3M CO

Results of Operations

Net Sales: Percent change information compares the three and six months ended June 30, 2025 and 2024, unless otherwise indicated. Discussion of business segment results is provided in the Performance by Business Segment section. Information regarding sales by geographic area is included below.

3 Acquisition and divestiture sales change impacts are measured separately for the first twelve months post-transaction and, beginning April 2024, include, within divestitures, the impact of commercial agreements associated with the separation of Solventum.

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

Cost of Sales measured as a percent of sales: Increases in the second quarter and first six months of 2025 were primarily due to foreign currency impacts; tariffs, and the exit of manufactured PFAS products partially, offset by ongoing procurement and logistics savings. Additionally, cost of sales YoY for the six months ended June 30, 2025, was impacted by cost dis-synergies (from the ongoing exit of PFAS manufacturing and second quarter 2024 spin of Solventum). See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

SG&Ameasured as a percent of sales: Increases in the second quarter and decreases in the first six months of 2025 were primarily impacted by increases in net costs for significant litigation from the second quarter 2025 PFAS-related New Jersey Settlement. These costs were partially offset by benefits from insurance recoveries in the second quarter of 2025, along with lower YoY restructuring charges. Additionally, SG&A YoY for the three and six months ended June 30, 2025, was impacted by the timing of and extent of stock-based compensation grants, transition service agreement reimbursement, and cost dis-synergies (from the ongoing exit of PFAS manufacturing and second quarter 2024 spin of Solventum). See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

R&Dmeasured as a percent of sales:3M continues to invest in a range of R&D activities from application development, product and manufacturing support, product development and technology development aimed at disruptive innovations. See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

Loss on Business Divestitures measured as a percent of sales: Applicable 2025 divestiture is discussed in Note 4.

Other Expense (Income), Net:

Interest expense (net of interest income): increased in the second quarter and decreased in the first six months of 2025, compared to the same periods YoY.

•The increase in second quarter was driven by lower interest income from decreased cash balances. This decrease in the first six months was driven by decreased imputed interest associated with the obligations resulting from the PWS Settlement and CAE Settlement partially offset by additional imputed interest from the New Jersey Settlement (all discussed in Note 17).

Non-service pension and postretirement net period cost (benefit): decreased by approximately $773 million in the second quarter of 2025 and $734 million in the first six months of 2025, compared to the same periods YoY.

•This change was largely due to the $795 million pension settlement charge in the second quarter 2024, which occurred as a result of transferring a portion of U.S. pension payment obligations and related plan assets to an insurance company (see Note 13). See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

Solventum ownership - change in value: decreased by approximately $1,120 million in the second quarter of 2025 and $777 million in the first six months of 2025, compared to the same periods YoY.

The primary factors that increased the Company's effective tax rate for the three and six months ending June 30, 2025, when compared to 2024, were the tax effect of the change in value of 3M's retained ownership interest in Solventum and application of Pillar Two Model Rules published by the Organization for Economic Cooperation and Development (OECD). These were partially offset by the 2024 charge related to the Company's change in assertion on earnings no longer considered permanently reinvested.

Income (loss) from unconsolidated subsidiaries, net of taxes, is attributable to the Company’s accounting under the equity method for ownership interests in certain entities. In the second quarter of 2025, 3M sold its interest in one of these investments, resulting in a pre-tax gain of $47 million. Because this was an ownership disposition, the impact of taxes thereon was reflected separately in provision for income taxes.

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

Certain Expenses Impacting Multiple Line Items within Results of Operations:

Stock compensation is discussed in Note 18 and impacts cost of sales, SG&A, and R&D. As noted therein, higher stock-based compensation expense is recognized in the quarter in which 3M’s annual stock option, restricted stock unit and performance share grant is made because of accounting rules for grants to employees that are retiree-eligible. Typically, the annual grant is made in the first quarter. However, due to the spin-off of Solventum (see Note 2), the 2024 annual grant was made in May 2024, after the April 1, 2024 separation. Additionally, 2025 stock compensation expense YoY was impacted by the lower extent of the 2025 annual grant.

Pre-tax defined benefit pension and postretirement service cost expense impacts cost of sales, SG&A, and R&D while the non-service cost component of pension and postretirement benefits impacts the other expense (income), net line item. Refer to Note 13 for additional information.

On a continuing operations basis, pre-tax stock compensation expense and defined benefit pension and postretirement expense for the periods presented were the following:

In the second quarter of 2024, 3M recorded a non-cash pension settlement charge, part of non-service cost above, as a result of transferring a portion of its U.S. pension payment obligations and related plan assets to an insurance company (as discussed in Note 13).

The Company continues to make investments in the implementation of new business systems and solutions, including enterprise resource planning, with the amortization relating to these investments impacting cost of sales, SG&A, and R&D.