[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) For H1 2025, 3M saw flat sales, but net income and operating cash flow declined significantly due to substantial litigation costs and legal settlement payments [Consolidated Statement of Income](index=4&type=section&id=Consolidated%20Statement%20of%20Income) In Q2 2025, net sales increased slightly, but net income fell sharply year-over-year due to higher operating expenses and other non-operating costs Consolidated Statement of Income Highlights (in Millions, except per share amounts) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $6,344 | $6,255 | $12,298 | $12,271 | | **Operating Income** | $1,140 | $1,272 | $2,386 | $2,421 | | **Net Income from Continuing Operations attributable to 3M** | $723 | $1,204 | $1,839 | $1,909 | | **Net Income attributable to 3M** | $723 | $1,145 | $1,839 | $2,073 | | **Diluted EPS from Continuing Operations** | $1.34 | $2.17 | $3.38 | $3.44 | | **Diluted EPS** | $1.34 | $2.07 | $3.38 | $3.73 | [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, total assets decreased due to lower cash balances, while a larger reduction in liabilities led to an increase in total equity Consolidated Balance Sheet Highlights (in Millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $13,427 | $15,884 | | Cash and cash equivalents | $3,712 | $5,600 | | **Total Assets** | $37,989 | $39,868 | | **Total Current Liabilities** | $7,808 | $11,256 | | Long-term debt | $12,477 | $11,125 | | **Total Liabilities** | $33,638 | $35,974 | | **Total Equity** | $4,351 | $3,894 | [Consolidated Statement of Cash Flows](index=8&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For H1 2025, operating activities resulted in a $1.03 billion cash outflow, a stark reversal from the prior year's inflow, driven by legal settlement payments Six Months Ended June 30 Cash Flow Highlights (in Millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $(1,033) | $1,788 | | **Net cash provided by (used in) investing activities** | $1,290 | $(856) | | **Net cash provided by (used in) financing activities** | $(2,191) | $3,263 | | **Net increase (decrease) in cash and cash equivalents** | $(1,888) | $4,150 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the Solventum spin-off, major restructuring actions, and significant litigation accruals for PFAS and Combat Arms Earplugs [Note 2. Discontinued Operations](index=10&type=section&id=Note%202.%20Discontinued%20Operations) The Health Care business was spun off as Solventum on April 1, 2024, with its historical results now reported as discontinued operations - 3M completed the separation of its Health Care business (Solventum) on April 1, 2024, distributing **80.1% of shares** to 3M stockholders; Solventum's historical results are now reported as discontinued operations[21](index=21&type=chunk) - 3M's continuing involvement with Solventum includes supply and transition agreements, which generated approximately **$40 million in income for Q2 2025** and **$90 million for the first six months of 2025**[22](index=22&type=chunk) [Note 6. Restructuring Actions](index=13&type=section&id=Note%206.%20Restructuring%20Actions) The company is executing major restructuring initiatives, including workforce reductions and exiting PFAS manufacturing, incurring related pre-tax charges - A structural reorganization initiative (2023-2025) is expected to impact **8,000 positions** worldwide to simplify the company; as of Q2 2025, 6,900 positions have been impacted[31](index=31&type=chunk) - The company is exiting all PFAS manufacturing by the end of 2025, a restructuring that has impacted about **1,200 positions** worldwide[33](index=33&type=chunk) Restructuring Charges (in Millions) | Period | 2023-2025 Reorganization | PFAS Exit | | :--- | :--- | :--- | | **Q2 2025 Pre-tax Charge** | $8 | $4 | | **YTD 2025 Pre-tax Charge** | $21 | $9 | | **Q2 2024 Pre-tax Charge** | $35 | Immaterial | | **YTD 2024 Pre-tax Charge** | $138 | Immaterial | [Note 17. Commitments and Contingencies](index=28&type=section&id=Note%2017.%20Commitments%20and%20Contingencies) 3M faces extensive legal proceedings and has recorded significant liabilities for PFAS, Combat Arms Earplugs, and other matters - **Aqueous Film Forming Foam (AFFF) Litigation:** 3M entered into a class-action settlement to resolve drinking water claims by U.S. public water suppliers, agreeing to pay between **$10.5 billion and $12.5 billion** from 2024 through 2036[182](index=182&type=chunk)[184](index=184&type=chunk) - **Combat Arms Earplugs (CAE) Litigation:** In August 2023, 3M reached a settlement to resolve CAE claims, agreeing to contribute up to **$6.0 billion** between 2023 and 2029, with an accrued liability of **$2.4 billion** as of June 30, 2025[262](index=262&type=chunk)[263](index=263&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - **New