The Minnesota Mining and Manufacturing Company (3M) Form 10-K
filed on
March 7, 1994 via EDGAR has been amended (Form 10K/A). As
required, the
entire Item 8 is included in its entirety.
The following was added at the end of Item 8:
Legal Procedings:
Discussion of the legal matters is cross referenced to Form 10-K
Item 3,
Legal Proceedings, and should be considered an integral part of
the
Financial Statements and Notes.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 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
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
ACT:
Name of each
exchange
Title of each class on which
registered
Common Stock, Without Par Value New York Stock
Exchange
Pacific Stock
Exchange
Chicago Stock
Exchange
Note: The common stock of the Registrant is also traded on
the Amsterdam
Stock Exchange, German stock exchanges, Swiss stock exchanges,
the Paris Stock
Exchange and the Tokyo Stock Exchange.
Securities registered pursuant to section 12(g) of the
Act: None
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
.
Indicate by check mark if disclosure of delinquent
filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not
be contained,
to the best of registrant's knowledge, in definitive proxy
or information
statements incorporated by reference in Part III of this Form
10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by
nonaffiliates of the
Registrant, based on the closing price of $107.25 per share as
reported on the
New York Stock Exchange-Composite Index on January 31,
1994, was $23.0
billion.
Shares of common stock outstanding at January 31, 1994:
214,001,230.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following documents are incorporated by
reference to Parts
III and IV of this Form 10-K: (1) Proxy Statement for
registrant's 1994
annual meeting, (2) Form 10-Q for period ended June 30,
1987, and (3)
Registration Nos. 33-29329, 33-48089 and 33-49842.
This document contains 41 pages.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
Reference (pages)
Form 10-K
Data submitted herewith:
Report of Independent Accountants...............
15
Consolidated statements of income for the years ended
December 31, 1993, 1992 and 1991 .............
16
Consolidated balance sheets as of December 31, 1993 and
1992 ...........................................
17
Consolidated statements of cash flows
for the years ended December 31,
1993, 1992 and 1991...........................
18
Notes to financial statements ..................
19-30
Report of Independent Accountants
We have audited the consolidated financial statements and
the financial
statement schedules of Minnesota Mining and Manufacturing
Company and
subsidiaries (the company) as listed in Item 8 and Item 14(a)
of this Form
10-K. These financial statements and financial statement
schedules are the
responsibility of the Company's management. Our responsibility
is to express
an opinion on these financial statements and financial
statement schedules
based on our audits.
We conducted our audits in accordance with generally
accepted auditing
standards. Those standards require that we plan and perform
the audit to
obtain reasonable assurance about whether the financial
statements are free of
material misstatements. An audit includes examining, on a
test basis,
evidence supporting the amounts and disclosures in the financial
statements.
An audit also includes assessing the accounting
principles used and
significant estimates made by management, as well as
evaluating the overall
financial statement presentation. We believe that our
audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in
all material respects, the consolidated financial position of
Minnesota Mining
and Manufacturing Company and subsidiaries as of December 31,
1993 and 1992,
and the consolidated results of their operations and their cash
flows for each
of the three years in the period ended December 31, 1993 in
conformity with
generally accepted accounting principles. In addition, in our
opinion, the
financial statement schedules referred to above, when
considered in relation
to the basic financial statements taken as a whole, present
fairly, in all
material respects, the information required to be included
therein.
As discussed in the Notes to the Financial Statements, the
company changed the
fiscal year-end of its international companies in 1992. The
company also
adopted in 1992 Statements of Financial Accounting
Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions," and
No. 109, "Accounting for Income Taxes."
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
St. Paul, Minnesota
February 14, 1994
20
<TABLE>
<CAPTION>
Consolidated Statement of Income
Minnesota Mining and Manufacturing Company and Subsidiaries
_________________________________________________________________
_________________________________
For the Years Ended December 31, 1993, 1992 and 1991
1993 1992 1991
_______________________________________________________
(Amounts in millions, except per-share data)
<S>
<C> <C> <C>
_________________________________________________________________
_________________________________
Net Sales
$14,020 $13,883 $13,340
_________________________________________________________________
______________________________
Operating Expenses
Cost of goods sold
8,529 8,346 8,058
Selling, general and administrative expenses
3,535 3,557 3,323
Legal settlement
--- (129) ---
Special charges
--- 115 ---
_________________________________________________________________
______________________________
Total
12,064 11,889 11,381
_________________________________________________________________
______________________________
Operating Income
1,956 1,994 1,959
_________________________________________________________________
______________________________
Other Income and Expense
Interest expense
50 76 97
Investment and other income - net
(96) (29) (15)
_________________________________________________________________
______________________________
Total
(46) 47 82
_________________________________________________________________
______________________________
Income Before Income Taxes, Minority Interest and
Cumulative Effect of Accounting Changes
2,002 1,947 1,877
Provision for Income Taxes
707 687 691
Minority Interest
32 24 32
_________________________________________________________________
______________________________
Income Before Cumulative Effect of Accounting Changes
1,263 1,236 1,154
Cumulative Effect of Accounting Changes
--- (3) ---
_________________________________________________________________
______________________________
Net Income
$ 1,263 $ 1,233 $ 1,154
_________________________________________________________________
______________________________
Per-Share Amounts:
Income Before Cumulative Effect of Accounting Changes
$ 5.82 $ 5.65 $ 5.26
Cumulative Effect of Accounting Changes
--- (0.02) ---
_________________________________________________________________
______________________________
Net Income
$ 5.82 $ 5.63 $ 5.26
_________________________________________________________________
______________________________
Average Shares Outstanding
217.2 219.1 219.6
_________________________________________________________________
______________________________
The accompanying Notes to Financial Statements are an integral
part of this statement.
