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 June 30, 1995 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 June 30, 1995, there were 420,212,461 shares of the Registrant's common
stock outstanding.
This document contains 20 pages.
The exhibit index is set forth on page 16.
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF INCOME
(Amounts in millions, except per-share amounts)
(Unaudited)
Three months ended Six months ended
June 30 June 30
1995 1994 1995 1994
Net Sales $4,135 $3,772 $8,222 $7,404
Operating Expenses
Cost of goods sold 2,492 2,247 4,911 4,415
Selling, general and
administrative expenses 1,054 955 2,076 1,870
Total 3,546 3,202 6,987 6,285
Operating Income 589 570 1,235 1,119
Other Income and Expense
Interest expense 30 21 61 38
Investment and other
income - net (25) (11) (35) (16)
Implant litigation - net -- -- -- 35
Total 5 10 26 57
Income Before Income Taxes
and Minority Interest 584 560 1,209 1,062
Provision for Income Taxes 212 201 443 382
Minority Interest 19 16 37 31
Net Income $ 353 $ 343 $ 729 $ 649
Average Shares Outstanding 420.2 422.9 420.0 425.0
Per-Share Amounts:
Net Income $ .84 $ .81 $ 1.74 $ 1.53
Cash dividends declared
and paid $ .47 $ .44 $ .94 $ .88
The accompanying Notes to Consolidated Financial Statements
are an integral part of this statement.
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
June 30,
ASSETS 1995 December 31,
Current Assets (Unaudited) 1994
Cash and cash equivalents $ 397 $ 297
Other securities 192 194
Accounts receivable - net 3,237 2,948
Inventories
Finished goods 1,650 1,475
Work in process 729 676
Raw materials and supplies 675 612
Total inventories 3,054 2,763
Other current assets 903 726
Total current assets 7,783 6,928
Investments 572 536
Property, Plant and Equipment 13,293 12,403
Less accumulated depreciation (7,963) (7,349)
Property, plant and equipment - net 5,330 5,054
Other Assets 1,066 978
Total $14,751 $13,496
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 936 $ 996
Payroll 380 328
Income taxes 231 110
Short-term debt 850 917
Other current liabilities 1,510 1,254
Total current liabilities 3,907 3,605
Other Liabilities 2,319 2,126
Long-Term Debt 1,231 1,031
Stockholders' Equity
Common stock, no par, 472,016,528 shares issued 296 296
Retained earnings 9,337 9,039
Unearned compensation - ESOP (452) (460)
Cumulative translation - net 57 (163)
Net unrealized gain(loss)-debt & equity securities 9 (3)
Less cost of treasury stock -
June 30, 1995, 51,804,067 shares;
December 31, 1994, 52,222,826 shares (1,953) (1,975)
Stockholders' Equity - net 7,294 6,734
Total $14,751 $13,496
The accompanying Notes to Consolidated 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)
Six months ended
June 30
1995 1994
Cash Flows from Operating Activities:
Net income $ 729 $ 649
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 554 535
Working capital and other changes (216) (335)
Net cash provided by operating activities 1,067 849
Cash Flows from Investing Activities:
Capital expenditures (640) (501)
Other changes 9 (7)
Net cash used in investing activities (631) (508)
Cash Flows from Financing Activities:
Net change in short-term debt 62 185
Repayment of long-term debt (147) (52)
Proceeds from long-term debt 218 302
Purchases of treasury stock (124) (458)
Reissuances of treasury stock 111 70
Payment of dividends (395) (374)
Net cash used in financing activities (275) (327)
Effect of exchange rate changes on cash (61) 21
Net increase in cash and cash equivalents 100 35
Cash and cash equivalents at beginning of year 297 274
Cash and cash equivalents at end of period $ 397 $ 309
The accompanying Notes to Consolidated Financial Statements
are an integral part of this statement.
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED 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 the
periods presented. 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 its 1994 Annual Report on
Form 10-K.
Discussion of legal matters is cross-referenced to this Form 10-Q, Part
II, Item 1, Legal Proceedings, and should be considered an integral
part of the Consolidated Financial Statements and Notes.
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.
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
June 30, 1995, and the related condensed consolidated statements of
income for the three- and six-month periods ended June 30, 1995
and 1994, and cash flows for the six-month periods ended June 30, 1995
and 1994. 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 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 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,
1994, and the related consolidated statements of income and cash flows
for the year then ended (not presented herein); and in our report dated
February 13, 1995, 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, 1994, 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
July 26, 1995
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Second Quarter
Worldwide sales for the second quarter totaled $4.135 billion, an
increase of 9.6 percent from $3.772 billion in the second quarter last
year. Worldwide unit sales rose about 6 percent.
