Ladies and gentlemen, thank you for standing by. Welcome to the 3M Third Quarter Earnings Conference Call. As a reminder, this conference is being recorded, Tuesday, October 25, 2016. I would now like to turn the call over to Bruce Jermeland, Director of Investor Relations at 3M.

Thank you, and good morning, everyone. Welcome to our third quarter 2016 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 and then we'll take your questions. Please note that today's earnings release and slide presentation accompanying this call are posted on our Investor Relations website at 3M.com under the heading, quarterly earnings. Before we begin, I would like to address our upcoming investor events, highlighted on slide number two. First, we have set the dates for our 2017 quarterly earnings calls. They are January 24, April 25, July 25, and October 24. Second, we'll be hosting our 2017 outlook meeting on the morning of Tuesday, December 13 at the Grand Hyatt Hotel in Midtown Manhattan. Invitations for this event will be sent this afternoon, so please RSVP as soon as possible. We hope to see you there. Finally, next June we will be hosting a European Investor Day at our Germany headquarters in Neuss. A welcome reception will be held the evening of June 6, followed by management presentations and a plant tour on June 7. Please hold the dates. Additional information will be provided closer to the event. 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'll hand off to Inge.

Thank you, Bruce. Good morning everyone, and thank you for joining us. In the third quarter, our company delivered increased earnings, robust cash flow, and a broad-based margin performance with each of our business groups posting margins greater than 22%. At the same time, we continued to execute on business transformation, took actions to strengthen the portfolio, and increased investment in future growth. The third quarter also marked our company's 100th straight year of paying dividends, which we increased for each of the last 58 years. With respect to EPS, our team posted earnings of $2.15 per share, up 5% year-on-year. We delivered total sales of $7.7 billion, flat versus last year's third quarter. Organic growth was down 80 basis points while the combined impact from acquisitions and FX increased sales by a similar amount. Looking closer at our organic growth, we once again delivered positive growth from three business groups: Consumer, Safety & Graphics, and Health Care. Consumer paced our company's growth at 3% with positive growth in all businesses. Safety & Graphics grew 2% organically, led by roofing granules and commercial solutions. Organic growth in our Health Care business was 1.5%, which was tempered versus recent quarters due to some softness in the U.S. healthcare market. Industrial's organic growth declined 1%, and we continue to anticipate growth in this business to turn positive in the fourth quarter. Finally, Electronics & Energy was down 8% in the quarter, in line with what we indicated during our last earnings call. Even in a challenging macro environment, the strength of our business model is enabled us to deliver premium returns and generate healthy cash flow. Company-wide, we increased margins 40 basis points to nearly 25%, ranging from 32% in Health Care to just shy of 23% in Industrial. At the same…

Thank you, Inge, and good morning everyone. Please turn to slide six for a recap of our Q3 sales performance. Organic local currency sales declined 80 basis points in the third quarter, with volumes down 1.4% and selling prices up 0.6%. Our acquisitions of Capital Safety and Membrana net of three small divestitures added 0.3 percentage points to sales. And foreign currency translation increased sales by 0.5%. In U.S. dollar terms, worldwide sales were flat versus the third quarter of last year. Looking at organic growth by geography, the United States declined 0.3% in Q3. Our Consumer and Safety & Graphics businesses generated positive organic growth, which offset declines in Industrial and Electronics & Energy. In Asia-Pacific, organic growth was down 2.2%. Solid growth from our Consumer, Health Care and Safety & Graphics businesses was more than offset by a double-digit decline in Electronics & Energy. Organic growth increased 1% in Japan and declined 2% in China/Hong Kong. Excluding electronics-related businesses, Japan was up 1% and China/Hong Kong grew more than 4%. Let's now take a look at the EMEA region starting with West Europe. West Europe delivered 1% organic growth, led by Germany, Sweden, and Spain. From a business perspective, growth was led by Health Care and Safety & Graphics. Central East Europe and Middle East/Africa declined year-on-year, impacted by ongoing challenges in Turkey and Saudi Arabia. In total, organic growth across EMEA declined 1% in the quarter. Finally, organic growth in Latin America/Canada was 1.2%. Mexico grew 5% and Brazil rose 2% while Canada declined 3%. Please turn to slide seven for the third quarter P&L highlights. Third quarter sales were $7.7 billion, and we generated record third quarter earnings of $2.15 per share. GAAP operating margins were again strong at 24.7%, up 40 basis points year-on-year. The…

Please limit your participation to one question and one follow-up. One moment, please, while we compile the Q&A roster. And our first question comes from the line of Joe Ritchie of Goldman Sachs. Please proceed with your question. Joe Ritchie - Goldman Sachs & Co.: Thanks. Good morning, everyone.

