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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1993
Commission file number 1-3285
MINNESOTA MINING AND MANUFACTURING COMPANY
State of Incorporation: Delaware I.R.S. Employer Identification
No. 41-0417775
Executive offices: 3M Center, St. Paul, Minnesota
55144
Telephone number: (612) 733-1110
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
ACT:
Name of each
exchange
Title of each class on which
registered
Common Stock, Without Par Value New York Stock
Exchange
Pacific Stock
Exchange
Chicago Stock
Exchange
Note: The common stock of the Registrant is also traded on
the Amsterdam
Stock Exchange, German stock exchanges, Swiss stock exchanges,
the Paris Stock
Exchange and the Tokyo Stock Exchange.
Securities registered pursuant to section 12(g) of the
Act: None
Indicate by check mark whether the Registrant (1) has
filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of
1934 during the preceding 12 months (or for such shorter
period that the
Registrant was required to file such reports), and (2) has
been subject to
such filing requirements for the past 90 days. Yes X . No
.
Indicate by check mark if disclosure of delinquent
filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not
be contained,
to the best of registrant's knowledge, in definitive proxy
or information
statements incorporated by reference in Part III of this Form
10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by
nonaffiliates of the
Registrant, based on the closing price of $107.25 per share as
reported on the
New York Stock Exchange-Composite Index on January 31,
1994, was $23.0
billion.
Shares of common stock outstanding at January 31, 1994:
214,001,230.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following documents are incorporated by
reference to Parts
III and IV of this Form 10-K: (1) Proxy Statement for
registrant's 1994
annual meeting, (2) Form 10-Q for period ended June 30,
1987, and (3)
Registration Nos. 33-29329, 33-48089 and 33-49842.
This document contains 41 pages.
MINNESOTA MINING AND MANUFACTURING COMPANY
FORM 10-K
For the Year Ended December 31, 1993
PART I
Item 1. Business.
Minnesota Mining and Manufacturing Company was incorporated
in 1929 under
the laws of the State of Delaware to continue operations, begun
in 1902, of a
Minnesota corporation of the same name. As used herein,
the term "3M"
includes Minnesota Mining and Manufacturing Company and
subsidiaries unless
the context otherwise indicates. 3M employs 86,168 persons.
3M is an integrated enterprise characterized by substantial
interdivision
and intersector cooperation in research, manufacturing and
marketing of
products incorporating similar component materials
manufactured at common
internal sources. Its business has developed from its research
and technology
in coating and bonding for coated abrasives, its only product
in its early
years. Coating and bonding is the process of applying one
material to another,
such as adhesives to a backing (pressure-sensitive tapes),
abrasive granules
to paper or cloth (coated abrasives), ceramic coating to
granular mineral
(roofing granules), heat- or light- sensitive materials to
paper, film and
metal (dry silver paper, photographic film and lithographic
plates), iron
oxide to plastic backing (magnetic recording tape), glass
beads to plastic
backing (reflective sheeting), and low tack adhesives to paper
(repositionable
notes).
3M believes that it is among the leading producers of
products for many
of the markets it serves. In all cases, 3M products are subject
to direct or
indirect competition. Generally speaking, most 3M products
involve technical
competence in development, manufacturing and marketing and
are subject to
competition with products manufactured and sold by other
technically-oriented
companies.
3M's three business sectors are: Industrial and Consumer;
Information,
Imaging and Electronic; and Life Sciences. Each sector brings
together common
or related 3M technologies and thus provides greater
opportunity for the
future development of products and services and a more
efficient sharing of
business strengths.
The notes to the financial statements on page 25 and 26 of
this Form 10-K
provide financial information concerning 3M's three industry
segments and 3M's
operations in various geographic areas of the world.
Industry Segments
3M's operations are organized into three business sectors.
These sectors
have worldwide responsibility for virtually all 3M product
lines. A few
miscellaneous and staff-sponsored new products, still in
development, are not
assigned to the sectors.
Industrial and Consumer Sector: This sector is a leader
in developing
the technologies for pressure-sensitive adhesives, specialty
tapes, coated and
nonwoven abrasives, and specialty chemicals. These core
technologies provide
a strong basis for the development of new products. The
sector also has
strong distribution channels and logistics expertise. The sector
is organized
into five groups: Abrasive, Chemical and Film Products
Group; Automotive
Systems Group; Consumer Markets; Office Markets; and Tape Group.
Major products in the Abrasive, Chemical and Film Products
Group include
coated abrasives (such as sandpaper) for grinding, conditioning
and finishing
a wide range of surfaces; natural and color-coated mineral
granules for
asphalt shingles; finishing compounds; and flame-retardant
materials. This
group also markets products for maintaining and repairing
vehicles. Major
chemical products include protective chemicals for furniture,
fabrics and
paper products; fire-fighting agents; fluoroelastomers for
seals, tubes and
gaskets in engines; engineering fluids; and high performance
fluids used in
the manufacture of computer chips and for electronic cooling
and lubricating
of computer hard disk drives. This group also serves as a major
resource for
other 3M divisions, supplying specialty chemicals, adhesives and
films used in
the manufacture of many 3M products.
Major products in the Automotive Systems Group include body
side-molding
and trim; functional and decorative graphics; corrosion-
and abrasion-
resistant films; tapes for attaching nameplates, trim and
moldings; and
fasteners for attaching interior panels and carpeting.
Major products in the Consumer and Office Market
businesses include
Scotch brand tapes; Post-it brand note products including memo
pads, labels,
stickers, pop-up notes and dispensers; home cleaning
products including
Scotch-Brite brand scouring products, O-Cel-O brand sponges
and Scotchgard
brand fabric protectors; energy control products such as
window insulation
kits; nonwoven abrasive materials for floor maintenance
and commercial
cleaning; floor matting; and a full range of do-it-yourself
products including
surface preparation and wood finishing materials, and filters for
furnaces and
air conditioners.
The Tape Group manufactures and markets a wide
variety of high-
performance and general-use pressure-sensitive tapes and
specialty products.
Major product categories include industrial application tapes
made from a wide
variety of materials such as foil, film, vinyl and polyester;
specialty tapes
and adhesives for industrial applications including Scotch
brand VHB brand
tapes, lithographic tapes, joining systems, specialty
additives, vibration
control materials, liquid adhesives, and reclosable
fasteners; general-use
tapes such as masking, box-sealing and filament; and
labels and other
materials for identifying and marking durable goods.
Information, Imaging and Electronic Sector: This sector
serves rapidly
changing markets in audio, video and data recording; graphic
communications;
information storage, output and transfer; telecommunications;
electronics and
electrical products. The sector has the leading technologies
for certain
electrical, electronic and fiber-optic applications and a
wide variety of
graphic imaging technologies. Having these related areas in one
operating unit
fosters efficient product development and innovation. The
sector is also
strong in worldwide distribution and service. The sector is
organized into
three groups: Electro and Communications Systems; Imaging
Systems; and Memory
Technologies.
The Electro and Communication Systems Group includes
products in the
electronic, electrical, telecommunication and visual
communication fields.
The electronic and electrical products include packaging and
inter-connection
devices; insulating materials, including pressure-sensitive
tapes and resins;
and other related equipment. These products are used
extensively by
manufacturers of electronic and electrical equipment, as
well as the
construction and maintenance segments of the electric utility,
telephone and
other industries. The telecommunication products serve the
world's telephone
companies with a wide array of products for fiber-optic and
copper-based
telephone systems. These include many innovative connecting,
closure and
splicing systems, maintenance products and test equipment.
The visual
communication products serve the world's office and education
markets with
overhead projectors and transparency films and materials plus
equipment and
accessories for computer-based presentations.
The Imaging Systems Group offers a complete line of products
for printers
and graphic arts firms, from the largest commercial printer to
the smallest
instant printer or in-house facility. These products include a
broad line of
presensitized lithographic plates and related supplies; a
complete line of
duplicator press plates and automated imaging systems and
related supplies;
copy and art preparation materials; pre-press proofing
systems; carbonless
paper sheets for multiple-part business forms; and a line of
light-sensitive
dry silver papers and films for electronically recorded images.
This group's
imaging technologies are used in producing photographic
products, including
medical X-ray films, graphic arts films and amateur color films.
It also is a
major supplier of laser imagers and supplies and
computerized medical
diagnostic systems. This group also offers an array of
micrographic systems
including readers and printers for engineering graphics
and office
applications. Related products include dry silver imaging
papers and
microfilm in aperture card and roll formats.
The Memory Technologies Group manufactures and markets a
complete line of
magnetic and optical recording products for many applications
that meet the
requirements for complex applications in computers,
instrumentation,
automation and other fields. Memory Technologies is the
world's largest
supplier of removable memory media for computers.
Products range from
computer diskettes, cartridges and tapes to CD-ROM and
rewritable optical
media. The group markets a wide array of recording products
which are used
for home video recording, in professional radio and television
markets, as
well as for commercial and industrial uses. These include
reel-to-reel,
cartridge and cassette tapes for audio and video recording.
Life Sciences Sector: This sector contributes to better
health and
safety for people around the world. The Life Sciences
Sector's major
technologies include pressure-sensitive adhesives,
substrates,
extrusion/coating, nonwoven materials, specialty polymers and
resins, optical
systems, drug delivery, and electro-mechanical devices. The
sector has strong
distribution channels in all its major markets. The sector is
organized into
three groups: Medical Products; Pharmaceuticals, Dental
and Disposable
Products; and Traffic and Personal Safety Products.
