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18
RESULTS OF OPERATIONS
Net Sales:
2011 2010
U.S. Intl. Worldwide U.S. Intl. Worldwide
Net sales (millions) ............ $ 10,028 $ 19,583 $ 29,611 $ 9,210 $ 17,452 $ 26,662
% of worldwide sales ..... 33.9% 66.1 % 34.5 % 65.5%
Components of net sales
change:
Volume — organic ............. 4.0% 3.5 % 3.7 % 7.0 % 17.6% 13.7 %
Volume — acquisitions ...... 3.0 3.5 3.3 1.1 0.8 0.9
Price .................................. 1.9 0.5 1.0 0.1 (0.4) (0.2 )
Local-currency sales
(including acquisitions) .. 8.9 7.5 8.0 8.2 18.0 14.4
Divestitures ........................
—
— — — (0.1) (0.1 )
Translation .........................
—
4.7 3.1 — 1.5 1.0
Total sales change ............ 8.9% 12.2 % 11.1 % 8.2 % 19.4% 15.3 %
In 2011, local-currency sales increased 8.0 percent. All major geographic areas showed local-currency sales
increases, led by Latin America/Canada and the United States. Worldwide local-currency sales growth was led by
Industrial and Transportation at 15.9 percent, Safety, Security and Protection Services at 11.8 percent, and Health
Care at 8.4 percent. Acquisitions added 3.3 percent to worldwide growth and currency impacts benefited 2011
worldwide sales growth by 3.1 percent. Worldwide selling prices rose 1.0 percent in 2011, despite selling price
declines in 3M’s optical systems business, where prices typically decline each year, which is common for the
electronics’ industry. Selling prices in 3M’s non optical systems businesses increased by approximately 1.6 percent.
In 2010, local-currency sales increased 14.4 percent. All major geographic areas showed local-currency sales
increases, led by Asia Pacific. Worldwide local-currency sales growth was led by Electro and Communications at
26.1 percent, Display and Graphics at 23 percent, Industrial and Transportation at 17.2 percent and Consumer and
Office at 10 percent. Refer to the sections entitled “Performance by Business Segment” and “Performance by
Geographic Area” later in MD&A for additional discussion of sales change.
Operating Expenses:
(Percent of net sales) 2011 2010 2009
2011
Versus
2010
2010
Versus
2009
Cost of sales ..................................... 53.0 % 51.9 % 52.4 % 1.1% (0.5 )%
Selling, general and administrative
expenses ...................................... 20.8
20.5 21.2 0.3 (0.7 )
Research, development and related
expenses ...................................... 5.3
5.4 5.6 (0.1) (0.2 )
Operating income ............................. 20.9 % 22.2 % 20.8 % (1.3)% 1.4 %
As discussed in the preceding overview section, 2009 included restructuring charges, partially offset by a gain on
sale of real estate, which combined decreased operating income by $194 million, or 0.9 percent of net sales. There
were no special items that impacted operating income in 2011 or 2010. The following tables summarize the 2009
special items by income statement caption.
2009 Restructuring and Other Summary
(Millions) Restructuring
actions
Gain on sale
of
real estate Total
Cost of sales .......................
$
110 $ (15 )
$
95
Selling, general and administrative
expenses ........................ 91 — 91
Research, development and related
expenses ........................ 8 — 8
Total operating income penalty (benefit)
$
209 $ (15 )
$
194
2011
U.S. Intl. Worldwide
$ 10,028 $ 19,583 $ 29,611
33.9% 66.1 %
4.0% 3.5 % 3.7 %
3.0 3.5 3.3
1.9 0.5 1.0
8.9 7.5 8.0
— — —
—
4.7 3.1
8.9% 12.2 % 11.1 %