3M 2013 Annual Report Download - page 121

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115
NOTE 15. Business Segments
3M’s businesses are organized, managed and internally grouped into segments based on differences in markets,
products, technologies and services. Effective in the first quarter of 2013 (as discussed below), 3M manages its
operations in five operating business segments: Industrial; Safety and Graphics; Electronics and Energy; Health Care;
and Consumer. 3M’s five business segments bring together common or related 3M technologies, enhancing the
development of innovative products and services and providing for efficient sharing of business resources. These
segments have worldwide responsibility for virtually all 3M product lines. 3M is not dependent on any single
product/service or market. Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise
characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management
does not represent that these segments, if operated independently, would report the operating income information shown.
The difference between operating income and pre-tax income relates to interest income and interest expense, which are
not allocated to business segments.
Effective in the first quarter of 2013, 3M completed a realignment of its business groups (segments) to better serve global
markets and customers. This realignment included:
• The alignment of divisions into five business groups (segments) as further described below.
• The combination of certain existing divisions into new divisions. These included Traffic Safety and Security
Division (reflecting the combination of the former Traffic Safety Systems Division and Security Systems Division)
and the Optical Systems Division (reflecting the combination of the former Optical Systems Division and Mobile
Interactive Solutions Division).
• The movement of certain product lines between various divisions within and across certain business segments.
In addition to the above, there were also changes to dual credit amounts as a result of the realigned structure. The new
structure is comprised of five business segments: Industrial, Safety and Graphics, Electronics and Energy, Health Care,
and Consumer.
Industrial: This business segment, previously referred to as Industrial and Transportation, is largely unchanged,
except for the transfer of the Renewable Energy Division to the Electronics and Energy business segment.
Safety and Graphics: This business segment includes Architectural Markets, Building and Commercial Services,
Commercial Graphics, Industrial Mineral Products, Personal Safety, and Traffic Safety and Security. This new
business segment also reflects movement of certain product lines between various divisions.
Electronics and Energy: This business segment includes Communication Markets, Electrical Markets, Electronics
Markets Materials, Electronic Solutions, Infrastructure Protection, Optical Systems, Renewable Energy, and 3M
Touch Systems. This new business segment also reflects the movement of certain product lines between various
divisions.
Health Care: This business segment is largely unchanged, except for the movement of certain product lines
between various divisions.
Consumer: This business segment, previously referred to as Consumer and Office, is largely unchanged, except
for the movement of certain product lines between various divisions.
The financial information presented herein reflects the impact of all of the preceding segment structure changes for all
periods presented.