M Reports Second-Quarter 2022 Results Second-Quarter Highlights Aearo Technologies takes action to efficiently and equitably resolve litigation related to Combat Arms Earplugs resulting in a pre-tax charge of $1.2 billio

3M Reports Second-Quarter 2022 Results

Second-Quarter Highlights

Aearo Technologies takes action to efficiently and equitably resolve litigation related to Combat Arms Earplugs resulting in a pre-tax charge of $1.2 billion, or $1.66 per share Company reports GAAP earnings per share of $0.14, including impact of Special Items.

Adjusted earnings per share of $2.48 in midst of continued uncertain macroeconomic environment.

Sales of $8.7 billion, down 3 percent year-on-year, which included a negative 4 percentage point impact from foreign currency translation due to strength of U.S. dollar.

Organic sales growth of 1 percent year-on-year which included a 4 percentage point headwind from the combined impact of China COVID-related lockdowns and decline in disposable respirator demand.

Operating cash flow was $1.1 billion, down 40 percent year-on-year, while adjusted free cash flow was $1.0 billion, down 41 percent year-on-year.

3M returned $0.8 billion to shareholders via dividends.

ST. PAUL, Minn. - July 26, 2022 3M (NYSE MMM) today reported second-quarter 2022 results.

"In a challenging macroeconomic environment, 3M executed well and delivered solid earnings, while continuing to drive growth through investments in large, fast-growing areas," said 3M chairman and CEO Mike Roman. "Looking ahead, we updated our adjusted full-year expectations largely due to the strength of the U.S. dollar and uncertain macroeconomic environment. We remain focused on innovating for customers, driving operational improvements and advancing our environmental stewardship - while positioning 3M for the future through our plan to spin-off our Health Care business and resolve Combat Arms litigation in a manner that is efficient and equitable."

Full-Year 2022 Outlook

3M updated its full-year sales and earnings expectations to reflect the impact of the strong U.S. dollar along with the current uncertain macroeconomic environment.

Total sales growth -2.5 to -0.5 percent vs. 1 to 4 percent prior

Organic sales growth 1.5 to 3.5 percent vs. 2 to 5 percent prior

Foreign currency translation -4 percent vs. -1 percent prior

GAAP earnings per share $7.32 to $7.82 vs. $9.89 to 10.39 prior

Adjusted earnings per share $10.30 to $10.80 vs. $10.75 to $11.25 prior

Operating cash flow of $6.6 to $7.2 billion contributing to 90% to 100% adjusted free cash flow conversion

See the "Supplemental Financial Information Non-GAAP Measures" section for applicable information.

Taking Steps to Equitably Resolve Litigation Related to Combat Arms Earplugs

In a separate press release issued today, 3M announced it is taking steps to resolve litigation related to Combat Arms Earplugs Version 2 ("Combat Arms Earplugs"). Aearo Technologies and related entities ("Aearo Technologies"), all of which are wholly-owned 3M subsidiaries, have voluntarily initiated chapter 11 proceedings. With this change in strategy, this process is intended to resolve claims related to Combat Arms Earplugs in a manner that is equitable to all parties, including plaintiffs with claims that are determined to be entitled to compensation. 3M and all other associated businesses have not filed for chapter 11 and will continue to operate as usual. Aearo Technologies' will also continue to operate in the ordinary course.

To access the press release, please visit our press release page here.

Planned Spin-Off of Health Care Business

In a separate press release issued today, 3M announced its intent to spin off its Health Care business, resulting in two world-class, public companies well positioned to pursue their respective growth plans.

To access the press release, please visit our press release page here.

Update on Pending Food Safety Transaction with Neogen

3M has now indicated it intends to complete the transaction through a split-off with a targeted closing date of September 1, 2022, subject to approval by Neogen shareholders, receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

Zwijndrecht, Belgium Facility Received Approval to Restart Idled Manufacturing

As previously reported on July 6, 2022, 3M received approval from the Flemish authorities to restart certain operations at its Zwijndrecht, Belgium manufacturing facility that have been idled in recent months, including production of electronic heat transfer fluids and others. This approval has been granted following 3M's investment in new and additional technologies to significantly reduce PFAS discharges and emissions from its facility, as well as our submission of testing data that indicates the effectiveness of these technologies. The restart process for these operations is on track with the company's expectations.

