Ladies and gentlemen, thank you for standing by. Welcome to the 3M third quarter earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded Thursday, October 22, 2015. I would now like to turn the call over to Matt Ginter, Treasurer and Vice President of Investor Relations at 3M.

Thank you and good morning, everyone. Welcome to our third quarter 2015 business review. On the call today are Inge Thulin, 3M's Chairman, President and CEO; and Nick Gangestad, our Chief Financial Officer. Each will make some formal comments today, and then we'll take your questions. Today's earnings release and slide presentation are posted on our Investor Relations website at 3M.com. Please turn to slide two for a list of upcoming 3M investor events. On Tuesday, December 15, we will discuss our 2016 business outlook on a conference call beginning at 8 AM Central time. Please note we will not be hosting this year's outlook meeting in New York, as has been our practice in recent years. The conference call should last approximately 90 minutes, so please plan accordingly. Also, on March 29 of next year, we will be hosting an Investor Day at our headquarters in St. Paul. Lastly, note the dates for next year's earnings calls, which are scheduled for January 26, April 26, July 26, and October 25. Please take a moment to read the forward-looking statement on slide three. During today's conference call we will make certain predictive statements that reflect our current views about 3M'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-K lists some of the most important risk factors that could cause actual results to differ from our predictions. Please turn to slide four, and I will hand it off to Inge. Inge G. Thulin - Chairman, President & Chief Executive Officer: Thank you, Matt, and good morning, everyone. And as always, thank you for joining us. 3M delivered solid operational performance in the third quarter. In an external…

And our first question comes from the line of Scott Davis of Barclays. Please proceed with your question.

Hi. Good morning, Inge and Nick. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Good morning, Scott. Inge G. Thulin - Chairman, President & Chief Executive Officer: Good morning.

I think a lot of us are trying figure out what – more macro I guess than 3M specific, but this is the second quarter in a row where you've taken down your top line core guidance. I'm trying to get a sense of how much of the decline you guys think might be related to inventory destock versus actual sell-through, and maybe just the state of where you think inventories are right now because clearly folks are a little bit more cautious. So you can see it would be logical that folks would be decreasing inventories right now, I suppose, right? Inge G. Thulin - Chairman, President & Chief Executive Officer: I think it's a combination, Scott. I think first of all when you look upon the decline in terms of IPI [Industrial Production Index] growth, we have all seen that going down quarter by quarter during the year. And that is related both to United States and to China and Germany, you can say basically on a global base. I think that is one impact. And then, of course, enterprises around the world look upon the balance sheet and the cash flow and type of work down there, the inventory as well. So I will say when we look upon our performance in terms of growth, yes, it slowed during the year, but we don't believe and we know that we are not losing out in terms of penetration or market share. But I think it's a combination of both of them. So we clearly see – we're ending out the year I will say at the lower global growth rate in the economy versus what all of us anticipated as we went into the year. And when I look upon that, I feel personally very good of how we as a team, and I'm talking now about all the 90,000 at 3M, have been able to manage that through and improve most of the metrics when it became more of a challenge for us to grow. But we are growing. We are growing and we have margin expansion and very good cash flow. But also your question, I think it's combination of both. And I think people would like to look out a couple of years now, what will this mean? And I think everything you see that we have been doing this year in terms of our portfolio work and our investment in R&D and the business transformation in addition to the announcement today of the restructuring is for us to be prepared as we move ahead in order for us to give good return despite maybe something that would be difficult for us to control, which is the growth in IPI and GDP. So I hope that helps.

It does, so help us understand. How do you plan for this type of an emerging market slowdown that we've seen? Really the last time we had a major EM dislocation was in the 1990s. It was a long time ago. And it's impossible to hedge the local currencies. It's tough to raise prices when you have – when you're trying to raise prices in an economy and a recession. And then at the same time, some of these countries like Brazil are hard to restructure. It's not easy to fire people there either. How do you plan for it, and how do you change? Do you just keep moving forward like you always have, or do you start to think in terms of taking real fixed assets out and disinvesting in some of these areas? Inge G. Thulin - Chairman, President & Chief Executive Officer: You just not continue as you have done in the past, of course, because the landscape has changed and then you have to, as I always say, if you go out in a forest and you go out with your map, and the map in the forest doesn't connect any longer, the forest is always right. So you cannot continue with your map if you think about that as a business plan. So we are doing that. When I look back over the years here, it's not something that we react to just today based on a quarter that is softer in one way or another. If you go back to China, for instance, we have not added people there for 12 to 18 months. We didn't reduce by definition, but we adjusted and slowed down the way we added people. Brazil today, you are correct. Brazil today will still, in my view and…