Good morning, Joe.

Good morning, Joe Joe Ritchie - Goldman Sachs & Co.: So my first question I guess is going to be on healthcare. It's been such a great business for you guys for such a long period of time. And the growth we saw this quarter was about the slowest growth we've seen, I think, since 2009. And so to your comments from earlier that you expect the soft market conditions to persist, I'm just curious. What specifically slowed down this quarter in that business?

Well I think first of all, geographically, U.S. slowed down. And it slowed down basically in the last months of the quarter. And then I think there's two other elements out there in the world that happened to that business. Some, it's in developing economy where Brazil had a little bit of slowdown that was more than we expected. And then as you know, things are going on in Central East Europe, specifically in Turkey, that tempered it, generally speaking. So when you look upon it from a business perspective, if you tempered in United States which we did, that would go over all businesses. The U.S. I think tried to move some purchases forward maybe one to two quarter. That's what we're talking about, like mid-term or short-term tempering. So I would say all businesses except one, which is oral care, had positive organic local currency growth. And oral care was flat, so still showed growth but it was tempered. And by definition, I'm not concerned at all relative to the future of that business. And we continue to invest for the future. We've done quite some investment, as you know, the last couple of years. So there's no concern. Was just that it slowed down and it was basically in the last months of the quarter. Joe Ritchie - Goldman Sachs & Co.: Got it. That's helpful color. And I guess the – just following on, on the kind of soft market conditions to persist comment. Does that mean we should be expecting 1% to 2% type growth in this business moving forward? Or how are you guys thinking about that?

No, no. We don't – no, we don't change the guidance relative to that business moving forward at all. I think you should think about it, for the fourth quarter this year will maybe be very similar to the third quarter and then it will come back in the first quarter. I cannot tell you here and now – we cannot tell you here and now when in the first quarter that will come. It come early, mid or late in the quarter but it will come. So we don't change the guidance at all for this business moving forward into 2017. Joe Ritchie - Goldman Sachs & Co.: Got it. Okay. No, that's helpful. And maybe my follow-on question is on the buyback. I saw that you guys reduced the buyback guidance for the year. I think when we last spoke, we talked about if perhaps M&A was not going to come through that maybe we'd see a little bit more aggressive share repurchases in the second half of the year. And so I'm just curious, maybe talk a little bit about the M&A pipeline and just the reasons for the reduced buyback items. Thank you.

Well relative to the pipeline, it's still very good in terms of what we are looking upon in all businesses. And as I've said earlier, there's some prime target in terms of business groups there when – and if you think about it, with Industrial, one-third of the company, of course we have interest in that business. Health Care and Safety & Graphics continue also to be prime objectives for us, but the pipeline is very solid for all of the five business groups. So solid. As always we have a look upon it from a strategic perspective and then make sure that the valuation is acceptable for us. And Nick will make some comments here relative to buyback.

Yeah, Joe. Yeah. As you've seen year to date, we've repurchased $2.8 billion of our stock. And in Q3, the market was trading at near all-time highs and you've heard me say this before, that one of the factors that influences our repurchase activity is relative value and price. And as you know, that's why we stepped up our activity earlier in the year in the first quarter. So over time, the pace of our repurchases is dependent on other demands on capital such as M&A along with the relative value of the stock. And those things are what's impacting us, now putting a guidance at $3.5 billion to $4.5 billion for the year. Joe Ritchie - Goldman Sachs & Co.: Got it. Thanks, guys.

Thank you.

Our next question comes from the line of Andrew Kaplowitz of Citi. Please proceed with your question.

Hey, good morning, guys.

Good morning, Andrew.

Good morning, Andy.

Nick, you've said publicly that you're cautiously optimistic that you can grow margin in 2017, but obviously your overall markets have been a bit weaker than you expected. As we get closer to 2017, do you still have confidence that you can grow margin? And how should we think about the contributions of the drivers of the margin expansion? Business transformation should be a more meaningful driver than this year. Price costs still help. Maybe mix helps, but obviously we know pension and FX is offset. So maybe any more color that you can give us as we're getting closer to 2017 here.

