REG - 3M Company - Half Yearly Report <Origin Href="QuoteRef">MMM.N</Origin> - Part 8
29/10/2014 09:35
- Part 8: For the preceding part double click ID:nRSA0731Og
2014, compared to $718
million in the first six months of 2013. The Company expects 2014 capital spending to be approximately $1.5 billion to $1.6
billion, as 3M continues to invest in its businesses. This has been reduced from a previous estimate of $1.7 billion to
$1.8 billion as 3M's portfolio management efforts are providing greater clarity regarding business unit capital needs. 3M's
long-term view is that capital spending will continue to be in line with historical averages (when measured as a percent of
sales). In 2013, 3M continued its expansion of manufacturing capacity in key markets, including investments in the U.S.,
China, Germany, and Brazil. This included significant investments across 3M's many businesses, such as abrasives,
industrial adhesives and tapes, advanced materials, electronics-related, infection prevention, and other businesses. 3M
continued its investments in IT systems and infrastructure, including ongoing phased implementation of an ERP system on a
worldwide basis over the next several years. In addition, 3M is sustaining existing facilities through general maintenance,
cost reduction, and compliance efforts.
3M is striving to increase its manufacturing and sourcing capacity, particularly in developing economies, in order to more
closely align its production capability with its sales in major geographic regions. The initiative is expected to help
improve customer service, lower transportation costs, and reduce working capital requirements. 3M will continue to make
investments in critical emerging markets, such as China, Brazil, Poland and India, including plans to establish and begin
production in a new wholly-owned manufacturing entity in India to serve as a source of supply to 3M's business in India and
in other countries.
Proceeds from sale of PP&E and other assets totaled $38 million in the first six months of 2014 compared to $18 million in
the same period last year. Apart from the normal periodic sales of PP&E, the second quarter and first six months of 2014
included proceeds of $31 million related to the sale of real estate.
Refer to Note 2 for information on acquisitions and divestitures. The Company is actively considering additional
acquisitions, investments and strategic alliances, and from time to time may also divest certain businesses.
Purchases of marketable securities and investments and proceeds from maturities and sale of marketable securities and
investments are primarily attributable to asset-backed securities, agency securities, corporate medium-term note securities
and other securities, which are classified as available-for-sale. Interest rate risk and credit risk related to the
underlying collateral may impact the value of investments in asset-backed securities, while factors such as general
conditions in the overall credit market and the nature of the underlying collateral may affect the liquidity of investments
in asset-backed securities. The coupon interest rates for asset-backed securities are either fixed rate or floating.
Floating rate coupons reset monthly or quarterly based upon the corresponding monthly or quarterly LIBOR rate. Each
individual floating rate security has a coupon based upon the respective LIBOR rate +/- an amount reflective of the credit
risk of the issuer and the underlying collateral on the original issue date. Terms of the reset are unique to individual
securities. Fixed rate coupons are established at the time the security is issued and are based upon a spread to a related
maturity treasury bond. The spread against the treasury bond is reflective of the credit risk of the issuer and the
underlying collateral on the original issue date. 3M does not currently expect risk related to its holdings in asset-backed
securities to materially impact its financial condition or liquidity. Refer to Note 6 for more details about 3M's
diversified marketable securities portfolio, which totaled $2.088 billion as of June 30, 2014. Purchases of investments
include additional survivor benefit insurance, plus cost method and equity investments.
