3M 2004 Annual Report Download - page 93

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67
While the target asset allocations do not have a percentage allocated to cash, the plans will always have some
cash due to cash flows. As of September 30, 2003, the plans had more cash than typically would be held due to
third quarter cash contributions to the plans. The preceding postretirement allocation represents a weighted-
average allocation for U.S. plans.
The international plans’ weighted-average asset allocation as of December 31, 2004 follows:
Percentage
Asset Category of Plan Assets
International pension plans
Domestic equity 30%
Foreign equity 23
Domestic fixed income 15
Foreign fixed income 9
Insurance 19
Real estate 2
Cash 2
Total 100%
The preceding asset allocations for international plans represent the top six countries by projected benefit
obligation. These countries represent approximately 90% of the total international projected benefit obligation. The
other countries’ asset allocations would not have a significant impact on the information presented.
3M made a third quarter 2004 special pension contribution of $300 million to its U.S. qualified pension plan. Also,
in the third quarter of 2004, 3M made a plan design change to its Sumitomo 3M Japanese pension plan that
changed the defined benefit plan to a hybrid defined contribution and cash balance plan. Prior to implementation
of the plan design change, Japanese pension valuation methods required 3M to bring the plan to fully funded
status. This required 3M to make a third quarter 2004 special pension contribution of $155 million. The plan design
change reduced the liability by approximately $100 million. In addition, during the second half of 2005, 3M intends
to transfer a portion of its Sumitomo 3M Japanese pension liabilities and assets to the government, as allowed by
a Japanese government program. This program would allow 3M to transfer approximately $150 million in pension
liabilities and $80 million in pension assets to the Japanese government.
In 2005, the Company expects to contribute an amount in the range of $100 million to $400 million to its U.S. and
international pension plans, and approximately $150 million to its post-retirement plans. The Company does not
have a required minimum pension contribution obligation for its U.S. plans in 2005. Therefore, the amount of the
anticipated discretionary contribution could vary significantly depending on the U.S. plans funding status as of the
2005 measurement date and the anticipated tax deductibility of the contribution.
The following estimated benefit payments are payable from the plans to 2004 plan participants:
Qualified and Non-qualified Postretirement Medicare Subsidy
Pension Benefits Benefits Receipts
(Millions) United States International
2005 Benefit Payments $ 480 $132 $135 $ –
2006 Benefit Payments 490 136 144 20
2007 Benefit Payments 504 142 153 21
2008 Benefit Payments 519 151 160 22
2009 Benefit Payments 537 160 166 23
Following five years 3,007 941 873 118