UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1996
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 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 $85.25 per share
as reported on the New York Stock Exchange-Composite Index on
January 31, 1997, was $35.5 billion.
Shares of common stock outstanding at January 31, 1997:
416,787,990.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following documents are incorporated by reference in
Parts III and IV of this Form 10-K: (1) Proxy Statement for
registrant's 1997 annual meeting, (2) Form 10-Q for period ended
June 30, 1987; Form 8-K dated November 20, 1996, (3) Registration
Nos. 33-48089, 33-49842 and 33-58767.
This document contains 50 pages.
The exhibit index is set forth on page 44.
MINNESOTA MINING AND MANUFACTURING COMPANY
FORM 10-K
For the Year Ended December 31, 1996
PART I
Item 1. Business.
Minnesota Mining and Manufacturing Company was incorporated in
1929 under the laws of the State of Delaware to continue
operations, begun in 1902, of a Minnesota corporation of the same
name. As used herein, the term "3M" includes Minnesota Mining
and Manufacturing Company and subsidiaries unless the context
otherwise indicates.
Discontinued Operations
In November 1995, the Board of Directors approved a plan to
launch the company's data storage and imaging businesses as an
independent, publicly owned company and to discontinue 3M's audio
and video business. This is discussed in the Notes to
Consolidated Financial Statements.
General
3M is an integrated enterprise characterized by substantial
interdivision and intersector cooperation in research,
manufacturing and marketing of products incorporating similar
component materials manufactured at common internal sources.
3M's business has developed from its research and technology in
coating and bonding for coated abrasives, the company's only
product in its early years. Coating and bonding is the process of
applying one material to another, such as adhesives to a backing
(pressure-sensitive tapes), abrasive granules to paper or cloth
(coated abrasives), ceramic coating to granular mineral (roofing
granules), glass beads to plastic backing (reflective sheeting),
and low-tack adhesives to paper (repositionable notes).
3M is among the leading manufacturers of products for many of the
markets it serves. In all cases, 3M products are subject to
direct or indirect competition. Most 3M products involve
expertise in product development, manufacturing and marketing,
and are subject to competition with products manufactured and
sold by other technically oriented companies.
At December 31, 1996, the company employed 74,289 people.
Business Segments
Financial information relating to 3M's two business segments and
3M's operations in various geographic areas of the world is
provided in the Notes to Consolidated Financial Statements.
Each of 3M's two business sectors brings together common or
related 3M technologies, providing greater opportunity for the
development of products and services and efficient sharing of
business strengths. These sectors have worldwide responsibility
for virtually all 3M product lines. A few miscellaneous and
staff-sponsored products, still under development, are not
assigned to the sectors. Various corporate assets and corporate
overhead expenses are also not assigned to the sectors.
Industrial and Consumer Sector: This sector is a leader in
pressure-sensitive adhesives, specialty tapes, coated and
nonwoven abrasives, specialty chemicals, electronic and
electrical products, and telecommunications products. The sector
has strong distribution channels and logistics expertise. This
sector participates in the following markets: Industrial
Markets; Automotive and Chemical Markets; Electro and
Communications Markets; Consumer and Office Markets.
The Industrial Markets businesses manufacture and market a wide
variety of high-performance and general-use pressure-sensitive
tapes and specialty products. Major product categories include
industrial application tapes made from a wide variety of
materials, such as foil, film, vinyl and polyester; specialty
tapes and adhesives for industrial applications, including Scotch
Brand VHB Brand Tapes, lithographic tapes, joining systems, specialty
additives, vibration control materials, liquid adhesives, and
reclosable fasteners; general-use tapes, such as masking, box-
sealing and filament; and labels and other materials for
identifying and marking durable goods. Other products include
coated abrasives for grinding, conditioning and finishing a wide
range of surfaces; finishing compounds; and products for
maintaining and repairing vehicles.
The Automotive and Chemical Markets businesses' major automotive
products include body side-molding and trim; functional and
decorative graphics; corrosion-resistant and abrasion-resistant
films; tapes for attaching nameplates, trim and moldings; and
fasteners for attaching interior panels and carpeting. Major
chemical products include protective chemicals for furniture,
fabrics and paper products; fire-fighting agents;
fluoroelastomers for seals, tubes and gaskets in engines;
engineering fluids; and high-performance fluids used in the
manufacture of computer chips and for electronic cooling and
lubricating of computer hard disk drives. Other products include
natural and color-coated mineral granules for asphalt shingles.
These businesses also serve as a major resource for other 3M
divisions, supplying specialty chemicals, adhesives and films
used in the manufacture of many 3M products.
The Electro and Communications Markets businesses provide
products for the electronic, electrical, telecommunication, and
visual communication fields. Electronic and electrical products
include packaging and interconnection devices; insulating
materials, including pressure-sensitive tapes and resins; and
related items. These products are used extensively by
manufacturers of electronic and electrical equipment, as well as
in the construction and maintenance segments of the electric
utility, telephone and other industries. Telecommunications
products serve the world's telephone companies with a wide array
of products for fiber-optic and copper-based telephone systems.
These include many innovative connecting, closure and splicing
systems, maintenance products and test equipment. Visual
communication products serve the world's office and education
markets with overhead projectors and transparency films, plus
equipment and materials for electronic and multimedia
presentations.
Major products in the Consumer and Office Markets businesses
include Scotch Brand Tapes; Post-it Brand Note products, including
memo pads, labels, stickers, pop-up notes and dispensers; home care
products, including Scotch-Brite Brand Scouring Products, O-Cel-O
Brand Sponges and Scotchgard Brand Fabric Protectors; energy control
products, such as window insulation kits; nonwoven abrasive
materials for floor maintenance and commercial cleaning; floor
matting; and a wide range of home improvement products, including
surface preparation and wood finishing materials, and filters for
furnaces and air conditioners.
Life Sciences Sector: This sector contributes to better health
and safety for people around the world. The Life Sciences
Sector's major technologies include pressure-sensitive adhesives,
substrates, extrusion and coating, nonwoven materials, specialty
polymers and resins, optical systems, drug delivery systems, and
electro-mechanical devices. The sector has strong distribution
channels in all its major markets. This sector participates in
the following markets: Medical Markets; Pharmaceuticals, Dental
and Personal Care Markets; and Traffic and Personal Safety
Markets.
The Medical Markets businesses produce a broad range of medical
supplies, devices and equipment. Medical supplies include tapes,
dressings, surgical drapes and masks, biological indicators,
orthopedic casting materials and electrodes. Medical devices and
equipment include stethoscopes, heart-lung machines,
sterilization equipment, blood gas monitors, and powered
orthopedic instruments. These businesses also develop clinical
information systems.
The Pharmaceuticals, Dental and Personal Care Markets businesses
serve the pharmaceutical and dental markets, as well as
manufacturers of disposable diapers. Pharmaceuticals include
ethical drugs and drug delivery systems. Among ethical
pharmaceuticals are analgesics, anti-inflammatories and
cardiovascular and respiratory products. Drug delivery systems
include metered-dose inhalers, as well as transdermal skin
patches and related components. Dental products include dental
restoratives, adhesives, impression materials, temporary crowns,
infection control products, and orthodontic brackets and wires.
These businesses also produce a broad line of closures for
disposable diapers.
The Traffic and Personal Safety Markets businesses have a strong
position in the following markets: traffic control materials,
commercial graphics, occupational health and safety, and out-of-
home advertising. In traffic control materials, 3M is a
worldwide leader in reflective sheetings. These materials are
used on highway signs, vehicle license plates, construction
workzone devices, and trucks and other vehicles. In commercial
graphics, 3M supplies a broad line of films, inks and related
products used to produce graphics for trucks and signs. Major
occupational health and safety products include maintenance-free
and reusable respirators, plus personal monitoring systems. Out-
of-home advertising includes outdoor advertising, advertising
displays in shopping centers, and local advertising in national
magazines. These businesses also market a variety of other
products, including spill-control sorbents, Thinsulate Brand and
Lite Loft Brand Insulations, traffic control devices, electronic
surveillance products, reflective materials for personal safety,
and films for protection against counterfeiting.
Distribution
3M products are sold directly to users and through numerous
wholesalers, retailers, jobbers, distributors and dealers in a
wide variety of trades in many countries around the world.
Management believes that the confidence of wholesalers,
retailers, jobbers, distributors and dealers in 3M and its
products, developed through long association with trained
marketing and sales representatives, has contributed
significantly to 3M's position in the marketplace and to its
growth. 3M has 286 sales offices and distribution centers
worldwide, including nine major branch offices located in
principal cities throughout the United States. 3M operates 75
sales offices and distribution centers in the United States.
Internationally, with companies in more than 60 countries, 3M has
211 sales offices and distribution centers.
Research, Patents and Raw Materials
Research and product development constitute an important part of
3M's activities. Products resulting from research and
development have been a major driver of 3M's growth. Spending
for research and development activities totaled $947 million,
$883 million and $828 million in 1996, 1995 and 1994,
respectively.
Corporate research laboratories support the research efforts of
division and sector laboratories. These corporate labs also
engage in research not directly related to existing 3M product
lines. Most major operating divisions, as well as some of 3M's
international companies, have their own laboratories for
improvement of existing products and development of new products.
Research staff groups provide specialized services in
instrumentation, engineering and process development. 3M also
maintains an organization for technological development not
sponsored by other units of the company.
3M is the owner of many domestic and foreign patents derived
primarily from its own research activities. 3M's business as a
whole is not materially dependent upon any one patent, license or
trade secret or upon any group of related patents, licenses or
trade secrets.
The company experienced no significant or unusual problems in the
purchase of raw materials during 1996. While 3M has successfully
met its raw material requirements, it is impossible to predict
future shortages or the impact such shortages would have.
Executive Officers
The following is a list of the executive officers of 3M as of
February 1, 1997, their present position, current age, the year
first elected to their position and other positions held within
3M during the past five years. All of these persons have been
employed full time by 3M or a subsidiary of 3M for more than five
years. All officers are elected by the Board of Directors at its
annual meeting, with vacancies and new positions filled at
interim meetings. No family relationships exist among any of the
executive officers named, nor is there any arrangement or
understanding pursuant to which any person was selected as an
officer.
<TABLE>
<CAPTION>
Year Elected
to Present
Name Age Present Position Position Other Positions Held During 1992-1996
<S> <C> <C> <C> <C>
Livio D. DeSimone 60 Chairman of the Board 1991
and Chief Executive Officer
Ronald A. Mitsch 62 Vice Chairman of the 1996 Executive Vice President,
Board and Executive Industrial and Consumer Sector
Vice President, Industrial and Corporate Services, 1991-1995
and Consumer Sector and
Corporate Services
J. Marc Adam 58 Vice President, Marketing 1995 Group Vice President, Medical
Products Group, 1991-1995
Giulio Agostini 61 Senior Vice President, 1993 Senior Vice President,
Finance and Finance, 1991-1993
Administrative Services
Ronald O. Baukol 59 Executive Vice President, 1995 Vice President, Asia Pacific,
International Operations Canada and Latin America, 1994-1995
Vice President, Asia Pacific, 1991-1994
William E. Coyne 60 Senior Vice President, 1996 Vice President, Research and
Research and Development Development, 1994-1995
President and General Manager,
3M Canada, Inc., 1990-1994.
