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DATE

Tuesday, January 20, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Bill Brown
  • Chief Financial Officer — Anurag Maheshwari

TAKEAWAYS

  • Organic Sales Growth -- 2.2% for the quarter and 2.1% for the year, supported by commercial excellence and new product introductions.
  • Adjusted Operating Margin -- 21.1% in the quarter and 23.4% for the year, representing 200 basis points of annual expansion, at the high end of the stated guidance range.
  • Adjusted Earnings Per Share (EPS) -- $1.83 for the quarter (up 9%) and $8.06 for the year, with the latter growing double digits.
  • Free Cash Flow Conversion -- Over 130% in the quarter and slightly above 100% for the year, reflecting strong working capital efficiency.
  • Shareholder Returns -- $4.8 billion deployed in 2025, including $1.6 billion in dividends and $3.2 billion from share repurchases.
  • New Product Launches -- 284 new products launched in 2025, a 68% increase versus 2024, with 350 targeted for 2026.
  • New Product Vitality Index (NPVI) -- Ended at 13%, up approximately two points in the year, indicating increased portfolio freshness.
  • Sales from Products Launched in Last Five Years -- Up 23% for the year, exceeding the high-teens target, with Q4 at 44%.
  • Operational Metrics -- On-Time-In-Full (OTIF) above 90% (up 300 basis points), Overall Equipment Effectiveness (OEE) at 63% (up over 300 basis points), and cost of poor quality at 6% of cost of goods (down 100 basis points).
  • Guidance for 2026 -- Organic sales growth approximately 3%, adjusted operating margin expansion of 70-80 basis points, EPS of $8.5 to $8.7, and free cash flow conversion greater than 100%.
  • Segment Performance: Safety and Industrial -- Q4 organic sales increased 3.8%, with full-year growth accelerating from 2.5% in the first half to 3.9% in the second half.
  • Segment Performance: Transportation and Electronics -- Q4 organic sales rose 2.4%, with full-year growth strengthening to 3% in the second half after 1% in the first.
  • Segment Performance: Consumer -- Q4 organic sales declined 2.2%, resulting in a 0.3% revenue drop for the year.
  • Geographical Performance -- China grew mid-single digits, India mid-teens, Europe low single digits, and U.S. low single digits; all geographies evidenced growth in the year.
  • Capital Allocation Outlook -- $2.5 billion of gross share repurchases planned for 2026 as part of the multiyear $10 billion return commitment.
  • Transformation Charges -- $55 million in Q4 for manufacturing, distribution, and business process redesign, excluded from adjusted results.
  • Pricing Initiatives -- Anticipated pricing benefit of approximately 80 basis points in 2026, primarily from Safety and Industrial.
  • Litigation Costs -- ~$500 million in 2025, with similar expectations for 2026, contingent on developments in the litigation docket.

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RISKS

  • Management identified persistent weakness in auto aftermarket and roofing granules tied to the slow housing market and subdued consumer sentiment.
  • Consumer segment revenue declined 0.3% for the year, with Q4 experiencing a 2.2% drop due to soft retail traffic and weak point-of-sale trends in discretionary categories.
  • Potential $30 million-$40 million headwind in 2026 from prospective new Europe-related trade tariffs is not included in current guidance and could materialize depending on policy implementation.
  • Management continues to monitor elevated customer inventory levels in consumer channels, which remained slightly above normal at year-end.

SUMMARY

Management reported that commercial excellence and accelerated innovation supported margin expansion and profit growth that outperformed macroeconomic trends. The company launched 284 new products—a 68% increase from the prior year—while achieving a double-digit annual increase in adjusted earnings per share and adjusted operating margin exceeding 23%. Executives guided to continued organic sales outperformance, citing strong momentum and disciplined capital allocation, and outlined plans for ongoing transformation, including footprint optimization and increased investment in high-growth, high-margin verticals.

  • Executives said, "organic sales growth accelerated to 2.7% in the second half from 1.5% in the first, due to the breadth of our portfolio and our strong execution."
  • Management targets more than $300 million of market outgrowth above macro in 2026, with half attributed to new product introductions and half to commercial excellence initiatives.
  • Safety and Industrial and Transportation and Electronics segments are expected to accelerate combined growth in 2026, underpinned by new product launches and operational improvements.
  • While SIBG achieved high single-digit growth in adhesives and tapes, management noted continued roofing granules weakness will likely persist into early 2026.
  • Guidance incorporates headwinds from PFAS, stranded costs, and tariff impacts, but assumes continued expansion in both margin and cash flow conversion.

INDUSTRY GLOSSARY

  • New Product Vitality Index (NPVI): An internal measure indicating the percentage of total sales generated by products launched within the past five years.
  • On-Time-In-Full (OTIF): A service metric tracking the proportion of orders delivered on schedule and complete.
  • Overall Equipment Effectiveness (OEE): A manufacturing metric expressing asset utilization efficiency as a percentage.
  • Cost of Poor Quality: The proportion of manufacturing costs attributed to product defects, waste, or rework.
  • Commercial Excellence Initiatives: Programmatic efforts to improve sales effectiveness, pricing discipline, and channel collaboration to drive organic revenue growth.
  • Priority Verticals: Business segments identified by management as higher-growth, higher-margin targets for strategic investment and portfolio focus.

Full Conference Call Transcript

Bill Brown, 3M Company's Chairman and Chief Executive Officer, and Anurag Maheshwari, our Chief Financial Officer. Bill and Anurag will make some formal comments, then we will take your questions. Please note that today's earnings release and slide presentation accompanying this call are posted on the homepage of our Investor Relations website at 3ms.com. Please turn to Slide two and take a moment to read the forward-looking statements. During today's conference call, we will be making certain statements that reflect our current views about 3M Company's future performance and financial results. These statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties.

Item 1a of our most recent Form 10-Q lists some of the most important risk factors that could cause actual results to differ from our predictions. Please note throughout today's presentation, we will be referencing certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in the attachments to today's press release. With that, please turn to Slide three, and I will hand the call off to Bill. Bill?

Bill Brown: Thank you, Chinmay. Good morning, everyone. We delivered solid results in Q4, including organic growth of 2.2%, operating margin of 21.1%, earnings per share of $1.83, and free cash flow conversion of over 130%. These results capped a strong year with organic sales growth exceeding 2%, outperforming the macro environment and accelerating from 1.2% organic growth in 2024 and negative growth in 2023. This growth was underpinned by the strong commercial excellence foundation we have established and our focus on reinvigorating innovation.

