Document Zn4x9J5ONvmGD5dQbqaDn3jj0

se of Cotes. Table of Contents UUNNIITTEEDD SSTTAATTEESS SSEECCUURRIITTIIEESS AANNDDWashEEinXgXtoCCn,HHD.CAA: N0N5G1G9EE CCOOMMMMISISSSIIOONN Washington, D.C. 20549 FFOORRMM 1100--KK 1 ANNUAL REPORT PURSUANT TOSECTION 13 OR 156) OF THE. [] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Forthefact yarendedDecember31, 2016 For the fiscal year ended December 31, 2016 Commision Ble number 13285 Commission f'de number 1-3285 33MM CCOOMMPPAANNYY Site opersin: Delaware LRS. Employer enifcaioNno. 1.047775 State of Incorporation: Delaware I.R.S. Employer Identification No. Princip excutive offices: 3MCenter, Paul inact S41 Principal executive offices: 3M Center, St. Paul, Minnesota 55144 "Tkphons ber. (51) 3510 Telephone number: (651) 733-1110 41-0417775 SECURITIES REGISTERED PURSUANT TO SECTION 136) OF THEACT: SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Titeofcate `matic sre Title of each class Name of each exchange on which registered Commo isk a Vols STFS oSg ockEgo e oe Common Stock, Par Value $.01 Per Share EUR 00 ots os 018 NoGwoTsoniSaintEEdonmcne EUR 500 Million Notes due 2018 New York Stock Exchange, Inc. Chicago Stock Exchange, Inc. New York Stock Exchange, Inc. EUR 750 Million Notes due 2026 New York Stock Exchange, Inc. EUR 650 Million Notes due 2020 New York Stock Exchange, Inc. EUR 600 Million Notes due 2023 New York Stock Exchange, Inc. EUR 500 Million Notes due 2030 New York Stock Exchange, Inc. Note: The commonstock fh Rstrnt i ak traded nhs SW Sis Echangs Note: The common stock of the Registrant is also traded on the SWX Swiss Exchange. Securinreitaredprose sen 125 of te At Nowe Securities registered pursuant to section 12(g) ofthe Act: None Itbyheeck mark hs Regist wll on sono sr, a eid in Rul 405of the Secs Act. Vex 8 No Indicate by check mark ifthe Registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. Yes [] No o Iteby heck rk fh Regist ot oidtfle ports panttoSto 1 rSto 150) th Indicate by check mark ifthe Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the At ve DO No 8 Act. Yes [] No [] isteby check rk whee te Registrant (1)hs ld ll ors quire be fled by Section 130 1508) fhe Scie Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Aco1934 deg spring 12 othe or for horeprod hot he Rr wa rir ol uh spre and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), aaad [Ee -- (2) has been subject to such filing requirements for the past 90 days. Yes [] No [] Iieby heck mark whete gta bas sbi ctoicly andpost ons opts Websi, fs, every Indicate by check mark whether the registrant has submitted electronically aaad posted on its corporate Web site, if any, every Koran Do Fil regio bit nd posed prs 1 le 405 ofRegion ST dr hs preceding 12moth Foes Interactive Data File required to be submitted and posted pursuaaat to Rule 405 of Regulation S-T during the preceding 12 months (or for such Shorprihthe erat we eid 0 utnd post such ls). Yes 1 No shorter period that the registrant was required to submit and post such files). Yes [] No [] iste by heck markifisoo fdlinsg lespss oH 405ofRelation SK is not onined bri, snd wil ot Indicate by check mark if disclosure of delinquent tilers pursuant to Item 405 of Regulation S-K is not contained herein, and will not contin ots bs of Retr'Kowlade,i efit royor fomtionstents orp y refs in Fa 1athis be contained, to the best of Registraaat's knowledge, in definitive proxy or information statements incorporated by reference in Paxt III of this Form 10. o sy smfo od iFoe 10. 81 Form 10-K or may amendment to this Form 10-K. [] isteby heck ark whet te Regist re acs lr, an css ler a mon-csslertd fer,o le Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller porting compan. So the idiot ofhrs aslrsted fleshed Ter snd "mall prin company" Re 1303 of he reporting compaaay. See the definitions of"laxge accelerated filer," "accelerated filer" and "smaller reporting compaaay" in Rule 12b-2 ofthe Large secede 8) Exchmage Act. Large accelerated filer [] Akotsdfir Nomad lr 0 Smaller poringcompany Accelerated filer [] Non-accelerated filer [] Smaller reporting company [] iste by heck mark wheterthe Regis shll company (1sdfnin Rule 126201 Ac) Yes No 8 Indicate by check mark whether the Registraaat is a shell company (as defined in Rule 12b-2 ofthe Act). Yes [] No [] The ast markt lsof stingstock db nfosfthe Riso, omy by freetothe cing pris and The aggregate market value of voting stock held by nonaffiliates ofthe Registrant, computed by reference to the closing price and hrs custanding. a gponiiely SIOL bila a of Jay 1. 2017 ppm SIGS 4 lif A 30, 006.4 nd shaxes outstanding, was approximately $104.2 billion as of January 31, 2017 (approximately $105.8 billion as of June 30, 2016, the last isdy ofthe Rear ot snl omit cond quan) business day of the Registrant's most recently completed second quarter). Sharesofcomes stock ousting Jay 31, 2017: $962 million Shares of common stock outstanding at January 31, 2017:596.2 million Putsof te Company's defini pony stenbeFold past 0 Regain 4A within 120dy fr Regs sal DOCUMENTS INCORPORATED BY REFERENCE Parts of the Compaaay's definitive proxy statement (to be filed pursuant to Regulation 14A within 120 days after Registraaat's fiscal Pa ems 10111213 i 14 Co yeax-end of December 31, 2016) for its annual meeting to be held on May 9, 2017, are incorporated by reference in this Form 10-K in response to Part III, Items 10, 11, 12, 13 and 14. 22775500..00000011 Exhibit 22775500 TabeofComets Table of Contents 33MMFOCCROoMMP1pA0NKyY For the Year FEOndReMd D1e0-cKembe31r, 2016 PPfiulirunsgu)r.aTnhst it0osnPPaatrarttl1IVV.,,lsIeteemoms1t6o1w6,,aassssaumommaaytryotohffeFFcooFrromomr tn11h00e--sKKYpeccaoonrontitEoetnnnnettdmdlfesodioillnwoDFnwsoesc,rg,emmiinnbcc1lle0u-urdKd,3iin1nwgg,h2hhe0yy1epp6eertilhinenkdkeeddiccrsroosscss-rs-elrfeleforeeynrsceepnsruce(esiisnenrntttheehede.EEDDThGGeAARR filing). This allows users to easily locate the corresponding items sbeumfmlaerdyadofetshniesotFoirnrcmlud10e.cfelrinsgPart 11 infomation that will be summary does not include certain Part III information that will be incorporatbeyd erence rom theprystatement, which in Form 10-K, where the disclosure is fully presented. The incorporated by reference from the proxy statement, which will will be filed after this Form 10-K filing. BBejegigininninsg PPAADRRETIMLI L Busses Page 4 ITEM 1 Business 4 IUTEEMMI1AA RiRsikskFFacatctoorrss 010 IUTEEMMI1BE UnUinsrewsiolvveeddSSatlaflfCCoommmmaennstss 513 M2 ITEM 2 Posie 513 Properties WMD Legal Proclings 5 ITEM 3 Legal Proceedings 13 UEMS ITEM 4 MiMnienSeaSfaefentsyDDiivslcloossurrsess 513 PAiRTI PART II aa odie & v ITEM 5 Market for Registrant's Common Equity Related Stockholder Matters and Issuer Purchases of EmitsSuis u Equity Securities 14 UEMG SellFinDas 1 ITEM 6 Selected Financial Data 16 UEM? Musgements Disusionsnd Analysisof FinaasalCondionsndResltsofOptions n ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 17 MDA idesign 0povide a esd of 3M'sfnsncil statements with a marie from the MD&A is designed to provide a reader of 3M's financial statements with a narrative from the penpecicofmanagement. M's MDA is presented in ight sections perspective of management. 3M's MD&A is presented in eight sections: Quien un Overview 17 Eels of Opsrsions x Results of Operations 23 ParfornanssbyBusiness Segment z Performance by Business Segment 27 PorfonanssbyGeogphicArca EF Performance by Geographic Area 35 CricalAccountingExinates 5 Critical Accounting Estimates 37 NiewAAccounting Pronouncsncars w New- Accounting Pronouncements 40 a Financial Condition and Liquidity 41 EinaciolInserts 3 Financial Instruments 5O UEMZA. QumOuailinimve DiisclosvureseAboatMarnketRdisk E) ITEM 7A Quantitative and Qualitative Disclosures About Market Risk 5O MEMS FS inacil cann d Suslems enayDuty ss ITEM 8 Financial Statements and Supplementary Data 53 destoFinanilSements 5 Index to Financial Statements 53 Manspement'RespoosilsforFinancilReporing. 5 Management's Responsibility for Financial Reporting 53 fe ad 2 Management's Report on Internal Control Over Financial Reporting 53 Bsporof ndspendent Regine PublicAcsoningFrm st Report of Independent Registered Public Accounting Firm 54 `Consolidate Stentof nsoms for the earssndsdDessnber31.2016,2015ad 2014 ss Consolidated Statement of Income for the years ended December 31, 2016 2015 and 2014 55 `Consodate Sitoment of Conprshssive Income or hssearssndedDessmber 31.2016,2015 Consolidated Statement of Comprehensive Income for the years ended December 31 2016, 2015 md2014 50 and 2014 56 `ConsolePalngeShot Disember 31 201614 2015 5 Consolidated Balance Sheet at December 31 2016 and 2015 57 2 22775500..00000022 Taleo Cones. Table of Contents MEMS Finca SutemcntssndSupplementDaartya Gominust) ITEM 8 Financial Statements and Supplementary Data (continued) Consolidated Statement of Changes in Equity for the years ended December 31, 2016 2015 and 2014 Consolidated Statement of Cash Flow-s for the years ended December 31.2016.2015 and 2014 we ITEM 9 UEMOA ITEM 9A UEMOB ITEM 9B arr PART III MMIC ITEM 10 WML ITEM 11 my ITEM 12 EMIS ITEM 13 MEMS ITEM 14 PARTY. PART IV EMIS ITEM 15 NeNsottes atoCCoonnsosolliidduatteedd FinaniaSims Financial Statements Note1SignificantAcsountingPlies Note 1. Significant Accounting Policies `Note?ActionsandDesires Note 2. Acquisitions and Divestitures Note.GoodlandIngleAssets Note 3. Goodwill and Intangible Assets NotedResinsuring Actions Note 4. Restructuring Actions Note SSupssmsnil alasShst nfotion Note 5. Supplemental Balance Sheet Information Net SupplementalEsai andComprshsnsise Income Infomation Note 6. Supplemental Equity and Comprehensive Income Information Note?SupplsyntalCashFl nforntion Note 7. Supplemental Cash Flow- Information NeIncome Toes Note 8. Income Taxes Noe MarketableSees Note 9. Marketable Securities Note 10 ongTerm Dob nd ShortTer Boronings Note 10. Long-Term Debt and Short-Term Borrowings NoteL1_Pensionand PosstsmentBenefitPlans Note 11. Pension and Postretirement Benefit Plans Note 12 Daratnss Note 12. Derivatives NoeLiF ValueMossusnnts Note 13. Fair Value Measurements Note 14 Commitments ind Conngnies Note 14. Commitments and Contingencies Note15Stockcised Compton Note 15. Stock-Based Compensation Note 16 Basines Segments Note 16. Business Segments Note 17.GeographicAreas Note 17. Geographic Areas Note15QuartsDuaUnaudited) Note 18. Quarterly Data (Unaudited) ConoleandPossduss Chan~es in and Disagreements with Accountants on Accountin~ and Financial Disclosure Controls and Procedures Ohrlafomaien Other Information Dison Erosive Offsrsand Corp Goss Directors. Executive Officers and Corporate Governance EssieConpnstion Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Mater Matters ConanRstionsips sndRel Towson and Disstorndspsadsss Certain Relationships and Related Transactions. and Director Independence PAincoscounFots aind Snervigces Principal Accountin~ Fees and Services Ehibi Finn Stenent Scholes Exhibits Financial Statement Schedules WME ITEM 16 oSmum10mK ary Form 10-K Summary gene Beginning Page 58 59 @60 @60 771 775 "77 78 79 581 581 585 v87 589 0100 107107 10110 123123 127127 3129 3129 E)130 10130 150130 EY131 sl131 132 "132 132 5133 1s135 3 22775500..00000033 TaofbColnees Table of Contents Tem 1. Business Item 1. Busines s. ANNUAL 33RMEMPCCOOORMMTPPOAANNNYYFORM 10-K ANNUAL REPORT ON FORM 10-K For the Year EnPdAedRDTeIcember31, 2016 For the Year Ended December 31, 2016 PART I C33MoMmCCpoaommnpypasannyiycwkweaarsssiiynnmccbooorrplpooirrsattMeeddMMiinn.1199A22x99 suuenndddeerbethherei,alawtwhsoooeffrtthhnee"SS3tsMateeooorff DDCeoellmaapwwaaarnreeytt"oo ccioonncntltiiunnduueees o3oppMeerCarotoimonpnsasnbbyegnaunndiints11s99b00s22i. dTTihhreeics Company's ticker symbol is MMM. As used herein, the term "3M" or "Company" includes 3M Company and its subsidiaries CnolnssoitdhetecodntiexntaicndticaSteisstoemeenrt .i Hn mti5s.documentfoany rfrences ta Nok | through Noe 18, eer othe Notfeo unless the context indicates otherwise. In this document, for any references to Note 1 through Note 18, refer to the Notes to Consolidated Financial Statements in Item 8. Available Information Available Information "TiTnhheecaSSdEEiCCn mmtahaeiinnCttoaamiinpnsanayww,eebtbshsiaittteelttehhaatatccctoornnottnaaiiinncssalrrleeyppooirrtttss,hpptrrhooexxyySEaaCnn.ddTiinhnfefoorprmubmlaaittioinoassntaebtemmetennt,sa,nysanndddocooattmhheerartiisnnffhoorrmtmaatttiioonnCrroermgpadraidninnyggFiissluseuseesir,ts,h the iSSSneEEccCCluurdiaattitnihhegsittptpnh::e/d/wwCEwoxmwcshp.saaenncgy.geg, ootCh.voa.mtTTmfhihileeessCCeioloeonmcnntprp(oaaSnnnEiyycCaf)lliellyuessnwadaninetnhnhuutahelleSrpSeeocpEruoCrtri.stts,Ti,ehqqseuuEaapxrrutctebhrellairycngcreeaeppnAosocrtbt,st,oafiprnroo1as9xny3yy4ssd(toaEtcexeucmmhmeaennnetgstesnantAnhdcda)tto.tthhhTeeehrrCeddoopomuccbpulamuincmeynmetfasinlywewtisrittswehhaidttthhhseetnhde ccISoDoeCppc.yyura2ait0niy8ey4s9mta.naetdTeihrEieaxllpcsuhbttahlhniatgctettmhhCaeeoyCCmooommbmtpiapsaisanninoyyinnflf(ioSlserEsmCaiwt)tiituohhnndhtoheener ttSShhEEeCCoSpaaeettcruttahrhtieeitioSeSnsEEoCECf'x'tsschhePPauuPnbbulglbiielcciAcRRceeRtffeeeofrrfeeern1ne9ccn3eec4eRR(ooREoooxmmcohmaaattnbg11yc00ea00lAlFFcintSS)g.tcrTettehh,tee, public may read and NSEEC aWta1s-i8n0g0i-nSE,C- N.E., Washington, 030,D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC- 0330. 5M also makes avaiable fsof harethough ts website (ip incstos 3 com) heCompany's Awl Rept Form 10K, 3M also makes available free of charge through its website (http://investors.3M.com) the Company's Annual Report on Form 10-K, QuarryReportson Form 10-Q, Curent ReponrFotrsm -K, and, applicable,amendomtheosenretporsts led or fished Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished uruant 0 he Exchange Ac 3 soo a resonsbly racisble alle the Company lsc les sich materil with, or pursuant to the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or miss it 0, the SEC. furnishes it to, the SEC. Generst General C35oMMrei,iss FadildvicevrtesrrisifofiiieedadcntesdeccmhEnoolnlooggyeyaccdroommCppogaannnsyyyumwwe.iirlth,h a3ggMllooibbsaalalmpporenesgentsche iilnneathdheiengffoomlllloaowwniinnuggfbbuuassiicnneetsossfsueepss:rr:oedIdnuurdcstutsssrtirfaioalrl;;mSSaanfyfetyofantnhddeGGmrraoarppkihceicstss; HHeveeaetlsthh. Care; Electronics and Energy; and Consumer. 3M is among the leading manufacturers of products for many Mproosdtuc3tMs mparnoudfuccitunreodisanedesxopdebry ttishneprrtodeucchtnodleovgeilocpamlenotr,inmtaenducfoamcptaunriiensg.and marketinngd, ar shit Most 3M products involve expertise in product development, manufacturing and marketing, and are subject 0 competion of the markets to competition romit serves. from products manufactured and sold by other technologically oriented companies. aAAnttdDD$ee5cc5eemm3b9beeprrl331o1,,y22e00d116,i, ntththeeraCCtooommnpapalannyyy employed employed 91,554 91,584 people people (ll meequivalents), (full-time equivalents), with with 35745 employed 35,745 employed in the the United United Sates States and 55,839 employed internationally. Business Segments Business Segments AcAossntddieenssuccirrniibgbeeefddfioinnrtNNfooottemesps33raoanndd 11h66e,, eaefflffeeiccttgiivvneeminoefhtnheetsffibrrsuststiqgnuueaasisrrteoesfr ao2rf0o2u10n1d,6a, ttrhhkeeeCCsooammnppdasanunysyoccmhheaarnnsgg.eedd Biftusssbbiunusesisinnsesessesgssmgeegmnmetneintntfrpoeropmroartitiinonngg in tsits presen erin reflect h continuing effort to improve impactof tes chan for al the alignment of its businesses paerroiuondds mpraerskcenttsda.nd customers. Business segment information presented herein reflects the impact of these changes for all periods presented. 3C3oMMnsmmuamnaaengrae.sgietMss 'iptsscoripaertabotuiosninsnseiisnnsffisivveebgeumbesunistnisneebsrssisnssgeggmomcgnetenshts:e:rIInncddouusmsttmrriioaalnl;oSSaaffreettlyyataaennddd3GGMrraaeppchhhiicncscs:o;gHHieeeasal,ltthhbCCaarreen; EEclleeccttthrreoodnneiicvesselaaonndpdmEenEnneterrgogyyf; ndand cCiinnohnnnooosvvuaramtteiivevsree.ppr3lroM aodtdu'isucnctftgissvteaaonnbFddussssieenrrevvisbicscueessssiegnaamennsddenpsptrersoogvvbmiireddinniitngnsggtfoafonogdrecteplhfeeifrirceciineoonmttnmshshoaainnriionmnrgarojoefolfbabtuoeusgdsiirnn3aeeMspssshtreireecssshoonauuorrrlccoseegssia.eseFF,iinnpeaarnnnohcvcaiiinaadlcleidininngiffotohrrtmehmeaadttNeiiovoonenealsoannpdtdmo oeCtntohhtnersoroflidated Fincil Sutoments. disclosures relating to 3M's business segments and operations in major geographic areas are provided in the Notes to Consolidated Financial Statements. II(nOsdFtuMrst)iriaaanlBdBuuasstiionnmeeosstssi::vTTehhaeefIIcnnmddumsrutkrsieatltss(eeaggsmmoeenbntotdssyeerrsvvheoespsasbbarroodaadderraan)ga,eoconfefcmmtagrraokrkneeeittcss,,, sasuphclhsaansscaa.uupttooammpoeosrtiiavveedoorrpigrgiiinnntaailnlgee.qquupiaipcpmkmaeegnnittngmm.aafonofuidfaccautnurdreerr abb(OedevvvEeaeM rnraac)ggeeead,,nedaannradduatcconoomnn,ssottrtruisuvcecteatilioaoanfnn.tte. srIImnsndpaeurdcksiteeartlisat(lyauppmtrraoootddeburuocicdattylssssii.nhnscocelpulpsaduredaanttadaipporesnes,tn,aiadl)ww,pieirddlieeeiccvtvraaaortrniiieeiotctynyso,opafrfpoocdpouslciaeattnsed,dc,e,c,nnlpoooansnpu--wrewerooavtvneeednnmpanrnsidndftbibonoognn,pddpeeeraddccksnabashgrlraianshiigyvv,geeifssoe,noaaedddhhaeenssidivveess,, apdrovdaunccee,d acceoruasmtiiccs, emsproducts, andcomponcats ad products hat ae wid in sealants, specialty materials, separation and purification products, closure systems for personal hygiene products, acoustic systems products, and components and products that are used in 4 22775500..00000044 TaofbColnees Table of Contents tothhfeeprmmeacaninsuuifsoacncutgurrri,en,drrieenppgastireacahnnnddolmmoaagiyinnttseeennraavnniccnegeocofufsaaututotomomemortositvinvete,,hmmsaarrrciinneoe,,fasiiarrcrcrr-aaoftt-aagnniddnssdpcespcriiesaclhityysivvoeenhhipiccpllleeiss..ca33tMMioiinssaailnlssoinaseltedaiidlinn,ggaggwllooombboaaltl isseuu,ppplieer iaoanifrrdcprrrgaeaafc,tisaaisnnooddnacc,guriititnnninddgguinstgotolrotseil.cs,.hen33loMMelcdotdegrevoyvneiselceloorspvpsinsnadganndcedulppstrreooomddmuueccrnesedssiunaasddtthvvieaasnn.accreeeIaddn of hard-to-grind precision applications in industrial, automotive, eAcuhgnuisctal20c1e5r,am3iMcsafcoqudireemdasndeitnsgaanpdplilcbatiilonisnstshceisatetdoimth, technical ceramics for demanding applications in the automotive, ol. oil PoaPilnnotdslyhogeparofsre,eesInosnleiatemrcr,annitcanstodi,onunslita.nrlid,aulIIs,nnt.ecrsli.e']scStaSernopednapriascarpsatetciaiioonanndlsstdyM eesfdeeedngimisaeebnbitanusdss.iuinsentrssiste,.hsea. lIlrenesaaAtddiiuqnnguggapurrpsttoreov2rvi0oid1fde5e2r,r03o1ofM 6f,mmai3icccq1oruopsiporooerldrodouautssshsmemeetsaemmsabnerbdraaonlnieaefbsssialaipnntriddeessmmsauosrdosiouscledeidastfoefuodrlrlwlfai-elitttehraiatoisoenn diffnoiatosmhceuaalsddifhhseeesfssiciuvvireeentsschbbeeiuusrns,siiiNnnneoedsstu,ses,t2ara)inn.addl in Ostober 2016 od heasst ofits adhesive-backed temporary protective and specialty segments. In the first quarter of 2016, 3M sold the assets of its in October 2016 sold the assets of its adhesive-backed temporary protective lmsbusines (oth pressurized polyurethane films business (both discussed further in Note 2). Msjorindustria products include in, polystr foi snd spel industri aps nd adsives: ScotchMaskingTope Major industrial products include vinyl, polyester, foil and specialty industrial tapes and adhesives; Scotch Masking Tape, Scotch: Filament Tape nd SecehPackaging Tape: packing xuipment; SMI VHITM ending Tapes: conducive, low Scotch Filament Tape and Scotch Packaging Tape; packaging equipment; 3MTM VHBTM Bonding Tapes; conductive, low Surface ery. slants, hot mel, ray snd srvctusl adhesives eclosble stn abel marafordursblgods: sone, surface energy, sealants, hot melt, spray and structural adhesives; reclosable fasteners; label materials for durable goods; coated, oan and microsrctred surface nshing ad riding sbrsives for the ndustial marke, comprehensive lnof lation nonwoven and microstrnctured surface finishing and grinding abrasives for the industrial market; a comprehensive line of filtration products foth separation lrficton andpariatonof ud snd ase: and uorclsomer for sls, tubes and gaskets products for the separation, clarification and purification of fluids and gases; and fluoroelastomers for seals, tubes and gaskets in cagines engines. M MInaaujjloosrrtiiinondnduuassnttrdriiacalopprmropododunuccctatsstusufssoedrdcniantbthihneenttrroaannssspprooerrdttaaacttitioiononniiannnddduusssttrrtyy licnclluedceoniinvnsesurlltaaettriioo,nnfccuoonmmcpipooonnnelennattnssd,dcinelccloiurdnsingg TTghhriinanspushlilactsestT:sMrTM iAAccooounussttiirccesistant Insulation and components for cabin noise reduction and catalytic converters; functional and decorative graphics; abrasion-resistant clarmp:etiandghecsoisvteesd;, sneaolnawntosv.emnassknidnmgicarpoessr.ucttucrnerdsiasnhdianpgessdorriatdtianchgingbrnaavletsss,rctiumr,smaodlhdeisnigvse,ssenrdoithepranseplescinaldty films; adhesives; sealants; masking tapes; fasteners and tapes for attaching nameplates, trim, moldings, interior panels and carpeting; coated, nonwoven and microstrnctured finishing and grinding abrasives; structural adhesives; and other specialty ptoeliihles., wIanxaedsdaitnidon,h3eM pprroodvuictdse.s pin fishingand detailing prodaces nclding 3 complete systofleaner, dresings. materials. In addition, 3M provides paint finishing and detailing products, including a complete system of cleaners, dressings, polishes, waxes and other products. Safes andGraphis Business: The Safty and Graphic segment serv rod raofnmakgeteh increase the safe, security Safety and Graphics Business: The Safety and Graphics segment serves a broad range of markets that increase the safety, security nd prodctiiy fpele cits and systems. Majo producoffing include persons] protctionprodscts, sch resp. and productivity of people, facilities and systems. Major product offerings include personal protection products, such as respiratory, Tring, ee and fl pocction eqipment rfl safety and scuriy procs, including bordersnd iil security soltions: hearing, eye and fall protection equipment; traffic safety and security products, including border and civil security solutions; commercial solutons,nclding commerilarpbic beeing ad ystems, architectural desig solutionsfo surfaces nd lenin commercial solutions, including commercial graphics sheeting and systems, architectural design solutions for surfaces, and cleaning and proection productsfo commercial csabisments: androfing rans for asphalt shingles In August 2015, 3M sci and protection products for commercial establishments; and roofing granules for asphalt shingles. In August 2015, 3M acquired Capt Safety Group SAR... ding global proviodfelrl prosetin cpipmen. Capital Safety Group S.A.R.L., a leading global provider of fall protection equipment. "eTTqhhuiiisspmsseeenggtmm,eennptte''srspporrnooadduupccrttosstiicnntccillvuueddeeeqppueeirrpssmooennnastl,pprhrooettaecdcttiaioonnnd ppfraroocdeduupccrttsss,e,stsciuochnh,asbcocdeeyrtapsirnotddeiicsstppiooossnaa,bbblleeeaaarninnddgrrpewursssaelbctleeiorrneessappinirrdaattpoorrrsos,,tclfaillvl epprreooytteeewcctetiiaoornn, elqausipremfleenctti,vpeermsaotnearliaplrsotheacttivaereeqwiudipemlyenust,ehdeoand aapnpdarfealc,efporoottweecatiroann, dboadcyespsroortieectsioenn,hhaenacriinngg visibility inloight svions protection and protective eyewear, plus reflective materials that are widely used on apparel, footwear and accessories, enhancing visibility in low-light situations. In llc safety and scart, 3M provides reflcive shoeing usod highway signs hil sense lates, constuction work rome In traffic safety and security, 3M provides reflective sheeting used on highway signs, vehicle license plates, construction work-zone devices, rick and fhe vile, ls providespaver making syste, i addition 1 lca surveillance products, 4nd devices, trucks and other vehicles, and also provides pavement marking systems, in addition to electronic surveillance products, and lm ht protect agin counting. Trae safetyandseri ls provides ing, pl, foc nd ibiometric ses for films that protect against counterfeiting. Traffic safety and security also provides finger, palm, face and iris biometric systems for ovement, lav enforcement agencies, and commercial enterprises, in adiion oremotepeope-mnitorng echnlogis usd for governments, law- enforcement agencies, and commercial enterprises, in addition to remote people-monitoring technologies used for Offndermonitoring application. In December2015, 3M sod Fash Fabrica, a French manufacoftiusarses pats and offender-monitoring applications. In December 2015, 3M sold Faab Fabricauto, a French manufacturer of license plates and Sianagescuions, ad nthe rt quaroft2e01r5 completed th se fs ibrry systems busines bos disused thr in Note signage solutions, and in the first quarter of 2016 completed the sale of its library systems business (both discussed further in Note 22). M Minatajejrooirrorccoosmmfmamecreecri.caialOl trghraaeppishceicsgsmpeprnrootddupuctcsrtsoiinnscclluunddceelfFidlimems,p,liilnnkk-scs,,oanatnnoddlrrelslsoarttbeeeddntppsrr:ooddnuuaccrttvssouvvsieednd ttboo pprrrooddauuccsee ggirraapplhhiiccssfoffroorrvoveoherihcimclleness,i, ssciiggnnnsasananncndded Commercial sng: floor mating. wd natu and clor-couted mineral rales interior surfaces. Other segment products include spill-control sorbents; nonwoven faobrrsapshivaelmt ashteinrigalless.for floor maintenance and commercial cleaning; floor matting; aaad natural and color-coated mineral granules for asphalt shingles. HaHneedaalotlrhthCCoaadrroeentBBiuucsspinnreeassc:st:iTTohnheeerHH,eeabaleltsthlhtChCaairrneefossmeggamtmeienontnt ssseetrrevveemsssmm, saarnkedestfsotthdhaattmninuaclducdeeimmeenddiicaaallndccllienseitcissngaa.nnddPrhBoodosupcsittasaallsn,dsphehararvrmmiacacecusetupctrilcoasvli,sd,edddeen1atall tahihnreednssseodraaetnnrhddmoadoolotbhndeetrircrmmpadraraerkckleteiitttvssieoiirnnneccsrllsiuu,ddmheesemma,eletdhdoiicricnalafllosaraamnnreddastssioouulrnruggtiisiccyoaaslnltsessmduueppsnl,piilaacinelssd,,nfssodkioinndohrhmteehaaaolnldttuohhfnaaatncintdcdurpniinrneofgcedtcuaticniootdnnst.eppsarrteeitnvvegehn.nttPiiiorononnfdoppurrrcmootaddstuuiacconttnsds,,ssyniensrathveatimclsaie,tsoiopannrdoaavnnfidddoeodd to transdermal drug delivery systems, oral care solutions (dental and orthodontic products), health information systems, and food NsaefwetyYoprrokducTtrse.oISnoAluptiion2s01L4L,C3isMppruorvcihadseerd alo hectsandinigy introefTsretoSlaionsLLC, haduarered i Troy safety products. In April 2014, 3M purchased all of the outstanding equity interests of Treo Solutions LLC, headquartered in Troy, New- York. Treo Solutions LLC is a provider s 22775500..00000055 Table of Cons. Table of Contents oFdotaanalytics and business nelgence oes payers ad providers. Tn March 2015, 3M seid Ivera Medicl Corp. a of data analytics and business intelligence to healthcare payers and providers. In March 2015, 3M acquired Ivera Medical Corp., a manufactofuerleir car products that disnfct nd roc devies used forces nto patent' lodsteam. manufacturer of health care products that disinfect and protect devices used for access into a patient's bloodstream. ITmnn ttthhehe mm,eaddlicceatl oaanndddesssurarggniidccaslltaahrcoessa,cs,o33pMsM.iisnsaanssfupptpolpienroopffrmmeeceaddtiiiccoaanl,ttaappeess,mddarreresskssieinntggasss,,vawwrooiuutnynddofcllososirucreealpprroodddruaucpctestss,,,mooarrstthhkoosppeeaddniidcc cpcaarsesttpiisnnggaswell 5 Smspetrearortiiedllruiiizczaaatltsti,oionnencleslacussdtsraeuornddancenosceeandeeedqqluuisivitppeeetrmhmyeoenssntcytosaapntneddes,.ppIaanstiiceinnnhtftewwscstaairomrmmntiiepnnrrggedvss-eoonldluutoittoiisonon,nnss3aMddeeessmiig,gannreketddertats0nosapdpverrereavvmrieaeenlnttytkhhoiyyfppsooautttrhhgceeircrhmamliiaaadnriiandpssesuust,rrggmeiicdcaalslkcsssmetpattineinndnggnpsst.resOOp.tsthh, eOearrssweclalraes products include drug delivery systems, such as metered-dose inhalers, transdermal skin patches and related components. Oral care Sprooufteosinonnsatdooothrweshtoernatsi,ve,pardhoespivye,lsanhd iornthoadodntpieclaHpiincepsro,ductsw,elclradoiwg,itiamlprweossrikofnlomwatserioalsl, purteotvtcrniainvsoefosnrlmadnitt,ions! solutions include restoratives, adhesives, finishing and polishing products, crowns, impression materials, preventive sealants, apimmnrpodprfreedesnsstsiiiooocnnnlaalasasnntioddfoisacthantlaiwloonoh,giteppanrrnoeodrccseep,ssrsapoeervso.i.pdIIhennsylhbraeeexlailalstttheadniindcnffoooonrrrsmtmuhaalottidiinooognnntssiscyeisratmpvepmsils,isa,nS33cMMeMs,pddraeeosvvveewilldoeoeplplsssafansonoddddigmmsiaataarfrlkekteweyttosspcrrckooofmdlmpuocowpttusesteotrhlusasttooifomftwnawaskaretroeetfrfoaoarnrssthhfeooorsasrppminittdaatlrlacccdaooistddiiioinnnggfaolr fod processoresst and data classification, tahnedmipcrorovbidioelsorgeilcaatledqucaolnitsyulotifnFgosoedrvices. 3M provides food safety products that make it faster and easier for food processors to test the microbiological quality of food. Elecronics anEnergy Busines: The leonand Ener sent ses customers lcsand cng markets, Electronics andEnergy Business: The Electronics and Energy segment serves customers in electronics and energy markets, incldin soltion hat improve the dependably, cost-lTcivencs, nd performanceoflca vies: electrical prodcts, including solutions that improve the dependability, cost-effectiveness, and performance of electronic devices; electrical products, including fastens protection lecommunicatons networks, ad power sncrtion and distibuton, including infrastructure protection; telecommunications networks, and power generation and distribution. "TmTahhriisksessteesgaemmgemenen'nt'tsesetolrefcottnrhoeineilcsos cssolaluuttteioonndsissnipnclchalyuuddieendtuhhsetedriyd.sisppllaayypmmraoatvtrieadrileasslsdiaasnntddisnsytysspttreeommdusscbbtausssfiinonessisv,,ewwimhacicrhhkepptrroosvvmiiddteesssff,iilmilssnthchtadtissenervvpeeronmdueumcrteosrouousrs 1am1)u)atLLrokCCmeDaDtscsiceovogemmmdpipestunpettlesasryosmmf.atonhTinethitoeosrlrsessce2t2rg))omLnLeiCnCctDIdaiteslepllsleeavpyiirssoiinovoidnndussesst33r))dye.hhsaa3innMdodhphpeerllaoddnvdddideeoevvstiiccdcesisstssiuunccchcht opaamrsopccdueeutllceulutrlslaasfrrocphrrhefaioevnnefesismlneaarnrdskdaetttatbsaealegdtmbsr4ee4)nls)tnnso,eodtiitenestbbcpolloousaokdykingPPghCCpstsroaacndnoddunc5)tts)ofor: prappiurevitrvoafamcocyryo,m,taiaavnnnecddedgliislapadlrraesyrrsaee.ndddTuuachcbtitrsiioaosnsneignnvmedeesesdn.sut.saM Melsdoaojnrtohperrmocelvleaeidcctetnrsroondunieicsfssktppoarrpoodcsaounufcdtctcssnouoaamltlspersobaotiennoucklhducidoeepmp,ppeauacctnkkedraaggsoicirnrngeceaoannondfdiinliitngentrtelsrrcctchootamnotnnenaecdcctdtsiirooennnssddddeevilvsiibpcclreeascsy.;tlhhiiigiogghghhtccoomnptruotle, r performance fluids and abrasives used in the manufacture of computer chips, and for cooling electronics and lubricating computer praorvdidiikngdmiovrese:coannndeicthiotniperJaetsusrpeaca,ndandidspalraysteapdos. Fienikjbeltepiirriscawstcleesct.rocnlilepphoanceskasngdialnngdeicnttercdonenvecit.ionThticshnolos. hard disk drives; and high-temperature and display tapes. Flexible circuits use electronic packaging and interconnection technology, providing more connections in less space, and 2S0c1a6m,en3tMlsooldintcluede aosuoecfhstss tcaetmhepabactttesr,y segment also includes touch systems products, are used in ink-jet printer cartridges, cell phones and electronic devices. eisnchlnuodlionggytoouchwsreeen, obuuscihnmeosn(iGtsorcsussendd foucrhthseeirnnsNorotcom2)p.onents including touch screens, touch monitors, and touch sensor components. In December This In December 2016, 3M sold the assets of its cathode battery technology out-licensing business (discussed further in Note 2). "This segment' ener solutionsinclude lets products including frst protein, elecommunicatons, and renewable This segment's energy solutions include electrical products, including infrastructure protection, telecommunications, and renewable ener. Thissegment serves the work's clea nd lecommunicatons markets ncloding clocticl ules, dectricl energy. This segment serves the world's electrical and telecommunications markets, including electrical utilities, electrical `consmtion, maintenance andrepair, orginal equipment masuacturrs OEM) elommunicatcinorn of,outside plant construction, maintenance and repair, original equipment manufacturers (OEM), telecommunications central office, outside plant and ntrpie, ss wll aos, mir, automate and medical markets, with proces hat bl h ficient rmsmision and enterprise, as well as aerospace, military, automotive and medical markets, with products that enable the efficient transmission of ectrial power and speedthedelivery of infomation. Products ni segment nudepressure env tapes and resis, of electrical power and speed the delivery of information. Products in this segment include pressure sensitive tapes and resins, ectical sation, wide aryof bop and coper-based tlcommuications ystems forrapiddeploymentof ved nd electrical insulation, a wide array of fiber-optic and copper-based telecommunications systems for rapid deployment of fixed and Wirelessnetworks, aswel athe MP AluminumConductor Composite eiforced (ACCR) cetrical powercable that nesses wireless networks, as well as the 3MTM Aluminum Conductor Composite Reinforced (ACCR) electrical power cable that increases ranamision capacity forexitingpower ins Tis scmtals incldes renewable carey compo solutions o thsola nd transmission capacity for existing power lines. This segment also includes renewable energy component solutions for the solar and ind power ndusires, a well a frsirctue products solations hat provide municialiboetsh precio snd deecion wind power industries, as well as infrastructure products solutions that provide municipalities both protection and detection solutionsfor letrcal, of natural gas, water, bar and ter nascar assets. solutions for electrical, oil, natural gas, water, rebar and other infrastructure assets. Consumer Business: The Cosersamenserves markethast nce consumer rl, ofc eal, offic businesstobasins, Consumer Business: The Consumer segment serves markets that include consumer retail, office retail, office business to business, home improvement,drug and pharmacy ea, and oer market. Productsi this segment neeoffice supply product, home improvement, drug and pharmacy retail, and other markets. Products in this segment include office supply products, sationry products, home provementproducts (o--youre,home ar prodact, prose material products, ceri stationery products, home improvement products (do-it-yourself), home care products, protective material products, certain consumeseal personal sty products, andconsume hall cae procs consumer retail personal safety products, and consumer health care products. Major consumer products include Scotch: brand products, sch Scot MagicTM Taps,Scotch Ge Sick snd Scotch Major consumer products include Scotch brand products, such as Scotch MagicTM Tape, Scotch Glue Stick and Scotch Cuiond Mailer, Post-it Products, sucahs Post Flas, Pott Noe Pods, Post1% Label&CionvegrupTap, and Post Cushioned Mailer; Post-it Products, such as Post-it Flags, Post-it Note Pads, Post-it Labeling & Cover-up Tape, and Post15 PopupNoses and Dispensers: home provera prodicts, including srfcepreparation sd wood-Tnishing marl it Pop-up Notes and Dispensers; home improvement products, including surface-preparation and wood-finishing materials, Command Adhesive Proce snd FiltteTM Files or face snd si conditionershome care prodsct, including Scotch CommandTM Adhesive Products and FiltreteTM Filters for furnaces and air conditioners; home care products, including ScotchBriteScour Pads, Sete Scrub Sponges, Secte Miroier Cloth Brite Scour Pads, Scotch-Brite Scrub Sponges, Scotch-Brite Microfiber Cloth . 22775500..00000066 TabeofComets Table of Contents product, CeO Sponges prsetive material products,suchas SctchgardTM Fai Protectors ceri maininance re products, O-Cel-OTM Sponges; protective material products, such as ScotchgardTM Fabric Protectors; certain maintenance-free Tesirtors srs conar retail persona ay products, including ay lasses, hearing proectors, and 3M ThinsulateTM respirators; certain consumer retail personal safety products, including safety glasses, hearing protectors, and 3M ThinsulateTM Ioton which ised i jacket, pant, glove, hts adbos oep people warm: NxcareTM Adhesive Bandages nd ACEX. Insulation, which is used in jackets, pants, gloves, hats and boots to keep people warm; NexcareTM Adhesive Bandages; and ACE branded (nd relatedbrands) sat bandage, supports and thermometer produc ns. branded (and related brands) elastic bandage, supports and thermometer product lines. Distribution Distribution 3r3MeMsepprrroo,dduujccottbssbaearree, ssdooilddstttrhhbrurotouougrghsh annnuuddmmeeerrooluusss idiissnttrbibwuuittdiooennvaccrhhiaaentnyneoellfs,,riinanccdllsuuddiiinnggmaddiinrercctotlyuyntt1oieuvsseearrrsscanundnddhthtorhoeuugwgohhrlnda.urmcMrearonoaausgswewhmheeonllteessbarllesir,ns,es the lCorceoontnnagffiiliaeddsreessnno,cccjieoeabootfbifweowhrnsoh,lwodetlieshssatarlsilkebeirruls,tl,oerre desmtaaanildrerks ds,eejjatoolbebibrbasenl enrgirdsns,,saddliweissn sitidrbriebueuptvrotaoerr. sriseseatnyatnnadodtifddvtereeasadlleerssshiniiannsm33cM aoMnnytaarncindobduuittnssetdrppierrsoosiddaugurcncottuissnfditchaae1ccn0owotnnSoflfriiVyldddsee.nnMpccoeeasndidteaeivgvoeeenlmlooieppneehtddebttehhlrrioeouvugeghsh the lmoanrgkeatspsloaccieataionnd its growth with skilled marketing and sales representatives has contributed significantly to 3M's position in the marketplace and to its growth. Research and Patents Research and Patents Research ndproduct dsclopment contac important prtof S's atiand asbeen a mordrier of M'sslsand Research and product development constitutes an important part of 3M's activities and has been a major driver of 3M's sales and profit growth. Rescare, developmentand lated expenses led $1735 bilo n 2016, S1763 bila in2015and $1.70 iio profit growth. Research, development and related expenses totaled $1.735 billion in 2016, $1.763 billion in 2015 and $1.770 billion in 2014. Research nd declopment, covering basi scenic escrch andthe pplicationofsicntific advances i th development in 2014. Research and development, covering basic scientific research and the application of scientific advances in the development fnew and improved procs and tei se, oiled 1.22 bilo in 201, 51.22 bilo in 2015 and $1193 bin n 2014. of new-and improved products and their uses, totaled $1.225 billion in 2016, $1.223 billion in 2015 and $1.193 billion in 2014. Related expenses primarily inchud echnical support infmally developed patent oss, hichincludecots ndfos nerd 0 Related expenses primarily include technical support; internally developed patent costs, which include costs and fees incurred to prepare. il, secur nd maintain potas: amertzation of extemal acquiredpatents ad extemally acid in proses research prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and dexclopment; and gins oss associated wih certaincorporate approved invesiments inRAD rte vars, seh as cy and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity methodeffetsand mairments. method effects and impairments. "TheCompany'sproces aesc rund the word und various rademarks. The Company aso was, or holds ens 0 use. The Company's products are sold around the world under various trademarks. The Company also owns, or holds licenses to use, merous U.S. and Foreign pent The Company's esearch and developmentativities gmerte a dy seaofinventions ht numerous U.S. and foreign patents. The Company's research and development activities generate a steady stream of inventions that are covered by mew pans. Patents applicable 10specifproducts extendfor varyingperiodsaconding 1the deofptt are covered by new- patents. Patents applicable to specific products extend for varying periods according to the date of patent application lnogr patent ran and the eal erm of pants i he various counties wher pt protectionisbine. The application filing or patent grant and the legal term of patents in the various countries where patent protection is obtained. The acta proesion afforded by ant which can vary rom country fo county, dnd up the 5p ofan, the scopeof 5 actual protection afforded by a patent, which can vary from country to country, depends upon the type of patent, the scope of its coverage and the availof egal remedies i thecounty. coverage and the availability of legal remedies in the country. "TtTheheenCtCooommrppgaannyry bbooeeflliieeulvvaeetsspedtthhapttaitstesnpptsaetiensnstnspperroofvviieddeesaaentiim]mppooortrtthaanenttcCcooommmpppaenetiyttivaee.aadowvmhatonaltegageoe ii0nn ammnaaynnyoyfooffheiitssCbbousmsiipnnasensssyses.s. bIIunnsiggneeennesersraaslle,,gnnomosenistnisng.gllee patent or group of related patents is in itself essential to the Company as a whole or to any of the Company's business ""TEhleecitmrpoonircasnncedofEpnertgysBiunstienEeliensPcastrr"ton1.iaclnsdemE7n,erogfy hsiesgAmnenntuiss eResprorbteodn iFn o"Pnef1o0r-Km.ance by Business Segment The importance of patents in the Electronics and Energy segment is described in "Performance by Business Segment" segments. "Electronics and Energy Business" in Part II, Item 7, of this Annual Report on Form 10-K. Raw Materia Raw Materials dI1n0e22e0011r6,,stthhieeCnCoocmmprpaaeninlyyeanexdtxphepeerriieednneccreiedvdaedtseivcielnicnihinneggmicccooasslttssfffooosrrdsmmtoooscsttkrrmawna-rmmkatatt.eerrTiiahaliacatitnoegguoomrrieedssroaavnnedd ctrraaarns.spoponorr-atyattaiirooGnnofsuutelld, udrueeesllasarreggieesllyyattoonpryriiccee dfTteeeoeccodridesvttaioosnccegkksesicsnatltceergguioodrrteiieeosq.i,ulaiiannnntccidllutuitddheiisennggdfeapprleievtlrtaostrlievwouemlmcahbbteaaemssreeiicddaalmmlaf0ateteeemrdrieisasstllots,c, kmmimirnnaeeersrkasaecslstn,s,a.hmmTlyeahtiaosllvsienansntdeudarnwobldooerododpvrpepouudyllueppcabtbrai-aososnened-dqyuperiarororuedcmtuoecssntt.st.dseTT.cooretddsaatpste,eso, titnshhemiCCaobonmmylppaeannyy is is rpmperraceendeduiiifvccatitncfutguurtsruuierfenfgissochhpioeoernrrttataatqggieueossannootifhftireargws -ohmaf laalteclerrrraictawuls-slmormatattehhnreeaiaigilmmespmptaoeaccnmttteaaofenneytyxitsissuuscrctehhiansssghohoonarrattbaalggymeeassftoewwrroeoiusauellleddaibhhnalavevveeepn..rio33rdMeMuscahtaiasodsnadaverveovoqieiuddleieorddepmdmdieiessnnrruttuspp.tatiiInootdnnisgt1uiomasiiptsiocssaitbilentoof manufacturing operations through careful management aanddiicocmnmnodsiuptpylyprsiocuerscwea.ps3.M manag spend sssgony additional supply sources. 3M manages spend category pic risk of existing price risks hough negated ppl cotrcts, price raw- material inventories and development through negotiated supply contracts, price protection greens and qualification of protection agreements and commodity price swaps. Environments Law Compliance Environmental Law Compliance 3M 3iM on'ss mmaancnuoufnfatacictntuuureriimnnaggkooipnpeger.raatntiicooennsss saarreeyaaefffxtepceetneddibtbyuyrenmsaattfiiooorncnasol,,smsaptatlteeiaananddnwllciootcceaahllaenppnvlviiircrooabnalmmeeelnnttwal.l llaa3wwssiaarrcoluuonnddittnhhveeolwwvooerdlrldd.. 33eMmMehhiaassstimmaoadndee,a,catainnoddns plans to continue making, necessary expenditures for compliance with applicable laws. 3M is also involved Ceoimintm1enctasvinondmCeonnttailngmencaiers).rom pst operationast certain ses (ref1er "Envionmentsl Maters and relating to environmental matters from past operations at certain sites (refer to "Environmental Matters and Ligation"i Noe 14, in remediation actions Litigation" in Note 14, Commitments and Contingencies). 7 22775500..00000077 Table of Conny Table of Contents Environmental expenditures ein 0exisingconditionscause by past operationsthst dono ontibutto curtorfre Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future evens aeexpensed. Reserv fo lai for ntcitedremdiaion costs are recorded on a discounted bass when ley revenues are expensed. Reserves for liabilities for anticipated remediation costs are recorded on an undiscounted basis when they ar rabble nd essonsbly exible, generally no te han he completo offai studies, he Companys commit: 1 are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company's commitment to lanofsciooappnrov,al by regulon agencies. Environmental sspendiresfor cpial projhateocntrtbustfocutent or a plan of action, or approval by regulatory agencies. Environmental expenditures for capital projects that contribute to current or tre operations general rs capitalized and depreasvesheed exfimated usu vs. future operations generally are capitalized and depreciated over their estimated useful lives. eI1nx0p22e00n11d66i,,u33rMeMsFeeoxxrpperenneddmeecdddiaatbbiooouuntt $sS22c88iomminillllliioaontnfifoncogar1pc0aiptciatialslippnrroogjjeemccattssterreslcaetaeudlstteooadppbrrtysopteeetscittidnngogptehhereeantevinoivnriroohmnaemtnedtno.t.nToTthhicssoaanmmtorouiuntntet eexxccclluuurddeeessn or fre Werreaexvvspeetennenuwuedaesits,tue, rrwwehsshiiftccohhreaarnreremteeexxdppplieaaentnnsitoseendid.ma.pcCCrtaioapovpineitstmaalerleneeltaxx,tppineesngneddrtioibttbueuerxrreiesssf,tfoionrcrgveomnivranitortonesrnmsmetcneatnusatsaulelgdppAbuueryrppspoo,assseestssoohhplavevtreeatiriinonccncollsvuuedtdhreeayddt ppudnoooilltllnusuottatiionocnndonccttoohrnneibrttrmuooaltlelddtoeoexvviciiducceeirrsszeenst or future scahta such as cnwneoeawvws-iteraawnnoddnamtieeexsrnitttsritleinnargtgemsffepaanocctinilspietiliaesbnsltcycio,mnocpsatrrnopuvcsestmedeteoxnoprtnresunu,pdpcsiagctrrriuuaardbdedebesded(risonn,tthcthehoreennttnoahorianrmmmaflaoelsnctcrouesutrmrresusdeceitouonfrifebobsun,ussisrinoneljesvssees.n.ttCCsroeonfcnsoosirvkissetntreeyonntwtuwnnwiiitptshrhoatjtnhhedeecttCCshoeaormmempppaaarlnneoyysxc'ssindelipzmyhepreashxsapiseisssaitoodnn 0 environmental responsibility, capital expenditures (other than for remediation projects) for known projects are presently expected mianbiomuizteSwTaOstmeilalniodnroevdeurcteheemnieixotntsw.o years for newor expanded programs 0 bid facoifmoldiefy manufacturing processes be about $70 million over the next two years for new- or expanded programs to build facilities or modify manufacturing processes 0to to minimize waste and reduce emissions. Whitth Companycannot predict with crs he futurcosoftsusch cleanup sii, cai expendituresororigcosts While the Company cannot predict with certainty the future costs of such cleanup activities, capital expenditures or operating costs forcmiroomental compliance, th Company doss not elie hey ilha teil effetns capital expenditures, camings for environmental compliance, the Company does not believe they will have a material effect on its capital expenditures, earnings or compen postion or competitive position. Executive Officers: Executive Officers Following i Fpooslilotiwoinnsgthiseya st ofthe hav held list of the deeuxxrceicenguuttitivhve oopfaffisceffrisveeoofrfy3e3aMsMr,s,. aaNnnoddttfhheaeiiiralaggere,l, apptrrieeossneensntht ippsooessxiiittsiiotonn, tmthohenyygeaaarnryceloefectdehde tfcooxttuhheteiivr epprraeefsseeinnettrpposossiiattimiooenndan,nddnotorhtheiserr positions they have held during the past five years. No family relationships exist among any of the hreres sanytuendtidhsclaobsleed bserlaonwgaeomenfthoerduntdoerfthnedi1n0g-Kpulrisunagnt(Foebwuhiacrhy,ny20p1er7son wa elcid 4 there any undisclosed arrangement or understanding pursuant to which any person was selected as an oli. executive an officer. This informatio i officers named, nor This information is is presented in the table below-as of the date of the 10-K filing (February 9, 2017). MmTe T Name Inge G. Thulin Jones Bn James L. Bauman Jt.Btn Julie L. Bushman Soup Diplo Joaquin Delgado on Fog Ivan K. Fong NeobsCGago Nicolas C. Gangestad As heb Age TiFe aconadneBOneo e 63 Present Position Chairman of the Board, President and Chief" Executive Officer 9 EVit ePs iBdoee FGeota 57 Executive Vice President, Electronics and Energy Business Group SS SevePoidetBiss 55 Senior Vice President, Business mormon adres Transformation and Information TeTechnology 55 E Veis nv iGlokoCommer 56 Executive Vice President, Consumer Business Group 5 SabeViehLoeinibMeiln 55 Senior Vice President, Legal Aff'airs lt and General Counsel 2 SeVisPekutasd 52 Senior Vice President and Chief Founttr Financial Officer Year Elected to rent Present Pam loleddPebtue isgnane Position BI a edCh Tsar.013 2012 2015 aSnSnreViiVPsroisnBtasnidnCsoTntrOriimnsgO,ffs, 2015 2003 SFVoAEpmSraeiVri ouVeirBaPvt1ono5dlG,yeenAcdSaPfmctayisg,n,d2G0Or2a0pp4his1c2,- 2013 016 FdaSisitnioVVniiSsaPPvrsiodsBe,,iosothn,MCSoerBtEisnodsGrp 2016 M12 Ge osFolinCooz.um2el U1SDeT pofHtoltand 2012 00 V"aRyieBOvC0o Fa2tpiel DCInoLngtesnt dCO 2014 Other Positions Held During 2012-2016 President and Chief Executive Officer, 2012 Executive Vice President and Chief Operating Officer, 2011-2012 Senior Vice President, Business Transformation, Americas, 2015 Senior Vice President, Asia Pacific, 2012-2014 Vice President and General Manager, Optical Systems Division, 2008-2012 Executive Vice President, Safety and Graphics, 20122013 Executive Vice President, Safety, Security and Protection Services Business, 2011-2012 Executive Vice President, Health Care Business Group 2012-2016 Executive Vice President, Electro and Communications Business, 2009-2012 General Counsel, U.S. Department of Homeland Security, 2009-2012 Vice President, Corporate Controller and Chief Accounting Officer, 2011-2014 5 22775500..00000088 Table of Cones. Table of Contents ExecutiveOffices continued) Executive Officers (continued) Namreee Name Paul A. Keel aCTPres Pioa n Age 47 Present Position Senior Vice President, Supply Chain AK Khar Ashish K. Khandpur 8 Soir ViProitotReehand 49 Senior Vice President, Research and vpmen mbCoe Tso Development, and Chief Technology [ Officer Jo Lindos Jon T. Lindekugel Fok te Frank R. Little 92 SoDmoermVaeenromsteotsBaginSese 52 Senior Vice President, Business Development and Marketing-Sales 0 esevishoot sind 56 Craps Pains Executive Vice President, Graphics Business Group SatEty Group and None ONG Marlene M. McGrath KKiinmbbaelryl2y F. Price Nhe. Ran Michael F. Roman SH SerVis lt Ta 54 Senior Vice President, Human ons Resources 9 Soko Vico Coponts 57 Senior Vice President, Corporate pioblekimelm Communications and Enterprise = Services 5 Ei Viiniolodoal 57 Executive Vice President, Industrial Business Group Hak Cheol Shin Nhe Vale Michael G. Vale 59 Executive Vice President, International prin Operations 50 Eine Vick Hath Co 50 Executive Vice President, Health Care eins Business Group Year Elected to recat Present bein Position Tl2014 2142014 0152015 02013 B022012 0162016 0142014 2011 0162016 ube PeltsDino g 012s2016 Other Positions Held During 2012-2016 a Ee Managing Director, 3M United Kingdom-Ireland TA Region, 2013-2014 Vit Pri sdGen mg Ski nd Wound Vice President and General Manager, Skin and Wound Care Division, 2010-2013 ViePsd ad Gene Mgr,PonsSty Vice President and General Manager, Personal SafEty rm 011 Division, 2014 Vice ednRochodDesdopmatInna. Vice President, Research and Development, Industrial BainsGras 013 Business Group, 2013 Vis rinRhsd Decl Ind Vice President, Research and Development, Industrial Tampon bones 21 and Transportation Business, 2012 Sor Vc roe,BionDivlopm1en-t Senior Vice President, Business Development, 2014"Ns2015 ron,Hoth nfomstionSeslo,208 014 President, Health Information Systems Inc., 2008-2014 Ves idatotGol mg: na oy Vice ri sn Gen ers Ast ser: Options Vice President and General Manager, Personal SafEty Division, 2013 Vice President and General Manager, Occupational Health and Environmental SafEty Division, 20112012 Vico tnt Hama Roce test Vice President, Human Resources, International Open, DB Operations, 2010-2012 Vi lat ihn DIS Vice President, 3Mgives, 2013-2015 Vi ain Coma Aa, 202913 Vice President, Community Affairs, 2012-2013 Asti Gee Comet, OfGenelCome. Assistant General Counsel, Office of General Counsel, "Soom 2000-2012 Sar VisPos,BinsDevcon,20: Senior Vice President, Business Development, 2013Hi2014 Vi identsdGener Ms nds Vice President and General Manager, Industrial RisbnTap hn 11015 Adhesives and Tapes Division, 2011-2013 Fe Visri d, Cn omurtHinsGru, Executive Vice President, Consumer Business Group, Size 2012-2016 xii Vs Pro, Commersnd Offs: Executive Vice President, Consumer and Office Ten. JBI Business, 2011-2012 5 22775500..00000099 TaofbColnees Table of Contents Cautionary Note Concerning FactorsThat May Affect Future Results Cautionary Note Concerning Factors That May Affect Future Results "OTThhpiises AArnnonnanus"al iRRneeplpoeormrtt o7onncFFooonrrmtmin1100f-KKo.r,wiiannrccdll-uulddoiionnkggin""gMMsaananaeagmgeeemmnetnesnt'tw'ssitDDhiiissncctuuhssssiicoonnananndd iAAonfnnalhygaesislPoroifyfvFaFitsinenaaiScniecsaicalul CCroeonnsddiitLtiiitooinngastainnoddn RRReeefsousrlstms ooAfcft of CO11o99p9m9e55ir.astTTiiohhoneensCC",ooinmminpIptameanamntyye7rmmi, aacalyyosndaatelalslisonivsmmefaraokekrdeewafforodrsrw-whlaoaarrorddk-e-illnhoogooolkksiidtnanegtgaernmsssdtaettnetmsrprweena-sitstshtieiinnnltooahtelshe.mer erraneenppaioontrrgttissoofFfnillte,hdde whwPie-rititChhvaottthmheeepSSSaeencccuyursriaittirieeesrpsrLaaensinstdidegnaEEttaxxitoccinhhvaaeRnnseggmfeeaoyrmfArocmt of time. timemakeoral orwardooking seems. Commission, in materials delivered to shareholders and in press releases. In addition, the Company's representatives may from time to time make oral forward-looking statements. FoFpeoatrworramdradn-ocloeoo,kkiiWnnoggrdsststaatsetummceehnntatsprreenllaa.tte"e ttooeftxuputuerrceteevvee"nnsttissnaa.n"dd "tiybcepalieclnalsll,yy" aa"dpddrrorjeeessts."tthheetCCroomempeapn"ya'nsya'isxceippxeaptce.co"tedd "ftutetuundrre.b"bouss"iiennsetssissmaaantnedd"ffi"inwnaianln.cciiaall performance. Words such as "plan," "expect," "aim," "believe," "project," "target," "anticipate," "intend," "estimate," "will," "psahroutlidc" tchoeulsdi"nc"lfuoder,ecaasmto"anngdothtehresr. Wsofrcdmseantdseemstsinogfs0imilar ening. pill deny sch orvars looking samen. "should," "could," "forecast" and other words and terms of similar meaning, typically identify such forward-looking statements. In In particular, these include, among others, statements relating to: + ptheeCrotomrpmancney, sasdtmaaryketoprorstoitonh., faterevenues, the Company's strategy for growth, future revenues, mings, earnings, cash cash lw,flow-, sesof uses of ashcash and and other other mesoufrnaencisal measures of financial + wonpaeorrnrfclokdirwmailiaddnceceecoco,ooannnonodnnmimdcic,ao,frikppoeouotltripltsiocluisapi,ltp,ioolannin,dendsccaaaspnpidittaacllusmmtaoarmrkekeretsts,s ccaoonnnddditnitiaiootnnussr,,assauanccdhohtashseinrntdeereeist rtsaetseoa,s, focsolrrietmcigainteecccuuhrrrarrneesnngcceyyaeefxxfeccchhtaainnngggeethtreaetess,, + nofoipnpweaernabrctuiiaaoslintnscieoosofonsfdtntohihtpseiepooCCnrsotoummonpfipatoaenunsyry,sooupfrprocpouduliurrescrsutsupdpapenplcdliileecorsupssmaatenondnmdte,ccruusssa,ttoadonmmdeferrnssat,,turapl aendrothferodisraresstmeurlstasoornfccliucmraeetnetcohranagteiaifpftecetdingprtohdeucts, + new- business opportunities, product development, and future performance or results of tthheecustceoopmee,onfatcuornetoirngiemnpaccitesf,acsgeihsatieng,alsaned crgalaaltlosncyepsrnocdedeidviensgtsi.ture actin, the scope, nature or impact of acquisition, strategic alliance and divestiture activities, current or anticipated products, + the outcome of contingencies, such as legal and regulatory proceedings, ffouutrur alveaveillsaboilftyindofebatneddanecsescsommcorendistmoacrkkreetpsurchases and capital spendin. future levels of indebtedness, common stock repurchases and capital spending, + future availability of and access to credit markets, paecntsioinmpaendimpeonsst,eirment obligation assumptions pension and postretirement obligation assumptions and and frecobain, future contributions, asset impairments, T oinfolmaabtiiloen,ecology tax liabilities, security. snd information technology security, and wthehicclhfwcetoopfercahtaengesi es. enviaoamentsl the effects of changes in tax, environmental and and oer as other laws and and egalaions regulations in in the the United United Sats States and and lerother counties countries in in which we operate. "The Company assumenos cig to update ese any Torarlocking semen The Company assumes no obligation to update or revise any forward-looking statements. aFFnoodrrwwuanarcrdedr--tllaooioontkkiiiennsgg. ssAttacattteuemamleennfttssraaerres rbbeaassseetdds ooanndccerrrtoeaidnnsaassassuyummdppiitfiofoennrssmaaannteddrieeaxlpxleycptfartoieomncHsiosofttfofrfaiuuctaurtlrsereieevsvoetnsstnsoraasnnhddotrrseendedlssethchatatet daarree ssaunubyjjeesctutct1ho risks risks daffonoordrcwwuuaamnrreddcn-e-tllrotoaooiikknniictnilnegugsd.ssitAanagttceetmamueamenlnotftsusntddubereeeppreresne,sdnuidnl"tigsMnaooangnnnadagtvevremaanerridnecsttyy'mosoaffDyfifcadstccifotuofrserssrs.i.moIInmamtspeponrordirattlAaalnynttfiirnnonfmfoorrahommifasaFtttoiiihoorninnacacaailis1rateohlsutCehlotesnesdeoirftaatihccoottnosoreassnrccdeaafnnR lebbcteeedffeooiuunonnfaddOnspiynershtauhtscissihons audDnnoiddcseucermrutstehhineeotn,hhieonfactedlhiundaegissnogdoc,ffta""imOOovovrennerrgivvgiioeietwnhwsce-.o,r""rsp,""oFF"riMianntaaaennndccaibigaayellmrCCeoefonnendrtdi'esitntiDciooeinnsfcaarunnosddmsiLoLPiniqqruaui,ndiiddtiHytA"yen"manalny1dds,isaa"nnoRnafiulFalilnlyyFanoiincnoi"a"rClCr.CriitoticnocafdallihtAAisoccndccoooaunucndntutiRimnneggesuEEnlstaststtnii,omdmsfaaOhtteeopssel.""rdatbioens" cDoisncsuissdieornaeodf Ocpoenrsaitdieonres.d"anFor tinahnedetgesdgerirafatlalocppntaoaarrrtsltooifsifnPiPfnaoarcrrtotmraI1pIt,,oiroIlatnetmemcdo77nb,,ey""erM mMeifaaennnrgeaangcgceemoefmerrnoetmn'hsaPDDtamiirssatccyIuu,ssIscitieaoomunnseas1nnAaddc,tAA"unRanalialslrykyessFisissatocosftf1oFrFsii,vnn"aaarnonycfciitmaahlliasCCrodononldcdiuyitmtiiooefnnnrotas,mnaaddhndRRoessehsuosslutttasldtooesfbdfeinthe Ofoprewraatriodnoso.k"iFnogr saadtdcimtieonnta,l sscurrorsoa Form 10K. 10-0 and information concerning factors that may .K led withthe SEC fom time o cause actual results to vary materially me.from those stated in the forward-looking statements, see our reports on Form 10-K, 10-Q and 8-K filed w-ith the SEC from time to time. Tem 1A.Risk Faetars Item 1A. l~isk Factor s. PrPDoirvosvicidudseeiddobnbeeollfootwwh-ieissscafacatuoctionnirtayryinoddcioissrccpruuorssasstsiioeondn oobffywwhrheaaftetrwweenecbbeeeilnlfiioeevvaeentdoo bbceontthhseeimdmoeosrstteniidmmpepoorerttaarnntt rrpiiskkrofaafccPtttoaortss aa1pp.pplHliieccaambbll7ee, t"ooMtathneeagCCeoommmeppnaatnn'yys. DDiissccuusssiioonn and Ansyofs of these factors is Fins Conditioands ResofuOplertons." incorporated by reference into and considered an integral part of Part II, Item 7, "Management's Discussion and Analysis of Financial Conditions and Results of Operations." C*RoRemepssaunlstysaaorrpeeeriimamtppeasacictnetdmebobdyryetthhteehefnffe7e0cctcstooosfufnaatnnrddcicahehadasnngdgeeerssiivinne,,swwaopoprrrldodwxiitdmaeteeecclooynnoo6mm0iipcce,rpocolelniittiacflal.s, aarnneddvcceaanpupeiitsallfmmaoramkrkeoewtttssscicodoennddhiiettiioUonnnsis.tTeTdhheeSse. "CTUTnhohieemtCCepodaomnSmpytaapnotyaep'nsseyrs'asbntdeubsusbsiinionnrmecesossroiess tsshuuuabbnjjree7ctc0thtiactlotocrugonelotrblbiaeelsyccoaoonnmmddppdteeesttriicitvioooennntsraonalpnd,pdrsoggicxecooihmppooaslltieitlitoyccal6le0rsipskekescsrocanaennonddmt iommcfaaiygytsbrboroweetavahded,vnveudereirsssereflplryyotmoaafnffofseucctittsneidddfiebbnyytahnffceaicUaoltonnmritsaeriidkneStthhstae,etes. eUcnointeodmiSctadteoswnatnudrontshenrtchoeunftorriemsotfhsaittahrer bceoynotanidneitdsoconvtirodls,psruecahdarsescleoswsieornaercyonomic growth, disruptions in financial markets, economic downturns in the form of either contained or widespread recessionary 010 22775500..00001100 TabeofCones Table of Contents conditions, flan, leatedunemplogment ves, gasho uneven recor: goverment deft redutionad oer airy conditions, inflation, elevated unemployment levels, sluggish or uneven recovery, government deficit reduction and other austerity mcasres in spciic cuntso regions,or nthe various indus in hich the Company operates; soca, pola labor measures in specific countries or regions, or in the various industries in which the Company operates; social, political or labor Condions in specific countieosr regions. natrs and theistoreclimratechangealecting th operationsofthe Company oe conditions in specific countries or regions; natural and other disasters or climate change affecting the operations of the Company or iscustomer and suppliers: oradverse changeis he aval snd cou of capital fret le, rts a as,or exchange its customers and suppliers; or adverse changes in the availability and cost of capital, interest rates, tax rates, tax laws, or exchange contol, abilitytoexpats camingsand oer regulations inthejursicioin ichtheCompany operas. control, ability to expatriate earnings and other regulations in the jurisdictions in which the Company operates. o*fCCchhaaapninglg.ee iTnhhteheemCCooomrmpapnaatyin'nsyg'scarcerneddiiitt rraattoiintnggissncclooyunleddvnianrlcueraaetaessteeheccCoostmooofpfffauinnntydigsn,gr.TTdhheepCCrooomfmppasannnyyd''sssrscsroieigdntitdrreaitbinngrgasstiaanrrgeesiim1m0ppo3orMrt.taaTnnhttit0os 3cMMlsu' sscciooosstn.t aoiissgfbbeacanasscpeeiiddtsaloo.annnTdaahnentumimuambjolemrronrobfaeftofifsanfaecgctftooairrngrsas,en,ncwwciahiheliisccphrhooriiunintcicnnllgueu.dldyee3efTivMnnaaalcnuccaoiitraellrtshsattelrreeCnnhgogattmhsh,a,pnbabunuAsysiiA'nsneecscrssreaedadninitdtdprnfriioannfnagilcneicwaiaianlltdhrriaissskss,,iagabnslwwdeeeeclbllllt aaroasottsikrnaganrssoptroamre3eSMntec.aynTdwwhaiirilstdhhe&varaattPliiuonnaoggtri'osn agencies and timeliness of financial reporting. 3M currently has an AA- credit rating with a stable outlook from Standard & Poor's arnadihnasfraonmAAYxrtio tAl,ratrienvgisweidth3MsbultelcouoklofkomronmegaMtiovne d0'saIbnlvee,stnords eafrfiicm.ed ItnheMaCrocmhpa2n01y6',s Msohoodryt'esdroawnnggraodfed1M. 'Tshis and has an A1 credit rating with a stable outlook from Moody's Investors Service. In March 2016, Moody's downgraded 3M's crrTaaosttmiiinnmnggngsfiraceoctsmtiitooAonndafF3otollstloloiowAnwtes1eddn,tr33etMMvoia'sosetndanho3nrMouui'nsnncocceurmetcleosmnoetekFoonfnffraioitntsmsinnlneeewwlg-eavifteiivrvvaeeeg--eyt.yoeaaTsrrthaplebllanCen,oaffmonorpdttahahfnefiyppreemsrriieeoodeddtdh22e00t11iC66notgtmhshrpoohauuanggvyhhe's22ss00eh2r2ov00retdii-nntlewwrhmohiiwccrahhstithnheg3eMCoCofomPmbp-1pao.annwTyyhiins g communicated its intent to further increase financial leverage. The Company's credit ratings have served to lower 3M's borrowing CwoistthsaadndditTionc! eow-a<ocsctesde0b:,3 cvoaurlidtyimofpeanctdSerM.cThreiComrpaainny'nsthoengtouirneg.trFalnsrietnotmabitnteari-nospriomnigzicnvdecsatmpeinltsgrrcatduersr,infgnssnced costs and facilitate access to a variety of lenders. The Company's ongoing transition to a better-optimized capital structure, financed Wwoiuthldadaddviteiorsneallyloawf-ctostthdeeCbotm, pcaonuyl'ds cost impactof nding andcoud 3M's credit rating in tahdevefrusteulrye.ff gidsandaccteocaspitsal markets. Failure to maintain strong investment grade ratings would adversely affect the Company's cost of funding and could adversely affect liquidity and access to capital markets. `*"hTTihhceeh CiComompmpaacpntyas'nrsye'vserrneeusseuullttassnaadrreeraaoffiefcmtefadrbgbeyiyncc,coompmitfepteeiecttiittidvveeedccobnydoi)titonhnsdaadennvddlcicouupsstmttooemmnieterrpaprnoredeffetenrreiennmcsceeiossf.,nDDhegeemmaiannnddduffcootrr itthoheenCCoofocmmoppamannpyye'ss tpprreoodduucctsts,, Cwpphrrhoaoidncdughucectistsm;ipn1(ai)tic)htestthhereeeevCCeolonmmuopefapnaavynn'eydn'strporeroresyfsip,ptoommnnaasseirgntoiontdsado,iowiwnsmbenavdfwyafearccrdudtespdtproribimccyeiinrn(gsgi) attsohnedastdtayheyevoceolmonmpippnmegeetointftitvacienu;idsv(ti)tieoiimm) eccirnhhpgaranosnghfegatsehiseisneniscncuutwrsshottidoocmumhecermtiroaoonydrdoboeforcppoaaamftttpeceerrenti,sdt,ivssbeuuycchhaass acnhnanoguensceind tphreicleecvhealnsgoefsi,nvcehnatnogreys nthe Comp maintainedabnyy'csustionmceernsivaendprtohgertaimmsi,ngootfhceusctuosmtoemrepr'usrcahbasleys w1haicchhimeavye biencaefnfteicvteegdoablys. snd (i4n)cucshtaonmgeersdescigunstfomoehrs tprperfoedruecntcseshfeotrccuanspirtocthse dnleadinngftohresseosoefsnohef pCroomdpuacntys'sofpfreoredducbytsurcompeti, nd changes announced price changes, changes in the Company's incentive programs, or the customer's ability to achieve incentive goals; and (iv) changes in customers' preferences for our products, including the success of products offered by our competitors, and changes in customer designs for their products that can affect the demand for some of the Company's products. Fore currency xchangeratesandfuctatonisn those resmayafc the Companys ably oelseprojected growth * Foreign currency exchange rates andfluctuations in those rates may affect the Company's ability to realize projected growth rues nsslesan cnings Because the Company nancial semeane denominated in U.S. dollars and approsimaely 60 rates in its sales and earuings. Because the Company's financial statements are denominated in U.S. dollars and approximately 60 teen oftheCompanys revenuesarderived from outside the United Sc, the Company's saof lopertonssand is ily percent of the Company's revenues are derived from outside the United States, the Company's results of operations and its ability 1 elise projected arth aes insles and camings ouldbe adsl aeied f he U.S dollasenthenssigificntyaginst to realize projected growth rates in sales and earnings could be adversely affected if the U.S. dollar strengthens significantly against foreign omens. foreign currencies. The Company's grow objectivesare largely dependeonntthe timingandmarket accptanceofts ewproc offerings. * The Company's growth objectives are largely dependent on the timing and market acceptance ofits new product offerings, incluidsiabnlgy 0 coninllron ipipingof now proncdebrsing hoseproces fo market. This ability may be including its ability to continually renew its pipeline ofnew products and to bring those products to market. This ability may be adversely ffctod by diffeor delay product developmen, sich a the nail to dent isle new products, obs adversely affected by difficulties or delays in product development, such as the inability to identify viable new- products, obtain adequate nella property protectoionin, markt sceptanceof ew products. Thre a 0 grantee hat new products adequate intellectual property protection, or gain market acceptance of new- products. There are no guarantees that new- products ill provetobe commercially scent. will prove to be commercially successful. m*TThaheetCCeoommrpaapninadyneasyn'lsfefurust:tuurrneerdreeissuunllttgss aoarfreleassuudbbjjenecactttutoroalflluaacctsuatatnuiotnihseioiinndntehhsreeivccaooststitsvseaasnd.dda aiva0ilasbhv oilrittyaogofefpspa .uurrcncehhraaessai eesddeccdoodmmepmpot aonnneendnt,stss,,upccpoolmmyppmooeuurnnrddsps,trriaoewns cmcmuurearmrtreeiernnticacsyly,sxeaaxcncdhdhaaeennnnggeeererggrryyii,ssikkissnn.,ccnnluhaaditiurnnrggaalodcdiillissaananssdtdteenrrnsasaattauunrdradalogogteahssersracfnandrcdthotshere.sii.rdTTdheheeeriivtCCaiootmeimvpsepas)a,nnsydyuupddepeeltppoieeesnndhddbossyorotnaontghvveesaar,rrsiiionfoucsosrcectoaohmesmpemopdanodnenuenefmtnatsacs,nt,udccrooismmnugpppopoofluuynntiddsnsst,perrrroardnuwupcttiso.nsI, materials, and energy (including oil and natural gas and their derivatives) supplied by others for the manufacturing of its products. tisepromsiinbeled tinhthaentytaorfe. AsnpylisucsetaeianetdiiosnhitprcooldibehentCeormpptaendydeetonpatuorfaalscnudttehsrpdiiseasstecrosualnddaoveer emavtesr,ielorabdeverse is possible that any of its supplier relationships could be interrupted due to natural and other disasters and other events, or be It terminated in the future. Any sustained interruption in the Company's receipt of adequate supplies could have a material adverse easescutraoncnethceanCboempgainvye.n tIhnatatdhdeiCno,mpwahnyiltihlelbCoomsphaonfyoshaes. psroscems0amniangimriizceevuoaltiiion conormpthoantetntuardrmiacteefrlia]cpuraiicionngs. o1r0 effect on the Company. In addition, while the Company has a process to minimize volatility in component and material pricing, no Sahsosrutraangcsewcialnl boetghivaevne tahmaatttehreiaCloamdvpearnsyewlilfl cbeon the Company: able to successfully manage price fluctuations or that future price fluctuations or shortages will not have a material adverse effect on the Company. Acquistion, stratgic alliances desires,athr unsal events resinrom polio management actionsand thr * Acquisitions, strategic alliances, divestitures, and other unusual events resultingfrom portfolio management actions and other evobingbusines sntegies,and ossble organizational esiacturing coudaffect ute resus The evolving business strategies, andpossible organizational restructuring couM affectfuture results. The u11 22775500..00001111 TabeofComets Table of Contents Company moritors ts busines portfolio ndorganizational strcure ad has de and maycontinue 1 make acquisitions. Company monitors its business portfolio and organizational structure and has made and may continue to make acquisitions, sta alliances, divesntd changes1 is oganisationlstrcture. Wilh respect 0 squistions, ure ess wil be strategic alliances, divestitures and changes to its organizational structure. With respect to acquisitions, future results will be alfctad by the Companys abil to terescquiedbusinesses quickly andcbs theanicipated merges. affected by the Company's ability to integrate acquired businesses quickly and obtain the anticipated synergies. C**oTTmhhpeeaCCnoyommpuapnsya'nesys'ssfvuuatrruireoeursreeosslutlstss,' mmsauacyyhbbaeeaafefffeeocctteeSddiiftStihhgeemCaC,oommapnpadanneyyngggaeegnneeesrraaitteecssffmeowvoeenrrpprgroloodcbhuacclttbiivuvisttiyyniiemsnpsprroravesomfvoeernmtmsa'etthhinaonsn, eeBssuttsiimimnaaettseesdd The The brtCurasaoninmfnsfopeorasrnmsmyamatutiietooilnnisziiesosddveeapffriirinnoeeouddsvaa5etoscohoclphase,anrnsgaguteecissohniiasns]ppLlrrleooiaccnceesesSssneeiexssySaaannignddmdifnape,treomardnanudcaltlie/evenixxgtttayee,grmneaasillisnseerorvvniaigccloeeldiondewgleilingigvvloee3brryaMylatsboccurrsoosessinrssee33scMs at1rtaosnmmsotfoovvroemewratootiisommhnoor.rraBeetueeesfriffnisceiispestnetdand fbe"ifwufocsiricinlieeednnwscsicydyme. oTbTdahhesisliss.iitssoTcehinnemaarbbpellraeeoddvnebbbyyoeptthenhreeoaootainosgsnnuoarilgnaegnfcofmeiocutliiehlitntinc-ylycelgaaaonrfdppthhhpaaressoeepdddruocipjmtelivceptilmteeyedm,npwetrnaohtdtiauliteciootainnlvloiooftwfayianingmce3pntMtreerorptponriiesseeemrevrreeenssotcouuusrrsctcwoeielmbeppeellarlasnninnwsiienint.ggh (ERP) yen greater speed (ERP) system on 8and on a worldwide basis. There can be no assurance that all of the proj ected productivity improvements will be realized. E*RTTPhheesCCyosotmmepmpaaansnypyaeermmtppollfooyysss'niinenffosorrrmmaaanttisioofnnoetrehcmmhaonilooolonggyoynssy.sytwemsosittroosesduuppmpopbraostsrsitsbiotsuv' seburishnineeesmssse,scinslcelviuedrnianglgooennagrgosoi.innSggecppuhhraaissteeyddbirimmcpphlleemesemanentandtotiotanhteooriffoaann ERP system as part of business transformation on a worldwide basis over the next several years. Security breaches and other fsorimatoionn 0lshoengCoimpna1gn0y'hseCfoomrpmaantyiaonndetcshcnusltoymefrs rsuppslieris.cncoudluedmpnleorefereesewxipthoshiengCtohmepCanyocmperp0aliaaoinstnycomwphircohmicsoeud disruptions to the Company's information technology infrastructure couM interfere with the Company's operations', compromise information belonging to the Company and its' customers', suppliers', and employees', exposing the Company to liability which couM {adcbheorsleolgyyinmeptawcorthkesaCnd ostamn,bupssinoeasofamwnnhdiercuhytreisnma.naIgnetdhebyxdhiindarpacriso, fuoofpbrroossnesse,rstheCtomnpdasnoyricsleoctnonfiocrmation adversely impact the Company's business and reputation. In the ordinary course of business, the Company relies on information Ctiiennocffrohorrinmmonalatoditiagootnyn,,,nieaantnncwddluotdtroioknsmmg aapnnadragosneyposortraresimsuaugpsp,bppuoseosroirtmtneeasovvaafrrwiiieenhttfyyiocrohomfafabtbruieuossnimi,nnaeeanssnassdgppermrdooaccbyeeyssastshveeisseradacndpdeareaitcitet1isvi,0itstoice.ospn.rfoAAicdddeedndsitsiitt,iaootlrnnaoaanllsl,myp,eirtttshhaoeenndaCCloosmtmiopnrpfaeaonneryylmeaccctotorillololenecciictntssceaarndtdaissntioorrfeess certain data, including proprietary business information, and may have access to confidential or personal information in certain of umerasusrienseeGsnocsldtihangeismuplboyee apdrivhaciydapadrtsy tcrirngL.w,mrogunlaititonoofsnarentidwonrukgssonmedrsimrposs,edncodntrmolsa. iDteesoonfubrapaecynkbiecatrnedrey our businesses that is subject to privacy and security laws, regulations and customer-imposed controls. Despite our cybersecurity prmpIornteofeatucestsucittrivecvesteus(siyrnysecstltmeuemamdsyis)n)gswwheiihmcibhcphlovaayrlreeencceaoonsnndtbtiiltnnhuuioorodudus-sapllmyyaarrtrgyeevet,ireaewdinedidngaai,nnmdd oupnpeaoigrtroraardsdiennhedgtd.d,otothfhtCwnenoesCmtwopdomaurknpesayonansynt'dsiansicnfykfosotrerbmmmyaasth,tiiaaoocnnndktteemecrocahrsihnnonbtelrooenlgaaocynhcennesee,ttowcwfonobrrlakkcosskyuainpeddeanrd or infrastructure may still be vulnerable to damage, disruptions or shutdowns due to attack by hackers or breaches, employee error or cmlaolfuedasseanrcvee,sp,onnaeturroaultdagiess,scoemosprutherrsisntussetsi,oeheiccosmmvuenni.caonpoosibulelforasluucrhess, nsyasteimslrseso,resierniuenpdreotveicdteerdsfioncalnuding malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, service providers including {ecehxlxottrueendnsddseeeoddrtvpphieecerreiisoCo,ddon,,mapuutapupnrt1ayolsaadnniisddnafsiintoneccrrllsmuuadodtiirnnioggothsseeeevrcveencrraoaatlllaosystcgeraaoyrrpsns.h.eiWtW chwehiovilrleeeknstwwsn.eeIdhhtaaiisvveepnoeesxxfsppieberrrlieiaeefnnocscreedndts,ou, cnranhndudveoufexclxpnphteeeecrcauttbit1trolcoitdecieosotn,ttoibnurnseemthtooaotidenexxuppmienerdriaieeetnnentcccet,e,rdtthhfieeossreecatpnyopoetshsooeff aCtChosormemspaaptsnaAnytnoy.y.thTsTeuhhcCeehrroeeemmvmepaanayytnbsybec'esooouitntlhhfdeoersrrmcchuhaaatlillonleennntgggeeecasshlnaanoncdldolrgriysiiknsoseaatswskpttorhhsroeekesCCcdoaoinmmndpgpaisann,nfyyrbauusptipraugrlcraatdudereoesrs,paanennnoddanlesstttioaeanfsndtuhdaneardmdriedzrtieoszptderitiassvteaEEchRRyaPPslashsvyeya,ssdttedaemmimsooanntseariiawwnlooriirmnllddopwwpaeicirddtaeettoiothnse, inabasnnausddirdsdaa.anmAmcanegacygoesvouteoctrhhathgeeeveCCnfoootmsrmpcVpaoaanurnyliyd'o'sssrecrrsyeeupbplueuttrtaisantetiicoloeunng,r,iatlwwyhchiliaiccishhmkccs,ooouturlhlddperrsaoddccvveaeeenrrdbsseieenllnygysoaa, flglfieautcbtailttirhhtyeeanoCCrootpmmheaptnpaaafnlnltyiyecs'ssobsubutunsssdioiennreeospsswr..ievAAasbcltyihonoulcauugwgrhrhse,dthdhewiesirCCluoopbmmteipopafnaunnliylnyy ommupaaerirnieattaidnoinnsss, insurance coverage for various cybersecurity risks, there can be no guarantee that all costs or losses incurred will be fully insured. o*rTThheeeCCsoosmmp.apnayTn'hyse'sp' ddeeeffirinneefddbobeernofemffiatnepaensnniccsiiooaennl aamnandrdkppeootssstatreedttirrdemmiesenntctppollauanntnssetasarrieemsspbuacbjtjcetcthttetooCffoiinmnaapnnaccniiaayll'mmanardrkiketntgriissoks'btthhaalttccioouugulddndaacehdrevtiretsrsiedelelyfyoipinmnecpdatct nsboeueenrter,ifeistualplntlasda's.nr.sTe.lhSSeeiviggapnnneitirfffiliocceraamgnnittaancctchhieaavnnooggfeefssrineiinanlnammcatiaarorlkrkemettacinrnhketaeentrrsgesesatsnrdtraeetdelsias,st,ciddoneegucncortrereadasaetefessisenisienmdntphtbhaeeFecftnaitihtrevvpCallaouanmeofpolfuafnpnpdyullia'nsnngfaaumssnassdeyetitnssigaannorddbelsiiingnevavteetishsotetnmmsCeeounntnmtdplloeaorssnsieeytssssdoofennufnippdnllieanndng. blgnions assets, and ndadversely impact relevant legislative or ts suolf petrtosns and regulatory changes relating cosh lows. to defined benefit plan funding may increase the Company's funding obligations and adversely impact its results of operations and cash flow-s. h*oTTshheeeiCCmooommplaipnnya'gnspyr'stofuduutnucrete areebssulllyts,'mmaaayynbbseeaa,ffffeeccetteleddlbbesycvvaaalrriipooruuosspeleegrlaylaianrnodmermegeganuliltaaotlor,ryypptrhroeoccUeeSeed.diinFngogsrseaatngnndCleoeggraamllpcctooPmmrppallciiiaacnneccsee rriiissckktss,,aiinndcnliucdhirnlg `atahpnnoetbisc-rebairitenibirveoo,rnlayvsv,ibntaeg-ncpctairo-uocrsodmeruurtcuphtpteltoioiaonbn,ui,liotoytrr,ooacftnohtferoitrrmummsagata,tretteiisnrosst.n'e.,lTlTeihchnetculcoauuldutpicrnootgmpreceeorgotufoyfl,tatmthehoneeresvyseirmoleeanggamtalelespnpr,traoolacc,eeetsehdodeiifnn[ggcZssS.dmmiFaafoyyfrieddciilgufflnletsrCrfforerorlormiumsplthythePeprrCCaeoocdmitmicpctpae.ansVnyAay'cr'sstiaonsdtoothresr expectations because the outcomes of litigation, including regulatory matters, are often difficult to reliably predict. Various factors oorrmdeavkeelsoupmcehnetssticmaanteesafdormheatCoemrpaprneyvtioocuhslaynogte csoruresecetopfetreisoobfnlalbaleeiitmastned,reslacthedassarsiegneifirceancteijvudaibcliealwhleirenaogpriabe, or developments can lead the Company to chaaage current estimates of liabilities and related insurance receivables where applicable, Sjjoucurdldmgeimamkceeeannttts,uoaacrhssuiiegngsfnntiaiiffmviioccaraatannetbst lssfeeottdrtlemeevmalmtetone,prt,smesSpiinrggetnnviiciffoiiocucuaasndnlytt rrrneesoegutlulstaluatitsnoocrefryputddibeeevleecvlohoafplrrmgeoeaessnpottsnhmoaaotrbreclcechohnaueanlstngtdigemsaessavtiiennse,asppsmupplcaliihccraaabbslllaeeaslldaiwvwg.en-r.isfAAiecaffouunttctuujrrtueeddoaicdnvivaetelhrrersueeCliroinumglnipnogagr ,nys settlement or unfavorable development could result rCeosmtpsanoyfoapndetrheatoirocnassh lows in any pariculr results of operations or cash flow-s in any particular period. For redetaled discussionofthe legal proceedings mclvinhge in future charges that could have a material adverse effect on the Company's period. For a more detailed discussion of the legal proceedings involving the Company and the n12 22775500..0000~122 TabeofComets Table of Contents aaFssissnoonccciiatiteleddSaaicctccmooeuunnntttiisnn.gg estimates, estimates, sssee the the discusion discussion in in Note Note 14 14 "CommitmentsandCotingencie" "Commitments and Contingencies" within within theNotesto Consolidated the Notes to Consolidated Financial Statements. Tem 18.UnreSsaofClomvmeentds. Item lB. Unresolved Staff Comment s. None None. em 2. Properties Item 2. Propertie s. 3M's general offices coors rsereh bors, and certain diisin laboravais cated in St. Pal, Minsos. The 3M's general offices, corporate research laboratories, and certain division laboratories are located in St. Paul, Minnesota. The Company operates1 manufacturing fcltiisn 29 ists The Company pert 122 manufacturiandg converting facilis in Company operates 81 manufacturing facilities in 29 states. The Company operates 122 manufacturing and converting facilities in 36countiesoutside the United Ste. 36 countries outside the United States. SM owns he majority fisphysica prope. ITs physical ceare igh stable for the purposes or whi they were 3M owns the majority of its physical properties. 3M's physical facilities are highly suitable for the purposes for which they were designed. Because i. global snerprse sharseteizd by substantial intrsegment ooperation, properties re offn sed by designed. Because 3M is a global enterprise characterized by substantial intersegment cooperation, properties are often used by mle busines segments. multiple business segments. Hem3.LegalProcesdings. Item 3. Legal Proceeding s. Discusion of lgal mates is incorprstd by ern rom Pat, Hem , Ne 14, "Commitmcoatnds Contingencies" of hs Discussion of legal matters is incorporated by reference from Part II, Item 8, Note 14, "Commitments and Contingencies," of this document and shoud be comsidered nite partofPat, Tem 3, "Legal Procecdings.TM document, and should be considered an integral part of Part I, Item 3, "Legal Proceedings." em 4.MineSafetyDisclosures. Item 4. Mine Safety Disclosures. Pursnt 0 Section 103 ofthe Dod-Frank Wall Set Reform ad Conse Preston Act (the "Act, the Company is Pursuant to Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act"), the Company is reid disclose in comnecton with he mins i operates, information concen ine safety violatoritoenrs regulatory required to disclose, in connection with the mines it operates, information concerning mine safety violations or other regulatory mtr in ts prio reports ld withthe SEC. Forth yar 2016 he informatio canning mine say violatoircolnrs matters in its periodic reports filed with the SEC. For the year 2016, the information concerning mine safety violations or other reaultory mates reid by Seton1503)oftheActiincluded Exhibit 5 1 hsamu report regulatory matters required by Section 1503(a) of the Act is included in Exhibit 95 to this annual report. i13 22775500..00001133 TabeofComets Table of Contents PARTE PART II em.MarketforRefstrantsCommonFait,RelatedStockholderMater andsurPurchasesof EquitySecurities Item 5. Market for Registrant' s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. EEBeqqnuuciitttiyyciccaoolmmpOpewennnsesarattsiiooannndppllMaananssn'aifgnoefrommremanttaitiaoonnndiiRseiilnnactcoeordrpopSrotaortcaekdthbeobdylyderrereffeMerraeetnneccees"ffrooommf PPthaairstrdI,IoIc,ueImteemmnt,1122,a,n"dS"SesechcuuorruiittdyybOOecwsonenersrsihsdipieooprffeCCdeerrmtaieinngs prt Beneficial oEfxchange., of Item 5. AAOInttwJanan(neruNasaYsraSynEd33)11.M, t20ah10ne71aCg,7he,imttchhaeerngreeot and Related Stockholder Matters," of this document, and should be considered an integral wSteoeck$E1x,c4h4a3ngseh,ashIno.ldearnsdotfhreeScoWrXd 3SwMisssoEcxkchaingei. dCash hdieviNdeenwdsYdoreklaSetodcksnd paid were 81,443 shareholders of record. 3M's stock is listed on the New- York Stock part ttEhooixttnacadl,lheeaddanng$Sde11,.1f1I1o1npucrpe.terh(rNqssYuhhaaaSrrrEieer)ff,soootrrhfese2aa0Cc1chh5i,aqcauugCaaroarttseSrhrtoidinnicvk22i00Ed11ex6.nc.CdhCsaanadgshehec,dldiaIirnvveicid.dd,eeannnddtdssdhtdoheFelcoaulSarrWrtehdXaaaSnnwddirpspsaioiEdfdx2ctoc0oht1taa4lneigdien.S$c1Cl0.u0a2ds2eh55d dppieevdrriidssvehianadrdreeesndffdooeprrciceladaarcceihhdnooMaffanttdrhhcephsasei2edcc0oo1nn5dd,o, f 1th0ir3d,8apnodrfsohuarrthe.qSuoarctekrpsriocfe2c0o1m5p.aCriasshondsivfidolelnodws declared in the fourth quarter of 2014 included a dividend paid in March 2015 of $1.025 per share. Stock price comparisons follow-: Stockprice comparisons (NYSE compos transactions) Stock price comparisons (NYSE composite transactions) -- (Per share amount~ 2016High 2016High 2006 Low 2016 Low 2015High 2015 High 2015 Low 2015 Low Fit Quart Sound Quarter _ThindQuarter YouthQuer __ Year Fir~ Quarter SOAs srs So dar so dee Sasa $ 167.50 Besar Sass dees 134.64 Sms sg Ss ISoi slo s mos $ 170.50 197 15592 mos uw 157.74 Second Quarter $ 175.14 163.17 $ 167.70 153.92 Third Quarter $ 182.27 173.51 $ 157.94 134.00 Fourth Quarter $ 180.06 $ 163.85 $ 160.09 $ 138.57 Year 182.27 134.64 170.50 134.00 ser PurchasoesfEquity Securities Issuer Purchases of Equity Securities cRRoeerpppuuorrrccahhtaaspseuesroopfofs3SeMM. ccIonommFmmroonan ysstooc2kk01aa4rr,e 3mmaaMddee1Bt0osouasrpudppoopfrortDtihtrheeectCCooromsmpaapnuyat'nhsoyr'siizosetdcokctk-h-ebbaarsseedpdreecmmhpplaloosyoyefeeseopccoo0mmpSpe1en2nsbsaiatltiilooinnonpplloaafnnss3aManddoufftoosrrtocatehnderring CccFooeobmrmprmmuoaroorannytess2pto0ouc1crkpk4,,orswieepistuh.hrIcnonhoaFsppeerrbe-rp-ureeaoxsrtgbyarlb2ail0miss1hhw4eei,ddh3eeManndd'esddwBaaoote.ra.erdIIpnnrocFFfheeDbabrsriurueeaacrprtyyroor22gs00raa11mu6,,t,h33oTM rMiizs'essdnBBetoohwaaerrpddrreooopfgfurrDDcaiihrmraeecsscteutootorrsshf uoereprppiatloaschce$eee1sdd2rttbhehpieelulCCirooconhmmapospafean3onyfMy''sps's o0uSts1ta0nding bFielblirounaoryf320M14 roeuptsutracnhdaisnegpcroogmrmamonwsithosa,neiwt-hrenpourpcrhea-seestparboligsrhaemd.cTnhdisdene.w- program authorizes the repurchase of up to $10 billion of 3M's outstanding common stock, with no pre-established end date. "14 22775500..00001144 TabeofComets Table of Contents suer PurchoafEsqueitsy Securities: (ristered pursuant 0 Section12.fthe Issuer Purchases of Equity Securities (registered pursuant to Section 12 of the EExxcchhaannggee AcAct) pJPaaemiriaodr T3076 MaJFFraeenbbcruruhauararyry1y-131-113-2,21209,0.2,12206001.11666 AMpaeTTrlcooh1uta3l1l0-JJ.3aa21nn0,uu21aa0r6ry1y.611--MMaarrcchh 31,2016 31,2016 JAM Muanpayreyil 1111:---33330110,,222,200010116166.6 June 1-30,2016 JaTyo13l1A,p2i061-Jane TotalApril 1-June 30,2016 30,2016 SeAAJpuuullgygueusm1stb-t3e111r-3,321110.1,1223600011,662016 OcSteTopTbtoeoemtlrabl Je1Juru3ll11yy,-1321-00-SS,1e26ep0.pt1tee6mmbbeerr 3.2016 30,2016 DNeoNOcvoceetvomeabbmbeerberer1r-131131:-1,33020.,,021220600111666 DeT"coTTetoomataalbleOJOrcact1nto-uo3bab1ree,yrr21I01--1-DDD6eeescceeemmmbbbeeerrr333111,,,222000111666 Total January 1-December 31, 2016 Total Number of Sire Pures Shares Purchased (1) ASTID 4,867,209 L523 1,593,234 Looioss 1,094,083 TSS 7,554,526 Shon 1,543,073 sas 1,695,626 71200 1,712,490 ASL 4,951,189 TSI 1,351,737 Lois 1,529,161 GA6264 1,416,264 i 4,297,162 Ta 1,753,259 2060 2,097,600 isos 1,510,478 Sala 5,361,337 Tein 22,164,214 Average Price Fale Paid per SlShare SHIT $ 141.70 ssa $ 153.47 sss $ 162.58 Sian $ 147.21 S167 $ 167.78 s 167% $ 167.90 slo $ 169.72 Sieh $ 168.49 She S 178.63 smn $ 179.33 Sime $ 177.68 SST $ 178.57 Ss ier $ 169.12 S M0 $ 171.03 sees $ 176.68 SI $ 171.99 ser $ 164.04 Musium, Maximum Approxim ate [ety Dollar Value of Total Number of Shares that May Shares Purchased as Part of Publicly moanedPam or Frame Announced Plans Teme, Clin or Programs (2) 4870S 7 4,867,019 iwesw s 93% 1,590,500 loins s osm 1,091,293 isms osm 7,548,812 sme Soa 1,538,003 lesan so 1,695,200 _ i7i2a s sms 1,712,490 _isises seis 4,945,693 Bion 5 ss 1,351,044 smn S820 1,528,801 idles s 797s 1,416,264 pein Som 4,296,109 Lm sie 1,753,259 260 5 7am 2,097,600 isa s 70s 1,510,478 ssl 5 0 5,361,337 isis 50 22,151,951 Yet Be Purchased under the Plans or Programs (Millions) $ 777 $ 9,756 $ 9,578 $ 9,578 $ 9,320 $ 9,036 $ 8,745 $ 8,745 $ 8,504 $ 8,230 $ 7,978 $ 7,978 $ 7,682 $ 7,323 $ 7,056 $ 7,056 $ 7,056 1)T(hiesohatrtesnpuurmcbhaeosrefdsihnarceosnnpeucrtcihoansewidthtihneceluxdees:rc)isshoaefressopcukrcohpatsieondsu. nd the Board suthorzatinsdescribed sore, and (ii) shares purchased in connection with the exercise of stock options. (2)BTohweo'lsnuutmbobfrsehaidrreeassepniubrocodhsansheodsrs,s prtofpublicly announcedplans (2) The total number of shares purchased as part of publicly announced plans programs or programs includes includes shares shares purchased purchased der under the the Board's authorizations described above. 1s 15 22775500..00001155 TabeofComets Table of Contents em6.Selected Item 6. Selected nanaData. Financial Dat a. l(SDeoalrlaasrseinirnndemdisllDionnsos,, x esxceept3rpp1re:rsshhap arreeaampoaunts) YeNaNNeresettetssnliadeleensdscDoemceemsbterb3u1t: tbo 3lMe PNoNPeeretrtsisihnhnacacroreomoomeffea33atMtiMrribcbcuouotmtmaabmmbloelonntotsso3tooM c3ckk:: basic CNNNaeeethtt iiinndnccicoovommimdeeeenaaadtttttsrriidibbeuubclttuaaabbrtelleedatpttobooe3lr33MM Mo3--Mcodbdmaiilsuietcedd share AtDeCC(cCaaaesssmhhhbdddeiiirvvviii3ddd1eee:nnndddsss pid er declared paid per SMcommon share per 3M common share 3M common share At December 31: LToonuglatxeemsdebt Total assets excludingprion duewithinoneyear) and ong em capaesecblgations Long-term debt (excluding portion due within one year) and long- term capital lease obligations ae ams me 2016 2015 2014 S09 S027 SEIS $ 30,109 S00 AR dose 5,050 30,274 4,833 $ 31,821 4,956 sme 8.35 sas a 8.16 aHams as 4.44 SH a0 am 4.44 7.72 7.58 3.075 4.10 7.63 7.49 3.59 3.42 $3290 SRE SIS $ 32,906 32,883 $ 31,374 os am ere 10,723 8,799 6,764 sw2013 0ST $ 30,871 a6 4,659 em6.83 em6.72 ams 3.395 2s2.54 BIS $ 33,304 43a 4,367 ws2012 S 2900 $ 29,904 4d 4,444 66.40 om6.32 2%2.36 22.36 34006 $ 34,006 ao 4,970 CsCoeascsohhnddd,iivvtiiidddee,nnddassndddeeccflloaaurrreetddh aganandrdtppeairidddtitovotitadaleleenddd oS$f11.1111ppSe1eUr2rsSpshohararreesfhfoaorrrc,eoaichhcgqhuruaretsaerin rinn2i20011r66.t . TInn2v20a011rl 55,2,0331M M5 'sdBeBcoloaadrrdedoofdfDDiirireevccttoiorrossddfde$eec3cl0naar7ed5dpaaser hSsshheiacaceore.nh.dIwI,nnhtehDDaieredcc,eedammnbbdeedrfrto2o20us0e1ret14hc4,,oqdn33udaMMrt'tesBhriBrddo,iovaiarddneodanofdffDDooirurifrer$ecc1qtdt.oou0rr2ass5rddpeeec2arl0a1srrh4edaddreea,cfrwlirtahsr.itc-euqhdaudrraieirvstciueedrl2te2e0nd0d11si35notddfoiiStvva0iild.dye8enen5add3orpof2ef0r$1s15h.o0$dr120ee25,c5 lpapeereserrdlsshehdaaidrvreeiid((eprtnaaodiitdsdaloiiynnfcuM M$ra3a.r20rcc70hh51242p00e11r55)),, ewdpecehcialcsahrrhedwdahddeiiinvidvaddiednidneddesMonatoofrfd$cs$s3eh3.c.8o2590n9p1dpe4,e.rtrhsiTsrhhhdiia,rsraeern..edsIunlfotDDueerccthcenmmqobubetaerrr]te22ry00211r03,1, 42330Msd1e3'scBdlBacarhoerardrdsdddioovffiddDDeinicridecscotvoorfrss$oid0dfe.e8cc3d5ll.a5a3rreeep9dde3rapanfsofrhiasrdssrthet-a,qursruaee,arsruttwleetiret2d2h00i21n144.tod5dtaipivlirvydeeiansrdhda2oero0fefn1$4pd0o.d8S055i55n 1c2p20e0ur11s33sshaaaennrdded (paid in March 2014). This resulted in total year 2013 declared dividends of $3.395 per share, with $2.54 tihneNd oe 1,i Sign0i.fi5o c5a5nptoArcn ssohuanrtinpgaidPoilniMcaer,cBhas20i1s1.ofPTroetsaelnstsaettisonevebeen immaterial revised foprc the additional $0.855 per share paid in March 2014. Total assets have been immaterially revised for prior periods 5 per share paid periods as in discussed in Note 1, Significant Accounting Policies, Basis ofPresentation. 16 16 22775500..00001166 TabeofComets Table of Contents Hem 7. Managements Discussion and Analysiofs Financial Condition snd ResofuOpleestionss. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. OM MFaaSnnaIaggseemimneeannct''isaDDliissscctuautssseiimooennntaasnnwdd AAninalpyatasrislaotohfiyfvFFeisinnraaoinncmcisiaahlleCCoponndediitrtiisoonnpnaendodcfRRemesasunulalttgsseoomfefOnOptep.rearSatMti'isoonnMss ((DMMDAD&AAs))piisrseddseeessniitggenndeeiddnt0iogpphrrtoovvseiidcdteeioaansrr:esaddeerr of 3M's financial statements with a narrative from the perspective of management. 3M's MD&A is presented in eight sections: + OORewvwlertrsivoiefewwOpeaions + RPPPeeearfsrfuooflrrtmosmamoannafccOneecpbbbeeyyyraGBBtieuouosnsgiisrnneaespssshiSSceeggAmmrecenantt ++ NCPCereriwirttfiiocnAramlclcAAaonccucccneootuubinnnygttiGinPengrogoEgnrEsoatusipmnhtcaieectmesAesnrtesa + New- Accounting Pronouncements FiFniannancciiaallCIoonsdiutmieonntasndLiidy Financial Condition and Liquidity Financial Instruments Forarlookin stentisn lem 7 may invesand uncertaithnatt cioeulsd caus els to ir ately fom those Forward-looking statements in Item 7 may involve risks and uncertainties that could cause results to differ materially from those rejoted refer fo th section entitled "Cautionary Note Concerning Factors That May Alot Furs Rew" in Hem1 and he risk projected (refer to the section entitled "Cautionary Note Concerning Factors That May Affect Future Results" in Item 1 and the risk Tocors provided n len IA for discussion of heerisks nd uncraintie. factors provided in Item 1A for discussion of these risks and uncertainties). OVERVIEW OVERVIEW d33MMeiisss dacidvievirnesrNisfiofiieeedd16gs,loobblealll cmmiaannvuificanucttrhueeresfr,sctehcqnhuaonroltloeorggoyyf2iin0mn1po6ov,satto3orraamnnddammdaearrkkpeerttoeedrruooctff4ainwweiidrdeepvvoaarrrtiiietntygyocofhfappnrrgooedduicutnscavatnnsodd slseervwvvoiiiecfsens.f.gsAAssbusiness Sodspeceegasrcmmareteinbinteotssnd.siSSnineNggfmoivteteeno1tp6ifen,rofareotfmrifmanegtcatitbiiovouennsiippnnrrgetehesseeesnnfcttiegerdsmdtehhqneeutrra:eeriitnneIrrrneeodffflluee2ccs0ttt1ss6tth,hSee3aMfimmeptmpyaaacacntdtodeofGaftrtphharseposehdeiucccchht:aalninHnggeeeeslsrelffpooorrCralatillnel gppeeFcrrhliiaooanddgstserppieronesnsvceotnnlevteddid.n.gE33ntM wcMrogmmoyaafnnniaatdsggebessusi5itsness ACoConponeynsrsaueutmimreoerne.rns. ciFFnerrfsooimvtmoe operating business segments: Industrial; Safety and Graphics; Health Care; Electronics and Energy; and Mgeemobgrraapnhai"c peersrpecotitvhe,e nfoyrmeer rSepearatsfioonEs MMeEdAiarbeuseironeEsurcoqpue,ieMdibly e3MEsfetraonmdPAolfypioreonin 2c0o15m.bined a geographic perspective, any references to EMEA refer to Europe, Middle East and Africa on a combined basis, basis. Any references to "Membrana" refer to the former Separations Media business acquired by 3M from Polypore in 2015. armpie nshagre (EPS) aribtuo3tMcaombmoen sharchotders died: Earnings per share (EPS) attributable to 3M common shareholders - diluted: "T2Th0hee0f4foo,lllloowwiinngg table table provides provides the the incense increase decease) (decrease) in ied diluted amings earnings prper share share for for 2016 2016 compared compared 0to 2015, 2015, adand 2013 2015 compared compared to 2014. rp (Earnings per diluted share) Some prod lst yor Same period last year Increase (decrease) in camings er sa-dirst duc 0: Increase/(decrease) in earnings per share - diluted, due to: Operaiona benefits Operational benefits 2015 rescuing charges 2015 restructuring charges Accuiiioannsd desires Acquisitions and divestitures Foreign xchange mpocts Foreign exchange impacts Netineres expense Net interest expense Income ax rte Income tax rate Shaofrcoemmsonsockcutsanding Shares of common stock outstanding Cumen period Current period e 5 TSe7 2016 Year ended December 31, 7.58 $ 2015 7.49 ot0.16 ou0.14 pn0.14 19 (0.14) 0 (0.05) 0090.09 ox0.24 3 ES 8.16 $ on0.42 ) (0.14) 0) (0.02) 13) (0.43) ) (0.02) om0.28 57.58 Year2016vera Year2015 EPS: Year 2016 versus Year 2015 EPS: $FF7oo.rr5tt8opotoaalryydeeaiarre22d00116s6,a, rneeett iiinnncc2o0om1m5ee, aaatttnbriuibntucatrabeblalseeetooo33fMM7.7wwpeasrsc$$e5n5t.00a55n00abbpiillolliioodnni,,looutre$d8.s18h.616aprperbrasidiistl.uetOedpderssahhtaoirreoe,naccloommbeppnaaerfreeidtdston$Se4483.s83s3 bbciilllaliioonnn,s, oo.rr $7.58 per diluted share, in 2015, an increase of 7.7 percent on a per diluted share basis. Operational benefits increased earnings, epeldlpbryicoeenrddelfoiwneed rbventeepienlsicoonstas,ndinosadtdeittiiroenm0enptroedxupcetnisveitsy. Obpeernatsionsbenefits als included the combinationofhigher helped by lower defined benefit pension and postretirement expenses. Operational benefits also included the combination of higher selling prices and lower raw- material costs, in addition to productivity benefits "17 22775500..00001177 Table of Contents resid 10 he fourth quarier 2015 restructuring. These operationsbenefitswere partially fT by th impactoff organi ses related to the fourth quarter 2015 restructuring. These operational benefits were partially offset by the impact of flat organic sales and ower sect lization. Resioucturing actions resulted analr charg of 1 cntper died sar in 2015, which and lower asset utilization. Restructuring actions resulted in an after-tax charge of 14 cents per diluted share in 2015, which provided earnasr bent n 2016. provided a year-on-year benefit in 2016. Acuisitonanddistur impacts, which ar mcssard or th irs lvemonths pstrassctin, elated 0 he sisiof Acquisition and divestiture impacts, which are measured for the first twelve months post-transaction, related to the acquisitions of Membranad Capital Safety (hidquarter 2015 andSender (September2016). and the desiofrPoley fosus (rst quarter Membrana and Capital Safety (third quarter 2015) and Semfinder (September 2016), and the divestitures of Polyfoam (first quarter 2016) the brary systemsbusiness (oath guar 2015 rst quarter 2016), nd he case peconvertingbusiness in France 2016), the library systems business (fourth quarter 2015/first quarter 2016), and the license plate converting business in France Courh quarter 2015) In adition, nthe arth guarof2016, 3M sd theassets of protective lms busines ad ts cathe (fourth quarter 2015). In addition, in the fourth quarter of 2016, 3M sold the assets of its protective films business and its cathode batry technolo outisensing busines. On combined basis these scsi ves re yoycar impacts rossi 11 battery technology out-licensing business. On a combined basis, these acquisition/divestiture year-on-year impacts resulted in a 14 centspo dilucdshar benefit fo camingspe har in 2016, driven by sold performances from 2015 action nd yar-on-scar cents per diluted share benefit to earnings per share in 2016, driven by solid performances from 2015 acquisitions and year-on-year Giesegains, Refer toot2 orfurtherdieussion of hes acquisition restr moet. divestiture gains. Refer to Note 2 for further discussion of these acquisition/divestiture impacts. Foreign curency impacts (netof hedging) decreased pr- camingbsy approximately S127 milion yarncorn 2016, Foreign currency impacts (net of hedging) decreased pre-tax earnings by approximately $127 million year-on-year in 2016, excldingthmatoffeign cuisny change on rats. Ti cqulen 0 ya you desrese of 14 cptritsed excluding the impact of foreign currency changes on tax rates. This is equivalent to a year-on-year decrease of 14 cents per diluted Shae for 2016, share for 2016. "OOTvhveeesrrettahhceetippaoasnstst fFheawwv-eyceaeardrss,,o33aMnM hsinaacsrlteaaekseenn aaccettiiroonnessstoebbxeepttetenersrepopytesiamri-izoen-iiytsseaccraapnpiita2ll01ss6tt,rnucctltauurrgreeelaaynndddurreeddouuHccieegiihtsserccooassvtteroofafgcceaadppeiitbtatal bbbyaylaaaddndcdieinnsggddeebbt.. These actions have led to an increase in interest expense year-on-year in 2016, largely due to higher average debt balances. r"TTihhveeeninnccbooymmeenttauaxmbraeattreeowwfaasfs2c268t..o33rappseerrrcceeefnnettriiennnc22e00d116i6n,, Naoddteeeccll.iinneeinoocflfu0d.8i0.8nppgeetrrhcceeennrttsaatggeequpoaoriitnestrs2vv0e1er6sussadaloaspsttticyoeanaror.fTTAhchece2o2u00n11t66inccghhaaSnntggaeendiinanrtadasxUropaetdeatwweaass (drAiSveUn)bNyo.a 2n0u1m6b.e0r9o@fisfaccutsosresdasinreNfeoreen1c),ed in Note 8, including the first quarter 2016 adoption of Accounting Standards Update (ASU) No. 2016-09 (discussed in Note 1). cWWenieegighihtsteeddr-aoavvmeerrsaahggaereeddriileueptuedrdcshshhaaasrreeesssooeuttustfsttaansnddininnggeiinsn22001w1e66reddeepcclaliinrneeaddl3 oppeelrrcceeennbttyvvteehresrusasdlaoaspsttioyyneaarorf,, wwAhhSiiUcchbNboee.nne2e0ffi1t6e-d0ce9ai,rnnwihgnigcshppieenrcsrshheaaarsreee..d TTthhheee caeusted numobfieterd shires benefits from share repurchases, net in 2016, of issuances, were partially offset by the adoption of ASU No. 2016-09, which increased the calculated number of diluted shares in 2016. Refer 10 he ston cited "ResulosfOperations" fo futher discussion. Refer to the section entitled "Results of Operations" for further discussion. Year2015vers Yeur2014EPS: Year 2015 versus Year 2014 EPS: $FF7oo.r4rt9ootpasel tyeesearr 22d00115s5,h,anereet,t iiinnncc2oo0mm1ee4saatttnrbiubitunatcabrblleeeat0osofe33M1M2pwwearssce$$n44t.88a33n33 bbpiillolliiooinn,,aoord$7s.h57a.8r5 ppebrradisistluetOedpdessrhhaaatrriee,o, nccsoommappnaarreeedds1ton54a$945d.9e56thbbeiilllliioonn,, or or $7.49 per diluted share, in 2014, an increase of 1.2 percent on a per diluted share basis. Operational benefits include the ccoosmtsb.iRneasttirounctoufrisnlginagctrioincseiisnccrueasssesdaindNro4marttersaaelloesntadmecarefase,rpcahraargle ooff1c1 cbycshigphreripteensdionshparoeseAtcriesmietnitonbeanncdh combination of selling price increases and raw- material cost decreases, partially offset by higher pension/postretirement benefit Gccdooiivnsvwetsess.rtiiRttuiuenresegtriibummscpiptuanacrecittsnsssgppiarrnciimFmtiaroaranrinisllcyy(edrraieesnllcaadutteesssteoudhtbhienesCNCatopaiptietita4alll)ofSrSeaafsfeuettlthtyyedaabnnirddnaMM raenymesambyfrstbetarrae-ntnmaaasxbacucqhqusaiuirsnigsieeittsioi.oofnnFs1,o,4raaecniedgnntttshhxeepceddhriaivdneivlsguteeittesuidrmiespsuhaoaocrfrtfetest.hhdsAeeecclsqircueeeiamnssiseeteidoplnclaamtatineendgs converting pEurroloufte1d7 per diluted bspsehhuraascrrieneenetbb,syys YpianeppnpFrrroooafvxnici1me2maaaptenterdllcyesn44ut33b, sectaeannnndtttsiaBy<rllaeysaairal-lorlRnoe-oafyltehonaefr,c3ldidb0airriavnprreeyrncsebbnyyyts.taeavmvTh eesrraabgguieensicyynoeaemarsers.-.tooanFn-o-yyrcteeaiaegrrnwccehhaxaascnnhlggaaeernssggeiilenny iffmouornrpeecaiihgcgantnsneegdxexecdcchryaehenaaasgrene-dogrnae-etayesresnairiinn.ngttshhee W EpWeureirigoglhhotatofteded1-d7-aavspveheerarracrageegenebty,ddiYipllueurtntoeexddoisfsmhh1aa2artrepeesselryoocuuet2ntss8ttt,aacanennnddtdiisnn.BggrRiiaennzf2i2el0r0R11o3e5tdaldehceoeclflisi3enn0teeiddpoe33nr..c7a7enppttee.errTecdeehnnett iR yyneceaoarm-roe en-to-oafyxenOas rp-rae1yttr0eosewt6as i3aros7n.l2s65a7.2"rmmgifeloilllrlyiioronun,nh, cwwehhhainidccgihhescdiiunnysccserrieaeoaran-ssoeendd-yceaeiranr.ninggs per diluted share by approximately 28 cents. Refer to the section entitled "Results of Operations" for further discussion. Fourth quarer 2016 salesandoperating incomereals: Fourth-quarter 2016 sales and operating income results: Fourth-qurce 2016 vet incom tbtabe to 3 was 1.15 billion, or S188 per diktedshar, compared 0 S103 billion, or Fourth-quarter 2016 net income attributable to 3M was $1.155 billion, or $1.88 per diluted share, compared to $1.038 billion, or 1.66 per ited sare i the fourth quarterof2015. Fourthuarer 3016 sls totaled $7.3 billion, nesof s04 prc fom $1.66 per diluted share, in the fourth quarter of 2015. Fourth-quarter 2016 sales totaled $7.3 billion, an increase of 0.4 percent from he fourth guarof 2015 Orgnicdoa currency sles increased 116 perc, with organic volume creaseosf 1.5 percent nd the fourth quarter of 2015. Organic-local currency sales increased 1.6 percent, with organic volume increases of 1.5 percent and Highersling price contributing 0.1 pers. Dieses edaced sles by 0.4 percent, hich lated othe oathgute2015 higher selling prices contributing 0.1 percent. Divestitures reduced sales by 0.4 percent, which related to the fourth quarter 2015 sie ofboth te license plat comcring basines in Fence, kong ith substantial ll ofthe ibrarsystems busines. In sin, sale of both the license plate converting business in France, along with substantially all of the library systems business. In addition, inthe fourth quoaf 20i16, 3M soldthe sts ft in the fourth quarter of 2016, 3M sold the assets of its 1s 18 22775500..00001188 TabeofCones Table of Contents 0pp8rroottpeeeccrttciivevenetffiicllmamsrbobuumssiniaesnrsaeannsdd its ccaatthhooddee bbaattteerryy tteecchhnnoollooggyy ut ficnsing out-licensing business. business. Foreign Foreign currency currency rslaton translation reducedslsby reduced sales by 0.8 percent year-on-year. From Fprroimc a busines iambpuosrintessis)n ssIepngdemusnetrntitappleerrSssappfeectctytiivvaeen,,d33GMMraapachchihiciesen,vedeadnodorrgHgaeananilict hlooCscaaarlel--,ccuuwrrirrteehnnccdyyecsslalilneeesss ggirrnooFwwlttehht((rwwohnhiiicsch aiinnncdclluEunddeeerssgyoo,rrggaaannniidcc Cvvooonllusumumnee enarndd sling selling price impacts) in Industrial, Safety and Graphics, and Health Care, with declines in Electronics and Energy, and Consumer. On On aan+noorrggSaaonnliicce lcioncacarlle-acusuemrdren4n.yc6yspeslraclesesnbtbaasssis:d:ustin, i thsls gro ut ld by stomotive OFM, danced materisls, separation and + pSpSouoarrllieieffsiiciicnanttcciororneen,aa,ssaeaednnddd42.ua26uttppooeemrmrccoteetninitvteeiinnfaflSItnaeedfrrmutmsyaatrrraikkaneled,t.wGSSriaatahllpeehssiaddlceee,cscllgwiinirnoetedwhd tsiihnn lslaeeedroiobsnsypcpraaaeccuaeestoeaamsnnddiontccrivoooemomfmOmieEnergM ricgai,ralaalndtpuvrlaaoenn,srcpeptoderartmasttoainotoeanrl.isalfs,ts,epaanradtion and + cScSooaammllemesmeriiencnrcccirriaeaelalasssseeooddlluu2t1t.3.ii2oonnppssee..rrSSccaeealnnleetstsiidndneecHSclaaliifnnleeettydd aCiinnadretr,Gaafrwfeaiipcthhssaiacsffesaet,ltyeywsaiamntnhcddsrsasseleececsusuririntn,cyfor.easessianfertoy:ofienrgigcranaunldess, pherrsioncaalrsea,dfertuy,gdaenldivery essSnyyasdslttemeesmamsihns,,ceraatennaddcsoeiindnndffie1tcc.3ittoioopnnnesrcppnrerdeenvvteecninhntatiiHononnen.ea.llStShilanlCveeesandrtdeeoe,crclwyliiinntaheedddjsuaissllteimggsehnihtntlscy.ireinaossocelrasaltlihnccaaifrrone,of,odaarsmstaathfhteiiitssoynbb,uuscssyriiisntniteecessansslscacinoodnoitcindnheuercoedldniintcooebcdbaeerdeiiu,mmdpp4raua3ccgtteedoddewlbbievyyesrssyootftet : end-market conditions and channel inventory adjustments. Health information systems also declined ofFousrotfhtwquaarreteir.nstallatoigohnes marke ave hepast sr, slo with halenging ormparison of software installations in a tougher market over the past year, along with a challenging comparison sgn due to a against 1s cars slower rate last year's + SmfSooaalulteerrtshaddelqecsucrarseerotaaelssruee.tddio00n.s.6mppoeerrrecsectnthtaininnoEEffllseeecttbcrotynoicndseiacacnnlsddinEEenneiernrggdyy.s.plElaleyetcmtrraootnenriicisa--lresealaantdeddsyssasalleeensssww.eerTreheiffsllaav,t,awwsaiittnhh grIrmoopwrwothveiinmneleneltetcorvtroeonrniriccesscent q`mquuraataoretrerwirastlisaassseoeellnnuoddtci--oommnmasamrrumkkneotitrcecctootinhnodadnnitsiiootmfnifssoeaaantnnbsddryccwahhakaadsnnenoneceefllilintieienvtvisbenenyndttioodsrrpeiilelassiybbemesecaaitsemresieamllmesororacrnseadslsastbaymblasrlteeek,.metEEssn.n,eeTrraghgnyiysd-rwrreelaelaasntteaeenddnbissmalllepeesrsnoeddvreeegccmyll.iiennneeItdndoD22vieppcreeerermceeebcnneettnrtaas 2g0ro1w5.th3iMn tcexlietceodmtmsbuancichasthioentsbmusarikneetss in ene was offset bysnr. whichreduced cnr declines in electrical markets, aenldatreedneowrgaabnliecsenleersgby.yIn3.D5 epcaermenbter 2015, 3M exited its backsheet business in renewable energy, which reduced energy-related organic sales by 3.5 percent year-on-year. + Sale decreased 07perc theConsumerbusinesssgment. Despite channel inscatoy adjustments 3Mposed orgie Sales decreased 0.7 percent in the Consumer business segment. Despite channel inventory adjustments, 3M posted organic roth the home proven,consume heal care, nd born care businesses Th stone andoffice spplcs growth in the home improvement, consumer health care, and home care businesses. The stationery and office supplies Tsince, which was mot pact by channel scaly adjosnnts, declined ar-on-sar business, which was most impacted by channel inventory adjustments, declined year-on-year. From ageographic aren perspective, fourth qarcr 2016 organi locl-<urency sales ness n Latin America Canad, Asia From a geographic area perspective, fourth-quarter 2016 organic local-currency sales increased in Latin America/Canada, Asia Pacific,and the United Sats Organi oc -currncy sles declinedin EMEA Pacific, and the United States. Organic local-currency sales declined in EMEA. OOnnaa+n oorrgg"aaSnnailicce lcioncaLalal-icunumrAremnneycryicssaalleCessabnbaaassdsias::increased 4.1 prsen. 3M saw growth four fit fv busines ssgments fd by Health + Sales SCaael.o Care. iiSSnneaALlleseasitiaiinnnPAMMeamexxeiiirccicoonainr/nCscearanessaasddesad2in411c00rppeepearrecscreeecndnettn.4,t.,1eCCdpaaenbnrayacddeHaantew w. t3asM huuCa ppsaa3rw3ep-prgaes errdocewenCnttohtnasisnnnuddmfoeBBurrrr,aazzoTiiflhl iiiitnssncfgrciervraoesewebtaduhss|1iwnappeesesrrsccpeesnaentgr,t.maelntosf, flcedt by by Health a dpdSeeeacrcllceliiesnnnieetniiiAnnn sEJilaalpeeaPcnct.arcotinEfuiiccssaixnancndrdceaEEosnneluredgrrgy2e.yu.4l.eW pWcdierilrtockheniiinnnitc,AA-nxlseeiidaaaigbPPoyaadccHiibffeuiiasccil,tnhsseasaClsleeaessr,einnCrachnreiedaanCssseoddHnos66uappmgeeeKrrrcco.eennnTttghiiinsswaCgCshrhouiiwnnpaath/1HH1woopannsggepKKarorotnniaac,gln,lydeaaJnnonddpffeiistnnencctrrbreeyaaessaneedd233 + pOppereergrrcccaeeennnnti.ttc. in Japan. Excluding our hcal-curncy saosin electronics-related businesses, the United Ste increased 12 China/Hong percent, led Kong was up by Indust, 11 Hea percent and lthCar, an Japan grew- d Safty an 2 d + GOOGrrrrgaagappanhhniiiiccccssl.hooccaal--ccuurmreennccyy sales in the United States increased ssi EMEA declined 2.4 percent. 1.2 percent, led by Industrial, Health West Europ delined1 perc ss Care, and sronth in Safety Safety and and GfOGrrreaagppaahhniiiccdcse,l,ocaaclnadidln-cIIenundddrurupsesetntrrrciicyaaells,,awwlaemassspicmnmtooEerrMedEthhbaAyanncdnooegfcfoflsiitnentebgdbyyc2h.dda4eelccpllleeiinrnncgeeeesssntiin.innWooSttehahseurtrdEbbuuuArrssoisinpbneeiessssdseggcnrrldooinuupTepsdrs..k1CCepo,enenrrtwcraaehdlnitcEE,haaass3sttMgEEruuoerrwooxtpphpeeitaannnSddtoaM MfpeieitdrdysddilaslneetdEEsasttthe Africa declined 6 percent, impacted by ongoing challenges in Saudi Arabia and Turkey, which 3M expects to persist in the near term. O2O0pp1ee5rraitainnngginiicnnrcceoaomsmeeeoifnnt2th.h2eepffeooruucrretthnhtqgauguaearoterirosoff.2200T11h66e wwcaaassrc22n22-..77ycppaeerrrccceenontmtpooaffrssilaseloesns,, rcceoolmmatppeadarroeedd2t00o122500.e55stppreercctrerntitnoogffcsshaealerssgeinnsttihhneecrffeooauusrrettdhhqoqupuaearrrtateterironogff o2iinn0n-c1coy5ome,meerandmmiaivanrercgsgritieinnatsssuberbyeyogf11a.62.i6.n2spp,peeerrncrccdeeennnttpaatraggogedeeuppcptooioitnvisnit.stt.sy.IIbnnTehnadeedifdyioitetisanorin,-mo, pnllor-oyowweveeaerrrdppcoeeopnnmessriipaooatnnri/inpspgooonsistntrreceetlotiarmrteeemmdcmetaaonrtgtb2ibe0nne1sne.5efTrhesietscctrooutscbtsset,u,nerarifanwiwgt-scmmhwaeaetrerigreei]asplicacnoocrnsrtaet alddseeeccodrfreofeaipesceesrs,ba,ytycinegaartego incstmcats and on-year divestiture gains, eagnadlpcroosdtsu,ctwiviitthytbheenseefiftsenismpGriocvuedssodperatoinnangainnncuoaml be smsargnitnhs.eT"hOepseerbateinnegfiitsncwoemree marin" partially soefcftsieotn,by strategic investments and legal costs, with these items discussed on an annual basis in the "Operating income margin" section. 119 22775500..00001199 TTabaleoofbfCCoolmnetetensts Vear 2016aesandoperatingincomerel: Year 2016 sales and operating income results: vSSooallleeussmteoostaaeledcdi$$n33s00..11 bi0i.lol8ionpne,,raaceddneetccrareesaasseee ooofff0f0s..5e5tppeebrrycceesnnetltlfrirnoogmmpr22i001c155.i. nOOrcrggraanneioicafllosocca0a.l1l-pc-eucrrcurerenrnt.ccyycssilaelsessiddoeecnclliisnneedddo0.d10.1 pp1eer2rccepenentr,t,cwewniitth1hoosrrgegasin.iec Wvhoilulemdeisvdeestcilitnuerse reducedslesby 0.4 percent. Frei of 0.8 percent largely offset by sellingcpurrirceenicnycrreaansselsatoifo0n.7repdeurcceednst.lAescqbuyisi1ti2onpseracdednteds1a.2 rpearceeanrt.to sales, while divestitures reduced sales by 0.4 percent. Foreign currency translation reduced sales by 1.2 percent year-on-year. GFFrrraoopmmhiacasbb,uuss1iin9neepssesrssceeegngtmmeiennntCt popeenrrmsspmpeeecctrit,ivvees,,odorrwggearaneicfllloaotccailnl--cIcunrdrurrsentncrcayyls,slawelhesislniencscrlreeesassseedddec33l..i55nppeederr7cc.ee5nnttpeiinrncHHeeneatalltitnhhECClaarere,c, t22.o22nppsieencrrdccseennEttneiinrngSSy.aaffetFtyyroaamnndda cGgSeuroaosgpr,hsaipc0sha:,ic1p.aa9erreparaearppceeerrnnsstppEeeinccMitECviveAoe,,n, s22un00md11e66rd,ooerracggnlaaidnnniweiccdell2roec.c8afallpla--etccruiucnrerrnrIentnndcciuynysAtssraasilalaeel,ssPwggacrrheieiwfliwe-c.33s..a7R7leeppfseeedrrrcceeec1n0nlittnthieinendsLL7taa.t5toiinnpneAArmcmceenerniritliccilnaae/dECCalaenn"caaPtdrdeaoaf,n,oir0c0m.s.55aanppnceederrccEbeeynnnettBrguiinsyi.thnhFeeersoUUsmnniitateedd Segment" States, 0.4 and "Peformance by Geographic Are" oradiioal deta. percent in EMEA, and declined 2.8 percent in Asia Pacific. Refer to the sections entitled "Performance by Business Segment" and "Performance by Geographic Area" for additional detail. OOpoppienetrrsan.tiinnRgegsiitnnrccioocmmteeiniinng22c00t11i66owwnaarse22s44l..00edppeeirrncceenpntrtoeo-fftsaslaxelsce,hs,arccgooemmoppfaarr$ee1dd1to0m22i22l.l99ioppneerircncee2nn0tt1oo5f,fsswlaheliesschiinnp22r0o01v15i5,d,eadnaiinynceracerra-soeen-ooyffea1Lr.I1bppeeerrccfeennttnaagg0ee16. points. Restructuring actions resulted in a pre-tax charge of $114 million in 2015, which provided a year-on-year benefit in 2016. "pTehnessieonrepsoussirltroeimnecnltubdeedntbecnoesftsi.t fRoemerthoetchoembsienctaitoinonaotfesedlli"ng priRceionfcOrepeearsaetsl ioanns"dfrormrathereialdicsocsutsdseicorneases, pus lower These results also included a benefit from the combination of selling price increases and raw- material cost decreases, plus lower pension/postretirement benefit costs. Refer to the section entitled "Results of Operations" for further discussion. Vear 2015salesand operatingincomeres: Year 2015 sales and operating income results: Soles oad $303 billiona, decrease of 49 percent rom 2014. Organic local-currenysales sre 13 percent, wihbiherorgie Sales totaled $30.3 billion, a decrease of 4.9 percent from 2014. Organic local-currency sales grew- 1.3 percent, with higher organic olesontibuting 0.2 percent and sling rice increases cotrufing 1.1 een. Acquisons added 0.3percent fo ales. while volumes contributing 0.2 percent and selling price increases contributing 1.1 percent. Acquisitions added 0.8 percent to sales, while ivsttues reduced sles by 0.2 percent. Forign curency trast reduced sles by 6 pret yao cor. divestitures reduced sales by 0.2 percent. Foreign currency translation reduced sales by 6.8 percent year-on-year. 2FF.rr4oomemraasbbuutssiiinnneesSssasseeyggmmneendnttGppreearrpssphpeieccctsit,ivveae,n,odor0gr.a4nnpicrslloeocncatll--icuurIrrrnendncucysystsliaelleswshniinclcrereseasalsseeesddde33c.77lippneeerrdcceen1n.tt5piiennrHHceeeantlththinCCaaErreel,,e33..c44rppeeorrcceaeensnndtt EiinnneCCroognynsusFmreeo,rm, a 2.4 percent in Safety and Graphics, and 0.4 percent in Industrial, while sales declined 1.5 percent in Electronics and cAomgerraipciaiCcaanraad,pe0rs9pepcetirvcen,t2i0n1A5soargaicellocaanldcr0t.5necryescatleisngErMeEwA.|RpeefrecrenotthehseecUtniiotnesdenSaitlees,d S"Ppeefoermnancne geographic area perspective, 2015 organic local-currency sales grew 2.1 percent in the United States, 1.5 percent in LLbEayantteiiBnrnugsyi.nFesrosm a ASemgemreincat/"Caanndad"aP,e0f.o9rpmearncceentbiyn GAesoigarPaapchiificc,Aarned"0.o8rpaedrdcietnitoninalEdMtE.A. Refer to the sections entitled "Performance by Business Segment" and "Performance by Geographic Area" for additional detail. OOpoppineetrnsa.itinTnhggeiisnneccoromemaeeliisnn 2i200n115cwwlaassu22b2d2e.9n9eeppdfercfeeonmtoroftfsheslcaclseosm,e,bccioonnammtppiaaotrrneeoddft1so0e2l22n2.g44 pppeerrriccceenntntooeffsssasaleleesssaiinnn d2200r11a44w,, aemannteiinrncirareelaacssoeetoofdfe0c.50r.5eppaseeerrcsc,eennpttaaagrgteelly oOpopfoffefisnrietacstt.bbiyTyonhhhseii"sggehhfoeerrrersFppueelrntnssseiiiononncdl/iuppsdoocessustdtrseeiaitoibrnr.eecmnmeeefnnittt enecotasnd 2015 resiacurin charges Refer from the combination of selling price increases and benefit costs and 2015 restructuring charges. Refer fo the scton raw- material to the section ented"Resultsof cost decreases, partially entitled "Results of Operations" for further discussion. 20 22775500..00002200 Table of Contents Salesandoperating incomebybusinessscgment: Sales and operating income by business segment: "2TT0hh1ee.fFollllooawwidinniggotnbabllteeoshcceoonndttiaisinncusssalileoessn sabnnelddowoo.ppeerrraattfiinngg1iinnhcceoommseecirreossnultetsnbbtyyebbduuss"iinnPeeessfssorssemegagmmnecenenttbyffoorBrutthhseeinyeeaesarsrssSeegndmdeeedndtDD"xesccedmmbbe"erPre33f11o,r,2m20u0n11c66eaabnnydd Gu2Ges0eoi1og5ngr.crasaIpnsphshaieidccgdmAAietrirnoeetna"s"tolliatnthteeerurididnniisnMMcguCDsDos&riIopAnorbffoaeorltoraewmm-a,onorrdereefdUednreeattolsalitlloheaedtseddeidicss.tcciuouRsnsssieeioonnntfittooolefeNfdtohtr"etPsseaar1llfe6eossfromaarnaddandciidnenicbcotymioomBenrureseisisnnuuflelotstrssmooaSftfetitghohmnee eoCCnnootb"mmupapsanadninyys"Psaaesnnreddfgoifmrtmses nrrateenssscp,peeeccbttyiivvee binucslinudeisnsgseEglimmeinnatsti(oinncolfudDiunaglCCorerdpiot.rate and Unallocated). Refer to Note 16 for additional information on business segments, including Elimination of Dual Credit. OB(uDsoillonaressisnSomegillmioenns)ts SIanIBdnfuudtssutiysnrtieraiasnasldl SGergampheinctss ElHHSeeaecfaatellrttyohnCaCioncadrsreaeGnrdaphEincesrgy CCECoorlonepnscosturruomamnteeircrasnadnUdnEalnleorgcyated Corporate and Unallocated TEoliamiCnaotmipoanonyf.DualCredit Elimination of Dual Credit Total Company Seame Net Sin fl Sales 2016 % of Total Oe T ane Oe e naone Oper. jeSiw e s Teal ome Sie sme Income Net Sales 2015 % of Total Oper. Income 2016 vs 2015 % change Net Oper. Sales Income SISIS 33% S 23% $ 10,313 Se N% m0 5,660 Saw as 5,527 AB6 0 G60% LOS 4,826 GH 9% ees 4,482 5 Cwoam 9 ow ade 0%) (708) Sw 000% ST $ 30,109 34.3 % $ 2,376 18.8 % 1,390 18.4 % 1,754 16.0 % 1,075 14.9 % 1,064 -- % (280) (2.4)% (156) 100.0 % $ 7,223 S105 $ 10,295 SSIS 5,515 sao 5,420 28 5,253 a2 4,422 11 62) (632) S02 $ 30,274 30%S 22% 34.0 % $ 2,256 IR2% LMS 18.2 % 1,305 mon Imi 17.9 % 1,724 man Lo 17.4 % 1,109 len Ie 14.6 % 1,046 woes % (355) eure am) (2.1)% (139) 000% Soo 100.0 % $ 6,946 02% 0.2 % 26% 2.6 % 20% 2.0 % Gln (8.1)% 13% 1.3 % m3 (0.5)% 3% 5.3 % 66% 6.6 % se 1.8 % Gn (3.1)% 17% 1.7 % 40% 4.0 % Year ended December 31, 2016 Organic ere Worldwide Sales Change Analysis By Business Segment nds Industrial Sify md Graphics Saety aaad Graphics Heath Care Health Care Electronics nd cry Electronics and Energy Commer Consumer "Tol Company Total Company poy localcurrency sales =% 22% 2.2 % 350 3.5 % as(7.5)% 191.9 % oi(0.1)% jeuibns Acquisitions 16% 1.6 % 40m 4.0 % 02% 0.2 % "un% ==,% TT1.2 % Desires Divestitures ware (0.3)% ase (1.9)% Zu% =% --u,% rs (0.4)% _Trondaten Translation air(1.1)% are (1.7)% arn (1.7)% were (0.6)% wer, (0.6)% 2 (1.2)% ae Total sales change 0% 0.2 % 260 2.6 % 200 2.0 % ire (8.1)% 13% 1.3 % mee (0.5)% cSSuoalrleeessnciinnys220l01e16sgddereccorrweetaahsesd(ewd00h..i55cphpeiernrccceelnnuttd,,eiismmoppraagccattneeiddcvbbyoylfFaoomrreeeiiaggnnndccuusrrerrleelnniccnyyg trrrisacnnesslaamitioponni,, w)whhdiieccchhlirrenededuduc0c.eedd sspaelreecsebsnbyty, 1c1.2.2ipspeeirrccoeennnt.ts. OOardrggdaeandiicc1ll2ooccaall- Ccppaeuerrrrccreeeenbnntyc,t,y2nas.nda0dlepddesriivgceervnosttw,eitturhCreso(swnrrheseidcduuhumccieenebddcyrlssuade1.3leessspbboeyyrrgc00ea.n.n4t4i,cppeaevrrnoccdeleunntmI.tn.edSuSasaanrlldeieasssliiennbllyUiU.nS.0gS..2pdrdeiooclrlellsaairtrmss,piinanwccctrrhsee)aaissdeeesddcaliioinnnseiSSdanaff0eeE.t1tlyypeaaetnnrddrceoGGnnrtr,aiapaacphcnshqdicuisEicsbnbisyeytiro2g2ny..6spdeaperdeccdrleceinedntne,td1,.2.HHe1eaalltthh pCppeeearrrrcceeteninbt.tyn.g2AAl.i0lllnpoocefor3cfmeMFnm't'ass,rCfigivovieennssbbuFuumossriie2nnree0bss1yss6ss1eew.3ggemmrpeeeenrn2tc4t.ses0nppptoe,osrsatctneeedddntIoon,pdpeucrsaittrioinnagl mbiinynccp0o0o.m2ma2eep.emm9rrcaaeregnerritn,esgdwnoothfifimflmenorros2srae0le1ttsh5hainan 22 erent Electronics 22 percent n 216. Workvide and Energy declined in 2016. Worldwide 8.1 operating income margins for 2016 were 24.0 percent, compared to 22.9 percent for 2015. OSSonallgeemssiiincn 22o0c01a15l-ddceecucrrreenaacsesydsead4l.e949sgppererroccweentntht,, (ssuuwbbhssittacannittiniaacllllluyydiiemmsopparacgctateenddicbbyyvffooorrleeiieggnnanccudurrrrleeinnnccgyy pttrrraainnsscllaattiiimoonpn,a,cwwtshh)iicwchard1seud3cupceeeddrssclael,essbabycyp66i..8s8ippoeernrcsecan.td.ded 0bO03y.8rg2ppa7enerrisccpoeelnrnoc,tce,anaaltnn-,cdduSaddrfriievevetnesycstytiaittnsuudarrleeeGsssrrrageeprddhouuiwccceetshbdd y(aswallh3eeis.schbbpyyeinr00c.c2.el2untdep,eersnrscodetrn.gtia.nnSSbiacloletvesonliiunndmUaU.es.SS,ia.nlddd,oolslalleanlalrdsisndEdgelecepccltrliiircnnoeneeiddicmiinnpaaCCncoodtsnn)sEsuwnmeuarsmegrye1b,b.r3yysp22le..2sr2ceppdeneertrcc,cleeainntcn,tqe,duHHibseeyiatali6lott.nhh3sCCaaadrrdeeed obpupryecer2ceren.t7tni.tnp.geAArcillenlonocftof, m3lSeMaFfm''essatyrfiigavvineednbbfuuGsosirrian2npe0ehss1sisc5ssseegwbgmeymern3et.n82s2t.s9ppepporeocsrsetctneeetddn, tooa,nppdecriainotinbnmgotphiinnacIcnfoordommu2eees.tmmrd4iaaalrp,gerairnncsgdeonoEftiflmfemnoocrotr2rsroee0n1ttihhc4aasna2n211d erent Energy, percent n 2015. Worldwide sales declined by 6.3 in 2015. Worldwide operating income margins for 2015 were 22.9 percent, compared to 22.4 percent for 2014. Financia condition: Financial condition: d35eMMcrgegaeesnneeeroarftaed$t2e6$0d66..7mibililllllioononowofhfoeopnpeercraoatmtiipnnaggriscnagshh2f0ll1oow5w-1ii0nn022100411.66,,RsaennfeicnrcorretaheseeoaosfefScs$t22i4eo4n22emmitilllliidoonnFwwihhneeannnccciooammlppCraorneedddit0toio22n001a15n5.d. TTLhhiiiqssufloilldloowwaeteddera in dMeIcrSeaAsefoorfa$d2i0s6cumssiilolinonofwtheenscopmapcairinngg2c0a1s5h lows. In February 2016, 3M Boardof to 2014. Refer to the section entitled "Financial Condition and Liquidity" later in MD&A for a discussion of items impacting cash flow-s. In February 2016, 3M's Board of 221 22775500..00002211 TaofbColnees Table of Contents DFDeiibrterccutatororysr2s0aau1tt4hhorcriipzzueddrhtthaheserreepppruuorrgccrhhaaamss.eeooTffhiuupsptontoeSw$11p00roibgillrllaioomnhaoosff 33noM'sp'srcoet-ussttsiataanbndldiiinnsghgcdcoocmmudmmodontn.sstoIocnckk2,,0ww1,hhiictchherpCeplolmaopceaddntythheCpuoCrmocphmaapsneaydn'y$'ss375 eibFxlielplbleiorocunntasrooyftfio2ittp0ssu1nor4cwnhrneapssseutoorc$cck2hk,.a,5sccebooimmplplrpoiaoagrnrreetaoddmtS1.op1T.rph5ucibsrhcinlhaleaiwssoene-spooroffomfgsmroaoomwrrenhttahhssaaonnnco$$k85pirbbneii-2llell0isi1oto7ann.boolifIfsinhitteFssdeooberwwnunndarstdytaoot2cek0k.1Iec7naa,cc2hhF01cys6ea,arrtBhiioenna2Cr20d0oo1m1f5paaDannindrdy2ec20pt01uo14rr4c.sh. daTTeshcheleedaCCr$eo3od.mm7pa5pafannyty expects to purchase $2.5 billion to $4.5 billion of its own stock in 2017. In February 2017, 3M's Board of Directors declared a first- q 3M. 3aM2d01r 7edi0vbieodetnsdorcfapitalS1.1r75 pieroshatre,caapitialndefcinerodfaespdeaebrtcsp.lsThqitsmya)rkweasdt5h3SpoehnctonasecDuctimvbeeerar31o,fd2i01i6d,e3n8d iencrresatsesatfor quarter 2017 dividend of $1.175 per share, an increase of 6 percent. This marked the 59th consecutive year of dividend increases for 3DDSM teeac.nced3emaMrmbdbe'sr&e3dP3r1eo1b,,ot22rt00'o11s5t5,oa,tnaaadlnndcdaan33p55AitpTapelercrrcraceetedninoittt(aatrtotattDDaielnegccc,eaewpmmiibtbtaehelrrd33e1s1,fa,ibn22le00ed11o.4a.stTTdohehebe,tCCpooflummrspopmaeaqnnMuyyiothyhoaa)ssdwaasannsAIA5An3ATs-pctercorercendedinSittterrarvaatittcDiinneg.eg,c,wTewimhlietbChheorams3sip1tab,abl2nle0ey1oo6ugu,ttel4loo8nookrpk,ee, rfsrcroeomnm.t at SSgtnaintdiacradnt&oPngoooirn'sgcaandshanlAow1 carneddihtarsatpirnogv,ewniath acst1acblceeaopusitlolokma, rfkroemts nding throughout business cle Moody's Investors Service. The Company generates significant ongoing cash flow- and has proven access to capital markets funding throughout business cycles. Rav materi: Raw materials: dI1ne0c.2s20a01s16,e,stthhineecrCCi oommppaannyyaeenxxdpeterhrieieodncecereiddvaddteeiccvlleiicnnhiinneggmcciooasstltssfffsoodrrtmmooocsstkt rrmawna-rmmkatat.eterrihiaaillsccaaittneogugoomrrieedssraaonnvddeytrermasnsrsp.pooonrraytatatiirooGnnoufsulte,ld,eddsuuteeesllaasrrsggeeilltyya1tonpryriiccee decreases Treecinvdinog feedstock siccnaalttceergguioodrrteiieeosG,i,luiiannanccdtlluutddhiienngogdfepparelievtlrtaortrlienvouemlmchabbeatamsseeidrcdaitml f0eaeteeimdrielsatelo,sct,kmsmmiirnnaeeraerksaseolstn,s,a.bmmTleyethtaiafsllossirnasentnsuddarnwwblodoeorooddpvprepoudypluepcabtbria-aoossnened-dryepepqraruooriddrcuucmoctesstnts.t.dseTT.cooreItddsaaaistteeemspttihhenoeCsmoCsamoinmpybapl0anneyy is is rpmperrceededaiiivcctitnnffguuttusuuurrefeffsisochhpioaeoernrrttataactgqgieueostsannootuifhftiroearwrsu-ogmmfihaaatltclenearrrraiiawelglu-sslmormatttehahreeianiplmsacptoagtcmteeoaaennfmtyyeietxsssuiunccrtehhiatnsssgohhonaoraitbaglgyemesasftoewwrroeoiusauellleddaibnhhvlaaeevn.ept.roor33idMMeuschhtiiaaosdsnadavrveoeoiqvidudeeierlddeomddipiessnmrttuespp.aintnciIottdnnisutoioma'iptstsoissoiblne toof manufacturing operations through careful management dndicoomnmodsiutpyppiscosurscwea.ps3.Mmanag spend category additional supply sources. 3M manages spend category pic risk of existing price risks hough negoited ppl cotracts, price raw- material inventories and development through negotiated supply contracts, price protection greets and qualification of protection agreements and commodity price swaps. Pensonandposrtivement definedbeneiconibusionplans: Pension and postretirement defined benefit/contribution plans: On workvid basis,3M' pension nd postsirement plans wer$e4 pssst funded at esr-<nd 2016, The rary U.S. qulfiod On a worldwide basis, 3M's pension and postretirement plans were 84 percent funded at year-end 2016. The primary U.S. qualified pension pln, whichis approximately 6 percent fhe worldwide pension olgtion, was 9 percent ded and the neato] pension plan, which is approximately 68 percent of the worldwide pension obligation, was 90 percent funded and the international pension ln wer8 preent funded The U.S. noua pension pla nofundeddu fo considerations and other pension plans were 85 percent funded. The U.S. non-qualified pension plan is not funded due to tax considerations and other factors. Asst return in 206for the primary U.S. qualified pension lan wre $ 3% as 3 sical nests i both growth factors. Asset returns in 2016 for the primary U.S. qualified pension plan were 5.8%, as 3M strategically invests in both growth act snd fed income matching sats o manage ts ded satu. For the primary U.S, usd pion la, te xpecied assets and fixed income matching assets to manage its funded status. For the primary U.S. qualified pension plan, the expected Hongem teof etm omansnnuslizdbasis for 2017 7.25%, down 0.25% from 201, Th primary U.S. aulifisd pens lan long-term rate of return on an annualized basis for 2017 is 7.25%, down 0.25% from 2016. The primary U.S. qualified pension plan yearend2016 discount rt was 21%, down 0.26 erat pints fom th ycr-ond 2013 discount ateof 17% The decrease year-end 2016 discount rate was 4.21%, down 0.26 percentage points from the year-end 2015 discount rate of 4.47%. The decrease in US. discount rts resale nan ncrcased valuston ofhe projected benefit obligation (PO) The las fd satus in U.S. discount rates resulted in an increased valuation of the projected benefit obligation (PBO). The plan's funded status decreased sgh in 201as the growth in the PBO increaseadt revte tehen the plan asses retuned in 2016. Additonal decreased slightly in 2016 as the growth in the PBO increased at a greater rate than the plan assets returned in 2016. Additional etlanddisconof temationsl lan sso tur nddiscount ees provided in Note 11 (Pension and Posttrement detail and discussion of international plan asset returns and discount rates is provided in Note 11 (Pension and Postretirement Benefit Plans). Benefit Plans). 3p5MoMsetexxeppteeeccmttsesnttotoccpoolnntartiibnrnuet2e0aa1p7pp.prroToshxieimmaCatoteemllpyyaS$n33y0000dmmoiillllniioootnn1ht0oavS$e550000reimquilillrieoodnoioffmcaausshhmtocitatssshgllopobebanaslliddoeneffciinonneetddrbbiebenunetefifioitnt ppoeebrlnsisgiioaotnniaoannnddorts Us. Sppaploneascntsirsaeliitninrte22rm00m1i1e7n.7nat.t33piMlMoannebesexxnpipneeefcc2itt0tsss1gg7all.oonTbbdaahllteddCeefofhiimnn0eepddarnnbbyceenrnde)eafofiseittseppnbeeoyrntsshaiiopoanpnvreaaonnaxddirmeppaqotuoesitlrsreyedttSirm7me4minemeiimnnltuleiemoxxnpcpepaensrsnheesipieanenn22hs0i01oe1n77nc((ocbbnoetmforopirbraeurtsesieodetnt0leeommb20lesi1ng6,ta.st,RioeccnfuuerfrttoariltlimotesertUnist.sSc,.al special termination benefits and other) to increase by approximately $74 million Accocnocuenmtiinngg3EstMimapteenss"iownitnhdinpMstD. rAetvaenmdenNtopela1s1.(Pension nd Postetiement Accounting Estimates" within MD&A and Note 11 (Pension and Postretirement Heme pre-tax Benefit Ploarnaddiston)al infomation when compared to 2016. Refer to Plans) for additional information "Critical concerning 3M's pension and post-retirement plans. 4BB0eeg1giiKnn)nnicinnoggmrooinnbJuJaatnnouunaasrryyfo11r,.U22.00S11.66,c, pwwliiotthyherreeesss.ppeeccPtttrtooeddeevffiiinneeoddbauccsoosnntltrioibybmautttiioeonnapllaasnhs,,etthheeemCCpolomompypaeannwyyasrreedHdiuurcecdee,dd utitpsstmma6actchhooofenleeimgmippblllooeyyeceeoempensation 40 l(k) contributions for U.S. employees. Previously, based on the date the employee was hired, up to 6% of eligible compensation w6a0s%aorch10e0d%,inrcesopesctaivetly. eTohfe6s0re%duc7ti5ono%irn t1h0e0%c.omBpeangyi'nsinmgaticn2h0c1,e5d% 2o0f1l6idebfinceodmcpoetnrsiabtuitoonnspetnesieondexapeniseesboyf 5%. was matched in cash at rates of 60%, 75% or 100%. Beginning in 2016, 5% of eligible compensation is matched at rates of 45%, a6p0p%roosrim1a00i%ly, S30 million respectively. The reduction in the company's match reduced 2016 defined contribution pension expense by approximately $30 million. Year 2017announceddivestitures: Year 2017 announced divestitures: rIInnaDnDesecacceeimmobnbeererx22p001e16c6,,t3e3MdM f((oSScaalffoetstyye adannuddrGGirrtnaahppghhiirccsstBBua ussiinnoeefssf s2))0aa1nn7nnoouIunnnccJaeendduttahhraaytt i2tt0a1a7gg,rree3eddMto(SssaeeflltlyitssaidnddeenGntriyatyphmmiacansnaaggeemmeenntt busines. business. The The transaction is expected to close during the first half of 2017. In January 2017, 3M (Safety and Graphics 222 22775500..00002222 TabeofComets Table of Contents Binsso) the asstofits sat reserption eyewearbusines. The Company cxpsts pra ginof appoint S500 Business) sold the assets of its safety prescription eyewear business. The Company expects a pre-tax gain of approximately $500 millon in 2017 a. eal of he divestiture. Referfo Note2 foraddtional discusion. million in 2017 as a result of these two divestitures. Refer to Note 2 for additional discussion. RESULTS OFOPERATI ONS RESULTS OF OPERATI ONS NetSle: Net Sales: NNeett"sesaalolefess(o(irmlkidlllviioiondnse)) sles CCVooolmm%upmpoeoon.fneweantotsrsolrdoogfwfaennidietectssseaallseess cchhaannggee:: PrViocleume OnPgrimceico ca organic lcurency s les Organic local-currency DAicvuesitsiiuorenss Acquisitions sales TTDTortrinavanselssasltailitteuioosrnencshange Total sales change U.S. SHAW $12,188 sw 40.5 % 07% 0.7 % wy(0.2) 0s0.5 131.3 )(0.6) =-2% 1.2 % 2016 Intl. SUT $17,921 msw 59.5 % aon (1.6)% 121.2 "on(0.4) 111.1 ey(0.4) _ew(2.0) (0% (1.7)% Sei Worldwide $ 30,109 U.S. Sow $ 12,049 sn 39.8 % 8% 17% (0.8)% 7 0s 0.7 on ar (0.1) 12 12 1.2 0H 0h (0.4) ay __ (1.2) 08% 29% (0.5)% 1.7 % 0.4 2.1 1.2 (0.4) 2.9 % 2015 Intl. S185 $18,225 __@260.2 % sn (0.5)% ia1.4 ov0.9 os0.5 0p(0.1) doy (10.7) 0a (9.4)% Soin Worldwide $ 30,274 02% 0.2 % In1.1 TT1.3 os0.8 0)(0.2) 63)(6.8) aor (4.9)% IU1nn0i22t00e11d66,S, aootrregg,aanniaiccndoloc0ca.al4l--pcceuurrrcrreennnctcyyisnsaaElleMessEddAee,cclliwinhneiedlde00.A.11sipraesrPecaectni,ft,icwidtitehhclininnceerdesa2.sses pooeffr3c.77.ppeeOrrrccegennattniiinn oLLaaatltiicnnuAArmmeenerrieiccyaa/sCClaaensnadagard,o,0n.5h05 ppweearrsccee0nnt2t in in the the Up5per5nrcpicteeenndettScatcrrarotioesnsscss,Hdeadeanveeldvetle0hnol.op4Cpiapitnnreggr,cmme2ana.rt2rkkinepetetEs,e,MeaannnEtddAidd,neewScclahliilinnlteeeyddAa00s.n3.i3da ppPGeraercacripefhinscitcdii.nnecaddleiednvveee1dll.oo29ppp.e8eeddrpcmmeearancrretkkneeittnt.ssOC. oW Wrngosoarunrklmidcdewrwloi,idcdewahloo-icrrluggearasrnnleiinecccsllyoowccseaaarlll-eccsuufgrrarrteeonnwnectyyhsIslwnaedalessuss0gg.,2rreewwand d3d`.we5ocerlpilncederwcdiled77ne.i.t55gipnrnpooeHwrertceeehandnlttbthyiinC0.aFE4rlelep,ceo2rtrc.t2oennrtpi.ceosrcFnsaoennirnddetsiiEgnnnEnSeecrrauggfyrey.rt.yeAAnacccnyqqduirGisasntritasoipaonhtnsiiscoasand,ddardneeeddddu11c1..e.292dpppweeorrrccrleendnwttefiitonodeCwewosoorlnrknelsddsuwwgmitidoederen, wggrrhoobiwwlytethh,s1,a2lwwehsphieiwlrlceeeendrdteii.vvfeelsastttiittinuurrIeenssderuesddtruicadel,dand worldwide growth by 0.4 percent. Foreign currency translation reduced worldwide sales growth by 1.2 percent. AI1nm0e22r00i11c5,a, ooCrraggnaaanndiicc, olo0cca9all-p-cceuurrrcrrnentnccyiynsAsaalsleeass Pggrraeewcw-i11..33nppderrs0ce.en3ntt,p,ewwricitethhntiiinnncrceraEseMeEasAso.oeffO2s2.r.1gpeaenrcrelnotsailn-tttchhuerUUennniyitteesddlSSsttaetgser,so,w11.t5 .h5pepwreacrsceen1nt6tpiinenrLLcaaettniinntaoss dCAdeemavvceerllrooic,ppaii/nnCgpgeammrncaaaedrrnakkt,etit0,ns.,9Caanpnnseddarc1m1e..e2n2rtpp,ieenrr2cAc.e4nsnptitaeiirnPncadedceneivtfvieecill,nooapSpneedadd 0ymm.a8ararkpkneetedrstcsG..ernW WatpoihornirllcEddswM wiaiEddneAed.o0o.rOr4ggraagpnnaeinocrciclleonclctoaaclli-an-clc-Iucrnrurdteruernsecctnyyrciyas,alsleweahssleiggslrreegewrswo-lwe33.s.t7h7dppweeecarrlsccieen1nne.t6dt inpn1.5 epHHrceaeeranlcltttehanctroisns CEFpelarlercceect,nrtco3.n.4oiFcnpsoaeianrccndnedinEtEcnnioncerermCyge.yon.ncysAAuccrmqqseunirsis,sati2ttoi.i4ononpnssaedaricdudedcneeteddidn00.3.w8SoapprfeeelrtrdyccweeainnndttdettsoowaGlowrearospkrhlgbdircwvos,iiwdtadehndggbrry0oo.ww46t5thphp,e,erwrwcchehienilnltetei.nddiiIvvneedssuttistuturrrieaesls, reduced orkdwide growth by 02 while sales declined 1.5 percent in reduced worldwide growth by 0.2 percent. Foreign currency translation reduced worldwide sales growth by 6.8 percent. WotWercolhrdnldowwlioidgdyeesisenelnlloliivnnagtipopnr,iiceswshrrioocssheebsbyya00.k.7epperFrscueennnttdiinna22m001166s,, aaennddn11..o11fppheerrecceeCnnottmipinnan22y001,155..heSSleepllilliinnnggg1p0prrdiiccieesseccnoonnittqiinunueuceeutfosotbboeemsseuuppspploourrttteeoddnbsbyyandsn tiencchrneaoslionggylionnwoovfatnioenw, pwrhodicuchtsis. a key fundamental strength of the Company, helping to drive unique customer solutions and an increasing flow- of new-products. aRRdeefdfeeirriot1o0nsthhedeisssecccutisisooinonsn ceonftiiltldeeds ""cPPheearrfnofgro.mramnacne cbbyey Busines Business Segment" Segment" and and "Perfomanbcye "Performance by Geographic Geographic Are Area" ltrlater in in MDA MD&A for for additional discussion of sales change. Operating Espen: Operating Expenses: Ca(oPssertacoetntatstofasnset siensales) ReCSSseeoelllsalitinrnoggc,f,hsgg,aeedlneensevereasll oaapnnmddeaanddtmmianinnidsiesttrraaettiivdvee eeexxxpppeeennnssseeesss OpReersenairnchg, income. development and related expenses Operating income me ams 2016 oo some 49.9 % waa 20.3 Er] ss 5.8 Bao Bon 24.0 % 2015 50.9 % 20.4 5.8 22.9 % ae2014 TST 51.7 % ws20.3 so5.6 Ban 22.4 % Movers 2016 versus USE2015 Tam (1.0)% on(0.1) T=T% 1.1% Sve 2015 versus ie2014 0a (0.8)% o10.1 020.2 es 0.5 % SDD1eef6fi5innemeddilbbleoennnefitint 2pp0ee1nns5siioconnomaapnnaddrppeodos1tr0se2t0itr1e4mi. Yennetaeerxx2pp0ee1nn5ssieenddceelccurrdeeeaassseetddh e3$30i0m55p ammcitilllolifoonn riinns22-00a11r66icccoormm2ppa0ar1ree3dd at0o2p20a0115p5,e,nccsooimomnppacarrheerddst1lom0eaann tiinngccrrieeaassoeef of of S$11675mimlillloino,nDienf2i0n1e5dbcoemnpiarpeednstoio2n0a14n.dYpeoasre2t0v15meinnctluedxepsethneseimsrpeaccotrodfead i costof sls; sellin, first-quarter 2015 Japan pension curtailment gain of $17 million. Defined benefit pension and postretirement expense is recorded in cost of sales; selling, 223 22775500..00002233 TabeofCones Table of Contents nngedenenPrtaolsaatnneddiaaeddmmmieinnniissPttrloaattinivv)eefoeerxxpcpeoennmsspeeossn((cSoGtSs&oAfG);eaatnnApdderre)eissoaedrai:ccrchbh,e,nddefeeivtveeloolpsompnemndteaatnnhdted arreesllasatteueddmeepxxtppieennossoneesdss((R0R&dDeD)t).e. rRRmeifenernfttooceNNcooorset.e 111 (Pension (Pension and Postretirement Plans) for components of net periodic benefit cost and the assumptions used to determine net cost. "TiTnhhteeemCCaoolmmeppxaaennmyyaliisnseeinrsvvtiecsiteinndggeliiinnvebbruuyssaiincneresosssttsrraVannssf0foorrmmmaatotiviooenn1,.0BBumussriinneeessfssictrriaaennnsstffoobrrmumsaaittniooenns ismsodddeeeffliinsneedd0 aaismpccrhhoaavnengogepseeiisrnnatppirrooocncesesssesfscasenddncy and internal/external service delivery across 3M to move to more efficient business models to improve operational efficiency and Pprhoadsuectdiviimtpy,lmcwnhtiatialolnoowfianng 3eMt1ersesrerecsuosutrocmeeprlsawninitnhgr(aEtRPe) sspseidandosn ca ewonrled.wiTdhebiassissenablebyd the going mli-yeor productivity, while allowing 3M to serve customers with greater speed and efficiency. This is enabled by the ongoing multi-year phased implementation of an enterprise resource planning (ERP) system on a worldwide basis. oITnpnettrhahetiffonouugrerttxhhpeqqnuusaaersrtetraosofff2o20l01l15o5,w,saass discussed discussed within within the the Overviw Overview- seton section above, above, 3M 3M incurred incurred restrictingcharges restructuring charges impacting impacting operating expenses as follows: C(otMntiotlrliosnnse) r ReCSSseeoelllsalitinrnoggc,f,hsgg,aeeldneneseevrsaellloaapnnmddeaanddtmmianinnidsistrtrraeattiiivvdee eeexxxpppeeennnssseeesss Tost Research, development and related expenses Total ams2015 w40 @62 212 T Tie $ 114 Costof Sues: Cost ofSales: Costof sos inchudesmanufscarin,engineering snd fightcosts Cost of sales includes manufacturing, engineering and freight costs. CaColoseststooaffs.slalesers,,emmneteaoassfuurrseelddeasassdaeppeecrcrrencetoedoauffnnseotetttehssladeeless,c,owwmabaissn44a99t.i9onppoeerfrccseelnntit innng22p00r11i6c6,e,ainddceerccerraeesaaessseeaoodff 11r.00appeemrraccteenrnttaaalggeeosppootiinndttesfferroaomsmes22,00115a5.s.CsCeoloslstitnogoff sales as a percent of sales decreased due to the combination of selling price increases and raw- material cost decreases, as selling pIriacie cnr,ecaossteoefdtsslleessby 0p7eprecrofseslnaentdsrobenemfaitteerdif]rcoomstowdeefrlaetifonneadsbeanevfiotrpsenbsbliyonpsrnodxpimoatselty.rpecrcenotocfatwrh-ioscnh-car prices increased net sales by 0.7 percent and raw- material cost deflation was favorable by approximately 3.5 percent year-on-year. portion impcoastcofstless). Fourth In addition, cost of sales as a percent portion impacts cost of sales). Fourth quarter of sales quarter 2015restructuring charges ls provided vorabl year-on-year comparison benefited from lower defined benefit pension and postretirement costs (of which 2015 restructuring charges also provided a favorable year-on-year comparison. a a(CClooesssttooaff.ssasleer,s,emmneteaoassfuurrseelddeasassdaeppeecrcrrencetdoeoaffunnseotetttesshaadleleess,c,owwmabaissnS5a0t0.i99onppoeerfrccseelnntit innng22p00r11i5c5,e,ainddceerccerraeesaaessseeaoofdf0.r80.8 ppemeracretcneetarngteosppootiinndttesscrffreooamsme,22001a144..seCClolosisnttgooff psIpanrrilidcecseiestaisiconanrc,repeaeasirsceegeddnhntneeeottdfesssfaaalilleeensssedbbdyyeecn11re..e11asppeeedprcerdenunsteitoaatnonndsthndreadrwcp-oommmsatabtstieetnrriaiirat]ielonccnooonsostttfsddseeeflfollliaantt(gisiooofpnnwrtwiwicaseassshinfaacvvreoooarrsaretbssloebanbnbliydymrpapaprawpot-rxsmoixamcitmaoetrtaieoatellflycysol3s3e..t5s5d)pepecearrrneccdeaensnFtetosuyc,reataahsrr-rsooenmlel-iycnregaarr. 201 restrctring In addition, higher charges, increased costofsles sa erentofsales. defined benefit pension and postretirement costs (of which a portion impacts cost of sales) and fourth quarter 2015 restructuring charges, increased cost of sales as a percent of sales. Selling, Generaland Adinisiraive Expenses: Selling, General and Administrative Expenses: 2SSe0el1llli6inngrg,,esggetennseerbraaellnaaenniddinaagddmifnrinioismstternaaitriv-veoeene-xxvppeeeannssdeeissv((eSSsGGt&rAAe))gddaeeiccnrreeuaassseedddiS$s77c11usmsmielidllliiioonnn,N, ooorrt112.22),ppferorceregtnn,t,ciinna22r00e1166nwwthhreeanntcciooommnpp,aaarrneeddd t1po0r2o2d00u11c55t,,ivwiittityhh 2016 results benefiting from year-on-year divestiture gains (as discussed in Note 2), foreign currency translation, and productivity epsnteeiemeleanttede1x0pehnesefouFrotuhrtqhuaqraterric2r02101r3ersecsuciungi.ngIcnhaadrgieosn,asSo GpArboenvefaiitfeaddvofreoabmdleloyweear-dneeynceadr cboemnpefairtipseonns.ioSnGaAn,d benefits related to the fourth quarter 2015 restructuring. In addition, SG&A benefited from lower defined benefit pension and postretirement expense. Fourth pmeeracseunrteodf5slepisre20s14o.fsls, measured as a percent of sales, ecrssed 0.) quarter 2015 decreased 0.1 percntags pntfo2s0.3 restructuring charges also percentage points to 20.3 percent in 2016, comparedfo20.4 provided a favorable year-on-year percent in 2016, compared to 20.4 percent n 201, ad comparison. SG&A, percent in 2015, and 20320.3 percent of sales in 2014. rSSeenllslinan,gi,oggneeonneferrfaaollraaenniddgnaacddmumirinnniiscstirtaentiiviveieoexxpUp.eSen.nssedeossl(l(SaSrGHs&rEeAAd)u)cddeeedccrrSeeasGssAeeddAS$e22x88p77enmmsieill,ilioosnn,,ioodrre44n.44cppeeercbeeyn,ut,riinnfo22r00ei11g55n wwchhueernneccnoocmmypptaarrraeenddlatttooio22n0011m44,o. TsThhtee translation of foreign currencies into U.S. dollars reduced SG&A expense, as evidenced by our foreign currency translation impact nWheiclh rpeednuscieodnwnordldpwoisdteesieesmebntye.xpepnesreta.nd Tfhoiusrtfhorqeaigrnccr2u01r3srersatncstauirionngbcehanrgeesaSsGpAar,almeaosffusreetdb5y hipgheer edeofifnsedls, which reduced worldwide sales by 6.8 percent. This foreign currency translation benefit was partially offset by higher defined binecnreefaitsepden0.s1iopneracnednptaogsetreptiroemi1en0nt2e0tx.p1epnesreceanntdifno2u0rt1h5,qucaormteprar2e0d1510re2s0t.r3ucpteurrcinegntcohfasrlgeess. iSnG2&01A4., measured as a percent of sales, increased 0.1 percentage points to 20.4 percent in 2015, compared to 20.3 percent of sales in 2014. 224 22775500..00002244 TabeofComets Table of Contents Rescarch, DevelopmentandReutdExpenses: Research, Development and Related Expenses: dRReeecssreeeaaarrsccehhd,, dd7eevvmeellioopplmmleneitnootraan0nn.,dd4 repelelaarttceeded,xexpipenen2ns0se1es3s ((cRRo&mEpDDa)r)edddeecc1rr0ee2aa0ss1ee4dd. $S32288Mmmciliollliiioonnn,,eoodrr t11o.6s6pupepeprrcoecrn.tt,siinnh22ey0011g66rcocwootmmhppatarrieedvdet0o2s20,0115i5,n,caslnnuddding more adRRde&cdDrDieanaais,iemmde2e$d0d71aa6tmt dbdileislsinrouuenppi,teiiovdree0rii.n4onnnmpooevvlraaocttweiienoortnn,dpipenrrfoo2igg0nrr1eaad5mmbscsewonwimetfiptihhtarhtpeheedenstppoioeo2tnet0na1itni4a]d.l3ptM 0oosccctreoeeaanitteeinemeuneneitndietretloleyyxspnnueeepwnpws-oemmrtawarihtrkskieelktteess2ya0ang1nd5rdo,ddwiiwtsshrhtuepipnnttictecixaxoitimissvptieiannsrg,geidmmna1carl0rukkedet0itns1s4.g.,ITmnnhoarde addition, 2016 benefited from lower defined benefit pension and postretirement expense, while 2015, when compared to 2014, had Hi2g0h1e5radnedfi1nedpebrecnefit pe2n0s1i4o.n and postetement expense RED, measured a. percentof sles, was 5.8 percent in both2016and higher defined benefit pension and postretirement expense. R&D, measured as a percent of sales, was 5.8 percent in both 2016 and 2015, and 5.6 percent in 2014. OOppeerraaitinngg Income: Income: 33rM eMcouunssceelssioospipeoernraatotiifnnoggpieinnrccaotoimmneegsaissncooonameeoofmfiaistrsgppirrinimmfaaorrryyb2bu0us1s6iinnveeessrsssusgsegm2me01ne3nt,t pnpeedrrffo2or0rm1ma5annvcceee rmmsee2aa0ssua1rr4ermeenntt ool.tools. Refer Refer othe to the table table blowfo below- for a reconciliation of operating income margins for 2016 versus 2015, and 2015 versus 2014. OOppeerraattiinngg iinnccoommee margin: margin: Soa(Pmsereaceptnetaroirfonadet sasasilteeysne)ar SaIISnmnecclerrleeipaanessgreeip/o((rdddieelcccaerrseetaaaynssedeea))rrainnmooappteerrraatatiinlngg miinnoccocomtmee margin, due margin, due to: to: Selling price and raw- material impact 2Pe0n1siornesstrnudctpuroingtceharngets benef costs Pension and postretirement benefit costs 2015 restructuring charges SPtrodeucetiviitnyvefsotmmenrtseiting Productivity from restructuring AFFSocotrrrqaeeutiiegiggnnsicixexitcnchivhaaoeannsnndtgsgmeeedniimimtsppeaacscttses s AOrcgqauniiscitivonsoanadlnddivuiezstaimtturieeosn Organic volume CLaemgealpeirnidooder Legal and other and utilization Current period -- Tr Tw--Tn 2016 Year ended December 31, 22.9 % 2015 22.4 % 101.0 io1.0 040.4 040.4 03(0.3) re(0.2) 020.2 an(1.0) wy(0.4) 200% 24.0 % in1.6 5(0.5) 4)(0.4) 3(0.3) 2)(0.2) 030.3 Te 22.9 % Vear2016vera Veur 015: Year 2016 versus Year 2015: Operaing income margins were 240 pera 2016 compared 0 229percent in 2015, an icrease of 11 percent points 3M bbOpeeepnnneesefrifaioitttnieenddagnffdirnoocmpmoomttshheteetmccrooammmrgbebiinninntsaatwteiixoeoprnneenoo2sffe4.hh.0iiggTphhheeeerrr2csse0eenl1lltl5iiinnnrge2psp0irr1uic6ccestcsuaoranmindndpgacllroheoawdrewgtroeerrs2aarw2p.