First of all, good morning, everybody. It's great to be here. Let me start by just mentioning that we continue to execute the foundational priorities that we've laid out for the company going back now almost two years. We've been talking about it pretty consistently in all of our earnings releases. It's really about driving commercial excellence and operational excellence, innovation excellence across the company, building our culture. You know, you see it in, you know, both our operational metrics, and I talk about these, you know, quite extensively at every earnings release around utilization or what I call OEE, OTIF, cost per quality, the number of products that we're launching. You also see progress that we're making in our financial metrics around returning to growth, driving margin expansion. We're really pleased with what we've done there.
Generating strong cash, returning a lot of cash to shareholders, tracking above our Investor Day commitment. Overall, I think the company is performing, you know, very, very well. As we go into 2026, you know, we see a lot of the same trends that we saw through last year continue on into this year, and I could talk more about that. You know, with this added volatility, Steve, as you just referencing about what's going on in the Middle East with the elevated price of oil, you know, we certainly are impacted like everybody else around the world. We don't have a very large business in the Middle East. It's kind of like less than 2% of our revenue. You know, we do see shipments and transshipments through a couple of important logistics hubs in the Middle East.
Air freight, logistics will be a little bit, you know, have some friction to it. You know, we're watching very carefully with the price of oil being elevated. We certainly use oil-based polymers in our products, you know, and that's gonna be, you know, we'll see how that it affects over time. If the price of oil stays elevated, we're gonna have to take action like we had to do last year and be responsive on pricing like we were with tariffs. We'll have to do the same thing with oil this year. But it's something that we watch very, very carefully and we'll be responsive on. You know, so again, economic conditions, you know, continue almost like they were last year coming into this year. You know, when I think about the pieces of the company, you know, we watch a number of different things.
I talk a lot about IPI and what's happening in Industrial Production Index. You know, at the beginning of this year at our earnings release, I talked about IPI softening a little bit on a global basis, down around 1.5%. U.S. coming down, China slowing down a little bit. That's an important factor for us given we have a big presence in the industrial business. You know, we watch PMIs, other metrics around the world. You know, it's actually encouraging to see PMIs be above 50 for a couple of months in a row, which I think is a good trend. You know, as we started this year, we see in our industrial businesses, you know, some of the continued momentum that we were building last year. Order rates for us remain pretty healthy.
You know, we're seeing backlog growth in our industrial side. General industrial and safety for us is about 60% of our company, so it's a big piece of it, and we see good performance there across abrasives and in tapes. Our electrical market business, our safety business all continue to do reasonably well. You know, a lot of it is with the backlog, we've got to make sure we convert here as we get into March, mid-March. That part of the business is doing pretty well. You know, there's another 40% or just under 40% of the business that's a bit softer. You know, consumer products is about 20% of the company, and, you know, we're seeing the trends just really like we saw last year. It's relatively soft.
Consumers are focused on, you know, non-discretionary spending. You know, we're watching it very, very carefully. It's, you know, it's sort of the same trends we saw last year. We're watching very carefully what happens in automotive. We knew automotive was gonna slow down for us a little bit this year. If you look at IHS build rates for this year, it's gonna be down. I think yesterday I saw the new numbers down 0.8 of a point over the course of the year. Q1 is gonna be weak. Q1 in China is down 9%. We're watching automotive very carefully. It's a little less than 10% of our business, more like 8%, so that's an important one to watch.
You know, the third part about it is broad in electronics, but in particular on consumer electronics. Consumer electronics is about 8% of the company as well, and we're watching very carefully what's happening in end demand from memory pricing. Stepping back, you see about 60% or a little bit more than that, industrial doing pretty well. You know, 40% or a little less than that being a little bit softer as we turn the corner into 2026.
I guess from a top-line perspective, does that, you know, does that kind of put you at the lower end of the range for the first half on organic at least? Or is there like volumes a little weaker, you get a little more price to offset, you know, what's the bottom line there?
Yeah, as we said at the earnings release, we saw we'd be at 3% organic this year, up a little bit from last year into a bit of a weaker economy. We saw organic growth rate accelerating through the year. Naturally, it's gonna start off a little bit lighter in the first quarter. It'll build into the second, and it'll build into the back half of the year. 3% organic growth for the full year.
