UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

Commission file number: 1-3285

3M COMPANY

(Exact name of registrant as specified in its charter)

Delaware	41-0417775
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)
3M Center, St. Paul, Minnesota	55144-1000
(Address of Principal Executive Offices)	(Zip Code)
(Registrant’s Telephone Number, Including Area Code) (651) 733-1110 Not Applicable
(Former Name or Former Address, if Changed Since Last Report) 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.
0.375% Notes due 2022	MMM22A	New York Stock Exchange, Inc.
0.950% Notes due 2023	MMM23	New York Stock Exchange, Inc.
1.500% Notes due 2026	MMM26	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.

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 Exchange Act). Yes ☐  No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at September 30, 2020
Common Stock, $0.01 par value per share	576,821,878 shares

3M COMPANY

Form 10-Q for the Quarterly Period Ended September 30, 2020

	TABLE OF CONTENTS	BEGINNING PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Index to Financial Statements:
	Consolidated Statement of Income	3
	Consolidated Statement of Comprehensive Income	4
	Consolidated Balance Sheet	5
	Consolidated Statement of Cash Flows	6
	Notes to Consolidated Financial Statements
	Note 1. Significant Accounting Policies	7
	Note 2. Revenue	10
	Note 3. Acquisitions and Divestitures	13
	Note 4. Goodwill and Intangible Assets	14
	Note 5. Restructuring Actions	16
	Note 6. Supplemental Income Statement Information	18
	Note 7. Supplemental Equity and Comprehensive Income Information	19
	Note 8. Income Taxes	23
	Note 9. Marketable Securities and Held-to-Maturity Debt Securities	24
	Note 10. Long-Term Debt and Short-Term Borrowings	24
	Note 11. Pension and Postretirement Benefit Plans	25
	Note 12. Derivatives	27
	Note 13. Fair Value Measurements	34
	Note 14. Commitments and Contingencies	36
	Note 15. Stock-Based Compensation	52
	Note 16. Business Segments	55
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Index to Management’s Discussion and Analysis:
	Overview	58
	Results of Operations	67
	Performance by Business Segment	71
	Financial Condition and Liquidity	77
	Cautionary Note Concerning Factors That May Affect Future Results	83
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	83
ITEM 4.	Controls and Procedures	84
PART II	OTHER INFORMATION
ITEM 1.	Legal Proceedings	85
ITEM 1A.	Risk Factors	85
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	89
ITEM 3.	Defaults Upon Senior Securities	90
ITEM 4.	Mine Safety Disclosures	90
ITEM 5.	Other Information	90
ITEM 6.	Exhibits	90

2

3M COMPANY

FORM 10-Q

For the Quarterly Period Ended September 30, 2020

PART I. Financial Information

Item 1. Financial Statements.

3M Company and Subsidiaries

Consolidated Statement of Income

(Unaudited)

	Three months ended				Nine months ended
	September 30,				September 30,
(Millions, except per share amounts)	2020		2019		2020		2019
Net sales	$	8,350	$	7,991	$	23,601	$	24,025
Operating expenses
Cost of sales		4,303		4,188		12,217		12,811
Selling, general and administrative expenses		1,677		1,455		5,039		5,089
Research, development and related expenses		461		443		1,422		1,390
Gain on sale of businesses		—		(106)		(389)		(114)
Total operating expenses		6,441		5,980		18,289		19,176
Operating income		1,909		2,011		5,312		4,849
Other expense (income), net		104		45		311		349
Income before income taxes		1,805		1,966		5,001		4,500
Provision for income taxes		387		378		1,002		888
Income of consolidated group		1,418		1,588		3,999		3,612
Income (loss) from unconsolidated subsidiaries, net of taxes		(1)		—		(1)		—
Net income including noncontrolling interest		1,417		1,588		3,998		3,612
Less: Net income (loss) attributable to noncontrolling interest		4		5		3		11
Net income attributable to 3M	$	1,413	$	1,583	$	3,995	$	3,601
Weighted average 3M common shares outstanding — basic		577.8		576.5		577.2		577.2
Earnings per share attributable to 3M common shareholders — basic	$	2.45	$	2.75	$	6.92	$	6.24
Weighted average 3M common shares outstanding — diluted		582.4		583.0		581.6		585.9
Earnings per share attributable to 3M common shareholders — diluted	$	2.43	$	2.72	$	6.87	$	6.15