-r9momapvatietedrecrereiidanaltocfinosvsso2t,rs0,a1pbp5llla,useasynllsooirwnwec-errnre-ayyyseecaearo-rafonc1ro-.1ym-eppaaeorrricddsneeeonffni-itn,anegeydnedbeobpeeotnanienieitrfsoti.t-n3Mto ppprrersoontddsuiutcoctntniivvaienittdyympbbooenenstternhfesitetisprifeoinnmsi22et0tn0r1t1ss66eaxrcrepeileloaantntseee.dd. tTohoathdtehhe2e202f10a05v11o55rrrearesbestlrsteutrrcuiutccumttruupirnraiignncoggcnthaaaccorttgpiiooeenrnssas.pt.AirAocnqgvcuiqmdiuaesirdisgtiitaiinoofsnan.svsaoTanhrnaiddbslddieinivvyceeelssauttidrit-etuoudrnreeo-sys,i,edwawrhpciecohrhmfaproriaeemrmiamsenocaencsa,esuuirhnrreeoadddmdffoiobtrroiottthnhheettohe first twelve months post-transaction, had a Cquaarptetr 2S0a1fe6t)y, atnhdbrmarbyasyrstesmcspbsotsiionnsss Capital Safety and Membrana acquisitions tf((tahhaviirorrdtdrahqqbulugeaauritatmeetrp2r2a0c021t1055o1)n)5,. oDDipiievdvereassqtttiuiinattgurutrrmeeeraii2mrm0gp1pia6nac)sct,.tssTasahnrrides included solid performances from both eheaeen1sthleaPteocloenaverrmtbiunsgibnuessisne(sisst related to the Polyfoam business (first the quarter 2016), the library systems business (fourth quarter 2015/first quarter 2016), and the license plate converting business in cFartahnocdeefboautrethyqutahrtoelro20g1y5).utIincaedndistiionng,busitnehssf.ouertnhsutahtteroefdu2c0e1d6,op3erMatsiondg itnhcoamsesmtaorgfintss iprnoctehcteidve20l1m6srbsucsgiinecs nd ts France (fourth quarter 2015). In addition, in the fourth quarter of 2016, 3M sold the assets of its protective films business and its uciinsanvvtiheensoscttdsmmeesensbtn.astts,t,Feraaoyssrt33eeMcnhtnocoorooltkkonagaceyctytioioounint-mslopitcoobettnbssteit(enteegrrtbooouppftstiihinmmeeiiszzdsee.giIititssenmmnagsasaon)nthuuafrftaeccdrhetuurdcriueindcneggodpfpeoorropateitprinranitntgintigaannnicdndoccamoceemclmeelaremrrtaaietrnegdd.inggOsrrroiongwwcattlhnhuidiiennvdvvoee2lss0uttm1mm6eeendnstettssrcalaetiecnogroeicssssnidts related businesses. Foreign currency impacts (net of hedging) also reduced operating income margins. Organic volume declines and related l"Thie "zegaal iamnpdacotthsenr"cadedinhethoimppraecctedfilngowaebrleasresltautteiloizantiown,voprrismabrliley sinhedInqdustrrial2,0i1n6d beFlierrctronilacnsnd Eonnergnysbrussinnceess. utilization impacts included the impact of lower asset utilization, primarily in the Industrial, and Electronics and Energy businesses. The "legal and other" item in the preceding table related to an unfavorable second quarter 2016 arbitration ruling on an insurance cTsabil,ecsomomleroifwahliicthgatreiodnissceutslseendnitnsNeotae14).1o Andover Heshhcare sndTransWeb, and secu for respirator mask asbestos claim, commercial litigation settlements related to Andover Healthcare and TransWeb, and accruals for respirator mask/asbestos liabilities (all of which are discussed in Note 14). Year 015versus Year2014: Year 2015 versus Year 2014: OOrpepeevrrsantiiinnnggciilnnucdcoemodme mmsaiargrnggiiiinncssanwwteebrreee n2222t.09rppoeemrrccetnhnetticnno2m2b00i11n5atcciooommnpopaafrreeiddght0oe2r22s2.e.4l4lippnegercrperncitcien 22n001d144,o, waaenriinnrcacrreeaatsseeeoofif 0l.50.5cppoeesrrtcc,eennnttadaggee poboeininseft.si.tTTrhhoeesmsee productivity and oer ems, results included a significantTbheensefeibtefnreofmittshewecroempabritniaatliolnyoofffhtighbeyr isegllhinrgdpefriicneesdabnednelfoiwter raw- material costs, and a benefit from productivity and other items. These benefits were partially offset by higher defined benefit 25 25 22775500..00002255 TabeofComets Table of Contents pesion and postrtrment benefit costs,2015restructuring charge, ighe ite vestments, nd scuiasndidiistourn pension and postretirement benefit costs, 2015 restructuring charges, higher strategic investments, and acquisition and divestiture pack Steg insstments include crema programs around disptiveRAD and business rnslormaton Acquisition and impacts. Strategic investments include incremental programs around disruptive R&D and business transformation. Acquisition and ivsiture impacts primaryrele otheCapital Safty and Merbrana acquisition, and the divesof sbsantaly all ofthe divestiture impacts primarily relate to the Capital Safety and Membrana acquisitions, and the divestitures of substantially all of the Tibrary sytem business, song wih te license platconverting busines i France library systems business, along with the license plate converting business in France. InterestEspenseand Income: Interest Expense and Income: (ins (Millions) Tntret pene Interest expense Interest income Interest income Toul Total ame ams 2016 2015 5 WT TM T $ 199 $ 149 $ a a9 (29) (26) 5 OS FS $ 170 $ 123 $ ams =oy 2014 142 (33) 109 IIennxttpeeerrneessstetEEixxnppcereennassseeed: rIsnlitseghrettlsyt eeixxnpp2ee0nn1ss5eeicinnoccmrrpeeaaarsseeeddd ii0nn 222000111466, dddueeespt0iotehiigsghihgeenrriaafvvieceraraanggteebddieehbtetrbbaadlleaabnntcceeessveaalnn,dd hhieiglhhpeerdrUby.SUS.l. obbwooerrrrrooawwvieinrngaggcceoonsstttssr.eIIsnnttteerreesstt expense increased slightly in 2015 compared to 2014, despite significantly higher debt levels, helped by lower average interest rates. Copitlized nest ltd 0propery, plant nd pigment construction in progres i recorda acon frest expe, Capitalized interest related to property, plant and equipment construction in progress is recorded as a reduction to interest expense. "The amounts shown n the sbl ove fo nest expense ar netofcaializd terest amoofuS1n0mtillsi, S13million, sd The amounts shown in the table above for interest expense are net of capitalized interest amounts of $10 million, $13 million, and S15 millon, in2016, 20an1d20513, respectively. $15 million, in 2016, 2015 and 2014, respectively. II2nn0tt1ee5rreewssttaIIsnnclcooomwmeeer::hIenetsenretcsot moinpcarormeede 1ww0aa.ss20hi1i4ghdhurer oiinnw2200e1166rwwahhveeennraccgooemmpSpaaasrrheeddma1tor0k2e20t01a15blddesuueecttuoorhiiiggshhebearlaaavvneecrreaaggee nes interest rts.rates. Interest Interest income income in in 2015 was lower when compared to 2014 due to lower average cash/marketable securities balances. Provision for Income Taxes: Provision for Income Taxes: Fosmstpresning (Percent of pre-tax income) Eile a nie Effective tax rate sb 2016 TS Biv To 28.3 % 2015 29.1% 2014 28.9 % ""TTThhheee feelfffeeccctttiiivvvee aatax rrraaatttefffooorr222000111566 wwwaaasss222088...133 pppeeersrcecenentnt,,t, cccooommmpppaaarrreeeddd t0oo2922.951.91 ppperreceercnttin 2220001115.5,3, acadrdeeecrateasaseeooofff00..8032pppeeerrrccseennntttaaagggeeepppoooininsntt.ss. The The effective tax rate for 2015 was 29.1 percent, compared to 28.9 percent in 2014, an increase of 0.2 percentage points. The cAhSaUngeNsoin20t1h60e9xscaeussbeetwdeeinn Nyoetares1a).r poteby many actor, as described fother in Note , including the2016 adpion changes in the tax rates between years are impacted by many factors, as described further in Note 8, including the 2016 adoption of of ASU No. 2016-09 (discussed in Note 1). "The Company curently cxpests htt ftv rte for 2017 ill be spprosimately 28.2 percent. The rate sn vary fom The Company currently expects that its effective tax rate for 2017 will be approximately 28 to 29 percent. The rate can vary from quarter to quarior duetodiscret en, siacthh selene of income ta ais, changeisn lsandploy shar based quarter to quarter due to discrete items, such as the settlement of income tax audits, changes in tax laws and employee share-based Payment accounting a wells recuring factor, sich as he geographic miof come bor as payment accounting; as well as recurring factors, such as the geographic mix of income before taxes. Refer to Note fo furterdiscussion of ncome as. Refer to Note 8 for further discussion of income taxes. NetIncome Aributablteo NonconrolingInterest: Net Income Attributable to Noncontrolling Interest: ton (Millions) Netincome HERI momen rE ret Net income attributable to noncontrolling interest 5 ame 5S ams FT ne = 2016 8 $ 2015 8 $ 2014 42 Net income aibuabl nonsontllin ners reeset he ciminson ofthe cononloss ats 0 no 3M ownership Net income attributable to noncontrolling interest represents the elimination of the income or loss attributable to non-3M ownership interests 3M consolidated cies. The changes in noncontrling rest amounts ave rly relatedto Sumitomo 3M Limited interests in 3M consolidated entities. The changes in noncontrolling interest amounts have largely related to Sumitomo 3M Limited Clpan), ich was 3M's mos significant consolidated city vith mon-3M anes nests.Asdiscussed in Nok , (Japan), which was 3M's most significant consolidated entity with non-3M ownership interests. As discussed in Note 6, on Scpimber 1, 2014, 3M purchased the remaining 25 percent ownership in Sumitomo 3M Limited, bringing 3M's onerditpo 100 September 1, 2014, 3M purchased the remaining 25 percent ownership in Sumitomo 3M Limited, bringing 3M's ownership to 100 percent. Thus, fective September1, 201, net com atibto ntoncaotrboliong ners was sgnfcaty reduced. The percent. Thus, effective September 1, 2014, net income attributable to noncontrolling interest was significantly reduced. The primary remaining naocoaoling eres relate fo 3 Indie Limited of ich 3M fective neni 75 percent, primary remaining noncontrolling interest relates to 3M India Limited, of which 3M's effective ownership is 75 percent. 226 22775500..00002266 TaofCbonses Table of Contents Currency Effects Currency Effects: 33mM iMlleeossntiimminaa2tee0ss1tt6hahaanttdyyee2aa0rr1--oo,nn--ryyeeesapaerrcctcuiuvrreerlenyn.ccyyTheeeflfseeeccttcs,,tmiinnacctllueuddsiinniggnchhleeudddeggiitnnhggeiifmmpepuattcosts,f, ddreeaccnrrseeaaassieenddgppprrere-ottaafxxsinifncrcooommmelebobcyya $Sc11ur22r77enmmciiillellsiioonnnknaondUdS$S,339900 drmdoaolinlllllsaaioarrssnc;iittonhhnee2g0aiim1mip6npasaaccntatndodof2fc0scu1us5rrs,rner,neecsnyyplefucultuciicvutneulgtayt.iidoTeonrhisnevosoasentiethvhseeteiimtt nrsaattnerssufmeienr rnoctolfsufgdgdoeoeoi ostdhidsegsnbebeefede fttew1wc0eeteeronnefdt3SurM caMenosopflpeaoretirarnatgetiioopcnnruosstfinientstntchhfyreeoUmUenxincltiohteceadadnlgSScetutarrtresaesenaacrnniieddsskbsaibrnIrtoooMaaUdde;.Ssan.nsddes atthrhnaaadtntsiycaneaccatrriroec-aonnsn-eg-deyaieapnarsrr adedneetrdriivvlioaantsticsivveoesems,eaninnbddcyloouattdphhipeenrrrgotxrrdiaaemnnrassitvaaeacclttiiiyvooennS1iggn8aas0iitnnrmussmiaanelddnotlssoidssnseess2si0dg1den.ececedrRaetesoafseerederddtuppocrrNee-o-tftaosexreii1ing2ncncoomcmuheerebrbeyyCnocaanyppsppoerlrxooicxxdhiaiammtnaegatdteeelFlryiyantSa$en66rc99iisakmmlsii.Slll3litoMonneeniinsntti22ms0011af6t6eosr danddiiinocnrenasfeodrpmraet-tiaoxnicnoconmcoembiyngapMp'rosximboadtegliyn$1ac8t0ivmiteilsl.ion in 2015. Refer to Note 12 in the Consolidated Financial Statements for additional information concerning 3M's hedging activities. PERFORMANCE BY BUSINESS SEG MENT PERFORMANCE BY BUSINESS SEG MENT cDDiihssccloloossruurreeessalreealtaptirinnoggvitodoed33MiMn'stbhbueusNisinnoeestssstseeggtmhmeeneCntotsnssaaorrleidpparrtooevvdiiddFeeiddnaiinncilIatelemS11t,,eBBnuutssiisnn.eesssAuSSeedggmsmeenertnistbs.e.dFFiiinnnaaNnccoiiaeall ii16nn,ffoofrmmlaacttitiooinnvsannnddthooetthheierrt qdqpuiurasaecrrtlstoeecsrrtuoorcfef2sb20e0a1e1re6i6,n,p3r3e oMMvidmmeaaddl dtienheathpmperrc oopNdduoucctcettosfilt itnnoteehtehrrseeeppCoocrorhttnaiinsnnogggleiccsdhhfaaaoatnengdlgeFiiinnnpvvaeoonrllicvvoiiiadnnlsggSrtwtwastoeemoootfefn.tittsss.IbbAuuMsssiinmdneaecsnssscargssieebeggesmmdeineisntnsotNs.p.oeBBtreuuasst1ii6inn,oeesniesssnffsseevocgetmmivbeeeunnstitniiinntnehffseoosrrfmimraastttiioonn Speregsmeennttesd hTehreinrerpeofrleacbtlsethseegimmepnatcstae Indus Safty of these changes for aalnldpeGrriaopdhsicpsre.sFenlteedt.r3oMnimaeansndaEgneesrgiyts: opHeearalttihonCsairn;faivnedCbounsisnuemsesr. segments. The reportable segments are Industrial; Safety and Graphics; Electronics and Energy; Health Care; and Consumer. CorpanodUrnalaloctateed: Corporate and Unallocated: I1inntaahddedipiriteioocnnedttoiohngtehbeuesseiffniiveveessbbuusssaiinmneeessnsstssseeggbmmleeennattsn,,d33MiMn asNsiosgitgnns1s6.cceeCrrottraapiinnorccaootssettssatnod"CUCnooarlrpplooorcraaattteeedaanniddncUUnlnaualdllleoocscaatvteaedrd.i,"t"ywwohfhiimccihhsiiscsepplrreeassceeonnutteesddessmepspaa,rrsaesteullcyyh in the preceding business segments table and in Note 16. Corporate and Unallocated includes a variety of miscellaneous items, aTsiicgoartpoonrantednovvesiiomnemnetntgianlscxapnednlsosw,esc,ocrpeortat desetuacunisnignshaarnedslaonssdesc,erctoarintiunndeura.onfcoevreerl-aatbedorgbaeidncsaonndsl(opsesn,soiorni. as corporate investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain such litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension, insocclkdcebsasevdacroimtpyenosfmaitsiocne)lhnctouthse eComm,patniyudebteermi0necot talloiocante doiqrueacrtntleyrlyotssbnudasninunsesassegsments. Because hscategory stock-based compensation) that the Company determines 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. CCpooirrpoponroartaeanndatndepdoUUsntnaraltlllroooccmaaetteenddtoopepexrperaeanttsiinenggleoexcxpapeteninsoseensstdodeeCccorreeraapsseeoddrbbayytnS$de7755Ummniailllllliiooocnnatiinend2200de11c66rwweahhseeennd ccbooymmSpp2aa2rr3eeddmittlool2i2o00n115i.5a.332M 001''6ss wddeheffeiinnneecddobbmeepnnaeerffieittd 0 C22p0o0e1mn15ps5.ai.orTiInnnsoaaanndd.dddipTotionhos,netr,eethtdhieereesmpprooaerrstntiietoosennxowopfefherntheeseep22aa00lrl11ot55claryrteeiossonttfruutfcoctrtuCibrnoiygnrpgssonarccaiottnieconrnasenscadschehUaainrrageledlgdoacltaocteecoxdorprpedponeorscraeratesteearse((e$l3da33t7b7eydmmis$il2llln2ioo3nnn)m)fpipalrlvioovornirdbienold2eaa0sv1ffaca6vvowooinrrhdaaebbdnqllaeecyroyeeimescarpr2d-ao0ren1d-6ystceoaarr comparison. These decreases were partially offset by an increase in legal expenses related to an unfavorable second quarter 2016 aabcicrrautailofno rrleisnpgiotnornmiansskuraasnbceestcosiH,acbomlmeercaillalofgwahticihonrestdliesmuesnetds ilniNeotde119)A,ndover Healtear ad TransWeb, and arbitration ruling on an insurance claim, commercial litigation settlements related to Andover Healthcare and TransWeb, and accruals for respirator mask/asbestos liabilities (all of which are discussed in Note 14). bCCyoorhrpipoghroearrteadnaetnfdedinUUendnabalelllnoeocfsaittteeddpoeopnpesreiraoatntiinnnggdeexpxpopesentnsrseeessirinnnrncresensasbsedednbbyyeS$e11x00p5e3nsimeisil,lioownhiiinnch2200i11n55crwweahhseeend ccnoommtopptaaarlreebddy toSo1226005114i4..lTTohh.iis iiOnnFccrreheiaassseeiwwnacasrseaddsri,ivveen Sob$F1y155Sh333i7gmmhimiellirlllidoolennowfniw,naaeassdsaalbillnelodoncicecaafatittteeeddpdettnnoostCCihoooenrrppaboonerrdlsaoitpwceoaasantldrdeet.UUirnenaTmalelllemoonccatwatbhteeieddcn..hefInintpceaerrxetspaiaseleenlssyewwosef,erfrwseehhtailcotshoheiddnsrrciiirvnveeceannrseebbadyyseiffnsoowuutiorrttttahhhliqbnuuyaaCr$tto1ee6rr2520p0m11ri55llainreoestdnst.trrUOucncfttautrlhriliisnnoggicneccchhdraeararggseee,ss of $37 million, as indicated in bienicnlugdaeldloicgahteedtaodCionosrrtsi.ve included higher administrative and RDcost absorption bythe ive the below-table. Items which partially and R&D cost absorption by the five business seats, esling offset these increases within business segments, resulting i less derbsorbed expense Corporate and Unallocated in less under-absorbed expense being allocated to Corporate. z27 22775500..00002277 abe of Cones. Table of Contents OOppeerraaitinnggBBuussiinneesss Segmens: Segments: Eachof3M's busines segments incurredrestructuring charges i th fourth quaroft20e15r, as indicted inthe Following ble. Each of 3M's business segments incurred restructuring charges in the fourth quarter of 2015, as indicated in the following table. RestructuringPre-TuxCharge byBusines Segment: Restructuring Pre-Tax Charge by Business Segment: In(dMMuisloltiornnasl) ISHSnaaedlfuaettsylytriaaCannolddreGGrraapphhiiccss CHEEolleenaeclscttrhutomrnCeioacrnrseiaacnndsd Energy Energy CCoropnosruamterand Unallocated Tol Corporate and Unallocated Total uth Qure 1s Fourth Quarter 2015 =42 111 99 212 33 537 T Tie $ 114 oIInrngffoaornrmimcaattviiooonlnurrmeeellaatiteemddpttaooc33tMlMu'ssbbsuusesilinnleeissnsspssieeggemmepenontttsssiiss.pprrAeecssqeeunnitteesddtiinontthiheendtbadblilveeessttthihtaatutrffeolliloomwwp.a-c. tOOsr.rgga1annaiincc,looaaclar-l-cacuursrreeannccdyyssslaelespsaiirnncicllluuddfeeorbbootththhe fist toslwerggvemalevenneitc.mmvoooAnnlntuthyhmsserppeiomesrtpo-natcarcaetnnssssspacflctouttosiEonsn.Me.lElFFiAnoorgrreeepiilggrainntceecc1uuirmrrrEeepunnarcccoyytpse.tt,rAraanMcnsiqslduiadtitsiiloioetnnioEiinsmmtpaponaacdcnttddssiAavafnedrdsitictitoautlraoenlaissmcalloepesmascbccthish,aannniefggdaeenbaayarr,seeiasar,lelssAomnpepyarrosoruvveriidefddereddcsceffopoerrasrecafaotocechly"bbMfuuosseriinntmheebessssrfirst resfeegrmeontt.heAnfyorrmeefrerSenpcaersatoonEsMMEeAdiraeblautseitoneEsurcoupei,eMdidbdyle3EMasftraonmdPAlfyripcoareonina 201.combined basis. Any references to "Membrana" refer to the former Separations Media business acquired by 3M from Polypore in 2015. "TsTehhgeemffeolnlltloowwiinngg discusses discusses totaly total year rst results oefor 2016 2016 compared compared 2015, to 2015, and and ssalso discuss discusses 2015 2015 compared compared to 2014, 2014, forsach for each business business segment. Industria Business (34.3%of consolidatedsales) Industrial Business (34. 3 % of consolidated sales): Soles (lions) Sales (millions) Sols change analysis Sales change analysis: Organic loca crency Organic local currency Actions Acquisitions Desires Divestitures Trndation Translation Tou sles change. Total sales change ame2016 Sms $ 10,313 ams2015 Sows 5 $ 10,295 $ --% -- % 161.6 rey (0.3) an(1.1) oz0.2 % oan 0.4 % 060.6 paay(7.3) Ge (6.3)% a2014 ww 10,985 avn 4.9 % a_n(1.8) Sie 3.1% OOppeePrretatriinnnggticinnhccaoonmmgee (millions) (millions) PePrecrecenntt ocfhsalnegse Percent of sales s 2s 2% 5 23 $ 2,376 $ 2,256 $ 2,381 3% Gre 350 5.3 % (5.3)% 3.5 % 230% 219% 27% 23.0 % 21.9 % 21.7 % a"TTuhhteeomIInonddtuuisvstterrifiaaelrssmeeaggrmmkeeennttt(ssseertrvoveesbsaodbbyrroosahddorprasnagnaedoofnfrmmtag)ra.rkkeeecttsl,,ecssutcochhncaasss,saauoptmpolomitonitciveve.e pooarrpiigegriinnaaanldeeqqpuuriiinpptmmineegnn,tt pmmacaaknafugfciancugt.utreorro((dOOnEFM dM))beaavnneddrage, snd Ccaceoournntoassmmtiricuoctct,itovinoes.nea.aflIItanenndrdtmusus,statrsrripkiaeaelcltippa(alrrtouoydtdouumcbctaotsdriiynnacsclh,uloudpdessetapaapapneredsas,tr,ieaoatnawwialii)ndd,deeelpvveaaacrrrtiirieiottcnyyaitocoifsfo, nccaooppnraptotleddida,u,ncntcnoseo,,nnp-cowaloposevvurreeannaydannspddtreibbnmootsinnnddfgoee,ddppbaaebcrrkraasasogsinivnsaegs,h,,yafagoddiohehdenesesaiipnvvrdeessob, deaavdudevv,raaanngaccecee,odduasntdic ceramics, sealants, specialty materials, separation and purification products, closure systems for personal hygiene products, acoustic `ayisrtremasapnrdodsucetcs,ilayndvechoicmleps.on3eMnnstldssprodeudctisnhgatlrosb)ussduntphepofnlpurifecaiesciruonr,ineilnegacnhdomliongyiosnersvinogf scuustnomtervs,inmtharrienea, systems products, and components and products that are used in the manufacture, repair and maintenance of automotive, marine, oeaocfifrhcahnrraiardcfd-ta-olato-ncg-dgerrrsiiapnnmeddicciprasreleftiycosrisvidieoeohnnmicaaalnpeppdspl.ilii3nccMgaattiaioiospnnassilisncnoaiiantnddlieuusaostidtrnriiinaatg,lh,egsaulsuottbootammleotosiutmvipvep,e,l,ieaiorirrlocerfraaapnffrtdaeancgnidasd,ioccunsuttlgtiirnnringtditinoondougllss.tt.eric33ahM,Mndoldelecvovrgeeoyllnoosippecsrvasainnanddngpdpcrruodosdedtuofucemcenesessresaadddinvvuaathnnnecceea.ddrea technical ceramics for demanding applications in the automotive, oil and gas, solar, industrial, electronics and defense industries. =28 22775500..00002288 TaofbColnees Table of Contents Year 2006resus: Year 2016 results: SapSleaerlcseesnitin,n IIdninvdeudssttuirtisaulrettsotraoeleddutc$1ea10d0.s.3l3ebsieillbliodyo,n0,.3uupper00..e22nppterrscaeennndtt fiinonrUUe.i.SgS,n. cdduoolrllrlaaerrnss.c.yOOtrrrgaganasnlinactiloooanclar-le-ccduuurrcreeendnecsyylssalbsleeyss ww1e.e1rrsepeffrlcaaet,n,taa.gcuqTiuhsieisiitloiaontnssoaragddaddneeicdd 161.6 percent, divestitures reduced sales by 0.3 percent, and foreign currency translation reduced sales Hfooucrlth-uqrurnacyrosftl2ee0s1r6i,mpwahcetnreiftlrecteedftlhe4ec.6cpotreendtctaomrionnlcouhlal-eluerndegenscyntshleelsogrbolwtih.ndustri local-currency sales impact reflected the continued economic challenges in the global industrial sector. by 1.1 sector. Industrial did percent. The Industrial did rebound flat organic rebound in the the fourth quarter of 2016, when it reflected 4.6 percent organic local-currency sales growth. OOnnaa+n"ooSrrggaaalnniieccglcoracealwl-sciunurrsreetnncocyymssleaeltessibbeaassiOssEM:,automotiveafcmrket,and separation and prison. + SSSSooaalllleeeessaogdlrececoiwldni-neeiecnddlainiunnsteobadmrbaironsatisiaivvdveevesasO,,nEcidnM edduu, msasaturtiettaorlimaaaloddsth,hievespesirivviaemeftasserraaimlnnyddardtakaupepeetes,ts,oa,naapdnneddsersapieaornroatsstpiowoaneceaakananndneddpsucscooriimmfnmicmtearhetciroiicniaa.llatnrrdaansasppoorarantaidtoiomnan.r.kets: Sales also declined in advanced materials, primarily due to persistent weakness in Gpeerocgernatpahnidcatlhe. UanlietsednSctreassdedenpeerdce2ntpienrLtat.inAmerica Canada snd 2 percent Geographically, sales increased 5 percent in Latin America/Canada and 2 percent in EMEA, while Avi Pci the oil and gas end markets. in EMEA, while Asia Pacific declined declined | 1 percent and the United States declined 2 percent. AAccqquui+sisiittiiAoocnnassauaninsdddiiidvoienvsseatsltiiettsuurrgeerso((waaltlsshoopddriisiscmcuausrsseyeddeiilnnaNtNeoodttee t22h):e August 2015 quisitionof Menbrana lading proovfmiicdtoperorus + Acquisition sales growth primarily related to the August 2015 acquisition of Membrana, a leading provider of microporous m3Mecommpbletrseddatmsnodseualseoflstfoeh atastsioeonftiMsTthepfresscreinzcde,poilnyduurseitrhla,neanFdosupeacdihaelstiyvSeesgbmuesnitnsess (Tome known as membranes and modules for filtration in the life sciences, industrial, and specialty segments. + PI3PnMoolOlyccyftoofomaobmpearl)meii2t)nne0d1JJ6aaitn,nsuu3asaaMrrylyse22od00f11t6t6h.he assets of 3M's pressurized polyurethane asstofits porary potctiv Films foam adhesives business (formerly known as bins This busines i proovfaidhedsivee: bInacOkcetdobteermp2o0r1a6r,y3pMrotseocldtitvheefamsssetsueodf itisn broad geof industri temporary protective films business. This business is a provider of adhesive- backed temporary protective films used in a broad range of industries. OOppeern+aitinnggOpiiennrccaootmmieen::g income marin ncressd by 1.1 percentagepints 10 23.0 percent, helped by th gin on saleof Poyfoam and Operating income margins increased by umattperoiarlaortys.protein lms business, its temporary protective films business, productivity beni from orth quate 2015 estncturing 1.1 percentage points to 23.0 percent, helped by the gain on productivity benefits from fourth quarter 2015 restructuring ction, and lowe aw sale of Polyfoam and actions, and lower raw + The Membran material costs. acquisition had minimal impactonoseaingincomemargins. The Membrana acquisition had a minimal impact on operating income margins. Year 2015resus: Year 2015 results: aSScoaqllueeisssiiintniIIonnndsudasdturdiseald ot0o.tl6alpededrc$1e01n.t03,.3abbniidllloifonon,r,eiddgoonwwcnnur66.r3.e3ncppyeerrtccreeannnttsliianntiUUos.nS..reddodolullclaaerrsds,.sOOerrsggaabnnyiicc7.loo3aclpa-rl-cecuusrr.reennccyy slessales nressd increased 0.4 0.4 percent, percent, acquisitions added 0.6 percent, and foreign currency translation reduced sales by 7.3 percent. Ona organic calumny slesbass: On an organic local-currency sales basis: + Sales grow was od by separation snd purification, atom OEM, andserospace and commer sora, Sales growth was led by separation and purification, automotive OEM, and aerospace and commercial transportation, `ile automo aftmarke nreasd igh. Sle in industrial adhesives nd apes wer fs. while automotive aftermarket increased slightly. Sales in industrial adhesives and tapes were flat. + Sole in advanced mite declined, primarily dueto weakness nthe i and gas market. Sle in shrasive systems also Sales in advanced materials declined, primarily due to weakness in the oil and gas market. Sales in abrasive systems also declined. declined. + Geographical, les incrapesrceendt in Latin AmericaCanad, | percent in Asia Pacific, snd wre flat both EMEA Geographically, sales increased 4 percent in Latin America/Canada, 1 percent in Asia Pacific, and were flat in both EMEA andthUnited Sts and the United States. AAccqquiu+siistitiiooRnensqs:u:isitionsles grow lated1 he Augast 2015 acpisition of Mernbrans + AsTTphhceiicqssiuabbilsuutiysstiiionsnneeesgsssmaieilsse.nstasgpprrroThooiswvvaiitcddheeprrroeiolfiafttemmdiiicotcornootphpaoeborAoarunuoscgaemusssetmm32e0'bm1rsa5bcnreoascraqeaanunnsiiddsittmmiioaonodlunoelfespM slfafeootmrrfobflirrlaamtrntaaaitn.ioodnniliinnl tthhheee pfligfeeessnceicennecceens,,ewiinnddguurstosrtwritiaalh,l, and and opportunites erosthecompany specialty segments. This acquisition opportunities across the company. enhances 3M's core filtration platform and will help generate new-growth OOppeern+aitinnggOpiinneccnooimmene:g: income margins increased by 0:2 persntage pots 0 219 percent, helped by thecombination of ower rw + mOOmappateteererraraititaaiillnncggcoosiisntntcsscoaoamnmndeed mmsseaealrlergcgcititnniivssvewinsseeecrllrelleiinannsggeepdgprrabiiicycee0lin.ny2ccireepmsaepsrsoecesse.netdagbey points to 21.9 percent, helped by 0.4 percentagepoisdue tothe the S12 combination of lower raw millionrestructuring charge, Plus on dion Operating income plus an additional 0.3 pereenage pois ply due 1he Membres cision. margins were negatively impacted by 0.4 percentage points due 0.3 percentage points penalty due to the Membrana acquisition. to the $42 million restructuring charge, 29 22775500..00002299 TabeofComets Table of Contents SoanodGrtaphyicsBusiness Safety and Graphics Business (18.8% (18. 8% ooffccoonnssoloidlaiteddassatalleessd):: SoSlaelsSesel((msliiclohlianonsng)es)analysis OArgcatniicolnocsal currency Sales change analysis: Organic local currency Acquisitions TDreanssliartieons Divestitures TToraansslleatsiocnhange. Total sales change am ams 2016 STosm Som so $ 5,660 2015 $ 5,515 $ 2% 2.2 % In4.0 an(1.9) an(1.7) Te2.6 % 24% 2.4 % 262.6 )(0.4) ay(8.4) Ge (3.8)% ne2014 om 5,732 san 5.4 % e=n(2.7) 27% 2.7 % OpOepreParaairticnnnggtiicnnhccaoonmmgeee.((mmiilllliioonnss)) PPeerrcceenntt ocfhsanlgees Percent of sales some sams sa $ 1,390 $ 66% 07% sa 6.6 % 246% 27% 26% 24.6 % 1,305 $ 0.7 % 23.7 % 1,296 5.6 % 22.6 % "TfTahhceeilSSitaaelfsettayynaadnnsdd tGGrsraap.phhiiccMssosseerggmmperenontdtussceetrrvvoeefssfearibbnrrgoosaadidnrrcaalnnuggdeeopofefrmmsaoarnrakkleettpssrotththeatcttiiinnocncrrepearasoseduttchhteesssaasffeuettcyy,h, saseuceusirpittiyaaaonnrddypprrhooeddauurtciitnviv.iitteyyyeooffpanpedeoopfplllle,, fppIarnrcoocitltleeuitccdittieiinsoognnacnceodoqmuumsiiyeppsrmmtceeneimtna.stl;. gtaMrralaafjpfocihcripsscaarfofseedtotuyyccaatinnonddffsseaeercdciunurgrsiisttyyyisntppcrreloou,dddaueaccrtptcsseh,,riisitnonecnccltlauuulrddpaiilnrnoggdtbeebsocoirtrigdodnenerrspoaalrnouddtdiuccoicinvvtisslif,losssueecccsuhuurrriafittsayycreesssoos,lpluunitrtiiadootonnlsrs.y;e,ccnhooiemmamnmreirneacgrnci,diaearlyloesseolaltntudiitiooofnannslsl., ipnrcolduudcitnsgfcoromcommemrecricail aglracpshbiclsisshmenettisn:g aannddsryosotfeimnsg,graarcnhuilteesctuforralasdpehsaigltn sshoilnugtlioesns for surfaces, and cleaning and protection products for commercial establishments; and roofing granules for asphalt shingles. Year 2016resus: Year 2016 results: 2SS.2aalleepsseriicnnenSStaa,ffeeattynyadannfdodrGeGriragapnphcihucircsrsetanocteyaletdrdan5$s.57l.a7itibooinlnlieo,dnu,caaenndsiinnlccerreseaabsseeyoof1f72.2p6.6epprecernrccte.enntAt ciinnquUU.i.SSs.t. iddooolnlllaadrrsos. OOdrrgg4aa0nniipcerllocoeccnaltl,--ccwurhrrireelnneccdyyivsseaaslletesisuinrnecesresassed 2e.d2hpreerdcesnlte, sanbdy 19 persnt foreign currency translation reduced sales by 1.7 percent. Acquisitions added 4.0 percent, while divestitures reduced sales by 1.9 percent. OOnnaan Soororgglaanneiiscc logocrcaoawllt-cchuurwrreaensnccoyydssblayelerssobboaafssisins::g gamle, wich hd consistently strong year. + Sales growth was led by roofing granules, which had a SClomemedreccilainledsolinuttriaolnlsiacnldtpyersaonnad]ssaafertyylsshowed Commercial solutions and personal safety also showed posi growth consistently strong positive growth. year. + Sales lSoelvesSales declined in traffic safety and security. iinnEcrMeEaAse4wdeperrcfelan.t in Latin America Canads,3 increased 4 percent in Latin America/Canada, 3 percent percent iin ththe United United States States ndand 2 2 percent percent in in Asia Asia Pai, Pacific, whi while sales in EMEA were flat. Acuisions and divestiture als discussed in Note 2) Acquisitions and divestitures (also discussed in Note 2): + Acapisiion sales growth elects the austin ofCapital Safty in Augast 2015. Capa Safey is din gobs Acquisition sales growth reflects the acquisition of Capital Safety in August 2015. Capital Safety is a leading global provoifdfel poccion equipment. provider of fall protection equipment. Inthe our guaorf 2i01r5 3M divested lcsplat coneringbusiness in France snd substanalof is Horry In the fourth quarter of 2015, 3M divested its license plate converting business in France and substantially all of its library systems bine. In he fit quartof2016, 3M disid th remainodf ehre Horry systemsbasins. systems business. In the first quarter of 2016, 3M divested the remainder of the library systems business. OOppeern+a"itinnggOpiinneccnooimmene:g: income otsled S14 billion, up 6.6percent. OOOrpppieeecrrreaaatttniiinnndggg iiionnncccwooommmeereeartmmoataartilgeenidnrss$iww1)e.e4rrceeboin22ltl44i,o..6np,pplueopercp6err.no6dtcoupofceeftsrisclnvaeeilnstet,tsy., bcceoonmmefppiaatrsreeedd tt1o0d223.7 ppFeeorrccueernnttaiinnr22r001155,2,0bb1ee5nnerefefisitttiirnnuggctfurroroimnghbtiigoghhneesrr.sseelllliinngg + prices and lower raw- material costs, plus productivity benefits related to dOpeersaitirneg iinmcpoamcetsmoanrgmianrsgiwnsr.e negatively impactedby margin dilution Operating income margins were negatively impacted by margin dilution ltd othe Capital Safty suiston, and fourth quarter 2015 restructuring actions. related to the Capital Safety acquisition, and divestiture impacts on margins. 030 22775500..00003300 TabeofComets Table of Contents Year 2015res: Year 2015 results: SpSeoarllcoeessntii,nn SnSaadffettfyyoraaenniddgnGGcrruaarpprhheinicccssy orandi5n. totaled $5.5 cbiillelioodn,,ddsooawwlnenb33y..85.pp4eerrpcceeernnctetniitnn. UUA..cSSq..uddioolsllltaarirsos..nOOarrdggdaaenndiicc2lo.oaclpae-lr-ccceuunrrtre,ennwcchyyilssealdleeissveinnsciertersaesessdr22e.d44uced les by percent, 0a.n4dpfeorrceeingtn. currency translation reduced sales by 8.4 percent. Acquisitions added 2.6 percent, while divestitures reduced sales by 0.4 percent. Onanorganic calumnyslsbass: On an organic local-currency sales basis: Soh vad by on re, mmr sions. nd pre iy Wh sls ns ta iis Sales growth was led by roofing granules, commercial solutions, and personal safety, while sales were flat in traffic safety percent in LatinAmerica Canada. + SaSanaldleessseiicnnuccrrrieteyaa.sseedd66 ppeerrcceenntt iinn AAssiiaa PPaacciiffiicc,, 33 ppeerrcceenntt iinntthhee UUnniitteedd SSttaatteess,, aanndd 22 ppeerrcceenntt iinn EEM MEEAA,, wwhhiilleesslaelessddeecclliinneedd 1| percent in Latin America/Canada. AAccqquui2"sisiittiiAooennsusisasnniddtddoiinvsevaslteietsusrge:rs:o fics the cisionof Capital Safty in August 2015. Capital Safety i lading global + ApIpnrcrotqvhouiodivsefiiortiouoodrfntfefhfsalrqallllueppsrrrogoitrtceeooccwrfttiitoh2on0nr1eue5fq,iluep3cipmtMsmetdenhinetvt.easctqeudististiolniconfsCe appliatatl Safety in August 2015. Capital Safety is a leading converting business in France and substatally lof global brary sInysthteemfsoubursthinqesusa,rter of 2015, 3M divested its license plate converting business in France and substantially all of its library systems business. OOppeerra+attiinOnggpeiinrncacootmmiene:g: incomein2015 led 1.3 billion,up.perce. ++ OOOOppppeeeerrrraaatittiiinnnngggg iiiinnnnccccoooommmmeeee immmnaaarr2rgg0gii1innn5ssitwwometeaprrleeerd22o33$v..177ep.3emprebecricnlweleeintonrtsnte,oofdufspislave0lsen.7,s,bpccyeoorhmcmiepgpnahatre.reersddlt1oi.2n222g..6prppieecrreccseeanntntdiinno22e0011r44.aw teil costs, long with + pOOprprpooederduraucattctiiitvninviggtiytiiy.nn.ccoommee margin improvements margins ply from were driven by higher selling prices and lower raw- material costs, along with auisiionswasprs offetby bn rom divestitures, which resid na eOtpemraatrignigninpecnoamltey o 0.2 precntge pois. margins penalty from acquisitions was partially offset by a benefit from divestitures, which resulted in a net margin penalty of 0.2 percentage points. HealthCareBusines (18.4%of consolidatedsues Health Care Business (18.4% of consolidated sales) : SaSlaelseSesl((emlsiiclolhinaonsng)se)analysis Sales change analysis: A`cOrtgainioc noess cumeney Organic local currency TToATruarclanqsnsulsitlesaisittoiioonhnnisnge Total sales change w 5 e wTms Elau Bz 2016 2015 2014 $ 5,527 $ 5,420 $ 5,572 35% 3.5 % 020.2 17)(1.7) 20% 2.0 % 37% 3.7 % 030.8 a2(7.2) are (2.7)% ssn 5.8 % 040.4 17)(1.7) ase 4.5 % OOppeePrronartiicnnnggtiicnnhccaonomgmeee.((mniilllliioonnss)) PPoerrcceennttocfhsalnegse Percent of sales s 1s os as 12 $ 1,754 $ 1,724 $ 1,724 18% --n 31% 1.8 % % 3.1% 7% Fre 090% 31.7 % 31.8 % 30.9 % "The Halt Car sgment serves markt ht clade mica iis nd hospitals, pharmaceutical, dentalsndorthodontic The Health Care segment serves markets that include medical clinics and hospitals, pharmaceuticals, dental and orthodontic pracioncs, beth information systems, nd ood manufacturaindg sing. Products and srcprovided to tesad oer practitioners, health information systems, and food manufacturing and testing. Products and services provided to these and other market include medial and sical suppis skin eshth and info prevention produc, inal ond tsdonnl rvs markets include medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug clivry system, ora arsoltons (ntland orthodontic prodscts), health information systems, and food safety products delivery systems, oral care solutions (dental and orthodontic products), health information systems, and food safety products. a31 22775500..00003311 TTabaleoofbfCCoolmnetetensts Year 2006resus: Year 2016 results: Healt Cor sl ted 5. bilo, an increase of2 percent in U.S. dollars Organi osl-currncy sles increased 3.8 pera. Health Care sales totaled $5.5 billion, an increase of 2.0 percent in U.S. dollars. Organic local-currency sales increased 3.5 percent, acquisitions added 0.2 percent, and foreign arene tanto reduced sos by 17 pres acquisitions added 0.2 percent, and foreign currency translation reduced sales by 1.7 percent. On an organic calcuslsbass: On an organic local-currency sales basis: Sale row was broad-based aos he cir Health Care port, by food say, ria and chronic care, snd Sales growth was broad-based across the entire Health Care portfolio, led by food safety, critical and chronic care, and dng delivery systems. drug delivery systems. + On geographic bass,slincreprasesntin Avi Paci7fpeircs , Latin Ameria Can2aperdce,nt in the On a geographic basis, sales increased 8 percent in Asia Pacific, 7 percent in Latin America/Canada, 2 percent in the United Sses, and 1 percent in EMEA. United States, and 1 percent in EMEA. In developing markets, Health Care organi oalcurencysles ren 7 erent. In developing markets, Health Care organic local-currency sales grew- 7 percent. 3M continues o increase investments cross to businesses fo dive flint growth noth uur, 3M continues to increase investments across the businesses to drive efficient growth into the future. AAccqquiu+siistitiiooRnnesqs::uisiionsles growth lated1 he March 2015 purchasoef Irs Medical Crp, manceofhel care products ha disinfect and protectdevices usd for Acquisition sales growth related to the March 2015 products that disinfect and protect devices used for cess ta paints bloodstream, purchase of Ivera Medical Corp, a manufacturer access into a patient's bloodstream. of health care OOppeern+a"itinnggOpiinneccnooimmene:g: income increased 1.8 prsento S18 bill, + OAOOpppeceerrraaaqtttiiinnungggiiiinnnhscccaooodmmimeeeaimimmniaoacnrrrgingeimainnsassseldwwiem1erp.r8eea cp33te11o.r.c77npepnepetrertcorcea$n,i1tn,c.g8coobmimipnllpacioarorneme.ded t0moa3r13g51i.8pne.precrceenntt in in 20152015. Acquisitions had a minimal impact on operating income margins. Year 2015 esl: Year 2015 results: HallCar sles tale 5. ilo, deseoaf27 percent US. dolar. Organiclocal curency sles inereasd 3. perce, Health Care sales totaled $5.4 billion, a decrease of 2.7 percent in U.S. dollars. Organic local-currency sales increased 3.7 percent, aciiaddied o0.8pnercesnt, and reg arene rant redoced les by 7.2percent. acquisitions added 0.8 percent, and foreign currency translation reduced sales by 7.2 percent. On On aa+nn oorrSggaaanlniiecc lcgorcoaawlt-hlcuwrcraesnucbyrsosaladl-esbsabbsaaessdsis::ac r os s mu c h of he Heli Care prof, inlading ood safety, hth information systems, + Sales growth was broad-based across much of the Health Care portfolio, Scoileeldaend cchrilonndiricucgandee,leoivredlrycasryesstoelmust,ions, and infection prevention critical and chronic care, oral care solutions, and infection prevention. including food safety, health information systems, Sales declined in drug delivery systems. OUnnistceopSartaepsh,iacndba1sp,esrclentiinncErMeaEsA. On a geographic basis, sales increased 8 prsentin percent in AviPacific, Asia Pacific, percent 6 percent in Latin Latin AmeriaCanad, America/Canada, 4percent 4 percent nthe in the + UInnditeevdelSotpaitensg, maanrdke1tp,erHceenattihnCEaM reEoArg. anic oal-curencysles grew erent. AcquisitioInns:developing markets, Health Care organic local-currency sales grew- 8 percent. Acqu+"isitioApAcrncqosqud:uiusicsititstiioohnnsaslaeilesssigfgerrocotwwtathhndrleaplatroteetddec1ttod ettvhhieecMMeasarrscchhd2200f11o5r5 appcucurecsrhsacnsetohoofafIIprsvaeseirantM MseedbdiliccaoalldCCsrotprp.a. .Inveeraa iis a manufactofuhreaeltrh manufacturer of health care care + oIpIfnnrodaadodddutdiacitattisioonntn,h,ayTTt rdrseeiosoianSSnfoodelblcuuutttsiaoiinnondsnespsLrsLoLLntCCee,,cltaalccdiqqeguuvniiirrcceeeedds used for access into a patient's bloodstream. itno Ahpeele20r11,pparyeorvsidneddaprcoavrid.eorns.ear sles in April 2014, provided a year-on-year sales roth growth benefit. benefit. Tropriovisder Treo is a provider of data analytics and business intelligence to healthcare payers and providers. OOppeern+aitinnggOpiiennrccaootmmieen::g income was fla in dollars $1.7 illo + OaOOcpppteieerorraaantttsiiinnntgghgstiiinnnccccooonommtmreeeibwmmuaatarserggdfiilnnasst hiwwniegerdhreoeerl3l3ap11rr.s8o8daupptcee$trri1scv.ee7inntttbyiiilnanlni22od00n11m. ,a5r,gccioonmmsp.paarreedd 0.309 to 30.9 persent percent in in 2014, 2014, helped helped by by portolio portfolio management management + Acuiion actions that ciomnpatrcitbsutdeductoehdigohpeerraptriondguictnicvoitmyeamnadrmgiarngibnys.0.2 percentage pons. Acquisition impacts reduced operating income margins by 0.2 percentage points. 232 22775500..00003322 TabeofComets Table of Contents Hlctronics Electronics andEnergy and Energy Business Business ((1166..00%%ooffccoonnssoolliiddaatteeddssaallees)):: Sales (lions) Sales (millions) Seles changeanalysis Sales change analysis: Organic loca cen Organic local currency Diesiures Divestitures Transition Translation Tolsleschange Total sales change ST oom 2016 $ 4,826 asm (7.5)% ---0(0.6) wn(8.1)% smn 2015 $ 5,253 asp (1.5)% ox)(O.8) an(4.0) Gare (6.3)% So sw 2014 $ 5,608 s2% 5.2% 13)(1.3) 590 3.9% OOppPeeornraitcinnnggt iicnnhccaoonmmgeee (millions) (millions) PPoerrcceennttochfsalnegse Percent of sales s wes Los Lz $ 1,075 $ 1,109 $ 1,122 Gn azpe i6a% (3.1)% (1.2)% 16.8 nw 2% 200% 22.3 % 21.1% 20.0 d"TTehhpeeenEdFallbeeiclttirootynn,iicsscoaasnntddfEElnneeetrrnggcyynsseegsgm,meeannnttdsseperrvveesrcsufsttooonmemoerfrssaliinenncsetelcoecrctetrroonndiieecvssiacaennsdd eecnneerrrggcyylmmaarprkrkeoetdtsus,,ctiisnn,cclliuunddicinlngugdissonolglautitiinoonnfssattrhhaactttipmsrpoprronovteeecttthhieoen: tdIoeeellpecucectonoimdmoamnmbuinfuloirinttchyical,atctciioootsnnt-sosenfnnfeeeittcwwteoiovrrkepksns:e;lsaasynn, ddanippdnoodswpeueersrrf:oggeremnnheeiarrgnaahtct-iieopoenonrfaafennolddremcddatirinsosctinrebiibucutuditdioeonvsn.iac. neTTsdh;hiiesaslbessrceeatsggriimmcveeaenslnt:pt'irscolgedeluheccct-ttsorc,onniminiecpcssleussdoroilnlsuugtataiinioorndnnfsrdaiiisnnstcpcrlluluaucyddtueetraooepppetptsiir.ccoaatflel ecftsiilbomlne; solutions for the electronic display industry; high-performance fluids and Siorliutsi,onswhinicclhudseeprsesessurteosnepnacskiitnagpeasnadndnreessionnsnlcccttiioclecihnnaotlioogny: circuits, which use electronic packaging and interconnection technology; abrasives; high-temperature and display tapes; flexible annfdsosturcchtsurtepsrodpurtodsuchtast.prTohvisisdeegomtehntprcontrogny snd and touch systems products. This segment's energy e`dsooteultcuettctiiitooioonnnnss include pressure sensitive tapes and resins; electrical insulation; infrastructure products that provide soorluhtieosnsl:awsinddevaiandyoofvebri-npdtuisn.d copperased eesommunications yen, andrenewable solutions; a wide array of fiber-optic and copper-based telecommunications systems; and renewable cory component both protection and energy component solutions for the solar and wind power industries. "TSThMhee pddriiossvppilladayeysmmdaiatsetteririniaacltlsspaarnnodddasscytysstesfmotrsibbvueusismnaiersnskepprroosvveiigddmeeessntfiislmvisncthhltuadtissneegrrvvpeeronnduuummcetersroofuuosrs mm1aarLrkkCeeDtt ssceoggmmmpeoetnnetts ooffmtothhneeitceolreoscct2ro)onLicCddDiisseppllleaavyyisiinindodunusssttr3ryy). s3hHyM aasnntddpehhrmeeosllvddbidddieeensvveidiccieesstsiinssnucucctchlahpusrdcaoesedslucalecltuulsulflaaormrrppfhihvooboenfnemdesiseafaarTknnreddretnatsatebgplrmebotsedn4u4l)tc)st,nniootenthtceealbbtusoaodooienkkgPPpCpCrrosotdnaeundccdtts5)eb)faydoaurut:vtoao1mrm)ioLotouCitsivvDpeetcddoeiismstppslplaauayytsnes.d.rTTmghhoeerndidtiioossroppsfllaae2pyy)atmpLmeaCntatsetDser.ritiaeaTlllhesseavasinnsedidopnas t3)s apsrtyrotoshvtveieimddceeosdvvbaauorrfsyy2iiin0nnegg1ss3lleivnaecnelldsudowovfeiflseleexaxiccnlluulursmsiivvbsiieottryyvoet1ofrd33siMfMeffeeorfroernrctaaapnnrruotmudhuebmcertrscobotffhfeeasstu,urcacrhh3e pMpprrrooiodedtueucccitttses.dn. AAbysmsosvoroamnerieoecuooosfmfpp33aeMMtteTi'nSsotsmnmuaulintlndtii-h-gllearaoyyueerprpsroooppodttfuiicccpataalslt.efFni3ltlmsM. pTpcahoeteentsntestisnpeeuaxxteeppni0irrtseedd at the end of 2013 and will expire over several years thereafter, 3M is seeing more competition in these products. 3M continues Tiencnhonvoatleogiy ahnedaKrnaoowf-hopotwicaallso pnrsoavniddelecsotmepnettisadonat netwagc1eho3lMogiynnddeprpodeoufcnts.d3peMtnp.troprictary manufacring innovate in the area of optical films and files patents on its new- technology and products. 3M's proprietary manufacturing to technology and know-how also provide a competitive advantage to 3M independent of its patents. Year 2016resus: Year 2016 results: EEpellrececetncrtot,noincnsdiaacnnfsdodreEEinngenerrcggyyassraaleleenss taortlnasledldi$$o44.n.8 rbbeiildllluiioocnen,d, sddlooewwsnnby8..110p1ppeerreccreecnnettniitnn U.S. U.S. dollars, dollars. Organic Organic ocal-curncy local-currency slessales declined declined 7.5 7.5 percent, and foreign currency translation reduced sales by 0.6 percent. OOnnaannoSororgglaaneniisccdlceoccarael-alcsuercdren1ucyspesrlacleessnbtbaaisnssis:M:'s clectoncs elated businesses, ith declines in both electronics teilsltons and Sales decreased 10 percent in 3M's electronics-related businesses, with declines in both electronics materials solutions and papplliycatitonesr.ial nd systems. 3M caine to be impacted by weak end market demandacross most consumer cectronic display materials and systems. 3M continues to be impacted by weak end market demand across most consumer electronic + ShaSlpanpleeliscfddaeltecicoerrneesaab.syseedddesacpplppirrnooexsiiimnmcaatteellyyt44]ppeermrccaeernnkttetiinns 3a3M nMda'srneeennrecgragyby-l-rereecllautterdde.bbuis3inMnesessxei,st,edwwitittshhraaennneiinwcanrbelcaesreeneienrgtleyelebccaoocmnkmsmhuuenntiicbacutsiaoitnnesimsmornoirnese + OtDDheneacnceeommgfbcfboeseperrrt22ab0p0y1h15id5,ce, cwwblahihnsiieiccsshhscincaoolnenetlteardcibebturcuitlctieeanddlemtdoota|trhhkpeeeetrrrseceedadnnuutcdcttiirinoeonnnbeoiitwnnhcaehbLnlaeeeirrgenyynA-ererreglnlyai.itec3ddMaCssaeaelsxen.siat.eddaintsdrenEeMwEaAb,leaendedrgeyclbiancekds2hepeetrcbeunstinienstshien OUnnitaegdeSotgrea.phSicalbeassidse,cslailneesdd1e1clpinerecden1tpienrcAesnat inPbcolth,LhateinrAemSeEriscal/CanoadacabnudstEiM neEsoAi,sancnodncdecenctlriansteedd.2 percent in the United States. Sales declined 11 percent in Asia Pacific, where 3M's electronics business is concentrated. Divestiture: Divestitures: + In Doser 2016, as discus Not2, 3M sodth set fscathode batry technologyout eensingbusiness. In December 2016, as discussed in Note 2, 3M sold the assets of its cathode battery technology out-licensing business. i33 22775500..00003333 abelComets Table of Contents OOppeern+aitinnggOpiiennrccaootmmieen::g incomedecreased 3.1 percent 011billion, Operating income eOpnecniengroimncpoamset Operating income dmpmaeoarcrrgrgeitiannslsseadwwnee3rdr.1ee r22pe22es.rt:3crpeupcneetrturctcroeiennn$tgt1a.ccc1ootimmbopipnlalsairorbeenedd.nte0of2i12t.1e.d1peeprsecrlcee,nntt in in 2015, 2015, as as diver divestiture gins and gains and productivity productivity + benefits from past portfolio and restructuring actions benefited results. mEaxrpgeinnsse.s lata portfolio managementsctions in2016, in addition Expenses related to portfolio management actions in 2016, in addition olor to lower organic organic volume, volume, reduced reduced operating operating income income margins. Year 2015 esl: Year 2015 results: EFpelrlecceetnrtto.noidcinsveacasnntsdditEEunrnecesrregryyedssuoaclleeedssstoootaaslbeddy$$5.53.30.3 pbbieilrlllciioeonnn,t, ddaoonwwdnnfo66.3r.3eippgenerrccceuennrttniiennyUU.t.SSr.a.nddsololalltlaairrossn.. rOOerrdgguaacnneidicsloloelc-sa<lb-ucyrurr4re.e0nnccpyeysrcaselaneltes.s declined declined 1.5 1.5 percent, divestitures reduced sales by 0.8 percent, and foreign currency translation reduced sales by 4.0 percent. On On aan+n"ooSrrgagaalnnieiccfwloooacrall-sMcauutrrrivennecMyy sssalleelssebtbraaossnissi:c eedbusiness,withgrowth in estos materi scltons fetby adecline in + SsdSoipalsllpeealsadywyecemmrraeateetaferslriaeiatadllissnpaap3nnrMddox'sssiyyemsslttaeeetcmmltsrsy,o, naa4isscps33e-MrrMecleeeanxxtteppdeiernrbiiIeuenVsnic'cneeseddessnssoeeosffr,terwr iccrtohoenlndgaditrieottdiiwootbnnhusssiiiinnneethshleeseceestelr,loeecnctitrcrloosnenmiicecaosstmmemamriruaakrilksecetsatsost.loutniosn,s offset by dct a m decline arkets, in and + rOrSeenannleecsswvcadaobbelpcleeracepeannhsreeigrdcgyyabpaaslpllslro,ddxseeiccmllliiannteeeddily.nc4repaesrecde1nt in 3M's percent energy-related Europe, wre businesses, as telecommunications, electrical markets, and flat nthe United Stes, ad declined 2 percent in Asa Pact and pertinLatin AmericaCons. On a geographic basis, sales increased 1 percent in Europe, were flat in the United States, and declined 2 percent in Asia Pacific and 3 percent in Latin America/Canada. DDiivveessttiitt3uurreMes:: completed the sale of isstaticcontrol busines in Jury 2015 3M completed the sale of its static control business in January 2015. OOppeerr+antiinnggOpiiennrccaootmmieen::g incomedecreased 12 perce0nSt11billionin2015. + OmOOapppneeearrnaagitteiinnnmgggeniiinntncccaooocmmtmieeeondmmsaearchrrggeaiiannsssreedwwcee1ror.ee2tr22p11ie..rb11cpueepntreticrtcnefoeongn$tt1hc.ico1gomhmbpeirpallariporeernddointd0o.u222c0001t..500i.ppeerrcceenntt in in 20142014, helped helped by by prioprior year year porto portfolio + PcmPoooamrntrbfaiotgnleioeomdmmearnanetndaaaugcgceteeimodmneoesnpnttethrsaaaccttitiaionornegnsicnoiincnn ot22rmi00eb11u55mtinrraeeglliaattoteneddhbsittygoohr0reee.rnn3peeprwwoeaadrbbculelceentcitevaunigtereyr.egpyo,,tspll.auss fourth fourth guar quarter 2015 2015 rescuing restructuring hares, charges, which which combined reduced operating income margins by 0.8 percentage points. ConsumerBusiness (149%ofconsolidatedsles): Consumer Business (14. 9% of consolidated sales): SaSlaelseSesl((emlsiiclolhinaosnng)se) analysis Sales change analysis: OrDgiavneiscilroecsal curency Organic local currency TToDTrtraniavlsnesstslltiaiettousiorsnenhsang Total sales change i a x 2016 2015 2014 $ 4,482 $ 4,422 $ 4,523 19% 1.9 % re-oy (0.6) i3% 1.3 % san 3.4 % s~o(5.6) az(2.2)% 39% 3.9 % on(0.1) 19(1.8) 20% 2.0 % OOppeePrroaartiicnnnggtiicnnhccaoonmgmeee.((mniilllliioonnss)) PPoerrcceennttochfasnlgese Percent of sales s 06s 106s $ 1,064 $ 1,046 $ 17% 52% 1.7 % 5.2 % 37% 7% 23.7 % 23.7 % 5995 san 5.3 % 20% 22.0 % d"TThhgee CCaonandspnuhmanerrmssaeecggymrmeetnntt,ssearrnvdsesomtmahraekrrektmesatsrkthehttast.iinnPcrcloludududectccsooinnsushmeiserrsrseetgtiami,el,ntooffiffniiccceelurrdeetetaoailfi,lf,ioocfffsicpcepblbuuyssiinpnreoesdssuctfotosbb,uusssiintneeasss,t, hhooommpereoiidmumcpptrrsoo,vvbeemmoemen.ntt,, dipimrrmouppdgrurocoatvvnseed,mmpeaehnnnatdtrpmpcroroaondcdsuyuucmctreetssta((idhdl,-eoias-i-nttyd-hyoooucturahrrsesserelplmf)r)o,a,drhbukcoeottmssm..e care products, protective Products in this segment care products, protective meal proiets, certain consumes eal personal include office supply products, stationery products, material products, certain consumer retail personal safety home safety products, and consumer health care products. Year 2016 es: Year 2016 results: CcCuoornnessnuuemmyeersrsrsaaemleslsatttooottnaallreeddd$$44w..55 bbliillellisioonbn,y, uu0pp.611..p33eppreesrrnccteenntt in in U.S. U.S. dlrs, dollars. Organi Organic losal-cuency local-currency slessales incressed increased 1.9 1.9 percent, percent, and and forsgn foreign currency translation reduced sales by 0.6 percent. st 34 22775500..00003344 TTabaleoofbfCCoolmnetetensts On an organic calcuslsbass: On an organic local-currency sales basis: + Sale growth was ld by home provera. in dionto consumerheath care. Sales growth was led by home improvement, in addition to consumer health care. On scopaphic bass,sl increasd 6 prsent in AviPacific, nd 3 prsent the ried Ste, were ft in Lat On a geographic basis, sales increased 6 percent in Asia Pacific, and 3 percent in the United States, were flat in Latin `America Canad, and decli6pnrseendt in EMEA. America/Canada, and declined 6 percent in EMEA. OOppeern+aitinnggOpiiennrccaootmmieen::g income wasSL billion up 1.7percefrnotm 2015 OOppeerraattiinngg iinnccoommee wmaarsg$i1ns.1wbeirlleio2n3,.7upper1c.7enptercebnottfhr2om012601s5d. 2015, benefing rom ongoing productivity flrs Operating income margins were 23.7 percent in both 2016 and 2015, benefiting from ongoing productivity efforts. Year 2015res: Year 2015 results: Consumer sls ttle$4.4billion, down 22 percent in U.S. dollars, Orga local-currney sles increased 3.4 orca, and Consumer sales totaled $4.4 billion, down 2.2 percent in U.S. dollars. Organic local-currency sales increased 3.4 percent, and Toregn cuenta rd eesby 5. pret foreign currency translation reduced sales by 5.6 percent. On On aa+nn"ooSrragglaaneniisccglcorcoaal-ccuuwrrareesnnclcyoysdsblaylesshbboaamssesis::mprovemcor, stationery and ofc suplcs, and ome car. 3Mals posted pasiive + OrgSronaolnewstscthhgorninonsrwaicttpshohcnwioscansbussulmemsed,erbryohbrehegaoaalmntthiecccialmrroecparbboluu-vssceiiunmnreeressnns.c.t,ysstalteiosnienrcyreaansdedofSficpeerscuepntpliienst,haenUdnhitoemdSetcaatres.a3nMd3alspo eporstetd pAossiativPeasi. + On a geographic basis, organic local-currency sales increased 5 `Iwnhdielvessleopsining bmoatrhkeEt,EsAlesangdroLwatthin wAme3raipcrasseCnatnad were fla. while sales in both EMEA and Latin America/Canada were flat. percent in the United States and 3 percent in Asia Pacific, In developing markets, sales growth was 3 percent. OOppeern+aitinnCggoniinnsccuoommmeee::roperating income was $1.0 bio, up 2percent fom 2014 + TOCOphopeenerrsacautotmiimnnbeggirniioannptccieooromamntoeeimnfmagsraigornigcnnionsgmswewoerwergreaeasn22i$331.7g7.p0ropebweritrlclchieoeannn.t,,duuupppprfo5frdr.o2uocmmtpie22vr2ic2t.e00ynptpcfeeorrnocrimenncu2tie0iennd1242nf0.o011td44i.veefisincis aos his business, The combination of strong organic growth and productivity continued to drive efficiencies across this business. PERFORMANCE BY GEOGRAPHIC AR EA PERFORMANCE BY GEOGRAPHIC AR EA hW WhehiitCleeom33pM0anmmyaananasagoegsueitstsszbbuusssiinonegesrsseasspggillocobbaaalrlllayy sdannaddtabbeellieivseeescsoitntssdabbruuyssiipnneeerssfssossreemggammnecenenttmrreeesssuuulrlttess.aarEetxtphheertmmsoolstetsreeavleeavnagnetntemm raelalsyurreps oooffrppeeerdrffwoon irrtmmhaainnnccte,h,e ctgHohteoseocggCmuropsampithiopicamcneaayrrreasaalaswworhhueeteirrxleipzhtoehresetegffdieinnobaaglylsrastlaphlheesissc1toac0rte33oaMMmdceacurtussastotaoosdmmiaeefrsrsfescraaoerenendtmmagaradeydeoe.pg.erAArafpopphroomirrctataiinooecnnesoomf.f ettAhaheesucpprurersoo.tddEouumcxcetptsrsosrotrmsccaooolvemmespptaoohrneeneienpgnteetsnsresstroaillldloybbnryyespI3ofMMsrot'emsodpoenwpreeiatrthaiitnoiontnshs.e to its customers are exported by these customers to different geographic areas. As customers move their operations from one cCoongsruampptiiconariatfhoatsgoetohger,spShMTi aese.sFlinwanicliall lin.formTahtii,onncrelastleedso 3pMopreraationsoignrvaaprhiiocusagreosgarranpohitc nardeiaciastpiroonfviedend-iun s geographic area to another, 3M's results will follow-. Thus, net sales in a particular geographic area are not indicative of end-user Note. consumption in that geographic area. Financial information related to 3M operations in various geographic areas is provided in Note 17. is 35 22775500..00003355 Table of Comes. Table of Contents Asummary of ky inforsmndaditsciusosionn elatedto IMsgsogrphi areas lo: A summary of key information and discussion related to 3M's geographic areas follow-: NNeettessolaeflesws(o(mmrikilldllvioiiondnse)) sles CCVoolm%oumpeoom.fnwenpotrsolrdaoogfwfaennindietectsesslaaelleensssccthhaannsgge:: PrOVPirrocigcleauenmiec organic ocalcurncy sls Organic local-currency DAicvaeusitsiiuiroenss Acquisitions sales TTDTotariavannelssssultaaiitltuieoorsnencshange Total sales change T Ud A o Mmd e m mee a o Omer United Sn pai Sie Chih Usdet Wede States SE Sa 5 eis 32000 5 dS S000 $ 12,188 Ws maw Msn 96% TTT 40.5 % Asia Pacific $ 8,847 29.4 % 2016 Europe, Latin Middle East America/ & Africa Canada $ 6,163 $ 2,901 20.5 % 9.6 % Other Unallocated $ 10 -- Worldwide $ 30,109 100.0 % 07% aon 0.7 % 0) oy (0.2) 0s Taw 0.5 13 07 1.3 o on (0.6) Sr -Ev ab 1.2 % (2.5)% (0.3) (2.8) 0.7 (0.2) 0.2 (2.1)% eon ao (0.6)% 0a 1.0 0 7 0.4 17 13 1.7 ey (0.7) ey oa (2.5) (ie ann (1.1)% (2.4)% 6.1 3.7 1.3 (0.3) (7.4) (2.7)% -- eww -- (0.8)% = wr -- 0.7 -- op -- (0.1) -- -- 1.2 -- ey -- (0.4) -- an -- (1.2) ET -- (0.5)% OpOepPneoriratncinnggtiincnhccaoonmmgeee.((mniilllliioonnss)) Percent change Sam sass $ 2,948 $ 2,560 $ ini 8% 11.4 % (0.8)% Les Ss 1,046 $ 28% eam 2.8 % 705 $ (0.2)% Gos Tas (36) $ TT -- 7,223 4.0 % FFpeoorrcrteoonttaslnyydeeaarsre22l0l0i11n66g,,paarssisschhioowwnnniinnctthoherfpp0rr.eee7ccpeeedadriicnneggsntta.albelAec,,qwwuoiorsrktlddiwowniiddeeasdsdalleeds1dd2ecelpiencrecdeln00t.,.i55pwpneheirrelceecdnd.it,vwiestiithhtrooerrggaarnnieiccduvvcooelldusumlmeeedsdebcecryreea0as.s1eesspeoorffce00n.t58. percent and selling price increases of 0.7 percent. Acquisitions added 1.2 percent, while divestitures reduced sales by 0.4 percent. AFmoreeriigcnacCuancaud, t0r5apsleatrotn riendtuhceedUsnailteesdbtyac1.,2pr0.e4cp.ercOenrtgainniEMloEs,l-acudrtdneecyesaalsees2din8crpeearsceedn3t7 pAerscienPtaciinfiLca.tiFnor 2016 Foreign currency translation reduced sales by 1.2 percent. Organic local-currency sales increased 3.7 percent in Latin Ainmtemriactao/Cnaanaodpae,ra0i.5onpserrceepnrtesinenttheedU50n.i5tederSetanttes,of0.4 Fp'essrcleenst.in EMEA, and decreased 2.8 percent in Asia Pacific. For 2016, international operations represented 59.5 percent of 3M's sales. NNeettssoaallfeesws(o(irmllildllwiioiondnse)) ses % of worldwide sales CVoloumem. poroofgaennitcseesacthasn: Components of net sales change: PrOVPinrociscleuemmiceocaolrcguanriecncy sles Organic local-currency DAicvueisstiiairoenss Acquisitions sales TTDTrroinavansessasltailitteuioosrnencshange Total sales change Ged United States Siz $ 12,049 man 39.8 % 17% 1.7 % oi0.4 22.1 21.2 oy(0.4) 7--5 2.9 % AaAsia Pacific Soom $ 9,041 209% 29.9 % 09% 0.9 % ov0.9 os0.4 on(0.1) ca(5.2) ore (4.0)% 2015 Europe, Latin di Amie Ome Middle East America/ & Africa Canada Tem Siem S20)S03 $ 6,228 $ 2,982 205% om _imow 20.5 % 9.8 % Other Unallocated $ (26) Worldwide $ 30,274 100.0 % aor (1.0)% i1.8 0%0.8 010.7 en(0.1) aw (14.9) (srs (13.5)% Gare (3.1)% a64.6 is1.5 010.7 )(0.2) ae(16.9) _qiore (14.9)% 027 0.2 % Sot1.1 51.3 =o0.8 2)(0.2) -- ey(6.8) are (4.9)% OOppPeerornraitcinnnggtiincnhccaoonmmgeee.((mniilllliioonnss)) Percent change S260 S20 SLOTS 6S $ 2,647 $ 2,580 $ 42% amv qusme_ossme_ 4.2 % 3.8 % 1,017 $ 706 $ (17.5)% (18.5)% --(0S 63_4Q6em (4) $ 6,946 (2.6)% sFFeoolrlrittnogotaarliyccesearri22n00c11r55,e,aasseosssfhhoo1 wwpnnrsiinnentththe.pperAseeccdediqinngguttaaiblla,esd,sdsiaelldtes0s di5depcoeloricnneendsit4,4..99wpnhpoielrrecdnedni,vt,eswwtiiittthhurnoersggraenadicucvseodolsulmeuesibinycrne0a2secesrroofef0e0.2.2appFeeorsrccreneentntaasnndd ccspeuuelrrrlrcieenennngctcypyirntticrLaeaantislinlnacotrAieonanserrmseedoduufecc1ee.d1dnarpsadaelarlec,sie0sbnbyt9y.cp6A6e.3c8rqcappeueenirrstccieteniinto.tn.AsOOsarirdgdagPenadacici0flli.8oco,ccpaaaeln-rcccduue0rnrrr8tee,pnnweccryhycilesseanlldteeissviniennscEctirMrteueEarsAsees.sdeFred2od.r1u2.1 cp2pee1edrr5cc,seeannltmetseinnbtrythahe0et.2oUUnnnpiilettreecoddepneSSrttt.aaattFtieeoossnr,,es.1i1g.55n repr60.e2pesrceentonf3t4sesldes. percent in Latin America/Canada, 0.9 percent represented 60.2 percent of 3M's sales. in Asia Pacific, and 0.8 percent in EMEA. For 2015, international operations 336 22775500..00003366 TaofbColtees Table of Contents GeographicArea Supplemental Information Geographic Area Supplemental Information ion, retPng (Millions, except Em ployees) -- pases -- Employees as of December 31, 2016 2015 2014 CCS ottons Capital Spending 2016 2015 2014 adeeim Property, Plant and Equipment - net as of December 31, 2016 2015 UnitedStes United States Asa Pac Asia Pacific Faroe,MileEast ad Afi Europe, Middle East and Africa Lain Acr1ndcCanaada Latin America and Canada TotalCompeny. Total Company SSE 35,748 Wie 18,124 208 20,203 raw 17,509 SiS 91,584 SOT 35,973 en 17,642 55 20,563 sae 15,268 de 89,446 ISHS BMS 9% S 99S 49S dE 35,581 as mm mas len 17,854 086 2 was As 20,506 sw 6 om ww 15,859 ow Sw STR ST0s SESE SE 89,800 $ 834 228 294 64 $ 1,420 $ 936 172 249 104 $ 1,461 $ 909 184 288 112 $ 1,493 $ 4,914 1,573 1,512 517 $ 8,516 $ 4,838 1,647 1,531 499 $ 8,515 Employment: Employment: Employment increased by 2,138 positions in 2016anddead by 35 poss in 201. The primary corthtdecreased Employment increased by 2,138 positions in 2016 and decreased by 354 positions in 2015. The primary factor that decreased amploent in2015 resid 10 fourthuri 2013restructuring actions hat impacted aprox 1700positions worldwide employment in 2015 related to fourth-quarter 2015 restructuring actions that impacted approximately 1,700 positions worldwide. "The 2015 acquisitions fcr Melicl Cor. Merbrans,and pil Say Group S.A RL creased 2015 hesdount by The 2015 acquisitions of Ivera Medical Corp., Membrana, and Capital Safety Group S.A.R.L. increased 2015 headcount by approximaely 2000 osions. approximately 2,000 positions. CapitaSpending/NetProper, PlatandEquipment: Capital Spending/Net Property, Plant and Equipment: Javesmnts in property. pant and cqiprmcnt sbgrowth cross many diene makes, helpingfo netproductdemand snd Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product demand and increasing manufacturing ffieney: 3M's capital spending by ographyhasbond by the United Snes (90 of spendinign increasing manufacturing efficiency. 3M's capital spending by geography has been led by the United States (59% of spending in 2016), foliowed by Europe, Middle Est nd Alice. AviPcl,1d Latin America Canad, Mis conning o ners ts 2016), followed by Europe, Middle East and Africa, Asia Pacific, and Latin America/Canada. 3M is continuing to increase its manfocurin and suring capably atin deoping conomics, inorder to mor closely aligns prot cpa manufacturing and sourcing capability, particularly in developing economies, in order to more closely align its product capability will war goorapie ans. V1 wil cof ake vesaas cn develope kt, suc Bl with its sales in major geographic areas. 3M will continue to make investments in critical developing markets, such as Brazil, Chins, Mesic, anaes, Pind, Suthast Axi. and Tukey Capa pein is discuss moe esl ir in MDA in he China, Mexico, Panama, Poland, Southeast Asia, and Turkey. Capital spending is discussed in more detail later in MD&A in the `ceion tied "Cash Flows fom Investing Activites section entitled "Cash Flow-s from Investing Activities." CRITICAL ACCOUNTING ESTIMA TES. CRITICAL ACCOUNTING ESTIMA TES Infomation regarding sgnifcnt ccc police i inched in Not 1. As sated n Note the preparstonof ancl Information regarding significant accounting policies is included in Note 1. As stated in Note 1, the preparation of financial Satmentrequiresmangement to makmassandasmpions ha aft h reported amounotf ast, bile, vce statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and eed dslosaeof comingentset nd avis. Management bases seats on Hori experience and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and cn vain sumptions hatarebelieved ob essnsbl undehre circumstances, the resultsof wich for the as or and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for eking gone shout ve or ves ees ad aos tht smo onl eves Fors lhe overs. lsh making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may dle fom thes stimates. may differ from these estimates. "The Company belies most rca scot imate late 0g procesings, heCompanys pion ad postmen The Company believes its most critical accounting estimates relate to legal proceedings, the Company's pension and postretirement obligation, st impairments and income axes. Seo manage as dicussd the develop, secon nd loss of 3 obligations, asset impairments and income taxes. Senior management has discussed the development, selection and disclosure of its rial accounting cimats with thAuditCommits of 3M Baofnivsdtos. critical accounting estimates with the Audit Committee of 3M's Board of Directors. textProceding: Legal Proceedings: "The catgoricofclaims for which the Company has probableandcstimable iy, heamountofits ity acral, nd the The categories of claims for which the Company has a probable and estimable liability, the amount of its liability accruals, and the estimsen of wsed surance tvblosre rl acouning cmais reed1 ge rosin. laws wee oe estimates of its related insuraaace receivables are critical accounting estimates related to legal proceedings. Please refer to the ton tiled Pros or Dilosts and Recordionfg Laiiis and Insaranes Receivables Rested 10 Lag Procendings" section entitled "Process for Disclosure and Recording of Liabilities and Insurance Receivables Related to Legal Proceedings" (entind in "Legal rocedingsi"n Neve14 foadditional information shosuch imate (contained in "Legal Proceedings" in Note 14) for additional information about such estimates. Psion andPostetiementObligations: Pension and Postretirement Obligations: 3M has varioscompanysponsoredeect plans coring substantially all U.S. ployces and many employes outside the 3M has various company-sponsored retirement plans covering substantially all U.S. employees and many employees outside the United Sites. Tho primary U.S. dfined bene pension ln vss coed fo nc participative United States. The primary U.S. defined-benefit pension plan was closed to new- participants effective 537 22775500..00003377 TiofClontees Table of Contents Janey 1.2009. The Company csouns for fs dfined Benefit pension snd posircncththcare a if nancebei January 1, 2009. The Company accounts for its defined benefit pension and postretirement health care and life insurance benefit plans in cordance with Assounin Sanda Caifcation (XC)715, Compensation Retement Benet in messinlagn plans in accordance with Accounting Standard Codification (ASC) 715, Compensation Retirement Benefits , in measuring plan aes and beltobligations nd i deteminitnhge mountof net periodic bene cos. ASC 71 eis clays ecognie assets and benefit obligations and in determining the amount of net periodic benefit cost. ASC 715 requires employers to recognize he underfunded or ovefunded ats of definedbel pensico postetement pla 34 stor Hail ns satement of the underfunded or overfunded status of a defined benefit pension or postretirement plan as an asset or liability in its statement of nancial oso sndrecogni changes he funded sae i the yar in hich the shang cer rough accumulated cher financial position and recognize changes in the funded status in the year in which the changes occur through accumulated other comprehensive income, ich is a comopf onekbeoletrs" cui. Whi he companyblessthe valuation methods sed 0 comprehensive income, which is a component of stockholders' equity. While the company believes the valuation methods used to cinth ie vaolf pluan asact 1appropri and como ith her market prises, the usc of drt determine the fair value of plan assets are appropriate and consistent with other market participants, the use of different methodologies or asuptodiecen th i vaolfeutae nancial instrament could rest iro cmsof ic methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair lu th eportin dt. Sc Note 1 fo diol discus ofcual ssumpions vid in deteminingdefinedbenefit value at the reporting date. See Note 11 for additional discussion of actuarial assumptions used in determining defined benefit pion and posite health care ish nd expenses pension and postretirement health care liabilities and expenses. Pension benefits asoiied with hes lns aogenerally based primarily on cach pricpant's eas of vic, compensation, and Pension benefits associated with these plans are generally based primarily on each participant's years of service, compensation, and agesreiremeto rmination Toe becht iligatonepesotth rae eva of he bene ht cwplasess rand foie age at retirement or termination. The benefit obligation represents the present value of the benefits that employees are entitled to in To tee Tor rte sendy odor oh msrmert 84.Toe Corp; esatefess veges oftoners the future for services already rendered as of the measurement date. The Company measures the present value of these future bene by prjcting bent pyment cashflowsforcoch tue period ad countihnesge chflowsback the December 3. benefits by projecting benefit payment cash flow-s for each future period and discounting these cash flow-s back to the December 31 measurement dt, ung heidof portfolio igh ul. oxdncome debt nrcst woudproduc cash flows measurement date, using the yields of a portfolio of high quality, fixed-income debt instruments that would produce cash flow-s iit miming ad amount ste projected Tre bn. Historically th singe aggregastcoeudt af usdfor cach sufficient in timing and amount to settle projected future benefits. Historically, the single aggregated discount rate used for each plan's bent blgaton wasss und fo he calelation ofl ntpricene cos, including the semenof he service: plan's benefit obligation was also used for the calculation of all net periodic benefit costs, including the measurement of the service andntcrst cots. Beginning in 2016, 3M changed th method do atmothe sic sd terest cost somponcatof he et and interest costs. Beginning in 2016, 3M changed the method used to estimate the service and interest cost components of the net geodon wt abe poe sbvewert enept cose. Thonesrmelbod messes srioseos ae ers oot wporiel WOrE periodic pension and other postretirement benefit costs. The new- method measures service cost and interest cost separately using he sp yd ure approach pple cach sorspondin obligation. Srvc cosas determined based oo dane the spot yield curve approach applied to each corresponding obligation. Service costs are determined based on duration-specific Spot tes pple heserio ost cash flows. The ces cot cultion is deirnined by applyingduration.speci spt cs spot rates applied to the service cost cash flow-s. The interest cost calculation is determined by applying duration-specific spot rates theyearyes projected benefit pment. Th spotyi sureappro docsnoact he meamementofthe ol ene to the year-by-year projected benefit payments. The spot yield curve approach does not affect the measurement of the total benefit ahligions he shang n series ad festcue oft the scales doses ovordod fe fr compebensies obligations as the change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income, The Company changed oho new method1 provide moe prise measurofservice and ees cots by improving the income. The Company changed to the new- method to provide a more precise measure of service and interest costs by improving the comlaion betwee he pected benefit ae lw ad th drt po yi curv te. The Compan aceounidfo tis change correlation between the projected benefit cash flow-s and the discrete spot yield curve rates. The Company accounted for this change va change imate prospetinly begining i he rst quarterof 2016, as a change in estimate prospectively beginning in the first quarter of 2016. Using hismethodolos, the Company determined discount te frit panass follow: Using this methodology, the Company determined discount rates for its plans as follow-: USQuiia U.S. Qualified Pension ett International ry Pension aie (weighted Sd average) Foursen U.S. Postretirement Medical Tenet ction December 31, 2016 Liability: Benefit obligation aan 4.21% asm 2.54 % am 4.08 % 2017 Net Periodic Benefit Cost Components: Serviecomt eo Service cost Interestcost Interest cost wan 4.44 % Saw 3.62 % ame 2.32 % ann 2.25 % ame 4.37 % san 3.41% voter pliant semen deeruining theCompany' pei axons sesdWilakAnSCe71s5sthe expected tars Another significant element in determining the Company's pension expense in accordance with ASC 715 is the expected return on pla asset. whichis based co istorcl results for ilalloctionsaman ast ass. For the primary US. qualified pension plan assets, which is based on historical results for similar allocations among asset classes. For the primary U.S. qualified pension lan. he expected anger sotf cetu on an snnulized basisfor 201715725, 025% howe hn 201, Refer toe 11 for plan, the expected long-term rate of return on an annualized basis for 2017 is 7.25%, 0.25% lower than 2016. Refer to Note 11 for Information on how th 2016 ae wasdetermined. Retr castssumptions or nemaional pensionand cleposterent information on how- the 2016 rate was determined. Return on assets assumptions for international pension and other post-retirement bene lasnr calculated a pay-la bis sing pan atallocationsand expected og tof etu assmplion. benefit plans are calculated on a plan-by-plan basis using plan asset allocations and expected long-term rate of return assumptions. "The weighed average cpesed etm for he cman pension lan 5.16%for 2017, compared 0577 or 2016, The weighted average expected return for the international pension plan is 5.16% for 2017, compared to 5.77% for 2016. Forth ear ded Desember31,2016, he Company recogaized oil consolidated defined benefit re pein ad. For the year ended December 31, 2016, the Company recognized total consolidated defined benefit pre-tax pension and pstreirment expense (alr semen, carmen, spoil termination bens ad abe)ofS251million,down fom postretirement expense (after settlements, curtailments, special termination benefits and other) of $251 million, down from $556 milion in 2015. Deed bene pasion snd posetnemnt expense (lore scmnts, carats, seal rmination $556 million in 2015. Defined benefit pension and postretirement expense (before settlements, curtailments, special termination bene andothers anit 0 incsas0aproximacy $325 million in 2017, an nea of $74 milo compared 0 2016 benefits and other) is anticipated to increase to approximately $325 million in 2017, an increase of $74 million compared to 2016. =38 22775500..00003388 TTabaleoofbfCCoolmnetetensts "The able bens summariztehse impact on 2017 pension expense for he U.S. and nematonl pensonplan of 0.25 perecnage The table below- summarizes the impact on 2017 pension expense for the U.S. and international pension plans of a 0.25 percentage pint ness decrease he expected ogre ofrtm cn plaastand discount te spins used to mess lan point increase/decrease in the expected long-term rate of return on plan assets and discount rate assumptions used to measure plan Habis and2016 nt periodic bent cost. The tbl assume lor tor sr held constant, cluding the lopeofth liabilities and 2016 net periodic benefit cost. The table assumes all other factors are held constant, including the slope of the dicount te yickd curves. discount rate yield curves. Mion D{oicra(Decens)in NePoipliBeetyCoonttena i (Millions) Increase (Decrease) in Net Periodic Benefit Cost Discount Rate Expected Return on Assets -0.25% +0.25% -0.25% +0.25% Us.pensionplans Tow T oo s ws om U.S. pension plans $ 31 $ (28) $ 36 $ (36) Intentions] pein plans 2 a u an International pension plans 23 (19) 14 (14) AsstInpuirmens Asset Impairments: bAAsiolsflioDofni.DceMccamenmbaegbeerrme3311n,,t22m00a116k6,e,snneetttppirrmoopapeteretryty,i, dpplaaannsttsauanmnpddtceiiqounpsipmimneepnnrtattortlianledgd t$4h8..5cobinillsllliodonsatanendd nnfietntaidndceeinantltiifsiiasebblmle iiennttnaannfggoiibbllweehaaissscsehetstascttoiatsalleerddes$$2t2..s33 billion. Management makes estimates and assumptions in preparing the consolidated financial statements for which actual results ailsltomoefragceopvierrdobnginpse.rioTfohedmsees.ctiTmhaitseisnacnddeassthuerrepciovocnrarasebictyoosfyomaognivtodread sbysmaemnpalgoyeemdenatnhnbtdupseirinoediscsa,llyinacldudjinsgiad will emerge over long periods of time. This includes the recoverability of long-lived assets employed in the business, including assets of acquired businesses. These estimates and assumptions are closely monitored by management eCixrpceucmtsetdasnceesofwahreranat.seFoor ipnesrtfaoncrem,anecxpeeocfttehdesraeltateedsasmtaygrobuep.sorenedor an impairment recorded circumstances warrant. For instance, expected asset lives may be shortened or an impairment recorded basedon henge he and periodically adjusted based on a change in the as expected use of the asset or performance of the related asset group. OFihe 52.3 bilo inetdenifidle nani assets, S06 in lates ondvee dens, primary Capital Saft, Of the $2.3 billion in net identifiable intangible assets, $0.6 billion relates to indefinite-lived tradenames, primarily Capital Safety, `hos radensmen S520 million st acquisitiondi)havebec in existencefo ver 55 cars feoNoro 2 for moredot) The whose tradenames ($520 million at acquisition date) have been in existence for over 55 years (refer to Note 2 for more detail). The privy valuation chimique usd in eximatithne Fi al ofindefinite intangibleassets (tradenames) i discounctaesd primary valuation technique used in estimating the fair value of indefinite lived intangible assets (tradenames) is a discounted cash To approach. Spica, a elofiroyaflty rate is aplid o ctimated sles, withthe resulting amounts he discounted ving flow-approach. Specifically, a relief of royalty rate is applied to estimated sales, with the resulting amounts then discounted using an sppropriste maketechnoogy discount rt. The roef rofyal at ith cimated royalty ok. marke participant would an appropriate market/technology discount rate. The relief of royalty rate is the estimated royalty rate a market participant would oy 0seis the righ fo market produce th product. he eslingdiscountedsash flows ss than th bok vs ofthe pay to acquire the right to market/produce the product. If the resulting discounted cash flow-s are less than the book value of the indefinite lived intangible ast impairment css, and thease alu must be writen down. Based on mpairment esting i he indefinite lived intangible asset, impairment exists, and the asset value must be written down. Based on impairment testing in the hind quartof 2016, no impart was indicated. The discounted cash flows etd1 the Capital Sty tradename exceeded ts third quarter of 2016, no impairment was indicated. The discounted cash flow-s related to the Capital Safety tradename exceeded its book valubye mare than 10 percent. book value by more than 10 percent. 3h3MeM fggooouoordtdwhwiulilll ttaoottaalloteefddcaaeappcpphrrooexxaiirmm.aattpeellyya$$99i..22nbbiilllleiisootnnsianssgfoofof DDgeeococedemwimblbelre3i31r1,d, 220011oa66t.33rM nMep'osaraentninnnuguaalulnggitooeodvwedli,ll wiiimtmhppaililrmmesenntot teesdsttiinnsggiiissgppeenrrffeo1o0rrdmmeedd in in mtrrheeeppeoofrrottsuiinerntggghmuieqntnui,tta.rhtRReaeervppoeoosfsrtetiiiamnncigglhauiryneciattors.nasrIormeenpiocacnniercmleheeavvnreeatlctbetbeeseltroilinwosg-esttfhoheerAgbBLouuMossidi.nwneeesilssplossrisetegigdnmmogenenuentntailtetealvse,rcle,obprbuorutrettiscncpaagonnubdbneei1t0.ccloodevmimevbblii,isnnwoeeniddt.hwwahhlelenngodprioeodpdrowotrititlilnncggaosumwsinbogiitntsnseedwwiaitttnohhyiiannftthhsee reporting nitsfor impaiment esting. same segment have similar economic characteristics. reporting units for impairment testing. At 3M, reporting units correspond to a division. 3M did not combine any of its oAAtnnimiimamtppoaidimrmaeeennttVlloolssss oaggfeenntseherraalrllelyypowwrotouiulnlgddbnbtee,rreeTcchootgginnimizzeaeddtwwehhdeennTtthihevccaalaurreyioinfngaaarmmeoopuunontrtotoftfihtinheetgrreieeppotrotrritniinggnuuenndiits'ssnnietntgaacssasemstisneegxsxceFeeordssththeheepring estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using earnings for the reporting snietsmheupriic cbiy npgicrecoamaipnpgrsoaacthfofosrtacbolmepaanrdabglreowiinndgbuussignerssoesuohprabeyhauve sloindgisHcniosutnogtreydancadsrhalcokwreacnoarldyosifsgeSneMrattyipincgally unit multiplied by a price/earnings ratio for comparable industry groups, or by using a discounted cash flow- analysis. 3M typically buppsoouesssstiitiitnvhveeeesooppspreiecrireana/tteaiianndrggndiiionnngcncosomrmoabeetaiuaonsndadigpncpaearssoshhascffhllwoowfhwos-er.s.rs33tatMMbhelepusrsaieencsdetcshhgeoermoddwiissniccngocgsuubnnautoetsddionvaceaasslsshuehasftfltilohoowanwt- ahamppaepvptrerhoooaasdccliohhnndffgoiocrhaisststtetaasorrtrat-yuudppad,,ndoloosntsrssacppkoovssriieitticoooennrdaasnnoddfwagddreeerncaselniirtnaneitdgni.ng.g3M businesses, in addition to businesses aclcomuosmeiscdiorctouhnetconcdaitsiolnso.w san also uses discounted cash flow- as an additonal where the additional fol forbusinesses that ay be growing a slower rt than planneddu 0 price/earnings ratio valuation method indicates additional review- is warranted. tool for businesses that may be growing at a slower rate than planned due to 3M economic or other conditions. bAAusssiddneeesssccsrrsiibgbeemddeniinntsNN.oottFeeor1166,a,nfeyfffcpertcoitidvvueectiinnmttohhveeeffsirrstthaqqtuusaarlrteteroodff 22i0n01r16e6,p,e33rMMingmmuaanddieet.achpparrnogodedusc,ut ftlihinenCeeorrmeepppooarrttniinyngg sccphhpaalnniggdee iihnevnorvlevlionaglttetwvwiooitfonfvsiagtlsue cbmmouemsetpihnloheedsttsetoodsdedetgestmteseerrenmmstisis.nnmeeFeotthnrheetanimomypfpaopnacrcottdocupnncetggnmooiooosddv]wweisglillotlhoooadftfhttrlhheeelsuaapltssesdoascioiniactreeindproreerpftpioonorgrtrtiieunpnngogirtutncniihtnitsgas.n.ngDiDetuusrs,riitinnhmggepthaChceeotmeffdiiprrsabstnygqyutuaharaiprstpnelerioeowdffst22h00ec11r6,e,rltathhtieevaCeCnodofmamdpirepatvaneanyrlyumeined atcthhotaemtcpnnoloonetteieemxmdtppoiaatfsiirtmmaheseesnnetrsteseepmxxoiierssttnteietdnd.og.fTuTanhhnteey potential goodwill impairment for reporting units impacted by this new- structure and dsisccuassrionhatthaetxfioslltoeawds ehatt eie the sera Fourth rice2016 aus impainct discussion that follows relates to the separate fourth quarter 2016 annual impairment st nd sn determined test and is in the context of the reporting unit structure that existed at that time. 39 22775500..00003399 TabeofComets Table of Contents A`AgSsoooodffwOiOcltlcotoTbbheeerrse11, ,e22n00116p6,o,r33tMMinhhgaaddi22t66sprwreaimrreacryoymrpperpoiorsritenindggoufuntniihtss,lwiotiwthhitenenngprdeoipvroisritiinonnggs:uunnAiidttsvsaaancccccooeuudnntMtiiantngrgiffsoohrs,aapppCproroomxxmiiummnaiattceelalyyti68o6nppMeearrrcckenentttsoof,fhthee gDDSoioilsosuppdtllwiaaoyyinMllsM..aTaPthteeerersioeasnltsselanannSrddaefpSSeoytyryssttit(neemwgmhssui,,ncHHihteseiaawlntlehrceIInlncffooomhrrmmepaartCitiasiooepnnidtSaoSlfytstShetaeefmneft,soy,llIIoannwcdduuiqsnstugtrriiidaasillv)AAis,ddiohhSnoesass:ivrvAeetsdsovasannnddcaeTTndadappMePesusa,r,tieIfIrninicffaeaeltcsci,ttioiCononno(mPwPrhrmeeivvuceehnnntiicitinaoocntni,lou,nOdOerMsraltalhrCCekaeartrese, MecM Somoemlbmuirtibnoargnansnaa,aaPlcaequcruqsiuobsyinisatialtiipooSpnna)r)f.,eotaiaynnmdd(awtTTherrailacffhff3ii5iccnSpcSaleauffredetcetyyseantnohntded mCSSoeaecrpcu,iurtiratieltyyx.S.eaTTpfehthteeyfoeearssctatqiinmumeaiasttireetedidoponffra)tr,iirSnvvgeaaplulauunreeatsstiwofoionrtrhatthnhaeedpssePperuvreeripipofmroiactriatinitnlgiogyunnuSi(ntw2ist5hs0iwwcemherirleienlciiiolnnunodeexexfcscgeetosshoseodowffil, `wcSwaehrhperetyrreeinmthgbheeevrafial3urirevv0baaylluu,aeeppew2xraoxcsxe0siemidegea1ndtetitlsfhy6eiecs3ac5,daayprreiydrnnicnegegnxtcvaeoalslruumeobobfyrye,aappepsxprhcroaoexrxpieitmmhfaooatlrtedeolelynyrse33rs00eupppioeerrtrctceiennontfgp.t.upP3nrM istow'ssmimmtaharatarkpklpeeytrovvSxa1ilmu0aeabitatleltllbyibouonh$t2hn5DD0deemScc1ei2lemlimobbinbelrle3oi3orf1n1,g, o2a2ot00d116w6,,ilala,nndd DSeepcteemmbbeerr 31, 2016 nd September 302016, espectel. 30, 2016, was significantly in excess of its shareholders' equity of approximately $10 billion and $12 billion, at December 31, 2016 and September 30, 2016, respectively. 10.2016, 3M Irnep2o0rt1i6n,g3nMit spp,rriimomaadrrieillkyyruunssienddeaunnf iiinndvduaslutsrsy. prWriihcceeer--eceaaramnpiihnngcgsss lrtaeit,ioo aSappMpprruoosaacdchh.8, bbwuuettiaagllhssiooduu-ssvedsdaradagideissdccioosuucnnoteutdncicaadsschhaffsllohowwf-slsoaawpppaprnraoolaayccshhisfffoororcrcceerrrttanainin reporting units, to determine fair values. Where applicable, 3M used a weighted-average discounted cash flow- analysis for certain i`itshironTcst,orws.inThprowjeeicgthetdincgaswhasflboawssehdaanwmereawneigahegdbeaessmteidmoeatnensiotfltshsHshleas irhootofhcoancddh esmniaa cvoalnuueinsgs.smpions, son divisions, using projected cash flow-s that were weighted based on different sales growth and terminal value assumptions, among other factors. The weighting was based on management's estimates of the likelihood of each scenario occurring. 3M isan negrted test carpe hsman of 3's bins conousiltydbe sold on a sacs basis 3M's focus 3M is an integrated materials enterprise, thus many of 3M's businesses could not easily be sold on a stand-alone basis. 3M's focus on esarch and devlopment has esl portionof 3M valbeing comprised of ermaldevlopedbusinesses that have on research and development has resulted in a portion of 3M's value being comprised of internally developed businesses that have 1 godill associated th then Based othe anual est the fourth guar of 201, no goodwill mime was indicated for no goodwill associated with them. Based on the annual test in the fourth quarter of 2016, no goodwill impairment was indicated for anyofthe reporting units any of the reporting units. cFFhaacactntoogrressswwihnhiiccchohmccpooeuutlddivrreeessuculolttndinnitfifuotnuosreniidmmpcpauaisirrtmmoemenentrt ccprhheaafrreggreeessnciinenccsll,uuaddene,,daafmmlouocnntugatotitohhneesrrsi,,nccfhhaaonnggeeess ciinunrwwroeornrlclddywweiixddceeheaeccnoognneootmmeiiscc.ccooTnnhddeiistteiiooinnsss.k, factors acairhmreapnaddcgiistseccsiuuimssnssueeciddoemiminnepnITettteeimtmsivie111nA,cg,o""neRRdiisitssiskko.nFFsaacAtcaontrodsr.is"cn,u"dsoiotfcofttmthehdieisrsshpddorooveccfeuuem,mreednentnuc.ten.sIIg,natnaahdddeidftiilitusiooctnnt,uq,acctuhihoaannnasggeoeirnfss fi2cno0rtte1rhie,egwnwtehcegeuihgCrirhoeetmnedpdcyaaanvveyexercraachggoaeemncpgcoleosestrttaeotodfefsi.pcsaTipahaitesalslesccreooiusunkllddtfaaacollstfoosrs aiaimnnmyyppaappcioottmteeienmnnttitpiaaalcliriggmtooeoeoddndw.twitleiLllslotniiinmgmg-pplraaieiivsremmudeletna sn.ttAffosrriwnrrs eiedpptiocohrartttieidndnt eggfauwbinionitvetsse,Hiimdmsupparaaicncettgeerddtehvbbeyiyfeiccwrhhsetaadnnqfgguoeearssri tbberetoewfme2ee0n16rep p,wpothohrerettniis CnengovgmeunrnpiieiattnssvysaenncedsdomoddreepttlnceeehrtrmeamdniignntieetessddiathshasacettHsnnseomou. emnstaonfcss impairment existed. Long-lived assets with a definite life are reviewed for impairment whenever events or changes in circumstances {iankdeinc,atSMthawtohulecdaexrpienctgtahmaotucnyt ofpaoarsnsto(ftshselogrovup)emaayssoetstboergrcoovervsblew.ulIdfbre empnuoinr-dc.ash3Msewitllicmopntaimneuenttohmaorneisoartres indicate that the carrying amount of an asset (asset group) may not be recoverable. If future non-cash asset impairment charges are reporting itsand ase taken, 3M would expect reporting units and asset groups in 2017 or that only a portion groups in 2017 for any igang eatso ther indicofamtpoirs of the long-lived assets or goodwill would be impaired. any triggering events or other indicators of impairment. 3M will continue to monitor its Income Tases: Income Taxes: "The extentof 3soperationinvolves dlingwith uncerantd ijudngmiensts nthe application ofcomplex a regulations in The extent of 3M's operations involves dealing with uncertainties and judgments in the application of complex tax regulations in a miofodide. The ina taxes pid are depen pon many factors,incding negotiations with ting shorics in multitude ofjurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in rious jusicions and resolutionofdisputes arising fromfederal, state, and incmations] osadits The Company recognizes various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The Company recognizes pocnil abil adrecords a abiesforatte audi sss the UnitedStates and er as aidictons based on potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on is ciofmwhetaher, and theextent to which, additions tes il be du. The Company followsguidance provided by ASC its estimate of whether, and the extent to which, additional taxes will be due. The Company follows guidance provided by ASC 740, IncomeTaxes,readin uncertain in income xe, 0record these ails rf Not foraddtional information. 740, Income Taxes, regarding uncertainty in income taxes, to record these liabilities (refer to Note 8 for additional information). "The Company dot these reserves igofchhanitng acts and irumstances: however, doe othe complexity ofsme of these The Company adjusts these reserves in light of changing facts and circumstances; however, due to the complexity of some of these certains, the lima resoluon may esl payment hat s mately diffrent rom the Compcaurntsytm'tsof he uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the a aii 1 the Company smaoftax iif proves o bees hn helm sss, an additions hare 0 tax liabilities. If the Company's estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense woukd esl Ipaymoef tnhste aout limatly proves 1b es than the recorded amounts, the eralof he expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the Tsbiles would resin ta benefits beng recognised he prod hn the Company determintehes ile re no hnger liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. NEWACCOUNTING PRONOUNCEMENTS NEW ACCOUNTING PRONOUNCEM ENTS Informationregardingnv accounting pronouncement iincluded in Not 10 the Consolidate Finsncisl Sistrmcnts. Information regarding new- accounting pronouncements is included in Note 1 to the Consolidated Financial Statements. w40 22775500..00004400 TabeofComes Table of Contents cInonMM taaiarnrcachhco220u011t66i,,ntthgheeaFFspAAeScStBs iifssossruuesedhdrAAeS-SbUUesNNeood.p. 22a001166e--n009t9,s,1IImsmppcrroovvleemmceeoennsttss'ntfocEEmploye nmp.loymeeoSShnhaarrteeh-BeBarascselededmPPeaanyytmm,eenhntetAeaccccooouuunnnitiinnnggg,,owwrhhiiiccnhhcommmoiedsifises Jtcfaaeaxnrvetuaesairnaaynnaddc1, cffoo2ou0rrf1nce6tit.itnuugrPreeras,os,spaapesecwcwtsetelifllolvreaasbsheccagllraaiessn-ssnbiiffiaiisnccegaadttJiiopaonnansysuamiinreytnhht1ees, 2tsso0ta1ee6tem,mmpeeelxonncyteoeosfesfscciaansscbhhleuflnldoeoiwwfnsi-g.st,.saTdTmhfhieoCncoCgimonompctahpieansrnyhyeal<eevmaearelybnetaasedd,noothprseeteefalddceAcActSoSeuUdUnstsNiNnooig.n. fc22oo00rm11ie66n--c(00oa99xm3aess of of January 1, 2016. Prospectively beginning January 1, 2016, excess tax benefits/deficiencies have been reflected as income tax eo nelteoxl fpsenosceke ontphteoteaxetrceisres oafnidnrceosmtreicrtsedusltioncgkuinntSv1e8stmiinlglii onhteaxfbsat tutaorto2f0e16t.s f3isMcalypyieera.llRy eexpfteoreNionrtce hfoerharest benefit/expense in the statement of income resulting in a $184 million tax benefit for 2016.3M typically experiences the largest addons dt. volume of stock option exercises and restricted stock unit vestings in the first quarter of its fiscal year. Refer to Note 1 for additional detail. FINANCIAL CONDITION AND LIQUIDITY FINANCIAL CONDITION AND LIQUIDI TY 3`3sMMtaccbooinlnttoiinfnuueeMssTiitssbtruraasnnissniietisioosnnmtooodaealbbaeenittederrs--oarppttoiimnfiizzieecddcccaaaspphiitaflllsoswttrucoacptraubreielaiatnnyd.d itissogaaedltdhiienrngwivletevherrpagrgoeeveatnt 4acammpeietaaassluumrraeerddkppeoatcese.s. TTchheeesstcrieincsghtehtaahnnedd CdCsetooapmbmlpiolpaiytanmyneyyonfttoo.3Miiimnm'csppllblueuedmismineengnnetrsteshsimiscsaorrsdctrhetalateeangn.dyd.dseIItncronvlneosgspttmifnerngenetii,nnca33csaM hpMif'tsloabwblau-esscixianpcpeassebsenilsidttyoso,d,tdosirginveeedtohrcoegrrogawanmniimtichcergprrorooncwvdeztihanhtaircroealenmpiicatanaipnlsasmbithlahieretkyfef.iitrrsssIttavppcecrrsieoisirsmi,oteyenntfoaoribrcnlceooarptphgiiaetanalic rGdgireooipwdlonetyhnmdwlseilnalltn,bbdieenscsshluuaupprdppeillneregemmpreeuennrstcteeehaddarcsbbheyy.accnSoodommupdplrelevcemeemeloenfpontrmtaarcerayynsthea,qccsuqaivupsaiiislttaibitlioionelnsxss.py.e3ni3M ndMitthwuweriielUllsn,aaialtsoneoddccocSonontsmiteinmnu,ueeerscutiocahlriaezrtaeuttrignuonoccacuisashnptatoobcsiaslhihsatyahrr.fcelhIhnooolvwldedresetrormssmet(hnorrtpooeiuunrggaothhrigoannsiacnd aadascivcfciedsaesdncotdoiscnceaaagnppdsiiUt.Sa.lslhaammcarqearukrirkeseteipsttu,si,rocnhhhsaaaavvsneeedshho.iitssSthtoooerruriircccam aelllslyyfobbsreeseccns nasesshuufdafffvi.iacciiileeaFnnbottirlt0iottyhffouuisnnnddthiddneiifvvUriidndnaeeittnneidddoppnSaatyacatmeisen,yngstsumct0ohcseashohsaanornresnehghdotooleildnddesgerrfsscoaaasbnnhddvflssoehhwaas-rreetfreroremdepuponrpcdrheecrafasihteimsoai,nalsas.seawwnstdeeh,lell as funding U.S. acquisitions and other items as needed. For those international earnings considered to be reinvested indefinitely, the Ccoemdpeadnfyorcoupreernattliyonbsas nhoeplU.Saso 3nMewnoiulodnbe0rreipadtte1tseseecrfedasdfopayUUS..S.optereati1onse.pHaoiwaeevetrheifr.thSese nNoetme a tfoornflfoonrdsare Company currently has no plans or intentions to repatriate these funds for U.S. operations. However, if these international funds are ninefeodremdatfioornoopnersataimoinnsgisn cthoensUi.dSe.,rs3Mfo bweourledinbveesrteeqduiirneddeftoniaeclcyrue and pay U.S. taxes to repatriate them. See Note 8 for further information on earnings considered to be reinvested indefinitely. hI3aMM vEe'scopptrriiimmnaaurroyyussshooarrcte-ttseesrmrotlliihqqeuuiiddciiottymymnneeeneddsssalaarreoepmmeeertttmthrarrookueutgg.hh Tacassshhcooonnmhhmaaennrddiaasnnldd UUp..SaS..rccoopmmrmomegrrecaricmpiaalleppatappeserrtiihssessuuCaaonnccmeepssa.n33yMMbe1bl0ehileiaevvveeaess iit wilwill hmpmaraavoxxegiirmcmaoumunmmtwionaofusfo$$iu35nscbbraeiiclalcliseloesonds to the commercial c1uttmnadxiinmguwmiotfha5 outstanding with a paper market. 3M's commercial mbiallioen oumstaanudiinogff3ro9n7 dpyrse maximum maturity of 397 days paper program permits the Company vfiooums pdrtoogfrsianeo.f$3flbcitlilivne uy from date of issuance. Effective July 15,2016, to have a 15, 2016, histhis program was increased to a maximum of $5 billion outstanding from a previous program size of $3 billion. TotaDeb: Total Debt: "The strenofgMhTcapital structure nd significant cooingcash lows provide 3M proven cess o capil markets. The strength of 3M's capital structure and significant ongoing cash flow-s provide 3M proven access to capital markets. Adon, the Company's matuiy profile i ager 0hep ensure enncin ness in sn given sear reasonable in Additionally, the Company's maturity profile is staggered to help ensure refinancing needs in any given year are reasonable in proportion the tol portfolio 3M curly hasan AA ret ing wih sale culo fom Standard & Poor's and bas an A1 proportion to the total portfolio. 3M currently has an AA- credit rating with a stable outlook from Standard & Poor's and has an A1 Credit ringwith table outlook romMoody Investors Servic credit rating with a stable outlook from Moody's Investors Service. "TiTnhhdeeeCCtoormmnpipanaanntyyahhraassoua"nw"weoleflldl-ekkbnntoaonwwdnn ssqeeuaaissotonneesddcissaseurrers"" f((W orKfuSWtIu)rseshhsKeelllefser.ieSsgIntisrtMra)aattyioon2n0s1stt6aa,tteeimmneenctno,tm,fpeeeftfceitcoitnivveweiM Mtahatyyhe1166W,,K22S0011!44,h, wwlhh.iicchh3Mrreegeginsittseetrrseedaransn indeterminate amount of debt and equity securities for future sales. In May 2016, in connection with the WKSI shelf, 3M entered inmteodi4um-atmeernmdendoessndprreosgirsatemd(dSiestib)utiounpa0ghreeagegriegnatge proitnchiepaul armousntaonf e18sbinldlsiaolne, w(hriocmh mwaes aiinec)reoafsetfhreCo ompthaeny's into an amended and restated distribution agreement relating to the future issuance and sale (from time to time) of the Company's previous aggregate principal medium-term notes program previous aggregate principal amount (Series amount upF), up oSup to to $9 billion of he same Sei the aggregate principal amount billion of the same Series. of $18 billion, which was an increase from the "The Companys'asl TprhiemaCriolmy pduatnyo' s Maytotal dd2ee0bb1tt6wwaaanssdS$BS8Se53p3cmmmbiilelliroon20Hh1iig6ghhdeeerrbaatt sDDseeuccseenmcmsbbsee,rrf33r11,i, l22l00y1166ofwwfhhseeetnn bccyoommthppeaSarreeetddet1on0bDDecerce2em0mb1be6errr33e11p,,a22y0m01e15n5,t, wwoiiftthhStthbehlienocrreeasse a`payggregigamrrreeafggriaialtetyeeddppturrieienntccomiippeMaadlliaaauymmm2o-o0utu1nen6trtomaonfnfdommeSeeseddpiudtueummmet-bFteeeerrrbmmr2u0ano1rot6yteed.s2.e0bI2Intn2iM Mswsaiuaytyahn22ac00e1c1s6o,6,u,ppaM3orMintiasrilslsiyseueoeodfdffs5S0e.00t300b7y5mm%itilhlllenioodSnneEFapro3tua0er0gmogmbaireglrelgi2rgoe0ang1ta6Eteuerreppopriaiannygccgmiirpepeangllataatomefmo$por1uinunbtcoiinlolfpifatol5n.7$755- year fixed rate medium-term notes due February 2022 with a coupon rate of 0.375% and 500 million Euro aggregate principal aimoluontaogfg1s5: ceaatrpriinecdiparltesmmouendtoiffum vncoatrs.deude 2r0a3e1mitdhicouponnoaeiesodfue12002%1 wIinthSeptceomubpeorn 2t01e6,of31M2s5ue%dSS665000milion amount of 15-year fixed rate medium-term notes due 2031 with a coupon rate of 1.50%. In September 2016, 3M issued $600 aamagggiggglrrlrieeeogggnaaatttaeeegpgpprrrriieinnngcccaiiitpppeaaallpl raaainmmmcoooiuupunnanttlt aooofmff3o011u0--n-yyyteceoaaarfr five-year fixed rate medium-term notes due 2021 with ffiiveed rrtteemmeeddiiaum eerrmmnnooeess ddouse 2200426 iwitthh ccocuuppoonn fixed rate medium-term notes due 2026 with a coupon araaactttoeeeuooopfffo232n..22r15a52t005e%%%o.,,faAa1lnn.ldd62oS$5f55%t00h0,0e$smm6e25iil00lli1omln6illion Faiisgushgunreaecngecmaesetsedwwiprureimerne-ctiuupennarddlmeearromttthhoeeuemnmetpderoidofuigu3mrm0a-m-yteee(rraSmrmefnrioxoteeetdeFs)p.raprtireoongmgrcaermdliuu((mSsoSfe-eitredirevreemsetFF)n).i.osAtAseussoeddofufienDDe22e0c0c1e4e1mm6,bbwe2e0rir1th3231,1a,,2c220o001u141p6,6o,n2tt0hhr1eea3toteaotnotaafldl3aat.mm1heo2o5u2u%n0nt1t.o6oAffdlldedbeoetbfttethissesrssueieed2d0adpa1s6apatrt aobfotvhee,misedpipurmo-vtiermmatnloyteSs1p1r1ogbraimlo(Se(rieslF), iitnhcelnufsoivrgeigonf deexbcthaisnsgueedrains2a0p1p1l,i2ca0b1l2e, at he 2014, iomfsuea or he 2015 and the 2016 debtEroreferenced above, is approximately $11.1 billion (utilizing the foreign exchange rates applicable at the time of issuance for the Euro a41 22775500..00004411 TabeofCones Table of Contents Nddeoentnoeommi0in,naatteedd de,debt). Information Information with with respect respect to ongfem long-term debt debt sane issuances and and mauris maturities forthe for the periods periods presented presented is is cluded included in in Note 10. 3I1n.7MMa5arrbccihhll22io00n1166f,i, v33eM-Myeaaammr erenendvdoeelddvinanngddcerreessdttiatattecdeiitttssyeexixissptitiniignn$gg2i.2n525M25abirilcllhiloon20f2fii1vv.ee--yTyheeiaarr crrreeevdvoivltviainngggrcccrrneecddinitttcfaiicitlniytyceexxlappipirrdironvigeinisigninsoAAn uugugonudssett2r200w1h19i9ctthooaIa M $3.75 billion five-year revolving credit facility expiring in March 2021. This credit agreement includes a provision under which 3M cmraiytreTqucelstyansuinndrcmrwneofaatusDp to $b1.25 3b1i,ll2i0on16a.tUlnedndeerrst'hedi$s3.c7retiboni)llriinagrindgtahgeeosmlcn,alithteyCuopmp0a.n5y.irbeiquni.reTdhiformeavvnitnag.5 may request an increase of up to $1.25 billion (at lenders' discretion), bringing the total facility up to $5.0 billion. This revolving credit facility is undrawn at December 31, 2016. Under the $3.75 billion credit agreement, the Company is required to maintain its aEgBrIeTeDmAentota)nsttrheesttRiaotioofacoonfstlhdoaneddoffoctaalcEhBIsTcDlAufaotteh aFtounrotcoenwsechuitniv3q.u0a1rte1. rsThehi ccnlidcedltasoeod(l0rdeefitnedexinpetnheseon ll EBITDA to Interest Ratio as of the end of each fiscal quarter at not less than 3.0 to 1. This is calculated (as defined in the affpugannryeddmeeedmdnetddnoeetbfb)ttdaffisoovrtrihtdtehheeornadsst.aimomAeoegfppaceerroriniofosddor..loiAAdtattthDDeecdeeocctoemetmmmablibeEetrreB33dI11T,,fDa22Ac00i11l6f6io,,srt,hhtihisasenrrfaoaitudioodricwwtoaoansnssaeaplcpruSpot2rxi9ovi1xemimaqmtuiaelatrelltloyeynrs44i4tnhte1son0a11ne.ndDDd-eelbdbottooocovetovertenanlssainanftttsedrrdeooistnnteotxtparreeensnsdttsrrbeiiccaottnnthkhaeell payment of dividends. Apart from the committed facilities, an additional $291 million masritseasctiwveirteielss.sued and cuistanding at December 31, 2016. These insiuments guarantees were also issued and outstanding at December 31, 2016. These instruments are tized in in stand-alone are utilized in conection with normal letters of credit and bank connection with normal business activities. Cash, Cash EguivlendsMarketable Secure: Cash, Cash Equivalents and Marketable Securities: AiAlttliDDoeencceewmmabsbeebrre33d11,,b2y2001t16h6,e,C33oMMmpahhnaaddy'$$227.7fobbricililligononsooff csaasshh,i, ccaassdahhndecqpauiipvvapalerlnoetsnvaatannsddlmmSaa3rrk5ke0ettmaaibblllleeiossneecwuaarrsitisees,,dooffbwywhhithiccehhUpnaipptprerodosxSiismmeaasit.ellyyTh$5e22s.e.3:355 bqbbauialllilainaonclncoeewsns taaassreehaeinndlvdveembssayttrektddheetiinnaCbbbloaaemnkskpeaincnnssuytr'rrsueufmsonerHeneeitlgnsdantanbnsdysudbtaosheftihdeeCirarorihimegipsghah-ang-nquydaulaailpitoptyyrroifcxixeiimeddasitiuennblccsyioodm$mi3eae5rsi0seeesmccuauirlnrliditeoienbssy.wAAtahtseDDhUeeenclicdeteemrbdbybeSetrhtr ae33t1U1s,,n2l2io0t0eu11dl5,e,Sdcctaaaastspehhp,s,.roccTxaahissemhhsaetely 1.7 bilon equivalents aanndd m$2a0rk0emtaiblleos,ecruesrpiteicetsivheellyd. bSyptehceifCiocmcopnacneym'sinfogremiagrnkesutabbslideiasreiceusriatnidesbvyethsetUmneitnedtarSsetaptersovtiodtaeldedin Note. approximately $1.7 billion and $200 million, respectively. Specifics concerning marketable securities investments are provided in Note 9. NetDebt (non-GAAP measure) Net Debt (non-GAAP measure): "aTTnhhdee iCCsoomcmoppmaapnnoyyneddneetffisinne4essbnnetetdadneebibmtpsaosrottoatnlatl iddnedeibtct aleteossrsotthhfeeustiotdlaltooyff ccnsadshh,, ccgaaussihhdienqiguimvveasaleunnrtseaaonfdadpmmatarsrkk]eettSaabubllceetssueececuursirtitiiieesrs..e33MMN ecctoondnsesibditedrissennnreetstt debt debt and its components to be an important indicator of liquidity and a guiding measure of capital structure strategy. Net debt is not dbeyfoitnheedurcnodmepranUi.Se.s.gTnhcerlfloyllaocwciengpeadblaeccporuonvtiidnegs pnreitndciepbltessaonfdDemcaeymnboetrbe31,co2m0p1u6te3dndth20s1a.me assimilarly ted eases used defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures used by other companies. The following table provides net debt as of December 31, 2016 and 2015. At Dies31 At December 31 ow(Millions) we 2016 ams 2015 TTLooosutsa:llDDCaebsbht nd cash quialetansd marketable scuiis NetDebt (non-GAAP measure) Less: Cash and cash equivalents and marketable securities Net Debt (non-GAAP measure) somes som $ 11,650 $ 10,797 2608 1928 2,695 1,925 Tees Tum $ 8,955 $ 8,872 cI1na0p22i0t0a11l66,S, unneetttuddreeebbttsrriootsseeesbb.yy S$D88e33bmmieillleiioolnn tw0oe3arncehtt ddieebbttdgbbuahlla0n2aec0eno1orff6c$$9s9s..s00snbicillellisoo,n w((iastsohoftfDhDiesecicenemcmrbebeaesrre33p11,,r220a0116y6),),ofafsi33cMMbypprrhooegSgreerspestseedsomeobndneritt2ss016 capital structure strategy. Debt levels were higher due wTeepraiygmheention1fbbsitlheoU.agSeraengdatepmraintciopaallalymanof repayment of $1 billion aggregate principal amount of modife. mote. Cash and cash cqivalents and to 2016 issuances, with this increase partially offset medium-term notes. Cash and cash equivalents and marketable secures by the September 2016 marketable securities were higher in both the U.S. and internationally. BalanceShee: Balance Sh eet: SNs strong balance sheet nd liquidity provide the Company wit significant Nefoiake adaofngumereous 3M's strong balance sheet and liquidity provide the Company with significant flexibility to take advantage of numerous opportunites gong forward. The Company will cin0 veest ts optfio diovegnrowsth, including conn ein of opportunities going forward. The Company will continue to invest in its operations to drive growth, including continual review- of acpistion opportunites. acquisition opportunities. Various assets nd isis, including cash and short deb, cn ucts significant rom month monthdependingon Various assets and liabilities, including cash and short-term debt, can fluctuate significantly from month to month depending on shorter quid needsWorking copa (Gein a curen setsminus current ales) ole $5.07 billion t December short-term liquidity needs. Working capital (defined as current assets minus current liabilities) totaled $5.507 billion at December $1,206, compared with 3.868 billion at December 31 2015, increaofse 1.639 billion, Curentvet blanc changes 31, 2016, compared with $3.868 billion at December 31, 2015, an increase of $1.639 billion. Current asset balance changes increased woking capa by $740 million, are du ober cas. cash quialets, and marketableseurisbalance. Current increased working capital by $740 million, largely due to higher cash, cash equivalents, and marketable securities balances. Current Habit bance changes increased wokingcapabyS899milli, driven by lowershorten debt blancs. liability balance changes increased working capital by $899 million, driven by lower short-term debt balances. 2 42 22775500..00004422 TabeofComets Table of Contents "oTTthheedCCeofoimmnpepadannuyynusdseeessUSww.eorrgkkeininengracclaalppyiittaaacllmcmeepaetasesudurraeecsscttohhuaatnttplnlaagccpeerieenmmcpiphphalasessiissanaadnddmfafooyccuunssotaonbcececerotmaripnutwreokdrktiihnengsccaaamppeiitaall sasstsiset.ls.TaThhelesseeedmmemeaeasasuusrrueerssesaarree not defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures sbyedndbiyntgahcecocuonmtpsanrieecse.ivTahbelsee mnets)unredsoincnludye stcuorunt(s rGccievaabilqeunaamrsd(demfainnecdstsurquianrgterolsytemtuslelsedmlbtyi4gididvibdyed4bdyivided used by other companies. These measures include accounts receivable turns (defined as quarterly net sales multiplied by 4 divided Cebeonnypddieiinnnndggeirniiinngnvvegeanncotctoosorrsusy.n)).t.sFFFo rroeircgenihnitvveaenbnodlteonerygniuteunrtrs)nnrasniccdnaagllicncuuvollesaantttitoootnnraylpptuuaurrdrppnooSsss1ce(6sds,0,efmnminuaiefndluaofacasucfqtrouuriraintrnhtggeorcflcyooosustmrsttaidhsnegudffeiaficnunteueddriornaafgs2ccc0oeoos1sst,ttooamfnfsudsllatSilpe1ssl5iel9eedsssmbyfcir4eliigdotihvtfiodaarnenddtdhbeyforth quarter of 2015. engineering costs. Freight and engineering cost totaled $160 million for the fourth quarter of 2016, and $159 million for the fourth quarter of 2015. AA`caclcecosouucnnotmtsprraeercceeeidivva0abbllDeeinincecrmreeesassree2dd02$123388semmsililcioonlr, ioorblrauapepippdrrooo1x0xiimhmnaitaset,eillnyycr57ea.%7se%,.,AcccoocmmopupanartreesddrwweicitethhivDDabeelsceeeummmbbseerrwe33r11,,22600.1165,7, aaas iDhiggheheerer DDbeecce3e1mm, bb0ee1rr622,001166 ccsDaooelmmcepsepamacrbroeeemddrptao31r,e77d..2000t33o1aa5Dt eDDIceeneccmseetmbmebobrene2rr0u33111r,5,n22s0a0w1l1ee55s.r.ecIIon4n2vvter0inebtauorttreiDesdesctdodeeemtcchbrrieeesaarissnee3c0ddr,Se$1a213s03e13.6A,mmiculicpllloiiofuonnno,,tmsoorrr.e1aac3ppeppivrraaoobxxDlieeimcmtaueatremtnlbeysewr33..e838r1epp,ee6r2rc.0c6e1en75nt.,ta,tAccDcoocemmocpupeanamrtresebddeprwwa3iyi1ttahh,b2l0e16, IDneccreeamsbederb3y1S, 1200415m.ilInlivoenntcoormyptaurrnesdwwietreh 4D.e2c0eamtbDerec3e1,m2b0e1r33,0,ss20c1h6a, nugpeifrsnobmus4i.n1e3sastaDcteivcietmy bmepro3t1,e2d01b5a.nAccec.ounts payable increased by $104 million compared with December 31, 2015, as changes in business activity impacted balances. "5 43 22775500..00004433 Table of Coney Table of Contents Retin on Invested Capital(rn-GAAPmeasur): Return on Invested Capital (non-GAAP measure): bRRoeettcuuorrnnsooindeIInrnvveeeadssttseeuddbsCCtaiaptpiuitttaeallf((oRROoOtIIhCCe)r) imissenosotutrddeeesffiipnnreeeddpuaurnnedddeernUU.aS.Sc.c.oggreednnaeernracalelllyywicatchecpeU.tpSte,eddGaaAcccAooPuunnaitninndggmpparryiinncociitpplleebsse.. cTTohhneeprasertfosrbrsel,,eRR0OOIIsCCimsslhhooruuyllddnnoott icbtioetenletcddroomnmlselieidsanesgsrueeirndsetsearuuessssuetbddpstbblityyouotofetthhfeleorrrccorootmhmpenpraianmnriieeceassts.uTeTrxhehpseeenpCCsroeeo)pmmapdpraieanvdniyyidnedddeaefcfbiicynnoeerassdvaReRnrOOcaIegICCewaaitssehasaUddtjj.euSudss.ttcGeeaddApnnAieetlPt ii(annncqcdootmmmyeeay((pnlnunestotdtiinebncbeco)ocm.moeemToinpntcaacrullaudbcdiliennyggtonnsoohinnma-silearelyn eciimomnmmetaratostelelrriiniaRgalOllyiInCrteeevirvesissmoetdpelfFuoosarrappfnrrtieiorior-ttpaponeexirrnigiivonoedtdsfesstroeaaurssstddlaeiisxsscpctueasnsFssoseecdd)usdiinenisvNNiodoonettdesbh11,y,aSrSaihivggonenirliafdfigircceaavninnattlvAAuecescctcroeoucdnauttcnioatninpng,igtalRPP(oOelIqiocCuiietwslya,BspBaliasu2si2si.sscd6oepobfefitrPP)c.rreseTenesotentfnatsolat2aie0to,qin1ou-ni6t.y,ThT2hhaee.s 7bCCpeooeemmnrppeaannntyy foberl2ie0v1e3s, RnOdIC22is3mpeeracneinntgffuolrto20i1n4v.eTsthorcsalacsuilt aftoicounseisspornosvhiadreedhoinldtehrebvealluoewcrbelaeti.on. ROIC was 22.6 percent for 2016, 22.7 percent for 2015, and 22.3 percent for 2014. The calculation is provided in the below-table. YourscedDesmbe3r1. Years ended December 31 Qian (Millions) Retro ost Capi (on GAAPmessre) Return on Invested Capital (non-GAAP measure) Net income including non-coarolling ered Net income including non-controlling interest Intret expense aera) (1) Interest expense (after-tax) (1) Adjustednt ncome (Retum) Adjusted net income (Return) me ans an 2016 2015 2014 soosess ams ao $ 5,058 $ 4,841 $ 4,998 1s it 2 143 106 102 Tome Tw fw $ 5,201 $ 4,947 $ 5,100 `AAAvvvceerrrnaagggeoessshhhoaarrrteethheoollmddeerarsn'sdepqluiointtgy e(irnccmlluudddiiinnggGno3)onn-c-onctrocllinngrninelterriess)tn) (g22)) Averageinvested capital Average short-term and long-term debt (3) Average invested capital soonge $ 11,316 7s 11,725 Tomen $ 23,041 sas low $ 12,484 $ 16,000 0266 ons 9,266 6,913 Tam omen $ 21,750 $ 22,913 Retumoninvested capital (hom GAAP mess) Return on invested capital (non-GAAP measure) mew 22.6 % wn 22.7 % man 22.3 % (1) Etive (1) Effective cometa income tax oesed rate used fret for interest eexxppeennssee mew 28.3 % win 29.1% mon 28.9 % ((E22n))dCiClngealuctauotlalitiooennquooiftfyaavvseeroraafggeeeeqquuiittyy incdesnon-conroling (includes non-controlling ees) interest) Ending total JMuanrech3031 March 31 equity as of: SeJDSpueentpceeteemm3m0bbbeeerrr333100 AvDerescegmoboetral3s1 ity Average total equity somes $ 11,495 ins 11,658 176 11,769 13 10,343 Taw $ 11,316 snes $ 13,673 12351 12,851 Has 11,945 Liss 11,468 Taw $ 12,484 snes $ 17,645 173567 17,567 15927 15,927 12363 12,863 T lom $ 16,000 (E3nd)CiCnagallsechuuloaarititoonncoromffaaavnvedrealrgoenagddgeeebbertm debas of: Ending short-term MJaurnceh3031 March 31 and long-term debt as of: SeJDSpueetnpceeteemm3m0bbbeeerrr 333100 AvDeercaegmebsheorr3t1termand long ermdb Average short-term and long-term debt sms ess $ 11,139 $ 6,566 rer Sst 11,749 8,484 R361 1216 12,361 11,216 ng 0m 11,650 10,797 Tums Tea $ 11,725 $ 9,266 sos $ 6,560 9% 6,956 7323 7,323 os 6,811 eon $ 6,913 Cash Fos: Cash Flows: Cosh ows from operating, investing nd anc acts provideidn the aes that ll. Individual amounts nthe Cash flow-s from operating, investing and financing activities are provided in the tables that follow-. Individual amounts in the Consolidated Satment ofCash Flows exclude he ffcts ofapsitionsdieses ad exchange rt impacts on cash and cash Consolidated Statement of Cash Flow-s exclude the effects of acquisitions, divestitures and exchange rate impacts on cash and cash quialents, which ar resented separately nth cashflows. Thus, the amounts resend i he following oping, nesting and equivalents, which are presented separately in the cash flow-s. Thus, the amounts presented in the following operating, investing and nancing activities ble elle changes in ances fom period fo period adjotd or hes fects. financing activities tables reflect changes in balances from period to period adjusted for these effects. 44 22775500..00004444 TabeofComets Table of Contents CashFlows fromOperating Activities: Cash Flows from Operating Activities: Nika Years Ended December 31 (Millions) ame ams " 2016 2015 2014 NNDeeepttriiencncicoamtoimeoininncaclnlududdisinmngogrnntooinntcciooonnnttrloillnigng terest interest CCDCoooemmmppprpeaaacnnniayyytpipopenennsaasinioodsnnacctmoonontertitriibzbuacuttotiinioootnnnissbations Company postretirement contributions CCoommppaannyyppeonssieoinexmpeenntseexpense Company pension expense CISStntooocmccokkpmc-aebbnaayssxeepedd(occsGotormmepetepirnreesnmadstaeitniostonnnedexexpsxpecpneeesnrneossede income xcs) Income taxes (deferred and accrued income taxes) EAxccceosusnatrebceeinvatblferom stockbasedcompensation Excess tax benefits from stock-based compensation IAnAIcvnccevocneuotnnuottornsritsieepsrsaeycaeibvlaeble OtAOhctNheceeorrutnctanssnepeattpyrabolveidebdy operating activities Net cash provided by operating activities somes amis aw $ 5,058 $ 4,841 $ 4,998 Lins Liss Las 1,474 1,435 1,408 a0 Gs) ai) (380) (264) (21 O) (3) (3) (5) mw a 310 202 442 310 w ir rl 49 114 81 Bd 216 20 298 276 280 os a) w 108 (349) 60 -- asy [a -- (154) (167) on) 5 ey (313) (58) (268) 5 3 a 57 3 (113) 1s 5 7s 148 9 75 66 1s im (36) 128 177 Tee som see $ 6,662 $ 6,420 $ 6,626 Ch ows from operating active can fluctute significantly rom period 0 period, a pension nding decisions, ming Cash flow-s from operating activities can fluctuate significantly from period to period, as pension funding decisions, tax timing ilrencesnd thr em can significantly impact ash ows. differences and other items can significantly impact cash flow-s. Ii1n0n.c22r00e1a16s6,e, pccraaissmhharfllioolwyw-ssdopperroovviidodeewddebbryyyooepaperer-rsaotntii-nnyggeaaarcctciavtsithiseaseiinsnccarreneaadsseeiddg$$h22442n2emmt iilillinoocnoccmooemmTpphaaerrseeedd totoetnthhseewsseaarmmeoepppaeerrriitoolddylaaossfttfsyyeeeta,br,ywwHiiitthghhthehiriss CciCnaoocpmmrteppalasanenbyyyprpSpie1emnn0ass8riiioomlnynidcolonunteoittrboiibunltuo2itwi0oon1ensr,s..yceTToahhmree-pcoaconorm-mebydiebanitrnaoatcwtaiiosoorhnnkotioanfxfgesacsceacsaponcusdunn]htssingrrheeeecceresiinvveasabtblileone,fc,oii4nmnvv6eee.nnltTtooihrreioieseness aaintneddm20cas1co5wcu.oenurtAendstdpsiatppritaaioyyanaalalbbyllleeodfiiifnnscseertrcesbaosyseenhddiogwwnhooerwrrkkoiiknniggng cccpaaapippiiitottaaalnll cbcahhynaa$dnn1ggp0ee8osssiimstsrippltlrrioorovvaniimddinneetdd20cae1aor6nll,irecbreoaiimntiptthoaheerne"da"FFntiiodnnawaencxocipriaeaklnlisnCCegoonicnpdadirpitotiiitvoaoilnndinaaencnddrdeiLaLnisiNqequosuitdiodieftiyt$1y"14",6sswemeiccttithililooainond.nd.iIIitnnniffoo2onr0rsm1m5aadt.tiiiAoonsndcdcciootuinonscnecarnlnetidnhnigsedcdeupefsrfsieiicnnoeeendddionbbngeewnRneofireikt isngsof pension and postretirement contributions and expense is provided in Note 11, with additional discussion in the preceding Results of Oipsertaoensgaseictnioni.n2O0t1h6erniestcussheed ipnrNeoctedein2)g, uasbceosrhedifvesltietdurucectctiiosntyinicraelsoewnsdfsromporpoecreaetdisnfgaromtssale,of pbuasrilnyedsuscwi0lin Operations section. Other-net in the preceding table reflects a reduction in cash flow-s from operating activities, partially due to divestiture gains in 2016 (discussed in Note Cionnvedsittiinogncnid sLi,quidniotty"opsrecatiinong actin investing activities, not operating activities. Additions 2), as cash Additional discusion divestiture discussion on working captl change is provided cle in the "Financia activity is presented as proceeds from sale of businesses within on working capital changes is provided earlier in the "Financial Condition and Liquidity" section. 1I1n00.522300161535,,mcciaalsslhhioffnlloiownw-shsippgrrhooevvriidcdeaedsdhbbiyynoopcpeoermraeatttiinneggasacchtivteitisecsoddmeepscaerresiasnsegedd2S0$21205066m0im2li0ll1loi4o,nn pcclooummspplaaorrweeeddnt0oet2200i11n44c,.omOOepp,eerwraahttiiincnghg wccaaassshhpffllaoowrw-assdldeecocrfrefesaaessteebddy.dduve tloioonwec$re3rer6a3csyeaemdrar-wi-looolnirno-k-nyyicneinaagrrhcwwiagoophrriekkrliinncbgagyscchSaa4ippn6icitaomllimlrrleeeiqqtouuaniixrreieensmm2wee0nnh1tt5ess,n.TTcchohemeocpcoomamrmbinipbgnina0a2at0tnii1rcoo5rnneetoosofsfd2esa0scc1oco4ofu,u$tpn3sltus0srreelmoccieweliievlvraoabnbnlleeeit,niimn2ncev0one1mnt,teoo,wrriwietshshaicatnhnhddwasacaeccscaoopruua-nrnttttsi-sayplpl5ayaFyyoaabfbfllseeet by iinmcprreoavseedmewnotrkreinlagtecdap10itallowbeyr$o4r6gmiielliovnoliunm2e0g1r5o, wctohmpared to increases of $306 million in 2014, with the year-on-year improvement related to lower organic volume growth. is 45 22775500..00004455 TabeofComets Table of Contents Cash Flows from Investing Activities: Cash Flows from Investing Activities: Nika Years ended December 31 (Millions) ame ams ns 2016 2015 2014 PrPPoucurceheradscessfhroofofapmprsrosoappeeeerrtotsyyf,,PpplPlaaAnnt,taaandnddceptqhiuepipmmaesensnettts((PPPP&LEE)) PuAAPrrcccoqhcquaeiuessdieitsisosfnaroisn,mdntnpeeisratoooloecfnfeoccesfaadPsss,hhPf&acrcoEuqmmuraineraedddrotiheer anssdetss l ofmarketable Purchases and proceeds from maturities Procsedrsfronimdsailnetvoesftbmeeunstsi,nneests securities and investments, net and sale of marketable NOPOetrttohhceceaerrseiitdnnsvvueefsrssottdimininggnsaaatnlceettisovitiftcibinesusgsianetssees s Net cash used in investing activities soaamsqsns (1,420) $ FY 5 58 a as (16) (1,461) $ 33 (2,914) a6) 1300 (163) 12 15 142 @ 02 (4) Sy Sas (1,403) $ 1,300 123 102 (2,817) $ aay (1,493) Tas135 on(94) 5754 2=102 6 (596) IIinnnvcsrecessatmmsieennngttssmaiinnnuppfrrsoocppueerrrtiyyn,gpplflaainncttiaeannndcdcyq.equuCiiopppmranelnttsecpneanasdbileengggrwrooawwstthhsaccSrr1oo2ss0ssbimmlalaninoyyn ddniiv2err0sse16mma,arrkk5e1et4t6ss1,,bheilellpipoinniginto2m0me15ee,ettpnprdroodd$uu1cc4tt9dd3eemmbaialnnldidonsannindd b2i2nu00c1s14ri4.en.aesTsTisnhheeges Companyexpects2017 capital spendin obeapprosimatel $1.3 billion 101.8 bilon 4s 3M manufacturing efficiency. Capital spending was $1.420 billion in 2016, $1.461 billion in 2015, Company expects 2017 capital spending to be approximately $1.3 billion to $1.5 billion as 3M coins 0invest and $1.493 billion continues to invest nits in in its businesses. SMinsest i ensendmaw intensanceprograms,which perso cost reduction cycle time, mating nd enening arent 3M invests in renewable and maintenance programs, which pertains to cost reduction, cycle time, maintaining and renewing current Capac, limiting pollution, and compliance. Coss estotomninsnce, ordinary epi, and crs thr loms rc capacity, eliminating pollution, and compliance. Costs related to maintenance, ordinary repairs, and certain other items are expensed 3M sso nests in gro, which ad 0 capacity. driven by ew products both through expansion ofcurt files expensed. 3M also invests in growth, which adds to capacity, driven by new-products, both through expansion of current facilities ani nw ite, los esearch iit. Finally, SH lo insitn he nities, sich as infomation technology(,IT)snd and new- facilities, plus research facilities. Finally, 3M also invests in other initiatives, such as information technology (IT) and compra laboratory cles. corporate laboratory facilities. I1fna0c22i00l11e6,;, iinsnvpveeecssittfmmiceeannlttlssy iirnneccnllueuwddaeelddpmnreeowjwe-csstiestessdaaonnedd bbtuuitillhddeiinn3ggMss,,CiinnnsadtidiotiinonnSt.ttooPaccoolnn,ttiiMnniuunenededseeoxxtpap.aannsOsiifooennraannvddesssutsumtaesinntmisecsnrtoomosffseccguucnrorrgetrneatpsalnniddcsneeww facilities; specifically renewal proj iimnpcllemuedntgartioon,ofpranodEuRcPtsiy.teanmd included growth, productivity, and ects done at the 3M Center in St. Paul, Minnesota. ocnapacwitoyr.ldawsiwdeeblasass.1 ysmsand frsictue, capacity, as well as IT systems and infrastructure, particulary theongoingmul carphased Other investments across geographies particularly the ongoing multi-year phased implementation of an ERP system on a worldwide basis. 10.201, investments included new ses and bildings,invesiments i T, continued expansionofcurrent lis snd ew In 2015, investments included new- sites and buildings, investments in IT, continued expansion of current facilities and new cilities, pos the sustainmentof existing ais, in dion to cle nitive. Speiic investmentisn 2015 inchaende facilities, plus the sustainment of existing facilities, in addition to other initiatives. Specific investments in 2015 included a new sae, four story 400.00 sue foo research facility t Centr St. Pou, Mincsots. In addin, 3M continued ts state-of-the-art, four story, 400,000 square foot research facility at 3M Center in St. Paul, Minnesota. In addition, 3M continued its investments it systems nd ifrsiucture, pricy theongoing molar phased implementationofan ERPsystem. investments it IT systems and infrastructure, particularly the ongoing multi-year phased implementation of an ERP system. cI1no0n.2v2e00r114t4,i,ngii.nnvvaeenssdttmmdeennsttsstiirnnggirrboowwutathhnidaaoocctrrnhooess,sssgroegoorgrawappbnhiiiesssiitnnsccll.uuddeeOddthpperrrooddnuuscccttsiiootnncnueqtiuspimpiemnnceltnu,td,eneIeTwws- ysssiettesesmaasnnddanbbduuiifllddaiinnsggsst,, eccaarpp,aociityiynciinlnvdveiessnttgmmoeennnttss,, converting, and distribution, and other growth initiatives. Other investments include IT systems and othnegoUinnitgemd oSalteasrtoprheasneedainmdpluepmgernatdaetiaobnooraftaonryEfRlPiseysstcanndonadmwinoirsltrwaitdievebbausisl.diIngsa.ddin, ongoing multi-year phased implementation of an ERP system on a worldwide basis. In addition, 3M began mll-yca program infrastructure, including an began a multi-year program in in the United States to renew- and upgrade laboratory facilities and administrative buildings. PPfrrroooccmeeteehddessnfforoormmmsalasalpleeerooifofdPPiPPc&Asa,Eleaasnnoddf oPhthIeeEr,sases2te0st1s4ttooittnaaclleledudd$Se55d88pmrmioilcllleiiooenndoiinnf22S00111166,4, Sm$33i33lmmoiillllliiootnn diinn 22o00t115h5,e, aasnnlddesS$o11f33r55 mlmiillleliioosnneiinnn22d00114n4,.nAAppaarrtt production sipmen from the normal periodic production equipment. sales of PP&E, 2014 included proceeds of$114 million related to the sales of real estate and non- RiRenefvfeeerrstttoomeNNnoottteean22dffosorriiinftfooirrmmalattaiioonnncooenn,asacanquduiisfsiittoioonnmssaeanndddoidcmivseeisutirmtuearsyes.s.hTTohheediCCvooemmsppcaeanrntyyaiiinss asbccutstiiivvneeellysyeccsoo.nnsPsiriddoeecrreiienndggsaafddrddoiomtinoanslealoaafgcbuquiussisiiittniooennsss,s, in 1w2ini20vt10he61isntremetslehatneteetIsddnatd0ontudtshhsseetlrddabitiaevvsgeeiisscttniietatulsrlrieeasonoefcgfemthshe,eenaatanssdssaeeftdrtssomohoffettihhcmeeoemppptrrloeeessttsismiuuorreniizozmeefddayppheooallldyysiouuvrredeesitttvhhieaatsnnuteercefefoorofataamhimneaabddLuhhisebeisrsniaievvrseeysssbesubb.uussPsiiirnnnoeeecsssesseid((fstoofrirmmoemetrrleysaSklKeannfoooewtfwybnnuaaasnsidPnPelGosryslypefsoioaiianncm)s) within the Industrial business segment and the completion of the divestiture of the Library business within the cbuastihnoedsesbsatgerytthIonlaogdyin,ttheifoucrbtuhseqineunss(asoFflre2ci0r1to6n,inc3sMgansdodEntehregys). tofs protective Fm busines business segment. In addition, in the fourth quarter of 2016, 3M sold the assets of its protective films business ndusil) ad ts Safety and Graphics (Industrial) and its cathode battery technology out-licensing business (Electronics and Energy). "46 22775500..00004466 TabeofComets Table of Contents aPPurrucphrriamsaecrsiolohfyfmmtaaarisrkkteeetalbsleesse0eccuaruisrtitieieesbsaaacnnkddediinnvsveesectusmrteemnste,snaactnndsdepprrrocoetdedsosiffrrdfooemmpiomascatitiuumarrieetidtseespaoaennsdidstsssa,llecooofmfmmmearrackrkieaettlaabbpllaeepsesree,ccunurrditeieosstnhanrddsinnevecesustm,tensts are primarily attributable to asset-backed securities, certificates of deposit/time deposits, commercial paper, and other securities, `fWihnidchhserAcuglusat 2s0aSsaaviqalbuflei-ifsoreot-fsColdaep.nitNsaltSparfotcyeesdnsdfMreommbmraatnuar.itiRes esdftosaeNloetroefmarokretmaobrleedestauilsraebouitn M2'0s13dwievrressieodd1 help which are classified as available-for-sale. Net proceeds from maturities and sale of marketable securities in 2015 were used to help fmuanrdketthaebAleusgeucsutri2t0i1es5 paocrtqfuoilsiiot.ionPsuocfhCaaspeiotsafl iSnasfcesttymaenndtsMinecmlbudraenaad.diRteiofensr]tosNiovtoer9 bfoer nmtoreindseutraainlcsea,bopults3oMs'ts methodand diversified sity marketable securities portfolio. Purchases of investments include additional survivor benefit insurance, plus cost method and equity investments. Cash Flowsfrom Financing Activ: Cash Flows from Financing Activities: Vrooricsued Decmbe3r1. Years ended December 31 (Millions) CCRhehapanangygemeeinnstsohoforrdt-ettebrem(maddteeubriti--tiensneertt eths9t0 daeys) Repayment of debt (maturities greater than 90 days) PrToocleecdassfhrcohmandgeebi(nmdaetubreities rete thn 90days) Proceeds from debt (maturities greater than 90 days) Total cash change in debt [PreoSds from i--ss--uancoefs Purchases of treasury stock trea sury stock pursuan t 0 sok option and Proceeds from issuances of treasury Divbiednenedspplaends 0stockholders benefit plans stock pursuant to stock option and PuDEErxxiccvcheiedassesssneatdassxofpbbaeeoinndeneltfcioittosssmtfforricookmnmhsgotsltodonceckrtks-brbaeassteedd ccoommppenenssaattiioonn NOPOetutthhreccehrarasshe unnoeesfttdnoinnconntarmoillninggacitnitveiretsets Net cash used in financing activities ame ams a 2016 2015 2014 S ans ws $ (797) $ 860 $ 2) iy (992) (800) YY a2 2,832 3,422 Ses sw $ 1,043 $ 3,482 $ ars Gam) (3,753) (5,238) 227 aes) (1,625) 2008 2,608 Ton 1,010 Go) (5,652) so804 ae (2,678) =-- ---- a(42) Tee $ (4,626) as635 sen (2,561) 154154 12=0(120) T_Gem $ (3,648) ous968 @216 (2,216) 167167 an) (861) 19(19) TG $ (6,603) ""TTToootttaaallldddeeebbbttt wwwaaasssS$511311.r.7b sbeiltlioi onfaaotDDael eccpeeimmtbabealerro33t11a,,l2200c16ap6,i,tSa$l1100id.38ebfbiiillnlliieoodnn aaatt dDDeeetcepcmusbeierm33t11b,,y22e00)a11r5,,aasnn-dde$6n6.d.88b2ib0li1llli,ioonn4a5attpDDeceeemarbteyrr3a3e11,r, 22nd00112440t. 15, aTnodtal35depbrtswenats a5t3speearrceenntdo2f01to4t.al capital (total capital is defined as debt plus equity) at year-end 2016, 48 percent at year-end 2015, and 35 percent at year-end 2014. 2016 Deb devi: 2016 Debt Activity: 2TT01oo6taaldddeeebbbttsaasttuDDaeinccecmsebareprp33e11,v,i22m00a11t66eliinynccSrr1ee1aasseeidd S$l98o5533ammtiisllllisoonn dwwahtheeennexcccoohmmipnpagarreeedadet1os0y)yeenaardr--enSndsde22m00i115b5,e,rwwi2itt0hh16thhdeeeibinntccrrseeaasseetpprriiammoaarfrinisllpyypcddrouoseeietfmooaiM Mscaalyyy 2016 debt issuances (approximately $1.1 billion at issue date exchange rates) and September 2016 debt issuances of approximately d1.u7c Soiplelmob.esTh2i0s1n6csrkesswwiatsh phaertinatllyioffmicobfpystpheayempmncetysmteanndtobo1rowbiinlgos bay rneemastopnrainlcibpseiadoaiuct,ofprmiemdairuy-Jfarpamn naontdes $1.75 billion. This increase was partially offset by the repayment of $1 billion aggregate principal amount of medium-term notes edKKxuoocerrheeSaaane((pgaatepeprmpparrtbooeexxricimmh2aa0atn1teeg6lleyyasl0$ol0.n.og88 with the net impact of repayments and borrowings mmipllcotn ddeecbeealsne)cews.hic is elcid in "Change in million decrease), which is reflected in "Change in shorrmt deb by international short-term debt net in te subsidiaries, net" in the preceding abe. primarily Japan preceding table. Frei and Foreign exchange rate changes also impact debt balances. yPPerraoorcceieesedssdffrtoomem dmdeetbdit uffoomrr-t22e001r16m6 pnprroiitmmasarridilulyyerrFeeellbaartetudeartfyoo tt2hh0ee22M M,aanyyd22005110660ismsisaullannonceeoEoufrfSo5s0000agmmaiiltllleiioonn EEpuurrrioonsscaiapggarlgeragemagoatuteentpprroiinfncc1iip5pa-eyleaaammrooiuuenntdt oorfft5e.S7.575-- year fixed rate medium-term notes due February 2022, and 500 million Euros aggregate principal amount of 15-year fixed rate fmieeddiant-etmremdinuotmestdeemn2o0t3sldoen2g0i21t,hSt6h5eS0emptielmobearg2a0r1egast prnincipeoalfSas6mo0u0ntmiolfli0on-ygearrefxgdprraitnecimpael dmioutmofnfoetesdocsar medium-term notes due 2031 along with the September 2016 issuances of $600 million aggregate principal amount of five-year fixed rate 2t02i6,)and 2026, and $500 milo medium-term $500 million aregat notes due aggregate principal amountof30-yard ate medium-termnotesdu 2046 (eer oNote 2021, $650 million aggregate principal amount of 10-year fixed rate medium-term principal amount of 30-year fixed rate medium-term notes due 2046, refer to Note 10formre notes due 10 for more detail). 2015and201 Det esi: 2015 and 2014 Debt Activity: JIInanpbbaoontthhan22d00K11o55r4aennddi22n00121404,1,5.thheTecnhc2ha0an1n5gg,ee rinepssahhyoomrrett--nttteerromfmdddeetbbtt ppprrriimmiaamrriaillryy rerelelalatiteeeddd1tbo0adbenabnktkabbsoosrrurromowewidinn(ggassnbdbyypiianndtteeorrnfma)ttiaioonnapslrtssuuobbfsstiidhdieaireCisea,sp,app]rriimmSaaarfrieilltyyy icJaaclpqipauoninsiiatEniooudnrKo((sorerrafepeaerpirotnfoox2NNei0omo1ratt5et.e22Iln))y. 2II1n0n1.22500,11bri4,el,prlirapeoynepmacyyeomnmmeteinonntftogdofevfbaddtleepebbr)ti.mpprrraiiermmipalaayrryiirlmleyyelnanittneccodfldutdeoheesdsehrrbertepeaa-psyvsamuemyaenrmetdo6eof(fnamantidEllupEiuraootindobboBoonnfidtd)siiahnnsPlJpuoayluyrtn22od00cf11to44hmettmooCittaaatlpliieinntdgaglc1r1Se.00ad22fie55tty bfaiclliiloitny agement ceed ito Euros (approximately in$1.4Doceber2012, ad repaymentof billion carrying value), repayment ther internation deb. of the three-year 66 million British Pound committed credit facility agreement entered into in December 2012, and repayment of other international debt. w47 22775500..00004477 TabeofComets Table of Contents 10.201, proceeds fom debt primarily elated1 he ia 2015 sunof 650 milo Euros agregar principal ameuntof iv In 2015, proceeds from debt primarily related to the May 2015 issuance of 650 million Euros aggregate principal amount of fiveyear lating rate medium-cm notedos 2020, 600 milo Eos agarsate principal amoofuignht cta ied rte meds erm year floating rate medium-term notes due 2020, 600 million Euros aggregate principal amount of eight-year fixed rate medium-term ote dc2023, and $0 millon Euros agrogat principal amount ofFilcaer fined ate medium-termnote de 2030, which in notes due 2023, and 500 million Euros aggregate principal amount of fifteen-year fixed rate medium-term notes due 2030, which in he sggrgat ial spprosimatly S19 illon at ive dat xchange ate. In addition, August 2015 issncos included 150 the aggregate total approximately $1.9 billion at issue date exchange rates. In addition, August 2015 issuances included $450 millon aggregate principal amount of tr. ied te dumm noduee20s18, S300 million agregste principal mount million aggregate principal amount of three-year fixed rate medium-term notes due 2018, $500 million aggregate principal amount Of five-year fixedra medium nosdeus 2020, and $350 millon greg pencil amounotf 10-year ied rae min of five-year fixed rate medium-term notes due 2020, and $550 million aggregate principal amount of 10-year fixed rate mediumrm mots de 2025, wich agaregatetotal S15billon. In2014,proceeds from debt primaryrelated otheJune201 snes term notes due 2025, which in aggregate total $1.5 billion. In 2014, proceeds from debt primarily related to the June 2014 issuances S625 million arega principal amountoffie-yca ised rt diame tes doe 2019 nd S325 million regs of $625 million aggregate principal amount of five-year fixed rate medium-term notes due 2019 and $325 million aggregate principal amountof hiya ised rate mdaer nes du 204, wll th November2014 ssancofe$0s0 millon principal amount of thirty-year fixed rate medium-term notes due 2044, as well as the November 2014 issuances of 500 million Euros pincipl amoofuonutr loting rae medium nots die 2015 and 750 million Euros pincipl amount of 12-vc56 Euros principal amount of four-year floating rate medium-term notes due 2018 and 750 million Euros principal amount of 12-year fixed ate medium-termnotsdue 202. adiion, proceeds fom debt for 2014s include bak borowingbsy tematic fixed rate medium-term notes due 2026. In addition, proceeds from debt for 2014 also include bank borrowings by international `subsidies. Refetro Nok 10 for additional discusionofeb. subsidiaries. Refer to Note 10 for additional discussion of debt. RepurocfChomamosnSetosck Repurchases of Common Stock: cRRoeerpppuuorrrcchahatasspeeussroopfofscceoo.mmmmInooFnnebssrttouocackrkyarr2ee0m1m,aadd3ee t0Mo ssuBupoppaeorrrdtottfhheeDiCCroeomcmptaopnraysn'sya'hsossrotoicczkke-dbbaatssheeeddreempalprolsoyhyaceseomcopofmuenppse0nastSai1tio0obnniplpllliaaonnnssoaafndd38fososrcooutbtheearrnding dcccootomr.mpmmoIroonannt2e0ss1pto6ou,ccrkkpt,ohswweehhsCi.ioccIhhmnprrFaeeepnpbllyarauccpeaeudrdyrttchh2hee0aC1sC6eood,mm3$pM 5pa.an7'ns5yyB'bssiolFaFlreeidbobnrrouuofaarDrfyytisr22ev0c01tno14rsrrseeaoppucuuktrhr,ccohhrcaaiozssmeeedpppatrrrhooeeggdrrraae0nmp.u.prrTcTchhhihaisssaesaaueuotstfhhuooirnprii2zztoa0att1$ii5o1onn0anhhbdaaislsl0nino1oon4ppoorrffe-3m-ceM ossitr'absebloliitusshthhseetdadSn3eed.nninddg ibbdiiallitlleiio.nonnInfooof2fSi01it1t5ss6no,biwtvhlnleissoCtnooo,ccmkkFpiioannrnceymaaopccrhhueryaciehnraafrs.oerTTdmhha$eet3i.CCo7noo5mmbfppialalnineoyy1nseoxxhpfpeeietccsattsboslwTfeulnl-tlsy-ityleoeecsdaksr,22"c00o1s1m77rpggarrProeosdusstrsoshhcpaaurrehrcorrahfeeappssuureresscthhisaynass2eeS0sse1cww5uirillaillntbbideoes2"i0n1itn4thhePeoafrraatmnn1gog.ereelooteffhma5$n223...5$55The Company docs nt wilize dean inst inked 0 he billion to $4.5 billion. For more information, refer to the table Company's ick. titled "Issuer Purchases of Equity Securities" in Part II, Item 5. The Company does not utilize derivative instruments linked to the Company's stock. Dividends Padto Shareholders: Dividends Paid to Shareholders: C2Co.ad2sih1v6diibvidildlneindondss(5pe3a.di4d2pt0oosrshhasarhreaehhroo)llddieenrr2ss0t1to4.teale3ddM2$h2.a.6s67e78ibidildlliioovnid((e$5n44d..4s4s44ipnpeceerssh1ha9a1rr6e).) iIinn 22F00e1b16r6,u,a$5r22y..525601117bb,iill3lliio'onns(($5B44o..1n100dpoprefrsDshihirarerece)t)oriinsn 22de00c11l55a,,rasenddda fia$frin2rsds.t2t-qm1qua6uarabrkritetleeldirot22nh00(11$7S73.ddh4i2ivcivpdoeeimrnsdsdchoetoafrinfev$)de1i.n1ySe712a7505rp1po4refd.r3sisM vhhioadrheeea,,nsadnpaiiiinndncccrdrreeeiavaassisedeese.oonfdf66s perc. This is equivalent fo a anual dividoefnd $4.70prshare since 1916. In February 2017, 3M's Board of Directors declared a percent. This is equivalent to an annual dividend of $4.70 per share and marked the 59th consecutive year of dividend increases. Purocf Nhoncaomsilleng erst: Purchase ofNoncontrolling Interest: OcOonnnsSSoelepiptdteaemtmebbdeerSru11m,2i20t01o14m4,,o333MMMppLuuirrmccihhtaaessdeeddsu((bvvsiiiaadiSSauurmmyiifttooomm9roo0 33iMMlLoiLmiJmiiattepedad)n)eSSsuuemmYiiettonommooUpEFoelnecctctrroiimcepIIlnneddtuuissottnrroeiesfs,,tLhLiit'sdsr.'sa2s25s5cppteeorrncc,eenn3ttMientoeewrenssetdiinn13M0M 0's's CcprooeennrescsoenolnltiitdodoaafftteSeSdduusmSmutiitmoatmittooom3em3oMmoMof3eMLcLniaimmsLtihtiitmeelddio.t.wesdTT.hhsiiuIssnbwwsaaiaddssiadrereyofllnfeolcrtieen9d0Apaabrsiislalli2o"0P"n1Pu4uJr,raccphha3aanssMeeesopoefufYrnnceoohnnna.ccsUooendnpitotrronhallclieonimmgnspininlinetnfetirgroeennsstt"eofinnthttcihsheeotrfTainnnnaastcaniccrntiiingoongntsl,reseec3lsctMttiinooonngwooofnfettdhhee100 consolidated statement of cash flow-s. In addition, in April 2014, 3M purchased the remaining noncontrolling interest in a Fcionnasncoilnigdatseedcti3oMn osfwbshiedicaorynsfoolaidnatemd nsiatte]mentaomofucnats,hfwlhoiwcsh. was hoclassified a Purchaseof oncontling ireti consolidated 3M subsidiary for an immaterial amount, which was also classified as a "Purchase of noncontrolling interest" in the the financing section of the consolidated statement of cash flow-s. thrcash lows fomfinancing iis may includ various tert, schas changes n cash ocrdrftbalances,and Other cash flow-s from financing activities may include various other items, such as changes in cash overdraft balances, and principal paymentsfo capil eases. principal payments for capital leases. FreeCash Flow non-GAAP measure): Free Cash Flow (non-GAAP measure): Im1n daedidoiatino,nsof, potuoennrtreftoccmeaaassnhhscpperrooavvdiiddeeuddsbbsyythoopspeeerraamttiiennggsaascctteiivvisittieaess,, 3i3nMdicbbaeetlliieoivneeossftffrhreeeescctaassehhnffltoowof- taahnned ffCrcoeemcpcaaassnhhyffllaoonwwd- ccsooannvvleertrssyiioonn0garreeenuuseseftuelcash. F"mFrTreheeeaersceucatarrsesehhs,offltflohowpewe-yraafsnnohddromufflraedenenccoecatasasbhnhedffcluloosownews-sicctdoohenemrvseeeednrmisiooesnanusauabrrseeeisnntoaoetst addfneerffiiiinnnndeecdidcouaumntneidodoencerraoUUsf.h.tSSh.f.elagsocetrnnweernrdlgaaltlthlyyaopcafrcstechepeeapprtCeeedoddmaaicncpccaosouncnuyctnoiatnrinngddgnpicrtpseirnianWcbiciitpilpilhtleyeUss.t(So(.GGgAGAenAAAePArPa))Pt.esncadsh. Therefore, they should ompaeyrtmiontgbeeicvoimepssebsl may not be comparable not be considered a substitute for income or cash flow- opusrcmhofatpersodpeemrse.sspelasntussddcbqyiopemrenctom(pwahniicchs.i to similarly titled measures used by other companies. 33cdlMaMatsasddiepeffrfiieiennpdeeasvsreaffdrnecieniccnaaavcsechsotrflildonaowgn-sccaetswinnveieitttyh)caUass1.hSh.spphrGrooouAvvliAidddnPeeoddatnbbbdyye inferthatthe anv fr cash flow operating activities less purchases of amount property, available plant and equipment (which is classified as an investing activity). It should not be inferred that the entire free cash flow- amount is available a48 22775500..00004488 ible of Content Table of Contents fofBorroddniisscefritentodinoanaarerycyseepxxoppefenfndridetietuurcreaesss..hf33lMMowddeeaffniindneefssrfrereeeecaccsaahsshhflfoflwloowcw-occnoovnenvrveserirsosiinofononraa2ss0ff1re6eee,cca2as0s1hh5fllaoownwd- dd2ii0vv1ii4ddeedd by by ntnet income income attbotable attributable to to 3M. 3M. Below- find a recap of free cash flow- and free cash flow- conversion for 2016, 2015 and 2014. NYieaersnended December 31 Years ended December 31 (Millions) NeMMatajjcoorar sGGhAApNArPoPvCiCadsaehhdbFFllyooowmpCCearatateetggoiornriigeeassciiies NNNNeeeetttt ccccaaaasssshhhh uuupsssroeeedvddiidiinnnedifinnibvvnyeaesnsotctiipinnnegggraaaatcccitnttiiigvvviiiatttiicieetessisvities Net cash used in financing activities ame2016 ang2015 Sees 6,662 $ a0) (1,403) 626) (4,626) ems 6,420 $ asin) (2,817) ois) (3,648) ns2014 Gan 6,626 596) (596) 603) (6,603) NeFFrrteeeceaCsaCsahhhprFFolaovwmid((neeodnnb-yGGoAApAAePrPammtieeanrsguaerce))iiies NPeut crashcpohrfopavriodspeedertbysy.olpearnatianngdaxctpiiviptmieesnt (PPE) Fr`PFNerueetereccihcanaacssseohhsmffeolloofawwptrroipbeurttayb,lpl1a0n3tMa.nd equipment (PP&E) Freocashlowcomersion Net income attributable to Free cash flow- conversion 3M See ses Gas 6,662 $ 1.420) 161 L493) (1,420) Sse TT ww Tsim 5,242 $ Sse 5 asm Ss avs 5,050 $ 104% 103% 104% 104 % 6,420 $ (1,461) 4,959 $ 4,833 $ 103 % 6,626 (1,493) 5,133 4,956 104 % OfOfff-BBaallaanncceeSShheeeett AArrrraannggeemmeennttssaanndd CCoonnttrraaccttuuaallOOblbiliggaattiioonnss:: AaArssroaofnfgDDeemececneetmmsbbeRererf33e11r,,2o20t011h66,e, ttshheeetiCCooonmmpepanantnyyehdha"asWsnanorotrtaunlttiiliizzeeesddGussappreecaciniaatllepepusur"rppioonsseeNeoenttneittiti4ieefssottroo dffaaiccsiiclluiisttaasttieeonooffoFtf-a-bbcaacllaranuncceesdssphhreeoeedttuffciintnaawnnaccirinnaggn.ty Tibi nd arrangements. liabilities and guarantees. Refer to the guarantees. section entitled "Warranties/Guarantees" in Note 14 for discussion of accrued product warranty IIinnndaaeddmddniiittifioyonnittoothggueuaarmraaannjtoteersec,su,s33tM Mo,m,eiirnnstthhoeer nnsouporpmlmaielrccsooouurrrssesopofefcbbiuusfsiinnreiesssksss,,,ppseeirrciihooaddiiccallallay ecsantteeorrrss njinutooryaaggorrreeepemmreoenpntetssrytthhdaaatrmreeaqqguueiirerstitshhieengCCooomumtppaoafnnyyhettoouse oioinfnfdt33elMmlMcntppiurrfaooylddeuupicctrthtosseprooermrr.ttahhjeeoWrnnheceigulglselitgoi3emgMnee'crnesoscomofefar33xsMuMipmpppueleimrressroeosanxfnnopcer,ol,sspooeerrcccuiflnaiadciemnrrisstkhlasell,lsegesgiuinncndghgetanhthsmaaitctflia33ciMmMatsppirfroooonrdduupincrctjotussvriiyisnniffoorrrniinspnggrceeoptthehairirtryddbn--dpepaaaremrntstyyatgipopmeaaattateetrennidstt,issnhoogoertosouhettheeorrf the use intellectual property. cionnddietimonni.ficatiaorn indemnifications are not expected While 3M's not expected to have a maximum to have a material impact exposure under material impact on the these on the Company's consolidated reosfopruatisons financial indemnification provisions cannot be estimated, these Company's consolidated results of operations or financial condition. A summary ofthe Company's significant contractual obligations ssof December 31, 2016, lows: A summary of the Company's significant contractual obligations as of December 31, 2016, follows: Contractual Obligations Contractual Obligations Lo(nMigtiil-loitonnesr)mdebt,incloding caren portion (Note 10) LIonngt-eteorrmneodsnebtgt-, finecmlduedibntg current portion (Note 10) OpCIOnasptpreeirarteatastitnneoggsnselelesoassnse(egsNs-(toe(NtNreomott1eed4e)11b44t)) "UUCTnoanctpcoaiolntandclidotilnteitiaoorsnaneacastllup(apNulurorccctaehhsaah1ss4eoe)bbollibgiliaggtaaittoiinoosnnssaannddootthheerr Total contractual cash obligations Tw Total S1L478 $ 11,478 29% 2,936 BS825 5959 del 1,361 Sloe $ 16,659 5 e2081r700 $ 24800 224 210 99 oi946 STW $ 2,189 Payments due by year os mo me awn wai 2018 S102 G3 SLUG 51246 S651 $ 1,042 2 20 2s 1s ism 221 dew msm 161 7 5 4 ER) 7 19 In sa 28 189 Sie STOW SIS Sis SEAS $ 1,620 2019 $ 623 210 119 5 123 $ 1,080 2020 $ 1,176 205 89 4 54 $ 1,528 2021 $ 1,246 195 58 4 24 $ 1,527 After 2021 $6,591 1,881 188 30 25 $8,715 Long-term debt payments due in 2017 and 2018 include flostingrate notes totaling S150 millon (classified as curen potion of LlpToroonoangvggi-it-stetieerormrnmms ddadeesbebstb)to),tc,ipaaaanntyeddmdS$ew77ni11ttshmmditilulhlleieioosinnn d2((eii0nbn1tcc7lliuunaddsneetdddru2imin0nen1oot8ttshh.ieenrrIcbnbloutoredrrrereooswfwtliopinanrgtogsijnsegiicnntrtiathohtenesnlloooonntnegbgs-tttteoehrrtmamfllidndoegetbbit$tn1gtba5lab0nelemd,),iflrirleeixossepnpdeecr(ctcaittlivaevesleosyliay.f,ige-sadstaaeasrmrceeudsuresrlbet,anooftiflppnpucotultrttuidoinngotfhe epfrfocvtissioofnis ansstocieraatretdeeswwsiathptsth,easeebdaesbet dinosntreufmfeecnttis.veInitnetrreeststpraoejesctisoonsfoDnebcoethmfblo3ea1rtin,g20a1n6d. fixed rate long-term debt, including the effects of interest rate swaps, are based on effective interest rates as of December 31, 2016. Unconditional purchase obligationsar defianseadn agreement to purchase goodsorservices that i enforceable and legally obUbriinnnpdcdaioiynnnggdcoiootnninottnrthhaaeecl tpCC,uoocmrmacpphapiantasaynel.yo.cboIInlmnicmgclilauuttdidmoeeenddnstiinansr,ttehhsedeeeruufvnniicnccoeoendndadiagitsrtiieaooennnmaaaellgnrptpeuuserarmccnhhedaanwssteieotlobolebpisluigg.racatThtiihaooesnnsessegccoaaetotseedtggsioomorrayyrtesaasebbroovvviceeeasarretehcaceterrittsaaeiinnnofboolbricligegaaatbtiilooennassnrdeelllaaettgeeaddllt1yo ttaakkee. or pay contracts, capital commitments, service agreements and utilities. These estimates EB 49 22775500..00004499 TaofCboesns Table of Contents riinmnclscudohefbbloottshh uuhnncacoonanddinittiioeoannraa.llppuaurrncchyhaaosseefotobhblelisiggeaatctiiooomnnmssiwwtimittehhntfteesrmrlssatiinneeexoxcclessksseoofofaronpneayycaeoarnrtsraanncddts,nnooirrnmmaWalhlicocnhig3oniMngggpouurrrscthhcaasesesoobpblaliiyggmaatetiinootnnss10wwciitothhse atafeovvrramaihllsaebboisifltiltuyeynsocsooftfnhpdparirnotodidououncnceattlssyepooaurrr.ssceeM hrravvasiinceceyecssbottlfhhiataghttaetrasireeeoncsssooomlClddomnt0toirtmacccuuetssnutootasrmlerecerarl.spa.itteTaTtlhhoeectaCCokoomemmmpopaeranpnnyaytyeescxxoppaenerctcrttansscctt0soa,rdrienoccdweivhiviecthcchooe3nnpM ssriiddsgeeeurrdaaaittriianoonnntea((epbpserroo,pddauuybccomtttssehnooetrrstssoeerrevneisceuers)e) chfcoooermmttmhmieiisttemmueeannnncttsionireedppitrtrieeosdeneanplstupraucsshrmmcaahsalealllssepanaotrrbhttleioogfattthhuieoreneCC,so.omCbmpuaotpnnyrat'enrspayrc'esetsuxeeapnxltepcceaoctptleietyddalctccahapoopismitetaamltl issetpmpneeennndodtiirsnngagh.reiTTihhcneectplpuhuuderreccCdhhoaaimnsspeetaahobenblylipigigraesatctciieooodnnnianramgamoctuaotbnuslntelts,ysbddouoobtnltniohgoteatstreeeedp.preTshseent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated. The milolrnott porfovMi'desaperloidsucltesiannddiscaetroircoef haerCpormcphaasneyd axspneecedtedd,twuilrh icoasuhncuonditt ionoalncosmmeitnmednta. bFio.thi ean, thes amos majority of 3M's products and services are purchased as needed, with no unconditional commitment. For this reason, these amounts will not provide a reliable indicator of the Company's expected future cash outflows on a stand-alone basis. OOitntchhleeurrdaeobbtilhgigaacttuoironrnse,sn,tiinpnoccltluiuddoeenddofinnhttheheeHpparrbeeiccelddyiinnfogg tbaulbnlceeerwwtiaittihhniinnaxtthhepoccaaspptttiiooonnn eeunnndtietelreddAS""UCUnn7cc4oa0nn,ddwiithitoioncaahslippeuuxrrpccehhcaastseeedoobb0lliiggbaaettiipooinndsssaunntddoiontthchearrs,h" nthe include eHxatbi1t2 next 12 tmmihoeolnntctuhhir.sr.neTTnhtcheeprooCCrotoeimdompenapcaaornsnfeyytsehieies liability for uncertain tax positions onvteabtliemefsohersesnosrb,lytheesotinmgateerthse not able to reasonably estimate the utpminomirdtnieinrgognAoooSfffCtthhh7eee4lml0oo,ennwgg-xhtteiecrrhmambipisplsaeiyyxtmmypeeneocfnttStses2dro6trto4thhbmee ipammaloilduounonitusttxbbicyynhwwcoahhdsiiehccdhhinftthrthhoeeem th rscding tbl. Ref liability will increase or foNotfeor frbe dts. decrease over time; therefore, the long-term portion of the net tax liability of $284 million is excluded from the preceding table. Refer to Note 8 for further details. 