3M 2004 Annual Report Download - page 98

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Business Segment Depr. Capital
Information Net Operating and Expendi-
(Millions) Sales Income Assets Amort. tures
Health Care 2004 $ 4,230 $ 1,123 $ 2,636 $ 179 $ 165
2003 3,995 1,027 2,544 169 144
2002 3,560 900 2,409 166 183
Industrial 2004 3,792 661 2,771 214 167
2003 3,354 458 2,655 212 161
2002 3,147 487 2,685 191 158
Display and Graphics 2004 3,406 1,131 2,647 178 261
2003 2,962 885 2,570 159 126
2002 2,228 534 2,476 135 84
Consumer and Office 2004 2,861 542 1,468 104 106
2003 2,607 460 1,378 108 86
2002 2,444 448 1,354 108 90
Safety, Security and 2004 2,125 491 1,317 101 99
Protection Services 2003 1,928 437 1,139 100 46
2002 1,686 338 1,097 97 105
Electro and Communications 2004 1,876 291 1,481 130 82
2003 1,818 255 1,568 138 43
2002 1,831 253 1,633 135 77
Transportation 2004 1,683 428 887 63 56
2003 1,538 389 872 68 64
2002 1,388 333 846 66 58
Corporate and 2004 38 (89) 7,501 30 1
Unallocated 2003 30 (198) 4,874 10 7
2002 48 (247) 2,829 56 8
Total Company 2004 $20,011 $ 4,578 $20,708 $ 999 $ 937
2003 18,232 3,713 17,600 964 677
2002 16,332 3,046 15,329 954 763
Segment assets for the seven operating business segments (excluding Corporate and Unallocated) primarily include
accounts receivable; inventory; property, plant and equipment – net; goodwill and intangible assets; and other
miscellaneous assets. Assets included in Corporate and Unallocated principally are cash and cash equivalents;
insurance receivables; deferred income taxes; certain investments and other assets, including prepaid pension
assets; and certain unallocated property, plant and equipment. Corporate and Unallocated assets increased
approximately $2.6 billion in 2004, primarily due to increases in prepaid pension assets ($2.0 billion) and increases in
cash and cash equivalents ($0.9 billion), with partial offsets in other asset accounts. Corporate and Unallocated
assets increased approximately $2.0 billion in 2003 due to increases in cash and cash equivalents ($1.2 billion),
increases in other current assets and other assets primarily related to higher insurance receivables and prepaid items
($500 million), and goodwill increases related to the 2003 acquisition of an additional 25% of Sumitomo 3M
($300 million). For management reporting purposes, corporate goodwill (which at December 31, 2004, totaled
approximately $360 million), is not allocated to the seven operating business segments. In Note 3 to the Consolidated
Financial Statements, corporate goodwill has been allocated to the respective market segments as required by SFAS
No. 142 for impairment testing.
Corporate and Unallocated operating income principally includes corporate investment gains and losses, certain
derivative gains and losses, insurance-related gains and losses, certain litigation expenses, corporate restructuring
program charges and other miscellaneous items. Because this category includes a variety of miscellaneous items, it
is subject to fluctuation on a quarterly and annual basis. In 2004, Corporate and Unallocated operating income
includes increases of $40 million in the respirator mask/asbestos litigation reserves, partially offset by a $20 million
increase in the associated receivables resulting in a net cost of $20 million, and also includes a $6 million increase
in implant litigation reserves and a $10 million decrease in implant receivables resulting in a net cost of $16 million.
In 2003, this includes a pre-tax charge of $93 million recorded during the first quarter related to an adverse ruling
associated with a lawsuit filed against 3M in 1997 by LePage’s Inc. Corporate and unallocated operating income in
2003 also includes increases of $231 million in the respirator mask/asbestos litigation reserves, partially offset by a
$205 million increase in the associated receivables, resulting in a net cost of $26 million. In 2002, Corporate and
Unallocated operating income includes charges of $202 million related to the 2001/2002 corporate restructuring
program. Depreciation and amortization of $954 million included accelerated depreciation (shortened lives) of
$47 million related to the restructuring plan (recorded in Corporate and Unallocated).