Delaware
(State of Incorporation) |
95-1492269
(I.R.S. Employer Identification No.) |
|
150 North Orange Grove Boulevard
Pasadena, California (Address of Principal Executive Offices) |
91103
(Zip Code) |
Title of Each Class | Name of each exchange on which registered | |
Common stock, $1 par value | New York Stock Exchange | |
Preferred Share Purchase Rights | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Document | Incorporated by reference into: | |
Portions of Annual Report to Shareholders for fiscal year ended
January 1, 2011
|
Parts I, II | |
Portions of Definitive Proxy Statement for Annual Meeting of
Stockholders to be held April 28, 2011
|
Parts III, IV |
Page | ||||||||
PART I
|
||||||||
Item 1.
|
Business | 1 | ||||||
Item 1A.
|
Risk Factors | 5 | ||||||
Item 1B.
|
Unresolved Staff Comments | 12 | ||||||
Item 2.
|
Properties | 12 | ||||||
Item 3.
|
Legal Proceedings | 13 | ||||||
Item 4.
|
(Removed and Reserved) | 14 | ||||||
PART II | ||||||||
Item 5.
|
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 15 | ||||||
Item 6.
|
Selected Financial Data | 15 | ||||||
Item 7.
|
Managements Discussion and Analysis of Results of Operations and Financial Condition | 15 | ||||||
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk | 15 | ||||||
Item 8.
|
Financial Statements and Supplementary Data | 15 | ||||||
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 16 | ||||||
Item 9A.
|
Controls and Procedures | 16 | ||||||
Item 9B.
|
Other Information | 16 | ||||||
PART III | ||||||||
Item 10.
|
Directors, Executive Officers and Corporate Governance | 17 | ||||||
Item 11.
|
Executive Compensation | 19 | ||||||
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 19 | ||||||
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence | 19 | ||||||
Item 14.
|
Principal Accountant Fees and Services | 19 | ||||||
PART IV | ||||||||
Item 15.
|
Exhibits and Financial Statement Schedules | 20 | ||||||
Signatures
|
21 |
Item 1.
BUSINESS.
Pressure-sensitive Materials;
Retail Information Services; and
Office and Consumer Products.
1
2
3
4
Item 1A.
RISK
FACTORS.
5
6
7
8
9
10
11
Item 1B.
UNRESOLVED
STAFF COMMENTS.
Item 2.
PROPERTIES.
Peachtree City, Georgia; Fort Wayne, Greenfield and Lowell,
Indiana; Fairport Harbor, Mentor and Painesville, Ohio; and
Quakertown, Pennsylvania
Vinhedo, Brazil; Kunshan, China; Champ-sur-Drac, France; Gotha
and Schwelm, Germany; Rodange, Luxembourg; Alphen and
Hazerswoude, the Netherlands; Pune, India; and Cramlington,
United Kingdom
Greensboro and Lenoir, North Carolina; Miamisburg, Ohio
Kunshan, Nansha, Panyu, Shenzen, and Suzhou, China; Loehne and
Sprockhovel, Germany; Ancarano, Italy; and Taichung, Taiwan
Chicopee, Massachusetts; and Meridian, Mississippi
Oberlaindern, Germany; and Juarez and Tijuana, Mexico
12
Schererville, Indiana; Painesville, Ohio; and Clinton, South
Carolina
Turnhout, Belgium; and Kunshan, China
Item 3.
LEGAL
PROCEEDINGS.
13
Item 4.
(REMOVED
AND RESERVED).
14
Item 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
Maximum Number
Total Number of Shares
of Shares
Total Number
Average Price
Purchased as
that may yet
of Shares
Paid per
Part of Publicly
be Purchased Under
Purchased
Share
Announced Plans
the Plans
(Shares in thousands, except per share amounts)
$
433.9
$
37.77
433.9
2,249.3
$
41.03
2,249.3
2,683.2
$
40.50
2,683.2
1,269.7
(1)
(1)
Shares do not include the impact of .3 million repurchased
shares that settled in January 2011 and 5 million
additional shares that were authorized for repurchase in January
2011.
Item 6.
SELECTED
FINANCIAL DATA.
Item 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION AND FINANCIAL
CONDITION.
Item 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Item 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.
15
Item 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Item 9A.
CONTROLS
AND PROCEDURES.
Item 9B.
OTHER
INFORMATION.
16
Item 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
17
Served as
Executive Officer
Former Positions and Offices
Name
Age
since
with Avery Dennison
55
August 1997
2005-2010
President and Chief Executive Officer
2000-2005
President and Chief Operating Officer
39
March 2007
2007-2010
Vice President, Controller and Chief
Accounting Officer
2004-2006
Vice President, Finance, Retail Information Services
50
June 2010
2008-2010
Vice President, Controller
and Chief Accounting Officer
2005-2008
2004-2005
Consultant, Palomar Consulting
Group
(3)
Chief Financial Officer, Acetex
Corporation
(3)
59
December 1985
1997-2000
Vice President, Worldwide
Communications and Advertising
51
May 2007
2004-2006
Vice President,
Global Human Resources,
Chiron
Corporation
(3)
53
August 2000
2000-2001
Senior Vice President,
Corporate Strategy
51
March 2008
2008-2009
Senior Vice President and General Counsel
2007-2008
Vice President and General Counsel
1998-2006
Assistant General Counsel
51
June 2001
1999-2001
Assistant Treasurer, Corporate Finance
and Investments
53
March 2008
2007-2008
Vice President and General Manager,
Office Products Group
2003-2006
Vice President and General Manager, Office Products North America
48
February 2001
2001-2007
Group Vice President, Office Products
48
June 2009
2008-2009
Chief Executive Officer,
Boathouse
Sports
(3)
2004-2008
President, Keds Division, Collective Brands,
Inc.
(3)
50
March 2008
2005-2007
Senior Vice President, Global Packaging
and Automotive Coatings,
Valspar
Corporation
(3)
54
March 2009
2008-2009
Senior Vice President, Strategy,
Staples,
Inc.
(3)
2004-2007
Chief Executive Officer, Manifold
Products
(3)
(1)
All officers are elected to serve a one-year term and until
their successors are elected and qualify.
(2)
Mr. Scarborough was initially elected Chairman, President
and Chief Executive Officer effective April 22, 2010.
(3)
Business experience during past five years prior to service with
the Company.
18
Item 11.
EXECUTIVE
COMPENSATION.
Item 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
Item 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
Item 14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES.
19
Item 15.
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES.
