EXHIBIT 99

 

As more fully described below, this Current Report on Form 8-K includes supplemental unaudited reclassified business segment net sales and operating income information (provided on an annual and quarterly basis for the years ended December 31, 2009, 2008 and 2007). This supplemental unaudited information is being provided to show reclassified historical results due to product moves between business segments. The Company did not operate under the realigned business segment 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 ended March 31, 2010.

 

Effective in the first quarter of 2010, 3M made certain product moves between its business segments in its continuing effort to drive growth by aligning businesses around markets and customers. There were no changes to business segments related to product moves for the Health Care segment, Consumer and Office segment, Display and Graphics segment, or Electro and Communications segment. In addition, 3M results in total did not change. The product moves between business segments are summarized as follows:

 

·                       Certain acoustic systems products in the Occupational Health and Environmental Safety Division (part of the Safety, Security and Protection Services business segment) were transferred to the Automotive Division within the Industrial and Transportation business segment. In addition, thermal acoustics systems products which were included in the Occupational Health and Environmental Safety Division as a result of 3M’s April 2008 acquisition of Aearo Holding Corp. were transferred to the Aerospace and Aircraft Maintenance Department within the Industrial and Transportation business segment. These product moves establish an acoustic center of excellence within the Industrial and Transportation business segment. The preceding product moves resulted in an increase in net sales for total year 2009 of $116 million for Industrial and Transportation, which was offset by a corresponding decrease in net sales for Safety, Security and Protection Services.

 

The financial information presented herein reflects the impact of the preceding business segment structure changes for all products presented. The impact of the preceding changes on previously reported 2009 business segment net sales and operating income is summarized as follows:

 

 

 

NET SALES

 

OPERATING INCOME

 

Year ended Dec. 31, 2009

 

Previously

 

 

 

 

 

Previously

 

 

 

 

 

(Millions)

 

Reported

 

Revised

 

Change

 

Reported

 

Revised

 

Change

 

Industrial and Transportation

 

$

7,116

 

$

7,232

 

$

116

 

$

1,238

 

$

1,259

 

$

21

 

Safety, Security and Protection Services

 

3,180

 

3,064

 

(116

)

745

 

724

 

(21

)

 

3M’s businesses are organized, managed and internally grouped into segments based on differences in products, technologies and services. Effective in the first quarter of 2010, 3M continues to manage its operations in six operating business segments: Industrial and Transportation segment; Health Care segment; Consumer and Office segment; Display and Graphics segment; Safety, Security and Protection Services segment; and the Electro and Communications segment. 3M’s 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 financial information shown.

 

 


 

Supplemental Unaudited Business Segment Information

Based on Segment Structure Effective in the First Quarter of 2010

Net Sales

 

NET SALES

 

First

 

Second

 

Third

 

Fourth

 

Total

 

(Millions)

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Year

 

Industrial and Transportation

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

1,603

 

$

1,751

 

$

1,934

 

$

1,944

 

$

7,232

 

2008

 

2,196

 

2,218

 

2,114

 

1,766

 

8,294

 

2007

 

1,895

 

1,915

 

1,916

 

1,966

 

7,692

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

997

 

$

1,065

 

$

1,083

 

$

1,149

 

$

4,294

 

2008

 

1,080

 

1,120

 

1,066

 

1,037

 

4,303

 

2007

 

965

 

991

 

964

 

1,060

 

3,980

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer and Office

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

795

 

$

866

 

$

923

 

$

887

 

$

3,471

 

2008

 

855

 

939

 

988

 

796

 

3,578

 

2007

 

835

 

855

 

924

 

880

 

3,494

 

 

 

 

 

 

 

 

 

 

 

 

 

Display and Graphics

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

611

 

$

808

 

$

896

 

$

817

 

$

3,132

 

2008

 

875

 

849

 

857

 

687

 

3,268

 

2007

 

929

 

1,009

 

1,020

 

958

 

3,916

 

 

 

 

 

 

 

 

 

 

 

 

 

Safety, Security and Protection Services

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

672

 

$

769

 

$

831

 

$

792

 

$

3,064

 

