3M 2015 Annual Report Download - page 60
Download and view the complete annual report
Please find page 60 of the 2015 3M annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.![](/annual_reports_html/3M-2015-Annual-Report-1a009be/bg_60.png)
TableofContents
millionaverageoptionsfor2014,and2.0millionaverageoptionsfor2013).Thecomputationsforbasicanddilutedearningsper
sharefortheyearsendedDecember31follow:
EarningsPerShareComputations
(Amountsinmillions,exceptpershareamounts) 2015 2014 2013
Numerator:
Netincomeattributableto3M $ 4,833 $ 4,956 $ 4,659
Denominator:
Denominatorforweightedaverage3Mcommonsharesoutstanding—basic 625.6 649.2 681.9
DilutionassociatedwiththeCompany’sstock-basedcompensationplans 11.6 12.8 11.7
Denominatorforweightedaverage3Mcommonsharesoutstanding—diluted 637.2 662.0 693.6
Earningspershareattributableto3Mcommonshareholders—basic $ 7.72 $ 7.63 $ 6.83
Earningspershareattributableto3Mcommonshareholders—diluted $ 7.58 $ 7.49 $ 6.72
Stock-basedcompensation:TheCompanyrecognizescompensationexpenseforitsstock-basedcompensationprograms,which
includestockoptions,restrictedstock,restrictedstockunits,performanceshares,andtheGeneralEmployees’StockPurchasePlan
(GESPP).Underapplicableaccountingstandards,thefairvalueofshare-basedcompensationisdeterminedatthegrantdateandthe
recognitionoftherelatedexpenseisrecordedovertheperiodinwhichtheshare-basedcompensationvests.RefertoNote15for
additionalinformation.
Comprehensiveincome:Totalcomprehensiveincomeandthecomponentsofaccumulatedothercomprehensiveincome(loss)are
presentedintheConsolidatedStatementofComprehensiveIncomeandtheConsolidatedStatementofChangesinEquity.
Accumulatedothercomprehensiveincome(loss)iscomposedofforeigncurrencytranslationeffects(includinghedgesofnet
investmentsininternationalcompanies),definedbenefitpensionandpostretirementplanadjustments,unrealizedgainsandlosseson
available-for-saledebtandequitysecurities,andunrealizedgainsandlossesoncashflowhedginginstruments.
Derivativesandhedgingactivities:AllderivativeinstrumentswithinthescopeofASC815,DerivativesandHedging,arerecorded
onthebalancesheetatfairvalue.TheCompanyusesinterestrateswaps,currencyandcommoditypriceswaps,andforeigncurrency
forwardandoptioncontractstomanagerisksgenerallyassociatedwithforeignexchangerate,interestrateandcommoditymarket
volatility.Allhedginginstrumentsthatqualifyforhedgeaccountingaredesignatedandeffectiveashedges,inaccordancewithU.S.
generallyacceptedaccountingprinciples.Iftheunderlyinghedgedtransactionceasestoexist,allchangesinfairvalueoftherelated
derivativesthathavenotbeensettledarerecognizedincurrentearnings.Instrumentsthatdonotqualifyforhedgeaccountingare
markedtomarketwithchangesrecognizedincurrentearnings.Cashflowsfromderivativeinstrumentsareclassifiedinthestatement
ofcashflowsinthesamecategoryasthecashflowsfromtheitemssubjecttodesignatedhedgeorundesignated(economic)hedge
relationships.TheCompanydoesnotholdorissuederivativefinancialinstrumentsfortradingpurposesandisnotapartyto
leveragedderivatives.
Creditrisk:TheCompanyisexposedtocreditlossintheeventofnonperformancebycounterpartiesininterestrateswaps,currency
swaps,commoditypriceswaps,andforwardandoptioncontracts.However,theCompany’sriskislimitedtothefairvalueofthe
instruments.TheCompanyactivelymonitorsitsexposuretocreditriskthroughtheuseofcreditapprovalsandcreditlimits,andby
selectingmajorinternationalbanksandfinancialinstitutionsascounterparties.3Mentersintomasternettingarrangementswith
counterpartieswhenpossibletomitigatecreditriskinderivativetransactions.Amasternettingarrangementmayalloweach
counterpartytonetsettleamountsowedbetweena3Mentityandthecounterpartyasaresultofmultiple,separatederivative
transactions.TheCompanydoesnotanticipatenonperformancebyanyofthesecounterparties.3Mhaselectedtopresentthefair
valueofderivativeassetsand
60