Ladies and Gentlemen, thank you for standing by. And welcome to the 3M first quarter 2008 earnings conference call. During the presentation all participants will be in a listen-only mode. Afterwards you will be invited to participate in the question-and-answer session. [Operator Instructions] As a reminder this conference is being recorded, Thursday, April 24th, 2008. We would now like to turn the call over to 3M.

Good morning. This is Matt Ginter, head of Investor Relations for 3M. I'd like to welcome all investors and analysts to our first quarter 2008 business review. You will find this morning's presentation on our investor relations website at 3m.com. These slides will remain on the site, along with an audio replay of today's call for an extended period of time. Please take a moment to read the forward-looking-statements on Slide two. During this today's conference call, we will make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Item 1A, of our most recent forms 10-K, lists some of the most important risk factors that could cause actual results to differ from our predictions. I also wanted to mention that our annual investor debt meeting, which will be here in St. Paul, will take place on September 9th. Please hold the date and more details will follow. George Buckley, our CEO and Pat Campbell, our CFO will both make some formal comments today and then we will get to your questions. Today is a very busy day as many companies are reporting earnings, and I know you're all very busy. So we'll do our best to keep the call to about an hour. And you can help during the Q&A, by limiting yourself to one question and one follow-up, we'd appreciate it. This way our questions can be fully addressed. So we'd now go to slide number 3 and I will turn it over to George.

Thank you, very much, Matt. Good morning, everybody. Today I'll give you my views on the quarter, along with some comments on rest of the year. In an uncertain economic environment like the one that we are experiencing today, we are particularly blessed by the global presence in strong diverse portfolio that 3M has developed over the years. The investment we'd be making in new products, in acquisitions, and particularly in strengthening the core of 3M is paying off handsomely and its these factors which would allows us to do so well, even as we deal with the weak U.S. economy and face the challenges of our LCD based optical film business. So, and at the front, I should like to affirm our 2008 goal of EPS growth at 10% or more. The quarter was a tale of four principal factors. First, excellent performance in four of our six reporting segments; second, slowing U.S. growth as evidenced by slower performance in our consumer and office business; third, superb international performance; and fourth, continued slowing of and margin compression in the optical films business. Overall, we had good results, with sales up 9%, bolstered somewhat by high foreign exchange, and EPS up 8%. We maintain margins at or about 20% or better in all of our businesses, even as we can continue to invest in R&D, additional sales presence, and more efficient supply chain, and in acquisitions. It will surprise nobody that we saw consumer office segments slow in the first quarter and it finally mirrored the experiences seen by U.S. retailers and other suppliers into that market. But we've clearly been taking market share in many product categories. As companies in the U.S. cut back in banking, in airlines, in brokerages, and with the contraction in residential construction, people are…

Thanks George and good morning everyone. Please turn to Slide number five. All information in today's presentation will exclude special items. Recall that last year first quarter earnings per share of the $1.85 include net gains of $422 million or $0.57 per share from the sale of the company's branded pharmaceutical business in Europe, net of various other special items. Excluding special items in Q1 of 2007 earnings per share was $1.28. There were no special items in the first quarter of 2008. As George pointed out, we continued our trend of quarterly records for sales, operating income, and earnings per share in the first quarter. Sales were up 8.9% to $6.5 billion led by Industrial and Transportation, Safety, Security and Protection services, Health Care, and Electro and Communications. Local currency sales were up 3% in the quarter. Looking at the company geographically; internationally we drove broad-based growth, with double-digit sales growth in Europe, Latin America, Canada and Asia Pacific, excluding optical. Operating income was $1.5 billion, an increase of 3.6% over the same quarter last year, with four of the six business segments achieving double-digit operating income increases. Operating income margin was 23.2% as all six businesses delivered 20% or so plus margins in the quarter. First quarter earnings were $1.38 per share or an increase of 8%. Currency has gone in our favor for sometime now and in the first quarter it was no exception. We benefit perhaps more than your typical multinational because of our significant international footprint. Two thirds of our first quarter sales incurred outside of the U.S. with even larger percent of our profits. Currency added about six points to sales growth in the quarter and an estimated $0.07 to earnings per share. The earnings impact is indeed in estimate as it picks up…

[Operator instructions]. Your first question will come from the line of John Inch with Merrill Lynch.

Question on organic growth. You know the US down 2.8%, George or Pat what do you think the growth would have been if you folks had not been over the past few quarters putting in place your growth spending initiatives. I'm just, just curious how much you think your initiatives have driven this numbers but still kind of be ... going to be something that's going to come in later '08 or in '09?

