Fourth-Quarter Highlights:
-
Sales of $7.9 billion, down 0.6 percent year-on-year
-
Organic local-currency sales growth of 3.0 percent; growth across
all business groups and all geographic areas
-
GAAP EPS of $2.27 vs. $0.85 last year, up 167 percent year-on-year
-
Q4 2018 earnings included a net charge of $0.04 per share for
tax adjustments related to both the Tax Cuts and Jobs Act (TCJA)
and the Q1 2018 legal settlement; and a $0.02 per share net
benefit from a divestiture gain, net of actions
-
Q4 2017 earnings included tax expense of $1.25 per share
related to TCJA
-
Adjusted EPS of $2.31 vs. $2.10 last year, up 10.0 percent
year-on-year, excluding the above tax-related items in both years
-
Returned $2.1 billion to shareholders via dividends and gross share
repurchases
Full-Year Highlights:
-
Sales of $32.8 billion, up 3.5 percent year-on-year
-
Organic local-currency sales growth of 3.2 percent; growth across
all business groups and all geographic areas
-
GAAP EPS of $8.89 vs. $7.93 last year, up 12.1 percent year-on-year
-
Full-year 2018 earnings included a net charge of $1.57 per
share related to TCJA and the Q1 2018 legal settlement; and a
$0.50 per share net benefit from divestiture gain, net of actions
-
Full-year 2017 earnings included tax expense of $1.24 per share
related to TCJA
-
Adjusted EPS of $10.46 vs. $9.17 last year, up 14.1 percent
year-on-year, excluding the impact of TCJA and the Q1 2018 legal
settlement
-
Returned $8.1 billion to shareholders via dividends and gross share
repurchases
ST. PAUL, Minn.--(BUSINESS WIRE)--
3M (NYSE: MMM) today reported fourth-quarter and full-year 2018 results.
“3M executed well in the fourth quarter, with results that were in line
with our expectations,” said Mike Roman, 3M chief executive officer. “We
delivered organic growth of 3 percent – which included growth across all
business groups and geographic areas – along with strong cash flow and
earnings. The fourth quarter capped an important year for 3M, as we
posted good results and continued to take actions to strengthen our
company for the future.
“Going forward, our team remains focused on executing our four
priorities – Portfolio, Transformation, Innovation, and People & Culture
– which are keys to growth and value creation,” Roman continued. “We are
positioned for a successful 2019, and are focused on delivering for our
customers and shareholders.”
Fourth-Quarter Results
Fourth-quarter 2018 GAAP earnings were $2.27 per share, an increase of
167 percent versus the fourth quarter 2017. During the fourth quarter of
2018, the company incurred a net charge of $0.04 per share for tax
adjustments related to both the Tax Cut and Jobs Act (TCJA) and its
first quarter 2018 legal settlement. Fourth-quarter 2017 GAAP earnings
were $0.85 per share which included a net tax expense of $1.25 per share
related to TCJA.
Excluding the above items, fourth quarter 2018 adjusted earnings were
$2.31 per share versus $2.10 per share in the fourth quarter 2017, an
increase of 10.0 percent, as referenced in the “Supplemental Financial
Information Non-GAAP Measures” section. The company’s fourth quarter
2018 earnings include a $0.02 per share benefit related to a
divestiture, net of restructuring actions.
Sales were down 0.6 percent to $7.9 billion. Organic local-currency
sales increased 3.0 percent while divestitures decreased sales by 1.3
percent. Foreign currency translation decreased sales by 2.3 percent
year-on-year.
Fourth-quarter operating income was $1.8 billion and operating income
margins were 22.4 percent. The company’s operating cash flow was $2.3
billion, contributing to conversion of 128 percent of net income to free
cash flow, as referenced in the “Supplemental Financial Information
Non-GAAP Measures” section.
3M paid $787 million in cash dividends to shareholders and repurchased
$1.3 billion of its own shares during the quarter.
Total sales grew 2.4 percent in Health Care, 0.3 percent in Safety and
Graphics, and 0.1 percent in Consumer. Total sales declined 0.3 percent
in Industrial and 4.5 percent in Electronics and Energy. Organic
local-currency sales increased 4.8 percent in Health Care, 4.1 percent
in Electronics and Energy, 3.3 percent in Safety and Graphics, 2.5
percent in Industrial, and 1.9 percent in Consumer.
On a geographic basis, total sales grew 3.3 percent in the U.S. Total
sales declined 0.8 percent in Asia Pacific, 2.8 percent in Latin
America/Canada, and 6.4 percent in EMEA (Europe, Middle East and
Africa). Organic local-currency sales increased 5.0 percent in Latin
America/Canada, 4.4 percent in the U.S., 2.0 percent in Asia Pacific,
and 1.3 percent in EMEA.
Fourth-Quarter Business Group Discussion
Industrial
-
Sales of $3.0 billion, down 0.3 percent in U.S. dollars. Organic
local-currency sales increased 2.5 percent, divestitures decreased
sales by 0.1 percent and foreign currency translation decreased sales
by 2.7 percent.
-
On an organic local-currency basis:
-
Sales grew in advanced materials, industrial adhesives and tapes,
separation and purification, abrasive systems, and automotive
aftermarket.
-
Sales grew in all geographic areas led by the U.S., Latin
America/Canada, and EMEA.
-
Operating income was $627 million, an increase of 8.1 percent
year-on-year; operating margins were 21.2 percent.
