Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

3M Co., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Goodwill	13,486)	13,802)	13,444)	10,051)	10,513)
Customer related intangible assets	4,216)	4,280)	4,316)	2,291)	2,332)
Patents	513)	537)	538)	542)	561)
Other technology-based intangible assets	2,111)	2,114)	2,124)	576)	583)
Definite-lived tradenames	1,171)	1,178)	1,158)	664)	678)
Other amortizable intangible assets	105)	104)	125)	125)	207)
Finite-lived intangible assets, gross carrying amount	8,116)	8,213)	8,261)	4,198)	4,361)
Accumulated amortization	(3,481)	(3,036)	(2,520)	(2,182)	(2,073)
Finite-lived intangible assets, net	4,635)	5,177)	5,741)	2,016)	2,288)
Non-amortizable intangible assets (primarily tradenames)	653)	658)	638)	641)	648)
Intangible assets, net	5,288)	5,835)	6,379)	2,657)	2,936)
Goodwill and intangible assets	18,774)	19,637)	19,823)	12,708)	13,449)

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).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	3M Co. goodwill increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Intangible assets, net	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	3M Co. intangible assets, net decreased from 2019 to 2020 and from 2020 to 2021.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	3M Co. goodwill and intangible assets decreased from 2019 to 2020 and from 2020 to 2021.

3M Co., adjustments to financial statements

US$ in millions

	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: Goodwill	13,486)	13,802)	13,444)	10,051)	10,513)
Total assets (adjusted)	33,586)	33,542)	31,215)	26,449)	27,474)
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: Goodwill	13,486)	13,802)	13,444)	10,051)	10,513)
Total 3M Company shareholders’ equity (adjusted)	1,560)	(935)	(3,381)	(255)	1,050)

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

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3M Co., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Total Asset Turnover
Reported total asset turnover	0.75	0.68	0.72	0.90	0.83
Adjusted total asset turnover	1.05	0.96	1.03	1.24	1.15
Financial Leverage
Reported financial leverage	3.13	3.68	4.44	3.73	3.29
Adjusted financial leverage	21.53	—	—	—	26.17
Return on Equity (ROE)
Reported ROE	39.35%	41.84%	45.41%	54.60%	42.01%
Adjusted ROE	379.55%	—	—	—	462.67%
Return on Assets (ROA)
Reported ROA	12.58%	11.37%	10.23%	14.65%	12.79%
Adjusted ROA	17.63%	16.05%	14.64%	20.22%	17.68%

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 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 ROA	A profitability ratio calculated as 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

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	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 Goodwill
Selected Financial Data (US$ in millions)
Net sales	35,355)	32,184)	32,136)	32,765)	31,657)
Adjusted total assets	33,586)	33,542)	31,215)	26,449)	27,474)
Activity Ratio
Adjusted total asset turnover²	1.05	0.96	1.03	1.24	1.15

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 ÷ 33,586 = 1.05

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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.

	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 Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	33,586)	33,542)	31,215)	26,449)	27,474)
Adjusted total 3M Company shareholders’ equity	1,560)	(935)	(3,381)	(255)	1,050)
Solvency Ratio
Adjusted financial leverage²	21.53	—	—	—	26.17

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
= 33,586 ÷ 1,560 = 21.53

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	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 Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to 3M	5,921)	5,384)	4,570)	5,349)	4,858)
Adjusted total 3M Company shareholders’ equity	1,560)	(935)	(3,381)	(255)	1,050)
Profitability Ratio
Adjusted ROE²	379.55%	—	—	—	462.67%

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 × Net income attributable to 3M ÷ Adjusted total 3M Company shareholders’ equity
= 100 × 5,921 ÷ 1,560 = 379.55%

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	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 Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to 3M	5,921)	5,384)	4,570)	5,349)	4,858)
Adjusted total assets	33,586)	33,542)	31,215)	26,449)	27,474)
Profitability Ratio
Adjusted ROA²	17.63%	16.05%	14.64%	20.22%	17.68%

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 × Net income attributable to 3M ÷ Adjusted total assets
= 100 × 5,921 ÷ 33,586 = 17.63%

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

3M Co. (NYSE:MMM)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

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

Adjusted Financial Ratios: Removal of Goodwill (Summary)

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

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)