The Medical Products Group produces a broad range of
medical supplies,
devices and equipment. Medical supplies include tapes,
dressings, surgical
drapes and masks, biological indicators, orthopedic casting
materials and
electrodes. Medical devices and equipment include
stethoscopes, heart-lung
machines, sterilization equipment, blood gas monitors,
powered orthopedic
instruments, skin staplers, and intravenous infusion pumps.
The Medical
Products Group also develops hospital information systems.
The Pharmaceuticals, Dental and Disposable Products
Group serves
pharmaceutical and dental markets, as well as manufacturers
of disposable
diapers. Pharmaceuticals include ethical drugs and
drug-delivery systems.
Among ethical pharmaceuticals are analgesics,
anti-inflammatories and
cardiovascular and respiratory products. Drug-delivery
systems include
metered-dose inhalers, as well as transdermal skin patches
and related
components. Dental products include dental restoratives,
adhesives, impression
materials, temporary crowns, infection control products and
orthodontic
brackets and wires. This group also produces a broad line of
tape closures
for disposable diapers.
The Traffic and Personal Safety Products Group is a
leader in the
following markets: traffic control materials,
commercial graphics,
occupational health and safety, and out-of-home advertising.
In traffic
control materials, 3M is the worldwide leader in reflective
sheetings. These
materials are used on highway signs, vehicle license plates,
construction
workzone devices, and trucks and other vehicles. In commercial
graphics, 3M
supplies a broad line of films, inks and related products
used to produce
graphics for trucks and signs. Major occupational health and
safety products
include maintenance-free and reusable respirators plus
personal monitoring
systems. Out-of-home advertising includes outdoor
advertising, advertising
displays in shopping centers and local advertising in
national magazines.
This product group also markets a variety of other products.
These include
spill-control sorbents, Thinsulate brand and Lite Loft brand
insulations,
traffic control devices, filtration products, electronic
surveillance
products, reflective sheetings for personal safety, and films
for protection
against counterfeiting.
Distribution
3M products are sold directly to users and through numerous
wholesalers,
retailers, jobbers, distributors and dealers in a wide variety
of trades in
many countries of the world. Management believes that the
confidence of
wholesalers, retailers, jobbers, distributors and dealers in
3M and its
products, developed through long association with trained
marketing and sales
representatives, has contributed significantly to 3M's
position in the
marketplace and to its growth. 3M has 322 sales offices and
distribution
centers worldwide, including 9 major branch offices and
warehouses that are
located in principal cities throughout the United States. There
are 99 sales
offices and distribution centers located in the United States.
The remaining
223 sales offices and distribution centers are located in 52
countries outside
the United States.
Research, Patents and Raw Materials
Research and product development constitute an important
part of 3M's
activities, and products resulting from such research and product
development
have contributed in large measure to its growth. The total
amount spent for
all research and development activities was $1.030 billion,
$1.007 billion,
and $914 million in 1993, 1992 and 1991, respectively.
The corporate research laboratories are engaged in
research which does
not relate directly to 3M's existing product lines. They also
support the
research efforts of division and sector laboratories. Most
major operating
divisions and domestic subsidiaries, as well as several
international
subsidiaries, have their own laboratories for improvement of
existing products
and development of related new products. Engineering research
staff groups
provide specialized services in instrumentation, engineering
and process
development. An organization is maintained for technological
development not
sponsored by other units of the company.
3M is the owner of many domestic and foreign patents
derived primarily
from its own research activities. 3M does not consider that its
business as a
whole is materially dependent upon any one patent, license or
trade secret or
any group of related patents, licenses or trade secrets.
The company experienced no significant or unusual
problems in the
purchase of raw materials during 1993. While 3M has
successfully met its
demands to date, it is impossible to predict future shortages or
their impact.
Executive Officers
The following is a list of the executive officers of 3M as
of March 1,
1994, their present position, their current age, the year
first elected to
their position and other positions held within 3M during the
previous five
years. All of these persons have been employed full time by 3M or
a subsidiary
of 3M for more than five years. All officers are elected by
the Board of
Directors at its annual meeting, with vacancies and new positions
being filled
at interim meetings. There are no family relationships
between any of the
executive officers named, nor is there any arrangement or
understanding
pursuant to which any person was selected as an officer.
Year Elected
to Present
Name Age Present Position
Position Other Positions Held During 1989-1994
_________________ ___
_________________________ _____________
_____________________________________
L.D. DeSimone 57 Chairman of the Board
and 1991 Executive Vice President,
Chief Executive Officer
Information and Imaging
Technologies Sector and
Corporate Services, 1989-1991
Executive Vice President, Industrial
and Electronic Sector and
Corporate Services, 1987-1989
Giulio Agostini 58 Senior Vice President,
1993 Senior Vice President,
Finance and Office
Finance, 1991-1993
Administration
Director, Finance and Administration,
3M Italy, 1972-1991
William E. Coyne 57 Vice President,
1994 President and General Manager,
Research and Development
3M Canada, Inc., 1990-1994
Group Vice President, Medical
Products Group, 1988-1990
Lawrence E. Eaton 56 Executive Vice
President, 1991 Group Vice President,
Information, Imaging,
Memory Technologies Group,
and Electronic Sector
1986-1991
and Corporate Services
Harry A. Hammerly 60 Executive Vice
President, 1994 Executive Vice President,
Life Sciences Sector and
International Operations and
International Operations
Corporate Services, 1991-1994
Executive Vice President,
Industrial and Electronic Sector
and Corporate Services, 1989-1991
Vice President, Europe, 1987-1989
Robert J. Hershock 60 Vice President,
1994 Group Vice President, Abrasive
Marketing
Technologies Group, 1990-1993
Division Vice President, Occupational
Health and Environmental Safety
Division, 1988-1990
Charles E. Kiester 57 Senior Vice President,
1993 Vice President, Engineering,
Engineering, Quality and
Quality and Manufacturing Services
Manufacturing Services
1990-1993
President and General Manager,
3M Canada,Inc., 1988-1990
Richard A. Lidstad 57 Vice President,
1992 Staff Vice President, Human Resource
Human Resources
Operations, 1987-1992
Ronald A. Mitsch 59 Executive Vice
President, 1991 Senior Vice President, Research
Industrial and Consumer
and Development, 1990-1991
Sector and Corporate
Services Group Vice President, Traffic and
Personal Safety Products Group,1985-1990
John J. Ursu 54 Vice President, Legal
Affairs 1993 General Counsel, 1992-1993
and General Counsel
Deputy General Counsel, 1990-1992
Associate General Counsel, 1986-1990
Item 2. Properties.
3M's general offices, corporate research laboratories,
most division
laboratories and certain manufacturing facilities are located
in St. Paul,
Minnesota. Within the United States, 3M operates 82 plants in
28 states and
has 99 sales offices and distribution centers located in
24 states.
Internationally, 3M operates 109 manufacturing and converting
facilities in 44
countries.
3M owns substantially all of its physical properties. 3M
leases certain
facilities that were financed through the issuance of industrial
development
bonds in the original principal amount of $30 million. 3M has
capitalized the
construction costs related to these facilities and recorded
the related
liabilities. Management believes 3M's existing physical
facilities are highly
suitable for the purposes for which they were designed.
Item 3. Legal Proceedings.
The company and certain of its subsidiaries are named
defendants in a
number of actions, governmental proceedings and claims,
including product
liability claims involving products now or formerly manufactured
and sold by
the company, many of which relate to silicone gel mammary
implants, and some
of which claims are purported or tentatively certified class
actions. Mammary
implant cases and claims are discussed separately below. In some
actions, the
claimants seek damages as well as other relief which, if
granted, would
require substantial expenditures.
The company is involved in a number of environmental
proceedings by
governmental agencies asserting liability for past waste
disposal and other
alleged environmental damage. The company conducts ongoing
investigations,
assisted by environmental consultants, to determine accruals for
the probable,
estimable costs of remediation. The remediation accruals are
reviewed each
quarter and changes are made as appropriate.
Some of these matters raise difficult and complex
factual and legal
issues and are subject to many uncertainties, including, but not
limited to,
the facts and circumstances of each particular action, the
jurisdiction and
forum in which each action is proceeding, and differences in
applicable law.
Accordingly, the company is not able to estimate the nature and
amount of any
future liability with respect to such matters.
Mammary Implant Litigation
As of December 31, 1993, the company had been named as a
defendant, often
with multiple co-defendants, in 3,054 claims and lawsuits in
various courts,
all seeking damages for personal injuries from allegedly
defective breast
implants. These claims and lawsuits, including class
actions, purport to
represent 8,842 individual claimants. These claims and lawsuits
are generally
in very preliminary stages, and it is not yet certain how
many of these
lawsuits and claims involve products manufactured and sold by
the company, as
opposed to other manufacturers. The company entered the
business in 1977 by
purchasing McGhan Medical and subsequently sold that business
in 1984. The
company's sales of implants, during the time that it engaged in
this business,
represent approximately seven percent of the total cumulative
mammary implant
sales. The company is vigorously defending the individual
claims and
lawsuits. Given the preliminary state of the proceedings,
company's counsel
has not yet reached a conclusion on the probability of company
liability.
Discussions regarding a possible "global settlement" have
taken place
during the last several months, with the facilitation of a
panel of federal
judges acting as mediators, between a plaintiffs' steering
committee, various
plaintiff groups, the mediators, and key defendants. The
company was a
participant in these mediation efforts. On February 14, 1994,
Dow Corning,
Bristol-Myers Squibb, and Baxter Healthcare Corp., together with
several other
defendants, announced an agreement with representatives from
the plaintiffs'
steering committee on financial terms for a global settlement.
