001000 - Statement - Consolidated Statement of Income
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Income Statement [Abstract]



Net Income (Loss) [Abstract]



Income (Loss) from Continuing Operations [Abstract]



Income (Loss) from Continuing Operations before Income Taxes, Minority Interest, and Income (Loss) from Equity Method Investments [Abstract]



Operating Income (Loss) [Abstract]



Sales Revenue, Net
24,462
22,923
21,167
Cost of Goods and Services Sold
12,735
11,713
10,408
Selling, General and Administrative Expense
5,015
5,066
4,631
Research, Development, and Related Expenses
1,368
1,522
1,274
Gain on Sale of Businesses
(849)
(1,074)
Cost of Goods and Services Sold and Other Operating Expenses, Total
18,269
17,227
16,313
Operating Income (Loss)
6,193
5,696
4,854
Interest Expense and Income [Abstract]



Interest Expense
210
122
82
Interest Income (N)
(132)
(51)
(56)
Interest (Income) Expense, Net, Total (N)
78
71
26
Income (Loss) from Continuing Operations before Income Taxes, Minority Interest, and Income (Loss) from Equity Method Investments, Total
6,115
5,625
4,828
Income Tax Expense (Benefit), Total
1,964
1,723
1,627
Minority Interest in Net Income (Loss) of Consolidated Entities
55
51
55
Income (Loss) from Continuing Operations, Total
4,096
3,851
3,146
Cumulative Effect of Change in Accounting Principle Presented on Income Statement, Net of Tax, Total
(35)
Net Income (Loss), Total
4,096
3,851
3,111
Earnings Per Share [Abstract]



Earnings Per Share, Basic [Abstract]



Weighted Average Number of Shares Outstanding, Basic
718,300,000
747,500,000
764,900,000
Income (Loss) from Continuing Operations, Per Basic Share
5.70
5.15
4.11
Cumulative Effect of Change in Accounting Principle, Net of Tax, Per Basic Share
(0.04)
Earnings Per Share, Basic, Total
5.70
5.15
4.07
Earnings Per Share, Diluted [Abstract]



Weighted Average Number of Diluted Shares Outstanding
732,000,000
761,000,000
781,300,000
Income (Loss) from Continuing Operations, Per Diluted Share
5.60
5.06
4.03
Cumulative Effect of Change in Accounting Principle, Net of Tax, Per Diluted Share
(0.05)
Earnings Per Share, Diluted, Total
5.60
5.06
3.98

002000 - Statement - Consolidated Balance Sheet
(Dollars in millions, except share and per share amounts)
2007
2006
Statement of Financial Position [Abstract]


Assets [Abstract]


Assets, Current [Abstract]


Cash and Cash Equivalents, at Carrying Value
1,896
1,447
Marketable Securities, Current
579
471
Accounts Receivable, Net, Current
3,362
3,102
Allowance for Doubtful Accounts Receivable, Current
75
71
Inventory, Net [Abstract]


Inventory, Finished Goods
1,349
1,235
Inventory, Work in Process
880
795
Inventory, Raw Materials and Supplies
623
571
Inventory, Net, Total
2,852
2,601
Other Assets, Current
1,149
1,325
Assets, Current
9,838
8,946
Marketable Securities, Noncurrent
480
166
Long-term Investments
298
314
Property, Plant and Equipment, Gross
18,390
17,017
(Less) Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(11,808)
(11,110)
Property, Plant and Equipment, Net
6,582
5,907
Goodwill
4,589
4,082
Intangible Assets, Net (Excluding Goodwill)
801
708
Prepaid Pension and Postretirement Benefits
1,378
395
Other Assets, Noncurrent
728
776
Assets, Total
24,694
21,294
Liabilities and Stockholders' Equity [Abstract]


Liabilities [Abstract]


Liabilities, Current [Abstract]


Debt, Current
901
2,506
Accounts Payable
1,505
1,402
Employee-related Liabilities
580
520
Accrued Income Taxes Payable
543
1,134
Other Liabilities, Current
1,833
1,761
Liabilities, Current, Total
5,362
7,323
Long-term Debt, Noncurrent
4,019
1,047
Other Liabilities, Noncurrent
3,566
2,965
Liabilities
12,947
11,335
Commitments and Contingencies
-
-
Stockholders' Equity [Abstract]


Common Stock, Value
9
9
Common Stock, Par or Stated Value Per Share
0.01
0.01
Common Stock, Shares, Outstanding
709,156,031
734,362,802
Additional Paid in Capital, Common Stock
2,785
2,484
Retained Earnings (Accumulated Deficit)
20,316
17,933
(Less) Treasury Stock, Value
(10,520)
(8,456)
(Less) Deferred Compensation Equity
(96)
(138)
Accumulated Other Comprehensive Income (Loss), Net of Tax
(747)
(1,873)
Stockholders' Equity
11,747
9,959
Liabilities and Stockholders' Equity
24,694
21,294

003000 - Statement - Consolidated Statement of Changes in Stockholders' Equity and Comprehensive Income
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Statement of Stockholders' Equity [Abstract]



Changes in Stockholders' Equity [Text Block]

004000 - Statement - Consolidated Statement Of Cash Flows
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Statement of Cash Flows [Abstract]



Statement [Line Items]



Cash and Cash Equivalents, Period Increase (Decrease) [Abstract]



Net Cash Provided by (Used in) Operating Activities [Abstract]



Net Income
4,096
3,851
3,111
Adjustments to Reconcile Income (Loss) to Net Cash Provided by (Used in) Continuing Operations [Abstract]



Adjustments for Noncash Items Included in Income (Loss) from Continuing Operations [Abstract]



Depreciation and Amortization
1,072
1,079
986
Pension and Other Postretirement Benefit Expense
255
440
437
Pension and Other Postretirement Benefit Contributions (N)
(379)
(385)
(788)
Share-based Compensation
228
200
155
Gain on Sale of Businesses
(849)
(1,074)
Deferred Income Tax Expense (Benefit)
11
(316)
132
Excess Tax Benefit from Share-based Compensation (N)
(74)
(60)
(54)
Increase (Decrease) in Operating Capital [Abstract]



Accounts Receivable
(35)
(103)
(184)
Inventories
(54)
(309)
(294)
Increase (Decrease) in Accounts Payable
(4)
68
113
Increase (Decrease) in Accrued Income Taxes Payable
(45)
138
270
Change in Product and Other Insurance Receivables and Claims
158
58
122
Other Operating Activities, Net
(105)
252
198
Net Cash Provided by (Used in) Operating Activities, Total
4,275
3,839
4,204
Net Cash Provided by (Used in) Investing Activities [Abstract]



Payments to Acquire Property, Plant and Equipment (N)
(1,422)
(1,168)
(943)
Proceeds from Sale of Productive Assets, Total
103
49
41
Payments to Acquire Businesses, Net of Cash Acquired (N)
(539)
(888)
(1,293)
Payments to Acquire Investments (N)
(8,194)
(3,253)
(1,627)
Proceeds from Sale of Marketable Securities and Investments
6,902
2,287
1,573
Proceeds from Maturities, Prepayments and Calls of Available-for-sale Securities
886
304
8
Proceeds from Divestiture of Businesses
897
1,209
Net Cash Provided by (Used in) Investing Activities, Total
(1,367)
(1,460)
(2,241)
Net Cash Provided by (Used in) Financing Activities [Abstract]



Proceeds from (Repayments of) Short-term Debt
(1,222)
882
(258)
Repayments of Long-term Debt (N)
(1,580)
(440)
(656)
Proceeds from Issuance of Long-term Debt
4,024
693
429
Payments for Repurchase of Common Stock (N)
(3,239)
(2,351)
(2,377)
Proceeds from Sale of Treasury Stock
796
523
545
Payments of Dividends, Common Stock (N)
(1,380)
(1,376)
(1,286)
Payments of Dividends, Minority Interest (N)
(20)
(38)
(56)
Excess Tax Benefit from Share-based Compensation, Financing Activities
74
60
54
Proceeds from (Payments for) Other Financing Activities
(14)
(20)
Net Cash Provided by (Used in) Financing Activities, Total
(2,547)
(2,061)
(3,625)
Effect of Exchange Rate on Cash and Cash Equivalents, Total
88
57
(23)
Cash and Cash Equivalents, Period Increase (Decrease), Total
449
375
(1,685)
Cash and Cash Equivalents, at Carrying Value, Beginning Balance
1,447
1,072
2,757
Cash and Cash Equivalents, at Carrying Value, Ending Balance
1,896
1,447
1,072

006010 - Disclosure - Note 1 - Significant Accounting Policies
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Significant Accounting Policies Disclosure [Abstract]



Significant Accounting Policies [Text Block]
NOTE 1. Significant Accounting Policies

Consolidation: 3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products. All significant subsidiaries are consolidated. All significant intercompany transactions are eliminated. As used herein, the term "3M" or "Company" refers to 3M Company and subsidiaries unless the context indicates otherwise.

Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States. Assets and liabilities for operations in local-currency environments are translated at year-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the year. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity.

Reclassifications: Certain amounts in the prior years' consolidated financial statements have been reclassified to conform to the current year presentation.

Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash and cash equivalents: Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when purchased.

Investments: Investments primarily include the cash surrender value of life insurance policies, real estate not used in the business, venture capital and equity-method investments. Unrealized gains and losses relating to investments classified as available-for-sale are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity.

Inventories: Inventories are stated at the lower of cost or market, with cost generally determined on a first-in, first-out basis.

Property, plant and equipment: Property, plant and equipment, including capitalized interest and internal engineering costs, are recorded at cost. Depreciation of property, plant and equipment generally is computed using the straight-line method based on the estimated useful lives of the assets. The estimated useful lives of buildings and improvements primarily range from 10 to 40 years, with the majority in the range of 20 to 40 years. The estimated useful lives of machinery and equipment primarily range from three to 15 years, with the majority in the range of five to 10 years. Fully depreciated assets are retained in property and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Goodwill: Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are one level below the business segment level, but can be combined when reporting units within the same segment have similar economic characteristics. The majority of goodwill relates to and is assigned directly to specific reporting units. An impairment loss generally would be recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups, or by using a discounted cash flow analysis. The Company completed its annual goodwill impairment test in the fourth quarter of 2007 and determined that no goodwill was impaired.

Intangible assets: Intangible assets include patents, tradenames and other intangible assets acquired from an independent party. Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Intangible assets with a definite life are amortized on a straight-line basis, with estimated useful lives ranging from one to 20 years. Indefinite-lived intangible assets are tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. Costs related to internally developed intangible assets, such as patents, are expensed as incurred, primarily in "Research, development and related expenses."

Revenue (sales) recognition: The Company sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk. Revenue is recognized when the risks and rewards of ownership have substantively transferred to customers. This condition normally is met when the product has been delivered or upon performance of services. The Company records estimated reductions to revenue for customer and distributor incentives, such as rebates, at the time of the initial sale. The estimated reductions are based on the sales terms, historical experience, trend analysis and projected market conditions in the various markets served. Sales, use, value-added and other excise taxes are not recognized in revenue.

The majority of 3M's sales agreements are for standard products and services with customer acceptance occurring upon delivery of the product or performance of the service. 3M also enters into agreements that contain multiple elements (such as equipment, installation and service) or non-standard terms and conditions. For multiple-element arrangements, 3M recognizes revenue for delivered elements when it has stand-alone value to the customer, the fair values of undelivered elements are known, customer acceptance of the delivered elements has occurred, and there are only customary refund or return rights related to the delivered elements. In addition to the preceding conditions, equipment revenue is not recorded until the installation has been completed if equipment acceptance is dependent upon installation, or if installation is essential to the functionality of the equipment. Installation revenues are not recorded until installation has been completed. For prepaid service contracts, sales revenue is recognized on a straight-line basis over the term of the contract, unless historical evidence indicates the costs are incurred on other than a straight-line basis. License fee revenue is recognized as earned, and no revenue is recognized until the inception of the license term. On occasion, agreements will contain milestones, or 3M will recognize revenue based on proportional performance. For these agreements, and depending on the specifics, 3M may recognize revenue upon completion of a substantive milestone, or in proportion to costs incurred to date compared with the estimate of total costs to be incurred.

Accounts Receivable and Allowances: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for bad debts, cash discounts, product returns and various other items. The allowance for doubtful accounts and product returns is based on the best estimate of the amount of probable credit losses in existing accounts receivable and anticipated sales returns. The Company determines the allowances based on historical write-off experience by industry and regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monthly. The Company does not have any significant off-balance-sheet credit exposure related to its customers.

Advertising and merchandising: These costs are charged to operations in the year incurred, and totaled $469 million in 2007, $471 million in 2006 and $457 million in 2005.

Research, development and related expenses: These costs are charged to operations in the year incurred and are shown on a separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.368 billion in 2007, $1.522 billion in 2006 and $1.274 billion in 2005. In 2006, this included a $95 million in-process research and development charge (discussed in Note 2) and $75 million in restructuring actions (Note 4). Research and development expenses, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $788 million in 2007 compared to $943 million in 2006, decreasing due to the $95 million for purchased in-process research and development discussed above and also due to the pharmaceuticals business divestiture (Note 2). Research and development expenses totaled $818 million in 2005. Related expenses primarily include technical support provided by 3M to customers who are using existing 3M products, and internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents.

Internal-use software: The Company capitalizes direct costs of materials and services used in the development of internal-use software. Amounts capitalized are amortized on a straight-line basis over a period of three to five years and are reported as a component of machinery and equipment within property, plant and equipment.

Environmental: Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities for anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company's commitment to a plan of action. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives.

Income taxes: The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their reliability exists. As of December 31, 2007, no significant valuation allowances were recorded.

Earnings per share: The difference in the weighted average shares outstanding for calculating basic and diluted earnings per share is attributable to the dilution associated with the Company's stock-based compensation plans. Certain Management Stock Ownership Program average options outstanding during the years 2007, 2006 and 2005 were not included in the computation of diluted earnings per share because they would not have had a dilutive effect (21.6 million average options for 2007, 31.5 million average options for 2006, and 15.4 million average options for 2005). As discussed in Note 10, the conditions for conversion related to the Company's Convertible Notes have never been met. If the conditions for conversion are met, 3M may choose to pay in cash and/or common stock; however, if this occurs, the Company has the intent and ability to settle this debt security in cash. Accordingly, there was no impact on 3M's diluted earnings per share. The computations for basic and diluted earnings per share for the years ended December 31 follow:

Earnings Per Share Computations
(Amounts in millions, except per share amounts) 2007 2006 2005
Numerator:
Net income $ 4,096 $ 3,851 $ 3,111

Denominator:
Denominator for weighted average commonshares outstanding - basic 718.3 747.5 764.9

Dilution associated with the Company's stock-based compensation plans 13.7 13.5 16.4

Denominator for weighted average common shares outstanding - diluted 732.0 761.0 781.3

Earnings per share - basic $ 5.70 $ 5.15 $ 4.07
Earnings per share - diluted $ 5.60 $ 5.06 $ 3.98


Stock-based compensation: In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004). SFAS No. 123R supersedes APB Opinion No. 25. Under APB Opinion No. 25, no compensation expense is recognized for employee stock option grants if the exercise price of the Company's stock option grants is at or above the fair market value of the underlying stock on the date of grant. Under SFAS No. 123R, compensation expense is recognized for both the General Employees' Stock Purchase Plan (GESPP) and the Management Stock Ownership Plan (MSOP). SFAS No. 123R requires the determination of the fair value of the share-based compensation at the grant date and the recognition of the related expense over the period in which the share-based compensation vests. The Company adopted SFAS No. 123R effective January 1, 2006. The Company adopted SFAS No. 123R using the modified retrospective method. All prior periods have been restated to give effect to the fair-value-based method of accounting for awards granted in fiscal years beginning on or after January 1, 1995. The Company believes that the modified retrospective application of this standard achieves the highest level of clarity and comparability among the presented periods. On November 10, 2005, the FASB issued FASB Staff Position No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards (the FSP). The FSP provides that companies may elect to use a specified "short-cut" method to calculate the historical pool of windfall tax benefits upon adoption of SFAS No. 123R. The Company elected to use the "short-cut" method when it adopted SFAS No. 123R on January 1, 2006. Refer to Note 15 for additional information.

Comprehensive income: Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statement of Changes in Stockholders' Equity and Comprehensive Income. Accumulated other comprehensive income (loss) is composed of foreign currency translation effects (including hedges of net investments in international companies), defined benefit pension plan adjustments, unrealized gains and losses on available-for-sale debt and equity securities, and unrealized gains and losses on cash flow hedging instruments.

Derivatives and hedging activities: All derivative instruments are recorded on the balance sheet at fair value. The Company uses interest rate swaps, currency swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with U.S. generally accepted accounting principles. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives. However, the Company does have contingently convertible debt that, if conditions for conversion are met, is convertible into shares of 3M common stock (refer to Note 10 in this document).

New Accounting Pronouncements

As of December 31, 2005, the Company adopted FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations" (FIN 47). This accounting standard applies to the fair value of a liability for an asset retirement obligation associated with the retirement of tangible long-lived assets and where the liability can be reasonably estimated. Conditional asset retirement obligations exist for certain of the Company's long-term assets. The fair value of these obligations is recorded as liabilities on a discounted basis. Over time the liabilities are accreted for the change in the present value and the initial capitalized costs are depreciated over the useful lives of the related assets. The adoption of FIN 47 effective December 31, 2005, resulted in the recognition of an asset retirement obligation liability of $59 million at December 31, 2005, and an after-tax charge of $35 million for 2005, which is reflected as a cumulative effect of change in accounting principle in the Consolidated Statement of Income. At December 31, 2007, the asset retirement obligation liability was $59 million.

In February 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 155, "Hybrid Instruments." SFAS No. 155 amends SFAS No. 133 and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No. 155 also resolves issues addressed in Statement 133 Implementation Issue No. D1, "Application of Statement 133 to Beneficial Interests in Securitized Financial Assets." SFAS No. 155: a) permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, b) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, c) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, d) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and e) amends SFAS No. 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. The Company adopted SFAS No. 155 effective January 1, 2007; however, there was no material impact.

