-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MP3JsbqgHwYkcJ/SmmR8oibqOcbf04g74afyh0uEOA7vgiew6X1rsl1XB8c2kRNz R/+DYCRsOCNnsaAuAIuDtQ== 0000066740-01-000002.txt : 20010125 0000066740-01-000002.hdr.sgml : 20010125 ACCESSION NUMBER: 0000066740-01-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010124 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010124 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MINNESOTA MINING & MANUFACTURING CO CENTRAL INDEX KEY: 0000066740 STANDARD INDUSTRIAL CLASSIFICATION: ABRASIVE ASBESTOS & MISC NONMETALLIC MINERAL PRODUCTS [3290] IRS NUMBER: 410417775 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03285 FILM NUMBER: 1513844 BUSINESS ADDRESS: STREET 1: 3M CENTER CITY: ST PAUL STATE: MN ZIP: 55144-1000 BUSINESS PHONE: 6517331110 8-K 1 0001.txt 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 24, 2001 (Date of earliest event reported) MINNESOTA MINING AND MANUFACTURING COMPANY (Exact name of registrant as specified in its charter) File No. 1-3285 (Commission File Number) Delaware 41-0417775 (State of incorporation) (I.R.S. Employer Identification Number) 3M Center 55144-1000 St. Paul, Minnesota (Zip Code) (Address of principal executive offices) Registrant's telephone, including area code: (651) 733-1110 ITEM 5. OTHER EVENTS Attached and incorporated herein by reference as Exhibit 99 are a consolidated statement of income of Minnesota Mining and Manufacturing Company reporting 3M's financial results for the fourth quarter and year 2000; consolidated statements of income for the quarterly periods ended in 2000 and 1999 that reflect certain reclassifications of net sales and operating expenses; a consolidated balance sheet as of December 31, 2000 and 1999; and certain supplemental financial information. All of this information is unaudited. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits Required by Item 601 of Regulation S-K EXHIBIT NO. DESCRIPTION ---------- ----------- 99 Consolidated Financial Information for Quarters and Years 2000 and 1999 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MINNESOTA MINING AND MANUFACTURING COMPANY By: /s/ Gregg M. Larson -------------------- Gregg M. Larson, Assistant Secretary Dated: January 24, 2001 EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 99 Consolidated Financial Information for Quarters and Years 2000 and 1999 EX-99 2 0002.txt FINANCIAL INFORMATION FOR 2000 AND 1999 EXHIBIT 99 Minnesota Mining and Manufacturing Company and Subsidiaries 3M, as discussed in its January 17, 2001, press release of fourth-quarter 2000 results (excluding non-recurring items), has now issued additional financial information for the quarters and years 2000 and 1999 in this Form 8-K. This filing does not contain certain information that will be included in the company's 2000 Annual Report on Form 10-K, which will be published at a later date. Reclassifications: Certain amounts have been reclassified to conform with the current presentation. Research, development and related expenses have been reclassified from cost of sales and are now separately presented. Pursuant to FASB Emerging Issues Task Force Issue No. 00-10, Accounting for Shipping and Handling Fees and Costs, the company has also reclassified freight billed to customers from selling, general and administrative expenses to net sales, and has reclassified related freight costs from selling, general and administrative expenses to cost of sales. Revenue Recognition: During the fourth quarter of 2000, the company changed its revenue recognition policy. The company's previous policy stated that revenue is recognized upon shipment of goods to customers and upon performance of services. Essentially, the new policies recognize that the risks and rewards of ownership in many transactions do not substantively transfer to customers until the product has been delivered, regardless of whether or not legal title has transferred. In addition to this change in accounting that affects a substantial portion of its product sales, the company has revised aspects of its accounting for services provided in several of its smaller businesses. These new policies are consistent with