The company
was not included by the parties in this arrangement.
Discussions are now
being conducted between the company and representatives of the
plaintiffs'
steering committee. The company does not know at this time
whether these
discussions will lead to resolution of all or any portion of
the suits and
claims against it or whether it will be a participant in such a
settlement.
With respect to these silicone gel mammary implant claims
and lawsuits,
the company's general counsel has opined that, based solely on
the facts known
as of February 25, 1994, date of the opinion and
subject to future
developments, there is sufficient insurance coverage to recover
all liability
and costs arising out of these matters. No insurers have
denied coverage.
Therefore, the company believes that such matters will not
pose a material
risk to the financial position of the company or its results of
operations.
Item 4. Submission of Matters to a Vote of Security Holders.
None in the quarter ended December 31, 1993.
Part II
Item 5. Market Price of 3M's Common Stock and Related Security
Holder Matters.
At January 31, 1994, there were 117,343 shareholders of
record.
3M's stock is listed on the following stock exchanges:
New York Stock
Exchange, Pacific Stock Exchange, Chicago Stock Exchange,
Amsterdam Stock
Exchange, German stock exchanges, Swiss stock exchanges, Paris
Stock Exchange,
and Tokyo Stock Exchange.
Stock price comparison information (New York Stock
Exchange Composite
Transactions) is as follows:
Quarter First Second Third Fourth
Year
1993 High $111.75 $117.00 $111.25 $113.50
$117.00
Low 97.25 104.88 102.25 101.50
97.25
1992 High 98.75 97.38 103.75 107.00
107.00
Low 87.38 85.50 95.75 97.00
85.50
[TEXT]
Item 6. Selected Financial Data.
(Dollars in millions
except amounts per share)
1993 1992
1991 1990 1989
For the Year Ended December 31:
Net Sales ................................ $14,020 $13,883
$13,340 $13,021 $11,990
Net Income ............................... 1,263 1,233*
1,154 1,308 1,244
Per Share of Common Stock:
Net Income ............................. 5.82 5.63*
5.26 5.91 5.60
Cash Dividends Declared and Paid ....... 3.32 3.20
3.12 2.92 2.60
Ratio of Earnings to Fixed Charges ....... 15.51 12.81*
11.02 12.42 16.75
At December 31:
Total Assets ............................. 12,197 11,955
11,304 11,079 9,741
Long-term Debt (excluding portion due
within one year) ....................... 796 687
764 760 885
* Includes a net earnings increase of $6million, or 2 cents
per share, from the combination of
a legal settlement, special charges and the cumulative
effect of accounting changes, which
are more fully discussed on page 20.
Item 7. Management's Discussion and Analysis of Financial
Condition and
Results of Operations.
Operating Results
1993 was a challenging year in several respects. The company
faced recessions
in Europe and Japan, negative currency effects, a soft U.S.
health care market
and a highly competitive pricing environment.
Worldwide net sales rose 1.0 percent to $14.020 billion.
This followed
increases of 4.1 percent in 1992 and 2.5 percent in 1991.
Sales in the United States were $7.126 billion, up about 3
percent from
1992. Internationally, sales totaled $6.894 billion, a
decrease of about 1
percent from 1992.
Estimatedcomponents ofsales changefrom prioryears
wereasfollows (percents):
1993 1992
_________________________________________________________________
_____________
U.S. Int'l Worldwide U.S. Int'l
Worldwide
_________________________________________________________________
_____________
Volume 5 7 6 3 5
4
Price (2) (2) (2) --- (1)
(1)
Translation --- (6) (3) --- 1
1
_________________________________________________________________
_____________
Total 3 (1) 1 3 5
4
_________________________________________________________________
_____________
In the United States volume growth accelerated in 1993,
helped by a slight
improvement in the domestic economy; however, pricing
pressures also
increased, mainly in memory technologies product lines.
Internationally, sales growth in local currencies was
slightly better than
in 1992. However, currency fluctuations, which added to
international sales
in 1992, reduced those sales by about 6 percent in 1993.
Cost of goods sold was 60.8 percent of sales, up from 60.1
percent in 1992.
The negative impact of lower selling prices and currency was
partially offset
by improvements due to productivity gains and lower raw
material costs. In
1992, cost of goods sold decreased as a percent of sales
compared to 1991 due
to productivity gains and lower raw material costs which were
partially offset
by higher R&D spending and lower selling prices. Cost of goods
sold includes
manufacturing, research and development, and engineering
expenses.
Selling, general and administrative expenses decreased to
25.2 percent of
sales as the result of several cost-reduction programs. This
compares with
25.6 percent in 1992 and 24.9 percent in 1991. The 1992
increase was
magnified by costs for voluntary separations, higher sales
costs and modest
volume growth.
Worldwide employment decreased by over 1,000 in 1993, even
though about 600
people were added to support continued rapid growth in
developing countries.
This net reduction in employment occurred with little
disruption to the
company.
(Percent of sales) 1993
1992 1991
_________________________________________________________________
_____________
Cost of goods sold 60.8
60.1 60.4
_________________________________________________________________
_____________
Selling, general and administrative expenses 25.2
25.6 24.9
_________________________________________________________________
_____________
In December 1992, 3M recognized $129 million in settlement
of a patent
lawsuit involving 3M orthopedic casting materials. Operating
income in 1992
includes this amount, which is shown on a separate line
of the Income
Statement titled "legal settlement."
Also in 1992, 3M recorded $115 million of special charges to
enhance its
competitiveness and productivity. These charges relate
primarily to asset
write-downs, including rationalization of manufacturing
operations. Operating
income in 1992 includes this amount, which is shown on a
separate Income
Statement line titled "special charges".
Worldwide operating income in 1993 decreased 1.9 percent to
$1.956 billion.
The positive impact of increased sales volume and cost control
was more than
offset by negative currency and pricing. Operating income in
1993 included
about $53 million for manufacturing rationalizations
and voluntary
separations. This compared to 1992 costs of about $80 million
for voluntary
separation programs, in addition to the $115 million of special
charges. In
1992, operating income increased 1.7 percent, following a
decrease of 10.6
percent in 1991.
(Percent of sales) 1993
1992 1991
_________________________________________________________________
_____________
Operating Income 14.0
14.4 14.7
_________________________________________________________________
_____________
Interest expense was $50 million, down from $76 million in
1992 and $97
million in 1991. The declines in both 1993 and 1992 were mainly
due to lower
interest rates. Investment and other income totaled $96
million in 1993,
which includes a $36 million benefit from tax settlements,
improved investment
results, and other items, many of which were of a non-recurring
nature. This
compared with investment and other income of $29 million in
1992 and $15
million in 1991.
The company's effective tax rate was 35.3 percent of pre-tax
income, the
same as in 1992 and down from 36.8 percent in 1991. The 1
percent increase in
the 1993 U.S. statutory corporate tax rate was offset by lower
taxes on 3M
International Operations, the extension of the U.S. R&D tax
credit and the
positive effect of revaluing deferred tax assets. The company's
deferred tax
assets will reverse over an extended period of time.
Net income increased 2.5 percent to $1.263 billion, or $5.82
per share. In
1992, net income increased 6.8 percent to $1.233 billion, or
$5.63 per share,
compared with $1.154 billion, or $5.26 per share, in 1991.
The company estimates that changes in the value of the
U.S. dollar
decreased 1993 net income by about $62 million, or 29
cents per share.
Currency changes increased net income by about $1 million,
or 1 cent per
share, in 1992, and by $23 million, or 11 cents per share, in
1991. These
estimates include the effect of translating profits from local
currencies into
U.S. dollars, the costs in local currencies of transferring
goods between the
parent company in the U.S. and international companies, and
transaction gains
and losses in countries not considered to be highly inflationary.
Over the long term, 3M expects to meet its aggressive
financial goals.
These include a growth in earnings per share averaging 10
percent a year or
better; return on stockholders' equity of 20 to 25 percent;
return on capital
employed of 27 percent or better; and 30 percent of sales
from products
introduced in the last four years.
Earnings per share increased 3.4 percent in 1993. Currency
effects reduced
earnings by about 5 percent. Return on average stockholders'
equity was 19.1
percent, up from 18.8 percent in 1992. This return has averaged
20.5 percent
over the past 5 years. Return on capital employed was 19.1
percent, down from
19.7 percent in 1992. This return has averaged 22.1 percent
over the past 5
years. In 1993 more than 25 percent of sales came from
products introduced
within the last 4 years.
Performance by Business Sector
Industrial and Consumer Sector:
In 1993, sales were up 2.6 percent to $5.4 billion. Operating
income rose 2.8
percent to $849 million. Excluding special charges of $13
million in 1992,
operating income rose 1.2 percent in 1993. Sales and profits
showed strong
growth in the Asia Pacific area and in Latin America.
However, results in
Europe were adversely affected by weak economies and the stronger
U.S. dollar.
This sector expects continued growth in the United States, Asia
Pacific area
and in Latin America.
Information, Imaging and Electronic Sector:
In 1993, sales were down 1.7 percent to $4.5 billion. A
solid increase in
unit volume was more than offset by continued price competition
and negative
currency translation. Operating income increased 14.0
percent to $271
million. Excluding special charges of $81 million in 1992,
operating income
decreased 15.0 percent. Operating profit margins were
affected by price
competition and currency effects, as well as by large
investments in new
products and efforts to streamline operations. This sector
will continue to
face significant price pressure in 1994.