We delivered significant margin expansion with a full-year adjusted operating margin of 23.4%, up 200 basis points year on year at the high end of our guidance range and on top of over 200 basis points expansion in 2024. Adjusted EPS grew double digits to $8.06, and free cash flow conversion was slightly above 100% for the year. Our 2025 financial results reflect the progress we are making, and we are tracking ahead of the medium-term commitments we made at the Investor Day last year. 2025 was an important year for 3M Company, where we implemented fundamental changes in the company, building a foundation for our future growth through commercial excellence and innovation.

We previously described the three pillars of commercial excellence: improved sales effectiveness and pricing governance, stronger collaboration with channel partners, including joint business planning and cross-selling, and increased customer loyalty. And we are making progress across all of them. We have implemented greater rigor across our Salesforce and sales management, tightened pricing controls, and developed over 600 joint business plans and closed on nearly $50 million of annualized cross-selling wins with a robust pipeline of opportunities. Innovation is the lifeblood of the company, and we successfully launched 284 new products in 2025, up 68% versus 2024, exceeding our initial target and more than double the launches in 2023. We expect this growth to continue with 350 launches in 2026.

These new products are vital for our long-term growth and are already contributing to our top line. Sales for products launched in the last five years were up 23% in the full year, exceeding our high teens target and exiting Q4 at 44%, giving us momentum into 2026. Our new product vitality index, or NPVI, a measure of the freshness of our portfolio, ended at 13%, about two points above where we started the year. It was also a year where we saw operational excellence become embedded across the enterprise as we drove better service levels for our customers and stronger operating rigor in our factories and across our enterprise functions.

I have been describing our performance across three important metrics, OTIF, OEE, and cost of poor quality. OTIF ended the year above 90%, 300 basis points above the prior year, and the best we have achieved in decades. We sustained that rate for seven months in a row. This improvement is translating into a better customer experience that is helping us win shelf space and reduce churn. OEE, our asset utilization metric, ended the year at about 63%, up over 300 basis points across assets covering 70% of production volume. Cost of poor quality also improved considerably last year and is now at 6% of the cost of goods, down 100 basis points year on year.

We are focused on key areas of inefficiency like frequent or ineffective changeovers and late detection and material defects, leading to raw material yield loss, scrap, and quality credits issued to customers. We are leveraging Kaizen events, visual inspection systems, automation solutions, and AI-enabled models to optimize changeovers to improve quality, with a target of 5.4% cost of quality in 2026 and less than 4% over time. Meanwhile, we continue to deploy capital effectively for our shareholders, returning $4.8 billion through dividends and buybacks in the year, progressing well in our commitment to return $10 billion to shareholders as part of our multiyear capital allocation strategy.

The key to making this all work in the long run is our relentless focus on building a performance culture and delivering excellence everywhere, every day. This means greater speed and urgency, a deeper sense of accountability, challenging the status quo, and finding ways to get better every day in the spirit of continuous improvement. Our performance is a direct result of the cultural and operational changes we are driving across the enterprise that improve how we develop, produce, and deliver products and build a strong foundation for the future. Slide four is a chart we have used for the past few quarters connecting macro trends to our organic growth.

The macro remains soft and largely unchanged from Q3, but due to our strong execution, we have outperformed. General industrial, safety, and electronics, collectively about 65% of our business, came in better than expected with exceptional year-on-year strength in the second half in electric markets, aerospace, and self-contained breathing apparatus, all of which were up low double digits. Abrasives, industrial adhesives and tapes, and electronics were all up mid-single digits, abrasives accelerating from low single digits in the first half, IATD holding steady through the year, and electronics not softening as previously anticipated. Auto and auto aftermarket remain soft as expected, while our consumer segment and roofing granules business were weaker than expected.

Despite the macro headwind, organic sales growth accelerated to 2.7% in the second half from 1.5% in the first, due to the breadth of our portfolio and our strong execution. Turning to our outlook on Slide five, our team's constancy of purpose and execution rigor allowed us to finish 2025 strong, and we are carrying that momentum forward into 2026. This year, we expect organic sales growth of approximately 3%, adjusted operating margin expansion of 70 to 80 basis points, and earnings per share of $8.5 to $8.7, and free cash flow conversion greater than 100%. We are planning for the macro to be similar to 2025, but it is still early to put too much weight on market forecasts.

We expect most of our industrial businesses to continue to perform well in '26, with watch items including the pace and timing of a US consumer recovery, auto build rates, especially in geographies where we have higher content, and consumer electronics. While we will closely monitor macro trends, we are going to continue to execute our game plan and control the controllables. Lastly, I want to turn your attention to slide six, which is the framework by which we will create value for shareholders over time. The three phases are not meant to be sequential but evolve together with shifting emphasis.

They build on what we outlined at Investor Day and reflect how we view these elements as interconnected and essential to building a stronger company operationally and financially. It started with a back-to-basics, focus-on-fundamentals approach, which is all about building a sustainable foundation. I have been talking to you about these initiatives and how we track them since I joined 3M Company twenty-one months ago and did so again today. These core elements are focused on commercial and innovation excellence, operational excellence, and reinvigorating our culture with accountability and agility, creating a solid platform from which to grow.

As we have gained confidence in our execution in this foundational stage, we are beginning to shift our emphasis to the next phase of value creation, which is more transformational in nature. Like we previewed at Investor Day, this phase includes reengineering the structural cost base that underpins our supply chain network and business processes, simplifying and standardizing core activities, and embedding an AI-first mentality as we shift from a holding company model to an integrated operating company. We described this program at a high level last quarter as a thoughtful, strategic, long-term effort paced at the ability of the team to execute well. Transformation also includes proactive steps on risk reduction and effectively managing the litigation docket.

Anytime we can take care of risk at an appropriate price and with suitable protections, we will be prepared to act like we did last year with the State of New Jersey. And as our organic machine begins to turn faster and our risk profile comes down, we will be prepared to execute on our portfolio management strategy to pivot the company towards higher growth and margin potential priority verticals that help us accelerate value creation for the company. This is a multiyear journey, and progress will not be linear. But with a successful 2025 behind us, we are accelerating the transformation of 3M Company and building the runway for performance beyond 2027.

The 3M Company team is energized and motivated, and I want to thank them for their dedication and focus on delivering improvement day after day. And with that, I will turn it over to Anurag to share the details of the quarter.

