The following excerpt is from the MD&A section of a recent Form 10-K for 3M Company....
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The following excerpt is from the MD&A section of a recent Form 10-K for 3M Company. Net Debt (non-GAAP measure) The Company defines net debt as total debt less the total of cash, cash equivalents and marketable securities. 3M considers net debt and its components to be an important indicator of liquidity and a guiding measure of capital structure strategy. Net debt is not defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures used by other companies. The following table provides net debt as of December 31, At December 31 (8 millions) Current Year Prior Year Total debt Less: Cash and cash equivalents and marketable securities Net debt (non-GAAP measure $11.650 2.695 $8.955 Cash and cash equivalents Marketable securities-current Marketable secunbes-concurrent Short-term borrowings and current portion of long-term debt Long-term delit In the current year, net debt rose by $83 million to a net debit balance of $9.0 billion (as of December 31 of the current year), as 3M progressed on its capital structure strategy. Debt levels were higher due to current year issuances, with this increase partially offset by the September current year repayment of $1 billion aggregate principal amount of medium-term notes. Cash and cash equivalents and marketable securities were higher in both the U.S. and internationally. In addition, on the balance sheet, 3M Company reports the following balances. At December 31 (5 millions) $10,797 1,925 $8.872 Current Year Prior Year $2.398 $1,798 280 118 171 972 10,678 2,044 8,753 Required a. What is the non-GAAP measure reported? b. What initial GAAP measure is used in the reconciliation to compare to the non-GAAP measure? c. Reconcile the GAAP measure components to the amounts presented on the balance sheet for each year, Reconciliation of total debt Current Year Prior Year Short-term borrowings and current portion of long-term debt $ Long-term debt Total debt (per the non-GAAP disclosure) Reconciliation of total debt 0 0$ Cash and cash equivalents Marketable securities-current Marketable securities-noncurrent Total cash, cash equivalents and marketable securities (per the non-GAAP disclosure) Current Year Prior Year 0 0% 0 0 01 0 0 d. Compute the percentage change from the prior year to the current year for (1) the initial GAAP measure presented and (2) the non-GAAP measure. Round to the nearest full percentage point; for example, enter 60 for 60.4% or 61 for 60.5%. Percentage Change Prior Year to Current Year 1. Initial GAAP measure presented 2. Non-GAAP measure presented e. The company indicates that the non-GAAP measure is an indicator of liquidity. Are the components of the non-GAAP measure primarily current or noncurrent? The following excerpt is from the MD&A section of a recent Form 10-K for 3M Company. Net Debt (non-GAAP measure) The Company defines net debt as total debt less the total of cash, cash equivalents and marketable securities. 3M considers net debt and its components to be an important indicator of liquidity and a guiding measure of capital structure strategy. Net debt is not defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures used by other companies. The following table provides net debt as of December 31, At December 31 (8 millions) Current Year Prior Year Total debt Less: Cash and cash equivalents and marketable securities Net debt (non-GAAP measure $11.650 2.695 $8.955 Cash and cash equivalents Marketable securities-current Marketable secunbes-concurrent Short-term borrowings and current portion of long-term debt Long-term delit In the current year, net debt rose by $83 million to a net debit balance of $9.0 billion (as of December 31 of the current year), as 3M progressed on its capital structure strategy. Debt levels were higher due to current year issuances, with this increase partially offset by the September current year repayment of $1 billion aggregate principal amount of medium-term notes. Cash and cash equivalents and marketable securities were higher in both the U.S. and internationally. In addition, on the balance sheet, 3M Company reports the following balances. At December 31 (5 millions) $10,797 1,925 $8.872 Current Year Prior Year $2.398 $1,798 280 118 171 972 10,678 2,044 8,753 Required a. What is the non-GAAP measure reported? b. What initial GAAP measure is used in the reconciliation to compare to the non-GAAP measure? c. Reconcile the GAAP measure components to the amounts presented on the balance sheet for each year, Reconciliation of total debt Current Year Prior Year Short-term borrowings and current portion of long-term debt $ Long-term debt Total debt (per the non-GAAP disclosure) Reconciliation of total debt 0 0$ Cash and cash equivalents Marketable securities-current Marketable securities-noncurrent Total cash, cash equivalents and marketable securities (per the non-GAAP disclosure) Current Year Prior Year 0 0% 0 0 01 0 0 d. Compute the percentage change from the prior year to the current year for (1) the initial GAAP measure presented and (2) the non-GAAP measure. Round to the nearest full percentage point; for example, enter 60 for 60.4% or 61 for 60.5%. Percentage Change Prior Year to Current Year 1. Initial GAAP measure presented 2. Non-GAAP measure presented e. The company indicates that the non-GAAP measure is an indicator of liquidity. Are the components of the non-GAAP measure primarily current or noncurrent?
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a The nonGAAP measure reported is net debt What initial GAAP measure is used in the reconciliation to compare to the nonGAAP measure The initial GAAP ... View the full answer
Related Book For
Survey of Accounting
ISBN: 978-0078110856
3rd Edition
Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi
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