This Current Report on Form 8-K includes supplemental unaudited historical business segment and disaggregated revenue information that reflects the following:
•Changes in the measure of segment operating performance used by 3M’s chief operating decision maker
The Company did not operate using this measure of segment operating performance in periods prior to the first quarter of 2022 and will begin to report comparative results under this basis with the filing of its Quarterly Report on Form 10-Q for the quarter ending March 31, 2022. Until 3M’s interim financial statements as of and for the quarter ending March 31, 2022 are issued, amounts on the updated basis are not in accordance with U.S. GAAP and, as a result, are considered non-GAAP measures. The Company is furnishing this information as it believes it is useful to investors to aid in understanding, on a timely basis, the impacts of these changes on historical periods as they prepare to consider 3M’s future results on the updated basis.
The information contained in this Current Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act.
Changes in the measure of segment operating performance used by 3M’s chief operating decision maker (CODM)
Note 19 to 3M’s consolidated financial statements in its 2021 Annual Report on Form 10-K describes 3M’s business segments and measure of segment operating performance used by 3M’s CODM. As discussed therein, the measure of segment operating performance included dual credit for certain sales and related operating income.
Effective in the first quarter of 2022, the measure of segment operating performance used by 3M’s CODM changed and, as a result, 3M’s disclosed measure of segment profit/loss (business segment operating income) will be updated for all comparative periods presented. The change to business segment sales and operating income aligns with the update to how the CODM assesses performance and allocates resources for the Company’s business segments. The change included the following:
Eliminating inclusion of dual credit in measure of segment operating performance
3M business segment operating performance measures were updated to no longer include dual credit to business segments for certain sales and related operating income. Management previously evaluated its business segments based on net sales and operating income performance, including dual credit reporting. 3M reflected 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 was provided by a different business segment. 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) previously would also have received credit for the associated net sales initiated through its sales district and the related approximate operating income. The offset to the dual credit business segment reporting was reflected as a reconciling item entitled “Elimination of Dual Credit,” such that sales and operating income in total were unchanged.
The tables below provide additional information with respect to the expected impact of the changes described above on previously reported segment and disaggregated revenue information. 3M discloses business segment operating income as its measure of segment profit/loss, reconciled to both total 3M operating income and income before taxes.
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| | Updated Basis (non-GAAP measure) | | Total Year |
Net Sales (Millions) | | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | Previously Reported | | Impact of Changes | | Updated basis (non-GAAP measure) |
Safety and Industrial | | | | | | | | | | | | | | |
2021 | | $ | 3,099 | | | $ | 3,029 | | | $ | 3,005 | | | $ | 2,848 | | | $ | 12,880 | | | $ | (899) | | | $ | 11,981 | |
2020 | | 2,733 | | | 2,487 | | | 2,820 | | | 2,932 | | | 11,734 | | | (762) | | | 10,972 | |
2019 | | 2,758 | | | 2,736 | | | 2,619 | | | 2,591 | | | 11,490 | | | (786) | | | 10,704 | |
