SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 10-Q
FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended September 30, 1993 Commission file
number:1-3285
------------------------------
MINNESOTA MINING AND MANUFACTURING COMPANY
State of Incorporation: Delaware I.R.S. Employer Identification
No. 41-0417775
Executive offices: 3M Center, St. Paul, Minnesota
55144
Telephone number: (612) 733-1110
------------------------------
Indicate by check mark whether the Registrant (1) has filed
all reports
required to be filed by Section 13 or 15(d) of the Securities
Act of 1934
during the preceding 12 months (or for such shorter period
that the
Registrant was required to file such reports), and (2) has
been subject to
such filing requirements for the past 90 days. Yes X . No .
------------------------------
On September 30, 1993, there were 215,790,760 shares of the
Registrant's
common stock outstanding.
This document contains 15 pages.
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF INCOME
(Amounts in millions, except per-share data)
(Unaudited)
Three months ended Nine
months ended
September 30
September 30
1993 1992
1993 1992
------ ------
- - ------- -------
Net Sales $3,481 $3,551
$10,538 $10,508
Operating Expenses
Cost of goods sold 2,167 2,134
6,410 6,307
Selling, general and
administrative expenses 859 905
2,627 2,663
Total 3,026 3,039
9,037 8,970
------ ------
- - ------- -------
Operating Income 455 512
1,501 1,538
Other Income and Expense
Interest expense 11 20
37 61
Investment and other
income -- net (60) (15)
(90) (16)
Total (49) 5
(53) 45
Income Before Income Taxes,
Minority Interest and
Cumulative Effect of
Accounting Changes 504 507
1,554 1,493
Provision For Income Taxes 180 177
552 527
Minority Interest 8 6
25 19
------ ------
- - ------- -------
Income Before Cumulative
Effect of Accounting
Changes 316 324
977 947
Cumulative Effect of
Accounting Changes - -
- - - 3
Net Income $ 316 $ 324 $
977 $ 944
====== ======
======= =======
Average Number of Common
Shares Outstanding 216.5 219.1
217.8 219.1
Per Share of Common Stock:
Income Before Cumulative
Effect of Accounting
Changes $ 1.47 $ 1.48 $
4.49 $ 4.33
Cumulative Effect of
Accounting Changes - -
- - - (.02)
Net Income $ 1.47 $ 1.48 $
4.49 $ 4.31
====== ======
======= =======
Cash dividends declared
and paid $ .83 $ .80 $
2.49 $ 2.40
The Notes to Financial Statements are an integral part of this
statement.
-2-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
September 30,
1993
December 31,
(Unaudited)
1992
ASSETS
Current Assets
Cash and cash equivalents $ 318
$ 382
Other securities 347
340
Accounts receivable -- net 2,687
2,394
Inventories
Finished goods 1,232
1,224
Work in process 586
586
Raw materials and supplies 552
505
-------
-------
Total inventories 2,370
2,315
Other current assets 723
778
-------
-------
Total current assets 6,445
6,209
Investments 465
452
Property, Plant and Equipment 11,468
10,828
Less accumulated depreciation (6,622)
(6,036)
Property, plant and equipment -- net 4,846
4,792
Other Assets 473
502
Total $12,229
$11,955
=======
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 762
$ 836
Income taxes 274
299
Short-term debt 796
739
Other current liabilities 1,572
1,367
-------
-------
Total current liabilities 3,404
3,241
Other Liabilities 1,543
1,428
Long-term Debt 682
687
Stockholders' Equity
Common stock, no par, 236,008,264
shares issued 296
296
Retained earnings 8,395
8,012
Unearned compensation -- ESOP (484)
(498)
Cumulative translation -- net (242)
(198)
Less cost of treasury stock --
September 30, 1993, 20,217,504 shares;
December 31, 1992, 16,974,214 shares (1,365)
(1,013)
Stockholders' Equity -- net 6,600
6,599
Total $12,229
$11,955
=======
=======
The Notes to Financial Statements are an integral part of this
statement.
