3M Reports Fourth-Quarter and Calendar Year Sales and Earnings; 2004 Revenue Exceeds $20 Billion, Full-Year EPS Up Over 21 Percent.ST. PAUL St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery , Minn. -- 3M (NYSE NYSE See: New York Stock Exchange :MMM MMM Myeloid metaplasia with myelofibrosis, see there ) today announced its sales and profit results for the fourth-quarter and full-year 2004. Net income for the quarter was $720 million, or $0.91 per share, versus $619 million, or $0.77 per share, in the fourth quarter of 2003. Fourth quarter net income and earnings per-share increased 16.3 percent and 18.2 percent, respectively. This result is at the high end of previous earnings guidance of $0.90 to $0.91 per share. "The broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased strength of the 3M business and geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. portfolio drove our excellent performance this quarter," said W. James McNerney Walter James "Jim" McNerney, Jr., is an American businessman. On June 30, 2005 he was named the CEO of The Boeing Company. Prior to that, McNerney was the Chairman and Chief Executive of 3M. He had been a member of the Boeing board of directors since 2001. , Jr., 3M chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "This strong finish positions us well for continued growth and operational success in 2005." The fourth-quarter results do not include any effect from the foreign dividend reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. provision of the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act of 2004(a) or proposed accounting rule changes related to contingently con·tin·gent adj. 1. Liable to occur but not with certainty; possible: "All salaries are reckoned on contingent as well as on actual services" Ralph Waldo Emerson. convertible debt instruments(b), since neither of the relevant rules had been finalized See finalization. . Fourth-quarter worldwide sales totaled $5.1 billion, up 7.9 percent compared to the fourth quarter of 2003. Global sales volumes increased 4.8 percent in the fourth quarter and selling prices declined 0.9 percent. Local-currency sales (which excludes the impact of currency translation) increased 8.3 percent in Consumer and Office; 7.9 percent in Safety, Security, and Protection Services; 7.0 percent in Industrial; 5.0 percent in Health Care; 4.8 percent in Transportation; and declined 0.8 percent in Display and Graphics and 7.3 percent in Electro E`lec´tro n. 1. An electrotype. and Communications. Currency effects increased sales by 4.0 percent. Sales outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. totaled $3.1 billion in the fourth quarter, an increase of 9.5 percent versus last year's comparable quarter. Volumes increased 4.1 percent, while selling prices declined 1.2 percent. Currency translation effects increased international sales by 6.6 percent. Local-currency sales increased 3.9 percent in the combined Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , Africa, and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of region, 3.7 percent in Asia Pacific, and 1.3 percent in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .
In the United States, sales totaled $2.0 billion, up 5.4 percent from the fourth quarter of 2003. Volumes increased 5.7 percent in the fourth quarter and selling prices declined 0.3 percent. For the calendar year, 3M net income totaled $3.0 billion and earnings per share increased 21.4 percent to $3.75 per share, up from $2.5 billion and $3.09 per share in 2003 excluding special items(c). 2004 calendar year sales totaled $20.0 billion, a 9.8 percent increase over 2003. Sales volumes increased 6.7 percent for the year, and selling prices declined 0.7 percent. For the calendar year, local-currency sales growth was driven by increases of 10.4 percent in Display and Graphics; 9.1 percent in Industrial; 6.9 percent in Consumer and Office; and 6.6 percent in Safety, Security and Protection Services. "Our outstanding results in recent years demonstrate the enduring strength of the 3M business model, a model that has been improved and significantly strengthened," McNerney said. "As a result, we are confident that by leveraging our multiple technology platforms, leadership positions in diverse markets, and well-integrated corporate initiatives, we will drive sustainable sales and profit growth in 2005 and beyond." 3M also provided its full-year 2005 earnings estimates. The company expects 2005 per share earnings to be in the range of $4.15 to $4.25. Full-year volume growth is expected to be between 5 and 8 percent. Included in this 2005 expectation is an approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $.02 earnings per share decrease resulting from an anticipated change in accounting rules related to contingently convertible debt instruments. This expectation does not include any impact from accounting rule changes related to the expensing of management stock options, which 3M expects to implement July July: see month. 