2AA0s1s7ddiaisnscduusssCeeoddmiipnnaNNnoyottceent111i1,,btuthhteeioCCnoosmmoppatannsyy ddooeeUSss. nanonotdt hihnaatvveemeaatrrieoqenuarilreepd mmiiinnniimmpuulmmancscaaassehheppxeepnnessciiotonendcc1o0onbtnreibtluairtigonenlyoabbdlliisigcgartieiootinnofnfoaorryiittissnUUfSu.S.tu.rppellyaaennassrsiinn h20e1r7eoanrd, CamoomupnatnsyrceloantterdiboutitohnessetoplitasnsUa.Se. naontd ncladed i hepreceding able international pension plans are expected to be largely discretionary in future years; therefore, amounts related to these plans are not included in the preceding table. FINANCIAL INSTRUMENTS FINANCIAL INSTRUMEN TS "TuThhcee CCtooummpapaainnoyyonceenanstsenhrsfntlinootweosffdrorereneioisgmnineeaxxtccehhdaanniggeeoffororriwwgaarrddccoucnortnertarnacccttssi,,aeoonsppdttiicoornnssanamnddinssfwarapcpsosmtpoaheneyddggFeenaagngacaiiinnngssttthrhaeensefafcfteficotonosffeeTxxhccehhaCanongmgeeparranttyee fluctuations on cash flow-s denominated in foreign currencies and certain intercompany financing transactions. The Company imnaonamgeersesnersatt srwatpss.kUsnduesrihnegsme iraonfgfeemdenatn,d cheatCionmgpraanteydaebg.esToehxeclhpamnagnea,geabtesrpreocinfiinegd toesrsva,ltsh,e tChoemiparn ewybcetnwreen manages interest rate risks using a mix of fixed and floating rate debt. To help manage borrowing costs, the Company may enter cifhniouxtmeoemddionaadtnneiddrteyfNsltooprtaraititicenneggsrwiiisnnakttpserstre.erssUtotnuaadmgemhorautnhnneetsgseoccdaaalarlcreeuadllnasgsteeeuddmppbeblnyyytsrec,eoffntsehtrrreeascnCntcsooe,motorpaaiannncyaaragggorrreeeeeceeddts--iutuooppnooenanxgcnnrhooeatteniimoogennenaa,ltlaspptrarsiinpnndeccciipcpifaaoillemdmaamomiodnouituenttrnyv.t.aplTTsih,hceetehCCeSoowdmamipfpfspae.anrneyyncmmeaabnneaatgwgeeessen commodity price risks through negotiated supply contracts, price protection agreements and commodity price swaps. Refer to Hem 7A, "Quaniatianned Qualitative Dislosres About Market Risk", fo otherdiscussion offoci exchange ras Refer to Item 7A, "Quantitative and Qualitative Disclosures About Market Risk", for further discussion of foreign exchange rates ik ret oes isk, commodity pric risk nd saalriusk als risk, interest rates risk, commodity prices risk and value at risk analysis. em 7A.Quanta and Qualia DisclosuresAboutMaske Ris. Item 7A. Quantitative and Oualitative Disclosures About Market Risk. eI1nxctthhheeacncgooenttreaextetsoo,ffHtIeetemmst77AAr,,t33sManisdeecxxoppmoomssoeeddditttooymmpaairrckkestt:iriCsskkhadduncegt0eoisntthhteheorissiekfoaofcftllooorssssscaaorruiislsidinngsg ffurrosommMaaudtvdaetrssieoncchshainnagsenasmigiinnnffgoosrreaiinggdnn cccauusrhrrenfslcoeyws. eSfSixeenncnaihinooacrrinagmmleaainrnsaaaktgpgeesoe,mmlieinencntteetrspeprsraootnvvrdiaidtdoeeebssjeaoocnevtdrievvrceisosiggm,hhamtnffoododrpitrrryoiisvspkkirdmimecseaagsn.uaiCgndehemaalniegnngeetassaefindnodmtddhdeeoeerrrsiiievvvnaaaftattiitcivvvteeoeraasnccctsiotvtuiutlsmidee,scn,adtdueeuseetlerarfmmltuiiicnnoteuenssa.tccioeSenretsrnaiininonrooefmaftartnhenieanggCCesoommamepnnpadtancnyaay'ls'shssoflow-s. financial risk policies and objectives, and provides guidelines for derivative instrument utilization. Senior management also cmxotnailtiosrhiensgcanrdnreposrotciniga.ted procedure eae 0 conantdvarluaotioln, rik nai, counterparty credit approval, ad ongoing establishes certain associated procedures relative to control and valuation, risk analysis, counterparty credit approval, and ongoing monitoring and reporting. "The Company is exposed10 credit oss he extaf nopefomance by couteparies intrest a sap, CUTncy snaps, The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commitpric sap, and forward ndoption cotacts. However, the Company'ssk sited fo the i valu of he commodity price swaps, and forward and option contracts. However, the Company's risk is limited to the fair value of the insirumnts. The Company active motors ts cxposae 1 rei isk through the se of credit approvals and crdi is, and by instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by clcting mor ntemational banks and faancial nstutioanscounirparis. The Companydoc notantcpatnnperformance selecting major international banks and financial institutions as counterparties. The Company does not anticipate nonperformance by nyofthse counterparts by any of these counterparties. Fosgn Exchange Rates Risk Foreign Exchange Rates Risk: Foreign sumeneysvshange rats snd ucts in those tes may aft the Company's nt ivesiment in frig sbsdiies Foreign currency exchange rates and fluctuation s in those rates may affect the Company's net investment in foreign subsidiaries and may cause ucutions in cash lows related 10 foreign denominated trmsactions. i loexposed 1 he ranslation of and may cause fluctuations in cash flow-s related to foreign denominated transactions. 3M is also exposed to the translation of Foran cucu comings 0 theU.S. dollar. TheCompany ces inf foreign exchange forward and opin contracts hedge foreign currency earnings to the U.S. dollar. The Company enters into foreign exchange forward and option contracts to hedge againsth ff ofexchange Hocus on cashflowsdenominated in orsign against the effect of exchange rate fluctuations on cash flow-s denominated in foreign 50 22775500..00005500 TabeofComets Table of Contents `ccuudrrarenennccceciesos.f. tTThhheeecsseexttreraannassaarcctteioioofnnntsshscarerdefeodsreiesgciagnsnatatetededdrsaaasccatasisohhnff.lolwBo-eghhieedndgngeiesns..g 33iMn thmmeaysyeddcoeendsdeisgqignnauatteeatothhfeet2ss0ee1ecc4aa,sshh3Mffllobowew-ghhaeenddeggxeeterlnedlaaitntigonitsnhheipss in in advance of the occurrence of the forecasted transaction. Beginning in the second quarter of 2014, 3M began extending the ampareviiomus leerngmthooff12immeaotvhesr whicoh atgebfdrm otf2s x4 poaothss,owtihteh acertrainacunrfearbeaisnhfelxoiewnsdoofdthfuertoheecrant3e6dmronmtahcsiaotnisnfgoim maximum length of time over which it hedges its exposure to the variability in future cash flow-s of the forecasted transactions from a previous term of 12 months to a longer term of 24 hreesrtsitonqsuahritpe0sroofc2t0,15.in Ipnard, ithoe in m3Mepnoafercritsto the first quarter of 2015. In addition, 3M enters into mffnorofreneeitgrhnnos,mccwpuuraritrrnheeynnccceayyrttfoaoininrwwvacareurdrdr(epccnroocinnimtetarrsraaicbclttesysinatthgshasateotxcaaitrreaeentnnedodoedtwddifeteushsriitgihgnnneaaretttreeocddo3ii6mnnpmhhaeeonddnyggtlihininsgcgsstairntigng in relationships to offset, in part, the impacts of certain intercompany activities (primarily associated with intercompaaay licensing rfoarnwgaredmceonnttranctdsainndrcfoormepiganncyurTennnccyindegnroamnisnoactieodnsd)ebAas ierdcguimnsganicnesstrwacrartasnto, hheedCgoemppoarnnyasloof hseesCoomrpiangy'csurometncy arrangements and intercompany financing transactions). As circumstances warrant, the Company also uses foreign currency ofiinopnvtrvwieeossanttrmcmdoeencnntottrssnatciirnntascfftoosdrreeacsiiniggdgnnnfaoootppreeeedriragatantiioocnansuss.r.rheTTnfhhcleyodwddoholeellnldaaogrmeeqisqunuiaaitanvedladeltednhneottsbgtgnrraosoosshsdenmdeoogttiisnoognnialilngaastmmnruouosumaunenettdtnogtoesfiftntdtohhgeehieCCndosogtmmerpuppamaonenrnytytiso'snsfsreoeorrieefigtg$h3nn.e2 eeCxxobccimhhlaalpinnaoggnneeyaf'fnsoodrnrww$eaat5rr7dd baainnlddlion, orrWeepasstppineoecnctiitnicvvneoelonyltt,yir,oancaaatttslDDdaeeemccsoeeiugmmnnbbtaeetorerfd33f11a,o,sr22ec00ia1g1s6nh6..cflAAuorswsc-oonfhfeeyDDdegefcceoeesrmmwabanberdedrrtc3h3o1o1n2s,t0e2a10nc61ot,6ts,ddtteehhsseeiiggCCnnoaoamttmeepdpdaaannasysyhnhheedatddgiinn11vg55e00isnmmtsimtilerllluniitmoonhneenEEdtuusgrrewoosssearlaennodd$g232.424w88ibibtbliilh4llilol.iinoonnbanSiSdooluu$ott5hh.E7KKuobroriorleesliaaoinnnn , Won in notional amount of foreign currency forward contracts designated as net investment hedges along hpreindcgipeaalsadmiosucnustsoefd ionrNcoie c1u2tiennethye dNeentoImnvienstamtdeeenbtdtHdoedsgiegsn"atseedct8ionn.o-dervatin hedging msuments principal amount of foreign currency denominated debt designated as non-derivative hedging instruments i certain pet investment with 4.4 billion Euros in in certain net investment hedges as discussed in Note 12 in the "Net Investment Hedges" section. Interest Rates Risk: Interest Rates Risk: "The Company may be impacted by ners rte vil withrespect existing debt and future dt sances SM manages The Company may be impacted by interest rate volatility with respect to existing debt and future debt issuances. 3M manages interest rte isk and expense usin mi of ied nd latinra dbl. In dion, he Company may otro nrc te interest rate risk and expense using a mix of fixed and floating rate debt. In addition, the Company may enter into interest rate hap hat ardesignated duality a i valu hedge. Underthse srangemets,thCompany 456s o exchange, at specified swaps that are designated and qualify as fair value hedges. Under these arrangements, the Company agrees to exchange, at specified ineral, he diffrence between fed and fcuing tees amounts calculated by reference on gres-upon sional principal intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. Th dollar cqivlent (asodn ncn dt Foran curmency exchange rats) goss nosonal amoantofthe Company's amount. The dollar equivalent (based on inception date foreign currency exchange rates) gross notional amount of the Company's interest ate swaps at December 31, 2016wa S20bilo. Additonaldetails about 3M longer debt can be found in Not 1 interest rate swaps at December 31, 2016 was $2.0 billion. Additional details about 3M's long-term debt can be found in Note 10, including reference to information ganlingderivativesandor hedging insta associated ith he Company's og ferm including references to information regarding derivatives and/or hedging instruments associated with the Company's long-term dan.debt. Commodity Pies Risk: Commodity Prices Risk: "TpTrhhieeceCCsoowmmapppasan.nyym1maaunsnadgsecsoccmoommmomdmainotddyitypippcrreiiccesewrriaisspkksssatthhrrcooauusgghhhflnnoegwgoohdtiaateeedd dssouufpppgFplolyyreeccsootnnsettrrdaacccttsos,mppmrroiicdceitppyroorttesicatoiconntoaagngrseretmomemenatnnsatnagnseddpccrooimmcemmovdoidatitlyy i iubpnurtcitcliedusidsscewcodoanniptntsii.nonu3tueM ehddrtutchhsioiessmdprprcraoeachmciteimnccseoidivnietyhthiepenrcfficoirresmstetsfawqouaaphresteiearvsooefcfnar22st0h011l5f5.lfo.swTtTih-hhveeee,deregolaeaestdedodfemmfloaaarrrekskc--fattsooet--edmmdaaircnrktokoemcettmggoaioidnnoitfoyosrrtltrloeoansssssaoisocnnthioqceuunlaspiletifofryyiimionndaggndhhauegerddiegngpgeersswicwhweiaavcssohlathtielity, included in other comprehensive income to the extent effective, and reclassified into cost of sales in the period during which the cohesdtgseadsstoacmisataecdiownitahffheectuesdecoaftmiangisnTchomCmoomdiptaineysmaanyd paricriountsometbaelsr.coThmemseenndsipricueswmaapso1todfefssiegtn,aitnedpairnt hfedugetdon ind hedged transaction affected earnings. The Company may enter into other commodity price swaps to offset, in part, fluctuation and Ieaionshiapnsd theseto hnich they erscusandinga Dice3r1, 2016 was no mater costs associated with the use of certain commodities and precious metals. These instruments are not designated in hedged relationships and the extent to which they were outstanding at December 31, 2016 was not material. si 51 22775500..00005511 TabeofCones Table of Contents ValueAt Risk Value At Risk: "The vl isk salysis i performed annul sess he Company'ssensi changes in currency tes, erst rats, and The value at risk analysis is performed annually to assess the Company's sensitivity to changes in currency rates, interest rates, and commit pies. A Monte Carl simulation echo was usd ott the pct cn ale comings related to fnancial commodity prices. A Monte Carlo simulation technique was used to test the impact on after-tax earnings related to financial instruments (primarily deb, derivatives and undying exposures utstandinagt Decembe3r1 2016. Themodel Ghin-party bank instruments (primarily debt), derivatives and underlying exposures outstanding at December 31, 2016. The model (third-party bank dats) vid 95 percent confidence ev aver 12-month im horizon. The xposars 1 changes in uencemodel used 15 dataset) used a 95 percent confidence level over a 12-month time horizon. The exposure to changes in currency rates model used 18 Curences, ners te related 1 three cure, and commodity price lated ofive commodiis. This msldocs not prport currencies, interest rates related to three currencies, and commodity prices related to five commodities. This model does not purport To represnt hat actully willbeexperienced by th Company. This mode docs mot ncecotin hedge rmsactions, boca the to represent what actually will be experienced by the Company. This model does not include certain hedge transactions, because the Company believe hee inclusion would not materially impact he esl. TheFollowing able summarize he possible arse snd Company believes their inclusion would not materially impact the results. The following table summarizes the possible adverse and pose impa0acltts camings resid 0 hese exposes. positive impacts to after-tax earnings related to these exposures. ian (Millions) Foreignexchange re Foreign exchange rates Interest es Interest rates Commodity prices Commodity prices nein nso Fotos Adverse impact on after-tax earnings te ee 2016 2015 Positive impact on after-tax earnings 2016 2015 Sem sens mw som $ (245) $ (254) $ 264 $ 273 a I) @ 5 (13) (13) (2) 9 1 1 (2) (1) 1 1 In diontothe possibleadverse and postinimpacts discus the preceding able ested to forign exchange rts, cent In addition to the possible adverse and positive impacts discussed in the preceding table related to foreign exchange rates, recent soil information a lls, 3M estimates tha year.on-varcurse alot. including hedging impacts. hd the Following. historical information is as follows. 3M estimates that year-on-year currency effects, including hedging impacts, had the following elton pra income: 2016 (5127 million decreas) and 2015 (S390 lio decreas). This timate ncdes the eect of effects on pre-tax income: 2016 ($127 million decrease) and 2015 ($390 million decrease). This estimate includes the effect of ansaing profs Tom focal cuencies nto U.S. dollars thpatofcurncy actioonhse r of gool dsbetween 34 translating profits from local currencies into U.S. dollars; the impact of currency fluctuations on the transfer of goods between 3M operations nthe United Ste nd brond, and transactiongainsand ose, includingderivative instruments designed to rece operations in the United States and abroad; and transaction gains and losses, including derivative instruments designed to reduce Torin curency exchange rt isk. 3M csimate ht ya orderivan tive andofr snsactiongains nd loses had te foreign currency exchange rate risks. 3M estimates that year-on-year derivative and other transaction gains and losses had the Following ffs on pra income: 216(569 illic decrease) and 2015 (S150 lio increas) following effects on pre-tax income: 2016 ($69 million decrease) and 2015 ($180 million increase). An nays ofthe global exposes elated prAincancahlaynsigseowfothueldglroebsualltenxpaospurrees-rcealastetd to oto purchased componenatnsd teil spauvricnhgassoefdacpopmropxoinmeantetslyan$d7m0 amtielrliaolns iipsseppeecrraffroo.rrmmTheee gddlaatot sbeaachlh yyeenesearrr--gaeynndde.x. pAAosaounnreee ppiees rrscsuencnhtt price change would result in a pre-tax cost or savings of approximately $70 million per year. The global energy exposure is such hexapotsutreen npeurcdeentspcriocre ychacnosgteswuosudldinrSeMlprodurctei-otnaancodtooshavfiancgisliosf,apprpirmoaxriimlaytdeley cS4r0ymainldoapre eaarss.. Globe cry that a ten percent price change would result in a pre-tax cost or savings of approximately $40 million per year. Global energy exposure includes energy costs used in 3M production and other facilities, primarily electricity and natural gas. 252 22775500..00005522 TabeofComets Table of Contents tem. SnantcialateanmdSupeplemnenttaryDsata, Item 8. Financial Statements and Supplementary Data. Index to Financial Statements Index to Financial Statements A complete summary ofForm 10-K content including the ind to financial sistent, i ound a the beginnofitnigs document. A complete summary of Form 10-K content, including the index to financial statements, is found at the beginning of this document. Management's Management's Responsibility Responsibility orfor FFiinnaanncciiaal RReeppoorrttiinngg `M Maaaennmaaeggneetmmseennhtatvisserrbeesesppnoonnpssriiebbplleaerffeoodrtithnheacninctioergtdraiytnycaeanwndidothobcbjsjeccetuicvnitttyioonfftpthhreienffciiinnpaalnnecsciigaaellniiennrffaolorlrmymaaattiieoocnnpiitnncdcllunutdhdeedd inUntthihiitssedrpeoSprotr.ti. oTThhfteeAmfneieanrnacinsicaia.all Where cesar. statements thaeveFibnaenecniaplreepmareedntinsacrcefolredcatneceswtiithmaabcetcsoeusntionngmparninggciepmleenstgsejnuerdaglmlyenatcc.epted in the United States of America. Where necessary, the financial statements reflect estimates based on management's judgment. sM Muaanbnasaggieedmmeeen.ntTt hhhaaisss csesyststatbbellimisshahenddd and and emmstiaaibnnlttiasaihniesdnaacsyycostueenmtionofgf nipnrtoaecrneldalurcceoosnttnerodll ooelvvaeetrefndinasannocianalsrreeapprooerrttdiiennsggifgfonorertdthh1ee0pCCrooommvpipadanenyyr eaaannsddo nitatssbl e subsidiaries. This system and its established accounting procedures and related controls are designed to provide reasonable aismspurlaenmceenhatbtesdyvqcutalaifriedspaefrsgonnndel,stnhdetthhte bpoaboiksbaonddfriencanocridaslpsroeperry.erneflaectpalrloapempsrep,aredthaandpofliycesparnedsepnrto.cedTuhrees assurance that assets are safeguarded, that the books and records properly reflect all transactions, that policies and procedures are are bCiCumsooipmmnlpeepmasansneynycot'ssenddssyuybcsyttteeqmmpuoaloofilfiicfiniienetstd,eermpwnaehairllscohccnoonannrettreloo,lldaeonosdveiergtrhnafneitdanpna1cuneibcailailsqlhrreepdpsoofrfirnltiiannpnggciiiassllsssuitspappteoomrrt0ieenddmtasbbiyyanrtwieadiipdnrleoilypygecchrlooyemmtpmhmruiecnupainlacircsaeatdttaeenadddnadwwrrdrfiisattitireenlnnytpphpoeorlelciiscoceinenesdtse,u,dciit.nncTcollhfuueddiinngg Company fli. business conduct pIonlticeimesl,auwdhiitcohrsacreodteismiganleyd reviewth acounatndiconntrgol sys. to require all employees to maintain high ethical standards in the conduct of Company affairs. Internal auditors continually review- the accounting and control system. 3M Company 3M Company Management's Management's Reporton Report on IInntteerrnnaall CCoonnttrrooll OOvveerr FFiinnaanncciiaall RReeppoorrttiinngg MM MaasannsaaeggeermmeenntctiossnrrdeeusscpptooennsdsiibblleefafsoosrscetssamtalebsnltihsoihfinntgghCaaonndmd pmmaaiinnntyaisininnngaiganan laaddeceqoqunuatatoteelssoyyvsestreemmFoonffainnceteranrleaploccrootnitntergolblaoosvveederofninantnahcneiciarallamrreeeppnoororttriinnkgg.. sFM esartabaanlmbaielgiswsehhomeerddeknbb2tyy0cott1hhn5eed)uCCcotBmeoadsmeamidntoteanmesosoetfihfseSsSsmpptseocrnnsetsimooernfeinntghtge,OOrCmrgogasmannnapiagzaetanmtoyieo'nsnntisnootcfefotrtnnhhcaeellaTTcdorreenedatarddhowwala,aoyyvseoCCfrooDfmmimnemiacnsicsseisiaimool nbnreeiipnnorIrnt3iet1n,erg2rna0ba1lal,sCCeodtonhtnortnCroolthloe fmrInanemtpegesgrwaritaontrentekeddmyal Fcornatmoelwoovrekr(f2n0a1n3c)i.lBpasoerdionngthies eafsfseecstisvme.ent, management concluded that, as of December 31, 2016, the Company's internal control over financial reporting is effective. "TLTLhhPee,CCoaommpaipnnyad'nespye'snndienetnemtrniaasltcceoornntterodollaoobvvlerreffiaincnaacnnoccuiinaatllip rnegporrmti,nr gaaasssootfafi tDDedseci nemtn bhberetr3r31e1p,,o22rt0011w66hihhcaahss ibbneeceenlnosaduudeiitdteedhdebbyey,PPrriwcchseiwwcaahtteeerhhxooupusrseeeCCosooaospnpeerrss nalfed oni othe efsctiveonfethsCompany's LLP, an independent registered public accounting firm, as inal stated in cthonetirrorlepoovretrwfhaaicnhciieslinecplourdteidnghsesreoifnD, ewcheicrhbeexrpr3e1s,se2s01a.n unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2016. 3M Company 3M Company 553 22775500..00005533 TTableaooffCCbonotnetsennttss ReopfInodeprendtent Regtered Public Accounting Fem Report of Independent Registered Public Accounting Firm "Toth Stckboeransd BodoDiscosof 3 Company To the Stockholders and Board of Directors of 3M Company curopiniontescompanyin conslted beans ht dhe ted consolidated stents.of nen, compre se, In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, comprehensive income, Changer mits an oh flows psc Fi, l ster spc, the Fanci posiotfo3n1 Company ad tr sedis. (he changes in equity and cash flow-s present fairly, in all material respects, the financial position of 3M Company and its subsidiaries (the "Company Demi3r1 2016 and 2015 nd he slsof i pationadicash flowsfor ch fhhei ers onheeid "Company") at December 31, 2016 and 2015, and the results oftheir operations aaad their cash flow-s for each ofthe three years in the period ended December 31in.so2f0or1t with acon penis snrallyaspied nthe ned SsofAe ric. Ali out opin. ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, {he Company mintinc, ll seri spss, Tc fra onl ver ncn poring sof Desemh31r, 201, bd oncrits the Company maintained, in all material respects, effective internal control over finaaacial reporting as of December 31, 2016, based on criteria bled n eral Control teat ramon (213) sodby theComite of Sprain Orgaofnhe Treadway established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations ofthe Treadway Commision(OSO).TheCompany's aspen espritfoths nein tne o rain Sci fra ol Commission (COSO). The Compaaay's management is responsible for these financial statements, for maintaining effective internal control ove Tcl poring anFo d ssnof he fcivencs of ermal comoovrfancil soring,inadd nthe sccrnpunying over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Nanagements Report oer Coto ovr Fil Reporting. Oerspons io expres opison hoe fncalsemtssnd Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and nhsCompany mrs sotve vo ilering aednar psc adit. Wesmitoeve ait cond vith he on the Compaaay's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the ianodhs abl Company Accouing Ovens Tard Stee Thon dnd rt ta we plnsnd perfor the sus0 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plaaa and perform the audits to binreson auras about hehe eanemt 1s oferal ited nd whathr Tt tral nol obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control ve Tcl eporingwas sind nl meri pects. Or aditsof he inactded examiniongn. 16 bss. over financial reporting was maintained in all material respects. Our audits of the finaaacial statements included exaanining, on a test basis, dens opporhe outsaddco he Fini sents,mein hsSuieninges ocdsnd at ics evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used aaad significant estimates mal by manage, ad valuing heoverall Fancial snc prescinion. Ove audi of teal con ove fil reporting made by maaaagement, and evaluating the overall financial statement presentation. Our audit of internal control over finaaacial reporting inode hsan detaofienr cots vr Tcl reprihe rsk iot nmtgr Weskncs exits,ad sing included obtaining am understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing cating hedni sndoperating lectinsof kr otro aed nhs sce. Our sia tededperforin uch aaad evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such hrrca wegodtnea fh ssa. Webelies that oe ats roid sonablebsForou FO. other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Acompanys ntenl contol oer Fai porting i possdsgned 0 provide escasblesan readinhge lb of A company's internal control over financial reporting is a process designed to provide reasonable assuraaace regarding the reliability of Financialreporting nd he preparationofvac metfocxtmlpnpse in score il rly cepted cco finaaacial reporting aaad the preparation of financial statements for external purposes in accordance with generally accepted accounting icles. company's ral conrl over cia parting nodes hsepolicies ad procedures ht) parsothe canof principles. A company's internal control over finaaacial reporting includes those policies and procedures that (i) pertain to the maintenance of sods ht, inemonble dei,cura and ily che rancid isposfons of heactsof com(1)pprvai records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions ofthe assets of the compaaay; (ii) provide Fora sr htaae c ar record ec 10 pert reparsionof fans teensinscorwnilh gnerlly reasonable assuraaace that transactions are recorded as necessaxy to permit preparation of financial statements in accordance with generally oped acounticlesm,dhet scits nd condi ofthecompany a bing ads oly in acdc wilh itionof accepted accounting principles, aaad that receipts and expenditures of the company are being made only in accordance with authorizations of managment nd ditoof he company: ad(5)provide ssen ncergardil gprevention ay detectionofthor maaaagement and directors ofthe company; and (iii) provide reasonable assurance regaxding prevention or timely detection of unauthorized iio, us,ordispositionof he company' 55th coud have trlecton he Fancl snes acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Decne fs nro nitions, ers sno ve Fol epimay moped dts mists. AL,pesctioofnnsy Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any vatofcilfcotnsne farperiods sb herk hkotro mas ban irdt bcsofhansin conditions, evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or {ht the dof cr ompliance with hepoiprsedony dirs that the degree of compliance with the policies or procedures may deteriorate. PrcwtahoseCoones LLP /s/PricewaterhouseCoopers LLP Pricewat erhouseCoopers LLP February 017 Minneapolis, Minnesota February 9, 2017 si 54 22775500..00005544 able of Cones. Table of Contents 33CM oMnsCCaoolmmipdpaaaenndyyStaaanntddeSSmuuebnbstsiiddoifiaarIrinieecssom CYeoanrssocliaddateedDSetacteemmebnet3r1of Incom e Years ended December 31 ONNo O(es Mpteisetllansiolainlc eenss,sgexxcpeo eptnpseerssp hare ap mountso ) somony OSCpcoeClrsoaitstnitongogl,feisexaenpleseesnrs]esandadministrative xpenses Selling, general and administrative expenses ReTsoetaarlcohp,erdaetvienlgoepxmpeenntseasnd reliedexpenses Research, development and related expenses OpenTiontagl ionpceormaeti.ng expenses Operating income ae 2016 Tew $ 30,109 1500 15,040 an6,111 1735 1,735 EXT 22,886 7a7,223 ws 2015 Tse $ 30,274 153815,383 cam6,182 1761,763 Tio23,328 Ey 6,946 am 2014 sim $ 31,821 toa7 16,447 6469 6,469 17m 1,770 Fix 24,686 7s 7,135 InItnIetnertreeessrtteeesxxtppeeexnnpsseeeansanneddiinnccoommee InIITtnnettoeerrreleessstttiineintxncrpcoeeomsnmtseeeexpense -- net Total interest expense net 9 19 w 199 a e9 a (29) To in i 170 149 (26) 123 142 (33) 109 PIrnIoncvcioosmmieoebnbeefffooorrreiininncccooommmeeeatxtaaexxseess NPertoivniscioonmefoirncinlucdoimnge tnaoxnecsontoling interest Net income including noncontrolling interest "oss osm 70 7,053 6,823 7,026 1995 ios 2008 1,995 1,982 2,028 ST --T $ 5,058 $ 4,841 $ 4,998 Less: Nt income atrbtuo tnonacobtrlllieng nest Less: Net income attributable to noncontrolling interest 5 5 2 8 8 42 Netincomeatibuiableto 3M Net income attributable to 3M Ss sew sams ase $ 5,050 $ 4,833 $ 4,956 EaW Wmeiieginghghtstedpveavreserhraaarge33aMMticbcouomimambmoloenn10sshh3aarMreecssocomuutmtstotnandnisdnhingagc--holbbdaasrsiiscc --basic Earnings per share attributable to 3M common shareholders basic air ase 6492 604.7 625.6 649.2 $s wss ms ie $ 8.35 $ 7.72 $ 7.63 WeW Eiagemiihgnthgetseddpoaarvveserhraaarggeae 3IMtMccoiommmbmoonuntsosht3haarMreeascsocolmuusmtsaeotannnddisinnhggar--holdddiileuertsedd-- diied Earnings per share attributable to 3M common shareholders diluted a7 a2 6620 618.7 637.2 662.0 SWIG S788 S749 $ 8.16 $ 7.58 $ 7.49 Cashdiviuiddpre3Mncodmmson sare Cash dividends paid per 3M common share Sams ans ae $ 4.44 $ 4.10 $ 3.42 "The accomponying Notes o Consolidated Financial Semeaenan itera partofhis stent The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. ss 55 22775500..00005555 Table of Comes. Table of Contents 33CM oMnsCCooloimmdpapatanendyySaatnnddtSSeuubmbsesiidodnifiaatrriiCeeossmprehensive ncon CYeoanrssocliaddateedDSetacteemmebnet3r1of Comprehensive Incom e Years ended December 31 Ques (Millions) Netincomemelding ronconling Tees Net income including noncontrolling interest Othercompreheinncosmeilvoes) ne of es: Other comprehensive income (loss), net of tax: `Cumulative raniaion ajosiment Cumulative translation adjustment Defined benefit pasion and postctirment plans adjustment Defined benefit pension and postretirement plans adjustment Debtandequitysearsunrealizedgain 0s) Debt and equity securities, unrealized gain (loss) Cash flow hedsing insur, unrealized si (ow) Cash flow-hedging instruments, unrealized gain (loss) Toa thercomprehensive income (los), netof Total other comprehensive income (loss), net of tax Comprehensive income los) including oncontoling iret Comprehensive income (loss) including noncontrolling interest Comprehensive (income)losatta 0noncontllin ners. Comprehensive (income) loss attributable to noncontrolling interest Compreensive income los) atta 0 3M Comprehensive income (loss) attributable to 3M a Sowme m sos nsws ow 2016 2015 2014 $ 5,058 $ 4,841 $ 4,998 an (331) 0 (524) ---- a3(33) Tw) (888) En 4,170 (6) ES TS $ 4,164 $ (sno) (586) wo489 =225 72(72) To 4,769 (6) 4,763 $ ) (942) ase) (1,562) 22 0107 5 (2,395) Zon 2,603 a(48) 2,555 "The accompanying Notes oCansldstd Finan Statemeanetasn irs partofhis stent The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. 556 22775500..00005566 Table of Cones. Table of Contents 33CM oMnsCCooloimmdpapatanendyy BaaannlddanSScuuebbsSsiiddhiiaactrriieess A Decembe3r1 Consolidated Balance Shee t At December 31 asinns, xceptpe srs sean (Dollars in millions, except per share amount) nen Assets Cum sts Current assets Caan a ives Cash and cash equivalents Nakescien curt Marketable securities current Accounts resivabl ntofallowoafS6n5cnde9s1 Accounts receivable net of allowances of $88 and $91 meorin Inventories Fished goods Finished goods ane2016 s 2m 2,398 $ Ea280 wn 4,392 1691,629 Work in process Rev steals snd pple Raw- materials and supplies Toul meni Total inventories Or cen cts Other current assets Tob arent sects Total current assets Marketable nin mon-ort Marketable securities non-current vestments Investments Proper plantand spent. Property, plant and equipment Tos: Accumltd depression Less: Accumulated depreciation Prolasptndeqrui,ntet. Property, plant and equipment net Gonduil Goodwill nang ass nt Intangible assets net Prep peinbeets Prepaid pension benefits Omerste Other assets Toul ste Total assets 1,039 mw717 Te 3,385 pre1,271 Tie 11,726 717 ES128 25.23,499 ain) (14,983) sie 8,516 pr 9,166 25m2,320 <52 om981 T iw 32,906 $ Liabilities Comet lables Current liabilities Shittem brings an unpotion of ange eb. Short-term borrowings and current portion of long-term debt Acoume payable Accounts payable ced parol Accrued payroll s ms 972 $ 11,798 on678 Accrued income taxes Or cme ails Other current liabilities Toul cnt bilis Total current liabilities 299 2m 2,472 wan6,219 Long om de Long-term debt Passdpistotcenn bens Pension and postretirement benefits Oe Other liabilities Tou labile: Total liabilities Commiensdcongncies (Note 14) Commitments and contingencies (Note 14) Faulty Equity SM Companysharcoldn' iy: 3M Company shareholders' equity: Comsocmk paorvanl 01pr aloe Common stock par value, $.01 par value Shares cutandin - 16: 6730278 Shares outstaa~ding - 2016:596,726,278 Shares ustanding - 015 GO 330124 Shares outstm~ding - 2015:609,330,124 Addon pidin cpl Additional paid-in capital Retin cami. Retained earnings Tommy sock Treasury stock Accmiaed orcompres come (1s) Accumulated other comprehensive income (loss) Toul 3 Company shreds sity Total 3M Company shareholders' equity Nowonoling mrt Noncontrolling interest Toul cy Total equity Toul tis and sity Total liabilities and equity 1010,678 ons 4,018 Lew1,648 T Bw T $ 22,563 $ s 0s $ 9 $ Sout 5,061 son 37,907 assy (25,434) cas (7,245) TE10,298 45 T ns T $ 10,343 $ 5 ow 5 $ 32,906 $ "The accomponying Notes o Consolidated Financial Semen aean tea partofhis sisenent The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. 557 ans2015 9%1,798 is118 ais4,154 165s1,655 1,008 se855 EB3,518 Low1,398 Tose 10,986 59 w117 2 23,098 ase) (14,583) wore8,515 9269,249 212,601 Ts188 ims1,218 ET 32,883 2002,044 16041,694 ou644 332 ry2,404 im7,118 wm8,753 33,520 2002,024 Fras 21,415 59 am4,791 36296 36,296 a0 (23,308) 63) (6,359) TEES 11,429 39 Tae 11,468 wm 32,883 22775500..00005577 abs of Cones. Table of Contents 3M Company and Subsidiaries 3M Company and Subsidiaries Consalidaed StateofmCheanngets in Equity Consolidated Statement of Changes in Equit y Years Ended Decembe3r1 Years Ended December 31 hatbo ilss, resrss sepen tus NSCCooinaonnn SDNCaommpaan gShereeC.e onp"arOmew byensve oNeon.r (Dollars in millions, except per share amounts) inesDecne 1: 305 Sia ier SE SUS S 0m S46 Balance at December 31, 2013 leetriome me ls), tof om 0 = Other comprehensive income (loss), net of tax: Combeshat om om " Cumulative translation adjustment Dtedentps sd petiplt smn (1563) as Defined benefit pension and post-retirement plans adjustment po Seg 3 3 a Debt and equity securities - unrealized gain (loss) Ca pn mt op ls) w w Cash flow hedging instruments - unrealized gain (loss) Toccpsme oy nkFo Eo] Total other comprehensive income (loss), net of tax Divinred5e.55 ds, te) an om Dividends declared ($3.59 per share, Note 6) Rin ww awn Purchase of subsidiary shares Stock-based compensation, net of tax impacts Ror ws a Reacquired stock anit pn tekpt sdec pos a aw Issuances pursuant to stock option and benefit plans BinetDecmbe 1,304 Toa TO Tas Tm Tew Tw Balance at December 31, 2014 Nainame as 3 5 Net income Oecomepeefmrte Other comprehensive income (loss), net of tax: Coma amis spun ww we Cumulative translation adjustment Xd eftpeosd pt tronpoms snc w Defined benefit pension and post-retirement plans adjustment DN SlSeeet oo) = = = Debt and equity securities - unrealized gain (loss) CbTo ig rss gs) 2 - Cash flow hedging instruments - unrealized gain (loss) Tote composi ome (oa pied Total other comprehensive income (loss), net of tax Dike dred (30 perhe ee) ast asm, Dividends declared ($3.075 per share, Note 6) SeSenso, of pcs wm Stock-based compensation, net of tax impacts Rooms 3h aon Reacquired stock oepanto skctionsd itpos a pe Issuances pursuant to stock option and benefit plans Bane December31.3015 The Tom Tow few ww 5 Balance at December 31, 2015 Nainome sos Sos b Net income Ol omnensi ae: Other comprehensive income (loss), net of tax: ComeSpm an om Cumulative translation adjustment Dx otpennsd tts ossinc & @ 2 Defined benefit pension and post-retirement plans adjustment Dont m ytoe on fo) = i = Debt and equity securities - unrealized gain (loss) Coo ing rssca sl) J) & = Cash flow hedging instruments - unrealized gain/(loss) oh lr cope ome of = Total other comprehensive income (loss), net of tax Dvdr (5134 per ee 6 ay com Dividends declared ($4.44 per share, Note 6) Soi Spent wm Stock-based compensation Roopa. aon aon Reacquired stock oespanto okcptonsnd etpos i co Go Issuances pursuant to stock option and benefit plans nef econ 31.306. Fo ras wil -- Balance at December 31, 2016 Total $ 17,669 4,998 Common Stock and Additional Paid-in Capital $ 4,384 3M Company Shareholders Accumulated Other Comprehensive Retained Treasury Income Earnings Stock (Loss) $ 32,137 $ (15,385) $ (3,913) 4,956 Non- controlling Interest $ 446 42 (942) (1,562) 2 107 (2,395) (2,297) (870) 438 (5,643) 963 $ 12,863 $ 4,841 (2,297) (434) 438 (5,643) (758) 1,721 4,388 $ 34,038 S (19,307) S 4,833 (948) (1,562) 2 107 25 (6,289) 6 (461) 33 8 (586) 489 (584) (2) 489 25 (72) (1,913) 412 (5,304) 641 $ 1L468 $ 5,058 412 4~800 (1,913) (5,304) (662) 1,303 $ 36~296 $ (23~308) $ 5,050 25 (6~359) $ 39 8 (331) (524) (329) (2) (524) -- (33) (888) (2,678) 270 (3,699) 812 $ 10,343 $ 270 5,070 (2,678) (3,699) (761) 1,573 $ 37,907 $ (25,434) $ (33) -- (7,245) S 45 Spt ornsie ame sms ams Supplemental share information Trapani Treasury stock tesbbe gman sesame Beginning balance rd ans Simi wie Reacquired stock etpant tskcps nd bit Dom aici __dadnug Issuances pursuant to stock options and benefit plans Ei ie Eo Ending balance 2016 334,702,932 22,602,748 (9,998,902) 347,306,778 2015 308,898,462 34,072,584 (8,268,114) 334,702,932 "The accompanying Notes oCansldstd Finan Statemeanetasn irs arto his stent The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. 2014 280,736,817 40,664,061 (12,502,416) 308,898,462 558 22775500..00005588 able of Cones. Table of Contents 33CM oMnsCCaoolmmipdpaaaenndyySaanntddaSSutubbsesiidmodifieaaCrraniieestssh Flow 5 CYeoanrssocliaddateedDSetacteemmebne3t ro1f Cash Flow s Years ended December 31 (CMastillhiioanHns) w from Operating Actives NNACdeeajttsuhiisntnFcmcoleomonwmtessiinftnroccolrlumeudcdiioOnnnggcpienolroneanctnocieonntntgiotrAnlociclolntiimgnvegitiiiiennnsctfeleruerdsistng neacontroling intrest Adjustments to reconcile net income including nDeeptreccaisahtipornovainddedamboyrtoipzeartaitoinng activites to net cash provided by operating activities noncontrolling interest CDCCoooemmpmpprpeaacanninayyytiopppneeennnasssniiiodoonnnaasnmnndoddrptppoiozosaststttircoeitntrieerermmnecennnttt ccxoponettnristbeuotinonss Company pension and postretirement SDteofcekrrbeadseidnccoommepeanxseastion expense Stock-based compensation expense expense CDEExhxeccfaeeensrsrssgetdteaaixsxinnbbcaeeosnnsmeeeftefisitttssaaxnfferdrosoammsisttoolcckk.s-bbaasseedd compensation compensation Changes in assets and IAncvseonutnortisesreceivable Accounts receivable liabilities AAIAcncccvscreoounuutenondtrtssiienpspcaaoyyaambbelleeaves (curent nd ong em) NetOOcbAathescehrcrprureodvnnieientdtceodmbye otpaexreas t(icnugrraecntt iavnedsl:ong-term) Net cash provided by operating activities ame2016 somes 5,058 sus2015 sams $ 4,841 $ 1a1,474 65) 083) x0251 m298 77 ---613) (313) 557 1s148 10101 ery(36) Goa 6,662 Lass 1,435 asm (267) so556 16276 0s395 asy (154) Ie(58) 53 59 amy (744) 12128 Tin 6,420 CCPaausshhsFFlcloowhwossfafpfrrrsooopm meerltaIsyvn.evseptslitainnngtgAaAcntdcitvicivptiitiipeesmsent (PPE) Purchases of property, plant and equipment (PP&E) PrAocqcueiseidtisofnrso,mnestoefocfaPsPhAacquainrdedotheracts Proceeds from sale of PP&E and other assets APPPrucorquscuheireasdsitescisoofnorhfsof,mmmaanremaktsrakeoetufetaracbbasilsleehsssaaeecnccquduursriiirttleiiedessofaanmddariinknevtevasetbmlseetnstssuriand incsiments Proceeds from maturities and sale OPtrohcreiendvsefsrionmgaloofbusiness Proceeds from sale of businesses of marketable securities and investments NOetthcearsitnvuesstidnigninsting aves Net cash used in investing activities a0 (1,420) 558 a(16) ado (1,410) 12671,247 a142 @(4) aos) (1,403) aden (1,461) 533 as(2,914) (62) (652) 192 1,952 nm123 12102 Ean (2,817) CCChaaassnhhgeFFdlloowwssshffroroorm mteFFriinndaannbcciinnggnAAectcttiivviittiieess CRRPreheoppacanaeyygemmedesiennnfttrsohoofomfrdddt-eeetbbebitrm(((mmdametaubtrtaitiietsnggeurtrreetaerteeeritththtann i99h9000ddedaaaynyyssss))) PrPPPuroourcccheoreaddscsessfhfroroofoafmmtsrseidaaeesrsbuytsrsy(mssuatoootucfacrkkinteieacssgeyreastetrocthkapn u90rdsay1us)astnoctk option nd DPirebovecinnedeecefdintsdppflrlpaoaannmissd issuance of treasury 0 sharcholdes stock pursuant to stock option and PuDEErxxiccvcheiedssaesssnttedaaosxxfpbbaeeoninndeecftfoioitntsstshoffralroriomemnhsgotsltodociecknrk.ts-brbueasssetedd compensation compensation Purchase of noncontrolling interest NeOtthecrashunsetdin facing aves Other net Net cash used in financing activities an (797) on) (992) 252 2,832 ars 0,753) sot804 asm (2,678) =-=-w@(42) a0 (4,626) fa860 aon) (800) 32 3,422 Gam) (5,238) as635 ase(2,561) 154154 a=y (120) Goi(3,648) Eff ofexchangerat changesoncashand sshequivalents Effect of exchange rate changes on cash and cash equivalents si (33) (54) NCNeaetntidinnccrreeacasaees(h(ddceecpcrrieeavasaseel))eiinnntcacsaassbhhenagniddncicanasgsohhfieqvcuaailvraelnenttss CaCsashhaannddccoasshhcepqiuvivaallnenttss aattebnedgionfnpinergioodf year Cash and cash equivalents at end of period wo600 1% 1,798 ET -- $ 2,398 $ )(99) 1307 1,897 A -- 1,798 $ "The accompanyingNotes oComslidstd Financial Semear nsn inespart of is sen. The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. 559 ane2014 as 4,998 Laos 1,408 ais) (215) 1391 20280 [ (146) as (167) ass) (268) am (113) 7s75 206206 mn177 To 6,626 as (1,493) 1s135 on(94) am) (1,280) 204 2,034 0=102 50(596) 227 aes (1,625) 2608 2,608 Gos) (5,652) a0968 @a1e (2,216) 167167 aon (861) an(19) Gos) (6,603) an(111) pwrtn (684) 2,581 1,897 22775500..00005599 TabeofComets Table of Contents NotestoConsolidated Financial Statements Notes to Consolidated Financial Statements NOTE1.Significant AccountingPolicies NOTE 1. Significant Accounting Policies CsCouonbnssoslioildididaaatitriooianner:e:s33cMonssioslaiadddaitivveeder.rssiiAffiileeddnggellroocbbaoallmpmmaaannnuyfuafctatrcuaturnersera,rc,tteiesocbnhunoroelloocgglyyiiminnanntooevva.attooArrsaannuddsmmdaabrekrrentke,reootfhfreatwweiimddee"vvSaMar"iretyoyro"ofCfoppmrroopdduaucnctstys,". AArlelllfers 0 s3uMbsCidoimapriaensyareancdosnusbosiliddiaatreide.sAulnllienstsertchoemcponatneysttrainndsiaccattieosncslbaererweiliem.inated. As used herein, the term "3M" or "Company" refers to 3M Company and subsidiaries unless the context indicates otherwise. BcsoatmsiesstooftfpphrereesCseoemmntptaaatntiyioo'nns:: apCCpeelrritaciianntcicooonnnsosofolAliicddcaaotteeuddntbbliaalnangncScteassnhhdecaerttdsasmCoooinufnsctsarrteeillaoattniivv(eeAotSoCpp)rrii4oo5rp0pe,erCriioooddssnhaavgveerbbeeeeennswimim,lmh tarteesrpiseacltlytrreesvviissseeddpittoonor correct the Company's amlaspksobetstsoselvialnyt mask/asbestos liability application of Accounting Standards Codification (ASC) 450, Contingencies, with respect to its respirator aasrssoiaattehdewihtah paeobdiengtaonfdfuttuurreclairesswhaennd srielmiaetdidnegftehnissecoastbsi.tT.hisScesoNncoto1n4 froerflfectshhedeintc.lus3ioMn of associated with pending and future claims and related defense costs. This correction reflects the inclusion of all potentially relevant years rather than a subset of future years when estimating this liability. See Note 14 for further detail. `CoemsmissitohenmSatefriAalcictoyuonftitnhgi lomletsionNo.o(pSiA)pe9r9i,odase' rainaill asnad SmAeBn10i8,sCcoenonsdiadneerwiihnhegSEefcufrioetcPatnidsoExYcehaarnge assessed the materiality of this correction to prior periods' financial statements in accordance with Securities and Exchange 3M M FCMiioinssmasantmctaiteieasmsmleioeSnnnttatssStetwwamhhefefneAntnscQQcuouTaheuarnntttCiinfoygimnBpgauMMlnliieysstsicsntatoNtaeneomm.dee(nStetAss Bitn)aCC9tu9u,rhrerM eencnatttoe1Tr~erieoaartlriFFtoyii,nnwaaananncsdciianSaloAltSSBtmtaaat1ttee0erm8mi,aeeClnnotssn,psrccidiooedodirrififnpiieegedrdtihiionnedsAAEafSSfneCCdct22ts55ho0e0r,,fePPfPorrrrieeoess,recna1a~tmateateiiroonnndomoffentosf FcpporrienenvvsaiionoolcuuiissadlllytySefFdtiallbetdedlmarreeenppnocotrssrt.thssTeaaehrrteeeaCnnuoootnmrrtepesqqau,uniiyrreiedcnd.oc.lnInucndluiaandccgeccdooarsrtdsdhoaaacnnticctaeehteewidctidothherrfAAeecSSrtiCCon22a55w0x0,ae,s.33nMMoPetccrmooiromardteeec1ertitpeaddel rtproirooipordrricopphreearprniieogordediosssdppisrnreeapssnreedennvtttiheeodedursehhfeeeorreeresiinn, tabbmyyierrnoeemdvvfimiapssrieintonngbgtseatthbohselefe Toaclonossdnssscwwoaelesirdrheeatfsseliidommwibisllaaalfrraonttooctetthhhsoohpssereeeootofdafhmstheoepurrrneeetcvvsaii,stsieeendddc,laaummadoiouniungtnsstas.sc.soAAorccrcieccacootterridddoinindngeofrlgyei.r,grtitehhndeeattocaeoxrreiersee.pciPetiroeoirnnoiodhhsdadpdtonirpooerieioimoptdpoahaccocrhsttaeoonnpcgrecossoncnisnsnolipldirideavianttieodhduessreeeassutsilmtassoaotfefrseootpppooerefrtra.patrstiToioobnhnassble caiimunmidpptaacc,cattsoahofntffdhltohirwsies-lrsareetfvvoeidirssitiahoomnenoupoonntenhtersitCohidoesmCpNoproemastepnneatynseyd,',s as this correction originates in periods prior to those presented in the annual report. 1pr4envidou1lys.parfoeldlowosn:soidied blanc shee, consolidated statementofchanges previously reported consolidated balance sheet, consolidated statement of changes inThe in equity, and related amounts in Notes 5, 8, 14 and 16 is as follows: pre(Millions) Otheras Other assets Tou assets Total assets Oterlabilfics Other liabilities Tol lilies Total liabilities Retained camings Retained earnings "Toa 3M Company Total 3M Company Srsholdescay shareholders' equity Tol ity Total equity December 31, 2015 ET he Previously Reported Adjustment s Tos ST des $ 1,053 $ 165 a7 6s 32,718 165 is a 1,580 444 209m a 20,971 444 3075 am 36,575 (279) TT As Revised $0 1am $ 1,218 ams 32,883 20 2,024 2s 21,415 es 36,296 11708 11,708 wa11,747 am naw (279) ams (279) 11,429 11,468 December 31, 2014 Tr Ro Sie Previously Reported Adjustment s Tim des $ 1,769 $ 165 31200 16s 31,209 165 155s a 1,555 444 18067 aa 18,067 444 34317 am 34,317 (279) As Revised 5 Lor $ 1,934 am 31,374 1990 1,999 msn 18,511 sis 34,038 13109 13,109 2 13,142 am eso (279) ames (279) 12,830 12,863 CAAasmstithhneegccsooarrnreedtcittiooonnlrocrsigiinnau tsteeos fiinni Dppeecreeioy mdbrsepprririi3oo1ro,t0o2d0tthh1oo3ssseoefpp$rree5ss2ee.nn1ttee6ddmiinlltihisoisn aaanndnnuu$all17pre.op9ro4r,t,mttihheelopprr,eevvriisooupusesllcyyirnreecppyoo,rrtteienddtaahmmeocouounnnsttosslooifdfearteestadinded SeaarenminegnstaonfdcthoatanlgeeqsuiintyqausioyfhDaevceemcabcehrb3e1,e20r1e3duocfed$b3y2,4S12679mmililliolinonand $17,948 million, respectively, in the consolidated statement of changes in equity have each been reduced by $279 million. Foreign cumncy rasan: Local cures snr are considered the functional currenciesoutside he United Ses. Assets Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States. Assets and labilefor operstioins oclcueneysnvionmentsarrsnslated st month-end cxchangs atoef she pri reports. and liabilities for operations in local-currency environments are translated at month-end exchange rates of the period reported. Income and expense eam retrans slated at monn xchinge tesofeach applicable th. Cunulative lation ajustnots Income and expense items are translated at month-end exchange rates of each applicable month. Cumulative traaaslation adjustments ar recorded 4 componentofaccumulated oercomprehnsise incom (os) shrehlders' cay are recorded as a component of accumulated other comprehensive income (loss) in shareholders' equity. A`AlClttuhhorouumggyhh Mfloaotcctaaellcrcusu.rrernehcneiciepessoararrieentsygppciicrallellymcseoonnossiifddeerrfeeodrdeaaigsntthcheenfaiunyncc'itioaonnrsatllsccuuarrrnescnicaeiessdoouut0tssbiiddee tthhheeatUrcinuittiedyd'SSatuatnteet,s,ouunnnaddelerrcAArSsSnCCc58y3300w,,hFFeoonrrvetihigegnn eeCpccuooernnrooermmnicoiyccrcmMceenovavirtnirtreooormtnsrmm,etetnhnhetterootefpifaaocrfftocinroaegrigrscnuhrsernnteitniptctryyyeicosefhhdaieiggtfhhohllreyyebiiginnnffelleaatntgiitooinntiayar'rysoy.npfaanrggereeneninpteeroinrsaraliallnlgsyygsuwwmphheeereidnnodti.totssbchceuusmtmhalauatlatetinivvstusietbyisin'nisffdllfiaauattnirioyconntiioiinssnsVaaplpeppcrnurooresrxeriinmmecaayttwelwilytyhhe11n0000the opoFpipeenrearcrnaeactntiiitannlgogrsiitmnnaccotoeormemmeeefnotrrrsetpeohfreepsttehhrenreetVienesgnyeleelezaesnrussselttthhahaanatnnspu11rbe.00scieppddeieerarrcctyeehnnetatbvooeefg3fibnMenei'snngcceoomonnefssaoaolslriiueddrpaaeotteedrdtdianoogpipfeeptreaasritiionntdg.iii3onnMccnooamhmlaees cffaooursrtu22nb00es11iyd6.i.awSSreyiinnriccneetVhJJaaetunnouerfazyrusyepla1a1 ,rw22e00nit11.h00,, the the financial statements of the Venezuelan subsidiary have been remeasured as if its functional currency were that of its parent. @60 22775500..00006600 TTabale oofbfCCoolmnetetensts i"TTthheehVVoeennleeszcuuuelrlaaennncgg.oovvSeerurncmmheenantttesssteatssndoofcfiiocnlidailrtriatotnesssohofafeeexxbcechahnagaenndaagc nnedd ccoono nddiittii0ooi nnbsseppsreeusn ceeeldetennttfot0ocphpaaunrrgccehh.aassIeen ffJoorraeeiiggrnn sc2uu0rr1re1e,nncctyyheaatVttehhneeesszeeureraltasens sCwgooointvvtheimrnlnomumcaeatnelinotctnuosarrnfoentnuohcnueync.cveSeidusdtcitthhngearatottfhehiesecaiNNnaaadlttiixcooocnnnhadaalintCCigoaeennnsetrerhrta,ffvooerrsibFFgoeonerirneefiiigcagannnndtCClcoyoommnemxtmiepneraurcnecedeteo((dCbCtEeEhNNsCuCsbOOejEeEXcoXt)ft.a)o,schhehaacaddonnasgdseacs.uruImnerendJdaenttyhuheaarorycotll2ei0oww1ni4itt,xhhtchrrheeeassVppneeegccnettetz1ouetthlhaeen cmmioenencdcthhiinaacunnaaiitstsimiomtnnhccgeaaollSflleItehddCeAtthheDeexIiCCsotroimnmapglpooelfefmefmeixcnecitnahatlaarenryxygceSShyawynsostgueemtldraffbtoeoer, FuFssooigerenediiiggffionhcraCCpnuuatlyrryrmreeenexncyptyasAnAldcceqtqduiditrhreeme0ucesmnaeto((ofoorranSSseIICcCaoAAnDDdiI1nc))vu,ersaartennmnddecniiytssssau.euecddItieeotxxncceehhxaaMcnnahggraeecnrrhgeseg2u0ul1l4aa,tiioohnness c`VinuVedrenrniceeeanzztcuuiyenellgeaanxnthcsgehooaSvvnIeegCremnAmmlDeaen1ntttroalltareuanoiucfnhenFexedccbharahauhtnaheirgiyreddw2ff0ooo1rru3eelidigcganbnleleeeuxxdcscehhtdheaennfggoMeerarpmmgaeieynccmahhleaannSntissiym,rse,ltaSStIoIeCCdfAAFtDooDYr,i2en,itwewgrnihnicaCctuhhirorintealinlactireynrv(errSesepItpmlMlaaAeccDneeItdds).ww.IinitTthhhlaeantenoSotMIthhMeaerArrcDhffoIo2rre0rci1tge4enn, wthaes sacdpuecprsrrcreroinivbbceeydddseaanxscbdhbeaepiniunngbggleiddpseehlrareiitdvfvoeebrddymfrtrhioonemmVFeeddbnairiclyuyraurppycrrili2vvn0aat1tCee5enbbctiiadrdladdlleeerdrBssatnhaakend.dMbbIanuurygMreiasnrrsaclxehxSscy2h0shat1en6mag,inntohgfegoFoVloiffreeeenrsinsgnetthhCtrroouauurgrgeghhnosacvuuyetthrh(SoomIrreM izzneeAtddsDsalIgg)ee.ncnTtt.esh.deTTaShhIiriMsseprAtlaaDteecIewamreaasntsetowfaists lapppirrepemffrieoernvcenneneidtiadaallniCtCdsEEpSNuNIbCCCliAOOsDhEEeeXXxdcbrrhaytateenthgwweeiitVmthheeTncTeiihpzooauenddleeian:CCaCammaebndbitirooarlPePprBrlooaactncesekgid.iddIinos(M(SDDIIaIrPMPcRARhODO2)I0),r,1tdd6e,seswtechirretiibhVbededTnaiaeszoauavedvaelaiailnClaaabbgmlloeebviaelarornaCgmoeylemynfptofloreerefmfeenssctsteaesndrtiiaaaolreii(mpmDplpIaoocCrertOtmssV:;)en,t of its ublishod by eliminated itshSeICVAeDneepxlchaanngCeenmteaclhBanairskma; nadnddersecprliabceedda5itsfSaIcMhuAtDinIgraitnerwtiethbaTsiepdo odne supply and demand. Cambio Complementario (DICOM), published by the Venezuelan Central Bank and described as fluctuating in rate based on supply and demand. "TiTnhhteeo ffMiannraanccchiia2ll0ss1t4tatteehmnetnSstIsCooAffD3IMr'stT'seVVebennieearznuueiellnaagnn nsswulbbssciiddiiMaararyyrcwwhee2ree01rre,emmteehasesuuSrrIeeddCAuwDtiSliizrintneg btthhgee iooffaffiincciinaaillgnCCJEEunNNeCC2OO01EE4XX, o(aorr iststepprreeDddIeecCceeOsssMsoorrr))trtaetoer iiiitnnstcoSlSuIIMdMiMnaAgrA.cDhDbI2uppt0rr1meo4odc,teetcmhseessesoSordIrC))bAbetoeDg,gi1inhnenrneaiixtnnecggbhiieanngniFFngeenebbirrntuugaaerriynythl22ae00tC1e15o.5Mm.3aMp'M racshn'syu2us0ss1eeV4sse, onotfehfzetthuhSeeelIsCseanArraDestue2sbssrwwiadeteierraeebryebbgaamissneeynddinuulgpepgooiannnllJeeyuvvunaasellueu2at0t0ii1ooc4nno,nooavffnedratb nthcuemrDbnIeCr,oOofr fM ffsaclrcaettosrers(or `rtirnaCacnonlsmusapadcacitnntiigyoo',nnsbssounotranppoteatyylaiddnmidivvitiiaedddbeenintoddt,ss;to httheheexppcrrs aohopbaabnarabgtbieie llcirtuyayltoaeorfftheaaexccccCehesoasisnmignnpeggamnaaeynn'cddsohboVatbenatnaiiienn.ziiunneOggltcachnuuerrrserueanbnctscyoiydribbasyyrynusomsteewaioyotfhflsaeatgappanaaldrlriyttniicgcuu.uslleaarrrteoramacettoesnosovrreemmrmteeecccnuhhrtaraeninniscmimy:p,; saaaenntocdtdfltettthhhseee Company's intent and ability to use a particular exchange mechanism. Other factors notwithstanding, ccohnadnigteisonin uosf heese xchange rte did not hae materi] impacts on IV's consolidated elsof changes in use of these exchange rates did not have material impacts on 3M's consolidated results of operonosr fancil remeasurement impacts operations or financial of the condition. "eTTxhhceehCCanoogmmeppamanenycyhccaoonnintstinmiusneumsteatosoymmocnoointiitoornr iciiurncmtushmeasnTtuaetneucses.s TrehlseastteiivheoitontgistessVVceeonnueekzzduueeillmaapnnacsstuubbtshsiieddiiaaartryey..oCCfhheaxanncggheaessngiinen aaapppplllsiicseabablbleee efeoxxccrhhmaaennggseesrrrtastestshooerr CeCdoxomcamphaapnnbaygnseya'msnneencoethctfammnnoeoitnsnemetmtsaoarnmryyesatayaserscyeosatnstti(inlisuaaebidiiellninteitoehm)sei)dnfdueaetntunoeromedmi. niTinanhatVeteesEdedFciinnhofaVVneeegnsneeesrzuhcueoaelunlaaldnn1.iBB5moobpillailvaclaitrortsnsheV((VVErEaEFEtFe)a).o.nAfAdsestxohocefhfDaDDnIegePceRecamOpebpaelrnirdc3i3a1D1bb.,lIe22Ce00t1oO1r66Mr,e, methhxeeeacCCsuhoormamepnptahganeneyys whaedrapbraolaxnicmeaotfelnyet 10 VEFad 670 monetary assets dVeEnFopmoirnaUt.eSd,indoVlEaFr orfeslpeescstitvhealny.1.5 billion VEF and the DIPRO and DICOM exchange rates were approximately 10 VEF and 670 VEF per U.S. dollar, respectively. AdAennnoeomedidn1t0aodtedecedocanossnoshollcdiodauatpteeltethdheeiCCtohommpaapnnasyncy''ses VVdeeenngerezzduuaeetlliaaonnnssuiubsbhisdeidiiaaarryby''iss oorpoaermtaiatiokonenskmemayayoypersersalutiltonffrsoo]mmdeaclilasaiccokknosoffdeeexxccohahgnagonevaegbriemlisetyntooffeVVlEEaFFt--ion odiinnnentVVhoeeemnneCienzoraumteepelad,an.cy33a'MsMhammcbooouninpiilltteoodrtrosmwffaaiatcchnttooaarrnssgasscuutuccsthheVaadesneitgetszsrauabdebaliitaliionltyns1tuion0bsaatihccdecieaesarsbsysilvvistaaycrraiiotpouiutssmaleeaxxksccrehhukaacentnyuggreeo,pmmepeerucacrhtcihaohnaanisansilmindgs.e.;cttpihhsreieoodiinummscpptdapaucrcetitcotoioffnggggo.oovvaveenerrrdnnmmlmeaeebnnontrtt rrrreeeelgglauutalliataotitiniooosnnnsss caoaonnnnddtthitthheneecuCecasoumrtnropetcnaont nypps'oislltiadtibiaccialtliletysatnntsoddVmseeccanoanenoaroogummeciilicctnstsVistuuueabnttseiozioundeetwl.ahintihAsinsnuboVVfsDeiendeneieczazureuyemle'sbala.ce.arBBpaia3ts1as,eeldd2stu0urupp1coo,tnnutrssheuue,bccpahhulffraacancchcttaooesrrissonfgaas,nopeofrrfDocDdeouecmcceptemmapbrnbieycerirnr3g3e11,c,,eai22nv00da11b6l6la,e,btstohhdreerCueColoarmtmoipopmanansn;yy {hciosnstiunbuessitdo ecoannsodlitdsatie titsyVbelnaeznuceslwaenrseunbositdisairgyn.ifAicsanot.f December 31, 2016, the balance of intercompany receivables due from this subsidiary and its equity balance were not significant. Reclasifcaons: Cerin amount in heprio year' consldated nancial ssements have becn reclasfied o conform othe Reclassifications: Certain amounts in the prior years' consolidated financial statements have been reclassified to conform to the Curent ear preston current year presentation. mUUsaseneoaogffeeemsstetiinmmtaat0teess::maTTkhheee ppermepapaatrrseattsiiooannndoosffsffisinuacmniicaiialolnsssttaahtteemmaeeannftltsts iinn hccoonnfrfoeorprmomriittteyydwwaiittmhh UUo..SS,u.oggfnseenneteetrrasslalylanaaccdccieeppltteeiddeaascsccosounandttitinhgegdppirrsiicnnlccoiisppullereses eroefiqunieress management to make estimates and assumptions that affect the reported amounts of assets and liabilities and Cohnetirnegpoernttisngepetriosd.ndAsctuialtresuealts thceodukad ioteftreh fnoamnctihasleiesttimeaters.a,nd hereported amountsofrescnse contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues ndthe and expenses ding disclosure of expenses during the reporting period. Actual results could differ from these estimates. CCleaassshhwahanendndccaaacsqshuhieerqqeuudiivvaalleenntts:: CasCash and and cash cash quilts equivalents consist consist of cash of cash and and temporaryinvstments temporary investments with with maturiotf tihers maturities of three moth months or or less when acquired. Marketable secure The dasificatonofmarketable securis as crrnt ornon-<uret ibis a the atureof he scuris Marketable securities: The classification of marketable securities as current or non-current is based on the nature of the securities and valifor ve incurrent operations. SMrevs impaientssvciated with ts marketable secute in cordance ith and availability for use in current operations. 3M reviews impairments associated with its marketable securities in accordance with the measurement uidanc providedby ASC 320. ImeDsebtaindmEquieSencurtes when determining the classification of the measurement guidance provided by ASC 320, Investments-Debt andEquity Securities, when determining the classification of tmh pi a3 "tempoo"roathrry" han-temprsny". A tempore mim the impairment as "temporary" or "other-than-temporary". A temporary impairment a61 22775500..00006611 TaofbColnees Table of Contents har els nam unrealized Jos being recorded nthe thecomprehensive incom componentof sharsholders equity. Such an charge results in an unrealized loss being recorded in the other comprehensive income component of shareholders' equity. Such an reals oss dosnot rdce et income Fr theapplicable accounting period because te ss sn viewed satethn- unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-thanTemporary: The fctorsealuted to lenis betwecn temporary and thrthn-erporay nlade the projected ture cash temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash hos, credit tingaction,andsessmentof he ret uly ofthe dering colle. a well aater fcr. flow-s, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors. IIanelvseetsnmtvmeenesntitsms::eTnIvtnesvseaisrtmmerenentctsosrppdrreidimmaatariiilyy iinvancllcuuedl.eUcenqituteitayyizmmeeetdthghoaodid,n,s ccoaosnsttdmmleeottshheoosdd,,raaenntddiaanvvatiolaacbsllet-ffmoorrn-sstaalsleeeceqlquauisisttiyyfiiienndvvaeessattmmeevnnttass. AAivvfaaoalriblsablabelll-eef-afoeorrre-recordaed component of accumlated thrcomprehen income(los) in sale investments are recorded at fair value. Unrealized gains and losses relating sharchodes equity to investments classified as available-for-sale are recorded as a component of accumulated other comprehensive income (loss) in shareholders' equity. Othe asst: ther st include dered incom aes, productad heinsane eseivabls he ssh surnder valueof fe Other assets: Other assets include deferred income taxes, product and other insurance receivables, the cash surrender value of life insurancepolice, ad the long.fem ssc. Insets ns insuranacre reported t the amount hat oulbdrelied under insurance policies, and other long-term assets. Investments in life insurance are reported at the amount that could be realized under contact the balance sheedai, with any changes in cash surnder value of contact valve durin the period accounted f5oa contract at the balance sheet date, with any changes in cash surrender value or contract value during the period accounted for as an adjustment ofprem paid. Cosh uillows ad lowsassociated ith if suractiv ar included in "Purchases of adjustment of premiums paid. Cash outflows and inflows associated with life insurance activity are included in "Purchases of marketable scuriis and vestments" snd Proceeds from mattis andsole ofmarketable securities ad nesments" marketable securities and investments" and "Proceeds from maturities and sale of marketable securities and investments," rpctively respectively. Intoric:avcatraies sae at the lowerof cot ormarket,with cost generally determined on fs, fitout bss Inventories: Inventories are stated at the lower of cost or market, with cost generally determined on a first-in, first-out basis. PPrrreoocppeoerrrttdyy.ea, dtpplcaonstlt.aaDnneaddpereeqqcnuuiiipaptmmiteeonnntt:ofpPPrrroooppeeprretty,y,,pppllaaannnttsannndddieqcuqniippemmeetnntt, iiannccclluruddaiinnlggccaiasppictiotaamllpiizzueetddediinnstteirrneesgstthaanneddseinritemrgnaalhl ectngignitnceeherridinnggcbcoaossstetsds,,oaaarreethe recorded at cost. Depreciation of property, plant and equipment generally is computed using the straight-line method based on the cSexairsm,atweidthwtchlelmaijvoeristyofitnhtehaesr e. oThfg etwceintaytedfvorstfyuylearvse. oThfeuedstiinmagtsedsunsdefiumlpirvoevserocfmatascphriinmaeryanndcgospfrronafnprfiomfaorrtyy estimated useful lives of the assets. The estimated useful lives of buildings and improvements primarily range from ten to forty ayrraneanadnggrsseec, cffwruroiomtmhmultthhhteereedemedateojporffrieifltctyieeaeietnniotyyheneaeaarrsrcs,ac,nowwguieintththosftththuweenemmlnaatjydjooirtsrioipttoyyfsoainrnltyttUhyhpeeoarrrnaasnn.dggTieeoshopfeofesffsaivtleiemst1eaottetesednnunyysedeeafarurlssl..tliFFvuudellsllyysoedfdecempupramreceuchcliiiatantteeeerdddydaaaesnspsdresetecseqiataaurrtsieipomrsneteiaanrintneepdrdreimimnnoarprpircrlooydppeerrttyy and accumulated depreciation accounts until disposal. Upon disposal, assets and eTqruoinptmheenatccmoounutnntdrsetrhevnitewaemdoufnot,peasipnrotcewdhsenfervoemrdeviesntps,oisschhaanrggeesd ior from the accounts and the net amount, less proceeds from disposal, is charged or crcceirrlreeadcdteiuittdmeesdadtcta0conuocompepeueirlrnaaadttteiiiodconantds.e.epPtPrrreeoocpptieearhrttitoyyc.n, appayllraieanntrtgeaamnnaddomvoeudnt of aeeannqusaxispesmectteh((neaetasawsemeeesttoggiudrrmnooatuutssppea))drmemnadrayeyivsnmiceoowtotbuebetdeeefrdcoeocrfnoiemvrrepaerbaaclbirelame..eAAntnfnlwoiimhwmseppnaeaeixivrrpmemerecententevtdeolno0tsssseowwrsooucluhlladdfnbbgoeemsrreteincchoocguginnsrciiezuzoeemfddtshwwteahhneecannessththienecadcniaacdrrarttiyesinnthcggvateamnmtohuuoeaunlcntadtriroosypfiofnasngitaaiasosmsnse.eottuTnhteof exceeds the estimated undiscounted future cash flow-s expected to result from the use of the asset and ``nmcrolluyofndehtteermmpianiedmeusnitngosdisrceocourndteedd casshefulolw eanablyyshiesexcessof he at'scrying ala over amount of the impairment loss recorded is calculated by the excess of the asset's carrying value over isits its fi val, Fe valu eventual disposition. fair value. Fair value isThe is generally determined using a discounted cash flow- analysis. Condasie tetipiemeontobnligaatiolns: A ail snl recorded at fi ale fo an set irene obligation assoined Conditional asset retirement obligations: A liability is initially recorded at fair value for an asset retirement obligation associated `withthe reiement oftangible long ved assetis the pei in whic iis inured ia resscnable estimate off value canbe with the retirement of tangible long-lived assets in the period in which it is incurred if a reasonable estimate of fair value can be made. Conditional ase etirement ligation exist for certs ongasstoftheCompany. Theobligation s niall made. Conditional asset retirement obligations exist for certain long-term assets of the Company. The obligation is initially measured a i valu wingexpected presen value echigues. Over im the ibiliis aresccetd or the change in thei present measured at fair value using expected present value techniques. Over time the liabilities are accreted for the change in their present lugand the iil capitalizedcots are deprecatoerd tho remaining uel ivesof he related asst. The set erent value and the initial capitalized costs are depreciated over the remaining useful lives of the related assets. The asset retirement bligaion aii was S11 millon nd$102 millon at Decemb3e1r, 2016 and 015, espectinly. obligation liability was $111 million and $102 million at December 31, 2016 and 2015, respectively. Goodwill: Goodwill th excoef sosstofan acgired cy ver heamounts assigned10assetsaid nd ities assumed Goodwill: Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in business combination.Goodill snot amoried. Goodili estd fo muiment annually nthe fourth quoaf ich year, in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually in the fourth quarter of each year, and iteilfo impuirmnt betwee annual esi a cvoceursof irumsancchaengs tha would indicahet caring. and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying ammoaybuemnuitr. Ipaimen sting Forgoodwill donest reporting unit el, ith llgoodill signed 3reporting amount may be impaired. Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting nit Reporting unitsar on evl below the busines segment vel,bt anbecombined when reporting units within the ame unit. Reporting units are one level below- the business segment level, but can be combined when reporting units within the same Segment hve similar cconoic shasta. id notcombine any of rporing wis for paca esting. An segment have similar economic characteristics. 3M did not combine any of its reporting units for impairment testing. An impaimentlossgenerally woukd be recognized hen hecarrying amountof the reporting nine ass exceeds heestimated impairment loss generally would be recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fir vlue of he reporting wit. The estimated fi valuofa rporing wit is determined singcamings for the reporting unit fair value of the reporting unit. The estimated fair value of a reporting unit is determined using earnings for the reporting unit lipid by arcs camings ti or comyerabi ndusty groups, orb using discounted cash flow analysis. Comics have multiplied by a price/earnings ratio for comparable industry groups, or by using a discounted cash flow- analysis. Companies have The option firs sess qualtatin ctor fo determine heththe ir alu of reporting uit no "more cy th nc" ss the option to first assess qualitative factors to determine whether the fair value of a reporting unit is not "more likely than not" less than ts arming amount, which than its carrying amount, which @62 22775500..00006622 TTabale oofbfCCoolmnetetensts iscommonly referred 0431p 0 3MHas chosen ot 0 apply Sip for 2016 or por period smu goodil assets is commonly referred to as "Step 0". 3M has chosen not to apply Step 0 for 2016 or prior period annual goodwill assessments. Intangibleass: nangibleasst pos inchudecustonnr related, tents, chor technology-based, tradenames snd othr inaible Intangible assets: Intangible asset types include customer related, patents, other technology-based, tradenames and other intangible ast cir from an independent party. Intangible sets ith dete fe are amortized over prod ranging from oe 1 assets acquired from an independent party. Intangible assets with a definite life are amortized over a period ranging from one to twenty yearsan systematic and rationalbass (ener sight ine) thts rprescatatoifv he assetsus. The simated uso twenty years on a systematic and rational basis (generally straight line) that is representative of the asset's use. The estimated useful Hivesvayby category, wih customer ead largely ete seven 1 seven ears, pats largely between ive 1 hte lives vary by category, with customer related largely between seven to seventeen years, patents largely between five to thirteen year, othr eshnology-based largely between tofofle srs, definite id tradenames arly between thi ad twenty years, other technology-based largely between two to fifteen years, definite lived tradenames largely between three and twenty Scar, and ther tables arly between wo to ear Cots elated 1temaly developed tangible ats, scah years, and other intangibles largely between two to ten years. Costs related to internally developed intangible assets, such as tes, ar expensed a neared. primal in "Rescarch,delopment and eid expenses" patents, are expensed as incurred, primarily in "Research, development and related expenses." Intangible assets with dfnif ar ested ormpm whenever eats o circumstances indicate ha thecrying amount Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount Faas asset group) may no oe recoverable. An imeiment oss s recognized when he caring amount of an asst exceeds of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds he cimatedundiscauncatsdh flows ved in determining th is valu of th asset The amouofntthe pint loss esorded the estimated undiscounted cash flow-s used in determining the fair value of the asset. The amount of the impairment loss recorded iscalculated by he secof tshease' aryng alas aves fi valu, Fe valu s generally determined ving disesunted is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash low slysis cash flow- analysis. Intangiblesetswitha indefinite namely eran tradens, are not more. Indefinite ntngibleassets are esd Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Indefinite-lived intangible assets are tested for impairment analy nd ar std or mpenent between sual esiftan event curs circumstances change that would for impairment annually, and are tested for impairment between annual tests if an event occurs or circumstances change that would indicattht the casing mount may be muir. An raiment lows emery would be ecogad when he Fi value ess indicate that the carrying amount may be impaired. An impairment loss generally would be recognized when the fair value is less han the caying vaotf tah nde dvd inngible ase. than the carrying value of the indefinite-lived intangible asset. RRceoenssttrtaucrcttaurriminingnaaattciitoioonnnscs:o:sRRteses,sttnrruudccttuuirrmiinpnggaaiaccnttniiootnnosssggeaennrcearlarlllyiy iidnnccldluueddpeeressiicgginntiiiffiicccaasnnmttoaarcctttiizootnnissoiinnnovvoofllvviincngtgesemmspoplcloioyayeteee-rdreellwaaittteedhdssseuevcveherrsaaninccneescc.hhaarrggeess,, contract termination costs, and impairment or accelerated depreciation/amortization of assets associated with such actions. cEharlgeessoeelrayetfeldctsdevierahnecequcahratsereswhaeenatrhlayctiboansseadrueppornobdaibslteiabnudtdtheemmpoluoynmtesnatrpeoelitcinesaan,d swhuibcshatyivee saevesrahnceenplans. Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans. These: These ocmmhnaaadnnraegaggefeseommaeerenenitrtenaafppleppbcrretooenvvdeeefsisinttththheaeteaahqssssuoioaccritieaaetrtreemwddihnaaaecctnttiiiooothnnnsesd..aatcSSetesieovwnevrsraeanercreecpaasrmmosoboauaurnbnotltedss affaonohrrdwwthhheidiccaehhmsaoisfufulenctcthsteebaddreseemmnepspiltilomowyyaecerbeeclseo,wwmweemhrrueincerhieqqctyuaapitrrieceddadltloyotrriseehnnweddheesrerpnsspeelrvcvibiccleeeiinn order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable `prpimalriolyyeeledctreccoostgsnifzoeed emxipetnsecoonvtratchpblefooryeethee'ndreomfaitnionrgnse(vmiecaesupreerdiaods.fCionvtarlacetatterhmeitniamtieotnhnedCotmhpanhyaprreovsided employees and recognized as expense over the employees' remaining service periods. Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided onteclootthheecCooumpnatne.rApsosaretrcoitsm)tpatihamtewnitlcchnatrigneureelfaotebde1inctuarnrgedibulnedaesrstehts canodtpreopfeoryispleanntiandgeqeipmmewnittheoultecctcheme:xecs notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic oftheaes benefit to the cComaparnvyar.lAueysseotieimrnptahigerimrFeintrcvhaalrugees.s related to intangible assets and property, plant and equipment reflect the excess of the assets' carrying values over their fair values. RRheaesvveennnouuemeat(sselarlieeassl)crreecocooggnnnitietiioocnn::tTTohfhieeroCCoeonmmippaiasnnky.y sRseeellvlslesnauwweiiddiseerrreacnogagenoiofsnfpeprdorgwoddhucueetcnststht1oe-3sa kddisveiarnsdivfiredebbaase rseeooosfffcnacuieussrttoosfrmmheierirpssHsaaearrvooeuudnnsddubttshhaeenwwtooilrvleddyaanndd rCthraoaasnmnsnpfotaernmeryedadtretetrooicaoccluracsdsottoniomcmmeeenarrts.r.taTTtehiohinisescoccofontncdiridetiodtiioinotnnfroirnmskoo.errmRmvaaellvleyeyniiuosfemeriesetctroewwrcdhhosegenenxittzphheeeednsrpwerouhfdeounccctthuhhesaasrosibsmbkeeoseernnaanddnddeelrideevwierraseerddtsooororrfuuponowpcnneeppirevserhefiosrpr,mfhpaarovniecmreasorumoifblfassysteearcnrnvovitcmiiccvpeeeerss.liy.sTTehdhee Company records estimated reductions to revenue or records expense for customer and distributor incentives, primarily comprised oefvroenbuaeteRseacnodgnfisiong.ooThedesas.tihmsitmdeorfehednutcoitfsiraelo.venTnhuseesfeo lresbatceeanrivbasseadroancchoeunstledsfromr,sheicstoornicdael ewxiptrhiAcSncCe6r05e.nd of rebates and free goods, at the time of the initial sale. These sales incentives are accounted for in accordance with ASC 605, Raneavleynsuise and jected Recognition. programs aeedvary analysis and projected mmaTcaharrerokkseeeststtBiccumoosnnianddteeiisdttsioiersnoe,ndsuinbnctttitohotenhsevvaoaorrfiisrooetuuvsscemmnouamaerrmkkfoeoetnrts rnsseeecbrrnavvteteedids..vaeSSreiirnnebcclaeeasttteehhdseofoCConooamtmhpepmaasnnaylyoesesseetuerrdvrvmeessnss,nnuuhetmmisdeteorirsrooiuucasslm0maeraxckrupeksetetrstio,sem,nettchrhesee, trend rorate rebate apacSochrlohiegisee,rvvaimiunnsegsg, dodevfeffafeilirnnueeeeddd-avvvdaoodrleyludumamnceerdolesevstveeblhlusesooirnerxeggcsrrisotoewews,ttthhbeuaotsbbtjjheaceceitmivvnsooet.sst. common incentive relates rFerceoegngiozoeddsareavceconunt Free goods are accounted for aan expense snd recorded costofsls to amounts paid or credited to customers for for as an expense and recorded in cost of sales. Sales, use, value-added and other excise taxes are not recognized in revenue. "dTTehhleeivvveaarsysttommfatajjohoreriitptyyrooodfufMc3t'Mosr'sspsalelerssfaagogrrrcemmemeaonefntnscttsheeaarrseevffioocrress.ttaaHnnoddwaaerrdvdepprrr,oodd1uu:cc3ttssiaamnniddtessdeesrrvvxiiiccneestswwiMtithhhccussitocommoeerrraasecccoeppastnagcnrcceeoomcencctusurirtinhnaggt upnpoooinnre male delivery cem(sceh nqtuisp. of the product or performance nosfathleltseornvicsen.dHsoevwiecvee)r., sofware, oon sandad emsadconditions. to a limited extent 3M also enters into agreements that involve multiple elements (such as equipment, installation and service), software, or non-standard terms and conditions. @63 22775500..00006633 TaofCbonses Table of Contents aFFlooorrnnneoonan--lssouofftowttawhraeemmcuuulsltitoippmlel-er-c,elleeemmyeennthtaravraernabnggenemmecencntets,p, ttthhdeebCCyoommhpepaacnnuyystroremececoro,ggnniaizzneedssfrroerveiecncueehffootrrheddreeelliiavveeecrreerddyeelleecmmuesentntotsmsawwryhheerneftthuheneydy ohhfaavvreetsstmiannddToarfiilrgoghhnctteass..cvhAAarlrdurneealgnitegovneetmmhrseeebnncittucsctooobnsmasisieddereed, roatahtnteiooyvnnehniaxsdvaoaelrlllb-ooescceeaanctteeiaddfccctfoeoapthbtheejeddcedtbleiyliivvtvheecervraicbbdullesenetsocbmbeyy(eruiV,seSaenOoodff)tftohhirfee wrarveehalliaiacltthaiivbvtleehese,seerltelhlliiipannrgaegprporritniclcyyee cemmuveesitttdhoheomodnd.ca.eryTT(hhrTeeePfEsusee)nlildllfiinonVggrSrppOeritFiuccreniussseneoddt aCfaoovvnarasiieillaasbctblheleen,dt,oesowlriisvteeihsrtmtaimhbaalatettesidsdebdssaees1llleiidnnsggoanpprrlviiceceinidfiefothnrte-eshirptehieeccrriefViVc1SSoOOsbeEEjlecnnhtooeivrdreeTTlePiPvEvEiediiresanaabcvvleaaeii(llVoabblSaelOe..sEEti)asimntfidmaalvaotatnieeledabasslseelsl,il.itnnhggiIrdpp-arrpicdacerdtisyos neddveeit1tdeeerrhmnmeciiennpee(rddTePciinneEda)inimmfgaaVncnonSnneOedrriEtiiosnns,ot consistent with that used to establish the price to sell the deliverable on a standalone basis. In addition to the preceding conditions, oqruiinpsmteanltlaeionnuies siesnntoitarlectoortdhedfunnctiohneltnystoaflathteonqbuaispbmeenet. cnosmptlleltaeidoinfeeuinpnuenerteccneotraenccoerdeddneplendiennsttalplaotnionshtaaslbleicon equipment revenue is not recorded until the installation has been completed if equipment acceptance is dependent upon installation completed. or if installation is essential to the functionality of the equipment. Installation revenues are not recorded until installation has been completed. SFFioogrrnaiafrircaanmngtepmraoednutcstmi(ooornr,ppgoormrtotiidooeinnscstooifnfoianar,rnanogncegumesmateonemtnisttzs))altfaiislolninng,g wweiittvhhiinnn ssfoooffrttwwcaaarrceehrresveenonuefrroeeccrotogsgnonifwitttiiwooananrsestaerannaddaeiarrdddsscnalneddmettnhhtaatt ddoorenocoottgniininvzvoeoldlvvhee en significant production, modification, or customization, revenue for each software or software-related element is recognized when hclercCaotms.puWnhyehnushVe SaOrEaogfmtehntisrvvoallueofsiagllioifchanet pdriodvucetirosn, mcoedmiefinctastiaonnd ospcpulsitcobmlizaftiron,aloha.vfebmocomnesifortchtydoeplenivered the Company has VSOE of the fair value of all of the undelivered elements and applicable criteria have been met for the delivered aeclecomunetnitnsg. Wivhoenhithnegarprraonpgoermtieonntss perfomance is sencaly posed. involve significant production, modification or customization, long-term construction-type accounting involving proportional performance is generally employed. For pope servic contracts sles esc s esognzd oa strght in asson th em ofthe contactunlesshistorical For prepaid service contracts, sales revenue is recognized on a straight-line basis over the term of the contract, unless historical evidence indict th cotar ncuron other than stright basis. cen foe fevente is recognizedas camed, and evidence indicates the costs are incurred on other than a straight-line basis. License fee revenue is recognized as earned, and no revenue iogaized wnt he incepin ofthe ices em. revenue is recognized until the inception of the license term. aOOnsnosocecccanastsiio,onn,,aaanggdrreedeeemmpeeenntntssdwwiionilllngcchoonenttaasiipnnecimmfiiilcleess,sttooSnnNeess,,mooarry33rMMecwowigilnlllizrreeeccrooeggvnneiinzzueeerreeuvvpeeonnnuuceebobamasspeedtdooonnn pporrofo4ppoosrruttbiisootnanansltpipveeerrfmfoiorlmmeasatnnoccneee., FFooofrrittnhhessee Proportion costs incur agreements, and depending proportion to costs incurred datcompared with heestimatoef al css fo be incurred. on the specifics, 3M may recognize revenue upon completion of to date compared with the estimate of total costs to be incurred. a substantive milestone, or in ACAoccccmoopuuannntetys rmceicenietvsabiilneaaanlanlddoawablalllnoocwwleaasnncfeceoerssb::aTTdrrdaaeddbeei,aacccccooausunhnttdssissreccoiuenivtvsa,balperasordeurececcotrudomedsaatnt tdthhevaiinrnvivooeuiiscceetddhaaemmooeuunnnstt.asnnTddhddeooannloolotwbbaeenascreinnoetredsretstu. TTbhhee aaCacncoccdmoouaupnnnatitnscyaianpmntddaeippdnrrtosaodlinuuescsetatlrrleueottrwuunrrann.nssciTiesshbiefasoCsreeodbdmapaodnadnttehyhbeetsdbb,eeetcsseatrstemhsiitdnmimieasscattoteehuenfoatfls,lthhopewroamadnmoucuoceuntsntrbetotaofusfprnerpsoroobanbanabdhbillvseetaorccririorecuiadsltitowlltrohoisetssrees-isoetiefisnmf eesexx.xpiiTessrthtiiienengngacalalcoccwcbooyauuninncnttesdufrrsoeetrccreedyiiovsvuaanbbbdtllfeeul and anticipated sales returns. The Company determines the allowances based on historical write-off experience Croesmipoannlyecdooncosmnioct dHaavieasnndyhsiisgnriifiaclanstloefsFr-eblsa.ncTshhecCtocmrepdaintyexproesvuireewsethte dall10o1swcanucsetoormedrosubl accouns regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monly. The by industry and monthly. The Company does not have any significant oft-balance-sheet credit exposure related to its customers. AA3d6v8dermtiibslinlgoeananniinddm2me0sre1cr5hcaiahnnaddnni$ds4iis0ginn7gg::miTTlhhieeossneeciconoss2tt0ss1aw4ree charged10operations charged to operations iin hethe period period incurred,and incurred, and toled totaled S385 $385 million million in in 2016, 2016, $368 million in 2015 and $407 million in 2014. Resarch, devealnodlpemdeexpennsets: Tescaore charged 1options i he period ncured andarsshows ca Research, development and related expenses: These costs are charged to operations in the period incurred and are shown on a separatelin ofthe Consoldted StateofmIencnomte. Research, development and related expenses totaled 1.75 bilo in 2016, separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.735 billion in 2016, $1763 billion 2015 and 1.770 illo in 201. Resear and delopmentexpenses covering base sienific escarch and the $1.763 billion in 2015 and $1.770 billion in 2014. Research and development expenses, covering basic scientific research and the applicationofscicntiic advances in th declopmoefnetw nd improved products sd hee es, totaled $1225 billion in 2016, application of scientific advances in the development of new-and improved products and their uses, totaled $1.225 billion in 2016, 1223 illo in2015and 1.19 bilon in 2014. Related expenses primary include ecical support temlly developed patent $1.223 billion in 2015 and $1.193 billion in 2014. Related expenses primarily include technical support; internally developed patent costs, which nclade cots and ss incurred 0 prepar, Fl, scurc and mins ptt amortiozfaextiimaolny seired tents costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents `nd xtemall scien process esearch and devopment and ain oss aoe ith crscorps approved and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in RE lted snaressuchas equity methodefits ad mpm. investments in R&D-related ventures, such as equity method effects and impairments. Inermalase sofware: Icnatperintaall-uiszeaersedofatmwoarrtei:z eTTdhheeovCCeoormmpppaanrnyoydcsoaapfpitthallriizczess idirsreeecttnccoyseatsoroso,ffsgtseeernrvevirsicaceleslsy uuassendda insttthhsee gddehvteenlopvbmseesntoulonfflneionsrtsemrapnanatllm-hsuesereesssoonfyfttwwatmarree,. AAsmmnodouunnttss capitalized are amortized over a period of three to seven years, generally on a straight-line basis, unless another systematic and oarticoanpiatlbalsIisiss mwoitrheinreprpopreertsye, nptaaonttfiavnheed spoifptewatr.eu'ses. Amounts ae reported asa componentof thr machineryand quip rational basis is more representative of the software's use. Amounts are reported as a component of either machinery and equipment or capital leases within property, plant and equipment. ECEumnriverirnootnnmomerenfnatalat:l:eErnviveriroonnnmmeaenentrtaalelxeepxxeppnesenenddid.tituurRreeessserrreevllaeatstiinnfgogrxaliens to existingeccsoontndedidittfiioooannssnccaacusseeedddbbyyeppmaaesstdt iooptpeierroaanttiioocnnossnttthhsaattrddoeocnnooortdcceoodnnttorniibbsuuntte 0to current or future revenues are expensed. Reserves for liabilities related to anticipated remediation costs are recorded on an hdeisCcoomupnatneyd'bsasciosmmwihtemnehnetyoasepplraonobafblaetiaonnd orreaaspopnrabolvyalesbtyimraebglue,lagteneeraaglelnycineso.ltr than the completionof cay dics, undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company's commitment to a plan of action, or approval by regulatory agencies. o64 22775500..00006644 TabeofComets Table of Contents Environmental expenditures for capital jets tha contiobcauretn or ar options gral ar capitalized and Environmental expenditures for capital proj ects that contribute to current or future operations generally are capitalized and deprcioted ovethei estimated wcll es depreciated over their estimated useful lives. IIinnncccooommmeee attaaesxeesss::rTeTphhreeespperrnootvvihisseiioonenxfopoerrcitinencdcootmmueertteaxeaess sics ddoeettneerrsmmiienneeqdd ouuussfeiintngenmttpchhoeereaaarsssyssettdaainnfdfdebrlieanibcieltsitybeaaptpppwrreooseacchth.h.eUUanrndydeirnetghiraissmaaoppuppnrrotoasaccahh,n,dddeeaffeerrbreeaddss ohionffecaaiosmssreeestasltaiaazxnnaedbdsilliriieattpybriieelxisetiiesesntsst..tTThAhehSeeoexCCfpooeDmmcpetpeacadnneyfymutrrbueeerc3ceor1ort,darxsd20sac1ov6nlaasluuentqaditui2oeo0nnn1c5aae,llsllootowhfweataennCmccoeepmotporaarrnreeyydduduhcicfeedfeiirtvsseadnldfcueeaeftserirboreneedtdwltlaeaoexnnsaatsnhscseeetcssaowwrfrhhyeeSinnn4g7uuannimccleeorrluttanoiatnsiatnynandrrdee3ggta1aarrxddmbiinianglsgilson their realizability exists. As of December 31, 2016 and 2015, the oonissddficeornesdwiathcabsl,e rleosupecctairvyelyf.oTrhdesinhcrtearseefenxspaelcutteidotno on its deferred tax assets, respectively. The increase in valuation aaxCllploolmiwoepawanapncnryeicahoaetattdDDoevewcacileelumrzaabtbtieoeorrnn.33a11Tl,,lho22we001a1Cn66ocrrmeeespllaaoatntefeys$4ttor7o eccmeceriltorlaiigonnnntiinaentnzedmrdena$a3tmt1eiooamnnsaulillrleiosn Hance jurisdictions apostion with taxable based on th ules loss carryforwards under ASC 740, come aves that are expected to expire prior to utilization. The Company recognizes and measures its uncertain tax positions based on the rules under ASC 740, Income Taxes. Ea`haarmneinsigtsinppbeeurrtgssshhbasalrero:e: T3ThMheecddoiiffmffemrreeennnccsee hiinrthhseehwwleeidiggihehttreedhdseaavveerearagsgeeo3f3lMhesshhdaairrteesisoconuuitssssttaoancddiisinntggefdfoowritcshalltcehuwelaiCtinonggmpbbaaassiniccyaannsddocddkillubetaedsdecedaacrrnoviminnpggessnsppaeetrrion pspilhlnaaacnnrsles.a.adCCtdtreririabtniautintnhaeobcoploptemititpooonunst3saMcotuuictsosoantmannomdfdiioinntngesuuhndnadrdeecehrothalhederessreesvspsistioeoctrchnkkes-hgbbraaearsssseueedldat iccooobfmmotphtpeeeandnsbisaleauttititioooonnn3ppaMllsaascnnoosscriddnautmerouidnnsgwhrttiahthhreeiyhtyheoeeanlarCrdsseo22sm00b1p1e66ac.n,a2y2u0'0ss11es55tatoahcnnekdyd-b2w0a0o1s1el44dwdwcehoeamrrvepennehoonttsdation included in the computation of diluted earnings per share attributable to 3M common shareholders because they would have had an 2a0n1t1i.dilTuhteivceofmpeuttat(io6nsmfiollboansaevrnadgedopetidoaas fomr 20i16p,esrs5.h0asrmeifloorthaevyeeraargseoepntdiecdsDfeocre2m0b15e,r 3a1dal1.l4om: il average options for anti-dilutive effect (3.6 million average options for 2016, 5.0 million average options for 2015, and 1.4 million average options for 2014. The computations for basic and diluted earnings per share for the years ended December 31 follow-: Earings Per Share Computations Earnings Per Share Computations nts cysts oeny (Amounts in millions, except per share amounts) Romero Numerator: `Net ncomeatbuable to 3M Net income attributable to 3M ame2016 Sosew $ 5,050 ams2015 sams $ 4,833 $ as2014 ass 4,956 DDeennDooemmnioninmataitonorar:t:or fo weighted average 3M common shares oustanding -bsic Denominator for weighted average 3M common shares outstanding - basic wr ase ew 604.7 625.6 649.2 Dilution sssocited with the Companys sockbased compensation plans Dilution associated with the Company's stock-based compensation plans Ho ne ns 14.0 11.6 12.8 Denomifnowaeitghoterd average 3Mcommon shires oustan-ddinedg Denominator for weighted average 3M common shares outstanding - diluted av a2 eo 618.7 637.2 662.0 EaEEmaaimrnininngggssspppeoerrrshshhaaarrraettaiittbbruiubttuatbablblleeett1oo0333M MMsccooommmmmooonnshsshrhasrhreohskodhledorerslsd---bedbaairssitsicco Earnings per share attributable to 3M common shareholders - diluted sosss mos $ 8.35 $ 7.72 $ 7.63 somes amos 1m $ 8.16 $ 7.58 $ 7.49 SStintoocclckuk.d-hebaasssoeecddkccooompmptepinoensnsas,taitrioeosnnt:r:iTTcthheeed sCCooomkmp,paaennsyyrrrieeccceoodggnnsiiozzeecsskccuonoimtmsp,epnptsearotfioonrnmeeaxxnppceeennsssheearfoeosrr,istas sstoohckek-GbbeuansseeerddalccooEmmmpppelenonsysaeatetiisoo"nn SpptrrooocggkrraaPmmussr,,chwWahhsiiecchhPlan (i(rnGeGccEElouSSgdnPPeiPPts))i.toonUUcnkondfdoeteprhrteipaorplenplisal,citcareeabdsbltelreexicpsatececncdcsooesutunointsciiknc,ngoressnttsaatdrnnidedcaatrervdddses,rs, tttohhceeekffupaineirritisvsoh,adlupuneeorfofWofhrimsschhahainrreche-ebebasasshsheaearddreesoc,bomaampsnepdedentnhssceaoatmGiiopeoennneisssraaddtl eieEtoetmnrmepelsriontymesed.ieaRanset' efttShhedteerogcrgokartanPhntuetdrdacNatheteaewssaennPddlatthnhee AIAremcccpecoroogouunvnnietitimionnenggn of the related expense is recorded over the period in which the share-based compensation vests. Refer to the tPsrotonoEumnpcleomyenStshseainrhat-PfaoyBlmleownastoAscrcoduenatidingnowfiAschsc3uMntaidnogptSetdanodnarJdasmUarty e1,2(0A1S.U) No. 2016.09, Pronouncements section that follows for discussion ofAccounting Standards Update (ASU) No. 2016-09, New Improvements to Employee Share-BasedPaymentAccounting, which 3M adopted on January 1, 2016. Comprehensive income: Toa comprehensive incoamne thecompanentsof accumulated ser comprehensive income (0)re ApCprroeemcsseepnnretteeehddeuiinnnsimttvhaheeetuieCCnorconlocnsmosoomleopli:irddTeatahtoteeetaddenlsSScitdtovaaemtteepmimrneeecnhntoetmonoesffi(CvCoeoomsimpn)rcpeoireshmheceennsoasinivdvmeethpIIennocaccofoomsmfmoeepreoasennniddegdnnththcseeuorCCrfoeoannncsccsoyoullmitidrduaaalnttaseetlddeadtSSitootaanthttefeemmrfeecnnosttmoo(pffCnrCelhhahaedannnisgngivegesehiiinenndcEEgoqqemuusiteiotyyf:(.nloests) are oAiinnncvvaceevussamttmimuaeelnbnatlttsseedfiinonoriti-nhnstetaeerlrrencnoaadttmeiibooptnnraaesllhneccdonocmmspivapqneainienisesc)seo,)cm,urddieteei(feilisonn,sedsda)nbbidseenculeonfrmtietpapploeeisnnsessediidogoonnifnaafsonnrddeaippgnoondssttclrruoeertstirsrieeenmmoceynennttatrasppnlhlsalanaftlaaiooddwjnjuuhsseettfmmdfeegencinttnsstgs,(,innnuscnlrrauemdalilcnizngsetdhsgegadiagninesssaoannfddnellotosssess on available-for-sale debt and equity securities, and unrealized gains and losses on cash flow- hedging instruments. DDonetrehievabrtilviaesnaavcnnddsahhhceetdtdggtiiinnggravaccvteitavliitusi.e:s:ThAAelllCddoeernriinvvaaottniivveeusiinenssstrntuuemcseontttssrwwtieittshhwiinnapttshh,ee ssaccuoorppeeenooefyfAaAnSSdCsCo8Sm1155m,,eDDdeeiritvrapitrivivecessaaawnnatddpHisHe,evddagngeidinnsggF,iaarrge reescoonrddeedd Curency forward and option contractsto in sks sencally assniaed with forign exchange on the balance sheet at fair value. The Company uses interest rate swaps, currency and commodity currency forward and option contracts to manage risks generally associated with foreign exchange price swaps, and foreign a65 22775500..00006655 Table of Cones. Table of Contents lrraateef, ricnteetraestsihteroavdtegeeeaa,nnddinccooamcmcmmoorodddiaitntyycemmwaairrtkkheettU.vlSo.laagteilniietyra.lAAlylllshhceecddeggpiinengdginisnsescttorruuunmmteiennnttspttrhhiaanttciqqpuulaaellsii.tfyy1ffoohrrehhueendddgaeerclacyciconouguhnnottidnsigeandarrgeeraddneesssoiiggtnninaottneoddeaasnsddes Tthteooafefteexxidcsitotsiv,t,neaoaatlllsgcchhhesaadnngigegeses,foiiinrnn accordance with U.S. generally accepted accounting principles. If the underlying hedged tran saction ceases eadrgevalsucecoofuhntineatredmardekreidva1tivmeasrtkheatt hwivteh cnhoanbgeeenrseccoglnizaerd irneccourgrneinztedcafmnicnugrrsenCtacsahrfilnogw.s Ifrnosmrments fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments edtdhsearrgtivnsdaeotttinveeoedtiihnqesutdarngluiefmyooerfnotursmnaharderedeecgsclelaiasnarsscsieciffdtoiieeu(ddntiiinnnegtthhaseeressctamahetaeenmrmdkegeenoednttortoomefflmcaciataaicsrohhkenesfftlhlow)iowpwis-tssh changes recognized in ThheeCoscamaptaneygdoocrsynoats in the same category as current earnings. Cash flow-s from tbhoelsdaosrhsfulowdserrivoamtivteh neamncsisaulbset the cash flow-s from the items subject fo to dinesstigrnumaetendtshoedrgreaodrinugndpuesripgonsaetseadn(decionootmic)phreydgfeo rleelvaetiroangsehdipdse.riTvahteivCeso.mpany does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives. Cre isk: The Company iexpose credit oss inthe vent ofnoperformance by counterpartiiens nrst teswaps, Credit risk: The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, curencysaps, commodity pice saps,and forward ad opin contracts However, the Company's sk sitedfothe ie currency swaps, commodity price swaps, and forward and option contracts. However, the Company's risk is limited to the fair alu of he inset. The Company Scie meitors ts expos 1rit risk through the se of cit sppronlsandcdi value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit Timi, adby selectingmajor intentionalbanksand fnancisl nsitons a counterparties. ars no maser ning limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting armangements with counterparts hen posse iat credit rik in derivative rasactions. Amastr nein arranger sy arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may low cach counterparty to nt tle amounts wed betwen 3M cay snd the counterparty ss. eosfmlle, seprse allow- each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate Grvaive anactions. Th Company docs not sniiete noaperoranbcyam of heecountepates. I has clocked 0 preset derivative transactions. The Company does not anticipate nonperformance by any of these counterparties. 3M has elected to present hefir valuoferativeassets and bites within the Companys onsideblanc sheet on gross basis even when the fair value of derivative assets and liabilities within the Company's consolidated balance sheet on a gross basis even when derivative ansctions are subject 1 master ning arrangencaatnsd may afhersise qual or nt prsenain derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. Faivalemeasurements: 3 Glows ASC520, FirValue MeasuraendmDiescnlosturses With respect assets nd ilies Fair value measurements: 3M follows ASC 820, Fair Value Measurements andDisclosures, with respect to assets and liabilities hat sr measuread Fival cn ecuribinsg ad nontcurinboi. Under the standard, it value fs deia tnheedxit pric, 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 heamount hat would be received10sel a asset or pid 1 ranser bit nan orderly ransacton between market or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market pricipants aofthe messurncat dt. Th standardshestablishes hierarchyfo npr usd in casing Fi value that participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that masimizesth ue ofcbsevabe pots and ineshe us ofunobservable inputs byrein ta he mot observable nts maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs used when available Observable patrse inputs market patents would use alinth asso ability developed based be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on madrtkobetinted from sures indentof heCompany. Uncbsryabo pots re puts tht ect heCompany's on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's `Sscumplions shout he fctors market pariepants would vs in valuing the sset orbit developed based uponthebest assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information alae i hecircumstances The hierarchy isbroken dow nt he lves. Level 1 ipo are quoted prices information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (madustedi)n activemarkets or diel soe r abt le. Lo2vinpeuts ince quoted pecs fo slasv orailt tes (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in sctiv markets, quoted prices for dia or simlraso ilies in markets thst ars not civ, and inputs (other tha in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quotedprices) tht a cbserabl for he aso ably iter dirty a indir. Level 3 inputssrc unobservable inputs ox quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for he sto bility. Categorisation within he valuation heathyisbasd upon te lowest eel ofnot that significant othe the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fir value messrement. fair value measurement. AAaecnqqudusiaistiritioonenssv::eTTshheetCChoeommapcpaaqnnyuyiaaccrccciooouuntnngttss nffooarrbbubussiiinnneessss csacoeqmubsiisntitaiotoinnosniinn0aaccrcceoocrddoaagnnnccieeazlwweiitt(hhnAAdSSCCn5l80)0S5,t,hBeBuuasssisinneetesssssaCCcouommibcibndinaanttidioonnassi,. iTTthheiisss aasTtssaassnubudmlmaeeerdddsrinneatqsthuhueiermetotsrradatnhnsiseaaaccattcbiiqouousnniirasninnneddgsseectsnotatamibbtbyiliisnsihnhaeetassibottuhnhsee.iCnsaeecrsqetsuaicissonitmitporbnoio-nvdiaasntiitoeonnffsatoiiorfrvvetaachliolusguesnaaitsznettdhhaaeellnmmd(eaepanarsdssuuorerneebmlmeye,e)nnttaht eoombbaajjseesccettttiisvhvaeeecrffqooutrrhiraliellnldswa,asensthedetsdsleisaatbcceqiirluimrtiiireenesddataainnoddn liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination oOffarcaqmuaicstiioonn-daantdesqfutivtalouneoefscotnesdideersamtcioanripnigd icnostsbursoinmesss ccoimboinnatisocnou(nnteinugd.ingcontingent consideration) nd the exclusion of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting. New Accounting Pronouncements New Accounting Pronouncements CIInluMMsatayeyr22s00,1144,a, ttdhheeinFFiAinuangnuccsiaatl2AA0cc1cc5oousunnsttiiinndggASStStaaUnnddNaaorrdd.ss2BB0oo1sa5rrdd1,((FFwAAhSSiBBc)h) iimssesuenedddeAAdSStUUheNNoso.t.an22d00a11r44d--00a9s9,,oRRsfeveecentuievvferroodmomeeC.ConoTrtnhrteraaecActtSss'Uwwipittrhhovides siCCsniunugrgsletleneoctmcoormempresrmp,eruaheneshdnesrnieniscivAvoegeungmmituooisdodtnee2lg0ttu1oio5dbbaieesnscuuuesse,edddiAnintnchSeltauUhdceiNcnagooc.icuno2ndu0utn1sit5in-n1gg4s,ffpoowcrrhirrieiecvvhceennaguumueeiedaanarndriceseiidn.ngthTfefhrreosomtmatnnccddooannartdtrraadaccststsstoswwaeitifttefhhdecccdstuiosviteeoomdmparreitrenss.caiaTnpnhdldee ssAuuSppheUearrsstpeeraddoeevcssiidmmteoosystat current revenue recognition guidance, including industry-specific guidance. The standard's stated core principle is that an entity Scohnosuildderraetcioognniwzehriecnteheondyepicetxpheectrsantso be oefnptreodmiisnexdcBhaondgesfosr heosrgv0cuoisotocomseeedrrvsiscsnaTn aomaocuhnitevhe thrieflceoctes phrienciple he should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core ApeSfUorimnaclnucdeesobplroivgiastiioonnsiwithheinconirvcet,sedpetderemilnihngatthiencrlsundessctdoennptriicn, tho contractwith customer dentin ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying theprinciple the the performance obligations in the contract, determining the transaction price, w66 22775500..00006666 Table of Contents aapllellroofcaoatrtiimnnaggntcthheeeortbralainngsasctaitcotini.oonnTpphrreiicacent1do0atthrheedppleesrsrffoporemmcaanniccfeeiooebbhllseiiggaaatcticiooonunsn,,taainnddg reoesrcoogsgnoniimzziinncgogsrrtesevv0eennouubeetawwihhneeonnr((foolrrlaa]s))caanonienttyiatycsswaatitiitsshffiiaeesscuastomer nd preieetgqrhufioiecrreumsssateeonxxmcpeperaasonn.bddleeiDddguadrdtiiiiosnscngcl.ol2Tso0uhs1re6ee,sssttaaahbnebodutFatrAdthShaeEelsmnaoaalttsuuoprreees,c,uiaafeimmedosouutAnhntSet.,UaltciiNmcmooii.unnngg2t0inan1n6dgd.0fuUo5n.rncscePorrrmtiasneincncityyopaosoltfsfretroreesvsocebnatuuaAeiengaaneondnrdfcCcuoaalnfssishhlil flcalkoocwnwoa-sstnitaarorraniicssstiinw[nggRietfrhproooarmmtciuccnsoogtnnoRttmraeacevctrtessarned GIwGmrirpotohrssoescvuvveseemtrroessmnuutssesrNNsa.eentDt)du{;PrAArinaSScgUUt2ic0NNao1ol.6.E,22xt00ph1e1e6d6-Fi-1A1n0t0,Ss,B,IddaealnsfnotdifiyAsnisnSugUedPPNeeAorf.SfooUr2r0mmN1aa6on-n.c2c02ee,0OOb1Tl6bi-le0gig8acat,tioPioor]nnisnsaCcainpnoadlLLivricecerersnnusssiiaennAngggdc:e; IAnAmttSSpCUUroionNNvsooeoi.d.me22enr00na11t6t6is.of-1on12Ts2,,o(NNRpaeaerprrro6oor0twwi6n-S,SgcRcRooeeppveeneneue JfIirmoodpmmraoCCvoneonmntteirannactcsstt'uss'aswwntidiitthhPonrCCauuicsnstttiwocohmamileecErrhssx' pwwherhidsciichcehnatuaasmem, eearnnnsdddnAAsAcSSStUUUonNNNooov..o222l000v1114e46-s--002990..,UTTTdhehceeshspeenriaacymmaelenCnddpommrreorevennicttdtssiioniinngnsccglaluonudoddedIsccmlloaaprrriiofsfiiveccearamttviioeionnncteoosfsfptor.pirTcinnoaccspiiiippocaaml6ler0vv.6ee,r1sRruesssveaahnggeuennett guidance in situations in which a revenue transaction involves a third party in providing goods or services to a customer. In such SCierrcuvmisctaensc.e,theaenttiittyysmuhset pdreitnceirpmalinntwhheethterratnshacntaitonu)fofsarrparnogemfios othehhicnudsptormyerf8o propvriovditdheetuhe dnryidnignggeoodgsoroodrs cr circumstances, an entity must determine whether the nature of its promise to the customer is to provide the underlying goods or services (i.e., the entity is the principal in the transaction) or to arrange for the third party to provide the underlying goods or sheorwveinctietsie.s wtoheucald defiis nheeawhcethtertphreormmissaecdtigoond)s.Tohesaervcicdesmaresnpdaatrrssiely idee nisobm fedefrnoys mitnhgrpperrofmoimseasncien cbcloingtteosntsa,, services (i.e., the entity is the agent in the transaction). The amendments clarify, in terms of identifying performance obligations, how- entities would determine whether promised goods or services are separately identifiable from other promises in a contract and, hcoenrteesotro,f wocuoldntbeasacnscdupntredofovr asin paaccrou.ntiTnghpslidyanecleecta ion scel nstoiuno f0odsshes igpainndgssnddshoandlseirnvgicseestihvaittaiareeseBllmmetnticohues therefore, would be accounted for separately. The guidance allows entities to disregard goods or services that are immaterial in the ncrTaoaatnhhetteerrxuthothfraoatnfnesaaascporaanodmtdiriaistcnieot naitnanldgpprprarronootmmviiiinsdsgeeedads cassneearrvavsciicecceeos.ou.fnW Wtniinilltghlhcprrtoeeglugiaacarryldd election to account for shipping and handling activities as fulfillment costs portohpeertlyi,cewnsiicngh.dtehteearmmineesnwdhesthcelrarihetycihotwyarneccoigtnyizewsorledvevaloavterthe to the licensing, the amendments clarify how- an entity would evaluate the fointiammrteuceoroeortroaraftctitatpsopmpioorndionitmtfiiii nsceatmtiimieno.eng.srTaaTnhnhdteeicnaagmmaeenla niddcimemennesngny ethtssoafaltsilnsocteaoalndldserdtceirtuetssausltiepimmrpoplcpleoeemmrmetpynel,tnewattatehtiidioocncnhoiidnssetsstruueaeertssmwlrienahletaseitivvwpeehltteootyhateriarnnntihsgietoifoenlnnlti((toayrdardmeiocnddogigdfanipipezirdreaasrnccetriteacgrvaoelsnpeeuexxceppteeoidvdvieiecernntt for contract modifications and clarifying what constitutes a completed contract when employing full or modified retrospective ernatniiiotno mexectlhuoded)slceoslycptebialeys, ncoonlalcsthdcornsioderrataiosn,aanndphriecep).reFsicntalaltyi,onthoefasmleesndacdntsbemaskeiclraayp.ce hveisl(lcoowtitnogns transition methods), collectability, noncash consideration, and the presentation of sales and other similar-type taxes (allowing Caeaonnnnddttitrppiaerrcsootvvstoi,iddeeeoxaapcddliuddndii.teiioaosnnnaadalleosgd-uetayidprnaecnatcaeeexseni.nstcthOhoveeellreaaacrlelte,adsroAoffrSfoddUmicissNctcrlolaoo.snsss2uuar0rcee1t4iooo0ffn9pp,eperrraiffcooerrm)m.meaaFnnnidcnceeaeldlboy,lb,ilptigrhgoaeavotiainomdsne,ess,nfdppomrroocevviniitsstsihioormnnsslafkflooerrrcelo etorrsotsaseipnses cototeninccveehcrnesatridctaaaoiilpnntctiopyoreprnseescotrooioffans contracts, scoping, and other areas. Overall, ASU No. 2014-09, as amended, provides for either full retrospective adoption or a Jmaonduiafriyed1, re2t0r1o3s.peTchtieveCoamdpoapnytibycownhtiincuiingaeppvlieedsoltyh1hsieamndoarsdsciumrpaecnt oenr3oMpcroensesnotleid.datFoerd 3eM hes ofASopUeris astifoencstainvde modified retrospective adoption by which it is applied only to the most current period presented. For 3M, the ASU is effective aJffiainnnndaaunniaccsriiycaalle1cnc,oot2nn0ldd1iyit8tii.coooTnnm.hpe33leMCMtoihhnmaagsspdaccenotoyanniddilsuuecccdttoeecnddotininnntuiietiisnlatgl to evaluate the standard's impact on 3M's consolidated results of operations and arenviyewss,0ddeecelompiendgpnroejceectsrmyandaguemsentt seoaexe1sigheacpcurntoinocgf aeodlospetissngnthdis ASU. analyses, developed project management relative to the process of adopting this ASU, `asmSunuapdprppioostrrtcytuaaromnrfeeen3vvtaMally'luusacatotriimoeovnnpeolonefuftietnthhgreeadssettnaatangndidleaeardmdr'dec'sonniitmthrm,aoppcaatgccrteitovonaiettwnhheesttCCoooidmmmepptpaeacarntnmsyyia'snseeccnooenenscsoeolsxliisddaaaryttpeaedsaddre tjeehusesustlmtcstes ornofatfosntpostepiorta eaieretoaxintiisosotndanis snsegaananodcdctffoiiaunncnaactnnioccniuigaanlltpeccodoolnfincdodiiretiutisinooandn.ne.drFFtooorr the the miipnrnadodjumousirstisrtnyey.d-sssoppfeoc3ciM isfiic'csosgresuiveidredvanainucceneesattrhhrHaaaottnwgwweievilmlellrebb,neetsiss,nuunppdoeerrisssieoegddnneeiddfitcbboayynetttxhhpieemaAAnpdSaSecUUdtsadaannirddseceeglxenopneseerecraastlelldryyeagccsaoorntndshsiieisnsstgteoorfterf3avanensssuaiiencn,ggtilloehenpepseerAarfrfSeoorrUnmmooaatunnalcccdeec,coboulbfinolgritgeaeadtxtiiafooomnnrplu1toen,dtrremaarnnpssfeterr itpihhsreopmtmirmiseeindigsgooofufontfrdieelsivvzoeegedrn.nuseeeTrhrvreeieccceooCsggo.nnmiHitptiioaoownnnyeivnecrssu,oromiemnneetalardyrdariasntinigognceepmmtoaeeeennxtstspaffuonolrrdeiwwdhnhidiccihhstchslseooosffmuttowrwdeaaisrrfeerieeiigndnadrrdudrsuiotnrssgyp-erssecpvtepeicnvifcueiecm, ggethutueihdioAaddnSoceUefa((cdwoiouhpclitdchih, ofttnohhreeoenAAxJaSSamUUnupassleruu,yppeiemr1r, sspee2add0cee1tss3)) is presently utilized. The Company currently anticipates utilizing the modified retrospective method of adoption on January 1, 2018. bIInnoFFteebbhrruutaahrreyyv2a2r00i11a55b,,letthhteeeFFrAeAsStSBciinsssstuueedd(VAAISSE)UUaNNnodo..o22r00i11n55g.-002i2n,t,eAAremstemnndimteeynt(srV' Ot0o)otthhceeonCCsooonlnsdosaltiodialotniiodmnoaAdnetnalaiysls.yosWniis,thhwirhceicshpheccathna0nggeheses ggVuuIiEiddaamnnoccdeeelrre,alathteeedd to both the variable interest entity (VIE) and voting interest entity (VOE) consolidation models. With respect to the VIE model, `searnvdiacndprcohvaindgeers,, tahemoVnIEocthhearrcthtirngsst,ethordnimfictteopn rofovoasrisbillnaesctnts,suanodstheedpwriimtahryfoebseindic4ar ddeectiesrimionnamtiaokn.e Woirth standard changes, among other things, the identification of variable interests associated with fees paid to a decision maker or the service provider, the VIE characteristics for a limited partner or similar entity, and the primary beneficiary determination. With urnelsepescsttohetphreesVuOmEptimoondeal,notthhoeArSwUiselbmeinovaetrecotmhee.Uprnedsesrmtphionnheatdganncacgperenienrc,aelcopnarttrnoelrswouiltdedlarpgreliynconticpoonrssoimlidlearsity respect to the VOE model, the ASU eliminates the presumption that a general partner controls a limited partnership or similar entity uppanavarleternsiessrnitsghchneiirpfpsiorocirearsnsustiimmmiinpilvltaaioorrlneevnnectmtaiietntyynotuutnhnwdiedetrewrhr itctshhieeetbiVVeeOOsoEEvseummbrocjodoeedcmlet.le.0. TTUchhnoeendCsCeoroolmtmdhpaepataninneoyywn-caaogdnuodsipidtodaeendrpctatehht,itiissaoAneAgsSeSdniUUempraeealflcfetpeceactdtriitvnvbeeeyrJJtwaahnneouuuaValrrIdyyFla11d,r,g22ee00l1l1y66.n.coBBtheecccoaaanuunsssooeeglri3d3eM waMtiesdhdaiidd not not have significant involvement with entities subject to consolidation considerations impacted CVoimmpiatneyd'psatceornshsioplspetdenetsaltysoimfpoapcetreadtiboynsthanVd fOnamnocidlelcocnhdaintgieosn, th adopion didnot limited partnerships potentially impacted by the VOE model changes, the adoption did not hav4 by the have a materi impacton he VIE model changes or material impact on the with Company's consolidated results of operations and financial condition. aIInncAuApspterolilme22r0011o5,,detththeeerFFmAAinSSeBBwiihssessutuehededrAASScUUloNNuodo..c22o00m11p55a--r008i5,n,gCCaurusrstatoonmmgeeermr'e'ssnAAtcccccoouounntntiinntggfasooorrifFFweneaeersssePPacaieiaddsiienn.aa1hCClleooudaAArrrarganneggenemmetenntct , owwhhiincchhsrsreoqifiuweiaresrsse a customer to determine whether a cloud computing arrangement contains a software license. If the arrangement contains a software aTceepnist,iothne ocfuostthomeercqwouuileddascocofutnwtarfocefonsarelIattheefortahngseomftewnatredlcnosotccleeomesnt nsoafhmraenlnsearsceotnhseistcenat switthoacrcowunotuilndgsfcorotuhet license, the customer would account for fees related to the software license element in a manner consistent with accounting for the forthe armnge5mesernvicte contract An aman would acquisition of other acquired software licenses. If the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. An arrangement would @67 22775500..00006677 abelComets Table of Contents cdcuoornnittaniignntahsesoohfofttswwtaiarnrgeelpliieccreeinnossdeecweillteehmmoeuentnttsiiffgnbbioofttihhca((n11t))tptehhneealcctuuysstaotnmdoe(mrh2eh)aasris cthheaeccboalntreracfttouaatlhriiggchhuttsttototmkaekerepfpoooscsssheessesiioounnnooftfhttehhseeofsstoowfftawtrwaearrecenastiasannyoywttniimmee adhHruamrradianwngrgaterhdemeoeowrhnrcotcaosoentinntrntrtgreaaercpcettedrwiinotiotdhh,wsaoniortohbmtoheuaertrtsppriaaglrrnttliyyfiuucmnnaornrdeetillfpaaitteeeendddabltteoygtthiahnnendvvi(een2nng)ddJoiotarrinstouoafehrhayososi1bt,ltt2ehh0eef1oss.rootffhTthveweaaracderue,os.pt3o3tMmMieoaarnddtooodppiettdieetddhnoetttrhhiirhssuanAAveSSthUUemsppaorrtoofetssrwppieaaeclrctetiiivvomeenpllayyictstttoooown nSMCs consolidated ress of operationds nancial condicn arrangements entered into, or materially modified beginning January 1, 2016. The adoption did not have a material impact on 3M's consolidated results of operations and financial condition. ITrnnegJJauurlldyyin220g0m115e5,,sttshheie nFFAASSiBnBveissnsutuoeerddy AAatSShUUeNNlooo..we22r00o1155f--c11o1,t, SSoiirmmmppallrifkyein.gtUthhneedeM MreeeaxsaiutrsienmguesnrttaooenffdImanrevdee,nnnttthroetryym,,arwwkhheiitcchahmmmouoidneitfisreseevxieisssitningcgonrsreieqdgeuriirametmieonennttss oromefafgrerakeprepdhtliacnwcegiemtmmheeneNnatRtsVuccr,ooisnttdg,ennfineittvneerredneatsaolisirzzycaabbtalliteemthavvetaalelluuodeewse((elNSrlRRionYVfg)pc),r,oisaactnedodrNNminRRaVtYrkeelleter.ssisUanannnadeaarppppecrxrooixsxtioiimmnagaotutfeseltblayyunssndnioaonrrreedmmsssaa,,lltheppesrroomffiriatterammksaeaortrnggaianibmn.l.oyuTTpnhhrteeenrdneeieqcwwut-airbAAelsSSe UUccoosnrrteesspipdollaeafcrcaeetssion camcoopmampprrklpeoeltetsitwmiooanint,ih,lNddsiiRssnppVooorr,samadlalelaafinnpnddreodttfrriaaatnnsassepprosorteirtmtanatatiitoohennd..nsTTehhlmlisiesnacgeshlupimmrriiiicnnnegastteneinsvtttehhhoeennno.ercdeidnFato0orryddSeceMeot,erurrrmhsiieinsnoeessfaabnnunddsdcicanooednnssssii,fiddlfeeersrtsrrierepevpalleasacocepnemramobeesnlnpytetcpcctoroiessvdtteiloocyrrtaNbNbelRRegiVYcnolnlseeitssnsssgoaanfn approximately normal profit margin when measuring inventory. For 3M, this standard Jnaannucairayl|,co2n0d1i7t.ionT,he Company domotcexspt his ASto havea material impacton January 1, 2017. The Company does not expect this ASU to have a material impact on M'sccnsldated el ofoperas tions is effective prospectively beginning 3M's consolidated results of operations and and financial condition. In January 2016th FASE sued ASU No. 2016.01, Recognitiaonnd Measurementof Financial Assets andFinancialLiabilies In January 2016, the FASB issued ASU No. 2016-01, Recognition andMeasurement ofFinancialAssets andFinancial Liabilities , whic ese he counting related (1 hecssifcton snd measure of investments in quity secur and(2)he which revises the accounting related to (1) the classification and measurement of investments in equity securities and (2) the presctaion of certain irvalue changes for fnancil Tales measured fi value. The ASU alsamendscertain dislosure presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure Tesuirements sociated withth ivalu of nancial inseuments The new guidance requires the i val messrement of requirements associated with the fair value of financial instruments. The new- guidance requires the fair value measurement of investments in equity securities and ther ovnerbip interesit a iy cling insesnntisn partnerships, unincorporated investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated int satus and lied silty companies eolcivel. sity secutrhatedson)o salt in consolidationsndarc not joint ventures and limited liability companies (collectively, equity securities) that do not result in consolidation and are not accounted for underthe cuiy method. Ents will ccd o mea these ivestmcots ad recogni changes fie vale in nit accounted for under the equity method. Entities will need to measure these investments and recognize changes in fair value in net income. Enis will no longebre bi o recogni realized holdinggain and mses oasecurities hey classify under income. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify under Curent guidance a svalbl for ale i her comprehensive incom (OCD, Thy ls wil noogobabl to use th cost method current guidance as available for sale in other comprehensive income (OCI). They also will no longer be able to use the cost method ofaccoumting or city Securitthatdonot have readily determinable i values. Instead, for thes tyopf eequisty ivesiments of accounting for equity securities that do not have readily determinable fair values. Instead, for these types of equity investments td mot thrive aus forth et ast value practical expedient, ais wil be pried iocle practicability exception that do not otherwise qualify for the net asset value practical expedient, entities will be permitted to elect a practicability exception and measur he investment atcost es mpaimentpusominus obsrableprice changes in orderlyransaions) The ASU also and measure the investment at cost less impairment plus or minus observable price changes (in orderly transactions). The ASU also stalisheasn incremental recognition and discloar eguirement lated the prescatation offi value chaonf fginaencisal establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial Tish for whichth i valu opin (FV)hasbn ltd. Undo this gidance an nity would be ered fo seprsely liabilities for which the fair value option (FVO) has been elected. Under this guidance, an entity would be required to separately present in OCT the porn fe tl fi value change stsbutsbolnsen specie credit iskas opposed o rllecing the present in OCI the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the nti amount in sami. Fordeivativ labile for which th FV has bn lcie, however, any changes ie value entire amount in earnings. For derivative liabilities for which the FVO has been elected, however, any changes in fair value tibutble ostrumet specif cet isk woukd cone ob rested net income, whicisconsistent with curt attributable to instrument-specific credit risk would continue to be presented in net income, which is consistent with current vidance. For 3M his standard is fecive begining January1. 2013 vi cmulaive-<fcet adjustment to begining ened guidance. For 3M, this standard is effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained comings. except forgdnce relativeto cuity securities without readily etrminablefi values whicis applied prospectiely: earnings, except for guidance relative to equity securities without readily determinable fair values which is applied prospectively. "The Company icently assessing this ASU' impact on SMT consolidated resusof operatiaonds financial condition The Company is currently assessing this ASU's impact on 3M's consolidated results of operations and financial condition. IIinnnrFFoeedbburrcuueaarsryy 22e00s116s6,e, tthmheoedFFeAAlSStBEhatiisswsauoceuddldAArSSeUUquiNNrooe..i22t001i16e6.-s0022,,rLLeeecaoasgsneeissz,,erreeappsllsaaecctiisnngagneedxxiibssttilinnggelsesasseFoasrccmcooousutmnitinnaggssgi,udbiduaatnncr.ee.cTTohgheneinn:eowe-xpsstetaannnsddeaasrrddon atihhncecetiroirorudniitnunicccnoegosm.maeeHlssoetswaaseeteevmemeermen,ntotsdisteiimlnnotdhaaiammftaiwacnnsonnuewelrrdhssariemqqiiuluairrreatoeicncutuiratrrire.eesnnstttoeaasrccecccotoouyugnpnntetiinznaeggn.adTsTsdhheieetsrAAeaSSnnUUdalddniaoocbceisislninngtiooetetsammfsaoaerkkeamenoffduusntnrdedlelaaaimmseeeednsnt,ataabcllcuochtuhirnaentncgiognegegssn1aitz0noedieexasxlitpsiitgeinnnnssggeslleeosssnsoorr u cnaoculcmloebucenum brtiioonlfgfitn.thyhHeb eusounwndedveehr errblry,eniinctgogompnrpsoiridinundicfceiiierppselldedwesahwnwaidtittdqhheutttaheloihrfsmieeiosonofisafnstghheaeewshnnaeeelwenws--prhtryeovepfeeimtnaucenedoasdtbnaierndedarcaertrc,dfoi,gnAnAainSzSceUUidn.NNgoTol.he.ea22s00e1i14ad4-nca-0d09nl9,r,eislsauumtccehhdaaaatscceevovsusanlhuteiaxantigitsntagiinnhhdngoogaewwlilgnsstaate Scsrppoeelnclceiiifcfiitcacnbppilrbriotyyovivwsshihioionscushildnaoisnbdndaerprceepocqlniuistiierededesreaeextdxpphaaaennndddbeeedddgeitqqenruimuanliaigntaiolntfigviehweaahcnneaddrnlqqipucurasoatnnftciitotittmcaapattainivvrebeaetddiiirsvescecclologopssnueerirzseies.od.d.TTpThhreehesessettgnaatunneiddddaaairrnddcherreeoeqgluy iumireeisnsoamme ftoeaodsddioefpixfr itiiieesoddtinnr.rgeettFrorrroe3oassplpMeeeccs,tttiiavvtteeeh-e AAhtreaSSnUUCsiotiiimssopfenaffbnefyyc'twiisvhemiJciJahannnuiiutamairsurymap1.1cp,2al20ise01ed199.pa.at yIItnhmnfefeoonbrrtmemsgaafittnoiionocninnuapugnindtodaefelrtrhaeeexnxideissatotirpinlnegiregJasttlaiecnsagosgmelupgadausaridasntaincviceetephwweirnititoohhndr-reepcssrappeneesccecltntattebodlrreeeinnettmheeexxsppyeeeinnassreeexocfofeorasrdsoooppopeentrireoaatntyii.ennagFgroaleresaa3ssoMeefss, andthe and the Company's minimum lease payments for capital and operating leases with non-cancelable terms in excess one year as of cDpeercaetimonbse3ar1n,d2n01a6niainccolnuddietdiionNot 14. Th Company 5curctly sssssing this ASU's impacton 3M'sconsolidated elsof December 31, 2016 is included in Note 14. The Company is currently assessing this ASU's impact on 3M's consolidated results of operations and financial condition. 1 March 2016, the FAS issued ASU No. 2016-06, Contingent Patan Cl Options in Debt Iran This ASU dais In March 2016, the FASB issued ASU No. 2016-06, Contingent Put and Call Options in Debt Instruments . This ASU clarifies vidanc usd o determin det nsrancnts hatcontin cmtingent portcall pts wuld reine guidance used to determine if debt instruments that contain contingent put or call options would require @68 22775500..00006688 TabeofComets Table of Contents Separation of the embedded pot oil ture fom he deb nium ad ir scouting or the fstuars derivative ith separation of the embedded put or call feature from the debt instrument and trigger accounting for the feature as a derivative with hinges in fi vale recorded hough income. Under the ew dance, fever ptocal options embedded in dbt inserts changes in fair value recorded through income. Under the new- guidance, fewer put or call options embedded in debt instruments `woud reir derivative counting. For 3M.tis ASU sliJury 1, 2017. The Company's outstanding debt with would require derivative accounting. For 3M, this ASU is effective January 1, 2017. The Company's outstanding debt with bedded putprovisionsdoes no requirsepara deri accuonduercnisitngiindagn. Ax eal, 3M dogs no xpect embedded put provisions does not require separate derivative accounting under existing guidance. As a result, 3M does not expect his ASU 1 havae material pot cn the Company's consolidated ess of operatiaonnds financial condition. this ASU to have a material impact on the Company's consolidated results of operations and financial condition. iI1nmMMiaanrrccehhs2200th11e66,e, xtthhseeinFFgAASSeBBrniissmssuueeednd tAASS1UUpNNpool..y220t01h16e6-e-0q07u7,i,tSSyiimmmepptllihsfyoiidnnoggfttshheeesTTcrruaannntssiitinioornnttoootsthpheectEEiqqvuuliityyMM(evtehiodstoopfAAhrcccccoooupunertniidtoinndgsg,,swwfihicchhhe city eliminates the existing requirement to apply the equity method of accounting retrospectively (revising prior periods as if the equity m`weotuhdodrhedirahaeyinbveesntoarpfoleadp)yhtehniantcyitmyetohbosdinpsrossipgencitfiivcealnyt fnlrloamcnthceedoavterhe ipnrveecstumseynthelldfinvcestfmoerntt.hecTihte ynewmegtuhiodda.nce method had always been applied) when an entity obtains significant influence over a previously held investment. The new- guidance "cwTTohohseeubliidnansvvrieeessqstotuoofirrrtehwwotohuuecllddiinatavddyeddstmtotehrhtethoccoaaadrpyrnypivilnnycggstthvvmeaaellneuutqee.uoiotFfyfottrhmhee3etMeehxx,oiissdhttiiipnsnrggoAsinSnpeveUscettsiitmvmeeefelnysntttf1ritoovmethheteJhcacenoudosaatrtooyesff1ta.hatnn2eyy0in1aavd7deodisiinttmoionenanpaltlrqoiinusnvavceletissfittimevmseeennftbotart1sot0ihsdde.eewettieqetrurmhmitiiyannleemythehteehonidn.titilal acdoospttbiaosnispoefrtmheede.quity1mweotuhloddainpvpesthmiesngt.uiFdoarn3cMet,otihniscAsmSeUnitsseftfehcatiavenJtanounaryto1h, e20c1u7tosnmaeptrhoospdefctievetbhaesiasd,owptitihoneadrtlcy. adoption permitted. 3M would apply this guidance to investments that transition to the equity method after the adoption date. cI1nonMtMaaiarnrcachcho22u00n116t6,i, ntthgheesFFpAAeSStBBs iifssossruuseehddirAAeSSbUUusNNeood..p22001a166.-0y099,,m1Ipm0repcomrvnopevleomtmyeeenesntstss'ntfoocEEmmnppl.loopayeemeeSoSnhgahrteh-eBaracsleerdPmPaeanyeytmm,eenn-htetaAccccBccooouumnanntiinnngggs,wfwhohdiiiccnhhcommmioedlifeiess certain accounting aspects for share-based payments to employees including, among other elements, the accounting for income awxheesnandsfhrarf-ibtaaseds,paayxmweenltasacwlaarsdsisfiicchataionssionctkheopstsitecmocatetorfiscatead fsloowcsk, nWiitth(RsSpUi)tigr1aitnecdoon nsep,luondye,r ctrhenfirgvdaalnuco,f taxes and forfeitures, as well as classifications in the statement of cash flow-s. With respect to income taxes, under current guidance, ahwthenheeaaannwwaadarrsdsdhaiiisrsengg-ebeinnaeserevraadalllllpyyuayrraeemcctoeohnggtnniiamzzweeedadrdooofvveseeurrxctthhheeeasvrvaeessst(ttifiononcrggk4ppoeeorpripitooitdodi.n.onHHo)oroowrwreeesnatvreeticrrh,teethdheeFstirroeecllaakattleueddnuiddtueep(ddRuuScctUtiieo)osnnitsiffgrnrorgoamomnftttetaadxhxeeetsoswppaanaaryedamby(lpeflaiooisyRbebbSaeaU,sslSeet)hdd,eoeonfwnahittirhhcveehacluaen of baFicewnaeatnirctdhir'aeslrigngsrttrereaaitantetsemeirercn((tvccsarr.leauatEetixinnacggtetsaahsnneoeetisxxmccbeeeesnsosefaftaiextxxsbebareecrninseeifeis()tf)oogaornraillnzeesesossdp((ticinocrenara)dtdaionirttgooianananattlahgxepdadfeiaefdifir-icicvniiaeeclnnuaccepyyiu))apthlhoan(nnAvPthehIeseCti)ccnwoogimmtophpefientnnhsseaeaqtatuiiiwootynan,rdccaoo(ssfdttorrreaeRccsooSggdUnnesiif)zz,ieewdcdihineicnthhhceeicaaernes xfssiiinmmaibinlelacnraiealryflisrrtet,eacctooUeggmnnndeiienzzretestdd.heiiEnnxnAAceePPwsIIsCCgtuatoixodtabthnheceenee,eefxxitlttseennatetrxethhcereeesrecestoiigsrsn:aizbsseeuudnfefcifincietianesdntddt fiAAtiiPPoiInInCCaclaiampmeaosioudunw-inotntu((clAadPpbPIiItCaClrpp(eAoocoooPgl)I)nCirr)ezelelwaadttieteahddinti0openprqerouevimvtiyioo,auuassnlldyybetrraenexcecoodfggennpfiiizczeeieeddnnceeixxesccseessassnrtehe tax benefits. Under the new- guidance, all excess tax benefits/deficiencies would be recognized as income tax benefit/expense in the sexcaesetamobfeenfointmset.deTfheenncseArSoUmStihenccoamleualtioanspoefctas sso mimppraocctehcedclveallatbilonoofredpuercdhasceushmairenspedresrhatrheebryeexacrludsionagk statement of income. The new- ASU' s income tax aspects also impact the calculation of diluted earnings per share by excluding uemmxeetcthehomsodsd.t.oaRRbxfeaeblwealanetirievdfevisttrseoot/hdaffetoofrriffwceeiiileitltnuucbrreieeesss,,Ftotfhrhrfeoeemienteextwhd-eosscttfaaanlncddauaaclrraddotiuaaonllnltlooowfwfossarsaafsnnureemintettiidtteypy-srwioidcadeeeetdcahsceoycauovonucatnciliutairnnb.ggleTppthoooelliirncceyyepuweerllcgeehucctaitiisdooeannnsct eheiathrseehsr1oh utonpdccaeoocrnr itttnhisneuuecterlet1aaofsieeuscsrttyaiimtmsitaaoottnceeksthhee number of awards that will be forfeited or to account for forfeitures as they occur. The new- guidance also impacts classifications `cwaisthhilnotwhessftreommoepnetraotfinsgsahfclotwssbyanndohlyopnogtehretriecqaulirciangshinfclluoswiotn ohf iexcceassshalowbseneffoitms ansbnoctihngahypcotthst.caIlncseaahd,outefelsow awii within the statement of cash flow-s by no longer requiring inclusion of excess tax benefits as both a hypothetical cash outflow- within cash flow-s from operating activities and hypothetical cash inflow- within cash flow-s from financing activities. Instead, excess tax eennclAiStUwroiuebse cclaassshipfaieydmeinntospeorataingaaucttihvoirtiieissi whheensaanmeemmpalnonyeer sasesathnerecsaeslfelmoewsnrtelfaetateudr0e iwnictohmheoalxdessh.arAedsdtiotmoeneatl, the benefits would be classified in operating activities in the same manner as other cash flow-s related to income taxes. Additionally, the new- ASU requires cash payments to tax authorities when an employer uses a net-settlement feature to withhold shares to meet tstaandtarud iarweitihhdoledfifnegctpirvoevoisniaonrsy11,b20p17r,ewsitih caarlay andopctionapterimi(tCei.miTnhaetiCnogmppraeniyoucsadyiveardsoiptytedinApSraUctNioc.).2F01o6.30M9,astoisf statutory tax withholding provisions to be presented as financing activity (eliminating previous diversity in practice). For 3M, this JJsaatnannenuudalararyrydx11p,i,se22nr00es11qe66u..iirPnePdrrtoohessefppft eeeccctttiivvieveleyt Jbabenoesufgiaiinrnnn ynncii1onn,gmg2eJ0Jaa1rnn7uu,aaewrryyitsh11, ,eui22an00r1l1ly66S,a,1tdee5oxx4ipccmeteisisonsslnltoagpnxebrbemtenxinettfebeifditet.ssT/nddheeeeffiiinCcfci2oeii0mnn1ccpt6ii,aesnshTyhhaaevvaeereblxybeteeeaendnntooprrefeteeffldlxeeccActteeSedsdUtaaxsNsi.ionn.cc2oo0mm1ee6-ta0ax9x as of bebbxeeeennnrceecifflsiittei/sses/.dxdepe3feiiMncc'siiesenniaccndiieoteshpteiiissostsnauutbobefjjmeetcchettinstttooAovvfSaairUrniiscaaotthiimooonneriirenness33uaMlMltienssgttioocicnkakaopprr$cii1ccs8eet4aadnmddicltlmiiemoinnisngtgaa/xeexxbiteebennentneteoffoiftiftiRRsnSbS2UeU0i1nv6vgee. sscTtiihnnelggssexnaatneddnsatecsomnsofpppelelxoercyoaceetyosedisnssgttaooaxcckck tooppyttiioincn the exercises. 3M's adoption of this ASU also resulted in associated excess tax benefits being classified as operating activity in the `BSaasmeedmoanntnheeaardotphiorncmaesthhfoldoowlsoglyatpepddo.ncthoe smteaeteinmotfehcenasst alowms osefaanhvfelowos fprposrpoectpirveoldysbeagsinnoinhganJgaedr. I1,n a2d0d1i6to, same manner as other cash flow-s related to income taxes in the statement of cash flow-s prospectively beginning January 1, 2016. `B33uMaMmsebdddeiiddroonnoofttthaeccwhhaaaadnongrpgettdihtiotssssnt methodology applied, the statement of cash flow-s classification of prior awciclolubnotiFnrgiperidn.ciples relativefocemenofttsi sandard snd ontinusd accounting principles relative to elements of this standard and continued Hs exising periods has its existing rsetofcsimating the not changed. In addition, practice of estimating the number of awards that will be forfeited. In June 2016, the FAS ssid ASU No 201613, Measurement ofCrd Losseson Financial nsiraments whic revises In June 2016, the FASB issued ASU No. 2016-13, Measurement ofCredit Losses on FinancialInstruments, which revises uidanc for he sccoumingforritlosseson ancl imsrmcots within tssope. The new standard trodes an spproch, guidance for the accounting for credit losses on financial instruments within its scope. The new- standard introduces an approach, asd on expected ses, oem rd loses on certain pes of nancial instrumenntds mes he impairment model for based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for availableforsle debt secure. The ew appronch o simating cod losses (ered 35 he cureexpectedsedi losses available-for-sale debt securities. The new- approach to estimating credit losses (referred to as the current expected credit losses mode apis most Fnac] asst mast a morscost and certain be instruments, including rade snd thr model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other recivabicn, one, hel-to-maturiydeb securities, ntinvestments easesandof-alncsehe-et credit exposures, Wilh respect 10 receivables, loans, held-to-maturity debt securities, net investments in leases and oft-balance-sheet credit exposures. With respect to avaliblefor-le(AFS)debt securtis, the ASU available-for-sale (AFS) debt securities, the ASU 69 22775500..00006699 TaofCbomests Table of Contents aammpeoenrntddissonthoheefcacunuryrrreeinntmtptoatihhreerm-etrhnaatns-tteeemmtppodorarararyyyiimm1ppaaciirremmdeientntot mmsoodsedle.nl.FdFoohrsesuruccehhosnseeccruuerrciiottigieenssizwweiidtthhauunnrrreeeaadlliaizzceeiddolonossisee,ns,ceoenmtiei.tisesHowwwiielllvlessrtil,ll acootnnessriiddteehreiinff aaalrlepsqoouirrrtreeieoffsllneetccohttafiitnnagcgnrythehditaimtt cpclraooeiwrdetmistbellnoeotsssirsaeafrmmeleloaocutteneuddtnaao+snt.lanyppteleorrlmcmoraaaennndeecintnetlt.ordsesuAdecusstcaitinoeodnnstlhiinn,erccueoonfssodttree((rarmceecoroarttgsinzeizdmcediccoocasssoot))mabbsraaearsdiinsucocofteifeto,tahnhaaetitsnAAoinnFFecSroymddeeeibbn.ttHvssaoeelccwuuuerecriviotteyyur.,l,ttdrhhaeeethAAseSSrlUUthiann `rppearrdqeeouvvpiiitrooieuuosssntaahplaelltorwmclriaetondeci.wteslao,nosonrsrpiecpsooeberretaisnsorreesn,fslrettcheteeerredeoodafls, a1rrneeavvapeelprrloslsiiwynngagtnhbbceaaecsc.ktkAainnsntdtaooarriiednnssccuoopltmm,reeu.o.nvdFFeoiorrrsc33ieMM5ro,t,anaittnhhciicssiAArucSSumUUmsisutsaenelolfcefecefsatc,tciiavvtaeredeJJcuiaaosnnvivuuemaareryrenyytin11,0,v22a00lr2u2t0e0,i,cnwoweiuidttlhdhcoecreaamrsrilulnyylgt sin5 faoidfmhotphpeaetbicobtneeogpgineMrinsminnicgttooieonfdnfs.othEhgleenitdffiiatiritsestetsdrraeerrppeoorrreettiqinnuoggsfirppeoedurpreoitrooldadtaipiinotnpnlwisyhcstihnchedh standard's provisions as ftihneaincidalacnondsiaodnopted the guidance is adopted. The Company i currently asesinhigs ASU's a cumulative-effect adjustment to retained earnings The Company is currently assessing this ASU's as impact on 3M's consolidated result of operations and financial condition. I1inntAAeunugdgueusds1tt022r00e11d66u,,cttehheediFFvAeArSSsiBItiyissisanucepdrdaAcAtSSicUUe iNNnoo.h.o22w0011c66r--t115a5,,nCCalsahslsrifeiceaaptitosnsaoonffdCCieperrattyacaminneCnCtaosassahhreRRepcreesipetnsc'iaadnnedadCnCdaiascslhhapPsPsaaiyfytmimeedennstntthses,'s, wwahhtiiccmhheiissnt of intended to reduce diversity in practice in how- certain cash receipts and payments are presented and classified in the statement of CCoansthinogwesn.tcoTnhseidsetraantdiaorndppraoyvmiednetssgumiddaencaefnear bnsumibnecrsocfoSmbionantison,ipnrcoise,sarmoomnghethesrtsl.emsetnlteomfenstoufr5oe-clouipo,n sbodns, cash flow-s. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and GThiabtuatvieonsspeetivoefdmoTreomthintoyemcetlhoaodfsicnavssehstfelsow.s.ThFeorA3SMLalthoisprAoSvUidiesfgeucitdiavneceJfaonrcrlyas1,i2f0i1n5,caisthhecsriysadaonpdtipoanyments distributions received from equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flow-s. For 3M, this ASU is effective January 1, 2018, with early adoption pRearvmeiatet.eiThle sitmanpdaacrdtroeq3uiMrsescaopnpsloilcaitdiaotnedur sing ore eftoropsept ercotinvse aansd ifnnncmieltchon.ditTiohne,Companydocs mot expect his ASU permitted. The standard requires application using a retrospective transition method. The Company does not expect this ASU to to have a material impact on 3M's consolidated results of operations and financial condition. 1October2016, the FASE isd ASU No 2016-16, nr Eni Transfers of Ass er han Iver which modifies In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers' ofAssets Other Than Inventory, which modifies niin guidance and intended reduc diversity in practic with resp the accountinglo the incom. fa consequences of existing guidance and is intended to reduce diversity in practice with respect to the accounting for the income tax consequences of inten ransiers fase The ASU dicate hat the cue xcepion o nome a accounting htrequires companics 1 intra-entity transfers of assets. The ASU indicates that the current exception to income tax accounting that requires companies to dete the income altofcers nercompany rasan would apy al 1 tereompany inventory trnacions. Tha i, defer the income tax effects of certain intercompany transactions would apply only to intercompany inventory transactions. That is, he xception woukd no longerapy fo nerosles nd transfor foe asst e.5. angle sets).Und the ising the exception would no longer apply to intercompany sales and transfers of other assets (e.g., intangible assets). Under the existing exceplio, income a expenseassociated wit a-ety rofis nan nercompany slo ransofvets isciminated om exception, income tax expense associated with intra-entity profits in an intercompany sale or transfer of assets is eliminated from Comings. sea. thet cost ideferred nd recorded othe baling sheet (5.4.prepaid ase)uni heassets ea the earnings. Instead, that cost is deferred and recorded on the balance sheet (e.g., as a prepaid asset) until the assets leave the Conslidted soup. Silay, the cts pobiied fomrecognizingdeferred aesfor te creases inta bases do the consolidated group. Similarly, the entity is prohibited from recognizing deferred tax assets for the increases in tax bases due to the intercompany sor tl ransfer. For 3M this ASU i fective January 1. 2013 with cary adoption peramofeJaadry 1, 2017. intercompany sale or transfer. For 3M, this ASU is effective January 1, 2018, with early adoption permitted as of January 1, 2017. "The standard requires modified retrospective transition ith a cumulative caoptadjcustmhent 0 opening tind comings nthe The standard requires modified retrospective transition with a cumulative catch-up adjustment to opening retained earnings in the periodofadoption. Upon adosion, company would rie oa income a Tc tat hd bt dered fom past period of adoption. Upon adoption, a company would write off any income tax effects that had been deferred from past intercompany ransctions invovingnoncnory ase opening retin caning. nation, a city wold record deferred intercompany transactions involving non-inventory assets to opening retained earnings. In addition, an entity would record deferred 1 sets with am aft o opening refined cumingsTo amounthast city had previously no recognized under existing idence tax assets with an offset to opening retained earnings for amounts that entity had previously not recognized under existing guidance but ould ecopizeundo he new guidance. While 3M could iis additions relevant rmsactionprior 0 this ASU'sadoption but would recognize under the new- guidance. While 3M could initiate additional relevant transactions prior to this ASU's adoption dat, based on deferred x amount elated to applicable post nercompany transactioansof ember 31, 2016 the Company date, based on deferred tax amounts related to applicable past intercompany transactions as of December 31, 2016, the Company dos mot expect is ASU 10 havea material impact on Fs consolidated reofosperuonssand final condition does not expect this ASU to have a material impact on 3M's consolidated results of operations and financial condition. II`nnhOiOcuchttomeboedrri2f20i01e16s6,x, itthhseeinFFgAASSgBuEidiisassnueceeddwAAilSShUUeNNsoop.c22t00o11-6h1-17o7,,.Iendtreecrsiessttiso'nHHemeMadktrheroohnuaggthhRReelolaaatteleddPiPnaddraitrritseeicestsTiThnhatartetAAsrtreenunanedvrearrCiCosolmmemmooannreCCsoonnttrtrotolyl., hVw(VIehIEiEcV)h)IEttmhhrwrooooduuuigfglihhedsaeeccsxoodimsmtoimmnregonbngucccooiodnnntastrornoolcliledppawaatreritttdyhy.drdUeeesnrtpedmeremicrtnintteoheseshoAwwwShh-eUeta,thhdeeedrrceiiicstiiisosintothnhmeemapapkrrkeiiemrmrtaahrrwayyot bbuheeolnnldfdeisfecicaisinaadnrisynfdoooicrfeotfhcnhesteiViVndIetIerEreaoasnstypipnaatrrasttovpofarfrotihphaeobearlntaeainoilannyltaysetsireiesssiotnofdefinwwrtehihctetyetthheerr the VIE would need to be consolidated. Under the ASU, a decision maker would need to consider only its proportionate indirect ciontnetrreoslt piarhteysVrIEeshetldnhth oVuIghEcosmhmoendceocnitsoolnpmrayk.ePrrheevdiotuhsestierdeast shedl rAierdesutlhteodfechiesiAoSnUm. ai kc1rerenartcatshes,coprmemvioonus interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party's interest in the VIE as if the decision maker held the interest itself. As a result of the ASU, in certain cases, previous c1o2n0s1o6l.id3arMondcoocnsclnuostihovnemsaiygnicfhiacanngte.nsFolrveSMr,cnhtewsitatndoaredsifescbtjievteoJcanoosn1,s2t017ciontshidreerratoisopnescitmipvaacptleidcbaytiVonIEomJoadenlry consolidation conclusions may change. For 3M, the standard is effective January 1, 2017 with retrospective application to January 1, 2016.3M does not have significant involvement with entities subject to consolidation considerations impacted by VIE model afancdtornsa.nAcixaal roenld,ii3ondocsnot expetthis ASU to have material impact on th Companys consoled es of perl tons factors. As a result, 3M does not expect this ASU to have a material impact on the Company's consolidated results of operations and financial condition. IpInnrNeNosocvtveaemtmbiobeneror2f2r00e11s6t,,rittchhteeedFFAcAaSSsBEh inisstssuhueeeddsAAeSSmUUeNNono..o22f00c11a66s--1h188,f,lRoRewses.tstrrUiicncttdeeeddrCCtahasshAh.S, Uwwh,hiiccchhhaccnllaarriiffiiieensseggvuuiiidcdataaenadcceecooanshtthhnee dcslaaesstsiififiscctatitidoonncaaasnnhdd qpureisaelnetanttiosnwoofurledstbrioctiendclcuadsehd song in the with those of cash sd cash qialets i th semoef ansh statement of cash flow-s. Under the ASU, changes in restricted cash and restricted cash equivalents would be included along with those of cash and cash equivalents in the statement of cash n70 22775500..00007700 TabeofComets Table of Contents sflloowaws-.se. AAmssocafrrnceesasutsulhltt,,fcelnowitsit.isesnwwaooduduikltddionnno,o llaoonnrggeeserornpperrleeissseetnnittontrrmabnesstffwerersesnbbeettthwwbeeaelnnanccacseahs/ehsqeeuhtivaaenlednshtseaasnntddatrreeessmtterrniictcotteefddcccaasashhsf/elcqouiwisvvwaaoleulnltasditibnnetthhdeeiscloscd ews`ltfhahcteeetnmittvehheneeJtabbonaafullacaananrcscyhee flow-s. In addition, a reconciliation between the balance sheet and the statement of cash flow-s would be disclosed s1,he2e0t15i,ncwliutdhescmroyreadtohpntioonnplieneii. oErnctas aureiraeqlueirnedatn1ds0 prelstyricttheedsctaasnhdaprdislpreovsi.sioFnosroSnM8. rtihiossApScUtvies sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. For 3M, this ASU is effective January 1, 2018, acosnsd.iti3oMn docs ns expect basis. 3M does not expect tis ASU to have with early adoption this ASU to have a material mpoct a permitted. Entities material impact on theare the Companys consolidated esas required to apply the standard's Company's consolidated results of peraioands naa provisions on a retrospective of operations and financial condition. Tn January 2017 the FASB issued ASU No. 2017-01, Clarfinhge Defnion ofa Busines which rows th ising efition In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition ofa Business, which narrows the existing definition of busines and provides a Tamerfor calving whether a rapscion sholdbesescuntd fao sn sequin (or disposl) of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) ofanor tbsinscss. The ASU rues cityfocvlisuubsttantieally al ofthefi aloofthe ross asats sid i+ of assets or a business. The ASU requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in single dental aos r groe upof similardentible asst: theset of rnsfrrd sts nd ives concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities olltivey. he set) not business. Tbo considers busines,th st would eo ncude sn nut nd substantive (collectively, the set) is not a business. To be considered a business, the set would need to include an input and a substantive process that ogether significantly ontibut othe ably to rate ouput. The standard alo arrows the defini ofcutpts process that together significantly contribute to the ability to create outputs. The standard also narrows the definition of outputs. "The dein ofa busines ffsresof accounin such a acquisition, disposal nd goodwill Undeth new dance, fever The definition of a business affects areas of accounting such as acquisitions, disposals and goodwill. Under the new- guidance, fewer acquired set sr expected toboconsidered busines. For 3M, thi ASU ifectiveJanuary 1, 2015 on prospective basis with acquired sets are expected to be considered businesses. For 3M, this ASU is effective January 1, 2018 on a prospective basis with cal odoin permited SM would apply tis si0adpplicaable transactions fer he adopion dt. early adoption permitted. 3M would apply this guidance to applicable transactions after the adoption date. In January 2017, the FASIssacd ASU No. 2017-04, Sinplftng the Tet or GollImpaien Under te ew: indar, In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Testfor Goodwilllmpairment. Under the new- standard, soodwil muir woud be measu3rehde amount by Which reporting unis cryin lu exceed sir value,1010 goodwill impairment would be measured as the amount by which a reporting unit's carrying value exceeds its fair value, not to xcesd the amying valuofgoodwill This ASU climate xing guidance thet ersennsy fo determine goodwill exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impaimenbty calculating the implied i value ofgol by hypothetically assigning the ir aluof a reporting unit 0ll of impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of isassand iis a iat eportiog unit hd been acquired na business combination. For ML, his ASU i fective its assets and liabilities as if that reporting unit had been acquired in a business combination. For 3M, this ASU is effective prospecto mpairment est beginingJanuary 1, 2020, with carly adoption permite. 3M wold pply thisguidance 0 prospectively to impairment tests beginning January 1, 2020, with early adoption permitted. 