Stock Analysis on Net
Stock Analysis on Net

3M Co. (NYSE:MMM)

This company has been moved to the archive! The financial data has not been updated since October 25, 2022.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

3M Co., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Federal 756 720 534 698 1,022
State 104 123 59 109 59
International 597 633 673 763 722
Currently payable 1,457 1,476 1,266 1,570 1,803
Federal (219) (59) (32) (38) 162
State (25) (20) (26) (17) 15
International 72 (79) (78) (54) 76
Deferred (172) (158) (136) (109) 253
Tax Cuts and Jobs Act (TCJA) non-current transition tax provision — — — 176 623
Provision for income taxes 1,285 1,318 1,130 1,637 2,679

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Currently payable Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. 3M Co. currently payable increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. 3M Co. deferred decreased from 2019 to 2020 and from 2020 to 2021.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. 3M Co. provision for income taxes increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Effective Income Tax Rate (EITR)

3M Co., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Statutory U.S. tax rate 21.00% 21.00% 21.00% 21.00% 35.00%
State income taxes, net of federal benefit 0.90% 1.20% 0.50% 1.00% 0.80%
International income taxes, net -1.20% -1.20% 0.20% 0.20% -6.30%
Global Intangible Low Taxed Income (GILTI) 0.70% 0.80% 1.80% 1.10% 0.00%
Foreign Derived Intangible Income (FDII) -3.10% -1.80% -2.90% -1.30% 0.00%
U.S. research and development credit -0.70% -1.00% -1.70% -1.50% -0.70%
Reserves for tax contingencies 0.60% 0.50% 2.30% 1.20% 2.20%
Domestic Manufacturer’s deduction 0.00% 0.00% 0.00% 0.00% -1.80%
Employee share-based payments -0.60% -0.50% -1.30% -1.40% -3.20%
All other, net 0.20% 0.60% -0.10% 0.60% -0.60%
Effective worldwide tax rate, before U.S. TCJA enactment, net impacts 17.80% 19.60% 19.80% 20.90% 25.40%
U.S. TCJA enactment, net impacts 0.00% 0.00% 0.00% 2.50% 10.10%
Effective worldwide tax rate 17.80% 19.60% 19.80% 23.40% 35.50%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Effective worldwide tax rate, before U.S. TCJA enactment, net impacts Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. 3M Co. effective worldwide tax rate, before U.S. TCJA enactment, net impacts decreased from 2019 to 2020 and from 2020 to 2021.

Components of Deferred Tax Assets and Liabilities

3M Co., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Employee benefit costs 237 232 169 187 178
Product and other claims 257 338 280 228 204
Miscellaneous accruals 157 153 119 113 98
Accruals not currently deductible 651 723 568 528 480
Pension costs 351 849 824 643 760
Stock-based compensation 249 231 218 203 210
Advanced payments 286 — — — —
Net operating/capital loss/state tax credit carryforwards 120 148 150 71 89
Foreign tax credits 115 100 66 — 32
Currency translation — 90 — — 59
Lease liabilities 219 — — — —
Product and other insurance receivables 48 — — — —
Inventory 68 54 70 54 51
Other 31 112 113 24 —
Gross deferred tax assets 2,138 2,307 2,009 1,523 1,681
Valuation allowance (142) (135) (158) (67) (81)
Deferred tax assets 1,996 2,172 1,851 1,456 1,600
Product and other insurance receivables — (4) — (7) (6)
Accelerated depreciation (665) (607) (580) (521) (447)
Intangible amortization (985) (1,023) (1,021) (799) (784)
Right-of-use asset (222) — — — —
Currency translation — — (30) (35) —
Other — — — (8) (87)
Deferred tax liabilities (1,872) (1,634) (1,631) (1,370) (1,324)
Net deferred tax assets (liabilities) 124 538 220 86 276

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. 3M Co. gross deferred tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. 3M Co. deferred tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. 3M Co. net deferred tax assets (liabilities) increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Deferred Tax Assets and Liabilities, Classification

3M Co., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Deferred tax assets 581 871 521 365 511
Deferred tax liabilities 458 333 301 279 235

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. 3M Co. deferred tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. 3M Co. deferred tax liabilities increased from 2019 to 2020 and from 2020 to 2021.

Adjustments to Financial Statements: Removal of Deferred Taxes

3M Co., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported) 47,072 47,344 44,659 36,500 37,987
Less: Noncurrent deferred tax assets, net 581 871 521 365 511
Total assets (adjusted) 46,491 46,473 44,138 36,135 37,476
Adjustment to Total Liabilities
Total liabilities (as reported) 31,955 34,413 34,533 26,652 26,365
Less: Noncurrent deferred tax liabilities, net 458 333 301 279 235
Total liabilities (adjusted) 31,497 34,080 34,232 26,373 26,130
Adjustment to Total 3M Company Shareholders’ Equity
Total 3M Company shareholders’ equity (as reported) 15,046 12,867 10,063 9,796 11,563
Less: Net deferred tax assets (liabilities) 124 538 220 86 276
Total 3M Company shareholders’ equity (adjusted) 14,922 12,329 9,843 9,710 11,287
Adjustment to Net Income Attributable To 3M
Net income attributable to 3M (as reported) 5,921 5,384 4,570 5,349 4,858
Add: Deferred income tax expense (benefit) (172) (158) (136) (109) 253
Net income attributable to 3M (adjusted) 5,749 5,226 4,434 5,240 5,111