Cash Flows from Financing Activities:
Six months ended
June 30,
(Millions) 2014 2013
Change in short-term debt - net $ 62 $ (12)
Repayment of debt (maturities greater than 90 days) (119) (12)
Proceeds from debt (maturities greater than 90 days) 1,078 11
Total cash change in debt $ 1,021 $ (13)
Purchases of treasury stock (3,134) (1,995)
Proceeds from issuances of treasury stock pursuant to stock option and benefit plans 585 1,103
Dividends paid to stockholders (1,122) (876)
Excess tax benefits from stock-based compensation 97 51
Other - net (31) 3
Net cash used in financing activities $ (2,584) $ (1,727)
Total debt at June 30, 2014 was $7.0 billion, up from $6.0 billion at year-end 2013. Total debt was 28 percent of total
capital (total capital is defined as debt plus equity) at June 30, 2014, compared to 25 percent of total capital at
year-end 2013. Changes in short-term debt for the six months ended June 30, 2014 primarily related to bank borrowings by
international subsidiaries. Repayment of debt for the six months ended June 30, 2014 primarily includes repayment of 36
million British Pound related to the three-year 66 million British Pound committed credit facility agreement entered into
in December 2012, and repayment of other international debt. Proceeds from debt for the six months ended June 30, 2014
primarily related to the June 2014 issuance of$625 million aggregate principal amount of five-year fixed rate medium-term
notes due 2019 and $325 million aggregate principal amount of thirty-year fixed rate medium-term notes due 2044 (refer to
Note 7 for more detail). In addition, proceeds from debt for the six months ended June 30, 2014 also include bank
borrowings by international subsidiaries and parent company debt.
Repurchases of 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, which replaced the Company's February 2013 repurchase program. This authorization has no
pre-established end date. In the first six months of 2014, the Company purchased $3.134 billion of stock, compared to
$1.995 billion in the first six months of 2013. The Company expects full-year 2014 gross share repurchases will be in the
range of $4.5 billion to $5.0 billion. 3M's significant share purchases are enabled by its continued business growth and
consistently strong cash flow, the well-funded status of its pension plans, and the strength of the Company's capital
structure. For more information, refer to the table titled "Issuer Purchases of Equity Securities" in Part II, Item 5. The
Company does not utilize derivative instruments linked to the Company's stock.
Cash dividends paid to shareholders totaled $1.122 billion in the first six months of 2014, compared to $876 million in the
first six months of 2013. 3M has paid dividends each year since 1916. In December 2013, 3M's Board of Directors declared a
first-quarter 2014 dividend of $0.855 per share, an increase of 35 percent. This is equivalent to an annual dividend of
$3.42 per share and marked the 56th consecutive year of dividend increases.
In addition to the items described below, other cash flows from financing activities may include various other items, such
as distributions to or sales of noncontrolling interests, changes in cash overdraft balances, and principal payments for
capital leases.
In March 2013, 3M sold shares in 3M India Limited, a subsidiary of the Company, in return for $8 million. The
noncontrolling interest shares of this subsidiary trade on a public exchange in India. This sale of shares complied with an
amendment to Indian securities regulations that required 3M India Limited, as a listed company, to achieve a minimum public
shareholding of at least 25 percent. As a result of this transaction, 3M's ownership in 3M India Limited was reduced from
76 percent to 75 percent. The $8 million received in the first quarter of 2013 was classified as other financing activity
in the consolidated statement of cash flows. Because the Company retained its controlling interest, the sale resulted in an
increase in 3M Company shareholders' equity of $7 million and an increase in noncontrolling interest of $1 million.
In April 2014, 3M purchased the remaining noncontrolling interest in a consolidated 3M subsidiary for an immaterial amount,
which was classified as other financing activity in the consolidated statement of cash flows.
In July 2014, 3M announced that it will acquire (via Sumitomo 3M Limited) Sumitomo Electric Industries, Ltd.'s 25 percent
interest in 3M's consolidated Sumitomo 3M Limited subsidiary for 90 billion Japanese Yen (approximately $885 million at
announcement date exchange rates). Upon completion of the transaction, 3M will own 100 percent of Sumitomo 3M Limited. The
transaction is expected to close on September 1, 2014 and will be reflected as a financing activity in the consolidated
statement of cash flows.
CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Part I, Item 2, contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. The Company may also make forward-looking statements in other reports filed with the Securities and
Exchange Commission, in materials delivered to shareholders and in press releases. In addition, the Company's
representatives may from time to time make oral forward-looking statements.
