mmm-20230930

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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, 2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

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

MMM

Chicago Stock Exchange, Inc.

1.500% Notes due 2026

MMM26

New York Stock Exchange

1.750% Notes due 2030

MMM30

New York Stock Exchange

1.500% Notes due 2031

MMM31

New York Stock Exchange

Note: The common stock of the Registrant is also traded on the SIX Swiss Exchange.

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, 2023
Common Stock, $0.01 par value per share						552,317,038 shares

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3M COMPANY

Form 10-Q for the Quarterly Period Ended September 30, 2023


TABLE OF CONTENTS			PAGE
PART I. Financial Information			3
Item 1. Financial Statements			3
Consolidated Statement of Income (Loss)			3
Consolidated Statement of Comprehensive Income (Loss)			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			8
NOTE 3. Acquisitions and Divestitures			10
NOTE 4. Goodwill and Intangible Assets			11
NOTE 5. Restructuring Actions			12
NOTE 6. Supplemental Income (Loss) Statement Information			14
NOTE 7. Supplemental Equity and Comprehensive Income (Loss) Information			14
NOTE 8. Income Taxes			18
NOTE 9. Marketable Securities			19
NOTE 10. Long-Term Debt and Short-Term Borrowings			19
NOTE 11. Pension and Postretirement Benefit Plans			20
NOTE 12. Derivatives			21
NOTE 13. Fair Value Measurements			24
NOTE 14. Commitments and Contingencies			27
NOTE 15. Business Segments			52
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			54
OVERVIEW			54
RESULTS OF OPERATIONS			63
PERFORMANCE BY BUSINESS SEGMENT			65
FINANCIAL CONDITION AND LIQUIDITY			71
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			78
Item 1. Legal Proceedings.			78
Item 1A. Risk Factors.			78
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			86
Item 3. Defaults Upon Senior Securities			86
Item 4. Mine Safety Disclosures			86
Item 5. Other Information			87
Item 6. Exhibits			87

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3M COMPANY

FORM 10-Q

For the Quarterly Period Ended September 30, 2023

PART I. Financial Information

Item 1. Financial Statements

3M Company and Subsidiaries

Consolidated Statement of Income (Loss)

(Unaudited)


	Three months ended September 30,				Nine months ended September 30,
(Millions, except per share amounts)	2023		2022		2023		2022
Net sales	$	8,312	$	8,619	$	24,668	$	26,150

Operating expenses
Cost of sales	4,580		4,728		13,799		14,647
Selling, general and administrative expenses	5,992		1,998		19,901		6,903
Research, development and related expenses	430		461		1,375		1,417
Gain on business divestitures	(36)		(2,724)		(36)		(2,724)

Total operating expenses	10,966		4,463		35,039		20,243
Operating income (loss)	(2,654)		4,156		(10,371)		5,907

Other expense (income), net	200		24		317		112

Income (loss) before income taxes	(2,854)		4,132		(10,688)		5,795
Provision (benefit) for income taxes	(781)		271		(2,755)		550
Income (loss) of consolidated group	(2,073)		3,861		(7,933)		5,245

Income (loss) from unconsolidated subsidiaries, net of taxes	2		2		7		3
Net income (loss) including noncontrolling interest	(2,071)		3,863		(7,926)		5,248

Less: Net income (loss) attributable to noncontrolling interest	4		4		14		12

Net income (loss) attributable to 3M	$	(2,075)	$	3,859	$	(7,940)	$	5,236

Weighted average 3M common shares outstanding — basic	554.3		568.8		553.7		570.7
Earnings (loss) per share attributable to 3M common shareholders — basic	$	(3.74)	$	6.79	$	(14.34)	$	9.18

Weighted average 3M common shares outstanding — diluted	554.3		570.0		553.7		572.6
Earnings (loss) per share attributable to 3M common shareholders — diluted	$	(3.74)	$	6.77	$	(14.34)	$	9.15

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 (Loss)

(Unaudited)