Anurag Maheshwari: Thank you, Bill. Turning to Slide seven, we had a strong finish to the year across all financial metrics. We delivered another quarter of sales growth above macro, continued margin expansion, strong earnings growth, and robust cash flow generation. Starting with the top line, in a continued muted environment, we delivered organic sales growth of 2.2% driven by our commercial excellence initiatives and new product launches. The growth was driven by strength in safety, electronics, and general industrial, which more than offset the softness in consumer, roofing granules, and auto markets. All three of our business segments delivered sustained auto momentum, which contributed to a higher ending backlog compared to last year, giving us confidence as we go into 2026.

Fourth-quarter adjusted operating margins were 21.1%, up 140 basis points, and operating profit increased double digits or $125 million driven by continued disciplined operational performance. This included a $275 million benefit from volume growth, broad-based productivity, and lower restructuring costs, partially offset by approximately $50 million of growth investments, a headwind of $100 million from gross tariff impact, and stranded costs. Collectively, this contributed $0.17 to earnings, which was partially offset by $0.02 from non-operational below-the-line items. Our strong operating performance resulted in adjusted EPS of $1.83, an increase of 9%, and exceeded the top end of our guidance range.

I also want to mention that we took a $55 million charge in the quarter as we continue to make transformation investments to redesign our manufacturing, distribution, and business process services and locations. Similar to last quarter, these charges will be excluded from our adjusted results. Adjusted free cash flow in the quarter was $1.3 billion, with a conversion of approximately 130% as we benefited from strong earnings growth and working capital efficiency. Turning to Slide eight, I will provide an overview of our business group performance for both the fourth quarter and full year 2025.

First, in Safety and Industrial, we delivered another quarter of strong organic growth as we continue to gain traction on commercial excellence initiatives and realize benefits from new product launches. Fourth-quarter organic sales increased 3.8% driven by strong performance in safety, which grew high single digits through enhanced channel engagement and new product launches. Industrial Adhesives and Tapes growth accelerated to high single digits as we continue to win share globally in electronics and general industrial from new product introductions and improved manufacturing throughput. Abrasives continue to improve, delivering another quarter of mid-single-digit growth benefiting from sustained focus on sales force effectiveness.

Collectively, this strong growth more than offset known weakness in automotive aftermarket and incremental weakness in roofing granules due to the slow housing market and weak consumer sentiment. For the full year, SIBG grew 3.2%, with growth accelerating from 2.5% in the first half to 3.9% in the second half on the back of strong execution. Turning to Transportation and Electronics, fourth-quarter organic sales increased 2.4% driven by continued momentum in Electronics and Aerospace. These gains more than offset weakness in auto, which in our organizational structure includes commercial vehicles, which was down high teens in the quarter. Electronics continued to gain share supported by commercial excellence initiatives and strong demand for our film technologies and optically clear adhesives.

We also expanded our presence in the mainstream market by partnering with leading consumer electronic brands to deliver solutions aligned with their portfolio needs. Aerospace delivered another strong quarter driven by growing demand for space materials and continued strength in defense-related markets. We have seen sustained growth in this portfolio where sales have doubled over the last four years. For 2025, transportation and electronics grew 2%, with second-half growth of 3% versus the first-half growth of 1% driven by continued focus on commercial excellence and the ramp-up of new product launches. Finally, Consumer fourth-quarter organic sales were down 2.2%.

For the first nine months of the year, the business was up 0.3%, and we had expected the fourth quarter to be similar. But weaker consumer sentiment and sluggish retail traffic in the U.S. resulted in lower point-of-sale trends on discretionary categories where we compete. This market weakness was partially offset by new product introductions, increased advertising, and promotional investments in the U.S., and overall business growth in Asia and Latin America. As a result of the fourth-quarter weakness, CBG revenue declined by 0.3% for the full year. On Slide nine is a summary of the full-year 2025 performance.

Overall, a strong fourth quarter capped a successful 2025 with organic sales growth of 2.1%, margin expansion of 200 basis points, EPS increase of 10%, and free cash flow slightly above 100%. Sales growth strengthened from 1.5% in the first half to 2.7% in the second, exceeding the 2.5% we mentioned in our July earnings call. This momentum underscores the impact of our commercial excellence initiatives, enhanced service levels, and successful new product launches, positioning us well to accelerate our performance going forward. By geography, all areas delivered growth in the year. China grew mid-single digit from strength in general industrials and electronics bonding solutions, supported by a strong focus on key accounts.

This momentum more than offset the fourth-quarter shift in smartphones from China to other parts of Asia. In the rest of Asia, we grew low single digits led by strong performance in India, which grew mid-teens on account of progress in commercial excellence across all businesses. After a couple of years of decline, Europe grew low single digits due to strength in general industrial and safety, which more than offset the weakness in consumer and auto aftermarket. Despite soft consumer and auto aftermarket, the U.S. grew low single digit for the year on the back of commercial excellence initiatives in the general industrial and safety businesses.

Productivity initiatives drove strong margin expansion every quarter in 2025, resulting in full-year operating margins of 23.4%. Operating profit growth of approximately $650 million at constant currency was driven by $200 million from volume growth and $550 million of net productivity across supply chain and G&A. This was partially offset by $100 million in headwinds driven by $185 million in growth and productivity investments in addition to ongoing stranded costs and tariff impacts, year-on-year lower restructuring costs. The strong operational performance contributed $0.96 of earnings, which was offset by approximately $0.20 of non-operational items for total EPS of $8.6. This 10% EPS growth was better than our expectations and above the initial guidance at the start of the year.

We returned $4.8 billion to shareholders in 2025, including $1.6 billion in dividends and $3.2 billion through gross share repurchases. Overall, 2025 laid the foundation for our strong operating culture, grounded in excellence, accountability, and a fast operating tempo, enabling us to overcome external factors to drive profitable growth. We have momentum as we enter 2026, and I will walk you through the guidance on Slide 10. We expect organic sales growth to be approximately 3%, earnings per share ranging from $8.5 to $8.7, and free cash flow conversion of greater than 100%. We expect sales to accelerate for all business groups.

SIBG and TEBG grew 2.7% combined in 2025, and we expect this growth rate will accelerate in 2026, supported by ongoing commercial excellence initiatives, strong service levels, and continued new product introductions. We expect Consumer to return to growth in 2026. The business groups combined will expand margins over $450 million or 100 basis points, including $875 million from volume growth and net productivity across supply chain and G&A. This will be partially offset by headwinds from PFAS, stranded costs, and tariff impacts, as well as an increase in growth and productivity investments to $225 million.