John, I mean it's difficult to give you a precise answer to that question. But the new product vitality index that we mentioned is moving upwards about two points each year. So I think it's fair to say that, I mean it would be the impacted I don't know that I can give you a number. Matt you got anything recorded there.

Well just a minute George.

So it has been positive John. Obviously, but very difficult to give you a precise number. Can we sort of make an estimate and get back to you?

Oh yeah, for sure. And then just as a follow-up. I know that at the December 12th meeting, we had thrown out currency contribution for '08 of $0.05 to $0.15 and I think by far as Pat's comments, you know the $0.07 time is 428, but there is higher raw material costs and so forth. So it maybe it's $0.25, I guess my question is, that's 5% of the EPS contribution, looks pretty good. But how are we thinking about or how are you guys thinking about currency potentially moving the other way. I mean is that, is that between that and pension are those headwinds something that we need to kind of factor in here as you begin to look to '09. But ... for instance you feel like you have an optimum flex spending or other things to potentially offset what could invariably turn into some headwinds next year?

John, Pat here. First of all we never bank on either a foreign exchange or pension returns from a long-term planning perspective. We view those being a little more short-term in nature. So we plan the business more around kind of steady state operational basis. So what we try to do is when we have the benefits of foreign exchange and just to be clear I… it is a difficult number to give you hands on, I can give you a technically foreign exchange number, but I think you all know and aware there is other more macroeconomic impacts that affect business results volume and so forth that make it a little harder to come up with a good net number. We are definitely seeing on the commodity side some significant increases that we're trying to off course address through price increases and the like. So, what we're trying to do is while the currency is favorable for us, is to continue to invest in our businesses, so as currency does move, which eventually it well at some point in time that what we've done is we've got a better growth base in the rest of our businesses. So that's been our strategy.

Great, thank you.

Hey, John, John you still there.

Yeah, I'm here Matt.

This is matt, I want to clarify one thing, we live in this world of instant information. So, I have seen your initial report. For the benefit of everybody we had a benefit in corporate miscellaneous versus the same quarter of last year and I want to make it clear what that is. This year our pension expense is lower as we've told you to tune of about $0.02 to $0.03 interest the first quarter of this year and what we did is that whole $0.02 to $0.03 essentially is affecting corporate miscellaneous. The amount of pension expense we're charging off to our businesses is essentially the same. So that really accounts for that difference.

So Matt, what should we model as then the corporate number for the rest of the year, do you think, for the other quarters?

Something pretty similar.

Okay, positive number then or flattish?

Flattish.

Okay, thanks very much.

Yeah, thanks John.

Your next question will come from the line of Shannon O'Callaghan with Lehman Brothers.

Good morning guys.

Good morning Shannon.

A couple of the targets we didn't get updates on, I mean the 5% to 8% of organic growth for the year, are you still thinking that's achievable and Display and Graphics, given the tougher first quarter here, I mean there we were looking for mid-single digit organic and 24.5 to 25.5 on the margin. Do you have an updated view of those different targets?

Well Shannon I think in the current economic situation getting to 5% to 8% is a nice aspiration but probably unlikely. We're not throwing that away from where we want to be but I just think it's probably unrealistic in today's economic world and on top of that with the situation that we're in with Optical, just probably doesn't make that a realistic assessment. So in a word, you can be guaranteed that we are fighting for every piece of volume that we possibly can in today's economy but importantly, I guess Shannon, I want to make sure that you don't connect, we're saying we're going to give you a 10% plus earnings growth. Don't tie that to necessarily a 5% to 8% volume growth. We'll get there without having that 5% to 8% but that is clearly in our sights as what our objective is on a more of a steady state economic environment world and if you get outside the U.S., our international performance remains very, very, very strong. So that piece of the business, ex-Optical for a second, I would say that we're still performing at the levels that are consistent with that 5% to 8% range. Its really the U.S. impact and that's the Optical piece that is dragging us down at this point in time.

Another thing that Shannon, we talked about in the past. This is George, its a multiple of IPI [ph] growth and we seem to be well in the hunt for that. So, we are not slowing faster than anybody else even with the kind of head wins that we've talked about already this morning.

Well. I mean on IPI I mean, I've seen… I don't know what the actual number will come in at a... I guess in the first quarter but its not going to be 0.5% right or I mean organic growth is like 1.3% with pricing being another and the volume is a little different. But I mean you are not going to be at 2X IPR right?

That probably 1.5 of that order.