3M will conduct an investor teleconference at 9 a.m. EDT (8 a.m. CDT) 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 21999290). The telephone replay will be available until 11 30 a.m. EDT (10 30 a.m. CDT) on August 1, 2022.

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 Dec. 31, 2021, as updated by the Company's Current Report on Form 8-K dated April 26, 2022, 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 and energy (including oil and natural gas and their derivatives) due to shortages, increased demand or supply 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 (14) tax-related external conditions, including changes in tax rates, laws or regulations (15) matters relating to the proposed spin-off of the Company's Health Care business, including whether the transaction will be completed, or if completed, will be on the expected terms the risk that the expected benefits will not be realized the risk that the costs or dis-synergies will exceed the anticipated amounts the ability to satisfy the various closing conditions potential business disruption the diversion of management time the impact of the transaction (or its pendency) on the Company's ability to retain talent potential impacts on the Company's relationships with its customers, suppliers, employees, regulators and other counterparties the ability to realize the desired tax treatment (including whether an Internal Revenue Service private letter ruling will be sought or obtained) the risk that any consents or approvals required will not be obtained risks associated with financings that may be undertaken and indebtedness that may be incurred in connection with the transaction and (16) matters relating to the voluntary chapter 11 proceedings of the Company's subsidiary Aearo Technologies and certain of its affiliates (the "Aearo Entities"), including legal risks related to the chapter 11 proceedings potential impacts to the Company's reputation and its relationships with customers, suppliers, employees, regulators and other counterparties and community members potential impacts to the Company's liquidity or results of operations, including risks related to the amount that will be necessary to fully and finally resolve all of the Company's obligations to make payments to resolve such claims under the terms of its funding and indemnification agreement with the Aearo Entities and the Aearo Entities' ability to navigate the chapter 11 proceedings to obtain approval and consummation of a plan of reorganization. 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). The Company assumes no obligation to update any forward-looking statements discussed herein 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

* 3M does not include projected divestiture gains and the impact potentially-divested businesses may have on expected operations in its forecasted outlook guidance until close of a transaction as these items have not yet occurred and generally involve certain conditions that are outside of 3M's control. Additionally, 3M cannot, without unreasonable effort, forecast certain items required to develop meaningful comparable GAAP financial measures. These items include, but are not limited to, divestiture costs in light of the fact that such items are difficult to predict in advance to include in a GAAP estimate. This is due to limitations in predicting the meaningful amount and timing of costs involved over the duration of an announced segment-sized deal, including factors outside of 3M's control, and 3M believes would result in a range of projected values so broad as to not be meaningful to investors. For these reasons, 3M believes that the probable significance of such information is low.

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3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES (CONTINUED)

(a)In addition to reporting financial results in accordance with U.S. GAAP, 3M also provides non-GAAP measures that adjust for the impacts of special items. Special items for the periods presented include the items described in the section entitled "Description of Special Items". Operating income (loss), segment operating income (loss), income before taxes, net income, earnings per share, and the 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. While the Company includes certain items in its measure of segment operating performance, it also considers these non-GAAP measures in evaluating and managing its operations. The Company believes that discussion of results adjusted for special items is useful to investors in understanding underlying business performance, while also providing additional transparency to the special items. Special items impacting operating income (loss) are reflected in Corporate and Unallocated, except as described with respect to net costs for significant litigation in the "Description of Special Items" section. The determination of these items may not be comparable to similarly titled measures used by other companies.

In the first quarter of 2022, the Company changed the extent of matters and charges benefits it includes within special items with respect to net costs for significant litigation. Previously, 3M included net costs, when significant, associated with changes in accrued liabilities related to respirator mask asbestos litigation and PFAS-related other environmental matters, along with the associated tax impacts. The non-GAAP measure changes involved including net costs for litigation related to 3M's Combat Arms Earplugs, expanding net costs to include external legal fees and insurance recoveries associated with the applicable matters in addition to changes in accrued liabilities, and to include all such net costs for the applicable matters, not just when considered significant. The information provided herein reflects the impacts of these changes for all periods presented.

