3M 2012 Annual Report Download - page 92

86
International Pension Plans Assets
Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below
of asset categories is presented in aggregate for over 65 plans in 24 countries; however, there is significant variation in
policy asset allocation from country to country. Local regulations, local funding rules, and local financial and tax
considerations are part of the funding and investment allocation process in each country. 3M’s Treasury group provides
standard funding and investment guidance to all international plans with more focused guidance to the larger plans.
Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when
necessary.
The fair values of the assets held by the international pension plans by asset class are as follows:
Fair Value Measurements Using Inputs Considered as
Fair Value at
(Millions)
Level 1
Level 2
Level 3
Dec. 31,
Asset Class
2012
2011
2012
2011
2012
2011
2012
2011
Equities
Growth equities
$
628
$
374
$
133
$
141
$
―
$
―
$
761
$
515
Value equities
468
401
23
98
―
―
491
499
Core equities
88
227
376
430
5
5
469
662
Total Equities
$
1,184
$
1,002
$
532
$
669
$
5
$
5
$
1,721
$
1,676
Fixed Income
Domestic government debt
$
297
$
188
$
694
$
579
$
―
$
6
$
991
$
773
Foreign government debt
170
93
445
647
2
2
617
742
Corporate debt securities
―
113
630
404
18
19
648
536
Mortgage backed debt
―
―
31
25
―
―
31
25
Other debt obligations
―
―
268
39
16
12
284
51
Total Fixed Income
$
467
$
394
$
2,068
$
1,694
$
36
$
39
$
2,571
$
2,127
Private Equity
Private equity funds
$
―
$
―
$
―
$
47
$
22
$
20
$
22
$
67
Real estate
3
3
42
38
49
47
94
88
Total Private Equity
$
3
$
3
$
42
$
85
$
71
$
67
$
116
$
155
Absolute Return
Hedge funds
$
―
$
―
$
75
$
172
$
50
$
―
$
125
$
172
Insurance
―
―
―
―
433
369
433
369
Derivatives
―
―
20
58
―
―
20
58
Other
―
―
24
2
2
1
26
3
Total Absolute Return
$
―
$
―
$
119
$
232
$
485
$
370
$
604
$
602
Cash and Cash Equivalents
$
211
$
106
$
21
$
2
$
―
$
―
$
232
$
108
Total
$
1,865
$
1,505
$
2,782
$
2,682
$
597
$
481
$
5,244
$
4,668
Other items to reconcile to fair
value of plan assets
$
(22)
$
(25)
Fair value of plan assets
$
5,222
$
4,643
Equities consist primarily of mandates in public equity securities managed to the Morgan Stanley Capital All Country
World Index. Publicly traded equities are valued at the closing price reported in the active market in which the individual
securities are traded.
Fixed Income investments include domestic and foreign government, corporate, mortgage backed and other debt.
Governments, corporate bonds and notes and mortgage backed securities are valued at the closing price reported if
traded on an active market or at yields currently available on comparable securities of issuers with similar credit ratings or
valued under a discounted cash flows approach that maximizes observable inputs, such as current yields of similar
instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.
Private equity funds consist of both active and passive mandates. Partnership interests are valued using the most recent
general partner statement of fair value, updated for any subsequent partnership interests’ cash flows or expected changes
in fair value. Real estate consists of property funds and REITS (Real Estate Investment Trusts). Property funds are valued
using the most recent partnership statement of fair value, updated for any subsequent partnership interests’ cash flows.
REITS are valued at the closing price reported in the active market in which it is traded.