No, that's the difference. There's not any questions.
All right, great. Kicking off day two here, bright and early 7:15 A.M. So glad to see everybody here. Very happy to have Mike and Monish from 3M with us. Mike's gonna make a few opening remarks, and then we'll jump right into Q&A. So Mike, thanks for being here, again.
Welcome, Good morning, everyone.
Congrats on the announcement yesterday.
Yeah, thanks, Steve. Yeah, I'm gonna. I'll start there with the leadership announcement yesterday. So I just start by saying I'm excited to have Bill Brown joining 3M as CEO on May 1st. And Bill brings an incredibly strong track record as Chairman and CEO of L3Harris Technologies, and he was also Chairman and CEO of Harris Corporation before the merger. He had also extensive experience as a business leader with United Technologies. Bill, you know, brings all of that leadership experience to 3M, so we're excited to be working on the transition. I'll be moving to Executive Chair on May 1st. Bill will stand for election to the board as part of our annual shareholder meeting in May, and we'll be working together. I'm looking forward to working with him on a successful transition.
So, with that, I'll focus on the priorities that we've been talking about, and this will be part of the transition. Bill's focused on these same priorities, and it's about driving improved performance through the 3M model. It's about a successful spin of our healthcare business, Solventum, and it's about reducing risk and uncertainty, primarily facing into some of our litigation matters. And when you look at performance, you know, we had a strong performance in 2023. We exceeded our expectations and our guidance for both EPS and cash flow. Strong performance in both areas, with growth at the low end of our range as we went through the year, so focused on what we can control and executed well.
We also executed the largest restructuring in the history of the company and did a good job of executing every aspect of that restructuring. Importantly, it was about improving how we operate as a company. And we demonstrated that we can take advantage of that in our performance, in our operational excellence, in our commercial models, and in taking our cost structure down, and we saw benefit from that as we went through the year. We continue to build momentum off of that as we come into 2024. Turning to the Solventum spin, so we had board approval last Friday for April 1st spin of Solventum. We had a successful debt financing in late February, $8.4 billion. We'll leave $600 million in cash for Solventum, and net of fees, that will return $7.7 billion to 3M Company.
We'll also take a 19.9% stake, which we intend to monetize in the first five years. Both will take a strong balance sheet for ParentCo and make it even stronger as we go. April 1st, we're looking forward to standing up two world-class public companies and seeing the successful execution of that spin of healthcare. On litigation matters, you know, the first focus maybe is public water supplier agreement. This, when we set out on working through this as part of the multidistrict litigation, we had a few goals and that we really were driving towards. One is to get a broad-based settlement with public water suppliers in the United States, and to do that, to address PFAS, all PFAS at any level, and we would support testing as part of that agreement.
We were successful on putting that, that was the settlement we announced last June. We have really overwhelming support from the public water suppliers at this point. We have mid-single digits opt-outs, and we're, you know, working forward as part of the process, waiting for the final approval from the court regarding that matter. So really see that moving forward and accomplishing the goals we set out, and really helping to manage that part of the PFAS litigation. On Combat Arms, we've had a goal from the beginning to get certainty and finality.
You know, a large number of claimants as part of the Combat Arms Multidistrict Litigation, so it was important that we get certainty and finality from the agreement, and we had a goal to get to more than 98% participation from the claimants in that MDL. We're very strongly above that as we come out of the initial registration date in January. We're facing the final registration date here at the end of March, March 25th, and we're very confident that we're in strong position. We have less than 25 plaintiffs that, at this point, are saying they are not gonna participate in the settlement, so that's 25 out of almost 300,000 claimants, so getting to what we were looking for with certainty and finality. Then we are continuing to make progress on our announcement to exit PFAS manufacturing.
Continue to make good progress in all aspects of it. Our volume is down more than 20%, which is ahead of what we had planned, so we're very confident we're on track for that. So that, really making good progress in resolving those risks related to litigation and broader PFAS. And then just turning towards the, you know, the start of the year. So first quarter, you know, we had guided about seven, approximately $7.6 billion in revenue. We're on track with that and continue to see it playing out as expected in the first quarter. We had a guide for first quarter earnings between $2 and $2.15.
