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3M Company (96OI)

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Tuesday 06 May, 2008

3M Company

1st Quarter Results

3M Company
05 May 2008

Part 1
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                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                   FORM 10-Q



             (x) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

                        SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 2008



                         Commission file number 1-3285



                                   3M COMPANY


            State of Incorporation: Delaware                        I.R.S. Employer Identification No. 41-0417775

       Principal executive offices: 3M Center, St. Paul, Minnesota 55144

                        Telephone number: (651) 733-1110



                Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to the
filing requirements for at least the past 90 days.  Yes x.  No o.



                Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See definitions of 'large accelerated filer,' 'accelerated
filer,' and 'smaller reporting company' in Rule 12b-2 of the Exchange Act.
(Check one):


                 Large accelerated filer (x)                                      Accelerated filer   (  )

                  Non-accelerated filer (  )                                 Smaller reporting company (  )
       (Do not check if a smaller reporting company)



                Indicate by check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).   Yes( ).  No (x).



       Shares of common stock outstanding at March 31, 2008: 704,287,501.



             This document (excluding exhibits) contains 43 pages.

                 The table of contents is set forth on page 2.

                      The exhibit index begins on page 41.




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                                   3M COMPANY

            Form 10-Q for the Quarterly Period Ended March 31, 2008

                               TABLE OF CONTENTS




                                                                                                                 PAGE
PART I              FINANCIAL INFORMATION

        ITEM 1.     Financial Statements                                                                              3

                    Index to Financial Statements:
                    Consolidated Statement of Income                                                                  3
                    Consolidated Balance Sheet                                                                        4
                    Consolidated Statement of Cash Flows                                                              5
                    Notes to Consolidated Financial Statements
                          Note 1.  Basis of Presentation                                                              6
                          Note 2.  Acquisitions                                                                       8
                          Note 3.  Goodwill and Intangible Assets                                                     8
                          Note 4.  2006/2007 Restructuring Actions                                                   10
                          Note 5.  Supplemental Stockholders' Equity and Comprehensive Income Information            10
                          Note 6.  Income Taxes                                                                      11
                          Note 7.  Marketable Securities                                                             12
                          Note 8.  Pension and Postretirement Benefit Plans                                          13
                          Note 9.  Derivatives and Other Financial Instruments                                       14
                          Note 10. Fair Value Measurements                                                           14
                          Note 11. Commitments and Contingencies                                                     17
                          Note 12. Management Stock Ownership Program (MSOP) and General Employees' Stock            21
                                   Purchase Plan (GESPP)
                          Note 13. Business Segments                                                                 22
                          Note 14. Review Report of Independent Registered Public Accounting Firm                    23
                    Report of Independent Registered Public Accounting Firm                                          24

        ITEM 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations
                    Index to Management's Discussion and Analysis:
                    Overview                                                                                         25
                    Results of Operations                                                                            27
                    Performance by Business Segment                                                                  29
                    Financial Condition and Liquidity                                                                35
                    Forward-Looking Statements                                                                       38

        ITEM 3.     Quantitative and Qualitative Disclosures About Market Risk                                       39

        ITEM 4.     Controls and Procedures                                                                          39

PART II             OTHER INFORMATION

        ITEM 1.     Legal Proceedings                                                                                40

        ITEM 1A.    Risk Factors                                                                                     40

        ITEM 2.     Unregistered Sales of Equity Securities and Use of Proceeds                                      40

        ITEM 3.     Defaults Upon Senior Securities                                                                  40

        ITEM 4.     Submission of Matters to a Vote of Security Holders                                              40

        ITEM 5.     Other Information                                                                                41

        ITEM 6.     Exhibits                                                                                         41



                                       2
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3M COMPANY
FORM 10-Q
For the Quarterly Period Ended March 31, 2008
PART I.  Financial Information



Item 1.  Financial Statements.



3M Company and Subsidiaries
Consolidated Statement of Income
(Unaudited)


                                                                                            Three months ended
                                                                                                 March 31
Millions, except per share amounts)                                                        2008            2007
Net sales                                                                              $      6,463    $      5,937
Operating expenses
Cost of sales                                                                                 3,336           3,022
Selling, general and administrative expenses                                                  1,275           1,281
Research, development and related expenses                                                      351             319
Gain on sale of businesses                                                                        -            (786 )
Total                                                                                         4,962           3,836
Operating income                                                                              1,501           2,101

Interest expense and income
Interest expense                                                                                 55              38
Interest income                                                                                 (30 )           (28 )
Total                                                                                            25              10

Income before income taxes and minority interest                                              1,476           2,091
Provision for income taxes                                                                      470             708
Minority interest                                                                                18              15
Net income                                                                             $        988    $      1,368

Weighted average common shares outstanding - basic                                            706.5           729.3
Earnings per share - basic                                                             $       1.40    $       1.88

Weighted average common shares outstanding - diluted                                          717.2           741.3
Earnings per share - diluted                                                           $       1.38    $       1.85

Cash dividends paid per common share                                                   $       0.50    $       0.48



The accompanying Notes to Consolidated Financial Statements are an integral part
of this statement.





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3M Company and Subsidiaries
Consolidated Balance Sheet
(Unaudited)


(Dollars in millions, except per share amount)                                            Mar. 31         Dec. 31
                                                                                            2008            2007
Assets
Current assets
Cash and cash equivalents                                                               $      2,727    $      1,896
Marketable securities - current                                                                  567             579
Accounts receivable - net                                                                      3,776           3,362
Inventories
Finished goods                                                                                 1,432           1,349
Work in process                                                                                  952             880
Raw materials and supplies                                                                       637             623
Total inventories                                                                              3,021           2,852
Other current assets                                                                           1,234           1,149
Total current assets                                                                          11,325           9,838

Marketable securities - non-current                                                              660             480
Investments                                                                                      302             298
Property, plant and equipment                                                                 18,961          18,390
Less: Accumulated depreciation                                                               (12,186 )       (11,808 )
Property, plant and equipment - net                                                            6,775           6,582
Goodwill                                                                                       4,759           4,589
Intangible assets - net                                                                          793             801
Prepaid pension and postretirement benefits                                                    1,416           1,378
Other assets                                                                                     739             728
Total assets                                                                            $     26,769    $     24,694

Liabilities and Stockholders' Equity
Current liabilities
Short-term borrowings and current portion of long-term debt                             $      2,042    $        901
Accounts payable                                                                               1,557           1,505
Accrued payroll                                                                                  595             580
Accrued income taxes                                                                             710             543
Other current liabilities                                                                      1,796           1,833
Total current liabilities                                                                      6,700           5,362

Long-term debt                                                                                 4,140           4,019
Other liabilities                                                                              3,494           3,566
Total liabilities                                                                       $     14,334    $     12,947

Commitments and contingencies (Note 11)

Stockholders' equity
Common stock par value, $.01 par value, 944,033,056 shares issued                                  9               9
Additional paid-in capital                                                                     2,833           2,785
Retained earnings                                                                             20,929          20,316
Treasury stock, at cost; 239,745,555 shares at March 31, 2008; 234,877,025 shares at         (10,900 )       (10,520 )
 Dec. 31, 2007
Unearned compensation                                                                            (81 )           (96 )
Accumulated other comprehensive income (loss)                                                   (355 )          (747 )
Stockholders' equity - net                                                                    12,435          11,747
Total liabilities and stockholders' equity                                              $     26,769    $     24,694



The accompanying Notes to Consolidated Financial Statements are an integral part
of this statement.





                                       4
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3M Company and Subsidiaries
Consolidated Statement of Cash Flows
(Unaudited)


                                                                                            Three months ended
                                                                                                 March 31
(Dollars in millions)                                                                      2008            2007
Cash Flows from Operating Activities
Net income                                                                             $        988    $      1,368
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization                                                                   268             254
Company pension and postretirement contributions                                                (49 )           (61 )
Company pension and postretirement expense                                                       28              57
Stock-based compensation expense                                                                 43              33
Gain from sale of businesses                                                                      -            (786 )
Deferred income taxes                                                                             3            (222 )
Excess tax benefits from stock-based compensation                                                (5 )            (7 )
Changes in assets and liabilities
Accounts receivable                                                                            (264 )          (319 )
Inventories                                                                                     (86 )          (107 )
Accounts payable                                                                                 20              49
Accrued income taxes                                                                             70             353
Product and other insurance receivables and claims                                               25              75
Other - net                                                                                     (44 )          (107 )
Net cash provided by operating activities                                                       997             580

Cash Flows from Investing Activities
Purchases of property, plant and equipment (PP&E)                                              (298 )          (304 )
Proceeds from sale of PP&E and other assets                                                       4               4
Acquisitions, net of cash acquired                                                              (16 )           (55 )
Purchases of marketable securities and investments                                             (622 )        (3,285 )
Proceeds from sale of marketable securities and investments                                     250           2,741
Proceeds from maturities of marketable securities                                               218              95
Proceeds from sale of businesses                                                                  -             817
Net cash provided by (used in) investing activities                                            (464 )            13

Cash Flows from Financing Activities
Change in short-term debt - net                                                               1,211            (448 )
Repayment of debt (maturities greater than 90 days)                                             (89 )           (56 )
Proceeds from debt (maturities greater than 90 days)                                              -           1,565
Purchases of treasury stock                                                                    (510 )        (1,164 )
Reissuances of treasury stock                                                                    79              98
Dividends paid to stockholders                                                                 (353 )          (350 )
Distributions to minority interests                                                             (12 )           (10 )
Excess tax benefits from stock-based compensation                                                 5               7
Other - net                                                                                     (16 )            (6 )
Net cash provided by (used in) financing activities                                             315            (364 )

Effect of exchange rate changes on cash and cash equivalents                                    (17 )            21

Net increase (decrease) in cash and cash equivalents                                            831             250
Cash and cash equivalents at beginning of year                                                1,896           1,447
Cash and cash equivalents at end of period                                             $      2,727    $      1,697



The accompanying Notes to Consolidated Financial Statements are an integral part
of this statement.





                                       5
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3M Company and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)



NOTE 1.  Basis of Presentation



The interim consolidated financial statements are unaudited but, in the opinion
of management, reflect all adjustments necessary for a fair statement of the
Company's consolidated financial position, results of operations and cash flows
for the periods presented. These adjustments consist of normal, recurring items.
The results of operations for any interim period are not necessarily indicative
of results for the full year. The interim consolidated financial statements and
notes are presented as permitted by the requirements for Quarterly Reports on
Form 10-Q.



This Quarterly Report on Form 10-Q should be read in conjunction with the
Company's consolidated financial statements and notes included in its 2007
Annual Report on Form 10-K. However, as described in Note 13, during the first
quarter of 2008, the Company effected certain product moves between business
segments. The Company has begun to report comparative results under the new
business segment structure with the filing of this Quarterly Report on Form
10-Q. In the second quarter of 2008, the Company plans to revise its business
segment disclosures in its 2007 Annual Report on Form 10-K via a Form 8-K to
reflect these impacts.



Significant Accounting Policies



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 (MSOP) options outstanding were not included
in the computation of diluted earnings per share because they would not have had
a dilutive effect (28.1 million average options for the three months ended March
31, 2008; 35.4 million average options for the three months ended March 31,
2007). The conditions for conversion related to the Company's 'Convertible Notes
' were not met (refer to 3M's 2007 Annual Report on Form 10-K, Note 10 to the
Consolidated Financial Statements, for more detail); accordingly, there was no
impact on 3M's diluted earnings per share. 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. The
computations for basic and diluted earnings per share follow:



Earnings Per Share Computations


                                                 Three months ended
                                                      March 31
(Amounts in millions, except per share            2008        2007
amounts)
Numerator:
Net income                                      $     988   $   1,368

Denominator:
Denominator for weighted average common             706.5       729.3
shares outstanding - basic

Dilution associated with the Company's               10.7        12.0
stock-based compensation plans

Denominator for weighted average common             717.2       741.3
shares outstanding - diluted

Earnings per share - basic                      $    1.40   $    1.88
Earnings per share - diluted                         1.38        1.85



New Accounting Pronouncements



In September 2006, the Financial Accounting Standards Board (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. This statement applies under
other accounting pronouncements that require or permit fair value measurements.
In February 2008, the FASB issued Staff Positions (FSPs) No. 157-1 and No.
157-2, which, respectively, remove leasing transactions from the scope of SFAS
No. 157 and defer its effective date for one year relative to certain
nonfinancial assets and liabilities. As a result, the application of the
definition of fair value and related disclosures of SFAS No. 157 (as impacted by
these two FSPs) was effective for 3M beginning January 1,





                                       6
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2008 on a prospective basis with respect to fair value measurements of (a)
nonfinancial assets and liabilities that are recognized or disclosed at fair
value in the Company's financial statements on a recurring basis (at least
annually) and (b) all financial assets and liabilities. This adoption did not
have a material impact on 3M's consolidated results of operations or financial
condition. The remaining aspects of SFAS No. 157 for which the effective date
was deferred under FSP No. 157-2 are currently being evaluated by the Company.
Areas impacted by the deferral relate to nonfinancial assets and liabilities
that are measured at fair value, but are recognized or disclosed at fair value
on a nonrecurring basis. This deferral applies to such items as nonfinancial
assets and liabilities initially measured at fair value in a business
combination (but not measured at fair value in subsequent periods) or
nonfinancial long-lived asset groups measured at fair value for an impairment
assessment. The effects of these remaining aspects of SFAS No. 157 are to be
applied by 3M to fair value measurements prospectively beginning January 1,
2009. The Company does not expect them to have a material impact on 3M's
consolidated results of operations or financial condition. Refer to Note 10 for
disclosures required by this new pronouncement.



