Exhibit 99

 

FOR IMMEDIATE RELEASE

 

3M Second-Quarter Sales Increase 18 Percent; Per-Share Earnings Rise 38 Percent

 

— Company Again Raises 2010 Sales and Earnings Expectations —

 

ST. PAUL, Minn. — July 22, 2010 - 3M (NYSE: MMM) today reported record second-quarter earnings of $1.54 per share on sales of $6.7 billion. Sales and per-share earnings increased 17.7 percent and 37.5 percent, respectively, versus the second quarter of 2009. Excluding special items (b-c) recorded in the second quarter of 2009, earnings per share rose 28.3 percent.

 

Sales improved in all businesses and geographic regions, with particular strength in Electro and Communications at 32 percent, Display and Graphics at 30 percent and Industrial and Transportation at 23 percent. On a geographic basis, sales growth was strongest in emerging economies, where sales expanded by 38 percent versus the second quarter of 2009. Total-company sales rose 18 percent year-on-year and 6 percent sequentially, and have now returned to second quarter 2008 levels.

 

3M generated record second-quarter operating income of $1.596 billion and operating margins were 23.7 percent. All six of the company’s business segments posted operating margins of 22 percent or higher.

 

“Our growth strategy continues to gain momentum as we again delivered strong top-line growth and outstanding leverage to the bottom line,” said George W. Buckley, 3M chairman, president and chief executive officer. “I thank the 3M team around the world for continuing to deliver during these uncertain times.”

 

Buckley added that the second-quarter results reaffirm the company’s long-term strategy of accelerating investment in higher growth opportunities.

 

“Our new product vitality index is the highest in recent memory and we are taking share in many of our businesses,” he said. “3M’s improved engine of organic growth, combined with our commitment to operational excellence positions us well to deliver sustainable increases in sales, earnings and free cash flow.”

 

For the third consecutive quarter, 3M increased its full-year 2010 performance expectations. The company now expects organic sales volumes to grow 13 to 15 percent versus a prior expected range of 10 to 12 percent. Operating income margins, previously anticipated to exceed 22 percent, are now expected to exceed 22.5 percent for the year. Finally, the company expects that per-share earnings will be in the range of $5.65 to $5.80, excluding the Medicare Part D-related charge recorded in the first quarter of this year, versus a prior expected range of $5.40 to $5.60.

 

Key Financial Highlights

Second-quarter worldwide sales totaled $6.7 billion, up 17.7 percent compared to the second quarter of 2009. Local-currency sales including acquisitions increased 17.9 percent. Divestitures and foreign exchange impacts each reduced sales by 0.1 percent.

 

 



 

Sales growth was broad-based, with year-on-year increases of 32 percent in Electro and Communications, 30 percent in Display and Graphics, 23 percent in Industrial and Transportation, 10 percent in both Consumer and Office and in Safety, Security and Protection Services and 5 percent in Health Care. On a geographic basis, sales rose 42 percent in Asia Pacific, 21 percent in Latin America and Canada and 9 percent in the United States. Sales rose over 4 percent in Europe in the quarter, as organic volume growth of nearly 11 percent was partially offset by 6-plus points of negative currency impact, primarily due to the weaker Euro.

 

Second-quarter net income was $1.121 billion, or $1.54 per share, versus $783 million, or $1.12 per share, in the second quarter of 2009. Total-company operating income was $1.596 billion, a record for any second quarter in 3M’s history, and margins were 23.7 percent. All six of 3M’s business segments posted operating margins of 22 percent or higher.

 

Business Segment Highlights

(All figures are on GAAP basis and include the impact of special items (a-c))

 

Industrial and Transportation

·                  Sales of $2.2 billion, up 23.2 percent in local currency.

·                  Broad-based double-digit local-currency growth across much of the portfolio; renewable energy up 71 percent, automotive OEM up 45 percent, abrasives up 28 percent and industrial adhesives and tapes up 22 percent.