Safety and Graphics
-
Sales of $1.6 billion, up 0.3 percent in U.S. dollars. Organic
local-currency sales increased 3.3 percent, foreign currency
translation decreased sales by 2.8 percent and acquisitions, net of
divestitures, decreased sales by 0.2 percent.
-
On an organic local-currency basis:
-
Sales grew in personal safety and commercial solutions; sales
declined in transportation safety and roofing granules.
-
Sales grew in Latin America/Canada, the U.S., and EMEA; sales
declined in Asia Pacific.
-
Operating income was $345 million, down 14.8 percent year-on-year;
operating margins were 22.0 percent.
Health Care
-
Sales of $1.5 billion, up 2.4 percent in U.S. dollars. Organic
local-currency sales increased 4.8 percent, foreign currency
translation decreased sales by 2.4 percent.
-
On an organic local-currency basis:
-
Sales grew in food safety, health information systems, medical
solutions, and oral care; sales declined in drug delivery.
-
Sales grew in all geographic areas led by Asia Pacific, Latin
America/Canada, and EMEA.
-
Operating income was $458 million, a decrease of 0.2 percent
year-on-year; operating margins were 30.2 percent.
Electronics and Energy
-
Sales of $1.3 billion, down 4.5 percent in U.S. dollars. Organic
local-currency sales increased 4.1 percent, foreign currency
translation decreased sales by 1.5 percent and divestitures decreased
sales by 7.1 percent.
-
On an organic local-currency basis:
-
Electronics-related sales grew 3 percent with growth in both
electronics material solutions and display materials and systems;
energy-related sales increased 5 percent.
-
Sales grew in Latin America/Canada, the U.S., and Asia Pacific;
sales declined in EMEA.
-
Operating income was $396 million, an increase of 8.2 percent
year-on-year; operating margins were 29.5 percent.
Consumer
-
Sales of $1.2 billion, up 0.1 percent in U.S. dollars. Organic
local-currency sales increased 1.9 percent and foreign currency
translation decreased sales by 1.8 percent.
-
On an organic local-currency basis:
-
Sales grew in home improvement, and stationery and office
supplies; sales declined in home care, and consumer health care.
-
Sales grew in Latin America/Canada and the U.S.; sales declined in
Asia Pacific and EMEA.
-
Operating income was $257 million, down 5.2 percent year-on-year;
operating margins were 21.3 percent.
Full-Year 2018 Results
Full-year 2018 GAAP earnings were $8.89 per share, an increase of 12.1
percent. During the year, the company recorded a net tax expense of
$0.29 per share related to TCJA. In addition, the company recorded an
after-tax expense of $1.28 per share related to its first quarter 2018
legal settlement. Full-year 2017 GAAP earnings were $7.93 per share,
which included a $1.24 per share net tax expense related to TCJA.
Excluding the above items, 2018 adjusted earnings were $10.46 per share,
an increase of 14.1 percent, as referenced in the “Supplemental
Financial Information Non-GAAP Measures” section. During 2018, the
company recorded an earnings benefit of $0.50 per share from the
divestiture of its communication markets business, net of related
restructuring actions.
Sales increased 3.5 percent to $32.8 billion and organic local-currency
sales increased 3.2 percent. The combination of acquisitions and
divestitures increased sales 0.1 percent. Foreign currency translation
increased sales 0.2 percent. Full-year operating income margins were
22.0 percent, while adjusted operating margins were 24.7 percent, up 40
basis points versus 2017.
The company’s operating cash flow was $6.4 billion, contributing to
conversion of 91 percent of net income to free cash flow for the year.
In addition, 3M generated 22 percent return on invested capital. Refer
to the “Supplemental Financial Information Non-GAAP Measures” section.
The net impact from TCJA, Q1 2018 legal settlement, and communication
markets divestiture gain, net of related actions, reduced full-year free
cash flow conversion by 2 percentage points and reduced return on
invested capital by 2 percentage points.
For the full year, 3M paid $3.2 billion in cash dividends to
shareholders and repurchased $4.9 billion of its own shares.
2019 Updated Outlook
The company updated its earnings and organic local-currency sales growth
expectations to reflect the current external environment and to include
the pending acquisition of the technology business of M*Modal which was
previously excluded from guidance. Full-year 2019 earnings are now
expected to be in the range of $10.45 to $10.90 per share, including a
$0.10 per share earnings headwind from the M*Modal acquisition, versus a
prior expectation of $10.60 to $11.05 per share. 3M also expanded its
full-year organic local-currency growth expectation to a range of 1 to 4
percent versus 2 to 4 percent, previously. The company maintained its
full-year expectations for free cash flow conversion of 95 to 105
percent and return on invested capital of 22 to 25 percent, as
referenced in the “Supplemental Financial Information Non-GAAP Measures”
section.
3M will conduct an investor teleconference at 9:00 a.m. EST (8:00 a.m.
CST) today. Investors can access this conference via the following:
-
Live webcast at http://investors.3M.com.
-
Live telephone:
Call 800-762-2596 within the U.S. or +1
212-231-2916 outside the U.S. Please join the call at least 10 minutes
before the start time.
-
Telephone replay:
Call 800-633-8284 within the U.S. or +1
402-977-9140 outside the U.S. (for both U.S. and outside the U.S., the
access code is 21898676). The telephone replay will be available until
11:30 a.m. EST (10:30 a.m. CST) on Feb. 5, 2019.
