3M CO FORM 8-K (Current report filing) Filed 10/18/05 for the Period Ending 10/18/05 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 3M CENTER BLDG. 220-11W-02 ST PAUL, MN 55144-1000 6517332204 0000066740 MMM 3841 - Surgical and Medical Instruments and Apparatus Constr. - Supplies & Fixtures Capital Goods 12/31 http://www.edgar-online.com © Copyright 2015, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. 3M CO FORM 8-K (Unscheduled Material Events) Filed 10/18/2005 For Period Ending 10/18/2005 Address 3M CENTER BLDG. 220-11W-02 ST PAUL, Minnesota 55144-1000 Telephone 651-733-2204 CIK 0000066740 Industry Conglomerates Sector Conglomerates Fiscal Year 12/31 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): October 18, 2005 3M COMPANY (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation) File No. 1-3285 (Commission File Number) 41-0417775 (IRS Employer Identification No.) 3M Center, St. Paul, Minnesota (Address of Principal Executive Offices) 55144-1000 (Zip Code) (651) 733-1110 ( Registrant’s Telephone Number, Including Area Code) (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition On October 18, 2005, 3M Company issued a press release reporting its financial results for the third quarter ended September 30, 2005 (furnished hereunder as Exhibit 99 and incorporated herein by reference). The information contained in this Current Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act. Item 9.01. Financial Statements and Exhibits (c) Exhibits Exhibit Number Description 99 Press Release, dated as of October 18, 2005, of 3M Company (furnished pursuant to Item 2.02 hereof) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 3M COMPANY By: /s/ Gregg M. Larson Gregg M. Larson, Secretary Dated: October 18, 2005 2 EXHIBIT INDEX Exhibit Number Description 99 Press Release, dated as of October 18, 2005, of 3M Company (furnished pursuant to Item 2.02 hereof). 3 Exhibit 99 FOR IMMEDIATE RELEASE 3M Reports Record Third-Quarter Sales and Operating Income; Board Increases Share Repurchase Authorization by $300 Million ST. PAUL, Minn . — Oct. 18, 2005 — 3M (NYSE:MMM) today announced its results for the third quarter 2005. The company reported third-quarter net income of $853 million, or $1.10 per share, versus $775 million, or $0.97 per share, in the third quarter of 2004, a per share increase of 13.4 percent. Acquisition related costs for CUNO Inc., which closed Aug. 2, were $.02 per share. “3M employees around the world delivered an outstanding quarter,” said Robert S. Morrison, 3M interim chairman and CEO. “We demonstrated once again that 3M’s business model, combining innovation with operating discipline, can drive solid sales growth and consistent double-digit earnings per share increases.” Worldwide sales in the third quarter totaled $5.4 billion, 8.3 percent higher than in the year-earlier quarter. Local-currency sales increased 7.0 percent, with selling prices contributing 0.9 percent. Local-currency sales increased 12.0 percent in Industrial (including 8.3 percent due to CUNO), 7.9 percent in Display and Graphics, 7.8 percent in Safety, Security and Protection Services, 6.9 percent in Consumer and Office, 6.0 percent in Electro and Communications, 5.6 percent in Transportation, and 2.8 percent in Health Care. The CUNO acquisition contributed 1.4 percent to total company third-quarter local currency sales growth. “Looking ahead to the fourth quarter, we expect broad-based sales growth throughout our diverse portfolio and another double-digit earnings per share increase,” said Patrick D. Campbell, 3M senior vice president and CFO. “We expect global demand for our products to remain strong, and our productivity and pricing initiatives to help offset raw material and energy cost pressure.” The company also announced that 3M’s Board of Directors authorized the repurchase of an additional $300 million of the company’s stock through the period ending Jan. 31, 2006. This increases the total repurchase authorization to $2.3 billion for the period Jan. 1, 2005 to Jan. 31, 2006. Of that $2.3 billion, more than $500 million remains. “This increase in the stock repurchase authorization demonstrates our strong balance sheet, continued confidence in our ability to generate significant growth in the future, and our commitment to shareholders,” said Morrison. The company also provided guidance for the remainder of 2005. For the year, the