In June 2006, the FASB issued Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109." This interpretation was effective as of January 1, 2007. Refer to Note 8 for additional information concerning this standard.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." SFAS No. 157 establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurements, and requires new disclosures of assets and liabilities measured at fair value based on their level in the hierarchy. SFAS No. 157 is effective for all fiscal years beginning after November 15, 2007 (January 1, 2008 for 3M) and is to be applied prospectively. In February 2008, the FASB issued Staff Positions No. 157-1 and No. 157-2 which partially defer the effective date of SFAS No. 157 for one year for certain nonfinancial assets and liabilities and remove certain leasing transactions from its scope. The Company is currently evaluating the impacts and disclosures of this standard, but would not expect SFAS No. 157 to have a material impact on 3M's consolidated results of operations or financial condition.
Consolidation, Policy [Text Block]
Consolidation: 3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products. All significant subsidiaries are consolidated. All significant intercompany transactions are eliminated. As used herein, the term "3M" or "Company" refers to 3M Company and subsidiaries unless the context indicates otherwise.
Foreign Currency Transactions and Translations Policy [Text Block]
Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States. Assets and liabilities for operations in local-currency environments are translated at year-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the year. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity.
Reclassifications
Reclassifications: Certain amounts in the prior years' consolidated financial statements have been reclassified to conform to the current year presentation.
Use of Estimates
Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Cash and Cash Equivalents, Policy [Text Block]
Cash and cash equivalents: Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when purchased.
Investment, Policy [Text Block]
Investments: Investments primarily include the cash surrender value of life insurance policies, real estate not used in the business, venture capital and equity-method investments. Unrealized gains and losses relating to investments classified as available-for-sale are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity.
Inventory, Policy [Text Block]
Inventories: Inventories are stated at the lower of cost or market, with cost generally determined on a first-in, first-out basis.
Property, Plant and Equipment, Policy [Text Block]
Property, Plant and Equipment, Depreciation Methods
Depreciation of property, plant and equipment generally is computed using the straight-line method based on the estimated useful lives of the assets.
Property, Plant and Equipment, Estimated Useful Lives
The estimated useful lives of buildings and improvements primarily range from 10 to 40 years, with the majority in the range of 20 to 40 years. The estimated useful lives of machinery and equipment primarily range from three to 15 years, with the majority in the range of five to 10 years.
Property, Plant and Equipment, Dispositions
Fully depreciated assets are retained in property and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations.
Property, Plant and Equipment, Cost Capitalization
Property, plant and equipment, including capitalized interest and internal engineering costs, are recorded at cost.
Property, Plant and Equipment, Impairment
Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value.
Property, Plant and Equipment, Basis of Valuation
Fair value is generally determined using a discounted cash flow analysis.
Goodwill and Intangible Assets, Policy [Text Block]
Goodwill and Intangible Assets, Goodwill, Policy
Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized.
Goodwill and Intangible Assets, Goodwill, Impairment Policy
Goodwill is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are one level below the business segment level, but can be combined when reporting units within the same segment have similar economic characteristics. The majority of goodwill relates to and is assigned directly to specific reporting units. An impairment loss generally would be recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups, or by using a discounted cash flow analysis. The Company completed its annual goodwill impairment test in the fourth quarter of 2007 and determined that no goodwill was impaired.
Goodwill and Intangible Assets, Intangible Assets, Policy
Intangible assets include patents, tradenames and other intangible assets acquired from an independent party. Intangible assets with an indefinite life, namely certain tradenames, are not amortized.
Goodwill and Intangible Assets, Intangible Assets, Finite-Lived, Policy
Intangible assets with a definite life are amortized on a straight-line basis, with estimated useful lives ranging from one to 20 years.
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy
Indefinite-lived intangible assets are tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. Costs related to internally developed intangible assets, such as patents, are expensed as incurred, primarily in "Research, development and related expenses."
Revenue Recognition, Policy [Text Block]
Revenue Recognition, General Principles
The Company sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk. Revenue is recognized when the risks and rewards of ownership have substantively transferred to customers. This condition normally is met when the product has been delivered or upon performance of services. Sales, use, value-added and other excise taxes are not recognized in revenue.
Revenue Recognition, Revenue Reductions
The Company records estimated reductions to revenue for customer and distributor incentives, such as rebates, at the time of the initial sale. The estimated reductions are based on the sales terms, historical experience, trend analysis and projected market conditions in the various markets served.
Revenue Recognition, Multiple Element Arrangements, Other
3M also enters into agreements that contain multiple elements (such as equipment, installation and service) or non-standard terms and conditions. For multiple-element arrangements, 3M recognizes revenue for delivered elements when it has stand-alone value to the customer, the fair values of undelivered elements are known, customer acceptance of the delivered elements has occurred, and there are only customary refund or return rights related to the delivered elements. In addition to the preceding conditions, equipment revenue is not recorded until the installation has been completed if equipment acceptance is dependent upon installation, or if installation is essential to the functionality of the equipment. Installation revenues are not recorded until installation has been completed. For prepaid service contracts, sales revenue is recognized on a straight-line basis over the term of the contract, unless historical evidence indicates the costs are incurred on other than a straight-line basis. License fee revenue is recognized as earned, and no revenue is recognized until the inception of the license term. On occasion, agreements will contain milestones, or 3M will recognize revenue based on proportional performance. For these agreements, and depending on the specifics, 3M may recognize revenue upon completion of a substantive milestone, or in proportion to costs incurred to date compared with the estimate of total costs to be incurred.
Trade and Other Accounts Receivable, Policy
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy
Accounts Receivable and Allowances: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for bad debts, cash discounts, product returns and various other items. The allowance for doubtful accounts and product returns is based on the best estimate of the amount of probable credit losses in existing accounts receivable and anticipated sales returns. The Company determines the allowances based on historical write-off experience by industry and regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monthly. The Company does not have any significant off-balance-sheet credit exposure related to its customers.
Advertising Costs, Policy [Text Block]
Advertising and merchandising: These costs are charged to operations in the year incurred, and totaled $469 million in 2007, $471 million in 2006 and $457 million in 2005.
Advertising Expense
469
471
457
Research, Development, and Computer Software, Policy [Text Block]
Research, development and related expenses: These costs are charged to operations in the year incurred and are shown on a separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.368 billion in 2007, $1.522 billion in 2006 and $1.274 billion in 2005. In 2006, this included a $95 million in-process research and development charge (discussed in Note 2) and $75 million in restructuring actions (Note 4). Research and development expenses, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $788 million in 2007 compared to $943 million in 2006, decreasing due to the $95 million for purchased in-process research and development discussed above and also due to the pharmaceuticals business divestiture (Note 2). Research and development expenses totaled $818 million in 2005. Related expenses primarily include technical support provided by 3M to customers who are using existing 3M products, and internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents.
Internal Use Software, Policy
Internal-use software: The Company capitalizes direct costs of materials and services used in the development of internal-use software. Amounts capitalized are amortized on a straight-line basis over a period of three to five years and are reported as a component of machinery and equipment within property, plant and equipment.
Research, Development, and Related Expenses
1,368
1,522
1,274
Business Acquisition, Purchase Price Allocation, In-process Research And Development
1
95
Research, Development and Related Expenses, Restructuring Expenses
(7)
75
Research and Development Expense
788
943
818
Environmental Cost, Expense Policy
Environmental: Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities for anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company's commitment to a plan of action. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives.
Income Tax, Policy [Text Block]
Deferred Income Tax Policy
Income taxes: The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their reliability exists. As of December 31, 2007, no significant valuation allowances were recorded.
Earnings Per Share, Policy [Text Block]
Earnings per share: The difference in the weighted average shares outstanding for calculating basic and diluted earnings per share is attributable to the dilution associated with the Company's stock-based compensation plans. Certain Management Stock Ownership Program average options outstanding during the years 2007, 2006 and 2005 were not included in the computation of diluted earnings per share because they would not have had a dilutive effect (21.6 million average options for 2007, 31.5 million average options for 2006, and 15.4 million average options for 2005). As discussed in Note 10, the conditions for conversion related to the Company's Convertible Notes have never been met. If the conditions for conversion are met, 3M may choose to pay in cash and/or common stock; however, if this occurs, the Company has the intent and ability to settle this debt security in cash. Accordingly, there was no impact on 3M's diluted earnings per share. The computations for basic and diluted earnings per share for the years ended December 31 follow:
Net Income
4,096
3,851
3,111
Weighted Average Number of Shares Outstanding, Basic
718,300,000
747,500,000
764,900,000
Earnings Per Share, Basic
5.70
5.15
4.07
Earnings Per Share, Diluted
5.60
5.06
3.98
Share-based Compensation, Option and Incentive Plans Policy
Stock-based compensation: In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004). SFAS No. 123R supersedes APB Opinion No. 25. Under APB Opinion No. 25, no compensation expense is recognized for employee stock option grants if the exercise price of the Company's stock option grants is at or above the fair market value of the underlying stock on the date of grant. Under SFAS No. 123R, compensation expense is recognized for both the General Employees' Stock Purchase Plan (GESPP) and the Management Stock Ownership Plan (MSOP). SFAS No. 123R requires the determination of the fair value of the share-based compensation at the grant date and the recognition of the related expense over the period in which the share-based compensation vests. The Company adopted SFAS No. 123R effective January 1, 2006. The Company adopted SFAS No. 123R using the modified retrospective method. All prior periods have been restated to give effect to the fair-value-based method of accounting for awards granted in fiscal years beginning on or after January 1, 1995. The Company believes that the modified retrospective application of this standard achieves the highest level of clarity and comparability among the presented periods. On November 10, 2005, the FASB issued FASB Staff Position No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards (the FSP). The FSP provides that companies may elect to use a specified "short-cut" method to calculate the historical pool of windfall tax benefits upon adoption of SFAS No. 123R. The Company elected to use the "short-cut" method when it adopted SFAS No. 123R on January 1, 2006. Refer to Note 15 for additional information.
Comprehensive Income Policy
Comprehensive income: Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statement of Changes in Stockholders' Equity and Comprehensive Income. Accumulated other comprehensive income (loss) is composed of foreign currency translation effects (including hedges of net investments in international companies), defined benefit pension plan adjustments, unrealized gains and losses on available-for-sale debt and equity securities, and unrealized gains and losses on cash flow hedging instruments.
Derivatives, Policy [Text Block]
Derivatives and hedging activities: All derivative instruments are recorded on the balance sheet at fair value. The Company uses interest rate swaps, currency swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility.
Derivatives, Methods of Accounting, Hedging Derivatives
All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with U.S. generally accepted accounting principles. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives. However, the Company does have contingently convertible debt that, if conditions for conversion are met, is convertible into shares of 3M common stock (refer to Note 10 in this document).
New Accounting Pronouncements [Text Block]
New Accounting Pronouncements

As of December 31, 2005, the Company adopted FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations" (FIN 47). This accounting standard applies to the fair value of a liability for an asset retirement obligation associated with the retirement of tangible long-lived assets and where the liability can be reasonably estimated. Conditional asset retirement obligations exist for certain of the Company's long-term assets. The fair value of these obligations is recorded as liabilities on a discounted basis. Over time the liabilities are accreted for the change in the present value and the initial capitalized costs are depreciated over the useful lives of the related assets. The adoption of FIN 47 effective December 31, 2005, resulted in the recognition of an asset retirement obligation liability of $59 million at December 31, 2005, and an after-tax charge of $35 million for 2005, which is reflected as a cumulative effect of change in accounting principle in the Consolidated Statement of Income. At December 31, 2007, the asset retirement obligation liability was $59 million.

In February 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 155, "Hybrid Instruments." SFAS No. 155 amends SFAS No. 133 and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No. 155 also resolves issues addressed in Statement 133 Implementation Issue No. D1, "Application of Statement 133 to Beneficial Interests in Securitized Financial Assets." SFAS No. 155: a) permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, b) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, c) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, d) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and e) amends SFAS No. 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. The Company adopted SFAS No. 155 effective January 1, 2007; however, there was no material impact.

In June 2006, the FASB issued Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109." This interpretation was effective as of January 1, 2007. Refer to Note 8 for additional information concerning this standard.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." SFAS No. 157 establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurements, and requires new disclosures of assets and liabilities measured at fair value based on their level in the hierarchy. SFAS No. 157 is effective for all fiscal years beginning after November 15, 2007 (January 1, 2008 for 3M) and is to be applied prospectively. In February 2008, the FASB issued Staff Positions No. 157-1 and No. 157-2 which partially defer the effective date of SFAS No. 157 for one year for certain nonfinancial assets and liabilities and remove certain leasing transactions from its scope. The Company is currently evaluating the impacts and disclosures of this standard, but would not expect SFAS No. 157 to have a material impact on 3M's consolidated results of operations or financial condition.

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)." Refer to Note 11 for additional information concerning this standard.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities". SFAS No. 159 permits an entity to choose, at specified election dates, to measure eligible financial instruments and certain other items at fair value that are not currently required to be measured at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007 (January 1, 2008 for 3M) and interim periods within those fiscal years. At the effective date, an entity may elect the fair value option for eligible items that exist at that date. The entity shall report the effect of the first remeasurement to fair value as a cumulative-effect adjustment to the opening balance of retained earnings. The Company has not elected the fair value option for eligible items that existed as of January 1, 2008.

In June 2007, the FASB's Emerging Issues Task Force reached a consensus on EITF Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities" that would require nonrefundable advance payments made by the Company for future R&D activities to be capitalized and recognized as an expense as the goods or services are received by the Company. EITF Issue No. 07-3 is effective for 3M with respect to new arrangements entered into beginning January 1, 2008. The Company is currently evaluating the impacts and disclosures of this standard, but would not expect EITF Issue No. 07-3 to have a material impact on 3M's consolidated results of operations or financial condition.

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations," which changes how business acquisitions are accounted. SFAS No. 141R requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard will, among other things, impact the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration); exclude transaction costs from acquisition accounting; and change accounting practices for acquired contingencies, acquisition-related restructuring costs, in-process research and development, indemnification assets, and tax benefits. For 3M, SFAS No. 141R is effective for business combinations and adjustments to an acquired entity's deferred tax asset and liability balances occurring after December 31, 2008. The Company is currently evaluating the future impacts and disclosures of this standard.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51," which establishes new standards governing the accounting for and reporting of noncontrolling interests (NCIs) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs (previously referred to as minority interests) be treated as a separate component of equity, not as a liability; that increases and decrease in the parent's ownership interest that leave control intact be treated as equity transactions, rather than as step acquisitions or dilution gains or losses; and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance. This standard also requires changes to certain presentation and disclosure requirements. For 3M, SFAS No. 160 is effective beginning January 1, 2009. The provisions of the standard are to be applied to all NCIs prospectively, except for the presentation and disclosure requirements, which are to be to applied retrospectively to all periods presented. The Company is currently evaluating the future impacts and disclosures of this standard.

In December 2007, the FASB ratified the Emerging Issues Task Force consensus on EITF Issue No. 07-1, "Accounting for Collaborative Arrangements" that discusses how parties to a collaborative arrangement (which does not establish a legal entity within such arrangement) should account for various activities. The consensus indicates that costs incurred and revenues generated from transactions with third parties (i.e. parties outside of the collaborative arrangement) should be reported by the collaborators on the respective line items in their income statements pursuant to EITF Issue No. 99-19, "Reporting Revenue Gross as a Principal Versus Net as an Agent." Additionally, the consensus provides that income statement characterization of payments between the participants in a collaborative arrangement should be based upon existing authoritative pronouncements; analogy to such pronouncements if not within their scope; or a reasonable, rational, and consistently applied accounting policy election. EITF Issue No. 07-1 is effective for 3M beginning January 1, 2009 and is to be applied retrospectively to all periods presented for collaborative arrangements existing as of the date of adoption. The Company is currently evaluating the impacts and disclosures of this standard, but would not expect EITF Issue No. 07-1 to have a material impact on 3M's consolidated results of operations or financial condition.


006020 - Disclosure - Note 2 - Acquisitions and Divestitures
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Acquisitions and Divestitures Disclosure [Abstract]



Business Combination Disclosure [Text Block]
NOTE 2. Acquisitions and Divestitures

Divestitures:

In January 2007, 3M completed the sale of its global branded pharmaceuticals business in Europe to Meda AB. 3M received proceeds of $817 million for this transaction and recognized, net of assets sold, a pre-tax gain of $781 million (recorded in the Health Care segment) in 2007.

In December 2006, 3M completed the sale of its global branded pharmaceuticals business in the United States, Canada, and Latin America region and the Asia Pacific region, including Australia and South Africa. 3M received proceeds of $1.209 billion for this transaction and recognized, net of assets sold, a pre-tax gain of $1.074 billion (recorded in Health Care Business) in 2006.

Buyer and sale price information by region is as follows:

* Meda AB acquired 3M's pharmaceuticals business in Europe for $817 million in 2007.
* Graceway Pharmaceuticals Inc. acquired 3M's pharmaceutical operations in the United States, Canada, and Latin America for $860 million in 2006.
* Ironbridge Capital and Archer Capital acquired 3M's pharmaceuticals business in the Asia Pacific region, including Australia and South Africa for $349 million in 2006.

The agreements are the result of a review of strategic options for the branded pharmaceuticals business and its immune response modifier (IRM) platform that 3M announced in April 2006. Under the agreements, the purchasers acquired regional marketing and intellectual property rights for 3M's well-known branded pharmaceuticals, including Aldara, Difflam, Duromine, Tambocor, Maxair, Metrogel-Vaginal and Minitran. As part of the transaction, Graceway Pharmaceuticals also acquired the rights to certain IRM molecules.

In connection with these transactions, 3M entered into agreements whereby its Drug Delivery Systems Division became a source of supply to the acquiring companies. Because of the extent of 3M cash flows from these agreements in relation to those of the disposed-of businesses, the operations of the branded pharmaceuticals business are not classified as discontinued operations. See Note 4 for further discussion of restructuring actions that resulted from the divesture of the Company's global branded pharmaceuticals business.

In June 2007, 3M completed the sale of its Opticom Priority Control Systems and Canoga Traffic Detection businesses to TorQuest Partners Inc., a Toronto-based investment firm. 3M received proceeds of $80 million for this transaction and recognized, net of assets sold, transaction and other costs, a pre-tax gain of $68 million (recorded in the Display and Graphics segment) in 2007.

Acquisitions:

During 2007, the purchase price paid for business combinations totaled $539 million, net of cash acquired, plus approximately 150 thousand shares of 3M common stock, which had a market value of approximately $13 million. The 16 business combinations completed during 2007 are summarized as follows:

1) In February 2007, 3M (Industrial and Transportation Business) purchased certain assets of Accuspray Application Technologies Inc., a manufacturer of spray paint equipment with a wide array of spray guns for architectural, automotive refinishing, industrial and woodworking applications.

2) In February 2007, 3M (Industrial and Transportation Business) purchased Sealed Air Corporation's 50 percent interest in PolyMask Corporation, a joint venture between 3M and Sealed Air that produces protective films. The acquisition of Sealed Air's interest results in 100 percent ownership by 3M.

3) In February 2007, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Acolyte Biomedica Ltd., a Salisbury, U.K.-based provider of an automated microbial detection platform that aids in the rapid detection, diagnosis, and treatment of infectious diseases.

4) In May 2007, 3M (Safety, Security and Protection Services Business) purchased 100 percent of the outstanding shares of E Wood Holdings PLC, a North Yorkshire, UK-based manufacturer of high performance protective coatings for oil, gas, water, rail and automotive industries.

5) In May 2007, 3M (Electro and Communications Business) purchased certain assets of Innovative Paper Technologies LLC, a manufacturer of inorganic-based technical papers, boards and laminates for a wide variety of high temperature applications and Powell LLC, a supplier of non-woven polyester mats for the electrical industry.

6) In May 2007, 3M (Health Care Business) purchased certain assets of Articulos de Papel DMS Chile, a Santiago, Chile-based manufacturer of disposable surgical packs, drapes, gowns and kits.

7) In June 2007, 3M (Industrial and Transportation Business) purchased certain assets of Diamond Productions Inc., a manufacturer of superabrasive diamond and cubic boron nitride wheels and tools for dimensioning and finishing hard-to-grind materials in metalworking, woodworking and stone fabrication markets in exchange for approximately 150 thousand shares of 3M common stock, which had a market value of $13 million at the acquisition measurement date and was previously held as 3M treasury stock.

8) In July 2007, 3M (Safety, Security and Protection Services Business) purchased 100 percent of the outstanding shares of Rochford Thompson Equipment Ltd., a manufacturer of optical character recognition passport readers used by airlines and immigration authorities, headquartered in Newbury, U.K.

9) In August 2007, 3M (Health Care Business) purchased certain assets of Neoplast Co. Ltd., a manufacturer/distributor of surgical tapes and dressings and first aid bandages for both the professional and consumer markets across the Asia Pacific region.

10) In October 2007, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Abzil Industria e Comercio Ltda., a manufacturer of orthodontic products based in Sao Jose do Rio Preto, Sao Paulo, Brazil.

11) In October 2007, 3M (Industrial and Transportation Business) purchased 100 percent of the outstanding shares of Venture Tape Corp. and certain related entities, a global provider of pressure sensitive adhesive tapes based in Rockland, Mass.

12) In October 2007, 3M (Display and Graphics Business) purchased certain assets of Macroworx Media Pvt Ltd., a software company that specializes in the design and development of digital signage solutions based in Bangalore, India.

13) In October 2007, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Lingualcare Inc., a Dallas-based orthodontic technology and services company offering the iBraces system, a customized, lingual orthodontic solution.

14) In November 2007, 3M (Industrial and Transportation Business) purchased certain assets of Standard Abrasives, a manufacturer of coated abrasive specialties and non-woven abrasive products for the metalworking industry headquartered in Simi Valley, Ca.

15) In November 2007, 3M (Industrial and Transportation Business) purchased 100 percent of the outstanding shares of Unifam Sp. z o.o., a manufacturer of cut-off wheels, depressed center grinding wheels and flap discs based in Poland.

16) In November 2007, 3M (Industrial and Transportation Business) purchased certain assets of Bondo Corp., a manufacturer of auto body repair products for the automotive aftermarket and various other professional and consumer applications based in Atlanta, Ga.

In addition to the business combinations above, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations. These transactions are largely reflected as additional asset purchase and investment activity.

Purchased identifiable intangible assets for the 16 business combinations closed during the twelve months ended December 31, 2007 totaled $124 million and will be amortized on a straight-line basis over lives ranging from 2 to 10 years (weighted-average life of six years).

In 2007 and 2006, pro forma information related to acquisitions was not included because the impact on the Company's consolidated results of operations was not considered to be material. There were no material in-process research and development charges associated with 2007, while 2006 included $95 million in charges for the Brontes Technologies Inc. acquisition. The purchase price allocation of certain 2007 business combinations is considered preliminary. The impact on the Consolidated Balance Sheet of the purchase price allocations related to acquisitions and adjustments relative to other acquisitions within the allocation period follow:

Asset (Liability) 2007 2006
(Millions) Impact Impact
Accounts receivable $69 $76
Inventory 79 55
Other current assets 5 8
Property, plant, and equipment - net 68 65
Purchased intangible assets 131 282
Purchased goodwill 326 536
In-process R&D 1 95
Accounts payable and other current liabilities, net of other assets (115) (152)
Deferred tax liability (12) (77)

Net assets acquired $552 $888

Supplemental information:
Cash paid $546 $962
Less: Cash acquired 7 74
Cash paid, net of cash acquired $539 $888
Non-cash (3M shares at fair value) 13 -
Net assets acquired $552 $888

Year 2006 acquisitions:

During the 12 months ended December 31, 2006, 3M completed 19 business combinations for a total purchase price of $888 million, net of cash acquired. Purchased identifiable intangible assets of $282 million for these acquisitions will be amortized on a straight-line basis over lives ranging from 1 to 17 years (weighted-average life of 9 years). The purchase price of several of these acquisitions is subject to increases, which could be triggered by the achievement of certain milestones.

The largest of these acquisitions was the August 2006 purchase of 100 percent of the outstanding shares of Security Printing and Systems Limited (Safety, Security and Protection Services Business) from authentos GmbH, Germany. The acquired company is a producer of finished, personalized passports and secure cards.

In October 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Brontes Technologies Inc. (Brontes), a Lexington, Massachusetts-based developer of proprietary 3-D imaging technology for dental and orthodontic applications, for $95 million in cash. Brontes was a "development stage enterprise" that did not yet have revenues from its principal operations and the technology acquired did not have any alternative future use. This transaction resulted in a 2006 charge of $95 million, or $0.13 per diluted share, reflecting the write-off of acquired in-process research and development costs, which are recognized as research, development and related expenses in the Consolidated Statement of Income.

The 17 additional business combinations are summarized as follows:

1) In January 2006, 3M (Consumer and Office Business) purchased 100 percent of the outstanding common shares of Interchemall Dom., a provider of household cleaning products based in Poland.

2) In March 2006, 3M (Industrial and Transportation Business) purchased certain assets of General Industrial Diamond Company Inc., a U.S. operation. The acquired company is a manufacturer of superabrasive grinding wheels, dressing tools and machines used to dimension and finish hard-to-grind materials in the industrial and commercial markets.

3) In April 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of OMNII Oral Pharmaceuticals, a provider of differentiated preventive dental products, solutions and support for dental professionals.

