We've started strong in the first quarter. You can see incremental leverage was up -- if the math is nearly 70% leverage in the first quarter sequentially and will continue to drive leverage. We, of course, have to factor in all the uncertainty that's going on in the world. But teams committed to driving it and I would say in the long run, also I don't see why we can't get to the 30% to 40%. Our personal safety business declined mid-single digits organically versus last year's 20% pandemic-driven comparison. Looking ahead, we continue to anticipate that COVID-related disposable respirator demand will decline as we move through 2022. However, if trends change, we remain prepared to respond to changes in demand as COVID impacts evolve. Turning to the rest of Safety and Industrial. The first quarter at a 47% conversion was pretty much what we expected. It was all in the guide in the 90% to the 100%. The first quarter conversion is driven by two pieces. One is higher compensation expenses from a year-over-year basis as we paid out. Reconciliations of the non-GAAP measures can be found in the attachments to today's press release. Please turn to Slide 3. Before I hand the call over to Mike, I would like to take a moment and highlight a financial reporting change we are making starting here in Q1 2022. We recognize that the increases in legal-related charges that we have incurred the past couple of years have impacted investors' understanding of our underlying financial and operating performance.

Understood. But it's not a sort of material headwind dialed in for Q2 or the balance of the year. You can sort of cope with it, the shortage still.

Questions & Answers:

If you look at PFAS, the other one trial schedules, I would say, have been moving frequently. We we're currently scheduled for two trials this year. We have a June trial in Michigan, and then we have an October trial in Alabama. The Aqueous Film Forming Foam multi-district litigation, the first trial there is not expected until 2023. Our next question comes from Jeff Sprague with Vertical Research Partners. You may proceed with your question. That's helpful. And then just my follow-up around the EMEA region, you saw organic sales down about 2% there in the first quarter, understood that probably April is maybe trending worse than that based on Monish's comments. Maybe help us understand kind of are you seeing in EMEA exactly? Most companies seem to say it's about the same as it was a few months ago. Your sort of numbers and comments imply that you are seeing some kind of shorter cycle weakness there. Year-on-year conversion was lower due to higher cash compensation and an increase in capex for growth and sustainability investments. Looking at the full year, our free cash flow conversion expectations of 90% to 100% remain unchanged. As you know, we currently have a very fluid environment, especially around global supply chain and logistic challenges. Therefore, we will experience some working capital ups and downs in the short run, but you should see the benefits of the power of data and analytics and operational rigor start to play out once things stabilize. Sure, Scott. Listen, the team did an amazing job. As I've talked about the tools that we've had, the daily management. Last year, we started slow on pricing, 0.14%, went up to 1.4% in Q3 and 2.6% and in Q4.

Despite the current environment, the Health Care Business Group is focused on delivering clinically differentiated innovative platforms that improve patient outcomes and reduce cost of care. We have been sharply focused on three key segments: wound care; healthcare IT; and biopharma filtration. These segments are well supported by key market trends, which include: increasing chronic conditions driven by an aging population; shifting of care to lowest cost setting; improving healthcare access trends; and finally, digital and connected solutions. Please turn to Slide 15. A question for Monish, please. Just on the FX assumption for the year, 3M, historically, has been one of the few companies that actually use financial hedges on FX. Is this still in place? And there's typically a lag when you use those hedges, so -- versus what you're seeing in the spot market? Just what's -- I can see you've got that 1% to 2% in guidance, but are the hedges at play? Second is the adjustment. So you can see how much you're spending on litigation and you can see the -- bring clarity to our underlying business. So, hopefully, that clarifies.

Call participants:

Thank you, John. And I wish you all a very good morning. Please turn to Slide 9. The 3M team delivered strong execution in Q1 in a macro environment that remains extremely fluid and increasingly uncertain. And so EMEA down 2% in Q1 really was led by declines in our Consumer and Safety and Industrial businesses. Transportation and Electronics was down slightly. Health care was up actually low single digits in the quarter. So we saw some impact from both, I would say, COVID as well as the supply chain disruptions and the – I would say, the challenges in Ukraine. Sure, Steve. I'll just start with the overall guide for the year. As you know, we don't give quarterly guidance. So the guide for the year, coming into the year was 2% to 5% organic growth. Yes. So I'll start with your operating leverage question, Brendan. What I've said is, always in the long term, 30% to 40% is what our targeted leverage is, incremental leverage. And when you just think about it and look at our gross margin, which is anywhere between 45% to 50%, you can see you can get to the 30% to 40%.

Yeah, Andrew. I would say you highlighted a couple of those particular challenges. The supply chain more broadly is impacting all of our businesses. So we're seeing disruptions in raw materials, logistics, inflation all that's impacting broadly our portfolio.

3M News Center

So it's a – it is an ongoing dynamic that we're watching closely. We saw strong growth in a number of our businesses as we came through the quarter and Monish walked through the outlook on the macro. So certainly, that will have an impact on EMEA. But I would say we're watching it closely as we look at the rest of the year. Hopefully, I answered your question, Brendan, on item one. On your second item on operating cash flow, again, we have reiterated that we are -- and we started the year with 90% to 100% free cash flow conversion. We told you that at Investor Day, we reiterate. We have a path to get to the 90% to 100% free cash flow conversion. To wrap up, although we remain cautious in this current environment, we are bullish about the long term. We are committed to delivering for our customers, taking appropriate price actions, driving operational execution and managing spending while continuing strong financial rigor and maintaining a strong capital structure and financial flexibility. In the long run, we will grow about the macro, expand margins and deliver strong cash. I want to take a minute to thank the 3M employees for delivering for our customers and shareholders in a very uncertain and fluid environment. As Mike mentioned, I encourage you to read our annual Global Impact Report to be released on May 11 with more details on our priorities and progress. Now I will turn it to Monish, who will cover the details of the quarter. Monish? No scissors or tape needed—just pull to expand, wrap in a 360° fashion around your item, tear by hand, then place into a box for a nested and protected ride.