-3-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Nine
months ended
September 30
- - -------------------
1993
1992*
-------
-------
Cash Flows from Operating Activities:
Net income $ 977
$ 944
Adjustments to reconcile net income
to net cash provided by operating activities:
Cumulative effect of adopting SFAS Nos. 106
and 109 -
103
Legal settlement 129
-
Depreciation and amortization 779
818
Working capital changes (358)
(165)
Other 73
37
- - -----------------------------------------------------------------
- - ------------
Net cash provided by operating activities 1,600
1,737
Cash Flows from Investing Activities:
Capital expenditures (806)
(968)
Disposals of property, plant and equipment 50
51
Other (11)
8
- - -----------------------------------------------------------------
- - ------------
Net cash used in investing activities (767)
(909)
Cash Flows from Financing Activities:
Net change in short-term debt 93
(133)
Repayment of long-term debt ( 63)
(173)
Proceeds from long-term debt 20
136
Purchases of treasury stock (546)
(179)
Reissuances of treasury stock 143
133
Payment of dividends (543)
(526)
Other 1
(16)
- - -----------------------------------------------------------------
- - ------------
Net cash used in financing activities (895)
(758)
Effect of exchange rate changes on cash (2)
(9)
- - -----------------------------------------------------------------
- - ------------
Net increase (decrease) in cash and
cash equivalents (64)
61
Cash and cash equivalents at beginning of year 382
258
- - -----------------------------------------------------------------
- - ------------
Cash and cash equivalents at end of period $ 318
$ 319
=================================================================
============
* Includes cash flows of the international companies for the
eleven-month
period November 1, 1991, to September 30, 1992.
The Notes to Financial Statements are an integral part of this
statement.
-4-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The interim financial statements are unaudited but, in the
opinion
of management, reflect all adjustments necessary for
a fair
presentation of financial position, results of operations
and cash
flows for such periods. These adjustments consist of
normal,
recurring items. The results of operations for any interim
period
are not necessarily indicative of results for the full
year. The
condensed consolidated financial statements and notes are
presented
as permitted by Form 10-Q and do not contain certain
information
included in the company's annual consolidated financial
statements
and notes. This Form 10-Q should be read in conjunction
with the
company's consolidated financial statements and notes
incorporated
by reference in the 1992 Annual Report on Form 10-K.
Effective January 1, 1992, 3M's international companies
changed
their fiscal year-end from October 31 to December 31 and 3M
adopted
two new accounting standards, Statement of Financial
Accounting
Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement
Benefits Other Than Pensions," and SFAS No. 109,
"Accounting for
Income Taxes." The first, second and third quarter 1992
financial
statements were restated in early 1993 to reflect these
changes.
All three changes were accounted for as cumulative
effects of
accounting changes. As a result of the change in the
international
companies' fiscal year-end, the cash flows of the
international
companies for the eleven-month period November 1,
1991, to
September 30, 1992, are included in the Consolidated
Statement of
Cash Flows for the period ended September 30, 1992.
The company received $51 million in the third quarter of
1993 as a
result of the resolution of several income tax
claims. The
recovery included $30 million of interest which was
recorded as
income in the third quarter.
In the third quarter of 1993 the company took a charge
of $25
million for the cost of planned plant
rationalizations. The
company also incurred more than $10 million for
voluntary
separations, primarily in cost of goods sold.
On September 17, 1993, the company entered into a
commitment to
issue C$150 million of five-year Eurobonds. The debt was
issued on
October 15, 1993, subsequent to the end of the third
quarter. The
debt was swapped into $114 million at an all-in fixed cost
of 4.81
percent.
Coopers & Lybrand, the company's independent
accountants, have
performed a review of the unaudited interim financial
statements
included herein and their report thereon accompanies this
filing.
-5-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
This Quarter
------------
Worldwide sales for the third quarter totaled $3.481
billion, a
decrease of 2.0 percent from $3.551 billion in the third
quarter
last year. Net income decreased 2.4 percent to $316
million, or
$1.47 per share, compared with $324 million, or $1.48 per
share, in
the same quarter last year.
Worldwide selling prices declined about 2 percent compared
to the
third quarter of 1992, mainly because of competition in the
Memory
Technologies Group. U.S. prices declined about 2 percent,
while
international prices declined about 1 percent.
Currency
translation decreased international sales by almost 11
percent and
worldwide sales by more than 5 percent.