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 reports 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 are recognized in earnings as incurred and not deferred. SFAS
No. 159 also established 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 was
effective for financial statements issued for fiscal years beginning after
November 15, 2007 (January 1, 2008 for 3M). At the effective date, an entity
could elect the fair value option for eligible items that existed at that date.
The entity was required to report the effect of the first remeasurement to fair
value as a cumulative-effect adjustment to the opening balance of retained
earnings. The Company did not elect 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 required
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 was effective for 3M with respect
to new arrangements entered into beginning January 1, 2008. The adoption of EITF
Issue No. 07-3 did not 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 accounting for business acquisitions. 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 decreases 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 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





                                       7
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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.



In March 2008, the FASB issued SFAS No. 161, 'Disclosures about Derivative
Instruments and Hedging Activities,' which will require increased disclosures
about an entity's strategies and objectives for using derivative instruments;
the location and amounts of derivative instruments in an entity's financial
statements; how derivative instruments and related hedged items are accounted
for under SFAS No. 133, 'Accounting for Derivative Instruments and Hedging
Activities;' and how derivative instruments and related hedged items affect its
financial position, financial performance, and cash flows. Certain disclosures
will also be required with respect to derivative features that are credit
risk-related. SFAS No. 161 is effective for 3M beginning January 1, 2009 on a
prospective basis. The Company does not expect this standard to have a material
impact on 3M's consolidated results of operations or financial condition.



NOTE 2.  Acquisitions



During the three months ended March 31, 2008, 3M completed one business
combination. In March 2008, 3M (Industrial and Transportation Business)
purchased certain assets of Hitech Polymers Inc., a manufacturer of specialty
thermoplastic polymers and provider of toll thermoplastic compounding services
based in Hebron, KY. The purchase price paid for this acquisition (net of cash
acquired) and certain contingent consideration paid during the three months
ended March 31, 2008 for previous acquisitions aggregated to $16 million.



Pro forma information related to the above acquisition is not included because
the impact on the Company's consolidated results of operations is not considered
to be material. Purchased identifiable intangible assets and in-process research
and development charges associated with this acquisition were not material.



In addition to business combinations, 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.



Subsequent Event



On April 1, 2008, 3M (Safety, Security and Protection Services Business)
announced that it completed its acquisition of Aearo Holding Corp., the parent
company of Aearo Technologies, Inc., a manufacturer of personal protection and
energy absorbing products for approximately $1.2 billion, inclusive of debt
assumed.



NOTE 3.  Goodwill and Intangible Assets



As discussed in Note 13, 3M made certain changes to its business segments
effective in the first quarter of 2008, which resulted in no material changes to
the goodwill balances by business segment. 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 requires that goodwill be
tested for impairment at least annually and when reporting units are changed.
During the first quarter of 2008, the Company completed its assessment of any
potential goodwill impairment under this new structure and determined that no
impairment existed.



Purchased goodwill related to the one acquisition which closed in the first
three months of 2008 totaled $2 million, all of which is deductible for tax
purposes. The acquisition activity in the table below also includes the impacts
of purchase accounting adjustments and contingent consideration for previously
closed acquisitions. The amounts in the 'Translation and other' column in the
following table primarily relate to changes in foreign currency exchange rates.
The goodwill balance by business segment as of December 31, 2007 and March 31,
2008, follow:





                                       8
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Goodwill


(Millions)                                      Dec. 31,     Acquisition    Translation    Mar. 31,
                                                  2007        activity       and other       2008
                                                 Balance                                    Balance
Industrial and Transportation                   $   1,524    $        (4 )  $        64    $   1,584
Health Care                                           839              9             41          889
Display and Graphics                                  894              -              3          897
Consumer and Office                                    94              -              8          102
Safety, Security and Protection Services              611             (2 )           16          625
Electro and Communications                            627              -             35          662
Total Company                                   $   4,589    $         3    $       167    $   4,759



Acquired Intangible Assets



The carrying amount and accumulated amortization of acquired intangible assets
as of March 31, 2008, and December 31, 2007, follow:


(Millions)                                                       Mar. 31     Dec. 31
                                                                  2008        2007
Patents                                                         $     458   $     446
Other amortizable intangible assets (primarily tradenames and         796         801
customer related intangibles)
Non-amortizable intangible assets (tradenames)                         81          75
Total gross carrying amount                                     $   1,335   $   1,322

Accumulated amortization - patents                                   (319 )      (305 )
Accumulated amortization - other                                     (223 )      (216 )
Total accumulated amortization                                       (542 )      (521 )
Total intangible assets - net                                   $     793   $     801



Amortization expense for acquired intangible assets for the three-month period
ended March 31, 2008 and 2007 follows:


                                         Three months
                                             ended
                                           March 31
(Millions)                              2008      2007
Amortization expense                   $    24   $    21



The table below shows expected amortization expense for acquired intangible
assets recorded as of March 31, 2008:


(Millions)               Last 3       2009        2010        2011        2012       After
                        Quarters                                                      2013
                          2008
Amortization expense    $     77    $     95    $     86    $     79    $     70    $    305



The 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.





                                       9
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NOTE 4.  2006/2007 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 in late 2006 and early 2007.
These costs included severance and benefits for pharmaceuticals business
employees who are not obtaining employment with the buyers of the
pharmaceuticals business 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.



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



The remaining accrued liability balances and cash payments in 2008 follow:



Restructuring Activity


(Millions)                                         Accrued           Cash          Accrued
                                                  Liability      Payments in      Liability
                                                   Balances          2008         Balances
                                                 at Dec. 31,                      at March
                                                     2007                         31, 2008
Employee-Related Items and Benefits
Pharmaceuticals business actions                 $          5    $         (4 )  $         1
Overhead reduction actions                                 10              (4 )            6
Business-specific actions                                   5              (3 )            2
Total                                            $         20    $        (11 )  $         9



NOTE 5.  Supplemental Stockholders' Equity and Comprehensive Income Information



Accumulated Other Comprehensive Income (Loss)


(Millions)                                                          March 31,      Dec. 31,
                                                                      2008           2007
Cumulative translation - net                                       $     1,103    $       742
Defined benefit pension and postretirement plans adjustment -           (1,422 )       (1,453 )
net
Debt and equity securities, unrealized gain (loss) - net                    (4 )           (8 )
Cash flow hedging instruments, unrealized gain (loss) - net                (32 )          (28 )
Total accumulated other comprehensive income (loss)                $      (355 )  $      (747 )





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                                                                    Comprehensive Income
                                                                 Three-months ended March
                                                                            31,
(Millions)                                                          2008           2007
Net income                                                       $       988    $     1,368

Cumulative translation                                                   282             65
Tax effect                                                                79              8
Cumulative translation - net of tax                                      361             73

Defined benefit pension and postretirement plans adjustment               49             48
Tax effect                                                               (18 )          (14 )
Defined benefit pension and postretirement plans adjustment -             31             34
net of tax

Debt and equity securities, unrealized gain (loss)                         7              2
Tax effect                                                                (3 )            -
Debt and equity securities, unrealized gain (loss) - net of                4              2
tax

Cash flow hedging instruments, unrealized gain (loss)                     (6 )           24
Tax effect                                                                 2             (9 )
Cash flow hedging instruments, unrealized gain (loss) - net               (4 )           15
of tax
Total - net of tax                                               $     1,380    $     1,492



Reclassification adjustments are made to avoid double counting in comprehensive
income items that are also recorded as part of net income. In the first quarter
of 2008, as disclosed in the net periodic benefit cost table in Note 8, $23
million pre-tax ($15 million after-tax) was reclassified 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 8 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 9) were not material. No income tax provision has
been made for the translation of foreign currency financial statements into U.S.
dollars.



NOTE 6.  Income Taxes



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. The IRS completed its
examination of the Company's U.S. income tax returns for the years 2002 through
2004 during the first quarter of 2008. The IRS's adjustments to the Company's
tax positions were fully reserved. As a result of the additional tax payment
made at the completion of the examination, the Company's unrecognized tax
benefits were reduced by $25 million. In conjunction with the 2002 through 2004
IRS exam, the IRS made adjustments to the Company's 2001 tax year. These IRS
adjustments to the Company's tax positions for the 2001 tax year are fully
reserved. The payment for the 2001 IRS adjustments is expected to occur in the
second quarter of 2008.



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 will change by an
insignificant amount during the next 12 months.



The total amount of unrecognized tax benefits that, if recognized, would affect
the effective tax rate as of December 31, 2007 and March 31, 2008, respectively,
are $334 million and $303 million.



The Company recognizes interest and penalties accrued related to unrecognized
tax benefits in tax expense. At both December 31, 2007 and March 31, 2008,
accrued interest and penalties on a gross basis were $69 million. Included in
these interest and penalty amounts are 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.





                                       11
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NOTE 7.  Marketable Securities



The Company invests in agency securities, asset-backed securities, corporate
notes securities, treasury 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 March 31, 2008.


(Millions)                                     March 31,
                                                  2008
Agency securities                              $      283
Asset-backed securities:
Automobile loans related                              129
Other                                                  10
Asset-backed securities total                         139
Corporate short-term notes securities                  70
Other                                                  75

Current marketable securities                         567

Agency securities                                     192
Asset-backed securities:
Automobile loans related                               74
Credit cards related                                   47
Other                                                  62
Asset-backed securities total                         183
Treasury securities                                   151
Corporate medium-term notes securities                123
Auction rate securities                                11

Non-current marketable securities                     660

Total marketable securities                    $    1,227



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. At March 31, 2008, gross unrealized losses totaled approximately
$17 million, while gross unrealized gains totaled approximately $7 million.
Gross unrealized losses are primarily related to auction rate securities, which
are discussed further below. Gross realized gains and losses on sales or
maturities of marketable securities were not material for the first three months
of 2008 and 2007. 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 $1.227 billion as of
March 31, 2008. Within this portfolio, current and long-term asset-backed
securities (estimated fair value of $322 million) are primarily comprised of
interests in automobile loans and credit cards. At March 31, 2008, the
asset-backed securities credit ratings were AAA or A-1+, except for one security
with a fair value of $14 million that had an A credit rating. 3M's marketable
securities portfolio also includes auction rate securities (estimated fair value
of $11 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 and the first three months of 2008, 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 upon 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 and subsequently written-down to an estimated fair value of $11 million as
of March 31, 2008.





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These write-downs resulted in 'other-than-temporary' impairment charges which
reduced operating income by approximately $8 million in the fourth quarter of
2007 and approximately $1 million in the first quarter of 2008. Temporary
impairments of $10 million (pre-tax) in the fourth quarter of 2007 and $4
million (pre-tax) in the first quarter of 2008 were also recorded as unrealized
losses within other comprehensive income. As of March 31, 2008, these
investments in auction rate securities have been in a loss position for less
than nine months. These auction rate securities are classified as non-current
marketable securities as of March 31, 2008 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 balances at March 31, 2008 for marketable securities 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)                                     March 31,
                                                 2008
Due in one year or less                        $     177
Due after one year through three years               594
Due after three years through five years             304
Due after five years                                 152

Total marketable securities                    $   1,227



NOTE 8.  Pension and Postretirement Benefit Plans



Components of net periodic benefit cost and other supplemental information for
the three months ended March 31 follow:



Benefit Plan Information


                                                  Qualified and Non-qualified                   Postretirement
                                                        Pension Benefits
                                            United States             International                Benefits
(Millions)                                2008         2007         2008         2007         2008         2007
Service cost                            $      48    $      48    $      31    $      30    $      13    $      14
Interest cost                                 149          142           66           55           26           26
Expected return on plan assets               (222 )       (210 )        (80 )        (70 )        (26 )        (26 )
Amortization of transition (asset)              -            -            1            1            -            -
obligation
Amortization of prior service cost              4            3           (1 )         (1 )        (21 )        (18 )
(benefit)
Amortization of net actuarial (gain)           14           32           10           13           16           18
loss
Net periodic benefit cost (benefit)     $      (7 )  $      15    $      27    $      28    $       8    $      14

Settlements, curtailments and                   -            -            -            -            -            -
special termination benefits
Net periodic benefit cost (benefit)     $      (7 )  $      15    $      27    $      28    $       8    $      14
after settlements, curtailments and
special termination benefits



During the first quarter of 2008, the Company made modifications to its U.S.
postretirement benefits plan. The changes are effective beginning January 1,
2009, and allow current retired employees and employees who retire before
January 1, 2013 the option to continue on the existing postretirement plans or
elect the new plans. Current employees who retire after December 31, 2012, will
receive a savings account benefits-based plan. As a result of





                                       13
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the modification to the U.S. postretirement benefits plan, the Company
remeasured its U.S. plans' assets and accumulated postretirement benefit
obligation (APBO) as of March 31, 2008. The impact of the plan modifications
reduced the APBO by $148 million, which was partially offset by asset values
being $97 million lower than on December 31, 2007. Therefore, the accrued
benefit cost liability recorded on the balance sheet as of March 31, 2008, was
reduced by $51 million. The remeasurement did not impact the postretirement
expense for the quarter ended March 31, 2008, but will reduce the expense for
the remainder of the year by $15 million.