</TABLE>
<TABLE>
<CAPTION>
Consolidated Balance Sheet
Minnesota Mining and Manufacturing Company and Subsidiaries
_________________________________________________________________
______________________
As of December 31, 1993 and 1992
1993 1992
_____________________________________________
(Dollars in millions)
_________________________________________________________________
_______________________
<S>
<C> <C>
Assets
Current Assets
Cash and cash equivalents
$ 274 $ 382
Other securities
382 340
Accounts receivable - net
2,610 2,394
Inventories
2,401 2,315
Other current assets
696 778
_________________________________________________________________
__________
Total current assets
6,363 6,209
Investments
455 452
Property, Plant and Equipment - net
4,830 4,792
Other Assets
549 502
_________________________________________________________________
__________
Total
$12,197 $11,955
_________________________________________________________________
__________
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable
$ 878 $ 836
Payroll
331 310
Income taxes
290 299
Short-term debt
697 739
Other current liabilities
1,086 1,057
_________________________________________________________________
__________
Total current liabilities
3,282 3,241
Other Liabilities
1,607 1,428
Long-Term Debt
796 687
Stockholders' Equity - net
6,512 6,599
Shares outstanding - 1993: 214,739,319;
1992: 219,034,050
_________________________________________________________________
__________
Total
$12,197 $11,955
_________________________________________________________________
__________
The accompanying Notes to Financial Statements are
an integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statement of Cash Flows
Minnesota Mining and Manufacturing Company and Subsidiaries
_________________________________________________________________
____________________________
For the Years Ended December 31, 1993, 1992 and 1991
1993 1992* 1991
____________________________________________________
(Dollars in millions)
_________________________________________________________________
________________________
<S> <C>
<C> <C>
Cash Flows from Operating Activities
Net income
$1,263 $1,233 $1,154
Adjustments to reconcile net income
to net cash provided by operating activities:
Legal settlement
129 (129) ---
Special charges
(29) 115 ---
Cumulative effect of accounting changes-
SFAS Nos. 106 and 109
103 ---
Depreciation
976 1,004 884
Amortization
100 83 85
Deferred income taxes
(86) (111) (117)
Accounts receivable
(327) (142) (155)
Inventories
(161) (78) (21)
Other working capital changes
226 199 79
_________________________________________________________________
___________________________
Net cash provided by operating activities
2,091 2,277 1,909
Cash Flows from Investing Activities
Capital expenditures
(1,112) (1,318) (1,326)
Disposals of property, plant and equipment
53 78 76
Acquisitions and other investments
(71) (59) (35)
Proceeds from divestitures and investments
38 63 88
_________________________________________________________________
___________________________
Net cash used in investing activities
(1,092) (1,236) (1,197)
Cash Flows from Financing Activities
Net change in short-term debt
48 (83) 57
Repayment of long-term debt
(80) (187) (162)
Proceeds from long-term debt
150 139 140
Purchases of treasury stock
(706) (247) (240)
Reissuances of treasury stock
181 177 139
Payment of dividends
(721) (701) (685)
Other
- - --- --- 65
_________________________________________________________________
___________________________
Net cash used in financing activities
(1,128) (902) (686)
Effect of exchange rate changes on cash
21 (15) (62)
_________________________________________________________________
___________________________
Net increase (decrease) in cash and cash equivalents
(108) 124 (36)
Cash and cash equivalents at beginning of year
382 258 294
_________________________________________________________________
___________________________
Cash and cash equivalents at end of year $
274 $ 382 $ 258
_________________________________________________________________
___________________________
*Includes cash flows of international companies for a
14-month period
November 1, 1991 to December 31, 1992. See accounting
changes note on
page 20 for details.
The accompanying Notes to Financial Statements are an
integral part of
this statement.
</TABLE>
Notes to Financial Statements
Accounting Policies
Consolidation: All significant subsidiaries are
consolidated.
Unconsolidated subsidiaries and affiliates are included on the
equity basis.
Cash and Cash Equivalents: Cash and cash equivalents consist
of cash and
temporary investments with maturities of three months or less
when purchased.
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. The securities are stated at cost, which
approximates fair value.