Forward-looking statements relate to future events and typically address the Company's expected future business and
financial performance. Words such as "plan," "expect," "aim," "believe," "project," "target," "anticipate," "intend,"
"estimate," "will," "should," "could" and other words and terms of similar meaning, typically identify such forward-looking
statements. In particular, these include, among others, statements relating to
· the Company's strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of
financial performance, and market position,
· worldwide economic and capital markets conditions, such as interest rates, foreign currency exchange rates,
financial conditions of our suppliers and customers, and natural and other disasters affecting the operations of the
Company or our suppliers and customers,
· new business opportunities, product development, and future performance or results of current or anticipated
products,
· the scope, nature or impact of acquisition, strategic alliance and divestiture activities,
· the outcome of contingencies, such as legal and regulatory proceedings,
· future levels of indebtedness, common stock repurchases and capital spending,
· future availability of and access to credit markets,
· pension and postretirement obligation assumptions and future contributions, asset impairments, tax liabilities,
information technology security, and
· the effects of changes in tax, environmental and other laws and regulations in the United States and other
countries in which we operate.
The Company assumes no obligation to update or revise any forward-looking statements.
Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject
to risks and uncertainties. Actual future results and trends may differ materially from historical results or those
reflected in any such forward-looking statements depending on a variety of factors. Important information as to these
factors can be found in this document, including, among others, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" under the headings of "Overview," "Financial Condition and Liquidity" and annually in
"Critical Accounting Estimates." Discussion of these factors is incorporated by reference from Part II, Item 1A, "Risk
Factors," of this document, and should be considered an integral part of Part I, Item 2, "Management's Discussion and
Analysis of Financial Condition and Results of Operations." For additional information concerning factors that may cause
actual results to vary materially from those stated in the forward-looking statements, see our reports on Form 10-K, 10-Q
and 8-K filed with the SEC from time to time.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
In the context of Item 3, 3M is exposed to market risk due to the risk of loss arising from adverse changes in foreign
currency exchange rates, interest rates and commodity prices. Changes in those factors could cause fluctuations in earnings
and cash flows. For a discussion of sensitivity analysis related to these types of market risks, refer to Part II, Item 7A,
Quantitative and Qualitative Disclosures About Market Risk, in 3M's Current Report on Form 8-K dated May 15, 2014 (which
updated 3M's 2013 Annual Report on Form 10-K). There have been no material changes in information that would have been
provided in the context of Item 3 from the end of the preceding year until June 30, 2014. However, the Company does provide
risk management discussion in various places in this Quarterly Report on Form 10-Q, primarily in the Derivatives note.
Item 4. Controls and Procedures.
a. The Company carried out an evaluation, under the supervision and with the participation of its management, including the
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's
"disclosure controls and procedures" (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by
this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective.
b. There was no change in the Company's internal control over financial reporting that occurred during the Company's most
recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
The Company is implementing an enterprise resource planning ("ERP") system on a worldwide basis, which is expected to
improve the efficiency of certain financial and related transaction processes. The gradual implementation is expected to
occur in phases over the next several years. The implementation of a worldwide ERP system will likely affect the processes
that constitute our internal control over financial reporting and will require testing for effectiveness.
The Company completed implementation with respect to elements of certain processes/sub-processes in limited
subsidiaries/locations and will continue to roll-out the ERP system over the next several years. As with any new
information technology application we implement, this application, along with the internal controls over financial
reporting included in this process, was appropriately considered within the testing for effectiveness with respect to the
implementation in these instances. We concluded, as part of our evaluation described in the above paragraphs, that the
implementation of ERP in these circumstances has not materially affected our internal control over financial reporting.
3M COMPANY
FORM 10-Q
For the Quarterly Period Ended June 30, 2014
PART II. Other Information
Item 1. Legal Proceedings.
Discussion of legal matters is incorporated by reference from Part I, Item 1, Note 11, "Commitments and Contingencies" of
this document, and should be considered an integral part of Part II, Item 1, "Legal Proceedings."
Item 1A. Risk Factors.
Provided below is a cautionary discussion of what we believe to be the most important risk factors applicable to the
Company. Discussion of these factors is incorporated by reference into and considered an integral part of Part I, Item 2,
"Management's Discussion and Analysis of Financial Conditions and Results of Operations."
