Home » 3M Annual Reports » 2011 Annual Report - page 93

3M 2011 Annual Report Download - page 93

Download and view the complete annual report

Please find page 93 of the 2011 3M annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Postretirement Benefit Plans Assets

In order to achieve the investment objectives in the U.S. postretirement plan, the investment policy includes a target

strategic asset allocation. The investment policy allows some tolerance around the target in recognition that market

fluctuations and illiquidity of some investments may cause the allocation to a specific asset class to stray from the

target allocation, potentially for long periods of time. Acceptable ranges have been designed to allow for deviation

from long-term targets and to allow for the opportunity for tactical over- and under-weights. The portfolio will normally

be rebalanced when the quarter-end asset allocation deviates from acceptable ranges. The allocation is reviewed

regularly by the named fiduciary of the plan.

The fair values of the assets held by the postretirement benefits plans by asset class are as follows:

Fair Value Measurements Using Inputs Considered as Fair Value at

(Millions) Level 1 Level 2 Level 3 Dec 31,

Asset Class 2011 2010 2011 2010 2011 2010 2011 2010

Equities .................................

U.S. equities .................... $ 396 $ 392

$ —

—

$ 396

$ 392

Non-U.S. equities ............. 44 48

—

EAFE index funds ............

—

Index funds ......................

—

Long/short equity .............

—

16 14

Total Equities ....................... $ 440 $ 440

$ 58

$ 66

$ 14 $ 16 $ 512

$ 522

Fixed Income ........................

U.S. government securities $ 55 $ 50

$ 197

$ 160

—

$ 252

$ 210

Non-U.S. government

securities ......................

—

Preferred and convertible

securities ......................

—

— —

U.S. corporate bonds ....... 6

—

Non-U.S. corporate bonds

—

Asset backed securities ...

—

Collateralized mortgage

obligations ....................

—

Private placements ..........

—

Derivative instruments .....

—

(2 ) —

—

(2 )

Other ................................

—

Total Fixed Income .............. $ 61 $ 56

$ 314

$ 248

$ 2 $ 4 $ 377

$ 308

Private Equity .......................

Buyouts ............................ $

—

$ —

$ 56 $ 57 $ 56

$ 57

Distressed debt ................

—

18 17

Growth equity ...................

—

— —

—

Mezzanine .......................

—

Real estate .......................

—

Secondary ........................

—

Other ................................

—

— — 43 — 43

Venture capital .................

—

100

94 100

Total Private Equity ............. $

—

$ —

$ 187 $ 226 $ 187

$ 226

bsolute Return ....................

Hedge funds and hedge fund

of funds ........................ $

—

$ —

$ 40

$ 36

$ 3 $ 2 $ 43

$ 38

Bank loan and other fixed

income funds .................

—

18 14

Total Absolute Return .......... $

—

$ —

$ 40

$ 36

$ 17 $ 20 $ 57

$ 56

Commodities ....................... $

—

$ —

$ 14

$ 11

$ 4 $ 3 $ 18

$ 14

Cash and Cash Equivalents $ 10 $ 1

$ 51

$ 42

—

$ 61

$ 43

Total ..................................... $ 511 $ 497

$ 477

$ 403

$ 224 $ 269 $ 1,212

$ 1,169

Other items to reconcile to fair

value of plan assets ......... $ (3 ) $ (20 )

Fair value of plan assets ..... $ 1,209

$ 1,149

Postretirement Benefit Plans Assets

In order to achieve the investment objectives in the U.S. postretirement plan, the investment policy includes a target

strategic asset allocation. The investment policy allows some tolerance around the target in recognition that market

fluctuations and illiquidity of some investments may cause the allocation to a specific asset class to stray from the

target allocation, potentially for long periods of time. Acceptable ranges have been designed to allow for deviation

from long-term targets and to allow for the opportunity for tactical over- and under-weights. The portfolio will normally

be rebalanced when the quarter-end asset allocation deviates from acceptable ranges. The allocation is reviewed

regularly by the named fiduciary of the plan.

The fair values of the assets held by the postretirement benefits plans by asset class are as follows:

Fair Value Measurements Using Inputs Considered as Fair Value at

(Millions) Level 1 Level 2 Level 3 Dec 31,

Asset Class 2011 2010 2011 2010 2011 2010 2011 2010

Equities

U.S. equities .................... $ 396 $ 392

$ —

—

$ 396 $ 392

Non-U.S. equities ............. 44

—

44 48

EAFE index funds ............ —

—

15 21

Index funds ...................... —

—

43 45

Long/short equity ............. —

—

14 16 14 16

Total Equities ....................... $ 440 $ 440

$ 58

$ 66

$ 14 $ 16 $ 512 $ 522

Fixed Income

U.S. government securities $ 55 $ 50

$ 197

$ 160

—

$ 252 $ 210

Non-U.S. government

securities ...................... —

—

12 10

Preferred and convertible

securities ...................... —

—

U.S. corporate bonds ....... 6

—

68 54

Non-U.S. corporate bonds —

—

14 11

Asset backed securities ... —

—

Collateralized mortgage

obligations .................... —

—

Private placements .......... —

—

11 12

Derivative instruments ..... —

—

(2 )

—

(2 )

Other ................................ —

—

Total Fixed Income .............. $ 61 $ 56

$ 314

$ 248

$ 2 $ 4 $ 377 $ 308

Private Equity

Buyouts ............................ $

—

$ —

$ 56 $ 57 $ 56 $ 57

Distressed debt ................ —

—

17 18 17 18

Growth equity ................... —

—

Mezzanine ....................... —

—

Real estate ....................... —

—

Secondary ........................ —

—

Other ................................ —

—

Venture capital ................. —

—

100 94 100 94

Total Private Equity ............. $

—

$ —

$ 187 $ 226 $ 187 $ 226

bsolute Return

Hedge funds and hedge fund

of funds ........................ $

—

$ 40

$ 36

$ 3 $ 2 $ 43 $ 38

Bank loan and other fixed

income funds ................. —

—

14 18 14 18

Total Absolute Return .......... $

—

$ 40

$ 36

$ 17 $ 20 $ 57 $ 56

Commodities ....................... $

—

$ 14

$ 11

$ 4 $ 3 $ 18 $ 14

Cash and Cash Equivalents $ 10 $ 1

$ 51

$ 42

—

$ 61 $ 43

Total ..................................... $ 511 $ 497

$ 477

$ 403

$ 224 $ 269 $ 1,212 $ 1,169

Other items to reconcile to fair

value of plan assets ......... $ (3) $ (20 )

Fair value of plan assets ..... $ 1,209 $ 1,149