Yeah. Sure, Andy. As you can imagine, we're still working on our 2017 outlook. And on December 13, we'll provide more details on that at our outlook meeting. At a high level, Andy, we expect an external growth market to continue moving sideways in 2017. That's the overall external picture we're anticipating. From a business perspective, we do expect our Industrial and Electronics & Energy businesses to have improved growth rates in 2017 versus what we've been seeing in 2016. And then to part of your question on margins, Andy, we're still expecting price raw materials to be positive to earnings and to margins in 2017, probably at a lower level of contribution to margin enhancement than what we've seen in 2016. And then business transformation, I expect that to have a increased positive impact on our earnings per share and net margin in 2017. I think you've heard me say that we expected and we're realizing approximately $50 million of operating income benefit from business transformation in 2016. And that's part of our journey moving to $500 million to $700 million of savings by 2020. And I'd expect 2017 to be a continued progression on that path. That said, we are as you mentioned, we're going to have a couple headwinds. Pension is likely to be a headwind for us. If I were to take current rates where they are, I'm estimating this will be about a $150 million headwind for 3M in 2017. And FX will likely be a headwind for us, not so much based on movements in exchange rates, but the fact that we won't be repeating some of the hedging gains that we experienced in 2016. All in, those lower hedge gains will probably hurt our margins by about $100 million. So all in, Andy, that's the puts and takes of a preview of what I expect we'll be talking about in a month and a half.

Okay, Nick. That's very helpful. Inge, maybe I can ask you about Industrial. You said the U.S. looked a little better, but overall it seems like Industrial, it didn't get as good as the comps got easier. Abrasives turned down again it looks like sequentially. You do have easier comps as you mentioned in 4Q and you expect growth. In advanced materials, I mean it should shift, especially as you've got this defense contract from last quarter. So should we resume low single-digit growth moving forward? And how confident are you of that in that business?

Yeah, as you said, so it being U.S. that hold back Industrial during the last couple of quarters, it was better in Q3. So that's positive, and we will see positive growth for Industrial in Q4. And that will be driven exactly as you said relative to we start to deliver now on the body armor. And we see some uptick in some of the other businesses. But it's very much the comp that will be a driver for us in Q4 and as we go into Q1. I'm very confident in our Industrial business group relative to growth going forward. And the reason for that is we have worked now for quite some time, not only in Industrial, but in all business group in order to make sure that we get the portfolio that be relevant for us in order to serve our customers. We have seen during the last couple of years some heavy lifting going on in the portfolio work, not only in Electronics & Energy but in Safety & Graphics and in Industrial as well. So when I look upon it, we are moving the company to spaces and places where we are more relevant and that we can also capitalize on technology conversion, meaning also driving better margin for us. So in fact, we have fired some of our portfolios over the years. So and it takes some time as you go through that process. It's not like you start to shift your portfolio and you start to shift your infrastructure in the company and everything will come immediately. But I'm very positive that we, now we start to see Industrial turning the corner as we move forward. And we will see the first quarter happen here in Q4.

Thanks, Inge. Appreciate it, guys.

Thank you.

Our next question comes from the line with Scott Davis of Barclays. Please proceed with your question.

Hi. Good morning, guys.

Morning, Scott.

Want to get a sense, when I look at Electronics & Energy, you're going to anniversary the renewable energy exit that's 300 basis points. So pound for pound that means you're down 4.5%, not 7.5%. I mean do you have a sense of after that you start to get double easy comps, I guess, if you will. Is this a business that can turn actually positive in 2017 or just less negative? And I know your comment earlier is they would get better, but can we count on it not hurting us any more I guess is my question.

Yeah. Okay. Yeah. Good morning, Scott. I think first of all, you have to look upon that business in terms of the overall portfolio. So for this quarter, just to make a couple of comments, we did better in electronic than we thought, and it was slightly tough with energy. In the energy piece was some big project that was delayed, specifically in telecom and in utilities. So I think that's again coming back to uncertainty in the market. It was not much of a shift, but it was a little bit of a shift. All in, we were down 8%, exactly as we told you at the last earnings call. So I feel good about that piece. Going forward, as we have shift the portfolio there as well, we will as we go start to see some positive evolution relative to growth rate because we are moving to segments that are growing faster and where we are more relevant. So if you look upon it, it will be around automotive electrification, data centers, sustainability, chemistry and green automation. That will be a shift as you go relative to where you today can look upon – it's very much design and assembly. So we have a range in the five-year plan as you know of zero to 4. We are in the first year of that plan which is then down. So it will be still the low end of that range, but as we roll in here for the future we should start to see some more positive movements forward for us in terms of growth rate.

Okay. That's very good. And then as a follow-up on M&A – and I know...

