The interim consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company's consolidated financial position, results of operations and cash flows for the periods presented. These adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of results for the full year. The interim consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's consolidated financial statements and notes included in its 2011 Annual Report on Form 10-K.

The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is a result of the dilution associated with the Company's stock-based compensation plans. Certain options outstanding under these stock-based compensation plans were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would not have had a dilutive effect (21.3 million average options for the three months ended June 30, 2012; 20.3 million average options for the six months ended June 30, 2012; 3.7 million average options for the three months ended June 30, 2011; and 3.6 million average options for the six months ended June 30, 2011). The computations for basic and diluted earnings per share follow:

Earnings Per Share Computations

			Three months ended				Six months ended
			June 30,				June 30,
(Amounts in millions, except per share amounts)			2012		2011		2012		2011
Numerator:
	Net income attributable to 3M		$	1,167	$	1,160	$	2,292	$	2,241

Denominator:
	Denominator for weighted average 3M common shares
		outstanding – basic		694.3		713.4		695.5		712.5

	Dilution associated with the Company’s stock-based
		compensation plans		8.3		13.1		8.9		13.9

	Denominator for weighted average 3M common shares
		outstanding – diluted		702.6		726.5		704.4		726.4

Earnings per share attributable to 3M common
	shareholders – basic		$	1.68	$	1.63	$	3.30	$	3.15
Earnings per share attributable to 3M common
	shareholders – diluted		$	1.66	$	1.60	$	3.25	$	3.09

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updated (ASU) No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This standard clarifies guidance on how to measure fair value and is largely consistent with existing fair value measurement principles. The ASU also expands existing disclosure requirements for fair value measurements and makes other amendments. For 3M, this ASU was effective prospectively beginning January 1, 2012. The adoption of this standard did not have a material impact on 3M's consolidated results of operations or financial condition.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. Under this new standard, entities testing goodwill for impairment now have an option of performing a qualitative assessment before having to calculate the fair value of a reporting unit. If an entity determines, on the basis of qualitative factors, that the fair value of the reporting unit is more-likely-than-not less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment testing is required. For 3M, this ASU was effective beginning January 1, 2012, with early adoption permitted under certain conditions. The adoption of this standard did not have a material impact on 3M's consolidated results of operations or financial condition.

In December 2011, the FASB issued ASU No. 2011-11, Disclosures About Offsetting Assets and Liabilities, which creates new disclosure requirements regarding the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements or similar agreements would be required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. For 3M, the ASU is effective January 1, 2013 with retrospective application required. Since this standard impacts disclosure requirements only, its adoption will not have a material impact on 3M's consolidated results of operations or financial condition.