July 26, 2007
For Immediate Release

3M Posts Record Second Quarter Sales and Earnings

Company Raises 2007 Earnings Outlook

St. Paul, Minn – 3M (NYSE:MMM) today announced its sales and profit results for the second quarter of 2007.

3M’s quarterly sales grew 8 percent, or 11.8 percent adjusted for the recent divestiture of its branded pharmaceuticals business, and exceeded $6 billion for the first time in the company’s history. 3M generated second-quarter 2007 earnings of $917 million or $1.25 per share, versus $882 million, or $1.15 per share, in the second quarter of 2006. Included in these results are net gains of $18 million, or $0.02 per share (a-c), in the second quarter of 2007, and $74 million, or $0.10 per share (d), in the second quarter of 2006, due to special items which are fully described in notes (a-d). Excluding special items in both periods, earnings per share increased more than 17 percent.

“Our strategy of accelerating top-line growth while maintaining exceptional returns remains on track, evidenced by record-breaking results in the second quarter,” said George W. Buckley, 3M chairman, president and CEO. “The strength of 3M’s portfolio was evident in the second quarter as our growth spanned the entire company, with particularly outstanding results from our Safety, Security and Protection Services and Health Care businesses. As a result of this strong first-half performance, we are raising our earnings outlook for 2007.”

“We delivered outstanding sales growth and operating margins in the quarter while simultaneously increasing investments in key growth drivers such as research and development, sales and marketing, and the expansion and simplification of our global supply chain, all aimed directly at propelling us toward sustainable higher growth,” Buckley said. “Our people, vast technology base and global market presence give me confidence in our ability to accelerate growth and generate superior financial returns over the long term.”

Executive Summary

• Revenues of $6.1 billion, up 8 percent from 2006. Excluding impact of the divested branded pharmaceuticals business, sales increased nearly 12 percent.
• Local-currency sales, including the impact of acquisitions, up 9.3 percent from 2006.
• Negative 3.8 percent impact on sales growth due to divestiture of the branded pharmaceuticals business.
• Reported operating income for the quarter increased 18.8 percent to $1.4 billion. Excluding special items (a-d) in the second quarter of both 2006 and 2007, operating income increased 12.3 percent.
• Reported earnings per share of $1.25, up 8.7 percent from 2006, including special items in the second quarter of both 2006 and 2007 (a-d). Excluding special items in both periods in 2006 and 2007 (a-d), earnings per share increased by more than 17 percent.
• Returned $1.4 billion to shareholders through cash dividends and repurchases of shares in the second quarter, bringing the year-to-date total up to $2.9 billion.

Key Financial Highlights

Second-quarter worldwide sales totaled $6.1 billion, up 8 percent compared to the second quarter of 2006. Local-currency sales including acquisitions increased 9.3 percent, and foreign exchange impacts added 2.5 percent in the quarter. Divestitures, namely the recent sale of the company’s branded pharmaceuticals business, reduced reported sales growth by 3.8 percent. Local-currency sales including acquisitions increased 19.5 percent in Health Care, 16.7 percent in Safety, Security and Protection Services, 8.8 percent in Display and Graphics, 6.1 percent in Consumer and Office, 5.6 percent in Industrial and Transportation, and 1.2 percent in Electro and Communications.

Second-quarter net income was $917 million, or $1.25 per share, versus $882 million, or $1.15 per share, in the second quarter of 2006. Net income and earnings per share increased 3.9 percent and 8.7 percent, respectively, or 11.2 percent and 17.1 percent, respectively, excluding special items (a-d). The divested pharmaceuticals business contributed $0.05 per share in last year’s second quarter.

For the first six months of 2007, sales increased 7.1 percent to $12.1 billion, driven by an 8.4 percent increase in local-currency sales, including acquisitions. Year-to-date earnings were $3.10 per share, up 34 percent over 2006, and up 12.6 percent excluding special items (a-d) in both periods.