Completely understandable. Thank you, guys, I'll pass it on. Inge G. Thulin - Chairman, President & Chief Executive Officer: Thank you, Scott. I hope you're doing well.

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

Good morning. Inge G. Thulin - Chairman, President & Chief Executive Officer: Morning, Andrew. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Hey, Andrew.

Just instead of asking a question on margins, I just want to zero in on Electronics & Energy. If we go back to 2013, the margins bottomed out at 15%, and you reported a margin almost 25%. Could you just focus on that business and explain to us what is it you were able to do there, and how does it translate into changes that are taking place at 3M at large? Inge G. Thulin - Chairman, President & Chief Executive Officer: Andrew, good morning. Yes, you're right. I think it started out like 15.7% or something, and now it's an incredible improvement relative to margins. What had happened is, first of all, we realigned the businesses, as you maybe recall. We did that in late 2012. And one of the reasons for that was we reduced the number of business groups. So we tried to build out relevance for our customers. We reduced the number of divisions, meaning tried to get out more efficiency, more productivity, and get more alignment with the market and the customer. So we were able to respond faster with technology platforms. If you take this specific business, Electronics & Energy [EEBG], we went from eight or nine divisions to four divisions. We relentlessly looked upon the structure of it and we reallocated assets in a better way that we had for that specific business that they have to utilize maybe in between three different business groups. Now we add it together so they could manage it, which helped them to drive efficiency in the manufacturing, be able to respond much faster to customer demands, and also they address a lot of, I would say, issues in the portfolio. So you remember, we had this analysis where we had Heartland division strategic – or push…

And a follow-up question on China. Do you think you will see any benefit from RMB devaluation offsetting just weaker macro there? It's an export business, as I understand. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Andrew, we're watching for that. And the change – the movement in the renminbi has been fairly modest. We're not seeing a movement on that. And if it is we expect it to be minor, although we do see it as a positive development for that portion of the business, but minor at this point.

Thank you. Inge G. Thulin - Chairman, President & Chief Executive Officer: Thank you, Andrew.

Our next question comes from the line of Nigel Coe of Morgan Stanley. Please proceed with your question. Nigel Coe - Morgan Stanley & Co. LLC: Thanks, good morning. Inge G. Thulin - Chairman, President & Chief Executive Officer: Morning, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: Just wanted to pick up on the inventory question. You called out inventory headwinds in 2Q. Clearly, it's impacting 3Q as well. Do you have any sense on how deep we are into this correction and whether we might get into a situation where sell-through is somewhat equal to sell-in? Inge G. Thulin - Chairman, President & Chief Executive Officer: It depends on which business group or which market you are in. But I will say that my own observation when I look upon it for the last three to five years generally speaking there's a much better correlation in between sell-in and sell-out for most companies and most markets; and I will say, if you think about retail and consumer, much, much better. So you can see a slight change from ending of a quarter to a new quarter based on maybe the season and so forth. But I would say it's generally speaking very well balanced today, which is also then giving us an opportunity to be more efficient in fact relative to our manufacturing and production and so forth. But to give a timing on it is difficult. I cannot do that, Nigel, to be honest with you. It's very difficult to do. But I think overall, management of inventory is handled much, much more effectively generally speaking, which is good for all of us. Nigel Coe - Morgan Stanley & Co. LLC: Okay, that's very fair. And then just to home in on 4Q, it looks like…

