3m acquisition of aearo company

Growing 3M’s Personal Protection Franchise

3M Company Acquisition Of Aearo CompanyNovember 15, 2007

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This presentation contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) about 3M’s financial results and estimates and business prospects 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 withany 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 its subsequent Quarterly Reports on Form 10-Q (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 presentation is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this presentation as a result of new information or future events or

developments. The information contained in this presentation is as of the date indicated. Neither 3M nor Aearo assumes any obligation to update any forward-looking statements contained in this presentation as a result of new

information or future events or developments.

Forward-Looking Statements

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3M Safety, Security And Protection ServicesStrategic Roadmap

Cons

umer

sGo

vern

men

ts

Cust

omer

s

Busin

esse

s

Protection - AssetsSecurity - ProcessesSafety - People

CPP

IMPD

Bldg &Com. Svcs

Security Systems

T&T EBOT&T EBO

ILLUSTRATIVE

EBO & Special initiatives

Global focus

Adjacencies/M&A

Core growth

Occup. Health &Environmental

Safety

Mining

Track & Trace

Our Dream: Achieve $10B in sales from $3B today

- Pomp (2006) - Aerion (2006)- SPSL (2006) - E. Wood (2007)- Rochford Thompson (2007)

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$1.9 – $2.2

Visibility & Protective Clothing

$7.0 - $8.5$1.0 - $1.2$2.0 – $2.2$0.9 -$1.2$3.5 - $4.0

Hand, Foot & BodyFallHead, Eye & FaceHearingRespiratory

Our Dream In Safety: Multi-Category LeadershipCurrent leadershipMinimal sales today

Building toward leadership in multiplePersonal Protective Equipment categories

#1 share today #1 share today

Personal Protective Equipment markets$Billions

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Aearo Adds Market Strength In Three Important Personal Protective Equipment Categories

Current leadershipMinimal sales today

Personal Protective Equipment markets$Billions

#1 #2 Developing

$1.9 – $2.2

Visibility & Protective Clothing

$7.0 - $8.5$1.0 - $1.2$2.0 – $2.2$0.9 -$1.2$3.5 - $4.0

Hand, Foot & BodyFallHead, Eye & FaceHearingRespiratory

#1 share today #1 share today

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Aearo Is A Leading Supplier Of Personal Protective Equipment & Specialty Composites

• Specialty materials for managing noise, vibration, shock and thermal• Designed into customer products pre-launch• Strongest in electronics, trucking and aerospace industries

Specialty composites

• #3 position in North America • Harness and anchor systems for fall protection• Focused on construction and consumer markets in U.S.

Fall protection

• Maintenance free and elastomeric face piece respirators• Strong presence in consumer markets

Respiratory protection

• #2 position in North America and Europe• Industrial and consumer safety eyewear • Strong presence in consumer, sportsman and industrial markets

Eye protection

• #1 position in North America and Europe• Investments in wireless, ANR, bone conduction technology• Strong presence in industrial, military and aerospace markets

Active hearing protection

• #1 position in North America and Europe• Disposable and reusable plugs and muffs• Strong positions in industrial and construction markets

Passive hearing protection

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3M’s Global Presence Provides a Strong Foundation for Aearo’s Growth

3M OH&ES Sales

APAC

EuropeU.S.

LACAPAC

Europe

U.S.

LAC

Aearo Sales

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Aearo’s Strength Is Primarily In The U.S. & Western Europe

– Hearing– Communications– Eyewear– Fall protection– Other safety– Specialty Composites




Aearo today: limited international coverage and infrastructure

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3M’s Global Infrastructure Will Significantly Expand Aearo’s Business





Aearo + 3M: broad global coverage across multiple product lines

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3M + Aearo = Global Leader In Personal Protective Equipment

Other

Hearing Protection

Head, Eye, Face

Protection

Respiratory Protection

VisibilityProtection

2006: 3M 2012: 3M + Aearo

Specialty Composite

Fall Protection

Other

Visibility Protection

Respiratory Protection

Head, Eye, Face

ProtectionHearing

Protection

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316363

423462

508

818

56 65 83 91 107

213

2003 2004 2005 2006 2007 2012

Aearo Has A History Of Delivering Strong Results

17.6% 17.8% 19.5%

17.6% CAGR

Adj. EBITDAto sales*

SalesAdj. EBITDA

19.8%

$Millions

21.1%

10.0% CAGR

14.8% CAGR

26.0%

*Excludes management fees and other acquisition costs.

Local Currency10% CAGR

Total Growth 12.6% CAGR

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Multiple Sources Of Synergies

• Sales growth synergies• Leveraging 3M global infrastructure – Asia Pacific, Latin America, Central East Europe,

Russia• Market synergies – military, commercial construction, oil and gas and mining

• Cost synergies• ~1% reduction of combined Aearo/3M cost base, or approximately $20 million per year• Redundant structure and corporate functions• Sourcing and Lean Six Sigma

• Technology synergies• Integrating respiratory, hearing and communications technologies into full-face and head

protection gear• Thermal and acoustic/vibration absorption• Regulatory leadership in respiratory and hearing protection

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Summary Of Acquisition Terms

Deal Structure Cash for StockPurchase Price $1,200Expected Closing Date Q1 2008

Transaction SummarySales 2.1EBITDA 9.8(based on 08 fiscal year forecast)

Purchase Price Multiples

Financial summary$Millions

FinancingCombination of existing cash and debt

Closing ConditionsRegulatory approvalsOther customary conditions

Earnings ImpactEPS neutral in 2008 including one-time costs$0.03 of one-time costs in 1H 2008

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Summary

• 3M’s Occupational Health & Environmental Safety Division is a global leader in respiratory protection and a cornerstone of our Safety, Security and Protection Services Business

• Aearo is a leader in hearing protection and vision protection, and has a growing capability in fall protection; 3M does not have strong positions in these product groups

• Acquisition of Aearo:– Creates a clear global leader in personal protective equipment products, playing across

multiple industries– Provides access to higher growth product categories– Expands and deepens 3M capabilities in multiple technologies, and offerings in multiple

important product areas– Represents significant opportunities in sales and cost synergies

A perfect opportunity to expand 3M’s personal safety business

3m acquisition of aearo company

Economy & Finance