Okay. And the Display and Graphics margin target, what's the updated view on that?

Yeah. I guess Shannon, you kind of have a very good question there. Its pretty hard to look at Q1 being 21.5. I'm saying that our objective of 24.5 - 25.5 is a realistic one. I think the best way to think about that business is to assume that Q1 would be probably indicative of where the year will run.

So just then the last one is, to help me to sort of then put to the no change to the annual guidance in terms of margin, I mean Health Care looks like, obviously its coming in better. I mean do you… where are the other big offsets given? You already got a decent drag from display and now its going look worse. What are offsets to keep the overall year kind of flat up on to basis points on margins?

Well, when you look at it, and we are… industrial is good. First of all let's go back to what our margin expectation is. Our margin expectation for the year is 22.5 to 23.5, we ran 232 [ph] in the first year ... in the first quarter with optical or D&G really at 215 [ph]. So I think they are very consistent, that we can continue to perform at the company level where we say we are and then continue to bring D&G down business is somewhat like we ran here in the first quarter.

Okay, I leave it at that, thanks guys.

Thanks.

Your next question will come from the line of Scott Davis with Morgan Stanley.

Good morning, guys.

Good morning, Scott.

Good morning.

I wanted to approach the opposite of Shannon's questions in the outlier on the high side. I don't think it was a huge surprise at least for us, the rate of change in Display and Graphics was negative, but certainly a surprise that Health Care and Electro and Communications came in strong if they did. Are there any and lets just address maybe one at a time, but it wasn't clear in the presentation if there is any kind of timing issues that may have mix or some timing issues that may have benefited margins in the quarter. If there is something that's purely volume driven you know and you get any volume leverage maybe above and beyond what you had historically?

Scott, there is nothing in either segment that is unusual that you should take away that there was a common artificial impact on either one of those businesses. E&C just continues to perform very, very well. They've got a few businesses that are just absolutely doing gangbusters right now. They're actually at higher margins than what their average is, so that continues to hold them up and in really Health Care across the board ... I mean Health Care across the board is just performing very well, both geographically across all business segments. So there's really nothing, I would say is unusual in either one of those that Q1's would be an outlier of what the future is going to look like for us.

Hey, Scott its George here. We said very early in my tenure what we're going to do is take the old traditional core of 3M and invest it and make sure it was ... it remained strong, it became a base from which to build the rest of the growth platform. And what we're seeing now, certainly what we're seeing at this moment in time and is being progressively increasing and improving that in the past two years. We see ... and Pat actually mentioned two or three of these in his presentation. We've seen wonderful performance, improved performance from Abrasives, from the electrical markets division which is in the E&C segment that Pat just spoke about. We're seeing it in industrial tapes. We're seeing an improvement and resurgence in medical and the automotive aftermarket. And one of the businesses that was ... we were struggling with terribly, which was the personal care division which is the division that makes diaper tapes is another business which is turning around. So what I think is turning out to be true Scott, is the wisdom of investing in those businesses and bull walking those to make sure that we had a great platform to grow from. So there is no reason at this moment in time for us to believe unless end market conditions worsen dramatically. That we can't see continue to either improvements or at least steady performance from those businesses. And it's so broad based and in such a lot of the big businesses in the big divisions of 3M and that's why you end up with even dealing with this optical transition, why you end up with the good numbers that you do.

Got it and I want to go back and talk about Aearo a little bit. On the surface the acquisition looked a little expensive to us. It's tough to tell, it's a bit of a unique asset so it's hard to value from our perspective. But can you talk now that you've had a chance to close the deal and have a few weeks and you had a few months due diligence, I mean are there cost synergies, any other kind of strategic benefits above and beyond what you talked about on the last conference call?

Yes. I'll try to take and see if George has anything to add to it Scott. Based upon the feedback, the business team has had with them. I think they feel even better about the business, the opportunities, the very solid organization they have with there ... all the products they've got. Businesses continue to perform actually even above our short term expectations. So everything thus far has been very, very good. The integration planning has been just outstanding with them. So I can't say enough good about the relationship that we've had with the organization thus far and by all signals thus far its ... I would actually rate it probably a little bit better than we kind of thought when we first looked at it. And Scott I think the other thing is just keep, keep an eye on where others trade in that space. There has been another company sold, in that space that we ... just do your own assessment as to Aearo versus them.

They have been expensive enough.

So, you know

We actually saw both acquisitions were kind of expensive. We criticized the other company as well, so an equal opportunity critics here.

