EXHIBIT 12
3M COMPANY
AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions)
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Three months |
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ended |
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March 31, |
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Year |
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Year |
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Year |
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Year |
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Year |
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2006 |
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2005 |
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2004 |
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2003 |
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2002 |
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2001 |
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EARNINGS |
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Income before income taxes, minority interest, and cumulative effect of accounting change* |
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$ |
1,355 |
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$ |
4,828 |
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$ |
4,303 |
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$ |
3,448 |
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$ |
2,775 |
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$ |
1,988 |
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Add: |
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Interest expense |
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26 |
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101 |
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88 |
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103 |
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100 |
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143 |
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Interest component of the ESOP benefit expense |
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2 |
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10 |
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12 |
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14 |
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16 |
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18 |
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Portion of rent under operating leases representative of the interest component |
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17 |
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64 |
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60 |
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53 |
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45 |
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39 |
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Less: |
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Equity in undistributed income of 20-50% owned companies |
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1 |
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4 |
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6 |
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7 |
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10 |
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5 |
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TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES |
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$ |
1,399 |
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$ |
4,999 |
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$ |
4,457 |
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$ |
3,611 |
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$ |
2,926 |
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$ |
2,183 |
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FIXED CHARGES |
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Interest on debt |
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25 |
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94 |
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78 |
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93 |
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100 |
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150 |
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Interest component of the ESOP benefit expense |
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2 |
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10 |
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12 |
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14 |
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16 |
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18 |
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Portion of rent under operating leases representative of the interest component |
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17 |
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64 |
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60 |
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53 |
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45 |
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39 |
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TOTAL FIXED CHARGES |
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$ |
44 |
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$ |
168 |
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$ |
150 |
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$ |
160 |
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$ |
161 |
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$ |
207 |
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RATIO OF EARNINGS TO FIXED CHARGES |
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31.8 |
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29.8 |
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29.7 |
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22.6 |
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18.2 |
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10.5 |
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* As discussed in Note 1 to the Consolidated Financial Statements, effective January 1, 2006, 3M adopted SFAS No.123R. Since 3M elected to use the modified retrospective method prior periods have been restated, resulting in a reduction in earnings and in the ratio of earnings to fixed charges. 2003 includes a $93 million pre-tax loss related to an adverse ruling associated with a lawsuit filed by LePage’s Inc. 2002 and 2001 include net pre-tax losses of $202 million and $504 million, respectively, primarily related to the restructuring.