the guidance contained in SEC Staff Accounting Bulletin No. 101. The effect of these changes in revenue recognition policies, as of January 1, 2000, has been reported as the cumulative effect of an accounting change in the fourth quarter of 2000. This change did not have a significant effect on previously reported 2000 quarters. Non-recurring Items - Fourth Quarter: The company had several significant non-recurring items in the fourth quarter of 2000 which reduced net income by $121 million, or $.30 per share. Cost of sales includes $90 million of expenses related to the company's previously announced intentions to phase-out perfluorooctanyl chemistry, the write down of certain corporate assets and acquisition related expenses. Other expense (income) - net includes a $16 million gain from the sale of securities. These items reduced operating income by $74 million and net income by $46 million. The cumulative effect of an accounting change related to revenue recognition, net of taxes, amounted to $75 million. Without these items, net income would have been $447 million, or $1.12 per share. The schedule that follows reconciles the impact of these non-recurring items on our consolidated statement of income. Supplemental Unaudited Consolidated Statement of Income Information (Millions, except per-share amounts)
Three months ended Three months ended December 31, 2000 December 31, 1999 Excluding Excluding non- Non- non- Non- recurring recurring Reported recurring recurring Reported items items total items items total Operating income (loss) $ 721 $ (74) $ 647 $ 742 $ -- $ 742 Other expense 19 -- 19 15 -- 15 Income (loss) before income taxes, minority interest and cumulative effect of accounting change $ 702 $ (74) $ 628 $ 727 $ -- $ 727 Provision (benefit) for income taxes 232 (28) 204 256 -- 256 Effective tax rate 33.1% 32.5% 35.2% 35.2% Minority interest 23 -- 23 27 -- 27 Income (loss) before cumulative effect of accounting change $ 447 $ (46) $ 401 $ 444 $ -- $ 444 Cumulative effect of accounting change - net of tax -- (75) (75) -- -- -- Net income (loss) $ 447 $(121) $ 326 $ 444 $ -- $ 444 Per share-diluted $1.12 $(.30) $ .82 $1.10 $ -- $1.10
Non-recurring Items - Annual Period: Non-recurring items during 2000 decreased net income by $90 million, or $.23 per share. Non-recurring items during 1999 increased net income by $52 million, or $.13 per share. The schedule that follows reconciles the impact of these non-recurring items on our consolidated statement of income. Supplemental Unaudited Consolidated Statement of Income Information (Millions, except per-share amounts)
Year ended Year ended December 31, 2000 December 31, 1999 Excluding Excluding non- Non- non- Non- recurring recurring Reported recurring recurring Reported items items total items items total Operating income (loss) $3,081 $ (23) $3,058 $2,856 $ 100 $2,956 Other expense 84 -- 84 76 -- 76 Income (loss) before income taxes, minority interest and cumulative effect of accounting change $2,997 $ (23) $2,974 $2,780 $ 100 $2,880 Provision (benefit) for income taxes 1,033 (8) 1,025 984 48 1,032 Effective tax rate 34.5% -- 34.5% 35.4% 47.8% 35.8% Minority interest 92 -- 92 85 -- 85 Income (loss) before cumulative effect of accounting change $1,872 $ (15) $1,857 $1,711 $ 52 $1,763 Cumulative effect of accounting change - net of tax -- (75) (75) -- -- -- Net income (loss) $1,872 $ (90) $1,782 $1,711 $ 52 $1,763 Per share-diluted $ 4.68 $ (.23) $ 4.45 $ 4.21 $ .13 $ 4.34
Minnesota Mining and Manufacturing Company and Subsidiaries Consolidated Statement of Income (Amounts in millions, except per-share amounts) (Unaudited)
