Summary
This 8-K filing by 3M Co. (MMM) on April 26, 2022, primarily serves to update its 2021 Form 10-K regarding changes in business segment reporting and non-GAAP financial measures, effective in the first quarter of 2022. These updates are important for investors to accurately assess segment performance and the impact of litigation costs. The key changes include the elimination of "dual credit" in measuring segment operating performance, meaning sales and related income will only be attributed to the primary selling segment. Additionally, litigation-related costs for respirator mask/asbestos matters will now be reported within the Safety and Industrial segment, rather than as a special item in Corporate and Unallocated. These adjustments affect the presentation of financial data for all periods presented, notably impacting 2019 results due to the litigation cost reallocation.
Key Highlights
- 1Updated business segment reporting to eliminate "dual credit" for sales and operating income, attributing them solely to the primary selling segment.
- 2Litigation-related costs for respirator mask/asbestos matters will now be included within the Safety and Industrial segment's operating performance.
- 3Previously, significant litigation costs for these matters were classified as a special item under Corporate and Unallocated.
- 4Changes to non-GAAP measures now include net costs for respirator mask/asbestos litigation and PFAS-related environmental matters within special items, broadening their scope.
- 5The scope of "special items" for non-GAAP measures has been expanded to include external legal fees and insurance recoveries for litigation matters, not just changes in accrued liabilities.
- 6These reporting changes are effective for all periods presented, starting in the first quarter of 2022.
- 7This filing incorporates updated information into the Management's Discussion and Analysis, Financial Statements, and Significant Accounting Policies sections of the 2021 10-K.