* Results are impacted by the effects of, and changes in, worldwide economic and capital markets conditions. The Company
operates in more than 70 countries and derives approximately two-thirds of its revenues from outside the United States. The
Company's business is subject to global competition and may be adversely affected by factors in the United States and other
countries that are beyond its control, such as disruptions in financial markets, economic downturns in the form of either
contained or widespread recessionary conditions, elevated unemployment levels, sluggish or uneven recovery, in specific
countries or regions, or in the various industries in which the Company operates; social, political or labor conditions in
specific countries or regions; natural and other disasters affecting the operations of the Company or its customers and
suppliers; or adverse changes in the availability and cost of capital, interest rates, tax rates, or regulations in the
jurisdictions in which the Company operates.
* The Company's credit ratings are important to 3M's cost of capital. The major rating agencies routinely evaluate the
Company's credit profile and assign debt ratings to 3M. The Company currently has an AA- credit rating, with a stable
outlook, from Standard & Poor's and an Aa2 credit rating, with a stable outlook, from Moody's Investors Service. This
evaluation is based on a number of factors, which include financial strength, business and financial risk, as well as
transparency with rating agencies and timeliness of financial reporting. The Company's current ratings have served to lower
3M's borrowing costs and facilitate access to a variety of lenders. 3M's transition to a more optimized capital structure,
financed with additional low-cost debt, could impact 3M's credit rating in the future. Failure to maintain strong
investment grade ratings would adversely affect the Company's cost of funds and could adversely affect liquidity and access
to capital markets.
* The Company's results are affected by competitive conditions and customer preferences. Demand for the Company's products,
which impacts revenue and profit margins, is affected by (i) the development and timing of the introduction of competitive
products; (ii) the Company's response to downward pricing to stay competitive; (iii) changes in customer order patterns,
such as changes in the levels of inventory maintained by customers and the timing of customer purchases which may be
affected by announced price changes, changes in the Company's incentive programs, or the customer's ability to achieve
incentive goals; and (iv) changes in customers' preferences for our products, including the success of products offered by
our competitors, and changes in customer designs for their products that can affect the demand for some of the Company's
products.
* Foreign currency exchange rates and fluctuations in those rates may affect the Company's ability to realize projected
growth rates in its sales and earnings. Because the Company's financial statements are denominated in U.S. dollars and
approximately two-thirds of the Company's revenues are derived from outside the United States, the Company's results of
operations and its ability to realize projected growth rates in sales and earnings could be adversely affected if the U.S.
dollar strengthens significantly against foreign currencies.
* The Company's growth objectives are largely dependent on the timing and market acceptance of its new product offerings,
including its ability to continually renew its pipeline of new products and to bring those products to market. This ability
may be adversely affected by difficulties or delays in product development, such as the inability to identify viable new
products, obtain adequate intellectual property protection, or gain market acceptance of new products. There are no
guarantees that new products will prove to be commercially successful.
* The Company's future results are subject to fluctuations in the costs and availability of purchased components,
compounds, raw materials and energy, including oil and natural gas and their derivatives, due to shortages, increased
demand, supply interruptions, currency exchange risks, natural disasters and other factors. The Company depends on various
components, compounds, raw materials, and energy (including oil and natural gas and their derivatives) supplied by others
for the manufacturing of its products. It is possible that any of its supplier relationships could be interrupted due to
natural and other disasters and other events, or be terminated in the future. Any sustained interruption in the Company's
receipt of adequate supplies could have a material adverse effect on the Company. In addition, while the Company has a
process to minimize volatility in component and material pricing, no assurance can be given that the Company will be able
to successfully manage price fluctuations or that future price fluctuations or shortages will not have a material adverse
effect on the Company.
* Acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and
other evolving business strategies, and possible organizational restructuring could affect future results. The Company
monitors its business portfolio and organizational structure and has made and may continue to make acquisitions, strategic
alliances, divestitures and changes to its organizational structure. With respect to acquisitions, future results will be
affected by the Company's ability to integrate acquired businesses quickly and obtain the anticipated synergies.