In the United States, the company's unit sales rose about 5
percent
compared with the third quarter last year. The
Industrial and
Consumer Sector led U.S. volume growth with solid gains
in its
commercial and consumer products, tape, and specialty
chemical
businesses. Volume also increased in the Information,
Imaging and
Electronic Sector, paced by growth in its electronic
products,
computer disks, and visual systems businesses. Life
Sciences
Sector volume increased slightly with solid growth
in its
reflective materials, pharmaceuticals and dental businesses
offset
by declines in disposable products and the Medical Products
Group.
Outside the United States, unit volume increased about 6
percent.
Volume rose about 2 percent in Europe with increases in
the United
Kingdom, France and Italy partially offset by declines in
Germany.
In the Asia Pacific area, volume was up about 9 percent.
Volume in
Japan was up only 2 percent, but volume growth in the rest
of Asia
was more than 25 percent. In Latin America, volume was
up more
than 20 percent, continuing a string of solid gains
there. Canada
and Africa also reported volume gains.
Cost of goods sold, which includes manufacturing,
research and
development, and engineering, was 62.2 percent of sales,
up 2.1
percentage points from the third quarter last year. This
increase
was due to lower selling prices, a charge of $25 million
for plant
rationalizations, and negative currency effects. The
company also
incurred more than $10 million for voluntary separations,
primarily
in cost of goods sold.
Selling, general, and administrative spending of $859
million was
24.7 percent of sales. This was a decline of
eight-tenths of a
percentage point from a year ago and the best level
in eight
quarters. SG&A costs were helped by continued emphasis
on cost
control.
Worldwide operating income was $455 million in the third
quarter,
down 11.0 percent from the same quarter last year. In
addition to
-6-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
$25 million of plant rationalization charges, currency
effects
reduced operating income by $32 million. Excluding
those two
factors, operating income for the quarter was basically
flat.
U.S. operating income was up about 4 percent and operating
margins
improved by three-tenths of a percentage point. The
U.S. was
helped by higher unit sales volume, lower raw material
costs and
lower employment levels. All three U.S. business
sectors
contributed to this operating income increase.
International operating income declined nearly 25
percent and
margins were down 3 percentage points. This decrease was
due to
negative currency effects, plant rationalization charges
and the
economic difficulties in Europe and Japan. Excluding
currency and
plant rationalization charges, operating income was down
about 4
percent.
Interest expense of $11 million in the third quarter of
1993 was
$9 million lower than in the same quarter last year. This
decline
was mainly due to lower interest rates than in the same
quarter
last year. Investment and other income showed an
improvement of
$45 million from the third quarter last year, with $30
million of
this benefit due to interest received from the
resolution of
several income tax claims. The remaining $15 million
benefit was
mainly due to improved investment results and positive
currency
transaction effects.
The third-quarter 1993 worldwide effective tax rate
was 35.5
percent, up six-tenths of a point from the third-quarter
rate last
year and up two-tenths of a point from the rate for 1992
overall.
The recently enacted 1 percent increase in the United
States
corporate tax rate has been effectively offset in 1993
by the
extension of the R&D tax credit and by the revaluation of
our net
deferred tax assets under SFAS No. 109.
The company estimates that changes in the value of the
U.S. dollar
reduced net income by $16 million, or 8 cents per share,
in the
third quarter compared to the corresponding quarter of
1992. This
estimate includes the effect of translating sales and
profits from
local currencies into U.S. dollars, the costs in local
currencies
of transferring goods between the parent company in the
United
States and international companies, and transaction
gains and
losses in countries not considered to be highly
inflationary.
Year-to-date
------------
On a year-to-date basis, worldwide sales totaled $10.538
billion,
an increase of 0.3 percent from $10.508 billion in the
first nine
months of last year. Year-to-date net income was $977
million in
1993, up 3.5 percent from $944 million in 1992. Earnings
per share
increased 4.2 percent to $4.49 per share from $4.31 per
share last
year.
-7-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Volume growth for the first nine months of 1993 was 5
percent in
both United States and international operations. U.S.
prices
declined nearly 2 percent, while international prices
declined more
than 1 percent. Currency translation decreased
international sales
by more than 6 percent and worldwide sales by more than 3
percent.
