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REG - 3M Company - Annual Financial Report - Part 2 <Origin Href="QuoteRef">MMM.N</Origin>

3M CoAnnouncement

13/02/2018 07:36

RNS Number : 6597E

3M Company

12 February 2018

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/6559E_-2018-2-12.pdf

U.S. Pension Plans and Postretirement Benefit Plan Assets

In order to achieve the investment objectives in the U.S. pension plans and U.S. postretirement benefit plans, the investment policies include a target strategic asset allocation. The investment policies allow some tolerance around the target in recognition that market fluctuations and illiquidity of some investments may cause the allocation to a specific asset class to vary from the target allocation, potentially for long periods of time. Acceptable ranges have been designed to allow for deviation from strategic targets and to allow for the opportunity for tactical over- and under-weights. The portfolios will normally be rebalanced when the quarter-end asset allocation deviates from acceptable ranges. The allocation is reviewed regularly by the named fiduciary of the plans. Approximately 46% of the postretirement benefit plan assets are in a 401(h) account. The 401(h) account assets are in the same trust as the primary U.S. pension plan and invested with the same investment objectives as the primary U.S. pension plan.

The fair values of the assets held by the U.S. pension plans by asset class are as follows:


	FairValueMeasurementsUsingInputsConsideredas												FairValueat
(Millions)	Level1				Level2				Level3				Dec.31,
AssetClass	2017		2016		2017		2016		2017		2016		2017		2016
Equities
U.S. equities	$	1,568	$	1,522	$	-	$	-	$	-	$	-	$	1,568	$	1,522
Non-U.S. equities		1,527		1,179		-		-		-		-		1,527		1,179
Index and long/short equity funds*														422		414
Total Equities	$	3,095	$	2,701	$	-	$	-	$	-	$	-	$	3,517	$	3,115
Fixed Income
U.S. government securities	$	2,666	$	1,701	$	484	$	560	$	-	$	-	$	3,150	$	2,261
Non-U.S. government securities		-		-		168		146		-		-		168		146
Preferred and convertible securities		4		4		2		1		-		-		6		5
U.S. corporate bonds		10		10		2,904		3,392		-		-		2,914		3,402
Non-U.S. corporate bonds		-		-		614		672		-		-		614		672
Derivative instruments		-		(1)		110		(31)		-		-		110		(32)
Other*														8		7
Total Fixed Income	$	2,680	$	1,714	$	4,282	$	4,740	$	-	$	-	$	6,970	$	6,461
Private Equity
Derivative instruments	$	-	$	-	$	-	$	-	$	(7)	$	(83)	$	(7)	$	(83)
Growth equity		34		19		-		-		-		-		34		19
Partnership investments*														2,062		2,188
Total Private Equity	$	34	$	19	$	-	$	-	$	(7)	$	(83)	$	2,089	$	2,124
Absolute Return
Derivative instruments	$	-	$	-	$	-	$	(7)	$	-	$	-	$	-	$	(7)
Fixed income and other		31		29		102		78		-		-		133		107
Hedge fund/fund of funds*														1,871		1,793
Partnership investments*														335		296
Total Absolute Return	$	31	$	29	$	102	$	71	$	-	$	-	$	2,339	$	2,189
Cash and Cash Equivalents
Cash and cash equivalents	$	109	$	55	$	14	$	-	$	1	$	2	$	124	$	57
Repurchase agreements and derivative margin activity		-		-		(502)		(545)		-		-		(502)		(545)
Cash and cash equivalents, valued at net asset value*														1,402		931
Total Cash and Cash Equivalents	$	109	$	55	$	(488)	$	(545)	$	1	$	2	$	1,024	$	443
Total	$	5,949	$	4,518	$	3,896	$	4,266	$	(6)	$	(81)	$	15,939	$	14,332
Other items to reconcile to fair value of plan assets													$	(253)	$	(251)
Fair value of plan assets													$	15,686	$	14,081

* In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

The fair values of the assets held by the postretirement benefit plans by asset class are as follows:


	FairValueMeasurementsUsingInputsConsideredas												FairValueat
(Millions)	Level1				Level2				Level3				Dec.31,
AssetClass	2017		2016		2017		2016		2017		2016		2017		2016
Equities
U.S. equities	$	465	$	477	$	-	$	-	$	-	$	-	$	465	$	477
Non-U.S. equities		71		62		-		-		-		-		71		62
Index and long/short equity funds*														45		40
Total Equities	$	536	$	539	$	-	$	-	$	-	$	-	$	581	$	579
Fixed Income
U.S. government securities	$	136	$	102	$	205	$	191	$	-	$	-	$	341	$	293
Non-U.S. government securities		-		-		9		9		-		-		9		9
U.S. corporate bonds		-		-		159		172		-		-		159		172
Non-U.S. corporate bonds		-		-		35		36		-		-		35		36
Derivative instruments		-		-		4		(1)		-		-		4		(1)
Total Fixed Income	$	136	$	102	$	412	$	407	$	-	$	-	$	548	$	509
Private Equity
Derivative instruments	$	-	$	-	$	-	$	-	$	-	$	(3)	$	-	$	(3)
Growth equity		2		1		-		-		-		-		2		1
Partnership investments*														109		113
Total Private Equity	$	2	$	1	$	-	$	-	$	-	$	(3)	$	111	$	111
Absolute Return
Fixed income and other	$	1	$	1	$	4	$	3	$	-	$	-	$	5	$	4
Hedge fund/fund of funds*														76		72
Partnership investments*														14		12
Total Absolute Return	$	1	$	1	$	4	$	3	$	-	$	-	$	95	$	88
Cash and Cash Equivalents
Cash and cash equivalents	$	34	$	44	$	1	$	3	$	-	$	-	$	35	$	47
Repurchase agreements and derivative margin activity		-		-		(20)		(22)		-		-		(20)		(22)
Cash and cash equivalents, valued at net asset value*														57		38
Total Cash and Cash Equivalents	$	34	$	44	$	(19)	$	(19)	$	-	$	-	$	72	$	63
Total	$	709	$	687	$	397	$	391	$	-	$	(3)	$	1,407	$	1,350
Other items to reconcile to fair value of plan assets													$	(10)	$	6
Fair value of plan assets													$	1,397	$	1,356

*In accordance with ASC 820-10, certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.

Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded.

Fixed income includes derivative instruments such as credit default swaps, interest rate swaps and futures contracts. Corporate debt includes bonds and notes, asset backed securities, collateralized mortgage obligations and private placements. Swaps and derivative instruments are valued by the custodian using closing market swap curves and market derived inputs. U.S. government and government agency bonds and notes are valued at the closing price reported in the active market in which the individual security is traded. Corporate bonds and notes, asset backed securities and collateralized mortgage obligations are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. Private placements are valued by the custodian using recognized pricing services and sources.

The private equity portfolio is a diversified mix of derivative instruments, growth equity and partnership interests. Derivative investments are written options that are valued by independent parties using market inputs and valuation models. Growth equity investments are valued at the closing price reported in the active market in which the individual securities are traded.

Absolute return consists primarily of partnership interests in hedge funds, hedge fund of funds or other private fund vehicles. Corporate debt instruments are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risk ratings.

Other items to reconcile to fair value of plan assets include, interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable.

The balances of and changes in the fair values of the U.S. pension plans' and postretirement plans' level 3 assets for the periods ended December 31, 2017 and 2016 were not material.

International Pension Plans Assets

Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below of asset categories is presented in aggregate for over 70 defined benefit plans in 26 countries; however, there is significant variation in asset allocation policy from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. The Company provides standard funding and investment guidance to all international plans with more focused guidance to the larger plans.

Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when necessary.

The fair values of the assets held by the international pension plans by asset class are as follows:


	FairValueMeasurementsUsingInputsConsideredas												FairValueat
(Millions)	Level1				Level2				Level3				Dec.31,
AssetClass	2017		2016		2017		2016		2017		2016		2017		2016
Equities
Growth equities	$	659	$	605	$	289	$	214	$	-	$	-	$	948	$	819
Value equities		597		575		43		28		-		-		640		603
Core equities		62		55		790		583		4		4		856		642
Equities, valued at net asset value*														21		16
Total Equities	$	1,318	$	1,235	$	1,122	$	825	$	4	$	4	$	2,465	$	2,080
Fixed Income
Domestic government	$	362	$	340	$	256	$	202	$	4	$	3	$	622	$	545
Foreign government		168		142		338		353		-		-		506		495
Corporate debt securities		63		51		1,072		888		10		9		1,145		948
Fixed income securities, valued at net asset value*														976		641
Total Fixed Income	$	593	$	533	$	1,666	$	1,443	$	14	$	12	$	3,249	$	2,629
Private Equity
Real estate	$	36	$	29	$	74	$	62	$	3	$	3	$	113	$	94
Real estate, valued at net asset value*														36		34
Partnership investments*														68		63
Total Private Equity	$	36	$	29	$	74	$	62	$	3	$	3	$	217	$	191
Absolute Return
Derivatives	$	-	$	(4)	$	2	$	-	$	-	$	-	$	2	$	(4)
Insurance		-		-		-		-		519		455		519		455
Other		-		-		-		-		7		6		7		6
Other, valued at net asset value*														1		-
Hedge funds*														194		174
Total Absolute Return	$	-	$	(4)	$	2	$	-	$	526	$	461	$	723	$	631
Cash and Cash Equivalents
Cash and cash equivalents	$	67	$	99	$	34	$	18	$	-	$	-	$	101	$	117
Cash and cash equivalents, valued at net asset value*														3		4
Total Cash and Cash Equivalents	$	67	$	99	$	34	$	18	$	-	$	-	$	104	$	121
Total	$	2,014	$	1,892	$	2,898	$	2,348	$	547	$	480	$	6,758	$	5,652
Other items to reconcile to fair value of plan assets													$	(21)	$	(35)
Fair value of plan assets													$	6,737	$	5,617

Equities consist primarily of mandates in public equity securities managed to various public equity indices. Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded.

Fixed Income investments include domestic and foreign government, and corporate, (including mortgage backed and other debt) securities. Governments, corporate bonds and notes and mortgage backed securities are valued at the closing price reported if traded on an active market or at yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

Private equity funds consist of partnership interests in a variety of funds. Real estate consists of property funds and REITS (Real Estate Investment Trusts). REITS are valued at the closing price reported in the active market in which it is traded.

Absolute return consists of private partnership interests in hedge funds, insurance contracts, derivative instruments, hedge fund of funds, and other alternative investments. Insurance consists of insurance contracts, which are valued using cash surrender values which is the amount the plan would receive if the contract was cashed out at year end. Derivative instruments consist of interest rate swaps that are used to help manage risks.

Other items to reconcile to fair value of plan assets include the net of interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable.

The balances of and changes in the fair values of the international pension plans' level 3 assets consist primarily of insurance contracts under the absolute return asset class. The aggregate of net purchases and net unrealized gains increased this balance by $48 million and $8 million in 2017 and 2016, respectively. Foreign currency exchange impacts increased this balance by $16 million in 2017 and decreased this balance by $9 million in 2016.

NOTE 13. Derivatives

The Company uses interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments used by 3M, how and why 3M uses such instruments, how such instruments are accounted for, and how such instruments impact 3M's financial position and performance.

Additional information with respect to the impacts on other comprehensive income of nonderivative hedging and derivative instruments is included in Note 7. Additional information with respect to the fair value of derivative instruments is included in Note 14. References to information regarding derivatives and/or hedging instruments associated with the Company's long-term debt are also made in Note 11.

Types of Derivatives/Hedging Instruments and Inclusion in Income/Other Comprehensive Income:

Cash Flow Hedges:

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

Cash Flow Hedging - Foreign Currency Forward and Option Contracts: The Company enters into foreign exchange forward and option contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. The settlement or extension of these derivatives will result in reclassifications (from accumulated other comprehensive income) to earnings in the period during which the hedged transactions affect earnings. 3M may dedesignate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously accumulated in other comprehensive income for dedesignated hedges remains in accumulated other comprehensive income until the forecasted transaction occurs or becomes probable of not occurring. Changes in the value of derivative instruments after dedesignation are recorded in earnings and are included in the Derivatives Not Designated as Hedging Instruments section below. The maximum length of time over which 3M hedges its exposure to the variability in future cash flows of the forecasted transactions is 36 months.

Cash Flow Hedging - Interest Rate Contracts:In the third and fourth quarters of 2014, the Company entered into forward starting interest rate swaps with notional amounts totaling 500 million Euros as a hedge against interest rate volatility associated with the forecasted issuance of fixed rate debt. 3M terminated these interest rate swaps upon issuance of 750 million Euros aggregate principal amount of twelve-year fixed rate notes in connection with 3M's 1.250 billion Eurobond offering in November 2014. The termination resulted in an $8 million pre-tax ($5 million after-tax) loss within accumulated other comprehensive income that will be amortized over the twelve-year life of the notes.

In the first six months of 2016, the Company entered into forward starting interest rate swaps that expired in December 2016 with an aggregate notional amount of $300 million as a hedge against interest rate volatility associated with a forecasted issuance of fixed rate debt. Upon issuance of medium-term notes in September 2016, 3M terminated these interest rate swaps. The termination resulted in an immaterial loss within accumulated other comprehensive income that will be amortized over the respective lives of the debt. In the fourth quarter of 2016, the Company entered into forward starting interest rate swaps with a notional amount of $200 million as a hedge against interest rate volatility associated with a forecasted issuance of fixed rate debt.

In the first, second, and third quarters of 2017, the Company entered into additional forward starting interest rate swaps with notional amounts of $200 million in each quarter as hedges against interest rate volatility associated with a forecasted issuance of fixed rate debt. Prior to the issuance of medium-term notes in October 2017, 3M terminated these interest rate swaps. The termination resulted in an immaterial loss within accumulated other comprehensive income that will be amortized over the respective lives of the debt.

The amortization of gains and losses on forward starting interest rate swaps is included in the tables below as part of the gain/(loss) recognized in income on the effective portion of derivatives as a result of reclassification from accumulated other comprehensive income.

As of December31, 2017, the Company had a balance of $112 million associated with the after tax net unrealized loss associated with cash flow hedging instruments recorded in accumulated other comprehensive income. This includes a remaining balance of $8 million (after tax loss) related to forward starting interest rate swaps, which will be amortized over the respective lives of the notes. Based on exchange rates as of December31, 2017, 3M expects to reclassify approximately $64 million, $30 million, and approximately $18 million of the after-tax net unrealized foreign exchange cash flow hedging losses to earnings in 2018, 2019, and after 2019, respectively (with the impact offset by earnings/losses from underlying hedged items).

The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative instruments designated as cash flow hedges are provided in the following table. Reclassifications of amounts from accumulated other comprehensive income into income include accumulated gains (losses) on dedesignated hedges at the time earnings are impacted by the forecasted transaction.

PretaxGain(Loss)Recognizedin

PretaxGain(Loss)

IncomeonEffectivePortionof

IneffectivePortionofGain

RecognizedinOther

DerivativeasaResultof

(Loss)onDerivativeand

Comprehensive

Reclassificationfrom

AmountExcludedfrom

IncomeonEffective

AccumulatedOther

EffectivenessTesting

YearendedDecember31, 2017

PortionofDerivative

ComprehensiveIncome

RecognizedinIncome

(Millions)

Amount

Location

Amount

Location

Amount

Foreign currency forward/option contracts

(305)

Cost of sales

Interest rate swap contracts

(6)

Interest expense

(1)

Interest expense

Total

(311)


YearendedDecember31, 2016
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	58	Cost of sales	$	110	Cost of sales	$	-
Interest rate swap contracts		(1)	Interest expense		(1)	Interest expense		-
Total	$	57		$	109		$	-


YearendedDecember31, 2015
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	212	Cost of sales	$	178	Cost of sales	$	-
Commodity price swap contracts		-	Cost of sales		(2)	Cost of sales		-
Interest rate swap contracts		-	Interest expense		(2)	Interest expense		-
Total	$	212		$	174		$	-

Fair Value Hedges:

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.

Fair Value Hedging - Interest Rate Swaps: The Company manages interest expense using a mix of fixed and floating rate debt. To help manage borrowing costs, the Company may enter into interest rate swaps. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense. These fair value hedges are highly effective and, thus, there is no impact on earnings due to hedge ineffectiveness.

In November2013, 3M issued a Eurobond due in 2021 for a face amount of 600 million Euros. Upon debt issuance, 3M completed a fixed-to-floating interest rate swap on a notional amount of 300 million Euros as a fair value hedge of a portion of the fixed interest rate Eurobond obligation.

In June2014, 3M issued $950 million aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into an interest rate swap to convert $600 million of a $625 million note included in this issuance to an interest rate based on a floating three-month LIBOR index as a fair value hedge of a portion of the fixed interest rate medium-term note obligation.

In August 2015, 3M issued $1.500 billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into two interest rate swaps as fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first converted a $450 million three-year fixed rate note, and the second converted $300 million of a five-year fixed rate note included in this issuance to an interest rate based on a floating three-month LIBOR index.

In the fourth quarter of 2017, the Company entered into an interest rate swap with a notional amount of $200 million that converted the company's fixed-rate medium-term note due 2020 into a floating-rate note as a hedge of its exposure to changes in the fair value that is attributable to interest rate risk.

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items are as follows:



	Gain(Loss)onDerivative			Gain(Loss)onHedgedItem
YearendedDecember31, 2017	RecognizedinIncome			RecognizedinIncome
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(9)	Interest expense	$	9
Total		$	(9)		$	9


YearendedDecember31, 2016
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(2)	Interest expense	$	2
Total		$	(2)		$	2


YearendedDecember31, 2015
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(2)	Interest expense	$	2
Total		$	(2)		$	2

Net Investment Hedges:

The Company may use non-derivative (foreign currency denominated debt) and derivative (foreign exchange forward contracts) instruments to hedge portions of the Company's investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within other comprehensive income. The remainder of the change in value of such instruments is recorded in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. To the extent foreign currency denominated debt is not designated in or is dedesignated from a net investment hedge relationship, changes in value of that portion of foreign currency denominated debt due to exchange rate changes are recorded in earnings through their maturity date.

3M's use of foreign exchange forward contracts designated in hedges of the Company's net investment in foreign subsidiaries can vary by time period depending on when foreign currency denominated debt balances designated in such relationships are dedesignated, matured, or are newly issued and designated. Additionally, variation can occur in connection with the extent of the Company's desired foreign exchange risk coverage.

At December31, 2017, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 150 million Euros and approximately 248 billion South Korean Won, along with a principal amount of long-term debt instruments designated in net investment hedges totaling 4.4 billion Euros. The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from 2018 to 2031.

The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative and nonderivative instruments designated as net investment hedges are as follows. There were no reclassifications of the effective portion of net investment hedges out of accumulated other comprehensive income into income for the periods presented in the table below.



	PretaxGain(Loss)
	Recognizedas
	CumulativeTranslation
	withinOther		IneffectivePortionofGain(Loss)on
	ComprehensiveIncome		InstrumentandAmountExcluded
	onEffectivePortionof		fromEffectivenessTesting
YearendedDecember31, 2017	Instrument		RecognizedinIncome
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(667)	N/A	$	-
Foreign currency forward contracts		(58)	Cost of sales		7
Total	$	(725)		$	7


YearendedDecember31, 2016
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	215	N/A	$	-
Foreign currency forward contracts		(9)	Cost of sales		(3)
Total	$	206		$	(3)


YearendedDecember31, 2015
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	63	N/A	$	-
Foreign currency forward contracts		143	Cost of sales		11
Total	$	206		$	11

Derivatives Not Designated as Hedging Instruments:

Derivatives not designated as hedging instruments include dedesignated foreign currency forward and option contracts that formerly were designated in cash flow hedging relationships (as referenced in the Cash Flow Hedges section above). In addition, 3M enters into foreign currency forward contracts to offset, in part, the impacts of certain intercompany activities (primarily associated with intercompany licensing arrangements) and enters into commodity price swaps to offset, in part, fluctuations in costs associated with the use of certain commodities and precious metals. These derivative instruments are not designated in hedging relationships; therefore, fair value gains and losses on these contracts are recorded in earnings. The Company does not hold or issue derivative financial instruments for trading purposes.