Well, we're gonna add $0.05 from the interest on the Solventum debt raise, and so it'll be $2.05-$2.20 as the first quarter guidance, and we continue to make good progress on that. And we can talk more about what we're seeing in the marketplace, but playing out pretty much as expected. So we're well positioned as we work through these settlements and resolve those as we get to the successful spin on healthcare. We're well positioned to be successful and have another very successful 2024. We're focused and committed on delivering on our commitments as we go through the year.
So excited to be here today, really excited about the steps moving forward, and we continue to build momentum in everything that we're doing in the performance of the company and excited to talk more about that. So with that, Steve, I'll turn it back to you for your-
Thanks. Thanks, Mike. So, just on the management change, the timing of this, maybe if you could just dive a little bit deeper into what the discussions were like and, you know, how you guys, you know, or the board came to this decision and or, you know, obviously, I think you have a somewhat of a view, but, you know, and how long you gonna be in this role for?
Well, I think, first of all, back to Bill for a second. Bill's the right choice for us. He brings all that strong track record. He's the right leader for us as we move forward. So I'm really excited about that part of it. You know, the board successions are always on discussion with boards, and we've had, you know, a continuous discussion around succession, as I've been part of the board, as I've been CEO. And we got to a point where we had the right candidate at the right time. And it's a, you know, I would say it's a good transition process that we've laid out. Bill will be part of the upcoming proxy. He'll stand for election at our annual shareholder meeting, so the timing worked out well from that standpoint, too.
But it's a good time. We're stepping through these big milestones that I just talked about, and it's a good time to make the transition. And again, Bill's gonna take it and run with it and take it to new levels.
You'll be in your position for a couple of months or like, like is there a, until he gets elected to the board, like, what's the-
Yeah, of course, that's up to the board-
Okay.
- ultimately.
Yeah.
You know, it's important for me, and it was important for Bill, too, that I'm part of the transition-
Yep, yep.
and supporting him in the transition. He's gonna come directly into the company as CEO, and I'll, as executive chair, work with him, and I'll continue to help with some of the big strategy as we work through that transition. But it's important to support him in the transition and to, you know, help the, you know, the big strategies and priorities that we have as we focus on 2024.
What would be your advice to the incoming guy?
Well, I think it's really much aligned with what we believe we have good momentum on and what we're focused on. So it's broad-based, and it'll... But it's, and Bill, I don't have to give advice on how to be a CEO. That's one of the best parts of it.
Right.
It's about learning the company. So one of the things we talked about, we had an introduction to the employees this week and talked a lot about how he sees the future, how he sees the company out from the outside, and I think that's a good starting point.
Okay. On the near-term stuff, sales tracking in line, I mean, DuPont was saying their trends were tracking a little bit better, perhaps some in the electronic side. What are you seeing? Is there anything moving around, anything better, anything worse, either geographically or by the segments?
Yeah. Overall, I, I said first quarter is playing out as expected. You look and take a look at each business. So industrial is mixed. There's some strength in some of our industrial markets. We see it in our automotive aftermarket businesses as showing some strengths, our industrial minerals showing some strengths around continued construction in that area, that's helping that, that market segment. Broadly, broadly, it's more mixed in industrial. If you look at electronics, we're seeing some strength in electronics coming in stronger than expected, as we look through the quarter. And I would say consumer business is pretty much in line. You know, seeing the things that we've talked about there, consumer spending in discretionary product categories are, are still soft, and, and we're working through that, but pretty much in line. If you look geographically, I would say U.S. is the strength.
We're seeing us, I would say, the rest of the world play out pretty much as expected. A little bit of strength in electronics showing up in Asia and China as part of what I just described. So, you know, and if you look at the top-line revenue number, a little stronger organic growth, offset by a little bigger headwind from FX, but pretty much on track with what we...
Got it. And as far as this electronics pickup is concerned, just remind us of your exposures there and what-- 'cause you have, you know, optical, and you've got some connectors and, you know, anything in there that's exposed to things like data centers, it's kind of a bit of a two-speed world there.