That's still something you think is.
Yeah.
Achievable even with kind of this mix?
It's still very early in the year. We're still mid-March. You know, again, we're watching the order trends. For us, again, industrial has been pretty good. It's been pretty resilient. You know, it's actually picking up a little bit as we get into March. We feel good about industrial. We just have to watch the other parts that I just mentioned.
Can you just delve into what's happening on the consumer electronics front? Maybe which areas specifically, you know, in your portfolio that you're seeing the most pressure from this memory issue?
Again, our electronics business as a whole is about 10%. It's about $2.5 billion. Consumer electronics is around $2 billion in business. We sell tapes, bonding solutions into a variety of consumer electronic devices, from phones, tablets, PCs, TVs. We've historically been 70/30, 80/20 premium to mainstream, which for us this year is actually working out because the market is the opposite or the inverse of that. The market is more mainstream and low entry devices, and less on the premium side. Why that's important is with the memory prices coming up quite dramatically, the premium players have much more robust supply chains. They're, of course, pricing at a premium, a better ability to deal with memory prices coming in.
You know, that part of the business has been a little bit more resilient. It's not unimpacted, but more resilient. Of course, we're pushing as well to develop products by cost engineering or value engineering some of the premium products we sell into the premium devices. You know, going after the mainstream side, we're making some good penetration into that segment, you know, but overall, that business is likely to be soft. You know, as we've been pushing on this for the past year or year and a half, again, what this really is taking cost out of premium products going into those higher-end devices.
You know, as these midstream, mainstream players are starting to see more pressure on their business, they're opening up their BOMs for, you know, different ideas, and we're able to provide some different solutions, and hopefully we can gain a little bit of share in the mainstream side. Premium's under a little bit of pressure, more so in mainstream, but it opens up an opportunity for gaining share.
Net negative, but you guys are, you know, offsetting that with some of your NPI.
It's gonna be not offset entirely, but we're offsetting some of it, yeah.
Are we talking about in this business? I know there have been some pretty significant cuts to device shipments. I mean, are we talking about this business being down like double digit, or is-
We don't think it'll be down double-digit.
Yeah. Something between zero and double digit, right?
It's gonna be down a little bit, but it's someplace in that range.
Like 5% ? 5% ?
We're not gonna pin myself down.
Okay. Got it.
You know, we got a couple of weeks left in the quarter, Steve.
Sorry. Just trying to be more precise on that front. On the growth side, where are you seeing? Are you still on track for this, you know, $1 billion of outgrowth? Remind us of where you are there and where you're seeing-
We're making very
Where you're having your success.
Look, it's very good progress, actually. We outgrew the macro last year by about $150 million. We see ourselves outgrowing the macro this year, $300 million or more. You know, last year, we laid this out very clearly at our Investor Day last year. We said, "You know, early on, we'll outgrow the macro through commercial excellence, and over time, the contribution from innovation is gonna start to pick up." That's what's exactly what's happening. Last year, the outgrowth versus the macro, only about 25% came from NPI or launching new products. More of it came from commercial excellence. This year, it's about half and half, but it's gonna tilt more towards innovation-driven outgrowth as we get into 2027. You know, the progress has been very good.
On commercial excellence, you know, this is really just getting back to basics about how the salespeople call on customers, how they price, you know, or how we, how we watch attrition or what we call churn and the drivers of that, cross-selling opportunities. You know, we started on this initiative back in late 2024 with SIBG, our industrial business. You know, it's actually been making very, very good progress. We're seeing that now extend into our transportation electronics business, which has been historically more of a spec-in business. Spec-in doesn't mean that you go and win the spec and you forget to call on the customer. The company, we're actually trying to push very hard on developing and transferring some of that knowledge, some of those skills that we're developing in SIBG over into TEBG.
We're seeing some good traction and good progress there as well. You know, on NPI and driving innovation, you know, the company, we sort of bottomed out back in 2022, 2023. We launched only 128 products over that two-year period of time. We start to bring that back up because we're pushing a lot more into driving innovation and launching more products. You know, in 2024, we launched 169. Last year, we launched 284. This year, we launched over 350 products, and we're on a good trajectory to launch more than 1,000 new products over the next three years, really through 2027. We're making good progress on all that.
