Pension and Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2011

Pension and Postretirement Benefit Plans

Pension and Postretirement Benefit Plans

NOTE 8.  Pension and Postretirement Benefit Plans

Components of net periodic benefit cost and other supplemental information for the three-month and nine-month periods ended September 30 follow:

Benefit Plan Information

	Three months ended September 30,
	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
(Millions)	2011			2010			2011			2010			2011			2010
Net periodic benefit cost (benefit)
Service cost	$	51		$	50		$	27		$	28		$	16		$	13
Interest cost	157			160			62			62			23			22
Expected return on plan assets	(231		)	(233		)	(70		)	(71		)	(20		)	(20		)
Amortization of transition (asset) obligation	—			—			—			—			—			—
Amortization of prior service cost (benefit)	2			4			(3		)	(1		)	(18		)	(23		)
Amortization of net actuarial (gain) loss	83			55			28			21			25			21
Net periodic benefit cost (benefit)	$	62		$	36		$	44		$	39		$	26		$	13
Settlements, curtailments, special termination benefits and other	—			—			—			—			—			—
Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other	$	62		$	36		$	44		$	39		$	26		$	13

	Nine months ended September 30,
	Qualified and Non-qualified Pension Benefits												Postretirement
	United States						International						Benefits
(Millions)	2011			2010			2011			2010			2011			2010
Net periodic benefit cost (benefit)
Service cost	$	154		$	151		$	83		$	83		$	46		$	41
Interest cost	470			479			186			187			69			66
Expected return on plan assets	(695		)	(697		)	(209		)	(214		)	(59		)	(62		)
Amortization of transition (asset) obligation	—			—			—			1			—			—
Amortization of prior service cost (benefit)	8			10			(10		)	(3		)	(54		)	(70		)
Amortization of net actuarial (gain) loss	250			165			84			64			77			64
Net periodic benefit cost (benefit)	$	187		$	108		$	134		$	118		$	79		$	39
Settlements, curtailments, special termination benefits and other	—			—			—			(22		)	—			—
Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other	$	187		$	108		$	134		$	96		$	79		$	39

For the nine months ended September 30, 2011, contributions totaling $310 million were made to the Company’s U.S. and international pension plans and $63 million to its postretirement plans. For total year 2011, the Company plans to contribute in the range of $500 million to $600 million to its U.S. and international pension and postretirement plans. The Company does not have a required minimum pension contribution obligation for its U.S. plans in 2011. Therefore, the amount of the anticipated discretionary pension contribution could vary significantly depending on the U.S. plans’ funded status and the anticipated tax deductibility of the contribution. Future contributions will also depend on market conditions, interest rates and other factors. 3M’s annual measurement date for pension and postretirement assets and liabilities is December 31 each year, which is also the date used for the related annual measurement assumptions.

In June 2010, 3M’s Brazilian subsidiary received approval from the government in Brazil to freeze its defined benefit pension plan. Effective March 31, 2010, participants in this subsidiary’s pension plan no longer accrue additional pension benefits. As a result, the Company recorded a $22 million curtailment gain in the second quarter of 2010.

3M was informed during the first quarter of 2009 that the general partners of WG Trading Company, in which 3M’s benefit plans hold limited partnership interests, are the subject of a criminal investigation as well as civil proceedings by the SEC and CFTC (Commodity Futures Trading Commission). In March 2011, over the objections of 3M and six other limited partners of WG Trading Company, the district court judge ruled in favor of the court appointed receiver’s proposed distribution plan. In April 2011, the 3M benefit plans received their share under the court-ordered distribution plan. 3M and six other limited partners of WG Trading Company have appealed the court’s order to the United States Court of Appeals for the Second Circuit. The benefit plan trustee holdings of WG Trading Company interests were adjusted to reflect the decreased estimated fair market value, inclusive of estimated insurance proceeds, as of the annual measurement dates. The Company has insurance that it believes, based on what is currently known, will result in the recovery of a portion of the decrease in original asset value. As of the 2010 measurement date these holdings represented less than one percent of 3M’s fair value of total plan assets. 3M currently believes that the resolution of these events will not have a material adverse effect on the consolidated financial position of the Company.