20
By
Signature
Title
Date
Chairman, President and Chief Executive Officer
February 25, 2011
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
February 25, 2011
Vice President and Controller, and
Chief Accounting Officer
(Principal Accounting Officer)
February 25, 2011
Director
February 25, 2011
Director
February 25, 2011
Director
February 25, 2011
Director
February 25, 2011
Director
February 25, 2011
Director
February 25, 2011
Director
February 25, 2011
21
Signature
Title
Date
Director
February 25, 2011
Director
February 25, 2011
Director
February 25, 2011
22
S-2
S-3
S-4
S-1
ON FINANCIAL STATEMENT SCHEDULE
S-2
Additions | ||||||||||||||||||||
Balance at
|
Charged to
|
Balance
|
||||||||||||||||||
Beginning
|
Costs and
|
From
|
Deductions
|
at End
|
||||||||||||||||
of Year | Expenses | Acquisitions | From Reserves (a) | of Year | ||||||||||||||||
2010
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 41.3 | $ | 6.7 | $ | | $ | (9.1 | ) | $ | 38.9 | |||||||||
Allowance for sales returns
|
14.9 | 9.6 | | (12.0 | ) | 12.5 | ||||||||||||||
Inventory reserve
|
65.4 | 17.5 | | (23.7 | ) | 59.2 | ||||||||||||||
Valuation allowance for deferred tax assets
|
115.4 | 2.5 | | (2.3 | ) | 115.6 | ||||||||||||||
2009
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 41.8 | $ | 11.5 | $ | .4 | $ | (12.4 | ) | $ | 41.3 | |||||||||
Allowance for sales returns
|
15.5 | 7.8 | .3 | (8.7 | ) | 14.9 | ||||||||||||||
Inventory reserve
|
64.6 | 23.1 | 2.3 | (24.6 | ) | 65.4 | ||||||||||||||
Valuation allowance for deferred tax assets
|
109.2 | 4.0 | | 2.2 | 115.4 | |||||||||||||||
2008
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 45.8 | $ | 10.1 | $ | .4 | $ | (14.5 | ) | $ | 41.8 | |||||||||
Allowance for sales returns
|
18.4 | 7.6 | 1.3 | (11.8 | ) | 15.5 | ||||||||||||||
Inventory reserve
|
77.3 | 21.2 | 4.0 | (37.9 | ) | 64.6 | ||||||||||||||
Valuation allowance for deferred tax assets
|
147.6 | (45.3 | ) | 9.6 | (2.7 | ) | 109.2 |
(a) | Deductions from reserves include currency translation adjustments. |
S-3
ii
iii
iv
v
S-4
Originally
Exhibit
Filed as
No.
Item
Exhibit No.
Document
(1)
(3
.1)
Restated Certificate of Incorporation, as filed August 2, 2002
with the Office of Delaware Secretary of State
3
(i)
Third Quarterly Report for 2002 on Form 10-Q, filed November 12,
2002
(3
.1.1)
Certificate of Amendment to Restated Certificate of
Incorporation, as filed April 23, 2010 with the Office of
Delaware Secretary of State
3
.1.1
Current Report on Form 8-K, filed April 27, 2010.
(3
.2)
By-laws, as amended and restated on April 22, 2010
3
.2.1
Current Report on Form 8-K, filed April 27, 2010.
(4
.2)
Indenture, dated as of March 15, 1991, between Registrant and
Security Pacific National Bank, as Trustee (the
Indenture)
Registration Statement on Form S-3 (File No. 33-39491), filed
March 19, 1991
(4
.2.2)
First Supplemental Indenture, dated as of March 16, 1993,
between Registrant and BankAmerica National Trust Company, as
successor Trustee (the Supplemental Indenture)
4
.4
Registration Statement on Form S-3 (File No. 33-59642), filed
March 17, 1993
(4
.2.5)
Officers Certificate establishing a series of Securities
entitled Medium-Term Notes, Series C under the
Indenture, as amended by the Supplemental Indenture
4
.7
Current Report on Form 8-K, filed May 12, 1995
(4
.2.6)
Officers Certificate establishing a series of Securities
entitled Medium-Term Notes, Series D under the
Indenture, as amended by the Supplemental Indenture
4
.8
Current Report on Form 8-K, filed December 16, 1996
(4
.3)
Indenture, dated July 3, 2001, between Registrant and
J.P. Morgan Trust Company, National Association (successor
to Chase Manhattan Bank and Trust Company, National
Association), as trustee (2001 Indenture)
4
.1
Registration Statement on Form S-3 (File No. 333-64558), filed
July 3, 2001
(4
.3.1)
Officers Certificate establishing two series of Securities
entitled 4.875% Notes due 2013 and
6.000% Notes due 2033, respectively, each under
the 2001 Indenture
4
.2
Current Report on Form 8-K, filed January 16, 2003
(4
.3.2)
4.875% Notes Due 2013
4
.3
Current Report on Form 8-K, filed January 16, 2003
(4
.3.3)
6.000% Notes Due 2033
4
.4
Current Report on Form 8-K, filed January 16, 2003
i
Originally
Exhibit
Filed as
No.
Item
Exhibit No.
Document
(1)
(4
.5)
Indenture, dated as of September 25, 2007, between Registrant
and The Bank of New York Trust Company, N.A. (Bank of
NY)
99
.1
Current Report on Form 8-K, filed October 1, 2007
(4
.5.1)
6.625% Subsidiary Notes due 2017
99
.1
Current Report on Form 8-K, filed October 1, 2007
(4
.6)
Indenture, dated as of November 20, 2007, between Registrant and
Bank of NY
4
.3
Current Report on Form 8-K, filed November 20, 2008
(4
.7)
Purchase Contract and Pledge Agreement, dated as of November 20,
2007, between Avery Dennison and Bank of NY, as Purchase
Contract Agent, and Bank of NY as Collateral Agent, Custodial
Agent and Securities Intermediary
4
.1
Current Report on Form 8-K, filed November 20, 2007
(4
.8)
Indenture, dated as of November 20, 2007, between Avery Dennison
and Bank of NY
4
.2
Current Report on Form 8-K, filed November 20, 2007
(4
.9)
First Supplemental Indenture between Avery Dennison and Bank of
NY, as Trustee, dated as of November 20, 2007
4
.3
Current Report on Form 8-K, filed November 20, 2007
(4
.10)
Form of Remarketing Agreement
4
.4
Current Report on Form 8-K, filed November 20, 2007
(4
.11)
Form of Corporate HiMEDS Unit Certificate
4
.5
Current Report on Form 8-K, filed November 20, 2007
(4
.12)
Form of Treasury HiMEDS Unit Certificate
4
.6
Current Report on Form 8-K, filed November 20, 2007
(4
.13)
Form of 5.350% Senior Notes due 2020
4
.7
Current Report on Form 8-K, filed November 20, 2007
(4
.14)
Second Supplemental Indenture between Avery Dennison and The
Bank of NYTrust Company, as Trustee, dated as of April 13, 2010
4
.2
Current Report on Form 8-K, filed April 13, 2010
(4
.15)
Form of 5.375% Senior Notes due 2020
4
.3
Current Report on Form 8-K, filed April 13, 2010
(4
.16)
Remarketing Agreement between Avery Dennison and the Remarketing
Agent named therein, dated as of September 27, 2010
1
.1
Current Report on Form 8-K, filed November 15, 2010
(10
.1)
Avery Dennison Office Products Company (ADOPC)
Credit Agreement, amended and restated, dated August 7, 2008
10
.2
Second Quarterly Report for 2008 on Form 10-Q, filed August 7,
2008
(10
.1.1)
ADOPC Second Amendment to Credit Agreement
99
.3
Current Report on Form 8-K, filed January 27, 2009
(10
.2)
Revolving Credit Agreement (RCA), amended and
restated, August 10, 2007
10
.2.2
Third Quarterly Report for 2007 on Form 10-Q, filed November 7,
2007
Originally
Exhibit
Filed as
No.
