3M 2011 Annual Report Download - page 121

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115
Business Segment Information
Net Sales Operating Income
(Millions) 2011 2010 2009 2011 2010 2009
Industrial and Transportation $ 10,073 $ 8,429 $ 7,120
$ 2,057 $ 1,754 $ 1,230
Health Care 5,031 4,513 4,282
1,489 1,362 1,347
Consumer and Office 4,153 3,853 3,471
840 840 748
Safety, Security and
Protection Services 3,821 3,316 3,076
814 709 728
Display and Graphics 3,674 3,884 3,132
788 946 590
Electro and Communications 3,306 3,043 2,387
712 670 351
Corporate and Unallocated 11 10 13
(421) (278) (101 )
Elimination of Dual Credit (458) (386 ) (358 ) (101) (85) (79 )
Total Company $ 29,611 $ 26,662 $ 23,123
$ 6,178 $ 5,918 $ 4,814
Assets Depreciation & Amortization Capital Expenditures
(Millions) 2011 2010 2009 2011 2010 2009 2011 2010 2009
Industrial and Transportation $ 7,960 $ 6,703 $ 6,365 $ 362
$ 326 $ 328
$ 471 $ 331 $ 235
Health Care 4,198 4,189 3,216
199
131 143 159 78 125
Consumer and Office 2,400 2,149 1,819
101
100 88 97 69 43
Safety, Security and
Protection Services 3,954 3,996 3,208
187
168 169 118 130 93
Display and Graphics 3,617 3,729 3,564
192
187 174 120 185 160
Electro and Communications 2,308 2,245 2,143
103
101 107 154 110 60
Corporate and Unallocated 7,179 7,145 6,935
92
107 148 260 188 187
Total Company $ 31,616 $ 30,156 $ 27,250 $ 1,236
$ 1,120 $ 1,157
$ 1,379 $ 1,091 $ 903
Corporate and Unallocated operating income includes a variety of miscellaneous items, such as corporate
investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain
litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs
(e.g. pension, stock-based compensation) that the Company may choose not to allocate directly to its business
segments. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly
and annual basis.
3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related
operating income. Management evaluates each of its six operating business segments based on net sales and
operating income performance, including dual credit U.S. reporting to further incentivize U.S. sales growth. As a
result, 3M provides additional (“dual”) credit to those business segments selling products in the U.S. to an external
customer when that segment is not the primary seller of the product. For example, certain respirators are primarily
sold by the Occupational Health and Environmental Safety Division within the Safety, Security and Protection
Services business segment; however, the Industrial and Transportation business segment also sells this product to
certain customers in its U.S. markets. In this example, the non-primary selling segment (Industrial and
Transportation) would also receive credit for the associated net sales it initiated and the related approximate
operating income. The assigned operating income related to dual credit activity may differ from operating income that
would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is
reflected as a reconciling item entitled “Elimination of Dual Credit,” such that sales and operating income for the U.S.
in total are unchanged.
3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory
transfers. Therefore, management does not represent that its business segments, if operated independently, would
report the operating income and other financial information shown. The difference between operating income and
pre-tax income relates to interest income and interest expense, which are not allocated to business segments.
Segment operating income and assets in the preceding table include allocations resulting from the shared utilization
of certain corporate or otherwise unallocated assets. However, the separate amounts stated for segment
depreciation, amortization, and capital expenditures are based on secondary performance measures used by
management that do not include allocations of certain corporate items.
Segment assets for the 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, cash equivalents and