Charles E. Kiester 60 Senior Vice President, 1993 Vice President, Engineering,
Engineering, Quality and Quality and Manufacturing Services
Manufacturing Services 1990-1993
Richard A. Lidstad 60 Vice President, 1992 Staff Vice President, Human Resource
Human Resources Operations, 1987-1992
W. George Meredith 53 Executive Vice President, 1995 Group Vice President, Pharmaceuticals,
Life Sciences Sector and Dental and Personal Care Products
Corporate Services Group, 1994
Group Vice President, Pharmaceuticals,
Dental and Disposable Products
Group, 1991-1994
John J. Ursu 57 Senior Vice President, 1997 Vice President, Legal Affairs and
Legal Affairs and General Counsel, 1993-1996
General Counsel General Counsel, 1992-1993
Deputy General Counsel, 1990-1992
</TABLE>
Item 2. Properties.
3M's general offices, corporate research laboratories, most
division laboratories and certain manufacturing facilities are
located in St. Paul, Minnesota. In the United States, 3M has 75
sales offices and distribution centers in 22 states and operates
67 plants in 24 states. Internationally, with companies in more
than 60 countries, 3M has 211 sales offices and distribution
centers. The company operates 99 manufacturing and converting
facilities in 42 countries outside the United States.
3M owns substantially all of its physical properties. 3M's
physical facilities are highly suitable for the purposes for
which they were designed.
Item 3. Legal Proceedings.
The company and certain of its subsidiaries are named as
defendants in a number of actions, governmental proceedings and
claims, including environmental proceedings and products
liability claims involving products now or formerly manufactured
and sold by the company. In some actions, the claimants seek
damages as well as other relief which, if granted, would require
substantial expenditures. The company has accrued certain
liabilities which represent reasonable estimates of its probable
liabilities for these matters. The company also has recorded
receivables for the probable amount of insurance recoverable with
respect to these matters.
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
amount of future liabilities with respect to such matters.
There can be no certainty that the company may not ultimately
incur charges, whether for governmental proceedings and claims,
products liability claims, environmental proceedings or other
actions, in excess of presently established accruals. While such
future charges could have a material adverse impact on the
company's net income in the quarterly period in which they are
recorded, the company believes that such additional charges, if
any, would not have a material adverse effect on the company's
consolidated financial position or annual results of operations.
Breast Implant Litigation
As of December 31, 1996, the company had been named as a
defendant, often with multiple co-defendants, in 6,715 claims and
lawsuits in various courts, all seeking damages for personal
injuries from allegedly defective breast implants. These claims
and lawsuits purport to represent 21,431 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 of
manufacturing breast implants in 1977 by purchasing McGhan
Medical Corporation. In 1984, the company sold the business to a
corporation that also was named McGhan Medical Corporation.
The typical claim or lawsuit alleges the individual's breast
implants caused one or more of a wide variety of ailments,
including, but not limited to, non-specific autoimmune disease,
scleroderma, lupus, rheumatoid arthritis, fibromyalgia, mixed
connective tissue disease, Sjogren's Syndrome, dermatomyositis,
polymyositis and chronic fatigue.
Plaintiffs in these cases typically seek monetary damages, often
in unspecified amounts, and also seek certain types of equitable
relief, including requiring the company to fund: the costs
associated with removal of the breast implants; medical research
on the ailments allegedly caused by silicone gel breast implants;
and periodic medical checkups.
A number of breast implant claims and lawsuits seek to impose
liability on the company under various theories for personal
injuries allegedly caused by breast implants manufactured and
sold by manufacturers other than the company. These manufacturers
include, but are not limited to, McGhan Medical Corporation and
manufacturers that are no longer in business or that are
insolvent, whose breast implants may or may not have been used in
conjunction with implants manufactured and sold by the company.
These claims raise many difficult and complex factual and legal
issues that are subject to many uncertainties, including the
facts and circumstances of each particular claim; the
jurisdiction in which each suit is brought; and differences in
applicable law and insurance coverage.
A number of breast implant lawsuits seek to recover punitive
damages. Any punitive damages that may be awarded against the
company may or may not be covered by certain insurance policies
depending on the language of the insurance policy, applicable law
and agreements with insurers.
In addition to individual suits against the company, a class
action on behalf of all women with breast implants filed against
all manufacturers of such implants has been conditionally
certified and is pending in the United States District Court for
the Northern District of Alabama (the "Court")(DANTE, ET AL., V.
DOW CORNING, ET AL., U.S.D.C., N. Dist., Ala., 92-2589; part of
IN RE: SILICONE GEL BREAST IMPLANT PRODUCT LIABILITY LITIGATION,
U.S.D.C., N. Dist. Ala., MDL 926, U.S.D.C., N. Dist. Ala., CV 92-
P-10000-S; now held in abeyance pending settlement proceedings in
the settlement class action LINDSEY, ET AL., V. DOW CORNING
CORPORATION, ET AL., U.S.D.C., N. Dist., Ala., CV 94-P-11558-S).
Class actions, some of which have been certified, also are
pending in various state courts, including, among others,
Louisiana, Florida and Illinois, and in the British Columbia
courts in Canada.
The company also has been served with a purported class action
brought on behalf of children allegedly exposed to silicone in
utero and through breast milk. (FEUER, ET AL., V. MCGHAN, ET
AL., U.S.D.C., E. Dist. NY, 93-0146.) The suit names all breast
implant manufacturers as defendants and seeks to establish a
medical-monitoring fund.
On December 22, 1995, the Court approved a revised class action
settlement program for resolution of claims seeking damages for
personal injuries from allegedly defective breast implants (the
"Revised Settlement Program"). The Revised Settlement Program is
a revision of a previous settlement pursuant to a Breast Implant
Litigation Settlement Agreement (the "Settlement Agreement")
reached on April 8, 1994, and approved by the Court on September
1, 1994.
The Court ordered that, beginning after November 30, 1995,
members of the plaintiff class may choose to participate in the
Revised Settlement Program or opt out, which would then allow
them to proceed with separate products liability actions.
The Revised Settlement Program includes only domestic class
members with implants manufactured by certain manufacturer
defendants, including Baxter International, Bristol Meyers-
Squibb, the company and McGhan Medical Corporation. The company's
obligations under the Revised Settlement Program are limited to
eligible claimants with implants manufactured by the company or
its predecessors ("3M implants") or manufactured only by McGhan
Medical Corporation after its divestiture from the company on
August 3, 1984 ("Post 8/84 McGhan implants"). With respect to
claimants with only Post 8/84 McGhan implants (or only Post 8/84
McGhan implants plus certain other manufacturers' implants), the
benefits are more limited than for claimants with 3M implants.
Such benefits are payable by the company, Union Carbide
Corporation and McGhan Medical Corporation.
In general, the amounts payable to individual current claimants
(as defined in the Court's order) under the Revised Settlement
Program, and the company's obligations to make those payments,
will not be affected by the number of class members electing to
opt out of the Revised Settlement Program or the number of class
members making claims under the Revised Settlement Program. In
addition to certain miscellaneous benefits, the Revised
Settlement Program provides for two compensation options for
current claimants with 3M implants.
Under the first option, denominated as Fixed Amount Benefits,
current claimants with 3M implants who satisfy disease criteria
established in the prior Settlement Agreement will receive
amounts ranging from $5,000 to $100,000, depending on disease
severity or disability level; whether the claimant can establish
that her implants have ruptured; and whether the claimant also
has had implants manufactured by Dow Corning. Under the second
option, denominated as Long-Term Benefits, current claimants with
3M implants who satisfy more restrictive disease and severity
criteria specified under the Revised Settlement Program can
receive benefits ranging from $37,500 to $250,000.
In addition, current claimants with 3M implants are eligible for
(a) a one-time payment of $3,000 upon removal of 3M implants
during the course of the class settlement, and (b) an advance
payment of $5,000 against the above referenced benefits upon
proof of having 3M implants and upon waiving or not timely
exercising the right to opt out of the Revised Settlement
Program. Current claimants with only Post 8/84 McGhan implants
(or only Post 8/84 McGhan implants plus certain other
manufacturers' implants) are eligible only for benefits ranging
from $10,000 to $50,000.
Eligible participants with 3M implants who did not file current
claims but are able to satisfy the more restrictive disease and
severity criteria during an ongoing period of 15 years will be
eligible for the Long-Term Benefits, subject to certain funding
limitations. Such participants also will be eligible for an
advance payment of $1,000 upon proof of having 3M implants and
upon waiving or not timely exercising the right to opt out of the
Revised Settlement Program. Benefit levels for eligible
participants who are not current claimants and have only Post
8/84 McGhan implants (or only Post 8/84 McGhan implants plus
certain other manufacturers' implants) will range from $10,000 to
$50,000.
The company's obligations to fund Long-Term Benefits for eligible
claimants with 3M implants are cancelable if certain provisions
of the Revised Settlement Program are disapproved on appeal.
Pending appeal, the company will pay Long-Term Benefits to
eligible claimants, providing it receives appropriate releases.
The company's obligations to fund any benefits for claimants with
only Post 8/84 McGhan implants are currently suspended pending
appeals and will be canceled if any of certain provisions are
disapproved on appeal. In either event, the other benefits
provided under the Revised Settlement Program would still be
payable to any claimant with 3M implants who elected to
participate in the program.
As of the date of this filing, it is still uncertain how many
plaintiffs will choose to participate in the Revised Settlement
Program, or what disease criteria they will satisfy, and what
options they will choose. As a result, the total amount and
timing of the company's prospective payments under the Revised
Settlement Program cannot be determined with precision at this
time. The company, however, paid $125 million in January 1996
into a court-administered fund as an initial reserve against
costs of claims payable by the company under the Revised
Settlement Program (along with a $5 million administrative
assessment).
In the first quarter of 1994, the company took a pre-tax charge
of $35 million ($22 million after tax) in recognition of its then
best estimate of its probable liabilities and associated
expenses, net of the probable amount of insurance recoverable
from its carriers. In the second quarter of 1996, the company
increased its estimate of the minimum probable liabilities and
associated expenses to approximately $991 million. This amount
represents the company's best estimate of the cost and expense of
the Revised Settlement Program and the cost and expense of
resolving opt-out claims. After subtracting payments of $525
million as of December 31, 1996 (which includes the January 1996
payment of $130 million under the Revised Settlement Program) for
defense costs and settlements with litigants and claimants, the
company had accrued liabilities of $466 million at year-end 1996.
The company has substantial primary and excess products liability
occurrence insurance coverage and claims-made products liability
insurance coverage, which it believes provide coverage for
substantially all of its current exposure for breast implant
claims and defense costs. Most insurers have alleged reservations
of rights to deny all or part of the coverage for differing
reasons, including each insurer's obligations in relation to the
other insurers (i.e., allocation) and which claims trigger both
the various occurrence and claims-made insurance policies. Some
insurers have resolved and paid, or committed to, their policy
obligations. The company believes the failure of many insurers to
voluntarily perform as promised subjects them to the company's
claims for excess liability and damages for breach of the
insurers' obligation of good faith.
On September 22, 1994, three excess coverage occurrence 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
allocation among insurers. 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
of responsibility among the company's various occurrence insurers
with applicable coverages. The state of Texas has the most
implant claims. This action has since been removed to the U.S.
District Court, Eastern District of Texas, and stayed pending
resolution of the litigation in the Minnesota courts.
The insurers that are parties to these actions generally
acknowledge that they issued products liability insurance to the
company and that breast implant claims are products liability
claims. The trial in Minnesota to resolve the company's insurance
coverage and the financial responsibility of occurrence insurers
for breast implant claims and defense costs began on June 4,
1996, and is continuing in phases as scheduled by the court.