3M would apply this guidance to applicable impeiment estsafer the adoption dtc. applicable impairment tests after the adoption date. NOTE. Acquisitions and Divesttures NOTE 2. Acquisitions and Divestitures Acquisitions: Acquisitions: 3Mmakesscqiston ofcertain businesses rom ime oie thtareslid with is iti nent withrespectto, amon thr 3M makes acquisitions of certain businesses from time to time that are aligned with its strategic intent with respect to, among other factor, roth marketsand adjcent produclines rfl. factors, growth markets and adjacent product lines or technologies. Goodwill `sGyoneordgwieilsl suing xpeced resulting from business combinations sae tribal ffroomrsbeusaifnterss3Mc'osmabcipniastiiotnisoins olafrtgheelsyeabtutrsiibnuestasbesle. ttoPorttohhefeoxirissttiiinnnggf owwroormrkakftfoiororccreeeoolfiftethhdee0sacauqcuiiirseddiobbunusssiwnieanssesesnssonatendsd siyncnleurdgeiedsbeexcpaeucsteedthteoiamrpisaectafotenrth3eMC'somapcaqnuyissitcioonnosfithsetseebduse inesses so.f Porpoerfs aotrimonasinwfaosrmnaoticoonnsreildaetreeddtobaecqumiastiteiroinas was not included because the impact on the Company's consolidated results of operations was not considered to be material. Tn aintobusiness combinations, SM periodically acquires rain tangible andor nngible asses and purchases ners in In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in Certain cers td mot there quality Tor scscunian bsinss combination. These tractiaorn largely reflctd 5 certain enterprises that do not otherwise qualify for accounting as business combinations. These transactions are largely reflected as ions act purchase wd investment ty additional asset purchase and investment activity. 2016acquisitions: 2016 acquisitions: aDDduudrriiinniggo n22s0011i66m,,ma33tMMercciooalmmpsplcleeqttieesddittohhnee.ascchgqueuiisisiimttipiooonncosoffoSSfeewmmhfifinndcoedhrnAeAtGrGh acaonnnddsoSSleeimmdbabtrreoodwsbseearrnAAcGGe ((scchoolelllteeccwttiievverellyyno""tSSecemomfnisfniinddeder"ee)rd')lmaaoltoenrgigalww.iittIhhn an an SeaSSpdweitdptietzteiemomrbnlbeaaenlrrdi2.2m00S1m1e66ma,,tfei3rnM iadlel(aHrciceqsaualaitshliteCiCaoadanirr,entghBBeduussiiminenepesassvcs))tssaoecocfqqfuilwpirrrheeeiocddcihsalpioloflonnotfshtotehhfetccwooanaurstenostltadihdnaiatdtiecndsgbsblshahealasarrneefcsieocofsifheSSeneeetmtmcwfofiideninrdendegner,o,ohthfeceamoadnidqsauiedaresrtrteerrdpeerddmociiaenntdeKuKririraeezls.ulzIiinlnninmggueelnni,,ple TSawnigtuzaegrelasn.dT.hSeemprficnhdaersisriacleeapdaiindg odrevheelsopebraosfinpersescicsioomnbisnoafttwioanrse (etofcash that enablessuid) durin efficient coding 2016 regted $16 millon of medical procedures in multiple languages. The purchase price paid for these business combinations (net of cash acquired) during 2016 aggregated to $16 million. AArdedjsjuuissdttmmteoennhttses iidnne22n00t116ittooittohhnee oppfrrcelolminmitniinanargreyyntppuurrccihhaaslseepeprraiicncedaalclleloorctcaaatitiniooanns of aberacuiitions within te allocation oefloattheder ems aggregating 0 approimteh acquisitions within the allocation period primrily y $35 millon sh period primarily o. ithebalances lated related to the identification toof the 2013 acquisition of Capital Safety Group SARL The hengteo contingent liabilities and certain tax-related items aggregating to approximately $35 million along with other balances related to the 2015 acquisition of Capital Safety Group S.A.R.L. The change to 771 22775500..00007711 TTabaleoofbfCCoolmnetetensts pperrooivviidssiiootnnoaacll aaarmmiooruuqnntts trseasurtilteneddhiienn maanneaiismmummraetaemtereriniaatll pipemraipocda.ctt 0to tthhee rreessuullttss of of aperstonsi operations in thethind the third quarter quarter of2016, of 2016, a prion portion ofwhich of which related to earlier quarters in the measurement period. Purchased dnifisle nitive intangible asst eed 10 acuisiionsctiviy in 2016 oad $4 milion The asocsted nite: Purchased identifiable finite-lived intangible assets related to acquisition activity in 2016 totaled $4 million. The associated finiteHived intavnegtsiebgulieed i 2016 wil be amortized oa systnatc and rationalbass (emery sight ine) ovr lived intangible assets acquired in 2016 will be amortized on a systematic and rational basis (generally straight line) over a Weighed average fe of 8yeas ives ranging rom tw02o0 yeas). Acquired in-process research and development nd weighted-average life of 8 years (lives ranging from two to 20 years). Acquired in-process research and development and dential table sets or which significant assumed encwalsoexiensionsof underlings gements impacted the identifiable intangible assets for which significant assumed renewals or extensions of underlying arrangements impacted the ctrmination of hie wel ies wre ot materi], determination of their useful lives were not material. 2018acquisitions: 2015 acquisitions: 1 March 2015, 3M (Heslth Care Business) purchased llof thcustanding shares fers Midi] Corp, bsdparcd in San In March 2015, 3M (Health Care Business) purchased all of the outstanding shares of Ivera Medical Corp., headquartered in San Dicgo, California. vera lia Corp. i manufaofcettuhrcaers products hat disinfect and protect dvios sedfo sce Diego, California. Ivera Medical Corp. is a manufacturer of health care products that disinfect and protect devices used for access nto ptient's blowdsra. In addin,i he first quaorf2i01r5, 3M (ndusiial Busines) prchasd he rmiing inion into a patient's bloodstream. In addition, in the first quarter of 2015, 3M (Industrial Business) purchased the remaining interest in a orm equity method investment ora mmstrl mount. former equity method investment for an immaterial amount. oIInnpeAAruutggiunusgstth220e011a55,d,a33uMMar((SSeaiasfnfeettByyloaaonnmddiGGnrgraaippahh,iiccMssiBBnnuuesssiionnteesss,s))fsaocuqmuiiKredKdRaallAll ooCffott.hheeLPoou.uttssfttoaarnn$ddii1nn7gg bssihllahiroens,aoofnfreCtCaepoaifptisctaaallshSSaaaffcetttyyeGGdr.roouuTppheSS.AeARt.RLa..Lss.,wtwsitithh acpired included he sumption o S05 iioofdebt. operating headquarters in Bloomington, Minnesota, fromCKapKitRal&SCafot. yL.iPs.a edin for $1.7 slbal billion, pnretoovficdaosfh alclqupirroedse. cTihoen nceitparscseatts. acquired included the assumption of $0.8 billion of debt. Capital Safety is a leading global provider of fall protection equipment. IISnnepAAaurugagutuissottns2200M11o55d,,i33sMMbusi(Inindnduesustssrtri(iahalelrBeBauufslsieinnreessess))raecqduuii1redadstthhMeeseaesrsteasts)nan.dd eFliaaibdilulietaierssrsaesssdcoicinitaeWteuddppwweirittthahlPP,ollyGypeporormreaenIIynn,tteeormnaratti$i1o.o0nnabalil,,llIInnico'.n'ss Membrina ia cainprovider ofmicoporoas membranes Separations Media business (hereafter referred toand mcduos for Filson nthe fs tencs, as Membrana), headquartered in Wuppertal, Gienrdmstanniys, faord$s1p.0ecbiiallliyons.egMmeenmtsb.rana is a leading provider of microporous membranes aaad modules for filtration in the life sciences, industrial and specialty segments. "aTTvhheeeramimgpepaacctatnoognnithheecocaonssnsostloiliidvdeaastt,eeddinbbcaallluaadnniccneegssahhedeejetstioomffettnhhteesppluuarrtcchhiaavsseee1pptrrhiicceeearallllcooqccauatitiisooinntsornlesalatiteeddbto 22h00e1155meaasccsquuuirisseiimtioeonnntss pasennrddioaadss,ssiiggnneedd neghid weightedafifoovnlledlloroeawwfgssie..tiAAenditdavejnuesgsdtitbmmilneeetnnaatsnssgsiieinnbtl22lei00vs11ee55st, tsoion.tcthhluTeehdpepinrrceeglliaihmmdiijanunaasntrtrmoyy epaanrllloltosvocicrasaeittlioiaonotnianvslsepaptrrmoiiommouaatnrhritiellsryyarerceesqllalutiieasedidtttitooioenntshahdeewiiiddtmehemninanittfietfhiricesiatamtliiooeinnamspaauannrceddtmvveaalnluurtaaepttieisoornisnooodoff,f ecoeprrteiarinnation nthe Fourth arotf201e5, prion of which elses se quarters in the mesarement perio. indefinite-lived intangible assets. The change to provisional amounts resulted in an immaterial impact to results of operations in the fourth quarter of 2015, a portion of which relates to earlier quarters in the measurement period. n72 22775500..00007722 `Table of Conte Table of Contents 15 enney 2015 Acquisition Activit~ Finit~Lived tm(Millions) May Asset (Liability) Ackountsrece Accounts receivable Inventory Inventory Othercuesss Other current assets Property, lan, md pment Property, plant, aaad equipment Purfcithvaedsaengde sss Purchased finite-lived intaaagible assets: Colt perSpt Capital Se Neb(eeoe, oh te Safel~ Polypore Separations Media (Membrana) To@s EE TIYW $ 66 $ 30 $ @ 3s + 02 63 35 10 i 1 n 10 1 6 12s 7 m 36 128 Other 7 $ 4 1 7 Total 103 102 12 171 Intan~bl~ Asset Weighted- Ue Average neds Lives (Year ~ OPCPtauhctseetnrostmseecr rhelnateodlbinaotsaenydgibinletaansgsiebtlse assets. 445 "544 DOetODfhitehfneeiniraitttmeeec-oflhiirvnvteoddliotzgrrayaed-dbeeinannastaeaamdnnegeisisnbtlaeaaagisblse assets 2%85 26 PPPuuurOrrcccthhhheaaarssseeaeddmd giionnorddotieedzffwaiiibnnlliilettee-inlvitvaeenddgiiibnntlteaannaggsisibbelltesesaesstests 17E562l40 APAIcnuctcrecocroheuusantnsbttesadppragaiyoynaoagbdblwldeeeialaltndd theother silts liabilities, et ofatersts net of other assets 116(,170606s5)4)) DIintoerreestdbeaaxrainsg tdebstilty) ih (766) Deferred tax asset/(liability) (464) 270 i 7 @ 7 11 2 1 12s 7 42 1 3 6 a= o=s2 20502802 + 636 az=) a aaam6y) (122) 40 755 16 7 62 7 1 128 7 1 33 16 2 2 4 520 95 2,495 (5) (232) (766) (7) (471) Netsets spied Net assets acquired sams $ 1,724 $ 0s 1,037 $ ams ao 153 $ 2,914 `Supplemental infomstion: Supplemental information: Ca pid Cash paid Less:Cashsired Less: Cash acquired Cahpid, etofcashsquid Cash paid, net of cash acquired sums $ 1,758 $ 334 Toms $ 1,724 $ 0s 1,037 $ T=s 1,037 $ ass 20m 154 $ 1 3s 1 Ts mon 153 $ 2,949 35 2,914 PPTiuuvrreccdhhiaanssteeaddngiiiddbeelnnettiiaffsiiaaebbtllsee afficinnqiiuttieer-lleiidvveeidnd i2inn0tt1aa5nnggwiiibbllllee abasessseatemstosrretelilazateteedddtotnoosaaccsuqyiussisitiiteioomnnaaaacctntiidvviaityntoiinnna22l0011b55atstoosttaa(llgeeedndeS$ra11l.00lybbiislltlliirooinng..htTThhieeneaa)sssosoovcceiiraaatteedd finite finite- wlWcieeverietiggdahihtnitneettddar--naaagdvvieeebnrrlaaaegmgaeeeslssliaieffsteesooocaffciq1a1u44eiyrydeeedwaairtirshn ((2tlli0hivv1ee5ssCwarrapaiinlnltggabiilnenggSaaffmfrreootomyrmtiattzwceqodouiot1so0nit22ai00osnyyyeeswaathesrim)sc)..ahhtIIiancnddvaeeenffbdiinneriitaeteten-iloliinivvnaeeldedxbiiiannssttieaasnnnc(gggieibeblnoleeerroaaassvlssleeyetrtssst5oorf5af$iy$g5e5ha22rts00l.inmmaeii)llloliovoavnenrhrriaeesleltaaottereyttooof claeeedxarditpaininenggctmmraa0adrrekkgneeeattnm-seshrehaasatrreaeescsppaooosscsihiiattfiitloeoodnnswsw,,s hihftaahovvrteeh3bebMeeCefenaoapraniatnadndlaiaSneradefeefnintifynteinatndcedqeepuddeirstbiiotoideobonefccwtooihnnmitetcii.hnnuuAhoocauuqvssuelliyybrerreeeednnneeiiwwnne-edped.rx,oicasaetnnesddnstctheheasesefsoaarosrsccoohivcaeaiartnted5e5dddeyppverreaoolrddsouu,cpchtmtssaeovnoeftf awwahhnhidiisccthhoraayrreeof eididexdetepnenerticimfftieiiandsbalttloeeioiignnnettonaafennrggtaiihtbbeellieecaauassssshesefeftutllssowfloo-irsvrefwwsohhrwiie3ccrMhhesnsfiiooggtrnniiamffnaiitcceiaanrnnidtatelaaf,sisnsiustmeeepdderrreioenndeewowafaltlissmooerr. extenofsunideorlnyinsgarrangements imped the Acquired in-process research and development and extensions of underlying arrangements impacted the determination of their useful lives were not material. 2014acquisitions: 2014 acquisitions: 3m3aMMtercciooalmm.pplIleentteeApddrioolnneeb20ub1su4i,snine3essMssc(ocHomembsilbntianhtaCitiaoornne ddBuuursriiinnngges22s00)114p4,u,rttchhheeaiismedpmaaclptoooffafwtwhhchiictocuhhtsootanatnthhdeicncogoennsgsoollyiiddaatiteenddbtbaalelaarnoncecfeeTssrshtheeeseoettSwwoalasustnniooottnccsoonnLsLsiCi,ddeerreedd mheaatdeqruiaalr.tIenreAdpirnil T2r0o1y4,,N3eMw (YHoreka,lthTrCeaoreSoBluustiinoensss)LLpuCrcihsaasepdralol vofoitfhdeaeoiuratsatannaldyitnigcseqaunidtybuinstienreesstsnoteflTirgeeoncSeoltuotiboensslLthLeCa,r payers headquartered in Troy, New-York. Treo Solutions LLC is a provider of data analytics and business intelligence to healthcare payers daunrdinprgo2v0id1e4rsa.gaTrheegpaucrdch1a0sSe94primciellpiaoni.d forthisbusinesscombination (netofcash acquired) and the imopfothaermcattters nc) and providers. The purchase price paid for this business combination (net of cash acquired) and the impact of other matters (net) during 2014 aggregated to $94 million. p`SeeSrpcaeernaptteailnytr,earaasesstdtdiiiessnccluu3Mssy'sssee,ddcoiinnnsNNolooittedea66,t,eddduurrSiiunnmggi22t00o11m44o,, 333MMM (vLviiimaaiStSeuudmmisiuttobosmmidooia33rMMyfLoLirimm9i0itteeddbi))llppiuuorrnccJhhaaapssaeenddSeSsueummYieitnto.ommBooeFcElaleeutcsrteriicc3MIInnddaulusrstertariideesys,,hLaLditdd.''ss2255 percent interest in 3M's consolidated Sumitomo 3M Limited subsidiary for 90 billion Japanese Yen. Because 3M ocfonctarsohllfilnogwis.nert n his consolidated subsidiary. this transaction wasseparately reca aofinrancdingaectivdity controlling interest in this consolidated subsidiary, this transaction was separately recorded as a financing activity in the statement already had a in the statement of cash flow-s. PPliuuvrreccdhhiaanssteeaddngiiiddbeelnnettiiaffsiieaatbbsllee affcinnqtiuteielr-lieivdveeiddn i2inn0tt1aa4nnggwiiibblllleesbsaessacsmetotssrtrreeillzaaettededdtotnoosaecsqqyuusitsiseiimttaiiotonincaaacctntiidvviiattyytoiinnn a22l00b11a44sttsoo(tawgleeendder$Sa33l44lymmisillrllioiongn.h. tTThhieenaea)sssosoovceciriatteedd inite- finite- lwieviegdhitnetdan-gavibrlaegaeslsieftesoafcqsuxiyreedarisn 2(0i1e4swrailnlgbiengamroormtiztedhronteoa 1s0ysyteeamrsa)t.icAcaqnudirraetidonina-lpbraosciesss(generally straight line) over a weighted-average life of six years (lives ranging from three to 10 years). Acquired in-process 773 22775500.00007733 Table of Contents mrreeassnecaagrrecchhmaeannndddtedviemevplealoocptpmemedentnthtenadnedderdidmeeinnftaitfiiialobneleofiinntttahanenggsiibsblleee aalsssseettvsseffsoorrerwwhehiiccnhhossmiggnnaififtiiscaaanntt assumed assumed renewals renewals orextenosf uindoerlnyisng or extensions of underlying arrangements impacted the determination of their useful lives were not material. Divestiture: Divestitures: 3M may divest cram businesses from time 1 time based upon ee ofthe Company's portfolioconsidering among tbe ems, 3M may divest certain businesses from time to time based upon review- of the Company's portfolio considering, among other items, factor lative 1heexten of state nd ecological lgnment ad optimization of capital deployment, in odin 0 factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering cling the sins results hegratestvalu retonfo theCompany andfo harold. considering if selling the businesses results in the greatest value creation for the Company and for shareholders. InIInncJJ.aabnnauuasareryyd 22i00n11C35h,,i33nM,M C((aEFllliefecocrtrrnoionai.iccss20aa1nn4dd sEEannleererggoyyfBBthuuisssbiinnueessss))iccoonmmwpeeplrleseetteeSdd4tt6hhemsislallileonf.oiftiTtshsilgsloroobealcltSSitiaotcinc oCwaonsnttnrootl bbcuuosnsiisnnieedssessret0od mDDeaesstceaoo,IIndnudsturiess Inc., based in Chino, California. 2014 sales of this business were $46 million. This transaction was not considered material. AI1ndvttihhseoffroosuurrLttPhh.qq(uaurOteraFotofFofr22s0)0e1t1l55,t,h33eMMs((SSeaaffoettftyy aaFsnndsd GGbrrraapaphrhiyiccsssyBsButuscsiinnnseebsssu))sicenntetese.rreddTiihnntooaaslgrsrseoemfmetnheenttssNowwtiitthhhAOOmnneeerEciqucuiaittybuPPsaairtntneeesrrssnCCdaatppihitetaall jority AooHffodttrvhhrieesbyobursussyissLinnt.ePeessm.sss(oOoubtuuEstsiPsidi)denteeoosofsfceNNlllooortshrettedhhanAAstmsmehetreesriioiccfsaat3ccM llqoo'ssseeuddlibiinrnoaaOOfrycc2trts0ooyb1bsete6terramainsnesddbcNuNuosroisvnvdeeesmmsob.bteTerhrhre2200bs1ae15ll,e,osrwroee)ssfppteTehcncettiDiNvveeoelclyrey.th.mbTTAehhmree2essr0aailcl1eea,nooff3tbtuMhhsei(nrSreeaesmfmseaataiiynnnadddneedtrrGherooafmptfhhaheejiorcisty lBBHiibubrrsuaairrnyysessssyyi)sssattenhlesmmoosesccbboousummspsilipnsneeleetssts)ees,ddcpttlhoheseaesosdafrllieenohteotfhfeTFFrfaaiaafrbfsitcFFqaaSubbararritcieyacruaoatuofnt,2daoa0S1wwe6hchou(orldlililtsyyyc--uoDoswiwsvnneideesiddofunss.rubtbshdiseidrdiebiaaerrloyylwoo-f)fvt.33cIMMnel,,aDttosieoocnlHemimsllbasenNNrau2gum0emb1meb5ere,npr3tplMalsattaee(SstsaiLLfioeimmtniytiteoaednd.db. TGrThhryeeaphics clcFiuubassrhttaoormyFmaeesbrryrsssitwwceaiminthhts,boonunl-s-ppionrreeepsmmsia,issrpeeoathfhratahrroddefwwtTaharerreeaTaarncnadfdSfisscaoofStltawafaearrtyed,, ammSnaedaciiunnSrtteieetcnnyuaarDnniticcyveeiDassinivddcisnssioeirrsniv,iccdc,ee,ldiaavinneddrnssacFnnirrerecmnoucrleahgrtgiimoiannnnggumflcaaloocnuuta-udgbr-ebeamrasoseeenfddt csddiooiggliusitttaaeiollplnlleesannttddoeiisnlniaggbnrlpadlarayttfioormn.. rFssiaiaggnannsbaaaggFceeaibossroonillscuuattwuiioatoonsn,ssS.a1TlTh0esho4epamaagigraltgrloreoefgng.atahttTeehcTceaarsaCshfhofipmpcrprooSaccaneefyeeetddyrssaernleacdltaiotSvivereecadutnerotietdhttyheepD2r2ie0v0-1i1ts3a5ioxingg,laoiibsnlaalofllieir$baa4rda0rirnyymgsisyFlysrlsetotneencmmh(ssamaapnnapddnruFFofaaxaacibtumFFraaeabtrbSreroi1ilcfca0yalniutcmteoindlsdiieioevnpselstaatitfietueusrrreaenxd) in 2015 as. rsa transactions was the$104 sl ndany million. The aCdojmusptamneyntroecfocradeydina gnevtaplree.-tax gain of $40 million (approximately $10 million after tax) in 2015 as a result of the sale and any adjustment of carrying value. yITnnsttthehemfsiirtbstusaqiunaertserro0offOr22n00e1166i,,t33MyM ((PSSaaarfftentteyyrsaannCddapGGirtraaalpphhAiidccssviBBususosiirnnesess.ss))(ccoOomEmpPl)pe.lette3edMd thhhaeedssparlaeevooiflofuthesheleyrresmoeladsintidhenrNdooofrfettthhhreeAamasesreitsscaoofnfbs3uM si'nsM'selbsirbarnarrdyy the cmsmiyaarjsjcotoelrrmiaitttsyyioboonfuftsmtihhaneenesabbsguustesoiimnneOeenssntsseoosEuoutqlstuusiitdidteiyeonoPosfafN0rNtonoHerbrrtrtshaCrAAyammpeciuertsariitlccoAaamtedtoorvsOiOsEwoEirPPsthLiin.oPnth.h-eep(OrffeoEomuuPirr)stt.hhe3qqrMuaarhrdetaerdroposfrafe22nv0a01ido15su5..srolTylThhaseeeorlbl,dibatrhmanerayNnysioyscrsttotheeamAmnssmebbeauurnsisdciiannsneessibssucddsee,ilnlaiievvnseedsrrssaannd the circulation management solutions to library customers with on-premise hardware and software, maintenance and service, and cChoenmniicnagl cPlroouddu-cbtassGerdoduipg.italpoerntdfiolnigoclotmfpoamn.y oAflAsui dhaePrfirvsattqe Equuitaoyftt2h0a1e6,sSiMof(t3InMsdusptreBsursiinzeds)psioyludr0thIaonvfaotne emerging cloud-based digital lending platform. Also in the first quarter of 2016, 3M (Industrial Business) sold to Innovative an aCaoddhhheeresmsiimivvceeaslsl Pbbauuroassdinitnudnecessotsss (Gsnffoororrnsmumeper,rillnayytpokkotnnrhotoefwwornlneiosaaissdcPeoPnomtolilpayflafonorayamomo)l).f.A.TThuhidcsisaoxmbbmuuPessririinncveeiasstaessliEisrqsoauofipptiryno,grvtihadenoedraovsiofsnfespitpusrlreaeodstsfissou3uenrrMiiszzr'nesedddpipprenoosdllsysuuutrririeczathelhdaafnnpoeeoalfmfyoouasarmeemtghaamaddnehheenesstfiiiovsvnaeetmhe United formulations and systems into the residential roofing, commercial roofing and insulation and industrial foam segments in the United 2S0t16s25wi.thransaolfatshelslofaeopfprhsoeismabtuesliyne$s2s0esmirlelocno.rdeTdheinCsloimnpga.nygrreacolrdeadnd pardeministraaitivoef e$x4pe0nsmeisl)l.on i he irs quateorf States with annual sales of approximately $20 million. The Company recorded a pre-tax gain of $40 million in the first quarter of 2016 as a result of the sales of these businesses (recorded in selling, general and administrative expenses). IiTnntOOhucattoseberlr220s011l66s,,o33fMMspI(IpnneddouuxsisttmrraiaatllelBByuusSsiinSneessmsi))lslsooonld,d tthheeaparssossevittsdefof siotsfateemmpdpoorrhaaryybeuppcrrkos.eteedscttiifvvmeepfloilrmnasybbuupssoiinnteecsstss itoov PPfrirelegmisss vLLoLLdCC..inTTbhhirissobbauudssiinrneaesnsssg.,e fwoHicfinetindhnsudisanutngsrntibureiuaeslss..isanIIlnneessDD,oeecfcweeiamtmphpbbreaeornrx2u2i0ma011la66t,se,al33yleMMs$o5((0fEalmFepciplterlrioooxncnii,mceiasstaaeasnnlpddyroEESvnn1eie0drregmgryyiolBBfouau,sdihnsteeossiisUv)nMess-IooeblCladdsOctkRth)heEede.aatesTsmhseeaptesgoogortfarfrsieytssgpaccraotattehteochsdteieevllebbianaftgittltmeperrrsyiycueteesclechdhanntcioinllvooaeggbyyoroocatuudhtt-sreantgweo. blbliuucesseisinnnoseeifssnssgteehssbewusweasaibsnsuesS$si8sn6,6ewsmmsiietlihsllliioao(nnnr.n.eucTTaohhlreedsaeCCldoeoismmpopsafeanlanlypyipncgrre.oocxeroimrdndeaeetddrelaay4ppn$rd1er0-atdaammxiignlglaiiasioitnnnro,aofttfoiS$vU77e11MexmmIpCiileOllnliisRooenEns.)iinnTtthhheee fourth quaorf t201s6 aggregate selling price fourth quarter of 2016 3a result relative to as a result of the these two of the sales of these businesses (recorded in selling, general and administrative expenses). GIInneDDmeeacceelmmobbeerNrV.22f00o11r66S,,8335MM0 (m(SiSlaalffoetnty,y sasnnuddbjGGercratapp1hhiilccosssiBBnuugssiiannneesdss))oaanennrnooauudnnjccueesdtdmttehenatttisitt gaTgrhireeseebddustoinsseeeslll,sitwsietidhen2n0tii1ty6sammlaaennsaagogfeepmmpeernnottsbbiuumssaiintneelsssytfo2o 05 aGmmnieidllmllisooatnnlht,,oniitsNsicea.Vaalte.diafodeonerr,r$ii8ans50idwdeeemlinlittlilatyiyosnmme,acasnnruaabeggjeeemcmmatteetenonrtitscasolloolssluuiatntniigodondnassonpdcprurooomvtvheiiedndritinnaggdrejabubdisieotormmmse.eetntrTrtiiscch.HThatarhrrdiadswnwsabaraucresteiinoaaennnsddsi,sssewooxffitptthwweaac2rro0eed1t6hthotastacllseeonassabobldfleuearpieidpnenrgnoitxihityyme avvfteeseirltifyfihicc$aaa2tft0iio5oonfn and authentication, as well as secure materials and document readers. The transaction is expected to close during the first half of "2s0l1e7s.ofInspmpurosseima2t0c1l7.y SS4M5 l(iSoany,aondHGOraYpAhiVsisBiuosniCnaers.) sTohled Choemapsasneysoefxpesctsstpyepeaseipntioofeappyroxeimbautseilnyes$s5,0w0itmhilalnouns53. 2017. In January 2017, 3M (Safety and Graphics Business) sold the assets of its safety prescription eyewear business, with annual resofutlheste to desires. Th sales of approximately $45 million, amounts of to HOYA Vision Care. The Company expects a pre-tax gain of approximately $500 million as a result of these two divestitures. The amounts of "74 22775500..00007744 TabeofComets Table of Contents mor asstand lilaissoes with hes disp groups classified asbe forsale as ofDscmbe3r1 016 include major assets and liabilities associated with these disposal groups classified as held-for-sale as of December 31, 2016 include accounts reeiable: property, lant and concn (vt. tage assets, nd deferredrevenue(she current bie) of accounts receivable; property, plant and equipment (net); intangible assets; and deferred revenue (other current liabilities) of approximately S25 milli, S35million, 535 millon. and $3 millon, respecte. In adn, approximately S270 milion of approximately $25 million, $25 million, $35 million, and $35 million, respectively. In addition, approximately $270 million of soodwil i ximstd orbe abuablefothes busineas of Dicer 31, 2016 based upon relative fi value. These amounts goodwill is estimated to be attributable to these businesses as of December 31, 2016 based upon relative fair value. These amounts Have notben segregated and ae clase within the existing corresponding ln emson theCompanysconsolidated bla have not been segregated and are classified within the existing corresponding line items on the Company's consolidated balance Shee Theagrogatc operating incofohems weo businesses was ss than $20 millon incachof2016, 20and120514 sheet. The aggregate operating income of these two businesses was less than $20 million in each of 2016, 2015 and 2014. NOTES. Goodwill nd Intangible Ase NOTE 3. Goodwill and Intangible Asset s PuaPrcutcirvchihataysseenddtghgooeoododwuwiilill nffrrogommtaabcclquuilissiiotiiooinnnssclttuoodttaelsleeddheS$11n44tmmiilillliioomnn oiipnnfa22d00a1j16u6,s,ctnnmoeonntntesooffowwthhhiiecpchriilssmddieednduaucrcttiyibballleeloffcoaorttitaaonx ppooufrrpppouosrseecssh..asTTehheepraaicccqequuwiiisstiihttiiiononnthe nsaocneteoivyeietadyarrimnmfetraehosaemsuufarorceelqlmmoueweinnsitnti-gpcpenetrasriibotolodedtaaffloloeslldollooi5wnw2cii.nln5uggdbppierlrsiilooitrhoranecaqicnunqeiu2ts0iiis1mtii5tpio,onans5c,st6,o3wwfhhamiidccijhhulsiitnonmccreroeenfaatswsseehtddoicggthhooeosodpdwdrweeidlililumlcbbtiyniba$$lr33ye99fammolirloillalcliiaootninpondduruporiifsnnpgg.u22r0c0T1h1h6a6es..eaPPpmuurrroicccuhehaanwssteieitdsdhihn ethe goodwill from acquisitions totaled $2.5 billion in abanlsnlcaotibyobnuasnidneotshesre"gmcenlt ufollowtsh Following "Translation and other" column in the following table primarily relate shanges in eign 2015, $636 million of which is deductible table primarily relate to changes in foreign curncy exchanges. Th goodwill for tax purposes. The amounts in the currency exchange rates. The goodwill balance by business segment follows: Goodwill Goodwill in(dMiutsiltilirooinnasl) HeISSanaaldffuetttsyhytrsCiananadldreGGrraapphhiiccss CHEEollneeasecltutcrhomtnCeoiracnrsieacnndsd Energy Energy TCoonssuCmoemrpany Total Company Dec. 31, 2014 dhe Hin bee be in abe me Balance S2005 GT 3 (00 32 5 -- 3G) 328 $ 2,042 leo ae sae ae sa 1,650 io ww) ie 2 oan uw 1,589 15st a isi -- an uw 1,554 as 19 20 -- sm 215 STi S20 Sov Son 3S 3 be sou $ 7,050 2015 acquisition activity $ 637 1,764 94 $ 2,495 2015 translation and other $ (106) (72) (59) (44) (15) $ (296) Dec. 31, 2015 Balance $ 2,573 3,342 1,624 1,510 200 $ 9,249 2016 acquisition activity $ -- 41 12 -- -- $ 53 2016 translation and other $ (37) (59) (27) (21) 8 $ (136) Dec. 31, 2016 Balance $ 2,536 3,324 1,609 1,489 208 $ 9,166 Acoountng standard equi tht gill be ested for ipsiment anallysndbetwen annul ests nce circumstances Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances ua h change i reporting unithetstisngof econrabily of giant asstgroup wirepoi rting ni. AL 3M. such as a change in reporting units or the testing of recoverability of a significant asset group within a reporting unit. At 3M, reporting nits corspond 0 division reporting units correspond to a division. cAAossntddieenssuccirrniibgbeeefddfioinnrtNNaotteeim1p1r66,, fefffetchiteivvaeeliinittghheenffmirtoesftnqqtusaubruteasrionotfefs2e2s00e1sr1,6r,ottuhheendCCoommmaprpkaaenntyysaccnhhdcaannuggseeoddmifstesrbbu.ussiinFneoesrssasnseyeggpmmreoendntutcrrteepcpoohrrattniingngegsiinthitattss esd in crTreoeeppnpoootrirrnttiiiunnnigggngunnineitifstf.occrhhDtaatnnuoggieiesmns.,ptttrhhhoeeevCeCfoiotmhsmpeqapaanluniygyanaamrppoepfpntl2ilte0eiod1f6rtti,hthse businesses around markets and customers. For any product changes that resulted hreeClaotmivpeafniyvcaloumeplmeteed is1t0asdeehtsesrmmoeinntdtofhae imppacet nontggoooddiilollfimhlepaiarmesntoor relative fair value method to determine the impact on goodwill of the associated in reporting crepoortding reporting units. During the first m its ipmpacti iedstby hthse units impacted by this qfnnoueeuwawrr-ttehssrtqrcoutcfut2ru0ere1eo6raaf,nn2tddeh0edd1reeC6tteofrromamniplinanlneeyddrectthphoaoamtrttpnniloonegtiiemmdipptiaatsisirraammsneesdnentsdtseeemtxxieiessrnttmeteiddon..feTTdahhnheeya potential goodwill impairment for tConmopman pasmo coeximstepd.lItensaatndneiuisdn., Company also completed its annual heCompany hadno mpimeof ngootdisl goodwill impairment test in the fourth quarter onfp2r0i1o6 curs for all reporting units and determined that no impairment existed. In addition, the Company had no impairments of goodwill in prior years. 7s 75 22775500..00007755 able of Coen Table of Contents Acquired Intangible Assets Acquired Intangible Assets "The casing amountandaccumulated amortizationof acid st-ived tangible assets, nado othe belnce of on The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of nonamorizabe tangible asst, aof December 31. ll amortizable intangible assets, as of December 31, follow-: tian (Millions) Comer red mange ames Customer related intangible assets Punts Patents Other esnoloybased intangiblesets Other technology-based intangible assets Definite vd tradenames Definite-lived tradenames Otheramorzable intangiblease Other amortizable intangible assets Toa gros coming amount. Total gross carrying amount ame2016 5 WES $ 1,939 $ 602 20524 a420 au211 5 ET $ 3,696 $ ane2015 EZ 1,973 a6616 ss525 a421 216216 Sos 3,751 AcAAcccuccmuumumululalatatteeedddaasmmmoororttritizizzaaatttiiiooonnn---- cpcauutssettonotmmseerr elated related AcAAAcccccuccumuummmuuluultllaaatetteeedddd aaaammmmooroorttrrttiiiizzzzaaaattttiiiioooonnnn -- dtpoatebhteeetnrtteesecclhhinnvoleldoogtgyryabbdaaessneeaddmes Accumulated amortization TAoctcaulmuclcautmeudlmteodrazmaoirtoinza--tiooner Accumulated amortization definite-lived other tradenames Total accumulated amortization on (ss) (797) wn anny (497) an) as) (302) a0 ais (236) ams de) (173) T aw I 175) (2,005) $ (668) (481) (252) (215) (169) (1,785) Tol teived naasgsets --enet. Total finite-lived intangible assets net s 101s 1966. 1,691 $ 1,966 NNoornT--aoamlmooirrntitzzaaanbgbilsebliiennttsaaenngtgiisbbllee sanesesttests (primarily (primarily adenames) tradenames) Total intangible assets net as 629 5 FET 00 2,320 $ 635 2,601 CCIeoeurdrtiainignn- trmraaarddkeeenntaammsehessaraaccpqqiuuiiorreenddsbb,yya3IvMMeaanrbreoenctotaanamdmoraotrritizzeeedndbdbeeeccadauus1s0eebtethhecyyonhhtaaivvneeobubseeeleny iirnn eeexxniissetteennccaeenfdfootrhooevvaeesrrs55i58syyteeeaadrrsps,rhhoaadvvueecaatofhsfiisswttoohrriyycoohffare elexapdeicntge-dmfaorgkeentesrhaatrecpaosshitfiolnosw,s fo 3Mfo have been snand indefinite period ofim. are intended to be continuously renewed, and the associated products of which are expected to generate cash flow-s for 3M for an indefinite period of time. Amortization expense or the years ended Deseber 31 follows: Amortization expense for the years ended December 31 follows: tong (Millions) Amorbasior spores Amortization expense sm2016 Toms $ 262 $ ans2015 ws 229 $ ous2014 7%228 Expected amorizaton expenseforacired amortizbl intangibleassesrecorded aofDesember 31, 2016 follows: Expected amortization expense for acquired amortizable intangible assets recorded as of December 31, 2016 follows: QAmuoretssaiorexpense (Millions) Amortization expense an ws we we er wAie 2017 Tar mI mE my erm $ 223 2018 $ 202 2019 $ 190 2020 $ 180 2021 $ 164 After 2021 $ 732 "The precoding expcted amortization expense i an sstimate. Atul amoofuamonrtitzatison expense may die fom estimated The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amoundtus 1 addons tang asst acpitions,changes in foci currency xchange rte, impactof nngible aves, amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, acelerated amortizationof tangible sts and oer cents, 3M xpenses the cots incurred renoxin he term of accelerated amortization of intangible assets and other events. 3M expenses the costs incurred to renew- or extend the term of intangible ass intangible assets. 7% 76 22775500..00007766 Tabs of Comes Table of Contents NOTE 4. Restructuring Actions NOTE 4. Restructuring Actions 2015 Restructuring Actions: 2015 Restructuring Actions: foDDcuuurrisinneggdotthhnee ffsooruuurrcttthhuqqrusaaortxecrrrohofefca22d00,1r15r5,,gmmlaaynnaanggteehmmeeennUt.tSaa.ppprsronodvveeoddwaeannrddgccrooommwmmiinittgteedmdattrookueuntnsdd,eerirtttaakhkeepccareetritraciuinlaerreessmrtpruuhccattsuririisnnggonaaccEttiriooonnpsse,ppriMmaiarlriley Fas, focused on structural overhead, largely in the a2n0d15Afpirceaca(cEhMaErAg)eoafndS1L1u4inmiAlnlviroinca. This and Africa (EMEA) and Latin America. This impactd U.S. and impacted approximately slower-growing approximately 1700 positions markets, with 1,700 positions worldwide snd resuled in orga particular emphasis on Europe, Middle East, worldwide and resulted in a fourth-quarter 2015 pre-tax charge of$114 million. Componentsoftheseresrctuin charges ae summarized by busines sgment a Follows: Components of these restructuring charges are summarized by business segment as follows: iQn(Mduuisllioenss) SHaeISnlaadftuelytsytraCiaannolddreGGrraapphhiiccss Health Care CEolencnteornicnds Electronics and Energy Energy CCCo"rooTprnoopsuroularmEattxeerpaaennnddsUUennaallllooccaatteedd Total Expense Year ended December 31, 2015 nei etd dw Employee-Related 5 El ws w= S 30 n n 11 Asset-Related $ 12 = 9 9 8 a 2 8 4 3 = 3 3 5 5 37 s wT TF Tw $ 98 $ 16 Total 42 11 9 12 3 37 114 "The preceding restructuring charges wer esonded inthe income statement as follows: The preceding restructuring charges were recorded in the income statement as follows: prC(oeMstiolnliosnse) r ReCSSseeoelllsalitinrnoggc,f,hsgg,aeeldnneeeservraaellloaapnnmddeaanddtmmaiinnndiisstetrlanatiitvveeedeeexxxpppeeennnssseeesss Toul Research, development and related expenses Total ams2015 wo40 @62 212 T Tit $ 114 Componeofnthtsserestructuring actions. includingcashand non-sh pts, follow: Components of these restructuring actions, including cash and non-cash impacts, follow-: (EMxtpiolelinnonssse) eued NoNCEnxoo-pnsce-cnapassasehyhimcncehchnauatnrnsrggeedess CCAAoascschcreppuaaeryydmmrereeennssttttssrruuccttuurriinnggaaccttiioonn balances balances aas ofDecembe3r1,2015 of December 31, 2015 CAacshcrpuaeydmreesnttrsucturing ction blancsas ofember31,016 Accrued restructuring action balances as of December 31, 2016 Bape Awe. EmployeeRh bie Related Sow Tow $ 98 a9 (8) an = (27) -- S 63 7 = (57) -- $ 6 AssetRelated $ 16 (16) $ $ mwTotal Tom $ 114 ey(24) an(27) Ta S 63 5(57) Te $ 6 Nonash changes include eran pension semennd speci erminaton bene esordd n accrued defined bene pension Non-cash changes include certain pension settlements and special termination benefits recorded in accrued defined benefit pension and posttiremnt bene sd acclrteddeprecation esaing rom theseston of weofcern ong ved sets, and postretirement benefits aaad accelerated deprecation resulting from the cessation of use of certain long-lived assets. n77 22775500..00007777 TaofbColntee Table of Contents NOTES.SupplBaleancmeSheeetnInftormaatilon NOTE 5. Supplemental Balance Sheet Information AAmcicclocliouounnnttstsDppaeaycyaaebbmllbeee(irinn3cc1llu,udd2ee0dd16aa,s33as0esdpepa$ra7ra9attemeilllilnnoenietaetmmDieinncethhmeebCCeoronn3s1s,ol2ldi0do1a5tee.ddABBclacalunancmceleaSSthheeedeedte)piirnneccclliuuaddteeissodndffraofstscpapapayiytaaabbllleeecaosnnesdd1eemm0aa1nndddoSof8f$$98888 million at December 31, 2016, and $79 million at December 31, 2015. Accumulated depreciation for capital leases totaled $89 mpillorn aoinndShv9e8amiiellotdhnatsfeoolflDodewsc.ember31,2016, and2015,respectively.Adinasupplementalbalancesheetinformationis: million and $98 million as of December 31, 2016, and 2015, respectively. Additional supplemental balance sheet information is provided in the table that follows. (Millions) Other current assets EET esrtp ich Prepaid expenses and other Derivative assets-current Insurance related (receivables, prepaid expenses and other) Total other current assets memes Investments Hah Equity method Cost method Ciera Other investments Total investments 2016 2015 R s a us t Pr $ 1,014 $ 1,081 148 211 i) 5 109 106 $ L271 $ 1,398 s @ 0 $ 60 $ 56 67 59 3 1 2 $ 128 $ 117 Property, plant and equipment - at cost fpesme------ Land Buildings and leasehold improvements foi Machinery and equipment samws s $ 341 $ 7,252 i 14,935 ssi354 7,120 ict 14,743 Construction in progress 809 723 Capital leases 162 158 Gross property, plant and equipment 23,499 23,098 Accumulated depreciation (14~983) (14,583) meme Property, plant and equipment - net Other assets $ 8~516 $ 8,515 Deferred income taxes $ 422 $ 675 Insurance related receivables and other 68 49 Cash surrender value of like insurance policies Other WR z Total other assets $ Obercaren aii Other current liabilities cs 236 255 981 $ cis241 253 1,218 fe Accrued trade payables Deferred income Derivative liabilities -- $ 578 $ 566 551 518 92 65 Employee benefits and withholdings 155 148 Contingent liability claims and other 201 147 Property and other taxes 90 89 Pension and postretirement benefits 66 60 Other 739 811 oheliia Total other current liabilities Other liabilities $ 2,472 $ 2,404 Long term income taxes payable $ 244 $ 154 Employee benefits 256 254 Contingent liability claims and other 719 739 Capital lease obligations 45 46 Deferred income 15 19 Deferred income taxes 145 551 Other 224 261 Total other liabilities $ 1.648 $ 2.024 778 22775500..00007788 she of Cons Table of Contents NOTE6. Supplemental Equity and Comprehensive Income Informatino NOTE 6. Supplemental Equity and Comprehensive Income Informatio n CCreoopmmormmtoeodnnassttcoooccskkt ((i$S.t001h1 p5po4a7rr.v3aa0l6lu.ue7pp7ee8rrssshaahrree)aasootff3Dr3..e00ciebeiolml)inobne3r1ssh,ha2are0rs16iis, as3uu5tthh4oo7rr0iizs2ee9dd3,,2wwisitthhha99r44s44a,,t003D33e3,c0.e50m65bssehhraarr3ee1ss,2sis0sd1u5e.,da. nTTdrer0aas8usry39ss8tto.o4cck6k2iissshares December reported at cost, w31,i2t0h14.34P7r,e3f0er6r,7ed78stsochka,rewsiatthoDuetcpeamrbvearl3e,1,o2f01106,m3i3l4i,o7n02s,h9a3r2esshisaareusthaotrDizeecdembabteurni3s1s,u2ed0.15, and 308,898,462 shares at December 31, 2014. Preferred stock, without par value, of 10 million shares is authorized but unissued. CSCoHashipdvoiviriddsehennadrds.sddeIenccl2laa1rr5ee,dd aaFnnddsppaiBiddoattorotdtaalloeefddDS$i1c1.1t11orppseerrdesschhlaaarrreeefdfoorracesoaoccohngqduu,aarritierrr,iinan n220d0116o6,,rwhtihiccqhharrrecesesualdtleiedviidnettnodotalol yyfeaarr1.dd02ee8cclplaarrreesddhaddriievv,iiddweehnniddcsshooff q$rre4aes.ru4sle4iterdpde2iir0nn1soth5oatdaraeil.vcyiInedaaer2rn0d22100o511,53f3ddMeo$c1'cs0l2aa5BrrepoddoaerdddsiivvhoiiafddrDeenn(iddrpessscootdoffri$$sn33dM..0ea07cr7l5cahrppe2eed0rr1ass5hh)saae,rrece.oh.niIIdnnc, DDhtheeiwcrcdhee,emmnabbneaedrrd2f2o00du11r44t,h, quarter dividend of $1.025 per share, which FsecsondB.oatrhidrodfsnDdicftoourrtsh dguearrterd201f4irs 3M's Board of Directors declared a first quarter 2015 dividend of $1.025 per share (paid eBsoaarrdeodfdDiirvecitdoresnoddfecSla0r5ed5apfersshuarae,tre 2e0s1 declared dividends of $0.855 per share, resulted diinnnivM toiodtaaearnlcdyhveoa2afr0r201.208550)11,44wddhepeicccrlhlaarswrheehaddredednii(vvapiidddideedennddidnsstooMofasfer$cc3oh.n53d.9239,0p1ptrh1e)irrs.dshhaaanrrdee. n Dsmber2013, fourth quarter 2014 In December 2013, M's 3M's Board of Directors declared a first quarter 2014 dividend of $0.855 per share (paid in March 2014). Changes in Accumulated Other ComprehensiveIncome (Los) Atribatabl 0 3M by Component Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component B(aMltialliinoacnnes)at December 31,2013, mtof av: Balance at December 31, 2013, net of tax: OthAemrcouontmspberreerhcilenscnfoismceai(toivosen,s befor a: Other comprehensive income (loss), before tax: "TotAAAalmmmotoouhuunnnrtttssscbreoeecmfaloaprssersierefeiecdhdlaesocsnuuititfsincicaotvimoens(os),befor a TTTToatoaxaxtaellelftotfhteehecaetrrccoommprperheheennssiivvee income (loss), before tax income(ls),net of BTImampoltpoaaaclnctocttefrhraeootrmmDcoeppmuucrrepccmrhhebaahsseeeerono3sfi1fvs,seuu2bib0snsi1cid4doi,imaanrreeyyt(lsosohhfsaasrrt)ee,asssn:et of tax Balance at December 31, 2014, net of tax: Oth"eArmocuonmptrsebheenrssivreeicnlcsoumfeicaoiwo)n,s befor a: Other comprehensive income (loss), before tax: TotAAaAlmmmotoouhuunnnrtttssscobremeelpcfarloaesrsehiseirffneioseciddlavsocesuuiittfniccaotmioen(slos),befor ax. TTTToaoaxtvaaeleofiotfetehhcetetrrccoommprperheheennssiivvee income (loss), before income(1s),net of tax OtTBBhaoaeltlaaarlnncoccoteemhpeaartrtecDDhoeeemcncepsmerievbmheeebrnie3s3ni1vrc1,oe, m22ie0n01c1(5o5l,m,onnweee,(ttblooofsffsot)ta,rxxn.et of tax Other comprehensive income (loss), `AAmmoouunnttssbrocfhosrsefrioedlaoutt.ions. Amounts before reclassifications before tax: Amounts reclassified out T"aTvoeallteahtr comprehensive income Total other comprehensive income (low), (loss), beors before a.tax BTTTaoaolxtaaalenofoctfteehhcaeetrtrcDcoeomcmperpmerbheheeenrnssi3iv1v,ee2ii0nn1cc6oo,mmenee(t(olososf)s,t),asnn:ett of of wstax Balance at December 31, 2016, net of tax: Cumulative Tomei Translation imine Adjustment Tw $ (188) so (856) o (856) o2)(92) ou) (948) a41 Tas $ (1,095) wm(447) wm (447) asm (137) Sw(584) Sem $ (1,679) an (244) am=(244) as(85) oo) (329) Tew $ (2,008) Defined Benefit Tons Pension and Postretirement Tm Plans _jvtmen Adjustment Taos $ (3,715) eon (2,638) 3360 Tam (2,278) 716716 ase) (1,562) ag(16) TE $ (5,293) 61367 sw537 or904 wy (415) Ei)489 asm $ (4,804) am) (1,122) gH421 Ton (701) im177 Gon (524) Ew $ (5,328) Debt and Tats hoger Om Equity Securities, el Dott pom Unrealized Ganley Gnd) (om Gain (Loss) 53 mT om $ (2) Cash Flow Hedging Instruments, Unrealized Gain (Loss) $ (8) Accumulated Other Comprehensive Income (Loss) $ (3,913) 2 mo ean 2 171 (3,321) | @ 39 1 (4) 357 3 T@ Tah 3 167 (2,964) a ww) sa (1) (60) 563 2 wan 2 107 (2,401) 225 ST Tw ow) $ $ 99 $ (6,289) = 212 2 212 132 ay so (174) 363 a Ea os 38 495 ay ey (13) (565) = 3 @TM 25 (70) 5 Tw sow) $ $ 124 $ (6,359) sam 57 (1,309) = am) si (109) 312 I) oom) (52) (997) = 1 in 19 111 Ge) (33) (886) TT Town $ $ 91 $ (7,245) Income xeare no providedfo fore ransaion lating permancatvesiments i neratonal subsidiaries, bt a fects Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects with cumulative rslaton docs nce impacts rom tems suchact invesiment hedge ransations Resasiction within cumulative translation does include impacts from items such as net investment hedge transactions. Reclassification adjustments are made to avoiddouble counting incomprehensie ncome fen ht ar asoforded 3 prtof nt come adjustments are made to avoid double counting in comprehensive income items that are also recorded as part of net income. 79 22775500..00007799 able of Conn Table of Contents ReasificationustofAccumulated Other Comprehensive Income Atribatable to 331 Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M Amounts Reclassified from Details about Accumulated Other em eCopt Comprehensive Income Components itm (Millions) om loys Seve pe Gains (losses) associated with, defined benefit pension and postretirement plans amortization eas dato Transition asset Parachedi Prior service benefit Natoma Net actuarial loss CoimenSatonss Curtailments/Settlements Tobin Total belbre tax Tia Tax effect Naf Netoftax Deady typis Gos) Debt and equity security gains (losses) Sts rmpia ments tsct Sales or impairments of securities Towler Total before tax Td Tax effect Naot Net of tax Co ow hein cts is vs) Cash flow hedging instruments gains (losses) Fataevar op cos Foreign currency forwarcFoption contracts Como pc pons Commodity price swap contracts EE es Interest rate swap contracts Total before tax Ta Tax effect jorNet of tax Tol isons feperiod tf Total reclassifications for the period, net of tax Dehpet, Decmbneerdl, Decmnbeerdl, Accumulated Other Comprehensive Income Year ended Year ended Year ended December 31, December 31, December 31, 2016 2015 2014 Locinmoanrnome Location on Income Statement s |S Ls | sett $ 1 $ 1 $ 1 See Note 11 2 Soha 92 79 59 See Note 11 3 @ am Nach (506) 3 DSN (8) (626) 9 (420) See Note 11 See Note 11 wy wn wm (421) (537) (360) i ne [2Pio ri 148 176 122 Provision for income taxes mf sc --z $ (273) $ (361) $ (238) Co$ -- $ --- 7-- fro--$ -- $ = $ T $ Sling petmd Selling, general and Jr (1) administrative expenses 0(1) weer Provision for income taxes (1) somes $ 110 $ =-- wo (1) 109 on(39) = $ 70 $ Tm $ (203) $ ms 3 Coretta 178 $ fH 3 Cmte (2) @ heaSe (2) 174 i ------ (63) T 3 111 $ me(250) $ 3 2 (1) 4 (1) 3 (236) Cost of sales Cost of sales Interest expense Provision tbr income taxes PurchaseofSubsidiary Shares Purchase of Subsidiary Shares OcOnonnSsSoelepiptdteaemtmebdbeeSrru11,m,i22t00o11r44s,,o 3M 3M v(vaiLai mSSituuemmdiisttuoobmsmioodi33aMrMy LLfoiirmm9iitetdi)) lppuuorrcchhJaaasspeeaddn eSSsuuemmYiiettonmomoUopEolFnelcccttroiicempIInnlddeuuststortriieoess,,fhLLeitddsr.'as2n25s5tppoeenrrc,cenn3tt ninoteewrearsdtisinn1 03M0M''ss consolidated Sumitomo 3M Limited subsidiary for SpearotfcoSfeuecamsneohmtlonows3.M Limited. This wansaction percent of Sumitomo 3M Limited. This transaction was rec54orsncidng aesdt (Purshas of enccntoling 90 billion Japanese Yen. Upon completion of the transaction, 3M was recorded as a financing activity (Purchase of noncontrolling frst) owned interest) the 100 in the statement of cash flow-s. WITnnhiAAcppherilwl2a20s0114c4l,a,s3s3iMMfieppduuarrccfhhaanssaeeddcttihhene grreemmacaaiiivnniiitnnygg (nnPoounnrcccoohnntartsroeololllfiinnnggocn inotaetrreose tlnlinianagccr toonensrsoeolslis itdd)aattieeddh33eMMcossnuusbbossliiidddiiaaatrreyydffsoortarnaiimmtmmaotafetcerariiasallhaafmmlooouwnustn.,t, which was classified as a financing activity (Purchase of noncontrolling interest) in the consolidated statement of cash flow-s. "The fllowing able summarizes the effects of these 201 rsnsatiocnns city stbusble o 3M Company harcholders The following table summarizes the effects of these 2014 transactions on equity attributable to 3M Company shareholders: Year ended ition Dead (Millions) December 3L 2014 Net income strible 0 SV 5 49s Net income attributable to 3M $ 4,956 Impactofpurcofhsuabsisdiaery shares am) Impact of purchase of subsidiary shares (409) Change 3M Companyshasholde'city rom netincome. Change in 3M Company shareholders' equity from net income tibutble to 3M and impof aprcchats of subsidiary shares s as attributable to 3M and impact of purchase of subsidiary shares $ 4,547 80 22775500..00008800 able of Cones. Table of Contents NOTE. SupplemCeanshtFalolw Information NOTE 7. Supplemental Cash Flow Information ton (Millions) Cahncome paymersmet eT Cash income tax payments, net of refunds Co ners payments Cash interest payments Coplized terest Capitalized interest sme ams ae 2016 2015 2014 Sow so aw sow $ 1,888 $ 2,331 $ 1,968 191 13 m 194 134 178 " 5 is 10 13 15 Cah norst payments include ret pidon det an capil eseblancs,including nt ners pment. fesepts elated 1 Cash interest payments include interest paid on debt and capital lease balances, including net interest payments/receipts related to aceeid det discount premiums, paymoef dnett es oss, awel a net nest payments esisavocstd th rest accreted debt discounts/premiums, payment of debt issue costs, as well as net interest payments/receipts associated with interest rae sapcones. rate swap contracts. IIinmnpddaiicvtiisdd,uuaswl haaimmcohouunantetss pintrnheetCsheoenntCsedoonlesiopdliadstate,edd Statement Statement ofCash of Cash Flows Flow-s excl exclude the the impofaaisicionts, impacts of acquisitions, divestitures divestitures and and exchange exchange rate rate impacts, which are presented separately. TTrraanmssaacttioo3nnMss srreoellladatteaednddtooeiainnsvvdee-ssbiticnnkgg,aandud ffninnnadcniccinenaggpriaaclcttiievvaiitetie,esscwweiirttthhinssiiggrnneiciffeiincctaalnnyttcnnooonnns-t-crcaiacsshtheccdoommampcohpnineonesrtsyaaarreedasaesqfufooillpllomowwessn::t run for 3M sold and leased-back, under a capital lease, certain recently constructed machinery and equipment in return for miulniaci,paelsbopnedcsiiet,h aheoCfityhe oofnNscetdiso,n Mdoiesour ding 2016 and 2014 valued at approsimately S12 millonand municipal bonds with the City ofNevada, Missouri during 2016 and 2014 valued at approximately $12 million and $15 $15 million, respectively, as of the transaction date. 1IInn. 0dad2id8oiptnioor,ns,haaassr ddii(sscciuussdsseedidn iiannNrNocoehte 2660, 1ii5n.thheIenftfoohuuerrttfhhouqqrutaharqterruoofafc22ro001fe1t424,0e,13M3r'M,s'sB3BMooBardoaooff DoirairfrceDtcdortiorrsesdtddeescclladareerdecdalffaisrsrtt eqqruudsatarrtqetura22r00e11r55d20id1viv4iiddeenndd of of i$1i.d0e25ndpe$r 0sh8ar5e 3(papiedrsinhaMrear(cahid20i1n5)M.aIrncthhe20f1o0u)r.th quarter of 2013, 3M's Board of Directors declared a first quarter 2014 dividend of $0.855 per share (paid in March 2014). NOTES. Income Taxes NOTE 8. Income Taxes Income Before Icom Taxes Income Before Income Taxes tian (Millions) DnitedSer United States Intentions! International Toul Total ame ams ms 2016 2015 2014 Sa Saw Som $ 4,366 $ 4,399 $ 3,815 ae aa sa 2,687 2,424 3,211 CT $ 7,053 $ 6,823 $ 7,026 Provision for Income Taxes Provision for Income Taxes tian (Millions) Camel pave Currently payable Foden Federal Ste State Intemational International Defersd Deferred Foden! Federal Ste State Intentions! International Toul Total ame ams an 2016 2015 2014 soos os Lo $ 1,192 $ 1,338 $ 1,103 7s 01 0s 75 101 108 Ey so woos 733 566 1,008 69 am (3) (55) (171) 5 6 9 6 (9) im 2 in (11) 26 (11) CT $ 1,995 $ 1,982 S 2,028 581 22775500..00008811 TaofCbonses Table of Contents ComponentsofDeferred Ta Asets and Lisbillies Components of Deferred Tax Assets and Liabilities ton (Millions) Deemed ae Deferred tax assets: "Acnot ecurenstly deductible Accruals not currently deductible Employeebenefit costs Employee benefit costs Product nd thr cms Product and other claims Miscllancoussccals Miscellaneous accruals Pension costs Pension costs Stockbasedcompensation Stock-based compensation Netoperating pial losscyforwards Net operating/capital loss carryforwards Foreignaxcredits Foreign tax credits Inventory Inventory Gros deferrtead ass Gross deferred tax assets Valusion allowance Valuation allowance Toadeferred a ats Total deferred tax assets ame2016 s oss $ 195 $ 32326 292 1217 1,217 02302 593 zn22 s53 0 2,300 w)(47) 5 FE $ 2,253 $ ams2015 ns175 ai311 114114 Li 1,120 05305 109109 2s25 46 3305 2,205 a1(31) Zin 2,174 Deford x lilies: Deferred tax liabilities: Produc nd ther insurance receivables Product and other insurance receivables Accelerated depreciation Accelerated depreciation Intangible amorizaton Intangible amortization Currency trasltion Currency translation Ober Other Toadeferred a isis Total deferred taxliabilities s ns an $ (27) $ (28) 0 a (730) (736) ony aom (903) (1,017) a (a) (276) (199) av a0 (40) (70) 5 vie Tos) $ (1,976) $ (2,050) Net defer a aes Net deferred tax assets s ms 2 $ 277 $ 124 "TSThhheeeetnn.eeStteddeefeNeorrtreed t"taaSxupaapslsetetmsesaanrretaiinlnclBcuddeadd aasslShcoeomaetpmoInnnfeponcrtsmaaootfefiOnOot"thhfeeeorrAAnsfsestrettssessadnneddtaOOittlhhseerr Lisi Liabilities within within theConsolidated the Consolidated Balance Balance Sheet. See Note 5 "Supplemental Balance Sheet Information" for further details. Asof Deccaber 31, 2016, the Company hadta fc operating loss, capital losses, and tx credit aryonerfo Federal As of December 31, 2016, the Company had tax effected operating losses, capital losses, and tax credit carryovers for federal (proximately S21 millon).stat (approximately 1 millon). sd nerations (apposite S71 millon, withall amounts (approximately $21 million), state (approximately $1 million), and international (approximately $71 million), with all amounts before valuation allowances. The dea a tbat camyones wil expire af 15 fo 20 yeas the sae ale S to 10 yeas and before valuation allowances. The federal tax attribute carryovers will expire after 15 to 20 years, the state after 5 to 10 years, and the ematonaaferono hee cars or ha an ndefiit carson prod. Theta atria being carriedovrare as ceri the international after one to three years or have an indefinite carryover period. The tax attributes being carried over arise as certain oridictons may ave tx loses or may hav nail 0 uli certain sss without the same type of abl income, As of jurisdictions may have tax losses or may have inabilities to utilize certain losses without the same type of taxable income. As of December 31, 2016, the Companybas provided S47 miloofvaluation allowanceagainstcertain of fos dfered asc December 31, 2016, the Company has provided $47 million of valuation allowance against certain of these deferred tax assets based on management' defrmination ha marek tannt tha h te benefits elated hse sets will ot be relzed, based on management's determination that it is more-likely-than-not that the tax benefits related to these assets will not be realized. Reconclstion of Effective Income Tax Rate Reconciliation of Effective Income Tax Rate SaSStatattteuotiornryycoUUmS.eS..avtaxexsratnteeet offderal benefit State income taxes - net of federal benefit UISnt.emraetsieoanraclhinncdomdeevaexleospm-eenttrst International income taxes - net ReURDse.eoSsr.emvrrveeeessssefafMroacornhtubaafxnacdccotodnuneirtvneinegrlge'oesnpncdmcieieodenunstctcireodnit Domestic Manufacturer's deduction AElmlptlhoyeers-snheatrebasedpayments Employee share-based payments AllEoftfhoectri-venweot rldwide x rte Effective worldwide tax rate 2016 TTUosewTw T e TTn wen 35.0 % 0s 11 09 0.9 an a9 65 (2.7) 09 5) ) (0.5) 02 an 06 0.2 as as as (1.8) an wn on (2.8) -- 03 -Tw Bin EY 28.3 % 2015 35.0 % 1.1 (3.9) (0.5) (1.0) (1.8) (0.1) 0.3 29.1% 2014 35.0 % 0.9 (5.8) (0.4) 0.6 (1.3) (0.1) 28.9 % o"TTyhheeseeelvffeferecactltiivvaecetatoarxs.rraaPtterfifmooarrr2y2001f166wwcaassht22a88t..o33peepsrertcraecnesstn,t, cctoohmmeCppoaamrrpeeaddnyt0o'2s92.91e.1fppfeecrcriecnvt ainns220a0115e5,,iaandcdeleuccdereeadassteeeoofrfe00c..o83gnppieetrriccoeennnottaafggee pois, points, impacted impacted by several factors. Primary factors that decreased the Company's effective tax rate included the recognition of 82 22775500..00008822 TabeofComets Table of Contents e`eaxxs ccdeeisssstacaxusbbeenineneffNiittosstbbee1gg)iinnnnndiinngg eiinndu22c00t11i66onrreeillanisteetdda ttooacexmmpepl.looCyyoeemeesbhsiahnraered-bbatashseesddeppafaaycymtmeornestnsdts(r(sreeusauildtningghef(Crrooommmtpthahenayad'dospftnieocntooiffAvAeSSaUUsNNeoo.b22y0011366.0-2099,, nappsceerrodccrieestnncittuaansggsteeeadppooipinionnstNtissto..TitToehnhes1ed)aednacendrcdreieaanasrtseeeedmwwuaactatsisiooppnnaasrritniaisaselltlyaysteootffthfaistxceetwtsbb.ryyCeaoamm22p..bo44icnppteeoedrrd,ccebthnnyettasagceghefaappncogstieonnsrtsiiodnnbeccrcroeeraeatsasees,he, edwwhtghhieieccohhgCrlroaepmlthapitedcadniyttoo'sorreeffmefeenmcactesiovuaermesetmarxbeenmrtfasetoeoornfbfaty3xM s3e.s2'sM's and adiiona a expense uncertain tax positions and rienltaetrnedat1iongallobtaalxecsasthhaotpwtiemriezaimtipoancatectdiobnys.changes to both the geographic mix of income before taxes and additional tax expense related to global cash optimization actions. "The elective a ra for2015was29.1 percent, compared 0289 perc 2014, a incase of0.2 percentage pois, impacted The effective tax rate for 2015 was 29.1 percent, compared to 28.9 percent in 2014, an increase of 0.2 percentage points, impacted by man Tctors. Primary tor which nreasd he Company's lective a te incladed ntmtional aes, which were by many factors. Primary factors which increased the Company's effective tax rate included international taxes, which were impacto by bo changes in foreign currency tes and changes othe ogra i ofcom bors te, ad a increase in impacted by both changes in foreign currency rates and changes to the geographic mix of income before taxes, and an increase in sates, Combined, thee actors increasedth Companys aective a rt by 2:4 percntag pint This ners was paral state taxes. Combined, these factors increased the Company's effective tax rate by 2.4 percentage points. This increase was partially offic by 2.2 perstagepot dees, which related othe remeasarcnentosf Fs wicrtanta pions, cluding the offset by a 2.2 percentage point decrease, which related to the remeasurements of 3M's uncertain tax positions, including the restorationof asbasiosn certain stsfo hich deprecation deductions were previously nid, ad increasies he domestic restoration of tax basis on certain assets for which depreciation deductions were previously limited, and increases in the domestic manufacturer's dedution and U.S. research and devlopment credit bhi manufacturer's deduction and U.S. research and development credit benefits. "The Company les incor tx euro i he U1. dra ition, and various stats and Forsjoiictons. With fe The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is io longersubset 0 U.S. federal sae and lca, or non-US. income tx examinatiobnysta exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S, income tax examinations by tax thorsfocar before 2005, authorities for years before 2005. "`TTThhheee CIIRoRSSmhphaaanscycoompmprolpeelesttteeedddtitsssaFfiieellndd eIexxRaaSmmpioinnsaaitttiiiooonnnsoofwfittthheheinCCotomhmpepaeanfnyay''ssyeUUas.rS.s. affenedddeercraaell iiendncocmtooemtatahexereestdutmrnisisofotrrsththieevyyaeaaprsse22s0000p55rttohhsrroeousuggwhhit22h0011h44e. "TIIRTRhaSSex.. Company protested certain IRS positions w-ithin these tax years CnouDretcienmtbheerf2s012s, tthe oCeof2mp0ra1n3yrerlaetincg feo ihseva2e0r0dy6 toa tycrof In December 2012, the Company received a statutory notice of deficiency forthe 2006 yar. The Company laepedin in and entered into the administrative appeals process w-ith the deficiency for the 2006 year. The Company filed a petition in Tax Court in the first quarter of 2013 relating to the 2006 tax year. CaCnutrirrceeinpta,ltye,dtththeheeCCotohmmeppTaaRnnSyywiiislluunncddoeemrrepexlxaeamtminianstaeitxiooannmibbnyyattthiheoenIIoRRfStffhoorrCtitossmUUpS.aS.n.yffeofddoeerraa2ll0ii1nn5ccobomymeetthtaeaxeneredtuuorfrntshefoorsrettchhoeenyydeegaarrussa2200r11o55f2nan0dd172200s11n66d. Ilotiriss 2C2aon00mt11ip66cainpbbyayy'ttsethhdaeethneandtdpthooofefstttIhhRieeSoffniiwrrfssoittlrlqwqcuhouamriatepcrlroeottftehfe22ie0t0Cs81ore8.mx.paAAmasnifnyoaftiDiDsoneenctceomrdf tbbheeerrCu331o1,,sm22p00a1r1ne66ys,,efttrhohvereed2IIR0R1SS5 hasby has notthe not proposed end of the proposed any significant second quarter any significant jsiments of 2017 and adjustments to te for to the Company's tax positions for which the Company is not adequately reserved. Payment ling 0 ihe propose assessments arising from he 2005 hough2016examinations may otbe made unl a fl Payments relating to other proposed assessments arising from the 2005 through 2016 examinations may not be made until a final agreements reached betwen the Company and he IRSon such assets a upon fl resolution rsling ros the agreement is reached between the Company and the IRS on such assessments or upon a final resolution resulting from the adminis appeal proces orjudicial ston. In ain oth US. fderal examination, ther ilo dit activ in several administrative appeals process or judicial action. In addition to the U.S. federal examination, there is also audit activity in several U.S. sate and focin risitions. U.S. state and foreign jurisdictions. SMamicpates changes 0theCompany's uncer postions de 10 heclosingand resolutionofsud suesfor various audit 3M anticipates changes to the Company's uncertain tax positions due to the closing and resolution of audit issues for various audit years mentioned above nd closure of atic. Cue, the Company i simatinag decease in unrecognized abene durin years mentioned above and closure of statutes. Currently, the Company is estimating a decrease in unrecognized tax benefits during he nest 12months a. result oficipated rseof atudi sss. the next 12 months as a result of anticipated resolutions of audit issues. 83 22775500..00008833 TabeofComets Table of Contents reconciliationofthebesianingandcingamount ofgrossunrecognizaedbenefits(UTE isas allows: A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (UTB) is as follows: Federal, State nd Foreign Tax Federal, State and Foreign Tax any (Millions) Grow UTD Fane aTry T Gross UTB Balance at January 1 ame sms 2016 5 El Ea 381 $ 2015 583 $ ane2014 =659 AAAdddiddoiotinonnsssbbfaoasrseetddaoxopnnosttaixtippoonossistiotifioopnnrsisolrreelyaetdaerds 0to hecurt the current ayear Additions for tax positions of prior years SReedtulcetmieonntssfortaxpositionsofpric years Reductions for tax positions of prior years ReSdeutctltemioennstsdue to apcofapplicablesauteofiniaions Reductions due to lapse of applicable statute of limitations @ 7 0 67 77 201 3 10 0 43 140 30 @) a (66) (399) (74) 09 @ asy (95) (4) (154) an a9 @) (11) (16) (79) GrossUTE Balance tDecember31 Gross UTB Balance at December 31 s FI Ws 5 $ 319 $ 381 $ 583 NetUTBimpocting the fevtx te a December 31 Net UTB impacting the effective tax rate at December 31 s FO ws 265 $ 333 $ 369 $ 265 "Theol amooufUnTEt,ifeogaized, would aff th ffita ae by S333 million sof Decembe31r, 2016, 536 milo The total amount of UTB, if recognized, would affect the effective tax rate by $333 million as of December 31, 2016, $369 million asf December 31. 2015, and $265 millonas ofDecember 31. 2014. The nding net UTI ress from asin hegross bance as of December 31, 2015, and $265 million as of December 31, 2014. The ending net UTB results from adjusting the gross balance for emssucha Federal, Sate and non-US. defer ms, rest andpels, and deductible axes. Thenet UTIisincluded for items such as Federal, State, and non-U. S. deferred items, interest and penalties, and deductible taxes. The net UTB is included as compoofnOtcheraAetss, Acerod IncomeTax, andOthe Lishiles wih theConsoldted Balance Shee. as components of Other Assets, Accrued Income Taxes, and Other Liabilities within the Consolidated Balance Sheet. "The Company recognises nest and penacere ested 0 wrecognized wsbenein a expense. The Company The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. The Company recognized i the conseidted satementof incomeon rosbassapprosimaely S10millon ofexpense, 52 millon of expenses recognized in the consolidated statement of income on a gross basis approximately $10 million of expense, $2 million of expense, and S14 millonofbenefit n 2016, 2015, end 201, respectively. The mount of ees andpenal recognized may bean and $14 million of benefit in 2016, 2015, and 2014, respectively. The amount of interest and penalties recognized may be an expeornbensefeit dunew or remeased nrecognzedta benef accrual. At Diember 31, 2016, and December 31,2015, expense or benefit due to new- or remeasured unrecognized tax benefit accruals. At December 31, 2016, and December 31, 2015, accrued tees and penali heconsolidated balance sheeotn gross basis were $5 milo and S15 million, especie accrued interest and penalties in the consolidated balance sheet on a gross basis were $52 million and $45 million, respectively. Included in thes nerstand penalty mounts ve nerst and pales esd 0 postions for hic the ulm deductibility Included in these interest and penalty amounts are interest and penalties related to tax positions for which the ultimate deductibility is igh crim but for which ther s uncer about thetimingofsuchdeduct. cause ofh pec fdered tax is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting. oer than fret and penis, the ialowaomfnthce shore deductibility period woud not alt he annual accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual lective ts aebut woud accelerate the peyment of cash 1he ng authority 103n aeperi. effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. AAinssthaerrelseoulwtsoionffugccoelcrrottautiinntcremimpclpolioysyasnmucbenjntetccctoo0mmmmrdeitumnceetndstsaannded cceaappisittaall,iinnvvseeossttnmmeecnantstesssmm,aaddeeexbbeyymp33tMM,roiinnccooammeeffforrroomsmcaccreersrttGaaiionnummgaanhunfutahfcaetcuatrulilrniongwgisnacgc:itivviiteiess CaiChntihitnihnbaeautf2(o2b0l0ll1o1e6w6o),i,tnTTghhaheciatoliaulaannnstddra(iet(2s2u00si1s18f8s))u,h,bKKjeeoocrrteetabao ((r22ei00d11u99c,)ed,dBBtarsraaxrzieirlaet((es22st00i2o29mr3)a,),t,iendSSfsiwoosimbtezeeerrcSllaa1nsn4edd2s,((m22iis00l22el44xio))en,maa(npn2dtd3SfrciSoenimnngtgastapappoxoorrfdeeoir2(2uy00et22ad95rs)).sthhTTarhhoreeu)giinihnncc2toho0mme1e6ef,otealSlxxo1wbb1eei4nnnegemf:ifiilttlssion C18cepnritlse srien20)15, attributable to the tax status of these (18 cents per diluted share) in 2015, nd $99milli(o1n3 sepe tdiasted subsidiaries are estimated to be $142 and $99 million (15 cents per diluted sharen) 2014 million (23 cents share) in 2014. per diluted share) in 2016, $114 million "The Company ha ot provided dered oso remit caingsatbutble o nertcnal companies tht ave oc The Company has not provided deferred taxes on unremitted earnings attributable to international companies that have been considered be riveted indeitely. The unreitid cing ela 0cngoingoperations nd were approximately 14 ion considered to be reinvested indefinitely. The unremitted earnings relate to ongoing operations and were approximately $14 billion sof December 31,2016. Becauseof he avail ofU.S foreign a credit, the mule avcnues in wich 0 repartee as of December 31, 2016. Because of the availability of U.S. foreign tax credits, the multiple avenues in which to repatriate the Cains to minimize tx cost, and becouse a are portion of hesecomingarse no liquid, not practical to determithne earnings to minimize tax cost, and because a large portion of these earnings are not liquid, it is not practical to determine the incometa ily that would be payableifsuch camingswer nt reinvested inden income tax liability that would be payable if such earnings were not reinvested indefinitely. 584 22775500..00008844 able of Cones. Table of Contents NOTES, Marketable Securities NOTE 9. Marketable Securities fo"TlThhleeowCCioonmmgppaiasnn.yysiinnvuessttms iinonmafassaassmeotr-bubanacytckkseedrdessoeecncudureirdtitiioeentsshe,,cCcooerrtntiisffoiicclatiteedsaootffdeeddpeopBsoilstiat/intimcmeeShddeeeeppotosifstoistrs,,maccrookmmemtmearebcrliceiasaellpcuparapipteeir,e,saancddrooeteahretrsasnecdcuniriotni.e-sc.oTTrhheee). following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current). ition (Millions) he December 31, 2016 me December 31, 2015 CCoFororprepoiorgranagttoeevddeeerbbnttmsseeencctuurairtgieeessncy securities C`FCoCoomormemrimetgrncecsrgiceoiasavlloefpprnadapmpeeeperronst iavgienmceydseepcouriitsies Certificates of deposit/time AUSs.stmbuancikciapdalsuserceusr.es U.S. municipal securities deposits Asset-backed securities: "CrAeudittocmanodbliouilneedrelated Automobile loan related AOsstCOthrtbheeadercritkcoadrdserceulraitteides total Asset-backed securities total s wos 0 10 $ 10 -- 0 -- 10 i 2 14 12 wr 2 197 26 3 5 3 3 at 2 31 26 i 0 18 10 g a 7 21 = 5 56 57 Currentmarketablesecurities Current marketable securities s ms ns 280 $ 118 U.S. municipal scuriies U.S. municipal securities s nos 9 Non-current marketablesecurities Non-current marketable securities s 1n7 s$ 5 Tota marketable securities Total marketable securities s ws m 297 $ 127 Clasifistion of marketablesecurities acumen or n-curent ibased on th natureofthe sures nd availability for use in Classification of marketable securities as current or non-current is based on the nature of the securities a~d availability for use in coment peraons. At December 31, 2016 and 2015, gross ueslized gains and or sss (prea) were not material. Refer o Note current operations. At December 31, 2016 and 2015, gross unrealized gains and/or losses (pre-tax) were not material. Refer to Note for ble hat prods theme rslizd gins (oss) elsied sl of paimeonftdesbtsnd qty suri which includes 6 for a table that provides the net realized gains (losses) related to sales or impairments of debt and equity securities, which includes marketable seus. The ross amountsof he eid gain or oss wer not material Coo fsecurt ities sd we the it in, marketable securities. The gross amounts of the realized gains or losses were not material. Cost of securities sold use the first in, Tit au (FIFO) meth Since hes marketsble securities re clase a valsble-fo sles, changes fi vale wil first out (FIFO) method. Since these marketable securities are classified as available-for-sale securities, changes in fair value will ho through othercomprehensive incon, ith sncuns rcs out ofothecomprehensive incom ne mings uponsale or flow-through other comprehensive income, with amounts reclassified out of other comprehensive income into earnings upon sale or "other thanimporary" impsimnt "other-than-temporary" impairment. 3M reviews impimentsasoisted with ts marketable scarsin accordance withthe measurement guidance provided by ASC 3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320. mesDebtm andEo quity Secure when determining te clasicationofth impact ss "emporry or "other 320, Investments-Debt andEquity Securities, when determining the classification of the impairment as "temporary" or "otherhn emporay". A emporary impairment charge results nan unrealized os being recorded i he other comprehensive income than-temporary". A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income componentof shrshlder"cquity. Such an unrealized losdos ot ducenet incom aiutsbl to I for he apisablc component of shareholders' equity. Such an unrealized loss does not reduce net income attributable to 3M for the applicable accounting period because he os i not viewed a ther hen emporry. Th Factors valaied odiffrent between temporary accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and therthan-temporary ince the preci ture cash lows, edt tingsscons, and asscssmoefnthte rei ust ofhe and other-than-temporary include the proj ected future cash flow-s, credit ratings actions, and assessment of the credit quality of the ndryingcolle, a nella ter Tckors underlying collateral, as well as other factors. 5s 85 22775500..00008855 TabeofComets Table of Contents "TfTihhoeembbcalolaannnrccasectaatulDDsemcsecammbhbeeri3311b,,ec220a01u16s6,e,tffohorr mmsaacrrkkreetaaobbfllteehsseeeccsuureriitrtiiieessebbsyy mccaoonynttrrhaaacctteuuaahll emmaiatgtuuhrritittyy aaprreresshhyoowwonbnlbibegelalootwwi:o-.nsAAcwctituutahalol ummtaatpturureriipttiaieeyssmemmnaatyy diffe differ polis from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. tian (Millions) Decembear.2016 December 31, 2016 DeDDuiueenainloornneeayoyeaesarrcoorrrllreessossugh ive scars Due after one year through five years DTuoeaafmtarrkfeitvaebyleeasrescuhroituiegsh en years Due after five years through ten years Total marketable securities s 2211"66 5 B7r743 297 SM has diversified marketable securities porto Wii is port, asebacked secures primarily nude rests in 3M has a diversified marketable securities portfolio. Within this portfolio, asset-backed securities primarily include interests in `automa loans, ritcand nd thr set backed saris 3M nvesimnt poy allow investments in vst. backed automobile loans, credit cards and other asset-backed securities. 3M's investment policy allows investments in asset-backed Souris wih imam rei ratingsof Aa by Moc" Investors Servic or A-by Standard& Pours FiehRatingsor securities with minimum credit ratings of Aa3 by Moody's Investors Service or AA- by Standard & Poor's or Fitch Ratings or DBRS.Asstbacked secures must be rated by at cast wofothe afoentonedrating gencics, onofwhich must be Moody's DBRS. Asset-backed securities must be rated by at least two of the aforementioned rating agencies, one of which must be Moody's Investors Servoir Standard& Poor's At Decembe31r. 2016, al asset-backed security investment wer compliance with this Investors Service or Standard & Poor's. At December 31, 2016, all asset-backed security investments were in compliance with this policy. Approximately $4.8 peent ofallasst.backad secur investments wer ted AAA or AI by Standard& Poor's andor policy. Approximately 84.8 percent of all asset-backed security investments were rated AAA or A-l+ by Standard & Poor's and/or Aor PL by Moody's Investors Service anor AAA or F1 by Fith Ratings. Inerst te rik and rit rik ested the Aaa or P-1 by Moody's Investors Service and/or AAA or F 1+ by Fitch Ratings. Interest rate risk and credit risk related to the andr collier nay pact h valu of investments in sset.backed securities, while actors uch as genera cndiions i the underlying collateral may impact the value of investments in asset-backed securities, while factors such as general conditions in the overll crditmarketand the nature of he undeingcolteral mey aif the liquidity of incstmnts inastbacked securis overall credit market and the nature of the underlying collateral may affect the liquidity of investments in asset-backed securities. 3M dmootccurresntly expect risk elated 1 ts holding in setback scutes to mater impact ts nancial condition or 3M does not currently expect risk related to its holding in asset-backed securities to materially impact its financial condition or Tidy liquidity. ws 86 22775500..00008866 able of Conn Table of Contents NOTE 10. Long-Term Debt nd Short-Term Borrovings NOTE 10. Long-Term Debt and Short-Term Borrowings "The fllowing debt ales elect lfc terestrats, whic ncde the impofanecrts rteswaps,sofDecebe3r1, 2016, The following debt tables reflect effective interest rates, which include the impact of interest rate swaps, as of December 31, 2016. Ihe debt was esd cn rcombind basis, the debt has bc separated show the pac ofhe Fixed veslosin elective If the debt was issued on a combined basis, the debt has been separated to show- the impact of the fixed versus floating effective ines te. Camyng valu inches the impoaf cdett sauce oss and fi a hodging activity. Lon femdebtand shor interest rates. Carrying value includes the impact of debt issuance costs and fair value hedging activity. Long-term debt and shorttm bosonsof December 31 consid ofthe following: term borrowings as of December 31 consisted of the following: Long-Term Debt Long-Term Debt Dteonpyt (Millions) 3006 rings ma MdDM Meeuesdcdimriuiupimmt-io-etnteemr/rm2m0nn1noo6osPeteeri(((n$$c11i6bp5iba0llillAmliiimoolnnol))uonnt) M M MMedeedddiiiiuuuummmn--tttteeeerrmmmmnnnnooootttteeee ((((5$5S0604050500mmimmilililllliloolinononnEE))uurrooss)) M M MMeeeeddddiiiiuuuummmm---tttteeeerrrrmmmmnnnnoooosttteeee((((S5$$26465050000mmmmiiliillllllooiioon)nn))) M M MMeeeeddddiiiiuuuummmm----tttteeeerrrrmmmmnnnnoooosttteeee (((($665255350000mmmimiililllllliiooolnonnn)EE)uurrooss)) M M MEueeerdddoiiibuuoummnn--dtttee(errmm0m0nnnooomtitteeell(((i$$5o32n2000E000urmmmoiiislll)llliiooonnn))) EEEMueuurdrroooibbbuooomnnn-dddte(((r33Gm000n000ommmtieiillllll(iiioo5onnn60EEF0auurmrreiooslss)))lon) M M MMeeeeddddiiiiuuuummm-m--tttteeeerrrmmmmnnnnooootttteeee ((((5$5S0606000000mmimmilililllliloolinononnEE))uorsos)) M M MMeeeeddddiiiiuuuummmm---tttteeeerrrmmmmnnnnooootttteeee ((((66$$050650000mmmmiiilillllilolionoonnFE))aurreoss)) M M MMeeeeddddiiiiuuuummmm--tttteeererrmmmmnnnnooootttteeee ((((7$57556505500mmmmiiilillllilolionoonnFE))aurreoss)) 0M 3M-0ee-yddyeieiauaurmrmdd-etteebebrememnnnttonurtoreeet(e5((($3$5336300500mmmimililillllilooioonnn))F)ares) M M Meeeedddyiiiuuuommm-b--totteeenrrrdmmmn(nno8oot7tte5ee0(((55m500i000l0lmmmoiniilll)lliiiooonnn Euros) Euros) Euros) 3FFMl0eloo-daayitteuiiannmrgg-btrroaeantrtedmnnno(oot$te7te5e((08$(99m863i2lmml5iioilmlnllii)oolnnl)o) n) M FMFlelooedaadittiuiiunnmmgg--trrtaeeatrriemmnnonontooteettee(($5((5$5553520mm50iilmmllliiioollnlnli)oo) nn)) Medium-term note ($500 OtThoearlboogrrtooinmgdsebt Other borrowings million) TLLLeoeosnstsasg::letclcouanmrrgrea-ntdteterbppmtoorredttxiieoocbnnlt uoodffiolnongnggcu-etrerrremmntddpeeobbttion) Long-term debt (excluding current portion) Currency/ Vow Fixed vs. Toinr Floating USD Five USDFixed USDFixed USD Fixed Euro losing. Euro Floating USDFesing USD Floating USDFesing USD Floating USDFixed USD Fixed Euro losing. Euro Floating USDFesing USD Floating USDFixed USD Fixed Fuolesing Euro Floating Buofied Euro Fixed USDFised USD Fixed Ewokned Euro Fixed USDFied USD Fixed EuoFied Euro Fixed USDFised USD Fixed BuoFied Euro Fixed USDFixed USD Fixed USDFised USD Fixed Euofied Euro Fixed Buoked Euro Fixed USDFised USD Fixed USDFesing USD Floating USDFixed USD Fixed USDFlosing USD Floating USDFixed USD Fixed arcu Various Effective lm ay Interest tne te Rate = -- % Ll0% 20m 1.10 % "ems % 095% 2018 0.98 % 100% 2019 1.00 % 174% 20m 1.74 % eam % 106% 200 1.06 % 212% 200 2.12 % 001% 2020 0.01% 17% 201 1.97 % Leste ami 1.63 % 043% 2022 0.45 % 207% 22 2.17 % Ll 2023 1.14 % 304% 20s 3.04 % 171% 2026 1.71% 225% 20 2.25 % Gols. 2008 6.01% 130% 2030 1.90 % 18% 01 1.54 % S73 20m 5.73 % 065% 2081 0.65 % 05% Zou 4.05 % 061% 2041 0.61% 313% 20k 3.13 % 082% 2017:200 0.82 % Final Maturity Date 2017 2018 2018 2019 2019 2020 2020 2020 2021 2021 2021 2022 2022 2023 2025 2026 2026 2028 2030 2031 2037 2041 2044 2044 2046 2017-2040 Caring Vo Carrying Value Sic ie 2016 2015 FT =v $ -- $ 999 wo on 649 648 PY sis 523 545 a a 448 448 Py Rl 598 597 2 25 25 25 wo 08 680 708 27 7 297 297 " os 199 198 35 sus 336 348 nn 6 312 326 En598 a0 = 520 05 sn 593 592 a pn 619 644 si sis 546 545 70 0 770 801 0640 sn an 342 343 mn = 512 533 sis = 518 Er En 743 743 9% 9 96 96 a1 an 313 313 st 5 54 55 as473 274 74 Sas 5 om $ 11,478 $ 9,878 0 12s 800 1,125 SG $ 10,678 $ 8,753 PostSwapBorrowing(Long-Term Deb, Including Current Portion) Post-Swap Borrowing (Long-Term Debt, Including Current Portion) tons (Millions) Fixer dt Fixed-rate debt Floating rate debt. Floating-rate debt Totalogtomdeb, includingcurrent portion Total long-term debt, including current portion 2016 Carrying VEC mii Va reat Value Effective Interest Rate STosm CT o2a%s om 234% $ 8,372 2.42 3106 oan sis 032% 3,106 0.48 EE To $ 11,478 2015 Carrying Value Effective Interest Rate 6,712 2.54 % 3,166 0.32 % 9,878 [a 87 22775500..00008877 TabeofComets Table of Contents `Short-TermBorrowingsand Current Porton of Long-Term Debi Short-Term Borrowings and Current Portion of Long-Term Debt tons (Millions) Caren orionoFTong Term dob Current portion of long-term debt U.S. dollar commercial pper U.S. dollar commercial paper Otherborings. Other borrowings Toa shot temborrowadincurgresnt prion ofog emdb Total short-term borrowings and current portion of long-term debt bine Effective rate Interest Rate Tors 1.01% "% res 3 0.48 % Coming Vo Carrying Value Es Te 2016 2015 wo Sn 800 $ 1,125 m= 1 172 i --T 972 $ 919 2,044 JI1napbbaoontthhan22d0011K66oaarnnadd 2015, 2015, throther shorten short-term boswingsprimarily borrowings primarily consisted consisted ofbank of bank borings borrowings by by nermations international subsidiaries, subsidiaries, primarily primarily Japan and Korea. Maturitieofs Long erm Debi Maturities of Long-term Debt Matofltong-feorm deb forthe five yearssubsoefqDeucemebenr3t1,20a1r 6as followisn mins) Maturities of long-term debt for the five years subsequent of December 31, 2016 are as follows (in millions): 2017 2018 2A2019 2020 2021 After 2021 LGA Total mos 800 $ aes 1,042 $ @ sues 623 $ 1,176 $ les 1,246 $ ews 6,591 $ am 11,478 Longtrm debtpeymnts due in 2017 and 2018 include flrotetnoisinngg S150 illo (classified as cure portion of Long-term debt payments due in 2017 and 2018 include floating rate notes totaling $150 million (classified as current portion of Tong erm det). and S71 million included in oles borrowing the ong crm debt abl, respctivly sa esl ofpu long-term debt), and $71 million (included in other borrowings in the long-term debt table), respectively, as a result of put provisions assisted ith hese debt instructs. provisions associated with these debt instruments. Crait Facil Credit Facilities 3I1n.M7Ma5arrbccihhll22o00n1166f,,c33yMMeaaarmmeeenvndodelevddiannngddcrreeessdittatteefdadciitltssiteyexxpiisistnitniginn$gg2i.2nS2525Mbiairllcllihoon20ff2i1vi.ev-Tyhieseasr rerevveoolilvvaiinngggreccerrmeededinitttlfaiicnictllityaydeeesxxpapiiprirrnoigvniiisgnnioAAnuugugonusdstetr2200wh11i99ctthoo3oaM cm$mr3aea.dyy7i5trreebTqqiulucleeisosltnt aafnnwivaiiensn-ccyureeennaadrssreeraoeowvfnfouulivppintD0ogec$$c11ere..m2d2b55ietbrbfiia3llcl1liii,oloi2ntny0a(1ae6tx.lpleeiUnnrdindnedergesr'risndtdMihisesacc3rrrcee.htt7iio25on0n)b)2,1ibb.liriTnonhggiicisrnnecggdrieththdeeaitgtsaoragtalerleeefomamiceeilnlnitttythyei,nuucCpplout1mdo0.ep8$sa55.na.0bypbriisoirlvnleiioqs.inuo.inrTTuehhdniissd0erreremvwvaoihvlnviitcinanhiggn3M aciitrsgeEdEsiBBtsIIfmTaTcDnDilAtAisty)sttoowtIhtanesrtreuaernetsdsotraoRRwfaactntoiionoastaaoDslieoodcffaetttmhheeebdneetnrdda3o1lo,ffE2eaB0ac1Ich6hT.DffUiiAssnccadaflleorqqttuuhahierrtf$eeo3rua.ar7tct5onnnboositetlcllieeuostsnsivthcehraaegnndui3t3a.a00tgrtr1oese11m.h. eTTenhhiti,ssetnhiiscdeecaCdaltlococmuoulptalaatenlidyi((inuasstsrdredeqiseutfieinereedxddptiionenmtthhsaeoeienntlalin agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then fpuanydmeedntdoebftdfivoirdtehnedss,me period At December 31,201, hisratiowas proximately 4 10. funded debt for the same period. At December 31, 2016, this ratio was approximately 44 to 1 Debt covenants dont restr the ended to total interest expense on all 1. Debt covenants do not restrict the payment of dividends. Other Credit Facil Other Credit Facilities Apart fom the commited revolving facil, n sional $291 illic i standalone letosf credit and bank granoes were Apart from the committed revolving facility, an additional $291 million in staaad-alone letters of credit and bank guarantees were assed snd outtendinag Decembe3r1, 2016. These instruarmeewnitlsd in conection with oralbusinesssti also issued and outstanding at December 31, 2016. These instruments are utilized in connection with normal business activities. Long-Term Debt Lsuances Long-Term Debt Issuances "TtTahhbeeleppfrroiinunccniidppaaall aatmhmeooubunentgtsi,,niiinnntteegorreefssttthrirasttessoatann.dd maturity maturity dtsofindividual dates of individual ogem long-term debt debt suances issuances can can bs be Found found nthe in the nom long-term debt debt table found at the beginning of this note. In May 201, 31 sued1 bilo Furos aregat principal amountofmediumfem nots In September 2016, Missed $175 In May 2016, 3M issued 1 billion Euros aggregate principal amount of medium-term notes. In September 2016, 3M issued $1.75 ion saree principal amountofmed-mm nes. billion aggregate principal amount of medium-term notes. 1 May 201, 3M sud 1750 billion Erosagsrgte principal amountof mediante notes. In August 2015, 3 os S150 In May 2015, 3M issued 1.750 billion Euros aggregate principal amount of medium-term notes. In August 2015, 3M issued $1.500 billion aggregate prinipl mount ofmdium-erm tes. Upon eb ssn, theCompany entered nowo ees rte saps ss billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into two interest rate swaps as fir lus edges of prioofth ied tet ok medio arm noteobligation. The firstconverted S450 million three csr fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first converted a $450 million three-year fied atenoe, nd he snd comvrid S300 million ofa veya fe rat nt inched i his ssa oa ners te 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 lowing hres month LIBOR ind. based on a floating three-month LIBOR index. 88 22775500..00008888 TaofbColnees Table of Contents iIInnnoJJuuanneei22n00t1e14r4,e,st33MrMteiisssssuuaeedpd $$09955c00onmmvieillrlltiooSnn6sa0gg0galrreegogaatnetepoprfiinanciiSpp6al2l5aammiooluunlntot oofnf mmseeddciiluuummd--teeedrrmmnnnioostseess..sUUupnonnsddee0bbt3t misssaiunarneec,et, ttahheeeCCbooammspepadacnnyny.eennteerreedd 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 Noavteimnbgetrhr2e0e1m4o,ntthhe CLoImBpOaRnyinidesxesds 1.i2r50vbaliuelhoEedrgoesoafgaproorgtisotn porfintcheipaflxadmonunetrosfmretdeiumme.dtiuemm-toertmenoe obligation. In floating three-month LIBOR index as a fair value hedge of a portion of the fixed interest rate medium-term note obligation. In November 2014, the Company issued 1.250 billion Euros aggregate principal amount of medium-term notes. Long-Term Deb Maturities Long-Term Debt Maturities Tn September 2016, 3M raiSd1 billion aggregate principal amoofmeudiann etrm nes, In September 2016, 3M repaid $1 billion aggregate principal amount of medium-term notes. IiTnnnJJuuollyyh2200e1144,,ea33rM8.66rretimiriedldliaaottnmmiaatituiursriihttyyPo11.u00n22d58(bbsiiplllpliirooonnriEEuro muartolsyoofSfs1se0ev6ennm-icyleleaiorn5b.a00s%%edfiiosxeneddarrgartteeeEEmuuerrnootbbdoonnaddtss.exIIncnhDDanecgcmeembtebeersr 2c200o112m2,m, i33tMMendenecterrereddidt iTnatcoilatythareger-eymeearnt66wimtihllJioPnMBorrigtiasnh CPhoausned B(aanpkp.rowxhimicahtewlyas$1f0l6lmdirlloiownn absasoefdDeoncaegmrebeme3er1n,t 2d0a1t2e. 3 eps the exchange rates) bla n committed2004credit facility agreement with JP Morgan Chase Bank, which was fully drawn as of December 31, 2012.3M repaid the balance in 2014. FlosingRate Notes Floating Rate Notes AaAtttvvaaraririiooouuussspttiiimmceesss,,r33aMngihanasgsfissrsouum9edd fHloposeatrtciinennggtrra1at0e1on0to0teecpseornccotenanttianoinfiipnnaggr ppaoulttoepprroovavicissciiooornnsds.i.n33gMM0wwtooeuulrlddedbbueectrrieoeqniursireecddht0oerredeppfuuuorrrlccchheaaacssseehttshheeecsseeusresyceucruiIrntitiieess at various prices ranging from 99 percent to 100 percent of par value according to the reduction schedules for each security. In Dercmesmobfetrhi200l4os3iMn sostiod tfodruety-iynea2r0S46,0 hmiellronhoavteingarnaueanlotpeu,twcitth oeae1 b1a0s0epdeorcnent floptirngvLaIBrOoRmin2e0s1.4Uannddeevtehrey December 2004, 3M issued a forty-year $60 million floating rate note, with a rate based on a floating LIBOR index. Under the terms of this floating rate note due in 2044, holders have an annual put feature at 100 percent of par value from 2014 and every aopntnioinrsshrayttcohmemerneceunesn yncaarlsmfartuormittyh.e Udantdeeorfthseyaencemoafnsdhceacfhothiindn saitvenortaersydu hein r202e7,i2n040fisnnald m2a0t4u1r,ithy eaeprricheasve pt anniversary thereafter until final maturity. Under the terms of the floating rate notes due in 2027, 2040 and 2041, holders have put aorraapnntmiggoiinnnsgogotrffhruooaptrmmicnno99cm99iptmppaeleerrnccoceenenntttthet1eon ay11fe00oa0rresppmeeferrrcncoetemnintottonhofeefdppdaoaarrttevaioaenlfug.ies.sruFFao ateonrhnctoeheeeasn.ppdeerreiiaoocddhss presented, 3 was reir third anniversary thereafter presented, 3M was required 0tpurchasaen teria until final maturity at prices to repurchase an immaterial amount of principal on the aforementioned floating rate notes. NOTE 11. Pension and Posreirement Benefit Plans NOTE 11. Pension and Postretirement Benefit Plans SMhascompany:sponsored esirment las covering substantial fl U.S. cvployees and many employees isd the United 3M has company-sponsored retirement plans covering substantially all U.S. employees and many employees outside the United Sts Tn ol, 3M hs over 8 defined bf plan in 27 counties. Pensonbenefits asad wih thes plans generally are States. In total, 3M has over 80 defined benefit plans in 27 countries. Pension benefits associated with these plans generally are sedan sch patcpyeuarsnoftse'rvse, compensation, and se a rtvmento ination. The pimary US. definedbene based on each participant's years of service, compensation, and age at retirement or termination. The primary U.S. defined-benefit pension pln was closed t newparticipants lle January 1. 2009. TheCompany lsprovidescertain postmen beslh pension plan was closed to new- participants effective January 1, 2009. The Company also provides certain postretirement health Car nd fe nsrance befits fort US. clog es ho ech einen sg while cmpoyed by he Company nd were care and life insurance benefits for its U.S. employees who reach retirement age while employed by the Company and were ployed bythe Company prto Jianuoary 1. 2016. Most nematona ploynd ec arcovered by government health employed by the Company prior to January 1, 2016. Most international employees and retirees are covered by government health Car progr. The outofcompiny-providd postmen hesth cars pls for trations employenost material and is care programs. The cost of company-provided postretirement health care plans for international employees is not material and is Combinedwith U.S mounts nthetable that follow: combined with U.S. amounts in the tables that follow-. "The Company hasmadedeposits ois defined benefit plans ith independent sce. Trust nds snd deposits with nsorance The Company has made deposits for its defined benefit plans with independent trustees. Trust funds and deposits with insurance companies re mainsined to provide pension benefits pla participants and hisbeneficiaries. Thee ar noplanses i he companies are maintained to provide pension benefits to plan participants and their beneficiaries. There are no plan assets in the on-qualified pln dc ots tur. Fort U.S. postive helt are a fe nsrancs bent plan, the Company is se non-qualified plan due to its nature. For its U.S. postretirement health care and life insurance benefit plans, the Company has set ide amount at eat cual 0sansa bent eyments with sn independent rte aside amounts at least equal to annual benefit payments with an independent trustee. `3SnMisf'sicpparrinimmtaarrrydyiUUt..SS.b.aaqnuucaelilfiTeddomddpeefrfiiennveeiddoubbseendneifesictrppelltaainnodndoaosreyssnsnoootntthhiaabvvueetaommnahnaadtantcoarnydcbceaaassshhtpcoonpnottiribtrbouutstyiononynbPbesecciaaouusnseetPtrhhoeeteCCcootimmopnpaaAnncyyt hbfauasnsdaing reirements significant credit balance from previous discretionary contributions that can be applied to any Pension Protection Act funding requirements. s"TThuheebCCsootmmpapanannyyflaallrsoeogssapplooonnsUsooSrr.ss mecmpnpplllooyyeeesssavBviiinngnssnpllaiannnsognuunnJddeaerraSrSeceytcitio1,onn2040101,1K(f)ko)oUoffStt.hheeeItmnpetelrmonyaaelesRR,eevvteehnneuuCeeoCCmopoddaeen..yTTdhheeusscespepadlannisssaarmrsaetoacfhfeeornedd 0to substantially all regular U.S. employees. Beginning on January 1, 2016, for U.S. employees, the Company reduced its match on dcoomwplnoyfesom4061%kpcorntir0i2to0i1or6n).ofFolr lbilcoemmppenlsoayteisonhmiartedcpherdoitocJaasanhrt1ye, 2o0f0495,44 oprl6oy0,4d0e1p1e)cndoincnng tthebltaonfiuiopwh0ni5csh employee 40 l(k) contributions. For eligible employees hired prior to January 1, 2009, employee 40 l(k) contributions of up to 5% 4t(thd0heeo1w4ce)mnmpcpfolrlnoootmysreiee6b%upatraiirpotcrinicisoipopraafttotseup.s2.0E1tEo6mm)$pposllofo(yesdeleieogsswibnihlieerrecdodommoonnpeoo4nrrspafafitltieoorrnJJ1nma0un2aau0tra1c6ryhy)edf11,,iin22g00c00ia9,sl,hreraeetcccoreeaimivtpveeees.naosccfaaa4tss5ihh%ommnaoatsrtcc6dhh0o%oeff,v10d0e0e0p%%ennfdfoosirrnmgeepmmolpnploltoorhyyeeerpeeeltainreinmewnthich 40 l(k) contributions of up to 5% (down from 6% prior to 2016) of eligible compensation and receive an employer retirement oifncionvmeesstcmceonutnftucnadsshpcuornsteinbtut0iotnhoefm3p%looyfetshse' participant's tal sgl compensation. All onrbtiorne invested in umber income account cash contribution of 3% of the participant's total eligible compensation. All contributions are invested in a number of investment funds pursuant to the employees' 89 22775500..00008899 TabeofComets Table of Contents ection. Employer contributions othe US. denedconibuton lanwere S139 lion, S165 lionandS153 million or elections. Employer contributions to the U.S. defined contribution plans were $139 million, $165 million and $153 million for 2016, 2015 nd 2014, respostivel. 3M sbsidirics in various inemationa cunts ls pariipat in defined corbin pans. 2016, 2015 and 2014, respectively. 3M subsidiaries in various international countries also participate in defined contribution plans. Employer contributions to th ineratons! defined contibtion pans wre 57 ilo, S77 illo ad $75 milli or 201, Employer contributions to the international defined contribution plans were $87 million, $77 million and $75 million for 2016, 2015 and 2014, respectively 2015 and 2014, respectively. Asa resultofchanges mad ots Us. postmen hecsa ibetnefhit plans in 201, theCompany has rsnsioned ll curt As a result of changes made to its U.S. postretirement health care benefit plans in 2010, the Company has transitioned all current and oar eres 1 sings ccountbelts based pln. These changesbecame fectivebesiingJanuary 1, 2013, for ll. and future retirees to a savings account benefits-based plan. These changes became effective beginning January 1, 2013, for all Medicare gible eende hie Meare libdependents and became lfcbeginning January 1.2016, or ll on Medicare eligible retirees and their Medicare eligible dependents and became effective beginning January 1, 2016, for all nonMedicare dlgible ere ndthi lib dependents. In August 2015 3M modified the 3M Retiree Welfr Benefit Plan Medicare eligible retirees and their eligible dependents. In August 2015, 3M modified the 3M Retiree Welfare Benefit Plan postetement medical bent ducing the ft benefit for partipanntos tireda ofJusry 1, 2016, For participants ing postretirement medical benefit reducing the future benefit for participants not retired as of January 1, 2016. For participants retiring afer January 1, 2016 the Ries Medical SavingsAccount (RMSiAs n)o longer reitd with nerst nd he indexation on both after January 1, 2016, the Retiree Medical Savings Account (RMSA) is no longer credited with interest and the indexation on both he FMSA and he dicare Heli Reimborsement Arrangennent reduced from3 percen1t5perpcrecanftor those the RMSA and the Medicare Health Reimbursement Arrangement is reduced from 3 percent to 1.5 percent per year (for those colo whore dlgible for thes acount) Ao efactve Janary 1, 2016, 3M nooner offers 3M Retire Health Care employees who are eligible for these accounts). Also effective January 1, 2016, 3M no longer offers 3M Retiree Health Care Accounts tone irs Du1e hes changesth plan wasre.mcssurd i he thi quaoft201e3,resuling in decrease he Accounts to new- hires. Due to these changes the plan was re-measured in the third quarter of 2015, resulting in a decrease to the projected bent obligation ably of approximately S233 millon, nd related increase 0 sharcholders qui, specifically projected benefit obligation liability of approximately $233 million, and a related increase to shareholders' equity, specifically accumulated obercomprehensive income. accumulated other comprehensive income. AAistosufsoDefudDcfeoccrmecmbaebelrrl331i1,,n2200t11h,4e,yttehhaeerC-Coeonmmdpp2aan1ny4y ccUooSnn.vveedrrettfeeiddne0todttbhheene"fR"iRtPPp220i011o44nMMaonornartulaiiltittayynTTtaaabbnleldes"sp" osannsddtuppamdtaeetendd otthbhleeigmmatooirotranlittsy diimm2pp0rro1ov3veeemmxeepnentntsssec,lalse "iTmtTihhuleesleiiomdmnppfaaoancrcdttcoaotflhftcehtuhiUlia.ssSti.ccnhhgaaacntnhcggeueemyuiienlnacacrrrt-eeeeaadnssdeepdd2st0tthh1ee4iyyUeeaa.mSre-.rendnntedfbi22ne00ne11edf44ibtUUe.nb.SSe.i.figptpeeapnneossniinsooinnobnypprraaoonpjjnepeucrcttoietexaddinmbbtaeeatnnneeedlffiyiptto$oos1bbt0lrlie0iggtimaarttieiilmoolnneon((nPtPBoAbHOsloiO)gfbb)ayytDioeaanppcpsperrmaoobnxxediirmm2a0a3t11tee,5llyy2e0x$S1p856e22,n00stehe. `2mC0Coi1olm6lmi.oppnaaTnnhayyenduuippmtdhdpaeaattcUeetdd.Sottf.hheaehcimmcsouorcmrhitauasllniiatgytyeediidmmepppcorresootarvvseeeetmmidreeenmhntetessnyctesaablleref-ntocoeaSfdSietc2loa1bleel6igMMaPUPt.-iS-o2.2n001p1b6e6yn,,sawhipoihpnirccoPhhxiOwwmaaassbteyrrleyalelp$ap1srs0eod0imbbmayyitlttlehilhoeynSS.SoAoHcssiOeoytyfmoDioflfelcAAoeccnmttuunbaaerdririee3tssh1eii,nn2UOO0sc1.ct6too, bbteherer a2c0c1u6m.uTlhaeteidmppoascttroefttiheimsecnhtabnegeadtecrelaisgeadtitohne byyeaarp-epnrodx2im0a1t6elUy.SS.6p0enmisilolnonPBO by approximately $440 million and the U.S. accumulated postretirement benefit obligation by approximately $60 million. iI1niMMnaarrccehhm22p00l11o55,y, e33M sMcJJaappeaannimmaoodcdiofimfiipeeaddnttyhheepJJraaoppvaainndeLLdiimcmoiinttteerddibDDuetefifioinnneemddaBBteenhneefofiitft6.CC1oo2rr%ppooorrfatteethPPeeeennslsiioonngPPllaannsl((DaDByBCCoPPtPP)h).e. rBBdeeegginnienindngicJnoulnglyryib11,u.22i00o11n55., `epillaliaangnr,i.ibElEesmmehppmollovopyleyoeeyetsseheennssooirlelaoocunnetggoivereeryr a company provided contribution match of 6.12% of dsemfinaedddciotnitoinb)utsieornviicitso.aAdshe eidefos ifnedsl pbeanenfitm earn additional service towards their defined benefit opptdheeiennfissiriicooeanntliipgpolinlbaa,lnnesstshaaaeifltaCeerorymJJtupoylaytnhy11e,,ir2r20d0e11e-f5,ni,eneaeexxsdercceepopdtntttffrooihbrruDestlEihiogCiniPbgPlee, salaries above the statutory defined contribution limits. As a result of this plan modification, the Company re-measured the DBCPP, `TahviocrhabsleuInlteimal RSe1v7enlueiSoervperse-a cekumiiinmaetnitonsieeorr thoetrsmcionaetnedefd Doeecedrebfi3en1erd,b2e0n1e5f.itInpeMnasriocnhp2l0a1n5o,fo3nMaosft3c'esived a which resulted in a $17 million pre-tax curtailment gain for the year ended December 31, 2015. In March 2015, 3M also received a tafaacchvqqeuouririsarrebetddlleessImuunebbtnsieirtddnisiaar,lriicRsea.ser.vtBBeaynyiumttehheenSteoe,rnvddsipocoeefcfit22aa0l0x115rd5,me,titehhnriimasstippinlloaaatnnniobmmnaealddenetetetfnrintlaaonltdddertiismhtsreiintbraustftebieoaunnftsrooiiofnzfoeS2$nn101s166d5emmfgiinilelliadoonbret1onoegppfaiatrrttopiitcecinhippseaaionnmtntsso.puTTlhneahCtnesooCfmioonpmndaeipcnaotnfyey3daM afllns'osohehhsaadde components nthe applicable ables tha ll. other settlements, curtailments, special termination benefits and other items in 2015 aggregating to the amounts indicated in these components in the applicable tables that follow-. 3o5MMkwwlaaissmiiitnneffdoporrmrmneededrdduburriiinnpggntthaheereffiisrrss,tt qqauueaarrtttehererosofufb22i00e00t99,,ohthfaaattcttihhmeeinegaenlneenrratl ppgaarttnroetrnsnoofsefWeW rGlsGlTTsrrsaacddiiinnlgg CCpoormmopsapenadyni.yn,giisnn bwwyhhiticchehh S3IEMMCs'sbabneednnCeFfiiTtCpp.leannss ("h(CTCoroloadmmdimlminomgdoiCidtetoitdyymFppFuaaturntutnuryereertssshhTTirprdaaidisdintnirtngeigcrteCcCsootosmu,mrmatimrsejiuistdshogienoen)s).uo.boIIjnendcMMtianoarfrcvcahh2c2ro0i01mo1f11irn,,haooelvicenvorvtuterhrhstetiagoopabptbjioeocinjttiaeoesdnswocroeefclftle3iaM ivs1ercoaaivnnpniddrl ospxspirxoocoosetbeheedderridnlhigismisitibbteoeydtdtihppoeanrrStpnEileCrnnsa(oocnaffdneWWdCGsiGF.nTC AAThporplaerddliilinn22gg00s11Co3,fo,mtWthhpGeeaTnUUyrnni,aitttdheeiddendgSSiatsCattteoresimscptCCacoonouuuytrrttoiojnfuftdAArgpepepspetreauawllleessdrfefoionrratdftjhahuveesotSSreeedoccfotootnnhrddeefCCcloieirucctrurttitahpaaepfdifoeimricnmreteeedaddstrtehehdeceeddsivitiseitsrrmi'asctttpeccdroooipuuorerts'ssemdarludriliiknsnegtgr)i)vb.auTTlthiheoee,nibbnpeecnlnlaeeunffsiiti(tavppnelldaaonnfinttrruusstteeee schesoiutlmidmarinatgeteesddokiifnnnW ssouuwGrrnaannTccwrieealdpplrirneoogccseeCeledodsms., paatasshnoeoyffptitrnhhoteebraabenlnsnetasuralwelcemmoreveeeaaarssdyuujruorfeestmmeedepnnotttordtdriateotfcnelose..cftTTththhheeeeCdCodeoecmcmrpreepaaaasnsneeyybdheosasrstgiiiminnnsasuatuerrldaaannsfccaseeeirtthhmvataatltruiktebe.betelnvliiateelhvuveeees,,,fbirnbascatslsueeqsddiuvooennaowwforhhfaat2tt0eis1s 4r, in3c3suMMurrraeaannnntddlcycceoekcrrnottaaoviiwennrng33,eMMwibfblloeernrenehsfetuitltWppillnGaannthssTerflipleierddnobgaaCbllaoalwewmssrpuueiacittoninvynthertchylaeiomUUf...aSS,np. oDDrStiieisoptsrntietcomtfbCCteohorueur2rtdt0e1ffcoo5rrr,etahthsheeee DDicnioisusotrtrrrtiiicgcrtitinoolafeflMdMaiisnnisnnefnetesvsoaotaltuoaaefa.agtgvIhanaeiidtnnhessoeft effiiinvvrdsreeat niiqnntussauuirrrmteeesrrrrssaossnfeec2eee0kki1inn4gg, cnicnoootsmumicrppaeaaonncnfieesispceoopsnveeosaaramsg0eiotthofiooennrntffhooierr W tssuuGSmmimmsTaerarasrydyiCojnuogudergCtmnoomeftnpAtapaannnypddecddllaiiismmfso.isrsIsetnehddeSFeithhpgeetheamltaswsbCesiirur.ic2tu0.i1tIIn.5n,OOAtchsctetooofcbboteeuhrr2re2t001r21u505l,1e,6d33miMMneafaasannvuddorretthhmoeeefn3tMthMEeadbbeee,efnenenhftdistappenlltaahinnnosslsdufliirlanedgndsc+ae notice of appeal to the United States Court of Appeals for the Eighth Circuit. As of the 2016 measurement date, these holdings Threesperesoexnenttesd owsilsltnhoatn hcn laamfatfeearvie] apdevrecresnet offeStMonfhie vcalofasooldaatlod pnlaanncaisasltp,os3itMoncouf rhreyCobmeplaineys hat he rslaton of represented less than one half of one percent of 3M's fair value of total plan assets. 3M currently believes that the resolution of these events will not have a material adverse effect on the consolidated financial position of the Company. %90 22775500..00009900 TabeofComets Table of Contents "The Tlheen flloning ass se following ltbalbllee5s iinnccslluuumddmeeaaarryreccooofnntcchlieliisaretiilooannteoodffattmhhoeebubenetggsiinneniinnggoaannddsnenddiitnnhgge bbCaoalmalnpcaaensnoyocf'fettchhsoeenbsbeoenlneiefdfiaitttoeodlbbglliagaaintocionnsaahnneddettthhaee ffoafiir vale value of of pDDileeancnceaemcsmsbebelotrsef33uarp11soaswonffsettilhhlreeaevrslreeisaeseppsdeueccomttiimvvseueaypryeypealaorerfsms.et.hn3e3tMreehxlaaclotseeosdhshaabamsenocceeuefrrntittaatsiifnnroenncooosnng-i-nqmquipuzalealodliisffieiineecddthpuuennaCffcuuonnemdddeepddabnyppyeep'nnassrsciitoooinnncusaaonnlddiedppoatocoesasdttrtbeittaoirlranernsmecseenndtsthbboeeetennhteeeafrfisitmtoappftalaennsss,,, tat iilinnnecddnilisuvvisiaddirvuueaeallilolynyfcpaallnnuadddnesidinnrwettihlhtaeohteiaadnggggttorrehesggeuaaptteeiplaaerime enntnoottt/sesxiigcitenhseigfsCiocbnmaenpntaienaafinnyftsdd'wsfwihoihrcccoiechnmhsaapoarllrnoeiydnoetaoetttseiiidnmnccblpauaaddcneetcedddeiinbsytthhhepeeeattaaratbniblcdlseueslsgaattrhhrraaetetlgoflotcolaelowtdiwo.-n.eTssThahneehdlonobgtlhaSiget3rai5tmoimonainstlstleiffroosonr,r that tshosfe these Decembe3r1, 20n1d20615, plans are included within other liabilities in the Company's consolidated balance sheet and aggregated less than $35 million as of December 31, 2016 and 2015. Ch(Matiolnlinognses) beni ovation Change in benefit obligation AcecfuiiitioobnlisgTartaionnsfaebresgining of yer Benefit obligation at beginning of year Acquisitions/Transfers SIenrtveriecset scoontt Service cost IPFPnoaartrreeitriicecgisinpptaacxnnotctschtcnaotnnigtbreiurbtutiteoionncsshanges APcFPltloauarnaneraiagimmnaelene(nxdgdcammhieanenn)ntgltsseosrate changes BMeeAMndceeitfduciiaacrtariarepela(PyPgamaarertitnntDD)sRlRoesiesmimbubrursseemmeenntt Benefit payments "Saetnldeomtehnetrs, cuaiments, Settlements, curtailments, special special termination termination benef benefits C hBaBenneagennefedifiiottntchopbebllrlaiigngasatiisoosnnesaat end of end of year year Change in plan assets AFaci tvlouenofTprlaunsatesre Fair value of plan assets at at begining beginning ofscar of year Acquisitions/Transfers ACcotmupaalne y coomt nbpulicnnm asssets Actual return on plan assets PFaoCPrrtaoeirmitcigcpinipapnaaenynxttccchocnaontnntigrtiberbiarbututiittooionnnscsshanges Foreign exchange rate changes `aSctlem-- ents curtailment, special Benefit payments termination benefits FSaeaintnrtdldveoamotltehuhneeetrrso,f curtailments, planassets at special termination endofyear benefits FunFdaeidr vstaaltuuse aotf codplanof yer assets at end of year Funded status at end of year lid Nonqt Qualified and Non-qualified Pension Benefits oe me United States International me Te 2016 2015 2016 2015 i. eE siEs Postretirement Benefits 2016 2015 SISK S164 5 63 569M S 2216 S 242 15,856 SI I -om om am mw 259 ws oes om ome mm 575 -- so -- wu -- = em oa -s -- an 5 oo en owo@m 1m 427 $ 16,452 $ 6,322 $ 6,979 $ 2,216 (5) 94 -- 293 133 154 54 655 171 206 79 8 9 -- (472) (589) 7 (4) (6) -- (657) 724 (274) 7 $ 2,462 75 98 14 (22) (211) (80) o--m wn e--m oe a_w 02)| (919) (874) (245) (232) (104) (122) Ww __ay oan ___ \ (1) (13) (7) (19) -- Team ST Sees Som a0 Tol $ 16,202 $ 15,856 $ 6,625 $ 6,322 $ 2,259 1 $ 2,216 S196 SIGS $ 13,966 $ 14,643 $ m= ow 779 om 259 Cm -=-om ww (919) 100 113 (874) SE SSIS 5,669 $ 5,957 $ sZ m sow 512 ms 121 89 8 wy aw (444) al ew (245) 287 151 9 (498) (232) 1367S 146 1,367 $ 1,436 wk 90 3 5 3 Zw ----aw 02) (104) 36 3 14 (122) Ww(4) Sm 14,081 Senn (2,121) 19(16) ST$ 13,966 S050 $ (1,890) way (4) SEer Sie $ 5,617 S00 Sey $ (1,008) (13) $ 5,669 $ (653) -- Si $ 1,356 sow $ (903) Soe $ 1,367 56m) $ (849) 91 91 22775500..00009911 Table of Contents Outil ed Nongsi i. Qualified and Non-qualified tian (Millions) Amounts record nthe Consaidaied Amounts recognized in the Consolidated asorDec3t, as of Dec. 31, Non-currnt assets Non-current assets Accruedbeni cost Accrued benefit cost Carn ibis Current liabilities Non-currnt ales Non-current liabilities Endingble Ending balance BlanesSheet Balance Sheet TE Te Pension Benefits United States International 2016 2015 2016 2015 me Postretirement Benefits 2016 2015 Sas $ 4 $ as ows mss os 3 $ 48 $ 185 $ -- $ @(52) _eum (2,073) Tan $ (2,121) wa (47) aso awe (1,846) Tam Samm (1,890) (10) (1,046) $ (1,008) 0 @ (10) ax _ew _ aio (828) Sen 30m 560) $ (653) $ (4) (899) (903) $ (3) (846) (849) fr Qualified and Non-qualified . ition (Millions) AmountsrecIonscgcumzaieed hder Amounts recognized in accumulated other compreinhcoemeansofDiecv.3e1, comprehensive income as of Dec. 31, Net asin lignin (ase) Net transition obligation (asset) Netsctuaihlos gin) Net actuarial loss (gain) Prior service cost edit) Prior service cost (credit) Endingblanc Ending balance Tie Te Pension Benefits United States International 2016 2015 2016 2015 iePostretirement Benefits 2016 2015 s$ -st 5,704 wn(198) SRS $ 5,506 5s sie 5,366 om (227) Ship $ 5,139 s --s as --s $ -- $ (2) $ nem ae te ms 1,933 1,610 co ey ew em (56) (68) Siem Sis0 5s Sos $ 1,877 S 1,540 $ -- $ 761 (214) 547 S 815 (270) 545 "TrTehhceeebbdalilanangnccaseboolfef aaammrooupunrnistssenrretececoodggbnniiazzeesddefodorr tinhneeterFraontraitoigonnnaalsluppellanannessyiinexacccuchmuaumnlguaeltarteetddoootnthheetrrhcecoomdmptrp.erehheennssiivvee inscof Doecemmbeer31 income as of December 31 iin the the preceding table are presented based on the foreign currency exchange rate on that date. "cTTohhmeeppepenensnsasiitooinnonsaaccccuuommfuutllhateteemddebbaeesnneueffriittnoonbbtlliidggaaatttieiooannnrpderpderosesesennottsts ttihhneeclasucdcteuasarniiaal sppsrresusemennpttivnoallsuobeofuotffbbueetnnuereffeiitctssombbpaaessneesddaootnniocenmmppllelovoeyylese.es ssTeehrveviiaccceecanunmddulated b"bcToeehnmneecpafheictncbosuabtlmliioglnagatiiaoasdnoobtofeffntihtethhfeieomtUUoeSnb.aS.ls.iugppraeeetmnnisoseiinonoontnfdpptalhletaaetnneassrnwwdnaaasdstoiS$e1o1s55nn..a11ol44t99ipbnebcniilslulidioooennapaanlnnaaddnss$s$u11wma44s..p83t3i63o4.nbb0iail8bllibooounitaafutntDDuareeecdcecemo$mmb5be.pr7ee333nr11si.a, t22ioo00n11n66leaavnaneddlsD2.2e00T11ch55,ee,marrceebscseppu3eerm1cctutiiv2lvae0elt1elyy.d6. aTnhde 2a0c1c,umreuslpaetcetdibveelnyefit obligation of the international pension plans was $6.058 billion and $5.773 billion at December 31, 2016 and 2015, respectively. "The following amounts refolpeansiton las ith accumulated benef ligationisn excofeplsan assets sof December31. The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 31: QuNo e quid d Peoa n ane Qualified and Non-qualified Pension Plans Ques (Millions) Prec mer obTga Projected benefit obligation Accumulated benefitchigation Accumulated benefit obligation Fr value ofplan aves Fair value of plan assets United States eC wm 2016 2015 Sie TIS $ 16,202 $ 15,856 elm 15,149 14,834 HOM Bow 14,081 13,966 International we 2016 2015 Sage 52m $ 2,590 $ 2,382 23m 20 2,351 2,149 16s 16 1,635 1,566 292 22775500..00009922 Table of Contents Comp tt rt nd tt asssn ops ne Components of net periodic cost and other amounts recognized in other comprehensive income I ---- Net periodic benefit cost is recorded in cost of sales, selling, general and administrative expenses, and research, development and TeT e eh os oc related expenses. Components of net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31 follow-: gt Ecrn a fae-- (Millions) rr Net periodic benefit cost (benefit) Service cost == Rens mcmomcmeycics Interest cost en ho om EEA Expected return on plan assets IT Amortization of transition (asset) er So Smee obligation SE ent Ga 1 0 0 ow ow @ Amortization ofprior service cost (benefit) Smee Rw 0m we 99 Amortization of net actuarial (gain) loss nt Settlements, curtailments, special TT ss ses termination benefits and other apNet periodic benefit cost (benefit) after Cm settlements, curtailments, special SERIES ms ws mamimamassimss termination benefits aa~d other OR ot Other changes in plan assets and benefit Sr obligations recognized in other mn comprehensive (income) loss rita Amortization of transition (asset) er PEE obligation Prior service cost (benefit) IEcena GBB w Boy Amortization of prior service cost (benefit) FT SI Net actuarial (gain) loss EE EE EERE Amortization of net actuaxial (gain) loss fair EE Foreign currency Ee Total recognized in other comprehensive -- TooLon fu tan ow Loe 52 hue ba (income) loss es te Total recognized in net periodic benefit cost a (benefit) and other comprehensive (income) fs ts msn ss some su sense lOSS 2016 Qualified and Non-qualified Pension Benefits United States International 2015 2014 2016 2015 2014 Postretirement Benefits 2016 2015 2014 259 $ 293 $ 241 $ 133 $ 154 $ 141 $ 54 $ 75 $ 65 575 655 676 171 206 252 79 98 97 (1,043) (1,069) (1,043) (308) (308) (312) (90) (91) (90) -(24) 354 (24) 409 (1) (1) (1) -- 4 (13) (13) (16) (55) (42) (47) 243 91 144 121 61 73 56 4 2 4 (6) 4 -- 1 $ 125 $ 266 $ 121 $ 77 $ 176 $ 189 $ 49 $ 114 $ 81 -5 24 692 (354) -- 24 312 (409) (266) (4) 2,167 (243) 1 (5) 13 512 (91) (93) 1 10 13 (270) (144) (174) 1 3 16 592 (121) (215) --55 8 (61) -- (212) 42 (23) (73) (1) 47 358 (56) (1) $ 367 $ (73) $ 1,654 $ 337 $ (564) $ 276 $ 2 $ (267) $ 348 $ 492 $ 193 $ 1,775 $ 414 $ (388) $ 465 $ 51 $ (153) $ 429 A Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over the next fiscal year - rcrng (Millions) er hom Amortization of transition (asset) obligation er tt a" @ ow Amortization of prior service cost (benefit) benny ww w Amortization of net actuarial (gain) loss te tye erm Total amortization expected over the next fiscal year Qualified and Non-qualified Pension Benefits United States International (23) 387 364 $ (12) 119 107 Postretirement Benefits (53) 56 3 Tapes ity tat tsi emma dt The Company primarily amortizes amounts recognized as prior service cost (benefit) over the average future service period of Simm active employees at the date of the amendment. "93 22775500..00009933 ibofClontees Table of Contents Weighted-average ssumptions we 0 determine benefit obigatons asof Decembe3r1 Weighted-average assumptions used to determine benefit obligations as of December 31 Ona Nonale Pension Bet Qualified and Non-qualified Pension Benefits Ta mr United States International PrHicmies Postretirement Benefits 2016 2015 2014 2016 2015 2014 2016 2015 2014 Discount te Discount rate Compensation ae ness Compensation rate increase AI AAT AI0% 2S 02% 311% 426% 488% 407% 4.21% Tos 410% Lon 290% 200% 3m NA NA NA 4.10 % 4.47 % 4.10 % 4.10 % 4.10 % 2.54 % 2.90 % 3.12 % 2.90 % 3.11% 3.33 % 4.26 % N/A 4.48 % N/A 4.07 % N/A Weighted-average assumptions use 0 deer nt cotfor ears ended December 31 Weighted-average assumptions used to determine net cost for years ended December 31 QuRiEd 0d No siE d Pone ents ww 2016 Qualified and Non-qualified Pension Benefits United States International 2015 2014 2016 2015 2014 [-- Postretirement Benefits Ee 2016 2015 2014 Discount te -sevicecont Discount rate - service cost Discountate iretot Discount rate - interest cost Exposed retum on ats Expected return on assets Compensation ae ness Compensation rate increase ATO 4.70% 37% 3.73% TSO 7.50% 410% 4.10 % ANOS 4.10% dl0% 4.10% Te 7.75% 410% 4.10 % AIRY 4.98% i9n 4.98% T7S% 7.75% 40% 4.00 % 2M 2.84% 272% 2.72% STIN 5.77% 290% 2.90 % AUIS 3.11% Ale 3.11% SN 5.90% Ime 3.33 % G2 4.02% d02v 4.02% SKN 5.83% 33% 3.35 % ATO% 4.70% 38% 3.80% 69% 6.91% NAN/A 407% 43% 4.07% 407% 4%3e 4.07% 691% Tas 6.91% NANA N/A 4.83% 4.83% 7.11% N/A "The Company provides lige ies the U.S. posttrment elt ar ene plan 10 ving account benefit baed The Company provides eligible retirees in the U.S. postretirement health care benefit plans to a savings account benefits-based lan. Th onions provided heCompany othe beh savings esos ees pent pr yar for closes who plan. The contributions provided by the Company to the health savings accounts increase 3 percent per year for employees who Fein rtoo Janeuary 1, 2016 and nese 1. percfomployees wh eine o oar January 1. 201, Therefore, the retired prior to January 1, 2016 and increase 1.5 percent for employees who retire on or after January 1, 2016. Therefore, the Company mo fongerhas material expos obealh cre cot flan Company no longer has material exposure to health care cost inflation. "The Company detertmheidinsceounst tc usd1 mess plan isisof the Dsscnb3r1 css aefor he pion The Company determines the discount rate used to measure plan liabilities as of the December 31 measurement date for the pension and osetrement bent lane, which le the dtc wed for he elated sal meant asnpions Th dierant aie and postretirement benefit plans, which is also the date used for the related annual measurement assumptions. The discount rate Telos the cutnt ae bi he ast aii beeldi sd atth nof hd eyar. The Compary sts 1s reflects the current rate at which the associated liabilities could be effectively settled at the end of the year. The Company sets its fate reflect he ied af porotfhiogh quali, edn debt instruments ht wold produce ash lows suiient rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flow-s sufficient in ming and amount ste pected tre bens Using this methodelog. the Company determined Gown i of 21% timing and amount to settle projected future benefits. Using this methodology, the Company determined a discount rate of 4.21% for pension nd 426% for psretrementbene ob propre for 1.5. lars a of Decem31b.2e01r6, ich sa dress for pension and 4.26% for postretirement benefits to be appropriate for its U.S. plans as of December 31, 2016, which is a decrease OF0126 prscatag pointe and 0 22 prec pots, Espey, from th te sed a ofDecember 31, 2015. Forthe of 0.26 percentage points and 0.22 percentage points, respectively, from the rates used as of December 31, 2015. For the ications pion nd postmen pahe ndiscsount to io ref hecent ie at which the soci bilfes could international pension and postretirement plans the discount rates also reflect the current rate at which the associated liabilities could bocllociel edat he nd fhe year. 1hcounty as dcp arket in corporte bndsthCompany chesthe cxpecied be effectively settled at the end of the year. If the country has a deep market in corporate bonds the Company matches the expected cau low rom the plan ihr portfoofbloindos that generate slick ash lwox a nscale ure generaied fom cash flow-s from the plan either to a portfolio of bonds that generate sufficient cash flow- or a notional yield curve generated from value bond information. In couric hdeo nt hae deep mathe corpora bonds, oneTImnt bnre cdondesred ith available bond information. In countries that do not have a deep market in corporate bonds, government bonds are considered with ik premio tospproimate copra bond id. a risk premium to approximate corporate bond yields. Hegining in 2016, 3M changthe thd vd 0 timatethe vic and ners otcomponentsoften oid persion Beginning in 2016, 3M changed the method used to estimate the service and interest cost components of the net periodic pension ameter postttemebone sacs Thaw method masaes ios ath ed irc vos separ vg wa spo yer and other postretirement benefit costs. The new- method measures service cost and interest cost separately using the spot yield curve approach spied fo cachcorespondin obligation. Servic css are determined esd on dation spccifc spot is apd fo the approach applied to each corresponding obligation. Service costs are determined based on duration-specific spot rates applied to the Chios cos ash flows. The ners cont culation dtemined by appv drat.spec spo ries oho yea ye service cost cash flow-s. The interest cost calculation is determined by applying duration-specific spot rates to the year-by-year rojced beat pyicat. The spot iedcus approach doc ot fst te sreofethe fol bet blgatons she projected benefit payments. The spot yield curve approach does not affect the measurement of the total benefit obligations as the Chung in sri ad tet cote h: cual in snd losses recoded in thr comprehensive income. TheCompany change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income. The Company hamtedtohones metodo rosie ore recieof sveeessrd est Sodby grove the sorta bees changed to the new- method to provide a more precise measure of service and interest costs by improving the correlation between The projced bene cash Hows and the discrete spot ied cove res. The Company second fo is change ss change in the projected benefit cash flow-s and the discrete spot yield curve rates. The Company accounted for this change as a change in esimate prospectively beginningi th it qaorf 20i16. Asa rest of he change th po id crv apres, 2016ann estimate prospectively beginning in the first quarter of 2016. As a result of the change to the spot yield curve approach, 2016 annual ein benef pension ad poretirment et pers benefit ost dread spproxmatly S150 millon, defined benefit pension and postretirement net periodic benefit cost decreased approximately $180 million. Forth primary U.S. qualified pension plan, th Company' sumption for he expected cam on plansetswas 7.0% 2016. For the primary U.S. qualified pension plan, the Company's assumption for the expected return on plan assets was 7.50% in 2016. Fejotat tums av baw way on ond, ably dod squry awd Topome lors ed fran ooking cimatos of Projected returns are based primarily on broad, publicly traded equity and fixed-income indices and forward-looking estimates of active portion vcsiment management. Ax of Doce 1. 201, the Company's 2017 expected og tof e stun on active portfolio and investment management. As of December 31, 2016, the Company's 2017 expected long-term rate of return on U.S pln ats 7.25%, a decroefe 0.23 preniag pits rom 2016. The U.S. plan assets is 7.25%, a decrease of 0.25 percentage points from 2016. The a94 22775500..00009944 --_Table of Contents expect eum assumption based on the strsegic asstallocationofth lan, ong em saptal market ur exctationssnd expected return assumption is based on the strategic asset allocation of the plan, long term capital market return expectations and pected perfomance fom acive neste management. The 2016 expeced on.tem rotf teu is based on n asst expected performance from active investment management. The 2016 expected long-term rate of return is based on an asset locaton seston of 2%global equities, 8% private cquiis 41 Fcd-income secure, and 16 solute rtm. allocation assumption of 25% global equities, 18% private equities, 41% fixed-income securities, and 16% absolute return investment independent of raditonsperformance benchmarks, ho ith posi rf rom Scieinset management. investments independent of traditional performance benchmarks, along with positive returns from active investment management. "The actu nc re ofstamon pla sset in 20was1556%. In 201 thoplncmd a a ofrtm of 0.7% and in 2014camed The actual net rate of return on plan assets in 2016 was 5.8%. In 2015 the plan earned a rate of return of 0.7% and in 2014 earned a etm of 130% The average annual actual rum on he plan ast ver he past 10.and 25 years has ben 72% and 9.2% return of 13.0%. The average annual actual return on the plan assets over the past 10 and 25 years has been 7.2% and 9.2%, respively. Ret on sets assumpions or temational pensionsnd thrpos einen bene plansacaleulted on a po respectively. Return on assets assumptions for international pension and other post-retirement benefit plans are calculated on a planby-pass wing plan set allocations nd pected ogem ate ofeta assmptons. by-plan basis using plan asset allocations and expected long-term rate of return assumptions. DDpluuarnrsii.nnggD22u0011i66n,, th2h0ee15CC,oomtmhpepaaCnnoyyrcnocpnoatnnrtryiisbbouuntteetddibS$u33t58e00dmmSi2illl6lii4oonnmittollsiitosnUU.t.SoS.t. saannUdd1.iintsnerdneantriaonttailoppneennassliioonnpeppnllsaainnossnsapnnlddan$$s33ammdiilllSii3oonnmtitooltliistosnpptoossottrtceitirreemmeenntt ppp1loo4assnSttsre..etDtireaeunnmrdienengenttr2pp0all1aat5ns,si..thoIIennnC2200ro11m7t7,pm, attehnhneye tCCcooopnmmltaprpniasba.nnuyytTehdeeexx$ppC2eeoc6ctm4tsspmta0oinclclyniootndnitortbciobsauitnttseeoUaahnn.Saaav. mmeaonoudupnnitntitienernttdhaheteimorraninaaglngepieoofnmfs$$ico33an00s00hplmmpaienillnsllsiiaoionnondnt1o$0c3S$o55m0n0i00ltlimmoiinillnlltiioooonniobtlsofifgacatasisohhnt0o iftsorUt.SU..aSn.dpilnatenrnianti2o0n1a7,l Futurcontusions retirement plans. The iColmdpeapneynddooens marke ondions, intrest tes sd ber tors not have a required minimum cash pension contribution obligation for its U.S. plans in 2017. Future contributions will depend on market conditions, interest rates and other factors. Future Pension and Postetirement Benefit Payments Future Pension and Postretirement Benefit Payments "The following bleprovidesth estimated pension and postreirnncnt benefit payments that are payable from the pans paicipants. The following participants. table provides the estimated pension and postretirement benefit payments that are payable from the plans to 2(0M1t7iolliBnonessn)et Payment 2022200011118789 BBBBeeeennnneeeeffffiiiittttPPPPaaaayyyymmmmeeeennnnttttssss 2222000021221900BBBBeeneenennefeefiffiiittttPPPPaaaayyyymmmmeeeennnnttttssss Newtfive ears 2021 Benefit Payments Next five years Qualified and Non-qualified On beni Pension Benefits rrr rrr United States International SI Soa $ 1,020 S 203 100 nm 1,040 212 1087 FY 1,057 228 Lom 2s 1,071 235 Loss 256 1,088 256 sss Lis 5,586 1,452 Posrrmen Postretirement Benefits sm S 129 1139 17147 157157 166166 ft839 Plan Asset Management Plan Asset Management Ms investment tty forts onson nd poststirement plans i fo manage the fund. ging-concen bass. The primary 3M's investment strategy for its pension and postretirement plans is to manage the funds on a going-concern basis. The primary gutofth rst funds 0 mtsh ligation sri. The secondary gosi 0 can the ighet at of rtm possible, goal of the trust funds is to meet the obligations as required. The secondary goal is to earn the highest rate of return possible, ithot copardiing it pra sl nd without slictin the Company 31 dc cuntofcolbution isk. Fund runs without jeopardizing its primary goal, and without subjecting the Company to an undue amount of contribution risk. Fund returns ar used 10 help finance pres and foto blgatio1ns he exten possible within actuarially determined onding mits nd a are used to help finance present and future obligations to the extent possible within actuarially determined funding limits and taxGtrminedasset iit, husreducing he poten nedforaddionalcombtfrioom 3nMs.The nestmentstegybas sed determined asset limits, thus reducing the potential need for additional contributions from 3M. The investment strategy has used longdustin cashbods and derivative insruments oft igiTcnt portion of he interest re sent ofU.S. pic long duration cash bonds and derivative instruments to offset a significant portion of the interest rate sensitivity of U.S. pension liabilities. liabilities. NfNouornrmdma.lallHyly,o,w33eMvMedrdoocdesusenntooottcbbtuycymoorarslsleilllnaanntyyefonifttitssmooawwnnnagsseecmcueurnrittiioeifsaeashse a a fdiuirnrdeesc,tt tsinheveselisatmmnesenmnttafoyorr iitntssdippreeecnntssliyiocnbnuaa,nnddsooetlthhoeerrr phpooolssdtcre3ttiiMrremsmecenuntrt tbbielnseifTiht e afugngrdesg. aHteowamevoeurn,tdoufe3toMexsteerncaluinrvaeerstmnoetnctomnsaindaegreemdeontboftthee ifulndsr,etshteivpelaontshemsaeygirnedgiaretcetlfyobnudyp,rseeslltaogrehso.ld 3M securities. The aggregate amount of 3M securities are not considered to be material relative to the aggregate fund percentages. "dTTheheesddciissrccuiusspssiitooofninhotthshnaaettsffoollllslocoww.ss reWehrfieerlneenccheeesscttohhmepfiaainryvlbauelulseiemmveeesatsshursevmraeleunatsmtioooeffnmenceertrtthassiondassssaeeettssisinptpeerrmospmoioffsaeltensvvcdeslcson11s,,i22staaennndtd w33.i.StSheesteNhNorottmeear1133kfefotorr descriptions of these levels. While the company believes the valuation methods are appropriate and consistent with other market Tpaertsitcipad,ifftehreeuntse iofndaiteereonftfimvaeletst hhe oroerpaosrdstuinmgpltditon,os ogdetiermisne thefivaluofcertain financial instruments coud participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. os 95 22775500..00009955 -- Table of Contents 1 ion ls nt te of nd U.S. Pension Plans and Postretirement Benefit Plan Assets rr cmt bin 13 ee dU, sine gl, ins In order to achieve the investment objectives in the U.S. pension plans and U.S. postretirement benefit plans, the investment et ae seh Trott de on on at ts i 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 operate ooeth ean bs allocation, potentially for long periods of time. Acceptable ranges have been designed to allow- for deviation from strategic targets py tot meg Te pote ih men eg and to allow- for the opportunity for tactical over- and under-weights. The portfolios will normally be rebalanced when the quartertate. Faia bem ont on fat end asset allocation deviates from acceptable ranges. The allocation is reviewed regularly by the named fiduciary of the plans. mm 5 pnt mH Toeetne Approximately 42% of the postretirement benefit plan assets are in a 40 l(h) account. The 40 l(h) account assets are in the same I Sn a trust as the primary U.S. pension plan and invested with the same investment objectives as the primary U.S. pension plan. cent eel Bt pene pbyo chon lo: The fair values of the assets held by the U.S. pension plans by asset class are as follows: Jr ptv etmntptComgs itgyen (Millions) Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Level 3 Fair Value at Dec. 31, Asset Class Equities FE epi U.S. equities Non-U.S. equities ERD Rent Index and long/short equity funds* am Total Equities Re Fixed Income CL . U.S. government securities Non-U.S. government securities SE Preferred and convertible securities Fier U.S. corporate bonds Siro. Non-U.S. corporate bonds pan Derivative instruments ne Other* 2016 2015 2016 2015 2016 2015 a $1,522 $1,897 $ -- $ 1,179 1,149 -- $ -- $ -- m om Te Trm rl $ 2~701 $ 3,046 $ -- $ $ -- $ ww sm gm sg ss vaA m $1,701 $1,095 $ 560 $ 456 $ -- $ -- 146 126 -- Tp ems " 4 4 1 8 -- 10 9 3,392 2,820 -- LR -- 672 616 -- EBEow EEoEhE o T= S = o Gmmooak (1) (1) (31) 40 -- 2016 2015 $ 1,522 1,179 414 $ 3~115 $ 1,897 1,149 578 $ 3,624 $ 2,261 146 5 3,402 672 (32) 7 $ 1,551 126 12 2,829 616 39 11 Total Fixed Income Private Equity ns Derivative instruments fri Growth equity Lr ----- Partnership investments* foals Total Private Equity er Absolute Return Derivative instruments i Fixed income and other Hedge fund/fund of funds * Fethiye Partnership investments* et Total Absolute Return mi Cash and Cash Equivalents Cash and cash equivalents SR as Repurchase agreements and derivative margin activity Cash and cash equivalents, valued at net asset value* "Total Ca andCashEquals. Total Cash and Cash Equivalents aTotal BA Ecms Other items to reconcile to fair value of plan assets Fair value of plan assets $ L714 $1,107 $ 4~740 $ 4,066 $ -- $ $ 6~461 $ 5,184 Sos sos sm sams @s a $ -- $ $ -- $ E Plax ts mmmdahfPs daed 19 24 -- $ (83) $ (106) $ (83) $ (106) -- 19 24 2,188 2,450 $ 19 $ 24 $ -- $ $ (83) $ (106) $ 2,124 $ 2,368 Frm RI RITE $ -- $ $ (7) $ (5) $ -- $ 29 253 78 46 -- Er TTTIm erol aoh $ 29 $ 253 $ 71 $ 41 $ -- $ $ (7) 107 1,793 296 $ 2~189 $ (5) 299 1,409 355 $ 2,058 $ 55 $ 102 $ -- seine flannel sais ial -- (545") EEE $ 55 $ 102 $ (545) EEEESEB= EitEe $ 4,518 $ 4,532 $4,266 $ 1 $ 2 5 -- $ c 6 $I2 $4,113 $ (81) $ $ 57 $ 103 (545) 5 $ wo 931 783 $ 443 $ 891 $ (106) $14,332 $14,125 S (251) $ (159) $14,081 $13,966 * In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value (NAV) per share (or ed wpb doe et i RY 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 ik He sat Wr aon 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. =96 22775500..00009966 Table of Contents eos ts lb ep ny fs los The fair values of the assets held by the postretirement benefit plans by asset class are as follows: er ppm Contents Fair Value Measurements Using Inputs Considered as rv Fair Value at (Millions) Asset Class Equities EEU.S. equities BED eens Non-U.S. equities Index and long/short equity funds* wife Total Equities Fixed Income re U.S. government securities Non-U.S. government securities i U.S. corporate bonds SETNon-U. S. corporate bonds SeDerivative instruments wlio Total Fixed Income Level 1 2016 2015 Sa =ea p sa sage $ 477 5 5 5. 3 62 $ 508 59 Erm r--r--r-rare $ 539 $ 567 Ses am amaa ama $ 102 $ 71 -- = ER dod -BEEEEE -& A a 2 -Eases ww $ 102 $ 71 Level 2 2016 2015 $ -- $ -- $ -- $ $ 191 $ 192 9 8 172 153 36 35 (1) 2 $ 407 $ 390 Level 3 2016 2015 $ -- $ -- $ -- $ $ -- $ ----- $ -- $ Dec. 31~ 2016 2015 $ 477 62 40 $ 579 $ 508 59 49 $ 616 $ 293 $ 263 9 8 172 153 36 35 (1) 2 $ 509 $ 461 Dananat Private Equity Derivative instruments Growth equity Flipmoines Partnership investments* lm Total Private Equity ely Absolute Return TE Fixed income and other [aE. y Hedge funcFfund of funds* eee S $ -S - $ 1 T$ S -- $ 1 -- rar $ 1 $ 1 $ -- $ Tir we ar $ 1 $ 10 $ 3 $ ---- E$ R (3) S$ E(A4) S$ -- D(3) R$ S)(4) 1 1 113 136 rmemoh of $ (3) $ (4) $ 111 $ 133 reoa a iEgtadhp 2 $ -- $ $ 4 $ 12 72 54 Partnership investments* 12 14 Total Absolute Return Cash and Cash Equivalents Caband ca qtr Cash and cash equivalents erI e Repurchase agreements and derivative margin activity Cash and cash equivalents, valued at net asset value* rT Total Cash and Cash Equivalents i8 eto ttn Total $ 1 $ 10 $ 3 $ SHS ms 3s os $ 44 $ 38 $ 3 $ 3 -- (22) S EE g $ 44 $ 38 $ (19) $ 2 $ $ $ $ 687 $ 687 $ 391 $ 392 $ -- $ = ss asa -- $ = 5 -aFi e -- $ joe am (3) $ $ 88 $ 80 $ 47 $ 38 (22) 38 30 $ 63 $ 68 (4) $ 1,3511 $ 1,358 Faitvalue ofplanacts Other items to reconcile to Fair value of plan assets fair value of plan assets He $ 6 $ 1,356 si $ 9 $ 1,367 corms i ASC E010, cortices esr io win et et her rr *In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value per share (or its Ce dost i et. TNS rt equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the eet dm as Bn ety est ding en Be underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the ee in nd Th hs oo nd eh rb rt mn investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of e he mat y tn1 eof om the fair value hierarchy to the amounts presented in the fair value of plan assets. Pl dd i hd lin i pci iv min ich nods rd, Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded. Pitman Cope Fixed income includes derivative instruments such as credit default swaps, interest rate swaps and futures contracts. Corporate debt tmnt esd mes so nt includes bonds and notes, asset backed securities, collateralized mortgage obligations and private placements. Swaps and derivative me pn SE Eo A Min go instruments are valued by the custodian using closing market swap curves and market derived inputs. U.S. government and Em Rts oot kh lA Ac Ee government agency bonds and notes are valued at the closing price reported in the active market in which the individual security is Ee om mil coed ond ont Spe ot he traded. Corporate bonds and notes, asset backed securities and collateralized mortgage obligations are valued at either the yields rere es WF Cpr Sy Aa currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow- approach or rb eof So bs toa or that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not ei ani Povo Pn oe ei sb a be observable such as credit and liquidity risks. Private placements are valued by the custodian using recognized pricing services pen and sources. epic pity pei vei fev, pohlymd rnp is. eine The private equity portfolio is a diversified mix of derivative instruments, growth equity and partnership interests. Derivative ee soteelee a emttogoThoke 3 iotneseosCov 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. "97 22775500..00009977 TabeofComets Table of Contents Abst etm consists primarily ofpaiersip interesit hed ds, ede ondof funds or ater pate fund vehicles. Absolute return consists primarily of partnership interests in hedge funds, hedge fund of funds or other private fund vehicles. Corporat dobt instruments re valuedatthrthe yieldscurrently ailbl on comprsbl securitiesof sues withsila ret Corporate debt instruments are valued at either the yields currently available on comparable securities of issuers with similar credit ning or valued undeardiscounted cash flow approach ht uz cbservble inputs, uchss curt idsof similar ratings or valued under a discounted cash flow- approach that utilizes observable inputs, such as current yields of similar insert, bt includes adjustments for cra sk hat may not b observable such as crit and guid ik ings. instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risk ratings. Others to ecol1e ir vaolfpluan assets include the netof insane reevesfor WG Trading Company. iret Other items to reconcile to fair value of plan assets include the net of insurance receivables for WG Trading Company, interest recivabios, amounts dc for securities sold, amounts payable forscien parchased snd terest payabe receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable. "The blancsofand hinges th ir alu ofthe U.S. pesion plans" and postmen plan eve 3 set fo the periods The balances of and changes in the fair values of the U.S. pension plans' and postretirement plans' level 3 assets for the periods endedDecember 31,2016 and2015were not material ended December 31, 2016 and 2015 were not material. InternationaPensionPlansAsscts International Pension Plans Assets Outside he U.S, pension lan ass ae tically managed by decntrlived dcr commie. The disclosure blowofasset Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below-of asset Caegorie i recat in sggret for over 70 defined bench plans in 26 counties. however, thre significant vaio in set categories is presented in aggregate for over 70 defined benefit plans in 26 countries; however, there is significant variation in asset locaton pol from counry to county. Loclrglations, lcs nding ules and local nancial an a considerations arc part allocation policy from country to country. Local regulations, local funding rules, and local financial and tax considerations are part ofthe funding nd investment slatprocessin sac sour. The Company provides standard funding adinvestment dance of the funding and investment allocation process in each country. The Company provides standard funding and investment guidance oll intemtional plans with mors fused gukdncfoe he harger pans. to all international plans with more focused guidance to the larger plans. Each plan ha is own stg set allocation. The aset locations as reviewed pridiclly and sbalancd when meses. Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when necessary. o% 98 22775500..00009988 sie of Cont Table of Contents "Th ie alsofthe aes held by the The fair values of the assets held by the Quins (Millions) Mele Asset Class Equities cite Growth equities Vieeatie Value equities Crt Core equities Faia st tl Equities, valued at net asset value* jETotalEquities Fixed Income Timo grmmat Domestic government RrForeign government Corporate debt securities Fitmom sein, lodset et Fixed income securities, valued at net asset fen Total Fixed Income aca Private Equity ReidReal estate Kol,aed tnt a Real estate, valued at net asset value* Partnership investments* Toa Total Private Equity Absolute Return Depa Derivatives a Insurance national international lovalue* pion plans by se caasr as lows: pension plans by asset class are as follows: Fe VtMesUnugparsCoentasezs Fae Vlaen Fair Value Measurements Using Inputs Considered as Er -- er ---- rE -- Level 1 Level 2 Level 3 TER WE TW me We WE We WE 2016 2015 2016 2015 2016 2015 Fair Value at Dec. 3L 2016 2015 Sms sm oss sos swoon $ 605 $ 718 $ 214 $ 195 $ -- $ $ 819 $ 913 giEcRIRIC Www 575 494 28 27 -- 603 521 TNS dew 55 31 583 671 4 4 642 706 FE 16 17 SEE TOE TE Te tI i me i $ L235 $ 1,243 $ 825 $ 893 $ 4 $ 4 $ 2~080 $ 2,157 Samos smos us 3s 4s wos a $ 340 $ 283 $ 202 $ 346 $ 3 $ 4 $ 545 $ 633 wm mR 142 353 206 -- 495 206 51 TX TO fm TOE SE Te m mesm Ime $ 533 30 $ 313 888 $ L443 661 $ 1,213 9 $ 12 10 $ 14 948 641 $ 2~629 701 770 $ 2,310 Ss Hs 1s es ssa as ows ow $ 29 $ fm wo we Fr $ 29 $ 1 $ 62 $ 1 $ 62 $ 5$ 3$ 4$ 94 $ 10 34 126 63 24 5 $ 3 $ 4 $ 191 $ 160 Ses @s --s sso s_s @s gp $ (4) $ = FIT -- (2) $ -- $ -- 15 $- $ $ (4) $ 13 455 456 455 456 Other -- -- 4 6 3 6 7 Hodesfie" Other, valued at net asset value* Hedge funds* fyi fro wrise ol Total Absolute Return ConEip a Cash and Cash Equivalents Cetincts sms msws-- so swam Cash and cash equivalents CR ShSalt, ledottlt I Cash and cash equivalents, valued at net asset value* Total Cash and Cash Equivalents Tool Sor Tr ime ST SSE ime SSer Total Otomo sel oi abetpln mac 25 OF Other items to reconcile to fair value of plan assets Faveof on Te Fair value of plan assets Wm -- 1 174 119 $ (4) $ (2) $ -- $ 19 $ 461 $ 459 $ 631 $ 596 $ 99 $ 99 $ L892 $ 126 $ 126 $ 1,681 $ 18 $ 18 $ 2~348 $ 347 $ 347 $ 2,477 $ -- $ -$ 480 $ $ $ 481 $ 117 4 $ 121 $ 5~652 $ (35) $ 5,617 $ 473 1 $ 474 $ 5,697 $ (28) $ 5,669 ln accordance wilh ASC 820-1, certain investmtehnttrse measuread fi luvitnhe ntasst lus prshaorr is *In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value per share (or its ivaarancial xp ave no bec i th i vale irr. The NAV baseodn the ie valofuhee equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the ndeyinsatsnnd bythe nd, ows ts ail then videdby he numobfeitrs ctstading a is dtcined by the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investmentmanocustodian of he find. Th ir valu mounts preted tis ableas nndod 10 permit rconeliion of investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of he i la Herre 0 he amount presale th fi vl ofpl vce. the fair value hierarchy to the amounts presented in the fair value of plan assets. Equities consist primaryof mandatcs in public equity suites managed 1 various public out indice. Public traded ites Equities consist primarily of mandates in public equity securities managed to various public equity indices. Publicly traded equities ar validattheclosing pric reported the ctivemake in hich he individu curtis ae ded are valued at the closing price reported in the active market in which the individual securities are traded. ied Income insets include domestic and rig goverment, adsoporte, icing morgas backed ad ter db Fixed Income investments include domestic and foreign government, and corporate, (including mortgage backed and other debt) ceri. Goverment, corporate boannd tdes sand morgage backed suaervaluied he coi pie reported fdd securities. Governments, corporate bonds and notes and mortgage backed securities are valued at the closing price reported if traded an 0 sete market acd curently avaoiclombparlabele scuoifitees i mr rch rionrvgls wera on an active market or at yields currently available on comparable securities of issuers with similar credit ratings or valued under a coun coh flow approach hat lesabrvabl ints, schss cticoof slr ramon, bot nodes discounted cash flow- approach that utilizes observable inputs, such as current yields of similar instruments, but includes dutmentsforcrank that may no be cbsrvable ssscrh edit nd iy Toke. adjustments for certain risks that may not be observable such as credit and liquidity risks. Private cquity finds conofspairsest interests in varyoffinds Resestateconsists ofproery fds nd RENTS (Rest Private equity funds consist of partnership interests in a variety of funds. Real estate consists of property funds and REITS (Real Este InvestmentTrusts), REITarS valoda the sosing pric reported ntheactive market n whic i rded Estate Investment Trusts). REITS are valued at the closing price reported in the active market in which it is traded. Absolute tum consofiprisvatte princi tcrss in hed fds issn conc, drivin scat, edge fond of Absolute return consists of private partnership interests in hedge funds, insurance contracts, derivative instruments, hedge fund of finds and oe slcmativ invests. srcconsists of sane contacts, which re valued wig funds, and other alternative investments. Insurance consists of insurance contracts, which are valued using 99 22775500..00009999 TabeofCones Table of Contents cash surrender values which theamount the pla wuld reiifthe contacwascashed outaear ed. Deva instruments cash surrender values which is the amount the plan would receive if the contract was cashed out at year end. Derivative instruments Consist fers rte swaps that are usd 0hep mage sks. consist of interest rate swaps that are used to help manage risks. Othrtio tecomnisl to ir vaolfpluan assets nce thent ofterest reccivables, outs du for suri sold, amounts Other items to reconcile to fair value of plan assets include the net of interest receivables, amounts due for securities sold, amounts payable for secures purchased and ners poyable payable for securities purchased and interest payable. "cTThoheenbbtarllaanuacncedtsnosofcfatahnsneddbccihhcaalnntggeeessein ttthheafisaeier vaallloaueses.soTofhftethhaee gitneatemrrnaaeitoiogofnntnaleletppeepnnosrsiicoohnnesppllaannassn"'dlleenvvteellu33naraasssleistzseccdoognnissiinssst ppirrniicmmraaerariislleyydooiffsninsbusarnancecee by S contracts under amnidll$o3n6amnidl1lon million and $16 the absolute return asset class. The aggregate of minil2l0o1n6sinnd20201165s,ndre2s0pe1c5t,ivreelsypectively Foreign million in 2016 and 2015, respectively. Foreign currency exchange impacts deceased net purchases and net unrealized gains currency exchange impacts decreased this blancs by 9 ilo increased this balance by this balance by $9 million $8 and $36 million in 2016 and 2015, respectively. NOTE 12. Derivatives NOTE 12. Derivatives s"TcTnhhceerCCloolmmypspaoancnyiyaustseeessdinnwetietrrhessft rrratetseisswweoaxppcssh,,acrnugererenrnacetye srswweaaspps,t, ccaootmmemmosdondidtictyyomppmriioccdseisstwyaappprss,iacnndNduffcoourrwawaiarroddnaa.nnTddhooeppttfiiooonrnmccaotonitronanctthstrttoo mfmoaalnnlaoagwgse sksrisks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows xinpshiriumnentthseavraeraicocsoupntsed offord, aendrhiowvsaaunctdhiFnosvatnecricsaaltisnsirmupmaecntts3wMindabnyci3Ma,lhpoowstiaonnd awnhdy p3eMrfoarcmsanscuech instruments, how explains the various types of derivatives and financial instruments used by 3M, how-and why 3M uses such instruments, how- such such instruments are accounted for, and how- such instruments impact 3M's financial position and performance. AAindsdoriutimonennatlsiininffonorcmmlaauttidiooennd wwiniitNhhorretesseppeeccAttdt1dotitthhoenaiimlmppafacoctrtssmaootnnifoohtnheweirstcohommprrepsrepehehceetnntssiivhve iinicronmaeloaoceff noonofodndederermvriiavvatatietiivvveee ihheenddggsiinntggraannuddimsddneeerlriinavvaadttteiivsvdee inNote instruments is included in Note 6. Additional information with respect to the fair value of derivative instruments is included in Note a15l.oRmeafedreenicneNsootnef1o0.rmation rganding derivatives andorhedging instruments assisted with the Company" ong fem debt are 13. References to information regarding derivatives and/or hedging instruments associated with the Company's long-term debt are also made in Note 10. Typesof Derivatives Hedging siau ndInclm usion in IncomeOtherComprehenIsnicovme: Types ofDerivatives/Hedging Instruments and Inclusion in Income/Other Comprehensive Income: Cotlon des: Cash Flow- Hedges: FdFoeorrridvdeaertriiivvvaeattiiivveereiipnonsrttrseutdmraenutasmchteohamantptatoarnrseenddteessoiifggnnoaatttheeded aacnnoddmpqqrueahlueifnysaiiavsecataissnhhc offlmolewow-aHhdeeddgrgeeescs,l,a stthshieefieseffdfeeicittivoveecappmoorirttniigoosnnoioffththheeegsgaaiainn ohsson the oprerloiossd odnurtihneg derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period during c`ohmipcohnthothseedxgeuddredafsoamnthelfasstesscmaennintgosf.fGfaientsinvdenleorsserse.cothgdneizsevdaitnicvuerreeprceasmeinntgisn.g thr hedge nllcivness or hedge 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. oCCpaatssihhonFFcllooonwwtrHHacetdcsgoiinghe--dFFgooerreeaiiggganninCrsuetrhnreecni ecy FFoorfwoet axrcdhraaannngddeOwOpeptttiieaoonnlCuCorconntutarncdattcstis::oTTnhhceeaCCshoommfplpaoawnnsyydteennetoremrsisnnianttooedffooirrneeifigognrneeeixxgncchhcaaunnmggeneecffiocosrrw.waaTrrhddeassnnedd option contracts to hedge against the effect of exchange rate fluctuations on cash flow-s denominated in foreign currencies. These rraonmsascctciuomanlrseiedd eothse cioam5gpcreanhsehnlsiovwehiedsncscT1hsocamtmienegs)monrteheexptenernisoitddonuorfinhgewshidceribveatbivoedsgweidll asnslactonsreacllsitliccaatniionngs. 