4) In April 2006, 3M (Health Care Business) purchased certain assets of ClozeX Medical LLC, a provider of unique skin closure devices to treat lacerations and close surgical incisions. The agreement gives 3M exclusive worldwide rights for the manufacturing and distribution of ClozeX Wound Closures.

5) In June 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of SBG (Software und Beratung im Gesundheitswesen) GmbH, a Berlin-based developer of software for managing diagnosis-related information in hospitals.

6) In June 2006, 3M (Safety, Security and Protection Services Business) purchased certain assets of POMP Medical and Occupational Health Products LLC, a Porto Alegre, Brazil-based provider of earplugs, eyewear and hand cream.

7) In July 2006, 3M (Industrial and Transportation Business) purchased certain assets of Pinnacle Distribution Concepts Inc., a leading transportation management system (TMS) provider specializing in the delivery of Web-based, "on-demand" solutions.

8) In July 2006, 3M (Electro and Communications Business) purchased certain assets of SCC Products Inc. and JJ Converting LLC, both based in Sanford, N.C. SCC Products Inc. is a provider of flexible static control packaging and workstation products for electronic devices. JJ Converting LLC is a producer of films used to make static control bags.

9) In August 2006, 3M (Display and Graphics Business) purchased 100 percent of the outstanding shares of Archon Technologies Inc., a Denver, Colorado-based provider of enterprise software solutions for motor vehicle agencies.

10) In August 2006, 3M (Safety, Security and Protection Services Business) purchased 100 percent of the outstanding shares of Aerion Technologies, a Denver, Colorado-based maker of safety products, including heat stress monitors, thermal cameras and carbon monoxide detectors.

11) In September 2006, 3M (Electro and Communications Business) purchased 100 percent of the outstanding shares of Credence Technologies Inc., a Soquel, California-based provider of instruments and high-end monitoring equipment for electrostatic discharge control and electromagnetic compliance.

12) In October 2006, 3M (Consumer and Office Business) purchased certain assets of Nylonge Corp., a global provider of household cleaning products, including cellulose sponges, scrub sponges and household wipes.

13) In October 2006, 3M (Industrial and Transportation Business) purchased 100 percent of the outstanding shares of NorthStar Chemicals, Inc., a Cartersville, Georgia-based adhesive manufacturer.

14) In November 2006, 3M (Industrial and Transportation Business) purchased 100 percent of the outstanding shares of Global Beverage Group Inc., a Canadian-based provider of delivery management software solutions for the direct-store-delivery of consumer packaged goods.

15) In November 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Biotrace International PLC, a Bridgend, UK-based manufacturer and supplier of industrial microbiology products used in food processing safety, health care, industrial hygiene and defense applications.

16) In December 2006, 3M (Electro and Communications Business) purchased certain assets of Mahindra Engineering and Chemical Products LTD, an India-based manufacturer of cable jointing kits and accessories.

17) In December 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of SoftMed Systems Inc., a Maryland-based provider of health information management software and services that improve the workflow and efficiency of health care organizations.

The 2006 impact on the Consolidated Balance Sheet of the purchase price allocations related to the 2006 acquisitions and adjustments relative to other acquisitions within the allocation period were provided in the preceding table.

Year 2005 acquisitions:

The Company acquired CUNO on August 2, 2005. The operating results of CUNO are included in the Industrial and Transportation Business segment. CUNO is engaged in the design, manufacture and marketing of a comprehensive line of filtration products for the separation, clarification and purification of fluids and gases. 3M and CUNO have complementary sets of filtration technologies, creating an opportunity to bring an even wider range of filtration solutions to customers around the world. 3M acquired CUNO for approximately $1.36 billion, comprised of $1.27 billion of cash paid (net of cash acquired) and the acquisition of $80 million of debt, most of which has been repaid.

Purchased identifiable intangible assets of $268 million for the CUNO acquisition will be amortized on a straight-line basis over lives ranging from 5 to 20 years (weighted-average life of 15 years). In-process research and development charges from the CUNO acquisition were not material. Pro forma information related to this acquisition is not included because its impact on the Company's consolidated results of operations is not considered to be material. The allocation of the purchase price is presented in the table that follows.

2005 CUNO ACQUISITION
Asset (Liability)
(Millions)
Accounts receivable $96
Inventory 61
Property, plant, and equipment - net 121
Purchased intangible assets 268
Purchased goodwill 992
Other assets 30
Deferred tax liability (102)
Accounts payable and other current liabilities (104)
Interest bearing debt (80)
Other long-term liabilities (16)

Net assets acquired $1,266

Supplemental information:
Cash paid $1,294
Less: Cash acquired 28
Cash paid, net of cash acquired $1,266

During the year ended December 31, 2005, 3M entered into two immaterial additional business combinations for a total purchase price of $27 million, net of cash acquired.

1) 3M (Electro and Communications Business) purchased certain assets of Siemens Ultrasound division's flexible circuit manufacturing line, a U.S. operation. The acquired operation produces flexible interconnect circuits that provide electrical connections between components in electronics systems used primarily in the transducers of ultrasound machines.

2) 3M (Display and Graphics Business) purchased certain assets of Mercury Online Solutions Inc., a U.S. operation. The acquired operation provides hardware and software technologies and network management services for digital signage and interactive kiosk networks.

Schedule of Business Acquisitions by Acquisition [Text Block]
Schedule of Business Acquisitions, by Acquisition [Table]



Business Acquisition [Line Items]



Business Acquisition, Cost of Acquired Entity, Purchase Price [Abstract]



Business Acquisition, Cost of Acquired Entity, Cash Paid Gross
546
962
(Less) Business Acquisition, Cost of Acquired Entity, Cash Acquired
(7)
(74)
Business Acquisition, Cost of Acquired Entity, Cash Paid, Net of Cash Acquired
539
888
1,293
Business Acquisition, Purchase Price Allocation [Abstract]



Business Acquisition, Purchase Price Allocation, Status
Preliminary
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net
552
888
Business Acquisition, Purchase Price Allocation, Current Assets [Abstract]



Business Acquisition, Purchase Price Allocation, Current Assets, Receivables
69
76
Business Acquisition, Purchase Price Allocation, Current Assets, Inventory
79
55
Business Acquisition, Purchase Price Allocation, Current Assets, Prepaid Expense and Other Assets
5
8
Business Acquisition, Purchase Price Allocation, Noncurrent Assets [Abstract]



Business Acquisition, Purchase Price Allocation, Property, Plant and Equipment
68
65
Business Acquisition, Purchase Price Allocation, Purchased Intangible Assets
131
282
Business Acquisition, Purchase Price Allocation, In-process Research And Development
1
95
(Less) Business Acquisition, Purchase Price Allocation, Accounts Payable and Other Current Liabilities, Net of Other Assets
(115)
(152)
Business Acquisition, Purchase Price Allocation, Noncurrent Liabilities [Abstract]



(Less) Business Acquisition, Purchase Price Allocation, Deferred Tax Liability
(12)
(77)
Business Acquisition, Purchase Price Allocation, Goodwill Amount
326
536
Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable [Text Block]
Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable [Table]



Business Acquisition, Equity Interests Issued or Issuable [Line Items]



(Less) Business Acquisition, Equity Interest Issued or Issuable, Value Assigned
13
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Text Block]
Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table]



Acquired Finite-Lived Intangible Assets [Line Items]



Acquired Indefinite-lived Intangible Asset, Amount
124
282
268
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life
6.00
9.00
Major Class of Acquired Finite-lived Intangible Asset, Minimum Useful Life
2.00
1.00
5.00
Major Class of Acquired Finite-lived Intangible Asset, Maximum Useful Life
10.00
17.00
20.00
Major Class of Acquired Finite-lived Intangible Asset, Amortization Method
Straight-Line
Straight-Line
Straight-line
Schedule of Business Divestitures by Divestiture [Text Block]
Schedule of Business Divestitures by Divestiture [Table]



Business Divestiture [Line Items]
Business Divestitures, Name of Acquirer Entity
Meda AB
Business Divestiture, Date of Divestiture
January 2007
Proceeds from Divestiture of Businesses
897
1,209

006030 - Disclosure - Note 3 - Goodwill and Intangible Assets
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Goodwill and Intangible Assets Disclosure [Abstract]



Goodwill and Intangible Assets Disclosure [Text Block]
NOTE 3. Goodwill and Intangible Assets
As discussed in Note 16 to the Consolidated Financial Statements, effective in the first quarter of 2007, 3M made certain product moves between its business segments, which resulted in changes in the goodwill balances by business segment as presented below. For those changes that resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact to reporting units. SFAS No. 142, "Goodwill and Other Intangible Assets," requires that goodwill be tested for impairment at least annually and when reporting units are changed.
Purchased goodwill from acquisitions totaled $326 million in 2007, $55 million of which is deductible for tax purposes. Purchased goodwill from acquisitions totaled $536 million in 2006, $41 million of which is deductible for tax purposes. The sale of 3M's global branded pharmaceuticals business (Health Care) resulted in the write-off of $54 million in goodwill, which is reflected in the 2006 translation and other column below. Changes in foreign currency exchange rates impacted both 2007 and 2006 goodwill balances. The goodwill balance by business segment follows:

Goodwill
2006 2007
Dec. 31, 2006 translation Dec. 31, 2007 translation Dec. 31,
2005 acquisition and 2006 acquisition and 2007
(Millions) Balance activity other Balance activity other Balance
Industrial and Transportation $1,283 $26 $(7) $1,302 $155 $67 $1,524
Health Care 559 191 (37) 713 73 53 839
Display and Graphics 871 12 3 886 - 8 894
Consumer and Office 71 11 7 89 - 5 94
Safety, Security and
Protection Services 234 264 27 525 70 16 611
Electro and Communications 512 32 23 567 28 32 627
Total Company $3,530 $536 $16 $4,082 $326 $181 $4,589

Acquired Intangible Assets

The carrying amount and accumulated amortization of acquired intangible assets as of December 31 follow:

(Millions) 2007 2006
Patents $446 $419
Other amortizable intangible assets
(primarily tradenames and customer-related intangibles) 801 641
Non-amortizable intangible assets (tradenames) 75 68
Total gross carrying amount $1,322 $1,128
Accumulated amortization - patents (305) (266)
Accumulated amortization - other 216) (154)
Total accumulated amortization (521) (420)
Total intangible assets - net $801 $708

Amortization expense for acquired intangible assets for the years ended December 31 follows:

(Millions) 2007 2006 2005
Amortization expense $87 $89 $48

Expected amortization expense for acquired intangible assets recorded as of December 31, 2007 follows:
After
(Millions) 2008 2009 2010 2011 2012 2012
Amortization expense $100 $98 $89 $81 $72 $286

The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events.
Schedule of Goodwill [Text Block]
Schedule of Goodwill [Table]



Goodwill [Line Items]



Goodwill [Roll Forward]



Goodwill, Beginning Balance
4,082
3,530
Goodwill, Acquired During Period
326
536
Goodwill, Translation and Purchase Accounting Adjustments
181
16
Goodwill, Ending Balance
4,589
4,082
3,530
Intangible Assets Disclosure [Text Block]
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Text Block]
Schedule of Acquired Finite-Lived Intangible Asset by Major Class [Table]



Major Class Of Acquired Intangible Asset [LineItems]



Acquired Intangible Assets, Net [Abstract]



Acquired Intangible Assets, Gross
1,128
(Less) Accumulated Amortization, Acquired Intangible Assets
(420)
Acquired Intangible Assets, Net
708
Acquired Finite-Lived Intangible Assets, Amortization Expense
87
89
48
Acquired Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]



Future Amortization Expense, Year One
100
Future Amortization Expense, Year Two
98
Future Amortization Expense, Year Three
89
Future Amortization Expense, Year Four
81
Future Amortization Expense, Year Five
72
Future Amortization Expense, After Year Five
286

006040 - Disclosure - Note 4 - Restructuring Actions and Other Exit Activities
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Restructuring Actions and Other Exit Activities [Abstract]



Restructuring and Related Activities Disclosure [Text Block]
NOTE 4. Restructuring Actions and Other Exit Activities

Restructuring Actions:

During the fourth quarter of 2006 and the first six months of 2007, management approved and committed to undertake the following restructuring actions:

* Pharmaceuticals business actions - employee-related, asset impairment and other costs pertaining to the Company's exit of its branded pharmaceuticals operations. These costs included severance and benefits for pharmaceuticals business employees who are not obtaining employment with the buyers as well as impairment charges associated with certain assets not transferred to the buyers.

* Overhead reduction actions - employee-related costs for severance and benefits, costs associated with actions to reduce the Company's cost structure.

* Business-specific actions - employee-related costs for severance and benefits, fixed and intangible asset impairments, certain contractual obligations, and expenses from the exit of certain product lines.

Components of these restructuring actions include:


Restructuring Actions
Employee- Contract
Related Items Terminations Asset
(Millions) And Benefits and Other Impairments Total
Expense incurred in 2006:
Pharmaceuticals business actions $97 $8 $61 $166
Overhead reduction actions 112 - - 112
Business-specific actions 34 8 83 125
Total 2006 expense $243 $16 $144 $403
Non-cash changes in 2006:
Pharmaceuticals business actions $(19) $- $(61) $(80)
Overhead reduction actions (12) - - (12)
Business-specific actions (4) - (83) (87)
Total 2006 non-cash $(35) $- $(144) $(179)
Cash payments in 2006:
Pharmaceuticals business actions $- $(2) $- $(2)
Overhead reduction actions - - - -
Business-specific actions - - - -
Total 2006 cash payments $- $(2) $- $(2)
Accrued liability balances as of Dec. 31, 2006:
Pharmaceuticals business actions $78 $6 $- $84
Overhead reduction actions 100 - - 100
Business-specific actions 30 8 - 38
Total accrued balance $208 $14 $- $222
Expenses (credits) incurred in 2007:
Pharmaceuticals business actions $(12) $(4) $- $(16)
Overhead reduction actions 2 - - 2
Business-specific actions 13 4 35 52
2007 expense $3 $- $35 $38
Non-cash changes in 2007:
Pharmaceuticals business actions $(21) $4 $- $(17)
Overhead reduction actions (5) - - (5)
Business-specific actions (12) (4) (35) (51)
2007 non-cash $(38) $- $(35) $(73)
Cash payments in 2007:
Pharmaceuticals business actions $(40) $(6) $- $(46)
Overhead reduction actions (87) - - (87)
Business-specific actions (26) (8) - (34)
2007 cash payments $(153) $(14) $- $(167)
Accrued liability balances as of Dec. 31, 2007:
Pharmaceuticals business actions $5 $- $- $5
Overhead reduction actions 10 - - 10
Business-specific actions 5 - - 5
Total accrued liability balance $20 $- $- $20

Income statement line in which the preceding 2007 and 2006 expenses (credits) are reflected:

(Millions) 2007 2006
Cost of sales $40 $130
Selling, general and administrative expenses 5 198
Research, development and related expenses (7) 75
Total $38 $403

The amount of expenses (credits) incurred in 2007 and 2006 associated with the preceding are reflected in the Company's business segments as follows:

(Millions) 2007 2006
Industrial and Transportation $2 $15
Health Care (11) 293
Display and Graphics 3 39
Safety, Security and Protection Services 28 10
Electro and Communications 18 46
Corporate and Unallocated (2) -
Total $38 $403

Actions with respect to the above activities were substantially completed in 2007 and additional charges and adjustments are not expected to be material.

In connection with this targeted restructuring plan, the Company eliminated a total of approximately 1,900 positions from various functions within the Company. Approximately 390 positions were pharmaceuticals business employees, approximately 960 positions related primarily to corporate staff overhead reductions, and approximately 550 positions were business-specific reduction actions. Of the 1,900 employment reductions, about 58% are in the United States, 21% in Europe, 12% in Latin America and Canada, and 9% in the Asia Pacific area. As a result of the second-quarter 2007 phase-out of operations at a New Jersey roofing granule facility and the sale of the Company's Opticom Priority Control Systems and Canoga Traffic Detection businesses, the Company eliminated approximately 100 additional positions.

Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans and were reflected in the quarter in which management approved the restructuring actions. Severance amounts for which affected employees were required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees' remaining service periods.

Non-cash employee-related changes in 2007 and 2006 primarily relate to special termination pension and medical benefits granted to certain U.S. eligible employees. These pension and medical benefits were reflected as a component of the benefit obligation of the Company's pension and medical plans as of December 31, 2007 and 2006. In addition, these changes also reflect non-cash stock option expense due to the reclassification of certain employees age 50 and older to retiree status, resulting in a modification of their original stock option awards for accounting purposes.

Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company.

Business-specific asset impairment charges for 2007 totaled $35 million. This included charges of $24 million related to property, plant and equipment associated with the Company's decision to phase-out operations at a New Jersey roofing granule facility (Safety, Security and Protection Services segment) and charges of $11 million ($10 million related to property, plant and equipment and $1 million related to intangible assets) related to the Company's decision to close an Electro and Communications facility in Wisconsin. Asset impairment charges related to intangible assets and property, plant and equipment reflect the excess of the assets' carrying values over their fair values.

Asset impairment charges in 2006 associated with the pharmaceuticals business and business-specific actions include $109 million relative to property, plant and equipment; $30 million relative to intangible assets; and $5 million relative to other assets. Impairment charges relative to intangible assets and property, plant and equipment reflect the excess of the assets' carrying values over their fair values as discussed in Note 1. The pharmaceuticals business asset impairment charges are for certain assets not transferred to the buyers and primarily relate to the write-down of the assets to salvage value. The business-specific asset impairment charges primarily relate to decisions the Company made in the fourth quarter of 2006 to exit certain marginal product lines in the Display and Graphics segment and Electro and Communications segment.

Other Exit Activities:

During the second half of 2007, the Company recorded net pre-tax charges of $45 million related to exit activities. These charges related to employee reductions and fixed asset impairments, including the consolidation of certain flexible circuit manufacturing operations ($23 million recorded in the Electro and Communications segment) and other actions, primarily in the Display and Graphics segment and Industrial and Transportation segment. These charges were recorded in cost of sales and selling, general and administrative expenses and research, development and related expenses.
Restructuring and Related Activities, Description
During the fourth quarter of 2006 and the first six months of 2007, management approved and committed to undertake the following restructuring actions:

Pharmaceuticals business actions - employee-related, asset impairment and other costs pertaining to the Company's exit of its branded pharmaceuticals operations. These costs included severance and benefits for pharmaceuticals business employees who are not obtaining employment with the buyers as well as impairment charges associated with certain assets not transferred to the buyers.

Overhead reduction actions - employee-related costs for severance and benefits, costs associated with actions to reduce the Company's cost structure.

Business-specific actions - employee-related costs for severance and benefits, fixed and intangible asset impairments, certain contractual obligations, and expenses from the exit of certain product lines.
Schedule of Restructuring Reserve by Type of Cost [Text Block]
In connection with this targeted restructuring plan, the Company eliminated a total of approximately 1,900 positions from various functions within the Company. Approximately 390 positions were pharmaceuticals business employees, approximately 960 positions related primarily to corporate staff overhead reductions, and approximately 550 positions were business-specific reduction actions. Of the 1,900 employment reductions, about 58% are in the United States, 21% in Europe, 12% in Latin America and Canada, and 9% in the Asia Pacific area. As a result of the second-quarter 2007 phase-out of operations at a New Jersey roofing granule facility and the sale of the Company's Opticom Priority Control Systems and Canoga Traffic Detection businesses, the Company eliminated approximately 100 additional positions.

Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans and were reflected in the quarter in which management approved the restructuring actions. Severance amounts for which affected employees were required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees' remaining service periods.

Non-cash employee-related changes in 2007 and 2006 primarily relate to special termination pension and medical benefits granted to certain U.S. eligible employees. These pension and medical benefits were reflected as a component of the benefit obligation of the Company's pension and medical plans as of December 31, 2007 and 2006. In addition, these changes also reflect non-cash stock option expense due to the reclassification of certain employees age 50 and older to retiree status, resulting in a modification of their original stock option awards for accounting purposes.

Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company.

Business-specific asset impairment charges for 2007 totaled $35 million. This included charges of $24 million related to property, plant and equipment associated with the Company's decision to phase-out operations at a New Jersey roofing granule facility (Safety, Security and Protection Services segment) and charges of $11 million ($10 million related to property, plant and equipment and $1 million related to intangible assets) related to the Company's decision to close an Electro and Communications facility in Wisconsin. Asset impairment charges related to intangible assets and property, plant and equipment reflect the excess of the assets' carrying values over their fair values.

Asset impairment charges in 2006 associated with the pharmaceuticals business and business-specific actions include $109 million relative to property, plant and equipment; $30 million relative to intangible assets; and $5 million relative to other assets. Impairment charges relative to intangible assets and property, plant and equipment reflect the excess of the assets' carrying values over their fair values as discussed in Note 1. The pharmaceuticals business asset impairment charges are for certain assets not transferred to the buyers and primarily relate to the write-down of the assets to salvage value. The business-specific asset impairment charges primarily relate to decisions the Company made in the fourth quarter of 2006 to exit certain marginal product lines in the Display and Graphics segment and Electro and Communications segment.

