3M 2012 Annual Report Download - page 27

21
Net Income Attributable to Noncontrolling Interest:
(Millions)
2012
2011
2010
Net income attributable to noncontrolling interest
$
67
$
74
$
78
Net income attributable to noncontrolling interest represents the elimination of the income or loss attributable to non-3M
ownership interests in 3M consolidated entities. The changes in noncontrolling interest amounts are primarily related to
Sumitomo 3M Limited (Japan), which is 3M’s most significant consolidated entity with non-3M ownership interests. As of
December 31, 2012, 3M’s effective ownership in Sumitomo 3M Limited is 75 percent.
Currency Effects:
3M estimates that year-on-year currency effects, including hedging impacts, decreased net income attributable to 3M by
approximately $103 million in 2012 and increased net income attributable to 3M by approximately $154 million in 2011.
These estimates include the effect of translating profits from local currencies into U.S. dollars; the impact of currency
fluctuations on the transfer of goods between 3M operations in the United States and abroad; and transaction gains and
losses, including derivative instruments designed to reduce foreign currency exchange rate risks and the negative impact
of swapping Venezuelan bolivars into U.S. dollars. 3M estimates that year-on-year derivative and other transaction gains
and losses increased net income attributable to 3M by approximately $49 million in 2012 and had an immaterial impact on
net income attributable to 3M in 2011.
PERFORMANCE BY BUSINESS SEGMENT
Disclosures relating to 3M’s business segments are provided in Item 1, Business Segments. Financial information and
other disclosures are provided in the Notes to the Consolidated Financial Statements. The reportable segments are
Industrial and Transportation; Health Care; Consumer and Office; Safety, Security and Protection Services; Display and
Graphics; and Electro and Communications. Information related to 3M’s business segments is presented in the tables that
follow. Organic local-currency sales include both organic volume impacts plus selling price impacts. Acquisition impacts
are measured separately for the first twelve months of the acquisition. The acquisition and divestiture impacts, if any,
foreign currency translation impact and total sales change are also provided for each business segment. Any references
to EMEA relate to Europe, Middle East and Africa on a combined basis.
In addition to these six operating business segments, 3M assigns certain costs to “Corporate and Unallocated,” which is
presented separately in the preceding business segments table and in Note 15. Corporate and unallocated 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. The primary items driving higher expenses in Corporate and Unallocated in
2012 when compared to 2011 were pension and postretirement expense, as a portion of the 2012 increase in these
expenses were not allocated directly to the six operating business segments ($63 million), and the impact of an increase
in other environmental insurance receivables, which benefited 2012 by $15 million (as discussed in Note 13). The impacts
of changes in respirator mask/asbestos liabilities and receivables netted to a $32 million charge in 2012, which was
similar to 2011, resulting in a minimal year-on-year effect. The primary item driving higher 2011 expenses when compared
to 2010 relates to pension and postretirement expense, as a portion of the 2011 increase in these expenses was not
allocated directly to the six operating business segments.
The following discusses total year results for 2012 compared to 2011, and also discusses 2011 compared to 2010, for
each business segment.