3M transactions are designated as cash flow- hedges. The settlement or extension of these derivatives will result in reclassifications may dedesgnat theo cash lo hg elatioship in advan of th osurtene fthe vested (from accumulated other comprehensive income) to earnings in the period during which the hedged transaction. The orion of transactions affect earnings. 3M smgraieaiynnmsdaoreirdoienlnosssiaegscenscsautooemnnutlhtthahetesdeeeddcerartisvvhhaartfiilovceweo-iinhmnsesptdtrrgruaememrheeenneltatntppiorrieennvvsicihoooiuupmsssellyyiunaaaiccdccvuutammhnueuclfleaaottoerefddetchinaeteoodtchecreuarrcnrcoeaomncmpcirepoeroehnfheoetnhcnscesiuirvfvsoee.reiiCcnnahccsoaotmnemgdeeeftsfrooarirndsdaetechddteeeiossvniiag.glnnTeathoteeefddpdhhoeeerrdtdiiggvoaeentssiovfe sriineencmsttsraiuioenmnrsebtinentslsaocia.cfetuerBmregdduieelanddtneeeisdviniggogntinahntteirtoonnceoaasmrreepcrrroeenehcdcoeoqnrddseeivuddeiininanocecfaao2rrnm0ni1iennt4gug,sntn3ailnMddthbeaaerrfegoainrnnecccealaxudsidtceeeddddintiirnganhthtseehaceDDteimeorrniiavvoaamtcticivvuaeersss.NNeCnoogthtaDDnegoeessfisigtgininnamtteeehddeovavassaelHHuweeehddioggcfiihndngegitriIIhvnnaessttdrirvuugemmeeetnsnsttss section below-. Beginning in the second quarter of 2014, 3M began extending the maximum length of time over which it hedges its e2xpmoosnutrhstoithtehvcarriaobinlictuyrtnenfciots bsisnhgfelxotwesnodfetdhfe hfoerecoast3e6dmrosnmtsahcstistoanrstifngoimn thperefvtiougsufsetmooff21021m5onth0.s4 oage em of exposure to the variability in future cash flow-s of the forecasted transactions from a previous term of 12 months to a longer term of 24 months, with certain currencies being extended further to 36 months starting in the first quarter of 2015. cCCoaanssthhacFFtllsoo,wwprHHiecededggpirinnogtge-c- tCCiooomnmmamogdoirdtietyyePPmrreiicncaeetnMsMdaacnnoaagmgememomedneitnt:ty: rTTihhceeeCCsoowmmapppsaa.nnyy3Mmmaadnniaasgcgeoesnstccioonmumemmdoodthdieittuyysppeoriifccceorrmiissmkkossdthhiortouyuggphhrinnceeeggsoatwitaateepddasspucppalpshlyy cflTloooonwwwtr-ahhhceetddsegg,eepssrdooiocffefffgfooporrrreoeeecctceaaacsssttsttieeoedddn cccaooogmmmremmmeoomddoiidettintyytys rttarnanrdnsascaasoccamtitcominiosoodiinn0intytmhhapeerniffacirergssettsqwqpuuaipaacrsit.ev3rooMolffad22ii00ys11c.55o.nTTtThihnheeueeeCCdloaotmtmhepepdauamnnsayeyrkousfseoecd-dommccaomromkomemdtiotmydgiiaptynricpprerroiicscsewe sasspwosawnpassaaucaaascplscahiafsssyhhng flow-hedges of forecasted commodity transactions to manage price volatility. The related mark-to-market gain or loss on qualifying He`wdhgicehstwheasheidngceluddteodnsatcihoen cfolmepcrteehdecnasmiivnegsi.ncomefoe extent fective, and eased oto cosofse i theperiodduring hedges was included in other comprehensive income to the extent effective, and reclassified into cost of sales in the period during which the hedged transaction affected earnings. 100 100 22775500..00110000 Teo Conn Table of Contents CahFlo Hedging nes Roe Contac: nth in snd fourth arotf20s14, the Compan cred foord staring Cash Flow Hedging Interest Rate Contracts: In the third and fourth quarters of 2014, the Company entered into forward starting terete Swap ith tos caste ig 500 lho Eosas ode So Wet olay aiid wih interest rate swaps with notional amounts totaling 500 million Euros as a hedge against interest rate volatility associated with the oresasd sano ofivedraedot SM femmingted the erste Svape pom suns of50 mili Euros greet forecasted issuance of fixed rate debt. 3M terminated these interest rate swaps upon issuance of 750 million Euros aggregate princi moatof tele eu Ted ic mes in connection wth + 1250 illo Each offing in November 201. The principal amount of twelve-year fixed rate notes in connection with 3M's 1.250 billion Eurobond offering in November 2014. The {ermine nan S8 mil prox e53 milion atl.) los ihn accucmbuslomaprtshcenidve incom hat will be termination resulted in an $8 million pre-tax ($5 million after-tax) loss within accumulated other comprehensive income that will be meriaad vethe tei en Ho he mt amortized over the twelve-year life of the notes. Inthe fis six coof2h01, the Company cord if ora staring te sas hat ive n Dicrber 2016 with In the first six months of 2016, the Company entered into forward starting interest rate swaps that expired in December 2016 with nage noon amount S30 lio 2.2 hg gant rt volaY ssotaod wth rete ivance of an aggregate notional amount of $300 million as a hedge against interest rate volatility associated with a forecasted issuance of cd rte eb, Upon saneofmone ses Sepembes 2016, 3 rmsd hse irs te saps. The eminion fixed rate debt. Upon issuance of medium-term notes in September 2016, 3M terminated these interest rate swaps. The termination elon nmi lows within scmalted rher comprehen income fat ils amid ovr hs Fespsins neeof resulted in an immaterial loss within accumulated other comprehensive income that will be amortized over the respective lives of head the debt. In the fourth quatro201, the Company cred nto forward aig erst ste saps vith ons antof S20 mill In the fourth quarter of 2016, the Company entered into forward starting interest rate swaps with a notional amount of $200 million a5 Podge gat nett vol ascot wil Frseeod ane fede det. as a hedge against interest rate volatility associated with a forecasted issuance of fixed rate debt. "he smoritio of gins andosscn fora sarin crest swags included i the wbls low a ako he gins) The amortization of gains and losses on forward starting interest rate swaps is included in the tables below-as part of the gain/(loss) cog ens aa he llc portion of dias a ew fect rom sesumtearlcomaprtheeninde recognized in income on the effective portion of derivatives as a result of reclassification from accumulated other comprehensive income. Asof December 31 01, theCompany bad bln of S91 milion aso ith the lr x et nel gsi asocsed As of December 31, 2016, the Company had a balance of $91 million associated with the after tax net unrealized gain associated "itch flow edging nme recorded scmalted her comprehen income. Tis ches msiblnofS6 with cash flow-hedging instruments recorded in accumulated other comprehensive income. This includes a remaining balance of $6 iin (ir 0 od o forward staring crest rte swap, which ilbo smo ovr hs spective inof ho oes. million (after tax loss) related to forward starting interest rate swaps, which will be amortized over the respective lives of the notes. Basan xchangerats af December 3, 206, 3M expects olay appt S57 milion of he a. nt Based on exchange rates as of December 31, 2016, 3M expects to reclassify approximately $57 million of the after-tax net unre fog exchange cash Tow hedging g0an miga in 201, approximately$2 million ofthea ct nrsized unrealized foreign exchange cash flow- hedging gains to earnings in 2017, approximately $26 million of the after-tax net unrealized feign exchange coh Tow hedging gin fo cumin in 201, and pprvamatly 5 ml ofte alle et ersized feign foreign exchange cash flow- hedging gains to earnings in 2018, and approximately $8 million of the after-tax net unrealized foreign exchange ac flow din gnfo cing fe 308 ih the impct fb cigs rom nding hedged Hem. exchange cash flow- hedging gains to earnings after 2018 (with the impact offset by earnings/losses from underlying hedged items). hoon i te comeldtd tment of nome ad sempre come ad smnof sin nd oss etd The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to doiventdesignated sca low hedges are povided n he loving le. Reasicationsof sont fom derivative instruments designated as cash flow- hedges are provided in the following table. Reclassifications of amounts from Scoumultd bempsbemie somein incom inode ecmlt ns (we)on dedesgnt hedge st ho me: accumulated other comprehensive income into income include accumulated gains (losses) on dedesignated hedges at the time Comings sr paced by hs forscaed remcion earnings are impacted by the forecasted transaction. Year Ended December 31,2016 Year Ended December 31, 2016 icon st Derivatives in Cash Flow Hedging Relationships EE Pretax Gain (Loss) Recognized in Other REE Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of TREE Ineffective Portion of Gain (Loss) on Derivative and rN Comprehensive Income on Effective Portion of Derivative Reclassification from Accumulated Other Comprehensive Income Amount Excluded from Effectiveness Testing Recognized in Income TEEd---- (Millions) Foreign~ cun-ency forward/option conhacts Interest rate swap contracts Total Year Ended December 31,2015 Year Ended December 31, 2015 T==PER Amount Location $ 58 Cost of sales (1) Interest expense $ 57 -- = Amount $ 110 (1) $ 109 Location Cost of sales Interest expense Amount = $ $ ttt iti nt Derivatives in Cash Flow Hedging Relationships c Ie -- (Millions) Foreign~ cun-ency ~brward/opt~on conhacts Commodity price swap contracts Interest rate swap contracts we Pretax Gain (Loss) Recognized in Other RE Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of TE Ineffective Portion of Gain (Loss) on Derivative and SERA Comprehensive Income on Effective Portion of Derivative oom Reclassification from Accumulated Other Comprehensive Income lami Amount Excluded from Effectiveness Testing Recognized in Income " o TER T mmT am y v= Amount Location Amount Location Amount $ 212 Cost of sales $ 178 Cost of sales $ Cost of sales (2) Cost of sales Interest expense (2) Interest expense Total $ 212 $ 174 $ 0101 22775500..00110011 Liteon Table of Contents Sor idDesmb1.e3r04 Year Ended December 31, 2014 sggsm---- Derivatives in Cash Flow Hedging Relationships (Millions) ne5n pn Foreign ctm-ency forward/option Commochty price swap contracts Interest rate swap contracts ar contracts Er Pretax Gain (Loss) ll Recognized in Other Comprehensive rh Income on Effective Pretax Gain (Loss) Recognized in Income on Effective Portion of i Derivative as a Result of Reclassification from Accumulated Other Ineffective Portion of Gain is (Loss) on Derivative and Amount Excluded from Effectiveness Tes~iing Portion of Derivative Comprehensive Income Reco~lized in Income J3)Ce owd e T ;T ie t T =r>s Amount Location Amount Location Amount $ 183 Cost of sales $ 3 Cost of sales $ (4) Cost of sales (8) Interest expense 2 Cost of sales (1) Interest expense Total $ 171 $ 4 $ Esti: Fair Value Hedges: Voda ets ot died ds i ee pist2 s For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivatives as well as the oo i ied ae pd lp en offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. FH rstSop: he Cony mgs ss ge ing fs dd og ie To Fair Value Hedging - Interest Rate Swaps: The Company manages interest expense using a mix of fixed and floating rate debt. To a help manage borrowing costs, the Company may enter into interest rate swaps. Under these arrangements, the Company agrees to frien ne A lr Ti exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreedet, To oat on ot besmit ean a vp upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and pr: is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense. These fair value hedges rt: are highly effective and, thus, there is no impact on earnings due to hedge ineffectiveness. Ie. 207 nmi itr ee Br to ln En, he Comey In July 2007, in connection with the issuance of a seven-year Eurobond for an amount of 750 million Euros, the Company eatey to oot met hoo or completed a fixed-to-floating interest rate swap on a notional amount of 400 million Euros as a fair value hedge of a portion of the cmt Fandom KT 13 on Fro sid sm fixed interest rate Eurobond obligation. In August 2010, the Company terminated 150 million Euros of the notional amount of this ep haat il 13m rn, drofaso BA 0 ws andl swap. As a result, a gain of 18 million Euros, recorded as part of the balance of the underlying debt, was amortized as an offset to a te ig 1 oe a abe pono cro Bm interest expense over this debt's remaining life. Prior to termination of the applicable portion of the interest rate swap, the mark-totoe market of the hedge instrument was recorded as gains or losses in interest expense and was offset by the gain or loss on carrying ear on tomy er rh 3 aon pe value of the underlying debt instrument. Consequently, the subsequent amortization of the 18 million Euros recorded as part of the i So ne a ot tof ho ld a gd ee rb Th a ot 9 underlying debt balance was not part of gains on hedged items recognized in income in the tables below-. The remaining interest rate from einbme e swap of 250 million Euros (notional amount) matured in July 2014. Nove2013, sd Enddo 121 fir smo 30 ion Ets. Up sn snp In November 2013, 3M issued a Eurobond due in 2021 for a face amount of 600 million Euros. Upon debt issuance, 3M completed Foeimra Ertope ape sobr4 len Poo xogof ee n 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. In2014, wd 550 ill spc iil amtof mmc ces. Uns, Company ns In June 2014, 3M issued $950 million aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered Ta 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 eet te SE do ot ef edn fb oc res oe lnm floating three-month LIBOR index as a fair value hedge of a portion of the fixed interest rate medium-term note obligation. Em In August 2015, 3M issued $1.500 billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company et toe oe oto oe es oe entered into two interest rate swaps as fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first tn ot dd ret 0 ns ood converted a $450 million three-year fixed rate note, and the second converted $300 million of a five-year fixed rate note included in ev a ond ons tog ee c ma HR this issuance to an interest rate based on a floating three-month LIBOR index. w102 22775500..00110022 TabeofComets Table of Contents a"TThhsee ioloccavatatiliouoenn hiinendttghheeesccaoonnnsdseolsliiidmdiaalttaeerdd issntfatoteermmnaettnistosnoorffeliinantccioovmemeeoaatnnhdd s ahmodogueondtseoofmfwgsgaaiainrnsn esaaansnddfollloolssossweesss: elated related to to derivative derivative instruments instruments designated designated as fair value hedges and similar information relative to the hedged items are as follows: Year Ended Decamber 31,2016. Year Ended December 31, 2016 Derivative Fie Va edgingRetort Derivatives in Fair Value Hedging Relationships iam (Millions) erty Interest rate swap contracts TorTotal Gain (omanDei Gain (Loss) on Derivative Reonet in come Recognized in Income Te ya Location Amount TE Interest expense $ (2) a $ (2) Gin Lon an Hd ew Gain (Loss) on Hedged Item Reesi ame Recognized in Income Ta iy Location Amount Ta Et Interest expense $ -- $ Year Ended December 31,2015 Year Ended December 31, 2015 Derivative Fie Val HedgingRetr Derivatives in Fair Value Hedging Relationships Nit(Millions) Tater Interest rate swap contracts TrTotal Gain (nanDea Gain (Loss) on Derivative Chbmeiieme Recognized in Income To Sar Location Amount Tea T Interest expense $ (2) T 2 $ (2) Gin La n Hdd em Gain (Loss) on Hedged Item hime Recognized in Income Toi So Location Amount Teen z Interest expense $ i z $ Year Ended December 31,2014. Year Ended December 31, 2014 Duvatosin Flr Vale HedgogResthrsips Derivatives in Fair Value Hedging Relationships Nia (Millions) rcv Interest rate swap contracts TorTotal Gin (owen Deivaive Gain (Loss) on Derivative oe nme Recognized in Income Toa Rr Location Amount Tsim Interest expense $ 11 $ 11 Gain Lo Hdd em Gain (Loss) on Hedged Item mm. Recognized in Income Te rm Location Amount Tear T Interest expense $ (ii) 3$ (ii) NetIssnlists. Net Investment Hedges: "TiTnhhseeirCCuoommemnpptasanntyyo mhmoaydygeuusspennonnre-deorrfiitvhateiCvooe(m(fpfoonarrneiiygg'nnsccuianrvrreeenscmnyenddteennioommifinonraaettieegddn ddseeubbbt))saianndddidaedrreiirnvieavdtsaitvimevae(n(rfgoesreifgonrieegxxncchheaaxnncggheeafnfogorerwvraaircrd.d ccFooonnrttraaccttss)) iiirnnnesssittrrreuuummmmeeennnnttttssss,tthohatathhtesadrrngeeeetddgepeassoiiirgngtsinnoaanttseedldoofassntsdhdeesqcCtuuioallbmifluypiaaaanslyhh'eseeddi1nggveceeshssaootnmffgnneeeensttt in foreign subsidiaries iinpcomtexncthsainngeforleeigsn investments in foreign aoaorpnpeederrramaettcaiiooonrnnadssgeedaannfiddonrttcehhuiaagmttnusmleaexttecithvteathhnreegsaeeinffrflieesacckttt.iovvFneeonnrweeisstsshin `troethhqeurCrircceoommampoerfnpetrmshse,emhnteuhsinneistvinvesenetpiirgnenagcvcioinoommsueseos..lryTTlohhsreeseercrseoermmadataetiridninbddiuneetrracobuofmlfetutlhhtaoeetcichhvhiaeannnrgggeeaestininivvosaaplnlouuteeeooxfmfcsshicuatcnhhgeeisncrsaitttrreucsrmuameurnsettmsraeiincesocfrreeendcsceootdrsrdudiescnedhdcsuiisnnmcceuooalmmranitpinivngeegsts.t.raoRRnessecluaobtcgisotnnaointitwoninaitlhliiniynn earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially sCogmpnlaettediqnouidiadoendoefstgensettedinrvoesmtmnentt iinhcesihmeendtgeheTdrgeeerneloopearsatiipo.n. chTaonhgeeseixnteantlefroifgsntcuprorretnicoyndofenfomoicnaitecdodrebntyi not complete liquidation of the net investment in the hedged foreign operation. To the extent foreign currency denominated debt is not ddeensiogmniantaetdeidndoerbtisdduedeesxigcnhaatendgferormtecahnaetnginevsesatmreenct oheddegde in camings rough his maturity dre. 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. 3SvaMMrys'sbuuyssetoiofmfeffporerreeiigonnd edexxeccphheaannnggdeeioofnonngrwwawarhrdednccoofnnottrrreaaiccgttnss cddeeussriiggennsaatteddeeinnhoheemddiggeenssaootfdftetbhhdebCCaolomamnpcpaeansnydy'e'ssgnenetattiienndvveessittmmseeunnctthinlafootrrieiioggnnnssshuuibsbsprisdseiiardieiscecoasnn vary by time period depending on when foreign currency denominated debt balances designated in such relationships are Cdoemdpeasngyn'astedde,simraedtuforroeeigadnr.exncehwalnyges risk coao nnedrdaegseid gnated. Addiooly, varaion cn occuirn comcton with he eventofthe 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. aAAtptpDDeeeocsceiemmmbabetrle33r111,,502200m11i6,ll,itthohnetEurtosoottaall nnaoonitidoonnaaalpl aapmmooouiunntnt ootff fo2or4rse%iigginnoeexxncchhSaaonnuggteehffoKororwwraeararddn coWononrnt,araclcttassnddgeeswsiiiggtnnhaatteeddpriiinnncnisepttaliinnavsesstmtnmeenoonttfhougeddedgnsemstww.aass approximately 150 million Euros and approximately 248 billion South Korean Won, along with a principal conbdternisvrautmievntnssdrecsingntasteddeisingnneatiednincnetimeedsgemsaoledignes4.r4anbgiellifornomEu2r0o1.7Ttoh2e03ma1turity dateofthese debt instruments designated in net investment hedges totaling 4.4 billion Euros. The maturity dates of these deat amount of derivative andlong-term and nonderivative instruments designated in net investment hedges range from 2017 to 2031. "TrThheevllooccaattiiaoonnndiinnnttohhneedctcoionvnsasotoliliinddsaattieenddstssrtauttmeeemntensnttdseossofifgiinnnacctoeomdmaeesaannnddtccioonmmvpeprsretehmheeennntssiihvveeedgiinencscoormmseeaaannddflaaommwoosu.unntTsthoosfrfeggwiaeninsrs aannnoddlelooslsesaesssfrrceellaaiiteeoddnt0soofthe derivative and nonderivative instruments designated as net investment hedges are as follows. There were no reclassifications of the lhfetaivle boerloiwo.nofact intent edges autofaecutmheucolmpraehetnsidve incntoocomme for the periods pressed i effective portion of net investment hedges out of accumulated other comprehensive income into income for the periods presented in the table below-. 103 103 22775500..00110033 TabeofComets Table of Contents Year ended December 31,2016 Year ended December 31, 2016 Derivative and Nonderivative Instruments in Net Investment Hedging Remi Relationships ome" (Millions) Foreign caren devormmiebd Foreign currency denominated debt Foreign curency forwardcontacts Foreign currency forward contracts "ToulTotal Pras Gano) Pretax Gain (Loss) Revie a. Recognized as Comat Tramiion Cumulative Translation Nokia Or nclctive Portion Gin Ls00 within Other Compeehmne Tome Tntrument nd Ame Ecaied Comprehensive Income on Effective Portion of neuen Sma Instrument ee ow he Amount 5 WA 5 $ 215 ) Costorses (9) g ET s $ 206 Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income Location Amount N/A Cost of sales (3) $ (3) Year ended December 31,2015 Year ended December 31, 2015 gn drs rm Nim Derivative and Nonderivative Instruments in Net Investment Hedging Relationships ion) (Millions) Foreign caren dvormmiebdr Foreign currency denominated debt Foreign cure forwardcontacts Foreign currency forward contracts Toul Total Pra Gin os) Pretax Gain (Loss) Remi Recognized as Comin Teumbton Cumulative Translation i within Other Comprehensive Income RR on Effective Portion of Instrument lm Amount 5 = $ 63 13143 T 2% $ 206 ive Pt fain Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded Fo tac Fi from Effectiveness Testing Recognized in Income meen Location Amount WA 5 N/A $ Costof ses u Cost of sales 11 T im $ 11 Year ended December 31,2014 Year ended December 31, 2014 Derivative Derivative and and Nondervaive Nonderivative IInnsttruemoemnetsniisnn NNeett IInvveessttmmeenntt HHeeddggiinngg. Resin Relationships ion) (Millions) Foreign caren dmommieobdr Foreign currency denominated debt Foreign cures forwardcontacts Foreign currency forward contracts Toul Total Prt Gin Pretax Gain (Loss) Recognized as Coma oa Cumulative Translation i IiePraGain within Other Comprehensive Income on FieveParton of rom EifctivencnsTeng on Effective Portion of men cool ncsme Instrument mas ry "Soar Amount 5 WA 5 = $ 152 94 Costofsles L 94 s IY T T $ 246 Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income Location Amount N/A $ Cost of sales 1 $ 1 `DetteNotDesignated Derivatives Not DesignatedaasHHededggiinngg Instn. Instruments: DDfoeemrsievinavttiavtewsevnrneoeosttdeddseegsiagssntaiotdegdiannasscahahesethddggefiilnndoggw iihnnesstdrtgurmiumneenenttslsiinntccilluuoddneesddieeupddeesssieiggfnnartteeeddnffdoorreeiiniggtnnheccCuurraresennhecyFylffooowrrwwHaaerrdddgaaennsddseoocpptttiiiooonnn scchooonntrtreraa)ccttIssnthhaaattin formerly were designated in cash flow- hedging relationships (as referenced in the Cash Flow- Hedges section above). In addition, s3oMcicaatteerds iwinhrienitegrncocmupraennyeyesfsoriwnagrad rsoanfgeamtesnots)oalned cienrpsat,nothecopmamcotdsitoyf cpreicrenseweo1amfppassnty iatpairtv, eM(uiacriinncosts 3M enters into foreign currency forward contracts to offset, in part, the impacts of certain intercompany activities (primarily aaarsessslssaoootccciiiioaaantttseeehdddipwwwsi:iittthhhthtiehhnreeteefvurocsoroeemfofpfiracneayartahlniinciecgcnaoosimimnnmgmsodoanirdrtdiaitineelgssoesaamensdednopptnsrr)eetccahiineoodsuusseGnmmteaeetrttasalleis.n.stToThaheceorssmeeemsddeoeorrrdiidvivteayadtipvi reicciienanmsssittwrnrugaumspm.seennttotTsshoeaafrrfCessoenntmo,opttinaddneepsysaiirggtd,nnoaafclttuseecddotuitinanthhhioeednddsggiioinnnrggscosscts dreelravtiaotnisvheipBsr; athnecraefoirnes,trfauimrevntaslufoe gatirnasdianngdpulorspsoesseosn these contracts are recorded in earnings. The Company does not hold or issue derivative financial instruments for trading purposes. "TtThhheeeyCCeoaormmpepadannydy rrDeeevvciisseeemddbaaemmroo3uu1n,ntt2ss0pp1rr5evvriieooluuistlvyyepporreessfeeonnrtteeegddniincnuttrhhteeentaacbbyllefboberelwlooawrd- ffcooormrrtthahceetggsa.iinnTl(ilososssis)m)mooanntdedereriraiilvvaactotivneeessctrriecoconoggdaneiiczrzeeddasinediinnhcceoommee orfor tpDphrreeeecvvyeiieoomauubsrselleryyndp3p1err,deess2Dee0nn1et3tcee.eddmTaahbmmieosoruru3nen1tvt,ioos2fif0ot1hnh5eehraloeodslsasntiorvreeeiccomtoogpgnnfaoiiczzrteeediodgnitnh ciiCunnorccromeomnpmcaeeynninyfto'thrhsweecaoddrnidissscoccllolooinssdtuuraarrteecettasda.bbrlTleeehbsibesesllioomowfmo-pbabetyyerrS$ai11atl11i22coonmmr,rieilnclaitoninoncniffoaodrrlecttchhroeeenadyysieeetaadirrotnehe,nneoddreecddash Bows December 31, 2015. This revision had no impact on the Company's consolidated results of operations, financial condition, or cash flOWS. "dTTehhseeigllonoacctaatetiidoonansiinnthhe etcdhogeincnsogonmslosiliiddmtaeteenddtssstaateetmasenetlsooowffnisinn:cctoommeeasanndd smouof gaentsasnd amounts of gains and losses losses elated related to to deriva derivative instruments instruments not not designated as hedging instruments are as follows: 104 104 22775500..00110044 sls of Contents. Table of Contents info o Dain Botts cms, Gain (Loss) on Derivative Recognized in Income Year ended Year ended Year ended Derivatives Not Designated as Hedging Instruments Cis (Millions) Torin cen Toward opionsone Foreign currency forward/option contracts Foreign cen forward conacts Foreign currency forward contracts Commodi piesapcontacts Commodity price swap contracts ToulTotal yore Location Total Cost of sales nkrs expense Interest expense Conof nies Cost of sales December 31, 2016 To --a --i-- Amount TDF 3 T mn $ (]4) 5 an 9 Te=r w o im= S (5) December 31, 2015 Amount $ 5 82 (3) S 84 December 31, 2014 Amount $ ]0 (40) S (30) Location adFairVive Amv ofDerivative nsramens: Location andFair Value Amount ofDerivative Instruments. "Th lowing bles summarize tefi vaolf 3u's deivaiveinstant, xchudin noderivaie insirumcots sed a hedging The following tables summarize the fair value of 3M's derivative instruments, excluding nonderivative instruments used as hedging intranets, and thee location the consolidated ble sheet. Notional ams below ae pestae prod end foreign instruments, and their location in the consolidated balance sheet. Notional amounts below- are presented at period end foreign exchange te. xceptforcra fers te Swap. which re preci ing the ception di' org exchange te. exchange rates, except for certain interest rate swaps, which are presented using the inception date's foreign exchange rate. `Addiional information ith eset thefir vousof derivative insrmcns s ncluded in Noe 13 Additional information with respect to the fair value of derivative instruments is included in Note 13. Deter 31206. December 31, 2016 Akins (Millions) Beige Derivatives designated as hedging instruments oessumay ALS Foreign currency forwarcFoption contracts Fon coe foes opiosota Foreign currency forwarcFoption contracts ICr Interest rate swap contracts Total derivatives designated as hedging a. instruments [-- Derivatives not designated as eins hedging instruments iran Foreign currency forward/option contracts Total derivatives not designated as hedging sii instruments Tatas rms Total derivative instruments NNoop Gross Notional Amount SF ii $ 2,160 1,459 1,953 bese vllees t lacs e vould Assets Fair Location Value Amount Liabilities Fair Location Value Amount lS 107 Other current assets $ 107 Ce AR Other assets 86 Gana Bou Other assets 25 sow $ 218 Othercomet iin Other current liabilities retry Other liabilities ments Other current liabilities 9 $ 9 33 i1 r= $ 13 8 4% Obwommina i Obesmbiit 38 $ 5,655 Other current assets $ 41 Other current liabilities $ 82 sw sw $ 41 $ 82 as -- $ 259 $ 95 Nios; December 31, 2015 (Millions) Derivatives designated as hedging instruments aie vdogioa cota Foreign currency forwar~Foption contracts He Cowmpa oto Foreign currency forwarCFoption contracts [eri Interest rate swap contracts Total derivatives designated as hedging ides instruments cant Gross Notional Amount Locuion VouAment Location Assets Fair Value Amount Location Vato Amst Liabilities Fair Location Value Amount S83 Ofcatanch $ 2,815 Other current assets frie 1,240 Other assets I Grr 1,753 Other assets SU Obs mats 1 $ 148 Other current liabilities $ 14 priced 4 61 Other liabilities 3 SO 24 Other liabilities 1 sa su $ 233 $ 18 Derivatives not designated as hedging instruments ee vatopion cots Foreign currency forward/option contracts iddrait deevgnsesd Total derivatives not designated as Megmare hedging instruments a due sem Total derivative instruments 539 Ofrommtans 6 Ofwometibitis $3 $ 5,359 Other current assets $ 63 Other current liabilities $ 51 se Lm $ 63 $ 51 om PE $ 296 $ 69 Crd Rik andOfc ofAss and Libisof DeriveInsiramnts: Credit Risk and Offsetting ofAssets andLiabilities ofDerivative Instruments. "The Company is exposed cit ssn the cv of nonperormanbcye ounce i nce aeswaps <urncy swap. The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity picswape, nd fowardand opi contac. However, the Company risk is edt th ar valafuthee commodity price swaps, and forward and option contracts. However, the Company's risk is limited to the fair value of the insrmens The Companyscively omits 5 xpos credit io hough te vs of credit approvalsand rd mts, ndby instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by stocing jor ntemaions aks sd Foancal uition s coumarin SM cers ne selecting major international banks and financial institutions as counterparties. 3M enters into 10s 105 22775500..00110055 TbieotConte Table of Contents nase ting aragmente vith countepatcs when possible mite cdi in deat ration. A master necting master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arangrncat may allow cach counirpary fo it cle mounts edBe3Mc cityadthcounterparty 8 el of arrangement may allow- each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of mil, separate devaie rmacions. Asof December31 216, 3M has erations Swaps andDeivaives Asotin multiple, separate derivative transactions. As of December 31, 2016, 3M has International Swaps and Derivatives Association (ISDA greats ith 1 pplicble banksand nc nitionswhich cota nting provisions. In aion 0.maser (ISDA) agreements with 16 applicable banks and financial institutions which contain netting provisions. In addition to a master Sect with SM sppored bt primary contrary pret gai, 3M ho has acd crc ppt sgrcets agreement with 3M supported by a primary counterparty's parent guarantee, 3M also has associated credit support agreements in piace wilh 15ofits primarydericomirparin ich, amon ole ing, provide termidenrwheich ihr place with 15 of its primary derivative counterparties which, among other things, provide the circumstances under which either ary reid pot lb colleal (whe he market value of rsscovered by thes recat xcs specifi party is required to post eligible collateral (when the market value of transactions covered by these agreements exceeds specified Thri escohunteorpalrtyd"cresdit ating asbn downgraded 08 predetermined ating). The Compan docs ot atipte thresholds or if a counterparty's credit rating has been downgraded to a predetermined rating). The Company does not anticipate nonpertormance by any of heseccunerpentcs. nonperformance by any of these counterparties. 3Mba octpresent efi vlof dia sss nd lis within te Company's comolidtd lanceshcton 3M has elected to present the fair value of derivative assets and liabilities within the Company's consolidated balance sheet on a roms i cnn hen derivative tntions rs sbi oa ting angen and may olervise qualify for et gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net prescataio. However, the following ables rode fonsfthe Company had ected oft he avet and ily presentation. However, the following tables provide information as if the Company had elected to offset the asset and liability lancesofderivative sumo, etdin accordancewith various rei th vent ofdel o emnation 3s sultedby balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the termosf etn arrangements itheach of the counterparties. Forcach couterfpuneyt., theCompany would fet he the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company would offset the ave andi blanc of drvativeast hecnofthe porting period seon dhe 3 cay ha 3pry 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 rasations. Derivatives no bjt omarnetigrsmens ae not ble or etpresen ion. As of he splicbl dts transactions. Derivatives not subject to master netting agreements are not eligible for net presentation. As of the applicable dates prescated belo, no cashcalla haode rosoilvdeodd ltfo dhese eit sme presented below-, no cash collateral had been received or pledged related to these derivative instruments. Ofctinogf Financial Aves under MasterNeting Agreements ith Derivative Counterparts Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties December -31, 2016 tons (Millions) Soar Derivatives subject to master netting ama = agreements $ Gro mao Gross Amount of Derivative Assets Trewsimthe Presented in the Comoe Consolidated Amerie Balance Sheet ws 259 $ od Derivatives not subject to master netting agreements Total Deemer31,015 December 31, 2015 (Millions) Beamer Derivatives subject to master netting mm agreements Derivatives not subject to master netting Tra agreements TrTotal = $ 259 ro Amant Gross Amount of Drea Derivative Assets Presented in the Comat Consolidated 5 ms Balance Sheet $ 296 $ ---- $ 296 Gross Amounts not Offset in the Com sthbshetSd bjct Consolidated Balance Sheet that are Subject ina nag rime to Master Netting Agreements Gross Amount of FgeOting Eligible Offsetting Reap Cobcumen Recognized Cash Collateral Dette Rect Derivative Liabilities Received on 39 $ $ NetAmon Net Amount of Dete Derivative Assets =220 Gos AmotOafct inthe Gross Amounts not Offset in the Coan tSot t d bjt Consolidated Balance Sheet that are Subject heeNeg tem to Master Netting Agreements Gt r o Gross Amount of Eligible Offsetting Reania Cancun Recognized Cash Collateral = $ 220 NtAmount Net Amount of En Derivative Liabilities 37 $ Received oo x Derivative Assets $ 259 = $ 259 105 106 22775500..00110066 sie of Conn Table of Contents OfctofFiinanncigal Lisbiltis under MaserNetingAgreementswith Derivative Counterparts Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties December 31, 2016 . Goon tof Gross Amount of Demat Derivative Liabilities Troi Presented in the Consolidated tons Sti (Millions) Balance Sheet Derivatives subject to master netting py il ns agreements $ 93 $ Derivatives not subject to master gar 5 netting agreements 2 To = Total $ 95 December 312015 Gr memo December 31, 2015 Gross Amount of Gross Amounts not Offset in the Comandante Consolidated Balance Sheet that are Subject hina Sag tem to Master Netting Agreements To Anta Gross Amount of Geonan: Eligible Offsetting Recognized Cash Collateral Det he Derivative Assets Pledged os 39 $ Gos moar Often he Gross Amounts not Offset in the ComoeBp ah Sbjct Consolidated Balance Sheet that are Subject in Mosman to Master Netting Agreements Net Amount of Dei Derivative Liabilities =I " $ 54 22 = $ 56 Qin (Millions) Bev Derivatives subject to master netting Seman "os agreements $ ee -- Derivatives not subject to master ny netting agreements 5 Total $ J---- Foreign Currency Effects Derivative Liabilities Presented in the Come Consolidated me Balance Sheet ws 64 $ 55 ">69 Gross Amount of Eligible Offsetting Reon Recognized Defies Derivative Assets El 37 $ ancora Ne Anta Cash Collateral hn --= Da==5 Pledged Net Amount of Derivative Liabilities $ 27 5 $ 32 3M timate at estes foreign curetransaction fits, ncloding edging impacts detered ea ncome by 3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, decreased pre-tax income by approximatelyS09 illo in 2016 nd incresed prea income by prosaicS180 milion in2015, These simates include approximately $69 million in 2016 and increased pre-tax income by approximately $180 million in 2015. These estimates include ration ans and lowes, including derivate smmatsdesigned fo ee orsign ureny exchange re ks transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks. NOTE 13. Far Value Measurements NOTE 13. Fair Value Measurements 3M follows ASC 82, Fat Value MeasuraendmDiesclnosturses it spect 1sss ad iis that sre messeadt fi 3M follows ASC 820, Fair Value Measurements andDisclosures , with respect to assets and liabilities that are measured at fair value cn a ecurbaisinsangd nonrecuring ai. Under he anda, i eledefiansthde cit piorehe amount hat value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that `woukd be recived fo lla seo pid o anor abily in sn cdertyYansaction Between market parcipanatsofte would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the mcourcmcnt dt. Thestandard lscaaishe rarchy fo pots sed in mesg ui lu that maximizes he weof measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of bsrvableinputsand imimies tevs ofancbsrvale inputs by ruin ts the ostobservable puts be usd When observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when `vale, hearse pase np sake ertgants would won vb the sso by developed bad om art available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market da chnined fom scree independentofthe Company. Unobsrvble inputs are ints ht ret he Company's ssmptcns data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions `Shou the tors marke participants woud se in valuing he set or Fait delopd based upon th best information usb about the factors market participants would use in valuing the asset or liability developed based upon the best information available inthe creumsance. The bach broken down to hee level. Level putsarquod prs radioed) native markets in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for decal aati ve puts incl cuted prices fo slrats rabies i active markets, quoted pices for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for decal o similar aati in markt har not ci, ad nots (othe tha quoted picehatsa)s abnerbl for for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for theato lily ter dct o nde Levcl3 nts re uncbervble inputs orthe set or ably, Ctgorzation the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization thin he lution ierrhyfs esd opm the ket eeofnlp ht gnc othe Fi valu measurement within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. sendLtobsesthat are MeasuartFeade Falon a RecuringBasis: Assets andLiabilities that are Measured at Fair Value on a Recurring Basis: For 3M, acts and sii st ar essed atfi valu ona ecurin bss primary relate 0 availbleforse marketable For 3M, assets and liabilities that are measured at fair value on a recurring basis primarily relate to available-for-sale marketable securities,avalforsale investments included a atof vestments theConsolidated Dance Sheet) and ceria deratve securities, available-for-sale investments (included as part of investments in the Consolidated Balance Sheet) and certain derivative instrament, Derivatives include cash flow hedges, rest tcSwaps and ot net nvsiment hedges Th formato in te instruments. Derivatives include cash flow- hedges, interest rate swaps and most net investment hedges. The information in the ollowingparagraphs and bles primarily adds marr lativoe thes inanil assets nd Tales. Segara, ere were following paragraphs and tables primarily addresses matters relative to these finaaacial assets and liabilities. Separately, there were no matcnal far val mcamrments wih spit cncactsor no material fair value measurements with respect to nonfinancial assets or 0107 22775500..00110077 Table of Contents 0H5bi,les liabilities hatthat are are recooirdizscelosded recognized or disclosed tie at fair valu value nthe in the Companys Company's nancial financial statements statements ona on a rearing recurring basis basis for for 2016and 2016 and 2015. a33sMMctuussseeassnvdvaasrriiiooufsstvv.aalluuaaFttoiiloolnnoteweiscnhhgnniisqeousde,s,swwhhieicchhraaroreeifpptrrphiimmeavairarililluyoyatbbinaaossneeddmuueptophnotthdheeommlaorarkgkesietetdaasnnddfoiirnntcchooemmreeessapppeppcrtraoicvahecehisen,ss,nwciitiathhl srreessppeeaccatt t0do tafFiniiannaslcniacsl measured a fi valve. assets and liabilities. Following is a description of the valuation methodologies used for the respective financial assets and liabilities measured at fair value. Availableforsale marketable securities xcept crn U.S. municipl securities: Available-for-sale marketable securities except certain U.S. municipal securities: Marketable sure, xceptcortain U.S. micipalscuiis,ae valued izing mall sous. A weight average price is Marketable securities, except certain U.S. municipal securities, are valued utilizing multiple sources. A weighted average price is sed fr thess suri Marke pricers cbsmed fo heseSecurit from varcy of dusty standard data providers, scary used for these securities. Market prices are obtained for these securities from a variety of industry standard data providers, security mate le rom lage nancial nsttions, nd ther thin-pry sures These moll piesa used a pus fo a master files from large financial institutions, and other third-party sources. These multiple prices are used as inputs into a itbucturis obasned algo to determine he dl i valu ob used. IM casi Us. near securses eel 1. distribution-curve-based algorithm to determine the daily fair value to be used. 3M classifies U.S. treasury securities as level 1, `hile ther marketablesecurities excladingcrn U.S. municipal sccuarretcaisse)d a oel 2 Marketable secrere while all other marketable securities (excluding certain U.S. municipal securities) are classified as level 2. Marketable securities are cused rhin Note. discussed further in Note 9. Availableforsale marketable sears certain U.S. micpa secures oly Available-for-sale marketable securities certain U.S. municipal securities only: Im1nnbbioocttihhp22l0011s66oaaunnddr22s0011h44o,,ld33iMMngboabitoanifneeDddecmmeuunmnibiceciirppaa3l1l,bb2oo0nn1dd6ss.wiDtiuthhcthh0eetiCeiytyaotouffrNNeeeovvfaaddafas,, M Msisicsssaooururryii,,twwhehhiilcchotrreeipporreensseetnntth3MM d's'swooinlllyyeUUS.wS.i.l include ttmrhheeeusnnfiiiacndinapc0naicliahaslelecehdueirraiselttichetstoiofohfntohthholdefeiniCCngititteayyrseoosoftfNfNtDeeeevvscaeadnmadd,baaeahnrn,yye31rrh,eeecc2aee0lnnt1tht6omm.fDuatnuhnieeciitvpopeatlrhbbleoolnnnamddtuusinrssiesucuoiaapfnnactchleeisssbobbsnyeycdNNumereiavvtryaak,ddeata,h,,eaaavnndaddlummaasatcicuorrcnooheemccwoeointnhlooommbdieicucctlccialoosinznsseisifdiiddeewedrriaalatltiiio.onnncssvluedle 3reslaectuerdittyo. 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. Avsilable forsale insments: Available-for-sale investments: Inscsment include qtysecurities that se traded an civ market, Closing sock pics a readily availble rom active Investments include equity securities that are traded in an active market. Closing stock prices are readily available from active markets nd rc ud a being representativeoffi vai. 3M classi thes scuraivse | markets and are used as being representative of fair value. 3M classifies these securities as level 1. Derivative instruments: Derivative instruments: "aTtThfheeiCCeoovmamplaupneya.'nsTyhe 'CsdeodremirpvivaaatntiiyvveesaasdssseeerttissvaaanntddilaviaeibhillittisaesewwirittehhciinnorthhdeeeassdcocipeooovffapAAlSSeeCCn$8l115,a, DDfeeorirvrgaitnivvuesraaeannntddeHiyHeevdfdgoegriiwnnsaggrd,asarrdee rrpeqiiuoeinreddct1oo nbbeecrr,eceorsdeod Cacitoonvmmfaemmisortdomvideatniltutyyeh.pperTrdiihccgeeeessCswwtoahapmptss,pu,aseinenyrte'fseorerdseseitrrgiranvattaecetuisvsrweaesnappetshsy,atadanenarnddeonnmreeeittcnoiianrntvdveeeedsdsttdmametebefntnatti1rhhveehddaeglgdueeaesseiwwnNhchleesuredeenhthefetoerihhenieegvddneggsiictnnumggerrniientnnssctrtryeruamfnmoeeornwnttpasirsdecrcaenoctdonrdodepebdtdyiotaanht eficaoieinretvvraaavlclauutelse.u,.eNNeett investment hedges that use foreign currency denominated debt to hedge 3M's net investment are not impacted by the fair value SmpeoatsuforreemiegnntcsutrrnednacrydeuxncdhearngAeSaCes320a,ndsntotewdietbhtruessepdesc toteheedrgiancgtoisnshtartummeanty 1pmaarckefdi1.v3alva.lue ith rsp 1 changeisn 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. 3Mhas determined tha foreign curency forwards, commodity price swaps, currency swaps, forign cureney options, ners ate 3M has determined that foreign currency forwards, commodity price swaps, currency swaps, foreign currency options, interest rate `naps ad cross-cut swaps will be considered el 2 messrements. SM uses inputs oer than soled pricstersc swaps and cross-currency swaps will be considered level 2 measurements. 3M uses inputs other than quoted prices that are bserabl for the ast. Theseinputs include orig cre exchang acs, volts, and frst tes. Derivative postions observable for the asset. These inputs include foreign currency exchange rates, volatilities, and interest rates. Derivative positions `an primary valuod wing standard aultions models that vs ss ther bases rely observable market parameters Indust are primarily valued using standard calculations/models that use as their basis readily observable market parameters. Industry andar data provides ar 3M prima sour or forward nd spot te informationfoboth ners rte nd currency tes, standard data providers are 3M's primary source for forward and spot rate information for both interest rates and currency rates, with sali valutons pricically validated through tian orcounterparty quotes nd net pes vale srcof ash with resulting valuations periodically validated through third-party or counterparty quotes and a net present value stream of cash Bows model flow-s model. 10s 108 22775500..00110088 Teo Contos Table of Contents "TheFlowing blsprovid formato bv) fo ast nd bitsthtsomesed ivl on curingbs. The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis. Dosipion paves C_oi FadVi arane re ein Description Fair Value at Fair Value Measurements Using Inputs Considered as (Millions) Assets: Mabeforse. Available-for-sale: Dhtewlessariies Marketable securities: Comets tits s ws os ws Corporate debt securities Commercial paper Cons fine di 7 = fi = Certificates of deposit/time deposits Asset-backed securities: "Nambie on eed a - a - Automobile loan related m Cees w Credit card related over 7 - a rm Other |m USmmieleadis om U.S. municipal securities Dervaiemines. act: Derivative instruments assets: m honcumeay overdoneaw Foreign currency forward/option contracts te pe 3 = ES = Interest rate swap contracts December 3L 2016 Level 1 Level 2 Level 3 10 $ 14 197 31 18 7 20 234 25 $ 10 14 197 31 18 7 20 234 25 Libis Liabilities: Deine ables Derivative instruments liabilities: TieCre vp Foreign currency forward/option contracts "- . 94 94 Interest rate swap contracts Dein Description 1 Varvatos Fair Value at 1 Fe VoeMemrareg met Fair Value Measurements Using Inputs Considered as (Millions) Assets: Mabie: Available-for-sale: Mateuessariies Marketable securities: Cops Corporate debt securities Foreign government agency securities Commi Commercial paper December 31, 2015 Level 1 Level 2 Level 3 s ns ooos ws 10 10 IH10 = i10 ro 12 12 Certificates of deposit/time deposits Arthockedsie: Asset-backed securities: m hemes w Automobile loan related Crs car red i - i - Credit card related Come a=a Other US mete fH = po 2 U.S. municipal securities 26 26 26 26 10 10 21 21 12 12 in re vcst Derivative instruments assets: Foreign currency forward/option contracts m = m = 272 272 Interest rate swap contracts me Liabilities: Derivative instruments-- Hilts: Forvgncurneyforwardopion coniracts Derivative instruments liabilities: Foreign currency forward/option contracts ner tesap cots Interest rate swap contracts 24 24 1 - 1 = 6688 e6o 8 1 1 0109 22775500..00110099 Cabloeoftes Table of Contents "Th lowing ble provides econcilationof thbegining and cing bloaf enmsmceasd a i aluona resuring The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring ais in he ale above that ued significant ubserabl puts (evel 3. basis in the table above that used significant unobservable inputs (level 3). rte crn US mpste nd mn rie Marketable securities -- certain U.S. municipal securities and auction rate securities only Ahn ame aus ans (Millions) Beginning oes 5 CR TT Beginning balance Tom gotasor foe: Total gains or losses: nchuilin caning = = Included in earnings Inciuded in thrcomprehensive income. = 2 Included in other comprehensive income Porchessndsnes n = 1s Purchases and issuances Soles nd semen ap Sales and settlements Tameisn anudtooflrve 3 = = = Transfers in and/or out of level 3 Endingbalnce = 3 i Ending balance 2016 12 $ -- -12 (4) 20 2015 15 $ (3) 12 2014 11 (1) 2 15 (12) 15 Change nuncagains lossesforthe pid inclded in camins foe Change in unrealized gains or losses for the period included in earnings for Scares held the enoftdhe reporing period = securities held at the end of the reporting period adil, the panastof IMs pension snd osteitisa mess ivaloun securingbas ot lest 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 too 11 annually). Refer to Note 11. Aas ndLabs i htare MeasuFartVealdueou aNowwecurin Bis: Assets andLiabilities that are Measured at Fair Value on a Nonrecurring Basis: Disclosuraees reqired orcorti assets nd blestht are mesurea i lo, bot ar scognizd nd dislosd at it. Disclosures are required for certain assets and liabilities that are measured at fair value, but are recognized and disclosed at fair aluon nnscring bai i period subsequent 0 nis cognition. For 3M, such messrementosffi alo ae prima value on a nonrecurring basis in periods subsequent to initial recognition. For 3M, such measurements of fair value relate primarily ologied set mpaiments. There wer no material long.ivedast impsincats or2016, 2015 ad 2014 to long-lived asset impairments. There were no material long-lived asset impairments for 2016, 2015 and 2014. Fol VatuofFvnctet nstramens: Fair Value ofFinancial Instruments: "The Companys nancial instrament ince casand ssh cial, marketablesecurities, scouts ecivable, erin The Company's financial instruments include cash and cash equivalents, marketable securities, accounts receivable, certain invest, acenans fable, borrowings, addsvatvscomnts. The Tr valves of cachandcashequivalents accounts investments, accounts payable, borrowings, and derivative contracts. The fair values of cash and cash equivalents, accounts sciable,ssounspayable, ad shorts borrowings ad cure portaofloo er det aprosmatd caring values receivable, accounts payable, and short-term borrowings and current portion of long-term debt approximated carrying values ceofahe shore aoe fTe esol, Avalos akesecret aud tessimets, bn adeno because of the short-term nature of these instruments. Available-for-sale marketable securities and investments, in addition to corti derivative isco arecoaridvealudes as dist thepreceding diclowres. Fo ts oot dc, the certain derivative instruments, are recorded at fair values as indicated in the preceding disclosures. For its long-term debt, the `Company uid id-pry osocstmate irvas (w3lvd e 2). Infomation ih esthse armeing ams Company utilized third-party quotes to estimate fair values (classified as level 2). Information with respect to the carrying amounts and cximated Fir vloofhsce Tana moments lw and estimated fair values of these financial instruments follow-: ton (Millions) eT eg Long-term debt, excluding current portion Deemed December 31, 2016 Carrying Fair or A Value Value Swe She 10,678 $ 11,168 bebo December 31, 2015 Carrying Fair To ik. Value Value SAE Tom $ 8,753 $ 9,101 "Th ie alles elcidshoveconsider the emofshe ltddet aoc the impactsof drathedgingactivi. The caning The fair values reflected above consider the terms of the related debt absent the impacts of derivative/hedging activity. The carrying amountof ng erm deb referenced sve i paced by cert schon nee te swaps hatsr designated Fu amount of long-term debt referenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair aluhdgesand bythe designationof ed ak Euobondsecoris sed by theCompany5s hin instramoefnhte value hedges and by the designation of fixed rate Eurobond securities issued by the Company as hedging instruments of the `Company ne vestments Earpean subdir, Many of Ts cea bonds were tratdpirenmigum at Disember 1 Company's net investment in its European subsidiaries. Many of 3M's fixed-rate bonds were trading at a premium at December 31, 201002015 du 10h low incre res and hingof SN rai speeds. 2016 and 2015 due to the low- interest rates and tightening of 3M's credit spreads. NOTE 14. Commitments and Contingencies NOTE 14. Commitments and Contingencies Capanid Otpearal Leases: Capital and Operating Leases: Rental expense under operating ese was S313 il in2016, S316 millionin 20and1S3532 millon in 2014. Its 3M prcice Rental expense under operating leases was $318 million in 2016, $316 million in 2015 and $332 million in 2014. It is 3M's practice scare renewal ight foes, therchy giving 3M th ight, bot ot the aban. o maintain presence esd Gy. to secure renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain a presence in a leased facility. 300 ha tr roar capital ese. Fist 3M hs capil ease, which became lfcive in 3M has three primary capital leases. First, 3M has a capital lease, which became effective in 10110 22775500..00111100 abelComets Table of Contents AArpepcerolirld22e00d00a33,,cttohhpaatit aiinlvneoaslvveosasalsbbtuvuiaillnedddiinsbnglniintgthaheeonUUnnoiifttaeeddppKKrioinniggmdadoiomcml((yww3iit3th.h5aamleeisalslseonteerrBmmiosoffh2222Poyyeueanardrss)).(.GDDIPru)ir,innoggrttahhpeepsseeexccoionmnddarqgeuuyaarSter4r1oofif220l0005o3,, 33atMM arDDepeecpcorceoredmxeimbdmbeaarte3e3cr1l1a,y,pi22St00a31l1066l,em,aixeslxeclcihahoasnasnneeggtleeaantrradettdeeo.s1b.lSiSageeaccItoToinondnd.i,dnovdufeurasriptinnpmggreonttxthhieemwiffatoothuuerrlayttnhh3aqq3muu.o5aarrtrmtietzirlaoloitfofi2no20n00B09pr9e,itr,iis33ohMMdoProfreuescnceodovrder(endGdeBydeaParcc)s,aa.popirTithaalilsplpeecrsaoasexpeiaimaslsasteeeetlayaasnne$dd4w1ooabbsmlliiifgglaallittyoiiononnaotoff Saaamp1p5omrmroitxilziloemodanatartetiDlnDyei2ec$0c5e1e04mme,bmbeweirldhrl3ii3o1c1n,h, r2i2ed00li1a16st6e.c.duTTstohhsiiearndnd,, IT investment with an amortization period of seven i3nMmroercsdoertdaeidl aicnNaoptt7eease set ad obligation of 3M recorded a capital lease asset and obligation of sproximately $12 years. This capital approximately $12 milo in lease was million in 2016and fully 2016 and $15 million in 2014, which is discussed in more detail in Note 7. Minos eas egenents unde capital and operating less with non-cacelbl ems i eeofsneyear aof Dessmbe 31, Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2016, wees follows: 2016, were as follows: tian Copitone Op{errsoing (Millions) 217 5 vs 70 2017 Operating Capital Leases Leases $ 9 $ 210 208 7 61 2018 7 161 20 5 1 2019 5 119 20 a 2020 4 89 201 5 2021 4 58 `Aner 2021 1s After 2021 30 188 Toul T 5 T ws Total $ 59 $ 825 Less: Amounts representing nest 5 Less: Amounts representing interest 5 Presentval offuture minimum easepyimnts El Present value of future minimum lease payments 54 Less: Curran obligations under capil leases 5 Less: Current obligations under capital leases 9 Longtonaligatons undercapital leas s = Long-term obligations under capital leases $ 45 -- Unconditional Purchase Obligations: UbUinnnccdooinnndgidti(tiivooonnanal-l cppaurnrscchheaalssbeeloo,bbollcigiaangtcaioltnaisboalanrreeseaddneeyfifnienidacnaseeaadntn gacgirrreceeummesettnatntctooespp)uu.rrcTchehhCaassoeemggpoooaddnssyooressseetrrivvmiiaccteeesssttihhsaatttissaelennuffnoocrroccneedaaibbtllieeoannnadld lapeulgralclhlyyase bbboylibnildieggiaunartigiooa(nnneoccneoo-smctmaimnmmaicittemetladembnaletse(,nffoooltrrrocthwhasoon:scsee2lcca0oob1nnl7ettr(aoaSccn1ttl9ssy3wimintiithchleteoretar)mmin,ssc2iiinn0rc1eeu8xmxc(esScts1as8noe9ocfmfeosison)lsn.eleToyynhee)eaa,rCr2))0oaasm1s9poofafD(nSDe1y2ce3ecesemtmmibmilbealeirtreons33)11.it,s222t000o121t6a06,l,(uaa5nt c4$So60nm0d8i8iltmmiioiolinlnllai)iloonn2p.0.u2rPPc1aahyy(amm$se2een4nttss tbmmyioillyllcieooaannr))raasrsnedvdeiasaltffaitmierlrai22tte00yd22o11afs((p$f5or22l5o5lodmmwuiliscll:ltiio2oosr0nn)1)s..7erM M(va$ian1cn9yeys3oohfmfttihhllaeesirsoseeno)cc,oko2mm01mm08iittc(m$mt1een8nn9trtsmsrre.illaltTitoehntoo)o, atC2a0okk1me9proa(r$npp1yaa2yy3escxmopoinelrtlrictoatcnsts)s,,,r2iie0nnc2eww0ihvhi(ei$ccc5hho4n33smMMidileglriauoaatnrri)ao,tnn2et0e(s2eps1rppo(aa$dyy2umm4ceoetnnstrt stspoeeurrrevvcniihccsaeuesssre)e)sffaoonvrrtattihhhlaeesbsefieluituntuynrcecoo,onfnbdpduritiotiidroouennpcaratlsepspoerurncrtschenharalvssyieeceotosbhblotlihsiggeaaattetiaioormnensss.s.foToTldrhhetewohppciuuurcrscchthhotaamhsseeeerCoosob.blmlTiipgghaaaettniiCyoononimsaampcmaoonnuoytnruteasxcnpddtooeutcnantlssdottoobrrleerippegrrcaeeetssieeevdnn.ett consideration (products hTeheenmtaijroeriatyopfaV's the entire anticipated or purchases in the future, but represent only those items for which the Company is contractually obligated. The majority of 3M's apnroidnudcitcsatainodnosftehreCioemrspeapnryc'hsaesxepdecatsendcfduetdur,ecwaitshhncuotulncloonndsiteisotneadl 1c0ompmuirtcmheanset.liFgo attiiosn.eason, these amountswill ot provide 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 purchase obligations. Warranties Guarantees: Warranties/Guarantees: 3M ccrued product warranty sil, recorded an the Consolidated Beane Sheet a partof curt and longer ilies, 3M's accrued product warranty liabilities, recorded on the Consolidated Balance Sheet as part of current and long-term liabilities, arc ctmated a approimately S47 million at December 31, 201, and 28 million at Dcemb3r1, 2015. 3M docs ot consider are estimated at approximately $47 million at December 31, 2016, and $28 million at December 31, 2015.3M does not consider {his amount 1b materi. The fi alof3uM uraotfouen ith hed prisand othergusranie arrangements are hk this amount to be material. The fair value of 3M guarantees of loans with third parties and other guarantee arrangements are not teil, material. RelPaantAcetid: Related Party Activity: 3Mdocsnot 3M does not havhave any any materi material esd related ppaarrttyy saccttiivviittyy. LegalProceedings: Legal Proceedings: "TrTehhseeuCCltooommrpypaapnnryyocaaennedddsisnoogmms ewooofrfiltidtswsissdueub.bsisdTihiaerdieeisiasnarcreeluiidnnevvoovlalvvreiedoduiisnmpnruuommdcuecrrtoosusbsccillailmssaaavnnoddllwaiiwntsgusipt,sr,odppruriicnntccsiipptaahllallyyhinenttChhoeemUUpnaninittyeeddnSSoitwtaetoesfs,,faaonnrddmerly rmeagnuulfaatcotryurperdocneded5in9g)s,wnoirlldwcitdue.lTphreospeeriyn,cluadnedvcaormimoeurscpiraoldculcatsimlisabanildityla(wisnuviotsl,vinigncplurodidnugcts that the Company now- or formerly manufactured and sold), intellectual property, and commercial claims and lawsuits, including wm111 22775500..001111 TaofCbonses Table of Contents hose brought underthe nts as, and environmental proscsdings.Unles these std, the Company is vigorously those brought under the antitrust laws, and environmental proceedings. Unless otherwise stated, the Company is vigorously etcndinagl sch gation, defending all such litigation. Process for Disclosure and Recording of Liabilities and Insurance Receivables Related to Legal Proceedings Many lawsuits and coms involve Highly complex sues eating causation, siti eidence andwhether ther rs acl Many lawsuits and claims involve highly complex issues relating to causation, scientific evidence, and whether there are actual damagesandar herve subject 0 substantial unceriites. Asessonf astuists ands can inolve a sre ofcomplex damages and are otherwise subject to substantial uncertainties. Assessments of lawsuits and claims can involve a series of complex udacnts about fteventsamd cam rly hey o timate ad assumptions. The Company complies withthe reuirementofs judgments about future events and can rely heavily on estimates and assumptions. The Company complies with the requirements of ASC 450 Contingencies and esto guidance, ad cords silt for lg proceedings hos instanceswher fa ASC 450, Contingencies, and related guidance, and records liabilities for legal proceedings in those instances where it can ressonsly uimat he snount ofthe los and wher silty is prbsble. Where the reasonable cimotf ehe probable os i reasonably estimate the amount of the loss and where liability is probable. Where the reasonable estimate of the probable loss is a ange, the omnpany records he most kel estima feos, o th lowand fhe rane thr noon best sms. The 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 ithe discloses the amount of posible os of rangeof os exocf eesabslisshed accaifsimaborlStee,s th Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such anestimatecannot be made The Company discloses significant egal proceedings even where sbiisnot probable othe such an estimate cannot be made. The Company discloses significant legal proceedings even where liability is not probable or the amouafnhte Halil ot ximable orboth iheCompany believes hee lat a reasonable poss ha oss may be 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 incur. incurred. "The Company exit nsranc easbased on an snlysisofits merous policies, including hie exclusion, perincnt The Company estimates insurance receivables based on an analysis of its numerous policies, including their exclusions, pertinent cas aw ntrpeeingcomparable polices, tsexperiencewith slr claims, and assessment of the naarof the lim and case law- interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim and Temaining coverage, ad records n mount tha concluded i key 1be recovered. Fo hos nated mates where the remaining coverage, and records an amount it has concluded is likely to be recovered. For those insured matters where the Company has ake an acrul he Company als ror eeivables or the amount of surance hat expects recone under Company has taken an accrual, the Company also records receivables for the amount of insurance that it expects to recover under heCompanys insrance progam. For hos ned mates whereth Company has not akin n sceral because the Fait the Company's insurance program. For those insured matters where the Company has not taken an accrual because the liability is ot probable th ama ofthe bi i not estimableorbt, bt whee theCompanyhas incur n sxpens in defending not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending isl, the Company rcords esisfor tho sontof isranc hat i exc 0 recofvoehre expense incur. itself, the Company records receivables for the amount of insurance that it expects to recover for the expense incurred. Because igation isubse to inberntuncrsintie, and univorsble rings o developmentssoukdour, ther ca be no Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no cori that theCompany my not imately nc charges in excessof pes recorded sbilis A fue adverse ling certainty that the Company may not ultimately incur charges in excess of presently recorded liabilities. A future adverse ruling, Sloman, or unsvorsbledevlopment cold resin ture charge that could ave material adverse fc cn the Company's settlement, or unfavorable development could result in future charges that could have a material adverse effect on the Company's reosf opueratlion t cash flows in th period hich thy re recorded. Althogh he Company camo sma fs xpos 1 results of operations or cash flow-s in the period in which they are recorded. Although the Company cannot estimate its exposure to allel proceedings, it corybees that such ure charge, ay, Suld othave amaterialadverse elton he all legal proceedings, it currently believes that such future charges, if any, would not have a material adverse effect on the consolidated Tancil positonoftheCompany. Based on experienceanddevelopments, the Company recsamines fs simats of consolidated financial position of the Company. Based on experience and developments, the Company reexamines its estimates of probable Hailes and acai expenses and rccivable cach period. and wheter i bl tocmt Habily prviously probable liabilities and associated expenses and receivables each period, and whether it is able to estimate a liability previously ctminedtobe no simable ano nt probable. Wher appropriate Company makes ain 10 o adjustmeonfitts determined to be not estimable and/or not probable. Where appropriate, the Company makes additions to or adjustments of its cximated iailes. Ava sul, the cure estimoaftthee potntil pacton heCompany's consoldted financial position, estimated liabilities. As a result, the current estimates of the potential impact on the Company's consolidated financial position, rests of operatinodn cashflows or he egal procdinagnsd claims pending aginst heCompany could changei he Fre. results of operations and cash flow-s for the legal proceedings and claims pending against the Company could change in the future. "TTThaheebfflooelllsloowwaiinnndggsssoeeccctitiiaootnnessdffiirirsnstsddueresascncrcriiebbeeettchhie snsigainhigfeitachsaenntCleoegmgapallanppryrooccheesoeddaiicnngegssr eiinndwwehhaiitccihhnttghheeotsCCgoommnppfaancnyyaiinss iitnvvololelgsvadeld.p,raaonncddeettdhihennngsdd.eescsribee the the liabilities and associated insurance receivables the Company has accrued relating to its significant legal proceedings. BesMapskiAsbnestotsLigoatiron Respirator Mask/Asbestos l,itigation aAAsstoofpfoDDrpueoccrcetmmlbboeeerrp33r11s,,e22n00t1166a,,tptphherCoComomampipalanynyy2is.s6aa6nniaanmmdeievddidddueeaffleenncdldaaanitnm,ta,nwtisti,thhcmlomupiltaiprlleedcctooo--sddpeepfferennoddxaainnmttasst,,liinyn nn2uu.mm1eer3roounusdsillvaiawdsawulistcsliiannimvaaarnrtiiosausvscictoohuurrttss athcatitopnusrppeondrtintog at Decerber 31,2015. represent approximately 2,660 individual claimants, compared to approximately 2,130 individual claimants with actions pending at December 31, 2015. C"TTohhmeepvvaaansstyt 'mmsfajmooairsityky aoonffdtthhreeesvlpaiwrsastuotirtpssarnndodccslsoainmasnsdrrseesesokolvdleaddmbbayygesasnnddfccruuormrrertnhetelnyCoppeemnnpddaiinnnygg aaaggnaadioinntsshttethrhedeeCCfoeonmmdppaanantnysy saolrliaelgeleeuugsseeeodofpfessrosomonneaolofiftnthjhoeery Company's mask and respirator products and seek damages from the Company and other defendants for alleged personal injury dfreomwfoerkniodacgaeenenexrptaolssluyreinstsheawobrkepl,aces.iAl,ncooalrmionfe tdhuwst oroithert nosdculpsatiionnslsodluvsetdsbuynadndincuprreodnutcltyspmenadinng scgetbythoethr from workplace exposures to asbestos, silica, coal mine dust or other occupational dusts found in products manufactured by other `CdCCoeoofmmempnppadaanannynyy.tsggweoehnrneiegrcraeahlnlalleyyrraallfllllyefggienne tppsheeperreswscooionfnraisklepirdlna.jcuyera.ysAfrwreoommlmin3ocosscrsipcturuypopadoatufticitoothnnsesamlllaaeenwxxusppfuooaissctusutrruaeernetdodcsablssyabbimeoesssettoorrssesdfroreoolevmmneddppsbrrnoyotddsauu,nctdotssfcppourrsrecreveavinsiotiuoloysunlsplylemmyndaaointnnuuCgfocaamctgptaruairennesddyt tbbhyyetthhee premises Company, premises. which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company 2112 22775500.00111122 TabeofComets Table of Contents "TheCompany's current lumeofnew and pending maistsiesarl lower tha it experienceda the peakof lings in 2003 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 expect hat floifcnigs by unimpairedclaimants nthe tar will onttoboat much ler el ha in 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 nb ofcisalin moreserous injure, including mestbelionnsad oor malignancies, ill the past. Accordingly, the number of claims alleging more serious injuries, including mesothelioma and other malignancies, will representagreater pereniag oftotal claims hn i he put. The Company bas prevailed nal deen cases ake ol, represent a greater percentage of total claims than in the past. The Company has prevailed in all eleven cases taken to trial, including mine ofthe em cases ried1 send sch il cured in 1999, 200, 2001, 2005, 2001, 2007. 015, ad 2016 including nine of the ten cases tried to verdict (such trials occurred in 1999, 2000, 2001, 2003, 2004, 2007, 2015, and 2016 describ below), and an appellate revers n 2005 ofthe 200 jury verdict adcrs 0th Company. The eningcase, ed in described below-), and an appellate reversal in 2005 of the 2001 jury verdict adverse to the Company. The remaining case, tried in 12009 wa dismissed by th court at he cos of lini' cvidence, basedcn the court's eal Fin tet he lanl hdnt 2009, was dismissed by the court at the close of plaintift~s evidence, based on the court's legal finding that the plaintiff had not presentedsullenevidenceto support joy src. In Avgst 2016, 3M eid unanimous dense edit rom ary in presented sufficient evidence to support a jury verdict. In August 2016, 3M received a unanimous defense verdict from a jury in Sate court in Kentucky, in 3M fr respito rl nciving col mine dust. Tho state otfh pat alleged ts he 3710 state court in Kentucky, in 3M's first respirator trial involving coal mine dust. The estate of the plaintiff alleged that the 3M 8710 respirators defective and caused is death because i du ot pote im from barf sclmine dust.The ory reeted laiti's respirator is defective and caused his death because it did not protect him from harmful coal mine dust. The jury rejected plaintift~ s lain ad rtamed a verdict findingno bility agains SM. The edict is inalas the pln dd ot File a appeal. claim and returned a verdict finding no liability against 3M. The verdict is final as the plaintiff did not file an appeal. "The Company hs demonstrated thee past ial proceedings ht ssprtry; protcion produitres flvas claimed when The Company has demonstrated in these past trial proceedings that its respiratory protection products are effective as claimed when sadn th mendedmannerand i he nkndedcircumstances. Consequently the Company believes ha limaarnestnsl 0 used in the intended manner and in the intended circumstances. Consequently the Company believes that claimants are unable to establish tat heir medical conditions, evn igiican, ar aibtable 1 he Company's espiony protection products. establish that their medical conditions, even if significant, are attributable to the Company's respiratory protection products. NoneththeeClomepasnsy's gation xpericnc indcthaat sclaisn ofpersons ith malignant condos se cotfeo resolve Nonetheless the Company's litigation experience indicates that claims of persons with malignant conditions are costlier to resolve thanthe caof immpaisred persons, and hreforebelies te verge costofresving pending and freclams on pet. than the claims of unimpaired persons, and it therefore believes the average cost of resolving pending and future claims on a persim bss will coin or behigher than exerineed in rir periods hn he vast major ofsmswer asserted by claim basis will continue to be higher than it experienced in prior periods when the vast majority of claims were asserted by medically unimpairedshimants. medically unimpaired claimants. AAanssdppwrreeovvoioiluoosulsry msreppoaorrteen,d, itthheecSSoatfautteeoerosffpWiWeeaseostsrtyVVipirrrggoiitnnesica,t,ittohnhrroporuuoggdhhucitttsssAAtnthttetooCrrinnreeyycuGGieentneerCraoa,ul,rftiloeefddLiancccooommlpnplalCaioinnuttniitnny,2200W00e33staaggVaaiiirngssitnttithahe,e CaCnoodmmpapamanenynyded aiirttnessdiccmootbwmmuporlpsaloeaitmihnnetetnriitnmnof22a00tn00hu55ef.a. ccTTotuhhsreteesraasammloeleefnngdrdeeedeslddpyiccrioaonmtmocpurplyralraipeinndrtotbtssyeeckettikhsoesnsSstupuabrbtosesdtfatuoncarttinsaetlir,nibkbatetuh,rte'uuCsnnsiscprpceoecumciipfitefiCineedsod,au,trccitoooommnfppaeLenidnnssachaottoleonrrayyCdlodaeuamnmratyabgg,eeeWnssepeprsritimmVaparirrriogillviyyniidffaoeo,rdraondlamended 12wr`e0woi0omrr7kkbeeuurrssrnslwweimittthehenootcc2oc0cuf1up3tp,haatetiticoohnonasraltlstppanholleeneusgmmecodoaclcsycoeeinniimcooaussnirssraegaadennmddbeyuunnntthsspepceecSocitiafnftiieeefddfoopprruuwnniiiotntirivMkveeaerrdd'scaahmmcoa2am0gg1eep1s..e.nTTsIhnaheteNiococanvasseaemnwwbdaeashrse2aii0nlnt1aahc3cct,taiivrveetehbferreooSnmmetfeittthhseelpffrooouuvorrittdmhheoqdqtduuitaaoorrntaeelrlrtoooff ih2b0ifef0uu7arrcuuaantstetitltthhleaeNtleaoaw2mi0sb1uui3ilt,iitnonyttthohearssseethpphaaaernreaanttaeerclbeaiciasobelriimldtietyaydnaaafnngodderdmtdaiaemsmnamtagcageoetsnsefpeprrrbeooecncceceaeeeuddsiiinnenggM hss.e.arAACcloht mth2hpe0eab1hn1eey.aabIrnreinliNginoeovvgneesmtonhttbheheaemmtroo2itt0sii1oobn3ni,,,lytthhheeeiccSoootatuutrtetpfrddioeelebccdallibinalneeemddatotnootdiobisnirftutioarmctaabteele the lawsuit. No liability has been recorded for this matter because the Company believes that liability acotvietnime.enspanbsydhtheeCSootamtpo,afnWyesistnVoitrgbineia.thseitmahteespeosmsiinbliemallosacotfirvaingne tfilcaosesvaesnndtthee at this time. In addition, the Company is not able to estimate a possible loss or range of loss given the ifllsaaacccntkkoohtofpftaraontnhbycyamobmemlseepsaainlnniadnggielfnsultliamssaebrltes discovery responses by the State of West Virginia, the otherwise minimal activity in this case cblyithe agmaoiunntt wofofoaleramma.nufaacjtuurryeirsghwthealelocadteefencdaancth sdehfaenrdaonftaibihleitcyamea1ysltiummaehse claims against two other manufacturers where a defendant's share of liability may turn on the and the fact iladw,ofont law- ofjoint ndthat and sever Habily and the complaint asserts several liability and by the amount of fault, if any, a jury might allocate to each defendant if the case is ultimately tried. Respirator MaskAsbestos LibisandInsuranceReceivables Respirator Mask/Asbestos Liabilities and Insurance Receivables: "The Company ual conduct comprehensive egal reviewofits respirator mask asbestos blsi comncton ith The Company annually conducts a comprehensive legal review- of its respirator mask/asbestos liabilities in connection with finalising and reporting ts anneal resofuopelrattionss, unless gaint changeis endsof nedeclopmcnts waranatn ace finalizing and reporting its annual results of operations, unless significant changes in trends or new- developments warrant an earlier review. The Company rervecenit nedhiwstoriscal lisdat, including without imitation ) he numberofpending cams fled review-. The Company reviews recent and historical claims data, including without limitation, (i) the number of pending claims filed aginst the Company. (1) the nature nd mi.of those cis... he proportion of cis assrin usageoftheCompany's mask against the Company, (ii) the nature and mix of those claims (i.e., the proportion of claims asserting usage of the Company's mask resin products and allgin expo1scaech ofasbestos iia, ou ratheroccupations dusts, and lispleadinguse of or respirator products and alleging exposure to each of asbestos, silica, coal or other occupational dusts, and claims pleading use of absto-conainingproducts allegedly manufactured by the Company).(i) he costs 10defend snd resopendingclaim, sd asbestos-containing products allegedly manufactured by the Company), (iii) the costs to defend and resolve pending claims, and (endsin Flingrte andincots oded nd esl css clltively, the"Clie Data") Aspatofits comprehensive (iv) trends in filing rates and in costs to defend and resolve claims, (collectively, the "Claims Data"). As part of its comprehensive Icgl review, theCompany providestheClaims Dats 0. id pity ith xperis in determininheg pactofCas Dat legal review-, the Company provides the Claims Data to a third party with expertise in determining the impact of Claims Data on fot Fling trends ad cots. The tid party ass the Company in estimating he cotsto defend and resolvepending and fre future filing trends and costs. The third party assists the Company in estimating the costs to defend and resolve pending and future claims. Tho Company vies thes timate o develop isbest matof rosa lily claims. The Company uses these estimates to develop its best estimate of probable liability. Decloprcnts ayosc that coud aft theCompanys estimateof ts isle. These delopmcnts include, bot are no ied Developments may occur that could affect the Company's estimate of its liabilities. These developments include, but are not limited to significant changes in) the key asamp undelsing the Company secu, including, he numberof fre cis, the to, significant changes in (i) the key assumptions underlying the Company's accrual, including, the number of future claims, the tre and miof those claims, he average cot ofdefendianngd resolving lain, andi nature and mix of those claims, the average cost of defending and resolving claims, and in ns113 22775500.00111133 TaTabbeleooffCConotnetennttss mining il redness (i) ialandappelate oateomes, i)he a and prod applicable othese cams nd (v) the maintaining trial readiness (ii) trial and appellate outcomes, (iii) the law- and procedure applicable to these claims, a~d (iv) the nancial vail of othe co-defendanmtds nurs. financial viability of other co-defendants and insurers. AApessrsaorrneseswsuhtltoooffctthhaeemCComommrppeaannsyyer'ssirroeeuggujululaarrricecosom,mpirpnercehlheunednsiisnivgveemeleesggoaatllherrelevviiioeemwwas-aannnddduoutnnhddeerorlimyanilngiggnffaacnctctoioresss,ssuctchhhe Caasomtthpheaccnoosysttsrseoocfforrredesesoodllvavniinneggxlcpleainimssesioonff S22p60e0r12s16omniffosolrrlworrhenessoppeicilrrlaaaatttioemordr more serious injuries, including m0astkheasrbesepsitroastormbaistkaesboefsSt6os9 mask/asbestos liabilities of $69 immmigliealllsitioooontnn.h..eIlIninAo22ms00oa11f6,aD,nedttchhoeeetmCChbeooremmmrppaaa3n1ln,iygyn2mma0an1adcd6ieeenspp,daatyyh2mme0ee1Cnn,ottsmtfhopoearlnClygeogmraaeplcaofneercydesedbaanndaddn assenexntsptleeeenmmcseeeunintnsftooorsff $rrree6esp2sprieimsrsateitlnooltirros nmmthaCarsesoklkam/tsaepsdbabetonstitoyhsesslirabeibsepitltiirteaieetsosre(emxtxcaclisluoukfddm/aiipnsnrabggoebAAtsatceboealsrreoloitoiaagwccacctrariuuonaandll.ssr)A)eoofsflfeo$cft59sD955aencmmeeimitlllbiiioeomrnna3taa1inn,odd2$pS0e518r86i58oadnimfdoilrl2loi0fou1n,t5,u,rrreetshspepceeaCccimotiamsvcepylt.ayhn.atyTThmhhiaiassydacabcncecraauFci!acllerduasl afoirs represents the Company's best estimate of probable loss and reflects an estimation period for future claims that may be filed against cThseiCmoamtpahne yamporuenatcohriunpgpetrheenydearof20h5.raRnegfeeorftoamNootuentI fboyr wfahrithcehr tdeetabililointtyhenavyiseixocneeodftthheiss eescas.thTehCeoCmopmupnaynhyes.camo the Company approaching the year 2050. Refer to Note 1 for further detail on the revision of this accrual. The Company cannot `eepsssetttriaaimbbolldaiitsisehnhetewhddhebbiaeecmcchaaouuussneeurtoooffrtctuhhlpeeip)(tei)sriienmnnhhadeeyrroebefnnettthsddeicfriafinrcgcu.eltyo1fii)nantmphprroeooujjcneeotccstmtiipbnnlyggstwtnhhtheesicnnheuamtrhulbeyelrimaoaobfwfcialbciyaltaysmiemmassastytrhhtaeatxtlchheaaievvdneetnnhaoeogtaayyicenecsttrtbubameeleninthlaeasseCsseeorrdmtteeefdpdeanoondrryathnhhteeassttiwmeheere the period in which future claims may be asserted, (ii) the complaints nearly always assert claims against multiple defendants where the imnatgaensdsslefvegroadl arbe itty.picwahlicnhocsn otry bby 0suaien,dtiv1id)duatlhde maeleffoaecttorhsntdaedsdcerfiebnaeddansnth'osvtsehtahrsatotfhebCiolmlpanmyaycotnsidoenmrsthine lav of 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 xesitimmaattinogfiasbiilbtiilctsis, nd the estimating its liabilities, and (iv) the severalposibledeclopments vary by state, (iii) the multiple several possible developments dessibd abo ha may oscor factors described above that the described above that may occur that coud Company that could at the considers affect the Company's in Company's estimate of liabilities. AASHssomofifliDDoeenc.ceemAmsbbere3r3r1e1,,s22t001o166,f, ttmhheaeClCooamrmpbiaptnarnyaty'i'sosnredesecsceiiivvssiabobnlleeinffooJruiinnnes2su0ara1nn6ecereregesacroodvvieenrigieisnsrseullraaattneecddectootohvtheerarrgeesespiuisrnatdtoeorrr mmtwaaosskkp/soalbsiebcseeststo,oss3lMitigrgaeatvtiieoornnewwdaatsss c$rroee4vcceemeriivivalaalgibboellneeu.nffAdooerrsrttahhteerheeiisnnupssluutorroaanfnlccaeeifoirrfneeccacceloorevavtereabrsriiiinteerssaitrlsieoaolnatvteeeddndetctfioosairnroesdnsppoiinierrarJotuornrsemm2raa0se1sk6/.aarsseObbgneeascsrttdeooissnthglgiotaisingetsaicutilrooaannnncbbseyyfcSo$o33vc55eormmavigilelellioruonnan.d.ageTTrerehhteerweCCosoopvmmoeplpdiaca.nineyhyse,iiss3sCMseoeemerkkpeiivannenggrysewdililts Hacovveecralglecutnedderstuhbestpaonlitciiaels oalflof fs remaininginsurecoverage certain insolvent and other insurers. for respmiarskaastbeostros clin. Once those claims for coverage are resolved, the Company will have collected substantially all of its remaining insurance coverage for respirator mask/asbestos claims. RespiratorMadUAsbestosLigaion --Aca Tashaclogies Respirator Mask/Asbestos l,itigation Aearo Technologies On Apel 1, 2008, subsidy of the Company purchased he sto of Acar Hlding Corp. th pret ofAcaTechncogies On April 1, 2008, a subsidiary of the Company purchased the stock of Aearo Holding Corp., the parent of Aearo Technologies Acar. Acaro manufactursend od various products, incuding persons proetin cqipmen, sch 3, car, head. ae, ("Aearo"). Aearo manufactured and sold various products, including personal protection equipment, such as eye, ear, head, face, ll and cern epiaony protection products fall and certain respiratory protection products. (AAAssmooefrfiDDceeaccneemOmpbbteeircra33l11,C, o22r00p11o66r,,atAAiceosanrr,ooWaaenmdde/roo-rLotathhmeebrreccrootmmpLapLnaCin.eiesAsOtthhCaatot rpprpree.vvaiioonuudssCllyyabooowwtnnCeeoddrpnaondrd ooperersat"teeCddaAAbcoestarro's'ssrreesnsppaiimaraettodordrebbfuuessniidnnaeensstsss, with (American Optical Corporation, Warner-Lambert LLC, AO Corp. and Cabot Corporation ("Cabot")) are named defendants, with mTeusilrteorcpor-oddeufecntdsanatnsd, sionkchdianmgagtehse CromopaAnayr.onin unntchrorudsesfenidatntsi fovralriocusdcopuertrssoinnswhnicuh lraoinmwolrkepgascussepoofNmIaSsSk n0d 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 aosrbkesptlosa,e,slicedo, other occupational dusts found in asbestos, silica-related, or other occupational dusts found in productsmanicured by aterdefendants defendants for alleged personal injury from products manufactured by other defendants of general nthe workplace exposures or generally in the to workplace. Asof Dece3m1b, 2e01r6, the Company, troughs AcarsubshiaddaccriualaorfS1y9 million for product sie id As of December 31, 2016, the Company, through its Aearo subsidiary, had accruals of $19 million for product liabilities and defen oss estedfocurrent andfuturAcar-rlted besos and slirelate sams. Respaasily for egal sows, aswel as defense costs related to current and future Aearo-related asbestos and silica-related claims. Responsibility for legal costs, as well as for serleanmdjeudngmetntss, curently shard nan informa rangement among Acar, Cabos, American Optical Corporation for settlements and judgments, is currently shared in an informal arrangement among Aearo, Cabot, American Optical Corporation and subsdiny of Warner Lambert and thes respective insurer (te Payor Gro"). Lisi s allocated mons the ptics and a subsidiary of Warner Lambert and their respective insurers (the "Payor Group"). Liability is allocated among the parties based onthe numofybearearch company sold respiratoryproducts unde he "AO Safty" brand andlor owned the AO Safety based on the number of years each company sold respiratory products under the "AO Safety" brand and/or owned the AO Safety Divisionof American Optical Corporation andthe lg years of exposure of the ndvidal pnt Acre' shareof he Division of American Optical Corporation and the alleged years of exposure of the individual plaintiff. Aearo's share of the contingent isi i ther imited by an grecment nerd nko between Acar and Cabot on uly 11,1995. Thi green contingent liability is further limited by an agreement entered into between Aearo and Cabot on July 11, 1995. This agreement provide that, slong a Acar paysto Cabot guartery foof 100.000, Cat ill esi esponsibility and abi for, nd provides that, so long as Aearo pays to Cabot a quarterly fee of $100,000, Cabot will retain responsibility and liability for, and indeAmcanriaitny, any product bility lininchingexposure 10 asbestos, slic, or slic productsfo respirator sod indemnify Aearo against, any product liability claims involving exposure to asbestos, silica, or silica products for respirators sold riot ul 1, 1995. Becofaheudiscet in deerminig how hong particu resistor remain te seamofsommerss prior to July 11, 1995. Because of the difficulty in determining how- long a particular respirator remains in the stream of commerce arbengsold Acro and Cabot heapled the agreement claims risingotof th alleged us of espiraors nolving after being sold, Aearo and Cabot have applied the agreement to claims arising out of the alleged use of respirators involving exposure to asbestos, sic or sca products prior January 1. 1997. With tes arrangement in place, Acso's ptt bility exposure to asbestos, silica or silica products prior to January 1, 1997. With these arrangements in place, Aearo's potential liability is limited to cxposars liege 0have arise fron th usof sprtors involving xp0ossbes stos, il, slic proccsn is limited to exposures alleged to have arisen from the use of respirators involving exposure to asbestos, silica, or silica products on orate January 1, 1997. Todate,Acar us cto oythe guairy fe. Acar or after January 1, 1997. To date, Aearo has elected to pay the quarterly fee. Aearo in114 22775500.00111144 TaofbColnees Table of Contents could ptenbieesxplosyedto addins ansfor sme art ofthe pr-y 11, 199 pid conradby its agrsement with Cabot could potentially be exposed to additional claims for some part of the pre-July 11, 1995 period covered by its agreement with Cabot SE Acar cet odiscomtine s priciption i sarang, of f Cabot is nolonger able 1 meets obits these ifAearo elects to discontinue its participation in this arrangement, or if Cabot is no longer able to meet its obligations in these matters. CI1nouMMnatar,rcchhM22a00s112s2,a, cCChaasbbeoottCCsSeScCCiCCnogordrpepocorlraaattriiaootnnoaarnnyddrCeClaiabebfooattsCCoorrphpoeorarsatctiiooonpneffoiilfleeCddaabllaoawwsssuuiiinttdaaeggmianniinstsytt AAobeclairagoatiiinontthsheeunSSdauepperertrhiiuoorr CCyoouurrt1t1o,offS1Su9uf9ff5foollkk County, Massachusetts seeking declaratory relief as to the scope of Cabot's indemnity obligations under ragatccchmeonft,conitnrcahcitngInw2h0e1t4,etrheCacboourtthgarsanetesd Adcsarb'islimtoytfioorncoorlswourkrer Jpoodcgunmeoncteonniotswso cclalimis,,abntd agreement, including whether Cabot has retained liability for coal workers' pneumoconiosis claims, and dstsheekeekniJiuennlgdy dd10aa1mm,uaa1lgg9ee9es5sofnfootrw o breach of contract. In 2014, the court granted Aearo's motion for summary judgment on two liuosdthecasupesceidfbicyaeixplosfeortoceorutlsmiknne odwunstcnodinerdiucstailtds.casunsdeCdabbyoresxpcolsauirmefo issues: the specific liability for certain known coal mine dust lawsuits; and Cabot's claim for claims, but declined to rule on lloccadtuostn. oFoflalboiwliintgyabdedeoenns allocation of liability between injris two injuries iadrsleilsomecavgoieevndreislryn.yg,csatthhuueespsepa,darrbtatyineedsexlfopirloeddsdeurnnreeeedwwtho-mmaceoovCatiilaoobmnnossisnffoeonrdsdusuusmntmomamtnadAarryciynajjjuuu,drdiggei msmelaenlneltte.ygIIenndrleFFyseepbcborarnuuusaasirerbyydle22bf00yo11re66x,l, pltthohbeseuiccrloeoiuuttrotyt silica rfuloedh ruled ediinnucsfftaoa.vvlFooormrlioolofnfweAAidcenuargsrtooadoloadnnwitsttiuhohieentssaseel ttdwweoo.r he 1993 sgrement Cabot has appealedwith dion expected remaining issues, and ordered that Cabot, and not Aearo, is solely in 2017. responsible for all liability for the coal mine dust lawsuits under the 1995 agreement. Cabot has appealed with a decision expected in 2017. Descloprcats mayoccurthat coud aft the simsofAcao's sbi. These developments incl, btar not iid bo: Developments may occur that could affect the estimate of Aearo's liabilities. These developments include, but are not limited to: 6)sianificant changes in the numbeorf ture lis, significant changes inthe avecosrtofaregsveig cms. (i) significant changes in the number of future claims, (ii) significant changes in the average cost of resolving claims, Gi iificnt changes i he egal oss of defending thsecaus, (1) Sificant changes i hemiad natofucarmes (iii) significant changes in the legal costs of defending these claims, (iv) significant changes in the mix and nature of claims received, (1 ial nd pele cutomes (i) significant changes i the aw and prosedare applicable 0 tes clas. received, (v) trial and appellate outcomes, (vi) significant changes in the law- and procedure applicable to these claims, (iy siiicant changesi he iin alot amon he co-defendant, (i) the Fanci viability ofrhoef he Payor (vii) significant changes in the liability allocation among the co-defendants, (viii) the financial viability of members of the Payor `Group cluding xhousionof vlble insurancesoverge iit, dio (3) 3 determination thst th nerpretationofthe Group including exhaustion of available insurance coverage limits, and/or (ix) a determination that the interpretation of the contractual obligatioonns which Acarohas estimated itsshar of abil i inaccurate. The Companycamdetermine the impact contractual obligations on which Aearo has estimated its share of liability is inaccurate. The Company cannot determine the impact ofthese pts developmenotns ts current stmtofAcar shaof rabileity fortes cxistianngd tur clam. IF of the 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 describedshove wer oossur, thactual amoof hsue snilti forxii ad fre caomuldsbe developments described above were to occur, the actual amount of these liabilities for existing and future claims could be [A ---- significantly larger than the amount accrued. Becauseofthe inher diffu in projectingthe numobfcemrs that have no ot ben asserted, th complexity ofallocating Because of the inherent difficulty in projecting the number of claims that have not yet been asserted, the complexity of allocating responsibilty for fate csimon thePayorGroup andtheseveral posible declopmentsthat may osc thtcouldallt the responsibility for future claims among the Payor Group, and the several possible developments that may occur that could affect the CuimatofAcao's bile, the Company sano ctmte te sont orangeofsnus by which Acar' iy mayexceed estimate of Aearo's liabilities, the Company cannot estimate the amount or range of amounts by which Aearo's liability may exceed he ceral heCompany bas stablished the accrual the Company has established. EsvicMaotens acndLaigsati]on Environmental Matters and l,itigation "wTTahhseetCeCowomatmpeaprnadyniy's'csshoaoprpegererasat,tiiooonnssseaarrseussbuubsbjjteeacctnt t0coencesnd,voitrhovenhmaeenndnltailnlgawawsnsdnadndidsprroesegauglloiaftoisononslsinidnlaconludddihinnaggzathrhodososeuesppNeerrattaasiineniinanggftoosraiieer ecmisibsiysoionnnsast.,ional, se, aawannnadddsetllreoocwccoaaarlltteasriuhdthioscocirerhitcaisuermgsseatasrar,onotcuuoennxsddi,cthhbseeuabswwsoitoraslrnlddco,e,tsaa,hnnaddendpprrretiihvvmeaaettheedaippnaasdrttltiiinoeoegsnf iiancnodthnhteedaimUUsipnnnioaitstteeaiddloonSS,fatastftooeerlssiadfasnadndodarabbhtrraooozaanaddor.d.foTTuohhsceeswosemaplslateaewnwsssseaaantnnfiddoorrrcneeeggafuuobllrlaaedttiiaboomynnassngappetrrsiooovvntioidasdele,,t,srtatae, under certain circumstances, a basis for the remediation of contamination, for restoration of or compensation for damages to natural Creasprteees,xpaneddfiotr epeirnscoonmspnlyoirngwainldhphroepesryadwamsangdereclgaiimos.nsT,hedCefoemnpdainngy phearssionn)cuinrju.rysnsdndwiplrlocperotyndanm0agceuc,ssco,tsnadnd 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 mreosdpiofnysiinbgiltisesbuasnidnceosmoppleyrawtiitohnscnalghvt ironmoefnical lrowsaond nreguleatsipono,nstieiCloimspaInnytsbeafsfosrttafobslishied, nfsdcnpvriordciucmaelnytlupdates, modifying its business operations in light of its environmental responsibilities. In its effort to satisfy its environmental iis latingfo cnirnmental stanofdpearfrormdansce forts operations worldwide 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. UUinbniddleeirtccyoerrtAtaaciitnnoeefnn1vv9iir8or0nomannmedenntsatmlillalawwess,s, aiinneccllwuudsdii,nnggttthhheeeCUUonnmiiptteeaddnySSatamtteaessybCCeoommopprierlehhyeennassniidvveeseEEvnnevrviairrloolynnmmaeenbnttaeall pRRieescspploolnnyssee,i, tCChoommpbepenernscasoatmtiipooannnaainnedds, for Liability Act of 1980 and similar state laws, the Company may be jointly and severally liable, typically with other companies, tidhenotisfitedoufrmeemrooduistoicosntoifonesn,vimronameonfstwahltiocntarmeinnattihonUntitcedurSttatoe, oatmwehricfhacmialiyshanadvasoofmesaebllyo.catPolae.sTehe Cformpoatnhey the costs of remediation of environmental contamination at current or former facilities and at oft-site locations. The Company hasfor has section uted Ensrmetal Lia identified numerous locations, most boifiwtehsicahnadreninitcheeUnRietcedeiSvtaabtelse,sa"t twhahticlh ilt msayfhranvfeosrommateiloianboilnityth.ePaleamseoreuffenrtthtoethseeers, section entitled "Environmental Liabilities and Insurance Receivables" that follows for information on the amount of the accrual. 1s115 22775500.00111155 TTaabbeleooffCConotnetenntsts. Eronmental Mates Environmental Matters AAU.ssS.pprrEeevnviivooiuursslolyynmpreeopnortrteePdr,o,tttehhceetiCCooonmmAppgaaennnyychyhaas(sEbbPeeAce)n,vsaonlodunintnarttimlyatcciooooopnpeaerraaattiingnggewwiinttohhfcoopnnoiggsooieiibnnlsggerrecevvniiieerwwossnbmbyyenlotoacllal,nssdttaetb,ee,sfetehddeeeranlf((pfrroiimefmaavcraiirlytyiottsuhhsee (UppCee.PSrlfF.ulOuEcSoin?rnvinairatotoeenrddmsiccemoonimmtlapaplorouPcunronodmsdte,spc,otiiuionnnnccdlluAsuddg(iiennPnggcFppyeCer()rElf.luPuoAoArr)oo)so,scatrtnaeadsnnuyi]lnltctcefoormnmspaptopioouhunnanasddlessa-gossueuunccthchdiseaesscipopsefieropffnollusicosnirrboMoloaeacyettana2nv0no0irca0ot,tenemh("eePPnFFCtaOOolAmAa"pn",a)d,nhppyeeenarffloltlhuluoocerrnfoogfoeoecccrttisamanaoneoffssvuusalclrffitooounnuraastetees a(pp"peePrpffFrluuOocosSrrmoo')aoc,ictoltaarynnsyiytmlwcciolooacmmrpacporooumunondpfdsot.suh. neTTpdhhhseea(s"ccePoo-FmmopCpuaastn'n)syy. mAscoessuaanassecrddeesmmmuealanntnu,oufffaaaictcstdtuuprcrhiieannasggsee-aadonnuddatlusdsimeicnniaggsitfohhneeoivvncaasMsutt ammrysaaj2injoo0rdrn0iitt0tyygh,otfohtafehttheCesosseimegcnpcoiaofmnmipycpaonnoutounnwlddossnowgwfiestirtihhmiisnnancuhfeamctiusrees approximately two years of the phase-out announcement, and ceased all manufacturing and the last significant use of this biyththethceoCfo2m0p0a8nyTphorliocgehs tcsoronignoginthg wfeelofeallmapenrasigsetmenetnatnadnbdiso-rscwumumlaattrilvecommatpeorsiailtsothn dCeonmtpiatniyocnopnrtociesnse0s by the end of 2008. Through its ongoing life cycle management and its raw- material composition identification processes cacshsoosnecomticoaiilsatttoereyrdd with the Company's policies covering the use of all iprmociesnseesthpropdurcetsse,ncaenodfcwarstiessePaFmsC. in purchased eliminate the presence of certain PFCs in purchased materials persistent materials ora byproducts insomeof3M's urochemical manufacturing and bio-accumulative materials, the Company continues to control or as byproducts in some of 3M's fluorochemical manufacturing or processes, products, and waste streams. RRieneggtuumllaaatttooorryynaaaccbtoitdviiietvsie.isTcchooennscceeermanicinntggivPPiFFnOOiAAncaalnnuddde/oorgr PPaFFOOtSS cchooofnemtinipruonesiuiinnrentthheaegnUUdnniuittseeddiSSnitfatotsre,sm,aEtEuiuroro,oppseeakannsddeleslessemnwehhnoetrre,s, aasdnddcbobneosfiordreercacterirotanninof reirrneaetgueuslrlntiaaottoriProRyOynaaalpppbproraoodnaaidcechsht.eesssT..ehlIIeannstOeOecdactctsootubibvbeesirtrtiea22ns00c11ie6n6s,c,luutthnhddeeeeEErgauatrrthooheppeerEeiaaUnnn'gsCCooRofmmeEmxmAipsCiosssHsiuioorRenneagnnnsodoltitufiiiseodednitnt(hhfReeoegrW WimostoarrtrlailotddiTnoT,rnr,araidsdvkeeaalOOsursraggetasainsnoimzniza,eatntiiAtoo,unnatnohodoffacraoiddnsrrsaaaifdttteirraroeaenggtiuu,dollnaattioioofnn to to hrRReeesnssttrtrri2icicc5tttPiipooFnrnOtooAffpCCoahrnhedebmmiiitcsilaclraosel)lsai.)nt.eacIdfdosaoudnpbotsspettaidend,tc,etutoshhcefurnartedhtlgeeursrltaahtsteiiuoobEnnstUwwan'osocuueRlsld,dEArrieenCssttmHrriiiccRtrt ePPegFFsuOO,laAAtaionaandnnddi(Rnfiteassgirrileeslltearaa.tteteiddoAnssx,utbEbhsvetaadlnsauctaeattsibotatnoosa,eccoAoonfnunctcehs ecnontrtrirazeatatiitooiosonnfi nssb,on0atonhdgrcreehc taietercr as than 25 parts per billion in constituents of other substances, in mixtures, and in articles. As the database of studies of both chemicals aFebrxuparaynd2e0d14.,thteheEEPPAAbansideevdcloepevdihlapiherltelvocfitsededorcwautmehnutmsansuertmahrzlincgsthdoacvuamieabnltes dfoar PfFrOoAm. tahnedsePsROtSu.diThIen peer has expanded, the EPA has developed human health effects documents summarizing the available data from these studies. In Frrpeeervvbiierewiuwa-lrppyaoan2ne0eGll1u4mhp,etetrthseiinneEdAAPiuuAngguutisnhsteitt2i2pa00rt1o1e3vd4.i.seiIIxnontneM Marlnaaaylylev22pe00el1e1s6r6c,,rsetttvhaiheelwiEEs-PPhoAAefdaiantbnsnyndootruuahnefnctcEehedPudmAlfiafinentti2hme0ae9lthehoesfaetlf4thfhea0cadtdsipvsdriososorcruypymrlIeevnrvteesilssfooffroorrPfPFPoFOFPOOAFAAOanasAdnnddaPnPPFdFOF2OOS0SS.0Tpathat er770s0ppeppeaarrrrttss per trillion (superseding the provisional levels established by the EPA in 2009 of 400 parts per trillion for PFOA and 200 parts per lHiifeotinmefobrePlEGaSd)viWsohreyreforPFPOFAOAanadndPEPOFOSSacromfboiunndedtogelthser,TE0PpAarrtsecpoermmleinnds.thLatihfeeeconhceeanlttrhaatiosnsobe,adwhdilteongeother, and the trillion for PFOS). Where PFOA and PFOS are found together, EPA recommends that the concentrations be added together, and the ealeinnfrlefvotsiermscaaeebaflhboeele,ap,lutsshbeelravivdceevciosassnsosgrguyuumiifpddotaarinnPoccnFee.OasnnAddaaranrcdefbbPeelFnnOrccShh1mm0caoacrrmokklsbslfiefnooterrddedxeiespttoeeasrrlusmmoriienn7ii0innnggpfoaiirrfftmsccaotpnoiecornenutnrnitlcdrlaieotreino.ntnLhsoeitoffefStcaicifhmheeeoemmDihrniciecanaaslklltssihningadttWvaaapiptsowewrraaiettAest,tr w,ffrhootimhmleeppEnuuoPbbtlAliiccpuuwbtilililisteihesesd oaobnrneiM Mscaaafyyewa22fto,.er22rp00su11b22yliaascitlcissottsnoosffuuumunnprrptegigoufunpoll.datIttlenedcdamnissiuuebbnfessfetotatarnrnthcctoeessec,xoiitnlnalccenllctuuotddfeiitnxnhgpgeoisssrixuxorsePPuFFirCnCrsfso,n,rcmrreeeaq.tuiioiTnrnehedruonttouodgbebhreetJhmmaoeoynnSi2iatt0fooe1rr6eeD,ddrtiddnhuukerriiiEnnngPgAW tthhereaetpppeoererrrAtiioeocdddt,r22te0h0s1e1u3l3E-t22Po00Ar1155p4ubb9byy0li9shed public water system suppliers to determine the extent of their occurrence. Through July 2016, the EPA reported results for 4,909 1Pudbl4i6c ewaxtceeredsuhpeteivesliofonriPdFeO.. ABastedeointlhe a2d0v1i6soriy mseedhbaylElPdAsinSoe.pte1m3bpeurbl2i0c1w6actneasubppolirestexa ceed theoh fldvrienkfiorni gPwFaOtAer public water supplies nationwide. Based on the 2016 lifetime health advisory, 13 public water supplies exceed the level for PFOA o`asrannmdpmolp4rle6eessesxssactaamettpeeedlddetttshhhseaaottlle66ev5cetlpbeufdlobrldiiPcurFwwiOanatStee.rtrAhsseuutpeppecplrhliiinceoissdcahh2laa0dda1d2eev-xxi2ccs0oee1eer5yddeeaidsdnsdtuthdheeeodccnboooymmtbEbniPiennAceeeddisnllseeSavvreeelpyl tfferoomrrfbPPelFFrOO2cA0Aur1raa6ennnoddtncPPlFFoaOObSnoS.rd.aTtTiohhrteeyossieaefnoretaehlnslyeussslsitsspaoarfrleedbirbiaanswkseaidnteegoodrnnwoaatnneeer oprimeosre.saEmPpAlreespcoorltliencgteddocdsurniontgdeny th the period s2c01a2r-e20s1o5ftanhde PFOA do not and PFOS in the pic water supplies. 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. "TPTFhhCee-CCcooonmmtpspaiannnyiyngiiscwcoaosnnttitnsuioicnnigat0toemmdaakikete hpprrmooaggnrearslescstisnurnitissnwwgoororkpk,e, ruuantndiedor anthhestee hsseuuppDeeerrcvvaiitssuiioro,nnoAoflfsssbtaaatemesre,eggaCulolttaotsrogsres,, Gt1oroaavddedd,rreMesiss nitsoHhtiiss,ttoorraiince dddiissppoossaall of of Cordon, los plants PFC-containing waste associated with manufacturing operations at the Decatur, Alabama, Cottage Grove, Minnesota, and Cordova, Illinois plants. AAEnssvppirrreeovvniimooeuunsstllayylpreMopaornreateg,de,mtthehCneotCm(opmapAnanyyDceonateEerdreddMnisnot)ohaevvpoorlleuusnntetanarcryyeoerfemmPeeFsdiCiaslniatcothioennlaaggtrreeesmtmheeenCntot mwwiptihttahhentAyh'elsAsalabnbfaamcstauDDrpeipanargritmfcseacntitlooyffin DeED`cneaavctsaiurtoturnr,e,mAArellnasttbrabaelaamM nt.ama.ennPPatuugrpresslmuuaanaentnnttlt0t(odAaDsppEeecMromrn)tiittaoiissnausidunedegdrdePsbbFsyyCtshAAeDiDnpEErfM eMesde,nsfocoretr aaosppfppPrrDFooexCxciisammtaiunatrteetlhclyyeittswwo.eielnntatytyAstlhycleeaearCrsrs,o,emtthhvpeeaiCCnoyo'momsfppmtaahnanenyyuaiifvnanciccootlurrbrppioolnrrgaaottpfeeatddciioiilntisstsy in dds wastewater treatment plant sludge containing PFCs in fields at its Decatur facility. After a review- of the available options to address tlhoedpgreesiennccoerpoofraPtiFoCn anrtheeosnsilt,heAmDaEnuMfaacgteudrsithtntegtwhielphrsewfbesreeqduemnet gdriouondnwaotpertomigsra1tiuosnecaomntuoltnldaraeypseevnertr. the omer the presence of PFCs in the soil, ADEM agreed that the preferred remediation option is to use a multilayer cap over the former sIlmupdlgeemeinntcaotrpioonraotfiohn tarepalsanocnonthteinmuaenaufnadctiuerxinpgecsitteedwoithbosucbosmepqlueetnetdgrionu2n0d1w%ater migration controls and treatment. Implementation of that plan continues and is expected to be completed in 2018. c"TThhheeoCCsoomemppaMananyyy cc2o0on0tn7intSueceslttmooewwnootrrkkAgwwriitethhemttheheentM MisinnndneeCssooonttsaaePPnootllllOuurttdiioeonnr CCooonanttrrdoollsAAggehenneccypyr((eMsMePPnCCceAAo))fpcpausrrssuaaanntPtFtoCstthihenteehrrmemsssoooiff thshneedpprreorvuiovnusidlyer disclosed May 2007 Settlement Agreement and Consent Order to address the presence of certain PFCs in the soil and groundwater CaottoargmeerGrdoivsep,osaMlinsinteestinaWUansdheirnghoisn aCgoruenetmye,ntM,inthnesCosmtpaan(yO'sskdapleen3cndiWloubary) adat the Company's manufacturing ality a 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 16116 22775500.00111166 TabeofComets Table of Contents ooobrblaliilggaeattiioonnss iindclknuidenc(gi))elevwvaaaltuleuuraattudiipnnoggneredalesaeesesisoofnfcceearrnttyaaiinvn ePPlFFCCessxcffreroeomdmintthhgeesHsesasiitlteeslsaannBddaspperrdooppVooassliiunneggr(reeHssBppooVnn)sseeosarcetHioiennsa;ls(i)iR)ippsrrkoovLviiiddmiiinntgg(tHreRtaLmtm"e)enntt C(o(Gior.een.a.s,ltutetmhrhpentaaaitmriovonoeuuondnvtrteinroofkfiaantgccihhweenmameiteic)craaflulopiionncnredriradtinkaekiinnitnnifPggyFiwWnCgaatetafrnorydeewtltehrevirmecmilhinenexeHcddeEebbNdyyianthnhgeedaoM MrHiinennaneleRtsLhsootBtaaeaxsDDiesedtepsVaaaratlmrueernne(st"uoeHolftfBoHHfVcee"oaa)nltltohar((mHMienMDaalHtDthi)oIRtonoibs)bfkereoLssmiamffteihteffso(oe"rrHshhRtuuemLm:a"a)nn (Gic(ioii)in)ssrrhueeammrmipeendtdigioiaanittniionfnvoggreimdrdaaeetninliotfiinefeiteiwdmditessh)oouuftrorhccreeecsMseoForftfaCoionAtthhPeaeFrbr CoPPusFFtCCfcoesrratawtat hitthnihcepehseseralsslHiiutteBossrVittnhaaaatnttedaad/rroceeronnHmooptRt oLccuooennnxttdrriossotllslDeeuaddrsibbanyygreaa2sct0uti0iloot8nn,ossfttocohoenrrMeetammPmeeCdidinAiaaatttiseeoPnPuFFfdOrOoAAmfoaartnmnhaddelsPPedFFesOOcitiSeSs;s;i;oannnsdd `A(aiaudvdgo)ouppsstthitinangr2gin0rreg0emm9ienedtfdiohiaearlmlMooaPppttitCoiionoAnnwssiifstoohrerttdthhheeeM fffooPorrmCmnaAelrdaddibeisscoppiuosotsisacoalenlriatsaidttienossppiiiennnrgW fWlaurasoeshmrhiienindnagigtatetloodnnocpCoComoouunnptnsoytu,yFn,odrM Msti.hinnDneuCesrsoioonmtgtap2a((0OnO0yan8ksk,datCahlloeeeaaMagnnPdedCW WGAoroooiodsvbdseuubreumydray)nf,)uo.frIImanncatludriencgisions AaffaancucdiiglliWuittysoy.to.2dDD0buu0arr9iri,nnytgghsettihhtM eee.ssPp3pCriiMAnngcisoaasnnmuddmedessunuamcmfeommdremerrtoaoelffdr22ee00c11di0s0i,i,oan33lMMaodpbboteepiggtoiaannnngtiitrmmehpmpelleeeOdmmsieaeknlndtotisipnnltggioithnhtsee faiaogrrraeteheededu2Cu0ppo1oo0mn.nprrAaeetnmmycee'adsdciiCahalolltooatcappagttieoiionGonsranotatvthethhremeCeoaCmntooutsdftaaiggceetoupGGriirnrooognvvsee `waWnwoedeorredWbcreuoocrooydmmbsmumtreeyen.nsdidaetendesdb.bdyt3yhMetthyheecaCorComommmnpaepannancnyeoydpeaatrnnhaddetiaaroepnmpparleopdvmieaerldnboiobypcytnittaohhnneecaMMetPPtmhCCdeAA.eO. aRRkReedemmameleededdiissiiaatttteiiiooionnnnlwwawotoierrlkk2c0ohh1naat0ssi. nbbAueeteenseatcccoohhmmeplopiclCeeaottteotioddangaaettththGehererOoeOavmekasedkiddatialadlleeauoanpnntddiogns 207,Woodbury sites, and they are in an operational maintenance mode. Remediation will continue at the Cottage Grove site during 2017. 1 August 2014 the lini EPA sproved request by the Company 1 shriounh der management roc t ts In August 2014, the Illinois EPA approved a request by the Company to establish a groundwater management zone at its manufacturing fait in Cordova, nis, which nlades cngong pumpingof mci site groundwater, groundwater manufacturing facility in Cordova, Illinois, which includes ongoing pumping of impacted site groundwater, groundwater monitoring and rutin poringofrel, monitoring and routine reporting of results. b"TThhee kCCoommpepagannayydiccnaanngnnouotthppreecddiictt owwhhaattmaaodddrdiitptthiioeocnnoaolnsrreeeggquuuulleaanttoocnrreyysaoaccftdtiaioonnnyss sasuricsnhingsgeiflrnosom. ththe Fveging foregoing rosesdings proceedings and and setivitie, activities, ny, if any, may may be taken regarding such compounds or the consequences of any such actions. -------- Environmental Litigation AAAlassbpparraeenvviiootuusesllyy Srreepp.oorrJtteeddc, aaf)foo,rrmmseekrrieemmnppluloonyyseteeaeteflidldeaddmaappguuerrsppooarrnttdeeddaclllalassgssiaanccttitioohnna atlahwevspuslitaiiinnn22s0000s22ufinfnetrthheedeCfCisrirc,cuuinitt CCeoouurnrttoofifMsMok,rogrsguaabnnliCCioocuuannlttyy,, Alabama (the St. John case), seeking unstated damages and alleging that the plaintiffs suffered fear, increased risk, subclinical imnajnuurifeasc,taunrdinpgrofpueiry.daTmhaegceourronin e2x00p8osgreattocedrtthienCopmpearnly'osromchiemoicaoldsiaosmnairsthtseh nCaommepdapnyl'asiDna'tpue,rsAolnaabnamar, related injuries, and property damage from exposure to certain perfluorochemicals at or near the Company's Decatur, Alabama, manufacturing facility. liisimon hceoabraseiftlhetd claims on the basis that Tsasuunhcceahhccmocleluanariditmmeisnds a2acr0oeem0bp5balaragrerireanddntbtbeiyndytNtthhhoeeevxeCexcmocblmleouprsiaiiv2n0tiyt0yy'6s,ppmrriooovvttiiiiossininoogntnotss ohdofifstmhchaiesssessttatfathoet'eesp'nrsWoaoW pmerroektdryekperdlrsausimnCCatoiofgmmfpe"epcsnelpnsieasrmatstsioiooonnnanlbAAiecncbttja.ulrTTyfhh-oreefelaa.ted Cpoumrpplaoirntt plaintiffs' purported cccallodaaudssinssonsoegfflearfdseidlsieiiddtdineoantnntasslaamadndeedfnepdpnrerooddpapecnerotrtt,myyipoonlwacwilnnnuetderiisrnnigisNnBottFhhv]eeemWvviaibccsieitnnriei2ttyy0Mo0aof6nf,athhlgieememDDiteieanncgttattuyuhreppclslaaannste.t.totIofnJpeJArulonapmebear22tm00yas11,d5,a,mtthLhpLaeCg!lepaBlcalFiianitnmiWfasfsssotfFniellebMddeahaaannnlafaaogmmfeeeannmddeeeonddft complaint adding additional defendants, including BFI Waste Management Systems of Alabama, LLC; BFI Waste Management of CNoourntht,AmAelraibcamaaL, C4:athDe eCicytofUDseecst, Als: Morgan Count. Alabama: Municip Uliies Boardof Decatur, and Morgan 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. cI1no0m.22p00e00n5,s,attthhoeerjyuddsggned iipnnunaitssieevcceodonnaddmppauugrrepposorrittneeoddlccslliaasnsssgaaltcetiioognneIladwawsmuiaigteffiledodtbbhyyeitthphrrreoeeperrerestsiiyddeernntotssmoofefMmMiosorsrgigoaannnsoCCofoucunentrtytya,,iAAnllpaaebbraafmmlaua,c,rssoeecechkkeiimnniggcauulnnssttaatteedd CCcchoooammmnppdpooeiununsnaddctssaosrfreyr)ooammgnrdttahhnpeetuCeCndoiotmhimpveeapnCadynoa'ymms'nsapgDDaeneesycciasnttvum,oro,ltvAAiilnolasngbb1aaa0lmmlaesag,b,emmdtaadnhnuaeufmfacaacacgtteeuur,rtiioTnntgghTefacaicrcipleirtoyptetphhraattyttiffforonorrmmmteerherllmeyycimmsasaainoonunufsfahacocitftduucrrepeeredtdanittdnhhionopsgesertfcchloouemmorprepoosocouuhlnnuedtdmissoic(n(tahholefeclass Chandler case) granted the Company's motion to abate the case, effectively putting the case on hold pending the resolution of class cpoertsficcaatiinojnursiueseasnidnptrhoepeSr.tyJdoahnmacgase.onDesbpeilteohe shtea,nalmeadnltilosd aandamtehendmeedmbceomrpsloafintpsucrpkoirtneddaclmaasgsesNoofruatlhleergeadction in certification issues in the St. John case. Despite the stay, plaintiffs filed an amended complaint seeking damages for alleged hpeerscoanseasl expected unless and unl he stay is ed. 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. CIInnouFFneetbbsrruutaarhryye2S20t0o00v99e,r,racaeressesi)desinetodoiffFneFrraacnnnokmkltpliiennnsCCaooutunotnryty.y,dAAalmlaaabbgaaemmsaa,a,fnfldileeiddnjaaupnpcutrirpveoprrteeodlcecrlblaaassissseaadecctotidononthlleawasspuliittciantitthohene CCbiyirrcchuueiittDCCecoauotrutroofuwfFFriarrantnkksltliinn wwCPaFoassuOttnSeetwwyaaant(tdteehrreoattrSheemtaortvempeenrerncftalpspulelao)anrnstoteoceohfkfeiiwwncagalssstct.eoewwmTaahptteeeernrsntrarateemoaaretmymdepdenanatmtnssaliguedlsgseaeuntetodokfdsifanarojrugmmrnllpcaaertnniveddesaannrnedtdliggerrfcoablssaassssllsaeanodnfddosslninlntthptheheereaspasoptnalesitcewatitthhitoaahtntinaabltlylehlgetheSeedtylDyeccocooafnntAtutaarliinnubtPPilaFFitOOnyA'As,w, h PhhSaaFuvvpOeerSehhmaaaeddndCPPouFFtOrOhAteA.r,oprPPedFFrefOOrlSeuSd,o,arhaonnecddhcetoamsthheicermar lpps.eetrrTfflhulreoornroaocmrsheohedmemmpiFiclraacalissnnsktrrilefillfenssaseCseeoekuddsnootrtorydderteepoppoMorseosisirtetegnddat noaonnCclottahuhsenesitiroyppfrraoIolnplgeepMnreatyyr.ys.oII2nnn0s1M M0wa,airtrhcscoihhnns22tih00s1e1t0e0S,n,ttatththweeeiAoAtlflhAaatblaamhmbaaaanmdainwghoof Supreme Court ordered the case transferred from Franklin choerfoithaetriomnatsien,sthien MthoergStanJoCbonunatvye.Cit Court sbetod the other matters, the Morgan County Circuit Court abated this case County to this case, puting to hod Morgan County. putting it on hold pending te reslationofte In May 2010, consistent with pending the resolution of the cssits handling class of certification issues in the St. John case. rl117 22775500.00111177 TaofbColnees Table of Contents In Ovtober201, WestMorgan:Eat Lawrence Wate&rSewerAuthority (Water Authority) ledan individual complsnt ais In October 2015, West Morgan-East Lawrence Water & Sewer Authority (Water Authority) filed an individual complaint against 3M Company, Dyneon, LC, ad Dakin Arr. In. inthe US. District Court orthe Northern Distof Alabama. The 3M Company, Dyneon, L.L.C, and Daikin America, Inc., in the U.S. District Court for the Northern District of Alabama. The Complain alo includes representative lini hobroagh the complaint o beofthlemsellves, and clas fall owners sd complaint also includes representative plaintiffs who brought the complaint on behalf of themselves, and a class of all owners and posesofsprooprertsy ho use wate providebdy heWater Authority and fv loc ater orks whic he Water Authority possessors of property who use water provided by the Water Authority and five local water works to which the Water Authority `Suwpateprclolicteivsl the "Water Use"). The complainseeks compensatoarnyd pivdamagesand njncive reli supplies water (collectively, the "Water Utilities"). The complaint seeks compensatory and punitive damages and injunctive relief asd onan ht the defends chemicals, including PFOA. nd PFOS from tc manufacturingprocesses in Decatur, based on allegations that the defendants' chemicals, including PFOA and PFOS from their manufacturing processes in Decatur, have cotammatod the te in the Tennesse Riva he wat intake, ad hatth chil cant be remo bythe war have contaminated the water in the Tennessee River at the water intake, and that the chemicals cannot be removed by the water ireatmnt processes lized by the Water Author. InSeptember2016, th cour rated 3M's oto todismiss lain treatment processes utilized by the Water Authority. In September 2016, the court granted 3M's motion to dismiss plaintiffs' rsp clin with prejdice, acelin lim orpersonal njurics, and priate nunc claims, snd denied the moto 10 trespass claims with prejudice, negligence claims for personal injuries, and private nuisance claims, and denied the motion to isis the lini' negligence claims orproperty damage, plc nuance, abatementof usanc, battery and anfonness. dismiss the plaintiffs' negligence claims for property damage, public nuisance, abatement of nuisance, battery and wantonness. tIInhneJJuNunoneert22h001e16r6,,DtthhieesTTteennonnfeesAssseleedRRbiivvaeerrakkgeeeiepnpesert,r,3IIMnn:c.. B((FRRiIivveWerarkkseeteepepereS)r,)y, sa nntoonno--fpprAroolffibittaccnoosrrp.poorrahatetiioConin,,yfFoiilfleeddDeaacallatawuwrss,uuiitAtlniantbthahemeaUU:s.Sa.n. dDDthiistrsiMctiCCcooiuurprttlffoorr CtUUhotentilsNieetioresvrstahtBBeiooroananrrDddanioosdfftrDDiRceeectccaootavfutuerA,rr,lyaMMbAoaocrmrtggiaaannnagcCCoaoaionunusncntett3tyyiM,oAA;nllBaawbFbitaaIhmmWata.ha.esTTtdehhieesSpcycooossmtmaeplmploalsfaiiconnefttrAtalalleliaenbggaePsmsFaCtth;saatthttetrhhoeCeuidgdtyeehffoeetfnnheddDiaarenncottaswstnuvveriir,oosAllahalttiaeepbddaattmnhhdeoa;oRRpeaeenssrodoauuttrhriccoeeenMoufntichiepal aCrrneedososrnppeseecctrttviihvvaeeetivossiinitteersas.o.nndTThemhcReeoenccmtoopvmaelnpradylaitAinhnactttfouiRtnrihtchevoerncr naarelkllcetslgioeesnhspeswssruuicctshhhptplrhraeacrctdtiiicsceapesnosdsmmaailaylyolfppccrreeeorssteeatnnitnteaaPnfFosiiCmmslmmtihinrnreoenunrtgthaaannrthddsessiburubolbswsthatnnaretrnimsa]hl cieepannuaddsnaaednndggobeepyrremmdreaeentnfitotennt0odoahhfneettah'lletthiir re and/or the environment and that Riverkeeper has suffered and will continue to suffer irreparable 1edlbaetse thheaetnhdeancgoemrplmaeinnttulnolceksssmheerciourt grants the requested elie, incldin declaratory and to abate the endangerment unless the court grants the requested relief, including declaratory and injunctive rele. harm caused by injunctive relief. The Company defendants' failure The Company believes that the complaint lacks merit. tIInnhJJuuClilyyty2200s11f66f,,rttehhdee idCatitmyyaoogfefLsLaafkkreeomElldmrmionkfFiiilnleegddwaaaJlarwussuiait piinnstthhceeoUUn.t.SSa..miDDinisastttrreiicdcttiCCtoouhurrtPt FffooCrr,tthhieencDDliuissdttirrniigccttocoofftMMsiinnoncnessooottma aasggaaiilnnsesttna33M tMivalellsieognuinrggcetthshaottf aking vate the City suffered damages from drinking water supplies contaminated with PFCs, including costs to construct alternative sources of drinking water. AhAses ooDffiDtDieecccteemmobfbCeeorrl33o11r,,a22d00o1166a,,ndsseefvvoeeunnr ppaurrhppeoorrFteeaddstccellaarssssDiaascctttriioocantssowfwePernreensffiyllveedadnaaiggsaai.innssTtth33eMMcoaamnnpddlooatiehnersr sddeeefkefnudenasnnttadstiseinnd UdUSa.S.m.agDDeiisstsarintcdt CCaolouuerrrtt - - hrthree in in `trrhweeaemmteeDedrdisieisuestprs,pi,lcsist euoscfhuCcaaososnmltocmeardeamiddihcniocaaaaltlnemdmdofownoiniuttitrohoricrniiennrtgthg,aeinaEnndadPsFtaaeCllrlsenggueDesithshdatartiticnttthAhoeeqpfupPlelaeoainnuintssinfyFfslsivlsasmuunffiFfafeoe. rrrTeemdhdienppegecrroFssmooonnpaaalmlal iiin(nntAjjsuFursrFyeyFea)aknnauddcnppusrrrtooatptpeeeendrrtttdyyoarddmafaamomgraaemggseeerasnffirdrotomopmrthtddersrriinnakkniidnnggir for mitary bass cat inColorado andPons water supplies contaminated with certain PFCs used ania. in Aqueous Film Forming Foam (AFFF) at current or former airports and air force military bases located in Colorado and Pennsylvania. IEInntoSSwteapehtmeiCmbobueenrrty22001A166,,ltthhese W WaaatgteaerirnW Wstoor3rkkMssaannndddvSSaeerwwieoeurrsBocouaprddtoofmftatnhhueefCaCictittyuyroeofrfsGG.adaTsdhdseednec,no,mAApllalabianmsaa lflilleddgaaesllsatawwPssFuiCittsninrttohheme CCtieirrdcceuuifitetnCCdooaunurtrtts'ooff Etowah County Alabama against 3M and various carpet manufacturers. The complaint alleges that PFCs from afancdilpietersacioonntaomifanaitlerdathieonCsoysotsem,Rievexraptes1nr0wmwiatleosPuFCrlfeovrelsd,kaindnogstwaptroefritasndnsdcskusesu.nstated damages facilities contaminated the Coosa River as its raw- water source for drinking water and seeks unstated damages forthe for te ntlaon defendants' the installation and operation of a filtration system, expenses to monitor PFC levels, and lost profits and sales. IMInaNNsosovavecenhmbobesercrt220s0e11c6,k,ittnhhgee uTTnoostwwanntoeodffcBBoamarprnnessnttsaaabbtlleoe,ryM Maaasnsssdaapchhuussieetttss fdlialedmdagaaennsiinnaddidivviibdduuaeall aalctteiioofnn aingatithhneestUU.S3.SM.DDaisidtsrtrtiichctetrCCsoouuprrttpffoolrr ttihhoeefeDDAriiFsFtssrFitctfooofrf aaM alslllsaeeosggcseeiaddacthcceuoodsnnetwttiaattmmshiistnnheaaettkiiioionnnngveoousfftnitshghteaeattiaeaoqdnfu,ciofrremer pssoeuenpnpsptailty,onirnrgygeamddnerkdidniipknunininggoitniwwvneaotdderrammtooonattighoteeosrHHaiynynadgannoonnftiihssderwrwiarnatekteleiirrnegfssyaywsgastateteimn.rs.stTTu3hphMpeelitoaeonswwdnanolsstlhegkeekerssdsuyt0opcprroleeincectoroasvmneoierfncoaAotsFsetsFdsFviftohr CcaceoesrsurttonaactiiinnaftPPoerFEdtCChwsesituDuhissseetthddreiiicnnitnoAAvfFeFsFMFt.aiFgs.asIItnincohJnJau,ansntureaeartarytsym2s2e0e0n1c1t7k,7.i,rnettghmhCueoendCsuitoanauttitnoetsdny,coooaffmnpdBBeaamnrrsmnoassntitiaostbobrlrlyei,n,sgMMnadoaspfsssdcnarhcinhudkusisenaetgtstmsw,, aalftielegerdseauaanpnnspdiilninedtdsiihvvaiirlddlueulagalledecalcyit(iocinonnncintnhatimthhnieegnaUUt.e.SSd,. Disc with District tCiinnohddueerrmmtsnnifuofipfripiccltahaiteteiiosoDnnoisafatnnriddctccAoooFnFfntftMrroiirbabasuulsttliaioecongnheuiidnsnecccttooosnnnntsneaeecmectiktiniionoangntiuwiontnitsohhtfacctellhadeaiimacmossmuaapssssesenrrstsiaeadtdoprgalygaiaaiinnnngdssdtprtuhhiennekitCCiionvogueunwndtatayytmebbayygett0hsheehaeTnTHdooywwosnntahoenofrfirBBsealawireansftse(atairnblyclse)lui)deaaimgn.anginsst 3M 3M and and other suppliers of AFFF for alleged contamination of the aquifer supplying drinking water to the Hyannis water system. In December 2010, the Ss ofMinnesota, by ts Atomey Gencrsl Lori Swanson, sting is pacity a rusticofthe tral In December 2010, the State of Minnesota, by its Attorney General Lori Swanson, acting in its capacity as trustee of the natural resourocf ehse Sst ofMinnesota, fled lawsuit Homepin County Dist Court agains 3M 1 recone damages ncloding resources of the State of Minnesota, filed a lawsuit in Hennepin County District Court against 3M to recover damages (including nspocifcd asst costs nd sonable atfoey's fxs forall joy , desc of, and los ofus ofstain of he unspecified assessment costs and reasonable attorney's fees) for alleged injury to, destruction of, and loss of use of certain of the Sts ntl resources under the Minnesota Environmental Response snd isility Act (ERLA) and the Minnesoa Wer State's natural resources under the Minnesota Environmental Response and Liability Act (MERLA) and the Minnesota Water Pollution Control Act (MWFCA), a well a Stun neisance and common clin frespas, mise, and negligence with Pollution Control Act (MWPCA), as well as statutory nuisance and common law-claims of trespass, nuisance, and negligence with respect othe preseonfce PFCs i he groundwater, sac water, sho other aqui 1s, and sediments (he "NRD Laws) respect to the presence of PFCs in the groundwater, surface water, fish or other aquatic life, and sediments (the "NRD Lawsuit"). "The Stat al sekdeclaruandteriMoERnLsA that 34 The State also seeks declarations under MERLA that 3M is us118 22775500.00111188 Table of Comes. Table of Contents responsible forall damages thSa may suei the turefo joistnaturel resources from easesof PECsin the responsible for all damages the State may suffer in the future for injuries to natural resources from releases of PFCs into the envionment, and under MWPCA hat 31 responsible for compensation fr fareloss odestinoffs, atete, and environment, and under MWPCA that 3M is responsible for compensation for future loss or destruction of fish, aquatic life, and thrdamagen other damages. cIInnomNNpoeonvvseametbmoerbryde2a0r1m1a201,,gttheheesaM MneedttrorotophpoeolrliitteaagnnalCC,ooudunenccciilll afFiirlleaeddtaaoarmmnydoiteiqoounittooabtilneetvelrevcen,neeiaannncddluadciconogmmpelpaalsaiionnnttdiibnnletthhaeetNNoRmRIeDDysLL"aawewss,usitfsoserceckkoiisnntggs andfe that htcMhoeeetmrMMpoepeerontlorsoiaptptloaoinrlytitCaaodnnuanmCCcaoiogluu'ensscniPalFnaaOdllSlloeedgtgiheesessrcithltweawigrlaiglllle, sbbdeeeocrrtleeahqrceuautiiorMreriddysst0aoinsadaispsespqectussiRtiaaavtbtelrsse,ommrieeenlicettlifimu,mdieeinnciignnlutttdhhhiengiffnusrrtteuaaerlesloaifntfiahtobhneleeaM MnadPtPtomCCriAAnneiyipmcso'apsfoneesceesess, for costs and fees that orefsatraicttitonsroeotest restrictions on SsM syyasesttttteermoom.pr.oyTTlichhtaeesnM MsCeetorturuoonnppdoceolirlli'isttMaaPnnEFCCORoouSAuncdniicfsliocl'r'hssraierengstreepsroevtnoensnttthcioeoontM,mmiosontstiiidsoosnniupnwpdaiassRbbitvaheaesre,MsdiinonodncinlcusssdeeoivvnteegsrraatEllhnttevhhiieenrooosrrtiniaeemlssel,,antitiinonacclnlluuRaddiniigdnnhggtmcscaooAimnmcttmemno(oanMnnEclaeaR.wAo-)fnnfaleogwgleiadgnteeeccnrlecat,rere,aatnatonmdrdyenatnd statutory claims under bequjittaboletheelifmoatgiionns1t equitable relief against Mn33MEMeRrffLoosrrA.PPfFFoOOIrnSSraJeasnapndnodanoosyttehh2ecr0ro1sPP2t,FsF,CC3anpp1doollaullnuunsttdiiwoeoenrnrteoohfdfe thtM hheeeinwwMnaaetetteseorrrsstoaaapEnnlddnivssnieredoCindmomiueennmnt'tseaoolnfofRthmtihgsepehtMlMsiisAisssnciistsss(niM ippdppEiilRRReAiidsv)ee3frro.or33udMnMetcrdldaicirddlatnanoooortny and l`oaSliblcejgehgiclintnrgtgoottthmhhaaetomttnhheoeeotM iMoenmettrotrooropepionolotlieittrfaavnnenCCweao.osutIunnecwnJialatnddeuiirssaccrehyhsaa2irr0ggm1eeess2n,PtP3FFpMCClssaant0nosswttnhhteeeroeM MdiaitssghsireissisMpuipplepstrirsoRRpiiaovlnreidtrasaannnadCdndodduiilssnocccchhailaal'rrssggcieeossamPPlpFFnCldCai-i-lsnclotosnna.tntaidAincnfciiionlnreggddissnalguuclddoyg,uoenntaMendr'dclsbbaiiiomo solids from one or more of its wastewater treatment plants onto agricultural lands and local area landfills. Accordingly, 3M's coeomapwlaaridnedagcaointnrsibtuhteiMoneatnrdaopppoolrtCconumnecnilt srkosmhthte iMehtercoooultanFiCnodsunhcitl,hiencSludtingcatodms'oafonsofundheerdaMmEaRgLeAs, acndk, complaint against the Metropolitan Council asks that if the court finds that the State is entitled to any of the damages it seeks, 3M 3M cbcNoeWonaPtwrCnibaArut.dtieoodanscfwforenooltmmrlibaaasunntdduionlandiaebabrniildsilttyaatpffupotooorrrrttythhioeennuM MmieseteatrnnrotocppefoarolonlimidttsaatnnohemCCoM mouunoenctnicroliLl'pa'ssolppirtrtaoonppooCrhrttoiiuoonnnooacaflills,srhehianasrcraeselusood,ffinddmgaaimmastaatagognerecnss,eaaayvwnsa'danrfrededgeeesldd,iotugoentntdhhceeeerS.M StataEtteRe LuuhnnAddo,eesarrnethdhkees dMecWlaPraCtAor,yaslwstelluansduenrdMeEr RstAa.tutory nuisance and common law-theories of trespass, nuisance, and negligence. 3M also seeks declaratory relief under MERA. OI1ncAtAoppberelirl 222000111222,,, 3h3MeM Fcfiiolleueddt aagrmmaonotttiieodon3ttoModdiismqouatailyoifnytttohhedeSiStsataatlteeitooyffMMCioinnicnnsegsoiototn'a'ssacccooouununsseselle,, CC0ovvhiinengStgoinit&en&aBBuurrlhliiennggS.,tLaLtLLePPan((dCCooCvvoiiinnngggttoionon).n.aIIpnnpesled chtOoheceutoccrobo'ueurdrrtit'2'sss0u1ddl2iiis,sfqiqtuhcuaeaaltiicfiioiocaunatrttiiooogdnnreaton.ottetdIhhne3OcM MMtiio'nsnbnnmeeresoost0itoo1an3CC,otoouuhrdrtetisooqMffuiAAnaplnpipefpeysaeolaCtslsao.S.vuiIInnpngtJutuoylny as counsel to the State and the State and Covington appealed 2C0o1r,tthgerMainnndesboottah CthoeurSttoafsApapnedalCosvaingfionf' pthee diisntilfor 2013, the Minnesota Court ofAppeals affirmed the district crepeorvvtui,eriwts's-doodffirsttqehhumeeaaddlnieefdccieicissdaiitoiothonnenoocoffatrstdhheeeer1.M MtIinihmneOcnsedcsoitoosttbtsareirCCto2ocu0uor1urt3trot,oftffhAAoepfppMupereaitlnahslnes.er.sIIponnrtaoAAcpSpeeeuridlplir22neg0m0s11e.4,T,ChttohehueerdtM MisgitinrrnaincnnetetsesocdototubaaroStStuhu1pp0trhr0eekemmiSeedtaCCetoeonu'ucsrrteatanaodifnfiCmtrhmoeevediddnigsinqtouppanala'istrtf,,picrereateitvtvieieoornrsneedfdoirinn apiisgasiruutn,essastanatdtrearpeehrmeeraasrnicidnanegtdiiinnntaghOOeclcctitaooesbbeee(rtreo22rt00h11e55.hd. eiIIsnntSrFitFceaetbbtcrroouuafuarrryMtyif22no0n0re11fs6u,o,rtttthahhe)eeriddpiirshotsrceieccetsdaocimonueugrorsst.urlTubehlseeddtdathihnsaatttrtiiCcCaotovlcvioinrunegrglittaoottonneodvkvmiiaooeltlvaaeittdereeddnwctthheheeeroppenrrootthfhfeeeassdsspiiieosorqnnsauaollanl'eeistfthihciiinaccttssieorrrenuoslltees against representing a client (here the State of Minnesota) in the same or substantially related matter where that person's interests aCorvimnagttornalbyecadscurss fourtthheer foruensdthsaotf3a0opmleceleratw(aMDd) bTyheddeilsiatyc0oauirtsn, tghowheevecr,oldiecn,ieOdt3h'esr amtioyti 0tidhiessogauasln,ifwyhich are materially adverse to the interests of a former client (3M). The district court, however, denied 3M's motion to disqualify ChTraeoddsviibbnedgeetcnotnsistobanyea,ceadtpuhpeeseenCndoiditminfnpuggarthnthhyeeercolfuouetutodcnnodusmettheoaonftthft3tM hhee iddRmiiasspmqqlsuiueaeadlyliliyffCiicwcoaauattniiiotvonyendsiDsbisesyut,erd,iechhltaaassyCoirrnueegrssututmomaegeadads.is. enArst rtCtrihoiaaevllicddnoagnetifeolinhhcaats.fsoOnnr ootbhtreeyyraeetactchbbteiefveeiinnttyssseeitndt..utI[hin1eaacrassyseeapd,aurwrtaiehteeiscbbh0utt S etrthpeheletaetCCeomodmbmapepcartain2noy0yn1,aa6tn,nhddefhfCoeororcmbboerupeaatacncyhghrfooaifnlfetccdeoodnsnuFtritatsceint the Ramsey County District Court against Covington for breach of its rmiotnigonfuotofeCaoevitnogaiomne'nsdpthrceosmtionno0f tphleeaSdpntiofvaMeidntaemaseges arising out of Covington's representation of the State of Minnesota in he NRID fiduciary the NRD Last. duties to Lawsuit. In In September 2016, the court granted 3M's motion for leave to amend the complaint to plead punitive damages. Forcnironmental ligation matter deseibed inhi sectionfo which ail, ay, has ben recorded, theCompany belies For environmental litigation matters described in this section for which a liability, if any, has been recorded, the Company believes the amount recoradewde,l a th posible ou or rng fos exof che cteblcshed sco not materi 0 he 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'sconsoled estofoperonos nancial condition. For hose matesforwhicha sityha ot been recorded, Company's consolidated results of operations or financial condition. For those matters for which a liability has not been recorded, the Company believe nysuch abt snoprobableand esimable ad the Company is not ableto simat posible os or the Company believes any such liability is not probable and estimable and the Company is not able to estimate a possible loss or angeof ossat his ime. range of loss at this time. Emronmental Liaison suraceReccvables Environmental Liabilities andInsurance Receivables AbAasssoeofdf DuDpeeoccneemnmbbevrea33lr11u,a,t22i00o11n6,o,ftthhceeCaCorommeppayannayyvahbialdadbrlreeeccfooarrcddteesddwilsitahbiirleeitsispeescotoff0$$3c3a8cmmhiiillnlidoionvfifdoruraelesssitimemaaatnteeddda""esennvvriirerocononmrmdeeenndttaarllelrreiememdeeddniiasattaiioonnnc""eccoossttss abrrenacedseecirdvesauabvpsloneanssibooalfenfye$se1vt1a$1 lmmumiaieltlilloio,onnn.so. fnTTcchhuererarCCeloonlmmtnlpypoaaannvtyyarrierleaccbotolhreraddnfssatclhtiisabcwiiolimittphsielrseetffsiooporrencrretoefmmtFoeeeddeiaaiaaictthbiiooiinnnldyccioosvsstittdussduiooaennlssaaoinntreunatdnhnidedsiCscacoolosmuoupnnairteenecddyo'rbbsdaacessidoissmrwmwelhihaetetennmdetthnihnetesy1u0arrareencppperlrooabbaaobbfllee and reasonably estimable, generally no later than the completion of feasibility studies or the Company's commitment to a plan of ahcitinodnp.arLtiysbeinlvtiierfoomeentssssetuddio,sasndoef ctmie aro hreenndoimtieo,n,pardteicpiepantdioinnovgnetlhasntd,fianaencbiaasleadbpirliitmyaorfy suypoonthnetrpnoatlently action. Liabilities for estimated costs of environmental remediation, depending on the site, are based primarily upon internal or third-party environmental studies, and estimates as to the number, participation level and financial viability of any other potentially Treaspbonlsiebalse pfaurtthee,r theextent fe contaminastndiothne natof ureqruireed remedial ction. TheCompanyaos esorded responsible parties, the extent of the contamination and the nature of required remedial actions. The Company adjusts recorded liabilities as further 1119 22775500.00111199 TabeofComets Table of Contents iminnfefoordrmmiaattaiioonnn ddfeoervvteehlleooapppssploiriccacibruclmuesmsastnteac,neccesusrccehhnatanlngygee.r. nTTghhieenCCguoompmppoaan2nyy0 eeexxappreescc.ttss hathat it it illwill poy pay the the amounts amounts cordedover recorded over heperiodsof the periods of remediation for the applicable sites, currently ranging up to 20 years. AsvoasfluoDafetDcieoecnmeombf ebcerur 33r11,l, y220011a66v,,iltthhaeebClCeoofmampctpasanntyyo hhiaamddplrreecmcoeornrdtdeetddh eliisSabbeiitlllitieieemssenooftf $$A22g99r smmeimillelliinootnn affonodr ""CooottnhhseeerrncetnoOviirrrodonenmmweientnthaatl hileialbMiiPlieCtiAse,s"" tbbhaaesserededmuuoppdoiosnnl an an Oaeaccvtntaiiloolunna,taaioggnrrieeeoenmfmecennuntrotrwew,niitthlhayAAaDwDveEalEiMllMa.b,lneapnrdfdeasc0tetosncaatoeddddiimrresptsshsleetmrrsaaoeccineeataatnmhdemosuSrneototstuloeonfmufdpepnenefttrnlfeAluugarottrirenitenhameasttCeoenoddtmccpaoonammdnppyCoo'uousnnnmdsdesasnniitnnOfddcrrrdtiinunerkrkiiiwnnnigggthwwiatahtlteeeirrMesssoPouuCrirAnccee,DssethicneatttrhhueeemrCCiedtitiyyalooff AAOWallaankbbddbaaamunlrea,y,,)Maa.nninddTnhCCeeosotoCttttoaaag,mgeepasarGnworyoenvlele,x,apsM Meipcinrntennseeteosnhtotcste,am,ionaansnthddeosaftsttotthiwelwoosapnfoedornrgmdmrioernurgdndiwdisiswplpolaostsaecalrlsassrtiittteehosseciirnCn otW Whmaeapnssahehnixnyitg'sntfomgunraCCnsooueuufanasntc.tyyt,u,ArM iMsnioginnfnfnaDoecsweiolicttaiee((sOmOsibankkd3eDd1araellcee2a0stau1nir6dd,, the Companys Woodbury). rTehceeiCvaobmlepfaonryienxsupreacntcsethraetcomveorsiteosfrtehleatsepden"diongewrilcl oncrcuormoevenr atheaneixtefo"ur vas S13 lin, years. As of December 31, 2016, the Company's receivable for insurance recoveries related to "other environmental liabilities" was $15 million. aIIttinids nidfifcofriaceulclrttctoontseositfmimapatlteiecttahhebelcceoostctnoofifreeonvvmiierrononanmlcenanttall ccnoodmmpprlielalaiaaatceinoaacnnnesdd,rrheemmeeeeddixiatatetiinooonnfggiievveernnnthhmeeeuunncnterctacioennttireasmirrneeaggtaairroddniinnsggdtthheethnieniteerxrppirreetntaactteioononf and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of Ttinetredmoesc)lecahnaunpgmesetihohdes iDnefvoerlmaotpieocnatasvmlabyolccreugrahrdtincgohueldenfveirtotmhCenotmsp]apnaysccoftuhetCeomnpeansy'ss.opiencrlaudtiingo.nnbdsutpnroodtucts alternative cleanup methods. Developments may occur that could affect the Company's current assessment, including, but not cil(iihm)i)aincctgehhedaasntnogi:egns(eciiia)snnfcoeehrnnaevvneiigmrreoeosnnnmtmineetnthnhtetaeoalrliinrrefegsoglrauamnltadaittipioooonnnlssi,acccvehha,aailnniaggnbecelelssuriidnenignppageerrrdemmfiinfisogssrstitihsbbleleeelenreevvvcieroloevsnesormfnsesapnptetueacrcilaiflifimiccecpcaooscmmtpeopofoutuhndneaddmsCsaoiignmeddspriaiGnnnikiy)in'nsggnoewpwetaretaarentrsidoasnvorsouelraecvnesids,n,pgoorror ducts; acaFninhanaalalnynygtctiieicacslaalilnvaaiaennbnddiflorrietreycmmeoemfddieioanitttiohotenhnepttoeoerctcihehensnniitaqqinuuadeelssp,;ro(e(lisi1vcp))ioenssssu,uiccibcnelecesslssupdaiinrinntaagellslleoofaccfnaaodttriitnsnhggitoieliareplbcailoryivttyernt1onoaotttudhhreaerl eppreoostteocnutFtraoicalrelllsyydearrmseessaippgnooecnnsls;suiid(bbielliedei)ppnaaerrwbttoei-etsas.hn; daa"nnceddnvvo((vil1v))nimnthhegeental financial viability of other potentially responsible parties and arceimevdiiyateioln tbiprtimear"ilyon1dop"eorthaetriconninrdoammaennitaaaancie ioft.he remediation liabilities" and "other environmental liabilities," third-party indemnitors. For sites included in both "environmental srteWehdisc,h rinecmleuddiisnigorneqsuciirveidtpyosstarregmoedictoimopnlemtoeaniodien,nihneg. at which remediation activity is largely complete and remaining `aCrCcotoimmvpipetaayonnfryyeolsbbapleeteilriseaetnvtpieerosisnmsthhaeoerreileyxfxnpptonoocsosiupareeelratfcotooionlldonoistsasinoiidnnn.emexHaxcoienwcstesevenooefarfsn,thchseeefooaarfmmltoohouceunantrtteiomaanccescedraryute,ewddihniwwcclouhudlroidnenmgneotrduetibqbauetemiilrmaoetndaetaredpcirotiaisavltli-trtfyeoomstthheaeedirCCaogtoimomepnapnomaynngosyon'isicntoogcnr.oisnnohsgloe,iltidhCdaeaottmeepddany Creasnunlotts timate possible os of operations or financial rnofogs excofehse ssocistd established seal fo thereasons described condition. However, for locations at which remediation activity is largely ongoing, the Cshoomvep.any cannot estimate a possible loss or range of loss in excess of the associated established accruals for the reasons described above. OtOhtheerr MMaanteterrss Commerctal Ligation Commercial Litigation T3y3MMdrssuuoeeddcTThrriaannrsosWgWfeielbbntCCgroorrpmpooirraaattiioounnseiidnn iM Mniin3nnneMessoortetaaspiiinnra22t00o11rs00afonorrdiinnaifrnainggceemmeFenentnt.ooffsTserevvaeenrrasalWl e33bMMflppeaadtnenattdssecccooavvseetrroiinrnggy fljlauuocdrgiimnnetantiitoonnacaatnnidodn in and hydrocharging of filter media used in 3M's respirators and furnace filters. TransWeb filed a declaratory judgment action in and nSuocnc-enssffiunlglyemmeonvteodftMhe'gsatpiicotns,oatnhdefUu.SrtheDrisltlreigctinCgohaatt f3oMhweaiitsetdri1c0t0oofNne1w0 fJeorsrey,esiksiringh.ts.deTaraatinosnaoflssalllietgesd3aMnd successfully moved the litigation to the U.S. District Court for the District ofNew Jersey, seeking a declaration of invalidity and non-infringement of 3M's patents, and further alleging that 3M waited too long to enforce its rights. TransWeb also alleged 3M bTaiwn. eIdn Ntohvepeamnbtesr 2t0h1r2o,ugjhunectemecaonvduecdtianindfthataHosfvTaraotnsmWrpeb10ocaollrbeuttohn cpaotuenntts cionncsltuidtiuntged ndiingasithntoMf'thse pnttnsst obtained the patents through inequitable conduct and that 3M's attempt to enforce the patents constituted a violation of the antitrust wl`fawrweemrrdseea.liiIennnnvvtaNalllyoii.ddveaaThmennjddbuenmrorot2ty0nin1fsf2irhn,iongagerjedued,rc,yonarmnedmdtuethrnhntdaetedd33aMMthvahehtraadddtcihcectoocimomnummrfatiivtftoeitrdndonaf3nTMsarnanhtnisdturWuscseotbmvvimoioonillaatatteliilodobnniubbntyyeocnssueecietkckaioilnnueggnctot,0onindaecunllcfouotrdreicinsengcaafbitpnsadeiteinnnnigtsniittthhhhaaaotddp3boeMbint'tansi,nepeadadtenndts htffhraoaartutmdtohhufeelefpnpsaatlttyaee.nntotTsshewweeej'ureerytfthehaeelesrseroafenorodernecoeuumxnnpeemnenfnefosonrerdesceceadiabnbtlhcleeoa..ntnStSheiicenntcccieeooutnthhrewet ifvvitanahssdttth3mmeMadajejofohreraiitdntyysceooofmfofTTmtrrhiaatenntesspdWWeeienbnbe'q'sscuaccistllaa,abiimlmethffceooorrpntradreutbclelteianaatnrortbeiuttrsasuinstatinddgaamtmthhaaeeggmepesastawewnaartsss,iicnoafnttdhhee form of its attorneys' fees and expenses in connection with the defense of the patent case, the parties agreed that the measure of danamnadgeesdewnoyuilndgnoItMoTtmhoteiojnusrys. btutaietdheertwhoueldrbeesrubtm.iteIda1ddispne,ciahlecmoausetrffulnedhteoiSlM pIatAenptesle2n0f1o,rtcheeoaubdtluecsstuocd damages would not go to the jury, but rather would be submitted to a special master after the trial. In April, 2014, the court issued daiinnaneemoqqaurugdiietteasarbb,dllseeennccdyooinonnddgutuc3c,tM e. TT'sjhhuemedcocgootmiuueorrnntttsaataccoccgeeisppentttseetadds3ithdMhee.e tsshIppneeojJcuiiasrlly2'mms0a1avss4ettr,eedrri3'c'stM.rreeIlcncoodammdmmdeietnnindootdaniat,ctietihoooennfacaaossput0erotsthfhoeeoufnaatdmhtoemwujontou3ooMffdutaptgatootneormmnntyetteshy"usen'nUfeoSetnesf,sortfCocooebubareebtlaaeowwfdaAaurreddpeetoddea5ss damages, and entered judgment against 3M. In July 2014, 3M filed a notice of appeal of the judgment to the U.S. Court of Appeals fcooruthre'FdedaermalnC.ircIunita. rIcn hFe2b0r1u6a,ry32M01p6a,idtThraUn.sSWeCb o$2o7fupmierllaoltn in ffuoltlhseatFeidaetriaolnCiorfcuhietjusdugemdentstdecision afiming the lower for the Federal Circuit. In February 2016, the U.S. Court ofAppeals for the Federal Circuit issued its decision affirming the lower court's judgment. In March 2016, 3M paid TransWeb $27 million in full satisfaction of the judgment. E120 22775500..00112200 TaofbColnees Table of Contents AnAAndndodovovveeerrrsHHleesaallttFhheccdaarree feliledadtnan niinfnfirrniingngegemememenentnttauscuttiitonaaggaaaiginnisnstts3t3M3MiinnaM Mnadayy322M0011D33euiitnsctthhheelaUUn..SdS.G.eDDiiibsst]rtictitnDCCoeoucurerttmffborerrtth2hee01DD3iisstirtnictMtoaofnfaDfbaeelva,worarse. AGNGoonerrdmmHooavarnnet.yr L.aalIIsnntoebbfotiFlthehrdecceaaavrsreeaesspl,,astAA,ednnidinondfvfrroieinrnggaaeelldllmeeAgegenenddtdatthohcaatvtitocceneerrartgaiUaiSa.ninsoosfntf3d33MGMe'rassnmesdalen-l3faM-pdaadhtDheeneretruesetnnstc3t hwwMlraraandpped,nsG,ieiimndnccbtllHuuhddtiiinnnggDfCCerocoiebbnmaganebTndeMTMrA2LLn0ada1tote3vexeiFnrFr'reMeseapanaatnndedhnetNNismex,x,cacsaaerrerTetMeTMd NatihsotaotHtnhhugeertpdpLeaalttaaeetynnetxtsisnFaarbreeeienvingwavilrnaialgpdid,st,, ahiannnfsddrcitnlcoglaineisdme.Aed3dnMtdthhoaaatvntAedArnA'nsdndoUdovo.vSeve.rerrassnhchdoaocuGuhldedrimbbeedanpprrspeecailtloeuunddnteessdd. 3M denied that it infringed Andover's patents, asserted ffroosm aesrovyenyjuodfgimesntl, eandd ndamOacgteosb,erin20p1a,t btheecacuusretof from recovery of its alleged damages, in part because of didrteesinnliioneenddggladilllnelpptaeehyennddiGniiennbrggrmissnaugunmimnimogratnrhyyefjjauuceddtgigormmneesn.nctat3sM tmeoioatcinnocdnsuAsrefnliddleeodidvnebbSoryyeebbpaoocctthhhbfeppilaarerrdtt2iee0mss1..4o.tTTiorrIiinnaalslNfinonotvrthehsereubmUUeSm.rS.a.2rm0my1aj4atu,titdeghrwmewaeaGsnset,ssrchahmneeddnduiutlnlieeOsddfcfctoooorrbuNNerroos2vv0eeo1mm6dbb,eetrahr2e2d00ec11oi66u.s.ritAAo Seohopreraddareerrairintinngeggliyhnth.eteh3eaaMppGppleosreinmnditammneleninnittftrofiyfnaganneamceetxxeippnoenetrrctitnatasoGeeasorscmstciasuntryrwie,tidthhhianaalneSanelgplyitseinmsgyotobfhferewsh2hv0eea1ltie4hid.erirItsny3oM Nfo'sMvA's enppmrdrooobddveuuerccr2tts'01ninG4ffe,irritnnhmggeaeenGAAepnnlrdmadonoavtnv.eerAtr'r'iLssalGbGecaeorrrummiratannnisgsppuaitenteedJn.atl. de2c0is1i5o,n tctShhoeeuprGGatreeasrttmmeaalyyaenn,d3pphMaaetnefnfitlteccdiooauurnnrturrleleeivvtyookkpaeercddotisAAocnnendddioniovnvGegeserrr''dsmuGrGaienneyrrm,achanhenalppplaaeettnneedgnneittnsnsg.cAAythnonedfdovoAvavneleidrrdoiaavtyppepproeafalAleeanpddpdettohahlvaa.terddI'eesnccNGiissoeiivoroemnnmaaabnnded,rp,a2iitnen0nA1At.p6pAerilttlha22e00ha11er6,ai,riettnhhsgeeGriGeenserJirmumvlaeyandn2a0tirl1iha5l, court stayed the infringement proceedings ppeernadtiinogngsaotrinoannciinatlhecoUnndiittidonState ad pending litigation in the United States and Gemanlo an amount tht not during the pendency of Andover's Germany for an amount that is not marl the Company onsite rests appeal. In November 2016, the parties resolved material to the Company's consolidated results ofall of operations or financial condition. PredictListy Ligation Product Liability Litigation dlF~lecatlriciftmdededeeaFeFxrrpaaennrgctcieee(n(EceEiDDnFgF))efflilcedilcaallleaanwwessdutuiwitotraakggaaTiinrnsste33sMMwFhirFacrnahcnecEDiinFntthsheseFrFernencwchehrcceoouucrrattssseinnd220b0y0066aclcligamidmiyinnggdeccfoeomctmmivmeerec3iraMl rlooassnssaanindodnpprsrooplppieecrertstyy. "cdTToahhnmeetarFFgarreetennasccfhphteeCCrcoeouixurfprttieorocfifaeAnAtpcaipipnonpegdensaehlsslaetaactttErVViDceeFarrlssinatlihellotlweresoosuargklfhfilifraymmileauenddraelttshyhwzeeehcsdioocammhnmmdEeeDtrreiFcsaitacellldatiitrmaihalesl scwcpooieuurcrretets'csdabeduecesficeosidrsieiboopynnurattchlhlhaaetatgstheehdeealynttrddeanensfsseiaitciltooinnvtessopp3l.lMiicceetssrTahccneoosnniCtffoioouornrrmtmseeopddflictfoeos. AAcFpoappnupetreraeaalc.lsst,,sThhphooeewwceicevfoivecurear,rtt,i-oooarnrpdsdpeeoarrienendddtetaadhcacoetuoxruEpterD-tr-atFappsptphuoooibinrmnotitueetdgdehdeelxyxhpipeasernrteatplty0oozresstdtuuodadtnyhdttehteeecspptoerrdoombbtmlhleeememsrpaalnnicccddoeiuissrsatsabueelefnoaMretcaehypcnuhirn2c0cihc1a4aal.lseooTpanhniiendiooeinxnnpseotrantllttahfhteeoicoucanna.udusTspeehooeofCfsttohheueertnndoeetftfwweacotrrskk fiVinaniaibl3SuiM lMrietC'sysp. orpTrorhdodeaudcmuccoatugaarentn-sddapafopnouoduninbnddtejttdhhaatettxEEp0DDerFFat msniunecbcramuorriuretetsdeddcddhhaaimmasaalrggeepeasnsoriitnnteeoexgxcatcheleesssschooaomflflm11n00ge00recsmmiiatillhlllsciitoooncnuroeetuuuirnrdoosM sb..eaTTyrhhse2ee0eed1xx4ppw.eieTrtrthh''setoohepepxiipcnnoeiiurootrnntfowwuIaannssdJnnupoootettdde2nii0st1spi6pao,lossidttieihvfeteeiocvotfsef liability or damages and subject to numerous factual and legal challenges that could be raised with the court. In June 2016, the inpsuireanrceeaccohveedrnger,eweermeenno t1omeatseorilasle1hhies dCiosmppuatn;y'sheacgornesoelmiednattendurdeestsscoofnfoipdeenrtaiatlifooonrrsmsfhaict,iwlheconndkitiionn. i account 3M parties reached an agreement to resolve this dispute; the agreement includes confidential terms that, when taking into account 3M's insurance coverage, were not material to the Company's consolidated results of operations or financial condition. OaOnnnexepcceuursstttoo1dmmeeetrrecorbmataiiinneendateahen oaodrdeemrr inntoothfheceuFoFrmreeennnrccchhitsacooluurrotssssaagaganaiidnnsspttr33oM pMerPPyuurdriiffaiiccmaattisioonanlSlSeAgASedS(luayFFcrreeannucchshessbuudybbssaiilddliieaagrreyyd))lyiinndOOecfctctootbbieevrre22300M11F11 lpappprooiiunnitsinndgg GaiinnnmttbehhHxeep]cceu(rotssnttmooAemudsreettr're'sirmmamnaiannsnneuufbtfsahaicecdttiauuamrriiynon)uganppntrrdooocfc3eecsMsossm..PuAmArnniefrAAiccuiuaastsltitrloroiniasnasSAassnuSbdbssnpiitdriohiarperyeyArtuooysfftdthrhaisimasnassgaacemomuaeerltlccseungisetntdooSlmyenperctraesaumllssbeooedrffbill2yee0dda1l2alselcgcleaakdiimmlynaadggdeaaafiienmncssatttigv33eeMMs3MAAourusfsihttlrtreeiaarssaumseed GmbH (an Austrian subsidiary) and 3M Purification SAS in the Austrian courts in September 2012 seeking damages for the same tfuheG.eTmhaonsectourtssinMaaarrchi2l0l1e2nsdeicngk.inAgnceormmcues!tomoesrsland aepropedwrtiytdaamgaaignesta3iedDlesytcchaluasendd bG y the s(asb mGeer3mMafnilseusbswdsisinnsi)n issue. Those two cases are still pending. Another customer filed a lawsuit against 3M Deutschland GmbH (a German subsidiary) in the German courts in March 2012 seeking commercial loss and property damage allegedly caused by the same 3M filters used sattecdaswtiotmheoru'tsgmaatnuifoanctutrheinsgopnrsosof:twth ctChoemrpcaunsytohmaesrsreisolsvedoituhtencofltghie sinahmesGse.rmTahneiamgounnts pTihed aCroemnpatnty ehisllo that customer's manufacturing process; the Company has resolved the claims in the German litigation. The Company has also in the Csoemttlpeadnwyitshcoountsloitliigdaatitoend eslof peratonso the claims of two other cnuasntcoimaelrscoanrdisiitnigonout of the same issue. The amounts paid are not material to the Company's consolidated results of operations or financial condition. AAlsaswoosffuDDieetaccseemmDbsbecererm33b11e,,r22003111,66,,2tt0hh1ee5C)C,omomompspaannoyyfiiwssiaasnnhaammaeerdddpdeeefnfedenindndgaannitt iidnn raappapprroooxrimmsataattteeecllyou11r,t2266i00n llMaaiwwnsusniuetissttssc(,ocomimpnapwarhreiecddht0othaaeppppproloxismiiattecleyli11n2222they lawsuits at December 31, 2015), most of which are pending in federal or state court in Minnesota, in which the plaintiffs claim they afnhdeerBeainrvHaorigoguesriTMnpt aartthrowpalrasmtiyn.gcasrydsitoevma.scTulharc,oamnpdloatihnetr csukrgderaimeasgneds lantd daefveerloepleidf bsasgedlonsihte infeectoifosnisiduteaobthie,use underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair HuggerTM patient warming system. The complaints seek damages and other relief based on theories of strict liability, niesgrliegperneces,enbtrteoancchoofncexepsrmescsaa,udnimsplinediwchaer,n,adiioratioownaorfm.vadrieouis ssnadtmcaonnusfuacmteurrifnagdd,efdecte, crsueodarplunitnannadoer nerlidiegent 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 aprtaocniicsdaencdaosr acsteioand.veTrhteisUi.nSg. aJcutds.icOinalePcaanseel,foon mMithdU.sS.tDiListtigcatCioonu(tMfoDrLt)hre aWantdetrheDipsatrnicttsof" Tmeonsnieosntsoe isnpsoftatainvde practices and/or false advertising acts. One case, from the U.S. District Court for the Western District of Tennessee is a putative iCncooasntntissoiaoncllwiipddiradtoteeececalelladlsiccsnaagsaseecdsstuiroppineen.nngdTdiithnnheggeUiipnn.SrfT.eoJeddueeardraailclpicchaoaol suuPerrattosnfetfol hhotehneegMUaU.ut.SSl.it.iodDDinisiststrtriIrciinccttJtLuCCintooieug2ura0rttt1io6ffoon,rrt(ttM hhheeDDDCLoi)simtgrprisacatnnotyofefdMwMatihsinennnspceelrssavoioenttadtitfowofisbtb'shemmmoaptaiunontanaagtgtieeovddetriicannln4aassfmmerauclalttnii-don district proceeding during the pre-trial phase of the litigation. In June 2016, the Company was served with a putative class action alneddtihntrhesuOrgnertieos aSudpenreirordCeovueltoopeJdusstuircgeicfaolrtalel Cfaencadiioannsrdesuiede1nthsewhuosuondfetrhweeBnatir rHiuogugseriTMat arthroplasty, cardiovaselar, 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 HuggerTM 21121 22775500..00112211 TTaabbeleooffCConotnetennttss. potent warningsystem. The rpresniaive pscl ksreleii ncludingpi damages) under Canadian aw based on patient warming system. The representative plaintiff seeks relief (including punitive damages) under Canadian law- based on horesimilar 0 hose ase the MDI The sr HogaerTM product ine wasacquiredby 3Ma paofrhte 2010 cision theories similar to those asserted in the MDL. The Bair HuggerTM product line was acquired by 3M as part of the 2010 acquisition ofArian. Inc. a kading manafcofptarinet warmingsolutionsdexgned 1 prevent bpetbernia and sian onl body of Arizant, Inc., a leading manufacturer of patient warming solutions designed to prevent hypothermia and maintain normal body Tempore n gical stings. No bili, ha bn recodedfo tis mate because th Companybelees hat any such iil temperature in surgical settings. No liability has been recorded for this matter because the Company believes that any such liability isnotprobableand simable at his me. is not probable and estimable at this time. In September 2011, 3MOrs Car launched Lava UimateCAD/CAM dental storstns materi, The product was orginally In September 2011, 3M Oral Care launched Lava Ultimate CAD/CAM dental restorative material. The product was originally indicatodfoinlay. ony. Sener and crown apiicatons. InJune2015, 3 Ora Cre volun removcd crown applications indicated for inlay, onlay, veneer, and crown applications. In June 2015, 3M Oral Care voluntarily removed crown applications from the product instructionfo se,Followingreports rom deistsof patents cron debonding.rein addins from the product's instructions for use, following reports from dentists of patients' crowns debonding, requiring additional resment. The product remains on the market or ther pplication. 