3M 2009 Annual Report Download - page 74

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• 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 (discussed further in Note 11),
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 2008
Cost of sales..............................................................................................................
.
$ 110 $ 84
Selling, general and administrative expenses...........................................................
.
91 135
Research, development and related expenses.........................................................
.
8 10
Total restructuring expense ...................................................................................
.
$ 209 $ 229
Components of these restructuring actions by business segment and a roll-forward of associated balances follow
below. Cash payments in 2008 related to these actions were not material.
(Millions)
Employee-
Related
Items/
Benefits
and Other
Asset
Impairments Total
Expenses incurred in 2008:
Industrial and Transportation...................................................... $ 33 $ 7 $ 40
Health Care................................................................................. 37 14 51
Consumer and Office.................................................................. 17 1 18
Safety, Security and Protection Services ................................... 12 — 12
Display and Graphics ................................................................. 15 9 24
Electro and Communications...................................................... 7 — 7
Corporate and Unallocated......................................................... 65 12 77
Total 2008 expenses............................................................... $ 186 $ 43 $ 229
Non-cash changes in 2008 .......................................................... $ — $ (43) $ (43)
Expenses incurred in 2009:
Industrial and Transportation...................................................... $ 83 $ 5 $ 88
Health Care................................................................................. 20 — 20
Consumer and Office.................................................................. 13 — 13
Safety, Security and Protection Services ................................... 17 — 17
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
The majority of the remaining employee related items and benefits are expected to be paid out in cash in the first six
months of 2010.