3M 2005 Annual Report Download - page 78

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52
unfunded ABO. For the year ended December 31, 2004, the change from a minimum pension liability within
accumulated other comprehensive income to a prepaid pension asset increased stockholders’ equity by
$1.193 billion (after-tax). This increase was primarily the result of the assets being in excess of the Accumulated
Benefit Obligation for the U.S. qualified plan, which caused the minimum pension liability recorded for the years
ended December 31, 2003 and 2002 to be reversed. For the year ended December 31, 2005, the Company
remained in a prepaid asset position for its U.S. qualified plan.
Income tax effects for cumulative translation are not significant because no tax provision has been made for the
translation of foreign currency financial statements into U.S. dollars. Reclassification adjustments are made to avoid
double counting in comprehensive income items that are also recorded as part of net income. Reclassification
adjustments (other than for cash flow hedging instruments provided in Note 9 to the Consolidated Financial
Statements) were not material.
NOTE 6. Supplemental Cash Flow Information
(Millions) 2005 2004 2003
Cash income tax payments $1,277 $1,109 $663
Cash interest payments 79 70 85
Capitalized interest 12 8 9
Individual amounts in the Consolidated Statement of Cash Flows exclude the effects of acquisitions, divestitures and
exchange rate impacts, which are presented separately. “Other – net” in the Consolidated Statement of Cash Flows
within operating activities includes the 2005 non-cash impact of adopting FIN 47 ($35 million cumulative effect of
accounting change).
Transactions related to investing and financing activities with significant non-cash components are as follows:
In 2004, 3M purchased 100 percent of the outstanding common shares of HighJump Software, Inc., for approximately
$66 million, which included $23 million of cash paid (net of cash acquired) plus 3M common stock that had a fair
market value of $43 million. Refer to Note 2 to the Consolidated Financial Statements for additional details related to
assets acquired and liabilities assumed from acquisitions. Dividends declared, but not paid at December 31, 2004, of
$34 million were payable to minority interests in consolidated subsidiaries. In 2003, capital lease obligations of
approximately $70 million were incurred, primarily related to a lease for a building in the United Kingdom (refer to Note
11 to the Consolidated Financial Statements for more information on capital leases).
NOTE 7. Income Taxes
Income Before Income Taxes, Minority Interest and
Cumulative Effect of Accounting Change
(Millions) 2005 2004 2003
United States $2,729 $2,192 $1,848
International 2,254 2,363 1,809
Total $4,983 $4,555 $3,657
Provision for Income Taxes
(Millions) 2005 2004 2003
Currently payable
Federal $ 754 $ 559 $ 429
State 89 (61) 81
International 704 692 577
Deferred
Federal 140 82 168
State 13 136 (27)
International (6) 95 (26)
Total $1,694 $1,503 $1,202