Jersey PFAS Settlement:** In May 2025, 3M agreed to a proposed Judicial Consent Order to pay the State of New Jersey up to **$450 million** to resolve statewide PFAS claims, recording a pre-tax charge of **$281 million** in Q2 2025[167](index=167&type=chunk)[168](index=168&type=chunk) Key Litigation Accruals (as of June 30, 2025) | Litigation Matter | Accrued Liability (in Billions) | | :--- | :--- | | **Other Environmental Liabilities (PFAS)** | $7.4 | | **Combat Arms Earplugs (CAE)** | $2.4 | | **Respirator Mask/Asbestos** | $0.474 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports modest sales growth and improved adjusted operating margins in Q2 2025, though GAAP results were heavily impacted by litigation costs [Overview](index=55&type=section&id=Overview) Q2 2025 GAAP sales grew 1.4%, but GAAP EPS fell significantly due to litigation costs, while adjusted metrics showed underlying operational improvement - The April 1, 2024 separation of the Health Care business (Solventum) means its historical results are now reported as discontinued operations, and 3M's continuing operations are managed in three new segments[282](index=282&type=chunk)[283](index=283&type=chunk) Q2 2025 Financial Highlights vs. Q2 2024 | Metric | GAAP | Adjusted (Non-GAAP) | | :--- | :--- | :--- | | **Total Sales Change** | 1.4% | 2.3% | | **Organic Sales Change** | 0.6% | 1.5% | | **Operating Income Margin** | 18.0% | 24.5% | | **YoY Margin Change** | (2.3) ppts | +2.9 ppts | | **Earnings Per Diluted Share (EPS)** | $1.34 | $2.16 | | **YoY EPS Change** | (38)% | +12% | [Results of Operations](index=56&type=section&id=Results%20of%20Operations) In Q2 2025, sales growth was led by Asia Pacific, while SG&A expenses and the effective tax rate increased significantly due to litigation and tax law changes - SG&A as a percent of sales increased from 18.1% to **19.9%** in Q2 2025, largely due to increased net costs for the PFAS-related New Jersey Settlement[292](index=292&type=chunk)[293](index=293&type=chunk) - The GAAP effective tax rate for Q2 2025 was **26.6%**, a significant increase from 14.4% in Q2 2024[296](index=296&type=chunk) Q2 2025 vs Q2 2024 Sales Growth by Geography | Region | Total Sales Change | Organic Sales Change | | :--- | :--- | :--- | | **Americas** | 0.0% | 0.6% | | **Asia Pacific** | 3.6% | 2.3% | | **EMEA** | 2.5% | (2.3)% | | **Worldwide** | 1.4% | 0.6% | [Performance by Business Segment](index=59&type=section&id=Performance%20by%20Business%20Segment) In Q2 2025, the Safety and Industrial segment led sales growth, while all three segments expanded operating margins despite varied market conditions - Safety and Industrial growth was driven by electrical markets, industrial adhesives and tapes, and abrasives, benefiting from new product innovation and commercial strategies[307](index=307&type=chunk) - Transportation and Electronics sales were negatively impacted by the planned exit of manufactured PFAS products and weakness in auto builds; excluding special items, **adjusted organic sales grew 1.0%**[311](index=311&type=chunk)[314](index=314&type=chunk) - Consumer segment growth was supported by new product launches and increased investment in advertising in the home improvement division, partially offset by soft consumer discretionary spending[322](index=322&type=chunk) Q2 2025 Performance by Business Segment | Business Segment | Sales (Millions) | Total Sales Change | Operating Income (Millions) | Operating Margin | | :--- | :--- | :--- | :--- | :--- | | **Safety and Industrial** | $2,857 | 3.6% | $721 | 25.3% | | **Transportation and Electronics** | $2,130 | (0.6)% | $462 | 21.7% | | **Consumer** | $1,270 | 0.6% | $268 | 21.1% | [Financial Condition and Liquidity](index=67&type=section&id=Financial%20Condition%20and%20Liquidity) Liquidity remains strong, but H1 2025 operating cash flow was negative and net debt increased due to significant legal settlement payments and share repurchases - Operating cash flow for the first six months of 2025 was a **negative $1.03 billion**, a $2.8 billion decrease from the prior year, primarily due to **$3.1 billion in payments** for the PWS and CAE legal settlements[350](index=350&type=chunk) - In the first six months of 2025, 3M repurchased **$2.2 billion** of its own stock under a new $7.5 billion authorization and paid **$786 million** in dividends to shareholders[355](index=355&type=chunk)[356](index=356&type=chunk) - 3M intends to divest its **19.9% ownership stake in Solventum**, valued at $2.6 billion as of June 30, 2025, within five years of the April 2024 spin-off[335](index=335&type=chunk) Net Debt (Non-GAAP, in Millions) | Component | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total debt | $13,146 | $13,044 | | Less: Cash, cash equivalents and marketable securities | $4,230 | $7,744 | | **Net debt** | **$8,916** | **$5,300** | [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risk exposures since the end of the 2024 fiscal year - There have been no material changes in the company's market risk disclosures concerning foreign currency, interest rates, and commodity prices since the 2024 Annual Report[364](index=364&type=chunk) [Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures are effective as of the end of the quarter[365](index=365&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[366](index=366&type=chunk) [PART II. Other Information](index=72&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) This section references the detailed discussion of significant legal matters provided in Note 17 of the financial statements - The discussion of legal proceedings is incorporated by reference from Note 17 of the financial statements[369](index=369&type=chunk) [Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) 3M faces material risks from PFAS and CAE litigation, the planned exit from PFAS manufacturing, the Solventum spin-off, and external economic pressures - **PFAS Risks:** The company faces material risks from PFAS-related liabilities, ongoing litigation (including the PWS Settlement), evolving global regulations, and its plan to exit all PFAS manufacturing by the end of 2025[374](index=374&type=chunk)[377](index=377&type=chunk)[381](index=381&type=chunk) - **CAE Settlement Risks:** The **$6.0 billion Combat Arms Earplugs settlement** is subject to risks, including potential future claims from non-participants and the outcome of any appeals or challenges[402](index=402&type=chunk) - **Solventum Spin-off Risks:** The separation of the health care business presents risks, including failure to realize expected benefits, costs exceeding estimates, potential negative impacts on business relationships, and liabilities under separation agreements[403](index=403&type=chunk)[404](index=404&type=chunk) - **External and Operational Risks:** The company is exposed to risks from worldwide economic and geopolitical conditions, foreign currency fluctuations, supply chain disruptions, and cybersecurity threats[370](index=370&type=chunk)[373](index=373&type=chunk)[393](index=393&type=chunk)[395](index=395&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new $7.5 billion share repurchase program was authorized in February 2025, under which the company repurchased $922 million of stock in Q2 2025 - A new share repurchase program for up to **$7.5 billion** was authorized in February 2025, replacing the prior program[408](index=408&type=chunk) Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining for Purchase (Millions) | | :--- | :--- | :--- | :--- | | **April 1 - June 30, 2025** | 6,535,611 | $141.06 | $5,655 (as of June 30) |

Core Insights - 3M Co reported an adjusted second-quarter earnings of $2.16 per share on revenue of $6.34 billion, exceeding estimates of $2.01 and $6.12 billion respectively [1] - Despite an initial surge to a three-year high of $164.15, the stock quickly declined due to investor concerns over the impact of tariffs on the company [1] Stock Performance - Year-to-date, 3M shares are up 19%, and have increased 26% from their April lows, supported by the ascending 260-day moving average [2] - Post-earnings, options trading has surged with 13,000 calls and 9,932 puts exchanged, which is six times the average daily volume [2] - The most popular options are the July 155 put and 160 calls, with new positions being opened at the former [2] Trading Sentiment - Short-term traders are showing a call bias, indicated by a Schaeffer's put/call open interest ratio (SOIR) of 0.45, which is in the 20th percentile of the past 12 months [3]

Group 1 - The article discusses the performance and outlook of 3M Company (NYSE: MMM) after more than a year since the last coverage in early June 2024 [1] - The analysis emphasizes the importance of high-quality companies that can outperform the market over the long term due to competitive advantages and defensibility [1] Group 2 - The author has a strong academic background in sociology, holding a Master's Degree with a focus on organizational and economic sociology [1]

