3M Reports First-Quarter Results; Company Posts Sales of $7.6 Billion and Earnings per Share of $1.61

  3M Reports First-Quarter Results; Company Posts Sales of $7.6 Billion and
  Earnings per Share of $1.61

Business Wire

ST. PAUL, Minn. -- April 25, 2013

3M (NYSE: MMM) today reported first-quarter earnings of $1.61 per share, an
increase of 1.3 percent versus the first quarter of 2012. Sales rose 2.0
percent year-on-year to $7.6 billion, an all-time first-quarter record.
Organic local-currency sales grew 2.1 percent and acquisitions added 1.7
percent to sales. Currency impacts reduced sales by 1.8 percent year-on-year.

Operating income was $1.6 billion and operating income margins for the quarter
were 21.6 percent. First-quarter net income was $1.1 billion and free cash
flow was $670 million.

“We achieved record first-quarter sales and solid operating margins in the
face of a low-growth economic environment and the strong U.S. dollar,” said
Inge G. Thulin, 3M chairman, president and chief executive officer. “At the
same time, we further strengthened the company through increased investments
in innovation, commercialization and manufacturing.”

The company paid $440 million in cash dividends to shareholders and
repurchased $805 million of its own shares during the quarter.

Organic local-currency sales growth was 4.0 percent in Health Care, 3.7
percent in Consumer, 2.9 percent in Industrial and 2.3 percent in Safety and
Graphics; Electronics and Energy declined 2.2 percent year-on-year. On a
geographic basis, organic local-currency sales grew 7.3 percent in Latin
America/Canada, 2.3 percent in the U.S. and 1.9 percent in Asia Pacific; EMEA
(Europe, Middle East and Africa) declined 0.8 percent year-on-year.

3M anticipates 2013 earnings to be in the range of $6.60 to $6.85 per share
versus a previous expected range of $6.70 to $6.95 per share. The company
continues to forecast organic local-currency sales growth of 2 to 5 percent
for the year. Foreign currency translation is expected to reduce full-year
sales by approximately 1.5 percent. 3M previously anticipated no impact to
2013 sales from foreign currency translation.

“Considering the stronger U.S. dollar and softer demand in some end markets,
it is prudent to alter our outlook a bit for 2013,” said Thulin. “We remain
confident looking ahead and are keenly focused on things within our control –
advancing our strategic objectives, driving productivity and improving the
business. 3M’s unique combination of technology strength, manufacturing
excellence and global capability will enable us to deliver sustainable
increases in sales, earnings and cash flow.”

First-Quarter Business Group Discussion

Industrial

  *Sales of $2.7 billion, up 4.6 percent in U.S. dollars. Organic
    local-currency sales increased 2.9 percent, acquisitions (Ceradyne) added
    3.6 percent to sales and foreign currency translation reduced sales by 1.9
    percent.
  *On an organic local-currency basis:

       *Sales growth was led by aerospace, industrial adhesives and tapes,
         personal care and liquid filtration; the advanced materials business
         declined year-on-year.
       *Positive sales growth in Latin America/Canada, the U.S. and Asia
         Pacific; EMEA was flat year-on-year.

  *Operating income was $576 million, down 2.6 percent year-on-year;
    operating margin of 21.5 percent.

Safety and Graphics

  *Sales of $1.4 billion, up 2.2 percent in U.S. dollars. Organic
    local-currency sales increased 2.3 percent; acquisitions (Federal Signal
    Technologies) added 2.2 percent to sales, divestitures reduced sales by
    0.1 percent and foreign currency translation reduced sales by 2.2 percent.
  *On an organic local-currency basis:

       *Sales growth was strongest in commercial graphics, architectural
         markets, building and commercial services and personal safety; sales
         declined in the traffic safety and security business.
       *Sales rose in Latin America/Canada, Asia Pacific and the U.S. and
         declined year-on-year in EMEA.

  *Operating income increased 0.4 percent to $335 million; operating margin
    of 23.7 percent.