In the United States, unit sales rose about 1 percent compared with
average growth of nearly 7 percent during the preceding 10 quarters.
This slowing of growth extended to all three business sectors. The
Industrial and Consumer Sector experienced softening in markets tied to
auto production, construction and housing, as well as slower growth in
its consumer and office supply businesses. The Life Sciences Sector saw
good volume growth in the health care business, while sales in Traffic
and Personal Safety Products were up slightly. The Information,
Imaging and Electronic Sector volume growth was good in the electro-
communications businesses, but was held back by imaging systems and
memory technologies.
Internationally, unit volume increased about 10 percent, with all three
sectors showing growth. International unit sales have increased at a
double-digit rate for five quarters in a row. Volume rose about 8
percent in Europe, with strong growth in Italy, Germany, the United
Kingdom and Spain. In the Asia Pacific area, volume was up about 12
percent. Volume in Japan was up about 7 percent, while volume in the
rest of Asia grew about 25 percent. In Latin America, volume was up
about 10 percent, despite a volume decline of more than 25 percent in
Mexico. In Canada, volume increased nearly 7 percent.
Worldwide selling prices were unchanged compared with the second
quarter of 1994. Currency translation increased international sales by
about 9 percent and worldwide sales by about 4 percent.
Cost of goods sold, which includes manufacturing, research and
development, and engineering, was 60.3 percent of sales, up seven-
tenths of a percentage point from the second quarter last year. This
was primarily due to higher raw material costs and was accelerated in
the United States by low volume growth and slightly lower selling
prices. Internationally, these higher raw material costs were offset
through double-digit volume gains and positive currency effects.
Selling, general and administrative spending of $1.054 billion was 25.5
percent of sales. This was up two-tenths of a percentage point from
the same quarter last year. In the United States, SG&A spending was
up modestly in dollars, but the increase exceeded the growth in sales.
Internationally, the ratio of SG&A spending declined by about four-
tenths of a percentage point, despite investment to support growth in
developing countries.
Worldwide operating income was $589 million, up about 3 percent from
the second quarter last year. International operating income increased
about 23 percent. In the United States, operating income declined
about 18 percent due to lower volume growth, higher raw material costs,
and slightly lower selling prices.
On a sector basis, strong worldwide operating income gains were
achieved in the Life Sciences Sector, and the Industrial and Consumer
Sector. In the Information, Imaging and Electronic Sector, operating
income declined from the same quarter last year, but margins for the
first six months were about the same as total year 1994. This sector
has been affected by modest volume growth, lower selling prices, higher
raw material costs, and significant investments in new products.
Second quarter interest expense of $30 million was down $1 million from
the first quarter of 1995, but $9 million higher than in the same
quarter last year. This increase was mainly due to a planned increase
in debt together with higher interest rates. Investment and other
income improved by $14 million from the second quarter last year. This
benefit was due to improved investment results, including higher
interest income.
Net income increased 2.9 percent to $353 million, or $.84 per share,
compared with $343 million, or $.81 per share, in the same quarter last
year. Higher raw material costs penalized earnings by about 10 cents
per share. The company estimates that changes in the value of the U.S.
dollar increased earnings for the quarter by about 6 cents per share
compared to the second quarter of 1994. This estimate includes the
effect of translating profits from local currencies into United States
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 $8.222 billion, an
increase of 11.0 percent from $7.404 billion in the first six months of
last year. Worldwide unit sales rose about 7 percent.
Volume growth for the first six months of 1995 was 4 percent in the
United States and 11 percent internationally. Worldwide selling prices
were essentially unchanged, with United States prices down less than 1
percent and international prices up about half a percent. Currency
translation increased international sales by about 8 percent and
worldwide sales by about 4 percent.
Cost of goods sold was 59.8 percent of sales, up two-tenths of a point
from the same period last year. The factors that influenced gross
margins for the second quarter were the same factors that affected
year-to-date results.
Selling, general and administrative spending of $2.076 billion for the
first six months was 25.2 percent of sales. This is down one-tenth of
a point from the same period last year.
Worldwide operating income increased 10.4 percent to $1.235 billion, up
from $1.119 billion in the first half of 1994. International operating
income was up about 27 percent and margins were up 1 percentage point.
Operating income in the United States was down 8.5 percent and margins
declined by 1.6 percentage points.
Interest expense was $61 million, up from $38 million in the first half
of 1994. This increase was mainly due to a planned increase in debt
and higher interest rates. Investment and other income was $35
million, an increase of $19 million compared with the first half last
year. This benefit was due to improved investment results, including
higher interest income.
