EXHIBIT 12
3M COMPANY AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions)
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Nine months |
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Ended |
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Sept. 30, |
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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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2008 |
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2007 |
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2006 |
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2005 |
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2004 |
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2003 |
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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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$ |
4,381 |
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$ |
6,115 |
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$ |
5,625 |
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$ |
4,828 |
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$ |
4,303 |
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$ |
3,448 |
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Add: |
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Interest expense |
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170 |
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229 |
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139 |
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101 |
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88 |
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103 |
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Interest component of the ESOP benefit expense |
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2 |
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5 |
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8 |
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10 |
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12 |
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14 |
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Portion of rent under operating leases representative of the interest component |
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59 |
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70 |
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70 |
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64 |
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60 |
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53 |
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Less: |
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Equity in undistributed income of 20-50% owned companies |
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5 |
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5 |
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6 |
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4 |
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6 |
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7 |
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TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES |
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$ |
4,607 |
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$ |
6,414 |
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$ |
5,836 |
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$ |
4,999 |
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$ |
4,457 |
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$ |
3,611 |
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FIXED CHARGES |
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Interest on debt |
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179 |
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235 |
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138 |
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94 |
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78 |
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93 |
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Interest component of the ESOP benefit expense |
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2 |
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5 |
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8 |
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10 |
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12 |
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14 |
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Portion of rent under operating leases representative of the interest component |
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59 |
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70 |
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70 |
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64 |
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60 |
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53 |
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TOTAL FIXED CHARGES |
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$ |
240 |
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$ |
310 |
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$ |
216 |
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$ |
168 |
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$ |
150 |
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$ |
160 |
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RATIO OF EARNINGS TO FIXED CHARGES |
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19.2 |
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20.7 |
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27.0 |
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29.8 |
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29.7 |
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22.6 |
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* First nine months 2008 results included net pre-tax losses of $50 million related to charges for exit activities and the sale of HighJump Software, which were partially offset by a gain on sale of real estate. 2007 results included pre-tax gains of $681 million, with net benefits from gains related to the sale of businesses and a gain on sale of real estate, which were partially offset by increases in environmental liabilities, restructuring actions, and exit activities. 2006 results included 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.