Our next question comes from the line of Steven Winoker of Bernstein. Please proceed with your question. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Thanks and good morning, guys. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Good morning, Steven. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Hey, I just want to follow up Nigel's question quickly on the pricing point. You mentioned, Nick, that 75% was FX-related. So as you look at unit volumes versus non-currency-related pricing going into the fourth quarter, are you therefore implying a pickup on unit volumes at this point? Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Our range for the year of 1.5% to 2% does not anticipate a very significant movement in price growth in the fourth quarter from where we've been running in the first nine months of the year. I think we're expecting it to be very close to where we have been running so far this year. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Okay, including unit volumes. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: And then unit volumes will, depending on the implied range for fourth quarter that 1.5% to 2% says for the year, unit volumes could range to slightly negative to slightly positive in the fourth quarter. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Okay, great. And then on the restructuring and ERP pacing, so one of my questions here is you've called out that ERP, the savings from ERP over time, I think you mentioned again in this call $500 million to $700 million annually, was it? And the restructuring, you've got another $130 million in 2016. First of all, is that incremental…

Our next question comes from the line of Deane Dray of RBC Capital Markets. Please proceed with your question.

Thank you. Good morning, everyone. Inge G. Thulin - Chairman, President & Chief Executive Officer: Good morning, Deane. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Hi, Deane.

I'd like to come back to a question I had asked when you first made the Polypore announcement, and so we tabled the question till it closed. And I'd be interested in hearing the ways you're envisioning leveraging this ultra-filtration technology across 3M. It reminds me a bit of Ceradyne and the way all the different product areas that would benefit from ceramic technology. So how do you expect to leverage Polypore? I know it's in Industrial, but I would imagine there are some interesting applications on the Health Care side. Inge G. Thulin - Chairman, President & Chief Executive Officer: Yes, you are correct. It's housed now, if you like, in the Industrial business group with very close linkage to our Purification business because maybe from a commercialization perspective see the fastest opportunity for us to leverage both of those businesses. When you look upon the technology and where it can move out, I will say it's maybe in life sciences. We don't call it life sciences, but it's a combination of Health Care and biotech where there are big opportunities for us. And we do business in the biotech area, not necessarily with our Health Care business group, but very much with the Purification business, and there are big opportunities for us that we can build out. But at this point in time, the total focus is short term to integrate the business, make sure we get full leverage based on what we have paid, and can give back to the shareholders based on what we paid for that business. But you're right. I think you have more opportunities in businesses going versus Health Care, life sciences, biotech, than you have for instance in Consumer and Safety & Graphics. But we take it seriously now in terms of integrating the business and execute the plan as a first step. So we don't migrate the resources in R&D and start to – they need to present very specific programs and opportunities in order to get the resources to expand the business as we move ahead. So more to come, Deane, we are now focused to integrate them and integrate the model and execute.

And then second question, I was hoping you could share with us some of the decision-making and the timing on the move of Health Care IT into strategic review. So what prompted it? What changed? And then so we have the vernacular correctly within how you frame your businesses, I would assume this had been in Heartland, not push-forward. And so what bumped it into strategic review and when? Inge G. Thulin - Chairman, President & Chief Executive Officer: First of all, it was in push-forward. It was not in Heartland. It was in push-forward. And I think the important thing that was for sure not in the first category under strategic review. It is a business that is doing very well. I think it's our responsibility to look upon all businesses to say can we get better benefit in a different business model. Is there more value that can be created in a different way for some of our businesses? This business could be one of them where we would like to evaluate. And as you know, it could be a spin, it could be a sell, or we keep it. We are making that evaluation now, and we will know because I wouldn't like to move forward and ahead of our own process. And at the end of Q1, we should know how the outcome of that will be. If you go back and look upon – in my view at least, today we have a very good process in order to mesh our businesses and try to understand where we can leverage even more. And in some cases we have to ask the question. Can we lever more and can there be more return to shareholders in a different business model? I think that's my responsibility to do and I think it's our team's responsibility to do, and then we do it. So it's not always a business that is under-performing that you need to evaluate. Sometimes in a case like this, you have to look upon it. And it had been on my mind for some time, I would say, but I'm very careful to not overload the initiatives relative to the portfolio. My first objective was to make sure that we got all businesses to a respectable position. And I think we are there now, as you have seen as a result, in EEBG as well. And then there's a time for everything, and now we are here. We have announced it. We are transparent about it. And then we have to see at the end of Q1 what the next step will be. Any case, it's a fantastic business. If it's with us, if it's a spin, or it's sold, it's just fantastic. So there's nothing wrong with this business. And it takes courage to take a step like this in a business doing as well as this is doing.