1, 2005. The expectation also does not include a potential one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. increase in the tax provision related to possible repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of foreign earnings under the American Jobs Creation Act of 2004. For the first quarter of 2005, the company expects earnings per share to be in the range of $1.00 to $1.02 and volume growth of between 5 and 7 percent. Patrick D. Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. , senior vice president and chief financial officer, will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central Time) today. Investors can access a webcast of this conference, along with related charts and materials, at http://investor.3M.com. NOTES: (a) Due to continued uncertainty regarding interpretation of key provisions of the American Jobs Creation Act of 2004, the company was not in a position to make a final decision to repatriate repatriate To bring home assets that are currently held in a foreign country. Domestic corporations are frequently taxed on the profits that they repatriate, a factor inducing the firms to leave overseas the profits earned there. foreign earnings under the Act. Thus the company did not record a previously anticipated one-time increase in the tax provision for these earnings in the fourth quarter of 2004. (b) The company expects a change in accounting rules related to contingently convertible debt instruments to affect results beginning in 2005. (c) During the first quarter of 2003, 3M recorded pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charges of $93 million ($58 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) related to an adverse court ruling in a lawsuit lawsuit: see procedure; tort. filed against 3M in 1997 by LePage's Inc. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information (within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995) about the Company's financial results and estimates, business prospects, and products under development 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," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic conditions; (2) foreign currency exchange rates and fluctuations in those rates; (3) the timing and acceptance of new product offerings; (4) the availability and cost of purchased components and materials, including oil-derived compounds; (5) 3M's ability to successfully integrate and obtain the anticipated synergies from acquisitions and strategic alliances; (6) receiving less savings from its corporate initiatives than estimated; and (7) legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , including the outcome of and information derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from pending Congressional action concerning asbestos-related litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and other significant developments that could occur in the legal proceedings described in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2003, and its subsequent periodic reports on Forms 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. 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 release as a result of new information or future events or developments. About 3M -- A Global, Diversified diversified (di·verˑ·s Technology Company Every day, 3M people find new ways to make amazing a·maze v. a·mazed, a·maz·ing, a·maz·es v.tr. 1. To affect with great wonder; astonish. See Synonyms at surprise. 2. Obsolete To bewilder; perplex. v.intr. things happen. Wherever they are, whatever they do, the company's customers know they can rely on 3M to help make their lives better. 3M's brands include Scotch scotch 1 tr.v. scotched, scotch·ing, scotch·es 1. To put an abrupt end to: The prime minister scotched the rumors of her illness with a public appearance. 2. , Post-it, Scotchgard Scotchgard is a 3M brand of products used to protect fabric, furniture, and carpets. Like other fluorochemicals, Scotchgard is mostly inert, so by applying it to fabric, the fabric can be protected from stains and soiling. , Thinsulate Thinsulate is a synthetic fibre used for thermal insulation in clothing. The word is a portmanteau of thin and insulate, and is a trademark of the 3M Corporation. The material was first sold in about 1980. , Scotch-Brite, Filtrete, Command and Vikuiti. Serving customers in more than 200 countries around the world, the company's 67,000 people use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. ; safety, security and protection services; health care; industrial and transportation. For more information, including the latest product and technology news, visit www.3M.com. Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti are trademarks of 3M.
