EXHIBIT 99
Investor Contacts: Jon Greer Media Contact: John Cornwell
651-736-1915 651-733-7698
[email protected] [email protected]
Matt Ginter
651-733-8206
[email protected]
FOR IMMEDIATE RELEASE
3M Reports Record Quarterly Sales and Earnings
Q3 EPS up nearly 10% on 11% volume growth*
St. Paul, Minn. - Oct. 23, 2000 -- 3M today reported record third-
quarter earnings of $1.25 per share, an increase of 9.6 percent over
third-quarter 1999. Net income reached $499 million, up from $462 million
in the year-earlier quarter.
The quality of 3M earnings continues to be high, with operating
income 19.2 percent of sales, net income 11.7 percent of sales and return
on invested capital 20.3 percent.
"3M continues to deliver solid, top-line-driven earnings growth,"
said L.D. DeSimone, chairman and chief executive officer. "We're growing
through a strong flow of innovative products, close relationships with
customers and our strong international presence. These platforms provide us
with many avenues for growth, while cushioning us from disruptions in any
single market or region of the world."
Sales totaled $4.252 billion, an increase of 6.4 percent over the
third quarter last year. Unit sales increased 11 percent. Sales growth was
particularly strong in the Asia Pacific area, where 3M has built a strong
presence and continues to expand its product offerings. Currency translation
reduced global sales by 3 percent.
Nine-Month Results/Outlook
For the first nine months of 2000, earnings per share rose 14.1
percent to a record $3.56. Currency effects reduced earnings for the
period by 8 cents a share, or nearly 3 percent. Net income totaled
$1.425 billion, up from $1.267 billion in the same period last year.
Operating income was 18.8 percent of sales, up more than a half a percentage
point from the same period last year. Net income was 11.4 percent of sales
and return on invested capital was 19.7 percent.
Sales totaled $12.528 billion, an increase of nearly 8 percent
from the prior period. Unit sales rose 11 percent. Currency reduced
revenues for the period by 2 percent.
"We have good momentum, and we expect to meet earnings
expectations for the fourth quarter and next year," DeSimone said.
"We have tremendous technology platforms, a great portfolio of businesses,
a strong flow of new products, a global presence, and an effective and
competitive infrastructure. We're confident in our ability to continue
to deliver solid, consistent earnings growth."
3M will webcast its third-quarter conference call beginning at 9
a.m. Eastern time today. This event will be available through 3M's website
located at http://199.230.26.96/mmm/index.html. Listeners should go to the
website at least 15 minutes prior to the call to register and download
and install any necessary audio software. A replay will be available
beginning approximately two hours after the event and continuing
through Oct. 27.
* This news release discussion excludes non-recurring items in all
periods. During the third quarter of 2000, 3M incurred one-time, pre-
tax costs of approximately $118 million, primarily related to the
company's decision to phase out its perfluorooctanyl chemistry. These
costs are recorded in cost of goods sold. Third-quarter 2000 results
also include non-recurring gains of $119 million related to asset
sales, principally the sale of shares held in a company as result of a
prior business relationship. For the first nine months of 2000, net
income of $1.425 billion, or $3.56 per share, also excludes a $50
million benefit ($31 million after tax) related to the termination of
a marketing agreement in the company's health care business. Third-
quarter 1999 net income of $462 million, or $1.14 per share, excludes
non-recurring items totaling $4 million ($3 million after tax). Third-
quarter 1999 non-recurring items consist of a $73 million charge
related to litigation, gains on divestitures of $43 million, and a
gain related to a restructuring change in estimate of $26 million.
Nine-month 1999 net income of $1.267 billion, or $3.12 per share, also
excludes non-recurring, pre-tax second quarter items of $104 million
related to gains on divestitures, net of an investment valuation
adjustment.
Forward-Looking Statements
Certain portions of this news release that do not relate to historical
financial information constitute forward-looking statements. These
forward-looking statements are subject to certain risks and
uncertainties. Actual future results and trends may differ materially
from historical results or those expected depending on a variety of
factors, including: (1) worldwide economic conditions; (2) foreign
exchange rates and fluctuations in those rates; (3) the timing and
acceptance of new product offerings; (4) raw materials, including
shortages and increases in the costs of key raw materials; (5) our
ability to successfully manage acquisitions, divestitures and
strategic alliances; and (6) legal proceedings.
