M Reports Fourth-Quarter and Full-Year 2021 Results Fourth-Quarter Highlights - Sales of $8.6 billion, up 0.3 percent year-on-year organic local-currency sales increased 1.3 percent year-on-year - Earnings per share of $

3M Reports Fourth-Quarter and Full-Year 2021 Results

Fourth-Quarter Highlights

-Sales of $8.6 billion, up 0.3 percent year-on-year organic local-currency sales increased 1.3 percent year-on-year

-Earnings per share of $2.31

-Operating cash flow of $2.0 billion adjusted free cash flow of $1.5 billion, down 30 percent year-on-year

-Returned $1.8 billion to shareholders via dividends and gross share repurchases

-Announced Food Safety business divestiture involving a Reverse Morris Trust transaction with NEOGEN Corporation

Full Year Highlights

-Sales of $35.4 billion, up 9.9 percent year-on-year organic local-currency sales increased 8.8 percent year-on-year

-Earnings per share of $10.12 vs. $9.36 in 2020, up 8 percent year-on-year

-Adjusted earnings per share of $10.12 vs. $8.85 in 2020, up 14 percent year-on-year

-Operating cash flow of $7.5 billion adjusted free cash flow of $6.0 billion, with adjusted free cash flow conversion of 101 percent

-Returned $5.6 billion to shareholders via dividends and gross share repurchases

-Company to host virtual Strategic Update and 2022 Outlook meeting on Feb. 14, 2022

ST. PAUL, Minn. - Jan. 25, 2022 3M (NYSE MMM) today reported fourth-quarter and full-year 2021 results.

"3M delivered a solid fourth-quarter performance - with notable strength in December - as we maintained our relentless focus on serving customers in a challenging external environment," said 3M chairman and chief executive officer Mike Roman. "Our team effectively managed supply chain disruptions, made good progress on pricing actions and controlled costs."

"Throughout 2021 we performed well, delivering full-year sales growth of 10 percent, robust cash flow and a strong increase in EPS. We also returned significant cash to shareholders, reduced debt and helped the world respond to COVID-19," Roman continued. "As we continue to actively manage our portfolio and improve our operations, we will prioritize investments in fast-growing end markets to drive long-term growth, as well as advance our commitment to sustainability. As we enter 2022, I am confident we will continue to grow our business and find new ways to apply science to improve lives."

Fourth-Quarter Results

Sales grew 0.3 percent year-on-year to $8.6 billion. Organic local-currency sales increased 1.3 percent. Foreign currency translation decreased sales by 1.0 percent year-on-year.

Total sales grew 4.1 percent in Consumer and 0.7 percent in Health Care, and decreased 1.5 percent in Transportation and Electronics, and 2.2 percent in Safety and Industrial. Organic local-currency sales grew 4.9 percent in Consumer and 1.6 percent in Health Care, and decreased 0.4 percent in Transportation and Electronics, and 1.3 percent in Safety and Industrial.

On a geographic basis, total sales grew 2.1 percent in the Americas, and decreased 0.2 percent in Asia Pacific, and 4.5 percent in EMEA (Europe, Middle East and Africa). Organic local-currency sales grew 2.2 percent in the Americas, 1.4 percent in Asia Pacific, and decreased 1.9 percent in EMEA.

Fourth-quarter earnings per share was $2.31 per share, down 4 percent year-on-year. Fourth quarter operating income was $1.6 billion with operating margins of 18.8 percent.

The company's operating cash flow was $2.0 billion with adjusted free cash flow of $1.5 billion contributing to adjusted free cash flow conversion of 110 percent. 3M returned $1.8 billion to shareholders in the fourth quarter of 2021, including $848 million in cash dividends and $938 million of gross share repurchases. See the "Supplemental Financial Information Non-GAAP Measures" section for applicable information.

Fourth-Quarter Business Group Discussion

Safety and Industrial

Sales of $3.1 billion, down 2.2 percent in U.S. dollars. Organic local-currency sales decreased 1.3 percent, and foreign currency translation decreased sales by 0.9 percent.

Sales increased in closure and masking systems, abrasives, industrial adhesives and tapes, electrical markets and automotive aftermarket, and decreased in roofing granules and personal safety.

Segment operating income was $543 million, a decrease of 21.7 percent year-on-year operating margins of 17.7 percent.

Transportation and Electronics

Sales of $2.3 billion, down 1.5 percent in U.S. dollars. Organic local-currency sales decreased 0.4 percent, and foreign currency translation decreased sales by 1.1 percent.

Sales increased in commercial solutions and advanced materials, and decreased in electronics, transportation safety and automotive and aerospace.

Segment operating income was $406 million, a decrease of 14.7 percent year-on-year operating margins of 17.6 percent.

Sales of $2.3 billion, up 0.7 percent in U.S. dollars. Organic sales increased 1.6 percent and, foreign currency translation decreased sales by 0.9 percent.

Sales increased in separation and purification, food safety, health information systems and oral care, and decreased in medical solutions.

Segment operating income was $536 million, a decrease of 1.6 percent year-on-year operating margins were 23.6 percent.

Sales of $1.5 billion, up 4.1 percent in U.S. dollars. Organic sales increased 4.9 percent, and foreign currency translation decreased sales by 0.8 percent.

Sales increased in consumer health and safety, stationery and office, home improvement and home care.

Segment operating income was $316 million, a decrease 0.4 percent year-on-year operating margins were 21.4 percent.

Full-Year 2021 Results

Full-year 2021 sales increased 9.9 percent year-on-year to $35.4 billion. Organic local-currency sales increased 8.8 percent while acquisitions, net of divestitures, decreased sales by 0.5 percent. Foreign currency translation increased sales by 1.6 percent year-on-year.

