[bar1080]

"3M's legal troubles aren't over despite $18.5 billion in settlements"

"3M (MMM) is trying to put the country’s largest-ever mass tort case behind it. Even if it does, its legal problems are far from over.

The Minnesota conglomerate announced Tuesday it had agreed with plaintiffs attorneys to a $6 billion settlement that would end thousands of lawsuits from more than 260,000 veterans alleging earplugs made by a subsidiary caused hearing loss.

3M would make the payments between 2023 and 2029, splitting it between $5 billion in cash and $1 billion in stock, so long as the equity commitment is approved by the court."

https://finance.yahoo.com/news/3ms-legal-troubles-arent-over-despite-185-billion-in-settlements-115913197.html

[DewDiligence]

3M’s earplug settlement_is_official—NPV=$5.3B pre-tax/$4.0-4.5B after-tax:

https://www.sec.gov/Archives/edgar/data/66740/000006674023000073/a829238kex-991.htm

• 3M will pay the earplug plaintiffs a cumulative $6.0B (consisting of $5B cash and $1B stock) over seven years (2023-2029). These payment obligations have a pre-tax net present value (NPV) of $5.3B (using a 5.6% discount rate).

• The anticipated schedule of settlement payments is set forth in slide #6 of today’s CC slide deck: https://d1io3yog0oux5.cloudfront.net/_301a30c91c73d8aa14cff777dcbd5df5/3m/db/3194/30703/presentation/CAE+Resolution+Presentation.pdf . 3M already reserved $1.1B for this liability, so a new $4.2B pre-tax charge to GAAP earnings will be made in 3Q23.

• 3M expects that the settlement payments will be fully tax-deductible, so the NPV of the settlement payments on an after-tax basis is in the $4.0-4.5B range.

• 3M hopes to recover as much as $1.5B of the settlement amount from liability insurance. Any recovery from insurance will reduce the settlement NPV; in the best-case scenario, the after-tax NPV of the settlement would be approximately $3B.

[DewDiligence]

I expected a somewhat bigger bounce today, but I suppose that will come when the settlement deal is inked.

[KingOfSwing...Trading]

Great news for us!

[DewDiligence]

3M close_to_inking $5.5B earplug settlement, according_to_sources:

https://www.wsj.com/business/3m-nears-settlement-for-about-5-5-billion-to-resolve-earplugs-complaints-94e9f31e

3M and plaintiffs attorneys are nearing a settlement that would resolve hundreds of thousands of claims by veterans that earplugs made by the company and a subsidiary failed to protect them from hearing loss. Under the terms being discussed, 3M would pay about $5.5 billion, people close to the discussions said.

…The earplug litigation has become the largest mass tort in U.S. history, with more than 300,000 claims. Veterans allege that 3M and Aearo Technologies, a company 3M acquired in 2008, produced faulty earplugs that failed to protect their hearing from noise damage when issued to them by the U.S. military. 3M is contesting the cases, and has said the earplugs work correctly when used with proper training.

The settlement amount being considered is substantially less than the $10 billion to $15 billion that some analysts have predicted the case would cost 3M. The possible settlement was earlier reported by Bloomberg News.

This is hugely bullish for 3M if it pans out.

[DewDiligence]

ZBH CEO will become CEO of 3M’s healthcare spinoff:

https://finance.yahoo.com/news/bryan-hanson-named-ceo-3ms-122300047.html

https://finance.yahoo.com/news/zimmer-biomet-announces-leadership-transition-122000860.html

[DewDiligence]

Correction—3M’s healthcare spinoff is now slated for late 2023 or early 2024.

[DewDiligence]

3M reports 2Q23 results—raises non-GAAP EPS guidance slightly…

PR:
https://investors.3m.com/news-events/press-releases/detail/1790/3m-reports-second-quarter-2023-results-proactive

CC slides:
https://d1io3yog0oux5.cloudfront.net/_42242654f7d5954ba2f4fd7c7044914f/3m/db/3222/30683/presentation/Q2+2023+Earnings+Presentation.pdf


2Q23 non-GAAP EPS was $2.17, down from $2.45 in 2Q22; however, 2Q23 cash flow from operations was +34% YoY due, in large part, to cost-cutting initiatives (#msg-171766597), which raised operating margins by 140 basis points YoY.

