Full Press Release Details
3M Reports Third-Quarter 2020 Results
Third-Quarter Highlights:
| - | Sales of $8.4 billion, up 4.5 percent year-on-year | |
| - | Organic local-currency sales growth of 0.9 percent year-on-year | |
| - | Both GAAP and adjusted EPS of $2.43 | |
| - | Operating cash flow of $2.5 billion, up 23 percent year-on-year; adjusted free cash flow of $2.2 billion, up 13 percent year-on-year | |
| - | Strengthened capital structure: reduced total debt by $1.2 billion, down 6 percent, and net debt by $1.3 billion, or 8 percent, since June 30, 2020 | |
| - | Company will continue to provide monthly sales updates through year-end 2020 |
ST. PAUL, Minn. - October 27, 2020 3M (NYSE: MMM) today reported third-quarter 2020 results.
"Our third-quarter performance demonstrated once again the strength of the 3M model as we executed well, served customers and continued to fight the pandemic," said Mike Roman, 3M chairman and chief executive officer. "Though economic uncertainty and challenges due to the COVID-19 pandemic remain, we returned to positive organic sales growth with sequential improvement across businesses and geographies. We posted another quarter of robust cash flow, aggressively managed costs and further strengthened our balance sheet.
"We continue to take actions to transform 3M and position us to deliver strong results as our end markets recover," Roman continued. " We will invest where demand is strong, aggressively manage our cost structure, and create new innovations that address customer needs and global market trends."
Third-Quarter Results
The COVID-19 pandemic continues to evolve and affect 3M's businesses in a number of ways. The company saw sequential improvements across businesses, end markets and geographies. During the third quarter, end-market demand remained strong in personal safety, home improvement, general cleaning, semiconductor, data center and biopharma filtration. At the same time, several other end markets, while improving, continued to experience year-on-year declines primarily driven by COVID-19-related headwinds, including healthcare and oral care elective procedures, auto OEM, general industrial, consumer electronics, hospitality, office supplies, healthcare IT, and traffic safety.
Third-quarter sales grew 4.5 percent year-on-year to $8.4 billion. Organic local-currency sales grew 0.9 percent, while acquisitions, net of divestitures, increased sales by 3.0 percent. Foreign currency translation increased sales by 0.6 percent year-on-year.
Total sales grew 25.5 percent year-on-year in Health Care, 6.9 percent in Safety and Industrial, and 5.6 percent in Consumer, with a decline of 7.4 percent in Transportation and Electronics. Organic local-currency sales increased 8.1 percent year-on-year in Health Care, 6.9 percent in Safety and Industrial, and 5.5 percent in Consumer, with a decrease of 7.1 percent in Transportation and Electronics.
On a geographic basis, total sales grew 7.7 percent year-on-year in the Americas, 4.4 percent in EMEA (Europe, Middle East, and Africa), with a decline of 0.6 percent in Asia Pacific. Organic local-currency sales grew 3.4 percent year-on-year in the Americas, and declined 0.3 percent in EMEA and 2.6 percent in Asia Pacific.
Both third-quarter GAAP and adjusted earnings were $2.43 per share, resulting in year-on-year declines of 10.7 percent and 5.8 percent on a GAAP- and adjusted-basis, respectively. Third-quarter operating income was $1.9 billion with operating margins of 22.9 percent, as referenced in the "Supplemental Financial Information Non-GAAP Measures" section.
The company's operating cash flow was $2.5 billion with adjusted free cash flow of $2.2 billion contributing to adjusted free cash flow conversion of 153 percent. 3M paid $847 million in cash dividends to shareholders during the third quarter. The company reduced total debt by $1.2 billion, down 6 percent, and net debt by $1.3 billion, or 8 percent, sequentially. See the "Supplemental Financial Information Non-GAAP Measures" section for applicable information.