Item
Exhibit No.
Document
(1)
(10
.2.1)
Second Amendment to First Amended and Restated RCA
99
.4
Current Report on Form 8-K, filed January 27, 2009
(10
.3)
*Deferred Compensation Plan for Directors
10
.3
1981 Annual Report on Form 10-K, filed February 29, 1982
(10
.4)
*Non-Employee Director Compensation Summary
10
.4
2006 Annual Report on Form 10-K, filed February 28, 2007
(10
.5)
*Executive Medical and Dental Plan (description)
10
.5
1981 Annual Report on Form 10-K, filed February 29, 1982
(10
.8)
*Employment Agreement with D.A .Scarborough
10
.8.5
First Quarterly Report for 2005 on Form 10-Q, filed May 12, 2005
(10
.8.3)
*Form of Employment Agreement
10
.8.4
First Quarterly Report for 2004 on Form 10-Q, filed May 6, 2004
(10
.8.3.1)
*Forms of Employment Agreement
10
.8.3.1
Current Report on Form 8-K, filed December 11, 2008
(10
.8.3.2)
*Forms of Amendment to Employment Agreement
10
.8.3.2
Current Report on Form 8-K, filed December 11, 2008
(10
.8.3.2a)
*Form of Amendment to Employment Agreement
10
.8.3.2
Second Quarterly Report for 2009 on Form 10-Q, filed August 12,
2009
(10
.8.3.3)
*Form of Second Amendment to Employment Agreement
10
.8.3.3
Second Quarterly Report for 2009 on Form 10-Q, filed August 12,
2009
(10
.8.4)
*Retention Agreement with D.R. OBryant
10
.8.6
First Quarterly Report for 2005 on Form 10-Q, filed May 12, 2005
(10
.8.4.1)
*Amendment to Retention Agreement
10
.8.4.1
Second Quarterly Report for 2009 on Form 10-Q, filed August 12,
2009
(10
.9)
*Executive Group Life Insurance Plan
10
.9
1982 Annual Report on Form 10-K, filed February 25, 1983
(10
.10)
*Form of Indemnity Agreement between Registrant and certain
directors and Officers
10
.10
1986 Annual Report on Form 10-K, filed February 27, 1987
(10
.10.1)
*Form of Indemnity Agreement between Registrant and certain
directors and Officers
10
.10.1
1993 Annual Report on Form 10-K, filed March 18, 1994
(10
.11)
*Supplemental Executive Retirement Plan, amended and restated
(SERP)
10
.11.1
Second Quarterly Report for 2009 on Form 10-Q, filed August 12,
2009
(10
.11.2)
*Letter of Grant to D.A. Scarborough under SERP
10
.11.2.1
Second Quarterly Report for 2009 on Form 10-Q, filed August 12,
2009
(10
.11.2.1)
*Letter Agreement with D.A. Scarborough regarding SERP benefits
10
.11.2.1
Current Report on Form 8-K, filed December 15, 2010
(10
.11.4)
*Letter of Grant to D.R. OBryant under SERP
10
.11.4.1
Second Quarterly Report for 2009 on Form 10-Q, filed August 12,
2009
(10
.11.4.1)
*Letter Agreement with D.R. OBryant regarding SERP benefits
10
.11.4.1
Current Report on Form 8-K, filed December 15, 2010
(10
.12)
*Complete Restatement and Amendment of Executive Deferred
Compensation Plan
10
.12
1994 Annual Report on Form 10-K, filed March 30, 1995
(10
.13)
*Retirement Plan for Directors, amended and restated
10
.13.1
2002 Annual Report on Form 10-K, filed March 28, 2003
Originally
Exhibit
Filed as
No.
Item
Exhibit No.
Document
(1)
(10
.15)
*Director Equity Plan, amended and restated (Director
Plan)
10
.15.1
Current Report on Form 8-K, filed December 11, 2008
(10
.15.1)
*Form of Non-Employee Director Stock Option Agreement under
Director Plan
10
.15.1
2003 Annual Report on Form 10-K, filed March 11, 2004
(10
.16)
*Complete Restatement and Amendment of Executive Variable
Deferred Compensation Plan (EVDCP)
10
.16
1994 Annual Report on Form 10-K, filed March 30, 1995
(10
.16.1)
*Amendment No. 1 to EVDCP
10
.16.1
1999 Annual Report on Form 10-K, filed March 30, 2000
(10
.17)
*Complete Restatement and Amendment of Directors Deferred
Compensation Plan
10
.17
1994 Annual Report on Form 10-K, filed March 30, 1995
(10
.18)
*Complete Restatement and Amendment of Directors Variable
Deferred Compensation Plan (DVDCP)
10
.18
1994 Annual Report on Form 10-K, filed March 30, 1995
(10
.18.1)
*Amendment No. 1 to DVDCP
10
.18.1
1999 Annual Report on Form 10-K, filed March 30, 2000
(10
.18.2)
*2005 Directors Variable Deferred Compensation Plan,
amended and restated (2005 DVDCP)
10
.18.2
First Quarterly Report for 2010 on Form 10-Q, filed May 12, 2010
(10
.19)
*Stock Option and Incentive Plan, amended and restated
(Stock Plan)
10
.19.8
Current Report on Form 8-K, filed December 11, 2008
(10
.19.1)
*Forms of NQSO Agreement under Stock Plan
10
.19.5
2007 Annual Report on Form 10-K, filed February 27, 2008
(10
.19.2)
*Forms of Restricted Stock Agreement under Stock Plan
10
.19.8
First Quarterly Report for 2005 on Form 10-Q, filed May 12, 2005
(10
.19.3)
*Forms of Restricted Stock Unit Agreement under Stock Plan
10
.19.2
Current Report on Form 8-K, filed December 13, 2006
(10
.19.4)
*Forms of Equity Awards under Stock Plan
10
.19.6
Current Report on Form 8-K, filed April 30, 2008
(10
.19.5)
*Forms of Equity Awards under Stock Plan
10
.19.6
Second Quarterly Report for 2008 on Form 10-Q, filed May 8, 2008
(10
.19.6)
*Forms of Equity Agreements under Stock Plan
10
.19.9
Current Report on Form 8-K, filed December 11, 2008
(10
.19.7)
*Additional Forms of Equity Agreements under Stock Plan
10
.19.10
Current Report on Form 8-K/A, filed December 11, 2008
(10
.19.8)
*Form of Performance Unit Agreement
10
.19.8
2008 Annual Report on Form 10-K, filed February 25, 2009
(10
.27)
*Executive Long-Term Incentive Plan, amended and restated
(LTIP)
10
.27.1
2003 Annual Report on Form 10-K, filed March 11, 2004
(10
.28)
*Complete Restatement and Amendment of Executive Deferred
Retirement Plan (EDRP)
10
.28
1994 Annual Report on Form 10-K, filed March 30, 1995
(10
.28.1)
*Amendment No. 1 to EDRP
10
.28.1
1999 Annual Report on Form 10-K, filed March 30, 2000
Originally
Exhibit
Filed as
No.