* The Company's future results may be affected if the Company generates fewer productivity improvements than estimated. The
Company utilizes various tools, such as Lean Six Sigma, to improve operational efficiency and productivity. There can be no
assurance that all of the projected productivity improvements will be realized.
* The Company employs information technology systems to support its business, including ongoing phased implementation of an
enterprise resource planning (ERP) system on a worldwide basis over the next several years. Security breaches and other
disruptions to the Company's information technology infrastructure could interfere with the Company's operations,
compromise information belonging to the Company and its customers and suppliers, and expose the Company to liability which
could adversely impact the Company's business and reputation. In the ordinary course of business, the Company relies on
information technology networks and systems, some of which are managed by third parties, to process, transmit and store
electronic information, and to manage or support a variety of business processes and activities. Additionally, the Company
collects and stores certain data, including proprietary business information, and may have access to confidential or
personal information in certain of our businesses that is subject to privacy and security laws, regulations and
customer-imposed controls. Despite our cybersecurity measures (including employee and third-party training, monitoring of
networks and systems, and maintenance of backup and protective systems) which are continuously reviewed and upgraded, the
Company's information technology networks and infrastructure may still be vulnerable to damage, disruptions or shutdowns
due to attack by hackers or breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or
utility failures, systems failures, natural disasters or other catastrophic events. 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.
* The Company's future results may be affected by various legal and regulatory proceedings and legal compliance risks,
including those involving product liability, antitrust, 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 11 "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 2013, 3M's Board of Directors authorized the repurchase of up to $7.5 billion of 3M's
outstanding common stock, with no pre-established end date. In February 2014, 3M's Board of Directors replaced the
Company's February 2013 repurchase program with a new repurchase program. This new program authorizes the repurchase of up
to $12 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)
Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (Millions)
January 1-31, 2014 2,152,171 $ 134.07 2,148,754 $ 2,229
February 1-28, 2014 5,058,426 $ 130.79 5,058,426 $ 11,338
March 1-31, 2014 5,789,597 $ 132.90 5,786,921 $ 10,569
Total January 1-March 31, 2014 13,000,194 $ 132.27 12,994,101 $ 10,569
April 1-30, 2014 4,615,353 $ 135.93 4,607,663 $ 9,943
May 1-31, 2014 2,619,394 $ 141.05 2,613,100 $ 9,574
June 1-30, 2014 2,674,367 $ 143.80 2,674,367 $ 9,190
Total April 1-June 30, 2014 9,909,114 $ 139.41 9,895,130 $ 9,190
Total January 1-June 30, 2014 22,909,308 $ 135.36 22,889,231 $ 9,190
(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 10.39 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) Bylaws, as amended as of February 10, 2009, are incorporated by reference from our Form 8-K dated February 12, 2009.
(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 2008 Long-Term Incentive Plan (including amendments through February 2012) is incorporated by reference from our Proxy Statement for the 2012 Annual Meeting of Stockholders.
(10.2) (10.3) Amendment of the 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2013.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.
(10.4) 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.
(10.5) 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.
(10.6) 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.
(10.7) 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.
(10.8) 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.
(10.9) Amendment of the 3M 2005 Management Stock Ownership Program and the 3M 2008 Long-term Incentive Plan - transfer of stock options to former spouses, is incorporated by reference from our Form 10-K for the year ended December 31, 2010.
(10.10) 3M 2005 Management Stock Ownership Program is incorporated by reference from our Proxy Statement for the 2005 Annual Meeting of Stockholders.
(10.11) 3M 2002 Management Stock Ownership Program is incorporated by reference from our Proxy Statement for the 2002 Annual Meeting of Stockholders.
(10.12) Amendments of 3M 2002 and 2005 Management Stock Ownership Programs are incorporated by reference from our Form 8-K dated November 14, 2008.
(10.13) 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.
(10.14) Form of award agreement for non-qualified stock options granted under the 2002 Management Stock Ownership Program, is incorporated by reference from our Form 10-K for the year ended December 31, 2004.
(10.15) 3M 1997 General Employees' Stock Purchase Plan, as amended through November 8, 2004, is incorporated by reference from our Form 10-K for the year ended December 31, 2004.
