## Table 0 ##
The above income and earnings per share information exclude a cumulative effect of accounting change in 2005 ($35 million, or 5 cents per diluted share).
Refer to Note 1 for more detail.2007 results included net gains that increased operating income by $681 million and net income by $448 million.2007 included gains related to the sale of businesses ($849 million pre-tax, $550 million after-tax) and a gain on sale of real estate ($52 million pre-tax, $37 million after-tax), which were partially offset by increases in environmental liabilities ($134 million pre-tax, $83 million after-tax), restructuring actions ($41 million pre-tax, $27 million after-tax), and other exit activities ($45 million pre-tax, $29 million after-tax).2006 results included net gains that increased operating income by $523 million and net income by $438 million.2006 included net benefits from gains related to the sale of certain portions of 3M’s branded pharmaceuticals business ($1.074 billion pre-tax, $674 million after-tax) and favorable income tax adjustments ($149 million), which were partially offset by restructuring actions ($403 million pre-tax, $257 million after-tax), acquired in-process research and development expenses ($95 million pre-tax and after-tax), settlement costs of a previously disclosed antitrust class action ($40 million pre-tax, $25 million after-tax), and environmental obligations related to the pharmaceuticals business ($13 million pre-tax, $8 million after-tax).2005 results included charges that reduced net income by $75 million.
This related to a tax liability resulting from 3M’s reinvestment of approximately $1.7 billion of foreign earnings in the United States pursuant to the repatriation provisions of the American Jobs Creation Act of 2004.2003 results included charges related to an adverse ruling in a lawsuit filed against 3M in 1997 by LePage’s Inc.  that reduced operating income by $93 million ($58 million after tax).
Research, Development and Related Expenses: Research, development and related expenses (R&D) as a percent of net sales decreased 1.0 percentage point in 2007 when compared to 2006, as expenses incurred in 2006 in the Company’s now-divested R&D-intensive Pharmaceuticals business did not repeat in 2007.
Non-pharmaceutical ongoing R&D expenses, after adjusting for the following items, were up approximately 11% in dollars, as the Company continued to aggressively invest in future technologies and growth opportunities.2006 spending included a $95 million in-process research and development charge (discussed in Note 2) and $75 million in restructuring actions (Note 4), which increased 2006 R&D as a percent of sales by 0.7 percentage points.
In dollars, R&D spending decreased $154 million when comparing 2007 to 2006, with the change in restructuring and other items year-on-year decreasing R&D by $174 million, 2006 pharmaceutical SG&A spending decreasing $120 million and other R&D spending increasing $140 million, or approximately 11% in dollars, reflecting 3M’s continuing commitment to fund future growth for the Company.
R&D increased as a percent of sales by 0.6 of a percentage point, or $248 million, when comparing 2006 to 2005.
The 2006 spending included a $95 million in-process research and development charge (discussed in Note 2) and $75 million in restructuring actions (Note 4).
Other spending increased approximately $78 million, representing an increase of approximately 6% compared with 2005.
Gain on Sale of Businesses: In January 2007, 3M completed the sale of its global branded pharmaceuticals business in Europe to Meda AB.3M received proceeds of $817 million for this transaction and recognized, net of assets sold, a pre-tax gain of $781 million in 2007 (recorded in the Health Care segment).
In June 2007, 3M completed the sale of its Opticom Priority Control Systems and Canoga Traffic Detection businesses to TorQuest Partners Inc. , a Toronto-based investment firm.3M received proceeds of $80 million for this transaction and recognized, net of assets sold, transaction and other costs, a pre-tax gain of $68 million (recorded in the Display and Graphics segment) in 2007.
In December 2006, 3M completed the sale of its global branded pharmaceuticals businesses in the United States, Canada, and Latin America region and the Asia Pacific region, including Australia and South Africa.3M received proceeds of $1.209 billion for these transactions and recognized a pre-tax gain on sale of $1.074 billion in 2006 (recorded in the Health Care segment).
For more detail, refer to Note 2.
Operating Income: 3M uses operating income as one of its primary business segment performance measurement tools.
