EXHIBIT 99

 

This Current Report on Form 8-K includes supplemental unaudited historical business segment net sales and operating income information in addition to net sales on a disaggregated basis that reflect 3M’s continuing effort to improve the alignment of its businesses around markets and customers. The Company did not operate under this segment 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, 2019. Effective in the first quarter of 2019, the Company made the following changes:

 

Continued alignment of customer account activity

·

As part of 3M’s regular customer-focus initiatives, the Company realigned certain customer account activity (“sales district”) to correlate with the primary divisional product offerings in various countries and reduce complexity for customers when interacting with multiple 3M businesses. This largely impacted the amount of dual credit certain business segments receive as a result of sales district attribution. 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. This dual credit is based on which business segment provides customer account activity with respect to a particular product sold in a specific country. As a result, previously reported aggregate business segment net sales and operating income for the total year 2018 decreased $32 million and $8 million, respectively, offset by corresponding decreases in the elimination of dual credit net sales and operating income amounts.

 

Creation of Closure and Masking Systems Division and Medical Solutions Division

·

3M created the Closure and Masking Systems Division, which combines the masking tape, packaging tape and personal care portfolios formerly within Industrial Adhesives and Tapes Division in the Industrial business segment into a separate division also within the Industrial business segment.

·

3M created the Medical Solutions Division in the Health Care business segment, which combines the former Critical and Chronic Care Division and Infection Prevention Division (which were also both within the Health Care business segment).

 

Additional actions impacting business segment reporting

·

The business associated with certain safety products sold through retail channels in the Asia Pacific region was realigned from the Personal Safety Division within the Safety and Graphics Business segment to the Construction and Home Improvement Division within the Consumer Business segment. This change resulted in a decrease in previously reported net sales and operating income for total year 2018 of $12 million and $1 million, respectively, in the Safety and Graphics business segment, offset by a corresponding increase in net sales and operating income within the Consumer business segment.

·

Certain previously non-allocated costs related to manufacturing and technology of centrally managed material resource centers of expertise within Corporate and Unallocated are now reflected as being allocated to the business segments. As a result, previously reported aggregate business segment operating income for the total year 2018 decreased $58 million, offset by a corresponding increase in operating income within Corporate and Unallocated.

 

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, 2018

 

Previously

 

 

 

 

 

Previously

 

 

 

 

 

(Millions)

    

Reported

    

Revised

    

Change

    

Reported

    

Revised

    

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

$

12,267

 

$

12,196

 

$

(71)

 

$

2,737

 

$

2,699

 

$

(38)

 

Safety and Graphics

 

 

6,827

 

 

6,812

 

 

(15)

 

 

1,720

 

 

1,706

 

 

(14)

 

Health Care

 

 

6,021

 

 

6,018

 

 

(3)

 

 

1,799

 

 

1,789

 

 

(10)

 

Electronics and Energy

 

 

5,472

 

 

5,471

 

 

(1)

 

 

2,055

 

 

2,049

 

 

(6)

 

Consumer

 

 

4,796

 

 

4,853

 

 

57

 

 

1,027

 

 

1,029

 

 

 2

 

Corporate and Unallocated

 

 

50

 

 

51

 

 

 1

 

 

(1,465)

 

 

(1,407)

 

 

58

 

Elimination of Dual Credit

 

 

(2,668)

 

 

(2,636)

 

 

32

 

 

(666)

 

 

(658)

 

 

 8

 

Total Company

 

$

32,765

 

$

32,765

 

$

 —

 

$

7,207

 

$

7,207

 

$

 —

 

 

 

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. Corporate and Unallocated also includes sales, costs, and income from contract manufacturing, transition services and other arrangements with the acquirer of all of the Communication Markets Division following its divestiture in 2018. 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 sales and related operating income. Management evaluates each of its five business segments based on net sales and operating income performance, including dual credit reporting to further incentivize 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 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 this example, the non-primary selling segment (Industrial) would also receive credit for the associated net sales initiated through 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 in total are unchanged.