That's good for you. One last point that I felt, I've been traveling around internationally Scott. We tend to, when we do the modeling of these businesses. Pat and myself tend to be the very serious critics of synergies both in the cost area, but in particular in the sales area. In over many years of experience of these sorts of things, it's a place where company seems to consistently make mistakes. What seems to be transpiring though here in Aearo because they are relatively simpler products and they're so familiar and close to the kind of the OYGS [ph] core that we've had many, many years. There is a very high level comfort and being able to get those Aearo products into the international markets and drive sales in this. So and off course you can well imagine that Julie Bushman who runs that business, we have…Pat and I have set Julie some pretty tough targets and so I think that if this thing goes anywhere near as where we expect then we'll see better into the synergies, I'm not sure about back into the cost end yet, in the sales synergy, I mean.

Okay, thanks guys.

Your next question will come from the line of Jeff Sprague with Citigroup

Thanks good morning to everyone.

Good morning, Jeff.

Just a couple of quick once, you covered a lot of ground already, I didn't catch you, could you just give us your all in organic read on Europe in the quarter ex-currency, ex-deals?

Why don't you go to your next quarter and I will comeback to it, if that's okay Jeff.

Sure.

I've got it, it's 1.7% will the organic in Europe for the quarter, which is somehow yields…slower growth rate for them versus last year's first quarter and from the trend standpoint, I didn't talk about Easter, okay. It does affect them in more than Mediterranean part of the Europe. So we do expect second quarter will be kind of a little bit better. So I didn't want to get into kind of excuse game but I still feel very good about Europe. I think we have a eyes wide open in Europe to make sure that we don't see a slowing trend there but I know George's been there more recently than I have and we still feel very, very good about the programs that we have in Europe, the Central East Europe, Africa and Mid East continue to grow at double-digit rates. The storage [ph] that will be Western Europe over time, so we did see it slowing but I used to tell you guys that any wealth in Western Europe I've always viewed as being a positive, and to some degree I still kind of view that from a plan perspective. In many of our countries they've kind of proven me…kind of proved me wrong there and I'm glad they have. So I feel that we've got a solid plan in place there. But we are watchful as to how the economic condition is going to play out in the West

And then George just a little further elaboration on your declaration if you will that Optical has gone commodity, was that kind of a depth versus deepest type comment or is that a all-in kind of consumer preference comment? Can you just give us a little more color on kind of attachment rates and where you're staying with the mix and how the composition is shaking out?

Yeah I can do that Jeff. You recall it's a four segment business. It's the LCD TVs, the handhelds, the notebooks and monitors and essentially this particular story is really about LCD TVs. The handheld, attachment rates, monitor and notebook CR [ph] monitors, while they jump around a little bit have largely remained okay. At least I should say it's stable. And there hasn't been the same intense pricing pressure in those markets simply because the value proposition for somebody is high brightness films, its very strong because it held battery life. And the… so the whole, the whole game really is essentially down for the LCD TV market, Jeff. And you know the way that the bottom of that market has exploded. And of course the market in many respects is still… is still trying to find bottom, its trying to find that where is this ball is, the bill of material that he can get to with an acceptable performance for the…from a set for a customer. And if other consumer electronics commoditization are… give you a lead, what might happen is once the bottom is found at the lower end of the market, if you think about it as a sort of good, better, best, once the bottom of the pricing is the lower end of the market. Jeff its been found the bottom of the pricing, the top end of the market will be found and I think that there's likely going to be some, some re-contenting. There are some positives in the energy area for example, 3Ms films can tuck in the small television. A third of the energy usage in the bigger television more, but in the end that maybe not be replaceable. It'll sell you more televisions. But you might get the customers to make choices left and right on a sort of low energy versus a high energy set. So these things I think in along the run will help us. What we are also doing Jeff is putting a sampling of lot of inexpensive but still relative high performing diffusive the films into the markets. So we can supply that bottom end of the market and get some more leverage there. And so I think that still during the 2008 in summary Jeff, we are going to see more turbulence in that market as the set manufacturers in particular scramble for share and they are prepared for digital switch over and I don't know if it's fully commoditized yet Jeff, I suspect not, but I think this first bumpers totally will be in the worst bump.

Just quickly, could you just tell us what your dental growth actually was in the quarter?

Just a sec. Dental growth Jeff, was going to be in dollar terms its north of 10% on a local basis probably mid single digits.

Okay, thanks a lot guys.

