3M 2006 Annual Report Download - page 43

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This transaction will be reflected in 3M¶VILQDQFLDOVWDWHPHQWVIRUWKHSHULRGHQGLQJ0DUFK)RUPRUHGHWDLO
refer to Note 2.
Operating Income:
0XVHVRSHUDWLQJLQFRPHDVRQHRILWVSULPDU\EXVLQHVVVHJPHQWSHUIRUPDQFHPHDVXUHPHQWWRROV2SHUDWLQJLQFRPHLQ
ZDVRIVDOHVXSIURPRIVDOHVLQDQGRIVDOHVLQ2SHUDWLQJLQFRPHLQLQFOXGHG
the gain on sale, restructuring and other LWHPVWKDWEHQHILWHGRSHUDWLQJLQFRPHE\PLOOLRQRURIQHWVDOHV
Interest Expense and Income:
         
(Millions) 2006  2004
,QWHUHVWH[SHQVH $122 $ 82 
,QWHUHVWLQFRPH (51) 
Total $ 71 $ 26 $ 23
Interest Expense,QWHUHVWH[SHQVHLQFUHDVHGLQFRPSDUHGZLWKSULPDULO\UHODWHGWRLQFUHDVHGVKRUWWHUPGHEW
OHYHOVDQGKLJKHULQWHUHVWUDWHV,QWHUHVWH[SHQVHLQFUHDVHGLQFRPSDUHGZLWKSULPDULO\GXHWRKLJKHULQWHUHVW
rates.
Interest Income:,QWHUHVWLQFRPHZDVORZHULQZLWKORZHUDYHUDJHFDVKEDODQFHVSDUWLDOO\RIIVHWE\KLJKHULQWHUHVW
UDWHV,QWHUHVWLQFRPHZDVKLJKHULQEHQHILWLQJSULPDULO\IURPKLJKHULQWHUHVWUDWHV
Provision for Income Taxes:
    
3HUFHQWRISUHWD[LQFRPH 2006    
Effective tax rate 30.6%  
7KHWD[UDWHIRUZDVFRPSDUHGZLWKLQ,QWKH&RPSDQ\UHSDWULDWHGDSSUR[LPDWHO\
ELOOLRQRIIRUHLJQHDUQLQJVXQGHUWKH$PHULFDQ-REV&UHDWLRQ$FWRI-REV$FW5HIHUWRWKHIROORZLQJ
SDUDJUDSKIRUDGGLWLRQDOGLVFXVVLRQ1RVLPLODUUHSDWULDWLRQRFFXUUHGLQVLQFHWKLV-REV$FWSURYLVLRQRQO\DSSOLHG
WR$VDUHVXOWWKH&RPSDQ\¶VWD[UDWHGHFUHDVHGE\LQ,QDGGLWLRQWKH&RPSDQ\¶VWD[UDWHZDV
UHGXFHGE\DVDUHVXOWRIDQXPEHURILWHPVERWKSRVLWLYHDQGQHJDWLYHLQFOXGLQJDGMXVWPHQWVWRLWVUHVHUYHV
IRUWD[FRQWLQJHQFLHVWKHVDOHRILWVSKDUPDFHXWLFDOEXVLQHVVDQGERRNWD[GLIIHUHQFHVRQWKHZULWHRIIRILQSURFHVV
UHVHDUFKDQGGHYHORSPHQWUHODWHGWRWKH%URQWHV7HFKQRORJLHV,QF%URQWHVDFTXLVLWLRQ5HIHUWR1RWHDQG1RWH
IRUDGGLWLRQDOLQIRUPDWLRQ
7KHHIIHFWLYHWD[UDWHIRUZDVFRPSDUHGZLWKLQ'XULQJ0FRPSleted its evaluation of the
UHSDWULDWLRQSURYLVLRQRIWKH$PHULFDQ-REV&UHDWLRQ$FWRI-REV$FWDQGUHSDWULDWHGDSSUR[LPDWHO\ELOOLRQRI
IRUHLJQHDUQLQJVLQWKH8QLWHG6WDWHVSXUVXDQWWRLWVSURYLVLRQV7KH-REV$FWSURYLGHG0WKHRSSRUWXQLW\WRWD[HIIHFWLYHO\
UHSDWULDWHIRUHLJQHDUQLQJVIRU86TXDOLI\LQJLQYHVWPHQWVVSHFLILHGE\0¶VGRPHVWLFUHLQYHVWPHQWSODQ$VD
FRQVHTXHQFHLQWKHVHFRQGTXDUWHURI0UHFRUGHGDWD[H[SHQVHRIPLOOLRQQHWRIDYDLODEOHIRUHLJQWD[FUHGLWV
ZKLFKQHJDWLYHO\LPSDFWHGWKHHIIHFWLYHZRUOGZLGHWD[UDWHE\$KDOISRLQWWD[UDWHUHGXFWLRQFRPSDUHGZLWK
ZDVSULPDULO\DWWULEXWDEOHWRDFRPELQDWLRQRIWKHHIIHFWVRIWKH0HGLFDUH0RGHUQL]DWLRQ$FWDQGWKHGRPHVWLF
PDQXIDFWXUHU¶VGHGXFWLRQZKLFKZDVDSDUWRIWKH-REV$FW
Minority Interest:
 
(Millions) 2006  
0LQRULW\LQWHUHVW $51  
0LQRULW\LQWHUHVWH[SHQVHHOLPLQDWHVWKHLQFRPHRUORVVDWWULEXWDEOHWRQRQ0RZQHUVKLSLQWHUHVWVLQ0FRQVROLGDWHG
HQWLWLHV0¶VPRVWVLJQLILFDQWFRQVROLGDWHGHQWLW\ZLWKQRQ0RZQHUVKLSLQWHUHVWVLV6XPLWRPR0/LPLWHGLQ-DSDQ0
RZQVRI6XPLWRPR0/LPLWHG7KHGHFUHDVHLQUHODWHGSULPDULO\WRIRUHLJQFXUUHQF\WUDQVODWLRQHIIHFWVZKLFK
UHGXFHG6XPLWRPR0/LPLWHG¶VRSHUDWLQJLQFRPHDVUHSRUted in U.S. dollars, as the U.S. dollar strengthened
VLJQLILFDQWO\DJDLQVWWKH-DSDQHVH\HQFRPSDUHGZLWK7KHGHFUHDVHLQUHODWHGSULPDULO\WRORZHUQHWLQFRPH
LQ6XPLWRPR0
Cumulative Effect of Accounting Change:
$VRI'HFHPEHUWKH&RPSDQ\DGRSWHG)$6%,QWHUSUHWDWLRQ1R³$FFRXQWLQJIRU&RQGLWLRQDO$VVHW
5HWLUHPHQW2EOLJDWLRQV´),17KLVDFFRXQWLQJVWDQGDUGDSSOLHVWRWKHIDLUYDOXHRIDOLDELOLW\IRUDQDVVHWUHWLUHPHQW
REOLJDWLRQDVVRFLDWHGZLWKWKHUHWLUHPHQWRIWDQJLEOHORQJOLYHGDVVHWVDQGZKHUHWKHOLDELOLW\FDQEHUHDVRQDEO\