87.50%
96%	90.00%
97%	92.50%
98%	95.00%
99%	97.50%
Target 100%	100.00%
101%	110.00%
102%	120.00%
103%	130.00%
104%	140.00%
105%	150.00%
106%	160.00%
107%	170.00%
108%	180.00%
109%	190.00%
Maximum 110%	200.00%

A-2

Payout formula for Corporate Economic Profit vs. Prior Year performance metric:

Performance vs. pRIOR YEAR	payout %
Threshold 50%	0.00%
55%	10.00%
60%	20.00%
65%	30.00%
70%	40.00%
75%	50.00%
80%	60.00%
85%	70.00%
90%	80.00%
91%	82.00%
92%	84.00%
93%	86.00%
94%	88.00%
95%	90.00%
96%	92.00%
97%	94.00%
98%	96.00%
99%	98.00%
Target 100%	100.00%
101%	102.00%
102%	104.00%
103%	106.00%
104%	108.00%
105%	110.00%
106%	112.00%
107%	114.00%
108%	116.00%
109%	118.00%
110%	120.00%
115%	130.00%
120%	140.00%
125%	150.00%
Maximum 150%	200.00%

If performance exceeds the highest level shown above for one or more of the specified performance measures (i.e., Business Unit Local Currency Sales vs. Plan, Business Unit Net Income Less Working Capital Charge vs. Plan and Corporate Economic Profit vs. Prior Year), the “Payout %” achieved with respect

A-3

to that performance measure will be the maximum “Payout %” specified for that performance measure.  For example, if Business Unit Net Income Less Working Capital Charge vs. Plan equals 112.2%, the “Payout %” attributable to that performance measure will nonetheless be 200% for that performance measure.

If actual results for any one or more of the performance measures falls between the performance levels shown above, the “Payout %” will be determined by linear interpolation.  For example, if Business Unit Local Currency Sales vs. Plan is 100.9%, the “Payout %” attributable to Business Unit Local Currency Sales vs. Plan will be 101.8%, determined as follows:

100% +	(100.9% - 100%)	x (102% - 100 %) = 101.8%
	(101% - 100%)

A-4

EX-10.20

EXHIBIT 10.20

3M EXECUTIVE SEVERANCE PLAN

SUMMARY PLAN DESCRIPTION

Effective Date:  February 3, 2020

I. Introduction

The purpose and intent of this 3M Executive Severance Plan (“Plan”) is to provide separation benefits to certain eligible employees of 3M Company (“3M”) or an affiliate of 3M participating in the Plan (each, a “Participating Employer”) who are involuntarily discharged from employment other than for Misconduct or who voluntarily terminate employment for Good Reason.  This Plan does not provide separation benefits for individuals discharged from employment for Misconduct, for individuals who voluntarily terminate employment without Good Reason or for individuals whose employment is terminated by the Company pursuant to a mandatory retirement policy adopted by the board of directors of 3M (the “Board”).

This is the summary plan description (“SPD” or “Summary”) for the Plan.  It describes the terms of the Plan as in effect for individuals whose termination of employment and Benefits Approval Date (as defined in Section ‎II.A below) occur on or after the effective date specified above.  This Summary, together with any separate amendments and other documents, is also the official plan document for the Plan.

To fully understand your benefits, it is important that you read this entire Summary carefully and understand it and your responsibilities.  If you elect to participate, one of your responsibilities is to timely provide an executed General Release of All Claims in a form provided by a Participating Employer (“Release”).  Failure to follow the terms of the Plan or satisfy any Plan requirements can result in loss of eligibility or delay, reduction or termination of benefits.  You should keep this Summary for future reference.

Depending on your individual situation, you may be eligible for other types of employee benefits and/or retirement benefits following termination of employment under other employee benefit and/or retirement plans.  Consult the plan documents for those other plans for a description of those other benefits.

You will notice certain terms and/or phrases are capitalized throughout this Summary. These terms and/or phrases are important, and you should remember them. The capitalized terms and phrases are either defined in the Summary or in the other document to which they relate.

Neither the receipt of this Summary nor its use of the term “you” indicates that you are eligible to participate in the Plan or receive benefits under the Plan.  Only those individuals who satisfy the eligibility requirements and other criteria contained in the Plan are eligible to participate in the Plan.

The information in this Summary may not be relied on as tax advice for any purpose.  3M does not guarantee any specific tax consequences.  Ultimately, it is your responsibility to determine the tax treatment of the payments and benefits provided under this Plan.  For information on how applicable tax law may apply to your personal situation, consult your own qualified tax advisor.

Neither the terms of the Plan nor the benefits provided under the Plan shall be a term of employment of any individual. This Summary and the Plan shall not be deemed an employment contract.  Participation in the Plan does not constitute a guarantee of employment or alter the “at-will” nature of your employment.

3M hereby advises and encourages you to speak with an attorney regarding the provisions in this Summary and the Release. 

II. Eligibility and Required Documents

A. Persons Who Are Eligible

Except as described below in Section ‎II.B, you are eligible to participate in this Plan only if:

· you are classified by a Participating Employer as a regular, U.S.employee of such Participating Employer and a common law employee for employment tax purposes;

· you are an employee at the job grade L2 level (or equivalent) or above;

· your employment with your Participating Employer is involuntarily terminated by the Participating Employer (other than for Misconduct or pursuant to a mandatory retirement policy adopted by the Board) or you voluntarily terminate your employment with your Participating Employer for Good Reason, in each case, on or after the Effective Date, and your eligibility for severance benefits under this Plan (subject to all other eligibility requirements) has been reviewed and confirmed by: (i) the compensation committee of the Board, if you are the Chief Executive Officer of 3M; (ii) the Chief Executive Officer of 3M, if you are the Senior Vice President, Human Resources; and (iii) the Senior Vice President, Human Resources, if clauses (i) and (ii) are inapplicable to you (provided, however, that the Senior Vice President, Human Resources, may specify one or more alternate approvers for individuals covered by this clause (iii)).  References in this Summary to an individual’s “Benefits Approval Date” mean the date on which the approval required in accordance with this provision is obtained with respect to such individual;

· you sign and return the Release by the latest of: (i) your separation date; (ii) the date that is 45 days after the date that you receive a copy of this Summary and the Release; or (iii) the date that is specified in writing by an authorized representative of a Participating Employer;

· you do not rescind the Release, and the Release becomes effective, irrevocable and enforceable; and

you separate employment on the date determined by 3M (other than for voluntary terminations for Good Reason).  3M has discretion to determine your actual separation date and to change your separation date (other than for voluntary terminations for Good Reason).

The classification of an individual by a Participating Employer is final, conclusive and binding for purposes of determining eligibility to participate in this Plan and shall be made solely in the discretion of the Participating Employer.  No reclassification or determination of a person’s status with a Participating Employer, for any reason, without regard to whether it is initiated by a court, governmental agency or otherwise and without regard to whether or not the Participating Employer agrees to such reclassification or determination, shall make the person retroactively or prospectively eligible for benefits.  However, the Participating Employer, in its sole discretion, may reclassify a person as benefits eligible on a prospective basis.  Any uncertainty regarding an individual’s classification will be resolved by excluding the person from eligibility.

Employees who satisfy all of the Plan’s eligibility requirements and receive benefits under the Plan are referred to as “Plan Participants” throughout this Summary.

B. Persons Who Are Ineligible

Even if you otherwise meet the eligibility requirements above, you are not eligible to receive benefits under this Plan if:

· you cease to work prior to the date that your services are no longer required by 3M (other than for voluntary terminations for Good Reason);

· you provide notice of your intent to terminate employment with 3M (including by reason of retirement, but excluding any good faith notice of intent to voluntarily resign for Good Reason);

· you are an employee of a 3M affiliate that is not a Participating Employer;

· you are employed by a Participating Employer established outside of the United States and you do not have a primary work location in the United States at the time you receive notice of termination or, if applicable, at the time you provide a good faith notice of intent to voluntarily resign for Good Reason;

· you are an employee below the job grade L2 level (or equivalent);

· you are classified or treated by a Participating Employer as a leased employee, independent contractor, contingent worker, service worker, consultant, contract worker, agency worker, freelance worker, shared employee or a person other than a common law employee, regardless of your actual legal status;

· your compensation is not reported on a Form W-2 issued by a Participating Employer;

· you are covered by a contract or other written agreement that provides that you are not eligible for benefits under the Plan;

· you are on long-term disability or other inactive employment status;

· you are on a leave of absence (other than an inactive leave) or short-term disability, unless you return to work, separate employment and sign the Release by the date required by 3M and satisfy all other eligibility requirements of this Plan;

· you are discharged for Misconduct, as determined by 3M;

· your employment by a Participating Employer is terminated as a direct result of a merger, acquisition, sale, spin-off or other divestiture, involving a business, line of business, business unit, or other identifiable business group of 3M or a 3M affiliate that does not result in a Change in Control of 3M, except and to the extent that 3M, in its sole discretion, declares certain such employees eligible (3M reserves the right to declare certain such employees eligible while excluding other such employees); provided that you must satisfy all other eligibility requirements of this Plan;

· you are eligible for a separation-related payment or benefits under any applicable law, plan, agreement, arrangement or understanding of any nature in exchange for a release of, or the termination of, any employment-related claims you may have against your Participating Employer; or

· you are offered and accept another position within 3M or a 3M affiliate prior to your separation date.

C. Required Documents – Release

You must sign and return the Release, and the Release must become effective, irrevocable and enforceable, in order to be eligible to receive the payments and benefits described in Section ‎III.C  (Severance Pay), Section ‎III.D  (VIP Vesting), Section ‎III.E  (Stock Options and SARs), Section ‎III.F  (Restricted Stock Units), Section ‎III.G  (Performance Shares), and Section ‎III.H  (Outplacement Benefits). You have at least 45 days from receipt to sign and return the Release, but the Release cannot be signed before your separation date.  This means that your deadline for signing and returning the Release will be the latest of: (i) your separation date; (ii) the date that is 45 days after the date that you receive a copy of this Summary and the Release; or (iii) the date that is specified in writing by an authorized representative of a Participating Employer.  If your separation date occurs before the 45th day (or such later date as may be authorized for you), you may use the entire period to consider whether to sign the Release, or you may voluntarily sign the documents on or after your separation date but before the deadline to return the Release has passed.  The completed and signed Release should be sent to:  3M Human Resources – Transitions Administration, 3M Center, 224-2W-15, St. Paul, MN 55144.

D. Certain Definitions

For purposes of this Plan, the following definitions have the following meanings:

· “Change in Control” has the same meaning as such term is defined in the 3M Company 2016 Long-Term Incentive Plan (the “2016 LTIP”) or any successor thereto.

· “Good Reason” means, with respect to a voluntary termination: (i) if the voluntary termination occurs within 18 monthsfollowing a Change in Control of 3M (each such period, a “CIC Window Period”), (a) a material diminution in your position, authority, duties or responsibilities as in effect immediately prior to the Change in Control of 3M, (b) a material diminution in your base salary or annual planned cash compensation, or (c) a material change in the geographic location at which you are required to perform services for your Participating Employer; or (ii) if the voluntary termination occurs at any time other than during a CIC Window Period, (a) a material diminution in your base salary or annual planned cash compensation without your consent, other than an across-the-board reduction that applies to all comparable positions, or (b) a change in excess of 100 miles in the primary work location at which you are required to perform services for your Participating Employer without your consent.  Notwithstanding the foregoing, a termination (other than a termination that occurs within 18 months following a Change in Control of 3M) will not be treated as a voluntary termination for Good Reason for purposes of this Plan unless you provide written notice to 3M of the existence of the circumstances providing grounds for termination for Good Reason within 30 days of the initial existence of such grounds and 3M has had at least 30 days from the date on which such notice is provided to cure such circumstances. If you do not terminate your employment for Good Reason within 60 days after the first occurrence of the applicable grounds, then you will be deemed to have waived your right to terminate for Good Reason with respect to such grounds.

· “Misconduct” means (i) your willful failure to substantially perform your duties (other than a failure resulting from your disability); (ii) your willful failure to carry out, or comply with any lawful and reasonable directive of the Board or your immediate supervisor; (iii) the occurrence of any act or omission by you that could reasonably be expected to result in (or has resulted in) your conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or indictable offense or crime involving moral turpitude; (iv) your commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against 3M or any of its subsidiaries or

affiliates or any of their officers, directors, employees, customers, suppliers, insurers or agents; (v) your material breach of any material provision of any written agreement with 3M or any subsidiary; (vi) any action (or inaction) by you that 3M reasonably determines constitutes gross negligence or misconduct in the performance of your duties and responsibilities; or (vii) any other intentional misconduct by you that significantly affects the business or affairs of 3M or any subsidiary in an adverse manner.

III. Provisions Applicable to Plan Participants

A. Future Service with 3M

If you become a Plan Participant, you may not apply for or accept employment with, or provide services to, 3M or any 3M affiliate in any capacity (including, but not limited to, as a regular or temporary employee, consultant, independent contractor, or contract worker) for a period of six months following your separation date. 

B. Final Paycheck

Regardless of whether you become a Plan Participant, your final pay will be paid to you separately from any severance or retirement payment you may receive. 

C. Severance Pay

If you become a Plan Participant, you will receive severance pay at the time and in the amount set forth in the Schedule provided to you and applicable to your position; provided, however, that your right to severance pay will cease in the event you become reemployed by 3M.  Severance pay does not qualify for voluntary deductions (e.g., General Employees Stock Purchase Plan, VIP) and is subject to all applicable Federal (including FICA), state, and/or local taxes in effect at the time of payment, as well as all legally required withholdings (e.g., tax levy, garnishment).

D. VIP Vesting

If (1) you are employed by a Participating Employer that participates in the VIP, (2) you are a participant in the VIP, and (3) you become a Plan Participant, then your Company Contribution Account will be fully vested even if you do not have the required years of vesting service as of your separation date.

E. Stock Options and SARs

If you become a Plan Participant, each outstanding vested option and stock appreciation right (“SAR”) issued to you under the 3M 2008 Long‑Term Incentive Plan, the 2016 LTIP or any successor thereto (collectively, the “LTIP”) will remain outstanding and will not terminate 90 days after your termination of employment solely as a result of your separation from 3M.   The remaining terms and conditions of your stock options and SARs will continue to apply, including, without limitation and if applicable, the terms and conditions providing for the termination of your stock options or SARs in the event of your violation of any applicable non-competition, non-solicitation or confidentiality obligations. In no event will your stock options or SARs remain exercisable beyond the expiration of their maximum term.  Unless otherwise provided pursuant to the existing terms and conditions of the applicable plan under which the stock option or SAR was granted and the applicable award agreement (see Section ‎IV below), any stock options or SARs that are unvested as of your termination of employment will be forfeited in accordance with their terms. 

F. Restricted Stock Units

If you become a Plan Participant, a portion of each annual restricted stock unit award issued to you under the LTIP that remains unvested at the time of your termination of employment will vest on an accelerated basis.  The number of additional restricted stock units that vest will be determined by multiplying the total number of restricted stock units subject to each vesting tranche of your award by a fraction, the numerator of which will be the number of whole years of employment service you have completed since the award’s grant date and the denominator of which will be the number of years of employment service required to vest in the restricted stock units subject to that tranche pursuant to the otherwise applicable service-based vesting schedule.  If you previously vested in one or more restricted stock units subject to the award, the number of restricted stock units that vest on an accelerated basis will be reduced on a one-for-one basis by the number of previously vested restricted stock units.  The Shares underlying the restricted stock units that vest pursuant to this Section ‎III.F will be issued as soon as administratively practicable following the date on which your release becomes effective and irrevocable (but in any event no later than March 15 of the calendar year following the calendar year in which your termination of employment occurs) or, to the extent necessary to comply with the requirements of section 409A of the Code, at such time as the shares otherwise would have been issued in accordance with the terms of your award.  In no event will any restricted stock unit awards granted to you for recognition, retention or other special purposes be subject to the special

accelerated vesting provisions of this Section ‎III.F.    Unless otherwise provided pursuant to the existing terms and conditions of the applicable plan under which the restricted stock units were granted and the applicable award agreement (see Section ‎IV below), any restricted stock units that are unvested as of your termination of employment will be forfeited in accordance with their terms.

G. Performance Shares

If you become a Plan Participant, each outstanding performance share issued to you under the LTIP will vest in accordance with the applicable vesting schedule and will not be forfeited solely as a result of your separation from 3M, provided that the target number of performance shares with respect to any award shall be prorated based on the number of whole calendar months you worked during the applicable performance period and the performance shares that may vest will be subject to actual performance results and paid at the same time as for other then-active LTIP participants.

H. Outplacement Benefits

If you become a Plan Participant, you will be eligible to receive reasonable outplacement services, as determined by 3M in accordance with its outplacement services policy in effect as of the date of your termination of employment.

IV. Impact on Other Company Plans, Programs and Arrangements

Unless otherwise provided herein, the terms and conditions of each benefit plan, program or arrangement in which you participate as of the date of your termination of employment will govern with respect to the effect of your termination of employment under such plan, program or arrangement.  In some cases, you may be eligible to receive additional benefits under such other plans, programs or arrangements whether or not you become a Plan Participant.  For example, outstanding equity awards issued to you under the LTIP (including performance share awards) may continue to vest and/or, if applicable, remain exercisable beyond the standard post-termination exercise period (but in no event beyond the expiration date of such option) if your termination of employment qualifies as a “retirement” for purposes of the relevant award or you experience a qualifying termination of employment following a change in control.  For further information on the consequences of your employment status change, as well as the definition of “retirement” for purposes of your outstanding equity awards, please refer to the resource list included in your severance packet for contact information.

V. Claims Procedure

If you believe you are entitled to benefits, or you disagree with a decision regarding your benefits, you should file a claim with the Plan Administrator in accordance with the Plan’s claim procedures. If you do not file a claim or follow the claim procedures, you are giving up important legal rights.  Before commencing legal action to recover benefits, or to enforce or clarify rights, you must completely exhaust the Plan’s claim procedures.

A. How to File a Claim. 

To make a claim, you must file a written statement with the Plan Administrator.  You should include the facts and arguments that you want considered in deciding your claim.  The Plan Administrator must receive actual delivery of your written claim within 60 days after the date you knew or reasonably should have known of the facts behind your claim or, if earlier, the date of your separation.

Within 90 days of the date the Plan Administrator receives your claim, you will receive either a notice of the decision or a notice describing the need for additional time (up to 90 additional days) to reach a decision.  If the Plan Administrator notifies you that it needs additional time, the notice will describe the special circumstances requiring the extension and the date by which it expects to reach a decision.  If the Plan Administrator denies your claim, in whole or in part, you will receive a notice specifying the reasons, the Plan provisions on which it is based, a description of additional material (if any) needed to perfect the claim, your right to file a civil action under section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if your claim is denied upon review, and it will also explain your right to request a review.

B. How to File an Appeal. 

If the Plan Administrator denies your claim, you must file a written request to have the denial reviewed. Your request should include the facts and arguments that you want considered in the review.  The Plan Administrator must receive actual delivery of your written request for review within 60 days after the date that you received notice that your claim was denied.  You may submit written comments, documents, records, and other information relating to your claim.  Upon request you are entitled to receive free of charge reasonable access to and copies of the relevant documents, records, and information used in the claims process.

Within 60 days after the date the Plan Administrator receives your request for review, you will receive either a notice of the decision or a notice describing the need for additional time (up to 60 additional days) to reach a decision.  If the Plan Administrator notifies you that it needs additional time, the notice will describe the special circumstances requiring the extension and the date by which it expects to reach a decision.  If the Plan Administrator affirms the denial of your claim, in whole or in part, you will receive a notice specifying the reasons, the Plan provisions on which it is based, notice that upon request you are entitled to receive free of charge reasonable access to and copies of the relevant documents, records, and information used in the claims process, and your right to file a civil action under section 502(a) of ERISA.

If the Plan Administrator determines it needs further information to complete its review of your denied claim, you will receive either a written or electronic notice describing the additional information necessary to make the decision.  You will then have 60 days from the date you receive the notice requesting additional information to provide the requested information to the Plan Administrator.  The time between the date the Plan Administrator sends its request to you and the date the Plan Administrator receives the requested additional information from you does not count against the 60-day period in which the Plan Administrator has to decide your claim on review.  If special circumstances exist, this period may be further extended.

C. Deadline to Commence a Lawsuit.

If you wish to bring a lawsuit over your claim, you must file your claim within the required time, complete the entire claim procedures, receive a denial from the Plan Administrator after you request a review, and commence that suit within 30 months after you knew or reasonably should have known of the facts behind your claim or, if earlier, within 6 months after the claim procedures are completed.

VI. Important Plan Information

A. Plan Administrator

The Plan Administrator shall have the discretionary power and authority to:

· control and manage the operation of the Plan;

· prescribe applicable Plan procedures;

· make all decisions and determinations with respect to the Plan; and

· interpret and apply the terms of the Plan. 

This discretionary power and authority includes, without limitation:

· determining all factual and legal questions;

· interpreting any ambiguous or unclear terms in the Plan and the underlying documents;

· deciding eligibility for coverage and eligibility for benefits; and

· establishing rules to carry out administration of the Plan. 

All determinations, interpretations, rules and decisions of the Plan Administrator will be made, in its sole discretion, and will be final, conclusive and binding as to all parties.  In any legal action, all explicit and all implicit determinations by the Plan Administrator shall be afforded the maximum deference permitted by law.  The Plan Administrator may delegate all or a portion of its powers, authority, responsibilities, discretion and rights under the Plan to an individual, entity or committee.  Any delegation may allow further delegation by the individual, entity or committee to whom the delegation has been made.

The Plan Administrator reserves the right to correct any errors, defects, inconsistencies and omissions that may occur in the administration of the Plan as the Plan Administrator, in its discretion, determines appropriate. This includes reducing or eliminating benefits under the Plan, and such correction shall be final, conclusive and binding all persons.  Subject to any delegation of authority, the Plan Administrator shall be the named fiduciary for the purposes of ERISA.

B. Enforceable Release Required; Repayment.

If all or any portion of the Release is held to be invalid, illegal or otherwise unenforceable for any reason, or you commit an act of Misconduct, 3M will have the right (but not the obligation) to (i) declare the Release void in its entirety, (ii) cease

providing any payment or benefit otherwise owing to you under the Plan and (iii) require you to repay any and all cash severance previously paid to you under the terms of the Plan to the extent permitted by applicable law.

C. Amendment or Termination of Plan

3M reserves the right to modify, amend and terminate the Plan, in whole or in part, at any time and in any respect and for any reason and either prospectively or retroactively or both.  3M's right to modify, amend or terminate the Plan includes, without limitation:

· changes in the eligibility requirements;

· cost-sharing and funding arrangements; and

· benefits provided and termination of all or a portion of the coverage provided under the Plan.

No oral statements or representations can amend the Plan.  3M makes no promise to continue the Plan or the benefits offered under the Plan in the future, and individuals have no vested right to the Plan or the benefits offered under the Plan.

Notwithstanding the foregoing, no amendment or termination of the Plan that would reduce benefits or eliminate one or more participant’s eligibility may take effect if adopted during the period beginning 6 months prior to a Change in Control of 3M or 18 months following a Change in Control of 3M without the written consent of the participant(s) whose benefits or eligibility would be reduced or eliminated.

D. Funding

Benefits provided under the Plan are paid out of the general assets of 3M.An individual does not, by virtue of participating in the Plan, have any interest in any specific asset or assets of 3M.  With respect to benefits funded out of 3M’s general assets, an individual’s rights shall be solely those of an unsecured general creditor of 3M.

E. Governing Law

The Plan shall be construed in accordance with the applicable provisions of ERISA and the Code; and, to the extent not preempted by Federal law, in accordance with the laws of the State of Minnesota.  Any litigation commenced or arising in connection with the Plan shall be commenced and venued exclusively in the United States District Court for the District of Minnesota.

F. Section 409A of the Code

The payments and benefits provided under this Plan are intended to be exempt, to the greatest extent possible, from the requirements of section 409A of the Code, and this Plan will be construed and implemented accordingly.  To the extent a payment or benefit provided under this Plan is not so exempt, this Plan and the payments and benefits to be provided hereunder are intended to, and will be construed and implemented so as to, comply in all respects with the applicable provisions of section 409A of the Code.  Any right to receive installment payments under this Plan shall be treated as a right to receive a series of separate payments. 

Notwithstanding anything herein to the contrary, if you are a “specified employee” (as determined by 3M in accordance with section 409A of the Code) as of the date of your “separation from service” (as determined by 3M in accordance with section 409A of the Code), and if any payment, benefit or reimbursement to be paid or provided under the Plan to you both (i) constitutes a “deferral of compensation” within the meaning of and subject to section 409A of the Code and (ii) cannot be paid or provided in a manner otherwise provided herein without subjecting you to additional tax, interest and/or penalties under section 409A of the Code, then any such payment, benefit or reimbursement that is otherwise payable during the first six (6) months following your separation from service shall be paid or provided to you in a lump sum on the earlier of (x) your death and (y) the first business day of the seventh month immediately following your separation from service.

3M makes no representations that the payments and benefits provided under the Plan comply with section 409A of the Code and in no event shall 3M be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Plan Participant on account of noncompliance with section 409A of the Code. To the extent required by section 409A of the Code, any payments to be made to a Plan Participant upon his or her termination of employment shall only be made upon such Plan Participant's separation from service.

G. Recovery of Overpayment; Recoupment

If a benefit payment to you or on your behalf exceeds for any reason the benefit amount you are entitled to receive in accordance with the terms of the Plan, the Plan Administrator has the right to require the return of the overpayment on request, and upon request you must immediately refund the overpayment as well as help the Plan Administrator obtain the refund of the overpayment from another person or entity.

The Plan Administrator’s right to recover overpayments applies regardless of the cause, nature or source of the overpayments, and includes any overpayment resulting from retroactive awards received from any source, fraud or any error made in processing your claim.  The Plan Administrator also has the right, at its option and to the extent consistent with section 409A of the Code, to recover the overpayment by reducing or offsetting against any future benefit payments.  Such rights do not affect any other right of recovery the Plan Administrator may have with respect to such overpayment.  In addition, the Plan Administrator reserves the right to obtain the overpayment by any other method permitted by the law.  The Plan Administrator will determine, in its sole discretion, the method by which the repayment of the overpayment shall be made.  Failure to repay an overpayment and cooperate with the Plan Administrator in collecting an overpayment may result in loss of coverage under the Plan.

In addition, any benefit payment under the Plan will be subject to recoupment by 3M to the extent required to comply with applicable law or 3M’s clawback policy, as in effect at the time your employment is terminated.

H. Assignment Prohibited

You shall not have the right to transfer any interest, benefit, right or claim you may have under this Plan, including a claim for benefits, for breach of fiduciary duty, to receive documents or information, to file a lawsuit, or any other claim or right you may have under this Plan to any party.  Nor shall you have the power to anticipate, alienate, assign, sell, transfer, pledge or encumber the same.

The Plan shall not recognize an assignment of any interest, benefit, right or claim you may have under this Plan, either in whole or in part.  Any attempt to assign any interest, benefit, right or claim under this Plan shall be void and non-enforceable.

Benefits under this Plan shall not be subject to attachment, garnishment, execution following judgment or other legal process.  Except as may be required by law, your benefits and rights under the Plan are not subject to the claims of your creditors.

I. Section 280G

Notwithstanding any other provision of the Plan or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits received or to be received by you (including, without limitation, any payment or benefits received in connection with a Change in Control or your termination of employment, whether pursuant to the terms of this Plan or any other plan, arrangement, or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payments”) constitute “parachute payments” within the meaning of section 280G of the Code and would, but for this Section ‎VI.I, be subject to the excise tax imposed under section 4999 of the Code (the “Excise Tax”), then prior to making the 280G Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to you of the 280G Payments after payment of the Excise Tax to (ii) the Net Benefit to you if the 280G Payments are limited to the extent necessary to avoid being subject to the Excise Tax.  If the amount calculated under clause (i) above is less than the amount under clause (ii) above, the 280G Payments will be reduced to the minimum extent necessary to ensure that no portion of the 280G Payments is subject to the Excise Tax. For purposes of this Section VI.I, “Net Benefit” shall mean the present value of the 280G Payments net of all Federal, state, local, and foreign income, employment, and excise taxes. Any reduction made pursuant to this Section VI.I shall be made in a manner determined by 3M that is consistent with the requirements of section 409A of the Code.  If two economically equivalent amounts are subject to reduction but are payable at different times, the amounts shall be reduced (but not below zero) on a pro rata basis.All calculations and determinations under this Section ‎VI.I shall be made by an independent accounting firm or independent tax advisor appointed by 3M (the “Tax Advisor”) whose determinations shall be conclusive and binding on 3M and you for all purposes. For purposes of making the calculations and determinations required by this Section ‎VI.I, the Tax Advisor may rely on reasonable, good faith assumptions and approximations concerning the application of section 280G and section 4999 of the Code. 3M and you shall furnish the Tax Advisor with such information and documents as the Tax Advisor may reasonably request in order to make its determinations under this Section ‎VI.I.  3M shall bear all costs the Tax Advisor may reasonably incur in connection with its services.

VII. General Plan Information

Plan Feature	Plan Details
Plan Name	The official plan name is the “3M Executive Severance Plan”.
Type of Plan	The Plan is an employee welfare benefit plan providing severance pay benefits.  The Plan is not an employee pension benefit plan.
Plan Year	The Plan Year is the calendar year beginning each January 1 and ending each December 31.
Plan Number	976
Employer/Plan Sponsor	3M Company 3M Center St. Paul, Minnesota 55144-1000 877-473-6394
Participating Employers	In addition to 3M, Participating Employers include any 3M affiliate that adopts this Plan if such adoption is approved by 3M and reflected on the list of Participating Employers.  The list of Participating Employers may be amended from time to time.  Contact the Plan Administrator to obtain a list of Participating Employers.
Plan Sponsor’s Employer Identification Number	41-0417775
Plan Administrator	With respect to officers subject to Section 16 of the Securities Exchange Act of 1934, as amended, the Plan Administrator is the compensation committee of the Board.  With respect to all other individuals eligible to participate in the Plan, the Plan Administrator is the Director, HR Benefits, of 3M or his or her successor.  Send correspondence (including claims & appeals) to: Compensation and Benefits – Transitions Administration 3M Company 3M Center St. Paul, Minnesota 55144-1000
Agent for Services of Legal Process	3M's agent for the service of legal process against the Plan is: The Secretary 3M Company 3M Center St. Paul, MN 55144-1000 Service of legal process also may be served on the Plan Administrator.

A. Employee Retirement Income Security Act (ERISA) Statement of Rights

About your ERISA Rights

As a participant in the Plan, you are entitled to certain rights and protections under ERISA.  ERISA provides that all Plan participants will be entitled to the information as described in this section.

Receive Information About Your Plan and Benefits.  ERISA provides that all Plan participants will be entitled to:

· Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as work sites, all documents governing the Plan, including insurance contracts, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration (EBSA) at:

Public Disclosure Room

Employee Benefits Security Administration

U.S. Department of Labor

200 Constitution Avenue, N.W.

Washington, D.C. 20210.

· Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts and copies of the latest annual report (Form 5500 Series) and updated summary plan description (“SPD”).  The Plan Administrator may make a reasonable charge for the copies.

· Receive a summary of the Plan’s annual financial report.  The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.

Prudent Actions by Plan Fiduciaries.  In addition to creating rights for Plan participants ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan.  The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries.  No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.

Enforce Your Rights.  If your claim for a welfare benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator.  If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court after exhausting the Plan’s claim and appeal procedure. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court.  If you file suit against the Plan, the court will decide who should pay court costs and legal fees.  If you are successful, the court may order the person you have sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance with Your Questions.  If you have any questions about your Plan, you should contact the Plan Administrator.  If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration (EBSA), U.S. Department of Labor, listed in your telephone directory or the

Division of Technical Assistance and Inquiries

Employee Benefits Security Administration

U.S. Department of Labor

200 Constitution Avenue N.W.

Washington, D.C. 20210.

You may also obtain certain publications about your rights and responsibilities under ERISA by:

· Contacting the publications hotline of the EBSA at (866) 444-3272;

· Logging on to the Internet at dol.gov/ebsa; or

· Contacting the EBSA field office nearest you.

Schedule A to the 3M Executive Severance Plan

Severance Pay for the Chief Executive Officer

If you become a Plan Participant by signing the Release and satisfying all other eligibility requirements, you will receive the severance payments described below.

1. Continued payment of the annual base salary you otherwise would have earned if you remained employed through the date that is twenty-four (24) months following your separation date (the “Severance Period Expiration Date”), payable in accordance with 3M’s regular payroll practices, with the first such payment commencing sixty (60) days following your separation date, subject to Section ‎VI.F of the Plan.

1. Continued payment of all Annual Incentive Plan payments that you otherwise would have been entitled to receive if you remained employed by 3M through the Severance Period Expiration Date.  In the event the Severance Period Expiration Date occurs prior to the completion of an Annual Incentive Plan measurement year, you will receive a prorated amount for such year based on the number of calendar days in such year preceding the Severance Period Expiration Date.  The amount of each Annual Incentive Plan payment (or prorated payment) to which you may become entitled will be calculated in accordance with the terms of the Annual Incentive Plan based on actual results for the relevant Annual Incentive Plan measurement year.  For purposes of calculating such payments, your performance rating for the year of termination shall be the final performance rating shown for you in 3M’s human resources management system on the last day of the applicable measurement year (or, if no such performance rating is assigned to you for such year, a performance rating of “fully meets expectations” or equivalent) and for each year thereafter, if any, your performance rating shall be a rating of “fully meets expectations” or equivalent.  Each Annual Incentive Plan payment (or prorated payment) will be distributed to you no later than March 15 of the year following the relevant Annual Incentive Plan measurement year.

Note:  If you participate in the Annual Incentive Planand you retire (within the meaning of the Annual Incentive Plan), you may be eligible to receive a prorated amount of the Annual Incentive Plan payment that otherwise would have been payable to you for the year of your retirement, regardless of whether you become a Plan Participant.  The prorated amount for which you may be eligible, however, would be calculated based on the number of days worked prior to your separation date (i.e., without regard to the additional period between your separation date and the Severance Period Expiration Date).

In calculating the benefits described above, your annual base salary and target Annual Incentive Plan payment will be your annual base salary and target Annual Incentive Plan payment as in effect on your separation date (or if you voluntarily terminate for Good Reason as a result of a material diminution in your base salary or annual planned cash compensation, your annual base salary and target Annual Incentive Plan payment as in effect immediately prior to any such material diminution). 

Notwithstanding anything herein to the contrary, the cash payments and benefits provided to you pursuant to items 1 and 2 of this Schedule shall reduce, on a dollar-for-dollar basis but not below $0, any payments you may otherwise become entitled to under your applicable Employee Agreement, provided that such reduction shall be applied consistent with section 409A of the Code.

Schedule B to the 3M Executive Severance Plan

Severance Pay for Corporation Operations Committee Members (other than the Chief Executive Officer)

If you become a Plan Participant by signing the Release and satisfying all other eligibility requirements, you will receive the severance payments described below.

1. Continued payment of the annual base salary you otherwise would have earned if you remained employed through the date that is eighteen (18) months following your separation date (the “Severance Period Expiration Date”), payable in accordance with 3M’s regular payroll practices, with the first such payment commencing sixty (60) days following your separation date, subject to Section ‎VI.F of the Plan.

2. Continued payment of all Annual Incentive Plan payments that you otherwise would have been entitled to receive if you remained employed by 3M through the Severance Period Expiration Date.  In the event the Severance Period Expiration Date occurs prior to the completion of an Annual Incentive Plan measurement year, you will receive a prorated amount for such year based on the number of calendar days in such year preceding the Severance Period Expiration Date.  The amount of each Annual Incentive Plan payment (or prorated payment) to which you may become entitled will be calculated in accordance with the terms of the Annual Incentive Plan based on actual results for the relevant Annual Incentive Plan measurement year.  For purposes of calculating such payments, your performance rating for the year of termination shall be the final performance rating shown for you in 3M’s human resources management system on the last day of the applicable measurement year (or, if no such performance rating is assigned to you for such year, a performance rating of “fully meets expectations” or equivalent) and for each year thereafter, if any, your performance rating shall be a rating of “fully meets expectations” or equivalent.  Each Annual Incentive Plan payment (or prorated payment) will be distributed to you no later than March 15 of the year following the relevant Annual Incentive Plan measurement year.

Note:  If you participate in the Annual Incentive Planand you retire (within the meaning of the Annual Incentive Plan), you may be eligible to receive a prorated amount of the Annual Incentive Plan payment that otherwise would have been payable to you for the year of your retirement, regardless of whether you become a Plan Participant.  The prorated amount for which you may be eligible, however, would be calculated based on the number of days worked prior to your separation date (i.e., without regard to the additional period between your separation date and the Severance Period Expiration Date).

In calculating the benefits described above, your annual base salary and target Annual Incentive Plan payment will be your annual base salary and target Annual Incentive Plan payment as in effect on your separation date (or if you voluntarily terminate for Good Reason as a result of a material diminution in your base salary or annual planned cash compensation, your annual base salary and target Annual Incentive Plan payment as in effect immediately prior to any such material diminution). 

Notwithstanding anything herein to the contrary, the cash payments and benefits provided to you pursuant to items 1 and 2 of this Schedule shall reduce, on a dollar-for-dollar basis but not below $0, any payments you may otherwise become entitled to under your applicable Employee Agreement, provided that such reduction shall be applied consistent with section 409A of the Code.

EX-21

EXHIBIT 21

3M COMPANY AND CONSOLIDATED SUBSIDIARIES (PARENT AND SUBSIDIARIES)

AS OF DECEMBER 31, 2019

Name of Company		Organized Under Law of
Registrant –– 3M Company		Delaware
	Consolidated subsidiaries of the Registrant:
	3M Financial Management Company	Delaware
	3M Global Channel Services, Inc.	Delaware
	3M Innovative Properties Company	Delaware
	3M Interamerica, Inc.	Delaware
	3M Occupational Safety LLC	Delaware
	3M Purification Inc.	Delaware
	Acelity, Inc.	Delaware
	Aearo Holding LLC	Delaware
	Aearo Intermediate LLC	Delaware
	Aearo LLC	Delaware
	Aearo Technologies LLC	Delaware
	Capital Safety North America Holdings Inc.	Delaware
	Capital Safety North America Intermediate Holdings LLC	Delaware
	Ceradyne, Inc.	Delaware
	Chiron Holdings, Inc.	Delaware
	KCI Holding Company, Inc.	Delaware
	KCI International, Inc.	Delaware
	KCI Licensing, Inc.	Delaware
	KCI USA, Inc.	Delaware
	MModal CB Inc.	Delaware
	MModal IP LLC	Delaware
	MModal LLC	Delaware
	New MMI, Inc.	Delaware
	Scott Technologies, Inc.	Delaware
	3M Unitek Corporation	California
	Meguiar's, Inc.	California
	3M Health Information Systems, Inc.	Maryland
	D B Industries, LLC	Minnesota
	MModal MQ Inc.	New Jersey
	MModal Services, Ltd.	New Jersey
	Kinetic Concepts, Inc.	Texas
	3M Australia Pty. Ltd.	Australia
	3M Precision Grinding GmbH	Austria
	3M Belgium bvba/sprl	Belgium
	3M do Brasil Ltda.	Brazil
	3M Manaus Industria de Produtos Quimicos Ltda.	Brazil
	3M Canada Company - Compagnie 3M Canada	Canada
	Capital Safety Group Canada ULC	Canada
	3M China Limited	China
	3M International Trading (Shanghai) Co., Ltd.	China
	3M Investments (China) Co., Ltd.	China
	3M Material Technology (Suzhou) Co., Ltd.	China
	3M Specialty Materials (Shanghai) Co., Ltd.	China
	3M Purification SAS	France
	3M France S.A.S.	France
	Capital Safety Group EMEA	France
	3M Deutschland GmbH	Germany
	3M Real Estate GmbH & Co KG	Germany
	Dyneon GmbH	Germany
	3M Hong Kong Limited	Hong Kong
	3M India Limited	India
	KCI Manufacturing Unlimited Company	Ireland
	3M ITALIA s.r.l.	Italy
	3M Japan Limited	Japan
	3M Japan Holdings G.K.	Japan

Name of Company		Organized Under Law of
	3M Japan Products Limited	Japan
	3M Korea High Tech Limited	Korea
	3M Korea Ltd	Korea
	3M Asset Management S.a.r.l.	Luxembourg
	3M Global Capital S.a.r.l.	Luxembourg
	Medical Holdings Limited	Malta
	3M Mexico, Sociedad Anonima de Capital Variable	Mexico
	3M Asia Holding B.V.	Netherlands
	3M Holding Company B.V.	Netherlands
	3M Intermediate Acquisitions B.V.	Netherlands
	3M International Group B.V.	Netherlands
	3M International Holding B.V.	Netherlands
	3M International Investments B.V.	Netherlands
	3M West Europe B.V.	Netherlands
	3M Panama Pacifico S. de R.L	Panama
	3M Poland Manufacturing Sp. z.o.o.	Poland
	3M Wroclaw spolka z ograniczona odpowiedzialnoscia	Poland
	3M Innovation Singapore Pte. Ltd.	Singapore
	3M Singapore Pte. Ltd.	Singapore
	3M Espana, S.L.	Spain
	3M Svenska Aktiebolag	Sweden
	3M EMEA GmbH	Switzerland
	3M Taiwan Limited	Taiwan
	3M Taiwan Optronics Corporation	Taiwan
	Alpha Beta Global Tapes and Adhesives Co., Ltd.	Taiwan
	3M Thailand Limited	Thailand
	3M Asia Pacific UK Holding Ltd	United Kingdom
	3M Products Limited	United Kingdom
	3M United Kingdom Public Limited Company	United Kingdom
	Capital Safety Acquisitions Limited	United Kingdom
	Capital Safety Global Holdings Limited	United Kingdom
	Scott Health & Safety Limited	United Kingdom

NOTE: Subsidiary companies excluded from the above listing, if considered in the aggregate, would not constitute a significant subsidiary.

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-30689, 333-30691, 333-44760, 333-73192, 333-101727, 333-109282, 333-128251, 333-130150, 333-151039, 333-156626, 333-156627, 333-166908, 333-181269, 333-181270, and 333-211431) and Form S-3 (Nos. 333-216219, 333-42660, and 333-109211) of 3M Company of our report dated February 6, 2020 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Minneapolis, Minnesota

February 6, 2020

EX-24

EXHIBIT 24

POWER OF ATTORNEY

Each of the undersigned Directors and the Principal Executive, Principal Financial and Principal Accounting Officers of 3M COMPANY, a Delaware corporation (the “Company”), hereby constitute and appoint Michael F. Roman, Nicholas C. Gangestad, Theresa E. Reinseth, Ivan K. Fong, and Sarah M. Grauze, and each of them, his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, for him or her and in his or her name, place and stead in any and all capacities, to sign one or more Annual Reports for the Company’s fiscal year ended December 31, 2019, on Form 10-K under the Securities Exchange Act of 1934, as amended, any amendments thereto, and all additional amendments thereto, each in such form as they or any one of them may approve, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done so that such Annual Report or Annual Reports shall comply with the Securities Exchange Act of 1934, as amended, and the applicable Rules and Regulations adopted or issued pursuant thereto, as fully and to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done by virtue hereof.

The undersigned have signed this Power of Attorney this 4th day of February 2020.

/s/ Michael F. Roman	/s/ Nicholas C. Gangestad
Michael F.  Roman,  Chairman of the Board and Chief Executive Officer (Principal Executive Officer and Director)	Nicholas C. Gangestad, Senior Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ Theresa E. Reinseth	/s/ Amy E. Hood
Theresa E. Reinseth, Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)	Amy E. Hood, Director
/s/ Thomas K. Brown	/s/ Muhtar Kent
Thomas K. Brown, Director	Muhtar Kent, Director
/s/ Pamela J. Craig	/s/ Edward M. Liddy
Pamela J. Craig, Director	Edward M. Liddy, Director
/s/ David B.  Dillon	/s/ Dambisa F. Moyo
David B. Dillon, Director	Dambisa F. Moyo, Director
/s/ Michael L. Eskew	/s/ Gregory R. Page
Michael L. Eskew, Director	Gregory R. Page, Director
/s/ Herbert L. Henkel	/s/ Patricia A. Woertz
Herbert L. Henkel, Director	Patricia A. Woertz, Director

EX-31.1

EXHIBIT 31.1

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Michael F.  Roman, certify that:

1.I have reviewed this annual report on Form 10-K of 3M Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Michael F.  Roman

Michael F.  Roman

Chief Executive Officer

February 6, 2020

EX-31.2

EXHIBIT 31.2

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Nicholas C. Gangestad, certify that:

1.I have reviewed this annual report on Form 10-K of 3M Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Nicholas C. Gangestad

Nicholas C. Gangestad

Chief Financial Officer

February 6, 2020

EX-32.1

EXHIBIT 32.1

SARBANES-OXLEY SECTION 906 CERTIFICATION

In connection with the Annual Report of 3M Company (the “Company”) on Form 10-K for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael F.  Roman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael F. Roman

Michael F. Roman

Chief Executive Officer

February 6, 2020

EX-32.2

EXHIBIT 32.2

SARBANES-OXLEY SECTION 906 CERTIFICATION

In connection with the Annual Report of 3M Company (the “Company”) on Form 10-K for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nicholas C. Gangestad, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Nicholas C. Gangestad

Nicholas C. Gangestad

Chief Financial Officer

February 6, 2020

EX-95

EXHIBIT 95

MINE SAFETY DISCLOSURES

For the year 2019, the Company has the following mine safety information to report in accordance with Section 1503(a) of the Act, in connection with the Pittsboro, North Carolina mine, the Little Rock, Arkansas mine, the Corona, California mine, and the Wausau, Wisconsin mine (including Greystone Plant):

										Received
									Received	Notice of
						Total Dollar Value			Notice of	Potential to			Aggregate
Mine or Operating			Section			of MSHA		Total Number	Pattern of	Have Pattern	Legal Actions	Aggregate	Legal Actions
Name/MSHA	Section 104	Section	104(d)	Section	Section	Assessments		of Mining	Violations	Under Section	Pending as of	Legal Actions	Resolved
Identification	S&S Citations	104(b)	Citations and	110(b)(2)	107(a)	Proposed		Related	Under Section	104(e)	Last Day of	Initiated During	During Period
Number	(#)	Orders (#)	Orders (#)	Violations (#)	Orders (#)	($)		Fatalities (#)	104(e) (yes/no)	(yes/no)	Period (#)	Period (#)	(#)
3M Pittsboro ID: 3102153	—	—	—	—	—	$	246	—	No	No	—
3M Little Rock ID: 0300426	—	—	—	—	—	$	3,312	—	No	No	—
3M Corona Plant ID: 0400191	3	—	—	—	—	$	4,719	—	No	No	—
Greystone Plant ID: 4700119	—	—	—	—	—	$	726	—	No	No	—
Wausau Plant ID: 4702918	—	—	—	—	—	$	1,657	—	No	No	—
Total	3	—	—	—	—	$	10,660	—			—	—	—

XML

Derivatives - Cash Flow Hedges (Details) - Cash flow hedge - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Derivatives in Cash Flow Hedging Relationships
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges		$ (31)
After-tax net unrealized gain (loss) anticipated to be reclassified from AOCI to the income statement within next twelve months		42
After-tax net unrealized gain (loss) anticipated to be reclassified from AOCI to the Income Statement in the next fiscal year		20
After-tax unrealized gain (loss) anticipated to be reclassified from AOCI to the Income Statement after the next fiscal year		$ (93)
Foreign currency forward/option contracts
Derivatives in Cash Flow Hedging Relationships
Maximum length of time hedged in cash flow hedge		36 months
Interest rate swap contracts
Derivatives in Cash Flow Hedging Relationships
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges		$ (112)
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges		(143)
Derivative notional amount			$ 1,200	$ 600	$ 200
Derivative notional amount			$ 700
Additional derivative notional		$ 743
Termination Of Derivative	$ 500

XML

Pension and Postretirement Benefit Plans - US Pension Weighted Averages and Expected Returns Information (Details) - Funded - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2020
Qualified and Non-qualified Pension Benefits
Benefit Plan Information
Company contributions	$ 207	$ 366
Qualified and Non-qualified Pension Benefits | Maximum
Asset Allocation assumption
Estimated pension contributions for next fiscal year				$ 200
Qualified and Non-qualified Pension Benefits | Minimum
Asset Allocation assumption
Estimated pension contributions for next fiscal year				$ 100
Postretirement Benefits
Benefit Plan Information
Company contributions	$ 3	$ 4
Weighted-average assumptions used to determine benefit obligations
Discount rate	3.27%	4.41%	3.79%
Percentage increase (decrease) in discount rate obligation from the prior year	(1.14%)
Weighted-average assumptions used to determine net cost for years ended
Discount rate - service cost	4.53%	3.86%	4.50%
Discount rate - interest cost	4.15%	3.52%	3.80%
Expected return on assets	6.43%	6.53%	6.48%
United States
Weighted-average assumptions used to determine benefit obligations
Original percentage medical inflation indexation by company in year	3.00%
Revised percentage medical inflation indexation by company in year	1.50%
United States | Qualified and Non-qualified Pension Benefits
Benefit Plan Information
Company contributions	$ 101	$ 254
Weighted-average assumptions used to determine benefit obligations
Discount rate	3.25%	4.36%	3.68%
Compensation rate increase	3.21%	4.10%	4.10%
Percentage increase (decrease) in discount rate obligation from the prior year	(1.11%)
Impact to the Projected Benefit Obligation (PBO) as a result of a change in discount rate	$ 2,000
Weighted-average assumptions used to determine net cost for years ended
Discount rate - service cost	4.44%	3.78%	4.42%
Discount rate - interest cost	4.02%	3.35%	3.61%
Expected return on assets	7.00%	7.25%	7.25%
Compensation rate increase	4.10%	4.10%	4.10%
International | Qualified and Non-qualified Pension Benefits
Benefit Plan Information
Company contributions	$ 106	$ 112
Weighted-average assumptions used to determine benefit obligations
Discount rate	1.81%	2.50%	2.41%
Compensation rate increase	2.88%	2.89%	2.89%
Weighted-average assumptions used to determine net cost for years ended
Discount rate - service cost	2.39%	2.27%	2.32%
Discount rate - interest cost	2.26%	2.14%	2.25%
Expected return on assets	4.90%	5.02%	5.16%
Compensation rate increase	2.89%	2.89%	2.90%
Qualified | United States | Qualified and Non-qualified Pension Benefits
Asset Allocation assumption
Rate of return on plan assets	16.30%	(0.50%)	12.40%
Average annual actual return on plan assets over the past 10 years	8.90%
Number years of used in the calculation of one average annual actual return on plan assets	10 years
Average annual actual return on plan assets over the past 25 years	9.40%
Number years of used in the calculation of a second average annual actual return on plan assets	25 years
Company's assumption for the expected return on plan assets
Expected return on assets for next fiscal year	6.75%
Qualified | United States | Qualified and Non-qualified Pension Benefits | Primary U.S. Qualified Pension Plan
Company's assumption for the expected return on plan assets
Expected return on assets	7.00%
Qualified | United States | Qualified and Non-qualified Pension Benefits | Global equity
Asset Allocation assumption
Asset allocation assumption for next fiscal year				23.00%
Qualified | United States | Qualified and Non-qualified Pension Benefits | Private equity
Asset Allocation assumption
Asset allocation assumption for next fiscal year				14.00%
Qualified | United States | Qualified and Non-qualified Pension Benefits | Fixed income
Asset Allocation assumption
Asset allocation assumption for next fiscal year				47.00%
Qualified | United States | Qualified and Non-qualified Pension Benefits | Absolute return
Asset Allocation assumption
Asset allocation assumption for next fiscal year				16.00%

XML

Pension and Postretirement Benefit Plans - Plan Amount Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) country plan	Dec. 31, 2018 USD ($)
Unfunded Plans
Benefit Plan Information
Maximum amount of certain nonqualified unfunded pension and postretirement benefit plans obligations not included in benefit obligation reconciliation | $	$ 40	$ 40
Qualified and Non-qualified Pension Benefits
Benefit Plan Information
Company-sponsored retirement plans, minimum number of worldwide plans | plan	75
Company-sponsored retirement plans, number of countries | country	28
Qualified and Non-qualified Pension Benefits | International
Benefit Plan Information
Company-sponsored retirement plans, minimum number of international plans | plan	70
Company-sponsored retirement plans, number of countries | country	25

XML

Marketable Securities and Held-to-Maturity Debt Securities

12 Months Ended

Dec. 31, 2019

Marketable Securities and Held-to-Maturity Debt Securities

Marketable Securities and Held-to-Maturity Debt Securities

NOTE 11. Marketable Securities and Held-to-Maturity Debt Securities

Marketable Securities

The Company invests in asset-backed securities, certificates of deposit/time deposits, commercial paper, and other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current).

(Millions)	December 31, 2019		December 31, 2018
Commercial paper	$	85	$	366
Certificates of deposit/time deposits		10		10
U.S. municipal securities		3		3
Asset-backed securities		—		1
Current marketable securities	$	98	$	380
U.S. municipal securities	$	43	$	37
Non-current marketable securities	$	43	$	37
Total marketable securities	$	141	$	417

At December 31, 2019 and 2018, gross unrealized, gross realized, and net realized gains and/or losses (pre-tax) were not material.

The balance at December 31, 2019, for marketable securities by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

(Millions)	December 31, 2019
Due in one year or less	$	98
Due after one year through five years		14
Due after five years through ten years		20
Due after ten years		9
Total marketable securities	$	141

Held-to-Maturity Debt Securities

In connection with the in-substance debt defeasance of the Third Lien Notes described in Note 12, the Company purchased a $0.5 billion U.S. Treasury security in the fourth quarter of 2019 that matures in the second quarter of 2020 and transferred it to a trust with irrevocable instructions to use the proceeds from its maturity to satisfy the redemption of the Third Lien Notes in May 2020. This debt security is considered held-to-maturity due to the restrictions in satisfying and discharging the Third Lien Notes, is carried at amortized cost, and is reflected in other current assets on the Company’s consolidated balance sheet. At December 31, 2019, the difference between the amortized cost of the U.S. Treasury security and its fair value was not material.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Fair Value Measurements

NOTE 15. Fair Value Measurements

3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Refer to Note 1 for additional details.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis:

For 3M, assets and liabilities that are measured at fair value on a recurring basis primarily relate to available-for-sale marketable securities and certain derivative instruments. Derivatives include cash flow hedges, interest rate swaps and net investment hedges. The information in the following paragraphs and tables primarily addresses matters relative to these financial assets and liabilities. Separately, there were no material fair value measurements with respect to nonfinancial assets or liabilities that are recognized or disclosed at fair value in the Company’s financial statements on a recurring basis for 2019 and 2018.

3M uses various valuation techniques, which are primarily based upon the market and income approaches, with respect to financial assets and liabilities. Following is a description of the valuation methodologies used for the respective financial assets and liabilities measured at fair value.

Available-for-sale marketable securities — except certain U.S. municipal securities:

Marketable securities, except certain U.S. municipal securities, are valued utilizing multiple sources. A weighted average price is used for these securities. Market prices are obtained for these securities from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple prices are used as inputs into a distribution-curve-based algorithm to determine the daily fair value to be used. 3M classifies U.S. treasury securities as level 1, while all other marketable securities (excluding certain U.S. municipal securities) are classified as level 2. Marketable securities are discussed further in Note 11.

Available-for-sale marketable securities —certain U.S. municipal securities only:

3M holds municipal securities with certain cities in the United States as of December 31, 2019. Due to the nature of these securities, the valuation method utilized includes referencing the carrying value of the corresponding finance lease obligation as adjusted for additional issuances when 3M sells its assets to the municipality and decreases in the form of bond amortization payments, and as such will be classified as level 3 securities separately. Refer to Note 9 for additional discussion of the non-cash nature of these securities.

Investments:

Investments include equity securities that are traded in an active market. Closing stock prices are readily available from active markets and are representative of fair value. 3M classifies these securities as Level 1. Investments are included within other assets on the Company’s consolidated balance sheet.

Derivative instruments:

The Company’s derivative assets and liabilities within the scope of ASC 815, Derivatives and Hedging, are required to be recorded at fair value. The Company’s derivatives that are recorded at fair value include foreign currency forward and option contracts, commodity price swaps, interest rate swaps, and net investment hedges where the hedging instrument is recorded at fair value. Net investment hedges that use foreign currency denominated debt to hedge 3M’s net investment are not impacted by the fair value measurement standard under ASC 820, as the debt used as the hedging instrument is marked to a value with respect to changes in spot foreign currency exchange rates and not with respect to other factors that may impact fair value.

3M has determined that foreign currency forwards, commodity price swaps, currency swaps, foreign currency options, interest rate swaps and cross-currency swaps will be considered level 2 measurements. 3M uses inputs other than quoted prices that are observable for the asset. These inputs include foreign currency exchange rates, volatilities, and interest rates. Derivative positions are primarily valued using standard calculations/models that use as their basis readily observable market parameters. Industry standard data providers are 3M’s primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third-party or counterparty quotes and a net present value stream of cash flows model.

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis.

			Fair Value Measurements
Description	Fair Value at		Using Inputs Considered as
(Millions)	December 31, 2019		Level 1		Level 2		Level 3
Assets:
Available-for-sale:
Marketable securities:
Commercial paper	$	85	$	—	$	85	$	—
Certificates of deposit/time deposits		10		—		10		—
U.S. municipal securities		46		—		—		46
Investments		25		25		—		—
Derivative instruments — assets:
Foreign currency forward/option contracts		125		—		125		—
Interest rate swap contracts		17		—		17		—
Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts		20		—		20		—

			Fair Value Measurements
Description	Fair Value at		Using Inputs Considered as
(Millions)	December 31, 2018		Level 1		Level 2		Level 3
Assets:
Available-for-sale:
Marketable securities:
Commercial paper	$	366	$	—	$	366	$	—
Certificates of deposit/time deposits		10		—		10		—
Asset-backed securities		1		—		1		—
U.S. municipal securities		40		—		—		40
Derivative instruments — assets:
Foreign currency forward/option contracts		127		—		127		—
Interest rate swap contracts		19		—		19		—
Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts		22		—		22		—
Interest rate swap contracts		31		—		31		—

The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the table above that used significant unobservable inputs (level 3).

Marketable securities — certain U.S. municipal securities only
(Millions)	2019		2018		2017
Beginning balance	$	40	$	30	$	20
Total gains or losses:
Included in earnings		—		—		—
Included in other comprehensive income		—		—		—
Purchases and issuances		9		13		13
Sales and settlements		(3)		(3)		(3)
Transfers in and/or out of level 3		—		—		—
Ending balance		46		40		30
Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period		—		—		—

In addition, the plan assets of 3M’s pension and postretirement benefit plans are measured at fair value on a recurring basis (at least annually). Refer to Note 13.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis:

Disclosures are required for certain assets and liabilities that are measured at fair value, but are recognized and disclosed at fair value on a nonrecurring basis in periods subsequent to initial recognition. For 3M, such measurements of fair value relate primarily to long-lived asset impairments and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used. During 2017, the Company recognized approximately $61 million in long-lived asset impairments within its Safety and Industrial and Transportation and Electronics business segments, with the complete carrying amount of such assets written off and included in operating income results. There were no material long-lived asset impairments for 2018 and 2019. There were no material adjustments to equity securities using the measurement alternative for 2019.

Fair Value of Financial Instruments:

The Company’s financial instruments include cash and cash equivalents, marketable securities, held-to-maturity debt securities, accounts receivable, certain investments, accounts payable, borrowings, and derivative contracts. The fair values of cash equivalents, accounts receivable, held-to-maturity debt securities, accounts payable, and short-term borrowings and current portion of long-term debt approximated carrying values because of the short-term nature of these instruments. Available-for-sale marketable securities, in addition to certain derivative instruments, are recorded at fair values as indicated in the preceding disclosures. To estimate fair values (classified as level 2) for its long-term debt, the Company utilized third-party quotes, which are derived all or in part from model prices, external sources, market prices, or the third-party’s internal records. Information with respect to the carrying amounts and estimated fair values of these financial instruments follow:

	December 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(Millions)	Value		Value		Value		Value
Long-term debt, excluding current portion	$	17,518	$	18,475	$	13,411	$	13,586

The fair values reflected above consider the terms of the related debt absent the impacts of derivative/hedging activity. The carrying amount of long-term debt referenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair value hedges and by the designation of certain fixed rate Eurobond securities issued by the Company as hedging instruments of the Company’s net investment in its European subsidiaries. A number of 3M’s fixed-rate bonds were trading at a premium at December 31, 2019 and 2018 due to the lower interest rates and tighter credit spreads compared to issuance levels.