company now expects reported earnings to be $4.15 to $4.16 per share. Excluding previously reported non-recurring items(a), 3M expects earnings of $4.24 to $4.25 per share, raising the bottom end of a previous expectation range of $4.20 to $4.25 per share. Fourth-quarter earnings are expected to be $1.02 to $1.03 per share with organic local currency sales growth of 4 to 7 percent. Campbell will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central Time) today. Investors can access a webcast of this conference, along with related charts and materials, at http://investor.3M.com . (a) 3M plans to reinvest approximately $1.7 billion of foreign earnings in the United States pursuant to the provisions of the American Jobs Creation Act of 2004. This act provides the company the opportunity to tax-efficiently repatriate foreign earnings for US qualifying investments specified by its plan. As a consequence, in the second quarter of 2005, 3M recorded a non-recurring charge of $75 million dollars, net of available foreign tax credits. Forward-Looking Statements This news release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) about the company’s financial results and estimates, business prospects, and products under development that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic conditions; (2) competitive conditions and customer preferences; (3) foreign currency exchange rates and fluctuations in those rates; (4) the timing and acceptance of new product offerings; (5) the availability and cost of purchased components, compounds, raw materials and energy (including oil-derived compounds) due to shortages, increased demand or supply interruptions (including those caused by natural and other disasters and other events); (6) 3M’s ability to successfully integrate and obtain the anticipated synergies from acquisitions and strategic alliances; (7) generating less operating income from its corporate initiatives than estimated; and (8) legal proceedings, including the outcome of and information derived from pending Congressional action concerning asbestos-related litigation and other significant developments that could occur in the legal proceedings described in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2004 and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005 (the “Reports”). Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports. The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this release as a result of new information or future events or developments. About 3M − A Global, Diversified Technology Company Every day, 3M people find new ways to make amazing things happen. Wherever they are, whatever they do, the company’s customers know they can rely on 3M to help make their lives better. 3M’s brands include Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti. Serving customers in more than 200 countries around the world, the company’s 69,000 people use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications; safety, security and protection services; health care; industrial and transportation. Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti are trademarks of 3M. 2 3M Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME (Millions, except per-share amounts) (Unaudited) Three-months ended Sept. 30 2005 Net sales Operating expenses Cost of sales Selling, general and administrative expenses Research, development and related expenses Total Operating income Interest expense and income Interest expense Interest income Total Income before income taxes and minority interest Provision for income taxes Minority interest Net income Weighted average common shares outstanding — basic Earnings per share — basic Weighted average common shares outstanding — diluted Earnings per share — diluted Cash dividends paid per common share $ Nine-months ended Sept. 30 2004 5,382 $ 2005 4,969 $ 2004 15,842 $ 14,920 2,632 2,457 7,763 7,345 1,165 1,047 3,400 3,235 295 4,092 1,290 282 3,786 1,183 882 12,045 3,797 854 11,434 3,486 20 (13 ) 7 $ 1,283 417 13 853 $ $ $ 17 (12 ) 5 $ 1,178 389 14 775 762.2 1.12 $ 772.3 1.10 0.42 $ $ 3 59 (45 ) 14 52 (32 ) 20 $ 3,783 1,305 40 2,438 $ 3,466 1,144 52 2,270 780.6 0.99 $ 767.3 3.18 $ 782.0 2.90 796.2 0.97 0.36 $ $ 779.8 3.13 1.26 $ $ 798.5 2.84 1.08 3M Company and Subsidiaries SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION (Millions, except per-share amounts) (Unaudited) Nine-months