3M Releases Additional Information on
Fourth-Quarter, Year 2000 Results
ST. PAUL, Minn., Jan. 24 3M , as it indicated
last week in its discussion of fourth-quarter 2000 results, today issued
additional financial information for the quarter and year 2000. This
information follows.
3M, as discussed in its January 17, 2001, press release of fourth-quarter
2000 results (excluding non-recurring items), has now issued additional
financial information for the quarters and years 2000 and 1999. This document
does not contain certain information that will be included in the company's
2000 Annual Report on Form 10-K, which will be published at a later date.
Reclassifications:
Certain amounts have been reclassified to conform with the current
presentation. Research, development and related expenses have been
reclassified from cost of sales and are now separately presented. Pursuant to
FASB Emerging Issues Task Force Issue No. 00-10, Accounting for Shipping and
Handling Fees and Costs, the company has also reclassified freight billed to
customers from selling, general and administrative expenses to net sales, and
has reclassified related freight costs from selling, general and
administrative expenses to cost of sales.
Revenue Recognition:
During the fourth quarter of 2000, the company changed its revenue
recognition policy. The company's previous policy stated that revenue is
recognized upon shipment of goods to customers and upon performance of
services. Essentially, the new policies recognize that the risks and rewards
of ownership in many transactions do not substantively transfer to customers
until the product has been delivered, regardless of whether or not legal title
has transferred. In addition to this change in accounting that affects a
substantial portion of its product sales, the company has revised aspects of
its accounting for services provided in several of its smaller businesses.
These new policies are consistent with the guidance contained in SEC Staff
Accounting Bulletin No. 101. The effect of these changes in revenue
recognition policies, as of January 1, 2000, has been reported as the
cumulative effect of an accounting change in the fourth quarter of 2000. This
change did not have a significant effect on previously reported 2000 quarters.
Non-recurring Items - Fourth Quarter:
The company had several significant non-recurring items in the fourth
quarter of 2000 which reduced net income by $121 million, or $.30 per share.
Cost of sales includes $90 million of expenses related to the company's
previously announced intentions to phase-out perfluorooctanyl chemistry, the
write down of certain corporate assets and acquisition related expenses. Other
expense (income) -- net includes a $16 million gain from the sale of
securities. These items reduced operating income by $74 million and net income
by $46 million. The cumulative effect of an accounting change related to
revenue recognition, net of taxes, amounted to $75 million. Without these
items, net income would have been $447 million, or $1.12 per share. The
schedule that follows reconciles the impact of these non-recurring items on
our consolidated statement of income.
Supplemental Unaudited Consolidated Statement of Income Information
(Millions, except per-share amounts)
Three months ended Three months ended
December 31, 2000 December 31, 1999
Excluding Excluding
non- Non- non- Non-
recurring recurring Reported recurring recurring Reported
items items total items items total
Operating
income (loss) $ 721 $ (74) $ 647 $ 742 $ -- $ 742
Other expense 19 -- 19 15 -- 15
Income (loss) before
income taxes,
minority interest
and cumulative
effect of
accounting change $ 702 $ (74) $ 628 $ 727 $ -- $ 727
Provision (benefit)
for income taxes 232 (28) 204 256 -- 256
Effective tax rate 33.1% 32.5% 35.2% 35.2%
Minority interest 23 -- 23 27 -- 27
Income (loss) before
cumulative effect
of accounting
change $ 447 $ (46) $ 401 $ 444 $ -- $ 444
Cumulative effect
of accounting
change - net of tax -- (75) (75) -- -- --
Net income (loss) $ 447 $(121) $ 326 $ 444 $ -- $ 444
Per share-diluted $1.12 $(.30) $ .82 $1.10 $ -- $1.10
Non-recurring Items - Annual Period:
Non-recurring items during 2000 decreased net income by $90 million, or
$.23 per share. Non-recurring items during 1999 increased net income by
$52 million, or $.13 per share. The schedule that follows reconciles the
impact of these non-recurring items on our consolidated statement of income.