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," "aim," "project," "intend," "plan,"
"believe," "will," "should," "could," "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, political, and
capital markets conditions and other factors beyond the Company's
control, including natural and other disasters or climate change
affecting the operations of the Company or its customers and suppliers;
(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
market 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; (9)
unanticipated problems or delays with the phased implementation of a
global enterprise resource planning (ERP) system, or security breaches
and other disruptions to the Company's information technology
infrastructure; (10) financial market risks that may affect the
Company’s funding obligations under defined benefit pension and
postretirement plans; and (11) 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
Dec. 31, 2017, and any 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 "Cautionary Note Concerning Factors That
May Affect Future Results" and "Risk Factors" in Part I, Items 1 and 1A
(Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly
Reports). 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.
|
|
|
3M Company and Subsidiaries
|
|
CONSOLIDATED STATEMENT OF INCOME
|
|
(Millions, except per-share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
7,945
|
|
|
|
$
|
7,990
|
|
|
|
$
|
32,765
|
|
|
|
$
|
31,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
4,060
|
|
|
|
|
4,094
|
|
|
|
|
16,682
|
|
|
|
|
16,055
|
|
|
Selling, general and administrative expenses
|
|
|
|
1,682
|
|
|
|
|
1,755
|
|
|
|
|
7,602
|
|
|
|
|
6,626
|
|
|
Research, development and related expenses
|
|
|
|
437
|
|
|
|
|
448
|
|
|
|
|
1,821
|
|
|
|
|
1,870
|
|
|
Gain on sale of businesses
|
|
|
|
(17
|
)
|
|
|
|
(96
|
)
|
|
|
|
(547
|
)
|
|
|
|
(586
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
6,162
|
|
|
|
|
6,201
|
|
|
|
|
25,558
|
|
|
|
|
23,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
1,783
|
|
|
|
|
1,789
|
|
|
|
|
7,207
|
|
|
|
|
7,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income), net
|
|
|
|
63
|
|
|
|
|
117
|
|
|
|
|
207
|
|
|
|
|
144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
1,720
|
|
|
|
|
1,672
|
|
|
|
|
7,000
|
|
|
|
|
7,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
371
|
|
|
|
|
1,147
|
|
|
|
|
1,637
|
|
|
|
|
2,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income including noncontrolling interest
|
|
|
$
|
1,349
|
|
|
|
$
|
525
|
|
|
|
$
|
5,363
|
|
|
|
$
|
4,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to noncontrolling interest
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
14
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to 3M
|
|
|
$
|
1,347
|
|
|
|
$
|
523
|
|
|
|
$
|
5,349
|
|
|
|
$
|
4,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average 3M common shares outstanding – basic
|
|
|
|
580.7
|
|
|
|
|
596.5
|
|
|
|
|
588.5
|
|
|
|
|
597.5
|
|
|
Earnings per share attributable to 3M common shareholders – basic
|
|
|
$
|
2.32
|
|
|
|
$
|
0.88
|
|
|
|
$
|
9.09
|
|
|
|
$
|
8.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average 3M common shares outstanding – diluted
|
|
|
|
592.6
|
|
|
|
|
613.4
|
|
|
|
|
602.0
|
|
|
|
|
612.7
|
|
|
Earnings per share attributable to 3M common shareholders – diluted
|
|
|
$
|
2.27
|
|
|
|
$
|
0.85
|
|
|
|
$
|
8.89
|
|
|
|
$
|
7.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3M Company and Subsidiaries
|
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
(Dollars in millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
2,853
|
|
|
$
|
3,053
|
|
Marketable securities – current
|
|
|
|
380
|
|
|
|
1,076
|
|
Accounts receivable – net
|
|
|
|
5,020
|
|
|
|
4,911
|
|
Inventories
|
|
|
|
4,366
|
|
|
|
4,034
|
|
Prepaids
|
|
|
|
741
|
|
|
|
937
|
|
Other current assets
|
|
|
|
349
|
|
|
|
266
|
|
Total current assets
|
|
|
|
13,709
|
|
|
|
14,277
|
|
Property, plant and equipment – net
|
|
|
|
8,738
|
|
|
|
8,866
|
|
Goodwill and intangible assets – net
|
|
|
|
12,708
|
|
|
|
13,449
|
|
Other assets
|
|
|
|
1,345
|
|
|
|
1,395
|
|
Total assets
|
|
|
$
|
36,500
|
|
|
$
|
37,987
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Short-term borrowings and
|
|
|
|
|
|
|
|
current portion of long-term debt
|
|
|
$
|
1,211
|
|
|
$
|
1,853
|
|
Accounts payable
|
|
|
|
2,266
|
|
|
|
1,945
|
|
Accrued payroll
|
|
|
|
749
|
|
|
|
870
|
|
Accrued income taxes
|
|
|
|
243
|
|
|
|
310
|
|
Other current liabilities
|
|
|
|
2,775
|
|
|
|
2,709
|
|
Total current liabilities
|
|
|
|
7,244
|
|
|
|
7,687
|
|
Long-term debt
|
|
|
|
13,411
|
|
|
|
12,096
|
|
Other liabilities
|
|
|
|
5,997
|
|
|
|
6,582
|
|
Total liabilities
|
|
|
$
|
26,652
|
|
|
$
|
26,365
