What is the main impact of adopting ASU No. 2017-07 for investors?

The adoption of ASU No. 2017-07 means that only the service cost component of net periodic pension and postretirement benefit cost will be included in operating expenses. Other components like interest cost and actuarial gains/losses will be reported outside of operating income. This change can affect the comparability of operating income metrics over time and requires investors to look beyond just the 'operating income' line for a full picture of benefit-related costs.

How will the business segment reporting changes affect reported results?

The changes in business segment reporting, including the consolidation of customer accounts and expansion of dual credit reporting, will alter how sales and operating income are attributed across 3M's business segments. While intended to improve alignment and reduce complexity, these adjustments will lead to a restatement of historical segment data and may change the reported performance of individual segments.

When do these reporting changes become effective?

Both the adoption of ASU No. 2017-07 and the business segment reporting changes are effective starting in the first quarter of 2018. The ASU is being applied retrospectively, meaning prior periods will be restated to reflect the new accounting treatment.

Where can I find the updated financial information reflecting these changes?

The updated information is incorporated by reference into this Form 8-K via Exhibit 99, which contains revised sections of 3M's 2017 Form 10-K, including Business, Financial Statements and Supplementary Data, and Management's Discussion and Analysis. Subsequent quarterly reports (Form 10-Q) for 2018 will also reflect these updated reporting structures.

MMM 8-K SEC Disclosure

Summary

This 8-K filing from 3M Company, filed on May 8, 2018, provides important updates to their 2017 Annual Report (Form 10-K). The primary focus is on changes to financial reporting, specifically the adoption of Accounting Standards Update (ASU) No. 2017-07, which alters how pension and postretirement benefit costs are presented in the income statement. This change will now report only the service cost component within operating expenses, with other costs being reported outside of operating income. This impacts the comparability of operating income metrics going forward. Additionally, 3M is implementing significant changes to its business segment reporting. These changes include consolidating customer account activity in international markets to reduce complexity and improve customer interaction, and centralizing certain manufacturing and supply technology platforms. These segment reporting adjustments, particularly the expansion of dual credit reporting for sales, will affect how revenue and operating income are attributed across 3M's various business segments. Investors should note that these changes are effective for periods beginning in the first quarter of 2018 and will be reflected retrospectively.

Key Highlights

1Adoption of ASU No. 2017-07, impacting pension and postretirement cost presentation by moving most costs outside of operating income.
2Effective January 1, 2018, this accounting change will be applied retrospectively.
3Changes to business segment reporting are being made to better align with markets and customers.
4Consolidation of customer account activity in international markets is expanding to improve customer interaction.
5Dual credit reporting for certain sales and operating income is being expanded and modified across business segments.
6Certain shared film manufacturing and supply technology platforms are being centralized within Corporate and Unallocated.
7These updates will be incorporated by reference into future SEC filings.

3M CO 8-K Report, Corporate Update (May 8, 2018)

Summary

Key Highlights

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