Supplemental Unaudited Consolidated Statement of Income Information
(Millions, except per-share amounts)
Year ended Year ended
December 31, 2000 December 31, 1999
Excluding Excluding
non- Non- non- Non-
recurring recurring Reported recurring recurring Reported
items items total items items total
Operating
income (loss) $3,081 $ (23) $3,058 $2,856 $ 100 $2,956
Other expense 84 -- 84 76 -- 76
Income (loss) before
income taxes,
minority interest
and cumulative
effect of
accounting change $2,997 $ (23) $2,974 $2,780 $ 100 $2,880
Provision (benefit)
for income taxes 1,033 (8) 1,025 984 48 1,032
Effective tax rate 34.5% -- 34.5% 35.4% 47.8%
35.8%
Minority interest 92 -- 92 85 -- 85
Income (loss) before
cumulative effect
of accounting
change $1,872 $ (15) $1,857 $1,711 $ 52 $1,763
Cumulative effect
of accounting
change - net of tax -- (75) (75) -- -- --
Net income (loss) $1,872 $ (90) $1,782 $1,711 $ 52 $1,763
Per share-diluted $ 4.68 $ (.23) $ 4.45 $ 4.21 $ .13 $ 4.34
Minnesota Mining and Manufacturing Company and Subsidiaries
Consolidated Statement of Income
(Amounts in millions, except per-share amounts)
(Unaudited)
Three months Year
ended ended
December 31 December 31
2000 1999 2000 1999
Net sales $4,136 $4,047 $16,724 $15,748
Operating expenses
Cost of sales 2,220 2,053 8,787 8,126
Selling, general and
administrative expenses 1,009 970 3,963 3,712
Research, development and
related expenses 276 284 1,101 1,056
Restructuring credit -- (2) -- (28)
Other expense (income) (16) -- (185) (74)
Total 3,489 3,305 13,666 12,792
Operating income 647 742 3,058 2,956
Other income and expense
Interest expense 30 26 111 109
Interest income (11) (11) (27) (33)
Total 19 15 84 76
Income before income taxes, minority
interest and cumulative effect
of accounting change 628 727 2,974 2,880
Provision for income taxes 204 256 1,025 1,032
Minority interest 23 27 92 85
Income before cumulative effect
of accounting change 401 444 1,857 1,763
Cumulative effect of
accounting change (75) -- (75) --
Net income $ 326 $ 444 $ 1,782 $ 1,763
Weighted average common
shares outstanding - basic 394.5 400.0 395.7 402.0
Earnings per share - basic
Income before cumulative effect $ 1.02 $ 1.11 $ 4.69 $ 4.39
Cumulative effect (.19) -- (.19) --
Net income $ .83 $ 1.11 $ 4.50 $ 4.39
Weighted average common
shares outstanding - diluted 399.6 404.8 399.9 406.5
Earnings per share - diluted
Income before cumulative effect $ 1.00 $ 1.10 $ 4.64 $ 4.34
Cumulative effect (.18) -- (.19) --
Net income $ .82 $ 1.10 $ 4.45 $ 4.34
Minnesota Mining and Manufacturing Company and Subsidiaries
Consolidated Statement of Income
(Amounts in millions, except per-share amounts)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
2000 1999 2000 1999
Net sales $4,270 $4,021 $12,588 $11,701
Operating expenses
Cost of sales 2,295 2,072 6,567 6,073
Selling, general and
administrative expenses 1,000 922 2,954 2,742
Research, development and
related expenses 275 262 825 772
Restructuring credit -- (26) -- (26)
Other expense (income) (119) 30 (169) (74)
Total 3,451 3,260 10,177 9,487
Operating income 819 761 2,411 2,214
Other income and expense
Interest expense 29 26 81 83
Interest income (4) (7) (16) (22)
Total 25 19 65 61
Income before income taxes
and minority interest 794 742 2,346 2,153
Provision for income taxes 274 260 821 776
Minority interest 21 23 69 58
Net income $ 499 $ 459 $ 1,456 $ 1,319
Weighted average common
shares outstanding - basic 395.1 402.1 396.1 402.5
Earnings per share - basic $ 1.26 $ 1.14 $ 3.67 $ 3.28
Weighted average common
shares outstanding - diluted 399.0 406.8 400.0 406.5
Earnings per share - diluted $ 1.25 $ 1.13 $ 3.64 $ 3.25
Minnesota Mining and Manufacturing Company and Subsidiaries
Consolidated Statement of Income
(Amounts in millions, except per-share amounts)
(Unaudited)
Three months ended Six months ended
June 30 June 30
2000 1999 2000 1999
Net sales $4,243 $3,885 $8,318 $7,680
Operating expenses
Cost of sales 2,181 2,010 4,272 4,001
Selling, general and
administrative expenses 998 916 1,954 1,820
Research, development and
related expenses 287 259 550 510
Other income - net -- (104) (50) (104)
Total 3,466 3,081 6,726 6,227
Operating income 777 804 1,592 1,453
Other income and expense
Interest expense 26 26 52 57
Interest income (6) (7) (12) (15)
Total 20 19 40 42
Income before income taxes
and minority interest 757 785 1,552 1,411
Provision for income taxes 265 291 547 516
Minority interest 22 18 48 35
Net income $ 470 $ 476 $ 957 $ 860
Weighted average common
shares outstanding - basic 395.6 403.2 396.6 402.8
Earnings per share - basic $ 1.19 $ 1.18 $ 2.41 $ 2.14
Weighted average common
shares outstanding - diluted 399.2 407.4 400.5 406.5
Earnings per share - diluted $ 1.18 $ 1.17 $ 2.39 $ 2.12
Minnesota Mining and Manufacturing Company and Subsidiaries
Consolidated Statement of Income
(Amounts in millions, except per-share amounts)
(Unaudited)
Three months ended
March 31
2000 1999
Net sales $4,075 $3,795
Operating expenses
Cost of sales 2,091 1,991
Selling, general and
administrative expenses 956 904
Research, development and
related expenses 263 251
Restructuring credit -- --
Other expense (income) (50) --
Total 3,260 3,146
Operating income 815 649
Other income and expense
Interest expense 26 31
Interest income (6) (8)
Total 20 23
Income before income taxes
and minority interest 795 626
Provision for income taxes 282 225
Minority interest 26 17
Net income $ 487 $ 384
Weighted average common
shares outstanding - basic 397.7 402.3
Earnings per share - basic $ 1.22 $ .95
Weighted average common
shares outstanding - diluted 401.9 405.9
Earnings per share - diluted $ 1.21 $ .95