·                  All businesses delivered year-on-year profit growth.

·                  Double-digit sales and profit growth across all major geographic regions, led by Asia Pacific.

·                  Operating income up 66 percent to $476 million with operating margin of 22 percent.

 

Health Care

·                  Sales of $1.1 billion, up 5.7 percent in local currency.

·                  Double-digit local-currency sales growth in drug delivery systems.

·                  Solid local-currency growth in skin and wound care, health information systems and oral care businesses; sales in infection prevention business up slightly in local currency.

·                  Positive local-currency growth across all major geographic regions led by Latin America and Canada.

·                  Operating income of $344 million, up 5 percent; operating margin of 30.9 percent.

 

Display and Graphics

·                  Sales of $1.0 billion, up 29.2 percent in local currency.

·                  Optical systems sales up 64 percent in local currency; new 3M film solutions for LED-back-lit televisions continue to boost sales.

·                  Commercial graphics and mobile interactive solutions posted double-digit local-currency sales increases; sales down slightly in traffic safety systems business.

·                  Strong double-digit sales growth in both Asia Pacific and Latin America.

·                  Operating profits up 69 percent to $308 million, and margins were 29.5 percent.

 

Consumer and Office

·                  Sales of $1.0 billion, up 9.7 percent in local currency, including 4.5 percent from acquisitions, primarily ACE™ and A-One.

·                  Accelerated investments in advertising and promotion drove strong, broad-based sales growth.

 

 



 

·                  Double-digit sales increases in consumer health care, do-it-yourself, office supplies and home care businesses.

·                  Positive local-currency sales growth in all geographic regions, with double-digit increases in Asia Pacific and Latin America.

·                  Operating income of $211 million, up 7 percent year-on-year.

 

Safety, Security and Protection Services

·                  Sales of $842 million, up 10.3 percent in local currency.

·                  Double-digit sales increases in security systems, roofing granules and building and commercial services; high single-digit growth in the personal protective equipment business.

·                  Broad-based geographic growth with double-digit sales gains in Canada, Asia Pacific, Latin America and the United States.

·                  Operating margin of 23.4 percent, with profits up 9 percent year-on-year.

 

Electro and Communications

·                  Sales of $726 million, up 31.6 percent in local currency.

·                  Consumer electronics continues to drive growth; 3M businesses that serve this market posted sales increases of 50 percent-plus year-on-year and 10 percent sequentially.

·                  Double-digit sales increase in electrical markets; telecom infrastructure business declined slightly year-on-year but rose 9 percent sequentially.

·                  Profits increased 148 percent as all businesses delivered year-on-year improvement; operating margins of 22.8 percent, up 10.7 percentage points.

 

George W. Buckley and Patrick D. Campbell, senior vice president and chief financial officer, will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central Time) today. Investors can access a Webcast of this conference, along with related charts and materials, at http://investor.3M.com.

 

Forward-Looking Statements

This news release contains forward-looking information about 3M’s financial results and estimates and business prospects that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” “target,” “forecast” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic and capital markets conditions; (2) the Company’s credit ratings and its cost of capital; (3) competitive conditions and customer preferences; (4) foreign currency exchange rates and fluctuations in those rates; (5) the timing and acceptance of new product offerings; (6) the availability and cost of purchased components, compounds, raw materials and energy (including oil and natural gas and their derivatives) due to shortages, increased demand or supply interruptions (including those caused by natural and other disasters and other events); (7) the impact of acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (8) generating fewer productivity improvements than estimated; and (9) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the company’s Annual Report on Form 10-K for the year ended December 31, 2009 and its subsequent Quarterly Reports on Form 10-Q (the “Reports”). Changes in such assumptions or factors could produce significantly different results. A further description of

 

 



 

these factors is located in the Reports under “Risk Factors” in Part I, Item 1A (Annual Report) and in Part II, Item 1A (Quarterly Report). The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

 

About 3M

A recognized leader in research and development, 3M produces thousands of innovative products for dozens of diverse markets. 3M’s core strength is applying its more than 40 distinct technology platforms — often in combination — to a wide array of customer needs. With $23 billion in sales, 3M employs 75,000 people worldwide and has operations in more than 65 countries.

