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64
in Europe and 5 percent in the Asia Pacific area. These restructuring actions resulted in a first-quarter 2009
pre-tax charge of $67 million, with $61 million for employee-related items/benefits and $6 million related to
fixed asset impairments. The preceding charges were recorded in cost of sales ($17 million), selling, general
and administrative expenses ($47 million), and research, development and related expenses ($3 million).
x During the second quarter of 2009, 3M announced the permanent reduction of approximately 900 positions,
the majority of which were concentrated in the United States, Western Europe and Japan. In the United
States, another 700 people accepted a voluntary early retirement incentive program offer, which resulted in a
$21 million non-cash charge. Of these aggregate employment reductions, about 66 percent were in the
United States, 17 percent in the Asia Pacific area, 14 percent in Europe and 3 percent in Latin America and
Canada. These restructuring actions in total resulted in a second-quarter 2009 pre-tax charge of $116
million, with $103 million for employee-related items/benefits and $13 million related to fixed asset
impairments. The preceding charges were recorded in cost of sales ($68 million), selling, general and
administrative expenses ($44 million), and research, development and related expenses ($4 million).
x During the third quarter of 2009, 3M announced the elimination of approximately 200 positions, with the
majority of those occurring in Western Europe and, to a lesser extent, the United States. These restructuring
actions, including a non-cash charge related to a pension settlement in Japan, resulted in a third-quarter
2009 net pre-tax charge of $26 million for employee-related items/benefits and other, which is net of $7
million of adjustments to prior 2008 and 2009 restructuring actions. The preceding charges were recorded in
cost of sales ($25 million) and research, development and related expenses ($1 million).
The restructuring expenses related to these actions are summarized by income statement line as follows:
(Millions) 2009
Cost of sales ........................................................................................................ $ 110
Selling, general and administrative expenses ..................................................... 91
Research, development and related expenses ................................................... 8
Total restructuring expense ............................................................................. $ 209
3M began restructuring actions in the fourth quarter of 2008. Cash payments in 2008 related to this restructuring
were not material. The roll-forward below begins with the ending 2008 accrued restructuring liability balances.
Components of the 2009 restructuring actions by business segment and a roll-forward of associated balances follow.
(Millions)
Employee-
Related
Items/
Benefits
and Other
Asset
Impairments Total
Accrued liability balance as of December 31, 2008 related to
2008 restructuring actions ................................ ................ $ 186 $
—
$ 186
Expenses incurred in 2009:
Industrial and Transportation ............................................... $ 84 $ 5 $ 89
Health Care .......................................................................... 20
—
20
Consumer and Office ........................................................... 13
—
13
Safety, Security and Protection Services ............................ 16
—
16
Display and Graphics ........................................................... 9 13 22
Electro and Communications ............................................... 11
—
11
Corporate and Unallocated .................................................. 37 1 38
Total 2009 expenses ........................................................ $ 190 $ 19 $ 209
Non-cash changes in 2009 ................................................... $ (34 ) $ (19) $ (53 )
Cash payments, net of adjustments, in 2009 ..................... $ (266 ) $
—
$ (266 )
Accrued liability balance as of December 31, 2009 ........... $ 76 $
—
$ 76
Cash payments, net of adjustments, in 2010 ..................... $ (54 ) $
—
$ (54 )
Accrued liability balance as of December 31, 2010 ........... $ 22 $
—
$ 22
Cash payments, net of adjustments, in 2011 ..................... $ (16 ) $
—
$ (16 )
Accrued liability balance as of December 31, 2011 ........... $ 6 $
—
$ 6