	Three months ended September 30,				Nine months ended September 30,
(Millions)	2023		2022		2023		2022
Net income (loss) including noncontrolling interest	$	(2,071)	$	3,863	$	(7,926)	$	5,248
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	(365)		(821)		(224)		(1,697)
Defined benefit pension and postretirement plans adjustment	50		86		151		258
Cash flow hedging instruments	21		110		20		197
Total other comprehensive income (loss), net of tax	(294)		(625)		(53)		(1,242)
Comprehensive income (loss) including noncontrolling interest	(2,365)		3,238		(7,979)		4,006
Comprehensive (income) loss attributable to noncontrolling interest	(3)		(2)		(14)		(5)
Comprehensive income (loss) attributable to 3M	$	(2,368)	$	3,236	$	(7,993)	$	4,001

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

(Unaudited)


(Dollars in millions, except per share amount)	September 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	5,140	$	3,655
Marketable securities — current	73		238
Accounts receivable — net of allowances of $155 and $174	4,852		4,532
Inventories
Finished goods	2,405		2,497
Work in process	1,491		1,606
Raw materials and supplies	1,169		1,269
Total inventories	5,065		5,372
Prepaids	578		435
Other current assets	490		456
Total current assets	16,198		14,688
Property, plant and equipment	26,189		25,998
Less: Accumulated depreciation	(17,185)		(16,820)
Property, plant and equipment — net	9,004		9,178
Operating lease right of use assets	782		829
Goodwill	12,721		12,790
Intangible assets — net	4,324		4,699
Other assets	6,592		4,271
Total assets	$	49,621	$	46,455
Liabilities
Current liabilities
Short-term borrowings and current portion of long-term debt	$	3,137	$	1,938
Accounts payable	3,104		3,183
Accrued payroll	905		692
Accrued income taxes	220		259
Operating lease liabilities — current	234		261
Other current liabilities	7,866		3,190
Total current liabilities	15,466		9,523
Long-term debt	12,876		14,001
Pension and postretirement benefits	1,846		1,966
Operating lease liabilities	550		580
Other liabilities	14,152		5,615
Total liabilities	44,890		31,685
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, 2023: 552,317,038
Shares outstanding - December 31, 2022: 549,245,105
Additional paid-in capital	6,903		6,691
Retained earnings	37,375		47,950
Treasury stock, at cost:	(32,889)		(33,255)
Shares at September 30, 2023: 391,716,018
Shares at December 31, 2022: 394,787,951
Accumulated other comprehensive income (loss)	(6,726)		(6,673)
Total 3M Company shareholders’ equity	4,672		14,722
Noncontrolling interest	59		48
Total equity	4,731		14,770
Total liabilities and equity	$	49,621	$	46,455

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

(Unaudited)


	Nine months ended September 30,
(Millions)	2023		2022
Cash Flows from Operating Activities
Net income (loss) including noncontrolling interest	$	(7,926)	$	5,248
Adjustments to reconcile net income (loss) including noncontrolling interest to net cash provided by operating activities
Depreciation and amortization	1,450		1,371


Company pension and postretirement contributions	(85)		(102)
Company pension and postretirement expense	113		124
Stock-based compensation expense	222		226
Gain on business divestitures	(36)		(2,724)
Deferred income taxes	(3,468)		(495)
Changes in assets and liabilities
Accounts receivable	(371)		(467)
Inventories	236		(1,018)
Accounts payable	118		175
Accrued income taxes (current and long-term)	(369)		(11)
Other — net	14,810		1,342
Net cash provided by (used in) operating activities	4,694		3,669

Cash Flows from Investing Activities
Purchases of property, plant and equipment (PP&E)	(1,257)		(1,243)
Proceeds from sale of PP&E and other assets	114		65

Purchases of marketable securities and investments	(1,143)		(840)
Proceeds from maturities and sale of marketable securities and investments	1,292		868
Proceeds from sale of businesses, net of cash sold	60		13
Cash payment from Food Safety business split-off, net of divested cash	—		478
Other — net	28		1
Net cash provided by (used in) investing activities	(906)		(658)

Cash Flows from Financing Activities
Change in short-term debt — net	485		340
Repayment of debt (maturities greater than 90 days)	(2,434)		(1,179)
Proceeds from debt (maturities greater than 90 days)	2,011		1
Purchases of treasury stock	(31)		(928)
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans	245		310
Dividends paid to shareholders	(2,483)		(2,550)
Other — net	(16)		(29)
Net cash provided by (used in) financing activities	(2,223)		(4,035)

Effect of exchange rate changes on cash and cash equivalents	(80)		(136)

Net increase (decrease) in cash and cash equivalents	1,485		(1,160)
Cash and cash equivalents at beginning of year	3,655		4,564
Cash and cash equivalents at end of period	$	5,140	$	3,404

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

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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.