(10.16) 3M Board resolution dated May 12, 2009, regarding three-year extension of 3M 1997 General Employees' Stock Purchase Plan is incorporated by reference from our Form 10-Q for the quarter ended June 30, 2009.
(10.17) Amendment of the 3M 1997 General Employees Stock Purchase Plan approved on February 9, 2010 is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.18) 3M Board resolution dated February 7, 2012 extending for three additional one-year periods the General Employees' Stock Purchase Plan, is incorporated by reference from our Form 10-K for the year ended December 31, 2011.
(10.19) 3M 2012 Amended and Restated General Employees Stock Purchase Plan is incorporated by reference from our Proxy Statement for the 2012 Annual Meeting of Shareholders.
(10.20) 3M VIP Excess Plan is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.21) Amendment of 3M VIP Excess Plan is incorporated by reference from our Form 8-K dated November 24, 2009.
(10.22) 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.
(10.23) Amendment of 3M VIP Plus is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.24) 3M Deferred Compensation Plan, as amended through February 2008, is incorporated by reference from our Form 8-K dated February 14, 2008.
(10.25) Amendment of 3M Deferred Compensation Plan is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.26) 3M Deferred Compensation Excess Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.27) 3M Performance Awards Deferred Compensation Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.28) 3M Executive Annual Incentive Plan is incorporated by reference from our Form 8-K dated May 14, 2007.
(10.29) Description of changes to 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated August 8, 2005.
(10.30) 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.
(10.31) Amendment of 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.32) 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.
(10.33) 3M Executive Life Insurance Plan, as amended, is incorporated by reference from our Form 10-K for the year ended December 31, 2003.
(10.34) 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.
(10.35) 3M policy on reimbursement of incentive payments is incorporated by reference from our Form 10-K for the year ended December 31, 2006.
(10.36) Amended and Restated 3M Nonqualified Pension Plan I is incorporated by reference from our Form 8-K dated December 23, 2008.
(10.37) Amended and Restated 3M Nonqualified Pension Plan II is incorporated by reference from our Form 8-K dated December 23, 2008.
(10.38) 3M Nonqualified Pension Plan III is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.39) Policy on Reimbursement of Incentive Compensation (effective May 11, 2010) is incorporated by reference from our Form 10-Q dated August 4, 2010.
(10.40) Amended and restated five-year credit agreement as of September 28, 2012, is incorporated by reference from our Form 8-K dated October 3, 2012.
(10.41) Letter of credit agreement as of August 23, 2013 is incorporated by reference from our Form 8-K dated August 27, 2013.
(10.42) 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 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 June 30, 2014, filed with the SEC on July 31, 2014, formatted in
Extensible Business Reporting Language (XBRL): (i) the Consolidated Statement of Income for the three-month and six-month periods ended June 30, 2014 and 2013, (ii) the
Consolidated Statement of Comprehensive Income for the three-month and six-month periods ended June 30, 2014 and 2013 (iii) the Consolidated Balance Sheet at June 30,
2014 and December 31, 2013, (iv) the Consolidated Statement of Cash Flows for the six-month periods ended June 30, 2014 and 2013, 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: July 31, 2014
By /s/ Nicholas C. Gangestad
Nicholas C. Gangestad,
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)
Six months ended
June 30, Year Year Year Year Year
2014 2013 2012 2011 2010 2009
EARNINGS
Income before income taxes* $ 3,508 $ 6,562 $ 6,351 $ 6,031 $ 5,755 $ 4,632
Add:
Interest expense
(including amortization of capitalized interest) 93 166 191 206 220 236
Interest component of the ESOP benefit expense - - - - - 1
Portion of rent under operating leases representative of
the interest component 52 103 92 85 81 76
Less:
Equity in undistributed income of 20-50% owned companies (1) (1) 3 4 4 4
TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES $ 3,654 $ 6,832 $ 6,631 $ 6,318 $ 6,052 $ 4,941
FIXED CHARGES
Interest on debt (including capitalized interest) 90 166 194 206 218 246
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