Cost of goods sold was $6.410 billion for the first nine
months, an
increase of 1.6 percent from $6.307 billion in 1992. Cost
of goods
sold was 60.9 percent of sales, up eight-tenths of a point
from the
same period last year. The factors that influenced gross
margins
for the third quarter were the same factors that affected
year-to-
date results.
Selling, general, and administrative spending of $2.627
billion for
the first nine months was 24.9 percent of sales. This
is down
four-tenths of a point from 25.3 percent of sales in
the same
period last year. In addition to cost control, the
year-to-date
SG&A percentage was helped by lower voluntary separation
costs.
Worldwide operating income decreased 2.4 percent to $1.501
billion
in 1993 from $1.538 billion in 1992. Operating income
in the
United States was up 11.2 percent and margins improved
by nine-
tenths of a percentage point. International operating
income
declined 12.5 percent and margins were down 1.7
percentage points
due to negative currency effects, plant rationalization
charges and
the economic weakness in Europe and Japan. Worldwide
employment
levels have declined about 1,400 compared with September
of 1992
and by 435 people from the end of 1992.
Interest expense was $37 million for the first nine months
of 1993,
down from $61 million in 1992. This decline was mainly
due to
lower interest rates. Investment and other income was $90
million
in the first nine months of 1993, an improvement of $74
million
compared to the same period last year. This change was
due to
several factors, including $30 million of interest
from the
resolution of several income tax claims, improved
investment
results, and the positive impact of currency transaction
effects.
****
Looking ahead, the company continues to monitor
worldwide
economies, particularly the recessions in Europe and Japan
where it
has significant operations. The company's economic outlook
for the
fourth quarter of the year does not anticipate
significant
improvements in either of these two areas. The
company also
expects a continuation of relatively slow economic growth
in the
United States during the fourth quarter of the year.
The stronger dollar is expected to continue to hamper
earnings
growth in the fourth quarter. The company estimates that
currency
effects, based on the levels at the end of September,
could reduce
-8-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
fourth quarter 1993 earnings by an estimated 8 cents
per share
compared to the same quarter last year.
Assuming that overall economic conditions are in line
with the
company's expectations and that currency values remain
relatively
stable, the company anticipates an increase in earnings
for the
full year of 1993 compared to 1992.
Volume growth, productivity improvements and favorable raw
material
prices should benefit full-year 1993 results.
Investment in
research and development will continue in order to help the
company
meet its goal of 30 percent of sales coming from
products
introduced in the last four years. The company
continues to
aggressively explore cost-reduction and
rationalization
opportunities around the world in addition to its
continuing
emphasis on management of SG&A spending. Worldwide
employment by
the end of the year could be about 1,000 lower than 1992
year-end
levels.
FINANCIAL CONDITION AND LIQUIDITY
The company's financial condition and liquidity remain
strong.
Working capital increased $73 million to $3.041 billion
from $2.968
billion as of December 31, 1992. The accounts receivable
average
days sales outstanding, which averages monthly sales and
receivable
balances within the quarter, was 65 days. The
company's key
inventory index, which represents the number of
months of
inventory, was 3.8 months. The company's current ratio
was 1.9.
All three indices were unchanged from the year-end 1992
numbers.
Total debt increased $52 million from year-end 1992 to
$1.478
billion. As of September 30, 1993, total debt was 22
percent of
stockholders' equity, the same as year-end 1992. The
company's
borrowings continue to maintain AAA long-term ratings.
Return on average stockholders' equity for the quarter was
at 19.2
percent, the same as a year earlier, approaching the
company's goal
of 20 to 25 percent. Return on capital employed for the
quarter
was 17.6 percent, down from 19.7 percent in the
comparable 1992
period. The company's goal is 27 percent or better.
Due to the change in the financial reporting period
for the
international companies, the September 30, 1992,
Consolidated
Statement of Cash Flows includes the cash provided or used
by 3M's
international companies for an eleven-month period
(November 1,
1991 to September 30, 1992). The following table and
discussion
exclude the November 1 to December 31, 1991,
period for
International Operations, so that an analysis can be
made on a
comparative basis.