In the second quarter of 2023, 3M re-consolidated the Aearo Technology and certain of its related entities (collectively, the "Aearo Entities") as a result of the court dismissal of their voluntary bankruptcy proceedings. 3M had previously deconsolidated these entities in the third quarter of 2022. See additional information in Note 14.

Effective in the first quarter of 2023, 3M made changes in the measure of segment operating performance and segment composition used by 3M’s chief operating decision maker—impacting 3M’s disclosed measure of segment profit/loss (business segment operating income (loss)). Also effective in the first quarter of 2023, 3M's Consumer business segment re-aligned from four divisions to three divisions, see additional information in Note 15. 3M's disclosed disaggregated revenue was also updated as a result of these changes, see additional information in Note 2. Information provided herein reflects the impact of these changes for all periods presented.

Earnings (Loss) 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 a result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans were not included in the computation of diluted earnings (loss) per share attributable to 3M common shareholders because they would have had an anti-dilutive effect of 35.6 million and 36.0 million average options for the three and nine months ended September 30, 2023, respectively, and 31.7 million and 28.9 million average options for the three and nine months ended September 30, 2022, respectively. In periods of net losses, these anti-dilutive effects include all weighted option shares outstanding and weighted average shares is the same for the calculations of both basic and diluted loss per share. The computations for basic and diluted earnings (loss) per share follow:

Earnings (Loss) Per Share Computations


	Three months ended September 30,				Nine months ended September 30,
(Amounts in millions, except per share amounts)	2023		2022		2023		2022
Numerator:
Net income (loss) attributable to 3M	$	(2,075)	$	3,859	$	(7,940)	$	5,236

Denominator:
Denominator for weighted average 3M common shares outstanding – basic	554.3		568.8		553.7		570.7
Dilution associated with the Company’s stock-based compensation plans	—		1.2		—		1.9
Denominator for weighted average 3M common shares outstanding – diluted	554.3		570.0		553.7		572.6

Earnings (loss) per share attributable to 3M common shareholders — basic	$	(3.74)	$	6.79	$	(14.34)	$	9.18
Earnings (loss) per share attributable to 3M common shareholders — diluted	$	(3.74)	$	6.77	$	(14.34)	$	9.15

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Supplier Finance Program Obligations

Under supplier finance programs, 3M agrees to pay participating banks the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices, generally within 90 days of the invoice date. 3M or the banks may terminate the agreements with advance notice. Separately, the banks may have arrangements with the suppliers that provide them the option to request early payment from the banks for invoices confirmed by 3M. 3M's outstanding balances of confirmed invoices in the programs as of September 30, 2023 and December 31, 2022 were approximately $320 million and $260 million, respectively. These amounts are included within accounts payable on 3M's consolidated balance sheet.

New Accounting Pronouncements

Refer to Note 1 to the Consolidated Financial Statements in 3M’s 2022 Annual Report on Form 10-K for a discussion of applicable standards issued and not yet adopted by 3M.

NOTE 2. Revenue

Contract Balances:

Deferred revenue primarily relates to revenue that is recognized over time for one-year software license contracts. Deferred revenue (current portion) as of September 30, 2023 and December 31, 2022 was $501 million and $538 million, respectively. Approximately $110 million and $460 million of the December 31, 2022 balance was recognized as revenue during the three and nine months ended September 30, 2023, respectively, while approximately $100 million and $440 million of the December 31, 2021 balance was recognized as revenue during the three and nine months ended September 30, 2022, respectively.

Operating Lease Revenue:

Net sales includes rental revenue from durable medical devices as part of operating lease arrangements (reported within the Medical Solutions Division), which was $154 million and $439 million during the three and nine months ended September 30, 2023, respectively, and $145 million and $429 million during the three and nine months ended September 30, 2022, respectively.

