3M Co. (NYSE:MMM)

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3M Co., adjusted total assets

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Total assets	47,072)	47,344)	44,659)	36,500)	37,987)
Adjustments
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	1,000)	1,069)
Add: Allowances	189)	233)	161)	95)	103)
Less: Deferred tax assets²	581)	871)	521)	365)	511)
After Adjustment
Adjusted total assets	46,680)	46,706)	44,299)	37,230)	38,648)

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).

¹ Operating lease right-of-use asset (before adoption of FASB Topic 842). See details »

² Deferred tax assets. See details »

Asset values exhibited a period of volatility and subsequent growth between 2017 and 2021. Total assets initially decreased from 37,987 million USD in 2017 to 36,500 million USD in 2018, before entering a phase of significant expansion. By December 31, 2020, total assets peaked at 47,344 million USD, followed by a marginal decline to 47,072 million USD in 2021.

Asset Expansion Trends: A pronounced increase in the asset base occurred between 2018 and 2019, with total assets rising by approximately 22.3%. This upward trajectory continued into 2020, indicating a substantial period of capital accumulation or asset acquisition, before stabilizing in 2021.
Adjustment Variance Analysis: The relationship between reported total assets and adjusted total assets shifted during the five-year period. In 2017 and 2018, adjusted total assets exceeded reported total assets by 661 million USD and 730 million USD, respectively. Conversely, from 2019 through 2021, adjusted total assets were consistently lower than the reported figures, with the most significant negative variance occurring in 2020 at 638 million USD.
Correlation of Metrics: A high degree of correlation is observed between total assets and adjusted total assets. Both metrics followed an identical directional path, experiencing a dip in 2018, a sharp increase in 2019, and a plateauing effect between 2020 and 2021, suggesting that the adjustments made did not fundamentally alter the overall growth profile of the balance sheet.

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3M Co., adjusted current liabilities

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Current liabilities	9,035)	7,948)	9,222)	7,244)	7,687)
Adjustments
Less: Current deferred revenue	529)	498)	430)	617)	513)
After Adjustment
Adjusted current liabilities	8,506)	7,450)	8,792)	6,627)	7,174)

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).

The reported current liabilities exhibit a fluctuating trend between 2017 and 2021, with significant peaks occurring in 2019 and 2021. Adjusted current liabilities follow an identical directional pattern, consistently remaining below the reported figures throughout the entire five-year period.

Volatility in Liability Levels: Total current liabilities decreased from 7,687 million USD in 2017 to 7,244 million USD in 2018, before rising sharply to a peak of 9,222 million USD in 2019. A subsequent contraction occurred in 2020 to 7,948 million USD, followed by another increase to 9,035 million USD by the end of 2021.
Consistency of Adjustments: A persistent gap is observed between current liabilities and adjusted current liabilities. The adjustment consistently reduces the total liability figure, indicating the systemic exclusion of specific short-term obligations for the purpose of the adjusted calculation.
Analysis of Adjustment Magnitude: The variance between reported and adjusted figures remained relatively stable over the period. The largest adjustment occurred in 2018 at 617 million USD, while the smallest adjustment was noted in 2019 at 430 million USD. For the remaining years, the adjustment ranged between 498 million USD and 529 million USD.

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3M Co., adjusted total liabilities

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Total liabilities	31,955)	34,413)	34,533)	26,652)	26,365)
Adjustments
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	—)	—)	1,000)	1,069)
Less: Deferred tax liabilities²	458)	333)	301)	279)	235)
Less: Deferred revenue	529)	498)	430)	617)	550)
Less: Product warranty liabilities	—)	—)	51)	48)	50)
Less: Accrued restructuring action balances	116)	179)	163)	124)	88)
After Adjustment
Adjusted total liabilities	30,852)	33,403)	33,588)	26,584)	26,511)

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).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Deferred tax liabilities. See details »

An analysis of the liability structure reveals a period of significant fluctuation between 2017 and 2021. Total liabilities remained relatively stable during the initial two years before experiencing a substantial spike in 2019, which persisted through 2020 before a moderate contraction occurred in 2021.

Liability Growth and Contraction Trends: Total liabilities increased from US$ 26,365 million in 2017 to a peak of US$ 34,533 million in 2019, representing a growth of approximately 30.9%. This elevated level was maintained in 2020 at US$ 34,413 million, followed by a reduction to US$ 31,955 million by December 31, 2021.
Variance Between Reported and Adjusted Liabilities: A divergence is observed between reported total liabilities and adjusted total liabilities. In 2017, adjusted liabilities were slightly higher than reported figures. However, starting in 2018, a trend emerged where adjusted liabilities were lower than the reported totals, indicating the exclusion of specific liability components for normalization purposes.
Expansion of Adjustment Magnitude: The scale of the adjustments grew progressively from 2019 through 2021. The difference between total and adjusted liabilities was US$ 945 million in 2019, increasing to US$ 1,010 million in 2020, and reaching US$ 1,103 million in 2021. This suggests a widening gap between statutory reporting and adjusted financial metrics over the final three years of the period.