As discussed in this Form 10-Q, Part II, Item 1, Legal Proceedings,
mammary implant litigation resulted in a pre-tax charge of $35 million
($22 million after tax) in the first quarter of 1994. Although there
can be no certainty that the company may not ultimately incur charges
in excess of presently established accruals, 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.
On a year-to-date basis, the worldwide effective tax rate was 36.7
percent, up nine-tenths of a percentage point from the rate for 1994
overall. The tax rate is higher for two reasons. First, the company
has derived more of its profit from outside the United States, where
tax rates are generally higher. Second, in 1994, the company was
allowed to claim additional tax benefits on exports from several prior
years.
Year-to-date net income was $729 million, or $1.74 per share. This
compared with $649 million, or $1.53 per share, in the first half of
1994. Earnings per share, excluding a charge for mammary implant
litigation in the first quarter last year, rose 10.1 percent.
****
Looking ahead, the company expects to set new records for sales and
earnings for 1995 as a whole. In the United States, results will
continue to be affected by the soft United States economy and by higher
raw material costs. The company expects continued solid sales and
profit growth outside the United States. Currency, at June 30, 1995
exchange rates, should continue to help results, although not quite as
much as in the first half of this year.
Raw materials will continue to impact costs in the second half of this
year. Selling prices should continue to improve, but probably will not
be sufficient to offset these higher raw material costs in the second
half.
Worldwide employment increased by about 425 people, mainly in Latin
America and Asia, compared with June 30, 1994. Productivity, as
measured by sales per employee in local currencies, was up about 7
percent in the first half of 1995, compared with 8 percent for 1994 as
a whole.
The company expects capital spending, influenced in part by changes in
exchange rates, to increase about 20 percent in 1995. The company is
investing to meet increased demand for certain fast-growing product
lines and to improve manufacturing efficiency.
FINANCIAL CONDITION AND LIQUIDITY
The company's financial condition and liquidity remain strong.
Working capital increased $553 million to $3.876 billion from $3.323
billion as of December 31, 1994. The accounts receivable average days
sales outstanding was 66 days, the same as a year ago. The company's
key inventory index of 4.2, which represents the number of months of
inventory, was unchanged from year-end. The company's current ratio
was 2.0, compared with 1.9 at year-end.
Total debt increased $133 million from year-end 1994 to $2.081 billion.
On January 10, 1995, the company completed a two-year, $200 million,
7.75 percent Eurobond offering. The company entered into an interest
rate swap, which resulted in an all-in borrowing cost of the 30-day
commercial paper rate less 30 basis points for two years. As of June
30, 1995, total debt was 29 percent of stockholders' equity, the same
as at year-end. The company's borrowings continue to maintain AAA
long-term ratings.
Return on average stockholders' equity for the first half of the year
was 20.7 percent, up from 20.0 percent for the same period last year,
meeting the company's goal of 20 to 25 percent. Return on capital
employed for the first six months was 21.0 percent, the same as in the
comparable 1994 period. The company's goal is 27 percent or better.
Legal proceedings are discussed in Part II, Item 1, of this Form 10-Q.
The company believes that such matters will not pose a material risk to
the financial position or liquidity of the company.
Net cash provided by operating activities totaled $1.067 billion in the
first six months of the year, up $218 million from the same period last
year. This increase was primarily due to working capital changes and
increased net income.
Cash used in investing activities was $631 million, up $123 million
from the same period last year. Capital expenditures for the first six
months of 1995 were $640 million, an increase of about 28 percent
compared with the same period last year.
Financing activities in both short-term and long-term debt provided net
cash inflows of $133 million, compared to inflows of $435 million in
the same period last year. Treasury stock repurchases were $124
million, compared with repurchases in the same period last year of $458
million.
The company repurchased about 2.2 million shares of treasury stock in
the first six months of this year, compared with 8.8 million shares in
the same period last year. On February 13, 1995, the Board of
Directors authorized the repurchase of up to 8 million shares of 3M
common stock through February 12, 1996. As of June 30, 1995, 6.4
million shares remained authorized for repurchase. Stock repurchases
are made to support employee stock purchase plans and for other
corporate purposes.
Dividends paid increased 5.5 percent to $395 million in the first six
months of this year. The dividend payout ratio decreased to 54.2
percent in the first six months from 56.3 percent for the year 1994.
The company expects cash generated by operating activities will support
its primary growth initiatives, with ample borrowing capacity and lines
of credit available 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 June 30, 1995, $402 million of the shelf
registration 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. 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.
Although there can be no certainty that the company may not
ultimately incur charges (whether for governmental proceedings and
claims, mammary implant claims, other product liability claims,
environmental proceedings or other actions) in excess of presently
established accruals, 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.
