james b. stake executive vice president, display and graphics business

3M Investor Meeting 2006 © 3M 2006 All Rights Reserved

Jim StakeExecutive Vice President,

Display & Graphics Business

Sustainable Profitable Growth


Growing core businesses…common strengths…healthy pipeline

Growing core businesses…common strengths…healthy pipeline

Optical

TrafficSafety

TechnologyPipeline

Commercial Graphics

Display & Graphics Business


3M Display & Graphics: Key Financial Data

$2.9$3.3 $3.5

$0.9

$0.0

$1.0

$2.0

$3.0

$4.0

2003 2004 2005 Q1 2006

$865

$1,115 $1,162

$296

$0

$300

$600

$900

$1,200

$1,500

2003 2004 2005 Q1 2006

2005 Sales By Geographic AreaU.S. 21% Europe 14%

APAC 60%

LAC 5%

Sales Operating Income

LC Growth 28.4% 30.3%12.4% 4.7% 9.5% 33.3% 33.1% 32.4%OI Margin

$Billions & YOY % Chg $Millions & YOY % Chg

+35%+17% +5%

+8%

+29% +4%

+4%

+67%*

*2002 estimated stock options, not restated.


Building brands through graphics and digital signageBuilding brands through graphics and digital signage

World’s largest graphicBoeing complex – Everett, WA

Commercial Graphics Division


Transportation



Food & Beverage



Interior & Digital Signage

Night Signage

Day Signage

Banking



Patented microreplicatedadhesive technology

Patented microreplicatedadhesive technology



Commercial Graphics DivisionPrinting

Knowledge

End-user Coverage

Scotchprint™Warranted Graphics

Global Graphic Network

Intellectual Property

Broad Range of Offerings

“Big 3M”

ManufacturingExcellence &

Scale

Sustainable globalgrowth model



The Leader in Transportation Safety & Mobility Solutions

The Leader in Transportation Safety & Mobility Solutions

Traffic Safety Systems Division


Engineer Grade

High Intensity

DG³Prismatic Migration

1939 2006

3X Brighter 10X Brighter


DiamondGrade


Digital Systems

Solutions & Services Latest Innovation

High value solutions for vehicle registrationHigh value solutions for vehicle registration

MaterialsTraffic Safety Systems Division


Technology breakthrough and service migration in pavement markings

Day - Dry Night - WetNight - Dry



Traffic Safety Systems DivisionHistory of

Leadership

Global Coverage

Consistent Quality & Service

Government Relationships –

“Trust”


Broad Range of Offerings

Expanding into Services

Manufacturing Excellence &

Scale




Making LCDs better, brighterand more energy efficient

Making LCDs better, brighterand more energy efficient

Optical Systems Division


Polarizer

CompensatorGlass

Color FilterLiquid Crystal

Glass

Compensator

Polarizer

Cover Sheet

3M DBEF

3M BEF

3M BEF

Diffuser

Light Guide

3M Reflectors

Liquid Crystal Display Glass

Backlight

LCD Panel Structure


Without BEFDim

Wasted Light

Wasted Light

BEF redirectslight towards the viewer

Bright

Light refractedtoward viewer

LampWastedoff-axis lightreflected back for recycling

BEF Recycles off axis light

LCD BEF Backlight

BEF - Brightness Enhancement Film


DBEF - Dual Brightness Enhancement FilmWithout DBEF, 50% of backlight output is absorbed by the LCD

LCD Backlight

Transmit P1

Absorb P2Dim

DBEF increases brightness by Reflecting & Recycling polarized light

P1

DBEFLCD

P2

Ref

lect

Backlight

P1

Rec

ycle

Bright

3M Investor Meeting 2006 © 3M 2006 All Rights ReservedSource: DisplaySearch

-

10

20

30

40

50

60

70

80

2002 2003 2004 2005 2006 2007 2008 2009 2010

Dis

play

Are

a (M

illio

ns m

2)

TVMonitorNotebookHandheld

05-10 CAGR: 25%

LCD Area Growth


LCD TVs

Monitors

Strong growth led by LCD-TVand handheld devices

Strong growth led by LCD-TVand handheld devices

2001 2002 2003 2004 2005

Handhelds

Notebooks

3M LCD Film Sales ($) by Application


0

50

100

150

200

250

2003 2004 2005 2006 2007 2008 2009 2010

Uni

ts (M

illio

ns)

LCDPDPPJ TVCRT

Consumer Television Units


0

10000

20000

30000

40000

50000

60000

2003 2004 2005 2006 2007 2008 2009 2010

Area

(000

's m

2)

LCD TVPDPRPTV

05-10 CAGR: 32%

Source: 3M Estimate

New TV Technology Area Growth


$-

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

$2,000

$2,250

2002 2003 2004 2005 2006 2007 2008 2009 2010

AS

P ($

/uni

t)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Units

(000

's)

