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Artificial intelligence (AI) technologies support a range of the Company’s activities, including research and development, operational processes, customer facing tools, and other business functions. The use of AI introduces risks that could adversely affect the Company’s business, results of operations, or financial condition. AI systems may produce inaccurate, biased, or incomplete outputs, which could lead to operational errors, reduced product or service quality, or unintentional impacts on business decisions. External vendors and third party AI tools may expose the Company to additional risks, including insufficient transparency into model performance, vulnerabilities in underlying technologies, or its third-party vendors may develop or incorporate artificial intelligence technology disruptions in certain business processes, services or products. The service availability. AI development and use deployment also require security, and proper governance of artificial intelligence may present risks to the Company’s business. Also, the rapidly evolving legal and regulatory environment relating to artificial intelligence, in the United States and internationally, could impact the Company’s implementation data used. Use of artificial intelligence technology, and increase compliance costs and AI tools, including third party platforms, increases the risk of non-compliance. unauthorized disclosure, loss, or misuse of confidential, personal, or commercially sensitive information. In addition, there is a risk that employees or contractors could inadvertently input confidential company information or third party proprietary data into AI systems, including systems not designed for secure handling of such information. These actions could result in violations of contractual obligations, data protection requirements, or intellectual property rights, and could expose the Company to legal, regulatory, or reputational harm. Emerging and evolving regulations related to AI use, transparency, safety, and accountability may require additional investment, changes to existing processes, or limitations on the development and application of these technologies. Rapid advances in AI may also create competitive pressures or require ongoing investment to maintain effectiveness, and failures to manage, govern, or deploy AI responsibly could impair the Company’s ability to achieve expected efficiencies or strategic objectives. While the Company will seek to develop and use artificial intelligence responsibly, and will attempt to identify and mitigate ethical, privacy, legal or other issues presented by its use, there can be no assurance that the Company will be fully successful in doing so, and may be subject to data breaches, allegations of unauthorized access to, or use of, third party data, information, or intellectual property rights, or other risks, which may lead to financial losses, legal liability, regulatory scrutiny and reputational damage.

If the court approves the New Jersey Settlement and all conditions are met, 3M will pay $10.5 billion the State up to $12.5 billion in total to resolve the claims released by the PWS Settlement. $450 million. 3M recorded a pre-tax charge of $10.3 billion $281 million in the second quarter of 2023. 2025 related to the New Jersey Settlement. The charge reflected the present value (discounted of the $400 million amount 3M expects to pay, discounted at an estimated 5.2% 5.0% blended interest rate at time of proposed settlement) settlement. The New Jersey Settlement includes payments with a present value of $207 million for Chambers Works and other elements of the expected $12.5 billion nominal settlement beginning in 2026 over 8 years and payments with a present value of 3M’s payments under $74 million for existing and future PFAS-related claims by the PWS Settlement. The PWS Settlement, as amended to include payments to certain other water providers, calls for 3M to make payments from 2024 State of New Jersey starting in 2030 and running through 2036. 2050. The actual amounts amount that 3M will pay will be determined in part by which class members that do not have how much 3M is ultimately obligated to pay under the PWS Settlement, as discussed elsewhere in this Note 17. 3M may also receive certain credits towards its payment obligations under the New Jersey Settlement based on other contingencies. The Court held a positive test result for hearing on approval of the presence settlement on January 7, 2026. The Court will determine if further proceedings are necessary following the submission of PFAS in their drinking water (as defined certain additional information to the Court by the PWS Settlement) as of the date of the PWS Settlement and those that receive such a test result by the end of 2025. State.

Selling, General and Administrative Expenses: SG&A, SG&A measured as a percent of sales, decreased sales: Decreases in 2025 were primarily impacted by lower YoY restructuring charges, ongoing cost discipline and productivity, and benefits from insurance recoveries in 2025. These were partially offset by net costs for significant litigation impacting operating income from the 2025 PFAS-related New Jersey Settlement. Additionally, in 2025, SG&A was impacted by the transition service agreement reimbursement, and cost dis-synergies (from the exit of PFAS manufacturing and 2024 when compared to 2023 and increased in 2023 when compared to 2022. spin of Solventum). Decreases in 2024 were primarily impacted by a $10.3 billion pre-tax charge related to the PWS Settlement and the $4.2 billion pre-tax charge related to the CAE Settlement in the second and third quarters of 2023 respectively (both discussed in Note 19). SG&A in 2024 was also impacted driven by lower year-on-year restructuring charges. SG&A in 2023 was also impacted by restructuring charges (see Note 6), and continued investment in key growth initiatives. These impacts were partially offset by 2022 YoY net costs for significant litigation to address Combat Arms Earplugs litigation matters (for which a pre-tax charge of approximately $1.2 billion was reflected in 2022, discussed in Note 19), certain impairment costs related to exiting PFAS manufacturing, costs related to exiting Russia, divestiture-related and restructuring charges (see Note 6), restructuring benefits and ongoing general 3M cost management. compared to 2023. See also Certain Expenses Impacting Multiple Line Items within Results of Operations subsection further below.

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. 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 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 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 liability, based upon on the best information available in under 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.