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63
transfer $145 million in pension liabilities and $74 million in pension assets to the Japanese government. The
company remeasured its projected benefit obligation and plan assets as of August 15, 2005, to include the effect
of this transfer. As a result of the remeasurement, the Company recognized a gain of $8 million. The gain partially
offsets the 2005 net periodic benefit cost.
In 2006, 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 $100 million to its post-retirement plans. The Company does not
have a required minimum pension contribution obligation for its U.S. plans in 2006. Therefore, the amount of the
anticipated discretionary contribution could vary significantly depending on the U.S. plans funding status as of the
2006 measurement date and the anticipated tax deductibility of the contribution.
The following estimated benefit payments are payable from the plans to participants:
Qualified and Non-qualified Postretirement Medicare Subsidy
Pension Benefits Benefits Receipts
(Millions) United States International
2006 Benefit Payments $ 519 $138 $124 $ 11
2007 Benefit Payments 532 144 132 13
2008 Benefit Payments 546 155 138 14
2009 Benefit Payments 560 168 143 16
2010 Benefit Payments 575 181 146 17
Following five years 3,114 1,110 779 106
NOTE 11. Commitments and Contingencies
Capital and Operating Leases:
Rental expense under operating leases was $195 million in 2005, $181 million in 2004 and $162 million in 2003. It
is 3M’s practice to secure renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain
a presence in a leased facility. 3M’s primary capital lease, which became effective in April 2003, involves a
building in the United Kingdom (with a lease term of 22 years). During the second quarter of 2003, 3M recorded a
capital lease asset and obligation of approximately 33.5 million United Kingdom pounds (approximately $58 million
at December 31, 2005 exchange rates). Minimum lease payments under capital and operating leases with non-
cancelable terms in excess of one year as of December 31, 2005, were as follows:
Capital Operating
(Millions) Leases Leases
2006 $ 5 $ 79
2007 4 61
2008 4 46
2009 4 27
2010 4 21
After 2010 50 128
Total 71 $362
Less: Amounts representing interest 10
Present value of future minimum lease payments 61
Less: Current obligations under capital leases 2
Long-term obligations under capital leases $59
Warranties/Guarantees:
3M’s accrued product warranty liabilities, recorded on the Consolidated Balance Sheet as part of current and long-
term liabilities, are estimated at approximately $22 million. 3M does not consider this amount to be material. The
fair value of 3M guarantees of loans with third parties and other guarantee arrangements are not material.