Item
Exhibit No.
Document
(1)
(10
.28.2)
*Amendment No. 2 to EDRP
10
.28.2
2001 Annual Report on Form 10-K, filed March 4, 2002
(10
.29)
*Executive Leadership Compensation Plan, (ELCP)
10
.29.1
2004 Annual Report on Form 10-K, filed March 17, 2005
(10
.30)
*Senior Executive Leadership Compensation Plan, amended and
restated (SELCP)
10
.30.2
2003 Annual Report on Form 10-K, filed March 11, 2004
(10
.31)
*Executive Variable Deferred Retirement Plan, amended and
restated (EVDRP)
10
.31.5
2003 Annual Report on Form 10-K, filed March 11, 2004
(10
.31.1)
*2004 EVDRP
4
.1
Registration Statement on Form S-8 (File No. 333-109814), filed
October 20, 2003
(10
.31.2)
*2005 EVDRP, amended and restated
10
.31.2
First Quarterly Report for 2010 on Form 10-Q, filed May 12, 2010
(10
.32)
*Benefits Restoration Plan, amended and restated
(BRP)
10
.32.1
Current Report on Form 8-K/A, filed December 11, 2008
(10
.33)
*Restated Trust Agreement for Employee Stock Benefit Trust
10
.33.1
1997 Annual Report on Form 10-K, filed March 26, 1998
(10
.33.1)
*Common Stock Purchase Agreement
10
.2
Current Report on Form 8-K, filed October 25, 1996
(10
.33.2)
*Restated Promissory Note
10
.33.3
1997 Annual Report on Form 10-K, filed March 26, 1998
(10
.34)
*Amended and Restated Capital Accumulation Plan (CAP)
10
.34
1999 Annual Report on Form 10-K, filed March 30, 2000
(10
.34.1)
*Trust under CAP
4
.2
Registration Statement on Form S-8 (File No. 333-38707), filed
October 24, 1997
(10
.34.2)
*Amendment No. 1 to CAP
10
.34.2
1999 Annual Report on Form 10-K, filed March 30, 2000
(10
.35)
*Key Executive Change of Control Severance Plan
10
.35
Current Report on Form 8-K, filed December 9, 2009
(10
.36)
*Executive Severance Plan
10
.36
Current Report on Form 8-K, filed December 9, 2009
(23
.1)
Consent of Ernst & Young
23
.1
Current Report on Form 8-K/A, filed August 29, 2007
(23
.2)
Consent of Ernst & Young
23
.3
Registration Statement on Form S-3 (File No. 333-147369), filed
November 14, 2007
(99
.2)
Stock Ownership Policy for Officers and Directors
C
2010 Proxy Statement on Schedule 14A, filed March 19, 2010
(1)
Unless otherwise noted, the File
Number for all documents is File
No. 1-7685.
*
Management contract or compensatory
plan or arrangement required to be filed as an Exhibit to this
Form 10-K
pursuant to Item 15.
Exhibit No.
Item
3
.1
Restated Certification of Incorporation, as filed August 2, 2002
with the Office of Delaware Secretary of State, is incorporated
by reference to the Third Quarterly Report for 2002 on
Form 10-Q,
filed November 12, 2002
3
.1.1
Certificate of Amendment to Restated Certificate of
Incorporation, as filed April 23, 2010 with the Office of
Delaware Secretary of State, is incorporated by reference to the
Current Report on
Form 8-K,
filed April 27, 2010
3
.2
By-laws, as amended and restated, is incorporated by reference
to the Current Report on Form 8-K, filed April 27, 2010
10
.1
Avery Dennison Office Products Company (ADOPC)
Credit Agreement, amended and restated, is incorporated by
reference to the Second Quarterly Report for 2008 on Form 10-Q,
filed August 7, 2008
10
.1.1
ADOPC Second Amendment to Credit Agreement is incorporated by
reference to the current report on Form 8-K, filed January 27,
2009
10
.2
Revolving Credit Agreement (RCA), amended and
restated, is incorporated by reference to the Third Quarterly
Report for 2007 on Form 10-Q, filed November 7, 2007
10
.2.1
Second Amendment to First Amended and Restated RCA is
incorporated by reference to the current report on Form 8-K,
filed January 27, 2009
10
.32.1
*First Amendment to Benefit Restoration Plan
12
Computation of Ratio of Earnings to Fixed Changes
13
Portions of Annual Report to Shareholders for fiscal year ended
January 1, 2011
21
List of Subsidiaries
23
Consent of Independent Registered Public Accounting Firm (see
page S-4)
24
Power of Attorney
31
.1
Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
31
.2
Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
32
.1
Certification of Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
32
.2
Certification of Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
101INS
**XBRL Instance Document
101SCH
**XBRL Extension Schema Document
101CAL
**XBRL Extension Calculation Linkbase Document
101LAB
**XBRL Extension Label Linkbase Document
101PRE
**XBRL Extension Presentation Linkbase Document
*
Management contract or compensatory plan or arrangement required
to be filed as an Exhibit to this
Form 10-K
pursuant to Item 15.
**
Pursuant to Rule 406T of
Regulation S-T,
the XBRL related information in Exhibit 101 to this Annual
Report on
Form 10-K
shall not be deemed to be filed for purposes of
Section 18 of the Exchange Act, or otherwise subject to the
liability of that section, and shall not be deemed part of a
registration statement, prospectus or other document filed under
the Securities Act or the Exchange Act, except as may be
expressly set forth by specific reference in such filings.
