3M 2014 Annual Report Download - page 47

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41
In March 2013, 3M sold shares in 3M India Limited, a subsidiary of the Company, in return for $8 million. The
noncontrolling interest shares of this subsidiary trade on a public exchange in India. This sale of shares complied with an
amendment to Indian securities regulations that required 3M India Limited, as a listed company, to achieve a minimum
public shareholding of at least 25 percent. As a result of this transaction, 3M’s ownership in 3M India Limited was reduced
from 76 percent to 75 percent. The $8 million received in the first quarter of 2013 was classified as other financing activity
in the consolidated statement of cash flows.
In addition to the March 2013 sale of noncontrolling interest described above, other cash flows from financing activities
may include various other items, such as changes in cash overdraft balances, and principal payments for capital leases.
Off-Balance Sheet Arrangements and Contractual Obligations:
As of December 31, 2014, the Company has not utilized special purpose entities to facilitate off-balance sheet financing
arrangements. Refer to the section entitled “Warranties/Guarantees” in Note 13 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, 2014, follows:
Contractual Obligations
Payments due by year
After
(Millions)
Total
2015 2016 2017 2018
2019
2019
Long-term debt, including current
portion (Note 9) $
6,786 $
55 $
1,109
$
745
$
608 $
622 $
3,647
Interest on long-term debt 1,995 139 136
118
114 111 1,377
Operating leases (Note 13) 831
225 164
126
75 54 187
Capital leases (Note 13) 73 11 11
7
4 3 37
Unconditional purchase
obligations and other 1,237 879 139
92
55 34 38
Total contractual cash obligations $
10,922
$
1,309 $
1,559
$
1,088
$
856 $
824 $
5,286
Long-term debt payments due in 2015, 2016 and 2017 include floating rate notes totaling $55 million (classified as current
portion of long-term debt), $71 million (included in other borrowings in the long-term debt table), and $96 million (included
as a separate floating rate note in the long-term debt table), respectively, as a result of put provisions associated with
these debt instruments. Interest projections on both floating and fixed rate long-term debt, including the effects of interest
rate swaps, are based on effective interest rates as of December 31, 2014.
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 2014 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 ASC 740, which is expected to be paid