 

 


 


 

3M Company and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME

(Millions, except per-share amounts)

(Unaudited)

 

 

 

Three-months ended

 

Six-months ended

 

 

 

June 30,

 

June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

6,731

 

$

5,719

 

$

13,079

 

$

10,808

 

Operating expenses

 

 

 

 

 

 

 

 

 

Cost of sales

 

3,435

 

2,977

 

6,673

 

5,749

 

Selling, general and administrative expenses

 

1,350

 

1,242

 

2,673

 

2,433

 

Research, development and related expenses

 

350

 

309

 

692

 

632

 

Total operating expenses

 

5,135

 

4,528

 

10,038

 

8,814

 

Operating income

 

1,596

 

1,191

 

3,041

 

1,994

 

Interest expense and income

 

 

 

 

 

 

 

 

 

Interest expense

 

52

 

55

 

100

 

110

 

Interest income

 

(10

)

(7

)

(16

)

(18

)

Total interest expense (income)

 

42

 

48

 

84

 

92

 

Income before income taxes

 

1,554

 

1,143

 

2,957

 

1,902

 

Provision for income taxes

 

414

 

351

 

862

 

580

 

Net income including noncontrolling interest

 

$

1,140

 

$

792

 

$

2,095

 

$

1,322

 

Less: Net income attributable to noncontrolling interest

 

19

 

9

 

44

 

21

 

Net income attributable to 3M

 

$

1,121

 

$

783

 

$

2,051

 

$

1,301

 

Weighted average 3M common shares outstanding — basic

 

714.5

 

696.8

 

713.1

 

695.2

 

Earnings per share attributable to 3M common shareholders — basic

 

$

1.57

 

$

1.12

 

$

2.88

 

$

1.87

 

 

 

 

 

 

 

 

 

 

 

Weighted average 3M common shares outstanding — diluted

 

725.7

 

700.3

 

724.6

 

698.1

 

Earnings per share attributable to 3M common shareholders — diluted

 

$

1.54

 

$

1.12

 

$

2.83

 

$

1.86

 

Cash dividends paid per 3M common share

 

$

0.525

 

$

0.51

 

$

1.05

 

$

1.02

 

 

 



 

3M Company and Subsidiaries

SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Millions, except per-share amounts)

(Unaudited)

 

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, net income attributable to 3M (hereafter referred to as “net income”), and diluted earnings per share attributable to 3M common shareholders (hereafter referred to as “diluted earnings per share”) are all measures for which 3M provides the reported GAAP measure and an adjusted measure (excluding special items). 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.

 

The reconciliation provided below reconciles the non-GAAP financial measures with the most directly comparable GAAP financial measures for the three-months and six-months ended June 30, 2010.

 

 

 

Three-months ended

 

Six-months ended

 

 

 

June 30, 2010

 

June 30, 2010

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

Diluted

 

 

 

Operating

 

Net

 

earnings

 

Operating

 

Net

 

earnings

 

 

 

income

 

income

 

per share

 

income

 

income

 

per share

 

Reported GAAP measure

 

$

1,596

 

$

1,121

 

$

1.54

 

$

3,041

 

$

2,051

 

$

2.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Medicare tax change (a)

 

 

 

 

 

84

 

0.12

 

Adjusted Non-GAAP measure

 

$

1,596

 

$

1,121

 

$

1.54

 

$

3,041

 

$

2,135

 

$

2.95

 


(a)         The first six-months of 2010 includes a one-time, non-cash income tax charge of $84 million, or 12 cents per diluted share, resulting from the March 2010 enactment of the Patient Protection and Affordable Care Act, including modifications made in the Health Care and Education Reconciliation Act of 2010 (collectively, the “Act”).  The charge is due to a reduction in the value of the Company’s deferred tax asset as a result of the Act’s change to the tax treatment of Medicare Part D reimbursements.

