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Discontinued Operations | 9 Months Ended
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Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | NOTE 2. Discontinued Operations On April 1, 2024, 3M completed the previously announced separation of its Health Care business (the Separation) through a pro rata distribution of 80.1% of the outstanding shares of Solventum Corporation (Solventum) to 3M stockholders. The spin-off transaction was intended to be tax-free for U.S. federal income tax purposes. To reflect the completion of the spin, 3M recorded a decrease in shareholders equity for the net book value of applicable assets and liabilities included in the Separation, net of the book value of 3M's retained ownership. As a result of the Separation, Solventum became an independent public company and 3M no longer consolidates Solventum into 3M’s financial results. In connection with the Separation, the historical net income of Solventum and applicable assets and liabilities included in the Separation are reported in 3M's consolidated financial statements as discontinued operations. Following the Separation, as 3M no longer controls or has the ability to exert significant influence over Solventum, 3M measures, at fair value on a recurring basis, its retained ownership interest in Solventum common stock (see additional information in Note 7). 3M expects to monetize its stake in Solventum over time. The Company entered into various agreements to effect the Separation and provide for the relationship between 3M and Solventum, including, among others, a separation and distribution agreement; a tax matters agreement; and transition service, distribution, and contract manufacturing agreements; as well as certain commercial supply agreements. The transition service and distribution agreements have overall terms of two years following the Separation and each may be extended an additional year. The transition contract manufacturing agreement's term is three years with an ability to extend under certain circumstances. Supply agreements, by which each company may provide product to the other, have initial three-year terms, but may extend for particular products up to ten or twelve years following the Separation, under certain circumstances. In addition, the companies had certain amounts due between them as of the Separation date. 3M continuing involvement with Solventum in the form of net sales under supply agreements and income from transition agreements is reflected in amounts disclosed in Note 19 relative to "Corporate and Unallocated" (recorded as net sales and associated costs) and "Other" (recorded as a direct offset to associated costs), respectively. Solventum transition agreement income for the three months ended September 30, 2024 included in "Other" was approximately $5 million (approximately $0.2 billion gross fees, net of assigned costs). Transition agreement income for the nine months ended September 30, 2024 included in "Other" was approximately $40 million (approximately $0.4 billion gross fees, net of assigned costs). Transition services or purchases from Solventum are not material to 3M. Amounts due from Solventum and amounts due to Solventum under the agreements described above were approximately $0.5 billion and $0.2 billion, respectively, as of September 30, 2024. Information regarding net income (loss) from discontinued operations, net of taxes includes the following noting there was no material income (loss) from discontinued operations for the three months ended September 30, 2024:
|  |  |  | Three months ended September 30, |  | Nine months ended September 30,
Net Income (Loss) from Discontinued Operations, Net of Taxes (millions) |  |  |  | 2023 |  | 2024 |  | 2023 |  |
Net sales |  |  |  | $ | 2,042 |  | $ | 1,987 |  | $ | 6,060 |  |
Cost of sales |  |  |  | 864 |  | 844 |  | 2,611 |  |
Other operating expenses |  |  |  | 736 |  | 837 |  | 2,232 |  |
Other expense (income), net |  |  |  | (6) |  | 44 |  | (17) |  |
Income (loss) from discontinued operations before income taxes |  |  |  | 448 |  | 262 |  | 1,234 |  |
Provision for income taxes |  |  |  | (4) |  | 98 |  | 138 |  |
Net income (loss) from discontinued operations, net of taxes |  |  |  | $ | 452 |  | $ | 164 |  | $ | 1,096 |  |
Major classes of assets and liabilities of discontinued operations include the following:
Assets and Liabilities of Discontinued Operations (millions) |  |  |  | December 31, 2023
Assets |  |  |  |
Cash and cash equivalents |  |  |  | $ | 198 |
Marketable securities — current |  |  |  | 3 |
Accounts receivable — net |  |  |  | 1,149 |
Inventories |  |  |  | 878 |
Other current assets |  |  |  | 151 |
Current assets of discontinued operations |  |  |  | 2,379 |
Property, plant and equipment — net |  |  |  | 1,469 |
Operating lease right of use assets |  |  |  | 102 |
Goodwill |  |  |  | 6,545 |
Intangible assets — net |  |  |  | 2,903 |
Other assets |  |  |  | 324 |
Non-current assets of discontinued operations |  |  |  | 11,343 |
Liabilities |  |  |  |
Accounts payable |  |  |  | 469 |
Accrued payroll |  |  |  | 209 |
Accrued income taxes |  |  |  | 61 |
Operating lease liabilities — current |  |  |  | 33 |
Other current liabilities |  |  |  | 951 |
Current liabilities of discontinued operations |  |  |  | 1,723 |
Pension and postretirement benefits |  |  |  | 315 |
Operating lease liabilities |  |  |  | 70 |
Other liabilities |  |  |  | 301 |
Non-current liabilities of discontinued operations |  |  |  | $ | 686 |
Cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statement of Cash Flows for all periods presented. Selected financial information related to cash flows from discontinued operations is below.
|  | Nine months ended September 30,
Selected Cash Flow Information from Discontinued Operations (millions) |  | 2024 |  | 2023 |  |
Depreciation and amortization |  | $ | 139 |  |  | $ | 416 |  |  |
Purchases of property, plant and equipment (PP&E) |  | 77 |  |  | 163 |  |  |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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