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows:


	Gain(Loss)onDerivativeRecognizedin Income
			Yearended		Yearended		Yearended
			December31,		December31,		December31,
			2017		2016		2015
(Millions)	Location		Amount		Amount		Amount
Foreign currency forward/option contracts	Cost of sales	$	11	$	(14)	$	5
Foreign currency forward contracts	Interest expense		(141)		9		82
Commodity price swap contracts	Cost of sales		-		-		(3)
Total		$	(130)	$	(5)	$	84

Location and Fair Value Amount of Derivative Instruments:

The following tables summarize the fair value of 3M's derivative instruments, excluding nonderivative instruments used as hedging instruments, and their location in the consolidated balance sheet. Notional amounts below are presented at period end foreign exchange rates, except for certain interest rate swaps, which are presented using the inception date's foreign exchange rate. Additional information with respect to the fair value of derivative instruments is included in Note 14.


	Gross		Assets			Liabilities
December31, 2017	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivativesdesignatedas
hedging instruments
Foreign currency forward/option contracts	$	2,204	Other current assets	$	7	Other current liabilities	$	109
Foreign currency forward/option contracts		1,392	Other assets		20	Other liabilities		56
Interest rate swap contracts		450	Other current assets		-	Other current liabilities		1
Interest rate swap contracts		1,503	Other assets		21	Other liabilities		6
Total derivatives designated as hedging instruments				$	48		$	172

Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	4,974	Other current assets	$	30	Other current liabilities	$	25
Total derivatives not designated as hedging instruments				$	30		$	25

Total derivative instruments				$	78		$	197


	Gross		Assets			Liabilities
December31, 2016	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivativesdesignatedas
hedging instruments
Foreign currency forward/option contracts	$	2,160	Other current assets	$	107	Other current liabilities	$	9
Foreign currency forward/option contracts		1,459	Other assets		86	Other liabilities		3
Interest rate swap contracts		1,953	Other assets		25	Other current liabilities		1
Total derivatives designated as hedging instruments				$	218		$	13

Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	5,655	Other current assets	$	41	Other current liabilities	$	82
Total derivatives not designated as hedging instruments				$	41		$	82

Total derivative instruments				$	259		$	95

Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments:

The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company's risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. As of December31, 2017, 3M has International Swaps and Derivatives Association (ISDA) agreements with 17 applicable banks and financial institutions which contain netting provisions. In addition to a master agreement with 3M supported by a primary counterparty's parent guarantee, 3M also has associated credit support agreements in place with 16 of its primary derivative counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral (when the market value of transactions covered by these agreements exceeds specified thresholds or if a counterparty's credit rating has been downgraded to a predetermined rating). The Company does not anticipate nonperformance by any of these counterparties.

3M has elected to present the fair value of derivative assets and liabilities within the Company's consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. However, the following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period based on the 3M entity that is a party to the transactions. Derivatives not subject to master netting agreements are not eligible for net presentation. As of the applicable dates presented below, no cash collateral had been received or pledged related to these derivative instruments.

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties


			GrossAmountsnotOffsetinthe
			ConsolidatedBalanceSheetthatareSubject
	GrossAmountof		toMasterNettingAgreements
	DerivativeAssets		GrossAmountof
	Presentedinthe		EligibleOffsetting
December31, 2017	Consolidated		Recognized		CashCollateral		NetAmountof
(Millions)	BalanceSheet		DerivativeLiabilities		Received		DerivativeAssets
Derivatives subject to master netting agreements	$	78	$	27	$	-	$	51
Derivatives not subject to master netting agreements		-						-
Total	$	78					$	51


December31, 2016
(Millions)
Derivatives subject to master netting agreements	$	259	$	39	$	-	$	220
Derivatives not subject to master netting agreements		-						-
Total	$	259					$	220

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties


			GrossAmountsnotOffsetinthe
			ConsolidatedBalanceSheetthatareSubject
	GrossAmountof		toMasterNettingAgreements
	DerivativeLiabilities		GrossAmountof
	Presentedinthe		EligibleOffsetting
December31, 2017	Consolidated		Recognized		CashCollateral		NetAmountof
(Millions)	BalanceSheet		DerivativeAssets		Pledged		DerivativeLiabilities
Derivatives subject to master netting agreements	$	197	$	27	$	-	$	170
Derivatives not subject to master netting agreements		-						-
Total	$	197					$	170


December31, 2016
(Millions)
Derivatives subject to master netting agreements	$	93	$	39	$	-	$	54
Derivatives not subject to master netting agreements		2						2
Total	$	95					$	56

Foreign Currency Effects

3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, decreased pre-tax income by approximately $152 million in 2017 and decreased pre-tax income by approximately $69 million in 2016. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks.

NOTE 14. Fair Value Measurements

3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis:

For 3M, assets and liabilities that are measured at fair value on a recurring basis primarily relate to available-for-sale marketable securities and certain derivative instruments. Derivatives include cash flow hedges, interest rate swaps and net investment hedges. The information in the following paragraphs and tables primarily addresses matters relative to these financial assets and liabilities. Separately, there were no material fair value measurements with respect to nonfinancial assets or liabilities that are recognized or disclosed at fair value in the Company's financial statements on a recurring basis for 2017 and 2016.

3M uses various valuation techniques, which are primarily based upon the market and income approaches, with respect to financial assets and liabilities. Following is a description of the valuation methodologies used for the respective financial assets and liabilities measured at fair value.

Available-for-sale marketable securities - except certain U.S. municipal securities:

Marketable securities, except certain U.S. municipal securities, are valued utilizing multiple sources. A weighted average price is used for these securities. Market prices are obtained for these securities from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple prices are used as inputs into a distribution-curve-based algorithm to determine the daily fair value to be used. 3M classifies U.S. treasury securities as level 1, while all other marketable securities (excluding certain U.S. municipal securities) are classified as level 2. Marketable securities are discussed further in Note 10.

Available-for-sale marketable securities -certain U.S. municipal securities only:

3M holds municipal bonds with the City of Nevada, Missouri, which represent 3M's only U.S. municipal securities holding as of December31, 2017. Due to the nature of this security, the valuation method utilized will include the financial health of the City of Nevada, any recent municipal bond issuances by Nevada, and macroeconomic considerations related to the direction of interest rates and the health of the overall municipal bond market, and as such will be classified as a level 3 security.

Derivative instruments:

The Company's derivative assets and liabilities within the scope of ASC 815, Derivatives and Hedging, are required to be recorded at fair value. The Company's derivatives that are recorded at fair value include foreign currency forward and option contracts, commodity price swaps, interest rate swaps, and net investment hedges where the hedging instrument is recorded at fair value. Net investment hedges that use foreign currency denominated debt to hedge 3M's net investment are not impacted by the fair value measurement standard under ASC 820, as the debt used as the hedging instrument is marked to a value with respect to changes in spot foreign currency exchange rates and not with respect to other factors that may impact fair value.

3M has determined that foreign currency forwards, commodity price swaps, currency swaps, foreign currency options, interest rate swaps and cross-currency swaps will be considered level 2 measurements. 3M uses inputs other than quoted prices that are observable for the asset. These inputs include foreign currency exchange rates, volatilities, and interest rates. Derivative positions are primarily valued using standard calculations/models that use as their basis readily observable market parameters. Industry standard data providers are 3M's primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third-party or counterparty quotes and a net present value stream of cash flows model.

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis.


			FairValueMeasurements
Description	FairValueat		UsingInputsConsideredas
(Millions)	December31, 2017		Level1		Level2		Level3
Assets:
Available-for-sale:
Marketable securities:
Corporate debt securities	$	14	$	-	$	14	$	-
Commercial paper		899		-		899		-
Certificates of deposit/time deposits		76		-		76		-
Asset-backed securities:
Automobile loan related		16		-		16		-
Credit card related		68		-		68		-
U.S. municipal securities		30		-		-		30
Derivative instruments - assets:
Foreign currency forward/option contracts		57		-		57		-
Interest rate swap contracts		21		-		21		-

Liabilities:
Derivative instruments - liabilities:
Foreign currency forward/option contracts		190		-		190		-
Interest rate swap contracts		7		-		7		-


			FairValueMeasurements
Description	FairValueat		UsingInputsConsideredas
(Millions)	December31, 2016		Level1		Level2		Level3
Assets:
Available-for-sale:
Marketable securities:
Corporate debt securities	$	10	$	-	$	10	$	-
Commercial paper		14		-		14		-
Certificates of deposit/time deposits		197		-		197		-
Asset-backed securities:
Automobile loan related		31		-		31		-
Credit card related		18		-		18		-
Other		7		-		7		-
U.S. municipal securities		20		-		-		20
Derivative instruments - assets:
Foreign currency forward/option contracts		234		-		234		-
Interest rate swap contracts		25		-		25		-

Liabilities:
Derivative instruments - liabilities:
Foreign currency forward/option contracts		94		-		94		-
Interest rate swap contracts		1		-		1		-

The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the table above that used significant unobservable inputs (level 3).


Marketablesecurities-certainU.S.municipal securities only
(Millions)	2017		2016		2015
Beginning balance	$	20	$	12	$	15
Total gains or losses:
Included in earnings		-		-		-
Included in other comprehensive income		-		-		-
Purchases and issuances		13		12		-
Sales and settlements		(3)		(4)		(3)
Transfers in and/or out of level 3		-		-		-
Ending balance		30		20		12
Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period		-		-		-

In addition, the plan assets of 3M's pension and postretirement benefit plans are measured at fair value on a recurring basis (at least annually). Refer to Note 12.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis:

Disclosures are required for certain assets and liabilities that are measured at fair value, but are recognized and disclosed at fair value on a nonrecurring basis in periods subsequent to initial recognition. For 3M, such measurements of fair value relate primarily to long-lived asset impairments. During 2017, the Company recognized approximately $61 million in long-lived asset impairments within its Electronics and Energy and Industrial business segments, with the complete carrying amount of such assets written off and included in operating income results. There were no material long-lived asset impairments for 2016 and 2015.

Fair Value of Financial Instruments:

The Company's financial instruments include cash and cash equivalents, marketable securities, accounts receivable, certain investments, accounts payable, borrowings, and derivative contracts. The fair values of cash equivalents, accounts receivable, accounts payable, and short-term borrowings and current portion of long-term debt approximated carrying values because of the short-term nature of these instruments. Available-for-sale marketable securities, in addition to certain derivative instruments, are recorded at fair values as indicated in the preceding disclosures. To estimate fair values (classified as level 2) for its long-term debt, the Company utilized third-party quotes, which are derived all or in part from model prices, external sources, market prices, or the third-party's internal records. Information with respect to the carrying amounts and estimated fair values of these financial instruments follow:


	December31, 2017				December31, 2016
	Carrying		Fair		Carrying		Fair
(Millions)	Value		Value		Value		Value
Long-term debt, excluding current portion	$	12,096	$	12,535	$	10,678	$	11,168

The fair values reflected above consider the terms of the related debt absent the impacts of derivative/hedging activity. The carrying amount of long-term debt referenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair value hedges and by the designation of fixed rate Eurobond securities issued by the Company as hedging instruments of the Company's net investment in its European subsidiaries. Many of 3M's fixed-rate bonds were trading at a premium at December31, 2017 and 2016 due to the low interest rates and tightening of 3M's credit spreads.

NOTE 15. Commitments and Contingencies

Capital and Operating Leases:

Rental expense under operating leases was $343 million in 2017, $318 million in 2016 and $316 million in 2015. It is 3M's practice to secure renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain a presence in a leased facility. 3M has two primary capital leases. The first, which became effective in April2003, involves a building in the United Kingdom (with a lease term of 22 years). During the second quarter of 2003, 3M recorded a capital lease asset and obligation of approximately 33.5 million British Pound (GBP), or approximately $27 million at December31, 2017, exchange rates. For the second, 3M sold and leased-back certain recently constructed machinery and equipment in return for municipal bonds with the City of Nevada, Missouri. 3M recorded a capital lease asset and obligation of approximately $13 million in 2017, $12 million in 2016, and $15 million in earlier years, with a lease term of 15 years.

Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December31, 2017, were as follows:


			Operating
(Millions)	CapitalLeases		Leases
2018	$	12	$	258
2019		10		212
2020		9		160
2021		6		106
2022		5		88
After 2022		34		274
Total	$	76	$	1,098
Less: Amounts representing interest		3
Present value of future minimum lease payments		73
Less: Current obligations under capital leases		13
Long-term obligations under capital leases	$	60

Unconditional Purchase Obligations:

Unconditional purchase obligations are defined as an agreement to purchase goods or services that is enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances). The Company estimates its total unconditional purchase obligation commitment (for those contracts with terms in excess of one year) as of December31, 2017, at $800 million. Payments by year are estimated as follows: 2018 ($271 million), 2019 ($211 million), 2020 ($150 million), 2021 ($99 million), 2022 ($56 million) and after 2022 ($13 million). Many of these commitments relate to take or pay contracts, in which 3M guarantees payment to ensure availability of products or services that are sold to customers. The Company expects to receive consideration (products or services) for these unconditional purchase obligations. The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated. The majority of 3M's products and services are purchased as needed, with no unconditional commitment. For this reason, these amounts will not provide an indication of the Company's expected future cash outflows related to purchases.

Warranties/Guarantees:

3M's accrued product warranty liabilities, recorded on the Consolidated Balance Sheet as part of current and long-term liabilities, are estimated at approximately $50 million at December31, 2017, and $47 million at December31, 2016. 3M does not consider this amount to be material. The fair value of 3M guarantees of loans with third parties and other guarantee arrangements are not material.

Related Party Activity:

3M does not have any material related party activity.

Legal Proceedings:

The Company and some of its subsidiaries are involved in numerous claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. These include various products liability (involving products that the Company now or formerly manufactured and sold), intellectual property, and commercial claims and lawsuits, including those brought under the antitrust laws, and environmental proceedings. Unless otherwise stated, the Company is vigorously defending all such litigation.

Process for Disclosure and Recording of Liabilities and Insurance Receivables Related to Legal Proceedings

Many lawsuits and claims involve highly complex issues relating to causation, scientific evidence, and whether there are actual damages and are otherwise subject to substantial uncertainties. Assessments of lawsuits and claims can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The Company complies with the requirements of ASC 450, Contingencies, and related guidance, and records liabilities for legal proceedings in those instances where it can reasonably estimate the amount of the loss and where liability is probable. Where the reasonable estimate of the probable loss is a range, the Company records the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be made. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred.

The Company estimates insurance receivables based on an analysis of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim and remaining coverage, and records an amount it has concluded is likely to be recovered. For those insured matters where the Company has taken an accrual, the Company also records receivables for the amount of insurance that it expects to recover under the Company's insurance program. For those insured matters where the Company has not taken an accrual because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it expects to recover for the expense incurred.

Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of presently recorded liabilities. A future adverse ruling, settlement, or unfavorable development could result in future charges that could have a material adverse effect on the Company's results of operations or cash flows in the period in which they are recorded. Although the Company cannot estimate its exposure to all legal proceedings, it currently believes,except as described below,that such future charges, if any, would not have a material adverse effect on the consolidated financial position of the Company.Based on experience and developments, the Company reexamines its estimates of probable liabilities and associated expenses and receivables each period, and whether it is able to estimate a liability previously determined to be not estimable and/or not probable. Where appropriate, the Company makes additions to or adjustments of its estimated liabilities. As a result, the current estimates of the potential impact on the Company's consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company could change in the future.

The following sections first describe the significant legal proceedings in which the Company is involved, and then describe the liabilities and associated insurance receivables the Company has accrued relating to its significant legal proceedings.

Respirator Mask/Asbestos Litigation

As of December31, 2017, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 2,230 individual claimants, compared to approximately 2,660 individual claimants with actions pending at December31, 2016.

The vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of some of the Company's mask and respirator products and seek damages from the Company and other defendants for alleged personal injury from workplace exposures to asbestos, silica, coal mine dust or other occupational dusts found in products manufactured by other defendants or generally in the workplace. A minority of the lawsuits and claims resolved by and currently pending against the Company generally allege personal injury from occupational exposure to asbestos from products previously manufactured by the Company, which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company premises.

The Company's current volume of new and pending matters is substantially lower than it experienced at the peak of filings in 2003. The Company expects that filing of claims by unimpaired claimants in the future will continue to be at much lower levels than in the past. Accordingly, the number of claims alleging more serious injuries, including mesothelioma and other malignancies, will represent a greater percentage of total claims than in the past. The Company has prevailed in all twelve cases taken to trial, including ten of the eleven cases tried to verdict (such trials occurred in 1999, 2000, 2001, 2003, 2004, 2007, 2015, and the cases tried in 2016 and 2017-described below), and an appellate reversal in 2005 of the 2001 jury verdict adverse to the Company. The remaining case, tried in 2009, was dismissed by the court at the close of plaintiff's evidence, based on the court's legal finding that the plaintiff had not presented sufficient evidence to support a jury verdict. In August 2016, 3M received a unanimous verdict in its favor from a jury in state court in Kentucky, in 3M's first respirator trial involving coal mine dust. The estate of the plaintiff alleged that the 3M 8710 respirator is defective and caused his death because it did not protect him from harmful coal mine dust. The jury rejected plaintiff's claim and returned a verdict finding no liability against 3M. The verdict is final as the plaintiff did not file an appeal. In September 2017, 3M received a unanimous verdict in its favor from a jury in state court in Kentucky in 3M's second respirator trial involving coal mine dust. The jury ultimately determined that the plaintiff's claims were barred by the statute of limitations. In November 2017, the court denied the plaintiff's motion for a new trial. The plaintiff did not file an appeal, thereby ending the litigation.

The Company has demonstrated in these past trial proceedings that its respiratory protection products are effective as claimed when used in the intended manner and in the intended circumstances. Consequently the Company believes that claimants are unable to establish that their medical conditions, even if significant, are attributable to the Company's respiratory protection products. Nonetheless the Company's litigation experience indicates that claims of persons with malignant conditions are costlier to resolve than the claims of unimpaired persons, and it therefore believes the average cost of resolving pending and future claims on a per-claim basis will continue to be higher than it experienced in prior periods when the vast majority of claims were asserted by medically unimpaired claimants.

As previously reported, the State of West Virginia, through its Attorney General, filed a complaint in 2003 against the Company and two other manufacturers of respiratory protection products in the Circuit Court of Lincoln County, West Virginia, and amended its complaint in 2005. The amended complaint seeks substantial, but unspecified, compensatory damages primarily for reimbursement of the costs allegedly incurred by the State for worker's compensation and healthcare benefits provided to all workers with occupational pneumoconiosis and unspecified punitive damages. The case was inactive from the fourth quarter of 2007 until late 2013, other than a case management conference in March2011. In November2013, the State filed a motion to bifurcate the lawsuit into separate liability and damages proceedings. At the hearing on the motion, the court declined to bifurcate the lawsuit. No liability has been recorded for this matter because the Company believes that liability is not probable and estimable at this time. In addition, the Company is not able to estimate a possible loss or range of loss given the lack of any meaningful discovery responses by the State of West Virginia, the otherwise minimal activity in this case and the fact that the complaint asserts claims against two other manufacturers where a defendant's share of liability may turn on the law of joint and several liability and by the amount of fault, if any, a jury might allocate to each defendant if the case is ultimately tried.

Respirator Mask/Asbestos Liabilities and Insurance Receivables

The Company regularly conducts a comprehensive legal review of its respirator mask/asbestos liabilities. The Company reviews recent and historical claims data, including without limitation, (i) the number of pending claims filed against the Company, (ii) the nature and mix of those claims (i.e., the proportion of claims asserting usage of the Company's mask or respirator products and alleging exposure to each of asbestos, silica, coal or other occupational dusts, and claims pleading use of asbestos-containing products allegedly manufactured by the Company), (iii) the costs to defend and resolve pending claims, and (iv) trends in filing rates and in costs to defend and resolve claims, (collectively, the "Claims Data"). As part of its comprehensive legal review, the Company regularly provides the Claims Data to a third party with expertise in determining the impact of Claims Data on future filing trends and costs. The third party assists the Company in estimating the costs to defend and resolve pending and future claims. The Company uses these estimates to develop its best estimate of probable liability.

Developments may occur that could affect the Company's estimate of its liabilities. These developments include, but are not limited to, significant changes in (i) the key assumptions underlying the Company's accrual, including, the number of future claims, the nature and mix of those claims, the average cost of defending and resolving claims, and in maintaining trial readiness (ii)trial and appellate outcomes, (iii) the law and procedure applicable to these claims, and (iv)the financial viability of other co-defendants and insurers.