Other Exit Activities

During the second half of 2007, the Company recorded net pre-tax charges of $45 million related to exit activities. These charges related to employee reductions and fixed asset impairments, including the consolidation of certain flexible circuit manufacturing operations ($23 million recorded in the Electro and Communications segment) and other actions, primarily in the Display and Graphics segment and Industrial and Transportation segment. These charges were recorded in cost of sales and selling, general and administrative expenses and research, development and related expenses.
Schedule of Restructuring Reserve by Type of Restructuring [Table]



Restructuring Reserve [Line Items]



Restructuring Reserve, Adjustment Description
Restructuring Reserve, Period Expense
38
403
Restructuring Reserve, Settled without Cash
73
179
Restructuring Reserve, Settled with Cash
167
2
Restructuring Reserve, Accrual Adjustment
20
222
Income Statement Restructuring Expenses [Text Block]
Income statement line in which the preceding 2007 and 2006 expenses (credits) are reflected:

See also: mmm-20071231-Note04-2-IncomeStatementImpact.html
Income Statement Restructuring Expenses [Abstract]



Income Statement Restructuring Expenses By Segment [Table]



Income Statement Restructuring Reserve [Line Items]



Cost of Sales, Restructuring Expenses
40
130
Selling, General and Administrative Expenses, Restructuring Expenses
5
198
Research, Development and Related Expenses, Restructuring Expenses
(7)
75
Income Statement Restructuring Expenses
38
403

006050 - Disclosure - Note 5 - Supplemental Balance Sheet Information
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Supplemental Balance Sheet Information [Abstract]



Supplemental Balance Sheet Information [Text Block]
NOTE 5. Supplemental Balance Sheet Information


(Millions) 2007 2006
Other current assets
Product and other insurance receivables $220 $255
Deferred income taxes 428 412
Prepaid expenses and other 501 658
Total other current assets $1,149 $1,325

Investments
Available-for-sale (fair value) $16 $14
Equity-method 64 86
Cash surrender value of life insurance policies, real estate and other (cost, which approximates fair value) 218 214
Total investments $298 $314

Property, plant and equipment - at cost
Land $303 $281
Buildings and leasehold improvements 5,496 5,002
Machinery and equipment 11,801 11,130
Construction in progress 684 505
Capital leases 106 99
Gross property, plant and equipment 18,390 17,017
Accumulated depreciation* (11,808) (11,110)
Property, plant and equipment - net $6,582 $5,907

*Includes accumulated depreciation for capital leases of $42 million for 2007 and $37 million for 2006.

Other assets
Product and other insurance receivables $318 $373
Deferred income taxes 176 253
Other 234 150
Total other assets $728 $776

Other current liabilities
Accrued trade payables $458 $556
Employee benefits and withholdings 228 168
Deferred income 323 299
Property and other taxes 169 176
Product and other claims 120 115
Non-funded pension benefits 35 31
Deferred income taxes 22 7
Other 478 409
Total other current liabilities $1,833 $1,761

Accounts payable (included as a separate line item in the Consolidated Balance Sheet) includes drafts payable on demand of $44 million and $65 million as of December 31, 2007, and 2006, respectively.


Supplemental Balance Sheet Information (continued)

(Millions) 2007 2006
Other liabilities
Non-funded pension and postretirement benefits $1,348 $1,437
Employee benefits 576 602
Product and other claims 372 311
Deferred income taxes 355 84
Long term taxes payable 310 -
Minority interest in subsidiaries 325 278
Deferred income 36 50
Capital lease obligations 69 65
Other 175 138
Total other liabilities $3,566 $2,965
Other Assets, Current [Abstract]



Product and Other Insurance Receivables
220
255
Deferred Tax Assets, Net, Current
428
412
Prepaid Expenses and Other Current
501
658
Other Assets, Current, Total
1,149
1,325
Long-term Investments [Abstract]



Available-for-sale Securities, Noncurrent
16
14
Equity Method Investments
64
86
Cash Surrender Value of Life Insurance Policies, Real Estate and Other (Cost, Which Approximates Fair Value)
218
214
Long-term Investments, Total
298
314
Property, Plant and Equipment [Abstract]



Land
303
281
Building and Leasehold Improvements
5,496
5,002
Machinery and Equipment, Gross
11,801
11,130
Construction in Progress, Gross
684
505
Capital Leased Assets, Gross
106
99
Property, Plant and Equipment, Gross
18,390
17,017
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
11,808
11,110
Property, Plant and Equipment, Net
6,582
5,907
Assets, Noncurrent [Abstract]



Product and Other Insurance Receivables - Other Assets
318
373
Deferred Tax Assets, Net, Noncurrent
176
253
Other Assets, Other, Current
234
150
Other Assets, Noncurrent, Total
728
776
Other Liabilities, Current [Abstract]



Accrued Trade Payables
458
556
Employee Benefits and Withholdings
228
168
Deferred Revenue, Current
323
299
Accrual for Taxes Other than Income Taxes
169
176
Product and Other Claims, Current
120
115
Non-Funded Pension Benefits
35
31
Deferred Tax Liabilities, Current
22
7
Other Liabilities, Other, Current
478
409
Other Liabilities, Current
1,833
1,761
Other Liabilities, Noncurrent [Abstract]



Non-Funded Pension and Postretirement Benefits
1,348
1,437
Employee Benefits, Noncurrent
576
602
Product and Other Claims, Noncurrent
372
311
Deferred Tax Liabilities, Noncurrent
355
84
Long-term Taxes Payable
310
Minority Interest
325
278
Deferred Revenue, Noncurrent
36
50
Capital Lease Obligations, Noncurrent
69
65
Other Liabilities, Other, Noncurrent
175
138
Other Liabilities, Noncurrent
3,566
2,965

006060 - Disclosure - Note 6 - Supplemental Stockholders' Equity and Accumulated Other Compehensive Income
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Supplemental Stockholders' Equity and Accumulated Other Comprehensive Income [Abstract]



Supplemental Stockholders Equity and Accumulated Other Comprehensive Income Information [Text Block]
NOTE 6. Supplemental Stockholders' Equity and Accumulated Other Comprehensive Income Information

Common stock ($.01 par value per share) of 3.0 billion shares is authorized, with 944,033,056 shares issued. Treasury stock is reported at cost, with 234,877,025 shares at December 31, 2007, 209,670,254 shares at December 31, 2006, and 189,494,669 shares at December 31, 2005. Preferred stock, without par value, of 10 million shares is authorized but unissued.

The components of the ending balances of accumulated other comprehensive income (loss) as of December 31 follow:

Accumulated Other Comprehensive Income (Loss)

(Millions) 2007 2006 2005
Cumulative translation adjustment
Balance at January 1 $210 $(296) $282
Pre-tax amount 456 503 (597)
Tax effect 76 3 19
Net of tax amount 532 506 (578)
Balance at December 31 742 210 (296)

Defined benefit pension plans adjustment
Balance at January 1 (2,067) (156) (110)
Pre-tax amount 941 (3,208) (28)
Tax effect (327) 1,297 (18)
Net of tax amount 614 (1,911) (46)
Balance at December 31 (1,453) (2,067) (156)

Unrealized gain (loss) on debt and equity securities
Balance at January 1 2 3 2
Pre-tax amount (16) (1) 2
Tax effect 6 - (1)
Net of tax amount (10) (1) 1
Balance at December 31 (8) 2 3

Unrealized gain (loss) on cash flow hedging instruments
Balance at January 1 (18) 38 (42)
Pre-tax amount (24) (85) 126
Tax effect 14 29 (46)
Net of tax amount (10) (56) 80
Balance at December 31 (28) (18) 38

Total accumulated other comprehensive income (loss)
Balance at January 1 (1,873) (411) 132
Pre-tax amount 1,374 (2,791) (497)
Tax effect (248) 1,329 (46)
Net of tax amount 1,126 (1,462) (543)
Balance at December 31 $(747) $(1,873) $(411)

In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)." This standard eliminated the requirement for a "minimum pension liability adjustment" that was previously required under SFAS No. 87 and required employers to recognize the underfunded or overfunded status of a defined benefit plan as an asset or liability in its statement of financial position. In 2006, as a result of the implementation of SFAS No. 158, the Company recognized an after-tax decrease in accumulated other comprehensive income of $1.187 billion and $513 million for the U.S. and International pension benefit plans, respectively, and $218 million for the postretirement health care and life insurance benefit plan. See Note 11 for additional detail.

Reclassification adjustments are made to avoid double counting in comprehensive income items that are also recorded as part of net income. In 2007, as disclosed in the net periodic benefit cost table in Note 11, $198 million pre-tax ($123 million after-tax) were reclassified to earnings from accumulated other comprehensive income to pension and postretirement expense in the income statement. These pension and postretirement expense amounts are shown in the table in Note 11 as amortization of transition (asset) obligation, amortization of prior service cost (benefit) and amortization of net actuarial (gain) loss. Other reclassification adjustments (except for cash flow hedging instruments adjustments provided in Note 12) were not material. No tax provision has been made for the translation of foreign currency financial statements into U.S. dollars.
Stockholders' Equity [Abstract]



Common Stock, Par or Stated Value Per Share
0.01
0.01
Common Stock, Shares, Issued
944,033,056
Treasury Stock, Shares
234,877,025
209,670,254
189,494,669
Preferred Stock, Par or Stated Value Per Share
0.00
Preferred Stock, Shares Authorized
10,000,000
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Abstract]



Other Comprehensive Income, Foreign Currency Translation Gain (Loss) Arising During Period [Abstract]



Other Comprehensive Income, Foreign Currency Translation Gain (Loss) Arising During Period, Beginning Balance
210
(296)
456
Other Comprehensive Income, Foreign Currency Transaction and Translation Adjustment, before Tax, Period Increase (Decrease)
456
503
76
Other Comprehensive Income, Foreign Currency Translation Adjustment, Tax
76
3
532
Other Comprehensive Income, Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax
532
506
(578)
Other Comprehensive Income, Foreign Currency Translation Gain (Loss) Arising During Period, Ending Balance
742
210
(296)
Other Comprehensive Income, Benefit Plans Net Gain (Loss) [Abstract]



Other Comprehensive Income, Benefit Plans Net Gain (Loss), Beginning Balance
(2,067)
(1,453)
(2,067)
Other Comprehensive Income, Defined Benefit Plan's Adjustment, before Tax, Period Increase (Decrease)
941
(3,208)
941
Other Comprehensive Income, Defined Benefit Plans, Tax
(327)
1,297
(327)
Other Comprehensive Income, Defined Benefit Plan's Net Unamortized (Gain) Loss Arising During Period, Net of Tax
614
7
(46)
Other Comprehensive Income, Benefit Plans Net Gain (Loss), Ending Balance
(1,453)
(2,067)
(1,453)
Other Comprehensive Income, Unrealized Holding Gain (Loss) on Securities Arising During Period [Abstract]



Other Comprehensive Income, Unrealized Holding Gain (Loss) on Securities Arising During Period, Beginning Balance
2
(10)
2
Other Comprehensive Income, Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax
(16)
(1)
2
Other Comprehensive Income, Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax
6
(16)
Debt and Equity Securities - Unrealized Gain (Loss)
(10)
(1)
1
Other Comprehensive Income, Unrealized Holding Gain (Loss) on Securities Arising During Period, Ending Balance
(8)
2
(10)
Other Comprehensive Income Unrealized Gain (Loss) on Derivatives Arising During Period [Abstract]



Other Comprehensive Income Unrealized Gain (Loss) on Derivatives Arising During Period, Beginning Balance
(18)
14
(42)
Other Comprehensive Income, Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax
(24)
(85)
126
Other Comprehensive Income, Unrealized Gain (Loss) on Derivatives Arising During Period, Tax
14
29
(18)
Cash Flow Hedging Instruments - Unrealized Gain (Loss)
(10)
(56)
80
Other Comprehensive Income Unrealized Gain (Loss) on Derivatives Arising During Period, Ending Balance
(28)
(18)
14
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]



Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance
(1,873)
(411)
(28)
Other Comprehensive Income (Loss), before Tax, Period Increase (Decrease)
1,374
(2,791)
(497)
Other Comprehensive Income (Loss), Tax
(248)
1,329
(46)
Other Comprehensive Income (Loss), Net of Tax, Period Increase (Decrease)
1,126
(1,462)
(1,873)
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance
(747)
(1,873)
(411)

006070 - Disclosure - Note 7 - Supplemental Cash Flow Information
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Supplemental Cash Flow Information [Abstract]



Cash Flow, Supplemental Disclosures [Text Block]
NOTE 7. Supplemental Cash Flow Information

(Millions) 2007 2006 2005
Cash income tax payments $1,999 $1,842 $1,277
Cash interest payments 162 119 79
Capitalized interest 25 16 12

Individual amounts in the Consolidated Statement of Cash Flows exclude the impacts of acquisitions, divestitures and exchange rate impacts, which are presented separately. "Other - net" in the Consolidated Statement of Cash Flows within operating activities in 2007 and 2006 includes changes in liabilities related to 3M's restructuring actions (Note 4) and in 2005 includes the non-cash impact of adopting FIN 47 ($35 million cumulative effect of accounting change).

Transactions related to investing and financing activities with significant non-cash components are as follows: In 2007, 3M purchased certain assets of Diamond Productions, Inc. for approximately 150 thousand shares of 3M common stock, which has a market value of approximately $13 million at the acquisition's measurement date. Liabilities assumed from acquisitions are provided in the tables in Note
Income Taxes Paid
1,999
1,842
1,277
Interest Paid
162
119
79
Cash Paid for Capitalized Interest
25
16
12
Noncash or Part Noncash Acquisitions [Table]



Noncash or Part Noncash Acquisitions [Line Items]



Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued
150,000
Other Significant Noncash Transaction, Consideration Given
3M Common Stock
Other Significant Noncash Transaction, Value of Consideration Given
13
Other Noncash Investing and Financing Items [Abstract]



Adoption of FIN 47, Cumulative Effect of Accounting Changes
35
Adoption of FIN 47, Cumulative Effect of Accounting Changes, Cash Flow Statement Caption
Other - net

006080 - Disclosure - Note 8 - Income Taxes
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Income Tax Disclosure [Abstract]



Income Tax Disclosure [Text Block]
Reclassification adjustments are made to avoid double counting in comprehensive income items that are also recorded as part of net income. In 2007, as disclosed in the net periodic benefit cost table in Note 11, $198 million pre-tax ($123 million after-tax) were reclassified to earnings from accumulated other comprehensive income to pension and postretirement expense in the income statement. These pension and postretirement expense amounts are shown in the table in Note 11 as amortization of transition (asset) obligation, amortization of prior service cost (benefit) and amortization of net actuarial (gain) loss. Other reclassification adjustments (except for cash flow hedging instruments adjustments provided in Note 12) were not material. No tax provision has been made for the translation of foreign currency financial statements into U.S. dollars.
Income (Loss) from Continuing Operations before Income Taxes, Minority Interest, and Income (Loss) from Equity Method Investments [Abstract]



Income (Loss) from Continuing Operations before Income Taxes, Domestic
2,820
3,191
2,604
Income (Loss) from Continuing Operations before Income Taxes, Foreign
3,295
2,434
2,224
Income (Loss) from Continuing Operations before Income Taxes, Minority Interest, and Income (Loss) from Equity Method Investments, Total
6,115
5,625
4,828
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract]



Income Tax Expense (Benefit), Continuing Operations [Abstract]



Current Income Tax Expense (Benefit), Continuing Operations [Abstract]



Current Federal Tax Expense (Benefit)
1,116
1,087
709
Current Foreign Tax Expense (Benefit)
779
824
704
Current State and Local Tax Expense (Benefit)
58
128
82
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract]



Deferred Federal Income Tax Expense (Benefit)
(105)
(261)
127
Deferred Foreign Income Tax Expense (Benefit)
115
(31)
(6)
Deferred State and Local Income Tax Expense (Benefit)
1
(24)
11
Income Tax Expense (Benefit), Continuing Operations, Total
1,964
1,723
1,627
Income Tax Expense (Benefit), Continuing Operations, by Jurisdiction [Abstract]



Federal Income Tax Expense (Benefit), Continuing Operations [Abstract]



Current Federal Tax Expense (Benefit)
1,116
1,087
709
Deferred Federal Income Tax Expense (Benefit)
(105)
(261)
127
State and Local Income Tax Expense (Benefit), Continuing Operations [Abstract]



Current State and Local Tax Expense (Benefit)
58
128
82
Deferred State and Local Income Tax Expense (Benefit)
1
(24)
11
Income Tax Expense (Benefit), Continuing Operations, Total
1,964
1,723
1,627
Deferred Tax Assets (Liabilities), Net [Abstract]



Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Pensions
(99)
478
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Employee Benefits
240
206
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost
377
335
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Product and Other Claims
258
190
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Restructuring Charges
2
66
Deferred Tax Assets, Other
6
(4)
(Less) Deferred Tax Liabilities, Property, Plant and Equipment
(403)
(541)
(Less) Deferred Tax Liabilities, Product and Other Insurance Receivables
(154)
(156)
Deferred Tax Assets (Liabilities), Net, Total
227
574
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]



Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate
35%
35%
35%
(Less) Effective Income Tax Rate Reconciliation, State and Local Income Taxes
0.9%
1%
1.3%
(Less) Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential
(2.8%)
(1.5%)
(2.2%)
Effective Income Tax Rate Reconciliation, Tax Credits [Abstract]



(Less) Effective Income Tax Rate Reconciliation, Tax Credits
(0.3%)
(0.3%)
(0.4%)
Effective Income Tax Rate Reconciliation, Tax Credits, Other
(30%)
(30%)
(40%)
Effective Income Tax Rate Reconciliation, Nondeductible Expense [Abstract]



Effective Income Tax Rate Reconciliation, Nondeductible Expense, Restructuring Charges
0.1%
(0.3%)
0%
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Research and Development
0%
0.6%
0%
Effective Income Tax Rate Reconciliation, Deductions [Abstract]



Effective Income Tax Rate Reconciliation, Deductions, Extraterritorial Income Exclusion
0%
(0.9%)
(1%)
Effective Income Tax Rate Reconciliation, Deductions, Qualified Production Activities
(0.8%)
(0.3%)
(0.2%)
Effective Income Tax Rate Reconciliation, Deductions, Medicare Prescription Drug Benefit
(0.4%)
(0.4%)
(0.3%)
Effective Income Tax Rate Reconciliation, Tax Contingencies [Abstract]



Effective Income Tax Rate Reconciliation, Tax Contingencies, Total
0.4%
(2.7%)
0%
Effective Income Tax Rate Reconciliation, Disposition of Business
0%
0.4%
0%
Effective Income Tax Rate Reconciliation, Repatriation Foreign Earnings, Jobs Creation Act of 2004
0%
0%
1.6%
Effective Income Tax Rate Reconciliation, Other Adjustments
0%
0%
(0.1%)
Effective Income Tax Rate, Continuing Operations, Total
32.1%
30.6%
33.7%
Foreign Earnings Repatriated under American Jobs Creation Act of 2004 [Abstract]



Foreign Earnings Repatriated under American Jobs Creation Act of 2004, Description
In 2005, the Company announced its intent to reinvest $1.7 billion of foreign earnings in the United States pursuant to the provisions of the American Jobs Creation Act of 2004. This Act provided the Company the opportunity to tax-efficiently repatriate foreign earnings for U.S. qualifying investments specified in its domestic reinvestment plan. As a consequence, in 2005, 3M recorded a charge of $75 million.
Foreign Earnings Repatriated under American Jobs Creation Act of 2004, Repatriated Earnings
1,700
Income Tax Uncertainties [Abstract]



Summary of Income Tax Contingencies [Text Block]
The Company adopted the provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," on January 1, 2007. As a result of the implementation of Interpretation 48, the Company recognized an immaterial increase in the liability for unrecognized tax benefits, which was accounted for as a reduction to the January 1, 2007, balance of retained earnings. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits ("UTB") is as follows: The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of January 1, 2007 and December 31, 2007, respectively, are $261 million and $334 million. The ending net UTB results from adjusting the gross balance at December 31, 2007 for items such as Federal, State, and non-U.S. deferred items, interest and penalties, and deductible taxes. The net UTB is included as components of Accrued Income Taxes and Other Liabilities within the Consolidated Balance Sheet.
Income Tax Contingency [Line Items]



Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]



Unrecognized Tax Benefits, Beginning Balance
691
Unrecognized Tax Benefits, Increases Resulting from Prior Period Tax Positions
143
Unrecognized Tax Benefits, Decreases Resulting from Prior Period Tax Positions
189
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions
79
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities
24
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations
20
Unrecognized Tax Benefits, Ending Balance
680
691
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
334
261
Income Tax Examinations [Abstract]



Summary of Income Tax Examinations [Text Block]
The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 1999. It is anticipated that its examination for the Company's U.S. income tax returns for the years 2002 through 2004 will be completed by the end of first quarter 2008. As of December 31, 2007, the IRS has proposed adjustments to the Company's tax positions for which the Company is fully reserved. Payments relating to any proposed assessments arising from the 2002 through 2004 audit may not be made until a final agreement is reached between the Company and the IRS on such assessments or upon a final resolution resulting from the administrative appeals process or judicial action. In addition to the U.S. federal examination, there is also limited audit activity in several U.S. state and foreign jurisdictions. Currently, the Company expects the liability for unrecognized tax benefits to change by an insignificant amount during the next 12 months
Income Tax Penalties and Interest, Policy
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. At January 1, 2007 and December 31, 2007, accrued interest and penalties on a gross basis were $65 million and $69 million, respectively. Included in these interest and penalty amounts is interest and penalties related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.
Income Tax Examination, Penalties and Interest Accrued, Total
69
65
Other Information Pertaining to Income Taxes
The Company made discretionary contributions to its U.S. qualified pension plan of $200 million in 2007, $200 million in 2006, and $500 million in 2005. The current income tax provision includes a benefit for the pension contributions; the deferred tax provision includes a cost for the related temporary difference

006090 - Disclosure - Note 9 - Marketable Securities
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Marketable Securities Disclosure [Abstract]



Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
NOTE 9. Marketable Securities

The Company invests in asset-backed securities, agency securities, corporate medium-term note securities, auction rate securities and other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current) at December 31, 2007.

