Supplemental Equity and Comprehensive Income Information

9 Months Ended

Sep. 30, 2011

Supplemental Equity and Comprehensive Income Information

Supplemental Equity and Comprehensive Income Information

NOTE 4.  Supplemental Equity and Comprehensive Income Information

Consolidated Statement of Changes in Equity

3M Company and Subsidiaries

Three months ended September 30, 2011

				3M Company Shareholders
(Millions)	Total			Common Stock andAdditionalPaid-in Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interest
Balance at June 30, 2011	$	17,742		$	3,692	$	27,110		$	(10,511	)	$	(2,961	)	$	412
Net income	1,103					1,088									15
Cumulative translation adjustment	(490		)									(507		)	17
Defined benefit pension and post-retirement plans adjustment	77											77			—
Debt and equity securities - unrealized gain (loss)	(2		)									(2		)	—
Cash flow hedging instruments - unrealized gain (loss)	54											54			—
Total comprehensive income	742
Dividends paid	(388		)			(388		)
Stock-based compensation, net of tax impacts	42			42
Reacquired stock	(837		)						(837		)
Issuances pursuant to stock option and benefit plans	111					(26		)	137
Balance at Sept. 30, 2011	$	17,412		$	3,734	$	27,784		$	(11,211	)	$	(3,339	)	$	444

3M Company and Subsidiaries

Nine months ended September 30, 2011

				3M Company Shareholders
(Millions)	Total			Common Stock andAdditionalPaid-in Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interest
Balance at Dec. 31, 2010	$	16,017		$	3,477		$	25,995		$	(10,266	)	$	(3,543	)	$	354
Net income	3,383						3,329									54
Cumulative translation adjustment	(14		)										(34		)	20
Defined benefit pension and post- retirement plans adjustment	207												206			1
Debt and equity securities - unrealized gain (loss)	(5		)										(5		)	—
Cash flow hedging instruments - unrealized gain (loss)	37												37			—
Total comprehensive income	3,608
Dividends paid	(1,171		)				(1,171		)
Business combination allocation to noncontrolling interest	56															56
Purchase and sale of subsidiary shares - net	(42		)	(1		)										(41		)
Stock-based compensation, net of tax impacts	258			258
Reacquired stock	(2,181		)							(2,181		)
Issuances pursuant to stock option and benefit plans	867						(369		)	1,236
Balance at Sept. 30, 2011	$	17,412		$	3,734		$	27,784		$	(11,211	)	$	(3,339	)	$	444

3M Company and Subsidiaries

Three months ended September 30, 2010

				3M Company Shareholders
(Millions)	Total			Common Stock andAdditionalPaid-in Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interest
Balance at June 30, 2010	$	14,263		$	3,345	$	24,788		$	(10,146	)	$	(4,016	)	$	292
Net income	1,125					1,106									19
Cumulative translation adjustment	669											651			18
Defined benefit pension and postretirement plans adjustment	48											48			—
Debt and equity securities - unrealized gain (loss)	3											3			—
Cash flow hedging instruments - unrealized gain (loss)	(52		)									(52		)	—
Total comprehensive income	1,793
Dividends paid	(375		)			(375		)
Stock-based compensation, net of tax impacts	45			45
Reacquired stock	(11		)						(11		)
Issuances pursuant to stock option and benefit plans	118					(26		)	144
Balance at Sept. 30, 2010	$	15,833		$	3,390	$	25,493		$	(10,013	)	$	(3,366	)	$	329

3M Company and Subsidiaries

Nine months ended September 30, 2010

				3M Company Shareholders
(Millions)	Total			Common Stock andAdditionalPaid-in Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interest
Balance at Dec. 31, 2009	$	13,302		$	3,162	$	23,753		$	(10,397	)	$	(3,754	)	$	538
Net income	3,220					3,157									63
Cumulative translation adjustment	216											187			29
Defined benefit pension and postretirement plans adjustment	147											146			1
Debt and equity securities - unrealized gain (loss)	5											5			—
Cash flow hedging instruments - unrealized gain (loss)	11											11			—
Total comprehensive income	3,599
Dividends paid	(1,124		)			(1,124		)
Purchase of subsidiary shares and transfers from noncontrolling interest	(256		)	7								39			(302		)
Stock-based compensation, net of tax impacts	221			221
Reacquired stock	(415		)						(415		)
Issuances pursuant to stock option and benefit plans	506					(293		)	799
Balance at Sept. 30, 2010	$	15,833		$	3,390	$	25,493		$	(10,013	)	$	(3,366	)	$	329