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

3M Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

3M Co., adjusted financial ratios

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net Profit Margin
Reported net profit margin 16.75% 16.73% 14.22% 16.33% 15.35%
Adjusted net profit margin 16.26% 16.24% 13.80% 15.99% 16.14%
Total Asset Turnover
Reported total asset turnover 0.75 0.68 0.72 0.90 0.83
Adjusted total asset turnover 0.76 0.69 0.73 0.91 0.84
Financial Leverage
Reported financial leverage 3.13 3.68 4.44 3.73 3.29
Adjusted financial leverage 3.12 3.77 4.48 3.72 3.32
Return on Equity (ROE)
Reported ROE 39.35% 41.84% 45.41% 54.60% 42.01%
Adjusted ROE 38.53% 42.39% 45.05% 53.96% 45.28%
Return on Assets (ROA)
Reported ROA 12.58% 11.37% 10.23% 14.65% 12.79%
Adjusted ROA 12.37% 11.25% 10.05% 14.50% 13.64%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. 3M Co. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. 3M Co. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 3M Co. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. 3M Co. adjusted ROE deteriorated from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. 3M Co. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

3M Co., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to 3M 5,921 5,384 4,570 5,349 4,858
Net sales 35,355 32,184 32,136 32,765 31,657
Profitability Ratio
Net profit margin1 16.75% 16.73% 14.22% 16.33% 15.35%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to 3M 5,749 5,226 4,434 5,240 5,111
Net sales 35,355 32,184 32,136 32,765 31,657
Profitability Ratio
Adjusted net profit margin2 16.26% 16.24% 13.80% 15.99% 16.14%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Net profit margin = 100 × Net income attributable to 3M ÷ Net sales
= 100 × 5,921 ÷ 35,355 = 16.75%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to 3M ÷ Net sales
= 100 × 5,749 ÷ 35,355 = 16.26%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. 3M Co. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net sales 35,355 32,184 32,136 32,765 31,657
Total assets 47,072 47,344 44,659 36,500 37,987
Activity Ratio
Total asset turnover1 0.75 0.68 0.72 0.90 0.83
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 35,355 32,184 32,136 32,765 31,657
Adjusted total assets 46,491 46,473 44,138 36,135 37,476
Activity Ratio
Adjusted total asset turnover2 0.76 0.69 0.73 0.91 0.84

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 35,355 ÷ 47,072 = 0.75

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 35,355 ÷ 46,491 = 0.76

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. 3M Co. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets 47,072 47,344 44,659 36,500 37,987
Total 3M Company shareholders’ equity 15,046 12,867 10,063 9,796 11,563
Solvency Ratio
Financial leverage1 3.13 3.68 4.44 3.73 3.29
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 46,491 46,473 44,138 36,135 37,476
Adjusted total 3M Company shareholders’ equity 14,922 12,329 9,843 9,710 11,287
Solvency Ratio
Adjusted financial leverage2 3.12 3.77 4.48 3.72 3.32

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Financial leverage = Total assets ÷ Total 3M Company shareholders’ equity
= 47,072 ÷ 15,046 = 3.13

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total 3M Company shareholders’ equity
= 46,491 ÷ 14,922 = 3.12

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 3M Co. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to 3M 5,921 5,384 4,570 5,349 4,858
Total 3M Company shareholders’ equity 15,046 12,867 10,063 9,796 11,563
Profitability Ratio
ROE1 39.35% 41.84% 45.41% 54.60% 42.01%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to 3M 5,749 5,226 4,434 5,240 5,111
Adjusted total 3M Company shareholders’ equity 14,922 12,329 9,843 9,710 11,287
Profitability Ratio
Adjusted ROE2 38.53% 42.39% 45.05% 53.96% 45.28%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROE = 100 × Net income attributable to 3M ÷ Total 3M Company shareholders’ equity
= 100 × 5,921 ÷ 15,046 = 39.35%

2 Adjusted ROE = 100 × Adjusted net income attributable to 3M ÷ Adjusted total 3M Company shareholders’ equity
= 100 × 5,749 ÷ 14,922 = 38.53%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. 3M Co. adjusted ROE deteriorated from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to 3M 5,921 5,384 4,570 5,349 4,858
Total assets 47,072 47,344 44,659 36,500 37,987
Profitability Ratio
ROA1 12.58% 11.37% 10.23% 14.65% 12.79%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to 3M 5,749 5,226 4,434 5,240 5,111
Adjusted total assets 46,491 46,473 44,138 36,135 37,476
Profitability Ratio
Adjusted ROA2 12.37% 11.25% 10.05% 14.50% 13.64%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROA = 100 × Net income attributable to 3M ÷ Total assets
= 100 × 5,921 ÷ 47,072 = 12.58%

2 Adjusted ROA = 100 × Adjusted net income attributable to 3M ÷ Adjusted total assets
= 100 × 5,749 ÷ 46,491 = 12.37%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. 3M Co. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.