For the three months ended March 31, 2008, contributions totaling $48 million
were made to the Company's U.S. and international pension plans and $1 million
to its postretirement plans. In 2008, the Company expects to contribute up 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 pension
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. 3M's annual measurement date for pension and postretirement assets
and liabilities is December 31 each year, which is also the date used for the
related annual measurement assumptions.



NOTE 9.  Derivatives and Other Financial Instruments



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. For a more detailed discussion
of the company's derivative instruments, refer to the company's 2007 Annual
Report on Form 10-K.



The Company enters into foreign exchange forward contracts, options and swaps to
hedge against the effect of exchange rate fluctuations on cash flows denominated
in foreign currencies and certain intercompany financing transactions. These
transactions are designated as cash flow hedges. Based on exchange rates at
March 31, 2008, the Company expects to reclassify to earnings over the next 12
months a majority of the cash flow hedging instruments after-tax loss of $32
million (with the impact offset by cash flows from underlying hedged items).
Amounts recorded in accumulated other comprehensive income (loss) related to
cash flow hedging instruments follow:



Cash Flow Hedging Instruments

Net of Tax


                                                 Three months ended
                                                      March 31
(Millions)                                       2008         2007
Beginning balance                              $     (28 )  $     (18 )

Changes in fair value of derivatives                 (20 )         10
Reclassifications to earnings from equity             16            5
Total activity                                        (4 )         15

Ending balance                                 $     (32 )  $      (3 )



NOTE 10.  Fair Value Measurements



As discussed in Note 1, 3M adopted SFAS No. 157, 'Fair Value Measurements,' (as
impacted by FSP Nos. 157-1 and 157-2) effective January 1, 2008, with respect to
fair value measurements of (a) nonfinancial assets and liabilities that are
recognized or disclosed at fair value in the Company's financial statements on a
recurring basis (at least annually) and (b) all financial assets and
liabilities.



Under SFAS No. 157, fair value is defined as the exit price, or the amount that
would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants as of the measurement date. SFAS No. 157
also establishes a hierarchy for inputs used in measuring fair value that
maximizes the use of observable inputs and minimizes the use of unobservable
inputs by requiring that the most observable inputs be used when available.
Observable inputs are inputs market participants would use in valuing the asset
or liability developed based on market data obtained from sources independent of
the Company. Unobservable inputs are inputs that reflect the Company's
assumptions about the factors market participants would use in valuing the asset
or liability developed based upon the best information available in the
circumstances. The hierarchy is broken down into three levels. Level 1 inputs
are quoted prices (unadjusted) in active markets for identical assets or
liabilities. Level 2 inputs include quoted prices for similar assets or
liabilities in active markets, quoted prices for identical or similar assets or
liabilities in markets that are not active, and inputs (other than quoted
prices) that are observable for the asset or liability, either directly or
indirectly. Level 3 inputs are unobservable inputs for the asset or liability.





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Categorization within the valuation hierarchy is based upon the lowest level of
input that is significant to the fair value measurement.



Assets and Liabilities that are Measured at Fair Value on a Recurring Basis:



At 3M, effective January 1, 2008, fair value under SFAS No. 157 (as impacted by
FSP Nos. 157-1 and 157-2) principally applied to financial asset and liabilities
such as available-for-sale marketable securities, available-for-sale investments
(included as part of investments in the Consolidated Balance Sheet) and certain
derivative instruments. Derivatives include cash flow hedges, interest rate
swaps and most net investment hedges. These items were previously and will
continue to be marked-to-market at each reporting period; however, the
definition of fair value used for these mark-to-markets are now applied using
SFAS No. 157. The information in the following paragraphs and tables primarily
addresses matters relative to these financial assets and liabilities.
Separately, there were no material fair value measurements with respect to
nonfinancial assets or liabilities that are recognized or disclosed at fair
value in the Company's financial statements on a recurring basis subsequent to
the effective date of SFAS No. 157 (as impacted by FSP Nos. 157-1 and 157-2).



3M uses various valuation techniques, which are primarily based upon the market
and income approaches, with respect to financial assets and liabilities.
Following is a description of the valuation methodologies used for the
respective financial assets and liabilities measured at fair value.



Available-for-sale marketable securities - except auction rate securities:



Marketable securities, except auction rate securities, are valued utilizing
multiple sources, as the best individual price and the best source of
information can change from one day to the next. Therefore, a weighted average
price is used for these securities. Market prices are obtained for these
securities from a variety of industry standard data providers, security master
files from large financial institutions, and other third-party sources. These
multiple prices are used as inputs into a distribution-curve-based algorithm to
determine the daily fair value to be used. 3M classifies treasury securities as
level 1, while all other marketable securities (excluding auction rate
securities) are classified as level 2. Marketable securities are discussed
further in Note 7.



Available-for-sale marketable securities - auction rate securities only:



As discussed in Note 7, auction rate securities held by 3M failed to auction
during the second half of 2007 and first three months of 2008. As a result,
investments in auction rate securities are valued utilizing broker-dealer
valuation models and third-party indicative bid levels in markets that are not
active. 3M classifies these securities as level 3.



Available-for-sale investments:



Investments include equity securities that are traded in an active market.
Closing stock prices are readily available from active markets and are used as
being representative of fair value. 3M classifies these securities as level 1.



Certain derivative instruments:



Derivative assets and liabilities within the scope of SFAS No. 133, 'Accounting
for Derivative Instruments and Hedging Activities', are required to be recorded
at fair value. The Company's derivatives that are impacted by SFAS No. 157
include foreign currency forward and option contracts, commodity price swaps,
interest rate swaps, and net investment hedges where the hedging instrument is
recorded at fair value. Net investment hedges that use foreign currency
denominated debt to hedge 3M's net investment are not impacted by SFAS No. 157
as the debt used as the hedging instrument is marked to a value with respect to
changes in spot foreign currency exchange rates and not with respect to other
factors that may impact fair value.



3M has determined that foreign currency forwards and commodity hedges will be
considered level 1 measurements as these are traded in active markets which have
identical asset or liabilities, while currency swaps, foreign exchange options,
interest rate swaps and cross-currency interest rate swaps will be considered
level 2. For level 2 derivatives, 3M uses inputs other than quoted prices that
are observable for the asset. These inputs include foreign currency exchange
rates, volatilities, and interest rates. The level 2 derivative positions are
primarily valued using standard calculations/models that use as their basis
readily observable market parameters. Industry standard data providers are 3M's
primary source for forward and spot rate information for both interest rates and
currency rates, with resulting valuations periodically validated through
third-party or counterparty quotes and a net present value stream of cash flows
model.





                                       15
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The following table provides information by level for assets and liabilities
that are measured at fair value, as defined by SFAS No. 157, on a recurring
basis.


                                               Fair Value              Fair Value Measurements
(Millions)                                         at                 Using Inputs Considered as
Description                                     Mar. 31,       Level 1         Level 2         Level 3
                                                  2008
Assets:
Available-for-sale:
Marketable securities - except auction rate   $      1,216   $        151    $      1,065    $          -
securities
Marketable securities - auction rate                    11              -               -              11
securities only
Investments                                             14             14               -               -
Derivative assets                                      130             88              42               -

Liabilities:
Derivative liabilities                                 172             97              75               -



The following table provides a reconciliation of the beginning and ending
balances of items measured at fair value on a recurring basis in the table above
that used significant unobservable inputs (Level 3).


(Millions)                                              Marketable
                                                       securities -
                                                       auction rate
                                                        securities
                                                           only
Beginning balance (Dec. 31, 2007)                     $           16
Total gains or losses:
Included in earnings                                              (1 )
Included in other comprehensive income                            (4 )
Purchases, issuances, and settlements                              -
Transfers in and/or out of Level 3                                 -
Ending balance (Mar. 31, 2008)                        $           11



In addition, the plan assets of 3M's pension and postretirement benefit plans
are measured at fair value on a recurring basis (at least annually). During the
quarter ended March 31, 2008, the Company remeasured the plan assets of its U.S.
postretirement benefit plan in connection with a change in the benefits provided
by this plan as discussed in Note 8.



Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis:



During the quarter ended March 31, 2008, the Company had no significant
measurements of assets or liabilities at fair value (as defined in SFAS No. 157)
on a nonrecurring basis subsequent to their initial recognition. As indicated in
Note 1, the aspects of SFAS No. 157 for which the effective date for 3M was
deferred under FSP No. 157-2 until January 1, 2009 relate to nonfinancial assets
and liabilities that are measured at fair value, but are recognized or disclosed
at fair value on a nonrecurring basis. This deferral applies to such items as
nonfinancial assets and liabilities initially measured at fair value in a
business combination (but not measured at fair value in subsequent periods) or
nonfinancial long-lived asset groups measured at fair value for an impairment
assessment. During the quarter ended March 31, 2008, such measurements of fair
value impacted by the deferral under FSP No. 157-2 related primarily to the
nonfinancial assets and liabilities with respect to the business combinations in
2008 as discussed in Note 2.





                                       16
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NOTE 11.  Commitments and Contingencies



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, employment litigation 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. Additional information can be found in Note 13 'Commitments and
Contingencies' in the Company's Annual Report on Form 10-K for the year ended
December 31, 2007, including information about the Company's process for
establishing and disclosing accruals and insurance receivables.



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.



Respirator Mask/Asbestos Litigation



As of March 31, 2008, the Company is a named defendant, with multiple
co-defendants, in numerous lawsuits in various courts that purport to represent
approximately 8,790 individual claimants, a slight increase from the
approximately 8,750 individual claimants with actions pending at December 31,
2007.



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.



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.



                                       17
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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. On April 11, 2008, the Court granted the plaintiffs' motion to
certify the case as a class action and defined the class as all persons who were
46 or older when employed by 3M in Minnesota in a salaried exempt position below
a certain salary grade at any time on or after May 10, 2003, and who did not
sign a document on their last day of employment purporting to release claims
arising out of their employment with 3M.  No trial date or calendar of pretrial
proceedings has been set at this time.



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. The parties recently
resolved this matter and it will be dismissed with prejudice in the near future.



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 'Environmental remediation liabilities' in the
table in 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 end its use of
PFOA by 2010.



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. In December 2006, the European Union adopted an amendment
to the



                                       18
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Marketing and Use Directive to limit use of PFOS. Member States were required to
enact the Directive into national law by December 27, 2007 with effective dates
beginning in phases on June 27, 2008.



As previously reported, the Minnesota Department of Health ('MDH') detected low
levels of another perfluoronated 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 exceeded the MDH's interim advisory level for PFBA of 1
part per billion (ppb). In February 2008, the MDH established a health-based
value (HBV) for PFBA of 7 (ppb) based on a clearer understanding of PFBA through
the results of three major studies and sampling more than 1,000 private wells.
An HBV is the amount of a chemical in drinking water considered by the MDH staff
to be safe for people to drink for a lifetime. As a result of this new HBV for
PFBA, well advisories will no longer be required for certain wells in the
Minnesota communities of Lake Elmo, Oakdale and Cottage Grove.  Residents in the
affected communities where the levels of PFBA in private wells exceed the HBV
either have been provided water treatment systems or connected to a city water
system.