Third-Quarter Business Group Discussion
Safety and Industrial
| Sales of $3.0 billion, up 6.9 percent year-on-year in U.S. dollars. Organic local-currency sales increased 6.9 percent, foreign currency translation increased sales by 0.4 percent, and divestitures decreased sales by 0.4 percent. | ||
| On an organic local-currency basis: |
| Sales increased in personal safety, roofing granules, and automotive aftermarket; sales declined in electrical markets, industrial adhesives and tapes, closure and masking systems, and abrasives. | ||
| Sales grew in the Americas and EMEA; sales declined in Asia Pacific. |
Transportation and Electronics
| Sales of $2.3 billion, down 7.4 percent year-on-year in U.S. dollars. Organic local-currency sales decreased 7.1 percent, foreign currency translation increased sales by 0.9 percent, and divestitures decreased sales by 1.2 percent. | ||
| On an organic local-currency basis: |
| Sales increased in electronics; sales declined in transportation safety, commercial solutions, automotive and aerospace, and advanced materials. | ||
| Sales declined in Asia Pacific, the Americas, and EMEA. |
| Sales of $2.2 billion, up 25.5 percent year-on-year in U.S. dollars. Organic local-currency sales increased 8.1 percent, foreign currency translation increased sales by 1.1 percent and acquisitions, net of divestitures, increased sales by 16.3 percent. | ||
| On an organic local-currency basis: |
| Sales grew in medical solutions, separation and purification, and oral care; sales declined in food safety and health information systems. | ||
| Sales increased in the Americas and EMEA; sales declined in Asia Pacific. |
| Sales of $1.4 billion, up 5.6 percent year-on-year in U.S. dollars. Organic local-currency sales increased 5.5 percent and foreign currency translation increased sales by 0.1 percent. | ||
| On an organic local-currency basis: |
| Sales grew in home care, and home improvement; were flat in consumer health care and declined in stationery and office supplies. | ||
| Sales increased in the Americas and EMEA; sales declined in Asia Pacific. |
Due to the continued evolving and uncertain impact of the COVID -19 pandemic, 3M is not able to estimate the full duration, magnitude and pace of recovery across its diverse end markets with reasonable accuracy. Therefore, 3M continues to believe it is prudent to not provide guidance. 3M will maintain its monthly reporting of sales information during the fourth-quarter to continue to provide transparency on its ongoing business performance.
The company estimates total sales for October to be flat to up low-single digits year-on-year. This estimate includes the anticipated impact of one fewer business day in October 2020 versus October 2019.
3M will conduct an investor teleconference at 9:00 a.m. EDT (8:00 a.m. CDT) today. Investors can access this conference via the following:
| Live webcast at http://investors.3M.com. | ||
| Live telephone: |
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 21930639). The telephone replay will be available until 11:30 a.m. EST (10:30 a.m. CST) on November 3, 2020.
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) 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; (4) 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, 2019, and any subsequent quarterly reports on Form 10-Q (the "Reports"); (5) competitive conditions and customer preferences; (6) foreign currency exchange rates and fluctuations in those rates; (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; and (13) the Company's credit ratings and its cost of capital. 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
