EXHIBIT 99

 

This Current Report on Form 8-K includes supplemental unaudited historical business segment net sales and operating income information that reflects the product line realignment that involved two it its business segments and the realignment of its dual credit reporting process (provided on an annual and quarterly basis for the years ended December 31, 2016, 2015 and 2014). The Company did not operate under this structure for any of these prior periods and will begin to report comparative results under the new structure with the filing of its Quarterly Report on Form 10-Q for the quarter ending March 31, 2017.

 

Effective in the first quarter of 2017, as part of 3M’s continuing effort to improve the alignment of its businesses around markets and customers the Company made the following changes:

1.

Integrated the former Renewable Energy Division into existing divisions;

2.

Combined two divisions to form the Automotive and Aerospace Solutions Division; and

3.

Consolidated U.S. customer account activity - impacting dual credit reporting

 

Integration of former Renewable Energy Division

·

The (a) solar and wind and (b) energy product lines (along with certain technology previously included in Corporate and Unallocated) of the former Renewable Energy Division (RED) were integrated into the existing Electrical Markets Division and Electronics Materials and Solutions Division, respectively, within the Electronics and Energy business segment. In addition, the former RED’s window film products were moved into the Commercial Solutions Division within the Safety and Graphics business segment. This change resulted in a decrease in previously reported net sales and operating income for total year 2016 of $203 million and $38 million, respectively, in the Electronics and Energy segment. These decreases were offset by a $207 million and $29 million increase in previously reported 2016 net sales and operating income, respectively, in the Safety and Graphics business segment and a $4 million decrease and $9 million increase in previously reported net sales and operating income, respectively, in Corporate and Unallocated.

 

Creation of Automotive and Aerospace Solutions Division

·

The former Automotive Division and Aerospace and Commercial Transportation Division (both within the Industrial business segment) were combined to create the Automotive and Aerospace Solutions Division. Because this realignment was within the Industrial business segment, it had no impact on business segment reporting.

 

Consolidation of U.S. customer account activity - impacting dual credit reporting

·

The Company consolidated its customer account activity in the U.S. into more centralized sales districts to better serve customers. As discussed further below, 3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. This dual credit is based on which business segment provides customer account activity (“sales district”) with respect to a particular product sold in the U.S. Previously, a customer in the U.S. may have been aligned to several sales districts associated with multiple divisions or segments based on the individual products the customer purchased across 3M’s portfolio. The alignment of U.S. customer accounts to fewer, more focused sales districts therefore changed the attribution of dual credit across 3M’s business segments. As a result, previously reported aggregate business segment net sales and operating income for total year 2016 increased $163 million and $36 million, respectively, offset by similar increases in the elimination of dual credit net sales and operating income amounts.

 

The financial information presented herein reflects the impact of the preceding changes between business segments for all periods presented.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

Operating Income

 

Year ended December 31, 2016

 

Previously

 

 

 

 

 

Previously

 

 

 

 

 

(Millions)

    

Reported

    

Revised

    

Change

    

Reported

    

Revised

    

Change

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

$

10,313

 

$

10,399

 

$

86

 

$

2,376

 

$

2,395

 

$

19

 

Safety and Graphics

 

 

5,660

 

 

5,881

 

 

221

 

 

1,390

 

 

1,423

 

 

33

 

Health Care

 

 

5,527

 

 

5,566

 

 

39

 

 

1,754

 

 

1,763

 

 

9

 

Electronics and Energy

 

 

4,826

 

 

4,643

 

 

(183)

 

 

1,075

 

 

1,041

 

 

(34)

 

Consumer

 

 

4,482

 

 

4,484

 

 

2

 

 

1,064

 

 

1,065

 

 

1

 

Corporate and Unallocated

 

 

9

 

 

7

 

 

(2)

 

 

(280)

 

 

(272)

 

 

8

 

Elimination of Dual Credit

 

 

(708)

 

 

(871)

 

 

(163)

 

 

(156)

 

 

(192)

 

 

(36)

 

Total Company

 

$

30,109

 

$

30,109

 

$

 —

 

$

7,223

 

$

7,223

 

$

 —

 

 

 


 

Corporate and unallocated operating income includes a variety of miscellaneous items, such as corporate investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension, stock-based compensation) 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.

 

3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. Management evaluates each of its five business segments based on net sales and operating income performance, including dual credit U.S. reporting to further incentivize U.S. sales growth. As a result, 3M reflects additional (“dual”) credit to another business segment when the customer account activity (“sales district”) with respect to the particular product sold to the external customer in the U.S. is provided by a different business segment. This additional dual credit is largely reflected at the division level. For example, certain respirators are primarily sold by the Personal Safety Division within the Safety and Graphics business segment; however, a sales district within the Industrial business segment provides the contact for sales of the product to particular customers in the U.S. market. In this example, the non-primary selling segment (Industrial) would also receive credit for the associated net sales initiated though its sales district and the related approximate operating income. The assigned operating income related to dual credit activity may differ from operating income that would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is reflected as a reconciling item entitled “Elimination of Dual Credit,” such that sales and operating income for the U.S. in total are unchanged.

Certain sales and operating income results for electronic bonding product lines are equally divided between the Electronics and Energy business segment and the Industrial business segment.