XML

Consolidated Statement of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash Flows from Operating Activities
Net income including noncontrolling interest	$ 4,582	$ 5,363	$ 4,869
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities
Depreciation and amortization	1,593	1,488	1,544
Company pension and postretirement contributions	(210)	(370)	(967)
Company pension and postretirement expense	357	410	334
Stock-based compensation expense	278	302	324
Gain on sale of businesses	(111)	(545)	(586)
Deferred income taxes	(273)	(57)	107
Loss on deconsolidation of Venezuelan subsidiary	162
Changes in assets and liabilities
Accounts receivable	345	(305)	(245)
Inventories	370	(509)	(387)
Accounts payable	(117)	408	24
Accrued income taxes (current and long-term)	205	134	967
Other - net	(111)	120	256
Net cash provided by (used in) operating activities	7,070	6,439	6,240
Cash Flows from Investing Activities
Purchases of property, plant and equipment (PP&E)	(1,699)	(1,577)	(1,373)
Proceeds from sale of PP&E and other assets	123	262	49
Acquisitions, net of cash acquired	(4,984)	13	(2,023)
Purchases of marketable securities and investments	(1,635)	(1,828)	(2,152)
Proceeds from maturities and sale of marketable securities and investments	1,443	2,497	1,354
Proceeds from sale of businesses, net of cash sold	236	846	1,065
Other - net	72	9	(6)
Net cash provided by (used in) investing activities	(6,444)	222	(3,086)
Cash Flows from Financing Activities
Change in short-term debt - net	(316)	(284)	578
Repayment of debt (maturities greater than 90 days)	(2,716)	(1,034)	(962)
Proceeds from debt (maturities greater than 90 days)	6,281	2,251	1,987
Purchases of treasury stock	(1,407)	(4,870)	(2,068)
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans	547	485	734
Dividends paid to shareholders	(3,316)	(3,193)	(2,803)
Other - net	(197)	(56)	(121)
Net cash provided by (used in) financing activities	(1,124)	(6,701)	(2,655)
Effect of exchange rate changes on cash and cash equivalents	(2)	(160)	156
Net increase (decrease) in cash and cash equivalents	(500)	(200)	655
Cash and cash equivalents at beginning of year	2,853	3,053	2,398
Cash and cash equivalents at end of period	$ 2,353	$ 2,853	$ 3,053

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Fair Value Measurements - Nonrecurring Basis (Details) - Fair value on a nonrecurring basis - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assets and Liabilities Measured on Recurring or Nonrecurring Basis
Impairment of long-lived asset	$ 0	$ 0
Safety and Industrial and Transportation and Electronics business segments
Assets and Liabilities Measured on Recurring or Nonrecurring Basis
Impairment of long-lived asset			$ 61,000,000

XML

Document and Entity Information - USD ($) shares in Millions, $ in Billions	12 Months Ended
	Dec. 31, 2019	Jan. 31, 2020	Jun. 30, 2019
Document Information
Entity Registrant Name	3M CO
Entity Central Index Key	0000066740
Document Type	10-K
Document Transition Report	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity File Number	1-3285
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-0417775
Entity Address, Address Line One	3M Center
Entity Address, City or Town	St. Paul
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55144
City Area Code	651
Local Phone Number	733-1110
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float		$ 91.3	$ 99.7
Entity Common Stock, Shares Outstanding		575.6
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Common Stock | New York Stock Exchange, Inc.
Document Information
Title of 12(b) Security	Common Stock, Par Value $.01 Per Share
Trading Symbol	MMM
Security Exchange Name	NYSE
Common Stock | Chicago Stock Exchange, Inc.
Document Information
Title of 12(b) Security	Common Stock, Par Value $.01 Per Share
Trading Symbol	MMM
Security Exchange Name	CHX
1.500% Notes due 2026 | New York Stock Exchange, Inc.
Document Information
Title of 12(b) Security	1.500% Notes due 2026
Trading Symbol	MMM26
Security Exchange Name	NYSE
Floating Rate Notes due 2020 | New York Stock Exchange, Inc.
Document Information
Title of 12(b) Security	Floating Rate Notes due 2020
No Trading Symbol Flag	true
0.375% Notes due 2022 | New York Stock Exchange, Inc.
Document Information
Title of 12(b) Security	0.375% Notes due 2022
Trading Symbol	MMM22A
Security Exchange Name	NYSE
0.950% Notes due 2023 | New York Stock Exchange, Inc.
Document Information
Title of 12(b) Security	0.950% Notes due 2023
Trading Symbol	MMM23
Security Exchange Name	NYSE
1.750% Notes due 2030 | New York Stock Exchange, Inc.
Document Information
Title of 12(b) Security	1.750% Notes due 2030
Trading Symbol	MMM30
Security Exchange Name	NYSE
1.500% Notes due 2031 | New York Stock Exchange, Inc.
Document Information
Title of 12(b) Security	1.500% Notes due 2031
Trading Symbol	MMM31
Security Exchange Name	NYSE

XML

Business Segments and Geographic Information

12 Months Ended

Dec. 31, 2019

Business Segments and Geographic Information

Business Segments and Geographic Information

NOTE 19. Business Segments and Geographic Information

3M’s businesses are organized, managed and internally grouped into segments based on differences in markets, products, technologies and services. 3M manages its operations in four business segments: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. 3M’s four business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income information shown. The difference between operating income and pre-tax income relates to other expense (income), which is not allocated to business segments. Further information about which is included in Note 6.

Effective in the second quarter of 2019, to enable the Company to better serve global customers and markets, the Company made the following changes to its business segments:

Realignment of the Company’s business segments from five to four

The Company realigned its former five business segments into four: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. Existing divisions were largely realigned to this new structure. In addition, certain retail auto care product lines formerly in the Automotive Aftermarket Division (now within the Safety and Industrial business segment) were moved to the Construction and Home Improvement Division (within the Consumer business segment). Also, product lines relating to the refrigeration filtration business, formerly included in the Separation and Purification Sciences Division (now within the Health Care business segment) were moved to Other Safety and Industrial (within the Safety and Industrial business segment). 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. Dual credit, which is

based on which business segment provides customer account activity with respect to a particular product sold in a specific country, was reduced as a result of the closer alignment between customer account activity and their respective markets. The four business segments are as follows:

Safety and Industrial: This segment includes businesses that serve the global industrial, electrical and safety markets. This business segment consists of personal safety, industrial adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket, and roofing granules. This segment also includes the Communication Markets Division (which was substantially sold in 2018) and the refrigeration filtration product lines (within Other Safety and Industrial).

Transportation and Electronics: This segment includes businesses that serve global transportation and electronic original equipment manufacturer (OEM) customers. This business segment consists of electronics (display materials and systems, electronic materials solutions), automotive and aerospace, commercial solutions, advanced materials, and transportation safety.

Health Care: This business segment serves the global healthcare industry and includes medical solutions, oral care, separation and purification sciences, health information systems, drug delivery systems, and food safety.

Consumer: This business serves global consumers and consists of home improvement, stationery and office supplies, home care, and consumer health care. This segment also includes, within the Construction and Home Improvement Division, certain retail auto care product lines.

In addition, as part of 3M’s continuing effort to improve the alignment of its businesses around markets and customers, the Company made the following changes, effective in the first quarter of 2019, and other revisions impacting business segment reporting:

Continued alignment of customer account activity

● As part of 3M’s regular customer-focus initiatives, the Company realigned certain customer account activity (“sales district”) to correlate with the primary divisional product offerings in various countries and reduce complexity for customers when interacting with multiple 3M businesses. This largely impacted the amount of dual credit certain business segments receive as a result of sales district attribution. 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. This dual credit is based on which business segment provides customer account activity with respect to a particular product sold in a specific country.

Creation of Closure and Masking Systems Division and Medical Solutions Division

● 3M created the Closure and Masking Systems Division, which combines the masking tape, packaging tape and personal care portfolios formerly within Industrial Adhesives and Tapes Division in the former Industrial business segment into a separate division also within the former Industrial business segment. 3M created the Medical Solutions Division in the Health Care business segment, which combines the former Critical and Chronic Care Division and Infection Prevention Division (which were also both within the Health Care business segment).

Additional actions impacting business segment reporting

● The business associated with certain safety products sold through retail channels in the Asia Pacific region was realigned from the Personal Safety Division within the former Safety and Graphics business segment to the Construction and Home Improvement Division within the Consumer business segment. In addition, certain previously non-allocated costs related to manufacturing and technology of centrally managed material resource centers of expertise within Corporate and Unallocated are now reflected as being allocated to the business segments.

The financial information presented herein reflects the impact of the preceding business segment reporting changes for all periods presented.

Business Segment Products

Business Segment	Major Products
Safety and Industrial	Tapes, coated, nonwoven and bonded abrasives, adhesives, sealants, specialty materials, closure systems for personal hygiene products, abrasion-resistant films, structural adhesives, infrastructure protection products, renewable energy component solutions, roofing granules for asphalt shingles, personal protection products, fall protection products, and self-contained breathing apparatus systems
Transportation and Electronics	Optical film solutions for electronic displays, packaging and interconnection devices, insulating and splicing solutions for the electronics and electrical industries, touch screens and touch monitors, acoustic systems products, automotive components, advanced ceramics, commercial graphics systems, commercial cleaning and protection products, and transportation safety products
Health Care	Medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental and orthodontic products, health information systems, filtration products, and food safety products
Consumer	Consumer and office tapes and adhesives, repositionable notes, indexing systems, home improvement products, furnace filters, painter tapes, mounting products, home care products, sponges, scouring pads, high-performance clothes, protective material products, paint finishing and detailing products, and adhesive bandages and braces

Business Segment Information

	Net Sales						Operating Income
(Millions)	2019		2018		2017		2019		2018		2017
Safety and Industrial	$	11,607	$	12,494	$	11,946	$	2,648	$	3,423	$	2,603
Transportation and Electronics		9,602		10,106		9,861		2,221		2,649		2,986
Health Care		7,431		6,826		6,635		1,863		1,921		1,877
Consumer		5,089		5,086		5,006		1,105		1,071		1,051
Corporate and Unallocated		110		50		2		(1,243)		(1,409)		(367)
Elimination of Dual Credit		(1,703)		(1,797)		(1,793)		(420)		(448)		(458)
Total Company	$	32,136	$	32,765	$	31,657	$	6,174	$	7,207	$	7,692

	Assets						Depreciation & Amortization						Capital Expenditures
(Millions)	2019		2018		2017		2019		2018		2017		2019		2018		2017
Safety and Industrial	$	12,593	$	13,086	$	13,560	$	682	$	528	$	424	$	391	$	375	$	255
Transportation and Electronics		7,611		7,773		7,786		324		337		437		390		339		382
Health Care		15,210		7,092		7,258		277		216		257		264		245		217
Consumer		2,792		2,963		2,909		91		97		117		130		115		110
Corporate and Unallocated		6,453		5,586		6,474		219		310		309		524		503		409
Total Company	$	44,659	$	36,500	$	37,987	$	1,593	$	1,488	$	1,544	$	1,699	$	1,577	$	1,373

Corporate and unallocated operating income includes a variety of miscellaneous items, such as corporate investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension, stock-based compensation) that the Company may choose not to allocate directly to its business segments. Corporate and Unallocated also includes sales, costs, and income from contract manufacturing, transition services and other arrangements with the acquirer of all of the Communication Markets Division following its divestiture in 2018. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

3M business segment reporting measures include dual credit to business segments for certain sales and related operating income. Management evaluates each of its four business segments based on net sales and operating income performance, including dual credit reporting to further incentivize sales growth. As a result, 3M reflects additional (“dual”) credit to another business segment when the customer account activity (“sales district”) with respect to the particular product sold to the external customer is provided by a different business segment. This additional dual credit is largely reflected at the division level. For example, privacy screen protection products are primarily sold by the Display Materials and Systems Division within the Transportation and Electronics business

segment; however, certain sales districts within the Consumer business segment provide the customer account activity for sales of the product to particular customers. In this example, the non-primary selling segment (Consumer) would also receive credit for the associated net sales initiated through its sales district and the related approximate operating income. The assigned operating income related to dual credit activity may differ from operating income that would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is reflected as a reconciling item entitled “Elimination of Dual Credit,” such that sales and operating income in total are unchanged.

Geographic Information

Geographic area information is used by the Company as a secondary performance measure to manage its businesses. Export sales and certain income and expense items are generally reported within the geographic area where the final sales to 3M customers are made.

							Property, Plant and
	Net Sales						Equipment - net
(Millions)	2019		2018		2017		2019		2018
United States	$	13,159	$	12,840	$	12,372	$	5,442	$	4,915
Asia Pacific		9,796		10,254		9,809		1,637		1,624
Europe, Middle East and Africa		6,226		6,654		6,456		1,823		1,751
Latin America and Canada		2,965		3,024		3,033		431		448
Other Unallocated		(10)		(7)		(13)		—		—
Total Company	$	32,136	$	32,765	$	31,657	$	9,333	$	8,738

Asia Pacific included China/Hong Kong net sales to customers of $3.337 billion, $3.574 billion and $3.255 billion in 2019, 2018, and 2017, respectively. China/Hong Kong net property, plant and equipment (PP&E) was $553 million and $542 million at December 31, 2019 and 2018, respectively.

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Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Consolidated Balance Sheet
Allowances for doubtful accounts receivable	$ 161	$ 95
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued (in shares)	944,033,056	944,033,056
Common stock, Shares outstanding (in shares)	575,184,835	576,575,168

XML

Commitments and Contingencies - Respirator (Details)	1 Months Ended		12 Months Ended
	Mar. 31, 2019 USD ($)	Apr. 30, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) claim	Dec. 31, 2019 USD ($) lawsuit	Dec. 31, 2019 USD ($) individual	Dec. 31, 2019 USD ($)	Dec. 31, 2018 individual
Respirator Mask/Asbestos Litigation
Loss contingencies
Total number of named claimants | individual						1,727		2,320
Number of years company has been the defendant in Respirator Mask/Asbestos Litigation			20 years
Number of total claims the Company prevailed after being taken to trial				14	2
Number of total claims taken to trial | claim				15
Insurance receivables			$ 4,000,000	$ 4,000,000	$ 4,000,000	$ 4,000,000	$ 4,000,000
Respirator Mask/Asbestos Litigation | State court of California
Loss contingencies
Number of total claims the Company prevailed after being taken to trial | lawsuit					1
Respirator Mask/Asbestos Litigation | State court of Kentucky
Loss contingencies
Litigation settlement awarded		$ 2,000,000
Number of unnamed defendant | individual						2
Amount of punitive damages awarded		$ 63,000,000
Respirator Mask/Asbestos Litigation | Kentucky and West Virginia
Loss contingencies
Settlement amount paid	$ 340,000,000
Respirator Mask/Asbestos Litigation - State of West Virginia
Loss contingencies
Number of additional defendants			two
Accrued loss contingency reserve			$ 0	0	$ 0	$ 0	0
Respirator Mask/Asbestos litigation - Excluding Aearo Technologies
Loss contingencies
Increase in liabilities, gross	$ 313,000,000						337,000,000
Payments for fees and settlements related to litigation							402,000,000
Accrued loss contingency reserve			608,000,000	608,000,000	608,000,000	608,000,000	608,000,000
Respirator Mask/Asbestos Litigation - Aearo Technologies
Loss contingencies
Accrued loss contingency reserve			$ 50,000,000	$ 50,000,000	$ 50,000,000	$ 50,000,000	50,000,000
Increase (decrease) accrued loss contingency reserve							22,000,000
Quarterly fee paid to Cabot to retain responsibility and liability for products manufactured before July 11, 1995							$ 100,000

XML

Quarterly Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Data (Unaudited)

Schedule of Quarterly Financial Information

(Millions, except per-share amounts)	First		Second		Third		Fourth		Year
2019	Quarter		Quarter		Quarter		Quarter		2019
Net sales	$	7,863	$	8,171	$	7,991	$	8,111	$	32,136
Cost of sales		4,310		4,313		4,188		4,325		17,136
Net income including noncontrolling interest		893		1,131		1,588		970		4,582
Net income attributable to 3M		891		1,127		1,583		969		4,570
Earnings per share attributable to 3M common shareholders - basic		1.54		1.95		2.75		1.68		7.92
Earnings per share attributable to 3M common shareholders - diluted		1.51		1.92		2.72		1.66		7.81

(Millions, except per-share amounts)	First		Second		Third		Fourth		Year
2018	Quarter		Quarter		Quarter		Quarter		2018
Net sales	$	8,278	$	8,390	$	8,152	$	7,945	$	32,765
Cost of sales		4,236		4,227		4,159		4,060		16,682
Net income including noncontrolling interest		606		1,862		1,546		1,349		5,363
Net income attributable to 3M		602		1,857		1,543		1,347		5,349
Earnings per share attributable to 3M common shareholders - basic		1.01		3.14		2.64		2.32		9.09
Earnings per share attributable to 3M common shareholders - diluted		0.98		3.07		2.58		2.27		8.89

XML

Business Segments and Geographic Information (Details) - segment	3 Months Ended	9 Months Ended
	Mar. 31, 2019	Dec. 31, 2019
Business Segments and Geographic Information
Number of business segments	5	4

XML

Stock-Based Compensation - Compensation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Amounts recognized in the financial statements
Stock-based compensation programs expense	$ 278	$ 302	$ 324
Income tax benefits	(141)	(154)	(327)
Stock-based compensation expenses (benefits), net of tax	137	148	(3)
ASU 2016-09 Improvements to Employee Share-Based Payment Accounting
Amounts recognized in the financial statements
Income tax benefits	(89)	(100)	(228)
Cost of sales
Amounts recognized in the financial statements
Stock-based compensation programs expense	47	48	49
Selling, general and administrative expenses
Amounts recognized in the financial statements
Stock-based compensation programs expense	185	207	229
Research, development and related expenses
Amounts recognized in the financial statements
Stock-based compensation programs expense	$ 46	$ 47	$ 46

XML

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Fair Value, Assets and Liabilities Measured on Recurring Basis

			Fair Value Measurements
Description	Fair Value at		Using Inputs Considered as
(Millions)	December 31, 2019		Level 1		Level 2		Level 3
Assets:
Available-for-sale:
Marketable securities:
Commercial paper	$	85	$	—	$	85	$	—
Certificates of deposit/time deposits		10		—		10		—
U.S. municipal securities		46		—		—		46
Investments		25		25		—		—
Derivative instruments — assets:
Foreign currency forward/option contracts		125		—		125		—
Interest rate swap contracts		17		—		17		—
Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts		20		—		20		—

			Fair Value Measurements
Description	Fair Value at		Using Inputs Considered as
(Millions)	December 31, 2018		Level 1		Level 2		Level 3
Assets:
Available-for-sale:
Marketable securities:
Commercial paper	$	366	$	—	$	366	$	—
Certificates of deposit/time deposits		10		—		10		—
Asset-backed securities		1		—		1		—
U.S. municipal securities		40		—		—		40
Derivative instruments — assets:
Foreign currency forward/option contracts		127		—		127		—
Interest rate swap contracts		19		—		19		—
Liabilities:
Derivative instruments — liabilities:
Foreign currency forward/option contracts		22		—		22		—
Interest rate swap contracts		31		—		31		—

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

Marketable securities — certain U.S. municipal securities only
(Millions)	2019		2018		2017
Beginning balance	$	40	$	30	$	20
Total gains or losses:
Included in earnings		—		—		—
Included in other comprehensive income		—		—		—
Purchases and issuances		9		13		13
Sales and settlements		(3)		(3)		(3)
Transfers in and/or out of level 3		—		—		—
Ending balance		46		40		30
Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period		—		—		—

Fair Value of Financial Instruments by Balance Sheet Grouping

	December 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(Millions)	Value		Value		Value		Value
Long-term debt, excluding current portion	$	17,518	$	18,475	$	13,411	$	13,586

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Marketable Securities and Held-to-Maturity Debt Securities (Tables)

12 Months Ended

Dec. 31, 2019

Marketable Securities and Held-to-Maturity Debt Securities

Schedule of marketable securities

(Millions)	December 31, 2019		December 31, 2018
Commercial paper	$	85	$	366
Certificates of deposit/time deposits		10		10
U.S. municipal securities		3		3
Asset-backed securities		—		1
Current marketable securities	$	98	$	380
U.S. municipal securities	$	43	$	37
Non-current marketable securities	$	43	$	37
Total marketable securities	$	141	$	417

Marketable securities by contractual maturity

(Millions)	December 31, 2019
Due in one year or less	$	98
Due after one year through five years		14
Due after five years through ten years		20
Due after ten years		9
Total marketable securities	$	141

XML

Long-Term Debt and Short-Term Borrowings - Short-Term Borrowings and Current Portion of Long-Term Debt (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Long-Term Debt
Total long-term debt	$ 19,359	$ 14,156
Short-Term Borrowings and Current Portion of Long-Term Debt
Short-term borrowings and current portion of long-term debt	$ 2,795	1,211
Japan subsidiary credit facility
Long-Term Debt
Interest rate - effective	0.13%
Short-Term Borrowings and Current Portion of Long-Term Debt
Short-term borrowings and current portion of long-term debt	$ 632
Germany subsidiary credit facility
Long-Term Debt
Interest rate - effective	0.25%
Short-Term Borrowings and Current Portion of Long-Term Debt
Short-term borrowings and current portion of long-term debt	$ 168
Current portion of long-term debt
Long-Term Debt
Interest rate - effective	3.85%
Total long-term debt	$ 1,841	745
Commercial paper
Long-Term Debt
Interest rate - effective	1.61%
Short-Term Borrowings and Current Portion of Long-Term Debt
Short-term borrowings and current portion of long-term debt	$ 150	435
Other borrowings
Long-Term Debt
Interest rate - effective	4.85%
Short-Term Borrowings and Current Portion of Long-Term Debt
Short-term borrowings and current portion of long-term debt	$ 4	$ 31

XML

Revenue - Disaggregated Revenue (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue
Net Sales	$ 8,111	$ 7,991	$ 8,171	$ 7,863	$ 7,945	$ 8,152	$ 8,390	$ 8,278	$ 32,136	$ 32,765
Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											$ 31,657
Corporate and Unallocated
Disaggregation of Revenue
Net Sales									110	50
Corporate and Unallocated | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2
Elimination of Dual Credit
Disaggregation of Revenue
Net Sales									(1,703)	(1,797)
Elimination of Dual Credit | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(1,793)
Safety and Industrial
Disaggregation of Revenue
Net Sales									11,607	12,494
Safety and Industrial | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											11,946
Safety and Industrial | Abrasives
Disaggregation of Revenue
Net Sales									1,414	1,533
Safety and Industrial | Abrasives | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,498
Safety and Industrial | Automotive Aftermarket
Disaggregation of Revenue
Net Sales									1,243	1,374
Safety and Industrial | Automotive Aftermarket | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,388
Safety and Industrial | Closure and Masking Systems
Disaggregation of Revenue
Net Sales									1,111	1,224
Safety and Industrial | Closure and Masking Systems | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,259
Safety and Industrial | Communication Markets
Disaggregation of Revenue
Net Sales										175
Safety and Industrial | Communication Markets | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											387
Safety and Industrial | Electrical Markets
Disaggregation of Revenue
Net Sales									1,200	1,243
Safety and Industrial | Electrical Markets | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,196
Safety and Industrial | Industrial Adhesives and Tapes
Disaggregation of Revenue
Net Sales									2,737	2,880
Safety and Industrial | Industrial Adhesives and Tapes | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,773
Safety and Industrial | Personal Safety
Disaggregation of Revenue
Net Sales									3,508	3,606
Safety and Industrial | Personal Safety | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,960
Safety and Industrial | Roofing Granules
Disaggregation of Revenue
Net Sales									366	353
Safety and Industrial | Roofing Granules | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											372
Safety and Industrial | Other Safety and Industrial
Disaggregation of Revenue
Net Sales									28	106
Safety and Industrial | Other Safety and Industrial | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											113
Transportation and Electronics
Disaggregation of Revenue
Net Sales									9,602	10,106
Transportation and Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											9,861
Transportation and Electronics | Advanced Materials
Disaggregation of Revenue
Net Sales									1,246	1,236
Transportation and Electronics | Advanced Materials | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,123
Transportation and Electronics | Automotive and Aerospace
Disaggregation of Revenue
Net Sales									1,943	2,109
Transportation and Electronics | Automotive and Aerospace | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,047
Transportation and Electronics | Commercial Solutions
Disaggregation of Revenue
Net Sales									1,760	1,829
Transportation and Electronics | Commercial Solutions | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,743
Transportation and Electronics | Electronics
Disaggregation of Revenue
Net Sales									3,710	3,965
Transportation and Electronics | Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											3,842
Transportation and Electronics | Transportation Safety
Disaggregation of Revenue
Net Sales									949	957
Transportation and Electronics | Transportation Safety | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,103
Transportation and Electronics | Other Transportation and Electronics
Disaggregation of Revenue
Net Sales									(6)	10
Transportation and Electronics | Other Transportation and Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											3
Health Care
Disaggregation of Revenue
Net Sales									7,431	6,826
Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											6,635
Health Care | Drug Delivery
Disaggregation of Revenue
Net Sales									406	444
Health Care | Drug Delivery | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											486
Health Care | Food Safety
Disaggregation of Revenue
Net Sales									341	328
Health Care | Food Safety | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											303
Health Care | Health Information Systems
Disaggregation of Revenue
Net Sales									1,177	837
Health Care | Health Information Systems | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											791
Health Care | Medical Solutions
Disaggregation of Revenue
Net Sales									3,406	3,036
Health Care | Medical Solutions | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,934
Health Care | Oral Care
Disaggregation of Revenue
Net Sales									1,321	1,353
Health Care | Oral Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,322
Health Care | Separation and Purification Sciences
Disaggregation of Revenue
Net Sales									790	822
Health Care | Separation and Purification Sciences | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											797
Health Care | Other Health Care
Disaggregation of Revenue
Net Sales									(10)	6
Health Care | Other Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2
Consumer
Disaggregation of Revenue
Net Sales									5,089	5,086
Consumer | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											5,006
Consumer | Consumer Health Care
Disaggregation of Revenue
Net Sales									383	391
Consumer | Consumer Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											425
Consumer | Home Care
Disaggregation of Revenue
Net Sales									991	1,012
Consumer | Home Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,028
Consumer | Home Improvement
Disaggregation of Revenue
Net Sales									2,305	2,233
Consumer | Home Improvement | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,118
Consumer | Stationery and Office
Disaggregation of Revenue
Net Sales									1,373	1,396
Consumer | Stationery and Office | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,386
Consumer | Other Consumer
Disaggregation of Revenue
Net Sales									37	54
Consumer | Other Consumer | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											49
United States
Disaggregation of Revenue
Net Sales									13,159	12,840
United States | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											12,372
United States | Corporate and Unallocated
Disaggregation of Revenue
Net Sales									100	48
United States | Corporate and Unallocated | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											6
United States | Elimination of Dual Credit
Disaggregation of Revenue
Net Sales									(604)	(619)
United States | Elimination of Dual Credit | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(591)
United States | Safety and Industrial
Disaggregation of Revenue
Net Sales									4,643	4,921
United States | Safety and Industrial | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											4,605
United States | Transportation and Electronics
Disaggregation of Revenue
Net Sales									2,304	2,406
United States | Transportation and Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,372
United States | Health Care
Disaggregation of Revenue
Net Sales									3,597	3,039
United States | Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											3,037
United States | Consumer
Disaggregation of Revenue
Net Sales									3,119	3,045
United States | Consumer | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,943
Asia Pacific
Disaggregation of Revenue
Net Sales									9,796	10,254
Asia Pacific | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											9,809
Asia Pacific | Corporate and Unallocated | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(1)
Asia Pacific | Elimination of Dual Credit
Disaggregation of Revenue
Net Sales									(783)	(838)
Asia Pacific | Elimination of Dual Credit | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(874)
Asia Pacific | Safety and Industrial
Disaggregation of Revenue
Net Sales									2,877	3,099
Asia Pacific | Safety and Industrial | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,981
Asia Pacific | Transportation and Electronics
Disaggregation of Revenue
Net Sales									5,228	5,514
Asia Pacific | Transportation and Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											5,328
Asia Pacific | Health Care
Disaggregation of Revenue
Net Sales									1,490	1,458
Asia Pacific | Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,346
Asia Pacific | Consumer
Disaggregation of Revenue
Net Sales									984	1,021
Asia Pacific | Consumer | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,029
Europe, Middle East and Africa
Disaggregation of Revenue
Net Sales									6,226	6,654
Europe, Middle East and Africa | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											6,456
Europe, Middle East and Africa | Corporate and Unallocated
Disaggregation of Revenue
Net Sales									1
Europe, Middle East and Africa | Corporate and Unallocated | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1
Europe, Middle East and Africa | Elimination of Dual Credit
Disaggregation of Revenue
Net Sales									(207)	(232)
Europe, Middle East and Africa | Elimination of Dual Credit | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(216)
Europe, Middle East and Africa | Safety and Industrial
Disaggregation of Revenue
Net Sales									2,672	3,001
Europe, Middle East and Africa | Safety and Industrial | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											2,869
Europe, Middle East and Africa | Transportation and Electronics
Disaggregation of Revenue
Net Sales									1,472	1,578
Europe, Middle East and Africa | Transportation and Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,550
Europe, Middle East and Africa | Health Care
Disaggregation of Revenue
Net Sales									1,743	1,733
Europe, Middle East and Africa | Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,667
Europe, Middle East and Africa | Consumer
Disaggregation of Revenue
Net Sales									545	574
Europe, Middle East and Africa | Consumer | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											585
Latin America and Canada
Disaggregation of Revenue
Net Sales									2,965	3,024
Latin America and Canada | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											3,033
Latin America and Canada | Corporate and Unallocated
Disaggregation of Revenue
Net Sales									9	3
Latin America and Canada | Corporate and Unallocated | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(4)
Latin America and Canada | Elimination of Dual Credit
Disaggregation of Revenue
Net Sales									(109)	(108)
Latin America and Canada | Elimination of Dual Credit | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(112)
Latin America and Canada | Safety and Industrial
Disaggregation of Revenue
Net Sales									1,419	1,476
Latin America and Canada | Safety and Industrial | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											1,497
Latin America and Canada | Transportation and Electronics
Disaggregation of Revenue
Net Sales									601	610
Latin America and Canada | Transportation and Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											615
Latin America and Canada | Health Care
Disaggregation of Revenue
Net Sales									603	596
Latin America and Canada | Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											587
Latin America and Canada | Consumer
Disaggregation of Revenue
Net Sales									442	447
Latin America and Canada | Consumer | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											450
Other Unallocated
Disaggregation of Revenue
Net Sales									(10)	(7)
Other Unallocated | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(13)
Other Unallocated | Corporate and Unallocated
Disaggregation of Revenue
Net Sales										(1)
Other Unallocated | Safety and Industrial
Disaggregation of Revenue
Net Sales									(4)	(3)
Other Unallocated | Safety and Industrial | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(6)
Other Unallocated | Transportation and Electronics
Disaggregation of Revenue
Net Sales									(3)	(2)
Other Unallocated | Transportation and Electronics | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(4)
Other Unallocated | Health Care
Disaggregation of Revenue
Net Sales									(2)
Other Unallocated | Health Care | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											(2)
Other Unallocated | Consumer
Disaggregation of Revenue
Net Sales									$ (1)	$ (1)
Other Unallocated | Consumer | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of Revenue
Net Sales											$ (1)

XML

Goodwill and Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Acquired intangible assets disclosures
Total gross carrying amount	$ 8,261	$ 4,198
Total accumulated amortization	(2,520)	(2,182)
Total finite-lived intangible assets - net	5,741	2,016
Non-amortizable intangible assets (primarily tradenames)	638	641
Total intangible assets - net	$ 6,379	2,657
Indefinite lived tradenames years in existence	55 years
Customer related intangible assets
Acquired intangible assets disclosures
Total gross carrying amount	$ 4,316	2,291
Total accumulated amortization	(1,180)	(998)
Patents
Acquired intangible assets disclosures
Total gross carrying amount	538	542
Total accumulated amortization	(499)	(487)
Other technology-based intangible assets
Acquired intangible assets disclosures
Total gross carrying amount	2,124	576
Total accumulated amortization	(435)	(333)
Definite-lived tradenames
Acquired intangible assets disclosures
Total gross carrying amount	1,158	664
Total accumulated amortization	(316)	(276)
Other amortizable intangible assets
Acquired intangible assets disclosures
Total gross carrying amount	125	125
Total accumulated amortization	$ (90)	$ (88)

XML

Long-Term Debt and Short-Term Borrowings - Long-Term Debt Maturities (Details) € in Millions, $ in Millions	1 Months Ended				3 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($)	Nov. 30, 2018 EUR (€)	Aug. 31, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2019 USD ($)	Oct. 31, 2017 USD ($)
Debt instrument
Debt repurchases							$ 305
Loss on early debt extinguishment					$ 96
Repayment of debt		€ 500	$ 450			$ 2,100
Debt assumed						$ 2,573
Fixed rate medium term notes repaid June 2017
Debt instrument
Repayment of debt				$ 650
Notes Due 2028
Debt instrument
Debt repurchases							110
Principal amount							$ 330
Interest rate, stated percentage (as a percent)							6.375%
Notes Due 2037
Debt instrument
Debt repurchases							$ 195
Principal amount							$ 750
Interest rate, stated percentage (as a percent)							5.70%
Fixed rate medium term notes repaid June 2019
Debt instrument
Repayment of debt	$ 625

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Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Foreign Currency Translation
Loss on deconsolidation of Venezuelan subsidiary		$ 162
Foreign currency transaction loss		$ 201	$ (92)
Venezuela
Foreign Currency Translation
Loss on deconsolidation of Venezuelan subsidiary	$ 162
Foreign currency transaction loss	$ (144)

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Significant Accounting Policies - Practical expedients (Details)	12 Months Ended
	Dec. 31, 2019
Exemptions and Practical Expedients Applied or Elected
Practical Expedient, unfulfilled performance obligation	True
Practical Expedient, relative to costs of obtaining a contract	true

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Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings per share
Options outstanding not included in computation of diluted earnings per share (in shares)									8.9	2.9	0.8
Numerator:
Net income attributable to 3M	$ 969	$ 1,583	$ 1,127	$ 891	$ 1,347	$ 1,543	$ 1,857	$ 602	$ 4,570	$ 5,349	$ 4,858
Denominator:
Denominator for weighted average 3M common shares outstanding - basic (in shares)									577.0	588.5	597.5
Dilution associated with the Company's stock-based compensation plans (in shares)									8.1	13.5	15.2
Denominator for weighted average 3M common shares outstanding - diluted (in shares)									585.1	602.0	612.7
Earnings per share attributable to 3M common shareholders - basic (in dollars per share)	$ 1.68	$ 2.75	$ 1.95	$ 1.54	$ 2.32	$ 2.64	$ 3.14	$ 1.01	$ 7.92	$ 9.09	$ 8.13
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share)	$ 1.66	$ 2.72	$ 1.92	$ 1.51	$ 2.27	$ 2.58	$ 3.07	$ 0.98	$ 7.81	$ 8.89	$ 7.93

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Marketable Securities and Held-to-Maturity Debt Securities - Current and non-current (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Held-to-Maturity Debt Securities
Current marketable securities	$ 98	$ 380
Non-current marketable securities	43	37
Total marketable securities	141	417
Commercial paper
Held-to-Maturity Debt Securities
Current marketable securities	85	366
Certificates of deposit/time deposits
Held-to-Maturity Debt Securities
Current marketable securities	10	10
U.S. municipal securities
Held-to-Maturity Debt Securities
Current marketable securities	3	3
Non-current marketable securities	$ 43	37
Asset-backed securities
Held-to-Maturity Debt Securities
Current marketable securities		$ 1

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Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Supplemental Cash Flow Elements
Cash income tax payments, net of refunds	$ 1,198	$ 1,560	$ 1,604
Cash interest payments	$ 370	$ 314	$ 199

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Supplemental Equity and Comprehensive Income Information - Stock Narrative (Details) - $ / shares	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Supplemental Equity and Comprehensive Income Information
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	3,000,000,000.0	3,000,000,000.0	3,000,000,000.0
Common stock, shares issued (in shares)	944,033,056	944,033,056	944,033,056
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000	10,000,000

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Income Taxes - Reconciliation of Effective Income Tax Rate (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of Effective Income Tax Rate
Statutory U.S. tax rate	21.00%	21.00%	35.00%
State income taxes--net of federal benefit	0.50%	1.00%	0.80%
International income taxes - net	0.20%	0.20%	(6.30%)
Global Intangible Low Taxed Income (GILTI)	1.80%	1.10%
Foreign Derived Intangible Income (FDII)	(2.90%)	(1.30%)
U.S. TCJA enactment - net impacts		0.025	0.101
U.S. research and development credit	(1.70%)	(1.50%)	(0.70%)
Reserves for tax contingencies	2.30%	1.20%	2.20%
Domestic Manufacturer's deduction			(1.80%)
Employee share-based payments	(1.30%)	(1.40%)	(3.20%)
All other--net	(0.10%)	0.60%	(0.60%)
Effective worldwide tax rate (as a percent)	19.80%	23.40%	35.50%

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Derivatives - Fair Value Hedges (Details) € in Millions, $ in Millions	1 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($)	Aug. 31, 2015 USD ($) DerivativeInstrument	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017 USD ($)	Jun. 30, 2014 USD ($)	Nov. 30, 2013 EUR (€)
Eurobond Due 2021
Derivatives in Fair Value Hedging Relationships
Principal amount | €							€ 600
Fixed rate medium term note due 2019
Derivatives in Fair Value Hedging Relationships
Principal amount						$ 625.0
August 2015 medium term notes issued
Derivatives in Fair Value Hedging Relationships
Principal amount		$ 1,500.0
June 2014 medium term notes issued
Derivatives in Fair Value Hedging Relationships
Principal amount						950.0
Fixed rate medium term note due 2021
Derivatives in Fair Value Hedging Relationships
Principal amount	$ 400.0
Term of debt instrument	3 years
Variable rate			three-month LIBOR
Interest rate swap contracts | Fixed rate medium term note due 2021
Derivatives in Fair Value Hedging Relationships
Derivative notional amount	$ 200.0
Variable rate				three-month LIBOR
Fair value hedges | Interest rate swap contracts
Derivatives in Fair Value Hedging Relationships
Number of interest rate swap contracts entered in period | DerivativeInstrument		2
Fair value hedges | Interest rate swap contracts | Eurobond Due 2021
Derivatives in Fair Value Hedging Relationships
Derivative notional amount | €							€ 300
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2019
Derivatives in Fair Value Hedging Relationships
Derivative notional amount						$ 600.0
Variable rate			three-month LIBOR
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2018
Derivatives in Fair Value Hedging Relationships
Derivative notional amount		$ 450.0
Term of debt instrument		3 years
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2020
Derivatives in Fair Value Hedging Relationships
Derivative notional amount		$ 300.0			$ 200.0
Term of debt instrument		5 years
Variable rate			three-month LIBOR
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2021
Derivatives in Fair Value Hedging Relationships
Derivative notional amount	$ 200.0

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Derivatives - Not Designated (Details) - Derivatives not designated as hedging instruments - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Derivatives not designated as hedging instruments
Gain (Loss) on Derivative Recognized in Income	$ (11)	$ (96)	$ (130)
Foreign currency forward/option contracts | Cost of sales
Derivatives not designated as hedging instruments
Gain (Loss) on Derivative Recognized in Income	2	13	11
Foreign currency forward contracts | Interest expense.
Derivatives not designated as hedging instruments
Gain (Loss) on Derivative Recognized in Income	$ (13)	$ (109)	$ (141)

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Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2019

Acquisitions and Divestitures

Acquisitions and Divestitures

NOTE 3. Acquisitions and Divestitures

Acquisitions:

3M makes acquisitions of certain businesses from time to time that are aligned with its strategic intent with respect to, among other factors, growth markets and adjacent product lines or technologies. Goodwill resulting from business combinations is largely attributable to the existing workforce of the acquired businesses and synergies expected to arise after 3M’s acquisition of these businesses.

2019 acquisitions:

In February 2019, 3M completed the acquisition of all of the ownership interests of the technology business of M*Modal for $0.7 billion of cash, net of cash acquired, and assumption of $0.3 billion of M*Modal’s debt. Based in Pittsburgh, Pennsylvania, M*Modal is a leading healthcare technology provider of cloud-based, conversational artificial intelligence-powered systems that help physicians efficiently capture and improve the patient narrative. The allocation of purchase consideration related to M*Modal was completed in the fourth quarter of 2019. Net sales and operating loss (inclusive of transaction and integration costs) of this business included in

3M’s consolidated results of operations in 2019 were approximately $300 million and $25 million, respectively. M*Modal is reported within the Company’s Health Care business.

In October 2019, 3M completed the acquisition of all of the ownership interests of Acelity Inc. and its KCI subsidiaries for consideration of $4.5 billion net of cash acquired as shown in the table below, and assumption of $2.3 billion of debt (see also Note 12). Acelity is a leading global medical technology company focused on advanced wound care and specialty surgical applications marketed under the KCI brand. The allocation of purchase consideration related to Acelity Inc. and its KCI subsidiaries is considered preliminary with provisional amounts primarily related to intangible assets, working capital, certain tax-related and contingent liability amounts. 3M expects to finalize the allocation of purchase price within the one-year measurement-period following the acquisition. Net sales and operating loss (inclusive of transaction and integration costs) of this business included in 3M’s consolidated results of operations in 2019 were approximately $350 million and $45 million, respectively. Acelity is reported within the Company’s Health Care business.

Proforma information related to these acquisitions has not been included as the impact on the Company’s consolidated results of operations was not considered material. The following table shows the impact on the consolidated balance sheet of the purchase price allocations related to the 2019 acquisitions and assigned finite-lived asset weighted average lives.

	2019 Acquisition Activity
							Finite-Lived
							Intangible-Asset
(Millions)							Weighted-Average
Asset (Liability)	M*Modal		Acelity		Total		Lives (Years)
Accounts receivable	$	75	$	295	$	370
Inventory		—		186		186
Other current assets		2		65		67
Property, plant, and equipment		8		147		155
Purchased finite-lived intangible assets:
Customer related intangible assets		275		1,760		2,035	18
Other technology-based intangible assets		160		1,390		1,550	10
Definite-lived tradenames		11		485		496	16
Purchased goodwill		517		2,952		3,469
Other assets		58		73		131
Accounts payable and other liabilities		(127)		(438)		(565)
Interest bearing debt		(251)		(2,322)		(2,573)
Deferred tax asset/(liability) and accrued income taxes		(24)		(288)		(312)
Net assets acquired	$	704	$	4,305	$	5,009
Supplemental information:
Cash paid	$	708	$	4,486	$	5,194
Less: Cash acquired		4		206		210
Cash paid, net of cash acquired	$	704	$	4,280	$	4,984
Consideration payable		—		25		25
	$	704	$	4,305	$	5,009

Purchased identifiable finite-lived intangible assets related to acquisitions which closed in 2019 totaled $4.081 billion. The associated finite-lived intangible assets acquired will be amortized on a systematic and rational basis (generally straight line) over a weighted-average life of 14 years (lives ranging from 6 to 19 years).

2018 acquisition:

There were no acquisitions that closed during 2018.

2017 acquisitions:

In September 2017, 3M purchased all of the ownership interests of Elution Technologies, LLC, a Vermont-based manufacturer of test kits that help enable food and beverage companies ensure their products are free from certain potentially harmful allergens such as peanuts, soy or milk. Elution is reported within the Company’s Health Care business.

In October 2017, 3M completed the acquisition of the underlying legal entities and associated assets of Scott Safety, which is headquartered in Monroe, North Carolina, from Johnson Controls for $2.0 billion of cash, net of cash acquired. Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus systems, gas and flame detection instruments, and other safety devices that complement 3M’s personal safety portfolio.

Divestitures:

3M may divest certain businesses from time to time based upon review of the Company’s portfolio considering, among other items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering if selling the businesses results in the greatest value creation for the Company and for shareholders.

2019 divestitures, announced divestitures and recently closed divestitures:

During the first quarter of 2019, the Company sold certain oral care technology comprising a business and reflected an earnout on a previous divestiture resulting in an aggregate immaterial gain.

In August 2019, 3M closed on the sale of its gas and flame detection business, a leader in fixed and portable gas and flame detection, to Teledyne Technologies Incorporated. 3M’s gas and flame business was part of the overall October 2017 acquisition of underlying legal entities and associated assets of Scott Safety. This business has annual sales of approximately $120 million. The transaction resulted in a pre-tax gain of $112 million that was reported within the Company’s Safety and Industrial business.

In December 2019, 3M agreed to sell substantially all of its drug delivery business to an affiliate of Altaris Capital Partners, LLC. Subject to closing and other adjustments, 3M will receive approximately $650 million in consideration including cash, an interest-bearing security, and a 17 percent noncontrolling interest in the new company. The business that is being divested has annual sales of approximately $380 million. 3M will retain its transdermal drug delivery components business. The sale is expected to close in the first half of 2020, subject to customary closing conditions and regulatory approvals. 3M expects a pre-tax gain of approximately $400 million as a result of the divestiture that will be reported within the Company’s Health Care business. Following completion of the transaction, 3M’s will reflect its ownership interest in the divested business using the equity method of accounting.

In January 2020, 3M completed the sale of its advanced ballistic-protection business to Avon Rubber p.l.c for $91 million, before closing and other adjustments. Further contingent consideration of up to $25 million may be received depending on the outcome of pending tenders. The business, with annual sales of approximately $85 million, consists of ballistic helmets, body armor, flat armor and related helmet-attachment products serving government and law enforcement. The Company reflected an immaterial impact in the third quarter of 2019 within the Transportation and Electronics business as a result of measuring this disposal group at the lower of its carrying amount or fair value less cost to sell.

2018 divestitures:

In February 2018, 3M closed on the sale of certain personal safety product offerings primarily focused on noise, environmental, and heat stress monitoring to TSI, Inc. This business has annual sales of approximately $15 million. The transaction resulted in a pre-tax gain of less than $20 million that was reported within the Company’s Safety and Industrial business. In addition, during the first quarter of 2018, 3M divested a polymer additives compounding business, formerly part of the Company’s Health Care business, and reflected a gain on final closing adjustments from a prior divestiture which, in aggregate, were not material. In May 2018, 3M divested an abrasives glass products business, formerly part of the Company’s Safety and Industrial business, with annual sales of approximately $10 million. The transaction resulted in a pre-tax gain of less than $15 million. The Company also reflected an immaterial gain in the fourth quarter from an earnout on a previous divestiture.

​
In June 2018, 3M completed the sale of substantially all of its Communication Markets Division to Corning Incorporated. This business, with annual sales of approximately $400 million, consists of optical fiber and copper passive connectivity solutions for the

telecommunications industry including 3M’s xDSL, FTTx, and structured cabling solutions and, in certain countries, telecommunications system integration services. 3M received cash proceeds of $772 million and reflected a pre-tax gain of $494 million as a result of this divestiture. In December 2018, the Company completed the sale of the remaining telecommunications system integration services portion of the business based in Germany, resulting in a pre-tax gain of $15 million. These divestiture impacts were reported within the Company’s Safety and Industrial business.

2017 divestitures:

In January 2017, 3M sold the assets of its safety prescription eyewear business, with annual sales of approximately $45 million, to HOYA Vision Care. The Company recorded a pre-tax gain of $29 million in the first quarter of 2017 as a result of this sale, which was reported within the Company’s Safety and Industrial business.

In May 2017, 3M completed the divestiture of its identity management business to Gemalto N.V. This business, with 2016 sales of approximately $205 million, is a leading provider in identity management solutions, including biometric hardware and software that enable identity verification and authentication, as well as secure materials and document readers. In June 2017, 3M also completed the sale of its tolling and automated license/number plate recognition business, with annual sales of approximately $40 million, to Neology, Inc. 3M’s tolling and automated license/number plate recognition business includes RFID readers and tags, automatic vehicle classification systems, lane controller and host software, and back office software and services. It also provides mobile and fixed cameras, software, and services in automated license/number plate recognition. 3M received proceeds of $833 million, or $809 million net of cash sold, and reflected a pre-tax gain of $458 million as a result of these two divestitures, which was reported within the Company’s Transportation and Electronics business.

In October 2017, 3M sold its electronic monitoring business to an affiliate of Apax Partners. This business, with annual sales of approximately $95 million, is a provider of electronic monitoring technologies, serving hundreds of correctional and law enforcement agencies around the world. 3M received proceeds of $201 million, net of cash sold, and reflected a pre-tax gain of $98 million in the fourth quarter of 2017 as a result of this divestiture, which was reported within the Company’s Transportation and Electronics business.

In the fourth quarter of 2017, 3M sold the assets of an electrical marking/labeling business within its Safety and Industrial business. The former activity, proceeds and gain were not considered material.

Operating income and held for sale amounts

The aggregate operating income of these businesses was approximately $40 million, $85 million, and $115 million in 2019, 2018, and 2017, respectively. The approximate amounts of major assets and liabilities associated with disposal groups classified as held-for-sale as of December 31, 2018 were not material and as of December 31, 2019 included the following:

	December 31,
(Millions)	2019
Inventory	$	70
Property, plant and equipment		150
Intangible assets		35

In addition, approximately $30 million of goodwill was estimated to be attributable to disposal groups classified as held-for-sale as of December 31, 2019, based upon relative fair value. The amounts above have not been segregated and are classified within the existing corresponding line items on the Company’s consolidated balance sheet.

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Derivatives - Offsetting Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet	$ 20	$ 53
Net Amount of Derivative Liabilities	6	15
Derivatives subject to master netting agreements
Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet	20	53
Gross Amount of Eligible Offsetting Recognized Derivative Assets	14	38
Net Amount of Derivative Liabilities	$ 6	$ 15

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Supplemental Balance Sheet Information

12 Months Ended

Dec. 31, 2019

Supplemental Balance Sheet Information

Supplemental Balance Sheet Information

NOTE 7. Supplemental Balance Sheet Information

Additional supplemental balance sheet information is provided in the table that follows.

(Millions)	2019		2018
Other current assets
Derivative assets-current	$	75	$	88
Held-to-maturity debt security held in trust		470		—
Insurance related (receivables, prepaid expenses and other)		172		103
Other		174		158
Total other current assets	$	891	$	349
Property, plant and equipment - at cost
Land	$	351	$	340
Buildings and leasehold improvements		7,877		7,564
Machinery and equipment		16,586		15,776
Construction in progress		1,310		1,193
Gross property, plant and equipment		26,124		24,873
Accumulated depreciation		(16,791)		(16,135)
Property, plant and equipment - net	$	9,333	$	8,738
Other assets
Deferred income taxes	$	521	$	365
Prepaid pension and post retirement		230		208
Insurance related receivables and other		67		68
Cash surrender value of life insurance policies		254		251
Equity method investments		70		70
Equity and other investments		126		118
Other		406		265
Total other assets	$	1,674	$	1,345
Other current liabilities
Accrued rebates	$	594	$	558
Deferred revenue		430		617
Derivative liabilities		17		32
Employee benefits and withholdings		229		228
Contingent liability claims and other		566		244
Property, sales-related and other taxes		247		273
Pension and postretirement benefits		67		76
Other		906		747
Total other current liabilities	$	3,056	$	2,775
Other liabilities
Accrued income taxes – long-term portion	$	1,507	$	1,274
Employee benefits		312		299
Contingent liability claims and other		787		789
Finance lease obligations		111		75
Deferred income taxes		301		279
Other		257		294
Total other liabilities	$	3,275	$	3,010

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Leases - Sale and Leased-backed asset and obligation (Details) - USD ($) $ in Millions	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Property, plant and equipment - at cost
Finance lease asset	$ 9,333		$ 8,738
Finance lease liability	$ 132
Municipal securities
Property, plant and equipment - at cost
Finance lease liability		$ 9
Constructed machinery and equipment
Property, plant and equipment - at cost
Finance lease asset		$ 9

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2019

Supplemental Cash Flow Elements

Supplemental Cash Flow Information

(Millions)	2019		2018		2017
Cash income tax payments, net of refunds	$	1,198	$	1,560	$	1,604
Cash interest payments		370		314		199

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Leases (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Jan. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases
Stockholders' equity	$ 10,063			$ 9,796
Operating leases, existence of option to extend	true
Finance leases, existence of option to extend	true
Lease liabilities	$ 854
Operating lease right of use assets	$ 858
Lease, Practical Expedients, Package [true false]	true
Lease, Practical Expedient, Use of Hindsight [true false]	false
ASU 2016-02 Leases
Leases
Lease liabilities		$ 800
Operating lease right of use assets		$ 800
Adjustment | ASU 2016-02 Leases
Leases
Lease liabilities			$ 800
Operating lease right of use assets			800
Retained Earnings | Adjustment | ASU 2016-02 Leases
Leases
Stockholders' equity			$ 14

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Restructuring Actions (Tables)

12 Months Ended

Dec. 31, 2019

2019 Restructuring Actions

Schedule of restructuring charges by income statement line

(Millions)	Second and Fourth Quarter 2019
Cost of sales	$	72
Selling, general and administrative expenses		137
Research, development and related expenses		37
Total operating income impact		246
Other expense (income), net		36
Total income before income taxes impact	$	282

Components of restructuring by business segment

	Second and Fourth Quarter 2019
(Millions)	Employee-Related		Asset-Related		Total
Safety and Industrial	$	50	$	—	$	50
Transportation and Electronics		31		—		31
Health Care		17		—		17
Consumer		8		—		8
Corporate and Unallocated		100		40		140
Total Operating Expense	$	206	$	40	$	246

Accrued restructuring action balances

(Millions)	Employee-Related		Asset-Related		Total
Expense incurred in the second quarter and fourth quarter of 2019	$	242	$	40	$	282
Non-cash changes		(36)		(40)		(76)
Cash payments		(52)		—		(52)
Adjustments		(14)		—		(14)
Accrued restructuring action balances as of December 31, 2019	$	140	$	—	$	140

2018 Restructuring Actions

Schedule of restructuring charges by income statement line

(Millions)	Second and Fourth Quarter 2018
Cost of sales	$	27
Selling, general and administrative expenses		105
Research, development and related expenses		5
Total	$	137

Accrued restructuring action balances

(Millions)	Employee-Related		Asset-Related		Total
Expense incurred in the second quarter and fourth quarter of 2018	$	125	$	12	$	137
Non-cash changes		—		(12)		(12)
Cash payments		(24)		—		(24)
Adjustments		(17)		—		(17)
Accrued restructuring action balances as of December 31, 2018	$	84	$	—	$	84
Cash payments		(76)		—		(76)
Adjustments		(5)		—		(5)
Accrued restructuring action balances as of December 31, 2019	$	3	$	—	$	3

2017 Restructuring Actions

Schedule of restructuring charges by income statement line

(Millions)	Second Quarter 2017
Cost of sales	$	86
Selling, general and administrative expenses		5
Research, development and related expenses		8
Total	$	99

Components of restructuring by business segment

	Second Quarter 2017
(Millions)		Employee-Related
Safety and Industrial		45
Transportation and Electronics		10
Health Care		2
Consumer		36
Corporate and Unallocated		6
Total	$	99

Accrued restructuring action balances

(Millions)	Employee-Related
Expense incurred in the second quarter of 2017	$	99
Cash payments		(8)
Adjustments		(3)
Accrued restructuring action balances as of December 31, 2017	$	88
Cash payments		(20)
Adjustments		(28)
Accrued restructuring action balances as of December 31, 2018	$	40
Cash payments		(21)
Adjustments		1
Accrued restructuring action balances as of December 31, 2019	$	20

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Significant Accounting Policies

Earnings per share

Earnings Per Share Computations

(Amounts in millions, except per share amounts)	2019		2018		2017
Numerator:
Net income attributable to 3M	$	4,570	$	5,349	$	4,858
Denominator:
Denominator for weighted average 3M common shares outstanding – basic		577.0		588.5		597.5
Dilution associated with the Company’s stock-based compensation plans		8.1		13.5		15.2
Denominator for weighted average 3M common shares outstanding – diluted		585.1		602.0		612.7
Earnings per share attributable to 3M common shareholders – basic	$	7.92	$	9.09	$	8.13
Earnings per share attributable to 3M common shareholders – diluted	$	7.81	$	8.89	$	7.93

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Significant Accounting Policies - Leases (Details)	12 Months Ended
	Dec. 31, 2019 approach
Leases
Operating leases, existence of option to extend	true
Finance leases, existence of option to extend	true
Maximum
Leases
Operating lease, term	5 years
Finance lease, term	5 years
Minimum
Leases
Number of options to renew for operating leases	1
Number of options to renew for finance leases	1

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Significant Accounting Policies - PP&E (Details)	12 Months Ended
	Dec. 31, 2019
Minimum | Buildings and improvements
Property, plant and equipment - at cost
Property Plant And Equipment Useful Life	10 years
Property Plant And Equipment Useful Life Majority	20 years
Minimum | Machinery and equipment
Property, plant and equipment - at cost
Property Plant And Equipment Useful Life	3 years
Property Plant And Equipment Useful Life Majority	5 years
Minimum | Internal use software
Property, plant and equipment - at cost
Property Plant And Equipment Useful Life	3 years
Maximum | Buildings and improvements
Property, plant and equipment - at cost
Property Plant And Equipment Useful Life	40 years
Property Plant And Equipment Useful Life Majority	40 years
Maximum | Machinery and equipment
Property, plant and equipment - at cost
Property Plant And Equipment Useful Life	15 years
Property Plant And Equipment Useful Life Majority	10 years
Maximum | Internal use software
Property, plant and equipment - at cost
Property Plant And Equipment Useful Life	7 years

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Significant Accounting Policies - Advertising and Merchandising Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Advertising and Merchandising Expense
Advertising and merchandising expense	$ 348	$ 396	$ 411

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Income Taxes - Undistributed Earnings and Foreign Location Information (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes.
Income tax benefits attributable to reduced tax rates or exemptions in foreign locations	$ 127	$ 227	$ 228
EPS impact of reduced tax rates or exemptions in foreign locations (in dollars per diluted share)	$ 0.22	$ 0.38	$ 0.37
Undistributed earnings of non-U.S. subsidiaries	$ 14,000

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Supplemental Equity and Comprehensive Income Information - Reclass AOCI (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Amount Reclassified from Accumulated Other Comprehensive Income
Deconsolidation of Venezuelan subsidiary	$ 162
Net of tax	(438)	$ (538)	$ (366)
Cumulative Translation Adjustment
Amount Reclassified from Accumulated Other Comprehensive Income
Deconsolidation of Venezuelan subsidiary	(142)
Total before tax	(142)
Net of tax	(142)
Defined Pension and Postretirement Plans Adjustment
Amount Reclassified from Accumulated Other Comprehensive Income
Deconsolidation of Venezuelan subsidiary	(2)
Prior service benefit	69	76	89
Net actuarial loss	(478)	(678)	(570)
Curtailments/Settlements	(48)	(4)	(6)
Total before tax	(459)	(606)	(487)
Tax effect	110	145	117
Net of tax	(349)	(461)	(370)
Cash Flow Hedging Instruments, Unrealized Gain (Loss)
Amount Reclassified from Accumulated Other Comprehensive Income
Total before tax	70
Tax effect	(17)
Net of tax	53
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Foreign currency forward/option contracts
Amount Reclassified from Accumulated Other Comprehensive Income
Cost of sales	74
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Interest rate swap contracts
Amount Reclassified from Accumulated Other Comprehensive Income
Interest expense	$ (4)
Cash Flow Hedging Instruments, Unrealized Gain (Loss)
Amount Reclassified from Accumulated Other Comprehensive Income
Total before tax		(96)	7
Tax effect		19	(3)
Net of tax		(77)	4
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Foreign currency forward/option contracts
Amount Reclassified from Accumulated Other Comprehensive Income
Cost of sales		(95)	8
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Interest rate swap contracts
Amount Reclassified from Accumulated Other Comprehensive Income
Interest expense		$ (1)	$ (1)

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Supplemental Balance Sheet Information - PP&E (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Property, plant and equipment - at cost
Property and equipment, at cost	$ 26,124	$ 24,873
Less: Accumulated depreciation	(16,791)	(16,135)
Property, Plant and Equipment - net	9,333	8,738
Land
Property, plant and equipment - at cost
Property and equipment, at cost	351	340
Buildings and leasehold improvements
Property, plant and equipment - at cost
Property and equipment, at cost	7,877	7,564
Machinery and equipment
Property, plant and equipment - at cost
Property and equipment, at cost	16,586	15,776
Construction in progress
Property, plant and equipment - at cost
Property and equipment, at cost	$ 1,310	$ 1,193

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Income Taxes - Tax Effected Operating Loss, Capital Loss, and Tax Credit Carryovers (Details) - USD ($) $ in Millions		3 Months Ended	12 Months Ended
	Jan. 01, 2019	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income tax
Net UTB impacting the effective tax rate		$ 526	$ 1,178	$ 655	$ 526
Interest and penalties related to unrecognized tax benefits, expense (benefit) recognized on a gross basis			33	12	$ 20
Interest and penalties related to unrecognized tax benefits, accrued on a gross basis			102	69
Deferred tax assets valuation allowance			$ 158	$ 67
Effective tax rate (as a percent)			19.80%	23.40%	35.50%
Increase (decrease) in effective income tax rate from prior reporting period to current reporting period (as a percent)			(3.60%)	(12.10%)
Statutory U.S. tax rate			21.00%	21.00%	35.00%
Provisional income tax expense (benefit) from enactment of Tax Cuts and Jobs Act of 2017		$ 762
Tax Cuts and Jobs Act of 2017 measurement period adjustment				$ 176
Unrecognized tax benefits to be recognized within next 12 months			$ 50
Period of time over which TCJA transition tax on certain unrepatriated earnings of foreign subsidiaries may be paid				8 years
Tax Cuts and Jobs Act of 2017 transition tax in current accrued income taxes payable			33
Tax Cuts and Jobs Act of 2017 transition tax long term income taxes payable			$ 653	$ 649
Retained Earnings | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
Income tax
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect	$ 900
Total Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
Income tax
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect	$ 900

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets

Goodwill and Intangible Assets

NOTE 4. Goodwill and Intangible Assets

Goodwill

Goodwill from acquisitions total $3.5 billion in 2019, none of which is deductible for tax purposes. There were no acquisitions that closed during 2018. The acquisition activity in the following table also includes the net impact of adjustments to the preliminary allocation of purchase price within the one year measurement-period following prior acquisitions, which increased goodwill by $7 million during 2018. The amounts in the “Translation and other” column in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balance by business segment follows:

(Millions)	Safety and Industrial		Transportation and Electronics		Health Care		Consumer		Total Company
Balance as of December 31, 2017	$	5,077	$	1,886	$	3,317	$	233	$	10,513
Acquisition activity		7		—		—		—		7
Divestiture activity		(268)		—		(4)		—		(272)
Translation and other		(100)		(29)		(65)		(3)		(197)
Balance as of December 31, 2018		4,716		1,857		3,248		230		10,051
Acquisition activity		—		—		3,469		—		3,469
Divestiture activity		(49)		—		—		—		(49)
Translation and other		(46)		(27)		22		24		(27)
Balance as of December 31, 2019	$	4,621	$	1,830	$	6,739	$	254	$	13,444

Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as a change in reporting units or the testing of recoverability of a significant asset group within a reporting unit. At 3M, reporting units correspond to a division.