3M communicated ith he U.S. Food snd Drv treatment. The product remains on the market for other applications. 3M communicated with the U.S. Food and Drug Administration, as wel a egaltors utd the United Stats. 3M als informed cusatndodismtbteorsrfssation, offeretdo Administration, as well as regulators outside the United States. 3M also informed customers and distributors of its action, offered to accep tumof unused matcrls and provid refunds. Asof December 31. 2016, thrare thee avis pending hat were brought accept return of unused materials and provide refunds. As of December 31, 2016, there are three lawsuits pending that were brought by dist and dtlpractice gaint 3M. Thecomplaints allege SM maketed and sold defen Lava lima mata used for by dentists and dental practices against 3M. The complaints allege 3M marketed and sold defective Lava Ultimate material used for dental cron dentists nd, und varios thee. sek monetary damages (spasementcostsandbusines eptation oso. dental crowns to dentists and, under various theories, seek monetary damages (replacement costs and business reputation loss), punitive damage, disgogemcat ofpoi, ninco from marketing sd cling Lov Ulimat or ve fn deal crows, story punitive damages, disgorgement of profits, injunction from marketing and selling Lava Ultimate for use in dental crowns, statutory penalis, and atoms" fcand oss. One li, pending heU.S. Dist Court for the DisotfMreiscot, names 39 penalties, and attorneys' fees and costs. One lawsuit, pending in the U.S. District Court for the District of Minnesota, names 39 isnt andsekscrifcation fa las actionofdentist he Unit Sates and sero, ad allmatly seks plaintiffs and seeks certification of a class action of dentists in the United States and its territories, and alternatively seeks Subclass in 13 stat The oer twoluis ae indiduscomplainsagainst SM oe in Madison County, iors ad theater subclasses in 13 states. The other two lawsuits are individual complaints against 3M one in Madison County, Illinois and the other inthe US. Disiet Courtfothe North Dist ofNew York in the U.S. District Court for the Northern District of New York. aFFmoororuppnrrotoddruuecccttoalridabebdiilistlyn oliittgigmaaaittieoornniammlaattteehrses ddCeoesmsccprariinbbyee'dds iicnnothnhisissolssietdctaoitonendfrfoorrswwhthiiccohhfoaa alipaibitltityihhoaasrsoFbbnecanennncirrseeaccloorrcddoneedddi,,tithohene. CCoIonmmsppiaatnniyyonbb,eeliheeevess the the Camomopuantnyreciosrndoetdshisentoot simate material atoptohsesiCbolemlpaonys's rng floss consolidated n excesoftheestablished accruals atthis ime. 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. 2122 22775500.00112222 Table of Contents NOTE IS. StockBased Compensation NOTE 15. Stock-Based Compensation s"TTohhceekS3iMMnc22l00u00d88inLLgoonanggd--iTTeeorrsmm)IIsnnhccaeernnetthiivoveledPlelarannap((pLrToTIvIPaPl))pprsroouvvbisiddeeeqssueffnootrrtt1hh0ee20sis0ss8uu)aannpcceaoosdreadleilfvioveearrywyoaofrfduupprttaoon110d000wmmieilllriioonnthssehhlaararee.ss ooIff 33MMMayccoo2mm0mm1o,onn 12Ssstth3oaa.crr9keh6ho(5oiln,lddc0eel0rur0ssdsiaanhppgapprrareood.vvdeeiTtddihoethnh2eae02l210s0h611aL66rTeLLhIIToPPlsIdP,ue,rcppareporspvrisoodvinhavgelsaia3nsnua8dbaddsd2iedi0qit0tunii8oeonngnatsIltPo22..329,09A606w585a.),r00pd00us00rsmssuahhaayanrrbetesest,o, iiianwcsnraedrcadssrintnghgerattnahhetfeesondnruiummubmnnoedbrfegoerfritoanhfepcappeplrpanonrto.svvioIeencvddkMesshahoayaprr2eeiss0n1t1,o6, aon1onn2n3duq,s9au,6al5lfi,nf0ei0ded0dpessshtrooafcrkoekmso.oappTnttichiooeennsu2s,n0, i1ppt6rrsooLggarTredeIssPsspiisevvureecfcssotetomoecacdkkns coothpeptetisioho3annMrsse,,s2.ts0tooA0cc8wkkaLraaTpdpIpsrPrde.eeicAniaaowttmiaiiornnndsstriiemggdhhatty,si,bsrreehesiastsrrseitucseteedoddfinscstotoochckemk,,cforsnremsttsretoicofetceikdndctesshtnooteccivkkteunhsnttiot,soc,pkttooithophenteirsronasttnsoo,dckk Sasltwolocackrkvdaasal,ppuppearnreaedcwciaipaarettdriiofsoonnrimrrtiigahghnhgtctsaes,nucctoonuuidtnnstttacaanggdaapiirpnniesosrtrtfoththroeemMa11an22yc33e,,919s166h.55a,2,r000e010s000.)A,sshhwaaarsareer2d.lmsi8mi7dtiestnhaaosrme33si..n33fa88otressdhheaavirrnreeyssshffooaorrrneeesvvsoeehrfrayycrooomcnnoeemvessorhineardrseetboccycokovsoeunrcthehddearbbwtyyhaarssnduccofhhpotarwiwoafnarlsrlddavn((adffloourre a`fauawnnllaadnrvddsaslfuwwoeirittahhwfglgalrrraadvnnsattldwudeitatthesasgrraoandnotoardwtaiatetfethesrrgprMMraianoatyrydto1111M,, 2t2ao00y1f10M01,c1,a,nay2nd0d31.pp0r2r)i,i0oo1ars2tfo2oa.MM8da7aypys8hi8,ar,2re20sf0o11fM2o2r)a),eyaavse31r0.3,y.552o000n1ess6hh)saa,hrraeersseffo5cor2orv.v0eeevsrreehrydyabaroynneeessusschfhhoaarrraeeewvccaeoorrvvdyeer(rcfeeodedrbbfsyuyhlalssruuveccahhlue C`acrowoavvaneetrrrdeeudd(fnobbdyryfessuhuulrelcchhvLaaaTlwwuIaeParradPdwr(aofororgdrasufmuwllllirthvveaagll6uura.een8aat6wwd5aaa8rrtded1sss4owwafisittMohhfgagyeDrnae8ntc,dte2dm0ab1at2eesroatonf31fd,iMps2rya0iy1o6r.11t0o0h, M2e200ra11ey66w1o0er,rle2ea0taer1rp6)p.),rTTrohhiremarrtseee2mml.a5ayi0inn7iis.nnh6gga0r0tteosoatalfrlotsrsihhepaavrareeenrssytvasovanwaeiilltaslhbhlaeereffoorr ugtrasnttnudnidnegr tohpetiLonTsI,PePsrroigtraemd astroeck3,6o,86r5e,s8t1r4ictaesdosfoDcekcenmibterast31D,c2e0m1b6.eTrh3e1r,e2w01er6e approximately 7,600 participants with outstanding options, restricted stock, or restricted stock units at December 31, 2016. "bTTehhteewCCeoomnmpatpnhya'nspy'saeanrnnafulalossotroofckmkinooadppitnviiiodncnuaaaelnnsdddreeusstrritcittiehned sspttrooeccckkeduiinntigt ggyrraanntteniissdmmataahddeierifnn FFoeefbbtrrhuueaairrryyatnonupparrloovvsiidodeecka cssotrmogpnegnsaaanntddiiiomnmmgreamdntisae.teTllhinnekkgrat tubtoebteswlltiegaeilnbnltethiceemmvppipellronofyogyereempesesawrnuiecsoeesdsoattfhphieerncodclsliocovshsidii.nnuggaqlousstiodkrcuikrninppgrgriiccctoheemeopnpetrnthehseceaetdggiiarnoanngntteyddxeaapatteere.n.asnAAedccecctohcoueoungnstittizinineggoonlrfutewlheshesierrrneaqnaiunniuereeamlrrpesetlccoooocggyknneicittoiiiosmoncnoploefinfegsexhaxptepieoefnnnossegeeirauunnn.ntdsd.eFrTenaahpelnooogyanre-asnst aas3rur5eebpsccotooarnnnesstniiivddteeeorrvfeeeddtshgeteilni2iggb0i1blpl6eeeriatoondnrreauetpaitpresertoaaoatccgakhge,berae55sq5eudaairnnciddnogmfapfcletoenemrsahhptaaeivvnoiisnnnaggtwioccaoonmmdeppxllpeeexettnpeedsedenteserneencdyoyoeelgalanrarissrtisooofnfstsewhererhvvseiilnccoe.ae.n,TThhehiimigsshpertlreortysiereo-eeec<-ilkseglbeiigalibisgbleilbedeleppCoootoppmupurleelaanttitsriioeao.ntniErroemenppprreelossyeennetetsss e35xppeenrcseenst roefctohgen2iz0e1d6 i he fr guartr annual stock-based compensation award expense dollars; therefore, higher stock-based compensation expense is recognized in the first quarter. bI1nasiaedddogitrianonntst.toohTtehhee aaCnnonnmuupaaal nrgyroatnsstes,,etsthheecCaCosomhmpspaetantnlyyedkmeasketeisctotethdheesrrtmoicinknuoornrgsraanntadsoosfftsonstctokoccakkptopoprpteticisoionansts,i,orrneessrttirrgiihcctttseeddinssctooecrctkkauiuinntictosunnatndrdieohst.hreTrhesstsooscckgkr-ants dboasremdtgrreasnultst.n he sunofcommen The Company issues cash sock andse considers imatefodisclose settled restricted stock units and stock appreciation priagrhptossiens by theCompany certain countries. These grants do not result in the issuance of common stock and are considered immaterial for disclosure purposes by the Company. During the fsquate 2016, th Company adopied ASU No. 2016-09, Improvemes o EmployeeShare Bas Payment During the first quarter of 2016, the Company adopted ASU No. 2016-09, Improvements to Employee Share-BasedPayment Accouning. The adoption i ecpird 0he implemented prospectivly and ele in incon bene of S184 milofo Accounting. The adoption is required to be implemented prospectively and resulted in income tax benefits of $184 million for 2016. See Not1 for aions] norton regarding ASU No. 2016-09. 2016. See Note 1 for additional information regarding ASU No. 2016-09. AAremmsotoruiuncntttessd rrseeocccookg,gnniirzreeesddtriiinntetthdheestffioincnakannuccniiiaatlsl,sstpaeetermmfoeernmntasnwicteithhshrraeersspepeseccattntsodotshtcoeckGke-bnbaeasrseaeldd Eccmoopmmlpopeyenensesasat"tiiooSnnoppcrrkooggPrruaamrmscs,h,awhseihicPclhhaniinn(ccGlluEudSdePPss)too,ccakkrsoopppttriiooovnnis,d,ed inthe followin restricted stock, table. Capitalized sock besed compensation amu we ok teil, 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 Stock-Based Compensation Expense oC(oMwsitlleioolnsss) ie CSRSeeeolsllsleitinanogrg,fc,ghsge,aneldeneersevaraelllaoapnnmddaeadndmtimnaiinnsditsretraatatiivvdeeeeexxxpppeeennnssseeesss Research, development and related expenses ww Voscie d esntecatm . w 2016 Yearsended December31 2015 2014 5 7 T WT rd $ 47 $ 46 $ 47 206 15s m2 206 185 192 as a 45 45 41 Stockbased compensation expenses Stock-based compensation expenses s ms 26s m $ 298 $ 276 $ 280 Income tax benefits Income tax benefits sams ans a $ (272) $ (87) $ (79) Stock-based compensation expenses (ene) net oftx. Stock-based compensation expenses (benefits), net of tax s xs [RS m $ 26 $ 189 $ 201 ES123 22775500.00112233 she of Cones. Table of Contents Stock Option Program Stock Option Program "The fllowing ble summarizes sock option activity forthe csr ndod Decembe3r1 The following table summarizes stock option activity for the years ended December 31: UnUdnedJerarmoaoprptytiioon|n -- January 1 GrAannnuea:l Granted: CEaxEneAxceienrnslcuieesadedld OptiCDDoeaencncseceeemmlbxebedrerrs3a311ble December 31 Options exercisable December 31 me2016 em Weighted Nembrot am Number of Average pele Options Exercise Price MEAS S201 38,552,445 $ 102.01 sou 5,591,727 Ore (7,716,141) @31799) (231,799) Selva: 3 36,196,232 $ we 147.99 se 86.76 names 148.43 i20r 112.07 Frere sve 25,240,759 $ 95.65 ms2015 em Weighted Numheraf wm Number of Average a poole Options Exercise Price a2014 a ~Veighted Nemes iam Number of Average mm ponebe Options Exercise Price W2SST SN 39,235,557 $ 90.38 GOWTE Sm 43,938,778 $ 83.84 ssosk 5,529,544 Som) (5,978,382) Quon (234,274) mses 38,552,445 Iso snes 165.91 5,736,183 wa 0202) 83.74 (10,219,261) sw _ Guy 128.99 (220,143) Siar Haws $ 102.01 39,235,557 en 126.77 m282.37 esi 105.11 Swow $ 90.38 aes $m 27,262,062 $ 85.97 naw $m 27,502,208 $ 81.42 2SS0ttoo1cc,kk toohppettriioeonnwssasvveeSsst6t 9oovmeivrlalpoepnreroorifocddomfrrpooemsnsooannetetitohonrtshesrepeeenyyseeaartsshwawiistth tthyhe eexxfpopbiirraatteiiosonnogddnaaiteezeaadt11r00elyeateaeardrssfofrrmoonmm-vdd eastteoeofdfe ggrsaronactnk.t. oAApstsiooofnf DDbaescieedmacbwearr3hd31s1.,, o2TTuh0hit1iess6tx,eapxtnhedpeienrnnesgseweotaissDeee$xxc6ppe9eemccmbtteeeildrdliott3oon1,bboee2f0rrc1eeo6ccm,ooggphnneeiinzzsweeagddtihoooinvveeeedrxathphveeeenrrrseeeammgtahaeiiarnntieihnnmaggasiwwyneeeigitnghtgthocetebodde-n-aaravevcceeuorragaaggnleeizfevvdeeesxrtiweiannlsaggt6eppd9eermtiooorndnitooohnfofs-22vd00easnmmtdeoodntnthshtehtsos.sc. kFFgooorpr tootiopptntiioibonnasssnediawvaarlduse. outstanding at December 31, 2016, the weighted-average wanads5th2e.4s07ebgilso.nvFionrsoipcivonaluexwearsi$s2b0l9e3abiDlelicoenmber was $2.407 billion. For options exercisable at December 31, 2016, the weighied-averae remaining contractual life was 31, 2016, the weighted-average remaining 69 months remaining conrctal Ie was 36 maths and the aggregate intrinsic value contractual life was 56 months and the aggregate intrinsic value was $2.093 billion. "TreThsepheetcotoitavlellniyn.tiriCmnasisichvvraaellcuueeeissveoofdsf fsotrocockmkoooppptttiiiooonnnssseeexxxeeerrrccciiissseeedddddduourrriiinnnggg222000111666,,,222000111553asannnddd02210011444wwwaaasss6$S665008mmmiliilillioon,n,, S$$S44066155 mmmiliilllliiooonnasannnddd3$64611255mmmiliilillioonn,., respectively. Cash received from options exercised during 2016, 2015 and 2014 was $665 million, $501 million and $842 million, 2r0es1p6e,ct2iv0e1ly5.ndThe20C1o4mpwaansySs22a4ctmuiallliotna, Se1n7e2fimsilrlieolniaenddfSort2h26 amillidne.duecstipocntsrvellayted othe xeriseof mpl stock options for respectively. The Company's actual tax benefits realized for the tax deductions related to the exercise of employee stock options for 2016, 2015 and 2014 was $224 million, $172 million and $226 million, respectively. "The Company dos not Have a specifi policy orpurchas common shart mit th dui impactofoptions: hrwener, he The Company does not have a specific policy to repurchase common shares to mitigate the dilutive impact of options; however, the Company ha isoricaly madeadequatedictions, prchass, based on cash avail, market rds, and he factors, 10 Company has historically made adequate discretionary purchases, based on cash availability, market trends, and other factors, to sts stock option exercise sctiviy satisfy stock option exercise activity. Forannul optics, the weighted aera fivalue a thedoft grat was allt using the Black-Scholesaptin-pricing For annual options, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model nd he assumptions the oll model and the assumptions that follow-. Stock Option Assumptions Stock Option Assumptions Exeris price Exercise price Risk.fe ners te Risk-free interest rate Dividend ied Dividend yield Expected vlatily Expected volatility Expected if (month) Expected life (months) Black-Scholes ie value Black-Scholes fair value 2016 STE $ 147.87 15% 1.5 % 25% 2.5 % wsw 20.8 % m77 Er $ 22.47 Annual 2015 Siew $ 165.94 13% 1.5 % 250 2.5 % win 20.1% 1676 TTw $ 23.98 2014 Som $ 126.72 19% 1.9 % 26% 2.6 % wan 20.8 % as75 sme $ 19.63 Expected volatility satistcal mess ofthe amount by which toc rice i speed lctiate during prkd. Fo the Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2016 anne grant dt, the Company estimatedthexpecltatei d based upon the aersgoef he most recent one yar 2016 annual grant date, the Company estimated the expected volatility based upon the average of the most recent one year lai the median of he er ofth expected fe olin oils the median of hemos recent erm f the xpectd fe volatility, the median of the term of the expected life rolling volatility, the median of the most recent term of the expected life laity ofSM sto, an the implied ola on the rant date. The expected frm assumption is based a the weighted average volatility of 3M stock, and the implied volatility on the grant date. The expected term assumption is based on the weighted average oftistoicl grants. of historical grants. E124 22775500.00112244 TabeofComets Table of Contents RestrictedStockand Restricted Stock Units Restricted Stock and Restricted Stock Units "The Fllowing ble summarizes restricted sock snd restricted stock unit activity for the yas ended Db3: The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31: ane Te 2016 }Veighted ams om 2015 }Veighted ou om 2014 Weighted Average Average Average NoN"noAvnvveeossfttedJdabbnaualalaarnnyccee| As of January GAraomneed Granted 1 Annual VeOubsedr Other AsVFFoooerrstftDeieeitdteceddember 31 As of December 31 Number of Awards 24008 2,441,088 Toss 749,068 BUS 8,115 O63 (960,345) mn (52,880) Tibet 2,185,046 Grant Date Fair Value S 0 $ 127.47 uma 148.20 00 169.00 W016 101.64 uses 145.95 SSer $ 145.64 Number of Awards 28076 2,817,786 120 671,204 26 26,886 (1010612) (1,010,612) euite (64,176) _Tilow 2,441,088 Grant Date Fair Value S 041 $ 104.41 esse 165.86 16% 156.94 99 89.99 _ise 118.99 S347 $ 127.47 Number of Awards Grant Date Fair Value 31t05h361 pS S92,31 3,105,361 $ 92.31 mEels 16m 798,615 126.79 mm 2m 78,252 152.74 (LI0Es 0 (1,100,675) 90.37 en _ 9128 (63,767) 97.23 _ZEgm Soil 2,817,786 $ 104.41 AAressstoorfifcDDteeedccesetmmobcbekerran3311,,r22e0s01t1r66i,c,tttehhdeserrteeowcwkaassunS$i58t11s mmThiiilllsiaoennoofxf ccpoommipespeenennsxsapatseticiootenendeexx0ppbeeennssreeetcthhoaagttnihhzasesdyoevtertbo tebheerrreeeccmooagginnniiizzneegdd related to nn-vesed Wreeliagthetdetdo-anvoenr-avgeestveedsting restricted stock and restricted stock units. This expense is expected to be recognized over the remaining weighted-average vesting Sp1er4i9odmiolflo2n2,moSn1t6h6s.miTheltloontanldiSe14vmilaolofne,lsspteuectdivseo.ckTnhde Creosmtipctaondystsocukaulniats hbaetneefsittsedrsdluirizndgo2r01t,h2t0s15ednudct2i0o1n4s was period of 22 months. The total fair value of restricted stock and restricted stock units that vested during 2016, 2015 and 2014 was $149 million, $166 million and $145 million, respectively. The Company's actual tax benefits realized for the tax deductions rmielsltoend, tospheectievneilyn.g ofrestricted stock and restricted stock unitfo 2016, 2015 nd 2014was$56 lin, S62 millon nd $54 related to the vesting of restricted stock and restricted stock units for 2016, 2015 and 2014 was $56 million, $62 million and $54 million, respectively. eRRqeeussittvrraiiccltteeenddtssstcoqcukolunnoiitttcsshggerrdaaiknnvttieedddeggnedennseerpraaallyllayyblvveeessott tthhhrreeeeseyaeaarrssnfluoomllbwoewirinongfg stthheehrgaaranronftte3edsaetecaaosssmsuummmoiinnnggcsocooncntktiicnnuueeedd eerommnpplltooyhymemesneten.st.tDDriiivvtiidddeesnnoddck its Gedhqureuriiivnvengaslttteihnhnetgsvvdeeeasqtsettu.iinanlggDtioppveetrirhiidoeoedddn,,idvaaaliltdrthehonouadugigshhdponnaoyooaddbiiilvvneiidcdoeaensnnhtddhaesetqustuaiihmvvaaevlnsennttutmssdbtaaercrer oopenafiissddhtaoorrnniecsnatnyoeydfo3osfMfttothhccekesoseumeimrrteeo,stnsreiecsxtetcoedecdpkssfattooocccckkrpuuueenrnofistnosrtthmhhaaeantstceaerrreeesshfFtaorrirrecfseteeihtdedidsctopphrcriikodorruont0oits otnWhoteeticvegaeahrsmnttidnddgiiavvvdiieddaerteenand.gdseDs..irveSSsiiidtnnreccineecdttteshhdeaetrrreoiigpgkhhattissdn1tdtooiudsvthiiivandrideecesannsdodhsusataatsrrtaehneffdooivrrneffeseittaaadbbeallteeei,,notctnhleeurrdereesdtiirssincnnttooehdieimmsctppooaacmcckpttuuootnnnaittbbsiaa,osseniixcoccfeceaapdrmitnlifiunnotggressdppepcereafromsirshmhnaargarcsneacplceecarulschlsuaahlrataeritseioonwnssh..ich do Weighted average restricted stock unit shares outstanding are included in the computation of diluted earnings per share. Performance Shares Performance Shares "IInTnhssettee2aa0dd1oo6ffpereessrtfrtoicretmedadncstetoooickkteuunnriiattss,fottrhheetChCeosomempppaeanrnfyyormmmaaakknecesessaahnnannruueasll (ggorrraangntatssooffoppelerurffmooerrmmgaarnnoecwsetsshhhaatrreessutoomomenmeimbnevberesrstsefodfciiatspsiexlvecesutteiveecammsahannalaggweemmenetn,t. ecTcoohnmnesvc2ers0rsos1iis6ooknnph,,eoaarknfnodddrrmseavaaarmnnliciunneeggcssTrihppteeerrrinassuhhmfaaobrrreeertghgorerfooswewSttpahhe))rrfwwsoeerormrfeea3ssneecMlleeecccsottheemaddrmebboseencc(aaouursgsstaeeonctthkihCcetohvCaomtolpumomauplenadngyyrsbobuwleltlhilee,yvsreebstuehtdrhaneatltoitntvhheeienryyveaadersreteipdmtohcpraoteprnaittadnanlto,tffddtrrehieeviechrasvesohoeffefyllloooennwrrgg:Ctppeoeerrrmmffpoorasrmtnmoyaacnnkdcchueeorlppideenerrgriioovsdduaclmmuhaea.pyyeTrbbhfeeeoaarnnnmuyyamwwnhcbheeeerrrpeeeorfffirorsodho.mamrNe00so%%no1-tf0os3uM 20b0s0ct%oa0mioovmffeoe%anvacceshhxtioppnceegkrrffteohorarrmtmeaacnnosccueelhdssthahcaatreruexapaglelrrynaansnbeeteeddf,d,oeddliteevpheperepnedednridnaftigotnomhogeannnettchnheed ppsoheefarrtrfhfoeeosrmrtbhmasrnnercceeee-cyoooefgfantrtihezeed oCopveoremfrvooponranemneayeonorcdrteutrhhrsirehnesagereycssueacadrhrissdpddneeeprtfpeoenardncmidcniarngnugecoedoninpvewhirdiheoeednnn.dNscedaaocrcnhhi-sdniunibdvistivthadiednuutpaiaevllrefbbvoerecsmeataminneacgearepn3qrMu1oidrxee.exscetcuThuhtaetitirnvee.efxo.prPPeer,rniisooterrhfttoogorrthahtnehet2e20dp01ae16tr6foFpprieemrrrfafovnoarcrlmeumeaasnnhccwaeersessshhdbaaerreteeergreracrmanointgn,ten,dizbeyd prprpSeieeeedndrrruffcufoocecorriimmntmnhgagaaennnthhrccceieeeegchcsssltlhhhosoaasas1rriir0eennsgdgrgsdiratsaivtdonnoictcnsdkkaoccetppccnarrrrsiicudrcecceseesrsuoododenniifvdvttiihhievddeeeieaddnndaedbdatnstsee,d,ostotthfhdfheeuggrerrerreriaffanonostgnrrtoeetbpbhtyytehhtetaehpheegerrrcaenfaoenttrtttmppddaarraentetbesecsaeeefsfnatiptiicrevvrcavvaiaolaalulmdleueui.oeenoTfgiifhssddeqieripvqveoiufiardodaesrelenhnt1,adod0rtsshethhddeeceuuglrrccircihlnanloogngasstiitttndhnhigageeotessnppttseeoforraccWfifkkoreorippvrmrgrmaiihalaccunnteeecceaoeedwnnppaavtteeshehrrredeiioaeoddgddtaeea.trtTeemThhooieefnfge22grd00raa11btn66y.t. performance shares hose performance prod fs complete ae cluded in computationof ied careirnagre. 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. us125 22775500.00112255 Table of Contents "The following table summarizes performanceshare ativiyfo he yearsended Dosembe3r1 The following table summarizes performance share activity for the years ended December 31: UnUdn`idAsissrtoirilbbJuuuteenddabrbayallaan|nccee -- AGGDsriroasatfnnitJtbaeeunddtueadry 1 PDPFeoerirsrfffteoroiirrbtmmueadtaenndcceecchhaannggee AsFoofrfDeietecdember31 As of December 31 2016 TT ee TT Nae Weighted Average Numberal GrmDe Nomberof Gram Due Number of Grant Date wari" Firobe _Nmai FurVase Awards Fair Value 2015 Weighted Average Number of Grant Date Awards Fair Value WLS 208 871,192 $ 120.89 051600 219,431 160.17 GOTH Ms (367,428) 99.06 ESD ISM (37,534) 155.98 @3%) oe (29,383) 149.08 as Siam 656,278 $ 142.98 LWT 1,099,752 2 227,798 (ROW (323,938) (06760) (106,760) Qs) (25,660) wl 871,192 S 10265 $ 102.65 ISS 158.88 ms 83.08 12770 127.70 1253 125.33 Siow $ 120.89 2014 wee ~Veighted Average Number GramDte Number of Grant Date meds FarVae Awards Fair Value 56S 895,635 SS 305,225 QE) (277,358) 22460 212,461 __Ge212) (36,212) wre 1,099,752 S812 $ 88.12 248) 124.89 Mn 84.74 10974 109.74 io 109.44 See $ 102.65 SAAhsasrooefsf.DDTeehccieesmmebbeerxr331p1,,22e0s01e16nx6,p,estthhcetereeeredww0aasbsSe$1r16e6commgiinlllilizooennodofofvcecoommphepenesnraseatmtiaiooinnnieenxxgppeWennseseeihthaagtt hhhaasstyeeettdtfcooab-bmeeriaenrecgvcosogpegnenirrizizoeeadddogrrfe1lea1teedmoftlnootphpesier.rffooDerrummraiandnncgcee2016, 22sT0he01sa1p5r5eeassatn.nidTndlh22yi0.s011e4T4x,h,pettehhnCeesoetfmooipttsaaallefnxfyiap'ierscvvtaaeacdlltuuuteoaolofbfaeppreeerbcfreoongfremnfoiiaztrnescdmresaoeshvnhaaearicrreesteshseftthohrraaetttmhwwaeeieranreiednidgdsitswtrreieiibbguuhttdteeeddd-wwruaeevelrreaeecrtae$$gd55ett44oemmatiirhilnlelliiidnoooignnss,t,rp$Snie55bru44itosimmdoinilolollfifoo1pnn1eaarmnnfddoonrS$tm33ha55s.nmmcDieilulllsrioihonnan,gr,e2s0f1o6r, 2re0s1p6e,c2ti0v1e3lya.nTdh2e0C14omwpaasnSy15'smialcltuiaoln,taxS1b5emnefiitslrelaalnizoded1nf1ormithlleiotna,x respectively. deductions related to the distribution of performance shares for 2016, 2015 and 2014 was $15 million, $15 million and $11 million, respectively. GeneralEmplgees' General Employees' SSttoocckkPPuurrcchhaasseePPalann((GGEESSPPIP):): lAAlssocoff DDmeececpmbeaelrrm3e31c1b,io,2g2e0i01b1ry6l6,, 0ssephhaaarrrtescihhcooillspddaeerrss nhhaatvvhee paalpappnr.opvPeardt6i6o0c0pmvmainleitlllsiodornnssshghararraeensstfefoodrorspistsusiuoaannnscacsetuu$n5denrottfhmhdeaeCrCokemoepmatnpryva'nasyl'usGaEGtSEtPShePPdP.a.t SSuoubfbssgttaranantniti.aallllyy all employees are eligible to participate in the plan. Participants are granted options at 85% of market value at the date of grant. "aTnhdereexearecinsoedGon thEe sfahsteSbsasuinnP deesrsodpaP tyioonftahiehseabmee gmointnh,noircnugdofcach year becauseoptions ar granted ath firstbusinessday 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 General Employees' Stock Purchase Plan DE 2016 ~Veighted 2015 Weighted 2014 Weighted Average Average Average Shares Exercise Price Shares Exercise Price Shares Exercise Price OpOOtpptitiiooonnnsssegxgreraarnncttieesdded SDOShehapacrtireoeesnsmsaabveevaxrielar3acb1iilseelfdfooarrgbgrralanntet-- December 31 WATS 987,478 ONT (987,478) tess 27,116,857 Ses $ 140.06 Hoes 140.06 L006) 1,007,669 (oe) (1,007,669) 2104335 28,104,335 SIRS $ 133.52 1352 133.52 L0B9s 1,073,956 (01395) (1,073,956) 20112000 29,112,004 S187 $ 118.73 11s 118.73 "TTfahhieewvweaeiligguhhottfeddGa-EvaSveePrraPaggoepetffiaioirrnsvvwaallauuseeppbeerraooppsttoiinoeotnndhrgaran1ntt3eed%d pdduuurrrciinhngags22e00p116i6,,c2200d11i55sacanonndd.22001T1h44ewwCaoassmp$$2a24n4.y.7722r,,ec$52o23.g536n.5ia6zenadndcdom$$2p20e09.n95s5,t,irreossnppeeescxitpeivelenyls.ye. fTTohrhee GfEaSSPirovalpue iof GoEoaSfPSPs24opmtiiolnlsown ains2b0a1s6e,d o5n24thmeil1l5o%n pinur2c0h1a5saenpdric5e22dismciolluinotn. in2014. The Company recognized compensation expense for GESSP options of $24 million in 2016, $24 million in 2015 and $22 million in 2014. 112266 22775500..00112266 TaofbColnees Table of Contents NOTE 16. Business Semen NOTE 16. Business Segments 33TeM Mch'snobbluuossgiiinneeesssssneedssaaorsrreergvoairncgeia.nzie3zdeM,d,mmmaanananagagegeseddtsaannoddpincntrtreamrtnaalollnilyysggfirrvooeubuppueesddiiinnntetosssesmgeemgmneetnnttsss.bbaaIssneeddduosotnriidaiflfefSeearfneenctceyessaniindn mmGarararkpkehtti,sc,:pprrHooeddauulccttthss,Cre: 1tEFehlclehcdcntrotoelnooigvcniseeacsannaslddndoEEonsnfpecenrrevgomyiyrc;;eeasaat.nnnid3dCvM toCenomspnruasomundemaugrceet.rss. iVa3tnsM'doss'psfrefiriavevteeibeobunsusaisnininnedesfspisvreossvebiegudmmsiinenegnentsfssobrbisrfeinngigmgcoiettonnghttse:etshIhrneardrcuiconsogtmmrimoamfolb;onunSsaooifrrentreeyelslaaatnrteeedsddoGu33rrMcaMepshtt.eeicchhsTa;nroaloHnoleosgaaigcclitteshi,so,Cnoeasnaraehn;ancngici.nngg the development of innovative products and services and providing for efficient sharing of business resources. Transactions among lroepcoarttiabolnessaanmd einnvenatoeryretcotrdeed.a Tohste.refSoMr,imnanmagredmoeecntnenrpotrtisreecpharreachtaetritzhbeeyds ssubgsttant,ialiifnotpresrcagtmedenitncdooeppeernadteinont,. cost reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost wawinlooltoueurckleaddsttirroeeinppnsoocrraottnmthdeheeainnoovdppeeenfrrtaaorttriieynnggttriianenncxcsopfoeemmnreses.eii,Tnnfhfwooehrrrimemcfaahottriiaeoo,nenmssmhhaooontwwalngn.le.omTTsehhtneeetddddiiotflofeeesrbreuennsnocictneeresbbpseertseweesgeeemnenentnttoohsppa.eterrtaahtteiisnnegg income and segments, if income and pe income eles 0 operated independently, pre-tax income relates to interest income and interest expense, which are not allocated to business segments. cEEoffnffteecictntiisvvieengiinneftthfhoeertffirsst iqquumaarrteptroofrhf2e2001a16l6,,i33gMMhtmmaoafddiees.a Prpsrooiddnuusccstellsiinnere orreueppnoodrrttmiiannrggkccehhtaasnnaggneed iincnvvuoosllovvmiinneggrsttwoo fisof its busines business segmentis segments in isits continuing effort to improve the alignment of its businesses around markets and customers. "The The cc+hhaannFggeeembbeeenttwtweeeeonnftbbhuaesscinieenssrs ssieeggcmmbeeonnnttdssiwwngaaspsarsodlfouolclwotswi:sn:es wrepresiouslyseparatelyrected in the ElectrMotneiiscls `TESSoolouellsmuuittneiioenonsntssssoDDegifimvvteihinssetiio)eo.nnle(c(EEEtlrlloecenccttiticrrvoobnenoiicncnssdtiaahnnegdd rpEEsrnontederrquggucyyatrlbbtiuenursesoisinfnwee2ses0sr1ess6e,pegrmgecevmerintoeatu)nisanastlnynld)desettshpheeaarnIIanndtdedulouysspttrrrreiiaafallleiAAcndtdehhdieensiscniiovvtmeheesse Electronics Materials arnedsuTsafpoes Dhievsiesilono(csotl and Tapes Division (Industrial business segment). Effective in the first quarter of 2016, certain sales and operating income results for these electronic Ibnodnudsitnogalprboudsuicnetsisnsesgmienat.rTeisschwaenrgeerquasllyddiivnideddebrestwaee tnhte lslestrndoopneinracdtiEnngcrisnycboumseinfesorseogmyeenrt 2s0d15 of bonding product lines in aggregate were equally divided between the Electronics and Energy business segment and FSI$nl33dc33ucmtsmtririolilalnliliooebnnusaasnnnidnddeES$s7s7nsmemeirglillmliioboenunn,s,t.irrneTeesshppsieescsctcetiihgvvmaeeenllngyyt.e,. iirnnensthuhaeledtedIIidnntddiiunuosnsta,trridicaaeellrctbbraeuuiassnsiiennseeaissntsssnsseeetgegmsrmaeslenentsmt aooonvffdffessdoeettpfbebyrryaaotaincctgohoerrirneIecsnsopdpmouosnedtdifrionnirggbtoiiunstnaciclrnereyaseessaaeirssie2eng0thm1he5eenotfto hEelecEtrloencicrsoanndiacEnsnderEgnycrbguysibnuessisnessesgmseegnmt.eInnt aaddaitiroesnu,ltceorfttahiins change, assets were moved from the Industrial business segment to the Electronics and Energy business segment as a result of this change. "sTTehhgeemfefinnntaasnccfiioatrlanlinlffoporrrmmoaadttisoonnprppesrreensetesendet.end erin herein reflects reflects ththe impact impact ofthe of the preceding preceding product product inereportingchange line reporting change betwen between business business segments for all periods presented. Business Segment Products Business Segment Products Mndeastgme Business Segment Industrial etme Major Products Tapes cowedmomen 5nd DondedTrves, adhesives. vIReed eamesSe SY Tapes, coated, nonwoven and bonded abrasives, adhesives, advanced ceramics, sealants, specialty materials, filtration product, closure systems fo personal bygone products, cousesystems materials, filtration products, closure systems for personal hygiene products, acoustic systems products, automotive compacts, abasic esstnt Fn, sural adhesivnesd pai icing products, automotive components, abrasion-resistant films, structural adhesives and paint finishing and detailing products and detailing products Safty snd Graphics Safety and Graphics cPPoeemrrsmsoeonrnacslipaplrrosteeeccstinioionngppraroonddduuccptrtsso,,tettrcatrfifoaicn pssarafofeedttuyyctaasnn,ddflssoeeoccruurrmiitatyytippnrrgoo.dduuoccttoss,, nccoommgmmarencriacsisallfgogsrraappphhhiilccsstssyysshstientmg,lse,s, nd ll protection products commercial cleaning and protection products, floor matting, roofing granules for asphalt shingles, and fall protection products Health Core Health Care Medical snd srgica supplies, i hes and fection precnion prodocts, rug deiery syst, Medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental nd orthodontic products, eth infomation ems nd fod say, proacts dental and orthodontic products, health information systems and food safety products Flecuonainsd Enersy Electronics and Energy sOOpppltitiiccciaanllgsfiiolmlmusstissoonlosuftoioornntshffeoorrlccellteeucttnrrooennsi,cddeiisesppclloaayymssm,,uppnaaicckkcaatggiiinonggnaannnddd iidnnltteeercrctcononncnnleeccitntdiiouosnntrddieeevsvi,icceoess,u,cinhnssslulteaiteinnsgg aaennnddd ouch monitors, renenable ner component solutions, and instruct proection products splicing solutions for the electronics, telecommunications and electrical industries, touch screens and touch monitors, renewable energy component solutions, and infrastructure protection products Consumer Consumer dSSeppoosnniggneegss, sssyccosautrreiinn,gg bppaaoddm,s, ihhimiggphhr--oppveeerrmffoeornrmtmaapnnrccoeeduccclltoost,thhss,h,occmooensscuaamererpraaonnddducootffsff,iiccpeerottatapepceetssi,vrreeeppmoaostsieittriiiooannlapbrloednoucotttses,s,, ainnddecxoinngsusmyestreamnsd, hofofmiceeitmappersoavnemd eandthepsriovdeuscts, home care products, protective material products, and consumer and office tapes and adhesives ww127 22775500.00112277 beofCotas: Table of Contents BasinsSegment Information Business Segment Information tn TNor se -- (Millions) fy Ter le To To Ta To Industrial oes Ta nC mC mm wo ow Safety and Graphics ee PE EEA Health Care HE tery Wom mom mm Electronics and Energy Consumer Co mt Ved 1 0 an Corporate and Unallocated me oo wh im _ a Elimination of Dual Credit Compe CEE CE Ce Te Te Te Total Company Net Sales Operating Income 2016 2015 2014 2016 2015 2014 $ 10,313 $ 10,295 $ 10,985 $ 2,376 $ 2,256 $ 2,381 5,660 5,515 5,732 1,390 1,305 1,296 5,527 5,420 5,572 1,754 1,724 1,724 4,826 5,253 5,608 1,075 1,109 1,122 4,482 4,422 4,523 1,064 1,046 995 9 1 5 (280) (355) (250) (708) (632) (604) (156) (139) (133) $ 30,109 $ 30,274 $ 31,821 $ 7,223 $ 6,946 $ 7,135 ns or se De in e mites __pCoep ppeta (Millions) Industrial im me me Safety and Graphics ete dooodEomdoomoBoo BoaoW Health Care rita Wom ono hom on Electronics and Energy ao Woam EW om mom 0 Consumer toe Gm imo a Mom Wm Corporate and Unallocated Teeny SmSE Siw Tier TI Tie Semer soe Total Company 2016 $ 9,158 7,479 4,303 4,556 2,504 4~906 $ 32~906 Assets 2015 $ 9,230 7,564 4,403 4,788 2,393 4,505 $ 32,883 2014 $ 8,536 4,939 4,344 5,088 2,434 6,033 $ 31,374 Depreciation & Amortization 2016 2015 2014 $ 407 $ 374 $ 383 264 245 234 175 179 181 241 291 271 114 108 108 273 238 231 $ L474 $ 1,435 $ 1,408 Capital Expenditures 2016 2015 2014 $ 360 215 $ 317 199 $ 395 221 136 168 169 210 211 232 109 124 111 390 442 365 $ L420 $1,461 $ 1,493 Corpor an unaloto prating income ince variety of csrfm, chs corporis inst gina Corporate and unallocated operating income includes a variety of miscellaneous items, such as corporate investment gains and on, orn dev i a oe, Ge anaconda Pioan roo] EATS losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and environmental expenses, rotator teresaar tof pao ackbmeopmioe corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension, stock-based compensation) that the Company may choos nt 0 lt dsl 1s bosim FRc isig loos at of Asoo Company may choose not to allocate directly to its business segments. Because this category includes a variety of miscellaneous em bot ochoom rs mo items, it is subject to fluctuation on a quarterly and annual basis. TM business scgmet porting mers inde dsl ito ies segments oct UsS, sls nd td ceting 3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating rm, Vege loteneaeot oe saat ges neopets pean ome Eom income. Management evaluates each of its five business segments based on net sales and operating income performance, including ted US. ein oor ini US. ls ton As ea, SMpoidsaio] oy roohse dual credit U.S. reporting to further incentivize U.S. sales growth. As a result, 3M provides additional ("dual") credit to those ines gms ling ron he U1 oa xl conbee saneat te pry lr ft pdt business segments selling products in the U.S. to an external customer when that segment is not the primary seller of the product. Frcami. uta spire pina so he Pn Sue Die hi heSoe nd Gropto ics For example, certain respirators are primarily sold by the Personal Safety Division within the Safety and Graphics business Smet: oer he nding lo cl i raat era usm S,max segment; however, the Industrial business segment also sells this product to certain customers in its U.S. markets. In this example, he primaryslingsgn nda wou ae ce To te atl ntal id dh lad the non-primary selling segment (Industrial) would also receive credit for the associated net sales it initiated and the related pimpinne.Th signed opersin nme ed dl crt activity a ile rom persion | approximate operating income. The assigned operating income related to dual credit activity may differ from operating income that eal om act ot sinwdith mh he he eo ocss cn pt eld5 would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is reflected as a ern cd PinnaofDl Cob sch ot ts nd oping nom 1 5 ot se ange. reconciling item entitled "Elimination of Dual Credit," such that sales and operating income for the U.S. in total are unchanged. =128 22775500..00112288 ---- Table of Contents NOE 1. Gopi rs NOTE 17. Geographic Areas -- Geographic area information is used by the Company as a secondary performance measure to manage its businesses. Export sales i, and certain income and expense items are generally reported within the geographic area where the final sales to 3M customers are =made. pene. A TI (Millions) Pim Ti Tae Ta TaN Thar Tw Ta Ta United States Asia Pacific Eg Ya A VA Europe, Middle East and Africa TIES 1 Latin America and Canada -- eR T Other Unallocated oe EE EE Total Company 2016 $ 12,188 8,847 6,163 2,901 10 $ 30,109 Net Sales 2015 $ 12,049 9,041 6,228 2,982 (26) $ 30,274 2014 $ 11,714 9,418 7,198 3,504 (13) $ 31,821 Operating Income 2016 2015 2014 $ 2,948 $ 2,647 $ 2,540 2,560 2,580 2,487 1,046 1,017 1,234 705 706 867 (36) (4) 7 $ 7,223 $ 6,946 $ 7,135 Property, Plant and Equipment - net 2016 2015 $ 4,914 $ 4,838 1,573 1,647 1,512 1,531 517 499 -- $ 8,516 $ 8,515 Tana Erman Ene WE Oh Asia Pacific included China/Hong Kong net sales to customers of $2.799 billion in 2016, which approached 10 percent of =Sm --------na ---- Bo-------- ro mo. consolidated worldwide sales. China/Hong Kong net property, plant and equipment (PP&E) was $520 million at December 31, 2016. I -- NOTE 18. Quarterly Data (Unaudited) PR (Millions, except per-share amounts) 2016 Net sales EoCost of sales DR Net income including noncontrolling interest Vn I S vy-- n Net income attributable to 3M Earnings per share attributable to 3M common shareholders - basic Earnings per share attributable to 3M common shareholders - diluted (reo (Millions, except per-share amounts) 2015 Net sales Ein Cost of sales Er -- Net income including noncontrolling interest mum Net income attributable to 3M DoEE Earnings per share attributable to 3M common shareholders - basic JUEarnings per share attributable to 3M common shareholders - diluted Gross profit is calculated as net sales minus cost of sales. we gw gu we First Quarter RL $ 7,409 a 3,678 Spi 1,278 Tm nl 1,275 -- Sim-- la----ith 2.10 Second Quarter 7,662 3,799 1,293 1,291 2.13 Third Quarter $ 7,709 3,847 1,331 1,329 2.20 Fourth Quarter $ 7,329 3,716 1,156 1,155 1.93 Year 2016 $ 30,109 15,040 5,058 5,050 8.35 2.05 wr Som D0 feb in First Quarter i $ 7,578 3,821 EC 1,201 i ------ 1,199 ------A. EE 1.88 2.08 2.15 1.88 8.16 Second Quarter 7,686 3,858 1,303 1,300 2.06 Third Quarter $ 7,712 3,877 1,298 1,296 2.09 Fourth Quarter $ 7,298 3,827 1,039 1,038 1.69 Year 2015 $ 30,274 15,383 4,841 4,833 7.72 1.85 2.02 2.05 1.66 7.58 129 22775500..00112299 TabeofComets Table of Contents Hem. ChangesinandDisagreementsWith AccountantsonAccounting andFingalDisclosure, Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None None. Tem 9A. ConatndPrroocedluress. Item 9A. Controls and Procedures. aE.xeTThechCuetoiCvmeopOmafpfnainycyecracanrridrieCdohouiutttaannF ieenvlaaculitusailtoiOonfn,,fuuinndcodeeefr rttthhh,eee sseuufppfeercrvvtiivsseiioonnnesnaonddf wwtihietthhdtethhseigppnaasrrtntiidcciipppaaettiioronnooofnfioistfstmmhaaennCaagogemempmeaennntyt,,'iisnncc"lluduiddsiicnnlggotshtuheree Chief Chief pcEcoooxnnetntcrruootltlhissavtaaennvOddafptpfirricooeoccreneda,dnurdreteshCse""hC((iheaaissftFddeieEnffxaiiennnceecudditaiilinnvOethhfefeOicEefcrx,chcohaafnantghngeede CAeAfchfcteitcRRttiuvFlleiennae11ns3cs3ai-os-1lf51tO(h5ee)0)dcaa)essioogcffnotnthhacnelcduedndoedpdeoofrtfathtthihtoeentphpoeeeCfrroiitohomddepccCaoonoxvymce'rrpeesaddndbbiyyys'sctt"hlhdiiossissreceeplcpoooostnur.ttr.reoBBlaasssaeenddd proceduraers tlie, upon that evaluation, the procedures are effective. Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and bre.pTTohrhteeinCCg.oomampspdaanenyny''ess dmmaannntaahggeeemmEeexnnctthaiissnrgseepsopAnocsntisRbibullleeeffoo1rr3ce0sst5tab0bl.liisshhMiiannnggaaagnneddmmemnaatinictaoninniidnungacagtnaaaadddeeaqquusaatsteeessnyyststetomefotofhfeitnCteoermmnpaaal nccyoonnsttrnooflleoomveaerrlfnciannoacnricoiaall oCroevvopeemorrmrftTiiinnnsagainn,occaniisalldirnereefpipnoeoerrrdttiianinngglbtCbhaoaesnseetEddrxoocolnhn--atnthgheIenfrtAreaacgmmrteaeRtnweuodolrerFkk1rte3asaamt-bae1lbw5il(oisfsr)hh.seeMdd(2abb0nyy1a3t)tghh.eeemCBCeaoonsmmtemdcmoioinnttdtesuheceotoefafdSsSappsnooenansnssosotreris,insnmggmOeOarnnrtggaoagafnenitmzhieaezntiCtoanotcsmooinopfocfatlntnhhuysdee'esTTdirrnheetaaetsdr,dnwasaalyycoofntrol CDDieoemcmcaeemmcmbi]bseesrirro33n11e,,in22p0I0n116to6es,,ronrtthhafeeltDCCCeooiocnmentnmrpoobalngneyr'sI31nii,ntnett2eger0rmn1aaa6ltlehcdcaooFsnnrttbarroomollcevowaveuoerdrrikfftin(ne2ada0bnn1ccy3iia)lP.lrBrrieacpesooewrpdtaiconoangibrtioshsutefesefaeifcsCetsocneitosivfvgseemer.esTnThe htCL,LeomPCm,aopnamaagpnieaynmnd'yeesn'psteinncndoeteennrmcntlaaurldececgodiosnnttttheroaorltel,dooapvsvuerborlfic financial reporting as of December 31, 2016 has been audited by PricewaterhouseCoopers LLP, an independent registered public ahcecCouonmtpiangnyfsm, stetrnaatleodnttohevierrepToratcwsh)icrsepnocrutdinesgdoefriDne,cewmhbiecrh3e1x,p2r0e16s,es an unqualiid pinion 0 he actives of 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 December 31, 2016. Ther was nochange in the Company's nema contol oe Financial rphoat orccurieddunrin the Company's most c. There was no change in the Company's internal control over financial reporting that occurred during the Company's most rece compieied val quai that as materially aftoe,i esonsbly ely o materially aft, the Company's inkl recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal Control ver nancial rporing control over financial reporting. i"hTTehheeeClCioocmmeppnaacnnyyyoiifssciimmepprlleenmmenenantntiicnniggaaalnnacenndeterrerplraistseedrrreeassoosuuarrcccieeoppnllaapnrnnoiicnengssg(e"sEE.RRTPhP"g")r) assydysutseamtl ooinnmpaalwewmooekrnldtdwawtiiiddoeenbibassaeisxissp,,ewwchhtiiccdhh0iissoseexcxppeeccittneepdd thtooaimmpsoprervoosesveer the efficiency of certain financial and related transaction processes. The gradual implementation is expected to occur in phases over thcoentnoexltoevevrefsinanacriasl.rTehpoertiimnpgleamnedntwaitliorneqouif+re weosrtiknbgwifdoereEfRePctyvsencs.will kel aft he proccss that conuttintael 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. "TheCompanycompictod implementation with resect 0 cemoefcnrts process subprocesses mid The Company completed implementation with respect to elements of certain processes/sub-processes in limited subidirieslocations and will como 0 oll-ut he ERP ysisoer the nest several years. As with sny nw information subsidiaries/locations and will continue to roll-out the ERP system over the next several years. As with any new- information technology aplication mpl. thi pplication, song with the ermal contol ver finial poring included his technology application we implement, this application, along with the internal controls over financial reporting included in this process, was ppropriatl considered within th esting for eectivences ith rspet the implementation i hee stances, We process, was appropriately considered within the testing for effectiveness with respect to the implementation in these instances. We concluded. a art ofcu vation described in the above pargraphs, hs th implementationofERP in these circumstances has concluded, as part of our evaluation described in the above paragraphs, that the implementation of ERP in these circumstances has ot mately afcteoud ermal contol ovr nancial reprig. not materially affected our internal control over financial reporting. Hem 98.IOnshfeorrmation. Item 9B. Other lnformatio n. None None. 130 130 22775500..00113300 Table of Comes. Table of Contents PARTI PART II I Documents Incorporated by Reference Documents Incorporated by Reference In response to Pat, tens 10, 11, 12, 13 and 14, partsof the Company defini rosy ssn (lb fd posit to In response to Part III, Items 10, 11, 12, 13 and 14, parts of the Company's definitive proxy statement (to be filed pursuant to Regulation 14A within 120days aftr Registrant's hal varof D-eceombedr31. 2016) for smaual meting f bc held on Regulation 14A within 120 days after Registrant's fiscal year-end of December 31, 2016) for its annual meeting to be held on May 9 2017r,e incorporatbeyd rerein is Form 10K. May 9, 2017, are incorporated by reference in this Form 10-K. emItem 1100.. DDiisrsecttoorrss,, EExxeeccuutitivveeOOffffiicceerrssaannddCCororppoorraatteeGGovoevrernnaannccee.. "TTfohrhteseaiinnnffnoourrmmaaalttiiomonn rreelaetlionfgtfsttootodidciiikrrhcenotclotndorgersrssagann1dd0 bnneoomhemilndieeonsnoeoMffea33yMsM9,iis2ss0te1t7ffoo(rr*tthh3MuunPdrneartytdhheeSsceseappimtriooenn n""PP"rraoonp)pdoosssaalliNNnoco.o.rp11o3"ria0nt'e3dM sby'srepororyxyesstiasthetemreeenintnt 4fIIon0nrff5ooirtrsm4m0aaa7tnt(iin0oouXnn3a)lsa,hbmoo(euuett4tieen)xcgeuacotnufidtisvv(teo4ecXaok5ffh)focicoleedfrreRsrsesisgstaoiilnnabcctelliuuhoddneeeldddSiioKnnnIliM teecmanyo11n9o,otf2fi0thhn1ii7ssuAA(n"nnn3dnM uuaatlPlhrRRocexeapyppootrSirtttoanootsnnemFF"eooSnrremtsm"i)o11an00n.-dK1K.6.i6sTT)ihnheeecnoiircnnpflfoooirrramsmtaleatdtOiiowbonnnyerrrreeqisfeuheriierpendRdceebbayyherIertieeminmnsg.s C4CBo0yom5mpS,4ltpio0lcia7akn(nhccoce)le("d,3"e")r,"CsC.(odro)pr(po4or)raaatnSteedtoGG(cdkoo)hv(on5el)rednoearrfnRncNeoecmgAieuntlaa3AttLiMiMo.onn--sS"-,KIedniesntctiiPofnifrctiaayticinoAe,ndc, uEEevnvasdaleulNuraoattihmtioieonnn,ca,atpaainntoiddonnsSSs"eel"laeeSnccetdtciiotoinnoonofRf1oNN6lo(oammo)fiiBntneheneeeeseNf,,i,o"cmi"ail~naOoNtwm oinmnigiennraseenheedispsGRProrevoopeppororemstiendndcge CBCinoyofmmoSrimtmotaicttektieh"oeno"ldsasennrisddn,"c"oCC"rooprroppSrootarroatactebtekdyhGGoorolvdevfeeeermrrnNaeannonccmceeeienAAratttiio33nnMMs"-,- Board Commits Audit Comite" of the 3 " Proxy Access Nominations" and " Role of the Board Committees Audit Committee" of the 3M Proxy Ststcment Nominating and Proxy Statement snd such Governance and such information is incorporated by reference herein. Coofdiec. All of oar ploy, ndingau Chi Exccutivs Ofc, Chit Finsacisl Officer andChiefAccounting Offcr Code of Ethics. All of our employees, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer and Controller ar recived 0 side by M's onssanding busines condoct plies to care thatoubusiiconndeuctsed no and Controller, are required to abide by 3M's long-standing business conduct policies to ensure that our business is conducted in a consisenl egal and chica manner. 3Mhasposed the et ofsch codeof icson tswebsite consistently legal and ethical manner. 3M has posted the text of such code of ethics on its website (hp 3M.com usincsscondact). At thesme website,any tre amendment the codeof tics will asobe posed. Any. (http://www.3M.com/businessconduct). At the same website, any future amendments to the code of ethics will also be posted. Any psc may request coof tphe caydeof ethic, ano Gos by wring ous athefollningaddres: person may request a copy of the code of ethics, at no cost, by writing to us at the following address: 333MMM CCCaoonmtmeprpa,annyByuilding 220-1 1-09 AS3SttMt.cPPnCtaaoeulnnl,,:teM Mr,VNNiBu$5Pil55rd11ei44ns44gi--d121e020n000,0-01C1oWmp-l0i9ance and BusinessConduct Attention: Vice President, Compliance and Business Conduct em 1.ExecutiveCompensation, Item 11. Executive Compensation. "TiTnhhfeeoriinmnaffotoirrmomnaatutiinoodnne rrreehqqueuircieardpbbsyyonIete*--mm 44C00o22mopofefnRRsegaeugtluiaolatntiiCoonnoSS-mK-KiitisseccRooentptsoanrintee"dd uuannndddee"rrDtithhreeeccctaaopprttiiCooonnmssp"eE"nExsxeaectsuittoiinvveenCCdoommSpopecntksoaOtwinon"ne"rse(ehxxiccplluuddiinngg the the Ginufoirmdaltiionnouefntsdhe"er t3heMcParpotxioynS"stmcCnotm.peSnuscahtiofnorCmoamtimointteie incorporatebyd reference Report") and "Director Compensation and Stock Ownership Guidelines" of the 3M Proxy Statement. Such information is incorporated by reference. "TTdhheeeriinnhffoeormmcaaattipiooinnonrresqi"uCirodemdpebbnyysaIetteimmosns4C40o7m(e0m)i(4e)s7aannRdde(p((6eoX)r(5t5"))eoaofnfdReXge"goCuloltma)pitieoonnnsaSStK-iKoniissCccooomnnmttiaiitnnteded IintnnheetEhrxleoe"cEckxsusetcnuidtvivseeidCCeoomrmpPepnaesnrastatitiicoonni""passeetccoittfiioootnnnhe" under the captions "Compensation Committee Report" 3isMinPcroorxpyorSateadembeyntr.efeSruecnhceinformation (the th the 3M Proxy Statement. Such information (other than the Compensation Comite Report whic shall and "Compensation Committee Interlocks and Compensation Committee Report, which shall no be deemed10 be "fled Insider Participation" of the not be deemed to be "filed") is incorporated by reference. nt131 22775500..00113311 sic ot Conn Table of Contents om 12 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. FE ------ The information relating to security ownership of certain beneficial owners and management is set forth under the designation "Scr Ovofn Mmsgi emnt nd "Sut Onn of Crain Benlcl Overs" he 3M Poy Steen snd "Security Ownership of Management" and "Security Ownership of Certain Beneficial Owners" in the 3M Proxy Statement and such mation is peedby eres hr such information is incorporated by reference herein. Bity compensationpon information aof Descnber 1, 01 follows: Equity compensation plans information as of December 31, 2016 follows: Fauiy Compensation Pans norton 1) Equity Compensation Plans Information (1) manner Plan Category ty compensationplansapprbyosaerdy holders Equity compensation plans approved by security holders Sock opr Stock options Rowiod sock sits Restricted stock units Peformance hares Performance shares Noo-cioydirector deferred stock its Non-employee director deferred stock units ToutTotal Employ sokpre po Employee stock purchase plan soot Subtotal ToutTotal we A Number of securities to be issued upon exercise of mprys outstanding options, warrants and rights attri B Weightedaverage exercise price of outstanding wiand options, warrants and rights ag ee C Number of securities remaining available for future issuance under shoFlEieYd equity compensation plans (excluding securities reflected in column (A)) sean 36,196,232 sss 2,185,046 sso656,278 207 242,779 Sass 39,280,335 =-Saas 39,280,335 Tomes 39,280,335 se $ 112.07 --=-=-=-ETE] 36,865,814 Ties 27,116,857 omer 63,982,671 emer 63,982,671 07 Icon B, th weighavrageexter il appiale sock pins. In column C, the umobfseuirs (1) In column B, the weighted-average exercise price is only applicable to stock options. In column C, the number of securities eminin well foe es ot stock oon, reed Sock, nd Souk vad tnt dss remaining available for future issuance for stock options, restricted stock units, and stock awards for non-employee directors is ovat oh ad ek aly ih pt os He approved in total and not individually with respect to these items. Tim 13,CetinReltnsips andRelatedTransactions, andDieta Independence, Item 13. Certain Relationships and Related Transactions, and Director Indeoendence. With sect rain ltonsip od ltd satiaosnt thn Hm 404ofRelation SK, no mars ue With respect to certain relationships and related transactions as set forth in Item 404 of Regulation S-K, no matters require ickore with Feet fo machewin eed pr. Th mormon ried He 4040) wdli Apo Reulstin disclosure with respect to transactions with related persons. The information required by Item 404(b) and Item 407(a) of Regulation SX is oman nit th lon-Corporte Covance SM de the cots Dit Idndene" ad Releod Pen S-K is contained under the section "Corporate Governance at 3M" under the captions "Director Independence" and "Related Person Transco Poly and Procedures" ofthe Pray Stent and sch formation incorpboy eee ein. Transaction Policy and Procedures" of the 3M Proxy Statement and such information is incorporated by reference herein. Tim 14 rAncpcounFotsanidSenrvicges Item 14. Principal Accountin~ Fees and Services. "he nformation eatin oprincipe cumin fs nd servis Fh he etn oiled" Audit Comite Mater The information relating to principal accounting fees mad services is set forth in the section entitled "Audit Committee Matters" undehre gn Comitios Pol i Aon of Adi and ermal No Aut Services fh Independent under the designation "Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Necouning Firm" and "Foeof ho Idepndent Accouming Fin he Proxy Senco nd ah noma s esos Accounting Firm" and "Fees of the Independent Accounting Firm" in the 3M Proxy Statement and such information is incorporated oy een hin. by reference herein. 1132 22775500..00113322 TabeofComets Table of Contents PARTIV PART I V em 15.ESxhibtitsaFinatncialemeScnhedutles Item 15. Exhibit s, Financial Statement Schedules. 9S(aa)1e()1m)eFFniinntaaansnccitioahlle SSbtteaagttieenmmneeinnnttgss.o. fTTthhheeisccdoononscsouolmliieddnaattt.eedd fnncil finaaacial statements statements fileda filed as artpart of thisreporarte of this report are std listed in in the the index index 10 to fnncial financial statements at the beginning of this document. (W(4ah2))i(Fc2hi)tnFhaeinycaaniecaialrl SSetatqteemuoemnibterSScccahehueedsddueulleehsse. FFriinniaanneccidiaallissntfaeotemrmmeaetnnitossccihhseenddcuuhlleussdaadreeoi omtihiettdeCdobnbesecceaaluudssteeeoodfftFthhieneaaanbbcsisaeelnnccSeesooeffmhtehenectcosondnoidrtititihooennsmsouutnendsdeerr which they are required or because the required information is included in the Consolidated Financial ctheorento.sTehesnigannicfiicaalntssseumbesnitdsyofuncomslidated sbsidiriaes omitted because, considered th thereto. The financial statements of unconsolidated subsidiaries are omitted because, considered in the agregas Statements aggregate, they ould or the notes they would otnot constitute a significant subsidiary. (4) Exhibits. Theexibisar ithe ld wth his roror incorporated by erence otis pot. Exhibit mbers 10.1 (a) (3) Exhibits. The exhibits are either filed with this report or incorporated by reference into this report. Exhibit numbers 10.1 {rough 10.31 sre management sonraetors compensatory ans oraangencats. So (4) Eis, which follow through 10.31 are management contracts or compensatory plans or arrangements. See (b) Exhibits, which follow-. Ebi, (b) Exhibits. 3)Avileosf Incorporation and bylaws. (3) Articles of Incorporation and bylaws G1)(3.1) CCMaeoryntiff1ic4ia,tt2e0oo0ff7iincnorpcoroatironp, aasos aarmmeeannddteeddiaassoooffnMM,yay 11,200, 11, 2007, is is incorporated incorporated by by eer reference romfrom our our Form Form 8:8-K died dated 02)(3.2) AAMFmomaeryemnnd11d4ee,Kdd20aad0nna7ddt.eRRdeeNsstotaavtteeemddbBleyarlwa1ws0s,,,20aa1s5a.adodptedoaaspooffNNtoovveeemmbdbeerr 10,201, 10, 2015, aeare incorporated incorporated by by reference reference fomfrom our our Form 8-K dated November 10, 2015. 4 Instrument definingth htsofscary holder including indntures: (4) In((s41t.r1u))mentsaIInsdndedecfenienntusainrrseg,o,trddhaeetersdidgtahas,stsoofofwNfiNtosoehvcverueemrmsibptbyeecerhtrof11l7od7,,eTr22s00,s000i0n,e,clnbbueeodttiwrwndeegeeebinnnd33eMs0neturaarnnieddes:sTT,hheeiBsBanannckkoroopffoNNretewwedYYbooyrrkkrfM MeeeelllnlooennsTTfraoumsst uCCorommFpoapnarynm,y,3NNK..AA., (42) SadFisatrtssedtudcSDcDuepeespccseloemermmtbrbeeuners7ttr7e],,e2,2i00wn00d0i0et.hn. respect to turedated 3M's sof senior debt securities, is incorporated by reference dl 29,2011, 0 Indenture dated aofNovember from our 17,2000, Form 8-K between 3M (4.2) First Supplemental Indenture, dated as of July 29,2011, to Indenture dated as of November 17, 2000, between 3M aSencdurTihet,Bai kinocforNpeorwatYeodrbkyMrelfleonneTsrufstoCm oour FmormNp-1A0.a-,aQfnosrutcyhcess,quoarrtrer sensdewdiJhunrees30e,ct20011IMssenior debi and The Bank ofNew York Mellon Trust Company, N.A., as successor trustee, with respect to 3M's senior debt (10) teil cntrcnsd securities, is imnacnoarpgoermaetendt compensation pansand argent: by reference from our Form 10-Q for the quarter ended June 30,2011. (10) Material ((1100.21)) (10.1) c3F3oMoMnrtmrCCoaoocfmtmspSpaaoannncdyykm22Oap00nt11ai66goLneLmooAnnewggn--atTTrceedorrmmAmpgIIernnneccseeaamntteitioinvvnteepuPllnaldannnesriias3sniidMnncacCoororrrappmnoopgrraaeatmtneeyded2nbb0tysy1: 6rreefLfesorrennngcc-eeTeffrrroommmIoonucureFFnooirrvmmP&8la--KnK dtd May 12,2016 idnatceodrMpaoyra12t,be2dy016. (10.2) (103) Form of Stock eFofrrmeonfcSroockm reference from AOoopuupprrtrieFoFcnooirraAmmtwi:8oa-nKrKdRdiAdagagthtereteddAeMM mwaaeayrnydt11u2A2,ng,dr22ee00re113m6,Me. ntCoumndpearn3yM20C1o6mLpoanngy-T2e0r1m6 Incentive Plan is incorporated Long Term Incentive Plans by (10.3) (104) FiiFnnoocrcromomrspoopoffrrasSRteietsoddtcrkbbiyycAtrrpeeedpffereSerrteceonincacckteeioUfrnnrooiRtmmiAgoowhuuatrArFFdwooArarmgrmdr88eA-eKKgmreeddneaatmtteeueddnndMMteaurayny3de11Mr22,,3C22Mo00m11pC66a.onmypa2n0y1620L1o6ngL-oTnegr-TmeIrnmceInntcieventlivenPilsan is (10.4) (103) FiFinonocrcronomorrppPooorferaaRftteeeoddsrtrbbmiyycatrerneedfcfeeSerrtSeeonhncccakeerUefrrnooAimmtwAaoorwuudrrarFAFdogoArrrmemger8m8ee-eKKnmtdednuaittneeduddenrMdMe3aaryMy3CM11o22,m,C22po00am11n66p.ya2ny0 2016 Long-Term Incentive Plan 16 LangTerm Ince Planis is ic o r p r s ied (10.5) (106) bFb3yyoMr2rrmee0ffe0oerrf8eePnnLceceerofnoffrgroomTmmearnaomcurer ISFFnhoocarrmremenAs58.-ewKKPadrdadaanttAee(ddginrMMecaelauymydei11nn22gt,,ua22n0m01de16en6.r.d3mMentCsotmhrpoanugyh20Fe1b6ruLaornyg2-Te2r0m16I)ncisenntciovrepPolranaeids incorporated by reference (10.6) (107) 3fFTrMooormmm2o0oo0ufur8rAFFLgooorrrnmemgs-mT110ee0-rnKKmfffoIoornrrcSttethhnoeetcieykvseeOarpPrtleciannonddn(eeiGddncDDrleueacdceienfnmmogbtbeaermEr3x1e3en,1cud,tm22i0v0ee11n55Ots.fftihcreorusguhndFeerbr3ua2ry002,820L1o6n) :isTienrcmoIrnpcoerantteidvebPylraefeirsence (10.7) (108) FiFinonocrcronomorrppooorfraaASttteegoddrcebbkeyyOmpreetenirfoteenrfneonrAccgeSertoefrrceookmmmeOncoptuutfirrooFnFroooGrrpmtrmiaon88nt-sKKtgoddraiEatenxetddeecdaMuttyaiovyeE113xO3,c,f2ef2i0u0c8e0ir8.vs. under 3M Officers u 2008 Long-Term nde the 3M 2008 Incentive Log Te Plan is rm Incen tive (10.8) Form of Stock Option Agreement for P3l1an,,30c0o.mmencing February 9, 201, Plan, commencing February 9, 2010, is incorporatbedy options granted to is incorporated by erence from ou Executive Officers reference from our Forunder Form 10.fo the yarended December the 3M 2008 Long-Term Incentive 10-K for the year ended December 31, 2009. 1133 22775500..00113333 TaTabbeleooffCConotnetennttss (109) (10.9) (10.10) (10.10) ((1100..1111)) (10.12) (10.12) (10.13) (10.13) (10.14) (10.14) (((111000...111565))) ((1100..1167)) (10.17) ((1100..1185)) (10.19) (10.19) (1020) (10.20) (((111000.222121))) (10.22) (103) (10.23) ((1100.2244)) (1025) (10.25) (1026) (10.26) ((1100.2277)) (1028) (10.28) (1029) ((((((111111000000:...332333019012)))))) (10.32) ((1100:.3335)) F oF"roermmmooIfnfcRReeneststitrrviieccttleednd,SSotfoccfkkUcUninivittAAFgegrbrereueeammreyennt9,t ff2oo0rr10ree,ssttsriictitenedcdorstptooorckaktuuenndiitbtssy ranted o reese granted to Exccutive Offersunder the 3M fErxoemcouutivFeoOrfmfice1r0s-Kunfdoerthteheye3aMr Log: cLaodnegt- TDDFeoeercrcmememomIbfnbece3rernM33t11i2v,,0e22100P000la99Pn.e,feoffremcatinvceeFSehbarruearAyw9a,r2d01un0d, eis incorporated the 3M 2008 by reference Long-Term from our Incentive Form 10-K for the year Pani incorporated by ended FrrFeeooffrreemrmreeononfccfeeS3tfrMorocokm2m0O1oop0uurirPoFFenoorfrroAmmrgmr.8ea-KKenmcddeeaanSttteehddfaorMMreaUAar.SrcwchhaEr44md,,pu22l00no11d0y0e.e.retshuen3dMer2030M8 Long-Term Incentive Plan 2008 Long-Term Incentive is incorporated by Plan is ncorporated by FrrFeooefrrfemrmresnooncffceSRfrteroooscmmtkiOootuupdrrtiFoFSnooorrcAmmkgr11Ue0n0ei-mKKt eAofnogrtrrfttcohhmreeeUyyne.eSatar.roEeernmnddUpeezlddo.yDDeeEeecmcsepeulmmnobbdyeeeerrre33s311M ,d, 22e20000r0088.83. LMo2n0g0-T8eLrmongIn-cTeenrtimveInPcleanntiivseinlconrpiosrated by Fi3innoMcrc2omor0rp0opof8rraRatMteeaddsntrbbaiyycgtereeemdfefeSnrteotoncSrckteoUfrcrnkooimmtOAwoogunurreeeFFmroorresmmntP11fr0o0o-rK-gUrff.aoSorr.t(tEhihenmeclypyuleadoaiyrnegneendsadmoueenddndDDdermeeec3cneMemtbs2be0ehrr0o833u11L,g,o22hn00Fg00e-85bT.reuramryIn2c,e2n0ti1v6e)Pilsanncisorporsd b3bFyyMorrrme2efof0ee0frr5eewnnMacceenadnffraooggmmeromeouceurmnretFFnSoottrrommfcko11O0n0-owKKnn-ffeourrsahotlhipieriPyedraetosargrorehceannmkddoeee(pdditnDDiclceeuscdceigemnrgmabnbeatrmee3d3re11n,u,d22mn001de15n5.t.tsh through February e 2005 Manageme 2, 2016) ntStock is incorporated Omer FPPArormooremggnrrdaaomemf,d,aawiissnaiidrnndccRooaerrgppxrooetrreeaamttdeeedd3ntbbMyfyoVrrrIeenfPfeoernrEee-xnqncccueeeaslsffirfroPioemamdnooisuutsorrcFFFkiolooerrdmpmthieo.8rn-eKKswigtddrhaaa,ttneetddedMMauaynyde116r6,,th22e00002550..05 Management Stock Ownership AAA3mMmmeeenDnnedddfeeeedddraraaennnddddCRRoRemeespssttteaaantttseeeddadt333iM MoMnVVVPIIIPPPl(E(VaVxooclaelauusnmnstnetaPanrrldyay,neIIdninsvvtefehisslrtetomdmueeghnnhettrFePPewllbaarinntuh))a.rPPylluo2s00PP8lo,annsiisifFnicleeoddrphhoeerrraetnweidtihtbh.y. reference from our Form 8- A3KKmMddeaanDttdeeeddmfeeFFrnereebtbdrrouuCfaaror3yymM1p144e,D,ni22sf0a0e0t0i8ro8.en.d Plan, as amended through February 2008, is incorporated by reference Compensation Plan i incorporatedb fren rom our Form 8-K d from our Form ated November 8- A13144,mM, 22eDn00ed00fm88.rerndt of 3M Deferred Compensation Compensation Plan is incorporated by reference from our Form 8-K Excess ln iincorporated by reference fom ur Form 10K forthe dated year November ended 3DD3MeMecceeDPmmeebrfbfeeeorrrrr3e3m1d1a,,nC2c2o0e0m00A99pw.eanrsdastioDnefEexrcreesdsC Plan is incorporated by reference from our Form 10-K for ompensation Plan is incorporated by reference from our the year ended Form 10- fort h e y ear `3e3nnMMddeePEddexrDDefeorecrcimeevmmaebnbecAerenr nA33u11wa,, l2a20r0Id00n0s9c,eD. netfievrereld nCoimipnecnosraptoiorantePdlabny is incorporated by reference from our Form 10-K for reference fom ur Form 5K ded May 14,2007. the year 3M Executive Annual Incentive Plan is incorporated by reference from our Form DFeoscmri1ptKiondaotfedcAhuagnusgte0, 320M05C,ompensation PlanforNon-Esploeye Ditctors is Description of changes to 3M Compensation Plan for Non-Employee Directors is incorporatbeyd reference 8-K dated May 14, 2007. incorporated by reference from from our our F3r3eMoMfremCrCeoo8nmmc-pKeeprnedsnoaastmaettdiiooouAnnruPlgFluoansrntmff8oo,1rr20NN0Ko0on5nf.--oEErmmtphpellyooeyyaeeree eDDniidreeeocdrtoDsr,es,caaess maammbeee3nnr1dde,ed2d,0, 0tth4hrroouugghh November8, November 8, 2004, 2004, is is incorporatbeyd incorporated by dAAraemtmfeeeerndenNdndomcmveeeenfnmrtotbomoeffro33uMM1r4,FCC2ooor0mmm0pep5n1es0n-asKattiifooonnr Pan for the year Plan for Non-Eaployos Directors is ended December 31, 2004. Non-Employee Directors is incorporatbeyd incorporated by reference reference romfrom auour Form Form 5.8-K AdrAeammtfcerednendnNdmcmoeevenrentmot moobffeor33uM1Mr4F,CCo2oor0mm0mp8ep.ne1sn0as-atQtiiooornn tPPhlaeaqnnuaffororrtNNooennn--dEeEmdppSlleoopyyteeeemDDbieirrte3ct0too,rss2a0as1so3off August August 12,2013 12, 2013, iis incorporated incorporated by by reference from our Form 10-Q for the D3eMceEmxbeetri3v1e,2L0i03f.Insurance Plan, a 3M Executive Life Insurance Plan, as amended. s incorporatbeyd reernce quarter ended September 30, 2013. amended, is incorporated by reference fromou Form from our Form 10:forthe 10-K for the arended year ended DKSSuefmceummoabreyrmyroeo3fatf1rPeP,eeehr2nrs0sdo0roeen3nad.allDFFiiennaacnnccieiaallm3PP1lbla,an2en0ni0irnn5gg SSeerrvviiccees for for 3M Executives 3M Executives iis incorporatbeyd incorporated by reference reference from from aur our Form Form 10- 10- K for the year ended December 31, 2003. n3MdepolDiecyceomnbreirm3b1u,r2c0r0c6atof incentive 3M policy on reimbursement of incentive payment payments iis incorported incorporated by by reference reference from from our our Form Form 10K10-K forthe for the csryear AeAAnmmmdeeeenndndddDeeedddeacaaennnmdddbRRReereess3stt1taa,tteee2ddd003336MMM. NNNooonanggquuuaaallliiifiifedid PPPeeennnsssiiiooonnn PPPllaaannn IiIisis ffillleeedddhheherererewewiwtiithth.h.. AAAAmmmmeeeennnnddddeeeeddddaaaannnndddd RRrReeeesssstttaaaittteededddi333vM MMe-NNNeoaoorannqqgcuurueaaadlliiilfftiiieeaidd PPgPeeennnrsssiiioooennn ePPP5lllaaoamnnfnMIIIeIIaIlrisniscsfhifltliel,eddd2hh0he1eer6rer,eewwwiiitihtthh.i.ncorporated by reference fomour Form 3- AKKRedmgdaiaetstntoedrddaetdMMiaoaanrnrccdRhhirge11hs11,tt,ast22eg00d11r6f6i.evee-ynearacsroefdiAtuaggursetem4,en20t0a9s, of March btwn 9, 2016, is incorporated 3M Company and State by reference from our Stet Bank and Trust Form 8- Registration Rights Agreement as of August 4, 2009, between 3M Company CouormpFaornmy 5asKInddaepdenAduengtosFitd,uc2i0a0r9y.of the 3M Elooye Retirement Income Company as Independent Fiduciary of the 3M Employee Retirement Income Plani incorporated by reference and State Street Bank and Trust Plan, is incorporated by reference fomfrom our Form 8-K dated August 5, 2009. Filed herewith, nado to tens, f ny, specifically identi above Filed herewith, in addition to items, if any, specifically identified Q(1D2)) CSlooubsitodnaoorffmiheoe Roefgicsatmrainntg.s to fiedcharges. (12) Calculation of ratio of earnings to fixed charges. above: @Q((223n31)))) Subsidiaries of the Registrant. CPoonnseenrtotofaitnodmeeprendentregisteredpublic accountingfirm. Consent of independent registered public accounting firm. (311)(24) (31.1) Power of attorney. CSeecrtiifoinca1i3o5n0oftheChief Certification of the Chief xceutve Executive Ofc Officer pursuant pursuant 0to Section Section 32302 ofthe of the Srbanes-Oney Sarbanes-Oxley Act Act of202, of 2002, 18S. 18 U.S.C. Section 1350. 1134 22775500.00113344 TabeofComets Table of Contents ((3311.22)) CCSeeocrttriifoinicaa1ti3on5n0oofftthheeCChheietfFFiinnaanncicsiall OOffffiicceerr parse pursuant 0to Section Section 302 302 of of hethe Serbans-OnlAecyt Sarbanes-Oxley Act of 202, of 2002, 118 USC. U.S.C. ((3322.1.1) ) CCSSoeeecrcrtittiiifofoiinnccaa11tii33oo55nn00o.offtthheeCChhiietf EExxceecuutitinvse Ofc Officer pursuant pursuant 0to Section Section 96906 ofthe of the Sarbanes-Oxley Sarbanes-Oxley Act Act of2002, of 2002, 18S C. 18 U.S.C. (322) (32.2) CCSSoeeecrcrtittiiifofoiinnccau11tii33oo55nn00.oofftthheeCChheietfFFiinnaanncicsiallOOfffificceerrppausrssuaant 0to Section Section 06906 of of hethe Sesbans-OnlAecyt Sarbanes-Oxley Act of of 202,2002, 18 18 USC. U.S.C. (1(09915))) TM MShieiecnnteeiFooSSnlala1foe3wyt5iy0n.DgDiifssiccnllaoonsscuuirraeelssi.nformation from 3M Company's Anus Reporot Form 10K for he period ended (101) (TDDXeheBceceeRfmmoLbl:bleoerwr13i3n11.tg,h22ef0i0Cn11oa66n,n,scolfiailleliedddinawftioetirdtmhhSathhteiesonSSeEEfrCCommooonnfe3nFFMeenobbCrrmuuotaamrryypoa99r,n, yh22e'00sy11A7c7,n,anffrouorarmnlmdaaRtteeteepdddoDriitnneoEEnxcvFteoeenrsmnmib3sl11be,02-BBeK0uu1srsfii,onnree2tshsseRRp0eeepnproiodor1rtdti2inen05gng1d4LL.eiad1nngg)uustahggeee CC(CXooonnBnssRosoollLilii)ddd:aaat(tteiee)dddthaSSettlaCteeaomnneseotnlStiohdoefafettCeCodaommSpDrtpaeertheecehmneesenminsvbtievoee3fr1IIInnncc2coo0omm1m6eee faffooodrrrt2tthhh0e1eey5yy<eeaaarrrssseeetnnnhdddeeeedddCoDDDneeescccoeeelmmmbdbbeteererrd333111,S,,a222t000111e666,e,,2n22000o111f555aCaahnnnadddn2g220e001s11444,i,,nG((Eiiiiiq)i)u)itthtthheyee eCffoonorrdntehshdeoelDiyydeeeaacarteresmdebeBnneddarleead3dn1cDD,e2ee0ccS1eeh6mm,ebeb2tee0arr1t 353D11 e,acn22e0d0m11266b,0,e1r224,00311s153,n2daa0nn11dd6)22Na00on11td44e,,2s((0v41))o5tt,hhCe(eoCinvoCs)nootslhnoiesldoCialtidodeanadtsteeoFddilindSSaanattacetitderamlcSenStnattteeoomfmfCeCaenatsnsohhf FFCllohowawn-ssgfefoosrintthhEee qycueaiartryss ended December 31, 2016, 2015 and 2014, and (vi) Notes to Consolidated Financial Statements. Hem 16. Form10KSummars. Item 16. Form 10-K Summ arv. AAlocFFaootrermmthe1IO0c--KoK rssurmemmsanpryopinsredpomrivosniviidgdneeddFoaartmtthhe10-bbKe.,geiwnhngeinrgiootfhfntethidisnsiddsoiocccuuonmmesnegtni,t,fwiltilthhphhryeypspeeenlrtleiidnn.kkeTedhdcecrrososussm-srmefaferenryedcnoeccses.s.nToThhiissinaaclllllouodwwesscuusseeerrsstotocPaaestaisli1lyy lioncfaotremathtieocnotrhreatspionidncinogrpiotreamtsedinbyForremfer1eOn-cKe,fwohemre ture roy semen lng. 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. 135 135 22775500..00113355 TabeofComets Table of Contents SIGNATURES SIGNATURE S PPreuuprrosrsutanfntotbtooetthsheeigrreneqqeuouidnrietmrsmebnetnesotolsffbSSyeecctttiihooonnun11d33eorosrri g11n55e(dd(.) 8ot)fothhefhe SSeeeccduuarrrilteiyesesauEEthxxtoccrhhiaazonnedgg.ee Act Act of of 1934, 1934, the the Rgivantbs Registrant has ulyduly cand caused this this report to be signed on its behalf by the undersigned, thereunto duly authorized. 3M COMPANY 3M COMPANY By By N/si/hNoNliicachshoCol.alsaGCCsa..nGGgaaennsgg.esetasd `Seni Senior VViice(ePPrPirrnNeecssiiiicdpdhaeeolnntltaFainsnndCadn.CcCGihahailinetOgffeFFfsiiitnnacaaednrc,)ciisall Officer Officer February 9.2017 (Principal Financial Officer) February 9, 2017 PPhuurarssuulaannftt tttooh ettRhheeesrrieesqqtuuaiirnretemamenenndttss iooffhttehheecaSSpeeacccuuirtiriitteiiesessi nEEdxxiccchhaatanengdgeenAAcFctetboorffua19r93y3449,,, th2hi0i1ss7.rreeppoorrtt has has besignedbelow been signed below- by by hethe Following following persons persons on on behalf of the Registrant and in the capacities indicated on February 9, 2017. Sante Signature ine. Tha Inge G. Thulin Ere, Hammes Eric D. Hammes Sood Bubour Sondra L. Barbour ThomaKs. Brown Thomas K. Brown Vance D, Coffman Vance D. Coffman Dud B Dillon David B. Dillon Michel Eskew Michael L. Eskew Heber Hnkel Herbert L. Henkel Malia Kent Muhtar Kent Edvard M. Liddy Edward M. Liddy Gregory Rage Gregory R. Page Robert. Ulich Robert J. Ulrich Pua A Woz Patricia A. Woertz ha of he ord Preven nd CRT esaaTittelee OTe CVih(e(aPPoirrriPminnrcaceinisppeaaonllftEEt.xhexeceCucBotuniottvairevrodelO,lOfePfrfrifeaciscneieddrreaCanhnntiddeafnDDdAiicrcCcecochotuioernrft))EinxgecuOtfivee rOfficer Vice President, Controller and Chief Di(sPrtinrcipal Accounting Office) (Principal Accounting Officer) Accounting Officer DDDDiiiirrrreeeeccccttttoooorrrr DDDDiiiirrrreeccccttttoooorrrr DDDDiiiirrrreeeccccttttoooorrrr Director DDiirrcttoorr Director DDDDiiiirerreeescccttttoooorrrr Director NbCbNyyiiacctthhhphoeeoallaooscstehCCea.r.nrpdGGpeaeroanrsnngsoegonsehnstsseatadnmdd,aa,ummbbeaeyyd,s,sstifegiidlnee,didnggswwuiihcinttsihhshpninthahaseemmneSSeseechhcueceurrroerieittnttoiios,ee,ssidduaaoonnieeddnss EEhhxaexrcrcemhhbyaaoynnggsnseieggynCnCooottfhmmitiishsmseddisdosoiscciiuouormmnneeenoontcnnttbbppoeuuofehrrrssahuuhlsfeaaononatfCtfsoltfsooumhfcppphooaswnotetyhehrersesrrooppffeeartrststoooonnrmssn,,eeyalllddnuiunllyytthheeeexxeeccuutteedd capacities and on the date stated, such person s constituting a maj ority of the directors of the Company. By NicholaCs. Gangead By /s/ Nicholas C. Gangestad NicholaCs Ganges Tormey oe Nicholas C. Gangestad, Attorney-in-Fact 16136 22775500..00113366 33MM VVIIPP EExxcceessss PPllaann ((AAmmeennddeedd aanndd RReessttaatteedd aassooff JJaannuuaarryy11,, 22001166)) EExxhhiibbiitt 1100..1155 22775500..00113377 33MM VVIIPP EExxcceessss PPllaann IINNTTRROODDUUCCTTIIOONN AANNDD PPUURRPPOOSSEE "TbTyhheeofppfuuerrrppinoogsseetohofeftmthhitisshePPollpaapnnorissttutonoittaytrtaratcocttcaaannmdd aiindnccdeeinnttticeollniiggeiibtblieerhhmiiegghnhltlyybccooemmnppesennssbaaytteedddefeemmepmplnloogyyeteheeessrtteoocerrieepmmtaaoiinnfwwipitothhrt33ioMMn obfy tohfefierrincgomtpheenmsatthieoonppoonrtauntiatyx-ftoaveoarrendadbdasiitiso,nawlitrhetitrehemebneltibcefntehfaitts sbuychdeofpeprroirntguntihteyrewcieliptpoerfmaitpotrhtieosne eoebemmfoprpetlh-lotoeayyireeeecssodmtteoopfeeiirnnnascclarrteeipaoarssnoeeviottsnhhieeoiainrrstallooxofnn-tgfgha--evtteoe3rrrmeMmd Vffiboinnalaausnninscct,iiaaarlwlyistsheIeccnuutrchirsteiytty.mb.eenltiTTehfhPeletahnaPPtllaaansnnducddEhoomceposslpopttyhohieirssteunbbSiyyttyocsskuwuppiOpplwlllneepmemereersnmnthtiiiitnnpggthPeltthashenee b(VeIfPo)r,e-wtahxicdhefaerrerallipmirotvdisbiyontsheorfetqhueir3eMmenVtosluofnttahreyIInntverensatlmReenvt ePnluane Code... and Employee Stock Ownership Plan (VIP), which are limited by the requirements of the Internal Revenue Code._ J"TTahhneeuaPPrllyaann1,ww2aa0ss1oo6rriiggiinnaallllyy cffctive effective a of as of January January 1, l, 2009 2009 and and is is hrcby hereby amended amended and and restated restated effective effective as as of of January 1, 2016. AARRTTIICCLLEE 11 DDEEFFIINNIITTIIOONNSS FFthooerrcttohhneeteppxuutrrppclooessaeersslyoofifnttdhhiiicssatPPellsaanna,, ttthhheeeffoo:lllloowwiinngg words words and and phrases phrases shall shall have have the the meanings meanings indicated, indicated, unless unless the context clearly indicates otherwise: P11a.11rticipant undAAerCCtCCheOOPUUlNaNnTTp.u.rsu""aAAncctccofoouunAntrtt""icoolrre ""4.AAccccoouunnttss"" means means the the record record of of the the amounts amounts credited credited 10 to a a Participant under the Plan pursuant to Article 4. P11a.22rticipant, orBBaEEsNNpEErFoFvIIiCCdeIIAdARRinYY.An. ic""lBBeeenen6fe,ifciticoairayrr"yce"immveeeaaannnssy tthhueenpppaeeirrdssoobnna.,lappneecrressoonninss soourrcheenntPtiiattryytiddceeispsiaiggntnn'aastteeAddccbbyoyuntthhtees Pfoalxltiocwiipnagnth,isororahserprdoevaitdhed in Article 6, to receive any unpaid balance in such Paxticipant's Accounts following his or her death. 13 CODE. "Code means the Intcmal Revenue Code of 1986, asamended. 1.3 CODE. "Code" means the Internal Revenue Code of 1986, as amended. of 3M 11.44 of 3M. CCOOMMMMIITTTTEEEE.. ""CCoommmimttitetee"e" mmeeaannss tthhee CCoommpepnesnasattiioonn CCoommmmitittteeee ooff tthhee BBooaarrdd ooff DDiirreeccttoorrss a11n.55y succesCsCoOOrMtMoPPtAhANeNYbu.Ysi.ne""sCCsootmmhpepraaennoyyf""mmeeaannss 33MM CCoommppaannyy (3M) ("3M"), tsits UU..SS.. aafifliatfesaiannddlsusbuisbisdaidiaiatrriieeessaasnndd any successor to the business thereof. m11.e66ans basEEeLLpIIaGGyIIBBpLLluEEs CCaOOnyMMPvPEaErNiNaSbSlAAeTTIpIaOOyNN(..in""cEElluliidggiiinbbglleeaCCnnooummalppeeninnssacetainottnii"vooeofnf("aaAIPPPa)ar.rttiiccsiipapaasnnttfcfooorrmmaainnysysPPilolaannnsYYeaeanardr mmaenaangsembeanset opbajyectpilvues, bauntyexvcalruiadbinleg apnayy p(oirntciloundionfgsuacnhnuvaarliaibnlceenptaiyveth(aAiIP)p, aysaablelse icnomremstirsiscitoendssoacnkd muubynnaiitnttsshaegaaennmdd eaannnyty other ong-temn incentive compensation objective, but excluding any portion of other long-term incentive compensation unless cxpresly included by the such variable pay that is payable unless expressly included by the Commitee) camed in restricted stock Committee) earned by the 2-2- 22775500..00113388 PCPaoarxmttpiiecciinppsaaanntttioddnuurrdiinonggcs ssunuoccthh iPPnlclaalnnudeYYeieanarcren(t(wiwvhheeset,thheearrwarppdaasii,dd fddouurrrciiinngggn oosrerrvffioocllelloowpwriinengmgiussmuuscchhanPPdllaaannllYYoweeaaanr.c).es, EEillniiggciiobbmlleee Caarrreoiiissmmiinbnpgguernssffearrmotoiemomnntsssdttooooerccskkpnaoooyptpmtteiiinnootncnslssu,,diensseeilppniaaecrureaanttttiihioovennreeso,fpp,aaayyw,o,arrdeelmsmu,pmplfploooyryseeeuirrgmnccposoaennytrtovrruiiibctbesuuttiipooofrnnessma iuPt1oa0mrtsieecmmaipnppladlnootyya'elesleeouwnbabuenesnnceeeedfsfi,ittvaincppcallotaaimnnossen,, benefits reimbursements benefits. or payments in lieu thereof, or lump sum payouts of a Participant's unused vacation 11.77 EEMMPPLLOOYYEEE.E. ""EEmmppllooyyeese"" mmeeaannss aannyy ppeerrssoonn eemmppllooyyeedd bbyy tthhee CCoommppaannyy aass aann aaccttiivvee rreegguullaarr cscuoocmmhmmopnoe-nrls-aloasnwys weehmmoppllaooryeyeeeUnwwithheood iiSsstarrteeeccsoogcginntiiizzzeeeddnsaassbutssuuoccnhh aoosnnsi33gMMn'm'sesnhhtuuommuatasnnidrreeessooofuurrtcchaiesss//cppoaauyynrrtoorllyll assyynssdtteermmesssi;;deiinnntccllauulddiieinnngsg.. eeswummhcpiphcllhoopyyeteerhsddeoCininnosmttwhpheehaonUUnynairiteitees ddUapnaSStirttaatettdyeess;S; tbbauutettseecxxicctlilzuueddniinsnggbuaanntyyonppeearrssssooinngnccmoovveenerrteeoddubtbsyyidaae ccooofllllteehccitstiivvceeoubbnaatrrrggyaaiiannniidnnggreaasggidrreeeenemmt eeanlntitenttoso which the Company is a party. a11.m88ountof coIImNNpDeDnEEsXaXtEEiDDonCCthOOaMtMmPPaEEyNNbSSeAArTeTcIIoOOgnNNizLLedIIMMbyIITTa.q. ua""lIIinnfdideeedxxeerddetCCirooemmmpeepnnetsnpaslatatiinoounnnLLdieimmrisitte""ctmmieoeanann4ss01tt(hhaee)(aa1nn7nn)uuaoalfl tathhmeeoCCuoonddt eeof((aacssoaamddjpjuuessnttseeaddtiaaonnnnnutuahalalltlyymffaooyrr increases in the costofliving). be recognized by a qualified retirement increases in the cost of living). plan under section 401(a)(17) of t11h.99is Plan afPPtAAerRRsTaTItiICCsIfIyPPiAnAgNNTth.Te.li"g"iPPbaairxltitiitccyiippraaennqttu""immreeemaaennnsstsaannoyyf SEEemmcptplilooonyyee2ee.1wwhhoo hhaass celleecctteedd ttoo mmaakkee ccoonnttrriibbuuttiioonnss ttoo this Plan after satisfying the eligibility requirements of Section 2.1. t11i.1m1e00. The oPPfLLfiAAcNiNa.l.na""PPmlelaaonn"f" tmmheeeaanPnslsatnthhesehpapllllaannbedtdehesscecrr3iibbMeeddVIiinnPttEhhxiissceddsosocuPclmanue.nmt,aeassinitttmma,ayybbeeaammeennddeedd ffrroommtitimmeettoo time. The official name of the Plan shall be the 3M VIP Excess Plan. h1La1.1s111delegatPPeLdLAAthNNe AaAuDDthMoMrIiItNNyIIaSSnTTdRRrAAesTTpoOOnsRRib..ili""tPPyllaafnnorAAdadmdmimniiinnsiitssrttaretarotiorn"rg" mtmheeeaanPnlssant.thheeUppneelrresssoosnntatoonwdwhuhnootimml ctthhheaenCCgoeomdmmmibytitttteeheee ohCCraoosmhmimdsmieoltiertttgeheaee,t,redttshhuteechcePPesllaasauonnrth.AAoddrmimityniinasintsdtrraartteoosrrpooofnfsttihhbeeiliPPtlylaannfossrhhaaaldlllmbbineeis33tMM e'ri'snsgVVitihcceee PPPlrraeenss.iiddeUenntnt,l,eCCssoommapnepdnesnuasnattitilioocnnhaaannngddedBBeebnnyeefftihittess or his or her successor. i11n.11r22espect oPfPLLwAAhiNNchYYEaEAPARarR.ti.ci""pPPalnlaatnnmaYYyeeaacrro""ntmmreeiabanuntssettthohee t1h1e22--Pmmlaoonn.ntthhTppheeerriifooidrdstffrProlomamn JJYaaennauuararrbyyeg11attnhhroroonuugJgahhnuDDaeercyceem1,mb2be0re0393r1.1 in respect of which a Participant may contribute to the Plan. The first Plan Year began on January 1, 2009. I11n.11v33estment PlPPanOOaRRnTTdFFEOOmLpLlIIoOOyeIIeINIIStVVoIIcPPk O. wn""ePProorsrthtffiooplliioPolaI[In1I1 aVVpIpIPlP"i"cammbleeeaanntoss cttlhhieegibpplrreoovveiimsspiiolononssyeooeffs ttwhhheeo33MwMerVVeoolhluiunrnettdaarroyyr rIrPenaehrhvtiierirsecetdidmpabebnynyttsttPhhleeanCCooamnmpdpaEannmyypalaofftyteeerreDDSeetcoceecmkmbbOeerwr n33e11r,,sh22i00p0088Plaoonrr aaarrpeeplooictthahbeerrlewwiitssoeeeccllilgaasisbssilieffiieeeddmtpthhloeeryreeeuuennsddweerrhoaasswPPeoorrerttffhooillriieood IIoIllIr Paxticipants. S11e.11r44vice wiRR thEtThE IeRCEooT morprRaRnEEI yTTIIafRRtReEErM MaEtE EtNaNiTnTi.n.g""RaRegteeitir5re5e""owoirrth"R"aRetettilrieeramsetmeefnnittv""emmyeeeaaanrnsss oaannf eEEmmmpppllolooyyyemeeee'n'sstSSseeeppravariraactteiiooonnr ffarfrolomemr atainingage65, Service with the attaining age 65. Company after attaining age 55 with at least five years of employment service or after 3. -3- 22775500..00113399 1L.11s5 SSEEPPAARRAATTIIOONN FFRROOMM SSEERRVVIICCEE.. "S"Seeppaaxraattiioonn ffrroomm SSeerrvviiccee"" mmeeaannss aa ""sseeppaarraattiioonn ffrroomm Ssueenrrdvveiricces""ecatasisonddoe4ff0iinn9eeAddofiinn tTThrereeaCasos.d.e.RReegg.W.heSSteechctetiiroonna S11e..p44a00r99aAAt-i-1ol(n(hh)f)(r(11o))m ooSrrerssvuuiccchhe hooattshheeorrccrrueerggruuelldaattidiooennpeoonrrdsgguuoiinddaawnnhcceeethiiessrssuuteehdde wuffaaonccudttlssedraasnnebddcetcciiioprrenccruu4fmm0ossr9ttmAaaenndocceefasstfhtiieennrddCiiaccoaadctteeee.rttthaW hiaantth33edtMMahteeaarnnaoddrSttehthhpeeaatPPraaatrtrhittoeiicnciilpfperaavonnemtlt rroeSefaaessrboovonnicanaebabllhyyfaisaadnenottciisccceiuirpprvaariettcedeeddsdttehthpahateetnnndPooasrfftouuinrrcttihwhpeeahrrnetsstheewrrevovriiuctclheedess wp1p0eeo.rru1ffo0lodrrmmmobreaaefftpteeterrhrafssonuurcctmhhweedddnaatttyaeefpt((eewwrrhhceaeetnthhcteee(rrrt2aaa0issn%)aandnofaeettemmhppoellrooayytvheeeaeertaoogtrrheeiilnnedldveeeevplpeoeelnnfddobeefonnntbtaoccnoofannitdtrfreaiadcscetetoorrvrs))iecrwwevsoiocuupellesddrtfpphoeeerrrmmmPeaadannret(eniwcnihitlpleyyatnhddteeercwcrraoeesaauassldnee etompnloomyeoereorthaann itwndeenpteynpdeenrctecnotnt(2ra0c%to)ro)fotvheeratvheeraigmemeldeivaetleolyf bporneacefdidiengsetrhvirictey-ssipxer(f3o6r)mmeodnt(whhpeetrhieord)a.s aAn oeSSrmeeppopaatrlxhoaeaytrtieiooebnnoonffrarroaofmnmidieSSnedelrreevvapiivecceneoedfssehhnaaaltblllsceonnnonotcttreibabcefetoddtrehe)eeemompveeeerddriotttodoheodooccicmccsuumrrneowwdthhiieaillxteeecletytheheedprPPseaiacrxrettd(ii6ccin)iippgmaaonntnhtttiiirhsstsyooo-nnsri,xmmiifil(lli3iott6aan)rrgyymerlloe,enaatsvvhoee,,plessoiirncicgokkdal)lse.eatavhvAeee coPPoaranrxtotrtitiahcccieitppr.aabnntoFt norrraeetftaaihidiinnesssplueaarapvrroeiisggeohh,tftaattboolseerraneevceeeemmipipsfllbotohoyyenmmapeeenfnirttdioewwdoiintdtlhhoye33sifMM,noatnooderrxsaaconneeldaaoffnsfliiilxiaiasa(,tt6eeh) euumrnnoeddneeitrsrhsaaarnnoera,aaspipofppnlllaoiibccnlaagebbellreee,xpsssoettcaaltttouuanttteegioaoonsrtthbbhayyet tcthhoeentPrPaaacrrttt.iicciFippoaarnnttthwiwsiilplllurrrepettouusrrenn, attooleppaeevrreffooirsrmmbossneearrvvfiiidcceeessoffnoolryr 3M or if, and 3M or an affiliate. Notwithstanding the foregoing, a so long as, there is a reasonable expectation that an a_ffiliate. Notwithstanding the foregoing, a 22me99d--immcoaonlnlttyhh ppdeeertriieoorddmoionfafbaalbbesseepnnhccyeseicwwaiilllllobbreemsseuunbbtsasttliittuuittmeepddaiffroomrressnuutcchhthasstiixxca((66n)) bmmeoonentxtphhecppteeerrdiiooddto iifrftehtshueeltlleienaavvdeeeaiitsshdduuorce cttoaonaannbyye emeuxxnepapdebeiclccettaeeltddloyt1po0deerllaatfessotrtrmffmooirnrthaaaebccldeoounntpttihiinsynusuooiofcuuhaisslsppoeeorrrriimoohddeeornotfpafonlnsooiimtillepoesnsaossirfttmhheaaenmnnptssliitoxhxya((mt66e))cnatmmn.oonbntethhssexaapnneddctttehhdaatttoccaaruuessseeusslttthhiene PPdaaerxatttiichciipopaa_rnntctat0no bbbeee. unable to perform the duties of his or her position of employment. 11.1166 SSPPEECCIIFFIIEEDD EEM MPPLLOOYYEEEE.. ""SSppeecciiffiieedd EEmmppllooyyeeee"" mmeeaannss aa ""ssppeecciiffiieedd eemmppllooyyeeee"" aass ddeeffiinneedd iinn "TTrreeaass.. RReegg.. ssceecttiioonn 11 .44090-19(i)-oor1ssuu)cchhotohtheerrr reeguglautiolnoaorrgtguuiiiddaoanncncee iissssuueedduunndedrersseectiocn4t40099iAAooofftnthhee CCooddee.. 11.1177 33MM. . ""33MM"" mmeeaannss 33MM CCoommppaannyy,, aaDDeellaawwaarxee ccoorrppoorraattiioonn. 11.1188 UUNNFFOORREESSEEEEAABBLLEE FFIINNAANNCCIIAALL EEM MEERRGGEENNCCYY.. ""UUnnffoorreessceeeaabbllee FFiinnaanncciiaall EEmmeerrggeennccyy"" mrmeeegaaunnlasstiaaonnn o""ruunngffuooirrdeeassneeceeeaabbillseesueecmmdeuernrggdeeennrccsyye""cti((aoasns 4dde0eff9iiAnnoeefdd tiinhneTTCrroeedaaess... RReegg.. sseeccttiioonn 11.440099AA--33((i))(33)) oorr ssuucchh ootthheerr regulation or guidance issued under section 409A of the Code. f11o.11r99purposeVVsAAoftLLhUUeAATVTIIPI.OONN DDAATTE.E. ""VVaalluuaattiioonn DDaattee"" sshhaallll hhaavsee tthhee ssaammee mmeeaanniinngg aass tthhaatt tteerrmm iiss ddeeffiinneedd for purposes of the VIP. i11.22m00ay be aVVmIIePPn.de""dVVIfIPrP"o"mmmteeiaamnnesstotthhteeim33eM.M VVoolluunnttaarryy IInnvveessttmmeenntt PPllaann aanndd EEmmppllooyyeeee SSttoocckk OOwwnneerrsshhiipp PPllaann,, aass it may be amended from time to time. 4-4- 22775500..00114400 AARRTTIICCLLEE 22 EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN 22.11Plan YeEElilifigagaibisiblroiilftiyt.yth.e AANnonvEEemmmpbplelooryyee1eestssihhmaalmllelbdbeieaeteleliilggyiibbplleeretocoepdpaiarnrttgiiccsiiuppcaahtteePilinnantthhYeeeaPPrll.aann bbyy mmaakkiinngg ccoonnttrriibbuuttiioonnss ffoorr a Plan Year if as of the November 1 st immediately preceding such Plan Year: ((a@)) ssuucchh EEmmppllooyyeeee iiss eemmppllooyyeedd bbyy tthhee CCoommppaannyy:; ((b6)) ssuucchh EEmmppllooyyeeee iiss eelliiggiibbllee ttoo mmaakkeeccoontnrtriibbuuttiioonnss uunnddeerr tthhee VVIIPP:; aanndd () (c) such such EEmmpplplulsooyyveeaeeriabhhlaaedd paeeyss,ttiimimnaacttleeudddinaagnnnnaunuanalulalpplliaanncnennneetddive,ttoottsaaalllesccaacssohhmmiccoosmsmpipeoennnsssaatatinioodnnma((nbbaaassgeeemeppnaayty o`pobelbujajesrecctivtiinavvcreelia))ubdttilhhenaagttpsaeeuyxxc,ccheeieneNddcoslsvuedtthimhneebgeIInrandndIeensxtxu.eeaddl iCCnoocmempneptinevsneas,attsiiaoolnnesLLciiommmiittmiiinnsseeifofffneesccttafnfoodrr mtthhaeenaccgaaleleemnndedanarrt year including such November 1 st. TdTehhteeereemlliiinggieibbdiillicittayychooPfflaEEnmmpYplelaooryy,eeeeassndttoonoppEaarmrttpiiclciioppyaaetteee siinhnaltlthhiihssavPPellaaannnybbyryighmmta~k_tokiinnmggakcceoonnctotrrniitbbruuittbiiouotnnissonssshhaialnlllanbbyee dPPelaelaatrenn.rmYYeienaaerrdbbyeyacvvhiirrttPuuleeanooffYhheaaavvri,innaggndaannnoAAccEccmoouupnnltotyaaesse aashrreaesslluullhttaoovfef mmaanakykiirnniggghcctootnnottrrmiibbauukttieioonncssoniitnnribaannuyytioppnrrsiiooirrnPPallnaanyn Year. 2E2.m22ployee wEEhlleoecctmtiioeonnsttoothCCeooenlntirtgriibibibluuittteye..reIInnqoorurddieerrrttooeommmfaSaekkeencettcciooosnnnttrr2iib.b1uuttmiiouonsnsst uuennnrddoeelrlr ttvhhieeatPPhlleaannPlffaoonrr'asannIyyntPPellmaaenntYYseietaea.rr,, Taanon bErbeeemdueepcffltffoeeiyccoettniievvoewef,,hhaaoinnsmEoEermmepthspleolrtohyyeeEeleeei'lg'ssiigbieelbnenirrlCiootollyllmmmrpeeeeqnnntutsiarmmetumiusostetnneetasllseeocctnfteSttehhedeecetdiaaommn(o0ou2um.n1nattkmooeuffsshhtuiiescsnhoororcrollhhnetverrriiabcctuoohtnneittorrPniisbbla,uutntsii'socolnnIessnc,,tteaartuunhtteehhtootsrriiiimtzzeeee. attThnhodee rfwfeoohdrrimumcochtofisofpunpcaahoyyfmcmeohennistntrtoioobruffhtsseiuournccEshhlaiccgrooiennbtttlrreoiibbbCuuetotiitmoornnepssaetneaasdnnaddtaisotthnhbeeeaicesnaagrnmneiiiennndvggeesssdtttehthdoee,rrmecaoonanndk,,epssrppsoeuevccciihidffyeycostthunhceterhiiibnonuvtvtheeieossrtntmmsp,eeenrnsttteilnffeueucnnnttddthiooenrrftofifrmuumnneaddtssiaoniinndn wPaasslhattinhcheheYePsPaullaracnnhwiAAcldoldmnmibtnreiiinbseiutsstttriraoaabtntloosirrsahmmreeaadyytobyrrbeeeqqtuhuiteirrreeeP.a.ltaendTThhAaeedsmbttiieinmiminesegtppreiaenrtrviiooeordsd,teddbduuu,trriianinnnggdnwwpohrhioeiccvvhhiedneeetnnswrruioolcllllhlmmaoeenntnyhttessernwwprieoilllrlltlibbmneeeennaattcccibcneeefppotatreecmddceaceptaaitoccenhhd Paafflttaeenrr ttYhheeeobbxeewggiiinnllnniibnneggoeofsftattbhhleeisPPhlleaadnn bYYyeeaotrxhettooPwwlahhniiccAhhdssmuuccinhhiseetnnrrarootolllrlm,mebennuttt relates in no event relates. will any enrollment be accepted 220.33the PlanDDmuuarrdaatetiiioonnnaoocffcoCCroodnantntrrciiebbuwutititiohonnthEEelleerccetqtiiuooinnr.e.meEEnaatccshhoeeflliiSggeiibcbtlleieoEEnmm2p.lp2olosyyheaeele'l'ssecxelpleeiccrtteiiooanns ottoof mtmhaaekkeeenccdoonnotftrritibbheuuttPiiolonannss tYePolaeatarnhreYttoePoalawwrnhhiiimfccshhaudciietth rienEelllaieagtsceic,bso,lreaadllCattonhhmcooepuueggwnhhistaiihtttstsihhhoaeanlllrlweaaqappusppilrclyyeammttnoeoendaatsnndyyuorfEEilSnliigeggciistbbiulloecenhCC2oPo.lm2mapnsephneYasnelaaslrate.tixioopnnPiraerpptaaaiiiscddiopa~affnttttehsrre ttmehhaneeydeenonnoddfttoohcfefhassPnuulgacchenh Pooenrrldaerrndee.vYvooekkaeer tithfheesiiurrcchcoonEnttlrrigiibbibuutlteiiooCnn olemelecpctetiinoosnnasstioffnoorrwaaasPPlleaaannrnYYeedeaadrruaarffintteegrr sttuhhceeheePnnrlraoonllllmYmeeenantrt. ppePerr~iixootddiciffpooarrntttshheemPPallyaannnoYYteecaahrranhhgaases ended. 5-5- 22775500..00114411 2a2.m44ounts credDDiuturerdaatttiiooohnnisoooffrPPhaaerrrttiiAccciicppoaauttiniotonns.h. avAAe PPbaearerttniiccdiiippsaatnnrtit''bssutppeaadrr,ttiioccriippuanatttiiiolonnthiienn PttahhreetiPPclilaapnanntss'hhsaalldlleacctoohnn,titiifnnuuceearuulnncttriill aallll amounts credited to his or her Accounts have been distributed, or until the Participant's death, if earlier. AARRTTIICCLLEE 33 CCOONNTTRRIIBBUUTTIIOONNSS 33p.e11rcent (1PP0a%ar)rttii(ccbiiupptaaonnnttlyCCooanntwtrhriiobbluuettiipooennrscs.e. ntAAagPPeaa)rrttoiifcciiphpiaasnntot rmmahayeyrccEoolnnittgrriiibbbluuetteeCo((dmdepeffeeenrrs))afftrroiomomnttwcwaoomppeeedrrccdeeunnrtti((n2g2%%t))hetooPltteaennn Year to percent Year to ww(1hh0ii%cchh) ss(uubccuhht PPoanartrlyiticciapiapwnatnh'sot'slleeepcleetcritcioeonnntarreeglleaa)tteesos,f, subject 10 the following his or her Eligible Compensation subject to the following: eaxned during the Plan ((a@)) tthhee ppeerrccteehnnettaaPggleean oofffor EEalliigPgliibablnlee YeCCaoormmpmepunessntasatbtiieoonnthetthhsaatatmeaa aPPsaartrtthiiecciipPpaaarnnttticieepllaeenccttt'sss ttEooleccctooinnvtetrriiDbbeuuftteeerrattolo tppheeerrccPeennlattnaaggfeeouurnnaddeePrrlatthnhee YVVIeIPPadrudmruiruinnsgtg bsseuuccthhhePPllsaaannmYYeeeaaarrs,; taahnnedd Participant's Elective Deferral (b) (b) the the ppeerrccceeannctthaaggpeeaymtthheeentPPoaarfrttisiccuiicpphaannPttarteeillceeiccpttassnt'ttoso EccloiongntitbrrliibebuutCteeomp((eddeneffseearrt))iossnhheaaallllrnebbeed dddueredidunucgctteetddhe ffPrrlooamnm `eYYcaeeocaamhrrpepn((awswyahmhteeiettonhhneterrwoofppusaaluiidddchhaddPvuuaerrriintbnigegceipnooarprnati'ffsdoo(llElbloluoiwgtwiiibnnflgoger tCsshuuoeccmhhdepfeePPnrllrsaaaannltioeYYlneeeaceartar)i)r,o,nn)ebbdututotduthooreinnnllgPyyarthtiiifefciPsspuluaanccnthh a4cafof0ttm1eerrkp)e((nii))AscasstciuuooccunhhnwtPPouaaurnrltdtdiieccrhiippataavhnneett''bsVseIebPbneefdpfouoarrrieeid--natg(axbx.tuhteddfeeoPffrelerartrnhraaellYssdeeattfrooerirttnahhlweeehliPPecacarhtrtitioipccniai)ppyaatmnotne'tnts'hst.ewBBPoeeauffrolotridrceei-h-pTTaaavanxex.t so4oec0cccc1tuu(irkrorr)needAd40ch2hc(aao8vvu)eenotrrfeueatnahccdehheeeCrddothdtteehheeV(rIaaePppgppadlrliuidccrlaaienbbsglsloeetfhddeoowllhPlleaalratrnhlleiYirmmeioitatrronoionnnt wsstuuhhcecihhcPhaddreptefaifeceyrirmrrpaaaellnnsstt iiiwsmmcoppluooilsgsdieebddhleabbvtyyeo mCmseoaacdkkteiee)o,noorro4ri0iss2(aa(igcc)t)tuusaoaulflcllyhtyhemmPaaCarkktoiiidnnceiggp(accrnaaetttgccahhhra--dsuulpeprsedsdaeecoffehfererwrdraahlltesshtehaasseIraanouudtrethhxnooeorrditizztCeehoddembbpPyyeanrsstseiecaccitttpiiioaoonnnnt44iL11si44em((livvit)g)ioobuflnfedtthethoree ttChhoeedVVeI)I,PP offroorr(ittih)heesuPPlclaahnn Year in which Participant has Year in which ppraaeyaycmmheeenndtt would have occurred. the Indexed Compensation would have occurred. Limit under 33pa.22yroll paymeCCntoommfprpaoanmnyywhM MiacathtccPhhaiirnntgigciCCpoaonnntttrrciiobbnuuttrtiiioobnuntssi.o.nAAsssarsseooowoinnthaahsselaaddd,mmitnihinesitsCrtraoatmtiipvveaelnlyyy ffeseahaassliilbbllemeaffkooelllloaowwmiinanggtccehaaiccnhhg cpcMooaanynttrtcrrohiilbbiluunpttgiiaooyPnnemrooecnnnentbbtfeearhhgoaeamllf(fawoosfhfsicueccaahhcchhPtaePPrraatmrircttiiiipsccdiaieppnfaatinntcntoewwndhhtriooinbhuhtahatiessonVmmsIaaPdad)xeoeefccwootninhttahtrtrhiibpbeouuldrttit,ioiotnonhnsseot(foC0sotuthmhceephaPPnPllaaayrnntsieehcqqaiuulplaaalnlmt'ttaosokectthohenaetmrRRieeabqqtuucutihiirironeengdds mMCmoaaamddtpeceehnippnsuugarrtssPuiueaoarnnncttefnottotroatgSSheeeecc(ptataiisyoorsnnoulc33lh..11pteewwrrmihhoiidccischhodrdderofoeicensssepdonnnooidnttitneehgxxecctVeoeeeIsddPu)cffhoiivvfpeetahyppameeterrpccnoeetnrntttio((n55%o%f)) souofcfhssPuuccahhrtiPcPaiaprrtatiincctii'pspaacnnott'n'sstriEEblluiigtgiiiobbnllese Compensation for the payroll period corresponding to such payment. 33VI.33P, the CoCCmoopmmapnpayannyyshaNNlolonnmcelalekececttiiavvdeediCCtoiononntartlriibbcuoutntitioroinnbssu..tioOOnnsnlly(y0fftoohrretthhPoolsaseen oEEnmmppbleloohyyaeleefeossfccoocvvaecerrheeddEmbbpyyltothhyeeeePPoorcrtltfifoogillbiioloeIItIlIo cVppaaaIrrmPttiie,ccdtiihppedaautteCreioiinnmng ttpshhauiincssyhPPlPslaahlnnaanllffoomrr aaakePPllaaandndYYiteieoaanrracelqqcuuoaanlltrttoiobutthhtirroeeneesppteeorrccteehnnettPoolffanssuuoccnhh bEEemmhpapllolfoyoyefeee'e'asschEElliEiggmiibbpllleeoyCCeooemmpeeplinegnsiasbatletiiootnon earned during such Plan 5-6- 22775500..00114422 YfYeeeaaarsr.i.bleTTfhhoeelssleeowaaiddnddgiittciiaoocnnahallpaCCyoormmoplplaanpnyayymcceoonnntttrriibdbuuurttiiioonnngssorsshhafalolllllbboeewimmngaaddteehettoPolatthnheeYPPellaaarnn caaossrrsseoosoopnnonaadssinaagddm(mi0niintshitsertrapatatiyivvreoelllyyl pfpeeearrsiioiobddledduufroriilnnloggwwwihnhigicchheasscuuhcchhpaEEylliirggoiilbblllepe aCCyoommmpeenpntesndasuatrtiiinoognn was carned. or following was eoxned. the Plan Year corresponding to the payroll AARRTTIICCLLEE 44 AACCCCOOUUNNTTSS 44Pa.11rticipant whCCroreeaealtteiicootnns toooffmAAacckcceoouucnontnttssr.i. buTTthihoeensPPllhaaennressuhhnadalelllr.eessttAaabbllsiiessphharaaatsseeeppAaacrrcaatoteeunAAtcccschooauulnlnttbeoorrmaAAiccncctooauuinnntetssd fffooorrr eccaaaccchhh PPPPaaoorrxxttttiiiicccciiiippppaaaannnntttt'swffoochrroonceteaarlcciehhbcutsPPtliltaoaonnnsmYYhoe_eeakraereructtnohhdanaetttrrissbsuuhuccathhliloPnPbasaerrthtciierccreiiepdpuiaantnnedttdemmrt.aoakksAeeusscsheccpooPanantrrtartrtiiiebcbiuuApttaiiconocinno'sssunttAootccstthhhoeeaulnlPPtlblaaeannt..mthaeTTinhhsteeaaimnaaeemmdotouifumnonetrt aeoosafcofahra Pafassrooxssmtooioocwnnihpiaaancss thrr'seesaacussocoonhnntaarcbibobllnyuyttrippoioobnssussstiiihbboellneresefufwoonelldlrloeeowrwdiisnenhfggaelrttlrhhebeede.ddcaartteCeedssoimtooepnndawwntohyhiisccumhhcahttthchPeehaiCCrntogoicmmaippnpaadannnytny'osnppAcaaliiceddccottthuihevenetEElcalioitggntitihbbrellieebsuaCCtmoioomemnpstepimnessnheasalataltisioobonner cfcSrrreoeecmddtiiittoewenddshi3tcto.oh2 sssaeeunppcdaohrx3a.a3cttoeenatAAtrcitcbchcueootuiusonnanttmsssewootfefirmettehhodoasesseefoerrPPraeaardsrtt.iisccoiiCoppnaoannmattssspareenellayiisggomiibnbaalleebtclhyttoionpgorrseescacineebiidvlveeenofssnouuleccllehhocwticcinvoognentttrrchiioebbnuudtttariiitoobennussstoiopnpnuuswrrsshsuuihaacannhlttl tbthtooee. Company makes Sections 3.2 and Company makes such contributions o the Plan. 3.3 at the so_me time as or as soon such contributions to the Plan. as reasonably possible following the dates on which the o44r.22losses bEEaasaerrndninoingnstgohosenn pAAecrccfcooourunmntatsnsc..eEEoaafccthhhePPaoirxntvtiieccisipptamanentnt''tss AAfuccnccdoosuunnstetsslesschhteaadlllbbbeyeccrsreuedcdhiittePeaddrtwwiicititphhaniitnn.vveessTtthmmeeennittncevaaerrsnntiimnneggnsst offuurnnlddossssaaevvsaaibillaaasbbelldee participants in ottoon the ttthhheee PPpaoerxrttfiiocciripmpoa_annnttcsseiinnoftthhthiisse Plan shal be the investment funds Plan shall be the same as selected same as ttbhhyee VIP, excluding the 3M Stock Fund and the VIP's bsiirnunovcvkeheessrtPtamomgxeeetnnicttwipiffounu_ndnnddot.ssw.aaTvvhbaaueiitllaianbbsvhlleaeelslt(tom0atelthshneoet piCinnaoccrmltlpuiuceddineepsaaaanttsffiuuoninnndd tPhbblaeaanss.eeVddIPoo,Pnnaerxttthihceceluipdrraeeinnttutugsrrnntmhooaeffy3ttMhhaeellSGGotcroraooctwwketthhFthueFFnaadaccmttaooonrrudnaattsshseddeceVfrfieiInndPeie'tddsedfbfoorrro(0kppeuutrrrhappegiooersseewAsscincoodoffoutnwthhte,esb33uaMMtmosDDhneageflfleersrarurleecsdodh iCiinnnovvvmeeesssptttmemmneeesnnnatttticoffanuumnniddPnsslagnsiin.n orwwPhhloaoorlsltseeicesipppeeoarrnnccteessnnuttmcaahggaeeyVssIaPoollffofcuffanrrotdoemsmtfhoooernneepaumprpepeororuccsneeetnnssttocf(tro0etdhooiitnsneeedPlhhatouunnndsdthhrraeeeliddlr eppAqeeucrraccceloennutt.tnh.tes aTTcahtmhueeaolnddgreeaeetsmemueecoddhf rirmneeatvtuneurasnmgtmeoomnneenssntuuteccahhfrenffeuiusnnn,gddtsssruoiisnnrtettlhehoeesfseVVeeIssIP,PornnneeetctsoouorfcfdhkaanenVyeyIpPfifeneefegussnfooderrcsseefxxaoppnreednnpsosueetrshspeoccrshheaaasrdrggmoieefnaaibbtshllteeisratthtPheeilrvareeenttooes,x,hpiiaennlnclcslleeuusqdd.uiinnagglIntbbhuuettthennaocoetttuvllaeiilmnmiriattteetheddatottoaof mPPianoorvx_tetisnictcaieigppdea,amnntetsnufftcaahfiilessePstat,orottrissuccesilltpeeecacetnttfttehhweeeisl,ilinnrvebveceesosttrdmdmekeeenenmtetepffdiunungntddofeooherrasvffaueunnndaddlsslootiihcnnaetrwwehdahidicctmhhheinhhiieisssnttroioarrtrievhheaeermreoxAAupccnecctnoosuuecnsnrt.etssdiIatanrerecdthddetoee.eeevmhmieesenddtotrtthooahtbbeeera AiPAnaccvrccteooisucutiennpdtta,ssntst(ou0wicttlhhhleeaPtLLatiriafftiieencPPiaapagttahhentsPPioowxrtrtitylff-loofllibiivoeoe ff(du6ue5nne)dd.mwweiditthhtotthhheeattvaaerrggeaetltlorrecetatiitreredemmeethnntet yyeeenaatrrireccllooassmeessottutn1o0t the ear credited the yeox iitnno wwhhhiisicchhorssuuhccehhr Participant will attain age sixty-five (65). 44a.m33ong whichCChthhaaeninrggeAescsciionnunIItnnvvbeeasslttamnmceeennsttoFFruufnnutddurAAelllcloooncctaarttiiiboounntsiso.nsPPaaarrrcttiiaccliiplpoaacnnatttssedmmaaayyanccyhhaatnniggmeee, tthhseeubjiinencvvteesstttommseeunnctthffuruunnlddesss as maybeestablished by the Plan among which their Account balances as may be established by the Plan or future contributions are allocated at any time, subject to such rules 7-7- 22775500..00114433 AAreddpmmrienisinesintstrtaarattitoovrer.o. fAAltllhloeoccPaalttaiiono'nnsccrhheaacnnoggreedssemmcpaaryy. oonnllyy bbee mmaaddee uussiinngg tthhee PPllaann''ss IInntieermneett ssiittee oorr bbyy ssppeeaakkiinngg wwiitthh aa representative of the Plan's recordkeeper. 44Da.44te. As VVofaalcluuaaactthiiooVnnaloouffatAAicoccncoouDuannttetss,..thTTehheveaAAlucceccoooufuannttssPaoorfftailaclllipPPaaonrtxt'tisicciiAppcaacnnottssunssthhaalslllhabblee crreoenvvsaaillsuuteeddofaasstohoeffbeeaaalccahhncVVeaaloluufaasttuiioconhn ADmAacaccdtceoeo.uunanAtntdsaaoscsrfeooedffaicttthhehedeViitmahmlemumreaedettiidooainatsiteenDllcyyaeteppt,rhreeethccieeemddvmiieanndlgguieaVVtaoealflluuyaaattPpiioaronerntciecDDdiaapittaneegn,, t'iiVsnnacclArrueceaaactssoieeouddnntbbDyayshteatth,lhleeicnaaocmmnroseouiausnstnettodfoooftfrhaeadnnebyycarlcceaooannsncteterrdiibob(uufattssiiouotncnhhses scmceaaalssedeecetmmeaadanyydbycbberete))hdebibtyyePadrtththtiheeceiraapemmatnoootuusnsnitintnccooeefftthddheeeeeeimimmmeemmddeeddiiininaavvtteeeesslltytymmpeeprnnretetcceceedaadirminnnigignnVggVssaalloouurraattillioooosnsnsseeDssDaatctcerer,ee,ddiniaittnceerdddeadttseooecdrtthehoaeerseiidndnevvcbeeryssettamtmsheeeendntat(maffosuuunntnhddstes oosefflaaenncytyediddsitbstryriibbthuuettiioPonnassrtimmcaiapddaeentffrrsooimnmcessuutcchhhe AAimccccmooueundntitastseiinlnycceepttrheheeceiidmmimnmegdeidVaiatateleullayytipoprrneeccDeeaddtiienn,ggaVVnadalluduaeatctiirooennasDDeadatteeb.y the amount 44A.cs5counts (inVVcelusedtiinnsggoaotfnfyAAiccccacomnouiunngngttsss.t.heAAreoPnP)ao.rxttiicciippaanntt sshhaallll aalwwaayyss bbee 110000%% vveesstteedd iinn tthhee vvaalluueeooff hhiiss oorr hheerr Accounts (including any earnings thereon). 44`e.66ar, the PlSSatntaasttheeamlmleendnettlioovfferAActcoccocouauncnhtt.P.arAAtisscisspooaoonnnt aaassstaaaddtmmeimnieinnsittsrtorafathtiiivvseellyyorffheeeaarssiiAbbclleecoffuoonllltlosowwiiinnnggthttehhPeelaeennn.dd ooff ecaacchh PPllaann Year, the Plan shall deliver to each Participant a statement of his or her Accounts in the Plan. AARRTTIICCLLEE 55 DDIISSTTRRIIBBUUTTIIOONN OOFF AACCCCOOUUNNTTSS 55Pa.11rticipant's AcGGceoenunenertrasallheRRruuellueenssd.e.r sEEhxaxclcleeppbtte aamssadppreroovpvriiiddoeerddtoiinnsuSSceehccttPiioaornntssic55i..p55a,,nt88s..22deaaanntddh,99r..1e1,t,inrneoomeddniitssttorriribbuSuettipiooannratooiffonaa cPffarroosohxm.mticiSSWpeeahrrnvvetii'nscceeAthcwweciiottPhhulnantttshhmeehaekCCreeoosummnpaadpneadyrni.ysst.hrailbluAAtblilellonmddoiaissfdtterrliiebpsbusurtitiotiohornnatssno tsoohuffecheaanPtPiPoraxaertrtitcbiiiccapiiloppa_aannnnctt'te's'sosdfeAAacactchcPo,oauurrnetnttiticssriepmasshnheatanl'lltsl oAbbrceecSoeummpnaoatdxd,eaetitohiinnen dcdailaislsstothrcr.iaibtbeuuWdtt.iiohonnensshhtahalelll be charged Plan mo_kes be choxged pro rata against cach a distribution of less pro rata against each of the investment funds (0 which the Account is then than the entire balance of a Poxticipo_nt's Account, the of the investment funds to which the Account is then allocated. 55Se.22rvice witDDhiissttthrreiibbCuuottmiioopnnanFFyoollllfooowrwiinannggySSeerpepaaarsraoanttiioootnnheFFrrrootmhmanSSeedrervavitichceeo..rIIfRfaeatiPPraaerrmtteiicncitipp,aanntttheiinncccnuutrrissreaa bSSeaeplpaaarnracatetiiooonnf ffsrruoocmmh JPPSuaaelrrrytvtiiiciccniiepptaahwnnetti''tPsshlaAAtnchcceYcoeouCaunrnottmfssoplssalhhnaoalywlllinfbbogeertpphaaaeniiydPdlattroeonattYshheoeeanrPPaoairtrnthtiiwecchriipiptacahnnhattnsiiunndcehaaaPtsshaiirnntoggilrlceeiRpllaueunmttmir'ppesmSssueeupmnmat,rddaittihssitetorrniibebnfuurtttiioirooemnn Sbiienanrlvatthinhceeceemmoooconcfntutsrhhurecoodhff (J(Soouerrplyairiinnantittthhoheene PfmmlroaoonnnmttYhhSeeaoorrvfffiocJJleaalnnoouuwcaacrirnuyygrritienhndettiPhhfeelasnuPPclYlhaanenSaerYYpieanearawarrthiffiooocnllhllofoswruwoiicnmnhggPSeattrhrhvteeiiccPiPepllaaaonnnctc'sYuYreeSraaeerrpdaiiprnnaritiwoworhnhiticfcorhhoJmussluuySccehh1rvoPPifacarersttuioicccciihcppuaaPrnnlrttea''dsns YSeeapra).ration from Service occurred if such Separation from Service occurred prior to July 1 of such Plan Year). 5. -8- 22775500..00114444 55C.o33mpany, theDDbiiasstltrariinbbcuuettiiooofnnsuFFcoohllllPooawrwtiiincniggpanRRte'esttiirreAemcmceeonnuttn.t. IsIfhfalaal PPbaaerrttpiiacciiipdpaacnntot mRRmeeettinirrceeissnffgrrooamtm teehmmepptllioomyyemmaeennndtt iwwniiotthhnetthhoeef ctCthohoenemtffropoillballuontoywiw,oiinntnhgsge(mm0beeatttlhhhaeoonddcPsseloaoonffffpposaaruyycsmmhuecePnhntatrPtsslieeacllnieepccYatteneeaddt'rsbbpyyAucrssscuuuoccahhunntPPtaatrsrothtiiaSccleiilpcptbaainneottnpaaatt2i.dtt2hheec(ofttoimimrmmetesheisunsucccpihhunrgPPpaoaarsrttetiit,chciietpphaatennimtctleeeellceeatccnittodeenddinmttoaoodmmneeaakbkoyeef scaahoaPPnlaatlrrrtitbbiicceuiitppidoaaennntetsmwwteoiidttthhh(erreePssalppapeepnccltfytottrootosttuhhtceehheddPiialssamttnrroiiubYbnuuetttaiisoxonnpcoouofnrftsruaaiammbnouotutuentnodttssSteocccoottnnihtoterrniibbP2uul.2ttaeendd(fbobbyryythtsshiuuseccphhCuoPPrmpaarporttsaiiecnc,iiyppthaaennottneflfeoobcrrethiaaoalnPPfllmaaonnafdYYseeuebacayrhr PsPhaarartltliiccibippeaanndtteffeoomrr essduuccthhoPPallapannplYYyeeaatrox):):the amounts contributed to the Plan by the Company on behalf of such ((aa)) AA ssiinnggllee lluummpp ssuumn ddiissttrirbiubtuiotni;oono;rr ((b6)) TTeenn oorr beffieenwwgeerrdetaaennrnnmuuiaanllediinnbssyttaallmllummleetnnitspts,l,yinwwgiittthhhe tthbheaelaaanxmcneoouuinnnttthooeffPacertaaiccchhipaniitn'nsssttaalllAlmcmceennotut ntppaaoyynmmeetnnhtet bppreaeamiyynammgieennnditntegtddeaarnttmueemibbnbyyeedraa fofbrrfyaaccsmttciihouoennldtiuhhplaalevvydiiinnnigggnsaatthanneluulmmbmeeaernlrataatntpoocareryomoieffnnoottnshne.eaaPnnddaxaatdidceienpnoaonmmit'sninaAattocorcroeeuqqnuuatallot(no0 ttthhheee remaining number of scheduled installment payments. AAYelllarlluuommrppYsseuuammrsaasnneddleiincntssettadalllblmymeenntthteppaaPyyamrmteiencntitpssanssthh;aalllplrbboeevimmdaeaddd,ee hiinonwttehhveeemmro,onnttthhhaotofnfJoJaannpuuaaay_rmryeynootrrsJJuusllhyyalliinn bttehheemPPalldaaenn bbYieneecffauoorrrrseeoartthhSYeeeepmmaaorrosannttstihheolneoocffftreJJdouumllbyySyeiirntnhvietthcheeePawPPriltltiaachnniptYaYhneeetaa;Crropfmfrooopllvalloindowyweiidnn,(ggohrotthihwneeetvPPhleelaar,nmnotYhnYaetetaharrnoofiinnpJaawwnyhhumiaiccrehhyntsssiunuccsthhhhaelPPlPaalrbrtaetiinccmiiYppeaaadannrett ifSfnoeoclpllualorrowsawtiianingogSnettphfhaereroaPmPtliloaSannnerfvYYrieoecamaerroSiicnnecruvwwrihhceieidcchhwpirsstihuuoccrthhhteoPPaJCarurolttyimicciip1ppoaaanfnnytt's'ss(uocrSSheeipnpPalatrarhanaettiiYmooennaornf)ftr,rhoomaomnfdSSJepaerrnrvvouiivaccireedyeooidcncccftuuuhrrretrrehePeddrlaiitnffhaYsstuuenccahhor ``mSmmeeeapttkhaherooaddatnioyoonffpfpparaaoyyymmmmeeneSntnettrmvaaoinncrddeeocctcoohcmmaunmmrree1end0nccyepeermmaieorenrsntttaofddtJaeautrtleeythss1eeelloeeefnccttdseeuddocfhbbyytPhleaaanPPPlaYaarrnettiiacYcrii)ep,paaaarnnnttdinssphhwaralholllivcirrdheeeqqdsuuuiifrrcueehrttthPhhaeeerrtPPtihlclaaainnptannttooto cmRRoeetantiktirrreeeissb.a.untyiUUoppnpaosoynnpmuttrehhsneeutaRRmneteottiirtreroeemtSmheeeacnnntttio1oon0ff y3aa.3ePPaarafrsrottriiaccfoiitpnepaaernnttothreoonnmenowwdrhhooosPsfleetahnbbeeeYhhPeaalalalfrfnsttYhhfeeoeraCCrwoohimmnipcpwahanhnysiycuhcmmhasauddPcaeehrtnniPoocanniexpeltalienecctcitpthiiavvaneest nanctooottntrtimrmbiaubatdudaetebiloeaannnstoepeffuffsreesuccuctthaiivnveetnoteeonlleeelSccetetciicototniniovneccoo3ncn.oc3cneetrrfrnnoiiirbnnuoggtnietothnhoees,rttmiimtmhoeeereaabnnPaddllaanmmnecYeettehhaooorfdds offor of ppwaahyyimmcehenntstuoocfhf the Account(s) Participant has the Account(s) such Participant's Accoun(s) daaaitttstttrrtriiribbibuubuttutaatabbibollleene ttotioonssuutscchuehhchnnmooonnnneoetlnleheeccltetoiicvfvteeivJcuceoloynncttroriiinnbbtuurtittbhiioeuonntissPolnssahhsna,alllYlthebbeaeerppbaaafiiloddalnlttcoooewttihhnoeegfPPatasrhuxtectiihccPiiplpPaaananntrttYiiicneniapaarassniiintnn'sggllweeAhllicuuccmmhoppunsssutuu(cmsmh) dPPfaoiasrlrttltriioiccbwiiuippntaaignontnt't'ssheinSSePeptlphaaaernraatmYtiieoooannnrthffirrnooommwfhJiSSuceelrhryvviisiccuneechtoohccePccauurPrrtrrliaeecndidpa(Y(nooterr'asriinnSfeottphhlaleeorwammtioionnongntthhtfhrooeoffmPJJlaaSannenuruavarYirycyeeaiirnoncicttnhuherewrePPhdlliacannhif YYssueueaccahhrr fSSoeelpplaoarwraatitniiogonntfhfreroommPlaSSenerrvvYiiecceaeroocicnccuuwrrrrheeiddchpprrsiiouorrchttooPJJauulrlytyic11ipooaffnsstu'uscchhSePPpllaaannraYYtieoeanra)r.)f.rom Service occurred if such 5T5e.44r AccounDDtisisstthrraiisbbuubtteiigoounnn,FFootlhllelooewwnitininrggeDDbeaealatathnhc..eoIIfff aasuPPcaahrrttiiAccciicppoaanuntnt tddsiiecssshbableelffoobrreee pddaiiissdttrriitbobuutttihioeonnoPoafrftooinnceeipooarrntmmsoorBreeeoneofffihhciiissarooyrr shiinnuecraahAssiiPcnnacggroltlueeincilltuspumamhnpptasdssbiuueemmdgud(dnioi,ssrtttrrihiinbebutuethtinieootinnmreoiinnnbtatthhlhoaeenfmcmeoJonaontntfuhhsaurooycffhJJiuuAnllyctchiieonnuPntthlhtaseensPPhYllaaealnnalrbYYeefeaoaplrralifofdowoliltlonlogowtwhtiienhngegPPatthlrhetaeincPPYilpleaaaannnrtYY'iseenaaBrxewniihnneifcwwihchhiiaitccrhhhye PsPuaarcrthtiiccPiippaaarntnittciddpiiaeenddtiidftithehedePP(aoarrrttiiincciiptphaaennttmddioicenddthbbeeofffoorrJeeanJJuuulalyyry11 inoofftshsuuecchhPlPPalnlaannYYeYaeeraarrf))o.lloIIfwfaaing the Plan Yeax in which the 9. -9- 22775500..00114455 oPPfaarxtstiuiccciihppaaAnncttcddoiiuecnsstasafftGtefrr dadinissytt)rriibsbhuuattliiloonnbeooffpaooinndee tooorrtmmhoeorrPeeartooiffcihhpiaisnst'oosrr hheeBrrenAAecfccicocoiuuannrttyss ihhnaassacbbceeoggruudnn,a,ncttheheewrrieetmhmaatiihnneiinnmggetbbhaaollaadnnccoeef popaafyysmmuecenhnttAccchhcooossueennntsbbyy(ittfhhaeenPPyaa)rrttsiihccaiiplplaannbtte. paid to the Paxticipant's Beneficiaxy in accordance with the method of S55u.55ffered an UUnUfnnoffrooerrseecsscceaeebaalbbelleeFiFFniainnncaainnaccliiaalElmEeErmmgeeernrgcgeyenn,ccytyheDDiCissottrrmiimbbiuutttiieooenn .m. ayUU,ppooinnn ifftiisnnddsiionnlgge tdthhiasatctraeatiPPoaanrr,ttiicpciieppraamnnittt hhtaahss.e PsPuaarfrtfteiicrceiipdpaannattnttooUwwnifittohhrddersraaeywe:abaalnneaaFmmoionuuannntct iffarrloomEm mhhiiessrgooerrnhhceeyrr, AAtchccecoouCunnottmssmuuffifftiitcceiieeennmtt attoyo ,aallillneevviiitaastteesotthlheee emergency discretion, permit emergency. the 5p5.a66yment is mW `aWdiitethh,hhootlhldediinPnlgga;;nPPasayhyralrololllwlTiTtahaxhxeoelssd.. frTTooomtthaheneyeexxpttaeennytmt errneeqtquuimirraeedddebbyyhettrhhceeunlladawewrss aiinnnyeefftffaeesccettsaattrettqhhueeirttieimdmeetoaannbyye wpwiaitythhmhheeelnlddt ffiosorrfmefedaeddreear,la,lt,hstsetaatPteelaoonrr sllohoccaaallll government purposes. withhold from any payment government purposes. made hereunder any taxes required to be AARRTTIICCLLEE 66 DDEESSIIGGNNAATTIIOONN OOFF BBEENNEEFFIICCIIAARRIIEESS 66.11 person, BBeenneeffiicciiaarryy DDeessiiggnnaattiioonn.. EEaacchh persons, or entity. as Beneficiary or BPPeanarertftiiiccciiippaaarnnittessshh1aa0llllwhhhaaovvmee ttphhaeeyfrmiieggnhhttt aaott f aatnnhyye ttPiiamrmteeicttoiopaddneetss'iisggnnAaacttceeouaannnyyt spsrhheeaarvlslolloknebb,deepomemrraascdodheneasn,iignnoerdtthheebenyteeitvvayee,nnnteatswooBffdeettnshhieeegfnicPPaaitaraitrroityicncipoimaprnaatBn'dstee'sneprddfieiecaoatirtahh.rt.ioestAAhtenonyyPwarhddteoeismsciiiggpnpnaanaattyt'iimosonnedenmamttahao.ddfeethAuuennnyPddeaesrrruticttchhhieepdaePPnslltiaa'sgnnnAammtcaiacyoyonubboneert rrrbeeeevvveooofcckfaaeettdciitooionnvremmcuuhunsatstintlgbbreeeedcmmebaiayvddeeaed niibnenywaatcchdcceeoosrPrilddgaaannnn.accteeiownwiitmthhatdthheee prrruuilloeerss established by the to the Participant's established by the PPdlleaaannthAA.ddmAminniinysitssrtuartacothor,rd,eaasinngddnawwtiiilolllnnnoootrt be effective until received by the Plan. 66re.22ceive sucBBheennePefafirictciiiaacrirypyanPPtrrseeddAeecccceeoaaussneetss PPaanardrttiiaccniiyppaaBnnettn..eIfiIffcaiaaPrPayratritsichcaiilpplaannpttrdededesesiciggennaasateteessthmmeoorPreaerttthihcaainnpaoonnnte,e BBteheneneefPiflicaciniaarrsyyhat0lol ddrdeieiscsstteirrigiivbnbeuauttteseeudttchhbheey PddtaeheerccteeiPcaaaissrpeetaddincitBB'pseaennnAetefcfifcioccroiiauacrnrayyct''hssanbssedhhaaararrsneeytt1oo0BtthtehehneeetofsstiuucalriravvpriioyvvriitnnsighgoanBlBledenepnesrefiefigdiccneiiacaatrexeiaideesssefopprtrhrooaelpplooPrsratutriritoovincniaviaptiteaenlnglyyt,,B, etaanhsseefttihhPceeliaappnroocrrststhiioaolnnl designated by the Paxticipant for each bears to the total portion designated for all surviving Beneficiaxies. d66e.33signation prAAebvbsisoeeunnsclceye oomffaEEdfefffeecwctitiitvvheeouDDteessmiiaggknniaanttigioonna.. neIIwff aadePPsaairrgttniicactiipipaoannn,tt mmoarakkeeifss annlolo dpdeeesrsisiggonnnasattiidooennsioogrrnarrteeevvdookkesehssalaal pdmprreaeesndidngeeenccraeetaaidssoeeenttethhrpeemriePPnvaaerirodttiuiccisiinlppyaaannctmtc,,oattrdhhdeeeanPPwclleaainnthwiosshhtuahatlllltmhddeiaissktPtirraniirbgbtuuittceaeipttahnhneeetw'bbsaadlldaeaensnsiccigeegnonoafatftiittoohhnnee,didneeoccerefefaaiessfceetddaluPlPnaadrpretetirirccsiitopphnaaesnntVt'I'dssPe.AAsiccgcIcnonoauuttnenhtdet iiennsvhettahnhletel sdmsuueacccnhhenaePsPareardrdttieiPcctaeiirpprtmaainncititnpehahdnaatss'insnnooAacceeccffooffrueedccnatttinivvcteeoe tddwheeesistiihfggrnntsahattetoiioofPnnatxhuuetnnicfddioeeplrralnotthtwh'seiendVgVeIIssPPui,gr,vnittahvhtoeeirosPPn:llaainnn essfhhfaaellclltdduiinssttdrreiibrbuutttheee ttVhheeIPbb.aallIaannncctheeeooeffvttehhneet deceased Participant's Account to the first of the following survivors: ((aa)) TThhee PPaarrttiicciippaanntt''ss ssppoouussee:; -10- -10- 22775500..00114466 ((b6)) EEqquuaallllyy ttoo tthhee PPaarxttiicciippaanntt''ss cchhiillddrreenn; ((c)) EEqquuaallllyy ttoo tthheePParatrtiicciippaanJta't'sspparaerennttss;; ((d@) EEqquuaallllyy ttoo tthhee PPaarxttiicciippaanntt'ss bbrrootthheerrss aannddsissistteerrss;; oorr ((e&)) TThhee eexxceacuuttoorr oorr aaddmmininisisttrraattoorr ooff tthhee PPaarrttiicciippaanntt''ss eessttaatte.. 66th.44e foregoDDineegaattphhrooovffisBBieoennnesefifoicfciitaahrirysy..ArItIfifcaaleBBee6nnesefufiriccviiiaavrreyystttoohewwhhPaoormmticppiaapyyamnmteenbntutsts dhhieeerrseeuupnnrddioeerrr taaorreecottoompbbleeemtmeaadddeiestppruuirrbssuuutaainontnt tttooo ttthhheee Bencliciary ofthe Bencficiary's share: foregoing provisions of this Article 6 survives Beneficiary of the Beneficiary's share: the Participant but dies prior to complete distribution to (@) (a) unless unless ttshhheeallPPadarirtsttiicrciiipbpuaatnnett thhheaassundooittshhteerrriwwbiuistseeed psspoperectciiifofiineeddof isinnuchhhiissBenooerfrichhieaerrry dsdeesssiihggannraaettiitooonn,s, uctthhheeperPPsllaoannn dooshrersailpplgeenrdrassitosoetnnrdsis,b,iuniitnenacctllhduueeddsiiuinngnggndaisstsuutirccoihhnbumBtBeaeedndneepefoifiwcrciitiiataorhrnyy't'osshfesesPsualtctaahetne,,BperaainssoerfssiuutcocciahhsryuBBc'sehennseheBfefaiincrceeiifaatirrocyyisaussrhchyah'alslllpedhheraasaovvtenhe a(d(wnweyhshiiigtccinhhmaet)dde:eedssoiiirggnnnaaattiiodonensissghhanalallltibboeen ssmuubabjdjeeeccttwttioothcchhthaaennggPeelaoonrr rrpeervviooocrcaatttoiioosnnucbbhyy such Beneficiary at Beneficiary's death such Beneficiary at any time); or (b) (b) if if the the PPaarrttiicciippaanntt''ss ddeessiiggnnaattiioonn ssppeecciiffiieess tthhaatt ssuucchh power to designate a successor Beneficiary or ifBBseeunnecefhificBcieiaanrreyyficdidaoorceyss isnnoogttranhhtaaevvdee sutthcheeh ppdpeoooawwwteheer,rr ttbbhouuettdPeflfsaaaiiingllssnsahttatooellddadeeissssiuitggcrnnciaabettuseetseoaarthBsseuueccuncnceedefississcstooirarrirybBBueteonenredefiifpficocisriauatrrciyyohnpBporrfeiionosrreufcit(och0iaBssreuuynccchhifsiBBcgeirenaanernefyti'feicsdciisaashrruayycr''hses to such Beneficiarys estate. death, the Plan shall distribute to such Beneficiary's estate. the undistributed portion of such Beneficiary's share e66v.55ent a BenefBBiecenineaefrfiyic,ciiaa0rryywhDDioismsccllpaaaiiymmmeeernr..tsNNhooettrwweiuittnhhdssettraannwddoiinunglgdtthhoeethffeoorrrweeiggsooeiinnbgge ppmrraoodvveii,ssiiodoninssscolofafittmhhsiissalAlArrottriiccalleney66,,poiinrntitthohene soeoufvfcetthnhhtaatptaaBByBemeneenennfeetiffcisiciciaisaarhrryayyls',lstopiinanwtstesrhreeoststmot tiinphneassyuupmccehhresnppotasnayyhmomeernreetpnuset,snr,dsoessnruusccwhhsopddueiilcsdsiccfloliaaetihidmemerebwddy ippstoeohrrebttiiePooannmrtoaoidfcfeissp,uuadccntihhsctBBloeaenintmeaefskifeiccailisalaurrocyy'rh'ssadniiinynsttceeplrroeaesristttmioeiidnnn disinniuttsceecrhrelesastpi.ta.myemIdInnepnttohthrseetieesohvvneaenolnltft pstthahuseecshPPataBorrettnitiehccfieipipcaapinneattrrsdydoiindd nnioonorttteprsseeppsreetsccoiiinfnfysysausapcppheeecrrpissfaoioyennmdeoobnrrtyppseethrsrhsseaoolnnPlssaprt(ato0iscsttiapaokkaeenttddhieitsoscpcleltaaraiksimeomeendsdouriicnnhptteeedrrreeissssotctsnsl,sa, isswmuuheccohdh. wwdthoioseuculVlladdIiPmbbeeerdeeefnnpettrioiettrllnteeicoddendtthhoaeefbrroeesvttuoeoc,hppwuuBrhrseisuuncaahenneftivtceti(oar0rttyihsh'seeapiPPnpaaltrerittrciieaccsbiitplpaeiannnptt'su'ssurscdduheeasspniitaggynntmaoatteiitonhoentnsfoosorrhrattehlhgleeopiddaneesgsssiipgtgronnoaavtthitiiseooinnponemmsroasafoddtneehoiwwrisitpthhAerrtrrseieocssnlppseeeccw6tt,httiooof tsshuuecchhVBBIePennereefiffieccriieaanrrycyehhdaaddabddoiiveeedd, immediately preceding the deathofthe Participant. whichever is applicable pursuant to the foregoing provisions immediately preceding the death of the Participant. of this Article 6, if -1- -11- 22775500..00114477 AARRTTIICCLLEE 77 UUNNFFUUNNDDEEDD PPLLAANN 77Pa.11rticipants.NNooAsTTrsruuucshst,t..thTTehhbiiessnePPflilaatnns piisasyiiannbttelenenddueendddettoro tbbheeisaaPnnla"nu"unwnfifululnndbdeeeddp""aippdllaasnnolooeflfyddeefffreeorrmrreetddheccoogmempnpeerenanslsaatatisioosenntsffooofrrttthhheee PsCChoaoamrlmtplicapninapoynta.ynh.tas.vTTehhAeeasnCCysouoomcmbhplp,aiatnghnayeytibddoenooneetessofinnstsoeotttpaaiinsynittaedebnenlddefututononddccsrreeeoraartttheemisaaaknnPyeylantitrrnuuwvssetitlsliitnnbmeeccnooptnnasnniediecncsttotiioholeennlyiwwnifivrttoehhsmttthmhtiiehssnetPPgllfaeanunn.n.edrsaTTlrhheaeefsesCCrerotosemmdopp(faa0tnnhiyyen AApsrhrrtaotiilmcclillneseoe44t.(.h0aTTpvahheyeeamCCnoyoonmmoepbypalainginnayytts'ishoenoobfbtullotiiuggrsaaeet.ttiiooannsssiduuennfddueenrrdttshhiiossr PPmllaaannkesshhianalvlllebsbteemmmeenertreselliyyn ttthhhaaett of an unfunded and unsecured investment funds referred to in of an unfunded and unsecured promise to pay money in the future. 7b7e.22nefit payUUmnnessneetccsuurrfeerddomGGetehnineserrPaalllanCCrerexedcdieitptotorra..s NpNrooovPPiaadrrettdiicciiipnpaaAnnrtttoiorcrlBBeesenn5eefafiinccdiiaa6rr.yy ssUhhnatalillllhhsaauvvceehaapnnayyymrriieggnhhtttsttooarrreeeccreeeiicvveeeivaaenndyy, bttuhhneeesneericifggiuthhrptessdaoyofcmfrceeeadancictthhsorfPPraoaorfrmttiticchtieihppiCaasnnotPtmlaapannanddneyBBxecenenepeftfiicacisiaarpryyrouuvnnidddeeerdr ttihnhiissAPPrltliaacnnlessshha5allllanbbdee nn6.oo ggUrrneeataittleersruttchhhaannpttahhyeemrreiignghhtsttssaooreffaraeggceeennievereradall, unsecured creditor of the Company. AARRTTIICCLLEE 88 AAM MEENNDDM MEENNTT AANNDD TTEERRMMIINNAATTIIOONN OOFF PPLLAANN h88o.11wever, RtRhiiaggthhttnottoo aAAmmmeenneddnm.de.nt33MMormmamayoydiaafttiaacnnayytittoiinmmeeshaaammlleennadddvooerrrsmmeolodydiiffayyffttehhceet PPtllhaaenn irinnigwwhhthsoolloeefoorarniiynn ppPaaarrrtt;lcppirrpoovavinidtdeedod.r, hBBPaoeernwnteiefecfiviicecpiariaa,nrtryy,thaaaBtcceqqnnueuoifirireecaddimaruueynnn,dddeemerrmetptnhhlteeooytteererrrmmmssoordooifffoitctthhaheeetrioPPnlplaaennrshsaaaosslnl iinsnahdaeevlffelffreesccnettoltypprribiaooefrrfettacoot rssteuhuqcceuhhisriiaagtcctehtiitoosntn.o.ofsTTuachhnheeyccaoPomnnaesxsneetdninctmtipeooanffnttaannooyyrr mP`maoorddtiiicffiiipccaaatntiitoo,nn BoofeftnthheeeficPPillaaarnny.., employer or other person shall not be a requisite to such amendment or 8t8e.22rminate theTTePerlrmamniinnaatattiaionoynn.t._imW Wehhiailnleed iifttoeerxxappneeyccttssrettaoosoncc.oonnttiiUnnpuuoeentthhtiihssePPtlleaarnnmiiinnnaddteefifioinnniittoeefllyyt,,h3e3MMPlarrenesseearrnvvdeesstotthhteeherriigegxhhtttenttoto tppseheerarmlmrliminiteatmetdmededbbthiyyeatsseePecclltatyiinoodnnaits44t00ar9ni9bAyAuttooeimffittenhheecaanCCsdohoddfetoe,o,r aatallhlnleyeelrlereeeccsattpisieooosnnntssi.vtteooUPccpaooornnttntirrciitibhbpuueattneettesttroomattnihhndeeatPPBielolananennfoisscfhhaiatlahllrleibbeeePslrrateenhvveooakeknneedtdditraoaenndtdrheettmhhaeeeixPnPtilleaannnngt balancesofthe Accounts shall immediately distribute balances of the Accounts. in cash to the respective Paxticipants and Beneficiaxies the entire remaining "12 -12- 22775500..00114488 AARRTTIICCLLEE 99 CCHHAANNGGEE ~ IN CCOONNTTRROOLL i99.m.11mediately di`TstTererirbmmuitinneaaittniioocnnashUUp(p0oonntheCChrheaasnpneggceetiviinne PCCaorontntitrcriooplaln.t. s TTthhheiissamPPolluaannntssshhacalrlleldttieetrremmdiitnnoaattaeell aaAnncddcottuhhneetsPPlluaapnnonsshhatalhllle occurrence ofa Change in Controlof 3M. immediately distribute in cash to the respective occurrence of a Change in Control of 3M. Participants the axnounts credited to all Accounts upon the s99h.22all be deeDDemefefiidnnii1tt0iioonhnaoovfef CCohchacaunnrggreeediinnifCCotonhnetrrteroolisl.. aFFoo"rrchppauunrrgppeoossieenss oothffetthhoiiwssnAAerrrtstiihccilleep 99o.,faa3CCM"hh,aanng"gcehiiannngCCeoonntitnrrooellfofofefct33iMMve control of 3M, andlor a shall be deemed to have control of 3M", and/or a ""occchhcaaunnrggreeediinniftththheeeoorewwnnieserrsashhi"icppohfoanfagaessuuinbbssttthaanenttioiaawll nppeoorrrstthiioiopnn ooofff 333M M M'"'Ss, aa"sscssheetastns""gaeassinddeeefffiifnneeecddtiviinen TTCroredeaeas.s.. RReegg.. sseeccttiioonn 11.440099AA-3-(3i()i)((55)) oorr ssuucchh ootthheerr rregeulgatuionloorargtguuiiiddaoanncncee iissssuueedd uunnddeerr ssoeccttiioonn 440099AAooff tthhee Code. 9o9f.a33ll reasRRoeneaiibmmlbebuulrresgsaeelmmeaennndtt aoocffcFFoeueeensstiaannngddfoEEexsxppaeennndsseeesxs..peTTnshheeesCCioonmmcpupraranenydy bssyhhaalslllucpphaayyP(at0ortciecaaiccphhanPPtaarrittniiccsiieppeaaknnittnttghheeoaaommbootuaunintnt oooprurfreaepnlnolffsoroeerrsaccseeioshnhidiassibslooemrrilshheseegerradlrriibaggynhhdtttsshaeuucncncoddoeueurnrrttttihnhaiigsss fbAAeereritstiniccgallneesdp99u,e,rxuiupnonelulnesesssesosrsaaifnrllaicavwuwosrlsruoueiuidtst.cbcoyoTmmshmmueecehnCncocPeemaddprtaibbcnyyiypttahhnseehtaiPPlnlaarrstateiilcecsikioppinaapnngattytfofotoorrobscstuauacccihnhh pPPPaauarrrrttptiiiocccsiiipeppasaannnttitsittndhhieecsomaanmminsoesocueutndnittobnoyoffwtihaatlelhll csrroeueaucasrhsotonnPaaaasrbbtlbilceeeiipnttaanagtxx'ssaaprnnuddcricoffiiuinnpsaatnnoccroiifaaflrlpivappoyllalmaonenunnnsiit.nnsggpTuffhereeeesssuCaaanonntmddtpoeeaxxtnhppyieesnnsAsshereasstlliiicannllcc9seuuo.rrrrpePeaddayybbmtyyoensestuaucccohhhf these legal Participant these legal and accounting fees, as well as these tax and in connection with such Participant's receipt of and accounting fees, as well as these tax and pffaiinynaamnnceciniaatlsl pppullaarnsnunnaiinnnggt tfofeeetehssisaanAnddrtieecxxlpepee9nn.sseePss,a, yssmhhaaellnllt bboee f mtmhaaeddPeearaatssisscoioopoannntaasss taadadmxmianbiinlseitsyrtraeatatirivveeilnlyywhffeeiaacsshiibbltleeh,e, bbPuuatrttnnioocipllaaattneetrrittnhhcaaunnrsttwwthooesaaennddfooonenes-eah-nhadallfefxmmpoeonnnstethhsss. ffooIllflloaowwPiiannrggtittchhieepaeentnnddisoofaf tpSShpapeeyecmcPieifafniireettiddcsihEpEamamlnlpptln'lsoooytytaeebxeeeabamanlnaedddyesseuuapccrrhhiionrppaawtyyohmmtiehcenehnttftihriisssetmmPdaaaaydrdtoeeicfiooptnnahneaatccsiccenoovcueuunnnrtttsohotfmhfoettsnhheteehfPePaefarsortlitiaclcinopidwapniaten'nxgstp'tsehneSSseeePppasa.rartraaiIttcfiiiooapnnaPnffatrrrsotoimScmeippSSaaeernrratvvtiiiisco.ena, pffrraooymmmeSSenertrvvisichceae.l.l not be made prior to the first day of the seventh month following the Participant's Sepaxation AARRTTIICCLLEE 1100 GGEENNEERRAALL PPRROOVVIISSIIOONNSS 1A10d0m1.1inistratorAA,ddmuminndiinesristttrrhaaettisioounpneroovffisttihhoeen PPallnaadnndiaarnneddctiDDoiinsosccfrreettthiioeonnCo.mmTTihthitisseePP.llaannBossthhhaallltlhbbeeePlaaaddnmmiAnidnimissittneeirrseetddrabbtyyortthhaeendPPlltaahnne ArCCuoodlmemmsm,miintfiittosttreermeeastosshahra,naldlullnphhdraaeovvrceeethdffeuuulrlslleuspppooeawswrveetirhsreioayannndddaenaaeudumtthdhoniorreriecitcteyytsiso1tano0ryoiinnftftteeohrrrepprtrCeehtetomttphhrmeeopiPPteltlraeanen,a.,dmttBoionoeietsshstttaatrbhbaleiltisishPoh,nl,anoaafmmAetedhnnmeddiPnaalainnsnddt,rarraetenossdcrciian(nn0dddtaaatnnhkyyee rdaauennclyyeissoo,ittofhhnoeesrrr,maaasccctttaiiinooodnnnspaaorssorcttihehnedetyyuerrpeddrseeeeetamamstitnnohneeesccyeeosdsfsseaaaernrmyyy pnoorrerocvaaeiddssvvsiiaiossrnaaybbolflfeoertiihntnehecPclaaparrrrnroyypiinenggr out their duties under the administration of the Plan, out their duties under the PaPlnlaadnn..to Anytake Any decisions, actions or interpretations of any provision of the Plan "13 -13- 22775500..00114499 mmmoaatddebeebbuyynittfhhoeermPPlllyaannaAApdpdmlmiicnidinsittsotrrasatitmooirrlaoorrrlytthhseeitCCuoaomtmemdmitiittntdeeieevissdhhuaaalllllsbbaeendmmsahaddaeleliibnnetthhfeeiiinrralrr,eessbppieenccdtitiinvvgee assnoodlleecddoiinsscccrrleetutiiosonni,o,vnenneeaeelddl persons interested in the Plan. not be uniformly applied to similarly persons interested in the Plan. situated individuals and shall be final, binding and conclusive on all s11e0l0l.22, assign,NNootnrnaasansssfisegirgn,anbpailbelidilgtietyy,..anNNteieiciittphhaeetrre,aa mPPoaarrrtttiigccaiipgpaaenntotnrnooortrahanenryywioosttehheeerrncppueemrrsbsooennr,sshhtaarllallnshhfaaevvr,eehaaynnpyyotrrhiigeghhcttattoe ccoorommcmomuntuvetee,y, isipnnealylaa,mddeavvnsaastnnisgccaneer, eootefrfaxanapccsrttfeuuesaarsl,llpyrreleeccddeeeigicppeltt,arttahehndeetictaaoimmpobaouetuennn,totsmsn,,aiosifrfstagianagngnyyae,,blopperaayyoaaantbhbdleleernwohhnieetsrrreeeaunuensnndfdceeeurrar.m.blbeeAA.rl,llltNrppaoaanyyspmmfaeerertn,ntothssfytpaahnnoeddthaettmhchoeeautnerriitggoshhrttpsscaoyttnoaovbaaelllyell dhphoeaebryrteemsuu,ennndjdetuesrdr gassxmhheeaalnellltx,,sppprroeriirsoosrrldyettcodoreeaacecclstat,uuraeaoldlrpptotaaryybammneesenfnnetort,n,raebbdseesibgssynuubabojbjpeelececrttaatttnoiodonssnceoiionzzfuutrrraleeanwsoofrreirnssaeebqtqlhueuee.essetNtrvraaeottniitpooannxotfffoooarrf ttPthhaheeretaippmcaaiyoypamumnnetetn'nststpoooarfyfaaaabnnnlyyye sdBBueeencbnehtesf,fiPicajcriuitaadirrcgyyim'p'ssaentbbn'aatsnnskkporruorupupdttsceceycyreioonerrst,iihnneossoorellvvvteerenanntcnocysf.yfd.erirNNveoodorcppbaeayrrttpouooprffesruaaaanntnyyitoPnPtaaorortatfiicdcliioappmwaaennsttit''nsiscAtAhcrceecclooaeutuvinenotntnstmmoaoaryfydearbb.eePaaassrtssiiicgginpneeaddntoo'srr paid o or any paid to such Participant's spouse in the event of divorce pursuant to a domestic relations order. c11o00n.s33titute NNaoocttonaatrCCaocontntotrfraaccettmpooflfoEEymmmpeplnlotoyymbmeetenwntet.e.nTTthhheee ttCeeormmmspsaaannnydd ccaoonnndddiiattniioyonnssPaoorfftittchhiiipssanPPtll,aannansshdhaalltllhennootPtabbrteeicddieepeeamnmteesdd(ttooor tctphhoreeoniivsrritidBBtueeedtnneeehfeafiricceciiiaonar.nriiteerssaM))cotssrhoheaafollvlelemrhh,apavvloneeyotmnnhooeinnrrgtiiggbihhentttsswhiaaesggeaaniPinnltsahstnte ttsChhheeaolmlCCpoboamemnpypdaaenaneynymdeeedaxxnccteyeopptPgtiaavartsseicmmaipnaayayyntP,ooattrahhtneiedcrrwiwptihiassneeetPbbtaeehretisscrppieiepcgcaihifnfititcscoaal(lblolyyer dprreiertostaacviihnindaeereddgdeiinhnseuttrhcheeheinceP.ammrptpMlilocooiyyrpemmaoenevtnnetatrt,ooanffnoytththheetiinCCmgoeommifnpopratahnaniynysy Poorrlreaattnosoosiinhnnattweelhlrraffbteesrereoeedwwveieeitrtmhh.ettdhheetorriiggghhivtteooffantthyheePCCaoortmmicppiapananynyt tttooheddiirssiccgiihpptlliintnoee booerr discharge such Participant at any time for any reason whatsoever. c11o00n.44strued asTTteehrrommusg.sh. thW Wehyhewerreeervveeerrusaaenndyyiwwnootrrhddessplaaurrrecaluussoeerddinhheetrrheeeiinnsiiinnnguttlhhaeer,ssaiinsnggtuuhlleaarrcaoosrreiimnnattyhheebpepl,luuriranal,la,lltthhceeayysessshhawallhllebbreee they would so apply construed as though they they would so apply. were used in the plural or in the singular, as the case may be, in all cases where s11h00a..l55l not conCCtarapoptltiiooornnsasf..fecTTthhteeheccaamppettaiiononnissngoofofftthhceeonaasrrtttriicucllceetssioaannnddofssaeenccyttioioofnnsstoosffpttrhhoiivssisPPilolaannsn.aarrec ffoorr ccoonnvveenniieennccee oonnllyy aanndd shall not control or affect the meaning or construction of any of its provisions. t11h00e.66lawsoftGGhooevveSertranntiienonggfMLLiaanwwne.sotTTahh,eeeppxrrcooevvpiitssiiooonntssheooffexttthheiisnstPPpllaranneessmhhpaaltllel dbbeebyccoofnnesdstetrrruauleeddlaaav.nndd iinntteerrpprreetteedd aaccccoorrddiinngg ttoo the laws of the State of Minnesota, except to the extent preempted by federal law. s11a00i..d77 illegaliVVtyaaloiliddiiitntyyva..liIdInintcycasashsaeelaalnnnyyotpprraoofvvfieissciitoontnhoeoffretthhmiiassinPPillaannng spshaharaltllslbbheeerreruuolflee,ddoburotrdedhcielscalaPrrleeaddn iisnnhvvaalallliibddeffocorornaasnntyyrurreeedaassaoonnn.d, enforced as if said illegality enforced as if ssouurccihhnviillallleeigdgaailtlyoorrshiinanlvvlaalnliioddt pparrfoofevvicisstiitoohnne hhraaeddmnnaeievnveienrrgbbepeeaenrntsiinnhsseeerrrettoeedfd, hercin but this herein. Plan shall be construed and h11i00s.88or her bCCelnlaaeiifmimtsss PPunrrdooeccreedtdhuuirsreeP..laAAnnnsyhyalPPlaarsrttuiibccmiipipaatnntat oowrrriBBteeinnneeffiriceciqiauarerysytwwfhhoroorddeiivssiaaeggwrreeteeosstwwhieitthhPlaaannnyyAdddmeeiccniiisssiiotornnatrreoegrg.aarrddTiinhngge hPtPhlilseaannroerAAqhdudmeemirsntibinesinstterrfaaitttoosrrussnhhdaaellrl respond in writin to this Plan shall submit respond in writing to ssauuccwhhriaatterreneqqruueeeqsstutewwsitittfhhoiirnn sixty (60) days ofhis or he reccipt of review to the Plan Administrator. The sixty (60) days of his or her receipt of the request. 14 -14- 22775500..00115500 `TrTehhaeesoPPnlalaabnnleAAcddamumisneiin.sitstrraTathtooerr Pmmlaaya,yn, Ahhdoomwwienevivesret,rr,ateeoxxrtt'eesnnddrettshhpeeonrrseeeppllyyshapplelerriibooedd wffrooirrtiaaennn aaidndddiaittiiomonnaaanllnessriixxttcyyal((c66u00l))atdeddaayystso ffbooerr ruuennaddseeorrnssattobooloedd by the cause. by the PPaarTrtthiiceciippPaalnnattnoorrABBdeemnneiefnfiiicscitiaraarrtyyo,,r'aasnnddressshhpaalolllnssseeett forth shall forth: be written in a manner calculated to be ((aa)) tthhee ssppeecciiffiicc rreeaassoonn oorr rreeaassoonnss ffoorr aannyy ddeenniiaall ooff bbeenneeffiittss:; ((bb)) ssppeecciiffiicc brraeesffeeedrr:eenncceess 1to0 tthhee pprroovviissiioonn oorr pprroovviissiioonnss ooff tthhiiss PPllaann oonn wwhhiicchh tthhee ddeenniiaall iiss based; ((c)) aa ddeessccrriippotrtiiooBnneneooffficaainanyryy aatddoddiititiimoopnnraaollveiinnhffoiosrrmmoaarttiioohnner oocrrlaimmmaa,tteerariniaadll annneecceeexsspsslaararynyatfifooorrn ttohhfee wPhPaiarxctthiicciisppuaacnnhtt information or material i necessary: and or Beneficiary to improve his or her claim, information or material is necessary; and and an explanation of which such ((d@) aann eexxpplilananfnoaarttmiioaontnionooffas ttthhoeethePPllsaatnne''psss tccollabaieimmtssakerrneevviiifeewwthe ppPrraorotccieecddiuuprareent oaarnnddBencoofttihhceeirraryaappwppirrsoohpperrisiaattteeo aianppfppoeeraamll atththieeonPPllaaasnn tAAoddmtmhieninissisttetrrpaasttootror'ssbddeeecctiaisskiieoonnn. if the Participant or Beneficiary wishes to sIIhffattlhhlee PPfiaalrexttiiacciippwaarnnittttooerrnBBeaenpnepefefiaiccliiaarwryyitddhiissatahggerreeeeCssomwwmiitithhtittchheee ddweeicctiihssiiiononn o1o2ff0tthheedaPPyllsaannaAfAtddemrminirinesitcsretairatvotiornr,g, hhteeheoorrPsslhhaene A(Asd9hdm0ai)mlnlidisnftiiralseatotryoafarti'osssrw'srreirrtseetcpesepnoinopsntaoespe.fp.eTTtahhlheeewaCCpipotoehmmalmm.tihitetTtteheCeeossCmhhaoalmlmllmirrtiteeetssetppeoowennddimthiainniyn,wwrrih1itot2iiw0nneggvdettaoory,sssuueccxahhtfetaaennnrdaartppehppceeeearailvelpiwwlnyigitthhpitiehnnreinnoiidPnneelfattoyynr a`(a29nnm0aa)addndddniaiteytiirsoonnocaaaflllicnntusiilnnraceetttceyyedi((p9t9to00)o)bfddeatahuyyenssdaffeoporrrpsetrreaoealao.ssdooTnnbyahabbeltleeCheoccaamPuuasmsreet.ii.tcteiTTpehhaenmetCaCoyoorm,mmhBimoetnwiietecfteviecee'i'rssa, rrreyeex,sstppeaoonnnnddsseetshhsseahhlarallelllpbblboyetehpwwersrreiiitttoteedfnnofroitinnhr wttahhheemicssapphneenctciesifrfiidccceacrrlieecsaauisslooaonntnessidffbootoarrsiibettseds ddueenccdiisseiiroosnntooaannddd brryeeffteehrre1to0Patthhxeeticssipppeeaccniiftfiicoc rpprBrooevvniiessiifoiocnniaoorrry,pprraoonvvdiisssiiohonanlssl oobffottthhhee Plan on set forth Plan on which its decision is based. i11t0s0.99successSSourucsccceaesnssdsoorarssss..ignTTsh.hee ppTrrhooevviisstiioeonnmss oosfutfctichesissPsPollraasnnsahsshaalullslebbdiinnhdderaaenniddn iinsnhuuarrleel ttoionttchhleeudbbeeenaennfyietocfofoftritphhtoeeraCCtoioommnppaoanrnyyotaahnneddr biabtluuslssiiosnnufeecsstcssheeseesnnbotutiriststyiynawwenshhdsiiccaahhsnssdhsighaalnasllssl,.,etwwshTheohetfethhteethrerebrmbyCyomsmmuepercargcgneeerys,rs,,occraosonnndsasosolsiluuidcdsaceateidtsioosnhon,re,psrpeuuiornrfcchhasahnasyaselelosoruirncochotlhtuchedoererrwpwioasirnesa,eyt,icaaooccnrqqpuouoirirrreeoattisshouuenbbrsstbotaaurnnstitoiinatalhellsleyysr eniity all of the entity. business and assets of the Company, and successors of any such corporation or other business A11d00m.11i00nistratoIrInntcchoaotmmpapeneytteePnnatrtt.i. ciIIpnnanttthhoeereeBvveeennnetftittchhiaaattryiitttosshhwaalhlllobbmee affobouuenndnd tuuppioosnnpaeeyvvaiibddleeennccueendsseaarttiitsshffiaasccttPoolrrayyn t(io0s uttnhhaeeblPPellaatnno csAchaadarrleemlffionohrriasvhhteriiasstboooerrrehhtnheearrmtooaawwdnneynaPfabffayfaxaitiairrcssibdpbuealecnycatauuoassureetBhoooefrfnieiizlflleilncdneieassgsrsuyoaaorctrodcaiiwcacdnhiedoonemrtnt,oa,taabhnneeyyrnepplfaaeitygyamimlseepnrnatetypddraeuubsceleen((tuuuannntlldieevesserss)tpphrmriiisaooyPrr lccabllnaeaiimismpauttihhndee,arrbeeulffepoororteone. h`saahappvapplerrlaoocpphrcraiievaapetteetbeiinedneddrneeemmsmnpnioafinfdisiicecbaaitbtliiyiootnnyaooffdfourtthlhyseeuPcaPlhulaatnnhP,a,orrtotoiizcettihdhpeeagnsstuppaoooxuurdssiBeeaennooerrfoioorcttihhoaeertrrhy.eppreerrlAsseonognnyalddseerueeecpmmhreeepddsaeybbnymytaetttnihhvteee)PPmllamaadnnaeyAApddbummreisinupnaiainssitdttr,arotauotptrhoottiornos Section 10.10 shall be in complet dischargeof any have accepted responsibility for such Participant or Section 10.10 shall be in complete discharge of any llBiaabebinlieliifttiyycittahhreeyrr.eeffAoorrneeyuusnnuddceehrr tis Plan. payment made this Plan. pursuant to this Is: -15- 22775500..00115511 A11d00m..11i11nistratoIIrnnddaeenmmdnnitfhifeiiccmaaettmiioobnne.r.s TTofoo ttthhheee Ceeoxxmtteemnnitttippceerermmiaitgttateeidndstbbyyanllyaaww,a,ndtthheeallCCocolmmapipamasnn,yylossshhsaaellsll, iidnnaddmeeammgnneiifsfy,y etthxhepeePnPsllaaenns AaaPnlndaddmn lliwiinaahibbisiitlclriihattyytoisraarrnaiiosnstiidnncggothvffeerroromemmdemttbhhybeeeiiirrrnsrrseeuossrfppaotonnhcnseesiibCbpialioliiimtdtiiemefssoirtootberryetthhtaeehgeappiCeneorrsmftfopoararmnnmyyaa.nnaccneedunoolaffellsttshcheeltaiihriremddssuua,ttmiileeoessssiiisennsd,cecotdoneannrmnemeacicgtntieieoosdn,nteowwxiibptteehhndsttuhehcese tP1o0laggnrroowsssshinnceehgglilsiiggneeonntcceecooovrreiirnnettdeennbttyiiooninnaasllummriaisnscccoeonndpduaucitcd.t.for by the Company, unless the same is determined to be due 16 -16- 22775500..00115522 33MM VVIIPP PPlluuss PPllaann ((AAmmeennddeedd aanndd RReessttaatteedd aassooff JJaannuuaarryy 11,, 22001166)) EExxhhiibbiitt 1100..1166 22775500..00115533 33MM VVIIPP PPlluuss PPllaann IINNTTRROODDUUCCTTIIOONN AANNDD PPUURRPPOOSSEE `TbTyhheeofppfuuerrrppioongsseetoohfefmtthhtiisshePPollpaapnnoiritstuotnoiatatytttrrataoccttcaaannmdd aiindndccieetnnittoneeallliiggiribbellteeirhheiimggehhnlltyybcceoonemmfpipetensnssbaaytteedddefeeemmrrppillnoogyyteeheessrtteoocerrieepmmtaaoiinnafwwipitothhrt33ioMMn obfy othfefierrincgomtpheenmsatthieoonppoonrtauntitayx-tfoaveoarrendadbdasiitiso,nawlitrhetitrehemebneltibeefntehfaitts sbuychdeofpeprroirntguntihteyrewcielilptpoerfmaitpotrhteisoen. eomfptlhoeyireecsomtopeinnscarteioasne otnheiar talxon-fga-vtoerremd fbinaasnisc,ialwisthecutrhitey.beliTehf ethaPtlasnucdhoeospptohirstunbiytyswupiplllepmeernmtiitngthetshee ebmefporloey-teaexs dteoferinraclreparsoevitshieoinrs loofngth-ete3rmM Vfionlaunnctiaarly sIencvueristtym.entThPleanPlaannd dEomepslotyheise bSytocskupOpwlnemeresnhtiinpgPlthaen (b(VVeIfIPoP)r,)e, -wwtahhxiiccdhhefaaerrrecrallilimmpiirttoeevddisbbiyyontthsheeorrfeetqqhuueiirr3eeMmmeenVnttossluoofnftttahhreeyIIInnntteverrennsaatlml RReenevtveePnnluaunee Code. and Employee Code. Stock Ownership Plan e`TfThfheeectppirrvooevviiJssaiionounnassryooff1.tthh2ee00PP9ll.aann TwwheeerreepuoorrripiggoiisnneaasllllyyofeetffhffeeecctatiimvveeenaadssmeoonfftJJaawnneuuraaerryyto11,,(a22)000b02r2.i.ng TTthhheee pPPlllaaannn dwwoaacssumaaexmnnetenndidneetddo cecofofmmepcpltliiivaaennccJeeanwwuiaitrthyh 1tth,hee20rr0ee9qq.uuiirrTeemhmeeennpttussrpoooffsessseeccottfiiootnnhe44a00m99AAendoomff ettnhhteewCCeoroeddeet,o, i(inan)ccllubudrdiiinnnggg thttheheeplrraeengguuldlaaottciiouonmnsseniitssssiunueetodd tpthhueerrrseeuuuannnddteer1r,, eaalnneddct((ibbo))ncscllwooissteehtthrheeespPPellcaatnn ottootnnheeeww20cc0oo8nnttrPrilibbauunttiiYooennarss.eeffFffeerccottimivveeOcuutppooobnnertthh3ee, rr2ee0cc0ee4iippt(totohfefadalallltcecoosnnetctrrtiiibbouunttii4oo0nn9ssAmmawaaddsee. apadduddrseeuddanttoot tttohheeelCCeocodtdieoe)n) stthwhrroiotuhuggrhhesDDpeeecccteemtombtbehree331r210,,0228000P088l,a,ntthhYeeeaPPrll.aannFwwroaamss ooOppceetrroaabtteeedrd 3ii,nn2gg0oo0oo4dd(tffhaaeiitthhdaccteoommspeplclitiaiaonnnccee40ww9iiAtthhwtthhaees rraeenqqduuiitrrheeemmeeUnn.tStss. oofDfesspeeacctrtiitoomnnen44t0099oAAf iiTnnrccellauusdduiirnnygg ttihhnee cssoppenecncieiaaclltittroraannnsswiittiiitoohnn rtruuhleleessimiispsssluueeemddenbbtyyattthihoeenIInnottfeermnsaaellctRRieoenvvee4nn0uu9eeA.SSeerrvvFiicocere aaanvvodoiiddthaannecceeU.ooSff. ddDooueubpiba,tr,tmtthheeentaammoefennTddrmmeeaensntutrywwaaissn iicnnottenennndedecedtdiottnoo waappitpphllyythbbeoottihhmpttoolemddeeeffneetrrarrteeiddonccooommfppesenenscstaiatotinioonn40ss9uuAbbj.jeeccttFottoor. ssseeecrctvtiiioocnnes44p00e99rA4fooofrftmtehhdeeoCCnoododere a((iif..ee..r,, dJdeaefnfeuerarrrreeydd c1c,oomm2p0p0e5en)ns,saatatisioownnelcclrreeaddsiittdeeeddfeuurnnrddeeedrrctthohemepPPellnaasnnawtwihhoiincchhcrrreeedllaiattteeeddd aaullnlldooerrriintnhppeaarxPtlt attono wswehhriviccihhcesrreepllaeattrefeoss rmeennettidirreeollnyy ottrooafssteeerrrvviJiccaeenssuappryeerrff1o,orr2mm0ee0dd5),oonnas oowrrelbbleefafoosrrdeeefDDeerercceeedmmcbboeemrr p33e11n,,sa22ti00o00n44crtthehdaattiteiidss ucenlliidggeiibrbllteehettooPlabbnee "g"grraannddffaatthheerreedd"" ffrroomm aapppplliiccaattiioonnooffssceccttiioonn 440099AA ooff tthhee CCooddee.. `TThhee PPllaann iiss hheerreebbyy aammeennddeedd aanndd rreessttaatteedd eeffffeeccttiivvee aassooffJJaannuuaarryy l1,, 22001166,. AARRTTIICCLLEE 11 DDEEFFIINNIITTIIOONNSS FFthooerrcttohhneeteppxuutrrppclooessaeersslyoofifnttdhhiiicssatPPellsaanno,,thttehhreewiffsooell:lloowwiinngg wwoorrddss aanndd pphhrraasseess sshhaallll hhaavvee tthhee mmeeaanniinnggss iinnddiiccaatteedd,, uunnlleessss the context clearly indicates otherwise: P11a.1r.ticipant undAAerCCtCCheOOPUUlaNNnTTp.ur. su""aAAnctccctooouunAnrttt""icoolrer 4""AAccccoounutnst"s" mmeeaannss tthhee rreeccoorrdd ooff tthhee aaxmnoouunnttss ccrreeddiitteedd t0o aa Participant under the Plan pursuant to Article 4. P11a2.2r.t.icipant, orBBaEEs NNpErEoFFvIIiCdCeIIdAARRinYYA.r.tic""lBBeeenen8f,eifciticoairaryre"yc"eimmveeeaaannnssy tthuhenepppaeierdrssoobnna,,lappneecrressooinnnss soourrcheenntPtiiattryytiddceeispsiaigngtnn'aastteeddAcbbcyoyuntthhtees Pffooallrlltoiocwwiipinnaggnthh,iissoroorrahhseerpr rddoeevaaittdhhe.d in Article 8, to receive any unpaid balance in such Participant's Accounts 2-2- 22775500..00115544. 113.3.. CCOODDE.E. ""CCooddee"" mmeeaannss tthhee IInntteermnaall RReevveennuuee CCodoeoofdf1199e8866,, aass aamxennednedded.. 