As a result of the Company's review of its respirator mask/asbestos liabilities and as a result of the cost of resolving claims of persons who claim more serious injuries, including mesothelioma and other malignancies, the Company increased its accruals in 2017 for respirator mask/asbestos liabilities by $71 million. In 2017, the Company made payments for legal fees and settlements of $58 million related to the respirator mask/asbestos litigation. As of December31, 2017 and 2016, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of $608 million and $595 million, respectively. This accrual represents the Company's best estimate of probable loss and reflects an estimation period for future claims that may be filed against the Company approaching the year 2050. The Company cannot estimate the amount or upper end of the range of amounts by which the liability may exceed the accrual the Company has established because of the (i)inherent difficulty in projecting the number of claims that have not yet been asserted or the time period in which future claims may be asserted, (ii)the complaints nearly always assert claims against multiple defendants where the damages alleged are typically not attributed to individual defendants so that a defendant's share of liability may turn on the law of joint and several liability, which can vary by state, (iii)the multiple factors described above that the Company considers in estimating its liabilities, and (iv)the several possible developments described above that may occur that could affect the Company's estimate of liabilities.

As of December31, 2017, the Company's receivable for insurance recoveries related to the respirator mask/asbestos litigation was $4 million. The Company is seeking coverage under the policies of certain insolvent and other insurers. Once those claims for coverage are resolved, the Company will have collected substantially all of its remaining insurance coverage for respirator mask/asbestos claims.

Respirator Mask/Asbestos Litigation - Aearo Technologies

On April1, 2008, a subsidiary of the Company purchased the stock of Aearo Holding Corp., the parent of Aearo Technologies ("Aearo"). Aearo manufactured and sold various products, including personal protection equipment, such as eye, ear, head, face, fall and certain respiratory protection products.

As of December31, 2017, Aearo and/or other companies that previously owned and operated Aearo's respirator business (American Optical Corporation, Warner-Lambert LLC, AO Corp. and Cabot Corporation ("Cabot")) are named defendants, with multiple co-defendants, including the Company, in numerous lawsuits in various courts in which plaintiffs allege use of mask and respirator products and seek damages from Aearo and other defendants for alleged personal injury from workplace exposures to asbestos, silica-related, or other occupational dusts found in products manufactured by other defendants or generally in the workplace.

As a result of the review of Aearo's respirator mask/asbestos liabilities, the Company increased Aearo's accruals in 2017 for respirator mask/asbestos liabilities by $13 million. As of December31, 2017, the Company, through its Aearo subsidiary, had accruals of $30 million for product liabilities and defense costs related to current and future Aearo-related asbestos and silica-related claims. This accrual represents the Company's best estimate of Aearo's probable loss and reflects an estimation period for future claims that may be filed against the Aearo approaching the year 2050. Responsibility for legal costs, as well as for settlements and judgments, is currently shared in an informal arrangement among Aearo, Cabot, American Optical Corporation and a subsidiary of Warner Lambert and their respective insurers (the "Payor Group"). Liability is allocated among the parties based on the number of years each company sold respiratory products under the "AO Safety" brand and/or owned the AO Safety Division of American Optical Corporation and the alleged years of exposure of the individual plaintiff. Aearo's share of the contingent liability is further limited by an agreement entered into between Aearo and Cabot on July11, 1995. This agreement provides that, so long as Aearo pays to Cabot a quarterly fee of $100,000, Cabot will retain responsibility and liability for, and indemnify Aearo against, any product liability claims involving exposure to asbestos, silica, or silica products for respirators sold prior to July11, 1995. Because of the difficulty in determining how long a particular respirator remains in the stream of commerce after being sold, Aearo and Cabot have applied the agreement to claims arising out of the alleged use of respirators involving exposure to asbestos, silica or silica products prior to January1, 1997. With these arrangements in place, Aearo's potential liability is limited to exposures alleged to have arisen from the use of respirators involving exposure to asbestos, silica, or silica products on or after January1, 1997. To date, Aearo has elected to pay the quarterly fee. Aearo could potentially be exposed to additional claims for some part of the pre-July11, 1995 period covered by its agreement with Cabot if Aearo elects to discontinue its participation in this arrangement, or if Cabot is no longer able to meet its obligations in these matters.

In March2012, Cabot CSC Corporation and Cabot Corporation filed a lawsuit against Aearo in the Superior Court of Suffolk County, Massachusetts seeking declaratory relief as to the scope of Cabot's indemnity obligations under the July11, 1995 agreement, including whether Cabot has retained liability for coal workers' pneumoconiosis claims, and seeking damages for breach of contract. In 2014, the court granted Aearo's motion for summary judgment on two claims, but declined to rule on two issues: the specific liability for certain known coal mine dust lawsuits; and Cabot's claim for allocation of liability between injuries allegedly caused by exposure to coal mine dust and injuries allegedly caused by exposure to silica dust. Following additional discovery, the parties filed new motions for summary judgment. In February 2016, the court ruled in favor of Aearo on these two remaining issues, and ordered that Cabot, and not Aearo, is solely responsible for all liability for the coal mine dust lawsuits under the 1995 agreement. In May 2017, the Massachusetts Court of Appeals affirmed the trial court order in favor of Aearo.

Developments may occur that could affect the estimate of Aearo's liabilities. These developments include, but are not limited to: (i)significant changes in the number of future claims, (ii)significant changes in the average cost of resolving claims, (iii)significant changes in the legal costs of defending these claims, (iv)significant changes in the mix and nature of claims received, (v)trial and appellate outcomes, (vi)significant changes in the law and procedure applicable to these claims, (vii)significant changes in the liability allocation among the co-defendants, (viii)the financial viability of members of the Payor Group including exhaustion of available insurance coverage limits, and/or (ix)a determination that the interpretation of the contractual obligations on which Aearo has estimated its share of liability is inaccurate. The Company cannot determine the impact of these potential developments on its current estimate of Aearo's share of liability for these existing and future claims. If any of the developments described above were to occur, the actual amount of these liabilities for existing and future claims could be significantly larger than the amount accrued.

Because of the inherent difficulty in projecting the number of claims that have not yet been asserted, the complexity of allocating responsibility for future claims among the Payor Group, and the several possible developments that may occur that could affect the estimate of Aearo's liabilities, the Company cannot estimate the amount or range of amounts by which Aearo's liability may exceed the accrual the Company has established.

Environmental Matters and Litigation

The Company's operations are subject to environmental laws and regulations including those pertaining to air emissions, wastewater discharges, toxic substances, and the handling and disposal of solid and hazardous wastes enforceable by national, state, and local authorities around the world, and private parties in the United States and abroad. These laws and regulations provide, under certain circumstances, a basis for the remediation of contamination, for restoration of or compensation for damages to natural resources, and for personal injury and property damage claims. The Company has incurred, and will continue to incur, costs and capital expenditures in complying with these laws and regulations, defending personal injury and property damage claims, and modifying its business operations in light of its environmental responsibilities. In its effort to satisfy its environmental responsibilities and comply with environmental laws and regulations, the Company has established, and periodically updates, policies relating to environmental standards of performance for its operations worldwide.

Under certain environmental laws, including the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state laws, the Company may be jointly and severally liable, typically with other companies, for the costs of remediation of environmental contamination at current or former facilities and at off-site locations. The Company has identified numerous locations, most of which are in the United States, at which it may have some liability. Please refer to the section entitled "Environmental Liabilities and Insurance Receivables" that follows for information on the amount of the accrual.

Environmental Matters

As previously reported, the Company has been voluntarily cooperating with ongoing reviews by local, state, federal (primarily the U.S. Environmental Protection Agency (EPA)), and international agencies of possible environmental and health effects of various perfluorinated compounds, including perfluorooctanyl compounds such as perfluorooctanoate ("PFOA"), perfluorooctane sulfonate ("PFOS"), or similar compounds ("PFCs"). As a result of its phase-out decision in May2000, the Company no longer manufactures perfluorooctanyl compounds. The company ceased manufacturing and using the vast majority of these compounds within approximately two years of the phase-out announcement, and ceased all manufacturing and the last significant use of this chemistry by the end of 2008. Through its ongoing life cycle management and its raw material composition identification processes associated with the Company's policies covering the use of all persistent and bio-accumulative materials, the Company continues to control or eliminate the presence of certain PFCs in purchased materials or as byproducts in some of 3M's fluorochemical manufacturing processes, products, and waste streams.

Regulatory activities concerning PFOA and/or PFOS continue in the United States, Europe and elsewhere, and before certain international bodies. These activities include gathering of exposure and use information, risk assessment, and consideration of regulatory approaches.As the database of studies of both PFOA and PFOS has expanded, the EPA has developed human health effects documents summarizing the available data from these studies. In February2014, the EPA initiated external peer review of its draft human health effects documents for PFOA and PFOS. The peer review panel met in August2014. In May 2016, the EPA announced lifetime health advisory levels for PFOA and PFOS at 70 parts per trillion (ppt) (superseding the provisional levels established by the EPA in 2009 of 400 ppt for PFOA and 200 ppt for PFOS). Where PFOA and PFOS are found together, EPA recommends that the concentrations be added together, and the lifetime health advisory for PFOA and PFOS combined is also 70 ppt. Lifetime health advisories, while not enforceable, serve as guidance and are benchmarks for determining if concentrations of chemicals in tap water from public utilities are safe for public consumption. In an effort to collect exposure information under the Safe Drinking Water Act, the EPA published on May2, 2012 a list of unregulated substances, including six PFCs, required to be monitored during the period 2013-2015 by public water system suppliers to determine the extent of their occurrence. Through January 2017, the EPA reported results for 4,920 public water supplies nationwide. Based on the 2016 lifetime health advisory, 13 public water supplies exceed the level for PFOA and 46 exceed the level for PFOS (unchanged from the July 2016 EPA summary). A technical advisory issued by EPA in September 2016 on laboratory analysis of drinking water samples stated that 65 public water supplies had exceeded the combined level for PFOA and PFOS. These results are based on one or more samples collected during the period 2012-2015 and do not necessarily reflect current conditions of these public water supplies. EPA reporting does not identify the sources of the PFOA and PFOS in the public water supplies.

The Company is continuing to make progress in its work, under the supervision of state regulators, to address its historic disposal of PFC-containing waste associated with manufacturing operations at the Decatur, Alabama, Cottage Grove, Minnesota, and Cordova,Illinois plants. As previously reported, the Company entered into a voluntary remedial action agreement with the Alabama Department of Environmental Management (ADEM) to address the presence of PFCs in the soil at the Company's manufacturing facility in Decatur, Alabama. Pursuant to a permit issued by ADEM, for approximately twenty years, the Company incorporated its wastewater treatment plant sludge containing PFCs in fields at its Decatur facility. After a review of the available options to address the presence of PFCs in the soil, ADEM agreed that the preferred remediation option is to use a multilayer cap over the former sludge incorporation areas on the manufacturing site with subsequent groundwater migration controls and treatment. Implementation of that plan continues and is expected to be completed in 2018.

The Company continues to work with the Minnesota Pollution Control Agency (MPCA) pursuant to the terms of the previously disclosed May2007 Settlement Agreement and Consent Order to address the presence of certain PFCs in the soil and groundwater at former disposal sites in Washington County, Minnesota (Oakdale and Woodbury) and at the Company's manufacturing facility at Cottage Grove, Minnesota. Under this agreement, the Company's principal obligations include (i)evaluating releases of certain PFCs from these sites and proposing response actions; (ii)providing treatment or alternative drinking water upon identifying any level exceeding a Health Based Value ("HBV") or Health Risk Limit ("HRL") (i.e., the amount of a chemical in drinking water determined by the Minnesota Department of Health (MDH) to be safe for human consumption over a lifetime) for certain PFCs for which a HBV and/or HRL exists as a result of contamination from these sites; (iii)remediating identified sources of other PFCs at these sites that are not controlled by actions to remediate PFOA and PFOS; and (iv)sharing information with the MPCA about certain perfluorinated compounds. During 2008, the MPCA issued formal decisions adopting remedial options for the former disposal sites in Washington County, Minnesota (Oakdale and Woodbury). In August2009, the MPCA issued a formal decision adopting remedial options for the Company's Cottage Grove manufacturing facility. During the spring and summer of 2010, 3M began implementing the agreed upon remedial options at the Cottage Grove and Woodbury sites. 3M commenced the remedial option at the Oakdale site in late 2010. At each location the remedial options were recommended by the Company and approved by the MPCA. Remediation work has been completed at the Oakdale and Woodbury sites, and they are in an operational maintenance mode. Remediation will continue at the Cottage Grove site during 2018.

In August2014, the Illinois EPA approved a request by the Company to establish a groundwater management zone at its manufacturing facility in Cordova, Illinois, which includes ongoing pumping of impacted site groundwater, groundwater monitoring and routine reporting of results.

In May 2017, the MDH issued new HBVs for PFOS and PFOA. The new HBVs are 35 ppt for PFOA and 27 ppt for PFOS. In connection with its announcement, the MDH stated that "Drinking water with PFOA and PFOS, even at the levels above the updated values, does not represent an immediate health risk. These values are designed to reduce long-term health risks across the population and are based on multiple safety factors to protect the most vulnerable citizens, which makes them overprotective for most of the residents in our state." In December 2017, the MDH issued a new HBV for perfluorobutane sulfonate (PFBS) of 2 ppb.

The Company cannot predict what additional regulatory actions arising from the foregoing proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions.

Alabama Environmental Litigation

As previously reported, a former employee filed a purported class action lawsuit in 2002 in the Circuit Court of Morgan County, Alabama (the "St. John case"), seeking unstated damages and alleging that the plaintiffs suffered fear, increased risk, subclinical injuries, and property damage from exposure to certain perfluorochemicals at or near the Company's Decatur, Alabama, manufacturing facility. The court in 2005 granted the Company's motion to dismiss the named plaintiff's personal injury-related claims on the basis that such claims are barred by the exclusivity provisions of the state's Workers Compensation Act. The plaintiffs' counsel filed an amended complaint in November2006, limiting the case to property damage claims on behalf of a purported class of residents and property owners in the vicinity of the Decatur plant.In June 2015, the plaintiffs filed an amended complaint adding additional defendants, including BFI Waste Management Systems of Alabama, LLC; BFI Waste Management of North America, LLC; the City of Decatur, Alabama; Morgan County, Alabama; Municipal Utilities Board of Decatur; and Morgan County, Alabama, d/b/a Decatur Utilities.

In 2005, the judge -- in a second purported class action lawsuit filed by three residents of Morgan County, Alabama, seeking unstated compensatory and punitive damages involving alleged damage to their property from emissions of certain perfluorochemical compounds from the Company's Decatur, Alabama, manufacturing facility that formerly manufactured those compounds (the "Chandler case") -- granted the Company's motion to abate the case, effectively putting the case on hold pending the resolution of class certification issues in the St. John case. Despite the stay, plaintiffs filed an amended complaint seeking damages for alleged personal injuries and property damage on behalf of the named plaintiffs and the members of a purported class. No further action in the case is expected unless and until the stay is lifted.

In February2009, a resident of Franklin County, Alabama, filed a purported class action lawsuit in the Circuit Court of Franklin County (the "Stover case") seeking compensatory damages and injunctive relief based on the application by the Decatur utility's wastewater treatment plant of wastewater treatment sludge to farmland and grasslands in the state that allegedly contain PFOA, PFOS and other perfluorochemicals. The named plaintiff seeks to represent a class of all persons within the State of Alabama who have had PFOA, PFOS, and other perfluorochemicals released or deposited on their property. In March2010, the Alabama Supreme Court ordered the case transferred from Franklin County to Morgan County. In May2010, consistent with its handling of the other matters, the Morgan County Circuit Court abated this case, putting it on hold pending the resolution of the class certification issues in the St. John case.

In October 2015, West Morgan-East Lawrence Water & Sewer Authority (Water Authority) filed an individual complaint against 3M Company, Dyneon, L.L.C, and Daikin America, Inc., in the U.S. District Court for the Northern District of Alabama. The complaint also includes representative plaintiffs who brought the complaint on behalf of themselves, and a class of all owners and possessors of property who use water provided by the Water Authority and five local water works to which the Water Authority supplies water (collectively, the "Water Utilities"). The complaint seeks compensatory and punitive damages and injunctive relief based on allegations that the defendants' chemicals, including PFOA and PFOS from their manufacturing processes in Decatur, have contaminated the water in the Tennessee River at the water intake, and that the chemicals cannot be removed by the water treatment processes utilized by the Water Authority. In September 2016, the court granted 3M's motion to dismiss plaintiffs' trespass claims with prejudice, negligence claims for personal injuries, and private nuisance claims, and denied the motion to dismiss the plaintiffs' negligence claims for property damage, public nuisance, abatement of nuisance, battery and wantonness.

In June 2016, the Tennessee Riverkeeper, Inc. (Riverkeeper), a non-profit corporation, filed a lawsuit in the U.S. District Court for the Northern District of Alabama against 3M; BFI Waste Systems of Alabama; the City of Decatur, Alabama; and the Municipal Utilities Board of Decatur, Morgan County, Alabama. The complaint alleges that the defendants violated the Resource Conservation and Recovery Act in connection with the disposal of certain PFCs through their ownership and operation of their respective sites. The complaint further alleges such practices may present an imminent and substantial endangerment to health and/or the environment and that Riverkeeper has suffered and will continue to suffer irreparable harm caused by defendants' failure to abate the endangerment unless the court grants the requested relief, including declaratory and injunctive relief.

In August 2016, a group of over 200 plaintiffs filed a class action against West Morgan-East Lawrence Water and Sewer Authority (Water Authority), 3M, Dyneon, Daikin, BFI, and the City of Decatur in state court in Lawrence County, Alabama. Plaintiffs are residents of Lawrence, Morgan and other counties who are or have been customers of the Water Authority. They contend defendants have released PFCs that contaminate the Tennessee River and, in turn, their drinking water, causing damage to their health and properties. In January 2017, the court in the St. John case, discussed above, stayed this litigation pending resolution of the St. John case.

In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama filed a lawsuit in the Circuit Court of Etowah County Alabama against 3M and various carpet manufacturers. The complaint alleges that PFCs from the defendants' facilities contaminated the Coosa River as its raw water source for drinking water and seeks unstated damages for the installation and operation of a filtration system, expenses to monitor PFC levels, and lost profits and sales.

In January 2017, several hundred plaintiffs sued 3M, its subsidiary Dyneon, and Daikin America in Lawrence and Morgan Counties, Alabama. The plaintiffs are owners of property, residents, and holders of property interests who receive their water from the West Morgan-East Lawrence Water and Sewer Authority (Water Authority). They assert common law claims for negligence, nuisance, trespass, wantonness, and battery, and they seek injunctive relief and punitive damages. The plaintiffs contend that the defendants own and operate manufacturing and disposal facilities in Decatur that have released and continue to release PFOA, PFOS and related chemicals into the groundwater and surface water of their sites, resulting in discharge into the Tennessee River. The plaintiffs also contend that the defendants have discharged into Bakers Creek and the Decatur Utilities Dry Creek Wastewater Treatment Plant, which, in turn, discharges wastewater containing these chemicals into the Tennessee River. The plaintiffs contend that, as a result the alleged discharges, the water supplied by the Water Authority to the plaintiffs was, and is, contaminated with PFOA, PFOS, and related chemicals at a level dangerous to humans.

In May 2017, the Water Works and Sewer Board of the Town of Centre, Alabama filed a lawsuit in the Circuit Court of Cherokee County Alabama against 3M, DuPont, and various carpet and textile manufacturers. The complaint alleges that PFCs from the defendants' facilities contaminated the town's raw water source for drinking water and seeks unstated damages for the installation and operation of a filtration system, expenses to monitor PFC levels, lost profits and sales, and injunctive relief.

In November 2017, a purported class action was filed against 3M, its subsidiary Dyneon, Daikin America, and the West Morgan-East Lawrence Water and Sewer Authority (Water Authority) in the U.S. District Court for the Northern District of Alabama. The plaintiffs are residents of Lawrence and Morgan County, Alabama who receive their water from the Water Authority. They assert various common law claims, including negligence, nuisance, wantonness, and fraudulent concealment, and they seek injunctive relief, attorneys' fees, compensatory and punitive damages for their alleged personal injuries. The plaintiffs contend that the defendants own and operate manufacturing and disposal facilities in Decatur that have released and continue to release PFOA, PFOS and related chemicals into the groundwater and surface water of their sites, resulting in discharge into the Tennessee River. The plaintiffs also contend that the defendants have discharged into the Decatur Utilities Dry Creek Wastewater Treatment Plant, which, in turn, discharges wastewater containing these chemicals into the Tennessee River. The plaintiffs contend that, as a result the alleged discharges, the water supplied by the Water Authority to the plaintiffs was, and is, contaminated with PFOA, PFOS, and related chemicals at a level dangerous to humans.