In mid-October 1995, the occurrence insurers that are parties to
the litigation in Minnesota filed more than 30 motions for
summary judgment or partial summary judgment. The insurers,
through these motions, attempt to shift all or a portion of the
responsibility for those claims the company believes fall within
the period of occurrence-based coverage (before 1986) into the
period of claims-made coverage (from and after 1986). The trial
court denied the insurers' motions, ruling that the key issues of
"trigger" and allocation raised in these motions would be
resolved at trial.
In the trial's first phase, the court granted 3M partial
declaratory judgment on the question of when insurance coverage
is "triggered." The court also granted the insurers' motion for
partial declaratory judgment on the question of the allocation
method to be applied in the case. The trial will continue with
further developments expected on the allocation issue, including
the specific application of the court-selected method of
allocation to particular policies. If the occurrence insurers
ultimately prevail in this insurance litigation, the company
could be effectively deprived of significant insurance coverage
for breast implant claims, the amount of which is not presently
determinable. (See discussion of the accrued receivables for
insurance recoveries below.)
The company believes it ultimately will prevail in this insurance
litigation. The company's belief is based on an analysis of its
insurance policies; court decisions on similar issues;
reimbursement by insurers for these types of claims; and
consultation with outside counsel who are experts in insurance
coverage matters.
As of December 31, 1996, the company had accrued receivables for
insurance recoveries of $864 million. Various factors could
affect the timing and amount of proceeds to be received under the
company's various insurance policies, including (i) the timing of
payments made in settlement of claims, (ii) the outcome of
occurrence insurance litigation in the courts of Minnesota (as
discussed above) and Texas, (iii) potential arbitration with
claims-made insurers, (iv) delays in payment by insurers and (v)
the extent to which insurers may become insolvent in the future.
There can be no absolute assurance that the company will collect
all amounts accrued as being probable of recovery from its
insurers.
The company's current estimate of the probable liabilities,
associated expenses and probable insurance recoveries related to
the breast implant claims is based on the facts and circumstances
existing at this time. New developments may occur that could
affect the company's estimates of probable liabilities (including
associated expenses) and the probable amount of insurance
recoveries. These developments include, but are not limited to,
(i) the number of plaintiffs who elect to opt out and pursue
individual claims against the company, (ii) the success of and
costs to the company in defending such opt-out claims, including
claims involving breast implants not manufactured or sold by the
company, (iii) the outcome of the occurrence insurance litigation
in the courts of Minnesota and Texas, and (iv) the outcome of
potential arbitration with claims-made insurers.
The company cannot determine the impact of these potential
developments on the current estimate of probable liabilities
(including associated expenses) and the probable amount of
insurance recoveries. Accordingly, the company is not able to
estimate its potential future liabilities beyond the current
estimate of probable liabilities. As new developments occur, the
estimates may be revised, or additional charges may be necessary
to reflect the impact of these developments on the costs to the
company of resolving breast implant litigation and claims. While
such revisions or additional future charges could have a material
adverse impact on the company's net income in the quarterly
period in which they are recorded, the company believes that such
revisions or additional charges, if any, would not have a
material adverse effect on the company's consolidated financial
position or annual results of operations.
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. The
company believes, based on these ongoing reviews and the bases
described in the fourth preceding paragraph, that the collectible
coverage provided by its applicable insurance policies is
sufficient to cover substantially all of its current exposure for
breast implant claims and defense costs. Based on the
availability of this insurance coverage, the company believes
that its uninsured financial exposure has not materially changed
since the first quarter of 1994. Therefore, no recognition of
additional charges has been made as of December 31, 1996.
Environmental Matters
The company also is involved in a number of environmental
proceedings by governmental agencies and by private parties
asserting liability for past waste disposal and other alleged
environmental damage. The company conducts ongoing
investigations, assisted by environmental consultants, to
determine accruals for the probable, estimable costs of
remediation. The remediation accruals are reviewed each quarter
and changes are made as appropriate.
Item 4. Submission of Matters to a Vote of Security Holders.
None in the quarter ended December 31, 1996.
Part II
Item 5. Market Price of 3M's Common Stock and Related Security
Holder Matters.
At January 31, 1997, there were 133,108 shareholders of record.
3M's stock is listed on the New York Stock Exchange, Pacific
Stock Exchange, Chicago Stock Exchange, Amsterdam Stock Exchange,
German stock exchanges, Swiss stock exchanges and Tokyo Stock
Exchange.
Stock price comparisons (New York Stock Exchange Composite
Transactions) are as follows:
Quarter First Second Third Fourth Year
1996 High $69.88 $70.75 $71.75 $85.88 $85.88
Low 62.00 63.50 61.25 68.63 61.25
1995 High 58.88 62.13 60.13 69.88 69.88
Low 50.75 56.50 53.88 55.13 50.75
Stock prices have not been adjusted for the distribution of the
commmon stock of Imation Corp.
Item 6. Selected Financial Data.
(Dollars in millions, except per share amounts)
Year Ended December 31: 1996 1995 1994 1993 1992
Net Sales................ $14,236 $13,460 $12,148 $11,053 $10,817
Income from
Continuing Operations.....1,516 1,306* 1,207 1,133 1,116
Per Share of Common Stock:
Continuing Operations......3.63 3.11* 2.85 2.61 2.55
Cash Dividends Declared
and Paid..............$ 1.92 $ 1.88 $ 1.76 $ 1.66 $ 1.60
Ratio of Earnings to
Fixed Charges.............16.59 12.41 13.96 15.93 13.11
At December 31:
Total Assets**............$13,364 $14,183 $13,068 $11,795 $11,528
Long-Term Debt (excluding
portion due within
one year)...................851 1,203 1,031 796 687
Amounts are presented on a continuing operations basis.
Discontinued operations and the restructuring charge are
discussed in the Notes to Consolidated Financial Statements.
* 1995 includes a pre-tax restructuring charge of $79 million, or
12 cents per share.
**Periods prior to 1996 include net assets of discontinued
operations.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Operating Results
In November 1995, the Board of Directors approved a plan to
launch the company's data storage and imaging businesses as an
independent, publicly owned company and to discontinue 3M's audio
and video business. As a result, these businesses are presented
as discontinued operations in the financial statements and notes.
The following discussion is on a continuing operations basis.
Net sales in 1996 rose 5.8 percent to $14.236 billion. This
followed increases of 10.8 percent in 1995 and 9.9 percent in
1994. Growth in 1996 was held back by the stronger U.S. dollar.
Sales in the United States totaled $6.655 billion, up about 7
percent from 1995. Volume rose 6 percent, well above the growth
of the U.S. economy. Internationally, sales increased about 5
percent to $7.581 billion. Volume rose 10 percent, the third
consecutive year of double-digit gains abroad. The stronger U.S.
dollar reduced international sales by about 6 percent.
Selling prices worldwide increased about 1 percent, following a 2
percent increase in 1995. These increases helped offset
significant raw material inflation in 1995.
Components of Sales Change
1996 1995
U.S. Intl. Worldwide U.S. Intl. Worldwide
Volume 6% 10% 8% 3% 10% 7%
Price 1 1 1 1 2 2
Translation - (6) (3) - 5 2
Total 7% 5% 6% 4% 17% 11%
Cost of goods sold was 56.9 percent of sales, down nearly half a
percentage point from 1995. Solid volume growth, higher selling
prices, productivity gains and a slight decline in raw material
costs drove this improvement. Cost of goods sold was negatively
affected by the stronger U.S. dollar. In 1995, cost of goods
sold was elevated by a 7.5 percent rise in raw material costs,
the largest increase in many years. Cost of goods sold includes
manufacturing, research and development, and engineering
expenses.
Selling, general and administrative expenses were 25.6 percent of
sales in both 1996 and 1995, down nearly a full percentage point
from 1994. This spending benefited from continued emphasis on
cost control and productivity improvement.
(Percent of sales) 1996 1995 1994
Cost of goods sold 56.9 57.3 56.3
Selling, general and
administrative expenses 25.6 25.6 26.5
In 1995, 3M recorded one-time, pre-tax charges of $653 million
related to the spin-off of the data storage and imaging
businesses and the discontinuance of the audio and video
business. Of this amount, $79 million related to restructuring
in continuing operations and is reported separately on the
Consolidated Statement of Income. The remainder of the charges
related to discontinued operations. These charges and
discontinued operations are discussed in the Notes to
Consolidated Financial Statements.
Operating income totaled $2.491 billion, up 12.2 percent from
1995. Excluding the $79 million charge in 1995, operating income
rose 8.3 percent.
In the United States, excluding the one-time charges in 1995,
operating income increased 13 percent, and profit margins
improved by nearly one percentage point.
Internationally, excluding restructuring charges, operating
income rose about 5 percent, and profit margins were unchanged
from 1995. Negative currency effects reduced international
profits by 9 percent and profit margins by about half a
percentage point.
In 1995, excluding the one-time charge, operating income rose
about 10 percent. International operations paced this increase,
helped by solid volume growth, productivity improvement and
positive currency effects.
The company estimates that currency effects reduced operating
income by $118 million in 1996 and increased operating income by
$79 million in 1995.
(Percent of sales) 1996 1995 1994
Operating income 17.5 17.1* 17.2
* Excludes restructuring charge
Interest expense was $79 million, compared with $102 million in
1995 and $70 million in 1994. The decrease in 1996 reflected
lower interest rates and a reduction in debt. The increase in
1995 was due to a planned increase in debt and higher interest
rates.
Investment and other income was $67 million, compared with $49
million in 1995 and $21 million in 1994. Higher cash and
securities balances and improved investment results drove the
increases in both years.
In 1994, 3M recorded a pre-tax charge of $35 million related to
breast implant litigation. Other income and expense in 1994
includes this amount, which is reported separately on the
Consolidated Statement of Income.
The effective tax rate was 35.8 percent of pre-tax income, down
slightly from 1995 and 1994.
Income from continuing operations totaled $1.516 billion, or
$3.63 per share. In 1995, income from continuing operations
totaled $1.306 billion, or $3.11 per share ($1.358 billion, or
$3.23 a share, excluding the restructuring charge). Excluding
the 1995 restructuring charge and the 1994 implant litigation
charge, earnings per share from continuing operations increased
12.4 percent in 1996 and 11.4 percent in 1995.
Net income in 1996 totaled $1.526 billion, or $3.65 per share.
In 1995, net income before one-time charges totaled $1.390
billion, or $3.31 per share. Including 1995 one-time charges,
net income was $976 million, or $2.32 per share.
In 1996, changes in the value of the U.S. dollar reduced income
from continuing operations by an estimated $65 million, or 15
cents per share. In 1995, currency effects increased income from
continuing operations by an estimated $45 million, or 10 cents
per share. Changes in the value of the U.S. dollar had little
impact on profits in 1994. These estimates include the effect of
translating 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 its international
companies; and transaction gains and losses in countries not
considered to be highly inflationary.
Return on average stockholders' equity was 24.4 percent, up from
19.2 percent in 1995. Adjusting for the restructuring charge and
the impact of discontinued operations, return on equity in 1995
was basically the same as in 1996. Return on capital employed
was 24.9 percent, up from 23.4 percent in 1995. Adjusting for
the continuing operations restructuring charge, return on capital
employed was 24.3 percent in 1995.
At December 31, 1996, employment totaled 74,289 people, a decline
of about 11,000 from year-end 1995. This reduction primarily was
due to the spin-off of the data storage and imaging businesses
and the discontinuance of the audio and video business. In early
1997, about 1,000 additional people left 3M through voluntary
separation programs.