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
$
|
9,848
|
|
|
$
|
11,622
|
|
Shares outstanding
|
|
|
|
|
|
|
|
December 31, 2018: 576,575,168 shares
|
|
|
|
|
|
|
|
December 31, 2017: 594,884,237 shares
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
$
|
36,500
|
|
|
$
|
37,987
|
|
|
|
|
|
|
|
|
|
|
|
|
3M Company and Subsidiaries
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(Dollars in millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Year ended
|
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
$
|
6,439
|
|
|
|
$
|
6,240
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(1,577
|
)
|
|
|
|
(1,373
|
)
|
|
Acquisitions, net of cash acquired
|
|
|
|
13
|
|
|
|
|
(2,023
|
)
|
|
Purchases and proceeds from sale or maturities of marketable
securities and investments – net
|
|
|
|
669
|
|
|
|
|
(798
|
)
|
|
Proceeds from sale of businesses, net of cash sold
|
|
|
|
846
|
|
|
|
|
1,065
|
|
|
Other investing activities
|
|
|
|
271
|
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
|
|
|
222
|
|
|
|
|
(3,086
|
)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Change in debt
|
|
|
|
933
|
|
|
|
|
1,603
|
|
|
Purchases of treasury stock
|
|
|
|
(4,870
|
)
|
|
|
|
(2,068
|
)
|
|
Proceeds from issuances of treasury stock pursuant to stock option
and benefit plans
|
|
|
|
485
|
|
|
|
|
734
|
|
|
Dividends paid to shareholders
|
|
|
|
(3,193
|
)
|
|
|
|
(2,803
|
)
|
|
Other financing activities
|
|
|
|
(56
|
)
|
|
|
|
(121
|
)
|
|
|
|
|
|
|
|
|
NET CASH USED IN FINANCING ACTIVITIES
|
|
|
|
(6,701
|
)
|
|
|
|
(2,655
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(160
|
)
|
|
|
|
156
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(200
|
)
|
|
|
|
655
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
3,053
|
|
|
|
|
2,398
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
2,853
|
|
|
|
$
|
3,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3M Company and Subsidiaries
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
NON-GAAP MEASURES
|
|
(Dollars in millions, except full-year 2019 forecast)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
Major GAAP Cash Flow Categories
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
2,258
|
|
|
|
$
|
1,860
|
|
|
|
$
|
6,439
|
|
|
|
$
|
6,240
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
|
(416
|
)
|
|
|
|
(2,732
|
)
|
|
|
|
222
|
|
|
|
|
(3,086
|
)
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
(2,152
|
)
|
|
|
|
1,044
|
|
|
|
|
(6,701
|
)
|
|
|
|
(2,655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (non-GAAP measure)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-Year
2019 Forecast
(Billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
2,258
|
|
|
|
$
|
1,860
|
|
|
|
$
|
6,439
|
|
|
|
$
|
6,240
|
|
|
|
$7.7 to $8.4
|
|
Purchases of property, plant and equipment
|
|
|
|
(531
|
)
|
|
|
|
(459
|
)
|
|
|
|
(1,577
|
)
|
|
|
|
(1,373
|
)
|
|
|
($1.7 to $1.9)
|
|
Free cash flow (a)
|
|
|
|
1,727
|
|
|
|
|
1,401
|
|
|
|
|
4,862
|
|
|
|
|
4,867
|
|
|
|
$5.8 to $6.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to 3M
|
|
|
$
|
1,347
|
|
|
|
$
|
523
|
|
|
|
$
|
5,349
|
|
|
|
$
|
4,858
|
|
|
|
$6.1 to $6.4
|
|
Free cash flow conversion (a)
|
|
|
|
128
|
|
%
|
|
|
268
|
|
%
|
|
|
91
|
|
%
|
|
|
100
|
|
%
|
|
95% to 105%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Free cash flow and free cash flow conversion are not defined under
U.S. generally accepted accounting principles (GAAP). Therefore,
they 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 defines free cash flow
conversion as free cash flow divided by net income attributable to
3M. The Company believes free cash flow and free cash flow
conversion are meaningful to investors as they function as useful
measures of performance and the Company uses these measures as an
indication of the strength of the company and its ability to
generate cash.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
Net Debt (non-GAAP measure)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
Total debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,622
|
|
|
$
|
13,949
|
|
Less: Cash, cash equivalents and marketable securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,270
|
|
|
|
4,156
|
|
Net debt (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,352
|
|
|
$
|
9,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Net debt is not defined under U.S. GAAP and may not be computed the
same as similarly titled measures used by other companies. The
Company defines net debt as total debt less the total of cash, cash
equivalents and current and long-term marketable securities. 3M
believes net debt is meaningful to investors as 3M considers net
debt and its components to be an important indicator of liquidity
and a guiding measure of capital structure strategy.