Accumulated Other Comprehensive Income (Loss) Attributable to 3M

	Sept. 30,			Dec. 31,
(Millions)	2011			2010
Cumulative translation adjustment	$	340		$	374
Defined benefit pension and postretirement plans adjustment	(3,673		)	(3,879		)
Debt and equity securities, unrealized gain (loss)	(11		)	(6		)
Cash flow hedging instruments, unrealized gain (loss)	5			(32		)
Total accumulated other comprehensive income (loss)	$	(3,339	)	$	(3,543	)

Consolidated Statement of Comprehensive Income (Loss)

	Three months endedSeptember 30,						Nine months endedSeptember 30,
(Millions)	2011			2010			2011			2010
Net income including noncontrolling interest	$	1,103		$	1,125		$	3,383		$	3,220
Other comprehensive income, net of tax:
Cumulative translation adjustment	(490		)	669			(14		)	216
Defined benefit pension and postretirement plans adjustment	77			48			207			147
Debt and equity securities, unrealized gain (loss)	(2		)	3			(5		)	5
Cash flow hedging instruments, unrealized gain (loss)	54			(52		)	37			11
Total other comprehensive income (loss), net of tax	(361		)	668			225			379
Comprehensive income (loss) including noncontrolling interest	742			1,793			3,608			3,599
Comprehensive (income) loss attributable to noncontrolling interest	(32		)	(37		)	(75		)	(93		)
Comprehensive income (loss) attributable to 3M	$	710		$	1,756		$	3,533		$	3,506

Components of Comprehensive Income (Loss) Attributable to 3M

	Three months endedSeptember 30,						Nine months endedSeptember 30,
(Millions)	2011			2010			2011			2010
Net income attributable to 3M	$	1,088		$	1,106		$	3,329		$	3,157
Cumulative translation	(489		)	586			(63		)	185
Tax effect	(18		)	65			29			2
Cumulative translation - net of tax	(507		)	651			(34		)	187
Defined benefit pension and postretirement plans adjustment	120			75			358			231
Tax effect	(43		)	(27		)	(152		)	(85		)
Defined benefit pension and postretirement plans adjustment - net of tax	77			48			206			146
Debt and equity securities, unrealized gain (loss)	(3		)	3			(8		)	7
Tax effect	1			—			3			(2		)
Debt and equity securities, unrealized gain (loss) - net of tax	(2		)	3			(5		)	5
Cash flow hedging instruments, unrealized gain (loss)	85			(84		)	59			16
Tax effect	(31		)	32			(22		)	(5		)
Cash flow hedging instruments, unrealized gain (loss) - net of tax	54			(52		)	37			11
Total comprehensive income (loss) attributable to 3M	$	710		$	1,756		$	3,533		$	3,506

Reclassification adjustments are made to avoid double counting in comprehensive income items that are also recorded as part of net income. Reclassifications to earnings from accumulated other comprehensive income including noncontrolling interest that related to pension and postretirement expense in the income statement were $117 million pre-tax ($77 million after-tax) for the three months ended September 30, 2011, $355 million pre-tax ($207 million after-tax) for the nine months ended September 30, 2011, $77 million pre-tax ($48 million after-tax) for the three months ended September 30, 2010, and $231 million pre-tax ($147 million after-tax) for the nine months ended September 30, 2010. These pension and postretirement expense pre-tax amounts (including noncontrolling interest) are shown in the tables in Note 8 as amortization of transition (asset) obligation, amortization of prior service cost (benefit) and amortization of net actuarial (gain) loss. Cash flow hedging instruments reclassifications are provided in Note 9. Reclassifications to earnings from accumulated other comprehensive income for debt and equity securities were not material for the three and nine months ended September 30, 2011 and 2010. Other reclassification adjustments were not material. Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within cumulative translation does include impacts from items such as net investment hedge transactions.