 

 



 

The reconciliation provided below reconciles the non-GAAP financial measures with the most directly comparable GAAP financial measures for the three-months and six-months ended June 30, 2009.

 

 

 

Three-months ended

 

Six-months ended

 

 

 

June 30, 2009

 

June 30, 2009

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

Diluted

 

 

 

Operating

 

Net

 

earnings

 

Operating

 

Net

 

earnings

 

 

 

income

 

income

 

per share

 

income

 

income

 

per share

 

Reported GAAP measure

 

$

1,191

 

$

783

 

$

1.12

 

$

1,994

 

$

1,301

 

$

1.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring actions (b)

 

116

 

69

 

0.09

 

183

 

114

 

0.16

 

Gain on sale of real estate (c)

 

(15

)

(9

)

(0.01

)

(15

)

(9

)

(0.01

)

Adjusted Non-GAAP measure

 

$

1,292

 

$

843

 

$

1.20

 

$

2,162

 

$

1,406

 

$

2.01

 


(b)         During the first and second quarters of 2009, management approved and committed to undertake certain restructuring actions, which resulted in a pre-tax charge for the three-months and six-months ended June 30, 2009 of $116 million and $183 million, respectively. This charge related to employee-related liabilities for severance/benefits and other of approximately $103 million and fixed asset impairments of approximately $13 million for the three-months ended June 30, 2009. Employee-related liabilities for severance/benefits and other of approximately $164 million and fixed asset impairments of approximately $19 million were recorded for the six-months ended June 30, 2009. All business segments were impacted by these actions. These charges were recorded in cost of sales; selling, general and administrative expenses; and research, development and related expenses, with these expenses totaling $68 million, $44 million and $4 million, respectively, for the three-months ended June 30, 2009, and totaling $85 million, $91 million and $7 million, respectively, for the six-months ended June 30, 2009.

 

(c)          In June 2009, 3M completed the sale of a New Jersey roofing granule facility and recorded a pre-tax gain of $15 million. This gain was recorded in cost of sales within the Safety, Security and Protection Services business segment.

 

 



 

The reconciliation provided below reconciles the non-GAAP operating income measure by business segment with the most directly comparable GAAP financial measure for the three-months and six-months ended June 30, 2009.  There were no special items that impacted operating income for the three-months ended and six-months ended June 30, 2010.  As discussed in more detail later in the section entitled “Business Segments,” 3M made certain product moves between its business segments in the first quarter of 2010. Segment information for all periods presented has been reclassified to reflect these changes.

 

 

 

Three-months ended

 

Six-months ended

 

 

 

June 30, 2009

 

June 30, 2009

 

OPERATING

 

Reported

 

 

 

Adjusted

 

Reported

 

 

 

Adjusted

 

INCOME BY

 

GAAP

 

Special

 

Non-GAAP

 

GAAP

 

Special

 

Non-GAAP

 

BUSINESS SEGMENT

 

measure

 

items

 

measure

 

measure

 

items

 

measure

 

Industrial and Transportation

 

$

287

 

$

45

 

$

332

 

$

462

 

$

68

 

$

530

 

Health Care

 

329

 

15

 

344

 

636

 

19

 

655

 

Consumer and Office

 

197

 

11

 

208

 

362

 

13

 

375

 

Display and Graphics

 

183

 

18

 

201

 

243

 

24

 

267

 

Safety, Security and Protection Services

 

181

 

(3

)

178

 

305

 

1

 

306

 

Electro and Communications

 

67

 

7

 

74

 

88

 

10

 

98

 

Corporate and Unallocated

 

(32

)

8

 

(24

)

(65

)

33

 

(32

)

Elimination of Dual Credit

 

(21

)

 

(21

)

(37

)

 

(37

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Income

 

