EXHIBIT 12

 

3M COMPANY AND SUBSIDIARIES

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Millions)

 

 

 

Nine months

 

 

 

 

 

 

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

Year

 

Year

 

Year

 

Year

 

Year

 

 

 

2007

 

2006

 

2005

 

2004

 

2003

 

2002

 

EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes, minority interest, and cumulative effect of accounting change*

 

$

4,878

 

$

5,625

 

$

4,828

 

$

4,303

 

$

3,448

 

$

2,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

150

 

139

 

101

 

88

 

103

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest component of the ESOP benefit expense

 

4

 

8

 

10

 

12

 

14

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rent under operating leases representative of the interest component

 

52

 

70

 

64

 

60

 

53

 

45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in undistributed income of 20-50% owned companies

 

4

 

6

 

4

 

6

 

7

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES

 

$

5,080

 

$

5,836

 

$

4,999

 

$

4,457

 

$

3,611

 

$

2,926

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FIXED CHARGES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on debt

 

159

 

138

 

94

 

78

 

93

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest component of the ESOP benefit expense

 

4

 

8

 

10

 

12

 

14

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rent under operating leases representative of the interest component

 

52

 

70

 

64

 

60

 

53

 

45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL FIXED CHARGES

 

$

215

 

$

216

 

$

168

 

$

150

 

$

160

 

$

161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RATIO OF EARNINGS TO FIXED CHARGES

 

23.6

 

27.0

 

29.8

 

29.7

 

22.6

 

18.2

 

 

* First nine months 2007 results included net pre-tax gains of $701 million, with net benefits from gains related to the sale of businesses and real estate partially offset by increases in environmental liabilities, restructuring actions and other exit activities. 2006 results included net pre-tax gains of $523 million, with net benefits from gains related to the sale of certain portions of 3M’s branded pharmaceuticals business partially offset by restructuring actions, acquired in-process research and development expenses, settlement costs of a previously disclosed antitrust class action, and environmental obligations related to the pharmaceuticals business. 2003 includes a $93 million pre-tax loss related to an adverse ruling associated with a lawsuit filed by LePage’s Inc. 2002 includes net pre-tax losses of $202 million, primarily related to the 2001/2002 corporate restructuring program.