3M 2006 Annual Report Download - page 87

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to pay the redemption purchase price in cash and/or common stock; however, if redemption occurs, the Company has
the intent and ability to settle this debt security in cash. The conditions for conversion have never been met;
DFFRUGLQJO\WKHUHKDVEHHQQRLPSDFWRQ0¶VGLOXWHGearnings per share. For a discussion of accounting
pronouncements that will affect accounting treatment for the Convertible Notes, refer to Note 1 for discussion of EITF
,VVXH1R³7KH(IIHFWRI&RQWingently Convertible Debt on Diluted (DUQLQJVSHU6KDUH´DQGSURSRVHG6)$6
1R5³(DUQLQJVSHU6KDUH´
,Q'HFHPEHUWKH&RPSDQ\¶VPLOOLRQRIGHDOHUUHPDrketable securities were remarketed for one year. They
ZHUHUHLVVXHGZLWKDIL[HGFRXSRQUDWHRI7KHVHVHFXULties, which are classified as current portion of long-term
debt, were issued in December 2000. The remarketable securities can be remarketed annually, at the option of the
dealer, for a year each time, with a final maturity date of December 2010.
NOTE 11. Pension and Postretirement Benefit Plans
3M has various company-sponsored retirement plans covering substantially all U.S. employees and many employees
outside the United States. Pension benefits associated with these plans generDOO\DUHEDVHGRQHDFKSDUWLFLSDQW¶V
years of service, compensation, and age at retirement or termination. In addition to providing pension benefits, the
Company provides certain postretirement health care and life insurance benefits for substantially all of its U.S.
employees who reach retirement age while employed by the Company. Most international employees and retirees are
covered by government health care programs. The cost of company-provided postretirement health care plans for
international employees is not material and is combined with U.S. amounts.
7KH&RPSDQ\¶VSHQVLRQIXQGLQJSROLF\LVWRGHSRVLWZLWKLndependent trustees amounts allowable by law. Trust funds
and deposits with insurance companies are maintained to provide pension benefits to plan participants and their
beneficiaries. There are no plan assets in the non-qualified plan due to its nature. For its U.S. postretirement health
care and life insurance benefit plans, the Company has set aside amounts at least equal to annual benefit payments
with an independent trustee.
The Company completed the acquisition of CUNO during tKHWKLUGTXDUWHURI&812KDVVHYHUDO86SODQVDQG
an international pension plan. The U.S. plans had a coPELQHGSURMHFWHGEHQHILWREOLJDWLRQRIPLOOLRQDQGSODQ
DVVHWVRIPLOOLRQDVRI$XJXVW7KHLQWHUnational pension plan had a projected benefit obligation of
PLOOLRQDQGSODQDVVHWVRIPLOOLRQDVRI$XJXVW7KHVHSODQVDUHLQFOXGHGLQWKHEDODQFHVRIWKH
appropriate U.S. and international categories in the tables that follow.
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requirements for defined benefit pension plans by subjectiQJGHILQHGEHQHILWSODQVWRRIWKHFXUUHQWOLDELOLW\
funding target. Defined benefit plans with a funding status ofOHVVWKDQRIWKHFXUUHQW liability are defined as being
DWULVN7KH33$LVHIIHFWLYHIRUWKHSODQ\HDU0VU.S. qualified defined benefit plans are funded in excess of
DQGWKHUHIRUHWKHFRPSDQ\H[SHFWVWhat the plans will not be subject to the "at risk" funding requirements of the
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,Q6HSWHPEHUWKH)$6%LVVXHG6)$61R³(PSOR\HUV¶$FFRXQWLQJIRU'HILQHG%HQHILW3HQVLRQDQG2WKHU
3RVWUHWLUHPHQW3ODQVDQDPHQGPHQWRI)$6%6WDWHPHQWV1RDQG5´7KLVVWDQGDUGUHTXLUHV
employers to recognize the underfunded or overfunded status of defined benefit pension and postretirement plans as
an asset or liability in its statement of financial position, and recognize changes in the funded status in the year in
which the changes occur through accumulated other comprHKHQVLYHLQFRPHZKLFKLVDFRPSRQHQWRIVWRFNKROGHUV¶
equity. This standard also eliminates the requirement foU$GGLWLRQDO0LQLPXP3HQVLRQ/LDELOLW\$0/UHTXLUHGXQGHU
6)$61R$VDUHVXOWRIWKHDSSOLFDWLRQRI6)$61RDVRI'HFHPEHU0UHYHUVHGDVVHWVRI
ELOOLRQDQGLQFUHDVHGOLDELOLWLHVE\PLOOLRQ7KHVe liabilities were offset to accumulated other
FRPSUHKHQVLYHLQFRPHDQGGHIHUUHGWD[HV$VDUHVXOWRIWKHLPSOHPHQWDWLRQRI6)$61RWKH&RPSDQ\
recognized an after-tax decrease in accumulated otherFRPSUHKHQVLYHLQFRPHRIELOOLRQDQGPLOOLRQIRU
the U.S. and International pension benefit plans, respectiYHO\DQGPLOOLRQIRUWKHSRVWUHWLUHPHQWKHDOWKFDUHDQG
life insurance benefit plan.