REG - 3M Company - 3rd Quarter Results <Origin Href="QuoteRef">MMM.N</Origin> - Part 8
02/11/2016 07:07
- Part 8: For the preceding part double click ID:nRSB0531Og
possible for such vulnerabilities to remain undetected for an extended period, up to and
including several years. While we have experienced, and expect to continue to experience, these types of threats to the
Company's information technology networks and infrastructure, none of them to date has had a material impact to the
Company. There may be other challenges and risks as the Company upgrades and standardizes its ERP system on a worldwide
basis. Any such events could result in legal claims or proceedings, liability or penalties under privacy laws, disruption
in operations, and damage to the Company's reputation, which could adversely affect the Company's business. Although the
Company maintains insurance coverage for various cybersecurity risks, there can be no guarantee that all costs or losses
incurred will be fully insured.
* The Company's defined benefit pension and postretirement plans are subject to financial market risks that could adversely
impact our results. The performance of financial markets and discount rates impact the Company's funding obligations under
its defined benefit plans. Significant changes in market interest rates, decreases in the fair value of plan assets and
investment losses on plan assets, and relevant legislative or regulatory changes relating to defined benefit plan funding
may increase the Company's funding obligations and adversely impact its results of operations and cash flows.
* The Company's future results may be affected by various legal and regulatory proceedings and legal compliance risks,
including those involving product liability, antitrust, intellectual property, environmental, the U.S. Foreign Corrupt
Practices Act and other anti-bribery, anti-corruption, or other matters. The outcome of these legal proceedings may differ
from the Company's expectations because the outcomes of litigation, including regulatory matters, are often difficult to
reliably predict. Various factors or developments can lead the Company to change current estimates of liabilities and
related insurance receivables where applicable, or make such estimates for matters previously not susceptible of reasonable
estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments
or changes in applicable law. A future adverse ruling, settlement or unfavorable development could result in future charges
that could have a material adverse effect on the Company's results of operations or cash flows in any particular period.
For a more detailed discussion of the legal proceedings involving the Company and the associated accounting estimates, see
the discussion in Note 12 "Commitments and Contingencies" within the Notes to Consolidated Financial Statements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
Repurchases of 3M common stock are made to support the Company's stock-based employee compensation plans and for other
corporate purposes. In February 2014, 3M's Board of Directors authorized the repurchase of up to $12 billion of 3M's
outstanding common stock, with no pre-established end date. In February 2016, 3M's Board of Directors replaced the
Company's February 2014 repurchase program with a new program. This new program authorizes the repurchase of up to $10
billion of 3M's outstanding common stock, with no pre-established end date.
Issuer Purchases of Equity
Securities (registered pursuant to
Section 12 of the Exchange Act)
Maximum
Approximate
Dollar Value of
Total Number of Shares that May
Shares Purchased Yet Be Purchased
Total Number of Average Price as Part of Publicly under the Plans
Shares Purchased Paid per Announced Plans or Programs
Period (1) Share or Programs (2) (Millions)
January 1-31, 2016 4,867,209 $ 141.70 4,867,019 $ 777
February 1-29, 2016 1,593,234 $ 153.47 1,590,500 $ 9,756
March 1-31, 2016 1,094,083 $ 162.58 1,091,293 $ 9,578
Total January 1-March 31, 2016 7,554,526 $ 147.21 7,548,812 $ 9,578
April 1-30, 2016 1,543,073 $ 167.78 1,538,003 $ 9,320
May 1-31, 2016 1,695,626 $ 167.90 1,695,200 $ 9,036
June 1-30, 2016 1,712,490 $ 169.72 1,712,490 $ 8,745
Total April 1-June 30, 2016 4,951,189 $ 168.49 4,945,693 $ 8,745
July 1-31, 2016 1,351,737 $ 178.63 1,351,044 $ 8,504
August 1-31, 2016 1,529,161 $ 179.33 1,528,801 $ 8,230
September 1-30, 2016 1,416,264 $ 177.68 1,416,264 $ 7,978
Total July 1-September 30, 2016 4,297,162 $ 178.57 4,296,109 $ 7,978
Total January 1-September 30, 2016 16,802,877 $ 161.50 16,790,614 $ 7,978
(1) The total number of shares purchased includes: (i) shares purchased under the Board's authorizations described above,
and (ii) shares purchased in connection with the exercise of stock options.