This is on top of the incremental investment over the past two years, bringing the total investment from 2024 to over half a billion dollars. Corporate and other income will be lower by $50 to $75 million, or 20 to 30 basis points, largely from the wind-down of transition services agreements related to Solventum. Overall, we expect total company income to grow by $400 million at the midpoint of our 70 to 80 basis points margin expansion guide. Adjusted free cash flow conversion is expected to be greater than 100%, driven by strong operating income growth and a focus on working capital management. We plan to deploy capital effectively, including a gross share repurchase of approximately $2.5 billion in 2026.

Slide 11 provides a look at earnings growth drivers, which is primarily driven by strong operations consistent with our 2025 performance. Regarding cadence, we expect the rate of sales growth to increase through the year, with margin and EPS equal between the two halves. In the first quarter, the sales growth in SIBG and TEBG combined is expected to be higher than 3%. We will continue to monitor the recovery in our consumer business. Volume, productivity, and slight favorability in FX will more than offset the stranded costs, gross tariff impact, and increase in investments, resulting in high single-digit year-on-year earnings growth.

Before we open the call for questions, turning to Slide 12, I want to take a minute to highlight the progress we have made so far. We are trending ahead of our Investor Day targets we laid out a year ago. Our organic sales growth is accelerating due to our investment in growth and commitment to commercial excellence and innovation. Our relentless focus on operational excellence is resulting in strong operating margin expansion and sustained earnings growth despite pressures such as soft macro, tariffs, and stranded costs. We continue to be a consistent generator of cash that allows us to effectively return capital to shareholders while maintaining a healthy balance sheet.

Not too long ago, our growth rates were trailing the macro. Now we are progressing ahead of our medium-term commitments of a billion-dollar growth over macro and a 25% operating margin by 2027. While we are focused on executing these commitments, we are also broadening our horizons to the out years, ensuring our transformation efforts position the company not only for the short term but for sustained profitable growth well past 2027. This strong performance is a credit to the expertise and the commitment of the 3M Company team, and I thank them for their hard work and dedication. With that, let's open the call for questions.

Operator: Ladies and gentlemen, if you would like to ask a question, please press 1 on your telephone keypad. If your question has been answered and you would like to withdraw, please press 2. If you are using a speakerphone, please lift up on your handset before entering your request. Please limit your participation to one question and one follow-up. Our first question comes from the line of Jeff Sprague with Vertical Research.

Jeff Sprague: Please proceed with your question. Hey, thank you. Good morning, everyone. I have two questions, one longer-term and one shorter-term. Hey, Bill. Just back to your slide six, as you said, you know, all these things are going on to varying degrees simultaneously. But the pivot to priority verticals, you know, sort of jumps out to me, obviously, not the first time we have heard that.

But I just wonder if you could put into context how much of that pivot is sort of addition by subtraction versus sort of investment focus growing and bulking up sort of the areas that you view as the priority and maybe sort of what percent of your current revenue base or business base would you say is in that priority bucket?

Bill Brown: Good morning, Jeff. Great question. So we have been talking about our priority verticals going back a year, actually, to February. You know, it is a little bit north of 60% growing. Frankly, because of the investments we are making. I put it in two pieces. One, we spent the last year and a half focusing a lot of our internal investments on the priority verticals. Now probably 80% of what we spend on R&D is aligned to NPI in the priority verticals. And of course, you know, they are defined as ones that are growing faster where we, you know, have good margin potential as well in the business, where technology brings differentiation or right to win.

That has been the pivot in the organization. Over time, as we think about what the portfolio is going to look like for us to get to a much better sustainable organic growth rate for the overall company, we have got to structurally adjust the portfolio, which means some pieces coming out. We have been talking about some of those pieces. We have said before, you know, about 10% of our company would be in places that are more commodity-like, and you know, we will probably think about what we want to do with those businesses over time. But as we do that, we will be pivoting both organically as well as inorganically towards our priority verticals.

Which is the nature of that chart. It shows that is an evolution over time and again. It is not necessarily sequential, but that is kind of the overall flow of how we think about creating value here at 3M Company.

Jeff Sprague: Yeah. And then just thank you for that. Just on the very near term, you know, the flat view on US IPI, you know, it is kind of a tough slog out there. Right? But your industrial businesses do seem to be performing well, right? Abrasives and some of the adhesives, electrical businesses. So I guess there is some outgrowth there. But I guess just the nature of my question is, just a little more color on how you see the year kind of starting out.

Anurag gave a little bit of color, but you know, did we start soft here in January and, you know, do you see things sort of kind of picking up off a low base here as we exited the year?

Bill Brown: Yes. So last year, I mean, the exit rate was pretty solid actually across the businesses. And you know, Anurag and his comments talked about the acceleration from a 2% to 3.6% across TEBG and SIBG as we went from the first half into the second half. Yes, IPI is softening both in the US as well as in China, those important markets for us. Certainly. But we do expect our overall industrial businesses to remain pretty solid. I pointed out a couple of watch areas. One is in auto builds. You know, auto builds were around 3.8% last year. A little weaker in Q4. A lot of it was China.

But overall, it will be says right now down 0.3% as much as you can believe the numbers, you know, and not so good across the, you know, all of the So that auto was a little bit softer. We have to watch that. Consumer electronics are looking a little bit more flattish in terms of the overall macro forecast. Of course, we believe in our business electronics will continue to grow. We still see that to be overall electronics up mid-single digits for the year. And, of course, you know, we are watching very carefully what happens in the US consumer market. Right now, it feels subdued.

We had a very, very good December, although Q4 came in down 2.2%. So it dropped the year to being negative for consumer, but December we typically see the third month pretty good, but it was up double digits over the prior year in December and, you know, early in January. Again, it is early this year, you know, we are looking okay. So, you know, that is sort of the landscape, but I do see that even though IPI is coming down, you know, our commercial initiatives, our NPI initiatives, it is going to allow us to get to outperform that macro, and we expect that to accelerate in '26 from what we have experienced in '25.

Jeff Sprague: Great. Thanks for that. You bet, Jeff. Sure.

Operator: Our next question comes from the line of Scott Davis with Melius Research. Please proceed with your question.