Operating income margins over the past several years have been in excess of 22%, helped by solid sales growth and an ongoing strong commitment to maintaining operational discipline throughout 3M’s global operations.
Operating income margins of 25.3% in 2007 were positively impacted by 2.8 percentage points ($681 million) from the gain on sale of businesses and real estate, net of environmental liabilities, restructuring and other exit activities.
Operating income margins of 24.8% for 2006 were positively impacted by 2.2 percentage points ($523 million) from the gain on sale of portions of the pharmaceuticals business, net of restructuring and other actions.
Adjusting for the preceding items, operating income margins in 2007 were similar to 2006.
Interest Expense and Income:
## Table 1 ##
Interest Expense: Interest expense increased year-on-year in both 2007 and 2006, primarily due to higher average debt balances and higher interest rates.
Interest Income: Interest income increased in 2007 due to higher average cash, cash equivalent and marketable securities balances and higher interest rates.
Interest income was lower in 2006, with lower average cash, cash equivalent and marketable securities balances partially offset by higher interest rates.
FINANCIAL INSTRUMENTS The Company enters into contractual derivative arrangements in the ordinary course of business to manage foreign currency exposure, interest rate risks and commodity price risks.
A financial risk management committee, composed of senior management, provides oversight for risk management and derivative activities.
This committee determines the Company’s financial risk policies and objectives, and provides guidelines for derivative instrument utilization.
This committee also establishes procedures for control and valuation, risk analysis, counterparty credit approval, and ongoing monitoring and reporting.
The Company enters into foreign exchange forward contracts, options and swaps to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies and certain intercompany financing transactions.
The Company manages interest rate risks using a mix of fixed and floating rate debt.
To help manage borrowing costs, the Company may enter into interest rate swaps.
Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount.
The Company manages commodity price risks through negotiated supply contracts, price protection agreements and forward physical contracts.
A Monte Carlo simulation technique was used to test the Company’s exposure to changes in currency and interest rates and assess the risk of loss or benefit in after-tax earnings of financial instruments, derivatives and underlying exposures outstanding at December 31, 2007.
The model (third-party bank dataset) used a 95% confidence level over a 12-month time horizon.
The model used analyzed 17 currencies, interest rates related to three currencies, and five commodities, but does not purport to represent what actually will be experienced by the Company.
This model does not include certain hedge transactions, because the Company believes their inclusion would not materially impact the results.
The following table summarizes the possible adverse and positive impacts to after-tax earnings related to these exposures.
## Table 2 ##
The global exposures related to purchased components and materials are such that a 1% price change would result in a pre-tax cost or savings of approximately $60 million per year.
The global energy exposure is such that a 10% price change would result in a pre-tax cost or savings of approximately $38 million per year.
Derivative instruments are used to hedge approximately 1% of the purchased components and materials exposure and are used to hedge approximately 10% of this energy exposure.
FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
The Company may also make forward-looking statements in other reports filed with the Securities and Exchange Commission, in materials delivered to stockholders and in press releases.
In addition, the Company’s representatives may from time to time make oral forward-looking statements.
Forward-looking statements relate to future events and typically address the Company’s expected future business and financial performance.
Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other words and terms of similar meaning, typically identify such forwardlooking statements.
In particular, these include statements about the Company’s strategy for growth, product development, market position, future performance or results of current or anticipated products, interest rates, foreign exchange rates, financial results, and the outcome of contingencies, such as legal proceedings.
The Company assumes no obligation to update or revise any forward-looking statements.
Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties.
Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors.
Discussion of these factors is incorporated by reference from Part I, Item 1A, “Risk Factors,” of this document, and should be considered an integral part of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.