(2) The total number of shares purchased as part of publicly announced plans or programs includes shares purchased under
the Board's authorizations described above.
Item 3. Defaults Upon Senior Securities. - No matters require disclosure.
Item 4. Mine Safety Disclosures. Pursuant to Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(the "Act"), the Company is required to disclose, in connection with the mines it operates, information concerning mine
safety violations or other regulatory matters in its periodic reports filed with the SEC. The information concerning mine
safety violations or other regulatory matters required by Section 1503(a) of the Act is included in Exhibit 95 to this
quarterly report.
Item 5. Other Information. - No matters require disclosure.
Item 6. Exhibits.
Exhibits. These exhibits are either incorporated by reference into this report or filed herewith with this report. Exhibit
numbers 10.1 through 10.34 are management contracts or compensatory plans or arrangements.
Index to Exhibits:
(3) Articles of Incorporation and bylaws
(3.1) Certificate of incorporation, as amended as of May 11, 2007, is incorporated by reference from our Form 8-K dated May 14, 2007.
(3.2) Amended and Restated Bylaws, as adopted as of November 10, 2015, are incorporated by reference from our Form 8-K dated November 10, 2015.
(4) Instruments defining the rights of security holders, including indentures:
(4.1) Indenture, dated as of November 17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M's senior debt securities, is incorporated by reference from our Form 8-K dated December 7, 2000.
(4.2) First Supplemental Indenture, dated as of July 29, 2011, to Indenture dated as of November 17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M's senior debt securities, is incorporated by reference from our Form 10-Q for the quarter ended June 30, 2011.
(10) Material contracts and management compensation plans and arrangements:
(10.1) 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.2) Form of Stock Option Award Agreement under 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.3) Form of Stock Appreciation Right Award Agreement under 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.4) Form of Restricted Stock Unit Award Agreement under 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.5) Form of Performance Share Award Agreement under 3M Company 2016 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 12, 2016.
(10.6) 3M 2008 Long-Term Incentive Plan (including amendments through February 2, 2016) is incorporated by reference from our Form 10-K for the year ended December 31, 2015.
(10.7) Form of Agreement for Stock Option Grants to Executive Officers under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 13, 2008.
(10.8) Form of Stock Option Agreement for options granted to Executive Officers under the 3M 2008 Long-Term Incentive Plan, commencing February 9, 2010, is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.9) Form of Restricted Stock Unit Agreement for restricted stock units granted to Executive Officers under the 3M Long-Term Incentive Plan, effective February 9, 2010, is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.10) Form of 3M 2010 Performance Share Award under the 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated March 4, 2010.
(10.11) Form of Stock Option Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.12) Form of Restricted Stock Unit Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.13) 3M 2005 Management Stock Ownership Program (including amendments through February 2, 2016) is incorporated by reference from our Form 10-K for the year ended December 31, 2015.
(10.14) Form of award agreement for non-qualified stock options granted under the 2005 Management Stock Ownership Program, is incorporated by reference from our Form 8-K dated May 16, 2005.
(10.15) 3M VIP Excess Plan is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.16) Amendment of 3M VIP Excess Plan is incorporated by reference from our Form 8-K dated November 24, 2009.
(10.17) 3M VIP (Voluntary Investment Plan) Plus is incorporated by reference from Registration Statement No. 333-73192 on Form S-8, filed on November 13, 2001.
(10.18) Amendment of 3M VIP Plus is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.19) 3M Deferred Compensation Plan, as amended through February 2008, is incorporated by reference from our Form 8-K dated February 14, 2008.
(10.20) Amendment of 3M Deferred Compensation Plan is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.21) 3M Deferred Compensation Excess Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.22) 3M Performance Awards Deferred Compensation Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.23) 3M Executive Annual Incentive Plan is incorporated by reference from our Form 8-K dated May 14, 2007.