That is what's gonna drive our outgrowth of the macro this year as well as going into next year.
Just remind us of what that number this year. I think it was 150 last year. What's the number?
It should be just over $300 million.
You're on track.
Yeah.
You're on track for that.
We are on track, yeah.
Any types of products, like specific products that really stand out? That I know 3M's like thousands and thousands of SKUs.
Yeah.
It's always hard for us to, you know, find a couple things that really stand out. Like I remember optical films back in the day, although that turned out to be, you know, somewhat of an anchor for over time.
Yeah.
Anything that stands out that you're particularly excited about? Maybe something in data center or something like that.
We're seeing actually really interesting developments and innovations really across all of the priority verticals that we're in. It's not. There's hardly a lot of things you can actually call out. Even in consumer products, we're bringing to market a lot of interesting products, a lot of new ideas. We're launching some more products in that space, which we hadn't done in a long time. You know, the one area we were actually putting a little more time is in data centers. You know, we've got a new product, which is a new optical interconnect. It's called EBO or Expanded Beam Optics. It's quite interesting. We've got some patent protection around that. We're starting to get some traction with the ecosystem around data centers.
You know, we have a foothold, a toehold within a data center through copper-based TwinAx interconnects. That world is moving toward from copper to optical fiber, optical connections. You know, we've got an interesting business. Not very big today. It's about $100 million inside the data center. You know, but we've gotten a product that's been validated by at least one hyperscaler. It's been in testing. You know, we've just received a pretty significant order. You know, we are looking to scale that up. You know, yesterday at OFC, which is their Optical Fiber Conference on the West Coast, we announced that we're more than doubling the capacity of that particular part of our business. You know, we do see a lot of upside. It's a multi-billion-dollar addressable market for us.
You know, you start and you build over time, and that's the way we're going. It's a polymer-based optical interconnect. You know, the world is gonna move to ceramics and on-chip optical connections. You know, we've got a pretty good path on how to develop that over time. That one I think is very encouraging, but again, it's just pulling out one product out of many that teams are innovating on. I'm sure a lot of people listening in are gonna be concerned that it raised, you know, all these other great things we're working on elsewhere, but that's one I think is pretty notable.
Right. That sounds pretty interesting. Just on the pricing front, you mentioned, you know, so obviously oil-based raw materials. Maybe just talk about price /cost, how we stand today, and you know, are you kind of how quickly can you pass some of this through if we do stay higher for longer on the oil-based stuff?
You know, pricing has been a big focus area for the company. We typically price to cover material cost inflation. That's sort of the minimum. You know, so on a 2% inflation economy, that's about 50 basis points of price, and that's been, you know, where we've been for some time. Last year, we targeted 70 basis points. We came in at 60, you know, over the course of last year, so we were a bit above, sort of just covering material cost inflation. But again, what we're trying to do is cover as part of the tariff impact through pricing. You know, through the back end of the year going into the fourth quarter, you know, we did see ourselves making some investments in promotions and discounts to gain some shelf space in our consumer business.
You see that continuing here into Q1, so pricing will be a little bit lighter here in Q1. For the year, you know, we're guiding to about 80 basis points of price this year. We typically put our price increases out starting on April first, so they get communicated to the channel in advance of that, so it's already out in the marketplace. We already are set for price increases on April 1. You know, I think we've been pretty nimble on this. We have a couple more times through the year we can do something on pricing. We can always go the route of surcharges to the extent that we see oil prices remaining elevated, impacting our raw material costs.
We can push through a surcharge almost like, in fact, exactly like we did last year on tariffs. We've got an ability to go and do this, and I think we've been pretty nimble here. You know, we're focusing on how we govern price, making sure that when we do give rebates or discounts or promos, that they're smart and you get the volume benefit from those rebates that we're giving in the marketplace. Sounds kind of obvious, but that's something the team has really focused hard on. Over time, it's really about through all this innovation that we're doing, how do we better price the value? It's something that, you know, it's something we're working on within our inside the company. It's an opportunity ahead of us.