$

1,191

 

$

101

 

$

1,292

 

$

1,994

 

$

168

 

$

2,162

 

 

 



 

3M Company and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET

(Dollars in millions)

(Unaudited)

 

 

 

Jun. 30,

 

Dec. 31,

 

Jun. 30,

 

 

 

2010

 

2009

 

2009

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,022

 

$

3,040

 

$

2,596

 

Marketable securities — current

 

1,909

 

744

 

378

 

Accounts receivable — net

 

3,745

 

3,250

 

3,456

 

Inventories

 

2,980

 

2,639

 

2,601

 

Other current assets

 

1,235

 

1,122

 

867

 

Total current assets

 

12,891

 

10,795

 

9,898

 

Marketable securities — non-current

 

606

 

825

 

307

 

Investments

 

111

 

103

 

106

 

Property, plant and equipment — net

 

6,715

 

7,000

 

6,899

 

Prepaid pension benefits

 

99

 

78

 

39

 

Goodwill, intangible assets and other assets

 

8,074

 

8,449

 

8,846

 

Total assets

 

$

28,496

 

$

27,250

 

$

26,095

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Short-term borrowings and current portion of long-term debt

 

$

728

 

$

613

 

$

908

 

Accounts payable

 

1,756

 

1,453

 

1,243

 

Accrued payroll

 

616

 

680

 

615

 

Accrued income taxes

 

386

 

252

 

501

 

Other current liabilities

 

1,951

 

1,899

 

2,051

 

Total current liabilities

 

5,437

 

4,897

 

5,318

 

Long-term debt

 

4,949

 

5,097

 

5,172

 

Pension and postretirement benefits

 

2,137

 

2,227

 

2,763

 

Other liabilities

 

1,710

 

1,727

 

1,621

 

Total liabilities

 

$

14,233

 

$

13,948

 

$

14,874

 

 

 

 

 

 

 

 

 

Total equity

 

$

14,263

 

$

13,302

 

$

11,221

 

Shares outstanding

 

 

 

 

 

 

 

June 30, 2010: 713,134,328 shares

 

 

 

 

 

 

 

December 31, 2009: 710,599,119 shares

 

 

 

 

 

 

 

June 30, 2009: 698,320,662 shares

 

 

 

 

 

 

 

Total liabilities and equity

 

$

28,496

 

$

27,250

 

$

26,095

 

 

 


 


 

3M Company and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in millions)

(Unaudited)

 

 

 

Six-months ended

 

 

 

June 30,

 

 

 

2010

 

2009

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

$

2,220

 

$

2,161

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(337

)

(454

)

Acquisitions, net of cash acquired

 

(30

)

(12

)

Purchases and proceeds from sale or maturities of marketable securities and investments - net

 

(1,012

)

40

 

Other investing activities

 

(59

)

51

 

 

 

 

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

(1,438

)

(375

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Change in debt

 

(68

)

(640

)

Purchases of treasury stock

 

(393

)

(6

)

Reissuances of treasury stock

 

386

 

225

 

Dividends paid to shareholders

 

(749

)

(709

)

Other financing activities

 

126

 

3

 

 

 

 

 

 

 

NET CASH USED IN FINANCING ACTIVITIES

 

(698

)

(1,127

)

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(102

)

88

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(18

)

747

 

Cash and cash equivalents at beginning of year

 

3,040

 

1,849

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

3,022

 

$

2,596

 

 

 



 

3M Company and Subsidiaries

SUPPLEMENTAL CASH FLOW AND

OTHER SUPPLEMENTAL FINANCIAL INFORMATION

(Dollars in millions)

(Unaudited)

 

 

 

Six-months ended

 

 

 

June 30,

 

 

 

2010

 

2009

 

NON-GAAP MEASURES

 

 

 

 

 

 

 

 

 

 

 

Free Cash Flow:

 

 

 

 

 

Net cash provided by operating activities

 

$

2,220

 

$

2,161

 

Purchases of property, plant and equipment

 

(337

)

(454

)

 

 

 

 

 

 

Free Cash Flow (d)

 

$

1,883

 

$

1,707

 


(d)         Free cash flow is not defined under U.S. generally accepted accounting principles (GAAP). Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is a useful measure of performance and uses this measure as an indication of the strength of the company and its ability to generate cash.

