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 June 30, 2021

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.
1.500% Notes due 2026	MMM26	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.

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 June 30, 2021
Common Stock, $0.01 par value per share	578,638,253 shares

3M COMPANY

Form 10-Q for the Quarterly Period Ended June 30, 2021

	TABLE OF CONTENTS	BEGINNING PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements	3
	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	7
	Note 1. Significant Accounting Policies	7
	Note 2. Revenue	9
	Note 3. Acquisitions and Divestitures	12
	Note 4. Goodwill and Intangible Assets	12
	Note 5. Restructuring Actions	14
	Note 6. Supplemental Income Statement Information	16
	Note 7. Supplemental Equity and Comprehensive Income Information	16
	Note 8. Income Taxes	20
	Note 9. Marketable Securities	20
	Note 10. Long-Term Debt and Short-Term Borrowings	21
	Note 11. Pension and Postretirement Benefit Plans	21
	Note 12. Derivatives	22
	Note 13. Fair Value Measurements	29
	Note 14. Commitments and Contingencies	31
	Note 15. Stock-Based Compensation	49
	Note 16. Business Segments	52
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	54
	Index to Management’s Discussion and Analysis:
	Overview	54
	Results of Operations	63
	Performance by Business Segment	65
	Financial Condition and Liquidity	70
	Cautionary Note Concerning Factors That May Affect Future Results	76
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	77
ITEM 4.	Controls and Procedures	77
PART II	OTHER INFORMATION
ITEM 1.	Legal Proceedings	78
ITEM 1A.	Risk Factors	78
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	82
ITEM 3.	Defaults Upon Senior Securities	83
ITEM 4.	Mine Safety Disclosures	83
ITEM 5.	Other Information	83
ITEM 6.	Exhibits	83

2

3M COMPANY

FORM 10-Q

For the Quarterly Period Ended June 30, 2021

PART I. Financial Information

Item 1. Financial Statements.

3M Company and Subsidiaries

Consolidated Statement of Income

(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
(Millions, except per share amounts)	2021		2020		2021		2020
Net sales	$	8,950	$	7,176	$	17,801	$	15,251
Operating expenses
Cost of sales		4,719		3,805		9,244		7,914
Selling, general and administrative expenses		1,746		1,594		3,554		3,362
Research, development and related expenses		514		424		1,038		961
Gain on sale of businesses		—		(387)		—		(389)
Total operating expenses		6,979		5,436		13,836		11,848
Operating income		1,971		1,740		3,965		3,403
Other expense (income), net		33		90		82		165
Income before income taxes		1,938		1,650		3,883		3,238
Provision for income taxes		415		347		734		625
Income of consolidated group		1,523		1,303		3,149		2,613
Income (loss) from unconsolidated subsidiaries, net of taxes		2		—		3		—
Net income including noncontrolling interest		1,525		1,303		3,152		2,613
Less: Net income (loss) attributable to noncontrolling interest		1		(3)		4		(1)
Net income attributable to 3M	$	1,524	$	1,306	$	3,148	$	2,614
Weighted average 3M common shares outstanding — basic		581.0		577.0		580.7		576.9
Earnings per share attributable to 3M common shareholders — basic	$	2.62	$	2.26	$	5.42	$	4.53
Weighted average 3M common shares outstanding — diluted		588.6		580.8		587.4		581.2
Earnings per share attributable to 3M common shareholders — diluted	$	2.59	$	2.25	$	5.36	$	4.50

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				Six months ended
	June 30,				June 30,
(Millions)	2021		2020		2021		2020
Net income including noncontrolling interest	$	1,525	$	1,303	$	3,152	$	2,613
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment		170		106		(52)		(338)
Defined benefit pension and postretirement plans adjustment		121		47		240		155
Cash flow hedging instruments		(11)		(36)		47		11
Total other comprehensive income (loss), net of tax		280		117		235		(172)
Comprehensive income (loss) including noncontrolling interest		1,805		1,420		3,387		2,441
Comprehensive (income) loss attributable to noncontrolling interest		—		3		(4)		4
Comprehensive income (loss) attributable to 3M	$	1,805	$	1,423	$	3,383	$	2,445

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

4

3M Company and Subsidiaries

Consolidated Balance Sheet

(Unaudited)

	June 30,		December 31,
(Dollars in millions, except per share amount)	2021		2020
Assets
Current assets
Cash and cash equivalents	$	4,695	$	4,634
Marketable securities — current		805		404
Accounts receivable — net of allowances of $230 and $233		4,991		4,705
Inventories
Finished goods		2,356		2,081
Work in process		1,342		1,226
Raw materials and supplies		1,144		932
Total inventories		4,842		4,239
Prepaids		633		675
Other current assets		377		325
Total current assets		16,343		14,982
Property, plant and equipment		27,132		26,650
Less: Accumulated depreciation		(17,774)		(17,229)
Property, plant and equipment — net		9,358		9,421
Operating lease right of use assets		872		864
Goodwill		13,722		13,802
Intangible assets — net		5,572		5,835
Other assets		2,440		2,440
Total assets	$	48,307	$	47,344
Liabilities
Current liabilities
Short-term borrowings and current portion of long-term debt	$	1,981	$	806
Accounts payable		2,931		2,561
Accrued payroll		832		747
Accrued income taxes		247		300
Operating lease liabilities — current		268		256
Other current liabilities		3,181		3,278
Total current liabilities		9,440		7,948
Long-term debt		16,267		17,989
Pension and postretirement benefits		4,184		4,405
Operating lease liabilities		603		609
Other liabilities		3,297		3,462
Total liabilities	$	33,791	$	34,413
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 - June 30, 2021: 578,638,253
Shares outstanding - December 31, 2020: 577,749,638
Additional paid-in capital		6,337		6,162
Retained earnings		44,824		43,821
Treasury stock, at cost:		(29,236)		(29,404)
Shares at June 30, 2021: 365,394,803
Shares at December 31, 2020: 366,283,418
Accumulated other comprehensive income (loss)		(7,486)		(7,721)
Total 3M Company shareholders’ equity		14,448		12,867
Noncontrolling interest		68		64
Total equity	$	14,516	$	12,931
Total liabilities and equity	$	48,307	$	47,344