Inventories: Inventories are stated at lower of cost or
market, with cost
generally determined on a first-in, first-out basis.
Investments: Investments primarily include assets from
captive insurance
and banking operations and from venture capital
investments. These
investments are stated at cost, which approximates fair value.
Other Assets: Other assets include goodwill, patents, other
intangibles,
deferred taxes and other noncurrent assets. Other assets are
periodically
reviewed for impairment to ensure that they are
appropriately valued.
Goodwill is generally amortized on a straight-line basis over 10
years. Other
intangible items are amortized on a straight-line basis over
their estimated
economic lives.
Deferred Income Taxes: Deferred income taxes arise from
differences in
basis for tax and financial-reporting purposes.
Revenue Recognition: Revenue is recognized upon shipment
of goods to
customers and upon performance of services.
Depreciation: Depreciation of property, plant and equipment
is generally
computed on a straight-line basis over the estimated useful
lives of these
assets.
Research and Development: Research and development costs
are charged to
operations as incurred and totaled $1.030 billion in 1993,
$1.007 billion in
1992 and $914 million in 1991.
Foreign Currency Translation: Local currencies are generally
considered the
functional currencies outside the United States, except in
countries with
highly inflationary economies. Assets and liabilities are
translated at year-
end exchange rates for operations in local currency
environments. Income and
expense items are translated at average rates of exchange
prevailing during
the year. Translation adjustments are recorded as a
component of
stockholders' equity.
For operations in countries with highly inflationary
economies, certain
financial statement amounts are translated at historical
exchange rates, with
all other assets and liabilities translated at year-end exchange
rates. These
translation adjustments are reflected in the results of
operations. They
decreased net income by $12 million in 1993, increased net
income by $10
million in 1992 and decreased net income by $6 million in 1991.
24
<PAGE>
Accounting Changes
Effective January 1, 1992, 3M's international companies
changed their
reporting period from a fiscal year ending October 31 to a
calendar year
ending December 31. The change was made to aid worldwide
business planning,
increase efficiency and reflect the global nature of the
company's business.
The international companies' results of operations for the
period November 1
to December 31, 1991, are shown in the 1992 Consolidated
Statement of Income
as a cumulative effect of an accounting change. The cash
flows of the
international companies for the 14-month period November 1,
1991, to December
31, 1992, are reflected in the 1992 Consolidated Statement of
Cash Flows.
Effective January 1, 1992, the company adopted Statement
of Financial
Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement
Benefits Other Than Pensions." This statement requires that
the cost of
providing postretirement benefits be accrued over an
employee's service
period. In implementing this standard, the company was required
to accrue the
unfunded obligation. The company had accrued and funded -
under a different
actuarial methodology - a substantial amount of these benefits
since 1977. In
implementing this standard, the company elected to record
the transition
obligation using the immediate recognition option.
Also effective January 1, 1992, the company adopted
SFAS No. 109,
"Accounting for Income Taxes." This statement requires an asset
and liability
approach for financial accounting and reporting of income
taxes. Under this
approach, deferred taxes are recognized for the estimated
taxes ultimately
payable or recoverable based on enacted tax law. Changes in
enacted tax rates
will be reflected in the tax provision as they occur.
Adoption of these accounting changes, in aggregate, did not
have a material
impact on 1992 results of operations.
The table below shows the components of the cumulative effect
of accounting
changes.
_________________________________________________________________
_____________
(Millions, except per-share data)
1992
_________________________________________________________________
_____________
Amount
Per Share
_________________________________________________________________
_____________
Cumulative effect of change in:
Reporting period for international
companies, net of $25 million in
taxes (including tax benefits from
revaluation of certain fixed assets
in Italy) $ 100
$ 0.46
Accounting for other
postretirement benefits, net of
$107 million in taxes (183)
(0.84)
Accounting for income taxes 80
0.36
_________________________________________________________________
_____________
Total $ (3)
$(0.02)
_________________________________________________________________
_____________
Legal Settlement and Special Charges
In December 1992, Johnson & Johnson agreed to pay 3M $129
million in
settlement of a patent lawsuit involving 3M orthopedic casting
materials. 3M
received payment in January 1993.
In 1992, 3M recorded $115 million of special charges
designed to enhance
competitiveness and productivity. About 75 percent of these
charges related
to asset write-downs, including rationalization of manufacturing
operations.