Yeah. You know, there's an expectation that we see some improvements in the electronic markets as we go forward. Consumer electronics, semi, data centers, other areas that have been strong, and there's an expectation that gets better as we go through the year. What we're seeing in first quarter is really some wins for us. We're seeing spec-in wins and some share gain in some of those consumer electronic applications. That's what has been driving a little better than expected performance for us in first quarter.
And as far as, you know, the other kind of thematic discussion around things like EVs, you guys have a really strong business there. What are you seeing as that transition, you know, perhaps slows a bit from the pace it was at?
Yeah, we talk about Automotive Electrification, and it's certainly an important part of that is electric vehicle powertrains. Probably, another area that's equally important and has been a big driver of growth, has been the increased penetration of electronics on all automobiles and light-duty vehicles. So it's a, you know, it's the increase in displays and electronics that goes into the bill of materials of the automobile is becoming more of a consumer electronics device in many ways. And so we saw that last year. We had 30% growth in a $650 million business that we call Automotive Electrification. And we continue to see that as a growth driver for us as we go forward. As we come into 2024, you know, we look at the build rate. We've been outgrowing the build rate.
That's part of that, that 30% growth has been our ability to continue to win specs, take advantage of the innovation that's going on in those electronic applications in the EV powertrain, and we, you know, we continue to see that as an opportunity to outgrow build rates. Now, build rates for 2024, you know, 2023 outperformed the initial projections. It was almost twice what the expectations were at the beginning of the year, by the end of the year, in terms of build rates. This year is expected to be flat or slightly down, and I would say Q1 sequentially down from Q4. We're seeing it play out as expected on the build rate side. We aren't seeing any big inflections around that.
We're, you know, we're seeing our wins help us to continue to drive good strength in that business, and we expect to continue to outgrow the build rates.
Now, there's a business you have called Commercial Solutions. What, you know, some of these businesses, we kind of lose track of what's in there, but it's a reasonably big business for you guys, and it's, I think, growing okay. What's in that business? What's driving growth there?
Yeah, it's got a new name, too. It's, there's Commercial Solutions is part of a larger division.
Yeah.
There's two things in that business that you'd see at a division level.
Yeah.
What we would call a division, and what you'll see in, in our earnings decks. You'll see, you'll see a update on the revenue that those divisions are driving. It's really a couple of big categories. One is commercial applications, so commercial solutions for branding, graphics, large graphics, so it's, it's graphics applications.
Yeah.
It's got auto graphics and films. It's got a large traffic safety business, so if you remember our reflective-
Yep
materials for traffic safety application signs and license plates
Yep
and pavement markings, that's all part of that business. And so we're seeing, you know, we're seeing that steady end market dynamics. You know, it's, it's something that, you know, has it, it tends to be, long-term in line with macro, and it's, you know, it's been a, a business that has opportunities for innovation for us. We see an opportunity to continue to drive innovation in especially our film technologies in some of those, some of those key markets. So it's a, it's, it is an important part of Transportation Electronics business.
Yeah
the business group itself, and we expect it to, you know, continue to take advantage of innovation and perform well.
And then on the electrical market side, just remind us of what's in there. I would think that business would be doing better. Maybe there's some destock or something going on, but that business has been down recently. Any, you know, signs of life there from a growth perspective? What's driving that-
Yeah, there is-
-that segment?
You know, there is a potential for longer term as you get some of the infrastructure investments coming through, that will benefit. But this is, you know, a lot of what we do is in the last mile of the grid, and our solutions play in that area of electrical markets, and then broader than that, but it's an important component of it. And so it's. You know, we had some strengths in that as we went through last year. It's, you know, we, like I said, industrial's been kind of mixed.
Yep
As we start the year, and that, I would say that's one of the, you know, one of the stories that we're watching to see how it plays out.
Still some potential, like, destocking there.
You know, when you look at the, especially, if you look at channel inventory-
Mm-hmm
Broadly, not in one segment of the channel, it's pretty stable in industrial. I think, if anything, we saw the distributors in broad-based industrial, multiple different segments of industrial, cautious as they started the year. Now, I wouldn't... You know, as we went through 2023, it got pretty well in balance. I think they've been adjusting well and maybe a little bit of caution as we start the year.
