3M 2007 Annual Report Download - page 12

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6
business segments. The importance of patents in the Display and Graphics segments is described in “Performance by
Business Segment” – “Display and Graphics Business” in Part II, Item 7.
Raw Materials
In 2007, the Company experienced cost increases affecting metals, wood pulp and oil-derived raw materials. Costs
for these materials have remained high throughout the year, and 3M would expect this level to carry over into early
2008, with some moderation occurring later in the year. To date, the Company is receiving sufficient quantities of all
raw materials to meet its reasonably foreseeable production requirements. It is impossible to predict future shortages
of raw materials or the impact any such shortages would have. 3M has avoided disruption to its manufacturing
operations through careful management of existing raw material inventories and development and qualification of
additional supply sources. 3M manages commodity price risks through negotiated supply contracts, price protection
agreements and forward physical contracts.
Environmental Law Compliance
3M’s manufacturing operations are affected by national, state and local environmental laws around the world. 3M has
made, and plans to continue making, necessary expenditures for compliance with applicable laws. 3M is also involved
in remediation actions relating to environmental matters from past operations at certain sites (refer to “Environmental
and Other Liabilities and Insurance Receivables” in Note 13, Commitments and Contingencies).
Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current
or future revenues are expensed. Reserves for liabilities for anticipated remediation costs are recorded on an
undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of
feasibility studies or the Company’s commitment to a plan of action. Environmental expenditures for capital projects
that contribute to current or future operations generally are capitalized and depreciated over their estimated useful
lives.
In 2007, 3M expended about $21 million for capital projects related to protecting the environment. This amount
excludes expenditures for remediation actions relating to existing matters caused by past operations. Capital
expenditures for environmental purposes have included pollution control devices – such as wastewater treatment
plant improvements, scrubbers, containment structures, solvent recovery units and thermal oxidizers – at new and
existing facilities constructed or upgraded in the normal course of business. Consistent with the Company’s policies
stressing environmental responsibility, capital expenditures (other than for remediation projects) for known projects
are presently expected to be about $47 million over the next two years for new or expanded programs to build
facilities or modify manufacturing processes to minimize waste and reduce emissions.
While the Company cannot predict with certainty the future costs of such cleanup activities, capital expenditures or
operating costs for environmental compliance, the Company does not believe they will have a material effect on its
capital expenditures, earnings or competitive position.
Executive Officers
Following is a list of the executive officers of 3M, and their age, present position, the year elected to their present position
and other positions they have held during the past five years. No family relationships exist among any of the executive
officers named, nor is there any undisclosed arrangement or understanding pursuant to which any person was selected
as an officer. This information is presented as of the date of the 10-K filing (February 15, 2008).
Y
ear
Elected to
Present Other Positions
Name Age Present Position Position Held During 2003-2007
George W. Buckley 60 Chairman of the Board, President and 2005 Chairman and Chief Executive Officer,
Chief Executive Officer Brunswick Corporation, 2000-2005
Patrick D. Campbell 55 Senior Vice President and 2002
Chief Financial Officer
Joe E. Harlan 48 Executive Vice President, 2004 President and Chairman of the Board,
Electro and Communications Business Sumitomo 3M Limited, 2003-2004
Executive Vice President, Sumitomo
3M Limited, 2002-2003