EXHIBIT 99
As more fully described below, during the first quarter of 2008, 3M effected certain business segment realignments. 3M is including in this Current Report on Form 8-K supplemental unaudited reclassified business segment net sales and operating income information (provided on an annual and quarterly basis for the years ended December 31, 2007, 2006 and 2005).
This supplemental unaudited information is being provided to show reclassified historical results for the realigned segments. The Company did not operate under the realigned segments structure for any of these prior periods and will begin to report comparative results under the new structure effective with the filing of its Quarterly Report on Form 10-Q for the quarter ending March 31, 2008.
Effective in the first quarter of 2008, 3M made certain changes to its business segments in its continuing effort to drive growth by aligning businesses around markets and customers. These changes are summarized as follows:
· 3Ms Display and Graphics segment created the Projection Systems Department by combining Visual Systems, 3M Precision Optics Inc. and the Companys mobile display technology. The new department will focus on bringing 3M technology to the projection market, providing customers with a centralized resource dedicated to developing differentiated solutions. Visual Systems (previously in the Electro and Communications segment) serves the worlds office and education markets with overhead projectors and transparency films, as well as equipment and materials for electronic and multimedia presentations. 3M Precision Optics Inc. and the Companys mobile display technology were previously part of the Optical Systems Division within the Display and Graphics segment.
· 3Ms Touch Systems business (previously in the Display and Graphics segment), which includes touch screens and touch monitors, was transferred to the Electro and Communications segment. Touch Systems brings synergistic technologies and strong alignment with 3Ms electronics divisions and markets.
· Certain adhesives and tapes in the Industrial Adhesives and Tapes business (Industrial and Transportation segment) were transferred to the Consumer and Office segment, primarily related to the Stationery Products business and Construction and Home Improvement business.
Segment information for all periods presented has been reclassified to reflect the new segment structure. There were no changes for the Health Care segment, Safety, Security and Protection Services segment, or 3M in total. The impact of these changes on previously reported 2007 net sales and operating income is summarized as follows:
|
|
NET SALES |
|
OPERATING INCOME |
|
||||||||||||||
Year ended Dec. 31, 2007 |
|
Previously |
|
|
|
|
|
Previously |
|
|
|
|
|
||||||
(Dollars in millions) |
|
Reported |
|
Revised |
|
Change |
|
Reported |
|
Revised |
|
Change |
|
||||||
Industrial and Transportation |
|
$ |
7,274 |
|
$ |
7,266 |
|
$ |
(8 |
) |
$ |
1,501 |
|
$ |
1,497 |
|
$ |
(4 |
) |
Health Care |
|
3,968 |
|
3,968 |
|
|
|
1,882 |
|
1,882 |
|
|
|
||||||
Display and Graphics |
|
3,892 |
|
3,904 |
|
12 |
|
1,174 |
|
1,163 |
|
(11 |
) |
||||||
Consumer and Office |
|
3,403 |
|
3,411 |
|
8 |
|
688 |
|
692 |
|
4 |
|
||||||
Safety, Security and Protection Services |
|
3,070 |
|
3,070 |
|
|
|
611 |
|
611 |
|
|
|
||||||
Electro and Communications |
|
2,775 |
|
2,763 |
|
(12 |
) |
481 |
|
492 |
|
11 |
|
||||||
Corporate and Unallocated |
|
80 |
|
80 |
|
|
|
(144 |
) |
(144 |
) |
|
|
||||||
Total Company |
|
$ |
24,462 |
|
$ |
24,462 |
|
$ |
|
|
$ |
6,193 |
|
$ |
6,193 |
|
$ |
|
|
3Ms businesses are organized, managed and internally grouped into segments based on differences in products, technologies and services. Effective in the first quarter of 2008, 3M continues to manage its operations in six operating business segments: Industrial and Transportation segment, Health Care segment, Display and Graphics segment, Consumer and Office segment, Safety, Security and Protection Services segment, and the Electro and Communications segment. 3Ms six business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. These segments have worldwide responsibility for virtually all 3M product lines. 3M is not dependent on any single product or market. Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income information shown.
