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TableofContents
millionaverageoptionsfor2014,and2.0millionaverageoptionsfor2013).Thecomputationsforbasicanddilutedearningsper
sharefortheyearsendedDecember31follow:
EarningsPerShareComputations
     
   
(Amountsinmillions,exceptpershareamounts)   2015  2014  2013
Numerator:     
Netincomeattributableto3M  $ 4,833 $ 4,956  $ 4,659 
    
Denominator:     
Denominatorforweightedaverage3Mcommonsharesoutstanding—basic 625.6   649.2   681.9
    
DilutionassociatedwiththeCompany’sstock-basedcompensationplans 11.6   12.8   11.7
    
Denominatorforweightedaverage3Mcommonsharesoutstanding—diluted 637.2   662.0   693.6
    
Earningspershareattributableto3Mcommonshareholders—basic  $ 7.72 $ 7.63  $ 6.83 
Earningspershareattributableto3Mcommonshareholders—diluted  $ 7.58 $ 7.49  $ 6.72 
Stock-basedcompensation:TheCompanyrecognizescompensationexpenseforitsstock-basedcompensationprograms,which
includestockoptions,restrictedstock,restrictedstockunits,performanceshares,andtheGeneralEmployees’StockPurchasePlan
(GESPP).Underapplicableaccountingstandards,thefairvalueofshare-basedcompensationisdeterminedatthegrantdateandthe
recognitionoftherelatedexpenseisrecordedovertheperiodinwhichtheshare-basedcompensationvests.RefertoNote15for
additionalinformation.
Comprehensiveincome:Totalcomprehensiveincomeandthecomponentsofaccumulatedothercomprehensiveincome(loss)are
presentedintheConsolidatedStatementofComprehensiveIncomeandtheConsolidatedStatementofChangesinEquity.
Accumulatedothercomprehensiveincome(loss)iscomposedofforeigncurrencytranslationeffects(includinghedgesofnet
investmentsininternationalcompanies),definedbenefitpensionandpostretirementplanadjustments,unrealizedgainsandlosseson
available-for-saledebtandequitysecurities,andunrealizedgainsandlossesoncashflowhedginginstruments.
Derivativesandhedgingactivities:AllderivativeinstrumentswithinthescopeofASC815,DerivativesandHedging,arerecorded
onthebalancesheetatfairvalue.TheCompanyusesinterestrateswaps,currencyandcommoditypriceswaps,andforeigncurrency
forwardandoptioncontractstomanagerisksgenerallyassociatedwithforeignexchangerate,interestrateandcommoditymarket
volatility.Allhedginginstrumentsthatqualifyforhedgeaccountingaredesignatedandeffectiveashedges,inaccordancewithU.S.
generallyacceptedaccountingprinciples.Iftheunderlyinghedgedtransactionceasestoexist,allchangesinfairvalueoftherelated
derivativesthathavenotbeensettledarerecognizedincurrentearnings.Instrumentsthatdonotqualifyforhedgeaccountingare
markedtomarketwithchangesrecognizedincurrentearnings.Cashflowsfromderivativeinstrumentsareclassifiedinthestatement
ofcashflowsinthesamecategoryasthecashflowsfromtheitemssubjecttodesignatedhedgeorundesignated(economic)hedge
relationships.TheCompanydoesnotholdorissuederivativefinancialinstrumentsfortradingpurposesandisnotapartyto
leveragedderivatives.
Creditrisk:TheCompanyisexposedtocreditlossintheeventofnonperformancebycounterpartiesininterestrateswaps,currency
swaps,commoditypriceswaps,andforwardandoptioncontracts.However,theCompany’sriskislimitedtothefairvalueofthe
instruments.TheCompanyactivelymonitorsitsexposuretocreditriskthroughtheuseofcreditapprovalsandcreditlimits,andby
selectingmajorinternationalbanksandfinancialinstitutionsascounterparties.3Mentersintomasternettingarrangementswith
counterpartieswhenpossibletomitigatecreditriskinderivativetransactions.Amasternettingarrangementmayalloweach
counterpartytonetsettleamountsowedbetweena3Mentityandthecounterpartyasaresultofmultiple,separatederivative
transactions.TheCompanydoesnotanticipatenonperformancebyanyofthesecounterparties.3Mhaselectedtopresentthefair
valueofderivativeassetsand
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