The Company continues to work with the Minnesota Pollution Control Agency (MPCA)
pursuant to the terms of the previously disclosed May 2007 Settlement Agreement
and Consent Order to address the presence of perfluoronated 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's principal obligations include (i) evaluation of
releases of perfluoronated compounds from these sites and propose response
actions; (ii) providing alternative drinking water if and when an HBV or Health
Risk Limit ('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) is exceeded for any
perfluoronated compounds as a result of contamination from these sites; (iii)
remediation of any source of PFBA and provide alternative drinking water if and
when levels are found above an HBV or HRL; and (iv) sharing information with the
MPCA about perfluoronated compounds. Please refer to the 'Other environmental
liabilities' in the table in the following section, 'Accrued Liabilities and
Insurance Receivables Related to Legal Proceedings' for more information on this
subject.



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 and agreed to settle the matter in principle for
$30,000.



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,



                                       19
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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.



Accrued Liabilities and Insurance Receivables Related to Legal Proceedings



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:



LIABILITY AND RECEIVABLE BALANCES
                                                   Mar. 31        Dec. 31
(Millions)                                          2008           2007

Breast implant liabilities                       $         -    $         1
Breast implant insurance receivables                      13             64

Respirator mask/asbestos liabilities                     113            121
Respirator mask/asbestos insurance                       318            332
receivables

Environmental remediation liabilities                     35             37
Environmental remediation insurance                       15             15
receivables

Other environmental liabilities                  $       149    $       147



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
environmental remediation represent the Company's best estimate of the
liability. 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.



The Company received $51 million in the first quarter of 2008 (of which $48
million was previously reported) and expects to receive an additional $10
million by the end of 2008 pursuant to settlement agreements with several
insurers of the breast implant matter. The Company continues to pursue recovery
against its remaining insurers and expects to collect the remaining breast
implant receivable.



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. - both part of the Continental Casualty Group) disclaiming
coverage for respirator mask/asbestos claims. These insurers represent
approximately $14 million of the $318 million insurance recovery receivable
referenced in the above table. 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 heard oral argument of
the insurers' appeal of that decision in March 2008 and the parties are awaiting
the ruling of the Court.



As a result of settlements reached with a number of direct insurers of 3M and
one reinsurer, the Company was paid $14 million in the first quarter and the
Company expects to receive another $57 million in payments over the next four
quarters in connection with the respirator mask/asbestos receivable.



                                       20
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NOTE 12. Management Stock Ownership Program (MSOP) and General Employees' Stock
Purchase Plan (GESPP)



Effective with the May 2005 MSOP annual grant, the Company changed its vesting
period from one to three years with the expiration date remaining at 10 years
from date of grant. Beginning in 2007, the Company reduced the number of
traditional stock options granted under the MSOP 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. However, associated with the reduction in the number of eligible
employees, the Company provided a one-time 'buyout' grant of restricted stock
units to the impacted employees. Due to the vesting period change for annual
grants effective in May 2005, the first quarter of 2008 includes expense from
three grant years (2007, 2006 and 2005), while the first quarter of 2007 only
includes expense from two grant years (2006 and 2005), The income tax benefits
shown in the following table 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 in 2002. Amounts recognized
in the financial statements with respect to both the MSOP and GESPP (refer to
Note 15 in 3M's 2007 10-K) are as follows:


                                                 Three months ended
                                                      March 31
(Millions, except per share amounts)           2008             2007
Cost of sales                              $           9    $           8
Selling, general and administrative                   26               19
expenses
Research, development and related                      8                6
expenses

Operating income (loss)                    $         (43 )  $         (33 )

Income tax benefits                        $          17    $          13

Net income (loss)                          $         (26 )  $         (20 )

Earnings per share impact- diluted         $       (0.04 )  $       (0.03 )



The following table summarizes MSOP stock option activity during the three
months ended March 31, 2008:




                                                                    Remaining          Aggregate
                                Number of          Exercise        Contractual      Intrinsic Value
Stock Options                    Options            Price*        Life* (months)      (millions)
Under option -
January 1                         74,613,051    $        70.50
Granted
Annual                                     -                 -
Progressive (Reload)                  69,179             80.33
Other                                    716             78.49
Exercised                           (909,308 )           51.23
Canceled                            (139,469 )           83.59
March 31                          73,634,169    $        70.73                63    $           801
Options exercisable
March 31                          58,050,540    $        67.16                54    $           792


--------------------

*Weighted average



As of March 31, 2008, there was $97 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 1.5 years. The total intrinsic values of stock options
exercised during the three-month periods ended March 31, 2008 and 2007, was $25
million and $38 million, respectively. Cash received from options exercised was
$45 million and $72 million for the three months ended March 31, 2008 and 2007,
respectively. The Company's actual tax benefits realized for the tax deductions
related to the exercise of employee stock options were $7 million and $11
million for the three months ended March 31, 2008 and 2007, respectively.
Capitalized stock-based compensation amounts were not material at March 31,
2008.



As previously mentioned, the Company expanded its utilization of restricted
stock units in conjunction with the May 2007 MSOP Annual Grant. The May 2007
restricted stock unit grant does not accrue dividends during the vesting period
and vests over three years. The one-time 'buyout' restricted stock unit grant
vests over five years.



                                       21
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The following table summarizes MSOP restricted stock and restricted stock unit
activity during the three months ended March 31, 2008:



Restricted Stock and Restricted Stock Units
                                     Number of Awards     Grant Date Fair
                                                              Value*
Nonvested balance -
As of January 1                              2,001,581   $           77.63
Granted
Annual                                               -                   -
Other                                          109,748               78.33
Vested                                          (4,000 )             82.71
Forfeited                                      (14,942 )             56.38
As of March 31                               2,092,387   $           77.81


--------------------

*Weighted average



As of March 31, 2008, there was $93 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 3.1 years. The total fair value of
restricted stock and restricted stock units that vested during the three-month
periods ended March 31, 2008 and 2007 was not material.



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 4,138,711 as of March 31, 2008. Restricted stock and restricted stock units,
per the 2005 Plan, shall be counted against the total shares available as 2.45
shares for every one share issued in connection with that award.



NOTE 13. Business Segments



Effective in the first quarter of 2008, 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 Display and Graphics segment created the Projection
Systems Department by combining Visual Systems, 3M Precision Optics Inc. and the
Company's mobile display technology. The new department will focus on bringing
3M technology to the projection market, providing customers with a centralized
resource dedicated to developing differentiated solutions. Visual Systems
(previously in the Electro and Communications segment) serves the world's office
and education markets with overhead projectors and transparency films, as well
as equipment and materials for electronic and multimedia presentations. 3M
Precision Optics Inc. and the Company's mobile display technology were
previously part of the Optical Systems Division within the Display and Graphics
segment.

•                  3M's Touch Systems business (previously in the Display and
Graphics segment), which includes touch screens and touch monitors, was
transferred to the Electro and Communications segment. Touch Systems brings
synergistic technologies and strong alignment with 3M's electronics' divisions
and markets.

•                  Certain adhesives and tapes in the Industrial Adhesives and
Tapes business (Industrial and Transportation segment) were transferred to the
Consumer and Office segment, primarily related to the Stationery Products
business and Construction and Home Improvement business.



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; Health Care; Display and Graphics; Consumer and Office; Safety,
Security and Protection Services; and Electro and Communications. 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. 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 information shown.



                                       22
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The financial information presented herein reflects the impact of all of the
preceding segment structure changes for all periods presented.



Business Segment Information
                                                 Three months ended
                                                      March 31
(Millions)                                     2008             2007

NET SALES

Industrial and Transportation              $       2,087    $       1,783
Health Care                                        1,077              962
Display and Graphics                                 871              926
Consumer and Office                                  838              817
Safety, Security and Protection                      859              758
Services
Electro and Communications                           725              664
Corporate and Unallocated                              6               27
Total Company                              $       6,463    $       5,937

OPERATING INCOME

Industrial and Transportation              $         472    $         410
Health Care                                          321            1,062
Display and Graphics                                 187              296
Consumer and Office                                  166              178
Safety, Security and Protection                      204              181
Services
Electro and Communications                           146              110
Corporate and Unallocated                              5             (136 )
Total Company                              $       1,501    $       2,101



The following items impacted operating income results for the three months ended
March 31, 2007. 3M completed the sale of its global branded pharmaceuticals
business in Europe, which resulted in a pre-tax gain on sale of $786 million
(reflected in the Health Care segment). The Health Care segment also included a
net pre-tax gain of $7 million, which primarily related to adjustments to
restructuring costs that were recorded in the fourth quarter of 2006. The
Electro and Communications segment included a pre-tax restructuring charge of
$19 million, primarily related to asset impairment charges. The Company
increased in accrued environmental liabilities by $121 million to address
remediation activities associated with perfluoronated compounds (reflected in
Corporate and Unallocated). In summary, these items on a combined basis
benefited operating income for the three months ended March 31, 2007 by $653
million.



Corporate and unallocated operating income includes a variety of miscellaneous
items, such as corporate investment gains and losses, certain derivative gains
and losses, insurance-related gains and losses, certain litigation and
environmental expenses, corporate restructuring charges and certain under- or
over-absorbed costs that the company may choose not to allocate directly to its
business segments. Because this category includes a variety of miscellaneous
items, it is subject to fluctuation on a quarterly and annual basis.



NOTE 14.  Review Report of Independent Registered Public Accounting Firm



PricewaterhouseCoopers LLP, the Company's independent registered public
accounting firm, has performed reviews of the unaudited interim consolidated
financial statements included herein, and their review report thereon
accompanies this filing.  Pursuant to Rule 436(c) of the Securities Act of 1933
('Act') their report on these reviews should not be considered a 'report' within
the meaning of Sections 7 and 11 of the Act and the independent registered
public accounting firm liability under Section 11 does not extend to it.



                                       23
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            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Stockholders and Board of Directors of 3M Company:



We have reviewed the accompanying consolidated balance sheet of 3M Company and
its subsidiaries as of March 31, 2008 and the related consolidated statements of
income and of cash flows for the three-month periods ended March 31, 2008 and
2007.  These interim financial statements are the responsibility of the
Company's management.



We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters.  It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole.  Accordingly, we do not express such an opinion.



Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated interim financial statements for them
to be in conformity with accounting principles generally accepted in the United
States of America.



We previously audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheet as of
December 31, 2007, and the related consolidated statements of income, of changes
in stockholders' equity and comprehensive income, and of cash flows for the year
then ended (not presented herein), and in our report dated February 11, 2008, we
expressed an unqualified opinion on those consolidated financial statements.  In
our opinion, the information set forth in the accompanying consolidated balance
sheet information as of December 31, 2007, is fairly stated in all material
respects in relation to the consolidated balance sheet from which it has been
derived.



/s/ PricewaterhouseCoopers LLP



PricewaterhouseCoopers LLP

Minneapolis, Minnesota

May 1, 2008



                                       24
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Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.



Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) is designed to provide a reader of 3M's financial statements
with a narrative from the perspective of management. 3M's MD&A is presented in
five sections:



•                  Overview

•                  Results of Operations

•                  Performance by Business Segment

•                  Financial Condition and Liquidity

•                  Forward-Looking Statements



OVERVIEW



3M is a diversified global manufacturer, technology innovator and marketer of a
wide variety of products and services. 3M manages its operations in six
operating business segments: Industrial and Transportation, Health Care, Display
and Graphics, Consumer and Office, Safety, Security and Protection Services, and
Electro and Communications.



As discussed in Note 13 to the Consolidated Financial Statements, effective in
the first quarter of 2008, 3M made certain changes to its business segments. The
financial information presented herein reflects the impact of these business
segment changes for all periods presented.



3M reported net sales of $6.463 billion and net income of $988 million, or $1.38
per diluted share, for the three months ended March 31, 2008. Sales increased
8.9 percent, helped by foreign currency translation of 6.1 percentage points.
Operating income margins were maintained at about 20 percent or more in all six
business segments, resulting in a total 3M operating income margin of 23.2
percent. 3M continues to invest in research and development, additional sales
presence, a more efficient supply chain and in acquisitions, as evidenced by the
April 1, 2008 acquisition of Aearo Holding Corp. (hereafter referred to as
Aearo), the parent company of Aearo Technologies, Inc., a global leader in the
personal protection industry.



3M completed the sale of its global branded pharmaceuticals business in Europe
in January 2007. As a result, 3M recorded a gain on sale, which was partially
offset by restructuring expenses and increases in environmental liabilities.
These items on a combined basis benefited 2007 net income by $422 million, or
$0.57 per diluted share. Including these 2007 items, 3M reported net sales of
$5.937 billion and net income of $1.368 billion, or $1.85 per diluted share, for
the three months ended March 31, 2007. Refer to 'Note A' at the end of this
overview section for more detail on these 2007 items.