You know, it's not as big of an impact in 2026, but I do think it'll be material beyond 2026.
When do you think you need to pull the trigger on incremental price, or are you on April first kind of baking in what's happened here on some of the cost inflation? Or is it not at that point yet 'cause everything's so fluid?
It's not at that point yet in the base price, because base price was communicated about 45 days ago.
Okay.
60 days in advance. You know, we are looking at, you know, surcharges or other things we can put in place relatively quickly.
Okay. On the margin side, you know, you guys have a lot going on. Maybe just talk about the different buckets of margin expansion opportunity, whether that's, you know, G&A or productivity in the factories, maybe just an update on margins.
The margin story I think has been a very, very good one. You know, we said we would hit 25% by 2027, and, you know, we'll likely come in a bit above that, which I think is encouraging. Last year, we were up 200 basis points. The year before that, more than 200. It was like 260, 280 basis points before that, the year before that, 2024. It's been on a good trajectory. This year we said 70-80 basis points. You know, again, we're tracking well to, you know, come in a bit above 25% next year. We saw better progress on G&A than we had expected last year.
You know, at our Investor Day, we thought as we looked out, that we would see more opportunities out of cost of goods driving gross margin expansion. That opportunity is still ahead of us. Through last year, we saw more opportunities in G&A, really looking at our indirect expenses, you know, in IT costs, in just some things that we thought we could pull back on and invest it more appropriately in growth initiatives. We saw good progress on G&A. You know, this year, you know, we'll see that tilt more onto the gross margin side, and that's a big opportunity for us in the future. It's really just the basics around how do you get productivity, you know, out of our factories and out of our distribution and supply networks.
It's, you know, it's something like just really basic kind of operations. You know, we laid out this transformation agenda that is really looking hard at, you know, how do you streamline and simplify our costs, our processes inside the company? We still have G&A activities in four service centers around the world. We don't need them in those four, and we're not in those locations. You know, when you're moving from a holding company model to an operating company model, in a holding company model, you have all these services, all these processes which are driven and very distinct and independent down at an individual business unit level. As an operating company, we're pulling all these things together and standardizing them and then outsourcing some things. A lot of things we're looking at, do we do those activities internally or do them externally?
That's something that's quite important. On the factory side, look, we have 108 factories. It's more than we need. We have 84 distribution centers. We won't have that many over time. You know, this is something that we're looking quite aggressively at right now. We'll lose about 7 or 8 factories simply because we sold a business last year. There's a few more that are in flight. Earlier this year, we announced two smaller factory closures in the U.S., and one is downsizing in Alabama. There's more that are gonna happen here over time. There's automation opportunities that are gonna drive this. You know, we see over time margin expansion continue to grow at the company.
When you look at this year, obviously last year, you know, blew the number away. Are there any obvious upside levers this year, whether it's mix or these benefits from, you know, maybe the plant closures and anything this year that gives you more confidence in being above the high end of the range?
There's a lot. I think there's a lot of things that are within our control. I mean, clearly we've got more opportunities on the G&A side, and we're continuing to take a hard look at that. You know, we're gonna invest $225 million this year in growth initiatives. You know, we're gonna kinda watch that very carefully based on what's happening in the marketplace and throttle up, throttle down based on what we're seeing in our own individual numbers. You know, we're seeing good opportunities in productivity. What we're doing is, you know, we feel confident on 70-80 basis points this year, we can get there. What we're doing is we're building, you know, this runway for margin expansion beyond 27%.
You know, I know investors are hung up on are you gonna do 70 or 75 or 80 or 100 basis points this year. You know, we'll get and we'll achieve the goal that we set out earlier this year. Will we get to above 25% next year? We are confident we can get there. This isn't an endpoint, it's a step along the way, and we do see continued margin expansion opportunities beyond that. It goes beyond simply looking at rooftops or number of factories or number of distribution centers. You know, the things that we can do in our facilities, in our factories, you know, around automation. We invest substantially in capital, but we have not fully automated those things that we think we can automate.