Mammary Implant Litigation
As of June 30, 1995, the company had been named as a defendant, often
with multiple co-defendants, in 6,597 claims and lawsuits in various
courts, all seeking damages for personal injuries from allegedly
defective breast implants. These claims and lawsuits purport to
represent 16,319 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 $4.25 billion, which had been 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 three 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 was
subsequently appealed by some plaintiffs and several third parties.
The company maintains a unilateral right to withdraw from the global
settlement.
On May 1, 1995, the U.S. District Court for the Northern District of
Alabama stated that preliminary information from claims filed prior
to the September 1994 deadline has led the Court to believe that the
total amount of "current claims" likely to be approved would
substantially exceed the portion of the global settlement allocated
to the classification of "current claims." This presently accounts
for $1.2 billion of the total $4.25 billion settlement. The global
settlement agreement provides, in this case, for a reduction in the
amount to be paid individual claimants, but first obligates the
parties to attempt to adjust the settlement agreement. The company
and others have indicated their willingness to engage in further
discussions and have begun to explore ways to minimize potential
reductions, as by reallocating funds already committed to the global
settlement and perhaps by obtaining additional contributions to the
global settlement from the settling defendants or others. The
company continues to conduct discussions with the settling defendants
and others and representatives of the plaintiffs under a court
imposed deadline of August 30, 1995. Sufficient information is not
yet available to analyze the Court's preliminary information and the
ultimate impact upon the global settlement. Under the global
settlement agreement, a reduction or a renegotiated settlement would
result in a further notice to the plaintiffs as a class, an
opportunity for class members to opt out of the global settlement,
and an opportunity for each settling defendant to withdraw from the
global settlement.
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 its probable liabilities and associated expenses net of
the probable amount of insurance recoverable from its carriers.
Based upon recently negotiated settlements with certain plaintiffs who
have opted out of the global settlement agreement, the company's
current estimate of the probable liabilities and associated expenses
has increased from nearly $500 million (in the first quarter of 1995)
to $675 million. After subtracting payments made to date (for legal
fees and payment of settlements to litigants and claimants electing
to remove themselves from the global settlement) and adjusting for
discounting, the company as of June 30, 1995, had accrued liabilities
having a net present value of $506 million. The company had also
accrued receivables for insurance recoveries of $528 million as of
June 30, 1995. 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 among insurers for coverage under the terms of
the various insurance policies with possible application. On
December 9, 1994, the company initiated an action against its
occurrence insurers in the Texas State Court in and for Harrison
County, seeking a determination concerning allocation of financial
responsibility among the company's various insurers having applicable
coverages, including adjudication of overlapping coverages. This
action has since been removed to the U.S. District Court, Eastern
District of Texas. These actions in the courts of Minnesota and
Texas relate principally to the allocation of financial
responsibility among the company's insurers (including adjudication
of overlapping coverages). The insurers that are parties to these
actions generally acknowledge that they issued product liability
insurance to 3M and that implant claims are product liability claims.
The company conducts ongoing reviews, assisted by outside counsel, to
determine the adequacy and extent of insurance coverage provided by
its occurrence and claims-made insurers. Although the company's
current estimate of probable liabilities and associated expenses has
increased from nearly $500 million to $675 million, the company
believes, based on ongoing reviews, assisted by outside counsel, that
the coverage provided by its applicable insurance policies is
sufficient to cover the current exposure. The totality of the
insurance coverage is thus the basis for the company's belief that
its uninsured financial exposure has not materially changed, and
therefore, no recognition of additional charges has been necessary
since the first quarter of 1994.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The registrant held its Annual Meeting of Stockholders
on May 9, 1995.
(b) Proxies for the meeting were solicited pursuant to
Regulation 14; there was no solicitation in opposition
to management's nominees for directors as listed in the
Proxy Statement and all such nominees were elected.
Directors elected were Edward A. Brennan, Livio D.
DeSimone, Allen E. Murray, F. Alan Smith, Jerry R.
Junkins.
Directors whose terms continue after the meeting were
Harry A. Hammerly, Ronald A. Mitsch, Rozanne L. Ridgway,
Frank Shrontz, Louis W. Sullivan, Lawrence E. Eaton,
Allen F. Jacobson, and Aulana L. Peters.
(c) Briefly described below are the other matters voted upon
at the Annual Meeting and the number of affirmative
votes and negative votes cast.
i) Ratification of the appointment of Coopers &
Lybrand L.L.P., independent certified public
accountants, to audit the books and accounts of
the company and its subsidiaries for the year 1995.