And the other thing though, Scott. You look upon the margins now in that business. That business is now running at almost – they're 24%. So if you think about that where we started. We started at 15% 16%. That's work not only of cost out and structure out; it's also the portfolio work that had been going on. So for me when I look upon that business – and I think for all businesses, we should be positioned to win in places where we are relevant and can capitalize on technologies that we drive productivity and efficiency for our customers and also margins for us. So I think 8% down, you would like to grow. But we're able now to as I've said earlier, even where we are tempered on top line, we are able to deliver based on our new model. And we couldn't have done that for you five, six years ago. If we were down 8%, it would be terrible on the margins, so I feel confident now with our model there. And now as we move forward, now we will start to see some positive growth.

I remember those days well.

Yeah.

Just a quick follow-up, guys. When you're looking at transactions – and I think in the past you've said you'd like to start to look at some things that are a little bit bigger. I mean what are the probabilities we see in a deals larger than Capital Safety over the next 12 months?

That's a very good question. It's a very good question. I don't know. I cannot get a probability of that. But as I've said the portfolio is rich in terms of candidates. I'd rather do slightly bigger than smaller. As I said earlier, we have during the last couple of years stepped up our probability – or the output on what we have done. And by definition, in order for us to move the needle forward, they should more sizable than we did in the past. So I think I hold it for then. Then when the news are coming out, we'll look upon the size of them. But we are ready. I mean we are ready. We are ready. I think we're on a good position to do what we need to do in order to bolster growth with or without acquisition. Also organically, we're doing okay.

Okay. Good. Thank you for the answer.

Thank you.

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, good morning.

Good morning, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Good morning. Just wondered first of all if you could give a little bit more color on the slowdown you saw in the EMEA region in recent months relative to Q2. I know you talked a little bit about Turkey had slowed. But did you see anything broader, anything in Western Europe, for example?

Well, yeah. So if you start first of all, of Central East Europe and Middle East Africa. So yeah, of course, we saw, due to the situation, we saw Turkey slow specifically. And I think there was some slowdown also in Saudi Arabia. But I think if you look upon that region in total, yes, it's a tough situation. It's a tough situation there, and I think we have just to wait out for the euro-political situation to be settled before you start to see some big growth coming back there. Impact on West Europe. We had a very good quarter last quarter in West Europe and pleased with the quarter this quarter as well. Slightly slower growth, but still Germany had 3% growth in the quarter coming on a quarter last quarter that was 6%. So you add them together because the – a quarter or year doesn't start and end with a date. So if you look upon that. You take the biggest economy in West Europe, Germany, 6% for 3%. Let's say they are growing now around 4% and the business transformation is helping them. So I think the biggest concern generally speaking will then be Central East Europe and Middle East Africa in terms of growth rate at this point in time. I visited – Nick as well Europe just a couple of weeks ago and there's good momentum in the market, very much driven by automotive, by the way. So if automotive is doing well, we are doing well as well. So – but you saw this time, good growth in Sweden; good growth in Spain; Germany 3%. It's better growth than United States. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Very helpful. Thanks. And then my follow-up question would be around electronics and within that on the OLED transition, specifically. I just wondered how you thought about your cost base on brightness enhancing film in light of that transition. And also I guess you've already started to see some impact from the OLED transition this year. Do you think that impact is significantly larger next year or pretty much steady in terms of transition rates?

Yeah. I think when you think about the cost, think about 3M as a company that are using multiple technology platforms. We have 46 technology platforms that is owned by the company, not one specific division or country. And then number two that we have manufacturing assets that can be used in multiple businesses. So – and as you can see now, the margin in that business, EEBG, as a business group, is on a very respectable level. So I would not be concerned on the cost side of the assets. On the technology transition, as I've said before, always when there is a technology transition, you can short term lose a little bit and then come back. I think it's important to know both in LED and OLED, we are providing solutions to those devices also that have OLED. It's slightly less but – than versus LED but we are still in that business and it's expanding in a way. I will say going into next year, I will look upon it may be similar to 2016 as we roll into the year. But we have worked on that for a long time. This is not a surprise for us. So that means that technologies is in the pipeline. And as I said, technology transition is always giving you either short-term up-tick immediately or you have to have a little bit of drag. But it will not be very, very long. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thanks.

Thank you.

Our next question comes from the line of Steve Winoker of Bernstein. Please proceed with your question. Peter Richard Lennox-King - Sanford C. Bernstein & Co. LLC: Oh, good morning. This is Peter on for Steve.

Morning, Peter. Peter Richard Lennox-King - Sanford C. Bernstein & Co. LLC: I was hoping maybe we could talk through some of the core pricing dynamics a little bit. So sort of parsing out between how much pricing was to offset FX headwinds and how much was core sort of pricing increases. Because it looks like price in the U.S. was negative but in many regions with positive price, that those are the regions that had negative FX. If you could talk to that a little bit.