Performance by Business Sector
Industrial and Consumer Sector:
Sales totaled $8.891 billion, up 6.3 percent from 1995.
Operating income increased 15.6 percent to $1.543 billion.
Operating income was 17.4 percent of sales.
This sector develops, manufactures and markets innovative, high-
value products for home, offices and industrial customers around
the world. Key industrial products include tapes, adhesives,
abrasives, specialty chemicals, resins, electrical connectors,
and flexible circuits. Many of the sector's new product programs
serve fast-growing industries, including semiconductors,
electronics, specialty chemicals, personal computers and energy
management. Key consumer and office supply products include
tapes, notes, scouring pads and sponges, fabric protectors,
energy-saving products and floor matting.
Effective August 1, 1996, 3M and Hoechst AG, Frankfurt, Germany,
formed a joint venture company, Dyneon L.L.C. This new company
produces and markets fluoropolymers, fluoroplastics and
processing additives for demanding applications in the
automotive, aerospace, semiconductor and other industries. As 54
percent majority owner, 3M has consolidated Dyneon's financial
results as part of this sector.
Life Sciences Sector:
Sales totaled $5.242 billion, up 4.4 percent from 1995.
Operating income increased 2.5 percent to $1.091 billion.
Operating income was 20.8 percent of sales.
This sector produces innovative products that contribute to
better health and safety for people around the world. In the
health care market, this sector is a leader in medical and
surgical supplies, clinical information systems, drug delivery
technologies and dental products. In the safety area, this
sector is a global leader in reflective materials for traffic
safety and respirators for worker protection. This sector also
is a leader in closures for disposable diapers, graphics for
trucks and signs, and out-of-home advertising.
Performance by Geographic Area
United States
In the United States, volume rose about 6 percent and selling
prices increased about 1 percent, for a total sales gain of about
7 percent. Operating income was 16.9 percent of sales, up 2
percentage points from 1995. Adjusting for the 1995
restructuring charge, the operating income margin was up nearly
one percentage point from 1995. Solid volume growth, higher
selling prices and productivity gains drove U.S. results.
Europe and Middle East
Unit sales in Europe and the Middle East increased about 7
percent, more than double the rate of economic growth in the
area. Sales totaled $3.6 billion. Selling prices declined
slightly, while currency translation reduced sales by almost 3
percent.
In Western Europe, a market-centered approach to customers is
driving 3M growth. The company also is benefiting from new
products, as well as from key-account programs with major Pan-
European customers and with many regional customers. In Eastern
Europe and the Middle East, the company continues to grow
rapidly, with particularly strong gains in Poland, the Czech
Republic and Turkey. To help sustain strong growth in the
region's emerging economies, more than 600 people have been added
during the past seven years. Sales offices recently were opened
in Croatia, Romania, Bulgaria, Slovakia, Slovenia, Belarus,
Ukraine, Kazakhstan and four cities in Russia.
Asia Pacific
Continuing a record of solid gains, unit sales in the Asia
Pacific area increased about 12 percent in 1996. Selling prices
were down about 1 percent, while currency translation reduced
sales by about 9 percent. In Japan, home of 3M's largest
international company, volume rose about 12 percent, well above
the country's economic growth rate. 3M's growth in Japan is
benefiting from a strong flow of new products and emphasis on
fast-growing industries, including personal computers, health
care and earthquake damping materials.
Sales in Asia rose more than 15 percent in 1996. 3M companies in
Singapore, Korea and the Philippines led growth. To sustain this
momentum, 3M is expanding production in Taiwan, Malaysia and
China; enlarging the technical support facility in Singapore; and
building a new distribution center in Korea.
Latin America, Canada and Africa
In Latin America, unit sales increased more than 20 percent,
continuing a record of strong gains. Freer trade in Latin
America is enabling 3M to add significantly to product lines
there and is allowing the company to deliver goods more
efficiently.
In Canada, unit sales increased about 2 percent. The company is
building upon two platforms for growth: a responsive organization
to serve Canadian customers across all 3M product lines, and an
efficient manufacturing operation to leverage 3M resources across
North America and on a worldwide basis.
In Africa, volume increased more than 10 percent. Sales there
are benefiting from the removal of trade sanctions, which has
boosted exports to neighboring countries and stimulated overall
economic growth.
Financial Position
3M's financial condition remained strong in 1996. The company's
borrowings continued to maintain AAA/Aaa long-term ratings.
Working capital remained well controlled. The company's key
inventory index was 3.8 months, compared with 3.9 months at the
end of 1995. The accounts receivable index was 60 days, down
four days from 1995. The current ratio was 1.7, unchanged from
the end of 1995.
Total debt was $1.968 billion, down slightly from $2.025 billion
at the end of 1995. Long-term debt declined by $352 million,
primarily due to the reclassification to short-term debt of
certain Eurobond and other debt due in 1997. Long-term debt that
matures in 1997 is expected to be replaced with new debt
issuances. Of debt outstanding at year-end 1996, $412 million
represented a guarantee of debt of the 3M Employee Stock
Ownership Plan. Total debt was 24 percent of total capital,
compared with 23 percent in 1995.
Various assets and liabilities, including cash and short-term
debt, can fluctuate significantly on a month-to-month basis
depending on short-term liquidity needs.
Legal proceedings are discussed in the Legal Proceedings section
in Part I, Item 3, of this Form 10-K. There can be no certainty
that the company may not ultimately incur charges, whether for
governmental proceedings and claims, products liability claims,
environmental proceedings or other actions, in excess of
presently established accruals. While such future charges could
have a material adverse impact on the company's net income in the
quarterly period in which they are recorded, the company believes
that such additional charges, if any, would not have a material
adverse effect on the consolidated financial position or annual
results of operations of the company.
Financial Instruments
The company enters into contractual arrangements (derivatives) in
the ordinary course of business to hedge its foreign currency
exposure, interest rate risks and commodity price risks. The
company has a Financial Risk Management Committee that provides
oversight for risk management and derivative activities. This
committee sets forth senior management's financial risk
management philosophy and objectives through a corporate policy.
This committee also provides guidelines for derivative instrument
usage and establishes procedures for control and valuation,
counterparty credit approval, and routine monitoring and
reporting.
The company manages interest expense using a mix of fixed,
floating and variable rate debt. To manage this mix efficiently,
the company may enter into interest rate swaps. Under these
arrangements, the company agrees to exchange, at specified
intervals, the difference between fixed and floating interest
amounts calculated by reference to an agreed-upon notional
principal amount.
The company enters into forward contracts and swaps to hedge
intercompany financing transactions and purchases foreign
currency options to hedge against the effect of exchange rate
fluctuations on cash flows denominated in non-U.S. dollars.
Liquidity
During 1996, cash flows provided by operating activities of
continuing operations totaled $2.041 billion, up from $1.935
billion in 1995. In both years, cash provided from continuing
operations was driven by solid operating results and effective
asset management, and cash flows more than covered capital
expenditures and dividend payments.
Capital spending totaled $1.109 billion, an increase of 1.9
percent from 1995. This followed increases of 11.9 percent in
1995 and 8.2 percent the prior year. These investments are
helping to meet growing global demand for 3M products and to
increase manufacturing efficiency.
Cash used for acquisitions and other investments totaled $263
million, $49 million and $92 million in 1996, 1995 and 1994,
respectively. The increase in 1996 primarily was due to
acquisitions in the health care field and the purchase of the
minority interest in 3M Korea.
Stockholder dividends increased to $1.92 a share. Cash dividend
payments totaled $803 million. 3M has paid dividends since 1916.
In February 1997, the Board of Directors increased the quarterly
dividend on 3M common stock to 53 cents a share, equivalent to an
annual dividend of $2.12 a share, a 10.4 percent increase from
1996. This marks the 39th consecutive yearly increase.
Repurchases of 3M common stock totaled $532 million in 1996,
compared with $351 million in 1995 and $689 million in 1994.
Repurchases were made to support employee stock purchase plans
and for other corporate purposes.
In November 1996, the Board of Directors authorized the
repurchase of up to 10 million of the company's shares. This
share repurchase authorization extends through December 31, 1997.
The company's strong credit rating provides ready and ample
access to funds in global capital markets. 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. At December 31, 1996, $402 million was available for
future financial needs.
Timing differences between payment of implant liabilities and
receipt of related insurance recoveries could affect the cash
flows of future periods. At this time, the amount and timing of
prospective payments cannot be determined with precision. 3M
believes that these timing differences will not have a material
adverse effect on the company's consolidated financial position
or liquidity. This potential cash flow impact is discussed more
fully in the Legal Proceedings section in Part I, Item 3, of this
Form 10-K.
Future Outlook
3M expects solid sales and earnings growth again in 1997. The
company expects to benefit from major new product programs, a
sharp focus on customer satisfaction, further expansion into
international markets, efforts to streamline 3M's supply chain,
and continued productivity improvement.
The company has an 8 percent annual productivity objective based
on sales per employee. Employment levels within the company are
expected to be consistent with that objective.
Raw material costs are expected to be down slightly in 1997,
providing a small benefit to cost of goods sold. However, this
impact could be more than offset by negative currency effects
relating to the purchases 3M's international companies make from
the United States. For 1997, capital spending is expected to
increase to around $1.3 billion dollars. The company is
investing capital to support important growth initiatives.
Based on exchange rates at the end of January 1997, currency
could reduce 1997 earnings by about 15 cents a share. Shares
outstanding are expected to decrease by about 4 million shares in
1997.
The company does not anticipate a significant change in its tax
rate in 1997.
Over the period 1997 to 1999, 3M aims to increase sales about 10
percent a year; operating income 12 to 13 percent a year; and
earnings per share 13 to 14 percent a year.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for certain forward-looking statements. This Annual
Report on Form 10-K contains forward-looking statements that
reflect the company's current views with respect to future events
and financial performance.
These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ
materially from historical results or those anticipated. The
words "aim," "believe," "expect," "anticipate," "intend,"
"estimate" and other expressions that indicate future events and
trends identify forward-looking statements. Actual future
results and trends may differ materially from historical results
or those anticipated depending on a variety of factors,
including, but not limited to, foreign exchange rates and
fluctuations in those rates; the effects of, and changes in,
worldwide economic conditions; raw materials, including shortages
and increases in the costs of key raw materials; and legal
proceedings (see discussion of Legal Proceedings in Part I, Item
3 of this Form 10-K).