|
|
|
|
|
|
|
3M Company and Subsidiaries
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
NON-GAAP MEASURES – (CONTINUED)
|
|
(Dollars in millions, except full-year 2019 forecast)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended December 31,
|
|
|
Full Year
Estimated
|
|
Return on Invested Capital (non-GAAP measure)
|
|
|
2018
|
|
|
2017
|
|
|
2019 (in
billions)
|
|
|
|
|
|
|
|
|
|
|
|
Net income including non-controlling interest
|
|
|
$
|
5,363
|
|
|
|
$
|
4,869
|
|
|
|
$6.1 to $6.4
|
|
Interest expense (after-tax) (1)
|
|
|
|
268
|
|
|
|
|
208
|
|
|
|
~$0.4
|
|
Adjusted net income (Return)
|
|
|
$
|
5,631
|
|
|
|
$
|
5,077
|
|
|
|
$6.5 to $6.8
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders' equity (including non-controlling interest) (2)
|
|
|
$
|
10,407
|
|
|
|
$
|
11,627
|
|
|
|
$10.0 to $11.0
|
|
Average short-term and long-term debt (3)
|
|
|
|
14,912
|
|
|
|
|
12,156
|
|
|
|
$17.0 to $18.0
|
|
Average invested capital
|
|
|
$
|
25,318
|
|
|
|
$
|
23,783
|
|
|
|
$27.0 to $29.0
|
|
|
|
|
|
|
|
|
|
|
|
Return on invested capital (non-GAAP measure) (c)
|
|
|
|
22.2
|
%
|
|
|
|
21.3
|
%
|
|
|
22% to 25%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Effective income tax rate used for interest expense
|
|
|
|
23.4
|
%
|
|
|
|
35.5
|
%
|
|
|
20% to 22%
|
|
|
|
|
|
|
|
|
|
|
|
(2) Calculation of average equity (includes non-controlling interest)
|
|
|
|
|
|
|
|
|
|
|
Ending total equity as of:
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
|
$
|
11,039
|
|
|
|
$
|
11,040
|
|
|
|
|
|
June 30
|
|
|
|
10,428
|
|
|
|
|
11,644
|
|
|
|
|
|
September 30
|
|
|
|
10,311
|
|
|
|
|
12,202
|
|
|
|
|
|
December 31
|
|
|
|
9,848
|
|
|
|
|
11,622
|
|
|
|
|
|
Average total equity
|
|
|
$
|
10,407
|
|
|
|
$
|
11,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Calculation of average debt
|
|
|
|
|
|
|
|
|
|
|
Ending short-term and long-term debt as of:
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
|
$
|
15,660
|
|
|
|
$
|
11,711
|
|
|
|
|
|
June 30
|
|
|
|
14,519
|
|
|
|
|
11,301
|
|
|
|
|
|
September 30
|
|
|
|
14,846
|
|
|
|
|
11,663
|
|
|
|
|
|
December 31
|
|
|
|
14,622
|
|
|
|
|
13,949
|
|
|
|
|
|
Average short-term and long-term debt
|
|
|
$
|
14,912
|
|
|
|
$
|
12,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Return on Invested Capital (ROIC) is not defined under U.S.
generally accepted accounting principles. Therefore, ROIC should not
be considered a substitute for other measures prepared in accordance
with U.S. GAAP and may not be comparable to similarly titled
measures used by other companies. The Company defines ROIC as
adjusted net income (net income including non-controlling interest
plus after-tax interest expense) divided by average invested capital
(equity plus debt). The Company believes ROIC is meaningful to
investors as it focuses on shareholder value creation.
|
|
|
|
|
|
|
3M Company and Subsidiaries
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
NON-GAAP MEASURES – (CONTINUED)
|
|
(Dollars in millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income, operating income margin, earnings per share, &
effective tax rate (non-GAAP measures) (Dollars in millions, except
per share amounts)
|
|
Net
Sales
|
|
Operating
Income
|
|
Operating
Income
Margin
|
|
Income
Before
Taxes
|
|
Provision
for
Income
Taxes
|
|
Effective
Tax
Rate
|
|
Net Income
Attributable
to 3M
|
|
Earnings
Per
Diluted
Share
|
|
Earnings
per
diluted
share
percent
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2017 GAAP
|
|
$
|
7,990
|
|
$
|
1,789
|
|
22.4
|
%
|
|
$
|
1,672
|
|
$
|
1,147
|
|
|
68.6
|
%
|
|
$
|
523
|
|
|
$
|
0.85
|
|
|
|
|
Adjustment for TCJA
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
—
|
|
|
(762
|
)
|
|
—
|
|
|
|
762
|
|
|
|
1.25
|
|
|
|
|
Q4 2017 Adjusted Non-GAAP Measure (d) |
|
$
|
7,990
|
|
$
|
1,789
|
|
22.4
|
%
|
|
$
|
1,672
|
|
$
|
385
|
|
|
23.0
|
%
|
|
$
|
1,285
|
|
|
$
|
2.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2018 GAAP
|
|
$
|
7,945
|
|
$
|
1,783
|
|
22.4
|
%
|
|
$
|
1,720
|
|
$
|
371
|
|
|
21.6
|
%
|
|
$
|
1,347
|
|
|
$
|
2.27
|
|
|
167.1
|
%
|
|
Adjustment for measurement period accounting of TCJA
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
—
|
|
|
41
|
|
|
|
|
|
(41
|
)
|
|
|
(0.07
|
)
|
|
|
|
Adjustment for MN NRD Resolution
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
—
|
|
|
(60
|
)
|
|
|
|
|
60
|
|
|
|
0.11
|
|
|
|
|
Q4 2018 Adjusted Non-GAAP Measure (d) |
|
$
|
7,945
|
|
$
|
1,783
|
|
22.4
|
%
|
|
$
|
1,720
|
|
$
|
352
|
|
|
20.5
|
%
|
|
$
|
1,366
|
|
|
$
|
2.31
|
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income, operating income margin, earnings per share, &
