UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended September 30, 1994
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 Exchange 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, 1994, there were 420,493,643 shares of the
Registrant's common stock outstanding.
This document contains 19 pages.
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
1994 1993 1994 1993
Net Sales $3,820 $3,481 $11,224 $10,538
Operating Expenses
Cost of goods sold 2,282 2,167 6,697 6,410
Selling, general and
administrative expenses 964 859 2,834 2,627
Total 3,246 3,026 9,531 9,037
Operating Income 574 455 1,693 1,501
Other Income and Expense
Interest expense 25 11 63 37
Investment and other
income - net (4) (60) (20) (90)
Implant litigation - net -- -- 35 --
Total 21 (49) 78 (53)
Income Before Income Taxes
and Minority Interest 553 504 1,615 1,554
Provision for Income Taxes 199 180 581 552
Minority Interest 13 8 44 25
Net Income $ 341 $ 316 $ 990 $ 977
Average Number of Common
Shares Outstanding 421.4 432.9 423.8 435.6
Earnings Per Share $ .81 $ .73 $ 2.34 $ 2.24
Cash dividends declared
and paid per share $ .440 $ .415 $ 1.320 $ 1.245
Share and per-share data reflect the two-for-one stock split
effective March 15, 1994.
The Notes to Financial Statements are an integral part of this
statement.
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
Sept. 30,
ASSETS 1994 December 31,
Current Assets (Unaudited) 1993
Cash and cash equivalents $ 304 $ 274
Other securities 183 382
Accounts receivable - net 2,986 2,610
Inventories
Finished goods 1,502 1,246
Work in process 672 604
Raw materials and supplies 474 551
Total inventories 2,648 2,401
Other current assets 742 696
Total current assets 6,863 6,363
Investments 537 455
Property, Plant and Equipment 12,418 11,488
Less accumulated depreciation (7,401) (6,658)
Property, plant and equipment - net 5,017 4,830
Other Assets 906 549
Total $13,323 $12,197
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 884 $ 878
Income taxes 148 290
Short-term debt 936 697
Other current liabilities 1,598 1,417
Total current liabilities 3,566 3,282
Other Liabilities 2,158 1,607
Long-term Debt 939 796
Stockholders' Equity
Common stock, no par, 472,016,528
shares issued 296 296
Retained earnings 8,887 8,500
Unearned compensation - ESOP (464) (479)
Cumulative translation - net (112) (331)
Net unrealized loss - debt and equity securities (7) --
Less cost of treasury stock -
September 30, 1994, 51,522,885 shares;
December 31, 1993, 42,537,890 shares (1,940) (1,474)
Stockholders' Equity - net 6,660 6,512
Total $13,323 $12,197
Share data reflect the two-for-one stock split effective March 15, 1994.
The Notes to Financial Statements are an integral part of this statement.
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Nine months ended
September 30
1994 1993
Cash Flows from Operating Activities:
Net income $ 990 $ 977
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 802 779
Working capital and other changes (356) (156)
Net cash provided by operating activities 1,436 1,600
Cash Flows from Investing Activities:
Capital expenditures (797) (806)
Proceeds from sale of property, plant and equipment 33 50
Other (56) (11)
Net cash used in investing activities (820) (767)
Cash Flows from Financing Activities:
Net change in short-term debt 237 94
Repayment of long-term debt (57) (63)
Proceeds from long-term debt 303 20
Purchases of treasury stock (617) (546)
Reissuances of treasury stock 109 143
Payment of dividends (559) (543)
Net cash used in financing activities (584) (895)
Effect of exchange rate changes on cash (2) (2)
Net increase (decrease) in cash and
cash equivalents 30 (64)
Cash and cash equivalents at beginning of year 274 382
Cash and cash equivalents at end of period $ 304 $ 318
The Notes to Financial Statements are an integral part of this statement.
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 included in the 1993 Annual Report on Form 10-K.
The share and per-share data contained in this Form 10-Q reflect the
two-for-one common stock split effective March 15, 1994.