Scott Davis: Hey, good morning, guys. Good morning, Scott. Thanks. Thanks for the detail. I guess, I do not think you mentioned inventory levels, customer inventory levels in the prepared remarks. And just as we exited 2025, where is your sense of where your customer inventory levels were or are? I guess now kind of point of reference kind of pre-COVID post-COVID kind of the new normal versus kind of pre-COVID? Just a little color around that, I think, would be helpful.

Bill Brown: Sure. That is a good question. So on the industrial channels, it is pretty normalized. You know, it is in the sort of sixty-day range, you know, a little bit more than that. But as we would expect it to be, you know, as we were selling out in Q4, we do watch POS out of our channel partners, and they were selling through. So even though we had good sales into the channel, we also saw good sales out of the channel. So pretty good actually on the industrial side. That is good.

On the consumer side, you know, on the CPG side, it was a little bit elevated early in the quarter, but we had very strong growth in December. And inventory started to come down and normalize. Still a little bit elevated as we exited the year, but not as concerning as we were sort of at the beginning of the quarter. So overall, industrial pretty good, consumer getting normalized as we speak.

Scott Davis: Okay. Fair enough. And then guys, what is the pricing strategy right now? I mean, it kind of when just listening to the prepared remarks, sounds like new products is where you lean in on price or at least try to get a positive mix shift there. But is there also a pricing strategy around getting an annual bump up perhaps that maybe you did not get historically, but going out with pricing increases on January 1, particularly where you are going through distribution?

Bill Brown: So, yes, good question. So for the year, we had expected to be about 70 basis points last year stepping up first half, second half. As we are covering some of the tariff headwind. We saw that in the third quarter, and the fourth quarter was a little bit lighter because of the consumer market and the promos and discounts that we provided there to stimulate that business. So overall, we were a little lighter on pricing last year than we had expected, but still very solid. The place where you get pricing generally speaking is in SIBG, and that was solid. That remains strong. We can continue to see good pricing movement here going into 2026.

You know, we expect it will be about eighty basis points more or less in 2026. A lot of it is SIBG. There are a couple of threads here. One is we do continue to cover material inflation. You know, two, we continue to tighten down our pricing governance, making sure across all of the industrial businesses, that when we give pricing discounts, we get the volume we would expect in giving those discounts. And then third, as you pointed out, Scott, is the pricing we should expect to get when we are launching new products. This is an area of opportunity for us over the medium and longer term.

I think we are okay on this, but we could be a lot better. There are pockets where we are very thoughtful in pricing to value, but I would not say that today that is over all of the NPI we are launching. I think it is a long-term opportunity for the company.

Scott Davis: Alright. Best of luck this year, guys. Thank you. Thank you. Thank you, Scott.

Operator: Our next question comes from the line of Julian Mitchell with Barclays. Please proceed with your question.

Julian Mitchell: Hi, good morning. Maybe first off, I just wanted to understand the degree to which, if any, there was a back-end loading, in the guide. It seems like you are expecting about 6% EPS growth year on year in the first half. So not that different from the full year. Just wanted to check that and how you are starting out in the first quarter. Should we expect the consumer business to still be down, for example, and then that picks up steam through the year?

Anurag Maheshwari: Right. Thanks, Julian. Anurag here. So I would say in terms of EPS growth, expect the first half and second half to be equal. So as I said in my prepared comments, the EPS will be equal between the first and second half, which implies a similar growth rate as well. And if you look at what I said is in the SIBGTE, given the exit rates, we do expect revenue to be over 3% in the first quarter. The CPG is an area we will watch out, and you will probably see that part of the revenue go through the course of the year.

But materially do not expect the rate of growth to be significantly different between the first half and the second half. And if I look at productivity as well, it is pretty even loaded across the four quarters. So I think as we sit here today, we feel that it is a fairly even loaded quarterly cadence for both revenue as well as EPS.

Julian Mitchell: That is very helpful. Thank you. And then just my follow-up would be around that sort of interplay, and it has been touched on a couple of times, but between the macro and the self-help initiatives. So when we are thinking about the guidance for a deceleration in IPI in the U.S. this year, but an acceleration somewhat in 3M Company's own organic growth rate. Is there an impression that is really all self-help initiatives that you mentioned and the outgrowth or the acceleration in the second half of 2025? Is your impression that was all self-help driven as well with nothing from the macro?

Just to understand how much you are sort of putting on your own shoulders versus relying on the external environment for this year?

Bill Brown: So Julian, for the question. Let me maybe frame it by talking about a little more granularity, the billion dollars over macro. Talked about over at the investor day over the next three years, and Anurag mentioned it in 2025, the you know, our growth came in at 2.1%. You know, we look at the overall macro to be around a point and a half. That is IPI GDP with some sectors that were a bit weaker. You know, was where we see it. So we saw ourselves with about 60 basis points of help performance versus the macro. If you just run the math that gives you about $150 million.

So a little bit better than we had expected to be a 100 million over macro last year. You know, and the majority of that probably 75% of it or more was commercial excellence. Less of that was new product introductions. But we did say that would start to even out in an or innovation would take over in that third year. And that is in fact what we are seeing in 2026. So we are guiding here at 3%. You know, we expect the macro, in 2026 to be a little bit better one five, maybe one seven range, something like that.

So you know, our outperformance, you know, this year versus the macro is more like $300 million or more. And that is roughly half and half between NPI and commercial excellence. So that is how we see this playing out. Yeah, the back half of the last year, you know, did show that. We did outperform the macro. A lot of it was that your phrase, Julian, was carrying it on our shoulders. And you know, we expect to see more of that, you know, coming into 2026. We are launching more projects, which is very good. We are getting a lot more granular tracking the incremental revenue coming from class threes, fours, and fives.

And as we look out into next year, you know, we are pretty confident that those are going to start to move the needle for the company, which is why we feel good about the outgrowing the macro here in '26.

Julian Mitchell: Great. Thank you. You bet.

Operator: Our next question comes from the line of Joe O'Dea with Wells Fargo. Please proceed with your question.

Joe O'Dea: Hi, good morning. Thanks for taking my questions. Good morning, Joe. Wanted to start on footprint optimization and if you can give a little color between factories and distribution centers, how you are thinking about targets for footprint reduction or consolidation in 2026? Both in terms of kind of number of facilities and as well as op profit impact. And then any color around segments and regions where we would see the biggest impact there?