So now you've kind of recoupled to the demand. And then lastly, just on, on roofing granules. I know that was a business that moved around quite a bit. And anything there from, I know there's some inventory swings every once in a while, but, construction business, what are you guys seeing on that front?
Yeah, we would highlight it as one that's seeing some growth dynamics right now.
Yeah.
So I think that tends to-
Oh, that was the minerals.
Yeah, that's the customers.
Yeah. Okay. Got it. Got it, industrial.
The inventory in the channel, I—you know, we are shipping direct continuously-
Okay
to customers, so inventory for us is often on the road.
Okay.
The customers, the inventory that can build up is if there's a change in the end market demand, that, that'll move, but we're seeing good end market demand right now.
Got it. So then, switching to consumer, the home improvement market is a pretty big one for you. What are you guys seeing on the home improvement activity side?
Yeah, I would say it, we see what you're seeing in the, you know, the home improvement retailers.
Yep.
You know, that, that dynamic. It, you know, it's long term, that's been a strong trend, you know, people investing in their homes. It, it obviously got even stronger during the pandemic, but even prior to the pandemic, it was a strong trend. It's a, it's an attractive place for us. We, we see it as one of the markets we're prioritizing. It's a place where 3M innovation, our invention is, is playing well. We've built two sizable commercial platforms in home improvement that leverage 3M innovation. Our Command, excuse me, our Command damage-free hanging kinds of applications is a big part of that. People are investing in personalizing their home, and that's been a strong growth driver. We...
introduce some new products in that category that are, you know, I leverage 3M invention and allow for heavier hanging of objects and pictures and so on in your homes, and it gives a lot more flexibility. And then we have our Filtrete brand home filtration products, which are an important part of that home improvement kind of application. So those have been long-term trends. They've been strong growth drivers for us. They're priorities for us to continue to invest. We're seeing softness in the near term, but I think that long-term trend will return.
And then, just lastly, geographically, you may have touched on it, but, China, how does China look for you guys? I know there's a heavy electronics exposure, you know, maybe, China ex-electronics is a better way to... You know, what are you guys seeing, that's unique in the economy there?
Yeah, electronics-
Or anything?
Yeah, electronics is a big part of our business in China, as you say.
Yeah.
You know, you look at China, it's about 10% of 3M revenue, very important market for us. About 50% of what we sell in China goes to domestic consumption, domestic customers. Another 50% goes to companies and manufacturers that export their finished goods product. Electronics would be part of that, the biggest part of that. And if you look at broad China, you know, we, you know, we've been prioritizing, continue to prioritize some areas where we have a strong right to win. We manufacture a majority of what we sell in China, in factories in China. So it's a... You know, we, we've invested, you know, over the last 35 years, we've invested in building a solid business, China, capable and, and really aligned to that business. We're continue to watch it closely as we come into the year.
You know, they get into Lunar New Year. You just, I find you have to get a couple, 3 weeks past Lunar New Year.
Yeah
... before you get a good read on what's going in China. The electronics, what we're seeing in some upside in electronics to our expectations in Q1, the spec-ins, some of that is in China, applications. So it's, it's part of that, but it's, we're watching the broader market, I would say, as we come into March, we'll get a better read. As we get through March, we'll get a better read.
So just turning to organic growth in the portfolio at large, you mentioned there's this 5% of the portfolio in consumer that you're, you know, working on, I guess, selectively getting out of or winding down, however you, however you wanna talk about it. How over what time period do you guys expect to execute that? And what's the, what's kind of the catalyst? I mean, it's 5%, 5% is not a small number, especially when growth in this world is so low. What, what's the, what's kind of the catalyst there?
Well, Steve, as you know, we continuously focus on optimizing our portfolio, and the spin of healthcare is the biggest strategy that we've been executing as part of that. We also have been working on what we call geographic prioritization. We talked about that during our restructuring. That's really a portfolio strategy. It's to look at our geographic business segments and say: How do we optimize those? And we took 30 smallest countries where we had a, you know, a 3M subsidiary presence, and we moved those to an export model, and that was really a geographic. It impacted as you move from a 3M domestic sale to working with distributors through an export model, you will have price changes, so you see it as a volume impact.