Life Sciences Sector:
In 1993, sales increased 2.6 percent to $4.1 billion.
Sales growth was
constrained by the stronger U.S. dollar and by the slowdown in
the U.S. health
care market due to uncertainty over health care reform.
Operating income
decreased 8.6 percent to $846 million. Excluding a net
benefit of $108
million from a legal settlement and special charges,
operating income
increased by 3.4 percent. This sector will continue to be
impacted by the
uncertainty over U.S. health care reform.
Financial Position
3M's financial condition remained strong in 1993, despite a
sluggish worldwide
economy. Balance sheet amounts did not vary significantly from
1992. Various
items, such as cash and short-term debt, can fluctuate
significantly from
month to month depending on short-term liquidity needs.
Substantially all of
the vested and earned benefits under 3M's employee retirement
plans, and about
half of the other postretirement benefit obligations, were
funded as of
December 31, 1993.
The company's key inventory index, which represents the number
of months of
inventory, was 4.0 months, up from 3.8 months in 1992.
Accounts receivable
days' sales outstanding were 66 days, up one day from 1992.
The company's
current ratio was 1.9, unchanged from the end of 1992.
Of the long-term debt outstanding at the end of 1993, $469
million was a
guarantee of debt of the 3M Employee Stock Ownership Plan. Total
debt was 23
percent of stockholders' equity at the end of 1993. This
compared with 22
percent at year-end 1992. The company's borrowings continued to
maintain AAA
long-term ratings.
Legal proceedings, including the silicone gel mammory
prosthesis situation
and environmental liabilities, are discussed in the legal
proceedings section
on page 8. The company believes that such matters will not
pose a material
risk to the financial position of the company.
Liquidity
Due to a change in the financial reporting period for 3M's
international
companies, the 1992 Consolidated Statement of Cash Flows
includes the cash
provided or used by 3M's international companies for a
14-month period
(November 1, 1991, to December 31, 1992).
The following table is presented on a comparative basis,
whereby 1992
excludes the November 1 to December 31, 1991, period for our
international
companies.
(Millions) 1993 1992 1991
_________________________________________________________________
_____________
Net cash provided by
operating activities $2,091 $2,218 $1,909
Net cash used in
investing activities (1,092) (1,139)
(1,197)
Net cash used in
financing activities (1,128) (1,027)
(686)
Effect of exchange rate
changes on cash 21 (20)
(62)
_________________________________________________________________
_____________
Net increase (decrease) in
cash and cash equivalents $ (108) $ 32 $
(36)
_________________________________________________________________
_____________
Capital expenditures $1,112 $1,225 $1,326
Depreciation 976 950 884
_________________________________________________________________
_____________
The company met its cash requirements primarily from
operating activities.
During 1993, cash flows provided by operating activities
totaled $2.091
billion. This more than covered capital expenditures and
dividend payments of
$1.833 billion. The company's superior credit rating provides
easy and ample
access to global capital markets.
As part of our efforts to control overall spending, capital
expenditures
declined 9.3 percent to $1.112 billion in 1993. This followed
a decline of
7.5 percent in calendar year 1992.
Stockholder dividends increased 3.8 percent to $3.32 per
share in 1993.
Cash dividend payments totaled $721 million. 3M has paid
dividends for 78
consecutive years. On February 14, 1994 the 3M Board of
Directors boosted the
quarterly dividend on 3M common stock 6 percent to 88 cents a
share, declared
a two-for-one stock split to shareholders of record on March
15, 1994 and
authorized the repurchase of up to 12 million of the
company's (pre-split)
shares. This share-repurchase authorization runs through
February 10, 1995.
The company repurchased all of the six million shares
available under a
previous authorization.
Repurchases of 3M common stock totaled $706 million in 1993,
compared with
$247 million in 1992 and $240 million in 1991. Increased share
repurchases in
1993 reduced the total number of shares outstanding by more
than 4 million.
Repurchases were made to support employee stock purchase plans
and for other
corporate purposes.
Future Outlook
Most economists expect slightly better global economic growth
this year, with
the improvement coming in the second half. This combined
with continued
emphasis on productivity improvement and new products should help
our results;
however, the pricing environment is likely to remain quite
competitive and
currency fluctuations could have a significant, negative effect
on our results
again this year.
Spending on research and development and capital equipment is
expected to
remain around 1993 levels. Employment levels should
continue to decline
slightly in 1994.
In 1992, the Financial Accounting Standards Board issued
Statement No. 112,
"Employers' Accounting for Postemployment Benefits."
Postemployment benefits
include, but are not limited to, disability, severance and
health care
benefits. 3M will adopt this standard in the first quarter of
1994. This
adoption will have a diminimus effect on the company's results of
operations.
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
Reference (pages)
Form 10-K
Data submitted herewith:
Report of Independent Accountants...............
15
Consolidated statements of income for the years ended
December 31, 1993, 1992 and 1991 .............
16
Consolidated balance sheets as of December 31, 1993 and
1992 ...........................................
17
Consolidated statements of cash flows
for the years ended December 31,
1993, 1992 and 1991...........................
18
Notes to financial statements ..................
19-30
Report of Independent Accountants
We have audited the consolidated financial statements and
the financial
statement schedules of Minnesota Mining and Manufacturing
Company and
subsidiaries (the company) as listed in Item 8 and Item 14(a)
of this Form
10-K. These financial statements and financial statement
schedules are the
responsibility of the Company's management. Our responsibility
is to express
an opinion on these financial statements and financial
statement schedules
based on our audits.
We conducted our audits in accordance with generally
accepted auditing
standards. Those standards require that we plan and perform
the audit to
obtain reasonable assurance about whether the financial
statements are free of
material misstatements. An audit includes examining, on a
test basis,
evidence supporting the amounts and disclosures in the financial
statements.
An audit also includes assessing the accounting
principles used and
significant estimates made by management, as well as
evaluating the overall
financial statement presentation. We believe that our
audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in
all material respects, the consolidated financial position of
Minnesota Mining
and Manufacturing Company and subsidiaries as of December 31,
1993 and 1992,
and the consolidated results of their operations and their cash
flows for each
of the three years in the period ended December 31, 1993 in
conformity with
generally accepted accounting principles. In addition, in our
opinion, the
financial statement schedules referred to above, when
considered in relation
to the basic financial statements taken as a whole, present
fairly, in all
material respects, the information required to be included
therein.
As discussed in the Notes to the Financial Statements, the
company changed the
fiscal year-end of its international companies in 1992. The
company also
adopted in 1992 Statements of Financial Accounting
Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions," and
No. 109, "Accounting for Income Taxes."
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
St. Paul, Minnesota
February 14, 1994
20
Consolidated Statement of Income
Minnesota Mining and Manufacturing Company and Subsidiaries
_________________________________________________________________
_________________________________
For the Years Ended December 31, 1993, 1992 and 1991
1993 1992 1991
_______________________________________________________
(Amounts in millions, except per-share data)
_________________________________________________________________
_________________________________
Net Sales
$14,020 $13,883 $13,340
_________________________________________________________________
______________________________
Operating Expenses
Cost of goods sold
8,529 8,346 8,058
Selling, general and administrative expenses
3,535 3,557 3,323
Legal settlement
--- (129) ---
Special charges
--- 115 ---
_________________________________________________________________
______________________________
Total
12,064 11,889 11,381
_________________________________________________________________
______________________________
Operating Income
1,956 1,994 1,959
_________________________________________________________________
______________________________
Other Income and Expense
Interest expense
50 76 97
Investment and other income - net
(96) (29) (15)
_________________________________________________________________
______________________________
Total
(46) 47 82
_________________________________________________________________
______________________________
Income Before Income Taxes, Minority Interest and
Cumulative Effect of Accounting Changes
2,002 1,947 1,877
Provision for Income Taxes
707 687 691
Minority Interest
32 24 32
_________________________________________________________________
______________________________
Income Before Cumulative Effect of Accounting Changes
1,263 1,236 1,154
Cumulative Effect of Accounting Changes
--- (3) ---
_________________________________________________________________
______________________________
Net Income
$ 1,263 $ 1,233 $ 1,154
_________________________________________________________________
______________________________
Per-Share Amounts:
Income Before Cumulative Effect of Accounting Changes
$ 5.82 $ 5.65 $ 5.26
Cumulative Effect of Accounting Changes
--- (0.02) ---
_________________________________________________________________
______________________________
Net Income
$ 5.82 $ 5.63 $ 5.26
_________________________________________________________________
______________________________
Average Shares Outstanding
217.2 219.1 219.6
_________________________________________________________________
______________________________
The accompanying Notes to Financial Statements are an integral
part of this statement.
Consolidated Balance Sheet
Minnesota Mining and Manufacturing Company and Subsidiaries
_________________________________________________________________
______________________
As of December 31, 1993 and 1992
1993 1992
_____________________________________________
(Dollars in millions)
_________________________________________________________________
_______________________
Assets
Current Assets
Cash and cash equivalents
$ 274 $ 382
Other securities
382 340
Accounts receivable - net
2,610 2,394
Inventories
2,401 2,315
Other current assets
696 778
_________________________________________________________________
__________
Total current assets
6,363 6,209
Investments
455 452
Property, Plant and Equipment - net
4,830 4,792
Other Assets
549 502
_________________________________________________________________
__________
Total
$12,197 $11,955
_________________________________________________________________
__________
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable
$ 878 $ 836
Payroll
331 310
Income taxes
290 299
Short-term debt
697 739
Other current liabilities
1,086 1,057
_________________________________________________________________
__________
Total current liabilities
3,282 3,241
Other Liabilities
1,607 1,428
Long-Term Debt
796 687
Stockholders' Equity - net
6,512 6,599
Shares outstanding - 1993: 214,739,319;
1992: 219,034,050
_________________________________________________________________
__________
Total
$12,197 $11,955
_________________________________________________________________
__________
The accompanying Notes to Financial Statements are
an integral part of this statement.