 


 

 

Supplemental Unaudited Business Segment Information

Based on Segment Structure Effective in the First Quarter of 2017

Net Sales 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

First

 

Second

 

Third

 

Fourth

 

Total

 

(Millions)

    

Quarter

    

Quarter

    

Quarter

    

Quarter

    

Year

 

Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

2,599

 

$

2,654

 

$

2,603

 

$

2,543

 

$

10,399

 

2015

 

 

2,679

 

 

2,655

 

 

2,582

 

 

2,472

 

 

10,388

 

2014

 

 

2,803

 

 

2,842

 

 

2,797

 

 

2,648

 

 

11,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Safety and Graphics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

1,477

 

$

1,561

 

$

1,500

 

$

1,343

 

$

5,881

 

2015

 

 

1,436

 

 

1,492

 

 

1,474

 

 

1,334

 

 

5,736

 

2014

 

 

1,496

 

 

1,571

 

 

1,514

 

 

1,413

 

 

5,994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

1,391

 

$

1,414

 

$

1,371

 

$

1,390

 

$

5,566

 

2015

 

 

1,337

 

 

1,370

 

 

1,354

 

 

1,388

 

 

5,449

 

2014

 

 

1,381

 

 

1,423

 

 

1,399

 

 

1,399

 

 

5,602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics and Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

1,089

 

$

1,129

 

$

1,250

 

$

1,175

 

$

4,643

 

2015

 

 

1,271

 

 

1,261

 

 

1,348

 

 

1,189

 

 

5,069

 

2014

 

 

1,246

 

 

1,358

 

 

1,448

 

 

1,337

 

 

5,389

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

1,050

 

$

1,130

 

$

1,210

 

$

1,094

 

$

4,484

 

2015

 

 

1,050

 

 

1,114

 

 

1,163

 

 

1,102

 

 

4,429

 

2014

 

 

1,081

 

 

1,143

 

 

1,179

 

 

1,130

 

 

4,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Unallocated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

 —

 

$

3

 

$

2

 

$

2

 

$

7

 

2015

 

 

 —

 

 

(4)

 

 

2

 

 

 —

 

 

(2)

 

2014

 

 

3

 

 

(1)

 

 

2

 

 

1

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Dual Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

(197)

 

$

(229)

 

$

(227)

 

$

(218)

 

$

(871)

 

2015

 

 

(195)

 

 

(202)

 

 

(211)

 

 

(187)

 

 

(795)

 

2014

 

 

(179)

 

 

(202)

 

 

(202)

 

 

(209)

 

 

(792)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

7,409

 

$

7,662

 

$

7,709

 

$

7,329

 

$

30,109

 

2015

 

 

7,578

 

 

7,686

 

 

7,712

 

 

7,298

 

 

30,274

 

2014

 

 

7,831

 

 

8,134

 

 

8,137

 

 

7,719

 

 

31,821

 

 


 

 

Supplemental Unaudited Business Segment Information

Based on Segment Structure Effective in the First Quarter of 2017

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

First

 

Second

 

Third

 

Fourth

 

Total

 

(Millions)

    

Quarter

    

Quarter

    

Quarter

    

Quarter

    

Year

 

Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

622

 

$

620

 

$

595

 

$

558

 

$

2,395

 

2015

 

 

601

 

 

613

 

 

584

 

 

479

 

 

2,277

 

2014

 

 

622

 

 

621

 

 

620

 

 

541

 

 

2,404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Safety and Graphics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

359

 

$

421

 

$

372

 

$

271

 

$

1,423

 

2015

 

 

348

 

 

373

 

 

332

 

 

279

 

 

1,332

 

2014

 

 

335

 

 

372

 

 

350

 

 

285

 

 

1,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

457

 

$

462

 

$

431

 

$

413

 

$

1,763

 

2015

 

 

410

 

 

441

 

 

434

 

 

445

 

 

1,730

 

2014

 

 

428

 

 

437

 

 

433

 

 

433

 

 

1,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics and Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

195

 

$

217

 

$

304

 

$

325

 

$

1,041

 

2015

 

 

271

 

 

271

 

 

335

 

 

206

 

 

1,083

 

2014

 

 

212

 

 

276

 

 

330

 

 

259

 

 

1,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

238

 

$

281

 

$

317

 

$

229

 

$

1,065

 

2015

 

 

241

 

 

259

 

 

293

 

 

255

 

 

1,048

 

2014

 

 

229

 

 

241

 

 

273

 

 

254

 

 

997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Unallocated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

(40)

 

$

(84)

 

$

(65)

 

$

(83)

 

$

(272)

 

2015

 

 

(98)

 

 

(72)

 

 

(55)

 

 

(124)

 

 

(349)

 

2014

 

 

(71)

 

 

(46)

 

 

(61)

 

 

(64)

 

 

(242)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Dual Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

(43)

 

$

(51)

 

$

(50)

 

$

(48)

 

$

(192)

 

2015

 

 

(43)

 

 

(45)

 

 

(47)

 

 

(40)

 

 

(175)

 

2014

 

 

(39)

 

 

(45)

 

 

(44)

 

 

(46)

 

 

(174)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

$

1,788

 

$

1,866

 

$

1,904

 

$

1,665

 

$

7,223

 

2015

 

 

1,730

 

 

1,840

 

 

1,876

 

 

1,500

 

 

6,946

 

2014

 

 

1,716

 

 

1,856

 

 

1,901

 

 

1,662

 

 

7,135