Of course, Peter. Yes. For the third quarter in total, we reported 60 basis points of price growth. And 30 basis points of that was related to pricing adjustments we make in relation to FX. So you can split that right down the middle. 30 of it is core underlying price growth and another 30 related to FX. And many of you have probably heard me say over time that stripping out FX that our core ability to price ranges between 30 and 50 basis points. So we saw third quarter as another consistent quarter in that trend. In regards to the U.S., we were down slightly in price. That's really consistent with where we've been for the total year in the U.S. with prices more or less flat. And there's selected businesses at any given time where we're choosing to raise price, some where we're choosing to lower price based on competition. And in the case of the U.S., there's been selected cases where we've adjusted our pricing in our strategies to gain market share. Peter Richard Lennox-King - Sanford C. Bernstein & Co. LLC: Okay. Thanks. And maybe actually just sticking on the price or price raws. Earlier, I think it was Q3 you said you were expecting 100 basis points of benefit for this year. I know you've addressed next year. Is that still the range you're looking at?

Yes. We're still expecting price raws to be adding approximately 100 basis points to our margin for total 2016. Very similar to what we saw in Q3 which was also 100 basis margin benefit. Peter Richard Lennox-King - Sanford C. Bernstein & Co. LLC: Okay. Okay. That's great. And then just maybe last one on that, on the same point. How much – what was the split between price and raws in the quarter?

Of the 100 basis points of price raw materials, 70 basis points is coming from lower raw material prices. And that's really a combination of both. Some benefits we're seeing in commodity prices but increasingly reliance on our own sourcing teams' negotiations and productivity efforts. So that's 70 basis points. And the other 30 basis points from the price I talked about earlier. Peter Richard Lennox-King - Sanford C. Bernstein & Co. LLC: Right. Okay. Okay. Got it. That's helpful. Thanks very much, guys.

Yes.

Thank you.

Our next question comes from the line of Shannon O'Callaghan of UBS. Please proceed with your question.

Morning, guys.

Morning, Shannon.

Morning, Shannon.

Hey. On the Electronics & Energy margins being up at 24%, even on the down volumes, how should we think about that segment now? I mean you've got all the other segments sort of 22% or better. Comps are easing there. I mean should we now expect that, that kind of joins the rest of the group here at 22% or above on an annual basis?

22% for the EEBG? Is that what you ask or what?

Yeah. Yeah. Electronics & Energy, I mean seasonally it's a little stronger here at 24%. But you've gotten every other segment up 22% and now you've changed the business model there. The volumes are easing. I mean is that kind of a reasonable entitlement view of where that segment should go?

Yeah. Shannon, we expect E&E's margin for the total year of 2016 to be about 20% operating income margin. And it remains one of the businesses that we continue to see overweight margin expansion capacity in the coming years. So we're certainly striving to get it up to the company average, and I think you'll see it overweight for margin expansion in the next couple years.

Okay. Thanks. And then just on this sort of temporary healthcare slowdown that you're seeing, just a little more color on what's driving that. I understand you think it's temporary and it's going to – you're confident in the future. But is it more channel inventories? Are there specific uncertainties that are driving a pullback? I mean it seemed like it was kind of broad-based.

Yeah.

In the U.S...

Yeah. I think the reality of business is that it will be both. But it start by people holding back a little bit and then they work down the inventory. But it's not an inventory correction in any sort or shape or form. I think it is yes, that people have a little bit of uncertainty here in the quarter of how this will shake out and then they're ready to go again. So I think it's a normal reaction for anyone around the world when you're going into a period of uncertainty relative to, will there be any changes or policies as you move forward, et cetera. So I'm not too, honestly, I'm not concerned at all – as I said, and you like to see more growth there of course with the margins we have. But it's not overall concern at all.

Okay. Thanks, guys.

Thank you.

Our next question comes from the line of John Inch of Deutsche Bank. Please proceed with your question.

Thank you. Good morning, everyone.

Morning, John.

Hey – morning – Inge, I realize you have various industrial initiatives you're working on and you do have easier compares in the fourth quarter and obviously into next year. What about the markets, the broader U.S. industrial markets in which you serve? What do you see happening today in terms of the sequential trend? Is it getting better? Is it flat? Does the end of the quarter get a little softer as some companies experience? What did you see? Again, not your initiatives. I realize you've got initiatives that you're outperforming. But what are your markets industrially doing?