2Q23 sales of $8.33B were -4% YoY, but exceeded consensus expectations.

3M raised 2023 non-GAAP EPS guidance (which excludes the $10.3B+ PFAS settlement announced in June [#msg-172192818]) to $8.60-9.10 (up $0.10 from the prior range of $8.50-$9.00).

3M’s healthcare spin-off remains on track for closing in 2023.

[DewDiligence]

3M settles PFAS litigation_vs_US_municipalities_for $10.3B NPV— payable_over_13 years—(2024-2036):

https://www.sec.gov/ix?doc=/Archives/edgar/data/0000066740/000006674023000048/mmm-20230622.htm

The actual cumulative dollar amount to be paid (not discounted for NPV purposes) will be $10.5-12.5B.

[bar1080]

"3M Can’t Resolve Mass Lawsuits Through Earplug Unit’s Bankruptcy, Judge Rules"

"Bankruptcy judge throws out 3M’s plan to use chapter 11 to resolve mass litigation alleging its combat earplugs harmed U.S. military service members"

https://www.wsj.com/articles/judge-throws-out-3m-earplug-units-bankruptcy-b486926f

[Solarman]

$MMMW Mass Megawatts announced today about a new product. Based on my publicly available conversation , the company seems to be interested in 3M film which means that 3M might be in an important role to cheaper renewable energy and top corporate management may not know about it ( at least until maybe somebody tells them like perhaps someone in the sales department). Hopefully, they will know and maybe give a special effort to move the process in way that we cannot imagine).

[Kswies]

I'm interested! Let's hear it!

[DewDiligence]

3M is giving back some of Friday’s 8% gain because the settlement reported by Bloomberg is apparently not yet a fait accompli:

https://www.wsj.com/articles/trial-in-litigation-over-forever-chemicals-delayed-for-settlement-talks-2cfd56da

[KingOfSwing...Trading]

I am very interested

[DewDiligence]

Please elaborate. TIA

[Solarman]

Solar energy. They contribute with a good part for newer solar technology. If you are interested, please let me know.

[DewDiligence]

Which application are you referring to?

[Solarman]

3M has great technology for application not yet marketed.

[grcramvaidhya]

This stock MMM formed excellent technical GAP up with good volume. May go up easily higher in coming days. My short term projection is about 114 $

[DewDiligence]

3M reaches—(tentative)—$10B+ PFAS settlement with US municipalities, according_to_Bloomberg:

https://www.bloomberg.com/news/articles/2023-06-02/3m-said-to-be-in-at-least-10-billion-pfas-pollution-settlement-lieqkmut

[Lowjack]

Earplugs don't cause hearing loss! Strong pressure waves do!

[DewDiligence]

3M earplug-litigation update:

https://finance.yahoo.com/news/3m-ceo-must-attend-mediation-215026124.html

A federal judge has ordered 3M CEO, Michael Roman to attend mediation aimed at resolving nearly 260,000 lawsuits alleging that 3M military earplugs caused hearing loss, saying the negotiations have reached a "critical juncture."

The judge’s phrase, “critical juncture” suggests that a settlement of the earplug multi-district litigation may be near. On the other hand, I can’t see why 3M would accept unfavorable settlement terms while they still have a chance to prevail in the Aearo bankruptcy approach. Stay tuned.

[Futurecash]

Ex dividend in two days.

[DewDiligence]

3M files Michael Vale for undisclosed personal conduct:

https://finance.yahoo.com/news/3m-announces-departure-michael-vale-120000437.html

Vale was recently promoted as part of 3M’s restructuring (#msg-171767169).

[Futurecash]

Glory days are over.

[Futurecash]

New management level, 6000 have to go.