The margins are still, you know, that you still hold up those same strong margins as you go in there. So that, you'll see that as we called that out as part of our revenue, portfolio impact on revenue as we came into the year. The other part that, you know, your question points at is Consumer Business Group, and we've taken a focus on that from a portfolio point of view. How do we optimize that? And we identified products and parts of categories where we didn't have a strong right to win, and we had positioned ourselves and weren't leveraging 3M innovation and invention. And so we made the decision to just to exit some of those categories and those, not broad categories, those products in those categories, and that's the 5% number that we've talked about.
We expect to complete that this year.
Okay.
Some of it'll, some of it'll play into early next year as we get the execution done here in the first half. But we expect to take those actions as we go through 2024.
So that entire headwind, like $250 million, comes on sales this year from consumer?
Some will go into next year. I... you know, it's-
Pretty big number.
Yeah. So we called out for this year.
Yeah.
It's about 100 basis points total-
Yeah
-between those two.
Yeah. Okay.
Yeah.
Got it. Sometimes, 'cause you're, there's the PFAS impact, this going on, so it's kind of tough to track it. But you won't be adjusting revenue for that? You'll just kind of, like, talk about it?
No, it's. We talked about it, you know-
Yeah
... in our guidance back in January.
Yeah.
We laid out our guidance as flat to 2%.
Yeah.
About 100 basis points, you can think of it as 1%-3% guidance.
Yeah.
And it's, you know, it'll have an impact on revenue this year. Both of them are gonna position us to be stronger and long. In consumer, it will better leverage and really take advantage of investing our commercial dollars in those areas where we have differentiated value, where we have a stronger right to win, where we leverage 3M innovation. So it'll improve growth and margins as we go forward.
When you think about your growth businesses, there's the EV business. I think you've talked about a bit about safety, automation, robotics, abrasives. What's the revenue size that you think you guys have when it comes to these higher growth businesses? What's the total percentage of the new portfolio, kind of ex Solventum-
Yeah
that you would characterize as being growth priorities or growth platforms?
Yeah. And you know, you teed it up, right? There's a couple of ways we think about where we're prioritizing our growth.... the categories where we have a strong commercial presence today, and these are opportunities that we're driving growth from today. So automotive electrification is an important part of that. Safety is a place where we are a leader and are innovating, and we see, you know, the market trends being strong. So we're looking at where we have the ability to differentiate 3M, leverage 3M innovation, differentiate ourselves, solve customer problems. Our innovation starts with customer back. You want to do that in attractive markets, and safety is an attractive market. Automotive electrification is an attractive market. Our home improvement that we were talking about, longer-term trend, is an attractive market.
Consumer electronics, we see the opportunity to continue to win and reinvent ourselves in consumer electronics. At the same time, we're looking to where the future is going. You know, automotive electrification certainly has got a big component of where the future is going. But beyond that, you see areas like climate technology, and we're investing broadly in climate technology. It's across a broad range of applications. It's a, you know, it's a developing market. It's a big trend and a big opportunity, and material science is going to play a tremendous role in driving the innovation that's needed there. Industrial automation is another area that we are investing in prioritizing as an emerging trend and technology and market trend that's going to continue to play out.
It's our precision engineered material science plays well into industrial automation, and we're seeing opportunities for a number of applications there. And then we look at next generation electronics is, you know, an exciting space. It's going to be, whether it's data centers or the potential for AR, VR, ER, to go forward, these are all areas that are attractive trends. We expect some of them will turn into very attractive markets, and we're well positioned with our innovation. So that's how we look at where we're prioritizing the growth. And so those large commercial areas are important, and we talk about those often, like automotive electrification, the size of it and the importance of it. And the emerging areas, those are areas that we'll, you know, we'll talk more about as we see those develop and we build out positions.