 

 

 

June 30,

 

 

 

2010

 

2009

 

OTHER NON-GAAP MEASURES:

 

 

 

 

 

Net Working Capital Turns (e)

 

5.4

 

4.8

 


(e)          The company uses various working capital measures that place emphasis and focus on certain working capital assets and liabilities. 3M’s net working capital index is defined as quarterly net sales multiplied by four, divided by ending net accounts receivable plus inventory less accounts payable. This measure is not recognized under U.S. generally accepted accounting principles and may not be comparable to similarly titled measures used by other companies.

 

 

 



 

3M Company and Subsidiaries

SALES CHANGE ANALYSIS

(Unaudited)

 

Sales Change Analysis

By Geographic Area

 

 

 

Three-Months Ended June 30, 2010

 

 

 

United
States

 

Asia-
Pacific

 

Europe,
Middle East and Africa

 

Latin
America/
Canada

 

World-
Wide

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume — organic

 

8.6

%

38.3

%

10.9

%

17.4

%

17.8

%

Price

 

 

(2.2

)

 

(0.3

)

(0.6

)

Organic local-currency sales

 

8.6

 

36.1

 

10.9

 

17.1

 

17.2

 

Acquisitions

 

0.8

 

1.1

 

 

0.8

 

0.7

 

Local-currency sales

 

9.4

 

37.2

 

10.9

 

17.9

 

17.9

 

Divestitures

 

 

 

(0.4

)

 

(0.1

)

Translation

 

 

4.6

 

(6.3

)

3.3

 

(0.1

)

Total sales change

 

9.4

%

41.8

%

4.2

%

21.2

%

17.7

%

 

Worldwide
Sales Change Analysis
By Business Segment

 

 

 

Three-Months Ended June 30, 2010

 

 

 

Organic
local-
currency
sales

 

Acqui-
sitions

 

Local-
currency
sales

 

Divest-
itures

 

Trans-
lation

 

Total
sales
change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial and Transportation

 

23.2

%

%

23.2

%

%

0.1

%

23.3

%

Health Care

 

5.7

%

%

5.7

%

(0.2

)%

(1.0

)%

4.5

%

Consumer and Office

 

5.2

%

4.5

%

9.7

%

%

0.4

%

10.1

%

Display and Graphics

 

29.2

%

%

29.2

%

%

0.3

%

29.5

%

Safety, Security and Protection Services

 

10.3

%

%

10.3

%

%

(0.8

)%

9.5

%

Electro and Communications

 

31.6

%

%

31.6

%

(0.9

)%

1.1

%

31.8

%

 

 



 

3M Company and Subsidiaries

SALES CHANGE ANALYSIS

(Unaudited)

 

Sales Change Analysis

By Geographic Area

 

 

 

Six-Months Ended June 30, 2010

 

 

 

United
States

 

Asia-
Pacific

 

Europe,
Middle East
 and Africa

 

Latin
America/
Canada

 

World-
Wide

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume — organic

 

9.7

%

42.3

%

10.0

%

14.5

%

18.4

%

Price

 

 

(1.6

)

 

1.4

 

(0.2

)

Organic local-currency sales

 

9.7

 

40.7

 

10.0

 

15.9

 

18.2

 

Acquisitions

 

0.8

 

0.6

 

 

0.9

 

0.6

 

Local-currency sales

 

10.5

 

41.3

 

10.0

 

16.8

 

18.8

 

Divestitures

 

 

 

(0.4

)

 

(0.1

)

Translation

 

 

6.2

 

0.2

 

6.6

 

2.3

 