(Millions, except per-share amounts)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net sales | $ | 8,350 | $ | 7,991 | $ | 23,601 | $ | 24,025 | ||||||||
| Operating expenses | ||||||||||||||||
| Cost of sales | 4,303 | 4,188 | 12,217 | 12,811 | ||||||||||||
| Selling, general and administrative expenses | 1,677 | 1,455 | 5,039 | 5,089 | ||||||||||||
| Research, development and related expenses | 461 | 443 | 1,422 | 1,390 | ||||||||||||
| Gain on sale of businesses | - | (106 | ) | (389 | ) | (114 | ) | |||||||||
| Total operating expenses | 6,441 | 5,980 | 18,289 | 19,176 | ||||||||||||
| Operating income | 1,909 | 2,011 | 5,312 | 4,849 | ||||||||||||
| Other expense (income), net | 104 | 45 | 311 | 349 | ||||||||||||
| Income before income taxes | 1,805 | 1,966 | 5,001 | 4,500 | ||||||||||||
| Provision for income taxes | 387 | 378 | 1,002 | 888 | ||||||||||||
| Income of consolidated group | 1,418 | 1,588 | 3,999 | 3,612 | ||||||||||||
| Income (loss) from unconsolidated subsidiaries, net of taxes | (1 | ) | - | (1 | ) | - | ||||||||||
| Net income including noncontrolling interest | 1,417 | 1,588 | 3,998 | 3,612 | ||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | 4 | 5 | 3 | 11 | ||||||||||||
| Net income attributable to 3M | $ | 1,413 | $ | 1,583 | $ | 3,995 | $ | 3,601 | ||||||||
| Weighted average 3M common shares outstanding - basic | 577.8 | 576.5 | 577.2 | 577.2 | ||||||||||||
| Earnings per share attributable to 3M common shareholders - basic | $ | 2.45 | $ | 2.75 | $ | 6.92 | $ | 6.24 | ||||||||
| Weighted average 3M common shares outstanding - diluted | 582.4 | 583.0 | 581.6 | 585.9 | ||||||||||||
| Earnings per share attributable to 3M common shareholders - diluted | $ | 2.43 | $ | 2.72 | $ | 6.87 | $ | 6.15 |
3M Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions)
| September 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 4,121 | $ | 2,353 | ||||
| Marketable securities - current | 440 | 98 | ||||||
| Accounts receivable - net | 4,623 | 4,791 | ||||||
| Inventories | 3,984 | 4,134 | ||||||
| Prepaids | 516 | 704 | ||||||
| Other current assets | 426 | 891 | ||||||
| Total current assets | 14,110 | 12,971 | ||||||
| Property, plant and equipment - net | 9,216 | 9,333 | ||||||
| Operating lease right of use assets | 844 | 858 | ||||||
| Goodwill and intangible assets - net | 19,461 | 19,823 | ||||||
| Other assets | 1,759 | 1,674 | ||||||
| Total assets | $ | 45,390 | $ | 44,659 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Short-term borrowings and | ||||||||
| current portion of long-term debt | $ | 1,169 | $ | 2,795 | ||||
| Accounts payable | 2,208 | 2,228 | ||||||
| Accrued payroll | 721 | 702 | ||||||
| Accrued income taxes | 220 | 194 | ||||||
| Operating lease liabilities - current | 252 | 247 | ||||||
| Other current liabilities | 2,840 | 3,056 | ||||||
| Total current liabilities | 7,410 | 9,222 | ||||||
| Long-term debt | 18,429 | 17,518 | ||||||
| Other liabilities | 7,608 | 7,793 | ||||||
| Total liabilities | $ | 33,447 | $ | 34,533 | ||||
| Total equity | $ | 11,943 | $ | 10,126 | ||||
| Shares outstanding | ||||||||
| September 30, 2020: 576,821,878 shares | ||||||||
| December 31, 2019: 575,184,835 shares | ||||||||
| Total liabilities and equity | $ | 45,390 | $ | 44,659 |
3M Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