Thank you. Inge G. Thulin - Chairman, President & Chief Executive Officer: Thank you.

Our next question comes from the line of Jeff Sprague of Vertical Research Partners. Please proceed with your question.

Thank you. Good morning, everyone. Inge G. Thulin - Chairman, President & Chief Executive Officer: Good morning, Jeff. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Good morning, Jeff.

Can we just come back to restructuring? Inge, as you had pointed out, you've done a lot of internal blocking and tackling in this consolidation of these segment divisions underneath the segments. How would you size what you're announcing here in the fourth quarter relative to the normal ongoing restructuring that 3M must do every day? Inge G. Thulin - Chairman, President & Chief Executive Officer: This is, of course, bigger. So if you're talking about where you normally type of challenge every step on the way, that's what you're talking about.

Yes. Inge G. Thulin - Chairman, President & Chief Executive Officer: So those so-called adjustments, I would say that's more an adjustment of the organization that you do. And you ask yourself the question every time you get an opening, do we need to replace it and so forth. This is more sizable at this point in time. And why now is very much that I feel now that we have a very good handle on our model in terms of operations. So it's like when you go through everything as you describe it, you have pieces that are moving the whole time in your portfolio, et cetera. Then you're coming to more of a sterilization. Now you look upon it to say okay, is there more that can be done and should we do it now? So it's 1,500 people. It's sizable, in my view, for each individual person that is impacted by it, so I'm very sensitive to the whole situation. But it's something that we need to do in order to build strengths on strengths. So people can view it as saying 1,500, is it a lot or is it not enough? For us it's perfect at this point in time. And I don't underestimate that because I understand the impact for each individual of those 1,500 that need to go away and do something different.

And as you've restructured these other segments though, then just ostensibly there's excess overhead and facilities. Those have just attrited down through this process, or would we expect that at some future date not too distant in the future there could be other moves like this? Inge G. Thulin - Chairman, President & Chief Executive Officer: I think, as I said earlier, in my view and our view is as we move ahead here, we have an opportunity in our supply chain area. And that will be maybe something we will talk about as we move ahead. But that's different in a way. That's about the whole model of us improving our balance sheet, our turns and reduced inventory and so forth. And if you do that as you go down the line, you cannot think about that there are less distribution centers maybe fewer manufacturing sites, et cetera. So the beauty with all that, despite we are doing very well, there are still opportunities in 3M in order to create value.

Great. And then just one really quick one. Was there any change in the monthly trends in your business, Inge? We've heard from some that July and August was okay, and then September was much more challenging. Did you see anything like that across your business? Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Jeff, this is Nick. No, no, we didn't. As we look at the three months, they were all very similar.

Thank you. Inge G. Thulin - Chairman, President & Chief Executive Officer: Thank you, Jeff.

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

Hey, good morning. Thanks for fitting me in. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Hi, Steve.

The Electronics margins were pretty strong despite the continued revenue pressure there. What's going on there in Electronics? And I guess where do you go from this higher base? Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Steve, Inge talked a little bit about this earlier about the margins going on there. A number of things of some of the consolidations that have occurred, the push on productivity and relevance with our customers, and building a business there that is not dependent on growth as a way to generate a margin in this range. That going forward, this is still a business that we see opportunities for growth in the future. So we continue to invest in this business. And as far as margins going further, I'm not ready to make a statement like that yet. But we continue to see this business growing and with margins that are at or slightly higher than the total company margins.