Bill Brown: So look, that is all part of our broader transformation agenda. We are just starting on that as we speak. We did see some announcements at the back end of last year. We announced one small facility last week in our network. You know, we ended the year around about 108 factories. We have several, about seven coming out with the sale of precision grinding and finishing. So call it about 100 factories. You know, that will come down over time. I cannot size it for you today. You know, we will be making some investments in '26 to restructure that network. But keep in mind, things are three, four, five-year payback.

So we will start on it, accelerate into '26, accelerate in '27. But this is really about building that margin runway to grow beyond 25% in '27 on in terms of operating margin. So you know, we will consolidate this network. It will be factories and distribution centers. We are making some progress on DCs as well. But I will not be able to size it for you today in terms of the specific numbers. But that is the plan that is the trajectory we are on here.

Joe O'Dea: And then just wanted to touch a little bit more on consumer. If you could elaborate on what you tracked over the course of the quarter, kind of early into this year, sort of a step down in demand trends versus what maybe was a little bit more transitory and just kind of how that is pacing. And then separately, just with the focus on memory chips out there, I think you said consumer electronics, we expect to be up mid-single digits, but any impact you are seeing in the market tied to that?

Bill Brown: So on the consumer market, as I mentioned earlier, we as we entered for first of all, for the first nine months of the year, we are about 30 basis points of growth in each quarter, which was pretty consistent, and that was above what we saw the macro. It was a good time to return to growth because it felt very positive about that. And we had expected that we would see the similar trajectory going into the fourth quarter. That did not happen. We saw October and November being a little bit light. Your sell-through the channel was a bit light, POS was light. So inventory started to come up a little bit.

We started to see that reverse a little bit in December. So December, the orders were okay. You know, growth was double-digit over the prior year, December. Holiday season was a little bit muted, I would say. You know? So overall for Q4, we came in at down 2.2%. And as I said, as we turn the corner into, you know, into January, it is very, very early. We are only a couple of weeks in. You know, we are trending as we would expect it to be. So I cannot really comment too much about that. We will say more over time, but that is a consumer.

Again, I would just characterize it as being relatively soft, like bumping around, you know, flattish as we ended the fourth quarter. So on electronics, overall we have, so it is consumer electronics business, we provide adhesives, we provide films into that area for foldable devices, for debondable devices, a lot of NPI going into that space. We are focusing on growing our position in the mainstream market. 3M Company as a whole in consumer electronics is more like 80/20 or 70/30 premium to mainstream, and the markets, the opposite of that. You know, we do see an opportunity to grow and penetrate mainstream. Some of that is in China and we are making good progress.

So a lot of the NPI that we are launching we are penetrating into a lot of China OEMs and Asia OEMs. In that mainstream market. And I think we are starting to gain some share there. So that is why we see that business for us when we add in electronic in semiconductor, data center, all electronics to be up mid-single digits here coming into 2026, similar to what we saw last year.

Joe O'Dea: Thank you.

Operator: Our next question comes from the line of Steve Tusa with JPMorgan. Please proceed with your question.

Steve Tusa: Hi, good morning. Hey, good morning, Steve. Just on that electronics point, so the reported revenues were down sequentially and also year over year. There do we just adjust that back to get to that mid-single digit for the fourth quarter? I mean, you said it was strong, but what was kind of the organic rate of growth? It is tough to tell from the sub-segment disclosure.

Bill Brown: Yeah. It was in the mid-single digits. You know, what we are looking at in the tables is with PFAS. We exclude the PFAS out of the results. So when you exclude that, it is mid-single digits.

Steve Tusa: Okay. And then when you are expanding into this mainstream area, is there any dilutive impact to margins at all? Or you kind of make up for it in the other end by being more efficient with some of the initiatives you are working on?

Bill Brown: No. We are not seeing it being more margin dilutive. As we innovate here, develop products designed to cost, it is an important push that the team is making is designing more cost-effective products. Now we are not seeing any margin degradation. And so far, it has been good. It is early. You know, but it is the push we are making. And again, a lot of NPI in that space.

Steve Tusa: Okay. Sorry. One more just for this year, the $500 million in I guess, litigation costs in 2025, how do you expect that to trend in that adjustment to trend in 2026?

Bill Brown: It is probably going to be in line with that. I cannot really tell you if it is going to be up or down. I mean, it depends on what happens in the overall docket, but I would expect it to be, you know, pretty similar to that.

Steve Tusa: Okay. Great. Thanks a lot.

Operator: Our next question comes from the line of Andrew Obin with Bank of America. Please proceed with your question.

Andrew Obin: Hi, guys. Good morning. Hey, good morning, Andrew. On SIBG, growth in 26, I think last quarter you had the slide five that showed SIBG growth correlation to improving OTIF, new product introduction, and you sort of can see in the fourth quarter on a two-year stack clearly, is more momentum. So given that comps in the first half are going to be easier than in the second half, but at the same time, we have seemingly good momentum with self-help. Should we see first half stronger growth than second half, or should the growth be fairly steady year over year throughout the year?

Bill Brown: So, Andrew, it is a very, very good question. We do see really good momentum in SIBG as it went from the first half to the second half. And you know, I could see where you are going, and I will pass that message on to Chris. I am sure he is listening as well. You know, the reality is there is good momentum. Really good progress on commercial excellence. We are launching more projects there. You know, the only caveat is, you know, we as I talked about earlier, you know, we do see a US IPI a little bit softer. We know the roofing business, you will experience a trough really in Q4.

It was weaker than we would expect, quite a bit weaker than we would expect. And that is a small piece of the SIBG business. I think that weakness will drag into the front half of this year. So there are going to be some offsets, but yeah, I mean, largely, I think you are heading in the right direction. I think you know, SABG is performing really well. We would expect to continue that trend here in 2026.

Andrew Obin: Thank you. And just to follow-up on electronics. You sort of talk about expanding into mainstream and this sort of echoes strategy from the days of George Buckley. The pyramid strategy. Is this just the focus on consumer electronics? Or are you thinking of sort of you know, tweaking it and implementing it beyond consumer electronics the sort of mainstream strategy?

Bill Brown: No. I am speaking today basically on electronics. And, you know, I think you have commented before that this strategy was embarked upon in the past. You know, look, this has to be a very thoughtful way of going at this. We have to make sure that all of our infrastructure, our designs, our sourcing, how we manufacture, how we ship, how we price, all is geared towards going after that segment, which is quite big, you know, but making sure we do it profitably. So it is a bit of a business model shift as well. So I draw you back to what we are trying to do in our transformation agenda.