-9-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
=================================================================
=============
Nine
months ended
September 30
- - ------------------
1993
1992
------
- - ------
Net cash provided by operating activities $1,600
$1,678
Net cash used in investing activities (767)
(812)
Net cash used in financing activities (895)
(883)
Effect of exchange rate changes on cash (2)
(14)
------
- - ------
Net increase (decrease) in cash and cash
equivalents $ (64)
$ (31)
======
======
Capital spending $ 806
$ 875
======
======
Depreciation and amortization $ 779
$ 761
======
======
=================================================================
=============
Net cash provided by operating activities totaled $1.600 billion
in
the first nine months of the year, down $78 million from the
same
period last year. Receipt of a large legal settlement and
higher
income were more than offset by working capital increases,
which
were partially attributable to increases in accounts receivable.
Cash used in investing activities was $767 million, down
$45
million from the same period last year. Capital expenditures
for
the first nine months of 1993 were $806 million, a decrease
of
about 8 percent compared with the same period last year.
The
company expects 1993 capital spending to be less than 1992
levels.
Cash used in financing activities in the first nine months was
$895
million, up $12 million compared with the same period last
year.
The major financing activities include dividend payments
and
treasury stock transactions.
Dividends paid increased 3.2 percent to $543 million in the
first
nine months of this year. The dividend payout ratio declined
to
55.6 percent in the first nine months from 56.9 percent for
the
entire year in 1992.
For the first nine months of this year the company
repurchased
about 5.1 million shares of treasury stock, compared to 1.9
million
shares in the same period last year. The Board of
Directors
authorized the repurchase of up to 6 million shares of 3M
common
stock between June 1, 1993, and May 31, 1994. Of this number,
2.9
million shares remained authorized for repurchase as of
September
30, 1993. Stock repurchases are made to support employee
stock
purchase and management stock ownership plans and for
other
corporate purposes.
The company expects cash generated by normal operations
will
support its growth. With its AAA long-term ratings on its debt,
the company has sufficient borrowing capacity to supplement
cash
flows from operations.
-10-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The company and certain of its subsidiaries
are named
defendants in a number of actions, governmental
proceedings
and claims, including product liability claims
involving
products now or formerly manufactured and sold
by the
company, many of which relate to silicone gel
mammary
prostheses, and some of which claims are
purported or
tentatively certified class actions. In some
cases, these
actions seek damages as well as other relief
which, if
granted, would require substantial expenditures.
Some of these actions raise difficult and complex
factual
and legal issues and are subject to many
uncertainties
and complexities, including, but not limited
to, the
facts and circumstances of each particular
action, the
jurisdiction and forum in which each
action is
proceeding, and differences in
applicable law.
Accordingly, the company is not able to
estimate the
nature and amount of any future liability with
respect to
such actions.
With respect to the above-noted claims involving
silicone
gel mammary prostheses, which have been
instituted
against the company and all of the other
companies that
manufactured implants or the various components
for them,
there has been recent publicity
concerning the
possibility of an industry-wide "global
settlement" of
all present and future claims proposed by Dow
Corning,
certain other defendants and certain plaintiff's
counsel.
The company, which entered the business in
1977 by
purchasing McGhan Medical and then sold that
business in
1984 to a group of investors, including some
of the
original owners pursuant to an agreement which
included
an indemnification of the company against
silicone gel
mammary prosthesis related liabilities, is one of
several
companies that has been participating in
discussions
among defendants to determine the feasibility of
such a
settlement and the allocation of its costs. The
company
does not know at this time whether or not
such a
settlement will be effected, that the
company will
participate, or what share of any such
settlement the
company might bear.
In many of these actions, including the
silicone gel
mammary prosthesis matters, the company believes
that any
resulting liability and defense costs are
covered by
insurance maintained by the company during
applicable
time periods, subject to self-insurance
retentions,
exclusions, and policy limits. To the
extent that
insurers have in some of these cases reserved,
and may
reserve in the future, the right to deny coverage
(i.e.