2008

 

807

 

939

 

885

 

699

 

3,330

 

2007

 

711

 

751

 

720

 

709

 

2,891

 

 

 

 

 

 

 

 

 

 

 

 

 

Electro and Communications

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

480

 

$

551

 

$

617

 

$

628

 

$

2,276

 

2008

 

735

 

760

 

740

 

600

 

2,835

 

2007

 

674

 

704

 

721

 

706

 

2,805

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Unallocated

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

4

 

$

4

 

$

4

 

$

—

 

$

12

 

2008

 

6

 

9

 

6

 

1

 

22

 

2007

 

28

 

21

 

19

 

11

 

79

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Dual Credit

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

(73

)

$

(95

)

$

(95

)

$

(95

)

$

(358

)

2008

 

(91

)

(95

)

(98

)

(77

)

(361

)

2007

 

(100

)

(104

)

(107

)

(84

)

(395

)

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

5,089

 

$

5,719

 

$

6,193

 

$

6,122

 

$

23,123

 

2008

 

6,463

 

6,739

 

6,558

 

5,509

 

25,269

 

2007

 

5,937

 

6,142

 

6,177

 

6,206

 

24,462

 

 

 


 

Supplemental Unaudited Business Segment Information

Based on Segment Structure Effective in the First Quarter of 2010

Operating Income

 

Refer to Note 2 and Note 4 to the Consolidated Financial Statements in 3M’s 2009 Annual Report on Form 10-K for disclosure of items that significantly impacted 2009, 2008 and 2007 business segment reported operating income. The most significant items impacting 2009, 2008 and 2007 operating income are restructuring and other actions and the gain or loss on sale of businesses, primarily the gain on sale of the global branded pharmaceuticals business in Europe (within the Health Care segment) in 2007. 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 and environmental expenses, corporate restructuring program charges and certain under- or over-absorbed costs (e.g. pension) that the Company may choose not to allocate directly to its business segments. 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

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

175

 

$

287

 

$

391

 

$

406

 

$

1,259

 

2008

 

495

 

434

 

421

 

218

 

1,568

 

2007

 

436

 

384

 

401

 

369

 

1,590

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

307

 

$

329

 

$

339

 

$

375

 

$

1,350

 

2008

 

322

 

310

 

294

 

249

 

1,175

 

2007

 

1,062

 

280

 

260

 

282

 

1,884

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer and Office

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

165

 

$

197

 

$

227

 

$

159

 

$

748

 

2008

 

170

 

187

 

223

 

103

 

683

 

2007

 

182

 

170

 

198

 

160

 

710

 

 

 

 

 

 

 

 

 

 

 

 

 

Display and Graphics

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

60

 

$

183

 

$

206

 

$

141

 

$

590

 

2008

 

188

 

185

 

162

 

48

 

583

 

2007

 

297

 

351

 

284

 

234

 

1,166

 

 

 

 

 

 

 

 

 

 

 

 

 

Safety, Security and Protection Services

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

124

 

$

181

 

$

227

 

$

192

 

$

724

 

2008

 

193

 

179

 

205

 

112

 

689

 

2007

 

170

 

129

 

146

 

128

 

573

 

 

 

 

 

 

 

 

 

 

 

 

 

Electro and Communications

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

21

 

$

67

 

$

116

 

$

118

 

$

322

 

2008

 

149

 

153

 

158

 

80

 

540

 

2007

 

112

 

137

 

122

 

130

 

501

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Unallocated

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

(33

)

$

(32

)

$

(7

)

$

(28

)

$

(100

)

2008

 

4

 

22

 

71

 

(38

)

59

 

2007

 

(136

)

(31

)

37

 

(14

)

(144

)

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Dual Credit

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

(16

)

$

(21

)

$

(21

)

$

(21

)

$

(79

)

2008

 

(20

)

(21

)

(21

)

(17

)

(79

)

2007

 

(22

)

(23

)

(23

)

(19

)

(87

)

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

 

 

2009

 

$

803

 

$

1,191

 

$

1,478

 

$

1,342

 

$

4,814

 

2008

 

1,501

 

