3M 2012 Annual Report Download - page 81
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The balance at December 31, 2012 for marketable securities by contractual maturity are shown below. Actual maturities
may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations
without prepayment penalties.
(Millions)
December 31, 2012
Due in one year or less
$
912
Due after one year through three years
1,483
Due after three years through five years
414
Due after five years
1
Total marketable securities
$
2,810
3M has a diversified marketable securities portfolio of $2.810 billion as of December 31, 2012. Within this portfolio, current
and long-term asset-backed securities (estimated fair value of $1.228 billion) are primarily comprised of interests in
automobile loans and credit cards. At December 31, 2012, all asset-backed securities were rated AAA or A-1+ by
Standard & Poor’s and/or Aaa or P-1 by Moody’s Investors Service and/or AAA or F1+ by Fitch Ratings.
3M’s marketable securities portfolio includes auction rate securities that represent interests in investment grade credit
default swaps; however, currently these holdings comprise less than one percent of this portfolio. The estimated fair value
of auction rate securities are $7 million and $4 million as of December 31, 2012 and 2011, respectively. Gross unrealized
losses within accumulated other comprehensive income related to auction rate securities totaled $6 million (pre-tax) and
$9 million (pre-tax) as of December 31, 2012 and 2011, respectively. As of December 31, 2012, auction rate securities
associated with these balances have been in a loss position for more than 12 months. Since the second half of 2007,
these auction rate securities failed to auction due to sell orders exceeding buy orders. Liquidity for these auction-rate
securities is typically provided by an auction process that resets the applicable interest rate at pre-determined intervals,
usually every 7, 28, 35, or 90 days. The funds associated with failed auctions will not be accessible until a successful
auction occurs or a buyer is found outside of the auction process. Refer to Note 12 for a table that reconciles the
beginning and ending balances of auction rate securities.
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