As described in Note 19, effective in the second quarter of 2019, the Company realigned its former five business segments into four to enable the Company to better serve global customers and markets. In addition, effective in the first quarter of 2019, the Company changed its business segment reporting in its continuing effort to improve the alignment of its businesses around markets and customers. For any product changes that resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact on goodwill of the associated reporting units. Goodwill balances reported above reflect these business segment reporting changes in the earliest period presented. During the first and second quarters of 2019, the Company completed its assessment of any potential goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed. The Company also completed its annual goodwill impairment test in the fourth quarter of 2019 for all reporting units and determined that no impairment existed. In addition, the Company had no impairments of goodwill in 2018 or 2017.

Acquired Intangible Assets

The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of non-amortizable intangible assets, as of December 31, follow:

	December 31,		December 31,
(Millions)	2019		2018
Customer related intangible assets	$	4,316	$	2,291
Patents		538		542
Other technology-based intangible assets		2,124		576
Definite-lived tradenames		1,158		664
Other amortizable intangible assets		125		125
Total gross carrying amount	$	8,261	$	4,198
Accumulated amortization — customer related		(1,180)		(998)
Accumulated amortization — patents		(499)		(487)
Accumulated amortization — other technology-based		(435)		(333)
Accumulated amortization — definite-lived tradenames		(316)		(276)
Accumulated amortization — other		(90)		(88)
Total accumulated amortization	$	(2,520)	$	(2,182)
Total finite-lived intangible assets — net	$	5,741	$	2,016
Non-amortizable intangible assets (primarily tradenames)		638		641
Total intangible assets — net	$	6,379	$	2,657

Certain tradenames acquired by 3M are not amortized because they have been in existence for over 55 years, have a history of leading-market share positions, have been and are intended to be continuously renewed, and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time.

Amortization expense for the years ended December 31 follows:

(Millions)	2019		2018		2017
Amortization expense	$	341	$	249	$	238

Expected amortization expense for acquired amortizable intangible assets recorded as of December 31, 2019 follows:

											After
(Millions)	2020		2021		2022		2023		2024		2024
Amortization expense	$	535	$	523	$	511	$	482	$	455	$	3,200

The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events. The table above excludes the impact of the carrying value of finite-lived intangible assets associated with disposal groups classified as held-for-sale at December 31, 2019. See Note 3 for additional details. 3M expenses the costs incurred to renew or extend the term of intangible assets.

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Derivatives - Offsetting Assets (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) Counterparty	Dec. 31, 2018 USD ($)
Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties
Number of master netting agreements supported by primary counterparty's parent guarantee | Counterparty	17
Number of credit support agreements by primary counterparty | Counterparty	16
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet	$ 142	$ 146
Net Amount of Derivative Assets	128	108
Derivatives subject to master netting agreements
Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet	142	146
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities	14	38
Net Amount of Derivative Assets	$ 128	$ 108

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Supplemental Equity and Comprehensive Income Information

12 Months Ended

Dec. 31, 2019

Supplemental Equity and Comprehensive Income Information

Supplemental Equity and Comprehensive Income Information

NOTE 8. Supplemental Equity and Comprehensive Income Information

Common stock ($.01 par value per share) of 3.0 billion shares is authorized, with 944,033,056 shares issued as of December 31, 2019, 2018 and 2017. Preferred stock, without par value, of 10 million shares is authorized but unissued.

Cash dividends declared and paid totaled $1.44, $1.36, and $1.175 per share for each quarter in 2019, 2018 and 2017, respectively, which resulted in total year declared and paid dividends of $5.76, $5.44, and $4.70 per share, respectively.

Transfer of Ownership Interest Involving Non-Wholly Owned Subsidiaries

During 2018, a wholly owned subsidiary in India was sold to 3M India Limited, which is 75 percent owned by the Company. Because the Company retained its controlling interest in the subsidiary involved, the sale resulted in a deemed dividend to 3M, resulting in an increase in 3M Company shareholders’ equity and a decrease in noncontrolling interest. Refer to the Consolidated Statement of Changes in Equity for further details.

Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component

			Defined Benefit		Cash Flow		Total
			Pension and		Hedging		Accumulated
	Cumulative		Postretirement		Instruments,		Other
	Translation		Plans		Unrealized		Comprehensive
(Millions)	Adjustment		Adjustment		Gain (Loss)		Income (Loss)
Balance at December 31, 2016, net of tax:	$	(2,008)	$	(5,328)	$	91	$	(7,245)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		91		(604)		(311)		(824)
Amounts reclassified out		—		487		(7)		480
Total other comprehensive income (loss), before tax		91		(117)		(318)		(344)
Tax effect		279		169		115		563
Total other comprehensive income (loss), net of tax		370		52		(203)		219
Balance at December 31, 2017, net of tax:	$	(1,638)	$	(5,276)	$	(112)	$	(7,026)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(414)		55		133		(226)
Amounts reclassified out		—		606		96		702
Total other comprehensive income (loss), before tax		(414)		661		229		476
Tax effect		(47)		(217)		(53)		(317)
Total other comprehensive income (loss), net of tax		(461)		444		176		159
Transfer of ownership involving non-wholly owned subsidiaries		1		—		—		1
Balance at December 31, 2018, net of tax:	$	(2,098)	$	(4,832)	$	64	$	(6,866)
Impact of adoption of ASU No. 2018-02 (See Note 1)		(13)		(817)		(23)		(853)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		102		(1,227)		(26)		(1,151)
Amounts reclassified out		142		459		(70)		531
Total other comprehensive income (loss), before tax		244		(768)		(96)		(620)
Tax effect		(32)		208		24		200
Total other comprehensive income (loss), net of tax		212		(560)		(72)		(420)
Balance at December 31, 2019, net of tax:	$	(1,899)	$	(6,209)	$	(31)	$	(8,139)

Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within cumulative translation does include impacts from items such as net investment hedge transactions. Reclassification adjustments are made to avoid double counting in comprehensive income items that are subsequently recorded as part of net income.

Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M

	Amounts Reclassified from
Details about Accumulated Other	Accumulated Other Comprehensive Income
Comprehensive Income Components	Year ended December 31,						Location on Income
(Millions)	2019		2018		2017		Statement
Cumulative translation adjustment
Deconsolidation of Venezuelan subsidiary	$	(142)	$	—	$	—	Other (expense) income, net
Total before tax		(142)		—		—
Tax effect		—		—		—	Provision for income taxes
Net of tax	$	(142)	$	—	$	—
Defined benefit pension and postretirement plans adjustments
Gains (losses) associated with defined benefit pension and postretirement plans amortization
Prior service benefit		69		76		89	See Note 13
Net actuarial loss		(478)		(678)		(570)	See Note 13
Curtailments/Settlements		(48)		(4)		(6)	See Note 13
Deconsolidation of Venezuelan subsidiary		(2)		—		—	Other (expense) income, net
Total before tax		(459)		(606)		(487)
Tax effect		110		145		117	Provision for income taxes
Net of tax	$	(349)	$	(461)	$	(370)
Cash flow hedging instruments gains (losses)
Foreign currency forward/option contracts	$	74	$	(95)	$	8	Cost of sales
Interest rate swap contracts		(4)		(1)		(1)	Interest expense
Total before tax		70		(96)		7
Tax effect		(17)		19		(3)	Provision for income taxes
Net of tax	$	53	$	(77)	$	4
Total reclassifications for the period, net of tax	$	(438)	$	(538)	$	(366)

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Derivatives - Cash Flow Hedges - Effective and Ineffective Portions (Details) - Cash flow hedge - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative	$ 133	$ (311)
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income	(96)	7
Foreign currency forward/option contracts
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative	151	(305)
Foreign currency forward/option contracts | Cost of sales
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income	(95)	8
Interest rate swap contracts
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative	(18)	(6)
Interest rate swap contracts | Interest expense.
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income	$ (1)	$ (1)

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Derivatives - Net Investment Hedges (Details) € in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2019 EUR (€)	Mar. 31, 2018 EUR (€)
Foreign Currency Denominated Debt
Net investment hedges
Face amount of debt dedesignated as a net investment hedge | €					€ 300
Net Investment Hedges
Net investment hedges
Effective portion of net investment hedge reclassified out of other comprehensive income into income	$ 0	$ 0	$ 0
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument	140,000,000	240,000,000	(725,000,000)
Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income		2,000,000	7,000,000
Net Investment Hedges | Cost of sales
Net investment hedges
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Income	20,000,000
Net Investment Hedges | Foreign currency forward contracts
Net investment hedges
Derivative notional amount | €				€ 200
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument	32,000,000	18,000,000	(58,000,000)
Net Investment Hedges | Foreign currency forward contracts | Cost of sales
Net investment hedges
Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income		4,000,000	7,000,000
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Income	20,000,000
Net Investment Hedges | Foreign Currency Denominated Debt
Net investment hedges
Face amount of debt designated as a net investment hedge | €				€ 4,100
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument	$ 108,000,000	222,000,000	$ (667,000,000)
Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income		$ (2,000,000)

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets

Goodwill

(Millions)	Safety and Industrial		Transportation and Electronics		Health Care		Consumer		Total Company
Balance as of December 31, 2017	$	5,077	$	1,886	$	3,317	$	233	$	10,513
Acquisition activity		7		—		—		—		7
Divestiture activity		(268)		—		(4)		—		(272)
Translation and other		(100)		(29)		(65)		(3)		(197)
Balance as of December 31, 2018		4,716		1,857		3,248		230		10,051
Acquisition activity		—		—		3,469		—		3,469
Divestiture activity		(49)		—		—		—		(49)
Translation and other		(46)		(27)		22		24		(27)
Balance as of December 31, 2019	$	4,621	$	1,830	$	6,739	$	254	$	13,444

Acquired Intangible Assets

	December 31,		December 31,
(Millions)	2019		2018
Customer related intangible assets	$	4,316	$	2,291
Patents		538		542
Other technology-based intangible assets		2,124		576
Definite-lived tradenames		1,158		664
Other amortizable intangible assets		125		125
Total gross carrying amount	$	8,261	$	4,198
Accumulated amortization — customer related		(1,180)		(998)
Accumulated amortization — patents		(499)		(487)
Accumulated amortization — other technology-based		(435)		(333)
Accumulated amortization — definite-lived tradenames		(316)		(276)
Accumulated amortization — other		(90)		(88)
Total accumulated amortization	$	(2,520)	$	(2,182)
Total finite-lived intangible assets — net	$	5,741	$	2,016
Non-amortizable intangible assets (primarily tradenames)		638		641
Total intangible assets — net	$	6,379	$	2,657

Schedule of amortization expense for acquired intangible assets

Amortization expense for the years ended December 31 follows:

(Millions)	2019		2018		2017
Amortization expense	$	341	$	249	$	238

Schedule of expected amortization expense for acquired amortizable intangible assets

Expected amortization expense for acquired amortizable intangible assets recorded as of December 31, 2019 follows:

											After
(Millions)	2020		2021		2022		2023		2024		2024
Amortization expense	$	535	$	523	$	511	$	482	$	455	$	3,200

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Significant Accounting Policies

Consolidation

Consolidation: 3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products. All applicable subsidiaries are consolidated. All intercompany transactions are eliminated. As used herein, the term “3M” or “Company” refers to 3M Company and subsidiaries unless the context indicates otherwise.

Basis of presentation

Basis of presentation: Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation.

Foreign currency translation

Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States with the exception of 3M’s subsidiaries in Argentina, the economy of which was considered highly inflationary beginning in 2018, and accordingly the financial statements of these subsidiaries are remeasured as if their functional currency is that of their parent. Assets and liabilities for operations in local-currency environments are translated at month-end exchange rates of the period reported. Income and expense items are translated at average monthly currency exchange rates in effect during the period. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity.

3M had a consolidating subsidiary in Venezuela, the financial statements of which were remeasured as if its functional currency were that of its parent because Venezuela’s economic environment is considered highly inflationary. The operating income of this subsidiary was immaterial as a percent of 3M’s consolidated operating income for the periods presented. In light of circumstances, including the country’s unstable environment and heightened unrest leading to sustained lack of demand, and expectation that these circumstances will continue for the foreseeable future, during May 2019, 3M concluded it no longer met the criteria of control in order to continue consolidating its Venezuelan operations. As a result, as of May 31, 2019, the Company began reflecting its interest in the Venezuelan subsidiary as an equity investment that does not have a readily determinable fair value. This resulted in a pre-tax charge of $162 million within other expense (income) in the second quarter of 2019. The charge primarily relates to $144 million of foreign currency translation losses associated with foreign currency movements before Venezuela was accounted for as a highly inflationary economy and pension elements previously included in accumulated other comprehensive loss along with write-down of intercompany receivable and investment balances associated with this subsidiary. Beginning May 31, 2019, 3M’s consolidated balance sheets and statements of operations no longer include the Venezuelan entity’s operations other than an immaterial equity investment and associated loss or income thereon largely only to the extent, if any, that 3M provides support or materials and receives funding or dividends.

Use of estimates

Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash and cash equivalents

Cash and cash equivalents: Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when acquired.

Marketable securities

Marketable securities: Marketable securities include available-for-sale debt securities and are recorded at fair value. Cost of securities sold use the first in, first out (FIFO) method. The classification of marketable securities as current or non-current is based on the availability for use in current operations. 3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320, Investments-Debt and Equity Securities, when determining the classification of the impairment as “temporary” or “other-than-temporary”. A temporary impairment charge results in an unrealized loss being recorded in accumulated other comprehensive income as a component of shareholders’ equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors. Amounts are reclassified out of accumulated other comprehensive income and into earnings upon sale or “other-than-temporary” impairment.

Investments

Investments: All equity securities that do not result in consolidation and are not accounted for under the equity method are measured at fair value with changes therein reflected in net income. 3M utilizes the measurement alternative for equity investments that do not

have readily determinable fair values and measures these investments at cost less impairment plus or minus observable price changes in orderly transactions. The balance of these securities is disclosed in Note 7.

Other assets

Other assets: Other assets include deferred income taxes, product and other insurance receivables, the cash surrender value of life insurance policies, medical equipment in rental arrangements utilized primarily by hospitals and other medical clinics, prepaid pension and postretirement and other long-term assets. Investments in life insurance are reported at the amount that could be realized under contract at the balance sheet date, with any changes in cash surrender value or contract value during the period accounted for as an adjustment of premiums paid. Cash outflows and inflows associated with life insurance activity are included in “Purchases of marketable securities and investments” and “Proceeds from maturities and sale of marketable securities and investments,” respectively.

Inventories

Inventories: Inventories are stated at the lower of cost or net realizable value (NRV), which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation market. Cost is determined on a first-in, first-out basis.

Property, plant and equipment

Property, plant and equipment: Property, plant and equipment, including capitalized interest and internal direct engineering costs, are recorded at cost. Depreciation of property, plant and equipment generally is computed using the straight-line method based on the estimated useful lives of the assets. The estimated useful lives of buildings and improvements primarily range from ten to forty years, with the majority in the range of twenty to forty years. The estimated useful lives of machinery and equipment primarily range from three to fifteen years, with the majority in the range of five to ten years. Fully depreciated assets other than capitalized internally developed software are retained in property, plant and equipment and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Conditional asset retirement obligations

Conditional asset retirement obligations: A liability is initially recorded at fair value for an asset retirement obligation associated with the retirement of tangible long-lived assets in the period in which it is incurred if a reasonable estimate of fair value can be made. Conditional asset retirement obligations exist for certain long-term assets of the Company. The obligation is initially measured at fair value using expected present value techniques. Over time the liabilities are accreted for the change in their present value and the initial capitalized costs are depreciated over the remaining useful lives of the related assets. The asset retirement obligation liability was $137 million and $122 million at December 31, 2019 and 2018, respectively.

Goodwill

Goodwill: Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually in the fourth quarter of each year, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting unit. Reporting units are one level below the business segment level, but are required to be combined when reporting units within the same segment have similar economic characteristics. 3M did not combine any of its reporting units for impairment testing. The impairment loss is measured as the amount by which the carrying value of the reporting unit’s net assets exceeds its estimated fair value, not to exceed the carrying value of the reporting unit’s goodwill. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups or by using a discounted cash flow analysis. Companies have the option to first assess qualitative factors to determine whether the fair value of a reporting unit is not “more likely than not” less than its carrying amount, which is commonly referred to as “Step 0”. 3M has chosen not to apply Step 0 for its annual goodwill assessments.

Intangible assets

Intangible assets: Intangible asset types include customer related, patents, other technology-based, tradenames and other intangible assets acquired from an independent party. Intangible assets with a definite life are amortized over a period ranging from four to twenty years on a systematic and rational basis (generally straight line) that is representative of the asset’s use. The estimated useful lives vary by category, with customer-related largely between twelve to nineteen years, patents largely between six to seventeen years, other technology-based largely between six to fifteen years, definite lived tradenames largely between six and twenty years, and other intangibles largely between five to thirteen years. Intangible assets are removed from their respective gross asset and accumulated

amortization accounts when they are no longer in use. Refer to Note 4 for additional details on the gross amount and accumulated amortization of the Company’s intangible assets. Costs related to internally developed intangible assets, such as patents, are expensed as incurred, within “Research, development and related expenses.”

Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount exceeds the estimated undiscounted cash flows from the asset’s or asset group’s ongoing use and eventual disposition. If an impairment is identified, the amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Indefinite-lived intangible assets are tested for impairment annually, and are tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. An impairment loss would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset.

Restructuring actions

Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairment or accelerated depreciation/amortization of assets associated with such actions. Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Severance amounts for which affected employees in certain circumstances are required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees’ remaining service periods. Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company. Asset impairment charges related to intangible assets and property, plant and equipment reflect the excess of the assets’ carrying values over their fair values.

Revenue (sales) recognition

Revenue (sales) recognition: The Company sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk or significant payment terms extended to customers. The vast majority of 3M’s customer arrangements contain a single performance obligation to transfer manufactured goods as the promise to transfer the individual goods is not separately identifiable from other promises in the contracts and, therefore, not distinct. However, to a limited extent 3M also enters into customer arrangements that involve intellectual property out-licensing, multiple performance obligations (such as equipment, installation and service), software with coterminous post-contract support, services and non-standard terms and conditions.

The Company recognizes revenue in light of the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. Revenue is recognized when control of goods has transferred to customers. For the majority of the Company’s customer arrangements, control transfers to customers at a point-in-time when goods/services have been delivered as that is generally when legal title, physical possession and risks and rewards of goods/services transfers to the customer. In limited arrangements, control transfers over time as the customer simultaneously receives and consumes the benefits as 3M completes the performance obligation(s).

Revenue is recognized at the transaction price which the Company expects to be entitled. When determining the transaction price, 3M estimates variable consideration applying the portfolio approach practical expedient under ASC 606. The main sources of variable consideration for 3M are customer rebates, trade promotion funds, and cash discounts. These sales incentives are recorded as a reduction to revenue at the time of the initial sale using the most-likely amount estimation method. The most-likely amount method is based on the single most likely outcome from a range of possible consideration outcomes. The range of possible consideration outcomes are primarily derived from the following inputs: sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. Because 3M serves numerous markets, the sales incentive programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. There are no material instances where variable consideration is constrained and not recorded at the initial time of sale. Free goods are accounted for as an expense and recorded in cost of sales. Product returns are recorded as a reduction to revenue based on anticipated sales returns that occur in the normal course of business. 3M primarily has assurance-type warranties that do not result in separate performance obligations. Sales, use, value-added, and other excise taxes are not recognized in revenue. The Company has elected to present revenue net of sales taxes and other similar taxes.

For substantially all arrangements recognized over time, the Company applies the “right to invoice” practical expedient. As a result, 3M recognizes revenue at the invoice amount when the entity has a right to invoice a customer at an amount that corresponds directly with the value to the customer of the Company’s performance completed to date.

For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using 3M’s best estimate of the standalone selling price of each distinct good or service in the contract.

The Company did not recognize any material revenue in the current reporting period for performance obligations that were fully satisfied in previous periods.

The Company does not have material unfulfilled performance obligation balances for contracts with an original length greater than one year in any years presented. Additionally, the Company does not have material costs related to obtaining a contract with amortization periods greater than one year for any year presented.

3M applies ASC 606 utilizing the following allowable exemptions or practical expedients:

● Exemption to not disclose the unfulfilled performance obligation balance for contracts with an original length of one year or less.

● Practical expedient relative to costs of obtaining a contract by expensing sales commissions when incurred because the amortization period would have been one year or less.

● Portfolio approach practical expedient relative to estimation of variable consideration.

● “Right to invoice” practical expedient based on 3M’s right to invoice the customer at an amount that reasonably represents the value to the customer of 3M’s performance completed to date.

● Election to present revenue net of sales taxes and other similar taxes.

● Sales-based royalty exemption permitting future intellectual property out-licensing royalty payments to be excluded from the otherwise required remaining performance obligations disclosure

The Company recognizes revenue from the rental of durable medical devices in light of the guidance of ASC 842, Leases. The Company recognizes rental revenue based on the length of time a device is used by the patient/organization, (i) at the contracted rental rate for contracted customers and (ii) generally, retail price for non-contracted customers. The leases are short-term in nature, generally providing for daily or monthly pricing, and are all classified as operating leases.

Accounts receivable and allowances

Accounts receivable and allowances: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for bad debts, cash discounts, product returns and various other items. The allowance for doubtful accounts and product returns is based on the best estimate of the amount of probable credit losses in existing accounts receivable and anticipated sales returns. The Company determines the allowances based on historical write-off experience by industry and regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monthly. The Company does not have any significant off-balance-sheet credit exposure related to its customers.

Advertising and merchandising

Advertising and merchandising: These costs are charged to operations in the period incurred, and totaled $348 million in 2019, $396 million in 2018 and $411 million in 2017.

Research, development, and related expenses

Research, development and related expenses: These costs are charged to operations in the period incurred and are shown on a separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.911 billion in 2019, $1.821 billion in 2018 and $1.870 billion in 2017. Research and development expenses, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.253 billion in 2019, $1.253 billion in 2018 and $1.352 billion in 2017. Related expenses primarily include technical support; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments.

Internal-use software

Internal-use software: The Company capitalizes direct costs of services used in the development of, and external software acquired for use as, internal-use software. Amounts capitalized are amortized over a period of three to seven years, generally on a straight-line basis, unless another systematic and rational basis is more representative of the software’s use. Amounts are reported as a component

of either machinery and equipment or finance leases within property, plant and equipment. Fully depreciated internal-use software assets are removed from property, plant and equipment and accumulated depreciation accounts.

Environmental

Environmental: Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities related to anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company’s commitment to a plan of action, or approval by regulatory agencies. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives.

Income taxes

Income taxes: The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. As of December 31, 2019 and 2018, the Company had valuation allowances of $158 million and $67 million on its deferred tax assets, respectively. The Company recognizes and measures its uncertain tax positions based on the rules under ASC 740, Income Taxes. As described in the “New Accounting Pronouncements” section, 3M adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The Company’s accounting policy for income taxes has been updated to indicate the uses of the portfolio approach for releasing income tax effects from accumulated other comprehensive loss.

Earnings Per Share

Earnings per share: The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans during the years 2019, 2018 and 2017 were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would have had an anti-dilutive effect (8.9 million average options for 2019, 2.9 million average options for 2018, and 0.8 million average options for 2017). The computations for basic and diluted earnings per share for the years ended December 31 follow:

Earnings Per Share Computations

(Amounts in millions, except per share amounts)	2019		2018		2017
Numerator:
Net income attributable to 3M	$	4,570	$	5,349	$	4,858
Denominator:
Denominator for weighted average 3M common shares outstanding – basic		577.0		588.5		597.5
Dilution associated with the Company’s stock-based compensation plans		8.1		13.5		15.2
Denominator for weighted average 3M common shares outstanding – diluted		585.1		602.0		612.7
Earnings per share attributable to 3M common shareholders – basic	$	7.92	$	9.09	$	8.13
Earnings per share attributable to 3M common shareholders – diluted	$	7.81	$	8.89	$	7.93

Stock-based compensation

Stock-based compensation: The Company recognizes compensation expense for its stock-based compensation programs, which include stock options, restricted stock, restricted stock units (RSUs), performance shares, and the General Employees’ Stock Purchase Plan (GESPP). Under applicable accounting standards, the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. However, with respect to income taxes, the related deduction from taxes payable is based on the award’s intrinsic value at the time of exercise (for an option) or on the fair value upon vesting of the award (for RSUs), which can be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the deferred tax benefit recognized as compensation cost is recognized in the financial statements. These excess tax benefits/deficiencies are recognized as income tax benefit/expense in the statement of income and, within the statement of cash flows, are classified in operating activities in the same manner as other cash flows related to income taxes. The extent of excess tax benefits/deficiencies is subject to variation in 3M stock price and timing/extent of RSU vestings and employee stock option exercises.

Comprehensive income

Comprehensive income: Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Changes in Equity. Accumulated other comprehensive income (loss) is composed of foreign currency translation effects (including hedges of net investments in international companies), defined benefit pension and postretirement plan adjustments, unrealized gains and losses on

available-for-sale debt securities, and unrealized gains and losses on cash flow hedging instruments. The Company uses the portfolio approach for releasing income tax effects from accumulated other comprehensive income.

Derivatives and hedging activities

Derivatives and hedging activities: All derivative instruments within the scope of ASC 815, Derivatives and Hedging, are recorded on the balance sheet at fair value. The Company uses interest rate swaps, currency and commodity price swaps, and foreign currency forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with U.S. generally accepted accounting principles. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. Cash flows from derivative instruments are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives.

Credit risk

Credit risk: The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. The Company does not anticipate nonperformance by any of these counterparties. 3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation.

Fair value measurements

Fair value measurements: 3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Acquisitions

Acquisitions: The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations. This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting. In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations. These transactions are largely reflected as additional asset purchase and investment activity.

Leases

Leases: 3M determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. 3M determines certain service agreements that contain the right to use an underlying asset are not leases because 3M does not control how and for what purpose the identified asset is used. Examples of such agreements include master supply agreements, product processing agreements, warehouse and distribution services agreements, power purchase agreements, and transportation purchase agreements.

After adoption of ASU 2016-02 and related standards, operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is 3M’s incremental borrowing rate or, if available, the rate implicit in the lease. 3M determines the incremental borrowing rate for leases using a portfolio approach based primarily on the lease term and the economic environment of the applicable country or region.

As a lessee, the Company leases distribution centers, office space, land, and equipment. Certain 3M lease agreements include rental payments adjusted annually based on changes in an inflation index. 3M’s leases do not contain material residual value guarantees or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term.

Certain leases include one or more options to renew, with terms that can extend the lease term up to five years. 3M includes options to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, 3M is not reasonably certain to exercise such options.

For the measurement and classification of its lease agreements, 3M groups lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments primarily include payments for non-lease components, such as maintenance costs, payments for leased assets used beyond their noncancelable lease term as adjusted for contractual options to terminate or renew, and payments for non-components such as sales tax. Certain 3M leases contain immaterial variable lease payments based on number of units produced.

New Accounting Pronouncements

New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases, and in July 2018, issued ASU No. 2018-10 and 2018-11 and in December 2018, issued ASU No. 2018-20 and in March 2019, issued ASU No. 2019-01, which amended the standard, replacing existing lease accounting guidance. The new standard introduced a lessee model that requires entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to current accounting. The ASU did not make fundamental changes to previous lessor accounting. However, it modified what qualifies as a sales-type and direct financing lease and related accounting and aligned a number of the underlying principles with those of the ASC 606 revenue standard, such as evaluating how collectability should be considered and determining when profit can be recognized. The guidance eliminated existing real estate-specific provisions and requires expanded qualitative and quantitative disclosures. For 3M, the ASU was effective January 1, 2019. As amended, the ASU provided for retrospective transition applied to earliest period presented or an adoption method by which entities would not need to recast the comparative periods presented. 3M did not recast prior periods as it adopted this ASU. As a result of adopting this ASU, 3M recorded approximately $0.8 billion of lease assets and lease liabilities related to its operating leases and a $14 million adjustment to retained earnings related to transition upon this ASU’s adoption.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope, and in November 2018, issued ASU No. 2018-19 and in April 2019, issued ASU No. 2019-04 and in May 2019, issued ASU No. 2019-05, and in November 2019, issued ASU No. 2019-11, which amended the standard. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. With respect to available-for-sale (AFS) debt securities, the ASU amends the current other-than-temporary impairment model. For such securities with unrealized losses, entities will still consider if a portion of any impairment is related only to credit losses and therefore recognized as a reduction in income. However, rather than also reflecting that

credit loss amount as a permanent reduction in cost (amortized cost) basis of that AFS debt security, the ASU requires that credit losses be reflected as an allowance. As a result, under certain circumstances, a recovery in value could result in previous allowances, or portions thereof, reversing back into income. For 3M, this ASU is effective January 1, 2020, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Based on the conducted analyses and due to the nature and extent of 3M’s financial instruments in scope of this ASU (primarily accounts receivable) and the historical, current and expected credit quality of its customers, the Company does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities and in October 2018, issued ASU No. 2018-16, which amended the standard. The ASU amends existing guidance to simplify the application of hedge accounting in certain situations and allow companies to better align their hedge accounting with their risk management activities. Existing standards contain certain requirements for an instrument to qualify for hedge accounting relative to initial and ongoing assessments of hedge effectiveness. While an initial quantitative test to establish the hedge relationship is highly effective would still be required, the new ASU permits subsequent qualitative assessments for certain hedges instead of a quantitative test and expands the timeline for performing the initial quantitative assessment. The ASU also simplifies related accounting by eliminating the requirement to separately measure and report hedge ineffectiveness. Instead, for qualifying cash flow and net investment hedges, the entire change in fair value (including the amount attributable to ineffectiveness) will be recorded within other comprehensive income and reclassified to earnings in the same income statement line that is used to present the earnings effect of the hedged item when the hedged item affects earnings. For fair value hedges, generally, the entire change in fair value of the hedging instrument would also be presented in the same income statement line as the hedged item. The new standard also simplifies the accounting for fair value hedges of interest rate risks and expands an entity’s ability to hedge nonfinancial and financial risk components. In addition, the guidance also eases certain documentation requirements, modifies the accounting for components excluded from the assessment of hedge effectiveness, and requires additional tabular disclosures of derivative and hedge-related information. For 3M, this ASU was effective January 1, 2019, with a modified retrospective transition resulting in a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the adoption date. The adoption of this ASU did not have a material impact on 3M’s consolidated results of operations and financial condition.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income (AOCI) arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. An entity that elects to make this reclassification must consider all items in AOCI that have tax effects stranded as a result of the tax rate change, and must disclose the reclassification of these tax effects as well as the entity’s policy for releasing income tax effects from AOCI. The ASU may be applied either retrospectively or as of the beginning of the period of adoption. For 3M, this ASU was effective January 1, 2019 and resulted in a reclassification between retained earnings and AOCI. As a result of adopting this ASU, the Company increased retained earnings by approximately $0.9 billion, with an offsetting increase to accumulated other comprehensive loss for the same amount.

​
In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e. hosting arrangement) with the guidance on capitalizing costs in ASC 350-40, Internal-Use Software. The ASU permits either a prospective or retrospective transition approach. For 3M, the ASU is effective as of January 1, 2020 and the Company plans on prospective adoption. While the Company utilized limited cloud-computing services where significant implementation costs were incurred for the periods presented, 3M will apply this ASU to its expected expanded use of applicable services.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step-up in the tax basis of goodwill. The transition requirements are primarily prospective and the effective date for 3M is January 1, 2021, with early adoption permitted. As 3M does not have material activity associated with items such as franchise taxes or the types of transactions described above, does not typically have entities subject to relevant loss limitations and is not currently addressing

enacted tax law changes for which this ASU applies, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In January 2020, the FASB issued ASU No. 2020-01, Clarifying the Interactions between Topic 321, Investments—Equity Securities, Topic 323, Investments—Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging. This ASU clarifies that when accounting for certain equity securities, a Company should consider observable transactions before applying or upon discontinuing the equity method of accounting for the purposes of applying the measurement alternative. Further, this ASU notes when determining the accounting for certain derivatives, a Company should not consider if the underlying securities would be accounted for under the equity method or fair value option. The transition requirements are prospective and the effective date for 3M is January 1, 2021, with early adoption permitted. As 3M does not currently have a material amount of equity securities and equity method investments or relevant derivatives, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition, but will apply such guidance, where applicable, to future circumstances.

XML

Leases - Maturities of lease liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Finance Leases
2020	$ 21
2021	17
2022	16
2023	15
2024	14
After 2024	55
Total	138
Less: Amounts representing interest	6
Present value of future minimum lease payments	132
Less: Current obligations	21
Long-term obligations	111	$ 75
Operating Leases
2020	267
2021	191
2022	138
2023	97
2024	65
After 2024	173
Total	931
Less: Amounts representing interest	77
Present value of future minimum lease payments	854
Current operating lease liabilities	247
Noncurrent operating lease liabilities	$ 607
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent us-gaap:OperatingLeaseLiabilityNoncurrent

XML

Supplemental Equity and Comprehensive Income Information (Tables)

12 Months Ended

Dec. 31, 2019

Supplemental Equity and Comprehensive Income Information

Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M

Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component

			Defined Benefit		Cash Flow		Total
			Pension and		Hedging		Accumulated
	Cumulative		Postretirement		Instruments,		Other
	Translation		Plans		Unrealized		Comprehensive
(Millions)	Adjustment		Adjustment		Gain (Loss)		Income (Loss)
Balance at December 31, 2016, net of tax:	$	(2,008)	$	(5,328)	$	91	$	(7,245)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		91		(604)		(311)		(824)
Amounts reclassified out		—		487		(7)		480
Total other comprehensive income (loss), before tax		91		(117)		(318)		(344)
Tax effect		279		169		115		563
Total other comprehensive income (loss), net of tax		370		52		(203)		219
Balance at December 31, 2017, net of tax:	$	(1,638)	$	(5,276)	$	(112)	$	(7,026)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(414)		55		133		(226)
Amounts reclassified out		—		606		96		702
Total other comprehensive income (loss), before tax		(414)		661		229		476
Tax effect		(47)		(217)		(53)		(317)
Total other comprehensive income (loss), net of tax		(461)		444		176		159
Transfer of ownership involving non-wholly owned subsidiaries		1		—		—		1
Balance at December 31, 2018, net of tax:	$	(2,098)	$	(4,832)	$	64	$	(6,866)
Impact of adoption of ASU No. 2018-02 (See Note 1)		(13)		(817)		(23)		(853)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		102		(1,227)		(26)		(1,151)
Amounts reclassified out		142		459		(70)		531
Total other comprehensive income (loss), before tax		244		(768)		(96)		(620)
Tax effect		(32)		208		24		200
Total other comprehensive income (loss), net of tax		212		(560)		(72)		(420)
Balance at December 31, 2019, net of tax:	$	(1,899)	$	(6,209)	$	(31)	$	(8,139)

Reclassifications Out of Accumulated Other Comprehensive Income

Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M

	Amounts Reclassified from
Details about Accumulated Other	Accumulated Other Comprehensive Income
Comprehensive Income Components	Year ended December 31,						Location on Income
(Millions)	2019		2018		2017		Statement
Cumulative translation adjustment
Deconsolidation of Venezuelan subsidiary	$	(142)	$	—	$	—	Other (expense) income, net
Total before tax		(142)		—		—
Tax effect		—		—		—	Provision for income taxes
Net of tax	$	(142)	$	—	$	—
Defined benefit pension and postretirement plans adjustments
Gains (losses) associated with defined benefit pension and postretirement plans amortization
Prior service benefit		69		76		89	See Note 13
Net actuarial loss		(478)		(678)		(570)	See Note 13
Curtailments/Settlements		(48)		(4)		(6)	See Note 13
Deconsolidation of Venezuelan subsidiary		(2)		—		—	Other (expense) income, net
Total before tax		(459)		(606)		(487)
Tax effect		110		145		117	Provision for income taxes
Net of tax	$	(349)	$	(461)	$	(370)
Cash flow hedging instruments gains (losses)
Foreign currency forward/option contracts	$	74	$	(95)	$	8	Cost of sales
Interest rate swap contracts		(4)		(1)		(1)	Interest expense
Total before tax		70		(96)		7
Tax effect		(17)		19		(3)	Provision for income taxes
Net of tax	$	53	$	(77)	$	4
Total reclassifications for the period, net of tax	$	(438)	$	(538)	$	(366)

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Leases - Components of lease expense (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Lease expense
Operating lease cost	$ 308
Amortization of assets	20
Interest on lease liabilities	2
Variable Lease, Cost	93
Total net lease cost	$ 423

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Pension and Postretirement Benefit Plans - Future Benefit Payments (Details) - Funded $ in Millions	Dec. 31, 2019 USD ($)
Qualified and Non-qualified Pension Benefits | United States
Future Pension and Postretirement Benefit Payments
2020 Benefit Payments	$ 1,103
2021 Benefit Payments	1,096
2022 Benefit Payments	1,104
2023 Benefit Payments	1,106
2024 Benefit Payments	1,111
Next five years	5,521
Qualified and Non-qualified Pension Benefits | International
Future Pension and Postretirement Benefit Payments
2020 Benefit Payments	246
2021 Benefit Payments	253
2022 Benefit Payments	272
2023 Benefit Payments	284
2024 Benefit Payments	302
Next five years	1,656
Postretirement Benefits
Future Pension and Postretirement Benefit Payments
2020 Benefit Payments	121
2021 Benefit Payments	128
2022 Benefit Payments	136
2023 Benefit Payments	142
2024 Benefit Payments	148
Next five years	$ 789

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Pension and Postretirement Benefit Plans - Opening Paragraph Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
United States
Schedule Of Defined Contribution Plans Disclosures
Company match of eligible compensation of employee contributions into 401(k)	5.00%
Company cash match of employee contributions for employees hired after January 1, 2009	100.00%
Company contribution to employer retirement income account for employees hired on or after January 1, 2009	3.00%
Expenses related to defined contribution plans	$ 186	$ 173	$ 159
International
Schedule Of Defined Contribution Plans Disclosures
Expenses related to defined contribution plans	$ 96	$ 99	$ 88
Maximum | United States
Schedule Of Defined Contribution Plans Disclosures
Company cash match of employee contributions for employees hired prior to January 1, 2009	60.00%
Minimum | United States
Schedule Of Defined Contribution Plans Disclosures
Company cash match of employee contributions for employees hired prior to January 1, 2009	45.00%

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Derivatives - Cash Flow Hedges - Gain (Loss) in OCI or Reclassified from AOCI (Details) - Cash flow hedge $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative	$ (26)
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	70
Foreign currency forward/option contracts
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative	96
Foreign currency forward/option contracts | Cost of sales
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	74
Interest rate swap contracts
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative	(122)
Interest rate swap contracts | Interest expense.
Derivatives in Cash Flow Hedging Relationships
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	$ (4)

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Fair Value Measurements - Recurring Reconciliation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3)
Balance at the beginning of the period	$ 40	$ 30	$ 20
Total gains or losses included in earnings	0	0	0
Total gains or losses included in other comprehensive income	0	0	0
Purchases and issuances	9	13	13
Sales and settlements	(3)	(3)	(3)
Transfers in and/or out of Level 3	0	0	0
Balance at the end of the period	46	40	30
Total gains or losses included in other comprehensive income	$ 0	$ 0	$ 0

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Consolidated Balance Sheet - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 2,353	$ 2,853
Marketable securities - current	98	380
Accounts receivable - net of allowances of $161 and $95	4,791	5,020
Inventories
Finished goods	2,003	2,120
Work in process	1,194	1,292
Raw materials and supplies	937	954
Total inventories	4,134	4,366
Prepaids	704	741
Other current assets	891	349
Total current assets	12,971	13,709
Property, plant and equipment	26,124	24,873
Less: Accumulated depreciation	(16,791)	(16,135)
Property, plant and equipment - net	9,333	8,738
Operating lease right of use assets	858
Goodwill	13,444	10,051
Intangible assets - net	6,379	2,657
Other assets	1,674	1,345
Total assets	44,659	36,500
Current liabilities
Short-term borrowings and current portion of long-term debt	2,795	1,211
Accounts payable	2,228	2,266
Accrued payroll	702	749
Accrued income taxes	194	243
Operating lease liabilities - current	247
Other current liabilities	3,056	2,775
Total current liabilities	9,222	7,244
Long-term debt	17,518	13,411
Pension and postretirement benefits	3,911	2,987
Operating lease liabilities	607
Other liabilities	3,275	3,010
Total liabilities	34,533	26,652
Commitments and contingencies (Note 16)
3M Company shareholders' equity:
Common stock par value, $.01 par value; 944,033,056 shares issued; Shares outstanding - 2019: 575,184,835; Shares outstanding - 2018: 576,575,168	9	9
Additional paid-in capital	5,907	5,643
Retained earnings	42,135	40,636
Treasury stock	(29,849)	(29,626)
Accumulated other comprehensive income (loss)	(8,139)	(6,866)
Total 3M Company shareholders' equity	10,063	9,796
Noncontrolling interest	63	52
Total equity	10,126	9,848
Total liabilities and equity	$ 44,659	$ 36,500

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Quarterly Data (Unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Data (Unaudited)

Quarterly Data (Unaudited)

NOTE 20. Quarterly Data (Unaudited)

(Millions, except per-share amounts)	First		Second		Third		Fourth		Year
2019	Quarter		Quarter		Quarter		Quarter		2019
Net sales	$	7,863	$	8,171	$	7,991	$	8,111	$	32,136
Cost of sales		4,310		4,313		4,188		4,325		17,136
Net income including noncontrolling interest		893		1,131		1,588		970		4,582
Net income attributable to 3M		891		1,127		1,583		969		4,570
Earnings per share attributable to 3M common shareholders - basic		1.54		1.95		2.75		1.68		7.92
Earnings per share attributable to 3M common shareholders - diluted		1.51		1.92		2.72		1.66		7.81

(Millions, except per-share amounts)	First		Second		Third		Fourth		Year
2018	Quarter		Quarter		Quarter		Quarter		2018
Net sales	$	8,278	$	8,390	$	8,152	$	7,945	$	32,765
Cost of sales		4,236		4,227		4,159		4,060		16,682
Net income including noncontrolling interest		606		1,862		1,546		1,349		5,363
Net income attributable to 3M		602		1,857		1,543		1,347		5,349
Earnings per share attributable to 3M common shareholders - basic		1.01		3.14		2.64		2.32		9.09
Earnings per share attributable to 3M common shareholders - diluted		0.98		3.07		2.58		2.27		8.89

Gross profit is calculated as net sales minus cost of sales.

In 2019, the Company recorded significant litigation-related charges related to PFAS (certain perfluorinated compounds) matters and coal mine dust respirator mask lawsuits as further described in Note 16, which reduced net income by $590 million, or $1.01 per diluted share, of which $424 million, or $0.72 per diluted share occurred in the first quarter and $166 million, or $0.29 per diluted share occurred in the fourth quarter. In the second quarter of 2019, the Company recorded a non-operating charge related to the deconsolidation of its Venezuelan subsidiary, which reduced net income by $162 million, or $0.28 per diluted share.

In the first quarter of 2018, the Company recorded significant litigation-related charges related to the previously disclosed resolution of the State of Minnesota Natural Resource Damages (NRD) lawsuit, which reduced net income by $710 million, or $1.16 per diluted share. Refer to Note 16 for additional details. Additionally, the first quarter of 2018 was impacted by a measurement period adjustment related to the enactment of the Tax Cuts and Jobs Act (TCJA), which reduced net income by $217 million, or $0.36 per diluted share. Refer to Note 10 for additional details.

In the fourth quarter of 2018, the Company’s ongoing IRS examination under the Compliance Assurance Process (CAP) and new guidance released under the Tax Cuts and Jobs Act resulted in a charge that reduced net income by $60 million, or $0.11 per diluted share. Additionally, in the fourth quarter of 2018, the Company finalized the tax impact related to TCJA with a reversal of previously recorded tax expense that increased net income by $41 million, or $0.07 per diluted share. On a combined basis, these items, including the impacts detailed above for the first quarter of 2018, reduced net income by $946 million, or $1.57 per diluted share in 2018.

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Commitments and Contingencies - Warranties and Guarantees (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Warranties/Guarantees:
Accrued product warranty liabilities	$ 51	$ 48

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Long-Term Debt and Short-Term Borrowings

12 Months Ended

Dec. 31, 2019

Long-Term Debt and Short-Term Borrowings

Long-Term Debt and Short-Term Borrowings

NOTE 12. Long-Term Debt and Short-Term Borrowings

The following debt tables reflect effective interest rates, which include the impact of interest rate swaps, as of December 31, 2019. If the debt was issued on a combined basis, the debt has been separated to show the impact of the fixed versus floating effective interest rates. Carrying value includes the impact of debt issuance costs and fair value hedging activity. For notes subject to in-substance defeasance, the final maturity reflected below is that associated with the redemption date included in the irrevocable instructions given to the trust. Long-term debt and short-term borrowings as of December 31 consisted of the following:

Long-Term Debt

(Millions)	Currency/	Effective		Final	Carrying Value
Description / 2019 Principal Amount	Fixed vs. Floating	Interest Rate		Maturity Date	2019		2018
Medium-term note (repaid in 2019)	USD Floating	—	%	2019	$	—	$	596
Medium-term note (repaid in 2019)	USD Fixed	—	%	2019		—		25
Third lien senior secured notes subject to in-substance defeasance ($445 million)	USD Fixed	12.50	%	2020		463		—
Medium-term note (650 million Euros)	Euro Floating	—	%	2020		726		743
Medium-term note ($300 million)	USD Floating	2.16	%	2020		299		294
Medium-term note ($200 million)	USD Floating	1.98	%	2020		200		197
Eurobond (300 million Euros)	Euro Floating	—	%	2021		346		357
Eurobond (300 million Euros)	Euro Fixed	1.97	%	2021		334		341
Medium-term note ($600 million)	USD Fixed	1.63	%	2021		599		599
Medium-term note ($200 million)	USD Fixed	3.07	%	2021		199		199
Medium-term note ($200 million)	USD Floating	1.90	%	2021		204		201
Medium-term note (500 million Euros)	Euro Fixed	0.45	%	2022		557		570
Medium-term note ($600 million)	USD Fixed	2.17	%	2022		597		596
Medium-term note ($450 million)	USD Fixed	2.76	%	2022		449		—
Medium-term note (600 million Euros)	Euro Fixed	1.14	%	2023		665		680
Medium-term note ($650 million)	USD Fixed	2.26	%	2023		648		648
Registered note ($500 million)	USD Fixed	1.86	%	2023		497		—
Medium-term note ($300 million)	USD Floating	2.21	%	2024		299		299
Medium-term note ($300 million)	USD Fixed	3.30	%	2024		299		298
Medium-term note ($500 million)	USD Fixed	2.98	%	2024		503		—
Medium-term note ($550 million)	USD Fixed	3.04	%	2025		547		547
Registered note ($750 million)	USD Fixed	2.12	%	2025		743		—
Medium-term note (750 million Euros)	Euro Fixed	1.66	%	2026		826		844
Medium-term note ($650 million)	USD Fixed	2.37	%	2026		643		642
Medium-term note ($850 million)	USD Fixed	2.95	%	2027		842		841
30-year debenture ($220 million)	USD Fixed	6.44	%	2028		226		226
Medium-term note ($600 million)	USD Fixed	3.62	%	2028		597		597
Medium-term note ($800 million)	USD Fixed	3.38	%	2029		796		—
Registered note ($1 billion)	USD Fixed	2.50	%	2029		984		—
Medium-term note (500 million Euros)	Euro Fixed	1.90	%	2030		549		562
Medium-term note (500 million Euros)	Euro Fixed	1.54	%	2031		554		567
30-year bond ($555 million)	USD Fixed	5.73	%	2037		551		551
Floating rate note ($96 million)	USD Floating	1.58	%	2041		96		95
Medium-term note ($325 million)	USD Fixed	4.05	%	2044		314		314
Floating rate note ($55 million)	USD Floating	1.54	%	2044		53		53
Medium-term note ($500 million)	USD Fixed	3.37	%	2046		475		474
Medium-term note ($500 million)	USD Fixed	3.68	%	2047		492		491
Medium-term note ($650 million)	USD Fixed	4.07	%	2048		637		637
Medium-term note ($500 million)	USD Fixed	3.78	%	2048		506		—
Registered note ($1 billion)	USD Fixed	3.37	%	2049		968		—
Other borrowings	Various	1.63	%	2020-2040		76		72
Total long-term debt					$	19,359	$	14,156
Less: current portion of long-term debt						1,841		745
Long-term debt (excluding current portion)					$	17,518	$	13,411

Post-Swap Borrowing (Long-Term Debt, Including Current Portion)

	2019				2018
	Carrying		Effective		Carrying		Effective
(Millions)	Value		Interest Rate		Value		Interest Rate
Fixed-rate debt	$	17,061	3.01	%	$	11,249	2.67	%
Floating-rate debt		2,298	1.06	%		2,907	1.44	%
Total long-term debt, including current portion	$	19,359			$	14,156

Short-Term Borrowings and Current Portion of Long-Term Debt

	Effective		Carrying Value
(Millions)	Interest Rate		2019		2018
Current portion of long-term debt	3.85	%	$	1,841	$	745
U.S. dollar commercial paper	1.61	%		150		435
Japan subsidiary credit facility	0.13	%		632		—
Germany subsidiary credit facility	0.25	%		168		—
Other borrowings	4.85	%		4		31
Total short-term borrowings and current portion of long-term debt			$	2,795	$	1,211

Other short-term borrowings primarily consisted of bank borrowings by international subsidiaries.

Future Maturities of Long-term Debt

Maturities of long-term debt in the table below reflect the impact of put provisions associated with certain debt instruments and are net of the unaccreted debt issue costs such that total maturities equal the carrying value of long-term debt as of December 31, 2019. The maturities of long-term debt for the periods subsequent to December 31, 2019 are as follows (in millions):

										After
2020		2021		2022		2023		2024		2024		Total
$	1,841	$	1,682	$	1,603	$	1,811	$	1,101	$	11,321	$	19,359

As a result of put provisions associated with certain debt instruments, long-term debt payments due in 2020 include floating rate notes totaling $149 million (classified as current portion of long-term debt).

Credit Facilities

In November 2019, 3M amended and restated its existing $3.75 billion five-year revolving credit facility expiring in March 2021 to a $3.0 billion five-year revolving credit facility expiring in November 2024. The revolving credit agreement includes a provision under which 3M may request an increase of up to $1.0 billion (at lender’s discretion), bringing the total facility up to $4.0 billion. In addition, 3M entered into a $1.25 billion 364-day credit facility expiring in November 2020. The 364-day credit agreement includes a provision under which 3M may convert any advances outstanding on the maturity date into term loans having a maturity date one year later. These credit facilities were undrawn at December 31, 2019. Under both the $3.0 billion and $1.25 billion credit agreements, 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 (as defined in the agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At December 31, 2019, this ratio was approximately 17 to 1. Debt covenants do not restrict the payment of dividends.

Other Credit Facilities

Apart from the committed credit facilities described above, in September 2019, 3M entered into a credit facility expiring in July 2020 in the amount of 80 billion Japanese Yen. At December 31, 2019, 69 billion Japanese Yen, or approximately $632 million at December 31, 2019 exchange rates, was drawn and outstanding. In November 2019, 3M entered into a credit facility expiring in November 2020 in the amount of 150 million Euros. At December 31, 2019, 150 million Euros, or $168 million at December 31, 2019 exchange rates, was drawn and outstanding.

The Company also had an additional $268 million in stand-alone letters of credit and bank guarantees issued and outstanding at December 31, 2019. These instruments are utilized in connection with normal business activities.

Long-Term Debt Issuances

The principal amounts, interest rates and maturity dates of individual long-term debt issuances can be found in the long-term debt table found at the beginning of this note.

In February 2019, 3M issued $2.25 billion aggregate principal amount of fixed rate medium-term notes. These were comprised of $450 million of 3-year notes due 2022 with a coupon rate of 2.75%, $500 million of remaining 5-year notes due 2024 with a coupon rate of 3.25%, $800 million of 10-year notes due 2029 with a coupon rate of 3.375%, and $500 million of remaining 29.5-year notes due 2048 with a coupon rate of 4.00%. Issuances of the 5-year and 29.5-year notes were pursuant to a reopening of existing securities issued in September 2018.

In August 2019, 3M issued $3.25 billion aggregate principal amount of fixed rate registered notes. These were comprised of $500 million of 3.5-year notes due 2023 with a coupon rate of 1.75%, $750 million of 5.5-year notes due 2025 with a coupon rate of 2.00%, $1.0 billion of 10-year notes due 2029 with a coupon rate of 2.375%, and $1.0 billion of 30-year notes due 2049 with a coupon rate of 3.25%.

In September 2018, 3M issued $2.25 billion aggregate principal amount of medium-term notes. These were comprised of $400 million of 3-year fixed rate notes due 2021 with a coupon rate of 3.00%, $300 million of 5.5-year fixed rate notes due 2024 with a coupon rate of 3.25%, $300 million of 5.5-year floating rate notes due 2024 with a rate based on a floating three-month LIBOR index, $600 million aggregate principal amount of 10-year fixed rate medium-term notes due 2028 with a coupon rate of 3.625%, and $650 million of 30-year fixed rate notes due 2048 with a coupon rate of 4.00%. Upon debt issuance, the Company entered into a fixed-to-floating interest rate swap on $200 million aggregate principal amount of the 3-year fixed rate notes issued with an interest rate based on a three-month LIBOR index.

In October 2017, 3M issued $2.0 billion aggregate principal amount of fixed rate medium-term notes. These were comprised of $650 million of 5.5-year notes due 2023 with a coupon rate of 2.25%, $850 million of 10-year notes due 2027 with a coupon rate of 2.875%, and $500 million of 30-year notes due 2047 with a coupon rate of 3.625%.

Long-Term Debt Maturities and Extinguishments

In June 2019, 3M repaid $625 million aggregate principal amount of fixed-rate medium-term notes that matured.

In 2019, 3M also assumed approximately $2.6 billion of debt in connection with the acquisitions of Acelity and M*Modal (See Note 3) of which $2.1 billion was immediately redeemed or paid at close.

In November and August 2018, respectively, 3M repaid 500 million Euros and $450 million aggregate principal amount of floating rate medium-term notes that matured.
​

In October 2017, 3M, via cash tender offers, repurchased $305 million aggregate principal amount of its outstanding notes. This included $110 million of its $330 million principal amount of 6.375% notes due 2028 and $195 million of its $750 million principal amount of 5.70% notes due 2037. The Company recorded an early debt extinguishment charge of approximately $96 million in the fourth quarter of 2017 within interest expense, the cash outflow for which is recorded within other financing activities on the statement of cash flows. This charge reflected the differential between the carrying value and the amount paid to acquire the tendered notes and related expenses.

In June 2017, 3M repaid $650 million aggregate principal amount of fixed rate medium-term notes that matured.

In-Substance Defeasance

In conjunction with the October 2019 acquisition of Acelity (See Note 3), 3M assumed outstanding debt of the business, of which $445 million in principal amount of third lien senior secured notes (Third Lien Notes) maturing in 2021 with a coupon rate of 12.5% was not immediately redeemed at closing. Instead, at closing, 3M satisfied and discharged the Third Lien Notes via an in-substance defeasance, whereby 3M transferred held-to-maturity debt securities to a trust with irrevocable instructions to redeem the Third Lien Notes on May 1, 2020. The trust assets are restricted from use in 3M’s operations and may only be used for the redemption of the Third Lien Notes. These actions, however, do not represent a legal defeasance. Therefore, as of December 31, 2019, this debt is included in current portion of long-term debt and the related trust assets comprised of a held-to-maturity debt security are included in other current assets on the Company’s consolidated balance sheet.

Floating Rate Notes

At various times, 3M has issued floating rate notes containing put provisions. 3M would be required to repurchase these securities at various prices ranging from 99 percent to 100 percent of par value according to the reduction schedules for each security. In December 2004, 3M issued a forty-year $60 million floating rate note, with a rate based on a floating LIBOR index. Under the terms of this floating rate note due in 2044, holders have an annual put feature at 100 percent of par value from 2014 and every anniversary thereafter until final maturity. Under the terms of the floating rate notes due in 2027, 2040 and 2041, holders have put options that commence ten years from the date of issuance and each third anniversary thereafter until final maturity at prices ranging from 99 percent to 100 percent of par value. For the periods presented, 3M was required to repurchase an immaterial amount of principal on the aforementioned floating rate notes.

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Supplemental Share Information - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Supplemental Share Information Treasury Stock RollForward
Treasury Stock, Shares, Beginning Balance	367,457,888	349,148,819	347,306,778
Reacquired stock	7,575,647	23,526,293	10,209,963
Issuances pursuant to stock options and benefit plans	(6,185,314)	(5,217,224)	(8,367,922)
Treasury Stock, Shares, Ending Balance	368,848,221	367,457,888	349,148,819

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies

Commitments and Contingencies

NOTE 16. Commitments and Contingencies

Unconditional Purchase Obligations:

Unconditional purchase obligations are defined as an agreement to purchase goods or services that is enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances). The Company estimates its total unconditional purchase obligation commitment (for those contracts with terms in excess of one year) as of December 31, 2019, at $983 million. Payments by year are estimated as follows: 2020 ($306 million), 2021 ($278 million), 2022 ($156 million), 2023 ($184 million), 2024 ($42 million) and after 2024 ($17 million). Many of these commitments relate to take or pay contracts, in which 3M guarantees payment to ensure availability of products or services that are sold to customers. The Company expects to receive consideration (products or services) for these unconditional purchase obligations. The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated. The majority of 3M’s products and services are purchased as needed, with no unconditional commitment. For this reason, these amounts will not provide an indication of the Company’s expected future cash outflows related to purchases.

Warranties/Guarantees:

3M’s accrued product warranty liabilities, recorded on the Consolidated Balance Sheet as part of current and long-term liabilities, are estimated at approximately $51 million at December 31, 2019, and $48 million at December 31, 2018. Further information on product warranties are not disclosed, as the Company considers the balance immaterial to its consolidated results of operations and financial condition. The fair value of 3M guarantees of loans with third parties and other guarantee arrangements are not material.

Related Party Activity:

3M does not have any material related party activity.

Legal Proceedings:

The Company and some of its subsidiaries are involved in numerous claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. These claims, lawsuits and proceedings include, but are not limited to, products liability (involving products that the Company now or formerly manufactured and sold), intellectual property, commercial, antitrust, federal False Claims Act, securities, and state and federal environmental laws. Unless otherwise stated, the Company is vigorously defending all such litigation and proceedings. From time to time, the Company also receives subpoenas or requests for information from various government agencies. The Company generally responds to such subpoenas and requests in a cooperative, thorough and timely manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company. Such subpoenas and requests can also lead to the assertion of claims or the commencement of administrative, civil or criminal legal proceedings against the Company and others, as well as to settlements. The outcomes of legal proceedings and regulatory matters are often difficult to predict. Any determination that the Company’s operations or activities are not, or were not, in compliance with applicable laws or regulations could result in the imposition of fines, civil or criminal penalties, and equitable remedies, including disgorgement, suspension or debarment or injunctive relief.

