Bulletin: 3M's Credit Ratios Hold Steady After Share Buybacks And Settlement Funding

This report does not constitute a rating action. TORONTO (S&P Global Ratings) Aug. 5, 2026--3M?s S&P Global Ratings-adjusted leverage of 2.4x as of June 30, 2026, was consistent with our expectation for the rating, as stronger earnings and good cash flow enabled large share buybacks while funding settlements related to PFAS and Combat Arms settlements. We assume 3M will generate about $5 billion of cash from operations before working capital in 2026 to fund $1.74 billion of PFAS and Combat Arms settlement payments this year. Based on negotiated settlements so far, these payments will rise to $3.5 billion in 2027 and drop to $2 billion in 2028. We believe 3M plans to refinance its debt maturities for the next few

...August 5, 2026 This report does not constitute a rating action. TORONTO (S&P Global Ratings) Aug. 5, 2026--3M's S&P Global Ratings-adjusted leverage of 2.4x as of June 30, 2026, was consistent with our expectation for the rating, as stronger earnings and good cash flow enabled large share buybacks while funding settlements related to PFAS and Combat Arms settlements. We assume 3M will generate about $5 billion of cash from operations before working capital in 2026 to fund $1.74 billion of PFAS and Combat Arms settlement payments this year. Based on negotiated settlements so far, these payments will rise to $3.5 billion in 2027 and drop to $2 billion in 2028. We believe 3M plans to refinance its debt maturities for the next few years, and so we expect the company will adjust shareholder returns to keep S&P Global Ratings-adjusted debt to EBITDA around 2x-3x. Economic tailwinds support low- to mid-single-digit percent revenue growth for 3M so far in 2026. Assuming steady low-single-digit...

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