Maybe this is a question for Monish, but, just building up to the spin here and some of the moving parts around that, you know, I think there was there was $50 million of added cost, you know, this quarter. And any update on, what kind of, what kind of overhang or stranded costs that you're looking at for this year? In addition, I think the Solventum 10-K talked about $190 million in TSAs. Is that roughly the right number for the near term? Just maybe-
Sure.
some of those wonky details as we head into early April here.
Sure. So I'll start with stranded, and I'll go down to your $50 million question. So when we started the program two years ago, announced the spin, industry benchmark on stranded cost was 1%-1.5% of revenue, which is somewhere between the $350 million-$500 million, which is what we were seeing when we started. With all the work the team has done, with the restructuring that we have done, the restructuring that we've announced, sitting today on an annualized basis, that stranded cost is in the $150 million-$175 million range. And that was part of the benefit of doing the restructuring program, which was not just to simplify the way we operate, to create an avenue for investments, but also to address stranded cost when healthcare went away.
So that was one piece of it. The second piece on it is TSAs. So what we are going to have, Steve, over a period of time, is to... We'll have TSAs to help stand up Solventum and be a standalone company, and till they are ready to take it, we'll have some costs that we are going to hold. It's somewhere right now, where I see, and the teams are working through it right now as they get to the final stages. It's in the 250-ish range, is what I would say is the cost, which we will get, you know, offset through TSA billing. And whether you pick 190, 250, it's all the same. It depends on the timeline. I'm just annualizing what that is going to look like, and we'll work through that. The third piece is pension funds.
Some have asked about it. 85% of our pension will remain with ParentC o or 3M, and 15% go to Solventum, and they have also disclosed that they have a similar program that we have. So that's three pieces on it. On your $50 million, there are two pieces. There's a stand-up cost and separation cost. So first, I'll say separation cost. We have been disclosing this all along on what it's costing to separate healthcare and think. We spent around $500 million last year, and that has been disclosed in our excluded items. The balance $50 million is standup costs, and there are three pieces of it. There's one piece, which is the management team and what it costs.
The second is there were some investments in there that they were going to do that allows them to get successful growth in the future. The third piece is double bubble cost, which is you've got functions that are duplicated till they go, which, you know, Bryan and Wayde can address in more detail as they go through on March 19th, but that $50 million goes away when spin is done.
Got it.
So it's the stranded cost, and it's the TSAs that 3M will continue to work on. Some of it will grow into, and some of it will keep working down as we continue our restructuring program.
And how do the TSAs, how does that get reflected when I look at your, you know, the segment income statement that we all kind of look at?
Yeah.
As our guide? Where does that, where will those TSAs flow through, and where will that stranded costs, like, these moving parts in that model?
Yeah. So the TSAs, so we are still working through it, but currently, our view is that'll come under a subsegment under corporate and miscellaneous-
Yep.
So you can actually see the impact of the cost and the TSA billing.
Yep.
On the stranded cost piece, you know, that's basically the, again, every company has its own definition of stranded cost. In our view, is cost that does not commensurately come down due to volume, is due to it's stranded cost. And as you know, in most of our cases, we take these support costs and reallocate it back to the BGs. So to the extent that it is, you'll see it across, like, through corporate, but get allocated back to the BG. So you're not gonna see a line item called stranded cost.
Right. But I guess the impact on those margins is they, you know, do they, do those margins take a bit of a step down?
It will because of the $150 million- to the $150 million-$175 million is the margin impact of it.
So on, like, April 2, we have to kind of take our models and kind of-
If you're using the 2024 model or 2025 model, burden it on an annualized basis-
Yeah.
$150 million-$175 million
Yeah. Okay, but the $50 goes away. The $50 goes away next year.
The $50 million goes away. The 50, the $50 million goes away starting April 2nd-
Yeah.
Once spin is done.
Okay. And are you guys gonna have? Is all of this gonna be, is gonna be a longer, you know, 1Q call? Are you guys gonna have an investor day? How are you gonna, you know, kind of update the model?
