3M 2010 Annual Report Download - page 96

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90
The private equity portfolio is a diversified mix of partnership interests including buyouts, distressed debt, growth
equity, mezzanine, real estate and venture capital investments. 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.
Absolute return primarily consists of private partnership interests in hedge funds, hedge fund of funds and bank loan
funds. Partnership interests are valued using the NAV as determined by the independent administrator or custodian
of the fund.
Commodities consist of commodity-linked notes and commodity-linked derivative contracts designed to deliver
investment returns similar to the GSCI or Dow Jones UBS Commodity index returns. Commodities are valued at
closing prices determined by calculation agents for outstanding transactions.
Other items to reconcile to fair value of plan assets is the net of interest receivable, amounts due for securities sold,
foreign currency fluctuations, amounts payable for securities purchased and interest payable.
The following table sets forth a summary of changes in the fair values of the postretirement plans’ level 3 assets for
the year ended December 31, 2010:
Fair Value Measurement Using Significant
Unobservable Inputs (Level 3)
(Millions)
Equities
Fixed
Income
Private
Equity
Absolute
Return
Comm-
odities
Total
Beginning balance at Jan. 1, 2010
$
—
$
6
$
245
$
22
$
7
$
280
Net transfers into / (out of) level 3
2
(2
)
—
(1
)
(4
)
(5
)
Purchases, sales, issuances and
settlements, net .............
13
(1
)
(11
)
(6
)
—
(5
)
Realized gain/(loss) ...........
—
—
16
—
—
16
U
nrealized gains/(losses) relating
to instruments still held at the
reporting date ..............
1
1
(24
)
5
—
(17
)
Ending balance at Dec. 31, 2010
$
16
$
4
$
226
$
20
$
3
$
269
The following table sets forth a summary of changes in the fair values of the postretirement plans’ level 3 assets for
the year ended December 31, 2009:
Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
(Millions)
Fixed
Income
Private
Equity
Absolute
Return
Commo-
dities
Total
Beginning balance at January 1, 2009 ......
$
4
$
265
$
47
$
—
$
316
Net transfers into / (out of) level 3 .............
—
—
(31
)
—
(31
)
Purchases, sales, issuances and
settlements, net .....................................
—
(38
)
(5
)
7
(36
)
Realized gain/(loss) ...................................
—
(14
)
—
—
(14
)
Unrealized gains/(losses) relating to
instruments still held at the reporting
date ........................................................
2
32
11
—
45
Ending balance at December 31, 2009 .....
$
6
$
245
$
22
$
7
$
280