3M 2008 Annual Report Download - page 43

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37
Cash dividends paid to stockholders totaled $1.398 billion ($2.00 per share) in 2008, $1.380 billion ($1.92 per share)
in 2007 and $1.376 billion ($1.84 per share) in 2006. 3M has paid dividends since 1916. In February 2009, the Board
of Directors increased the quarterly dividend on 3M common stock by 2.0 percent to 51 cents per share, equivalent
to an annual dividend of $2.04 per share. This marked the 51st consecutive year of dividend increases. Other cash
flows from financing activities primarily include distributions to minority interests, excess tax benefits from stock-
based compensation, changes in cash overdraft balances, and principal payments for capital leases.
Off-Balance Sheet Arrangements and Contractual Obligations:
As of December 31, 2008, the Company has not utilized special purpose entities to facilitate off-balance sheet
financing arrangements. Refer to the section entitled “Warranties/Guarantees” in Note 14 for discussion of accrued
product warranty liabilities and guarantees.
In addition to guarantees, 3M, in the normal course of business, periodically enters into agreements that require the
Company to indemnify either major customers or suppliers for specific risks, such as claims for injury or property
damage arising out of the use of 3M products or the negligence of 3M personnel, or claims alleging that 3M products
infringe third-party patents or other intellectual property. While 3M’s maximum exposure under these indemnification
provisions cannot be estimated, these indemnifications are not expected to have a material impact on the Company’s
consolidated results of operations or financial condition.
A summary of the Company’s significant contractual obligations as of December 31, 2008, follows:
Contractual Obligations
Payments due by year
After
(Millions) Total 2009 2010 2011 2012 2013 2013
Long-term debt, including current
portion (Note 10)..................... $ 6,058 $ 892 $ 109 $ 899 $ 723 $ 849 $ 2,586
Interest on long-term debt .......... 2,944 282 239 238 202 179 1,804
Operating leases (Note 14) ........ 395 111 73 57 32 22 100
Capital leases (Note 14)............. 69 8 7 7 6 5 36
Unconditional purchase obligations
and other................................. 935 622 168 105 21 11 8
Total contractual cash obligations $ 10,401 $ 1,915 $ 596 $ 1,306 $ 984 $ 1,066 $ 4,534
Long-term debt payments due in 2009 include $350 million of dealer remarketable securities (final maturity 2010) and
$62 million of floating rate notes (final maturity 2044). These securities are classified as the current portion of long-
term debt as the result of put provisions associated with these debt instruments. Long-term debt payments due in
2010 and 2011 include floating rate notes totaling $85 million and $100 million, respectively, as a result of put
provisions. Additionally, payments due in 2012 include the $224 million carrying amount of Convertible Notes, as a
result of the put provision.
Unconditional purchase obligations are defined as an agreement to purchase goods or services that is enforceable
and legally binding on the Company. Included in the unconditional purchase obligations category above are certain
obligations related to take or pay contracts, capital commitments, service agreements and utilities. These estimates
include both unconditional purchase obligations with terms in excess of one year and normal ongoing purchase
obligations with terms of less than one year. Many of these commitments relate to take or pay contracts, in which 3M
guarantees payment to ensure availability of products or services that are sold to customers. The Company expects
to receive consideration (products or services) for these unconditional purchase obligations. Contractual capital
commitments are included in the preceding table, but these commitments represent a small part of the Company’s
expected capital spending in 2009 and beyond. The purchase obligation amounts do not represent the entire
anticipated purchases in the future, but represent only those items for which the Company is contractually obligated.
The majority of 3M’s products and services are purchased as needed, with no unconditional commitment. For this
reason, these amounts will not provide a reliable indicator of the Company’s expected future cash outflows on a
stand-alone basis.
Other obligations, included in the preceding table within the caption entitled “Unconditional purchase obligations and
other,” include the current portion of the liability for uncertain tax positions under FIN 48. The Company is not able to
reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or
decrease over time; therefore, the long-term portion of the net tax liability of $314 million is excluded from the
preceding table. Refer to Note 8 for further details.