25
<PAGE>
Supplemental Balance Sheet Information
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
Accounts receivable
_________________________________________________________________
_____________
Accounts receivable $ 2,730 $
2,506
Less allowances 120
112
_________________________________________________________________
_____________
Accounts receivable - net $ 2,610 $
2,394
_________________________________________________________________
_____________
Inventories
_________________________________________________________________
_____________
Finished goods $ 1,246 $
1,224
Work in process 604
586
Raw materials and supplies 551
505
_________________________________________________________________
_____________
Total inventories $ 2,401 $
2,315
_________________________________________________________________
_____________
Property, plant and equipment - at cost
_________________________________________________________________
_____________
Land $ 258 $
241
Buildings and leasehold improvements 2,572
2,463
Machinery and equipment 8,305
7,732
Construction in progress 353
392
_________________________________________________________________
_____________
$11,488
$10,828
Less accumulated depreciation 6,658
6,036
_________________________________________________________________
_____________
Property, plant and equipment - net $ 4,830 $
4,792
_________________________________________________________________
_____________
Short-term debt
_________________________________________________________________
_____________
Commercial paper $ 193 $
165
Long-term debt - current portion 79
148
Other borrowings 425
426
_________________________________________________________________
_____________
Total short-term debt $ 697 $
739
_________________________________________________________________
_____________
Other current liabilities
_________________________________________________________________
_____________
Deposits - banking operations $ 291 $
259
Other current liabilities 795
798
_________________________________________________________________
_____________
Total other current liabilities $ 1,086 $
1,057
_________________________________________________________________
_____________
Other liabilities
_________________________________________________________________
_____________
Minority interest in subsidiaries $ 376 $
314
Nonpension postretirement benefits 386
366
Other liabilities 845
748
_________________________________________________________________
_____________
Total other liabilities $ 1,607 $
1,428
_________________________________________________________________
_____________
The carrying amount of short-term debt approximates fair value.
Deposits - banking operations - are primarily demand deposits
and,
as such, the carrying amount approximates fair value.
<PAGE>
Leases
Rental expense under operating leases was $141 million in 1993,
$140 million
in 1992 and $141 million in 1991.
The table below sets forth minimum payments under operating
leases with
noncancelable terms in excess of one year
as of year-end 1993.
_________________________________________________________________
______________
After
(Millions) 1994 1995 1996 1997 1998
1998 Total
_________________________________________________________________
______________
Minimum lease payments $70 $53 $39 $21 $16
$88 $287
_________________________________________________________________
______________
Long-Term Debt
Employee Stock Ownership Plan: In 1989, the company
established an Employee
Stock Ownership Plan (ESOP). The ESOP borrowed $548 million.
Because the
company has guaranteed repayment of the ESOP debt, the debt
and related
unearned compensation are recorded on the Consolidated Balance
Sheet.
Medium-Term Notes: 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 December 31, 1993, $502 million
was available
for future financial needs. The company entered into
interest rate swap
agreements to achieve variable interest rates below U.S.
commercial paper
rates for notes outstanding. The effective rate of
these agreements
approximated 2.5 percent at year-end 1993.
Other Borrowings: These are primarily borrowings of 3M's
international
companies and municipal bond issues in the United States.
Interest rates
range mainly from 2.3 to 11.0 percent.
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
ESOP debt guarantee, 8.13-8.27%, due 1995-2004 $469
$490
Eurobond, 4.81%, due 1998 114
- - ---
Medium-term notes, due 1995 75
115
Other borrowings, due 1995-2025 138
82
_________________________________________________________________
_____________
Total long-term debt $796
$687
_________________________________________________________________
_____________
Maturities of long-term debt for the next five years are as
follows: 1994,
$79 million; 1995, $168 million; 1996, $44 million; 1997, $41
million; and
1998, $159 million.
Interest payments included in the Consolidated Statement of
Cash Flows
totaled $53 million in 1993, $88 million in 1992 and $118
million in 1991.
For the calendar year 1992, interest payments were $79 million.
The company estimates that the fair value of long-term
debt is not
materially different than the carrying amount of this debt.
Other Financial Instruments
The company has entered into interest rate and currency
swaps, as well as
forward interest rate agreements, with face amounts of $605
million and $308
million, respectively, as of December 31, 1993, and 1992. The
company uses
27
<PAGE>
these instruments to manage risk from interest rate and currency
fluctuations
and to lower its cost of borrowing. The unrealized gains
and losses are
deferred until the underlying transactions are realized. As of
December 31,
1993, the unrealized gains and losses were not material.
The company also had foreign exchange forward and option
contracts with face
amounts of $704 million and $785 million, respectively, at
December 31, 1993,
and 1992. The company uses these financial instruments
primarily to hedge
transactions denominated in foreign currencies, thereby
reducing risk from
exchange rate fluctuations in the regular course of its global
business. The
net unrealized gain on these contracts as of December 31,
1993, was not
material.
Income Taxes
_________________________________________________________________
______________
Income Before Income Taxes
_________________________________________________________________
______________
(Millions) 1993 1992
1991
_________________________________________________________________
______________
U.S. $1,390 $1,301
$1,136
International 612 646
741
_________________________________________________________________
______________
Total $2,002 $1,947
$1,877
_________________________________________________________________
______________
Provision for Income Taxes
_________________________________________________________________
______________
(Millions) 1993 1992
1991
_________________________________________________________________
______________
Currently payable
Federal $430 $371
$396
State 74 78
74
International 292 339
343
Deferred
Federal (66) (63)
(110)
State (5) (6)
(9)
International (18) (32)
(3)
_________________________________________________________________
______________
Total $707 $687
$691
_________________________________________________________________
______________
Net deferred tax assets totaled $439 million ($293 million
current) and net
deferred tax liabilities totaled $98 million ($6 million
current) at year-end
1993. The major components of deferred taxes include benefit
costs not
currently deductible of $336 million and accelerated
depreciation for tax
purposes of $362 million.