Three months Year ended ended December 31 December 31 2000 1999 2000 1999 Net sales $4,136 $4,047 $16,724 $15,748 Operating expenses Cost of sales 2,220 2,053 8,787 8,126 Selling, general and administrative expenses 1,009 970 3,963 3,712 Research, development and related expenses 276 284 1,101 1,056 Restructuring credit -- (2) -- (28) Other expense (income) (16) -- (185) (74) Total 3,489 3,305 13,666 12,792 Operating income 647 742 3,058 2,956 Other income and expense Interest expense 30 26 111 109 Interest income (11) (11) (27) (33) Total 19 15 84 76 Income before income taxes, minority interest and cumulative effect of accounting change 628 727 2,974 2,880 Provision for income taxes 204 256 1,025 1,032 Minority interest 23 27 92 85 Income before cumulative effect of accounting change 401 444 1,857 1,763 Cumulative effect of accounting change (75) -- (75) -- Net income $ 326 $ 444 $ 1,782 $ 1,763 Weighted average common shares outstanding - basic 394.5 400.0 395.7 402.0 Earnings per share - basic Income before cumulative effect $ 1.02 $ 1.11 $ 4.69 $ 4.39 Cumulative effect (.19) -- (.19) -- Net income $ .83 $ 1.11 $ 4.50 $ 4.39 Weighted average common shares outstanding - diluted 399.6 404.8 399.9 406.5 Earnings per share - diluted Income before cumulative effect $ 1.00 $1.10 $ 4.64 $ 4.34 Cumulative effect (.18) -- (.19) -- Net income $ .82 $ 1.10 $ 4.45 $ 4.34
Minnesota Mining and Manufacturing Company and Subsidiaries Consolidated Statement of Income (Amounts in millions, except per-share amounts) (Unaudited)
Three months ended Nine months ended September 30 September 30 2000 1999 2000 1999 Net sales $4,270 $4,021 $12,588 $11,701 Operating expenses Cost of sales 2,295 2,072 6,567 6,073 Selling, general and administrative expenses 1,000 922 2,954 2,742 Research, development and related expenses 275 262 825 772 Restructuring credit -- (26) -- (26) Other expense (income) (119) 30 (169) (74) Total 3,451 3,260 10,177 9,487 Operating income 819 761 2,411 2,214 Other income and expense Interest expense 29 26 81 83 Interest income (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
Minnesota Mining and Manufacturing Company and Subsidiaries Consolidated Statement of Income (Amounts in millions, except per-share amounts) (Unaudited)
Three months ended Six months ended June 30 June 30 2000 1999 2000 1999 Net sales $4,243 $3,885 $8,318 $7,680 Operating expenses Cost of sales 2,181 2,010 4,272 4,001 Selling, general and administrative expenses 998 916 1,954 1,820 Research, development and related expenses 287 259 550 510 Other income - net -- (104) (50) (104) Total 3,466 3,081 6,726 6,227 Operating income 777 804 1,592 1,453 Other income and expense Interest expense 26 26 52 57 Interest income (6) (7) (12) (15) Total 20 19 40 42 Income before income taxes and minority interest 757 785 1,552 1,411 Provision for income taxes 265 291 547 516 Minority interest 22 18 48 35 Net income $ 470 $ 476 $ 957 $ 860 Weighted average common shares outstanding - basic 395.6 403.2 396.6 402.8 Earnings per share - basic $ 1.19 $ 1.18 $ 2.41 $ 2.14 Weighted average common shares outstanding - diluted 399.2 407.4 400.5 406.5 Earnings per share - diluted $ 1.18 $ 1.17 $ 2.39 $ 2.12
Minnesota Mining and Manufacturing Company and Subsidiaries Consolidated Statement of Income (Amounts in millions, except per-share amounts) (Unaudited)
Three months ended March 31 2000 1999 Net sales $4,075 $3,795 Operating expenses Cost of sales 2,091 1,991 Selling, general and administrative expenses 956 904 Research, development and related expenses 263 251 Restructuring credit -- -- Other expense (income) (50) -- Total 3,260 3,146 Operating income 815 649 Other income and expense Interest expense 26 31 Interest income (6) (8) Total 20 23 Income before income taxes and minority interest 795 626 Provision for income taxes 282 225 Minority interest 26 17 Net income $ 487 $ 384 Weighted average common shares outstanding - basic 397.7 402.3 Earnings per share - basic $ 1.22 $ .95 Weighted average common shares outstanding - diluted 401.9 405.9 Earnings per share - diluted $ 1.21 $ .95
Minnesota Mining and Manufacturing Company and Subsidiaries Consolidated Balance Sheet (Dollars in millions) (Unaudited)
December 31, December 31, 2000 1999 Assets Current assets Cash and cash equivalents $ 302 $ 387 Accounts receivable - net 2,709 2,778 Inventories 2,377 2,030 Other current assets 873 871 Total current assets 6,261 6,066 Property, plant and equipment - net 5,620 5,656 Investments and Other assets 2,521 2,174 Total $14,402 $13,896 Liabilities and Stockholders' Equity Current liabilities Short-term debt $ 1,866 $ 1,130 Other current liabilities 2,771 2,689 Total current liabilities 4,637 3,819 Long-term debt 971 1,480 Other liabilities 2,260 2,308 Stockholders' equity - net 6,534 6,289 Shares outstanding Dec. 31, 2000: 396,085,348 shares Dec. 31, 1999: 398,710,817 shares Total $14,402 $13,896