Minnesota Environmental Litigation

In December2010, the State of Minnesota, by its Attorney General Lori Swanson, acting in its capacity as trustee of the natural resources of the State of Minnesota, filed a lawsuit in Hennepin County District Court against 3M to recover damages (including unspecified assessment costs and reasonable attorney's fees) for alleged injury to, destruction of, and loss of use of certain of the State's natural resources under the Minnesota Environmental Response and Liability Act (MERLA) and the Minnesota Water Pollution Control Act (MWPCA), as well as statutory nuisance and common law claims of trespass, nuisance, and negligence with respect to the presence of PFCs in the groundwater, surface water, fish or other aquatic life, and sediments (the "NRD Lawsuit"). The State also seeks declarations under MERLA that 3M is responsible for all damages the State may suffer in the future for injuries to natural resources from releases of PFCs into the environment, and under MWPCA that 3M is responsible for compensation for future loss or destruction of fish, aquatic life, and other damages. In September 2017, the State's damages expert submitted a report that contends the State incurred $5 billion in damages. In November 2017, the State of Minnesota filed a motion for leave to amend its complaint to seek punitive damages from 3M, and 3M filed a motion for summary judgment contending, among other things, that the State's claims are barred by the applicable statute of limitations. A hearing on those motions was held in December 2017. In December 2017, the court urged the parties to attempt to resolve the litigation before trial, and in January 2018, the court appointed a mediator to facilitate that process.If the parties are not able to resolve the matter, the trial is scheduled to begin in February 2018. An adverse ruling or judgment, settlement, or unfavorable development in the NRD Lawsuit could result in future charges that could have a material adverse effect on the Company's results of operations or cash flows in the period in which they are recorded and on the consolidated financial position of the Company.No liability has been recorded because the Company believes any such liability is not probable and estimable.

In November2011, the Metropolitan Council filed a motion to intervene and a complaint in the NRD Lawsuit seeking compensatory damages and other legal, declaratory and equitable relief, including reasonable attorneys' fees, for costs and fees that the Metropolitan Council alleges it will be required to assess at some time in the future if the MPCA imposes restrictions on Metropolitan Council's PFOS discharges to the Mississippi River, including the installation and maintenance of a water treatment system. The Metropolitan Council's intervention motion was based on several theories, including common law negligence, and statutory claims under MERLA for response costs, and under the Minnesota Environmental Rights Act (MERA) for declaratory and equitable relief against 3M for PFOS and other PFC pollution of the waters and sediments of the Mississippi River. 3M did not object to the motion to intervene. In January2012, 3M answered the Metropolitan Council's complaint and filed a counterclaim alleging that the Metropolitan Council discharges PFCs to the Mississippi River and discharges PFC-containing sludge and bio solids from one or more of its wastewater treatment plants onto agricultural lands and local area landfills. Accordingly, 3M's complaint against the Metropolitan Council asked that if the court finds that the State is entitled to any of the damages it sought, 3M be awarded contribution and apportionment from the Metropolitan Council, including attorneys' fees, under MERLA, and contribution from and liability for the Metropolitan Council's proportional share of damages awarded to the State under the MWPCA, as well as under statutory nuisance and common law theories of trespass, nuisance, and negligence. 3M also sought declaratory relief under MERA. In May 2017, the Metropolitan Council paid 3M approximately $1 million and agreed to dismiss its claims against 3M. As part of the settlement agreement, 3M agreed to dismiss its claims against the Metropolitan Council.

In April2012, 3M filed a motion to disqualify the State of Minnesota's counsel, Covington& Burling, LLP (Covington). In October2012, the court granted 3M's motion to disqualify Covington as counsel to the State, and the State and Covington appealed the court's disqualification to the Minnesota Court of Appeals. In July2013, the Minnesota Court of Appeals affirmed the district court's disqualification order. In October2013, the Minnesota Supreme Court granted both the State's and Covington's petition for review of the decision of the Minnesota Court of Appeals. In April2014, the Minnesota Supreme Court affirmed in part, reversed in part, and remanded the case to the district court for further proceedings. The district court took evidence on the disqualification issues at a hearing in October 2015. In February 2016, the district court ruled that Covington violated the professional ethics rule against representing a client (here the State of Minnesota) in the same or substantially related matter where that person's interests are materially adverse to the interests of a former client (3M). The district court, however, denied 3M's motion to disqualify Covington because it further found that 3M impliedly waived by delaying to assert the conflict. Other activity in the case, which had been stayed pending the outcome of the disqualification issue, has resumed. Trial of the NRD Lawsuit is scheduled to begin in February 2018. In a separate but related action, the Company filed suit in the Ramsey County District Court against Covington for breach of its fiduciary duties to the Company and for breach of contract arising out of Covington's representation of the State of Minnesota in the NRD Lawsuit. In September 2016, the court granted 3M's motion for leave to amend the complaint to plead punitive damages. In February 2017, Covington settled this lawsuit with a payment by Covington or its insurer to 3M that is not material to 3M's results of operations or financial condition.

In July 2016, the City of Lake Elmo filed a lawsuit in the U.S. District Court for the District of Minnesota against 3M alleging that the City suffered damages from drinking water supplies contaminated with PFCs, including costs to construct alternative sources of drinking water. Trial is scheduled to begin in September 2019.

Aqueous Film Forming Foam (AFFF) Litigation

3M manufactured and marketed Aqueous Film Forming Foam (AFFF) for use in firefighting at airports and military bases from approximately 1963 to 2000. As of December 31, 2017, twelve purported class actions have been filed against 3M and other defendants in various state and federal courts in Pennsylvania, Colorado, and New York alleging that certain PFCs used in AFFF contaminated the soil and groundwater where AFFF was used at current or former airports and air force military bases located in Colorado, Pennsylvania, and New York. An individual complaint also has been filed in federal court Pennsylvania. The plaintiffs in these cases generally allege that contaminated groundwater has caused various injuries, including loss of use and enjoyment of their properties, diminished property values, investigation costs, and remediation costs. Some cases seek funds for medical monitoring. Several companies have been sued along with 3M, including Ansul Co. (acquired by Tyco, Inc.), Angus Fire, Buckeye Fire Protection Co., Chemguard, National Foam, Inc., United Technologies Corp.

In November 2016, the Town of Barnstable, MA filed an individual action in the U.S. District Court for the District of Massachusetts seeking unstated compensatory and punitive damages and other relief against 3M and other suppliers of AFFF for alleged contamination of the aquifer supplying drinking water to the Hyannis water system. The town seeks to recover costs associated with the investigation, treatment, remediation, and monitoring of drinking water supplies allegedly contaminated with certain PFCs used in AFFF. In January 2017, the County of Barnstable, MA, filed an individual action in the U.S. District Court for the District of Massachusetts seeking unstated compensatory and punitive damages and other relief (including indemnification and contribution in connection with claims asserted against the County by the Town of Barnstable) against 3M and other suppliers of AFFF for alleged contamination of the aquifer supplying drinking water to the Hyannis water system.

In February 2017, husband and wife plaintiffs sued 3M and other defendants in federal court in Pennsylvania, alleging personal injury, loss of consortium and companionship, and associated damages.

In March 2017, plaintiff residents of Suffolk County, Long Island filed a class action complaint in state court in Suffolk County New York, naming the County and 3M and other alleged manufacturers of AFFF products. The action was removed to the Eastern District of New York.

In August 2017, three class action complaints were filed in state court in New York against 3M and other defendants including the Port Authority of New York and New Jersey. Plaintiffs allege PFC contamination of the local water supply linked to AFFF at Stewart Air National Guard Base and Stewart International Airport. The Port Authority is the leaseholder of the airport. All three cases have classes for diminution of property and medical monitoring. In September 2017, co-defendant Tyco removed all three cases to the U.S. District Court for the Southern District of New York.

In October 2017, a class action complaint was filed in Suffolk County, New York against 3M and others regarding PFCs allegedly released at the Suffolk County Firematics Training Facility. In November 2017, co-defendant National Foam removed the case to the U.S. District Court for the Eastern District of New York.

In December 2017, a complaint was filed by a group of 26 plaintiffs in Suffolk County, New York against 3M and others regarding PFCs allegedly released at Gabreski Airport.

In December 2017, a complaint was filed by the Suffolk County Water District in December 2017 in the U.S. District Court for the Eastern District of New York against 3M and others regarding PFCs allegedly released at Gabreski Airport and Suffolk County Firematics Training Facility.

Other Environmental Litigation

In September 2017, three complaints were filed in the U.S. District Court for the Northern District of New York against 3M, Saint-Gobain Performance Plastics Corp. ("Saint-Gobain"), Honeywell International Inc. ("Honeywell") and E.I. DuPont De Nemours and Company. Plaintiffs allege that 3M manufactured and sold PFOA that was used for manufacturing purposes at Saint-Gobain's and Honeywell's facilities located in the Village of Hoosick Falls and the Town of Hoosick. Plaintiffs claim that the drinking water around Hoosick Falls became contaminated with unsafe levels of PFOA due to the activities of the defendants, and allege that they suffered bodily injury due to the ingestion and inhalation of PFOA. Plaintiffs seek unstated compensatory, consequential, and punitive damages, as well as attorneys' fees and costs.

On December 1, 2017, eight plaintiffs filed a 12-count class action against 3M, Wolverine World Wide and Waste Management, Inc., alleging negligence, trespass, intentional and negligent infliction of emotional distress, battery, products liability, public and private nuisance, fraudulent concealment, and unjust enrichment. Each count was filed against each defendant. The action arises from Wolverine's allegedly improper disposal of materials and wastes related to their shoe manufacturing operations. Plaintiffs allege Wolverine used 3M Scotchgard in its manufacturing process and that chemicals from 3M's product have contaminated the environment after being disposed of near drinking water sources.

For environmental litigation matters described in this section for which a liability, if any, has been recorded, the Company believes the amount recorded, as well as the possible loss or range of loss in excess of the established accrual is not material to the Company's consolidated results of operations or financial condition. For those matters for which a liability has not been recorded, the Company believes any such liability is not probable and estimable and the Company is not able to estimate a possible loss or range of loss at this time.

Environmental Liabilities and Insurance Receivables

As of December31, 2017, the Company had recorded liabilities of $28 million for estimated "environmental remediation" costs based upon an evaluation of currently available facts with respect to each individual site and also recorded related insurance receivables of $8 million. The Company records liabilities for remediation costs on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company's commitment to a plan of action. Liabilities for estimated costs of environmental remediation, depending on the site, are based primarily upon internal or third-party environmental studies, and estimates as to the number, participation level and financial viability of any other potentially responsible parties, the extent of the contamination and the nature of required remedial actions. The Company adjusts recorded liabilities as further information develops or circumstances change. The Company expects that it will pay the amounts recorded over the periods of remediation for the applicable sites, currently ranging up to 20 years.

As of December31, 2017, the Company had recorded liabilities of $25 million for "other environmental liabilities" based upon an evaluation of currently available facts to implement the Settlement Agreement and Consent Order with the MPCA, the remedial action agreement with ADEM, and to address trace amounts of perfluorinated compounds in drinking water sources in the City of Oakdale, Minnesota, as well as presence in the soil and groundwater at the Company's manufacturing facilities in Decatur, Alabama, and Cottage Grove, Minnesota, and at two former disposal sites in Washington County, Minnesota (Oakdale and Woodbury). The Company expects that most of the spending will occur over the next four years. During the first quarter of 2017, the Company collected from its insurer the outstanding receivable of $15 million related to "other environmental liabilities."

It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods. Developments may occur that could affect the Company's current assessment, including, but not limited to: (i)changes in the information available regarding the environmental impact of the Company's operations and products; (ii)changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages; (iii)new and evolving analytical and remediation techniques; (iv)success in allocating liability to other potentially responsible parties; and (v)the financial viability of other potentially responsible parties and third-party indemnitors. For sites included in both "environmental remediation liabilities" and "other environmental liabilities," at which remediation activity is largely complete and remaining activity relates primarily to operation and maintenance of the remedy, including required post-remediation monitoring, the Company believes the exposure to loss in excess of the amount accrued would not be material to the Company's consolidated results of operations or financial condition. However, for locations at which remediation activity is largely ongoing, the Company cannot estimate a possible loss or range of loss in excess of the associated established accruals for the reasons described above.

Other Matters

Department of Labor Investigation

The U.S. Department of Labor (DOL) notified 3M in April 2015 that it had commenced an investigation of 3M's pension plan pursuant to the federal Employee Retirement Income Security Act of 1974, as amended (ERISA). The DOL has stated its investigation relates to certain private equity investments, plan expenses, securities lending, and distributions of plan benefits.In response to certain DOL requests, 3M produced documents and made employees available for interviews.In December 2016, the DOL issued certain subpoenas to 3M and 3M Investment Management Corp. relating to this investigation. 3M has produced additional responsive documents and is cooperating with the DOL in its investigation. 3M anticipates that the DOL will conclude its investigation in the first half of 2018.

Product Liability Litigation

One customer obtained an order in the French courts against 3M Purification SAS (a French subsidiary) in October2011 appointing an expert to determine the amount of commercial loss and property damage allegedly caused by allegedly defective 3M filters used in the customer's manufacturing process. An Austriansubsidiary of this same customer also filed a claim against 3M Austria GmbH (an Austrian subsidiary)and 3M Purification SASin the Austrian courts inSeptember2012 seeking damages for the same issue. The Company reached an agreement in principle to settle those two cases and finalized the settlement during the second quarter of 2017. The amounts agreed to in each of these settlements were not material to the Company's consolidated results of operations or financial condition.

As of December 31, 2017, the Company is a named defendant in lawsuits involving approximately 4,270 plaintiffs (compared to approximately 1,260 plaintiffs at December 31, 2016), most of which are pending in federal or state court in Minnesota, in which the plaintiffs claim they underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger patient warming system. The complaints seek damages and other relief based on theories of strict liability, negligence, breach of express and implied warranties, failure to warn, design and manufacturing defect, fraudulent and/or negligent misrepresentation/concealment, unjust enrichment, and violations of various state consumer fraud, deceptive or unlawful trade practices and/or false advertising acts. One case, from the U.S. District Court for the Western District of Tennessee is a putative nationwide class action. The U.S. Judicial Panel on Multidistrict Litigation (MDL) granted the plaintiffs' motion to transfer and consolidate all cases pending in federal courts to the U.S. District Court for the District of Minnesota to be managed in a multi-district proceeding during the pre-trial phase of the litigation. The federal court has set a trial-ready date in May 2018 in one of the two federal court bellwether cases. At a joint hearing before the U.S. District Court and the Minnesota State court, on the parties' motion to exclude each other's experts, and 3M's motion for summary judgment with respect to general causation, the federal court did not exclude the plaintiffs' experts and denied 3M's motion for summary judgment on general causation. In January 2018, the state court, in hearing the same arguments, excluded plaintiffs' experts and granted 3M's motion for summary judgment on general causation, dismissing all 61 cases pending before the state court in Minnesota.

In June 2016, the Company was served with a putative class action filed in the Ontario Superior Court of Justice for all Canadian residents who underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger patient warming system. The representative plaintiff seeks relief (including punitive damages) under Canadian law based on theories similar to those asserted in the MDL. The Bair Hugger product line was acquired by 3M as part of the 2010 acquisition of Arizant, Inc., a leading manufacturer of patient warming solutions designed to prevent hypothermia and maintain normal body temperature in surgical settings. No liability has been recorded for this matter because the Company believes that any such liability is not probable and estimable at this time.

In September 2011, 3M Oral Care launched Lava Ultimate CAD/CAM dental restorative material. The product was originally indicated for inlay, onlay, veneer, and crown applications. In June 2015, 3M Oral Care voluntarily removed crown applications from the product's instructions for use, following reports from dentists of patients' crowns debonding, requiring additional treatment. The product remains on the market for other applications. 3M communicated with the U.S. Food and Drug Administration, as well as regulators outside the United States. 3M also informed customers and distributors of its action, offered to accept return of unused materials and provide refunds. As of December 31, 2017, there is one lawsuit pending in the U.S. District Court for the District of Minnesota that names 29 plaintiffs and seeks certification of a class of dentists in the United States and its territories, and alternatively seeks subclasses in 13 states. The complaint alleges 3M marketed and sold defective Lava Ultimate material used for dental crowns to dentists and, under various theories, seek monetary damages (replacement costs and business reputation loss), punitive damages, disgorgement of profits, injunction from marketing and selling Lava Ultimate for use in dental crowns, statutory penalties, and attorneys' fees and costs.

For product liability litigation matters described in this section for which a liability has been recorded, the Company believes the amount recorded is not material to the Company's consolidated results of operations or financial condition. In addition, the Company is not able to estimate a possible loss or range of loss in excess of the established accruals at this time.

NOTE 16. Stock-Based Compensation

The 3M 2016 Long-Term Incentive Plan (LTIP) provides for the issuance or delivery of up to 123,965,000 shares of 3M common stock pursuant to awards granted under the plan. Awards may be issued in the form of incentive stock options, nonqualified stock options, progressive stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards, and performance units and performance shares. As of December 31, 2017, the remaining total shares available for grant under the LTIP Program are 30,125,144, and there were approximately 7,500 participants with outstanding options, restricted stock, or restricted stock units.

The Company's annual stock option and restricted stock unit grant is made in Februaryto provide a strong and immediate link between the performance of individuals during the preceding year and the size of their annual stock compensation grants. The grant to eligible employees uses the closing stock price on the grant date. Accounting rulesrequire recognition of expense under a non-substantive vesting period approach, requiring compensation expense recognition when an employee is eligible to retire. Employees are considered eligible to retire at age 55 and after having completed ten years of service. This retiree-eligible population represents 35 percent of the 2017 annual stock-based compensation award expense dollars; therefore, higher stock-based compensation expense is recognized in the first quarter.

In addition to the annual grants, the Company makes other minor grants of stock options, restricted stock units and other stock-based grants. The Company issues cash settled restricted stock units and stock appreciation rights in certain countries. These grants do not result in the issuance of common stock and are considered immaterial for disclosure purposes by the Company.

Beginning in 2016, as a result of the Company's application of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, certain excess tax benefits at the time of exercise (for an option) or upon vesting (for restricted stock units) are recognized as income tax benefits in the statement of income. These amounts totaled $228 million and $184 million for 2017 and 2016, respectively, and are reflected in the "income tax benefits" line within the stock-based compensation table below.

Amounts recognized in the financial statements with respect to stock-based compensation programs, which include stock options, restricted stock, restricted stock units, performance shares, and the General Employees' Stock Purchase Plan (GESPP), are provided in the following table. Capitalized stock-based compensation amounts were not material.

Stock-Based Compensation Expense


	YearsendedDecember31
(Millions)	2017		2016		2015
Cost of sales	$	49	$	47	$	46
Selling, general and administrative expenses		229		206		185
Research, development and related expenses		46		45		45
Stock-based compensation expenses	$	324	$	298	$	276
Income tax benefits	$	(327)	$	(272)	$	(87)
Stock-based compensation expenses (benefits), net of tax	$	(3)	$	26	$	189

Stock Option Program

The following table summarizes stock option activity for the years ended December31:


	2017			2016			2015
		Weighted			Weighted			Weighted
	Numberof	Average		Numberof	Average		Numberof	Average
	Options	ExercisePrice		Options	ExercisePrice		Options	ExercisePrice
Under option -
January1	36,196,232	$	112.07	38,552,445	$	102.01	39,235,557	$	90.38
Granted:
Annual	5,409,628		175.93	5,591,727		147.99	5,529,544		165.91
Exercised	(6,474,117)		90.37	(7,716,141)		86.76	(5,978,382)		83.74
Forfeited	(166,579)		162.36	(231,799)		148.43	(234,274)		128.99
December31	34,965,164	$	125.73	36,196,232	$	112.07	38,552,445	$	102.01
Options exercisable
December31	24,281,464	$	108.50	25,240,759	$	95.65	27,262,062	$	85.97

Stock options vest over a period from one to three years with the expiration date at 10 years from date of grant. As of December31, 2017, there was $67 million of compensation expense that has yet to be recognized related to non-vested stock option based awards. This expense is expected to be recognized over the remaining weighted-average vesting period of 20 months. For options outstanding at December31, 2017, the weighted-average remaining contractual life was 70 months and the aggregate intrinsic value was $3.834 billion. For options exercisable at December31, 2017, the weighted-average remaining contractual life was 56 months and the aggregate intrinsic value was $3.080 billion.