1,449

 

1,513

 

755

 

5,218

 

2007

 

2,101

 

1,397

 

1,425

 

1,270

 

6,193

 

 

 


 

Supplemental Unaudited Business Segment Information

Based on Segment Structure Effective in the First Quarter of 2010

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 Company’s ongoing operations. The Company uses these non-GAAP measures to evaluate and manage the Company’s 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 3M’s 2009 Annual Report on Form 10-K, 2009 results included net losses for special items that reduced operating income by $194 million. 2009 included restructuring actions ($209 million), which were partially offset by a gain on sale of real estate ($15 million). These net losses were recorded in the first quarter of 2009 ($67 million), second quarter of 2009 ($101 million) and third quarter of 2009 ($26 million).

 

As also discussed in 3M’s 2009 Annual Report on Form 10-K, 2008 results included net losses for special items that reduced operating income by $269 million. 2008 included restructuring actions ($229 million), exit activities ($58 million) and losses related to the sale of businesses ($23 million), which were partially offset by a gain on sale of real estate ($41 million). These net losses were recorded in the second quarter of 2008 ($42 million), third quarter of 2008 ($8 million) and fourth quarter of 2008 ($219 million).

 

As also discussed in 3M’s 2009 Annual Report on Form 10-K, 2007 results included net gains for special items that increased 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 exit activities ($45 million). Net gains of $653 million were recorded for the 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.

 

The reconciliation provided below, which has been revised from what was previously reported to reflect the segment realignment effective in the first quarter of 2010, 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, 2009, 2008 and 2007. The business segment changes occurred between the Industrial and Transportation segment and the Safety, Security and Protection Services segment.  There were no changes in total worldwide consolidated operating income compared to what was previously reported.

 

 

 

Twelve-months ended
Dec. 31, 2009

 

OPERATING INCOME BY

 

Revised

 

 

 

Adjusted

 

BUSINESS SEGMENT

 

Operating

 

Special

 

Non-GAAP

 

(Millions)

 

Income

 

items

 

Oper. Income

 

Industrial and Transportation

 

$

1,259

 

$

89

 

$

1,348

 

Health Care

 

1,350

 

20

 

1,370

 

Consumer and Office

 

748

 

13

 

761

 

Display and Graphics

 

590

 

22

 

612

 

Safety, Security and Protection Services

 

724

 

1

 

725

 

Electro and Communications

 

322

 

11

 

333

 

Corporate and Unallocated

 

(100)

 

38

 

(62

)

Elimination of Dual Credit

 

(79)

 

—

 

(79

)

Total Operating Income

 

$

4,814

 

$

194

 

$

5,008

 

 

 

 

Twelve-months ended
Dec. 31, 2008

 

Twelve-months ended
Dec. 31, 2007

 

OPERATING INCOME BY

 

Revised

 

 

 

Adjusted

 

Revised

 

 

 

Adjusted

 

BUSINESS SEGMENT

 

Operating

 

Special

 

Non-GAAP

 

Operating

 

Special

 

Non-GAAP

 

(Millions)

 

Income

 

items

 

Oper. Income

 

Income

 

Items

 

Oper. Income

 

Industrial and Transportation

 

$

1,568

 

$

66

 

$

1,634

 

$

1,590

 

$

9

 

$

1,599

 

Health Care

 

1,175

 

60

 

1,235

 

1,884

 

(791

)

1,093

 

Consumer and Office

 

683

 

18

 

701

 

710

 

—

 

710

 

Display and Graphics

 

583

 

42

 

625

 

1,166

 

(51

)

1,115

 

Safety, Security and Protection Services

 

689

 

38

 

727

 

573

 

29

 

602

 

Electro and Communications

 

540

 

7

 

547

 

501

 

41

 

542

 

Corporate and Unallocated

 

59

 

38

 

97

 

(144

)

 82

 

(62

)

Elimination of Dual Credit

 

(79

)

—

 

(79

)

(87

)

—

 

(87

)

Total Operating Income

 

$

5,218

 

$

269

 

$

5,487

 

$

6,193

 

$

(681

)

$

5,512