3M 2006 Annual Report Download - page 100

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seeks unspecified damages for personal injuries allegedly caused by the plaintiffs¶H[SRVXUHWRFKHPLFDOVPLJUDWLQJIURP
$&0(%DUUHO¶VGUXPUHFRQGLWLRQLQJRSHUDWLRQV. The plaintiffs also assert that a class should be certified on behalf of all
persons similarly situated. A separate wrongful death lawsuit was filed in the Circuit Court of Cook County, Illinois,
against 3M and a number of other companies on behalf of the estate and family of a person who worked at the Cook
County Juvenile Detention Center in the vicinity of the ACME Barrel facility. The lawsuit alleges unspecified damages
IURPSHUVRQDOLQMXULHVDQGGHDWKDOOHJHGO\FDXVHGE\H[SRVXUHWRFKHPLFDOVPLJUDWLQJIURP$&0(%DUUHO¶VGUXP
reconditioning operations.
In the second quarter of 2006, the New Jersey Department of Environmental Protection served a lawsuit that was filed in
New Jersey state court against the Company and several other companies seeking cleanup and removal costs and
damages to natural resources allegedly caused by the discharge of hazardous substances from a former disposal site in
New Jersey. The defendants removed the case to federal court.
Accrued Liabilities and Insurance Receivables Related to Legal Proceedings
The Company complies with the requirements of Statement of Financial AccRXQWLQJ6WDQGDUGV1R³$FFRXQWLQJIRU
&RQWLQJHQFLHV´DQGUHODWHGJXLGDQFHDQGUHFRUGVOLDELOLWLHVIRr legal proceedings in those instances where it can
reasonably estimate the amount of the loss and where liability is probable. Where the reasonable estimate of the
probable loss is a range, the Company records the most likely estimate of the loss, or the low end of the range if there is
no one best estimate. The Company either discloses the amRXQWRIDSRVVLEOHORVVRUUDQJHRIORVVLQH[FHVVRI
established reserves if estimable, or states that such an estimate cannot be made. For those insured matters where the
Company has taken a reserve, the Company also records receivables for the amountRILQVXUDQFHWKDWLWH[SHFWVWR
UHFRYHUXQGHUWKH&RPSDQ\¶VLQVXUDQFHSURJUDP)RUWKRVe insured matters where the Company has not taken a
reserve because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company
KDVLQFXUUHGDQH[SHQVHLQGHIHQGLQJLWVHOIWKH&RPSDQ\UHFRUGVreceivables for the amount of LQVXUDQFHWKDWLWH[SHFWV
WRUHFRYHUIRUWKHH[SHQVHLQFXUUHG7KH&RPSDQ\GLVFORVHV significant legal proceedings even where liability is not
probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable
possibility that a loss may be incurred.
Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be
no certainty that the Company may not ulWLPDWHO\LQFXUFKDUJHVLQH[FHVVRISUesently recorded liabilities. A future
adverse ruling, settlement, or unfavorable development could result in future charges that could have a material adverse
HIIHFWRQWKH&RPSDQ\¶VUHVXOWVRIRSHUDWLRQVRUFDVKIORZs in the period in which they are recorded. The Company
currently believes that such future charges, if any, would not have a material adverse effect on the consolidated financial
position of the Company, taking into account its significDQWDYDLODEOHLQVXUDQFHFRYHUDJH%DVHGRQH[SHULHQFHDQG
developments, the Company periodically UHH[DPLQHVLWVHVWLPDWHVRISUREDEOHOLDELOLWLHVDQGDVVRFLDWHGH[SHQVHVDQG
receivables, and whether it is able to estimate a liability previously determined to be not estimable and/or not probable.
Where appropriate, the Company makes additions to or adjustments of its estimated liabilities. As a result, the current
estimates of the potential impact on the &RPSDQ\¶VFRQVROLGDWHGILQDQFLDOSRVLWLRQ results of operations and cash flows
for the legal proceedings and claims pending against the Company could change in the future.
The Company estimates insurance receivables based on an analysLVRILWVQXPHURXVSROLFLHVLQFOXGLQJWKHLUH[FOXVLRQV
SHUWLQHQWFDVHODZLQWHUSUHWLQJFRPSDUDEOHSROLFLHVLWVH[SHUience with similar claims, and assessment of the nature of
the claim, and records an amount it has concluded is likely to be recovered.
The following table shows the major categories of on-going litigation, environmental remediation and other liabilities (as
defined below) for which the Company has been able to estimate its probable liability and for which the Company has
taken reserves and the related insurance receivables:
  
At December 31
(Millions) 2006 2005 2004
Breast implant liabilities $ 4 $ 7 $ 11
Breast implant receivables 93 130 278
Respirator mask/asbestos liabilities 181 210 248
Respirator mask/asbestos receivables 380 447 464
Environmental remediation liabilities 44 30 39
Environmental remediation receivables 15 15 16
Other liabilities 14 8 ±