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
Reference (pages)
Form 10-K
Data submitted herewith:
Report of Independent Accountants..................... 22
Consolidated Statement of Income for the years ended
December 31, 1996, 1995 and 1994 .................. 23
Consolidated Balance Sheet at December 31, 1996 and
1995 .............................. ................ 24
Consolidated Statement of Changes in Stockholders'
Equity for the years ended December 31, 1996,
1995 and 1994 ..................................... 25
Consolidated Statement of Cash Flows
for the years ended December 31,
1996, 1995 and 1994 ................... ......... ... 26
Notes to Consolidated Financial Statements ..........27-42
Report of Independent Auditors
To the Stockholders of Minnesota Mining and Manufacturing
Company:
We have audited the consolidated financial statements of
Minnesota Mining and Manufacturing Company and Subsidiaries as
listed in Item 8 of this Form 10-K. These financial statements
are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial
statements 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 misstatement. 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, 1996 and 1995, and the
consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
St. Paul, Minnesota
February 10, 1997
Consolidated Statement of Income
Minnesota Mining and Manufacturing Company and Subsidiaries
Years ended December 31 1996 1995 1994
(Amounts in millions, except per-share amounts)
Net sales $14,236 $13,460 $12,148
_______________________________________________________________________
Operating expenses
Cost of goods sold 8,099 7,720 6,829
Selling, general and administrative expenses 3,646 3,440 3,224
Restructuring charge -- 79 --
_______________________________________________________________________
Total 11,745 11,239 10,053
_______________________________________________________________________
Operating income 2,491 2,221 2,095
_______________________________________________________________________
Other income and expense
Interest expense 79 102 70
Investment and other income - net (67) (49) (21)
Implant litigation - net -- -- 35
_______________________________________________________________________
Total 12 53 84
_______________________________________________________________________
Income from continuing operations before income taxes
and minority interest 2,479 2,168 2,011
Provision for income taxes 886 785 731
Minority interest 77 77 73
_______________________________________________________________________
Income from continuing operations 1,516 1,306 1,207
Discontinued operations
Income from operations of discontinued businesses,
net of income taxes -- 43 115
Gain (loss) on disposal of discontinued businesses,
net of income taxes 10 (373) --
_______________________________________________________________________
Net income $ 1,526 $ 976 $ 1,322
_______________________________________________________________________
Per-share amounts
Continuing operations $ 3.63 $ 3.11 $ 2.85
Discontinued operations .02 (.79) .28
_______________________________________________________________________
Net income $ 3.65 $ 2.32 $ 3.13
_______________________________________________________________________
Average shares outstanding 418.2 419.8 423.0
The accompanying Notes to Consolidated Financial Statements are an
integral part of this statement.
Consolidated Balance Sheet
Minnesota Mining and Manufacturing Company and Subsidiaries
At December 31 1996 1995
(Dollars in millions)
Assets
Current assets
Cash and cash equivalents $ 583 $ 485
Other securities 161 287
Accounts receivable - net 2,504 2,398
Inventories 2,264 2,206
Other current assets 974 1,019
_________________________________________________________________
Total current assets 6,486 6,395
Investments 585 565
Property, plant and equipment - net 4,844 4,638
Other assets 1,449 1,177
Net assets of discontinued operations -- 1,408
_________________________________________________________________
Total $13,364 $14,183
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 895 $ 762
Payroll 300 298
Income taxes 201 214
Short-term debt 1,117 822
Other current liabilities 1,276 1,628
_________________________________________________________________
Total current liabilities 3,789 3,724
Other liabilities 2,440 2,372
Long-term debt 851 1,203
Stockholders' equity - net 6,284 6,884
Shares outstanding - 1996: 416,836,008
1995: 418,702,754
_________________________________________________________________
Total $13,364 $14,183
The accompanying Notes to Consolidated Financial Statements are an
integral part of this statement.
Consolidated Statement of Changes in Stockholders' Equity
Minnesota Mining and Manufacturing Company and Subsidiaries
Years ended December 31 1996 1995 1994
(Dollars in millions, except per-share amounts)
Common stock at beginning and end of year $ 296 $ 296 $ 296
Retained earnings
Balance at beginning of year 9,164 9,039 8,500
Net income 1,526 976 1,322
Dividends paid
(per share: $1.92, $1.88, $1.76) (803) (790) (744)
Special dividend of Imation Corp.
common stock (1,008) -- --
Effects of stock option and benefit plans (123) (61) (39)
Balance at end of year 8,756 9,164 9,039
Unearned compensation - ESOP
Balance at beginning of year (437) (460) (479)
Amortization 25 23 19
Balance at end of year (412) (437) (460)
Cumulative translation - net
Balance at beginning of year (102) (163) (331)
Translation adjustments (122) 61 168
Adjustment for Imation Corp.
special dividend 46 -- --
Balance at end of year (178) (102) (163)
Debt and equity securities, unrealized gain(loss) - net
Balance at beginning of year 16 (3) --
Fair value adjustments (1) 19 (3)
Balance at end of year 15 16 (3)
Treasury stock, at cost
Balance at beginning of year (2,053) (1,975) (1,474)
Reacquired stock (millions of
shares: 7.6, 5.9, 13.1) (532) (351) (689)
Issuances pursuant to stock option and
benefit plans (millions of
shares: 5.7, 4.8, 3.4) 392 273 188
Balance at end of year (2,193) (2,053) (1,975)
(millions of shares: 55.2, 53.3, 52.2)
Stockholders' equity - net $ 6,284 $ 6,884 $ 6,734
Common stock, without par value, of 500 million shares is
authorized, with 472,016,528 shares issued in 1996, 1995 and
1994. Preferred stock, without par value, of 10 million shares
is authorized but unissued. All share and per-share data reflect
a two-for-one common stock split effective March 15, 1994.
The accompanying Notes to Consolidated Financial Statements are an
integral part of this statement.
Consolidated Statement of Cash Flows
Minnesota Mining and Manufacturing Company and Subsidiaries
Years ended December 31 1996 1995 1994
(Dollars in millions)
Cash Flows from Operating Activities
Net income $ 1,526 $ 976 $1,322
Less income (loss) from discontinued
operations 10 (330) 115
_______________________________________________________________________
Income from continuing operations 1,516 1,306 1,207
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities
Implant litigation - net (275) (112) (62)
Depreciation 825 795 793
Amortization 58 64 79
Accounts receivable (170) (90) (225)
Inventories (75) (51) (240)
Other 162 23 103
_______________________________________________________________________
Net cash provided by continuing operations 2,041 1,935 1,655
Net cash provided by discontinued operations 170 325 274
_______________________________________________________________________
Net cash provided by operating activities 2,211 2,260 1,929
Cash Flows from Investing Activities
Capital expenditures (1,109) (1,088) (972)
Proceeds from sale of property, plant
and equipment 66 54 54
Acquisitions and other investments (263) (49) (92)
Proceeds from divestitures and investments 62 82 22
Discontinued operations - net (17) (207) (183)
_______________________________________________________________________
Net cash used in investing activities (1,261) (1,208) (1,171)
Cash Flows from Financing Activities
Change in short-term debt - net (76) (41) 216
Repayment of long-term debt (15) (156) (62)
Proceeds from long-term debt 173 223 401
Purchases of treasury stock (532) (351) (689)
Reissuances of treasury stock 268 214 138
Payment of dividends (803) (790) (744)
Discontinued operations 79 -- --
_______________________________________________________________________
Net cash used in financing activities (906) (901) (740)
Effect of exchange rate changes on cash 54 37 5
______________________________________________________________________
Net increase in cash and cash equivalents 98 188 23
Cash and cash equivalents at beginning of year 485 297 274
______________________________________________________________________
Cash and cash equivalents at end of year $ 583 $ 485 $ 297
______________________________________________________________________
The accompanying Notes to Consolidated Financial Statements are an
integral part of this statement.
Notes to Consolidated Financial Statements
Accounting Policies
Consolidation: All significant subsidiaries are consolidated.
Unconsolidated subsidiaries and affiliates are included on the
equity basis.
Foreign currency translation: Local currencies generally are
considered the functional currencies outside the United States,
except in countries treated as highly inflationary. Assets and
liabilities for operations in local currency environments are
translated at year-end exchange rates. Income and expense items
are translated at average rates of exchange prevailing during the
year. Cumulative translation adjustments are recorded as a
component of stockholders' equity.
For operations in countries treated as highly inflationary,
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 and are not material.
Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
these estimates.
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 and investments: 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. Investments primarily include debt securities held
by captive insurance and banking operations; individual and
commercial loans receivable held by banking operations; the cash
surrender value of life insurance policies; and real estate and
venture capital investments.
Inventories: Inventories are stated at lower of cost or market,
with cost generally determined on a first-in, first-out basis.
Other assets: Other assets include product and other insurance
claims, goodwill, patents, other intangibles, deferred taxes, and
other noncurrent assets. Goodwill generally is amortized on a
straight-line basis over the periods benefited, principally in
the range of 10 to 40 years. Other intangible items are
amortized on a straight-line basis over their estimated economic
lives.
Revenue recognition: Revenue is recognized upon shipment of
goods to customers and upon performance of services. The company
sells a wide range of products to a diversified base of customers
around the world and, therefore, believes there is no material
concentration of credit risk.
Property, plant and equipment: Depreciation of property, plant
and equipment generally is computed on a straight-line basis over
its estimated useful life. Fully depreciated assets are retained
in property and accumulated depreciation accounts until removed
from service. Upon disposal, assets and related accumulated
depreciation are removed from the accounts and the net amount,
less proceeds from disposal, is charged or credited to income.
Advertising: Advertising costs generally are charged to
operations in the year incurred.
Derivatives: The company uses derivative financial instruments
to manage risks generally associated with foreign exchange rate,
interest rate and commodity market volatility. The company does
not hold or issue derivative financial instruments for trading
purposes. The company is not a party to leveraged derivatives.
Realized and unrealized gains and losses are deferred until the
underlying transactions are realized. These gains and losses
generally are recognized either as interest expense over the
borrowing period for interest rate and currency swaps; as an
adjustment to cost of goods sold for inventory-related hedge
transactions; or in stockholders' equity for hedges of net
investments in international companies. Cash flows attributable
to these financial instruments are included with the cash flows
of the associated hedged items.
Accounting for stock-based compensation: The company uses the
intrinsic value method for the Management Stock Ownership
Program. The General Employees' Stock Purchase Plan is
considered noncompensatory.
Discontinued Operations
In November 1995, the Board of Directors approved a plan to
launch the company's data storage and imaging businesses as an
independent, publicly owned company and to discontinue 3M's audio
and video business. In June 1996, the Board of Directors
approved the tax-free distribution by 3M of the common stock of
Imation Corp. (Imation) as a special dividend of one share of
Imation common stock for every 10 shares of outstanding 3M common
stock held of record as of the close of business on June 28,
1996. The company recorded the special dividend of Imation
common stock by reducing retained earnings by $1.008 billion,
which represented the carrying value of the net assets underlying
the common stock distributed. The company's consolidated
financial statements and notes report Imation and the audio and
video business as discontinued operations.
Income from operations of the discontinued businesses for 1995
include results through November 30, 1995. Income from
operations of discontinued businesses included interest expense
allocations (based on the ratio of net assets of discontinued
operations to consolidated net assets plus debt) of $15 million
and $17 million in 1995 and 1994, respectively.
The 1995 loss on disposal of $373 million included the estimated
future results of operations through the estimated date of the
spin-off or closure. Major components of the loss on disposal
include $300 million of severance costs and $265 million of asset
write-downs, net of deferred income taxes of $232 million. The
loss on disposal calculation included $13 million of interest
expense. Net cash provided by discontinued operations in 1995
differs from the loss from discontinued operations principally
due to two factors -- the loss on disposal for which no cash had
been expended at December 31, 1995, and depreciation. The $10
million 1996 gain on disposal reflects final adjustments to the
company's 1995 estimated loss on disposal.
Discontinued Operations
(Millions) 1996 1995 1994
Net sales $-- $2,645 $2,931
Income before income taxes and
minority interest -- 59 143
Provision for income taxes -- 23 40
Minority interest -- (7) (12)
Income from operations, net of income taxes -- 43 115
Gain (loss) on disposal,
net of income taxes 10 (373) --
Total discontinued operations,
net of income taxes $10 $ (330) $ 115
Net Assets of Discontinued Operations
(Millions) 1996 1995
Current assets $-- $1,212
Property, plant and equipment - net -- 456
Other assets -- 192
Current liabilities -- (357)
Other liabilities -- (95)
Net assets of discontinued operations $-- $1,408
Restructuring Charge
The company recorded a restructuring charge of $79 million in
1995 related to the spin-off of the data storage and imaging
businesses and the discontinuance of the audio and video
business. Major components of this charge included $50 million
of employee severance costs and $17 million related to the write-
down of certain assets to net realizable value. In early 1997,
about 1,000 people, mainly in corporate service functions in the
United States and Europe, left 3M through voluntary separation
programs. About $19 million in cash payments related to employee
separations were made as of December 31, 1996. The remaining
liability for employee separations and other items is included in
other current liabilities.