The total intrinsic values of stock options exercised during 2017, 2016 and 2015 was $703 million, $608 million and $465 million, respectively. Cash received from options exercised during 2017, 2016 and 2015 was $585 million, $665 million and $501 million, respectively. The Company's actual tax benefits realized for the tax deductions related to the exercise of employee stock options for 2017, 2016 and 2015 was $238 million, $224 million and $172 million, respectively.

The Company does not have a specific policy to repurchase common shares to mitigate the dilutive impact of options; however, the Company has historically made adequate discretionary purchases, based on cash availability, market trends, and other factors, to satisfy stock option exercise activity.

For annual options, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model and the assumptions that follow.

Stock Option Assumptions


	Annual
	2017			2016			2015
Exercise price	$	175.76		$	147.87		$	165.94
Risk-free interest rate		2.1	%		1.5	%		1.5	%
Dividend yield		2.5	%		2.5	%		2.5	%
Expected volatility		17.3	%		20.8	%		20.1	%
Expected life (months)		78			77			76
Black-Scholes fair value	$	23.51		$	22.47		$	23.98

Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2017 annual grant date, the Company estimated the expected volatility based upon the average of the most recent one year volatility, the median of the term of the expected life rolling volatility, the median of the most recent term of the expected life volatility of 3M stock, and the implied volatility on the grant date. The expected term assumption is based on the weighted average of historical grants.

Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity for the years ended December31:


	2017			2016			2015
		Weighted			Weighted			Weighted
		Average			Average			Average
	Numberof	GrantDate		Numberof	GrantDate		Numberof	GrantDate
	Awards	FairValue		Awards	FairValue		Awards	FairValue
Nonvested balance -
As of January1	2,185,046	$	145.64	2,441,088	$	127.47	2,817,786	$	104.41
Granted
Annual	604,256		176.10	749,068		148.20	671,204		165.86
Other	20,692		233.77	8,115		169.00	26,886		156.94
Vested	(769,598)		127.21	(960,345)		101.64	(1,010,612)		89.99
Forfeited	(46,590)		158.25	(52,880)		145.95	(64,176)		118.99
As of December31	1,993,806	$	162.60	2,185,046	$	145.64	2,441,088	$	127.47

As of December31, 2017, there was $78 million of compensation expense that has yet to be recognized related to non-vested restricted stock and restricted stock units. This expense is expected to be recognized over the remaining weighted-average vesting period of 22 months. The total fair value of restricted stock and restricted stock units that vested during 2017, 2016 and 2015 was $136 million, $149 million and $166 million, respectively. The Company's actual tax benefits realized for the tax deductions related to the vesting of restricted stock and restricted stock units for 2017, 2016 and 2015 was $45 million, $56 million and $62 million, respectively.

Restricted stock units granted generally vest three years following the grant date assuming continued employment. Dividend equivalents equal to the dividends payable on the same number of shares of 3M common stock accrue on these restricted stock units during the vesting period, although no dividend equivalents are paid on any of these restricted stock units that are forfeited prior to the vesting date. Dividends are paid out in cash at the vest date on restricted stock units, except for performance shares which do not earn dividends. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average restricted stock unit shares outstanding are included in the computation of diluted earnings per share.

Performance Shares

Instead of restricted stock units, the Company makes annual grants of performance shares to members of its executive management. The 2017 performance criteria for these performance shares (organic volume growth, return on invested capital, free cash flow conversion, and earnings per share growth) were selected because the Company believes that they are important drivers of long-term stockholder value. The number of shares of 3M common stock that could actually be delivered at the end of the three-year performance period may be anywhere from 0% to 200% of each performance share granted, depending on the performance of the Company during such performance period. Non-substantive vesting requires that expense for the performance shares be recognized over one or three years depending on when each individual became a 3M executive. Prior to the 2016 performance share grant, performance shares did not accrue dividends during the performance period. Therefore, the grant date fair value was determined by reducing the closing stock price on the date of grant by the net present value of dividends during the performance period. The 2017 and 2016 performance share grants accrue dividends, therefore the grant date fair value is equal to the closing stock price on the date of grant. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average performance shares whose performance period is complete are included in computation of diluted earnings per share.

The following table summarizes performance share activity for the years ended December31:


	2017			2016			2015
		Weighted			Weighted			Weighted
		Average			Average			Average
	Numberof	GrantDate		Numberof	GrantDate		Numberof	GrantDate
	Awards	FairValue		Awards	FairValue		Awards	FairValue
Undistributed balance -
As of January1	656,278	$	142.98	871,192	$	120.89	1,099,752	$	102.65
Granted	201,261		191.28	219,431		160.17	227,798		158.88
Distributed	(313,942)		124.88	(367,428)		99.06	(323,938)		83.08
Performance change	154,774		173.91	(37,534)		155.98	(106,760)		127.70
Forfeited	(12,498)		171.36	(29,383)		149.08	(25,660)		125.33
As of December31	685,873	$	171.90	656,278	$	142.98	871,192	$	120.89

As of December31, 2017, there was $25 million of compensation expense that has yet to be recognized related to performance shares. This expense is expected to be recognized over the remaining weighted-average earnings period of 11 months. The total fair value of performance shares that were distributed were $55 million for 2017 and $54 million for both 2016 and 2015. The Company's actual tax benefits realized for the tax deductions related to the distribution of performance shares was $15 million per year for 2017, 2016 and 2015.

General Employees' Stock Purchase Plan (GESPP):

As of December31, 2017, shareholders have approved 60 million shares for issuance under the Company's GESPP. Substantially all employees are eligible to participate in the plan. Participants are granted options at 85% of market value at the date of grant. There are no GESPP shares under option at the beginning or end of each year because options are granted on the first business day and exercised on the last business day of the same month.

General Employees' Stock Purchase Plan


	2017			2016			2015
		Weighted			Weighted			Weighted
		Average			Average			Average
	Shares	ExercisePrice		Shares	ExercisePrice		Shares	ExercisePrice
Options granted	877,705	$	170.42	987,478	$	140.06	1,007,669	$	133.52
Options exercised	(877,705)		170.42	(987,478)		140.06	(1,007,669)		133.52
Shares available for grant - December31	26,239,152			27,116,857			28,104,335

The weighted-average fair value per option granted during 2017, 2016 and 2015 was $30.07, $24.72 and $23.56, respectively. The fair value of GESPP options was based on the 15% purchase price discount. The Company recognized compensation expense for GESSP options of $26 million in 2017, $24 million in 2016 and $24 million in 2015.

NOTE 17. Business Segments

3M's businesses are organized, managed and internally grouped into segments based on differences in markets, products, technologies and services. 3M manages its operations in five business segments: Industrial; Safety and Graphics; Health Care; Electronics and Energy; and Consumer. 3M's five business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income information shown. The difference between operating income and pre-tax income relates to interest income and interest expense, which are not allocated to business segments.

Effective in the first quarter of 2017, as part of 3M's continuing effort to improve the alignment of its businesses around markets and customers the Company made the following changes:

1. Integrated the former Renewable Energy Division into existing divisions;

2. Combined two divisions to form the Automotive and Aerospace Solutions Division; and

3. Consolidated U.S. customer account activity - impacting dual credit reporting

Integration of former Renewable Energy Division

The (i) solar and wind and (ii) energy product lines (along with certain technology previously included in Corporate and Unallocated) of the former Renewable Energy Division (RED) were integrated into the existing Electrical Markets Division and Electronics Materials Solutions Division, respectively, within the Electronics and Energy business segment. In addition, the former RED's window film product lines were moved into the Commercial Solutions Division within the Safety and Graphics business segment. This change resulted in a decrease in previously reported net sales and operating income for total year 2016 of $203 million and $38 million, respectively, in the Electronics and Energy segment. These decreases were offset by a $207 million and $29 million increase in previously reported total year 2016 net sales and operating income, respectively, in the Safety and Graphics business segment and a $4 million decrease and $9 million increase in previously reported net sales and operating income, respectively, in Corporate and Unallocated.

Creation of Automotive and Aerospace Solutions Division

The former Automotive Division and Aerospace and Commercial Transportation Division (both within the Industrial business segment) were combined to create the Automotive and Aerospace Solutions Division. Because this realignment was within the Industrial business segment, it had no impact on business segment reporting.

Consolidation of U.S. customer account activity - impacting dual credit reporting

The Company consolidated its customer account activity in the U.S. into more centralized sales districts to better serve customers. As discussed further below, 3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. This dual credit is based on which business segment provides customer account activity ("sales district") with respect to a particular product sold in the U.S. Previously, a customer in the U.S. may have been aligned to several sales districts associated with multiple divisions or segments based on the individual products the customer purchased across 3M's portfolio. The alignment of U.S. customer accounts to fewer, more focused sales districts therefore changed the attribution of dual credit across 3M's business segments. As a result, previously reported aggregate business segment net sales and operating income for total year 2016 increased $163 million and $36 million, respectively, offset by similar increases in the elimination of dual credit net sales and operating income amounts.

The financial information presented herein reflects the impact of the preceding business segment reporting changes for all periods presented.

BusinessSegmentProducts


BusinessSegment		MajorProducts
Industrial		Tapes, coated, nonwoven and bonded abrasives, adhesives, advanced ceramics, sealants, specialty materials, filtration products, closure systems for personal hygiene products, acoustic systems products, automotive components, abrasion-resistant films, structural adhesives and paint finishing and detailing products

Safety and Graphics		Personal protection products, transportation safety products, commercial graphics systems, commercial cleaning and protection products, floor matting, roofing granules for asphalt shingles, and fall protection products

Health Care		Medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental and orthodontic products, health information systems and food safety products

Electronics and Energy		Optical films solutions for electronic displays, packaging and interconnection devices, insulating and splicing solutions for the electronics, telecommunications and electrical industries, touch screens and touch monitors, renewable energy component solutions, and infrastructure protection products

Consumer		Sponges, scouring pads, high-performance cloths, consumer and office tapes, repositionable notes, indexing systems, home improvement products, home care products, protective material products, and consumer and office tapes and adhesives

BusinessSegmentInformation


	NetSales						OperatingIncome
(Millions)	2017		2016		2015		2017		2016		2015
Industrial	$	10,911	$	10,399	$	10,388	$	2,289	$	2,395	$	2,277
Safety and Graphics		6,148		5,881		5,736		2,067		1,423		1,332
Health Care		5,813		5,566		5,449		1,781		1,763		1,730
Electronics and Energy		5,159		4,643		5,069		1,254		1,041		1,083
Consumer		4,589		4,484		4,429		993		1,065		1,048
Corporate and Unallocated		1		7		(2)		(352)		(272)		(349)
Elimination of Dual Credit		(964)		(871)		(795)		(212)		(192)		(175)
Total Company	$	31,657	$	30,109	$	30,274	$	7,820	$	7,223	$	6,946


	Assets						Depreciation&Amortization						CapitalExpenditures
(Millions)	2017		2016		2015		2017		2016		2015		2017		2016		2015
Industrial	$	9,895	$	9,140	$	9,205	$	432	$	407	$	374	$	435	$	360	$	317
Safety and Graphics		9,874		7,626		7,709		275		277		258		184		228		207
Health Care		4,757		4,293		4,391		246		175		179		83		136		168
Electronics and Energy		4,395		4,418		4,645		175		229		279		165		200		203
Consumer		2,706		2,497		2,386		112		114		108		109		109		124
Corporate and Unallocated		6,360		4,932		4,547		304		272		237		397		387		442
Total Company	$	37,987	$	32,906	$	32,883	$	1,544	$	1,474	$	1,435	$	1,373	$	1,420	$	1,461

Corporate and unallocated operating income includes a variety of miscellaneous items, such as corporate investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension, stock-based compensation) that the Company may choose not to allocate directly to its business segments. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. Management evaluates each of its five business segments based on net sales and operating income performance, including dual credit U.S. reporting to further incentivize U.S. sales growth. As a result, 3M reflects additional ("dual") credit to another business segment when the customer account activity ("sales district") with respect to the particular product sold to the external customer in the U.S. is provided by a different business segment. This additional dual credit is largely reflected at the division level. For example, certain respirators are primarily sold by the Personal Safety Division within the Safety and Graphics business segment; however, a sales district within the Industrial business segment provides the contact for sales of the product to particular customers in the U.S. market. In this example, the non-primary selling segment (Industrial) would also receive credit for the associated net sales initiated though its sales district and the related approximate operating income. The assigned operating income related to dual credit activity may differ from operating income that would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is reflected as a reconciling item entitled "Elimination of Dual Credit," such that sales and operating income for the U.S. in total are unchanged.

Certain sales and operating income results for electronic bonding product lines are equally divided between the Electronics and Energy business segment and the Industrial business segment.

NOTE 18. Geographic Areas

Geographic area information is used by the Company as a secondary performance measure to manage its businesses. Export sales and certain income and expense items are generally reported within the geographic area where the final sales to 3M customers are made.


							Property,Plantand
	NetSales						Equipment-net
(Millions)	2017		2016		2015		2017		2016
United States	$	12,372	$	12,188	$	12,049	$	4,891	$	4,914
Asia Pacific		9,809		8,847		9,041		1,672		1,573
Europe, Middle East and Africa		6,456		6,163		6,228		1,798		1,512
Latin America and Canada		3,033		2,901		2,982		505		517
Other Unallocated		(13)		10		(26)		-		-
Total Company	$	31,657	$	30,109	$	30,274	$	8,866	$	8,516

Asia Pacific included China/Hong Kong net sales to customers of $3.255 billion, $2.799 billion and $2.945 billion in 2017, 2016, and 2015, respectively. China/Hong Kong net property, plant and equipment (PP&E) was $541 million and $520 million at December 31, 2017 and 2016, respectively.

NOTE 19. Quarterly Data (Unaudited)


(Millions,exceptper-shareamounts)	First		Second		Third		Fourth		Year
2017	Quarter		Quarter		Quarter		Quarter		2017
Net sales	$	7,685	$	7,810	$	8,172	$	7,990	$	31,657
Cost of sales		3,869		4,007		4,045		4,080		16,001
Net income including noncontrolling interest		1,326		1,585		1,433		525		4,869
Net income attributable to 3M		1,323		1,583		1,429		523		4,858
Earnings per share attributable to 3M common shareholders - basic		2.21		2.65		2.39		0.88		8.13
Earnings per share attributable to 3M common shareholders - diluted		2.16		2.58		2.33		0.85		7.93


(Millions,exceptper-shareamounts)	First		Second		Third		Fourth		Year
2016	Quarter		Quarter		Quarter		Quarter		2016
Net sales	$	7,409	$	7,662	$	7,709	$	7,329	$	30,109
Cost of sales		3,678		3,799		3,847		3,716		15,040
Net income including noncontrolling interest		1,278		1,293		1,331		1,156		5,058
Net income attributable to 3M		1,275		1,291		1,329		1,155		5,050
Earnings per share attributable to 3M common shareholders - basic		2.10		2.13		2.20		1.93		8.35
Earnings per share attributable to 3M common shareholders - diluted		2.05		2.08		2.15		1.88		8.16

Gross profit is calculated as net sales minus cost of sales. Fourth quarter and year 2017 were impacted by the enactment of the Tax Cuts and Jobs Act in December 2017, which reduced net income by $762 million and reduced diluted earnings per share by $1.25 in the fourth quarter and $1.24 for year 2017. Refer to Note 9 for additional details.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

a. The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's "disclosure controls and procedures" (as defined in the Exchange Act Rule13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective.

b. The Company's management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in the Exchange Act Rule13a-15(f). Management conducted an assessment of the Company's internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013). Based on the assessment, management concluded that, as of December31, 2017, the Company's internal control over financial reporting is effective. Management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2017 excluded Scott Safety, which was acquired by the Company in October 2017 in a purchase business combination. Scott Safety is a wholly-owned subsidiary whose total assets and total net sales represented less than 1 percent of the Company's consolidated financial statement amounts as of and for the year ended December 31, 2017. Companies are allowed to exclude acquisitions from their assessment of internal control over financial reporting during the first year of acquisition while integrating the acquired company under guidelines established by the Securities and Exchange Commission. The Company's internal control over financial reporting as of December31, 2017 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein, which expresses an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December31, 2017.

c. There was no change in the Company's internal control over financial reporting that occurred during the Company's most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

The Company is implementing an enterprise resource planning ("ERP") system on a worldwide basis, which is expected to improve the efficiency of certain financial and related transaction processes. The gradual implementation is expected to occur in phases over the next several years. The implementation of a worldwide ERP system will likely affect the processes that constitute our internal control over financial reporting and will require testing for effectiveness.

The Company completed implementation with respect to elements of certain processes/sub-processes in limited subsidiaries/locations and will continue to roll-out the ERP system over the next several years. As with any new information technology application we implement, this application, along with the internal controls over financial reporting included in this process, was appropriately considered within the testing for effectiveness with respect to the implementation in these instances. We concluded, as part of our evaluation described in the above paragraphs, that the implementation of ERP in these circumstances has not materially affected our internal control over financial reporting.

Item 9B. Other Information.

None.

PARTIII

Documents Incorporated by Reference

In response to PartIII,Items 10, 11, 12, 13 and 14, parts of the Company's definitive proxy statement (to be filed pursuant to Regulation 14A within 120 days after Registrant's fiscal year-end of December31, 2017) for its annual meeting to be held on May8, 2018, are incorporated by reference in this Form10-K.

Item 10. Directors, Executive Officers and Corporate Governance.

The information relating to directors and nominees of 3M is set forth under the caption "Proposal No.1" in 3M's proxy statement for its annual meeting of stockholders to be held on May8, 2018 ("3M Proxy Statement") and is incorporated by reference herein. Information about executive officers is included in Item 1 of this Annual Report on Form10-K. The information required by Items 405, 407(c)(3), (d)(4)and (d)(5)of Regulation S-K is contained under the captions "Section16(a)Beneficial Ownership Reporting Compliance," "Corporate Governance At 3M - Board Membership Criteria - Identification, Evaluation, and Selection of Nominees,," "-Nominees Proposed By Stockholders," "-Stockholder Nominations", "-Proxy Access Nominations" and "-Role of the Nominating and Governance Committee" and "Corporate Governance At 3M -- Board Committees - Audit Committee" of the 3M Proxy Statement and such information is incorporated by reference herein.

Code of Ethics. All of our employees, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer and Controller, are required to abide by 3M's long-standing business conduct policies to ensure that our business is conducted in a consistently legal and ethical manner. 3M has posted the text of such code of ethics on its website (http://www.3M.com/businessconduct). At the same website, any future amendments to the code of ethics will also be posted. Any person may request a copy of the code of ethics, at no cost, by writing to us at the following address:

3M Company

3M Center, Building 220-11W-09

St. Paul, MN 55144-1000

Attention: Vice President, Compliance and Business Conduct

Item 11. Executive Compensation.

The information required by Item 402 of Regulation S-K is contained under the captions "Executive Compensation" (excluding the information under the caption "- Compensation Committee Report") and "Director Compensation and Stock Ownership Guidelines" of the 3M Proxy Statement. Such information is incorporated by reference.

The information required by Items 407(e)(4)and (e)(5)of Regulation S-K is contained in the "Executive Compensation" section under the captions "Compensation Committee Report" and "Compensation Committee Interlocks and Insider Participation" of the 3M Proxy Statement. Such information (other than the Compensation Committee Report, which shall not be deemed to be "filed") is incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information relating to security ownership of certain beneficial owners and management is set forth under the designation "Security Ownership of Management" and "Security Ownership of Certain Beneficial Owners" in the 3M Proxy Statement and such information is incorporated by reference herein.