So we are working through multiple avenues, and our goal is to give you all as much clarity as we can. So we'll come back with the right dates. But all the items we are telling you, that's what Bruce and team are working on, is how do we lay it out in a way that's easy for everybody to follow? Because, as you said, which segment will I see TSA? Where will I see stranded? And we wanna make sure we can show you all of that.
Yeah, yeah. No, it, it's messy, but, congrats on all the progress.
Thank you.
For sure. When it comes to the restructuring, are we on track with all the numbers you guys have put out there? And then just remind us what right now what kind of 2025 looks like from a headwind, tailwind perspective.
Yeah, so I, you know, I go back to all the numbers you have are all WholeCo numbers, which was the $700 million-$900 million of annualized benefits and $300 million of cost in 2023. We will give you an update on what the RemainCo numbers are, and that will have an impact on 2025. But the program, as again, just a reminder for people who are catching up new on this thing, was set up for multiple things. One is changing the way we work, reducing spans and layers. Two, was reducing the amount of cost at the corporate, getting ready for the spin, and the third was just making more efficiency in our supply chain. And I would say, based on everything we have seen so far, the progress is good. We are seeing the benefits of that show up in our margin rate.
You saw that in the second half of 2023. You continue to see margin expansion in 2024, and as I've said, it has allowed to reduce our stranded cost, which is going to be in the $350 million-$500 million range, down to $150 million-$175 million. So it has had its intended purpose, but I would say most importantly, it's changed the way we work. So I think that's the exciting part of it. And, we'll, we'll get you updated, Steve, as we close out April 2nd, on what is the impact of that for just the RemainCo or ParentCo .
I guess we could look at also just the charges that healthcare has taken. Is that one way to-
So that's one way to... You'll get the cost.
Yeah.
2024 had some cost in healthcare, too.
Yep.
There were benefits which are not broken out by segment.
Yep.
We'll have to just help you out with that.
Okay. And then just lastly, here on the liability side, where are we in the other items? I mean, DuPont said that, you know, the state AG negotiations are kind of ongoing. You know, what are the other couple here that we'll be watching for, and what are the mileposts in the next, you know, call it nine to 12 months?
Yeah. You know, the Multidistrict Litigation court has said personal injury will be the next focus.
Okay.
So they're starting to do some discovery on that, starting to talk about bellwether. There's nothing scheduled at this point. And then there's state AGs, as will be something that's ongoing. You know, these are gonna take years to play out, but it's, you know, that's, that part of the process is what the court has identified as next.
And anything else as far as international exposure or property damage or?
Yeah, I would say that, you know, there's other potential litigation matters. You know, we continue to engage on internationally, we're engaged around where we manufacture PFAS.
Yeah.
And so Zwijndrecht and Gendorf in Germany are the two areas. It's part of the exit strategy for us, and that's the big focus right now, is completing that exit of PFAS manufacturing. That's the focus on those international sites. You know, when it comes to the litigation matters, you know, we again back to we are making big progress with major milestones this month. Public water supplier was the big first focus of the Multidistrict Litigation and Combat Arms , of course, getting to certainty and finality there. As we go forward, we're gonna manage these litigation matters the way we have. We're gonna be proactively engaging every step of the way. We're gonna defend ourselves in court and resolve them as appropriate.
Any questions? We have time for a question, if anybody has a question. Right here.
Morning. Can you just address the dividend, how you're thinking about the level of the dividend going forward?
Yeah. So with the focus with the spin coming up, that's one of the questions. I would start, you know, we are a strong cash generator as a company, and that's been a hallmark for us. It's put us in a position to have a very strong balance sheet. What we talked about or what I talked about in my opening comments, you know, the dividend through the spin, the $7.7 billion+ the 19.9% stake, those are gonna strengthen 3M's balance sheet even further and position us to execute a strong prioritized set of priorities in capital allocation. The first is investing in the business. The second focus for us will be returning capital to shareholders, including through an attractive dividend.
And then, it's gonna be well-positioning us, and we're well-positioned to manage any required costs of settlements. And that's what we're focused on and something that, you know, will ultimately be a Board decision, and we'll talk more about as we go forward.
Great. Thanks a lot, guys.
Good. All right, thanks.
Thank you.
Thanks, Steve.