Core Insights - 3M reported revenue of $6.16 billion for the quarter ended June 2025, a year-over-year decline of 1.6%, with an EPS of $2.16 compared to $1.93 a year ago, exceeding the Zacks Consensus Estimate of $6.12 billion by 0.67% and delivering an EPS surprise of 7.46% [1] Group 1: Financial Performance - Revenue for Safety and Industrial segment was $2.86 billion, surpassing the two-analyst average estimate of $2.78 billion, reflecting a year-over-year increase of 3.6% [4] - Corporate and Unallocated segment net sales reached $87 million, slightly above the $85 million average estimate, marking a year-over-year change of 1.2% [4] - Consumer segment net sales were reported at $1.27 billion, matching the average estimate and showing a 0.6% increase compared to the previous year [4] Group 2: Operating Income - Non-GAAP operating income for the Consumer segment was $268 million, exceeding the average estimate of $264.25 million [4] - Non-GAAP operating income for Transportation and Electronics was $479 million, above the estimated $465.99 million [4] - Non-GAAP operating income for Safety and Industrial was $738 million, slightly higher than the average estimate of $730.6 million [4] Group 3: Stock Performance - 3M shares returned 11.6% over the past month, outperforming the Zacks S&P 500 composite's 5.4% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.16, an increase of 12% year-over-year, exceeding expectations [6][20] - Organic sales growth was 1.5%, with all three business groups reporting positive growth for the third consecutive quarter [6][17] - Operating margins increased by 290 basis points year-over-year, driven by productivity and cost controls [6][19] - Free cash flow was solid at $1.3 billion for the quarter, with a conversion rate of 110% [7][21] Business Line Data and Key Metrics Changes - Safety and Industrial organic sales grew by 2.6% in Q2, with six out of seven divisions posting positive results [22] - Transportation and Electronics adjusted sales were up 1% organically, driven by commercial graphics and auto personalization [23] - Consumer business saw a slight increase of 0.3% organically, despite soft consumer sentiment [24] Market Data and Key Metrics Changes - Growth was led by China, which was up mid-single digits, particularly in industrial adhesives and electronics bonding solutions [18] - The U.S. market grew low single digits, driven by Electrical Markets and Personal Safety, but was partially offset by weakness in Auto OEM and Aftermarket [18] - Europe remained flat, with strength in Electrical Markets and Personal Safety, but weakness in Transportation Safety and Auto [18] Company Strategy and Development Direction - The company is focusing on innovation excellence, increasing the cadence of new product launches, with 64 new products launched in Q2, a 70% increase from last year [8][9] - A commitment to operational excellence is evident, with improvements in service, asset utilization, and quality metrics [12][14] - The company is tightening pricing controls and reducing customer churn through predictive analytics [11] Management's Comments on Operating Environment and Future Outlook - Management noted a sluggish global economy, with expectations for organic growth of approximately 2% for the year [16][25] - The company is navigating uncertain times by focusing on customer problem-solving through innovation and efficiency [17] - Management expressed confidence in meeting increased guidance and delivering strong shareholder returns in 2025 [27] Other Important Information - The company returned $3 billion to shareholders through dividends and share repurchases in the first half of the year [15] - A settlement with the State of New Jersey on PFAS claims was announced, with cash payments spread over 25 years [15][71] Q&A Session Summary Question: Can you talk about the new product plan and its impact on margin versus growth? - Management highlighted the importance of R&D and new product innovation, expecting both growth and margin improvements from new products [31][34] Question: What are the sources of operational upside in the footprint versus G&A? - Management indicated that productivity gains are split evenly between G&A and supply chain, with significant cost controls in place [42][44] Question: Can you elaborate on the tariff assumptions and mitigation actions? - Management updated the tariff impact to a gross headwind of $0.20, with mitigation through cost and sourcing changes [106][108] Question: How is the company managing PFAS liabilities? - Management confirmed ongoing discussions with state AGs and emphasized the importance of maintaining cash flexibility while addressing legacy issues [72][75] Question: What is the outlook for the consumer electronics market? - Management noted a softening demand in consumer electronics, with expectations for continued growth but at a slower rate [88]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $2.16, a 12% increase year-on-year, exceeding expectations [5][19] - Organic sales growth was 1.5%, with all three business groups showing positive growth for the third consecutive quarter [5][16] - Operating margins increased by 290 basis points year-on-year, driven by productivity and cost controls [5][18] - Free cash flow was solid at $1.3 billion for the quarter, with a conversion rate of 110% [5][20] Business Line Data and Key Metrics Changes - Safety and Industrial organic sales grew by 2.6% in