# # #
About 3M
3M is a $16 billion technology company with leading positions in
electronics, telecommunications, industrial, consumer and office,
health care, safety and other markets. Headquartered in St. Paul,
Minnesota, the company has operations in more than 60 countries and
serves customers in nearly 200 countries. 3M businesses share
technologies, manufacturing operations, brands, marketing channels and
other important resources. 3M is one of the 30 stocks that make up the
Dow Jones Industrial Average and also is a component of the Standard &
Poor's 500 Index. Additional information about the company is
available on the Internet at www.3M.com.
<TABLE>
Minnesota Mining and Manufacturing Company and Subsidiaries
(Unaudited)
Sales Change Analysis
Third-Quarter 2000
<CAPTION>
U.S. International Worldwide
<S> <C> <C> <C>
Volume 5.5% 16% 11%
Price (1) (2) (1.5)
Translation -- (6) (3)
=== === ===
Total 4.5% 8% 6.5%
</TABLE>
<TABLE>
Sales Change Analysis
Year-to-Date 2000
<CAPTION>
U.S. International Worldwide
<S> <C> <C> <C>
Volume 7% 15% 11%
Price (1) (2) (1.5)
Translation -- (3.5) (2)
=== === ===
Total 6% 9.5% 7.5%
</TABLE>
<TABLE>
Minnesota Mining and Manufacturing Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
<CAPTION>
3 Months Ended 9 Months Ended
September 30 September 30
(Amounts in millions,
except per-share amounts) 2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales $4,252 $3,997 $12,528 $11,636
Operating expenses
Cost of goods sold 2,479 2,253 7,124 6,603
Selling, general and
administrative expenses 1,073 979 3,162 2,919
Restructuring credit -- (26) -- (26)
Other expense (income) -- net (119) 30 (169) (74)
------ ------ ------- -------
Total 3,433 3,236 10,117 9,422
------ ------ ------- -------
Operating income 819 761 2,411 2,214
------ ------ ------- -------
Other income and expense
Interest expense 29 26 81 83
Investment and other
income -- net (4) (7) (16) (22)
------ ------ ------- -------
Total 25 19 65 61
------ ------ ------- -------
Income before income taxes
and minority interest 794 742 2,346 2,153
Provision for income taxes 274 260 821 776
Minority interest 21 23 69 58
------ ------ ------- -------
Net income $ 499 $ 459 $ 1,456 $ 1,319
====== ====== ======= =======
Weighted average common shares
outstanding -- basic 395.1 402.1 396.1 402.5
Earnings per share -- basic $ 1.26 $ 1.14 $ 3.67 $ 3.28
====== ====== ======= =======
Weighted average common shares
outstanding -- diluted 399.0 406.8 400.0 406.5
Earnings per share -- diluted $ 1.25 $ 1.13 $ 3.64 $ 3.25
====== ====== ======= =======
</TABLE>
<TABLE>
Minnesota Mining and Manufacturing Company and Subsidiaries
SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION (Unaudited)
(Amounts in millions, except per-share amounts)
<CAPTION>
3 Months Ended 3 Months Ended
Sept. 30, 2000 Sept. 30, 1999
Excluding Excluding
Non- Non- Non- Non-
recurring recurring Reported recurring recurring Reported
Items Items Total Items Items Total
<S> <C> <C> <C> <C> <C> <C>
Operating income (loss) $ 818 $ 1 $ 819 $ 765 $ (4) $ 761
Other income and expense $ 25 -- $ 25 $ 19 -- $ 19
Income (loss) before
income taxes and
minority interest $ 793 $ 1 $ 794 $ 746 $ (4) $ 742
Provision (benefit) for
income taxes $ 273 $ 1 $ 274 $ 261 $ (1) $ 260
Effective tax rate 34.4% 34.5% 35.0% 27.3% 35.0%
Minority interest $ 21 -- $ 21 $ 23 -- $ 23
Net income (loss) $ 499 -- $ 499 $ 462 $ (3) $ 459
Per share -- diluted $1.25 -- $1.25 $1.14 $(0.01) $1.13
</TABLE>
<TABLE>
<CAPTION>
9 Months Ended 9 Months Ended
Sept. 30, 2000 Sept. 30, 1999
Excluding Excluding
Non- Non- Non- Non-
recurring recurring Reported recurring recurring Reported
Items Items Total Items Items Total
<S> <C> <C> <C> <C> <C> <C>
Operating income $2,360 $ 51 $2,411 $2,114 $ 100 $2,214
Other income and expense$ 65 -- $ 65 $ 61 -- $ 61