Income tax payments included in the Consolidated Statement of
Cash Flows
totaled $802 million in 1993, $743 million in 1992 and $867
million in 1991.
For calendar year 1992, income tax payments were $714 million.
At December 31, 1993, there were approximately $2.850 billion of
retained
earnings attributable to our international companies that are
considered to
be permanently invested. No provision has been made for taxes
that might be
payable if these earnings were remitted to the United States.
It is not
practical to determine the amount of incremental tax that might
arise should
these earnings be remitted.
<TABLE>
<CAPTION>
_________________________________________________________________
______________________
Reconciliation of Effective Income Tax Rate 1993
1992 1991
_________________________________________________________________
______________________
<S> <C>
<C> <C>
Statutory U.S. tax rate 35.0%
34.0% 34.0%
State income taxes - net 2.2
2.5 2.3
International taxes 3.0
4.4 4.7
All other - net (4.9)
(5.6) (4.2)
_________________________________________________________________
______________________
Effective worldwide tax rate 35.3%
35.3% 36.8%
_________________________________________________________________
______________________
</TABLE>
<TABLE>
[TEXT]
Stockholders' Equity
Common stock, without par value, of 500,000,000 shares is
authorized, with
236,008,264 shares issued in 1993, 1992 and 1991. Treasury
shares at year-end
totaled 21,268,945 in 1993, 16,974,214 in 1992 and 16,867,905
in 1991. This
stock is reported at cost. Preferred stock, without par value,
of 10,000,000
shares is authorized but unissued. A two-for-one stock
split will be
distributed on or aboutApril 8, 1994to shareholders of recordon
March 15,1994.
<CAPTION>
_________________________________________________________________
___________________________________________
ESOP
Common Retained
Cumulative Unearned Treasury
(Dollars in millions) Stock Earnings
Translation Compensation Stock Total
_________________________________________________________________
___________________________________________
<S> <C> <C>
<C> <C> <C> <C>
Balance, December 31, 1990 $296 $7,106
$ 175 $(530) $ (937) $6,110
Net income 1,154
1,154
Dividends paid ($3.12 per share) (685)
(685)
Reacquired stock (2,733,416 shares)
(240) (240)
Issuances pursuant to stock option and
benefit plans (2,040,372 shares) (39)
178 139
Amortization of unearned compensation
14 14
Translation adjustments
(199) (199)
_________________________________________________________________
___________________________________________
Balance, December 31, 1991 $296 $7,536
$ (24) $(516) $ (999) $6,293
Net income 1,233
1,233
Dividends paid ($3.20 per share) (701)
(701)
Reacquired stock (2,561,689 shares)
(247) (247)
Issuances pursuant to stock option and
benefit plans (2,455,380 shares) (56)
233 177
Amortization of unearned compensation
18 18
Translation adjustments
(174) (174)
_________________________________________________________________
___________________________________________
Balance, December 31, 1992 $296 $8,012
$(198) $(498) $(1,013) $6,599
Net income 1,263
1,263
Dividends paid ($3.32 per share) (721)
(721)
Reacquired stock (6,580,868 shares)
(706) (706)
Issuances pursuant to stock option and
benefit plans (2,286,137 shares) (54)
245 191
Amortization of unearned compensation
19 19
Translation adjustments
(133) (133)
_________________________________________________________________
___________________________________________
Balance, December 31, 1993 $296 $8,500
$(331) $(479) $(1,474) $6,512
_________________________________________________________________
___________________________________________
</TABLE>
<PAGE>
<TABLE>
[TEXT]
Business Sectors
Financial information relating to the company's business sectors
for the years
ended December 31, 1993, 1992 and 1991 appears below. 3M is
an integrated
enterprise characterized by substantial intersector
cooperation, cost
allocations and inventory transfers. Therefore, management does
not represent
that these sectors, if operated independently, could earn the
operating income
shown.
