3M Delivers Fourth-Quarter Sales of $7.4 Billion and Earnings of $1.41 per Share; Company Posts Record Full-Year Sales of $29.9

  3M Delivers Fourth-Quarter Sales of $7.4 Billion and Earnings of $1.41 per
  Share; Company Posts Record Full-Year Sales of $29.9 Billion and Earnings of
  $6.32 per Share

Business Wire

ST. PAUL, Minn. -- January 24, 2013

3M (NYSE: MMM) today reported fourth-quarter earnings of $1.41 per share, an
increase of 4.4 percent versus the fourth quarter of 2011. Operating income
was $1.4 billion and operating income margins for the quarter were 19.5
percent. Fourth-quarter net income was $1.0 billion and free cash flow was
$1.2 billion.

Sales rose 4.2 percent year-on-year to $7.4 billion, an all-time
fourth-quarter record. Organic local-currency sales grew 4.3 percent,
acquisitions added 0.9 percent to sales and currency impacts reduced sales by
1.0 percent year-on-year.

Organic local-currency sales growth was 8.7 percent in Consumer and Office,
8.3 percent in Display and Graphics, 5.9 percent in Health Care, 3.9 percent
in Industrial and Transportation and 1.8 percent in Electro and
Communications; Safety, Security and Protection Services declined 1.7 percent
year-on-year. On a geographic basis, organic local-currency sales grew 9.7
percent in Latin America/Canada, 5.8 percent in Asia Pacific, 5.2 percent in
the U.S. and declined 1.0 percent in EMEA (Europe, Middle East and Africa).

For the full year 2012, 3M posted record sales of $29.9 billion, up 1.0
percent year-on-year. Organic local-currency sales grew 2.6 percent and
acquisitions added 0.8 percent to sales. Foreign currency translation reduced
sales by 2.4 percent year-on-year.

Four of the company’s six business segments posted full-year organic
local-currency growth, led by Health Care at 4.7 percent and Industrial and
Transportation at 4.5 percent. Latin America/Canada was the fastest-growing
geographic region in 2012 at 10.9 percent followed by the U.S. at 4.2 percent.

Full-year 2012 earnings were $6.32 per share, an increase of 6.0 percent.
Operating margins were 21.7 percent and return on invested capital was 20
percent.

“Fourth-quarter was a good finish to a successful year for 3M,” said Inge G.
Thulin, 3M chairman, president and chief executive officer. “Our people
executed well in the face of challenging macroeconomic conditions and we have
built good momentum to innovate and move forward in 2013.”

3M affirmed its 2013 full-year performance expectations. The company
anticipates 2013 earnings to be in the range of $6.70 to $6.95 per share with
organic local-currency sales growth of 2 to 5 percent. 3M also expects free
cash flow conversion to be in the range of 90 to 100 percent.

Fourth-Quarter Business Segment Discussion

Industrial and Transportation

  *Sales of $2.5 billion, up 3.8 percent in U.S. dollars. Organic
    local-currency sales increased 3.9 percent, acquisitions (Ceradyne) added
    1.2 percent to sales and foreign currency translation reduced sales by 1.3
    percent.
  *On an organic local-currency basis:

       *Sales growth was strongest in liquid filtration, aerospace,
         industrial adhesives and tapes, abrasives and automotive OEM; both
         the advanced materials and the renewable energy businesses declined
         year-on-year.
       *Sales increased in Latin America/Canada, the U.S. and Asia Pacific
         and were flat in EMEA.

  *Operating income was $469 million, down 0.4 percent year-on-year;
    operating margin of 18.8 percent.

Health Care

  *Sales of $1.3 billion, up 5.6 percent in U.S. dollars. Organic
    local-currency sales increased 5.9 percent, acquisitions (CodeRyte) added
    0.5 percent and foreign currency translation reduced sales by 0.8 percent.
  *On an organic local-currency basis:

       *Sales increased in all businesses, with the strongest growth in food
         safety, health information systems, skin/wound care and oral care.
       *Positive sales growth in all major geographies, with double-digit
         growth in Latin America/Canada and Asia Pacific.