(Millions) Dec. 31, 2007

Agency securities $260
Asset-backed securities 186
Other securities 133
Current marketable securities 579
Asset-backed securities 267
Corporate medium-term notes securities 112
Agency securities 56
Auction rate securities 16
Other securities 29
Non-current marketable securities 480
Total marketable securities $1,059

Classification of marketable securities as current or non-current is dependent upon management's intended holding period, the security's maturity date and liquidity considerations based on market conditions. If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current. The fair value of marketable securities approximates cost, except for certain auction rate securities discussed in the next paragraph. Gross unrealized gains and losses for marketable securities were not material as of December 31, 2007 and 2006; however, in 2007 the Company did have both realized and unrealized losses associated with auction rate securities as discussed below. Gross realized gains and losses on sales of marketable securities were not material for 2007, 2006 or 2005, but in 2007 pre-tax gains totaled approximately $7 million. Cost of securities sold or reclassified use the first in, first out (FIFO) method. Since these marketable securities are classified as available-for-sale securities, changes in fair value will flow through other comprehensive income, with amounts reclassified out of other comprehensive income into earnings upon sale or "other-than-temporary" impairment (as discussed below).

3M has a diversified marketable securities portfolio of $1.059 billion as of December 31, 2007. Within this portfolio, current and long-term asset-backed securities (estimated fair value of $453 million) are primarily comprised of interests in automobile loans and credit cards, with only $27 million invested in interests in mortgage-backed securities or home equity loans. 3M's marketable securities portfolio also includes auction rate securities (estimated fair value of $16 million) that represent interests in collateralized debt obligations, which are collateralized by pools of residential and commercial mortgages, and interests in investment grade credit default swaps. During the second half of 2007, these auction rate securities failed to auction due to sell orders exceeding buy orders. Liquidity for these auction-rate securities is typically provided by an auction process that resets the applicable interest rate at pre-determined intervals, usually every 7, 28, 35, or 90 days. The funds associated with failed auctions will not be accessible until a successful auction occurs or a buyer is found outside of the auction process. Based on broker-dealer valuation models and an analysis of other-than-temporary impairment factors, auction rate securities with an original par value of approximately $34 million were written-down to an estimated fair value of $16 million as of December 31, 2007. This write-down resulted in an "other-than-temporary" impairment charge of approximately $8 million (pre-tax) included in net income and a temporary impairment charge of $10 million (pre-tax) reflected as an unrealized loss within other comprehensive income for 2007. As of December 31, 2007, these investments in auction rate securities have been in a loss position for less than six months. These auction rate securities are classified as non-current marketable securities as of December 31, 2007 as indicated in the preceding table.

3M reviews impairments associated with the above in accordance with Emerging Issues Task Force (EITF) 03-1 and FSP SFAS 115-1 and 124-1, "The Meaning of Other-Than-Temporary-Impairment and Its Application to Certain Investments," to determine the classification of the impairment as "temporary" or "other-than-temporary." A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of stockholders' equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. The company believes that a portion of the impairment of its auction rate securities investments is temporary and a portion is other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral.

The balance at December 31, 2007 for marketable securities and short-term investments by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

(Millions) Dec. 31, 2007

Due in one year or less $231
Due after one year through three years 545
Due after three years through five years 221
Due after five years 62

Total marketable securities $1,059
Available-for-sale Securities [Text Block]
Available-for-sale Securities, Narrative
The Company invests in asset-backed securities, agency securities, corporate medium-term note securities, auction rate securities and other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current) at December 31, 2007. Classification of marketable securities as current or non-current is dependent upon management's intended holding period, the security's maturity date and liquidity considerations based on market conditions. If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current.
Schedule of Available-for-sale Securities [Table]



Schedule of Available-for-sale Securities [Line Items]



Available-for-sale Securities, Balance Sheet, Reported Amounts [Abstract]



Marketable Securities [Abstract]



Marketable Securities, Current
579
471
Marketable Securities, Noncurrent
480
166
Marketable Securities, Total
1,059
Available-for-sale Securities, Debt Maturities [Abstract]



Available-for-sale Securities, Debt Maturities, Basis of Allocation
The balance at December 31, 2007 for marketable securities and short-term investments by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract]



Available-for-sale Securities, Debt Maturities, within One Year, Fair Value
231
Available-for-Sale Securities, Debt Maturities, after One Through Three Years, Fair Value
545
Available-for-Sale Securities, Debt Maturities, after Three Through Five Years, Fair Value
221
Available-for-Sale Securities, Debt Maturities, after Five Years, Fair Value
62
Available-for-sale Securities, Debt Maturities, Fair Value, Total
1,059
Available-for-sale Securities, Disclosures [Abstract]



Available-for-sale Securities, Basis for Valuation, Other than Equity Securities
The fair value of marketable securities approximates cost, except for certain auction rate securities discussed in the next paragraph.
Available-for-sale Securities, Unrealized Gain (Loss), Narrative
Gross unrealized gains and losses for marketable securities were not material as of December 31, 2007 and 2006; however, in 2007 the Company did have both realized and unrealized losses associated with auction rate securities as discussed below.
Available- for-sale Securities, Realized Gain (Loss), Narrative
Gross realized gains and losses on sales of marketable securities were not material for 2007, 2006 or 2005, but in 2007 pre-tax gains totaled approximately $7 million.
Available-for-sale Securities, Gross Realized Gain (Loss), Net
7
Available-for-sale Securities, Realized Gain (Loss), Securities Sold or Reclassified, Method
Cost of securities sold or reclassified use the first in, first out (FIFO) method. Since these marketable securities are classified as available-for-sale securities, changes in fair value will flow through other comprehensive income, with amounts reclassified out of other comprehensive income into earnings upon sale or "other-than-temporary" impairment (as discussed below).
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]



Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]



Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Nature
3M has a diversified marketable securities portfolio of $1.059 billion as of December 31, 2007. Within this portfolio, current and long-term asset-backed securities (estimated fair value of $453 million) are primarily comprised of interests in automobile loans and credit cards, with only $27 million invested in interests in mortgage-backed securities or home equity loans. 3M's marketable securities portfolio also includes auction rate securities (estimated fair value of $16 million) that represent interests in collateralized debt obligations, which are collateralized by pools of residential and commercial mortgages, and interests in investment grade credit default swaps.
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Cause
During the second half of 2007, these auction rate securities failed to auction due to sell orders exceeding buy orders. Liquidity for these auction-rate securities is typically provided by an auction process that resets the applicable interest rate at pre-determined intervals, usually every 7, 28, 35, or 90 days. The funds associated with failed auctions will not be accessible until a successful auction occurs or a buyer is found outside of the auction process.
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Severity
Based on broker-dealer valuation models and an analysis of other-than-temporary impairment factors, auction rate securities with an original par value of approximately $34 million were written-down to an estimated fair value of $16 million as of December 31, 2007. This write-down resulted in an "other-than-temporary" impairment charge of approximately $8 million (pre-tax) included in net income and a temporary impairment charge of $10 million (pre-tax) reflected as an unrealized loss within other comprehensive income for 2007. As of December 31, 2007, these investments in auction rate securities have been in a loss position for less than six months. These auction rate securities are classified as non-current marketable securities as of December 31, 2007 as indicated in the preceding table. 3M reviews impairments associated with the above in accordance with Emerging Issues Task Force (EITF) 03-1 and FSP SFAS 115-1 and 124-1, "The Meaning of Other-Than-Temporary-Impairment and Its Application to Certain Investments," to determine the classification of the impairment as "temporary" or "other-than-temporary." A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of stockholders' equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. The company believes that a portion of the impairment of its auction rate securities investments is temporary and a portion is other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral.
Available-for-sale Securities, Continuous Unrealized Loss Position, Original Par Value
34
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
16
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
10
Available-for-sale Securities, Unrealized Gain (Loss), "Other-than-temporary" Impairment Charge, Pre-Tax
8

006100 - Disclosure - Note 10 - Long-term Debt and Short-term Borrowings
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Long-term Debt and Short-term Borrowings Disclosure [Abstract]



Debt Disclosure [Text Block]
Long-term debt and short-term borrowings as of December 31 consisted of the following (with interest rates as of December 31, 2007):
Long-term Debt [Abstract]



Schedule of Long-term Debt [Text Block]
Long-term Debt, Interest Rate, Basis for Effective Rate
Debt tables reflect the effects of interest rate swaps at December 31; weighted-average effective interest rate table reflects the combined effects of interest rate and currency swaps at December 31.
Weighted Average Effective Interest Rates [Abstract]



Weighted Average Effective Interest Rate, Short-term, Total
5.1%
4.65%
Weighted Average Effective Interest Rate, Long-term, Total
4.48%
3.67%
Weighted Average Effective Interest Rate, Short-term, Excluding ESOP Debt
5.07%
4.63%
Weighted Average Effective Interest Rate, Long-term, Excluding ESOP Debt
4.47%
3.49%
Debt Instrument, Interest Rate, Basis for Effective Rate
Debt tables reflect the effects of interest rate swaps at December 31;
Short-term Debt, Interest Rate, Basis for Effective Rate
Debt tables reflect the effects of interest rate swaps at December 31; weighted-average effective interest rate table reflects the combined effects of interest rate and currency swaps at December 31.
Long-term Debt, by Maturity [Abstract]



Long-term Debt, Description
Maturities of long-term debt for the five years subsequent to December 31, 2007 are as follows (in millions):
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months
540
Long-term Debt, Maturities, Repayments of Principal in Year Two
477
Long-term Debt, Maturities, Repayments of Principal in Year Three
24
Long-term Debt, Maturities, Repayments of Principal in Year Five
500
Long-term Debt, Maturities, Repayments of Principal after Year Five
3,018
Long-term Debt, Total
4,559
Line of Credit Facility [Abstract]



Line of Credit Facility, Description
On April 30, 2007, the Company replaced its $565 million credit facility with a new $1.5 billion five-year credit facility, which has provisions for the Company to request an increase of the facility up to $2 billion (at the lenders' discretion), and providing for up to $150 million in letters of credit. As of December 31, 2007, there are $110 million in letters of credit drawn against the facility. Under the new credit agreement, 3M is required to maintain its EBITDA to Interest Ratio as of the end of each fiscal quarter at not less than 3.0 to 1. This is calculated (as defined in the agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At December 31, 2007, this ratio was approximately 35 to 1. At December 31, 2007, available short-term committed lines of credit internationally totaled approximately $67 million, of which approximately $13 million was utilized. Debt covenants do not restrict the payment of dividends.
Line of Credit Facility [Line Items]



Line of Credit Facility, Revolving Credit, Description
Line of Credit Facility, Initiation Date
April 30, 2007
Line of Credit Facility, Expiration Date
April 30, 2012
Line of Credit Facility, Covenant Terms
Under the new credit agreement, 3M is required to maintain its EBITDA to Interest Ratio as of the end of each fiscal quarter at not less than 3.0 to 1. This is calculated (as defined in the agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period.
Line of Credit Facility, Covenant Compliance
At December 31, 2007, this ratio was approximately 35 to 1.
Line of Credit Facility, Borrowing Capacity, Description
On April 30, 2007, the Company replaced its $565 million credit facility with a new $1.5 billion five-year credit facility, which has provisions for the Company to request an increase of the facility up to $2 billion (at the lenders' discretion), and providing for up to $150 million in letters of credit.
Line of Credit Facility, Maximum Borrowing Capacity
1,500
Line of Credit Facility, Current Borrowing Capacity
110
Line of Credit Facility, Dividend Restrictions
Debt covenants do not restrict the payment of dividends.
Debt Instruments [Abstract]



Schedule of Debt Instruments [Text Block]
Debt Instrument [Table]



Debt Instrument [Line Items]



Debt Instrument, Credit Rating
The Company has an AA credit rating from Standard & Poor's, with a stable outlook, and an Aa1 credit rating from Moody's Investors Service, with a negative outlook.

006110 - Disclosure - Note 11 - Pension and Postretirement Benefit Plans
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Pension and Postretirement Benefit Plans Disclosure [Abstract]



Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]



Defined Benefit Plans, General Information
3M has various company-sponsored retirement plans covering substantially all U.S. employees and many employees outside the United States. Pension benefits associated with these plans generally are based on each participant's years of service, compensation, and age at retirement or termination. In addition to providing pension benefits, the Company provides certain postretirement health care and life insurance benefits for substantially all of its U.S. employees who reach retirement age while employed by the Company. Most international employees and retirees are covered by government health care programs. The cost of company-provided postretirement health care plans for international employees is not material and is combined with U.S. amounts. The Company's pension funding policy is to deposit with independent trustees amounts allowable by law. Trust funds and deposits with insurance companies are maintained to provide pension benefits to plan participants and their beneficiaries. There are no plan assets in the non-qualified plan due to its nature. For its U.S. postretirement health care and life insurance benefit plans, the Company has set aside amounts at least equal to annual benefit payments with an independent trustee. In August 2006, the Pension Protection Act (PPA) was signed into law in the U.S. The PPA increases the funding target for defined benefit pension plans to 100% of the target liability. The PPA transition rules require a funding liability target of 92% in 2008, reaching 100% by 2011. 3M's U.S. qualified defined benefit plans are funded in excess of the applicable transition funding liability target for 2008; therefore, the Company expects that the plans will not be subject to the minimum required contribution of the PPA and its transition rules will not have a material impact on expected future contributions.
Schedule of Defined Benefit Plans Disclosures [Text Block]
Schedule of Defined Benefit Plans Disclosures [Table]



Defined Benefit Plan Disclosure [Line Items]



Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]



Defined Benefit Plan, Benefit Obligation, Ending Balance
10,215
Defined Benefit Plan, before Adoption of SFAS 158 Recognition Provisions, Net Amount Recognized [Abstract]



Defined Benefit Plan, Funded Status of Plan [Abstract]



(Less) Defined Benefit Plan, Benefit Obligation
(10,215)
Defined Benefit Plan, Information about Plan Assets [Abstract]



Defined Benefit Plan, Investment Policies and Strategies Narrative Description
3M's investment strategy for its pension and postretirement plans is to manage the plans on a going-concern basis. The primary goal of the funds is to meet the obligations as required. The secondary goal is to earn the highest rate of return possible, without jeopardizing its primary goal, and without subjecting the Company to an undue amount of contribution rate volatility. Fund returns are used to help finance present and future obligations to the extent possible within actuarially determined funding limits and tax-determined asset limits, thus reducing the level of contributions 3M must make. During 2006, certain absolute return and commodity investments were included in equity and fixed income allocations. The 2006 presentation in the table that follows has been reclassified to conform to the 2007 presentation.
Defined Benefit Plan, Estimated Future Employer Contributions, Narrative
In the third quarter of 2007, the Company made discretionary contributions totaling $200 million to its U.S. qualified pension plan. In 2008, the Company expects to contribute an amount in the range of $100 million to $400 million to its U.S. and international pension plans. The Company does not have a required minimum pension contribution obligation for its U.S. plans in 2008. Therefore, the amount of the anticipated discretionary contribution could vary significantly depending on the U.S. plans' funding status as of the 2008 measurement date and the anticipated tax deductibility of the contribution.
Defined Benefit Plan, Type of Employer and Related Party Securities Included in Plan Assets
3M does not buy or sell any of its own stock as a direct investment for its pension and other postretirement benefit funds. However, due to external investment management of the funds, the plans may indirectly buy, sell or hold 3M stock. The aggregate amount of the shares would not be considered to be material relative to the aggregate fund percentages.
Postretirement Medical Plans with Prescription Drug Benefits [Abstract]



Disclosure of Expected Gross Prescription Drug Subsidy Receipts [Abstract]



Prescription Drug Subsidy Receipts, Year One
13
Prescription Drug Subsidy Receipts, Year Two
15
Prescription Drug Subsidy Receipts, Year Three
17
Prescription Drug Subsidy Receipts, Year Four
18
Prescription Drug Subsidy Receipts, Year Five
20
Prescription Drug Subsidy Receipts, Five Fiscal Years Thereafter
128
Adoption of SFAS 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans [Abstract]



Description of Change in Accounting Principle, SFAS 158
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)." This standard requires employers to recognize the underfunded or overfunded status of defined benefit pension and postretirement plans as an asset or liability in its statement of financial position, and recognize changes in the funded status in the year in which the changes occur through accumulated other comprehensive income, which is a component of stockholders' equity. This standard also eliminates the requirement for Additional Minimum Pension Liability (AML) required under SFAS No. 87. As a result of the application of SFAS No. 158 as of December 31, 2006, 3M reversed assets of $2.515 billion and increased liabilities by $703 million. These liabilities were offset to accumulated other comprehensive income and deferred taxes. In 2006, as a result of the implementation of SFAS No. 158, the Company recognized an after-tax decrease in accumulated other comprehensive income of $1.187 billion and $513 million for the U.S. and International pension benefit plans, respectively, and $218 million for the postretirement health care and life insurance benefit plan.
Recognition and Disclosure Provisions Adoption Date, SFAS 158
2006-12-31
Application of Recognition Provisions of SFAS 158, Incremental Effects on Balance Sheet [Abstract]



Adjustment to Initially Apply SFAS No. 158
1,918
Application of Recognition Provisions of SFAS 150, Effect on Accumulated Other Comprehensive Income, Net of Tax, US Pension Plans
1,187
Application of Recognition Provisions of SFAS 150, Effect on Accumulated Other Comprehensive Income, Net of Tax, Foreign Pension Plans
513
Application of Recognition Provisions of SFAS 150, Effect on Accumulated Other Comprehensive Income, Net of Tax, Postretirement Plans
1,918

006120 - Disclosure - Note 12 - Derivatives and Other Financial Instruments
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Derivatives and Other Financial Instruments Disclosure [Abstract]



General Discussion of Derivative Instruments and Hedging Activities [Abstract]



General Discussion of Derivative Instruments and Hedging Activities
The Company uses interest rate swaps, currency swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments, and includes a table that recaps cash flow hedging amounts
Derivative Instrument Detail [Abstract]



Schedule of Derivative Instruments [Abstract]



Schedule of Derivative Instruments [Text Block]
Increase (Decrease) in Accumulated Other Comprehensive Income Related to Cash Flow Hedging Instruments [Abstract]



Increase (Decrease) in Accumulated Other Comprehensive Income (Loss), Cumulative Change in Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges, Effect Net of Tax [Roll Forward]



Other Comprehensive Income Unrealized Gain (Loss) on Derivatives Arising During Period, Beginning Balance
(18)
14
(42)
Other Comprehensive Income, Derivatives Qualifying as Hedges, Net of Tax, Period Increase (Decrease) [Abstract]



Other Comprehensive Income, Changes in Fair Value of Derivatives
(17)
(53)
70
(Less) Other Comprehensive Income, Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax
7
(3)
10
Cash Flow Hedging Instruments - Unrealized Gain (Loss)
(10)
(56)
80
Other Comprehensive Income Unrealized Gain (Loss) on Derivatives Arising During Period, Ending Balance
(28)
(18)
14
Foreign Currency, Transactions and Translations [Abstract]



Foreign Currency, Transactions and Translations, Description
3M estimates that year-on-year currency effects, including hedging impacts, increased net income by approximately the following amounts. This estimate includes the effect of translating profits from local currencies into U.S. dollars; the impact of currency fluctuations on the transfer of goods between 3M operations in the United States and abroad; and transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risk
Foreign Currency, Transactions and Translations, Estimated Effect on Net Income
150
20
115
Foreign Currency, Derivative and Other Transaction Gains and Losses, Description
3M estimates that year-on-year derivative and other transaction gains and losses increased net income by approximatly the following amounts.
Foreign Currency, Derivative and Other Transaction Gains and Losses, Estimated Effect on Net Income
10
50
Credit Risk Derivatives [Abstract]



Description of Credit Risk Derivative Activities
During the second quarter of 2006, the Company entered into a credit support agreement with one of its primary derivatives counterparties. Under this agreement either party is required to post eligible collateral when the market value of transactions covered by the agreement exceeds specified thresholds, thus limiting credit exposure for both partie
Description of Credit Risk Exposure
The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, and option and foreign exchange contracts. However, the Company's risk is limited to the fair value of the instruments.
Discussion of Objectives for Using Credit Risk Derivative Instruments
Limiting credit loss in the event of nonperformance by counterparties
Discussion of Credit Risk Derivative Risk Management Policy
The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties.
Types of Credit Risk Derivatives Used
Credit Support Agreement
Types of Items Hedged by Credit Risk Derivatives
interest rate swaps, currency swaps, and option and foreign exchange contracts
Fair Value of Financial Instruments Narrative
At December 31, 2007 and 2006, the Company's financial instruments included cash and cash equivalents, marketable securities, accounts receivable, investments, accounts payable, borrowings, and derivative contracts.
Fair Value, by Balance Sheet Grouping, Significant Assumptions [Abstract]



Fair Value, by Balance Sheet Grouping, Significant Assumptions, Financial Assets [Abstract]



Cash and Cash Equivalents, Fair Value Disclosure, Significant Assumptions
Fair values approximated carrying values because of the short-term nature of these instruments.
Accounts Receivable, Fair Value Disclosure, Significant Assumptions
Fair values approximated carrying values because of the short-term nature of these instruments.
Investments, Fair Value Disclosure, Significant Assumptions
Available-for-sale marketable securities and investments are reported at fair value.
Cost Method Investments, Fair Value Disclosure, Significant Assumptions
Fair values for investments held at cost are not readily available, but are estimated tapproximate fair value.
Derivative Financial Instruments, Assets, Fair Value Disclosure, Significant Assumptions
Derivative contracts are reported at fair value.
Fair Value, by Balance Sheet Grouping, Significant Assumptions, Financial Liabilities [Abstract]



Accounts Payable, Fair Value Disclosure, Significant Assumptions
Fair values approximated carrying values because of the short-term nature of these instruments.
Borrowings, Fair Value Disclosure, Significant Assumptions
Short-term borrowings and current portion of long-term debt (except the $350 million dealer remarketable security) approximated carrying values because of the short-term nature of these instruments.
Derivative Financial Instruments, Liabilities, Fair Value Disclosure, Significant Assumptions
Derivative contracts are reported at fair value.
Discusson on Increase (Decrease) in Accumulated Other Comprehensive Income Related to Cash Flow Hedging Instruments
Amounts recorded in accumulated comprehensive income (loss) related to cash flow hedging instruments follow.
Financial Instruments, Carrying Amount and Estimated Fair Value [Abstract]



Schedule of Financial Instruments, Carrying Amount and Estimated Fair Value [Abstract]



Schedule of Financial Instruments, Carrying Amount and Estimated Fair Value [Text Block]
Financial Instrument [Table]



Financial Instrument [Line Items]



Financial Instrument, Fair Value Determination Basis
Third-party quotes
Third-party quotes

006130 - Disclosure - Note 13 - Commitments and Contingencies
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Commitments and Contingencies Disclosure [Abstract]



Commitments and Contingencies Disclosure [Text Block]


NOTE 13. Commitments and Contingencies

Capital and Operating Leases:
Rental expense under operating leases was $226 million in 2007, $211 million in 2006, and $195 million in 2005. It is 3M's practice to secure renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain a presence in a leased facility. 3M's primary capital lease, which became effective in April 2003, involves a building in the United Kingdom (with a lease term of 22 years). During the second quarter of 2003, 3M recorded a capital lease asset and obligation of approximately 33.5 million United Kingdom pounds (approximately $67 million at December 31, 2007 exchange rates). Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2007, were as follows:

Capital Operating
Leases Leases
(Millions)
2008 $7 $98
2009 6 79
2010 6 58
2011 6 35
2012 5 30
After 2012 54 141
Total 84 $441
Less: Amounts representing interest 13
Present value of future minimum lease payments 71
Less: Current obligations under capital leases 2
Long-term obligations under capital leases $69

Warranties/Guarantees:
3M's accrued product warranty liabilities, recorded on the Consolidated Balance Sheet as part of current and long-term liabilities, are estimated at approximately $21 million as of December 31, 2007. 3M does not consider this amount to be material. The fair value of 3M guarantees of loans with third parties and other guarantee arrangements are not material.