Process for Disclosure and Recording of Liabilities Related to Legal Proceedings

Many lawsuits and claims involve highly complex issues relating to causation, scientific evidence, and alleged actual damages, all of which are otherwise subject to substantial uncertainties. Assessments of lawsuits and claims can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. When making determinations about recording liabilities related to legal proceedings, the Company complies with the requirements of ASC 450, Contingencies, and related guidance, and records liabilities in those instances where it can reasonably estimate the amount of the loss and when liability is probable. Where the reasonable estimate of the probable loss is a range, the Company records as an accrual in its financial statements the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be made. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred.

Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of presently recorded liabilities. Many of the matters described are at preliminary stages or seek an indeterminate amount of damages. It is not uncommon for claims to be resolved over many years. A future adverse ruling, settlement, unfavorable development, or increase in accruals for one or more of these matters could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. Although the Company cannot estimate its exposure to all legal proceedings, the Company currently believes that the ultimate outcome of legal proceedings or future charges, if any, would not have a material adverse effect on the consolidated financial position of the Company. Based on experience and developments, the Company reexamines its estimates of probable liabilities and associated expenses and receivables each period, and whether it is able to estimate a liability previously determined to be not estimable and/or not probable. Where appropriate, the Company makes additions to or adjustments of its estimated liabilities. As a result, the current estimates of the potential impact on the Company’s consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company could change in the future.

Process for Disclosure and Recording of Insurance Receivables Related to Legal Proceedings

The Company estimates insurance receivables based on an analysis of the terms of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim and remaining coverage, and records an amount it has concluded is likely to be recovered. For those insured legal proceedings where the Company has recorded an accrued liability in its financial statements, the Company also records receivables for the amount of insurance that it expects to recover under the Company’s insurance program. For those insured matters where the Company has not recorded an accrued liability because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it expects to recover for the expense incurred.

The following sections first describe the significant legal proceedings in which the Company is involved, and then describe the liabilities and associated insurance receivables the Company has accrued relating to its significant legal proceedings.

Respirator Mask/Asbestos Litigation

As of December 31, 2019, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 1,727 individual claimants, compared to approximately 2,320 individual claimants with actions pending at December 31, 2018.

The vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of some of the Company’s mask and respirator products and seek damages from the Company and other defendants for alleged personal injury from workplace exposures to asbestos, silica, coal mine dust or other occupational dusts found in products manufactured by other defendants or generally in the workplace. A minority of the lawsuits and claims resolved by and currently pending against the Company generally allege personal injury from occupational exposure to asbestos from products previously manufactured by the Company, which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company premises.

The Company’s current volume of new and pending matters is substantially lower than it experienced at the peak of filings in 2003. The Company expects that filing of claims by unimpaired claimants in the future will continue to be at much lower levels than in the past. Accordingly, the number of claims alleging more serious injuries, including mesothelioma, other malignancies, and black lung disease, will represent a greater percentage of total claims than in the past. Over the past twenty plus years, the Company has prevailed in fourteen of the fifteen cases tried to a jury (including the lawsuits in 2018 described below). In 2018, 3M received a jury verdict in its favor in two lawsuits – one in California state court in February and the other in Massachusetts state court in December – both involving allegations that 3M respirators were defective and failed to protect the plaintiffs against asbestos fibers. In April 2018, a jury in state court in Kentucky found 3M’s 8710 respirators failed to protect two coal miners from coal mine dust and awarded compensatory damages of approximately $2 million and punitive damages totaling $63 million. In August 2018, the trial court entered judgment and the Company appealed. During March and April 2019, the Company agreed in principle to settle a substantial majority of the coal mine dust lawsuits in Kentucky and West Virginia for $340 million, including the jury verdict in April 2018 in the Kentucky case mentioned above. That settlement has now been completed, and the appeal has been dismissed.

The Company has demonstrated in these past trial proceedings that its respiratory protection products are effective as claimed when used in the intended manner and in the intended circumstances. Consequently, the Company believes that claimants are unable to establish that their medical conditions, even if significant, are attributable to the Company’s respiratory protection products. Nonetheless, the Company’s litigation experience indicates that claims of persons alleging more serious injuries, including mesothelioma, other malignancies, and black lung disease, are costlier to resolve than the claims of unimpaired persons, and it therefore believes the average cost of resolving pending and future claims on a per-claim basis will continue to be higher than it experienced in prior periods when the vast majority of claims were asserted by medically unimpaired claimants.

As previously reported, the State of West Virginia, through its Attorney General, filed a complaint in 2003 against the Company and two other manufacturers of respiratory protection products in the Circuit Court of Lincoln County, West Virginia, and amended its complaint in 2005. The amended complaint seeks substantial, but unspecified, compensatory damages primarily for reimbursement of the costs allegedly incurred by the State for worker’s compensation and healthcare benefits provided to all workers with occupational pneumoconiosis and unspecified punitive damages. The case was inactive from the fourth quarter of 2007 until late 2013, other than a case management conference in March 2011. In October 2019, the court granted the State’s motion to sever its unfair trade practices claim. In January 2020, the manufacturers filed a petition with the West Virginia Supreme Court, challenging the trial court’s rulings. No liability has been recorded for this matter because the Company believes that liability is not probable and estimable at this time. In addition, the Company is not able to estimate a possible loss or range of loss given the lack of any meaningful discovery responses by the State of West Virginia, the otherwise minimal activity in this case, and the assertions of claims against two other manufacturers where a defendant’s share of liability may turn on the law of joint and several liability and by the amount of fault, if any, a jury may allocate to each defendant if the case were ultimately tried.

Respirator Mask/Asbestos Liabilities and Insurance Receivables

The Company regularly conducts a comprehensive legal review of its respirator mask/asbestos liabilities. The Company reviews recent and historical claims data, including without limitation, (i) the number of pending claims filed against the Company, (ii) the nature and mix of those claims (i.e., the proportion of claims asserting usage of the Company’s mask or respirator products and alleging exposure to each of asbestos, silica, coal or other occupational dusts, and claims pleading use of asbestos-containing products allegedly manufactured by the Company), (iii) the costs to defend and resolve pending claims, and (iv) trends in filing rates and in costs to defend and resolve claims, (collectively, the “Claims Data”). As part of its comprehensive legal review, the Company regularly provides the Claims Data to a third party with expertise in determining the impact of Claims Data on future filing trends and costs. The third party assists the Company in estimating the costs to defend and resolve pending and future claims. The Company uses these estimates to develop its best estimate of probable liability.

Developments may occur that could affect the Company’s estimate of its liabilities. These developments include, but are not limited to, significant changes in (i) the key assumptions underlying the Company’s accrual, including, the number of future claims, the nature and mix of those claims, the average cost of defending and resolving claims, and in maintaining trial readiness (ii) trial and appellate outcomes, (iii) the law and procedure applicable to these claims, and (iv) the financial viability of other co-defendants and insurers.

As a result of the March and April 2019 settlements-in-principle of the coal mine dust lawsuits mentioned above, the Company’s assessment of other current and expected coal mine dust lawsuits (including the costs to resolve all current and expected coal mine dust lawsuits in Kentucky and West Virginia), its review of its respirator mask/asbestos liabilities, and the cost of resolving claims of persons who claim more serious injuries, including mesothelioma, other malignancies, and black lung disease, the Company increased its accruals in 2019 for respirator mask/asbestos liabilities by $337 million, of which $313 million pre-tax was accrued in the first quarter of 2019. In 2019, the Company made payments for legal defense costs and settlements of $402 million related to the respirator mask/asbestos litigation. As of December 31, 2019, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of $608 million. This accrual represents the Company’s best estimate of probable loss and reflects an estimation period for future claims that may be filed against the Company approaching the year 2050. The Company cannot estimate the amount or upper end of the range of amounts by which the liability may exceed the accrual the Company has established because of the (i) inherent difficulty in projecting the number of claims that have not yet been asserted or the time period in which future claims may be asserted, (ii) the complaints nearly always assert claims against multiple defendants where the damages alleged are typically not attributed to individual defendants so that a defendant’s share of liability may turn on the law of joint and several liability, which can vary by state, (iii) the multiple factors described above that the Company considers in estimating its liabilities, and (iv) the several possible developments described above that may occur that could affect the Company’s estimate of liabilities.

As of December 31, 2019, the Company’s receivable for insurance recoveries related to the respirator mask/asbestos litigation was $4 million. The Company continues to seek coverage under the policies of certain insolvent and other insurers. Once those claims for coverage are resolved, the Company will have collected substantially all of its remaining insurance coverage for respirator mask/asbestos claims.

Respirator Mask/Asbestos Litigation — Aearo Technologies

On April 1, 2008, a subsidiary of the Company acquired the stock of Aearo Holding Corp., the parent of Aearo Technologies (“Aearo”). Aearo manufactured and sold various products, including personal protection equipment, such as eye, ear, head, face, fall and certain respiratory protection products.

As of December 31, 2019, Aearo and/or other companies that previously owned and operated Aearo’s respirator business (American Optical Corporation, Warner-Lambert LLC, AO Corp. and Cabot Corporation (“Cabot”)) are named defendants, with multiple co-defendants, including the Company, in numerous lawsuits in various courts in which plaintiffs allege use of mask and respirator products and seek damages from Aearo and other defendants for alleged personal injury from workplace exposures to asbestos, silica-related, coal mine dust, or other occupational dusts found in products manufactured by other defendants or generally in the workplace.

As of December 31, 2019, the Company, through its Aearo subsidiary, had accruals of $50 million for product liabilities and defense costs related to current and future Aearo-related asbestos and silica-related claims. This accrual represents the Company’s best estimate of Aearo’s probable loss and reflects an estimation period for future claims that may be filed against Aearo approaching the year 2050. The accrual was increased by $22 million from the year-end 2018, reflecting the Company’s assessment of pending and expected lawsuits, its review of its respirator mask/asbestos liabilities, and the cost of resolving claims of persons who claim more serious injuries. Responsibility for legal costs, as well as for settlements and judgments, is currently shared in an informal arrangement among Aearo, Cabot, American Optical Corporation and a subsidiary of Warner Lambert and their respective insurers (the “Payor Group”). Liability is allocated among the parties based on the number of years each company sold respiratory products under the “AO Safety” brand and/or owned the AO Safety Division of American Optical Corporation and the alleged years of exposure of the individual plaintiff. Aearo’s share of the contingent liability is further limited by an agreement entered into between Aearo and Cabot on July 11, 1995. This agreement provides that, so long as Aearo pays to Cabot a quarterly fee of $100,000, Cabot will retain responsibility and liability for, and indemnify Aearo against, any product liability claims involving exposure to asbestos, silica, or silica products for respirators sold prior to July 11, 1995. Because of the difficulty in determining how long a particular respirator remains in the stream of commerce after being sold, Aearo and Cabot have applied the agreement to claims arising out of the alleged use of respirators involving exposure to asbestos, silica or silica products prior to January 1, 1997. With these arrangements in place, Aearo’s potential liability is limited to exposures alleged to have arisen from the use of respirators involving exposure to asbestos, silica, or silica products on or after January 1, 1997. To date, Aearo has elected to pay the quarterly fee. Aearo could potentially be exposed to additional claims for some part of the pre-July 11, 1995 period covered by its agreement with Cabot if Aearo elects to discontinue its participation in this arrangement, or if Cabot is no longer able to meet its obligations in these matters.

Developments may occur that could affect the estimate of Aearo’s liabilities. These developments include, but are not limited to: (i) significant changes in the number of future claims, (ii) significant changes in the average cost of resolving claims, (iii) significant changes in the legal costs of defending these claims, (iv) significant changes in the mix and nature of claims received, (v) trial and appellate outcomes, (vi) significant changes in the law and procedure applicable to these claims, (vii) significant changes in the liability allocation among the co-defendants, (viii) the financial viability of members of the Payor Group including exhaustion of available insurance coverage limits, and/or (ix) a determination that the interpretation of the contractual obligations on which Aearo has estimated its share of liability is inaccurate. The Company cannot determine the impact of these potential developments on its current estimate of Aearo’s share of liability for these existing and future claims. If any of the developments described above were to occur, the actual amount of these liabilities for existing and future claims could be significantly larger than the amount accrued.

Because of the inherent difficulty in projecting the number of claims that have not yet been asserted, the complexity of allocating responsibility for future claims among the Payor Group, and the several possible developments that may occur that could affect the estimate of Aearo’s liabilities, the Company cannot estimate the amount or range of amounts by which Aearo’s liability may exceed the accrual the Company has established.

Environmental Matters and Litigation

The Company’s operations are subject to environmental laws and regulations including those pertaining to air emissions, wastewater discharges, toxic substances, and the handling and disposal of solid and hazardous wastes enforceable by national, state, and local authorities around the world, and private parties in the United States and abroad. These laws and regulations provide, under certain circumstances, a basis for the remediation of contamination, for capital investment in pollution control equipment, for restoration of or compensation for damages to natural resources, and for personal injury and property damage claims. The Company has incurred, and will continue to incur, costs and capital expenditures in complying with these laws and regulations, defending personal injury and property damage claims, and modifying its business operations in light of its environmental responsibilities. In its effort to satisfy its environmental responsibilities and comply with environmental laws and regulations, the Company has established, and periodically updates, policies relating to environmental standards of performance for its operations worldwide.

Under certain environmental laws, including the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and similar state laws, the Company may be jointly and severally liable, typically with other companies, for the costs of remediation of environmental contamination at current or former facilities and at off-site locations. The Company has identified numerous locations, most of which are in the United States, at which it may have some liability. Please refer to the section entitled “Environmental Liabilities and Insurance Receivables” that follows for information on the amount of the accrual for such liabilities.

Environmental Matters

As previously reported, the Company has been voluntarily cooperating with ongoing reviews by local, state, federal (primarily the U.S. Environmental Protection Agency (EPA)), and international agencies of possible environmental and health effects of various perfluorinated compounds, including perfluorooctanoate (“PFOA”), perfluorooctane sulfonate (“PFOS”), perfluorohexane sulfonate (“PFHxS”), or other per- and polyfluoroalkyl substances (collectively “PFAS”). As a result of its phase-out decision in May 2000, the Company no longer manufactures certain PFAS compounds including PFOA, PFOS, PFHxS, and their pre-cursor compounds. The Company ceased manufacturing and using the vast majority of these compounds within approximately two years of the phase-out announcement and ceased all manufacturing and the last significant use of this chemistry by the end of 2008. The Company continues to manufacture a variety of shorter chain length PFAS compounds, including, but not limited to, pre-cursor compounds to perfluorobutane sulfonate (“PFBS”). These compounds are used as input materials to a variety of products, including engineered fluorinated fluids, fluoropolymers and fluorelastomers, as well as surfactants, additives, and coatings. Through its ongoing life cycle management and its raw material composition identification processes associated with the Company’s policies covering the use of all persistent and bio-accumulative materials, the Company continues to review, control or eliminate the presence of certain PFAS in purchased materials or as byproducts in some of 3M’s current fluorochemical manufacturing processes, products, and waste streams.

Regulatory activities concerning PFAS continue in the United States, Europe and elsewhere, and before certain international bodies. These activities include gathering of exposure and use information, risk assessment, and consideration of regulatory approaches. As the database of studies of both PFOA and PFOS has expanded, the EPA has developed human health effects documents summarizing the available data from these studies. In February 2014, the EPA initiated external peer review of its draft human health effects documents for PFOA and PFOS. The peer review panel met in August 2014. In May 2016, the EPA announced lifetime health advisory levels for PFOA and PFOS at 70 parts per trillion (ppt) (superseding the provisional levels established by the EPA in 2009 of 400 ppt for PFOA and 200 ppt for PFOS). Where PFOA and PFOS are found together, EPA recommends that the concentrations be added together, and the lifetime health advisory for PFOA and PFOS combined is also 70 ppt. Lifetime health advisories, which are non-enforceable and non-regulatory, provide information about concentrations of drinking water contaminants at which adverse health effects are not expected to occur over the specified exposure duration. To collect exposure information under the Safe Drinking Water Act, the EPA published on May 2, 2012 a list of unregulated substances, including six PFAS chemicals, required to be monitored during the period 2013-2015 by public water system suppliers to determine the extent of their occurrence. Through January 2017, the EPA reported results for 4,920 public water supplies nationwide. Based on the 2016 lifetime health advisory, 13 public water supplies exceed the level for PFOA and 46 exceed the level for PFOS (unchanged from the July 2016 EPA summary). A technical advisory issued by EPA in September 2016 on laboratory analysis of drinking water samples stated that 65 public water supplies had exceeded the combined level for PFOA and PFOS. These results are based on one or more samples collected during the period 2012-2015 and do not necessarily reflect current conditions of these public water supplies. EPA reporting does not identify the sources of the PFOA and PFOS in the public water supplies.

The Company is continuing to make progress in its work, under the supervision of state regulators, to remediate its historic disposal of PFAS-containing waste associated with manufacturing operations at its Decatur, Alabama; Cottage Grove, Minnesota; and Cordova, Illinois plants. As previously reported, the Company entered into a voluntary remedial action agreement with the Alabama Department of Environmental Management (ADEM) to remediate the presence of PFAS in the soil at the Company’s manufacturing facility in Decatur, Alabama. For approximately 20 years (1978-1998), pursuant to a permit issued by ADEM, the Company incorporated its wastewater treatment plant sludge, which contained PFAS, in fields at its Decatur facility. After a review of the available options to address the presence of PFAS in the soil, ADEM agreed that the preferred remediation option is to use a multilayer cap over the former sludge incorporation areas on the manufacturing site with subsequent groundwater migration controls and treatment. Implementation of that plan continues.

The Company continues to work with the Minnesota Pollution Control Agency (MPCA) pursuant to the terms of the previously disclosed May 2007 Settlement Agreement and Consent Order to address the presence of certain PFAS in the soil and groundwater at former disposal sites in Washington County, Minnesota (Oakdale and Woodbury) and at the Company’s manufacturing facility at Cottage Grove, Minnesota. Under this agreement, the Company’s principal obligations include (i) evaluating releases of certain PFAS from these sites and proposing response actions; (ii) providing treatment or alternative drinking water upon identifying any level exceeding a Health Based Value (“HBV”) or Health Risk Limit (“HRL”) (i.e., the amount of a chemical in drinking water determined by the Minnesota Department of Health (MDH) to be safe for human consumption over a lifetime) for certain PFAS for which a HBV and/or HRL exists as a result of contamination from these sites; (iii) remediating identified sources of other PFAS at these sites that are not controlled by actions to remediate PFOA and PFOS; and (iv) sharing information with the MPCA about certain perfluorinated compounds. During 2008, the MPCA issued formal decisions adopting remedial options for the former disposal sites in Washington County, Minnesota (Oakdale and Woodbury). In August 2009, the MPCA issued a formal decision adopting remedial options for the Company’s Cottage Grove manufacturing facility. During the spring and summer of 2010, 3M began implementing the agreed upon remedial options at the Cottage Grove and Woodbury sites. 3M commenced the remedial option at the Oakdale site in late 2010. At each location the remedial options were recommended by the Company and approved by the MPCA. Remediation work has been completed at the Oakdale and Woodbury sites, and they are in an operational maintenance mode. Remediation continued at the Cottage Grove site during 2019.

In August 2014, the Illinois EPA approved a request by the Company to establish a groundwater management zone at its manufacturing facility in Cordova, Illinois, which includes ongoing pumping of impacted site groundwater, groundwater monitoring and routine reporting of results.

In May 2017, the MDH issued new HBVs for PFOS and PFOA. The new HBVs are 35 ppt for PFOA and 27 ppt for PFOS. In connection with its announcement the MDH stated that “Drinking water with PFOA and PFOS, even at the levels above the updated values, does not represent an immediate health risk. These values are designed to reduce long-term health risks across the population and are based on multiple safety factors to protect the most vulnerable citizens, which makes them overprotective for most of the residents in our state.” In December 2017, the MDH issued a new HBV for perfluorobutane sulfonate (PFBS) of 2 parts per billion (ppb). In February 2018, the MDH published reports finding no unusual rates of certain cancers or adverse birth outcomes (low birth rates or premature births) among residents of Washington and Dakota Counties in Minnesota. In April 2019, the MDH issued a new HBV for PFOS of 15 ppt and a new HBV for PFHxS of 47 ppt.

In May 2018, the EPA announced a four-step PFAS action plan, which includes evaluating the need to set Safe Drinking Water Act maximum contaminant levels (MCLs) for PFOA and PFOS and beginning the steps necessary to designate PFOA and PFOS as “hazardous substances” under CERCLA. In November 2018, the EPA asked for public comment on draft toxicity assessments for two PFAS compounds, including PFBS. In February 2019, the EPA issued a PFAS Action Plan that outlines short- and long-term actions the EPA is taking to address PFAS – actions that include developing a national drinking water determination for PFOA and PFOS, strengthening enforcement authorities and evaluating cleanup approaches, nationwide drinking water monitoring for PFAS, expanding scientific knowledge for understanding and managing risk from PFAS, and developing consistent risk communication tools for communicating with other agencies and the public. With respect to groundwater contaminated with PFOA and PFOS, the EPA issued interim recommendations in December 2019, providing guidance for screening levels and preliminary remediation goals for groundwater that is a current or potential drinking water source, to inform final clean-up levels of contaminated sites.

The U.S. Agency for Toxic Substances and Disease Registry (ATSDR) within the Department of Health and Human Services released a draft Toxicological Profile for PFAS for public review and comment in June 2018. In the draft report, ATSDR proposed draft minimal risk levels (MRLs) for PFOS, PFOA and several other PFAS. An MRL is an estimate of the daily human exposure to a

hazardous substance that is likely to be without appreciable risk of adverse non-cancer health effects over a specified duration of exposure. MRLs are not intended to define cleanup or action levels for ATSDR or other agencies. In August 2018, 3M submitted comments on the ATSDR proposal, noting that there are major shortcomings with the current draft, especially with the MRLs, and that the ATSDR’s profile must reflect the best science and full weight of evidence known about these chemicals.

Several state legislatures and state agencies have been evaluating or have taken actions related to cleanup standards, groundwater values or drinking water values for PFOS, PFOA, and other PFAS, and 3M has submitted various responsive comments. In September 2019, 3M and several other parties filed a lawsuit in New Hampshire state court to enjoin new PFAS regulations in New Hampshire. In November 2019, the court issued a preliminary injunction preventing the regulations from being enforced. New Hampshire has made a motion to appeal that decision with the State supreme court.

The Company cannot predict what additional regulatory actions arising from the foregoing or other proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions.

Litigation Related to Historical PFAS Manufacturing Operations in Alabama

As previously reported, a former employee filed a putative class action lawsuit against 3M, BFI Waste Management Systems of Alabama, and others in the Circuit Court of Morgan County, Alabama (the “St. John” case), seeking property damage from exposure to certain perfluorochemicals at or near the Company’s Decatur, Alabama, manufacturing facility. The St. John case was stayed through January 2020, pending ongoing mediation between the parties involved in this case and another case discussed below. The parties have submitted a joint motion to extend the stay through April 2020. Two additional putative class actions filed in the same court by certain residents in the vicinity of the Decatur plant seeking relief on similar grounds (the Chandler case and the Stover case, respectively) are stayed pending the resolution of class certification issues in the St. John case.

In October 2015, West Morgan-East Lawrence Water & Sewer Authority (Water Authority) filed an individual complaint against 3M Company, Dyneon, L.L.C, and Daikin America, Inc., in the U.S. District Court for the Northern District of Alabama. The complaint also includes representative plaintiffs who brought the complaint on behalf of themselves, and a class of all owners and possessors of property who use water provided by the Water Authority and five local water works to which the Water Authority supplies water (collectively, the “Water Utilities”). The complaint seeks compensatory and punitive damages and injunctive relief based on allegations that the defendants’ chemicals, including PFOA and PFOS from their manufacturing processes in Decatur, have contaminated the water in the Tennessee River at the water intake, and that the chemicals cannot be removed by the water treatment processes utilized by the Water Authority. In April 2019, 3M and the Water Authority settled the lawsuit for $35 million, which will fund a new water filtration system, with 3M indemnifying the Water Authority from liability resulting from the resolution of the currently pending and future lawsuits against the Water Authority alleging liability or damages related to 3M PFAS. The putative class claims brought by the representative plaintiffs remain, and a motion for class certification is currently pending.

In June 2016, the Tennessee Riverkeeper, Inc. (Riverkeeper), a non-profit corporation, filed a lawsuit in the U.S. District Court for the Northern District of Alabama against 3M; BFI Waste Systems of Alabama; the City of Decatur, Alabama; and the Municipal Utilities Board of Decatur, Morgan County, Alabama. The complaint alleges that the defendants violated the Resource Conservation and Recovery Act in connection with the disposal of certain PFAS through their ownership and operation of their respective sites. The complaint further alleges such practices may present an imminent and substantial endangerment to health and/or the environment and that Riverkeeper has suffered and will continue to suffer irreparable harm caused by defendants’ failure to abate the endangerment unless the court grants the requested relief, including declaratory and injunctive relief. This case has been stayed through April 2020, pending ongoing mediation between the parties in conjunction with the St. John case.

In August 2016, a group of over 200 plaintiffs filed a putative class action against West Morgan-East Lawrence Water and Sewer Authority (Water Authority), 3M, Dyneon, Daikin, BFI, and the City of Decatur in state court in Lawrence County, Alabama (the “Billings” case). Plaintiffs are residents of Lawrence, Morgan and other counties who are or have been customers of the Water Authority. They contend defendants have released PFAS that contaminate the Tennessee River and, in turn, their drinking water, causing damage to their health and properties. In January 2017, the court in the St. John case, discussed above, stayed this litigation pending resolution of the St. John case.

In January 2017, several hundred plaintiffs sued 3M, its subsidiary Dyneon, and Daikin America in Lawrence and Morgan Counties, Alabama (the “Owens” case). The plaintiffs are owners of property, residents, and holders of property interests who receive their

water from the West Morgan-East Lawrence Water and Sewer Authority (Water Authority). They assert common law claims for negligence, nuisance, trespass, wantonness, and battery, and they seek injunctive relief and punitive damages. The plaintiffs contend that the defendants own and operate manufacturing and disposal facilities in Decatur that have released and continue to release PFOA, PFOS and related chemicals into the groundwater and surface water of their sites, resulting in discharges into the Tennessee River. The plaintiffs contend that, as a result of the alleged discharges, the water supplied by the Water Authority to the plaintiffs was, and is, contaminated with PFOA, PFOS, and related chemicals at a level dangerous to humans. The court denied a motion by co-defendant Daikin to stay this case pending resolution of the St. John case, and the case is progressing through discovery.

In November 2017, a putative class action (the “King” case) was filed against 3M, its subsidiary Dyneon, Daikin America, and the West Morgan-East Lawrence Water and Sewer Authority (Water Authority) in the U.S. District Court for the Northern District of Alabama. The plaintiffs are residents of Lawrence and Morgan County, Alabama who receive their water from the Water Authority and seek injunctive relief, attorneys’ fees, compensatory and punitive damages for their alleged personal injuries. The plaintiffs contend that the defendants own and operate manufacturing and disposal facilities in Decatur that have released and continue to release PFOA, PFOS and related chemicals into the groundwater and surface water of their sites, resulting in discharges into the Tennessee River. The plaintiffs contend that, as a result of the alleged discharges, the water supplied by the Water Authority to the plaintiffs was, and is, contaminated with PFOA, PFOS, and related chemicals at a level dangerous to humans. In November 2019, the King plaintiffs amended their complaint to withdraw all class allegations, dismiss the Water Authority as a defendant, and add 24 new individual plaintiffs (for a total of 59 plaintiffs).

In March 2018, an individual plaintiff filed a lawsuit in the U.S. District Court for the Northern District of Alabama raising allegations and claims substantially similar to those asserted by the plaintiffs in the King case. This case was dismissed without prejudice when the plaintiffs joined a previously pending case.

In January 2018, certain property owners in Trinity, Alabama filed a lawsuit against 3M, Dyneon, and three unnamed defendants in the U.S. District Court for the Northern District of Alabama. The plaintiffs assert claims for negligence, strict liability, trespass, nuisance, wanton and reckless conduct, and citizen suit claims for violation of the Resource Conservation and Recovery Act. They allege these claims arise from the defendants’ contamination of their property by disposal of PFAS in a landfill located on their property. The plaintiffs seek compensatory and punitive damages and a court order directing the defendants to remediate all PFAS contamination on their property. In September 2018, the case was dismissed by stipulation of the parties.

In July 2019, 3M announced that it had initiated an investigation into the possible presence of PFAS in three closed municipal landfills in Decatur that accepted waste from 3M’s Decatur plant and other companies in the 1960s through the 1980s. 3M is working with local and state entities as it conducts its investigation and will report the results and recommended remedial action, if any, to those entities and the public.

Litigation Related to Historical PFAS Manufacturing Operations in Minnesota

In July 2016, the City of Lake Elmo filed a lawsuit in the U.S. District Court for the District of Minnesota against 3M alleging that the City suffered damages from drinking water supplies contaminated with PFAS, including costs to construct alternative sources of drinking water. In April 2019, 3M and the City of Lake Elmo agreed to settle the lawsuit for less than $5 million.

State Attorneys General Litigation related to PFAS

Minnesota. In December 2010, the State of Minnesota, by its Attorney General, filed a lawsuit in Hennepin County District Court against 3M seeking damages and injunctive relief with respect to the presence of PFAS in the groundwater, surface water, fish or other aquatic life, and sediments in the state of Minnesota (the “NRD Lawsuit”). In February 2018, 3M and the State of Minnesota reached a resolution of the NRD Lawsuit. Under the terms of the settlement, 3M agreed to provide an $850 million grant to the State for a special “3M Water Quality and Sustainability Fund.” This Fund, which is administered by the State, will enable projects that support water sustainability in the Twin Cities East Metro region, such as continued delivery of water to residents and enhancing groundwater recharge to support sustainable growth. The projects will also result in habitat and recreation improvements, such as fishing piers, trails, and open space preservation. 3M recorded a pre-tax charge of $897 million, inclusive of legal fees and other related obligations, in the first quarter of 2018 associated with the resolution of this matter.

New York. The State of New York, by its Attorney General, has filed four lawsuits (in June 2018, February 2019, July 2019, and November 2019) against 3M and other defendants seeking to recover the costs incurred in responding to PFAS contamination allegedly caused by Aqueous Film Forming Foam (AFFF) manufactured by 3M and others. Each of the four suits was filed in Albany County Supreme Court before being removed to federal court, and each has been transferred to the multi-district litigation (MDL) proceeding for AFFF cases, which is discussed further below. The state is seeking compensatory and punitive damages, and injunctive and equitable relief in the form of a monetary fund for the State’s reasonably expected future damages, and/or requiring defendants to perform investigative and remedial work.

Ohio. In December 2018, the State of Ohio, by its Attorney General, filed a lawsuit in the Common Pleas Court of Lucas County, Ohio against 3M, Tyco Fire Products LP, Chemguard, Inc., Buckeye Fire Equipment Co., National Foam, Inc., and Angus Fire Armour Corp., seeking injunctive relief and compensatory and punitive damages for remediation costs and alleged injury to Ohio natural resources from AFFF manufacturers. This case was removed to federal court and transferred to the MDL.

New Jersey. In March 2019, the New Jersey Attorney General filed two actions against 3M, DuPont, and Chemours on behalf of the New Jersey Department of Environmental Protection (NJDEP), the NJDEP’s commissioner, and the New Jersey Spill Compensation Fund regarding alleged discharges at two DuPont facilities in Pennsville, New Jersey (Salem County) and Parlin, New Jersey (Middlesex County). 3M is included as a defendant in both cases because it allegedly supplied PFOA to DuPont for use at the facilities at issue. Both cases expressly seek to have the defendants pay all costs necessary to investigate, remediate, assess, and restore the affected natural resources of New Jersey. DuPont removed these cases to federal court. In August 2019, the court stayed all proceedings in these actions pending a ruling on NJDEP’s motions to remand the cases to state court.

In May 2019, the New Jersey Attorney General and NJDEP filed a lawsuit against 3M, DuPont, and six other companies, alleging natural resource damages from AFFF products and seeking damages, including punitive damages, and associated fees. This case was removed to federal court and transferred to the AFFF MDL.

New Hampshire. In May 2019, the New Hampshire Attorney General filed two lawsuits alleging contamination of the state’s drinking water supplies and other natural resources by PFAS chemicals. The first lawsuit was filed against 3M and seven co-defendants, alleging PFAS contamination resulting from the use of AFFF products at several sites around the state. This case was removed to federal court and transferred to the AFFF MDL. The second suit asserts PFAS contamination from non-AFFF sources and names 3M, DuPont, and Chemours as defendants. This suit remains in state court in early stages of litigation; 3M’s motion to dismiss remains pending.

Vermont. In June 2019, the Vermont Attorney General filed two lawsuits alleging contamination of the state’s drinking water supplies and other natural resources by PFAS chemicals. The first lawsuit was filed against 3M and ten co-defendants, alleging PFAS contamination resulting from the use of AFFF products at several sites around the state. This case was removed to federal court and transferred to the AFFF MDL. The second suit asserts PFAS contamination from non-AFFF sources and names 3M and several entities related to DuPont and Chemours as defendants. This suit remains in state court in early stages of litigation; 3M’s motion to dismiss remains pending.

Michigan. In May 2019, the Michigan Attorney General issued a request for proposal seeking outside legal expertise in pursuing claims against manufacturers, distributors, and other parties related to PFAS. In January 2020, the Michigan Attorney General filed a lawsuit in state court against 3M, Dyneon, DuPont, Chemours and others seeking injunctive and equitable relief and damages for alleged injury to Michigan public natural resources and its residents relating to PFAS.

Guam. In September 2019, the Attorney General of Guam filed a lawsuit against 3M and other defendants relating to contamination of the territory’s drinking water supplies and other natural resources by PFAS, allegedly resulting from the use of AFFF products at several sites around the island. This lawsuit has been removed to federal court and transferred to the AFFF MDL.

Commonwealth of Northern Mariana Islands. In December 2019, the Attorney General of the Commonwealth of Northern Mariana Islands, a U.S. territory, filed a lawsuit against 3M and other defendants relating to contamination of the territory’s drinking water supplies and other natural resources by PFAS, allegedly resulting from the use of AFFF products.

In addition to the above state attorneys general actions, the Company is in discussions with several other state attorneys general and responding to information and other requests relating to PFAS matters.

Aqueous Film Forming Foam (AFFF) Environmental Litigation

3M manufactured and marketed AFFF for use in firefighting at airports and military bases from approximately 1963 to 2002. As of December 31, 2019, 150 putative class action and other lawsuits have been filed against 3M (along with other defendants) in various state and federal courts where current or former airports, military bases, or fire training facilities are or were located. As previously noted, some of these cases have been brought by state or territory attorneys general. In these cases, plaintiffs typically allege that certain PFAS used in AFFF contaminated the soil and groundwater where AFFF was used and seek damages for loss of use and enjoyment of properties, diminished property values, investigation costs, remediation costs, and in some cases, personal injury and funds for medical monitoring. The United States, the U.S. Department of Defense and several companies have been sued along with 3M, including but not limited to Ansul Co. (acquired by Tyco, Inc.), Angus Fire, Buckeye Fire Protection Co., Chemguard, Chemours, DuPont, National Foam, Inc., and United Technologies Corp.

In December 2018, the U.S. Judicial Panel on Multidistrict Litigation granted motions to transfer and consolidate all AFFF cases pending in federal courts to the U.S. District Court for the District of South Carolina to be managed in an MDL proceeding to centralize pre-trial proceedings. Additional AFFF cases continue to be transferred into the MDL as they are filed or removed to federal court. As of December 31, 2019, there were 147 cases in the MDL, 142 of which name 3M as a defendant. The parties in the MDL are currently in the process of conducting discovery.

In June 2019, several subsidiaries of Valero Energy Corporation, an independent petroleum refiner, filed eight AFFF cases against 3M and other defendants, including DuPont/Chemours, National Foam, Buckeye Fire Equipment, and Kidde-Fenwal, in various state courts. Plaintiffs seek damages that allegedly have been or will be incurred in investigating and remediating PFAS contamination at their properties and replacing or disposing of AFFF products containing long-chain PFAS. Two of these cases have been removed to federal court and transferred to the AFFF MDL. Five cases remain pending in state courts where they are in early stages of litigation, after Valero dismissed its Ohio state court action without prejudice in October 2019.

In September 2019, an individual plaintiff filed an AFFF lawsuit against 3M, together with the State of Alaska, Chemguard, Tyco Fire Equipment Co., DuPont, Chemours and other co-defendants, in state court in Alaska. Plaintiff in this case seeks property damages and medical monitoring on behalf of a putative class. Also in September 2019, 3M was named a defendant, together with Tyco Fire Products, Chemguard, Buckeye Fire Protection and other co-defendants, in an AFFF action filed by individual plaintiffs in state court of New York. Plaintiffs in the New York case seek damages for alleged property damage and personal injuries, as well as injunctive relief in the form of medical monitoring and property testing and remediation.

Other PFAS-related Product and Environmental Litigation

3M manufactured and sold products containing various PFOA and PFOS, including Scotchgard, for several decades. Starting in 2017, 3M has been served with individual and putative class action complaints in various state and federal courts alleging, among other things, that 3M’s customers’ improper disposal of PFOA and PFOS resulted in the contamination of groundwater or surface water. The plaintiffs in these cases generally allege that 3M failed to warn its customers about the hazards of improper disposal of the product. They also generally allege that contaminated groundwater has caused various injuries, including personal injury, loss of use and enjoyment of their properties, diminished property values, investigation costs, and remediation costs. Several companies have been sued along with 3M, including Saint-Gobain Performance Plastics Corp., Honeywell International Inc. f/k/a Allied-Signal Inc. and/or AlliedSignal Laminate Systems, Inc., Wolverine World Wide Inc., Georgia-Pacific LLC, E.I. DuPont De Nemours and Co., Chemours Co., and various carpet manufacturers.

In New York, 3M is defending 47 individual cases and one putative class action filed in the U.S. District Court for the Northern District of New York and four additional cases filed in New York state court against 3M, Saint-Gobain Performance Plastics Corp. (Saint-Gobain), Honeywell International Inc. and E.I. DuPont De Nemours and Co. (DuPont). The plaintiffs allege that 3M manufactured and sold PFOA that was used for manufacturing purposes at Saint-Gobain’s and Honeywell’s facilities located in the Village of Hoosick Falls and the Town of Hoosick. The plaintiffs claim that the drinking water around Hoosick Falls became contaminated with unsafe levels of PFOA due to the activities of the defendants and allege that they suffered bodily injury due to the ingestion and inhalation of PFOA. The plaintiffs seek unstated compensatory, consequential, and punitive damages, as well as attorneys’ fees and costs. In addition, 3M is defending eight cases filed by Nassau County drinking water providers in the U.S. District Court for the Eastern District of New York. The plaintiffs in these cases allege that 3M, DuPont, and additional unnamed defendants

are responsible for the contamination of plaintiffs’ water supply sources with various PFAS compounds. These cases are in the preliminary stages of litigation.

In Michigan, one consolidated putative class action is pending in the U.S. District Court for the Western District of Michigan against 3M and Wolverine World Wide (Wolverine) and other defendants. The action arises from Wolverine’s allegedly improper disposal of materials and wastes, including 3M Scotchgard, related to Wolverine’s shoe manufacturing operations. Plaintiffs allege Wolverine used 3M Scotchgard in its manufacturing process and that chemicals from 3M’s product contaminated the environment and drinking water sources after disposal. In addition to the consolidated federal court putative class action, as of December 31, 2019, 3M has been named as a defendant in approximately 257 private individual actions in Michigan state court based on similar allegations. These cases are coordinated for pre-trial purposes. Four of these cases were selected for bellwether trials in 2020, with the first trial scheduled in March 2020. In January 2020, the court issued the first round of dispositive motion rulings related to the first two bellwether cases, including dismissing the second bellwether case entirely and dismissing certain plaintiffs’ medical monitoring, risk of future disease, and granting summary judgment to the defendants on one plaintiff’s cholesterol injury claims.

Wolverine also filed a third-party complaint against 3M in a suit by the State of Michigan and intervenor townships that seeks to compel Wolverine to investigate and address contamination associated with its historic disposal activity. 3M filed an answer and counterclaims to Wolverine’s third-party complaint in June 2019. In September and October 2019, the parties (including 3M as third-party defendant) engaged in mediation. In December 2019, the State of Michigan, the intervening townships, and Wolverine announced that they had tentatively resolved the State and townships’ claims against Wolverine in exchange for a $70 million payment and certain future remediation measures by Wolverine. 3M and Wolverine continue to engage in productive settlement discussions.

3M is also a defendant, together with Georgia-Pacific as co-defendant, in a putative class action in federal court in Michigan brought by residents of Parchment, who allege that the municipal drinking water is contaminated from waste generated by a paper mill owned by Georgia-Pacific’s corporate predecessor. Defendants have moved to dismiss certain claims in the complaint, and the parties have begun discovery on the remaining claims.

In Alabama and Georgia, 3M is defending four state court cases, including three brought by municipal water utilities, relating to 3M’s sale of PFAS-containing products to carpet manufacturers in Georgia. The plaintiffs in these cases allege that the carpet manufacturers improperly discharged PFAS into the surface water and groundwater, contaminating drinking water supplies of cities located downstream along the Coosa River, including Rome, Georgia and Centre and Gadsden, Alabama. The three water utility cases remain in the early stages of litigation. One state court case was brought by individuals asserting PFAS contamination by the Georgia carpet manufacturers and seeking economic damages and injunctive relief on behalf of a putative class of Rome and Floyd County water subscribers. This case has been removed to federal court where it remains in early stages of litigation.

In Delaware, 3M is defending one putative class action brought by individuals alleging PFAS contamination of their water supply resulting from the operations of local metal plating facilities. Plaintiffs allege that 3M supplied PFAS to the metal plating facilities. DuPont, Chemours, and the metal platers have also been named as defendants. This case has been removed from state court to federal court, and plaintiffs have filed a motion to remand to state court. 3M has also filed a motion to dismiss.

In Maine, 3M was defending one individual action in state court relating to contamination of drinking water and dairy farm operations by PFAS from wastewater sludge. In October 2019, the plaintiffs filed a notice voluntarily dismissing their case without prejudice.

In New Jersey, 3M is defending an action brought in federal court by Middlesex Water Company, alleging PFAS contamination of its water wells. 3M’s motion to transfer the case to the AFFF MDL was denied. 3M has moved to dismiss the complaint, and the case is currently in the early stages of discovery. In addition, 3M is defending a case brought in state court by multiple individuals with private drinking water wells near Dupont and Solvay facilities that were allegedly supplied with PFAS by 3M. Plaintiffs seek medical monitoring and damages. This case has been removed to federal court, where it remains in early stages. On a separate matter, 3M was dismissed without prejudice from a class action that was previously pending in federal court in New Jersey, relating to the DuPont Chambers Works plant.

In October 2018, 3M and other defendants, including DuPont and Chemours, were named in a putative class action in the U.S. District Court for the Southern District of Ohio brought by the named plaintiff, a firefighter allegedly exposed to PFAS chemicals through his use of firefighting foam, purporting to represent a putative class of all U.S. individuals with detectable levels of PFAS in their blood.

The plaintiff brings claims for negligence, battery, and conspiracy and seeks injunctive relief, including an order “establishing an independent panel of scientists” to evaluate PFAS. 3M and other entities jointly filed a motion to dismiss in February 2019. In September 2019, the court denied the defendants’ motion to dismiss. In February 2020, the court denied 3M’s motion to transfer the case to the AFFF MDL.

Other PFAS-related Matters

In July 2019, the Company received a written request from the Subcommittee on Environment of the Committee on Oversight and Reform, U.S. House of Representatives, seeking certain documents and information relating to the Company’s manufacturing and distribution of PFAS products. In September 2019, a 3M representative testified before and responded to questions from the Subcommittee on Environment with respect to PFAS and the Company’s environmental stewardship initiatives. The Company continues to cooperate with the Subcommittee.

The Company operates under a 2009 consent order issued under the federal Toxic Substances Control Act (TSCA) (the “2009 TSCA consent order”) for the manufacture and use of two perfluorinated materials (FBSA and FBSEE) at its Decatur, Alabama site that does not permit release of these materials into “the waters of the United States.” In March 2019, the Company halted the manufacture, processing, and use of these materials at the site upon learning that these materials may have been released from certain specified processes at the Decatur site into the Tennessee River. In April 2019, the Company voluntarily disclosed the releases to the U.S. Environmental Protection Agency (EPA) and the Alabama Department of Environmental Management (ADEM). During June and July 2019, the Company took steps to fully control the aforementioned processes by capturing all wastewater produced by the processes and by treating all air emissions. These processes have been back on-line and in operation since July 2019. The Company continues to cooperate with the EPA and ADEM in their investigations and will work with the regulatory authorities to demonstrate compliance with the release restrictions.

The Company is authorized to discharge wastewater from its Decatur plant pursuant to the terms of a Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit issued by ADEM. The NPDES permit requires the Company to report on a monthly and quarterly basis the quality and quantity of pollutants discharged to the Tennessee River. In June 2019, the Company voluntarily disclosed to the EPA and ADEM that it had included incorrect values in certain of its monthly and quarterly reports. The Company has submitted the corrected values to both the EPA and ADEM.

As part of ongoing work with the EPA and ADEM to address compliance matters at the Decatur facility, the Company discovered it had not fully characterized its PFAS discharge in its NPDES permit. In September 2019, the Company disclosed the matter to the EPA and ADEM and announced that it had elected to temporarily idle certain other manufacturing processes at 3M Decatur. The Company is reviewing its operations at the plant, has installed wastewater treatment controls, has restarted certain processes, and is working to re-start the remaining idled processes in compliance with regulatory requirements and Company policies and procedures.

In December 2019, the Company received a grand jury subpoena from the U.S. Attorney’s Office for the Northern District of Alabama for documents related to, among other matters, the Company’s compliance with the 2009 TSCA consent order and unpermitted discharges to the Tennessee River. The Company is cooperating with this inquiry and will produce documents in response to the subpoena.

In addition, as part of its ongoing evaluation of regulatory compliance at its Cordova, Illinois facility, the Company discovered it had not fully characterized its PFAS discharge in its NPDES permit for the Cordova facility. In November 2019, the Company disclosed this matter to the EPA, and in January 2020 disclosed this matter to the Illinois Environmental Protection Agency (IEPA). The Company continues to work with the EPA and IEPA to address the discharge from the Cordova facility.

The Company is also reviewing operations at its other plants with similar manufacturing processes, such as those in Cottage Grove, Minnesota, to ensure those operations are in compliance with applicable environmental regulatory requirements and Company policies and procedures.

The Company will continue to work with relevant state and federal agencies as it conducts these reviews.

The Company cannot predict at this time the outcomes of resolving these compliance matters or what potential actions may be taken by the regulatory agencies.

Securities Litigation

In July 2019, Heavy & General Laborers’ Locals 472 & 172 Welfare Fund filed a putative securities class action against 3M Company, its former Chairman and CEO, current Chairman and CEO, and current CFO in the U.S. District Court for the District of New Jersey. In August 2019, an individual plaintiff filed a similar putative securities class action in the same district. Plaintiffs allege that defendants made false and misleading statements regarding 3M's exposure to liability associated with PFAS, and bring claims for damages under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 against all defendants, and under Section 20(a) of the Securities and Exchange Act of 1934 against the individual defendants. In October 2019, the court consolidated the securities class actions and appointed a group of lead plaintiffs. The suit is in the early stages of litigation.

In October 2019, a follow-on derivative lawsuit was filed in the U.S. District Court for the District of New Jersey against 3M and several of its current and former executives and directors. In November and December 2019, two additional derivative lawsuits were filed in a Minnesota state court. The derivative lawsuits rely on similar factual allegations as the putative securities class action discussed above. Plaintiffs have agreed to stay these cases pending a ruling on a motion to dismiss the securities class action.

Other Environmental Litigation

In July 2018, the Company, along with more than 120 other companies, was served with a complaint seeking cost recovery and contribution towards the cleaning up of approximately eight miles of the Lower Passaic River in New Jersey. The plaintiff, Occidental Chemical Corporation, alleges that it agreed to design and pay the estimated $165 million cost to remove and cap sediment containing eight chemicals of concern, including PCBs and dioxins. The complaint seeks to spread those costs among the defendants, including the Company. The Company’s involvement in the case relates to its past use of two commercial drum conditioning facilities in New Jersey. Whether, and to what extent, the Company may be required to contribute to the costs at issue in the case remains to be determined.

For environmental matters and litigation described above, unless otherwise stated, no liability has been recorded as the Company believes liability in those matters is not probable and estimable and the Company is not able to estimate a possible loss or range of loss at this time. The Company’s environmental liabilities and insurance receivables are described below.

Environmental Liabilities and Insurance Receivables

The Company periodically examines whether the contingent liabilities related to the environmental matters and litigation described above are probable and estimable based on experience and developments in those matters. During the first quarter of 2019, the EPA issued its PFAS Action Plan and the Company settled the litigation with the Water Authority (both matters are described in more detail above). The Company completed a comprehensive review with the assistance of environmental consultants and other experts regarding environmental matters and litigation related to historical PFAS manufacturing operations in Minnesota, Alabama, Gendorf Germany, and at four former landfills in Alabama. As a result of these developments and of that review, the Company increased its accrual for “other environmental liabilities” by $235 million pre-tax (including the settlement with the Water Authority) in the first quarter of 2019. During the fourth quarter of 2019, 3M updated its evaluation of certain customer-related litigation based on continued, productive settlement discussions with multiple parties. As previously disclosed, 3M has been engaged in mediation and resolution negotiations in multiple cases. In addition, during the fourth quarter, the Company updated its assessment of environmental matters and litigation related to its historical PFAS manufacturing operations and expanded its evaluation of other 3M sites that may have used certain PFAS-containing materials and locations at which they were disposed. As a result of these actions during the fourth quarter the Company recorded a pre-tax charge of $214 million. As of December 31, 2019, the Company had recorded liabilities of $445 million for “other environmental liabilities.” The accruals represent the Company’s best estimate of the probable loss. The Company is not able to estimate a possible loss or range of loss in excess of the established accruals at this time.

As of December 31, 2019, the Company had recorded liabilities of $19 million for estimated non-PFAS related “environmental remediation” costs to clean up, treat, or remove hazardous substances at current or former 3M manufacturing or third-party sites. The Company evaluates available facts with respect to each individual site each quarter and records liabilities for remediation costs on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company’s commitment to a plan of action. Liabilities for estimated costs of environmental remediation, depending on the site, are based primarily upon internal or third-party environmental studies, and estimates as to the number, participation level and financial

viability of any other potentially responsible parties, the extent of the contamination and the nature of required remedial actions. The Company adjusts recorded liabilities as further information develops or circumstances change. The Company expects that it will pay the amounts recorded over the periods of remediation for the applicable sites, currently ranging up to 20 years.

It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods. Developments may occur that could affect the Company’s current assessment, including, but not limited to: (i) changes in the information available regarding the environmental impact of the Company’s operations and products; (ii) changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages; (iii) new and evolving analytical and remediation techniques; (iv) success in allocating liability to other potentially responsible parties; and (v) the financial viability of other potentially responsible parties and third-party indemnitors. For sites included in both “environmental remediation liabilities” and “other environmental liabilities,” at which remediation activity is largely complete and remaining activity relates primarily to operation and maintenance of the remedy, including required post-remediation monitoring, the Company believes the exposure to loss in excess of the amount accrued would not be material to the Company’s consolidated results of operations or financial condition. However, for locations at which remediation activity is largely ongoing, the Company cannot estimate a possible loss or range of loss in excess of the associated established accruals for the reasons described above.

The Company has both pre-1986 general and product liability occurrence coverage and post-1985 occurrence reported product liability and other environmental coverage for environmental matters and litigation. As of December 31, 2019, the Company’s receivable for insurance recoveries related to the environmental matters and litigation was $33 million. The Company increased its receivable for insurance recoveries by $25 million in the first quarter of 2019. Various factors could affect the timing and amount of recovery of this and future expected increases in the receivable, including (i) delays in or avoidance of payment by insurers; (ii) the extent to which insurers may become insolvent in the future, (iii) the outcome of negotiations with insurers, and (iv) the scope of the insurers’ purported defenses and exclusions to avoid coverage.

Product Liability Litigation

As of December 31, 2019, the Company was a named defendant in nine lawsuits in the United States involving 12 plaintiffs (compared to approximately 5,015 plaintiffs at December 31, 2018) and one Canadian punitive class action with a single named plaintiff, alleging that the Bair Hugger™ patient warming system caused a surgical site infection.

As previously disclosed, 3M had been a named defendant in lawsuits in federal courts involving over 5,000 plaintiffs. The plaintiffs claim they underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger™ patient warming system. The plaintiffs seek damages and other relief based on theories of strict liability, negligence, breach of express and implied warranties, failure to warn, design and manufacturing defect, fraudulent and/or negligent misrepresentation/concealment, unjust enrichment, and violations of various state consumer fraud, deceptive or unlawful trade practices and/or false advertising acts.

The U.S. Judicial Panel on Multidistrict Litigation (JPML) consolidated all cases pending in federal courts to the U.S. District Court for the District of Minnesota to be managed in a multi-district litigation (MDL) proceeding. In July 2019, the court excluded several of the plaintiffs’ causation experts, and granted summary judgment for 3M in all cases pending at that time in the MDL. Plaintiffs have appealed that decision to the U.S. Court of Appeals for the Eighth Circuit. Plaintiffs have also appealed a 2018 jury verdict in favor of 3M in the first bellwether trial in the MDL and appealed the dismissal of another bellwether case.

Among the nine remaining lawsuits in the United States, eight are in the MDL court. Of the eight cases in the MDL, four cases were removed from a Missouri state court. Three of those four were dismissed with the July 2019 MDL summary judgment decision referenced above. Plaintiffs, however, have filed motions to remand all four Missouri cases to state court. All eight remaining lawsuits in the MDL court have been stayed pending the appeal of the summary judgment decision. The ninth case is one the Company has been defending in Hidalgo County, Texas, which combines Bair Hugger product liability claims with medical malpractice claims. In August 2019, the U.S. District Court managing the MDL enjoined the individual plaintiff from pursuing his claims in Texas state court because he had previously filed and dismissed a claim in the MDL. That plaintiff has appealed the order to the U.S. Court of Appeals for the Eighth Circuit. The Texas state court has stayed the entire case while the appeal is pending.

As previously disclosed, 3M had been named a defendant in 61 cases in Minnesota state court. In January 2018, the Minnesota state court excluded plaintiffs’ experts and granted 3M’s motion for summary judgment on general causation. Plaintiffs appealed that ruling and the state court’s punitive damages ruling. The Minnesota Court of Appeals affirmed the Minnesota state court orders in their entirety and the Minnesota Supreme Court denied plaintiffs’ petition for review. Final dismissal was entered in April 2019, effectively ending the Minnesota state court cases.

In June 2016, the Company was served with a putative class action filed in the Ontario Superior Court of Justice for all Canadian residents who underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger™ patient warming system. The representative plaintiff seeks relief (including punitive damages) under Canadian law based on theories similar to those asserted in the MDL.

No liability has been recorded for the Bair Hugger™ litigation because the Company believes that any such liability is not probable and estimable at this time.

In September 2011, 3M Oral Care launched Lava Ultimate CAD/CAM dental restorative material. The product was originally indicated for inlay, onlay, veneer, and crown applications. In June 2015, 3M Oral Care voluntarily removed crown applications from the product’s instructions for use, following reports from dentists of patients’ crowns debonding, requiring additional treatment. The product remains on the market for other applications. 3M communicated with the U.S. Food and Drug Administration, as well as regulators outside the United States. 3M also informed customers and distributors of its action, offered to accept return of unused materials and provide refunds. In May 2018, 3M reached a preliminary settlement for an amount that did not have a material impact to the Company of the lawsuit pending in the U.S. District Court for the District of Minnesota that sought certification of a class of dentists in the United States and its territories. In September 2019, the court issued an order granting final approval of the settlement.

Aearo Technologies sold Dual-Ended Combat Arms – Version 2 earplugs starting in about 2003. 3M acquired Aearo Technologies in 2008 and sold these earplugs from 2008 through 2015, when the product was discontinued. In December 2018, a military veteran filed an individual lawsuit against 3M in the San Bernardino Superior Court in California alleging that he sustained personal injuries while serving in the military caused by 3M’s Dual-Ended Combat Arms earplugs – Version 2. The plaintiff asserts claims of product liability and fraudulent misrepresentation and concealment. The plaintiff seeks various damages, including medical and related expenses, loss of income, and punitive damages. As of December 31, 2019, the Company is a named defendant in approximately 2,531 lawsuits (including 14 putative class actions) in various state and federal courts that purport to represent approximately 11,318 individual claimants making similar allegations. In April 2019, the U.S. Judicial Panel on Multidistrict Litigation granted motions to transfer and consolidate all cases pending in federal courts to the U.S. District Court for the Northern District of Florida to be managed in a multi-district litigation (MDL) proceeding to centralize pre-trial proceedings. The court conducted a case management conference in June 2019 on a discovery plan and scheduling. Discovery is underway. No liability has been recorded for these matters because the Company believes that any such liability is not probable and estimable at this time.

For product liability litigation matters described in this section for which a liability has been recorded, the amount recorded is not material to the Company’s consolidated results of operations or financial condition. In addition, the Company is not able to estimate a possible loss or range of loss in excess of the established accruals at this time.

Federal False Claims Act / Qui Tam Litigation

In October 2019, 3M acquired Acelity, Inc. and its KCI subsidiaries, including Kinetic Concepts, Inc. and KCI USA, Inc. As previously disclosed in the SEC filings by KCI entities, in 2009, Kinetic Concepts, Inc. received a subpoena from the U.S. Department of Health and Human Services Office of Inspector General. In 2011, following the completion of the government’s review and its decision declining to intervene in two qui tam actions described further below, the qui tam relator-plaintiffs’ pleadings were unsealed.

The government inquiry followed two qui tam actions filed in 2008 by two former employees against Kinetic Concepts, Inc. and KCI USA, Inc. (collectively, the “KCI defendants”) under seal in the U.S. District Court for the Central District of California. The complaints contain allegations that the KCI Defendants violated the federal False Claims Act by submitting false or fraudulent claims to federal healthcare programs by billing for V.A.C.^® Therapy in a manner that was not consistent with the Local Coverage Determinations issued by the Durable Medical Equipment Medicare Administrative Contractors and seek monetary damages. One complaint (the “Godecke case”) also contains allegations that the KCI Defendants retaliated against the relator-plaintiff for alleged whistle-blowing behavior.

In October 2016, the KCI Defendants filed counterclaims in the Godecke case, asserting breach of contract and conversion. In August 2017, the fraud claim of the Godecke case was dismissed. In January 2018, the district court stayed the retaliation claim and the KCI Defendants' counterclaims pending the relator-plaintiff’s appeal. In September 2019, the U.S. Court of Appeals for the Ninth Circuit reversed and remanded the case to the district court for further proceedings. During a January 2020 status conference, the district court ordered a stay of the proceedings until April 2020. In June 2019, following discovery, the district court in the second case (the “Hartpence case”) entered summary judgment in the KCI Defendants’ favor on all of the relator-plaintiff’s claims. The plaintiff then filed an appeal in the U.S. Court of Appeals for the Ninth Circuit, which is pending. No liability has been recorded for these matters because the Company believes that any such liability is not probable and estimable at this time.

Compliance Matter

The Company, through its internal processes, discovered certain travel activities and related funding and record keeping issues raising concerns, arising from marketing efforts by certain business groups based in China. The Company initiated an internal investigation to determine whether the expenditures may have violated the U.S. Foreign Corrupt Practices Act (FCPA) or other potentially applicable anti-corruption laws. The Company has retained outside counsel and a forensic accounting firm to assist with the investigation. In July 2019, the Company voluntarily disclosed this investigation to both the Department of Justice and Securities and Exchange Commission and is cooperating with both agencies. The Company cannot predict at this time the outcome of its investigation or what potential actions may be taken by the Department of Justice or Securities and Exchange Commission.

