3M COMMM

3M CO Leases Disclosure

10-KFiled Feb 3, 20262 min read
Note 18. Leases
3M's lease arrangements include both operating and finance leases. Amounts associated with finance leases (such as right-of-use assets, liabilities, costs, cash flow information, and maturities) were not material to the consolidated financial statements. Finance lease right-of-use assets are included in property, plant, and equipment, net, and finance lease liabilities are included in other current liabilities and other liabilities on the consolidated balance sheets.
The following table summarizes the components of operating lease cost:
(Millions)202520242023
Operating lease cost$203 $210 $259 
Variable lease cost105 114 103 
Total operating lease cost$308 $324 $362 
Short-term lease cost and income related to sub-lease activity is immaterial for the Company.
Supplemental balance sheet, lease term and discount rate information related to operating leases is as follows:
(Millions unless noted)
Location on face of balance sheet
December 31, 2025December 31, 2024
Right of use assets
Other assets
$516 $565 
Current liability
Other current liabilities
167 163 
Noncurrent liability
Other liabilities
363 405 
Weighted average remaining lease term (in years)
4.95.3
Weighted average discount rate
3.5 %3.5 %
As previously noted, the consolidated statements of cash flows include the results of continuing and discontinued operations. Supplemental cash flow information related to operating lease is as follows:
(Millions)202520242023
Cash paid for amounts included in the measurement of lease liabilities
$200 $212 $260 
Right of use assets obtained in exchange for operating lease liabilities
144 196 262 
Sale leased-back activity for the periods presented was not material.
Maturities of operating leases as of December 31, 2025 are as follows:
(Millions)
2026$181 
2027125 
202883 
202953 
203039 
After 2030
82 
Total expected lease payments563 
Less: Amounts representing interest(33)
Present value of future minimum lease payments530 
Less: Current obligations167 
Long-term obligations$363 
As of December 31, 2025, the Company has an immaterial amount of additional operating lease commitments that have not yet commenced. These commitments pertain to 3M’s right of use of certain buildings.
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About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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