3M's product and geographical diversification enabled the Company to post good
first-quarter 2008 results, despite the weak U.S. economy and challenges in the
Optical Systems business within the Display and Graphics business segment. The
first-quarter of 2008 was impacted by four principal factors:

•                  Strong sales and operating income performance in four of its
six business segments (Industrial and Transportation; Safety, Security and
Protection Services; Health Care without pharmaceuticals; and Electro and
Communications)

•                  Slowing U.S. sales growth, as evidenced by weakness in 3M's
Consumer and Office segment

•                  Strong international performance, with international
representing approximately 66% of 3M's worldwide sales in the first quarter of
2008 (China, Russia, India, the Middle East and Eastern Europe, in addition to
Latin America, all experienced sales growth of more than 15%)

•                  Continued slowing of, and margin compression in, the Optical
Systems business, which primarily impacted sales and operating income
performance in the Asia Pacific area



                                       25
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The following table summarizes sales and operating income results by business
segment.


                                                  Three months ended March 31
                                               2008                         2007                     % change
                                        Net           Oper.          Net           Oper.         Net         Oper.
(Millions)                             Sales         Income         Sales         Income        Sales        Income

Industrial and Transportation       $     2,087    $       472   $     1,783    $       410         17.1 %       15.2 %
Health Care                               1,077            321           962          1,062         12.0 %        N/A
Display and Graphics                        871            187           926            296         (5.9 )      (36.7 )
                                                                                                         %            %
Consumer and Office                         838            166           817            178          2.6 %       (7.0 )
                                                                                                                      %
Safety, Security and Protection             859            204           758            181         13.4 %       12.4 %
Services
Electro and Communications                  725            146           664            110          9.2 %       33.6 %
Corporate and Unallocated                     6              5            27           (136 )
Total Company                       $     6,463    $     1,501   $     5,937    $     2,101          8.9 %      (28.6 )
                                                                                                                      %



Worldwide total sales growth was 8.9%. Local-currency sales growth (which
includes volume, selling price and acquisition impacts) was 3.0% for the first
quarter of 2008, including 1.7 percentage points from acquisitions.
Local-currency sales increased 9.6% in Industrial and Transportation (including
4.0 percentage points from acquisitions), 6.4% in Safety, Security and
Protection Services (including 1.9 percentage points from acquisitions), 5.9% in
Health Care (including 0.8 percentage points from acquisitions) and 3.3% in
Electro and Communications (including one percentage point from acquisitions).
Local-currency sales declined 2.5% in Consumer and Office and 9.1% in Display
and Graphics (excluding a 0.7 percentage point penalty from the Opticom/Canoga
business divestiture in 2007).



Worldwide sales growth was led by Industrial and Transportation, with strong
sales growth in virtually all businesses and major geographic areas. Security
and Protection Services sales growth was led by respiratory protection, cleaning
and window film solutions for commercial buildings and corrosion protection
products, with geographic area sales growth led by Europe, Asia Pacific and
Latin America. Health Care sales growth was strongest in medical, dental and
orthodontics, with positive sales growth in all major geographies. Electro and
Communications sales growth was led by electrical markets and electronic markets
materials, with positive sales growth in all major geographies, despite declines
in the flexible circuits business where a number of product solutions are going
end-of-life. Sales in Consumer and Office were impacted by the weakness in U.S.
office mass retail channels, but did experience sales growth in Europe, Asia
Pacific and Latin America. The U.S. consumer and office retail markets are
expected to remain slow in the second quarter of 2008, with this weakness likely
to persist throughout the balance of 2008. Within Display and Graphics, positive
sales growth in Traffic Safety Systems and Commercial Graphics was more than
offset by lower sales in Optical Systems, which were down 16 percent
year-on-year. As a result, sales for Display and Graphics were down 5.9 percent
in the first quarter of 2008. The challenges in Optical Systems are likely to
extend throughout 2008 as price pressure remains intense in segments of the LCD
market and OEMs aggressively pursue cost reductions from their component
suppliers, including 3M. Refer to the Performance by Business Segment section
for a more detailed discussion of the results of the respective segments.



Geographically, Latin America and Canada led local-currency sales growth
(including acquisitions) in the first quarter of 2008, with a combined increase
of 12.8%, followed by Europe with a 3.1% increase, the United States with a 2.0%
increase and Asia Pacific with a 0.8% increase. Sales in Asia Pacific were
negatively impacted by Optical Systems, which were down 18% in that region.
Excluding Optical Systems, Asia Pacific sales increased 8% on a local-currency
basis. Of the local-currency sales growth, acquisitions contributed 1.2% to the
combined Latin America and Canada, 1.4% to Europe, 3.1% to the United States and
0.3% to Asia Pacific. Foreign currency translation positively impacted
international sales by 9.7%, as the U.S. dollar weakened in aggregate against
many currencies in these geographic areas. Foreign currency translation
positively impacted Latin America and Canada by 13.1%, Europe by 11.9% and Asia
Pacific by 6.6%.



Operating income margins for the three months ended March 31, 2008 were 23.2%,
compared to 35.4% in the first quarter of 2007. Operating income margins for the
first quarter of 2007 were impacted by the gain on sale, net of restructuring
expenses and increases in environmental liabilities, which on a combined basis
contributed 11.0 percentage points of the 35.4% operating income margin. 3M
generated $997 million of operating cash flows for the three months ended March
31, 2008, an increase of $417 million compared to the three months ended March
31, 2007. Refer to the section entitled 'Cash Flows from Operating Activities'
later in the MD&A for a discussion of items impacting cash flows.



                                       26
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For the three months ended March 31, 2008, the Company utilized $863 million of
cash to repurchase 3M common stock and pay dividends. In February 2007, 3M's
Board of Directors authorized a two-year share repurchase of up to $7.0 billion
for the period from February 12, 2007 to February 28, 2009. As of March 31,
2008, approximately $3.7 billion remained available for repurchase. In February
2008, 3M's Board also authorized a dividend increase of 4.2% for 2008, marking
the 50th consecutive year of dividend increases for 3M. 3M's debt to total
capital ratio (total capital defined as debt plus equity) as of March 31, 2008
was 33 percent. 3M has an AA credit rating, with a stable outlook, from Standard
 & Poor's and an Aa1 credit rating, with a negative outlook, from Moody's
Investors Service. The Company has sufficient access to capital markets to meet
currently anticipated growth and acquisition investment funding needs.



(Note A). In the first quarter of 2007, the gain on sale, net of restructuring
expenses and increases in environmental liabilities, increased operating income
by $653 million and net income by $422 million, or $0.57 per diluted share. This
included net benefits from gains related to the sale of 3M's branded
pharmaceuticals business in Europe ($786 million pre-tax, $506 million
after-tax), which were partially offset by restructuring actions ($12 million
pre-tax, $9 million after-tax) and increases in environmental liabilities ($121
million pre-tax, $75 million after-tax).



RESULTS OF OPERATIONS

Percent change information compares first three months of 2008 with the same
period last year, unless otherwise indicated.



Net Sales:


                                              Three months ended
                                                March 31, 2008
                                       U.S.         Intl.       Worldwide
Net sales (millions)                $    2,226    $    4,237    $    6,463
% of worldwide sales                      34.4 %        65.6 %
Components of net sales change:
Volume - organic                          (2.8 )%        3.9 %         1.6 %
Volume - acquisitions                      3.1           0.9           1.7
Price                                      1.7          (1.4 )        (0.3 )
Local-currency sales (including            2.0           3.4           3.0
acquisitions)
Divestitures                              (0.4 )           -          (0.2 )
Translation                                  -           9.7           6.1
Total sales change                         1.6 %        13.1 %         8.9 %



In the first quarter of 2008, worldwide sales grew 8.9% in U.S. dollar terms,
with international up 13.1% and the U.S. up 1.6%. Worldwide, local-currency
sales growth was 3.0%, comprised of organic local-currency volume  growth of
1.6%, acquisitions growth of 1.7% and selling price declines of 0.3%. Selling
prices were negatively impacted by 1.1 percentage points due to price reductions
in the Optical Systems business during the quarter. Foreign currency translation
added 6.1% to first-quarter 2008 sales. Worldwide, local currency sales growth
was led by the Industrial and Transportation, Safety, Security and Protection
Services, Health Care, and Electro and Communications.



In the United States, local-currency sales improved 2.0% when compared to last
year's first-quarter. Due to the slow economic conditions, organic volumes
declined 2.8%, while acquisitions added 3.1% and selling price increases added
1.7%. On the positive side, 3M experienced strong sales growth of 13% in
Industrial and Transportation, 7% in Electro and Communications and 3% in Health
Care. This sales growth was partially offset by sales declines of 9% in Consumer
and Office, 5% in Display and Graphics and 4% in Safety, Security and Protection
Services.



International sales were up 13.1% in U.S. dollar terms. Local-currency sales
were up 3.4%, with organic sales volume up 3.9% as five of six business segments
posted positive local-currency growth. Selling prices declined 1.4%, driven by a
13% decline in Optical Systems selling prices, while acquisitions added 0.9% of
additional growth. Regionally, local-currency growth was led by combined Latin
America and Canada at 13% and Europe at 3%. The Asia-Pacific region delivered
0.8% local-currency growth, which was negatively impacted by an 18% decline in
the Optical Systems business. Foreign currency translation increased
first-quarter sales by 9.7%. Refer to the 'Performance by Business Segment'
section for additional discussion of sales change by segment and the preceding '
Overview' section for discussion of sales growth by geographic area.



                                       27
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Operating Expenses:


                                                    Three months ended
                                                         March 31
(Percent of net sales)                       2008          2007         Change
Cost of sales                                   51.7 %        50.8 %         0.9 %
Selling, general and administrative             19.7          21.6          (1.9 )
expenses
Research, development and related                5.4           5.4             -
expenses
Gain on sale of businesses                         -         (13.2 )        13.2
Operating income                                23.2 %        35.4 %       (12.2 )%



Cost of sales as a percent of net sales increased 0.9 percentage points in the
first quarter compared to the same period in 2007, with this increase entirely
attributable to the impact of Optical Systems. The remainder of 3M's broad-based
portfolio performed as expected, with impacts from selling price increases
helping to offset higher year-on-year raw material costs.



Selling, general and administrative (SG&A) expenses as a percent of net sales
decreased 1.9 percentage points when compared to the same period in 2007. In the
first quarter of 2007, the $121 million increase in environmental liabilities
and $7 million in SG&A restructuring expenses increased SG&A by 2.2 percentage
points on a combined basis (discussed in Note A at the end of the preceding
overview section).



Research, development and related expenses as a percent of net sales remained
flat when compared to the same period in 2007.



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 $786 million
in the first quarter of 2007 (recorded in the Health Care segment).



Operating Income:

3M uses operating income as one of its primary business segment performance
measurement tools. Operating income margins were 23.2% in the first three months
of 2008, a decrease from 35.4% for the first three months of 2007. Operating
income margins for the first quarter of 2007 were positively impacted by the
gain on sale, net of restructuring expenses and increases in environmental
liabilities, which contributed 11.0 percentage points of the 35.4% operating
income margin.



Interest Expense and Income:


                         Three months ended
                              March 31
(Millions)              2008           2007
Interest expense     $        55    $        38
Interest income              (30 )          (28 )
Total                $        25    $        10



Interest expense increased for the first quarter of 2008 when compared to the
same period in 2007, primarily related to higher debt balances and higher
long-term debt interest rates in the U.S. Interest income was higher in the
first quarter of 2008, predominately due to higher average cash, cash equivalent
and marketable securities balances.



                                       28
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Provision for Income Taxes:


                                Three months ended
                                     March 31
(Percent of pre-tax            2008            2007
income)
 Effective tax rate                31.8 %          33.8 %



The tax rate for the first quarter of 2008 was 31.8%, compared to 33.8% in the
first quarter of 2007, with approximately 1.4 percentage points of this decrease
due to lower international tax rates and adjustments to income tax reserves. The
2007 tax rate was higher by 0.6 percentage points due to the combined impact of
the sale of the branded pharmaceuticals businesses, restructuring expenses and
increases in environmental liabilities. Refer to Note 6 for further discussion
of income taxes.



Minority Interest:


                        Three months ended
                             March 31
(Millions)             2008            2007
Minority           $         18    $         15
Interest



Minority interest expense eliminates the income or loss attributable to non-3M
ownership interests in 3M consolidated entities. 3M's most significant
consolidated entity with non-3M ownership interests is Sumitomo 3M Limited (3M
owns 75% of Sumitomo 3M Limited). The increase for the first three months of
2008 primarily related to Sumitomo 3M Limited.



Currency Effects:

3M estimates that year-on-year currency effects, including hedging impacts,
increased net income by approximately $50 million for the three months ended
March 31, 2008. 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 risks. However, this estimate does not
reflect the higher commodity prices 3M is currently experiencing related to
dollar-denominated commodities, which would mute this impact somewhat. 3M
estimates that year-on-year derivative and other transaction gains and losses
decreased net income by approximately $15 million for the three months ended
March 31, 2008.



New Accounting Pronouncements:

Information regarding new accounting pronouncements is included in Note 1 to the
Consolidated Financial Statements.