Consolidated Statement of Cash Flows
Minnesota Mining and Manufacturing Company and Subsidiaries
_________________________________________________________________
____________________________
For the Years Ended December 31, 1993, 1992 and 1991
1993 1992* 1991
____________________________________________________
(Dollars in millions)
_________________________________________________________________
________________________
Cash Flows from Operating Activities
Net income
$1,263 $1,233 $1,154
Adjustments to reconcile net income
to net cash provided by operating activities:
Legal settlement
129 (129) ---
Special charges
(29) 115 ---
Cumulative effect of accounting changes-
SFAS Nos. 106 and 109
103 ---
Depreciation
976 1,004 884
Amortization
100 83 85
Deferred income taxes
(86) (111) (117)
Accounts receivable
(327) (142) (155)
Inventories
(161) (78) (21)
Other working capital changes
226 199 79
_________________________________________________________________
___________________________
Net cash provided by operating activities
2,091 2,277 1,909
Cash Flows from Investing Activities
Capital expenditures
(1,112) (1,318) (1,326)
Disposals of property, plant and equipment
53 78 76
Acquisitions and other investments
(71) (59) (35)
Proceeds from divestitures and investments
38 63 88
_________________________________________________________________
___________________________
Net cash used in investing activities
(1,092) (1,236) (1,197)
Cash Flows from Financing Activities
Net change in short-term debt
48 (83) 57
Repayment of long-term debt
(80) (187) (162)
Proceeds from long-term debt
150 139 140
Purchases of treasury stock
(706) (247) (240)
Reissuances of treasury stock
181 177 139
Payment of dividends
(721) (701) (685)
Other
- - --- --- 65
_________________________________________________________________
___________________________
Net cash used in financing activities
(1,128) (902) (686)
Effect of exchange rate changes on cash
21 (15) (62)
_________________________________________________________________
___________________________
Net increase (decrease) in cash and cash equivalents
(108) 124 (36)
Cash and cash equivalents at beginning of year
382 258 294
_________________________________________________________________
___________________________
Cash and cash equivalents at end of year $
274 $ 382 $ 258
_________________________________________________________________
___________________________
*Includes cash flows of international companies for a
14-month period
November 1, 1991 to December 31, 1992. See accounting
changes note on
page 20 for details.
The accompanying Notes to Financial Statements are an
integral part of
this statement.
Notes to Financial Statements
Accounting Policies
Consolidation: All significant subsidiaries are
consolidated.
Unconsolidated subsidiaries and affiliates are included on the
equity basis.
Cash and Cash Equivalents: Cash and cash equivalents consist
of cash and
temporary investments with maturities of three months or less
when purchased.
Other Securities: Other securities consist of marketable
securities and
interest-bearing bank deposits with varied maturity dates.
These securities
are employed in the company's banking, captive insurance and
cash management
operations. The securities are stated at cost, which
approximates fair value.
Inventories: Inventories are stated at lower of cost or
market, with cost
generally determined on a first-in, first-out basis.
Investments: Investments primarily include assets from
captive insurance
and banking operations and from venture capital
investments. These
investments are stated at cost, which approximates fair value.
Other Assets: Other assets include goodwill, patents, other
intangibles,
deferred taxes and other noncurrent assets. Other assets are
periodically
reviewed for impairment to ensure that they are
appropriately valued.
Goodwill is generally amortized on a straight-line basis over 10
years. Other
intangible items are amortized on a straight-line basis over
their estimated
economic lives.
Deferred Income Taxes: Deferred income taxes arise from
differences in
basis for tax and financial-reporting purposes.
Revenue Recognition: Revenue is recognized upon shipment
of goods to
customers and upon performance of services.
Depreciation: Depreciation of property, plant and equipment
is generally
computed on a straight-line basis over the estimated useful
lives of these
assets.
Research and Development: Research and development costs
are charged to
operations as incurred and totaled $1.030 billion in 1993,
$1.007 billion in
1992 and $914 million in 1991.
Foreign Currency Translation: Local currencies are generally
considered the
functional currencies outside the United States, except in
countries with
highly inflationary economies. Assets and liabilities are
translated at year-
end exchange rates for operations in local currency
environments. Income and
expense items are translated at average rates of exchange
prevailing during
the year. Translation adjustments are recorded as a
component of
stockholders' equity.
For operations in countries with highly inflationary
economies, certain
financial statement amounts are translated at historical
exchange rates, with
all other assets and liabilities translated at year-end exchange
rates. These
translation adjustments are reflected in the results of
operations. They
decreased net income by $12 million in 1993, increased net
income by $10
million in 1992 and decreased net income by $6 million in 1991.
24
Accounting Changes
Effective January 1, 1992, 3M's international companies
changed their
reporting period from a fiscal year ending October 31 to a
calendar year
ending December 31. The change was made to aid worldwide
business planning,
increase efficiency and reflect the global nature of the
company's business.
The international companies' results of operations for the
period November 1
to December 31, 1991, are shown in the 1992 Consolidated
Statement of Income
as a cumulative effect of an accounting change. The cash
flows of the
international companies for the 14-month period November 1,
1991, to December
31, 1992, are reflected in the 1992 Consolidated Statement of
Cash Flows.
Effective January 1, 1992, the company adopted Statement
of Financial
Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement
Benefits Other Than Pensions." This statement requires that
the cost of
providing postretirement benefits be accrued over an
employee's service
period. In implementing this standard, the company was required
to accrue the
unfunded obligation. The company had accrued and funded -
under a different
actuarial methodology - a substantial amount of these benefits
since 1977. In
implementing this standard, the company elected to record
the transition
obligation using the immediate recognition option.
Also effective January 1, 1992, the company adopted
SFAS No. 109,
"Accounting for Income Taxes." This statement requires an asset
and liability
approach for financial accounting and reporting of income
taxes. Under this
approach, deferred taxes are recognized for the estimated
taxes ultimately
payable or recoverable based on enacted tax law. Changes in
enacted tax rates
will be reflected in the tax provision as they occur.
Adoption of these accounting changes, in aggregate, did not
have a material
impact on 1992 results of operations.
The table below shows the components of the cumulative effect
of accounting
changes.
_________________________________________________________________
_____________
(Millions, except per-share data)
1992
_________________________________________________________________
_____________
Amount
Per Share
_________________________________________________________________
_____________
Cumulative effect of change in:
Reporting period for international
companies, net of $25 million in
taxes (including tax benefits from
revaluation of certain fixed assets
in Italy) $ 100
$ 0.46
Accounting for other
postretirement benefits, net of
$107 million in taxes (183)
(0.84)
Accounting for income taxes 80
0.36
_________________________________________________________________
_____________
Total $ (3)
$(0.02)
_________________________________________________________________
_____________
Legal Settlement and Special Charges
In December 1992, Johnson & Johnson agreed to pay 3M $129
million in
settlement of a patent lawsuit involving 3M orthopedic casting
materials. 3M
received payment in January 1993.
In 1992, 3M recorded $115 million of special charges
designed to enhance
competitiveness and productivity. About 75 percent of these
charges related
to asset write-downs, including rationalization of manufacturing
operations.
25
Supplemental Balance Sheet Information
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
Accounts receivable
_________________________________________________________________
_____________
Accounts receivable $ 2,730 $
2,506
Less allowances 120
112
_________________________________________________________________
_____________
Accounts receivable - net $ 2,610 $
2,394
_________________________________________________________________
_____________
Inventories
_________________________________________________________________
_____________
Finished goods $ 1,246 $
1,224
Work in process 604
586
Raw materials and supplies 551
505
_________________________________________________________________
_____________
Total inventories $ 2,401 $
2,315
_________________________________________________________________
_____________
Property, plant and equipment - at cost
_________________________________________________________________
_____________
Land $ 258 $
241
Buildings and leasehold improvements 2,572
2,463
Machinery and equipment 8,305
7,732
Construction in progress 353
392
_________________________________________________________________
_____________
$11,488
$10,828
Less accumulated depreciation 6,658
6,036
_________________________________________________________________
_____________
Property, plant and equipment - net $ 4,830 $
4,792
_________________________________________________________________
_____________
Short-term debt
_________________________________________________________________
_____________
Commercial paper $ 193 $
165
Long-term debt - current portion 79
148
Other borrowings 425
426
_________________________________________________________________
_____________
Total short-term debt $ 697 $
739
_________________________________________________________________
_____________
Other current liabilities
_________________________________________________________________
_____________
Deposits - banking operations $ 291 $
259
Other current liabilities 795
798
_________________________________________________________________
_____________
Total other current liabilities $ 1,086 $
1,057
_________________________________________________________________
_____________
Other liabilities
_________________________________________________________________
_____________
Minority interest in subsidiaries $ 376 $
314
Nonpension postretirement benefits 386
366
Other liabilities 845
748
_________________________________________________________________
_____________
Total other liabilities $ 1,607 $
1,428
_________________________________________________________________
_____________
The carrying amount of short-term debt approximates fair value.