[Futurecash]

Next stop $97 ……Bottem $85

[DewDiligence]

3M 1Q23 CC transcript:

https://finance.yahoo.com/news/q1-2023-3m-co-earnings-044954858.html

[DewDiligence]

3M changes in senior management pertaining to the corporate restructuring announced today:

https://investors.3m.com/news/news-details/2023/3M-Announces-Senior-Management-Team-Changes/default.aspx

[DewDiligence]

3M 1Q23 results and restructuring announcement…

PR:
https://investors.3m.com/news/news-details/2023/3M-Reports-First-Quarter-2023-Results-Company-Announces-Restructuring-Actions/default.aspx

CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2023/q1/1Q-2023-Earnings-Presentation.pdf


Full-year 2023 guidance (#msg-171018740) remains unchanged. New guidance for 2Q23 is shown on slide #13.

3M’s healthcare spin-off remains on track for closing in 2023.

[DewDiligence]

What does JNJ’s talc settlement mean for 3M?

a) Good news for 3M
b) Bad news for 3M
c) Neutral for 3M

Comments?

[DewDiligence]

JNJ’s (partial) talc settlement:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171617699

[DewDiligence]

JNJ’s talc litigation heads to US Supreme Court:

https://www.wsj.com/articles/j-j-fails-to-win-appellate-rehearing-of-talc-units-bankruptcy-dismissal-a23374be

Johnson & Johnson will seek the Supreme Court’s review after a federal appeals court declined to revive the company’s bid to use chapter 11 bankruptcy to freeze nearly 40,000 lawsuits linking its talc products to cancer.

This case has ramifications for 3M’s earplug litigation, although the two scenarios have material differences (#msg-171072884).

[Kswies]

This analysis does not account for other causes of hearing loss that may have impacted the small percentage of servicemembers with hearing loss, including medical conditions unrelated to noise exposure, non-military noise exposure, hearing loss that predates a service member's use of Combat Arms earplugs, and injuries suffered while not wearing Combat Arms earplugs.

This has been my thoughts on this since the beginning. Hearing loss happens with age, there will be many with their hands out whos hearing loss is not related to this. $MMM long

[DewDiligence]

3M’s Aearo subsidiary is submitting a motion to the bankruptcy court to include the data in #msg-171328905 in the ongoing litigation. (Source: Today’s 3M webcast at the JPM conference.)

[Futurecash]

Historic day. $97 incoming.

[DewDiligence]

What are you saying, exactly?

[Futurecash]

Lol. Lawyers talk for the next 4 - 5 years.

[Kswies]

Hear Hear!!! no pun intended LOL. The more I age the more I see hearing loss is a normal part of the aging process for many people. I believe that there will be a lot of people with normal age, genetic, or some other environmental variable that is root cause for hearing loss with their hands out. $MMM long

[bar1080]

Yep, I learned a lot from that video, too. Then you have to exclude normal hearing loss that most people experience with age. It would be wrong to cut every plaintiff a fat check for minor, normal hearing loss at, say, age 80.

[DewDiligence]

I thought the question in your original post of that video was rhetorical, but I now see that faking hearing loss can't be done. Thanks for posting the video!

[bar1080]

"How to FAKE Hearing Loss During A Hearing Test." This convincing video says you can't do it.

[DewDiligence]

3M says 85-90% of earplug plaintiffs have_no hearing loss:

https://investors.3m.com/news/news-details/2023/Department-of-Defense-Data-Reveals-No-Hearing-Loss-Among-Vast-Majority-of-Plaintiffs-in-Combat-Arms-Earplug-Litigation/default.aspx

[DewDiligence]

…the next business cycle, that is beginning right now, will be great for $MMM.

Yes, provided that 3M can prevail in the court system and thereby limit the Aearo earplug liabilities (#msg-170191027). I’m long.

[Kswies]

"I've held MMM for years" Sorry to hear about your loss. My opinion is that we are good to go from here. Didn't know you were a spelling teacher, thanks for the correction $MMM long and strong!

[bar1080]

I'm not sure what all that was about, but Buffett (note correct spelling) has long recommended S&P 500 index funds. Berkshire Hathaway currently owns two of them, VOO and SPY.

I've held MMM for years and Index funds for much longer.