Supplemental Income Statement Information
_________________________________________________________________
(Millions) 1996 1995 1994
Research and development costs $947 $883 $828
Advertising costs 459 423 422
Supplemental Balance Sheet Information
_________________________________________________________________
(Millions) 1996 1995
Accounts receivable
Accounts receivable $ 2,609 $ 2,492
Less allowances 105 94
Accounts receivable - net $ 2,504 $ 2,398
Inventories
Finished goods $ 1,195 $ 1,164
Work in process 591 565
Raw materials and supplies 478 477
Total inventories $ 2,264 $ 2,206
Other current assets
Product and other insurance claims $ 419 $ 334
Deferred income taxes 161 307
Other 394 378
Total other current assets $ 974 $ 1,019
Other securities and investments*
Held-to-maturity (amortized cost) $ 68 $ 168
Available-for-sale (fair value) 195 225
Other (cost, which approximates fair value) 483 459
Total other securities and investments $ 746 $ 852
Property, plant and equipment - at cost
Land $ 299 $ 296
Buildings and leasehold improvements 2,885 2,814
Machinery and equipment 8,449 7,673
Construction in progress 417 451
$12,050 $11,234
Less accumulated depreciation 7,206 6,596
Property, plant and equipment - net $ 4,844 $ 4,638
Other assets
Product and other insurance claims $ 859 $ 781
Deferred income taxes 132 105
Other 458 291
Total other assets $ 1,449 $ 1,177
*Unrealized gains and losses relating to other securities and
investments classified as available-for-sale are included as a
component of stockholders' equity. Realized gains and losses in
1996 and 1995 were not material.
Supplemental Balance Sheet Information (continued)
(Millions) 1996 1995
Other current liabilities
Product and other liabilities $ 256 $ 369
Severance and other restructuring liabilities 234 379
Deposits - banking operations** 301 290
Deferred income taxes 11 10
Other 474 580
Total other current liabilities $ 1,276 $ 1,628
Other liabilities
Product and other liabilities $ 876 $ 923
Minority interest in subsidiaries 373 483
Nonpension postretirement benefits 465 423
Deferred income taxes 97 90
Other 629 453
Total other liabilities $ 2,440 $ 2,372
**Primarily demand deposits and, as such, the carrying amount
approximates fair value.
Supplemental Cash Flow Information
In connection with the spin-off of the data storage and imaging
businesses, the company recorded cash proceeds of $79 million in
1996, primarily related to the sale of international assets to
Imation. Imation also retired $65 million of short-term debt
related to its businesses as of June 30, 1996.
In 1996, 3M increased its ownership in 3M Korea from 60 percent
to 100 percent by purchasing the remaining interest from its
minority shareholders. The purchase price included the deferral
of $72 million that will be paid in installments over three
years.
_________________________________________________________________
(Millions) 1996 1995 1994
Interest payments $ 78 $104 $ 72
Income tax payments 761 793 865
Debt
Short-Term Debt Effective
(Millions) Interest Rate* 1996 1995
Long-term debt - current portion 5.36% $ 555 $ 47
Commercial paper 4.79% 353 574
Other borrowings 4.44% 209 201
Total short-term debt $1,117 $ 822
_________________________________________________________________
Long-Term Debt Effective Maturity
(Millions) Interest Rate* Date 1996 1995
ESOP debt guarantee 8.22% 1998-2004 $ 378 $ 412
German Mark 5% Euronote 5.44% 2001 165 --
Canadian 6.5% Eurobond 4.81% 1998 114 114
Medium-term 6.25% note 5.32% 1999 100 100
Other borrowings 5.12% 1998-2025 94 79
U.S. 7.75% Eurobond -- 1997 -- 200
U.S. 6.375% Eurobond -- 1997 -- 200
Swiss Franc 5.5% note -- 1997 -- 98
Total long-term debt $ 851 $1,203
*Effective interest rates reflect the effects of interest rate
and currency swaps at December 31, 1996.
Debt with fixed interest rates includes the ESOP, Canadian
Eurobond and a portion of other borrowings. ESOP debt is
serviced by dividends on stock held by the ESOP and by company
contributions. These contributions are reported as an employee
benefit expense. Other borrowings primarily are by 3M's
international companies and from industrial bond issues in the
United States.
Maturities of long-term debt for the next five years are as
follows: 1997, $555 million; 1998, $200 million; 1999, $144
million; 2000, $44 million; and 2001, $227 million.
The company estimates that the fair value of short-term and long-
term debt approximates the carrying amount of this debt. Debt
covenants do not restrict the payment of dividends.
Other Financial Instruments
Interest rate and currency swaps: To manage interest rate and
foreign exchange rate risk and to lower its cost of borrowing,
the company has entered into interest rate and currency swaps.
The notional amounts set forth in the table below serve solely as
a basis for the calculation of payment streams to be exchanged.
These notional amounts are not a measure of the exposure of the
company through its use of derivatives. These instruments
generally mature in relationship to their underlying debt and
have maturities extending to 2001. Unrealized gains and losses
and exposure to changes in market conditions were not material at
December 31, 1996 and 1995.
Notional Amounts
(Millions) 1996 1995
Interest rate swaps $829 $836
Currency swaps 426 306
Foreign exchange forward and options contracts: The company has
entered into foreign exchange forward and options contracts, the
majority of which have maturities of less than one year. The
face amounts represent contracted U.S. dollar equivalents of
forward and options contracts denominated in non-U.S. dollars.
The amounts at risk are not material because the company has the
ability to generate offsetting foreign currency cash flows.
Unrealized gains and losses at December 31, 1996 and 1995, were
not material.
Face Amounts
(Millions) 1996 1995
Forward contracts $869 $1,178
Options purchased -- 196
Options sold -- 137
The company engages in foreign currency hedging activities to
reduce exchange risks arising from cross-border cash flows
denominated in non-U.S. dollars. The company operates on a global
basis, generating more than half its revenues from international
customers and engaging in substantial product and financial
transfers among geographic areas. Major forward contracts at
December 31, 1996, were denominated in Dutch guilders, Japanese
yen, German marks, French francs and British pound sterling.
Credit risk: The company is exposed to credit loss in the event
of nonperformance by counterparties in interest rate swaps,
currency swaps and foreign exchange contracts, but does not
anticipate nonperformance by any of these counterparties. The
company actively monitors its exposure to credit risk through the
use of credit approvals and credit limits, and by selecting major
international banks and financial institutions as counterparties.
Leases
Rental expense under operating leases was $138 million in 1996,
$154 million in 1995 and $140 million in 1994. The table below
sets forth minimum payments under operating leases with
noncancelable terms in excess of one year, at December 31, 1996.
_________________________________________________________________
After
(Millions) 1997 1998 1999 2000 2001 2001 Total
Minimum lease payments $74 $53 $40 $29 $19 $70 $285
Income Taxes
_________________________________________________________________
Income From Continuing Operations Before Income Taxes and
Minority Interest
(Millions) 1996 1995 1994
United States $1,534 $1,274 $1,284
International 945 894 727
Total $2,479 $2,168 $2,011
_________________________________________________________________
Provision for Income Taxes
(Millions) 1996 1995 1994
Currently payable
Federal $ 331 $ 346 $ 306
State 63 58 60
International 405 380 306
Deferred
Federal 76 21 48
State 7 2 4
International 4 (22) 7
Total $ 886 $ 785 $ 731
Components of Deferred Tax Assets and Liabilities
(Millions) 1996 1995
Accruals currently not deductible
Benefit costs $235 $265
Severance and other
restructuring costs 89 144
Product and other liabilities 431 492
Product and other
insurance claims (487) (425)
Accelerated depreciation (304) (350)
Other 221 186
Net deferred tax asset $185 $312
At December 31, 1996, approximately $3.244 billion of retained
earnings attributable to international companies were 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 taxes that might arise were these earnings to be
remitted.
_________________________________________________________________
Reconciliation of Effective Income Tax Rate 1996 1995 1994
Statutory U.S. tax rate 35.0% 35.0% 35.0%
State income taxes - net 1.8 1.8 2.1
International income taxes - net .5 .5 1.2
All other - net (1.5) (1.1) (1.9)
Effective worldwide tax rate 35.8% 36.2% 36.4%
Business Segments
3M's businesses are organized into two sectors: Industrial and
Consumer, and Life Sciences. These sectors have worldwide
responsibility for virtually all of the company's product lines.
These product lines serve a wide range of markets, including
automotive, communications, consumer, electronics, health care,
industrial, office, personal care and safety. 3M is not
dependent on any single product or market.
Financial information relating to the company's business sectors
for the years ended December 31, 1996, 1995 and 1994, 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.
Industrial Life Corporate and Total
(Millions) and Consumer Sciences Unallocated Company
Net sales 1996 $8,891 $5,242 $ 103 $14,236
1995 8,364 5,019 77 13,460
1994 7,574 4,505 69 12,148
Operating 1996 $1,543 $1,091 $ (143)* $ 2,491
income 1995 1,336 1,065 (180)* 2,221
1994 1,219 955 (79)* 2,095
Identifiable 1996 $5,681 $3,669 $4,014 $13,364
assets ** 1995 5,476 3,278 5,429 14,183
1994 5,240 3,032 4,796 13,068
Depreciation 1996 $ 480 $ 262 $ 83 $ 825
1995 471 253 71 795
1994 475 261 57 793
Capital 1996 $ 643 $ 445 $ 21 $ 1,109
expenditures 1995 623 443 22 1,088
1994 605 357 10 972
* Operating income includes unallocated corporate overhead
expenses, some of which historically were allocated to
discontinued operations. Operating income for 1995 includes a
$79 million restructuring charge.
** Identifiable assets for business sectors primarily include
accounts receivable; inventory; net property, plant and
equipment; and other miscellaneous assets. Assets included in
the Corporate and Unallocated column principally are cash and
cash equivalents; other securities; insurance receivables;
deferred income taxes; certain investments and other assets; net
assets of discontinued operations; and certain unallocated
property, plant and equipment.
Certain prior period amounts have been reclassified to conform to
the current presentation.
Revenue by Classes of Similar Products or Services (Unaudited)
(Millions) 1996 1995 1994
Tape products $ 2,096 $ 2,042 $ 1,801
Abrasive products 1,270 1,220 1,117
Automotive and chemical products 1,460 1,328 1,195
Connecting and insulating products 1,564 1,470 1,362
Consumer and office products 2,460 2,272 2,069
Health care products 2,356 2,221 2,002
Safety and personal care products 1,301 1,220 1,067
All other products 1,729 1,687 1,535
Total $14,236 $13,460 $12,148
Geographic Areas
Information in the table below is presented on the basis the
company uses 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.