Business Segment Discussion

Industrial and Transportation

• Sales increased 8.5 percent to $1.8 billion.
• Sales up 5.6 percent in local currencies, including 1 percent from acquisitions.
• Broad-based sales performance: double-digit growth in industrial adhesives and tapes, automotive aftermarket, and energy markets.
• Positive growth in all major geographic regions.
• Solid operational performance, with profits up 12.5 percent and operating margin of 20 percent, excluding special items.

• Sales rose 10.2 percent to more than $1 billion.
• Local-currency growth of 8.8 percent, largely organic.
• Strongest sales growth in APAC, led by optical systems.
• Profit growth in all major divisions – optical systems, commercial graphics and traffic safety systems.
• Operating profits were $288 million; continuous aggressive operational improvements drove 28.7 percent margin, excluding special items.

• Sales of $988 million, up 23 percent excluding impact of divestiture of branded pharmaceutical business.
• Local-currency sales growth of 19.5 percent including 4.4 percent from acquisitions.
• All health care businesses generated double-digit sales growth, led by drug delivery systems.
• Pharma divestiture reduced reported sales by 24 percent.
• Operating income increased 32 percent excluding Pharma and special items.
• Double-digit sales growth in all major geographic regions, adjusted for the pharmaceutical divestiture.

• Sales increased 8.2 percent to $832 million.
• Local-currency sales growth of 6.1 percent, including 1.3 percent from acquisitions.
• Strongest growth in home care, office supplies and do-it-yourself businesses.
• Broad-based sales growth across all major geographies.
• Outstanding leverage with profits up 21.3 percent; operating margins of 20 percent.

• Sales rose to $799 million, up 20.7 percent.
• Sales growth in local currency of 16.7 percent, including 11.6 percent from acquisitions.
• Broad-based sales growth led by security systems, respiratory protection, protective window films and cleaning solutions for commercial buildings, along with corrosion protection products.
• Profits up 22 percent to $169 million, excluding special items.

• Sales increased 3.4 percent to $693 million.
• Local-currency growth of 1.2 percent, driven by acquisitions.
• Outstanding sales and profit growth in electrical and power utilities markets, with new products driving growth.
• Double-digit growth in communications markets; global infrastructure build continues to fuel 3M growth.
• Sluggish consumer electronics market continues to hurt segment.
• Business responding aggressively to market conditions; operating profits up 16 percent to $132 million, with margins of 19.1 percent.

Outlook

As a result of its strong first-half performance, 3M raised its 2007 earnings expectations. The company now expects reported earnings to be in the range of $5.40 to $5.60 per share versus a prior estimate of $5.20 to $5.45. The new guidance includes an estimated full year 2007 gain, net of costs from special items, of approximately $0.60 to $0.70 per share, primarily due to the completed sale of the company’s branded pharmaceuticals business in Europe. 3M also expects full-year, local-currency sales growth, adjusted for the divestiture of its branded pharmaceuticals business, to be within a range of 7 to 10 percent versus a prior expected range of 6 to 10 percent.

George W. Buckley, and Patrick D. Campbell, senior vice president and chief financial officer, will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central Time) today. Investors can access a Webcast of this conference, along with related charts and materials, at http://investor.3M.com.

Forward-Looking Statements

This news release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) about the company’s financial results and estimates, business prospects, and products under development that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: (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 from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (7) generating less productivity improvements than estimated; and (8) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2006 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (the “Reports”). Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports under “Risk Factors” in Part I, Item 1A (Annual Report) and in Part II, Item 1A (Quarterly Report). The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

About 3M - A Global, Diversified Technology Company

Every day, 3M people find new ways to make amazing things happen. Wherever they are, whatever they do, the company’s customers know they can rely on 3M to help make their lives better. 3M's brands include Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti. Serving customers around the world, the people of 3M use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications; safety, security and protection services; health care; industrial and transportation. For more information, including the latest product and technology news, visit www.3M.com.

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