<CAPTION>
_________________________________________________________________
___________________________________
Information,
Industrial Imaging and
Life Eliminations Total
(Millions) and Consumer Electronic
Sciences and Other Company
_________________________________________________________________
____________________________________
<S> <C> <C> <C>
<C> <C> <C>
Net Sales 1993 $5,350 $4,520
$4,132 $ 18 $14,020
1992 5,215 4,599
4,026 43 13,883
1991 5,003 4,544
3,748 45 13,340
_________________________________________________________________
____________________________________
Operating Income 1993 849 271
846 (10) 1,956
1992<F1> 826 238
926 4 1,994
1991 852 383
769 (45) 1,959
_________________________________________________________________
____________________________________
Identifiable Assets<F2> 1993 3,776 3,460
2,854 144 10,234
1992 3,734 3,264
2,712 172 9,882
1991 3,592 3,414
2,603 127 9,736
_________________________________________________________________
____________________________________
Depreciation 1993 341 366
249 20 976
1992<F3> 323 356
238 33 950
1991 307 329
224 24 884
_________________________________________________________________
____________________________________
Capital Expenditures 1993 399 388
327 (2) 1,112
1992<F3> 437 444
327 17 1,225
1991 462 477
369 18 1,326
_________________________________________________________________
____________________________________
<FN>
<F1>1 Includes a legal settlement that increased operating income
for the Life
Sciences Sector by $129 million. Also includes special
charges of $115
million, of which$81 millionwas in theInformation, Imaging
andElectronic
Sector.
<F2>2 Excludes certaincorporate assets,primarilycash andcash
equivalents,other
securities, deferred income taxes, certain other current
assets and
investments.
<F3>3 Excludes $93 millionof capitalexpenditures and $54million
ofdepreciation
for international companies from November 1 to December
31, 1991. See
accounting changes note on page 20 for details.
</TABLE>
<TABLE>
[TEXT]
Geographic Areas
Information in the table below is presented on the same basis
as utilized by
the Company to manage the business. Export sales and
certain income and
expense items are reported in the geographic area where the
final sale to
customers is made rather than where the transaction originates.
<CAPTION>
_________________________________________________________________
____________________________
United Asia
Other Elimin- Total
(Millions) States Europe Pacific
Areas<F1> ations Company
_________________________________________________________________
____________________________
<S> <C> <C> <C> <C> <C>
<C> <C>
Net Sales to 1993 $7,126 $3,646 $2,154
$1,094 $14,020
Customers 1992 6,922 4,068 1,847
1,046 13,883
1991 6,738 3,889 1,718
995 13,340
_________________________________________________________________
____________________________
Transfers 1993 1,393 172 28
146 $(1,739) ---
Between 1992 1,273 176 31
119 (1,599) ---
Geographic Areas 1991 1,135 156 37
105 (1,433) ---
_________________________________________________________________
____________________________
Operating 1993 940 376 429
211 1,956
Income 1992<F2> 945 489 368
192 1,994
1991 802 618 362
177 1,959
_________________________________________________________________
____________________________
Identifiable<F3> 1993 5,875 2,633 1,531
710 (515) 10,234
Assets 1992 5,634 2,824 1,333
660 (569) 9,882
1991 5,548 2,912 1,214
555 (493) 9,736
_________________________________________________________________
____________________________
<FN>
<F1>1 Includes Canada, Latin America and Africa.
<F2>2 Includesa legal settlement that increased operating
income in the United
Statesby $129 million. Also includesspecial charges of
$115 million, of
which $74 million was in Europe.
<F3>3 Excludescertain corporateassets, primarilycash andcash
equivalents,other
securities, deferred income taxes, certain other
current assets and
investments.
[TEXT]
At year-end,net assetsof companiesoutside the UnitedStates
totaled$2.963
billion in 1993, $2.998 billion in 1992 and $2.835 billion
in 1991.
In1993, thecompany changed thebasis ofpresenting
exportsales and certain
income andexpense items in theabove table. Operating income
in1993 under
the prior methodology would have been $1,341 million, $205
million, $277
million and $133 million, respectively.
</TABLE>
<PAGE>
Retirement Plans
3M has various company-sponsored retirement plans covering
substantially all
U.S. employees and many employees outside the United States.
Pension benefits
are based principally on an employee's years of service and
compensation near
retirement. Plan assets are invested in common stocks,
fixed-income
securities, real estate and other investments.
The company's funding policy is to deposit with an
independent trustee
amounts at least equal to those required by law. A trust fund
is maintained
to provide pension benefits to plan participants and their
beneficiaries. In
addition, a number of plans are maintained by deposits
with insurance
companies.
The charge to income relating to these plans was $203 million
in 1993, $178
million in 1992 and $133 million in 1991.
<TABLE>
<CAPTION>
_________________________________________________________________
________________________________________________________
Net Pension Cost U.S.