| Nine months ended | ||||||||
| September 30, | ||||||||
| 2020 | 2019 | |||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 5,598 | $ | 4,732 | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | (1,079 | ) | (1,161 | ) | ||||
| Acquisitions, net of cash acquired | (25 | ) | (704 | ) | ||||
| Purchases and proceeds from sale or maturities of marketable securities and investments - net | 170 | 348 | ||||||
| Proceeds from sale of businesses, net of cash sold | 576 | 236 | ||||||
| Other investing activities | 37 | 136 | ||||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (321 | ) | (1,145 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Change in debt | (870 | ) | 4,779 | |||||
| Purchases of treasury stock | (366 | ) | (1,243 | ) | ||||
| Proceeds from issuances of treasury stock pursuant to stock option and benefit plans | 325 | 437 | ||||||
| Dividends paid to shareholders | (2,540 | ) | (2,488 | ) | ||||
| Other financing activities | (47 | ) | (158 | ) | ||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (3,498 | ) | 1,327 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (11 | ) | (36 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 1,768 | 4,878 | ||||||
| Cash and cash equivalents at beginning of year | 2,353 | 2,853 | ||||||
| Cash and cash equivalents at end of period | $ | 4,121 | $ | 7,731 |
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES
| (Dollars in millions, except per share amounts) | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective Tax Rate | Net Income Attributable to 3M | Earnings Per Diluted Share | Earnings per diluted share percent change | ||||||||||||||||||||||||
| Q3 2019 GAAP | $ | 2,011 | 25.2 | % | $ | 1,966 | $ | 378 | 19.3 | % | $ | 1,583 | $ | 2.72 | ||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| (Gain)/loss on sale of businesses | (106 | ) | (106 | ) | (27 | ) | (79 | ) | (0.14 | ) | ||||||||||||||||||||||
| Q3 2019 adjusted amounts (non-GAAP measures) (a) | $ | 1,905 | 23.8 | % | $ | 1,860 | $ | 351 | 19.0 | % | $ | 1,504 | $ | 2.58 | ||||||||||||||||||
| Q3 2020 GAAP | $ | 1,909 | 22.9 | % | $ | 1,805 | $ | 387 | 21.4 | % | $ | 1,413 | $ | 2.43 | (10.7 | )% | ||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| None | ||||||||||||||||||||||||||||||||
| Q3 2020 adjusted amounts (non-GAAP measures) (a) | $ | 1,909 | 22.9 | % | $ | 1,805 | $ | 387 | 21.4 | % | $ | 1,413 | $ | 2.43 | (5.8 | )% |
| (Dollars in millions, except per share amounts) | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective Tax Rate | Net Income Attributable to 3M | Earnings Per Diluted Share | Earnings per diluted share percent change | ||||||||||||||||||||||||
| First nine months 2019 GAAP | $ | 4,849 | 20.2 | % | $ | 4,500 | $ | 888 | 19.7 | % | $ | 3,601 | $ | 6.15 | ||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Significant litigation-related charges/benefits | 548 | 548 | 124 | 424 | 0.72 | |||||||||||||||||||||||||||
| Loss on deconsolidation of Venezuelan subsidiary | - | 162 | - | 162 | 0.28 | |||||||||||||||||||||||||||
| (Gain)/loss on sale of businesses | (114 | ) | (114 | ) | 15 | (129 | ) | (0.22 | ) | |||||||||||||||||||||||
| First nine months 2019 adjusted amounts (non-GAAP measures) (a) | $ | 5,283 | 22.0 | % | $ | 5,096 | $ | 1,027 | 20.2 | % | $ | 4,058 | $ | 6.93 | ||||||||||||||||||
| First nine months 2020 GAAP | $ | 5,312 | 22.5 | % | $ | 5,001 | $ | 1,002 | 20.0 | % | $ | 3,995 | $ | 6.87 | 11.7 | % | ||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||||||
