EXHIBIT 12
3M COMPANY AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions)
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| 2006 |
| 2005 |
| 2004 |
| 2003 |
| 2002 |
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EARNINGS |
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Income before income taxes, minority interest, and cumulative effect of accounting change* |
| $ | 5,625 |
| $ | 4,828 |
| $ | 4,303 |
| $ | 3,448 |
| $ | 2,775 |
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Add: |
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Interest expense |
| 139 |
| 101 |
| 88 |
| 103 |
| 100 |
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Interest component of the ESOP benefit expense |
| 8 |
| 10 |
| 12 |
| 14 |
| 16 |
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Portion of rent under operating leases representative of the interest component |
| 70 |
| 64 |
| 60 |
| 53 |
| 45 |
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Less: |
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Equity in undistributed income of 20-50% owned companies |
| 6 |
| 4 |
| 6 |
| 7 |
| 10 |
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TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES |
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| $ 4,999 | $ 4,457 | $ 3,611 | $ 2,926 |
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$ | 5,836 |
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FIXED CHARGES |
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Interest on debt |
| 138 |
| 94 |
| 78 |
| 93 |
| 100 |
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Interest component of the ESOP benefit expense |
| 8 |
| 10 |
| 12 |
| 14 |
| 16 |
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Portion of rent under operating leases representative of the interest component |
| 70 |
| 64 |
| 60 |
| 53 |
| 45 |
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TOTAL FIXED CHARGES |
| $ | 216 |
| $ | 168 |
| $ | 150 |
| $ | 160 |
| $ | 161 |
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RATIO OF EARNINGS TO FIXED CHARGES |
| 27.0 |
| 29.8 |
| 29.7 |
| 22.6 |
| 18.2 |
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* As discussed in Note 1, effective January 1, 2006, 3M adopted SFAS No. 123R. Since 3M elected to use the modified retrospective method, prior periods have been restated resulting in a reduction in earnings and in the ratio of earnings to fixed charges. 2006 results included pre-tax gains of $523 million, with net benefits from gains related to the sale of certain portions of 3M’s branded pharmaceuticals business partially offset by restructuring actions, acquired in-process research and development expenses, settlement costs of a previously disclosed antitrust class action, and environmental obligations related to the pharmaceuticals business. 2003 includes a $93 million pre-tax loss related to an adverse ruling associated with a lawsuit filed by LePage’s Inc. 2002 includes net pre-tax losses of $202 million, primarily related to the 2001/2002 corporate restructuring program.