Plan International Plans
_________________________________________________________________
________________________________________________________
(Millions) 1993
1992 1991 1993 1992 1991
_________________________________________________________________
________________________________________________________
<S> <C> <C>
<C> <C> <C> <C>
Service cost (employee benefits
earned during the year) $ 110 $
108 $ 89 $ 86 $73 $65
Interest cost on projected benefit
obligation 276
252 228 80 78 73
Return on assets - actual (430)
(221) (602) (185) (73) (112)
Net amortization and deferral 154
(38) 347 112 (1) 45
_________________________________________________________________
________________________________________________________
Net pension cost $ 110 $
101 $ 62 $ 93 $77 $71
_________________________________________________________________
________________________________________________________
Assumptions:
Discount rate at year-end 7.25%
8.00% 8.00% 7.26% 7.91% 8.07%
Rate of increase in compensation levels 5.00%
6.25% 6.25% 5.31% 6.40% 6.60%
Long-term rate of return on assets 9.00%
9.00% 9.00% 7.64% 8.23% 8.44%
_________________________________________________________________
________________________________________________________
_________________________________________________________________
________________________________________________________
Funded Status of Pension Plans
U.S. Plan International Plans
_________________________________________________________________
________________________________________________________
(Millions)
1993 1992 1993 1992
_________________________________________________________________
________________________________________________________
Actuarial present value of:
Vested benefit obligation $2,797
$2,490 $ 875 $790
Non-vested benefit obligation 435
372 65 58
_________________________________________________________________
________________________________________________________
Accumulated benefit obligation $3,232
$2,862 $ 940 $848
_________________________________________________________________
________________________________________________________
Projected benefit obligation $3,921
$3,442 $1,279 $1,179
Plan assets at fair value 3,473
3,141 1,207 996
_________________________________________________________________
________________________________________________________
Plan assets less than the projected
benefit obligation $
(448) $ (301) $ (72) $(183)
Unrecognized net transition asset
(224) (261) 10 10
Other adjustments and unrecognized items 492
435 (16) 80
Accrued pension expense recognized in
the Consolidated Balance Sheet $
(180) $ (127) $ (78) $(93)
_________________________________________________________________
________________________________________________________
</TABLE>
<PAGE>
Other Postretirement Benefits
The company provides health care and life insurance benefits for
substantially
all of its U.S. employees who reach retirement age while
employed by the
company. The company has set aside funds with an
independent trustee for
these postretirement benefits and makes periodic contributions
to the plan.
The assets held by the trustee are invested in common stocks and
fixed-income
securities. Employees outside the United States are covered
principally by
government-sponsored plans and the cost of company-provided
plans for these
employees is not material.
The table below sets forth the components of the net periodic
postretirement
benefit cost and a reconciliation of the funded status of the
postretirement
benefit plan for U.S. employees.
Net Periodic Postretirement Benefit Cost
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
Service cost $ 23
$ 21
Interest cost 53
49
Return on plan assets - actual
(23) (20)
Net amortization and deferral 1
---
_________________________________________________________________
_____________
Total $ 54
$ 50
_________________________________________________________________
_____________
Funded Status of Postretirement Benefits Plan
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
Fair value of plan assets $335
$314
_________________________________________________________________
_____________
Accumulated postretirement
benefit obligation:
Retirees 248
193
Fully eligible active plan participants 153
139
Other active plan participants 378
348
_________________________________________________________________
_____________
Benefit obligation 779
680
_________________________________________________________________
_____________
Plan assets less benefit obligation
(444) (366)
Adjustments and unrecognized items 58
---
Accrued postretirement expense recognized in the
Consolidated Balance Sheet $(386)
$(366)
The accumulated postretirement benefit obligation and related
benefit cost
are determined through the application of relevant actuarial
assumptions. The
company anticipates its health care cost trend rate to slow
from 7.5 percent
in 1994 to 5.0 percent in 2003, after which the trend rate is
expected to
stabilize. The effect of a one percentage point increase in
the assumed
health care cost trend rate for each future year would
increase the benefit
obligation by $57 million and the current year benefit expense
by $4 million.
Other actuarial assumptions include an expected long-term rate
of return on
plan assets of 9.0 percent (before taxes applicable to a portion
of the return
on plan assets), and a discount rate of 7.25 percent.
The charge to income relating to these plans was $54 million
in 1993, $50
million in 1992 and $51 million in 1991.
Other Postemployment Benefits
In 1992, the Financial Accounting Standards Board issued
Statement No. 112,
"Employers' Accounting for Postemployment Benefits."
Postemployment benefits
include, but are not limited to, disability, severance and
health care
benefits. 3M will adopt this standard in the first quarter
of 1994. This
adoption will have a diminimus effect on the company's results of
operations.
<PAGE>
Employee Stock Ownership Plan
The company maintains an Employee Stock Ownership Plan
(ESOP) for
substantially all full-time U.S. employees. This plan was
established in 1989
as a cost-effective way of funding certain employee
retirement savings
benefits, including the company's matching contributions under
its 401(k)
employee savings plan. The ESOP borrowed $548 million and used
the proceeds
to purchase 7.7 million shares of the company's common stock,
previously held
in treasury. The debt is being serviced by dividends on
stock held by the
ESOP and by company contributions. These contributions are
reported as a
benefit expense.
Employee Savings Plan
The company sponsors an employee savings plan under Section
401(k) of the
Internal Revenue Code. This plan covers substantially all
full-time U.S.
employees. The company matches employee contributions of up to
6 percent of
compensation at rates ranging from 35 to 85 percent, depending
upon company
performance. Amounts charged against income were $29 million
in 1993 and
1992, and $28 million in 1991.