Equity compensation plans information as of December31, 2017 follows:

Equity Compensation Plans Information (1)


	A	B		C
	Numberof	Weighted-		Numberofsecurities
	securitiestobe	averageexercise		remainingavailablefor
	issuedupon	priceof		futureissuanceunder
	exerciseof	outstanding		equitycompensation
	outstanding	options,		plans(excluding
	options,warrants	warrantsand		securitiesreflectedin
PlanCategory	andrights	rights		column(A))

Equity compensation plans approved by security holders
Stock options	34,965,164	$	125.73	-
Restricted stock units	1,993,806			-
Performance shares	685,873			-
Non-employee director deferred stock units	240,101			-
Total	37,884,944			30,125,144
Employee stock purchase plan	-			26,239,152
Subtotal	37,884,944			56,364,296
Total	37,884,944			56,364,296

(1) In column B, the weighted-average exercise price is only applicable to stock options. In column C, the number of securities remaining available for future issuance for stock options, restricted stock units, and stock awards for non-employee directors is approved in total and not individually with respect to these items.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

With respect to certain relationships and related transactions as set forth in Item 404 of Regulation S-K, no matters require disclosure with respect to transactions with related persons. The information required by Item 404(b)and Item 407(a)of Regulation S-K is contained under the section "Corporate Governance at 3M" under the captions "Director Independence" and "Related Person Transaction Policy and Procedures" of the 3M Proxy Statement and such information is incorporated by reference herein.

Item 14. Principal Accounting Fees and Services.

The information relating to principal accounting fees and services is set forth in the section entitled "Audit Committee Matters" under the designation "Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Accounting Firm" and "Fees of the Independent Accounting Firm" in the 3M Proxy Statement and such information is incorporated by reference herein.

PARTIV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1)Financial Statements. The consolidated financial statements filed as part of this report are listed in the index to financial statements at the beginning of this document.

(a)(2)Financial Statement Schedules. Financial statement schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the Consolidated Financial Statements or the notes thereto. The financial statements of unconsolidated subsidiaries are omitted because, considered in the aggregate, they would not constitute a significant subsidiary.

(a)(3)Exhibits. The exhibits are either filed with this report or incorporated by reference into this report. Exhibitnumbers 10.1 through 10.26 are management contracts or compensatory plans or arrangements. See (b)Exhibits, which follow.

(b)Exhibits.

(3) Articles of Incorporation and bylaws


(3.1)	Certificate of incorporation, as amended as of December4, 2017, is incorporated by reference from our Form8-K dated December7, 2017.
(3.2)	Amended and Restated Bylaws, as adopted as of November 10, 2015, are incorporated by reference from our Form8-K dated November 10, 2015.

(4) Instruments defining the rights of security holders, including indentures:


(4.1)	Indenture, dated as of November17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M's senior debt securities, is incorporated by reference from our Form8-K dated December7, 2000.
(4.2)	First Supplemental Indenture, dated as of July29, 2011, to Indenture dated as of November17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M's senior debt securities, is incorporated by reference from our Form10-Q for the quarter ended June30, 2011.

(10) Material contracts and management compensation plans and arrangements:


(10.1)	3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.2)	Form of Stock Option Award Agreement under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.3)	Form of Stock Appreciation Right Award Agreement under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.4)	Form of Restricted Stock Unit Award Agreement under the 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.5)	Form of Performance Share Award Agreement for performance share awards granted under the 3M Company 2016 Long-Term Incentive Plan prior to February 5, 2018, is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.6)	Form of Performance Share Award Agreement for performance share awards granted under the 3M Company 2016 Long-Term Incentive Plan on or after February 5, 2018 is filed herewith.
(10.7)	3M 2008 Long-Term Incentive Plan (including amendments through February 2, 2016) is incorporated by reference from our Form 10-K for the year ended December 31, 2015.
(10.8)	Form of Agreement for Stock Option Grants to Executive Officers under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 13, 2008.
(10.9)	Form of Stock Option Agreement for options granted to Executive Officers under the 3M 2008 Long-Term Incentive Plan, commencing February 9, 2010, is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.10)	Form of Restricted Stock Unit Agreement for restricted stock units granted to Executive Officers under the 3M Long-Term Incentive Plan, effective February 9, 2010, is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.11)	Form of Online Grant Agreement for performance share awards granted under the 3M 2008 Long-Term Incentive Plan with a performance period ending on or after December 31, 2017 is filed herewith.
(10.12)	Form of Stock Option Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.13)	Form of Restricted Stock Unit Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.14)	Amended and Restated 3M VIP Excess Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.15)	Amended and Restated 3M VIP (Voluntary Investment Plan) Plus Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.16)	3M Deferred Compensation Excess Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.17)	3M Performance Awards Deferred Compensation Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.18)	3M Executive Annual Incentive Plan is incorporated by reference from our Form 8-K dated May 14, 2007.
(10.19)	3M Compensation Plan for Non-Employee Directors, as amended, through November 8, 2004, is incorporated by reference from our Form 10-K for the year ended December 31, 2004.
(10.20)	Amendment of 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.21)	Amendment of 3M Compensation Plan for Non-Employee Directors as of August 12, 2013, is incorporated by reference from our Form 10-Q for the quarter ended September 30, 2013.
(10.22)	3M Executive Life Insurance Plan, as amended, is filed herewith.
(10.23)	Policy on Reimbursement of Incentive Payments (effective May 11, 2010) is incorporated by reference from our Form 10-Q for the quarter ended June 30, 2010.
(10.24)	Amended and Restated 3M Nonqualified Pension Plan I is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.25)	Amended and Restated 3M Nonqualified Pension Plan II is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
(10.26)	Amended and Restated 3M Nonqualified Pension Plan III is incorporated by reference from our Form 10-K for the year ended December 31, 2016.
3	Policy on Reimbursement of Incentive Compensation (effective May 11, 2010) is incorporated by reference from our Form 10-Q dated August 4, 2010.
(10.27)	Amended and restated five-year credit agreement as of March 9, 2016, is incorporated by reference from our Form 8-K dated March 11, 2016.
(10.28)	Registration Rights Agreement as of August 4, 2009, between 3M Company and State Street Bank and Trust Company as Independent Fiduciary of the 3M Employee Retirement Income Plan, is incorporated by reference from our Form 8-K dated August 5, 2009.

Filed herewith, in addition to items, if any, specifically identified above:


(12)	Calculation of ratio of earnings to fixed charges.
(21)	Subsidiaries of the Registrant.
(23)	Consent of independent registered public accounting firm.
(24)	Power of attorney.
(31.1)	Certification of the Chief Executive Officer pursuant to Section302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section1350.
(31.2)	Certification of the Chief Financial Officer pursuant to Section302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section1350.
(32.1)	Certification of the Chief Executive Officer pursuant to Section906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section1350.
(32.2)	Certification of the Chief Financial Officer pursuant to Section906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section1350.
(95)	Mine Safety Disclosures.
(101.INS)	XBRL Instance Document.
(101.SCH)	XBRL Taxonomy Extension Schema Document.
(101.CAL)	XBRL Taxonomy Extension Calculation Linkbase Document.
(101.DEF)	XBRL Taxonomy Extension Definition Linkbase Document.
(101.LAB)	XBRL Taxonomy Extension Label Linkbase Document.
(101.PRE)	XBRL Taxonomy Extension Presentation Linkbase Document.

Item 16. Form 10-K Summary.

A Form 10-K summary is provided at the beginning of this document, with hyperlinked cross-references. This allows users to easily locate the corresponding items in Form 10-K, where the disclosure is fully presented. The summary does not include certain Part III information that is incorporated by reference from a future proxy statement filing.

SIGNATURES

Pursuant to the requirements of Section13 or 15(d)of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


3M COMPANY

By	/s/ Nicholas C. Gangestad
	Nicholas C. Gangestad,
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February8, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February8, 2018.


Signature		Title
Inge G. Thulin		Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer and Director)
Ippocratis Vrohidis		Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer)
Sondra L. Barbour		Director
Thomas K. Brown		Director
Vance D. Coffman		Director
David B. Dillon		Director
Michael L. Eskew		Director
Herbert L. Henkel		Director
Amy E. Hood Muhtar Kent		Director Director
Edward M. Liddy		Director
Gregory R. Page		Director
Patricia A. Woertz		Director

Nicholas C. Gangestad, by signing his name hereto, does hereby sign this document pursuant to powers of attorney duly executed by the other persons named, filed with the Securities and Exchange Commission on behalf of such other persons, all in the capacities and on the date stated, such persons constituting a majority of the directors of the Company.


By	/s/ Nicholas C. Gangestad
Nicholas C. Gangestad, Attorney-in-Fact

EXHIBIT 10.6

3M COMPANY

2016 LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

Pursuant to the 3M Company 2016 Long-Term Incentive Plan (as amended from time to time, the "Plan"), 3M Company (the "Company") granted to the participant listed below ("Participant") the performance shares described below (the "Performance Shares"). The Performance Shares are subject to the terms and conditions set forth in this Performance Share Award Agreement, the vesting provisions set forth in Appendix A hereto (the "Vesting Appendix"), any special terms and conditions for Participant's country set forth in Appendix B hereto (the "Global Appendix") and the Plan. This Performance Share Award Agreement, the Vesting Appendix and the Global Appendix are referred to, collectively, as this "Agreement." The Plan, the Vesting Appendix and the Global Appendix are incorporated into this Performance Share Award Agreement by reference.


Participant:
Grant Date:
Target Number of Performance Shares:
Performance Period:	_________, 20__ through _________, 20__ (the "Performance Period")
Vesting Schedule:	Subject to the terms and conditions of this Agreement and the Plan, the Performance Shares shall vest as set forth in the Vesting Appendix hereto. Except as provided in Sections 1.3 and 1.5 of this Performance Share Award Agreement, in the Vesting Appendix, the Global Appendix, or as otherwise provided by the Administrator, in no event shall the Performance Shares vest following Participant's Termination of Service.

ELECTRONIC Acceptance of Award: By clicking on the "ACCEPT" box on the "Grant Terms and Agreement" page, you agree to be bound by the terms and conditions of this Agreement and the Plan. You acknowledge that you have reviewed and fully understand all of the provisions of this Agreement and the Plan, and have had the opportunity to obtain advice of counsel prior to accepting the grant of the Performance Shares pursuant to this Agreement. You hereby agree to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the Performance Shares.

ARTICLE I.

AWARD; VESTING; FORFEITURE AND SETTLEMENT

1.1Performance Shares and Dividend Equivalents.

(a)This Award is expressed in terms of a Target Number of Performance Shares as set forth above (the "Target Number of Performance Shares"). The actual number of Performance Shares that may be earned will depend on Participant's continued service with the Company or any Subsidiary and the extent to which the performance goals established for the Award are achieved. Each Performance Share earned represents the right to receive one Share on the terms, and subject to the conditions, set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the Performance Shares have vested.

(b)The Company hereby grants to Participant, with respect to each Performance Share, a Dividend Equivalent for ordinary cash dividends paid to substantially all holders of outstanding Shares with a record date after the Grant Date and prior to the date the applicable Performance Share is settled, forfeited or otherwise expires. Each Dividend Equivalent entitles Participant to receive the equivalent value of any such ordinary cash dividends paid on a single Share. The Company will establish a separate Dividend Equivalent bookkeeping account (a "Dividend Equivalent Account") for each Dividend Equivalent and credit the Dividend Equivalent Account (without interest) on the applicable dividend payment date with the amount of any such cash paid.

1.2Vesting; Forfeiture.

(a)The Performance Shares will vest according to the vesting schedule set forth in the Vesting Appendix (the "Vesting Schedule"). Except as otherwise provided by the Administrator (or its delegate) or as provided for in the Plan or this Agreement with respect to Participant's Termination of Service prior to the last day of the Performance Period by reason of Participant's Retirement, death or Disability, the Performance Shares will immediately and automatically be cancelled and forfeited as to any portion that is not vested as of Participant's Termination of Service to the extent such Termination of Service occurs prior to the last day of the Performance Period. In addition, the Performance Shares will immediately and automatically be cancelled and forfeited (including any portion that is then vested) upon the execution of a written determination by the Administrator or an authorized representative of the Company that Participant engaged in an act of Misconduct (whether the execution of such written determination occurs before or after Participant's Termination of Service).

(b)Dividend Equivalents (including any Dividend Equivalent Account balance) will vest or be forfeited, as applicable, upon the vesting or forfeiture of the Performance Share with respect to which the Dividend Equivalent (including the Dividend Equivalent Account) relates.

1.3Special Vesting Provisions. Notwithstanding anything to the contrary in Section 1.2 or the Vesting Schedule, the Performance Shares shall continue to vest, or vest on an accelerated basis, in the event of Participant's Termination of Service prior to the last day of the Performance Period under the following circumstances:

(a)If Participant's Termination of Service occurs prior to the last day of the Performance Period by reason of Participant's Retirement, the Performance Shares shall remain eligible to vest in accordance with the Vesting Schedule as if Participant had not incurred a Termination of Service, subject to accelerated vesting pursuant to clause (c) of this Section 1.3; provided, however, that the Target

Number of Performance Shares shall be adjusted, effective as of Participant's Termination of Service, as follows:

(i)If Participant was appointed to the Executive Conference on or after January 1, 2006 and on or before December 31, 2017, the Target Number of Performance Shares shall be adjusted to equal the product of (A)the Target Number of Performance Shares, as in effect immediately prior to Participant's Termination of Service, and (B)a fraction, the numerator of which equals the number of whole calendar months Participant provided services to the Company or any Subsidiary during the Performance Period and the denominator of which equals the total number of months in the Performance Period; or

(ii)If Participant was appointed to the Executive Conference before January 1, 2006 or after December 31, 2017, the Target Number of Performance Shares shall be adjusted to equal the product of (A) the Target Number of Performance Shares, as in effect immediately prior to Participant's Termination of Service, and (B) a fraction, the numerator of which equals the number of consecutive three-month periods Participant provided services to the Company or any Subsidiary during the first twelve months of the Performance Period and the denominator of which equals four.

Notwithstanding the foregoing, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in Participant's jurisdiction that likely would result in the favorable Retirement treatment that otherwise would apply to the Performance Shares pursuant to this Section 1.3(a) being deemed unlawful and/or discriminatory, then the Company will not apply this favorable Retirement treatment at the time of Participant's Termination of Service and the Performance Shares will be treated as they would under the rules that otherwise would have applied if Participant's Termination of Service did not qualify as a Retirement.

(b)If Participant's Termination of Service occurs by reason of Disability prior to the last day of the Performance Period, the Performance Shares shall remain eligible to vest in accordance with the Vesting Schedule as if Participant had not incurred a Termination of Service, subject to accelerated vesting pursuant to clause (c) of this Section1.3.

(c)If Participant's Termination of Service occurs by reason of death or Participant dies following the date of Participant's Termination of Service by reason of Retirement or Disability, in each case prior to the last day of the Performance Period, Participant shall vest in a number of Performance Shares equal to the lesser of (i) the Target Number of Performance Shares, or (ii) such other number of Performance Shares determined by the Administrator, in its discretion.

For purposes of this Article I, the term "Disability" shall have the meaning given to such term in Treasury Regulation section 1.409A-3(i)(4).

1.4Settlement.

(a)Except as provided in Section 1.4(c), all of Participant's Performance Shares which are then vested, and any related Dividend Equivalents (including any Dividend Equivalent Account balance), will be paid in Shares during the thirty (30)-day period beginning with the earliest to occur of the following events:

(i)the Certification Date (as defined in the Vesting Appendix) (provided that in no event will Shares be issued in settlement of Participant's Performance Shares pursuant to this clause

(i) later than March 15 of the calendar year immediately following the completion of the Performance Period;

(ii)the date of Participant's death; or

(iii)the date of Participant's Termination of Service following a Change in Control of the Company (provided that, if Participant is or will be eligible for Retirement at any time during the Performance Period, such Termination of Service must constitute a "separation from service" from the Company (within the meaning of Section 409A(a)(2)(A)(i) of the Code and Treasury Regulation Section 1.409A-1(h)). Notwithstanding anything to the contrary in this Agreement or the Plan, no Performance Shares or Dividend Equivalents shall be distributed to Participant pursuant to this Section 1.4(a)(iii) during the six-month period following Participant's separation from service if the Company determines that distributing such Performance Shares and Dividend Equivalents at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the distribution of any of Participant's Performance Shares and Dividend Equivalents is delayed as a result of the previous sentence, then such Performance Shares and Dividend Equivalents (including any Dividend Equivalent Account balance) shall be paid to Participant during the thirty (30)-day period beginning on the first business day following the end of such six-month period (or such earlier date upon which such Performance Shares and Dividend Equivalents can be distributed under Section 409A without resulting in a prohibited distribution, including as a result of Participant's death).

(b)The number of Shares paid with respect to the Dividend Equivalents will equal the quotient, rounded to the nearest one-thousandth of a Share, of the Dividend Equivalent Account balance divided by the Fair Market Value of a Share on the Certification Date.

(c)If permitted by the Company and provided Participant makes a valid deferral election within the time period specified by the Company in the deferral election form, then Participant may elect to change the timing of receipt of the Shares otherwise distributable under Section 1.4(a). Any such deferral election must comply with the requirements of Section 409A of the Code and the applicable Treasury Regulations or other guidance issued thereunder as well as any Plan rules on deferrals and must be made on a form approved by the Company. To the extent made, any such deferral election will be incorporated herein by this reference.

(d)Notwithstanding any provisions of this Agreement or the Plan to the contrary, the time of distribution of the Performance Shares and the Dividend Equivalents under this Agreement may not be changed except as may be permitted by the Administrator in accordance with Section 409A and the applicable Treasury Regulations promulgated thereunder.

1.5Effect of Change in Control. Notwithstanding anything to the contrary in the Vesting Schedule or Sections 1.2 and 1.3, in the event of Participant's Termination of Service prior to the last day of the Performance Period (i) by the Company or any Subsidiary other than as a result of Participant's Misconduct or (ii) by Participant for Good Reason, in either case, within eighteen (18) months following a Change in Control of the Company, Participant shall vest in a number of Performance Shares equal to the sum of:

(a)With respect to any calendar year(s) during the Performance Period that have ended prior to the date of such Termination of Service, the Vesting Eligible Shares for such calendar year(s) as determined pursuant to the Vesting Schedule; plus

(b)With respect to any calendar year(s) during the Performance Period that have not ended prior to the date of such Termination of Service, the greatest of (i) the Performance Shares that would have been Vesting Eligible Shares for such calendar year(s) if the Company's performance relative to the performance objectives for such calendar year(s) equaled its actual performance during those calendar quarters completed during the calendar year in which such Participant's Termination of Service occurs and prior to the date of such Termination of Service as set forth in the Vesting Schedule, (ii) the Performance Shares that would have been Vesting Eligible Shares for such calendar year(s) if the Company's performance relative to the performance objectives for the such calendar year(s) equaled its actual performance for the three consecutive calendar year period ending immediately prior to the calendar year in which the Termination of Service occurs, or (iii) such other number of Performance Shares determined by the Administrator, in its discretion; provided, however, that the resulting number of Performance Shares under this Section 1.5 shall be prorated to reflect the number of full calendar months during the Performance Period that elapsed prior to the date of Participant's Termination of Service.

For purposes of this Section 1.5, "Good Reason" means (i) a material diminution in Participant's position, authority, duties or responsibilities as in effect immediately prior to the Change in Control of the Company, (ii) a material diminution in Participant's base salary or annual planned cash compensation, or (iii) a material change in the geographic location at which Participant is required to perform services for the Company or its Subsidiaries.

ARTICLE II.

TAXATION AND TAX WITHHOLDING

2.1Responsibility for Taxes.

(a)Participant acknowledges that, regardless of any action taken by the Company or, if different, Participant's employer (the "Employer"), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to Participant's participation in the Plan and legally applicable to Participant or deemed by the Company or the Employer in its discretion to be an appropriate charge to Participant even if legally applicable to the Company or the Employer ("Tax-Related Items") is and remains Participant's responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Shares, including, but not limited to, the grant or vesting of the Performance Shares or any related Dividend Equivalents, the subsequent sale of Shares acquired upon vesting, and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Performance Shares to reduce or eliminate Participant's liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b)Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to assist the Company and/or the Employer in satisfying any applicable withholding obligations for Tax-Related Items. In this regard, the Company and/or the Employer, or their respective agents, at their discretion, may satisfy, or allow Participant to satisfy, the withholding obligation with regard to all TaxRelated Items by any of the following, or a combination thereof:

(i)By cash, check or wire transfer of immediately available funds; provided that the Company may limit the use of one of the foregoing methods if one or more of the methods below is permitted;

(ii)Delivery (including telephonically to the extent permitted by the Company) of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon settlement of the Performance Shares, and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy the obligation for Tax-Related Items; provided that such amount is paid to the Company at such time as may be required by the Company;

(iii)To the extent permitted by the Administrator, surrendering Shares then issuable upon settlement of the Performance Shares valued at their Fair Market Value on such date; or

(iv)By the deduction of such amount from other compensation payable to Participant.