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Derivatives (Tables)

12 Months Ended

Dec. 31, 2019

Derivatives

Gains (losses) on derivative instruments dedesignated as hedges

	Pretax Gain (Loss)
	Recognized in Other		Pretax Gain (Loss) Reclassified
	Comprehensive		from Accumulated Other
	Income on Derivative		Comprehensive Income into Income
Year ended December 31, 2019 (Millions)	Amount		Location	Amount
Foreign currency forward/option contracts	$	96	Cost of sales	$	74
Interest rate swap contracts		(122)	Interest expense		(4)
Total	$	(26)		$	70

Gain (loss) on derivative instruments designated as cash flow hedges

			Pretax Gain (Loss) Recognized in
	Pretax Gain (Loss)		Income on Effective Portion of			Ineffective Portion of Gain
	Recognized in Other		Derivative as a Result of			(Loss) on Derivative and
	Comprehensive		Reclassification from			Amount Excluded from
	Income on Effective		Accumulated Other			Effectiveness Testing
	Portion of Derivative		Comprehensive Income			Recognized in Income
Year ended December 31, 2018 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	151	Cost of sales	$	(95)	Cost of sales	$	—
Interest rate swap contracts		(18)	Interest expense		(1)	Interest expense		—
Total	$	133		$	(96)		$	—

Year ended December 31, 2017 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(305)	Cost of sales	$	8	Cost of sales	$	—
Interest rate swap contracts		(6)	Interest expense		(1)	Interest expense		—
Total	$	(311)		$	7		$	—

Gain (loss) on derivative instruments designated as fair value hedges

	Gain (Loss) on Derivative			Gain (Loss) on Hedged Item
	Recognized in Income			Recognized in Income
Year ended December 31, 2018 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(5)	Interest expense	$	5
Total		$	(5)		$	5

Year ended December 31, 2017 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(9)	Interest expense	$	9
Total		$	(9)		$	9

The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:

					Cumulative Amount of Fair Value Hedging
	Carrying Value of the				Adjustment Included in the Carrying Value
	Hedged Liabilities (in millions)				of the Hedged Liabilities (in millions)
Location on the Consolidated Balance Sheet	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Short-term borrowings and current portion of long-term debt	$	499	$	596	$	—	$	(4)
Long-term debt		775		1,276		22		18
Total	$	1,274	$	1,872	$	22	$	14

Gain (loss) on derivative and non-derivative instruments designated as net investment hedges

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation		Amount of Gain (Loss) Excluded
	within Other		from Effectiveness Testing
	Comprehensive Income		Recognized in Income
Year ended December 31, 2019 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	108	Cost of sales	$	—
Foreign currency forward contracts		32	Cost of sales		20
Total	$	140		$	20

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation
	within Other		Ineffective Portion of Gain (Loss) on
	Comprehensive Income		Instrument and Amount Excluded
	on Effective Portion of		from Effectiveness Testing
	Instrument		Recognized in Income
Year ended December 31, 2018 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	222	Cost of sales	$	(2)
Foreign currency forward contracts		18	Cost of sales		4
Total	$	240		$	2

Year ended December 31, 2017 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(667)	N/A	$	—
Foreign currency forward contracts		(58)	Cost of sales		7
Total	$	(725)		$	7

Gain (loss) on derivative instruments not designated as hedging instruments

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows:

	Gain (Loss) on Derivative Recognized in Income
		Year ended December 31,
			2019		2018		2017
(Millions)	Location		Amount		Amount		Amount
Foreign currency forward/option contracts	Cost of sales	$	2	$	13	$	11
Foreign currency forward contracts	Interest expense		(13)		(109)		(141)
Total		$	(11)	$	(96)	$	(130)

Location in consolidated statement of income and pre-tax amounts recognized in income related to derivative instruments designated in cash flow or fair value hedging relationship

	Location and Amount of Gain (Loss) Recognized in Income
	Year ended December 31, 2019
(Millions)		Cost of Goods Sold		Other expense (income), net
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded	$	17,136	$	462
The effects of fair value and cash flow hedging:
Gain or (loss) on cash flow hedging relationships:
Foreign currency forward/option contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	$	74	$	—
Interest rate swap contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income		—		(4)
Gain or (loss) on fair value hedging relationships:
Interest rate swap contracts:
Hedged items	$	—	$	(8)
Derivatives designated as hedging instruments		—		8

Location and Fair Value of Derivative Instruments

	Gross		Assets			Liabilities
	Notional			Fair			Fair
December 31, 2019 (Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	1,995	Other current assets	$	64	Other current liabilities	$	9
Foreign currency forward/option contracts		1,041	Other assets		50	Other liabilities		3
Interest rate swap contracts		500	Other current assets		—	Other current liabilities		—
Interest rate swap contracts		603	Other assets		17	Other liabilities		—
Total derivatives designated as hedging instruments				$	131		$	12
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,684	Other current assets	$	11	Other current liabilities	$	8
Total derivatives not designated as hedging instruments				$	11		$	8
Total derivative instruments				$	142		$	20

	Gross		Assets			Liabilities
	Notional			Fair			Fair
December 31, 2018 (Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,277	Other current assets	$	74	Other current liabilities	$	12
Foreign currency forward/option contracts		1,099	Other assets		39	Other liabilities		4
Interest rate swap contracts		1,000	Other current assets		—	Other current liabilities		14
Interest rate swap contracts		1,403	Other assets		19	Other liabilities		17
Total derivatives designated as hedging instruments				$	132		$	47
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,484	Other current assets	$	14	Other current liabilities	$	6
Total derivatives not designated as hedging instruments				$	14		$	6
Total derivative instruments				$	146		$	53

Offsetting Assets

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Assets		Gross Amount of
	Presented in the		Eligible Offsetting		Cash
	Consolidated		Recognized		Collateral		Net Amount of
December 31, 2019 (Millions)	Balance Sheet		Derivative Liabilities		Received		Derivative Assets
Derivatives subject to master netting agreements	$	142	$	14	$	—	$	128
Derivatives not subject to master netting agreements		—						—
Total	$	142					$	128

December 31, 2018 (Millions)
Derivatives subject to master netting agreements	$	146	$	38	$	—	$	108
Derivatives not subject to master netting agreements		—						—
Total	$	146					$	108

Offsetting Liabilities

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Liabilities		Gross Amount of
	Presented in the		Eligible Offsetting		Cash		Net Amount of
	Consolidated		Recognized		Collateral		Derivative
December 31, 2019 (Millions)	Balance Sheet		Derivative Assets		Pledged		Liabilities
Derivatives subject to master netting agreements	$	20	$	14	$	—	$	6
Derivatives not subject to master netting agreements		—						—
Total	$	20					$	6

December 31, 2018 (Millions)
Derivatives subject to master netting agreements	$	53	$	38	$	—	$	15
Derivatives not subject to master netting agreements		—						—
Total	$	53					$	15

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes.

Income Before Income Taxes

Income Before Income Taxes

(Millions)	2019		2018		2017
United States	$	3,008	$	3,487	$	4,149
International		2,704		3,513		3,399
Total	$	5,712	$	7,000	$	7,548

Provision for Income Taxes

Provision for Income Taxes

(Millions)	2019		2018		2017
Currently payable
Federal	$	534	$	698	$	1,022
State		59		109		59
International		673		763		722
Tax Cuts and Jobs Act (TCJA) non-current transition tax provision		—		176		623
Deferred
Federal		(32)		(38)		162
State		(26)		(17)		15
International		(78)		(54)		76
Total	$	1,130	$	1,637	$	2,679

Components of Deferred Tax Assets and Liabilities

Components of Deferred Tax Assets and Liabilities

(Millions)	2019		2018
Deferred tax assets:
Accruals not currently deductible
Employee benefit costs	$	169	$	187
Product and other claims		280		228
Miscellaneous accruals		119		113
Pension costs		824		643
Stock-based compensation		218		203
Net operating/capital loss/tax credit carryforwards		150		71
Foreign tax credits		66		—
Inventory		70		54
Other		113		24
Gross deferred tax assets		2,009		1,523
Valuation allowance		(158)		(67)
Total deferred tax assets	$	1,851	$	1,456
Deferred tax liabilities:
Product and other insurance receivables	$	—	$	(7)
Accelerated depreciation		(580)		(521)
Intangible amortization		(1,021)		(799)
Currency translation		(30)		(35)
Other		—		(8)
Total deferred tax liabilities	$	(1,631)	$	(1,370)
Net deferred tax assets	$	220	$	86

Reconciliation of Effective Income Tax Rate

Reconciliation of Effective Income Tax Rate

	2019		2018		2017
Statutory U.S. tax rate	21.0	%	21.0	%	35.0	%
State income taxes - net of federal benefit	0.5		1.0		0.8
International income taxes - net	0.2		0.2		(6.3)
Global Intangible Low Taxed Income (GILTI)	1.8		1.1		—
Foreign Derived Intangible Income (FDII)	(2.9)		(1.3)		—
U.S. TCJA enactment - net impacts	—		2.5		10.1
U.S. research and development credit	(1.7)		(1.5)		(0.7)
Reserves for tax contingencies	2.3		1.2		2.2
Domestic Manufacturer’s deduction	—		—		(1.8)
Employee share-based payments	(1.3)		(1.4)		(3.2)
All other - net	(0.1)		0.6		(0.6)
Effective worldwide tax rate	19.8	%	23.4	%	35.5	%

Reconciliation of Federal, State and Foreign Tax Gross Unrecognized Tax Benefits

Federal, State and Foreign Tax

(Millions)	2019		2018		2017
Gross UTB Balance at January 1	$	647	$	530	$	319
Additions based on tax positions related to the current year		76		129		119
Additions for tax positions of prior years		132		146		149
Additions related to recent acquisitions		396		—		—
Reductions for tax positions of prior years		(56)		(123)		(38)
Settlements		(4)		(17)		(3)
Reductions due to lapse of applicable statute of limitations		(24)		(18)		(16)
Gross UTB Balance at December 31	$	1,167	$	647	$	530
Net UTB impacting the effective tax rate at December 31	$	1,178	$	655	$	526

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Business Segments and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2019

Business Segments and Geographic Information

Business Segment Information

	Net Sales						Operating Income
(Millions)	2019		2018		2017		2019		2018		2017
Safety and Industrial	$	11,607	$	12,494	$	11,946	$	2,648	$	3,423	$	2,603
Transportation and Electronics		9,602		10,106		9,861		2,221		2,649		2,986
Health Care		7,431		6,826		6,635		1,863		1,921		1,877
Consumer		5,089		5,086		5,006		1,105		1,071		1,051
Corporate and Unallocated		110		50		2		(1,243)		(1,409)		(367)
Elimination of Dual Credit		(1,703)		(1,797)		(1,793)		(420)		(448)		(458)
Total Company	$	32,136	$	32,765	$	31,657	$	6,174	$	7,207	$	7,692

	Assets						Depreciation & Amortization						Capital Expenditures
(Millions)	2019		2018		2017		2019		2018		2017		2019		2018		2017
Safety and Industrial	$	12,593	$	13,086	$	13,560	$	682	$	528	$	424	$	391	$	375	$	255
Transportation and Electronics		7,611		7,773		7,786		324		337		437		390		339		382
Health Care		15,210		7,092		7,258		277		216		257		264		245		217
Consumer		2,792		2,963		2,909		91		97		117		130		115		110
Corporate and Unallocated		6,453		5,586		6,474		219		310		309		524		503		409
Total Company	$	44,659	$	36,500	$	37,987	$	1,593	$	1,488	$	1,544	$	1,699	$	1,577	$	1,373

Geographic Information

							Property, Plant and
	Net Sales						Equipment - net
(Millions)	2019		2018		2017		2019		2018
United States	$	13,159	$	12,840	$	12,372	$	5,442	$	4,915
Asia Pacific		9,796		10,254		9,809		1,637		1,624
Europe, Middle East and Africa		6,226		6,654		6,456		1,823		1,751
Latin America and Canada		2,965		3,024		3,033		431		448
Other Unallocated		(10)		(7)		(13)		—		—
Total Company	$	32,136	$	32,765	$	31,657	$	9,333	$	8,738

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Business Segments and Geographic Information - Segment and Geographic information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Business Segment Information
Net sales	$ 32,136	$ 32,765	$ 31,657
Operating Income	6,174	7,207	7,692
Assets	44,659	36,500	37,987
Depreciation and amortization	1,593	1,488	1,544
Capital expenditures	1,699	1,577	1,373
Property, Plant and Equipment - net	9,333	8,738
Business Segments. | Safety and Industrial
Business Segment Information
Net sales	11,607	12,494	11,946
Operating Income	2,648	3,423	2,603
Assets	12,593	13,086	13,560
Depreciation and amortization	682	528	424
Capital expenditures	391	375	255
Business Segments. | Transportation and Electronics
Business Segment Information
Net sales	9,602	10,106	9,861
Operating Income	2,221	2,649	2,986
Assets	7,611	7,773	7,786
Depreciation and amortization	324	337	437
Capital expenditures	390	339	382
Business Segments. | Health Care
Business Segment Information
Net sales	7,431	6,826	6,635
Operating Income	1,863	1,921	1,877
Assets	15,210	7,092	7,258
Depreciation and amortization	277	216	257
Capital expenditures	264	245	217
Business Segments. | Consumer
Business Segment Information
Net sales	5,089	5,086	5,006
Operating Income	1,105	1,071	1,051
Assets	2,792	2,963	2,909
Depreciation and amortization	91	97	117
Capital expenditures	130	115	110
Corporate and Unallocated
Business Segment Information
Net sales	110	50	2
Operating Income	(1,243)	(1,409)	(367)
Assets	6,453	5,586	6,474
Depreciation and amortization	219	310	309
Capital expenditures	524	503	409
Elimination of Dual Credit
Business Segment Information
Net sales	(1,703)	(1,797)	(1,793)
Operating Income	(420)	(448)	(458)
United States
Business Segment Information
Net sales	13,159	12,840	12,372
Property, Plant and Equipment - net	5,442	4,915
Asia Pacific
Business Segment Information
Net sales	9,796	10,254	9,809
Property, Plant and Equipment - net	1,637	1,624
Europe, Middle East and Africa
Business Segment Information
Net sales	6,226	6,654	6,456
Property, Plant and Equipment - net	1,823	1,751
Latin America and Canada
Business Segment Information
Net sales	2,965	3,024	3,033
Property, Plant and Equipment - net	431	448
Other Unallocated
Business Segment Information
Net sales	(10)	(7)	(13)
China/Hong Kong
Business Segment Information
Net sales	3,337	3,574	$ 3,255
Property, Plant and Equipment - net	$ 553	$ 542

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Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Option Program
Balance at the beginning of the period	34,569	34,965
Balance at the end of the period		34,569	34,965
Weighted average exercise price - Beginning balance	$ 138.98	$ 125.73
Weighted average exercise price - Ending balance		138.98	$ 125.73
Share- based compensation assumptions
Weighted average exercise price	$ 201.12	$ 233.63	$ 175.76
Risk-free interest rate (as a percent)	2.60%	2.70%	2.10%
Dividend yield (as a percent)	2.50%	2.40%	2.50%
Expected volatility (as a percent)	20.40%	21.00%	17.30%
Expected life	79 months	78 months	78 months
Black-Scholes fair value	$ 34.19	$ 41.59	$ 23.51
Stock Options
Stock Option Program
Balance at the beginning of the period	34,569	34,965	36,196
Granted - Annual	3,434	3,211	5,410
Exercised	(4,193)	(3,482)	(6,474)
Forfeited	(135)	(125)	(167)
Balance at the end of the period	33,675	34,569	34,965
Options exercisable	26,487	26,117	24,281
Options exercisable, exercise price	$ 136.75	$ 121.98	$ 108.50
Weighted average exercise price - Beginning balance	138.98	125.73	112.07
Weighted average exercise price - Granted - Annual	200.80	233.19	175.93
Weighted average exercise price - Exercised	89.89	91.01	90.37
Weighted average exercise price - Forfeited	201.27	188.00	162.36
Weighted average exercise price - Ending balance	$ 151.15	$ 138.98	$ 125.73
Weighted average remaining contractual life for options outstanding	64 months
Weighted average remaining contractual life for options exercisable	54 months
Aggregate intrinsic value for options outstanding	$ 1,100
Aggregate intrinsic value for options exercisable	$ 1,100
Expiration of annual grants	10 years
Compensation expense yet to be recognized	$ 62
Expense recognition period	20 months
Total intrinsic value of stock options exercised	$ 433	$ 469	$ 703
Cash received from options exercised	375	316	585
Tax benefit realized from exercise of stock options	$ 91	$ 99	$ 238
Stock Options | Maximum
Stock Option Program
Vesting period	3 years
Stock Options | Minimum
Stock Option Program
Vesting period	1 year

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Long-Term Debt and Short-Term Borrowings - Future Maturities of Long-term Debt (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Maturities of long-term debt
2020	$ 1,841
2021	1,682
2022	1,603
2023	1,811
2024	1,101
After 2024	11,321
Total long-term debt	19,359	$ 14,156
Floating rate note payments due in next twelve months	$ 149

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Acquisitions and Divestitures - Acquisitions (Details)	1 Months Ended			12 Months Ended
	Oct. 31, 2019 USD ($)	Feb. 28, 2019 USD ($)	Oct. 31, 2017 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)
Business Acquisitions Information
Accounts receivable				$ 370,000,000
Inventory				186,000,000
Other current assets				67,000,000
Property, plant and equipment				155,000,000
Purchased finite-lived intangible assets				4,081,000,000.000
Purchased goodwill				3,469,000,000
Other assets				131,000,000
Accounts payable and other liabilities				(565,000,000)
Interest bearing debt				(2,573,000,000)
Deferred tax asset/(liability) and accrued income taxes				(312,000,000)
Net assets acquired				5,009,000,000
Supplemental information:
Cash paid				5,194,000,000
Less: Cash acquired				210,000,000
Cash paid, net of cash acquired				4,984,000,000	$ (13,000,000)	$ 2,023,000,000
Consideration payable				25,000,000
Net assets acquired				5,009,000,000
Net sales				32,136,000,000	32,765,000,000	31,657,000,000
Operating loss				(6,174,000,000)	$ (7,207,000,000)	$ (7,692,000,000)
Number of business combinations completed					0
Customer related intangible assets
Business Acquisitions Information
Purchased finite-lived intangible assets				$ 2,035,000,000
Intangible assets useful life (in years)				18 years
Other technology-based intangible assets
Business Acquisitions Information
Purchased finite-lived intangible assets				$ 1,550,000,000
Intangible assets useful life (in years)				10 years
Definite-lived tradenames
Business Acquisitions Information
Purchased finite-lived intangible assets				$ 496,000,000
Intangible assets useful life (in years)				16 years
Maximum
Business Acquisitions Information
Intangible assets useful life (in years)				19 years
Minimum
Business Acquisitions Information
Intangible assets useful life (in years)				6 years
Weighted average
Business Acquisitions Information
Intangible assets useful life (in years)				14 years
M*Modal
Business Acquisitions Information
Accounts receivable				$ 75,000,000
Other current assets				2,000,000
Property, plant and equipment				8,000,000
Purchased goodwill				517,000,000
Other assets				58,000,000
Accounts payable and other liabilities				(127,000,000)
Interest bearing debt				(251,000,000)
Deferred tax asset/(liability) and accrued income taxes				(24,000,000)
Net assets acquired				704,000,000
Supplemental information:
Cash paid		$ 700,000,000		708,000,000
Less: Cash acquired				4,000,000
Cash paid, net of cash acquired				704,000,000
Net assets acquired				704,000,000
Assumed debt		$ 300,000,000
Net sales				300,000,000
Operating loss				25,000,000
M*Modal | Customer related intangible assets
Business Acquisitions Information
Purchased finite-lived intangible assets				275,000,000
M*Modal | Other technology-based intangible assets
Business Acquisitions Information
Purchased finite-lived intangible assets				160,000,000
M*Modal | Definite-lived tradenames
Business Acquisitions Information
Purchased finite-lived intangible assets				11,000,000
Acelity Inc. and its KCI subsidiaries
Business Acquisitions Information
Accounts receivable				295,000,000
Inventory				186,000,000
Other current assets				65,000,000
Property, plant and equipment				147,000,000
Purchased goodwill				2,952,000,000
Other assets				73,000,000
Accounts payable and other liabilities				(438,000,000)
Interest bearing debt				(2,322,000,000)
Deferred tax asset/(liability) and accrued income taxes				(288,000,000)
Net assets acquired				4,305,000,000
Supplemental information:
Cash paid				4,486,000,000
Less: Cash acquired				206,000,000
Cash paid, net of cash acquired	$ 4,500,000,000			4,280,000,000
Consideration payable				25,000,000
Net assets acquired				4,305,000,000
Assumed debt	$ 2,300,000,000
Net sales				350,000,000
Operating loss				45,000,000
Acelity Inc. and its KCI subsidiaries | Customer related intangible assets
Business Acquisitions Information
Purchased finite-lived intangible assets				1,760,000,000
Acelity Inc. and its KCI subsidiaries | Other technology-based intangible assets
Business Acquisitions Information
Purchased finite-lived intangible assets				1,390,000,000
Acelity Inc. and its KCI subsidiaries | Definite-lived tradenames
Business Acquisitions Information
Purchased finite-lived intangible assets				$ 485,000,000
Scott Safety
Supplemental information:
Cash paid			$ 2,000,000,000.0

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Goodwill and Intangible Assets - Schedules for Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Finite Lived Intangible Asset
Amortization expense for acquired intangible assets	$ 341	$ 249	$ 238
Expected amortization expense for acquired intangible assets recorded as of balance sheet date
2020	535
2021	523
2022	511
2023	482
2024	455
After 2024	$ 3,200

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Long-Term Debt and Short-Term Borrowings - Floating Rate Notes (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Dec. 31, 2004	Dec. 31, 2019
Floating rate notes due 2027 and 2040 and 2041
Number of years after date of issuance that put options commence		10 years
Floating rate note due 2044
Debt Instrument Term	40 years
Debt Instrument, Face Amount	$ 60	$ 55
Repurchase price of floating rate notes (as a percent)		100.00%
Maximum | Floating rate notes due 2027 and 2040 and 2041
Repurchase price of floating rate notes (as a percent)		100.00%
Minimum | Floating rate notes due 2027 and 2040 and 2041
Repurchase price of floating rate notes (as a percent)		99.00%

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Supplemental Cash Flow Information - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Supplemental Cash Flow Elements
Municipal security activity in return for finance lease obligations, in aggregate	$ 9	$ 13	$ 13

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Marketable Securities and Held-to-Maturity Debt Securities - Contractual maturity (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Marketable securities by contractual maturity
Due in one year or less	$ 98
Due after one year through five years	14
Due after five years through ten years	20
Due after ten years	9
Total marketable securities	$ 141	$ 417

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Income Taxes - Tax Effected Operating Loss, Capital Loss, and Tax Credit Carryovers (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Federal jurisdiction
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers	$ 82
Federal jurisdiction | Maximum
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date	10 years
Federal jurisdiction | Minimum
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date	1 year
State jurisdiction
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers	$ 79
State jurisdiction | Maximum
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date	11 years
State jurisdiction | Minimum
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date	1 year
International jurisdiction
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers	$ 55
International jurisdiction | Minimum
Tax effected operating loss, capital loss, and tax credit carryovers
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date	1 year

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Supplemental Equity and Comprehensive Income Information - Dividends and Transfer of Ownership Interest (Details) - $ / shares	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Dividends declared in current period (in dollars per share)	$ 1.44	$ 1.44	$ 1.44	$ 1.44	$ 1.36	$ 1.36	$ 1.36	$ 1.36	$ 1.175	$ 1.175	$ 1.175	$ 1.175	$ 5.76	$ 5.44	$ 4.70
3M India Limited
3M's ownership (as a percent)					75.00%									75.00%

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Supplemental Income Statement Information (Details) - USD ($) $ in Millions	3 Months Ended			12 Months Ended
	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest expense				$ 448	$ 350	$ 322
Interest income				(80)	(70)	(50)
Loss on extinguishment of debt			$ 96
Pension and postretirement net periodic benefit cost (benefit)				(68)	(73)	(128)
Loss on deconsolidation of Venezuelan subsidiary				162
Total				$ 462	$ 207	$ 144
Venezuela
Loss on deconsolidation of Venezuelan subsidiary		$ 162
Funded | Qualified and Non-qualified Pension Benefits
Pension settlement charge	$ 32

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Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Currently payable
Federal	$ 534	$ 698	$ 1,022
State	59	109	59
International	673	763	722
Tax Cuts and Jobs Act (TCJA) non-current transition tax provision		176	623
Deferred
Federal	(32)	(38)	162
State	(26)	(17)	15
International	(78)	(54)	76
Total provision for income taxes	$ 1,130	$ 1,637	$ 2,679

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Significant Accounting Policies - Acquired intangibles (Details)	12 Months Ended
	Dec. 31, 2019
Minimum
Finite Lived Intangible Assets
Intangible assets useful life	4 years
Minimum | Customer related intangible assets
Finite Lived Intangible Assets
Intangible assets useful life	12 years
Minimum | Patents
Finite Lived Intangible Assets
Intangible assets useful life	6 years
Minimum | Other technology-based intangible assets
Finite Lived Intangible Assets
Intangible assets useful life	6 years
Minimum | Definite-lived tradenames
Finite Lived Intangible Assets
Intangible assets useful life	6 years
Minimum | Other amortizable intangible assets
Finite Lived Intangible Assets
Intangible assets useful life	5 years
Maximum
Finite Lived Intangible Assets
Intangible assets useful life	20 years
Maximum | Customer related intangible assets
Finite Lived Intangible Assets
Intangible assets useful life	19 years
Maximum | Patents
Finite Lived Intangible Assets
Intangible assets useful life	17 years
Maximum | Other technology-based intangible assets
Finite Lived Intangible Assets
Intangible assets useful life	15 years
Maximum | Definite-lived tradenames
Finite Lived Intangible Assets
Intangible assets useful life	20 years
Maximum | Other amortizable intangible assets
Finite Lived Intangible Assets
Intangible assets useful life	13 years

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Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Deferred tax assets valuation allowance	$ 158	$ 67

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Supplemental Income Statement Information (Tables)

12 Months Ended

Dec. 31, 2019

Supplemental Income Statement Information

Schedule of other expense (income)

(Millions)	2019		2018		2017
Interest expense	$	448	$	350	$	322
Interest income		(80)		(70)		(50)
Pension and postretirement net periodic benefit cost (benefit)		(68)		(73)		(128)
Loss on deconsolidation of Venezuelan subsidiary		162		—		—
Total	$	462	$	207	$	144

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Leases - Disclosures related to periods prior to adoption of new lease standard (Details) £ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2003 GBP (£)
Capital and Operating Leases
Rental expense under operating leases	$ 393	$ 343
Accumulated depreciation for capital leases	54
Capital lease asset and obligation	92
Building in United Kingdom
Capital and Operating Leases
Capital lease asset and obligation	43		£ 34
Capital lease term (in years)			22 years
Capital lease obligations in aggregate
Capital and Operating Leases
Capital lease asset and obligation	$ 13	$ 13
Capital lease term (in years)	15 years

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Revenue (Tables)

12 Months Ended

Dec. 31, 2019

Revenue

Schedule of disaggregated revenue recognized during the period

	Year ended
	December 31,
Net Sales (Millions)	2019		2018		2017
Abrasives	$	1,414	$	1,533	$	1,498
Automotive Aftermarket		1,243		1,374		1,388
Closure and Masking Systems		1,111		1,224		1,259
Communication Markets		—		175		387
Electrical Markets		1,200		1,243		1,196
Industrial Adhesives and Tapes		2,737		2,880		2,773
Personal Safety		3,508		3,606		2,960
Roofing Granules		366		353		372
Other Safety and Industrial		28		106		113
Total Safety and Industrial Business Segment	$	11,607	$	12,494	$	11,946
Advanced Materials	$	1,246	$	1,236	$	1,123
Automotive and Aerospace		1,943		2,109		2,047
Commercial Solutions		1,760		1,829		1,743
Electronics		3,710		3,965		3,842
Transportation Safety		949		957		1,103
Other Transportation and Electronics		(6)		10		3
Total Transportation and Electronics Business Segment	$	9,602	$	10,106	$	9,861
Drug Delivery	$	406	$	444	$	486
Food Safety		341		328		303
Health Information Systems		1,177		837		791
Medical Solutions		3,406		3,036		2,934
Oral Care		1,321		1,353		1,322
Separation and Purification Sciences		790		822		797
Other Health Care		(10)		6		2
Total Health Care Business Group	$	7,431	$	6,826	$	6,635
Consumer Health Care	$	383	$	391	$	425
Home Care		991		1,012		1,028
Home Improvement		2,305		2,233		2,118
Stationery and Office		1,373		1,396		1,386
Other Consumer		37		54		49
Total Consumer Business Group	$	5,089	$	5,086	$	5,006
Corporate and Unallocated	$	110	$	50	$	2
Elimination of Dual Credit		(1,703)		(1,797)		(1,793)
Total Company	$	32,136	$	32,765	$	31,657

	Year ended December 31, 2019
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,643	$	2,877	$	2,672	$	1,419	$	(4)	$	11,607
Transportation and Electronics			2,304		5,228		1,472		601		(3)		9,602
Health Care			3,597		1,490		1,743		603		(2)		7,431
Consumer			3,119		984		545		442		(1)		5,089
Corporate and Unallocated			100		—		1		9		—		110
Elimination of Dual Credit			(604)		(783)		(207)		(109)		—		(1,703)
Total Company		$	13,159	$	9,796	$	6,226	$	2,965	$	(10)	$	32,136

	Year ended December 31, 2018
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,921	$	3,099	$	3,001	$	1,476	$	(3)	$	12,494
Transportation and Electronics			2,406		5,514		1,578		610		(2)		10,106
Health Care			3,039		1,458		1,733		596		—		6,826
Consumer			3,045		1,021		574		447		(1)		5,086
Corporate and Unallocated			48		—		—		3		(1)		50
Elimination of Dual Credit			(619)		(838)		(232)		(108)		—		(1,797)
Total Company		$	12,840	$	10,254	$	6,654	$	3,024	$	(7)	$	32,765

	Year ended December 31, 2017
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,605	$	2,981	$	2,869	$	1,497	$	(6)	$	11,946
Transportation and Electronics			2,372		5,328		1,550		615		(4)		9,861
Health Care			3,037		1,346		1,667		587		(2)		6,635
Consumer			2,943		1,029		585		450		(1)		5,006
Corporate and Unallocated			6		(1)		1		(4)		—		2
Elimination of Dual Credit			(591)		(874)		(216)		(112)		—		(1,793)
Total Company		$	12,372	$	9,809	$	6,456	$	3,033	$	(13)	$	31,657

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Leases - Supplemental cash flow and other information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 309
Operating cash flows from finance leases	2
Financing cash flows from finance leases	18
Right of use assets obtained in exchange for lease liabilities:
Operating leases	326
Finance leases	61
Gain on sale leaseback transactions, net	$ 82

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Commitments and Contingencies - Federal False Claims Act / Qui Tam Litigation (Details) - Federal False Claims Act / Qui Tam Litigation	12 Months Ended
	Dec. 31, 2019 lawsuit person
Loss contingencies
Number of actions declined to intervene	2
Number of lawsuits pending	2
Number of former employees | person	2
Godecke case
Loss contingencies
Number of lawsuits pending	1

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Revenue

12 Months Ended

Dec. 31, 2019

Revenue

Revenue

NOTE 2. Revenue

The Company adopted ASU No. 2014-09 and related standards (collectively, ASC 606, Revenue from Contracts with Customers), on January 1, 2018 using the modified retrospective method of adoption. Prior periods have not been restated. Due to the cumulative net impact of adopting ASC 606, the January 1, 2018 balance of retained earnings was increased by less than $2 million, primarily relating to the accelerated recognition for software installation service and training revenue. This cumulative impact reflects retrospective application of ASC 606 only to contracts that were not completed as of January 1, 2018. Further, the Company applied the practical expedient permitting the effect of all contract modifications that occurred before January 1, 2018 to be aggregated in the transition accounting. The impact of applying ASC 606 as compared with previous guidance applied to revenues and costs was not material for the year ended December 31, 2018.

Contract Balances:

Deferred revenue primarily relates to revenue that is recognized over time for one-year software license contracts. Refer to Note 7 for deferred revenue balances at December 31, 2018 and 2019. Approximately $600 million of the December 31, 2018 balance was recognized as revenue during the year ended December 31, 2019, while approximately $500 million of the December 31, 2017 balance was recognized as revenue during the year ended December 31, 2018.

Disaggregated revenue information:

The Company views the following disaggregated disclosures as useful to understanding the composition of revenue recognized during the respective reporting periods:

	Year ended
	December 31,
Net Sales (Millions)	2019		2018		2017
Abrasives	$	1,414	$	1,533	$	1,498
Automotive Aftermarket		1,243		1,374		1,388
Closure and Masking Systems		1,111		1,224		1,259
Communication Markets		—		175		387
Electrical Markets		1,200		1,243		1,196
Industrial Adhesives and Tapes		2,737		2,880		2,773
Personal Safety		3,508		3,606		2,960
Roofing Granules		366		353		372
Other Safety and Industrial		28		106		113
Total Safety and Industrial Business Segment	$	11,607	$	12,494	$	11,946
Advanced Materials	$	1,246	$	1,236	$	1,123
Automotive and Aerospace		1,943		2,109		2,047
Commercial Solutions		1,760		1,829		1,743
Electronics		3,710		3,965		3,842
Transportation Safety		949		957		1,103
Other Transportation and Electronics		(6)		10		3
Total Transportation and Electronics Business Segment	$	9,602	$	10,106	$	9,861
Drug Delivery	$	406	$	444	$	486
Food Safety		341		328		303
Health Information Systems		1,177		837		791
Medical Solutions		3,406		3,036		2,934
Oral Care		1,321		1,353		1,322
Separation and Purification Sciences		790		822		797
Other Health Care		(10)		6		2
Total Health Care Business Group	$	7,431	$	6,826	$	6,635
Consumer Health Care	$	383	$	391	$	425
Home Care		991		1,012		1,028
Home Improvement		2,305		2,233		2,118
Stationery and Office		1,373		1,396		1,386
Other Consumer		37		54		49
Total Consumer Business Group	$	5,089	$	5,086	$	5,006
Corporate and Unallocated	$	110	$	50	$	2
Elimination of Dual Credit		(1,703)		(1,797)		(1,793)
Total Company	$	32,136	$	32,765	$	31,657

	Year ended December 31, 2019
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,643	$	2,877	$	2,672	$	1,419	$	(4)	$	11,607
Transportation and Electronics			2,304		5,228		1,472		601		(3)		9,602
Health Care			3,597		1,490		1,743		603		(2)		7,431
Consumer			3,119		984		545		442		(1)		5,089
Corporate and Unallocated			100		—		1		9		—		110
Elimination of Dual Credit			(604)		(783)		(207)		(109)		—		(1,703)
Total Company		$	13,159	$	9,796	$	6,226	$	2,965	$	(10)	$	32,136

	Year ended December 31, 2018
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,921	$	3,099	$	3,001	$	1,476	$	(3)	$	12,494
Transportation and Electronics			2,406		5,514		1,578		610		(2)		10,106
Health Care			3,039		1,458		1,733		596		—		6,826
Consumer			3,045		1,021		574		447		(1)		5,086
Corporate and Unallocated			48		—		—		3		(1)		50
Elimination of Dual Credit			(619)		(838)		(232)		(108)		—		(1,797)
Total Company		$	12,840	$	10,254	$	6,654	$	3,024	$	(7)	$	32,765

	Year ended December 31, 2017
Net Sales (Millions)		United States		Asia Pacific		Europe, Middle East and Africa		Latin America and Canada		Other Unallocated		Worldwide
Safety and Industrial		$	4,605	$	2,981	$	2,869	$	1,497	$	(6)	$	11,946
Transportation and Electronics			2,372		5,328		1,550		615		(4)		9,861
Health Care			3,037		1,346		1,667		587		(2)		6,635
Consumer			2,943		1,029		585		450		(1)		5,006
Corporate and Unallocated			6		(1)		1		(4)		—		2
Elimination of Dual Credit			(591)		(874)		(216)		(112)		—		(1,793)
Total Company		$	12,372	$	9,809	$	6,456	$	3,033	$	(13)	$	31,657

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Supplemental Income Statement Information

12 Months Ended

Dec. 31, 2019

Supplemental Income Statement Information

Supplemental Income Statement Information

NOTE 6. Supplemental Income Statement Information

Other expense (income), net consists of the following:

(Millions)	2019		2018		2017
Interest expense	$	448	$	350	$	322
Interest income		(80)		(70)		(50)
Pension and postretirement net periodic benefit cost (benefit)		(68)		(73)		(128)
Loss on deconsolidation of Venezuelan subsidiary		162		—		—
Total	$	462	$	207	$	144

Pension and postretirement net periodic benefit costs described in the table above include all components of defined benefit plan net periodic benefit costs except service cost, which is reported in various operating expense lines. Pension and postretirement net periodic benefit costs for 2019 included a second quarter charge related to the voluntary early retirement incentive program announced in May 2019 in addition to U.S. non-qualified pension plan settlement charges of $32 million recognized in the fourth quarter of 2019. Refer to Note 13 for additional details on the voluntary early retirement incentive program in addition to the components of pension and postretirement net periodic benefit costs.

In the second quarter of 2019, the Company incurred a charge of $162 million related to the deconsolidation of its Venezuelan subsidiary. Refer to Note 1 for additional details.

The Company recorded an early debt extinguishment charge of approximately $96 million which was included within interest expense in the fourth quarter of 2017.

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Derivatives - Fair Value Hedges - IS Location (Details) - Fair value hedges - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Derivatives in Fair Value Hedging Relationships
Gain (Loss) on Derivative Recognized in Income	$ (5)	$ (9)
Gain (Loss) on Hedged Item Recognized in Income	5	9
Interest rate swap contracts | Interest expense.
Derivatives in Fair Value Hedging Relationships
Gain (Loss) on Derivative Recognized in Income	(5)	(9)
Gain (Loss) on Hedged Item Recognized in Income	$ 5	$ 9

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Income Taxes

12 Months Ended

Dec. 31, 2019

Income Taxes.

Income Taxes

NOTE 10. Income Taxes

Income Before Income Taxes

(Millions)	2019		2018		2017
United States	$	3,008	$	3,487	$	4,149
International		2,704		3,513		3,399
Total	$	5,712	$	7,000	$	7,548

Provision for Income Taxes

(Millions)	2019		2018		2017
Currently payable
Federal	$	534	$	698	$	1,022
State		59		109		59
International		673		763		722
Tax Cuts and Jobs Act (TCJA) non-current transition tax provision		—		176		623
Deferred
Federal		(32)		(38)		162
State		(26)		(17)		15
International		(78)		(54)		76
Total	$	1,130	$	1,637	$	2,679

Components of Deferred Tax Assets and Liabilities

(Millions)	2019		2018
Deferred tax assets:
Accruals not currently deductible
Employee benefit costs	$	169	$	187
Product and other claims		280		228
Miscellaneous accruals		119		113
Pension costs		824		643
Stock-based compensation		218		203
Net operating/capital loss/tax credit carryforwards		150		71
Foreign tax credits		66		—
Inventory		70		54
Other		113		24
Gross deferred tax assets		2,009		1,523
Valuation allowance		(158)		(67)
Total deferred tax assets	$	1,851	$	1,456
Deferred tax liabilities:
Product and other insurance receivables	$	—	$	(7)
Accelerated depreciation		(580)		(521)
Intangible amortization		(1,021)		(799)
Currency translation		(30)		(35)
Other		—		(8)
Total deferred tax liabilities	$	(1,631)	$	(1,370)
Net deferred tax assets	$	220	$	86

The net deferred tax assets are included as components of Other Assets and Other Liabilities within the Consolidated Balance Sheet. See Note 7 “Supplemental Balance Sheet Information” for further details.

As of December 31, 2019, the Company had tax effected operating losses, capital losses, and tax credit carryovers for federal (approximately $82 million), state (approximately $79 million), and international (approximately $55 million), with all amounts before limitation impacts and valuation allowances. Federal tax attribute carryovers will expire after one to 10 years, the state after one to 11 years, and the international after one year to an indefinite carryover period. As of December 31, 2019, the Company has provided $158 million of valuation allowance against certain of these deferred tax assets based on management’s determination that it is more-likely-than-not that the tax benefits related to these assets will not be realized.

Reconciliation of Effective Income Tax Rate

	2019		2018		2017
Statutory U.S. tax rate	21.0	%	21.0	%	35.0	%
State income taxes - net of federal benefit	0.5		1.0		0.8
International income taxes - net	0.2		0.2		(6.3)
Global Intangible Low Taxed Income (GILTI)	1.8		1.1		—
Foreign Derived Intangible Income (FDII)	(2.9)		(1.3)		—
U.S. TCJA enactment - net impacts	—		2.5		10.1
U.S. research and development credit	(1.7)		(1.5)		(0.7)
Reserves for tax contingencies	2.3		1.2		2.2
Domestic Manufacturer’s deduction	—		—		(1.8)
Employee share-based payments	(1.3)		(1.4)		(3.2)
All other - net	(0.1)		0.6		(0.6)
Effective worldwide tax rate	19.8	%	23.4	%	35.5	%

The effective tax rate for 2019 was 19.8 percent, compared to 23.4 percent in 2018, a decrease of 3.6 percentage points, impacted by several factors. Primary factors that decreased the effective tax rate for 2019 included prior year measurement period adjustments related to 2017 Tax Cuts and Jobs Act (TCJA), prior year resolution of the NRD lawsuit (as described in Note 16), and geographical income mix. These decreases were partially offset by the deconsolidation of the Venezuelan subsidiary, adjustments to uncertain tax positions, and significant litigation-related charges.

The effective tax rate for 2018 was 23.4 percent, compared to 35.5 percent in 2017, a decrease of 12.1 percentage points, impacted by several factors. Primary factors that decreased the Company’s effective tax rate included favorable aspects of the Tax Cuts and Jobs Act (TCJA) including the decrease in the U.S. income tax rate and foreign-derived intangible income (FDII), reduced transitional impact of TCJA related to transition tax and remeasurement of deferred tax assets/liabilities, increased benefits from the R&D tax credit, and favorable adjustment to prior year uncertain tax provisions. These decreases were partially offset by the elimination of the domestic manufacturing deduction, the global intangible low-taxed income (GILTI) provision, and lower excess tax benefits related to employee share-based payments.

The TCJA was enacted in December 2017, after which the SEC staff issued Staff Accounting Bulletin (SAB) 118, which provided a measurement period of up to one year from the TCJA’s enactment date for companies to complete their accounting under ASC 740. In connection with the enactment of the TCJA, the Company recorded a net tax expense of $762 million in the fourth quarter of 2017 and additional net charges of $176 million as measurement period adjustments in 2018, which are comprised of both a transition tax in addition to a remeasurement of deferred tax assets/liabilities and other impacts.

The TCJA’s transition tax is payable over eight years beginning in 2018. As of December 31, 2019 and December 31, 2018, 3M reflected $653 million and $649 million, respectively, in accrued income taxes – long-term portion and $33 million payable within one year associated with the transition tax.

The Company adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, as described in Note 1, on January 1, 2019. The purpose of this ASU was to allow a reclassification to retained earnings of one-time income tax effects stranded in accumulated other comprehensive income (AOCI) arising from the change in the U.S. federal corporate tax rate as a result of TCJA. The effect of this adoption resulted in a reclassification between retained earnings and AOCI, which

increased retained earnings by approximately $0.9 billion, with an offsetting increase to accumulated other comprehensive loss for the same amount.

The IRS has completed its field examination of the Company’s U.S. federal income tax returns for 2005 through 2015, but the years have not closed as the Company is in the process of resolving issues identified during those examinations. The Company is under examination or in appeals for 2015 through 2018. In addition to the U.S. federal examination, there is also audit activity in several U.S. state and foreign jurisdictions. As of December 31, 2019, no taxing authority proposed significant adjustments to the Company’s tax positions for which the Company is not adequately reserved.

It is reasonably possible that the amount of unrecognized tax benefits could significantly change within the next 12 months. The Company has ongoing federal, state and international income tax audits in various jurisdictions and evaluates uncertain tax positions that may be challenged by local tax authorities and not fully sustained. These uncertain tax positions are reviewed on an ongoing basis and adjusted in light of facts and circumstances including progression of tax audits, developments in case law and closing of statutes of limitation. At this time, the Company expects approximately $50 million of unrecognized tax benefits to be recognized within the next 12 months.

The Company recognizes the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (UTB) is as follows:

Federal, State and Foreign Tax

(Millions)	2019		2018		2017
Gross UTB Balance at January 1	$	647	$	530	$	319
Additions based on tax positions related to the current year		76		129		119
Additions for tax positions of prior years		132		146		149
Additions related to recent acquisitions		396		—		—
Reductions for tax positions of prior years		(56)		(123)		(38)
Settlements		(4)		(17)		(3)
Reductions due to lapse of applicable statute of limitations		(24)		(18)		(16)
Gross UTB Balance at December 31	$	1,167	$	647	$	530
Net UTB impacting the effective tax rate at December 31	$	1,178	$	655	$	526

The total amount of UTB, if recognized, would affect the effective tax rate by $1,178 million as of December 31, 2019, $655 million as of December 31, 2018, and $526 million as of December 31, 2017. The ending net UTB results from adjusting the gross balance for deferred items, interest and penalties, and deductible taxes. The net UTB is included as components of Other Assets, Accrued Income Taxes, and Other Liabilities within the Consolidated Balance Sheet.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. The Company recognized in the consolidated statement of income on a gross basis approximately $33 million of expense, $12 million of expense, and $20 million of expense in 2019, 2018, and 2017, respectively. The amount of interest and penalties recognized may be an expense or benefit due to new or remeasured unrecognized tax benefit accruals. At December 31, 2019, and December 31, 2018, accrued interest and penalties in the consolidated balance sheet on a gross basis were $102 million and $69 million, respectively. Included in these interest and penalty amounts are interest and penalties related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

As a result of certain employment commitments and capital investments made by 3M, income from certain manufacturing activities in the following countries is subject to reduced tax rates or, in some cases, is exempt from tax for years through the following: China (2019), Korea (2019), Switzerland (2023), Singapore (2025), and Brazil (2028). The income tax benefits attributable to the tax status of these subsidiaries are estimated to be $127 million (22 cents per diluted share) in 2019, $227 million (38 cents per diluted share) in 2018, and $228 million (37 cents per diluted share) in 2017.

The Company has not provided deferred taxes on approximately $14 billion of undistributed earnings from non-U.S. subsidiaries as of December 31, 2019 which are indefinitely reinvested in operations. Because of the multiple avenues in which to repatriate the earnings to minimize tax cost, and because a large portion of these earnings are not liquid, it is not practical to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely.

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Derivatives - Statement of Income Location and Impact of Cash Flow (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cost of sales
Derivatives in Fair Value Hedging Relationships
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded	$ 17,136
Other expense (income), net
Derivatives in Fair Value Hedging Relationships
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded	462
Cash flow hedge
Gain or (loss) on cash flow hedging relationships:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	70
Cash flow hedge | Foreign currency forward/option contracts | Cost of sales
Gain or (loss) on cash flow hedging relationships:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	74
Cash flow hedge | Interest rate swap contracts | Other expense (income), net
Gain or (loss) on cash flow hedging relationships:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	(4)
Fair value hedges
Gain or (loss) on fair value hedging relationships:
Hedged items		$ (5)	$ (9)
Fair value hedges | Interest rate swap contracts | Other expense (income), net
Gain or (loss) on fair value hedging relationships:
Hedged items	(8)
Derivatives designated as hedging instruments	$ 8

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Derivatives - Currency Effects (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Foreign Currency
Year-on-year foreign currency transaction effects, including hedging impact, gain (loss) impact on pre-tax income	$ 201	$ (92)

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Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statement of Income
Net sales	$ 32,136	$ 32,765	$ 31,657
Operating expenses
Cost of sales	17,136	16,682	16,055
Selling, general and administrative expenses	7,029	7,602	6,626
Research, development and related expenses	1,911	1,821	1,870
Gain on sale of businesses	(114)	(547)	(586)
Total operating expenses	25,962	25,558	23,965
Operating income	6,174	7,207	7,692
Interest expense and income
Other expense (income), net	462	207	144
Income before income taxes	5,712	7,000	7,548
Provision for income taxes	1,130	1,637	2,679
Net income including noncontrolling interest	4,582	5,363	4,869
Less: Net income attributable to noncontrolling interest	12	14	11
Net income attributable to 3M	$ 4,570	$ 5,349	$ 4,858
Weighted average 3M common shares outstanding - basic (in shares)	577.0	588.5	597.5
Earnings per share attributable to 3M common shareholders - basic (in dollars per share)	$ 7.92	$ 9.09	$ 8.13
Weighted average 3M common shares outstanding - diluted (in shares)	585.1	602.0	612.7
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share)	$ 7.81	$ 8.89	$ 7.93

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Consolidated Statement of Changes in Equity - USD ($) $ in Millions	Common Stock and Additional Paid-in Capital	Retained Earnings	Treasury Stock	Total Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interest	Total
Balance at the beginning of the period at Dec. 31, 2016	$ 5,070	$ 37,907	$ (25,434)	$ (7,245)	$ 45	$ 10,343
Increase (decrease) in equity
Net income		4,858			11	4,869
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment				370	3	373
Defined benefit pension and postretirement plans adjustment				52		52
Cash flow hedging instruments - unrealized gain (loss)				(203)		(203)
Total other comprehensive income (loss), net of tax						222
Dividends declared		(2,803)				(2,803)
Stock-based compensation	291					291
Reacquired stock			(2,044)			(2,044)
Issuances pursuant to stock option and benefit plans		(847)	1,591			744
Balance at the end of the period at Dec. 31, 2017	5,361	39,115	(25,887)	(7,026)	59	11,622
Increase (decrease) in equity
Net income		5,349			14	5,363
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment				(461)	(6)	(467)
Defined benefit pension and postretirement plans adjustment				444		444
Cash flow hedging instruments - unrealized gain (loss)				176		176
Total other comprehensive income (loss), net of tax						153
Dividends declared		(3,193)				(3,193)
Transfer of ownership involving non-wholly owned subsidiaries		14		1	(15)
Stock-based compensation	291					291
Reacquired stock			(4,888)			(4,888)
Issuances pursuant to stock option and benefit plans		(649)	1,149			500
Balance at the end of the period at Dec. 31, 2018	5,652	40,636	(29,626)	(6,866)	52	9,848
Increase (decrease) in equity
Net income		4,570			12	4,582
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment				212	(1)	211
Defined benefit pension and postretirement plans adjustment				(560)		(560)
Cash flow hedging instruments - unrealized gain (loss)				(72)		(72)
Total other comprehensive income (loss), net of tax						(421)
Dividends declared		(3,316)				(3,316)
Stock-based compensation	264					264
Reacquired stock			(1,381)			(1,381)
Issuances pursuant to stock option and benefit plans		(622)	1,158			536
Balance at the end of the period at Dec. 31, 2019	$ 5,916	42,135	$ (29,849)	(8,139)	$ 63	10,126
Increase (decrease) in equity
Impact of ASUs | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income		853		$ (853)
Impact of ASUs | ASU 2016-02 Leases		$ 14				$ 14

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Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Carrying Value
Financial Instruments
Long-term debt, excluding current portion - Fair Value	$ 17,518	$ 13,411
Fair Value
Financial Instruments
Long-term debt, excluding current portion - Fair Value	$ 18,475	$ 13,586

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Derivatives

12 Months Ended

Dec. 31, 2019

Derivatives

Derivatives

NOTE 14. Derivatives

The Company uses interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments used by 3M, how and why 3M uses such instruments, how such instruments are accounted for, and how such instruments impact 3M’s financial position and performance.

3M adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities as of January 1, 2019. The disclosures contained within this note have been updated to reflect the new guidance, except for prior period amounts presented, as the disclosure changes were adopted prospectively. For derivative instruments that are designated in a cash flow or fair value hedging relationship, the impact of this accounting standard was to remove the requirement to test for ineffectiveness. Prior to the adoption of this ASU, any gain or loss related to hedge ineffectiveness was recognized in current earnings. For any net investment hedges entered into on or after January 1, 2019, amounts excluded from the assessment of hedge effectiveness, including the time value of the forward contract at the inception of the hedge, are recognized in earnings using an amortization approach over the life of the hedging instrument on a straight-line basis. Any difference between the change in the fair value of the excluded component and the amount amortized into earnings during the period is recorded in cumulative translation within other comprehensive income.

Additional information with respect to derivatives is included elsewhere as follows:

● Impact on other comprehensive income of nonderivative hedging and derivative instruments is included in Note 8.

● Fair value of derivative instruments is included in Note 15.

● Derivatives and/or hedging instruments associated with the Company’s long-term debt are also described in Note 12.

Types of Derivatives/Hedging Instruments and Inclusion in Income/Other Comprehensive Income:

Cash Flow Hedges:

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction

affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized in current earnings.

Cash Flow Hedging - Foreign Currency Forward and Option Contracts: The Company enters into foreign exchange forward and option contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. The settlement or extension of these derivatives will result in reclassifications (from accumulated other comprehensive income) to earnings in the period during which the hedged transactions affect earnings. 3M may dedesignate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously included in accumulated other comprehensive income for dedesignated hedges remains in accumulated other comprehensive income until the forecasted transaction occurs or becomes probable of not occurring. Changes in the value of derivative instruments after dedesignation are recorded in earnings and are included in the Derivatives Not Designated as Hedging Instruments section below. The maximum length of time over which 3M hedges its exposure to the variability in future cash flows of the forecasted transactions is 36 months.

Cash Flow Hedging — Interest Rate Contracts: The Company may use forward starting interest rate contracts to hedge exposure to variability in cash flows from interest payments on forecasted debt issuances.

In the fourth quarter of 2016, the Company entered into forward starting interest rate swaps with a notional amount of $200 million as a hedge against interest rate volatility associated with a forecasted issuance of fixed rate debt. In 2017, the Company entered into additional forward starting interest rate swaps with notional amounts of $600 million as hedges against interest rate volatility associated with a forecasted issuance of fixed rate debt. Prior to the issuance of medium-term notes in October 2017, 3M terminated these interest rate swaps. The termination resulted in an immaterial loss within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

During 2018, the Company entered into forward starting interest rate swaps with a notional amount of $1.2 billion as hedges
against interest rate volatility associated with forecasted issuances of fixed rate debt. Concurrent with the issuance of the medium-term notes in September 2018, 3M terminated $500 million of these interest rate swaps. The termination resulted in an immaterial gain within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

As of December 31, 2018, the Company had $700 million of notional amount in outstanding forward starting interest rate swaps as hedges against interest rate volatility with forecasted issuances of fixed rate debt. During 2019, the Company entered into additional forward starting interest rate swaps with a notional amount of $743 million. Concurrent with the issuance of the medium-term notes in February 2019 and the additional issuance of registered notes in August 2019, 3M terminated all outstanding interest rate swaps related to forecasted issuances of debt. These terminations resulted in a net loss of $143 million within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

The amortization of gains and losses on forward starting interest rate swaps is included in the tables below as part of the gain/(loss) reclassified from accumulated other comprehensive income into income.

As of December 31, 2019, the Company had a balance of $31 million associated with the after-tax net unrealized loss associated with cash flow hedging instruments recorded in accumulated other comprehensive income. This includes a remaining balance of $112 million (after-tax loss) related to the forward starting interest rate swaps, which will be amortized over the respective lives of the notes. Based on exchange rates as of December 31, 2019, 3M expects to reclassify approximately $42 million and $20 million of the after-tax net unrealized foreign exchange cash flow hedging gains to earnings in 2020 and 2021, respectively, in addition to reclassifying approximately $93 million of the after-tax net unrealized foreign exchange cash flow hedging losses to earnings after 2021 (with the impact offset by earnings/losses from underlying hedged items).

The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative instruments designated as cash flow hedges are provided in the following table. Reclassifications of amounts from accumulated other comprehensive income into income include accumulated gains (losses) on dedesignated hedges at the time earnings are impacted by the forecasted transaction.

	Pretax Gain (Loss)
	Recognized in Other		Pretax Gain (Loss) Reclassified
	Comprehensive		from Accumulated Other
	Income on Derivative		Comprehensive Income into Income
Year ended December 31, 2019 (Millions)	Amount		Location	Amount
Foreign currency forward/option contracts	$	96	Cost of sales	$	74
Interest rate swap contracts		(122)	Interest expense		(4)
Total	$	(26)		$	70

			Pretax Gain (Loss) Recognized in
	Pretax Gain (Loss)		Income on Effective Portion of			Ineffective Portion of Gain
	Recognized in Other		Derivative as a Result of			(Loss) on Derivative and
	Comprehensive		Reclassification from			Amount Excluded from
	Income on Effective		Accumulated Other			Effectiveness Testing
	Portion of Derivative		Comprehensive Income			Recognized in Income
Year ended December 31, 2018 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	151	Cost of sales	$	(95)	Cost of sales	$	—
Interest rate swap contracts		(18)	Interest expense		(1)	Interest expense		—
Total	$	133		$	(96)		$	—

Year ended December 31, 2017 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(305)	Cost of sales	$	8	Cost of sales	$	—
Interest rate swap contracts		(6)	Interest expense		(1)	Interest expense		—
Total	$	(311)		$	7		$	—

Fair Value Hedges:

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.

Fair Value Hedging - Interest Rate Swaps: The Company manages interest expense using a mix of fixed and floating rate debt. To help manage borrowing costs, the Company may enter into interest rate swaps. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense.

In November 2013, 3M issued a Eurobond due in 2021 for a face amount of 600 million Euros. Upon debt issuance, 3M completed a fixed-to-floating interest rate swap on a notional amount of 300 million Euros as a fair value hedge of a portion of the fixed interest rate Eurobond obligation.

In June 2014, 3M issued $950 million aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into an interest rate swap to convert $600 million of a $625 million note that was due in 2019, included in this issuance, to an interest rate based on a floating three-month LIBOR index as a fair value hedge of a portion of the fixed interest rate medium-term note obligation. This interest rate swap matured in conjunction with the repayment of the $625 million aggregate principal amount of fixed-rate medium notes that matured in June 2019.

In August 2015, 3M issued $1.5 billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into two interest rate swaps as fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first converted a $450 million three-year fixed rate note that matured in August 2018 at which time the associated interest rate swap also matured, and

the second converted $300 million of a five-year fixed rate note that is due in 2020, included in this issuance, to an interest rate based on a floating three-month LIBOR index.

In the fourth quarter of 2017, the Company entered into an interest rate swap with a notional amount of $200 million that converted the company’s fixed-rate medium-term note due 2020 into a floating-rate note as a hedge of its exposure to changes in the fair value that is attributable to interest rate risk.

In September 2018, the Company entered into an interest rate swap with a notional amount of $200 million that converted a portion of the Company’s $400 million aggregate principal amount of fixed rate medium-term notes due 2021 into a floating rate note with an interest rate based on a three-month LIBOR index as a hedge of its exposure to changes in fair value that are attributable to interest rate risk.

Refer to the section below titled Statement of Income Location and Impact of Cash Flow and Fair Value Derivative Instruments for details on the location within the consolidated statements of income for amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items for the year ended December 31, 2019.

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items are as follows for periods prior to 2019:

	Gain (Loss) on Derivative			Gain (Loss) on Hedged Item
	Recognized in Income			Recognized in Income
Year ended December 31, 2018 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(5)	Interest expense	$	5
Total		$	(5)		$	5

Year ended December 31, 2017 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(9)	Interest expense	$	9
Total		$	(9)		$	9

The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:

					Cumulative Amount of Fair Value Hedging
	Carrying Value of the				Adjustment Included in the Carrying Value
	Hedged Liabilities (in millions)				of the Hedged Liabilities (in millions)
Location on the Consolidated Balance Sheet	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Short-term borrowings and current portion of long-term debt	$	499	$	596	$	—	$	(4)
Long-term debt		775		1,276		22		18
Total	$	1,274	$	1,872	$	22	$	14

Net Investment Hedges:

The Company may use non-derivative (foreign currency denominated debt) and derivative (foreign exchange forward contracts) instruments to hedge portions of the Company’s investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within other comprehensive income. The remainder of the change in value of such instruments is recorded in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. To the extent foreign currency denominated debt is not designated in or is dedesignated from a net investment hedge relationship, changes in value of that portion of foreign currency denominated debt due to exchange rate changes are recorded in earnings through their maturity date.

3M’s use of foreign exchange forward contracts designated in hedges of the Company’s net investment in foreign subsidiaries can vary by time period depending on when foreign currency denominated debt balances designated in such relationships are dedesignated, matured, or are newly issued and designated. Additionally, variation can occur in connection with the extent of the Company’s desired foreign exchange risk coverage.

During the first quarter of 2018, the Company dedesignated 300 million Euros of foreign currency denominated debt from a former net investment hedge relationship.

At December 31, 2019, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 200 million Euros, along with a principal amount of long-term debt instruments designated in net investment hedges totaling 4.1 billion Euros. The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from 2020 to 2031.

The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative and nonderivative instruments designated as net investment hedges are as follows. There were no reclassifications of the effective portion of net investment hedges out of accumulated other comprehensive income into income for the periods presented in the table below.