Transportation and Electronics | | | | | | | | | | | | | | |
2021 | | $ | 2,396 | | | $ | 2,355 | | | $ | 2,327 | | | $ | 2,184 | | | $ | 9,769 | | | $ | (507) | | | $ | 9,262 | |
2020 | | 2,130 | | | 1,849 | | | 2,206 | | | 2,221 | | | 8,833 | | | (427) | | | 8,406 | |
2019 | | 2,245 | | | 2,341 | | | 2,383 | | | 2,178 | | | 9,595 | | | (448) | | | 9,147 | |
Health Care | | | | | | | | | | | | | | |
2021 | | $ | 2,069 | | | $ | 2,165 | | | $ | 2,173 | | | $ | 2,190 | | | $ | 9,050 | | | $ | (453) | | | $ | 8,597 | |
2020 | | 2,048 | | | 1,683 | | | 2,004 | | | 2,097 | | | 8,345 | | | (513) | | | 7,832 | |
2019 | | 1,713 | | | 1,808 | | | 1,702 | | | 2,122 | | | 7,431 | | | (86) | | | 7,345 | |
Consumer | | | | | | | | | | | | | | |
2021 | | $ | 1,289 | | | $ | 1,400 | | | $ | 1,434 | | | $ | 1,390 | | | $ | 5,856 | | | $ | (343) | | | $ | 5,513 | |
2020 | | 1,164 | | | 1,156 | | | 1,322 | | | 1,334 | | | 5,311 | | | (335) | | | 4,976 | |
2019 | | 1,125 | | | 1,238 | | | 1,259 | | | 1,209 | | | 5,129 | | | (298) | | | 4,831 | |
Corporate and Unallocated | | | | | | | | | | | | | | |
2021 | | $ | (2) | | | $ | 1 | | | $ | 3 | | | $ | — | | | $ | 2 | | | $ | — | | | $ | 2 | |
2020 | | — | | | 1 | | | (2) | | | (1) | | | (2) | | | — | | | (2) | |
2019 | | 22 | | | 48 | | | 28 | | | 11 | | | 109 | | | — | | | 109 | |
Elimination of Dual Credit | | | | | | | | | | | | | | |
2021 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (2,202) | | | $ | 2,202 | | | $ | — | |
2020 | | — | | | — | | | — | | | — | | | (2,037) | | | 2,037 | | | — | |
2019 | | — | | | — | | | — | | | — | | | (1,618) | | | 1,618 | | | — | |
Total Company | | | | | | | | | | | | | | |
2021 | | $ | 8,851 | | | $ | 8,950 | | | $ | 8,942 | | | $ | 8,612 | | | $ | 35,355 | | | $ | — | | | $ | 35,355 | |
2020 | | 8,075 | | | 7,176 | | | 8,350 | | | 8,583 | | | 32,184 | | | — | | | 32,184 | |
2019 | | 7,863 | | | 8,171 | | | 7,991 | | | 8,111 | | | 32,136 | | | — | | | 32,136 | |
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| | Updated Basis (non-GAAP measure) | | Total Year |
Operating Performance (millions) | | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | Previously Reported | | Impact of Changes | | Updated basis (non-GAAP measure) |
Safety and Industrial | | | | | | | | | | | | | | |
2021 | | $ | 752 | | | $ | 662 | | | $ | 562 | | | $ | 490 | | | $ | 2,692 | | | $ | (226) | | | $ | 2,466 | |
2020 | | 645 | | | 580 | | | 723 | | | 640 | | | 2,784 | | | (196) | | | 2,588 | |
2019 | | 568 | | | 572 | | | 562 | | | 477 | | | 2,373 | | | (194) | | | 2,179 | |
Transportation and Electronics | | | | | | | | | | | | | | |
2021 | | $ | 556 | | | $ | 513 | | | $ | 435 | | | $ | 376 | | | $ | 2,008 | | | $ | (128) | | | $ | 1,880 | |
2020 | | 436 | | | 338 | | | 484 | | | 443 | | | 1,814 | | | (113) | | | 1,701 | |
2019 | | 465 | | | 547 | | | 576 | | | 422 | | | 2,119 | | | (109) | | | 2,010 | |
Health Care | | | | | | | | | | | | | | |
2021 | | $ | 464 | | | $ | 548 | | | $ | 510 | | | $ | 515 | | | $ | 2,150 | | | $ | (113) | | | $ | 2,037 | |
2020 | | 438 | | | 266 | | | 454 | | | 504 | | | 1,790 | | | (128) | | | 1,662 | |
2019 | | 435 | | | 466 | | | 437 | | | 436 | | | 1,796 | | | (22) | | | 1,774 | |
Consumer | | | | | | | | | | | | | | |
2021 | | $ | 269 | | | $ | 290 | | | $ | 308 | | | $ | 295 | | | $ | 1,248 | | | $ | (86) | | | $ | 1,162 | |
2020 | | 243 | | | 259 | | | 321 | | | 296 | | | 1,203 | | | (84) | | | 1,119 | |
2019 | | 205 | | | 246 | | | 279 | | | 271 | | | 1,075 | | | (74) | | | 1,001 | |
Elimination of Dual Credit | | | | | | | | | | | | | | |
2021 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (553) | | | $ | 553 | | | $ | — | |
2020 | | — | | | — | | | — | | | — | | | (521) | | | 521 | | | — | |