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3M Co., adjusted total 3M Company shareholders’ equity

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Total 3M Company shareholders’ equity	15,046)	12,867)	10,063)	9,796)	11,563)
Adjustments
Less: Net deferred tax assets (liabilities)¹	124)	538)	220)	86)	276)
Add: Allowances	189)	233)	161)	95)	103)
Add: Deferred revenue	529)	498)	430)	617)	550)
Add: Product warranty liabilities	—)	—)	51)	48)	50)
Add: Accrued restructuring action balances	116)	179)	163)	124)	88)
Add: Noncontrolling interest	71)	64)	63)	52)	59)
After Adjustment
Adjusted total equity	15,827)	13,303)	10,711)	10,646)	12,137)

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).

¹ Net deferred tax assets (liabilities). See details »

The equity position exhibited an initial decline followed by a sustained growth trajectory between 2017 and 2021. Total shareholders' equity decreased from 11,563 million USD in 2017 to 9,796 million USD in 2018, before entering a period of consistent expansion that culminated in a peak of 15,046 million USD by the end of 2021.

Equity Growth Trends: A significant upward shift in capital structure occurred after 2019, with total equity increasing from 10,063 million USD to 15,046 million USD by the end of 2021. This indicates a robust recovery and growth phase, characterized by substantial year-over-year increases in 2020 and 2021.
Adjusted Equity Correlation: Adjusted total equity closely mirrored the movements of the reported total equity, maintaining a consistent positive variance across the five-year period. Adjusted equity followed the same V-shaped trend, dipping to 10,646 million USD in 2018 before rising to 15,827 million USD in 2021.
Analysis of Equity Adjustments: A persistent gap is observed between total shareholders' equity and adjusted total equity, confirming that systematic adjustments are applied to the equity base. This variance was most pronounced in 2018 at 850 million USD and remained significant in 2021 at 781 million USD, suggesting that the factors necessitating these adjustments remained relevant throughout the period analyzed.

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3M Co., adjusted capitalization table

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Short-term borrowings and current portion of long-term debt	1,307)	806)	2,795)	1,211)	1,853)
Current obligations of finance leases	7)	22)	21)	17)	13)
Long-term debt, excluding current portion	16,056)	17,989)	17,518)	13,411)	12,096)
Finance leases, net of current obligations	93)	93)	111)	75)	60)
Total reported debt	17,463)	18,910)	20,445)	14,714)	14,022)
Total 3M Company shareholders’ equity	15,046)	12,867)	10,063)	9,796)	11,563)
Total reported capital	32,509)	31,777)	30,508)	24,510)	25,585)
Adjustments to Debt
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	—)	—)	1,000)	1,069)
Add: Current operating lease liabilities²	263)	256)	247)	—)	—)
Add: Noncurrent operating lease liabilities³	591)	609)	607)	—)	—)
Adjusted total debt	18,317)	19,775)	21,299)	15,714)	15,091)
Adjustments to Equity
Less: Net deferred tax assets (liabilities)⁴	124)	538)	220)	86)	276)
Add: Allowances	189)	233)	161)	95)	103)
Add: Deferred revenue	529)	498)	430)	617)	550)
Add: Product warranty liabilities	—)	—)	51)	48)	50)
Add: Accrued restructuring action balances	116)	179)	163)	124)	88)
Add: Noncontrolling interest	71)	64)	63)	52)	59)
Adjusted total equity	15,827)	13,303)	10,711)	10,646)	12,137)
After Adjustment
Adjusted total capital	34,144)	33,078)	32,010)	26,360)	27,228)

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).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Current operating lease liabilities. See details »

³ Noncurrent operating lease liabilities. See details »

⁴ Net deferred tax assets (liabilities). See details »

The financial trajectory from 2017 to 2021 reveals a period of significant volatility in debt levels coupled with a steady recovery and expansion of shareholders' equity. A notable shift occurred in 2019, characterized by a substantial increase in total debt, which subsequently trended downward through 2021. Simultaneously, the capital base expanded, with the most aggressive growth occurring between 2018 and 2019.