PERFORMANCE BY BUSINESS SEGMENT

As discussed in Note 13 to the Consolidated Financial Statements, effective in
the first quarter of 2008, 3M made certain changes to its business segments.
Segment information for all periods presented has been reclassified to reflect
the new segment structure.



Information related to 3M's business segments for the first quarter of both 2008
and 2007 is presented in the tables that follow. Local-currency sales (which
includes both organic and acquisition volume impacts plus price impacts) are
provided for each segment. The divestiture impact, if any, translation impact
and total sales change are also provided for each segment.



                                       29
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Industrial and Transportation Business:


                                               Three months ended
                                                    March 31
                                            2008                2007
Sales (millions)                      $          2,087    $          1,783
Sales change analysis:
Local currency (volume and price)                  9.6 %               4.0 %
Translation                                        7.5                 2.7
Total sales change                                17.1 %               6.7 %

Operating income (millions)           $            472    $            410
Percent change                                    15.2 %               8.2 %
Percent of sales                                  22.6 %              23.0 %



The Industrial and Transportation segment serves a broad range of markets, such
as appliance, paper and packaging, food and beverage, and automotive. Industrial
and Transportation products include tapes, a wide variety of coated and
non-woven abrasives, adhesives, specialty materials, filtration products,
closures for disposable diapers, and components and products that are used in
the manufacture, repair and maintenance of automotive, marine, aircraft and
specialty vehicles.



First-quarter sales in Industrial and Transportation grew 17.1 percent to $2.1
billion, with strong sales growth in virtually all businesses and major
geographic areas. In local-currency terms, sales increased 9.6 percent,
including a 4 percentage point benefit from acquisitions. Efforts to
reinvigorate 3M's core is evident as all of this segments largest core
industrial businesses - including abrasives, industrial adhesives and tapes,
automotive aftermarket and automotive OEM - each drove solid sales growth in the
quarter, along with personal care products, aerospace and the oil and gas market
initiative. In the Automotive Aftermarket division, which supplies
technology-based solutions to autobody repair shops around the world, growth was
driven largely by abrasives, masking and refinishing products. First-quarter
operating income in Industrial and Transportation was $472 million, up 15.2
percent, with operating margins of 22.6 percent.



Throughout 2007, 3M increased its investment in this business to strengthen its
portfolio of core technologies. Through increased R&D and a number of bolt-on
and complimentary acquisitions, 3M has begun to transform its tapes, abrasives
and adhesives businesses into a legitimate growth engine for the company. 3M is
extending the core by expanding into fast-growing adjacencies such as
professional abrasive power tools and solar energy solutions. 3M has gone a long
way to reinvent its abrasives division in the past year, driven by special
application products for dozens of industries including marine, aerospace, wood
and metalworking and automotive OEM.  3M is driving added market penetration in
emerging economies as 3M's industrial business continues to make significant
investments in China, India, Poland and Brazil.



Health Care Business:


                                               Three months ended
                                                    March 31
                                            2008                2007
Sales (millions)                      $          1,077    $            962
Sales change analysis:
Local currency (volume and price)                  5.9 %              20.4 %
Divestitures                                      (0.1 )             (24.9 )
Translation                                        6.2                 4.0
Total sales change                                12.0 %              (0.5 )%

Operating income (millions)           $            321    $          1,062
Percent change                                     N/A                 N/A
Percent of sales                                  29.8 %               N/A



                                       30
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The Health Care segment serves markets that include medical clinics and
hospitals, pharmaceuticals, dental and orthodontic practitioners, and health
information systems. Products and services provided to these and other markets
include medical and surgical supplies, skin health and infection prevention
products, drug delivery systems, dental and orthodontic products, health
information systems and microbiology solutions. The global branded
pharmaceuticals business was sold in December 2006 and January 2007.



Local-currency growth increased 5.9 percent in the first quarter of 2008, with
acquisitions contributing 0.8 percentage points of this growth. Health Care
sales growth was strongest in medical, dental and orthodontics, with positive
sales growth in all major geographies. Recently, 3M extended its core offering
in the medical business by introducing a transparent antimicrobial dressing to
cover and protect patient catheter sites. 3M is also leveraging the 3M Tegaderm
TM brand in order to highlight its value in the eyes of health care
practitioners around the world. 3M continues to invest in its core Health Care
businesses, while pursuing strategic, synergistic acquisitions, as evidenced by
the completion of more than 10 acquisitions in the past two years.



In total, the combination of the following items positively impacted
first-quarter 2007 Health Care operating income by $793 million. In January 2007
the Company sold its branded pharmaceuticals business in the Europe region. The
operating income gain related to this sale, which is included in Health Care,
totaled $786 million. In addition, a net pre-tax gain of $7 million was
recorded, which primarily related to adjustments to restructuring costs incurred
in the fourth quarter of 2006.



3M believes the disaggregated information that follows for 3M Health Care's
remaining businesses (without pharmaceuticals) and for pharmaceuticals on a
stand-alone basis provides useful information.



Health Care Business without Pharmaceuticals:


                                               Three months ended
                                                    March 31
                                            2008                2007
Sales (millions)                      $          1,077    $            962
Sales change analysis:
Local currency (volume and price)                  5.9 %              20.4 %
Divestitures                                      (0.1 )                 -
Translation                                        6.2                 4.0
Total sales change                                12.0 %              24.4 %

Operating income (millions)           $            321    $            264
Percent change                                    21.7 %              10.8 %
Percent of sales                                  29.8 %              27.4 %



The following discussion provides information on 3M Health Care's remaining
businesses (without pharmaceuticals). Refer to the preceding section entitled '
Health Care Business' for a discussion of sales change. First quarter operating
income in Health Care (without pharmaceuticals) increased 21.7 percent to $321
million with margins of 29.8 percent. Operating income in the first quarter of
2007 included $5 million in restructuring expenses, primarily severance and
related benefits.



Pharmaceuticals Business:


                                               Three months ended
                                                    March 31
                                            2008                 2007
Operating income (millions)           $              -     $            798



In total, the combination of the following items positively impacted
first-quarter 2007 pharmaceuticals operating income by $798 million. In early
January 2007 the Company sold its branded pharmaceuticals business in Europe.
The operating income gain related to this sale, which is included in
pharmaceuticals, totaled $786 million. In addition, a net pre-tax restructuring
gain of $12 million was recorded, which primarily related to adjustments to
restructuring costs incurred in the fourth quarter of 2006.



                                       31
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Display and Graphics Business:


                                           Three months ended
                                                March 31
                                         2008             2007
Sales (millions)                     $         871    $         926
Sales change analysis:
Local currency (volume and price)             (9.1 )%           0.1 %
Divestitures                                  (0.7 )              -
Translation                                    3.9              1.1
Total sales change                            (5.9 )%           1.2 %

Operating income (millions)          $         187    $         296
Percent change                               (36.7 )%           0.5 %
Percent of sales                              21.5 %           32.0 %



The Display and Graphics segment serves markets that include electronic display,
traffic safety and commercial graphics. This segment includes optical film
solutions for electronic displays; computer screen filters; reflective sheeting
for transportation safety; commercial graphics systems; and projection systems,
including mobile display technology and visual systems products. The optical
film business provides films that serve numerous market segments of the
electronic display industry. 3M provides distinct products for five market
segments, including products for: 1) LCD computer monitors 2) LCD televisions 3)
handheld devices such as cellular phones 4) notebook PCs and 5) automotive
displays.



As a business, Display and Graphics faced a traditional seasonal slowdown in its
Traffic Safety Systems business as highway construction slows in the colder
climates during the first quarter, and some softness in end-user rebranding
aspects of its Commercial Graphics business, which is not unusual when the
economy slows. Additionally, the LCD market continues to be highly competitive
and 3M's Optical Systems business faced both cost-down pricing pressure and
increased attachment rate pressure in the first quarter. Positive sales growth
in Traffic and Safety Systems and Commercial Graphics was more than offset by
lower-than-expected results for Optical Systems. Optical Systems sales decreased
16 percent year-on-year, while operating income decreased 50 percent. As a
result, sales for Display and Graphics were down 5.9 percent in the first
quarter of 2008. Operating profit margins for the business were down
year-over-year from 32.0 percent to 21.5 percent.



3M will continue its cost-down strategy in response to changes in the LCD market
while continuing to innovate and respond to rapidly changing customer needs with
fresh display products and technologies, including film solutions that increase
energy efficiency of the displays. 3M is actively addressing its cost structure
to offset top-line performance. The challenges in Optical Systems are likely to
extend throughout 2008 as segments of the LCD market continue to transition to
commodity products. Elsewhere in Display and Graphics, 3M continues to see
demand for its on premise graphics, services, and fleet graphics in Commercial
Graphics. In projection systems, 3M introduced super-close projection products
and are scaling up production of 3M's Mobile Projection Technology, an
ultra-compact, LED illuminated projection engine designed for personal
electronic devices.



                                       32
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Consumer and Office Business:


                                               Three months ended
                                                    March 31
                                              2008            2007
Sales (millions)                            $     838       $     817
Sales change analysis:
Local currency (volume and price)                (2.5 )%          8.2 %
Translation                                       5.1             1.7
Total sales change                                2.6 %           9.9 %

Operating income (millions)                 $     166       $     178
Percent change                                   (7.0 )%         17.9 %
Percent of sales                                 19.8 %          21.8 %



The Consumer and Office segment serves markets that include consumer retail,
office retail, home improvement, building maintenance and other markets.
Products in this segment include office supply products, stationery products,
construction and home improvement products, home care products, protective
material products and consumer health care products.



Year-on-year growth in this business was 2.6 percent, with sales in
local-currencies down 2.5 percent for the quarter.  Consumer and Office feels
the effects of a U.S. economic slowdown more quickly and directly than other 3M
businesses - as effects began in the second half of 2007 - and first quarter
2008 business conditions were even more challenging, driven by slower U.S.
same-store sales and further inventory drawdowns from 3M's large U.S. retail
customers. On the positive side, the home care products business - home to
leading brands such as Scotch-Brite(R) sponges and scrubbers  - increased sales
more than 10 percent in the quarter, due in equal parts to volume and currency.
In geographic terms, 3M experienced sales growth in Asia Pacific, Europe and
Latin America, while in the U.S. - where 3M derives over 50 percent of its
Consumer and Office revenues - sales declined year-on-year by 9%. Operating
income was $166 million, down 7 percent, but profit margins remained at near 20
percent levels.



Going forward, 3M expects sales growth in the Consumer and Office segment to
continue to be led by international operations as U.S. growth will remain
uncertain over the near term due to challenging economic conditions. The U.S.
consumer and office mass retail market is expected to continue to be weak in the
second quarter of 2008, with this weakness likely to persist throughout the
balance of 2008.



Safety, Security and Protection Services Business:


                                               Three months ended
                                                    March 31
                                              2008            2007
Sales (millions)                            $     859       $     758
Sales change analysis:
Local currency (volume and price)                 6.4 %          15.0 %
Translation                                       7.0             3.7
Total sales change                               13.4 %          18.7 %

Operating income (millions)                 $     204       $     181
Percent change                                   12.4 %          14.9 %
Percent of sales                                 23.7 %          23.9 %



The Safety, Security and Protection Services segment serves a broad range of
markets that increase the safety, security and productivity of workers,
facilities and systems. Major product offerings include personal protection
products, safety and security products (including border and civil security
solutions), energy control products, cleaning and protection products for
commercial establishments, roofing granules for asphalt shingles, and supply
chain execution software solutions.



Local currency sales growth in the first quarter of 2008 was 6.4 percent, with
1.9 percent from acquisitions. 3M posted strong growth in three businesses -
respiratory protection, protective window films and cleaning solutions for
commercial buildings, and corrosion protection. As a leading manufacturer of
occupational safety products, asset





                                       33
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tracking solutions, security systems and building safety solutions, 3M continues
to see strong growth in both developed and emerging economies outside the U.S.
International sales expanded in the quarter, with equally strong contributions
from Europe, Asia Pacific and Latin America. The roofing granules business
posted sequential improvement versus the fourth quarter; however, the business
was still down slightly year-on-year. Since sales in the roofing granule
business are predominantly U.S.-based, 3M continues to expect that sales will
remain soft throughout the year due to the weak U.S. housing market. Operating
income in the first quarter of 2007 was $204 million, up 12.4%.



On April 1, 2008, 3M completed the acquisition of Aearo, a global leader in the
personal protection industry.  Through this acquisition, 3M has expanded its
safety portfolio to offer customers a more complete personal protection
solution.