  *Operating income increased 10.8 percent to $430 million; operating margin
    of 32.3 percent.

Consumer and Office

  *Sales of $1.1 billion, up 7.7 percent in U.S. dollars. Organic
    local-currency sales increased 8.7 percent and foreign currency
    translation reduced sales by 1.0 percent.
  *On an organic local-currency basis:

       *Growth was led by consumer health care, DIY and stationery and office
         supplies.
       *Sales rose in all major geographies with double-digit growth in the
         U.S. and Latin America/Canada.

  *Operating income increased 28.8 percent to $230 million; operating margin
    of 21.0 percent.

Display and Graphics

  *Sales of $910 million, up 10.6 percent in U.S. dollars. Organic
    local-currency sales increased 8.3 percent, acquisitions (Federal Signal
    Technologies) added 3.2 percent and foreign currency translation reduced
    sales by 0.9 percent.
  *On an organic local-currency basis:

       *Sales increased at a double-digit rate in optical systems; sales also
         increased in architectural markets, traffic safety systems and
         commercial graphics.
       *Sales increased in Asia Pacific, Latin America/Canada and the U.S.
         and declined year-on-year in EMEA.

  *Operating income decreased 3.6 percent to $152 million; operating margin
    of 16.7 percent.

Safety, Security and Protection Services

  *Sales of $904 million, down 2.5 percent in U.S. dollars. Organic
    local-currency sales decreased 1.7 percent, divestitures reduced sales by
    0.1 percent and foreign currency translation reduced sales by 0.7 percent.
  *On an organic local-currency basis:

       *Sales growth was strongest in infrastructure protection, personal
         safety and roofing granules; sales declined year-on-year in security
         systems.
       *Sales increased in Latin America/Canada and Asia Pacific; sales
         declined in the U.S. and EMEA.

  *Operating income decreased 5.2 percent to $162 million; operating margin
    of 18.0 percent.

Electro and Communications

  *Sales of $776 million, up 1.0 percent in U.S. dollars. Organic
    local-currency sales increased 1.8 percent and foreign currency
    translation reduced sales by 0.8 percent.
  *On an organic local-currency basis:

       *Sales increased in both electrical and telecom markets, partially
         offset by a decline in consumer electronics-related businesses.
       *Sales increased in Latin America/Canada, the U.S. and Asia Pacific
         and declined year-on-year in EMEA.

  *Operating income of $142 million, down 6.5 percent; operating margin of
    18.4 percent.

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://investor.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.

  *Webcast replay:
    Go to 3M’s Investor Relations website at http://investor.3M.com and click
    on “Quarterly Earnings.”

  *Telephone replay:
    Call 800-633-8284 (for both U.S. and outside the U.S.; access code is
    21609530).
    The telephone replay will be available until 10:00 a.m. CST on January 29,
    2013.

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," "project," "intend," "plan," "believe,"
"will," "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 and capital
markets conditions and other factors beyond the Company's control, including
natural and other disasters 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)security breaches and other disruptions to the Company's information
technology infrastructure; and (10) legal proceedings, including significant
developments that could occur in the legal and regulatory proceedings
described in the Company's Annual Report on Form10-K for the year ended
December31, 2011, and its 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 PartI, Items 1 and 1A (Annual Report) and in
Part I, Item 2 and Part II, Item 1A (Quarterly Report). 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          Twelve-months ended
                         December 31,                December 31,
                         2012          2011          2012           2011
                                                                    
Net sales                $ 7,387      $ 7,089      $ 29,904      $ 29,611 
                                                                    
Operating expenses
Cost of sales              3,991         3,824         15,685         15,693
Selling, general and
administrative             1,535         1,522         6,102          6,170
expenses
Research,
development and           418         379         1,634        1,570  
related expenses
                                                                    