14 of 3M. CCOOMMMMIITTTTEEEE.. ""CCoommmmitittteeee"" mmeeaannss tthhee CCoommpepnensasattiioonn CCoommmmitittteeee ooff tthhee BBooaarrdd ooff DDiirreeccttoorrss a11n5.5y.. succCCeOsOtsMM otoPPhrAeANNbuYYs.i.ne""sCCsootmmhpearpenaoynl":y"mmeeaannss 33MM CCoommppaannyy (("`33MM"),itistsUU.S.S.. aaffffiilliiaatteess aanndd ssuubbssiiddiiaarriieess aanndd any successor to the business thereof. m116.e6.a.ns baseEELLpaIIyGG,IIBpBrLLofEEitCCsOOhaMMrPiPnEgENNaSnSdAATaTInInOOuaNNl.. i""nEEcleliniggtiiibbvlelee(CCeoxomcmpleupndesinanstgaitoiaonn"ny"opofofraatiPPoanaxrtotifciicpsaiuncpthaffnooartrnnaaunnayyl PPillanancnenYYteeiaavrre cmppoaaenyytaaarnbbisllbeeubtaiiinnsoenrrseepssmattyarrii,dccettpeerddtoofssittstoousccchkkharuuPinnnairgitttssi))acnicedpaaarmnantenesndduSabbalyyviitnnthhgceesenPPPtialavrurettsiicc(AiieppcxaaccnnolttuundddtiuunrrguiinnngdgaenryssuutccphhhoertPPVilolIaanPnn oaYYnfeedaasrurb,,cyhuuannanrrnyeendducuuoaccnleetddrinibbbcuyeytnitaaoinnvnyyse mcmionaancddtoeermibeoounntuionbbndeeeshhraamllfsfaedooceftfiostsonuuccshh1u2cP5PhaarxoPttfiiaccrititpphicaeaninpttCaounudnnte'd.dseerSr aaEavliiccngaagiffsbeelttePeerlruiCiaasomppAplleacanncnosuaaanntnddit oueennxxdccdellourucddsteehddenoffVtrroIoPmimncalttnhhudeedebPPyaiarnrtactiienccnyiitppiacavnoentsnt','tssriabttawuaxaxtriaaodbbnsll,ees ecicnomocmpmomlmmiosyeisseisruoionncnsdos,en,rtffrooisrrebeeuciittggiionnonnsssee1rrt2vvoi5icceeemopppflrretoehmymeeiiueuCmmobssdeneaae.nnfdditEaallpllillogaowinwbsaal,nenccreeCessio,,imminbncpucoreomsnmeesmaeetaianorrtinisssiidnnooggrefpfsrraoonymmmoetssnttiotoncscckkluioondppetltiiiooeinunnscs,te,hnsseteeripcvpoaeafrsr,aa,ttoiiaorownnlapuprmaadpyys..,, sum payouts ofa Participant's unused vacation benefit. employer contributions to employee benefit plans, reimbursements sum payouts of a Participant's unused vacation benefits. or payments in lieu thereof, or lump 117.7.. EEM MPPLLOOYYEEEE.. ""EEmmplpoloyyeee"e" mmeeaannss aannyy ppeerrssoonn eemmppllooyyeedd bbyy tthhee CCoommppaannyy aass aann aaccttiivvee rreegguullaarr ccsouocmmhmmoponenr-s-lloaanwws weehmmoppllaooryyeeeeeUnwwithheood iiSsstarrteeeccsooggcinntiiizzzeeeddnsaassbutssuuoccnhh aoosnnsi33gMMn'm'sesnhhtuuommuatasnnidrreeessooofuurrtccheiesss//cppoaauyynrrtoorllyll assyynssdtteermmesssi:;deiinnntccllauulddiiiennnggs esumcphlopyeersdonins twhehoUnairteeUd nStitaeteds;Stbautetsecxictlizuednisngbuantyonpearsssoingncmoveenrteodutbsyidae cooflltehcitsivceoubnatrrgyaiannidngreasgidreenetmeanlitentso wwehmhiipcclhhoytthehdee Company is aparty in the United States; Company is a party. but excluding any person covered by a collective bargaining agreement to a118m.8.o.untof coIImNpNDeDnEsEXaXtEEiDoDn CCthOOatMMmPPaEyENNbSSeAArTeTcIIoOOgnNNizLLedIIM MbyIITTa ..qua"l"IiInfndideeedxxeerddetCCirooemmmpeepnnetsnpaslatatinioounnndLLeiimmrisitte""ctmmieoeanann4ss01tt(hhaee)(aa1nn7nn)uuoalfl tathhmeeoCCuoonddt eeof((aacssoaamddpjjuuessnttseeaddtiaaonnnnnutuahalalltlyymffaooyrr increases i the costofliving). be recognized by a qualified retirement increases in the cost of living). plan under section 401(a)(17) of t11h9.i9.s. Plan afPPteAArRRsaTTtIiIsCCfyIIiPPnAgANNthTTe .l.ig""iPPbaiarlrtitiitccyiippraaennqttu""irmmeeemaaennnsstsaanonyfy SEEemmcptplilooonyyee2e.e1wwhhoo hhaass celleecctteedd ttoo mmaakkee ccoonnttrriibbuuttiioonnss ttoo this Plan after satisfying the eligibility requirements of Section 2.1. t11i1.m10e0... The oPPfLLfiAAcNiNa.l.na""PPmlelaoannf""tmmheeeaaPnnlssantthhseehappllllbaannetddehesseccVrriiIbbPeeddPliinuns.tthhiiss ddooccuummenetn,t, aass iitt mmaayy bbee aammeennddeedd ffrroomm ttiimmee ttoo time. The official name of the Plan shall be the VIP Plus. h1LaI.1sL1.d.elegatPPeLLdAAthNNe AAauDDthMoMrIiItNNyIIaSSnTTdRRrAAesTTpoOOnsRRib..ili""tPPyllaafnnorAAdadmdmimniiinnsiiststtrreaarttioonrrg"" mmthaeeanPnslsantt.hheeUppneelrresssoosnn attonodwwuhhnootimml ctthhheaenCCgoeomdmmmibytitttteeheee hCCCaooosmmmmpdimeetnlitesttegaeeate,ti,eodntthRhtheeeesPoPaluluaartnnhcoerAACidtedymnmitanineindrsistortrerraasthtpooiorsrnssoouicfbfcielttishthsyeeorf.oPPrllaaanndmssihhnaalilsllterbbieengtththheee Sil Plan. Staff Vice President Unless and until Vice President of 3M's changed of 3M's bTTyoottthaaell Compensation Resource Center or his successor. D11.e11c22e. mber 31PPLLinAArNNespYYeEEctAAoRRf.w. hi""cPPhllaaann PYYaeretaairrc""ipmmaenetaannmssaytthheceotntwtwreeillbvvueete((11t22o))thmmeoonPntltahhn.ppeerTriihooedd fffirrrosotmmPlJJaaannnuuYaareryay1r1betthghraronouugoghhn JDJaaenncuueaamrryybe11r,, 223001002i2.n. respect of which a Participant may contribute to the Plan. The first Plan Year began on 3. -3- 22775500..00115555 I11n.11v33e.stment PlPaPnOOaRRnTTdFFEOOmLLplIIoOOyeI1eI1 SVVtIIoPPck . Ow""nPPeoorrrtstffhooillpiiooPlIIlIanVVaIIpPPp""limcmaeebaalnness(0tthhteehoppsrreoovveilissiiigoionbnlsse ooeffmptthlheoey33eMeMs VVwohololuunnwtteaarrryye hIPhnoiirrvreteedfdsotloomirroerrneIethhiirPrreeletaddinrbbeyyamnettdnhhteeEpCCmrooopgmmlrpoapyamae.nneyy Saatffottecerrk DDOeewcceenmmebrbseehrrip3311P,,la22n0000a00ppoorlricwwahhbooleeeltloeecctttheedodstteoo be covered by the Companys eligible employees who were be covered by the Company's Portfolio II retirement program. S11e1.1r44v..ice wiRRthEETTthIIeRRCEEomooprraRRnyEE'TTIIaRfReEErMMaEtEtNNaiTTn.i.ng""aRRgeeettirfiei"frtooyer-r"fi"vR"eRee(tti5ir3re)emmewenitnt"th" mamteealanenassstaannfiEEvemmp(pl5ol)oyyyeeecae'r'sss SSoeefppaearrmaapttiliooonnymffreronommt ssSeeerrrvvviiiccceee oowrr iaatfhftteetrrhaeattttCaaiionnmiinnpggaanaggyee assfiitxxettryy--afftiitvvaeein((i66n35g))..age fifty-five (55) with at least five (5) years of employment 111.155.. UUNNFFOORREESSEEEEAABBLLEE FFIINNAANNCCIIAALL EEM MEERRGGEENNCCYY.. ""UUnnffoorreessceeeaabbllee FFiinnaanncciiaall EEmmeerrggeennccyy"" mmreeegaaunnlsastiaaonnn "o"ruunngffuooirrdeeassneeceeaeabbillseesueeemmdeeurrnggdeeennrccsyye""ct((iaaossn dd4ee0ff9iinAneoeddf iitnnheTTrCreeoaasds.e.oRRfeetgg.h.e SSPeeaccrtttiiiocoinnpan11t.4.40099AA-3-3((@i))(33)))) oorr ssuucchh otthheerr regulation or guidance issued under section 409A of the Code of the Participant. f11o1.1r66.p.urposeVVsAAoftLLhUUeAATVTIIPI.OONN DDAATTEE.. ""VVaalluuaattiioonn DDaatete"" sshhaallll hhaavvee tthhee ssaammee mmeeaanniinngg aass tthhaatt tteerrmm iiss ddeeffiinneedd for purposes of the VIP. i111.1m77.a.y be aVVmIIePPn.de""dVVIfIPrP"o"mmmteeiaamnnesstotthhteei33n.MM VVoolluunnttaarryy IInnvveessttmmeenntt PPllaann aanndd EEmmppllooyyeeee SSttoocckk OOwwnneerrsshhiipp PPllaann,, aass it may be amended from time to time. 11..1188. SSEEPPAARRAATTIIOONN FFRROOMM SSEERRVVIICCEE.. ""SSeeppaarraattiioonn ffrroomm SSeerrvvicicee"" mmeanesaa"a"sseeppnaarxaatstiioonn ffrroomm sseerrvviiccee"" aaSssecdtdieeoffniinn4eedd09iAinn oTTftrreheaases,.CoRRdeees.g.. WSSheecectttiihooennr 11a4.4S0e09p9AaA-r1a-(tl(hiho))n((11f))rooomrr Ssseuurccvhhiceootthhhaeesrr orrceecgguuurllraaettdiioodnnepooerrndggsuuiioddnaannwccheeetiihsssesurueetddheuufnnaddceetrsr waaSnonedduclticcdoiinrrbcc4ueu0mm9pssAettraafnnooccfreetmssheediinnCddaoiifcdctaaeett.reeaWtthhchaaetetrtth33aieMMnr adaaannStddeeptatohhxreeattiPPhoaaanrtrttfiitrccohiiemppaalnnSettveerrrlveeiaaocssefoonnhbaaaobbslnlyyaoccafainundtrteiircceiisdppeaardttveeeipddceenstthdhaasttthoennnooPwarffhutueirrcttthhihpeeearrrnttssheeewrrvvofiaiucccleetdsss wpp10eeo.rru1ffo0lodrrmmmobreaaeftpteeterrhrafssonuurcctmhhweedddnaatttyaeefpt((eewwrrhhceaeetnthhcteeer(rrt2aaa0issn%a)andnofaeettemmhppoellrooaytvyheeeaertaoogtrrheeiilnnedldveeeevplpeeeolnnfddoebefnontbnt oaccnoofannitdtrfreaiadcscetetoorrvrs))iecrwwevsoiocuupellesddrtfpphoeeerrrmmmPeaadannret(eniwcnthitlpleyyatnhddteeercwcraroeesaauassldnee eteommpnploloomyyeeoeereoortrhaaannn iitnwnddeeenppteeynnpddeeenrnctteccnootnnt(t2rra0ac%cttoo)rro)) footvvheeerr attvhheeeraiimgmemmeldeeidvaieatlteeollyfybpporrneeacceefddidiinenggsetthrhviirritctyey--sssiipxxer((f33o66r))mmmeodonnt(twhhhppeeetrhriieoordd)a)..s Aan A oSSreeppoaatrxhaeatrtiioobnnonffarroofmimdeSSeelrrevvaiivcceeoe fsshhaaalblllsennnootctebbeeifddteeheeemmpeeerddiottodo dooocceccsuurrnowwthhieillxeecettheheed PPsaiarxrtt(ii6cc)iippmaaonntnttiishssoonnor,mmiiilfliitltaaorrnyygerlle,eaasvvoee,,lssoiinccgkk allseeatavhveee coPPoaranrxtotrttiiahccceiitppr.aabnnotFt norrareettftaiahdiiinesnssplueaarapvrroeiisggeohh,tftaat1bo0lseerraneevceeeemmipipsfllbotohoyyenmmapeeenfnirttdioewwdoiintdtlhhoye3s3ifMM,noatnooderrxsaaconneeldoaanfisfgiiilxaaisat,(t6eet)huumennroeddneeitrsrhsaaannroera,aaspipofppnlllaoiicbcnalagebbellreee,xpsssoettcaaltttouuanttteegioaoonsrrtthbbhayyet tctthhoweeenntPrPtaayacr-rtttn.iiiccniFipepoaarn(nt2tth9)wiwsiimlplllounrrretpetthouusrrepnne, rattioooledppaeeovrrfeffoaoirsbrmsmbeonssnceeaerrvvfiiwidccieleelssobffneoolryrsui33fbM,Msatinootdrrutsaaeonndlfoaaofnrfgfiilsliaiuaastct,eeh.t.hseiNNrxeoo(tit6wsw)iaitmthrhoessnatttasahonnnddpiainenbrgglieottdehhxeeipfffeotochrrteeaegtglioooeiinannsggte,h, aiaast cdtdwauuneeenbtttooey-aaennnxiyypneemmcet(ede2did9ci)catalomllllyoyanstddthefetoteperrremamrciiioonndnaatbboillfeenuappobhhusyyesssniipccceaearlliwoooidrrollmmfbeenenntotsaaulllbeiissmstmiptptuahatiaierrndmmsefeionxntrt(s6tthu)haacmtthoccnsaatinnxhbbs(e6ea)eenmxxdppoteehnccattttheecddpaettuorosieorrseedsstuuihlflettthPiinnaerddtleeeiaacativthhpeaoonirtsr tctooanbbeebeuunneaaxbbplleeectttoeodppteeorrffloaorrsmtmfotthhreeaddcuutotinieetssinoouffohhuiissspooerrrihhoeedrr positionof employment. of no less than six (6) months position of employment. and that causes the Participant 111.199.. SSPPEECCIIFFIIEEDD EEM MPPLLOOYYEEEE.. ""SSppeecciiffiieedd EEmmplpoloyyeee"e" mmeeaannss aa ""ssppeecciiffiieedd eemmpploloyyeee"e" aass ddeeffiinneedd iinn TTCroredeaeas.s.. RReegg.. SSeeccttiioonn 11..440099AA--11(ii)) oorr ssuucchh ootthheerr rreegguullaattiioonn oorr gguuiiddaannccee iissssuueedd uunnddeerr sseeccttiioonn 440099AA ooff tthhee Code. 4-4- 22775500..00115566 AARRTTIICCLLEE 22 EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN 22.11Pl. an YeEEilfliaiaggiibrobifliliitttyyhe.. NAAonnvEEemmmpbplelooryye|eee"issmhhmaalelldlbibeaetceellliiyggiibbplrleeecttoeodppiaanrrgttiisccuiipcphaattePeliiannntthYheeearPP:llaann bbyy mmaakkiinngg ccoonnttrriibbuuttiioonnss ffoorr a Plan Year if as of the November 1 s, immediately preceding such Plan Year: ((aa)) ssuucchh EEmmppllooyyeeee iiss eelliiggiibbllee ttoo mmaakkee ccoonnttrriibbuuttiioonnss uunnddeerr tthhee VVIIPP;; ((b6)) ssuucchh EEmmpsplhlaooryyieeneeg piilssaneeslloiiggfiibb3lleMe fofoorrrDaaynnnddcoccnoovvLeeLrCree:dd abbnyyd oonnee oorr mmoorree aannnnuuaall iinncceennttiivvee oorr pprrooffiitt sharing plans of 3M or Dyneon LLC; and () (c) such such EEmmsphplaloroiyyneegeeorhhaaanddnueaeslsttiiimmncaaettneetddiveaa)nnnntuhuaaatll exppclleaaenndnnseeddtheccooImnmpdpeeexnnessdaattCiiooomnnpe((nbbsaaassteeioppnaayyLimppilltuussin pperfrofofeficittt Plfsfoahorranr,ttihhnteegheccoaarIlleneandnneddnxaaureradylyeeCianaorcrmepiinnentcncilvlsuueadd)tiinitnhgogantssLuueiccxmhhcietNNeodoinvsveeethfmmfebbeeIetrnrdf1oeIsrsxtt.e.tdheFFCopororremttchhpeeedeinffniisrrgasstttcioaPPnllleaaLnnndimaYYreietayaeriranrooeffsfhfttheahlicislst Pbeladne, ethmeedIntdoexbeed$2C0o0,m0p00e.nsation Limit in effect for the preceding calendar year shall be deemed to be $200,000. T"PTlhhaeen elYilieggaiirbb,iilliattyyndoofnfoEEmmEpmplploolyyoeeyeeessettooshppalaalrtrihctaipsieacteiainpinynatttrhhiieigsshtPPlltaaonnmbbayykemmaackkoininntgrgibccuootnnittorrniibsbuutitinioonansnsysshhaPallllalnbbeeYeddaeertteerbrmymiinnvieerddtuceeaaccohhf hPhaalavvniinngYg eaaannr,AAcaccncodouunnntot aaEssmaaprrleoossyuuleltte oofsfhmmaalalkkihinnaggveccooannnttyrriibbriuugtthiiootnntsso iinnmaaannkyye prior Plan Year. contributions in prior Plan Year. any Plan Year by virtue of NPNlooattnwwibittyhhssmttaaankndidiinnngggcaaonnnytyrttihhbiinuntggiottonostthfheoerccaoonnnyttrraapxreyyrioiindn ttahhfiitsserPPltlaahenn,,ennnood EoEfmmptplhleooyy2ee0ee08sshhaPallllalnbbeeYeecallriiggi(ibtbhlleee tPtoolappnaarrYtteiiccaiirppaatttheeatiinnenttdhhsee PonlanDebcyemmbaekri3n1g,c2o0n0t8r)ib.utions for any period after the end of the 2008 Plan Year (the Plan Year that ends on December 31, 2008). 2E2.m22p.loyee wEEhlloeeccmttiieoonnsttotoheCCoeonlnitgrtirbiiibbluiuttytee..reqIIunnioorrerddmeeerrntttsoo ommfaaSkkeeectcciooonnnttrr2ii.bb1uuttmiiuoosnntss euunnnrddoelelrr vtthiheae tPPhlleaannPlffaoonrr'saannIyyntPPellmaaennt YYsieetaea.rr,, Taaonn bErbeeemdueepcffltffoeeiyccoettniievvoewef,,hhaaoinnsmEoEermmepthspleolrtohyyeeEeleeei'lg'ssiigbieelbnenirrlCiootollyllmmmrpeeeeqnnntutsiarmmetumiusostetnneetasllseeocctnfteSttehhedeecetdiaaommntooou2um.n1nattkmooeuffsshhtuiiescsnhoororcrollhhnetverrriiabcctuoohtnneittorrPniisbbla,uutntsii'socolnnIessnc,,tteaartuunhtteehhtootsrriiiimtzzeeee. attThnhodee rfwfeoohdrrimumcochtofisofpunpcaahoyyfmcmeohennistntrtoioobruffhtsseiuournccEshhlaiccgrooeinnbtttlrreoiibbbCuuetotiitmoornnepssaetneaasdnnaddtaisotthnhbeeeaicesnaagrnmneiiiennndvggeesssdtttehthdoee,rrmeeaoonanndk,,epssrppsoeuevccciihidffyeycostthunhceterhiiibnonuvtvtheeieossrtntmmsp,eeenrnsttteilnffeueucnnnttddthiooenrrftofifrmuumnneaddtssiaoniinndn wPaasslhattinhcheheYePsPaullaracnnhwiAAcldoldmnmibtnreiiinbseiutsstttriraoaabtntloosirrsahmmreeaadyytobyrrbeeeqqtuhuiteirrreeeP.a.ltaendTThhAaeedsmbttiiienmiminesegtppreiaenrtrviiooeordsd,teddbduuu,trriianinnnggdnwwpohrhioeiccvvhheidneeetnnswrruioolcllllhlmmaoeenntnyhttessernwwprieoilllrlltlibbmneeeennaattcccibcneeefppotatreecmddceaceptaaitoccenhhd Paafflttaeenrr ttYhheeeabbxeewggiiinnllnniibnneggoeofsftattbhhleeisPPhlleaadnn bYYyeeaatrxhettooPwwlahhniiccAhhdssmuuccinhhiseetnnrrarootolllrlm,mebennuttt relates in no event relates. will any enrollment be accepted 220.33t.he Plan DDmuaurdraaettiiioonnnaocofcfoCCrodonantntrcrieibbwuuitttiiohonnthEEellerecectqtiiuooinnr.e.meEEnaatccshhoceflligSgieibcbltleieoEnEmm2p.pl2olosyhyeaeelel''sseexelpleeiccrtetiiooanns ottofo mtmhaaekkeeenccdoonontftrriitbbhuuettiiPoolnnasns. tYePolaeatarnhreYttoePoalwawrnhhiiimfccshhaudciietth rieEnelllaieagtsceic,sbo,lreaadllCattnohhcmooepuueggwnhhsitaiihtttstsihhhoaeanlllrlweaaqappusppilrlcyeyamrttoeoendaatsnndyyuorfEEilSlniigeggciisbtbiulloecenhCC2oPo.lm2mapnsephneYasnelaaslrate.tixioopnnPiraerpptaaaiiiscddiopaaaffntttthesrre ttmehhaneeydeenonnodfdttohocfefhassPnuulgcacehnh Pooenrrldaerrnede.vYvooekkaeer their contribution lctions for a Plan Year after if such Eligible Compensation was earned during their contribution elections for a Plan Year after sttuhhceeheePnnrlraoonllllmYmeeenantrt. ppePerraiixootddiciffpooarrntttshheemPPallyaannnoYYteecaahrranhhgaaess ended. 5-5- 22775500..00115577 2a24.m4.o.unts credDDiutuerrdaatttioioohnnisoooffrPPhaaerrrttiiAccciicppoaauttiniootnsn..h..avAAe bPPeaarertntiiccdiiippsatanrnittb''sustppedaa,rrtioiccriippuanatttiiiloonnthiienn PttahhreetiPPclilaapnanntss'hhsaalldlleccaotohnn,ttiiinfnuuceearuulnncttirill aallll amounts credited to his or her Accounts have been distributed, or until the Participant's death, if earlier. AARRTTIICCLLEE 33 CCOONNTTRRIIBBUUTTIIOONNSS 3p3e.11r.cent (10PP%aa)rrtt(iibccuiiptpaaonnntltyCCoaonntwtrhrioiblbueuttipiooenrnscse.-ntAAagePP)aaorrttfiichciipipasazniottrmmahaeyyr ccEoolnintgtririibbbluuetteCeo((mddpeefefeenrrs))afftrriooommn oocnnaeemppeeedrrccdeeunnrtti(n(1g1%%t))het0oPltteaennn (pYYdeeeerafacrerern)tttoos(hw1wa0hlhl%iiccb)hhe(bssduuuecctdhhuocntPPleyamdr-tatifiwccriiohppmaoanlnectt'asspcehcerllceepeccanttyiitomaongneenrr)teelolaoatffteehsss.i.sucohTTrhhPheaeerrtppiEeecrirlcipcgaeeinnnbtttl'aaesggeeCElottihmhgeeipbelPPenaasrrCattoiitcicmoiippnpeaannnetmst a~cetnllieeedocctntdssucrttaoionmgcecoodtnnhttedrruiiPbrbiuluanttnege such Plan Year, (defer) shall be such Plazi Year, wwdhehedetuthhceeterrdppaafiirdodmdduureriianncggh ooprraffyoomlllloeonwwtiinnoggf sssuuuccchhh Plan Year Participant's Plazi Year. Eligible Compensation em~ned during NcNooontttwwriiitbthhuststitaaonnnsddiintnoggthaainnsyyPttlhhaiinnnggfot(ro0anttyhheepeccrooinnotdtrraaarrtyyeriinnthetthheiissndoPPlflaatnn,h, enno2o00PP8aarrtPtiilccaiinppaaYnnettarsshh(aatllhlle bbPeelanppeeYrremmaiitrtttetehddatttoeondmmsaakoknee cDoencterimbbuetiron31s,to200th8)is. Plan for any period after the end of the 2008 Plan Year (the Plan Year that ends on December 31, 2008). 3V32.I2.P., in DeceCCmoobmmeprpaoannfyycaM McahattccPhhliiannnggYCCeoaonrnttrtrihibebuuCttioioomnnpssan. yOOnsnlhlyayllffoomrrattkhheoosseae PmPaaarrtttciichciiippnaagnnttcssoneetnnrrrioobllulleteiddoniinncttqhhueealPPootrrottffoofillfiiotoeeIInII VppeeIrrPcc,eennitnt (15%)ofthe lesserof December of each Plan (15%) of the lesser of: Year the Company shall make a matching contribution equal to fifteen ((aa)) ceaacchh PPaarrttiicciippaanntt''ss ccoonnttrriibbuuttiioonnss mmaaddee ppuurrssuuaanntt ttoo SSeeccttiioonn 33..11 ffoorr ssuucchh PPllaann YYeeaarr,, oorr ((b6)) ssiixx ppeerrccfeeonnrtt s((u66c%%h)) PoolffantthheeYeaaammroouu(ntntatkibbnyyg wwinhhtiiocchhacsscuuoccuhhnt PPaasrruttciihcciippaCanonmtt'sspenEEsllaiiggtiiibbollene CCpoaomimpdepnetsnhasratotiuioognnh NNbfoeoorvvceeasmmumbcbeehedrr P3a3n00ladnooffpassYiuuedccahhrduPPrll(iaatannnkgYiYneteghaaerr iabananntolddanaacanneceecssoottufiimnmstaauttceeshuoocfPfhlssauunCcchhoYmeCCaopormem)pnepsenaextsnciaoseatnetidioospnnatieehdxxeppeeItchcntrtdeeoedduxgetthodo bCCoeommepaeprnensneasdattiiaoonnnd LLpiimamiiditt for such Plan Year during the balance for such Plan Year. of such Plan Year) exceeds the Indexed NcNooontttwwriiitbthhuststitaaonnnsddiintnoggthaainnsyytPthhliainnnggfottroo antthyhee pcecoronintotrdraararyyferiinnthttehhiiessndPPlloaafnn,,thttehhee20CC08oommPplpaaannnyyYessahhraall(llthnneootPtlammnaakYkeeearaanntyyhatmmaeatntcdchshiinonngg cDoencterimbbuetiron31s,to200th8)is. Plan for any period after the end of the 2008 Plan Year (the Plan Year that ends on December 31, 2008). AARRTTIICCLLEE 44 AACCCCOOUUNNTTSS 44Pa.11r.ticipant whCCorreecaalttciicootnns(oo0ffmAAaccckcoeouuncnottnsst.r._ibTuTthhieeonPPsllaahnneressuhhanaldllelree.ssttaabbEllfiifssehhctaaivsseeeppJaaarrnaauttaeeryAAccc1,coou2un0n0tt5,oorraAAcsceccpooauurnantttsse fAfoocrrcoceuaaccnhht sPsPhlhaaaarnllt.llicbbiTepehammneataiainwmntothaauoiinnnteeeolddefcfftoosarr PtceoaaarcctmhhicaPPikapaerartntiictcco'iisnpptcaarnonitnbttuffrtooiirrobunectsaaiccohhhnesPPrehlluaaennnrdeYYueenre.adarerrEtthhsfaafhtetacssltuuibvcceehhcrPPJeaaardnrtituiitcaceiripydpaann1tt, mm2a0ak0ke5es,s accoonsnettrpriiabbruuattteiioonAnsscttcoooutthhneet Plan. The amount of a Participant's contributions hereunder shall be credited 5-6- 22775500..00115588 wttoohisscuuhcchh PPta~hrexttiicciCippoaamnntpt'a'ssnAAyccccoopuuannitdt aatttthhheee ssaEaxlmniegeitbtilimemee aaCssomoorpreaansssssaootooinnonaass rrfeeraaossmoonnaabwblhlyyicpphoossssisibbullceehffoolcllolonowtwriininbgguttthihoeendsdaatteewsseoronen dwdteoerfhfeeierccrrhereeiddv..ethseCCuocommhCppocaaomnnnytpyraimmnbayuatttccihhopiniansnigdgpuccrootsnhnutetarrinibbtuEutttloiiiogoSnniebsscltessihhoaanllCll3obb.m2ee pdcceurrrneedidsinaittgteeioddDntteoo fttchrhoeeemAAmcocccbfwoocuuheannictcrthhss ooPfflsautthnchohoYsseeeaPrcPa.orantrittircciibippuaatninottsnsseelliiggwiibbelrleee to receive such contributions pursuant to Section 5.2 during December of each Plan Year. c44a.22m.ings or losEEseaasrrnnbiiannsggessd ooonnn AAthcceccoopuuenrntftssor..manEEcaaecchhofPPatarhrtetiicciiinppvaanentst't'ssmeAAnctcccofouuunnndttsss sssehhlaaellcltebbdee bccyrreesddiuittceehdd Pwwairitttihhciiipnanvnvtee.ssttmmTeehnntet eiianvanvarvnieelissnattmbgmlseeenno1tt0r fftluohunesnsddpessasratabivvacaasiiiepllaadanbbtlloseenitnttoohtehtthehpeeeVIrPPfPoaa,rrrtmteiixccaciinplpcauaenndtitsosnfgiinttnhheetthh3iiinssMvPePSlslattamnoncekssnhhtFaaluflllunndbbdeeasnttdshheeetlehcsesataVexImdnPee'sbayabssrsottuhkhceeehriiPannagvvxeeetssiwcttmiimpneeandnntott.wff,uuTnnbhdduetss sasDhhveaafalleilllraraabelllsdseootCoiionntmchcplleueudpndeeasxaaattiicffioupunnandndPtlsbbanaai.nsseetddhPeaooVrnntIiPttchhi,eepeaxrnrectetstluuurrdmnnianyoogfftahttlhehleeo3cMaGGtrerooSwwttohttechhkaFFFmaauoccunttndootrrasnaadsscrtddehedeefifiitVnenedeIdPdt'soffoobtrrhroeppikuurerrrppAaoocgssceeeosswuniootnffsdotthahweem,o33bnMuMgt sDsiuuneccvfhheesrtirinemnvdevneetssCttmocmmaeenmnptitennffgususanntddioossrniilnnoPslwwsahenhso.olloeenPappsxeeutrriccccheeipnnVattanaIggtPseessfmuooanffydsffrarolfolmoomrcapootunnereeptohppseeeerrsccaeexonnnftot utt{noh0itssoonncPeelreadhhniuutsnnehdddarlreeltoddeqtpphueeerarcilcreentnAth.tec. caoTcTuthhnueeatslddareeameetmmeoeneodgdf rirmneeatvtuneurasnmgtmeoomnneenssntuuteccahhfrenffsuiusn,nngddtsssruoiisnntrettelhhoeefsesVVeesIsI,PPoennnceeottsruodocfkfheaacnnVypyIiPfnfeegefeussfneooedrrsseeafxxnoppdreeonnptssuheeressproccashhdeaamsrriggnoeeifaasbbtthlrleeiastttihPhveelerareeenttxoops,,ehniiansnleclcslleu.uqdduiinnaggl tbbhuuett nnaocotttullaiilmmiriatteetedd ottoof ma_nagement fees, trustee fees, recordkeeping fees and other administrative expenses. 44a3.m3,o. ng whichCCthhhaeaninrggeAescscoiinnunIItnnvvbeealsstatmnmceeennsttoFFruufnnutddurAAellclloooncctaarttiiiboounntssio.nsPPaaarrrettiiaccliiplpoaacnnatttssedmmaaatyyacncyhhaatnniggmeee, tthsheuebjiinencvvteesstttommseeunnctthffuruunnlddesss aaaIssmntmmoeanmaegyytbwbseiehtieeecsshottratahbbbelyilisrsihpAesedhcabeckbyodiyungntththweebiatPPlhllaaanannrceeAAspddrmomiernsiifneusitntsurttraraaetttoocrior.ov.fnetArAtilhbllleuootPccilaoaattnniiso'osnnarrcceehhcaaaolnnrlgogdekceesasetpemmedaray.yat only be made using any time, subject to only be made using ttshhueechPPlrlauannle''sss Internet site or by speaking with a representative of the Plan's recordkeeper. 44V4.a4.l.uation Date.VVaalluAuasattiiooofnncaoocffhAAcVccacloouuuanntttisson.. DTaTthhee,e AAtchccecoovuuannlttusseooofff aaallll PPPaarartrtitiiccciiipppaaannntt'tsss ssAhhcaaclllolubbneet rrseehvvaaalllluueecdodnsaaissstooffofceaatcchhhe cVbboaaanllltaaurnnaicctbeeiuotooniffoDnsssuuacctmehh.aAAdcceAccosoauunonndtft ceaarassecdoohifftVttehhdaeeltuiihmametmrimoeclndeoidaDisatiateentlelcyy,e pptthrrheeeeccveeidadmilimunneeggdiVoVaaftalelauulaayPttiiaooprnnrtiecDDciaepatdateie,nn,tg'isinnVccAarrelceauacsasoeteuddinotbbnyysDhttahahtleele,aacmmoiononuscunirnstettaoosoefffdaatnnhoyyer dcdieonecvncrertreesiaatbssmueeetdndiot(n(aasfssumntthdhaeesdeccsaacsasleenedcmmtaecadyryedbbbiyetee))dtbbhytyehettPhrheaeertotaaimmcsioiopnuaucnnnettt toohsfiefnddcieeemeemmtmheeeedddiaiiitnmnemvvleyeedssitptmamrteeeecnnlettydiecnaapgrmrnieiVcnneggadslsiunaoogtrriollVnooasslsDsueeaasstteicc,orreeniddniicDttreaeedtdaes,(teodatthnohdeer didVneaevclcerureseataatmssieeoeddnntDbbayytfuett.nhhdees aammseoolueuncntttedooffbaaynnyythddeiissttPrriiabbruutittciioiopnnassnmtmaasddineeceffrrootmhme ssuuimcchhmAAecdccicaootueunlnytt sspiirnneccceeedtthihneegiimmVmmaedleuidaaitatiteoelnlyy Dpprraeetcece,eddiainnnggd. Valuation Date. 44A5.c5.c.ounts VVeessttiinngg ooff AAccccoouunntsts.. AA PPaarrttiicciippaanntt sshhaalll aallwwaayyss bbee 110000%% vveesstteedd iinn tthhee vvaalluuee ooff hhiiss oorr hheerr Accounts. 4Y1e6.6a..r, the PlaSSnttaashtteaelmmleednnetltioovfefrAAtcoccccooauucnhntt.P.artAAisscisspooanootnnaaassstaaaddtmemimnieinnsitsttrorafattihivvieselloyyrffheeeaarssiiAbbcllceeoffuoonlltllosowwiiinnntgghetthhPeelaeen.nnddooff ceaacchh PPllaann Year, the Plan shall deliver to each Participant a statement of his or her Accounts in the Plan. AARRTTIICCLLEE 5 DDIISSTTRRIIBBUUTTIIOONN OOFF AACCCCOOUUNNTTSS 55Pa.11r.ticipant's AcGGceoenunenertrasall hRReuruleleeussn.de. r EEsxxhcacelelppttbaeass mpparrdooveviiddpeerddioriinntoSSeecsctutiicoohnnssPa55r..t55,i,ci88p..a22nt'aasnnddde99.a.1t1.h, nnooor ddSiiesspttarriribabututtiiiooonnnofofrfomaa Service with Participant's Service with ttAhheeccCCoooummnptapsnaynh.ye.rAeAlunllldddiesirsttrsriihbbauultltiioobnness moofafaadePPaaprrtrtiiiocciirppaatnontt''sssuAAcchcccoPouuannrtttisscissphhaaalnllltb'sbeedmmeaaadtdhee oiinnr Separation from 7-7- 22775500..00115599 cdcaiassshth.r.ibuW Wthihoenennshttahhleel PPblleaannchmmaaar_kgkeeesds aparddoiissrttarrtiiabbuuattgiiaooinnnsootffcllaeecssssh ttohhfaannthttehheeineevnnettsiirrteemebbnaatllaafnnuccneedosoff(0aawPPhaairxcttihicciitpphaaennttA''ssccAAocuccncotounuitns,t,thtthehnee allocated. distribution allocated. shall be charged pro rata against each of the investment funds to which the Account is then 55S2e.2.r.vice withDDiitsshtterriibCbuouttmiipoonannFFyoollfllooorwwiiannnggy SSreeeppaaasroranattiioootnnhefrfrrotomhmanSSeedrrevavitichcee..or IIRffaeatiPPraaerrmtteiiccniitpp,aanntttheiinneccnuutrrissreaa bSSeaeplpaaarnracatetiiooonnf ffsrrouocmmh JPPSuaaelrxrytvtiiiccciiienppaatwnnhtit'et'sshPAAltchaccencoouCuYnneottamssrpssafhhnaoalylllllofbbwoeeirnppgaaaniiydtdhettroeoaPttslhhoaeenn PPaoYaretrthtaiierccriippitaahnnnattnwhiinnidceaahatsshiisnnuoggclrlheeRllPueaumtrmitrppeicmisspueuamnmntt,'ddsitihsstetSrrciipbebanuurtttiaiirotoeninobniinanlaftthnrheeocmemmoooSnfentrtshhvuiccooheff oJcucluyrriend.the Plan Year following the Plan Year in which such Participant's Separation from Service occurred. 55C.o33m. pany, theDDPiiassrtttrriciiibbpuuantttii'oosnn FFAocolclllooouwwniitnngg(i)RRefeottriirraelelmmePelnnattn . YeI.a_f1frsaa PPpraairxottriicctiioppaa2nnt0t0RR5eetstiihrraeelssl ffbrreoompmaieedmmpcploloomyymmmeenencntit nwwgiittahht ttthhheee tCDtiimeomcmeeepmaaabnnneddyr,i`i3ntnh1esootnnPeeoafroottiffhceittphhPaeelnatffn'osollYlAloeocwawcriionniuggnntwmmhe(eiit)tchhfhoooddsrssuacloohlffPPpplaaraantyyimmcYeieepnanatxnttssspReeerllteieioccrrtteeestdd,o b2abyy0n0ds5s(uuiccis)hhhafloPPlraabrretetaiicccpiihappiaaPdnnlttacnonnmooYemallaearttneecarrifnettghrhaaa2nn0t0ttt4hhh,eee sDsPhhaaeralctllilecmbbipeebaenpprtaai3idda1tsccttoohommefmmtetheinenmcecPiilnnasggnucaYahttettPahhaxeertintiticimwimpeehainaactnnhddesluiiennccthooendnPeeatxoootfifcmtitaphhaekenefftooRcllloleonotwtiwrriieinnsbg,gutamminoedenttshh(iooitd)dossfotoohrfefeppaPaaclyyhammnPeelnfantontr ssYseeuelleceacchrtteaePddflteabbrnyy2sYs0uue0cca4hhr, pursuant to Paxticipant pursuant to SSaeteccttthiieoonnti22m..22:e: such Participant elected to make contributions to the Plan for such Plan Year ((aa)) AA ssiinnggllee lluummpp ssuumn ddiissttrirbiubtuiotni;oono;rr (b)) TTeenn ((1100)) oorr payment ffbeoewwieenrrg daeanntnneuumaaillnediinnssbttyaalllmlmumleetnntitsps,l, yiwnwgiittthhhe ttbhhaeelanaacmmeooiuunnnttthe ooPffartceicaaiccphhant'iinsnssAttacallcllmomueennnttt poqonnauyattmlhheeetnoppttaabhyyeemmireneengnmttadieddnataiettnreemgbbinynyuemdaabbfferryraaoccmfttiisouocnlnthipehhladayvvuiilinnnegggdthaainensntbuuaammllelaermnraeactntetoorripnaooytffmheeoonnntPeesa.xaatnniddcipaaanddtee'snnooAmmicincnaoalutoonrrt equal to the remaining number of scheduled installment payments. sAAelllllecllutuemmdppbyssuutmhme aaPnnarddtiiicnnisspttaaanlltllm;mpeernnottvippdaaeyyd.mmeenhnottwssevssehhraal,lll tbbheeatmmnaaoddpeeayiinnmettnhhteesmmsoohnantlthhobeoffmJJauudllyey biinenftothhreee tPPhlleaannmoYYneetaahrxooofrrJuYYleyeaarrissn tsCthehoeelmePPcpltlaeaandnnybY,YyeeaaatrhxnedffooPlplalrlorootwiwvciiiinnpdggeadntthth;efeupPPrrltolahavennirdYYetedeha,aartrhoiinnnwowwehvmhieeicrct,hhhthossaudutcchhnoofPPapaprratatyiiyccmmiipepeaannnntttst iisannhnccaduulrlrsscboeaammSSmeeeappdnaaercxaeabttmeiioefoonnnrteffrrotdohmametemSSeeosrrncvvltiiheccceeotewwfdiJittuhhblyytthhienea PCYPaeaorxamttriipcciiianppnaawynnh,tticsashhhnaadlslllupcrrreheoqqvPuuaiiidrrrteeeidctthihfpeeuanrPPttllhaaRennerlttiotohreammstaakkneeo aamnnyyethppoaaydymmeoenfnttpmmaoyormreeentththaannanttdeennc((o11m00))myyeeenaacrressmaaeffnttetrr the end of the date selected the end of the bPPyllaanna Year in which such Paxticipant Retires. 5h54a.4.s. begun, tDDhieisstetrrniitbbruuettiibooannlaFFnocolelollofowwsiiunncgghDDPeeaaratttihhc..ipaIInftfa'asPPAaarcrttciioccuiippnaatnnttshddaiileclssbbbeeefpfooarireed dtdoiisstttrhrieibbuPuttaiirootnnicooiffpahhniitsssoorBrehhneeerrfiAAcciccacrooyuunnitnt haPaaassrisitnnbiggcelligeepuallnnuut,mmtdhppieessd.ueunmmtirIddefiissabttrarPiilbaabrunutttciiieoconinopaifinnnstutthhcdeehiemmPsoaonarnfttttihhceoripfodafJinuJstutl'rslyyiAbiiunncticttoohhnueenoPPtfllsaahhnniasYYlleoebaraerrhpffeoarolilldAlocowtwociiontnuhggnettthPheeaharPPtsillcaabinnpeagYYnueentaa',sxr tBiinhneenwwehrhfieiicmccahhiairssnyuuiccnihhng bPbmaaeallxtaathninocccideepoaoofnfftphhdaiiissyemdooe.rrnhhtIeefrrchaAAocPcscceaooxnuutinbncytitp(t(aiihnffetaaPnndayyire)t)sicssihhapafaaltlnleltr.bbdeeispptaariiidbdutttooiottnhheeoPPfaahrxtitsiiccoiippraanhntet''rss ABBecencneoefufiinccitiaahrryaysiinbn eaagccuccnoo,rrddthaanneccreeemwwiiattihhnittnhhgee method of payment chosen by the Participant. 5s. Unforesceable Financial Emergency Distribution Upon finding that a Participant has S5sPuua.5frff.tfeeicrreiepddanaatnntoUUnwUnfifntoohrfrdoeersrsaceeweseseaabebalalneebaleFFmiionnFuaainnnntccaiinfaalrcloiaEmElmmheEiresmgrgeoenerrcnhgyce.eyrn, ActtychhceeDouCCinsoottmrmimsbmuiufitfttiitecoeeienenmmt.aayoU,y,paloiilnnneviiifttiassntedssiootnllhgeee edtdhimisasecctrrrgeeatetiinPoocnan,yr,tipcpieeprrammniittt httahhsee Participant to withdraw an amount from his or her Account sufficient to alleviate the emergency. 5-8- 22775500..00116600 5p56.a6.y.ment is m`WaWdiiett,hhhhtoohlleddiiPnnlgga;;n PPsahayaylrrloollwllitTThaahxxoeelssd..frTTooom ttahhneeyeexxpttaeeynnmtterrneetqquumiirraeedddebbyyhettrhheeeunlldaaewwrss aiinnnyeefftffaeesccettsaatrtettqhhueeirtteiimdmeetoaannbyye wpwiaitythhmhheeelnlddt ffiosorrfmefedaeddreear,la,lt,hstsetaatPteelaoonrr sllohoccaaallll government purposes. withhold from any payment government purposes. made hereunder any taxes required to be 5t57i.7.m.e periodOOnneese-t-TaTbiilmmiseeheOOdpppbpoyortrttuhuneniitPtyylattnoo ARRdeemvviinissieestPPraaaytyommre,enntPtaEErltlieecccittpiiaoonnntsss.. wPPhrriiooorrh1tao0vttehheepreeennvddiooouffsl22y0000e88leaacnntddeddduu(rr0iinnmggattkhheee ctcCioomonnmtetrpriiapbbneuuyrttiiiooomdnnassyettsootratetbhvhleieissPehPlleatadhnneibffroyorreltoohencenetiPooorlnrasnmmcoooArrneedcmePPlmlianainninsgtYYreaetathaorerrss,tssiPiimnaneccrteeaicn22idp00a00mn44etstaahnnwodddhwowohfhpohoaaaavyrreieenpssgitrilelltlvhieaaoiccurttiisvAvlyececeeoemmulepnpcltltooseyydefeeoetrsos aoomnffyattkhoheere Caalllol mPPllpaaannnYYyeemaarrassyssriinenvcceeise2200t00h44eissruuebbljjeeeccctttiottnoostthhceeonffocolellrlonowiwniingnggthccoeonndtdiimtitiieoonnassn::d method of paying their Accounts for any or ((a@)) ecaacchh rreevvtiiessemeddsofcellbeeocctttiihoonnthemmumusesttthobbdee ofccoopnnassyiismstteeennnttt awwnidittthhhettchheoemmrreeeqqnuuciierremememenenntttssdatooefffoSSreepcctatiyioomnnent55s..;33,, iinn terms of both the method of payment and the commencement date for payments; ((b6)) nnoo rreevviishseeaddve eeclloeeccmttmiioeonnncemmdaayyin 2rre0ess0uu8ll;tt aniinnd tthhee ddeeffeerrrraall ooff ppaayymmeennttss tthhaatt wwoouulldd ootthheerrwwiissee have commenced in 2008; and ((c)) nnoo rreevviissweedoduleeldleeccntotiitoononthmmearaywyisrerehessauulvltte ciinnomttmhheeenccceoodmmmmdeuenrniccneegmmseeunnctht yooeffarppaayymmeennttss dduurriinngg 22000088 tthhaatt would not otherwise have commenced during such year. AARRTTIICCLLEE 66 DDEESSIIGGNNAATTIIOONN OOFF BBEENNEEFFIICCIIAARRIIEESS 66.11. person, persoBBnesen,neefofiriccieinaatrriytyy,DDeaesssiiggBnenanaettfiiioocnnia.ryEEaaoccrhhBePPnaaerrfttiiiccciiippaaarnnitetssshh1a0allllwhhhaaovvmee ttphhaeeyrmriieggnhhttt aaottfaatnnhyye ttPiaimrmteeicttioopaddneetss'iisggnnAaacttceeouaannnyyt spsrhheeaarvlslolloknebb,deepomemrraascdodheneasn,iignnoerdtthheebenyteeitvvayee,nnnteatswooBffdeettnshhieeegfnicPPaiataarirrtotyiinccoiimppraaaBnndttee''snspreiddfoieecaratittahh.ro.iestAAhtenonyyPwarhddteoeismsciiiggpnpnaanaattyt'iimosonnedenmamttahao.ddfeethAuuennnyPddeaesrrruticttchhhieepdaePPnslltiaa'sgnnnAammtcaiacyoyonubboneert rrbreeeevvveooofcckfaaeettdciitooionnvremmcuuhunsatstintlgbbreeeedcmmebaiayvddeeaed niibnenywaatcchdcceeoosrPrilddgaaannnn.accteeiowwniitmthhatdthheee prrruuilloeerss established by the to the Participant's established by the PPdlleaaannthAA.ddmAminniinysitssrturaactthoorrd,,eaasinngddnawwitiilolllnnnoootrt be effective until received by the Plan. 6o62n.2.e. BeneficiBBaBBryEEN0NErEeFFcIeICCivIIeAAsRuRcYYhPPPaRRrtEEiDDciEEpaCCnEEt'AAsSSAEEcScSouPPnAAtRRaTTnIdICCaInIyPPAABeNNnTeT.f.iIciIfafaray PPsaahrrattliilcciipppraaenndtteddceeesasiisggennatathteeessPammrotorirceeipttahhnaatnn, totthhhneeee PPpBlolaearntnniesosfhhniacalildlalerdsdyiiissgttotnrraiirbtebeuucdtteeeivbttyehheestuddhceeehccPeePaaarasstreeitddciciBpiBpaeenanntncetff'fsioiccrAiiacacrarcycyo'hssunssbthheaaaarrrneesdtttoaoonttyhthheeBessetuunorretvvafiilivcviiipnanorggrytBBiseohennnaelefdlfieipcscriiieaagdrrniieaeectsseeadppsrreoofpoptorhorertatliiPlooonnsxaautttrieecvlliiyypv,,ainanatsgs, Beneficiaries. the portion designated Beneficiaxies. by the Participant for each beoxs to the total portion designated for all surviving 6d63e.3.s.ignation prAAevbbisoseeunsnlccyee oomffadEEfefffeewccitttiivhveeouDtDeesmsiaiggknniaanttgiioonna..neIIwff aadePPsa~irgxtntiaicctiiippoaannn,tt mmoraakkeiefss annlloo dpdeeesrsisiggonnnasattiidooennsioogrrnarrteeevvdookkseehssalal pdpmrreaeesndidngeeenccracetaaidssoeeentttehhrpeemreiPPvnaareirotdtiuiccisiinlppyaaannctmtc,,oattrdhhdeeeanPPwclleaaintnhwiosshhtuahatlllltmhddeiaissktPtirraniirbgbtuuittceaeiptthnaheenewtbbsaadlldaeaensnscicigeegonnoafatfttiithoohnene,ddineeoccereeffaaiessfceetddaluPlPnaadrpretetirirccsiitopphnaaesnntVt'I'dssPe.AsAiccgcIcnnooauuttnenhtdet iiennsvhettahnhletel dsmsueuacccnehhnasePPearardrdttieiPccateiirptprimaacnniitptnanehhtdaa'sssinnnooAacceeccffooffrueednccatttinivvceee tddwheeesistiihfggrnnstahtatetoiioofPnn~thxuuetnnicfddioeeplrralnotthtwh'seiendVgVeIIsPsPu,igr,vnittahvhtoeeirosPPn:llaainnn essfhhfaaellclltdduiinssttdrreiibrbuutttheee ttVhheeIPbb. aallIaannncctheeeooeffvttehhneet deceased Participant's Account to the first of the following survivors: 9. -9- 22775500..00116611 ((aa)) TThhee PPaarrttiicciippaaJnatt''ss ssppoouussee;; ((b6)) EEqquuaallllyy ttoo tthhee PPaarxttiicciippaanntt'ss cchhiillddrreenn;; ((c)) EEqquuaallllyy ttoo tthheePParatrtiicciippaanJta't'sspparaerennttss;; (@ (d) EEqquuaallllyy ttoo tthhee PPaarxttiicciippaanntt'ss bbrrootthheerrss aannddsissistteerrss;oorr ((e6)) TThhee eexxceacuuttoorr oorr aaddmmininisisttrraattoorr ooff tthhee PPaartriticcipiapnat'nst'sesetsatatt.e. 66140.4,t.he foregDDoeienaagtthhproooffviBBseeinonenfesifciocifiaartrhyyi.s.IAIrfftiaaclBBeeen6neefsfiuiccriviaairrvyyest(o0thwwehhPooamrmtippcaaipyyammnetenntbtussthhdeeirreeesuupnnrddieeorrr aatrroeecttooompbbleeemmtaeadddeeisppturuirrbssuuutaainnotnt tt1oo0 ttthhheee Beneficiaryof theBeneficiary's share: foregoing provisions of this Article 6 survives Beneficiary of the Beneficiary's share: the Paxticipant but dies prior to complete distribution ((a@)) uunnlleessss ttshhheeallPPadarirtsttiicrciiipbpuaatnnett thhheaassundooittshhteerrriwwbiuistseeed pssppoerectciiifofiineeddof isinnuchhhiissBenooerfrichhieearrry dsdeesssiihggannraaettiiooonn.,suctthhheeperPPsllaoannn oodshrersailpplgeenrdrassitosotennrdsis,b, iuniitnenacctllhudueeddsiiuningnggndaisstsuutirccoihhnbumBtBeaeedndneepefofiiwcrcitiiiataorhrnyy't'osshfe esstPsutalcatahtene,,BperaainssoerfssiuutcccoiahhsryuBBc'sehennseheBfefaiinrcceeiifaatirrocyyisaussrchhyah'alslllpedhheraasaovvteneh d(a(wnweyhshiiigtccnihhmaetdd)eee;dssoiiigrgnnnaaattiiodonensissghhanalallltibboeen ssmuubabjdjceeecttwttioothcchhthaaennggPeelaoonrr rrpeervviooorccaatttoiioosnnucbbhyy such Beneficiary at Beneficiary's death such Beneficiary at any time); or ((b6)) iiff tthhee PpPaoarrwtteiiccriipptaaonntdt''esssigddneeasstiieggnnaaattisioounnccesssppseoecrciiffBiieeenssefitthchaiatatryssuuocchh ifBBseeunnecefhfiicBcieiaanrreyyficddiaooreeyss isnnoogttranhhtaaevvdee sutthchehe pppdeoooawwwteheer,rr ttbbohuuettdPeflfsaaaiiingllssnsahtttaooellddadeeissssiuitggcrnnciaaebttuseetseoaarthBsseuueccuncnceedefississcstooiarrrirybBBueteonenredefifipficocisriauatrrciyyhonpBporrfeiionosrreufcit(och0iaBssreuuynccchhifsiBBcgeirenaanernefytif'eicsdciiasasrhruyayc'r'hsse to such Beneficiary s estate. death, the Plan shall distribute to such Beneficiary's estate. the undistributed portion of such Beneficiary's share 6e65v.5.e.nt a BenefBBiecenineaerfyfii,cciiaa0rryywhDDoiismscclplaaaiiymmmeeernr..tsNNhooettrwweiuittnhhdssettraannwddoiinunglgdtthhoeethffeoorrrweeiggsooeiinnbgge ppmrraoovvdii,ssiiodoninsssocolfaftihtmhisissalAAlrrottriicalcenly6e6,,poiinnrtttihhoeen. oseofuvfcetthnhhtaatptaaBByBemeneenennefetfifiscicciiiasaarhrryayy'l',lsstopiinanwttseesrhreeoossmtt tiinphneassyuupmccehhresnppotsanayyhmomeerrenenptuetssnr,,dsoessnruusccwhhsopddueiilcsdsiccfloliaateihimdemerebwddy ippsteoohrrebttiiePooannmrtaooidffceissp,uuadccnihthscB1Bl0eaenintemfaeiskfceiicaalisrlauyro'cyrh'sadniiinynsttceeplrroeearssitttmioeiidnnn disinniuttsceecrhrelesaspti.ta.myemIdInnepnttohthrseetieesohvvneaenlonltft pttshahuseecshPPtaaBorrettnitiehccfiiepipcaapinneattrrsddyoiindd nnioonorttteprsseeppsreetsccoiiinffnysysausapcppheeecrprissfaoioyennmdeoonbrrtyppseethrsrshseaoolnnPlssaprt(tao0iscsttiapatkkaoeenttddhiietsoscpcletlaaraiksimeomeendsduoricinnhptteeedrrreeissssotctsnsl,sa, issmwuuheccohdh. wdwthiooseuculVlladdIiPmbbeeerdeeefnnpettroiietrllnteeicoddendtthhoaeefbrroeesvtutoeoc,hppwuuBrhrsesiuuncaaehnnfetitvcetitoarortytihsh'seeapiPPnpaatlrerittrciieaccsbiitplpaeiannnptts'u'susrcsddhueeasspniitaggynntmaoattetiionhoentnsfoosorrhrattehlhgleeopiddaneesgsssiipggtronnoaavtthtiiiseooinnponemmsroasafoddnteehoiwwrisitpthhAerrrtrseiaoscsnplpseeescw6tt,httiooof stshuuecchhVBBIPeennereeffifieccriieaanrrycyehhdaadadbddoiiveeedd, immediate preceding the deathof the Participant. whichever is applicable pursuant to the foregoing provisions immediately preceding the death of the Participant. of this Article 6, if AARRTTIICCLLEE 77 UUNNFFUUNNDDEEDD PPLLAANN 77Pa.11rt.icipants. NNAoosTTsrruuucshst,t..theTThhbieissnePPfillatasnn piiassyiiannbttleeennddueendddet1or0 tbbheeisaaPnnla""nuunnwilffuubnnddeeedd"p"aippdllaasnnolooelffyddeefffreeorrmrreetddheccoogemmnppeerenanslsaattiioonn ffoorr tthhee Participants. As such, the benefits payable under this Plan will be paid solely from the general -10- -10- 22775500..00116622 aaCssossmeetptssaoonffytthhseehaCClolommpnoaptnaynh.ya.veTThhaeenyCCooobmmlpipagaanntyyioddnooctesos nnseoottt aiinsnittedenenddfttuoondccsrreeaoatrteemaaannkyyettrruiusnstvt eiinsntccmooennnntnesecctitinioonnthwweiitithhnvttehhsiitssmPPellnaatnn..fuTTnhhdees `rCreaenoffdemerrurprneeasddneytctoousriihennadlAAlprrtrntiooiccmtllieehsae44.v.teoTTpahhaneyey CCmooobonlmmiegppyaaatninionyyn'stshtoeoobbflsulieitggturaaeatt.isioiodnness fuuunnndddeesrr otthhriissmaPP_llkaaenn shall be merely that of an unfunded investments in the investment funds shall be merely that of an unfunded and unsecured promise to pay money in the future. 7a7n2.2y.. benefit UUpnansysemececunurtreseddfGGreoemnneetrhraialsl CCPrlreaednidteiotxroc.er.ptNNaoos PpPararorttviiiccdiipepdaanntitnoorrArBBteiencnelefefisicci5iaarrayyndsshha6a.llll hhUaantvvieel aasnnuyychrriiggphhattyt(mo0enrreteccseeiiavvreee raraenegccyeeeniibvevereeanddle, fttuihhtneesperraciiygugmhhrtteessdonotfcsfrceeafdarcicohthmorPPaotahfrxttitsihicceiPipplCaaanonnttmeapaxnnacddneyBpBetenneaefsfiicpciriaoarrvyyiduuenndddeeinrr ttAhhiirsstiPcPllleaasnn ss5hhaaallnlldbbee6.nnooUggrnreetiaaltteesrruttchhhaannpatthyheemrreiinggthhsttssaooxeff a general unsecured creditor of the Company. AARRTTIICCLLEE 8 AAMMEENNDDM MEENNTT AANNDD TTEERRMMIINNAATTIIOONN OOFF TTHHEE PPLLAANN 8h81o.1.w.ever, tRRhiaitgghhtntottooaAAmmm eenednnmdde..nt33MMormmmaaoyydiaafttiaacnnaytyittoiinmmeeshaaammlleennadddovoerrrmsmoeldoyidfifyayffttehhceet PPtllhaaenn iirnnigwwhhthosolleoeoforraniiynnppaParaxtrt;;tippcrrioopvvainiddteeddo.r, hBBPaeoernwtneiefecfiviicpecairinaa,trr,yythaaaBtcceqqnnueuofiiirrceeaiddamruuye,nnndddeemerrmettpnhhlteeooyttereerrrmmmssoordooifffoitctthhhaeeetrioPPnlplaaennrshsaaoassnll iinsanhdacevlffleffreesccnettoltypprriibaooefrrfettacoot rssteuuhqcceuhhisriaiagtcctehtiitoosn(n..osfTTuachhnheey ccaoPomnnaesxsneetnidnctmtipeooanfnfttaannooyyrr modificationofthe Plan Participant, Beneficiary, modification of the Plan. employer or other person shall not be a requisite to such amendment or 8t82e.2.r.minate the`TTPeelrrammniinnaaatttiiaoonnny ..tiW Wmhehiilalenediitt feeoxxrppeaecnctytss rtteooasccooonn.nttiinnuUueepotthnhiisstPePrllamainnnaiintniddoeefnfiinnoiiftteelltyyh,,e 33PMMlanrr,eessaeenrrvdveesstotthhteeherriigegxhhtttettnoot tppseheerarrmlmmliiintittatmeetmeddedbbtiyhyaetsseeePclcltytaiinoodnnias44tt00ra99inbAAyuotoeftifmtitnhheeecaaCCsnohoddde1ef,0,oaratllhllaeenelrlyeeeccsrttpeiieoaocsnntossitnvto.eo ccPUoaonrnptttoirrcinibibpuutatetneertmst0oianttnahhdteeioPBPnellanaonenffsishhctahialealllribbPeeelsarrntee,hvveoaonkckndeetdditroaaenntddrheettmhhaeeeixPnPtilleaannnngt balances of the Accounts. shall immediately distribute balances of the Accounts. in cash to the respective Participants and Beneficiaries the entire remaining AARRTTIICCLLEE 99, CCHHAANNGGEE IINN CCOONNTTRROOLL 91 9m.e1a. nings indDDiecefafitinneidittbiioeonlnossw., uFFnoolrresppsuurtrphpeoossceeossntooeffxttthhciilsseaAArrlrtytiiccillneedi99c,,attthehese offotollhlloeowrwisinn:gg wwoorrddss aanndd pphhrraasseess sshhaallll hhaavsee tthhee meanings indicated below, unless the context cleaxly indicates otherwise: ((a@)) ""PPeerrssoonn""sectsshihaoalnllls 1h3h(aadvv)eeanttdhhee14(mmd)eeoaafnntiinhnegg Acaatssssoocciiaatteedd wwiitthh tthhaatt tteerrmm aass iitt iiss uusseedd iinn sections 13(d) and 14(d) of the Act. ((bb)) ""AAffffiilliiaatteess aanndd AAssssoocciiaatteess"" sshhaallll hhaavvee tthhee mmeeaanniinnggss aassssiiggnneedd ttoo ssuucchh tteerrmmss iinn RRuullee 1122bb--22 pprroommuullggaatteedd uunnddeerr sseeccttiioonn 1122ooff tthhee AAcctt. ((c6)) ""AActc"t" mmeeaannss tthhee SSeeccuuririttiieess EExxcchhaannggee AAcctt ooff 11993344,. ((d@) ""CCoonnttiinnuuTiihnniggrteDeDniitrrheeocctftoorr3ssM""'ssshhRaaellslltahtheaadvveeCerttthhieeficmmateeeaaonnfiinnIggncoraapssossriiaggtnnieeodnd. ttoo ssuucchh tteermm iinn AArrttiiccllee Thirteenth of 3M's Restated Certificate of Incorporation. I-11- 22775500..00116633 () "Code" means the Internal Revenue Code of 1986, as amended. (e) "Code" means the Internal Revenue Code of 1986, as amended. ((f)""33MM" mmeeaannss 33MM CCoommppaannyy,, aa DDeellaawwaarree ccoorrppoorraattiioonn.. 99i2.m2,m.ediatly dis`TtTreeirrbmmutiiennaaitntiiocoannshUUptpoootnnheCCrhheasapnneggceetiviinen PCCaorontntitcrriooplaln.t. s tTThhheiissamPPolluaannntssshhacalrlleldtiteterermdmiitnnoaattaeell aaAnncddcottuhhneetsPPlluaapnnonsshhatalhllel occurrenceof a Change in Controlof 3M immediately distribute in cash to the respective occurrence of a Change in Control of 3M. Participants the amounts credited to all Accounts upon the s993h.3.a.l be deeDDemefefiidnniitttoiioonhnoavofef CCohchacaunnrggreeediinnifCCotohnentrrteroolisl.. aFFo"orcrhppauunrrgppeoosseiensstoohfef ttohhwiissneAArrrsttihiccillpeeo99f,, aa3MCC,hh"aanngg"eechiiannngCCeoonnitntrrooflleoocffti33vMMe ccsohonantltrlrooblloeoffde33eMMm,,e"daantodn/ohrdaavae"/"ccohhocaacnnurggreereidinn itthfheethooewwrneneerirssshhaiipp"ocofhfaasanugsbuesbtisantnatnthitieaalloppwoornrtteiiroosnnhioopff o33MfM's3'sMasa,ss"eset"tcssh""aaanssgdedeefifniinneeeddffeuucnntddiveeerr `TCTorrdeeaeas.s.. RReegg.. SSeeccttiioonn 11..440099AA--33((0i))(S5)) oorr ssuucchh ootthheerr rreegguullaattiioonn oorr gguuiiddaannccee iissssuueedd uunnddeerr sseeccttiioonn 440099AA ooff tthhee Code. 99a4.m4,o.unt of all RRreeeaiismmobnbuaubrrlsseeemlmeegenanlttaoonffd FFaeeceecssouaannntiddngEExxfpopceesnnsasenesds.e. xpTTehhneeseCCsooimmnpcpauarnnryeydssbhhyaalllsluppcaahyyPtatorotieccaaiccphhanPPtaarirtntiiscceiippeaaknnitnt gtthh(ee0 sooabumbtctaoahiiunnpnutoorrorpfeeonnsaflefloosrrrecciaseesdhohiiinsssambooirlrseshheleeedrrgarbrilyiggahhtntthssdeuuacnncoddcueoerrrutnttahthsiiinssgbAAerfiretnteiigccsllseeapnu99dr,,ieuuoxnnulplseeessnossrseaafsrlliiaanvwwoclssuouuruirsitte.dccoobTmmyhmmeseuenCcnchocemePddpaarbbtnyyiycittphhsaeehnaPPtllaairnrtatiilsccseiioeppkaapinnantytgffottooorr c`escouaancccnhhhePPcpataurirrttopiincociisppewaasinnttithstthhsdeeuiscaamhmmiosoPusuaenrndtttioocbfiyfaplaatlnlhlte'rresecaaosrsuoeocrnnetaaibbaplslteebotteafaixxnpgaaannysddmpeffuiinrnnitaoasnnuccsipiaauollrrsppfullraaainnvntnoniilnotnogugsftf.eheiecsTss hiiAnenrcctuCuicrrolrremeeddp9.babyynyssSuusucchchhahlPPlaaparralttsyiioccmiiepppnaaatnnytt toiionrn rcrienoeinimwmnhbbeiuuccrtrihssoeenmtmheeewnntitrthesschhiaasplulillcebnbhtee Pmmianaarcddtuieercsinnpootahnlletaa'ttsreeerrrletathtchaeaednniptetthhxeepoefeennnspddeaosyo.fmf ttehhIneeftsrraeecpcPiiuapprriisteeuinncattin''psstantttataoxxaaitsbbhlliaees yySAeepaeartcrriicffflooiellelldo9ow.wEiimnnSpggluttcohhhyeeettpeaaaxxyaaamnbbldleeensyytueecaoahrrr piprnaeayiywmmmbheeuinncrthtseootmrrheerrneetriiemmschbbiapuulirrlessneentmomteiennnbctteuriissms ammtdhaaeeddeerperlooiaonntreaadocccceootxuhupennettnfisooresffst.tthdhaeeIyfPPaoaarfrttiPictcaihpirepatniastcn'eisptv'aesnntSStheeippsamaroaraantttSiiohponnecfffiorflroileomodmwiESSneemgrrvvptiilhccoeeey,,ePaeppraatyayinmmcdieepnnastntutcoo'hrsr rSSeeeippmaarbraauttriisooennmfferronomtmsShSeaerlrvlviicnceoe.t. be made prior to the first day of the seventh month following the Participant's AARRTTIICCLLEE 1100 GGEENNEERRAALL PPRROOVVIISSIIOONNSS A11d00m.11in. istrator,AAdudmnmdienirinsitsthterraasttuiipooennrvooifsfittohhneeaPPnlldaanndiraaenncddtioDDnioissfccrrteehtteiiooCnno.m. iTTththieisse.PPllaaBnnossthhhaalltllhebbeePlaaaddnmmiAnidnimisistnteeirrseetddrabbtyyortthhaeendPPlltaahnne ACCruoodlmemmsm,miintfiiitosttrcermeeastossahhra,naldlullnphhdraaeovvrceeethdffeuuulrlslleuspppooeawwsrveetirsrhieoaaynnndddaenaaeduumtthdhoinorrereicitcteyytsiosttanooryoiinnfttfteeohrrrepprtrCeehtetomttphhrmeeopiPPteltlraeanen,a.,dmtoBoinoicetsshstatartbhbaletliiissPohhnl,,anoaafmmAetedhnnemddPinlaaainnsnddt,rarraetenossdrcciiantnnoddd(aaatnnhkyyee darauenncylyeissoo,ittofhhnoeesrr,rmaaascccttatiiinooodnnnspaarossorctthehiedenyytuerrdedpseereeeamtmsattnihnoeeenccyseeossdsfseaaerramyynyonorerpcraaeoddsvvvsiiaisssriaayobbnlfleoeorfiitnnhtehcceaaprrPrrroylyapiinnneggrmaoaoduudlmteittnhbhieyesiitrrrtahddteuiuottPinieelssaonfuutnnAhdddeemeirrPnlittahhsneet,rPPaalntlaaodnnr..toorAAtantnkhyyee dCCsieootcmmuimasmtiioetidntttsiee,needaicssvhthiiaaodllunllaslbbsoeearmmnidanadtdseeehrapliirlnnetbattehhtieeofiiirnrnsarrlee,ossbfppieeanccndttyiiivvnepegraossnoovldlieesicoddoinnisscccolrrufeestttiiihoovenne,,Ponnnlaeenaeelddlmpnnaeoodrttesobbbneeys uuitnnnhitieffeoroPerrmslmatlnleyydAiaandpppmptlhliiieneediPdslatttrnoao.tossiirmmioilrlaartrhllyye situated individuals and shall be final, binding and conclusive on all persons interested in the Plan. s11el00l2.,2..assign,NNtoromananssafsseisrgi,gnpanlbaeibdligileti,tyy.a.ntNNieceiiipttahhteeerr,aamoPPraartrttgiiaccgiipepaanontrt nnoootrhreaarnnwyyisooetthheeenrrcppueemrrbsseoornn,sshtharalallnlshhfaeavrv,eeahanynpyyotrrhiigegchhattttteoo cocroommcmomuntuveetey,, in advanceofactual receipt the amounts, if any, payable hereunder. All sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, in advance of actual receipt the amounts, if any, payable hereunder. All transfer, hypothecate or convey "12 -12- 22775500..00116644 ppnoaanyytmmreaennnsttfsserabaalnnedd. ttNhhoee parririgtghhottssf thtfoeo amaallollunpptaasyypmmaeeynnattbssle aahrreeereueenxxdpperreressssshllayyll,ddpeerccilloaarrreetddo actftooualbbeepaynnmooennnatas,sssiibggennaasbbulbleejectaanntddo snsleeaoiiwnzztuurirraneensootfrrheerssaeeebqqvluueeee.nsstttrNraaototfiioopannarffPtooarrrotfttihhcteehipeppaaanayytm'mmsoeeunonntrttsooaffnpyaaannyyyaBbeddnleeecbbfthitssec,,irjjeauuurdydng'gdsmmeerebnnastthnsskarloolur,rppddterceicycorrreeoeetrsos,, iaooncrrstouttlrarvaalennnpsscfafyeey.rrmrreeeddnNtbbo,yybooeppapresetruraabtotjiifeoocnntanotoyoff lPP0aa.awr2rttiidciconiimppeatahsnntetti'ssceAAvrceeccnlcoatotuuiononftntsammoaraPdyyearrbb.teeicaaipssssaiinggtnn'seeddooorrrappnaayiidd BttooensseuufccihhcPiPaararytrt'isicciibppaaannnktt'rssuspspptocouyusseeoriinnintthshoeelveevveenennctyt .ooff ddNiivovoorrpccaeertppuuorrfssuuaaannnytt to a domestic relations order. c11o00n3.s3.t.itute aNNcoootanttCaraoCcntotonrftareacmcttploooffyEEmmmepnpltlooybymemetewnnette..n TTthhheee Ctteeorrmmmpssaaannnydd ccaoonndnddiaitnityoinosPoanorfstfittchhiiipssanPPtll,aannanssdhhaaltlllhennooPttabrbteeicddieepeeamnmteesdd(ttooor tcthhoeeniisrrtiBBtueetnneeefafiiccciiaoarnriiteerssa))ctsshohaaflllel mhhapavvloeeymnnooenrrtiiggbhhetttsswaaeggeaaniinntshstte provided herein. Morcover, nothing in this Plan ttsChhheeaolmlCCpoboamemnpypdaaenaneynymdeeedaxxnccoeyepptPgt iaaavrtsseicmmaipnaayayyntP,ooattrahhtneiedcrrwiwptihiasseneet Pbbtaeehretisscrppiieepgcchaitifnfititcscoaal(llbolyyer dprreiertostaacviihnindaeereddgdeiinhnseuttrhcheeheineeP.mamrppMtliloocoiyyrpemmaoenevntnetatrt,ooanffnoytththheetiinCCmgoeommifnpopratahnaniynysy Poorrlreaat0nososiinhnnattweelhlrraffbteesrereoeedwwveeieirttmh.h ettdhheetorriiggghhivtteooffantthyheePCCaoortmmicppiapananynyt tttooheddiirssiccgiihpptlliintnoee booerr discharge such Participant at any time for any reason whatsoever. c11o00n.44s.trucd as tTTheoerurgm mhss.t.heW yWhwheeerrreeevveuersreaadnnyyinwwtoohrerddpssluaarrraeel uuossreeddin hhteehrreeeiisnniniginnulttahhree, ssaiisnnggtuhuellaacrraoosrer iimnnaytthheebepp,lluuirrnaalla,,lltthhceeayysessshhawalhlllerbbeee they would so apply construed as though they they would so apply. were used in the plural or in the singular, as the case may be, in all cases where s11h00a.l55l. not contCCraoaplptotiriooannfssf.e.ctTTthhheee ccmaaeppattniioionnnssg ooofrf ttchhoeensaatrrrttuiicccllteeissonaannoddfassneeycctotiiofonnstssoofpfrttohhviiisssiPPollnaasnn. aarxee ffoorr ccoonnvveenniiecnnccee oonnllyy aanndd shall not control or affect the meaning or construction of any of its provisions. t11h00e.66l.awsoftGhoGevoSevtreatnreniionnfggMLLiananwwe.s.otTTah,heetpprrtoohveviiessxiitooennnsst oonffottthhpiissrePPellmaapnntesshhdaalblllybbfeeedcceoornnasslttrrluuaecwdd aanndd iinntteerrpprreetteedd aaccccoorrddiinngg tfoo the laws of the State of Minnesota, to the extent not preempted by federal law. s11a00i7.d7..illegalityVVaoalriliddiinitvtyayl..idiIItnny ccsaahssaeellaannnyoytpparrfoofvveiicsstiiootnnheoorffettmhhaiissinPPillnaagnn pssahhraatllsll hbbeeererrouuflle,eddbuootrr ddtheeiccsllaaPrrleeaddn iisnnhvvaalallliiddbeffoocrronaasnntyyrurreeedaassaoonnn,d, enforced as if said illegality enforced as if ssouurccihhnviillallleeigdgaailtlyoorrshiinanlvvlaalnliioddt pparrfoofevvicisstiitoohnne hhraaeddmnnaeievnveienrrgbbepeeaenrntsiinnhsseeerrrettoeedfd, herein but this herein. Plan shall be construed and r11e00g.88a.rding his orCCllhaaeiirmmsbsenPPerrfoiotccseedduuunrrdeee.r. thAAinsnyyPlPPaaanrrttiiscchiiapplaalnnttsuoobrrmiBBteenneaeffiwiccriiiaatrrtyyenwwhrheooquddeisisstaaggfrroeereessrewwviiittehhw aanntoyy tddheeecciisPsiilooannn hrAAeiddgsmmaioxnriidnsiihntsergtrarathrtooeirscr..eiopTTrthhheoeefPPrtllhaabennenrAAeedqfdmuimitessnitin.usitnstrdrTaeathrtooerrthPssilhhsaaalnlPll lArradeenmssippnsoohinnsaddtllriinanstuwwobrrrimittmiiiantnygga.ttoowhossrwuuitecctvehhenara,rrreeeeqqqxuuuteeeesssntttdwwfiotithtrhheiirnnreevpssiiliexxywttyype(t(o6r6i00o))tdhddeaafyoyPrsslaaoonnff haamddiasddniinottiireoorhnnaeaclarllsrscieiuxxcltteayyitpe((td6600ot)o)f btddheaaeyyussrnedffqeoourrresrrsteteo.aaossdooTnnbhyaaebbtllPheeelaccPnaaauursAsteei.d.cmipTTianhnhiteestorPPralltaBoaennrnemAAfdiadmcymii,naiinhrsyoits,wrtraaeatnvtodoerrr's,'hssaelrrxleetssesppenotodnnfssothreetehss:hhraealpllllybbeepewwrririoittdtteefnnoriinnanaa manner calculated to be understood by the Participant or Beneficiary, and shall set forth: ((a8)) tthhee ssppeecciiffiicc rreeaassoonnoorrrreeaassoonnss ffoorr aannyy ddeenniiaall ooff bbeenneeffiittss;; ((bb)) ssppeecciiffiicc brraeesffeeedrre;enncceess ttoo tthhee pprroovviissiioonn oorr pprroovviissiioonnss ooff tthhiiss PPllaann oonn wwhhiicchh tthhee ddeenniiaall iiss based; ((c)) aa ddeessccrriippotrtiiooBnneneooffficaainanyryy aatddoddiititiimoopnnraaollveiinnhffoiosrrmmoaarttiioohnner oocrrlaimmmaa,tteerariniaadll annneecceeexsspsslaararynyatfifooorrn ttohhfee wPhPaiarcrtthiicciisppuaacnnhtt oiinrnffooBrrmemnaaettfiioiocnniaoorryr mmtaoatteerirmiiaapllriiosvnneeeccheeisssssaaorrryy;;haaennrdd claim, and an explanation of which such "13 -13- 22775500..00116655 ((d@) aann eexxppillnaafnnoaarttmiioaotnnionooffas ttthhoeethePPllsaatnne''psss tccollabaieimmtssakerrneevviiifeewwthe ppPrraorotccieecddiuuprraeent oaarnnddBeneoofttihhceeirraryaappwppirrsoohpperrisiaattteeo iaanppfppoeeraamll atththieeonPPllaaasnn tAAoddmitmhnieisntsirstaettrpaosrto'tsro'sdbedeceictsaiiskoieonnn.. if the P~xticipant or Benefici~xy wishes to IwIfrfittthhteeenPPaararttpiipcceiipapaalnnttwiootrrhBBeetnnheeeffiicCcioiaamrrmyyiddtiitsseaaeggrreeweeissthwwiinitthhottnhheee-ddheuecnciidssriieoodnnofotftwethhneetyPPlla(ann12AA0d)dmmidniainysistsrtraaatftootrer,r,hhereeocorerivssihhneegsshhtaahllell fiPillleeanaa dwAAadrydmimsittoneiinnfsitsirattrapsatptroeoeracr'le'ssipwrrteeiosstfhpptoonhntsheseee..apCpTTeoahhmlee.mCCiotTotmhemmeemitCwittotiemetheemiinssthhtaaolelnlleerr-meheassuyp,pnoodnnrhddeodwiiennvtwewwrrer,iintttiiyennxggt(et11on02d0ss)tuuhccedhharyaaensnplyaaappfpptpeeeerraaillordewwcifiettoihhrviiinnanngnniainndtehedtietyytiPo((9nl9aa00nl)) ndtnoiiannyebestetyyouf((n99idt00se))rrdsdeatacyoyeosispdftfooborryfrrtetehahaesesooaPnnpaaaprbbetlliaeecl.iccpaaauTunshtseee..orCTToBhhmeeenmeCCfioitotmcemimeaimrmlyit,taetyeea,e'n'hssdorrwseehsesapvlpoleonrnb,ssoeeetxhssthheaasnlelldtl bbtfheeoerwwtrhreriipttttlheeyennpsiiepnnreicoaaidfmmiafcaonnrrnneeaearnrsoccanaadslldccifuutoliloraantteieatddls dtdoeeccbiisseiioounnndaaennrddstrroeeoffeedrr bttooytththheeessppPeeacciritffiiicccippparrnootvviiossriiooBnnoeornreppfrirocovivaiirssyii,oonnassnodofftsthhheaellPPlblaaonnthoonnsewwthhifioccrhhthiittssthddeeeccsiipsseiioconnifiiicss based. reasons based. for its a11n00d.99.its succesSSsuoucrccsceeassnssdoorrasss.s.igTTnshh.ee ppTrrhooevviitssieioornnmsssooufcfcttehhsiisssoPPrllsaannassshuhasalellldbbhiiennrddeiaannnddshiianlnulurreienttcooluttdhheee abbneeynneefcfioitrtpoooffrattthhieeonCCooormmoptpaahnneyyr baablnuulsdsiionnifteestsshssseueecnbnctutieisttsiyysnoewwrshshsiiaccanhhnddsshahaasalsslls,ilg,etnwwsshh.eoetftThhtehehrerebbtyCeyormmmmepersargugneceryc,r,e, sccasooonnndrsssooslaluisicddacuatestisieoosdnon,r,hseppruuoerrficcnhahnaasyssheeaoslolurrcionhotcthlcheuoerdrrwpewiosiraseane,ty,iaaocccnoqqruoupiriorrreeoatstshiuuoebbrnsstbtaoaunrnstiitoiantalhellsleyysr eniity all of the entity. business and assets of the Company, and successors of any such corporation or other business A11d00.m.11i00n.i. stratorIItnnhccaotommapnpeyettPeeannrttti.c. ipIIannnttthohere Beeevvneeennftticttihhaaartty iitt(0sshhwaahllllombbeeaffbooeuunnncddfituuppiosonnpaeeyvvaiibddleeennuccneedessarattiitsshffiaasccttPoolrrayyn itfoso uttnhhaeeblPPellaatnno scAchaaadrrleeml ffionohrriasvhhtreiiasstboooerrrethhnheearrmtooaawwdnneyn PaabffyaffraatiiairrcssidpbbuaelenycctaauouasruseetBhoooefrnfieiizlfllielncdniee~ssgxssuyoaorrtrodaaicwcaccnihiddoeoemnrnt,toa,taabhnneeyyrnepplfaaeitygyamimlseepnrnatetypddraueubseeleen((tuuuannntlldieevesserss)tpphrmriiisaooyPrr lccabllnaeaiimismpauttihnhde,earrbeeulffepooorrtnoee sahahppapavprlerloaopcphrcraiievaapteteetebiidenneddrneeemmsmnpnioafinfdisiceciaabtbtiiilyootnnyafooofdfruttshlhyuee cPPahlulaatnnhP,a,orrtttoioizcetthidepeagnsstuppaoooruurdssieBeaennooerrfooiorcttihhoaeertrrhy.eppreerrlAsseoongnnyalddseerueeecpmmhreeepddsaebybnyymtaetttnhihvteee)PmPllamaadnnaeyAAdpdmbmuieniripnsaistsitdrur(a,a0attutoonphrroitt(ons0 Section 10.10 shall be in complete dischargeof any have accepted responsibility for such Participant or Section 10.10 shall be in complete discharge of any llBiiaaebbniileliifttiyycittahhreeyrr.eeffAoorrneeyuusnnuddceehrr this Plan payment made this Plan. pursuant to this A11d00m.11i11ni. stratorIInnaddneedmmntnihfeifiimcceaatmtiibooennr.s. oTTfoothttheheeCeeoxxmttmeeinnttttppeeeerrmmaigittatiienddstbbyyanlylaawwa,,ndtthheaellCCocolmmapipamasnn,yylossshhsaaellsll, iindnaddmeeammgnneiifsfy,y etthxheepePPnlslaaenns AaPalnndaddmn lliwianahbibiislitclirihtatyytoisraarrnaiiosnstiidnncggothvffeerroromemmdemttbhhybeeeiiirrrnsrsreeuossrfppaotonnhcnseesibiCbpialioliiimdttiiemefssoirtootebrryetththaehegeappiCeneorrsfmtfooparramnmnyaaynna,ccneedunoolafefllsttshcheeltaiihriremddssuua,ttmiilecoessssiiisennsd,cecotodne~nnrxnemneciactngtiieeoodsnn, teowwxiibptteehhndsttuhehcese tP1o0laggnrroowsssshinnceehggllisiiggneeonntcceecooovrreiirnnettdeennbttyiiooinnnaasllummraiinssccceoonnpddauuicdctt.for by the Company, unless the s~xne is determined to be due li -14- 22775500..00116666 33MM NNOONNQQUUAALLIIFFIIEEDD PPEENNSSIIOONN PPLLAANN II ((AAmmeennddeedd aanndd RReessttaatteedd EEffffeeccttiivvee JJaannuuaarryy 11, , 22001166)) EExxhhiibbiitt 1100..2299 22775500..00116677 TTAABBLLEE OOFF CCOONNTTEENNTTSS PPaaggee IINNTTRROODDUUCCTTIIOONN 1 1 AARRTTIICCLLE1E1.. DDEEFFIINNIITTIIOONNSS 2 2 1L12.L1.. AACnonndnueuiittyy SStt~arxttiinngg DDaattee 111134..23.... CCCDiooosmdmcpehepanersngaseafttioioornnCCCaouomsmmemitittteeee 11I1s6..45.... DEEFoRRisrIIcmPPhearrgMeefmobreCrause 111187..67.... FM MNooeenrmmqmbubeaeerlrriMfieemdbPelran| 11119..189.0... NNNPloooannnngqquAuuadlaamilliiifffniiiieeesdddtrPPPalltaaonnlrIII BBaeenneneffiitt 11L1I..111L2.01... PRelatinrAemdenmt;iniRsetrtaitroer RSeeptairreamtieonnt;fRroemtirSeervice 111L1..1113423.... SSSSpuepepcpepicalfirfaeiitmeeieddonnEEtfammrlpoplmPloolyaySneeeeervice 1.14. Supplemental Plan AARRTTIICCLLE2E2.. EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN 4 22212.1... EEPlaliriggtiiibbciiillpiiattytyion 23.2.2. 2.3. Forfeiture P~xticipation Forfeiture AARRTTICICLELE3.3. AAM MOOUUNNTT AANNDD DDIISSTTRRIIBBUUTTIIOONN OOFF BBEENNEEFFITITSS. 4 333.2.11... T AAddddii itotiiofonnPamaallyM Mmoeeonnntththllyy BBeenneeffiitt 333334..23.... TFFProoiemrrmmCeoooofmffPmPPaeaaynyymcmmeeeenmnntettnt Death 333356..45.... PBBInerecnenaeeCpfafioicccmiiitaamyrryyencement Death 3.6. Incapacity AARRTTIICCLLE4E4.. UUNNFFUUNNDDEEDD PPLLAANN 9 4442.11.. NNNoooTCTrournuststrtibutions by Members 43.4.2. 4.3. NUUnonsseCeccouunrrteeriddbuCCrtrieoeddniisttoobrrySSMttaatetuumssbers AARRTTIICCLLE5E5.. PPLLAANN AADDMMIINNIISSTTRRAATTIIOONN 1100 -i- 22775500..00116688 555.2.11... PRPeoocwwoeerrrdsssaanndd DDuuttiieess ooftf thhee PPllaann AAddmminiinsitstrraattoorr 555534..23.... AARPdaedvycvimoissereednrrstss of Expenses 5555.6..545.... PIISnenadrydvemeimmceienntitotyyfofooPfErfotxtchhpeeeesnPsPslleaasnn AAddmminiinsitstrraattoorr 5.6. Service of Process AARRTTIICCLLE6E6.. AAM MEENNDDMMEENNTT AANNDD TTEERRMMIINNAATTIIOONN 1n1 66612.1... TRReiiggmhhitnt attootiAAommneenndd 6.2. Termination AARRTTIICCLLEE 77.. CCHHAANNGGEEIINN CCOONNTTRROOLL 1n1 777.2.11... DDDeiifssittnriiibbtuuitotiinooonnfFFCoohlllaloonwwgiienngginCCChhoaannntgrgoeeliinn CCoonnttrrooll 777743..23.... DDFDeeeeetftseeinrrammitniiidonnanaEttxoiiopofennCnooshfefasnPPgrreeessieennnttCVVoanaltlruuoeel 7.4. Fees and Expenses AARRTTIICCLLEE 88.. MMIISSCCEELLLLAANNEEOOUUSS 1122 888.2.11... NNNooo CACosonsntitrgraanccmtteoonftf EEmmppllooyymmeenntt 888834..23.... NGGSoeoopvvaeAerrrsannsbiiilgnnegngmPLLreoaanvwwitsions 8.4. Separable Provisions SSCCHHEEDDUULLEE | sStI-l1 - ii - 22775500..00116699 33MM NNOONNQQUUAALLIIFFIIEEDD PPEENNSSIIOONN PPLLAANN II IINNTTRROODDUUCCTTIIOONN PpPruuorrvppioodsesee:r:eTTtihhreeemppeuunrrtppoobseseeneoofffitsthhiiLsso 33pMaMrtNNiocoinnpgaqunautlasilifafinieedddtPPheeeinnrssiibooennnefPPillcaainnarIIi(e(hhseerireneiintnahafeftt3eerrMtthhEeem"pN"lNoooynngcqueuaalRliiefftiieicdrdePPmlelaannnt III""n))ciisosmttoeo pPbPylrloaannvsied((chheteeirrroeenctiiinnr4aea1fmi5teeerron""ftEEbtRRehIneIPPe"C"f)io)tdswweh.thoiiccphhT~hxssituuiscccihhpNaoEEnnRRtqsIIuPPaaniiidssfuutehnndeaaibbrPleelbaetnnoe1ppfirrcioosivvaiirididneeetsessnioondlleeetdllhyyetbob3eeMsccuaapuuEspsmeelepoomlffeonytththeeeetllhRiimemeiitEttiaraRettIimioPonensnsotriiimImgnpipcnoooasslmeeldyde adopted by by section adopted by 3M415 3M in 1931 of the in 1931 and as Code. and as amended fromtime fo tim This Nonqualified Plan I ~xnended from time to time thercafe. is intended thereafter. to supplement the ERIP originally HnHiaissmtteoodrryyt::he33MMSupooprriliggeiimnneaalnllltyyalaaddPooeppnttseeiddonaa nPnlooannnqqouufaaMliiiffineenddepspeeonntssaiiooMnninpplilaannngooannndNNooMvvaeneummfbbaeecrrtu77r,,i11n99g778C8,.omTTphhaiinssyoorr(iigghiiennraacllippnllaaafnncwwtaahsse n"aSdSaoumuppptepipdlolneet.mmheeenntSEtafuallplepcliPePvmllaeaen)n"J.t)aa.nluaPreynTTshhi1eoe.n19PSS9ulu3app,nppltoleehfmmeeMenSntiuntapanlplelseoPmPtellaaannnM tailnwwiPanalsgsananaawdmmaeseMnndadaenemdudefnadcffetrruodormimnagndttCiimromeeemstpatattoeondy att(isihmmeete.rweoinaaasfffettetperrarrtahiitlcess "paplNdlaaoonnnspsq:t:uioanl.itthhfeeiEcfd""fNeNPcooetnninvsgqeiuuoaaJnllainffPiulie~addxnyIPPfee1on,nfss1iiMo9oin9nn3n,PPeltlshaaonentaSI1 uMopoifpfnlieM MnmiginenannnncteadsslooMtPtaaalnaunM Mfiawnicniatinsnuggr.aimnaagennnddCdoeM Mmdapanaanunnufydof"ac.rcuetusurtTraiihtnneeggdprCaCosoovtmimwsppiooaannnssyey"poafraatannhtddee r"raeNemssetotannatdteqeemumdaeelnniffttrisseodmssuuPtppeieenmrrsessieoetddoneetdPdilmaaaenllllsIIippnrorciifeooMrrthivevnieenrrressaisidoooonntpasstiMooonffi.nittnhhNgeeonaSSnquuudppapMplllieeafmmnceudenfntatPacalltluanrPiPnl1laagpnn.r.CovoimSdSuepuscacnhhsyu"rrp.eepssltTteaahmtteeeemnmpteerannolttvssibseihhnoaaenfvvsieetosbbfteethheeaennt saaaurmrepepnlssttderrmeiicecdttnllftyyraoliminnreteeitmxxiccreeeessmtssoenttooifmfbeessneeesccfittiniitocosenn, tb4h4u11et55ircafoodfffeotptthihtieveoenCC.JooadndNeue.oa.rnyqNuNoa1o,nlniqf2qui0eua0dla9i.liPffilisaeeunddchIPPplplaralonnavniIIdIIheaspsprrsoobuvvepieidpdnleeeddammecceenenrrtdtataaeliidnnbe1nda0edifdptiriittsooivontinhadaalelt 4sssuuu0p2ppp(pplglleee)mmmoefeentnnthttaaaelll Crrroeeedttteiiirr,erememmeeennnttt benefits benefits, benefits thatbut that are strictly in excdss of limitations effective January 1, 2009, such plan are strictly in excess of limitations under seston 401(a)(17) and has been ~xnended to provide under section 401(a)(17) and 402(g) of the Code. EREfeffsfetecactttiievvmeeentJJ"aa)nn.uuaarrTyyhe11p,,ro22v00i00s9i9,o,nstthhoiifssthNNiosonnrqqeusuatlaailtiffeiimeeeddntPPslluaapnnerIIsewdweaassallaapggraaiiinno vaaemmreesnniddeoeoddnfsaatnnhdde Prrleeanss.ttaatteTeddhe((ttphhueerpo""2s2e0000o99f tRtphhaeiiysssmtarreetenesstmttaateptenremotm"vee)inn.sttiToiisnshsettooupnrbbodrreviinrinsggitohttinhhssee PoPPlflalaatnhnnifsiirnnrottemoosttccahooteemmmppplealiniyaatmnnesccuneeptewpwrirsitotehhvdiessseeiaccolttlniiopsonnruion44rd00ev99reAArtshioooeffnEtsthRhoIeePf.CCthooeddFeePrlobbamyyn.O""dcTdteeho--ellbiienpnrkukiir3npn,ggo""s2e0tt0hoh4eef {`p(wtahhiyteehmdd"ealanittentkpessdeer"occtvtiiioposnnaioy44nm0s0e99nuAtAndpwweraarossvtihaasiddisdodPneesddlainttnoofarttchohcemeoCCrtodhoadedneec)p)eattyhwhmirrotoehuunggsthhppeDcrDoieeavcclieestimmrobanbnesesrirut33in1o1d,n,e2u2r0l0t0eh08se8,,iEttshRhseeuIPePPd.llaabnFny rccotoohmnenttIiiOnRncuSuteeoaddbnettdoro t3ooh,pepe2eUrr0asa0tt.4ee awDDveieoptphiaadr"rattlnmimnceekennettdo"foopffdaoyTTurmbreetaea,snsuuthrrpiyyrsoviinrniessiccotoonanntsnneeimencectntaiitcoocnnoisrwwdiiailntnhhtceentthdwheeedithiimtmsoppplleaeecpmmipcalenlynitrtaaabttnoiisotoihnntiotoonoffrudsselecefcsietrioiorsnnesdue44dc00o99bmAAypethnooesffaItttRhhiSeeonaCCnosoddudebte.hj.eecUtFF.oSo1r0.r sas1ee0vccosttieiidoroanvnni44ccee00s99AoApfoeorfdfftoothuhrebemte,CCdootdohdneies o((rriie.cesat.fa,,treddmeefJfeeaenrnrrruteeaddrisyccooi1nmm,tpepe2ne0ndn0se5sad)at.tiitooaonns accwrpreeeplddlliyittseedbdoduutenhnfddeeretorrrettdhdheeecfoPPemlrlapraennednwwshachioticcimhhopnreeelnclarasteateedtididotnaealdlllsuoounrrbdjiieennrcpptatarhtrtoet tPPol`lasasrnneanrwwvdhfihcaiitecchshherprreeedarl"fatotefrsmsroeeemndnttaiioprrpneelllyyiocrat(ot0aifostseneerrrovvJfiiaccsneecusstaippryoeenrrff1o4,or0rm29m0eeA0dd5o)oof,nntahsooerrwCbboeedellfefoo.arrseeHdDDoewefeeeccvreeremmerdb.beecrrtohm33e11pb.,een2n2e0s0fa00it44tisotntphhaacaytraeiibdsslieteeelltdiigogiiuMbbnlleedemebt1ro0etrhbbseee "aBagennnrddeafnFFidotofrrapmmtrheieerorrreMMtdeo"emJmfbarobneumerarsrsayp((apa1nn,liddc2a0ttth0ihoee9inirrwoiBlBfleesnnbeceecftfiidiocceinitaaer4rini0ems9si))AnewwodhhfooitnheccaocoCmcmoommrdedeena.ncncHceeeddowwpipetaavhyyemmrte,henetnhttperooboffveinttshehifeeoiiintrrss NNpooafonynqtaqhubeaulleaPillitfofaiineeMddinePPmclleabannecrtsI| SBaatutebtnhsheeeefqiutttieimpnmreteiooaor fmftoetthnhJeedaiimnrreubbnaeertnynoeefr1fi,tr2ecc0soo0tmma9tmmewemenielncnlctebeomemfedetnnehtittesaramNnnoddinnqwweuidilalllliinnnfooaittcccdbboeePrdlaaaaddnnjjcuu| essttweeddithoorrthrreeeccpoormmopvpuiusttieeoddnsttooofrreethfflleeeccPttlatthnhiissinooerrffaaenncyyt subsequent ~xnendment or restatement of this Nonqualified Plan I. E2Ef0fff0ee9ccttR::eTTsthhaiitsseNNmoeonnnqtq,uuatlahiliffibieeedndePfPlialtansn pIiaisysahhbelerereotbboyyMaaemmmeebnneddreesddanaanndddFrroeesrsttmaaettereddMeeeffmffeebccettiirvvsee (JJaaannnduua~trxhyey1irl,, 22001166.. SSiimmiillaarr ttoo tthhee 2009 Restatement, the benefits payable to Members and Former Members (and their in -1- 22775500..00117700 BBbeeennedefeifticceiianarmriiieensse))dwwhihnoo acccoocmmommredeannnccceeedd wppiaatyyhmmetenhntet oopffrotthvheieisirrioNNnosonnqoqufaulaitlihffeiieeddPlPPalnlaanninI1 BBeefenfneeecftfiittapptrriitoohrrettootiJJmaaennuuaaorxfyyt1h1,e, i22r0011b6e6newwfiililltl cbcroeeosmmtdmameetteenemncrecmenetmimoneeefndnttthiiaansnnddNaocwwnciqoilullrladlnanionoftctieebbdeewPaaildtdahjjnuusst|htteeedd or recomputed to provisions of the or recomputed to rrPeelffalleneccttinhthiiessffooerrctaannayyt ssthuuebbsseetiqqmuueeennttofaammtheeenniddrmmebenennttefooirrt restatement of this Nonqualified Plan I. AARRTTIICCLLEE 11 DDEEFFIINNIITTIIOONNSS dEEoxxccceuepmptet nwwthheserhraeellssppheeaccivifefiicctaahllellyymeddeaefnfiiinnneegddsiinsnettthhfiisosrNNthoonniqnquutahaielfifiEieeRddIPPPllpaalnnanI1,,dttohhceeumwweoonrrtdd.ss aaEnnxddceppphhtrraassfoeerss dwwehfhiiinccihhtiaaoppnppseeaaanrrdiinnottthhheiirss cdssouuonbbcsssutttmraaunnecttnitivtiveoesnhppaarrlonolvvdhiiassadiivomoeninnsstihosoetffrmttahhteiiiassonnNNionoofgnngsquthsauielastilifNffoioierentddqhuPPianlllaaintnhfeeII,,dEtthPhReleIaPttneerp|rmlmassn aadnnoddcuccmoonneddniittt.iioonEnssxcooeffpttthhfeeorEERRdIeIPfPinssihhtiaaolllnl sggooavnvdeermnothtthheeer construction and administration of this Nonqualified Plan I. u11n.1d.er SectiAAonnnnn3u.ui2.ittyy SSttaarrttiinngg DDaattee.. ""AAnnnnuuiittyy SSttaarrttiinngg DDaattee"" mmeeaannss tthhee bbeenneeffiitt ssttaarrttiinngg ddaattee aass ddeetteerrmmiinneedd under Section 3.2. 112.2.. CCooded.e. ""CCoodde"e" mmeeaannss tthhee IInntteerrnaall RReevveennuuee CCooddee ooff 11998866,, aass aammeennddeedd.. o11f3.3.t.he BoarCCdooommfpDepinersneascattotiiroosnnofCCo3omMmm,imtittteeee.. ""CCoommppeennssaattiioonn CCoommmmitittteeee"" mmeeaannss tthhee CCoommpepnesnasattiioonn CCoommmmitittteeee of the Board of Directors of 3M. o11f4.4..an emplDoDyiiessecc'hhsaarrggeeemffpoolrroCCyamaueusnsete.fo""rDDiirsseccahhsaaorrnggsee offoforrdCCiasauhusosneee""stooyrr,""DDeimissbccehhzaazrrlggeeemddeffnootrr,CCacaouunssveei'"ctmmieoeanannsosftthhaee ttceerrrimmmiiennaaottriioonna mom1if0iss3addnMeemmaeenemaadnnpiooltorrybiieunnsevvi'soonellvsvesiimn,nggpalmomoydormerataelelnrtttmuuirrfpnpoieirttduurddieenea,,stohwweinilslsllffououlllf dmmdiisiissscchcrooeontnnidedousunctcytot,f,,toohermreppbCeeeorrzssmzooplnneeamanllseammntiti,issoccconoonnCnddovuumcicctmttiiowwtnhehieicoc.hhf iaiss cddereittmrriiemmeeonntrtaalal to 3M and its business, as determined in the sole discretion of the Compensation Committee. 115.5.. EERRIPIP. . "E"ERRIIPP"" mmeeaannss tthhee 33MM EEmmppllooyyeeee RReettiirreemmeenntt IInnccoommee PPllaann.. p116a.6.y.ments undFFeroorrtmmheeerprrM oMveiesmmibobneserro..f_t""hFFisoorrNmmoeneqrruaM Mleiemfmbicbederr"P"lmmaneeaa1n,nsosraaaffofoorrmrmmeeerrreeemmmpppllloooyyyeeeeee wwwhhhooosiiess erremeccpeeliiovvyiinmnggenbbteennweeifftiihtt p33NaoMMnyqmuhheaaanlssitsfttieueerrndmmdiPiennlraaatttnheeeddI Bpfefroonorrevfiaiasntinoyyunnsrrdeeoeaarfssottohnhnies opoNtrthhooevenrirqsuitthoahnalaisnnofifeDDtdihissPicclshhaaanNxroIggn,eegourffaoolarriffoCCiraeamudusesPeerleaaamnnn|pddlowwyheheoo is entitled 0 a vested whose employment with is entitled to a vested Nonqualified Plan I Benefit under the provisions of this Nonqualified Plan I. a11n7.7..additionaM MleemNmobnebqrue.arl.if""iMMeedemmPblbeaerrn""| mBmeeenaaennfsistaaunnneedmmerpplltoohyyeeepeerowwvhihsooioiissnsaaofppaatrrhttiiiscciipNpoaannntqtuiiannltithhfeeieEEdRRPIIlPPanaannIdd wwhhoo iiss aaccccrruuiinngg an additional Nonqualified Plan I Benefit under the provisions of this Nonqualified Plan I. 118.8.. NNoonnqquaulailiffiieedd PPllaann II. . ""NNoonnqquaulailiffiiecdd PPllaann II"" mmeeaannss tthhee 33MM NNoonngquualailiffiieedd PPeennssiioonnPPllaann I|.. 1t1h9.i9.s. Plan desNNcoroninqbqueaudlaiilniffiSieeeddctPPilaonnlII3.1BBaeneenfneifti.t. "N"Noonnqquuaalliiffiiecdd PPlanl|I BBaeennefeniftit"" mmeeaannss tthhee bbeenneeffiitt ppaayyaabbllee uunnddeerr this Plan described in Section 3.1. 2. -2- 22775500..00117711 110 Plan Administrator "Plan Administrator" means the 3M Vice President, Global CC1o.o1mm0p.epnensasattiioonn aannPddlaBBneenneAeffidittmss ooinrr ihhsiitssraootrrohhreerr. successor. "Plan Administrator" successor. means the 3M Vice President, Global a1LtI.1La1.i.ned agRReeefttiiifrrteye-mmfeievnnett;(;5R3Re)etiatrinred.e.co""mRRpeletetiitrreeedmmeefnintvte"" (mm5e)eaaynnessaraas SSoefe"ppCaarrraeatdtiiiootnneffdrroSomemrvSSieecrrevv"iiccaeesaaffdtteeefrrittnhheeedM MuenemdmebrbeetrrhehhaaEssRIbbPoo)tth,h ora Separation from Servic afer the Member attained age fifty-five (55) and completed five or a Separation from Service after the Member (hh5aa)ssyaaettattarasiinnoeefdd "aaCggreeedssiiixxttetyyd--ffiSivvee rev((6i6c5e5)."). (as defined under the ERIP), e1Lm.11p22l.oyment SSreeelppaatariraoatntsiiohoinnp ffwrriootmhm 3SSeMerrvviaiccneed..all"S"aSefeipplaairraaattteiisoonnfoffrrroomamnySSeerrrevvaiisccoeen"" ommteehaeanrnssthaaansseevtvheeerraanMncceeembooefrfaa'sMMedememabtebhre'ro'ssr Discharge for Cause. employment relationship Discharge for Cause. with 3M and all affiliates for any reason other than the Member's death or TW Wrheheaetsthuhereyrr raaegS.Seepspaearcratatitoiiononn14ffr0ro9omAm-1SS(eehrr)vvi(icc7ee chhaa.ss. woohccecctuurhrrereerddthiiess dfdaeecttteesrrmamniindneecddiruucnnuddmeesrrtassneecccettsiiooninnd44i0c0a99tAAe toohfafttththheee CCeomodpdeleoyaaennrdd Taathnnraddetatttshhhueeeryeelemmrvpeepglllo.ooyyfseeebeecotirrnoeeanaassfoo1innd.4aeab0bsl9leyyArvaa-inlnc(ttehiiscc)iitpp(haaeitt.eeeeddm.,ptthlhwaaotthyeennteoohweffouruurrtttlhhhedeerrfpasseceertrrsfvvoiiaccrneemssdawwcfoieoruruclulsddmucbbsheetadpnpaeectrreeffsoo(rirmwnmdheeieddctaaathfefttaeeetrsrrhaaacatencrtehetremtaapieilnnmoddypaaeltoteeeyeooorrrr tiilhnenavddeteelptpheeoennfddleebevnontentlaccooonffntibtdrroeaancctsatoeorfrri)v)diewwceoossueulrlpvddeicrppefeesorrrmmthmaaeenndeeenmnt(tlwplyhyloeddtyeheececerrreewaaaosssueeladttnoopennemoorpfmomlrooomryreeeaetfththeoaarrnnsattuwnwceehnintdntyydaetepppeee(rnrwccdeehennentttth((e2c2ro00na%%tsr))aoacnoftfoerttmh)heepolaaovvveyeererreaatggoheeer `liiememvmmmepelldeoidoyaifeatetebelohlyynasappbrrfeeeidceceeneddpsiinrenogrgvviittchdheiiisrrnttgyyp--essseriifxrxovir((mc33e66es))dtomm(oowtnhnhtetehhethmppepeerlrrioiaooysddera((noolrreesttmshhetephlffaouunyllleltehppiereotrrryii-oosaddinxooi(ffn3ds6see)erprmvveoiinccndeetesshnsttt)oo.cttohhneetreeammcptpollroo)yyeoervr eiirff ttthhheee employee has been providing services to the employer less than thirty-six (36) months)). oSSteehppeaarrraabttoiiononan fffrriodomem lSSeeearrvvveiiccoeef ssahhbaasllellnnncooett ibbfeetddheeeeepmmeereiddtodtooodoocceccsuurnrowwthhieilxleecetthehdee eesimmxppl(l6oo)yyeemeeoniissthoosnn ommri,illiiittfaarrlyyonllgeeeaarvv,ee,s,ossiilccokknlgleeaaavsveeothorer. ecoeommtnhptperllraoocbyty.oeeeneaFrrofeerittdaateiihnnilssseapaavurerrpiiooggsfhhetta,battsooelnrerceaeeevememifppistllhoobeyyommnpeaeenrnfitoitddewwidoitntohhleys33inMfMo, taoonerrdxcsaaeonnedlaaoffsnffigiixlliiaa(as6tt,ee)tmhuuennorddeneetirhrssaaaronner,aaasippfoppnllloaiibncclaagbbeellreee,xspssoettacaltttouuantttegeioaoonsrrtthbhbayyet tctthhoweeennteertammycp-tpnl.lioonFyyeeoeere(2th9ww)iisilllmlpourrneretpttuhoursnmepe,ttroaoiolppedeearovrfffeooarirsmbmsbeossnneecrraevvfiiwcicdieelessloffbnooelrrys33uiM fbM,stainootrdrutasaeonnd laoaffofnffrigillsiiaaautstcee,.h.thseiNNrxeoot(ti6wws)iaitmthhrosesntatatasnhonddnpiianenbgrglieottdhehxeeipfffeotochrrteeeaggtloiooieinnangsg,teh, aiaast cdtdwauuneeebnttteooy-aaennnxiyypneemmcet(ed2edi9dci)ca(alm0llllyoyansddttheefttepeorrearmmriiiocnndoaanbbotllifeenapupbhohsyuyesssniiccpcaeealrlwioooirrdllmmobnfeetnnatsoaullbleiismstmsiptputaahtiiearrdnmmefseoninxtrt (stth6uh)aactthmccosaaninnxtbhb(es6e)aeenmxxdppoeetncchtttaheetddpceattorouisorreeedsssuuitlflhtttehiinneemddlpeeelaaatovthhyeeooiersr tctooanbbeebeuunneaaxbbplleeectttoeodppeetorrffoloarrsmmt fttohhreeadducutotiineetssionofufhohiuisss or her positionof employment. period of no less than six (6) months or her position of employment. and that causes the employee R11e1.1g3.3.. sectioSSnppe1ec4cii0ff9iie-edd11EE)mmoprpllosouyyceehee.o.th""eSSrpperececigifufliieaedtdiEEonmmpolproloygeyueie"dea"nmmceeeaainnssssuaacd""ssuppneedccieifrfiiesededceetmimopnplol4oy0yeee9"eA"ofaasstddheeeffiiCnnoeeddde.iinn TTrreeaass,. Reg. section 1.409-1(i) or such other regulation or guidance issued under section 409A of the Code. M111i.14n4.i.ng andSSuMupappnplulfeeammcetenuntrtaailnl gPPlClaaonnm..p""aSSnuupppptlhleeemmperenentdtaaelcl ePPsllsaaonnr""tmmoeetahainnsssNttohhneeguSSauulppippfllieeemmdeenPntltaaanll |PPeennssiioonn PPllaannooff M Mininnneseostoata. Mining and Manufacturing Company, the predecessor to this Nonqualified Plan I. -3- -3- 22775500.00117722 AARRTTIICCLLEE 22 EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN e22l.11i.gibl0e becEElolimiggeiibbialiilMitteyym..beAArnnyiyn eethmmipspllNoooyyneegeeuoaoflfi33fMMid ooPrrlaaannn ifoaailfniiliadatteeonwwlhyhioofiistshaae pRpaeortxtitiircceiipmpeaannnttt iIinnnctthoheemeEEwRRhIIiPPchsshhawalolllublbeed oeoltiltihmhgieeitrrbewwldeiissbteeoy hbhtaeahvceeoemabbpeeepeelainncMacetaeairmronnebeddeorfbbiynythteoohrrilsippNmaaiyyotaaanbbtqlilueeoanslttioofoienssduuccbPhhelaneenimmtIppsillfoouyanynedeederouunnnslddeyecertrifittothhnheee4ppR1rr5eootvvioirifessimiotohnenenssotCofIofntdctheoheme(eaEEsRRwIrIhePPifclhiiesscwtbbeoeediiunnligdgn lSSiemecctittiieoodnn 3.8 of the ERIP, as by the application 3.8 of the ERIP, as ttohhfee same may be amended from time the limitations on benefits under same may be amended from time to im). section to time). 415 of the Code (as reflected in 22S2e.2.c.tion 2.1 wiPPtaahrrottuiictciipapnaayttiiofounnr.t.herPPaaarrctttiiiccoiipnpaabttyiioontnheiinnCotthhmiipsseNNnosonanqtquiuaoalnliifCiieeoddmiPPlltaaenn.II sshhaallll bbee aauuttoommaattiicc bbyy ooppeerraattiioonn ooff Section 2.1 without any further action by the Compensation Committee. S22h3.3a.l.l forfeiFtFooralrflfeeirtiituugrhert.es. aAAndM MbeeemnmbefbeiertrsoorurnFFdooerrrmmetehrrisM MeNeommnbqbeuerarlssihhfaaillelldcceePaalssaeenttooI bbweehaeanM MetemhmebbeCerormooprreFFnoosrarmmteierorMnMeCmeombmebmerirtatannedde dcdsoehentatseellurrmlmftioiannrncfetses,i,ftoiirannlolriittrssiisghssooottsllheeearddnwiidisssccberreeedtntiiieorofennic,t,tslttyhhuaanottrdessiruundcctihhhriescM MtelNeymmobpnbeeqerrurfaoolorirrfmiieFFndoogrrPmsmleeaerrnrviM McIeewsemmhfboebernerarnthyiisse pceCemmropspmlolonopoyyereeneddsnattbbiiyoyt,n,y aaCeccnttoigimnnagggmeaiadtssteieana stcthohoelends((uiib))lytmmaan3antnMufufofaoracrcottrauunrirsyeeooootrfrhessirtaawslleeisosuoebffsadiandinriyeyacrtipplcyrrsoo,odduruocrcitnt(dssiiii)rmmeimcillatoalnyxrufpttooaecrooftrorurriimnen icncooogrmmpssapeeltreevitititociifeoosnnspfwwoeicriittaahhlnyaamnnpayycehrppsirroononeddruuocycrtteommnratainctnuyqufufeaiancpcgttmuauegrrneee,ddd oooinrrr fsmfuouarlmndniuisfsbhahyicinnt3gguMreooffoorreennasgngailyienneeooeeffrriiiantnnsggysuooprbrrsoittddeeuciccohhtxnniiiseccisaam,lliolssraeerr(rivvoii)iccomeerssainccnuoocfnnoaccmceeptrumenrtiieinntggoirossnsuuaccwlhhiethommafaacnschpyhieinncpeireraorylydumcootarrcmheeaiqqnnuueuiirfppyammceoetnrnuttr,e,eqduuussiopeerddmseoiinnlntd,tthbhoyeer m33aMMadneotourerfraaamcnnityuynoraoetffiiootisrtnsssstauhulbaebtssioiaddfiiaaMarnreiiyemessbp,,rewworidittuohhcrootuuFsttoimttrhhmieeleawwrrrritMiottetteoemnnrbiccenoornncssoieesmnntcptoeoovtffiettrtihoheeend CCwbooyimmtphtephaneensnypasratpotiirvoooinnsdiuCCoconotsmmmmomiaftnicttutheefia.esc. tSueBBrceeetfdfiooorroneer 2mms3oaa,lkkdiitnnbhggye aCCfooordmfmepetiepetnerumnsraseiatnptiairootoinnovinCCsiotohommnamtmaianittdttMeeeaenmsshhobapaleplllrorggotiiruvvneeFitottyhrhmeeteM MoredeMmimsbecbemoernrbteoiorrnruiFFesoosrcrumomcevehrerreeM MmdepemlbmboybyeetmrhreennnootpttriiooccrveeicsoooifofnnsiittusssltoiininfnttetgehnnittrsiieoolSnnaett1ico0otinoiisnnhnvivpo2ok.ko3eer, tttthhhhiieess provision forfeiture provision oopffrossvuuiccshhiossneerravvniicdceessanwwioittphhipinnoraatuppneeirrtiiyooddtooofdf innsiicnnocenttytyin((u99e00))sdduaacyyhss effmoollplloloowwyiimnnggentththeeorddaacttoeeonosffulsstuuinccghh notice. relationship notice. or the AARRTTIICCLLEE 33 AAMMOOUUNNTT AANNDD DDIISSTTRRIIBBUUTTIIOONN OOFF BBEENNEEFFIITTSS 33M1.e.1m. ber oAArdddFdiotirtiimooennraallMeM MmoonbntethrhllyyundBBeeernneeftfihitet .E. RIIInPn,aadtddhiidstioiNnotnttgiooutoathlhnieefiaaemmdoouuPnlntatnooffI RsRheeattliilrreepmmaeyennttanIInnaccdoodmimteeipopanaayylaabmbloleentt(ho0lyaa bM beenenemeffibittetrtooossruuccFhhorMMmeeemmrbbM eerremoorrbFFeoorrrummneedrreM Mr etehmmebbeEerRr ecIPqqu,uaatllhittsoo the amount by which Nonqualified Plan I the amount by which (s(aah))aelexlxcpceeaeeyddssan((bb)a),,dwdwhihteierorene:a: l monthly @(a) FiissortthmheeermmooMnnetthmhlblyyerRReebttyiirretemhmeeennEttRIIInPnccoiomfmteehattthhaapttlawwnoo'usullbddenhheaafvvieetsbbeeweeennreppaanyyoaatbbllleeimttiootessduuccihhn M aMcecemombrbdeearrnocorer wwFioittrhhmttehhreeMpprreoomvviibsseiioronnbssyootffhsseeeccEttRiiooInnP 44i11f55thooafft ttphhleeanCCo'osddebe:e;naaennfddits were not limited in accordance (b) Memibissettrhheeunmmdooenrntththlhlyey ERRReIetPtii.rreemmeenntt IInnccoommee aaccttuuaallllyy ppaayyaabbllee ttoo ssuucchh MMeemmbbeerr oorr FFoorrmmeerr Member under the ERIP. 4-4- 22775500.00117733 dSSouuuccbthh.aaddaddiMitteiioomnnbaalel rbbeeonnreeffiFitot rssmhhaealrlll Mbbeeemrreebffeeerrrrreewddhttaoo hihseerrneeoiitnn eaansstittthhleeed""NNtooonanqquvueaasiltfiefidieeddbenPPellfaainnt IIuBBnedenenerfeifttith""e.. EFFRooIrrPaasvvhooaiilddlaannnocctee booeff edebnnoettuciitbtolltmee,eddasttMovoeesaatmnneyybdeNNrooonrnqquFauolarilmiffiieecrddMPPellmaannbeI|r wBBehennoeeffiisittnhhoeetrreecnuutnniddtleeerrd uutonnlleaessvssesaatnneddd buunentntiiellfisstuuuccnhhdebbreenntehefefiittERuunnIPddeersrhatthlhlee nEoEtRRIbIPPe becomes vested. w33i.2l2l. begin TTaisimmoeef ootffhePPaafyiyrmsmetneotnf.t.thePPaacyyammleeennndttarooffmtthohenetNNhoonn(qtquhueaallii"ffAiienndduiPPtllyaann SI|tBBaeteninenefgfiittDddaeetsescc"rr)iibbceeoddiniicnnidSSeeencctttiioownnit33h..11oraabbnooevvxeet wffooilllllloowbweiingngigntthhaees M Moefemmtbhebere'rf'issrsSSteeoppafarrtaahtteiioocnnafflreronomdmaSSreemrrvvoiicnceeth:; pp(rrtoohvveiidd"eeAdd,n, nhhuooiwwteyevveSertr,a,rttthihnaagtt: Date") coincident with or next @(a) planMMneeedmmbibenercrsosmwwehhofososree2jjo0o0bb8ggrrwaaaddseessmowwreeerretcchllaaanssss$ii2ffii3ee0dd,0aa0ss0CCwEEeOOr,e, LLpI1e,,rmLLi22t,,iLLd33toaannmddakTTe77 wwahhooonsesee- pttiinilmamtneehneiierrdrfreoevirvnomocccooaafmbbllaeeenlefoelaecrnctnt2iui0ooi0tnny8iinnwin22a00sl00iem88uoottoorfeecaltlehcleatunttmoop$2rres3ecu0cme,i.i0vv0ee0IttfhhweeaieirrrteiNNmopoenlenqyrqumualliaetiltcifeftidiieeoddtnoPPwmllaaaannskI|emBBaaeednnoeeefnfieiitn-t t2i2nh00e00t8h8,eA, nppfnoaauyryimmmteyenontftSaootnaffrssatuiunnccnghhuiM MtDyeaemtimnbeeblriece'rou'sisnoNcNfioodnaneqnqulutaumlailwpififiitseehuddmPPo.lrlaaInnfneIIaxBBtteiemnnefeefoflilyittloseswhhliaealncllgltioccnotohmmewmmaeseMnnemccmeebadeaaerss'oiosnff tRRRheeeetttiiirrrAeeemmmneenennntut.,ti.tyhiIIsfFSssotauurrccthhhienrgMMNeeomDmnbqabeuteearrliScSfeoeipipenaadrcraiaPdttleeeassnntffIrrowBomemintheSSfeeirortvvrisichcnaeelelppxrrtbiieoofrrpoattlolioodbwbieeinccnoaogmmsiiitnnnhgggeleleMilliggueiimbmbpllbeesefufroo'msrr aSRaseseptoaoirrffeamttthhieeeonntAA,fnnhrnniousumiitotSyryehrSSvetirtaacNrertt:oiinnnggquDDaalatitfeeiedccooPiinnlaccniiddIeennBttenwweiifttihht or next shall be or next following the paid in a single following the M Mluememmbpebsreu'rm'ss Separation from Service; (b) `SepOOanrnaeetiM MoneemfmrbboeemrrSccellraavssissciifefipieerddioaarss1LL03320oo0nn8TTrwraaannsssiiptteiioromnnaialtltReRdeetttiiorreemmmaeeknnett aLLeeoaanvvee-etwwimhheooiiimnneccvuuorrcrraeebddleaa eeSilnleeeplcciattciirouaontnoioiinfnan 22frl00ou00mm88pt1So0seurrrmvee.cicceeeiivSvpeeurcihhohiirsstMNNoeoo2mnn0gbq0ueu8araiwlfidfaiiisdeeddpienPPrllmfaaanncitttI|etdBBiemetneonelefymfiitatelkiienecnt,ttahheoeannffedoo-rrtmaimmccooeoffridraairnnenvgaalonnyncn,uauibhittliyyes NgiNnioovnlneqieqnuuualaionilifffiSiaeecddhluePmPdllupaalnnesIuI m|BBe.aentneteSfafiucithctehssdhhM aalhlleelrmcceoobtmomermm(edwenihndcicceeinhuufppsahoocanntllthhimiibsseesslyccthrheeeealddetuueclldtee,ddaasndddaaatteeaRcooecfftoirttedrereirmnmmgeiilnnnytaa,ttiifhoooinnsr gppuuivrreppnoosseeinss ooSffcSSheeecdcttuiilooenn 3 3(b)): I attached 3.3(b)); hereto (which shall be treated as a Retirement for (c) priFFooorrrmtmoee2rr0MM0e9emmwbebererersspccellmaassisstiiffeiideeddtoaassmLaL1k1eaannaoddnLeL-22twwihmheoo iiinmneccvuurorrrceeaddbalaeSScelepepacartraiaottniiooinnn ff2rr0oo0mm8tSSoeerrevvlieiccceet pt1Jo0ruimorreperccteeosiiuvmv2e.e00tth9hIeefwiirraeNrNteooinpmngeequlruaymlaiiletifltfeieiecedtdditooPPnlmlaawnanaksIe| BBameeaonndneefeefi-itttiinmiinne20ttih0hr8reee,vffooporcarmamybmlooeefnfetaalnneocfatainnotnnhnueuiiiitrntyyN2o0iinnn0q8luliiaetcoluuioefolifefecdaat wlPPuillmatanhnpoII srBuBnemeennx.eteffiIfittfolssalhhaotaliwlmllineccglooytmmhememleeeFncnotcciroeemneuurwppooMannes mtmtbhheeaedrffe'iirrsssinttatdd2taa0ayyi0n8oom,ffepntthtahoeeyfmccaaaegllneeetnnddosaiafsrrtthymmefooiinrvntetNhh(6occ5noo)qii:unnacciliiddfeieenndtt with or next following the Former Member's attainment of age sixty five (65); @(d) andAAllwllhtoothheherarvFFeoornrmomteercr oMMmeemmmebnbecerressdwwphhaooymiiennnccuturrroreefddthaaeiSSreepNpaoarnraqatutiiaoolnnifffirrocomdm PSSleaernrvviIiccBeeenpperrfiioiotrr t(po0ri22o00r00t99o JJJaaaannnnduuuaawarrrhyyy,o h112,,a0v022e90000ni99ont ssachhoaasmllillnmgrreleeenccceeleiivudvemeppappyaasmuyymmme.enentntot(fFootofhfrettithrhheeiNiisrropnNNuqoronupnqaoqulsiaueflai,eilidftfihiPeceddlaMnPPelIlmaabBnneernII'esBBfiteeAnpnnerniftuoitirttiiyonn SJStatanarruttaiinrnygg, DD2aa0tt0ee9sshianhllbabeaesJiJanalngnuluealarrlyyu1m1,,p2200s0u09m9...)) (For this purpose, the Member's Annuity .5- -5- 22775500..00117744 NoNfoottSwweipittahhrssatttaainnoddniinnfggrotthmheeSffeoorrrveeiggcooeiinnsggh,a,liilnn btthehgeeieenvveeansnttottfhhaattthetthhfeeirMMsteemdmabybeoerrfitisshaaeSSpspeeecvcieifnfiiteehdd mEEommnptplhlooyyfeeoeel,,loppwaaiyynmmgeetnnhtte ooMnneaamccbcceooruu'nnstt (oSSaefecppcSaaorerrapadttaiiirnooagnntl,i,yo,naannifddfrpottamhhyeemSeffeniirrrtvssttiscpepiaansyyhtmmaheleenlntfbtoerssghhmiaonallfllasaiinnnoaccfnllunutdhudeeietfyaail,lrllsstuppcaadyhyaymmeaenonnnftutsstihtedydeessllheaaavyyleeelnddtbhessiimcnnaccoleecnuttthlhhaeetfoeAAdllnonbnwanusuiientitdygyotnSShtettaahrrMettiinAengngmnubDDieaatrtt'yees Starting Date (accordingly, Starting Date wwifiiptthhaooyuumtterrneetggaaisrrddintoothttehheefoddreemllaayoy))f..an annuity, such annuity shall be calculated based on the Annuity 333.3.. FFoorrmmooff PPaayymmeenntt. @(a) PlaLLnuuImmBppeneSSfuuitm m.p.ayEEaxbxclceeepptttoaacssaoocththheeMrrewwmiissbeeerpprrooorvviidFdoeedrdmiiennrtthMhiiessmSSbeececttriioounnnd33e.33r,, ttthhhiees NNPolonanqnqusuahlaailliflfiieebedd: ppP1 aalBaiieddnneiiInfniBaatessnaiiemnnfoggiltuleenptalluyumiamnbpplSeessuuctmtom,i,oednadecet3ht.ee1rrMmmiienimnntoeebddaerbbpyyroerccsooeFnnnovtvremevrratetliirnunM geg tltehhmueembmpmeorosnnututhnmhldlyyeursNNitnohogninsgqtuPhuaellaailanifpfipiselehiddacalPPlblllbaaenen: pIiinnuBttreeperroneessestetfistrraaoattfeme tooohunnsnt3c3o00inn--vyySeeeraeasrcritioUUonSn.,S..t3h.1TTerre"ienaaatspsoupurlrayiycpasrsbeeelcsceueurnriiitntttiiveeerasselsuaatennrddlautmRRe"PPp2s2hs00au00lml00 mu33esMMianngmmottrohhtereatlaaialvtipytepy.rl.aicgaeFFbooolerfr pttqhhuueearrptddoeaasiriellysyfiorrsrftaa.tttehepssirseooccnnoend33iv00ne--gryyseeitoaahnrre, UUtc.h.aSSe.l.e"naTTdrpareperaalsiscquuaurrabyyrletessriecncctuuterhrriaietttiseetssernaiidtnnes"eeifsffmfheemaccelttldimddauuetrraeiilnnnyggthtepthhreeiaovrcceaarall1e0egnneddtaoharerf Annuity Starting Date. quarter first preceding Annuity Starting Date. the calendar quarter that ends immediately prior to the (b) cOlOapsptstiiifooinneadallaAAsnnnCnuEuiOit,tyy LFFI,oorrmLm2s.s ffoLorr3 EEallniidggiibbTll7ee RwRehetotiisrreeeeesps.l.anMMneeedmmbibenercrssomwwehhoofssoeer jj2oo0bb08gerraawddaeesss wwmeoerrreee tt"chhAlaaansnnnsui$$fii22te3y3d00,,a00Esl00i00Cg,,iEboaOlxnei,dd LMooe1nnm,eebLeMM2re,se"mLm)b3,beerarwnedccrllaaeTss7ssiipffwiieeehrddoms1aeess dpjjoloabbtnonggerrmadaaddkeienecLLo33amooeonnnfeoTT-rStSi2RRm0e0((8ccoiolmwllleeeavccsottciimvvaeebolllryyee,, ae"elnAleenccattnniiuonouinntiytiinynE22li00ing00i88lbilctteuoo eeM ollfeeeccmatt btltooeurmrrseep"cc),eesiiuvvwmee.etrtheheeIiipfrreNaNromontniqitqmuteeauldlayiliftfoicieeleddmctPPaillkooanexni wI|aaBBsoeennnmeeefa-fitdiittmeiienninttihhrer2ee0vff0ooo8r,rcmambthooleeff rrofuxurilloeemossxuumSnneuddrietveyrircttiehnhiispslriSSieeouecrcttoiitofoonnab33el..cu33om((bbmp))insssghhuaamllelll.iaagppipIpblfylly.ea. ftoIiIrmfF aaeRnnleytEEilelriileggemiicebbtnllietoe,nMMehweimmsabsboeermrrahdddeiireeessNioonorrng2SSu0eeap0pla8air,rfaaitttheeedess Plan from Ploxi I I SBBeeernnveeifcfieitt shallbe paid inasingle lump sum pursuant to Section 3.3(a) prior to becoming eligible for Retirement, his or her Nonqualified shall be paid in a single lump sum pursuant to Section 3.3(a). @(i)) RetPPirrreeesssuuammnededdisFFnooorrtmm:l:egaSSliilnnyggllmeearLLriiiffeeedAAonnnnnuhiuitistyyo..r hIIefFraannAnAAnnunninutuiytityyStEEalrlitiggiiinbbglleeDaM Mteee,mmbtbheeerrn tRtthhheeeetinnrLoeoisrrfmmeoaaxlAildnffnoiousrrimnmtoyootfflfppeogaaryayml,mmleyeannmnttdoooxffhhriihiseisdsooorrornhhhheeerirrsNNNoooornnnqhqqueuauralaliAliiffnfiineeiddudiPtPyPlllaaaSnnntoI| x|BBteieBnnnegenefefiDifttiatstsehh,aaslhltllahlebblnee, tuuahnnelJleeoissLnssitfhheaeenAoodrrnnsNshhuoeeintsyeelpleeofccouttrsssmet0o, BwwaeannaiedifvsieehciitsthahreeoyrLLiiShffueeerrAAvnNinnvnououniritqtyAyunafnfloiuofriimmteydooffPfoplparaanmyy,mmIebenBenttepnaaaennifddditssieesnllheetacchlttless, faPfoloarJnmom,ionoftNfoanaanqduLLaiNilffieeofniAAsenpnndouniuuPtsiylte.yan.Be1EEnxexBcfecienecpepiftatirtyaasspSooauttyrhhmveeeirrvnwwotiirssseeAwnsisplpneleucciitbifyfeiiccfaamolllarlymyde,pprrbmooeovvniipdtdaeheidlddyiiinnntottthhheeea PM DMlaeoetxmmeib, beaNenrrodnooeqrrnudFaFilooinrrfgmimeedeorrnPM MtlheaeenmmbfIbierersBrt eccdnoaoeymmfimtmoefepnnactcyihimennggemnotoonsnntwhhhiiissliln oobwrrehhhimecerhradAAheninsnnmuuoioirttnyyhtheSSlryttaadrtettoiaintnghga occurs. Date oxid occurs. ending on the first day of the month in which his or her death Gi) (ii) EligPPirrbleeessuuMmmeeemddbeFFroorRremmt:i:resJJooaiinnndtt iaasnnlddegaSSlluuyrrvvmiiavvroorrrieLLdiioffene hAAinsnnonruuiithtyeyr .AnInIfufiaot~nay AAnnnnuuiittyy Eligible Member Retires ozid is legally married on his or her Annuity -5- -6- 22775500..00117755 SfStotaarrxmttoiinnfgg aDDaa5tte0e,,%tthhJeeonninhhtiissanoodrr hSheperrouNNsooenngqBueuanalelififiiiceeiddarPPyllaaSnnurII vBBievenonereffiAittnnssuhhaialtlllybbeefoppraamii,dduiinnnlettshhsee. hfATohenernmuoorirtosysfhhaeefo5eerl0lmee%ccttassJnodttioonstewwlaaeanicidtvvseeSepttihhoteehuesr55e00tB%h%eenJJLeooififiinnecttiaAaarnynnndduSiuSStpyrpvooiufuvossoreemr,ABBeneannnneefuifaiitclcyiiiaeafrrroyayrtmiSSv,uuerurvvnJioilvveionsotsrr Aaa.nnndd7n5uSS%ipptoyouourfssoeer1mBB0ee0nna%enef)dfiiccoisiraearlraeyycJtSSsouuirenrvvtitiihvvaeoonrrdr tAAhNnenonnunLuisitipftyeyouAffsoonerrmnmuBeiaatnvvyeaafiifillocaaribbmallree,yuuannnSddueaerrlrvtetithrhvneeoarEEtiRRvAnIeInPPuJoi((1t.iiny.et f.,o7rm5%avaoirla1bl0e0%un)deorrthaeJEoRinItPa(n3d0N%,on7s5p%oourse 1B00e%n)e.ficiary Survivor Annuity form available under the ERIP (50%, 75% or 100%). (c) MOOeppmttbiioeonnrasall cAAlnannsnsuiuifititeyydFFaoosrrmLmIss fofororrLCC2eerrwtthaaioinn iVVnecesustrtreeedddFFaoorrSmmepeearrraM Mteieommnbbeferrorsms.. SCCeerervrtitaaciienn pFFrooirorrmmeefror rM 22e00ce00em99ivbwweeeretsrrheeecilrppaeesNrrsomminfiiigtettutdeeaddlaisttfooLi1dmmaaoPkklreeaLnaa2| oowBnnehene-oe-ttfiiiimntmceeiunriirrrtrerhedeevvoaoLcciaaSfbbeellpeeAanrcenalluteeiiccotttnyiioofnnfrooiimrnnm 22So00re00r88vthicetteooJopecilrlneeitocctrtantttoodo r`mSeSapcpdoeoueiuvsseeeintBBheeen2nei0ref0fiN8icc,ioiaanrrtqyyhueanSSluuifrrtivvehiidevvooPFrrloaAArnnmnneInuruiBitteyyMneeffmfooibrtrmemirn'((5tsh00e%%NLoonoirfqreu77aA55l%%in)fn.)iu.cidtIyIFf Pfaaolttraiimnmmeeol1lyryBtechellneeeeccfJttioiitoionnntswwhaaanalsdsl mccfoooalmmdlmemoeweininnnccgee2a0tuu0app8ioo,nnnmtehntthehtneeofftfhiiraressgtteFddsoaairyyxmtyeoo-rfffiM vttehheee(m65ccb)aaellriee'nnsnddtahaNreroanmmnqonouunniatttlhhiyfiecfcdoooirinnmPccliieaddlneeennctttIedwwBi(eititnhhneflooiitreru snnoheeaxfxaltlt single lump sum). following attainment single lump sum). of age sixty-five (65) in the annuity form elected (in lieu of a @(d) Memb"TeTroot'taasll PPReeentnsisriioeonmnenVVtaalluuIneecGGoumueaarraiasnntcteaeele.c.ulaTTtooedtthhpeeuerexsxtuteeannnttt tththoaatt AaartM Miecelmembeb4re'ro'ssf ootrrheFFooErrmRmeIerPr (dM (PPeotoeremrttrffbmooielliinro'oesdI1I1Ru)),,nedthhiereeremooSrerecnsstthhieeoInnsschh4.o9aamlllleobbfeeistheeencntatEiilttRcllIueePdlda,ttteoaods aatphTTueorotsstauaalalmnePPteemnntoassiyiooAnnbretVVicaaallmeluueeen4dGGeouduafarrftaahrnneottmeeEeetRi((mIaaePss. tdoetteirmme)inifehdeunodresrhSeecRetitoinre4s.9anodfetlheectEsRpIaPy,maesntthein stahmeefomramyofbea aLmifeendAnenduifrtoym, Jtoiminet tuaaonnndddtiemrSSepp)SooeuiucfssteheieonBBoeern3nes.efh3fi(eicbci)RiaareroytyirreAA(sncnn)anunuioditftyeyltehoocirrtss JJPpoolaaiiynnn,tmt eaasnnnotddilnNNootnohgnne--SSafsopproomtuuhsseoeefTBaBoeteLnanelieffefiiPccAeiiananrsrnyyiuointAAynn,nVnuJauoiltiiutnyyet u`GfGenuuadaateuxrrraaenntStueeeneecdtwweioiritnthhwh3rrie.e3cssh(ppbee)cpctatoyt(rom0ett(nhchtee) NNiosoofnpnqrtquhouaivslaiildifPfeiildeacdndu,pPPollsnaaonntlhIIoeBnBegdeneneaeaftsfihitttohqqfueuaatlhliTieffoiiletcaasssltaassPaneaannuccsiaaitossanhhntrrVeeiffanuulnunadedn `tfaehameamtoouuuNrnonetntquttuhnhaaadltteiriifssiwnncohdotitcggPhrlreeapanaattyee|mrr tteBhhenaantnneifsttihhtpeeroeeatxxvccidteehessesds ooAufnfpntothuhnieettTTyhoeottaSadltleaaPPrtteehinnnssogiifooDnnthaeVVteaallaluuosevteeawwrniinttthhuhiertraeenstsoptpteeaiccnltt aottonof tpphaaeyymmNeenontntssqubbaeelffioofirreeedtthhPeeldadeneaattIhh Boofefnttheheefitllaassattt aatnnhnnueuitiAtaannntn,t.uity Staxting Date over the total of (e) is SSenuutbbistsiliedddiizzteeoddcl55e00c%t%aJJsoouiibnnsttidaainnzddedSSu5urr0vv%iivvJooorrinAAtnnannnudiutiStyuy.r.viIIvffoaarMMAenemnmubibeteryroourrndFFeoorrrmmSeeecrrtM Mioeenmmb3b.e1er0r oeiofsnfttetihhnteeltietEdEleRR1dI0IPPtao((saaeusslbesttchihtedeaisszasaeumdmbeeasnimmdnauiaziyyetdybbee5un0aad%mmeeernJnotddhieenidsdt PaffrlnroadomnmSittufiimrhmveeeivot(oor0rttsAiihmmeneen)e)u,l,eihhtcyetesuoortnrhdsseehh5ree0Ssshh%eaaclltJlliooiaannlltss3ooa.n1bbd0ee. a`eSSnnppntoioutuualesslede ltBBioefeneanetefisifmuieccbiisaaairnrdynyiuzieAAtdnynnanunbuienitntuyyeiftiypptuuurranssvduuaaeainrnltattbhlt(ioes0 PtSSoleeaccnsttuiiiocofnhnhe33M..oe33rm((bbbs))heeroorerlies((ccc)t)n,s,ottpphrrgeoorvve5iai0ddt%eeerddJtotthhhianaanttt atttnhhhdeee ataahnnnannntuuuaaatlllhellliiifffaeeentttinimimumaeeelaaannsnnununruiuvititiyytvyobbrbeenenaenenfefniifuttiitatavyvaaaviiabllaeialnbbaellbfeelietuunntdiodseerrsnuottchthhee gLLMriieffaeeetmeAArbnnentrnuhuiaitisntyyntoffhooterrmgmar,,nenaaautnneaddlr pptrhrloioafvvneiitdidtmeheedde. taafhnonarnnmutu.iittthyye bbeeannneenffuiitatlaavvsaauiirllvaaibbvlloeert(o0anssuunccuhhityMMeebmmebnbeeefrrituunnisddeenrrottthheegr55e00a%t%erJJootiihnnattnaanntddheSSuuarrnvvniivvuoaorlr Annuity lifetime Annuity form. .7. -7- 22775500..00117766  SpouDDseeeffiiBnneinitteiifooinncsis.a.ryFFooSrrurppvuuirrvppooorsseeAssnnoouffittthhyii,ss AAJrortitinicctlleean33d,, ttNhhoeenttseeprrmomussseLLiiffBeeenAAenfnninucuiiitatyry,y, JJSoouiirnntvtiaavnnoddr At`SAhpnneonnuuEuiRsitetIyyPB,aaennanddsetfTTihocoetitaaaslxlaymPPeeeSnnumssiraivooyinnvboVVeraalalAuumneeennGGuduiueatyadrr,aafnnJriotoceimneet stshhiaamnaleldll thhNoaaotvvineemsept.thhoeeussseaaxmnBeeemnmeeefaaincniiiannrggyss as under Survivor as under the ERIP, as the same may be amended from time to time. 33M.e44m. ber or PPFrroeer--mCeCorommMmmeeemnnbcceeermmedenintst DDaefetaeatrthhb..ecNNoomotitwwnigitthhvssettasatnnedddiinnuggndaaennyry tpphrreoovvEiisRsiiIooPnn iibnnuttthhpiirssioPPrllaatnno 1tho0istthhoeercchooenntrtrraAarnryyn,,uiiiffty3a M SSttaaerrmttiibnneggrDDoaartteeF,,ottrhhmee effroollMlloowewmiinnbggerrruudlleieessssshhaafaltllelraappbppelclyyo:ming vested under the ERIP but prior to his or her Annuity @(a) p"TuTorosttuhhaeenteexxttteeonnttAttthhiaacttlaae MM3emebmoefrb'etshr'esoorErRFFIooPrrmm(ePerorrM tMfeoemlmiboebreI'r),'ss aRRneedttiirriefemmteehnnett IMInneccmoobmmeeeriissoccraallFccuuollraamtteeedrd pSMMuuerermsvmubibaveenorrrt iiAtssonnmmuAaiartrxrytir"ieicedld.ed,e3hhtiiessormfooirrtnhhheeederrEinssRuutIrrhPvveiivvs(iiPannomggretfssmoppalooinuousnseeeI)r,sshhaaaaslnlllpdbrbeoievfeiendtnheietdiittluMelndedeadmearb"SeP"erPrcretoerireroetntiFrieo3rm.erm8meenonetfrt ttSMhheueemrvEbEieRRvIroIP'Pr,s,AaaNnssonnauaqmmiuteyaenl"nidddfeeeiddtcedrffmrrPoolimnmaendttiIimimBneeentethtofoeitttsi.imammee,Se, uwwmcihitathhnPnrrreeeerrsscppateesiccrpttermtotoeovnitttdhheeeSduM MruevneimdmvbeoebrrreS'rA'esnscntuooiriortnFFyoo3r.rs8mhmaeolerlrf bbMineeeSccmeoocnbntveviereor'rsntteeN3ddo3iinn)nqtt,ouo aaaalinpfpdirreeedpssaeePinndtltavnavsaaIlluouBefeelltnuhuemefmippft.irsssutuSmmud,ca,hyuussPoiinrfneggtrehttethhiereceaiminlnetteeennrrdteeassSrttuamarnnovddnivtmmohorortAfratoanllilnlittuoyywitiyffnaagccstthotoahrrlsesl iMnemSbeectri'osn o3r.3F(oar),mearndMepmaibdera'ssodfeaththe; first day of the calendax month following the Member's or Former Member's death; (b) calculatTTeood ttphhueerseeuxxattneetnntttotthhaAatrttaiaclM Meeem3mbeobfre'rt'ssheoorrERFFIooPrrmm(eePrrorM tMfeoemlmbioebreI'r),'ss aRRnedetitiifrreemtmheeennttMeIInmnccbooemmree oiirss FormerMember is not calculated pursuant to Former Member is not mmAaarrxrtiricieelded,, 3nnooobbfeentnheeeffiitEt sRshhIaaPlll be payable under (Portfolio I), and be payable under tthihfiissthPPellaannM,, eaamnnddber or (c) "TToo tthhee eexxtteenntt tthhaatt pursuant 10 Articl aa e MM4 eeommfbbteehrer's'oEosrRrIFFPoorr(mmPoeerrrtfM MoeleimmobebIrIe)'r,'ssaRRnedettiiirrfeemsmueecnnhtt IIMnneccomombmeeeriiss occraallFccuuollraamtteeedrd prMMeuecermesmiubvbaeeenrrtthddteioiecMssAeppmrrtrbiiicoeolrrre'ttos4o hhooiirsfs FtoohorrerhhmeEeerrrRAAIMnPnennmu(uibPtieotyyrrt'fSSosttlaaiNrorottininIqnIggu),aDDlaaiantftedei,,eidhhfiiPsssluooacrnrhhhIeM eBrreenBBmeeefnbnieeetfrfiaiccotiitraarrriFyyboustrsmhahabalelllerl rttNoeoocnPPeqooiurvratetlffooitlhfliiieooeM dIII ePaamlnnabniimemrImm'seBedeodinrieaaftFtieeotrssmaiinnmeggorllueeMnlltueummmipnpbseSsureu'mscm,tNi, ooddnenettq3eeu.rr1ammliiiifnnnieteeoddd abbPyylparccneoosnnIevvnBeterertntviieannlfggiutetthahetleturmmimboopunnttasthhbulllymye NuudassoyiinnngqgoufttahhtleeihfeiiienncdtteearrlPeeeslsnattdnaaarnnIddmBommeonnortetrhfatialticlitoatyyimnfcfoaiauccdntteotonrrtissnwiininSteSShceetcoicotrtinioonnn3ex.133t..33if((naoat)l)o..loawFFipoonrrrgestthtehihinsset ppMvuuearrlmppubooeseseerl,u,'mstthhpeedesffaiiurtrmsshtt sdshhaaayllllobbfeetthtrreeeaactteaedldenaassdatthrheemAAonnnnnuthuititcyyoiSSnttcaairrdttieinnnggt DDwaatitteeh.. or next following the Member's death 33.55. BBeenneefificciiaarryy. @(a) entitlJJeoodiitnnottdAAensnninugnintiataatannett.B.enAAefnnicAAinannrnuyuiitotyyrEEelclieiggiiivbbelleethMMeesemumrbvbeiervroroorriFnFocorormmmeeerrpoM Mrteeimmobnbeoerfr tsshhheaalJllloibbneet waeainnntddtihtlNNe3odoMnnt--oSSpdpoeosuuissgeenaBBteeennaeefBfiiceciniaaerrfyyiciAAanrnnynuuitotityyr,e, ciieffivsseeellteehccetteesdd,u,orvoninvoffororrimnmcssomffuuerrnnpiisoshrhteeiddonbbyyofaatnnhdde fled Joint filed with 3M. _3- 22775500.00117777 (b) Retir"TeTmooettnaatll PIPenencnsosiimooeninsVVcaaallluuceuel.a. teTTdoo pttuhhreesueeaxxnttteenntttotthAhraattticaaleMMe4emombfetbreh're'ss EoorrRIFFPoorr(mmPeoerrrtfMMoeleimombebIfre),'r'ssa pRMMaeeeytmmimrbeebenmertrenoootrrfIFFtnhoocerrommmreeeerrmaiMMsienecdmmaeblcrbeuerolraftssehhtdahalellpl TubboreetsuacelanintPttiteletneodsdiAottornotiddcVeleaessliiug4gennoaaotfteefthaatehBeBEeeNRnnoeIefnPfiqicuc(iaiPaalroriyyrftfittoeooldiorreePcclIIeea)iin,vveea| p3BBMeae.nynemeffieiNtntottaawtotttifrrtiibhtbhsuuetttaaabrbnelldemeinattgoiontdPPheoeorrrtftoffooorfleliitgohooeinIIIIgT,,oiitfwfailaatnnPyh,ye,rnesoosinnpoencfftooVrrtmamolssuaenffyuuormfnpiirtsshehhe-eecddNoombbnmyyqeunaaacnnlddeimfifefeilnldeetddPdlwewaainittthhhI bbb3eeMennnee.efffiiiNtctioapprtaawyyyiaadtbhbelssleetiagnuundanntiddnieegorrnthuSSeneecdctfetoiiroorenntgheo33i..En44Rg((cI,))Pwsaahibbtahoolvvlreee,a,spppttelhhycee.t tMMoIenemambnaleyblrevp'rer'ssen-tcoosorr,mFiFmnoorrtemhmneecerearmbMsMeeenenmtmcbedebeorea'rfta'shs btddheeeesnsEiieggRfnniIacatiPtaiisorohynnadloolerrsiaiigfpfnpsslauuytcciohhnddueenssidiggennraattthiieoonnERffaaIiiPllss,,shtthahelel raruupllpeelssy.ffooIrrnaaauultltooemmvaeatntiitccs,bbieennnetehffieicciaiaabrrsiieeenssceuunnoddfeerar the ERIP shall apply. 3r36e.6.a.son of illIInnnesccsaappoaraccimtietyny.t.alI1 foara MMpheeymsmbiebcarelr,, dFFisooarrbmmileeirrtyMM,eeimsmbibenerrthooerr oBBpeeinnneeifofiicnciiaoarfryythiisse uuPnnlddaeenrr Aaadmlleiegngaialsltddriiassatabobirliliiuttynyaboorlr,,e bbtyyo rapaettatatyeesannobddnlepporhrfooepprieleelrnrullenyysdsettrooorihhniimsssueoocnrrhtoahhlfeeorrtrhppepeerhfrssoyoolsnnliacoalawlliffndiignnisaawannabccyiiilasailltyamms,atatishttteeeirnrPssl,,tahnttehhAiisosdpmNNiinononiionqsnqutaurolaaitlfifoftiriheeesddhaPlPPllllaaandnnirAeI|cdtmmmaaiyynispptaaryaytottrhheeunbbaeebnneleeffiitttoss payable hereunder in such of the following ways as the Plan Administrator shall direct: @(a) DDiirreeccttllyy ttoo ssuucchh MMeemmbebrer,, FFoorrmmeerr MMeemmbbeerr oorr BBeenneeffiicciiaarryy;; (b) TToo tthhee lleeggaall rreepprreessenetnattaivteiovofef ssuucchh MMeemmbebre,r, FFoorrmmeerr MMeemmbbeerr oorr BBeenneeffiicciairayr;oyor;r (c) FoTTroomessroomMmeeemrrbeelelaarttiivovere Bbbeyynebbfllioocooiddarooyrr mmaarrrriiaaggee,, oorr ffrriieenndd,, ffoorr tthhee bbeenneeffiittooff ssuucchh MMeemmbebre,r, Former Member or Beneficiary. AtAhnnisyyNppoaanyyqummaeelnnitft immeadaddPeelappnuurr|ssuuaanntt ttoo tthhiiss SSeeccttiioonn sshhaallll bbee iinn ccoommpplleettee ddiisscchhaarrggee ooff tthhee oobblliiggaattiioonnththeerreeffoorr uunnddeerr this Nonqualified Plan I. AARRTTIICCLLEE 44 UUNNFFUUNNDDEEDD PPLLAANN g44e.11n.eral asseNtNsoo oTTfrruu3sMst.t.. TT3hhMee bbdeeonnceefsfiittnssolppaayiynaatbbellneed uutnnoddeecrrretthahtiisse NNaononynqqutuarlauilsiftfiieeiddn PPclloaannnneIIctssihhaoalnlll bwbeeitpphaaiitddhisssoollNeeollnyyquffrarolomimfitthehede gPfPluelaannnndesrIIa..iln NNaoesresidietetthhrseertroo33fpMMa3yMnns.oourrcha3annMbyyencoodfttiohhteeess.rr ene3mmoMptpl'liosonyoytbeeelnrridgssahhtataolillolcnhhraeauavvnteeedeaaarnnnyytyhooibstbrllNuiioggsntaaqttiiiunooannlcittofooincnmmdeaackPktlieeoannccoonIwntstirhrtiaihblbluuttthbiioieosnnmssNeroooerrnlqysseeuttathlaaiassftiiiedoddeef an unfunded and funds in order to an unfunded and uupnnassyeeccsuuurcreehddbpperrnooemmfiitisss.ee {0 pay money in 3M's obligation to pay money in ttuhhneedffeuurttuutrhreei.s. Nonqualified Plan I shall be merely that of 44p2e.2,r.mitted to mNNaookeCCoconontntrtrriiibbbuuutttiiiooonnnsss ubbnyydeM MreetmhmibsbeNerorsnsg.u. alMMiefemimbedbeerPrsslanaann|dd FFoorrmmeerr M Meemmbbeerrss sshhaallll nnoott bbee rreeqquuiirreedd oorr permitted to mo_ke contributions under this Nonqualified Plan I. 44t3o.r3.e.ceiveanUUynnsspeeaccyuumrreeenddtCsCrrfeerddoimittootrhrisSSttNaaottnuuqssu..alNiNfooieMMdeemPmlbaebnrer,I,eFFxoocerrmpmteerrasMMpeermmobvbieedrreodorrinBBeAenrnetefiifciclcieiaa3rryysshhaallll hhaavvee aannyy rriigghhtt to receive any payments from this Nonqualified Plan I except as provided in Article 3 -9- -9- 22775500.00117788 auabbnoodvevere..thiUUsnntNtioilnlqssuuuacclhhifppiaaeyydmmPeelnnatntssI aasrrheealrlreebcceeeiivnvoeeddg,,retthahteeerrriigtghhhattsnsotofhfeecraaiccghhhtsMMoefemmabneberur,n,sFFecoourrmrmeeedrrgMMeneeemmrbableercrreaadnniddtoBBreeonnfe3effiMicc.iiaarryy under this Nonqualified Plan I shall be no greater than the rights of an unsecured general creditor of 3M. AARRTTIICCLLEE 55 PPLLAANN AADDMMIINNIISSTTRRAATTIIOONN 5C5.o11m.mittee sPPpooewwcieefrrissedaahnneddreDiDnuu,ttitieehsesoPoflfattnhheeAdPPmlliaannnisAAtdrdammtionirinssihtsatrlralatatoodrmri..niSSsuutbbejrjeectcthtist(o0NttohhneequppaooiwwfeeirressodofPflttahhneeIiCCnoommapcepcneosnrasdatatiinoocnne wCAwidoitmtmhhinmiiittssistttrtteeaeertrmsomprssescaahinnaflddieldsshhhhaaalevllrelehihtnaah,evvteehpeoaalwlPllelarppnooawwAneeddrrmssdiinnsneecicrcseeterstsaisstoaaonrrryytsohtfoaoilnlcctaeaarrrdrprmyryeitoonuuittshtteettrhhpeetrhoipvpsirrosoNivvooiisnnsisiqoounonassflitoofhiffiesdssuuNPccolhhnagnuPPlaIlaalninin..faiccTTcdhhoeerPdlaaPPnnllaacnIne. AaaPlnnadddnm. ittonoisAddtrneeatytteeorrrmsmuisihcnnhaeelldaahlelllatveqqreumuetiehsnsetatiitopoinnoossnweaabrrryiiassniintdnghgediiisnnPclratetnhhteieoAndaamddtimominniiinnisstitestrtrrarpaattrtoeiirotonnt,sh,heaiilnpnlttreeorrbvppeirrseeittcoaaonttnisiocolnonufsaaithnnviedds NaaapnpopdpnllqiiccbuaaiattnliiidoofiinnnegdoofPfolnassnuuacclIhhl, pPipenelrafrsnsooor.nmnsas.t.AionTTnyhh,eeosPPrullcaarhnnecAAdodnedmctmeiirnlimeinsiistnatrnarayatittooonirrnmcmboaaynyysitsaahtddeeoonppcPttylassunuiccnhhAsppduoomcllhiiiccniimieessastrnaaannntodder pprsaroohnccadeelldd1uu0brreeesssu,,ccocchonorcrerrlxeeutccsettinvtaaennyyaasnddedehffeeecbctoitsnsr,,disssnuuhgpepppldolyyneeaamnnasylyl nipnnoeeflccoieecrssimsseaasar,rtyyioprnooor,rceddodeerussriirerresaac,bbollneedcettitooleerccmaaarirnrnryyyatiooinouuntctsottnhhoseeisppitneuutnrreppcrooypssreeeistsnoatofsifutocnhthshiisssmhNaNlaoolnnnnqbqeueuraadllaoiinfnfideiedditonPPlalsaaunnncohnII;;dieppsxrrcootrevviniimddtieendada,s,tohhhrooeywweoemvrvaeernsr,nh,eettrhhdaabtetaeaasmnneyyds upon uniform policies consistently applied to all persons in similar circumstances. policies, procedures, determinations or interpretations shall be done in a nondiscriminatory upon uniform policies consistently applied to all persons in similar circumstances. manner based 5w52i.2.t.h respecRRteectcooorrddass..MeTTmhhbeeerrre'eggsuullaaorrrllyyFkkoeepmptterrreeccooMrreddmssbooeffr'33sMM sHshhoaaullrllsbbeeoccfoonnSccellruuvssiiicvveee, aannCrddebdbiiintndeddiinnggSeuurppvooicnne,aallllCppoeevrressoronenssd wCmCaooitmtmhtpeeprnressenacsstopainetoticonatn,i,nteoNNdootannhueunM rneiiieoonmnnrbePPleeearntn'sissniigooonntro EEMFaaeormmrnimbinneeggrrsssM((a""neSSdmaallFbaaroeriirree'msdderPPHeeMonneussmriibsooennrosEEf,aarrSnneiirnnvggiscs'e", prior to 2016) and Credited Service, prior to 2016) and aaCllllovooetthrheeedrr matters contained therein relating to Members and Former Members. o5sta.3h..er personAAsddvavissisheeerrsos.. sTThhheeedPePlelaamnnsAAddedmsmiinriinasbitsltreraa1tt0oorradmmvaiaysyeaaappnppdooiiannststisssutuccshhuclleheggaAaldlmccioonuuinnsssteerlla,,taaoccrccowouiuntnthtaantnthtses,,adaamccittnuuiaarsritieerssataainnoddn ooobfetfhttefhhuriilsslpyeNpNrorsonoonqtnquesauclatailseifdfihiweceiddtoPPhr llsarhane1enI.d.seepTT(mhhe0eesacdPnPtellyasaninraacAAbtddlimeomintniointsaiastkdtrervanaittsbooeyrr ashsnhhidaamlllalosbbrsheeiseteernnsiutiitctnllheegddAoottdodomerfiealnilyiytshtccriaoonntnocrclreluluwsisiaiitvnvheceleltyyhuepuuoppanodo,nmn,a,innaayinnsddtardassvthhiiaoacllnlel oborer iifnunffloloyrrmmpaartotiitooennctffeuudrrnnwiisishthheeddrebbsyypesscuutccthho advisers any action advisers. taken by him or her in good faith in reliance upon, any advice h55e4.4.r. duties uPPnaadyyemmreetnnhtits ooNffoEEngxxuppaeleninsfseiesesd.. PTTlhhaene PPI.llaabnnutAAddamlmilnieinxsiptsertrnaastteoosrr ssihhnaacllullrnnroeotdt bbbeey pp3aaiiMdd fofoorrrttthhheee PppleearrnffooArrmdmmaainnnccieestoorfhfathioissr ooirnr chcooenrnnndeeucctttiiieoosnn with under with tththheeisaaddNmmioninniqsistutraraaltitfiiiooenndoofPfslsauuncchhI, PPblluaatnn asslhhlaalelllxbbpeeenppsaaeiisdd by 3M. incurred by 3M. by 3M or the Plan Administrator in a55gs.5a.i. nst anyIInnaddneedmmnanillittyycolfoaiftmthsh,ee PPlollsaasnnes,AAdddmmianmiiansgitsetrsraatatoonrrd.. l3i3aMMbilissthhiaaellsll iianrndidseeimmnngniifffyyrotthmhee aPPnllyoaxniaAAcdtdmmionriinsiftsurtlraautrtooerr ff(r0roomamctaoxniiddn ccaAoogdnmnaniinnenecsicttstitiooorxnnaitywwoiroittxhhifdottrhhaeealllaladdcmelmiaxniipmniesinsst,strreaalstotiisoo(snneinsoo,cffludttdhahiiimsnsgaNNgoroenesnqaqusauoananidlafibfiilleeieaddbaiPPtllilttaaionnersnI1,,eayoarsxniisddifnossgehhsaa)flllroiddmneecffueeronnrxddeiydaannaidcndt/oocrorornrrneefeiimacmitblbuiuuorrrensseetwottihhteehacPPtallnaaiynnn cAppleeadnnimdmd,iiinnnggislootosrrrsa.tttohhrrrdeeafaaomtteraengnaeeeldd,l ccelllxaiapiaimbemionliosrteryasannoy(yrinaaccecltuxtiidpooeinnnngosorerrpperriasoosccojeenueedaddibciilnineaggllaaaytrrtiiossdriinnengetgyettr'hshmeeirrfneeeefefrdsro)ommt,io,.nuucnnuhllareervessessd aarinnneddstuctlooottenthdhneeecfeetrxixoottmenennttwthtteihht.aahttPaaalnnnayyyn AcAldadmimimnii,nsitslortrasatst,oorr'd'ssambbaaaddgeff,aaiittlhhioaorbrgilrgitroyossssornneegeglxliipggeeennncsceee.. is judicially determined to have resulted from the Ploxi "10 -10- 22775500..00117799 5536.M6.. is desigSSnearetveidrceaosvofftPhiPreroeccoxeccseelssu.ss.ivIIennaaagnneynytlleefggoarallrppecrreooiccpeeteeoddfiisnneggrviininvcvooellvovfiinnpggrotthchiiessssNNodoninqrquecuatlaeildiffiiteeoddsPuPclahlnIPIla,atnt.nhhee SSeeccrreettaarryy ooff 3M is designated as the exclusive agent for receipt of service of process directed to such Plan. AARRTTIICCLLEE 66 AAM MEENNDDM MEENNTT AANNDD TTEERRMMIINNAATTIIOONN 66a.1m1e.ndments whRRoiigsghehttptrtooojeAAcmmteeednncddos..ts 33dMMo''snsotBBoeoaxarcrddeeodoff$DD2i5ir,ree0cc0tt0oor,rs0s,,00tthhieen CCaonoymmpecpanelsneasnatdtiaioornnyeCCaorom)mmamintyitttedeueelyoorra(u(ootnhnlolyyrizffooerrd osoafumffbfiiemccnieetdrrtmiooneffgn33tstMMhwe mmhaaomayseyendaapxmmrroeelejnnentdcdteooodrrr mcmmooodosditdisfififydcy,oa,tniiinnoontwwehthxooocllteeeheedoosrrh$aii2nrn5c,pph0aoa0rlrt0td,,,e0rtt0hsh0oiissfinNN3ooanMnngqyu(aucleaaixlilfcfeiieneepdddatrPPhallytaae,nna0rII) taaathtneyaaenndxyytuelttnyiimtmaeenuetwcwheioisttrshhiazooreuuytdt tstEouoxbcccmhooaimmntptgiplnely,gy 3thwwMie'ittshhaxBraaloeppanpprldlidimccaaeobbnfltleeDoirrcceomocrrtoppoodorrirsfaaitotceerattiooohrren sCstoeeoccmutuphrrieeittniisseehassatxilleaoahwwno,,lCdoooerrrmsmaaiopptfppil3lciiMcceaabbs(lhleeaexlclrreuuhpllateevsstehaoottffh,etttohehxeetchleNNuseeeixwwvteenYYatouotnrrhekkocreiSSstttsyooaccr0ykk mEmadaxavkckehereasaaenlmmgyeee,nandf3dfmM meecetn'sntttBshseowwarixiittgdhhhtorrseefossDfppeeiacrcenttyctttoooMrbbeseemnnobeerfefitritht,sse uuFCnnododrememrreprttehhnMiissseaPPmtlilbaoannne)).r.CooHHrmooBwmweeneivetvetfeeirecr,,isannhrooaylaalammhceqeanuvnidedrmmetehdenenuttneoodxrercrlmmuotsodhidivefiefpiircacoauavtttiiihosooinnroisnstyhhsaaoltlolfl such Plan adversely such Plan aiinnffoeeffcffteetcchttepprrriiigoohrrtttsooossfuuaccnhhyaacMcttiieoonmn..ber, Former Member or Beneficiary acquired under the provisions of 66t2h.2.r.ough its BTToeaerrrmdminoianftaDitioirnoc.nct.orW WshohirillteeheiittCeeoxxmpppeeecctntsssatttooiccooonnntCtiionnmuumeeittthhtiiesseNN)oonrnqeqsueuarlavileiffsiieetddhePPrlliaagnnhtI| tiionndtdeeefrifminniitinetaeltyl,ye,S33uMcMh ((Paalccattniinngag.t taaphnanryyyoutttihgimehmeebietsaannenBfddiotffasoorrrdalaaornnefyyaDdrryieeraaecsscaootnmon.re.sdoTTureenrtrdhmmeeirinnCatatohtieimoopnpnreooonvffsiasttthihiioiossnnsNNCooofnongmsquuaumclahiiltiftPfeiileeea)ddnrPeiPnsllaeaenrnfvfeIIesssthhthapalrelllironnirgoohtttotaattffohffeeetccetttremr33mMiM in'n'aa'sstteiooosbnbu.llciigghaatPtiilooannn ttaoot pay the benefits already earned under the provisions of such Plan in effect prior to the termination. AARRTTIICCLLEE 77 CCHHAANNGGEE IINN CCOONNTTRROOLL 377.M11,. this NonDDqiiussattrlriiibfbuuitctiidoonnPlFFaonolllIlooswwhaiinlnlggtCCehrhmaainnnggaeteeiinnanCCdoon3ntMrtroolshl..allUUpipomomnnedtthihaeetooeclccycuurrdrrieesntnrccieebuootfefaathCCehharannegmgaeeiiinnninCCgoonnatctrrcoorlluoeofdf cr3reaeMtstiihr,ertemphmaieesynnmtNtebbnoeetnnnsqeefuifianittlssiafmihheoeedurrenePuutlnnsaddneeeqrrIuttasoolhattthlholeettrreheeressmpppieerncecatstiitevevneetaMMnvdaeelmmu3beMebsreorsssf,h,asFFluloocrrhimmmaemecrrcerMMdueieeamdmtebrlbeyeertrsdisriseaatmnnreiddbntuBBteebenenentefhefifeicicitiraaserrmiiaeesassioniifninntlglhueumamdcppactrsseuuueommdf tctahlhaleeshoCCfhphaaatynnhmgegeeelniiuntnsmCCpiononstnarutmormlo.ol.uanmTTtoshhueeenqtCCusooammlwpitepolneltnshbaseaettipipooraennisdeCCnoodtmmimvrmciaelttuiitletyceseeotssofhhasatlulhllcehhhaaraevvcseecprettuhchteeeiddvdierissecctMrirreeeetmtmiibooeennrnttstoo,bddeeenFcceoiifrddimteesewwrahsheMeotetfhhmetebhrreessrodosmamteeeanooodrrf `BaBcelelnonemoefpiffaicnctiyhiaa,erriiweelshus,im, cpoohrr pswwuriomillvlliadbbmeee ofaaouprpnppttlslhiieeewddpialttlyoomwwbeaeanrrtddpaofiffduullallldyylirtppehacaeitilddaymaaotnnounnnuuttihitsteyytrhcceaootsnpntwetrrocaautcciltvtdsse oiiMstsshsueeuemredwdbiesbbreyys,haaaFnnvoerAAmb++eeerrrnaaMttpeeadedimdiibnnaessfruiuserrraanantncchdeee cCCohhmaannpggaeenyiin,n Control pursuant to this Nonqualified Plan | which provide for the payment of all the amounts Control pursuant to this Nonqualified Plan I. that would otherwise have been paid aYter the s77h2.2a.l.l be deeDDemefefiidnniitttoiioonhnavooeff CCohchacaunnrggreeediinnifCCotohnentrtreroolils. aFFoo"rrchppauunrrgppeoossieensstoohfef ttohhwiissneAArrrsttihiccillpee o77,f, aa3MCC,hh"aann"ggceehiainnngCCeoonnitntrrooellffooeffct33iMMve ccsohonantltrlrooblleooffde33eMMm.,"e"daantodn/ohraadvae""c/cohhcaacnonuggreerrieidnn itthfheethooewwrneneerirssshhaiipp"ocfohfaaangssuuebbsistntaanntthtiieaalloppwoornrtteiiroosnnhoiopff 3o3MMf 3'sMaa,ss"ssee"ttcssh""ange in effective RI -11- 22775500..00118800 saaesscdtdeieoffniinn4ee0dd9uu4nnoddfeetrrhTTerreeCaaossduuerryy RReegg.. sseeccttiioonn 11..440099AA--33((1i))((S5)) oorr ssuucchh ootthheerr rreegguullaattiioonn oorr gguuiiddaannccee iissssuueedd uunnddeerr section 409A of the Code. 77N3o.3.n.qualified PlDDaeentteeI,rrmmtihiennapatrtiieoosnnetooffvaPPlrurecessoeefnnttcaVVcahalluuMeeem.b. erEE'xsxc,ceeppcttacwwhhheFeroreermooettrhheeMrrwewmiissbeeeree'xxspprreaesnssdsllyycappcrrhoovvBieiddneeefddiciiinnartthyh'iisss NrraeesommsnauaqimiunnpiatinnliiggofniesaadccaccsPrrulutaeehnded ICr,roeetmtthipirereeemnpmsreeeannsttteinbobtenenvneCaeflfoiuittmessiohhtfeeerreeea,uucnnhdidnM eerrtesssmhhdaibalslelclrr'ebbst,eeioendda,eectthemerraFmmyoiirnnameedddeorpitiM nnoeaarmccccsboouerrcdrdh'asapnnuaccrneepdowwseieiat.tchhhssBuuccehhneaafccitctuuiaaarrriyiaa'lsl assumptions as the Compensation Committee, in its discretion, may adopt for such purpose. 77a4.m4.o.unt of alFlFeereeessasaaonnnddabElEexxppleeenngsaselessa.n. d33MaMccssohhuaanllltlippnaagyyftetooesceaaaccnhhd M Meexempmbeebnrsere,,sFFioonrrcmmuererrredM MeebmmybbeserurcaahnnddMeBBmeebnneeefrfi,icciiaaFrroyyrmtthehere M aMlamewemosmuubibnetetrrcoooofmrr maBBleelennnerceefeaifdisccoiiabnaryrayybtlheiienn lMseseeegmecabkkleiinnargng,dt1oF0aocoorcbbmotteuaariinnntMineoogrrmbeefenenferfoosrroccraeenBdehhniiesesfxioopcrreinahhsreeeyrrsforriiirgngshchtuutssrcrheuudnnpddueberryrpotthsshueiisscshAAisrM rtdtiiicecslmlemeibs7e7,s,r,euudnFnlbloeeyrssmsstheaaer clctaohowueurrstatumiaatossucbbnoeetmiinnmoggfessnappculuerrdiirooebuuaysssotoohnrreafbfrMrliievveoomtlloaobuxuses.ra.,nFd33oMMrfmisnsehahanralclM lilaaalellmsspoobleapprnaanyyoirnttooBg ceefanaeccechhfsicMMaieanermdmybeebfxoerprr,,esnFFusoocehrrsmmpeeiurnrrcpM MuoresermemesbdbeiesbrrydaainnssmdduciBBhseseneMnedeeffimbicbcyieiaatrrhry,ye tFFBheooenrremmfaeixercnrioaM uMrneyetommofbbfpeeararyllmoorerrenaBBtseesonnenpefaufibircclsieiuaarartynyatxiitnnaontccdhooinsnfninAneercacttniticicooilannel 7ww.pilitatShhnuncttihhnheegparrfeyeeccmeeeesiinppatttnodbbryyerxesspuiuecmcnhhbsuerMMsseeemimmnbecebnuertrr,r,sehdFaFlooblrrymmbeeesrrumcaMMhdeeeMmmnbeboemerlrbaetooerfr,r tBrthehealanannteefttdhihceeieaxeerpnyneddnosefoosfpf.attyhhmeeIeFrarneecctMsiippepiimeuenbnrtset'u'ssranttiatasxxtoaaaSbbtpllheeeicsyyiAeefaairrrteidcfflooeElllmlo7op.wwliiSonnyuggcehetthhpaeeanyttdamaxxsaeaubbnclltheeopryyaeeryaearimrmeiinbnntuwwroshhreiimccrhheeinttmthhbeesuhrraresellcceiimbppeeiineemtnnttaidsiiennmccnauuordrsselatttohheneer raatehccleccaootfeuiurdnnstttedooxafpfyeotthnhfeseetsM Mh.eeemmIsbfeebvaree'rnM'tssheSSmmeeobppnaeartrrahaittsiifooaonnlSlffporroweoimcmnifgiSSetedehrrevvEiiMcmceee,pm, lbppoeaayryye'memseeannSntetdpooasrrruacrrteheiiiompmnabbyfuurmrrosseemenmmtSeeenorntvrtircsseehh.iaamllllbunnorosttebmbeeenmmtaadidseempparrdiiooerr ottono the first day of the seventh month following the Member's Separation from Service. AARRTTIICCLLEE 88, M MIISSCCEELLLLAANNEEOOUUSS c88o.11nt. ractofeNNmpoolCCooyonmntetrrnaatccttbeooftfwEEemm epnpl3looMyymmaenendntta..nyTThhMiiessmNNbooennrgqouuarailfiFfioieerddmePPrllaaMnnemII bssehharal.lll nnoNotottbbheeinddgeeeeimmneetddhisttooPclcoaonnnsststihittauultlteebaae odcdroeeenetmtmoreaecdditntttooeorfgfgieeivrmveeepwlaaoinnytyyhmM MetenhemetmbbrbeeietrgrwhtooerreonFFfoo33rrMmMmeeraronM rMdeeaammnnbybeaefM rfrilttehihmaeetberreiigrgthohottdrtoioFscobbireepmlrrieeenrtteaaMiinonreeemdddbiiinnesrctt.hhhaeeNrgssoeeetrrhvvaiiinnccygee ooiMnffe33tmhMMbiseoorPrrlaaaonnnr asaFhffofiairilllimaaetbteere Member at any or to interfere Member at any ttwiimmieteh.. the right of 3M or an affiliate to discipline or discharge any Member or Former s88e2.l2.l., assign,NNootrAAanssssfsieigrg,nnmpmelneetdn.gte., NNanootiMMciepemambtebe,err,m,oFFrootrrgmmaegerer MMoreemomtbhbeeerrrowoirrseBBeeennneecffuiicmcibiaaerrryy,ssthhraalallnlshfheaarvv,eehaaynnpyyotrrhiigegchhtatttteoo occroommcmomuntvueetey,, tstbheehenelle,bbfeieantnsessfeiifgtisntus,,n,itdirfefaarnannsyfy,et,rhpp,iasapyylaeabdNblogleeneuq,unuanadndletierifrctiithpchiadissteNN, PomolnnaqonqurautglaailIigffieieeadodrerPPollatehanxenpIrI.r.wesiAAsslellllyeppnaacyydummemecelnbnatetrsrse,daatnrnaddn(t0sthfheeerbr,reighihygtpnsotohttnoohtaaeslascsllalitgppenaaayoybmrmleecenontntssvaenooydff bnbnoeeonnntletrirfaaainbtnsslsfefeerfuroaarnb,bldleeoe.rr. sNNutehbeijiistethhceterNr10tot,hhniitsqshuNeNaolodnienfqbiqueiaudsla,ilifcfPoiinecltaddrnaPPcltlaasInn, IlIairnanebooirlritaeainxneysyp,rpepesoonsrrglttyiaioognneodmfoeetfcnhlttahsereeodbbreennteteoforfitittsssboppefaayayananybbollneeMaehhsmseeibrrgeeenuurann,bddleeeFrrorsshhmaaanelldrll bM MtoeeemalmitbatbbeaelrcerhoomfreronrBBt,e.enonergfeiafscimuciibaiarsjeyrhy.cm.tetnNNot,ootohppreoorrodtttiieohobnentrsoo,lffecttgohhaneeltrbbpaeercnnotesecf,feiistltisssabppbiaaylyyitaaiabebnlsly,ee euucnrnnegdddaeeigrrteottmrhhiiesosnfNNtsoaonnnoyqqruuatMoaielrfimtfsibieeeoddrf,PPallnaaFynnorMIImsseehhmraallbllMebbere,emFbssuuoebbrrjmjeeocecrtrt tBrBoeeecnnaoeetgftfniaiiccctihiiaamorrnyye,,notfee,axxngccyeaeprpntrtiisgt1hho0tmttteohhneeatnyeoexxrtbteeeonnnttehtfeitrtthhalaettga33lMMprdodeceteteesrrsmmbiinnyeessantythhaacttreiidtt itwwoirillllofhhooannnooyrrMtthheeembccrereera,attFiiooonnr,,maaessrssiMiggnenmmmeebnnettr ooorrr recognition of any right to any benefit 12. -12- 22775500..00118811 ppifaayythaaabbtlleedouumnneddseetrrictthhreeelPPalltaainnonwwsiitothhrdrreeerssppsaeetccittsfttoioe-saa tM MheeemmrbebeqeurriororermFFeonotrrmsmeeorrfaM Meqemumablbeierfrieppduurrdssouumaaennstttttiooc aareddlooammteiosenststiiccorrrdeeellarattiwioiontnshsioonrrddteheerr meaning of section 414(p)(1)(A)of the Code. if that domestic relations order satisfies the requirements meaning of section 414(p)(1)(A) of the Code. of a qualified domestic relations order within the i88n3.3.a.ccordanGcGeoovwveiertrhnniitnnhgge lLLawaaswwo..ftTThhheeeSpptrraootvevoiissfiiooMnnissnonofefsttohhtiiass,NNeooxnncqqeupuatlail(iff0iietehddePPellxaatnnenIItssphhraalolllsmbbpeetiienndtteebrrypprrfeeettedeeddraaalnnddlaeewnnffoorrcceedd in accordance with the laws of the State of Minnesota, except to the extent preempted by federal law. d88e4.4c..lared illegSSaleeppoararrauabnblelneefoPPrrrcooevvaiibssliioeonnssfor. aIInnny tthhreeeaseeovvnee,nnttsuaacnnhyy ipplrrlooevgvaiilssiiitooynnooofrftuthhnieissnfNNoroocnnegaqubuailaliliiftfiyieeddshPaPllllaannnoI1tiissafrrfuuellceetdd toohrre ordrereemmcualanaiiernnneiifdnnoggrilcppleerragoobavvliliessoiipoorrnnoussvhniheesernirefoeoonorffchaeaanadndbdnleetthhviifessorrNNbooaennenqynquuairlaenilacifflsiioueedndde,dPPslhluaaecrnnhciIIni.sslhlheaaglllalbbiteeyiinnottreerruppnrreeettneefddoraacnneddabeeinnlfiftooyrrccseehddalaalss niiffsotsuucacfhhfeiicllltleegtghaaell or unenforceable provision had never been included herein. S13. -13- 22775500..00118822 MMeemmbebre:r: CCoommmmenencceemmeenntt DDaattee:: SSCCHHEEDDUULLEE I1 PPhhiill YYaatteess OOccttoobbeerr 11,,22001111 ((sscchheedduulleedd tteerrmmiinnaattiioonn ddaattee)) sSiI-l1 22775500..00118833 33MM NNOONNQQUUAALLIIFFIIEEDD PPEENNSSIIOONN PPLLAANN IITI ((AAmmeennddeedd aanndd RReessttaatteedd EEffffeeccttiivvee JJaannuuaarryy 11,, 22001166)) EExxhhiibbiitt 1100..3300 22775500..00118844 TTAABBLLEE OOFF CCOONNTTEENNTTSS PPaaggee IINNTTRROODDUUCCTTIIOONN 1 1 AARRTTIICCLLEEL.1. DDEEFFIINNIITTIIOONNSS 2 2 11112..1.. ACAnonndnueuiittyy SSttaarrttiinngg DDaattee 1111.4..323.... CCCDiooosmdmcpehepanernsgaseattifiooornnCCCaouomsmmemitiittceee 11L1S7..45.... DEEMRReisImIcPPbhearrge for Cause 111188..78.... NMNNoooennnmqgquubuaaellariilifffiiieeeddd PPPlllaaannn I|If 111181..88.1... NNNPloooannnngqquAuuadlaamilliiifffniiiieeesdddtrPPPallltaaaonnnrIIIfII BBeenneeffiitt 111.121.. PRelatnirAemdemnti;niRsetrtaitroer 1111...11114323... RSSSpeeeepptcaiarirrefaamitteiieodonnnEt;fmfrRrpoolemmotiyrSSeeeeerrvviiccee 115.1.14. 1.15. Supplemental Plan Specified Employee Supplemental Plan AARRTTIICCLLEE2.2. EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN 4 22212.1... EEPlaliriggtiiibbciiillpiiattytyion 23.2.2. 2.3. Forfeiture Participation Forfeiture AARRTTIICCLLEES.3. AAMMOOUUNNTT AANNDD DDIISSTTRRIIBBUUTTIIOONN OOFF BBEENNEEFFIITTSS 4 333.2.11... TAAdiddmdieittiiooofnnaPallayM Mmooennntththllyy BBeenneefifitt 3333.3..423.... TFFProoimerrmmCeoooofmffmPPPeaaanyyycmmmeeeemnnntettnt Death 333356..45.... PBBInerecnenaeepCfafioicccmiiitaamyrryyencement Death 3.6. Incapacity AARRTTIICCLLEE4.4. UUNNFFUUNNDDEEDD PPLLAANN 1100 44412.1... NNNoooTTCroruunsstttributiobnys Members 43.4.2. 4.3. NUUnonsseCeccouunrrteerdidbuCCrtrieoeddniisttoobrrySSMttaatetuumssbers ARTICLES. PLAN ADMINISTRATION 10 ARTICLE 5. PLAN ADMINISTRATION 10 -i- 22775500..00118855 555.2.11... CPPlooawwieemrrsss PaarnnoddcDeDduuuttirieeess oofftthhee PPllaann AAddmminiinsisttrraattoorr 55553..423... RCRAdeelvacciioomsrreddsrsssProcedure 5555.5..645.... APPInaddyvaemimsneeyinrtstoymoffoEfEexxtphpenenesnPesltsea.sn Administrator 5557..67... ISSnedreevmicrneoivotfyfPiPorrfooctccheeeesssPs lan Administrator AARRTTIICCLLEEG.6. AAMEMNDE MENNTAANDNDDTMTEERRE MMIINNNAATTIT IOONN 122 666.2.11... TRReirgmihitnttgaootAAihommneetnndd 6.2. Termination AARRTTIICCLLEE7.7. CCHHAANNGGEE IINN CCOONNTTRROOLL 1133 777.2.11... DDDieisfstitrnriiibbtuuittoiinooonnfFFCoohlllaloonwwgiienngginCCChhoaannntgrgoeeliinn CCoonnttrrooll 777734..23.... FDDDeeeeetftseeinarrmmintiidionnanaEttxoiiopofennCnoohsffeansPPgrreeessieennnttCVVoanaltluruoeel 7.4. Fees and Expenses AARRTTIICCLLEES.8. MMIISSCCEELLLLAANNEEOOUUSS 1144 888.2.11... NNNoooACCsoosnnittgrranaccmtteoonftf EEmmppllooyymmeenntt 888843..23.... NGGScooopvvaAeermrsansibiilngnegngPmLrLoaeavnwwitsions 8.4. Separable Provisions SSCCHHEEDDUULLEE I| sStI-l1 -ii- 22775500..00118866 33MM NNOONNQQUUAALLIIFFIIEEDD PPEENNSSIIOONN PPLLAANN IITI IINNTTRROODDUUCCTTIIOONN PtPouurprprpooosvsieed::e TTrhehteeirppeuumrreppnootssbeeeonoefffttihhtiisss 1330MMa NsNeoolnenqcqutauglairlifofiuieepddoPPfeepnnassriitooinnciPPplalaantnnsIIaIfn((dhheetrrheeeiiinnraaffbtteeenrreftthihceiea"rN"iNeoosnngqiunuaaltlhiieffiie3eddMPPlElaamnnplI1I1o"y))eiiess tRRtoheeetptiirrrloeeivmmmiiedetnenatttrieIIontnnicsrcoeommimmeeepnoPPtsllbaaennedn((ehhbfeyeitrrseeisitnneoacaftfatiteeosrrnelttehh4cee0t1""g(EEraoRR)uI1IpPP7"")o))fowwpfh~hixitccthihhecispsCuuacconhhtdseEEaRRnaIdInPPdthiisessieuurcnntbaaiebbonlnleeef4ittco0oi2ap(prrrgioeo)svviioiddnfee tsthsohoelelee3llMCyyodbbEeee.mccaapuulssoTeeyhieooseff NtNNhoooennnqqquluiuamalaliilftifafiiiteeieodddnPsPPelnliaasmnnipoonIIIIsPeldiisasnbnny|oott seiicnntttieoennnddee4dd01tt(ooa)(dd1uu7pp)lliiccoaaftteethetthheeCorrdeetetiirreaemnmdeennttsecbbteeinoneneffiitt4ss02pp(grroo)vviioddfeeddtheuunnCddeeorrdet.thhee 3MThis 3M Nonqualified Pension Plan I. HnHiaissmtteoodrryyt::he33SMMupooprrliieggmiinneaanlltllayylaaPddeoonppsttieeoddnaaPnnlooannnqquouafallMiififiinecnddesppoeetnnassiioMonninppillnaagnn aoonnndNNMooavvneuemfmabbceteru7r7r,,in11g9977C88.o.mTTphhaiinssyoorr(iighgeiinnraealilnppallfaatnnerwwtaahsse "n"aSSdaoumuppptepipdlolneet.mmheeenntSEtfauaflplepctlPePilmvlaaenen"n"J)t).aa.nluaPreynTTshhi1,eoen19PSS9ulu3app,nppltoleehfmmeeMenSntiuntapanlplelseoPmPtellaaannnM tailnwwiPanalsgsananaawdmmaeseMnndadaenemdudefnadcffetrruodormimnagndttCiimromeeemstpatattoeondy att(isihmmeteerweoinaaasffefteetperrarrathiittteess "paplNdlaaoonnnpssq:t:uioanl.itthhfeeiEefd""fNNePocoentninqvsqueiauolaJnilaifnfPiiulec~addxnyIPP1oee1n,nfss1iiMo9oin9nn3n,PPeltlshaaonentaSI| uMopoifpfnlieM MnmiginenannnneteadsslooMtPtaaalnaunM MfiawincnaitisnnugrgaimnaagennnddCdoeM mMdpaaanannunyufd"afa.crctetusurtTraiihtnneeggdprCaCosoovmtmiwsppiaooannnsysye""poafraatannhtddee `r"reNaesmstoteanantteqdemuemdaeelnniffttrisseodmssuuPtppeieenmrrsessieoetddoneetdPdilmaaaenllllsIIippnrorciifeooMrrthivevnieenrrressaisidoooonntpasstiMooonffi.nittnhhNgeeonaSSgnuuudpapplMplilfeeaimmneeuednfntaPtacalltlaunrPiPnlIlaagnpn.r.CoovimSSdupeucascnhhsyu"rrp.eepssltTteaahmtteeeemnmpteerannolttvssibseihhnoaaenfvvsieetosbbfteethhecaennt aasarrmueepepnslsttderrmeiiccedttnllftyyraoliminn rteeeitmxxiccereeesstmssoentootifmf besseeenscceitftniiiocotensn,t4h4b11eu55itr aooedfffofeptthchttieeoinvCCe.oodJdNeae.on.unaqrNuNyoaonlniqf1q,uieuadla2i0liPf0fil9iaee,ndd sIPPuplclaarhonnvpiIIldIIaenspprrswoouavvpisidpdleeaeddmmeeccnenerdrttateaaldiinnbetnaaodeddfdpiiritttsoiiovotinnhadaalelt 4sssuuu0p2ppp(pplglleee)ommmfeeentnnthttaaaelll Crrroeeedttteiiir.rreeemmmeeenntn.tt bbbeeennneefefifiitttsss,tthhbaauttt aarereeffesscttrrtiiicvcttlelyy' Jaiinnn ueeaxxrcyceess1ss, oo2ff00lli9imm,iittsaauttciiohonnsspluuannnddeewrrassseecc~ttxiiononnend44e00d11((atao))((11p77r))ovaaidnnded 402(g) of the Code. EERfeffsfetecactttiievvmeeentJJ"aa)nn,uuaarrTyyhe11, ,pr22o00v00i9s9,i,onttshhiissofNNtohonenqqu2au0la0il9iffiieReeddstPPalltaaennmenIIIlt wwsuaapsseraasggeaadiiennd aa~lmxl nepenrndidoeerddveaarnnsddionrresessottaaftteetddhe ((Pttlhhaeen. "2"2T00h00e99 Rpuersptaotseemoefntt"h)e. 20T0h9e Rpersotvaitseiomnenstowfatshetw2o0fo0l9d:Re(s1t)at1e0mleinmittsuthpeerssuepdpeldemaelnltpalriorretvierresmieonnts boenfetfhietsPhleanrc. unTdheer pttCoooudrbbepee,onnesefeafiinottdssf ttt(hhh2eaa)tt2taa0orr0ee9bssrttRirrniieccgstttllatyyhteeiimnnPeeelnxxatccneewssiassnstoootffwcttohohfmeeoplllldiimi:maiintt(a1catt)eiiotoonwnissltiuumhnnidsdteeetrchrteissoeesnccuttpii4opo0nnle944mA00e11no((ftaaa))lt((1h1ree77t))iCraaeonnmdddeensseebtcycbtteiiono"nnedfe44i-t00sl2i2(hn(kgei))rnegoou"ffndttthehheeer tpCpahaoyyedmmede,eanntatetnppdsrerooc(vtv2ii)iossniitooo4nnss0b9ruuiAnnngddweeartrhsttehhaiidsPsdlPPaellndaanntinofftrtorohomemcoCttmohhdeepelpp)iaaanyytchmmereeonnuwtgtihptphrrDooevsvcieissceiitmoioobnnnessruu43nn01dd9,eeArr20ttoh0hfee8,tEEhtRRehIIePPC.P.oldaenFFrrcoboomynmOt"icOdntceuot-eobldibenetrkor3in3o,gp, e"22ra00tt00he44e. ww(Dtiehitptehhadr""atllitmineenkknseeteddc""toiopfpnaayTy4rmm0eeae9nsnAtutrppwyrraoosvviniiassdiicodoonnenssdneiitncnotaaitcchoccenooCrrwddoiaadtnnhecc)eettwhhweiriotthhuimgssphppleeeDccimieaeaclnletttmraraatbnniessoirintti3ioo1onn,frr2usu0lel0ecs8st,iiiostsnhssueue4ePdd0l9abbnyAy ctthoohefentIIitRnRhuSeSeaadCnnotdddoett.hoheepeUUr.Fa.SoSt.er. sDaaevvecootpiiiaddoraantnnm4cceee0n9ootAffooddffoouuTbtbhtrte,e,aCttshohueedrye2200(i00nr99c.cRRoeensdsntetaefatcetertemirmoeeendnntctwowwimtaaphssentiihsnneatteteninidmodeenpddlcetrtomoedeaainpptptepaldlytyiuobbnnoodtetohhrftttoohseeddceePtflfieoearrnnrreew4ddh0icc9cooAhmmprpeoeenflnsastathaetdetiiooanCnl ossoduurebb.jijneeccptFtarotttoor tsPtoeolcasstneieorrwvnvhiic4iceec0ssh9AppreeeorrlfaffototrehrmsemeeeCnddtoioodrnneelyo(orri(.e0aa.ff,tsteeedrrrevJJfiaeacnnreruuseaadrpryyecrof11m,,orp22me00en00d5s5)a)o,t,inoaanssorcwwrebeeledlllfiotaaerssde dduDeenfefdeecrererrrmeetdbdheeccrooPmm3lap1pne,enwn2ss0aha0titc4iihoonntrheaccltrareetieddsdiitteeealdidllgiuuobnnrlddeienertropttahbhreeet "P"aggnlrardaannnFdwdfofahratimthcheeherrreredMed"lea"mftfebrrsoeomrmesntaaipp(rpeapllnlyidiccaattotthiieoosinnerroovBffiecnsseeeesfccittpciioieoanrnfroi44er00ms99)AeAdwoohoffontthhcoeeorCCmbomodedeefeo.n.rceeHHdDoowewpecaevevyemmerbre,,entrtthhoe3ef1bbt,eehn2nee0efif0iri4ttssNtppohaanayyqtauaibabsllleeieflttiiogoeidMMbeleePmmlbtaeobnresbrI.seI BaaBtenendntehefFefiiotttripmpmrreieioororrM ft0otehmJJeaaibnnreuubaraserrnyye(af11in,,td22c00tho00em99imrwweiBnillcel nebbemeefeiddcneeitattereiarremnmsdi)innwweeiddhloiinnncoaaotccmccboomerrdedaanadnncjcecuedestwwepidaittyhhomrtthehreneetcpporormoofvpvituihsstiieeooidrnnssNtooooffnrettqhfhuleeeaclPPtilflaiatennhdisiinnPoleeraffnffaeenccIytIt sasuut bbtshseeeqqutuiemennett a~oxmfnetehnneddimrmebennettnoeofrritrreecssottamattememmeeennnctteoomffettnhhtiissaNNnodonnqwquiaulllailniffoiieteddbePPllaaadnnjuI11I.s.ted or recomputed to reflect this or any mm -1- 22775500..00118877 EtEhffeffee2cc0tt:0: 9TTRhheisisstaNNtoeomnneqqnutua,alliitffhiieeddbePPnlleaafnnitIIs1I piiassyhhaeebrrleeebbytyo aaMmmeeemnnbddeeerdds aaannndddrrFeeosstrtaamtteeedrd Meeffeffmeeccbtteiivrvees JJ(aaannnuudaa_rtryhyei1r1,, B22e00n11e66f.i. ciaSSriiimmsii)llaawrrhttooo ctcahocoecmmo2mmr0ed0enan9cncceReeddewsppitataathyyemmmteheenenntttpo,rfoothftveihthsebieieoirrnnseNNfooiofntsnqtquphauaelayilPaiflfbiailecnedditonPPlleMaafnfneemcIIItIbBaBeterenstncheafefniittdtippFmrreoiioroomfrr etttoroheMJJiaarennbmuueaanbrrceyyfrist11,,(ca22no00dm11mt66heenwwiicrillelBlmbbeeenenedtdfeietcatieenarrdrmmiewiisinn)leelwddnhoiinotn baPbleecacaanoddrjIdj.uuassnttceeedd woorritrrheectchooemmpppuruottveeiddsittooonrrseefofllfeeccthttetthhPiisslaoonrrinaanneyyffsseuucbbtssaeetqqtuuheeenntttimaammeeeonnfddtmmheeeninrttbooerrnerrefeisstttacatoteemmmmeennettonofctfehmthieissntNNoaonnnqdquauwlaiillilffinieeoddt Plan II. AARRTTIICCLLEE 11 DDEEFFIINNIITTIIOONNSS dEEoxxccceuepmptet nwwthheserhreealssppheecaciviffeiicctaalhllelyymddeeaeffniiinnneegddsiinnscttthhiifssorNNtohonngiqnuuatlahileiffiEieeRddIPPPllapannlaIInI,,dttohhceeumwweoonrtrdd.ss aaEnnxddceppphhtrraafssoeerss dwwehfhiiinccihhtiaaoppnpspeeaaanrrdiinnottthhheiisrs scdsuouobnbcsssutttmaranunetctniitvtvieeosnhppararloonlvvdhiisasaiidvoomennisnstihooseftfrmttahhteiiiassonNNnionoonfgnqsqutuahsielastilifNffiooieenrdtdqhuPPailllnaainntfhiIeIeII,,dEttPRhhleeIaPntteepr1r.mlmassn aadnnoddcuccmoonneddniittt.iiooEnnssxcooeffpttthhfeeorEERRdIeIfPPinssihhtiaaolllnl sggooavvneedrrnnottthhheeer construction and administration of this Nonqualified Plan II. u11n.1d.er SectiAAonnnnn3u.ui2.ittyy SSttaarrttiinngg DDaattee.. ""AAnnnnuuitityy SSttaarrttiinngg DDaatete"" mmeeaannss tthhee bbeenneeffiitt ssttaarrttiinnggddaatteeaass ddeetteerrmmiinneedd under Section 3.2. 112.2.. Code. "Code" means the Intermal Revenue Code of 1986, as amended. Code. "Code" means the Internal Revenue Code of 1986, as amended. o11f3.3.t.he BoarCCdooommfpDepinersneascattotiiroosnnofCCo3omMmm,imtittteeee.. ""CCoommppeennssaattiioonn CCoommmmitittteeee" mmeeaannss tthhee CCoommpepnesnasattiioonn CCoommmmitittteeee of the Board of Directors of 3M. o11f4.4..an emplDoDyiiessecc'hhsaarrggeeemffpoolrroCCyamaueusnsete.fo"rD"Dirisescachshaoarrnggsee offoforrdCCiasauhusosneee""stooyrr,"D"eDimissbcchehazarreggmeeeddnfftoorr,CCacaouunssveei'"ctmmieoeanannsosftthhaee ttceerrrimmmiiennaaottriioonna mo1mif0iss3addnMeemmaeenemaadnnpiooltorsrybiieunnesvv'isoonllevvesiimsnn,ggpalmomoydormerataelelnrtttmuuirrfpnpoieirttduurddieenea,,stohwweinilslsllffououlllf dmmdiisiisscschrcoeootnnnidedousunctocyttf,,, ootehrmreppbCeeeorrzssmzooplnneeamanllseammntiti,issoccconoonnCnddovuumcicctmttiiowwtnhehieicoc.hhf iaiss cddereittmrriiemmeeonntrtaalal to 3M and its business, as determined in the sole discretion of the Compensation Committee. 115.5.. EERRIPIP. . ""EERRIIPP"" mmeeaannss tthhee 33MM EEmmppllooyyeeee RReettiirreemmeenntt IInnccoommee PPllaann.. p11a.66y.ments undeFFroorrtmhmeeerprroM Mveiesmmibonbeserorf.._th""iFFsooNrrommneeqrruaM MleiefmmibebederrP""lammneea1a1nn,ssoraaa ffofoorrmrmmeeerrreeemmmpppllloooyyyeeeeee wwwhhhooosiiess erremeccpeeliiovvyiinmnggenbbteennweeifftiihtt 3p3NaoMMnyqmuhheaaanlssitsfttieueerrndmmdiPiennlraaatttnheeeddI1pBffroeoornrveifsaaiinnotyynusnrreodeaeafssrtoohtnnihseooNpttrhoheoenrvrqiusttaihhloaainnfnsioeDdDfiiPsstcclhahihnsaaxrNIggIo,eenoqfrfuooaarriffoCCiaraemuudseseerPleaaamnnnpdd1l.owwyheheoo wiishs oeesnnettiiettmlleedpdlottoyomaaenvvteewssttieetdhd Nonqualified Plan II Benefit under the provisions of this Nonqualified Plan II. a11n7.7..additionaM MleemNmobnebqrue.arl.if""iMMeedemmPblbeaenrr""11mmBeeeaannenfssitaannuneedmmepprllootyhyeeeeeprwwohvhioosiiiossnaas ppoaafrrtttiihcicsiippNaaonnnttqiiunnaltthihefeiEEcRdRIIPPPlaaannnddI. wwhhoo iiss aaccccrruuiinngg an additional Nonqualified Plan II Benefit under the provisions of this Nonqualified Plan II. 118.8.. NNoonnqquualailiffiieedd PPllaann II. . ""NNoonnqquaulailiffiiecdd PPllaann II"" mmeeaannss tthhee 33MM NNoonnqquualailiffiieedd PPeennssiioonn PPllaanInI.. 119.9.. NNoonnqquualailiffiieedd PPllaann IIfI. "N"Noonngquuaalliiffiieedd PPllaann IIII"" mmeeaannss tthhee 33MM NNoonngquaulailiffiieedd PPeennssiioonn PPllaann 1II. 2-2- 22775500..00118888 t11h1.i10s0..Plan deNNsoconrnqiqubuaedlailiifnfiieSceddctPPilloaannn 3I1.1I. BBeenenfeifti.t. ""NNoonnqquaulailiffiiecdd PPllaann IIfI BBeenneeffiitt"" mmeeaannss tthhee bbeenneeffiitt ppaayyaabbllee uunnddeerr this Plan described in Section 3.1. C1Li o.1m1p.ensation anPPdllaaBnneneAAfdidtmmsinoinrsithsirtsraaottroorhrer. su""cPPclelaasnnsorAAddmminiinsitstrraattoorr"" means means the the 3M 3M Vice Vice President, President, Global Global Compensation and Benefits or his or her successor. a11t.11a22i.ned agReReefttiiyrreemmfieevnnett;(;5R3Re)etaitrinred.e.co""mRRpeetltiairrteedmmefnetnv"te"(mm5e)eaaennassrsaa SSoefeppaa"rrCaartteiidooinntefrdrooSmmervSSeiercvreiv"ic(easaaffdteeerfrittnhheeedM MuenedmmebrbeetrrhehhaaEssRIbbPoo)tth,h ora Separation from Service aftr the Member has atained age sixty attained age fifty five (55) and completed five (5)years of "Credited or a Separation from Service after the Member has attained age sixty ive(63) Service" five(65). (as defined under the ERIP), e1Lm.1sp3l.oyment SSreeelppaatariraoatntsiiohoinnp ffwrriootmhm 3SSeMerrvviaiccneed ..all""SSaeefppfaalriraattteiisoonnfoffrrroomamnySSeerrrevvaiisccoeen"" ommteehaeanrnssthaaansseevtvheeerraanMncceeembooefrfaa'sMMedememabtebhre'ro'ssr Discharge for Cause employment relationship Discharge for Cause. with 3M and all affiliates for any reason other than the Member's death or TW Wrheheaetsthuhereyrr raaegS.Seepspaearcratatitoiiononn14ffr0ro9omAm-1SS(eehrr)vvi(iccieee.hhaass woohccecctuurhrrereerddtiihss fddaeecttteesrrmamininndeeddciruucnnuddmeesrrtassneecccettsiiooninnd44i00ca99tAAe toohfafttththeheeCCeoomddpeeloyaanneddr Tatanhnraddetatttshhhueeeryeevmmerpeplgllo.ooyyfseeebeecotirnroeeanaassfoo1innd.4aeab0bsl9lyeyAraa-vnlni(tthisicc)iitpp(haaitt.eeecdd.m, ptthlhwaaotthsennetooehewffuruorruttlhhlheeedrrfpasseceerrtrsfvvoiicacrenemssdawwfcotiorurucllusddmucbbsheetadppnaeectrreeffsoo(rirmwnmhdeeieddctaaathffetteaeetrrrhsaaatcncetehrertetmaapiienlnmoddypaaeltoeteyoooerrrr stiihnenarddvteeiptpcheeeennsddlpeeevnentretlfccoooornfnmtbterroadancct(atoowrfhri))edtwwehooesuerularlvddsicppaeeensrrmmtehamanepneleenmnotsltplyeyleoddyoeeerccerrneewaasosieeunldt0doeppnneeoonrdfmmoeornomrtreecaotthfnhtataernnrasc22ut00oc%r%h)dooofaftvttehehree(awhvaehveeeritrahmagemgreeedalliseeavvateenellleooyfmbfppborloenoncyaaeedeffiiidnodeger tspthehriirorvrvtyyiic-dsesisixnxgpe((sr33ef66ro)v)rimcmmeeosodnntt(tohhwthhppeeeeterrhiimeooprddlaos((yooaerrnrttehlhmeeesspffluutollhlylaenppeee3ror6iiroomaddonnootifnfhdssse)eep.rrevvniiccdeeessntttoocottnhhteeraceetmmoprpl)loooyyveeerrr if the employe the immediately if the employee has been preceding has been providing services to the employer less than 36 months)). oSSteehppeaarrraabttoiiononna fffrriodomem lSSeeearrvvveiiccoeef ssahhbaasllellnnncooett ibbfeetddheeeeepmmeereiddodtooodococcccsuurnrowwthhieilxleecetthhede secimmppl(l6oo)syeemeeoniistshoosnn ommri,illiiittaarrlyyolnleegaa,vvee,5, 0ssiilccokknllgeeaaavveeotohrer ecoeommtnhptpelalrocobtyy.oeesneaFrrofeerittdaateiinhnlssseapaavurerrpiiooggsfhhetta,battsooelnrerceaeeevememifppistllhoobeyyommnpeaeenrniitotddewwidoittolhheys33inMfMo, taoonerrdxcsaaeonnedlaaoffsnffigiixlliiaa(as6tt,ee)tmhuurnnodedneetirhrssaaronner,aaasippfoppnllloaiibncclaagbbeellreee,xspssoettacaltttouuantttegeioaoonsrrhtabhbytye tctwhhoieeennteertammycp-tpnl.lioonFyyeeoeere(2th9ww)iisillmllpourenerttptuhuorsmnpee,rttoaiooldppeeeaorvrfffeooarirbsmmsbeonssneecrraevvfiiwcicideelessl obffneoolrrysu33ibM fMs,tainootrudrteasadonn lfaoaoffrnffigislliuiaaactstehe,..t6hemNNroeoonwtitwwsihaittphhresesrtataiasonondddniiainnbfggltehttehehxeelpefafeoovcrreteeaggitsoiooidinnnuggc,th,taaaot etaawxnnypyeenmmctetyede-dindciicantaloelllly(ya2s9tddfe)eottmeerrnomamnicitnnhoaanbpbtlelieerniuoppohdhuyyssosifipcceaaarbllisoooedrrncmomeefenwnntotaialllllebiimsempptsaahuaiibrnmsmte6ietnunmtttoetnhdhtaafhttoscrcaaasnnnudcbbheeth6eeaxxtmppceoeaccnuttsteeheddspttteoohreirroeecdssmuuliplfttltioihnnyecddleeeeaaaottvhhebooierrs uccdnaauannebbblteeoe 10 perform the duties expected to last for a to perform the duties ohfi or her positionof continuous period of no of his or her position of employment less than 6 months employment. and that causes the employee to be unable r11e1.g14.4..sectionSSpp1eec4ci0iff9iie-edd1)EEmmoprplslouoycyheeeeot.he""rSSppreeecgciuiflfiiaeetddioEEnmormplgouypiedea"lnmcmeeoeaiansnssysuaead"e"suspnpedeececiriff"iiseeeddcteeiomnmp4lop0y9elAoe"faoastsdyhdeeefefCiionndseeedd. iinn TTrreesass.. reg. section 1.409-1 (i) or such other regulation or guidance issued under section 409A of the Code. M11i.11n55i. ng andSSuMupappnpullfeeammcetenuntrtaailnl gPPlClaaonnm.pa""nSSyuu.pppphlleeemmperenentdtaaelcl ePPsllsaaonnr""tmmoeetahainnsssNttohhneegSuSuauplppiplfleecmmdeenPntltaaanll IPPleennssiioonn Planof Plan of Minnesota Minnesota Mining and Manufacturing Company, the predecessor to this Nonqualified Plan II. 3-3- 22775500..00118899 AARRTTIICCLLEE 22 EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN 22N.o11n.union PEeElnlisiggiioibbniilliEittayym..inAAgnnsyyaeermemppllliomoyiyteeeedoo(ff13)3MMbyoorrapaapnnliaacffafftiiilliioaantteeowwfhhsooectiissioaan PP4aar0rtt1iic(ciiapp1aa7nnt)t iinonftthhteeheEERCRIoIPdPeaannoddr ww(h2ho)ossebe.y NrbreeeoaanseslouoinnngiiooobfflnetthhPteeoeneebsmmeipcoplonlomoyeEyeeaeaer'n'MssinePPgmaasrbrtteiiaccrxiieppiaanlttiimtiohoiinntseiidNnnottn(hh1geeu)a33blMMyifiaVVcpIIdpPPlPiEcElaxaxtcncieoeIsLsn.ss oPPfllaasnnec(aatsisonddees4scc0rr1iib(baee)dd(1ii7nn)SSeoeccfttitihooenn 33C..11odbbeeellooorww)(2ss)hhaballyll be eligible to become a Member in this Nonqualified Plan II. 2S2e.22c.tion 3.1 wPiPtaahrrottiuicctiipapnaayttiioofunnr..thePPraaarrctttiicicioippnaabttiyioonnthiiennCttohhmiispseNNnoosnnaqqtuaiuloailniffiCieeoddmPPilltaanne.IIII sshhaallll bbee aauuttoommaattiicc bbyy ooppeerraattiioonn ooff Section 3.1 without any further action by the Compensation Committee. S22h3.3a.l.l forfeiFtFooralrflfeeirtiitugurhert.es. anAAd M Mbeeenmmebfbeietrrs oourrnFFdoeorrrmmteehrirsM MNeeommnbgbeuerarissfhhiaalcllldecePaalssaeen ttIoof bbweehaeanM MetemhmebbeCerormooprreFFnoosrarmmteierornM MeCemommbbmeeirrttaaennedd `ddsceheotatneelslrrummlfitoinanrenfetses,i,ftoiirannlolriirttsiisgs hssooottsllheeearnddwidiisssccberreeednttiiieorofennic,t,tslttyuhhnaaottdressiruundcctihhhriescM MtNeleymomnbpbqeeeurrrfaolooirfrrmieiFFdnoogrPrmsmlaeeernrrviIM McIeeswemmhfboebernerarnthyiisse peeCemmropspmlolnoopoyyereeneddsnattbbiiyoyt,n,y aaCeccntotigimnnagggmeiaadtssteieana tcsthhooeelnds((uiib))lytmmaan3antnMufufofaoracrcottrauunrirsyeeooootrfrhessirtaawslleeisosuoebffsadiandinriyeyacrtippleyrrsoo,odduruocrcitnt(dissiiiir)mmeimcillataalnyxrufptooaecrooftrorurriimnen icncooogrmmpssapeeltreevitititociifeoosnnspfwwoeicriittaahhlnyaamnnpayycehrppsirroononeddruuocycrtteommnratainetnquyuuffeiaanpccmgtteuaungrrteee,ddd oooinrrr fsmfuouarlmndniuisfsbhahyicinnt3gguMreooffoorreennasgngailyienneeooeeffrriiiantnnsggysouoprbrrsottidedeuciccahhtxnniiiseccisaam,lliolssraeerr(rivvoii)iccomeerssainccnuoocfnnoaccmceeptrruennrtiieinntggoirossnsuuaccwlhhiethommafaacnschpyhieinncpeireraorylydumcootarrcmheeaiqqnnuueuiirpfpymameconettrnu,tre,eqduuussiopeerddmseoiinnlntd,ttbhhoyeer m33aMMadneotourerfraaamcnnityuynoraoetffiiootisrtnsssstahuulaebbtssioiaddfiiaaMarnreiiyemessbp,,rewowridittuohhcrootuuFsttoimttrhhmieeleawwrrrritMiottetteoemnnrbiccenoornncssoieesmnntcptooeofvttfiettrhihoeeend CCwbooyimmtphtephaneensnypasratpotiirvoooinndsiuCCoconotsmmmmomiaftniettutheefia.esc. tSueBBrceeetfdfiooorroneer m2ms3ao,alkkdiitnnbhggye aCCfooordmfmepetiepetnerumnsraseiatnptiairootoinnovinCCsitoohomnamtmaianittdtMeeeaenmsshohbpaaeplllrorggotiiruvvneeFitottyhrhmeeteM MoredeMmimsbecbemoernrbteoiorrnruiFFesooscrrumomcveeherrreeM MmdepemlbmboybyeetmrhreennnootpttriiooccrveeicsoooifofnnsiittusssltoiininfnttetgehnnittrsiieoolSnnaett1ico0otinoiisnnhnvivpo2ok.ko3eer, tttthhhhiieess provision forfeiture provision oopffrossvuuiccshhiossneerravvniicdceassanwwioittphhpiinnoraatuppneeirrtiiyooddtooofdf innsiicnnocenttytyin((u99e00))sdduaacyyhss effmoollplloloowwyiimnnggentththeeorddaacttoeeonosffulsstuuinccghh notice. relationship notice. or the AARRTTIICCLLEE 33 AAMMOOUUNNTT AANNDD DDIISSTTRRIIBBUUTTIIOONN OOFF BBEENNEEFFIITTSS 33M.1e1m. ber or AAFdoddrdimtietiiroonnMaaellmMMboeonrntthuhlnlyydeBrBeetnnheefeifEtitR..IP,IInn taahddiddsiittNiiooonnnquttoaolttihhfeeieaadmmooPulunanntt ooIIff sRRheaetltliirrepemamyeenntatnIInnaccdodomimteeiopnpaaalyyaambbollneettthoolyaa bMbaedenedneimeftfiboittenarttlooobrsseuuFneccofhhrimtMMeserheammMlblbeebemrer brooeerrrfeuFrFrnooedrrdmemtreeortrhheeMMreeEeimmRnbIbaePser,rtthhddeiees"tteNeNrromomninqinnqueeauddlailiiiffnniieddaaccPccPlooalarrnnddIaalInnIBcceeesnhewawfliilittthhpatythhiiassn SSaeedcctdtiiiotoinnon3a3.l.11..monSStuuhcclhyh additional benefit shall be referred to herein as the "Nonqualified Plan II Benefit". @(a) wheT`Trhheee: NNoonnqquaulailiffiiecdd PPllaann I1I1 BBeenneeffiitt sshhaallll eeqquuaall tthhee aammoouunntt bbyy wwhhiicchh ((ii)) eexxcceeeeddss ((iiii)., where: @(i) Meiisms bttheheermmooronnFtthohlrlymyeRRreeMttieirrmeembmeeenrntbt yIInnctchooemmEeeRtIthhPaattifwwNooouunlluddnhihaaovvneePbebneeseeinnonppaaEyyaaambblileengttsoo wsseuurccheh nM nroeotaetsmlloiinbmmeoiirttfeeodtdrhFe((11oM))rembmbyeybreaaM rpp'pepslmliioccbraaettFriiooobnrnymooethffressMeEeeccRmttiiIboPoennrif'44Ns0011o((naau))((n11io77))n of the Code or (2) by Pension Earnings were of the Code or (2) by reason of the Member's or Former Member's 4-4- 22775500..00119900 ppaarrttiicciippaattiioonn iinn tthhee 33MM VVIIPP EExxcceessss PPllaann ((aass ddeessccrriibbeedd iinn SSeeccttiioonn 33.. 1l((bb)) bbeellooww));; aanndd G(iii)) iiss tthhee mmoonntthhllyy RReettiirreemmeenntt IInnccoommee aaccttuuaallllyy ppaayyaabbllee ttoo ssuucchh MMeemmbbeerr oorr Former Member under the ERIP. Former Member under the ERIP. (b)) FFoorr ppuurrppoosseessooff tthhiiss ddeetteerrmmiinnaattiioonn,, tthhee ffoolllloowwiinngg rruulleess sshhaallll aappppllyy: @(i) 2PP0ll0aa8nn)nneeddorttoottwaalal gcceoosmmppeaennnsdsaattiisooannlar((iffeoosrr PPllaann (for YYeeaarrss Plan bbeeggiinnnniinngg oonn oorraafftteerr Years ending on JJaannuua~rxyy 11,, or before 2DD0ee0cc8ee)mmbbeoerrr 33w11,,ag22e00s0077))antthdhaatt siiasslannrooittesvvooll(uufnontrtaarriiPllyylanddeeffYeerrerraeerdds uunneddneedrrinaag33MMonnnoononqrquuaabllieifffoiieerded ddeeffeerrrreedd ccoommppeennssaattiioonn ppllaann aanndd wwhhiicchh iiss eexxcclluuddeedd ffrroomm NNoonnuunniioonn PPeennssiioonn EE(1aa7mr)niilnniggmsistuusnnhdadleelrrbttheheetrEEeRRaItIePPdsosaolseleNlloyynbbuyynirroeeanassoPoennnoosfifoaanppppEllaiimcciaatntiigoosnn,oofftthhee sseeccttiioonn 440011((aa)) (17) limit shall be treated as Nonunion Pension Earnings. ((iiii)) PPllaannnnecdd ttoottaall ccoommppeennssaattiioonn ((ffoorr PPllaann YYeeaarrssbbeeggiinnnniinnggoonn oorr aafflteerr JJaannuuaarryy l1,, 2008) or wages and salaries (for Plan Years ending on or before 2DD0ee0cc8ee)mmbbeoerrr 33w11,a,g2e2s000077a))ndtthhaatstaliisasrivveooslluunn(tftaoarrriillyyPlddaeneffeerrYrreeeddarsuunnddeeenrrdiaang33MMonnnoononqrquuaballieifffoiieerded dedexefcfeelrrurrdeeeddd ccfoormmopmpeenNnsosanatutiinooinnonppllPaaennnsaainnoddn wwEhahimiccihhn,,gsaabbbssyeennrtteasssuuoccnhhofddeeaffpeeprrrlraialcl,a, tiwwoonouulolddf tbbheee esseexcccttliiuoodnned44001f1r((oaam))((11N77))onlliuimmniiittosnshhaaPlllelnbbseeiottnrreeaaEtteaedrdnaainssgNNsoonbnuyunnriieooannsoPPneennossfiiooannppEElaaircrnnaitiningogsns..of the i(iiii)) PPllaannnnecdd ttoottaallccoommpepnesnastaitioonn ((ffoorr PPllaann YYeeaarrss bbeeggiinnnniinngg oonn oorr aaffterr JJaannuuaarryy l1,, 2009) that does not exceed the section 401(a)(17) limit but which is excluded 2ffrr0oo0mm9) NNthooanntuudnnoiieoosnnnoPPteennesxsiicooennedEEtaahmreniisnneggcsstiouunnnd4d0ee1rr (tathh)e(e17EE)RRlIIimPP itbbbeeccuaatuuwsseehiciihtt iiisss eddxeecffleeurrdrreeeddd uunnddeerr tthhee 33MM VVIIPP EExxcceessss PPllaann bbyy rreeaassoonn ooff aapppplliiccaattiioonn ooff tthhee lliimmiitt oonn rr(eeSgg1uu8ll.aa0rr00((nnfooonrn--2cc0aa1tt6cc,hh ausuppa))djVVusIItPPedddfeerffeoermrrraatllissmeuuntnoddeetrrimesseefccottriioocnnost44-00o22f((-sgl)i)vioonffg itthnhceereCCasooeddsee) (ss$hha1all8llb,0be0et0rtrefeaoatrtee2dd01aass6,NNaoosnnuaundnijiuoosnntePPdeefnnrssoiimoonntiEEmaamernitnionggsti.sm. e for cost-of-living increases) `TThhee a~mxnoouunntt ooff tthhee NNoonnqquaulailiffiieedd PPllaann IIII BBeenneeffiitt sshhaallll bbee rreedduucceedd bbyy tthhee aammoouunntt ooff tthhee aaddddiittiioonnaall mmoonntthhllyy dbbueepnnelefificitattippoaanyyaaobbflleebentteoofittthsh.ee ss~Faoxmnreeavppoeeirrsdsoaonnnceuuonnfdddeeorruttbhhtee,NNaoonMnqqeuuamlabileiffirieeddor PPFlloaanrnmeI1 rttooMetthmheebeeerxxttweennhtto nnieesccenesosstsaarcrynytitt(ol0edaavvtoooiidda vdveeusspttleeidcdabtbieeonnneeffioittf uubnnedndeeerfritttshh.ee FEEoRRrIIPPavssohhiaadllallnnncooett obbfee deeonnuttibitttll,eedda ttMoo eaamnnyybeNNroononqrquFualaoilrifmfiieeerdd MPPlleaamnn bIIeII rBBweenhneoeffiitits hhneeorrteeuuennnddtieetrlreuudnnltloeessssa `aanndd uunnttiill ssuucchh bbeenneeffiitt uunnddeerr tthhee EERRIIPP bbeeccoommeess vveesstteedd.. 