Purchase and Sale of Subsidiary Shares and Transfers of Ownership Interests Involving Non-Wholly Owned Subsidiaries

As discussed in Note 2, in early March 2011, 3M acquired a controlling interest in Winterthur Technologie AG (Winterthur), making Winterthur a consolidated subsidiary as of that business acquisition date. Subsequent to this business acquisition date, 3M purchased additional outstanding shares of its Winterthur subsidiary increasing 3M’s ownership interest from approximately 86 percent as of the business acquisition date to approximately 98 percent as of September 30, 2011. The $50 million of cash paid in the first nine months of 2011 as a result of these additional purchases of Winterthur shares was classified as other financing activity in the consolidated statement of cash flows. These additional purchases did not result in a material transfer from noncontrolling interest to 3M Company shareholders’ equity. In addition, during the first nine months of 2011, 3M sold a noncontrolling interest in a newly formed subsidiary for an immaterial amount, which was also classified as other financing activity in the consolidated statement of cash flows.

During the second half of 2009 and the first half of 2010, 3M effected a purchase of subsidiary shares and transfers of ownership interests to align activities in Japan and to simplify the Company’s ownership structure. As a result of these activities, beginning in June 2010 the Company has a wholly owned subsidiary in the region in addition to its majority owned Sumitomo 3M Limited entity (Sumitomo 3M). Because the Company retained its controlling interest in the subsidiaries involved, these activities resulted in changes to 3M Company shareholders’ equity and noncontrolling interest. These activities included the following:

· During the second half of 2009, a wholly owned subsidiary that, in turn, owned a portion of the Company’s majority owned Sumitomo 3M, was transferred to another subsidiary (referred to herein as 3M HC) that was majority, rather than wholly, owned. Sumitomo 3M also owned a portion of 3M HC. As a result of the transaction, 3M’s effective ownership in Sumitomo 3M was reduced from 75 percent to 71.5 percent. The transfer resulted in a decrease in 3M Company shareholders’ equity and an increase in noncontrolling interest of $81 million in the second half of 2009.

· During the first quarter of 2010, majority owned 3M HC which, as a result of the transfer above owned a portion of the Company’s majority owned Sumitomo 3M, transferred this interest to Sumitomo 3M. In addition, Sumitomo 3M purchased a portion of its shares held by its noncontrolling interest, Sumitomo Electric Industries, Ltd. (SEI), by paying cash of 5.8 billion Japanese Yen and entering into a note payable to SEI of 17.4 billion Japanese Yen (approximately $63 million and $188 million, respectively, based on applicable exchange rates at that time). As a result of these transactions, 3M’s effective ownership in Sumitomo 3M was increased from 71.5 percent to 75 percent. The cash paid as a result of the purchase of Sumitomo 3M shares from SEI was classified as other financing activity in the consolidated statement of cash flows. The remainder of the purchase financed by the note payable to SEI was considered non-cash financing activity in the first quarter of 2010. These transactions resulted in an increase in 3M Company shareholders’ equity of $22 million and a decrease in noncontrolling interest of $278 million in the first quarter of 2010.

· During the second quarter of 2010, majority owned Sumitomo 3M transferred its interest in 3M HC to 3M HC. As a result of this transaction, 3M HC became wholly owned by the Company. The transfer resulted in an increase in 3M Company shareholders’ equity and a decrease in noncontrolling interest of $24 million in the second quarter of 2010.

Additionally, 3M acquired the remaining noncontrolling interest of a previously owned majority owned subsidiary for an immaterial amount during the first half of 2010.

The following table summarizes the effects of the 2010 transactions on equity attributable to 3M Company shareholders for the nine months ended September 30, 2010.

(Millions)	Nine months ended Sept. 30, 2010
Net income attributable to 3M	$	3,157
Transfers from noncontrolling interest	46
Change in 3M Company shareholders’ equity from net income attributable to 3M and transfers from noncontrolling interest	$	3,203