During today's conference call, we will make certain predictive statements that reflect our current views about our future performance and financial results. We base these statements on certain assumptions and expectations of future events that are subject to risks and uncertainties. Item 1A of our most recent Form 10-K lists some of our most important risk factors that could cause actual results to differ from our predictions.So let's begin today's review, and I'll turn the program over to Inge. Please turn to Slide #3. Inge G. Thulin Thank you, Matt, and good morning, everyone. Thanks for joining us on the call today. I'm very pleased to report that we're off to a good start this year, with positive sales, operating income and EPS growth. In fact, we achieved an all-time Q1 sales record of $7.5 billion. Industrial and Transportation, SS&PS, Health Care and Consumer and Office all performed well, while weakness in Electronics, Display and Graphics, and Electro and Communications. As we said, we looked for the electronics market to pick up as the year goes on. Geographically, for 3M, the Americas was strong. Asia Pacific was somewhat slower and Western Europe held its own with very good operational discipline. For the company, operating margins improved to nearly 22%, with 5 out of 6 businesses above 20%. We executed well, and the result was a 7% increase in EPS to $1.59, including a $0.04 charge for a voluntary early retirement program and some miscellaneous restructuring. In February, we announced a 7% dividend increase, 3M's 54th consecutive annual increase. The first quarter dividend payment combined with Q1 share repurchases of over $500 million resulted in a first quarter return to shareholders of nearly $1 billion. So we're off to a good start, one that sets the right tone for the rest of the year and one that gives us confidence in our ability to deliver even against weak segments and regions and against an uncertain global economy.
I thank the 3M team for their outstanding work that achieved these very good results. The quarter highlights their ability to manage 3M's embedded systems and tools to drive operational excellence, and I'm extremely pleased with the outcome. Now David will take you through the detail of the quarter. David?David W. Meline Thank you, Inge. Let's begin with sales. Please turn to Slide #4. First quarter sales were $7.5 billion, up 2.4% year-on-year. Organic local currency growth was 1.8% in the first quarter, with volumes up just slightly and selling prices up 1.7%. Acquisitions added 1.5% to sales in the quarter and foreign exchange impacts reduced sales by nearly one percentage point. On a geographic basis, total growth was the strongest in the combined Latin America/Canada region at more than 8%. Organic local currency growth was nearly 12% in the quarter, so our teams here continued to do an excellent job of building the business. Currency impacts reduced sales in the region by nearly 4%, largely due to weakness in the Mexican peso and the Brazilian real. In the United States, sales grew 6.3% with double-digit increases in both Industrial and Transportation and in Safety, Security and Protection Services. The U.S. manufacturing sector remains quite robust and we are seeing some good growth as a result. Sales in Asia Pacific declined by 2% in the quarter, reflecting slower year-on-year demand in global consumer electronics, along with slower growth in China. Both were fully anticipated in our prior outlook, so no real surprises here. On the electronics side, we continue to expect the market to turn positive around midyear. As for China, we are expecting below trend growth in the second quarter with better growth rates returning in the second half of the year. Sales in Europe were basically flat in Q1, with strength in Middle East Africa and Central East Europe offset by year-on-year declines in the West. In aggregate, the economies in Western Europe have stabilized at least for the moment, so things are not getting worst sequentially, but they are also not getting better. We built our 2012 plan on this basis so thus far, things are progressing as expected. Read the rest of this transcript for free on seekingalpha.com