332.2.. TTiimmee ooff PPaayymmeenntt.. PPaayymmeenntt ooff tthhee NNoonngquaulailiffiiecdd PPllaann IIfI BBeenneeffiitt ddeessccrriibbeedd iinn SSeeccttiioonn 33..11 aabboovvee wwiillll bbeeggiinn aass ooff tthhee ffiirrsstt ooff tthhee ccaalleennddaarr mmoonntthh ((tthhee "A"Annnnuuiittyy SSttaarrttiinngg DDaattee"")) ccooiinncciiddeenntt wwiitthh oorr nneexxtt ffoolllloowwiinngg tthhee M Meemmbebre'r'ss SSeeppaarraattiioonn ffrroomm SSeerrvviicce:; pprroovviiddeedd., hhoowweevvere,r, tthhaatt: @(a) MMeemmbbeerrss wwhhoossee jjoobb ggrraaddeess wweerree ccllaassssiiffiieedd aass CCEEOO,, LLI1. , LL22., LL33 aanndd TT77 wwhhoossee planned income for 2008 was more than $230,000 were permitted (0 make a one- pttiilmamneeniierrdrreevivnoocccoaambblleee cefloleercctt2ii0oo0nn8iinnw22a00s00m881ot0oreeellteehccattnttoo$rr2ee3cc0ee,ii0vv0ee0tthhweeieirrre permitted to make a one- -55- 22775500..00119911 NtNioomnneqlquyualaeillifefiiceetddionPPllwaaannsIIIImBaBedeneneefifinitt2ii0nn08tth,heepffaooyrrmmmenootff oaafnn saaunncnnhuuiiMttyyemiibnnelrliie'uusooNfofnaaqulluaulmmippfisseuudmm.P.laInIff Iaaf tBfBieomenlneelefloyfiwititenlssgehhcatatlhlilloenccMoowemmmambmseeemrnn'cacsdeeeRaaeissnti2ooref0fm0ett8hnh,eet.pAAanynnImnFuuiestinutyyct hoSSfMtt~saeuxrmctiibhnneggMrDDeSamaettpeebaerccraoo'tsiiennNsccioifddnreeqonnumttaSlwwieifirittevhhdicooPerrlapnnrneeixoxItrIt ttfooolbbloeewccooinmmgiinntgghecellMiiggeiibbmlleebeffroo'srr RRReeetttiiirrreeemmmeenetnn,tt,. paid in a single lump sum as of the hhAiiInssfnuoosriurtchhyheerrMSNtNaeoormntnqibquneaugrlailDSifafeiitpeeeaddrcaPPotllieaansnncfiI1rd1IoemnBBteenSneweefifritivthticssoehhraalplnllreibbxoteer ollowing the Member's Separation from Service: paid in a single lump sum as of the Annuity St~xting following the Member's Separation from Service; Date coincident with or next (b) SepaOOrnnaeteiM oMneemfmrbboeemrrSccellraavssissciifefiiepeddraaissotLroL3320oo0nn8TTrwraaannsssiiptteiioromnniaatllteRRdeetttiiorreemmmaeeknnett aLLeeoaanvvee-etwwimhheooiiimnneccvuuorrcrraeebddleaa eeSilnleeepfcciattciirouaontnoioiinfnan 22frl00o0u0m8m8pttSooseurrremve.cciceeeiivvSpeeurcihhohiisrs tMNNooeon2mnq0bqu0eua8larilwifdfaiiiesdeddpiPePnrllmfaaanncittIItIletdBiBmeteenonleyefmfiiatctlkeiiecnnt,atthhoeaennffedoo-rrtamimcmocooefrfdiarairnnnegvlaayonn,ncnuauibhittliyyes Ng`inNioovlnneiqeqnuuuaailonliifffSiiaecedhdluePPmdlluapalnnesIIuIlm| BB.aeetnnteSaefucfiihcttehsdhsahMlahlleelrmcceobotommermm(edweinhdniccceienhuufspaphcooatlnnlthhimiibsseesslyctcrhheeeealddetuuecldtl,eeddaasndddaaatteeaoRcfoectftoeitredrrremimnmigenilnnaytat,tiifhoooinnsr gppuuivrreppnoosseeinss ooSffcSSheeecdcttuiilooenn 3 3(b)): I attached 3.3(b)); hereto (which shall be treated as a Retirement for (c) FFoorrmmeerr M Meemmbbeerrss prior to 2009 were ccllaassssiiffiieedd pemnited aass LLI1 aanndd LL22 wwhhoo to make aone-time riinneccvuuorrcrreaeddblaaeSSeeelpepacartraiatotinioonnin ff2rro0om0m8tSSoeerrevvliieccceet pttlooruimorreperccteeosiiuvvm2ee.00tth9heeIiwfirraeNNrteooinpmnqeequlruaymlailieitflftieeieecdddtitooPPnllmaawnnaakIIseIl amBBeaoendnneeeef-fititiitnmiinen20itt0rhh8reee,vffopoocarrmaymbmleooenffetaalennocftaainnotnhnnueuiiiirtntyyN2o0iinnn0q8ulliiatecoluuioefolfiefecdaat wlPPuillmatanhnp oI11IsruBBnmeeenx.netelIffiiftotlasslhhotaiawlmlillneccglyootmmheemmleeFecnontirccomeeneuurwppMaooesnnmmttbhheaeedref'fiisrrissnatt tdd2taa0ayyi0n8oom,fefpnttthahyeeomfccaaeallngeeetnnoddsiaafxrrtthymmefooiinrvntetN(hh6occ3noo)qii;unnacciliiddfeieenndtt with or next following the Former Member's attainment of age sixty five (65); @(d) `anAAdlllwl hoootthheherarvFFeoornrmomteercroMMmememmebnbecerressdwwphhaooymiiennnccutuorrrrfeeddthaaeiSSreeNppoaanrrgaauttaiioolnnifffirreoodmmPlSSaeenrrvvIilicceeBeppnreriifooirrt t1po0ri22o00r00t99o JJJaaaannnnduuuaa~wrrxhyyyo, h112,,a0v022e900n009oi9nt scsahhoaamslllilmngrreleeneccceeeliivduveemppappyaasmyyummme.enentntot(fFootofhfrettihhrheeiNiisrronNpNquoorunnpqaoqulsiuafelai,eilidfftiiPheeedldanMPPelIlImaannbBeeIrInIl'esBfBietenAnpenefrnifiuoititrttiiyonn SJSattna~ruxt~tiixnnygg, DD2aa0tt0ee9sshianhllbabeaesJiJanalngnuluealarrlyyu1m1,,p2200s0u09m9...)) (For this purpose, the Member's Annuity NoNfoottSwweipitathhrssatttaainnoddniinnfggrotthmheeSffeoorrrveeiggcooeiinnsggh,a,liilnn btthehgeeieenvveeansnttottfhhaattthetthhfeeirMMsteemdmabybeoerrfitisshaaeSSpspeeecvcieifnfiiteehdd mEEommnptplhlooyyfeeoeel,,loppwaaiyynmmgeetnnhtte ooMnneaamccbcceooruu'nnstt (oSSaefecppcSaaorerrapadttaiiirnooagnntl,i,yo,naannifddfrpottamhhyeemSeffeniirrrtvssttiicspepiaansyyhtmmaheleenlntfbtoerssghhmiaonallfllasaiinnnoaccfnllunutdhudeeietfyaail,lrllsstuppcaadyhyaymmeaenonnnftutsstihtedydeessllheaaavyyleeelnddtbhessiimcnnaccoleecnutttlhhhaeetfoeAAdllnobnnawnusuiientidtygyotnSShtettaahrrMettiinAengngmnbuDDieaatrtt'yees StartingDatewithout regard o the delay). (accordingly, if payment is in the form of an Starting Date without regard to the delay). annuity, such annuity shall be calculated based on the Annuity 333.3.. FFoorrmmooff PPaayymmeenntt. @(a) PlaLLnuuImmI ppBenSSeuufim mt..paEEyxaxcbcleeepptttoaasscaooctthhheeMrrwweiimssbeeepprrrooovvriiddFeeoddrmiinenrtthhMiissemSSebeccettriioounnn33d..e33r,, ttthhhiees NNPolonangnquuashlaailliflfiieebedd: ppPPaalliaaiddnn Iii1Inn1 BaBaeennsseeiinffniiggttllpeeaayllmuauombmulppnettssouuimnme,a,ScehddceetMttieeorernmmmii3bnn.eee1rddoirnbbtyyFooccaroomnnpvevrereersrMtetiinnentmgg vbttaehhlreeuuemmnodhonuentrmthhptlhlyyissuNNPmolonanqnuqusausihlaniagliflfliitehebedde. aPapplpaplnliiccIaaIbbllBeeeiinnnettfeeirrteess~ttxrrnaaotteuenootnnin3300-S-yyeeeacartiroUUn..SS.3..1 into a present value lump sum using the 5-6- 22775500..00119922 TT`rraeepaapssluuircryyablsseeecciuunrrtiiettriieeessst aarnnaddteRR"PPs2h2a00l00l00m33eMaMnmmtorhoteratlaailvtieyty.r.ageFFooorrfpptuuhrreppoodsasieelssy oorffattthehsiissoccnoonn3vv0e-eryrsseiiaoornn,,U.ttShh.ee qT"Turaraeperapatssleuiurcrrayytbhlasseteecceiuunnrrtidietstriieeeisssmtmiirennadteeieffa"ffteeescclhttyaddplluurrirmiionnerggtanotthhteethhecceaaaAllvenenennruddaiaagrtreyqquouSaftararttrtheeterrinfdfgiiarrDsislattytppe.rrraeetcceeesddiionnngg 3tt0hhe-eycceaaallreenUndd.Saarr. quarter that ends immediately prior to the Annuity Starting Date. (b) cOOlappststiiiofoinneaadll aAAsnnnCnuEuiOitt,yy LFFIoo,rrmmL2ss,ffoLorr3 EEallniigdgiibbTll7ee RRwehefotiisrreeeeesps.l.anMMneeemdmbbieenrrcssowwmehhoofssoeer jj2oo0bb0gg8rraawddaeessswwmeoerrreec tt"chhAlaaansnnnsui$$fii22te3y3d00,,a00Esl00i00Cg,,iEbaaOlnne,dd LMooe1nnm,eebLeMM2re,se"mLm)b3.beerarwnedccrllaaeTss7ssiipffweiiemehddmoisaatessedjpjoolabbtnonggerrmadaaddkeienecLLo33amooeonnnfeoTT-rStSi2RRm0e0((8ccoiolmwllleeeavccsotticimvvaeebolllyryee, ae"elAnleenccattnniiuonouinntiytiinynE22li00ing00i88lbilotteouo eeM ollfeeeccmatt ttblooeurrrmseep"cc)ee,siivuvwmee.ettrhheeeiiIrrpf eNNaromontnqiiqtmutueealadlyliifftioceelddemcPPtalilkaoannne IwIaIfaBBsoeennnmeeefa-tfidiitmteiienninttihrhr2eee0vff0ooo8r,rcmambthooleeff rrafuunrlloeemassnuunSnnueddriteveyrircttiehnhiispslriSSieeouecrcttoiitofoonnab33el..cu33om((bmbp))insssghhuaamllelll.iaagppipIpblflyly.ea. ftoIiIrmfF aaeRnnleytEEilelriileggemiicebbtnllietoe,nMMheweimmsabsboeermrrahdddeiireecssNioonorrnq2SSu0eeap0pla8ari,arfatitethcesdes. fPPrlloaamnn IITISBBeerevnneicefefiittpssrhhiaoallrll tbboee paid in asingle lump sum pursuant becoming eligible for Retirement, paid in a single lump sum pursuant (0 Section 3 3(a). his or her Nonqualified to Section 3.3(a). @) (i) RePPtirrreeesssuuammneedddisFFoonorrtmm:l:egaSSliilnnyggllmeearLLriiiffeeedAAonnnnnuhiuitistyyo..r IhIfefraanAnnAAnnunninutuiytityyStaEErlltiigigniibgblleDeaMtMeee,mmtbbheeernr tRbthheeeettinnrheooesrrLmmaiaafnleld ffAioosnrrnmnmuooitotfyflpepagfaayoylrmlmmye,enmntatanrdoorffihehhidisissoooonrrrhhhheieersrroNNNoronohnqnqeuquraualAlaiilfnififniieuecdiddtyPPPllalSaantnnar11ItIiIlnBBBgeeennDnfeeifafitteitt,ssshthhhaaaellllnll buuanenlJleeothissnessthhLaeeinfooedrrAsNshhnoeennuseelpilteeoyccuttfsssoetr0omBww,eanaaieinsfvdieechitthaihsreeyoLLriiSffhueeerAArvninNnvnuoouirnitqtyAyunafnfoluiorifmimteydooffPfopplaraanmyy,mmIIebeneBnttepnaaanneiddfditssieesnllheeatcchlttless, fafPoloarJmnom,ionoftNfoanaangduLLaiNilffieeofniAAsenpndnouniuuPtsilytea.yn.BeIIEEnxexBcfceieecnppeitaftriyaatss SpoouattryhhvmeeierrvwwnoitirssseeAwnssippnleeulcciitifbyfieiccfaaomlllrlaymyd,epprrboomevvoiinpddtaeehidddlyiiinnntottthhheeea PM DMaleaetmnmeb, beaNenrrodnooeqrrnudFaFilooinrfrgimmeedeorrnPM MtlaheeenmmbfIbieIrersrtBeccdnoaoyemmfmimtoefenpncatciyhiennmggemnoootnsnnthwhhiiissilnl oobwrrehhhiecmerhradAAheninsnnumuoioirttnyyhtheSSrlyttaadrtettoiaintnghga Date and ending on the first day of the month in which his or her death occurs. Gi) (ii) EligPPirrbleeessuuMmmeeemddbeFFroorrRemmt:i:resJJooaiinnndtt iaasnnlddegaSSlluuyrrvvmiiavvroorrrieLLdiioffene hAAinsnnnouruiithtyeyr .AnInIffuiaatnny AASntnnanurutiiittnyyg EDDaala5titge0ei,,b%tlthehJeoeMninnethhmiiassnbooderrrShhRpeeoerrtuNiNsroeoensnqBquaenuanldaeilfiifisfciielieeaddgryaPPllllaSaynnumrI1v1IairBBvreoienernedeAffinoitnntusshihhtiaasyllllobfrbeoehrpepmar,aiAidudnnliinnneusttishthyeeheSffootoarrrmrmtsinohogeff eeaallnee5dcc0tt%ssse0tloJeocwwitnasatiivtvaeenhdetthhrSeep55toh0u0e%s%eLiJJBfooeieinnntAtenfaainnncuddiiatrSSyyppooSufuusosrerevmiBB,veoenanrenefAifiacnclinitaauerrriyytnyaSStfuiuovrrrevvmiiJvv,ooouirrnntAlAennsansnnuduihitetySyopfrfooousrrshmmee BaB1en0end0ne%efsfi)eicclieiaoacrrrtysy aeSSiuutJrhrovveiiirvvnotothr_reaAAnnLdnninufueiNtiotyAynsnffpnooourrumimtsyaevaavfoiaBrliemlanabeb,fllieeacniuuannarddlyeteerrrnSttahuhtreeivviEEevRRoJIrIoPiPnA(tn(niL.eaue.i.n.,tdy.77S55p%fo%ouroosmerr aa1vv0aa0ii%llaa)bblleeoruunndadeerrJotthhineetEERRaInIdPP (50%, 75% or 100%), Nonspouse Beneficiary (50%, 75% or 100%). Survivor Annuity form (c) MOOeppmttbiioeonnrasall cAAlnannsnsuiuifititeyydFFaoosrrmLmIss fofororrLCC2eerrwtthaaioinn iVVnecesustrtreeedddFFaoorrSmmepeearrraM Mteieommnbbeferrorsms.. SCCeerervrtitaaciienn pFFrooirorrmmeefror 2oM 2n00ee00m-99tbi((emccroeoslllileecmccleattviisvovsceeiflaliyybe,,lde""AAaesnlnnenLucuit1iittoyyonrEEiLnllii22gg0iiwbb0ll8heeotFFoioonerrlcmmeuceertrrre0dM MeeammbSeberepsras"r")a)tiwwoenerreefroppmeerrmmSiietttreevddictteoo pmmraiaokkreetoaa one-time irrevocable election in 2008 to elect to 5-7- 22775500..00119933 r`reSecpceoeiuivsveee tBthheeeniierrfiNNcooinanqrquyauSlauilriffviieieddvoPPrllaaAnnnnIIuIIiBBteyenneefffioitrtmiinn(tt0hhee%oLLiriffee7A5A%nn)nn.uuiittyIyF affotorirmmmeoloryr ttehhleeecJJtooiiionnntt waaannsdd mmcSaopadmoduemeseeniinnBcee22n00eu00fp8i8co,,inattrhyhteehnnSe uttrfhvhieerivsoFFrdooaArrymmneneorrufitM Mytehefmeombremcbrael'r(e's5sn0d%NaNroononqmrquoau7nla5til%ifhfi)i.eecddoIifPPnacllaiatdnnimenIe1t1IlywBBeieetlnenheceftfiioiottrnssnwhheaaaxllsltl scffoioonllmlglolmoweweiilnnnugcgmepaattusttaupaimoin)nnm.meetnnhtteoofffiraasggtee dssaiixxyttyyofffiivvteehe((6655c))aliiennndtthhaeer aamnnnnouuniittthyy ffcooorrimnmcieedlleeecncttteeddw((iiitnhn llioieeruu ofa next of a single lump sum). @(d) Memb"TeTroot'taasll PPReeentnsisriioeonmnenVVtaallIuuneecGGoumueaarraiasnntcteaeele.c.ulaTTtooedtthhpeeuerexsxtuteeannnttt tththoaatt AaartM Miecelmembeb4re'ro'ssf ootrrheFFooErrmRmeIerPr (dM (PPeotoeremrttrffbmooielliinro'oesdI1I1Ru)),,nedthhiereeremooSrerecnsstthhieeoInnsschh4oaa9mlllleobbfeeistheeencntatEiilttRcllIueePdlda,ttteoaods aatphTTueorotsstauaalalmnePPteemnntoassiyiooAnnbretVVicaaalmleluueeen4dGGeoudufaarrftaahrnneottmeeEeetRi((mIaaePss. tatdoonedttteiimrmSmeep)i)onuieiffsdhheueenBooderrneesrsfhhiSeeceiRcRaetreityotiinrreeA4ssn.n9aaunnioddtfyeetlhleeeoccrttEssRJppoIaaiPyyn,tmmaeesannntttdhieinnNsottahhnmee-eSffopomrormaumyosoefbfeaaBeaLLnmieifffeeeincdAAineanndrunyiuftriyotA,ymn,nuJJtoioimitinnyett uu`aGnnnudddaeerrrSanpStSoeeeucecsttweiiiootnnBhe33rn.e.e33sf((pib6ce)c)iatrooytrro At((hcne))nNuoooiffntyqttuhhaoiilsrsifJPPiolleaiandnnt,,Plassanoond IllfoNonnBoggenn-eSaafsspitottuhqhseueealTTBiooftetiaanslleafiPsPceeianansrscyiiaoosnnhAnrVVenaafulluiuuntyeed afGfeemuaaottauuurrrnaeenttuuetnnheaddtweerriitshwwnhohrieticcsgphhreeppcaaattyyetormmetethnhnetatnNiisstohpnperrqoeouxvvaciildedifeseisddedouufpPpootlahnnne ttTIhhIoeetBaddleeenaaPettehfhnitsooiqffounttahhleVeifaillleaaussstetaasawnnianntuhcuiaittrsaaehnnsttpreeiicfnnutnaatdnno ttahhmee oNuNonontnqtquhaualatiliifsfiineeddot Plan II greater Plan II payments before the death toBhBfeaenntneheftehfiiteltaseataxttacnettnhshuesei toaAAfnnnttn.hnueuiitTtyyotSaStltaaPrrtteiinnnsggioDnDaaVtteealuooevveewrr ittthhheeretstooptteaacllt ootoff payments before the death of the last annuitant. (e) eSSnutuibbtslsieidddiitzzoeeddele55c00t%%a sJJuoobiisnnitdiaaznneddd SS5uu0rrv%viivJvoooirrntAAnannnnudiuStituyyr_.vivIIfofara AMMnenemumbibteeyrr uoonrrdFFeoorrrmSmeeecrrtiMMoenemm3b.be1e0rroiisfs tetehnhnteetiittEElleRReddIIPPt1o0((aaeasslsetutchhbteesaissdsoaiu_zmmbeesedidmmaianzanyeyudibbt5eey0a%aummndeJeenonrdidneettdhdiasnffrdrPolomSamnuttriivimimvheeoettroooArttinismnmheeue))i,et,ylhheceuetnsoodrrethrssehhSee5e0csshht%iaaollnlJloaia3lnl.s1tsoo0anbbodee.f a`eSSnnppntoioutuualesslede ltBBioefeneanetefisifmuieccbiisaaairnrdynyiuzieAAtdnynnanunbuienitntuyyeiftiypptuuurranssvduuaaeainrnltattbhlt(ioes0 PtSSoleeaccnsttuiiiocofnhnhe33M..oe33rm((bbbs))heeroorerlies((ccc)t)n,s,ottpphrrgeoorvve5iai0ddt%eeerddJtotthhhianaanttt atttnhhhdeee ataahnnnannntuuuaaatlllhellliiifffaeeentttinimimumaeeelaaannsnnununruiuvititiyytvyobbrbeenenaenenfefniifuttiitatavyvaaaviiabllaeialnbbaellbfeelietuunntdiodseerrsnuottchthhee gLLMrieiffaeeetmeAArbnnentrnuhuiaitisntyyntoffhooterrmgmar,,nenaaautnneaddlr pptrhrloioafvvneiitdidtmeheedde. taafhnonarnnmutu.iittthyye bbeeannneenffuiitatlaavvsaauiirllvaaibbvlloeert(o0anssuunccuhhityMMeebmmebnbeeefrrituunnisddeenrrottthheegr55e00a%t%erJJootiihnnattnaanntddheSSuuarrnvvniivvuoaorlr Annuity lifetime Annuity form. (f) SpouDDseeeffiinnBieittniieoofnnicss.ia. ryFFoorSruppruuvrrippvooossreessAnoonffuittthhyiiss, AAJrortitiincctlleean33,d, tthNheeonttseerprmomusssLLeiiffBeeenAAennfninucuiiitatyyr,y, JJSooiuinnrtvt iaavnnoddr At`SAhpnneonnuuEuiRsitIetyyP,BaaennanddseTtfTihocoetitoaaslxlaymPPeeeSnnumssraiivooyinnvboVVeraaallAuumneeennGGuduiueatyadrr,aafnnJriotoceimneet stshihaamnaleldll thhNoaaotvvineemsept.thhoeeussseoa_mmBeeemnmeeefaaincniiiannrggyss as under Survivor as under the ERIP, as the same may be amended from time to time. 33M.4e4m. ber orPPFrroeer--CmCeoormmMmmeeemnnbcceeermmeednintctsDDaefeataettrhh.b.ecNNooomttiwwniitgthhssvtteaasnntddeidinngugnaadnneyyr ptphrreoovviEissRiioIonnP iibnnuttthhpiissriPPolrlaantnottohoitsthhoeerccoohnentrtrroaAxrnyyn,,uiiifftyaa M SSttaaerrmttiibnneggrDDoaartteeF,,ottrhhmee effroollMlloowewmiinnbggerrruudlleieessssshhaafaltllelraappbppelclyyo:ming vested under the ERIP but prior to his or her Annuity @(a) pTTuoorstthuhaeeneetxx0tteennAttrttthhiaacttl3aaeMMoefetmmhbbeeeErRr'sI'ooPsrr (FFPooorrrmtmfeeorrliM Moee1m)m,beabnred'r'ssifRRtehetetiirMreeemmmeebnntetrIInnccoommee iiss ccaallccuullaatteedd. pursuant to Article 3 of the ERIP (Portfolio I), and if the Member 5. -8- 22775500..00119944 oorPrreFFroocrrtmmiereerrmeM MnetemmSbubreevrrivioissr mmAanarnrruriiieetddy,," hhdiiessteoorrrmihhneecrrd ssiuunrrtvvhiievviisnnaggmessppmooauunssneeersshhaaasllllprbboeevieednnetdtiittulleneddderaa S"SMePeecrcmtetbiirooeenntri're3s3m.88oernootFffSorttuhhmreeveirvEEoRMRrIeIAPmP,b,nenaaruss'itsyaa"mmNoedennenqtddeueeramddliifnffrieroedomdminPtlttiahimnmeees11a(tmo0Beentfeimimfmioete_,,,nnwweSiritutahhcs hprrreePossrvppeeierdcceetttdi1truo0enmedtthnheeter. SM Sinuutrerevmvrieibsvvtoeorrra'snAAdnonnrmnuouFiritottyayrmlissethhyraalMlfllaecbbtmeeorbscceoori'nnsnvveNSererotctenetddiqouniiannlt3tiof.oi3e(aada),ppPrrlaeeanssneednnItIptaBivvdaealnluuaeseefito.llfuumtmShppuecshsfuuismPmt,r,edruuaesystiiirnnoeggfmtttehhhneee.t calendar month following the interest and mortality factors calendar month following the Member's in Section Member's oo3rr.F3F(ooarr)mm, eearrnM dMepemmabiedbre'ars'ss oddefeaattthhhe;; first day of the (b) pTTuoorsttuhhaeeneetxxttteeonnttAttthhiaacttlaaeMM3emebmoefrb'etsrh'esoorErRFFIooPrrmm(ePerorrM MtfeoemlmbioebreI'r)',ss aRRneedttiirrieefmmteehnnett IMInneccmoombmeeeriisoccraallccFuuollraamtteeeddr Member pursuant Member iistsonnooAtt rmmtaicarlrreriiee3dd,, onnfoo tbbheeenneefEfiiRtt IssPhhaal(lllPbboeertfppoaalyyioaabblIlee), uuannndddeerr ittfhhiitsshePPllaaMnn,,emaannbdder or Former (c) pTTuoorstthuhaeeneetxxtt1ee0nnttArtththiaacttlaae MM4emeobmferbt'ehsre'soEorRrIFFPoorr(mmPeoerrrtfM MoelemimobebIre)'r,'ssaRRnedettiirirfeemmseuencntht IIMnneccomombmeeeriiss occraallFccuuollraamtteeedrd repMMcueeermismubvbaeeenrrtthddteioieeMssAeppmrrtrbiiiceoolrrre't1os40 hhooirisfsFtooohrrremhheeEerrrRAAMInPennmnu(buiPetiotryyr'tfsSSottlaNairoorttniiqnInIugg)a,lDDiaaafnttiedec,,dihhfiPisslsuaooncrrhIhhfeM eBrreenBBmeeefnbnieetefrfiaiccotiirraarbrFyuyotsrasmhhbaallelelrl rtNtoeoocnPPeqooiurvratetlffooitlhfliiieooeMdIIII ePaamlnnabniimemrImmI'seBedoedirniaaeFtftoeeirtssmiiannemggrlolMeeunlleutmummibppnesrsS'uusemmcNt,,iooddnneeqtte3ue.rar1mlmiiifininneeetddod PbabylyapnrcceooIsnnIevvnBeetrertntviieannflggiutetthahteletrummimboopunnttasthhbulllymye NuudassoyiinnngqgoufttahhtleeihfeiiienncdtteearrlPeeelssnattdnaaarnnIIddmBommoenornttrehatfaliicltitotayyimnfcfoaiacucdttenoontrrtssinwiininSteSShceetcocitrotiinoonnne3x.331t..33f(i(naoa)tl).o.loawFFipoonrrrgetsththehiinsset ppMvuuearrlmppubooeseseerl,u,'mstthhpeedesffauiirtrmsshtt sdshhaaayllllobbfeetthtrreeeaactteaedldenaassdatthrheemAAonnnnnuthuititcyyoiSSnttcaairrdttieinnnggt DDwaatitteeh.. or next following the Member's death 35 BBeenneefificciiaarryy. 3.5. @(a) entitlJJeoodiinnttot dAAennsnniuguinittaaatnanett B.enAAefnnicAAinannrnuyuiitotyyrEeElclieiggiiivbbelleethMMeesemumrbvbeiervroroorrinFFcooorrmmmeeerrpoMMrteeimombnbeoerfr tsshhheaalJllloibbneet waeainnntddtihtlNNe3odoMnnt--oSSpdpoeosuuissgeenaBBteeennaeefBfiiceciniaaerrfyyiciAAanrnnynuuitotityyr,e,ciieffsiveseleeltechcteteedsd,u,orvoninvoffororrimnmcssomffuuerrnnpiisoshrhteeiddonbbyyofaatnnhdde Jffoiilileneddt with 3M. (b) Retir"TeTmooettnaatll PPIenencnsosiimooenn iVVs acalalluuceeu.l.atTTedoo pttuhhreesueeaxxnttteenntttotthAhraattticaaleM Me4emmboefbret'rh'ses oEorrRIFFPoorr(mmPeoerrrtfMMoeleimombebIfre)',r'ssa pRMMaeeeytmmimrbeebenmertrenoootrrfIFtFnhoocerrommmreeeerrmaiMMsienecdmmaeblrcbeueorlraftssethhdhaalellplTubboreetsaucleaninPtttietlneteosddiAottnorotiVddcaeleeslsiiug4gennoaaotftfeethtaaheeBBEeNeRnonenIefPqfiuicca(iiPlaairorfyyritfc(tood0liorrPeelccIaIeen)ii,vvIeeaI p3BBMeae.nynemeffieiNtntottaawtotttifrrtiibhtbhsuuetttaaarbbnelldmeeinattgioontdPPheoeorrrtftoffooofrleltiighoooeinIIITIg,,,oitiafwfliaatPnnhyye,n,rseooisonnpnecfftVoorratmmolussaenffyuourfmnpitirhsseehh-eeNcddoombbnymyqeunaaacnnliddefmieffeidlnleetPddldawweniaitttIhhhI bbb3eeMennnee.efffiiiNtctioapprtaawyyyiaadtbhbelssleetiagnunudanntiddnieegorrnthuSSeenecdctfetoiiroorenntgheo33.i.En44R(g(cI,))Pwsaahibbtahoolvvlreee,a,spppttelhhycee.t tM MoIenemambnaleyblrevp'rer'ssen-tcoosorr,mFiFmnoorrtemhmneecerearmbM sMeeenenmtmcbedebeorea'rfta'shs bdtdheeeesnsEiieggRfnniIacatiPtaiisorohynnadloolerrsaiiigpffpnsslauuytcciohhnddueenssidiggennraattthiieoonnERffaaIiiPllss,,shtthahelel raruupllpeelssy.ffooIrrn automatic all events, automatic bbieennnetehffieicciaiaabrrsiieeenssceuunnoddfeerar the ERIP shall apply. 9. -9- 22775500..00119955 363re..6a.son of illIInnneccsasappaoarccimtiteyyn..talIIffoaar MMpeheymmsbiebcerarl,, dFFioosarrbmmieleirrtyMM,eeimmsbbienerrthooerr oBBpeeinnneeiffoiincciiaaorrfyytiihsse uuPnnldadenerarAadmlleiegngiaalsltddriiasstaabobirilliiuttnyyaboorlr,e, bbtyyo rapaettatatyeseannobddnlepporrhfooepprieleelrnrullenyysdsettoroorihhniimsssueoocnrrhtahholeefrrotrhppeeeprrhfssoyoolsnnliacaolalwliffniidngniaaswnnacacbiyiiaalsliltyamms,aattisthetereisrnPs,l,tahtnthehiiAssodmpNNiionnoniinqosquntuarlaoailtfifofitirheededshaPPPlllllaaanndnirAIe1I1cdt:mmmaaiynyispptaarayytottrhheeunbbaeebnneleeffiitttoss payable hereunder in such of the following ways as the Plan Administrator shall direct: @(a) DDiirreeccttllyy ttoo ssuucchh MMeemmbebre,r, FFoorrmmeerr MMeemmbbeerroorr BBeenneeffiicciiaarryy:; (b) TToo tthhee lleeggaall rreepprreessenetnattaivteiovofef ssuucchh M Meemmbebrer,, FFoorrmmeerr M Meemmbbeerr oorr BBeenneeffiicciairayr;oyo;rr (c) FoTTroomessroommMeeemrrebelleaarttiivvoeer bbByyenbebflloiocooiddarooyrr mmaarrrriiaaggee,, oorr ffriieenndd,, ffoorr tthhee bbeenneeffiitt ooff ssuucchh MMeemmbbeerr,, Former Member or Beneficiary. AAthnniysyNppoaanyyqummaeelnnittfimmeadaddPeelappnuurrIssf.uuaanntt too tthhiiss SSeeccttiioonn sshhaallll bbee iinn ccoommpplleettee ddiisscchhaarrggee ooff tthhee oobblliiggaattiioonnththeerreeffoorr uunnddeerr this Nonqualified Plan II. AARRTTIICCLLEE 44 UUNNFFUUNNDDEEDD PPLLAANN g44e.11n.eral assNeNtoos TTorfruusts3.tM.. TThh3eebMbeneendfeoifctisstspnpaoalyyaaibbnllteeenuudnnddteoerrcttrhheiiassteNNooannngyquualatirliuffsiiteeddinPPllcaaonnnnIIeIIcssthhiaaollnllbbweeiptpahaiidtdhisssoollNeeollynyquffrarolomimfitthehdee gPfPluelaannnndesrIaII.il.noarNNsedseieeitrttshhe0erorfp33aM3MyMsnn.uoocrrh3aaMbnneyynedfooitotthhesees.rr nee3oMmm'tpspliloonobytyeleenirrdgssahhttaoailllolcnrhheaauavvntedeeeaarannntyyyhioostbbrNluloiisggntaaqttuiiinaoolnnicfottoionenmdmeaacPkktlieeaonncco1ownnsttirrthiihbbuutbthtaiieioosmnnlessNroooelrrnlqysseuettathlaaiafsstiiiedoddeef faaunnnuudnnsffiuunnnddoeerdddeaarnntodd puunansyseesccuuucrrheeddbeppnrroeomfmiitisss.ee 3otoMpp'aasyyommboloingneaeytyioiinnn utthhneedeffurutttuuhrriees,.Nonqualified Plan II shall be merely that of 44p2e.2,r.mitted to NmNaookeCCoocnontntrtriribbiubututtiiiooonnnsss bbuynydeM MreetmmhbisbeeNrrossnq..uaM lMiefemimbebederrPsslaaannn1dd FFoorrmmeerr M Meemmbbeerrss sshhaallll nnoott bbee rreeqquuiirreedd oorr permitted to make contributions under this Nonqualified Plan II. 44130.3.r.eceive UUannnysseepccauuyrrmeeeddntCCsrrefedrdioittmoorrtShSitsatatNtuounssq..uaNNlioofiMMcedemmPblebaernr,,11FFooexrrmcmeeeprrtMMaesemmpbrbeoevrridooerrdBBeiennneeAfrfiitcciiicaalrreyy3sshhaaabllollhveha.avveeUanantniyyl rrsiiuggchhhtt tppNoaoanyyrqemmuceeaennlitvitssefiaeaandrxyeePlprraaeenyccmeeI1iievvsneehdtdas,l,lfrttbohhemeenotrrhiiggigsrhhettNasstoenoorqfftuhaecalnaaiccftihhehedMMrPeielgmamhbnsbeIeroIr,f,eaxnFcFeoouprrnmtmsecaesrcruprM MreoedevmmigdbebenedeerrrianlaannAcrddretdicBiBlteeeonnre3eofiffaiccbi3ioaaMrvr.yye. uuUnnnddeteirlr stuthhciihss Nonqualified Plan II shall be no greater than the rights of axi unsecured general creditor of 3M. AARRTTIICCLLEE 55 PPLLAANN AADDMMIINNIISSTTRRAATTIIOONN 55C.o11m.mitice PPsoopwweeceirrfssieaadnnddheDrDeuiutnti.ieesstoohfef tthPheleaPnPllaaAnndmAAidndmimisntiirnasittsortrraattsoohrar.l.l SSauudbbmjijeenccittstttooertthhteehippsoowwNeeorrnssquoofafltthiheieeCCdoommPplepanensnas1at1tiiooinnn CaaPlccoaccmnoorrmddAadaitnmntcieceneewiwsisttiprthehactiiiotfssriettdseehrramlhmlsserahaennainddv,esshhttahahlelell hhpPaaolvvaweeneraallAlladppnmoodwwiedneirirssssctrrnnaeeettocciereosnssssaathrroayylilttnootaeccdraapmrrrrreiyytnioostuuthtetertthphrteehoipvpsirrosoivNvoiionssinsiooqnnoussfaolotfifhfiissesuudccNhhoPnPPlqlaluaannan.l.iIIfTTihhciened PPPPllllaaaannnn. IA1IA,,dnaamynniddnsuittsocothrddadeteoettetererrmsrmhmiiiannnleelatahaillallovnqqeuubeytehsstettiihoopennossPwlaaaerxnriissAaiidnnnmggdiniindniissttthchrereaettaaioddormmnisnihtniaosilstltirrnabatteteiiroocpnonr,n,ectilinnutttsheeierrvppeprr.eertotaavttiiisooinnonaasnnddofaapptphplilsiiccaNattoiioonnnquooafflissfuuieccdhh Plan. Any such determination by the Plan Administrator shall be conclusive -10- -10- 22775500..00119966 daaennfddectbbsii,nnddsiiunnpggplooynn aaanlllyl ppieenrrfssooonrnsms.a.tiTTonhh,eeoPrPllaraenncoAAnddcmimilneiinsaitsntryraatitoonrcrommnsaaiyysteaanddcooyppttinssuusccuhhchppoomllaiiccniineeessraananndddpptrroooccseeuddcuuhrreeessx,,teccnootrrrraeesccttheaannoyyr sdsthhheaeefteddcaeetnseey,mmspssuolpnnipeceilccyeeess,sassnaapyrrryyoicnooefrrdourddrmeeessasiit,rriaaodbbnlel,eetoettororrmcceiaacrrnoryayntcooiiuluoetotnratsthnheeiynpptiunuerrrcppporoonesssteeiassstotiefoonntfcshtyhisihssianlNNlsoounbncqeqhudaumolanilaifefniineeienddraPPalnlnaaodnnndtIIioI:s;cspprurricoomhvviiineddaexetdtd.eo,rnythhooamwswaehenvevneereor.r,r based upon uniform policies consistently applied to all persons that any policies, procedures, determinations or interpretations based upon uniform policies consistently applied to all persons in similar circumstances. shall be done in a nondiscriminatory in similar circumstances. manner 5h5i.22s.or her bCCelnlaaefiimimtsss PuPnrrdooeccreedtdhuuirsreeP..laAnAnnsyhyalPPlaasrrtutibcimicpiiatpnaatonowrtrriBBteeennneeffriieccqiiauarerysytwwhfohorodridesivsaiagegrwreeteeosstwwhieitthhPlaaannnyyAdddmeeiccniiisssiiotornnatrreoergg.aarrddTiinhngeg hPtPhlilseaannorreAAqhdudmeemsirtni.binesinstTterrfhaaitettoosrrPulssnahhdnaaellrlAdtrrhemeiissspnpioPosnnltaddrnaiintsnhowwrarlrilmittasiiyunn,bggmtthooiotwssaeuuvccwehhrriaa,tterreenexqqtruueeeeqnssdtutewwtsihtitetfhhoirirnenprlsseiyivxxtitpeyyewr((i66to0o0d))thddfeoaaryyPssalanoonfhfaiAhddisdsimtooirironnhhiaseletrrasrrtieeotccreye.iipp(tTt6hoo0e)ff dtduhanaeyydsesrreffsqooturroerorsedeta.abssyooTnnthaahbebelleePPalccaraatnuuiscseAie.p.damnTTtihhnoeeirsPPtBrlleaaantnnoefrAAidmcdmimiaanyriiy,ns,ihtsarotranwatdteoosvrrh'e'assrl,lrreeessxespttpeoofnnnodssretehthsshehaalrllel pbbleey wwprrieitrttitoeennd iifnnoraa manner calculated an additional sixty manner calculated ttoo(6bb0ee). understood by the Participant or Beneficiary, and shall set forth: @(a) tthhee ssppeecciiffiicc rreeaassoonn oorr rreeaassoonnss ffoorr aannyy ddeenniiaallooffbbeenenfeiftitss;; (b) bsasppseeecdci;iffiicc rreeffeerreenncceess t1o0 tthhee pprroovviissiioonn oorr pprroovviissiioonnss ooff tthhiiss PPllaann oonn wwhhiicchh tthhee ddeenniiaall iiss based; (c) oara ddBeeessnccerrfiiippcttiiioaornnyoofftoaannyiymaapddrddoiivttiieoonnhaaills iinonrffoorrhmmearattiicoolnnaioomr,r mmaaanttederriiaaanll nneeexccpeelssassnaaarrtyyioffnoorrottfhheewPhPaiarcrtthiicciisppuaacnnhtt information or material i necessary; and or Beneficiary to improve his or her claim, information or material is necessary; and and an explanation of which such (d) informaaanntioeenxxpplalaasnnataottiiotohnneoosfftettphhsee tPPollaabnne''sstaccklleaaniimmissf trreheevviiePewawrtippcrrioopccaeenddtuuorrere Baaennnddefooittchhieearrryaappwppirrsoohpperrisiaattteeo aianppfppoeeraamll atththieeonPPllaaasnn tAAoddmtmihneiinssitstretrapatstoortro''ssbddeeecctiaisskiieoonnn. if the Participant or Beneficiary wishes to IIwffritththteeenPPaaarrpttpiiceciaipplaanwntittoohrr tBBheeenneCefofimiccpiieaanrryysaddtiiissaoaggnrreCoeeossmwwmiiittthhettehheewdidteehciiissniiooonnneoo-ftfhuthhneedrPPelldaanntwAAeddnmtmiyniin(si1ts2rtr0aat)toodrra,,yhhseeaooftrrersshhreeecssehhiaavlllilnffgiillteeheaa wwPPillrtaaihnnttieAnAnddnmaiimpnniepistnetyiarslat(trw9oa0rit)to'hsrd'tsahyerrseeCssoppofoomnnistspese.e.rnescTTaehtihipeoetnCCooCfomomtpmhepenmesnaipastptateetiaeiloo.wnn itCCThoohimnmemomiCntoiettmt-eepheeeunnsssdhhaaraletllldiorrtenwesspeCpnoootnnmyddm(iii1tnn2t0wwe)reridittmaiinyangsyg,attofohteossrwuuerccevhhceearainn,vieaanpxpgptpeetehanaledl wtrthheieesthprrioeennppsllnyyeinsppeheeatrryliiloo(dd9b0eff)oowrrdraiaatynntseaanodddfdiiiintttisiaoornnemaacallennninpiiennt rceottyfycatlh((9c9eu00l))aadpdtapeayedyassltf.ofoorbTrehrreeeuaanCssdoooennmraasbpbtleloeenosdccaaatbuuiysosene.t. hCeTTohhPmaeermtCCiiotcotmiemppeaepnmnetsnaaosyart,tiiBhooeonnnweCCfeoivomcemimrai,mrtyeit,xtetteeeaenn''ddss srstehhhasealpllPlolnbbaosonetthhosnhsseewattlhliffobocrrehtthhwitttsrhhideetteecssnpipeseicicnioifnfaiiccimsrrbeeaaaansssnoeoednnrss for is decision calculated to be for its decision aaunnnddderreresffteeorrot(do0 btthhyee thssppeeeccPiiaffiirctcicppirrpooavvniitssiiooornn or provisions of Beneficiary, and or provisions of the Plan on which its decision is based. w55i3.3.t.h respecRRteecc(oo0rrddass..MeTTmhhbeeerrree'ggsuullaaorrrllyy FkkoeempptnterrreeccooMrreddmssoboeffr3'3MsM ssHhhoaaulllrl sbbeeoccfoonnSccellruuvssiiicvveee, aannCddrbebdiiinntddeiidnngguSouprpovoinnce,allll Cppoeevrrsesoronnessd wCmCaooitmtmhtpeeprnresesncsasoptaneitticooatnni,,nteoNNdootannhueunM rneiiieoonmnnrbePPleeearntn'sissniigooonn(r0 EEMFaaeorrmrmnmbiinneeggrrsssM((a""neSSdmaallFbaaroeriirree'msdderPPHeeMonneussmriibsooennrosEEf.aarrSnneiirnnvggiscs'e", prior to 2016) and Credited Service, prior to 2016) and aaCllllovooetthrheeedrr matters contained therein relating to Members and Former Members. o55t4.4h..er persoAAndsdviavssieshreesr.so.r sTThhheeedPPelleaamnnsAAdddemmsiinirinasibtsltreraatttooorradmmvaaiyyseaaapppnpodoiinansttsisssuutccshhulcleehggaaAlldmccioonuuninsssetelrl,a,taaoccrccowouiuntnthtaantnthtses,,aadacmctituunaairsriiteerssataainnoddn oooftfhttehhriisspNeNroosnnoqnqusualaailsiffiiheeeddoPPrllaasnhneIIiI.d. eTeTmhhees PPdlleaasnniraAAbddmlemintiionsitsartdravatitosoerr shal be cnttld to rol and assist such Administrator shall be entitled to rely with the administration a-11- 22775500..00119977 cciononnrcecllluuisasinivvceeellyuypuuopnp,oonna,,nyaannadddsvshhiacalelllobbreeiffnuuflllolyyrmpparrtooittoeenccttfeeuddrnwwiisitthhhedrreebssyppeesccuttctthoo aaadnnvyiyseaarccstt.iioonn ttaakkeenn bbyy hhiimm oorr hheerr iinn ggoooodd ffaaiitthh in reliance upon, any advice or information furnished by such advisers. 5H55e.5.r. duties PuPnaadyyemmreentnhtitsooNffoEEnxgxpupeaenlsniesfsei.se.d PTTlhhaeen PP1l1l,aannbuAAtddmamillniinesixtsprteraanttsooerrssshhianalclllurnnrooettdbbbeeyppa3aiiMdd ffooorrr ttthhheee pPpleearrfnfoorArmdmmaainnnccieestoorffathhioissr ooirrn chcooenrnnndeeucctttiiieoosnnuwwniidttehhrtththheeisaaddNmmioninniqsisuttraralaittfiiiooenndoofPfslasunucchIhI,PPbllaaunnt ssahhlalallellxbbpeeenppsaaeiidsd by 3M. incurred by 3M. by 3M or the Plan Administrator in 5a56g.6.a.inst anyIInnaddneedmmnnailitltyycolofafimtthsh,ee PPllolasasnnesAA,ddmdmianmiiansgitsertsraattaoonrrd.. l33iaMMbilsisthhiaaellsll iianrndidseeimmnngniifffyyrotthmhee aPPnllyaannaAActddmmionriinsfistatrirlaauttrooerr 1ffr0roomamctaanniddn ccaAoogdnmnaniinnenecsicttsttiioaronanntywwoiraittnhhfdottrhhaeealllaalddcmmeliaxniipnmiesinsst,tsrreaalsttoiisoo(snneionsof,cfludtthhdaiiimssngaNNgoorennesqaqusuaaoanlnldiaifbiilleeieddabaPPitllliatatnionersI1nI,e,ayaarsnnisddisfnohsgehasal)fllrldoidemnecffueerannrnddeydaannaidcdn/t/oocrorornrrneefeiiamcmitlbbuiuuorrrensseetwotithhteehacPPtallnaaiynnn pecApnledadnimdimini,nnggioslrtoorsras,tttohhrrrdeeafaaomtteraengnaeeeldd,l ccelllxaiapiaimbeminlioostrerysaanno(yyrinaacecclxtutiipdooeinnnngsooerrrpperriasoosccojeenueedaddibciilnineaggllaaaytrrtiiossdriinnengetgyettr'hshmeeirrfneeefeferrdsoo)mm,tio,.nuucnnuhllareervessessd aarinnneddstuctlooottenthdhneeecfeetrxixoottmenennttwthttiehht.aahttPaaalnnnayyyn AcAldadmimimnii,nsitslortrasatst,oorr'd'ssambbaaaddgeff,aaiittlhhiaoobrrilggitrryoossssornneegeglxliipggeeennncsceee.. is judicially determined to have resulted from the Plan o55f7.7.3. M is deSSseiergrvvniaiccteeeodofafsPPtrrhooecceeexsscssl..usIiInvneaannaygyelnleetggafalolrpprrreooccceeeieeptddoiinnfggseiirnnvvvioocllevvoiinfnggprtthohiicsseNNsosonndqiqurauelaciltifefiidecd(d0 PPslluaacnnh IIPI,l,atnth.hee SSeeccrreettaarryy of 3M is designated as the exclusive agent for receipt of service of process directed to such Plan. AARRTTIICCLLEE 66 AAM MEENNDDM MEENNTT AANNDD TTEERRMMIINNAATTIIOONN 6a6.m11e.ndments wRRhioiggshhett pttrooojAAemcmteenednd.dcos.ts33dMMo''snsotBBooeaxarcrddeeoodff$DD2i5irr,eec0ct0ot0or,sr,0s,00tthhieen CCaonoymmpecpanelsneasnatdtiaioornnyeCCaorom)mmamintyitttedeueelyoorrau((otonhnlolyyrizffoeodrr osoafumffbfiiemccnieetdrrtmoiofnefgn33ttsMMhewmmahamoayseyendaapmmmroeeejnnnetddctoeoordrr mcmmooodosdidtisfiffiydyc,o,atiinnniootwwnhehotxoolcleeetheoeodrrs$hii2nan5rppc,0ahar0orttl0,,d,0etth0rhisi0oss fiNNnoo3nangMnquyua(laceilaxiflfceiieenepdddtaPPtrhllayaat,nenatrIIIf)o taaathtneyaaenndxyyutelttyniimtmaeenuetcwwheioisttrshhiazooreuuydtt tstEouoxbcccmhooaimmntptgiplnely,gy 3thwwMei'ittsahhmBaaeoppnappdrllmidicceaaonbbfltleeDoirrccemoocrrotppodoorirrsfaaitcoteeartitooohrrnessCsteeooccmuutprhrieiettniiseesasshtairllaeoawhwno,,lCdoooerrmrsmaaiopptpfptll3eiiMcceaabbs(lhleeaexllcrreuuhpllaetevsstehaoottffh,etttohehxeetchleNNueseeiwwxvteenYYatouotnrrhekkocreiSSstttsyooaccr0kky mEmadaoxv_kcekhereasaaenlmmgyeee,nandf3dfmM meecetn'sntttBshseowworixiittgdhhhtorrseefossDfppeeiacrcenttyctttoooMrbbeseemnnobeerfefitritht,sse uuFCnnododrememrreprttehhnMiissseaPPmtlilbaoannne)).r.CooHHrmooBwmweenveietevtfreeie,cr,isannhrooaylaalammhceqeanuvnidedrmmetehdenenuttneoodxrercrlmmuotsodhidivefiefpiircacoauavtttiiihosooinnroisnstyhhsaaoltlolfl such Plan adversely such Plan aiinnffeeeffcffteetcchttepprrriiigoohrrtttsooossfuuaccnhhyaacMcttiieoonmn..ber, Former Member or Beneficiary acquired under the provisions of 66t2h.2.r.ough its TBToeearrrmmdiinnoafattDiiioornnec..toW Wrshhioilrleethiiett eeCxxoppmeepccettnsssttaooticcooonnnttCiinnouumeemitththiitsseNeN)oonnrqqusuaclarileiffisieeddthePPllraainnghItIIl tiionntddeeefrfiminniiinttaeetllyey,,S33uMcMh (P(aalccattniinnaggt ataphnanryyyotuttiighmmeheebiaetasnnneBdfdiotffasoorrrdalaaornnefyyaDdrryieeraaecsscaootnmon.re.sdTTouerenmrtmdhmieeinrnCaattohtiiemoonnpporeoofnvftsitahshtiiiiososnnNNsoCoonfonqmqusauumlcaihliitfftPiieleeeadd)nrPPeillnsaaenenrfvfIIefIecsssthhthapalrellilronnirgoohtttotaattffohffeeetccetttremr33miMM inn'aa'sstteiooosbnbul.licigghaatPtiilooannn ttaoot. pay the benefits already eoxned under the provisions of such Plan in effect prior to the termination. 12 -12- 22775500..00119988 AARRTTIICCLLEE 77 CCHHAANNGGEE ~ IN CCOONNTTRROOLL 737M.11,. this NoDDniqisusttarrliiibbfuuitteiidoonnPlFFaoonllll1o1owwshiiannlggl CCtehhraamnnigngaeeteiinnaCCndoonn3trtMroolsl.h.alUlUppioomnnmettdhhieeatooecclccyuurrdrrieesnntccreeiobuoftfeaathCCehhaarnneggmeaeiiinnninCCgoonantctrrcoorllueoodff cr3reaeMtstiihr,ertemphmaieesynnmtNtebboneetnnnsqeeufifianittlssiafmihheoeedurrenePutulnnsaddneeeqrIruItatosolhttathholeel ttrrheeeerssmpppeericnectstaiietvveneetaMMvnaedelmmu3beMebsreorsssf,h,saFFulloocrrhimmmaeemcrrcerMMdueieeamdmtberbleyeertrsidsriseaatmnnredidnbtuBBteebenenentefheffieiicctiaraserrmiiaecsassioniifninntgllhueumamdcppactrsseuuueommdf tcathlhaleeshoCCfphhaaatynhnmeggeelniiuntnsmCCpiononstnarutmormlo.ol.uanmTTtoshhueeenqtCCusooammlwpitepolneltnshbaseaettipipooraennisdeCCnoodtmmimvrmciaelttuiitletyceseeotssofhhasatlulhllcehhhraaaevvcseepcerttuhchteeeiddvdierissecctMrirreeeetmtmiibooeennrnttstoo,bddeeenFcceoiifrddimteesewwrahsheMeotetfhhmetebhrreessroodmsmaeteeaonoordrf `BaBcelelonnmeopefaiffniccytih,iaaerriiweelshus,im, cpoohrr pswwuriomillvlliadbbmeee ofaaouprpnppttlslhiieeewddpialttlyoomwwbeaeanrrtddpaofiffduullallldyylirtppehacaeitilddaymaaotnnounnnuuttihitsteyytrhcceaootsnpntwetrrocaautcciltvtdsse oiiMstsshsueeuemredwdbiesbbreyys,haaaFnnvoerAAmb++eeerrrnaaMttpeeadedimdiibnnaessfruiuserrraanantncchdeee cCCohhmaannpggaeenyiin,n wCCohonintctrhroolplrppouuvrrissduueaanfnottrttoothttehhiipssaNNyomonneqqnuutaaiolfiffiiaeelddl tPPhlleaannamI1.Io. unts that would otherwise have been paid after the s77h2.2a.l.l be deDDeemeffeiidnniitttiiooonnhaoovffeCCohhcaacnnuggreeediinnifCCotonhnterrteroolils.. aFFo"orcrhppauunrrgppeoossieenss toohffetthohiwissneAArrrtstiihccillpee 7o7,,faa3CCMh,ha"anngg"eechiinannCgCeoonntintrrooellffooeffct33iMMve Tccsorhoneantaltrlsrooublrleoyoffdree33gMeM..m",se"edcaatntiodon/nohrda|ava4e"/"0cc9ohhocaAacn-nugrg3reer(e)idinn(itot5hfhr)eethosoeuwrcewnheiorsnsthhaeiepr"ocorrfhefaaganusslgusabuethsbitisonatninatntohirtpiegaaluloippwdooarnrntteiicroosennhioisopfsfuo33eMfMd'3s'usMnaad,ss"esseret"stcs"sch"caatansisdgoeendfe4ifini0nn9eeeAddfofeuufcnnttddihveeeerr TCCorodedeae.s.ury reg. section 1.409A-3(i)(5) or such other regulation or guidance issued under section 409A of the 7N73o.3.n.qualified PDDleaenttee1rr1,mmitinhneaapttriieoosnnenootffvPParlreueessoeennftet aVVcaahlluuMeee.m.berEE'xxscc,eepptctawwchhheeFrroeermooetthrheerrMwweiimssbeeereex'xppsrreeassnssdllyycappcrrhoovvBiieddneeeddfiiicnniattrhhyiisss NrraeesommsnauaqimiunnpiatinnliiggofniesaadccaccsPrrulutaeehnded ICIrro,eemtttihpirereeemnpmseeraennttstiebonbenetnnveCeaffoiliuttmsseihohteefrreeeea,uucnnhdidneeMrrtsessmhhdaiablslleclrrb'bestee,ioeddnaee,ctthemerramFmyoiinrnameedddoepritinMnfoaaerccmccsboouerrcddrh'aaspnnuaccrneepdowwseieiat.thchhssBuuccehhneaafccitctuuiaaarrriyiaa'lsl assumptions as the Compensation Committee, in its discretion, may adopt for such purpose. 77a4.m4.o.unt of aFFleeeersseaaasnnonddabEElxxeppelenengssaeelss a..nd33MMaccssohhaualnllltippnaagyy ftteooesecaaaccnhhdMMeeexmmpbeebnresr,e,sFFooinrrcmmuererrreM Md eebmmybbeserurcaahnnddMeBBmeebnneeefrfii,cciiaaFrroyyrmtthehere M aMlamewemosmuubibnetetrrcoooofmrr maBBleleennnreceefeafidisccoiiabnaryrayybtlheiienn lMseseeegmecabkkleiinnargng,dt1oF0aocoorcbbmotteuaariinnntMineoogrrmbeefenenferfoosrroccraeenBdehhniiesesfxioopcrreinahhsreeeyrrsforriiirgngshchtuutssrcrheuudnnpddueberryrpotthsshueiisscshAAisrM rtdtiiicecslmlemeibs7e7,s,r,euudnFnlbloeeyrssmsstheaaer clctaohowueurrstatumiaatossucbbnoeetmiinnmoggfessnappculuerrdiirooebuuaysssotoohnrreafbfrMrliievveoomtlloaobuxuses.ra.,nFd33oMMrfmisnsehahanralclM lilaaalellmsspoobleapprnaanyyoirnttooBg ceefanaeccechhfsicMMaieanermdmybeebfxoerprr,,esnFFusoocehrrsmmpeeiurnrrcpM MuoresermemesbdbeiesbrrydaainnssmdduciBBhseseneMnedeeffimbicbcyieiaatrrhry,ye tFFBheooenrremmf~eiexrcrnioaMMurneyetommofbbfpeeararyllmoorerrenaBBtseesonnenepfafuibircclsiie~uaraxtynyatxiitnnaontccdhooinsnfninAneercacttniticicooilannel 7ww.pilitatShhnuncttihhnheegparrfeyeeccmeeeesiinppatttnodbbryyerxesspuiuecmcnhhbsuerMMsseeemimmnbecebnuertrr,r,sehdFaFlooblrrymmbeeesrrumcaMMhdeeeMmmnbeboemerlrbaetooerfr,r tBrthehealanannteefttdhihceeieaxeerpnyneddnosefoosfpf.attyhhmeeIeFrarneecctMsiippepiimeuenbnrtset'u'ssranttiatasxxtoaaaSbbtpllheeeicsyyiAeefaairrrteidcfflooeElllmlo7op.wwliiSonnyuggcehetthhpaeeanyttdamaxxsaeaubbnclltheeopryyaeeryaearimrmeiinbnntuwwroshhreiimccrhheeinttmthhbeesuhrraresellcceiimbppeeiineemtnnttaidsiiennmccnauuordrsselatttohheneer raatehccleccaootfeuiurdnnstttedooxafpfyeotthnhfeseetsM Mh.eeemmIsbfeebvaree'rnM'tssheSSmmeeobppnaeartrrahaittsiifooaonnlSlffporroweoimcmnifgiSSetedehrrevvEiiMcmceee,pm, lbppoeaayryye'memseeannSntetdpooasrrruacrrteheiiiompmnabbyfuurmrrosseemenmmtSeeenorntvrtircsseehh.iaamllllbunnorosttebmbeeenmmtaadidseempparrdiiooerr ottono the first day of the seventh month following the Member's Separation from Service. Ee -13- 22775500..00119999 AARRTTIICCLLEE 88, M MIISSCCEELLLLAANNEEOOUUSS c88o.11nt. ractofeNNmooplCCoooynntmtreranaccttt booefftEEwemmepnpllo3oyyMmmeaennntdt..anTyThhiMisseNmNobonenqrquoaulariliffFiioecdrdmPPellraannMeI1mIbssehharal.lll nnoNotottbbheeinddgeeeeimmneetddhisttooPclcaoonnnsstshiattulltiebaae odcdroeeenetmtmoraeecdditntttooeorfgfgeeiirmvveeepwlaaoinnytyyhmMMetenhemetmbbrbeeietrgrwhotoerreonFFfoo3r3rMmmMeeraronMrMdeeaammnnbybeaefMrfrilttehihmaeetberreiigrtgohhottdrtoioFsbcobierepmlrrieeenrtteaaMiinoneeremdddbiiinnesrctt.hhhaeeNrgssoeeetrrhvvaiiinnccygeeooiMfnfe33tmhMMbiseoorPrrlaaaonnnr asaFfhflofaiirllllimiaaebtteree oMMreemtmobbeienrrteaatrtfaaennreyy ttwiimmieteh.. the right of 3M or an affiliate to discipline or discharge any Member or Former s88e.l22l. assign,NNootrAAasnssssfiieggrn,nmmpelneetdn.gte., NNaoontiMMceiepmambtebe,err,m, oFFrootrrgmmaeegrreoMMreeommtbhbeeerrrwooirrseBBeeennneefcfiuiccmiib~aexrryy,sshhtaralallnlshhfeaarvv,eehaaynnpyyotrrhiigeghhctattttoeo cocroommcmomunutvteeey,, tstbheehenelle,bbfeieantnsessefifigitntsus,,,nitdifrfeaarannnsyyf,et,rhpp,iasapyylaaebNbdlolgeneeq,uuunnaaddnleietirfrciittpehhdaiissteNN,PoomlnnaqonquruatglaialIIifgfiieeeaddorrePPollaathnnexeI1prI.wr.eisAAsslellllyeppnaacyydumemmceelbnnaettrrsse, daatrnnaddnfsotthfheeerb,rreiihggyhhtptssonttotohoneaaacsllslalitppegaanoyyabrmmleceenontntssvaenooydff bnbnoeeonnntletrirfaaainbtnsslsfefeerfuroaarnb,bldleeoe.rr. sNNutehbeijiistethchteerNrtotot,hhniisqtshuNNeadooleninfbgiqieuusdaa,ilcfifoiPineeltaddrnaPPctllsaaI,Inn IIlIfiaarnnbeioolrritiaaeennxsy,yprppeeoosnrsrgtltayiiogonnemdooefetfncthtlhaseereobdbreennteeotforfitittssosbfppeaayayananybbollneeMaehhsmeesbirrgeeenurua,nnbddleeFerrorsshhmaaaenllrdll bM MtoeeemalmitbatbbeaelrcerhoomfreronrBBt,e,enonergfeiafscimuiciabiarsjyreh.ycm.tetNNnoto,otopphrooerrtotdiiteoohbnnetrsoo,fflecttghohaeneltbbrpaeerncneotesfcf,ieittslssisappbbaaiyylyiaatbiabelnlseye, uuecnnnrddegedeairrgtettohhmriisseonNfNtosoannnqoyquruatMaiolefrimtfisibeeeddorfPP,allanaFnnyoIIrMI1msseehhmraallbllMebbere,emFbssuuoebbrrjmjeeocecrtrt tBrBoeeencneaoeftgitfnaiciccitiah~irmoxyn,ye,notfee,axxngccy~eepxptrntiigst1hho0tmttteohhneeatneoeyxxrtbteeeonnnttehtfeitrtthhalapettagya33alMMblperdoduecentetedesrresmmrbiitnnyheeessaPnltythahnaacttrweiiidttt ihtwwoirrilellslopfehhcooatnnnooy0rrM atthMheeeemmbccbrereeera,arttFiioooornnr,,mFoaaerssrmssiM eigrgnenmMmmeeebnmnetbtreooorrrr qrppeuuuacrrlossiguufanainniettdtiodt1noo0moaeafsatddniooycmmerresiegstlthiaiccttitoorrneesallanaottyriiodobennerssnweooifrrtiddtheeiprrnaytiiafhfebttlhmheaaetutanndddiooenmmrgeteshostfetiiccsPelcarrteneilloawanttiiio4tohn1n4ssr(epoos)prr(dde1eec)rrt(tAsosa)aottaiifssMffiiteeehssme bCtthhoeeedreo.rrreeqFquuoiirrrmeememreennMttssemoofbfeaar qualified domestic relations order within the meaning of section 414(p)(1)(A) of the Code. i88n3.3.a.ccordanGGcoeovvweeirrtnnhiitnnhgge LLlaaawswwo..ftTThhheee SpptrraootvveiiossfiioonnMssinoonffestthhoiitssaN,Nooenxnqcqueuaplatilif(fi0ieetddhePPlelaaxnnteIInfItssphhraaolllsmbbpeetiienndtteebrrypprrfeeettedeeddraaalnnddlaeewnnffoorrcceedd in accordance with the laws of the State of Minnesota, except to the extent preempted by federal law. d88e4.4c..lared illegSSaeelppaoarrraaubbnlleeenfPPorrroocvveiiassbiilooennssf.o.r IIannnytthhreeeaeesvvoeennn,tt saaunncyyh ppirrloolvevgiiassliiiootnyn ooofrf ttuhhniiessnfNNooorncngequaaublaiillififitieyeddshPPalllaalnn nIIoItiissafrrfuuellceetdd toohrer rdrieleelmmcealgaaaiirlnneiiodnnrggiulnlppeerrgnooafvvloiirssociioreonanussbnlehehneepfrrroeeoroovcffiesaaaibnnolddne httfhahoiidrss naNNenovoynenqrqrueaubaleasieloifnfnii,eeiddnsculPPcullhdaaennidllIIheIIegrsasehhliaiatnlylll obbree interpreted and unenforceability interpreted and eesnnhffaoolrlrccneeoddt as if such affect the as if such illegal or unenforceable provision had never been included herein. ld -14- 22775500..00220000 MMeemmbbeerr.: CCoommmmenencceemmeenntt DDaattee:: SSCCHHEEDDUULLEE I1 PPhhiill YYaatteess OOccttoobbeerr 11,, 22001111 ((sscchheedduulleedd tteerrmmiinnaattiioonn ddaattee)) sSiI-l1 22775500..00220011 33MM NNOONNQQUUAALLIIFFIIEEDD PPEENNSSIIOONN PPLLAANN IIIII ((AAmmeennddeedd aanndd RReessttaatteedd EEffffeeccttiivvee JJaannuuaarryy 11, , 22001166)) EExxhhiibbiitt 1100..3311 22775500..00220022 TTAABBLLEE OOFF CCOONNTTEENNTTSS INTRODUCTION PPaagg1ee INTRODUCTION 1 AARRTTIICCLLEE.1. DDEEFFIINNIITTIIOONNSS 2 1L1.L21. ACAonndnenuiyty SSttaarrttiinngg DDaattee 111134..23.... CCCDoioomsdmcpehepanersngaseattifiooornnCCCaouomsmmemitittteeee 11I1s6..45.... DEEFoRRisrIIcmPPhearrgMeefmobreCrause 111187..67.... FMMNooeenrmmqmbubeaerelrriMfieemdbPelran | 11119..189.0... NNNNoooonnnnqqqquuauuallaaiilliiffffiiiieeeedddd PPPPllllaaaannnn IIIIItil 111111..1112.01... NNNPloooannnnqqquAuuadaaimllifiiffniiiieeesdddtrPPPallltaaaonnnrII1II11II BBeenneeffiitt 111111..114323.... PRelatnirAemdemnti;niRsetrtaitroer RSeeptairreamtieonnt;fRroemtirSeervice 111L1I..116S45.... SSSSpupeeppecpcailirffaeiitmeeiedodnnEtEfammrlpoplmPloolyaySneeeeervice 1.16. Supplemental Plan AARRTTIICCLLEE.2. EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN 4 22221.1... EEPlaliriggtiiibbciiillpiiatttyyion 23.2.2. 2.3. Forfeiture Participation Forfeiture AARRTTIICCLLEES.3. AAM MOOUUNNTT AANNDD DDIISSTTRRIIBBUUTTIIOONN OOFF BBEENNEEFFIITTSS 4 333.2.11... TAAdiddmdieittiiooofnnaaPllayMMmooennnttthhllyy BBeenneeffiitt 333334..23.... TFFProiomermrCeoooofmffmPPPeaaanyyycmmmeeeemnnnetttnt Death 333356..45.... PBBInerecennaeeCpfafioicccmiiitaamyrryyencement Death 3.6. Incapacity AARRTTIICCLLEE.4. UUNNFFUUNNDDEEDD PPLLAANN 1100 4442.11.. NNNoooTCTrournuststrtibutions by Members 43.4.2. 4.3. NUUnonsseCeccouunrrteerddibuCCrtrieoeddniisttoobrrySStMtaatetuumss,bers -i- 22775500..00220033 AARRTTIICCLLEES.5. PPLLAANN AADDMMIINNIISSTTRRAATTIIOONN 1100 555...11.2..PPCoolwaweiermrsssaPanrndodceDDudututirieeessofotf thhee PPllaann AAddmminiinsisttrraattoorr 5555...3323... ARCRdeelvacciioomsrreddsrsssProcedure 5555....5645.... APPInaaddyyvemmimseneeninrttstyooffofEExxtphpeeennPssleeassn Administrator 555...677...ISSneedrrvevimicceeniootyff PoPrrfootccheeesssPs.lan Administrator AARRTTIICCLLEEG.6. AAMMEENNDDMMEENNTT AANNDD TTEERRMMIINNAATTIIOONN 122 666.2.11.. TRReiiggmhhittnattootiAAommneenndd 6.2. Termination AARRTTIICCLLEE7.7. CCHHAANNGGEE IINN CCOONNTTRROOLL 1122 777.2.11... DDDieisfstitrnriiibbtuuitotiinoononfFFCoohlllaloonwwgiienngginCCChhoaannntgrgoeeliinn CCoonnttrrooll 7777....3423.... DDFDeeeeetftseeinrrammitniiidonnanaEttxoiipoofennCnosohfefasnP.PgrreeessieennnttCVVoanallturuoeel 7.4. Fees and Expenses AARRTTIICCLLEES.8. M MIISSCCEELLLLAANNEEOOUUSS 1133 878..121..NNNooo CACosonsntitrgraanccmtteoonftf EEmmppllooyymmeenntt 7888.3..423.... NGGSoeoopvvaeAerrrsannsbiiilgnnegngmPLLreoaanvwwitsions 8.4. Separable Provisions SSCCHHEEDDUULLEE I ---- sStI-l1 AAPPPPEENNDDIIXX AA ---- CCLLAASSSSEESS OOFF EELLIIGGIIBBLLEE EEMMPPLLOOYYEEEESS AANNDD AADDDDIITTIIOONNAALL BBEENNEEFFIITTSS AA-d1 AAPPPPEENNDDIIXX BB ---- SSRUUETPPPIPLRLEEEMMFEERNNOTTMAA3LLMPP'EESNNRSSEIITOOINNRPPELLMAAENNNTBBEEPNNOEERFFTIIFTTOSSLFIFOOORR| A33MTM OPPIRILLOAOFTTTSSEW WRHHAOOGE 60 BB-l1 RETIRE FROM 3M~S RETIREMENT PORTFOLIO I AT OR AFTER AGE 60 -ii- 22775500..00220044 33MM NNOONNQQUUAALLIIFFIIEEDD PPEENNSSIIOONN PPLLAANN IIIIII ~ITNRTROODDUUCCTTIIOONN pPPruuorrvppioodseseed::efTTehrhreeepdpuucrroppmoopsseeenoosfafttthihiiossnNNiononnqthqueaulafiloifrfiimeeoddfPPaeednndssiiitooinnonPPalllaannreIItIliIr((ehhmeeernrcetiinnbaeafnfitleeirrtttshhe(e0"aN"NsooennlqqeucuatallgiirffiioeeuddpoPPfllaapnnarIItIIIcI"i"p)iaisnsitstoo. pe`aamnrnopddlvottihdhyeeeeiierrdsbe.bfeeennreeTrfefhiidiccsiicaaoNrriomiencspgeuiinannlsttiahhfteeiioe33ndMMinPElEtamhmnpeplfIloooyrymeieseeoiRRnfeteatetdiinrdrdeeiemtmdioeenntnotatlsIIrnunecpctoipormlememeemeePPnnlltatannbteh((nheheeerEfrieeRtiisInnatPaoffitoaeerrrisge"i"lEneEaRcRltIlIPyPg"r"o)a)udaaponnpddotfeccdeperartbtxaaytiiinnc3iopoMtathhneeitrnsr te11hm99e33p11rleoaatynnierddeesmaa.essnaatTxmhbneieesnnnedNdfeeioddtnsfqfrpuroroamomlvifittiideimedmdeePuttloonadntteiimrImIeeIthtiteshhee3irrneMeataefftnNteedorrne..dquTTtaohhliiisssfuNNepodponlnqePqumeaunleasinliiftofiinteehddePlPPEallnRaasnnIPI I1IaIonrdiiissgIninTn,ooattbloliiyntnhtteoaendfndodepewddtheidttoco hbddyuupppr3loliMivcciaadtitneee trrCheeoettdiierrr.eeemtmiereennmtt ebbneennt cebffeiitnssefttihhtaastt paarrroeevssidttrreiidccttlluyyniidnnereexxthcceeess3ssMooffNliiommintiqtaauttaiioloinnfisseduunnPddeeenrrsssiooecncttiiPoolnnan44s0011I((aaa)n)(d(117I7)I),,, b44o00t22h((ggo))f and 415 of the which provide and 415 of the Code. nHHiaismstteoodrryy:t:he33SMMupooprrliieggiminneaanlltllyaylaaddPoeopnptsteiedodnaa PnnlooannngquouafalliMiffiiineenddepspeoenntsasiiooMnninppillananng ooannndNNoMovavneeummfbbaecertru77r,,i11n99g778C8.o. mTTphhaiinssyoorr(iighgeiinrneaaillnppalflatanenrwwtaahsse na""dSSaoumuppptepipdlolneet.mmheeennStEtfauaflplepcltPePilmvlaaenen"nJ")at).a.nluaPreynTTshhi1,eoen19PSS9ulu3app,npplolteehfmmeeMeSnniutntpaanlplelseomPPtellaaannnM tailnwwiPanalsgsananaawdmmaeeM snndaadenemdudefnadcffetrruodormimnagndttCiimromeeemstpatat(oe0ndy att(ishimmeteerweoinaaasfffeteteperrarrathiittteess ppaldlNaaoonnnsps:qt:iuoanl.tithhfeeiEefd"fN"ePNcoeotinnnvsqqeiuuoaaJnllaiinfPiiuleeaaddxnyPIPee1on,nfss1iMio9oin9nn3n,PePltslhaaoenntaSI1 uMopoifpfnlieMMnmiginenannnneteadsslooMtPtaaalnaunMMfiawincnaitisnnugrgaimnaagennnddCdoeM mMdpaanaanunnufydaf"ac.rctetusurtTraiihtnneeggdpraCCosoovmitmwsppioaoannnsysye""poafraatannhtddee rra"eeNmssetotanantdteqeemumdaeelnniftftrisseodmssuPutppeieenmrresssieoe(ddn0eetdPdilmaaaenllllsIIippnrorciifeooM rrthivvenieenrrressaiisdoooonntpasstiMooonfif.nittnhhNgeeonaSSnguuduppapMplllieeafmmnieudenfntaPtacalltlaunrPPinlIlaagnpn.r.CovoimSSdpueuscacnhhsyu"rrp.eepssltTteaahmtteeeemnmpteerannolttvssibseihhnoaaenfvvsieetosbbfteethheeanent aSaarurmeepepnslsttderrmeiiccedttnllftyyraoliimnnreteeitxmxiccreeeessmtssoentotoifmfbeessneeesccfittiniitocosenn, tb44hu11et55irefaoofdffeocpttthhtiieevoenCC.JooaddnNeue.oa.nryqNNuoa1o.nlniqf2qui0eau0dla9i.liPffilisaeeunddchIPPplplaralonnavniI1dI1heaspsprrsobouvevpeiidpdnleeeddammecceenenrrtdtataaeliidnbnetnaaodeddfdpiiritttsoiivootinnhdaaaellt 4sssuu0u2ppp(pppglllee)eommmefeennnttttahaaelll Crrroeeedttteiirir.eermemmeeennnttt benefits benefits, benefits tbthhuaattt eaafrrfeeecssttitvrriieccttlJlyyaniuinnareeyxxcc1ae,ss2ss0oo0ff9,lliismmuicitthaattipioolnannss huuannsddeebrreessneecctatiixoonnnen44d00e11d((aat)o)((11p77r)o) vaaidnnded 402(g) of the Code. sEEufffpfeepccltteiivmveeenJJtaanntuuhaaerryyER11,,IP220000b99u,t, tthwhiihssicNNhoonnqaqurauelailnifofiiteeddstPPrillcaatnnlyI1I1Iinwwaeasxsceeesssttsaabbollifisshhleeiddmitttooatppiorronosvviiddueendrreeerttiirsereemcmteeinnottn bbee4n0ne1ef(fiaitt)ss(1tt7hh)aa.tt 44sPu0l02ap2n(p(ggl1e))1maapernninddotr44t11tho55eJooaEffnRutthahIrePeyCCob1od,udet2e.0.w0h9AAinncwyhyhiaacannrhdde waaenlllrloetddeensffoteertrrircrseettlddryiccctoiolnymmpipeenexnncessexaacststeiisoosonnfooofblbilllmiiiggmiaatiatttitiaoiotonninosssnsaaccuuccnnrrdduueeeerrdd ssuueennccddtteieioorrnnNNsoo44n0n0q1qu1(au(aala()il(i1f1f7ii7e)c)d.d, 4P4P0l0la2a2n(n(ggI1))1I1.paarnniToddhre4t4o1p1u55Jrapnooouffsaerttyhhoeef1,tCCh2oeo0dd0cere9eawbbtieehoccincaaohmmfewe tehppriaeasrrtntPolaotonffstwraaiacnnstddlytwggioonofvvoeelexdrmc:neeesdds(1o)uufnntddloieemprrriotttavhhtiieedoenttseferoummrnsssduepoorpffsleettchmhteiiissonntNasNloo4nn0rqeq1utua(ialar)ile(ifm1fiie7een)ddt, bsbPeeelncanetnefifioIitIntIss.40hhT2eeh(rregee)uupnnuoddrfeeprrothsettehhaaoCttofdtaaherr,eee carnnneoodattti(o2ssnt)trriio1cc0tftlltyybhriisiinnnPgleaetxnxhcecweesbsaesssnetoofwiffotsfttohhtleedr:anllisim(fm1eii)rttaratotetidioponnrtssoovhiuudinnesddeefProrlrassnseeuccpittnpiitolooennmcoe44mn00pt11al@(lia)ar)(e(n11tci77re)e)mwaaienntndhdt spssereecocctvttiiiiooosnnnio44n4s000299u(AAngd)eoorofffttthhthheeeeECRCCIooPodd.deee,bbFyyarnod""mdd(eeO2l-c)litinnotokkbiienbnrggri"3"n,gtt2hh0teeh0e4ppaab(yytehmmneeeenfdniattttsepptrrrsooaevvncitisssifioieonornrne4ssd0uu9tnnoAddeewtrhraissthhiaPissdladPnPelldaainnnttoofftrrhocoemommCotpthdhleeiea)nppctaaehyyrmmoweueingtnhtht paDDcreeocccvoeerimsmdibaobennecrsreu33nw11id.,lehr220t0hs00p8e8,ec,EiRatthlhIPee.trppaFrrniirsoooirrtmioNNnOooncrnqtuqouluabelaseilriffi3iis,eesdd2u0cd0PP4llabay(nnthetIIIIhdeaootppIeeeRrsrSaaettceeatdidnodnwwti4iht0tehh9AU".l"Swil.niaknskeDedaedd""pdaepprdaatymytoemmnetetnhntetoCfpporrToodrvveei)iassstiihouorrnnoyssugiiihnnn cNcaooconcnnnoqneruedccatatliniioocinneedwwwiPiitttlhhhanstthp[h1eee1cwiiiamamlsppltlireeanmmnteeseninnttditaoeatdntiiootrnonulaeoopsfpflyissseesbccuotteitiodohnntboy44d00e9t9fhAAeerrIooeRfdfSctthohaemenpdeCCnootsdhdaeee.t.iUon.SFF.soourrbDjeeaacpvvtaooriittddomaasnneeccnceettioooonfff 4Tdd0rooe9uuaAbbs,uto,rfyttthhhiiiness NpCCeooorddnfeeqour((amlefiiid.feei..e,odn PddolereaffneearfrItrrIeeeIrddwJcacanosoummiapnrpetyeennnssd1a,atetdi2ioo0tn0no5)acc,rpreepaddlsiyittweebeddoltluuhnnatdsdoeedrrdeefttfehhereerrreePPddllaaccnnoommwwphephineicsncahhstatirrioeeollnnaattceseruddebdjiaaeltllcletdootorunsiidnenecrtppiaotarhnrtte4ttP0ool9aAnsseerrwovvhfiiicctcheehsse prreeellraafttoeerssmeeenndttiiroernleyot(ro0 services performed on or before December31, 2004 that i cigible after January 1, 2005), as well as deferred compensation credited services performed on or before December 31, 2004 that is eligible to be under to be the Plan which 4-1- 22775500..00220055 ""aggnrrdaannFddfofaratmthheeerrreedMd"e"mffbrroeomrmsaapp(paplnliidccaattthiieooinnr ooBffensseeefccittciioioannri44e00s99)AAwoohffotthhceeoCCmomoddeee.n.ceHHdoowwpeaevvyemerre,,nttthhoeefbbteehnneeefifirittssNppoaanyyqauababllleeifttiooeMdMeePmmlbabenerrIssI BaBpernenodnevefiFfisiotitormnuusnneddroeefrMr tNNehoamotnnbqPqeuluraaslanil(iffaiiinneedddeftfPPhellecaaitnnr aBI1tIetpnphrreeiifooitrcriiamttoroeieJJosaaf)nnuutwhaaerhxiyoyr bc11e.o,nm22ef00mi00te99nccwwoeimildllml epbbnaeeycmeddemeetteneentrrmtmoiifnannetehdddeiwiirninlNlaaoccnnccoooqtrruddabaaleninfcciaeeeddjwwuisPitttlhehadntthohIereI prareremcoceovonmimdspipmouuenttnseetddoottfofothtrrheeaifftslleePNccolttannaaqnnuyiyanlssieuuffbbifseseeecdqqtuPualeetannnttthIaaeimmteiemnnddemmoeenfnttthooerrirrrebessettnaaettefemitmeecnnottmoomff NNeononcnqequmualeainliftfiieaendddPPlwlaainnllIIInooortr btthheee accdrrjeeuaastttiieoodnn ooorrr amendment of this Nonqualified Plan III. EEthffeffeebccettn::efTTihthsiisspaNNyooanbnglqueulatilofifiMiceeddmbPPellaarnnsIIaI]Indiiss Fhhoeerrrmeeebbyry Maaemmmeebnndederedds aa(nanndddrretehssettaiartteeBddeneeefffffieecccittaiivrvieeesJJ)aannwuuhaaroryyc11o,,m22m00e116n6.c. edHHopowaweyevmveeernr,t, otophfrfeottvhbhieeesiinirroenNNfsiotonsnogpqfuaautylahialeifbfiliPeeelddatonPPM lliaannnemeI1f1Ifb1IeecBBrtseenanaetnefdfitithtFepporrtriimioomrreerttoooMfJJeaatmnnhuuebaiaerrrryysbe(11na.,enf22di00t1t1h6c6eoiwwmriimlBllelenbnbceeeefddimceeeittaneerrtirmemsiai)nnnewedddhwoiiinnlcaaoccmnccomootrreddbnaaecnneccadeedjpwwuiasitytthhemdttehhoneert recomputed o reflect tisor any provisions of the Plan in effect recomputed to reflect this or any ssauutbbtssheeeqquuteiemnntteaaoxmfneentnhddemmierenbntetnooerrfrriteesscttaoatmteemmmeeennnttcooefmf ttehhniisst NNaonondnqquwuailalilliffniieoeddt Plan Ill. be adjusted Plan III. or AARRTTIICCLLEE 11 DDEEFFIINNIITTIIOONNSS dEEoxxccceuepmptet nwwthheesrrheealssppheecaciviffeiicctaalhllelyymddeeeaffniiinnneegddsiinnscttthhiifssorNNtohonnqiqunuatlahileiffiiEeeRddIPPPllaapnnlaIInI1I,d, otthcheuemwweonortrd.dss aaEnnxddceppphhtrraafssoeerssdwwehfhiiinccihhtiaaoppnpspeeaaanrrdiinnottthhheiirss scdsuouobnbcsssutttmaranunetctniitvtvieeosnhppararloonlvvdhiisasaidivomoeninsnstihooseftfrmttahhteiisiasonNNnioononfgnqsqutuahsliaesitlifNffiiooeenrddtqhuPPailllnaainntfhiIIeeIIId,,EPtRthlhIeeaPnttepeIrIrlm.amnss daaonnddcuccmoonendnditit.tiiooEnnxsscooeffpttthhfeeorEEdRReIIfPPinssithhiaaollnllsggooavnvederrnnottthhheeer construction and administration of this Nonqualified Plan III. u1Ln.L1d.er SectAAinonnnnu3ui.2it.tyy SSttaarrttiinngg DDaattee.. ""AAnnnnuuiittyy SSttaarttiinngg DDaattee"" mmeeaannss tthhee bbeenneeffiitt ssttaaxrttiinngg ddaattee aass ddeetteerrmmiinneedd under Section 3.2. 112.2.. CCoodde.e. ""CCoodde"e" mmeeaannss tthhee IInntteermnaall RReevveennuuee CCooddee ooff 11998866,, aass aammeennddeedd.. o11f3.3.t.he BoarCCdoomompfepDneisrneascatttioioorsnnoCCfoo3mmMm,imtittteeee.. ""CCoommpepnesnasattiioonn CCoommmmitittteeee"" mmeeaannss tthhee CCoommpepnesnasattiioonn CCoommmmitittteeee of the Board of Directors of 3M. o11f4.4..an emplDDoiyissecce'hhsaarrggeeemffpoorlroCCyaamuuessneet.. f"oD"rDiirsseccahhsaaorrnggsee ffooofrr CdCiaasuuhsoseen"e"sootryr,"D"eDimisbsccehhzaazxrlggeeemddeffnootrr,CCacaouunssveei""ctmmieoeanannssoftthhaee ttceerrrimmmiiennaaottriioonna mom1if0iss3addnMeemmaeenemaadnnpiooltorrybiieunnesvv'isoonllevvesiimsnn,ggpalmomoydormerataelelnrtttmuuirrfpnpoieirttduurddieenea,,stohwweinilslsllffououlllf dmmdiisiisscschrcoeootnnnidedousunctocyttf,,, tooehrmreppbCeeeorrzssmzooplnneeamanllseammntiti,issoccconoonnCnddovuumcicctmttiiowwtnhehieicoc.hhf iaiss cddereittmrriiemmeeonntrtaalal to 3M and its business, as determined in the sole discretion of the Compensation Committee. 11S.5.. EERRIPIP. . "E"ERRIIPP"" mmeeaannss tthhee 33MM EEmmppllooyyeeee RReettiirreemmeenntt IInnccoommee PPllaann. p116a.6.y.ments undFFeoorrrmtmheeerrprM Moveeimmsbiboenersr.o.f_th""iFFsoorrNmmoenerqruaM Mleiemfmbibeederr"P"lammneeaIannssIoraa,affoofrrommreemrrereeemmmpppllloooyyyeeeeeewwwhhhooosiiess erreemccpeeliivoviyinnmggenbbteennweeifftiihtt p33NaoMMnyqmuhheaaanlssitsfttieueernrdmmdiPiennlraaatttnheeedd[1p1frfBoooerrvniesaafinnoiyyntsurrneoedafaesstorhonintshNooettophhrneeorqrvuittashhliaiaofnnniesodDDifiPsstlcchahhinaasxrIIgNgIoee,noqffruooaarrlfiCCofaraimuucssdeeerPelaamannnddpIl1olww.yhheooe wiisshoeesnnettiiettlmleeddplot1oy0maaenvvteewssttieetdhd Nonqualified Plan III Benefit under the provisions of this Nonqualified Plan III. 2-2- 22775500..00220066 a11n7.7..additionM MaelemNmboenbrqe.ura.li""fMiMeeedmmbPbelearnr""1mm1eeBaaennnssefaainnt eeumnmdppellrooytyeheee pwwrhhovooisiissioaansppaaorrfttiitcchiiippsaaNnnottniiqnnuatthlheiefEEieRRdIIPPPlaaannndd11ww.hhoo iiss aaccccrruuiinngg an additional Nonqualified Plan III Benefit under the provisions of this Nonqualified Plan III. 118.8.. NNoonnqquualailiffiieedd PPllaann II. . ""NNoonngquaulailiffiieedd PPllaann II"" mmeeaannss tthhee 33MM NNoonnqquaulailiffiieedd PPeennssiioonn PPllaanInI. 119.9.. NNoonnqquualailiffiieedd PPllaann I11I. ""NNoonnqquaulailiffiieedd PPllaann II I" " mmeeaannss tthhee 33MM NNoonnqquaulailiffiieedd PPeennssiioonn PPllaann IIII. 111.100.. NNoonnqquualailiffiieedd PPllaann IIIII.I. ""NNoonngquaulailiffiieedd PPllaann IIIIII"" mmeeaannss tthhee 33MM NNoonnqquaulailiffiieedd PPeennssiioonn PPllaann 1III. t11h.1i1s11.Plan dNNeosoncnqrquiuablaeildiffiiineeddSePPclltaainnoIInIIII3.1BBeenenfeifti.t. ""NNoonngquaulailiffiieedd PPllaann I[IIlI BBeenneeffiitt"" mmeeaannsstthhee bbeenneeffiitt ppaayyaabbllee uunnddeerr this Plan described in Section 3.1. C1Lo.11m22p.ensation aPPnldlaaBnnenAAedfdimtmisniionrsitshtrirsaatotoorrrhe.r su"cP"cPlelasansnorAA.ddmminiinsitsrtraattoorr"" mmeeaannss tthhee 33MM VViiccee PPrreessiiddeennt,t, GGlloobbaall Compensation and Benefits or his or her successor. a11t1.1t3a3.i.ned agRReeetftiiifrrteeym-mfeienvnett;;(5RR3e)ettaiirnreed..co""mRRpeeltteiitrreeemdmeefnnitvt""e m(m5e)eaaynnessaraasoSSefeppa"arCraratetiidooinnteffdrrooSmmerSvSeiercrvevi"icc(eeasaaffdtteeefrrittnhheeedMMuenemdmebrbeertrhehhaaEssRbIbPoo)tth,h ora Separation from Servic afer the Member attained age fifty-five (55) and completed five or a Separation from Service after the Member (hh5aa)ssyaaettattarasiinnoeefdd "aaCggreeedssiiixxtettyyd--ffSiivevere(v(66i5c5)e).". (as defined under the ERIP), e11m1.14p4.l.oymentSSereepplaaartraaitotiinosohnnipffrrwooimtmh SS3eerMrvviicacened.. al""lSSeeapfplaairxlaiatattiieoosnn ffforrroommanySSeerrrveviaiccseeo"n" mmoteehaaennrss taahassneevvteeherraannMcceeembooeffraa'sMMedememabtebhre'ro'ssr Discharge for Cause. employment relationship Discharge for Cause. with 3M and all affiliates for any reason other than the Member's death or TW Wrheheaetsthuhereyrr raaegS.Seepspaearcratatitoiiononn14ffrr0oo9mmA-1SSe(erhrvv)iicc(eei.hhaass woohccecctuurhrrereerddthiises fddaeecttteesrrmamininndeeddciruucnnuddmeesrrtassneecccettsiiooninnd44i00ca99tAAe toohfafttththeheeCCeoomddpeeloyaanneddr Taathnnraddetatttshhhueeeryeelemmrvpeepglllo.ooyyfseeebeecotirrnoeeanaassfoo1innd.a4eab0bsl9leyyArvaa-inlnc(ttehiiscc)iitpp(haaeitt.eeeedd.m, ptthlhwaaotthyennetooehewffuruorruttthhlheeedrrfpasseceerrtrsfvvoiicacrenemssdawwfcoeiorurucllusddmucbbsheetadppnaeectrreeffsoo(rirmwnmhdeeieddctaaathffettaeeetrsrrhaaacatencrtehetremtaapiielnnmoddypaaelttoeeeyoooerrrr tiilhnenavddeteelptpheeoennfddleebevnontentlaccooonffntibtdrroeaancctsatoeorfrri)v)diewwceoossueulrlpvddeicrppefeesorrrmmthmaaeenndeeenmnt(tlwplyhyloeddtyeheececerrreewaaaosssueeladttnoopenneoomrfpmomlroomorryeeaetfththeoaarrnn sattuwnwceehnintdntyydaetepppeee(rnrwccdeehennentttth((e2cro02na%tsr0)aoacnof%tfoerthm)h)eepolaaovvveyeererreaatggoheeer eliiemmmvpmmeleleoddoyiiefaaettbelohlyynasappbrrfeeeidceceeneddpsiinrenogrgvviittchdheiiisrrnttgyyp--essseriifxrxovir((mc33e66es))dtmmo(oowtnhnhtetehhethmppepeerlrroiiaooysddera((noolrreesttmshhetephlfafouunyllleltehppieerotrrryiio-oasddnixooi(ffn3ds6see)erprmvveoiinccndeetesshnsttt)oo.cttohhneetreeammcptpollroo)yyeoervr eiirff ttthhheee employee has been providing services to the employer less than thirty-six (36) months)). oSSteehppeaarrraabttoiiononna fffrriodomem lSSeeearrvvveiiccoeef ssahhbaasllellnnncooett ibbfeetddheeeeepmmeereiddodttoodooocccccsuurnrowwthhieilxleecetthehdee eesimmxppl(l6oo)yyeemeeoniists hoosnn ommri,illiiittfaarrlyyonllgeeeaarvv,ee,s, ossiilccokknlgleeaaavsveeothorer. ecoeommtnhptperllraoocbyty.oeeeneaFrrofeerittdaateiihnnilssseapaavureprrioiogsgfhhet,tabattsooelnrerceaeeevememifppistllhoobeyyommnpeaeenrnfitoit ddewwidoitntohhleys33inMfM,otaoonerrdxcsaaeonnedlaaoffsnffigiixlliiaa(sa,6ttee)tmhuuennorddeneetirhrssaaaronner,aaasippfoppnllloaiibncclaagbbeellreee, xspssoettacaltttouuantttegeioaoonsrrtthbhbayyet tctthhoweeennteertammycp-tpnl.lioonFyyeeoeere(2th9ww)iisilllmlpourrneretpttuuhorrsnnepe,ttroaoiolppedeearovrfffeooarirsmbmsbeossnneecrraevvfiiciwcdieelessloffbnooelrrys33uiM fbM,satinootrdrutasaeonndlaoaffofnffrigillsiiaaautstcee,.h.thseiNNrxeoot(ti6wws)iaitmthhrosesntatatasnhonddnpiianenbgrglieottdhehxeeipfffeotochrrteeaegtglioooeiinannsggte,h, aiaast cdtdwauuneeebnttteooy-aaennnxiyypneemmcet(ed2edi9dci)ca(alm0llllyoyansddttheefttepeorrearmmriiiocnndoaanbbotllifeenapupbhohsyuyesssniiccpcaeealrlwioooirrdllmmobefenennttsaoaullbleiismstmsiptputaahtiiearrdnmmefseoninxtrt (stth6uh)aactthmccosaaninnxtbhb(es6e)aeenmxxdppoeetncchtttaheetddpceattorouisorreeedsssuuitlflhtttehiinneemddlpeeelaaatovthhyeeooiersr c0anbebeuneaxbpleectteodpetorfloarsmt ftohreaductoinetsionfuohuiss porerhieord poofsintoiolneossftehmapnlosiyxme(6n)t.months and that causes the employee to be unable to perform the duties of his or her position of employment. -3- 22775500..00220077 R11e1.1g5.5.. sectiSSoppneec1cii4ffi0iee9dd-E1Em)mpoplloosyyueecehe..ot""hSSeppreercceiigffuiieleaddtiEEommnppolrlooygyeueised""amnmceeeaaninsssasuae""dssppueenccdiieffriieesddeceetmmipoplnloo4yy0ee9seA""oaafss dtdheeeffiiCnnoeeddde.iinn TTrreeaass,. Reg. section 1.409-1(i) or such other regulation or guidance issued under section 409A of the Code. M111i.16n6.i.ng anSSduupMpappnllueefmmaecentntutaralilnPPgllaCanon.m.pa"Sn"Syuu,pppptllheeemmpeernnettdaaellcPPelslaasnno"r" mmtoeeaNaonnnssgutthaheleiSSfuiupeppdpllPeelmmaenensnttaIallanPPdeennIls.siioonn PPllaann ooff MMiinnnneessoottaa Mining and Manufacturing Company, the predecessor to Nonqualified Plans I and II. AARRTTIICCLLEE 22 EELLIIGGIIBBIILLIITTYY AANNDD PPAARRTTIICCIIPPAATTIIOONN w221i..1t.hin a clEEalslisigogiibfbieillimittpyyl.|oyAAenenysy deeemmspcplrlooiybyeeedee ioonfft33hMeMAooprrpeaannndaaiffxffiillAiiaattaeettwwahchhooediisstoaa tPPhaairsxttipiccliiappnaanndttociinunmttehhneet,EERRsIhIPPa,l,laabnneddewwlihhgooibliiess to become a Member in this within a class of employees to become a Member in this Nonqualificd Plan 1 described in the Appendix Nonqualified Plan III. A attached to this plan document, shall be eligible 22M.e22m. bers oPPfaararttniidcciipbpeaagttiiiononnt.o. paEErmmtpiplclioopyyaeteeeessinwwthhhoois ffNirrossnttqussaaattliiissfffyyiettdhheePlccaoonnnddIiIitItiioaounntssomooafftiSSceeacclttliiyoonnwi22.t.11hoaaubbtoofvvueertsshhheaarllllacbbteeicoconommbeye the Compensation Commitice Members of and begin to participate the Compensation Committee. in this Nonqualified Plan III automatically without further action by S22h3.3a.l.l forfeFFiotorrfalfeleitirtuiurgerh.et.s aAAndM MebeemmnbebfeiertrsoorrunFFdooerrrmmetehrrisM MeNeommnbgbeuerarlisshhfaaillelldcceePaalssaeen ttIooIIbbweehaaeM nMeetmmhbebeeCrromooprreFFnoosrrammteierornMMeCemombmbemerirtaaennedd d`dsceheotatneelslrrummlfitoinanrenfetses,i,ftoiirannlolriirttisisgshssotootsllheeearnddwdiiisssccberreeendttieiiorofenintc,,stlttyuhhnaaotdtressriuuntdcchihhrisecM MNteleyommnbpqbeeuerrarfloioofrrirmeidFFnoogPrrlmsmaeenerrrvIiIM McIeesewmmfhbobeernerarnthyiissepeeCemmropspmlolnoopoyyereeneddsnattbbiiyyot,,ny aaCeccntotigimnnagggmeiaadtssteieana tcsthhooeelnds((uiib))lytmmaan3antnMufufofaoracrcottrauunrirsyeeooootrfrhessirtaawslleeisosuoebffsadiandinriyeyacrtippleyrrsoo,odduruocrcitnt(dissiliir)mmeimcillataalnyxrufptooaecrooftrorurriimnen icncooogrmmpssapeeltreevitititociifeoosnnspfwwoeicriittaahhlnyaamnnpayycehrppsirroononeddruuocycrtteommnratainetnquyuuffeiaanpccmgtteuaungrrteee,ddd oooinrrr fsfmuouarlmndniuisfsbhahyicinnt3gguMreooffoorreennasgngailyienneeooeeffrriiiantnnsggysouoprbrrsottidedeuciccahhtxnniiiseccisaam,lliolssraeerr(rivv0ii)iccomeerssainccnuoocfnnoaccmceeptrruennrtiieinntggoirossnsuuaccwlhhiethommafaacnschpyhieinncpeireraorylydumcootarrcmheeaiqqnnuueuiirfppymameconettrnu,tre,eqduuussiopeerddmseoiinnlntd,ttbhhoyeer 3m3aMMadneotourerfraaamcnnityuynoraoetffiiooitrtnssssstauhulbaebtssioiaddfiiaaMarnreiiyemessbp,,rewworidittuohhcrootuuFsttoimttrhhmieeleawwrrrrtiMiotteteeomnnrbiccenoornncssoieesmnntcptooeovftfiettrtihoheeend CCwbooyimmtphtephaneensnypasratpotiirvoooinndsiuCCoconotmsmmmoimaftntittuetheefiae.sc. tSueBBrceeetfdfiooorroneer m2ms3ao,alkkdiitnnbhggye aCCfooordmfmepetiepetnerumnsraseiatnptiairootoinnovinCCsitoohomnamtmaianittdtMeeeaenmsshohbpaaeplllrorggotiiruvvneeFitottyhrhmeeteM MoredeMmimsbecbemoernrbteoiorrnruiFFesooscrrumomcveeherrreeM MmdepemlbmboybyeetmrhreennnootpttriiooccrveeicsoooifofnnsiittusssltoiininfnttetgehnnittrsiieoolSnnaett1ico0otinoiisnnhnvivpo2ok.ko3eer, tttthhhhiieess provision forfeiture provision oopffrossvuuiccshhiossneerravvniicdceessanwwioittphhpiinnoraatuppneeirrtiiyooddtooofdf innsiicnnocenttytyin((u99e00))sdduaacyyhss effmoollplloloowwyiimnnggentththeeorddaacttoeeonosffulsstuuinccghh notice. relationship notice. or the AARRTTIICCLLEE 33 AAMMOOUUNNTT AANNDD DDIISSTTRRIIBBUUTTIIOONN OOFF BBEENNEEFFIITTSS 33M.1e1m. ber orAAdFddodirtimtiieoornnaaMlleM MmobonentrthhlulyyndBBeerennetefhfeiittE..RIPIInn, aatddhdidisittNiiooonnngttuooalttihhfeeicaadmmooPulunantnt ooIfIf RRseheattliilrreempmaeeynnttanIInnaccdoodmimteeioppnaaaylyaabmblolenett1ho0lyaa bM beenenemeffibittetrtooossruuccFhhorMMmeeemmrbbMeerermoorrbeFFroorrummnederreMrMethemembbeEerRreIeqPqu,uatahllisttooNtthoheenqaaummaooluiufnnitetdbbyyPlwwahnhiiccIIhhI ((saah))eaelxlxccpeeaeeyddssan((bb)a),,dwdwhihteierorene:a: l monthly -4- 22775500..00220088 ((a) isiMsettmhheebemmroonnbtythhlltyyheRREeetRtiiIrrePemmiefenntthtaItInnpcclooammneeptathhiadatttwwhoeouublelddnehfhiaatvvseebobereebenansppeadayytaahbbelleeatmtooosusunutcchhofM MtesembbenmeerofoirbtrFsFoeoornrmmrteherer M ffaaccettmoorrbsseddreebssyccrrtiihbbeeeddERiinnIPtthheiefAAthppappteepnnlddainixxpAAaidaattttthaacechhbeeeddntteoofittthshiisos rpplblaaannsedddooccthuuemmeaenmntt;o;uaannntddof its benefits on the (5) (b) uniisdsettrhheethmmeooEnRntIthhPl.lyy RReettiirreemmeenntt IInnccoommee aaccttuuaallllyy ppaayyaabbllee ttoo ssuucchh M Meemmbbeerroorr FFoorrmmeerr M Meemmbbeerr under the ERIP. StShuuecchhNoaanddqdudiaittliiioofnniaalcldbbePenlneaefnfiittIsshhaBalelllnbebfeeirterefpfeaeryrrareebdldettoo(0hheaerrpeeeiinnrsoaassn ttuhhneede"Nr"NotohnniqqsuuaNaloliniffgiiueeaddliPPflliaaenndIIIlPlIlaBBneenn1e1fe1iftist"h".a.llTTbhheeeraaemmdouocuuenndttbooyff tttthhhheeee NaaNmomononoguquunanutltailooiffffiieetthdhdeePPaallddaaddnniittIIiiIooItnnoBaalltehnmmeeoofneinxtttthhpelnlayytyabbnbeeenlcneeeefsfitsoittarpapyaapyyteaaorbbsalolveenotoioudnttddhhueeeprlsstiaahcmmiaseteiNppooneerrnossqofounnbaeluuninnfeidfdeieedtrrsPtthhlaeeFnoNNroIoInaInqvqusohauilaadlilalifnfbiiceceedodrfePPddlloaaunnucbeI|dtaa,bnnydda tM MNhoeeenmmqNbuboaeelnrriqfoouirraelFdFifooiPrerlmdmaenePrrlIa1MM1neBeImemInbtbeoeferirthtwwehhheeoorxetiieussnnnndtooenttreeecunnenttsliisettalslersedydaatanodvvaeeuvssntotteeiidldd sbbdueeuncnpchelfifibcitetantuueionnfidndteeorrufntthbdheeeenrEEetRRfhiItIesPP.EssRFhhIaoaPllrllbannevoocottboibdmeeaeensnectnevitietotsllfteeeddddottuoobaat,nnyya Nonqualified Plan III Benefit hereunder unless and until such benefit under the ERIP becomes vested. 33wi.22ll. begiTTniimamseeoooffftPPhaaeyyfmmiersentntot..f tPPhaaeyymmcaeelnnettndooaffrtthhmeeoNnNotonhnqqu(autlahieliffi"ieeAddnnPPulliaatnnyI1I1S1ItaBBreteninenegf.fiittDddaeetssecc"rr)iibbceeoddiniicnnidSSeeencctttiioownnit33h..11orbabonovevseet wffooilllllloowbweiingngigntthhaees M Moefemmtbhebere'rf'issrsSSteeoppafarrtaahtteiioocnnafflreronomdmaSSreemrrvvoiienceeth:; pp(rrtoohvveiidd"eeAdd,n, nhhuooiwwteyevveSret,ra,rttthihnaatgt:: Date") coincident with or next () (a) inMcMoeemmmebbeferorrss 2ww0hh0oo8sseewajjosobbmgogrrraaeddeetsshawwneer$ree23cc0ll,aa0sss0sii0ffiiewededraaess pCCeEEmOiO,t,ieLLdI1,,tLLo22m,,aLLk33e aaannoddnTeT-77tiwwmhehoosisreereppvlloaacnnannbeelded aeienlnleenccucotitmiitooyenn fiiionnnrl222i00e0w000888ot1wfao0aeesllleuemccmtotprt(eos0utmrrhe.eaccneeIiiv$fv2ee3att0hht,ee0iiim0rre0lNNyowoncneqlrqueeuaclatpiileioffrniimeewdditatePPsdllaamnntaodIImIeIIaBBikneeenn2ea0ef0fioi8ttn,eiin-nptiatmtyhhmeeeefinfrotorrermvmoofoocsfafubcaalhnne cM aMoneienmnmubciiebtydree'rni'ssnt NNlwioieontunghquoauoflarilaifnfieliuecxmddt pPfPollsalaunlnmowII.IlilInIgBBfeetnanheeeftifimiMtteesslmhhybaalelellrle'cccsootmimoRmmneeteiwnnrcaecmeseenmaatss.aodofefIttiFhnhees2uAA0cn0hnn8nuM,uiepittmyayybmSSettreaanrrttStiiennopggafrDsDaautatcetehes: cffBreoronoimnemfciiSSdteeesrrnhvvtaiilccwleeibtpephrrpiioooarrridnttooeinxbbtaeefcscoioolnmlmgoiliwennggilnugeemlliiptghgiisebbullM eem efafoomsorrbfRRetereht'tseiirreRAemmneenteinunrtiet,t,myhheiinSsstt.aoorrrtIifhhneegsrruDcNaNhtooennMgcquoeuaimanilcfbiifieideereddnStePPwplliaaatnnrahtIIeoIlslIr nBneeexxnttefffoiotlllslohowawliilnngbgetthhpeeaiM Mdeeimnmbaebrse'irn'ssglSSeeeplpuaamrraapttiisoounnmffrroaosmmoSfSeterhrveviicAceen;;nuity Starting Date coincident with or (5) (b) fOOrnoneme MSMeeremvmibbceeerrprccillaoarsssstiioffiie2edd00aa8ss wLLa33soopnnerTTmrriaatnntsseiidttiitooonnaamllaRRkeetetaiirreoemnmeee-nntttimLLeeeaaivvreerewwvohhcooabilinencceuulrrerrceetddioaan SSienepp2aa0rra0at8tiiootnno srfrerueoccmeme.iivveSe.SeruhhvciiisshceNNMpooenrnimqoqubruaetlaoriliff2idi0eei0ddd8 iPPwnllaaafnnsacptI1eI11IrtmiBmBieetetlnenyedeffictitotecmiitnn,akttahehneeda ffoaooncrrecmmo-tridmooiffnegaailnrnyr,eaavnnhonincusuaiibtNtyyloenqeiinunleaclllitiieicfouuineoodifnf P2aal0a0llnu8ummItIoppI hBsBeueermnnee.etfofiitt(SswsuhhhcaaihllcllhMccosoehmmmalmmlbeeebnrneccedteirduueapptioonenndfahahsicisstasstRccimehhteeeiddlruyuellmeeeeddlnetddcatat,fteoeoaronfpdfuttreaeprcromcmsioeinnrsdaoatitfniioSgonenlycgg,tiiivvhoeeisnnn N3iinno3SSn)ccqhhu:eeaddluiufllieeedI| aaPttlttaaancchhIeeIddI hereto (which shall be treated as a Retirement for purposes of Section 3.3(b)); ((c9)) 2FF0oo0rr9mmewererrMMeeepmmebrbemerirstseccdllaass0ssiimffaiieekddeaaass oLLnI1e-aatnniddmeLLi22rrwwehvhooocaiibnnlcceuurrlrreeecddtiaaonSSeeippnaar2raa0tt0ii8oonn10ffrreoolmmecSSteeorrvrveiiccceeippvrreiiootrrhettioor Ne2Nlo0oen0cnq9tquiuawolaneilriwffeaiieespddemrPPmalldaaitennteiIdInIIIItoBBemenneaefkfieitt in the form of an annuity in licu a one-time irrevocable election in in the form of an annuity in lieu ofa 2008 of a lump sum. to elect to lump sum. IF a timely receive their If a timely election was made in 5-5- 22775500..00220099 22th00e0088c,,alppeaanyydmmaerennmttoonoftfhtthhceeioirrinNNcoiondnqequnuatlaiwlififitieehddoPrPllaannnextIIIlIfoBBleelnnoeewffiiitntgsshhtaahlelll FccooormmmmmeerenncMceeemuubppeoornn'stthhaeettffiiarrissnttmddeanayty ooofff taahggeeescisaxixltetyyn--dffaiivrveem((6o655n))t:h; coincident with or next following the Former Member's attainment of (@ (d) hAAallvlleoottnhhoeetrr cFFooomrrmmmeeernrcMMeedemmbpbeaeryrsmsewwnhthoooiifnncctuhuerrirrreeddNoaanSSgeuepapalarirafatitiieoodnn Pffrlroaomnm 1SS11eerrBvveiicnceeefpiprtriiooprrrittooor22t00o0099Jaaannnuaddrwywhho1o, sh22ia00nv00ge99lensslhohautalmlllcposrrmeueccmmee.iievvnee(cFeppodaaryyptmmhaeiyesnmntpteuonropftfototshhefee,itirhrtehNNeirooMnnNeqmqoubuaneaiqrl'fiufsiaieelAiddfnienPPdlulaaiPnntlyaI1nI1IlSItBBIaeIrentnBeiefnefignitteDfaiiinntteJpJaasrnniuouarh~rxybt,yoea,JJ2a2al0n0n0uu09~a9lrxyyiinn 1, 1a, s2i0n0g9le) lump sum. (For this purpose, the Member's Annuity Starting Date shall be Janu~xy 1, 2009.) NoNfoottSwweipittahhrssatttaainnoddniinnfggrotthmheeSffeoorrrveeiggcooeiinnsggh,a,liilnn btthehgeeieenvveeansnttottfhhaattthetthhfeeirMMsteemdmabybeoerrfitisshaaeSSpspeeecvcieifnfiiteehdd mEEommnptplhlooyyfeeoeel,,loppwaaiyynmmgeetnnhtte ooMnneaamccbcceooruu'nnstt (oSSaefecppcSaaorerrapadttaiiirnooagnntl,i,yo,naannifddfrpottamhhyeemSeffeniirrrtvssttiscpepiaansyyhtmmaheleenlntfbtoerssghhmiaonallfllasaiinnnoaccfnllunutdhudeeietfyaail,lrllsstuppcaadyhyaymmeaenonnnftutsstihtedydeessllheaaavyyleeelnddtbhessiimcnnaccoleecnuttthlhhaeetfoeAAdllnonbnwanusuiientitdygyotnSShtettaahrrMettiinAengngmnubDDieaatrtt'yees Starting Date (accordingly, Starting Date wwifiiptthhaooyuumtterrneetggaaisrrddintoothttehheefoddreemllaayoy))f..an annuity, such annuity shall be calculated based on the Annuity 333.3.. FFoorrmm ooff PPaayymmeenntt. (@ (a) BeLLnuuefmmiptp pSSauuymam.bl.e EtEoxxccceaepcptht aaMsseoomttbhheeerrrwwioisrseeFpoprrroomvveiirddeeMddeiminnbttehhriissuSSnedecectrtiiootnnhis33..P33l,,attnhhesehNaNloolnngbqueaulpaialififdiieeiddn PPaslliaannnglI1eI11I: BlSlueuemcmntppeifoissntuupm3m.a,1,yaddibeentltteeeorrtmaomiipennraeeecdsdhenbbMtyy veccamoolnnbuvveeeerrlrtotuiirnmnFgpgosttrhhumeememmruoM osnintenthhmgllyytbheeNNroauonpnnqpdqulueairlcaailtibhffliiiseeeddPinlPPatllenaarnensshtI1aI1alIltBbBeeeenonepnefafii3itdt0-ai~nymxenoaaoursuninUntt.gSiil.nen "TTSarerpeecpaatlsisoiuucnrrayyb3l.1esseeiiccnnuuttroreiirtteaiiseetpssraeaatsnneeddn"t sRRvhPaaPll22lu00em00el00uamn33pMMthseummmaovroteurartslaaiilntgigytey. .tohfetFFaheoporprdlaiippcluuayrrbpplreooasstieeensssteorooneffs3t0tthrh-aiiystseeaccoroonnUnv.3veS0e.r-srysiTioeronaen,ra,sUutt.rhhSyee. s"siceamccpmuuperrdliiiittciiaaeetbsselleiinynpineerfftifefoeerrcecttsttoddruuatrrthiieenn"ggAsntthnhhaueelilcctmaaylleeeSanntnddaaratrthrieqqnuguaaavDrreatttreeearr.gffeirrsosttf preceding the the daily rates preceding the ccoaanllee3nn0dd-aayrreqqauuraaUrrtt.eeSrr. ttThhraaettaeesnnuddrsys immediately prior to the Annuity Starting Date. (b) classOOipfptitieidoonnaaasll CAAEnnOnnu,uiitLtyyI,FFLoo2rr,mmsLs3ffooarrndEEllTiigg7iibbwlleheoRRseeettiiprrleeaeenssn.e. d M Mienemcmbobmeeerrssfowwrhho2o0ss0ee8jjoowbbasggrrmaaddoeersse wwteherareen $c$E2ll2a3i3sg00si,ib,0f0l0ie0e00d,M,eamaasbnneddCrEsooO"nn)ee,,LM Mw1eee,rmmeLbb2epe,errrLmcc3illtaatssaessndiidffitieoeTdd7maaawkss ehjjoooaobsbeneggp-rrlaataddineemneeLLd3i3rirnooecnnvoomcTTaeSSblRRfeoe(r(lcceoo2cl0lltle0ieco8ctntiivwvienelayl2sy,0,m0""8oAArtnenonnuctuliheitatcynyt stEtouolmirg.reeicbceeleiiIvvfMeeaetthmhteeiibimrreelrNNsyo"on)nc,qlquweaucelatrilieifofinipeeeddwrmaPPsliltaatnnmedaI1dI1t1oIemBBeienannkee2fefi0ita0t8oii,nnnettt-hhhtieeemffreouorlirmermrseovoufofncdaaaennbrlaaetnnhneniulsueiitctSytyeiociintnniiollnniiec2uu30.0oo3f8(fabta)o llesuuhlmeamlcpplt saRapupepmtpliyl.y.r.emIeIIfnftaaa,nntihEEmilsliieggloiyirbblleeheleMeM rceteNmiomobnnbeqerwurdaadilsicieismseoaoddrrePSSleeiappnnaorx2aIa10tlte0ess8B,effnrrtoehofmemitrSSueselrhreavvsliilccueebnpepdrreiiprooarritdht0oisibbneSecaceoocsmtmiiioninnnglgge3ee.ll3liiu(ggbmii)bbplleesshfufaoomlrrl pursuant to Retirement, pursuant to SSheeiccsttiiooornn 3.3(a). her Nonqualified 3.3(a). Plan III Benefit shall be paid in a single lump sum G(i)) anPPdrrieesssunumomteelddegFaFloolrrymmm::arSSriienndgglloeenLLhiiiffsee oAArnnhnneuriutiAtynyn.uiIItfyfaannStAAantnninunuigittyDyaEEtll,iiggtiihbbellene MtMheeemmnboberermraRRleetftiiorrreemss ooaffnofpdmpa,aiysymanmneode.ntntltegooaffllhhyiissmooarrrrihheeedrr oNNnoonhnqiqusuaolairlifhfiieeerdd APPnllnaanun itI1yI11I Benefit Starting Benefit Dssahhataelll,l be the then the be the LLniifofeermAAannlnnufouirtitmyy form, and -6- 22775500..00221100 hhLiiissfeoorrAnhhneeurriNtNyoonnqfquouarlamiliffiioeefdd pPPallayannmeI1n1I1tI BBaeennndeeffisittelssehhcatalslll,,auunnJlloeeissnsst hhaeendoorrNssohhneeseeplloeeucctstsse ttooBewwnaeaifiivvceeiattrhhyee SsLSpuiuefrcrevviifiiAvvcoonarrlnlAAuynintnynpuruiotiftvoyyirmdffeoodrrommfi,,npbbteaehyeppmaaPieilddnatniin,nattnNhhodeengffsuoeoarlrmelmcitfosoifefaada LLJPioliffaienentAA1nainnlnundiuBtieytNny.e.ofniEEtsxpxpcoceauepypstmeteaanBssteoosntthhewefeirirlcwwliiasibrseyee. mS`stpmaaaerddcteeiifnimmcgoaonlDnltyathhtlelpyyroattnvoodidaaeeMdMndeeiimnmnbgbteheorernooPrtrlhaFFenoo,frriNmmrseoetrnrdqM MauyeaemlmoibffbieeetrdrheccPoomlmamonmnmetIenhInIcciiBinnneggwnheooifnnicthhhpiissahiyoosmrroehhrneetrrhseAArwnnnidnlueluiaitbttyyhe occurs Starting occurs. Date and ending on the first day of the month in which his or her death Gi) (ii) MePmPbrreeessruumRmeeetddireFFsooarrnmmd:: isJJlooeiginnatltlyaannmddarSSriuuerrdvviiovvnoorrhiLsLiioffree hAAenrnnnAunuinittuyyi.t.yIISfftaaarnntiAAnngnnnDuauittiety,y tEEhlleiiggniibbhlilees o`M orSrpehhomeuersbreeNNrBooeRnnnqeequtfuiiaraceilisfiafiraieeyndddSPPiuslrlaavlnneigvI1aoI1lrIlyABBnemennnueaiefrtrfiiiytet dssfhhooaarnllmll,hbbiuseenlopperaasihisddehriienoAn rntthshneehuiefftoyoerrlmSmetcatoorsftfitonawaga55Di00%av%teeJ,Joottihhinneettn5aa0hnni%dds AJJSoonpinionnututisteaaynnBddfeonSSreppmfoo,iucusiasaneeryaBBleSetnuneermefvaifiticvciiiovaarerryyAJonSSinunuutrrivvtaiyinvvfdooorrrSmAApn,onnuunusnuieltietysyBsenffhoeoefrrimomcriasaarhnnyedd eSsslueeerlclveetscictvttssooreewiiAttahnhinveerureitttthhhyeee f5LLo0iir%ffmee AaSavuvnarainvilluiaavibbtoyllreefAuuonnnrndmdueei,rrtatythnheefaoEElrtReRmrIInPaavPta(iiv(il..eea..b.,Jloe77in5u5t%n%daeonorrdrt11hS0e0p0E0o%%Ru)I)soePorrB(aa5en0JJooe%ifi,nnictt7iaaa5rnn%ydd oNSNrouonr1nvs0si0ppv%ooo)uur.ssAee nBBneeunneitefyfiiccfioiaarrrmyy Survivor Annuity form available under the ERIP (50%, 75% or 100%). (c) MemOObpeptrtiisoonncaallalssAAinfnnineuduitiatysy LFF1ooorrrmmsLs2ffoworrhoCCeeirnrtctaauirinrnedVVeaessStteeepddarFFatooirrommneefrrroMMmeeSmmebrbeveirrcsse.p. rioCCreer(rtt0aaii2nn00FF9oorwrmmeererer pMpNeeorenrmmmqiuibtatietleeriddsficettloado ssPmmilfaaaieknkdeeIlalsaaBLeoo1nnneeefo-i-rtttiLimim2neewthiihrerorreLeviivnofoceccuaaArbbrnlelneeduiaeetllySeeccefttpiiooaornnmatioiionrnnt22fhr00eo00mJ88oiSnt(toe0ravneeilcdleeeccSttpproit1ouo0sr etrroeeBcc2eeein0ivev0efe9.icwitthahereeriyierr NFSSuouorrrnvvmqiieuvvrooarlrMifeAAiemnndnbnueuPiritl'tayyns ffINoIooIrrmnBmqeu((na55el00fi%i%it einodorrtPh77le55a%n%L)i.)1f.1e1 ABIIfefnnnaaeufttiiititmymeseflhloyayrlmlcellceeooccrttmtiimhooenennJwwcoaaeinsstummapanoaddndeeStphiineon uf22sr00es00tB88,d,eanyttehhfeeoinncfiattthrhhyeee `cFcaaaonllnreeumnnitddeyararrM fmmoreoommnntbethhleerccc'stooeiiNdnncco(iiinddnqeelunnitateluiwwfoiiifettahdh or next Plan III or next ffBoolellnlooewwfiiitnnggshaaattltltaaciinonmmmeemnntet noocffe aauggpeeonssiixxthttyye--fffiiivvreset single lump sum). ((d66a35y)) oiinnf ttthhheee annuity form elected (in lieu of a single lump sum). @(d) ReTTtoiotrtaealmlePPnetennsIsinioocnnomVVeaalilsuuceealGGcuuualarartaaendnttepeeuer..suaTTnoot ttthhoeeAeerxxttiteecnlntet 4tthhaaottf aathM MeeeEmmRbeIbrPe'r'(ssPooorrrtfFFooloirrommeIeDr)r, M Mheeemmboerbres'rh'sse sRhealtilrbeemeennttiInecdomtoeaTisotcaallcuPleantseidonpuVrasuluaentGtuoarAarntticelee (4asodfettheermEiRneIPd u(PndoertrfoSleioctiIIo)n, 4h.9eoofr sthhee EspEhRaRaIyIlPmPl,e,bneaatssenitntthhitetelheessdaaftmmooeeramommTafoayytaalbbLPeeiefnaeasmmAieonennnndudVieetddayl,ufferrJoooGmimnutattiriamamnneedtetSteoop(oattuisimsmdeeee))tBeeiirnffmehfhiieneceiodoarrruyssnhhdAeeenrnRRuSeeieittciryrteeiossonraa4Jnno.dd9inoectllfeeatccnhttdess NTpNoaootynnam-l-SSePppneootnuusisnsieeotnhBBeeVenafneolefrufimeicciiGaoaurrfayyraaAALnnnitnfneueeuiwAtitiyyntnhuuunnirdtdeyees,rrpJeSoScetienccttttoiiaootnnnhde33SN.33op((nobbqu))usaeoolrriBf((eicnc))edfooiPffclittaahhnriiyss11A1PPllnBaaennnnu,,eiftssyiootollqrouonanJlggoiifnaaitsscsattnhahdese TaainocctaaaassnlhhPrraeeemnffosuuiunonnddntfVfeetaaahttlauuutrreeeiGsuuunnnaddoreeatrrnwtwgerhheeiiawccthheirthppaatryyehmmasnpeeennctttthieitso epptxhrrcoeoevvNsiisddoeenddoqfuuuapptloohifnneiettTdhhoeetPaddllaeenaatPtIhheIInoosBffieotthnnheeefVlilataasslqttuuaeaannlninofuuifieitstatanhantest NitNnhooennqadqnueuaalatailhmioffiiofeeutddnhtPPelltaalhannsattI11Ia1IinsnBBueeinntnoeaeftnfiti.tgt raaettattthehere AAtnhnnanunuiitttyyheSStteaaxrttciiennsggs DDoaatfteethooevveerTr otthhtaeelttooPttaaellnosofifoppnaayyVmmeaenluntetss obbeefffoothrreee the death of the last annuitant. 2-7- 22775500..00221111 ((e&)) entiSStuulbebdssiitddoiizzeeeldedct5500a%%subJJsooiiidnnittzeaadnndd0SS%uurrvJvoiiivvnootrraAAnndnnnuSuuirittvyyi.v.orIIAffnaanuMMietemymbbueenrrdeoorrr SFFeoocrrtmmioeenrr 3MM.e1em0mbobeferrthiisse sEeEunRRbtIisItPPileddi((aazssetodtthhaeeenlnessucaaitmmtyaee smmuuanabdyyseirbdbeietzheaaidsmmePe5lnn0add%neeiddfhJfforerionomtomrattnisimdhmeeeScttulooercvtttiiimsvmeote)rh),,eAhh3nee0noo%urritJssyohhieenutnsshhdaaaenllrldl SaaSllepsscoootuibobseene eeB3nnet.1tniie0ttllfeeioddcfittaotorhyeaa AsaAuvnnabnniusluiiaditbtiyylzeeppdtuuorarssnsuunuaaucnnihtttytMtoouenmSSdebeeccerttriitoohnniiss33nP..o33lta((bnbg))rifeooarrhte(e(ccro)).,rthppsarhrnooevvteiihdldeeeecddatsnttnhthuhaaatetltt5hhl0eei%faaenntJninomuuieanaltlanallninifufdeietttiSymipmeeobeuaansnneenfnuiBuititetyynaveabbfieieclnniaeeabffrliiyett euauvnnadadteieelrarrbttlhheteehtaoLLniiffsteeuhecAAhnannnMnunuiueitamtyylbfelfoiorrfrmiemst,,inmaaoenntddagnnppreurriaoottvveyiirddbeteheddnaenttfhhiaatthtteatthvhaaeeninlaaaunnbannlluueaalliltfoesstuusirmurvvceiihvvoaoMrnrenaamunnbintnyueuiritbtyyeunnbbedeefeninetreffaitivthteaiiissl5annb0ool%tet JgJoorieinnattteaarnnddthaSSnuurrtvvhiievvooarrnAAnnunnanuluiitltiyyfeftfioomrrmme.. annuity benefit available to such Member under the 50% ((f)DefiBennDeifeitfciiinaiortiynonSssur..viFvFooorrr Appnuunrruppiootssyee,ss JooofifnttthahiinssdAArNrttoiiccnllseep3o3,,usttheheeBtetenerermfmissciLLaiirffyee SAAunnrnnvuiuivtitoyyr,, AJJnooniiunnitttaaynnaddndSSppTooouutssaeel BPbPeeeennnassemiifoeoicnnniodVVxeaaydlluuSfeeruorGGvmuuiavtaroiraarmnneAttee(n0eentussihihmtaaeyl.l,ll have Joint have atthnheed same meanings as under Nonspouse Beneficioxy same meanings as under the ERIP, as the Survivor Annuity the ERIP, as the same may and Total same may be amended from time to time. 33M4.e4.m. ber orPPrrFeeo--rCmCoeomrmmmMeeennmccbeeemmreendntit sDDeaeafatttehhr..beNNcoootmtwwiinittghhssvttaeansntddeiidnnggunaadnneyyr pptrrhooevviiEssRiiooInnPiinbnuttthhiipssriPPollraann(0ttohoittshheoerccohonentrtrraaArrnyyn,,uiiifftyaa M StaermtibnegrDoatre,Fotrhme efrolMloewminbgerrudlieessshaafltlerapbpelcyoming vested under the ERIP but prior to his or her Annuity Starting Date, the following rules shall apply: ((a@) purTTsoouantththeetoeexxAttreetnnittclttehhaa3tt oaafMMtehemembEebRreI'r'Pss (ooPrrorFFtooforrlmmieoerr1)M M,eaemnmbdeibref'r'sstheRReeMtteiirrmeebmmeeernnttorIInnFccooomrmmeeeriiss Mcceaamllccbuuellaartteeidds dpmmeauatrrrresriurieemaddin,,ntehhtdoiissAioonrrrttihhhceeelerrs3ssauumrorevvfiivtmvhiianennggnEessRrppIooPauusss(eePporssorhhtvaafliollldliebbodeeIu)een,nndttaeiintrlldeeddSiefcaatthi""eoPPnrrMeer3r.8eeetmtiirbroeeefmmreteonhntert FESSoRuuIrrrmPvv.iievvrooarrM s AAaenmmnnenbunuieditrteyyid""s dfBfrereontoememfrimttti.iminmeeeSdtutoocinhttiimmtPhere,ee,rwwseiatitmithhreerrmeemessnppateenccSnttuertoroviattvshhoeeprrM MAoenvmenibmudeierbtd'eysru'sosnhodrarlelrFFbooSerremmccetoeirnrovnM Meer3emt.me8bdeboreif'rn'tsstohNNeaoopEnnrqRqeusuIaePaln,litiffaivsieaddalmPPulleaalnnnudmIeIIIpdII sBstuhueemmn,ce,afuulitsse.iinnndgSgaurttchhmheeoPininntrtteheerrreefetsositrtlelaamonnwddeinnmmtgoorSttruhateralvliMiittveyymobrffeaaArcc'ttnosonrrsuosiiritnyn FSSsoehecractmltliieoobrnneM33ce.o33m(bn(aaev))re.,'rsaatennddddeippanaattioihdd:aaassporfoetfsethhneet vffiiarrlssutteddaaluyymoopff the calendar month following the Member's or Former Member's death; ((b)) purTTsoouantththeeeexxAtrteetnnitctletthh3aattofaa tM MheeemmEbRebIreP'r'ss(PooorrrtfFFooolrirmomee1r)r, aM Mnedemmbifebrteh're'ssMRReeemttbiirreeermmeeonrnttFoIInrncmcoeomrmeeMeiissmbccaeallrccuuillsaattneeoddt pmmauarrrrsriuieeadd,n,t nntooo Abbeernnteiecffliiett 3sshhaoalflllthbbeee ppEaaRyyIaaPbbll(eePuounrntddfeoerlriotthhiiIs)s, PPallnaandn,,ifaannthdde Member or Former Member is not ((c)) purTTsoouantththeeoeexxAtrteetnnitctletthh4aattofaa tMMheeemEmbRebIreP'r's(sPooorrrtfFFooloirrommeIe)rr, M Maenemdmbiefbsreu'rc'ssh RRMeeettiimrrbeememerennottr IIFnnoccroommmeeer Miissemccaablleccuurllaadittceesdd: oppprruriirooFsrrourattoomnethhritiossMoAoerrmrthhbiceeelrrre'AA4snnnonNufuoitnithtgyyeuaSESlttRia~frxItiPtiiennd(ggPPoDDlraaattfnteoe,l,1i1ohh1iissIBIe)oon,rreafhhnieedtrr iaBBftetesnruneiecfbfhuiitccM aiib~alrexeymy tbossehhaPralololrl rtrefeFoccloceiriiomvveeIefrttahM hnee eiM Mmmemebmemebdrebidreai'rte'sess sosaiirmnnoFggulloeenrtmllueiumnrmSM ppecesstmuuimmobn,e, r3'dd.s1eeNtteieonrrtmnmoqiianuneeapddlriefsibbeeyydntcPcvoolananlvnvueeeIrrIttIliinuBnggmepnttehshfeeuitmmmaoutotnsrntiibthnhluglytyabNNleoontngoquauPlaoilriftffiioeclddioPPIllIaanann I1iI1m1I mBBeeendneiefafitiett amount in Section 3.1 into a present value lump sum using 5-8- 22775500..00221122 ctthaheeleiinnndttaeerrreemsstotnaatnnhddcmmooiorntrcatialdliiettnyyt ffwaaiccttthoorrossr iinnnexSSteecfctotiiloolnnow33i3.n32g()at.)h.e MFFeoomrrbttehhriiss'sppuudrreppaootshsee,s,hatthlhlee bffeiirrsstttraddtaaeyyd ooaffs ttthhheee Annuity calendar Annuity Starting Date. month coincident Starting Date. with or next following the Member's death shall be treated as the 33.55. BBeenneefificciiaarryy. (@ (a) deJJsoioiginnntattAAennannuBuientitcaafnintct.i.arAAy nn(0AArnnenncueuiiittvyye EEthlleiiggsiiubbrlleveiMvMoeremmibnbecerromooerr pFFooorrrtmmioeenrroM MfeetmmhbebeJerorinssthhaaallnlldbbeeNoeennn-ttiSittplleoeddust0oe dBBeeensneigeffinicacitiaearryay Annuity, ifselected, on forms unished by Beneficiary to receive the survivor income Annuity, if selected, on forms furnished by paaonnrddtiffoiinlleedod fwwtiihttehh 3M.Joint 3M. and Non-Spouse ((b5)) InTTcooottmaaell iPPseecnnassliicoounnlaVtVeadallupueue.r.suaTTnoot ttthhoee Aeerxxttiteecnnltet tt4hhaaottfaathM MeeeEmmRbeIbrPe'r'(ssPooorrrtfFFooloirrommeeIr1r),M MaeemMmbeebmreb're'ssrRRoeerttiiFrreoemrmmeeenntrt IMtMnheecemomTbmobeteearrlissshPhcaealanllllscibbuoeelnaeteeVnndtatiiltpllueueeddrsouttofoantddhteeesstioiNggonAnnaagrtttueeiaclaaleiBBf4eienenoedefffiPtichcliieaaanrrEyy1R1ttIooPBrreee(nPcceeeofiiirvvttfeeoaplptiaaoryyiIbmmIue)et,nnatabtlooMeffetttomhheebPoerrreretmmfoaoariliinFnoddoeerIrLmr, ooeifrff taa0hnneyya,,nToyoonntpaffrlooerPr-mmecsnsofsmfiuoummnreinnsVicshhaeelemuddeenbbotyyfdaatenhnadedtfhfNiillboeeenddnqwewfuiiatittlhhipfia33eyMMda.b.PlleNNaonouttnwIwdIiIeittrhhBssSettenaacnentfddiiiitonnnaggt3tt.trh4ihbe(efucf)otoararbeeblggeoooviteionn,ggP,t,howweritiftMtohhelmirroebesseIppIre,e'ccisttf ototorhreaFFanoobyrrsmmpeernerecr-ecM Mooememfambmebdereen'src'issegmnbbaeeetnnnieeotffniidocceriiaaairtrfhyysbuddeecensshieiggfdinnetaastptiiiagooynnnaabtuuilnneoddnueernfradttiehshre,e StEhEeeRRcrItIuiPPolnessshh3aaf.l4loll(rcaaa)ppuppaltylboy.om.avteIIi,nncthaablelellnMeeefvveeiencmntistabs,re,ireii'nssn under the ERIP shal apply the absence of a designation under the ERIP shall apply. or if such designation fails, the rules for automatic beneficiaries o33f6.6..illnessIInnoccraapmpaeacncittiatyyl..orIIffapahyM Mseiemcmablebredr,i,saFFbooirrlmimteyer,r MMiseemimnbbetehrreooorrpBBienenincoefnificcoiifaarrtyyheiiss PuulnadnnerAdadamlelieenggriaaslltrddiaisstaaobbriilliuittnyyaboorlr,e, bbfyyo rraeetaatsseoonnnd pophrrefoorpipeleluernnrleldyysesrt(o0oinrhhiismssuceoohnrrotahhfleetrrhoreppeepfrrhossoloynlnsaoiaclwlailffniigndnaaiwsnnaaccyibiaasillliatmymsa,attthtiteseerrsPis,nl,atntthhhiAeissdmoNNiponoininnqsiquotaunrlaailtoiffofiireestddhheaPPlllPlaalnndainrIIeIlclIAtmmdamayyinppisaatyyratttohhree ubbenenanebeflfieittsstoppaaayytaatebbnlldee hereunder in such of the following ways as the Plan Administrator shall direct: ((aD) ireDcirtelctyly ttoo ssuucchh M Meemmbebrer,, FFoorrmmeerr M Meemmbbeerr oorr BBeenneeffiicciiaarryy;; (b) (b) TTootthhee lleeggaall rreeprperseenstaetinvteoaoftfsisuuvccehh MMeemmbebre,r, FFoorrmmeerr M Meemmbbeerroorr BBeenneeffiicciairayr;oyor:r ((c9)) MTTeoomsbsoomemereorrreelBlaaettniievvfeeibcbyiyarbbylloooodd oorr mmaarrrriiaaggee,, oorr ffrriieenndd,, ffoorr tthhee bbeenneeffiittooffssuucchh M Meemmbebre,r, FFoorrmmeerr Member or Beneficiary. AAthnniysyNppoaanyyqummaeelnnittfimmcadaddPeelappnuurrIssIuuaanntt ttoo tthhiiss SSeeccttiioonn sshhaallll bbee iinn ccoommpplleettee ddiisscchhaaxrggee ooff tthhee oobblliiggaattiioonn tthheerreeffoorr uunnddeerr this Nonqualified Plan III. -9- 22775500..00221133 AARRTTIICCLLEE 44 UUNNFFUUNNDDEEDD PPLLAANN 4g41e..1n.eral asNNsoeo'tTsTruorsfuts.3tM.. TThhe3e Mbbeenndeeofficitstss nppoaalyyaaibbnllteeenuudnnddfeeorr cttrhheiisastNNeoonanqnquyualatilrifufisieteddinPPllaacnnonInIIIeIIcstshhiaaollnll bbweeitpphaaiitddhisssoollNeeollyynqffurarolomimfitthchede gPfPluelaannnndesrIa11Ii1lI.n. aosNNrsedeeietitrsthhteeoorrfp33a3MMyMs.nnuoocrrh3aaMbnneyynedoofotitethhssee.rrneeo3mmtMpp'lilnsootyeyoenebrdrlissgthhoaaatllillcorhhneaaauvvtneeedeaaarnnntyyyhiootbsbrluliNisggotaanttigiinouonanciot0foninemmedacaktkPieeolanccnoownnIttirrthiisbbhuuatthtliilioosnnbsseNooomrrenrqsseeeulttaylaaissftiiiheddadeet of an unfunded and unsccured promise 0 pay mone in the future. funds in order to pay such benefits. 3M's obligation under this Nonqualified of an unfunded and unsecured promise to pay money in the future. Plan III shall be merely that 44p2e.2,r.mitted toNNmooakCCeoonnctotrnriitbbruuitbtuiiotoinnossnsbbuyyndM MeeremmtbhibeserrNsson..quMMaleeimmibebederrssPlaaannndd111FFoorrmmeerr MMeemmbbeerrss sshhaallll nnoott bbee rreeqquuiirreedd oorr permitted to ma_ke contributions under this Nonqualified Plan III. 44r3e.3.c.eive aUUnynnsspeeaccyuumrreeenddtCCsrerfedrdioitmtootrrhSiStsataNtotuunsqs.u.alNNioofiMMeedemmPblebaernr,,1F1F1oorremmxceearrpM tMeaemsmbpbererorvooirrdeBBdeennieneffiAiccritiaairrcyylesshh3aallallbhhovaaevv.eeaanUnynytirrliigghshtut cttoho rppNeaoacnyyeqmmiuveeanenltitassfniyeaadrxpeeaPylrrameencceee1n1iit1vvseesdfdhr,a,ollmttbhheeethnirsroiigNgghhrottessnatqeoourffaltihecfaiaaenccdhhtPhMMlareniemgmbhItIbeIserreo,,fxacFFnepoorturmnmaseseorrcpurM MoreevedimmdbgebeednererirnaaalAnncddrtriecdBBlieeetnone3refoifaifcbcioia3avrMryey.. uuUnnnddteeirlr stuthhciihss Nonqualified Plan III shall be no greater than the rights of an unsecured general creditor of 3M. AARRTTIICCLLEE 5 PPLLAANN AADDMMIINNIISSTTRRAATTIIOONN 55C1.o.1m.mitteePPooswwpeeecrrissfiaaenndddhDeDruuctitiinee,ss otohffetthhPeelaPPnllaannAdmAAiddnmimisntiinrsaitsttrorraattosorhra.l.l SSauudbbmjijeenccittsttooertthhteehippsoowwNeeorrnssquooafflttfhhieecdCCoomPmplepannesnasIatlltiiooinnn CaaPlccoaccmnoorrmddAadaitnmntcieceneewiwsisttiprthehactiiiotftsrsiettdseehrramhlmlsesraheaninanddv,esshththaahelell hhpPaaolvvawneeeraalAllladppnmoodwwinedeiirrsssstcrrnaneteetoccireeosnssssahatrroayyllit(no0taedccraamprrrrrieynytisoottuuhettertthphtreheoippvsriroosNviviooisnsniisoqonunossafoloitfffhiiesssduuccNhhoPnlPPaqllnuaanan.l.IiIfITTihheiened PPPPllllaaaannnn. I1A1I1I,d,AmaannniynddisttsotoruadcdteheottreedrrsemhmtiaienlnrleemihaanallallvteqqiuuotenehssettbiiopyonnosswthaaeerxriissaPiinnlngdagniidnniAsttdchhmreeientaaiidodsmnmtinritinaostiisoritrnraatteitsiorhopnan,rl,eltiinnbtttheeeerrppcprroerenottcaavlttiiuisosoinonivnaaesnnddoafnaadpptphplilbsiiiccnaNadttoiiioonnnngquooaofflnissfuuiaecclhhdl pPpienelrafrsnsooor.nmnsas.t.AionTTnyhh,eeosPPrullcaarhnnecAAdodnedmctmeiirnlimeinsiistnatrnarayatittooonirrnmcmboaaynyysitsaahtddeeoonppcPttylassunuiccnhhAsppduoomcllhiiiccniimieesasstrnaaannnteoddrr pprsraoohnccadeelldd1uu0brreeesssu,,ccocchonorcrerrlxeeutccsettinvtaaennyyaasdndedehffeeecbctoitsnsr,,disssnuuhgpepppldolyyneeaamnnayslyl nipnnoeeflccoieecrssimsseaasar,rtyyiopronoor,rcddeoedersusirirrreeaascbb,olleendcettiotoleeccraamarrirnrnyyyatooiiuunottncsotthnhoeesrippsiutunerrtnppecooryspsereessitnaootffsiuotthcnhsiihsssNmNhaoolanlnnqqnubuaeelarildifaofinineededd itPPonllaaasnnuncIIoIhnII;dieppsxrrcotorevviniimtddieenaddas,,tohhhrooeywweomevrvaeenrsrn,h,eettrhhdaabtetaeaasmnneyyds upon uniform policies consistently applied to all persons in similar circumstances. policies, procedures, determinations or interpretations shall be done in a nondiscriminatory upon uniform policies consistently applied to all persons in similar circumstances. manner based h55i.22so. rherbCCellnaaeiifmmistssPPurnroodcceeerddtuuhrirsee..PlaAAnnnysyhaPPllaarrsttiucibicmpiiatpnatoanorwtrriBBteetnenenefifricceiqiaaurreyystwwfhhooordridesivsaiagegwr:reeeetsos twwhieitthhPlaaannnyyAdddemecicinissiiisootnrnartreoegrg.aarrddTiinhngge hPPthlilseaannorreAAqdhudmeemsirtni.binesintsTtrerafhaitettoosrrPulssnahhdanalellrlAdtrrhemeiissspnpioPosnnltaddrnaiintsnhowwrarlrlimittasiiyunn,bggmtthooiotwssaeuuvccwehhrriaa,tterreenexqqtruueeeeqnssdtutewwtsihtitetfhhoriirnenprlsseiyivxxtitpeyyewr((i66to0o0d))thddfeoaaryyPssaloanofnhfaAhdsdidsimtooirironnhhiaseeltrrrasrriteeoxcctreey.iipp(tTt6hoo0e)ff dtdhaaeyyssreffqoourrerrseetaa.ssooTnnhaabbelleePlccaaanuusseAe..dmTThihneeisPPtrllaaatnnorAAdmdmmianyiin,sithsrtorawattoeorvr'e'ssr,rreeessxpptoeonnnsdseethe reply period for an additional sixty (60) 10-10- 22775500..00221144 sfshohraatllhll bbee wwrriittteenn iinn aa mmaannnneerr ccaallccuullaatteedd oto bbee uunnddeerrssttoooodd bbyy tthhee PPaarrttiicciippaanntt oorr BBeenneeffiicciiaarryy,, aanndd sshhaallll sseet forth: @(a) tthhee ssppeecciiffiicc rreeaassoonn oorr rreeaassoonnss ffoorr aannyy ddeenniiaallooffbbeenenfeiftists;; (6) (b) ssppeecciiffiicc rreeffeerreennccees tfoo ththe pprroovviissiioonn oorr pprroovviissiioonnssooff tthhiiss PPllaann oonn wwhhiicchh ththe ddeenniiaall iiss bbaasseedd:; (c) Benaaefddieecssiccraririppyttiitooonnioomfpfraaonnvyye aahddidsdiiottiroonnhaaellr iicnnlfafoiomrr,mmaatatinioodnnoaonrremmxapatlteaernriaiaatllionnneoeccfeesssswaahrxiyychffoosrruttchhheePiPanrafioxrctimicapitpaianontntooorrr materiias necessary: and Beneficiary to improve his material is necessary; and or her claim, and an explanation of which such information or @(d) aatnnheeexxspptlleaapnnsaattiifooonnobofoftthhteeakPPellnaann'i'ssf cctllahaiemmssParretviirceeviiwepwsanpptrroococeredduuBrreeeneaafnniddciooattrhhyeerr waaippspphrroeopsprriitaaott.ee aiinpnfpfoeorarmlmaatttiihooenn 1aPslattono tAhdeminsitsetprsattoor'sbedectiaskieonn if the Paxticipant or Beneficiary wishes to appeal the Plan Administrator's decision. `IIwFfrttihhteetenPPaaarrpttpiiceciaipplaanwntittoohrr hBBeeenneCefofimiccpiieaanrryysaddtiiissaoaggnrreCeeeoss mwwiiithhcthsheewdidteehcciiisnsiiooonnnoeo-ffhutthhnedrPleladanntwAAeddnmtmiyniins(it1sr2tar0ta)otord,ra,yhhseeaoofrrtrsshhreeecssehhiaavlllilnffgiillteehea wPwPillratainhnttieAnAnddnmaiimpnnepiitnseytiasrlta(rwt9ao0it)rtoh'rd'tsahyerrseeCssoppofoomnnisspsee.e.rnescTTaehtihipeoetnCCooCfomomtpmhepenmesnaipastptateetiaeiloo.wnn itCCThoohinmmemomCinoitetmt-cephseeunnsssdhhaaraletllldiorrtenwesspeCpnoootnnmyddm(iii1nn2t0eww)reridittmainyiagsny,at0ofhteossrwuuerccevhhceeraainn,vieaanpxpgptpeetehanaledl wtrthheieesthprrioeennppsllnyyeinsppeheeatrryliiloo(dd9b0eff)oowrrdraaaiynntseaanodddfdiiiintttisiaoornnemaacallennninpiiennt reeottyfycatlh((9c9eu00l))aadpdtapeayedyasslt.fofoobTrrehrreeeuanaCsdsooeonmrnasapbibelolennsdccaaatbuuiysosene.t. hCeTTohhPmaeermtCCiiotcotmiemppeaepnmnetsnaaosyart,tiiBhooeonnnwcCCfeiovocmemirma,mriyeit,xtteteeaeenn''dds rsstehhhsaealpllPlolnbbaosonetthhosnhssewattlhlifoobcrrehtthhwtsttrhhideetteecssnpipeseicicnioifnfaiiccimsrrbeaeaanasssnoeoednnrss for its decision calculated to be for its decision and refer 0 understood and refer to theby the specific provision the Paxticipant or specific provision or provisions of Beneficiary, and or provisions of the Plan on which its decision is based. 55r3e.3.s.pect 0RRaeeccoMorerddmsbs..erTT'hhseeorrreegFguuollanarelryrkkMeepeptmtbrreeeccroo'rrsddssHooofufr33sMM ossfhhaSalelllrbvbieeccec,oonnCcrcleuldsiuitvseediaavSnneeddbrbivinindd,iinnCggouvupeporonendaalClloppmeeprressnoosnnasstiwwoiitnthh, rUUtehnnseipriooeeinncnt PPetoeeanntsasiiinM oognnetmEEoaabMrmeenirmi'nsnbggeossrrs(F("`oaSSrnaamldlaaerFrriioeeMddneePPmreebnnMseseiirom'osnnbHeEEroaasumrrnisinnoggfss""Sepprrvriiiocorer, to 2016) Credited to 2016) and all Service, and all other matcrs contained Covered Compensation, other matters contained therein relating to Members and Former Members. o55t4.4h..er persoAAndsdvivasisesrehsre.so. rTTshhheee dPPlelaamnnsAAdddmemisniiirnsaibtslrtreaattoorrammdvaaiyyseaaapppnpodoiinantstsisssuutccshhulclehagalAldmccioonuuninssestler,la,taaoccrccowouiuntnthatanttnhstes,,adaamctiutnuaiarsriticerssataainnondd ooobfetfhttefhhuriilsslpyNeNroposrnonognqtusuecaaatilsieffdhieeewddiotPPrhllsaarhnneesI1Idp1Iee.ecmTTthhsoeeadnPPeylslaairannacbtAAlidedomnmitontiinaaskidtsevtrnraibastteyoorrahnssidhhmaaolalllsrsbbieeshteeersnnutiticnigtthlloeeAddoddttomo friraneeillityyshtrcciaoontnnorccrellluwuissaiiitnvvhceeeltlhyyuepuuoappndoo,mnn,a,innaayinnsddtardassvthhiiaoaclnlell obre ifunflloyrmpartoitoenctfedumwisithhedrebsypescutctho aadnvyisaecstion taken by him or her in good faith in reliance upon, any advice or information furnished by such advisers. 5h55e.5.r. dutiesPPuaanyydmmeerenntthtoisoffNEoEnxxqppueeannlssieefssc.d. TTPlhhaeenPP1ll1aa,nn bAAudtdmmialnilinseitsxtrpraeatntoosrressshhaialnllclunnrooretdbbeebyppaa3iiddMffooorrr ttthhheee ppPelearrfnfoorArmdmmaainnnccieestoorffathhoiissr ooirnr conncetion with the administration her duties under this Nonqualified connection with the administration of such Plan shall be aid Plan III, but all expenses of such Plan shall be paid by 3M. incurred by 3M. by 3M or the Plan Administrator in 5a56g.6.a.inst anIIynnddaeenmmdnniaitltyly coolffaitthhmese,PPlllaaonsnssAA,ddmdmianiminasitgsretrasattooarnrd. 33laMMbilssthhiaalcllsl iiannrddieesmminnngiiffyfyrttohhmee aPPnllyaann aAAcdtdmmionriinsiftsrtlraauttooerr fffroroomamctaanniddn ccaPoolgamnaninnneeAscttdtimiooainnnniyswwtiaicltnahhdtotthrahelelfoaarcddlmaamliilmniniessix,stptrrelaaonttssiisoeoensns,(ooiffdnactthmlhiuisasdgiNNneogsonnrqaequnaaudslaoilnilffaiiiabecblddieliPPttilleaoasnnmaeIIIrlsIi,s,'inaagnnfddeferss)ohhamaillllnauddnereyffeeednnadcditnaaconnodrdn//nofoaerricltrrueierioeimnmbbtwouuirrtssaheectattnhhiynee PpelanndiAngdomrinhisrtcraattocrnefdorlaallmexopreannsyesac(itnicolnuodrinpgrorecaeseodinnagblaeriastitnogrntehye'srfoenes,) incurred in connection with any pending or threatened claim or any action or proceeding arising therefrom, a-11- 22775500..00221155 uruennsllueelsstssedaannfddrottomo ttthhheee PeelxxattneennAttdmtthhiaanttisaatnnryyatccollraa'iimsm,,ballodossssf,,aiddthaammoaragggere,o,sllsiaabnbieilgliilttiyygeoonrrceee.xxppeennssee iiss jjuuddiicciiaallllyy ddeetteerrmmiinneedd ttoo hhaavvee resulted from the Plan Administrator's bad faith or gross negligence. 3557.M7.. is desSSieegrrnvvaiitcceeedooaffsPPtrhrooecceeexsscssl..usiIInvneaaanngyyenlleteggaaflolrpprrreooccceeeieepddtoiinnfggseiinrnvvvioocllveviionnfgg ptthrhoiissceNNsosonnqdqiuruaelaciltiffeiideeddtoPPslluaacnnhIIIIPIl.,antth,hee SSeeccrreettaarryy ooff 3M is designated as the exclusive agent for receipt of service of process directed to such Plan. AARRTTIICCLLEE 66 AAM MEENNDDM MEENNTT AANNDD TTEERRMMIINNAATTIIOONN 66a.1m1e.ndments RRwiihggohhsttettoporoAAjmemectneenddd.co. sts33MMd'o'ssnoBBtooaearxrddceoeodff $DD2iir5ree,cc0tt0oo0rr,ss,0,0tt0hheein CCaoonmympepcneanslaesanttdiiaoornnyCeCaoormm)mmiantiyttteedeeulyoorra((uootnnhlolyyrizffooerdr sooafumffbfiiemccnieetdrrtmiooneffgn33ttsMMhewmmahamoayseyenaadpmmmreoeejnnnedtdctoeoordrr mmmcooododsiditfsififyycd,,aotiiinnnoonwwtshheooxolcleeetehooedrrs$iihnn2a5rppc,a0ahrr0ott,l0,d,t0tehh0riis0ssoNNfinoon3naqnMquyuaa(lcleiiaxfflcieieenddpdtaPPtrllhaaayntne,aI1orI1)I taaathnteyaaenndxyyutteltiynimtmaeneuewtcwhieotistrhshioazorueuydtt tstEouoxbcccmhooaimmntptgiplnely,gy t3hwwMei'ittsahhmBaaeoppnappdrllmdiicceaaonbbfltleeDoirrccemoocrrotppodoorirrsfaaitcoteeartitooohrrnessCsteeooccmuutprhrieiettniiseesasshtairllaeoawhwno,,lCdoooerrmrsmaaiopptpfptll3eiiMcceaabbs(lhleeaexllcrueuhlplaeetvsstehaoottffh,etttohehxeetchleNNueseeiwwxvteenYYatouotnrrhekkocreiSSstttsyooaccr0kky mEmadaxavkckehereasaaenlmmgyeee,nandf3dfmM meecetn'sntttBshseorwwioigxitthdhhtsorreefossDfppeeiacrcenttyctttoooMrbbeseemnnobeereffirtitht,sse uuFCnnododrememrreprttehhnMiissseaPPmtlilbaoanenn)r)..CoorHHmooBwmweeneivetvetfeeirecr,,isannhrooaylaalammhceqeanuvnidedrmmetehdenenuttneoodxrercrlmmuotsodhidivefiefpiicracauaotttviihoioonnsriisstyhohaoanltloflsl such Plan adversely such Plan aiinnffeeeffcffteetcchttepprrriiigoohrrtttsooossfuuaccnhhyaacMcttiieoonmn..ber, Former Member or Beneficiary acquired under the provisions of 66t2h.2.r.ough itsTTeBerormamirindnaaottfiiooDinnr.c.ctW Wohrhisilloeer iitttheeexxCppoeemccpttessnttsooactcooinontntiinnCuuoeemmtthihiitssiNcNoeon)nqqureuaslaeilriffviieecsddtPPhlelaarnnigIIhIItI tiionnddteeefrfiimnniiintteealltyye,,s33uMcMh ((Paalccattniinnaggt tapahnanryyyoutttighimehmeebietaasnnneBfddiotffaosorrrdalaaornnefyyaDdrryeieraaecsscoaotnnmo..resdTToeuerrnrtmmdhieeinrnaCatttohiieomonnpporefoonftvsihtashitiiissoonnNNsooConnfqoqumsauulmacilhiiftfitiPeeeledda)nPPrelilansanenerfvIIfIeieIcstssthhhpaarellillroinrngoohtttotaattfofhffeeeteccttretmr33miM Minn'aa'sstteiooosbnbu.llciigghaatPtiilooannn ttaoot pay the benefits already earned under the provisions of such Plan in effect prior to the termination. AARRTTIICCLLEE 77 CCHHAANNGGEE IINN CCOONNTTRROOLL 7371.M.1,. this NDDoinissqtturraiiblbiuuittiieoodnnPFlFaoonllllo1ow1wiisnnhggalCChtheaarnnmggieneatiinen aCCnoodnnt3rtroMolls..haUUllppoiomnnmetthdheeiaootcceccluyurrrrdeeinsntccreeiboouftfaeatCChhehaarnneggmeeaiiinnninCCgoonnatctrrcoolrluooefdf cr3reaeMtstiihr,ertemphmaieesynnmtNtebobneetnnnsqeeufifianitltissafimhheoeedurrenPeutlnusandneedqIrIue1Ita0rolshttthahoeleltrrtheeeessrpmppeericecntstaiievtvneeet aMMvnaedelmmub3eebM sreorssfs,,hsaFFulooclrrhimmmaeemcrrcerMMdueieeamdmtberbeleyertrsisdrieaasmtnnreddinbtBBuetebneenenetfehiffiecicitiraaserrmiiaeesassioniifninntlglhueumamdcppacrtssuuueommdf tctahlhaleeshoCCfhphaaatynnhmgegeeelniiuntnsmCCpiononstnarutmormlo.ol.uanmTTtoshhueeenqtCCusooammlwpitepolneltnshasbeatetipipooraennisdeCCnoodtmmivrimcateltuiitletcyeseeotssofhhasatlulhllcehhhaaraevvcseecprettuhchteeeiddvdierissecctMirrreeeemttmiibooeennrnttstoo,bddeeenFcceoiifrddimteesewwrahsheMeotetfhhmetehbrreessrodosmamteeeanooodrrf cBaBeloelnmnepofeaifficnctiyhia,aerriiwcelshus,im, cpoohrr pswwuriomillvlliadbbmeee ofaaouprpnppttlslhiieeewddpialttlyoomwwbeaeanrrtddpaofiffduullalldlyyirtppehacaeitilddaymaaotnnounnnuuttihitsteyytrhcceaootsnpntwetrrocaautcciltvtdsse oiiMstsshsueeuemredwdbiesbbreyys,haaaFnnvoerAAmb++eeerrrnaaMttpeeadedimdiibnnaessfrutuserrraanantncchdeee cCCohhmaannpggaeenyiin,n wCCohonintctrhroolplrppouuvrrissduueaanfnottrttoothttehhiipssaNNyomonnqequnuatlaoilifffiiaeeldld tPPhlleaannamI1I1oI..unts that would otherwise have been paid after the 2-12- 22775500..00221166 s77h2.2a.l.l be dDDeeeefmfiiennidittiitooonnhooaffveCChhoacancnuggreereiindn CCifoontnhtertrroeoll.i.s aFFoorr"cpphuuarrnppgooesseeissn ootfhfetthhoiiwssnAAerrrttsiihcclileep 77o,,faa3CCMhh,aa"nnggee"cihinnanCCgoeonntitrnrooleloffofefct33iMMve cTcsorhoneantaltrlsrooublrloeyoffdree33gMeM.,m",se"edcaatntiodon/nohrda|ava4e"/0"cc9ohAhoc-aacn3nur(ggr)ere(idi5nn)itthfoherethooseuwrcewnheiorsnsthhaeiepr"ocorfrhefaaganusslgusaubethsbitisonatniannttohirtpieaaglluoppiwodornartteniicroosennhioisopfsfuo33efMMd'3'susMnaad,ss"essree"ttcssseh""cataanissdgoeednfe4iifni0nn9eeeAddfofeuufcnnttddihveeeerr TCCorodedeae.s.ury reg. section 1.409A-3(i)(5) or such other regulation or guidance issued under section 409A of the 77No.33n.qualified DDPeletatneerrImmIi,inntaahtetiioopnrnesooefnftPPvrraeelssueeennotft cVVaaacllhuueeM.e. mbEEexrxc'cesep,pttcawwchhheerFreeoroomttehhreerrMwweiimssbeeeerexx'ppsrreeassnssldlyycappcrrhoovvBiieddneeedfdiciiinnarttyhhiisss NrraeesommsnauaqimiunnpiatinnliiggofniesaadccaccPsrrluutaeehnded ICIrroIee,mttitpirhreeeemnmspeearnnetttsiebobnenetnneCvefafoiilttumsseihhoteefrreeee,auucnnhdidneeMrrtsessmhhdaialbsllclerrbbe'stee,ioeddnaee,cttehmerramFmyoiinnrameedddoepritinM n foaaerccmccsobourrecddrha'aspnnuccarenepdowwseieiat.tchhhssBuuccehhneaafccitctuuiaaarrriyiaa'lsl assumptions as the Compensation Committee, in its discretion, may adopt for such purpose. o77.f.44..all reaFFseeoeenssabaalnneddlEEegxxaplpeenannssdeessa..cc33oMMunsthsihanalglllpfpaeacyys ttaoocnadeacechxhpM eMneesmmebsebrei,rn,cFuFroorrremmdeerbryMMeseummcbhbeerMreaamnnbddeBBre,enneFefofiicrcimiaaerrryyttMhheeemaabmmeooruunontrt coBBeofenmnaemelflfieicrcnieicaaaresryyodnabiinynbletsshecelecekkMgiieannlmggbaent(or0d,oaobFcbtcotaaoriiumnnnetrooinrrMgeeefmnneffbeooesrrcrcaeenodrhhiiBessexnpooeerfrnicshheieeasrrryirrniicgfguohhrtrtrssseuduucnnhbddypeeurrsrupttchohhsiisseMsAAresrtmtiidccbilleseerm,i77sF,,soeurudmnnllbeeeyrsssstMheaaemclolabauwewrstrsuuoaiistrt bcbaoeemiimonnugmgntessnppocuuferrdiiaoolbluusysretooharrseoffMnrriaivevboomllleoobuutesasr..x, Fao33nM rdMmfesisrhnhaaMalnllcleimaaallsbsoopelrapponaarnyyBintteogonefecfeaaiecccshhiaarMnMydeefmomebrxebpsreeu,rnc,sheFFpsoourrimrmnpeceorursrerMMseediesmmbbdybeisersmruciaashnnsddeMdeBBbemenybneeetfhfriiec,ciic~aForxouyyrrmtttehahrese M aMpmaeeymommubebnenetrtroosofrpruaBBrllesenurneeaefanfisticcoiitn~aoarxbtyyhlieiisnntAaccrxootnniancnneledecctt7fi.iioonnnaSnuwwcciiihttahhlpttaphhyleeamnrerneenicctneegiiopprtfterbbeeyysimssabuunuccdrhhseMMexempeememnbntesbreess,rh,ailFnFlcooburremrmreemerdradMMbeeyemnmsboubecelhrartoM oerrretBBmheeanbnneeeftrifh,iceciFieaaornrryydmoooeffrf pttahhaeeyMmrereemeccnbiiptpesiireepnnutit'rssssuttaaaaxnxSaatpbbetlolceeiytfhyeiieaesadrrAffrEotomillclplolleowow7iiyn.neggeSttuhhaceenhdttapaxaxsaayubbmcllheeenyypteeaaoayrrrmreiinennitmwwhhbioiurccrhhsrettemhhieemebnrreeutccrsiishppeaiimelelenntbnt teiinnmccisuuarrdmsseattnhdhoeee rrleaeoltlnaeatrteeatddhccaeeonxxupptnehetnensseeoesnfs.d. tohIIefff M aMtheeeMmmsbeeebmvreeb'rn'estsrhSSimeesoppanaartraahSttiipfooeonnclilfffroiroewodmimngESSetmerhrvpevilicoMceyee,,emebppeaaayrynmm'desennsSttuepcooahrrrarrpeteaiiimyomnmbbuuefrnrrssoteemmmoSereennrrtvteiisscmhhea.abllullrnsnoeotmt bbeeentmmaiasddeme appdrriieoorrottnoo ttahhceecoffuiirrnssttt ddoaafyythooeff the seventh month following the Member's Separation from Service. AARRTTIICCLLEE 88 M MIISSCCEELLLLAANNEEOOUUSS c88o1..1nt. ractofNNeoompCClooonnyttrmraeacnctttoobffeEEtwmmepeplnlooy3ymMmeenantntd. aTnTyhhiisMs eNNmoobnnqequruaolailriffiiFeeoddrmPPlelaarnnMI[eI11mI bssehharal.lll nnNootottbbheeinddgeeeeimnmeetdhdisttooPlccaoonnnsststhiiattulultteebaea odcdroeeenetmtmoreaecdditntttooeorfgfgeeiirmvveeepwlaaoinnytyyhmM MetenhemetmbbrbeeietrgrwhtooerreonFFfoo33rrMmmMeeraronM rMdeeaammnnbybeaefM rfritltehihmaeetberreiigrtgohhottdrt0ioFscobbireepmlrrieeenrtteaaMiinoneeremdddbiiinnesrctt.hhhaeeNrgssoeeetrrhvvaiiinnccygee ooiMnffe33tmhMMbiseoorPrrlaaaonnnr asaFfhfoifailrllilimaaebtteree Member at any or to interfere Member at any ttwiimmieteh.. the right of 3M or an affiliate to discipline or discharge any Member or Former s88e2.2l..l assigNNn,ooAtAsrassnissgifgenrnm,mepnelten.dtg.e,NNaoontMMiceiempmbatebere,,r,moFFrootrrgmmaeegrreMMoeremmobtbehererroworirsBBeeenenenefcfiuiccmiibaareryyr,sshhtaarlalllnshhfaaervv,eehaaynnpyyotrrhigechiattttoeogcocoromhmcmoumnttvueet,ey, otsthefheell,bbbeeaennsneesefiffigiitnttsss,,, tiifrfuaannandsnyefye,r,rp,paatpyhylaieasbdblgleeeN,ouunannqndduteaeirclriipttfhhaiiitsesed,NNmoonPnoglqruatuanglaailgiffIeiIiIeeoddraPPorlletaahnneerIxIwiIplI.ir.seesAAslelllnlycppuaamdyyemmbceelenran,trtestsrdaaannnslddfoettrhh,beeherryipginohogttnshahettsocotsaailtaseglllnoapprbaalycyeommneevnanetntysds nonboeofnntltbriraaaenbnnslsefeffeeirftroasarb,blleuoe.nr. dsNeNuerbeijittethhhceetirsr1tt0hh,NiisstohnNNeoqondunqeaqublaiusflai,ielifdcfioiecnddtPrlPaPaclnltaasnn,II1Il1II1iIabnnaioolrriretiaaennseyy,xpepprnooergrsttasiigoloyennmooedffnetttchshleoexobbreeednnteoefrtfitoitstssobppfeaaayynaaynbbolleenMaehhsmeesbrrigeeeunurnna,dbdeleFerrorsshhmaaanelldrll sbM Mueebejmlmeibacbbetelrer(0oofaorrtrt,BBaeoecnrnhefmesiefucinicbtaij,raeyrcg.yta.mtoi,NNsthoohmeeppnoodrterttbiiootorsnn,otcoohoffenrttthrhlaeeecgtabbslee,nnleeifafibittisslitppiaeaysy,aabbellneegauugnneddmeerrenttthhsiissorNNotoonnqrtqusaulaoilfiffiaieenddy M PPllaeannmbIIIeIIr, 'ssFhhoaallrllmbbeeer subject to attachment, g~xnishment or other legal 1-13- 22775500..00221177 dpperrotoecceresmsssinbbeyys taahnnayyt ccitrreewddiilitltoorrhooonfforaanntyyheMMcerememabtbeioernr,,, FFaoosrrsmmiegernrmMeMneetmmbobreerrreoocrrogBBietenineoefnfiiccoiiafarrayyn,,yeexxrcicgeehppttt tttooo attnhhyee ebeexxntteeefnnittt ttphhaaatyta33blMMe duduonnemtddeeeersrrmtttiihhnceeesrPPelltlaahannattiwwoiinittsthhwoirrrleeldssephpreeoccnsttoatttrooitshaafeiMMsceertmemhbaebteieorrrneoo,qruraiFsFrsooeirmrgmemnnemetrrsenMMtoeefmomrbabereeqrrcuaopplguuinrrfssiituueiaadonnnttdootoomfeaaasntddyioocmmreigrseehstlttiaiccttoirroeenallsnaatytioiorobndneessnrooerfrwidditeetrprhiaiinyffattthbhhaaletet mdmoeemaanneiisnntiggc oorffesslaeetccittoiiononsn 44o11r44d((eppr))X(s11a))t((iAsAf))ioeosff ttthhheee Code. requirements Code. of a qualified domestic relations order within the 8i8m3.3.a.ccordaGGnocoveveewrrinntiihnntggheLLalaww.a.owfTTthhhseeepprSrotoavvtiiessoiiofonnssMioonffnetthhsiiosstNaN,oonnegxqucuaelapiltiffii{ee0ddthPPellaaennxtIIeInItssphhaarlllel ebbemepiintnttbeeeyrdrpprrefeettedeeddraaalnnddlaeewnnffoorrcceedd in accordance with the laws of the State of Minnesota, except to the extent preempted by federal law. d88e4.4c..lared illSSeegepaplaarroaarbbluleenePPnrfrooovrvicisesiiaoobnnlses ..forIInnanttyhheereeeavvseeonnntt, aasnnuyychpprrioolvvlieissgaiioloinntyoofofrtthhuiinssenNNfooonrngcqueaualabiliiflfiiieteydd PsPhllaaalnnl IInIIoIItiissafrrfuuellceetdd toohrer rdrieleelmmcealgaaaiirlnneiiodnnrggiulnlppeerrgnooafvvloiirssociioreonanussbnlehheneepfrrroecoroovcffiesaaaibnnolddne httfhhaoiidssr nNaNenoovnynegrqureaubalaesileoifnfniiee,iddnscuPlPcullhaadnneidlIlIheIIIIegraessilhhinata.lylll be interpreted and or unenforceability be interpreted and eesnnhffaoollrrccneeoddt as if such affect the as if such illegal or unenforceable provision had never been included herein. a-14- 22775500..00221188 MMeemmbebrer: CCoommmmenencceemmeenntt DDaatete:: SSCCHHEEDDUULLEE I1 PPhhiill YYaatteess October 1, 2011 (scheduled termination date) October 1, 2011 (scheduled termination date) siSI-1 22775500..00221199 AAPPPPEENNDDIIXX AA CCLLAASSSSEESS OOFF EELLIIGGIIBBLLEE EEMMPPLLOOYYEEEESS AANNDD AADDDDIITTIIOONNAALL BBEENNEEFFIITTSS 11)) CCllaassss ooff EEmmppllooyyeeeess :: PPaorxtticciippaanntss iinn tthhee 33MM DDeeffeerrrreedd CCoommpepnesnasattiioonn PPllaann. JanuaryAAd1dd,di2itt0ii0oo8nn)aallorBBeewnneaefgfieittsss aBBnaadsseesddalOaOrnni:e:s PP(flloaarnnnnPeelddanttooYtteaaallrccsoommepnpedeninsnsagattoiinoonnor((ffbooerrfPoPrllaeannDYYeeceaaerxmssbbebeerggi3in1n,nnii2nn0gg07oo)nn otohrrataafattreeerr JeeDaxxencfculeluuradrdryeeeddd1C,ffror2omo0mpm0e8nSS)asalaolaatrrxiiiwoeedadngPPPeelsenanasnsniio(odannnsdaEElaaaarrrrnnieeiinsnnggo(stsfoouurtnnhPddeelerarrwnitthsYheeeeaeEExxRRscIlIePPunddassioobnlllgceellyyobnybbeeorccreaaabuusessofeenorttohehfeeDyyapepaaclrreieemcaddbteeifefoerenrr3rroe1efdd, s2uue0nnc0ddt7eieo)rrnttthh4hae0et133(aaMxM)e D((11e77f))eoorrffetdthheeCCCoomoddpeee))nssshhaatalilollnbbeePtltarreneaatt(eaeddndaassarSSeaallnaaorriiteeoddthPPeeernnwssiiisooenn Eamings. excludable Earnings. by reason of application of section 401(a) 22D)ecember 31,2CC0ll0aa8ss)ss. ooff EEmmppllooyyeeeess : PPaarxttiicciippaa_nnttss iinn tthhee VVIIPP PPlluuss PPllaann ((ffrroozzeenn ttoo nneeww ddeeffeerrrraallss aass ooff December 31, 2008). JanuaryAAd1d,ddi2itt0ii0oo8nn)aallorBBewenanegeffeiitstssaBnBdaassseeaddlarOOinen:s: (foPPrllaaPnnlnnaeenddYettooattraasll eccnoodmmipnpegennsosanattioioornnbe((fffooorrre tthDheeecPPelmlaabnnerYYe3ea1a,rr 2bb0ee0gg7ii)nnnntiihnnaggt aoornne Je(eaaxxnnccdulluuaddaryreeedd1n,fforr2too0mmo0t8hSS)eaalrolawarririwiseeeaddgeePPxseecnnlasusniiddooannbslaEEelaaabrmriynieisnnrgge(ssfaossrsooonPlleelloalyynf abYbpeeepccalaaxiuucsssaeeetinottdhnhieenyyogfaaosxrneeecotddrieeofbfneeerrf4rroe0erd1de(auuD)nn(edd1cee7err)mottfhbheeetrh333eMM1,CVV2oI0IdPP0e7)P)PllstuuhhssaaltlPPllabaaxnene tt(rareenaadtteedadreaassnSSoaatllaaorrtiiheeeddrwPPeeisnnessiioeoxnncEEluaardrnnaibinnlgegss..by reason of application of section 401(a)(17) of the Code) shall be 333))M 1992 CClMlaaassnssagoofefmEEemmnptpllooSyyteeoeecssk:: OPwPanarrettriicsciihppiaapnnttssPriinnogtthrheeam33MMand119988t77heM Ma3anMnaagge1em9m9ee7nnttMSSattnooaccgkkeOOmwewnnneterrssShhtiioppckPPrrOoowggnrraeammr,s,httihhpee P3PMrrooggrr1aa9mm92wwhhMooarrneeaccgeeeiivmveeeggnrrtaannSttstsooocfkf RROeesswttrrniieccrttesehddipSSttooPccrkkogram and the 3M 1997 Management Stock Ownership such ResAAtddrdidicitttiieoodnnaSaltloBBcekenne(efdfieitttsserBBmaaissneeeddd OOansn:i:fTTthhheeereaammwoeourunenttnbboyycowwnhhdiiiccthhiottnhhseeoffraaiirrresmmtararirkckteeittonvvsaaolluuneet((haaett otthwheneettriimsmheeiopoffoggrrrraancntct))ipootff oosEuffacmhssiuunRccghhesstSSritintcoottccehkkde))ySeeetaxxorcccoeekfeegdd(rdsseatnttehhtreemippnuuerrdcchhaaassseief tpphrreiicrceee payable for such were no conditions payable for such Stock being treated or restrictions on the Stock being treated as Salaried Pension ownership or receipt as Salaried Pension Earnings in the year of grant 44w))ho are atCCllelaaassstss6oo0ffyEEemamprplslooofyyeeaeegses.:: PPiilloottss iinn tthhee AAvviiaattiioonn DDeeppaorrttmmeenntt wwhhoo rreettiirree oonnoorrafatfteerr JJaannuuaarryy11,, 22000066 who are at least 60 years of age AAddddiittiioonnaall BBeenneeffiittss BBaasseedd OOnn:: SSeee AAppppeennddiisx BB aA-1 22775500..00222200 AAPPPPEENNDDIIXX BB EElliiggiibbiilliittyy:: FOR 3MSSUUPPPIPLPLOLETESMMWEENNHTTOAALLREPPTEEINNRSSEIIOOFNNROPPLMLAA3NNMBB'EENNREEEFFTIIITTRSSEMENT FOR 3M PORTFOLIO I AT OR AFTER AGE 60 PILOTS WHO RETIRE FROM 3M'S RETIREMENT PORTFOLIO I AT OR AFTER AGE 60 PbPieilnlooettfssitwwshh(ooA)aardreeeseecnnrrirooblellldeeddiniinnthi33sM M'A'spspReRenetdtiiirrxeemmoeennlntyt PPioforrttthffeooylliiooarIeI aa5rr5ee yaaeuuattroosmmaotafitcicaaagllellyyaneedlliigghiiabbvlleee ffaotorrlettahhseet ssfuuivppeppllyeeemmaerensnttaoalfl bCCrerenededifititteesdd (SSAeer)rvvdiicecesecoorinnbeJJadannuiunaarrtyyhi1s1,, 2006 and Appendix 2006 and rroeettniilrryee from 3M at if they are from 3M at 5oo5rr aayffetteearrrsaaggoeef 66a00.g.e and have at least five yeoxs of PbPeiinllooettfssitwwshh(ooB)aadrreeesceernnirrbooelldlleedidn iitnnhi3s3M MA'p'sspeRRnedetitiixrreeommneelnyntt ifPPotorhrtetffyoollaiirooe I|40aarryeeeaaaruusttooommfataaitgciecaalalllnyyd ecllleiisggsiibbtllheeanffoo5rr5tthyheeearsssuuppoppfllaeemgmeeennattnaadll bhhaaevnveeefaiatttsllee(Baass)tt fdfiievvseecryyieebaoerxdssoionffCtChrierseddiAittpeepddeSSnederrivvxiiccoeenlooynn iJJfaatnnhuueaayrryyar11e,, 42200000y66eoaaxnnsddorrfeettaiigrreee from 3M ator afer age 60. and less than 55 years of age from 3M at or after age 60. and SSuupppplleemmeennttaall BBeenneeffiittss (A): (A): CCrreeddiitteedd SSeerrvviiccee : CCfrorreeddtihitteee3ddMSSeeBrrrvviiiccdeegeiissbeuunsseeefddittttooo ddaeegtteeerr6m2m.iinnee tthhee aammoouunntt ooff tthhee ppiilloott''ss ppeennssiioonn aanndd eelliiggiibbiilliittyy for the 3M Bridge benefit to age 62. CCrreeddiitteedd SSeerrvviiccee wwiillll iinncclluuddee:: PPiilloott''ss lleennggtthh ooff CCrreeddiitteedd SSeerrvviiccee eeaarmneedd uupp ttoo ddaattee ooffrreettiirreemmeenntt,, pplluuss AAinnnyeaaaddrddsiittaiioonnndaalmloa~nmxtnohousun,nttbeootffwCCerreeenddiitttheeeddpSSleoertrvv'isiccaeec(t(ffuiiavvleeayygeeeaarrasst rmmeataxixriiemmmuuenmmt))affnoodrratthgheee 6pp5ee.rriioodd ooff ttiimmee,, in years and months, between the pilot's actual age at retirement and age 65. EhEaxxvaaemmpaplnleea:d: dAAitippoiinlloaotlt rrfeeittviierriiynneggaraatst aaoggfeeC66r00edwwiititethhd 33S00eryyvaeiaacrresso(ocffovCCerrreeiddniigtteetddheSSeeprrevvriiiccoeed aabtterrteewttieirerenemmeeangntetswwi6ill0ll aahadnnadvddiet66ia5o5nn))aalaaddd4ddd-ie1eti7ddo2nttyaooelatftrhihsveeoefooyrCreiirgageiridnsniaaoltlfe33dC00.rS.eerdvAAiitecdepp.iiSllooettrvrrieectteiirri(incngogvaaettrinaagggeeth66e00-p-11e//r22i,o, dwwoboueultlwddeerrenecceeaiigvveees a6ann0 additional 4-1/2 years of Credited Service. SSaallaarriieedd AAvveerraaggee EEaarrnniinnggss : cIInonsnststeeeaacddutooifvfetthhyeeeappriisllooott'fss pppeeennnsssiiiooonnn cbbaeemiiinnngggsbb,aassteehdde oopinnlot'ttshhee Saaavvleearrraaiggeeed ooAffvehhriissagooerr Ehhaeermrihhniigggshheewssittllffoobuuerr bbcaoassneesddecoounntivtthheeeyffoeoalllrlosowwoiinfnggpettaanbbsllieeo::n earnings, the pilot's Salaried Average E~xnings will be BiB-1 22775500..00222211 IIfF PPiilloott RReettiirreess:: `SSWaailllaalrriiBeeedd BAAavvseeerrdaaggoeenEETaharirnnsiinNnggussm**ber oWoffiCClloonBnseseecBcuuatstiievvdeeoCCnaalTleehnniddsaaNrr uYYmeeaabrressr: AA`tAtooorrr aaafffttteeerrr 666100 bbbuuuttt bbbeeefffooorrreee 666112 21 ! AA`AtAttoooorrrrafaaaftffttteeeerrrr 66661223 bbbuuuttt bbbeeefffooorrreee 666323 2333 At or after 63 4 A"*EvExexaramampglpeele:E:amiIIffngaasppwiillooouttlrrdeettiibrreeessthaaett gaarggeeeat66er00 ooof:rr oollddeerr bbuutt bbeeffoorree aaggee 6611,, hhiiss oorr hheerr SSaallaarriieedd Average Earnings would be the greater of: HH1i2issmooorrnthhheesrr hhoifiggghhaeemsstet dppaabiiaddscceaallaeenndnddaparrroyfeyieatarrsoohfafrSSianalglaarr(iioere,dd pPPleeannnssniieoodnn tEEotaaamrlniincngogsms,p,eoonrrsahhtiiissooonrr fhhoeerrrPlllaaassntt aYY1ne2eyaamrrpssornobbfteehiggsiinsnohnnfaiinrneigganrgnooennedaoombrreaaadsffettbeearurntJJdaannnoputuraoayrrfeyyitt s11p,h,aai22rd00in00(g88or)),(ouuprppl, apttnoolnaetnthdhneeevdppairitlilooaottbra'lsslecrrpeoeattmiyirrepeumemnneedsnneattrtiddotaanhtteeef,,oArwnwnhPhueleararnlee dIaInanntcyceeeinpntriiovvifeenictPPlslulhaadannerdiffnoobgrrasPPeelaldaarnnnoenYYdetebahareurrsstolnbbloeeiggtniigynnenn4tii-nnqpgugaairoodtnne(rooorrrpa,rfapotffletaiertnrJnsJaehandanuruaivanrargyryira1ba1, ,ile22i00pn00ae88yf))fbeubcynytdteathhreetthhrreeeetttiAiirmreneem.nmeuennatlt date is included based on the rolling 4-quaxter profit sharing rate in effect at the time. SSuupppplleemmeennttaall BBeenneeffiittss ((BB)):: CCrreeddiitteedd SSeerrvviiccee : IInn aaddddiittiioonn ttoo tthhee ppiilloott''ss `pension will be based on uaapcctttuuoaalltwCCorreeyddeiaittreesddo fSSeaerdrvdviiiccteeiouunpapl t1oC0rtethdheeitrreeedttiirSreeermvmieecnnett. ddaaTtthee,e, ttahhdeed ipptiiillooontta''sls arpaemmetnoiosuruineontmntenwwwtiiillallllnbdbbeeebagaeeesqqeuu6da2a.lol nt1oTu0hpitthtshoeeatwdyydeeoiaatrryissoenaaaarlsnnddoafmmmoaoduondnntitththissownilabblleettCawwlreseeoeednnibteettdhhueeSseepprdivilliioocntet''.ssdeTtaahcectertuumaaaildlndiaaintgggieoenthaaaetlt prpeiitllioortet'ms' eeellniigtgiibabinilldiittyyagffeoorr6tt2hh.ee 33TMMhiBsBrraiidddggdeeitibboeennnaeeflfiitat.xrlount will also be used in determining the AEExxaapmixlpnolptele:r:etiring at age 60 with 30 years of Credited Service at retirement will have an aaAaddddddpieiittldiiooot1nn0araleltthitterwwinooorgiyygeaeiatanrraasslgeo3o0ff.6CC0rAreweddpiitiithtleeoddt30rSSeeeytrrievvraiiirccnsgee ao((tfccaooCgvvreeeerrd6iini0ntgge1dtt/h2hSeewepoprveeurirlciiodeoddraebbtceeretetiwtwvieereeeeamnnneaaanggdteedssiwti66ilo00lnhaaalannvdd|e661a222n)) yyaedeaadrressdooftfoCrCtehrdeeidotirteeigddinSSaeerlrvv3ii0cce.e..A pilot retiring at age 60 1/2 would receive an additional 1 1/2 SSaallaarriieedd AAvveerraaggee EEaarrnniinnggss : cIInonsnststeeeaacddutooifvfetthhyeeeappriisllooottf'ssSappleeannrssiiieoodnn PbbeeeniisnniggonbbaaEssaeemddinoognns,tthhteeheaapvvieelrroaatgg'seeoSofaflhahiriissedoorrAvhheeerrrahhgiiegghhEeeasstmtiffnooguusrr wwcioilnlllsbebceeubbtaiavsseeeddyeooannrstthhoee fffooSllalloloawwriiienndgg table: Pension table: Earnings, the pilot's Salaried Average Earnings 2B-2 22775500..00222222 IIff PPiilloott RReetitirreess:: PPEiaillmooitr'nssgSSsaa*llaarriieedd AAvveerraaggee. WoEWfialirCllnloinBBnsegeescBB*uaatssieevddeooCnnalTTehhniidssaNNruuYmmebabreesrr of Consecutive Calendar Years: AAAtttoaorgraefatf6te0err&6600| month to age 61 2 23 AAAtatt gaaggeee 666110 &&& 11I mmmooonnnttthhhotororoaolglddeeer6r1 43 4 "I*EfExaxa~pmxiplnloptelser:se:tires a age 60, his or her Salaried Average Eamings would be the greater of: If a pilot retires at age 60, his or her Salaried Average E~xnings would be the greater of: "TpTlhhaeennppeiildloottt'o'sstahhliicggohhmeespstetnppsaaaiitddio22nccoofnonrssPeelccauutntiivvyeeeaccraasllebenendgdiaarnrnyyieenaagrrssonoofofrSSaaalflataerrriieeJddanPPueeannrsysiioo1nn. 2EE0aa0mr8ni)i,nnggosrs t((hooerr pilots last 24 planned total pilot's last 24 cmmoomonntpthehnssosoaftfSioSanlaalfaroriireePddlPaPneennysseiiaoornns Earnings up to his or hr retirementdate. beginning on or after January 1, 2008), or Earnings up to his or her retirement date. the ItIfhfetthhgeereppaiitlloeotrt roreefttiirreess aatt aagge 6e611 aanndd 11 mmoonntthh,, hhiiss oorr hheerr SSaallaarriieedd AAvveerraaggee EEa~rxnniinnggss wwoouulldd bbee the greater of: "T(Tohhreepppliaillnoontt'e'ssd hhtiioggthahleesscttomffopouuerrnsccaootnnissoeenccuufttoiirvveePlppaaaniiddYeccaaarllesennbddeaagrriyyneenaairrnssg oooffnSSoaarllaaarrfiieteddr JPPaeennnussaiirooynn 1EE,aar2rnn00iin8ng)g.ss odo(aorrtrett.hpheleanppinilleoodtt'sstolltaaassltt 48 months of Salaried compensation for Plan 48 months of Salaried Pension Eamings up to his Years beginning on or ~ter Pension Earnings up to his Jooarrnuhh~eexrryrree1tf,iir2re0amm0ee8nn)t,t date. Ba 22775500..00222233 CALCULATION33MMOFCCROOAM MTPPIAAONNOYYFAANNEDADRSSNUUBIBSNISGDISDITAIAR0RIEFIESIS.XED CHARGES CALCULATION OF RATIO OViFliEoAnRs)NINGS TO FIXED CHARGES (Millions) EXHIBIT 12 EXHIBIT 12 EARNINGS EARNINGS er your yor yor Yor Year ie ait WE NG 2016 Year 2015 Year 2014 Year 2013 Year 2012 A i[ nert i expense (including" amortizatiofn a m 16 166 91 IInnccoommeebbeeffoorreiinnccoommeettaaxxeess S 085 $ 7,053 $ 66,88233$s 77,00266$s 665,5622 s$ 663,38511 Add: Interest expense (including amortization of capitalized interest) 219 171 164 166 191 ereo Se ise Portion of rent under operating leases representative of the interest component 00 101 04 103 92 100 101 104 103 92 Less: Equity in undistributed income of 20-50% owned companies 9 5 (1) (1) 3 TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES EXFIEXDEDGHCHAARRGGEESS $ 7,363 $ 7,090 $ 7,295 $ 6,832 $ 6,631 I2 nIntteerreessttoonndde0 ebbtt((iinncclluuddiin8 nggccaappititaalliizzee1 dd intteerreesst)) 62 208 1 162 611 59 9 166 4 194 Portion of rent under operating leases representative of the interest component 100 TOTOTTAALLFFIIXXEEDDCCHHAARRGGEESS gs 308 RARTATIIOOOOFF EEAARRNNIINNGGSSTTOOFFIIXXEEDDCCHHAARRGGEESS 2238.99 101 104 ds 263 $ as 263 $ 2277.00 . 2217.77 103 29s 269 $ 25254.4 92 M6 286 22 23.2 22775500..00222244 Exum EXHIBIT 21 3VCOMPANY AND CONSOLIDATED SUBSIDIARIES (PARENT AND SUBSIDIARIES) 3M COMPANY AND CONSOLIDATED SUBSIDIARIES (PARENT AND SUBSIDIARIES) ASOF DECEMBER 31,2016 AS OF DECEMBER 31, 2016 Name CinderLawat Name of Company Registrant- 3M Company r ateear r: hee Consolidated subsidiaries of the Registrant: Organized Under Law of Delaware 3M Cogent, Inc. Delaware 3M Electronic Monitoring, Inc. 3M Financial Management Company EhEEGor. 3M Global Chaamel Services, Inc. 3M Innovative Properties Company Nomi 3M Purification Inc. Aearo Holding LLC EISENLc ee Aearo Technologies LLC Capital Safety North America Holdings Inc. im Ceradyne, Inc. 3M Unitek Corporation Hem Meguiar's, Inc. 3M Health Information Systems, Inc. Toh un 3M Touch Systems, Inc. Delaware Delaware EDivmas Delaware Delaware Divas Delaware Delaware BDeivmas Delaware Delaware Delmar Delaware California Cao California Maryland Aarts Massachusetts GTA-NHT, Inc. Massachusetts EE Inds,FiaT ncilKes D B Industries, LLC Two Harbors Insurance Company 3M Argentina Stock Compaaay, Commercial, Industrial, Financial Real Minnesota South Caxolina Property and Farming Corporation Argentina 3M Australia Pty. Ltd. Australia 3M Osterreich Gesellschafi m.b.H. Austria 3M Precision Grinding GmbH Austria 3M Belgium BVBA/SPRL Belgium 3M do Brasil Ltda. Brazil 3M Manaus Industria de Produtos Quimicos Ltda. 3M Canada Company Compagnie 3M Canada I Ri Co cam Gai Capital Safety Group Caaaada ULC 3M Chile S.A. Ni Cam mites Gm 3M China Limited Brazil Canada Canada Chile China 3M International Trading (Shanghai) Co., Ltd. China 3M International Trading (Shenzhen) Co., Ltd. China 3M Investments (China) Co., Ltd. China 3M Material Technology (Guangzhou) Co., Ltd. China 3M Material Technology (Hefei) Co., Ltd. China 3M Material Technology (Suzhou) Co., Ltd. China 3M Optical Systems Manufacturing Co., (Shaaaghai) Ltd. China 3M Speciality Materials (Shanghai) Co., Ltd. China 3M Colombia, S.A. Colombia Articulos de Seguridad S.A.S. Columbia 3M a/s Denmark Suomen 3M Oy Finland 3M Purification France 3M France S.A.S. France Capital Safety Group EMEA France g Gm r EMFI SAS 3M Bricolage & Batiment 3M Deutschland GmbH emmy France France Germaaay 22775500..00222255 Name of Compan.v e ETETR ot Re 3M Real Estate GmbH & Co. KG or Pa ind 3M Technical Ceramics, Zweigniederlassung der 3M Deutschland GmbH Commun dm Dyneon GmbH Wendt GmbH Nap mg 3M Hong Kong Limited Organized Under Law of Germmay Germany Germany Germany Hong Kong 3M India Limited MEkaromicMonitoring id 3M Electronic Monitoring Ltd 3M ITALIA s.r.1. al 3M Japan Limited 3M Japan Holdings G.K. nme 3M Japan Products Limited bIIsnerdaielal Italy mm Japan Japan Japan 3M Korea Health and Safety Limited Korea 3M Korea High Technology Limited Korea 3M Korea Ltd Korea 3M Asset Management S.a.r.1. Luxembourg 3M Attenti Holdings S.a.r.1. Luxembourg 3M Global Capital S.a.r.1. Capital Safety Group S.a.r.1. CSRERER 3M Malaysia Sdn. Bhd. ALE TRL cotrvirte 3M Mexico, Sociedad Anonima de Capital Vaxiable 3M Nederlmad B.V. Ee -- 3M New- Zealand Limited Luxembourg Luxembourg Eee Malaysia is Mexico Netherlmads Sr|-- New- Zealand 3M Norge A/S 3M Panama Pacifico S. de R.L. ---- a ---------- rr-- -- 3M Peru, Sociedad Anomia 3M Poland Spolka z ograniczona odpowiedzialnoscia aa a 3M Wroclaw spolka z ograniczona odpowiedzialnoscia Norway Panmna Peru Poland Poland 3M Puerto Rico, Inc. Puerto Rico 3M Romania S.R.L. Romania 3M Russia Closed Joint Stock Company Russia 3M Innovation Singapore Pte. Ltd. Singapore 3M Singapore Pte. Ltd. Singapore 3M TECHNOLOGIES (S) PTE. LTD. Cuno Filtration Asia Pte. Ltd. Be 3M South Africa (Proprietary) Limited 3M Espana, S.L. MEE am 3M Svenska Aktiebolag 3M EMEA, GmbH CREERRE Res 3M (East) A.G. 3M (Schweiz) GmbH IMSa A 3M Taiwan Ltd. Singapore Singapore South Africa Spain Sweden Switzerlmad Switzerlmad Switzerlmad Taiwan 3M Taiwan Optronics Corporation Taiwan Alpha Beta Global Tapes & Adhesives Co., Ltd. Taiwan 3M Thailand Limited Thailand 3M Sanayi Ve Ticaret A.S. Turkey 3M Gulf Limited United Arab Emirates 3M Health Care Limited 3M UK Holdings Limited IM admao ie imeCompany 3M United Kingdom Public Limited Company Capital Safety Acquisitions Limited gum Capital Safety ROW Limited United Kingdom United Kingdom ned United Kingdom United Kingdom gees United Kingdom 3M Manufacturera Venezuela, S.A. Venezuela NNOOTTE:SSdutbsiidaiaryy ecommpptanoiers eexscltudaetdffroommtthsesahboonvse listoingg, Wifocsounisiidnersetdiisn btheeaaggggoremgeaete,, swouudldsnookt cmoansdtieturteaa Ssigpniificnanet subsidiary. 22775500..00222266 EXHIBIT 23 ------ CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM nt sce fee en So For 4 fg e180 We hereby consent to the incorporation by reference in the Registration Statements on Form S-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, 333-174562, 333-181269, 333-181270, and 333-211431) and Form S-3 (Registration Nos. 333-196003, 33-48089, ee 333-42660, and 333-109211) of 3M Company of our report dated February 9, 2017 relating to the financial statements and the a effectiveness of internal control over financial reporting, which appears in this Form 10-K. I ---- /s/PricewaterhouseCoopers LLP fe PricewaterhouseCoopers LLP Minneapolis, Minnesota February 9, 2017 22775500..00222277 Fibra EXHIBIT 24 POWER OF ATTORNEY POWER OF ATTORNEY sch the undeignd Directors and he Principal Executive, Picipl Financial and Principl Accounting Ofcrsof Each of the undersigned Directors and the Principal Executive, Principal Financial and Principal Accounting Officers of Co a tt rt ne fi, Said Gms 3M COMPANY, a Delaware corporation (the "Company"), hereby constitute and appoint Inge G. Thulin, Nicholas C. Gangestad, Greg ML, iD. Hams, aK. Font ahd Male J Got, nd shof hh. oo et mic ad i my. Gregg M. Larson, Eric D. Hammes, Ivan K. Fong, and Matthew- J. Ginter, and each of them, his or her true and lawful attorneys-inEa sete: with lland vrs poe f abr an and cubation: ot oh 4nd or hr Tams, lcs and 15d 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 idallCapac, 1 ors Annual Report for he Compan cal vcr ended Dossier 31.210. Form 101 in any and all capacities, to sign one or more Annual Reports for the Company's fiscal year ended December 31, 2016, on Form 10- mirth Sckmic xchangeAct of 934, amend, any amendment her, a isons amend hori, och K under the Securities Exchange Act of 1934, as amended, any amendments thereto, and all additional amendments thereto, each in omaran sno fam aprons, and 1 1c te sme wih Xi eto debtdoom opecon 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 ren heSec 0d ExhCom, Ean ats Sid Ay"ct ndSEE: nd 20of hom. ol therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full oe and aur thor iyand pro hand ve SE nd hg el nd mara ems ht ach Annus Report power and authority to do and perform each and every act and thing requisite and necessary to be done so that such Annual Report Ses nt et8 TL hieed he ple Fc nd Resins or Annual Reports shall comply with the Securities Exchange Act of 1934, as amended, and the applicable Rules and Regulations Shenod ar ead para At A snd ems Tne 5bor hegoSpb rs, RTS ob 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 erg ld anomie sO hoo tee SHA ebb es To doorot. and confirming all that said attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause Ta Sd ht to be done by virtue hereof. "The ndoigned bave signed tis PoofAtormey this ay of February 2017. The undersigned have signed this Power ofAttorney this 7th day of February 2017. lage Thali Nias Gongsnd /s/Inge G. Thulin pes te Cee Tor Fern NithlaeC Carpet: Serio Vis render sn CHT Inge G. Thulin, Chairman of the Board, President and EBs Ot Canela On snd Fane thas Grn nance ihe) Chief Executive Officer (Principal Executive Officer and Betis Director) /s/ Nicholas C. Gangestad Nicholas C. Gangestad, Senior Vice President and Chief Financial Officer (Principal Financial Officer) Sond bo ie lamnes /s/Sondra L. Barbour Sond ben: Drei FrceantiHnagmGmeessVes FnreoldeesoCuomritngolOeTrde)CRT Sondra L. Barbour, Director /s/Eric D. Hammes Eric D. Hammes, Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) Thomas tions, /s/Thomas K. Brown Tromack own. iver Thomas K. Brown, Director Vanes D Cott nada Lids /s/Vance D. Coffman Vee Coma recor Evi Ly: Dr Vance D. Coffman, Director /s/Edward M. Liddv Edward M. Liddy, Director David Dike Gosgorv it Pus /s/David B. Dillon Brad Dien: Breer gon R Page: Dicer David B. Dillon, Director /s/Gregory R. Page Gregory R. Page, Director Mistal Eten ates Ulich /s/Michael L. Eskew Nikiae lon: Dicer Reber Vinh. Dri Michael L. Eskew, Director /s/Robert J. Ulrich Robert J. Ulrich, Director sleite APwaAWeey /s/Herbert L. Henkel fice Tent recor Frnea nore Prior Herbert L. Henkel, Director /s/Patricia A. Woertz Patricia A. Woertz, Director Saker /s/Muhtar Kent Via Kon Drs Muhtar Kent, Director 22775500..00222288 Fama EXHIBIT 31.1 SARBANES-OXLEY SECTION 302 CERTIFICATION SARBANES-OXLEY SECTION 302 CERTIFICATION Inge G. Tht, cori he I, Inge G. Thulin, certify that: 1. ane viewed hi saa porto Forms 10 of 3M Company 1. I have reviewed this annual report on Form 10-K of 3M Company; 2 Pape ou my edge, seerdose con an nie siemens ofa ttl ft airs math. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material ridin uth mibeipiin hii hoa fact necessary to make the statements made, in light of the circumstances under which such statements were made, not ang wh pte Pond ned pr misleading with respect to the period covered by this report; 3. Badou my knoe, the Gran stents, and ther Gaal pra nludd ns por fy present in 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in er pa at conesof panhE Hos oh Rep ea all material respects the financial condition, results of operations and cash flow-s of the Registrant as of, and for, the Teens periods presented in this report; 2. The Regn tgsci ofc sd as ope fr bling sud nao dso stl nd 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and Orso ened ngs Als 0) 150 6 sd aml cr ve net pon 55 procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as nc hamte AG es 1 5nd 15150 or he Regennd hve defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: pred soy dar sass pons gpl so atop nfl dra oe (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be tr no ts em ne eg in designed under our supervision, to ensure that material information relating to the Registrant, including its ee consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in ee a which this report is being prepared; () Doig uh el cond ve Fons porting. or caved sch ernl conte ne nil porns (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting pe aaa or pelt seb a OTE A oF BR to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial errin Svb hapa 8 Besa evmonsfor SH Popo ne A Br tcc reporting and the preparation of financial statements for external purposes in accordance with generally accepted Ene, accounting principles; ( Fraud the efitsthe Resa Aloe contol and procedes nd pdi seer (c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report a de ms Fm ty our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period foi elite petegs covered by this report based on such evaluation; and 1 Dts 0 sept sn ching ft Regist' ttl soto avs Bac poi at cured (d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred ig eer mest re oe ae. oh fo uate hs ooa nl during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual ht ti loc. o sig HL marr ce Regn onl comet report) that has materially affected, or is reasonably likely to materially affect, the Registraaat's internal control ramet epg 8 over financial reporting; and 5The Rein' thr cionffsgand have disghosd bed ur ost ent altonof ermal sol aver 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over neato et Kaors wo sui omrpoef s Rogen onl on or ens financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons Tin es performing the equivalent functions): 6) spin eins ad srl vegas dso peat of ters cto ve Bosal (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial aE Abt Tal Bh Sool Sos FogAo toa not sem reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize Tort menan wios ond and report financial information; and (8)Any Gud heir or ct meal, tht voles managment hr spl whobavea significant le i (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in ifr i hb Wk pio the Registrant's internal control over financial reporting. use Tt /s/Inge G. Thulin rae Inge G. Thulin Chel Exesuive Officer Chief Executive Officer Feomary 9.2017 February 9, 2017 22775500..00222299 Fama EXHIBIT 31.2 SARBANES-OXLEY SECTION 302 CERTIFICATION SARBANES-OXLEY SECTION 302 CERTIFICATION 1 NicholaCs. Gages cry tht I, Nicholas C. Gangestad, certify that: 1. ne viewed hi saa porto Forms 10 of 3M Company 1. I have reviewed this annual report on Form 10-K of 3M Company; 2 Pape ou my edge, seerdose con an nie siemens ofa ttl ft airs math. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material ridin uth mibeipiin hii hoa fact necessary to make the statements made, in light of the circumstances under which such statements were made, not ang wh pte Pond ned pr misleading with respect to the period covered by this report; 3. Badou my knoe, the Gran stents, and ther Gaal pra nludd ns por fy present in 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in er pa at conesof panhE Hos oh Rep ea all material respects the financial condition, results of operations and cash flow-s of the Registrant as of, and for, the Teens periods presented in this report; 2. The Regn tgsci ofc sd as ope fr bling sud nao dso stl nd 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and Orso ened ngs Als 0) 150 6 sd aml cr ve net pon 55 procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as nc hamte AG es 1 5nd 15150 or he Regennd hve defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: pred soy dar sass pons gpl so atop nfl dra oe (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be tr no ts em ne eg in designed under our supervision, to ensure that material information relating to the Registrant, including its ee consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in ee a which this report is being prepared; () Doig uh el cond ve Fons porting. or caved sch ernl conte ne nil porns (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting pe aaa or pelt seb a OTE A oF BR to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial errin Svb hapa 8 Besa evmonsfor SH Popo ne A Br tcc reporting and the preparation of financial statements for external purposes in accordance with generally accepted Ene, accounting principles; ( Fraud the efitsthe Resa Aloe contol and procedes nd pdi seer (c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report a de ms Fm ty our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period foi elite petegs covered by this report based on such evaluation; and 1 Dts 0 sept sn ching ft Regist' ttl soto avs Bac poi at cured (d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred ig eer mest re oe ae. oh fo uate hs ooa nl during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual ht ti loc. o sig HL marr ce Regn onl comet report) that has materially affected, or is reasonably likely to materially affect, the Registraaat's internal control ramet epg 8 over financial reporting; and 5The Rein' thr cionffsgand have disghosd bed ur ost ent altonof ermal sol aver 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over neato et Kaors wo sui omrpoef s Rogen onl on or ens financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons Tin es performing the equivalent functions): 6) spin eins ad srl vegas dso peat of ters cto ve Bosal (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial aE Abt Tal Bh Sool Sos FogAo toa not sem reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize Tort menan wios ond and report financial information; and (8)Any Gud heir or ct meal, tht voles managment hr spl whobavea significant le i (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in ifr i hb Wk pio the Registrant's internal control over financial reporting. Niels Ganges /s/ Nicholas C. Gangestad rary Nicholas C. Gangestad Cm Ses Chief Financial Officer Feomary 9.2007 February 9, 2017 22775500..00223300 EXHIBIT 321 `SARBANES-OXLEY SECTION906 CERTIFICATION EXHIBIT 32.1 ITInSccTooWnnineeccttitioohenn SwietithchutthhreeeAAnnnnnduEauxl cRRehepaponorgSrtteAooCRffoB3m3MAmMiNCCsEooimSmop-pnOaanXnoyytLh(E(thehYeedS""aCEtCeoCobmTmrpIepOanaaNyn("9)hy0eoo6"nnCFRFEooerrpRmmoTrI11tF00)I--,KCKAffIooTnrrIgttOhehee.NppeTerhioiidn,eennCddeehddiDDeFeexccaeecrmubbieenrre331O1,f,2e0210r61aoa6fs filed with the Securities and Exchange Commission hhaetCtomopyanR.ioewrayd.hepursuant 115 U.CS Schon the Company, certify, pursuant to 18 U.S.C. Section 135, on the 1350, bopied puss10Seen 90of 8he Safbancs-Onies Ac date hereof (the "Report"), I, Inge G. Thulin, Chief Executive as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002 Officer of of 2002, that, to my knowledge: 1. TheReport llycomplies withthe reirments of Section 1304o)r 15)ofthe Securities changeActof 1934; 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 22. TThhepeieinnfrfooarmmattatiooioofnnnthscceootnCstoaiimnnpeeddaniinn the the Report Report ilyfairly press, presents, nalin all mates material respects, respects, the the nancial financial condition condition and and slsof results of operations neInsgeT. Thhulin /s/In~e G. Thulin of the Company. Ciel Inge G. ETxheuultiniv Officer Chief Executive Officer February 9,2017 February 9, 2017 22775500..00223311 EXHBIT22 `SARBANES-OXLEY SECTION906 CERTIFICATION EXHIBIT 32.2 ITInSccToonnWneieccttitioohenn SwietithchutthhreeeAAnnnnnduEauxl cRRehepaponorgSrtteAooCRffoB3m3MAmMiNCCsEooimSmop-pnOaanXnoyytLh(E(thehYeedS""aCEtCeoCobmTmrpIepOanaaNy(n"9h)y0eoo6"nnCFRFeEooprrRommrTtI11)F00.I--KCK|, AffNooTirrIcttOhhheeNolppeaersioidGaeennngddeeesddtdDD,eeccCeermhbibeetrr 33F1i1n,a,2n02c1i0a613a6s3 O T2002.c ofhthetCotmpaKnn.onSideey: pursuant 18 U-3.C. filed with the Securities and Exchange Commission on Officer of the Company, certify, pursuant to 18 U.S.C. Sechion the date Section 350.4 adopiod passant fo Seton500 of th Subanes-Onley Act hereof (the "Report"), I, Nicholas C. Gangestad, Chief Financial 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. TheReport llycomplies withthe reirments of Section 1304o)r 15)ofthe Securities changeActof 1934; 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 22. TThhepeieinnfrfooarmmattatiooioofnnnthscceootnCstoaiimnnpeeddaniinn the the Report Report ilyfairly press, presents, nalin all mates material respects, respects, the the nancial financial condition condition and and slsof results of N/si/cNNhiiocclhhaoolsloaa.psseCCCraa_.tnGiGogaanennssg~aoeedfssttaahdde Company. ChuetFinancil Or Nicholas C. Gangestad Chief Financial Officer February 9,2017 February 9, 2017 22775500..00223322 examss EXHIBIT 95 NINESAFETY DISCLOSURES MINE SAFETY DISCLOSURES Forte cr200 dhe Component fort pti secon th Sel SEAof )he Actin cect 1 itor. Noth Carolin mine thtle Rok. Aiansan mine. the Coron,Calon mine. andthe Wasa, Wisconsin in (ncloding For the year 2016, the Company has the following mine safety information to report in accordance with Section 1503(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 Eon my Greystone Plant): EEEAEE mpeon Mine or Operating n Name/MSHA [En Con Identification Section 104 S&S Citations wweeSection 104(b) JBRE,L Section 104(d) Citations and mmee wwee eREm Section CL 110(b)(2) Section 107(a) Total Dollar Value of MSHA Assessments Proposed Received aUECor SGEE EMEERR pEeEnGaEmeRGSEES TotalNumber of Mining =Ol = de" Related Received Notice of Patiern of Viohtions Under Section Notice of Potential to Have Patiern Under Section 104(e) Legal Actions Pending as of Last Day of Aggregate Aggregate Legal Actions Legal Actions Resolved Initiated During During Period Number (#~ Orders (#~ Orders (#~ Violations (#~ Orders (#~ ($) Fatalities (#~ 104(e~ (ves/no~ (ves/no~ Period Period (#) 3M Pitlsboro ID: 3102153 $ 466 No No 3M Litile Rock ID: 0300426 5 $ 7,128 No No 3M Coroila Plant ID: 0400191 3 $ 6,281 No No Bee Greystone Plant ID: 4700119 5 Wuusau Plant ID: 4702918 2 $ 1,294 $ 2,567 WNL No No No No Total 15 $ 17,736 22775500..00223333