Debt Dynamics: Total reported debt exhibited a sharp upward trend from US$ 14,022 million in 2017 to a peak of US$ 20,445 million in 2019. Following this peak, a gradual deleveraging process is observed, with debt reducing to US$ 17,463 million by December 31, 2021.
Equity Trends: Shareholders' equity experienced a contraction in 2018, falling to US$ 9,796 million from US$ 11,563 million in 2017. However, a consistent growth trend followed, with equity increasing for three consecutive years to reach US$ 15,046 million by the end of the period.
Capitalization Adjustments: A consistent positive variance is maintained between reported and adjusted figures across all metrics. Adjusted total debt is systematically higher than reported debt, reaching US$ 21,299 million in 2019. Similarly, adjusted total equity remains higher than reported equity throughout the five-year period, indicating the inclusion of additional liabilities and equity components in the adjusted calculations.
Total Capital Expansion: The overall capital structure expanded over the analyzed period. Total adjusted capital grew from US$ 27,228 million in 2017 to US$ 34,144 million in 2021. This growth was primarily driven by the surge in debt in 2019 and the subsequent strong recovery in shareholders' equity through 2021.

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3M Co., adjusted net sales

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Net sales	35,355)	32,184)	32,136)	32,765)	31,657)
Adjustment
Add: Increase (decrease) in deferred revenue	31)	68)	(187)	104)	(16)
After Adjustment
Adjusted net sales	35,386)	32,252)	31,949)	32,869)	31,641)

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).

An analysis of revenue performance between 2017 and 2021 reveals a generally positive growth trajectory, characterized by a period of relative stagnation followed by a significant increase in the final year of the period.

Net Sales Performance: Net sales exhibited moderate growth between 2017 and 2018, increasing from US$ 31,657 million to US$ 32,765 million. This growth was followed by a slight contraction in 2019 and a subsequent plateau in 2020, with figures remaining near US$ 32,184 million. A substantial acceleration occurred in 2021, where net sales rose to US$ 35,355 million, representing a notable increase of approximately 9.8% over the prior year.
Adjusted Net Sales Variance: Adjusted net sales closely align with reported net sales, though the direction of the adjustment varies annually. In 2018, 2020, and 2021, adjusted net sales were higher than reported net sales, indicating positive adjustments. In contrast, reported net sales exceeded adjusted figures in 2017 and 2019. The most significant variance was observed in 2019, where adjusted net sales were US$ 187 million lower than reported net sales.
Revenue Stability and Correlation: The narrow margin between net sales and adjusted net sales suggests that accounting adjustments have a negligible impact on the overall revenue trend. The correlation between the two metrics remains strong throughout the five-year period, indicating that the surge in revenue observed in 2021 is driven by core operational growth rather than reporting adjustments.

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3M Co., adjusted net income attributable to 3M

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Net income attributable to 3M	5,921)	5,384)	4,570)	5,349)	4,858)
Adjustments
Add: Deferred income tax expense (benefit)¹	(172)	(158)	(136)	(109)	253)
Add: Increase (decrease) in allowances	(44)	72)	66)	(8)	15)
Add: Increase (decrease) in deferred revenue	31)	68)	(187)	104)	(16)
Add: Increase (decrease) in product warranty liabilities	—)	—)	3)	(2)	3)
Add: Increase (decrease) in accrued restructuring action balances	(63)	16)	39)	36)	82)
Add: Other comprehensive income (loss), net of tax	970)	476)	(421)	153)	222)
Add: Comprehensive income (loss), net of tax, attributable to noncontrolling interest	7)	2)	11)	8)	14)
After Adjustment
Adjusted net income including noncontrolling interest	6,650)	5,860)	3,945)	5,531)	5,431)

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).

¹ Deferred income tax expense (benefit). See details »

Between 2017 and 2021, both reported net income and adjusted net income exhibited a general upward trajectory, despite a notable contraction occurring in 2019. The five-year period concludes with both metrics reaching their peak values in 2021, indicating a strong recovery and growth phase following the 2019 dip.

Net Income Attributable to 3M: A fluctuating but overall positive trend is observed. Reported net income grew from US$ 4,858 million in 2017 to US$ 5,349 million in 2018, before declining to a period low of US$ 4,570 million in 2019. A recovery followed, with figures rising to US$ 5,384 million in 2020 and peaking at US$ 5,921 million in 2021.
Adjusted Net Income Including Noncontrolling Interest: This metric demonstrated higher volatility compared to reported net income. After remaining relatively stable between 2017 and 2018, it experienced a sharp decrease to US$ 3,945 million in 2019. This was followed by a substantial rebound, increasing to US$ 5,860 million in 2020 and reaching US$ 6,650 million by the end of 2021.
Analysis of Income Adjustments: The relationship between reported and adjusted net income varied significantly over the period. In 2017, 2018, 2020, and 2021, adjusted net income was higher than the net income attributable to the company, suggesting that non-recurring charges or specific accounting adjustments typically weighed down reported earnings. Conversely, 2019 represents a distinct anomaly where adjusted net income fell below reported net income, indicating that adjustments during that specific year had a positive impact on the reported bottom line.

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