Latin
Europe America, Elimina-
and Africa tions
United Middle Asia and and Total
(Millions) States East Pacific Canada Other Company
Net sales to 1996 $6,655 $3,620 $2,577 $1,359 $ 25 $14,236
customers 1995 6,207 3,489 2,533 1,201 30 13,460
1994 5,944 2,937 2,174 1,059 34 12,148
Transfers 1996 $1,531 $ 173 $ 34 $ 206 $(1,944) $ --
between 1995 1,382 153 43 188 (1,766) --
geographic 1994 1,227 149 31 152 (1,559) --
areas
Operating 1996 $1,125 $ 463 $ 617 $ 304 $ (18) $ 2,491
income 1995 925 456 617 247 (24) 2,221
1994 1,035 346 525 222 (33) 2,095
Identifiable 1996 $7,825 $ 2,917 $ 1,761 $ 861 $ -- $13,364
assets* 1995 7,337 2,782 1,802 854 1,408 14,183
1994 6,462 2,420 1,734 783 1,669 13,068
*Net assets of discontinued operations are reported in the
Eliminations and Other column.
Certain prior period amounts have been reclassified to conform to
the current presentation.
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.
Retirement Plans (continued)
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 $173 million in
1996, $152 million in 1995 and $153 million in 1994.
Under its U.S. pension plan, 3M has elected to retain the benefit
obligations (and related plan assets) applicable to service
provided to 3M by U.S. Imation employees prior to the date of
distribution of Imation common stock to 3M stockholders. As a
result of the distribution, 3M's U.S. pension plan was revalued
as of July 1, 1996, to reflect certain plan changes, the effects
of the restructuring and discontinued operations, and a change in
the discount rate to 7.75 percent. The effects of these changes
were not material.
Net Pension Cost U.S. Plan International Plans
(Millions) 1996 1995 1994 1996 1995 1994
Service cost $121 $ 96 $117 $ 77 $ 86 $85
Interest cost 332 304 280 94 92 89
Return on plan
assets - actual (584) (846) 70 (87) (124) (2)
Net amortization
and deferral 230 532 (377) (10) 39 (79)
Discontinued operations -- (14) (16) -- (13) (14)
Net pension cost $ 99 $ 72 $ 74 $ 74 $ 80 $79
Funded Status of Pension Plans
U.S. Plan International Plans
(Millions) 1996 1995 1996 1995
Plan assets at fair value $4,642 $4,134 $1,369 $1,293
Accrued(prepaid) pension cost 77 97 (4) 110
Amount provided for
future benefits $4,719 $4,231 $1,365 $1,403
Actuarial present value
Vested benefit obligation 3,939 3,666 1,007 1,051
Non vested benefit
obligation 436 521 110 108
Accumulated benefit
obligation $4,375 $4,187 $1,117 $1,159
Amount provided for future
benefits less accumulated
benefit obligation 344 44 248 244
Projected benefit obligation 4,800 4,696 1,439 1,482
Plan assets at fair value
less projected benefit
obligation $ (158) $ (562) $ (70) $ (189)
Unrecognized net transition
(asset) obligation (112) (149) 23 22
Other unrecognized items 193 614 51 57
(Accrued)prepaid
pension cost $ (77) $ ( 97) $ 4 $ (110)
U.S. Plan International Plans
Assumptions at Year End 1996 1995 1994 1996 1995 1994
Discount rate 7.50% 7.00% 8.25% 7.10% 7.10% 7.45%
Compensation rate
increase 4.85% 5.00% 5.00% 5.60% 5.38% 5.71%
Long-term rate of
return on assets 9.00% 9.00% 9.00% 7.68% 7.59% 7.65%
Net pension cost is determined using assumptions at the beginning
of the year (adjusted July 1, 1996, for 1996 net pension cost).
Funded status is determined using assumptions at year-end.
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 trustee invests in
common stocks and fixed-income securities. Employees outside the
United States are covered principally by government-sponsored
plans. The cost of company-provided plans for these employees is
not material.
3M has agreed to provide other postretirement benefits to certain
U.S. Imation employees based on defined eligibility criteria. As
a result of the distribution of Imation common stock to 3M
stockholders, 3M's U.S. postretirement plans were revalued as of
July 1, 1996, to reflect certain plan changes, the effects of the
restructuring and discontinued operations, and a change in the
discount rate to 7.75 percent. The effects of these changes were
not material.
The table below shows 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) 1996 1995 1994
Service cost $ 29 $ 26 $ 28
Interest cost 66 63 55
Return on plan assets - actual (50) (76) 16
Net amortization and deferral 16 51 (40)
Discontinued operations -- (11) (10)
Total $ 61 $ 53 $ 49
Funded Status of Postretirement Benefit Plan
(Millions) 1996 1995
Fair value of plan assets $ 449 $ 398
Accumulated postretirement benefit obligation
Retirees $ 305 $ 286
Fully eligible active plan participants 333 201
Other active plan participants 305 468
Benefit obligation $ 943 $ 955
Plan assets less benefit obligation $(494) $(557)
Adjustments and unrecognized items 29 134
Accrued postretirement cost $(465) $(423)
The company determines the accumulated postretirement benefit
obligation and related benefit costs by applying relevant
actuarial assumptions. The company expects its health care cost
trend rate to slow from 6.9 percent in 1997 to 5.0 percent in
2004, after which the 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 $92 million and the current year benefit expense by
$11 million. Other actuarial assumptions at December 31, 1996,
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 7.5 percent.
Employee Savings and Stock Ownership Plans
The company sponsors employee savings plans under Section 401(k)
of the Internal Revenue Code. These plans are offered to
substantially all regular U.S. employees. The company matches
employee contributions of up to 6 percent of compensation with a
basic match at rates ranging from 10 to 35 percent, with
additional contributions depending upon company performance.
The company maintains an Employee Stock Ownership Plan (ESOP) for
substantially all regular U.S. employees not covered by
collective bargaining agreements. 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 401(k) employee savings plans. The ESOP
borrowed $548 million to purchase 15.4 million shares of the
company's common stock, previously held in treasury. Because the
company has guaranteed repayment of the ESOP debt, the debt and
related unearned compensation are recorded in the Consolidated
Balance Sheet.
Dividends on shares held by the ESOP are paid to the ESOP trust
and, together with company contributions, are used by the ESOP to
repay principal and interest on the outstanding notes. Shares
are released for allocation to participants based upon the ratio
of the current year's debt service to the sum of total principal
and interest payments over the life of the notes.
Annual expenses related to the ESOP generally represent total
debt service on the notes, less dividends, and totaled $36
million in 1996, $30 million in 1995 and $32 million in 1994.
These amounts are reported as an employee benefit expense.
Unearned compensation, shown as a reduction of stockholders'
equity, is reduced by the higher of principal payments or the
cost of shares allocated.
Interest incurred on the ESOP's notes totaled $34 million in
1996, $37 million in 1995 and $39 million in 1994. The company
paid dividends on the stock held by the ESOP of $28 million in
1996, $28 million in 1995 and $26 million in 1994. Company
contributions to the ESOP were $37 million in 1996, $40 million
in 1995 and $35 million in 1994.
In July 1996, the ESOP received Imation shares from the spin-off
distribution. These shares were sold, and the proceeds were used
to purchase additional 3M shares.
ESOP Shares 1996 1995 1994
Allocated 5,202,188 5,116,265 4,236,925
Committed to be released 399,220 -- --
Unreleased 9,103,730 9,892,575 10,941,944
Total 14,705,138 15,008,840 15,178,869
General Employees' Stock Purchase Plan
Substantially all U.S. employees are eligible to participate in
the company's General Employees' Stock Purchase Plan.
Participants are granted options at 85 percent of market value at
the date of grant. Options must be exercised within 27 months
from date of grant.
1996 1995 1994
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Under option-
January 1 350,805 $50.21 369,200 $44.21 472,898 $44.86
Granted 1,498,538 58.78 1,778,647 48.72 1,711,898 44.28
Exercised (1,501,011) 55.67 (1,741,794) 47.56 (1,750,579) 44.52
Canceled (55,837) 52.07 (55,248) 45.75 (65,017) 42.30
December 31 292,495 $62.35 350,805 $50.21 369,200 $44.21
Options exercisable-
December 31 84,893 $63.87 112,495 $51.58 118,050 $46.67
Shares available for grant-
December 31 12,793,449 14,236,150 15,959,549
The exercise prices of options outstanding at December 31, 1996,
ranged from $40.36 to $70.13, with an average remaining life of
23 months.
Management Stock Ownership Program
Management stock options are granted at market value at the date
of grant. These options are exercisable one year after the date
of grant and expire 10 years from the date of grant. During
1996, the plan was extended to about 6,000 additional management
employees, bringing the number of participants at year end to
10,296. To preserve the intrinsic value of the management stock
options after the Imation spin-off, the number of outstanding
options and the related exercise price were adjusted, resulting
in no economic impact to participants or to the company.
1996 1995 1994
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Under option-
January 1 23,974,715 $47.93 22,715,941 $44.82 20,182,694 $42.96
Granted 5,810,480 65.54 4,300,298 59.21 4,228,789 50.52
Imation Corp.
Adjustment 1,097,520 50.07
Exercised (4,225,544) 43.11 (3,001,292) 40.56 (1,656,146) 36.57
Canceled (169,836) 53.17 (40,232) 47.25 (39,396) 43.25
December 31 26,487,335 $52.61 23,974,715 $47.93 22,715,941 $44.82
Options exercisable-
December 31 20,462,410 $49.54 20,219,581 $45.72 18,960,735 $43.77
Shares available for grant-
December 31 6,555,234 13,323,715 17,595,213
Management Stock Ownership Program (continued)
Options Outstanding and Exercisable at December 31, 1996
Options Outstanding Options Exercisable
Weighted
Average Weighted Weighted
Range of Number of Remaining Average Number of Average
Exercise Options Contractual Exercise Options Exercise
Prices Outstanding Life (months) Price Exercisable Price
$30.60-46.00 7,041,348 44 $38.66 7,041,348 $38.66
46.10-66.49 19,445,987 96 57.67 13,421,062 55.26
Stock-Based Compensation
No compensation cost has been recognized for the General
Employees' Stock Purchase Plan (GESPP) or the Management Stock
Ownership Program (MSOP). Pro forma amounts based on the
options' fair value at the grant dates for awards under the GESPP
and MSOP are presented below.
Pro Forma Net Income and Net Income Per Share
(Millions) 1996 1995
Net income
As reported $1,526 $ 976
Pro forma 1,439 911
Net income per share
As reported $ 3.65 $2.32
Pro forma 3.44 2.17
The weighted average fair value per option granted during 1996
and 1995 was $10.37 and $8.60 for the GESPP and $13.43 and $12.48
for the incentive MSOP grants, respectively. The weighted
average fair value was calculated by using the fair value of each
option grant on the date of grant. The fair value of GESPP
options was based on the 15 percent purchase discount, and for
MSOP options was calculated utilizing the Black-Scholes option-
pricing model and the following key assumptions:
MSOP Assumptions 1996 1995
Risk-free interest rate 6.4% 5.9%
Dividend growth 4.3% 5.2%
Volatility 14.2% 14.4%
Expected life (months) 66 66
Legal Proceedings
Discussion of legal matters is incorporated by reference from
Part I, Item 3, of this Form 10-K, and should be considered an
integral part of the Consolidated Financial Statements and Notes.