Yeah. Well as you saw, the U.S. IPI was negative 80 basis point in the quarter for Q4. So you think about that in terms of there's some negative thing there. But we see indications of positive movement in the industrial space relative to manufacturing. So we are not immune to the overall industry. And when you – at least what is projected now for the IPI in this was actually in Q3 was down 80 basis point in IPI output. For us, as we move ahead, we will see positive growth in Q4. And if you look into the year as we move ahead, Industrial is going for us over many, many segments if you like. Even into Safety & Graphics, in some pieces also in energy. And we see slightly, slightly positive movements in that total market segment as you move into next year.

Yeah. I'm sorry, Inge. What indications are you looking at where you say there's positive movement relative to manufacturing? You were talking about the macro. Is that sort of a customer commentary or is it about inventory? Or what exactly are these indications?

Yeah. I think it's both. It's like when you work with the customers, you get the indication of they start to see an uptick in order. I cannot comment on inventory. I don't think we have seen any change in inventory, to be honest. And I think it's a okay level at this point in time.

Switching to Electronics & Energy, could you size for us how big your businesses are that would have some sort of a – would touch in some manner LED or OLED? Like I mean just how big are these businesses? It's like $1 billion, $1.5 billion, something like that?

John, our electronics business is $3 billion out of the Electronics & Energy business. The display material solutions division within electronics is about 60% of that total, $3 billion, so about $1.8 billion. So, and much of that is connected with LCD but not all of it.

Yeah. Nick, and what do you believe is the mix today of LED in these applications versus O-L-E-D or OLED?

Well it depends, John, on device. Right now, mobile phones is the most significant device impacted between LCD and OLED. And we see that as approximately 30% OLED today in 2016 and about 70% still LCD.

And the rest are lower in the mix? Is that?

Right. For instance, television, still vast, vast majority LCD or LED. And tablets is a pretty small number there as well.

And then just lastly, is the collapse of the British pound actually helping you in terms of your position in Britain and Europe or is it a headwind? Because relative to, I realize that FX, like the hedging gains issue, I'm sort of excluding that just in the context of the pound's collapsed, euro's down. It's not down that much. So all else equal, is this a net positive or a negative for 3M? And maybe you could put it in a context for us.

John, it's about as close to a net neutral as you can imagine outside of FX. But from a standpoint we make some things in UK that we export, we also import things to UK. So it's very close to net neutral. Just having the pound devalue, that of course has a negative impact, but I think you're asking more the underlying and we're not a gainer or a loser in that.

So you're fairly agnostic to the pound, like if the pound goes to parity, you're going to be really agnostic to that scenario.

So from a pound perspective, if for a 5% move in the pound, that would be about a $0.015 negative impact on us, just taking the FX impact of our UK. It's about 3% of our total global business. So just to size it up, how the pound movement impacts our total earnings per share.

Got it. Thanks very much. Appreciate it.

Yes.

Thank you.

Ladies and gentlemen, as a reminder, we ask that you please limit your participation to one question and one follow-up. 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, gents.

Morning, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: First of all, Nick, helpful color on the 2017 puts and takes. I'm going to ask you to maybe comment on top line a little bit, because quite a few of your peer group companies are sort of starting to opine on 2017. And I'm wondering, you mentioned the macro sort of sideways which I think is probably in line with expectations. What sort of growth rates do you think 3M can generate in another flat year? And I'm asking in the context of a 3% organic consensus expectation for next year. Is 3% even in play here? Or any comments there would be helpful.

Yeah. Nigel, I'll have to ask you to wait until December 13 for more specific numbers on that. But directionally, my comments about the external economy continuing to go sideways, I think that's a fair representation about how we're planning right now. And then incrementally that we see better improved growth in both Industrial and Electronics & Energy. But the actual numbers, let's wait until December 13 to talk about those. Nigel Coe - Morgan Stanley & Co. LLC: Okay. No, it's worth a try I guess. And then on pricing, I was quite surprised to see Latin America/Canada still above 5% given that the currency movements are starting to level off year-over-year. So I'm wondering, is that more of an inflationary type of impact that we're seeing with our pricing? And therefore, would that be stickier going forward?

Yeah. Nigel, when I look at Latin America and our price growth there, yes. As we saw the real strengthen quite a bit in recent months, but we're still seeing high inflation in the economy in Brazil which is giving us the opportunity to be having price growth that's matching what's going on in the economy. So yes, it's much more around inflation than it is around FX right now. Nigel Coe - Morgan Stanley & Co. LLC: So plus 5% you think is sustainable going forward?

