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58
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R).” This standard eliminated the
requirement for a “minimum pension liability adjustment” that was previously required under SFAS No. 87 and required
employers to recognize the underfunded or overfunded status of a defined benefit plan as an asset or liability in its
statement of financial position. In 2006, as a result of the implementation of SFAS No. 158, the Company recognized
an after-tax decrease in accumulated other comprehensive income of $1.187 billion and $513 million for the U.S. and
International pension benefit plans, respectively, and $218 million for the postretirement health care and life insurance
benefit plan. See Note 11 for additional detail.
Reclassification adjustments are made to avoid double counting in comprehensive income items that are also recorded
as part of net income. In 2007, as disclosed in the net periodic benefit cost table in Note 11, $198 million pre-tax ($123
million after-tax) were reclassified to earnings from accumulated other comprehensive income to pension and
postretirement expense in the income statement. These pension and postretirement expense amounts are shown in
the table in Note 11 as amortization of transition (asset) obligation, amortization of prior service cost (benefit) and
amortization of net actuarial (gain) loss. Other reclassification adjustments (except for cash flow hedging instruments
adjustments provided in Note 12) were not material. No tax provision has been made for the translation of foreign
currency financial statements into U.S. dollars.
NOTE 7. Supplemental Cash Flow Information
(Millions) 2007 2006 2005
Cash income tax payments $1,999 $1,842 $1,277
Cash interest payments 162 119 79
Capitalized interest 25 16 12
Individual amounts in the Consolidated Statement of Cash Flows exclude the impacts of acquisitions, divestitures and
exchange rate impacts, which are presented separately. “Other – net” in the Consolidated Statement of Cash Flows
within operating activities in 2007 and 2006 includes changes in liabilities related to 3M’s restructuring actions (Note 4)
and in 2005 includes the non-cash impact of adopting FIN 47 ($35 million cumulative effect of accounting change).
Transactions related to investing and financing activities with significant non-cash components are as follows: In 2007, 3M
purchased certain assets of Diamond Productions, Inc. for approximately 150 thousand shares of 3M common stock,
which has a market value of approximately $13 million at the acquisition’s measurement date. Liabilities assumed from
acquisitions are provided in the tables in Note 2.