3M Co.

This report does not constitute a rating action. Overview Key strengths Key risks Significant product, customer, geographic diversity, and a technology platform for product development support its strong competitive position. Large, lumpy payments through 2036 to settle PFAS and Combat Arms liabilities, with the possibility for more. Above-average profitability, with EBITDA margins in the mid- to high-20% area, and relatively low earnings volatility over the economic cycle. Slow growth in some mature, competitive, cyclical product lines. Strong and consistent free operating cash flow (FOCF) of over $4 billion annually. Spending to accelerate product development, improve service levels, and reduce overhead. 3M?s earnings and cash flow are tracking our forecast for 2025, with low-single-digit revenue growth and higher operating income, offset

...3M Co. has good cash flow cushion to fund legal settlements, while share buybacks keep leverage in check. 3M's earnings and cash flow are tracking our forecast for 2025, with low- single-digit revenue growth and higher operating income, offset by elevated adjusted debt levels to fund shareholder returns and legal obligations. Negotiated legal settlements, totaling $8.3 billion (post-tax) at Sept. 30, 2025, represent almost half of S&P Global Ratings-adjusted debt. We estimate about $4 billion-$4.5 billion of annual cash flow to fund lumpy legal obligations, based on our forecast for $5.2 billion-$5.5 billion of cash from operations less $1.1 billion-$1.2...

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