We still have 7,000 material handlers inside the company. We have 800 people in the company that visually inspect films. You can invest in state-of-the-art visual inspection systems. The payback on those is quite interesting and attractive to take out costs. Those things are all ahead of us. Those are inches. You move those piece by piece by piece. That's what builds this roadmap to driving margin expansion over time. We've said we can get back to the high 40s% on gross margin, and we can do that. It's through all of these initiatives coming together and bearing fruit. It's not any one of these individual, but it collectively, there's a lot of untapped opportunity inside the company to drive margins.
What's the time frame for that high 40s?
It won't be this year. Look, it'll happen over time. I mean, it's gonna take several years to get there. You know, again, what I'm laying out is this journey. You know, I've been there for almost two years now. You can see the pieces and the things that you could do step by step. We've got a good leadership team that are focused around this. You know, we know what to do. We know the steps to take. Some of these things. Look, at the end of the day, you know, when you're looking at closing a factory, you know, the payback on these things are three, four, five years. They don't happen overnight. I think part of that's maybe why we didn't do it in the past. They're hard to do. You know, they're risky to do.
The payback isn't today or tomorrow or this quarter, you know, but they're fundamental to building this long-term value creation engine at 3M that we're trying to build. That's the journey that we happen to be on. We'll get there. It'll take some time. First, we gotta hit our numbers this year, just over 24% operating margin. Last year was just over 23. Two years ago, it was just over 21. Next year, it'll be just over 25. You can run the math. You know, it's gonna continue to build over time.
When you know, I mean, I feel like it was yesterday when you guys gave these long-term targets.
Yeah.
Uh, but the-
Does feel like that, yeah.
We're kind of onto the next thing.
Yeah.
Will you give another kind of do you think in terms of three-year targets, or will you maybe shift to, like, a margin algorithm? Is that, you know, is 30%-40% kinda core incremental.
Yeah
How we should think about 3M?
You know, in terms of the long-term target, we'll think about that towards the back end of this year. Again, it's really just one year ago when we had this Investor Day and we laid out three-year targets. You know, frankly, the world's changed and our ability to drive margin expansion is different as well. Again, you know, G&A was a much more important contributor last year. As I mentioned at the earnings release, we're embarking on this transformation initiative inside the company to really think structurally about our processes, our footprint, all these various pieces. You know, our knowledge of what we wanna do is gonna be a bit different. We're gonna make progress this year.
We'll update investors maybe towards the back end of this year or early next year on where we see ourselves going. Maybe we'll do another Investor Day. We'll think about, you know, what's the right way to communicate to investors about the journey that we're on. Is it another set of three-year targets? Is it a margin algorithm? You know, we'll come back on this. In terms of incrementals, you know, we've been between 30% and 40%, but right now we're sort of at the top end, maybe even a little bit above the top end of that incremental size. You know, when you look at just taking cost out and the volume that we're driving, you know, this is going to be the driver of margin expansion over time. Company's performing pretty well on that side.
Do the drivers shift a little bit as this NPI comes into play so that, like, the mix of that NPI becomes more of a factor as opposed to just, like, brute force, you know, G&A? It's kind of a, it was G&A, now it's some of this longer term investment in productivity, and then on top of that, you know, wherever the mix goes.
Look, these are all the factors that are gonna drive margin expansion over time. To start, you've got to sort of fuel the fire. You've got to, you know, focus on your priority verticals. You've got to focus your spend. We're clearly stepping up a little bit on R&D spending, not just in terms of the amount. We're up about 30 basis points of R&D as a percentage of revenue, but more importantly, we're shifting the amount that we're spending on new product development towards new product development. I mean, it was, you know, last couple years ago, it was 28%, then it was at 32%, last year it was 37%. This year it'll be at 40%. You think about that, we spend over $1 billion in R&D.
That 12 points of shift is over $120 million of money that's going into developing new products from other things. There's a fuel to the fire. Part of that, when you launch products, you bring new things on the market, it gives you an opportunity to reset the cost base or reset the price. We've got to get a little bit better on value-based pricing, but as you bring new products onto the marketplace, yes, it should drive incremental margin expansion. All of these pieces have to work in tandem. They don't happen all at once. You know, but the story that I'm laying out, the strategy we're embarking on really is a multifaceted piece, and we're making good progress across all these, all these different dimensions.