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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:


	Three months ended September 30,				Nine months ended September 30,
Net Sales (Millions)	2023		2022		2023		2022
Abrasives	$	330	$	339	$	1,005	$	1,014
Automotive Aftermarket	316		316		933		900
Closure and Masking Systems	240		266		726		794
Electrical Markets	327		331		980		976
Industrial Adhesives and Tapes	544		598		1,633		1,805
Personal Safety	862		922		2,643		3,021
Roofing Granules	132		122		375		359

Total Safety and Industrial Business Segment	2,751		2,894		8,295		8,869

Advanced Materials	274		297		880		909
Automotive and Aerospace	507		437		1,446		1,325
Commercial Solutions	430		459		1,317		1,361
Electronics	738		813		2,124		2,599
Transportation Safety	222		233		645		653

Total Transportation and Electronics Business Segment	2,171		2,239		6,412		6,847


Food Safety	—		63		—		244
Health Information Systems	305		312		907		921
Medical Solutions	1,179		1,150		3,463		3,447
Oral Care	331		308		1,023		1,006
Separation and Purification Sciences	242		235		721		757
Other Health Care	16		8		44		8
Total Health Care Business Group	2,073		2,076		6,158		6,383

Construction and Home Improvement Markets	603		656		1,674		1,819
Home, Health and Auto Care	391		418		1,219		1,283
Stationery and Office	321		335		907		946

Total Consumer Business Group	1,315		1,409		3,800		4,048

Corporate and Unallocated	2		1		3		3
Total Company	$	8,312	$	8,619	$	24,668	$	26,150


	Three months ended September 30,				Nine months ended September 30,
Net Sales (Millions)	2023		2022		2023		2022
Americas	$	4,769	$	4,741	$	13,846	$	13,930
Asia Pacific	2,097		2,485		6,411		7,702
Europe, Middle East and Africa	1,446		1,393		4,411		4,518

Worldwide	$	8,312	$	8,619	$	24,668	$	26,150

Americas included United States net sales to customers of $3.9 billion and $11.3 billion for the three and nine months ended September 30, 2023, respectively, and $3.9 billion and $11.4 billion for the three and nine months ended September 30, 2022, respectively.

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NOTE 3. Acquisitions and Divestitures

Refer to Note 3 to the Consolidated Financial Statements in 3M's 2022 Annual Report on Form 10-K for more information on relevant pre-2023 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.

2023 acquisitions:

There were no acquisitions that closed during the nine months ended September 30, 2023.

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. As discussed in Note 15 (Business Segments), gains/losses on business divestitures are reflected in Corporate and Unallocated.

2023 divestitures and previously announced divestitures:

In August 2023, 3M completed the sale of assets associated with its dental local anesthetic business (part of the Health Care business) to Pierrel S.p.A. for approximately $60 million in cash. The dental local anesthetic business had annual sales of approximately $30 million. The gain on this transaction, net of a loss associated with a previous contingent indemnification obligation from a 2020 divestiture, resulted in a 2023 net pre-tax gain of $36 million.

In July 2022, 3M announced its intention to spin off the Health Care business as a separate public company. 3M expects to initially retain an ownership position of 19.9% in the business, which 3M intends to monetize over time. The spin-off transaction is intended to be tax-free for U.S. federal income tax purposes and is subject to customary conditions, including the filing and effectiveness of a Form 10 registration statement, receipt of a private letter ruling from the Internal Revenue Service and a tax opinion from external counsel, satisfactory completion of financing, and final approval by the Company’s Board of Directors, among other items. 3M expects to close the transaction in the first half of 2024, subject to required conditions, as well as additional factors such as conditions in the equity and debt markets, other external conditions, and developments involving 3M or any of its businesses, which could delay the completion of the transaction relative to the anticipated timeline. Because the intended transaction is a spin-off, the Health Care business is not classified as held for sale.

Operating income and held-for-sale amounts:

With respect to the businesses above, operating income information of the Health Care business is included in Note 15. Further, with the respect to these businesses, there were no assets and liabilities associated with disposal groups classified as held for sale as of December 31, 2022 and September 30, 2023. Information related to other held for sale disposal groups is included in Note 13.

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NOTE 4. Goodwill and Intangible Assets

Goodwill

There was no goodwill recorded from acquisitions during the first nine months of 2023. The amounts in the “Translation and other” row 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, 2022	$	4,509	$	1,501	$	6,515	$	265	$	12,790

Divestiture activity	—		—		(4)		—		(4)

Translation and other	(17)		(3)		(43)		(2)		(65)
Balance as of September 30, 2023	$	4,492	$	1,498	$	6,468	$	263	$	12,721

Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as when events or conditions indicate that goodwill assigned to a reporting unit may be impaired. At 3M, reporting units correspond to a division. As described in Note 15, effective in the first quarter of 2023, 3M changed its measure of segment operating performance and the composition of reportable segments and realigned divisions within the Consumer business segment. For any 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. The impacts of these changes on reported amounts were immaterial and resulted in no impairment. As of September 30, 2023, the Company's accumulated goodwill impairment loss is $0.3 billion.