Effective January 1, 1994, the company adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."
This adoption will have no impact on the company's results of
operations. The net unrealized gains and losses for available-for-sale
debt and equity securities are separately disclosed as a component of
stockholders' equity. The following accounting policies are updated
from the 1993 Form 10-K:
Other Securities: Other securities consist of marketable securities
and interest-bearing bank deposits with varied maturity dates. These
securities are employed in the company's banking, captive insurance
and cash management operations. Other securities classified as
available-for-sale are reported at fair value and held-to-maturity
securities are reported at amortized cost.
Investments: Investments primarily include assets from captive
insurance and banking operations and from venture capital
investments. Investments classified as available-for-sale are
reported at fair value and held-to-maturity investments are reported
at amortized cost. Other investments are stated at cost, which
approximates fair value.
Also effective January 1, 1994, the company adopted FASB Interpretation
Number (FIN) 39 which requires gross reporting for environmental and
other liabilities, and any related insurance receivable assets. The
presentation of liabilities net of claims for recovery is no longer
appropriate. The impact of this adoption was to increase primarily
"Other Assets" and "Other Liabilities" from year-end 1993 balances.
Earnings for the first nine months ended September 30, 1994, were
negatively impacted by a first quarter net pre-tax charge of $35
million related to mammary implant litigation. The company in the
first quarter of 1994 accrued a liability having a net present value of
$308 million to cover probable liabilities and expenses, and also
recorded a receivable, primarily on the "Other Assets" line of the
Consolidated Balance Sheet, having a nominal value of $273 million, for
probable insurance recoveries. The result of these accounting actions
was a net pre-tax charge to first quarter 1994 earnings of $35 million
($22 million after taxes, or 5 cents per share). See Part II, Item 1,
Legal Proceedings, for additional information on this topic.
On June 16, 1994, the company issued a three-year, $200 million 6.375%
Euronote. This was swapped to yield an all-in cost of 6-month average
LIBOR less 36.5 basis points. On March 29, 1994, the company issued a
$100 million medium-term note at the 5-year treasury rate plus 25 basis
points (6.25%), and put it on a cancelable swap to average LIBOR
floating. On an all-in basis, the rate will average LIBOR less 27
basis points for two years, or for five years, if the swap is not
canceled. If the swap is canceled, the company will pay 6.18 percent
fixed for the final three years.
On October 3, 1994, subsequent to the end of the third quarter, the
company issued a two and one-half year Swiss Franc note with a
settlement date of November 17, 1994. After a currency and interest
rate swap, this will result in approximately $97.5 million at an all-in
cost of the 30-day commercial paper rate less 30 basis points.
Coopers & Lybrand L.L.P., the company's independent accountants, have
performed a review of the unaudited interim financial statements
included herein and their report thereon accompanies this filing.
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
This Quarter
All share and per-share data reflect the two-for-one stock split
effective March 15, 1994.
Worldwide sales for the third quarter totaled $3.820 billion, an
increase of 9.7 percent from $3.481 billion in the third quarter last
year. Worldwide unit sales rose about 10 percent.
In the United States, the company's unit sales rose about 9 percent
compared with the third quarter last year, with all three sectors
showing strong growth. The Information, Imaging and Electronic Sector
had strong gains in its memory technologies and electro-
telecommunications businesses. The Industrial and Consumer Sector
posted solid growth across the board, from tapes, abrasives and
specialty chemicals, to office supplies, consumer products and
automotive systems. Life Sciences Sector volume growth was led by
medical products and the traffic and personal safety businesses.
Internationally, unit volume increased about 11 percent, with all three
sectors showing growth. Volume rose about 6 percent in Europe, with
all major companies contributing to this increase. In the Asia Pacific
area, volume was up about 13 percent. Volume in Japan was up about 3
percent, while volume growth in the rest of Asia rose more than 35
percent. In Latin America, volume was up more than 30 percent. In
Canada, volume increased about 7 percent.