Deposits - banking operations - are primarily demand deposits
and,
as such, the carrying amount approximates fair value.
Leases
Rental expense under operating leases was $141 million in 1993,
$140 million
in 1992 and $141 million in 1991.
The table below sets forth minimum payments under operating
leases with
noncancelable terms in excess of one year
as of year-end 1993.
_________________________________________________________________
______________
After
(Millions) 1994 1995 1996 1997 1998
1998 Total
_________________________________________________________________
______________
Minimum lease payments $70 $53 $39 $21 $16
$88 $287
_________________________________________________________________
______________
Long-Term Debt
Employee Stock Ownership Plan: In 1989, the company
established an Employee
Stock Ownership Plan (ESOP). The ESOP borrowed $548 million.
Because the
company has guaranteed repayment of the ESOP debt, the debt
and related
unearned compensation are recorded on the Consolidated Balance
Sheet.
Medium-Term Notes: 3M maintains a shelf registration with
the Securities
and Exchange Commission that provides the means to offer
medium-term notes not
to exceed $601 million. As of December 31, 1993, $502 million
was available
for future financial needs. The company entered into
interest rate swap
agreements to achieve variable interest rates below U.S.
commercial paper
rates for notes outstanding. The effective rate of
these agreements
approximated 2.5 percent at year-end 1993.
Other Borrowings: These are primarily borrowings of 3M's
international
companies and municipal bond issues in the United States.
Interest rates
range mainly from 2.3 to 11.0 percent.
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
ESOP debt guarantee, 8.13-8.27%, due 1995-2004 $469
$490
Eurobond, 4.81%, due 1998 114
- - ---
Medium-term notes, due 1995 75
115
Other borrowings, due 1995-2025 138
82
_________________________________________________________________
_____________
Total long-term debt $796
$687
_________________________________________________________________
_____________
Maturities of long-term debt for the next five years are as
follows: 1994,
$79 million; 1995, $168 million; 1996, $44 million; 1997, $41
million; and
1998, $159 million.
Interest payments included in the Consolidated Statement of
Cash Flows
totaled $53 million in 1993, $88 million in 1992 and $118
million in 1991.
For the calendar year 1992, interest payments were $79 million.
The company estimates that the fair value of long-term
debt is not
materially different than the carrying amount of this debt.
Other Financial Instruments
The company has entered into interest rate and currency
swaps, as well as
forward interest rate agreements, with face amounts of $605
million and $308
million, respectively, as of December 31, 1993, and 1992. The
company uses
27
these instruments to manage risk from interest rate and currency
fluctuations
and to lower its cost of borrowing. The unrealized gains
and losses are
deferred until the underlying transactions are realized. As of
December 31,
1993, the unrealized gains and losses were not material.
The company also had foreign exchange forward and option
contracts with face
amounts of $704 million and $785 million, respectively, at
December 31, 1993,
and 1992. The company uses these financial instruments
primarily to hedge
transactions denominated in foreign currencies, thereby
reducing risk from
exchange rate fluctuations in the regular course of its global
business. The
net unrealized gain on these contracts as of December 31,
1993, was not
material.
Income Taxes
_________________________________________________________________
______________
Income Before Income Taxes
_________________________________________________________________
______________
(Millions) 1993 1992
1991
_________________________________________________________________
______________
U.S. $1,390 $1,301
$1,136
International 612 646
741
_________________________________________________________________
______________
Total $2,002 $1,947
$1,877
_________________________________________________________________
______________
Provision for Income Taxes
_________________________________________________________________
______________
(Millions) 1993 1992
1991
_________________________________________________________________
______________
Currently payable
Federal $430 $371
$396
State 74 78
74
International 292 339
343
Deferred
Federal (66) (63)
(110)
State (5) (6)
(9)
International (18) (32)
(3)
_________________________________________________________________
______________
Total $707 $687
$691
_________________________________________________________________
______________
Net deferred tax assets totaled $439 million ($293 million
current) and net
deferred tax liabilities totaled $98 million ($6 million
current) at year-end
1993. The major components of deferred taxes include benefit
costs not
currently deductible of $336 million and accelerated
depreciation for tax
purposes of $362 million.
Income tax payments included in the Consolidated Statement of
Cash Flows
totaled $802 million in 1993, $743 million in 1992 and $867
million in 1991.
For calendar year 1992, income tax payments were $714 million.
At December 31, 1993, there were approximately $2.850 billion of
retained
earnings attributable to our international companies that are
considered to
be permanently invested. No provision has been made for taxes
that might be
payable if these earnings were remitted to the United States.
It is not
practical to determine the amount of incremental tax that might
arise should
these earnings be remitted.
_________________________________________________________________
______________________
Reconciliation of Effective Income Tax Rate 1993
1992 1991
_________________________________________________________________
______________________
Statutory U.S. tax rate 35.0%
34.0% 34.0%
State income taxes - net 2.2
2.5 2.3
International taxes 3.0
4.4 4.7
All other - net (4.9)
(5.6) (4.2)
_________________________________________________________________
______________________
Effective worldwide tax rate 35.3%
35.3% 36.8%
_________________________________________________________________
______________________
[TEXT]
Stockholders' Equity
Common stock, without par value, of 500,000,000 shares is
authorized, with
236,008,264 shares issued in 1993, 1992 and 1991. Treasury
shares at year-end
totaled 21,268,945 in 1993, 16,974,214 in 1992 and 16,867,905
in 1991. This
stock is reported at cost. Preferred stock, without par value,
of 10,000,000
shares is authorized but unissued. A two-for-one stock
split will be
distributed on or aboutApril 8, 1994to shareholders of recordon
March 15,1994.
_________________________________________________________________
___________________________________________
ESOP
Common Retained
Cumulative Unearned Treasury
(Dollars in millions) Stock Earnings
Translation Compensation Stock Total
_________________________________________________________________
___________________________________________
Balance, December 31, 1990 $296 $7,106
$ 175 $(530) $ (937) $6,110
Net income 1,154
1,154
Dividends paid ($3.12 per share) (685)
(685)
Reacquired stock (2,733,416 shares)
(240) (240)
Issuances pursuant to stock option and
benefit plans (2,040,372 shares) (39)
178 139
Amortization of unearned compensation
14 14
Translation adjustments
(199) (199)
_________________________________________________________________
___________________________________________
Balance, December 31, 1991 $296 $7,536
$ (24) $(516) $ (999) $6,293
Net income 1,233
1,233
Dividends paid ($3.20 per share) (701)
(701)
Reacquired stock (2,561,689 shares)
(247) (247)
Issuances pursuant to stock option and
benefit plans (2,455,380 shares) (56)
233 177
Amortization of unearned compensation
18 18
Translation adjustments
(174) (174)
_________________________________________________________________
___________________________________________
Balance, December 31, 1992 $296 $8,012
$(198) $(498) $(1,013) $6,599
Net income 1,263
1,263
Dividends paid ($3.32 per share) (721)
(721)
Reacquired stock (6,580,868 shares)
(706) (706)
Issuances pursuant to stock option and
benefit plans (2,286,137 shares) (54)
245 191
Amortization of unearned compensation
19 19
Translation adjustments
(133) (133)
_________________________________________________________________
___________________________________________
Balance, December 31, 1993 $296 $8,500
$(331) $(479) $(1,474) $6,512
_________________________________________________________________
___________________________________________
[TEXT]
Business Sectors
Financial information relating to the company's business sectors
for the years
ended December 31, 1993, 1992 and 1991 appears below. 3M is
an integrated
enterprise characterized by substantial intersector
cooperation, cost
allocations and inventory transfers. Therefore, management does
not represent
that these sectors, if operated independently, could earn the
operating income
shown.
_________________________________________________________________
___________________________________
Information,
Industrial Imaging and
Life Eliminations Total
(Millions) and Consumer Electronic
Sciences and Other Company
_________________________________________________________________
____________________________________
Net Sales 1993 $5,350 $4,520
$4,132 $ 18 $14,020
1992 5,215 4,599
4,026 43 13,883
1991 5,003 4,544
3,748 45 13,340
_________________________________________________________________
____________________________________
Operating Income 1993 849 271
846 (10) 1,956
1992 826 238
926 4 1,994
1991 852 383
769 (45) 1,959
_________________________________________________________________
____________________________________
Identifiable Assets 1993 3,776 3,460
2,854 144 10,234
1992 3,734 3,264
2,712 172 9,882
1991 3,592 3,414
2,603 127 9,736
_________________________________________________________________
____________________________________
Depreciation 1993 341 366
249 20 976
1992 323 356
238 33 950
1991 307 329
224 24 884
_________________________________________________________________
____________________________________
Capital Expenditures 1993 399 388
327 (2) 1,112
1992 437 444
327 17 1,225
1991 462 477
369 18 1,326
_________________________________________________________________
____________________________________
1 Includes a legal settlement that increased operating income
for the Life
Sciences Sector by $129 million. Also includes special
charges of $115
million, of which$81 millionwas in theInformation, Imaging
andElectronic
Sector.
2 Excludes certaincorporate assets,primarilycash andcash
equivalents,other
securities, deferred income taxes, certain other current
assets and
investments.
3 Excludes $93 millionof capitalexpenditures and $54million
ofdepreciation
for international companies from November 1 to December
31, 1991. See
accounting changes note on page 20 for details.