LONG-TERM DEBT OF REGISTRANT
vi
1. | his Qualified Benefit (using the Formula Amount under Supplement B of the Associate Plan) and |
2
AVERY DENNISON CORPORATION | ||||||
|
||||||
|
By |
/s/ Dean A. Scarborough
|
||||
|
Chairman, President and Chief Executive Officer |
3
2010 | 2009 | 2008 | ||||||||||
Earnings:
|
||||||||||||
Income (loss) before taxes
|
$ | 351.3 | $ | (790.9 | ) | $ | 270.6 | |||||
Add: Fixed charges
(1)
|
115.2 | 124.5 | 158.9 | |||||||||
Amortization of capitalized interest
|
3.4 | 3.3 | 3.2 | |||||||||
Less: Capitalized interest
|
(3.9 | ) | (4.2 | ) | (6.2 | ) | ||||||
|
||||||||||||
|
$ | 466.0 | $ | (667.3 | ) | $ | 426.5 | |||||
|
||||||||||||
|
||||||||||||
Fixed charges:
(1)
|
||||||||||||
Interest expense
|
$ | 76.6 | $ | 85.3 | $ | 115.9 | ||||||
Capitalized interest
|
3.9 | 4.2 | 6.2 | |||||||||
Interest portion of leases
|
34.7 | 35.0 | 36.8 | |||||||||
|
||||||||||||
|
$ | 115.2 | $ | 124.5 | $ | 158.9 | ||||||
|
||||||||||||
|
||||||||||||
Ratio of Earnings to Fixed Charges
(2)
|
4.0 | | 2.7 | |||||||||
|
(1) | The ratios of earnings to fixed charges were computed by dividing earnings by fixed charges. For this purpose, earnings consist of income before taxes plus fixed charges and amortization of capitalized interest, less capitalized interest. Fixed charges consist of interest expense, capitalized interest and the portion of rent expense (estimated to be 35%) on operating leases deemed representative of interest. | |
(2) | For the year ended January 2, 2010, the Companys earnings were not sufficient to cover fixed charges by $791.8. The loss primarily reflected the non-cash goodwill and other indefinite-lived intangible asset impairment charges of $832 and loss on extinguishment of debt of approximately $21 recorded in the first quarter of 2009, and legal settlements of $41 recorded in 2009. |
Segment | Segment | Segment | ||||||
Pressure-sensitive Materials | Retail Information Services | Office and Consumer Products | Other specialty converting businesses | |||||
BUSINESSES
|
Roll Materials
Graphics and Reflective Products |
Information and Brand Management
Printer Systems Fastener |
Office Products |
Specialty Tape
Radio Frequency Identification (RFID) Industrial and Automotive Products Performance Films Business Media Security Printing Medical Products |
||||
SALES
(in millions) |
$3,640 | $1,522 | $815 | $536 | ||||
PERCENT OF TOTAL SALES
|
56% | 23% | 13% | 8% | ||||
GLOBAL BRANDS
|
Fasson
®
, Avery Graphics,
Avery Dennison ® |
Avery Dennison ® , Monarch ® | Avery ® | Avery Dennison ® | ||||
PRODUCTS
|
Pressure-sensitive roll materials, flexible packaging, roll-fed sleeve, water- and solvent-based performance polymer adhesives and engineered films, graphic imaging media, reflective materials | Graphic tags and labels, variable data tags and labels, woven and printed fabric labels, patches and specialty trim, packaging, radio frequency identification (RFID) tags, designer trim collections, printer systems, solution-enabling products such as fastening and application devices | Self-adhesive labels, binders, sheet protectors, dividers, online templates and printing, writing instruments, T-shirt transfers, do-it-yourself card products | Specialty tapes, skin-contact medical adhesives, surgical, wound care and ostomy products, industrial adhesives, automotive paint protection and exterior films, heat seal, security and information labels, functional packaging labels, architectural and engineered films, point-of-purchase and display tags, metallized pigments, self-adhesive postage stamps, RFID inlays and durable tags | ||||
MARKET SEGMENTS
|
Food, beverage, spirits, household products, pharmaceuticals, health and beauty, durables, fleet, vehicle/automotive, architectural/retail, promotional/advertising, traffic, safety, transportation original equipment manufacturing | Retail apparel, manufacturing apparel, mass market retailers, retail hard goods and supply chains, food service and supply chains, logistics, pharmaceuticals, automotive | Professional, personal and on-the-go organization and identification, education | Automotive, consumer, medical and healthcare, retail apparel, electronics, durable goods, architectural, graphic arts, general industrial, building and construction, logistics, retail point-of-purchase, security printing | ||||
CUSTOMERS
|
Global label converters, consumer product brands, package designers, packaging engineers and manufacturers, industrial manufacturers, printers, distributors, designers, advertising agencies, government agencies, sign manufacturers, graphic vendors | Apparel brands and retailers, apparel manufacturers, consumer goods manufacturers, restaurant and food service chains, grocery and drug store chains, automotive manufacturers | Office products superstores, major retailers, distributors, wholesalers, office professionals, school administrators, small business owners, consumers | Industrial and original equipment manufacturers, medical products and device manufacturers, clinicians and nurses, converters, packagers, consumer products companies | ||||
2010 | 2009 (1) | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except %
|
5-Year Compound
|
|||||||||||||||||||||||||||||||||||||||||||
and per share amounts) | Growth Rate | Dollars | % | Dollars | % | Dollars | % | Dollars | % | Dollars | % | |||||||||||||||||||||||||||||||||
For the Year
|
||||||||||||||||||||||||||||||||||||||||||||
Net sales
|
3.5 | % | $ | 6,512.7 | 100.0 | $ | 5,952.7 | 100.0 | $ | 6,710.4 | 100.0 | $ | 6,307.8 | 100.0 | $ | 5,575.9 | 100.0 | |||||||||||||||||||||||||||
Gross profit
|
4.3 | 1,826.0 | 28.0 | 1,586.5 | 26.7 | 1,727.0 | 25.7 | 1,722.4 | 27.3 | 1,538.0 | 27.6 | |||||||||||||||||||||||||||||||||
Marketing, general and administrative expense
|
6.8 | 1,370.4 | 21.0 | 1,268.8 | 21.3 | 1,304.3 | 19.4 | 1,182.5 | 18.7 | 1,011.1 | 18.1 | |||||||||||||||||||||||||||||||||
Goodwill and indefinite-lived intangible asset impairment charges
|
N/A | | | 832.0 | 14.0 | | | | | | | |||||||||||||||||||||||||||||||||
Interest expense
|
5.8 | 76.6 | 1.2 | 85.3 | 1.4 | 115.9 | 1.7 | 105.2 | 1.7 | 55.5 | 1.0 | |||||||||||||||||||||||||||||||||
