3M 2011 Annual Report Download - page 43

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reflective of the credit risk of the issuer and the underlying collateral on the original issue date. Terms of the reset are
unique to individual securities. Fixed rate coupons are established at the time the security is issued and are based
upon a spread to a related maturity treasury bond. The spread against the treasury bond is reflective of the credit risk
of the issuer and the underlying collateral on the original issue date. 3M does not currently expect risk related to its
holdings in asset-backed securities to materially impact its financial condition or liquidity. Refer to Note 9 for more
details about 3M’s diversified marketable securities portfolio, which totaled $2.357 billion as of December 31, 2011.
Additional purchases of investments include additional survivor benefit insurance and equity investments.
Cash Flows from Financing Activities:
Years ended December 31
(Millions) 2011 2010 2009
Change in short-term debt — net ............................................ $ 11 $ (24) $ (536 )
Repayment of debt (maturities greater than 90 days) ............. (1,429 ) (556) (519 )
Proceeds from debt (maturities greater than 90 days) ............ 1,111 108 41
Total cash change in debt ....................................................... $ (307 ) $ (472) $ (1,014 )
Purchases of treasury stock .................................................... (2,701 ) (854) (17 )
Reissuances of treasury stock ................................................ 902 666 431
Dividends paid to shareholders ............................................... (1,555 ) (1,500) (1,431 )
Excess tax benefits from stock-based compensation ............. 53 53 14
Other — net ............................................................................. (67 ) (77) 3
Net cash used in financing activities ....................................... $ (3,675 ) $ (2,184) $ (2,014 )
Total debt at December 31, 2011 was $5.2 billion, compared to $5.5 billion at year-end 2010 and $5.7 billion at year-
end 2009. Total debt was 25 percent of total capital (total capital is defined as debt plus equity) at both year-end
2011 and year-end 2010, compared with 30 percent at year-end 2009. The net change in short-term debt is typically
due to commercial paper activity and international borrowings. In 2011, major items in repayment of debt (maturities
greater than 90 days) included redemption of $800 million (principal amount) of medium-term notes in
November 2011, redemption of Convertible Notes, repayment of debt related to the 11.6 billion Japanese Yen note
(installments paid in March and September 2011), repayment of the remainder of the Canadian Dollar loan, and
repayment of a portion of debt that was acquired, primarily related to the Winterthur acquisition. Refer to Note 10 for
additional information on these debt repayments. In 2010, major items in repayment of debt (maturities greater than
90 days) included repayment of $350 million in Dealer Remarketable Securities, which matured in December 2010,
and repayment of a portion of debt related to the 5.8 billion Japanese Yen installment paid on September 30, 2010
(refer to Notes 6 and 10 for more detail). In addition, approximately $105 million in acquired debt related to 2010
acquisitions was subsequently repaid. In 2009, repayment of debt (maturities greater than 90 days) includes a $400
million medium-term note that matured in November 2009 and also includes repayments of commercial paper. In
2011, proceeds from debt (maturities greater than 90 days) primarily related to the issuance of a $1 billion medium
term note and an amendment to a Canada loan agreement which increased the principal amount of the loan by
100.5 million Canadian Dollars. In 2010, proceeds from debt primarily include a 100.5 million Canadian Dollar loan.
Repurchases of common stock are made to support the Company’s stock-based employee compensation plans and
for other corporate purposes. In February 2011, 3M’s Board of Directors authorized the repurchase of up to $7.0
billion of 3M’s outstanding common stock, replacing the Company’s existing repurchase program. This authorization
has no pre-established end date. In 2011, the Company purchased $2.701 billion in shares and in 2010 the
Company purchased $854 million in shares, while in 2009 purchases were minimal as the Company had no broker
purchases of treasury stock. For more information, refer to the table titled “Issuer Purchases of Equity Securities” in
Part II, Item 5. The Company does not utilize derivative instruments linked to the Company’s stock.
Cash dividends paid to shareholders totaled $1.555 billion ($2.20 per share) in 2011, $1.500 billion ($2.10 per share)
in 2010 and $1.431 billion ($2.04 per share) in 2009. 3M has paid dividends since 1916. In February 2012, the Board
of Directors increased the quarterly dividend on 3M common stock by 7.3 percent to 59 cents per share, equivalent
to an annual dividend of $2.36 per share. This marked the 54th consecutive year of dividend increases.
In addition to the items described below, other cash flows from financing activities may include various other items,
such as distributions to or sales of noncontrolling interests, changes in cash overdraft balances, and principal
payments for capital leases.
In 2011, as discussed in Note 6, subsequent to acquiring a controlling interest in Winterthur, 3M purchased additional
outstanding shares of its Winterthur subsidiary for $57 million, increasing 3M’s ownership interest from approximately