3M Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(Millions, except per-share amounts)
(Unaudited)
Three-months ended Twelve-months ended
December 31 December 31
------------------- ------------------
2004 2003 2004 2003
-------- -------- -------- --------
Net sales $ 5,091 $ 4,718 $20,011 $18,232
-------- -------- -------- --------
Operating expenses
Cost of sales 2,613 2,429 9,958 9, 285
Selling, general and
administrative expenses 1,097 1,061 4,332 4,039
Research, development and
related expenses 289 286 1,143 1,102
Other expense - - - 93
-------- -------- -------- --------
Total 3,999 3,776 15,433 14,519
-------- -------- -------- --------
Operating income 1,092 942 4,578 3,713
-------- -------- -------- --------
Interest expense and income
Interest expense 17 15 69 84
Interest income (14) (11) (46) (28)
-------- -------- -------- --------
Total 3 4 23 56
-------- -------- -------- --------
Income before income taxes
and minority interest 1,089 938 4,555 3,657
Provision for income taxes 359 305 1,503 1,202
Minority interest 10 14 62 52
-------- -------- -------- --------
Net income $ 720 $ 619 $ 2,990 $ 2,403
======== ======== ======== ========
Weighted average common
shares outstanding - basic 776.2 784.6 780.5 782.8
Earnings per share - basic $ 0.93 $ 0.79 $ 3.83 $ 3.07
======== ======== ======== ========
Weighted average common
shares outstanding - diluted 790.4 800.9 796.5 795.3
Earnings per share - diluted $ 0.91 $ 0.77 $ 3.75 $ 3.02
======== ======== ======== ========
Cash dividends paid per
common share $ 0.36 $ 0.33 $ 1.44 $ 1.32
======== ======== ======== ========
3M Company and Subsidiaries
SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION
(Millions, except per-share amounts)
(Unaudited)
Twelve-months ended Twelve-months ended
December 31, 2004 December 31, 2003
--------------------------- ----------------------------
Excluding Excluding
special Special Reported special Special Reported
items items total items (a) items (a) total
-------- -------- -------- --------- -------- --------
Net sales $20,011 $ - $20,011 $ 18,232 $ - $18,232
-------- -------- -------- --------- -------- --------
Operating
expenses
Cost of
sales 9,958 - 9,958 9,285 - 9,285
Selling,
general and
admini-
strative
expenses 4,332 - 4,332 4,039 - 4,039
Research,
development
and related
expenses 1,143 - 1,143 1,102 - 1,102
Other
expense - - - - 93 93
-------- -------- -------- --------- -------- --------
Total 15,433 - 15,433 14,426 93 14,519
-------- -------- -------- --------- -------- --------
Operating
income (loss) 4,578 - 4,578 3,806 (93) 3,713
Interest
expense and
(income), net 23 - 23 56 - 56
-------- -------- -------- --------- -------- --------
Income (loss)
before income
taxes and
minority
interest 4,555 - 4,555 3,750 (93) 3,657
Provision
(benefit) for
income taxes 1,503 - 1,503 1,237 (35) 1,202
Effective tax
rate 33.0% - 33.0% 33.0% - 32.9%
Minority
interest 62 - 62 52 - 52
-------- -------- -------- --------- -------- --------
Net income
(loss) $ 2,990 $ - $ 2,990 $ 2,461 $ (58) $ 2,403
======== ======== ======== ========= ======== ========
Weighted
average
diluted
shares 796.5 - 796.5 795.3 795.3 795.3
Net income
per diluted
share $ 3.75 $ - $ 3.75 $ 3.09 $ (0.07) $ 3.02
======== ======== ======== ========= ======== ========
(a) In addition to disclosing results that are determined in
accordance with U.S. generally accepted accounting principles (GAAP),
the company also discloses non-GAAP results that exclude special
items. Special items represent significant charges or credits that are
important to an understanding of the company's ongoing operations. The
company provides reconciliations of its non-GAAP financial reporting
to the most comparable GAAP reporting. The company believes that
discussion of results excluding special items provides a useful
analysis of ongoing operating trends. Earnings per share and other
amounts before special items are not measures recognized under GAAP.
The determination of special items may not be comparable to similarly
titled measures used by other companies. During the first quarter of
2003, 3M recorded pretax charges of $93 million ($58 million
after-tax) related to an adverse court ruling in a lawsuit filed
against 3M in 1997 by LePage's Inc.
3M Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(Unaudited)
At December 31
---------------------
ASSETS 2004 2003
Current assets ------- -------
Cash and cash equivalents $ 2,757 $ 1,836
Accounts receivable - net 2,792 2,714
Inventories 1,897 1,816
Other current assets 1,274 1,354
------- -------
Total current assets 8,720 7,720
Investments 227 218
Property, plant and equipment - net 5,711 5,609
Goodwill, intangible assets and other assets (a) 6,050 4,053
------- -------
Total assets $20,708 $17,600
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings and current portion of
long-term debt $ 2,094 $ 1,202
Accounts payable 1,168 1,087
Accrued payroll 487 436
Accrued income taxes 867 880
Other current liabilities 1,455 1,477
------- -------
Total current liabilities 6,071 5,082
Long-term debt 727 1,735
Other liabilities (a) 3,532 2,898
------- -------
Total liabilities 10,330 9,715
------- -------
Total stockholders' equity - net (a) 10,378 7,885
Shares outstanding
December 31, 2004: 773,518,281 shares
December 31, 2003: 784,117,360 shares
------- -------
Total liabilities and stockholders' equity $20,708 $17,600
======= =======
(a) Accounting rules require that, if the Accumulated Benefit
Obligation (ABO) exceeds the fair value of pension plan assets, the
employer must recognize a liability that is at least equal to the
unfunded ABO. In December 2002, 3M recorded a substantial minimum
pension liability adjustment. As a result of pension contributions,
strong asset performance and other factors, 3M's U.S. qualified
pension plan assets exceeded the ABO at year-end 2004. This change in
U.S qualified pension plan assets was the primary component which
resulted in an adjustment to other comprehensive income that increased
stockholders' equity by $1.193 billion, increased other assets by
$1.773 billion, decreased other liabilities by $151 million, and
increased the long-term deferred tax liability (which is part of Other
liabilities) by $731 million.