Income before
income taxes and
minority interest $2,295 $ 51 $2,346 $2,053 $ 100 $2,153
Provision for
income taxes $ 801 $ 20 $ 821 $ 728 $ 48 $ 776
Effective tax rate 34.9% 39.7% 35.0 35.5% 47.8% 36.0%
Minority interest $ 69 -- $ 69 $ 58 -- $ 58
Net income $1,425 $ 31 $1,456 $1,267 $ 52 $1,319
Per share -- diluted $ 3.56 $0.08 $ 3.64 $ 3.12 $0.13 $ 3.25
</TABLE>
<TABLE>
Minnesota Mining and Manufacturing Company and Subsidiaries
CONSOLIDATED BALANCE SHEET (Unaudited)
<CAPTION>
Sept. 30 Dec. 31
(Dollars in millions) 2000 1999
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 323 $ 387
Other securities -- 54
Accounts receivable -- net 3,057 2,778
Inventories 2,236 2,030
Other current assets 1,035 817
------- -------
Total current assets 6,651 6,066
Property, plant and equipment -- net 5,536 5,656
Investments and other assets 2,495 2,174
------- -------
Total $14,682 $13,896
======= =======
----------------------------------------------------------------------
Liabilities and Stockholders' Equity
Current liabilities
Short-term debt $ 1,633 $ 1,130
Other current liabilities 3,197 2,689
------- -------
Total current liabilities 4,830 3,819
Long-term debt 1,141 1,480
Other liabilities 2,262 2,308
Stockholders' equity -- net 6,449 6,289
Shares outstanding
Sept. 30, 2000: 394,433,465 shares
Dec. 31, 1999: 398,710,817 shares
------- -------
Total $14,682 $13,896
======= =======
</TABLE>
Business Segments:
In the first quarter of 2000, business segment operating income for
1999 was restated for minor amounts, to be consistent with year 2000
management reporting practices. Certain costs previously included in
Corporate and Unallocated were allocated to the individual business
segments. 3M net sales and operating income by segment for 1999 and
2000 follow.
<TABLE>
<CAPTION>
Business
Segment
Information Third Quarter Second Quarter First Quarter
(Millions) 2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
Net sales
Industrial $ 885 $ 851 $ 873 $ 836 $ 911 $ 842
Transportation,
Graphics and Safety 891 826 912 806 872 777
Health Care 773 768 794 793 765 768
Consumer and Office 750 712 692 638 687 638
Electro and
Communications 654 534 642 485 505 442
Specialty Material 292 298 302 292 305 292
Corporate and
Unallocated 7 8 9 13 7 17
Total Company $4,252 $3,997 $4,224 $3,863 $4,052 $3,776
Operating income
Industrial $ 166 $ 154 $ 153 $ 154 $ 185 $ 148
Transportation,
Graphics and Safety 194 184 213 171 209 148
Health Care 165 183 158 194 193 144
Consumer and Office 132 121 102 95 105 88
Electro and
Communications 111 119 105 90 89 82
Specialty Material (43) 50 57 60 51 55
Corporate and
Unallocated 94 (50) (11) 40 (17) (16)
Total Company $ 819 $ 761 $ 777 $ 804 $ 815 $ 649
</TABLE>
Third quarter 2000 operating income includes non-recurring costs of $118
million and non-recurring gains of $119 million. Non-recurring items
by segment in the third quarter of 2000 include $106 million of costs in
the Specialty Material segment related to the company's phase out of
perfluorooctanyl chemistry. Remaining non-recurring items in the third
quarter of 2000 were largely gains related to asset sales and are primarily
recorded in Corporate and Unallocated. First quarter 2000 operating income
includes a $50 million benefit relating to the termination of a product
distribution agreement in the Health Care segment. Third quarter 1999
operating income includes a $43 million gain related to divestitures,
mainly in the Health Care area, and Corporate and Unallocated includes
$73 million in litigation expense partially offset by a $26 million change
in estimate that reduced the restructuring charge. Second quarter 1999
operating income includes gains on divestitures, net of an investment
valuation adjustment, of $30 million in Health Care and $74 million in
Corporate and Unallocated.
