EX-12 2 a10-17224_1ex12.htm EX-12

 

EXHIBIT 12

 

3M COMPANY AND SUBSIDIARIES

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Millions)

 

 

 

Nine months

 

 

 

 

 

 

 

 

 

 

 

 

 

ended

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

Year

 

Year

 

Year

 

Year

 

Year

 

 

 

2010

 

2009

 

2008

 

2007

 

2006

 

2005

 

EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes*

 

$

4,493

 

$

4,632

 

$

5,108

 

$

6,115

 

$

5,625

 

$

4,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense (including amortization of capitalized interest)

 

165

 

236

 

231

 

229

 

139

 

112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest component of the ESOP benefit expense

 

—

 

1

 

3

 

5

 

8

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rent under operating leases representative of the interest component

 

58

 

76

 

77

 

70

 

70

 

64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in undistributed income of 20-50% owned companies

 

7

 

4

 

6

 

5

 

6

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES

 

$

4,709

 

$

4,941

 

$

5,413

 

$

6,414

 

$

5,836

 

$

4,999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FIXED CHARGES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on debt (including capitalized interest)

 

164

 

246

 

243

 

235

 

138

 

105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest component of the ESOP benefit expense

 

—

 

1

 

3

 

5

 

8

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rent under operating leases representative of the interest component

 

58

 

76

 

77

 

70

 

70

 

64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL FIXED CHARGES

 

$

222

 

$

323

 

$

323

 

$

310

 

$

216

 

$

179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RATIO OF EARNINGS TO FIXED CHARGES

 

21.2

 

15.3

 

16.8

 

20.7

 

27.0

 

27.9

 

*2009 results included net pre-tax charges of $194 million related to restructuring actions partially offset by a gain on sale of real estate. 2008 results included net pre-tax charges of $269 million, with charges related to restructuring actions, exit activities and a loss on sale of businesses partially offset by a gain on sale of real estate. 2007 results included pre-tax gains of $681 million, with net benefits from gains related to the sale of businesses and a gain on sale of real estate, which were partially offset by increases in environmental liabilities, restructuring actions, and exit activities. 2006 results included pre-tax gains of $523 million, with net benefits from gains related to the sale of certain portions of 3M’s branded pharmaceuticals business partially offset by restructuring actions, acquired in-process research and development expenses, settlement costs of a previously disclosed antitrust class action, and environmental obligations related to the pharmaceuticals business.