3M 2012 Annual Report Download - page 36

30
Geographic Area Supplemental Information
Employees as of December 31,
Capital Spending
Property, Plant and
Equipment -
net
as of December 31,
(Millions, except Employees)
2012
2011
2010
2012
2011
2010
2012
2011
United States
34,746
33,128
32,955
$
815
$
688
$
569
$
4,277
$
3,979
Asia Pacific
18,210
18,015
16,324
332
409
290
2,029
1,887
Europe, Middle East and Africa
20,638
20,113
18,120
226
180
151
1,499
1,271
Latin America and Canada
14,083
12,942
12,658
111
102
81
573
529
Total Company
87,677
84,198
80,057
$
1,484
$
1,379
$
1,091
$
8,378
$
7,666
Employment:
Employment increased by 3,479 positions in 2012 and 4,141 positions in 2011. Acquisitions increased employment by
approximately 2,500 and 2,250 full-time equivalents for 2012 and 2011, respectively. In addition, the other primary factor
that increased employment in both years was additions in developing economies to support growth.
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. Capital spending was $1.484 billion in 2012, compared to $1.379 billion
in 2011 and $1.091 billion in 2010. The Company expects 2013 capital spending to be approximately $1.6 to $1.8 billion,
as 3M continues to invest in its businesses. In 2012, 3M expanded manufacturing capacity in key growth markets,
particularly with respect to international and emerging market countries. This included investments in China, Turkey and
Poland, in addition to investments in Singapore and the U.S. 3M also increased investments in IT systems and
infrastructure and made strategic investments in research/development infrastructure and manufacturing sites to lay the
foundation for future growth. In 2011, a large portion of the capital investment was used to address supply constraints in a
number of businesses with significant growth potential, such as renewable energy, traffic signage in developing
economies, and optically clear adhesives and glass bubbles. In addition, some of the following 2010 capital projects
carried forward into 2011. In 2010, in the U.S., 3M invested in film manufacturing assets for optical systems and other
non-optical businesses which use similar technology. Also, in 2010, 3M increased capacity at its multi-purpose
manufacturing facility in Singapore and invested in optical film capacity in Korea. Lastly, in 2010, investments in the
Industrial and Transportation business included solar energy in the U.S. and industrial adhesives and tapes in China.
3M is striving to increase its manufacturing and sourcing capacity, particularly in developing economies, in order to more
closely align its production capability with its sales in major geographic regions. The initiative is expected to help improve
customer service, lower transportation costs, and reduce working capital requirements. 3M will continue to make
investments in critical emerging markets, such as China and India, including plans to establish and begin production in a
new wholly-owned manufacturing entity in India to serve as a source of supply to 3M's business in India and in other
countries.
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.