Other expense,
net
(2)
|
(15.3 | ) | 27.7 | .4 | 191.3 | 3.2 | 36.2 | .5 | 59.4 | .9 | 36.2 | .6 | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before taxes
|
(.9 | ) | 351.3 | 5.4 | (790.9 | ) | (13.3 | ) | 270.6 | 4.0 | 375.3 | 5.9 | 435.2 | 7.8 | ||||||||||||||||||||||||||||||
Provision for (benefit from) income taxes
|
(14.5 | ) | 34.4 | .5 | (44.2 | ) | (.7 | ) | 4.5 | .1 | 71.8 | 1.1 | 76.7 | 1.4 | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations
|
1.6 | 316.9 | 4.9 | (746.7 | ) | (12.5 | ) | 266.1 | 4.0 | 303.5 | 4.8 | 358.5 | 6.4 | |||||||||||||||||||||||||||||||
Income from discontinued operations,
net of tax (3) |
N/A | | N/A | | N/A | | N/A | | N/A | 14.7 | N/A | |||||||||||||||||||||||||||||||||
Net income (loss)
|
6.9 | 316.9 | 4.9 | (746.7 | ) | (12.5 | ) | 266.1 | 4.0 | 303.5 | 4.8 | 373.2 | 6.7 | |||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||
Per Share Information
|
||||||||||||||||||||||||||||||||||||||||||||
Income (loss) per common share from continuing operations
|
.5 | % | $ | 3.00 | $ | (7.21 | ) | $ | 2.70 | $ | 3.09 | $ | 3.59 | |||||||||||||||||||||||||||||||
Income (loss) per common share from continuing operations,
assuming dilution
|
.4 | 2.97 | (7.21 | ) | 2.70 | 3.07 | 3.57 | |||||||||||||||||||||||||||||||||||||
Net income (loss) per common share
|
5.7 | 3.00 | (7.21 | ) | 2.70 | 3.09 | 3.74 | |||||||||||||||||||||||||||||||||||||
Net income (loss) per common share, assuming dilution
|
5.6 | 2.97 | (7.21 | ) | 2.70 | 3.07 | 3.72 | |||||||||||||||||||||||||||||||||||||
Dividends per common share
|
(12.2 | ) | .80 | 1.22 | 1.64 | 1.61 | 1.57 | |||||||||||||||||||||||||||||||||||||
Weighted-average common shares outstanding (in millions)
|
1.1 | 105.8 | 103.6 | 98.4 | 98.1 | 99.8 | ||||||||||||||||||||||||||||||||||||||
Weighted-average common shares outstanding, assuming dilution
(in millions)
|
1.2 | 106.8 | 103.6 | 98.7 | 98.9 | 100.4 | ||||||||||||||||||||||||||||||||||||||
Book value per share at fiscal year end
|
.5 | $ | 15.61 | $ | 12.94 | $ | 17.78 | $ | 20.22 | $ | 17.26 | |||||||||||||||||||||||||||||||||
Market price per share at fiscal year end
|
(5.2 | ) | 42.34 | 36.49 | 31.53 | 53.41 | 67.93 | |||||||||||||||||||||||||||||||||||||
Market price per share range
|
30.79 to | 17.26 to | 25.02 to | 49.69 to | 55.09 to | |||||||||||||||||||||||||||||||||||||||
42.49 | 40.02 | 53.14 | 69.67 | 69.11 | ||||||||||||||||||||||||||||||||||||||||
At End of Year
|
||||||||||||||||||||||||||||||||||||||||||||
Working capital (deficit)
|
$ | 120.1 | $ | (134.5 | ) | $ | (127.6 | ) | $ | (419.3 | ) | $ | (12.1 | ) | ||||||||||||||||||||||||||||||
Property, plant and equipment, net
|
1,262.9 | 1,354.7 | 1,493.0 | 1,591.4 | 1,309.4 | |||||||||||||||||||||||||||||||||||||||
Total assets
|
5,099.4 | 5,002.8 | 6,035.7 | 6,244.8 | 4,324.9 | |||||||||||||||||||||||||||||||||||||||
Long-term debt
|
956.2 | 1,088.7 | 1,544.8 | 1,145.0 | 501.6 | |||||||||||||||||||||||||||||||||||||||
Total debt
|
1,337.2 | 1,624.3 | 2,209.8 | 2,255.8 | 968.0 | |||||||||||||||||||||||||||||||||||||||
Shareholders equity
|
1,645.7 | 1,362.6 | 1,750.0 | 1,989.4 | 1,696.2 | |||||||||||||||||||||||||||||||||||||||
Number of employees
|
32,100 | 31,300 | 35,700 | 37,300 | 22,700 | |||||||||||||||||||||||||||||||||||||||
Other Information
|
||||||||||||||||||||||||||||||||||||||||||||
Depreciation
expense
(4)
|
$ | 172.9 | $ | 187.6 | $ | 204.6 | $ | 184.1 | $ | 153.8 | ||||||||||||||||||||||||||||||||||
Research and development
expense
(4)
|
95.6 | 90.7 | 94.0 | 95.5 | 87.9 | |||||||||||||||||||||||||||||||||||||||
Effective tax
rate
(4)
|
9.8 | % | 5.6 | % | 1.7 | % | 19.1 | % | 17.6 | % | ||||||||||||||||||||||||||||||||||
Return on average shareholders equity
|
21.6 | (55.7 | ) | 13.1 | 16.5 | 22.7 | ||||||||||||||||||||||||||||||||||||||
Return on average total capital
|
12.8 | (20.6 | ) | 8.8 | 10.6 | 15.7 | ||||||||||||||||||||||||||||||||||||||
(1) | Results for 2009 reflected a 53-week period. | |
(2) | Included pretax charges for restructuring costs, asset impairment charges, lease cancellation costs, and other items. | |
(3) | Results for 2006 included a tax benefit of $14.9 due to capital losses arising from the sale of discontinued operations and a pretax gain on the sale of discontinued operations of $1.3. | |
(4) | 2006 amounts are related to continuing operations. |
12/31/2005 | 12/31/2006 | 12/31/2007 | 12/31/2008 | 12/31/2009 | 12/31/2010 | |||||||||||||||||||
Avery Dennison Corporation
|
$ | 100.00 | $ | 126.08 | $ | 101.28 | $ | 64.83 | $ | 75.67 | $ | 89.82 | ||||||||||||
S&P 500 Index
|
$ | 100.00 | $ | 115.78 | $ | 122.14 | $ | 76.96 | $ | 97.33 | $ | 112.01 | ||||||||||||
Peer Group (Weighted
Average)
(2)
|
$ | 100.00 | $ | 121.42 | $ | 149.60 | $ | 89.70 | $ | 125.47 | $ | 180.25 | ||||||||||||
Peer Group (Median)
|
$ | 100.00 | $ | 114.44 | $ | 118.18 | $ | 78.01 | $ | 116.41 | $ | 143.64 | ||||||||||||
(1) | Assumes $100 invested on December 31, 2005, and the reinvestment of dividends; chart reflects performance on a calendar year basis. | |
(2) | Weighted average is weighted by market capitalization. |
Non-GAAP Financial Measures
|
4 | |||
Forward-looking Statements
|
4 | |||
Overview and Outlook
|
4 | |||
Analysis of Results of Operations
|
6 | |||
Results of Operations by Segment
|
7 | |||
Financial Condition
|
9 | |||
Critical Accounting Policies and Estimates
|
13 | |||
Recent Accounting Requirements
|
17 | |||
Market-Sensitive Instruments and Risk Management
|
17 |
o | Organic sales growth (decline) refers to the change in sales excluding the estimated impact of currency translation, acquisitions and divestitures and the extra week in fiscal year 2009. | |
o | Free cash flow refers to cash flow from operations, less net payments for property, plant, equipment, software and other deferred charges, plus net proceeds from sale (purchase) of investments. Free cash flow excludes mandatory debt service requirements and other uses of cash that do not directly or immediately support the underlying business (such as discretionary debt reductions, dividends, share repurchases, acquisitions, etc.). | |