Health Care

  *Sales of $1.3 billion, up 2.8 percent in U.S. dollars. Organic
    local-currency sales increased 4.0 percent; acquisitions (CodeRyte) added
    0.4 percent and foreign currency translation reduced sales by 1.6 percent.
  *On an organic local-currency basis:

       *Sales increased across the portfolio, with the strongest growth in
         food safety, critical and chronic care and health information
         systems.
       *Sales rose in all major geographies, led by double-digit growth in
         Latin America/Canada.

  *Operating income increased 0.8 percent to $404 million; operating margin
    of 30.8 percent.

Electronics and Energy

  *Sales of $1.3 billion, down 3.3 percent in U.S. dollars. Organic
    local-currency sales decreased 2.2 percent and foreign currency
    translation reduced sales by 1.1 percent.
  *On an organic local-currency basis:

       *Sales declined in electronics, as industry demand remained soft
         overall.
       *Energy-related sales rose slightly, with the strongest growth in
         electrical markets; sales declined year-on-year in telecom.
       *Sales increased in Latin America/Canada, but declined in Asia
         Pacific, EMEA and the U.S.

  *Operating income decreased 16.3 percent to $196 million; operating margin
    of 15.3 percent.

Consumer

  *Sales of $1.1 billion, up 2.0 percent in U.S. dollars. Organic
    local-currency sales increased 3.7 percent and foreign currency
    translation reduced sales by 1.7 percent.
  *On an organic local-currency basis:

       *Growth was led by the consumer health care, DIY and home care
         businesses.
       *Sales rose in Asia Pacific, the U.S. and Latin America/Canada and
         declined year-on-year in EMEA.

  *Operating income was flat year-on-year at $237 million; operating margin
    of 21.9 percent.

3M will conduct an investor teleconference at 9:00 a.m. EDT (8:00 a.m. CDT)
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
    21609531).
    The telephone replay will be available until 10:00 a.m. CDT on April 30,
    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)unanticipated problems or delays with the phased implementation of a
global enterprise resource planning (ERP) system, or security breaches and
other disruptions to the Company's information technology infrastructure; 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, 2012. Changes in such assumptions
or factors could produce significantly different results. A further
description of these factors is located in the Annual Report under "Cautionary
Note Concerning Factors That May Affect Future Results" and "Risk Factors" in
PartI, Items 1 and 1A. 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
                                                       March 31,
                                                       2013          2012
                                                                     
Net sales                                              $ 7,634      $ 7,486 
                                                                     
Operating expenses
Cost of sales                                            3,969         3,889
Selling, general and administrative expenses             1,589         1,552
Research, development and related expenses              430         411   
                                                                     
Total operating expenses                                5,988       5,852 
                                                                     
Operating income                                        1,646       1,634 
                                                                     
Interest expense and income
Interest expense                                         39            40
Interest income                                         (10   )      (9    )
                                                                     
Total interest expense – net                            29          31    
                                                                     
Income before income taxes                               1,617         1,603
                                                                     
Provision for income taxes                              470         462   
                                                                     
Net income including noncontrolling interest           $ 1,147      $ 1,141 
                                                                     
Less: Net income attributable to noncontrolling         18          16    
interest
                                                                     
Net income attributable to 3M                          $ 1,129      $ 1,125 
                                                                     
Weighted average 3M common shares outstanding –          691.1         696.8
basic
Earnings per share attributable to 3M common           $ 1.63       $ 1.61  
shareholders – basic
                                                                     
Weighted average 3M common shares outstanding –          702.1         706.1
diluted
Earnings per share attributable to 3M common           $ 1.61       $ 1.59  
shareholders – diluted
                                                                     
Cash dividends paid per 3M common share                $ 0.635      $ 0.59  
                                                                             


3M Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(Unaudited)
                                                             
                                          Mar. 31,     Dec. 31,     Mar. 31,
                                          2013         2012         2012
ASSETS
Current assets
Cash and cash equivalents                 $ 2,928      $ 2,883      $ 2,332
Marketable securities – current             1,448        1,648        1,399
Accounts receivable – net                   4,418        4,061        4,323
Inventories                                 3,819        3,837        3,561
Other current assets                       1,242       1,201       1,238
Total current assets                       13,855      13,630      12,853
Marketable securities – non-current         1,452        1,162        763
Investments                                 161          163          160
Property, plant and equipment – net         8,318        8,378        7,755
Goodwill and intangible assets – net        9,087        9,310        8,955
Prepaid pension benefits                    19           16           43
Other assets                               1,137       1,217       1,486
Total assets                              $ 34,029     $ 33,876     $ 32,015
                                                                    