Minnesota Mining and Manufacturing Company and Subsidiaries (Unaudited) Business Segments: Net sales in prior periods have been reclassified to conform with the current presentation. 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.
Business Segment Fourth Fourth Third Third Second Second First First Information Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr (Millions) 2000 1999 2000 1999 2000 1999 2000 1999 Net sales Industrial $ 847 $ 869 $ 887 $ 855 $ 876 $ 840 $ 915 $ 845 Transportation, Graphics and Safety 840 821 892 827 912 807 874 779 Health Care 792 795 776 773 798 798 769 772 Consumer and Office 709 705 753 716 696 642 690 642 Electro and Communications 664 554 654 535 642 485 507 443 Specialty Material 274 291 299 306 310 299 314 298 Corporate and Unallocated 10 12 9 9 9 14 6 16 Total Company $4,136 $4,047 $4,270 $4,021 $4,243 $3,885 $4,075 $3,795 Operating income Industrial $ 137 $ 156 $ 166 $ 154 $ 153 $ 154 $ 185 $ 148 Transportation, Graphics and Safety 167 172 194 184 213 171 209 148 Health Care 159 159 165 183 158 194 193 144 Consumer and Office 95 97 132 121 102 95 105 88 Electro and Communications 99 111 111 119 105 90 89 82 Specialty Material (8) 20 (43) 50 57 60 51 55 Corporate and Unallocated (2) 27 94 (50) (11) 40 (17) (16) Total Company $ 647 $ 742 $ 819 $ 761 $ 777 $ 804 $ 815 $ 649
Business Segment Net sales Operating income Information Year Year Year Year (Millions) 2000 1999 2000 1999 Industrial $ 3,525 $ 3,409 $ 641 $ 612 Transportation, Graphics and Safety 3,518 3,234 783 675 Health Care 3,135 3,138 675 680 Consumer and Office 2,848 2,705 434 401 Electro and Communications 2,467 2,017 404 402 Specialty Material 1,197 1,194 57 185 Corporate and Unallocated 34 51 64 1 Total Company $16,724 $15,748 $3,058 $2,956
Several non-recurring items impacted operating income by business segment. Fourth quarter 2000 operating income includes non-recurring costs of $90 million (included in cost of sales) and non-recurring gains of $16 million from the sale of equity securities (recorded in Corporate and Unallocated). Non-recurring costs in the fourth quarter of 2000 include $62 million of costs in the Speciality Material segment related to the company's phaseout of perflourooctanyl-based chemistry products, $20 million write-down of corporate and unallocated assets, and $8 million of expenses primarily related to acquisitions in the Electro and Communications segment. Third quarter 2000 operating income includes non-recurring costs of $118 million (included in cost of sales) and non-recurring gains of $119 million. Non- recurring items in the third quarter of 2000 include $106 million of costs in the Specialty Material segment relating to the company's phase out of perfluorooctanyl-based chemistry products. Remaining non-recurring items in the third quarter of 2000 were largely gains related to asset dispositions, principally the sale of available-for-sale equity securities, 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 segment, 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 the Health Care segment and $74 million in Corporate and Unallocated. Minnesota Mining and Manufacturing Company and Subsidiaries RESULTS OF OPERATIONS Fourth Quarter The following discussion excludes the impact of non-recurring items in all periods. Components of Sales Change
Fourth Quarter 2000 Year 2000 U.S. Intl. W.W. U.S. Intl. W.W. Volume 0% 16% 8.5% 5% 15% 10% Price (1) (2) (1.5) (1) (2) (1.5) Translation - (9) (5) - (5) (2.5) Total (1)% 5% 2% 4% 8% 6%