ended Sept. 30, 2005 Excluding special items (b) Net sales Operating expenses Cost of sales Selling, general and administrative expenses Research, development and related expenses Total Operating income $ Special items (b) 15,842 $ Reported total — $ 15,842 7,763 — 7,763 3,400 — 3,400 882 12,045 3,797 — — — 882 12,045 3,797 Interest expense and (income), net Income before income taxes and minority interest 14 — 14 3,783 — 3,783 Provision for income taxes Effective tax rate Minority interest Net income (loss) Weighted average diluted shares Net income (loss) per diluted share 1,230 32.5 % 40 2,513 $ 779.8 3.22 $ $ $ 75 — — (75 ) 779.8 (0.09 ) $ $ 1,305 34.5 % 40 2,438 779.8 3.13 (b) In addition to disclosing results that are determined in accordance with U.S. generally accepted accounting principles (GAAP), the company also discloses non-GAAP results that exclude special items. Special items represent significant charges or credits that are important to an understanding of the company’s ongoing operations. The company provides reconciliations of its non-GAAP financial reporting to the most comparable GAAP reporting. The company believes that discussion of results excluding special items provides a useful analysis of ongoing operating trends. Earnings per share and other amounts before special items are not measures recognized under GAAP. The determination of special items may not be comparable to similarly titled measures used by other companies. In the second quarter of 2005, 3M recorded a charge of $75 million, net of available foreign tax credits, related to its plans to reinvest approximately $1.7 billion of foreign earnings in the United States pursuant to the provisions of the American Jobs Creation Act of 2004. No special items were recorded in 2004. 4 3M Company and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEET (Dollars in millions) (Unaudited) Sep. 30, 2005 ASSETS Cash and cash equivalents Accounts receivable — net Inventories Other current assets Total current assets Investments Property, plant and equipment — net Prepaid pension and postretirement benefits (c) Goodwill, intangible assets and other assets (d) Total assets LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Short-term borrowings and current portion of long-term debt Accounts payable Accrued payroll Accrued income taxes Other current liabilities Total current liabilities Long-term debt Other liabilities (c) Total liabilities Total stockholders’ equity — net (c) Shares outstanding Sept. 30, 2005: 759,932,466 shares Sept. 30, 2004: 788,533,778 shares Dec. 31, 2004: 773,518,281 shares Total liabilities and stockholders’ equity $ Sep. 30, 2004 1,848 3,061 2,098 1,160 8,167 275 5,604 2,775 4,545 21,366 $ $ 2,582 1,249 520 1,008 1,520 6,879 688 3,552 11,119 10,247 $ 21,366 $ Dec. 31, 2004 2,200 2,853 1,953 1,291 8,297 217 5,468 693 3,389 18,064 $ $ 1,377 1,116 516 877 1,387 5,273 1,284 2,811 9,368 8,696 $ 2,094 1,168 487 867 1,455 6,071 727 3,532 10,330 10,378 $ 18,064 $ 20,708 $ $ 2,757 2,792 1,897 1,274 8,720 227 5,711 2,591 3,459 20,708 (c) Accounting rules require that if the Accumulated Benefit Obligation (ABO) exceeds the fair value of pension plan assets the employer must recognize a liability that is at least equal to the unfunded ABO. Thus, in December 2002, 3M recorded a substantial minimum pension liability adjustment. However, at year-end 2004, 3M’s U.S. qualified pension plan ABO was less than assets, resulting in an adjustment to previously recorded amounts. When comparing Dec. 31, 2004 to Sept. 30, 2004, this adjustment increased “Prepaid pension and postretirement benefits” by approximately $1.9 billion, increased the long-term deferred tax liability (part of “Other liabilities”) by approximately $700 million, and increased other comprehensive income within “Total stockholders’ equity-net” by approximately $1.2 billion. (d) The acquisition of CUNO in the third quarter of 2005 increased the “Goodwill, intangible assets and other assets balance” by approximately $1.25 billion. 