[TEXT]
Geographic Areas
Information in the table below is presented on the same basis
as utilized by
the Company to manage the business. Export sales and
certain income and
expense items are reported in the geographic area where the
final sale to
customers is made rather than where the transaction originates.
_________________________________________________________________
____________________________
United Asia
Other Elimin- Total
(Millions) States Europe Pacific
Areas ations Company
_________________________________________________________________
____________________________
Net Sales to 1993 $7,126 $3,646 $2,154
$1,094 $14,020
Customers 1992 6,922 4,068 1,847
1,046 13,883
1991 6,738 3,889 1,718
995 13,340
_________________________________________________________________
____________________________
Transfers 1993 1,393 172 28
146 $(1,739) ---
Between 1992 1,273 176 31
119 (1,599) ---
Geographic Areas 1991 1,135 156 37
105 (1,433) ---
_________________________________________________________________
____________________________
Operating 1993 940 376 429
211 1,956
Income 1992 945 489 368
192 1,994
1991 802 618 362
177 1,959
_________________________________________________________________
____________________________
Identifiable 1993 5,875 2,633 1,531
710 (515) 10,234
Assets 1992 5,634 2,824 1,333
660 (569) 9,882
1991 5,548 2,912 1,214
555 (493) 9,736
_________________________________________________________________
____________________________
1 Includes Canada, Latin America and Africa.
2 Includesa legal settlement that increased operating
income in the United
Statesby $129 million. Also includesspecial charges of
$115 million, of
which $74 million was in Europe.
3 Excludescertain corporateassets, primarilycash andcash
equivalents,other
securities, deferred income taxes, certain other
current assets and
investments.
[TEXT]
At year-end,net assetsof companiesoutside the UnitedStates
totaled$2.963
billion in 1993, $2.998 billion in 1992 and $2.835 billion
in 1991.
In1993, thecompany changed thebasis ofpresenting
exportsales and certain
income andexpense items in theabove table. Operating income
in1993 under
the prior methodology would have been $1,341 million, $205
million, $277
million and $133 million, respectively.
Retirement Plans
3M has various company-sponsored retirement plans covering
substantially all
U.S. employees and many employees outside the United States.
Pension benefits
are based principally on an employee's years of service and
compensation near
retirement. Plan assets are invested in common stocks,
fixed-income
securities, real estate and other investments.
The company's funding policy is to deposit with an
independent trustee
amounts at least equal to those required by law. A trust fund
is maintained
to provide pension benefits to plan participants and their
beneficiaries. In
addition, a number of plans are maintained by deposits
with insurance
companies.
The charge to income relating to these plans was $203 million
in 1993, $178
million in 1992 and $133 million in 1991.
_________________________________________________________________
________________________________________________________
Net Pension Cost U.S.
Plan International Plans
_________________________________________________________________
________________________________________________________
(Millions) 1993
1992 1991 1993 1992 1991
_________________________________________________________________
________________________________________________________
Service cost (employee benefits
earned during the year) $ 110 $
108 $ 89 $ 86 $73 $65
Interest cost on projected benefit
obligation 276
252 228 80 78 73
Return on assets - actual (430)
(221) (602) (185) (73) (112)
Net amortization and deferral 154
(38) 347 112 (1) 45
_________________________________________________________________
________________________________________________________
Net pension cost $ 110 $
101 $ 62 $ 93 $77 $71
_________________________________________________________________
________________________________________________________
Assumptions:
Discount rate at year-end 7.25%
8.00% 8.00% 7.26% 7.91% 8.07%
Rate of increase in compensation levels 5.00%
6.25% 6.25% 5.31% 6.40% 6.60%
Long-term rate of return on assets 9.00%
9.00% 9.00% 7.64% 8.23% 8.44%
_________________________________________________________________
________________________________________________________
_________________________________________________________________
________________________________________________________
Funded Status of Pension Plans
U.S. Plan International Plans
_________________________________________________________________
________________________________________________________
(Millions)
1993 1992 1993 1992
_________________________________________________________________
________________________________________________________
Actuarial present value of:
Vested benefit obligation $2,797
$2,490 $ 875 $790
Non-vested benefit obligation 435
372 65 58
_________________________________________________________________
________________________________________________________
Accumulated benefit obligation $3,232
$2,862 $ 940 $848
_________________________________________________________________
________________________________________________________
Projected benefit obligation $3,921
$3,442 $1,279 $1,179
Plan assets at fair value 3,473
3,141 1,207 996
_________________________________________________________________
________________________________________________________
Plan assets less than the projected
benefit obligation $
(448) $ (301) $ (72) $(183)
Unrecognized net transition asset
(224) (261) 10 10
Other adjustments and unrecognized items 492
435 (16) 80
Accrued pension expense recognized in
the Consolidated Balance Sheet $
(180) $ (127) $ (78) $(93)
_________________________________________________________________
________________________________________________________
Other Postretirement Benefits
The company provides health care and life insurance benefits for
substantially
all of its U.S. employees who reach retirement age while
employed by the
company. The company has set aside funds with an
independent trustee for
these postretirement benefits and makes periodic contributions
to the plan.
The assets held by the trustee are invested in common stocks and
fixed-income
securities. Employees outside the United States are covered
principally by
government-sponsored plans and the cost of company-provided
plans for these
employees is not material.
The table below sets forth the components of the net periodic
postretirement
benefit cost and a reconciliation of the funded status of the
postretirement
benefit plan for U.S. employees.
Net Periodic Postretirement Benefit Cost
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
Service cost $ 23
$ 21
Interest cost 53
49
Return on plan assets - actual
(23) (20)
Net amortization and deferral 1
---
_________________________________________________________________
_____________
Total $ 54
$ 50
_________________________________________________________________
_____________
Funded Status of Postretirement Benefits Plan
_________________________________________________________________
_____________
(Millions) 1993
1992
_________________________________________________________________
_____________
Fair value of plan assets $335
$314
_________________________________________________________________
_____________
Accumulated postretirement
benefit obligation:
Retirees 248
193
Fully eligible active plan participants 153
139
Other active plan participants 378
348
_________________________________________________________________
_____________
Benefit obligation 779
680
_________________________________________________________________
_____________
Plan assets less benefit obligation
(444) (366)
Adjustments and unrecognized items 58
---
Accrued postretirement expense recognized in the
Consolidated Balance Sheet $(386)
$(366)
The accumulated postretirement benefit obligation and related
benefit cost
are determined through the application of relevant actuarial
assumptions. The
company anticipates its health care cost trend rate to slow
from 7.5 percent
in 1994 to 5.0 percent in 2003, after which the trend rate is
expected to
stabilize. The effect of a one percentage point increase in
the assumed
health care cost trend rate for each future year would
increase the benefit
obligation by $57 million and the current year benefit expense
by $4 million.
Other actuarial assumptions include an expected long-term rate
of return on
plan assets of 9.0 percent (before taxes applicable to a portion
of the return
on plan assets), and a discount rate of 7.25 percent.
The charge to income relating to these plans was $54 million
in 1993, $50
million in 1992 and $51 million in 1991.
Other Postemployment Benefits
In 1992, the Financial Accounting Standards Board issued
Statement No. 112,
"Employers' Accounting for Postemployment Benefits."
Postemployment benefits
include, but are not limited to, disability, severance and
health care
benefits. 3M will adopt this standard in the first quarter
of 1994. This
adoption will have a diminimus effect on the company's results of
operations.
Employee Stock Ownership Plan
The company maintains an Employee Stock Ownership Plan
(ESOP) for
substantially all full-time U.S. employees. This plan was
established in 1989
as a cost-effective way of funding certain employee
retirement savings
benefits, including the company's matching contributions under
its 401(k)
employee savings plan. The ESOP borrowed $548 million and used
the proceeds
to purchase 7.7 million shares of the company's common stock,
previously held
in treasury. The debt is being serviced by dividends on
stock held by the
ESOP and by company contributions. These contributions are
reported as a
benefit expense.
Employee Savings Plan
The company sponsors an employee savings plan under Section
401(k) of the
Internal Revenue Code. This plan covers substantially all
full-time U.S.
employees. The company matches employee contributions of up to
6 percent of
compensation at rates ranging from 35 to 85 percent, depending
upon company
performance. Amounts charged against income were $29 million
in 1993 and
1992, and $28 million in 1991.
General Employees' Stock Purchase Plan
Participants in the General Employees' Stock Purchase Plan are
granted options
at 85 percent of market value at the date of grant. At
December 31, 1993,
there were 23,216 participants in the plan, with 58,058
employees eligible to
participate. Options must be exercised within 27 months from
date of grant.
Shares
Price Range
_________________________________________________________________
_____________
Under Option-
January 1, 1993 223,179
$66.94-88.30
Granted 818,005
83.57-96.59
Exercised (777,102)
66.94-96.59
Cancelled (27,633)
66.94-96.59
_________________________________________________________________
_____________
Under Option-
December 31, 1993 236,449
$73.90-96.59
_________________________________________________________________
_____________
Shares available for grant-
December 31, 1993 8,803,215
_________________________________________________________________
_____________
Management Stock Ownership Program
Management stock options are granted at market value at the date
of grant. At
December 31, 1993, there were 4,238 participants in the plan.
All outstanding
options expire between May 1994 and May 2003.
