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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2010 |
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2009 |
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2008 |
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2007 |
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2006 |
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2005 |
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EARNINGS |
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Income before income taxes* |
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$ |
4,493 |
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$ |
4,632 |
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$ |
5,108 |
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$ |
6,115 |
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$ |
5,625 |
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$ |
4,817 |
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Add: |
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Interest expense (including amortization of capitalized interest) |
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165 |
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236 |
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231 |
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229 |
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139 |
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112 |
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Interest component of the ESOP benefit expense |
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— |
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1 |
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3 |
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5 |
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8 |
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10 |
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Portion of rent under operating leases representative of the interest component |
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58 |
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76 |
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77 |
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70 |
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70 |
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64 |
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Less: |
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Equity in undistributed income of 20-50% owned companies |
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7 |
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4 |
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6 |
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5 |
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6 |
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4 |
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TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES |
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$ |
4,709 |
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$ |
4,941 |
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$ |
5,413 |
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$ |
6,414 |
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$ |
5,836 |
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$ |
4,999 |
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FIXED CHARGES |
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Interest on debt (including capitalized interest) |
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164 |
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246 |
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243 |
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235 |
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138 |
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105 |
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Interest component of the ESOP benefit expense |
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— |
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1 |
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3 |
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5 |
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8 |
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10 |
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Portion of rent under operating leases representative of the interest component |
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58 |
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76 |
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77 |
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70 |
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70 |
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64 |
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TOTAL FIXED CHARGES |
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$ |
222 |
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$ |
323 |
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$ |
323 |
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$ |
310 |
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$ |
216 |
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$ |
179 |
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RATIO OF EARNINGS TO FIXED CHARGES |
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21.2 |
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15.3 |
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16.8 |
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20.7 |
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27.0 |
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27.9 |
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*2009 results included net pre-tax charges of $194 million related to restructuring actions partially offset by a gain on sale of real estate. 2008 results included net pre-tax charges of $269 million, with charges related to restructuring actions, exit activities and a loss on sale of businesses 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.