| Significant litigation-related charges/benefits | 17 | 17 | 56 | (39 | ) | (0.07 | ) | |||||||||||||||||||||||||
| (Gain)/loss on sale of businesses | (389 | ) | (389 | ) | (86 | ) | (303 | ) | (0.52 | ) | ||||||||||||||||||||||
| Divestiture-related restructuring actions | 55 | 55 | 9 | 46 | 0.08 | |||||||||||||||||||||||||||
| First nine months 2020 adjusted amounts (non-GAAP measures) (a) | $ | 4,995 | 21.2 | % | $ | 4,684 | $ | 981 | 21.0 | % | $ | 3,699 | $ | 6.36 | (8.2 | )% |
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES - (CONTINUED)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Major GAAP Cash Flow Categories (dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net cash provided by (used in) operating activities | $ | 2,480 | $ | 2,022 | $ | 5,598 | $ | 4,732 | ||||||||
| Net cash provided by (used in) investing activities | (523 | ) | 90 | (321 | ) | (1,145 | ) | |||||||||
| Net cash provided by (used in) financing activities | (2,097 | ) | 2,804 | (3,498 | ) | 1,327 |
| Adjusted Free Cash Flow (non-GAAP measure) (dollars in millions) | ||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 2,480 | $ | 2,022 | $ | 5,598 | $ | 4,732 | ||||||||
| Purchases of property, plant and equipment | (368 | ) | (349 | ) | (1,079 | ) | (1,161 | ) | ||||||||
| Free cash flow | $ | 2,112 | $ | 1,673 | $ | 4,519 | $ | 3,571 | ||||||||
| Adjustments for special items: | ||||||||||||||||
| Significant litigation-related after-tax payment impacts | $ | 10 | $ | 229 | $ | 74 | $ | 260 | ||||||||
| TCJA transition tax payments | 33 | - | 33 | - | ||||||||||||
| Divestiture-related restructuring after-tax payment impacts | 6 | 9 | 6 | 54 | ||||||||||||
| Adjusted free cash flow (b) | $ | 2,161 | $ | 1,911 | $ | 4,632 | $ | 3,885 | ||||||||
| Net income attributable to 3M | $ | 1,413 | $ | 1,583 | $ | 3,995 | $ | 3,601 | ||||||||
| Adjustments for special items: | ||||||||||||||||
| Significant litigation-related charges/benefits | - | - | (39 | ) | 424 | |||||||||||
| Loss on deconsolidation of Venezuelan subsidiary | - | - | - | 162 | ||||||||||||
| (Gain)/loss on sale of businesses | - | (79 | ) | (303 | ) | (129 | ) | |||||||||
| Divestiture-related restructuring actions | - | - | 46 | - | ||||||||||||
| Adjusted net income attributable to 3M (a) | $ | 1,413 | $ | 1,504 | $ | 3,699 | $ | 4,058 | ||||||||
| Adjusted free cash flow conversion (b) | 153 | % | 127 | % | 125 | % | 96 | % |
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES - (CONTINUED)
| Adjusted EBITDA (non-GAAP measure) (c) | Adjusted EBITDA Margin (non-GAAP measure) (c) | |||||||||||||
| Three months ended September 30, | Three months ended September 30, | |||||||||||||
| (Dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||
| Safety and Industrial | $ | 956 | $ | 753 | 31.6 | % | 26.6 | % | ||||||
| Transportation and Electronics | 643 | 716 | 27.8 | 28.6 | ||||||||||
| Health Care | 644 | 512 | 29.8 | 29.8 | ||||||||||
| Consumer | 383 | 337 | 27.0 | 25.1 | ||||||||||
| Corporate and Unallocated | (91 | ) | 77 | |||||||||||
| Elimination of Dual Credit | (145 | ) | (111 | ) | ||||||||||
| Total Company | $ | 2,390 | $ | 2,284 | 28.6 | % | 28.6 | % |
| Adjusted EBITDA (non-GAAP measure) (c) | Adjusted EBITDA Margin (non-GAAP measure) (c) | ||||||||||||||
| Nine months ended September 30, | Nine months ended September 30, | ||||||||||||||
| (Dollars in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Safety and Industrial | $ | 2,542 | $ | 2,243 | 29.5 | % | 25.7 | % | |||||||