Related Party Activity:
Purchases from related parties (largely related to companies in which 3M has an equity interest) totaled approximately $144 million in 2007 ($160 million in 2006 and $141 million in 2005). Receivables due from related parties (largely related to receivables from employees for relocation and other ordinary business expense advances) totaled approximately $40 million in 2007 ($36 million in 2006, and $37 million in 2005). 3M sales to related parties totaled approximately $6 million in 2007 ($4 million in 2006, and $5 million in 2005). Indebtedness to 3M from related parties was not material in 2007, 2006 and 2005.

Legal Proceedings:
The Company and some of its subsidiaries are involved in numerous claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. These include various products liability (involving products that the Company now or formerly manufactured and sold), intellectual property, and commercial claims and lawsuits, including those brought under the antitrust laws, and environmental proceedings. The following sections first describe the significant legal proceedings in which the Company is involved, and then describe the liabilities and associated insurance receivables the Company has accrued relating to its significant legal proceedings. Unless otherwise stated, the Company is vigorously defending all such litigation.

Shareholder Derivative Litigation
As previously reported, in July 2007, a shareholder derivative lawsuit was filed in the U.S. District Court for the District of Delaware against the Company as nominal defendant and against each then current member of the Board of Directors and the officers named in the Summary Compensation Table of the 2007 Proxy Statement. The suit alleges that the Company's 2007 Proxy Statement contained false and misleading statements concerning the tax deductibility of compensation payable under the Executive Annual Incentive Plan ("Plan") and the standards for determining the amounts payable under the Plan. The lawsuit seeks a declaration voiding shareholder approval of the Plan, termination of the Plan, voiding the elections of directors, equitable accounting, and awarding costs, including attorneys' fees. Plaintiff filed a motion for summary judgment, and the defendants filed a motion to dismiss all claims on the grounds that plaintiff had failed to make a demand on the Board and had otherwise failed to state a proper claim under the Private Securities Litigation Reform Act. The defendants also moved to transfer the case from the District of Delaware to the District of Minnesota. In February 2008, the Court denied without prejudice the plaintiff's motion for summary judgment.

Breast Implant Litigation
The Company and certain other companies were named as defendants in past years in numerous claims and lawsuits alleging damages for personal injuries of various types resulting from breast implants formerly manufactured by the Company or a related company. The vast majority of claims against the Company have been resolved. The Company does not consider its remaining probable liability to be material. Information concerning the associated insurance receivable and legal proceedings related to it follows in the paragraph entitled Breast Implant Insurance Receivables.

Respirator Mask/Asbestos Litigation
For more than 25 years the Company has defended and resolved the claims of hundreds of thousands of individual claimants alleging injuries from occupational dust exposures. As of December 31, 2007, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 8,750 individual claimants, a decrease from the approximately 17,700 individual claimants with actions pending at December 31, 2006.

The vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of some of the Company's mask and respirator products and seek damages from the Company and other defendants for alleged personal injury from workplace exposures to asbestos, silica, coal or other occupational dusts found in products manufactured by other defendants or generally in the workplace. A minority of claimants generally allege personal injury from occupational exposure to asbestos from products previously manufactured by the Company, which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company premises.

In many of these lawsuits and claims, the Company is named as a defendant with multiple co-defendants where no product the Company manufactured is identified or where the Company is ultimately determined not to have manufactured the products identified by the plaintiffs. The Company's vigorous defense of this litigation has resulted in dismissals of many claims without any payment by the Company, and jury verdicts for the Company in seven of the eight cases tried to verdict (such trials occurred in 1999, 2000, 2003, 2004 and 2007), and an appellate reversal in 2005 of the one jury verdict adverse to the Company.

As previously reported, the Company won a defense verdict in July 2007 from a jury in the federal court in Eastern District of Missouri. The jury found the Company had no liability whatever to a plaintiff who claimed he had silicosis and a related cancer and sought to recover damages from the Company arising from his alleged illness, which he claimed to have contracted from occupational exposure to silica despite his purported use of the Company's respirator mask equipment at various times. The jury rejected each of the plaintiff's theories of liability against the Company.

Many of the resolved lawsuits and claims involved unimpaired claimants who were recruited by plaintiffs' lawyers through mass chest x-ray screenings. The Company experienced a significant decline in the number of claims filed in 2007 from prior years by apparently unimpaired claimants. The Company attributes this decline to several factors, including certain changes enacted in several states in recent years of the law governing asbestos-related claims, and the highly-publicized decision in mid-2005 of the United States District Court for the Southern District of Texas that identified and criticized abuses by certain attorneys, doctors and x-ray screening companies on behalf of claimants. The Company expects the filing of claims by unimpaired claimants in the future to continue at much lower levels than in the past. The Company believes that due to this change in the type and volume of incoming claims, it is likely that the number of claims alleging more serious injuries, including mesothelioma and other malignancies, while remaining relatively constant, will represent a greater percentage of total claims than in the past. The Company has demonstrated in past trial proceedings that its respiratory protection products are effective as claimed when used in the intended manner and in the intended circumstances. Consequently the Company believes that claimants are unable to establish that their medical conditions, even if significant, are attributable to the Company's respiratory protection products. Nonetheless the Company's litigation experience indicates that such claims are costlier to resolve than the claims of unimpaired persons, and it therefore anticipates an increase in the average cost of resolving pending and future claims on a per-claim basis than it experienced in prior periods when the vast majority of claims were asserted by the unimpaired.

Plaintiffs have asserted specific dollar claims for damages in approximately 66% of the 3,979 lawsuits that were pending against the Company at the end of 2007 in all jurisdictions. A majority of states restrict or prohibit specifying damages in tort cases such as these, and most of the remaining jurisdictions do not require such specification. In those cases in which plaintiffs choose to assert specific dollar amounts in their complaints, brought in states that permit such pleading, the amounts claimed are typically not meaningful as an indicator of the Company's potential liability. This is because (a) the amounts claimed typically bear no relation to the extent of the plaintiff's injury, if any; (b) the complaints nearly always assert claims against multiple defendants with the typical complaint asserting claims against as few as a dozen different defendants to upwards of 275 different defendants, the damages alleged are not attributed to individual defendants, and a defendant's share of liability may turn on the law of joint and several liability, which can vary by state, and by the amount of fault a jury allocates to each defendant if a case is ultimately tried before a jury; (c) many cases are filed against the Company even though the plaintiffs did not use any of the Company's products and, ultimately, are withdrawn or dismissed without any payment; and (d) many cases are brought on behalf of plaintiffs who have not suffered any medical injury, and, ultimately, are resolved without any payment or a payment that is a small fraction of the damages initially claimed. Of the 2,629 pending cases in which purported damage amounts are specified in the complaints, 860 cases involve claims of $100,000 or less, (one (1) of them also alleges punitive damages of $15,000, nine (9) of them also allege punitive damages of $30,000, and three (3) of them also allege punitive damages of $1,000,000); 186 cases involve claims between $100,000 and $3 million (thirty-three (33) of them also allege punitive damages of $250,000, one (1) of them also alleges punitive damages of $1 million, forty-three (43) of them also allege punitive damages of $1.5 million, and 106 of them also allege punitive damages of $2 million); two (2) cases involve claims of $3 million to $7.5 million (one (1) also alleges punitive damages of $350,000 and one (1) of them also alleges punitive damages of $5 million); 21 cases involve claims of $7.5 million; four (4) cases involve claims of $7.5 million to $10 million (four (4) of them also allege damages of $21 million); 1,540 cases involve claims of $10 million (two (2) of them also allege punitive damages of $350,000, 1,531 of them also allege punitive damages of $10 million, and one (1) of them also alleges punitive damages of $15 million); 13 cases involve claims of $10 million to $50 million (one (1) of them also allege punitive damages of $15 million, five (5) of them also allege punitive damages of $15.5 million, and three (3) of them also allege punitive damages of $20 million); and three (3) cases involve claims of $50 million (two (2) of them also alleges punitive damages of $50 million). Some complaints allege that the compensatory and punitive damages are at least the amounts specified. As stated, the Company's experience and the other reasons cited indicate that the damage amounts specified in complaints are not a meaningful factor in any assessment of the Company's potential liability.

As previously reported, the State of West Virginia, through its Attorney General, filed a complaint in 2003 against the Company and two other manufacturers of respiratory protection products in the Circuit Court of Lincoln County, West Virginia and amended it in 2005. The amended complaint seeks substantial, but unspecified, compensatory damages primarily for reimbursement of the costs allegedly incurred by the State for worker's compensation and healthcare benefits provided to all workers with occupational pneumoconiosis and unspecified punitive damages.

Employment Litigation
As previously reported, one current and one former employee of the Company filed a purported class action in the District Court of Ramsey County, Minnesota, in December 2004, seeking to represent a class of all current and certain former salaried employees employed by 3M in Minnesota below a certain salary grade who were age 46 or older at any time during the applicable period to be determined by the Court. The complaint alleges the plaintiffs suffered various forms of employment discrimination on the basis of age in violation of the Minnesota Human Rights Act and seeks injunctive relief, unspecified compensatory damages (which they seek to treble under the statute), including back and front pay, punitive damages (limited by statute to $8,500 per claimant) and attorneys' fees. In January 2006, the plaintiffs filed a motion to join four additional named plaintiffs. This motion was unopposed by the Company and the four plaintiffs were joined in the case, although one claim has been dismissed following an individual settlement. The class certification hearing was held in December 2007. The Company expects a ruling on the class certification in the first half of 2008.

A similar age discrimination purported class action was filed against the Company in November 2005 in the Superior Court of Essex County, New Jersey, on behalf of a class of New Jersey-based employees of the Company. The Company removed this case to the United States District Court for the District of New Jersey. On June 29, 2007, the attorneys for the plaintiff amended their complaint and dropped the class action allegations.

In addition, three former employees filed age discrimination charges against the Company with the U.S. Equal Employment Opportunity Commission and the pertinent state agencies in Minnesota and California during 2005; two of these charges were amended in 2006. Such filings include allegations that the release of claims signed by certain former employees in the purported class defined in the charges is invalid for various reasons and assert age discrimination claims on behalf of certain current and former salaried employees in states other than Minnesota and New Jersey. In 2006, one current employee filed an age discrimination charge against the Company with the U.S. Equal Employment Opportunity Commission and the pertinent state agency in Missouri, asserting claims on behalf of a class of all current and certain former salaried employees who worked in Missouri and other states other than Minnesota and New Jersey. The same law firm represents the plaintiffs and claimants in each of these proceedings.

Environmental Matters and Litigation
The Company's operations are subject to environmental laws and regulations including those pertaining to air emissions, wastewater discharges, toxic substances, and the handling and disposal of solid and hazardous wastes enforceable by national, state, and local authorities around the world, and private parties in the United States and abroad. These laws and regulations provide, under certain circumstances, a basis for the remediation of contamination and for personal injury and property damage claims. The Company has incurred, and will continue to incur, costs and capital expenditures in complying with these laws and regulations, defending personal injury and property damage claims, and modifying its business operations in light of its environmental responsibilities. In its effort to satisfy its environmental responsibilities and comply with environmental laws and regulations, the Company has established, and periodically updates, policies relating to environmental standards of performance for its operations worldwide.

Remediation:
Under certain environmental laws, including the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state laws, the Company may be jointly and severally liable, typically with other companies, for the costs of environmental contamination at current or former facilities and at off-site locations. The Company has identified numerous locations, most of which are in the United States, at which it may have some liability. Please refer to the following section, "Accrued Liabilities and Insurance Receivables Related to Legal Proceedings" for more information on this subject.

Regulatory Activities:
As previously reported, the Company has been voluntarily cooperating with ongoing reviews by local, state, national (primarily the U.S. Environmental Protection Agency (EPA)), and international agencies of possible environmental and health effects of perfluorooctanyl compounds (perflurooctanoic acid or "PFOA" and perfluorooctane sulfonate or "PFOS") and related compounds. As a result of its phase-out decision in May 2000, the Company no longer manufactures perfluorooctanyl compounds, except that a subsidiary recovers and recycles PFOA in Gendorf, Germany, for internal use in production processes and has agreed to a product stewardship initiative with the EPA to work toward elimination of its use of PFOA by 2015.

Regulatory activities concerning PFOA and/or PFOS continue in Europe and elsewhere, and before certain international bodies. These activities include gathering of exposure and use information, risk assessment, and consideration of regulatory approaches.

As previously reported, the Company, in cooperation with state agencies, tested soil and groundwater beneath three former waste disposal sites in Washington County, Minnesota, used many years ago by the Company to dispose lawfully of waste containing perfluorinated compounds. In addition, subsequent testing of water from certain municipal wells in Oakdale, Minnesota and some private wells in Lake Elmo, Minnesota, indicated the presence of low levels of PFOS and PFOA that, in some cases, were slightly above guidelines established by the Minnesota Department of Health ("MDH"). As previously reported, the Company addressed the presence of these compounds in the water by treating certain municipal wells in Oakdale and by providing a grant to the City of Lake Elmo to extend city water to certain residents with these compounds in their private wells. In March 2007 the MDH lowered the Health-Based Values (HBVs) (i.e., the amount of a chemical in drinking water considered by the MDH staff to be safe for people to drink for a lifetime) for PFOA from 7 parts per billion (ppb) to 0.5 ppb and for PFOS from 1 ppb to 0.3 ppb. In August 2007 the MDH established these same levels as Health Risk Limits ("HRL") (i.e., the amount of a chemical in drinking water determined by the MDH to be safe for people to drink for a lifetime) through an expedited rule-making process. In a final report issued on January 15, 2008, the MDH proposed a draft value to lower the HRL for PFOA from 0.5 ppb to 0.3 ppb in anticipation of HRL rule-making in 2008.

As previously reported, the MDH has also detected low levels of a perfluorinated compound called perfluorobutanoic acid (PFBA) in municipal wells (and in private wells as announced by the MDH in June 2007) in six nearby communities (Woodbury, Cottage Grove, Newport, St. Paul Park, South St. Paul, and Hastings, all communities located southeast of St. Paul), some of which slightly exceed the MDH's well guidance for PFBA, currently at 1 ppb. The Company is working with the MDH and the Minnesota Pollution Control Agency (MPCA) in assessing the source of PFBA in these wells and is supplying data that could be used in determining an appropriate drinking water guideline level. The MDH has not issued an HBV for PFBA, but the Company expects the MDH to issue further guidance in the first quarter of 2008. The Company has advised the affected communities that it will assist them in assuring their drinking water falls below the HBV for PFBA when such value is finally determined.

On May 22, 2007, the MPCA Citizen's Board approved the Settlement Agreement and Consent Order to address the presence of perfluorinated compounds in the soil and groundwater at former disposal sites in Washington County Minnesota and at the Company's manufacturing facility at Cottage Grove Minnesota. Under this agreement, the Company agreed to (i) evaluate releases of perfluorinated compounds from these sites and propose response actions; (ii) provide alternative drinking water if and when an HBV or HRL is exceeded for any perfluorinated compounds as a result of contamination from these sites; (iii) share information with the MPCA about perfluorinated compounds; (iv) reimburse the MPCA future costs of research that are connected to releases from the Company's operations in Minnesota (the Company agreed to reimburse the MPCA for past research costs and provided a grant up to $5 million over the next four years for the purpose of investigating and assessing the presence and effects of perflouronated compounds in the environment and biota); and (v) pay the MPCA up to $8 million towards the implementation of remedial actions at the Washington County Landfill. The Company is working with the MPCA under the terms of the Settlement Agreement and Consent Order to propose alternatives that the MPCA will consider to address the presence of perfluorinated compounds in the soil and groundwater at these sites.

The Company cannot predict what regulatory actions arising from the foregoing proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions.

In February 2008, the EPA notified the Company that it is seeking $173,000 in penalties due to alleged past violations of certain monitoring and record keeping requirements under federal air pollution regulations at the Company's manufacturing facility in Cottage Grove, Minnesota. The Company had been operating under a monitoring and record keeping approach that had been approved by the MPCA. The EPA has now approved the Company's alternative monitoring and record keeping approach.

Litigation:
As previously reported, a former employee filed a purported class action lawsuit in 2002 in the Circuit Court of Morgan County, Alabama, involving perfluorooctanyl chemistry, alleging that the plaintiffs suffered fear, increased risk, subclinical injuries, and property damage from exposure to perfluorooctanyl chemistry at or near the Company's Decatur, Alabama, manufacturing facility. The Circuit Court in 2005 granted the Company's motion to dismiss the named plaintiff's personal injury-related claims on the basis that such claims are barred by the exclusivity provisions of the state's Workers Compensation Act. The plaintiffs' counsel filed an amended complaint in November 2006, limiting the case to property damage claims on behalf of a purported class of residents and property owners in the vicinity of the Decatur plant. Also in 2005, the judge in a second purported class action lawsuit (filed by three residents of Morgan County, Alabama, seeking unstated compensatory and punitive damages involving alleged damage to their property from emissions of perfluorooctanyl compounds from the Company's Decatur, Alabama, manufacturing facility that formerly manufactured those compounds) granted the Company's motion to abate the case, effectively putting the case on hold pending the resolution of class certification issues in the action described above filed in the same court in 2002. Despite the stay, plaintiffs filed an amended complaint seeking damages for alleged personal injuries and property damage on behalf of the named plaintiffs and the members of a purported class. No further action in the case is expected unless and until the stay is lifted.

As previously reported, two residents of Washington County, Minnesota, filed in October 2004 a purported class action in the District Court of Washington County on behalf of Washington county residents who have allegedly suffered personal injuries and property damage from alleged emissions from the former perfluorooctanyl production facility at Cottage Grove, Minnesota, and from historic waste disposal sites in the vicinity of that facility. After the District Court granted the Company's motion to dismiss the claims for medical monitoring and public nuisance in April 2005, the plaintiffs filed an amended complaint adding additional allegations involving other perfluorinated compounds manufactured by the Company, alleging additional legal theories in support of their claims, adding four plaintiffs, and seeking relief based on alleged contamination of the City of Oakdale municipal water supply and certain private wells in the vicinity of Lake Elmo, Minnesota. In April 2006, the plaintiffs filed a second amended complaint adding two additional plaintiffs. The two original plaintiffs thereafter dismissed their claims against the Company. After a hearing on the plaintiffs' motion to certify the case as a class action at the end of March 2007, the Court on June 19, 2007 denied the plaintiffs' motion to certify the litigation as a class action. The trial of the individual cases is scheduled for January 2009.

Several hundred plaintiffs who claim to have lived in the vicinity of the ACME Barrel Company's storage drum reconditioning facility in Chicago, Illinois, filed a lawsuit in the third quarter of 2003 in the Circuit Court of Cook County, Illinois, against 3M and a number of other companies that allegedly were customers of ACME Barrel. Since the Court rejected plaintiffs' attempt to have this litigation proceed as a class action, 71 individuals have asserted claims against the Company and several other defendants for damages allegedly caused by emissions of hazardous materials from the ACME Barrel drum reconditioning facility.

In the second quarter of 2006, the New Jersey Department of Environmental Protection served a lawsuit that was filed in New Jersey state court against the Company and several other companies seeking cleanup and removal costs and damages to natural resources allegedly caused by the discharge of hazardous substances from two former waste disposal sites in New Jersey. During the fourth quarter, the Company negotiated a settlement of New Jersey's claims. Under the terms of the settlement, the company will transfer to the State of New Jersey 150 acres of undeveloped land with groundwater recharge potential, which the Company acquired for purposes of the settlement, and will pay the state's attorneys' fees. Notice of the settlement was published for public comment in December 2007, and no objections were received. As a result, the Company and the State of New Jersey have signed the formal settlement agreement pursuant to which the Company will transfer title to the property and will be dismissed from the lawsuit, which will continue against the codefendants.