* 3M does not include projected divestiture gains and the impact potentially-divested businesses may have on expected operations in its forecasted outlook guidance until close of a transaction as these items have not yet occurred and generally involve certain conditions that are outside of 3M's control. Additionally, 3M cannot, without unreasonable effort, forecast certain items required to develop meaningful comparable GAAP financial measures. These items include, but are not limited to, divestiture costs in light of the fact that such items are difficult to predict in advance to include in a GAAP estimate. This is due to limitations in predicting the meaningful amount and timing of costs and payments involved over the duration of an announced segment-sized deal, including factors outside of 3M's control, and 3M believes would result in a range of projected values so broad as to not be meaningful to investors. For these reasons, 3M believes that the probable significance of such information is low.

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES (CONTINUED)

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(b)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)

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES (CONTINUED)

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3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES (CONTINUED)

(c) Adjusted EBITDA and adjusted EBITDA margin are not defined under U.S. GAAP. Therefore, adjusted EBITDA and adjusted EBITDA margin 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 adjusted EBITDA as net income attributable to 3M, adjusted for net income (loss) attributable to noncontrolling interest, (income) loss from unconsolidated subsidiaries, provision for income taxes, other expense (income), depreciation and amortization expense, and special items. For business segments, the Company defines adjusted EBITDA as business segment operating income (loss) (3M's measure of segment operating performance) adjusted for depreciation and amortization expense and special items. The Company defines adjusted EBITDA margin as adjusted EBITDA divided by net sales. Special items for the periods presented include the items described in the section entitled "Description of Special Items". The Company considers these non-GAAP measures in evaluating and managing the Company's operations. The Company believes adjusted EBITDA and adjusted EBITDA margin are meaningful to investors as they provide useful analyses of ongoing underlying operating trends.

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(d) Net debt is not defined under U.S. GAAP and may not be computed the same as similarly titled measures used by other companies. The Company defines net debt as total debt less the total of cash, cash equivalents and current and long-term marketable securities. 3M believes net debt is meaningful to investors as 3M considers net debt and its components to be an important indicator of liquidity and a guiding measure of capital structure strategy.

Description of Special Items

In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides various non-GAAP measures that incorporate adjustments for the impacts of special items. Special items incorporated in the preparation of these non-GAAP measures for the periods presented include the items described below

Net costs for significant litigation

These relate to 3M's respirator mask asbestos, PFAS-related other environmental, and Combat Arms Earplugs matters. Net costs include the impacts of changes in accrued liabilities, external legal fees, and insurance recoveries, along with the associated tax impacts. Net costs related to respirator mask asbestos and Combat Arms Earplugs matters are reflected as special items in the Safety and Industrial business segment while those associated with PFAS-related other environmental matters are primarily reflected as corporate special items in Corporate and Unallocated. In the second quarter of 2022 and 2021, 3M made payments of approximately $202 million and $90 million, respectively, related to net costs for significant litigation. In the first six months of 2022 and 2021, 3M made payments of approximately $363 million and $153 million, respectively, related to net costs for significant litigation.

These include costs related to separating and divesting substantially an entire business segment of 3M following public announcement of its intended divestiture.

Gain loss on sale of businesses

There were no gains losses on sales of businesses for the periods presented. Additionally, 3M does not include expected gains on divestitures in its forecasted outlook guidance as these items have not yet occurred and generally involve certain conditions that are outside of 3M's control.

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES (CONTINUED)

Divestiture-related restructuring actions

In the second quarter of 2021, 3M made payments of approximately $4 million associated with divestiture-related restructuring actions. In the first six months of 2022 and 2021, 3M made payments of approximately $1 million and $5 million, respectively, associated with divestiture-related restructuring actions.

Enactment measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA)

In the second quarter of 2022 and 2021, 3M made payments of approximately $68 million and $68 million, respectively, related to the transition tax expense incurred as a result of the 2017 enactment of the TCJA. In the first six months of 2022 and 2021, 3M made payments of approximately $68 million and $77 million, related to the transition tax expense incurred as a result of the 2017 enactment of the TCJA.