Electro and Communications Business:


                                               Three months ended
                                                    March 31
                                              2008            2007
Sales (millions)                            $     725       $     664
Sales change analysis:
Local currency (volume and price)                 3.3 %          (0.1 )
                                                                      %
Translation                                       5.9             2.4
Total sales change                                9.2 %           2.3 %

Operating income (millions)                 $     146       $     110
Percent change                                   33.6 %          (6.7 )
                                                                      %
Percent of sales                                 20.2 %          16.5 %



The Electro and Communications segment serves the electrical, electronics and
communications industries, including electrical utilities; electrical
construction, maintenance and repair; OEM electrical and electronics; computers
and peripherals; consumer electronics; telecommunications central office,
outside plant and enterprise; as well as aerospace, military, automotive and
medical markets; with products that enable the efficient transmission of
electrical power and speed the delivery of information and ideas. Products
include electronic and interconnect solutions, micro interconnect systems,
high-performance fluids, high-temperature and display tapes, telecommunications
products, electrical products, and touch screens and touch monitors.



The Electro and Communications segment local-currency sales increased 3.3
percent, including one percentage point from acquisitions. This segment
experienced sales growth in all major geographies, despite challenges in 3M's
flexible connectors business where a number of product solutions are going
end-of-life. Sales growth was led by 3M's electrical markets business, a
critical core 3M platform that serves the electrical utility, construction and
maintenance and OEM markets, along with 3M's electronics markets materials
business, where 3M provides adhesives, fluorochemicals and abrasives to a number
of industries, most notably semiconductor and electronic assembly. 3M has
invested in a number of customer technology centers and manufacturing facilities
in key regions around the world to serve its Electro and Communications
customers. Operating income in the first quarter of 2007 included $19 million in
restructuring expenses, primarily for asset impairment charges related to the
Company's decision to close a facility in Wisconsin, which contributed 20.0
percentage points of the reported 33.6 percent operating income growth when
comparing the first quarter of 2008 to the first quarter of 2007.





                                       34
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FINANCIAL CONDITION AND LIQUIDITY



The Company generates significant ongoing cash flow. On April 1, 2008, 3M
(Safety, Security and Protection Services Business) completed its acquisition of
100 percent of the outstanding shares of Aearo - a global leader in the personal
protection industry that manufactures and markets personal protection and energy
absorbing products - for approximately $1.2 billion, inclusive of debt assumed,
which was immediately paid off. Due to the closing of the Aearo acquisition on
April 1, 2008, 3M carried an increased amount of cash on its balance sheet at
March 31, 2008.



The Company's net debt position is as follows:


                                                       Mar. 31          Dec. 31
(Millions)                                               2008             2007

Total Debt                                            $    6,182       $    4,920
Less: Cash and cash equivalents and marketable             3,954            2,955
securities
Net Debt                                              $    2,228       $    1,965



Cash, cash equivalents and marketable securities at March 31, 2008 totaled
approximately $4.0 billion, helped by strong cash flow generation, the timing of
debt issuances and the build-up of cash in anticipation of the Aearo acquisition
closing on April 1, 2008. 3M believes its ongoing cash flows provide ample cash
to fund expected investments and capital expenditures. The Company has
sufficient access to capital markets to meet currently anticipated growth and
acquisition investment funding needs. The Company does not utilize derivative
instruments linked to the Company's stock. 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 3M's 2007 Annual Report on
Form 10-K, Note 10).



The Company's financial condition and liquidity are strong. Various assets and
liabilities, including cash and short-term debt, can fluctuate significantly
from month to month depending on short-term liquidity needs. Working capital
(defined as current assets minus current liabilities) totaled $4.625 billion at
March 31, 2008, compared with $4.476 billion at December 31, 2007. Working
capital was higher primarily due to increases in cash and cash equivalents,
receivables and inventories, which were partially offset by increases in
short-term debt and accrued income taxes.



The Company has an AA credit rating, with a stable outlook, from Standard &
Poor's and an Aa1 credit rating, with a negative outlook, from Moody's Investors
Service. Under 3M's $1.5-billion five-year credit facility agreement, the
Company 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 March 31, 2008, this ratio was approximately 30 to 1.



The Company has a 'well-known seasoned issuer' shelf registration statement,
effective February 24, 2006, to register an indeterminate amount of debt or
equity securities for future sales. The Company intends to use the proceeds from
future securities sales off this shelf for general corporate purposes. In
connection with this shelf registration, in June 2007 the Company established a
medium-term notes program through which up to $3 billion of medium-term notes
may be offered. This program has a remaining capacity of $2.5 billion as of
March 31, 2008.



The Company uses various working capital measures that place emphasis and focus
on certain working capital assets and liabilities. These measures are not
defined under U.S. generally accepted accounting principles and may not be
computed the same as similarly titled measures used by other companies. One of
the primary working capital measures 3M uses is a combined index, which includes
accounts receivable, inventory and accounts payable. This combined index is
defined as quarterly net sales multiplied by four, divided by certain components
of working capital, which for this calculation is defined as ending net accounts
receivable plus inventory less accounts payable. This index measured 4.9 at
March 31, 2008, similar to the 5.0 index at March 31, 2007, but down from 5.3 at
December 31, 2007. Receivables increased $414 million, or 12.3%, compared with
December 31, 2007, with higher March 2008 sales compared to December 2007 sales
contributing to this increase. In addition, foreign currency translation
increased accounts receivable by $150 million compared with December 31, 2007,
as the U.S. dollar weakened in aggregate against many currencies. Inventories
increased $169 million, or 5.9%, compared with December 31, 2007, with $82
million of this increase related to foreign currency translation. Accounts
payable increased $52 million compared with December 31, 2007, with $47 million
of this increase related to foreign currency translation.





                                       35
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Cash flows from operating, investing and financing activities are provided in
the tables that follow. Individual amounts in the Consolidated Statement of Cash
Flows exclude the effects of acquisitions, divestitures and exchange rate
impacts, which are presented separately in the cash flows. Thus, the amounts
presented in the following operating, investing and financing activities tables
reflect changes in balances from period to period adjusted for these effects.



Cash Flows from Operating Activities:


                                                            Three months ended
                                                                 March 31
(Millions)                                                  2008          2007

Net income                                                $    988      $   1,368
Depreciation and amortization                                  268            254
Company pension contributions                                  (48 )          (60 )
Company postretirement contributions                            (1 )           (1 )
Company pension expense                                         20             43
Company postretirement expense                                   8             14
Stock-based compensation expense                                43             33
Gain from sale of pharmaceuticals business                       -           (786 )
Income taxes (deferred and accrued income taxes)                73            131
Excess tax benefits from stock-based compensation               (5 )           (7 )
Accounts receivable                                           (264 )         (319 )
Inventories                                                    (86 )         (107 )
Accounts payable                                                20             49
Product and other insurance receivables and claims              25             75
Other - net                                                    (44 )         (107 )
Net cash provided by operating activities                 $    997      $     580



Cash flows from operating activities can fluctuate significantly from period to
period, as pension funding decisions, tax timing differences and other items can
significantly impact cash flows. In addition, the first quarter of each year
typically has the lowest cash provided by operations due to historically strong
sales in March and softer sales in December, which negatively impacts working
capital. In the first three months of 2008, cash flows provided by operating
activities increased by $417 million compared to the first three months of 2007.
Net income decreased $380 million, with this decrease related to the combined
first-quarter 2007 after-tax impact of the gain on sale of the branded
pharmaceuticals business in Europe, net of restructuring expenses and an
increase in environmental liabilities, which benefited first-quarter 2007 net
income by $422 million. In the first quarter of 2007, since the pharmaceuticals
gain is included in and increased net income, the pre-tax gain from the sale of
the pharmaceuticals business of $786 must be subtracted, as shown above, to
properly reflect operating cash flows. The cash proceeds from sale of the
pharmaceuticals business are shown as part of cash from investing activities;
however, when the related taxes are paid they are required to be shown as part
of cash provided by operating activities. Thus, operating cash flows for the
first quarter of 2007 were penalized due to cash income tax payments of nearly
$400 million in the first quarter of 2007 that related to the sale of portions
of the global branded pharmaceuticals business in the fourth quarter of 2006.
Non-pharmaceutical related cash income tax payments in the first quarter of 2008
were approximately $200 million higher than in the first quarter of 2007 due to
normal timing differences in tax payments, negatively impacting cash flows.





                                       36
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Cash Flows from Investing Activities:


                                                            Three months ended
                                                                 March 31
(Millions)                                                 2008           2007

Purchases of property, plant and equipment (PP&E)        $    (298 )    $    (304 )
Proceeds from sale of PP&E and other assets                      4              4
Acquisitions, net of cash acquired                             (16 )          (55 )
Proceeds from sale of pharmaceuticals business                   -            817
Purchases and proceeds from sale or maturities of             (154 )         (449 )
marketable securities and investments - net
Net cash provided by (used in) investing activities      $    (464 )    $      13



Investments in property, plant and equipment enable growth in diverse markets,
helping to meet product demand and increasing manufacturing efficiency. Capital
expenditures were $298 million in the first three months of 2008, similar to the
first three months of 2007. The Company expects capital expenditures to total
approximately $1.3 to $1.4 billion for total year 2008, compared with $1.422
billion in 2007.



In March 2008, 3M entered into a sale-leaseback relative to an administrative
location in Italy. 3M anticipates leasing back the facility through late 2009 at
which time a new location will be utilized. Because only a small portion of the
proceeds was received through March 2008 coupled with required deferral of a
portion of the gain from the sale over the leaseback period, no material gain
has been recorded through March 2008. The remaining proceeds, which are secured
by a bank guarantee, are expected to be received in September 2008, which will
result in a pre-tax gain of approximately 29 million Euros in the third quarter
of 2008.



Refer to Note 2 in this Quarterly Report on Form 10-Q for information on 2008
acquisitions. 3M received $817 million in proceeds from the sale of the
pharmaceuticals business in Europe in the first quarter of 2007. The Company is
actively considering additional acquisitions, investments and strategic
alliances, and from time to time may also divest certain businesses.



In the Consolidated Statement of Cash Flows, purchases of marketable securities
and investments, and proceeds from sale or maturities of marketable securities
and investments are primarily attributable to asset-backed securities and other
marketable securities, which are classified as available-for-sale. Interest rate
risk and credit risk related to the underlying collateral may impact the value
of investments in asset-backed securities, while factors such as general
conditions in the overall credit market and the nature of the underlying
collateral may affect the liquidity of investments in asset-backed securities.
The coupon interest rate for asset-backed securities are either fixed rate or
floating rate.  Floating rate coupons reset monthly or quarterly based upon the
corresponding monthly or quarterly LIBOR rate.  Each individual floating rate
security has a coupon based upon the respective LIBOR rate +/- an amount
reflective of the credit risk of the issuer and the underlying collateral. Terms
of the reset are unique to individual securities. Fixed rate coupons are
established at the time the security is issued and are based upon a spread to a
related maturity treasury bond. The spread against the treasury bond is
reflective of the credit risk of the issuer and the underlying collateral on the
original issue date. 3M does not currently expect risk related to its holdings
in asset-backed securities to materially impact its financial condition or
liquidity. Refer to Note 7 for more details about 3M's diversified marketable
securities portfolio, which totaled $1.227 billion as of March 31, 2008.
Purchases of marketable securities, net of sales and maturities, totaled $154
million for the first three months of 2008, compared to $449 million for the
first three months of 2007.





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Cash Flows from Financing Activities:


                                                            Three months ended
                                                                 March 31
(Millions)                                                 2008           2007

Change in short-term debt - net                          $   1,211      $    (448 )
Repayment of debt (maturities greater than 90 days)            (89 )          (56 )
Proceeds from debt (maturities greater than 90 days)             -          1,565
Total cash change in debt                                $   1,122      $   1,061
Purchases of treasury stock                                   (510 )       (1,164 )
Reissuances of treasury stock                                   79             98
Dividends paid to stockholders                                (353 )         (350 )
Distributions to minority interests and other - net            (23 )           (9 )
Net cash provided by (used in) financing activities      $     315      $    (364 )



Total debt at March 31, 2008, was $6.182 billion, up from $4.920 billion at
December 31, 2007. In the first three months of 2008, the increase in debt is
primarily related to commercial paper activity. Total debt was 33% of total
capital (total capital is defined as debt plus equity), compared with 30% at
year-end 2007. The Company's purchases of treasury stock totaled $510 million in
the first three months of 2008, a decrease compared to the high purchase level
in the first quarter of 2007 when the Company bought back $1.164 billion in
shares.



Repurchases of common stock are made to support the Company's stock-based
employee compensation plans and for other corporate purposes. In February 2007,
3M's Board of Directors approved a two-year share repurchase authorization of up
to $7.0 billion for the period from February 12, 2007 to February 28, 2009. As
of March 31, 2008, the Company has $3.7 billion remaining under this
authorization, which the Company does not currently expect to fully utilize by
February 28, 2009. Refer to the table titled 'Issuer Purchases of Equity
Securities' in Part II, Item 2, for more information.