Q2, with six out of seven divisions posting positive results [21] - Transportation and Electronics adjusted sales were up 1% organically in Q2, led by commercial graphics and auto personalization [22] - Consumer business saw a slight increase of 0.3% organically in Q2, despite soft consumer sentiment [23] Market Data and Key Metrics Changes - Growth was led by China, which was up mid-single digits, driven by strong commercial execution [17] - The U.S. market grew low single digits, primarily in Electrical Markets and Personal Safety, but faced weakness in Auto OEM and Aftermarket [17] - Europe remained flat, with strength in Electrical Markets and Personal Safety, offset by weakness in Transportation Safety and Auto [17] Company Strategy and Development Direction - The company is focused on innovation excellence, increasing the cadence of new product launches, with 64 new products launched in Q2, a 70% increase from last year [6][7] - A commitment to operational excellence is evident, with improvements in service, asset utilization, and quality metrics [11][13] - The company is tightening pricing controls and reducing customer churn through predictive analytics [10] Management's Comments on Operating Environment and Future Outlook - Management noted a sluggish global economy, with expectations for organic growth of approximately 2% for the year [14][15] - The company is navigating uncertain times by focusing on customer problem-solving through innovation and efficiency [16] - Management expressed confidence in meeting increased guidance and delivering strong shareholder returns in 2025 [27] Other Important Information - The company returned $3 billion to shareholders through dividends and share repurchases in the first half of the year [14] - A settlement with the State of New Jersey on PFAS claims was announced, with cash payments spread over 25 years [14][70] - The company is exiting PFAS manufacturing by the end of the year, addressing legacy issues [72] Q&A Session Summary Question: Can you talk about the new product plan and its impact on margin versus growth? - Management highlighted the importance of R&D and new product innovation, expecting both growth and margin improvements as new products stabilize in the market [31][34] Question: What are the sources of operational upside in the footprint versus G&A? - Management indicated that productivity gains are split evenly between G&A and supply chain, with significant cost controls and procurement savings contributing to overall performance [44][46] Question: Can you elaborate on the tariff assumptions and their impact? - The company updated its tariff impact guidance, now estimating a gross headwind of $0.20, with mitigation actions in place to offset some of the costs [108] Question: How is the demand trend evolving, particularly regarding pre-buy concerns? - Management noted that while there may be some lingering pre-buy effects, overall orders were up low single digits, indicating stable demand trends [117]

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content includes insights across various sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Q2 2025 Performance - Sales reached $6.2 billion, with organic sales growth of 1.5%[11] - Operating margin increased to 24.5%, a rise of 290 basis points[11] - Earnings per share (EPS) increased by 12% to $2.16[11] - Free cash flow was $1.3 billion, representing a 110% conversion rate[11] Business Segment Performance (Q2 2025) - Safety & Industrial: Sales of $2.857 billion with 2.6% organic sales growth and an adjusted operating margin of 25.8%[52] - Transportation & Electronics: Sales of $1.944 billion with 1.0% organic sales growth and an adjusted operating margin of 24.6%[52] - Consumer: Sales of $1.270 billion with 0.3% organic sales growth and an adjusted operating margin of 21.1%[52] Full Year 2025 Guidance Update - Organic sales growth is projected to be approximately 2%[11] - Operating margin expansion is expected to be between 150 to 200 basis points[11] - EPS is projected to be in the range of $7.75 to $8.00[11] - Free cash flow conversion is expected to be greater than 100%[11]

3M公司第二季度调整后销售额为62亿美元 有机增长1.5% 智通财经7月18日电，3M公司第二季度GAAP销售额为63亿美元，增长1.4%；营业利润率为18.0%，下 降（230）个基点；每股收益为1.34美元，同比下降38%；调整后销售额为62亿美元，有机增长1.5%； 调整后每股收益为2.16美元，同比增长12%。 ...

Second-quarter highlights: | | Q2 2025 | | Q2 2024 | | | --- | --- | --- | --- | --- | | GAAP EPS from continuing operations (GAAP EPS) | $ | 1.34 | $ | 2.17 | | Special items: | | | | | | Net costs for significant litigation | | 0.79 | | 0.44 | | (Increase) decrease in value of Solventum ownership | | 0.01 | | (2.00) | | Pension risk transfer charge | | — | | 1.09 | | Manufactured PFAS products | | 0.02 | | — | | Divestiture costs | | — | | 0.23 | | Adjusted EPS from continuing operations (adjusted EPS) | ...