(10.24) Description of changes to 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated August 8, 2005.
(10.25) 3M Compensation Plan for Non-Employee Directors, as amended, through November 8, 2004, is incorporated by reference from our Form 10-K for the year ended December 31, 2004.
(10.26) Amendment of 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.27) Amendment of 3M Compensation Plan for Non-Employee Directors as of August 12, 2013, is incorporated by reference from our Form 10-Q for the quarter ended September 30, 2013.
(10.28) 3M Executive Life Insurance Plan, as amended, is incorporated by reference from our Form 10-K for the year ended December 31, 2003.
(10.29) Summary of Personal Financial Planning Services for 3M Executives is incorporated by reference from our Form 10-K for the year ended December 31, 2003.
(10.30) 3M policy on reimbursement of incentive payments is incorporated by reference from our Form 10-K for the year ended December 31, 2006.
(10.31) Amended and Restated 3M Nonqualified Pension Plan I is incorporated by reference from our Form 8-K dated December 23, 2008.
(10.32) Amended and Restated 3M Nonqualified Pension Plan II is incorporated by reference from our Form 8-K dated December 23, 2008.
(10.33) 3M Nonqualified Pension Plan III is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.34) Policy on Reimbursement of Incentive Compensation (effective May 11, 2010) is incorporated by reference from our Form 10-Q dated August 4, 2010.
(10.35) Amended and restated five-year credit agreement as of March 9, 2016, is incorporated by reference from our Form 8-K dated March 11, 2016.
(10.36) Registration Rights Agreement as of August 4, 2009, between 3M Company and State Street Bank and Trust Company as Independent Fiduciary of the 3M Employee Retirement Income Plan, is incorporated by reference from our Form 8-K dated August 5, 2009.
Filed herewith, in addition to items, if any, specifically identified above:
(12) Calculation of ratio of earnings to fixed charges.
(15) A letter from the Company's independent registered public accounting firm regarding unaudited interim consolidated financial statements.
(31.1) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(31.2) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.1) Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.2) Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(95) Mine Safety Disclosures.
(101) The following financial information from 3M Company's Quarterly Report on Form 10-Q for the period ended September 30, 2016, filed with the SEC on November 1, 2016,
formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statement of Income for the three-month and nine-month periods ended September 30, 2016
and 2015, (ii) the Consolidated Statement of Comprehensive Income for the three-month and nine-month periods ended September 30, 2016 and 2015 (iii) the Consolidated
Balance Sheet at September 30, 2016 and December 31, 2015, (iv) the Consolidated Statement of Cash Flows for the nine-month periods ended September 30, 2016 and 2015, and
(v) Notes to Consolidated Financial Statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
3M COMPANY
(Registrant)
Date: November 1, 2016
Senior Vice President and Chief Financial Officer
(Mr. Gangestad is the Principal Financial Officer and has
been duly authorized to sign on behalf of the Registrant.)
Senior Vice President and Chief Financial Officer
(Mr. Gangestad is the Principal Financial Officer and has
been duly authorized to sign on behalf of the Registrant.)