Sales volume increased about 8.5 percent from the fourth quarter of 1999. Selling prices were down about 1.5 percent, mainly due to the carryover of reductions in our electronics business. Currency translation reduced worldwide sales by nearly 5 percent due to weakness in both the euro and the yen. Sales in dollars increased a little more than 2 percent from the year- earlier quarter. Internationally, volume increased 16 percent on a nominal basis and 12 percent adjusted for acquisitions. This rate of growth was consistent with the third quarter. In Europe, volume increased 9 percent on an organic basis and 18 percent including acquisitions. In the Asia Pacific area, volume increased 18 percent, with strong growth in both Japan and the Asia region. With respect to performance by business segment internationally, all six business segments posted volume gains, with growth particularly strong in the Electro and Communications markets and the Transportation, Graphics and Safety markets. International volume gains were significantly offset by the stronger dollar. Currency reduced international sales by over 9 percent. Translation was negative by nearly 13 percent in Europe and by 7 percent in the Asia Pacific area. In the United States, volume was basically unchanged from the year-earlier quarter. The company saw U.S. volume increases in the Electro and Communications, Consumer and Office, and Health Care businesses. Unit sales declined in 3M's more economically sensitive businesses, including tapes and abrasives, automotive products, fleet graphics and respiratory protection products. The Specialty Material business also experienced a decline in U.S. volume, impacted by the phase-out of its perfluorooctanyl-based chemistry products. Cost of sales, after adjusting for the reclassifications previously discussed, were 51.5 percent of sales, up from 50.7 percent of sales in the fourth quarter of 1999. Gross margins were negatively affected by flat U.S. volume, negative currency, higher raw material costs and acquisition effects. Selling, general and administrative expenses were 24.4 percent of sales, after adjusting for the reclassifications previously discussed, up from 24.0 percent in the year-earlier quarter. Adjustments in several areas of 3M's discretionary spending were not timely enough to compensate for the dramatic slowing in the U.S. economy. 3M is aggressively addressing this area in 2001. Selling, general and administrative expenses were also impacted by greater advertising and promotional activity in the consumer and office business, and by increased investments to support new 3M pharmaceutical products. Overall, operating income was 17.4 percent of sales, down nearly one point from the year-earlier quarter. Other income and expense was $4 million dollars higher than in the comparable quarter and the tax rate was 33.1 percent, bringing the rate for the full year to 34.5 percent. We expect 3M's tax rate to continue at this level in 2001. The net profit margin for the quarter was 10.8 percent. Earnings for the quarter were $1.12 per share, up about 2 percent from the fourth quarter of 1999. Currency effects reduced earnings for the quarter by 5 cents a share. FUTURE OUTLOOK The following discussion excludes the impact of non-recurring items. While fourth quarter earnings were up only slightly, 2000 was a very good year for 3M. 3M increased earnings per share 11 percent, and volume more than 10 percent. 3M is developing an action plan to achieve at least 10 percent earnings growth in an environment of slower economic growth, and assuming that currency effects continue at the current or slightly more negative levels. 3M is moving forward with a more conservative set of growth assumptions for the year, while maintaining our growth objectives over the longer term. This more conservative plan assumes organic volume growth of about 6 percent with another 2.5 to 3 percentage points of growth provided by acquisitions. 3M expects pricing to be down about 1 percent. Currency, for planning purposes, would reduce our worldwide sales by about 3 percent. 3M's action plan to meet earnings targets under these circumstances is straightforward - to size costs to achieve its earnings target while clearly anticipating significantly lower 2001 sales growth than originally anticipated. 3M has in place strict cost controls to hold selling, general and administrative expenses flat compared with the first quarter of 2000. This represents a running rate improvement of $50 million or 5 percent compared with the fourth quarter of 2000. 3M expects mid-single-digit growth in first-quarter 2001 earnings as these accelerated cost-reduction efforts begin to take effect. 