effective tax rate (non-GAAP measures) (Dollars in millions, except
per share amounts)
|
|
Net
Sales
|
|
Operating
Income
|
|
Operating
Income
Margin
|
|
Income
Before
Taxes
|
|
Provision
for
Income
Taxes
|
|
Effective
Tax
Rate
|
|
Net Income
Attributable
to 3M
|
|
Earnings
Per
Diluted
Share
|
|
Earnings
per
diluted
share
percent
change
|
|
Full Year 2017 GAAP
|
|
$
|
31,657
|
|
$
|
7,692
|
|
24.3
|
%
|
|
$
|
7,548
|
|
$
|
2,679
|
|
|
35.5
|
%
|
|
$
|
4,858
|
|
|
$
|
7.93
|
|
|
|
|
Adjustment for TCJA
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
—
|
|
|
(762
|
)
|
|
—
|
|
|
|
762
|
|
|
|
1.24
|
|
|
|
|
Full Year 2017 Adjusted Non-GAAP Measure (d) |
|
$
|
31,657
|
|
$
|
7,692
|
|
24.3
|
%
|
|
$
|
7,548
|
|
$
|
1,917
|
|
|
25.4
|
%
|
|
$
|
5,620
|
|
|
$
|
9.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2018 GAAP
|
|
$
|
32,765
|
|
$
|
7,207
|
|
22.0
|
%
|
|
$
|
7,000
|
|
$
|
1,637
|
|
|
23.4
|
%
|
|
$
|
5,349
|
|
|
$
|
8.89
|
|
|
12.1
|
%
|
|
Adjustment for measurement period accounting of TCJA
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
—
|
|
|
(176
|
)
|
|
|
|
|
176
|
|
|
|
0.29
|
|
|
|
|
Adjustment for MN NRD Resolution
|
|
|
—
|
|
|
897
|
|
—
|
|
|
|
897
|
|
|
127
|
|
|
|
|
|
770
|
|
|
|
1.28
|
|
|
|
|
Full Year 2018 Adjusted Non-GAAP Measure (d) |
|
$
|
32,765
|
|
$
|
8,104
|
|
24.7
|
%
|
|
$
|
7,897
|
|
$
|
1,588
|
|
|
20.1
|
%
|
|
$
|
6,295
|
|
|
$
|
10.46
|
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP
MEASURES – (CONTINUED)
(Dollars in millions, except per share
amounts)
(Unaudited)
|
(d)
|
|
In February 2018, 3M reached an agreement with the State of
Minnesota that resolved the previously disclosed Natural Resource
Damages (NRD) lawsuit filed by the State against the Company related
to certain PFCs present in the environment. Under the terms of the
settlement, 3M agreed to provide an $850 million grant to the State
for a special “3M Water Quality and Sustainability Fund.” This Fund
will enable projects that support water sustainability in the Twin
Cities East Metro region, such as continued delivery of water to
residents and enhancing groundwater recharge to support sustainable
growth. The projects will also result in habitat and recreation
improvements, such as fishing piers, trails, and open space
preservation. 3M recorded a charge of $897 million ($710 million
after-tax), inclusive of legal fees and other related obligations,
in the first quarter of 2018 associated with the resolution of this
matter. In the fourth quarter of 2018, 3M recorded a related $60
million tax expense resulting from the Company’s ongoing IRS
examination under the Compliance Assurance Process (CAP) and new
guidance released under the Tax Cuts and Jobs Act. Also during the
first quarter of 2018, 3M recorded a tax expense of $217 million
related to a measurement period adjustment to the provisional
amounts recorded in December 2017 from the enactment of the Tax Cuts
and Jobs Act (TCJA). In the fourth quarter 2018, 3M finalized the
tax impact related to TCJA with a reversal of previously recorded
tax expense in the amount of $41 million.
|
|
|
|
|
|
During the fourth quarter of 2017, 3M recorded a net tax expense of
$762 million related to the enactment of the Tax Cuts and Jobs Act
(TCJA). The expense was primarily related to the TCJA’s transition
tax on previously unremitted earnings of non-U.S. subsidiaries and
was net of remeasurement of 3M’s deferred tax assets and liabilities
considering the TCJA’s newly enacted tax rates and certain other
impacts. This provisional amount was subject to adjustment during
the measurement period of up to one year following the December 2017
enactment of the TCJA, as provided by SEC guidance.
|
|
|
|
|
|
In addition to providing financial results in accordance with U.S.
GAAP, the Company also provides non-GAAP measures that adjust for
the impacts of the NRD resolution and enactment/measurement period
adjustments to the impact of the enactment of the TCJA. These items
represent significant charges/benefits that impacted the Company’s
financial results. Operating income, operating income margin,
effective tax rate, net income, and earnings per share are all
measures for which 3M provides the GAAP measure and an adjusted
measure. The adjusted measures are not in accordance with, nor are
they a substitute for, GAAP measures. The Company considers these
non-GAAP measures in evaluating and managing the Company’s
operations. The Company believes that discussion of results adjusted
for these items is meaningful to investors as it provides a useful
analysis of ongoing underlying operating trends. The determination
of these items may not be comparable to similarly titled measures
used by other companies.