EXHIBIT 12
3M COMPANY AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions)
Nine months
ended
September 30, Year Year Year Year Year
2016 2015 2014 2013 2012 2011
EARNINGS
Income before income taxes $ 5,443 $ 6,823 $ 7,026 $ 6,562 $ 6,351 $ 6,031
Add:
Interest expense (including amortization of capitalized interest) 150 171 164 166 191 206
Portion of rent under operating leases representative of the interest component 74 101 104 103 92 85
Less:
Equity in undistributed income of 20-50% owned companies 6 5 (1) (1) 3 4
TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES $ 5,661 $ 7,090 $ 7,295 $ 6,832 $ 6,631 $ 6,318
FIXED CHARGES
Interest on debt (including capitalized interest) 141 162 159 166 194 206
Portion of rent under operating leases representative of the interest component 74 101 104 103 92 85
TOTAL FIXED CHARGES $ 215 $ 263 $ 263 $ 269 $ 286 $ 291
RATIO OF EARNINGS TO FIXED CHARGES 26.3 27.0 27.7 25.4 23.2 21.7
EXHIBIT 15
November 1, 2016
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Commissioners:
We are aware that our report dated November 1, 2016 on our review of interim financial information of 3M Company and its
subsidiaries for the three and nine month periods ended September 30, 2016 and 2015 and included in the Company's quarterly
report on Form 10-Q for the quarter ended September 30, 2016 is incorporated by reference in its Registration Statements on
Form S-8 (Registration Nos. 333-30689, 333-30691, 333-44760, 333-73192, 333-101727, 333-109282, 333-128251, 333-130150,
333-151039, 333-156626, 333-156627, 333-166908, 333-174562, 333-181269, 333-181270, and 333-211431) and Form S-3
(Registration Nos. 333-196003, 33-48089, 333-42660, and 333-109211) dated November 1, 2016.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
EXHIBIT 31.1
SARBANES-OXLEY SECTION 302 CERTIFICATION
I, Inge G. Thulin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of 3M Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;
4. The Registrant's other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred
during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over
financial reporting; and
5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
Registrant's internal control over financial reporting.
/s/ Inge G. Thulin
Inge G. Thulin
Chief Executive Officer
November 1, 2016
EXHIBIT 31.2
SARBANES-OXLEY SECTION 302 CERTIFICATION
I, Nicholas C. Gangestad, certify that:
1. I have reviewed this quarterly report on Form 10-Q of 3M Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;
4. The Registrant's other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred
during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over
financial reporting; and
5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
Registrant's internal control over financial reporting.
/s/ Nicholas C. Gangestad
Nicholas C. Gangestad
Chief Financial Officer
November 1, 2016
EXHIBIT 32.1
SARBANES-OXLEY SECTION 906 CERTIFICATION
In connection with the Quarterly Report of 3M Company (the "Company") on Form 10-Q for the period ended September 30, 2016
as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Inge G. Thulin, Chief Executive
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
/s/ Inge G. Thulin
Inge G. Thulin
Chief Executive Officer
November 1, 2016
EXHIBIT 32.2
SARBANES-OXLEY SECTION 906 CERTIFICATION
In connection with the Quarterly Report of 3M Company (the "Company") on Form 10-Q for the period ended September 30, 2016
as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Nicholas C. Gangestad, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ Nicholas C. Gangestad
Nicholas C. Gangestad
Chief Financial Officer
November 1, 2016
EXHIBIT 95
MINE SAFETY DISCLOSURES
For the third quarter of 2016, the Company has the following mine safety information to report in accordance with Section
1503(a) of the Act, in connection with the Pittsboro, North Carolina mine, the Little Rock, Arkansas mine, the Corona,
California mine, and the Wausau, Wisconsin mine (including Greystone Plant):
Received
Received Notice of
Total Dollar Value Notice of Potential to Aggregate
Mine or Operating Section of MSHA Total Number Pattern of Have Pattern Legal Actions Aggregate Legal Actions
Name/MSHA Section 104 Section 104(d) Section Section Assessments of Mining Violations Under Section Pending as of Legal Actions Resolved
Identification S&S Citations 104(b) Citations and 110(b)(2) 107(a) Proposed Related Under Section 104(e) Last Day of Initiated During During Period
Number (#) Orders (#) Orders (#) Violations (#) Orders (#) ($) Fatalities (#) 104(e) (yes/no) (yes/no) Period (#) Period (#) (#)
3M Pittsboro ID: 3102153 - - - - - $ 466 - No No -
3M Little Rock ID: 0300426 4 - - - - $ - - No No -
3M Corona Plant ID: 0400191 3 - - - - $ - - No No -
Greystone Plant ID: 4700119 - - - - - $ - - No No -
Wausau Plant ID: 4702918 - - - - - $ - - No No -
Total 7 - - - - $ 466 - - - -
This information is provided by RNS
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