General Employees' Stock Purchase Plan
Participants in the General Employees' Stock Purchase Plan are
granted options
at 85 percent of market value at the date of grant. At
December 31, 1993,
there were 23,216 participants in the plan, with 58,058
employees eligible to
participate. Options must be exercised within 27 months from
date of grant.
Shares
Price Range
_________________________________________________________________
_____________
Under Option-
January 1, 1993 223,179
$66.94-88.30
Granted 818,005
83.57-96.59
Exercised (777,102)
66.94-96.59
Cancelled (27,633)
66.94-96.59
_________________________________________________________________
_____________
Under Option-
December 31, 1993 236,449
$73.90-96.59
_________________________________________________________________
_____________
Shares available for grant-
December 31, 1993 8,803,215
_________________________________________________________________
_____________
Management Stock Ownership Program
Management stock options are granted at market value at the date
of grant. At
December 31, 1993, there were 4,238 participants in the plan.
All outstanding
options expire between May 1994 and May 2003.
Shares
Price Range
_________________________________________________________________
_____________
Under Option-
January 1, 1993 9,400,910
$38.73-103.60
Granted 2,138,014
97.85-116.15
Exercised (1,361,733)
38.73-103.60
Cancelled (85,844)
38.73-113.25
_________________________________________________________________
_____________
Under Option-
December 31, 1993 10,091,347
$38.73-116.15
_________________________________________________________________
_____________
Options Exercisable-
December 31, 1993 8,133,231
$38.73-115.45
_________________________________________________________________
_____________
Shares available for grant-
December 31, 1993 10,869,705
_________________________________________________________________
_____________
<PAGE>
Quarterly Data (Unaudited)
_________________________________________________________________
__________
(Millions, except
per-share data) First Second Third Fourth
Year
_________________________________________________________________
_________
Net Sales
1993 $3,517 $3,540 $3,481 $3,482
$14,020
1992 3,438 3,519 3,551 3,375
13,883
_________________________________________________________________
_________
Cost of Goods Sold
1993 $2,112 $2,131 $2,167 $2,119
$8,529
1992 2,058 2,115 2,134 2,039
8,346
_________________________________________________________________
_________
Income Before Cumulative Effect of Accounting Changes
1993 $330 $331 $316 $286
$1,263
1992 306 317 324
289<F1> 1,236<F1>
Per Share
1993 $1.51 $1.51 $1.47 $1.33
$5.82
1992 1.40 1.45 1.48
1.32<F1> 5.65<F1>
_________________________________________________________________
_________
Net Income
1993 $330 $331 $316 $286
$1,263
1992 303 317 324
289<F1> 1,233<F1>
Per Share
1993 $1.51 $1.51 $1.47 $1.33
$5.82
1992 1.38 1.45 1.48
1.32<F1> 5.63<F1>
_________________________________________________________________
_________
Stock Price Comparisons (New York Stock Exchange Composite
Transactions)
1993 High $111.75 $117.00 $111.25 $113.50
$117.00
Low 97.25 104.88 102.25 101.50
97.25
1992 High 98.75 97.38 103.75 107.00
107.00
Low 87.38 85.50 95.75 97.00
85.50
_________________________________________________________________
_________
[FN]
<F1> 1 Includes a legal settlement and special charges, which
together
added $9 million, or 4 cents a share, to net income.
Legal Procedings:
Discussion of the legal matters is cross referenced to Form 10-K
Item 3,
Legal Proceedings, and should be considered an integral part of
the
Financial Statements and Notes.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of
l934, the registrant has duly caused this report to be signed on
its behalf
by the undersigned, thereunto duly authorized.
MINNESOTA MINING AND MANUFACTURING COMPANY
By /s/Giulio Agostini
Giulio Agostini, Senior Vice President -
Finance and
Office Administration
Principal Financial and Accounting Officer
March 11, 1994
Pursuant to the requirements of the Securities Exchange
Act of 1934,
this report has been signed below by the following persons on
behalf of the
registrant and in the capacities indicated on March 11, 1994.
Signature Title
LIVIO D. DeSIMONE Chairman of the Board and
Chief Executive Officer, Director
LAWRENCE E. EATON Director
HARRY A. HAMMERLY Director
ALLEN F. JACOBSON Director
RONALD A. MITSCH Director
ALLEN E. MURRAY Director
AULANA L. PETERS Director
ROZANNE L. RIDGWAY Director
JERRY E. ROBERTSON Director
FRANK SHRONTZ Director
F. ALAN SMITH Director
LOUIS W. SULLIVAN Director
Arlo D. Levi, by signing his name hereto, does hereby sign this
document
pursuant to powers of attorney duly executed by the other
persons named,
filed with the Securities and Exchange Commission on behalf of
such other
persons, all in the capacities and on the date stated, such
persons
constituting a majority of the directors of the company.
By /s/Arlo D. Levi
Arlo D. Levi, Attorney-in-Fact