Quarterly Data (Unaudited)
(Millions, except per-share data)
First Second Third Fourth Year
Net sales
1996 $3,468 $3,522 $3,623 $3,623 $14,236
1995 3,361 3,424 3,370 3,305 13,460
Cost of goods sold
1996 $1,990 $1,986 $2,069 $2,054 $ 8,099
1995 1,886 1,949 1,942 1,943 7,720
Income from continuing operations
1996 $ 362 $ 381 $ 398 $ 375 $ 1,516
1995 355 346 339 266* 1,306*
Discontinued operations
1996 $ -- $ -- $ -- $ 10 $ 10
1995 21 7 5 (363) (330)
Net income (loss)
1996 $ 362 $ 381 $ 398 $ 385 $ 1,526
1995 376 353 344 (97) 976
Per share - continuing operations
1996 $ .87 $ .91 $ .95 $ .90 $ 3.63
1995 .85 .82 .81 .63* 3.11*
Per share - discontinued operations
1996 $ -- $ -- $ -- $ .02 $ .02
1995 .05 .02 .01 (.87) (.79)
Per share - net income (loss)
1996 $ .87 $ .91 $ .95 $ .92 $ 3.65
1995 .90 .84 .82 (.24) 2.32
Stock price comparisons (NYSE composite transactions)**
1996 High $69.88 $70.75 $71.75 $85.88 $ 85.88
1996 Low 62.00 63.50 61.25 68.63 61.25
1995 High 58.88 62.13 60.13 69.88 69.88
1995 Low 50.75 56.50 53.88 55.13 50.75
* Includes a pre-tax restructuring charge of $79 million, or 12
cents a share.
**Not adjusted for the distribution of the commmon stock of
Imation Corp.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Item 13. Certain Relationships and Related Transactions.
The information required by Items 10 through 13 are incorporated
by reference from the registrant's definitive proxy statement
pursuant to general instruction G(3). The registrant will file
with the Commission a definitive proxy statement pursuant to
Regulation 14A before April 30, 1997.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) The financial statements filed as part of this report are
listed in the index to financial statements on page 44.
All financial statement schedules are omitted because of the
absence of the conditions under which they are required or
because the required information is included in the financial
statements or the notes thereto.
(b) Reports on Form 8-K:
The company filed a report on Form 8-K dated November 20, 1996.
Item 7, Financial Statements, Pro Forma Financial Information and
Exhibits. An exhibit was attached to this Form 8-K that contains
the Bylaws of Minnesota Mining and Manufacturing Company, as
amended as of November 11, 1996. A significant amendment to the
Bylaws is the addition of 90 day advance notice procedures for
any shareholder nominations of directors or other matters to be
brought up at the annual meeting.
(c) Exhibits:
Incorporated by Reference:
Incorporated by Reference in the
Report From
(3) Restated certificate of incorporation Exhibit (3) to
and bylaws, amended to and Form 10-Q
including amendments of for period ended
May 12, 1987. June 30, 1987.
Bylaws, as amended as of November 11, 1996. Form 8-K dated
November 20, 1996.
(4) Instruments defining the rights of security
holders, including debentures:
(a) common stock. Exhibit (3) above.
(b) medium-term notes. Registration No. 33-48089
on Form S-3.
(10) Material contracts, management
remuneration:
(a) management stock ownership program. Exhibit 4 of
Registration Nos. 33-49842
and 33-58767 on Form S-8.
(b) profit sharing plan, performance Written description
unit plan and other compensation contained in issuer's
arrangements. proxy statement for the
1997 annual shareholders'
meeting.
Reference (pages)
Form 10-K
Submitted herewith:
(11) Computation of per share earnings. 45
(12) Calculation of ratio of earnings
to fixed charges. 46
(21) Subsidiaries of the registrant. 47
(23) Consent of experts. 48
(24) Power of attorney. 49
(27) Financial data schedule for the year ended
December 31, 1996 (EDGAR filing only).
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
Principal Financial and Accounting Officer
March 10, 1997
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 10, 1997.
Signature Title
LIVIO D. DeSIMONE Chairman of the Board and
Chief Executive Officer, Director
RONALD O. BAUKOL Director
EDWARD A. BRENNAN Director
ALLEN F. JACOBSON Director
W. GEORGE MEREDITH Director
RONALD A. MITSCH Director
ALLEN E. MURRAY Director
AULANA L. PETERS Director
ROZANNE L. RIDGWAY Director
FRANK SHRONTZ Director
F. ALAN SMITH Director
LOUIS W. SULLIVAN Director
Roger P. Smith, 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/ Roger P. Smith
Roger P. Smith, Attorney-in-Fact
EXHIBIT 11
MINNESOTA MINING AND MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF PER-SHARE EARNINGS OF COMMON STOCK
Years ended December 31 1996 1995 1994
(Millions)
Income from
continuing operations $1,516 $1,306 $1,207
Discontinued operations,
net of income taxes 10 (330) 115
Net income $1,526 $ 976 $1,322
Primary earnings per share:
Continuing operations $ 3.63 $ 3.11 $ 2.85
Discontinued operations .02 (.79) .28
Earnings per share $ 3.65 $ 2.32 $ 3.13
Weighted average number of
common shares outstanding 418,212,732 419,823,549 422,955,241
Fully diluted earnings per share: (1)
Continuing operations $ 3.55 $ 3.06 $ 2.83
Discontinued operations .02 (.77) .27
Earnings per share $ 3.57 $ 2.29 $ 3.10
Weighted average number of
common shares outstanding 418,212,732 419,823,549 422,955,241
Common equivalent shares 9,769,962 6,749,060 3,706,298
Average number of common shares
outstanding and equivalents 427,982,694 426,572,609 426,661,539
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 are 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), despite not being required by APB Opinion No.
15 because it results in dilution of less than 3 percent.
EXHIBIT 12
MINNESOTA MINING AND MANUFACTURING COMPANY
AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
1996 1995 1994 1993 1992
EARNINGS
Income from continuing operations
before income taxes and
minority interest $2,479 $2,168 $2,011 $1,851 $1,779
Add:
Interest on debt 79 102 70 39 61
Interest component of the ESOP
benefit expense 34 37 39 41 42
Portion of rent under operating
leases representative of
the interest component 46 51 46 44 44
Less:
Equity in undistributed income
of 20-50 percent owned
companies - 1 2 - (1)
TOTAL EARNINGS AVAILABLE
FOR FIXED CHARGES $2,638 $2,357 $2,164 $1,975 $1,927
FIXED CHARGES
Interest on debt 79 102 70 39 61
Interest component of the ESOP
benefit expense 34 37 39 41 42
Portion of rent under operating
leases representative of
the interest component 46 51 46 44 44
TOTAL FIXED CHARGES $ 159 $ 190 $ 155 $ 124 $ 147
RATIO OF EARNINGS
TO FIXED CHARGES 16.59 12.41 13.96 15.93 13.11
EXHIBIT 21
MINNESOTA MINING AND MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
PARENT AND SUBSIDIARIES
Percentage of
Voting Securities
Organized Under Beneficially Owned
Name of Company Laws of by Registrant
Registrant:
Minnesota Mining and
Manufacturing Company Delaware
Consolidated subsidiaries of the registrant:
Dyneon L.L.C. Delaware 54
Eastern Heights Bank Minnesota 99
Media Networks, Inc. Delaware 100
National Advertising Company Delaware 100
3M Unitek Corporation California 100
3M Argentina S.A.C.I.F.I.A. Argentina 100
3M Australia Pty. Limited Australia 100
3M Oesterreich GmbH Austria 100
3M Belgium S.A./N.V. Belgium 100
Seaside Insurance Limited Bermuda 100
3M do Brasil Limitada Brazil 100
3M Canada Inc. Canada 100
3M A/S Denmark 100
Suomen 3M Oy Finland 100
3M France, S.A. France 100
3M Deutschland GmbH Germany 100
3M Hong Kong Limited Hong Kong 100
3M Italia Finanziaria S.p.A. Italy 100
Sumitomo 3M Limited Japan 50
3M Health Care Limited Japan 75
3M Korea Limited Korea 100
3M Mexico, S.A. de C.V. Mexico 100
Distribution Services
International B.V. Netherlands 100
3M Nederland B.V. Netherlands 100
3M (New Zealand) Limited New Zealand 100
3M Norge A/S Norway 100
3M Puerto Rico, Inc. Puerto Rico 100
3M Singapore Private Limited Singapore 100
3M South Africa
(Proprietary) Limited South Africa 100
3M Espana, S.A. Spain 100
3M Svenska AB Sweden 100
3M (East) A.G. Switzerland 100
3M (Schweiz) A.G. Switzerland 100
3M Taiwan Limited Taiwan 100
3M Thailand Limited Thailand 100
3M United Kingdom Holdings P.L.C. United Kingdom 100
3M Venezuela, S.A. Venezuela 100
NOTE: Subsidiary companies excluded from the above listing, if
considered in the aggregate, would not constitute a significant
subsidiary.
EXHIBIT 23
CONSENT TO INCORPORATION BY REFERENCE
We consent to the incorporation by reference in the Registration
Statements of Minnesota Mining and Manufacturing Company on Form
S-8 (Registration Nos. 33-14791, 33-48690, 33-58763, 33-49842, 33-
58767 and 2-78422) and Form S-3 (Registration No. 33-48089), of
our report dated February 10, 1997, on our audits of the
consolidated financial statements of Minnesota Mining and
Manufacturing Company and Subsidiaries as of December 31, 1996
and 1995, and for each of the three years in the period ended
December 31, 1996, which report is included in this Annual Report
on Form 10-K.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
St. Paul, Minnesota
March 10, 1997
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, That the undersigned directors
and the Principal Financial and Accounting Officer of MINNESOTA
MINING AND MANUFACTURING COMPANY, a Delaware corporation, hereby
constitute and appoint Livio D. DeSimone, Giulio Agostini, John
J. Ursu, Roger P. Smith, Janet L. Yeomans and Gregg M. Larson or
any of them, their true and lawful attorneys-in-fact and agents,
and each of them with full power to act without the others, for
them and in their name, place, and stead, in any and all
capacities, to do any and all acts and things and execute any and
all instruments which said attorneys and agents may deem
necessary or desirable to enable MINNESOTA MINING AND
MANUFACTURING COMPANY to comply with the Securities Exchange Act
of 1934, as amended, and any rules, regulations, and requirements
of the Securities and Exchange Commission in respect thereof, in
connection with the filing with said Commission of its annual
report Form 10-K for the fiscal year ended December 31, 1996,
including specifically, but without limiting the generality of
the foregoing, power and authority to sign the name of MINNESOTA
MINING AND MANUFACTURING COMPANY, and the names of the
undersigned directors and Principal Financial and Accounting
Officer to the Form 10-K and to any instruments and documents
filed as part of or in connection with said Form 10-K or
amendments thereto; and the undersigned hereby ratify and confirm
all that said attorneys and agents shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these
presents this 10th day of February, 1997.
/s/ Livio D. DeSimone /s/ Giulio Agostini
Livio D. DeSimone, Chairman Giulio Agostini
of the Board and Chief Executive Senior Vice President
Officer, Director Principal Financial Officer
Principal Accounting Officer
/s/ Ronald O. Baukol /s/ Aulana L. Peters
Ronald O. Baukol, Director Aulana L. Peters, Director
/s/ Edward A. Brennan /s/ Rozanne L. Ridgway
Edward A. Brennan, Director Rozanne L. Ridgway, Director
/s/ Allen F. Jacobson /s/ Frank Shrontz
Allen F. Jacobson, Director Frank Shrontz, Director
/s/ W. George Meredith /s/ F. Alan Smith
W. George Meredith, Director F. Alan Smith, Director
/s/ Ronald A. Mitsch /s/ Louis W. Sullivan
Ronald A. Mitsch, Director Louis W. Sullivan, Director
/s/ Allen E. Murray
Allen E. Murray, Director
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS AND
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TO SUCH CONSOLIDATED FINANCIAL STATEMENTS AND NOTES.
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