Supplemental Unaudited Business Segment Information
Based on Segment Structure Effective in the First Quarter of 2008
Net Sales
NET SALES |
|
First |
|
Second |
|
Third |
|
Fourth |
|
Total |
|
|||||
(Millions) |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Year |
|
|||||
Industrial and Transportation |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
1,783 |
|
$ |
1,802 |
|
$ |
1,805 |
|
$ |
1,876 |
|
$ |
7,266 |
|
2006 |
|
1,670 |
|
1,660 |
|
1,652 |
|
1,650 |
|
6,632 |
|
|||||
2005 |
|
1,500 |
|
1,492 |
|
1,518 |
|
1,528 |
|
6,038 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Health Care |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
962 |
|
$ |
988 |
|
$ |
961 |
|
$ |
1,057 |
|
$ |
3,968 |
|
2006 |
|
966 |
|
1,000 |
|
998 |
|
1,047 |
|
4,011 |
|
|||||
2005 |
|
948 |
|
957 |
|
926 |
|
929 |
|
3,760 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Display and Graphics |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
926 |
|
$ |
1,005 |
|
$ |
1,017 |
|
$ |
956 |
|
$ |
3,904 |
|
2006 |
|
915 |
|
906 |
|
984 |
|
942 |
|
3,747 |
|
|||||
2005 |
|
867 |
|
866 |
|
919 |
|
907 |
|
3,559 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consumer and Office |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
817 |
|
$ |
834 |
|
$ |
899 |
|
$ |
861 |
|
$ |
3,411 |
|
2006 |
|
743 |
|
771 |
|
850 |
|
808 |
|
3,172 |
|
|||||
2005 |
|
679 |
|
723 |
|
789 |
|
744 |
|
2,935 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Safety, Security and Protection Services |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
758 |
|
$ |
799 |
|
$ |
766 |
|
$ |
747 |
|
$ |
3,070 |
|
2006 |
|
639 |
|
662 |
|
691 |
|
671 |
|
2,663 |
|
|||||
2005 |
|
561 |
|
607 |
|
581 |
|
571 |
|
2,320 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Electro and Communications |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
664 |
|
$ |
693 |
|
$ |
709 |
|
$ |
697 |
|
$ |
2,763 |
|
2006 |
|
649 |
|
676 |
|
673 |
|
656 |
|
2,654 |
|
|||||
2005 |
|
597 |
|
634 |
|
636 |
|
630 |
|
2,497 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate and Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
27 |
|
$ |
21 |
|
$ |
20 |
|
$ |
12 |
|
$ |
80 |
|
2006 |
|
13 |
|
13 |
|
10 |
|
8 |
|
44 |
|
|||||
2005 |
|
14 |
|
15 |
|
13 |
|
16 |
|
58 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Company |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
5,937 |
|
$ |
6,142 |
|
$ |
6,177 |
|
$ |
6,206 |
|
$ |
24,462 |
|
2006 |
|
5,595 |
|
5,688 |
|
5,858 |
|
5,782 |
|
22,923 |
|
|||||
2005 |
|
5,166 |
|
5,294 |
|
5,382 |
|
5,325 |
|
21,167 |
|
Supplemental Unaudited Business Segment Information
Based on Segment Structure Effective in the First Quarter of 2008
Operating Income
Refer to Note 2 and Note 4 to the Consolidated Financial Statements in 3Ms 2007 Annual Report on Form 10-K for disclosure of items that significantly impacted 2007 and 2006 business segment reported operating income. The most significant items impacting 2007 and 2006 operating income are the gain on sale of businesses, primarily the global branded pharmaceuticals business (within the Health Care segment), and restructuring and other actions. Operating income presented in the table that follows includes the impact of these significant items.
Corporate and Unallocated operating income principally includes corporate investment gains and losses, certain derivative gains and losses, insurance-related gains and losses, certain litigation expenses, corporate restructuring program charges and other miscellaneous items. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.
OPERATING INCOME
|
|
First |
|
Second |
|
Third |
|
Fourth |
|
Total |
|
|||||
(Millions) |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Year |
|
|||||
Industrial and Transportation |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
410 |
|
$ |
358 |
|
$ |
377 |
|
$ |
352 |
|
$ |
1,497 |
|
2006 |
|
379 |
|
319 |
|
338 |
|
302 |
|
1,338 |
|
|||||
2005 |
|
308 |
|
312 |
|
290 |
|
296 |
|
1,206 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Health Care |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
1,062 |
|
$ |
279 |
|
$ |
259 |
|
$ |
282 |
|
$ |
1,882 |
|
2006 |
|
298 |
|
261 |
|
287 |
|
999 |
|
1,845 |
|
|||||
2005 |
|
272 |
|
284 |
|
273 |
|
285 |
|
1,114 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Display and Graphics |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
296 |
|
$ |
350 |
|
$ |
283 |
|
$ |
234 |
|
$ |
1,163 |
|
2006 |
|
295 |
|
239 |
|
290 |
|
221 |
|
1,045 |
|
|||||
2005 |
|
288 |
|
271 |
|
313 |
|
285 |
|
1,157 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consumer and Office |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
178 |
|
$ |
165 |
|
$ |
193 |
|
$ |
156 |
|
$ |
692 |
|
2006 |
|
151 |
|
136 |
|
191 |
|
155 |
|
633 |
|
|||||
2005 |
|
127 |
|
149 |
|
182 |
|
155 |
|
613 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Safety, Security and Protection Services |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
181 |
|
$ |
140 |
|
$ |
157 |