Worldwide selling prices declined about 2 percent compared to the third
quarter of 1993, mainly because of competition in the memory
technologies market. Prices declined about 2 percent in both the
United States and internationally. Currency translation increased
international sales by about 4 percent and worldwide sales by about 2
percent.
Cost of goods sold, which includes manufacturing, research and
development, and engineering, was 59.8 percent of sales, down 2.4
percentage points from the third quarter last year. In the third
quarter last year the company incurred charges of about $35 million for
international plant rationalizations and voluntary separations. Third
quarter 1994 U.S. voluntary separations resulted in about $10 million
in charges. These costs are primarily in cost of goods sold. Cost of
goods sold improved by about one-and-a-half percentage points after
adjusting for these items.
Cost of goods sold was also helped by the 10 percent volume gain, cost-
control efforts and lower raw material costs. Research and development
costs and depreciation costs were both four-tenths of a percentage
point lower than in the third quarter of 1993. These benefits were
partially offset by lower selling prices.
Selling, general and administrative spending of $964 million was 25.2
percent of sales. This was the same as the average for 1993 as a whole
and down slightly from the second quarter of this year. SG&A spending
included investments to sustain rapid growth in Asia and Latin America.
This contributed to a one-half percentage point increase from the same
quarter last year.
Worldwide operating income was $574 million in the third quarter, up
26.2 percent from the same quarter last year. Adjusting for the costs
of plant rationalizations and voluntary separations in cost of goods
sold, operating income rose nearly 20 percent from the third quarter
last year, with a margin improvement of more than one percentage point.
On an adjusted basis, U.S. profits increased about 25 percent from the
same quarter last year, while international profits increased about 13
percent.
Third quarter 1994 interest expense of $25 million was $14 million
higher than in the same quarter last year. This increase was mainly
due to a planned increase in debt along with higher interest rates.
Investment and other income declined $56 million from the third quarter
last year. The third quarter of 1993 contained about $45 million of
non-recurring items, including $30 million of interest income stemming
from the resolution of several income tax claims. The additional $11
million difference was mainly due to a swing in currency transactions
from a benefit of about $5 million dollars in the third quarter last
year to a cost of about $5 million this quarter.
The third-quarter 1994 worldwide effective tax rate was 36.0 percent,
up one-half of a point from the third-quarter rate last year, and up
seven-tenths of a point from the rate for 1993 overall. The higher tax
rate in 1994 is due to a lower level of foreign tax credits and the
accounting benefit in 1993 of revaluing deferred tax assets and
liabilities for the higher 1993 U.S. statutory tax rate.
Net income increased 7.7 percent to $341 million, or $.81 per share,
compared with $316 million, or $.73 per share, in the same quarter last
year. Adjusting for the costs of plant rationalizations and voluntary
separations in cost of goods sold and the non-recurring 1993 items in
investment and other income, net income increased about 12 percent and
earnings per share increased about 15 percent from the same quarter
last year.
The company estimates that changes in the value of the U.S. dollar had
a minimal impact on net income in the third quarter compared to the
corresponding quarter of 1993. 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 $11.224 billion, an
increase of 6.5 percent from $10.538 billion in the first nine months
of last year.
Volume growth for the first nine months of 1994 was 8 percent in the
United States and 9 percent internationally. Prices declined about 2
percent in both the United States and internationally. Currency
translation increased international sales by almost 1 percent and
worldwide sales by less than half a percent.
Cost of goods sold was 59.7 percent of sales, down 1.2 percentage
points 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 $2.834 billion for the
first nine months was 25.2 percent of sales, the same as the average
for 1993 as a whole. This was up three-tenths of a point from the same
period last year.
Worldwide operating income increased 12.8 percent to $1.693 billion, up
from $1.501 billion in the same period of 1993. Operating income in
the United States was up about 14 percent and margins improved by 1.1
percentage points. International operating income was up about 12
percent and margins were up six-tenths of a percentage point. Worldwide
employment levels declined by more than 930 compared with September 30,
1993.