LCD Panel ASP

$-

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

$2,000

$2,250

2002 2003 2004 2005 2006 2007 2008 2009 2010

ASP

($/u

nit)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Units

(000

's)

LCD Panel ASP LCD Panel Demand

LCD price decreases fueling strong demandLCD price decreases fueling strong demand

32” LCD TV Panel Price


LG Philips 7G Q1’06 8G Q3’08Samsung/Sony 7G Q1’06 8G Q4’07Samsung 9G Q3’09Sharp 8G Q4’06 9G Q1’10AUO 7G Q4’06 8G TBDCMO 7G Q3’07 8G Q2’08 8G TBD Hannstar 7.5G TBDSVA-NEC 6G Q3’08BOE-Hydis 6G Q1’09

LCD Fabs

Poland TV AssemblyLG ElectronicsSharp

Total customer investment of over $30 BillionTotal customer investment of over $30 Billion

Customer Investments


Sharp KameyamaSharp Kameyama SamsungSamsung

L.G. Philips – 7G SubstrateL.G. Philips – 7G Substrate

Source: Sharp Website Source: Samsung Website

Source: L.G. Investors Presentation

Customer Investments


0

20000

40000

60000

80000

100000

120000

140000

160000

180000Q

1'05

Q2'

05

Q3'

05

Q4'

05

Q1'

06

Q2'

06

Q3'

06

Q4'

06

Q1'

07

Q2'

07

Q3'

07

Q4'

07

Q1'

08

Q2'

08

Q3'

08

Q4'

08

Q1'

09

Q2'

09

Q3'

09

Q4'

09

Q1'

10

Q2'

10

Q3'

10

Q4'

10

Uni

ts (1

,000

/QTR

)

Realistic Capacity Demand Total

Excess capacityrepresents upsideExcess capacityrepresents upside

Large Area LCD Supply / Demand


Product Technology

Process Technology

Customer Relations

Application Development

Quality Systems

Global Supply Chain

ManufacturingExcellence &

Scale

Customer Support Teams


Sustainable global growth modelSustainable global growth model

Optical Systems Division


Optical Systems Intellectual Property

0

750

2000 2001 2002 2003 2004 2005 2006 YTD

Activ

e U

S P

aten

ts

Large and growing patent portfolioLarge and growing patent portfolio


Key Account Teams supporting customer success

Customer Satisfaction is Growing

Annual customer satisfaction surveys

0 1 2 3 4 5 6 7 8 9 10

’03 ’04 ‘05


Suzhou, China Wroclaw, Poland

Kansai, Japan Hwaseong, Korea

USA Naju, Korea Tainan, Taiwan

Investing to Support Customer Growth


High Gain BEF– 8% - 10% brightness improvement

Anti-Static BEF– Lower LCD assembly cost

Notebook Privacy Filters– New manufacturing process

enables mass market pricing

APF: Next generation DBEF– Thinner, higher contrast, better color

BEF- RP Multifunction Film– Superior gain, lower LCD assembly cost

Continuous Flow of New Product Innovations


3M delivers industry-leading quality2006 quality objectives:

– Tighten particle size specs by 25% to 30%

– Cut total number of defects by 50%

Superior quality:

– Lowers customer assembly and rework costs

– Improves 3M manufacturing yields

24 um

Defect Human Hair Current Spec Future Spec

Quality Advantage


0

20

40

60

80

100

120

1999 2000 2001 2002 2003 2004 2005 2006

Rel

ativ

e Pr

ice

3M Enhancement ASP

Sharing productivity gains and optimizing price/value to maximize opportunity

Sharing productivity gains and optimizing price/value to maximize opportunity

LCD Film Price History


DBEF = fewer bulbs, less energy, lower temperature DBEF = fewer bulbs, less energy, lower temperature

12 Lamps + DBEF 16 Lamps

Less PowerLower Temp

VikuitiTM DBEF And Energy Efficiency


D&G Technology Pipeline – Plasma


D&G Technology Pipeline – OLED


D&G Technology Pipeline – LEDs


Durable Polarizers for LCD projection systems– Dramatically reduces long term display

degradation

Solid State Lamps (LEDs)– Improved lifetime, better color, instant on,

no Mercury

Optical core for reflective LCD systems (L-COS)– Improved brightness, contrast and uniformity

D&G Technology Pipeline – Projection


D&G Technology Pipeline – Touch Systems


Stepped-Up Marketing

www.vikuiti.com


Display & Graphics

Outstanding teams in placeExcellent customer relationshipsStrong core businessesUnmatched manufacturing scale and qualityGrowing marketsClear leadership positionsPositive momentum – 8%+ LC Growth TargetRobust technology pipeline

Sustainable, profitable growth!Sustainable, profitable growth!

james b. stake executive vice president, display and graphics business

Economy & Finance