Shares
Price Range
_________________________________________________________________
_____________
Under Option-
January 1, 1993 9,400,910
$38.73-103.60
Granted 2,138,014
97.85-116.15
Exercised (1,361,733)
38.73-103.60
Cancelled (85,844)
38.73-113.25
_________________________________________________________________
_____________
Under Option-
December 31, 1993 10,091,347
$38.73-116.15
_________________________________________________________________
_____________
Options Exercisable-
December 31, 1993 8,133,231
$38.73-115.45
_________________________________________________________________
_____________
Shares available for grant-
December 31, 1993 10,869,705
_________________________________________________________________
_____________
Quarterly Data (Unaudited)
_________________________________________________________________
__________
(Millions, except
per-share data) First Second Third Fourth
Year
_________________________________________________________________
_________
Net Sales
1993 $3,517 $3,540 $3,481 $3,482
$14,020
1992 3,438 3,519 3,551 3,375
13,883
_________________________________________________________________
_________
Cost of Goods Sold
1993 $2,112 $2,131 $2,167 $2,119
$8,529
1992 2,058 2,115 2,134 2,039
8,346
_________________________________________________________________
_________
Income Before Cumulative Effect of Accounting Changes
1993 $330 $331 $316 $286
$1,263
1992 306 317 324
289 1,236
Per Share
1993 $1.51 $1.51 $1.47 $1.33
$5.82
1992 1.40 1.45 1.48
1.32 5.65
_________________________________________________________________
_________
Net Income
1993 $330 $331 $316 $286
$1,263
1992 303 317 324
289 1,233
Per Share
1993 $1.51 $1.51 $1.47 $1.33
$5.82
1992 1.38 1.45 1.48
1.32 5.63
_________________________________________________________________
_________
Stock Price Comparisons (New York Stock Exchange Composite
Transactions)
1993 High $111.75 $117.00 $111.25 $113.50
$117.00
Low 97.25 104.88 102.25 101.50
97.25
1992 High 98.75 97.38 103.75 107.00
107.00
Low 87.38 85.50 95.75 97.00
85.50
_________________________________________________________________
_________
[FN]
1 Includes a legal settlement and special charges, which
together
added $9 million, or 4 cents a share, to net income.
Item 9. Disagreements on Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Item 13. Certain Relationships and Related Transactions.
The information called for by Items 10 through 13 are
omitted pursuant to
general instruction G(3). The registrant will file with the
Commission a
definitive proxy statement pursuant to Regulation 14A before
April 30, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) The financial statements filed as part of this report are
listed in the
index to financial statements on page 14.
Index to Financial Statement Schedules
Reference(pages)
Form 10-K
________________
Financial Statement Schedules for the years ended
December 31, 1993, 1992 and 1991:
V Property, Plant and
Equipment.......................33
VI Accumulated Depreciation of Property, Plant
and Equipment
......................................34
IX Short-Term Borrowings
.............................35
X Supplementary Income Statement
Information
..........................................35
All other schedules are omitted because of the
absence of the
conditions under which they are required or because
the required
information is included in the financial statements
or the notes
thereto.
(b) Reports on Form 8-K:
3M was not required to file any reports on Form 8-K for the
quarter
ended December 31, 1993.
(c) Exhibits:
Incorporated by Reference:
Incorporated
by Reference
in the
Report From
(3) Restated certificate of incorporation Exhibit (3)
to
and bylaws, amended to and Report Form
10-Q
including amendments of for period
ended
May 12, 1987. June 30,
1987.
(4) Instruments defining the rights of security
holders, including debentures:
(a) common stock. Exhibit (3)
above
(b) medium term notes.
Registration Nos.
33-29329
and 33-48089
on Form
S-3.
(10) Management contracts, management
remuneration:
(a) management stock ownership program. Exhibit 4
of
Registration No.
33-49842
on Form S-8
(b) profit sharing plan, performance Written
description
unit plan and other compensation contained
in issuer's
arrangements. proxy
statement for
the 1994
annual
shareholders meeting.
Reference
(pages)
Form
10-K
Submitted herewith:
(11) Computation of per share earnings. 36
(12) Calculation of ratio of earnings
to fixed charges. 37
(22) Subsidiaries of the registrant. 38
(24) Consent of experts. 39
(25) Power of attorney. 40
MINNESOTA MINING AND MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
SCHEDULES
(Dollars in Millions)
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
COLUMN A COLUMN B
COLUMN C COLUMN D COLUMN E COLUMN F
BALANCE
AT BALANCE
BEGINNING
ADDITIONS OTHER AT END OF
CLASSIFICATION OF YEAR
AT COST RETIREMENTS CHANGES* YEAR
______________________________________
__________ __________ ___________ _________ _________
For the Year Ended December 31, 1993:
Land ................................ $
241 $ 18 $ 4 $ 3 $ 258
Buildings and Leasehold
Improvements ......................
2,463 145 24 (12) 2,572
Machinery and Equipment .............
7,732 988 330 (85) 8,305
Construction in Progress.............
392 (39) ** --- --- 353
Total .............................
$10,828 $ 1,112 $ 358 $ (94) $11,488
For the Year Ended December 31, 1992:
Land ................................ $
196 $ 20 $ 2 $ 27 $ 241
Buildings and Leasehold
Improvements ......................
2,250 261 21 (27) 2,463
Machinery and Equipment .............
7,182 1,078 387 (141) 7,732
Construction in Progress ............
452 (41)** - (19) 392
Total .............................
$10,080 $ 1,318 *** $ 410 $ (160) $10,828
For the Year Ended December 31, 1991:
Land ................................ $
189 $ 11 $ 2 $ (2) $ 196
Buildings and Leasehold
Improvements .....................
2,031 274 22 (33) 2,250
Machinery and Equipment .............
6,708 1,026 403 (149) 7,182
Construction in Progress ............
455 15** 1 (17) 452
Total ............................. $
9,383 $ 1,326 $ 428 $ (201) $10,080
_________________________________________________________________
________
*Translation adjustments, acquisitions, and transfers between
accounts.
**Net increase (decrease) in construction in progress.
***Includes $93 million of capital expenditures for the
international companies from November 1 to
December 31, 1991.
Included in the retirements column are asset write-downs relating
to special charges.
41
MINNESOTA MINING AND MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
SCHEDULES
(Dollars in Millions)
SCHEDULE VI
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
COLUMN A COLUMN B COLUMN
C COLUMN D COLUMN E COLUMN F
BALANCE AT
ADDITIONS BALANCE
BEGINNING CHARGED
OTHER AT END OF
CLASSIFICATION OF YEAR TO
EXPENSE RETIREMENTS CHANGES* YEAR
_____________________________________ ___________
___________ ___________ _________ _________
For the Year Ended December 31, 1993:
Buildings and Leasehold
Improvements ................ $ 1,034 $ 121
$ 15 $ (5) $ 1,135
Machinery and Equipment ....... 5,002 855
289 (45) 5,523
Total ...................... $ 6,036 $ 976
$ 304 $ (50) $ 6,658
For the Year Ended December 31, 1992:
Buildings and Leasehold
Improvements ............... $ 934 $ 122
$ 15 $ (7) $ 1,034
Machinery and Equipment ...... 4,480 882
293 (67) 5,002
Total ....................... $ 5,414 $
1,004** $ 308 $ (74) $ 6,036
For the Year Ended December 31, 1991:
Buildings and Leasehold
Improvements ............... $ 866 $ 98
$ 13 $ (17) $ 934
Machinery and Equipment ....... 4,128 786
333 (101) 4,480
Total ...................... $ 4,994 $ 884
$ 346 $ (118) $ 5,414
* Translation adjustments and transfers between accounts.
** Includes $54 million of depreciation for the international
companies from November 1 to December 31, 1991.
NOTE: Estimated useful lives range from two to forty years.
MINNESOTA MINING AND MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
SCHEDULES
(Dollars in Millions)
SCHEDULE IX
SHORT-TERM BORROWINGS*
COLUMN A COLUMN B COLUMN C
COLUMN D COLUMN E COLUMN F
WEIGHTED
MAXIMUM AVERAGE AMOUNT WEIGHTED AVERAGE
BALANCE AVERAGE
MONTH-END BALANCE OUTSTANDING INTEREST RATE
AT END OF INTEREST
OUTSTANDING DURING DURING THE DURING THE
DESCRIPTION PERIOD RATE
THE PERIOD PERIOD** PERIOD***
________________________ _________ _________
__________________ ___________ _____________
1993: Short-Term
Debt (U.S.).. $317 3.5%
$510 $326 3.9%
Short-Term Debt
(International).. $301 7.4%
$446 $245 7.2%
1992: Short-Term
Debt (U.S.) .......... $189 4.5%
$387 $278 4.4%
Short-Term Debt
(International)****.. $402 6.5%
$514 $326 11.6%
1991: Short-Term
Debt (U.S.) .......... $229 4.6%
$470 $287 6.1%
Short-Term Debt
(International).. $343 11.6%
$407 $345 10.7%
The company does not maintain formal lines of credit, however,
the company believes it has sufficient borrowing sources
should the need arise.
* Excluding current portion of long-term debt.
** Average of month-end balances outstanding during each year.
*** Interest expense for the year on short-term borrowings
divided by average short-term borrowings outstanding during the
year.
**** Includes short-term borrowings for international companies
for the 14-month period November 1, 1991 to December 31, 1992.
[TEXT]
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
COLUMN A COLUMN B
_________________________________________________________________
____
CHARGED TO COSTS
AND EXPENSES
ITEM 1993 1992*
1991
__________________________________ ____ ____
____
Maintenance and Repairs ................ $463 $456
$420
Advertising Costs ...................... $161 $172
$152
* Includes expenses for the 12-month period ending December 31,
1992.