Diversity paid off big time for 3M in 2003. Many other manufacturers had to limp along until the U.S. economy finally kicked into gear. Not 3M. Thanks to hot demand for its consumer-electronics components and respirators in Asia, as well as health-care products in the U.S., the St. Paul (Minn.) conglomerate had its best year ever. Net income leaped 22%, while sales rose 12%. Even more pleasing to investors: 3M shares ended 2003 near an all-time high. As of Feb. 27, shares had returned 46.9% over three years, a solid vote of confidence on the job McNerney has done since he took over and began steering 3M toward faster-growth markets. 3M just bumped up its 2004 forecasts, saying net income will jump at least 16.5% on a sales increase of 5% to 8%. The company is expanding by leaps and bounds in China, adding not only manufacturing facilities but transferring R&D and product-development work there as well. McNerney has also bolstered the balance sheet. Total debt shrank by $440 million in 2003, to $2.94 billion, while cash flow swelled by $781 million, to $3.77 billion.