3M 2008 Annual Report Download - page 102

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96
The weighted-average fair value per option granted during 2008, 2007 and 2006 was $11.06, $12.24 and $11.51,
respectively. The fair value of GESPP options was based on the 15% purchase price discount. The Company
recognized compensation expense for GESSP options of $18 million in both 2008 and 2007, and $19 million in 2006.
NOTE 17. 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
focuses 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.
The net sales and operating income amounts presented herein reflect the impact of all of the preceding changes for
all periods presented. Changes in assets, depreciation and amortization, and capital expenditure amounts were not
material and have not been revised.
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 segment; Health Care segment; Safety, Security and Protection Services segment; Consumer and
Office segment; Display and Graphics segment; and Electro and Communications segment. 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. Certain small businesses and lab-
sponsored products, as well as various corporate assets and expenses, are not attributed to the business segments.
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 and other financial
information shown. The allocations resulting from the shared utilization of assets are not necessarily indicative of the
underlying activity for segment assets, depreciation and amortization, and capital expenditures.
Business Segment Products
Business Segment Major Products
Industrial and Transportation
Tapes, coated and nonwoven abrasives, adhesives, specialty materials, filtration
products, closures for disposable diapers, automotive components, abrasion-
resistant films, structural adhesives and paint finishing and detailing products
Health Care
Medical and surgical supplies, skin health and infection prevention products,
pharmaceuticals (sold in December 2006 and January 2007), drug delivery
systems, dental and orthodontic products, health information systems and
microbiology products
Safety, Security and Protection
Services
Personal protection products, safety and security products, energy control
products, commercial cleaning and protection products, floor matting, roofing
granules for asphalt shingles, and Track and Trace products, such as library
patron self-checkout systems (supply chain execution software solutions sold in
June 2008)
Consumer and Office
Sponges, scouring pads, high-performance cloths, consumer and office tapes,
repositionable notes, carpet and fabric protectors, construction and home
improvement products, home care products, protective material products and
consumer health care products