Yeah, if I could just and added of your question was oral care or dental itself. Dental is Dental, Matt's got greater than double-digit, the orthodontic business was quite a bit stronger there at almost 25% growth in the orthodontic business part of that due to an acquisition we had but.

Combined oral care on an ex-currency basis probably around 7.

Thank you very much.

Thanks Jeff.

Your next question will come from the line of David Begleiter with Deutsche Bank.

Good morning.

Good morning David.

George and Pat, good performance in the industrial, but no operating leverage margins actually fell. Can you just comment or talk to that please?

Thanks Dave, because I actually thought they did…

Relatively well.

Very well, okay. Based upon ... having a low 20's margin in a mainstream industrial business I think is a very good performance. Our objective in that business is not to grow margins, as much as lets get to the top line growing. So they can keep the top line growing the way they have, keep margins the way they are I would be perfectly ... be totally happy with that model. Now I think you've heard from HC Shin, in the past that he's got a lot of focus on operational excellence to continue to drive productivity to get cost out reinvest back into the businesses. One of the things that does hurt industry a little bit from margin standpoint is we have made some acquisitions in that space that haven't been necessarily at the same margin level that some of our core businesses have so it takes a while to kind of build those profit rates up. So, but I'm not at all concerned with the level of margins within the industrial.

By the way also Dave, there one of the units suffers from commodity price increases more than anybody else. Consumer office is also ... everybody does but if you wanted to sort of pick on a couple that suffered most they are they are they.

Understood and thank you for the answer. One more thing George, you mentioned about optical films for being a good growth business. Referring to a new revised space not from last years base, correct?

Correct.

And what would that new revised base be do you think?

Well it's, as I jokingly say sometimes Dave prediction is very difficult especially when it concerns the future. The business is obviously shrinking Dave. It's mainly shrinking due to two things, some loss of attachment primarily in TV's and obviously price compression. So I think we're not fully through the transition yet Dave and if you've let me make that observation I made about a good growth business in the future let me make it from a new base that comes up in 2009.

Sounds good. Thank you very much

Thanks Dave

Your next question will come from the line of Deane Dray with Goldman Sachs. And Deane your line is open please go ahead.

Yes, can you hear me?

Yes.

Yes Deane.

Okay. I just want to go back to pension and FX for the quarter to make sure I have my math right and Pat you said $0.07 from FX this quarter and that was $0.02 to $0.03 from pension?

Yes. Deane, I do want to clarify. Okay, if I could. FX the way we calculate it, is if you just literally take rate differences on both transactions and translation and that's where you get the number. It does not pick up any of the other input related impacts of say a weaker dollar on commodity prices and alike. So it is probably an exaggerated example of what the real impact is on the bottom line.

And how about your assumptions for, for the year when we look at that 10% plus where would FX and pension combine represent of that 10%?

Yeah. I think…

Based what you know today?

I mean pension will be give or take $0.10, FX is probably in the 25, 30 range. Who knows depending on where rates end up? So that's purely just taking quarter end rates and then assuming they stay way for the rest of the year which I guess your crystal ball is probably as good as mine on that one.

What are you using for your Euro exchange?

I think its 158 at quarter end. So that's what we would have extrapolated in our last forecast.

Okay. And then just to recheck on optical, I have never kind of beaten this one. But the assumption for the absolute EBIT decline for the year as of last quarter would be down $50 million to $150 million. And you did, you were down $110 million this quarter. Are you going to set a new range for that or George I think you are saying you really want have a sense for this until 2009?

Correct.

Well, Deane, I guess let me try to get a year. I think where you come from is December we kind of gave you a range for Optical. I think that's where you are coming from. And in the quarter here profits kind of halved okay, in that business. So we would expect that, that trend from a year-over-year basis, will probably continue to play out for the rest of the year.

The same trend from the first quarter?

Yes.

Yes, so you can expect similar downtrends second quarter year-over-year is what that means Deane.

And I… if I was able to draw it for you Deane is, that business has been… of course profitability has been… being reduced okay, overtime so even during '07 if I look at Q1 to Q4 it kind of went down. But, so what we're saying is that, what went down here in the first quarter that delta will probably carry through most of the rest of year, year-over-year. It could be by the end of the year it starts to kind of tail off a little bit, but that's our best forecast.

Okay. And then capacity expansion this year, just a quick update on; there were 19 new plans, where does that stand and I see you're also cutting CapEx. Is that related at all?