2019 | | — | | | — | | | — | | | — | | | (399) | | | 399 | | | — | |
Total business segment operating income | | | | | | | | | | |
2021 | | $ | 2,041 | | | $ | 2,013 | | | $ | 1,815 | | | $ | 1,676 | | | $ | 7,545 | | | $ | — | | | $ | 7,545 | |
2020 | | 1,762 | | | 1,443 | | | 1,982 | | | 1,883 | | | 7,070 | | | — | | | 7,070 | |
2019 | | 1,673 | | | 1,831 | | | 1,854 | | | 1,606 | | | 6,964 | | | — | | | 6,964 | |
Corporate and Unallocated | | | | | | | | | | | | | | |
2021 | | $ | (47) | | | $ | (42) | | | $ | (27) | | | $ | (60) | | | $ | (176) | | | $ | — | | | $ | (176) | |
2020 | | (99) | | | 297 | | | (73) | | | (34) | | | 91 | | | — | | | 91 | |
2019 | | (537) | | | (129) | | | 157 | | | (281) | | | (790) | | | — | | | (790) | |
Total Company operating income | | | | | | | | | | | | |
2021 | | $ | 1,994 | | | $ | 1,971 | | | $ | 1,788 | | | $ | 1,616 | | | $ | 7,369 | | | $ | — | | | $ | 7,369 | |
2020 | | 1,663 | | | 1,740 | | | 1,909 | | | 1,849 | | | 7,161 | | | — | | | 7,161 | |
2019 | | 1,136 | | | 1,702 | | | 2,011 | | | 1,325 | | | 6,174 | | | — | | | 6,174 | |
Other expense/(income), net | | | | | | | | | | | | |
2021 | | | | | | | | | | $ | 165 | | | $ | — | | | $ | 165 | |
2020 | | | | | | | | | | 366 | | | — | | | 366 | |
2019 | | | | | | | | | | 531 | | | — | | | 531 | |
Income before income taxes | | | | | | | | | | | | | | |
2021 | | | | | | | | | | $ | 7,204 | | | $ | — | | | $ | 7,204 | |
2020 | | | | | | | | | | 6,795 | | | — | | | 6,795 | |
2019 | | | | | | | | | | 5,643 | | | — | | | 5,643 | |
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Disaggregated revenue information |
| | Updated Basis (non-GAAP measure) |
| | Year ended December 31, |
Net Sales (Millions) | | 2021 | | 2020 | | 2019 |
Abrasives | | $ | 1,296 | | | $ | 1,077 | | | $ | 1,280 | |
Automotive Aftermarket | | 1,164 | | | 1,028 | | | 1,152 | |
Closure and Masking Systems | | 1,033 | | | 993 | | | 1,111 | |
Electrical Markets | | 1,229 | | | 1,093 | | | 1,180 | |
Industrial Adhesives and Tapes | | 2,353 | | | 2,000 | | | 2,114 | |
Personal Safety | | 4,470 | | | 4,408 | | | 3,472 | |
Roofing Granules | | 428 | | | 389 | | | 366 | |
Other Safety and Industrial | | 8 | | | (16) | | | 29 | |
Total Safety and Industrial Business Segment | | 11,981 | | | 10,972 | | | 10,704 | |
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Advanced Materials | | 1,200 | | | 1,029 | | | 1,236 | |
Automotive and Aerospace | | 1,756 | | | 1,522 | | | 1,806 | |
Commercial Solutions | | 1,717 | | | 1,486 | | | 1,733 | |
Electronics | | 3,673 | | | 3,497 | | | 3,446 | |
Transportation Safety | | 907 | | | 880 | | | 932 | |
Other Transportation and Electronics | | 9 | | | (8) | | | (6) | |
Total Transportation and Electronics Business Segment | | 9,262 | | | 8,406 | | | 9,147 | |
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Drug Delivery | | — | | | 146 | | | 371 | |
Food Safety | | 368 | | | 337 | | | 337 | |
Health Information Systems | | 1,220 | | | 1,140 | | | 1,177 | |
Medical Solutions | | 4,632 | | | 4,288 | | | 3,361 | |
Oral Care | | 1,420 | | | 1,071 | | | 1,320 | |
Separation and Purification Sciences | | 956 | | | 848 | | | 784 | |
Other Health Care | | 1 | | | 2 | | | (5) | |
Total Health Care Business Group | | 8,597 | | | 7,832 | | | 7,345 | |
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Consumer Health and Safety | | 588 | | | 540 | | | 583 | |
Home Care | | 1,074 | | | 1,043 | | | 968 | |
Home Improvement | | 2,548 | | | 2,260 | | | 2,001 | |
Stationery and Office | | 1,306 | | | 1,132 | | | 1,286 | |
Other Consumer | | (3) | | | 1 | | | (7) | |
Total Consumer Business Group | | 5,513 | | | 4,976 | | | 4,831 | |
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Corporate and Unallocated | | 2 | | | (2) | | | 109 | |
Total Company | | $ | 35,355 | | | $ | 32,184 | | | $ | 32,136 | |