Total operating           5,944       5,725       23,421       23,433 
expenses
                                                                    
Operating income          1,443       1,364       6,483        6,178  
                                                                    
Interest expense and
income
Interest expense           44            45            171            186
Interest income           (10   )      (10   )      (39    )      (39    )
                                                                    
Total interest            34          35          132          147    
expense – net
                                                                    
Income before income       1,409         1,329         6,351          6,031
taxes
                                                                    
Provision for income      405         355         1,840        1,674  
taxes
                                                                    
Net income including
noncontrolling           $ 1,004      $ 974        $ 4,511       $ 4,357  
interest
                                                                    
Less: Net income
attributable to
noncontrolling            13          20          67           74     
interest
                                                                    
Net income               $ 991        $ 954        $ 4,444       $ 4,283  
attributable to 3M
                                                                    
Weighted average 3M
common shares
outstanding – basic        691.5         701.2         693.9          708.5
Earnings per share
attributable to
3M common                $ 1.43       $ 1.36       $ 6.40        $ 6.05   
shareholders – basic
                                                                    
Weighted average 3M
common shares
outstanding –              701.2         707.5         703.3          719.0
diluted
Earnings per share
attributable to
3M common
shareholders –           $ 1.41       $ 1.35       $ 6.32        $ 5.96   
diluted
                                                                    
Cash dividends paid      $ 0.59       $ 0.55       $ 2.36        $ 2.20   
per 3M common share
                                                                             


3M Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(Unaudited)
                                                  
                                          Dec. 31,     Dec. 31,
                                          2012         2011
ASSETS
Current assets
Cash and cash equivalents                 $ 2,883      $ 2,219
Marketable securities – current             1,648        1,461
Accounts receivable – net                   4,061        3,867
Inventories                                 3,837        3,416
Other current assets                       1,201       1,277
Total current assets                       13,630      12,240
Marketable securities – non-current         1,162        896
Investments                                 163          155
Property, plant and equipment – net         8,378        7,666
Goodwill and intangible assets – net        9,310        8,963
Prepaid pension benefits                    16           40
Other assets                               1,217       1,656
Total assets                              $ 33,876     $ 31,616
                                                       
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and
current portion of long-term debt         $ 1,085      $ 682
Accounts payable                            1,762        1,643
Accrued payroll                             701          676
Accrued income taxes                        371          355
Other current liabilities                  2,281       2,085
Total current liabilities                  6,200       5,441
Long-term debt                              4,916        4,484
Pension and postretirement benefits         3,086        3,972
Other liabilities                          1,634       1,857
Total liabilities                         $ 15,836     $ 15,754
                                                       
Total equity                              $ 18,040     $ 15,862
Shares outstanding
December 31, 2012: 687,091,650 shares
December 31, 2011: 694,970,041 shares                 
Total liabilities and equity              $ 33,876     $ 31,616
                                                         


3M Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)

                                                   Twelve-months ended
                                                     December 31,
                                                     2012         2011
NET CASH PROVIDED BY
OPERATING ACTIVITIES                                 $ 5,300       $ 5,284  
                                                                    
Cash flows from investing activities:
Purchases of property, plant
and equipment                                          (1,484 )       (1,379 )
Acquisitions, net of cash acquired                     (1,046 )       (649   )
Purchases and proceeds from sale or maturities
of
marketable securities and investments – net            (211   )       (745   )
Other investing activities                            55           55     
                                                                    
NET CASH USED IN INVESTING ACTIVITIES                 (2,686 )      (2,718 )
                                                                    
Cash flows from financing activities:
Change in debt                                         722            (307   )
Purchases of treasury stock                            (2,204 )       (2,701 )
Proceeds from issuances of treasury stock
pursuant to stock option and benefit plans             1,012          902
Dividends paid to shareholders                         (1,635 )       (1,555 )
Other financing activities                            47           (14    )
                                                                    
NET CASH USED IN FINANCING ACTIVITIES                 (2,058 )      (3,675 )
                                                                    
Effect of exchange rate changes
on cash and cash equivalents                          108          (49    )
                                                                    