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

3

3M Company and Subsidiaries

Consolidated Statement of Comprehensive Income

(Unaudited)

	Three months ended				Nine months ended
	September 30,				September 30,
(Millions)	2020		2019		2020		2019
Net income including noncontrolling interest	$	1,417	$	1,588	$	3,998	$	3,612
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		271		(202)		(67)		(2)
Defined benefit pension and postretirement plans adjustment		127		76		304		356
Cash flow hedging instruments		(71)		8		(60)		(24)
Total other comprehensive income (loss), net of tax		327		(118)		177		330
Comprehensive income (loss) including noncontrolling interest		1,744		1,470		4,175		3,942
Comprehensive (income) loss attributable to noncontrolling interest		(5)		(3)		(1)		(10)
Comprehensive income (loss) attributable to 3M	$	1,739	$	1,467	$	4,174	$	3,932

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

4

3M Company and Subsidiaries

Consolidated Balance Sheet

(Unaudited)

	September 30,		December 31,
(Dollars in millions, except per share amount)	2020		2019
Assets
Current assets
Cash and cash equivalents	$	4,121	$	2,353
Marketable securities — current		440		98
Accounts receivable — net of allowances of $228 and $161		4,623		4,791
Inventories
Finished goods		1,859		2,003
Work in process		1,224		1,194
Raw materials and supplies		901		937
Total inventories		3,984		4,134
Prepaids		516		704
Other current assets		426		891
Total current assets		14,110		12,971
Property, plant and equipment		26,452		26,124
Less: Accumulated depreciation		(17,236)		(16,791)
Property, plant and equipment — net		9,216		9,333
Operating lease right of use assets		844		858
Goodwill		13,535		13,444
Intangible assets — net		5,926		6,379
Other assets		1,759		1,674
Total assets	$	45,390	$	44,659
Liabilities
Current liabilities
Short-term borrowings and current portion of long-term debt	$	1,169	$	2,795
Accounts payable		2,208		2,228
Accrued payroll		721		702
Accrued income taxes		220		194
Operating lease liabilities — current		252		247
Other current liabilities		2,840		3,056
Total current liabilities		7,410		9,222
Long-term debt		18,429		17,518
Pension and postretirement benefits		3,679		3,911
Operating lease liabilities		605		607
Other liabilities		3,324		3,275
Total liabilities	$	33,447	$	34,533
Commitments and contingencies (Note 14)
Equity
3M Company shareholders’ equity:
Common stock par value, $.01 par value; 944,033,056 shares issued	$	9	$	9
Shares outstanding - September 30, 2020: 576,821,878
Shares outstanding - December 31, 2019: 575,184,835
Additional paid-in capital		6,116		5,907
Retained earnings		43,285		42,135
Treasury stock, at cost:		(29,570)		(29,849)
Shares at September 30, 2020: 367,211,178
Shares at December 31, 2019: 368,848,221
Accumulated other comprehensive income (loss)		(7,960)		(8,139)
Total 3M Company shareholders’ equity		11,880		10,063
Noncontrolling interest		63		63
Total equity	$	11,943	$	10,126
Total liabilities and equity	$	45,390	$	44,659

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

5

3M Company and Subsidiaries

Consolidated Statement of Cash Flows

(Unaudited)

	Nine months ended
	September 30,
(Millions)	2020		2019
Cash Flows from Operating Activities
Net income including noncontrolling interest	$	3,998	$	3,612
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities
Depreciation and amortization		1,413		1,130
Company pension and postretirement contributions		(122)		(129)
Company pension and postretirement expense		295		242
Stock-based compensation expense		216		230
Gain on sale of businesses		(389)		(111)
Deferred income taxes		(57)		(88)
Loss on deconsolidation of Venezuelan subsidiary		—		162
Changes in assets and liabilities
Accounts receivable		113		(14)
Inventories		43		255
Accounts payable		(48)		(222)
Accrued income taxes (current and long-term)		146		(53)
Other — net		(10)		(282)
Net cash provided by (used in) operating activities		5,598		4,732
Cash Flows from Investing Activities
Purchases of property, plant and equipment (PP&E)		(1,079)		(1,161)
Proceeds from sale of PP&E and other assets		29		91
Acquisitions, net of cash acquired		(25)		(704)
Purchases of marketable securities and investments		(1,069)		(917)
Proceeds from maturities and sale of marketable securities and investments		1,239