So I guess just stepping back to the macro a bit, I guess from your commentary, I just want to make sure that I'm reading what you're saying the right way. You're basically saying that there's not a lot of inventory dynamics going on here. So I guess as we look at the second half of the year with volume flat, is there any real impetus for a pickup as you move into next year? Or is this kind of the – look, this is the environment we're in, that's why you guys are taking restructuring? You're holding the line on price a little bit better than expected. I just want to make sure I parse out the macro comments and understand where your head is at on the degree of potential acceleration or good news that could come moving beyond the fourth quarter. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Steve, as we look forward, we remain constructive on our view of the global economy for 2016, albeit we're expecting a similar slow growth environment to what we're seeing in 2015. You're talking, when you talk about, ask about impetus of other things changing, as we look at 2016 for us, in addition to that slower growth organic world, we are expecting raw material benefits to continue into 2016, but at a lower level than what we've seen in 2015. This restructuring that we discussed this morning, that will be accretive to our views for 2016. Pension, OPEB, right now we see that as a benefit to us in 2016 of approximately $100 million. And of course, we'll continue to drive productivity in our company as well as getting benefits from our capital allocation strategy that we have been following and will continue to follow. Headwinds that I see right now going forward into 2016, FX has been a headwind throughout 2015. We see it being a headwind for us in 2016, just not on the same level. We see it at a lower level than what we've seen in 2015. And then just to round it out, as I look at 2016 I also see interest expense. As we're following our capital structure, capital allocation strategy, we see interest expense going up in 2016.

So I guess does this year, I guess next year, can you still get to that longer-term model that you guys have talked about, that close to double digit, even with current volume levels? Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Yeah, Steve. We're still in the stages of putting together our entire 2016 plan. We'll share more details on that on our December 15 conference call.

All right. I had to try, thanks. Inge G. Thulin - Chairman, President & Chief Executive Officer: Thank you, Steve, always a pleasure.

And our next question comes from the line of Julian Mitchell of Credit Suisse. Please proceed with your question. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi, thank you. Inge G. Thulin - Chairman, President & Chief Executive Officer: Hi, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Nick, hi. Just following up on the comments around capital allocation and what that means for interest expense and so on, just more broadly I guess when you're thinking about the buyback target for the medium term that you'd laid out a few years ago, maybe talk about what's the scope for that to move up and how you view the credit rating in the context of the propensity to increase capital allocation. Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Yeah, thanks for the question, Julian. We're continuing to follow our capital allocation and capital structure strategy that we've laid out. We do see that we're continuing to make progress on that capital allocation strategy. You saw in 2015 us deploying $3.5 billion into mergers and acquisitions. Our plan does call for us leveraging our balance sheet to grow the business, investing first in the business but maintaining some flexibility for opportunistic deployment. And we're continuing on the path we've laid out, Julian. In regards to your question about debt rating, as we've indicated in the past, we would consider a downgrade for the right value-creating strategic opportunity. Those include acquisitions as well as times when we see 3M as a good value to buy ourselves. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thanks, and then just a very quick follow-up on emerging market demand. Obviously, a lot of people have expected that to tail off for 3M in recent months. It…

Our next question comes from the line of Laurence Alexander of Jefferies & Company. Please proceed with your question.

Good morning, just one quick one. With the productivity related to the ERP and supply chain improvements, do you see the benefits flowing through in a fairly even cadence from here, or will there be extra costs in 2016 and 2017 that will dilute the impact initially and then make it stronger later in the decade? Nicholas C. Gangestad - Chief Financial Officer & Senior Vice President: Laurence, two parts to the question that I'll go through here. First of all, from the cost standpoint of our investment in business transformation, we're at a point where we're at the peak of what we're investing in this, and any incremental investments would be small or non-existent of what we're spending on that initiative. In the coming years, we expect to see ourselves growing to build to that $500 million to $700 million of operating income benefit that we've shared. I'm quite confident as we talk on December 15 about our outlook for 2016, you'll start to see some of those benefits being shared at that time and how they'll impact 2016, starting small, but then growing as we progress to 2020.

Thank you.

That concludes the question-and-answer portion of our conference call. I will now turn the call back over to Inge Thulin for some closing comments. Inge G. Thulin - Chairman, President & Chief Executive Officer: Thank you. To wrap up, we continued to deliver solid operational performance in 2015, and I thank our whole 3M team for an outstanding effort. This quarter, we expanded margins and posted strong earnings while taking many actions to strengthen our long-term competitiveness. We're executing our plan and controlling what we can control and building for the future. Thank you again for joining us this morning, and have a good day.

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