3M 2004 Annual Report Download - page 58

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32
Cash Flows from Investing Activities:
Years ended December 31
(Millions) 2004 2003 2002
Purchases of property, plant and equipment (PP&E) $(937) $(677) $ (763)
Proceeds from sale of PP&E and other assets 69 129 83
Acquisitions, net of cash acquired (73) (439) (1,258)
Purchases and proceeds from sale of investments – net 3 18 11
Net cash used in investing activities $(938) $(969) $(1,927)
Investments in property, plant and equipment are enabling growth in diverse markets, helping to meet product
demand and increasing manufacturing efficiency. In the first three months of 2004, 3M entered into two business
combination agreements. 3M acquired HighJump Software, Inc., a U.S. company that provides supply chain
execution software and solutions, with annual sales of approximately $36 million. 3M initially purchased 91 percent of
the outstanding shares of Hornell Holding AB and subsequently acquired all of the remaining outstanding shares.
Hornell Holding AB is a global supplier of personal protective equipment for welding applications, with annual sales of
approximately $50 million. In August 2004, 3M acquired 100% of the outstanding shares of Info-X Inc., a U.S. company
that provides coding compliance software and data for health care organizations, with annual sales of approximately
$10 million. Refer to Note 2 to the Consolidated Financial Statements for additional information on these 2004
business combinations and for information concerning 2003 and 2002 business combinations. The Company is
actively considering additional acquisitions.
Proceeds from the sale of investments in 2003 include $26 million of cash received related to the sale of 3M’s 50%
ownership in Durel Corporation to Rogers Corporation. Purchases of investments totaled $10 million in 2004,
$16 million in 2003 and $7 million in 2002. These purchases include additional survivor benefit insurance and equity
investments.
Cash Flows from Financing Activities:
Years ended December 31
(Millions) 2004 2003 2002
Change in short-term debt – net $ 399 $ (215) $ (204)
Repayment of debt (maturities greater than 90 days) (868) (719) (497)
Proceeds from debt (maturities greater than 90 days) 358 494 1,146
Total change in debt $ (111) $ (440) $ 445
Purchases of treasury stock (1,791) (685) (942)
Reissuances of treasury stock 508 555 522
Dividends paid to stockholders (1,125) (1,034) (968)
Distributions to minority interests and other – net (15) (23) (78)
Net cash used in financing activities $(2,534) $(1,627) $(1,021)
Total debt at December 31, 2004, was $2.821 billion, down from $2.937 billion at year-end 2003, due to the strong
cash flow generated during 2004. In 2004, the cash flow increase in net short-term debt of $399 million includes
the portion of short-term debt with original maturities of 90 days or less. The repayment of debt of $868 million
primarily related to commercial paper retirements of approximately $475 million and the retirements of $350 million
in medium-term notes. Proceeds from debt of $358 million primarily related to commercial paper issuances. Total
debt was 21% of total capital (total capital is defined as debt plus equity), compared with 27% at year-end 2003.