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)

	Six months ended
	June 30,
(Millions)	2021		2020
Cash Flows from Operating Activities
Net income including noncontrolling interest	$	3,152	$	2,613
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities
Depreciation and amortization		932		932
Company pension and postretirement contributions		(85)		(77)
Company pension and postretirement expense		92		155
Stock-based compensation expense		184		172
Gain on sale of businesses		—		(389)
Deferred income taxes		91		41
Changes in assets and liabilities
Accounts receivable		(337)		241
Inventories		(644)		(198)
Accounts payable		411		(269)
Accrued income taxes (current and long-term)		(141)		273
Other — net		(80)		(376)
Net cash provided by (used in) operating activities		3,575		3,118
Cash Flows from Investing Activities
Purchases of property, plant and equipment (PP&E)		(704)		(711)
Proceeds from sale of PP&E and other assets		43		16
Acquisitions, net of cash acquired		—		(25)
Purchases of marketable securities and investments		(1,188)		(634)
Proceeds from maturities and sale of marketable securities and investments		786		976
Proceeds from sale of businesses, net of cash sold		—		573
Other — net		20		7
Net cash provided by (used in) investing activities		(1,043)		202
Cash Flows from Financing Activities
Change in short-term debt — net		4		(132)
Repayment of debt (maturities greater than 90 days)		(450)		(1,146)
Proceeds from debt (maturities greater than 90 days)		1		1,745
Purchases of treasury stock		(734)		(366)
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans		480		236
Dividends paid to shareholders		(1,716)		(1,693)
Other — net		(19)		(45)
Net cash provided by (used in) financing activities		(2,434)		(1,401)
Effect of exchange rate changes on cash and cash equivalents		(37)		(53)
Net increase (decrease) in cash and cash equivalents		61		1,866
Cash and cash equivalents at beginning of year		4,634		2,353
Cash and cash equivalents at end of period	$	4,695	$	4,219

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

6

3M Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1. Significant Accounting Policies

Basis of Presentation

The interim consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. These adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of results for the full year. The interim consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes included in its Annual Report on Form 10-K.

Effective in the first quarter of 2021, 3M made the following changes. Information provided herein reflects the impact of these changes for all periods presented.

● Change in accounting principle for net periodic pension and postretirement plan cost. See below for additional information.

● Change in measure of segment operating performance used by 3M’s chief operating decision maker—impacting 3M’s disclosed measure of segment profit/loss (business segment operating income). See additional information in Note 16.

● Change in alignment of certain products within 3M’s Consumer business segment—creating the Consumer Health and Safety Division. See additional information in Note 16.

Change in Accounting Principle for Determining Net Periodic Pension and Postretirement Plan Cost

In the first quarter of 2021, 3M changed the method it uses to calculate the market-related value of fixed income securities included in its pension and other postretirement plan assets. The market-related value is used to determine the expected return on plan assets and the amortization of net unamortized actuarial gains or losses expense components of net periodic benefit cost. The Company previously used the calculated value approach for all plan assets, deferring over three years the impact on these amounts of asset gains or losses that differed from expected returns. 3M changed to the fair value approach for calculating market-related value for the fixed income class of plan assets, which does not involve deferring the impact of excess plan asset gains or losses in the determination of these two components of net periodic benefit cost. 3M considers the use of the fair value approach preferrable to the calculated value approach as it results in a more current reflection of impacts of changes in value of these plan assets in the determination of net periodic benefit cost. Additionally, given the plans’ liability-driven investment strategy whereby the changes in value of the fixed income plan assets should offset changes in the value of the plans’ liabilities, this approach more closely aligns the expected return on plan assets expense component with the value reflected in the plans’ funded status. This change was applied retrospectively to all periods presented within 3M’s financial statements. The change did not impact consolidated operating income or net cash provided by operating activities but did impact the previously reported portion of pension and postretirement net periodic benefit cost (benefit) that was included within non-operating other expense (income) along with related consolidated income items such as net income and earnings per share. Other impacts included related changes to previously reported consolidated other comprehensive income, retained earnings, accumulated other comprehensive income (loss), and associated line items within the determination of net cash provided by operating activities. For classes of plan assets other than fixed income investments, the Company continues to use the calculated value approach to determine their market-related value.

7

The adoption of this change impacted previously reported amounts included herein as indicated in the tables below.

Consolidated Statement of Income	Three months ended	Six months ended
	June 30, 2020	June 30, 2020
	Under Prior	Under Prior
(Millions, except per share amounts)	Method