For 351,168,263
Against 1,007,405
Abstain 994,264
Broker Non-Vote 0
ii) Stockholder proposal regarding nomination process
for directors.
For 11,528,411
Against 300,030,289
Abstain 7,793,825
Broker Non-Vote 33,817,407
iii) Stockholder proposal regarding reincorporation.
For 11,928,694
Against 299,315,877
Abstain 8,148,453
Broker Non-Vote 33,776,908
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 18.
(12) A statement regarding the calculation of ratio of
earnings to fixed charges. Page 19.
(15) A letter from the company's independent accountants
regarding unaudited interim financial statements.
Page 20.
(27) Financial data schedule (EDGAR filing only).
None of the other items contained in Part II of Form 10-Q is applicable
to the company for the quarter ended June 30, 1995.
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: August 2, 1995
/s/ Giulio Agostini
Giulio Agostini, Senior Vice President and
Chief Financial Officer
(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
(Unaudited)
Three months ended Six months ended
June 30 June 30
1995 1994 1995 1994
------- ------- ------- -------
Net income (millions) $353 $343 $729 $649
- --------------------------------------------------------------------------------
Primary earnings per share:
Earnings per share $.84 $.81 $1.74 $1.53
Weighted average number of
common shares outstanding 420,177,239 422,949,559 419,999,904 425,015,945
- --------------------------------------------------------------------------------
Fully diluted earnings
per share: (1)
Earnings per share $.84 $.81 $1.72 $1.52
Weighted average number of
common shares outstanding 420,177,239 422,949,559 419,999,904 425,015,945
Common equivalent shares 4,939,264 2,692,411 4,350,999 3,226,278
----------- ----------- ----------- -----------
Average number of common
and common equivalent
shares outstanding 425,116,503 425,641,970 424,350,903 428,242,223
- --------------------------------------------------------------------------------
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)
(Unaudited)
Six Months
Ended
June 30, Year Year Year Year Year
1995 1994 1993 1992 1991 1990
EARNINGS -------- ------- ------- ------- ------- -------
Income Before Income Taxes,
Minority Interest and
Cumulative Effect of
Accounting Changes $1,209 $2,154 $2,002 $1,947 $1,877 $2,135
Add:
Interest on debt 61 87 50 76 97 98
Interest component of the
ESOP benefit expense 19 39 41 42 44 45
Portion of rent under
operating leases
representative of the
interest component 25 49 47 47 47 44
Less:
Equity in undistributed
income of 20-50% owned
companies -- 2 -- (1) (6) 1
-------- ------- ------- ------- ------- -------
TOTAL EARNINGS AVAILABLE
FOR FIXED CHARGES $1,314 $2,327 $2,140 $2,113 $2,071 $2,321
FIXED CHARGES
Interest on debt 61 87 50 76 97 98
Interest component of the
ESOP benefit expense 19 39 41 42 44 45
Portion of rent under
operating leases
representative of the
interest component 25 49 47 47 47 44
------ ------ ------ ------ ------ ------
TOTAL FIXED CHARGES $105 $175 $138 $165 $188 $187
RATIO OF EARNINGS TO
FIXED CHARGES 12.51 13.30 15.51 12.81 11.02 12.42
EXHIBIT 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our report dated July 26, 1995 on our reviews of
interim condensed consolidated financial information of Minnesota Mining
and Manufacturing Company and Subsidiaries (the Company) for the three-
and six-month periods ended June 30, 1995 and 1994, and included
in the Company's Form 10-Q for the quarter ended June 30, 1995, is
incorporated by reference in the Company's registration statements on
Form S-8 (Registration Nos. 2-78422, 33-14791, 33-48690, 33-49842, 33-
58763 and 33-58767), 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
August 2, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 397
<SECURITIES> 192
<RECEIVABLES> 3,237
<ALLOWANCES> 0
<INVENTORY> 3,054
<CURRENT-ASSETS> 7,783
<PP&E> 13,293
<DEPRECIATION> 7,963
<TOTAL-ASSETS> 14,751
<CURRENT-LIABILITIES> 3,907
<BONDS> 1,231
<COMMON> 296
0
0
<OTHER-SE> 6,998
<TOTAL-LIABILITY-AND-EQUITY> 14,751
<SALES> 8,222
<TOTAL-REVENUES> 8,222
<CGS> 4,911
<TOTAL-COSTS> 4,911
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 61
<INCOME-PRETAX> 1,209
<INCOME-TAX> 443
<INCOME-CONTINUING> 729
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 729
<EPS-PRIMARY> 1.74
<EPS-DILUTED> 1.74
</TABLE>