| Transportation and Electronics | 1,673 | 1,982 | 25.8 | 27.1 | |||||||||||
| Health Care | 1,667 | 1,564 | 27.4 | 29.6 | |||||||||||
| Consumer | 981 | 892 | 25.1 | 23.1 | |||||||||||
| Corporate and Unallocated | (71 | ) | 40 | ||||||||||||
| Elimination of Dual Credit | (384 | ) | (308 | ) | |||||||||||
| Total Company | $ | 6,408 | $ | 6,413 | 27.2 | % | 26.7 | % |
| Three months ended | Nine months ended | |||||||||||||||
| Adjusted EBITDA (non-GAAP measure) (dollars in millions) | September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||||||
| Net sales | $ | 8,350 | $ | 7,991 | $ | 23,601 | $ | 24,025 | ||||||||
| Net income attributable to 3M | 1,413 | 1,583 | 3,995 | 3,601 | ||||||||||||
| Add/(subtract): | ||||||||||||||||
| Net income/(loss) attributable to noncontrolling interest | 4 | 5 | 3 | 11 | ||||||||||||
| (Income)/Loss from unconsolidated subsidiaries, net of taxes | 1 | - | 1 | - | ||||||||||||
| Provision for income taxes | 387 | 378 | 1,002 | 888 | ||||||||||||
| Other expense/(income): | ||||||||||||||||
| Interest (Income)/expense | 123 | 83 | 364 | 260 | ||||||||||||
| Pension & OPEB non-service cost (benefit) | (19 | ) | (38 | ) | (53 | ) | (73 | ) | ||||||||
| Loss on deconsolidation of Venezuelan subsidiary | - | - | - | 162 | ||||||||||||
| Depreciation and amortization expense | 481 | 379 | 1,413 | 1,130 | ||||||||||||
| Adjustments for special items: | ||||||||||||||||
| Significant litigation-related charges/benefits | - | - | 17 | 548 | ||||||||||||
| (Gain)/loss on sale of businesses | - | (106 | ) | (389 | ) | (114 | ) | |||||||||
| Divestiture-related restructuring actions | - | - | 55 | - | ||||||||||||
| Adjusted EBITDA (c) | $ | 2,390 | $ | 2,284 | $ | 6,408 | $ | 6,413 | ||||||||
| Adjusted EBITDA margin (c) | 28.6 | % | 28.6 | % | 27.2 | % | 26.7 | % |
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES - (CONTINUED)
| Adjusted EBITDA (non-GAAP measure) Three months ended September 30, 2020 (dollars in millions) | Safety and Industrial | Transportation and Electronics | Health Care | Consumer | Corporate and Unallocated | Elimination of Dual Credit | Total Company | |||||||||||||||||||||
| Net sales | $ | 3,024 | $ | 2,314 | $ | 2,160 | $ | 1,417 | $ | - | $ | (565 | ) | $ | 8,350 | |||||||||||||
| Business segment operating income (measure of segment operating performance) | 823 | 552 | 508 | 358 | (187 | ) | (145 | ) | 1,909 | |||||||||||||||||||
| Add/(subtract): | ||||||||||||||||||||||||||||
| Depreciation and amortization | 133 | 91 | 136 | 25 | 96 | 481 | ||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||
| None | ||||||||||||||||||||||||||||
| Adjusted EBITDA (non-GAAP measure) (c) | $ | 956 | $ | 643 | $ | 644 | $ | 383 | $ | (91 | ) | $ | (145 | ) | $ | 2,390 | ||||||||||||
| Adjusted EBITDA margin (non-GAAP measure) (c) | 31.6 | % | 27.8 | % | 29.8 | % | 27.0 | % | 28.6 | % |
| Adjusted EBITDA (non-GAAP measure) Three months ended September 30, 2019 (dollars in millions) | Safety and Industrial | Transportation and Electronics | Health Care | Consumer | Corporate and Unallocated | Elimination of Dual Credit | Total Company | |||||||||||||||||||||
| Net sales | $ | 2,829 | $ | 2,500 | $ | 1,721 | $ | 1,342 | $ | 28 | $ | (429 | ) | $ | 7,991 | |||||||||||||
| Business segment operating income (measure of segment operating performance) | 647 | 637 | 459 | 313 | 66 | (111 | ) | 2,011 | ||||||||||||||||||||