Sustainable going forward, I probably wouldn't go that far to call that sustainable. A lot depends on what the inflation rate continues to be, and I think that will be influenced by what happens with FX rates in the coming quarters. Nigel Coe - Morgan Stanley & Co. LLC: Okay. I'll leave it there. Thank you very much.

Our next question comes from the line of Robert McCarthy of Stifel. Please proceed with your question. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Good morning, everyone.

Good morning. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: So I guess the first question I would have is, given the prospect for sideways growth, which isn't particularly surprising given the macro backdrop we've seen over the past couple of years, does that allow you to do anything differently in terms of your execution of global excellence or SKU rationalization in terms of picking up the pace anywhere? Or do you think it's just kind of steady-state? I mean, does the environment that's presented to you create more opportunities in general on structural restructuring, business transformation or cost take-out to accelerate some actions that you otherwise wouldn't take given the demand environment?

Yeah. Well, I think first of all, it's – I don't think we're in a situation that we were in 2008 or 2009 where really everyone was pushed to do extraordinary things in order to improve the operations because there was no choice. I think we are in a situation now where we can work a model of do it when we can versus when we must, and I think that's an important differentiation to think about it. And everything we are doing now with the type of centralization, if you like, even if it's on a regional base, will help us a lot. And we are, yes, marching forward on that, marching forward in order to make sure that we build an organization for the future for 3M that both can grow and is becoming even more effective relative to operational excellence in the company. So we will go as fast as we can, but we are not taking any risks relative to be able to serve our customers. I think that's the important element. We are here to deliver to you what you expect, but we're also here of course to deliver to our customers. So I think you have this balance always when you implement new initiatives that you would like to go fast, but you have to make sure that you really understand the implication with the customers. So I think that's the answer to your question, that I and the team here, we are pushing as hard as we can to come as fast as possible to the most effective model, but you have always to think about customer first when you make those changes. But by definition, when you think about what we do in West Europe now, in terms of our inventories and…

Yeah. Well, you know, if you think about our business model, we have a proven model that we are able to outgrow IPI and/or GDP by 1.5x IPI or GDP. That is of course not happening every year, so but if you look upon it for 10 years, we have been able to do that. With all initiatives that we have taken in the company relative to the portfolio, relative to improved commercialization processes, et cetera, we should be able to do slightly better than that as we move ahead. I don't make a distinction in between certain segments that some will outperform more than others. We should be able to outperform at least 1.5x, maybe 1.7x as we move ahead in every segment we compete in because that is the expectation. That's why we are there. If we don't do that, we are not relevant in that segment to our customers, and then we have to do something different. So the other comment I would like to make is we cannot predict when a turnaround is coming in the economy. We cannot predict that. I don't think anyone can. One thing I would like you to know, we are ready. We are ready with everything we have done the last couple of years in terms of the portfolio, terms of the structure, in terms of stepping up the investment in research and development from 5.5% closer to 6% and the supply chain model, enabled by business transformation that all start and end with the customers. We are ready. So when it comes, we are ready in the forefront to capitalize on that. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Thanks for your time.

Thank you.

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

Thanks. Good morning, everyone.

Morning, Deane.

Hey just a quick question from me – and Nick regarding the lower tax rate this quarter you mentioned a favorable audit. But did you also repatriate as much cash as you had talked about last quarter?

Yeah. Deane, we've – as you know, we typically set a repatriation plan at the beginning of the year. We sometimes modify that if anything – well, it's gone up slightly of what we're repatriating from what our plans were at the beginning of the year. So it's eked up a little but not significantly, Deane.

Got it. And then just to clarify, and I might have missed this, on the strategic investments in the quarter, the manufacturing restructuring. What segments were those addressing and do you plan to do more there?

Yeah. The strategic investments that we had in the third quarter, some of them touch multiple businesses including Health Care and Industrial in the third quarter. And in total, we're still expecting that we're going to accelerate that pace throughout the year in 2016. It's been ramping up each quarter. I'm highly confident the fourth quarter will be the highest quarter for strategic investments for 3M for 2016 and pretty close to being in line to what I originally guided last December.

Got it. Thank you.

Thank you, Deane.

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

Hi. Just a quick one. Can you peel back a little bit what you're seeing in China in terms of end markets or your business lines which are getting better versus worse and how you're thinking about competitive pressure in the wake of ongoing SOE reform?