A lot of this business model shift is shifting our cost structure both G&A as well as on the factory side. And if we do that and we bring that cost out, that does allow us to lower the water level of our cost and attack these interesting and growing segments, you know, at profit rates that we have today. So that is where we are going. We are pushing ahead in consumer electronics. Could it go beyond that? We will see. But right now, the comments are specific to consumer electronics.

Andrew Obin: No. Thank you very much. Nothing wrong with that strategy or stock kind of outperformed under George Buck. Thanks a lot. Yep.

Operator: Our next question comes from the line of Amit Mehrotra with UBS. Please proceed with your question.

Amit Mehrotra: Thanks. Morning, everybody. Good morning, Amit. Anurag, I guess I wanted to ask about incremental margins for this year. The implied is sort of in the low 40%, which is not that much above the 30 to 40% kind of, you know, core or organic. So on the growth. So I am just kind of curious, you know, what the productivity assumption is, what the offsets are from stranded costs. Maybe I am double counting. Maybe some of that is already included in the 30, 40%. But you can unpack that for us, I think that would be helpful. And then on the first quarter specifically, you said high single digits.

Not to be nitpicky, but are we kind of above $2 share in one Q? Like, any finer point would be helpful.

Anurag Maheshwari: Okay. Great. Thanks for the question, Amit. Just firstly, you look at both volume and productivity in 2026, it is going to be higher than what it was in 2025. Yeah. So in '25, between volume and productivity, we had about $750 million of operating income increase, and that was a 2.1% organic revenue growth. With 3% growth, the $200 million of volume will now become closer to $250 million, and productivity actually goes up from $550 million to about $600 million. So overall, we are going to see about a 125 to $150 million increase between volume and productivity in '26. And the productivity is going up on three real buckets around there. First is on supply chain.

We expect half of that to come out of the supply chain, which is continued cost of poor quality, bringing it down, procurement, you know, managing a four-wall spend in the factory and logistics. There is about a $150 million of indirect expenses. We did a good job in '25. We will continue to do that in '26. And another $150 million in G&A efficiency as we look at our processes of optimization and so on. So overall, I would say that the incrementals between volume, between productivity, and the volume growth is going to be higher. What is offset in '26 is the half a billion dollars, which is being offset in '26. One is a pickup in investments.

Last year, we did $185 million. We are going to do an incremental $225 million this year. The stranded cost goes up from $100 million last year to $150 million this year. So I would say those are probably the two biggest buckets, which would obviously, we have half a year of tariff as well, which is under $140 million. So you put these three together, that is half a billion dollars of it. Obviously, as we go into '27, a couple of them will not recur, but the incrementals overall are pretty good for 2026. Now on your first quarter, it is a very specific question that you are asking me.

What I would say is that as I spoke about volume and productivity, I said about $875 million, $900 million for the year. The first quarter is almost 25% of that. Right? So if you kind of run the numbers through and, you know, there will be a little bit of FX favorability in the first quarter given where we were last year. We run all of that through, it will be high single-digit EPS growth.

Amit Mehrotra: Okay. Thanks. And then just maybe a longer-term question for Bill. You have obviously given us a lot of metrics, whether it is OTIP or OEE. And I am kind of intrigued by this move to this design-to-cost approach in the R&D function. NPI is helpful, but it does not really capture kind of how the addressable market is changing based on incremental NPI side. I would be curious, one, how do you hold the R&D function kind of accountable to this cultural shift? And what can you kind of share with us in terms of the NPI coming out?

How effective that is in going after the 80% of the market that, you know, you are kind of not there in at the moment.

Bill Brown: So, Amit, I mean, good question. I will just hit it briefly. I think there are two pieces of it. One is the value engineering efforts that we are stepping up dramatically this year on to take costs out of products that are on the market today, which does require additional engineering work, disqualification work, there are things that have to happen generally speaking, to get those initiatives taking hold. You know, we also we had to drive that back into the overall design mindset in thinking of cost, you know, as we start developing products.

And that is the push we are making is thinking about early in the design process, which is the best time to be thinking about that. How we hold people accountable in R&D or anywhere through the company, product leaders, general managers, even me, is the quality of the business cases and making sure that the business cases are developed, you know, rigorously from the ground up with a good sense of what the costs happen to be, and you start with the design-to-cost mentality and holding people accountable to the results of what we are investing in, you know, based on these business cases where we are going to be pushing the company more this year. Thank you.

Operator: Our next question comes from the line of Nicole DeBlase with Deutsche Bank. Just wanted to circle back on China. I think you guys have embedded 4% IPI growth in '26 and that compares to like 6% in '25. I know '25 was like a pretty good year for you guys in China. You could just elaborate a little bit on what you are seeing in the region and where that deceleration is coming from for next year?

Bill Brown: So thanks for the question. China actually had a very good year for us, good couple of years. In '24, we were up double digits. Last year, we were up mid-single digits. It was a little bit lighter in Q4, but only because of, as Anurag had mentioned in his prepared remarks, the shift out of China smartphone production when you exclude that, the market, you know, the China business for us remained mid-single digits. And as we turn the corner to this year, yeah, the macro is softening a little bit. You know, what we are expecting, I think two points down year over year on IPI. At least as we see it today.

And the forecasts see it again, this could go in lots of different ways. You know, but we see that market to be more low to mid-single digits this year. Still growing, maybe not as robustly as we saw last year, but still low to mid-single digits. You know, the bottom line is we run China a little bit differently in the company, just like we do India. It is a hybrid model. So we have global business groups and a really strong, dedicated, driven local team. We are driving a lot of localization of R&D, localization of sourcing, we are attacking the market.

We have got six factories there, 5,000 people, and we have got people lined up to really drive that business. And I think we are performing well. And I would say we are outperforming it. I expect the same thing here in '26.

Nicole DeBlase: Thanks, Bill. That is helpful. And then obviously, had quite a bit of new noise from a tariff perspective. Over the weekend. So can you just confirm the tariff headwind that you guys are embedding in 2026 does not include any of this potentially new tariffs from Europe? And have you guys tried to quantify what that could mean to your business if they are enacted? Thank you.