-11-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
PART II. OTHER INFORMATION
neither admitted nor denied coverage), the company
is not
always able to estimate the amount of recovery
applicable
to these actions. The company may also
possess rights
against third parties for
indemnification or
contribution. Because of the complexities
of these
actions and the extent of insurance applicable to
many of
these actions, the company cannot always
determine its
exposure or its rights against insurers and
other third
parties.
The company is involved in a number of
environmental
actions by governmental agencies asserting
liability for
past waste disposal and other alleged
environmental
damage. The company conducts ongoing
investigations,
assisted by environmental consultants, to
determine
accruals for the probable, estimable
costs of
remediation. The remediation accruals are
reviewed each
quarter and changes are made as appropriate.
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as exhibits
to
this Report.
(11) A statement regarding the computation of
per
share earnings.
(12) A statement regarding the ratio of
earnings
to fixed charges.
(15) A letter from the company's independent
accountants regarding unaudited interim
financial statements.
-12-
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
PART II. OTHER INFORMATION
(b) The company filed a report on Form 8-K dated
June 30,
1993, related to a shelf registration of
medium-term
notes. This filing included the following:
Exhibit 4 Form of Medium-Term Indexed Notes
Due
June 15, 1994.
Exhibit 10 Calculation Agency Agreement,
dated as
of June 24, 1993 between Minnesota
Mining and Manufacturing Company
and
Goldman, Sachs & Co.
None of the other items contained in Part II of Form 10-Q
is
applicable to the company for the quarter ended September
30, 1993.
-13-
<PAGE>
|Coopers |certified public
accountants
|&Lybrand |
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders of Minnesota Mining and Manufacturing
Company:
We have reviewed the accompanying condensed consolidated
balance sheet of
Minnesota Mining and Manufacturing Company and subsidiaries as
of September
30, 1993, and the related condensed consolidated statements
of income for
each of the three- and nine-month periods ended September 30,
1993 and 1992
and cash flows for the nine-month periods ended September 30,
1993 and 1992.
These financial statements are the responsibility of
the company's
management.
We conducted our reviews in accordance with standards
established by the
American Institute of Certified Public Accountants. A
review of interim
financial information consists principally of applying
analytical review
procedures to financial data and making inquiries of persons
responsible for
financial and accounting matters. It is substantially less in
scope than an
audit conducted in accordance with generally accepted auditing
standards, the
objective of which is the expression of an opinion regarding
the financial
statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our reviews, we are not aware of any material
modifications that
should be made to the accompanying condensed
consolidated financial
statements referred to above for them to be in conformity
with generally
accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing
standards, the consolidated balance sheet as of December 31,
1992, and the
related consolidated statements of income and cash flows for
the year then
ended (not presented herein); and in our report dated February
15, 1993, we
expressed an unqualified opinion on those consolidated
financial statements.
In our opinion, the information set forth in the condensed
consolidated
balance sheet as of December 31, 1992 is fairly stated in
all material
respects in relation to the consolidated balance sheet from
which it has been
derived.
COOPERS & LYBRAND
St. Paul, Minnesota
October 27, 1993
-14-
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange
Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the
undersigned thereunto duly authorized.
MINNESOTA MINING AND
MANUFACTURING COMPANY
- - ------------------------------------------
(Registrant)
Date: November 11, 1993
/s/Giulio Agostini
- - -------------------------------------------------
Giulio Agostini, Senior Vice
President, Finance
(Mr. Agostini is the Principal
Financial and
Accounting Officer and has been
duly authorized
to sign on behalf of the
registrant.)