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 follow:



(Millions)	September 30, 2023		December 31, 2022
Customer related intangible assets	$	4,046	$	4,062
Patents	428		426
Other technology-based intangible assets	2,083		2,081
Definite-lived tradenames	1,165		1,166
Other amortizable intangible assets	81		84
Total gross carrying amount	7,803		7,819

Accumulated amortization — customer related	(1,901)		(1,747)
Accumulated amortization — patents	(426)		(421)
Accumulated amortization — other technology-based	(1,140)		(1,000)
Accumulated amortization — definite-lived tradenames	(558)		(509)
Accumulated amortization — other	(59)		(60)
Total accumulated amortization	(4,084)		(3,737)

Total finite-lived intangible assets — net	3,719		4,082

Non-amortizable intangible assets (primarily tradenames)	605		617
Total intangible assets — net	$	4,324	$	4,699

Certain tradenames acquired by 3M are not amortized because they have been in existence for over 60 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.

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Amortization expense follows:


	Three months ended September 30,				Nine months ended September 30,
(Millions)	2023		2022		2023		2022
Amortization expense	$	122	$	124	$	365	$	384

Expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2023 follows:


(Millions)	Remainder of 2023		2024		2025		2026		2027		2028		After 2028
Amortization expense	$	115	$	452	$	422	$	416	$	392	$	366	$	1,556

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. 3M expenses the costs incurred to renew or extend the term of intangible assets.

NOTE 5. Restructuring Actions

2023 to 2025 Structural Reorganization Actions

In the first quarter of 2023, 3M announced it would undertake structural reorganization actions to reduce the size of the corporate center of the Company, simplify supply chain, streamline 3M’s geographic footprint, reduce layers of management, further align business go-to-market models to customers, and reduce manufacturing roles to align with production volumes. During 2023, management approved and committed to undertake associated actions impacting approximately 5,200 positions resulting in a pre-tax charge of $62 million and $326 million in the third quarter and nine months ended September 30, 2023, respectively. Remaining activities related to the restructuring actions approved and committed under this initiative are expected to be largely completed through the end of 2023. 3M expects to commit to further actions under this initiative. This aggregate initiative beginning in the first quarter of 2023 and continuing through 2025 is expected to impact approximately 8,500 positions worldwide with an expected pre-tax charge of $700 million to $900 million over that period.

The related restructuring charges for periods presented were recorded in the income (loss) statement as follows:


(Millions)	Three months ended September 30, 2023		Nine months ended September 30, 2023
Cost of sales	$	4	$	67
Selling, general and administrative expenses	55		233
Research, development and related expenses	3		26
Total operating income impact	$	62	$	326

The business segment operating income (loss) impact of these restructuring charges is summarized as follows:


	Three months ended September 30, 2023						Nine months ended September 30, 2023
(Millions)	Employee Related		Asset-Related and Other		Total		Employee Related		Asset-Related and Other		Total
Safety and Industrial	$	10	$	—	$	10	$	64	$	—	$	64
Transportation and Electronics	9		—		9		46		—		46
Health Care	4		—		4		16		—		16
Consumer	3		—		3		19		—		19
Corporate and unallocated	4		32		36		129		52		181
Total operating expense	$	30	$	32	$	62	$	274	$	52	$	326

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


(Millions)	Employee-Related		Asset-Related and Other		Total
Expense incurred in the first quarter of 2023	$	52	$	—	$	52
Incremental expense incurred in the second quarter of 2023	192		20		212
Incremental expense incurred in the third quarter of 2023	30		32		62

Non-cash changes	—		(52)		(52)
Cash payments	(156)		—		(156)
Accrued restructuring action balance as of September 30, 2023	$	118	$	—	$	118

2023 to 2025 PFAS Exit Actions

As further discussed in Note 14, 3M announced in December 2022 that it will exit all PFAS manufacturing by the end of 2025. In the third quarter of 2023, 3M management approved and committed to undertake certain related workforce actions impacting approximately 100 positions resulting in a pre-tax charge of $40 million primarily impacting cost of sales. These charges are reflected within the Transportation and Electronics business segment. There were no material cash payments during the 2023 periods presented related to these actions. The remaining period of activities related to these approved and committed actions aligns with 3M's PFAS exit timeframe.