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation		Amount of Gain (Loss) Excluded
	within Other		from Effectiveness Testing
	Comprehensive Income		Recognized in Income
Year ended December 31, 2019 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	108	Cost of sales	$	—
Foreign currency forward contracts		32	Cost of sales		20
Total	$	140		$	20

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation
	within Other		Ineffective Portion of Gain (Loss) on
	Comprehensive Income		Instrument and Amount Excluded
	on Effective Portion of		from Effectiveness Testing
	Instrument		Recognized in Income
Year ended December 31, 2018 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	222	Cost of sales	$	(2)
Foreign currency forward contracts		18	Cost of sales		4
Total	$	240		$	2

Year ended December 31, 2017 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(667)	N/A	$	—
Foreign currency forward contracts		(58)	Cost of sales		7
Total	$	(725)		$	7

Derivatives Not Designated as Hedging Instruments:

Derivatives not designated as hedging instruments include dedesignated foreign currency forward and option contracts that formerly were designated in cash flow hedging relationships (as referenced in the Cash Flow Hedges section above). In addition, 3M enters into foreign currency forward contracts to offset, in part, the impacts of certain intercompany activities (primarily associated with intercompany licensing arrangements) and enters into commodity price swaps to offset, in part, fluctuations in costs associated with the use of certain commodities and precious metals. These derivative instruments are not designated in hedging relationships; therefore, fair value gains and losses on these contracts are recorded in earnings. The Company does not hold or issue derivative financial instruments for trading purposes.

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows:

	Gain (Loss) on Derivative Recognized in Income
		Year ended December 31,
			2019		2018		2017
(Millions)	Location		Amount		Amount		Amount
Foreign currency forward/option contracts	Cost of sales	$	2	$	13	$	11
Foreign currency forward contracts	Interest expense		(13)		(109)		(141)
Total		$	(11)	$	(96)	$	(130)

Statement of Income Location and Impact of Cash Flow and Fair Value Derivative Instruments

The location in the consolidated statement of income and pre-tax amounts recognized in income related to derivative instruments designated in a cash flow or fair value hedging relationship are as follows:

	Location and Amount of Gain (Loss) Recognized in Income
	Year ended December 31, 2019
(Millions)		Cost of Goods Sold		Other expense (income), net
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded	$	17,136	$	462
The effects of fair value and cash flow hedging:
Gain or (loss) on cash flow hedging relationships:
Foreign currency forward/option contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	$	74	$	—
Interest rate swap contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income		—		(4)
Gain or (loss) on fair value hedging relationships:
Interest rate swap contracts:
Hedged items	$	—	$	(8)
Derivatives designated as hedging instruments		—		8

Location and Fair Value Amount of Derivative Instruments:

The following tables summarize the fair value of 3M’s derivative instruments, excluding nonderivative instruments used as hedging instruments, and their location in the consolidated balance sheet. Notional amounts below are presented at period end foreign exchange rates, except for certain interest rate swaps, which are presented using the inception date’s foreign exchange rate. Additional information with respect to the fair value of derivative instruments is included in Note 15.

	Gross		Assets			Liabilities
	Notional			Fair			Fair
December 31, 2019 (Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	1,995	Other current assets	$	64	Other current liabilities	$	9
Foreign currency forward/option contracts		1,041	Other assets		50	Other liabilities		3
Interest rate swap contracts		500	Other current assets		—	Other current liabilities		—
Interest rate swap contracts		603	Other assets		17	Other liabilities		—
Total derivatives designated as hedging instruments				$	131		$	12
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,684	Other current assets	$	11	Other current liabilities	$	8
Total derivatives not designated as hedging instruments				$	11		$	8
Total derivative instruments				$	142		$	20

	Gross		Assets			Liabilities
	Notional			Fair			Fair
December 31, 2018 (Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,277	Other current assets	$	74	Other current liabilities	$	12
Foreign currency forward/option contracts		1,099	Other assets		39	Other liabilities		4
Interest rate swap contracts		1,000	Other current assets		—	Other current liabilities		14
Interest rate swap contracts		1,403	Other assets		19	Other liabilities		17
Total derivatives designated as hedging instruments				$	132		$	47
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,484	Other current assets	$	14	Other current liabilities	$	6
Total derivatives not designated as hedging instruments				$	14		$	6
Total derivative instruments				$	146		$	53

Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments:

The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. As of December 31, 2019, 3M has International Swaps and Derivatives Association (ISDA) agreements with 17 applicable banks and financial institutions which contain netting provisions. In addition to a master agreement with 3M supported by a primary counterparty’s parent guarantee,

3M also has associated credit support agreements in place with 16 of its primary derivative counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral (when the market value of transactions covered by these agreements exceeds specified thresholds or if a counterparty’s credit rating has been downgraded to a predetermined rating). The Company does not anticipate nonperformance by any of these counterparties.

3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. However, the following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period based on the 3M entity that is a party to the transactions. Derivatives not subject to master netting agreements are not eligible for net presentation. As of the applicable dates presented below, no cash collateral had been received or pledged related to these derivative instruments.

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Assets		Gross Amount of
	Presented in the		Eligible Offsetting		Cash
	Consolidated		Recognized		Collateral		Net Amount of
December 31, 2019 (Millions)	Balance Sheet		Derivative Liabilities		Received		Derivative Assets
Derivatives subject to master netting agreements	$	142	$	14	$	—	$	128
Derivatives not subject to master netting agreements		—						—
Total	$	142					$	128

December 31, 2018 (Millions)
Derivatives subject to master netting agreements	$	146	$	38	$	—	$	108
Derivatives not subject to master netting agreements		—						—
Total	$	146					$	108

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Liabilities		Gross Amount of
	Presented in the		Eligible Offsetting		Cash		Net Amount of
	Consolidated		Recognized		Collateral		Derivative
December 31, 2019 (Millions)	Balance Sheet		Derivative Assets		Pledged		Liabilities
Derivatives subject to master netting agreements	$	20	$	14	$	—	$	6
Derivatives not subject to master netting agreements		—						—
Total	$	20					$	6

December 31, 2018 (Millions)
Derivatives subject to master netting agreements	$	53	$	38	$	—	$	15
Derivatives not subject to master netting agreements		—						—
Total	$	53					$	15

Foreign Currency Effects

3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income by approximately $201 million in 2019 and decreased pre-tax income by approximately $92 million in 2018. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks.

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Commitments and Contingencies - Environmental (Details) $ in Millions	1 Months Ended				3 Months Ended			12 Months Ended
	Dec. 31, 2019 USD ($) lawsuit	Apr. 30, 2019 USD ($)	Jul. 31, 2018 USD ($)	Feb. 28, 2018 USD ($)	Dec. 31, 2019 USD ($) lawsuit	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) lawsuit	Dec. 31, 2019 USD ($) person lawsuit	Dec. 31, 2019 USD ($) lawsuit item	Dec. 31, 2019 USD ($) lawsuit facility	Dec. 31, 2019 USD ($) lawsuit individual	Dec. 31, 2019 USD ($) lawsuit	Dec. 31, 2019 USD ($) lawsuit defendant
Environmental Matters - Remediation
Loss contingencies
Accrued loss contingency reserve | $	$ 19				$ 19			$ 19	$ 19	$ 19	$ 19	$ 19	$ 19	$ 19
Number of years remediation payments expected to be paid for applicable sites								20 years
Environmental Matters - Other
Loss contingencies
Insurance receivables | $	33				33			$ 33	33	$ 33	$ 33	$ 33	$ 33	$ 33
Increase (decrease) in insurance recovery receivable | $						$ 25
Environmental Matters - Regulatory Activities
Loss contingencies
Number of years after phase-out decision in May 2000 that the Company stopped manufacturing and using vast majority of perfluorooctanyl compounds								2 years
Amount of PFOA and PFOS found in drinking water, either individually or combined, that are allowed per the EPA's announced lifetime health advisory levels in parts per trillion										70
Amount of PFOA in drinking water allowed per provisional health advisories in parts per trillion (superseded)										400
Amount of PFOS in drinking water allowed per provisional health advisories in parts per trillion (superseded)										200
Number of PFCs the EPA has required to have public water system suppliers monitor										6
Number compounds EPA asked for public comment on draft toxicity assessments for PFAS compounds, including PFBS										2
Number of public water supplies the EPA reported results										4,920
Number of water supplies that reported above advisory level with PFOA										13
Number of water supplies that reported above advisory level with PFOS										46
Number of water supplies that reported above advisory level with both PFOA and PFOS under technical advisory issued by EPA in September 2016										65
Environmental Matters - Regulatory Activities | Minimum
Loss contingencies
Number of water supply samples used to test for PFOA and PFOS under the EPA lifetime health advisory program										1
Environmental Matters - Regulatory Activities | Decatur, Alabama
Loss contingencies
Number of years covered by permit for sludge containing PFCs								20 years
Environmental Matters - Regulatory Activities | Minnesota Department of Health
Loss contingencies
Amount of PFOA in drinking water allowed per Minnesota Department of Health in parts per trillion										35
Amount of PFOS in drinking water allowed per Minnesota Department of Health in parts per trillion										27
Additional amounts of PFOS in drinking water allowed per Minnesota Department of Health in parts per trillion										15
Amount of PFHxS in drinking water allowed per Minnesota Department of Health in parts per trillion										47
Amount of PFBS in drinking water allowed per Minnesota Department of Health in parts per billion										2
Environmental Matters - Litigation | U.S. District Court for the Northern District of Alabama
Loss contingencies
Number of plaintiffs										59
Number of unnamed defendant | defendant														3
Number of additional defendants										24
Environmental Matters - Litigation | Alabama
Loss contingencies
Litigation settlement awarded | $		$ 35
Number of local water works for whom the water authority supplies water										5
Environmental Matters - Litigation | Alabama | Minimum
Loss contingencies
Number of plaintiffs | individual												200
Environmental Matters - Litigation | Decatur, Alabama
Loss contingencies
Number of closed municipal landfills										3
Number of putative class action and other lawsuits | lawsuit													2
Environmental Matters - Litigation | Minnesota
Loss contingencies
Litigation settlement awarded | $							$ 897
Settlement amount paid | $				$ 850
Environmental Matters - Litigation | Lake Elmo, Minnesota | Maximum
Loss contingencies
Settlement amount paid | $		$ 5
Environmental Matters - Litigation | New Jersey
Loss contingencies
Number of lawsuits filed | lawsuit													2
Number of additional defendants | defendant														6
Environmental Matters - Litigation | Salem County, New Jersey
Loss contingencies
Number of facilities related to the manufacture and disposal of PFAS | facility											2
Environmental Matters - Litigation | State court in New York
Loss contingencies
Number of lawsuits filed | lawsuit													4
Environmental Matters - Litigation | New Hampshire
Loss contingencies
Number of lawsuits filed | lawsuit													2
Number of additional defendants | defendant														7
Environmental Matters - Litigation | Vermont
Loss contingencies
Number of lawsuits filed | lawsuit													2
Number of additional defendants | defendant														10
Environmental Matters - Other Environmental Litigation
Loss contingencies
Accrued loss contingency reserve | $	$ 445				445			$ 445	$ 445	$ 445	$ 445	$ 445	$ 445	$ 445
Increase (decrease) accrued loss contingency reserve | $					$ 214	$ 235
Number of landfills tested by the entity for environmental matters and litigation related to historical PFAS manufacturing operations										4
Environmental Matters - Other Environmental Litigation | U.S. District Court of New York State
Loss contingencies
Number of lawsuits filed | lawsuit													47
Number of class action lawsuits | lawsuit													1
Environmental Matters - Other Environmental Litigation | New Jersey
Loss contingencies
Approximate number of miles of a river seeking to be cleaned										8
The value the award the plaintiff seeks | $			$ 165
Number of chemicals of concern in the sediment										8
Number of commercial drum conditioning facilities | facility											2
Environmental Matters - Other Environmental Litigation | New Jersey | Minimum
Loss contingencies
Number of unnamed defendant | defendant														120
Environmental Matters - Aqueous Film Forming Foam Litigation
Loss contingencies
Number of lawsuits filed | lawsuit													8
Number of putative class action and other lawsuits | lawsuit													150
Environmental Matters - Aqueous Film Forming Foam Litigation | U.S. Judicial Panel on Multidistrict Litigation (MDL)
Loss contingencies
Number of lawsuits filed | lawsuit													142
Number of putative class action and other lawsuits | lawsuit													147
Environmental Matters - Aqueous Film Forming Foam Litigation | Various state courts
Loss contingencies
Number of lawsuits pending | lawsuit	5				5			5	5	5	5	5	5	5
Environmental Matters - Aqueous Film Forming Foam Litigation | Federal court
Loss contingencies
Number of lawsuits pending | lawsuit	2				2			2	2	2	2	2	2	2
Environmental Matters - Other PFAS-related Environmental Litigation | U.S. District Court of New York State
Loss contingencies
Number of additional new claims filed | lawsuit													4
Environmental Matters - Other PFAS-related Environmental Litigation | U.S. District Court of Eastern District of New York
Loss contingencies
Number of lawsuits pending | lawsuit	8				8			8	8	8	8	8	8	8
Environmental Matters - Other PFAS-related Environmental Litigation | Alabama
Loss contingencies
Number of perfluorinated materials (FBSA and FBSEE) the company cannot release into "the waters of the United States."										2
Environmental Matters - Other PFAS-related Environmental Litigation | Georgia
Loss contingencies
Number of putative class action and other lawsuits | lawsuit													1
Environmental Matters - Other PFAS-related Environmental Litigation | Alabama and Georgia
Loss contingencies
Number of putative class action and other lawsuits | lawsuit													4
Environmental Matters - Other PFAS-related Environmental Litigation | Cities located downstream along the Coosa River
Loss contingencies
Number of putative class action and other lawsuits | lawsuit													3
Environmental Matters - Other PFAS-related Environmental Litigation | Maine
Loss contingencies
Number of unnamed defendant | individual												1
Environmental Matters - Other PFAS-related Environmental Litigation | Michigan
Loss contingencies
Number of plaintiffs									1			257
Settlement amount paid | $	$ 70
Number of federal bellwether cases with trial-ready dates set | lawsuit													4
Number of federal bellwether cases the court issued the first round of dispositive motion rulings | lawsuit													2
Number of class action lawsuits | lawsuit													1
Environmental Matters - Other PFAS-related Environmental Litigation | Delaware.
Loss contingencies
Number of putative class action and other lawsuits | lawsuit													1

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Stock-Based Compensation

Stock-Based Compensation

NOTE 18. Stock-Based Compensation

The 3M 2016 Long-Term Incentive Plan provides for the issuance or delivery of up to 123,965,000 shares of 3M common stock pursuant to awards granted under the plan. Awards may be issued in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards, and performance units and performance shares. As of December 31, 2019, the remaining shares available for grant under the LTIP Program are 22 million and there were approximately 6,700 participants with outstanding options, restricted stock, or restricted stock units.

The Company’s annual stock option and restricted stock unit grant is made in February to provide a strong and immediate link between the performance of individuals during the preceding year and the size of their annual stock compensation grants. The grant to eligible employees uses the closing stock price on the grant date. Accounting rules require recognition of expense under a non-substantive vesting period approach, requiring compensation expense recognition when an employee is eligible to retire. Employees are considered eligible to retire at age 55 and after having completed ten years of service. This retiree-eligible population represents 37 percent of the annual grant’s stock-based compensation expense; therefore, higher stock-based compensation expense is recognized in the first quarter.

In addition to the annual grants, the Company makes other minor grants of stock options, restricted stock units and other stock-based grants. The Company issues cash settled restricted stock units and stock appreciation rights in certain countries. These grants do not result in the issuance of common stock and are considered immaterial by the Company.

Beginning in 2016, as a result of the Company’s application of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, certain excess tax benefits at the time of exercise (for an option) or upon vesting (for restricted stock units) are recognized as income tax benefits in the statement of income. These amounts totaled $89 million, $100 million, and $228 million for 2019, 2018 and 2017, respectively, and are reflected in the “income tax benefits” line within the stock-based compensation table below.

Amounts recognized in the financial statements with respect to stock-based compensation programs, which include stock options, restricted stock, restricted stock units, performance shares and the General Employees’ Stock Purchase Plan (GESPP), are provided in the following table. Capitalized stock-based compensation amounts were not material.

Stock-Based Compensation Expense

	Years ended December 31
(Millions)	2019		2018		2017
Cost of sales	$	47	$	48	$	49
Selling, general and administrative expenses		185		207		229
Research, development and related expenses		46		47		46
Stock-based compensation expenses	$	278	$	302	$	324
Income tax benefits		(141)		(154)		(327)
Stock-based compensation expenses (benefits), net of tax	$	137	$	148	$	(3)

Stock Option Program

The following table summarizes stock option activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
	Number of	Average		Number of	Average		Number of	Average
(Options in thousands)	Options	Exercise Price		Options	Exercise Price		Options	Exercise Price
Under option —
January 1	34,569	$	138.98	34,965	$	125.73	36,196	$	112.07
Granted:
Annual	3,434		200.80	3,211		233.19	5,410		175.93
Exercised	(4,193)		89.89	(3,482)		91.01	(6,474)		90.37
Forfeited	(135)		201.27	(125)		188.00	(167)		162.36
December 31	33,675	$	151.15	34,569	$	138.98	34,965	$	125.73
Options exercisable
December 31	26,487	$	136.75	26,117	$	121.98	24,281	$	108.50

Stock options generally vest over a period from one to three years with the expiration date at 10 years from date of grant. As of December 31, 2019, there was $62 million of compensation expense that has yet to be recognized related to non-vested stock option based awards. This expense is expected to be recognized over the remaining weighted-average vesting period of 20 months. For options outstanding at December 31, 2019, the weighted-average remaining contractual life was 64 months and the aggregate intrinsic value was $1.1 billion. For options exercisable at December 31, 2019, the weighted-average remaining contractual life was 54 months and the aggregate intrinsic value was $1.1 billion.

The total intrinsic values of stock options exercised during 2019, 2018 and 2017 was $433 million, $469 million and $703 million, respectively. Cash received from options exercised during 2019, 2018 and 2017 was $375 million, $316 million and $585 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the exercise of employee stock options for 2019, 2018 and 2017 was $91 million, $99 million and $238 million, respectively.

For the primary annual stock option grant, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model and the assumptions that follow.

Stock Option Assumptions

	Annual
	2019			2018			2017
Exercise price	$	201.12		$	233.63		$	175.76
Risk-free interest rate		2.6	%		2.7	%		2.1	%
Dividend yield		2.5	%		2.4	%		2.5	%
Expected volatility		20.4	%		21.0	%		17.3	%
Expected life (months)		79			78			78
Black-Scholes fair value	$	34.19		$	41.59		$	23.51

Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2019 annual grant date, the Company estimated the expected volatility based upon the following three volatilities of 3M stock: the median of the term of the expected life rolling volatility; the median of the most recent term of the expected life volatility; and the implied volatility on the grant date. The expected term assumption is based on the weighted average of historical grants.

Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
		Average			Average			Average
	Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
(Shares in thousands)	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Nonvested balance —
As of January 1	1,789	$	180.02	1,994	$	162.60	2,185	$	145.64
Granted
Annual	564		200.41	467		233.61	604		176.10
Other	15		180.08	8		207.76	21		233.77
Vested	(732)		149.33	(640)		164.83	(769)		127.21
Forfeited	(63)		192.52	(40)		186.48	(47)		158.25
As of December 31	1,573	$	201.11	1,789	$	180.02	1,994	$	162.60

As of December 31, 2019, there was $72 million of compensation expense that has yet to be recognized related to non-vested restricted stock and restricted stock units. This expense is expected to be recognized over the remaining weighted-average vesting period of 22 months. The total fair value of restricted stock and restricted stock units that vested during the years ended December 31, 2019, 2018 and 2017 was $144 million, $155 million and $136 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the vesting of restricted stock and restricted stock units for 2019, 2018 and 2017 was $28 million, $29 million and $45 million, respectively.

Restricted stock units granted generally vest three years following the grant date assuming continued employment. Dividend equivalents equal to the dividends payable on the same number of shares of 3M common stock accrue on these restricted stock units during the vesting period, although no dividend equivalents are paid on any of these restricted stock units that are forfeited prior to the vesting date. Dividends are paid out in cash at the vest date on restricted stock units. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average restricted stock unit shares outstanding are included in the computation of diluted earnings per share.

Performance Shares

Instead of restricted stock units, the Company makes annual grants of performance shares to members of its executive management. The 2019 performance criteria for these performance shares (organic volume growth, return on invested capital, free cash flow conversion, and earnings per share growth) were selected because the Company believes that they are important drivers of long-term stockholder value. The number of shares of 3M common stock that could actually be delivered at the end of the three-year performance period may be anywhere from 0% to 200% of each performance share granted, depending on the performance of the Company during such performance period. When granted, these performance shares are awarded at 100% of the estimated number of shares at the end of the three-year performance period and are reflected under “Granted” in the table below. Non-substantive vesting requires that expense for the performance shares be recognized over one or three years depending on when each individual became a 3M executive. The performance share grants accrue dividends, therefore the grant date fair value is equal to the closing stock price on the date of grant. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average performance shares whose performance period is complete are included in computation of diluted earnings per share.

The following table summarizes performance share activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
		Average			Average			Average
	Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
(Shares in thousands)	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Undistributed balance —
As of January 1	562	$	188.96	686	$	171.90	656	$	142.98
Granted	166		207.49	166		229.13	201		191.28
Distributed	(210)		162.16	(206)		159.82	(314)		124.88
Performance change	(48)		204.73	(56)		198.39	155		173.91
Forfeited	(26)		209.96	(28)		204.09	(12)		171.36
As of December 31	444	$	205.58	562	$	188.96	686	$	171.90

As of December 31, 2019, there was $16 million of compensation expense that has yet to be recognized related to performance shares. This expense is expected to be recognized over the remaining weighted-average earnings period of 20 months. The total fair value of performance shares that were distributed were $45 million, $48 million, and $55 million for 2019, 2018 and 2017, respectively. The Company’s actual tax benefits realized for the tax deductions related to the distribution of performance shares were $9 million, $11 million, and $15 million per year for 2019, 2018, and 2017, respectively.

General Employees’ Stock Purchase Plan (GESPP):

As of December 31, 2019, shareholders have approved 60 million shares for issuance under the Company’s GESPP. Substantially all employees are eligible to participate in the plan. Participants are granted options at 85% of market value at the date of grant. There are no GESPP shares under option at the beginning or end of each year because options are granted on the first business day and exercised on the last business day of the same month.

The weighted-average fair value per option granted during 2019, 2018 and 2017 was $27.14, $31.91 and $30.07, respectively. The fair value of GESPP options was based on the 15% purchase price discount. The Company recognized compensation expense for GESSP options of $30 million in 2019, $30 million in 2018, and $26 million in 2017.

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Pension and Postretirement Benefit Plans - Pension Asset Fair Value Level 3 (Details) - Qualified and Non-qualified Pension Benefits - International - Funded - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Benefit Plan Information
Foreign currency exchange	$ (80)	$ 346
Level 3
Benefit Plan Information
Defined benefit plan increases related to net purchases and unrealized gains losses	$ 17
Defined benefit plan decreases related to net purchases and unrealized gains losses		$ 11

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Pension and Postretirement Benefit Plans - Special termination benefits (Details) $ in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	May 31, 2019 item	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Benefit Plan Information
Defined benefit pension and postretirement plans adjustment			$ 560	$ (444)	$ (52)
Qualified and Non-qualified Pension Benefits | United States | Funded
Benefit Plan Information
Special termination benefits - number of additional years of pension service | item	1
Special termination benefits - number of additional years of age for certain benefit calculations | item	1
Special termination benefits charge		$ 35
Postretirement Benefits | Funded
Benefit Plan Information
Defined benefit pension and postretirement plans adjustment		$ 150

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Long-Term Debt and Short-Term Borrowings - Post-Swap Borrowing, Long-Term Debt, Including Current Portion (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Long-Term Debt
Total long-term debt	$ 19,359	$ 14,156
Fixed-rate debt
Long-Term Debt
Interest rate - effective	3.01%	2.67%
Total long-term debt	$ 17,061	$ 11,249
Floating-rate debt
Long-Term Debt
Interest rate - effective	1.06%	1.44%
Total long-term debt	$ 2,298	$ 2,907

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Revenue (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018
Revenue, Initial Application Period Cumulative Effect Transition
Retained earnings	$ 42,135				$ 40,636				$ 42,135	$ 40,636
Contract Balance
Software license contracts term									1 year	1 year
Net Sales	$ 8,111	$ 7,991	$ 8,171	$ 7,863	$ 7,945	$ 8,152	$ 8,390	$ 8,278	$ 32,136	$ 32,765
Difference between Revenue Guidance in Effect before and after Topic 606 | Maximum
Revenue, Initial Application Period Cumulative Effect Transition
Retained earnings											$ 2
ASU 2014-09 Revenue from Contracts with Customers | Difference between Revenue Guidance in Effect before and after Topic 606
Contract Balance
Deferred income recognized as revenue									$ 600	$ 500

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Goodwill and Intangible Assets - Goodwill balance by business segment (Details)	3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2019 USD ($)	Mar. 31, 2019 USD ($) segment	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)
Goodwill Information
Number of business combinations completed						0
Purchased goodwill from acquisitions	$ 3,469,000,000			$ 3,469,000,000	$ 3,469,000,000
Goodwill acquired during the period which is deductible for tax purposes	0			0	0
Increase (decrease) in goodwill related to preliminary allocation of purchase price for prior acquisitions						$ 7,000,000
Goodwill
Balance at the beginning of the period		$ 10,051,000,000	$ 10,051,000,000		10,051,000,000	10,513,000,000
Acquisition activity					3,469,000,000	7,000,000
Divestiture activity					(49,000,000)	(272,000,000)
Translation and other					(27,000,000)	(197,000,000)
Balance at the end of the period	13,444,000,000			$ 13,444,000,000	13,444,000,000	10,051,000,000	$ 10,513,000,000
Number of business segments | segment		5		4
Amount of Goodwill impairment	0		0		0	0	0
Safety and Industrial
Goodwill
Balance at the beginning of the period		$ 4,716,000,000	4,716,000,000		4,716,000,000	5,077,000,000
Acquisition activity						7,000,000
Divestiture activity					(49,000,000)	(268,000,000)
Translation and other					(46,000,000)	(100,000,000)
Balance at the end of the period	4,621,000,000			$ 4,621,000,000	4,621,000,000	4,716,000,000	5,077,000,000
Transportation and Electronics
Goodwill
Balance at the beginning of the period		1,857,000,000	1,857,000,000		1,857,000,000	1,886,000,000
Translation and other					(27,000,000)	(29,000,000)
Balance at the end of the period	1,830,000,000			1,830,000,000	1,830,000,000	1,857,000,000	1,886,000,000
Health Care
Goodwill
Balance at the beginning of the period		3,248,000,000	3,248,000,000		3,248,000,000	3,317,000,000
Acquisition activity					3,469,000,000
Divestiture activity						(4,000,000)
Translation and other					22,000,000	(65,000,000)
Balance at the end of the period	6,739,000,000			6,739,000,000	6,739,000,000	3,248,000,000	3,317,000,000
Consumer
Goodwill
Balance at the beginning of the period		$ 230,000,000	$ 230,000,000		230,000,000	233,000,000
Translation and other					24,000,000	(3,000,000)
Balance at the end of the period	$ 254,000,000			$ 254,000,000	$ 254,000,000	$ 230,000,000	$ 233,000,000

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Long-Term Debt and Short-Term Borrowings - Long-Term Debt Issuances (Details) - USD ($) $ in Millions	1 Months Ended					12 Months Ended
	Aug. 31, 2019	Feb. 28, 2019	Sep. 30, 2018	Oct. 31, 2017	Aug. 31, 2015	Dec. 31, 2019	Dec. 31, 2018	Oct. 31, 2019	Dec. 31, 2017
Debt instrument
Long-term debt						$ 19,359	$ 14,156
Aggregate fixed rate medium-term notes
Debt instrument
Principal amount		$ 2,250	$ 2,250	$ 2,000
Fixed rate registered notes which are due in 2023, 2025, 2029 and 2049
Debt instrument
Principal amount	$ 3,250
Fixed rate registered note due 2023
Debt instrument
Principal amount	$ 500					$ 500
Term of debt instrument	3 years 6 months
Interest rate - effective	1.75%					1.86%
Long-term debt						$ 497
Fixed rate registered note due 2025
Debt instrument
Principal amount	$ 750					$ 750
Term of debt instrument	5 years 6 months
Interest rate - effective	2.00%					2.12%
Long-term debt						$ 743
Fixed rate registered note due 2029
Debt instrument
Principal amount	$ 1,000					$ 1,000
Term of debt instrument	10 years
Interest rate - effective	2.375%					2.50%
Long-term debt						$ 984
Fixed rate registered note due 2049
Debt instrument
Principal amount	$ 1,000					$ 1,000
Term of debt instrument	30 years
Interest rate - effective	3.25%					3.37%
Long-term debt						$ 968
Floating rate medium term note due 2019
Debt instrument
Long-term debt							596
Fixed rate medium term note due 2021
Debt instrument
Principal amount			$ 400
Term of debt instrument			3 years
Interest rate - effective			3.00%
Variable rate						three-month LIBOR
Fixed rate medium term note due 2022
Debt instrument
Principal amount		$ 450				$ 600
Term of debt instrument		3 years
Interest rate - effective		2.75%				2.17%
Long-term debt						$ 597	596
Fixed rate medium term notes due 2023
Debt instrument
Principal amount				$ 650		$ 650
Term of debt instrument				5 years 6 months
Interest rate - effective				2.25%		2.26%
Long-term debt						$ 648	648
Fixed rate medium term notes due 2024
Debt instrument
Principal amount			$ 300			$ 300
Term of debt instrument			5 years 6 months
Interest rate - effective			3.25%			3.30%
Long-term debt						$ 299	298
Fixed rate medium term notes due 2024
Debt instrument
Principal amount		$ 500				$ 500
Term of debt instrument		5 years
Interest rate - effective		3.25%				2.98%
Long-term debt						$ 503
Fixed rate medium term note due 2025
Debt instrument
Principal amount						$ 550
Interest rate - effective						3.04%
Long-term debt						$ 547	547
Fixed rate medium term note due 2047
Debt instrument
Principal amount				$ 500		$ 500
Term of debt instrument				30 years
Interest rate - effective				3.625%		3.68%
Long-term debt						$ 492	491
Floating rate medium term notes due 2024
Debt instrument
Principal amount			$ 300			$ 300
Term of debt instrument			5 years 6 months
Interest rate - effective						2.21%
Long-term debt						$ 299	$ 299
Variable rate							three-month LIBOR
Fixed rate medium term notes due 2027
Debt instrument
Principal amount				$ 850		$ 850
Term of debt instrument				10 years
Interest rate - effective				2.875%		2.95%
Long-term debt						$ 842	$ 841
Fixed rate medium term notes due 2028
Debt instrument
Principal amount			$ 600			$ 600
Term of debt instrument			10 years
Interest rate - effective			3.625%			3.62%
Long-term debt						$ 597	597
Fixed rate medium term notes due 2029
Debt instrument
Principal amount		$ 800				$ 800
Term of debt instrument		10 years
Interest rate - effective		3.375%				3.38%
Long-term debt						$ 796
Fixed rate medium term note due 2048
Debt instrument
Principal amount			$ 650			$ 650
Term of debt instrument			30 years
Interest rate - effective			4.00%			4.07%
Long-term debt						$ 637	$ 637
Fixed rate medium term note due 2048
Debt instrument
Principal amount		$ 500				$ 500
Term of debt instrument		29 years 6 months
Interest rate - effective		4.00%				3.78%
Long-term debt						$ 506
Interest rate swap contracts | Fixed rate medium term note due 2021
Debt instrument
Derivative notional amount			$ 200
Variable rate							three-month LIBOR
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2020
Debt instrument
Term of debt instrument					5 years
Derivative notional amount					$ 300				$ 200
Variable rate						three-month LIBOR
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2021
Debt instrument
Derivative notional amount			$ 200
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2018
Debt instrument
Term of debt instrument					3 years
Derivative notional amount					$ 450
Acelity Inc. and its KCI subsidiaries | Third lien senior secured notes (Third Lien Notes) maturing 2021
Debt instrument
Principal amount								$ 445
Interest rate - effective								12.50%

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Pension and Postretirement Benefit Plans - Components of net periodic benefit cost and other information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net periodic benefit cost (benefit)
Net periodic benefit cost (benefit)	$ (68)	$ (73)	$ (128)
Funded | Postretirement Benefits
Net periodic benefit cost (benefit)
Service cost	43	52	52
Interest cost	82	79	80
Expected return on plan assets	(81)	(84)	(86)
Amortization of prior service benefit	(33)	(40)	(53)
Amortization of net actuarial loss	34	61	56
Settlements, curtailments, special terminations and other	5		(4)
Total non-operating expense (benefit)	7	16	(7)
Net periodic benefit cost (benefit)	50	68	45
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Prior service cost (benefit)	(171)		(1)
Amortization of prior service benefit	33	40	53
Net actuarial (gain) loss	119	(127)	69
Amortization of net actuarial loss	(34)	(61)	(56)
Foreign currency	(1)	(2)
Settlements, curtailments, special termination benefits and other	(5)
Total recognized in other comprehensive income (loss)	(59)	(150)	65
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss	(9)	(82)	110
Funded | United States | Qualified and Non-qualified Pension Benefits
Net periodic benefit cost (benefit)
Service cost	251	288	268
Interest cost	620	563	565
Expected return on plan assets	(1,040)	(1,087)	(1,035)
Amortization of prior service benefit	(24)	(23)	(23)
Amortization of net actuarial loss	366	503	388
Settlements, curtailments, special terminations and other	70		2
Total non-operating expense (benefit)	(8)	(44)	(103)
Net periodic benefit cost (benefit)	243	244	165
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Amortization of prior service benefit	24	23	23
Net actuarial (gain) loss	926	(44)	607
Amortization of net actuarial loss	(366)	(503)	(388)
Settlements, curtailments, special termination benefits and other	(35)		(2)
Total recognized in other comprehensive income (loss)	549	(524)	240
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss	792	(280)	405
Funded | International | Qualified and Non-qualified Pension Benefits
Net periodic benefit cost (benefit)
Service cost	131	143	142
Interest cost	156	157	157
Expected return on plan assets	(299)	(307)	(292)
Amortization of prior service benefit	(12)	(13)	(13)
Amortization of net actuarial loss	78	114	126
Settlements, curtailments, special terminations and other	10	4	4
Total non-operating expense (benefit)	(67)	(45)	(18)
Net periodic benefit cost (benefit)	64	98	124
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Prior service cost (benefit)	3	7	6
Amortization of prior service benefit	12	13	13
Net actuarial (gain) loss	344	194	(244)
Amortization of net actuarial loss	(78)	(114)	(126)
Foreign currency	7	(83)	167
Settlements, curtailments, special termination benefits and other	(8)	(4)	(4)
Total recognized in other comprehensive income (loss)	280	13	(188)
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss	$ 344	$ 111	$ (64)

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Restructuring Actions - Roll Forward (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
2019 Restructuring Actions
Restructuring Reserve Roll Forward
Expenses incurred	$ 282
Non-cash changes	(76)
Cash payments	(52)
Adjustments	(14)
Restructuring actions balances, Ending Balance	140
2018 Restructuring Actions
Restructuring Reserve Roll Forward
Restructuring actions balances, Beginning Balance	84
Expenses incurred		$ 137
Non-cash changes		(12)
Cash payments	(76)	(24)
Adjustments	(5)	(17)
Restructuring actions balances, Ending Balance	3	84
Employee-Related | 2019 Restructuring Actions
Restructuring Reserve Roll Forward
Expenses incurred	242
Non-cash changes	(36)
Cash payments	(52)
Adjustments	(14)
Restructuring actions balances, Ending Balance	140
Employee-Related | 2018 Restructuring Actions
Restructuring Reserve Roll Forward
Restructuring actions balances, Beginning Balance	84
Expenses incurred		125
Cash payments	(76)	(24)
Adjustments	(5)	(17)
Restructuring actions balances, Ending Balance	3	84
Employee-Related | 2017 Restructuring Actions
Restructuring Reserve Roll Forward
Restructuring actions balances, Beginning Balance	40	88
Expenses incurred			$ 99
Cash payments	(21)	(20)	(8)
Adjustments	1	(28)	(3)
Restructuring actions balances, Ending Balance	20	40	$ 88
Asset-Related | 2019 Restructuring Actions
Restructuring Reserve Roll Forward
Expenses incurred	40
Non-cash changes	$ (40)
Asset-Related | 2018 Restructuring Actions
Restructuring Reserve Roll Forward
Expenses incurred		12
Non-cash changes		$ (12)

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Quarterly Data (Unaudited) - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended					12 Months Ended
	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Quarterly Data (Unaudited)
Net income adjustment due to significant litigation-related charges related to historical PFAS (certain perfluorinated compounds) manufacturing operations and coal mine dust respirator mask lawsuits						$ 590
Impact on diluted earnings per share due to significant litigation-related charges related to historical PFAS (certain perfluorinated compounds) manufacturing operations and coal mine dust respirator mask lawsuits						$ 1.01
Initial net income adjustment due to significant litigation-related charges related to historical PFAS (certain perfluorinated compounds) manufacturing operations and coal mine dust respirator mask lawsuits			$ 424
Initial impact on diluted earnings per share due to significant litigation-related charges related to historical PFAS (certain perfluorinated compounds) manufacturing operations and coal mine dust respirator mask lawsuits			$ 0.72
Subsequent net income adjustment due to significant litigation-related charges related to historical PFAS (certain perfluorinated compounds) manufacturing operations and coal mine dust respirator mask lawsuits	$ 166
Subsequent impact on diluted earnings per share due to significant litigation-related charges related to historical PFAS (certain perfluorinated compounds) manufacturing operations and coal mine dust respirator mask lawsuits	$ 0.29
Net income adjustment related to deconsolidation of Venezuelan subsidiary		$ 162
Impact on diluted earnings related to deconsolidation of Venezuelan subsidiary		$ 0.28
Net income adjustment due to the resolution of litigation					$ 710
Impact on diluted earnings per share related to litigation settlement action					$ 1.16
Net income adjustment for measurement period from accounting pursuant to Tax Cuts and Jobs Act of 2017					$ 217
Impact on diluted earnings per share as a result of the Tax Cuts And Jobs Act Of 2017					$ 0.36
Net income adjustment due to the Company's ongoing IRS examination under the Compliance Assurance Process (CAP) and new guidance released under the Tax Cuts and Jobs Act				$ 60
Impact on diluted earnings per share due to the Company's ongoing IRS examination under the Compliance Assurance Process (CAP) and new guidance released under the Tax Cuts and Jobs Act				$ 0.11
Net income adjustment due to completing the Tax Cuts and Jobs Act of 2017 accounting				$ 41
Impact on diluted earnings per share due to completing the Tax Cuts and Jobs Act of 2017 accounting				$ 0.07
Aggregate net income adjustments due the quarterly adjustments							$ 946
Impact on diluted earnings per share in aggregate of quarterly adjustments							$ 1.57

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Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases

Schedule of components of lease expense

	Year ended
(Millions)	December 31, 2019
Operating lease cost	$	308
Finance lease cost:
Amortization of assets		20
Interest on lease liabilities		2
Variable lease cost		93
Total net lease cost	$	423

Schedule of supplemental balance sheet information

	Location on Face of		As of:
(Millions unless noted)	Balance Sheet	December 31, 2019
Operating leases:
Operating lease right of use assets	Operating lease right of use assets	$	858
Current operating lease liabilities	Operating lease liabilities – current	$	247
Noncurrent operating lease liabilities	Operating lease liabilities		607
Total operating lease liabilities		$	854
Finance leases:
Property and equipment, at cost	Property, plant and equipment	$	239
Accumulated amortization	Property, plant and equipment (accumulated depreciation)		(102)
Property and equipment, net		$	137
Current obligations of finance leases	Other current liabilities	$	21
Finance leases, net of current obligations	Other liabilities		111
Total finance lease liabilities		$	132
Weighted average remaining lease term (in years):
Operating leases			5.7
Finance leases			9.0
Weighted average discount rate:
Operating leases			3.2	%
Finance leases			3.8	%

Schedule of supplemental cash flow and other information

	Year ended
(Millions)	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	309
Operating cash flows from finance leases		2
Financing cash flows from finance leases		18
Right of use assets obtained in exchange for lease liabilities:
Operating leases		326
Finance leases		61

Schedule of maturities of operating lease liabilities

	December 31, 2019
(Millions)	Finance Leases		Operating Leases
2020	$	21	$	267
2021		17		191
2022		16		138
2023		15		97
2024		14		65
After 2024		55		173
Total	$	138	$	931
Less: Amounts representing interest		6		77
Present value of future minimum lease payments		132		854
Less: Current obligations		21		247
Long-term obligations	$	111	$	607

Schedule of maturities of finance lease liabilities

	December 31, 2019
(Millions)	Finance Leases		Operating Leases
2020	$	21	$	267
2021		17		191
2022		16		138
2023		15		97
2024		14		65
After 2024		55		173
Total	$	138	$	931
Less: Amounts representing interest		6		77
Present value of future minimum lease payments		132		854
Less: Current obligations		21		247
Long-term obligations	$	111	$	607

Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year

			Operating
(Millions)	Capital Leases		Leases
2019	$	18	$	283
2020		16		208
2021		14		153
2022		12		122
2023		12		92
After 2023		32		253
Total	$	104	$	1,111
Less: Amounts representing interest		12
Present value of future minimum lease payments		92
Less: Current obligations under capital leases		17
Long-term obligations under capital leases	$	75

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Long-Term Debt and Short-Term Borrowings (Tables)

12 Months Ended

Dec. 31, 2019

Long-Term Debt and Short-Term Borrowings

Schedule of Long-Term Debt

Long-Term Debt

(Millions)	Currency/	Effective		Final	Carrying Value
Description / 2019 Principal Amount	Fixed vs. Floating	Interest Rate		Maturity Date	2019		2018
Medium-term note (repaid in 2019)	USD Floating	—	%	2019	$	—	$	596
Medium-term note (repaid in 2019)	USD Fixed	—	%	2019		—		25
Third lien senior secured notes subject to in-substance defeasance ($445 million)	USD Fixed	12.50	%	2020		463		—
Medium-term note (650 million Euros)	Euro Floating	—	%	2020		726		743
Medium-term note ($300 million)	USD Floating	2.16	%	2020		299		294
Medium-term note ($200 million)	USD Floating	1.98	%	2020		200		197
Eurobond (300 million Euros)	Euro Floating	—	%	2021		346		357
Eurobond (300 million Euros)	Euro Fixed	1.97	%	2021		334		341
Medium-term note ($600 million)	USD Fixed	1.63	%	2021		599		599
Medium-term note ($200 million)	USD Fixed	3.07	%	2021		199		199
Medium-term note ($200 million)	USD Floating	1.90	%	2021		204		201
Medium-term note (500 million Euros)	Euro Fixed	0.45	%	2022		557		570
Medium-term note ($600 million)	USD Fixed	2.17	%	2022		597		596
Medium-term note ($450 million)	USD Fixed	2.76	%	2022		449		—
Medium-term note (600 million Euros)	Euro Fixed	1.14	%	2023		665		680
Medium-term note ($650 million)	USD Fixed	2.26	%	2023		648		648
Registered note ($500 million)	USD Fixed	1.86	%	2023		497		—
Medium-term note ($300 million)	USD Floating	2.21	%	2024		299		299
Medium-term note ($300 million)	USD Fixed	3.30	%	2024		299		298
Medium-term note ($500 million)	USD Fixed	2.98	%	2024		503		—
Medium-term note ($550 million)	USD Fixed	3.04	%	2025		547		547
Registered note ($750 million)	USD Fixed	2.12	%	2025		743		—
Medium-term note (750 million Euros)	Euro Fixed	1.66	%	2026		826		844
Medium-term note ($650 million)	USD Fixed	2.37	%	2026		643		642
Medium-term note ($850 million)	USD Fixed	2.95	%	2027		842		841
30-year debenture ($220 million)	USD Fixed	6.44	%	2028		226		226
Medium-term note ($600 million)	USD Fixed	3.62	%	2028		597		597
Medium-term note ($800 million)	USD Fixed	3.38	%	2029		796		—
Registered note ($1 billion)	USD Fixed	2.50	%	2029		984		—
Medium-term note (500 million Euros)	Euro Fixed	1.90	%	2030		549		562
Medium-term note (500 million Euros)	Euro Fixed	1.54	%	2031		554		567
30-year bond ($555 million)	USD Fixed	5.73	%	2037		551		551
Floating rate note ($96 million)	USD Floating	1.58	%	2041		96		95
Medium-term note ($325 million)	USD Fixed	4.05	%	2044		314		314
Floating rate note ($55 million)	USD Floating	1.54	%	2044		53		53
Medium-term note ($500 million)	USD Fixed	3.37	%	2046		475		474
Medium-term note ($500 million)	USD Fixed	3.68	%	2047		492		491
Medium-term note ($650 million)	USD Fixed	4.07	%	2048		637		637
Medium-term note ($500 million)	USD Fixed	3.78	%	2048		506		—
Registered note ($1 billion)	USD Fixed	3.37	%	2049		968		—
Other borrowings	Various	1.63	%	2020-2040		76		72
Total long-term debt					$	19,359	$	14,156
Less: current portion of long-term debt						1,841		745
Long-term debt (excluding current portion)					$	17,518	$	13,411

Schedule of Post-Swap Borrowing (Long-Term Debt, Including Current Portion)

Post-Swap Borrowing (Long-Term Debt, Including Current Portion)

	2019				2018
	Carrying		Effective		Carrying		Effective
(Millions)	Value		Interest Rate		Value		Interest Rate
Fixed-rate debt	$	17,061	3.01	%	$	11,249	2.67	%
Floating-rate debt		2,298	1.06	%		2,907	1.44	%
Total long-term debt, including current portion	$	19,359			$	14,156

Schedule of Short-Term Borrowings and Current Portion of Long-Term Debt

Short-Term Borrowings and Current Portion of Long-Term Debt

	Effective		Carrying Value
(Millions)	Interest Rate		2019		2018
Current portion of long-term debt	3.85	%	$	1,841	$	745
U.S. dollar commercial paper	1.61	%		150		435
Japan subsidiary credit facility	0.13	%		632		—
Germany subsidiary credit facility	0.25	%		168		—
Other borrowings	4.85	%		4		31
Total short-term borrowings and current portion of long-term debt			$	2,795	$	1,211

Schedule of Maturities of Long-Term Debt

Future Maturities of Long-term Debt

Maturities of long-term debt in the table below reflect the impact of put provisions associated with certain debt instruments and are net of the unaccreted debt issue costs such that total maturities equal the carrying value of long-term debt as of December 31, 2019. The maturities of long-term debt for the periods subsequent to December 31, 2019 are as follows (in millions):

										After
2020		2021		2022		2023		2024		2024		Total
$	1,841	$	1,682	$	1,603	$	1,811	$	1,101	$	11,321	$	19,359

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Stock-Based Compensation - General Employees Stock Purchase Plan (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award Activity
Weighted-average fair value	$ 34.19	$ 41.59	$ 23.51
Allocated Share Based Compensation Expense	$ 278	$ 302	$ 324
General Employees' Stock Purchase Plan (GESPP)
Share-based Compensation Arrangement by Share-based Payment Award Activity
Number of shares authorized	60
Option price, percentage of market value at date of grant	85.00%
Weighted-average fair value	$ 27.14	$ 31.91	$ 30.07
Option price, discount from market value at date of grant	15.00%
Allocated Share Based Compensation Expense	$ 30	$ 30	$ 26

XML

Stock-Based Compensation (Details)	12 Months Ended
	Dec. 31, 2019 individual USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award Activity
Number of participants with outstanding options, restricted stock, or restricted stock units | individual	6,700
Retirement age eligibility for employees | $	55
Retirement eligibility for employees, minimum years of service required	10 years
Percent of stock-based compensation related to retiree-eligible population (as a percent)	37.00%
Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award Activity
Number of shares authorized	123,965,000
Number of shares available for grant	22,000,000

XML

Pension and Postretirement Benefit Plans

12 Months Ended

Dec. 31, 2019

Pension and Postretirement Benefit Plans

Pension and Postretirement Benefit Plans

NOTE 13. Pension and Postretirement Benefit Plans

3M has company-sponsored retirement plans covering substantially all U.S. employees and many employees outside the United States. In total, 3M has over 75 defined benefit plans in 28 countries. Pension benefits associated with these plans generally are based on each participant’s years of service, compensation, and age at retirement or termination. The primary U.S. defined-benefit pension plan was closed to new participants effective January 1, 2009. The Company also provides certain postretirement health care and life insurance benefits for its U.S. employees who reach retirement age while employed by the Company and were employed by the Company prior to January 1, 2016. Most international employees and retirees are covered by government health care programs. The cost of company-provided postretirement health care plans for international employees is not material and is combined with U.S. amounts in the tables that follow.

The Company has made deposits for its defined benefit plans with independent trustees. Trust funds and deposits with insurance companies are maintained to provide pension benefits to plan participants and their beneficiaries. There are no plan assets in the non-qualified plan due to its nature. For its U.S. postretirement health care and life insurance benefit plans, the Company has set aside amounts at least equal to annual benefit payments with an independent trustee.

The Company also sponsors employee savings plans under Section 401(k) of the Internal Revenue Code. These plans are offered to substantially all regular U.S. employees. For eligible employees hired prior to January 1, 2009, employee 401(k) contributions of up to 5% of eligible compensation matched in cash at rates of 45% or 60%, depending on the plan in which the employee participates. Employees hired on or after January 1, 2009, receive a cash match of 100% for employee 401(k) contributions of up to 5% of eligible compensation and receive an employer retirement income account cash contribution of 3% of the participant’s total eligible compensation. All contributions are invested in a number of investment funds pursuant to the employees’ elections. Employer contributions to the U.S. defined contribution plans were $186 million, $173 million and $159 million for 2019, 2018 and 2017, respectively. 3M subsidiaries in various international countries also participate in defined contribution plans. Employer contributions to the international defined contribution plans were $96 million, $99 million and $88 million for 2019, 2018 and 2017, respectively.

In May 2019 (as part of the 2019 restructuring actions discussed in Note 5), the Company began offering a voluntary early retirement incentive program to certain eligible participants of its U.S. pension plans who meet age and years of pension service requirements. The eligible participants who accepted the offer and retired by July 1, 2019 received an enhanced pension benefit. Pension benefits were enhanced by adding one additional year of pension service and one additional year of age for certain benefit calculations.

Approximately 800 participants accepted the offer and retired before July 1, 2019. As a result, the Company incurred a $35 million charge related to these special termination benefits in the second quarter of 2019.

In the fourth quarter of 2019, the Company recognized a non-operating $32 million settlement expense in its U.S. non-qualified pension plan. The charge is related to lump sum payments made to employees at retirement. The settlement expense is an accelerated recognition of past actuarial losses.

In May 2019, 3M modified the 3M Retiree Life Insurance Plan postretirement benefit to close it to new participants effective August 1, 2019 (which results in employees who retire on or after August 1, 2019 not being eligible to participate in the plan) and reducing the maximum life insurance and death benefit to $8,000 for deaths on or after August 1, 2019. Due to these changes, the plan was re-measured in the second quarter of 2019, resulting in a decrease to the accumulated projected benefit obligation liability of approximately $150 million and a related increase to shareholders’ equity, specifically accumulated other comprehensive income in addition to an immaterial income statement benefit prospectively.

The following tables include a reconciliation of the beginning and ending balances of the benefit obligation and the fair value of plan assets as well as a summary of the related amounts recognized in the Company’s consolidated balance sheet as of December 31 of the respective years. 3M also has certain non-qualified unfunded pension and postretirement benefit plans, inclusive of plans related to supplement/excess benefits for employees impacted by particular relocations and other matters, that individually and in the aggregate are not significant and which are not included in the tables that follow. The obligations for these plans are included within other liabilities in the Company’s consolidated balance sheet and aggregated less than $40 million as of December 31, 2019 and 2018.

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Change in benefit obligation
Benefit obligation at beginning of year	$	15,948	$	17,360	$	6,965	$	7,502	$	2,175	$	2,410
Acquisitions/Transfers		—		—		9		(11)		—		—
Service cost		251		288		131		143		43		52
Interest cost		620		563		156		157		82		79
Participant contributions		—		—		7		9		—		—
Foreign exchange rate changes		—		—		55		(387)		—		(13)
Plan amendments		—		—		3		7		(171)		—
Actuarial (gain) loss		2,209		(1,226)		906		(144)		225		(244)
Benefit payments		(1,128)		(1,034)		(302)		(304)		(112)		(109)
Settlements, curtailments, special termination benefits and other		35		(3)		1		(7)		—		—
Benefit obligation at end of year	$	17,935	$	15,948	$	7,931	$	6,965	$	2,242	$	2,175
Change in plan assets
Fair value of plan assets at beginning of year	$	14,803	$	15,686	$	6,170	$	6,737	$	1,260	$	1,397
Acquisitions/Transfers		—		(4)		4		—		—		—
Actual return on plan assets		2,323		(95)		858		(38)		187		(32)
Company contributions		101		254		106		112		3		4
Participant contributions		—		—		7		9		—		—
Foreign exchange rate changes		—		—		80		(346)		—		—
Benefit payments		(1,128)		(1,034)		(302)		(304)		(112)		(109)
Settlements, curtailments, special termination benefits and other		—		(4)		—		—		—		—
Fair value of plan assets at end of year	$	16,099	$	14,803	$	6,923	$	6,170	$	1,338	$	1,260
Funded status at end of year	$	(1,836)	$	(1,145)	$	(1,008)	$	(795)	$	(904)	$	(915)

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Amounts recognized in the Consolidated Balance Sheet as of Dec. 31,
Non-current assets	$	—	$	—	$	230	$	208	$	—	$	—
Accrued benefit cost
Current liabilities		(48)		(60)		(15)		(13)		(4)		(3)
Non-current liabilities		(1,788)		(1,085)		(1,223)		(990)		(900)		(912)
Ending balance	$	(1,836)	$	(1,145)	$	(1,008)	$	(795)	$	(904)	$	(915)

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Amounts recognized in accumulated other comprehensive income as of Dec. 31,
Net transition obligation (asset)	$	—	$	—	$	10	$	—	$	—	$	—
Net actuarial loss (gain)		5,899		5,374		1,967		1,713		663		584
Prior service cost (credit)		(128)		(152)		(5)		(20)		(262)		(123)
Ending balance	$	5,771	$	5,222	$	1,972	$	1,693	$	401	$	461

The balance of amounts recognized for international plans in accumulated other comprehensive income as of December 31 in the preceding table are presented based on the foreign currency exchange rate on that date.

The pension accumulated benefit obligation represents the actuarial present value of benefits based on employee service and compensation as of the measurement date and does not include an assumption about future compensation levels. The accumulated benefit obligation of the U.S. pension plans was $17.125 billion and $15.033 billion at December 31, 2019 and 2018, respectively. The accumulated benefit obligation of the international pension plans was $7.355 billion and $6.438 billion at December 31, 2019 and 2018, respectively.

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 31:

	Qualified and Non-qualified Pension Plans
	United States				International
(Millions)	2019		2018		2019		2018
Projected benefit obligation	$	17,935	$	593	$	2,986	$	2,613
Accumulated benefit obligation		17,125		521		2,752		2,415
Fair value of plan assets		16,099		9		1,778		1,633

Components of net periodic cost and other amounts recognized in other comprehensive income

The service cost component of defined benefit net periodic benefit cost is recorded in cost of sales, selling, general and administrative expenses, and research, development and related expenses. As discussed in Note 6, the other components of net periodic benefit cost are reflected in other expense (income), net. Components of net periodic benefit cost and other supplemental information for the years ended December 31 follow:

	Qualified and Non-qualified
	Pension Benefits												Postretirement
	United States						International						Benefits
(Millions)	2019		2018		2017		2019		2018		2017		2019		2018		2017
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	251	$	288	$	268	$	131	$	143	$	142	$	43	$	52	$	52
Non-operating expense
Interest cost		620		563		565		156		157		157		82		79		80
Expected return on plan assets		(1,040)		(1,087)		(1,035)		(299)		(307)		(292)		(81)		(84)		(86)
Amortization of prior service benefit		(24)		(23)		(23)		(12)		(13)		(13)		(33)		(40)		(53)
Amortization of net actuarial loss		366		503		388		78		114		126		34		61		56
Settlements, curtailments, special termination benefits and other		70		—		2		10		4		4		5		—		(4)
Total non-operating expense (benefit)		(8)		(44)		(103)		(67)		(45)		(18)		7		16		(7)
Total net periodic benefit cost (benefit)	$	243	$	244	$	165	$	64	$	98	$	124	$	50	$	68	$	45
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Prior service cost (benefit)	$	—	$	—	$	—	$	3	$	7	$	6	$	(171)	$	—	$	(1)
Amortization of prior service benefit		24		23		23		12		13		13		33		40		53
Net actuarial (gain) loss		926		(44)		607		344		194		(244)		119		(127)		69
Amortization of net actuarial loss		(366)		(503)		(388)		(78)		(114)		(126)		(34)		(61)		(56)
Foreign currency		—		—		—		7		(83)		167		(1)		(2)		—
Settlements and curtailments		(35)		—		(2)		(8)		(4)		(4)		(5)		—		—
Total recognized in other comprehensive (income) loss	$	549	$	(524)	$	240	$	280	$	13	$	(188)	$	(59)	$	(150)	$	65
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss	$	792	$	(280)	$	405	$	344	$	111	$	(64)	$	(9)	$	(82)	$	110

Weighted-average assumptions used to determine benefit obligations as of December 31

	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount rate	3.25	%	4.36	%	3.68	%	1.81	%	2.50	%	2.41	%	3.27	%	4.41	%	3.79	%
Compensation rate increase	3.21	%	4.10	%	4.10	%	2.88	%	2.89	%	2.89	%	N/A		N/A		N/A

Weighted-average assumptions used to determine net cost for years ended December 31

	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount rate - service cost	4.44	%	3.78	%	4.42	%	2.39	%	2.27	%	2.32	%	4.53	%	3.86	%	4.50	%
Discount rate - interest cost	4.02	%	3.35	%	3.61	%	2.26	%	2.14	%	2.25	%	4.15	%	3.52	%	3.80	%
Expected return on assets	7.00	%	7.25	%	7.25	%	4.90	%	5.02	%	5.16	%	6.43	%	6.53	%	6.48	%
Compensation rate increase	4.10	%	4.10	%	4.10	%	2.89	%	2.89	%	2.90	%	N/A		N/A		N/A

The Company provides eligible retirees in the U.S. postretirement health care benefit plans to a savings account benefits-based plan. The contributions provided by the Company to the health savings accounts increase 3 percent per year for employees who retired prior to January 1, 2016 and increase 1.5 percent for employees who retire on or after January 1, 2016. Therefore, the Company no longer has material exposure to health care cost inflation.

The Company determines the discount rate used to measure plan liabilities as of the December 31 measurement date for the pension and postretirement benefit plans, which is also the date used for the related annual measurement assumptions. The discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year. The Company sets its rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. Using this methodology, the Company determined a discount rate of 3.25% for the U.S. pension plans and 3.27% for the postretirement benefit plans as of December 31, 2019, which is a decrease of 1.11 percentage points and 1.14 percentage points, respectively, from the rates used as of December 31, 2018. A decrease in the discount rate increases the Projected Benefit Obligation (PBO), the significant decrease in the discount rate as of December 31, 2019 resulted in an approximately $2.0 billion higher PBO for the U.S. pension plans. For the international pension and postretirement plans the discount rates also reflect the current rate at which the associated liabilities could be effectively settled at the end of the year. If the country has a deep market in corporate bonds the Company matches the expected cash flows from the plan either to a portfolio of bonds that generate sufficient cash flow or a notional yield curve generated from available bond information. In countries that do not have a deep market in corporate bonds, government bonds are considered with a risk premium to approximate corporate bond yields.

The Company measures service cost and interest cost separately using the spot yield curve approach applied to each corresponding obligation. Service costs are determined based on duration-specific spot rates applied to the service cost cash flows. The interest cost calculation is determined by applying duration-specific spot rates to the year-by-year projected benefit payments. The spot yield curve approach does not affect the measurement of the total benefit obligations as the change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income.

For the primary U.S. qualified pension plan, the Company’s assumption for the expected return on plan assets was 7.00% in 2019. Projected returns are based primarily on broad, publicly traded equity and fixed-income indices and forward-looking estimates of active portfolio and investment management. As of December 31, 2019, the Company’s 2020 expected long-term rate of return on U.S. plan assets is 6.75%. The expected return assumption is based on the strategic asset allocation of the plan, long term capital market return expectations and expected performance from active investment management. The 2019 expected long-term rate of return is based on an asset allocation assumption of 23% global equities, 14% private equities, 47% fixed-income securities, and 16% absolute return investments independent of traditional performance benchmarks, along with positive returns from active investment management. The actual net rate of return on plan assets in 2019 was 16.3%. In 2018 the plan earned a rate of return of -0.5% and in 2017 earned a return of 12.4%. The average annual actual return on the plan assets over the past 10 and 25 years has been 8.9% and 9.4%, respectively. Return on assets assumptions for international pension and other post-retirement benefit plans are calculated on a plan-by-plan basis using plan asset allocations and expected long-term rate of return assumptions.