5 3M Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions) (Unaudited) Nine-months ended Sept. 30 2005 2004 SUMMARY OF CASH FLOW: NET CASH PROVIDED BY OPERATING ACTIVITIES Cash flows from investing activities: Purchases of property, plant and equipment Acquisitions, net of cash acquired Other investing activities NET CASH USED IN INVESTING ACTIVITIES Cash flows from financing activities: Change in debt Purchases of treasury stock Reissuances of treasury stock Dividends paid to stockholders Other financing activities NET CASH USED IN FINANCING ACTIVITIES Effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ 6 3,087 $ 2,959 (660 ) (1,264 ) (40 ) (1,964 ) (613 ) (73 ) 39 (647 ) 408 (1,809 ) 467 (968 ) (17 ) (1,919 ) (113 ) (909 ) 2,757 1,848 (271 ) (1,235 ) 423 (845 ) (31 ) (1,959 ) 11 364 1,836 2,200 $ 3M Company and Subsidiaries SUPPLEMENTAL CASH FLOW AND OTHER SUPPLEMENTAL FINANCIAL INFORMATION (Dollars in millions) (Unaudited) Nine-months ended Sept. 30 2005 NON-GAAP MEASURES Free Cash Flow: Net cash provided by operating activities Purchases of property, plant and equipment Free Cash Flow (e) Net Working Capital Turns (f) $ $ 2004 3,087 (660 ) 2,427 5.5 $ $ 2,959 (613 ) 2,346 5.4 (e) Free cash flow is not defined under U.S. generally accepted accounting principles (GAAP). Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is a useful measure of performance and uses this measure as an indication of the strength of the company and its ability to generate cash. (f) The company uses various working capital measures that place emphasis and focus on certain working capital assets and liabilities. 3M’s net working capital index is defined as quarterly net sales multiplied by four, divided by ending net accounts receivable plus inventory less accounts payable. This measure is not recognized under U.S. generally accepted accounting principles and may not be comparable to similarly titled measures used by other companies. 7 3M Company and Subsidiaries SALES CHANGE ANALYSIS (Unaudited) Sales Change Analysis By Geographic Area Volume — organic Volume — acquisitions Volume — total Price Total local-currency sales Translation Total sales change United States Three-Months Ended Sept. 30, 2005 International 2.1 % 1.8 3.9 2.9 6.8 — 6.8 % Localcurrency Sales Sales Change Analysis By Business Segment Health Care Industrial (g) Display and Graphics Consumer and Office Safety, Security and Protection Services Electro and Communications Transportation 7.8 6.0 5.6 (g) Industrial includes an 8.3% benefit due to the CUNO acquisition. 8 4.7 % 1.4 6.1 0.9 7.0 1.3 8.3 % Total Sales Change Translation 2.8 % 12.0 7.9 6.9 Worldwide 6.5 % 1.2 7.7 (0.6 ) 7.1 2.3 9.4 % 1.0 % 1.8 1.2 1.4 1.3 1.3 1.4 3.8 % 13.8 9.1 8.3 9.1 7.3 7.0 3M Company and Subsidiaries SALES CHANGE ANALYSIS (Unaudited) Sales Change Analysis By Geographic Area Volume — organic Volume — acquisitions Volume — total Price Total local-currency sales Translation Total sales change United States Nine-Months Ended Sept. 30, 2005 International 1.9 % 0.8 2.7 2.2 4.9 — 4.9 % Localcurrency Sales Sales Change Analysis By Business Segment Health Care Industrial (h) Display and Graphics Consumer and Office Safety, Security and Protection Services Electro and Communications Transportation Total Translation 3.9 % 6.3 1.9 4.4 5.9 2.0 5.6 (h) Industrial includes a 2.8% benefit due to the CUNO acquisition. 9 Worldwide 3.7 % 0.5 4.2 (0.3 ) 3.9 3.1 7.0 % 3.0 % 0.6 3.6 0.7 4.3 1.9 6.2 % Sales Change 2.0 % 2.5 1.0 2.0 2.2 2.0 2.3 5.9 % 8.8 2.9 6.4 8.1 4.0 7.9 3M Company and Subsidiaries BUSINESS SEGMENTS (Dollars in millions) (Unaudited) BUSINESS SEGMENT INFORMATION (Millions) NET SALES Health Care Industrial Display and Graphics Consumer and Office Safety, Security and Protection Services Electro and Communications Transportation Corporate and Unallocated Total Company OPERATING INCOME Health Care Industrial Display and Graphics Consumer and Office Safety, Security and Protection Services Electro and Communications Transportation Corporate and Unallocated Total Company Investor Contacts: Three-months ended Sept. 30 2005 $ $ $ $ Nine-months ended Sept. 30 2004 1,074 971 920 798 573 597 438 11 5,382 $ $ 292 $ 174 315 171 139 127 114 (42 ) 1,290 $ Mark Colin 3M (651) 733-8206 2005 1,035 852 843 737 525 557 409 11 4,969 $ $ 2004 3,299 2,802 2,646 2,232 1,729 1,748 1,352 34 15,842 $ $ 277 $ 157 287 150 123 92 104 (7 ) 1,183 $ 911 $ 547 878 433 423 348 361 (104 ) 3,797 $ Media Contact: Jacqueline Berry 3M (651) 733-3611 Bruce Jermeland 3M (651) 733-1807 From: 3M Public Relations and Corporate Communications 3M Center, Building 225-1S-15 St. Paul, MN 55144-1000 10 End of Filing © 2005 | EDGAR Online, Inc. 3,115 2,575 2,572 2,098 1,599 1,680 1,253 28 14,920 813 469 893 395 384 258 328 (54 ) 3,486