Accrued Liabilities and Insurance Receivables Related to Legal Proceedings
The Company complies with the requirements of Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies," and related guidance, and records liabilities for legal proceedings in those instances where it can reasonably estimate the amount of the loss and where liability is probable. Where the reasonable estimate of the probable loss is a range, the Company records the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established reserves if estimable, or states that such an estimate cannot be made. For those insured matters where the Company has taken a reserve, the Company also records receivables for the amount of insurance that it expects to recover under the Company's insurance program. For those insured matters where the Company has not taken a reserve because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it expects to recover for the expense incurred. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred.

Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of presently recorded liabilities. A future adverse ruling, settlement, or unfavorable development could result in future charges that could have a material adverse effect on the Company's results of operations or cash flows in the period in which they are recorded. The Company currently believes that such future charges, if any, would not have a material adverse effect on the consolidated financial position of the Company, taking into account its significant available insurance coverage. Based on experience and developments, the Company periodically reexamines its estimates of probable liabilities and associated expenses and receivables, and whether it is able to estimate a liability previously determined to be not estimable and/or not probable. Where appropriate, the Company makes additions to or adjustments of its estimated liabilities. As a result, the current estimates of the potential impact on the Company's consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company could change in the future.

The Company estimates insurance receivables based on an analysis of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim, and records an amount it has concluded is likely to be recovered.

The following table shows the major categories of on-going litigation, environmental remediation and other environmental liabilities for which the Company has been able to estimate its probable liability and for which the Company has taken reserves and the related insurance receivables:

At December 31
(Millions) 2007 2006 2005
Breast implant liabilities $1 $4 $7
Breast implant receivables 64 93 130
Respirator mask/asbestos liabilities 121 181 210
Respirator mask/asbestos receivables 332 380 447
Environmental remediation liabilities 37 44 30
Environmental remediation receivables 15 15 15
Other environmental liabilities 147 14 8

For those significant pending legal proceedings that do not appear in the table and that are not the subject of pending settlement agreements, the Company has determined that liability is not probable or the amount of the liability is not estimable, or both, and the Company is unable to estimate the possible loss or range of loss at this time. The amounts in the preceding table with respect to breast implant and environmental remediation represent the Company's best estimate of the respective liabilities. The Company does not believe that there is any single best estimate of the respirator/mask/asbestos liability or the other environmental liabilities shown above, nor that it can reliably estimate the amount or range of amounts by which those liabilities may exceed the reserves the Company has established.

Breast Implant Insurance Receivables:
In the breast implant insurance coverage litigation, the District Court in Ramsey County Minnesota entered an order in September 2007 dismissing from the suit the last of the insurers that were still contesting the extent of their coverage for the Company's breast implant product liability claims. The dismissal was pursuant to a settlement the Company reached with those insurers during the third quarter of 2007. As of December 31, 2007, the Company had receivables for insurance recoveries related to the breast implant matter of $64 million. The Company received $29 million in 2007, reducing this receivable by that amount. The Company also received $48 million in January 2008 and expects to receive an additional $10 million by the end of 2008 pursuant to a settlement agreement with three insurers. The Company continues to pursue recovery against its remaining insurers and expects to collect the remaining receivable.

Respirator Mask/Asbestos Liabilities and Insurance Receivables:
The Company estimates its respirator mask/asbestos liabilities, including the cost to resolve the claim and defense costs, by examining: (i) the Company's experience in resolving claims, (ii) apparent trends, (iii) the apparent quality of claims (e.g., whether the claim has been asserted on behalf of asymptomatic claimants), (iv) changes in the nature and mix of claims (e.g., the proportion of claims asserting usage of the Company's mask or respirator products and alleging exposure to each of asbestos, silica, coal or other occupational dusts, and claims pleading use of asbestos-containing products allegedly manufactured by the Company), (v) the number of current claims and a projection of the number of future asbestos and other claims that may be filed against the Company, (vi) the cost to resolve recently settled claims, and (vii) an estimate of the cost to resolve and defend against current and future claims. Because of the inherent difficulty in projecting the number of claims that have not yet been asserted, particularly with respect to the Company's respiratory products that themselves did not contain any harmful materials (which makes the various published studies that purport to project future asbestos claims substantially removed from the Company's principal experience and which themselves vary widely), the Company does not believe that there is any single best estimate of this liability, nor that it can reliably estimate the amount or range of amounts by which the liability may exceed the reserve the Company has established. No liability has been recorded regarding the pending action brought by the West Virginia Attorney General previously described.

Developments may occur that could affect the Company's estimate of its liabilities. These developments include, but are not limited to, significant changes in (i) the number of future claims, (ii) the average cost of resolving claims, (iii) the legal costs of defending these claims and in maintaining trial readiness, (iv) changes in the mix and nature of claims received, (v) trial and appellate outcomes, (vi) changes in the law and procedure applicable to these claims, and (vii) the financial viability of other co-defendants and insurers.

As of December 31, 2007, the Company's receivable for insurance recoveries related to the respirator mask/asbestos litigation was $332 million. Various factors could affect the timing and amount of recovery of this receivable, including (i) delays in or avoidance of payment by insurers; (ii) the extent to which insurers may become insolvent in the future, and (iii) the outcome of negotiations with insurers and legal proceedings with respect to respirator mask/asbestos liability insurance coverage. The difference between the accrued liability and insurance receivable represents in part the time delay between payment of claims on the one hand and receipt of insurance reimbursements on the other hand. Because of the lag time between settlement and payment of a claim, no meaningful conclusions may be drawn from quarterly changes in the amount of receivables for expected insurance recoveries and the quarterly changes in the number of claimants at the end of each quarter.

On January 5, 2007 the Company was served with a declaratory judgment action filed on behalf of two of its insurers (Continental Casualty and Continental Insurance Co.) disclaiming coverage for respirator/mask claims. The action was filed in Hennepin County, Minnesota and names, in addition to the Company, over 60 of the Company's insurers. This action is similar in nature to an action filed in 1994 with respect to breast implant coverage, which ultimately resulted in the Minnesota Supreme Court's ruling of 2003 that was largely in the Company's favor. At the company's request, the case was transferred to Ramsey County, over the objections of the insurers. The Minnesota Supreme Court agreed to hear the insurers' appeal of that decision. Oral argument on the appeal is scheduled for March 2008.

Environmental and Other Liabilities and Insurance Receivables: As of December 31, 2007, the Company had recorded liabilities of $37 million for estimated environmental remediation costs based upon an evaluation of currently available facts with respect to each individual site and also recorded related insurance receivables of $15 million. The Company records liabilities for remediation costs on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company's commitment to a plan of action. Liabilities for estimated costs of environmental remediation, depending on the site, are based primarily upon internal or third-party environmental studies, and estimates as to the number, participation level and financial viability of any other potentially responsible parties, the extent of the contamination and the nature of required remedial actions. The Company adjusts recorded liabilities as further information develops or circumstances change. The Company expects that it will pay the amounts recorded over the periods of remediation for the applicable sites, currently ranging up to 30 years.

As of December 31, 2007, the Company had recorded liabilities of $147 million for estimated other environmental liabilities based upon an evaluation of currently available facts. As previously reported, the Company increased its other environmental liabilities by $121 million in the first quarter of 2007 as a result of regulatory developments in Minnesota and the completion of a comprehensive review with environmental consultants regarding its other environmental liabilities which include the estimated costs of addressing trace amounts of perfluorinated compounds in drinking water sources in the City of Oakdale and Lake Elmo, Minnesota, as well as presence in the soil and groundwater at the Company's manufacturing facilities in Decatur, Alabama, and Cottage Grove, Minnesota, and at two former disposal sites in Minnesota. The Company expects that most of the spending will occur over the next three to seven years. While the Company is not able to estimate the total costs of implementing the Settlement Agreement and Consent Order with the MPCA (described above under Environmental Matters and Litigation - Regulatory Matters), the Company increased its other environmental liabilities by an additional $13 million in the second quarter of 2007 to reflect its best estimate of the specific payment obligations under that agreement.

It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternate cleanup methods. Developments may occur that could affect the Company's current assessment, including, but not limited to: (i) changes in the information available regarding the environmental impact of the Company's operations and products; (ii) changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages; (iii) new and evolving analytical and remediation techniques; (iv) success in allocating liability to other potentially responsible parties; and (v) the financial viability of other potentially responsible parties and third-party indemnitors.
Capital and Operating Leases [Abstract]



Leases, Operating [Abstract]



Operating Leases, Future Minimum Payments Due, Current
98
Operating Leases, Future Minimum Payments, Due in Two Years
79
Operating Leases, Future Minimum Payments, Due in Three Years
58
Operating Leases, Future Minimum Payments, Due in Four Years
35
Operating Leases, Future Minimum Payments, Due in Five Years
30
Operating Leases, Future Minimum Payments, Due Thereafter
141
Operating Leases, Future Minimum Payments Due, Total
441
Operating Leases, Rent Expense
226
211
195
Leases, Capital [Abstract]



Capital Leases, Future Minimum Payments Due, Current
7
Capital Leases, Future Minimum Payments Due in Two Years
6
Capital Leases, Future Minimum Payments Due in Three Years
6
Capital Leases, Future Minimum Payments Due in Four Years
6
Capital Leases, Future Minimum Payments Due in Five Years
5
Capital Leases, Future Minimum Payments Due Thereafter
54
Capital Leases, Future Minimum Payments Due, Total
84
(Less) Capital Leases, Future Minimum Payments, Interest Included in Payments
(13)
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments, Total
71
Capital Lease Obligations, Current
2
Capital Lease Obligations, Noncurrent
69
65
Description of Lessee Leasing Arrangements, Capital Leases
It is 3M's practice to secure
renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain a presence in a leased facility. 3M's primary capital
lease, which became effective in April 2003, involves a building in the United Kingdom (with a lease term of 22 years). During the second quarter
of 2003, 3M recorded a capital lease asset and obligation of approximately 33.5 million United Kingdom pounds (approximately $67 million at
December 31, 2007 exchange rates).
Related Party Transaction, Purchases from Related Parties
144
160
141
Related Party Transaction, Sales to Related Parties
6
4
5
Due from Related Parties, Unclassified
40
36
37
Schedule of Loss Contingencies by Contingency [Text Block]
Loss Contingencies [Table]



Loss Contingencies [Line Items]



Loss Contingency, Management's Assessment and Process
The Company complies with the requirements of Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies," and related guidance, and records liabilities for legal proceedings in those instances where it can reasonably estimate the amount of the loss and where liability is probable. Where the reasonable estimate of the probable loss is a range, the Company records the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established reserves if estimable, or states that such an estimate cannot be made. For those insured matters where the Company has taken a reserve, the Company also records receivables for the amount of insurance that it expects to recover under the Company's insurance program. For those insured matters where the Company has not taken a reserve because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it expects to recover for the expense incurred. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred.

Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of presently recorded liabilities. A future adverse ruling, settlement, or unfavorable development could result in future charges that could have a material adverse effect on the Company's results of operations or cash flows in the period in which they are recorded. The Company currently believes that such future charges, if any, would not have a material adverse effect on the consolidated financial position of the Company, taking into account its significant available insurance coverage. Based on experience and developments, the Company periodically reexamines its estimates of probable liabilities and associated expenses and receivables, and whether it is able to estimate a liability previously determined to be not estimable and/or not probable. Where appropriate, the Company makes additions to or adjustments of its estimated liabilities. As a result, the current estimates of the potential impact on the Company's consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company could change in the future.

The Company estimates insurance receivables based on an analysis of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim, and records an amount it has concluded is likely to be recovered.

For those significant pending legal proceedings that do not appear in the table and that are not the subject of pending settlement agreements, the Company has determined that liability is not probable or the amount of the liability is not estimable, or both, and the Company is unable to estimate the possible loss or range of loss at this time. The amounts in the preceding table with respect to breast implant and environmental remediation represent the Company's best estimate of the respective liabilities. The Company does not believe that there is any single best estimate of the respirator/mask/asbestos liability or the other environmental liabilities shown above, nor that it can reliably estimate the amount or range of amounts by which those liabilities may exceed the reserves the Company has established.
Product Warranty Accrual
21

006140 - Disclosure - Notes 14 and 15 - Employee Savings and Stock Ownership Plans and Management Stock Ownership Program (MSOP) and General Employees' Stock Purchase Plan (GESPP)
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Employee Savings And Stock Ownership Plans and Management Stock Ownership Program and General Employees Stock Purchase Plan Disclosures



Schedule of Employee Stock Ownership Plan (ESOP) Disclosures [Text Block]
NOTE 14. Employee Savings and Stock Ownership Plans

The Company sponsors employee savings plans under Section 401(k) of the Internal Revenue Code. These plans are offered to substantially all regular U.S. employees. Employee contributions of up to 6% of compensation are matched at rates ranging from 35% to 50%, with additional Company contributions depending upon Company performance. All Company contributions initially are invested in 3M common stock, with employee contributions invested in a number of investment funds pursuant to their elections. Vested employees may diversify their 3M shares into other investment options.

The Company maintains an Employee Stock Ownership Plan (ESOP). This plan was established in 1989 as a cost-effective way of funding the majority of the Company's contributions under 401(k) employee savings plans. Total ESOP shares are considered to be shares outstanding for earnings per share calculations.

Dividends on shares held by the ESOP are paid to the ESOP trust and, together with Company contributions, are used by the ESOP to repay principal and interest on the outstanding ESOP debt. The tax benefit related to dividends paid on unallocated shares was charged directly to equity and totaled approximately $3 million in 2007, $3 million in 2006, and $4 million in 2005. Over the life of the ESOP debt, shares are released for allocation to participants based on the ratio of the current year's debt service to the remaining debt service prior to the current payment.

The ESOP has been the primary funding source for the Company's employee savings plans. As permitted by AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans," the Company has elected to continue its practices, which are based on Statement of Position 76-3, "Accounting Practices for Certain Employee Stock Ownership Plans" and subsequent consensus of the EITF of the FASB. Accordingly, the debt of the ESOP is recorded as debt, and shares pledged as collateral are reported as unearned compensation in the Consolidated Balance Sheet and Consolidated Statement of Changes in Stockholders' Equity and Comprehensive Income. Unearned compensation is reduced symmetrically as the ESOP makes principal payments on the debt. Expenses related to the ESOP include total debt service on the notes, less dividends. The Company contributes treasury shares, accounted for at fair value, to employee savings plans to cover obligations not funded by the ESOP (reported as an employee benefit expense).

Employee Savings and Stock Ownership Plans
(Millions) 2007 2006 2005
Dividends on shares held by the ESOP $37 $39 $36
Company contributions to the ESOP 10 9 12
Interest incurred on ESOP notes 5 8 10
Amounts reported as an employee benefit expense:
Expenses related to ESOP debt service 5 4 7
Expenses related to treasury shares 34 36 27
ESOP Debt Shares 2007 2006 2005
Allocated 14,039,070 15,956,530 16,729,528
Committed to be released 278,125 286,620 366,969
Unreleased 2,457,641 3,831,425 5,145,039
Total ESOP debt shares 16,774,836 20,074,575 22,241,536
Employee Stock Ownership Plan (ESOP), Plan Description
The Company maintains an Employee Stock Ownership Plan (ESOP). This plan was established in 1989 as a cost-effective way of funding the majority of the Company's contributions under 401(k) employee savings plans. Total ESOP shares are considered to be shares outstanding for earnings per share calculations.
Employee Stock Ownership Plan (ESOP), Amounts Reported as an Employee Benefit Expense [Abstract]



Employee Stock Ownership Plan (ESOP), Dividends Paid to ESOP
37
39
36
Employee Stock Ownership Plan (ESOP), Tax Benefit of Dividends Paid to Plan
3
3
4
Employee Stock Ownership Plan (ESOP), Cash Contributions to ESOP
10
9
12
Employee Stock Ownership Plan (ESOP), Interest Payments from ESOP
5
8
10
Employee Stock Ownership Plan (ESOP), Amounts Reported as an Employee Benefit Expense, Expenses Related to ESOP Debt Services
5
4
7
Employee Stock Ownership Plan (ESOP), Amounts Reported as an Employee Benefit Expense, Expenses Related to Treasury Shares
34
36
27
Employee Stock Ownership Plan (ESOP), Shares in ESOP [Abstract]



Employee Stock Ownership Plan (ESOP), Number of Allocated Shares
14,039,070
15,956,530
16,729,528
Employee Stock Ownership Plan (ESOP), Number of Committed-to-be-Released Shares
278,125
286,620
366,969
Employee Stock Ownership Plan (ESOP), Number of Suspense Shares
2,457,641
3,831,425
5,145,039
Employee Stock Ownership Plan (ESOP), Shares in ESOP, Total
16,774,836
20,074,575
22,241,536
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE 15. Management Stock Ownership Program (MSOP) and General Employees' Stock Purchase Plan (GESPP)
The Company issues MSOP options to eligible employees annually in May using the closing stock price on the grant date, which is the date of the Annual Stockholders' Meeting. In May 2005, shareholders approved 36.75 million shares for issuance under the MSOP in the form of management stock options, restricted stock, restricted stock units and stock appreciation rights. Under the plan, the Company has principally issued stock options to management employees that are granted at market value on the date of grant. Prior to 2005, under previous plans, these options were generally exercisable one year after the date of grant, with expiration 10 years from the date of grant. Effective with the May 2005 grant, the Company changed its vesting period from one to three years with the expiration date remaining at 10 years from date of grant. In addition to grants to management employees, the Company makes other minor stock option grants to employees, for which vesting terms and option lives are not substantially different, and also makes minor grants of restricted stock units and other stock-based grants.
Outstanding shares under option include grants from previous plans. There were approximately 15,400 participants in the plan with either outstanding options or restricted stock units at December 31, 2007.
Management Stock Ownership Program
2007 2006 2005
Number of Options Exercise Price* Number of Options Exercise Price* Number of Options Exercise Price* Under option -
January 1 82,867,903 $ 67.41 80,157,713 $ 62.40 78,293,754 $ 58.70
Granted
Annual 4,434,583 84.81 11,255,448 87.31 10,821,092 76.81
Progressive (Reload) 461,815 87.12 652,552 80.44 751,995 81.19
Other 51,730 82.93 84,400 76.45 570,631 78.07
Exercised (12,498,051 ) 55.34 (8,693,946 ) 47.71 (9,027,646 ) 48.30
Canceled (704,929 ) 77.36 (588,264 ) 74.72 (1,252,113 ) 75.65
December 31 74,613,051 $ 70.50 82,867,903 $ 67.41 80,157,713 $ 62.40
Options exercisable December 31 58,816,963 $ 66.83 64,218,738 $ 62.85 68,714,166 $ 60.03
*Weighted average


See also: mmm-20071231-Note14-01-MSOP.html

For options outstanding at December 31, 2007, the weighted-average remaining contractual life was 66 months and the aggregate intrinsic value was $1.070 billion. For options exercisable at December 31, 2007, the weighted-average remaining contractual life was 57 months and the aggregate intrinsic value was $1.042 billion. As of December 31, 2007, there was $118 million of compensation expense that has yet to be recognized related to non-vested stock option-based awards. This expense is expected to be recognized over the remaining vesting period with a weighted-average life of 18 months. The total intrinsic values of stock options exercised during 2007, 2006 and 2005, respectively, was $373 million, $289 million and $278 million. Cash received from options exercised during 2007, 2006 and 2005, respectively, was $692 million, $414 million and $437 million.
The Company's actual tax benefits realized for the tax deductions related to the exercise of employee stock options for 2007, 2006 and 2005, respectively, was $122 million, $93 million and $95 million. The Company does not have a specific policy to repurchase common shares to mitigate the dilutive impact of options; however, the Company has historically made adequate discretionary purchases, based on cash availability, market trends and other factors, to satisfy stock option exercise activity.
Beginning in 2007, the Company began reducing the number of traditional stock options granted under its long-term incentive compensation plan by reducing the number of employees eligible to receive annual grants and by shifting a portion of the annual grant away from traditional stock options primarily to restricted stock units. These changes will reduce the annual dilution impact from 1.5% of total outstanding common stock to about 1%. However, associated with the reduction in the number of eligible employees, the Company provided a one-time "buyout" grant to the impacted employees, which resulted in increased stock-based compensation expense in 2007. The following table summarizes MSOP restricted stock and restricted stock unit activity during the twelve months ended December 31, 2007:
Restricted Stock and Restricted Stock Units
Number of Awards
Grant Date Fair Value*
Nonvested balance -
As of January 1, 2007 411,562 $ 78.11
Granted
Annual 1,695,592 77.88
Other 22,465 50.88
Vested (90,913 ) 77.38
Forfeited (37,125 ) 79.04
As of December 31, 2007 2,001,581 $ 77.63
*Weighted average


See also: mmm-20071231-Note14-02-Restricted.html

As of December 31, 2007, there was $97 million of compensation expense that has yet to be recognized related to non-vested restricted stock and restricted stock units. This expense is expected to be recognized over the remaining vesting period with a weighted-average life of 39 months. The total fair value of restricted stock and restricted stock units that vested during the twelve-month periods ended December 31, 2007 and 2006 was $6 million and $5 million, respectively.
In addition, the Company issues cash settled Restricted Stock Units and Stock Appreciation Rights in certain countries. These grants do not result in the issuance of Common Stock and are considered immaterial by the Company.
The remaining total MSOP shares available for grant under the 2005 MSOP Program are 4,408,083, 13,074,202 and 24,937,892, respectively, as of December 31, 2007, 2006 and 2005. Restricted stock and restricted stock units, per the 2005 MSOP Program, shall be counted against the total shares available as 2.45 shares for every one share issued in connection with that award.
Effective with the May 2005 grant, the Company no longer issues options eligible for additional progressive (reload) options; however, when a progressive option is issued upon the exercise of a pre-May 2005 non-qualified stock option, the option is revalued and additional stock compensation expense is incurred.
For annual and progressive (reload) options, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model and the assumptions that follow.
MSOP Assumptions
Annual Progressive (Reload)
2007 2006 2005 2007 2006 2005
Exercise price $ 84.79 $ 87.23 $ 76.87 $ 87.12 $ 80.44 $ 81.19
Risk-free interest rate 4.6 % 5.0 % 4.0 % 4.6 % 4.5 % 3.7 %
Dividend yield 2.1 % 2.0 % 2.0 % 2.1 % 2.0 % 2.0 %
Volatility 20.0 % 20.0 % 23.5 % 18.4 % 20.1 % 20.9 %
Expected life (months) 69 69 69 25 39 40
Black-Scholes fair value $ 18.12 $ 19.81 $ 18.28 $ 13.26 $ 12.53 $ 13.18


See also: mmm-20071231-Note14-03-MSOPAssumptions.html

In connection with the adoption of SFAS No. 123R, in 2005 the Company reviewed and updated, among other things, its volatility and expected term assumptions. Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2007, 2006 and 2005 annual grant date, the Company estimated the expected volatility based upon the average of the most recent one year volatility, the median of the term of the expected life rolling volatility, the median of the most recent term of the expected life volatility of 3M stock, and the implied volatility on the grant date. The expected term assumption is based on the weighted average of historical grants and assuming that options outstanding are exercised at the midpoint of the future remaining term. As previously mentioned, the Company expanded its utilization of restricted stock units in conjunction with the May 2007 MSOP Annual Grant. The May 2007 annual restricted stock unit grant does not accrue dividends during the vesting period and vests over three years. The 2007 one-time "buyout" restricted stock unit grant vests over five years.
General Employees' Stock Purchase Plan (GESPP):
In May 1997, shareholders approved 30 million shares for issuance under the Company's GESPP. Substantially all employees are eligible to participate in the plan. Participants are granted options at 85% of market value at the date of grant. There are no GESPP shares under option at the beginning or end of each year because options are granted on the first business day and exercised on the last business day of the same month.
General Employees' Stock Purchase Plan 2007 2006 2005
Exercise Exercise Exercise
Shares Price* Shares Price* Shares Price*
Options granted 1,507,335 $ 69.34 1,656,554 $ 65.25 1,646,521 $ 66.11
Options exercised (1,507,335 ) 69.34 (1,656,554 ) 65.25 (1,646,521 ) 66.11
Shares available for grant - December 31 8,940,650 10,447,985 12,104,539

*Weighted average
The weighted-average fair value per option granted during 2007, 2006 and 2005 was $12.24, $11.51 and $11.67, respectively. The fair value of GESPP options was based on the 15% purchase price discount. The Company recognized compensation expense for GESSP options of $18 million in 2007, $19 million in 2006, and $19 million in 2005.