”
11) In October 2007, 3M (Industrial and Transportation Business) purchased 100 percent of the outstanding shares of Venture Tape Corp.  and certain related entities, a global provider of pressure sensitive adhesive tapes based in Rockland, Mass.12) In October 2007, 3M (Display and Graphics Business) purchased certain assets of Macroworx Media Pvt Ltd. , a software company that specializes in the design and development of digital signage solutions based in Bangalore, India.13) In October 2007, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Lingualcare Inc. , a Dallas-based orthodontic technology and services company offering the iBraces system, a customized, lingual orthodontic solution.14) In November 2007, 3M (Industrial and Transportation Business) purchased certain assets of Standard Abrasives, a manufacturer of coated abrasive specialties and non-woven abrasive products for the metalworking industry headquartered in Simi Valley, Ca.15) In November 2007, 3M (Industrial and Transportation Business) purchased 100 percent of the outstanding shares of Unifam Sp.
z o. o. , a manufacturer of cut-off wheels, depressed center grinding wheels and flap discs based in Poland.16) In November 2007, 3M (Industrial and Transportation Business) purchased certain assets of Bondo Corp. , a manufacturer of auto body repair products for the automotive aftermarket and various other professional and consumer applications based in Atlanta, Ga.
In addition to the business combinations above, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations.
These transactions are largely reflected as additional asset purchase and investment activity.
Purchased identifiable intangible assets for the 16 business combinations closed during the twelve months ended December 31, 2007 totaled $124 million and will be amortized on a straight-line basis over lives ranging from 2 to 10 years (weighted-average life of six years).
In 2007 and 2006, pro forma information related to acquisitions was not included because the impact on the Company’s consolidated results of operations was not considered to be material.
There were no material in-process research and development charges associated with 2007, while 2006 included $95 million in charges for the Brontes Technologies Inc.  acquisition.
The purchase price allocation of certain 2007 business combinations is considered preliminary.
The impact on the Consolidated Balance Sheet of the purchase price allocations related to acquisitions and adjustments relative to other acquisitions within the allocation period follow:

<table><tr><td> (Dollars in millions, except per share amounts)</td><td> 2007</td><td> 2006</td><td> 2005</td><td> 2004</td><td> 2003</td></tr><tr><td>Years ended December 31:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net sales</td><td>$24,462</td><td>$22,923</td><td>$21,167</td><td>$20,011</td><td>$18,232</td></tr><tr><td>Income before cumulative effect of accounting change</td><td> 4,096</td><td>3,851</td><td>3,146</td><td>2,841</td><td>2,286</td></tr><tr><td>Per share of common stock:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income before cumulative effect of accounting change — basic</td><td> 5.70</td><td>5.15</td><td>4.11</td><td>3.64</td><td>2.92</td></tr><tr><td>Income before cumulative effect of accounting change — diluted</td><td> 5.60</td><td>5.06</td><td>4.03</td><td>3.56</td><td>2.88</td></tr><tr><td>Cash dividends declared and paid</td><td> 1.92</td><td>1.84</td><td>1.68</td><td>1.44</td><td>1.32</td></tr><tr><td>At December 31:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$24,694</td><td>$21,294</td><td>$20,541</td><td>$20,723</td><td>$17,612</td></tr><tr><td>Long-term debt (excluding portion due within one year) and long-term capital lease obligations</td><td> 4,088</td><td>1,112</td><td>1,368</td><td>798</td><td>1,805</td></tr></table>
<table><tr><td>(Millions)</td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>Interest expense</td><td>$210</td><td>$122</td><td>$82</td></tr><tr><td>Interest income</td><td>-132</td><td>-51</td><td>-56</td></tr><tr><td>Total</td><td>$78</td><td>$71</td><td>$26</td></tr></table>
<table><tr><td> (Millions)</td><td colspan="2">Adverse impact on after-tax earnings</td><td colspan="2"> Positive impact on  after-tax earnings</td></tr><tr><td> </td><td>2007</td><td>2006</td><td> 2007</td><td> 2006</td></tr><tr><td>Foreign exchange rates</td><td>$-54</td><td>$-56</td><td>$57</td><td>$61</td></tr><tr><td>Interest rates</td><td>-13</td><td>-15</td><td> 15</td><td>17</td></tr><tr><td>Commodity rates</td><td>-3</td><td>-6</td><td> 2</td><td>5</td></tr></table>

Question: What's the growth rate of Income before cumulative effect of accounting change in 2006 ended December 31?