3M 2005 Annual Report Download - page 26

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Financial Summary
(Dollars in millions, except per share amounts)
2005 2004 2003 2002 2001
Operating Results
Net sales $21,167 $20,011 $18,232 $16,332 $16,054
Operating income $ 5,009 $ 4,578 $ 3,713 $ 3,046 $ 2,273
Income before cumulative effect of accounting change $ 3,234 $ 2,990 $ 2,403 $ 1,974 $ 1,430
Per share – basic 4.23 3.83 3.07 2.53 1.81
Per share – diluted 4.16 3.75 3.02 2.50 1.79
Net income $ 3,199 $ 2,990 $ 2,403 $ 1,974 $ 1,430
Per share – basic 4.18 3.83 3.07 2.53 1.81
Per share – diluted 4.12 3.75 3.02 2.50 1.79
Financial Ratios
Percent of sales
Cost of sales 49.0% 49.8% 50.9% 52.0% 54.5%
Selling, general and administrative expenses 21.4 21.4 21.9 22.5 24.9
Research, development and related expenses 5.9 5.9 6.3 6.8 7.0
Other expense (income) – – 0.5 – (0.6)
Operating income 23.7 22.9 20.4 18.7 14.2
Income before cumulative effect of accounting change 15.3 14.9 13.2 12.1 8.9
Total debt to total capital (total capital = debt plus equity) 19% 21% 27% 36% 32%
Additional Information
Cash dividends paid $ 1,286 $ 1,125 $ 1,034 $ 968 $ 948
Per share 1.68 1.44 1.32 1.24 1.20
Stock price at year-end 77.50 82.07 85.03 61.65 59.11
Total assets 20,513 20,708 17,600 15,329 14,606
Long-term debt (excluding current portion) 1,309 727 1,735 2,140 1,520
Capital expenditures 943 937 677 763 980
Depreciation and amortization 986 999 964 954 1,089
Research, development and related expenses 1,242 1,194 1,147 1,110 1,120
Number of employees at year-end 69,315 67,071 67,072 68,774 71,669
Average shares outstanding – basic (in millions) 764.9 780.5 782.8 780.0 788.6
Average shares outstanding – diluted (in millions) 776.9 796.5 795.3 791.0 799.9
2005 includes a cumulative effect of accounting change that reduced net income by $35 million after tax, or 4 cents per diluted share, related to the adoption of Financial Accounting Standards Board
Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations.” Cumulative effect of accounting change impacts net income only, and is not included as part of income before cumulative
effect of accounting change.
2005 results include charges of $75 million after tax related to a tax liability resulting from 3M’s reinvestment of approximately $1.8 billion of foreign earnings into the United States pursuant to the
repatriation provision of the American Jobs Creation Act of 2004.
2003 results include charges of $93 million ($58 million after tax), related to an adverse court ruling associated with a lawsuit filed by LePage’s Inc.
2002 results include net losses of $202 million ($108 million after tax and minority interest), related to charges in connection with 3M’s restructuring plan.
2001 results include net losses of $504 million ($312 million after tax and minority interest), principally related to charges in connection with 3M’s restructuring plan, acquisition-related charges, a reversal
of a 1999 litigation accrual, and a net gain related to the sale of available-for-sale equity securities, partially offset by the write-down of available-for-sale equity securities.
Effective January 1, 2006, 3M adopted Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), “Share-Based Payment”, which requires 3M to expense stock-based compensation
expense. Please see Note 1 to the Consolidated Financial Statements for the pro forma impact of stock-based compensation on net income and further discussion of SFAS No. 123R.