That's not specifically I kind of view of that $100 million reduction kind of almost a little bit in the round, it does reflect kind of the economic situation we are in and so forth, as because if your growth rates do slow a little bit because of economic conditions, there are some things that we possibly were to looking at relative to capacity in these and so forth. I think just maybe push him off a little bit. So that's more a tinkering okay, at this point in time. But on the plans, if I recall the statistics right Deane, we… out of the 19, we are schedule to have about 13 of those up and running here by the end of the first quarter. The one that, I think we've talked to you about in the past, is Russia. Russia is the plant that we thought we'd have up and running right now. We still are struggling a little bit getting final occupancy permit for that facility.

Just that environment thing,

And that's just the environment of Russia. So that's nothing I would say from a operational execution standpoint that we're all concerned on. Everything appears to be on track.

In fact what's actually been happening Deane is the plants have been coming in generally faster and generally at a lower cost than we thought.

Great, thank you

Thanks Deane.

Your next question will come from the line of Stephen Tusa with JPMorgan

Hi Good Morning.

Just a quick one on the dental side, are you guys telling anything about worries about the economy and the impact on growth there?

I think it would be fair to say that there are some discretionary decisions that customers make about, when they have a dental work done and as people get more and more concerned about discretionary income, it could affect people's buying behavior. So I think it would be fare to say that there has been some feedback that may be dentists have started to see, some slowing in discretionary treatments and so forth. My comment a little bit is that it's hard to get into dentist's at times as well, especially orthodontist, okay. So does it really impact you that much but I think it would be fair to say that in a slowing economy, you will see some impact on discretionary dental care Steve.

Right, and just on the optical side, I'd hate to be this one, wish we could talk about something else but it was…

So do we.

But it was really bad in the quarter, and when you think about… you brought us out to the meeting in Minnesota and also in New York and you kind of walked through and I think, made people feel comfortable that you had, at least hands around… a fence around the situation to some degree and you basically hit your declined target in the first quarter only a few months after you did that kind of bottoms-up review. I mean, what's getting missed here between… I know it's a totally dynamic market and its a free fall, but what's getting missed here from the ground level up to the executive office, where you guys were just having such a hard time on visibility, totally acknowledging that this is a very unusual circumstance?

What was happening in the end mark is, Steve, the set managers have said this a little bit earlier, the set managers make us scrambling for share. That sort of there is a reordering of the powerbase in the marketplace, the leverage has swung more to the set manufacturers than it was previously in the panel manufacturers or even the upstream manufacturers and those dynamics are extraordinarily difficult to forecast accurately, Steve, they just are. All I'll say to you, I'll pull you back you to the other position which is, you have to look at 3M in its total context. In 3M's total context, the core of 3M has done so very, very well. It was able to overcome and surpass the challenges in Optical roundly. So does that make us feel better about how to predict accurately what's going in Optical world? No of course not. But what it does do is to make us feel a little bit happy about what we can predict in 3M in total. So when things begin to fall in a marketplace when they have these rapid changes Steve. It's very difficult to know is the trajectory down 25% a year, down 50% a year. The end game era can be significantly worse with one such set side of assumptions versus another. All you can do is, go to your customers try to get the lead information, try to bring products that they want to mitigate some of these changes, and bring value to the customer. I started also by saying this morning, this is a business that we enjoyed the upside and is now transitioning it appears to be a business very much more like the balance of 3M and that's what we currently expect.

Right, and then just lastly on the 4X [ph] contribution to get to your 10% growth, it was I guess $0.07 year-over-year. But doesn't the comp get a little bit tougher as you move in the half such as taking the $0.07 and multiplying that by four. I mean, that wouldn't seem to be the right math on that. And I'm just curios, because this is kind of a key aspect now if you guys are getting to your annual target. I mean, doesn't that EPS impact get a little bit lighter as you move through the year?

Yeah, Steve, you are right. Exchange rate started to move okay, more towards the back end of the year. So it's not as simple as its taking seven okay times four...

So there's something else in the 25 to 30 range?

No, it also is a, we also have to look at where our hedging situation is, okay. I'd remind you Steve that we hedged about half of our exposure. So you're kind of on a year lag for about half of it. So on some of our hedges, when you kind of look at the back half of the year or kind of on a year-over-year basis, we'll be probably better off on those than we were in '07. So that's kind of, what kind of probably evens it out a little bit.

Okay, that's great. Thanks a lot.

Well in the interest of time here we're going to have to close. So thank you very much everybody for listening and we appreciate it very much and we look forward to continued success through 2008. Cheers everybody. Thanks.

Ladies and Gentlemen that does conclude our conference for today. You may all disconnect and thank you for participating.