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and
current portion of long-term debt         $ 1,072      $ 1,085      $ 664
Accounts payable                            1,820        1,762        1,779
Accrued payroll                             466          701          473
Accrued income taxes                        392          371          423
Other current liabilities                  2,187       2,281       2,069
Total current liabilities                  5,937       6,200       5,408
Long-term debt                              4,864        4,916        4,510
Pension and postretirement benefits         3,014        3,086        3,686
Other liabilities                          1,686       1,634       1,792
Total liabilities                         $ 15,501     $ 15,836     $ 15,396
                                                                    
Total equity                              $ 18,528     $ 18,040     $ 16,619
Shares outstanding
March 31, 2013: 690,194,620 shares
December 31, 2012: 687,091,650 shares
March 31, 2012: 693,872,048 shares                                
Total liabilities and equity              $ 34,029     $ 33,876     $ 32,015
                                                                      


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

                                                   Three-months ended
                                                    March 31,
                                                    2013       2012
NET CASH PROVIDED BY
OPERATING ACTIVITIES                                $ 994      $ 828   
                                                                
Cash flows from investing activities:
Purchases of property, plant
and equipment                                         (324  )     (261  )
Purchases and proceeds from sale or maturities of
marketable securities and investments – net           (96   )     213
Other investing activities                           15        5     
                                                                
NET CASH USED IN INVESTING ACTIVITIES                (405  )    (43   )
                                                                
Cash flows from financing activities:
Change in debt                                        (9    )     (27   )
Purchases of treasury stock                           (805  )     (524  )
Proceeds from issuances of treasury stock
pursuant to stock option and benefit plans            738         213
Dividends paid to shareholders                        (440  )     (410  )
Other financing activities                           30        26    
                                                                
NET CASH USED IN FINANCING ACTIVITIES                (486  )    (722  )
                                                                
Effect of exchange rate changes
on cash and cash equivalents                         (58   )    50    
                                                                
Net increase (decrease) in cash
and cash equivalents                                  45          113
Cash and cash equivalents at
beginning of year                                    2,883     2,219 
                                                                
Cash and cash equivalents at
end of period                                       $ 2,928    $ 2,332 
                                                                        


3M Company and Subsidiaries
SUPPLEMENTAL CASH FLOW AND
OTHER SUPPLEMENTAL FINANCIAL INFORMATION
(Dollars in millions)
(Unaudited)
                                                       
                                               Three-months ended
                                               March 31,
                                               2013         2012
                                                            
NON-GAAP MEASURES
                                                            
Free Cash Flow:
Net cash provided by operating activities      $ 994        $ 828
Purchases of property, plant and equipment      (324 )      (261 )
                                                            
Free Cash Flow (a)                             $ 670       $ 567  
                                                                   

      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.

                                                   
                                                     March 31,           
                                                     2013         2012 
OTHER NON-GAAP MEASURES:
Net Working Capital Turns (b)                         4.8            4.9
                                                                          

      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.



3M Company and Subsidiaries
SALES CHANGE ANALYSIS
(Unaudited)

During the first quarter of 2013, 3M completed a realignment of its business
segments, as discussed in the following "Business Segments" section, and
realigned its geographic area reporting to include Puerto Rico in the United
States, rather than in the Latin America/Canada region. The financial
information presented herein reflects, for all periods presented, the impact
of these realignments.