As of December 31, 2019, the Company converted to the “Pri-2012 Aggregate Mortality Table” and updated the mortality improvement scales to the Society of Actuaries Scale MP-2019. The December 31, 2019 update resulted in a small decrease to the U.S. pension PBO and U.S. accumulated postretirement benefit obligations.

During 2019, the Company contributed $207 million to its U.S. and international pension plans and $3 million to its postretirement plans. During 2018, the Company contributed $366 million to its U.S. and international pension plans and $4 million to its postretirement plans. In 2020, the Company expects to contribute an amount in the range of $100 million to $200 million of cash to its U.S. and international retirement plans. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2020. Future contributions will depend on market conditions, interest rates and other factors.

Future Pension and Postretirement Benefit Payments

The following table provides the estimated pension and postretirement benefit payments that are payable from the plans to participants.

	Qualified and Non-qualified
	Pension Benefits				Postretirement
(Millions)	United States		International		Benefits
2020 Benefit Payments	$	1,103	$	246	$	121
2021 Benefit Payments		1,096		253		128
2022 Benefit Payments		1,104		272		136
2023 Benefit Payments		1,106		284		142
2024 Benefit Payments		1,111		302		148
Next five years		5,521		1,656		789

Plan Asset Management

3M’s investment strategy for its pension and postretirement plans is to manage the funds on a going-concern basis. The primary goal of the trust funds is to meet the obligations as required. The secondary goal is to earn the highest rate of return possible, without jeopardizing its primary goal, and without subjecting the Company to an undue amount of contribution risk. Fund returns are used to help finance present and future obligations to the extent possible within actuarially determined funding limits and tax-determined asset limits, thus reducing the potential need for additional contributions from 3M. The investment strategy has used long duration cash bonds and derivative instruments to offset a significant portion of the interest rate sensitivity of U.S. pension liabilities.

Normally, 3M does not buy or sell any of its own securities as a direct investment for its pension and other postretirement benefit funds. However, due to external investment management of the funds, the plans may indirectly buy, sell or hold 3M securities. The aggregate amount of 3M securities are not considered to be material relative to the aggregate fund percentages.

The discussion that follows references the fair value measurements of certain assets in terms of levels 1, 2 and 3. See Note 15 for descriptions of these levels. While the company believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

U.S. Pension Plans and Postretirement Benefit Plan Assets

In order to achieve the investment objectives in the U.S. pension plans and U.S. postretirement benefit plans, the investment policies include a target strategic asset allocation. The investment policies allow some tolerance around the target in recognition that market fluctuations and illiquidity of some investments may cause the allocation to a specific asset class to vary from the target allocation, potentially for long periods of time. Acceptable ranges have been designed to allow for deviation from strategic targets and to allow for the opportunity for tactical over- and under-weights. The portfolios will normally be rebalanced when the quarter-end asset allocation deviates from acceptable ranges. The allocation is reviewed regularly by the named fiduciary of the plans. Approximately 50% of the postretirement benefit plan assets are in a 401(h) account. The 401(h) account assets are in the same trust as the primary U.S. pension plan and invested with the same investment objectives as the primary U.S. pension plan.

The fair values of the assets held by the U.S. pension plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
U.S. equities	$	1,575	$	1,369	$	—	$	—	$	—	$	—	$	1,575	$	1,369
Non-U.S. equities		1,585		1,234		—		—		—		—		1,585		1,234
Index and long/short equity funds*														417		372
Total Equities	$	3,160	$	2,603	$	—	$	—	$	—	$	—	$	3,577	$	2,975
Fixed Income
U.S. government securities	$	2,346	$	1,889	$	916	$	732	$	—	$	—	$	3,262	$	2,621
Non-U.S. government securities		—		—		61		44		—		—		61		44
Preferred and convertible securities		—		—		52		44		—		—		52		44
U.S. corporate bonds		10		9		3,566		2,941		—		—		3,576		2,950
Non-U.S. corporate bonds		—		—		759		475		—		—		759		475
Derivative instruments		(5)		2		109		111		—		—		104		113
Other*														—		9
Total Fixed Income	$	2,351	$	1,900	$	5,463	$	4,347	$	—	$	—	$	7,814	$	6,256
Private Equity
Growth equity	$	80	$	45	$	—	$	—	$	—	$	—	$	80	$	45
Partnership investments*														1,865		2,064
Total Private Equity	$	80	$	45	$	—	$	—	$	—	$	—	$	1,945	$	2,109
Absolute Return
Fixed income and other	$	1	$	28	$	117	$	114	$	—	$	—	$	118	$	142
Hedge fund/fund of funds*														2,010		1,866
Partnership investments*														589		429
Total Absolute Return	$	1	$	28	$	117	$	114	$	—	$	—	$	2,717	$	2,437
Cash and Cash Equivalents
Cash and cash equivalents	$	20	$	412	$	5	$	4	$	—	$	—	$	25	$	416
Repurchase agreements and derivative margin activity		—		—		(1)		(1)		—		—		(1)		(1)
Cash and cash equivalents, valued at net asset value*														480		870
Total Cash and Cash Equivalents	$	20	$	412	$	4	$	3	$	—	$	—	$	504	$	1,285
Total	$	5,612	$	4,988	$	5,584	$	4,464	$	—	$	—	$	16,557	$	15,062
Other items to reconcile to fair value of plan assets													$	(458)	$	(259)
Fair value of plan assets													$	16,099	$	14,803

* In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

The fair values of the assets held by the postretirement benefit plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
U.S. equities	$	337	$	356	$	—	$	—	$	—	$	—	$	337	$	356
Non-U.S. equities		77		58		—		—		—		—		77		58
Index and long/short equity funds*														33		34
Total Equities	$	414	$	414	$	—	$	—	$	—	$	—	$	447	$	448
Fixed Income
U.S. government securities	$	136	$	112	$	242	$	213	$	—	$	—	$	378	$	325
Non-U.S. government securities		—		—		6		4		—		—		6		4
U.S. corporate bonds		—		—		203		162		—		—		203		162
Non-U.S. corporate bonds		—		—		46		32		—		—		46		32
Derivative instruments		—		—		5		5		—		—		5		5
Total Fixed Income	$	136	$	112	$	502	$	416	$	—	$	—	$	638	$	528
Private Equity
Growth equity	$	4	$	2	$	—	$	—	$	—	$	—	$	4	$	2
Partnership investments*														92		101
Total Private Equity	$	4	$	2	$	—	$	—	$	—	$	—	$	96	$	103
Absolute Return
Fixed income and other	$	—	$	1	$	5	$	5	$	—	$	—	$	5	$	6
Hedge fund/fund of funds*														92		80
Partnership investments*														27		18
Total Absolute Return	$	—	$	1	$	5	$	5	$	—	$	—	$	124	$	104
Cash and Cash Equivalents
Cash and cash equivalents	$	33	$	47	$	1	$	5	$	—	$	—	$	34	$	52
Repurchase agreements and derivative margin activity		—		—		—		—		—		—		—		—
Cash and cash equivalents, valued at net asset value*														22		37
Total Cash and Cash Equivalents	$	33	$	47	$	1	$	5	$	—	$	—	$	56	$	89
Total	$	587	$	576	$	508	$	426	$	—	$	—	$	1,361	$	1,272
Other items to reconcile to fair value of plan assets													$	(23)	$	(12)
Fair value of plan assets													$	1,338	$	1,260

*In accordance with ASC 820-10, certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded.

Fixed income includes derivative instruments such as credit default swaps, interest rate swaps and futures contracts. Corporate debt includes bonds and notes, asset backed securities, collateralized mortgage obligations and private placements. Swaps and derivative instruments are valued by the custodian using closing market swap curves and market derived inputs. U.S. government and government agency bonds and notes are valued at the closing price reported in the active market in which the individual security is traded. Corporate bonds and notes, asset backed securities and collateralized mortgage obligations are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. Private placements are valued by the custodian using recognized pricing services and sources. 

The private equity portfolio is a diversified mix of derivative instruments, growth equity and partnership interests. Derivative investments are written options that are valued by independent parties using market inputs and valuation models. Growth equity investments are valued at the closing price reported in the active market in which the individual securities are traded. 

Absolute return consists primarily of partnership interests in hedge funds, hedge fund of funds or other private fund vehicles. Corporate debt instruments are valued at either the yields currently available on comparable securities of issuers with similar credit

ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risk ratings.

Other items to reconcile to fair value of plan assets include, interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable.

The balances of and changes in the fair values of the U.S. pension plans’ and postretirement plans’ level 3 assets for the periods ended December 31, 2019 and 2018 were not material.

International Pension Plans Assets

Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below of asset categories is presented in aggregate for over 70 defined benefit plans in 25 countries; however, there is significant variation in asset allocation policy from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. The Company provides standard funding and investment guidance to all international plans with more focused guidance to the larger plans.

Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when necessary.

The fair values of the assets held by the international pension plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
Growth equities	$	638	$	460	$	796	$	248	$	—	$	—	$	1,434	$	708
Value equities		696		446		10		42		—		—		706		488
Core equities		61		55		88		742		5		5		154		802
Equities, valued at net asset value*														18		16
Total Equities	$	1,395	$	961	$	894	$	1,032	$	5	$	5	$	2,312	$	2,014
Fixed Income
Domestic government	$	353	$	334	$	433	$	351	$	4	$	5	$	790	$	690
Foreign government		22		150		603		321		—		—		625		471
Corporate debt securities		3		56		1,599		993		9		9		1,611		1,058
Fixed income securities, valued at net asset value*														449		961
Total Fixed Income	$	378	$	540	$	2,635	$	1,665	$	13	$	14	$	3,475	$	3,180
Private Equity
Real estate	$	6	$	5	$	207	$	75	$	4	$	4	$	217	$	84
Real estate, valued at net asset value*														36		37
Partnership investments*														85		89
Total Private Equity	$	6	$	5	$	207	$	75	$	4	$	4	$	338	$	210
Absolute Return
Derivatives	$	—	$	1	$	3	$	1	$	—	$	—	$	3	$	2
Insurance		—		—		—		—		513		496		513		496
Other		—		—		—		33		5		8		5		41
Other, valued at net asset value*														1		—
Hedge funds*														195		186
Total Absolute Return	$	—	$	1	$	3	$	34	$	518	$	504	$	717	$	725
Cash and Cash Equivalents
Cash and cash equivalents	$	94	$	71	$	39	$	22	$	—	$	—	$	133	$	93
Cash and cash equivalents, valued at net asset value*														1		1
Total Cash and Cash Equivalents	$	94	$	71	$	39	$	22	$	—	$	—	$	134	$	94
Total	$	1,873	$	1,578	$	3,778	$	2,828	$	540	$	527	$	6,976	$	6,223
Other items to reconcile to fair value of plan assets													$	(53)	$	(53)
Fair value of plan assets													$	6,923	$	6,170

*In accordance with ASC 820-10, certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

Equities consist primarily of mandates in public equity securities managed to various public equity indices. Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded.

Fixed Income investments include domestic and foreign government, and corporate, (including mortgage backed and other debt) securities. Governments, corporate bonds and notes and mortgage backed securities are valued at the closing price reported if traded on an active market or at yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

Private equity funds consist of partnership interests in a variety of funds. Real estate consists of property funds and REITS (Real Estate Investment Trusts). REITS are valued at the closing price reported in the active market in which it is traded.

Absolute return consists of private partnership interests in hedge funds, insurance contracts, derivative instruments, hedge fund of funds, and other alternative investments. Insurance consists of insurance contracts, which are valued using cash surrender values which is the amount the plan would receive if the contract was cashed out at year end. Derivative instruments consist of interest rate swaps that are used to help manage risks.

Other items to reconcile to fair value of plan assets include the net of interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable.

The balances of and changes in the fair values of the international pension plans’ level 3 assets consist primarily of insurance contracts under the absolute return asset class. The aggregate of net purchases and net unrealized gains increased this balance by $17 million in 2019 and decreased this balance by $11 million in 2018.

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Commitments and Contingencies - Securities Litigation (Details)	Dec. 31, 2019 lawsuit
Minnesota | Securities Litigation
Loss contingencies
Number of lawsuits pending	2

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Leases

12 Months Ended

Dec. 31, 2019

Leases

Leases

NOTE 17. Leases

The Company adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on January 1, 2019 using the modified retrospective method of adoption. 3M elected the transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. Due to the cumulative net impact of adopting ASC 842, the January 1, 2019 balance of retained earnings was increased by $14 million, primarily relating to previously deferred gains from sale-leaseback transactions. In addition, adoption of the new standard resulted in the recording of right of use assets and associated lease liabilities of $0.8 billion each as of January 1, 2019. The Company’s accounting for finance leases (previously called capital leases) remains substantially unchanged. ASC 842 did not have a material impact on 3M’s consolidated income statement. 3M elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. The Company did not elect the hindsight practical expedient.

The components of lease expense are as follows:

	Year ended
(Millions)	December 31, 2019
Operating lease cost	$	308
Finance lease cost:
Amortization of assets		20
Interest on lease liabilities		2
Variable lease cost		93
Total net lease cost	$	423

Short-term lease cost and income related to sub-lease activity is immaterial for the Company.

Supplemental balance sheet information related to leases is as follows:

	Location on Face of		As of:
(Millions unless noted)	Balance Sheet	December 31, 2019
Operating leases:
Operating lease right of use assets	Operating lease right of use assets	$	858
Current operating lease liabilities	Operating lease liabilities – current	$	247
Noncurrent operating lease liabilities	Operating lease liabilities		607
Total operating lease liabilities		$	854
Finance leases:
Property and equipment, at cost	Property, plant and equipment	$	239
Accumulated amortization	Property, plant and equipment (accumulated depreciation)		(102)
Property and equipment, net		$	137
Current obligations of finance leases	Other current liabilities	$	21
Finance leases, net of current obligations	Other liabilities		111
Total finance lease liabilities		$	132
Weighted average remaining lease term (in years):
Operating leases			5.7
Finance leases			9.0
Weighted average discount rate:
Operating leases			3.2	%
Finance leases			3.8	%

Supplemental cash flow and other information related to leases is as follows:

	Year ended
(Millions)	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	309
Operating cash flows from finance leases		2
Financing cash flows from finance leases		18
Right of use assets obtained in exchange for lease liabilities:
Operating leases		326
Finance leases		61

In the first quarter of 2019, 3M sold and leased-back certain recently constructed machinery and equipment in return for municipal securities, which in aggregate, were recorded as a finance lease asset and obligation of approximately $9 million. During 2019, the Company sold and leased-back an office location and a manufacturing site resulting in a combined gain of $82 million.

Maturities of lease liabilities were as follows:

	December 31, 2019
(Millions)	Finance Leases		Operating Leases
2020	$	21	$	267
2021		17		191
2022		16		138
2023		15		97
2024		14		65
After 2024		55		173
Total	$	138	$	931
Less: Amounts representing interest		6		77
Present value of future minimum lease payments		132		854
Less: Current obligations		21		247
Long-term obligations	$	111	$	607

As of December 31, 2019, the Company has additional operating lease commitments that have not yet commenced of approximately $23 million. These commitments pertain to 3M’s right of use buildings.

Disclosures related to periods prior to adoption of new lease standard:

Capital and Operating Leases:

Rental expense under operating leases was $393 million in 2018 and $343 million in 2017. Accumulated depreciation for capital leases totaled $54 million as of December 31, 2018. It is 3M’s practice to secure renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain a presence in a leased facility. 3M has the following primary capital leases:

● In 2003, 3M recorded a capital lease asset and obligation of approximately 34 million British Pound (GBP), or approximately $43 million at December 31, 2018, exchange rates, for a building in the United Kingdom (with a lease term of 22 years).

● 3M sold and leased-back certain recently constructed machinery and equipment in return for municipal securities, which in aggregate, were recorded as a capital lease asset and obligation of approximately $13 million in 2018 and $13 million in 2017, with an average remaining lease term remaining of 15 years at December 31, 2018.

Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2018, were as follows:

			Operating
(Millions)	Capital Leases		Leases
2019	$	18	$	283
2020		16		208
2021		14		153
2022		12		122
2023		12		92
After 2023		32		253
Total	$	104	$	1,111
Less: Amounts representing interest		12
Present value of future minimum lease payments		92
Less: Current obligations under capital leases		17
Long-term obligations under capital leases	$	75

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Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	$ 141	$ 417
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet	142	146
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet	20	53
Fair value on a recurring basis | Foreign currency forward/option contracts
Assets and Liabilities Measured on Recurring Basis
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet	125	127
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet	20	22
Fair value on a recurring basis | Interest rate swap contracts
Assets and Liabilities Measured on Recurring Basis
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet	17	19
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet		31
Fair value on a recurring basis | Commercial paper
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	85	366
Fair value on a recurring basis | Certificates of deposit/time deposits
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	10	10
Fair value on a recurring basis | Asset-backed securities
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities		1
Fair value on a recurring basis | U.S. municipal securities
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	46	40
Fair value on a recurring basis | Investments
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	25
Fair value on a recurring basis | Level 1 | Investments
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	25
Fair value on a recurring basis | Level 2 | Foreign currency forward/option contracts
Assets and Liabilities Measured on Recurring Basis
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet	125	127
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet	20	22
Fair value on a recurring basis | Level 2 | Interest rate swap contracts
Assets and Liabilities Measured on Recurring Basis
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet	17	19
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet		31
Fair value on a recurring basis | Level 2 | Commercial paper
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	85	366
Fair value on a recurring basis | Level 2 | Certificates of deposit/time deposits
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	10	10
Fair value on a recurring basis | Level 2 | Asset-backed securities
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities		1
Fair value on a recurring basis | Level 3 | U.S. municipal securities
Assets and Liabilities Measured on Recurring Basis
Available-for-sale marketable securities	$ 46	$ 40

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Consolidated Statement of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statement of Comprehensive Income
Net income including noncontrolling interest	$ 4,582	$ 5,363	$ 4,869
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	211	(467)	373
Defined benefit pension and postretirement plans adjustment	(560)	444	52
Cash flow hedging instruments		176	(203)
Cash flow hedging instruments	(72)
Total other comprehensive income (loss), net of tax	(421)	153	222
Comprehensive income (loss) including noncontrolling interest	4,161	5,516	5,091
Comprehensive (income) loss attributable to noncontrolling interest	(11)	(8)	(14)
Comprehensive income (loss) attributable to 3M	$ 4,150	$ 5,508	$ 5,077

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Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statement of Changes in Equity
Dividends declared in current period (in dollars per share)	$ 1.44	$ 1.44	$ 1.44	$ 1.44	$ 1.36	$ 1.36	$ 1.36	$ 1.36	$ 1.175	$ 1.175	$ 1.175	$ 1.175	$ 5.76	$ 5.44	$ 4.70

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Commitments and Contingencies - Unconditional Purchase Obligations (Details) $ in Millions	Dec. 31, 2019 USD ($)
Unconditional Purchase Obligations
Due in 2020	$ 306
Due in 2021	278
Due in 2022	156
Due in 2023	184
Due in 2024	42
Due after 2024	17
Total unconditional purchase obligation commitment	$ 983

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Pension and Postretirement Benefit Plans - Pension Asset Fair Values (Details) - Funded - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Qualified and Non-qualified Pension Benefits | United States
Benefit Plan Information
Total, before other items to reconcile	$ 16,557	$ 15,062
Other items to reconcile to fair value of plan assets	(458)	(259)
Fair value of plan assets	16,099	14,803	$ 15,686
Qualified and Non-qualified Pension Benefits | International
Benefit Plan Information
Total, before other items to reconcile	6,976	6,223
Other items to reconcile to fair value of plan assets	(53)	(53)
Fair value of plan assets	6,923	6,170	6,737
Qualified and Non-qualified Pension Benefits | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	5,612	4,988
Qualified and Non-qualified Pension Benefits | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	1,873	1,578
Qualified and Non-qualified Pension Benefits | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	5,584	4,464
Qualified and Non-qualified Pension Benefits | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	3,778	2,828
Qualified and Non-qualified Pension Benefits | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	540	527
Qualified and Non-qualified Pension Benefits | Global equity | United States
Benefit Plan Information
Total, before other items to reconcile	3,577	2,975
Qualified and Non-qualified Pension Benefits | Global equity | International
Benefit Plan Information
Total, before other items to reconcile	2,312	2,014
Qualified and Non-qualified Pension Benefits | Global equity | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	3,160	2,603
Qualified and Non-qualified Pension Benefits | Global equity | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	1,395	961
Qualified and Non-qualified Pension Benefits | Global equity | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	894	1,032
Qualified and Non-qualified Pension Benefits | Global equity | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	5	5
Qualified and Non-qualified Pension Benefits | U.S. equities | United States
Benefit Plan Information
Total, before other items to reconcile	1,575	1,369
Qualified and Non-qualified Pension Benefits | U.S. equities | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	1,575	1,369
Qualified and Non-qualified Pension Benefits | Non-U.S. equities | United States
Benefit Plan Information
Total, before other items to reconcile	1,585	1,234
Qualified and Non-qualified Pension Benefits | Non-U.S. equities | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	1,585	1,234
Qualified and Non-qualified Pension Benefits | Growth equities | International
Benefit Plan Information
Total, before other items to reconcile	1,434	708
Qualified and Non-qualified Pension Benefits | Growth equities | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	638	460
Qualified and Non-qualified Pension Benefits | Growth equities | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	796	248
Qualified and Non-qualified Pension Benefits | Value equities | International
Benefit Plan Information
Total, before other items to reconcile	706	488
Qualified and Non-qualified Pension Benefits | Value equities | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	696	446
Qualified and Non-qualified Pension Benefits | Value equities | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	10	42
Qualified and Non-qualified Pension Benefits | Core equities | International
Benefit Plan Information
Total, before other items to reconcile	154	802
Qualified and Non-qualified Pension Benefits | Core equities | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	61	55
Qualified and Non-qualified Pension Benefits | Core equities | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	88	742
Qualified and Non-qualified Pension Benefits | Core equities | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	5	5
Qualified and Non-qualified Pension Benefits | Equities valued at net asset value | International
Benefit Plan Information
Total, before other items to reconcile	18	16
Qualified and Non-qualified Pension Benefits | Index and long/short equity | United States
Benefit Plan Information
Total, before other items to reconcile	417	372
Qualified and Non-qualified Pension Benefits | Fixed income | United States
Benefit Plan Information
Total, before other items to reconcile	7,814	6,256
Qualified and Non-qualified Pension Benefits | Fixed income | International
Benefit Plan Information
Total, before other items to reconcile	3,475	3,180
Qualified and Non-qualified Pension Benefits | Fixed income | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	2,351	1,900
Qualified and Non-qualified Pension Benefits | Fixed income | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	378	540
Qualified and Non-qualified Pension Benefits | Fixed income | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	5,463	4,347
Qualified and Non-qualified Pension Benefits | Fixed income | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	2,635	1,665
Qualified and Non-qualified Pension Benefits | Fixed income | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	13	14
Qualified and Non-qualified Pension Benefits | U.S. government securities | United States
Benefit Plan Information
Total, before other items to reconcile	3,262	2,621
Qualified and Non-qualified Pension Benefits | U.S. government securities | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	2,346	1,889
Qualified and Non-qualified Pension Benefits | U.S. government securities | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	916	732
Qualified and Non-qualified Pension Benefits | Domestic government debt | International
Benefit Plan Information
Total, before other items to reconcile	790	690
Qualified and Non-qualified Pension Benefits | Domestic government debt | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	353	334
Qualified and Non-qualified Pension Benefits | Domestic government debt | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	433	351
Qualified and Non-qualified Pension Benefits | Domestic government debt | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	4	5
Qualified and Non-qualified Pension Benefits | Foreign government agency securities | United States
Benefit Plan Information
Total, before other items to reconcile	61	44
Qualified and Non-qualified Pension Benefits | Foreign government agency securities | International
Benefit Plan Information
Total, before other items to reconcile	625	471
Qualified and Non-qualified Pension Benefits | Foreign government agency securities | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	22	150
Qualified and Non-qualified Pension Benefits | Foreign government agency securities | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	61	44
Qualified and Non-qualified Pension Benefits | Foreign government agency securities | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	603	321
Qualified and Non-qualified Pension Benefits | Preferred and convertible securities | United States
Benefit Plan Information
Total, before other items to reconcile	52	44
Qualified and Non-qualified Pension Benefits | Preferred and convertible securities | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	52	44
Qualified and Non-qualified Pension Benefits | U.S. corporate bonds | United States
Benefit Plan Information
Total, before other items to reconcile	3,576	2,950
Qualified and Non-qualified Pension Benefits | U.S. corporate bonds | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	10	9
Qualified and Non-qualified Pension Benefits | U.S. corporate bonds | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	3,566	2,941
Qualified and Non-qualified Pension Benefits | Non-U.S. corporate bonds | United States
Benefit Plan Information
Total, before other items to reconcile	759	475
Qualified and Non-qualified Pension Benefits | Non-U.S. corporate bonds | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	759	475
Qualified and Non-qualified Pension Benefits | Corporate debt securities | International
Benefit Plan Information
Total, before other items to reconcile	1,611	1,058
Qualified and Non-qualified Pension Benefits | Corporate debt securities | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	3	56
Qualified and Non-qualified Pension Benefits | Corporate debt securities | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	1,599	993
Qualified and Non-qualified Pension Benefits | Corporate debt securities | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	9	9
Qualified and Non-qualified Pension Benefits | Other | United States
Benefit Plan Information
Total, before other items to reconcile		9
Qualified and Non-qualified Pension Benefits | Derivative instruments | United States
Benefit Plan Information
Total, before other items to reconcile	104	113
Qualified and Non-qualified Pension Benefits | Derivative instruments | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	(5)	2
Qualified and Non-qualified Pension Benefits | Derivative instruments | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	109	111
Qualified and Non-qualified Pension Benefits | Fixed income securities valued at net asset value | International
Benefit Plan Information
Total, before other items to reconcile	449	961
Qualified and Non-qualified Pension Benefits | Private equity | United States
Benefit Plan Information
Total, before other items to reconcile	1,945	2,109
Qualified and Non-qualified Pension Benefits | Private equity | International
Benefit Plan Information
Total, before other items to reconcile	338	210
Qualified and Non-qualified Pension Benefits | Private equity | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	80	45
Qualified and Non-qualified Pension Benefits | Private equity | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	6	5
Qualified and Non-qualified Pension Benefits | Private equity | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	207	75
Qualified and Non-qualified Pension Benefits | Private equity | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	4	4
Qualified and Non-qualified Pension Benefits | Growth equity | United States
Benefit Plan Information
Total, before other items to reconcile	80	45
Qualified and Non-qualified Pension Benefits | Growth equity | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	80	45
Qualified and Non-qualified Pension Benefits | Real estate | International
Benefit Plan Information
Total, before other items to reconcile	217	84
Qualified and Non-qualified Pension Benefits | Real estate | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	6	5
Qualified and Non-qualified Pension Benefits | Real estate | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	207	75
Qualified and Non-qualified Pension Benefits | Real estate | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	4	4
Qualified and Non-qualified Pension Benefits | Real estate valued at net asset value | International
Benefit Plan Information
Total, before other items to reconcile	36	37
Qualified and Non-qualified Pension Benefits | Partnership investments | United States
Benefit Plan Information
Total, before other items to reconcile	1,865	2,064
Qualified and Non-qualified Pension Benefits | Partnership investments | International
Benefit Plan Information
Total, before other items to reconcile	85	89
Qualified and Non-qualified Pension Benefits | Absolute return | United States
Benefit Plan Information
Total, before other items to reconcile	2,717	2,437
Qualified and Non-qualified Pension Benefits | Absolute return | International
Benefit Plan Information
Total, before other items to reconcile	717	725
Qualified and Non-qualified Pension Benefits | Absolute return | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	1	28
Qualified and Non-qualified Pension Benefits | Absolute return | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile		1
Qualified and Non-qualified Pension Benefits | Absolute return | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	117	114
Qualified and Non-qualified Pension Benefits | Absolute return | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	3	34
Qualified and Non-qualified Pension Benefits | Absolute return | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	518	504
Qualified and Non-qualified Pension Benefits | Insurance | International
Benefit Plan Information
Total, before other items to reconcile	513	496
Qualified and Non-qualified Pension Benefits | Insurance | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	513	496
Qualified and Non-qualified Pension Benefits | Hedge fund/fund of funds | United States
Benefit Plan Information
Total, before other items to reconcile	2,010	1,866
Qualified and Non-qualified Pension Benefits | Fixed income and other | United States
Benefit Plan Information
Total, before other items to reconcile	118	142
Qualified and Non-qualified Pension Benefits | Fixed income and other | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	1	28
Qualified and Non-qualified Pension Benefits | Fixed income and other | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	117	114
Qualified and Non-qualified Pension Benefits | Partnership investments - absolute return | United States
Benefit Plan Information
Total, before other items to reconcile	589	429
Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | International
Benefit Plan Information
Total, before other items to reconcile	3	2
Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile		1
Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	3	1
Qualified and Non-qualified Pension Benefits | Other | International
Benefit Plan Information
Total, before other items to reconcile	5	41
Qualified and Non-qualified Pension Benefits | Other | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile		33
Qualified and Non-qualified Pension Benefits | Other | Level 3 | International
Benefit Plan Information
Total, before other items to reconcile	5	8
Qualified and Non-qualified Pension Benefits | Other valued at net asset value | International
Benefit Plan Information
Total, before other items to reconcile	1
Qualified and Non-qualified Pension Benefits | Hedge funds | International
Benefit Plan Information
Total, before other items to reconcile	195	186
Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | United States
Benefit Plan Information
Total, before other items to reconcile	504	1,285
Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | International
Benefit Plan Information
Total, before other items to reconcile	134	94
Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	20	412
Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	94	71
Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	4	3
Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	39	22
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | United States
Benefit Plan Information
Total, before other items to reconcile	25	416
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | International
Benefit Plan Information
Total, before other items to reconcile	133	93
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 1 | United States
Benefit Plan Information
Total, before other items to reconcile	20	412
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 1 | International
Benefit Plan Information
Total, before other items to reconcile	94	71
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	5	4
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 2 | International
Benefit Plan Information
Total, before other items to reconcile	39	22
Qualified and Non-qualified Pension Benefits | Repurchase Agreements And Derivative Margin Activity | United States
Benefit Plan Information
Total, before other items to reconcile	(1)	(1)
Qualified and Non-qualified Pension Benefits | Repurchase Agreements And Derivative Margin Activity | Level 2 | United States
Benefit Plan Information
Total, before other items to reconcile	(1)	(1)
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents valued at net asset value | United States
Benefit Plan Information
Total, before other items to reconcile	480	870
Qualified and Non-qualified Pension Benefits | Cash and cash equivalents valued at net asset value | International
Benefit Plan Information
Total, before other items to reconcile	1	1
Postretirement Benefits
Benefit Plan Information
Total, before other items to reconcile	1,361	1,272
Other items to reconcile to fair value of plan assets	(23)	(12)
Fair value of plan assets	$ 1,338	1,260	$ 1,397
Percentage of plan assets within 401h account	50.00%
Postretirement Benefits | Level 1
Benefit Plan Information
Total, before other items to reconcile	$ 587	576
Postretirement Benefits | Level 2
Benefit Plan Information
Total, before other items to reconcile	508	426
Postretirement Benefits | Global equity
Benefit Plan Information
Total, before other items to reconcile	447	448
Postretirement Benefits | Global equity | Level 1
Benefit Plan Information
Total, before other items to reconcile	414	414
Postretirement Benefits | U.S. equities
Benefit Plan Information
Total, before other items to reconcile	337	356
Postretirement Benefits | U.S. equities | Level 1
Benefit Plan Information
Total, before other items to reconcile	337	356
Postretirement Benefits | Non-U.S. equities
Benefit Plan Information
Total, before other items to reconcile	77	58
Postretirement Benefits | Non-U.S. equities | Level 1
Benefit Plan Information
Total, before other items to reconcile	77	58
Postretirement Benefits | Index and long/short equity
Benefit Plan Information
Total, before other items to reconcile	33	34
Postretirement Benefits | Fixed income
Benefit Plan Information
Total, before other items to reconcile	638	528
Postretirement Benefits | Fixed income | Level 1
Benefit Plan Information
Total, before other items to reconcile	136	112
Postretirement Benefits | Fixed income | Level 2
Benefit Plan Information
Total, before other items to reconcile	502	416
Postretirement Benefits | U.S. government securities
Benefit Plan Information
Total, before other items to reconcile	378	325
Postretirement Benefits | U.S. government securities | Level 1
Benefit Plan Information
Total, before other items to reconcile	136	112
Postretirement Benefits | U.S. government securities | Level 2
Benefit Plan Information
Total, before other items to reconcile	242	213
Postretirement Benefits | Foreign government agency securities
Benefit Plan Information
Total, before other items to reconcile	6	4
Postretirement Benefits | Foreign government agency securities | Level 2
Benefit Plan Information
Total, before other items to reconcile	6	4
Postretirement Benefits | U.S. corporate bonds
Benefit Plan Information
Total, before other items to reconcile	203	162
Postretirement Benefits | U.S. corporate bonds | Level 2
Benefit Plan Information
Total, before other items to reconcile	203	162
Postretirement Benefits | Non-U.S. corporate bonds
Benefit Plan Information
Total, before other items to reconcile	46	32
Postretirement Benefits | Non-U.S. corporate bonds | Level 2
Benefit Plan Information
Total, before other items to reconcile	46	32
Postretirement Benefits | Derivative instruments
Benefit Plan Information
Total, before other items to reconcile	5	5
Postretirement Benefits | Derivative instruments | Level 2
Benefit Plan Information
Total, before other items to reconcile	5	5
Postretirement Benefits | Private equity
Benefit Plan Information
Total, before other items to reconcile	96	103
Postretirement Benefits | Private equity | Level 1
Benefit Plan Information
Total, before other items to reconcile	4	2
Postretirement Benefits | Growth equity
Benefit Plan Information
Total, before other items to reconcile	4	2
Postretirement Benefits | Growth equity | Level 1
Benefit Plan Information
Total, before other items to reconcile	4	2
Postretirement Benefits | Partnership investments
Benefit Plan Information
Total, before other items to reconcile	92	101
Postretirement Benefits | Absolute return
Benefit Plan Information
Total, before other items to reconcile	124	104
Postretirement Benefits | Absolute return | Level 1
Benefit Plan Information
Total, before other items to reconcile		1
Postretirement Benefits | Absolute return | Level 2
Benefit Plan Information
Total, before other items to reconcile	5	5
Postretirement Benefits | Hedge fund/fund of funds
Benefit Plan Information
Total, before other items to reconcile	92	80
Postretirement Benefits | Fixed income and other
Benefit Plan Information
Total, before other items to reconcile	5	6
Postretirement Benefits | Fixed income and other | Level 1
Benefit Plan Information
Total, before other items to reconcile		1
Postretirement Benefits | Fixed income and other | Level 2
Benefit Plan Information
Total, before other items to reconcile	5	5
Postretirement Benefits | Partnership investments - absolute return
Benefit Plan Information
Total, before other items to reconcile	27	18
Postretirement Benefits | Cash and Cash Equivalent
Benefit Plan Information
Total, before other items to reconcile	56	89
Postretirement Benefits | Cash and Cash Equivalent | Level 1
Benefit Plan Information
Total, before other items to reconcile	33	47
Postretirement Benefits | Cash and Cash Equivalent | Level 2
Benefit Plan Information
Total, before other items to reconcile	1	5
Postretirement Benefits | Cash and cash equivalents
Benefit Plan Information
Total, before other items to reconcile	34	52
Postretirement Benefits | Cash and cash equivalents | Level 1
Benefit Plan Information
Total, before other items to reconcile	33	47
Postretirement Benefits | Cash and cash equivalents | Level 2
Benefit Plan Information
Total, before other items to reconcile	1	5
Postretirement Benefits | Cash and cash equivalents valued at net asset value
Benefit Plan Information
Total, before other items to reconcile	$ 22	$ 37

XML

Pension and Postretirement Benefit Plans - Change in Benefit Obligation and Plan Assets and Amounts Recognized in Balance Sheet and AOCI (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Amounts recognized in the Consolidated Balance Sheet
Non-current assets	$ 230	$ 230	$ 208
Accrued benefit cost
Current liabilities	(67)	(67)	(76)
Non-current liabilities	(3,911)	(3,911)	(2,987)
Funded | Qualified and Non-qualified Pension Benefits
Change in benefit obligation
Settlements, curtailments, special termination benefits and other	32
Change in plan assets
Company contributions		207	366
Funded | Postretirement Benefits
Change in benefit obligation
Benefit obligation at beginning of year		2,175	2,410
Service cost		43	52	$ 52
Interest cost		82	79	80
Foreign exchange rate changes			(13)
Plan amendments		(171)
Actuarial (gain) loss		225	(244)
Benefit payments		(112)	(109)
Benefit obligation at end of year	2,242	2,242	2,175	2,410
Change in plan assets
Fair value, beginning balance		1,260	1,397
Actual return on plan assets		187	(32)
Company contributions		3	4
Benefit payments		(112)	(109)
Fair value, ending balance	1,338	1,338	1,260	1,397
Funded status at end of year	(904)	(904)	(915)
Accrued benefit cost
Current liabilities	(4)	(4)	(3)
Non-current liabilities	(900)	(900)	(912)
Ending balance	(904)	(904)	(915)
Amounts recognized in accumulated other comprehensive income
Net actuarial loss (gain)	663	663	584
Prior service cost (credit)	(262)	(262)	(123)
Ending balance	401	401	461
Funded | United States | Qualified and Non-qualified Pension Benefits
Change in benefit obligation
Benefit obligation at beginning of year		15,948	17,360
Service cost		251	288	268
Interest cost		620	563	565
Actuarial (gain) loss		2,209	(1,226)
Benefit payments		(1,128)	(1,034)
Settlements, curtailments, special termination benefits and other	32	35	(3)
Benefit obligation at end of year	17,935	17,935	15,948	17,360
Change in plan assets
Fair value, beginning balance		14,803	15,686
Acquisitions/Transfers			(4)
Actual return on plan assets		2,323	(95)
Company contributions		101	254
Benefit payments		(1,128)	(1,034)
Settlements, curtailments, special termination benefits and other			(4)
Fair value, ending balance	16,099	16,099	14,803	15,686
Funded status at end of year	(1,836)	(1,836)	(1,145)
Accrued benefit cost
Current liabilities	(48)	(48)	(60)
Non-current liabilities	(1,788)	(1,788)	(1,085)
Ending balance	(1,836)	(1,836)	(1,145)
Amounts recognized in accumulated other comprehensive income
Net actuarial loss (gain)	5,899	5,899	5,374
Prior service cost (credit)	(128)	(128)	(152)
Ending balance	5,771	5,771	5,222
Accumulated benefit obligations in excess of plan assets
Projected benefit obligation	17,935	17,935	593
Accumulated benefit obligation	17,125	17,125	521
Fair value of plan assets	16,099	16,099	9
Total Accumulated Benefit Obligation	17,125	17,125	15,033
Funded | International | Qualified and Non-qualified Pension Benefits
Change in benefit obligation
Benefit obligation at beginning of year		6,965	7,502
Acquisitions/Transfers		9	(11)
Service cost		131	143	142
Interest cost		156	157	157
Participant contributions		7	9
Foreign exchange rate changes		55	(387)
Plan amendments		3	7
Actuarial (gain) loss		906	(144)
Benefit payments		(302)	(304)
Settlements, curtailments, special termination benefits and other		1	(7)
Benefit obligation at end of year	7,931	7,931	6,965	7,502
Change in plan assets
Fair value, beginning balance		6,170	6,737
Acquisitions/Transfers		4
Actual return on plan assets		858	(38)
Company contributions		106	112
Participant contributions		7	9
Foreign exchange rate changes		80	(346)
Benefit payments		(302)	(304)
Fair value, ending balance	6,923	6,923	6,170	$ 6,737
Funded status at end of year	(1,008)	(1,008)	(795)
Amounts recognized in the Consolidated Balance Sheet
Non-current assets	230	230	208
Accrued benefit cost
Current liabilities	(15)	(15)	(13)
Non-current liabilities	(1,223)	(1,223)	(990)
Ending balance	(1,008)	(1,008)	(795)
Amounts recognized in accumulated other comprehensive income
Net transition obligation (asset)	10	10
Net actuarial loss (gain)	1,967	1,967	1,713
Prior service cost (credit)	(5)	(5)	(20)
Ending balance	1,972	1,972	1,693
Accumulated benefit obligations in excess of plan assets
Projected benefit obligation	2,986	2,986	2,613
Accumulated benefit obligation	2,752	2,752	2,415
Fair value of plan assets	1,778	1,778	1,633
Total Accumulated Benefit Obligation	$ 7,355	$ 7,355	$ 6,438

XML

Pension and Postretirement Benefit Plans - Narrative (Details)	1 Months Ended	3 Months Ended		12 Months Ended
	May 31, 2019 USD ($) person item	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Benefit Plan Information
Defined benefit pension and postretirement plans adjustment				$ 560,000,000	$ (444,000,000)	$ (52,000,000)
Qualified and Non-qualified Pension Benefits | Funded
Benefit Plan Information
Company contributions year to date				207,000,000	366,000,000
Pension settlement charge		$ 32,000,000
Qualified and Non-qualified Pension Benefits | United States | Funded
Benefit Plan Information
Company contributions year to date				101,000,000	254,000,000
Pension settlement charge		$ 32,000,000		35,000,000	(3,000,000)
Special termination benefits - number of additional years of pension service | item	1
Special termination benefits - number of additional years of age for certain benefit calculations | item	1
Special termination benefits - number of participants | person	800
Special termination benefits charge			$ 35,000,000
Qualified and Non-qualified Pension Benefits | International | Funded
Benefit Plan Information
Company contributions year to date				106,000,000	112,000,000
Pension settlement charge				1,000,000	(7,000,000)
Postretirement Benefits | Funded
Benefit Plan Information
Company contributions year to date				3,000,000	4,000,000
Maximum life insurance and death benefit to be paid under the modified 3M Retiree Life Insurance Plan postretirement benefit	$ 8,000
Defined benefit pension and postretirement plans adjustment			$ 150,000,000
Total Accumulated Other Comprehensive Income (Loss)
Benefit Plan Information
Defined benefit pension and postretirement plans adjustment				$ 560,000,000	$ (444,000,000)	$ (52,000,000)

XML

Restructuring Actions (Details) $ in Millions	3 Months Ended					12 Months Ended
	Dec. 31, 2019 USD ($) person	Jun. 30, 2019 USD ($) person	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($) individual	Jun. 30, 2017 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
2019 Restructuring Actions
Restructuring Cost and Reserve
Restructuring and related cost, number of positions affected | person	1,500	2,000
Restructuring charges	$ 134	$ 148
Operating restructuring charges						$ 246
Total income before income taxes impact						282
2019 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Operating restructuring charges						206
2019 Restructuring Actions | Asset-Related
Restructuring Cost and Reserve
Operating restructuring charges						40
2019 Restructuring Actions | Cost of sales
Restructuring Cost and Reserve
Restructuring charges						72
2019 Restructuring Actions | Selling, general and administrative expenses
Restructuring Cost and Reserve
Restructuring charges						137
2019 Restructuring Actions | Research, development and related expenses
Restructuring Cost and Reserve
Restructuring charges						37
2019 Restructuring Actions | Other expense (income), net
Restructuring Cost and Reserve
Restructuring charges						36
2018 Restructuring Actions
Restructuring Cost and Reserve
Restructuring and related cost, number of positions affected | individual				1,200
Restructuring charges			$ 22	$ 105			$ 137
Adjustments for reductions in cost estimates			$ 10
2018 Restructuring Actions | Cost of sales
Restructuring Cost and Reserve
Restructuring charges							27
2018 Restructuring Actions | Selling, general and administrative expenses
Restructuring Cost and Reserve
Restructuring charges							105
2018 Restructuring Actions | Research, development and related expenses
Restructuring Cost and Reserve
Restructuring charges							$ 5
2017 Restructuring Actions
Restructuring Cost and Reserve
Restructuring and related cost, number of positions affected | item					1,300
Pre-tax charge related to exit activities					$ 99
2017 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Restructuring charges					99
2017 Restructuring Actions | Cost of sales
Restructuring Cost and Reserve
Pre-tax charge related to exit activities					86
2017 Restructuring Actions | Selling, general and administrative expenses
Restructuring Cost and Reserve
Pre-tax charge related to exit activities					5
2017 Restructuring Actions | Research, development and related expenses
Restructuring Cost and Reserve
Pre-tax charge related to exit activities					8
Corporate and Unallocated | 2019 Restructuring Actions
Restructuring Cost and Reserve
Operating restructuring charges						140
Corporate and Unallocated | 2019 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Operating restructuring charges						100
Corporate and Unallocated | 2019 Restructuring Actions | Asset-Related
Restructuring Cost and Reserve
Operating restructuring charges						40
Corporate and Unallocated | 2017 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Restructuring charges					6
Safety and Industrial | 2019 Restructuring Actions
Restructuring Cost and Reserve
Operating restructuring charges						50
Safety and Industrial | 2019 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Operating restructuring charges						50
Safety and Industrial | 2017 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Restructuring charges					45
Transportation and Electronics | 2019 Restructuring Actions
Restructuring Cost and Reserve
Operating restructuring charges						31
Transportation and Electronics | 2019 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Operating restructuring charges						31
Transportation and Electronics | 2017 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Restructuring charges					10
Health Care | 2019 Restructuring Actions
Restructuring Cost and Reserve
Operating restructuring charges						17
Health Care | 2019 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Operating restructuring charges						17
Health Care | 2017 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Restructuring charges					2
Consumer | 2019 Restructuring Actions
Restructuring Cost and Reserve
Operating restructuring charges						8
Consumer | 2019 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Operating restructuring charges						$ 8
Consumer | 2017 Restructuring Actions | Employee-Related
Restructuring Cost and Reserve
Restructuring charges					$ 36

XML

Long-Term Debt and Short-Term Borrowings - Long-Term Debt (Details) € in Millions, $ in Millions	Dec. 31, 2019 EUR (€)	Dec. 31, 2019 USD ($)	Aug. 31, 2019 USD ($)	Feb. 28, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Oct. 31, 2017 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2004 USD ($)
Long-Term Debt
Total long-term debt		$ 19,359			$ 14,156
Long-term debt (excluding current portion)		17,518			13,411
Floating rate medium term note due 2019
Long-Term Debt
Total long-term debt					596
Fixed rate medium term note due 2019
Long-Term Debt
Principal amount								$ 625
Total long-term debt					25
Third lien senior secured notes subject to in-substance
Long-Term Debt
Principal amount		$ 445
Interest rate - effective	12.50%	12.50%
Total long-term debt		$ 463
Floating rate Euro medium term note due 2020
Long-Term Debt
Principal amount | €	€ 650
Total long-term debt		726			743
Floating rate medium term note due 2020
Long-Term Debt
Principal amount		$ 300
Interest rate - effective	2.16%	2.16%
Total long-term debt		$ 299			294
Floating rate medium term note due 2020
Long-Term Debt
Principal amount		$ 200
Interest rate - effective	1.98%	1.98%
Total long-term debt		$ 200			197
Floating rate Eurobond due 2021
Long-Term Debt
Principal amount | €	€ 300
Total long-term debt		$ 346			357
Fixed rate Eurobond due 2021
Long-Term Debt
Principal amount | €	€ 300
Interest rate - effective	1.97%	1.97%
Total long-term debt		$ 334			341
Fixed rate medium term note due 2021
Long-Term Debt
Principal amount		$ 600
Interest rate - effective	1.63%	1.63%
Total long-term debt		$ 599			599
Fixed rate medium term note due 2021
Long-Term Debt
Principal amount		$ 200
Interest rate - effective	3.07%	3.07%
Total long-term debt		$ 199			199
Floating rate medium term notes due 2021
Long-Term Debt
Principal amount		$ 200
Interest rate - effective	1.90%	1.90%
Total long-term debt		$ 204			201
Fixed rate Euro medium term note due 2022
Long-Term Debt
Principal amount | €	€ 500
Interest rate - effective	0.45%	0.45%
Total long-term debt		$ 557			570
Fixed rate medium term note due 2022
Long-Term Debt
Principal amount		$ 600		$ 450
Interest rate - effective	2.17%	2.17%		2.75%
Total long-term debt		$ 597			596
Fixed rate medium term note due 2022
Long-Term Debt
Principal amount		$ 450
Interest rate - effective	2.76%	2.76%
Total long-term debt		$ 449
Fixed rate Euro medium term note due 2023
Long-Term Debt
Principal amount | €	€ 600
Interest rate - effective	1.14%	1.14%
Total long-term debt		$ 665			680
Fixed rate medium term notes due 2023
Long-Term Debt
Principal amount		$ 650					$ 650
Interest rate - effective	2.26%	2.26%					2.25%
Total long-term debt		$ 648			648
Fixed rate registered note due 2023
Long-Term Debt
Principal amount		$ 500	$ 500
Interest rate - effective	1.86%	1.86%	1.75%
Total long-term debt		$ 497
Floating rate medium term notes due 2024
Long-Term Debt
Principal amount		$ 300				$ 300
Interest rate - effective	2.21%	2.21%
Total long-term debt		$ 299			299
Fixed rate medium term notes due 2024
Long-Term Debt
Principal amount		$ 300				$ 300
Interest rate - effective	3.30%	3.30%				3.25%
Total long-term debt		$ 299			298
Fixed rate medium term notes due 2024
Long-Term Debt
Principal amount		$ 500		$ 500
Interest rate - effective	2.98%	2.98%		3.25%
Total long-term debt		$ 503
Fixed rate medium term note due 2025
Long-Term Debt
Principal amount		$ 550
Interest rate - effective	3.04%	3.04%
Total long-term debt		$ 547			547
Fixed rate registered note due 2025
Long-Term Debt
Principal amount		$ 750	$ 750
Interest rate - effective	2.12%	2.12%	2.00%
Total long-term debt		$ 743
Fixed rate Euro medium term note due 2026
Long-Term Debt
Principal amount | €	€ 750
Interest rate - effective	1.66%	1.66%
Total long-term debt		$ 826			844
Fixed rate medium term notes due 2026
Long-Term Debt
Principal amount		$ 650
Interest rate - effective	2.37%	2.37%
Total long-term debt		$ 643			642
Fixed rate medium term notes due 2027
Long-Term Debt
Principal amount		$ 850					$ 850
Interest rate - effective	2.95%	2.95%					2.875%
Total long-term debt		$ 842			841
Fixed rate 30-year debenture due 2028
Long-Term Debt
Principal amount		$ 220
Interest rate - effective	6.44%	6.44%
Total long-term debt		$ 226			226
Fixed rate medium term notes due 2028
Long-Term Debt
Principal amount		$ 600				$ 600
Interest rate - effective	3.62%	3.62%				3.625%
Total long-term debt		$ 597			597
Fixed rate medium term notes due 2029
Long-Term Debt
Principal amount		$ 800		$ 800
Interest rate - effective	3.38%	3.38%		3.375%
Total long-term debt		$ 796
Fixed rate registered note due 2029
Long-Term Debt
Principal amount		$ 1,000	$ 1,000
Interest rate - effective	2.50%	2.50%	2.375%
Total long-term debt		$ 984
Fixed rate Euro medium term note due 2030
Long-Term Debt
Principal amount | €	€ 500
Interest rate - effective	1.90%	1.90%
Total long-term debt		$ 549			562
Fixed rate Euro medium term notes due 2031
Long-Term Debt
Principal amount | €	€ 500
Interest rate - effective	1.54%	1.54%
Total long-term debt		$ 554			567
Fixed rate 30-year bond due 2037
Long-Term Debt
Principal amount		$ 555
Interest rate - effective	5.73%	5.73%
Total long-term debt		$ 551			551
Floating rate note due 2041
Long-Term Debt
Principal amount		$ 96
Interest rate - effective	1.58%	1.58%
Total long-term debt		$ 96			95
Fixed rate medium term note due 2044
Long-Term Debt
Principal amount		$ 325
Interest rate - effective	4.05%	4.05%
Total long-term debt		$ 314			314
Floating rate note due 2044
Long-Term Debt
Principal amount		$ 55							$ 60
Interest rate - effective	1.54%	1.54%
Total long-term debt		$ 53			53
Fixed rate medium term note due 2046
Long-Term Debt
Principal amount		$ 500
Interest rate - effective	3.37%	3.37%
Total long-term debt		$ 475			474
Fixed rate medium term note due 2047
Long-Term Debt
Principal amount		$ 500					$ 500
Interest rate - effective	3.68%	3.68%					3.625%
Total long-term debt		$ 492			491
Fixed rate medium term note due 2048
Long-Term Debt
Principal amount		$ 650				$ 650
Interest rate - effective	4.07%	4.07%				4.00%
Total long-term debt		$ 637			637
Fixed rate medium term note due 2048
Long-Term Debt
Principal amount		$ 500		$ 500
Interest rate - effective	3.78%	3.78%		4.00%
Total long-term debt		$ 506
Fixed rate registered note due 2049
Long-Term Debt
Principal amount		$ 1,000	$ 1,000
Interest rate - effective	3.37%	3.37%	3.25%
Total long-term debt		$ 968
Other borrowings
Long-Term Debt
Interest rate - effective	1.63%	1.63%
Total long-term debt		$ 76			72
The five-year credit facility and the 364-day credit facilities.
Long-Term Debt
Principal amount		$ 3,000
Current portion of long-term debt
Long-Term Debt
Interest rate - effective	3.85%	3.85%
Total long-term debt		$ 1,841			$ 745

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Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Millions	Jan. 01, 2019	Dec. 31, 2019	Jan. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle
Stockholders' equity		$ 10,063		$ 9,796
Lease assets		858
Lease liabilities		854
ASU 2016-02 Leases
New Accounting Pronouncements or Change in Accounting Principle
Lease assets			$ 800
Lease liabilities			800
Cumulative effect of new accounting principle in period of adoption		14	$ 14
ASU 2016-02 Leases | Adjustment
New Accounting Pronouncements or Change in Accounting Principle
Lease assets	$ 800
Lease liabilities	800
Retained Earnings | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
New Accounting Pronouncements or Change in Accounting Principle
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect	900
Cumulative effect of new accounting principle in period of adoption	900	853
Retained Earnings | ASU 2016-02 Leases
New Accounting Pronouncements or Change in Accounting Principle
Cumulative effect of new accounting principle in period of adoption		14
Retained Earnings | ASU 2016-02 Leases | Adjustment
New Accounting Pronouncements or Change in Accounting Principle
Stockholders' equity	14
Total Accumulated Other Comprehensive Income (Loss)
New Accounting Pronouncements or Change in Accounting Principle
Stockholders' equity		(8,139)		$ (6,866)	$ (7,026)	$ (7,245)
Total Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
New Accounting Pronouncements or Change in Accounting Principle
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect	900
Cumulative effect of new accounting principle in period of adoption	$ 900	$ (853)

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Acquisitions and Divestitures - Divestitures (Details) $ in Millions	1 Months Ended										3 Months Ended	12 Months Ended
	Dec. 31, 2019 USD ($)	Aug. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	May 31, 2018 USD ($)	Feb. 28, 2018 USD ($)	Oct. 31, 2017 USD ($)	Jun. 30, 2017 USD ($) item	May 31, 2017 USD ($)	Jan. 31, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Divestiture Information
Proceeds from sale of businesses												$ 236	$ 846	$ 1,065
Disposal Group, Held-for-sale, Not Discontinued Operations
Divestiture Information
Disposal - Inventory	$ 70											70
Disposal - Property, plant and equipment	150											150
Disposal - Intangible assets	35											35
Disposal - Goodwill	30											30
Aggregate operating income of divested businesses												$ 40	$ 85	$ 115
Identity Management Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business									$ 205
Safety Prescription Eyewear Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business										$ 45
Pre-tax gain on sale											$ 29
Identity Management and Tolling and Automated License Number Plate Recognition Business in Aggregate | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Number of businesses sold | item								2
Proceeds from divested businesses								$ 833
Proceeds from divested businesses, net of cash sold								809
Pre-tax gain on sale								458
Tolling and Automated License Number Plate Recognition Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business								$ 40
Electronic Monitoring Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business							$ 95
Aggregate selling price relative to the divestiture transaction							201
Pre-tax gain on sale							$ 98
Communication Markets Division | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business				$ 400
Proceeds from divested businesses				772
Pre-tax gain on sale			$ 15
Estimated pre-tax gain on sale				$ 494
Personal Safety Product Offerings | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business						$ 15
Abrasives glass products business | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business					$ 10
Pre-tax gain on sale					$ 15
Gas and flame detection business | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business		$ 120
Drug delivery business | Disposal Group, Held-for-sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business	380
Proceeds from sale of businesses	650
Pre-tax gain on sale	$ 400
Noncontrolling interest in new company (as a percent)	17.00%											17.00%
Advanced ballistic protection business | Disposal Group, Held-for-sale, Not Discontinued Operations
Divestiture Information
Annual sales of divested business												$ 85
Proceeds from sale of businesses												91
Maximum contingent considerations depending on outcome of pending tenders	$ 25											$ 25
Safety and Industrial | Personal Safety Product Offerings | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Maximum
Divestiture Information
Pre-tax gain on sale						$ 20
Safety and Industrial | Gas and flame detection business | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Divestiture Information
Pre-tax gain on sale		$ 112

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Long-Term Debt and Short-Term Borrowings - Credit Facilities (Details) € in Millions, $ in Millions, ¥ in Billions	1 Months Ended	12 Months Ended
	Nov. 30, 2019 EUR (€)	Dec. 31, 2019 EUR (€)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 JPY (¥)	Nov. 30, 2019 USD ($)	Sep. 30, 2019 JPY (¥)
The five-year credit facility and the 364-day credit facilities.
Debt instrument
Principal amount			$ 3,000
Term of debt instrument	5 years	5 years	5 years	5 years
Credit facility amount prior to new agreement					$ 3,750
Current borrowing capacity			$ 3,000
Maximum increase available subject to lender approval			1,000
Maximum borrowing capacity including portion subject to lender approval			4,000
364-day credit facility
Debt instrument
Principal amount			$ 1,250
Term of debt instrument		364 days	364 days	364 days
Current borrowing capacity			$ 1,250
Stand alone letters of credit and bank guarantees
Debt instrument
Amount of stand alone letters of credit and bank guarantees outstanding utilized in connection with normal business activities			$ 268
EBITDA Multiple Measurement Input | The five-year credit facility and the 364-day credit facilities
Debt instrument
Required minimum EBITDA to Interest Ratio			3.0
Number of consecutive quarters over which the ratio of required EBITDA to Interest Ratio is calculated		4	4	4
Actual EBITDA to Interest Ratio		17	17	17
Japan subsidiary credit facility | Credit Facility expiring July 2020
Debt instrument
Principal amount | ¥						¥ 80
Maximum credit facility outstanding during period			$ 632	¥ 69
Germany subsidiary credit facility | Credit Facility expiring November 2020
Debt instrument
Principal amount | €	€ 150
Maximum credit facility outstanding during period		€ 150	$ 168

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Stock-Based Compensation - RSU, RS, Performance Shares (Details) - USD ($) $ / shares in Units, shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Restricted Stock and Restricted Stock Units
Unit and Shares Activity:
Number of Shares - Nonvested - Beginning balance	1,789	1,994	2,185
Number of Shares - Granted - Annual	564	467	604
Number of Shares - Granted - Other	15	8	21
Number of Shares - Vested	(732)	(640)	(769)
Number of Shares - Forfeited	(63)	(40)	(47)
Number of Shares - Nonvested - Ending balance	1,573	1,789	1,994
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
Weighted Average Grant Date Fair Value - Nonvested - Beginning balance	$ 180.02	$ 162.60	$ 145.64
Weighted Average Grant Date Fair Value - Granted - Annual	200.41	233.61	176.10
Weighted Average Grant Date Fair Value - Granted - Other	180.08	207.76	233.77
Weighted Average Grant Date Fair Value - Vested	149.33	164.83	127.21
Weighted Average Grant Date Fair Value - Forfeited	192.52	186.48	158.25
Weighted Average Grant Date Fair Value - Nonvested - Ending balance	$ 201.11	$ 180.02	$ 162.60
Compensation expense yet to be recognized	$ 72,000,000
Expense recognition period	22 months
Fair value that vested	$ 144,000,000	$ 155,000,000	$ 136,000,000
Tax benefit realized from vesting	$ 28,000,000	$ 29,000,000	$ 45,000,000
Vesting or performance period	3 years
Value of dividend equivalents for restricted stock units that are forfeited	$ 0
Impact on basic earnings per share due to restricted stock units dividends	$ 0
Performance Shares
Unit and Shares Activity:
Number of Shares - Nonvested - Beginning balance	562	686	656
Number of Shares - Granted - Annual	166	166	201
Number of Shares - Vested	(210)	(206)	(314)
Number of Shares - Performance Change	(48)	(56)	155
Number of Shares - Forfeited	(26)	(28)	(12)
Number of Shares - Nonvested - Ending balance	444	562	686
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
Weighted Average Grant Date Fair Value - Nonvested - Beginning balance	$ 188.96	$ 171.90	$ 142.98
Weighted Average Grant Date Fair Value - Granted - Annual	207.49	229.13	191.28
Weighted Average Grant Date Fair Value - Vested	162.16	159.82	124.88
Weighted Average Grant Date Fair Value - Performance Change	204.73	198.39	173.91
Weighted Average Grant Date Fair Value - Forfeited	209.96	204.09	171.36
Weighted Average Grant Date Fair Value - Nonvested - Ending balance	$ 205.58	$ 188.96	$ 171.90
Compensation expense yet to be recognized	$ 16,000,000
Expense recognition period	20 months
Fair value that vested	$ 45,000,000	$ 48,000,000	$ 55,000,000
Tax benefit realized from vesting	$ 9,000,000	$ 11,000,000	$ 15,000,000
Vesting or performance period	3 years
Performance shares awarded at estimated number of shares at the end of the performance period	100.00%
Performance Shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
Expense recognition period	3 years
Number of shares to be delivered based on percent of each performance share granted upon satisfaction of performance conditions	200.00%
Performance Shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
Expense recognition period	1 year
Number of shares to be delivered based on percent of each performance share granted upon satisfaction of performance conditions	0.00%

