3M 2006 Annual Report Download - page 31

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footwear and accessories, enhancing visibility in low-light situations. Other products include theft protection systems for
libraries and library patron self-checkout systems; spill-control soUEHQWV7KLQVXODWH,QVXODWLRQDQG7KLQVXODWH/LWH
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property; nonwoven abrasive materials for floor maintenance and commercial cleaning; floor matting; and natural and
color-coated mineral granules for asphalt shingles.
Electro and Communications Business: The Electro and Communications segment serves the electrical, electronics and
communications industries, including electrical utilities; electrical construction, maintenancHDQGUHSDLU2(0HOHFWULFDO
and electronics; computers and peripherals; consumer electronics; telecommunications central office, outside plant and
enterprise; as well as aerospace, military, automotive and medical markets. This segment provides products that enable
the efficient transmission of electrical power and speed the delivery of information and ideas. Products include electronic
and interconnect solutions, microinterconnect systems, high-performance fluids, high-temperature and display tapes,
telecommunications products and electrical products.
0DMRUHOHFWURQLFDQGHOHFWULFDOSURGXFWVLQFOXGHSDFNDJLQJand interconnection devices; high-performance fluids used in
the manufacture of computer chips, and for cooling electronics and lubricating computer hard disk drives; high-
temperature and display tapes; insulating materials, including pressure-sensitive tapes and resins; and related items.
0)OH[LEOH&LUFXLWVXVHHOHFWURQLFSDFNDJLQJDQGLQWHrconnection technology, providing more connections in less
VSDFHDQGDUHXVHGLQLQNMHWSULQWFDUWULGJHVFHOOSKRQHVDQGHOHFWURQLFGHYLFHV7KLVVHJPHQWVHUYHVWKHZRUOG¶V
telecommunications companies with a wide array of products for fiber-optic and copper-based telecommunications
systems for rapid deployment in IL[HGDQGZLUHOHVVQHWZRUNV
Distribution
0SURGXFWVDUHVROGWKURXJKQXPHURXVGLVWULEXWLRQFhannels, including directly to users and through numerous
ZKROHVDOHUVUHWDLOHUVMREEHUVGLVWULEXWRUVDQGGHDOHUVLQDwide variety of trades in many countries around the world.
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a confidence developed through long association with skilled marketing and sales representDWLYHV±KDVFRQWULEXWHG
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Research and Patents
Research and product development constituteVDQLPSRUWDQWSDUWRI0¶VDFWLYLWLHVDQGKDVEHHQDPDMRUGULYHURI0¶V
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Research and development, covering basic scientific research and the application of scientific advances in the
development of new and improved products and their usesWRWDOHGPLOOLRQLQLQFOXGLQJWKHPLOOLRQIRU
purchased in-process research and development discussHGDERYH5HVHDUFKDQGGHYHORSPHQWH[SHQVHVWRWDOHG
PLOOLRQLQDQGPLOOLRQLQ5HODWHGH[SHQVHVSULPDULO\LQFOXGHWHFKQLFDOVXSSRUWSURYLGHGE\0WR
H[LVWLQJFXVWRPHUVZKRDUHXVLQJ0SURGXFWVand the costs of internally developed patents.
7KH&RPSDQ\¶VSURGXFWVDUHVROGDURXQGWKHZRUOGXQGHUYDULous trademarks that are important to the Company. The
Company also owns, or holds licensesWRXVHQXPHURXV86DQGIRUHLJQSDWHQWV7KH&RPSDQ\¶VUHVHDUFKDQG
development activities generate a steady stream of inventions that are covered by new patents. Patents applicable to
VSHFLILFSURGXFWVH[WHQGIRUYDU\LQJSHULods according to the date of patent application filing or patent grant and the legal
term of patents in the various countries where patent protection is obtained. The actual protection afforded by a patent,
which can vary from country to country, depends upon the type of patent, the scope of its coverage and the availability of
legal remedies in the country.
The Company believes that its patents provide an important competitive advantage in many of itVEXVLQHVVHV,QJHQHUDO
no single patent or group of related patents is in itself essential to the Company asDZKROHRUWRDQ\RIWKH&RPSDQ\¶V
business segments. The importance of patents in the Display and Graphics segmentVLVGHVFULEHGLQ³3HUIRUPDQFHE\
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Raw Materials
,QWKH&RPSDQ\H[SHULHQFHGSULFHLQFUHDVHVDIIHFWLng metals, wood pulp and oil-derived raw materials. During
WKHIRXUWKTXDUWHURIWRWDOPDUNHWGHPDQGIRUPHWDls and oil-derived raw materials began to soften and the
Company is therefore pursuing price reductions for those commodities. To date the Company is receiving sufficient
quantities of all raw materials to meet its reasonably foreVHHDEOHSURGXFWLRQUHTXLUHPHQWV,WLVLPSRVVLEOHWRSUHGLFW
future shortages of raw materials or the impact any suchVKRUWDJHVZRXOGKDYH0has avoided disruption to its
manufacturing operations through careful management of H[LVWLQJUDZPDWHULDOLQYHQWRULHVDQGGHYHORSPHQWDQG