                  Three-months ended March 31, 2013
                                             
                                                   Europe,                
                                                   Middle         Latin
Sales Change         United         Asia-          East and       America/       World-
Analysis
By Geographic       States        Pacific       Africa         Canada        Wide
Area
                                                                                        
Volume –             1.6    %       3.1    %       (1.1 ) %       2.9    %       1.7    %
organic
Price               0.7         (1.2 )       0.3         4.4         0.4   
Organic
local-currency       2.3            1.9            (0.8 )         7.3            2.1
sales
Acquisitions         3.0            0.3            2.3            0.4            1.7
Translation         –           (2.7 )       (1.5 )       (5.0 )       (1.8 ) 
Total sales         5.3   %      (0.5 ) %      –     %      2.7   %      2.0   %
change
                                                                                        
                    Three-months ended March 31, 2013
                     Organic
Worldwide            local-                                                      Total
Sales Change         currency       Acqui-         Divest-        Trans-         sales
Analysis
By Business         sales         sitions       itures        lation        change
Segment
                                                                                        
Industrial           2.9    %       3.6    %       –      %       (1.9 ) %       4.6    %
Safety and           2.3    %       2.2    %       (0.1 ) %       (2.2 ) %       2.2    %
Graphics
Electronics          (2.2 ) %       –      %       –      %       (1.1 ) %       (3.3 ) %
and Energy
Health Care          4.0    %       0.4    %       –      %       (1.6 ) %       2.8    %
Consumer             3.7    %       –      %       –      %       (1.7 ) %       2.0    %
                                                                                        


3M Company and Subsidiaries
BUSINESS SEGMENTS
(Dollars in millions)
(Unaudited)

Effective in the first quarter of 2013, 3M completed a realignment of its
business groups (segments) to better serve global markets and customers. This
realignment included:

  *The alignment of divisions into five business groups (segments) as further
    described below.
  *The combination of certain existing divisions into new divisions. These
    included the Traffic Safety and Security Division (reflecting the
    combination of the former Traffic Safety Systems Division and Security
    Systems Division) and the Optical Systems Division (reflecting the
    combination of the former Optical Systems Division and Mobile Interactive
    Solutions Division).
  *The movement of certain product lines between various divisions.

In addition to the above, there were also adjustments for dual credit
reporting to reflect the realigned structure. The new structure is comprised
of five business segments: Industrial, Safety and Graphics, Electronics and
Energy, Health Care, and Consumer.

Industrial: This business segment, previously referred to as Industrial and
Transportation, is largely unchanged, except for the transfer of the Renewable
Energy Division to the Electronics and Energy business segment.

Safety and Graphics: This business segment includes Architectural Markets,
Building and Commercial Services, Commercial Graphics, Industrial Mineral
Products, Personal Safety, and Traffic Safety and Security. This new business
segment also reflects the movement of certain product lines between various
divisions.

Electronics and Energy: This business segment includes Communication Markets,
Electrical Markets, Electronics Markets Materials, Electronic Solutions,
Infrastructure Protection, Optical Systems, Renewable Energy, and 3M Touch
Systems. This new business segment also reflects the movement of certain
product lines between various divisions.

Health Care: This business segment is largely unchanged, except for the
movement of certain product lines between various divisions.

Consumer: This business segment, previously referred to as Consumer and
Office, is largely unchanged, except for the movement of certain product lines
between various divisions.

The financial information presented herein reflects, for all periods
presented, the impact of this realignment. Refer to 3M's Current Report on
Form 8-K furnished on March 1, 2013 for additional supplemental unaudited
historical business segment net sales and operating income information.

                               
BUSINESS SEGMENT INFORMATION       Three-months ended
NET SALES                          March 31,
(Millions)                         2013        2012
                                                 
Industrial                         $ 2,675       $ 2,558
Safety and Graphics                  1,417         1,387
Electronics and Energy               1,277         1,320
Health Care                          1,311         1,275
Consumer                             1,081         1,060
Corporate and Unallocated            2             2
Elimination of Dual Credit          (129  )      (116  )
                                                 
Total Company                      $ 7,634      $ 7,486 
                                                 
                                                 
BUSINESS SEGMENT INFORMATION       Three-months ended
OPERATING INCOME                   March 31,
(Millions)                         2013          2012
                                                 
Industrial                         $ 576         $ 591
Safety and Graphics                  335           334
Electronics and Energy               196           234
Health Care                          404           401
Consumer                             237           237
Corporate and Unallocated            (74   )       (138  )
Elimination of Dual Credit          (28   )      (25   )
                                                 
Total Company                      $ 1,646      $ 1,634 
                                                         

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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