We're focusing a lot on, you know, these priority verticals, the places where we think we have an outsized ability to grow, drive margin expansion, be competitive. You know, that's a multi-year journey to push more funding towards those places we think we have the best returns. That's the place we're at.
Those priority verticals, just to remind everybody, aerospace, electronics, home cleaning, AR, VR, data centers, home improvement, auto, energy, industrial automation, safety, and semiconductors.
Yeah, that's it. That's it.
Did I miss any?
You got them all. Yeah. I mean, these, they're gonna shift, they're gonna just like
That's about 60%.
Tighten down over time.
60% of the company.
Gets a little bit more than that. Yeah, exactly. Yeah.
I think the challenge for 3M historically was, you know, the pyramid discussion, where 3M really targeted kind of the high end of the pyramid and high margin stuff. I think you guys are kind of trying to broaden the base a little bit and at the same time, you know, make more margin out of it, which is a bit harder to do. Am I looking at that the right way or ?
In certain parts of the business, like in electronics, we do see an opportunity to go after more of the mainstream market. Again, that's where the bigger part of the market happens to be. You know, like I think the company in the past, you know, right or wrong, was run for simply margin expansion. All of our metrics around that, all of the incentives around that. If you think about even the restructuring program that we launched a couple of years ago, it was all driven on fast payback, you know, sort of relatively easy to do restructuring. It didn't get at the fundamental things you do to run the asset better. It takes multiple years to go and do that. That's what we're embarking upon now.
We are running and we're trying to go after a relatively small part of the market with premium brands and higher price. There's a piece of the market out there that we can go at with value engineer products, not the higher end, but value engineer products and develop a position, grow our volumes, which has really good drop through inside the company, and hold or expand margins and tap into a bigger part of the market. That's what we're doing in certain parts of the market, certainly in consumer electronics.
Just shifting gears a little bit to portfolio, you guys have talked about, sorry, taking a step back, free cash flow. Really strong performance, 100% conversion. Is that sustainable, the 100%, is that sustainable with all the productivity that you guys are doing? Or should we settle back into more like the 90%-95% range on conversion?
No. In the Investor Day, we said we'd be at 100% or better going out the next several years, and it really has three pieces of that. One is really strong earnings growth that with a high cash contribution to that. You know, really aggressive discipline focus on capital spending. You know, we've changed internally our approval thresholds. We're reviewing this a lot in a lot more detail. You know, again, part of this HoldCo/OpCo model is I see a lot more of our capital spending around the world and, you know, we're focused heavily on that. The third dimension is improvements in working capital. We do have an opportunity to improve our working capital performance. In particular, our inventory. Inventory's been running in the high 90s.
You know, we think we gotta be running in the mid-70s over time. Each day is, I think, around $35 million or about that amount of money. It's so there's opportunities driving inventory. That, that's the piece over time, is we sorta collapse the distribution network, the numbers of factories, hold our on time in full performance above 90%, pull in our lead times, also bringing down inventory. Part of that's gonna be better planning systems. You know, we've gotta get a lot better inside the company on how we forecast and plan for what we produce, you know, how that draws back to suppliers, on time performance of suppliers. All these elements come together, but yeah, we can sustain 100% or better on free cash flow performance.
Okay. Just on the portfolio, you've mentioned, you know, 10% issues being non-core. Where are we in that portfolio and how you're moving on that?
What we talked about last year is we saw about 10% that were in parts of the business that were more commodity-like, that didn't drive differentiation through new product introduction. I mean, look, the hallmark of 3M is we're an innovation-driven, high-performance company, and that's those are the kinds of businesses that we wanna be in. We'll move out of these other parts over time. We saw 2%-3% that were a little bit more actionable. We got out of a piece of that. We'll keep updating investors as we make progress there. You know, but this structurally shifting the portfolio of the company is gonna be an important driver over time for how do you sustainably grow and how do you get into higher margin potential type of categories.
It's multiple dimensions. One is just organically, we've gotta focus and invest in priority verticals where we think of a better right to win. Part of it is we've gotta get out of businesses that don't perform and are more commodity-like. The third element is getting into business through M&A that are aligned to priority verticals that actually sustains that journey as well. It's all these three pieces working together. They don't happen all at once, you know, and portfolio shaping is a working process, and I'll leave it at that.
