3M Reports Record Fourth-Quarter and Calendar Year Sales and Earnings.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 calendar year 2006. For the 2006 calendar year, net income was $3.9 billion, or $5.06 per share, versus $3.1 billion, or $3.98 per share, an increase of 24 percent and 27 percent, respectively. Full-year 2006 net income includes a net profit of $438 million, or $0.57 per share, largely due to a gain on the sale of those geographic regions of the company's global branded pharmaceuticals business that closed in December, net of various other special items(a-h). Full-year 2005 net income includes net costs due to special items(i-j) of $110 million, or $0.14 per share. Included in these full-year results are stock option expenses of $0.17 per share in 2006 and $0.14 per share in 2005(p). Calendar year 2006 sales totaled $22.9 billion, an 8.3 percent increase over 2005. Local-currency sales increased 7.7 percent, including 2.1 percent from acquisitions. Selling prices declined 0.5 percent on average, and currency impacts added 0.6 percent to 2006 full-year sales growth. Calendar-year local-currency sales growth was driven by increases of 13.2 percent in Safety, Security and Protection Services, 9.1 percent in Industrial and Transportation, 6.9 percent in Display and Graphics, 6.1 percent in Consumer and Office, 6 percent in Health Care and 5.6 percent in Electro E`lec´tro n. 1. An electrotype. and Communications. All six businesses posted positive local-currency sales growth for the third consecutive year. "This was a good year for 3M, as we generated record sales and profits," said George W. Buckley George W. Buckley is the Chairman, President and Chief Executive of 3M. He was named to these positions on December 7 2005. Buckley came to 3M from Brunswick Corporation where he served as chairman and chief executive officer since June 2000. , 3M chairman, president 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. . "We accelerated investments in many areas, including research and development, sales and marketing, growth-oriented capital investments and selected acquisitions, while maintaining our outstanding profitability levels. These investments have strengthened our positions in growing markets, and as they begin to bear fruit, I am confident that we will transform 3M into a faster-growing, higher-performing enterprise. I would like to personally thank 3M employees worldwide for their many contributions in 2006." Fourth-quarter net income was $1.2 billion, or $1.57 per share, versus $746 million, or $0.97 per share, in the fourth quarter of 2005. Net income and earnings per share increased 58 percent and 62 percent, respectively. Fourth-quarter 2006 net income includes a net profit of $354 million, or $0.47 per share, again largely due to a gain on the sale of those geographic regions of the company's global branded pharmaceuticals business that closed in December, net of various other special items(a-h). Fourth-quarter 2005 net income includes an expense of $35 million, or $0.04 per share, due to the effect of FIN fin, organ of locomotion characteristic of fish and consisting of thin tissue supported by cartilaginous or bony rays. In some fish, e.g., the eel, a single fin extends from the back, around the tail, and along the ventral surface. 47(j). Included in these results are stock option expenses of $0.04 per share in the fourth quarter of 2006 and $0.02 per share in the fourth quarter of 2005(p). Fourth-quarter worldwide sales were $5.8 billion, up 8.6 percent compared to the fourth quarter of 2005. Total local-currency sales increased 5.8 percent, led by a 12.2 percent increase in Safety, Security and Protection Services and an 8.9 percent improvement in Health Care. Local-currency sales increased 5.6 percent in Consumer and Office, 4.8 percent in Industrial and Transportation, 3.6 percent in Display and Graphics and 2.6 percent in Electro and Communications. Total-company local-currency sales growth includes 1.9 points from acquired businesses. Currency impacts added 2.8 percent to fourth-quarter growth, and selling prices declined 1 percent versus last year's comparable quarter. Fourth-quarter local-currency growth was 10.5 percent in Europe, 10.2 percent in 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. and 5 percent in Asia Pacific. In 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. , sales grew 3.3 percent despite a significant slowdown in the housing industry, which hurt growth by an estimated 3 percentage points. "Looking ahead, despite what appears to be slightly moderating economic growth worldwide, I am very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future of our company," said Buckley. "We will continue to drive our growth agenda, which will be funded via aggressive productivity improvement efforts, such as global strategic sourcing and lean six sigma Lean Six Sigma is a business improvement methodology which combines (as the name implies) tools from both Lean Manufacturing and Six Sigma. Lean manufacturing focuses on speed and traditional Six Sigma focuses on quality. By combining the two, the result is better quality faster. ." 3M also provided its outlook for 2007 sales and earnings. The company expects 2007 per share earnings to be in the range of $5.20 to $5.45, which includes a net gain, after costs for known restructuring actions, of approximately $0.60 to $0.70 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share due to the sale in the first quarter of the company's branded pharmaceuticals business in Europe. Also included in this range is an estimated $0.21 per share due to expensing of stock options. 3M also expects full-year local-currency sales growth, adjusted for the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of its global branded pharmaceuticals business, to be between 6 and 10 percent, which includes approximately 1.5 percentage points due to acquisitions closed as of this date. Including the global branded pharmaceuticals sales in 2006, total local-currency sales growth for 2007 is expected to be between 2 and 6 percent. George W. Buckley, and Patrick D. Campbell, 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. 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 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," "will," 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) competitive conditions and customer preferences; (3) foreign currency exchange rates and fluctuations in those rates; (4) the timing and acceptance of new product offerings; (5) 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); (6) 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; (7) generating less productivity improvements than estimated; and (8) 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 significant developments that could occur in the legal and regulatory 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 Dec. 31, 2005 and the Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 2006, June 30, 2006 and Sept. 30, 2006 (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 Part I, Item 1A (Annual Report) and Part II, Item 1A (Quarterly Report), "Risk Factors." 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. 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, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti. Serving customers in more than 200 countries around the world, the people of 3M use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications; 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. [TABLE OMITTED] [TABLE OMITTED] In total, in the fourth quarter of 2006, these special items negatively impacted: - Cost of sales by $143 million - Selling, general and administrative expenses by $176 million - Research, development and related expenses by $170 million In addition: - The gain on sale in the fourth quarter of 2006 of $1.074 billion is recorded on a separate line of the Consolidated Statement of Income - Special items in the second and third quarter of 2006 negatively impacted selling, general and administrative expenses by $62 million. The reconciliation provided below reconciles the non-GAAP operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. measure by business segment with the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measure for the three months and twelve months ended Dec. 31, 2006. [TABLE OMITTED] The reconciliation provided below reconciles the non-GAAP financial measures with the most directly comparable GAAP financial measures for the three months and twelve months ended Dec. 31, 2005. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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