o | Operational working capital refers to trade accounts receivable and inventories, net of accounts payable. This non-GAAP financial measure excludes cash and cash equivalents, short-term debt, deferred taxes, other current assets and other current liabilities, as well as current assets and current liabilities of held-for-sale businesses. | |
o | Net debt to EBITDA ratio refers to total debt less cash and cash equivalents, divided by earnings before interest, taxes, depreciation and amortization (EBITDA). |
Estimated change in sales due to: | 2010 | 2009 | 2008 | |||||||||
Organic sales growth (decline)
|
10 | % | (9 | )% | (3 | )% | ||||||
Extra week in fiscal year
|
(1 | ) | 1 | | ||||||||
Foreign currency translation
|
1 | (4 | ) | 3 | ||||||||
Acquisitions, net of divestitures
|
| | 7 | |||||||||
Reported sales growth
(decline)
(1)
|
9 | % | (11 | )% | 6 | % | ||||||
(1) | Totals may not sum due to rounding. |
o | No impairment of goodwill and indefinite-lived intangible assets, which impacted results in the prior year | |
o | Higher volume | |
o | Cost savings from productivity improvement initiatives, including savings from restructuring actions | |
o | Lower restructuring, asset impairment, and lease cancellation charges related to cost reduction actions | |
o | Lower net legal settlement costs | |
o | Lower loss on debt extinguishment |
o | Higher raw material costs | |
o | Higher tax expense |
o | Higher employee-related costs | |
o | Higher investments in growth and infrastructure | |
o | Impact of changes in customer programs in the Office and Consumer Products segment |
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net cash provided by operating activities
|
$ | 486.7 | $ | 569.0 | $ | 539.7 | ||||||
Purchase of property, plant and equipment, net
|
(83.5 | ) | (69.7 | ) | (118.4 | ) | ||||||
Purchase of software and other deferred charges
|
(25.1 | ) | (30.6 | ) | (63.1 | ) | ||||||
Proceeds from sale (purchase) of investments,
net
(1)
|
.8 | (.5 | ) | 17.2 | ||||||||
Free cash flow
|
$ | 378.9 | $ | 468.2 | $ | 375.4 | ||||||
(1) | Net proceeds from sale (purchase) of investments relate to net sales/purchases of securities held by our captive insurance company in 2010, 2009 and 2008, and sales of other investments in 2010 and 2008. |
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net sales
|
$ | 6,512.7 | $ | 5,952.7 | $ | 6,710.4 | ||||||
Cost of products sold
|
4,686.7 | 4,366.2 | 4,983.4 | |||||||||
Gross profit
|
1,826.0 | 1,586.5 | 1,727.0 | |||||||||
Marketing, general and administrative expense
|
1,370.4 | 1,268.8 | 1,304.3 | |||||||||
Goodwill and indefinite-lived intangible asset impairment charges
|
| 832.0 | | |||||||||
Interest expense
|
76.6 | 85.3 | 115.9 | |||||||||
Other expense, net
|
27.7 | 191.3 | 36.2 | |||||||||
Income (loss) before taxes
|
$ | 351.3 | $ | (790.9 | ) | $ | 270.6 | |||||
As a Percent of Sales: | % | % | % | |||||||||
Gross profit margin
|
28.0 | 26.7 | 25.7 | |||||||||
Marketing, general and administrative expense
|
21.0 | 21.3 | 19.4 | |||||||||
Income (loss) before taxes
|
5.4 | (13.3 | ) | 4.0 | ||||||||
(In millions, pretax) | 2010 | 2009 | 2008 | |||||||||
Restructuring costs
|
$ | 15.3 | $ | 86.8 | $ | 29.8 | ||||||
Asset impairment and lease cancellation charges
|
3.7 | 42.3 | 10.9 | |||||||||
Other items
|
8.7 | 62.2 | (4.5 | ) | ||||||||
Other expense, net
|
$ | 27.7 | $ | 191.3 | $ | 36.2 | ||||||
o | Loss from curtailment and settlement of pension obligations ($4.3 million) | |
o | Loss from debt extinguishment ($4 million) | |
o | Net legal settlement costs ($.9 million) | |
o | Gain on sale of investment ($.5 million) |
o | Legal settlement costs ($41 million) | |
o | Loss from debt extinguishment ($21.2 million) |
(In millions, except per share amounts) | 2010 | 2009 | 2008 | |||||||||
Income (loss) before taxes
|
$ | 351.3 | $ | (790.9 | ) | $ | 270.6 | |||||
Provision for (benefit from) income taxes
|
34.4 | (44.2 | ) | 4.5 | ||||||||
Net income (loss)
|
$ | 316.9 | $ | (746.7 | ) | $ | 266.1 | |||||
Net income (loss) per common share
|
$ | 3.00 | $ | (7.21 | ) | $ | 2.70 | |||||
Net income (loss) per common share, assuming dilution
|
$ | 2.97 | $ | (7.21 | ) | $ | 2.70 | |||||
Net income (loss) as a percent of sales
|
4.9 | % | (12.5 | )% | 4.0 | % | ||||||
Effective tax rate
|
9.8 | % | 5.6 | % | 1.7 | % | ||||||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net sales including intersegment sales
|
$ | 3,796.8 | $ | 3,447.1 | $ | 3,816.3 | ||||||
Less intersegment sales
|
(157.0 | ) | (147.1 | ) | (172.5 | ) | ||||||
Net sales
|
$ | 3,639.8 | $ | 3,300.0 | $ | 3,643.8 | ||||||
Operating
income
(1)
|
317.8 | 184.7 | 257.2 | |||||||||
(1) Included restructuring
costs and asset impairment charges for all years presented, loss
from curtailment of domestic pension obligations in 2010, and
lease cancellation costs in 2009 and 2008
|
$ | 6.9 | $ | 75.3 | $ | 12.6 | ||||||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net sales including intersegment sales
|
$ | 1,523.7 | $ | 1,322.5 | $ | 1,549.3 | ||||||
Less intersegment sales
|
(2.0 | ) | (1.6 | ) | (2.1 | ) | ||||||
Net sales
|
$ | 1,521.7 | $ | 1,320.9 | $ | 1,547.2 | ||||||
Operating income
(loss)
(1)(2)
|
65.0 | (899.0 | ) | 13.5 | ||||||||
(1) Included restructuring
costs, asset impairment charges, and lease cancellation costs in
all years presented, and loss from curtailment of domestic
pension obligations and net legal settlement costs in 2010
|
$ | 5.8 | $ | 51.6 | $ | 12.2 | ||||||
(2) Included goodwill and
indefinite-lived intangible asset impairment charges in 2009 and
transition costs associated with acquisition integrations in 2008
|
$ | | $ | 832.0 | $ | 24.1 | ||||||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net sales including intersegment sales
|
$ | 816.0 | $ | 850.0 | $ | 937.0 | ||||||
Less intersegment sales
|
(.8 | ) | (.7 | ) | (1.2 | ) | ||||||
Net sales
|
$ | 815.2 | $ | 849.3 | $ | 935.8 | ||||||
Operating
income
(1)
|
91.5 | 118.1 | 145.7 | |||||||||
(1) Included restructuring
costs in all years presented, asset impairment charges in 2009
and 2008, and loss from curtailment and settlement of pension
obligations and lease cancellation costs in 2010