Net increase (decrease) in cash
and cash equivalents                                   664            (1,158 )
Cash and cash equivalents at
beginning of year                                     2,219        3,377  
                                                                    
Cash and cash equivalents at
end of period                                        $ 2,883       $ 2,219  
                                                                             


3M Company and Subsidiaries
SUPPLEMENTAL CASH FLOW AND
OTHER SUPPLEMENTAL FINANCIAL INFORMATION
(Dollars in millions)
(Unaudited)
                                                           
                         Three-months ended          Twelve-months ended
                         December 31,                December 31,
                         2012          2011          2012           2011
                                                                    
NON-GAAP MEASURES
                                                                    
Free Cash Flow:
Net cash provided by     $ 1,738       $ 1,738       $ 5,300        $ 5,284
operating activities
Purchases of
property, plant and       (507  )      (517  )      (1,484 )      (1,379 )
equipment
                                                                    
Free Cash Flow (a)       $ 1,231      $ 1,221      $ 3,816       $ 3,905  
                                                                             

      Free cash flow is not defined under U.S. GAAP. Therefore, it should not
      be considered a substitute for income or cash flow data prepared in
      accordance with GAAP and may not be comparable to similarly titled
      measures used by other companies. The company defines free cash flow as
(a)  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
      believes free cash flow is a useful measure of performance and uses this
      measure as an indication of the strength of the company and its ability
      to generate cash.

                                                               
                                                    2012         2011 
OTHER NON-GAAP MEASURES:
Net Working Capital Turns at Dec. 31 (b)             4.8            5.0
                                                                           
Return on Invested Capital for the
twelve-months ended Dec. 31 (c)                      19.8   %       19.9   %
                                                                           

      The company uses various working capital measures that place emphasis
      and focus on certain working capital assets and liabilities. 3M’s net
(b)  working capital index is defined as quarterly net sales multiplied by
      four, divided by ending net accounts receivable plus inventory less
      accounts payable. This measure is not recognized under U.S. GAAP and may
      not be comparable to similarly titled measures used by other companies.

      The company uses non-GAAP measures to focus on shareholder value
      creation. 3M uses Return on Invested Capital (ROIC), defined as
      annualized after-tax operating income (including interest income)
(c)  divided by average operating capital. Operating capital is defined as
      net assets (total assets less total liabilities) excluding debt. This
      measure is not recognized under U.S. GAAP and may not be comparable to
      similarly titled measures used by other companies.



3M Company and Subsidiaries
SALES CHANGE ANALYSIS
(Unaudited)
                                                               
                          Three-months ended December 31, 2012
                                                Europe,
                                                Middle     Latin
Sales Change Analysis     United     Asia-      East and   America/   World-
By Geographic Area        States     Pacific    Africa     Canada     Wide
                                                                             
Volume – organic          3.8    %   7.4    %   (2.4 ) %   6.6    %   3.6    %
Price                     1.4      (1.6 )    1.4      3.1      0.7   
Organic                   5.2        5.8        (1.0 )     9.7        4.3
local-currency sales
Acquisitions              1.9        –          0.6        0.4        0.9
Translation               –        (0.7 )    (1.8 )    (2.9 )    (1.0 ) 
Total sales change        7.1   %   5.1   %   (2.2 ) %   7.2   %   4.2   %
                                                                             
                          Three-months ended December 31, 2012
                          Organic
Worldwide                 local-                                      Total
Sales Change Analysis     currency   Acqui-     Divest-    Trans-     sales
By Business Segment       sales      sitions    itures     lation     change
                                                                             
Industrial and            3.9    %   1.2    %   –      %   (1.3 ) %   3.8    %
Transportation
Health Care               5.9    %   0.5    %   –      %   (0.8 ) %   5.6    %
Consumer and Office       8.7    %   –      %   –      %   (1.0 ) %   7.7    %
Safety, Security and
Protection Services       (1.7 ) %   –      %   (0.1 ) %   (0.7 ) %   (2.5 ) %
Display and Graphics      8.3    %   3.2    %   –      %   (0.9 ) %   10.6   %
Electro and               1.8    %   –      %   –      %   (0.8 ) %   1.0    %
Communications
                                                                             