Interest expense was $63 million, up from $37 million in the first nine
months of 1993. This increase was mainly due to a planned increase in
debt along with higher interest rates. Investment and other income was
$20 million in the first nine months of 1994, a decline of $70 million
compared to the same period last year. The first nine months of 1993
included a $30 million benefit from tax settlements, gains from
investments, and other items, many of which were of a non-recurring
nature.
As discussed in the Notes to Financial Statements, mammary implant
litigation resulted in a net pre-tax charge of $35 million in the first
quarter of 1994 ($22 million after taxes). Although there can be no
certainty that the company may not ultimately incur charges in excess
of presently established reserves, the company believes that such
additional charges, if any, will not pose a material risk to the
financial position of the company or its results of operations.
Year-to-date net income was $990 million, or $2.34 per share ($1.012
billion, or $2.39 per share, excluding the first quarter after-tax
charge of $22 million relating to mammary-implant litigation). This
compared with $977 million, or $2.24 per share, in the first nine
months of 1993.
Looking ahead, the company expects good earnings growth to continue in
the fourth quarter. The company expects to benefit from a strong flow
of new products, a sharp focus on customer satisfaction, continuous
productivity improvement, and continued strengthening of the European
economies.
Volume growth, productivity improvements and favorable raw material
costs should benefit full-year 1994 results. Raw material prices are
increasing. The company expects to absorb future increases in raw
material costs through price increases and productivity improvements.
The company expects to accelerate the flow of new products in order to
meet its goal of 30 percent of sales coming from products introduced in
the last four years, while also reducing research and development costs
as a percentage of sales. The company continues to aggressively
explore cost-reduction and rationalization opportunities around the
world. Worldwide employment at the end of this year is expected to be
around 85,000 people, a decline of about 4,500 people over four years.
Capital spending has declined in each of the past two years and is
expected to be flat for total year 1994. As a result, depreciation
expense as a percent of sales should contribute to margin improvement
during the next few years.
FINANCIAL CONDITION AND LIQUIDITY
The company's financial condition and liquidity remain strong.
Working capital increased $216 million to $3.297 billion from $3.081
billion as of December 31, 1993. The accounts receivable average days
sales outstanding was 67 days, up one day from year-end. The company's
key inventory index, which represents the number of months of
inventory, was 4.0 months, and the company's current ratio was 1.9,
both unchanged from year-end.
The adoption of FIN 39 and the mammary implant litigation (refer to the
Notes to Financial Statements) were the primary contributors to the
increase in the "Other Assets" and "Other Liabilities" components of
the Consolidated Balance Sheet compared to year-end 1993 balances.
Total debt increased $382 million from year-end 1993 to $1.875 billion.
As of September 30, 1994, total debt was 28 percent of stockholders'
equity, up from 23 percent at year-end 1993. The company's borrowings
continue to maintain AAA long-term ratings.
Return on average stockholders' equity for the quarter was at 20.6
percent, up from 19.2 percent a year earlier, meeting the company's
goal of 20 to 25 percent. Return on capital employed for the quarter
was 20.8 percent, up from 17.6 percent in the comparable 1993 period.
The company's goal is 27 percent or better.
Net cash provided by operating activities totaled $1.436 billion in the
first nine months of the year, down $164 million from the same period
last year. This decrease was mainly due to the receipt of a large
legal settlement in 1993 of $129 million. Mammary implant litigation
could result in timing differences in the cash flows of future periods.
The company believes that these differences, if any, will not pose a
material risk to the financial position of the company.
Cash used in investing activities was $820 million, up $53 million from
the same period last year. Capital expenditures for the first nine
months of 1994 were $797 million, a decrease of about 1 percent
compared with the same period last year.
Financing activities in both short-term and long-term debt provided net
cash inflows of $483 million, compared to inflows in the same period
last year of $51 million. Treasury stock repurchases were $617 million,
compared to repurchases in the same period last year of $546 million.