|
|
|
|
|
|
|
3M Company and Subsidiaries
|
|
SALES CHANGE ANALYSIS (e)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
Europe,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Middle
|
|
|
Latin
|
|
|
|
|
Sales Change Analysis
|
|
|
United
|
|
|
Asia-
|
|
|
East and
|
|
|
America/
|
|
|
World-
|
|
By Geographic Area
|
|
|
States
|
|
|
Pacific
|
|
|
Africa
|
|
|
Canada
|
|
|
Wide
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume – organic
|
|
|
3.1
|
%
|
|
|
1.4
|
%
|
|
|
(0.6
|
)%
|
|
|
2.2
|
%
|
|
|
1.6
|
%
|
|
Price
|
|
|
1.3
|
|
|
|
0.6
|
|
|
|
1.9
|
|
|
|
2.8
|
|
|
|
1.4
|
|
|
Organic local-currency sales
|
|
|
4.4
|
|
|
|
2.0
|
|
|
|
1.3
|
|
|
|
5.0
|
|
|
|
3.0
|
|
|
Divestitures
|
|
|
(1.1
|
)
|
|
|
(0.4
|
)
|
|
|
(2.9
|
)
|
|
|
(1.4
|
)
|
|
|
(1.3
|
)
|
|
Translation
|
|
|
—
|
|
|
|
(2.4
|
)
|
|
|
(4.8
|
)
|
|
|
(6.4
|
)
|
|
|
(2.3
|
)
|
|
Total sales change
|
|
|
3.3
|
%
|
|
|
(0.8
|
)%
|
|
|
(6.4
|
)%
|
|
|
(2.8
|
)%
|
|
|
(0.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2018
|
|
Worldwide Sales Change
|
|
|
Organic local-
|
|
|
|
|
|
|
|
|
Total sales
|
|
By Business Segment
|
|
|
currency sales
|
|
|
Divestitures
|
|
|
Translation
|
|
|
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
|
2.5
|
%
|
|
|
(0.1
|
)%
|
|
|
(2.7
|
)%
|
|
|
(0.3
|
)%
|
|
Safety and Graphics
|
|
|
3.3
|
|
|
|
(0.2
|
)
|
|
|
(2.8
|
)
|
|
|
0.3
|
|
|
Health Care
|
|
|
4.8
|
|
|
|
—
|
|
|
|
(2.4
|
)
|
|
|
2.4
|
|
|
Electronics and Energy
|
|
|
4.1
|
|
|
|
(7.1
|
)
|
|
|
(1.5
|
)
|
|
|
(4.5
|
)
|
|
Consumer
|
|
|
1.9
|
|
|
|
—
|
|
|
|
(1.8
|
)
|
|
|
0.1
|
|
|
Total Company
|
|
|
3.0
|
%
|
|
|
(1.3
|
)%
|
|
|
(2.3
|
)%
|
|
|
(0.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
Europe,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Middle
|
|
|
Latin
|
|
|
|
|
Sales Change Analysis
|
|
|
United
|
|
|
Asia-
|
|
|
East and
|
|
|
America/
|
|
|
World-
|
|
By Geographic Area
|
|
|
States
|
|
|
Pacific
|
|
|
Africa
|
|
|
Canada
|
|
|
Wide
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume – organic
|
|
|
2.1
|
%
|
|
|
3.5
|
%
|
|
|
—
|
%
|
|
|
2.1
|
%
|
|
|
2.1
|
%
|
|
Price
|
|
|
1.1
|
|
|
|
0.3
|
|
|
|
1.7
|
|
|
|
2.0
|
|
|
|
1.1
|
|
|
Organic local-currency sales
|
|
|
3.2
|
|
|
|
3.8
|
|
|
|
1.7
|
|
|
|
4.1
|
|
|
|
3.2
|
|
|
Acquisitions
|
|
|
1.9
|
|
|
|
0.5
|
|
|
|
2.2
|
|
|
|
0.7
|
|
|
|
1.4
|
|
|
Divestitures
|
|
|
(1.3
|
)
|
|
|
(0.6
|
)
|
|
|
(2.5
|
)
|
|
|
(1.4
|
)
|
|
|
(1.3
|
)
|
|
Translation
|
|
|
—
|
|
|
|
0.8
|
|
|
|
1.7
|
|
|
|
(3.7
|
)
|
|
|
0.2
|
|
|
Total sales change
|
|
|
3.8
|
%
|
|
|
4.5
|
%
|
|
|
3.1
|
%
|
|
|
(0.3
|
)%
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018
|
|
Worldwide Sales Change
|
|
|
Organic local-
|
|
|
|
|
|
|
|
|
|
|
|
Total sales
|
|
By Business Segment
|
|
|
currency sales
|
|
|
Acquisitions
|
|
|
Divestitures
|
|
|
Translation
|
|
|
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
|
3.2
|
%
|
|
|
—
|
%
|
|
|
(0.1
|
)%
|
|
|
0.3
|
%
|
|
|
3.4
|
%
|
|
Safety and Graphics
|
|
|
5.1
|
|
|
|
7.3
|
|
|
|
(3.1
|
)
|
|
|
0.2
|
|
|
|
9.5
|
|
|
Health Care
|
|
|
2.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
2.9
|
|
|
Electronics and Energy
|
|
|
3.3
|
|
|
|
—
|
|
|
|
(4.2
|
)
|
|
|
0.4
|
|
|
|
(0.5
|
)
|
|
Consumer
|
|
|
1.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
|
1.4
|
|
|
Total Company
|
|
|
3.2
|
%
|
|
|
1.4
|
%
|
|
|
(1.3
|
)%
|
|
|
0.2
|
%
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
|
Total sales change is calculated based on reported sales results.
The components of sales change include organic local-currency
sales, acquisitions, divestitures, and translation. Organic
local-currency sales includes both organic volume impacts (which
excludes acquisition and divestiture impacts), and selling price
changes. Acquisition and divestiture impacts are measured
separately for the first 12 months post-transaction.
|
|
|
|
3M Company and Subsidiaries
BUSINESS SEGMENTS
(Dollars
in millions)
(Unaudited)
As part of 3M’s continuing effort to improve the alignment of its
businesses around markets and customers, the Company made the following
changes, effective in the first quarter of 2018, and other revisions
impacting business segment reporting:
Consolidation of customer account activity within international
countries – expanding dual credit reporting
-
The Company consolidated its customer account activity in each country
into centralized sales districts for certain countries that make up
approximately 70 percent of 3M’s 2017 international net sales.
