3M 2008 Annual Report Download - page 75

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69
(6 cents per diluted share) in 2008, $47 million (6 cents per diluted share) in 2007, and $20 million (3 cents per
diluted share) in 2006.
The Company has not provided deferred taxes on unremitted earnings attributable to international companies that
have been considered to be reinvested indefinitely. These earnings relate to ongoing operations and were
approximately $5.9 billion as of December 31, 2008. Because of the availability of U.S. foreign tax credits, it is not
practicable to determine the income tax liability that would be payable if such earnings were not indefinitely
reinvested.
NOTE 9. Marketable Securities
The Company invests in asset-backed securities, agency securities, corporate medium-term note securities and
other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable
securities (current and non-current) at December 31, 2008.
Dec. 31, Dec. 31,
(Millions) 2008 2007
Agency securities ........................... $ 180 $ 260
Corporate securities ....................... 145 10
Asset-backed securities:
Automobile loans related ............ 24 141
Credit cards related .................... — 37
Other........................................... 11 8
Asset-backed securities total ......... 35 186
Other securities .............................. 13 123
Current marketable securities .... $ 373 $ 579
Agency securities ........................... $ 200 $56
Asset-backed securities:
Credit cards related .................... 40 68
Automobile loans related ............ 25 121
Other........................................... 11 78
Asset-backed securities total ......... 76 267
Corporate securities ....................... 62 112
Treasury securities......................... 12 29
Auction rate and other securities.... 2 16
Non-current marketable securities $ 352 $ 480
Total marketable securities......... $ 725 $ 1,059
Classification of marketable securities as current or non-current is dependent upon management’s intended holding
period, the security’s maturity date and liquidity considerations based on market conditions. If management intends
to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current. At
December 31, 2008, gross unrealized losses totaled approximately $30 million (pre-tax), while gross unrealized gains
were not material. Gross unrealized losses related to auction rate securities totaled $16 million, which are discussed
further below, while other securities have experienced unrealized losses of $14 million as credit spreads have
widened. Gross realized gains on sales or maturities of marketable securities were $5 million in 2008, $7 million in
2007 and not material for 2006. Gross realized losses on sales or maturities of marketable securities were not
material for 2008, 2007 and 2006. Cost of securities sold or reclassified use the first in, first out (FIFO) method. Since
these marketable securities are classified as available-for-sale securities, changes in fair value will flow through other
comprehensive income, with amounts reclassified out of other comprehensive income into earnings upon sale or
“other-than-temporary” impairment.
3M has a diversified marketable securities portfolio of $725 million as of December 31, 2008. Within this portfolio,
current and long-term asset-backed securities (estimated fair value of $111 million) are primarily comprised of
interests in automobile loans and credit cards. At December 31, 2008, the asset-backed securities credit ratings were
AAA or A-1+, with the following exceptions: three securities rated BBB with a fair market value of $5 million. 3M’s
marketable securities portfolio also includes auction rate securities (estimated fair value of $1 million) that represent