In February 2008, the Board of Directors increased the quarterly dividend on 3M
common stock by 4.2% to 50 cents per share, equivalent to an annual dividend of
$2.00 per share. This marked the 50th consecutive year of dividend increases.
Other cash flows from financing activities include distributions to minority
interests, excess tax benefits from stock-based compensation, changes in cash
overdraft balances, and principal payments for capital leases.



Contractual Obligations Update:



During the first quarter of 2008, the Company amended an existing unconditional
agreement to purchase raw materials from a third-party supplier. The amendment,
which runs through December 31, 2011, requires 3M purchases of these raw
materials to aggregate $133 million over the two-year period 2010 and 2011. The
contractual obligation table shown in 3M's 2007 Annual Report on Form 10-K
already reflected the previous commitment that is continuing for years 2008 and
2009, but did not reflect this new commitment for years 2010 and 2011. The
purchase obligation amounts do not represent the entire anticipated purchases by
3M during the contract period, but represent only those items for which the
Company is contractually obligated.



FORWARD-LOOKING STATEMENTS



This Quarterly Report on Form 10-Q, including 'Management's Discussion and
Analysis of Financial Condition and Results of Operations' in Part I, Item 2,
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company may also make forward-looking
statements in other reports filed with the Securities and Exchange Commission,
in materials delivered to stockholders and in press releases. In addition, the
Company's representatives may from time to time make oral forward-looking
statements.



Forward-looking statements relate to future events and typically address the
Company's expected future business and financial performance. Words such as  
'plan,' 'expect,' 'aim,' 'believe,' 'project,' 'target,' 'anticipate,' 'intend,'
'estimate,' 'will,' 'should,' 'could' and other words and terms of similar
meaning, typically identify such forward-looking statements. In particular,
these include statements about: (1) worldwide economic conditions; (2)
competitive conditions and customer preferences; (3) foreign currency exchange
rates and fluctuations in those rates; (4) the timing and acceptance of new
product offerings; (5) the availability and cost of purchased components,
compounds, raw materials and energy (including oil and natural gas and their
derivatives) due to shortages, increased demand or supply interruptions
(including those caused by natural and other disasters and other events); (6)
the impact of acquisitions, strategic alliances, divestitures, and other unusual
events resulting





                                       38
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from portfolio management actions and other evolving business strategies, and
possible organizational restructuring; (7) expected productivity improvements;
and (8) legal proceedings. The Company assumes no obligation to update or revise
any forward-looking statements.



Forward-looking statements are based on certain assumptions and expectations of
future events and trends that are subject to risks and uncertainties. Actual
future results and trends may differ materially from historical results or those
reflected in any such forward-looking statements depending on a variety of
factors. Discussion of these factors is incorporated by reference from Part II,
Item 1A, 'Risk Factors', of this document and from Part I, Item 1A, 'Risk
Factors', of 3M's Annual Report on Form 10-K for the year ended December 31,
2007, and should be considered an integral part of Part I, Item 2, 'Management's
Discussion and Analysis of Financial Condition and Results of Operations'.



Item 3. Quantitative and Qualitative Disclosures About Market Risk.



In the context of Item 3, market risk refers to the risk of loss arising from
adverse changes in financial and derivative instrument market rates and prices,
such as fluctuations in interest rates and currency exchange rates.  For a
discussion of sensitivity analysis related to these types of market risks, refer
to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk,
in 3M's Annual Report on Form 10-K for the year ended December 31, 2007. The
Company believes that there have been no material changes in these market risks
since year-end 2007.



Item 4.  Controls and Procedures.



a.  The Company carried out an evaluation, under the supervision and with the
participation of its management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's 'disclosure controls and procedures' (as defined in the Exchange Act
Rule 13a-15(e)) as of the end of the period covered by this report. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.



b.  There was no change in the Company's internal control over financial
reporting that occurred during the Company's most recently completed fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.





                                       39
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                                   3M COMPANY

FORM 10-Q

For the Quarterly Period Ended March 31, 2008

PART II.  Other Information



Item 1. Legal Proceedings.



Discussion of legal matters is incorporated by reference from Part I, Item 1,
Note 11, 'Commitments and Contingencies', of this document, and should be
considered an integral part of Part II, Item 1, 'Legal Proceedings'.



Item 1A. Risk Factors.



The most significant risk factors applicable to the Company are described in
Part I, Item 1A 'Risk Factors' of 3M's Annual Report on Form 10-K for the year
ended December 31, 2007. There have been no material changes from the risk
factors previously disclosed in 3M's Annual Report on Form 10-K.



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.



(e) Issuer Purchases of Equity Securities



Repurchases of common stock are made to support the Company's stock-based
employee compensation plans and for other corporate purposes. In February 2007,
3M's Board of Directors authorized a two-year share repurchase of up to $7
billion for the period from February 12, 2007 to February 28, 2009.



Issuer Purchases of Equity

Securities (registered pursuant to

Section 12 of the Exchange Act)
Period                                Total Number of    Average Price Paid    Total Number of         Maximum
                                     Shares Purchased        per Share        Shares Purchased    Approximate Dollar
                                            (1)                                  as Part of        Value of Shares
                                                                                  Publicly         that May Yet Be
                                                                               Announced Plans     Purchased under
                                                                                 or Programs         the Plans or
                                                                                                       Programs
                                                                                                      (Millions)
January 1-31, 2008                           1,876,312   $            78.23           1,871,200   $            4,002
February 1-29, 2008                          2,281,560   $            79.37           2,201,400   $            3,828
March 1-31, 2008                             2,153,150   $            78.28           2,126,600   $            3,662
Total January 1-March 31, 2008               6,311,022   $            78.66           6,199,200   $            3,662


--------------------

(1) The total number of shares purchased includes: (i) shares purchased under
the Board's authorizations described above, and (ii) shares purchased in
connection with the exercise of stock options (which combined totaled 5,112
shares in January 2008, 80,160 shares in February 2008 and 26,550 shares in
March 2008).



Item 3. Defaults Upon Senior Securities. - No matters require disclosure.



Item 4. Submission of Matters to a Vote of Security Holders. - No matters
require disclosure.





                                       40
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Item 5. Other Information. - No matters require disclosure.



Item 6. Exhibits.



Exhibits.  These exhibits are either incorporated by reference into this report
or filed with this report as indicated below. Exhibit numbers 10.1 through 10.24
are management contracts or compensatory plans or arrangements.



Index to Exhibits:


(3)  Articles of Incorporation and bylaws
     (3.1)     Certificate of incorporation, as amended as of May 11, 2007, is incorporated by reference from our Form
               8-K dated May 14, 2007.
     (3.2)     Bylaws, as amended as of February 11, 2008, is incorporated by reference from our Form 8-K dated
               February 11, 2008.

(4)  Instruments defining the rights of security holders, including indentures:
     (4.1)     Indenture, dated as of November 17, 2000, between 3M and Citibank, N.A., with respect to 3M's senior
               debt securities, is incorporated by reference from our Form 8-K dated December 7, 2000.
     (4.2)     Indenture, dated as of November 21, 2002, between 3M and Citibank, N.A., with respect to Liquid Yield
               OptionTM Notes zero coupon senior debt securities, is incorporated by reference from Registration No.
               333-103234 on Form S-3 filed on February 14, 2003.
     (4.3)     First Supplemental Indenture, dated as of November 16, 2005, to Indenture between 3M and Citibank, N.A.,
               with respect to Liquid Yield OptionTM Notes zero coupon senior debt securities, is incorporated by
               reference from our 8-K dated November 17, 2005.
     (4.4)     Except as set forth in the preceding Exhibits 4.1, 4.2 and 4.3, the instruments defining the rights of
               holders of long-term debt securities of 3M have been omitted. We agree to furnish to the SEC, upon
               request, a copy of such instruments with respect to issuances of long-term debt of 3M.

(10) Material contracts and management compensation plans and arrangements:
     (10.1)    3M 2005 Management Stock Ownership Program is incorporated by reference from our Proxy Statement for the
               2005 Annual Meeting of Stockholders.
     (10.2)    3M 2002 Management Stock Ownership Program is incorporated by reference from our Proxy Statement for the
               2002 Annual Meeting of Stockholders.
     (10.3)    3M 1997 Management Stock Ownership Program is incorporated by reference from our Proxy Statement for the
               1997 Annual Meeting of Stockholders.
     (10.4)    3M 1992 Management Stock Ownership Program is incorporated by reference from our Proxy Statement for the
               1992 Annual Meeting of Stockholders.
     (10.5)    Form of award agreement for non-qualified stock options granted under the 2005 Management Stock
               Ownership Program, is incorporated by reference from our Form 8-K dated May 16, 2005.
     (10.6)    Form of award agreement for non-qualified stock options granted under the 2002 Management Stock
               Ownership Program, is incorporated by reference from our Form 10-K for the year ended December 31, 2004.
     (10.7)    3M 1997 General Employees' Stock Purchase Plan, as amended through November 8, 2004, is incorporated by
               reference from our Form 10-K for the year ended December 31, 2004.
     (10.8)    3M VIP (Voluntary Investment Plan) Plus is incorporated by reference from Registration Statement No.
               333-73192 on Form S-8, filed on November 13, 2001.
     (10.9)    3M Deferred Compensation Plan, as amended through February 2008, is incorporated by reference from our
               Form 8-K dated February 14, 2008.
     (10.10)   3M Executive Annual Incentive Plan is incorporated by reference from our Form 8-K dated May 14, 2007.
     (10.11)   3M Performance Unit Plan, as amended through February 11, 2007, is incorporated by reference from our
               Form 8-K dated May 14, 2007.
     (10.12)   Description of changes to Non-Employee Director Compensation and Stock Ownership Guidelines dated as of
               August 13, 2007 is incorporated by reference from our Form 10-Q for the quarter ended September 30,
               2007.
     (10.13)   Description of changes to 3M Compensation Plan for Non-Employee Directors is incorporated by reference
               from our Form 8-K dated August 8, 2005.
     (10.14)   3M Compensation Plan for Non-Employee Directors, as amended, through November 8, 2004, is incorporated
               by reference from our Form 10-K for the year ended December 31, 2004.
     (10.15)   3M 1992 Directors Stock Ownership Program, as amended through November 8, 2004, is incorporated by
               reference from our Form 10-K for the year ended December 31, 2004.





                                       41
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     (10.16)   3M Executive Life Insurance Plan, as amended, is incorporated by reference from our Form 10-K for the
               year ended December 31, 2003.
     (10.17)   Summary of Personal Financial Planning Services for 3M Executives is incorporated by reference from our
               Form 10-K for the year ended December 31, 2003.
     (10.18)   3M policy on reimbursement of incentive payments is incorporated by reference from our Form 10-K for the
               year ended December 31, 2006.
     (10.19)   Employment agreement dated as of December 6, 2005, between 3M and George W. Buckley is incorporated by
               reference from our Form 8-K dated December 9, 2005.
     (10.20)   Amendment, dated August 14, 2006, to employment agreement between 3M and George W. Buckley is
               incorporated by reference from our Form 10-Q for the quarter ended September 30, 2006.
     (10.21)   Description of compensation plan for Robert S. Morrison is incorporated by reference from our Form 8-K
               dated August 8, 2005.
     (10.22)   Employment agreement dated as of January 23, 2002, between 3M and Patrick D. Campbell is incorporated by
               reference from our Form 10-K for the year ended December 31, 2001.
     (10.23)   Employment agreement dated as of November 19, 2002, between 3M and Richard F. Ziegler is incorporated by
               reference from our Form 10-K for the year ended December 31, 2002.
     (10.24)   Letter agreement dated as of March 14, 2007, between 3M and Richard F. Ziegler is incorporated by
               reference from our 8-K dated March 19, 2007.
     (10.25)   Five-year credit agreement as of April 30, 2007, is incorporated by reference from our Form 8-K dated
               May 3, 2007.

Filed electronically herewith:

        (12)   Calculation of ratio of earnings to fixed charges.
        (15)   A letter from the Company's independent registered public accounting firm regarding unaudited interim
               consolidated financial statements.
     (31.1)    Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
               18 U.S.C. Section 1350.
     (31.2)    Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
               18 U.S.C. Section 1350.
     (32.1)    Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
               18 U.S.C. Section 1350.
     (32.2)    Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
               18 U.S.C. Section 1350.





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                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



                                   3M COMPANY

                                  (Registrant)


Date: May 2, 2008

                                    By         /s/ Patrick D. Campbell



                              Patrick D. Campbell,

               Senior Vice President and Chief Financial Officer



            (Mr. Campbell is the Principal Financial Officer and has

           been duly authorized to sign on behalf of the Registrant.)





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QRFEALSSESPPEFE                                                                                                                                          

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