|
$ |
133 |
|
$ |
611 |
|
2006 |
|
158 |
|
139 |
|
141 |
|
111 |
|
549 |
|
|||||
2005 |
|
118 |
|
142 |
|
133 |
|
120 |
|
513 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Electro and Communications |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
110 |
|
$ |
135 |
|
$ |
119 |
|
$ |
128 |
|
$ |
492 |
|
2006 |
|
118 |
|
113 |
|
123 |
|
56 |
|
410 |
|
|||||
2005 |
|
82 |
|
112 |
|
117 |
|
102 |
|
413 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate and Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
(136 |
) |
$ |
(30 |
) |
$ |
37 |
|
$ |
(15 |
) |
$ |
(144 |
) |
2006 |
|
(30 |
) |
(32 |
) |
(28 |
) |
(34 |
) |
(124 |
) |
|||||
2005 |
|
(42 |
) |
(26 |
) |
(41 |
) |
(53 |
) |
(162 |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Company |
|
|
|
|
|
|
|
|
|
|
|
|||||
2007 |
|
$ |
2,101 |
|
$ |
1,397 |
|
$ |
1,425 |
|
$ |
1,270 |
|
$ |
6,193 |
|
2006 |
|
1,369 |
|
1,175 |
|
1,342 |
|
1,810 |
|
5,696 |
|
|||||
2005 |
|
1,153 |
|
1,244 |
|
1,267 |
|
1,190 |
|
4,854 |
|
Supplemental Unaudited Business Segment Information
Based on Segment Structure Effective in the First Quarter of 2008
Reconciliation of GAAP to Non-GAAP Operating Income
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Company also discusses non-GAAP measures that exclude special items. Operating income measures that exclude special items are not in accordance with, nor are they a substitute for, GAAP measures. Special items represent significant charges or credits that are important to an understanding of the Companys ongoing operations. The Company uses these non-GAAP measures to evaluate and manage the Companys operations. The Company believes that discussion of results excluding special items provides a useful analysis of ongoing operating trends. The determination of special items may not be comparable to similarly titled measures used by other companies.
As discussed in 3Ms 2007 Annual Report on Form 10-K, 2007 results included net gains that increased pre-tax operating income by $681 million. 2007 included gains related to the sale of businesses ($849 million) and a gain on sale of real estate ($52 million), which were partially offset by increases in environmental liabilities ($134 million), restructuring actions ($41 million), and other exit activities ($45 million). Net gains of $653 million were recorded for the three-months ended March 31, 2007 (first quarter of 2007), in addition to net gains of $22 million in the second quarter of 2007, net gains of $26 million in the third quarter of 2007, and net losses of $20 million in the fourth quarter of 2007.
As also discussed in 3Ms 2007 Annual Report on Form 10-K, 2006 results included net gains that increased pre-tax operating income by $523 million. 2006 included net benefits from gains related to the sale of certain portions of 3Ms branded pharmaceuticals business ($1.074 billion), which were partially offset by restructuring actions ($403 million), acquired in-process research and development expenses ($95 million), settlement costs of a previously disclosed antitrust class action ($40 million), and environmental obligations related to the pharmaceuticals business ($13 million). These items primarily impacted the three-months ended December 31, 2006 (fourth quarter of 2006) with net gains totaling $585 million, except for the $40 million in settlement costs which were incurred in the second quarter of 2006 and certain costs related to the Companys efforts to sell its pharmaceuticals business ($9 million in the second quarter of 2006 and $13 million in the third quarter of 2006).
The reconciliation provided below, which has been revised from what was previously reported to reflect the new segment structure effective in the first quarter of 2008, reconciles the non-GAAP operating income measure by business segment with the most directly comparable GAAP financial measure for the twelve months ended December 31, 2007 and 2006.
|
|
Twelve-months ended |
|
Twelve-months ended |
|
||||||||||||||
OPERATING INCOME BY |
|
GAAP |
|
|
|
Adjusted |
|
GAAP |
|
|
|
Adjusted |
|
||||||
BUSINESS SEGMENT |
|
Operating |
|
Special |
|
Non-GAAP |
|
Operating |
|
Special |
|
Non-GAAP |
|
||||||
(Millions) |
|
Income |
|
items |
|
Oper. Income |
|
Income |
|
Items |
|
Oper. Income |
|
||||||
Industrial and Transportation |
|
$ |
1,497 |
|
$ |
9 |
|
$ |
1,506 |
|
$ |
1,338 |
|
$ |
15 |
|
$ |
1,353 |
|
Health Care |
|
1,882 |
|
(791 |
) |
1,091 |
|
1,845 |
|
(673 |
) |
1,172 |
|
||||||
Display and Graphics |
|
1,163 |
|
(51 |
) |
1,112 |
|
1,045 |
|
31 |
|
1,076 |
|
||||||
Consumer and Office |
|
692 |
|
|
|
692 |
|
633 |
|
|
|
633 |
|
||||||
Safety, Security and Protection Services |
|
611 |
|
29 |
|
640 |
|
549 |
|
10 |
|
559 |
|
||||||
Electro and Communications |
|
492 |
|
41 |
|
533 |
|
410 |
|
54 |
|
464 |
|
||||||
Corporate and Unallocated |
|
(144 |
) |
82 |
|
(62 |
) |
(124 |
) |
40 |
|
(84 |
) |
||||||
Total Operating Income |
|
$ |
6,193 |
|
$ |
(681 |
) |
$ |
5,512 |
|
$ |
5,696 |
|
$ |
(523 |
) |
$ |
5,173 |
|