Would you take dilution if you know if somebody came along and wanted a bigger chunk of it?
We don't want it. We don't want dilution. You know, we're very concerned and thinking hard about stranded costs, so we would work very hard internally to do what we have to do to take cost out to avoid dilution, you know, and I'll just leave it at that.
Okay. Just on the liability front, I know in the filings, there's been a bit of an uptick in the MDL numbers. Hard for us to kinda, like, understand really what's going on there.
Yeah.
Maybe just an update on the liability front.
The MDL numbers, you're referring to the personal injury docket.
Yeah.
The judge in the MDL, this was in August or September of last year, there were a lot of unfiled cases, you know, and for just better case management, the judge vacated the bellwether trial which was scheduled for October. You know, encouraged the plaintiff's attorneys to file all of the unfiled cases, vet them so that they can be better managed. That's what's happened. The number of cases that have now been filed are at, like, just over 15,000, 15,200, and they're fairly stabilized at that. Each case has multiple claimants or could have multiple claimants in it, you know, but it's been relatively stabilized.
You know, we, as the defendants and all of our other defendants, and the plaintiffs are all vetting these cases, and, you know, the judge will eventually hold hearings and decide how he wants to proceed. You know, of course, there's mediation. It always happens in these sorts of things. You know, there's no new bellwether trial on the docket, whether and if that happens. It all depends on progress in the mediation and progress in the vetting. You know, that's what's happening. We'll talk about this, you know, all the time as we need to updating investors, and you can read, you know, very carefully in our 10-Ks, which are very voluminous, you know, in terms of what's happening in that space. You know, the other side, look, we're watching very carefully is the AG cases.
There's also some of those. Matter of fact, many of them are in the MDL as well. Those cases are gonna lag the personal injury docket, you know, but there's a lot of it, a lot of AG, state AGs, you know, that have sued us both inside and outside the MDL. We're gonna keep looking at these. If we have an opportunity to take risk off the table, you know, at a price that's reasonable for the company and manageable for the company with appropriate protections like we did with New Jersey last year, we'll do that. Those are the two threads that we're watching. One is the PI docket in the MDL, and the other is the AGs, which is mostly in the MDL and sometimes outside of that as well.
Is it unlikely, I mean, the way things are trending, that we're really gonna hear much more on this over the next 6-9 months? Is this more of kind of a 27 or it's really hard to call?
I wouldn't say that. I mean, you know, this thing's, you know, it's fluid. You know, we're watching it, we're in mediation, and it's gonna develop over the course of this year. Again, I'll let investors know as we, you know, make decisions on this and report through public channels as well as in our 10-Qs and 10-Ks.
Anything on insurance recoveries that you're, you know, more or less optimistic around?
Look, the team has done a great job on this. This is a long game. You can imagine. We've got substantial insurance coverage. You know, the insurers never wanna pay, but we wanna make sure that they live up to their obligations, and we're really holding their feet to that, I mean, through arbitration, through litigation. You know, at the end of last year, we had already recovered about $750 million across all of the different legal dockets that we have. You know, and we continue to work and advance this. This is an important piece of it. The only thing I'd say today is, as of the end of last year, it's about $750 million recovered.
Do you think the drag on your multiple from liabilities is still a pretty material overhang that is, you know, kind of unwarranted?
I think there is some overhang. You know, there's this, you know, risk discount, I think, within the company, which is why I'm really focused on this, you know, because I do think it's important for us to bring some closure to these, again, at prices that are reasonable for the company, that take risk off the table and protects the company down the path. You know, what I think tripped us up in the past was we, inside the company, focused way too much time up and down the chain across 62,000 people on litigation. In fact, it's a very small handful of us that need to manage this.
The other 61,900 people ought to be focusing about the customer and innovating and commercial excellence and all the things that I've talked about, and I think we've made that good pivot. Most of the people are really focused on how do you drive value inside the company, and a few of us are thinking about, okay, how do we take risk off the table?
Great. Thanks a lot for the time.
You bet. Thank you.
Making it in.
You bet. Thank you.
Thank you.