3M Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Twelve-months ended
December 31
2004 2003
------- -------
SUMMARY OF CASH FLOW:
NET CASH PROVIDED BY OPERATING ACTIVITIES $4,282 $3,773
------- -------
Cash flows from investing activities:
Purchases of property, plant and
equipment (937) (677)
Acquisitions, net of cash acquired (73) (439)
Other investing activities 72 147
------- -------
NET CASH USED IN INVESTING ACTIVITIES (938) (969)
------- -------
Cash flows from financing activities:
Change in debt (111) (440)
Purchases of treasury stock (1,791) (685)
Reissuances of treasury stock 508 555
Dividends paid to stockholders (1,125) (1,034)
Other financing activities (15) (23)
------- -------
NET CASH USED IN FINANCING ACTIVITIES (2,534) (1,627)
------- -------
Effect of exchange rate changes on cash 111 41
------- -------
Net increase in cash and cash equivalents 921 1,218
Cash and cash equivalents at beginning of
period 1,836 618
------- -------
Cash and cash equivalents at end of period $2,757 $1,836
======= =======
3M Company and Subsidiaries
SUPPLEMENTAL CASH FLOW AND
OTHER SUPPLEMENTAL FINANCIAL INFORMATION
(Dollars in millions)
(Unaudited)
Twelve-months ended
December 31
2004 2003
------- -------
FREE CASH FLOW (Non-GAAP measure):
Net cash provided by operating activities $4,282 $3,773
Purchases of property, plant and equipment (937) (677)
------- -------
Free Cash Flow (a) $3,345 $3,096
======= =======
OTHER NON-GAAP MEASURES:
Net Working Capital Turns (b) 5.8 5.5
Reported:
Economic Profit (c) $1,758 $1,322
Return on Invested Capital (c) 23.4% 21.3%
Excluding Special Items in 2003:
Economic Profit (c) $1,758 $1,380
Return on Invested Capital (c) 23.4% 21.8%
(a) Free cash flow is not defined under GAAP. Therefore, it is
considered a non-GAAP measure. Non-GAAP measures should not be
considered a substitute for income or cash flow data prepared in
accordance with U.S. GAAP and may not be comparable to similarly
titled measures used by other companies. The company defines free cash
flow as net cash provided by operating activities less purchases of
property, plant and equipment. It should not be inferred that the
entire free cash flow amount is available for discretionary
expenditures. The company 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.
(b) The company uses non-GAAP measures that place emphasis and focus
on certain working capital assets and liabilities. 3M's net 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. generally accepted
accounting principles and may not be comparable to similarly titled
measures used by other companies.