-15-
<PAGE>
<TABLE>
EXHIBIT 11
MINNESOTA MINING AND MANUFACTURING
COMPANY
AND SUBSIDIARIES
EARNINGS PER SHARE OF COMMON
STOCK
<CAPTION> Three Months
Ended Nine Months Ended
September
30, September 30,
- - ------------------------ ------------------------
1993
1992 1993 1992
-----------
- - ----------- ----------- -----------
<S> <C> <C>
<C> <C>
Income before cumulative effect
of accounting changes $316
$324 $977 $947
Cumulative effect of accounting changes -
- - 3
------
- - ------ ------ ------
Net income (millions) $316
$324 $977 $944
======
====== ====== ======
_________________________________________________________________
_____ ____________________________
Primary earnings per share:
Income before cumulative effect
of accounting changes $1.47
$1.48 $4.49 $4.33
Cumulative effect of accounting changes -
- - (0.02)
------
- - ------ ------ ------
Earnings per share $1.47
$1.48 $4.49 $4.31
======
====== ====== ======
Weighted average number of
common shares outstanding 216,460,582
219,079,532 217,817,985 219,094,954
===========
=========== =========== ===========
_________________________________________________________________
_____ ____________________________
Fully diluted earnings per share: (1)<F1>
Income before cumulative effect
of accounting changes $1.45
$1.46 $4.44 $4.27
Cumulative effect of accounting changes -
- - (0.01)
------
- - ------ ------ ------
Earnings per share $1.45
$1.46 $4.44 $4.26
======
====== ====== ======
Weighted average number of
common shares outstanding 216,460,582
219,079,532 217,817,985 219,094,954
Common equivalent shares 2,089,183
2,450,787 2,133,097 2,450,787
-----------
- - ----------- ----------- -----------
Average number of common
shares outstanding and
equivalents 218,549,765
221,530,319 219,951,082 221,545,741
===========
=========== =========== ===========
<FN>
_________________________________________________________________
__________________________________
Primary earnings per share is computed by dividing net
income by the weighted average number
of common shares outstanding for each period. The calculation
excludes the effect of common equivalent
shares resulting from stock options using the treasury stock
method as the effect would not be material.
Fully diluted earnings per share is computed based on the
weighted average number of common
shares and common equivalent shares outstanding for each
period.
<F1> (1) This calculation is submitted in accordance with
Regulation S-K item 601(b)(11) although not
required by APB Opinion No. 15 because it results in
dilution of less than 3%.
</TABLE>
<TABLE>
EXHIBIT 12
MINNESOTA MINING AND
MANUFACTURING COMPANY
AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO
FIXED CHARGES
(Dollars in millions)
<CAPTION>
Nine Months Ended
September 30, 1993
1992 1991 1990 1989 1988
EARNINGS ------------------
- - ------ ------ ------ ------ ------
<S> <C> <C>
<C> <C> <C> <C>
Income Before Income Taxes,
Minority Interest and Cumulative
Effect of Accounting Changes $1,554
$1,947 $1,877 $2,135 $2,099 $1,985
Add:
Interest on debt 37
76 97 98 98 99
Interest component of the ESOP
benefit expense 31
42 44 45 - -
Portion of rent under operating
leases representative of
the interest component 35
47 47 44 35 36
Less:
Equity in undistributed income
of 20-50% owned companies -
(1) (6) 1 4 11
------
- - ------ ------ ------ ------ ------
TOTAL EARNINGS AVAILABLE $1,657
$2,113 $2,071 $2,321 $2,228 $2,109
FOR FIXED CHARGES ======
====== ====== ====== ====== ======
FIXED CHARGES
Interest on debt $37
$76 $97 $98 $98 $99
Interest component of the ESOP
benefit expense 31
42 44 45 - -
Portion of rent under operating
leases representative of
the interest component 35
47 47 44 35 36
------
- - ------ ------ ------ ------ ------
TOTAL FIXED CHARGES $103
$165 $188 $187 $133 $135
======
====== ====== ====== ====== ======
RATIO OF EARNINGS TO FIXED CHARGES 16.09
12.81 11.02 12.42 16.75 15.62
</TABLE>
|Coopers |certified public
accountants
|&Lybrand
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our report dated October 27,
1993, on our
review of interim condensed consolidated financial
information of
Minnesota Mining and Manufacturing Company and
subsidiaries for
the nine-month period ended September 30, 1993, and
included in
the Form 10-Q for the period then ended, is
incorporated by
reference in the Company's registration statements on
Form S-8
(Registration Nos. 2-78422, 33-14791, 33-48690 and
33-49842), and
Form S-3 (Registration No. 33-48089). Pursuant to
Rule 436(c),
under the Securities Act of 1933, this report
should not be
considered a part of the registration statements
prepared or
certified by us within the meaning of Sections 7 and
11 of that
Act.
COOPERS & LYBRAND
St. Paul, Minnesota
November 11, 1993
