3M 2010 Annual Report Download - page 34

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28
PERFORMANCE BY GEOGRAPHIC AREA
While 3M manages its businesses globally and believes its business segment results are the most relevant measure
of performance, the Company also utilizes geographic area data as a secondary performance measure. Export sales
are generally reported within the geographic area where the final sales to 3M customers are made. A portion of the
products or components sold by 3M’s operations to its customers are exported by these customers to different
geographic areas. As customers move their operations from one geographic area to another, 3M’s results will follow.
Thus, net sales in a particular geographic area are not indicative of end-user consumption in that geographic area.
Financial information related to 3M operations in various geographic areas is provided in Note 18. Operating income
results by geographic area were significantly impacted by restructuring and other items. In 2009, restructuring
actions, partially offset by a gain on sales of real estate, decreased worldwide operating income by $194 million, with
the largest impact in Europe, Asia Pacific and the United States. In 2008, restructuring actions, exit activities and a
loss on sale of businesses, which were partially offset by a gain on sale of real estate, decreased worldwide
operating income by $269 million, with the largest impact in the United States and Europe.
A summary of key information and discussion related to 3M’s geographic areas follow:
2010
United
States
Asia Pacific
Europe,
Middle East
and Africa
Latin
America/
Canada
Other
Unallocated
Worldwide
Net sales (millions) ........
$
9,210
$
8,259
$
6,259
$
2,950
$
(16
)
$
26,662
% of worldwide sales ....
34.5
%
31.0
%
23.5
%
11.0
%
—
100.0
%
Components of net sales
change:
Volume — organic ........
7.0
%
30.3
%
7.4
%
12.1
%
—
13.7
%
Price ....................
0.1
(1.6
)
0.1
1.1
—
(0.2
)
Organic local-currency sales
7.1
28.7
7.5
13.2
—
13.5
Acquisitions ..............
1.1
0.9
0.4
1.3
—
0.9
Local-currency sales ......
8.2
29.6
7.9
14.5
—
14.4
Divestitures ..............
—
—
(0.3
)
—
—
(0.1
)
Translation ...............
—
5.3
(2.8
)
2.7
—
1.0
Total sales change ........
8.2
%
34.9
%
4.8
%
17.2
%
—
15.3
%
Operating income (millions) .
$
1,636
$
2,400
$
1,112
$
797
$
(27
)
$
5,918
Percent change .........
(0.2
)%
57.1
%
10.9
%
26.5
%
—
22.9
%
For total year 2010, as shown in the preceding table, sales rose 15.3 percent, driven largely by organic volume
increases of 13.7 percent. Every major geographic region expanded sales, with total sales in Asia Pacific up 34.9
percent, Latin America/Canada up 17.2 percent, the United States up 8.2 percent, and Europe, Middle East and
Africa up 4.8 percent. Investments in innovation and new product development, sales and marketing capability and
localized manufacturing created new growth opportunities in adjacent market spaces. For 2010, international
operations represented nearly two-thirds of 3M’s sales.