3M 2015 Annual Report Download - page 24

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TableofContents
InterestIncome:Interestincomein2015waslowerwhencomparedto2014duetoloweraveragecash/marketablesecurities
balances.Interestincomein2014waslowerwhencomparedto2013duetolowercashbalances.
Provision for Income Taxes:
  
   
(Percentofpre-taxincome)  2015  2014  2013 
Effectivetaxrate 29.1 % 28.9 % 28.1 %
Theeffectivetaxratefor2015was29.1percent,comparedto28.9percentin2014,anincreaseof0.2percentagepoints.The
effectivetaxratefor2014was28.9percent,comparedto28.1percentin2013,anincreaseof0.8percentagepoints.Thechangesin
theratesbetweenyearsareimpactedbymanyfactors,asdescribedfurtherinNote8.
TheCompanycurrentlyexpectsthatitseffectivetaxratefor2016willbeapproximately29.5to30.5percent.Theratecanvaryfrom
quartertoquarterduetodiscreteitems,suchasthesettlementofincometaxauditsandchangesintaxlaws,aswellasrecurring
factors,suchasthegeographicmixofincomebeforetaxes.
RefertoNote8forfurtherdiscussionofincometaxes.
Net Income Attributable to Noncontrolling Interest:
(Millions)  2015  2014  2013
Netincomeattributabletononcontrollinginterest $ 8 $ 42  $ 62 
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havelargelyrelatedtoSumitomo3MLimited
(Japan),whichwas3M’smostsignificantconsolidatedentitywithnon-3Mownershipinterests.AsdiscussedinNote6,on
September1,2014,3Mpurchasedtheremaining25percentownershipinSumitomo3MLimited,bringing3M’sownershipto100
percent.Thus,effectiveSeptember1,2014,netincomeattributabletononcontrollinginterestwassignificantlyreduced.The
primaryremainingnoncontrollinginterestrelatesto3MIndiaLimited,ofwhich3M’seffectiveownershipis75percent.
Currency Effects:
3Mestimatesthatyear-on-yearcurrencyeffects,includinghedgingimpacts,decreasedpre-taxincomebyapproximately$390
millionand$100millionin2015and2014,respectively.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pre-taxincomebyapproximately$180millionand$10millionin2015and2014,
respectively.RefertoNote12intheConsolidatedFinancialStatementsforadditionalinformationconcerning3M’shedging
activities.
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.AsdescribedinNote16,effectiveinthethird
quarterof2015,withintheHealthCarebusinesssegment,theCompanyformedtheOralCareSolutionsDivision,whichcombined
theformer3MESPEand3MUnitekdivisions.3Mmanagesitsoperationsinfivebusinesssegments.Thereportablesegmentsare
Industrial;SafetyandGraphics;ElectronicsandEnergy;HealthCare;andConsumer.
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