3M 2015 Annual Report Download - page 11

TableofContents
futureresultswillbeaffectedbytheCompany’sabilitytointegrateacquiredbusinessesquicklyandobtaintheanticipatedsynergies.
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*TheCompany’sfutureresultsmaybeaffectediftheCompanygeneratesfewerproductivityimprovementsthanestimated.The
Companyutilizesvarioustools,suchasLeanSixSigma,andengagesinongoingglobalbusinesstransformation.Business
transformationisdefinedaschangesinprocessesandinternal/externalservicedeliveryacross3Mtomovetomoreefficientbusiness
modelstoimproveoperationalefficiencyandproductivity,whileallowing3Mtoservecustomerswithgreaterspeedandefficiency.
Thisisenabledbytheongoingmulti-yearphasedimplementationofanenterpriseresourceplanning(ERP)systemonaworldwide
basis.Therecanbenoassurancethatalloftheprojectedproductivityimprovementswillberealized.
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*TheCompanyemploysinformationtechnologysystemstosupportitsbusiness,includingongoingphasedimplementationofan
ERPsystemaspartofbusinesstransformationonaworldwidebasisoverthenextseveralyears.Securitybreachesandother
disruptionstotheCompany’sinformationtechnologyinfrastructurecouldinterferewiththeCompany’soperations,compromise
informationbelongingtotheCompanyanditscustomers,suppliers,andemployees,exposingtheCompanytoliabilitywhichcould
adverselyimpacttheCompany’sbusinessandreputation.Intheordinarycourseofbusiness,theCompanyreliesoninformation
technologynetworksandsystems,someofwhicharemanagedbythirdparties,toprocess,transmitandstoreelectronicinformation,
andtomanageorsupportavarietyofbusinessprocessesandactivities.Additionally,theCompanycollectsandstorescertaindata,
includingproprietarybusinessinformation,andmayhaveaccesstoconfidentialorpersonalinformationincertainofourbusinesses
thatissubjecttoprivacyandsecuritylaws,regulationsandcustomer-imposedcontrols.Despiteourcybersecuritymeasures
(includingemployeeandthird-partytraining,monitoringofnetworksandsystems,andmaintenanceofbackupandprotective
systems)whicharecontinuouslyreviewedandupgraded,theCompany’sinformationtechnologynetworksandinfrastructuremay
stillbevulnerabletodamage,disruptionsorshutdownsduetoattackbyhackersorbreaches,employeeerrorormalfeasance,power
outages,computerviruses,telecommunicationorutilityfailures,systemsfailures,serviceprovidersincludingcloudservices,natural
disastersorothercatastrophicevents.Itispossibleforsuchvulnerabilitiestoremainundetectedforanextendedperiod,uptoand
includingseveralyears.Whilewehaveexperienced,andexpecttocontinuetoexperience,thesetypesofthreatstotheCompany’s
informationtechnologynetworksandinfrastructure,noneofthemtodatehashadamaterialimpacttotheCompany.Theremaybe
otherchallengesandrisksastheCompanyupgradesandstandardizesitsERPsystemonaworldwidebasis.Anysucheventscould
resultinlegalclaimsorproceedings,liabilityorpenaltiesunderprivacylaws,disruptioninoperations,anddamagetothe
Company’sreputation,whichcouldadverselyaffecttheCompany’sbusiness.AlthoughtheCompanymaintainsinsurancecoverage
forvariouscybersecurityrisks,therecanbenoguaranteethatallcostsorlossesincurredwillbefullyinsured.
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*TheCompany'sdefinedbenefitpensionandpostretirementplansaresubjecttofinancialmarketrisksthatcouldadverselyimpact
ourresults.TheperformanceoffinancialmarketsanddiscountratesimpacttheCompany'sfundingobligationsunderitsdefined
benefitplans.Significantchangesinmarketinterestrates,decreasesinthefairvalueofplanassetsandinvestmentlossesonplan
assets,andrelevantlegislativeorregulatorychangesrelatingtodefinedbenefitplanfundingmayincreasetheCompany'sfunding
obligationsandadverselyimpactitsresultsofoperationsandcashflows.
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*TheCompany’sfutureresultsmaybeaffectedbyvariouslegalandregulatoryproceedingsandlegalcompliancerisks,including
thoseinvolvingproductliability,antitrust,intellectualproperty,environmental,theU.S.ForeignCorruptPracticesActandother
anti-bribery,anti-corruption,orothermatters.TheoutcomeoftheselegalproceedingsmaydifferfromtheCompany’sexpectations
becausetheoutcomesoflitigation,includingregulatorymatters,areoftendifficulttoreliablypredict.Variousfactorsor
developmentscanleadtheCompanytochangecurrentestimatesofliabilitiesandrelatedinsurancereceivableswhereapplicable,or
makesuchestimatesformatterspreviouslynotsusceptibleofreasonableestimates,suchasasignificantjudicialrulingorjudgment,
asignificantsettlement,significantregulatorydevelopmentsorchangesinapplicablelaw.Afutureadverseruling,settlementor
unfavorabledevelopmentcouldresultinfuturechargesthatcouldhaveamaterialadverseeffectontheCompany’sresultsof
operationsorcashflowsinanyparticularperiod.ForamoredetaileddiscussionofthelegalproceedingsinvolvingtheCompanyand
theassociatedaccountingestimates,seethediscussioninNote14“CommitmentsandContingencies”withintheNotesto
ConsolidatedFinancialStatements.
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