Yeah. Hi. Good morning, Laurence. Yeah. Well first of all, if you take our operation in China, we, ex-Electronic, we have 4% organic local currency growth in the quarter. If you take in Electronics into it which actually was down 11%, we were down 2 percentage for China. Now, if there is a clear improvement is what I will consider domestic-driven businesses. So if you take the five business groups for us in China, SGBG grew 18%, Consumer 12%, Health Care 8%, and Industrial 2%. And then Electronic & Energy was down. But if you think about that, we had four or five business groups in China growing. And it was very much in consumer healthcare, automotive aftermarket, automotive OEM, and personal safety. So I think that what we have talked about for quite some time about, so it's not really a shift to try to grow out the domestic businesses. It's coming but on the other hand it's a little bit slower we think versus the original plan. But if you think about that whole business; if you take the electronic part which is very much in Asia and in China, we had a 4% growth in China. You will like it to be 12% but it's 4%, and it's the biggest subsidiary outside of United States for us. So I am slightly positive as we move ahead relative to China. Now, that theme is driving productivity big-time. The model there today versus five years ago is different. Everything was about growth. We grew 15% to 20% year-over-year. We don't any longer. We grow 4%, so now productivity is a key element for us and I think that's important. We have good margins and we continue to expand margin there. So I hope that helps in terms of explaining China.

And just competitive pressure in any areas where you're seeing any real shift that matters?

No, I think you have over year seen more domestic businesses or companies type of stepping up and I would say in all honesty, some segments which is maybe more commoditized, it could be a challenge. And for us, as you know, we work very much with technology conversion and with brand equity, so it's less impact for us. But of course there is this competition and I would say I would more relate that maybe to local companies that try to build coming into the market. Mostly, I would say in commodity-related businesses, meaning it's a price game, it's not a performance game and you have to ask yourself at the end of the day if you are 3M would you like to play in that area? Because as I said, in EEBG I'd rather fire some SKUs if I don't make money and have lower growth but better margin.

Got it. Okay. Thank you very much.

Thank you.

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

Hey, guys. Thanks for fitting me in at the end here.

Good morning, Steve.

Hi. Good morning.

Good morning. So I didn't quite get the answer on electronics for next year, you said it's going to be better but does that mean growth?

Yeah, Steve, I'm going to leave it just as we expect it to be better. We'll talk more in December 13 of what we see for the total growth range for Electronics & Energy in 2017.

Okay. That's fair. What's going on in Health Care? 1.5% comp was a little bit lighter than I expected. Anything particular than tough comp to last year? Is it the Health Information Systems business that's maybe seeing a bit of hiccup after the strategic evaluation? What – would you point to anything in Health Care we should be watching over the next couple quarters?

No. As I said earlier on the call, it's basically United States the type of temper itself for the quarter, so I wouldn't be overly concerned about that. As I said earlier, you had some developing market, like Brazil, I think we saw a slowdown as well, but more than that, it's I wouldn't be overly concerned about it and I am not. And I think that's maybe the best piece for me to be in it, that I'm not overly concerned. But as I said, maybe in Q4 we will see equal quarter to Q3 until some uncertainty is in place. But as you see, we continue to invest. I told you about we did one acquisition in Switzerland for Health Information System, and then we also signed a partnership with Verily, both Verily and 3M, two very creative dynamic companies that are building out platforms. So we look very, very positively to not only Health Information System but all businesses in that business group.

One last quick one just on Q4. Nick, I think the implied price cost margin tailwind is about 40 basis points if I back into the 100 basis points you're guiding to for the year given you've been above that so far for the year. Is that about the right number for the fourth quarter? Is that just conservatism or is that kind of a new solid run rate to expect going forward, just trying to split the goalpost there a little bit?

Yeah, Steve, we have been seeing the benefits from raw materials slipping as we move from quarter to quarter. The 40 basis points where you're doing the math of coming out with 100 basis points, I'd call that more just a function of rounding where the actual math might come out a little higher than that and we're just rounding it to approximately 100 basis points. I wouldn't over read that Steve.

Got it. That makes sense. That's sort of our job to over read everything, sorry. Thanks. Talk to you soon.

Thank you.

Thanks.

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

Thank you. Looking ahead, we remain focused on executing the 3M playbook and preparing our company for the future. As you know, we have done a lot of work over the last several years to adjust our portfolio, improve our cost structure, enhance our technology capabilities and make us even more relevant to customers. So while the macro environment is challenging at the moment, we are positioned well for when global growth conditions improve. This is true both for developed and developing markets where we have the experience, the market position and depth of capabilities to capitalize on the win as their economies recover. With that, I think you for joining us this morning, and we're looking forward to see you in New York on December 13. Have a great day. Thank you.

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.