See also: mmm-20071231-Note14-04-GESPP.html
Share-based Arrangements to Obtain Goods and Services [Abstract]



Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Text Block]
Schedule of Share-based Compensation Arrangements by Share-based Payment Award [Table]



Share-based Compensation Arrangement by Share-based Payment Award [Line Items]



Share-based Compensation Arrangement by Share-based Payment Award, Method of Measuring Cost of Award
The impact of stock-based compensation on net income and earnings per share provided below for the year ended December 31, 2005, was recognized over the nominal vesting period, whereby if an employee retired before the end of the vesting period, the Company would recognize any remaining unrecognized compensation cost at the date of retirement.
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Text Block]
MSOP / GESPP Stock-based Compensation Expense:
The impact of stock-based compensation on net income and earnings per share provided below for the year ended December 31, 2005, was recognized over the nominal vesting period, whereby if an employee retired before the end of the vesting period, the Company would recognize any remaining unrecognized compensation cost at the date of retirement. SFAS No. 123R requires recognition under a non-substantive vesting period approach, requiring compensation expense recognition when an employee is eligible to retire. 3M employees in the United States are eligible to retire beginning at age 55 and after having completed five years of service. Approximately 25% of the number of stock-based compensation awards are made to this population. The Company changed to the non-substantive vesting period approach for new stock compensation grants made after the Company's adoption of SFAS No. 123R on January 1, 2006. Therefore, primarily beginning in May 2006 with the annual MSOP grant, immediate expensing of those stock-based compensation awards granted to employees eligible to retire resulted in higher compensation expense than historically recognized in comparable prior periods. Capitalized stock-based compensation amounts were not material for 2007, 2006 and 2005. The income tax benefits can fluctuate by period due to the amount of Incentive Stock Options (ISO) exercised since the Company receives the ISO tax benefit upon exercise. The Company last granted ISO's in 2002. Amounts recognized in the financial statements with respect to both the MSOP and GESPP are as follows:
MSOP / GESPP STOCK-BASED
COMPENSATION EXPENSE
Years ended
December 31
(Millions, except per share amounts) 2007 2006 2005
Cost of sales $ 47 $ 42 $ 27
Selling, general and administrative expenses 137 119 96
Research, development and related expenses 44 39 32
Operating Income (Loss) $(228) $(200) $(155)
Income tax benefits $93 $72 $67
Net Income (Loss) $ (135) $ (128) $ (88)
Earnings per share impact - diluted $ (0.18) $(0.17) $(0.14)
Earnings per share - diluted $5.60 $5.06 $3.98
The following table adjusts the revised diluted earnings per share for 2005 from the preceding table to reflect the approximate impact of using the non-substantive vesting period approach for these periods.
Stock-Based Compensation
Pro Forma Earnings Per Share - Diluted 2005
Earnings per share - diluted $3.98
Impact of retirement-eligible employees $(0.02)
Pro forma (adjusted to reflect non-substantive vesting period approach) $3.96


See also: mmm-20071231-Note14-Allocation.html
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table]



Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]



Earnings Per Share, Diluted
5.60
5.06
3.98
Adoption of SFAS123R, Share-based Payments, Transition Disclosure
SFAS No. 123R requires recognition under a non-substantive vesting period approach, requiring compensation expense recognition when an employee is eligible to retire. 3M employees in the United States are eligible to retire beginning at age 55 and after having completed five years of service. Approximately 25% of the number of stock-based compensation awards are made to this population. The Company changed to the non-substantive vesting period approach for new stock compensation grants made after the Company's adoption of SFAS No. 123R on January 1, 2006. Therefore, primarily beginning in May 2006 with the annual MSOP grant, immediate expensing of those stock-based compensation awards granted to employees eligible to retire resulted in higher compensation expense than historically recognized in comparable prior periods. Capitalized stock-based compensation amounts were not material for 2007, 2006 and 2005. The income tax benefits can fluctuate by period due to the amount of Incentive Stock Options (ISO) exercised since the Company receives the ISO tax benefit upon exercise.
SFAS 123R, Share-based Payments, Pro Forma Amounts Prior to Adoption, Actual Diluted Earnings Per Share
3.98
SFAS 123R Share-based Payments Pro Forma Disclosures, Pro Forma Amounts Prior to Adoption, Impact of Retirement-eligible Employees, Diluted Earnings Per Share
(0.02)
SFAS 123R, Share-based Payments, Pro Forma Disclosures, Periods Prior to Adoption, Fair Value, Diluted Earnings Per Share
3.96

006160 - Disclosure - Notes 16 and 17 - Business Segments and Geographic Areas
(Dollars in millions, except share and per share amounts)
2007
2006
2005
Business Segments and Geographic Areas Disclosures [Abstract]



Business Segments Disclosure [Text Block]
NOTE 16. Business Segments
Effective in the first quarter of 2007, 3M made certain changes to its business segments in its continuing effort to drive growth by aligning businesses around markets and customers. The most significant of these changes are summarized as follows:
* 3M's new emerging business opportunity in its Track and Trace initiative resulted in the merging of a number of formerly separate efforts into one concerted effort for future growth. Track and Trace has a growing array of applications - from tracking packages to managing medical and legal records. The establishment of this new initiative within 3M's Safety, Security and Protection Services segment resulted in the transfer of certain businesses to this segment from other segments, including the transfer of HighJump Software Inc., a 3M U.S.-based subsidiary that provides supply chain execution software and solutions (Industrial and Transportation segment) and the transfer of certain Track and Trace products from the Electro and Communications segment.
* 3M's Visual Systems business (Consumer and Office segment), which offers analog overhead and electronic projectors and film, was transferred to the Electro and Communications segment. This transfer is intended to leverage common markets, customers, suppliers and technologies.
* 3M's Industrial and Transportation segment (Energy and Advanced Materials business) transferred the 3M™ Aluminum Conductor Composite Reinforced (ACCR) electrical power cable to the Electro and Communications segment (Electrical Markets business). With an aluminum-based metal matrix at its core, the ACCR product increases transmission capacity for existing power lines. The Electrical Markets business sells insulating, testing and connecting products to various markets, including the electric utility markets.
* Certain adhesives and tapes in the Industrial and Transportation segment (Industrial Adhesives and Tapes business) were transferred to the Consumer and Office segment (primarily related to the Construction and Home Improvement business and the Stationery Products business) and to the Electro and Communications segment (Electronics Markets Materials business). Certain maintenance-free respirator products for the consumer market in 3M's Safety, Security and Protection Services segment were transferred to the Consumer and Office segment (Construction and Home Improvement business).
* 3M transferred Film Manufacturing and Supply Chain Operations, a resource for the manufacturing and development of films and materials, to the Display and Graphics Business from Corporate and Unallocated.
The financial information presented herein reflects the impact of all of the preceding changes for all periods presented.
3M's businesses are organized, managed and internally grouped into segments based on differences in products, technologies and services. 3M continues to manage its operations in six operating business segments: Industrial and Transportation segment, Health Care segment, Display and Graphics segment, Consumer and Office segment, Safety, Security and Protection Services segment and Electro and Communications segment. 3M's six business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. These segments have worldwide responsibility for virtually all 3M product lines. 3M is not dependent on any single product or market. Certain small businesses and lab-sponsored products, as well as various corporate assets and expenses, are not allocated to the business segments.
Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income and other financial information shown. The allocations resulting from the shared utilization of assets are not necessarily indicative of the underlying activity for segment assets, depreciation and amortization, and capital expenditures.
Business Segment Products
Business Segment Major Products
Industrial and Transportation Tapes, coated and nonwoven abrasives, adhesives, specialty materials, filtration products, closures for disposable diapers, automotive components, abrasion-resistant films, structural adhesives and paint finishing and detailing products

Health Care Medical and surgical supplies, skin health and infection prevention products, pharmaceuticals (sold in December 2006 and January 2007), drug delivery systems, dental and orthodontic products, health information systems and microbiology products

Display and Graphics Optical films and lens solutions for electronic displays, touch screens and touch monitors, reflective sheeting for transportation safety, and commercial graphics systems

Consumer and Office Sponges, scouring pads, high-performance cloths, consumer and office tapes, repositionable notes, carpet and fabric protectors, construction and home improvement products, home care products, protective material products and consumer health care products

Safety, Security and Protection Services Personal protection products, safety and security products, energy control products, commercial cleaning and protection products, floor matting, roofing granules for asphalt shingles, and Track and Trace products, such as supply chain execution software solutions

Electro and Communications Packaging and interconnection devices, insulating and splicing solutions for the electronics, telecommunications, electrical industries, and visual systems


See also: mmm-20071231-Note16-01-Segments.html

Business Segment Information
Net Sales Operating Income
(Millions) 2007 2006 2005 2007 2006 2005
Industrial and Transportation $7,274 $6,640 $6,047 $1,501 $1,342 $1,210
Health Care 3,968 4,011 3,760 1,882 1,845 1,114
Display and Graphics 3,892 3,770 3,547 1,174 1,044 1,148
Consumer and Office 3,403 3,164 2,926 688 629 609
Safety, Security and Protection Services 3,070 2,663 2,320 611 549 513
Electro and Communications 2,775 2,631 2,509 481 411 422
Corporate and Unallocated 80 44 58 (144) (124) (162)
Total Company $24,462 $22,923 $21,167 $6,193 $5,696 $4,854


See also: mmm-20071231-Note16-02-SegmentRevenueAndIncome.html

Assets Depreciation & Amortization Capital Expenditures
(Millions) 2007 2006 2005 2007 2006 2005 2007 2006 2005
Industrial and Transportation $5,872 $5,180 $5,013 $294 $287 $282 $396 $284 $263
Health Care 2,909 2,477 2,166 138 162 131 213 159 138
Display and Graphics 3,199 3,035 2,775 222 232 189 341 323 237
Consumer and Office 1,720 1,577 1,476 82 77 83 101 103 79
Safety, Security and Protection Services 2,344 2,061 1,429 161 120 121 205 151 100
Electro and Communications 2,063 2,003 1,877 146 173 155 136 117 113
Corporate and Unallocated 6,587 4,961 5,805 29 28 25 30 31 13
Total Company $24,694 $21,294 $20,541 $1,072 $1,079 $986 $1,422 $1,168 $943


See also: mmm-20071231-Note16-03-SegmentAssets.html

Segment assets for the operating business segments (excluding Corporate and Unallocated) primarily include accounts receivable; inventory; property, plant and equipment - net; goodwill and intangible assets; and other miscellaneous assets. Assets included in Corporate and Unallocated principally are cash, cash equivalents and marketable securities; insurance receivables; deferred income taxes; certain investments and other assets, including prepaid pension assets; and certain unallocated property, plant and equipment. Corporate and unallocated assets can change from year to year due to changes in cash, cash equivalents and marketable securities, changes in prepaid pension and postretirement benefits, and changes in other unallocated asset categories. For management reporting purposes, corporate goodwill (which at December 31, 2007, totaled approximately $400 million) is not allocated to the six operating business segments. In Note 3, corporate goodwill has been allocated to the respective market segments as required by SFAS No. 142 for impairment testing.

Corporate and Unallocated operating income principally includes corporate investment gains and losses, certain derivative gains and losses, insurance-related gains and losses, certain litigation expenses, corporate restructuring program charges and other miscellaneous items. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.
Refer to Note 2 and Note 4 for discussion of items that significantly impact business segment reported results. The most significant items impacting both 2007 and 2006 results are the net gain on sale of the pharmaceuticals business (within the Health Care segment) and restructuring and other actions.
Segment Reporting, General Information

Effective in the first quarter of 2007, 3M made certain changes to its business segments in its continuing effort to drive growth by aligning businesses around markets and customers. The most significant of these changes are summarized as follows:
* 3M's new emerging business opportunity in its Track and Trace initiative resulted in the merging of a number of formerly separate efforts into one concerted effort for future growth. Track and Trace has a growing array of applications from tracking packages to managing medical and legal records. The establishment of this new initiative within 3M's Safety, Security and Protection Services segment resulted in the transfer of certain businesses to this segment from other segments, including the transfer of HighJump Software Inc., a 3M U.S.-based subsidiary that provides supply chain execution software and solutions (Industrial and Transportation segment) and the transfer of certain Track and Trace products from the Electro and Communications segment.
* 3M's Visual Systems business (Consumer and Office segment), which offers analog overhead and electronic projectors and film, was transferred to the Electro and Communications segment. This transfer is intended to leverage common markets, customers, suppliers and technologies.
* 3M's Industrial and Transportation segment (Energy and Advanced Materials business) transferred the 3M Aluminum Conductor Composite Reinforced (ACCR) electrical power cable to the Electro and Communications segment (Electrical Markets business). With an aluminum-based metal matrix at its core, the ACCR product increases transmission capacity for existing power lines. The Electrical Markets business sells insulating, testing and connecting products to various markets, including the electric utility markets.
* Certain adhesives and tapes in the Industrial and Transportation segment (Industrial Adhesives and Tapes business) were transferred to the Consumer and Office segment (primarily related to the Construction and Home Improvement business and the Stationery Products business) and to the Electro and Communications segment (Electronics Markets Materials business). Certain maintenance-free respirator products for the consumer market in 3M's Safety, Security and Protection Services segment were transferred to the Consumer and Office segment (Construction and Home Improvement business).
* 3M transferred Film Manufacturing and Supply Chain Operations, a resource for the manufacturing and development of films and materials, to the Display and Graphics Business from Corporate and Unallocated.
The financial information presented herein reflects the impact of all of the preceding changes for all periods presented.
3M's businesses are organized, managed and internally grouped into segments based on differences in products, technologies and services. 3M continues to manage its operations in six operating business segments: Industrial and Transportation segment, Health Care segment, Display and Graphics segment, Consumer and Office segment, Safety, Security and Protection Services segment and Electro and Communications segment. 3M's six business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. These segments have worldwide responsibility for virtually all 3M product lines. 3M is not dependent on any single product or market. Certain small businesses and lab-sponsored products, as well as various corporate assets and expenses, are not allocated to the business segments.
Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income and other financial information shown. The allocations resulting from the shared utilization of assets are not necessarily indicative of the underlying activity for segment assets, depreciation and amortization, and capital expenditures.
Schedule of Segment Reporting Information, by Segment [Table]



Segment Reporting Information [Line Items]



Segment Reporting Information, Expenditures for Additions to Long-Lived Assets
1,422
1,168
943
Segment Reporting Information, Assets
24,694
21,294
20,541
Segment Reporting Information, Revenue
24,462
22,923
21,167
Segment Reporting Information, Depreciation, Depletion, and Amortization Expense
1,072
1,079
986
Segment Reporting Information, Operating Income (Loss)
6,193
5,696
4,854
Segment Reporting Information, Property, Plant, and Equipment, Net
6,582
5,907
5,593
Geographic Areas Disclosure [Text Block]
NOTE 17. Geographic Areas
Geographic area information is used by the Company as a secondary performance measure to manage its businesses. Export sales and certain income and expense items are reported within the geographic area where the final sales to 3M customers are made.

Net sales to customers Operating Income Property, plant and equipment, net
(Millions) 2007 2006 2005 2007 2006 2005 2007 2006 2005
United States $ 8,987 $ 8,853 $ 8,267 $ 1,692 $ 1,908 $ 1,200 $ 3,668 $ 3,382 $ 3,291
Asia Pacific 6,601 6,251 5,744 2,136 2,097 2,085 1,116 959 865
Europe, Middle East and Africa 6,503 5,726 5,219 1,705 1,092 1,057 1,308 1,162 1,076
Latin America and Canada 2,365 2,080 1,881 665 629 512 490 404 361
Other Unallocated 6 13 56 (5) (30)
Total Company $ 24,462 $ 22,923 $ 21,167 $ 6,193 $ 5,696 $ 4,854 $ 6,582 $ 5,907 $ 5,593


See also: mmm-20071231-Note17-01-SegmentGeography.html

006180 - Disclosure - Note 18 - Quarterly Data Unaudited
(Dollars in millions, except share and per share amounts)
FY07
FY07 Q1
FY07 Q2
FY07 Q3
FY07 Q4
FY06
FY06 Q1
FY06 Q2
FY06 Q3
FY06 Q4
Quarterly Data Disclosure [Abstract]










Quarterly Financial Information [Text Block]


NOTE 18. Quarterly Data (Unaudited)

(Millions, except per-share amounts) First Second Third Fourth Year 2007 Quarter Quarter Quarter Quarter 2007
Net sales $5,937 $6,142 $6,177 $6,206 $24,462
Cost of sales 3,022 3,175 3,240 3,298 12,735
Net income 1,368 917 960 851 4,096
Earnings per share - basic 1.88 1.28 1.34 1.20 5.70
Earnings per share - diluted 1.85 1.25 1.32 1.17 5.60

First Second Third Fourth Year
2006 Quarter Quarter Quarter Quarter 2006
Net sales $5,595 $5,688 $5,858 $5,782 $22,923
Cost of sales 2,721 2,840 2,990 3,162 11,713
Net income 899 882 894 1,176 3,851
Earnings per share - basic 1.19 1.17 1.20 1.60 5.15
Earnings per share - diluted 1.17 1.15 1.18 1.57 5.06

Gross profit is calculated as net sales minus cost of sales. In 2007, gains on sales of businesses and real estate, net of restructuring and other items, increased net income by $448 million, or $0.62 per diluted share, with $422 million, or $0.57 per diluted share recorded in the first quarter of 2007. 2007 included net benefits from gains related to the sale of businesses and a gain on sale of real estate, which were partially offset by increases in environmental liabilities, restructuring actions, and other exit activities. In 2006, a gain on sale, net of restructuring and other items, increased net income by $438 million, or $0.57 per diluted share, with $354 million, or $0.47 per diluted share, recorded in the fourth quarter of 2006. 2006 included net benefits from gains related to the sale of certain portions of 3M's branded pharmaceuticals business and favorable income tax adjustments, which were 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
Selected Quarterly Financial Information [Abstract]










Sales Revenue, Net
24,462
5,937
6,142
6,177
6,206
22,923
5,595
5,688
5,858
5,782
Cost of Revenue
12,735
3,022
3,175
3,240
3,298
11,713
2,721
2,840
2,990
3,162
Net Income
4,096
1,368
917
960
4,096
3,851
899
882
894
1,176
Earnings Per Share, Basic
5.70
1.88
1.28
1.34
1.20
5.15
1.19
1.17
1.20
1.60
Earnings Per Share, Diluted
5.60
1.85
1.25
1.32
1.17
5.06
1.17
1.15
1.18
1.57
Quarterly Financial Information, by Item Affecting Comparability [Table]










Quarterly Financial Information, Items Affecting Comparability [Line Items]










Items Affecting Comparability, Explanatory Disclosure
Gross profit is calculated as net sales minus cost of sales. 2006 included net benefits from gains related to the sale of certain portions of 3M's branded pharmaceuticals business and favorable income tax adjustments, which were 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.