(c)The Company and/or the Employer has the right and option, but not the obligation, to treat Participant's failure to provide timely payment of any Tax-Related Items as Participant's election to satisfy all or any portion of the Tax-Related Items pursuant to Section 2.1(b)(iii) or (iv) above, or a combination of such sections.

(d)Depending on the withholding method, the Company and/or the Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case Participant may receive a refund of any over-withheld amount in cash through the Employer's normal payroll processes and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by surrendering Shares, solely for tax purposes and not intended to modify or restrict in any way Section 4.2 of the Plan, Participant is deemed to have been issued the full number of Shares subject to the vested Performance Share, notwithstanding that a number of Shares are surrendered for the purpose of paying the Tax-Related Items.

(e)Participant understands and agrees that certain tax withholding amounts may be due prior to any issuance of Shares under Section 1.4 if the Performance Shares are at any time not subject to a substantial risk of forfeiture for purposes of Section 83 of the Code prior to such date. If Shares are issued on an accelerated basis to satisfy the Federal Insurance Contributions Act tax imposed under Sections 3101, 3121(a) or 3121(v)(2) of the Code (the "FICA Tax") as provided in this Section 2.1(e) as a result of the lapse of the substantial risk of forfeiture for purposes of Section 83 of the Code prior to the issuance of Shares under Section 1.4, then Participant may have income tax at source on wages imposed under Section 3401 of the Code or the corresponding withholding provisions of applicable state, local or foreign tax laws (together with the FICA Tax, the "FICA-Related Taxes"). Participant's FICA-Related Taxes shall be satisfied by the deduction of such amount from other compensation payable to Participant. To the extent the other compensation payable to Participant is determined by the Company to be insufficient to satisfy Participant's FICA-Related Taxes, Participant's acceptance of the Performance Shares hereunder constitutes Participant's instruction and authorization to the Company to satisfy the FICA-Related Taxes through the accelerated issuance and withholding of Shares otherwise issuable pursuant to the Performance Shares having a then-current Fair Market Value not exceeding the amount necessary to satisfy the FICA-Related Taxes of the Company and its affiliates based on the minimum applicable statutory withholding rates.

(f)Finally, Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant's participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to honor the vesting of the Performance Shares and/or refuse to issue or deliver the Shares or the proceeds from the sale of the Shares if Participant fails to comply with Participant's obligations in connection with the Tax-Related Items.

ARTICLE III.

OTHER PROVISIONS

3.1Nature of Grant. In accepting the Performance Shares, Participant understands, acknowledges, and agrees that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time in accordance with its terms;

(b)the grant of the Performance Shares is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Shares, or benefits in lieu of Performance Shares, even if Performance Shares have been granted in the past;

(c)all decisions with respect to future Performance Share or other grants, if any, will be at the sole discretion of the Administrator;

(d)the Performance Share grant and participation in the Plan shall not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer, or any other Subsidiary and shall not interfere with the ability of the Company, the Employer or any other Subsidiary, as applicable, to terminate Participant's employment or service relationship (if any) at any time with or without cause;

(e)Participant is voluntarily participating in the Plan;

(f)the Performance Shares and any Shares acquired under the Plan, and the income from and value of same, are not intended to replace any pension rights or compensation;

(g)the Performance Shares and any Shares acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits, welfare benefits or other similar payments;

(h)the future value of the Shares underlying the Performance Shares is unknown, indeterminable and cannot be predicted with certainty;

(i)no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance Shares resulting from Participant's Termination of Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any);

(j)for purposes of the Performance Shares, Termination of Service will be deemed to have occurred as of the date Participant is no longer actively providing services to the Company or any of its Subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Administrator, Participant's right to vest in the Performance Shares, if any, will terminate as of such date and will not be extended by any notice period (e.g., Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any); the Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the Performance Shares (including whether Participant may still be considered to be providing services while on a leave of absence);

(k)unless otherwise agreed with the Company, the Performance Shares and the Shares underlying the Performance Shares, and the income and value of same, are not granted as consideration for, or in connection with, any services Participant may provide as a director of a Subsidiary;

(l)unless otherwise provided in the Plan or by the Administrator, the Performance Shares and the benefits evidenced by this Agreement do not create any entitlement to have the Performance Shares or any such benefits transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Common Stock;

(m)the following provision shall not apply to Employees in the State of California: In consideration of the grant of the Performance Shares, and to the extent permitted by applicable law, Participant agrees not to institute any claim against the Company, the Employer or any other Subsidiary, to waive Participant's ability, if any, to bring such claim, and release the Company, the Employer and any other Subsidiary from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim; and

(n)the following provisions apply if Participant is providing services outside the United States:

(i)the Performance Shares and any Shares acquired under the Plan, and the income and value of same, are not part of normal or expected compensation or salary for any purpose; and

(ii)neither the Company, the Employer nor any other Subsidiary shall be liable for any foreign exchange rate fluctuation between Participant's local currency and the United States Dollar that may affect the value of the Performance Shares or any amounts due to Participant pursuant to the vesting of the Performance Shares or the subsequent sale of any Shares acquired upon such vesting.

3.2No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making recommendations regarding participation in the Plan, or Participant's acquisition or sale of the underlying Shares. Participant understands and agrees that Participant should consult with Participant's own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to his or her Award(s).

3.3Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant's personal data as described in this Agreement and any other Performance Share grant materials by and among, as applicable, the Employer, the Company and its other Subsidiaries for the purpose of implementing, administering and managing the Plan.

Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant's name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all stock options, Performance Shares or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant's favor ("Data"), for the purpose of implementing, administering and managing the Plan.

Participant understands that Data will be transferred to Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients' country (e.g., the United States) may have different data privacy laws and protections than Participant's country. Participant understands that if Participant resides outside the United States Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant's local human resources representative. Participant authorizes the Company, Fidelity Investments and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Plan. Participant understands that if Participant resides outside the United States, Participant may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant's local human resources representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke Participant's consent, Participant's employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant's consent is that the Company may not be able to grant Performance Shares or other equity awards to Participant or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing Participant's consent may affect Participant's ability to participate in the Plan. For more information on the consequences of Participant's refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant's local human resources representative.

3.4Transferability. The Performance Shares are not transferable, except by will or the laws of descent and distribution or as permitted by the Administrator in accordance with the terms of the Plan.

3.5Adjustments. Participant acknowledges that the Performance Shares, the Shares subject to the Performance Shares and the Dividend Equivalents are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

3.6Defined Terms; Titles. Capitalized terms not defined in this Agreement have the meanings given to them in the Plan. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

3.7Conformity to Applicable Laws. Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

3.8Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the transfer provisions set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

3.9Entire Agreement and Imposition of Other Terms. The Plan, this Agreement (including all exhibits and appendices hereto) and any valid deferral election made pursuant to Section 1.4(c) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. Nonetheless, the Company reserves the right to impose other requirements on Participant's participation in the Plan, on the Performance Shares and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

3.10Severability. In the event that any provision of this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of this Agreement.

3.11Waiver. Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant or any other person.

3.12Limitation on Participant's Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates a contractual arrangement between the Company and Participant only and shall not be construed as creating a trust for the benefit of Participant. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Performance Shares and Dividend Equivalents, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Performance Shares and Dividend Equivalents, as and when settled pursuant to the terms hereof.

3.13Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

3.14Language. Participant acknowledges that he or she is sufficiently proficient in English to understand the terms and conditions of this Agreement. Furthermore, if Participant receives this Agreement or any other document relating to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

3.15Foreign Asset/Account and Exchange Control and Tax Reporting. Participant acknowledges that, depending on Participant's country, Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of Shares (including dividends received or the proceeds arising from the sale of Shares) derived from participation in the Plan, in, to and/or from a brokerage/bank account or legal entity located outside Participant's country. The Applicable Laws of Participant's country may require that Participant report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in such country. Participant acknowledges that Participant is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult Participant's personal legal advisor on these matters.

3.16Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant's country, or broker's country, or the country in which the Shares are listed, Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, which may affect Participant's ability to, directly or indirectly, accept, acquire, sell, or attempt to sell or otherwise dispose of Shares or rights to Shares under the Plan during such times when Participant is considered to have "inside information" regarding the Company (as defined by the laws or regulations in the applicable jurisdictions or Participant's country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders placed by Participant before possessing inside information. Furthermore, Participant understands that he or she may be prohibited from (i) disclosing the inside information to any third party, including fellow employees (other than on a "need to know" basis) and (ii) "tipping" third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. Participant acknowledges that Participant is responsible for ensuring compliance with any applicable restrictions and should consult Participant's personal legal advisor on these matters.

3.17Section 409A. The intent of the parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A and the regulations and guidance promulgated thereunder and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. For purposes of Section 409A, each payment that Participant may be eligible to receive under this Agreement shall be treated as a separate and distinct payment.

3.18Appendices. Notwithstanding any provisions in this Performance Share Award Agreement, the Performance Shares and Dividend Equivalents shall be subject to any special terms and conditions set forth in the Vesting Appendix and the Global Appendix. Specifically, in the event Participant resides or relocates to one of the countries included in the Global Appendix, the terms and conditions for such country will apply to Participant to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Vesting Appendix and the Global Appendix constitute a part of this Performance Share Award Agreement.

3.19Governing Law and Venue. This Agreement and the Performance Shares and the Dividend Equivalents will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding the choice-of-law principles of the State of Delaware and any other state requiring the application of a jurisdiction's laws other than the State of Delaware. For purposes of litigating any dispute concerning the grant of the Performance Shares, the Dividend Equivalents or this Agreement, Participant consents to the jurisdiction of the State of Minnesota and agrees that such litigation shall be conducted exclusively in the courts of Ramsey County, Minnesota, or the federal courts for the United States for the District of Minnesota, where this grant is made and/or to be performed.

*****

Appendix A ("VESTING APPENDIX")

PERFORMANCE SHARE AWARD AGREEMENT

[Vesting terms to be determined at the time of grant.]

Appendix B ("Global aPPENDIX")

PERFORMANCE SHARE AWARD AGREEMENT

Certain capitalized terms used but not defined in this Global Appendix have the meanings set forth in the Performance Share Award Agreement (the "Agreement") or, if not defined therein, the Plan.

Terms and Conditions

This Global Appendix includes additional terms and conditions that govern the Performance Shares granted to Participant under the Plan if Participant resides and/or works in one of the countries listed below. If Participant is a citizen or resident of a country other than the one in which Participant resides and/or works, is considered a resident of another country for local law purposes or transfers employment and/or residency between countries after the Grant Date, the Company shall determine, in its sole discretion, to what extent the terms and conditions contained herein shall apply to Participant.

Notifications

This Global Appendix also includes information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant's participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of November 2017. Such laws are often complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information in this Global Appendix as the only source of information relating to the consequences of Participant's participation in the Plan because the information may become out of date in the future.

In addition, the information contained herein is general in nature and may not apply to Participant's particular situation, and the Company is not in a position to assure Participant of any particular result. Accordingly, Participant is advised to seek appropriate professional advice as to how the relevant laws in Participant's country may apply to Participant's situation.

Finally, if Participant is a citizen or resident of a country other than the one in which Participant resides and/or works, is considered a resident of another country for local law purposes or transfers employment and/or residency to another country after the Grant Date, or, the information contained herein may not be applicable to Participant.

[Country-specific terms to be determined at the time of grant.]

EXHIBIT 10.11

(PARTICIPANT NAME)

This On-line Grant Agreement (OGA) is intended to provide you with the number of target performance shares actually assigned to you in connection with your 201__ Performance Share award and for you to acknowledge receipt of your award. The number of target performance shares, (# OF SHARES GRANTED), was calculated by dividing the target value of your Performance Share award by the Grant Date Fair Value ($xx.xx) of the award on (GRANT DATE).

Performance Share awards issued under the Long-Term Incentive Plan (LTIP) are a significant part of your total compensation as a 3M executive. Performance Shares reward your leadership and commitment in managing 3M's business for sustainability and improved results over time.

The 201__ award will compensate you for the results we achieve against corporate financial goals over the three-year period 201__, 201__ and 201__. The maximum payout will be 2 times the number of target performance shares assigned to you at the time of the award.

Maximize the value of your Performance Shares

The metrics used for Performance Shares have changed to these four metrics: Organic Sales Volume Growth compared to the Worldwide Industrial Production Index (IPI), Return on Invested Capital (ROIC), Free Cash Flow Conversion and Earnings per Share Growth.

Your 201__ individual performance rating was a factor in your 201__ award. Your Performance Shares award was adjusted based on your performance rating and Leadership Behaviors score.

The targets for 201__ align with the guidance range provided to investors and with 3M's 201__ Operating Plan.

201__ Performance Share Payout Matrix:

For more information about the metrics and how Performance Share awards issued under the LTIP Plan will work, please review the Performance Share information on 3M Source.

Your 201__ award will be governed by the provisions of the LTIP plan document, and will be paid out in March 201__ unless you elected to defer the payout under the 3M Performance Awards Deferred Compensation Plan. If you are either an L1 executive or a Section 16 Officer of the Company, your 201__ award is also subject to the Company's revised Policy on Reimbursement of Incentive

Compensation under which the Company may, in certain circumstances described in the Policy, require reimbursement of or otherwise recover compensation it pays or provides to you.

By accepting the grant of this Performance Share award, you agree to all the terms and conditions described in the LTIP plan document.

EXHIBIT 10.22

AMENDED AND RESTATED

3M EXECUTIVE LIFE INSURANCE PLAN

1.Purpose of the Plan

The purpose of the 3M Executive Life Insurance Plan is to provide those executive employees who participate in the Plan with Company-funded insurance coverage during employment and with the opportunity to continue their insurance coverage after retirement (at the individual's expense) through 3M's obtaining one or more life insurance policies on their behalf. The Plan is designed to work together with 3M's Basic Life Insurance Plan and the additional coverage offered by the 3M Employees' Benefits Trust Association to afford participating executive employees the opportunity to obtain comprehensive death benefit protection for their families and beneficiaries.

The actual amount of death benefit a Participant's Beneficiary may receive from the policies purchased pursuant to this Plan will vary by such factors as the Insurance Carrier's policy dividend crediting rate, time of retirement, and the manner in which the Participant elects to maintain the policy or policies after retirement, as well as other factors.

This document reflects the provisions of the Plan as amended through November 11, 2007. The initial effective date of this Plan was October 1, 1993.

2.Definitions

2.1"Agreement" means the written instrument between an Employee and the Company, wherein the Employee and the Company clarify the terms and conditions under which Employee will participate in the Plan.

2.2"Annual Premium' means the amount of consideration determined by the Insurance Carrier and agreed upon by the Company for an Insurance Policy issued under the Plan.

2.3"Assignment" means the written document filed with the Plan Administrator and the Insurance Carrier whereby a Participant assigns ownership of an Insurance Policy to another person, entity or trust, subject to the Company's rights as described in the respective Agreement (if applicable) and the assignment included in such Agreement.

2.4"Beneficiary" means the person(s) entitled to receive the Participant Death Benefit under an Insurance Policy following the death of the Participant.

2.5"Company" means 3M Company, a Delaware corporation (also referred to herein as "3M,"), its subsidiaries and affiliates, and its successors or assigns.

2.6"Compensation" means the amount of the Participant's planned total cash compensation for a Participant who is a current Employee. For a Participant who has retired from the Company but remains a Participant under the Plan, Compensation means the Participant's approximate planned total cash compensation in effect immediately prior to the time of retirement.

2.7"Corporate Capital Interest" means the Insurance Policy's cumulative Annual Premiums paid by the Company in respect of a Policy with respect to which the Participant has entered into a split dollar insurance agreement with the Company, as set forth in Section 6.2. The Corporate Capital Interest shall be reduced by policy loans, if any (including any unpaid interest thereon), taken by the Company. The actual amount of the Corporate Capital Interest shall be determined by the Company, and such determination shall be binding upon the Insurance Carrier and any person having an ownership or beneficial interest in the Insurance Policy.

2.8"Employee" means any person employed by the Company as a member of its Executive Conference and who receives Compensation for personal services rendered to the Company.

2.9"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

2.10"Insurance Age" means the age of the insured according to the Insurance Policy.

2.11"Insurance Carrier" means the life insurance company or companies selected by the Company to issue policies under or pursuant to the Plan.

2.12"Insurance Policy" means the life insurance policy, together with additional policy benefits and riders, if any, issued by the Insurance Carrier pursuant to the Plan. Except to the extent such defined terms are inconsistent with defined terms under the Plan, insurance terms used herein shall have the same meaning as in the Insurance Policy.

2.13"Participant" means an Employee who has met and continues to meet all the applicable eligibility requirements under the Plan.

2.14"Participant Death Benefit" means any portion of the total death benefit of an Insurance Policy which is above an amount equal to the Corporate Capital Interest.

2.15"Plan" means the 3M Executive Life Insurance Plan.

2.16"Plan Administrator" means the person to whom the Company has delegated the authority and responsibility for administering the Plan. Unless and until changed by the Company, the Plan Administrator of the Plan shall be 3M's Staff Vice President, Global Compensation and Benefits or her successor.

2.17"Termination of Service" means the Participant's ceasing his or her employment with the Company for any reason, whether voluntarily or involuntarily, including by reasons of retirement, disability or death. For purposes of this Plan, a Termination of Service shall occur when a Participant no longer meets all the applicable eligibility requirements under the Plan.

3.Administration And Interpretation Of The Plan

3.1.Plan Administrator. Except as otherwise provided in the Plan, the Plan Administrator shall have control over the administration and interpretation of the Plan, with all the powers necessary to carry out the intent of the Plan. The Plan Administrator may adopt such rules and regulations relating to the Plan as the Plan Administrator deems necessary or advisable for the administration of the Plan. Any decisions, actions or interpretations of any provision of the Plan made by the Plan Administrator shall be made in its sole discretion, need not be uniformly applied to similarly situated individuals, and shall be final, binding and conclusive on all persons interested in the Plan. The Plan Administrator may delegate administrative responsibilities to advisors or other persons and may rely upon the information or opinions of legal counsel or experts selected to render advice with respect to the Plan.

3.2.Insurance Carrier. The Insurance Carrier shall be responsible for all matters relating to any Insurance Policy. Not in limitation, but in amplification of the foregoing, the Insurance Carrier shall decide whether it will issue an Insurance Policy on the life of a Participant who has otherwise met all of the Plan's eligibility requirements.

3.3.Plan Document Shall Control. In the event of any discrepancy between any other documents, communication pieces or plan summaries prepared pursuant to this Plan, other than the Insurance Policies, the plan document shall control.

4.Eligibility and Participation

To become and continue to remain a Participant in the Plan, an Employee must meet all of the following requirements:

a)Be nominated to participate in the Plan by the Company;

b)Make an application to the Insurance Carrier in the manner set by the Plan Administrator;

c)Meet the insurability requirements of the Insurance Carrier and be issued an Insurance Policy; and

d)Sign all documents presented by the Plan Administrator necessary or appropriate to carry out the intent of the Plan.

Since participation under the Plan involves the purchase of an Insurance Policy, which is subject to the Employee's insurability, the Company does not guarantee that each Employee nominated for participation will be able to participate in the Plan.

5.Death Benefits

5.1Amount of Benefits/Coverage. All of the benefits provided under this Plan shall be provided exclusively through the Insurance Policies purchased upon the lives of the Participants. While a Participant is employed by the Company, the Insurance Policy or Policies purchased upon the life of such Participant will be designed to provide a Participant Death Benefit equal to approximately three (3) times the Participant's Compensation (or in the case of those Participants who are senior executives of the Company, approximately four (4) times the Participant's Compensation less the amount of additional life insurance coverage available through the optional life insurance benefit plans offered by the 3M Employees' Benefits Trust Association, if such formula would produce a larger amount) less the amount of such Participant's coverage under the 3M Basic Life Insurance Plan; provided, however, that for a Participant who is not covered by the 3M Basic Life Insurance Plan, their Insurance Policy or Policies shall be designed to provide a Participant Death Benefit equal to approximately two (2) times the Participant's Compensation. Following retirement from employment with the Company, the Insurance Policy or Policies purchased upon the life of each Participant whose participation in this Plan began prior to September 1, 2003 will be designed to provide a Participant Death Benefit equal to approximately one and one-half (1.5) times the Participant's Compensation. Notwithstanding the foregoing, the amount of a Participant's coverage under this Plan shall be frozen and shall not thereafter increase in the event such Participant makes a withdrawal from one or more of the Insurance Policies purchased upon his or her life pursuant to this Plan.