Expansion of these initiatives, which previously had been deployed
only in the U.S., reduces the complexity for customers when
interacting with multiple 3M businesses. 3M business segment reporting
measures include dual credit to business segments for certain sales
and related 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. The expansion of
alignment of customer accounts within additional countries increased
the attribution of dual credit across 3M’s business segments.
Additionally, certain sales and operating income results for
electronic bonding product lines that were previously equally divided
between the Electronics and Energy business segment and the Industrial
business segment are now reported similarly to dual credit.
Centralization of manufacturing and supply technology platforms
-
Certain shared film manufacturing and supply technology platform
resources formerly reflected within the Electronics and Energy
business segment were combined with other shared and centrally managed
material resource centers of expertise within Corporate and
Unallocated.
In addition, 3M adopted ASU No. 2017-07, Improving the Presentation
of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,
effective January 1, 2018, on a retrospective basis. As a result,
operating income for 3M’s business segments has been revised to reflect
non-service cost components of pension and postretirement net periodic
benefit costs within other expense (income) net.
The financial information presented herein reflects the impact of the
preceding changes for all periods presented. Refer to 3M’s Current
Report on Form 8-K furnished on March 15, 2018, for additional
supplemental unaudited historical business segment net sales and
operating income information. In addition, these business segment
changes were reflected in 3M’s Current Report on Form 8-K dated May 8,
2018, (which updated 3M’s 2017 Annual Report on Form 10-K) and 3M’s
Quarterly Report on Form 10-Q for the periods ended March 31, 2018, June
30, 2018, and September 30, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS SEGMENT INFORMATION
|
|
|
Three months ended
|
|
|
Year ended
|
|
NET SALES
|
|
|
December 31,
|
|
|
December 31,
|
|
(Millions)
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
|
$
|
2,952
|
|
|
|
$
|
2,961
|
|
|
|
$
|
12,267
|
|
|
|
$
|
11,866
|
|
|
Safety and Graphics
|
|
|
|
1,569
|
|
|
|
|
1,565
|
|
|
|
|
6,827
|
|
|
|
|
6,235
|
|
|
Health Care
|
|
|
|
1,520
|
|
|
|
|
1,484
|
|
|
|
|
6,021
|
|
|
|
|
5,853
|
|
|
Electronics and Energy
|
|
|
|
1,342
|
|
|
|
|
1,405
|
|
|
|
|
5,472
|
|
|
|
|
5,501
|
|
|
Consumer
|
|
|
|
1,211
|
|
|
|
|
1,210
|
|
|
|
|
4,796
|
|
|
|
|
4,731
|
|
|
Corporate and Unallocated
|
|
|
|
3
|
|
|
|
|
(3
|
)
|
|
|
|
50
|
|
|
|
|
3
|
|
|
Elimination of Dual Credit
|
|
|
|
(652
|
)
|
|
|
|
(632
|
)
|
|
|
|
(2,668
|
)
|
|
|
|
(2,532
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
|
|
|
$
|
7,945
|
|
|
|
$
|
7,990
|
|
|
|
$
|
32,765
|
|
|
|
$
|
31,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS SEGMENT INFORMATION
|
|
|
Three months ended
|
|
|
Year ended
|
|
OPERATING INCOME
|
|
|
December 31,
|
|
|
December 31,
|
|
(Millions)
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
|
$
|
627
|
|
|
|
$
|
580
|
|
|
|
$
|
2,737
|
|
|
|
$
|
2,490
|
|
|
Safety and Graphics
|
|
|
|
345
|
|
|
|
|
405
|
|
|
|
|
1,720
|
|
|
|
|
2,066
|
|
|
Health Care
|
|
|
|
458
|
|
|
|
|
460
|
|
|
|
|
1,799
|
|
|
|
|
1,764
|
|
|
Electronics and Energy
|
|
|
|
396
|
|
|
|
|
366
|
|
|
|
|
2,055
|
|
|
|
|
1,377
|
|
|
Consumer
|
|
|
|
257
|
|
|
|
|
272
|
|
|
|
|
1,027
|
|
|
|
|
1,004
|
|
|
Corporate and Unallocated (f)
|
|
|
|
(136
|
)
|
|
|
|
(139
|
)
|
|
|
|
(1,465
|
)
|
|
|
|
(395
|
)
|
|
Elimination of Dual Credit
|
|
|
|
(164
|
)
|
|
|
|
(155
|
)
|
|
|
|
(666
|
)
|
|
|
|
(614
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
|
|
|
$
|
1,783
|
|
|
|
$
|
1,789
|
|
|
|
$
|
7,207
|
|
|
|
$
|
7,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f)
|
|
Corporate and Unallocated operating income was impacted of certain
restructuring actions related to addressing corporate functional
costs following the Communication Markets Division divestiture
recorded in the second and fourth quarter of 2018. These actions, in
addition to the legal settlement recorded in the first quarter of
2018, impacted 2018 operating income.
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About 3M
At 3M, we apply science in collaborative ways to
improve lives daily. With $33 billion in sales, our 93,000 employees
connect with customers all around the world. Learn more about 3M’s
creative solutions to the world’s problems at www.3M.com
or on Twitter @3M or @3MNews.
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3M
Investor Contact:
Bruce Jermeland,
651-733-1807
or
Tony Riter, 651-733-1141
or
Media
Contact:
Lori Anderson, 651-733-0831
Source: 3M