| Add/(subtract): | ||||||||||||||||||||||||||||
| Depreciation and amortization | 106 | 79 | 53 | 24 | 117 | 379 | ||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||
| (Gain)/loss on sale of businesses | (106 | ) | (106 | ) | ||||||||||||||||||||||||
| Adjusted EBITDA (non-GAAP measure) (c) | $ | 753 | $ | 716 | $ | 512 | $ | 337 | $ | 77 | $ | (111 | ) | $ | 2,284 | |||||||||||||
| Adjusted EBITDA margin (non-GAAP measure) (c) | 26.6 | % | 28.6 | % | 29.8 | % | 25.1 | % | 28.6 | % |
| Adjusted EBITDA (non-GAAP measure) Nine months ended September 30, 2020 (dollars in millions) | Safety and Industrial | Transportation and Electronics | Health Care | Consumer | Corporate and Unallocated | Elimination of Dual Credit | Total Company | ||||||||||||||||
| Net sales | $ | 8,627 | $ | 6,489 | $ | 6,088 | $ | 3,911 | $ | (1) | $ | (1,513) | $ | 23,601 | |||||||||
| Business segment operating income (measure of segment operating performance) | 2,185 | 1,416 | 1,270 | 914 | (89) | (384) | 5,312 | ||||||||||||||||
| Add/(subtract): | |||||||||||||||||||||||
| Depreciation and amortization | 357 | 257 | 397 | 67 | 335 | 1,413 | |||||||||||||||||
| Adjustments for special items: | |||||||||||||||||||||||
| Significant litigation-related charges/benefits | 17 | 17 | |||||||||||||||||||||
| (Gain)/loss on sale of businesses | (389) | (389) | |||||||||||||||||||||
| Divestiture-related restructuring actions | 55 | 55 | |||||||||||||||||||||
| Adjusted EBITDA (non-GAAP measure) (c) | $ | 2,542 | $ | 1,673 | $ | 1,667 | $ | 981 | $ | (71) | $ | (384) | $ | 6,408 | |||||||||
| Adjusted EBITDA margin (non-GAAP measure) (c) | 29.5 | % | 25.8 | % | 27.4 | % | 25.1 | % | 27.2 | % |
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES - (CONTINUED)
| Adjusted EBITDA (non-GAAP measure) Nine months ended September 30, 2019 (dollars in millions) | Safety and Industrial | Transportation and Electronics | Health Care | Consumer | Corporate and Unallocated | Elimination of Dual Credit | Total Company | |||||||||||||||||||||
| Net sales | $ | 8,729 | $ | 7,305 | $ | 5,290 | $ | 3,862 | $ | 98 | $ | (1,259 | ) | $ | 24,025 | |||||||||||||
| Business segment operating income (measure of segment operating performance) | 1,931 | 1,747 | 1,401 | 821 | (743 | ) | (308 | ) | 4,849 | |||||||||||||||||||
| Add/(subtract): | ||||||||||||||||||||||||||||
| Depreciation and amortization | 312 | 235 | 163 | 71 | 349 | 1,130 | ||||||||||||||||||||||
| Adjustments for special items: | ||||||||||||||||||||||||||||
| Significant litigation-related charges/benefits | 548 | 548 | ||||||||||||||||||||||||||
| (Gain)/loss on sale of businesses | (114 | ) | (114 | ) | ||||||||||||||||||||||||
| Adjusted EBITDA (non-GAAP measure) (c) | $ | 2,243 | $ | 1,982 | $ | 1,564 | $ | 892 | $ | 40 | $ | (308 | ) | $ | 6,413 | |||||||||||||
| Adjusted EBITDA margin (non-GAAP measure) (c) | 25.7 | % | 27.1 | % | 29.6 | % | 23.1 | % | 26.7 | % |
| September 30, | December 31, | |||||||
| Net Debt (non-GAAP measure) | 2020 | 2019 | ||||||
| Total debt | $ | 19,598 | $ | 20,313 | ||||
| Less: Cash, cash equivalents and marketable securities | 4,595 | 2,494 | ||||||
| Net debt (d) | $ | 15,003 | $ | 17,819 |
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES - (CONTINUED)
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:
Significant litigation-related charges/benefits:
Loss on deconsolidation of Venezuelan subsidiary:
Enactment/measurement period adjustments related to the Tax Cuts and Jobs Act (TCJA)