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Leases - Disclosures related to periods prior to adoption of new lease standard minimum lease payments (Details) $ in Millions	Dec. 31, 2018 USD ($)
Minimum lease payments under capital leases
2019	$ 18
2020	16
2021	14
2022	12
2023	12
After 2023	32
Total	104
Less: Amounts representing interest	12
Present value of future minimum lease payments	92
Less: Current obligations under capital leases	17
Long-term obligations under capital leases	75
Operating Leases
2019	283
2020	208
2021	153
2022	122
2023	92
After 2023	253
Total	$ 1,111

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Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Quarterly Data (Unaudited)
Net Sales	$ 8,111	$ 7,991	$ 8,171	$ 7,863	$ 7,945	$ 8,152	$ 8,390	$ 8,278	$ 32,136	$ 32,765
Cost of sales	4,325	4,188	4,313	4,310	4,060	4,159	4,227	4,236	17,136	16,682	$ 16,055
Net income including noncontrolling interest	970	1,588	1,131	893	1,349	1,546	1,862	606	4,582	5,363	4,869
Net income attributable to 3M	$ 969	$ 1,583	$ 1,127	$ 891	$ 1,347	$ 1,543	$ 1,857	$ 602	$ 4,570	$ 5,349	$ 4,858
Earnings per share attributable to 3M common shareholders - basic (in dollars per share)	$ 1.68	$ 2.75	$ 1.95	$ 1.54	$ 2.32	$ 2.64	$ 3.14	$ 1.01	$ 7.92	$ 9.09	$ 8.13
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share)	$ 1.66	$ 2.72	$ 1.92	$ 1.51	$ 2.27	$ 2.58	$ 3.07	$ 0.98	$ 7.81	$ 8.89	$ 7.93

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Stock-Based Compensation

Stock-Based Compensation Expense

Stock-Based Compensation Expense

	Years ended December 31
(Millions)	2019		2018		2017
Cost of sales	$	47	$	48	$	49
Selling, general and administrative expenses		185		207		229
Research, development and related expenses		46		47		46
Stock-based compensation expenses	$	278	$	302	$	324
Income tax benefits		(141)		(154)		(327)
Stock-based compensation expenses (benefits), net of tax	$	137	$	148	$	(3)

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
	Number of	Average		Number of	Average		Number of	Average
(Options in thousands)	Options	Exercise Price		Options	Exercise Price		Options	Exercise Price
Under option —
January 1	34,569	$	138.98	34,965	$	125.73	36,196	$	112.07
Granted:
Annual	3,434		200.80	3,211		233.19	5,410		175.93
Exercised	(4,193)		89.89	(3,482)		91.01	(6,474)		90.37
Forfeited	(135)		201.27	(125)		188.00	(167)		162.36
December 31	33,675	$	151.15	34,569	$	138.98	34,965	$	125.73
Options exercisable
December 31	26,487	$	136.75	26,117	$	121.98	24,281	$	108.50

Stock Option Assumptions

Stock Option Assumptions

	Annual
	2019			2018			2017
Exercise price	$	201.12		$	233.63		$	175.76
Risk-free interest rate		2.6	%		2.7	%		2.1	%
Dividend yield		2.5	%		2.4	%		2.5	%
Expected volatility		20.4	%		21.0	%		17.3	%
Expected life (months)		79			78			78
Black-Scholes fair value	$	34.19		$	41.59		$	23.51

Restricted Stock and Restricted Stock Units Activity

Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
		Average			Average			Average
	Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
(Shares in thousands)	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Nonvested balance —
As of January 1	1,789	$	180.02	1,994	$	162.60	2,185	$	145.64
Granted
Annual	564		200.41	467		233.61	604		176.10
Other	15		180.08	8		207.76	21		233.77
Vested	(732)		149.33	(640)		164.83	(769)		127.21
Forfeited	(63)		192.52	(40)		186.48	(47)		158.25
As of December 31	1,573	$	201.11	1,789	$	180.02	1,994	$	162.60

Performance Shares Activity

The following table summarizes performance share activity for the years ended December 31:

	2019			2018			2017
		Weighted			Weighted			Weighted
		Average			Average			Average
	Number of	Grant Date		Number of	Grant Date		Number of	Grant Date
(Shares in thousands)	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Undistributed balance —
As of January 1	562	$	188.96	686	$	171.90	656	$	142.98
Granted	166		207.49	166		229.13	201		191.28
Distributed	(210)		162.16	(206)		159.82	(314)		124.88
Performance change	(48)		204.73	(56)		198.39	155		173.91
Forfeited	(26)		209.96	(28)		204.09	(12)		171.36
As of December 31	444	$	205.58	562	$	188.96	686	$	171.90

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Pension and Postretirement Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

Defined Benefit Plans and Other Postretirement Benefit Plans

Reconciliation of the beginning and ending balances of the benefit obligation and the fair value of plan assets

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Change in benefit obligation
Benefit obligation at beginning of year	$	15,948	$	17,360	$	6,965	$	7,502	$	2,175	$	2,410
Acquisitions/Transfers		—		—		9		(11)		—		—
Service cost		251		288		131		143		43		52
Interest cost		620		563		156		157		82		79
Participant contributions		—		—		7		9		—		—
Foreign exchange rate changes		—		—		55		(387)		—		(13)
Plan amendments		—		—		3		7		(171)		—
Actuarial (gain) loss		2,209		(1,226)		906		(144)		225		(244)
Benefit payments		(1,128)		(1,034)		(302)		(304)		(112)		(109)
Settlements, curtailments, special termination benefits and other		35		(3)		1		(7)		—		—
Benefit obligation at end of year	$	17,935	$	15,948	$	7,931	$	6,965	$	2,242	$	2,175
Change in plan assets
Fair value of plan assets at beginning of year	$	14,803	$	15,686	$	6,170	$	6,737	$	1,260	$	1,397
Acquisitions/Transfers		—		(4)		4		—		—		—
Actual return on plan assets		2,323		(95)		858		(38)		187		(32)
Company contributions		101		254		106		112		3		4
Participant contributions		—		—		7		9		—		—
Foreign exchange rate changes		—		—		80		(346)		—		—
Benefit payments		(1,128)		(1,034)		(302)		(304)		(112)		(109)
Settlements, curtailments, special termination benefits and other		—		(4)		—		—		—		—
Fair value of plan assets at end of year	$	16,099	$	14,803	$	6,923	$	6,170	$	1,338	$	1,260
Funded status at end of year	$	(1,836)	$	(1,145)	$	(1,008)	$	(795)	$	(904)	$	(915)

Amounts recognized in the Consolidated Balance Sheet

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Amounts recognized in the Consolidated Balance Sheet as of Dec. 31,
Non-current assets	$	—	$	—	$	230	$	208	$	—	$	—
Accrued benefit cost
Current liabilities		(48)		(60)		(15)		(13)		(4)		(3)
Non-current liabilities		(1,788)		(1,085)		(1,223)		(990)		(900)		(912)
Ending balance	$	(1,836)	$	(1,145)	$	(1,008)	$	(795)	$	(904)	$	(915)

Amounts recognized in accumulated other comprehensive income

	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2019		2018		2019		2018		2019		2018
Amounts recognized in accumulated other comprehensive income as of Dec. 31,
Net transition obligation (asset)	$	—	$	—	$	10	$	—	$	—	$	—
Net actuarial loss (gain)		5,899		5,374		1,967		1,713		663		584
Prior service cost (credit)		(128)		(152)		(5)		(20)		(262)		(123)
Ending balance	$	5,771	$	5,222	$	1,972	$	1,693	$	401	$	461

Amounts relating to pension plans with accumulated benefit obligations in excess of plan assets

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 31:

	Qualified and Non-qualified Pension Plans
	United States				International
(Millions)	2019		2018		2019		2018
Projected benefit obligation	$	17,935	$	593	$	2,986	$	2,613
Accumulated benefit obligation		17,125		521		2,752		2,415
Fair value of plan assets		16,099		9		1,778		1,633

Components of net periodic benefit cost (benefit)

	Qualified and Non-qualified
	Pension Benefits												Postretirement
	United States						International						Benefits
(Millions)	2019		2018		2017		2019		2018		2017		2019		2018		2017
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	251	$	288	$	268	$	131	$	143	$	142	$	43	$	52	$	52
Non-operating expense
Interest cost		620		563		565		156		157		157		82		79		80
Expected return on plan assets		(1,040)		(1,087)		(1,035)		(299)		(307)		(292)		(81)		(84)		(86)
Amortization of prior service benefit		(24)		(23)		(23)		(12)		(13)		(13)		(33)		(40)		(53)
Amortization of net actuarial loss		366		503		388		78		114		126		34		61		56
Settlements, curtailments, special termination benefits and other		70		—		2		10		4		4		5		—		(4)
Total non-operating expense (benefit)		(8)		(44)		(103)		(67)		(45)		(18)		7		16		(7)
Total net periodic benefit cost (benefit)	$	243	$	244	$	165	$	64	$	98	$	124	$	50	$	68	$	45
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Prior service cost (benefit)	$	—	$	—	$	—	$	3	$	7	$	6	$	(171)	$	—	$	(1)
Amortization of prior service benefit		24		23		23		12		13		13		33		40		53
Net actuarial (gain) loss		926		(44)		607		344		194		(244)		119		(127)		69
Amortization of net actuarial loss		(366)		(503)		(388)		(78)		(114)		(126)		(34)		(61)		(56)
Foreign currency		—		—		—		7		(83)		167		(1)		(2)		—
Settlements and curtailments		(35)		—		(2)		(8)		(4)		(4)		(5)		—		—
Total recognized in other comprehensive (income) loss	$	549	$	(524)	$	240	$	280	$	13	$	(188)	$	(59)	$	(150)	$	65
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss	$	792	$	(280)	$	405	$	344	$	111	$	(64)	$	(9)	$	(82)	$	110

Weighted-average assumptions used to determine benefit obligations and net cost

Weighted-average assumptions used to determine benefit obligations as of December 31

	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount rate	3.25	%	4.36	%	3.68	%	1.81	%	2.50	%	2.41	%	3.27	%	4.41	%	3.79	%
Compensation rate increase	3.21	%	4.10	%	4.10	%	2.88	%	2.89	%	2.89	%	N/A		N/A		N/A

Weighted-average assumptions used to determine net cost for years ended December 31

	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
	2019		2018		2017		2019		2018		2017		2019		2018		2017
Discount rate - service cost	4.44	%	3.78	%	4.42	%	2.39	%	2.27	%	2.32	%	4.53	%	3.86	%	4.50	%
Discount rate - interest cost	4.02	%	3.35	%	3.61	%	2.26	%	2.14	%	2.25	%	4.15	%	3.52	%	3.80	%
Expected return on assets	7.00	%	7.25	%	7.25	%	4.90	%	5.02	%	5.16	%	6.43	%	6.53	%	6.48	%
Compensation rate increase	4.10	%	4.10	%	4.10	%	2.89	%	2.89	%	2.90	%	N/A		N/A		N/A

Estimated future pension and postretirement benefit payments

Future Pension and Postretirement Benefit Payments

The following table provides the estimated pension and postretirement benefit payments that are payable from the plans to participants.

	Qualified and Non-qualified
	Pension Benefits				Postretirement
(Millions)	United States		International		Benefits
2020 Benefit Payments	$	1,103	$	246	$	121
2021 Benefit Payments		1,096		253		128
2022 Benefit Payments		1,104		272		136
2023 Benefit Payments		1,106		284		142
2024 Benefit Payments		1,111		302		148
Next five years		5,521		1,656		789

Qualified and Non-qualified Pension Benefits | United States

Defined Benefit Plans and Other Postretirement Benefit Plans

Fair values of the assets held by the plans by asset category

The fair values of the assets held by the U.S. pension plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
U.S. equities	$	1,575	$	1,369	$	—	$	—	$	—	$	—	$	1,575	$	1,369
Non-U.S. equities		1,585		1,234		—		—		—		—		1,585		1,234
Index and long/short equity funds*														417		372
Total Equities	$	3,160	$	2,603	$	—	$	—	$	—	$	—	$	3,577	$	2,975
Fixed Income
U.S. government securities	$	2,346	$	1,889	$	916	$	732	$	—	$	—	$	3,262	$	2,621
Non-U.S. government securities		—		—		61		44		—		—		61		44
Preferred and convertible securities		—		—		52		44		—		—		52		44
U.S. corporate bonds		10		9		3,566		2,941		—		—		3,576		2,950
Non-U.S. corporate bonds		—		—		759		475		—		—		759		475
Derivative instruments		(5)		2		109		111		—		—		104		113
Other*														—		9
Total Fixed Income	$	2,351	$	1,900	$	5,463	$	4,347	$	—	$	—	$	7,814	$	6,256
Private Equity
Growth equity	$	80	$	45	$	—	$	—	$	—	$	—	$	80	$	45
Partnership investments*														1,865		2,064
Total Private Equity	$	80	$	45	$	—	$	—	$	—	$	—	$	1,945	$	2,109
Absolute Return
Fixed income and other	$	1	$	28	$	117	$	114	$	—	$	—	$	118	$	142
Hedge fund/fund of funds*														2,010		1,866
Partnership investments*														589		429
Total Absolute Return	$	1	$	28	$	117	$	114	$	—	$	—	$	2,717	$	2,437
Cash and Cash Equivalents
Cash and cash equivalents	$	20	$	412	$	5	$	4	$	—	$	—	$	25	$	416
Repurchase agreements and derivative margin activity		—		—		(1)		(1)		—		—		(1)		(1)
Cash and cash equivalents, valued at net asset value*														480		870
Total Cash and Cash Equivalents	$	20	$	412	$	4	$	3	$	—	$	—	$	504	$	1,285
Total	$	5,612	$	4,988	$	5,584	$	4,464	$	—	$	—	$	16,557	$	15,062
Other items to reconcile to fair value of plan assets													$	(458)	$	(259)
Fair value of plan assets													$	16,099	$	14,803

Qualified and Non-qualified Pension Benefits | International

Defined Benefit Plans and Other Postretirement Benefit Plans

Fair values of the assets held by the plans by asset category

The fair values of the assets held by the international pension plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
Growth equities	$	638	$	460	$	796	$	248	$	—	$	—	$	1,434	$	708
Value equities		696		446		10		42		—		—		706		488
Core equities		61		55		88		742		5		5		154		802
Equities, valued at net asset value*														18		16
Total Equities	$	1,395	$	961	$	894	$	1,032	$	5	$	5	$	2,312	$	2,014
Fixed Income
Domestic government	$	353	$	334	$	433	$	351	$	4	$	5	$	790	$	690
Foreign government		22		150		603		321		—		—		625		471
Corporate debt securities		3		56		1,599		993		9		9		1,611		1,058
Fixed income securities, valued at net asset value*														449		961
Total Fixed Income	$	378	$	540	$	2,635	$	1,665	$	13	$	14	$	3,475	$	3,180
Private Equity
Real estate	$	6	$	5	$	207	$	75	$	4	$	4	$	217	$	84
Real estate, valued at net asset value*														36		37
Partnership investments*														85		89
Total Private Equity	$	6	$	5	$	207	$	75	$	4	$	4	$	338	$	210
Absolute Return
Derivatives	$	—	$	1	$	3	$	1	$	—	$	—	$	3	$	2
Insurance		—		—		—		—		513		496		513		496
Other		—		—		—		33		5		8		5		41
Other, valued at net asset value*														1		—
Hedge funds*														195		186
Total Absolute Return	$	—	$	1	$	3	$	34	$	518	$	504	$	717	$	725
Cash and Cash Equivalents
Cash and cash equivalents	$	94	$	71	$	39	$	22	$	—	$	—	$	133	$	93
Cash and cash equivalents, valued at net asset value*														1		1
Total Cash and Cash Equivalents	$	94	$	71	$	39	$	22	$	—	$	—	$	134	$	94
Total	$	1,873	$	1,578	$	3,778	$	2,828	$	540	$	527	$	6,976	$	6,223
Other items to reconcile to fair value of plan assets													$	(53)	$	(53)
Fair value of plan assets													$	6,923	$	6,170

Postretirement Benefits

Defined Benefit Plans and Other Postretirement Benefit Plans

Fair values of the assets held by the plans by asset category

The fair values of the assets held by the postretirement benefit plans by asset class are as follows:

	Fair Value Measurements Using Inputs Considered as												Fair Value at
(Millions)	Level 1				Level 2				Level 3				Dec. 31,
Asset Class	2019		2018		2019		2018		2019		2018		2019		2018
Equities
U.S. equities	$	337	$	356	$	—	$	—	$	—	$	—	$	337	$	356
Non-U.S. equities		77		58		—		—		—		—		77		58
Index and long/short equity funds*														33		34
Total Equities	$	414	$	414	$	—	$	—	$	—	$	—	$	447	$	448
Fixed Income
U.S. government securities	$	136	$	112	$	242	$	213	$	—	$	—	$	378	$	325
Non-U.S. government securities		—		—		6		4		—		—		6		4
U.S. corporate bonds		—		—		203		162		—		—		203		162
Non-U.S. corporate bonds		—		—		46		32		—		—		46		32
Derivative instruments		—		—		5		5		—		—		5		5
Total Fixed Income	$	136	$	112	$	502	$	416	$	—	$	—	$	638	$	528
Private Equity
Growth equity	$	4	$	2	$	—	$	—	$	—	$	—	$	4	$	2
Partnership investments*														92		101
Total Private Equity	$	4	$	2	$	—	$	—	$	—	$	—	$	96	$	103
Absolute Return
Fixed income and other	$	—	$	1	$	5	$	5	$	—	$	—	$	5	$	6
Hedge fund/fund of funds*														92		80
Partnership investments*														27		18
Total Absolute Return	$	—	$	1	$	5	$	5	$	—	$	—	$	124	$	104
Cash and Cash Equivalents
Cash and cash equivalents	$	33	$	47	$	1	$	5	$	—	$	—	$	34	$	52
Repurchase agreements and derivative margin activity		—		—		—		—		—		—		—		—
Cash and cash equivalents, valued at net asset value*														22		37
Total Cash and Cash Equivalents	$	33	$	47	$	1	$	5	$	—	$	—	$	56	$	89
Total	$	587	$	576	$	508	$	426	$	—	$	—	$	1,361	$	1,272
Other items to reconcile to fair value of plan assets													$	(23)	$	(12)
Fair value of plan assets													$	1,338	$	1,260

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Income Taxes - Reconciliation of unrecognized tax benefits (UTB) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Federal, State and Foreign Tax
Gross UTB Balance at January 1	$ 647	$ 530	$ 319
Additions based on tax positions related to the current year	76	129	119
Additions for tax positions of prior years	132	146	149
Additions related to recent acquisitions	396
Reductions for tax positions of prior years	(56)	(123)	(38)
Settlements (UTB decreases)	(4)	(17)	(3)
Reductions due to lapse of applicable statute of limitations	(24)	(18)	(16)
Gross UTB Balance at December 31	$ 1,167	$ 647	$ 530

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Supplemental Equity and Comprehensive Income Information - AOCI rf (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2019
AOCI Attributable to 3M, Net of Tax Roll Forward
Stockholders' Equity Attributable to 3M, Beginning Balance	$ 9,796
Other comprehensive income (loss), before tax:
Stockholders' Equity Attributable to 3M, Ending Balance	10,063	$ 9,796
Cumulative Translation Adjustment
AOCI Attributable to 3M, Net of Tax Roll Forward
Stockholders' Equity Attributable to 3M, Beginning Balance	(2,098)	(1,638)	$ (2,008)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	102	(414)	91
Amounts reclassified out	142
Total other comprehensive income (loss), before tax	244	(414)	91
Tax effect	(32)	(47)	279
Total other comprehensive income (loss), net of tax	212	(461)	370
Transfer of ownership involving non-wholly owned subsidiaries		1
Stockholders' Equity Attributable to 3M, Ending Balance	(1,899)	(2,098)	(1,638)
Cumulative Translation Adjustment | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
AOCI Attributable to 3M, Net of Tax Roll Forward
Impact of ASUs	(13)
Defined Pension and Postretirement Plans Adjustment
AOCI Attributable to 3M, Net of Tax Roll Forward
Stockholders' Equity Attributable to 3M, Beginning Balance	(4,832)	(5,276)	(5,328)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(1,227)	55	(604)
Amounts reclassified out	459	606	487
Total other comprehensive income (loss), before tax	(768)	661	(117)
Tax effect	208	(217)	169
Total other comprehensive income (loss), net of tax	(560)	444	52
Stockholders' Equity Attributable to 3M, Ending Balance	(6,209)	(4,832)	(5,276)
Defined Pension and Postretirement Plans Adjustment | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
AOCI Attributable to 3M, Net of Tax Roll Forward
Impact of ASUs	(817)
Cash Flow Hedging Instruments, Unrealized Gain (Loss)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(26)
Amounts reclassified out	(70)
Total other comprehensive income (loss), before tax	(96)
Tax effect	24
Total other comprehensive income (loss), net of tax	(72)
Stockholders' Equity Attributable to 3M, Ending Balance	(31)
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
AOCI Attributable to 3M, Net of Tax Roll Forward
Impact of ASUs	(23)
Cash Flow Hedging Instruments, Unrealized Gain (Loss)
AOCI Attributable to 3M, Net of Tax Roll Forward
Stockholders' Equity Attributable to 3M, Beginning Balance	64	(112)	91
Other comprehensive income (loss), before tax:
Amounts before reclassifications		133	(311)
Amounts reclassified out		96	(7)
Total other comprehensive income (loss), before tax		229	(318)
Tax effect		(53)	115
Total other comprehensive income (loss), net of tax		176	(203)
Stockholders' Equity Attributable to 3M, Ending Balance		64	(112)
Total Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to 3M, Net of Tax Roll Forward
Stockholders' Equity Attributable to 3M, Beginning Balance	(6,866)	(7,026)	(7,245)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(1,151)	(226)	(824)
Amounts reclassified out	531	702	480
Total other comprehensive income (loss), before tax	(620)	476	(344)
Tax effect	200	(317)	563
Total other comprehensive income (loss), net of tax	(420)	159	219
Transfer of ownership involving non-wholly owned subsidiaries		1
Stockholders' Equity Attributable to 3M, Ending Balance	(8,139)	$ (6,866)	$ (7,026)
Total Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
AOCI Attributable to 3M, Net of Tax Roll Forward
Impact of ASUs	$ (853)			$ 900

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Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Other current assets
Derivative assets-current	$ 75	$ 88
Held-to-maturity debt security held in trust	470
Insurance related (receivables, prepaid expenses and other)	172	103
Other	174	158
Total other current assets	891	349
Other assets
Deferred income taxes	521	365
Prepaid pension and post retirement	230	208
Insurance related receivables and other	67	68
Cash surrender value of life insurance policies	254	251
Equity method investments	70	70
Equity and other investments	126	118
Other	406	265
Total other assets	1,674	1,345
Other current liabilities
Accrued trade payables	594	558
Deferred revenue	430	617
Derivative liabilities	17	32
Employee benefits and withholdings	229	228
Contingent liability claims and other	566	244
Property, sales-related and other taxes	247	273
Pension and postretirement benefits	67	76
Other	906	747
Total other current liabilities	3,056	2,775
Other liabilities
Accrued income taxes - long-term portion	1,507	1,274
Employee benefits	312	299
Contingent liability claims and other	787	789
Finance leases, net of current obligations	111	75
Deferred income taxes	301	279
Other	257	294
Total other liabilities	$ 3,275	$ 3,010

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Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Accruals not currently deductible
Employee benefit costs	$ 169	$ 187
Product and other claims	280	228
Miscellaneous accruals	119	113
Pension costs	824	643
Stock-based compensation	218	203
Net operating/capital loss/tax credit carryforwards	150	71
Foreign tax credits	66
Inventory	70	54
Other	113	24
Gross deferred tax assets	2,009	1,523
Valuation allowance	(158)	(67)
Total deferred tax assets	1,851	1,456
Deferred tax liabilities:
Product and other insurance receivables		(7)
Accelerated depreciation	(580)	(521)
Intangible amortization	(1,021)	(799)
Currency translation	(30)	(35)
Other		(8)
Total deferred tax liabilities	(1,631)	(1,370)
Net deferred tax assets	$ 220	$ 86

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Income Taxes - Income Before Taxes (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Before Income Taxes
United States	$ 3,008	$ 3,487	$ 4,149
International	2,704	3,513	3,399
Income before income taxes	$ 5,712	$ 7,000	$ 7,548

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Marketable Securities and Held-to-Maturity Debt Securities - Held-to-Maturity Debt Securities (Details) $ in Billions	Dec. 31, 2019 USD ($)
Third lien senior secured notes subject to in-substance
Held-to-Maturity Debt Securities
Held-to-maturity debt security	$ 0.5

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Significant Accounting Policies - Asset Retirement Obligation (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Asset retirement obligation
Asset retirement obligation liability	$ 137	$ 122

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Significant Accounting Policies - Research and Development Expenses (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Research and Development Expense
Research, development and related expenses	$ 1,911	$ 1,821	$ 1,870
Research and development expense	$ 1,253	$ 1,253	$ 1,352

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Leases - Supplemental balance sheet information (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Operating leases:
Operating lease right of use assets	$ 858
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Operating lease right of use assets
Current operating lease liabilities	$ 247
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Current operating lease liabilities
Noncurrent operating lease liabilities	$ 607
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Noncurrent operating lease liabilities
Present value of future minimum lease payments	$ 854
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent us-gaap:OperatingLeaseLiabilityNoncurrent
Finance leases:
Property and equipment, at cost	$ 26,124	$ 24,873
Accumulated amortization	(16,791)	(16,135)
Property, Plant and Equipment - net	9,333	8,738
Current obligations of finance leases	$ 21
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Current obligations of finance leases
Finance leases, net of current obligations	$ 111	$ 75
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Finance leases, net of current obligations
Finance Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent
Present value of future minimum lease payments	$ 132
Weighted average remaining lease term (in years):
Operating leases weighted average remaining lease term (in years)	5 years 8 months 12 days
Finance leases weighted average remaining lease term (in years)	9 years
Weighted average discount rate:
Operating leases weighted average discount rate (as a percent)	3.20%
Finance leases weighted average discount rate (as a percent)	3.80%
Property and equipment finance leases
Finance leases:
Property and equipment, at cost	$ 239
Accumulated amortization	(102)
Property, Plant and Equipment - net	$ 137

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Commitments and Contingencies - Product Liability (Details)	12 Months Ended
	Dec. 31, 2019 lawsuit item individual	Dec. 31, 2018 lawsuit
Product Liability - Bair Hugger | United States
Product Liability Litigation
Number of lawsuits filed	9
Number of plaintiffs	12	5,015
Product Liability - Bair Hugger | Canada
Product Liability Litigation
Number of lawsuits filed	1
Product Liability - Bair Hugger | Various federal courts
Product Liability Litigation
Number of plaintiffs | item	5,000
Product Liability - Bair Hugger | Multi-district litigation (MDL)
Product Liability Litigation
Number of lawsuits pending	8
Number of total claims dismissed	3
Product Liability - Bair Hugger | U.S. District Court for the District of Minnesota
Product Liability Litigation
Number of lawsuits filed	61
Product Liability - Bair Hugger | Missouri
Product Liability Litigation
Number of total claims dismissed	4
Product Liability - Bair Hugger and medical malpractice claims | Hidalgo County Texas
Product Liability Litigation
Number of lawsuits pending	1
Product Liability - Dual-Ended Combat Arms Earplugs
Product Liability Litigation
Number of lawsuits filed	2,531
Number of putative class action and other lawsuits	14
Number of plaintiffs | individual	11,318

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Supplemental Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2019

Supplemental Balance Sheet Information

Supplemental Balance Sheet Information

(Millions)	2019		2018
Other current assets
Derivative assets-current	$	75	$	88
Held-to-maturity debt security held in trust		470		—
Insurance related (receivables, prepaid expenses and other)		172		103
Other		174		158
Total other current assets	$	891	$	349
Property, plant and equipment - at cost
Land	$	351	$	340
Buildings and leasehold improvements		7,877		7,564
Machinery and equipment		16,586		15,776
Construction in progress		1,310		1,193
Gross property, plant and equipment		26,124		24,873
Accumulated depreciation		(16,791)		(16,135)
Property, plant and equipment - net	$	9,333	$	8,738
Other assets
Deferred income taxes	$	521	$	365
Prepaid pension and post retirement		230		208
Insurance related receivables and other		67		68
Cash surrender value of life insurance policies		254		251
Equity method investments		70		70
Equity and other investments		126		118
Other		406		265
Total other assets	$	1,674	$	1,345
Other current liabilities
Accrued rebates	$	594	$	558
Deferred revenue		430		617
Derivative liabilities		17		32
Employee benefits and withholdings		229		228
Contingent liability claims and other		566		244
Property, sales-related and other taxes		247		273
Pension and postretirement benefits		67		76
Other		906		747
Total other current liabilities	$	3,056	$	2,775
Other liabilities
Accrued income taxes – long-term portion	$	1,507	$	1,274
Employee benefits		312		299
Contingent liability claims and other		787		789
Finance lease obligations		111		75
Deferred income taxes		301		279
Other		257		294
Total other liabilities	$	3,275	$	3,010

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Leases - Operating leases not yet commenced (Details) $ in Millions	Dec. 31, 2019 USD ($)
Leases
Additional operating lease commitments that have not yet commenced	$ 23

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Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2019

Acquisitions and Divestitures

Allocation of purchase price

	2019 Acquisition Activity
							Finite-Lived
							Intangible-Asset
(Millions)							Weighted-Average
Asset (Liability)	M*Modal		Acelity		Total		Lives (Years)
Accounts receivable	$	75	$	295	$	370
Inventory		—		186		186
Other current assets		2		65		67
Property, plant, and equipment		8		147		155
Purchased finite-lived intangible assets:
Customer related intangible assets		275		1,760		2,035	18
Other technology-based intangible assets		160		1,390		1,550	10
Definite-lived tradenames		11		485		496	16
Purchased goodwill		517		2,952		3,469
Other assets		58		73		131
Accounts payable and other liabilities		(127)		(438)		(565)
Interest bearing debt		(251)		(2,322)		(2,573)
Deferred tax asset/(liability) and accrued income taxes		(24)		(288)		(312)
Net assets acquired	$	704	$	4,305	$	5,009
Supplemental information:
Cash paid	$	708	$	4,486	$	5,194
Less: Cash acquired		4		206		210
Cash paid, net of cash acquired	$	704	$	4,280	$	4,984
Consideration payable		—		25		25
	$	704	$	4,305	$	5,009

Approximate amounts of major assets and liabilities associated with disposal groups classified as held-for-sale

	December 31,
(Millions)	2019
Inventory	$	70
Property, plant and equipment		150
Intangible assets		35

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Derivatives - Cumulative Basis Adjustment for Fair Value Hedges (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Hedged Liability, Fair Value Hedge	$ 1,274
Hedged Liability, Fair Value Hedge		$ 1,872
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease)	22
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease)		14
Short-term borrowings and current portion of long-term debt
Derivatives, Fair Value [Line Items]
Hedged Liability, Fair Value Hedge	499
Hedged Liability, Fair Value Hedge		596
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease)		(4)
Long-term debt
Derivatives, Fair Value [Line Items]
Hedged Liability, Fair Value Hedge	775
Hedged Liability, Fair Value Hedge		1,276
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease)	$ 22
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease)		$ 18

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2019

Supplemental Cash Flow Elements

Supplemental Cash Flow Information

NOTE 9. Supplemental Cash Flow Information

(Millions)	2019		2018		2017
Cash income tax payments, net of refunds	$	1,198	$	1,560	$	1,604
Cash interest payments		370		314		199

Cash interest payments include interest paid on debt and finance lease balances. Cash interest payments exclude the cash paid for early debt extinguishment costs. Additional details are described in Note 12.

Individual amounts in the Consolidated Statement of Cash Flows exclude the impacts of acquisitions, divestitures and exchange rate impacts, which are presented separately.

Transactions related to investing and financing activities with significant non-cash components are as follows:

● 3M sold and leased-back, under finance leases, certain recently constructed machinery and equipment in return for municipal securities with certain cities in the United States. In aggregate, the values totaled approximately $9 million in 2019, $13 million in 2018, and $13 million in 2017, as of the transaction date.

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Derivatives - BS Location (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Assets	$ 142	$ 146
Fair Value of Derivative Instruments, Liabilities	20	53
Derivatives designated as hedging instruments
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Assets	131	132
Fair Value of Derivative Instruments, Liabilities	12	47
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other current assets
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Assets	64	74
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other assets
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Assets	50	39
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other current liabilities
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Liabilities	9	12
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other liabilities
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Liabilities	3	4
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Current balance sheet location
Location and Fair Value Amount of Derivative Instruments
Derivative Notional Amount	1,995	2,277
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Noncurrent balance sheet location
Location and Fair Value Amount of Derivative Instruments
Derivative Notional Amount	1,041	1,099
Derivatives designated as hedging instruments | Interest rate swap contracts | Other assets
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Assets	17	19
Derivatives designated as hedging instruments | Interest rate swap contracts | Other current liabilities
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Liabilities		14
Derivatives designated as hedging instruments | Interest rate swap contracts | Other liabilities
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Liabilities		17
Derivatives designated as hedging instruments | Interest rate swap contracts | Current balance sheet location
Location and Fair Value Amount of Derivative Instruments
Derivative Notional Amount	500	1,000
Derivatives designated as hedging instruments | Interest rate swap contracts | Noncurrent balance sheet location
Location and Fair Value Amount of Derivative Instruments
Derivative Notional Amount	603	1,403
Derivatives not designated as hedging instruments
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Assets	11	14
Fair Value of Derivative Instruments, Liabilities	8	6
Derivatives not designated as hedging instruments | Foreign currency forward/option contracts | Other current assets
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Assets	11	14
Derivatives not designated as hedging instruments | Foreign currency forward/option contracts | Other current liabilities
Location and Fair Value Amount of Derivative Instruments
Fair Value of Derivative Instruments, Liabilities	8	6
Derivatives not designated as hedging instruments | Foreign currency forward/option contracts | Current balance sheet location
Location and Fair Value Amount of Derivative Instruments
Derivative Notional Amount	$ 2,684	$ 2,484

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Significant Accounting Policies

Significant Accounting Policies

NOTE 1. Significant Accounting Policies

Consolidation: 3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products. All applicable subsidiaries are consolidated. All intercompany transactions are eliminated. As used herein, the term “3M” or “Company” refers to 3M Company and subsidiaries unless the context indicates otherwise.

Basis of presentation: Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation.

Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States with the exception of 3M’s subsidiaries in Argentina, the economy of which was considered highly inflationary beginning in 2018, and accordingly the financial statements of these subsidiaries are remeasured as if their functional currency is that of their parent. Assets and liabilities for operations in local-currency environments are translated at month-end exchange rates of the period reported. Income and expense items are translated at average monthly currency exchange rates in effect during the period. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity.

3M had a consolidating subsidiary in Venezuela, the financial statements of which were remeasured as if its functional currency were that of its parent because Venezuela’s economic environment is considered highly inflationary. The operating income of this subsidiary was immaterial as a percent of 3M’s consolidated operating income for the periods presented. In light of circumstances, including the country’s unstable environment and heightened unrest leading to sustained lack of demand, and expectation that these circumstances will continue for the foreseeable future, during May 2019, 3M concluded it no longer met the criteria of control in order to continue consolidating its Venezuelan operations. As a result, as of May 31, 2019, the Company began reflecting its interest in the Venezuelan subsidiary as an equity investment that does not have a readily determinable fair value. This resulted in a pre-tax charge of $162 million within other expense (income) in the second quarter of 2019. The charge primarily relates to $144 million of foreign currency translation losses associated with foreign currency movements before Venezuela was accounted for as a highly inflationary economy and pension elements previously included in accumulated other comprehensive loss along with write-down of intercompany receivable and investment balances associated with this subsidiary. Beginning May 31, 2019, 3M’s consolidated balance sheets and statements of operations no longer include the Venezuelan entity’s operations other than an immaterial equity investment and associated loss or income thereon largely only to the extent, if any, that 3M provides support or materials and receives funding or dividends.

Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash and cash equivalents: Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when acquired.

Marketable securities: Marketable securities include available-for-sale debt securities and are recorded at fair value. Cost of securities sold use the first in, first out (FIFO) method. The classification of marketable securities as current or non-current is based on the availability for use in current operations. 3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320, Investments-Debt and Equity Securities, when determining the classification of the impairment as “temporary” or “other-than-temporary”. A temporary impairment charge results in an unrealized loss being recorded in accumulated other comprehensive income as a component of shareholders’ equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors. Amounts are reclassified out of accumulated other comprehensive income and into earnings upon sale or “other-than-temporary” impairment.

Investments: All equity securities that do not result in consolidation and are not accounted for under the equity method are measured at fair value with changes therein reflected in net income. 3M utilizes the measurement alternative for equity investments that do not

have readily determinable fair values and measures these investments at cost less impairment plus or minus observable price changes in orderly transactions. The balance of these securities is disclosed in Note 7.

Other assets: Other assets include deferred income taxes, product and other insurance receivables, the cash surrender value of life insurance policies, medical equipment in rental arrangements utilized primarily by hospitals and other medical clinics, prepaid pension and postretirement and other long-term assets. Investments in life insurance are reported at the amount that could be realized under contract at the balance sheet date, with any changes in cash surrender value or contract value during the period accounted for as an adjustment of premiums paid. Cash outflows and inflows associated with life insurance activity are included in “Purchases of marketable securities and investments” and “Proceeds from maturities and sale of marketable securities and investments,” respectively.

Inventories: Inventories are stated at the lower of cost or net realizable value (NRV), which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation market. Cost is determined on a first-in, first-out basis.

Property, plant and equipment: Property, plant and equipment, including capitalized interest and internal direct engineering costs, are recorded at cost. Depreciation of property, plant and equipment generally is computed using the straight-line method based on the estimated useful lives of the assets. The estimated useful lives of buildings and improvements primarily range from ten to forty years, with the majority in the range of twenty to forty years. The estimated useful lives of machinery and equipment primarily range from three to fifteen years, with the majority in the range of five to ten years. Fully depreciated assets other than capitalized internally developed software are retained in property, plant and equipment and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Conditional asset retirement obligations: A liability is initially recorded at fair value for an asset retirement obligation associated with the retirement of tangible long-lived assets in the period in which it is incurred if a reasonable estimate of fair value can be made. Conditional asset retirement obligations exist for certain long-term assets of the Company. The obligation is initially measured at fair value using expected present value techniques. Over time the liabilities are accreted for the change in their present value and the initial capitalized costs are depreciated over the remaining useful lives of the related assets. The asset retirement obligation liability was $137 million and $122 million at December 31, 2019 and 2018, respectively.

Goodwill: Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually in the fourth quarter of each year, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting unit. Reporting units are one level below the business segment level, but are required to be combined when reporting units within the same segment have similar economic characteristics. 3M did not combine any of its reporting units for impairment testing. The impairment loss is measured as the amount by which the carrying value of the reporting unit’s net assets exceeds its estimated fair value, not to exceed the carrying value of the reporting unit’s goodwill. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups or by using a discounted cash flow analysis. Companies have the option to first assess qualitative factors to determine whether the fair value of a reporting unit is not “more likely than not” less than its carrying amount, which is commonly referred to as “Step 0”. 3M has chosen not to apply Step 0 for its annual goodwill assessments.

Intangible assets: Intangible asset types include customer related, patents, other technology-based, tradenames and other intangible assets acquired from an independent party. Intangible assets with a definite life are amortized over a period ranging from four to twenty years on a systematic and rational basis (generally straight line) that is representative of the asset’s use. The estimated useful lives vary by category, with customer-related largely between twelve to nineteen years, patents largely between six to seventeen years, other technology-based largely between six to fifteen years, definite lived tradenames largely between six and twenty years, and other intangibles largely between five to thirteen years. Intangible assets are removed from their respective gross asset and accumulated

amortization accounts when they are no longer in use. Refer to Note 4 for additional details on the gross amount and accumulated amortization of the Company’s intangible assets. Costs related to internally developed intangible assets, such as patents, are expensed as incurred, within “Research, development and related expenses.”

Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount exceeds the estimated undiscounted cash flows from the asset’s or asset group’s ongoing use and eventual disposition. If an impairment is identified, the amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Indefinite-lived intangible assets are tested for impairment annually, and are tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. An impairment loss would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset.

Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairment or accelerated depreciation/amortization of assets associated with such actions. Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Severance amounts for which affected employees in certain circumstances are required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees’ remaining service periods. Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company. Asset impairment charges related to intangible assets and property, plant and equipment reflect the excess of the assets’ carrying values over their fair values.

Revenue (sales) recognition: The Company sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk or significant payment terms extended to customers. The vast majority of 3M’s customer arrangements contain a single performance obligation to transfer manufactured goods as the promise to transfer the individual goods is not separately identifiable from other promises in the contracts and, therefore, not distinct. However, to a limited extent 3M also enters into customer arrangements that involve intellectual property out-licensing, multiple performance obligations (such as equipment, installation and service), software with coterminous post-contract support, services and non-standard terms and conditions.

The Company recognizes revenue in light of the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. Revenue is recognized when control of goods has transferred to customers. For the majority of the Company’s customer arrangements, control transfers to customers at a point-in-time when goods/services have been delivered as that is generally when legal title, physical possession and risks and rewards of goods/services transfers to the customer. In limited arrangements, control transfers over time as the customer simultaneously receives and consumes the benefits as 3M completes the performance obligation(s).

Revenue is recognized at the transaction price which the Company expects to be entitled. When determining the transaction price, 3M estimates variable consideration applying the portfolio approach practical expedient under ASC 606. The main sources of variable consideration for 3M are customer rebates, trade promotion funds, and cash discounts. These sales incentives are recorded as a reduction to revenue at the time of the initial sale using the most-likely amount estimation method. The most-likely amount method is based on the single most likely outcome from a range of possible consideration outcomes. The range of possible consideration outcomes are primarily derived from the following inputs: sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. Because 3M serves numerous markets, the sales incentive programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. There are no material instances where variable consideration is constrained and not recorded at the initial time of sale. Free goods are accounted for as an expense and recorded in cost of sales. Product returns are recorded as a reduction to revenue based on anticipated sales returns that occur in the normal course of business. 3M primarily has assurance-type warranties that do not result in separate performance obligations. Sales, use, value-added, and other excise taxes are not recognized in revenue. The Company has elected to present revenue net of sales taxes and other similar taxes.

For substantially all arrangements recognized over time, the Company applies the “right to invoice” practical expedient. As a result, 3M recognizes revenue at the invoice amount when the entity has a right to invoice a customer at an amount that corresponds directly with the value to the customer of the Company’s performance completed to date.

For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using 3M’s best estimate of the standalone selling price of each distinct good or service in the contract.

The Company did not recognize any material revenue in the current reporting period for performance obligations that were fully satisfied in previous periods.

The Company does not have material unfulfilled performance obligation balances for contracts with an original length greater than one year in any years presented. Additionally, the Company does not have material costs related to obtaining a contract with amortization periods greater than one year for any year presented.

3M applies ASC 606 utilizing the following allowable exemptions or practical expedients:

● Exemption to not disclose the unfulfilled performance obligation balance for contracts with an original length of one year or less.

● Practical expedient relative to costs of obtaining a contract by expensing sales commissions when incurred because the amortization period would have been one year or less.

● Portfolio approach practical expedient relative to estimation of variable consideration.

● “Right to invoice” practical expedient based on 3M’s right to invoice the customer at an amount that reasonably represents the value to the customer of 3M’s performance completed to date.

● Election to present revenue net of sales taxes and other similar taxes.

● Sales-based royalty exemption permitting future intellectual property out-licensing royalty payments to be excluded from the otherwise required remaining performance obligations disclosure

The Company recognizes revenue from the rental of durable medical devices in light of the guidance of ASC 842, Leases. The Company recognizes rental revenue based on the length of time a device is used by the patient/organization, (i) at the contracted rental rate for contracted customers and (ii) generally, retail price for non-contracted customers. The leases are short-term in nature, generally providing for daily or monthly pricing, and are all classified as operating leases.

Accounts receivable and allowances: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for bad debts, cash discounts, product returns and various other items. The allowance for doubtful accounts and product returns is based on the best estimate of the amount of probable credit losses in existing accounts receivable and anticipated sales returns. The Company determines the allowances based on historical write-off experience by industry and regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monthly. The Company does not have any significant off-balance-sheet credit exposure related to its customers.

Advertising and merchandising: These costs are charged to operations in the period incurred, and totaled $348 million in 2019, $396 million in 2018 and $411 million in 2017.

Research, development and related expenses: These costs are charged to operations in the period incurred and are shown on a separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.911 billion in 2019, $1.821 billion in 2018 and $1.870 billion in 2017. Research and development expenses, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.253 billion in 2019, $1.253 billion in 2018 and $1.352 billion in 2017. Related expenses primarily include technical support; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments.

Internal-use software: The Company capitalizes direct costs of services used in the development of, and external software acquired for use as, internal-use software. Amounts capitalized are amortized over a period of three to seven years, generally on a straight-line basis, unless another systematic and rational basis is more representative of the software’s use. Amounts are reported as a component

of either machinery and equipment or finance leases within property, plant and equipment. Fully depreciated internal-use software assets are removed from property, plant and equipment and accumulated depreciation accounts.

Environmental: Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities related to anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company’s commitment to a plan of action, or approval by regulatory agencies. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives.

Income taxes: The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. As of December 31, 2019 and 2018, the Company had valuation allowances of $158 million and $67 million on its deferred tax assets, respectively. The Company recognizes and measures its uncertain tax positions based on the rules under ASC 740, Income Taxes. As described in the “New Accounting Pronouncements” section, 3M adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The Company’s accounting policy for income taxes has been updated to indicate the uses of the portfolio approach for releasing income tax effects from accumulated other comprehensive loss.

Earnings per share: The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans during the years 2019, 2018 and 2017 were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would have had an anti-dilutive effect (8.9 million average options for 2019, 2.9 million average options for 2018, and 0.8 million average options for 2017). The computations for basic and diluted earnings per share for the years ended December 31 follow:

Earnings Per Share Computations

(Amounts in millions, except per share amounts)	2019		2018		2017
Numerator:
Net income attributable to 3M	$	4,570	$	5,349	$	4,858
Denominator:
Denominator for weighted average 3M common shares outstanding – basic		577.0		588.5		597.5
Dilution associated with the Company’s stock-based compensation plans		8.1		13.5		15.2
Denominator for weighted average 3M common shares outstanding – diluted		585.1		602.0		612.7
Earnings per share attributable to 3M common shareholders – basic	$	7.92	$	9.09	$	8.13
Earnings per share attributable to 3M common shareholders – diluted	$	7.81	$	8.89	$	7.93

Stock-based compensation: The Company recognizes compensation expense for its stock-based compensation programs, which include stock options, restricted stock, restricted stock units (RSUs), performance shares, and the General Employees’ Stock Purchase Plan (GESPP). Under applicable accounting standards, the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. However, with respect to income taxes, the related deduction from taxes payable is based on the award’s intrinsic value at the time of exercise (for an option) or on the fair value upon vesting of the award (for RSUs), which can be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the deferred tax benefit recognized as compensation cost is recognized in the financial statements. These excess tax benefits/deficiencies are recognized as income tax benefit/expense in the statement of income and, within the statement of cash flows, are classified in operating activities in the same manner as other cash flows related to income taxes. The extent of excess tax benefits/deficiencies is subject to variation in 3M stock price and timing/extent of RSU vestings and employee stock option exercises.

Comprehensive income: Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Changes in Equity. Accumulated other comprehensive income (loss) is composed of foreign currency translation effects (including hedges of net investments in international companies), defined benefit pension and postretirement plan adjustments, unrealized gains and losses on

available-for-sale debt securities, and unrealized gains and losses on cash flow hedging instruments. The Company uses the portfolio approach for releasing income tax effects from accumulated other comprehensive income.

Derivatives and hedging activities: All derivative instruments within the scope of ASC 815, Derivatives and Hedging, are recorded on the balance sheet at fair value. The Company uses interest rate swaps, currency and commodity price swaps, and foreign currency forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with U.S. generally accepted accounting principles. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. Cash flows from derivative instruments are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives.

Credit risk: The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. The Company does not anticipate nonperformance by any of these counterparties. 3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation.

Fair value measurements: 3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Acquisitions: The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations. This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting. In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations. These transactions are largely reflected as additional asset purchase and investment activity.

Leases: 3M determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. 3M determines certain service agreements that contain the right to use an underlying asset are not leases because 3M does not control how and for what purpose the identified asset is used. Examples of such agreements include master supply agreements, product processing agreements, warehouse and distribution services agreements, power purchase agreements, and transportation purchase agreements.

After adoption of ASU 2016-02 and related standards, operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is 3M’s incremental borrowing rate or, if available, the rate implicit in the lease. 3M determines the incremental borrowing rate for leases using a portfolio approach based primarily on the lease term and the economic environment of the applicable country or region.

As a lessee, the Company leases distribution centers, office space, land, and equipment. Certain 3M lease agreements include rental payments adjusted annually based on changes in an inflation index. 3M’s leases do not contain material residual value guarantees or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term.

Certain leases include one or more options to renew, with terms that can extend the lease term up to five years. 3M includes options to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, 3M is not reasonably certain to exercise such options.

For the measurement and classification of its lease agreements, 3M groups lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments primarily include payments for non-lease components, such as maintenance costs, payments for leased assets used beyond their noncancelable lease term as adjusted for contractual options to terminate or renew, and payments for non-components such as sales tax. Certain 3M leases contain immaterial variable lease payments based on number of units produced.

New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases, and in July 2018, issued ASU No. 2018-10 and 2018-11 and in December 2018, issued ASU No. 2018-20 and in March 2019, issued ASU No. 2019-01, which amended the standard, replacing existing lease accounting guidance. The new standard introduced a lessee model that requires entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to current accounting. The ASU did not make fundamental changes to previous lessor accounting. However, it modified what qualifies as a sales-type and direct financing lease and related accounting and aligned a number of the underlying principles with those of the ASC 606 revenue standard, such as evaluating how collectability should be considered and determining when profit can be recognized. The guidance eliminated existing real estate-specific provisions and requires expanded qualitative and quantitative disclosures. For 3M, the ASU was effective January 1, 2019. As amended, the ASU provided for retrospective transition applied to earliest period presented or an adoption method by which entities would not need to recast the comparative periods presented. 3M did not recast prior periods as it adopted this ASU. As a result of adopting this ASU, 3M recorded approximately $0.8 billion of lease assets and lease liabilities related to its operating leases and a $14 million adjustment to retained earnings related to transition upon this ASU’s adoption.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope, and in November 2018, issued ASU No. 2018-19 and in April 2019, issued ASU No. 2019-04 and in May 2019, issued ASU No. 2019-05, and in November 2019, issued ASU No. 2019-11, which amended the standard. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. With respect to available-for-sale (AFS) debt securities, the ASU amends the current other-than-temporary impairment model. For such securities with unrealized losses, entities will still consider if a portion of any impairment is related only to credit losses and therefore recognized as a reduction in income. However, rather than also reflecting that

credit loss amount as a permanent reduction in cost (amortized cost) basis of that AFS debt security, the ASU requires that credit losses be reflected as an allowance. As a result, under certain circumstances, a recovery in value could result in previous allowances, or portions thereof, reversing back into income. For 3M, this ASU is effective January 1, 2020, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Based on the conducted analyses and due to the nature and extent of 3M’s financial instruments in scope of this ASU (primarily accounts receivable) and the historical, current and expected credit quality of its customers, the Company does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities and in October 2018, issued ASU No. 2018-16, which amended the standard. The ASU amends existing guidance to simplify the application of hedge accounting in certain situations and allow companies to better align their hedge accounting with their risk management activities. Existing standards contain certain requirements for an instrument to qualify for hedge accounting relative to initial and ongoing assessments of hedge effectiveness. While an initial quantitative test to establish the hedge relationship is highly effective would still be required, the new ASU permits subsequent qualitative assessments for certain hedges instead of a quantitative test and expands the timeline for performing the initial quantitative assessment. The ASU also simplifies related accounting by eliminating the requirement to separately measure and report hedge ineffectiveness. Instead, for qualifying cash flow and net investment hedges, the entire change in fair value (including the amount attributable to ineffectiveness) will be recorded within other comprehensive income and reclassified to earnings in the same income statement line that is used to present the earnings effect of the hedged item when the hedged item affects earnings. For fair value hedges, generally, the entire change in fair value of the hedging instrument would also be presented in the same income statement line as the hedged item. The new standard also simplifies the accounting for fair value hedges of interest rate risks and expands an entity’s ability to hedge nonfinancial and financial risk components. In addition, the guidance also eases certain documentation requirements, modifies the accounting for components excluded from the assessment of hedge effectiveness, and requires additional tabular disclosures of derivative and hedge-related information. For 3M, this ASU was effective January 1, 2019, with a modified retrospective transition resulting in a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the adoption date. The adoption of this ASU did not have a material impact on 3M’s consolidated results of operations and financial condition.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income (AOCI) arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. An entity that elects to make this reclassification must consider all items in AOCI that have tax effects stranded as a result of the tax rate change, and must disclose the reclassification of these tax effects as well as the entity’s policy for releasing income tax effects from AOCI. The ASU may be applied either retrospectively or as of the beginning of the period of adoption. For 3M, this ASU was effective January 1, 2019 and resulted in a reclassification between retained earnings and AOCI. As a result of adopting this ASU, the Company increased retained earnings by approximately $0.9 billion, with an offsetting increase to accumulated other comprehensive loss for the same amount.

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In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e. hosting arrangement) with the guidance on capitalizing costs in ASC 350-40, Internal-Use Software. The ASU permits either a prospective or retrospective transition approach. For 3M, the ASU is effective as of January 1, 2020 and the Company plans on prospective adoption. While the Company utilized limited cloud-computing services where significant implementation costs were incurred for the periods presented, 3M will apply this ASU to its expected expanded use of applicable services.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step-up in the tax basis of goodwill. The transition requirements are primarily prospective and the effective date for 3M is January 1, 2021, with early adoption permitted. As 3M does not have material activity associated with items such as franchise taxes or the types of transactions described above, does not typically have entities subject to relevant loss limitations and is not currently addressing

enacted tax law changes for which this ASU applies, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In January 2020, the FASB issued ASU No. 2020-01, Clarifying the Interactions between Topic 321, Investments—Equity Securities, Topic 323, Investments—Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging. This ASU clarifies that when accounting for certain equity securities, a Company should consider observable transactions before applying or upon discontinuing the equity method of accounting for the purposes of applying the measurement alternative. Further, this ASU notes when determining the accounting for certain derivatives, a Company should not consider if the underlying securities would be accounted for under the equity method or fair value option. The transition requirements are prospective and the effective date for 3M is January 1, 2021, with early adoption permitted. As 3M does not currently have a material amount of equity securities and equity method investments or relevant derivatives, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition, but will apply such guidance, where applicable, to future circumstances.

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Restructuring Actions

12 Months Ended

Dec. 31, 2019

Restructuring Actions

Restructuring Actions

NOTE 5. Restructuring Actions

2019 Restructuring Actions:

During the second quarter of 2019, in light of slower than expected 2019 sales, management approved and committed to undertake certain restructuring actions. These actions impacted approximately 2,000 positions worldwide, including attrition. The Company recorded second quarter 2019 pre-tax charges of $148 million. Additionally, during the fourth quarter of 2019, to realign 3M’s organizational structure and operating model to improve growth and operational efficiency, management approved and committed to undertake certain restructuring actions. These actions impacted approximately 1,500 positions worldwide. The Company recorded fourth quarter 2019 pre-tax charges of $134 million. These restructuring charges were recorded in the income statement as follows:

(Millions)	Second and Fourth Quarter 2019
Cost of sales	$	72
Selling, general and administrative expenses		137
Research, development and related expenses		37
Total operating income impact		246
Other expense (income), net		36
Total income before income taxes impact	$	282

The second quarter 2019 actions included a voluntary early retirement incentive initial charge (further discussed in Note 13), the charge for which is included in other expense (income), net above.

The operating income impact of these restructuring charges are summarized by business segment as follows:

	Second and Fourth Quarter 2019
(Millions)	Employee-Related		Asset-Related		Total
Safety and Industrial	$	50	$	—	$	50
Transportation and Electronics		31		—		31
Health Care		17		—		17
Consumer		8		—		8
Corporate and Unallocated		100		40		140
Total Operating Expense	$	206	$	40	$	246

Restructuring actions, including cash and non-cash impacts, follow:

(Millions)	Employee-Related		Asset-Related		Total
Expense incurred in the second quarter and fourth quarter of 2019	$	242	$	40	$	282
Non-cash changes		(36)		(40)		(76)
Cash payments		(52)		—		(52)
Adjustments		(14)		—		(14)
Accrued restructuring action balances as of December 31, 2019	$	140	$	—	$	140

Remaining activities related to this restructuring are expected to be completed largely through 2020.

2018 Restructuring Actions:

During the second quarter and fourth quarter of 2018, management approved and committed to undertake certain restructuring actions related to addressing corporate functional costs following the Communication Markets Division divestiture. These actions affected approximately 1,200 positions worldwide and resulted in a second quarter 2018 pre-tax charge of $105 million and a fourth quarter pre-tax charge of $22 million, net of adjustments for reductions in cost estimates of $10 million, essentially all within Corporate and Unallocated. The restructuring charges were recorded in the income statement as follows:

(Millions)	Second and Fourth Quarter 2018
Cost of sales	$	27
Selling, general and administrative expenses		105
Research, development and related expenses		5
Total	$	137

Restructuring actions, including cash and non-cash impacts, follow:

(Millions)	Employee-Related		Asset-Related		Total
Expense incurred in the second quarter and fourth quarter of 2018	$	125	$	12	$	137
Non-cash changes		—		(12)		(12)
Cash payments		(24)		—		(24)
Adjustments		(17)		—		(17)
Accrued restructuring action balances as of December 31, 2018	$	84	$	—	$	84
Cash payments		(76)		—		(76)
Adjustments		(5)		—		(5)
Accrued restructuring action balances as of December 31, 2019	$	3	$	—	$	3

Remaining activities related to this restructuring were substantially completed in 2019.

2017 Restructuring Actions:

During the second quarter of 2017, management approved and committed to undertake certain restructuring actions primarily focused on portfolio and footprint optimization. These actions affected approximately 1,300 positions worldwide and resulted in a second quarter 2017 pre-tax charge of $99 million. The restructuring charges were recorded in the income statement as follows:

(Millions)	Second Quarter 2017
Cost of sales	$	86
Selling, general and administrative expenses		5
Research, development and related expenses		8
Total	$	99

The impact of these restructuring charges are summarized by business segment as follows:

	Second Quarter 2017
(Millions)		Employee-Related
Safety and Industrial		45
Transportation and Electronics		10
Health Care		2
Consumer		36
Corporate and Unallocated		6
Total	$	99

Restructuring actions, including cash and non-cash impacts, follow:

(Millions)	Employee-Related
Expense incurred in the second quarter of 2017	$	99
Cash payments		(8)
Adjustments		(3)
Accrued restructuring action balances as of December 31, 2017	$	88
Cash payments		(20)
Adjustments		(28)
Accrued restructuring action balances as of December 31, 2018	$	40
Cash payments		(21)
Adjustments		1
Accrued restructuring action balances as of December 31, 2019	$	20

Remaining activities related to this restructuring were substantially completed in 2019, with payments occurring over time in accordance with applicable severance arrangements into 2020. A portion of the adjustments detailed above include certain severance accruals taken in 2017, the obligation for which was relieved and reflected as part of the gain on divestiture when that business was sold in 2018.