3M 2008 Annual Report Download - page 17

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11
Item 6. Selected Financial Data.
(Dollars in millions, except per share amounts) 2008 2007 2006 2005 2004
Years ended December 31:
Net sales............................................ $ 25,269 $ 24,462 $ 22,923 $ 21,167 $ 20,011
Income before cumulative effect of
accounting change......................... 3,460 4,096 3,851 3,146 2,841
Per share of common stock:
Income before cumulative effect of
accounting change — basic ....... 4.95 5.70 5.15 4.11 3.64
Income before cumulative effect of
accounting change — diluted..... 4.89 5.60 5.06 4.03 3.56
Cash dividends declared and paid. 2.00 1.92 1.84 1.68 1.44
At December 31:
Total assets ....................................... $ 25,547 $ 24,694 $ 21,294 $ 20,541 $ 20,723
Long-term debt (excluding portion due
within one year) and long-term capital
lease obligations ............................ 5,224 4,088 1,112 1,368 798
The above income and earnings per share information exclude a cumulative effect of accounting change in 2005
($35 million, or 5 cents per diluted share). Refer to Note 1 (conditional asset retirement obligations accounting policy)
for more detail.
Items included in the preceding table which had a significant impact on results are summarized as follows. 2008
results included net losses that decreased operating income by $269 million and net income by $194 million. 2008
included restructuring actions ($229 million pre-tax, $147 million after-tax and minority interest), exit activities ($58
million pre-tax, $43 million after-tax) and losses related to the sale of businesses ($23 million pre-tax, $32 million
after-tax), which were partially offset by a gain on sale of real estate ($41 million pre-tax, $28 million after-tax). 2007
results included net gains that increased operating income by $681 million and net income by $448 million. 2007
included gains related to the sale of businesses ($849 million pre-tax, $550 million after-tax) and a gain on sale of
real estate ($52 million pre-tax, $37 million after-tax), which were partially offset by increases in environmental
liabilities ($134 million pre-tax, $83 million after-tax), restructuring actions ($41 million pre-tax, $27 million after-tax),
and exit activities ($45 million pre-tax, $29 million after-tax). 2006 results included net gains that increased operating
income by $523 million and net income by $438 million. 2006 included net benefits from gains related to the sale of
certain portions of 3M’s branded pharmaceuticals business ($1.074 billion pre-tax, $674 million after-tax) and
favorable income tax adjustments ($149 million), which were partially offset by restructuring actions ($403 million pre-
tax, $257 million after-tax), acquired in-process research and development expenses ($95 million pre-tax and after-
tax), settlement costs of an antitrust class action ($40 million pre-tax, $25 million after-tax), and environmental
obligations related to the pharmaceuticals business ($13 million pre-tax, $8 million after-tax). 2005 results included
charges that reduced income before cumulative effect of accounting change by $75 million. This related to a tax
liability resulting from 3M’s reinvestment of approximately $1.7 billion of foreign earnings in the United States
pursuant to the repatriation provisions of the American Jobs Creation Act of 2004.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to
provide a reader of 3M’s financial statements with a narrative from the perspective of management. 3M’s MD&A is
presented in nine sections:
Beginning
page
• Overview 12
• Results of Operations 16
• Performance by Business Segment 19
• Performance by Geographic Area 29
• Critical Accounting Estimates 30
• New Accounting Pronouncements 32
• Financial Condition and Liquidity 32
• Financial Instruments 38
• Forward-Looking Statements 38