 

Supplemental Unaudited Business Segment Information

Based on Segment Structure Effective in the First Quarter of 2019

Net Sales 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

First

 

Second

 

Third

 

Fourth

 

Total

 

(Millions)

    

Quarter

    

Quarter

    

Quarter

    

Quarter

    

Year

 

Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

3,135

 

$

3,138

 

$

2,996

 

$

2,927

 

$

12,196

 

2017

 

 

2,923

 

 

2,936

 

 

3,006

 

 

2,951

 

 

11,816

 

2016

 

 

2,790

 

 

2,848

 

 

2,809

 

 

2,737

 

 

11,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Safety and Graphics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

1,779

 

$

1,812

 

$

1,656

 

$

1,565

 

$

6,812

 

2017

 

 

1,549

 

 

1,568

 

 

1,549

 

 

1,564

 

 

6,230

 

2016

 

 

1,494

 

 

1,580

 

 

1,515

 

 

1,358

 

 

5,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

1,535

 

$

1,520

 

$

1,444

 

$

1,519

 

$

6,018

 

2017

 

 

1,434

 

 

1,449

 

 

1,485

 

 

1,484

 

 

5,852

 

2016

 

 

1,401

 

 

1,424

 

 

1,380

 

 

1,399

 

 

5,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics and Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

1,350

 

$

1,336

 

$

1,443

 

$

1,342

 

$

5,471

 

2017

 

 

1,291

 

 

1,290

 

 

1,516

 

 

1,407

 

 

5,504

 

2016

 

 

1,161

 

 

1,189

 

 

1,330

 

 

1,252

 

 

4,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

1,145

 

$

1,237

 

$

1,249

 

$

1,222

 

$

4,853

 

2017

 

 

1,087

 

 

1,178

 

 

1,291

 

 

1,218

 

 

4,774

 

2016

 

 

1,083

 

 

1,165

 

 

1,243

 

 

1,124

 

 

4,615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Unallocated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

 —

 

$

13

 

$

34

 

$

 4

 

$

51

 

2017

 

 

 2

 

 

 3

 

 

 —

 

 

(2)

 

 

 3

 

2016

 

 

 2

 

 

 2

 

 

 1

 

 

 2

 

 

 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Dual Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

(666)

 

$

(666)

 

$

(670)

 

$

(634)

 

$

(2,636)

 

2017

 

 

(601)

 

 

(614)

 

 

(675)

 

 

(632)

 

 

(2,522)

 

2016

 

 

(522)

 

 

(546)

 

 

(569)

 

 

(543)

 

 

(2,180)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

8,278

 

$

8,390

 

$

8,152

 

$

7,945

 

$

32,765

 

2017

 

 

7,685

 

 

7,810

 

 

8,172

 

 

7,990

 

 

31,657

 

2016

 

 

7,409

 

 

7,662

 

 

7,709

 

 

7,329

 

 

30,109

 

 

 

Supplemental Unaudited Business Segment Information

Based on Segment Structure Effective in the First Quarter of 2019

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

First

 

Second

 

Third

 

Fourth

 

Total

 

(Millions)

    

Quarter

    

Quarter

    

Quarter

    

Quarter

    

Year

 

Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

714

 

$

719

 

$

653

 

$

613

 

$

2,699

 

2017

 

 

663

 

 

564

 

 

667

 

 

574

 

 

2,468

 

2016

 

 

650

 

 

648

 

 

628

 

 

581

 

 

2,507

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Safety and Graphics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

481

 

$

478

 

$

407

 

$

340

 

$

1,706

 

2017

 

 

397

 

 

850

 

 

409

 

 

404

 

 

2,060

 

2016

 

 

353

 

 

416

 

 

365

 

 

263

 

 

1,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

458

 

$

434

 

$

443

 

$

454

 

$

1,789

 

2017

 

 

428

 

 

406

 

 

467

 

 

458

 

 

1,759

 

2016

 

 

448

 

 

452

 

 

422

 

 

402

 

 

1,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics and Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

336

 

$

865

 

$

455

 

$

393

 

$

2,049

 

2017

 

 

256

 

 

324

 

 

431

 

 

365

 

 

1,376

 

2016

 

 

222

 

 

238

 

 

332

 

 

352

 

 

1,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

220

 

$

263

 

$

290

 

$

256

 

$

1,029

 

2017

 

 

225

 

 

199

 

 

313

 

 

271

 

 

1,008

 

2016

 

 

236

 

 

280

 

 

315

 

 

224

 

 