(c) The company uses non-GAAP measures to focus on shareholder value
creation. 3M's Economic Profit is defined as after-tax operating
income less a charge for operating capital. 3M also uses Return on
Invested Capital, defined as after-tax operating income divided by
average operating capital. This measure is presented as reported and
also excluding 2003 special items. Special items were previously
defined within the Supplemental Consolidated Statement of Income
Information section of this document. These measures are not
recognized under U.S. generally accepted accounting principles 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, 2004
Sales Change Analysis United Inter-
By Geographic Area States national Worldwide
--------- --------- ---------
Volume - core 4.8% 3.8% 4.2%
Volume - acquisitions 0.9 0.3 0.6
--------- --------- ---------
Volume - total 5.7 4.1 4.8
Price (0.3) (1.2) (0.9)
--------- --------- ---------
Total local-currency sales 5.4 2.9 3.9
Translation - 6.6 4.0
--------- --------- ---------
Total sales change 5.4% 9.5% 7.9%
========= ========= =========
Worldwide Local- Total
Sales Change Analysis currency Trans- Sales
By Business Segment Sales lation Change
--------- --------- ---------
Health Care 5.0% 4.3% 9.3%
Industrial 7.0 4.1 11.1
Display and Graphics (0.8) 4.7 3.9
Consumer and Office 8.3 3.1 11.4
Safety, Security and
Protection Services 7.9 4.0 11.9
Electro and Communications (7.3) 3.2 (4.1)
Transportation 4.8 4.1 8.9
3M Company and Subsidiaries
SALES CHANGE ANALYSIS
(Unaudited)
Twelve-Months Ended December 31, 2004
Sales Change Analysis United Inter-
By Geographic Area States national Worldwide
--------- --------- ---------
Volume - core 3.2% 8.2% 6.2%
Volume - acquisitions 0.8 0.3 0.5
--------- --------- ---------
Volume - total 4.0 8.5 6.7
Price (0.1) (1.1) (0.7)
--------- --------- ---------
Total local-currency sales 3.9 7.4 6.0
Translation - 6.5 3.8
--------- --------- ---------
Total sales change 3.9% 13.9% 9.8%
========= ========= =========
Sales Change Analysis Local- Total
By International currency Trans- Sales
Geographic Area Sales lation Change
--------- --------- ---------
Europe 0.8% 8.9% 9.7%
Asia Pacific 13.6 5.6 19.2
Latin America, Africa and
Canada 9.3 2.4 11.7
Worldwide Local- Total
Sales Change Analysis currency Trans- Sales
By Business Segment Sales lation Change
--------- --------- ---------
Health Care 1.7% 4.2% 5.9%
Industrial 9.1 4.0 13.1
Display and Graphics 10.4 4.6 15.0
Consumer and Office 6.9 2.8 9.7
Safety, Security and
Protection Services 6.6 3.6 10.2
Electro and Communications 0.3 2.9 3.2
Transportation 5.2 4.2 9.4
3M Company and Subsidiaries
BUSINESS SEGMENTS
(Dollars in millions)
(Unaudited)
BUSINESS
SEGMENT Three-months ended Twelve-months ended
INFORMATION December 31 December 31
(Millions) 2004 2003 2004 2003
-------- -------- -------- --------
NET SALES
Health Care $ 1,115 $ 1,020 $ 4,230 $ 3,995
Industrial 960 865 3,792 3,354
Display and Graphics 842 810 3,406 2,962
Consumer and Office 763 685 2,861 2,607
Safety, Security and Protection
Services 526 470 2,125 1,928
Electro and Communications 452 472 1,876 1,818
Transportation 423 388 1,683 1,538
Corporate and Unallocated 10 8 38 30
-------- -------- -------- --------
Total Company $ 5,091 $ 4,718 $20,011 $18,232
-------- -------- -------- --------
OPERATING INCOME
Health Care $ 310 $ 254 $ 1,123 $ 1,027
Industrial 158 109 661 458
Display and Graphics 240 243 1,131 885
Consumer and Office 147 114 542 460
Safety, Security and Protection
Services 107 90 491 437
Electro and Communications 68 71 291 255
Transportation 98 88 428 389
Corporate and Unallocated (a) (36) (27) (89) (198)
-------- -------- -------- --------
Total Company $ 1,092 $ 942 $ 4,578 $ 3,713
-------- -------- -------- --------
a) The following charges were recorded in Corporate and Unallocated.
Fourth quarter 2004 includes an increase of $40 million in the
respirator mask/asbestos litigation reserve partially offset by a $20
million increase in the associated insurance receivable resulting in a
net cost ("Net Cost") of $20 million, compared to a Net Cost of $16
million in the fourth quarter of 2003. First quarter 2004 includes $16
million in expense related to a reduction in breast implant
receivables, primarily related to an arbitration ruling in the first
quarter that rejected the Company's claims for recovery under certain
of its claims-made policies. Third quarter 2003 includes Net Cost
related to respirator mask/asbestos and implant reserves. During the
first quarter of 2003, 3M recorded pretax charges of $93 million
related to an adverse court ruling in a lawsuit filed against 3M in
1997 by LePage's Inc. First quarter 2003 also includes certain
acquisition-related costs and Net Cost related to respirator
mask/asbestos reserves.
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