Total sales change

 

10.5

%

47.5

%

9.8

%

23.4

%

21.0

%

 

Worldwide
Sales Change Analysis
By Business Segment

 

 

 

Six-Months Ended June 30, 2010

 

 

 

Organic
local-
currency
sales

 

Acqui-
sitions

 

Local-
currency
sales

 

Divest-
itures

 

Trans-
lation

 

Total
sales
change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial and Transportation

 

23.5

%

%

23.5

%

%

2.7

%

26.2

%

Health Care

 

6.6

%

%

6.6

%

(0.2

)%

1.7

%

8.1

%

Consumer and Office

 

6.6

%

3.6

%

10.2

%

%

2.1

%

12.3

%

Display and Graphics

 

33.2

%

%

33.2

%

%

1.9

%

35.1

%

Safety, Security and Protection Services

 

12.4

%

%

12.4

%

%

2.2

%

14.6

%

Electro and Communications

 

32.9

%

%

32.9

%

(1.0

)%

3.1

%

35.0

%

 

 



 

3M Company and Subsidiaries

BUSINESS SEGMENTS

(Dollars in millions)

(Unaudited)

 

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 impacting 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 financial information presented herein reflects for all periods presented the impact of product moves between business segments, which 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 established 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.

 

BUSINESS SEGMENT INFORMATION

NET SALES

(Millions)

 

 

 

Three-months ended

 

Six-months ended

 

 

 

June 30,

 

June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

Industrial and Transportation

 

$

2,160

 

$

1,751

 

$

4,233

 

$

3,354

 

Health Care

 

1,113

 

1,065

 

2,230

 

2,062

 

Consumer and Office

 

954

 

866

 

1,866

 

1,661

 

Display and Graphics

 

1,047

 

808

 

1,916

 

1,419

 

Safety, Security and Protection Services

 

842

 

769

 

1,651

 

1,441

 

Electro and Communications

 

726

 

551

 

1,391

 

1,031

 

Corporate and Unallocated

 

2

 

4

 

7

 

8

 

Elimination of Dual Credit

 

(113

)

(95

)

(215

)

(168

)

 

 

 

 

 

 

 

 

 

 

Total Company

 

$

6,731

 

$

5,719

 

$

13,079

 

$

10,808

 

 

 



 

BUSINESS SEGMENT INFORMATION

OPERATING INCOME

(Millions)

 

 

 

Three-months ended

 

Six-months ended

 

 

 

June 30,

 

June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

Industrial and Transportation

 

$

476

 

$

287

 

$

930

 

$

462

 

Health Care

 

344

 

329

 

691

 

636

 

Consumer and Office

 

211

 

197

 

430

 

362

 

Display and Graphics

 

308

 

183

 

520

 

243

 

Safety, Security and Protection Services

 

197

 

181

 

378

 

305

 

Electro and Communications

 

165

 

67

 

302

 

88

 

Corporate and Unallocated

 

(80

)

(32

)

(163

)

(65

)

Elimination of Dual Credit

 

(25

)

(21

)

(47

)

(37

)

 

 

 

 

 

 

 

 

 

 

Total Company

 

$

1,596

 

$

1,191

 

$

3,041

 

$

1,994

 

 

For the three-months and six-months ended June 30, 2009, refer to the preceding notes (b-c) and the preceding reconciliation of operating income by business segment for a discussion and summary of items that impacted reported business segment operating income.

 

 



 

Investor Contacts:

 

Matt Ginter

 

Media Contact:

 

Jacqueline Berry

 

 

3M

 

 

 

3M

 

 

(651) 733-8206

 

 

 

(651) 733-3611

 

 

 

 

 

 

 

 

 

Bruce Jermeland

 

 

 

 

 

 

3M

 

 

 

 

 

 

(651) 733-1807

 

 

 

 

 

From:

3M Public Relations and Corporate Communications

3M Center, Building 225-1S-15

St. Paul, MN 55144-1000