3M 2014 Annual Report Download - page 38

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Pacific, 3.1 percent in the United States, and 2.1 percent in EMEA. For 2013, international operations represented 63.9
percent of 3M’s sales.
Geographic Area Supplemental Information
Employees as of December 31,
Capital Spending
Property, Plant and
Equipment -
net
as of December 31,
(Millions, except Employees)
2014
2013
2012
2014
2013
2012
2014
2013
United States
35,581
34,719
34,851
$
909
$
941
$
816
$
4,619
$
4,478
Asia Pacific
17,854
18,417
18,210
184
284
332
1,798
1,943
Europe, Middle East and Africa
20,506
20,504
20,638
288
290
226
1,502
1,636
Latin America and Canada
15,859
15,027
13,978
112
150
110
570
595
Total Company
89,800
88,667
87,677
$
1,493
$
1,665
$
1,484
$
8,489
$
8,652
Employment:
Employment increased by 1,133 positions in 2014 and 990 positions in 2013. The primary factors that increased
employment in both years was additions in developing economies to support growth, plus additions related to the Treo
Solutions LLC acquisition in 2014.
Capital Spending/Net Property, Plant and Equipment:
Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product
demand and increasing manufacturing efficiency. 3M’s capital spending by geography has been led by the United States
(61% of spending in 2014), followed by Europe, Middle East and Africa, Asia Pacific, and Latin America/Canada. 3M is
continuing to increase its manufacturing and sourcing capability, particularly in developing economies, in order to more
closely align its product capability with its sales in major geographic areas. 3M will continue to make investments in critical
developing markets, such as Brazil, China, Mexico, Panama, Poland, Singapore, Southeast Asia, and Turkey. Capital
spending is discussed in more detail later in MD&A in the section entitled “Cash Flows from Investing Activities.”
CRITICAL ACCOUNTING ESTIMATES
Information regarding significant accounting policies is included in Note 1. As stated in Note 1, the preparation of financial
statements requires management to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its
estimates on historical experience and on various assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.
The Company believes its most critical accounting estimates relate to legal proceedings, the Company’s pension and
postretirement obligations, asset impairments and income taxes. Senior management has discussed the development,
selection and disclosure of its critical accounting estimates with the Audit Committee of 3M’s Board of Directors.
Legal Proceedings:
The categories of claims for which the Company has a probable and estimable liability, the amount of its liability accruals,
and the estimates of its related insurance receivables are critical accounting estimates related to legal proceedings.
Please refer to the section entitled “Process for Disclosure and Recording of Liabilities and Insurance Receivables
Related to Legal Proceedings” (contained in “Legal Proceedings” in Note 13) for additional information about such
estimates.
Pension and Postretirement Obligations:
3M has various company-sponsored retirement plans covering substantially all U.S. employees and many employees
outside the United States. The primary U.S. defined-benefit pension plan was closed to new participants effective January
1, 2009. The Company accounts for its defined benefit pension and postretirement health care and life insurance benefit
plans in accordance with Accounting Standard Codification (ASC) 715, Compensation — Retirement Benefits, in
measuring plan assets and benefit obligations and in determining the amount of net periodic benefit cost. ASC 715