The company repurchased about 11.8 million shares of treasury stock in
the first nine months of this year, compared to 10.1 million shares in
the same period last year. The Board of Directors authorized the
repurchase of up to 24 million shares of 3M common stock between
February 14, 1994, and February 10, 1995. Of this number, 15.0 million
shares remained authorized for repurchase as of September 30, 1994.
Stock repurchases are made to support employee stock purchase plans and
for other corporate purposes.
Dividends paid increased 3.0 percent to $559 million in the first nine
months of this year. The dividend payout ratio decreased to 56.5
percent in the first nine months from 57.1 percent for the entire year
in 1993.
The company expects cash generated by normal operations will support
its primary growth initiatives, with ample borrowing capacity to
supplement cash flows from operations. 3M maintains a shelf
registration with the Securities and Exchange Commission that provides
the means to offer medium-term notes not to exceed $601 million. As of
September 30, 1994, $402 million was available for future financial
needs.
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
implants, and some of which claims are purported or
tentatively certified class actions. Mammary implant cases
and claims are discussed separately below. In some actions,
the claimants seek damages as well as other relief which, if
granted, would require substantial expenditures.
The company is involved in a number of environmental
proceedings 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.
Some of these matters raise difficult and complex factual and
legal issues and are subject to many uncertainties,
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 always able to estimate the
nature and precise amount of future liabilities with respect
to such matters.
Mammary Implant Litigation
As of September 30, 1994, the company had been named as a
defendant, often with multiple co-defendants, in 5,883 claims
and lawsuits in various courts, all seeking damages for
personal injuries from allegedly defective breast implants.
These claims and lawsuits purport to represent 14,720
individual claimants. It is not yet certain how many of
these lawsuits and claims involve products manufactured and
sold by the company, as opposed to other manufacturers. The
company entered the business in 1977 by purchasing McGhan
Medical and then sold that business in 1984.
On April 8, 1994, the company and other defendants concluded
provisional agreements with a plaintiffs' negotiating
committee regarding their contributions to a "global
settlement" in the amount of $4.75 billion, previously
announced by the committee and three major defendants in
these claims and lawsuits. The company has agreed that its
maximum commitment of $325 million will be paid into a court-
administered fund within 3 years from the date that the final
order ratifying the global settlement is entered and after
appeals, if any, have been exhausted. On September 1, 1994
the global settlement was approved as fair, reasonable and
adequate by the U.S. District Court, Northern District of
Alabama, which has had jurisdiction over this matter. This
ruling has subsequently been appealed by several third
parties. Plaintiff claims processing continues, and until
the claims processing is complete, the company's unilateral
right of withdrawal continues.
In the first quarter of 1994, the company took a pre-tax
charge of $35 million ($22 million after tax) in recognition
of its best estimate of the probable liabilities for claims
and associated expenses net of the probable amount of
insurance recoverable from its carriers. The company
continues to assess its exposures to litigants and claimants
electing to remove themselves from the global settlement.
Although a number of out-of-court settlements have been
reached and discussions continue with litigants and
claimants, the company's current estimate of its uninsured
financial exposure has not materially changed.
On September 22, 1994 three excess coverage insurers
initiated in the courts of the State of Minnesota a
declaratory judgment action against the company and numerous
insurance carriers seeking adjudication of certain coverage
issues and a determination concerning allocation amongst
insurers for coverage under the terms of the various
insurance policies with possible application. No insurer has
denied coverage, and the company believes that it has
insurance coverage adequate to recover any liabilities and
expenses that may arise from this litigation.
Although there can be no certainty that the company may not
ultimately incur charges in excess of presently established
reserves, the company believes that such additional charges,
if any, will not pose a material risk to the financial
position of the company or its results of operations.
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. Page 17.
(12) A statement regarding the calculation of ratio of
earnings to fixed charges. Page 18.
(15) A letter from the company's independent accountants
regarding unaudited interim financial statements.