                          Twelve-months ended December 31, 2012
                                                Europe,
                                                Middle     Latin
Sales Change Analysis     United     Asia-      East and   America/   World-
By Geographic Area        States     Pacific    Africa     Canada     Wide
                                                                             
Volume – organic          2.1    %   1.3    %   (2.8 ) %   6.9    %   1.2    %
Price                     2.1      (1.2 )    2.2      4.0      1.4   
Organic                   4.2        0.1        (0.6 )     10.9       2.6
local-currency sales
Acquisitions              0.8        0.3        1.9        0.1        0.8
Translation               –        (0.6 )    (6.2 )    (6.3 )    (2.4 ) 
Total sales change        5.0   %   (0.2 ) %   (4.9 ) %   4.7   %   1.0   %
                                                                             
                          Twelve-months ended December 31, 2012
                          Organic
Worldwide                 local-                           Total
Sales Change Analysis     currency   Acqui-     Trans-     sales
By Business Segment       sales      sitions    lation     change
                                                                             
Industrial and            4.5    %   1.1    %   (2.9 ) %   2.7    %
Transportation
Health Care               4.7    %   0.3    %   (2.5 ) %   2.5    %
Consumer and Office       3.8    %   2.0    %   (1.9 ) %   3.9    %
Safety, Security and
Protection Services       2.2    %   –      %   (2.7 ) %   (0.5 ) %
Display and Graphics      (2.4 ) %   0.9    %   (1.6 ) %   (3.1 ) %
Electro and               (0.8 ) %   –      %   (1.6 ) %   (2.4 ) %
Communications
                                                                             


3M Company and Subsidiaries
BUSINESS SEGMENTS
(Dollars in millions)
(Unaudited)
                                                           
BUSINESS SEGMENT         Three-months ended          Twelve-months ended
INFORMATION
NET SALES                December 31,                December 31,
(Millions)               2012          2011          2012           2011
                                                                    
Industrial and           $ 2,493       $ 2,402       $ 10,346       $ 10,073
Transportation
Health Care                1,332         1,261         5,158          5,031
Consumer and Office        1,097         1,019         4,316          4,153
Safety, Security and       904           927           3,802          3,821
Protection Services
Display and Graphics       910           823           3,560          3,674
Electro and                776           768           3,228          3,306
Communications
Corporate and              1             2             5              11
Unallocated
Elimination of Dual       (126  )      (113  )      (511   )      (458   )
Credit
                                                                    
Total Company            $ 7,387      $ 7,089      $ 29,904      $ 29,611 
                                                                    
                                                                    
BUSINESS SEGMENT         Three-months ended          Twelve-months ended
INFORMATION
OPERATING INCOME         December 31,                December 31,
(Millions)               2012          2011          2012           2011
                                                                    
Industrial and           $ 469         $ 472         $ 2,258        $ 2,057
Transportation
Health Care                430           389           1,646          1,489
Consumer and Office        230           179           930            840
Safety, Security and       162           171           847            814
Protection Services
Display and Graphics       152           157           693            788
Electro and                142           153           691            712
Communications
Corporate and              (114  )       (132  )       (469   )       (421   )
Unallocated
Elimination of Dual       (28   )      (25   )      (113   )      (101   )
Credit
                                                                    
Total Company            $ 1,443      $ 1,364      $ 6,483       $ 6,178  
                                                                             

About 3M
3M captures the spark of new ideas and transforms them into thousands of
ingenious products. Our culture of creative collaboration inspires a
never-ending stream of powerful technologies that make life better. 3M is the
innovation company that never stops inventing. With $30 billion in sales, 3M
employs 88,000 people worldwide and has operations in more than 70 countries.

Contact:

3M
Investor Contacts:
Matt Ginter, 651-733-8206
or
Bruce Jermeland, 651-733-1807
or
Media Contact:
Jacqueline Berry, 651-733-3611
 
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