3M 2014 Annual Report Download - page 121

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. 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 2014, 3M transferred a product line between divisions within different business segments
and made other changes within business segments in its continuing effort to improve the alignment of its businesses
around markets and customers.
The product move between business segments was as follows:
• The movement of the Fire Protection product line from the Building and Commercial Services Division (Safety and
Graphics business segment) to the Industrial Adhesives and Tapes Division (Industrial business segment). This
product move resulted in an increase in net sales for total year 2013 of $73 million in the Industrial business
segment offset by a corresponding decrease in the Safety and Graphics business segment.
In addition, other changes within business segments were as follows:
• The combination of certain existing divisions/departments into new divisions. Within the Electronics and Energy
business segment, the new divisions include the Electrical Markets Division (which includes the former
Infrastructure Protection Division), and the Electronic Solutions Division (which includes the former 3M Touch
Systems, Inc.). Within the Safety and Graphics business segment, the new Commercial Solutions Division was
created from the combination of the former Architectural Markets Department, the former Building and
Commercial Services Division and the former Commercial Graphics Division. None of these combinations
crossed business segments.
• The renaming of the former Aerospace and Aircraft Maintenance Division within the Industrial business segment
to the Aerospace and Commercial Transportation Division.
• The movement of certain product lines between various divisions within the same business segment.
Effective in the second quarter of 2014, within the Electronics and Energy business segment, 3M combined three existing
divisions into two new divisions. A large portion of both the Electronics Markets Materials Division and the Electronic
Solutions Division were combined to form the Electronics Materials Solutions Division, which focuses on semiconductor
and electronics materials and assembly solutions. The Optical Systems Division, the remaining portion of the Electronic
Solutions Division and a portion of the Electronics Markets Materials Division were combined to form the Display Materials
and Systems Division, which focuses on delivering light, color and user interface solutions.
Effective in the fourth quarter of 2014, within the Industrial business segment, the Personal Care Division, which focuses
on tapes and attachment systems for infant and adult hygiene, was combined with the Industrial Adhesives and Tapes
Division.
The financial information presented herein reflects the impact of the preceding product move between business segments
for all periods presented.