1,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Unallocated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

(1,037)

 

$

(200)

 

$

(56)

 

$

(114)

 

$

(1,407)

 

2017

 

 

(85)

 

 

(45)

 

 

(109)

 

 

(129)

 

 

(368)

 

2016

 

 

(47)

 

 

(91)

 

 

(70)

 

 

(77)

 

 

(285)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Dual Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

(165)

 

$

(158)

 

$

(176)

 

$

(159)

 

$

(658)

 

2017

 

 

(142)

 

 

(145)

 

 

(170)

 

 

(154)

 

 

(611)

 

2016

 

 

(123)

 

 

(126)

 

 

(137)

 

 

(129)

 

 

(515)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

1,007

 

$

2,401

 

$

2,016

 

$

1,783

 

$

7,207

 

2017

 

 

1,742

 

 

2,153

 

 

2,008

 

 

1,789

 

 

7,692

 

2016

 

 

1,739

 

 

1,817

 

 

1,855

 

 

1,616

 

 

7,027

 

 

 

Supplemental Unaudited Net Sales on a Disaggregated Basis

Based on Segment Structure Effective in the First Quarter of 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 

 

 

 

December 31,

 

Net Sales (Millions)

 

2018

    

2017

    

2016

 

Abrasives

 

$

1,787

 

$

1,734

 

$

1,617

 

Adhesives and Tapes

 

 

3,338

 

 

3,183

 

 

2,959

 

Advanced Materials

 

 

1,240

 

 

1,124

 

 

1,039

 

Automotive and Aerospace

 

 

2,054

 

 

1,983

 

 

1,864

 

Automotive Aftermarket

 

 

1,644

 

 

1,647

 

 

1,592

 

Closure and Masking Systems

 

 

1,224

 

 

1,259

 

 

1,262

 

Separation and Purification

 

 

913

 

 

882

 

 

858

 

Other Industrial

 

 

(4)

 

 

 4

 

 

(7)

 

Total Industrial Business Group

 

$

12,196

 

$

11,816

 

$

11,184

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Solutions

 

$

1,843

 

$

1,757

 

$

1,752

 

Personal Safety

 

 

3,659

 

 

3,002

 

 

2,590

 

Roofing Granules

 

 

353

 

 

372

 

 

344

 

Transportation Safety

 

 

955

 

 

1,097

 

 

1,265

 

Other Safety and Graphics

 

 

 2

 

 

 2

 

 

(4)

 

Total Safety and Graphics Business Group

 

$

6,812

 

$

6,230

 

$

5,947

 

 

 

 

 

 

 

 

 

 

 

 

Drug Delivery

 

$

444

 

$

486

 

$

451

 

Food Safety

 

 

329

 

 

304

 

 

278

 

Health Information Systems

 

 

837

 

 

791

 

 

780

 

Medical Solutions

 

 

3,050

 

 

2,947

 

 

2,824

 

Oral Care

 

 

1,353

 

 

1,322

 

 

1,274

 

Other Health Care

 

 

 5

 

 

 2

 

 

(3)

 

Total Health Care Business Group

 

$

6,018

 

$

5,852

 

$

5,604

 

 

 

 

 

 

 

 

 

 

 

 

Electronics

 

$

3,974

 

$

3,850

 

$

3,306

 

Energy

 

 

1,488

 

 

1,652

 

 

1,626

 

Other Electronics and Energy

 

 

 9

 

 

 2

 

 

 —

 

Total Electronics and Energy Business Group

 

$

5,471

 

$

5,504

 

$

4,932

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Health Care

 

$

391

 

$

425

 

$

387

 

Home Care

 

 

1,012

 

 

1,028

 

 

1,001

 

Home Improvement

 

 

1,990

 

 

1,879

 

 

1,742

 

Stationery and Office

 

 

1,397

 

 

1,385

 

 

1,441

 

Other Consumer

 

 

63

 

 

57

 

 

44

 

Total Consumer Business Group

 

$

4,853

 

$

4,774

 

$

4,615

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Unallocated

 

$

51

 

$

 3

 

$

 7

 

Elimination of Dual Credit

 

 

(2,636)

 

 

(2,522)

 

 

(2,180)

 

Total Company

 

$

32,765

 

$

31,657

 

$

30,109