2022 Restructuring Actions

Operational/Marketing Capability Restructuring:

As described in Note 5 in 3M's 2022 Annual Report on Form 10-K, in late 2020, 3M announced it would undertake certain actions beginning in the fourth quarter of 2020 to further enhance its operations and marketing capabilities to take advantage of certain global market trends while de-prioritizing investments in slower-growth end markets. In the first quarter of 2022, management approved and committed to undertake the remaining actions under this initiative resulting in a pre-tax charge of $18 million. This initiative, beginning in 2020 and ending with committed first quarter 2022 actions, impacted approximately 3,100 positions worldwide with a pre-tax charge of approximately $280 million over that period. Activities related to this restructuring were largely completed in the third quarter of 2022.

Divestiture-Related Restructuring:

As described in Note 5 in 3M's 2022 Annual Report on Form 10-K, during the third quarter of 2022, following the Food Safety Division split-off transaction and combination with Neogen completed in September 2022 (see Note 3 in 3M's 2022 Annual Report on Form 10-K) management approved and committed to undertake certain restructuring actions addressing corporate functional costs across 3M in relation to the magnitude of amounts previously allocated to the divested business.

These actions affected approximately 850 positions worldwide and resulted in a third quarter 2022 pre-tax charge of $41 million, within Corporate and Unallocated. The associated accrued restructuring balance as of December 31, 2022 was $10 million and remaining activities related to this divestiture-related restructuring were largely completed through the first half of 2023.

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NOTE 6. Supplemental Income (Loss) Statement Information

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


	Three months ended September 30,				Nine months ended September 30,
(Millions)	2023		2022		2023		2022
Interest expense	$	304	$	106	$	571	$	347
Interest income	(73)		(17)		(161)		(36)
Pension and postretirement net periodic benefit cost (benefit)	(31)		(65)		(93)		(199)
Total	$	200	$	24	$	317	$	112

In addition to interest primarily related to outstanding debt, interest expense includes imputed interest associated with the obligations resulting from the PFAS-related public water systems proposed settlement and the Combat Arms Earplugs settlement (discussed in Note 14).

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. Refer to Note 11 for additional details on the components of pension and postretirement net periodic benefit costs.

NOTE 7. Supplemental Equity and Comprehensive Income (Loss) Information

Cash dividends declared and paid totaled $1.50 and $1.49 per share for the first, second and third quarters of 2023 and 2022, respectively, or $4.50 and $4.47 per share for the first nine months of 2023 and 2022, respectively.

Consolidated Changes in Equity

Three months ended September 30, 2023


			3M Company Shareholders
(Millions)	Total		Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interest
Balance at June 30, 2023	$	7,857	$	6,867	$	40,290	$	(32,926)	$	(6,433)	$	59
Net income (loss)	(2,071)				(2,075)						4
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	(365)								(364)		(1)
Defined benefit pension and post-retirement plans adjustment	50								50
Cash flow hedging instruments	21								21
Total other comprehensive income (loss), net of tax	(294)
Dividends declared	(828)				(828)

Stock-based compensation	45		45
Reacquired stock	(2)						(2)

Dividend to noncontrolling interest	(3)										(3)
Issuances pursuant to stock option and benefit plans	27				(12)		39
Balance at September 30, 2023	$	4,731	$	6,912	$	37,375	$	(32,889)	$	(6,726)	$	59

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Three months ended September 30, 2022


			3M Company Shareholders
(Millions)	Total		Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interest
Balance at June 30, 2022	$	13,816	$	6,616	$	45,269	$	(30,781)	$	(7,362)	$	74
Net income	3,863				3,859						4
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	(821)								(819)		(2)
Defined benefit pension and post-retirement plans adjustment	86								86
Cash flow hedging instruments	110								110
Total other comprehensive income (loss), net of tax	(625)
Dividends declared	(850)				(850)
Stock-based compensation	47		47
Reacquired stock	(191)						(191)
Split-off of Food Safety business	(1,988)						(1,988)