Both GAAP and adjusted earnings were $10.12 per share, an increase of 8 percent on a GAAP basis and an increase of 14 percent on an adjusted basis, as referenced in the "Supplemental Financial Information Non-GAAP Measures" section. Full-year operating income was $7.4 billion with operating margins of 20.8 percent.

The company's operating cash flow was $7.5 billion with adjusted free cash flow of $6.0 billion, contributing to adjusted free cash flow conversion of 101 percent for the year. In addition, 3M generated 19.5 percent return on invested capital. Refer to the "Supplemental Financial Information Non-GAAP Measures" section.

For the full year, 3M paid $3.4 billion in cash dividends to shareholders and repurchased $2.2 billion of its own shares.

3M will conduct an investor teleconference at 9 a.m. EST (8 a.m. CST) today. Investors can access this conference via the following

Live webcast at http investors.3M.com.

Call 800-762-2596 within the U.S. or +1 212-231-2916 outside the U.S. Please join the call at least 10 minutes before the start time.

Go to 3M's Investor Relations website at http investors.3M.com and click on "Quarterly Earnings."

Call 800-633-8284 within the U.S. or +1 402-977-9140 outside the U.S. (for both U.S. and outside the U.S., the access code is 21999288). The telephone replay will be available until 11 30 a.m. EST (10 30 a.m. CST) on Feb. 1, 2022.

Strategic Update and 2022 Outlook Meeting

3M will host a virtual strategic update and 2022 outlook meeting on Monday, Feb. 14, 2022, starting at 9 a.m. EST (8 a.m. CST). The event can be accessed via telephone at (800) 762-2596 within the U.S. or +1 (212) 231-2916 outside the U.S. This event will be webcast live, and a replay will be available on 3M's Investor Relations website at http investors.3M.com.

Forward-Looking Statements

This news release contains forward-looking information about 3M's financial results and estimates and business prospects that involve substantial risks and uncertainties. You can identify these statements by the use of words such as anticipate, estimate, expect, aim, project, intend, plan, believe, will, should, could, target, forecast and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially are the following (1) worldwide economic, political, regulatory, capital markets and other external conditions and other factors beyond the Company's control, including natural and other disasters or climate change affecting the operations of the Company or its customers and suppliers (2) risks related to public health crises such as the global pandemic associated with the coronavirus (COVID-19) (3) foreign currency exchange rates and fluctuations in those rates (4) liabilities related to certain fluorochemicals, including lawsuits concerning various PFAS-related products and chemistries, and claims and governmental regulatory proceedings and inquiries related to PFAS in a variety of jurisdictions (5) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and any subsequent quarterly reports on Form 10-Q (the "Reports") (6) competitive conditions and customer preferences (7) the timing and market acceptance of new product offerings (8) the availability and cost of purchased components, compounds, raw materials, labor, and energy (including oil and natural gas and their derivatives) due to shortages, increased demand and wages, logistics, manufacturing site disruptions or supply chain interruptions (including those caused by natural and other disasters and other events) (9) unanticipated problems or delays with the phased implementation of a global enterprise resource planning (ERP) system, or security breaches and other disruptions to the Company's information technology infrastructure (10) the impact of acquisitions, strategic alliances, divestitures and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring (11) operational execution, including scenarios where the Company generates fewer productivity improvements than estimated (12) financial market risks that may affect the Company's funding obligations under defined benefit pension and postretirement plans (13) the Company's credit ratings and its cost of capital and (14) tax-related external conditions, including changes in tax rates, laws or regulations. Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports under Cautionary Note Concerning Factors That May Affect Future Results and Risk Factors in Part I, Items 1 and 1A (Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly Reports), as updated by applicable Current Reports on Form 8-K. The information contained in this news release is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

3M Company and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME

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3M Company and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET

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3M Company and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

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(a)In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides non-GAAP measures that adjust for the impact of special items. Special items for the periods presented include the items described in the section entitled "Description of Special Items". Operating income (measure of segment operating performance), income before taxes, net income, earnings per share, and effective tax rate are all measures for which 3M provides the reported GAAP measure and a measure adjusted for special items. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company considers these non-GAAP measures in evaluating and managing the Company's operations. The Company believes that discussion of results adjusted for these items is meaningful to investors as it provides a useful analysis of ongoing underlying operating trends. The determination of these items may not be comparable to similarly titled measures used by other companies.

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

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(b)Free cash flow is not defined under U.S. generally accepted accounting principles (GAAP). Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The Company believes free cash flow is meaningful to investors as it functions as a useful measure of performance and the Company uses this measure as an indication of the strength of the company and its ability to generate cash.

(c)Adjusted free cash flow and adjusted free cash flow conversion are not defined under U.S. GAAP. Therefore, they should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines adjusted free cash flow as net cash provided by operating activities, adjusted for special items, less purchases of property, plant and equipment. Cash payments associated with special items in the determination of adjusted free cash flow are reflected net of applicable tax using the U.S. statutory corporate tax rate during the period of payment. It should not be inferred that the entire adjusted free cash flow amount is available for discretionary expenditures. The Company defines adjusted free cash flow conversion as adjusted free cash flow divided by net income attributable to 3M, adjusted for special items. Special items for the periods presented include the items described in section entitled "Description of Special Items". The Company believes adjusted free cash flow and adjusted free cash flow conversion are meaningful to investors as they are useful measures of performance and the Company uses these measures as an indication of the strength of the company and its ability to generate cash.

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

(d)Return on Invested Capital (ROIC) is not defined under U.S. generally accepted accounting principles. Therefore, ROIC should not be considered a substitute for other measures prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines ROIC as adjusted net income (net income including non-controlling interest plus after-tax interest expense) divided by average invested capital (equity plus debt). The Company believes ROIC is meaningful to investors as it focuses on shareholder value creation.

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

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