5.2Offset against Death Benefit. If the Company has participated in the purchase of a single premium life insurance policy for which the death benefits are payable to the Participant's Beneficiary, the amount of available death proceeds under such policy will be used as an offset when determining the policy amount under Section 5.1.

5.3Payment of Death Benefit. Subject to the Company's right to first recover its Corporate Capital Interest with respect to such Policy or Policies (if applicable), the death benefit payable under the Plan following the death of a Participant is the Participant Death Benefit payable under the Insurance Policy or Policies insuring the life of such Participant. This Participant Death Benefit shall be determined and paid by the Insurance Carrier from the proceeds of the Insurance Policy or Policies upon submission of acceptable proof of death and a claim for benefits. The Participant Death Benefit payable to a Participant's Beneficiary shall be in accordance with the terms of the Insurance Policy or Policies and the provisions of this Plan.

5.4No Guarantee of Death Benefit. In the event that the death proceeds payable under the Insurance Policy or Policies insuring the life of a Participant exceeds the sum of the Company's Corporate Capital Interest (if any) and the targeted Participant's Death Benefit under Section 5.1, the excess death proceeds shall be paid to the Participant's Beneficiary. In the event that the death proceeds payable under the Insurance Policy or Policies insuring the life of a Participant are not sufficient to provide the targeted Participant's Death Benefit under Section 5.1, the Company shall not be obligated to make up or compensate the Participant's Beneficiary for any deficiency.

5.5Beneficiary Designation. The Participant Death Benefit is payable to the Beneficiary or Beneficiaries designated by the Participant or other owner of the Insurance Policy. If no such Beneficiary is designated, the Beneficiary shall be the person or persons entitled to the death benefit under the terms of the Insurance Policy or applicable state law, whichever governs.

5.6Ownership of Insurance Policies;Assignment. Effective January 1, 2008, each Insurance Policy purchased under this Plan shall be a group term life insurance policy issued to the Company and/or the Plan. Insurance Policies purchased under this Plan prior to January 1, 2008 were initially owned by the Participant whose life was insured thereby. To secure the repayment of the Company's Corporate Capital Interest (if applicable), each Participant who has entered into a split dollar insurance agreement with the Company shall assign such Policy to 3M as part of such Agreement. Subject to the terms of such Insurance Policy and the Company's rights pursuant to such assignment, each Participant shall have the right to assign any or all of his or her interest in the Insurance Policy and the accompanying Agreement (if applicable) to any person, entity, or trust, by signing and delivering to the Plan Administrator and the Insurance Carrier a written Assignment in a form mutually acceptable to the Plan Administrator and the Insurance Carrier.

5.7Protective Provisions. If a Participant dies by suicide or if it is determined a material misstatement was made in the Insurance Policy Application, the applicable protective provisions of the Insurance Policy will apply.

6.Contributions and Funding

6.1Responsibility of the Participant.

(a) With Split Dollar - Each Participant who has entered into a split dollar insurance agreement with the Company shall be responsible for contributing the value of the "economic benefit" received as a result of his/her participation in the Plan. The value of the "economic benefit" received under an Insurance Policy issued pursuant to this Plan will be based on the lower of the Internal Revenue Service's Table 2001 rates or the Insurance Carrier's published premium rates available to all standard risks for initial issue one-year term insurance in compliance with Revenue Rulings 66-110 and 67-154 issued by the Internal Revenue Service. The Company will reimburse the Participant for this contribution, but not for the amount of any income tax incurred by the Participant as a result of his or her participation in the Plan. The Participant shall be responsible for all income taxes incurred as a result of his or her participation in the Plan.

(b) Without Split Dollar - Each other Participant shall be responsible only for paying the income taxes incurred by such Participant as a result of his or her participation in the Plan. No portion of the premiums payable on the Insurance Policy or Policies insuring the life of a Participant shall be payable by the Participant while the Company is obligated to pay such premiums as described in Section 6.2 below.

6.2Responsibility of Company. The Company shall be responsible for the payment of all Annual Premiums payable with respect to each Insurance Policy or Policies purchased under the Plan (a) for those Participants who have entered into split dollar insurance agreements with the Company, while the respective Agreement remains in effect, (b) for all other Participants whose participation in this Plan began prior to September 1, 2003, during their employment and for as long as necessary during their retirement, and (c) for Participants whose participation in this Plan began on or after September 1, 2003, only during their employment. The Company shall, at its option, have the authority to borrow against any Insurance Policy up to an amount not to exceed the Corporate Capital Interest. However, the Company shall pay to the Insurance Carrier no fewer than four Annual Premiums during the first seven policy years of each Insurance Policy, and during this period the Company shall not borrow an amount greater than the sum of three years' payments described in this Section. All interest payments due as a result of such borrowing shall be the responsibility of the Company. The Company reserves the right to limit or adjust the amount of the premiums it will pay for an Insurance Policy or Policies purchased under this Plan in the event that the Participant covered by such Policy or Policies makes a withdrawal from one or more of such Insurance Policies.

6.3Termination of Agreement. Notwithstanding any other provision in this Plan, the Agreement (if any) between the Company and each Participant shall be terminated upon the occurrence of the first of the following events:

a)The Insurance Policy's anniversary date on which the Participant attains Insurance Age 65, except in certain circumstances where the Company in its sole discretion deems it appropriate to extend the duration of funding in order to sustain the prescribed death benefit. In no event may the Agreement between the Company and a Participant be terminated as a result of the occurrence of an event described in this Section 6.3(a) prior to the 15^th anniversary of the issue date of the Insurance Policy.

b)The death of the Participant.

c)The Termination of Service of a Participant for any reason other than the Participant's death prior to the Insurance Policy's anniversary date on which the Participant attains Insurance Age 65.

In the event of a termination described in (a) above, the Company will be entitled to recover from the Insurance Policy its Corporate Capital Interest. Upon the Company's recovery of such Corporate Capital Interest, the Participant or his or her assignee will be responsible for all future premiums and the Company shall have no involvement whatsoever, direct or indirect, in such Insurance Policy. The actual death benefit provided by such Insurance Policy after such time may be greater than or less than the targeted death benefits described in Section 5.1. In the event the Insurance Policy does not provide the targeted Participant Death Benefit, the Company shall not be obligated to make up or compensate the Participant's Beneficiary for any deficiency.

In the event of a termination described in (b) above, the Company will be entitled to recover from the death proceeds its Corporate Capital Interest and the balance of the death proceeds will be paid to the Beneficiary under the Insurance Policy. The actual death benefit provided by the Insurance Policy may be greater than or less than the targeted death benefits described in Section 5.1. In the event the Insurance Policy does not provide the targeted Participant Death Benefit, the Company shall not be obligated to make up or compensate the Participant's Beneficiary for any deficiency.

In the event of a termination described in (c) above, the Participant may maintain the Insurance Policy by paying the Corporate Capital Interest to the Company in accordance with the terms of the Agreement. Thereafter, the Company shall have no involvement whatsoever, direct or indirect, in the Insurance Policy. In the event the Participant decides not to maintain the Insurance Policy, he/she shall execute any and all instruments that may be required to transfer ownership of the Insurance Policy to the Company. The Company shall have the right to maintain the Insurance Policy or dispose of the Insurance Policy as it sees fit. The provisions of Section 6.3(c) shall be subject to any applicable severance agreement between the Company and the Participant.

7.Amendment and Termination of The Plan

7.1Amendment. The Company may amend the Plan at any time; provided, however, that no amendment shall adversely affect the rights of any Participant or Beneficiary acquired under the terms of the Plan as in effect prior to the amendment without the prior written consent of the Participant or Beneficiary.

7.2Termination. The Company reserves the sole right to terminate the Plan at any time. In the event of the termination of the Plan, each Participant whose participation in the Plan began prior to January 1, 2008 shall be entitled to retain any Insurance Policy or Policies insuring him or her, reduced by the Corporate Capital Interest (if any) as of the date of the termination of the Plan. Thereafter, the Participant will be responsible for all future premiums and the Company shall have no involvement whatsoever, direct or indirect, in such Insurance Policy or Policies.

8.Claim Procedure

All death benefits provided under the Plan are to be paid from the Insurance Policies. The Company has adopted the claim procedure established by the Insurance Carrier as the claim procedure for the Plan. The Beneficiary of the proceeds of an Insurance Policy must file a claim for benefits with the Insurance Carrier in whatever form the Insurance Carrier may reasonably require. If the Insurance Carrier denies the claim, the Beneficiary who wants to have that denial reviewed will have to follow the Insurance Carrier's claims review procedure. The Company shall have no liability in the event an Insurance Carrier denies a Beneficiary's claim for benefits.

9.Miscellaneous

9.1Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Company and any Participant, and the Participants (or their Beneficiaries) shall have no rights against the Company except as may otherwise be specifically provided herein. Moreover, nothing in this Plan shall be deemed to give any Participant the right to be retained as an Employee of the Company or to interfere with the right of the Company to discipline or discharge such Participant at any time for any reason whatsoever.

9.2Taxes. The Company shall deduct from each Participant's Compensation all applicable Federal or State taxes that may be required by law to be withheld resulting from the Company's funding of the Insurance Policy under the Plan.

9.3Governing Law. Except where preempted by ERISA, the Plan shall be construed and administered according to the laws of the State of Minnesota.

9.4Form of Communication. Any election, application, claim, notice, or other communication required or permitted to be made by a Participant to the Plan Administrator and/or the Insurance Carrier shall be made in writing and in such form as the Plan Administrator and/or the Insurance Carrier shall prescribe.

9.5Agent for Service of Process. The Plan Administrator is designated as the agent to receive service of legal process on behalf of the Plan.

9.6Rules of Construction. When appropriate, the singular as used in this Plan shall include the plural, and vice-versa, and the masculine shall include the feminine, and vice-versa.

EXHIBIT12

3M COMPANY AND SUBSIDIARIES

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Millions)


	Year		Year		Year		Year		Year
	2017		2016		2015		2014		2013
EARNINGS
Income before income taxes	$	7,548	$	7,053	$	6,823	$	7,026	$	6,562

Add:
Amortization of capitalized interest		19		21		22		22		21
Total fixed charges (excluding capitalized interest)		339		298		250		246		248

Less:
Equity in undistributed income of equity method investments		11		9		5		(1)		(1)

TOTAL EARNINGS	$	7,895	$	7,363	$	7,090	$	7,295	$	6,832

FIXED CHARGES
Interest expense (including capitalized interest and excluding expense on early extinguishment of debt)		238		208		162		159		166
Portion of rent expense under operating leases representativeof the interest factor		113		100		101		104		103

TOTAL FIXED CHARGES	$	351	$	308	$	263	$	263	$	269

RATIO OF EARNINGS TO FIXED CHARGES		22.5		23.9		27.0		27.7		25.4

For purposes of calculating the ratio above:

Earnings is defined as income before income taxes, amortization of capitalized interest, and fixed charges (less capitalized interest), excluding equity in undistributed income of equity method investments. Fixed charges consist of interest expense (including capitalized interest and excluding any expense related to early extinguishment of debt) and approximately one-third of rent expense under operating leases (considered representative of the interest factor).

EXHIBIT21

3M COMPANY AND CONSOLIDATED SUBSIDIARIES (PARENT AND SUBSIDIARIES)

AS OF DECEMBER 31, 2017


NameofCompany		Organized Under Law of
Registrant - 3M Company		Delaware
Consolidated subsidiaries of the Registrant:
3M Financial Management Company		Delaware
3M Innovative Properties Company		Delaware
3M Occupational Safety LLC		Delaware
3M Purification Inc.		Delaware
Aearo Holding LLC		Delaware
Aearo Intermediate LLC		Delaware
Aearo LLC		Delaware
Aearo Technologies LLC		Delaware
Capital Safety North America Holdings Inc.		Delaware
Capital Safety North America Intermediate Holdings LLC		Delaware
Ceradyne, Inc.		Delaware
Scott Technologies, Inc.		Delaware
3M Unitek Corporation		California
Meguiar's, Inc.		California
3M Health Information Systems, Inc.		Maryland
D B Industries, LLC		Minnesota
3M Australia Pty. Ltd.		Australia
3M Precision Grinding GmbH		Austria
3M Belgium bvba/sprl		Belgium
3M do Brasil Ltda.		Brazil
3M Manaus Industria de Produtos Quimicos Ltda.		Brazil
3M Canada Company - Compagnie 3M Canada		Canada
Capital Safety Group Canada ULC		Canada
3M China Limited		China
3M International Trading (Shanghai) Co., Ltd.		China
3M Investments (China) Co., Ltd.		China
3M Material Technology (Suzhou) Co., Ltd.		China
3M Specialty Materials (Shanghai) Co., Ltd.		China
3M Asia Pacific UK Holding Ltd		England
Capital Safety Global Holdings Limited		England
3M Products Limited		England
Capital Safety UK Holding Ltd		England
3M Purification		France
3M France S.A.S.		France
Capital Safety Group EMEA		France
Oldham S.A.S.		France
3M Deutschland GmbH		Germany
3M Real Estate GmbH & Co KG		Germany
Dyneon GmbH		Germany
3M Hong Kong Limited		Hong Kong
3M India Limited		India
3M ITALIA s.r.l.		Italy
3M Japan Limited		Japan
3M Japan Holdings G.K.		Japan


NameofCompany	Organized Under Law of
3M Japan Products Limited		Japan
3M Korea Ltd		Korea
3M Asset Management S.a.r.l.		Luxembourg
3M Global Capital S.a.r.l.		Luxembourg
3M Mexico, Sociedad Anonima de Capital Variable		Mexico
3M Asia Holding B.V.		Netherlands
3M Global Acquisitions B.V.		Netherlands
3M Holding Company B.V.		Netherlands
3M Intermediate Acquisitions B.V.		Netherlands
3M International Group B.V.		Netherlands
3M International Holding B.V.		Netherlands
3M International Investments B.V.		Netherlands
3M West Europe B.V.		Netherlands
3M Panama Pacifico S. de R.L		Panama
3M Wroclaw spolka z ograniczona odpowiedzialnoscia		Poland
3M Innovation Singapore Pte. Ltd.		Singapore
3M Singapore Pte. Ltd.		Singapore
3M Espana, S.L.		Spain
3M Svenska Aktiebolag		Sweden
3M EMEA GmbH		Switzerland
3M Taiwan Limited		Taiwan
3M Taiwan Optronics Corporation		Taiwan
Alpha Beta Global Tapes and Adhesives Co., Ltd.		Taiwan
3M Thailand Limited		Thailand
3M UK Holdings Limited		United Kingdom
3M United Kingdom Public Limited Company		United Kingdom
Capital Safety Acquisitions Limited		United Kingdom
Scott Health & Safety Limited		United Kingdom

NOTE: Subsidiary companies excluded from the above listing, if considered in the aggregate, would not constitute a significant subsidiary.

EXHIBIT23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on FormS-8 (Registration Nos. 333-30689, 333-30691, 333-44760, 333-73192, 333-101727, 333-109282, 333-128251, 333-130150, 333-151039, 333-156626, 333-156627, 333-166908, 333-181269, 333-181270, and 333-211431) and FormS-3 (Registration Nos. 333-216219, 33-48089, 333-42660, and 333-109211) of 3M Company of our report dated February8, 2018 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Minneapolis, Minnesota

February8, 2018

EXHIBIT24

POWER OF ATTORNEY

Each of the undersigned Directors and the Principal Executive, Principal Financial and Principal Accounting Officers of 3M COMPANY, a Delaware corporation (the "Company"), hereby constitute and appoint Inge G. Thulin, Nicholas C. Gangestad, Gregg M. Larson, Ippocratis Vrohidis, Ivan K. Fong, and Matthew J. Ginter, and each of them, his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, for him or her and in his or her name, place and stead in any and all capacities, to sign one or more Annual Reports for the Company's fiscal year ended December 31, 2017, on Form 10-K under the Securities Exchange Act of 1934, as amended, any amendments thereto, and all additional amendments thereto, each in such form as they or any one of them may approve, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done so that such Annual Report or Annual Reports shall comply with the Securities Exchange Act of 1934, as amended, and the applicable Rules and Regulations adopted or issued pursuant thereto, as fully and to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done by virtue hereof.

The undersigned have signed this Power of Attorney this 6th day of February2018.


/s/ Inge G. Thulin		/s/ Nicholas C. Gangestad
Inge G. Thulin, Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer and Director)		Nicholas C. Gangestad, Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ Sondra L. Barbour		/s/ Ippocratis Vrohidis
Sondra L. Barbour, Director		Ippocratis Vrohidis, Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)

/s/ Thomas K. Brown		/s/ Amy E. Hood
Thomas K. Brown, Director		Amy E. Hood, Director

/s/ Vance D. Coffman		/s/ Muhtar Kent
Vance D. Coffman, Director		Muhtar Kent, Director

/s/ David B. Dillon		/s/ Edward M. Liddy
David B. Dillon, Director		Edward M. Liddy, Director

/s/ Michael L. Eskew		/s/ Gregory R. Page
Michael L. Eskew, Director		Gregory R. Page, Director

/s/ Herbert L. Henkel		/s/ Patricia A. Woertz
Herbert L. Henkel, Director		Patricia A. Woertz, Director

EXHIBIT31.1

SARBANES-OXLEY SECTION302 CERTIFICATION

I,Inge G. Thulin, certify that:

1. I have reviewed this annual report on Form10-K of 3M Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules13a-15(f)and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.


/s/ Inge G. Thulin
Inge G. Thulin
Chief Executive Officer

February8, 2018

EXHIBIT31.2

SARBANES-OXLEY SECTION302 CERTIFICATION

I, Nicholas C. Gangestad, certify that:

1. I have reviewed this annual report on Form10-K of 3M Company;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.


/s/ Nicholas C. Gangestad
Nicholas C. Gangestad
Chief Financial Officer

February8, 2018

EXHIBIT32.1

SARBANES-OXLEY SECTION906 CERTIFICATION

In connection with the Annual Report of 3M Company (the "Company") on Form10-K for the period ended December31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"),I,Inge G. Thulin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section13(a)or 15(d)of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Inge G. Thulin
Inge G. Thulin
Chief Executive Officer

February8, 2018

EXHIBIT32.2

SARBANES-OXLEY SECTION906 CERTIFICATION

In connection with the Annual Report of 3M Company (the "Company") on Form10-K for the period ended December31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"),I, Nicholas C. Gangestad, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section13(a)or 15(d)of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Nicholas C. Gangestad
Nicholas C. Gangestad
Chief Financial Officer

February8, 2018

EXHIBIT95

MINE SAFETY DISCLOSURES

For the year 2017, the Company has the following mine safety information to report in accordance with Section1503(a)of the Act, in connection with the Pittsboro, North Carolina mine, the Little Rock, Arkansas mine, the Corona, California mine, and the Wausau, Wisconsin mine (including Greystone Plant):


										Received
									Received	Noticeof
						TotalDollarValue			Noticeof	Potentialto			Aggregate
MineorOperating			Section			ofMSHA		TotalNumber	Patternof	HavePattern	LegalActions	Aggregate	LegalActions
Name/MSHA	Section104	Section	104(d)	Section	Section	Assessments		ofMining	Violations	UnderSection	Pendingasof	LegalActions	Resolved
Identification	S&SCitations	104(b)	Citationsand	110(b)(2)	107(a)	Proposed		Related	UnderSection	104(e)	LastDayof	InitiatedDuring	DuringPeriod
Number	(#)	Orders(#)	Orders(#)	Violations(#)	Orders(#)	($)		Fatalities(#)	104(e)(yes/no)	(yes/no)	Period(#)	Period(#)	(#)
3M Pittsboro ID: 3102153	-	-	-	-	-	$	-	-	No	No	-
3M Little Rock ID: 0300426	2	-	-	-	-	$	5,775	-	No	No	-
3M Corona Plant ID: 0400191	3	-	-	-	-	$	5,795	-	No	No	-
Greystone Plant ID: 4700119	2	-	-	-	-	$	2,705	-	No	No	-
Wausau Plant ID: 4702918	1	-	-	-	-	$	9,796	-	No	No	-
Total	8	-	-	-	-	$	24,071	-			-	-	-

This information is provided by RNS

The company news service from the London Stock Exchange

END

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