Page 19.
None of the other items contained in Part II of Form 10-Q is applicable
to the company for the quarter ended September 30, 1994.
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, 1994, and the related condensed consolidated statements
of income for the three-month and nine-month periods ended September
30, 1994 and 1993, and cash flows for the nine-month periods ended
September 30, 1994 and 1993. 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,
1993, and the related consolidated statements of income and cash flows
for the year then ended (not presented herein); and in our report dated
February 14, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of
December 31, 1993, is fairly stated in all material respects in
relation to the consolidated balance sheet from which it has been
derived.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
St. Paul, Minnesota
October 24, 1994
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 10, 1994
/s/ Giulio Agostini
Giulio Agostini, Senior Vice President,
Finance and Office Administration
(Mr. Agostini is the Principal Financial and
Accounting Officer and has been duly
authorized to sign on behalf of the
registrant.)
EXHIBIT 11
MINNESOTA MINING AND MANUFACTURING COMPANY AND SUBSIDIARIES
EARNINGS PER SHARE OF COMMON STOCK
Three months ended Nine months ended
September 30 September 30
1994 1993 1994 1993
------------ ------------ ------------ ------------
Net income (millions) $341 $316 $990 $977
- --------------------------------------------------------------------------------
Primary earnings per share:
Earnings per share $.81 $.73 $2.34 $2.24
Weighted average number of
common shares outstanding 421,363,545 432,921,164 423,804,773 435,635,970
- --------------------------------------------------------------------------------
Fully diluted earnings
per share: (1)
Earnings per share $.79 $.72 $2.31 $2.22
Weighted average number of
common shares outstanding 421,363,545 432,921,164 423,804,773 435,635,970
Common equivalent shares 4,441,814 4,178,366 4,441,814 4,266,194
----------- ----------- ----------- ----------
Average number of common
shares and equivalents
outstanding 425,805,359 437,099,530 428,246,587 439,902,164
- --------------------------------------------------------------------------------
Share and per-share data reflect the two-for-one stock split effective
March 15, 1994.
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.
(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%.
EXHIBIT 12
MINNESOTA MINING AND MANUFACTURING COMPANY AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
Nine Months
Ended
Sept. 30, Year Year Year Year Year
1994 1993 1992 1991 1990 1989
EARNINGS -------- ------- ------- ------- ------- -------
Income Before Income Taxes,
Minority Interest and
Cumulative Effect of
Accounting Changes $1,615 $2,002 $1,947 $1,877 $2,135 $2,099
Add:
Interest on debt 63 50 76 97 98 98
Interest component of the
ESOP benefit expense 29 41 42 44 45 --
Portion of rent under
operating leases
representative of the
interest component 35 47 47 47 44 35
Less:
Equity in undistributed
income of 20-50% owned
companies 2 -- (1) (6) 1 4
-------- ------- ------- ------- ------- -------
TOTAL EARNINGS AVAILABLE
FOR FIXED CHARGES $1,740 $2,140 $2,113 $2,071 $2,321 $2,228
FIXED CHARGES
Interest on debt 63 50 76 97 98 98
Interest component of the
ESOP benefit expense 29 41 42 44 45 --
Portion of rent under
operating leases
representative of the
interest component 35 47 47 47 44 35
------- ------ ------ ------ ------ ------
TOTAL FIXED CHARGES $127 $138 $165 $188 $187 $133
RATIO OF EARNINGS TO
FIXED CHARGES 13.70 15.51 12.81 11.02 12.42 16.75
EXHIBIT 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our report dated October 24, 1994, on our reviews
of interim condensed consolidated financial information of
Minnesota Mining and Manufacturing Company and subsidiaries (the
Company) for the three-month and nine-month periods ended September
30, 1994 and 1993, and included in the Company's quarterly report
on Form 10-Q for the period ended September 30, 1994, 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.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
St. Paul, Minnesota
November 10, 1994
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME AND THE CONSOLIDATED BALANCE SHEET AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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