Bill Brown: So, Nicole, great question. So what we are embedding in our guidance is the carryover effect of the $0.20 of gross impact that we saw last year. That is in and Anurag mentioned that is mostly in the first half of this year. That is what is in the guidance because that is what is in law. That is what is in practice today. And we are moving. Now the pieces that at least the president is now talking about relative to Greenland and new different tariffs on Europe. It is about eight countries. You know, they are talking about 10% in February, another 25% you know, mid-year or something like that.

You know, for us, the trade flows between the US and Europe is around a billion dollars. We are a net exporter. So we export $700 million into Europe. We import back about $250 million. You know, if you just run the numbers at 10% and then growing up to 25%, you know, you can get to something in the order of $60, $70 million. But that is as it over the course of the year, you know, we will see some of that going in inventory. We will see some of that dragging into 2027.

So if that plays out exactly as we expect and evolve the trade flows I mentioned, you know, it could be a $30 million, $40 million impact this year. But again, you know, we are a long way from that becoming an executive order. So we will see. We are watching it. As everybody else is. That is not yet in our guidance.

Nicole DeBlase: Thank you, Bill. I will pass it on.

Operator: Our next question comes from the line of Chris Snyder with Morgan Stanley. Please proceed with your question.

Chris Snyder: Thank you. I wanted to ask about consumer. Bill, I think you said December was up double digits. So with the quarter down 2%, I guess October November would be down high single. So really sharp positive rate of change there. I guess, is there anything to call out with the comps? Did December just have a really easy comp? Because it does not seem like you guys expect much of that strength to continue into Q1. Maybe, you know, one month does not make a trend, so too early. But any color there would be appreciated. Thank you.

Bill Brown: Yeah. We typically see, you know, seasonality within the quarter in CBG to be, you know, lower in the first couple of months and then higher in the third month. We saw that pattern play out each quarter last year, including in Q4. This one was a little bit different. It was a little bit weaker in October, November than we would have expected. Then a little bit stronger in December than we would have expected. I think part of it was, you know, the team pushing pretty hard, a lot of really good work that the team did in promotional programs with our large retailers who also were, you know, striving to drive their growth.

And that combination, I think, paid some dividends in December. So we grew a little bit better than expected in December, a little bit weaker in October, November. You know, I would not read too much into the trend so far in the first couple of weeks. Now let's see how the next, you know, number of weeks and maybe a couple of months go. But at least it seems to be holding okay to what we had expected in the first couple of weeks. So I would not read too much into that at this moment, Chris.

Chris Snyder: Thank you. I appreciate that. And then if I could follow-up on the US IT assumption, you guys are calling for flat in '26, after 1% growth in '25. You know, when we look at the quarterly US industrial numbers, they seem to be strengthening as '25 went along. You know, you guys are obviously calling for things to soften. You know, do you see anything, you know, out there that is softening? You know, is there just some conservatism in that assumption? Thank you.

Bill Brown: So you are right. I mean, if you look at IPI through the course of last year, you know, what we are seeing backward looking, it did improve sequentially over the course of the year. It was a little bit stronger in the back half than it was in the front half. You know, according to forecast, it looks like it is flattish in 2026. So we are reading those numbers. You know, for us, you know, as I mentioned before, we do our industrial businesses to continue to perform very well. You know, the two areas within industrial that we are watching, one is in auto aftermarket.

Looks like it is still remaining relatively soft or expected to be soft on repair claims, both in the US and Europe. As well as in the roofing granules business because of the housing market, consumers not looking to replace the roofs right now. You know, that business has been a little bit soft. In fact, it was very soft in the fourth quarter. We expect some softness in the beginning of this year. But again, I just come back to with the execution of the team in commercial excellence and NPI, I think they are doing a very good job. I expect it will outperform that industrial macro as we get into '26.

Chris Snyder: Thank you. I appreciate that.

Operator: Our next question comes from the line of Andy Kaplowitz with Citigroup. Please proceed with your question.

Andy Kaplowitz: Hey, good morning, everyone. Hey, good morning, Andy. So as you said, you originally forecast N25 averaging high teens growth from that rolling five-year new products. You averaged closer to mid-twenty percent. It is obviously one of the metrics leading to your market outgrowth. But what could it average in 26%? And does it suggest you get higher than that $300 million or higher as you just said in terms of market outgrowth?

Bill Brown: So we do see a higher in '26 than '25 in terms of market outgrowth, and it is exactly from the progress made on innovation and five-year new product sales coming up. You know, again, when we look at the '26 numbers, you know, we assess the macro as it affects 3M Company to be on the order of around 1.7%. We are projecting growth of the company, organic growth of 3%. You know, that delta, that outgrowth is over $300 million above the macro. Half of that is coming from new product introductions, both those that were launched at the '25, we had a very good back half. As well as those that we expect will launch in 2026.

So I feel really good about the trajectory we are on and the momentum we are building here. This is really, I think, moving the needle, you know, with a little market tailwind, we will see even greater pickup, but I feel good that we will outgrow the macro next year. At this year at '26 as a result of some of the initiatives we have in place on NPI and commercial excellence.

Andy Kaplowitz: Got it. And then you were able to essentially hold the line, I think, all year in '25 in consumer in terms of growing margin nicely. Despite flat sales. And the understanding that Q4 organic sales, it seemed like you still had a relatively significant degradation in margin performance. So could you give us more color on that? Was it mostly just the increased advertising promos that you talked about? And can you talk about your confidence level? And growing consumer margin or at least holding up in '26?

Bill Brown: Yeah. So good question. It was the promos and discounts that were offered. I think for the whole year, we did very well. We were up 130 basis points. We were down 110 in the fourth quarter. But again, for the year, good. The team is doing an excellent job of focusing on the priority brands and appropriately investing in Admir's, the NPI launches in CBG were really good, up double year over year. And I would expect margin growth as we get into 2026 as well as a really level out the business. So I feel pretty good about the structure that we have in place in CBG and the strategy that is being executed.

And with a little bit of consumer recovery, you will see that coming through in a CBG business this year. So I appreciate that question. Thank you.

Andy Kaplowitz: Thanks, Bill.

Operator: This concludes the question and answer portion of our conference call. I will now turn the call back over to Bill Brown for some closing comments.

Bill Brown: Well, thank you, everybody, for joining again today. And thanks to all of the 3Mers for their efforts, for their dedication, in executing against our priorities and delivering value to both our customers as well as our shareholders. Thank you and have a good day.

Operator: Ladies and gentlemen, that does conclude today's conference call. We thank you for your participation and ask that you please disconnect your line.