3M will aggressively address selling, general and administrative expenses for the balance of the year with follow through on cost controls and initial traction from several longer-term programs that are in the initial stages of implementation. These include: * An initiative to more effectively prioritize 3M's significant R&D commercialization investments across all businesses to further strengthen returns. * Adoption and concentration of Six Sigma across the company - one way of doing business across all of 3M that will particularly help direct costs and cash. * E-Productivity - taking full advantage of web-based IT systems investments to increase productivity. * Leveraging the critical mass of 3M to achieve significant savings in sourcing and procurement. Aggressive and sustained implementation of these additional initiatives over time will help ensure that 3M consistently meets its financial objectives, while simultaneously funding 3M's existing growth initiatives such as: re- deploying resources into higher growth areas; selective and targeted acquisitions; and driving global market penetration to its full potential. These growth initiatives, already in place, should gain momentum as economic conditions improve. 3M's future prospects are enhanced by the fundamental strengths of the company: A strong portfolio; leading market positions; an efficient and increasingly competitive infrastructure; unequalled international capabilities; and an underlying emphasis on innovation, creation and new product generation. 3M will continue to convert these strengths into market success and accelerated earnings growth. All of these elements - combined with an enhanced level of accountability across the entire organization - provides confidence that 3M will meet its short- and long-term expectations. FORWARD-LOOKING STATEMENTS This Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by their use of words like "plan," "expect," "aim," "believe," "project," "anticipate," "intend," "estimate," "will," "should," "could" and other expressions that indicate future events and trends. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expenditures and financial results are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including but not limited to the following: * The effects of, and changes in, worldwide economic conditions - The company operates in more than 60 countries and derives more than half of its revenues from sales outside the United States. 3M's business may be affected by factors in other countries that are outside its control, such as downturns in economic activity in a specific country or region, the economic difficulties that occurred in Asia in 1998 as an example; social, political or labor conditions in a specific country or region; or potential adverse foreign tax consequences. * Foreign currency exchange rates and fluctuations in those rates - Because 3M derives more than half its revenues from sales outside the United States, its ability to realize projected growth rates in sales and net earnings and results of operations could be adversely affected if the United States dollar strengthens significantly against foreign currencies. * The timing and market acceptance of 3M's new product offerings - 3M's growth objectives are largely dependent on its ability to renew its pipeline of new products and to bring those products to market. This ability may be adversely affected by difficulties or delays in product development, such as the inability to: identify viable new products; successfully complete clinical trials and obtain regulatory approvals; obtain adequate intellectual property protection; or gain market acceptance of new products. * Raw materials, including shortages and increases in the costs of key raw materials. * Acquisitions, divestitures and strategic alliances - As part of 3M's strategy for growth, the company has made and may continue to make acquisitions, divestitures and strategic alliances. However, there can be no assurance that these will be completed or beneficial to the company. * Legal proceedings. -----END PRIVACY-ENHANCED MESSAGE-----