|
$ | 8.4 | $ | 14.0 | $ | 12.7 | ||||||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net sales including intersegment sales
|
$ | 566.7 | $ | 498.3 | $ | 609.9 | ||||||
Less intersegment sales
|
(30.7 | ) | (15.8 | ) | (26.3 | ) | ||||||
Net sales
|
$ | 536.0 | $ | 482.5 | $ | 583.6 | ||||||
Operating income
(loss)
(1)
|
4.8 | (44.1 | ) | 5.2 | ||||||||
(1) Included restructuring
costs and asset impairment charges for all years presented and
loss from curtailment of domestic pension obligations in 2010
|
$ | 3.1 | $ | 29.2 | $ | 3.2 | ||||||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net income (loss)
|
$ | 316.9 | $ | (746.7 | ) | $ | 266.1 | |||||
Depreciation and amortization
|
247.6 | 267.3 | 278.4 | |||||||||
Provision for doubtful accounts
|
16.3 | 19.3 | 17.7 | |||||||||
Goodwill and indefinite-lived intangible asset impairment charges
|
| 832.0 | | |||||||||
Asset impairment and net loss on sale and disposal of assets
|
5.1 | 48.0 | 16.8 | |||||||||
Loss from debt extinguishments
|
4.0 | 21.2 | | |||||||||
Stock-based compensation
|
35.2 | 25.8 | 29.0 | |||||||||
Other non-cash expense and loss
|
43.6 | 22.0 | 11.3 | |||||||||
Other non-cash income and gain
|
(.5 | ) | (8.7 | ) | (12.4 | ) | ||||||
Trade accounts receivable
|
(87.6 | ) | 95.7 | 57.7 | ||||||||
Inventories
|
(35.6 | ) | 133.3 | 16.5 | ||||||||
Other current assets
|
(39.8 | ) | 40.6 | (30.0 | ) | |||||||
Accounts payable
|
76.5 | (14.5 | ) | 3.4 | ||||||||
Accrued liabilities
|
30.0 | (37.9 | ) | (19.2 | ) | |||||||
Income taxes (deferred and accrued)
|
(60.2 | ) | (90.7 | ) | (79.9 | ) | ||||||
Other assets
|
(12.2 | ) | 2.3 | 20.8 | ||||||||
Long-term retirement benefits and other liabilities
|
(52.6 | ) | (40.0 | ) | (36.5 | ) | ||||||
Net cash provided by operating activities
|
$ | 486.7 | $ | 569.0 | $ | 539.7 | ||||||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Purchase of property, plant and equipment, net
|
$ | (83.5 | ) | $ | (69.7 | ) | $ | (118.4 | ) | |||
Purchase of software and other deferred charges
|
(25.1 | ) | (30.6 | ) | (63.1 | ) | ||||||
Payments for acquisitions
|
| | (131.2 | ) | ||||||||
Proceeds from sale (purchase) of investments, net
|
.8 | (.5 | ) | 17.2 | ||||||||
Other
|
| (5.0 | ) | 2.0 | ||||||||
Net cash used in investing activities
|
$ | (107.8 | ) | $ | (105.8 | ) | $ | (293.5 | ) | |||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Net change in borrowings and
payments of debt |
$ | (189.8 | ) | $ | (300.6 | ) | $ | (40.7 | ) | |||
Dividends paid
|
(88.7 | ) | (134.9 | ) | (175.0 | ) | ||||||
Purchase of treasury stock
|
(108.7 | ) | | (9.8 | ) | |||||||
Proceeds from exercise of stock options, net
|
2.5 | .6 | 2.7 | |||||||||
Other
|
(6.8 | ) | 2.2 | 14.3 | ||||||||
Net cash used in financing activities
|
$ | (391.5 | ) | $ | (432.7 | ) | $ | (208.5 | ) | |||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Change in net sales
|
$ | 27 | $ | (269 | ) | $ | 168 | |||||
Change in net income
|
(3 | ) | (6 | ) | 8 | |||||||
(In millions) | 2010 | 2009 | ||||||
(A) Working capital (deficit) (current assets minus current
liabilities)
|
$ | 120.1 | $ | (134.5 | ) | |||
Reconciling items:
|
||||||||
Cash and cash equivalents
|
(127.5 | ) | (138.1 | ) | ||||
Current deferred and refundable income taxes and other current
assets
|
(308.4 | ) | (199.2 | ) | ||||
Short-term and current portion of long-term debt
|
381.0 | 535.6 | ||||||
Current deferred and payable income taxes and other current
accrued liabilities
|
702.6 | 642.3 | ||||||
(B) Operational working capital
|
$ | 767.8 | $ | 706.1 | ||||
(C) Net sales
|
$ | 6,512.7 | $ | 5,850.8 | (1) | |||
Working capital (deficit), as a percent of
net sales (A) ¸ (C) |
1.8 | % | (2.3 | )% | ||||
Operational working capital, as a percent
of net sales (B) ¸ (C) |
11.8 | % | 12.1 | % | ||||
(1) | Adjusted for the estimated impact of the extra week in the first quarter of 2009 |
(Dollars in millions) | 2010 | 2009 | 2008 | |||||||||
Net income (loss)
|
$ | 316.9 | $ | (746.7 | ) | $ | 266.1 | |||||
Reconciling items:
|
||||||||||||
Interest expense
|
76.6 | 85.3 | 115.9 | |||||||||
Provision for (benefit from) income taxes
|
34.4 | (44.2 | ) | 4.5 | ||||||||
Depreciation
|
172.9 | 187.6 | 204.6 | |||||||||
Amortization
|
74.7 | 79.7 | 73.8 | |||||||||
EBITDA
|
$ | 675.5 | $ | (438.3 | ) | $ | 664.9 | |||||
Total debt
|
$ | 1,337.2 | $ | 1,624.3 | $ | 2,209.8 | ||||||
Less cash and cash equivalents
|
(127.5 | ) | (138.1 | ) | (105.5 | ) | ||||||
Net debt
|
$ | 1,209.7 | $ | 1,486.2 | $ | 2,104.3 | ||||||
Net debt to EBITDA ratio
|
1.8 | n/m | (1) | 3.2 | ||||||||
(1) | The net debt to EBITDA ratio was not meaningful for 2009 as EBITDA was negative. EBITDA in 2009 included $832 in charges related to the impairment of goodwill and indefinite-lived intangibles. |
Payments Due by Period
|
||||||||||||||||||||||||||||
(In millions) | Total | 2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | |||||||||||||||||||||
Short-term lines of credit
|
$ | 379.8 | $ | 379.8 | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Long-term debt
|
949.2 | .1 | | 250.0 | | 5.0 | 694.1 | |||||||||||||||||||||
Long-term capital leases
|
8.2 | 1.1 | 2.3 | 2.0 | 1.6 | .6 | .6 | |||||||||||||||||||||
Interest on long-term
debt
(1)
|
503.2 | 54.6 | 54.6 | 42.9 | 42.4 | 42.4 | 266.3 | |||||||||||||||||||||
Operating leases
|
244.2 | 66.1 | 52.2 | 36.8 | 23.1 | 17.5 | 48.5 | |||||||||||||||||||||
Pension and postretirement benefit payments (unfunded plans)
|
56.7 | 4.5 | 4.3 | 3.8 | 4.0 | 4.0 | 36.1 | |||||||||||||||||||||
Total contractual obligations
|
$ | 2,141.3 | $ | 506.2 | $ | 113.4 | $ | 335.5 | $ | 71.1 | $ | 69.5 | $ | 1,045.6 | ||||||||||||||
(1) | Interest on floating rate debt was estimated using the index rate in effect as of January 1, 2011. |
| Purchase obligations or open purchase orders at year end. It is impracticable for us to either obtain such information or provide a reasonable estimate due to the decentralized nature of our purchasing systems. In addition, purchase orders are generally at fair value and are cancelable without penalty. | |
| Cash funding requirements for pension benefits payable to certain eligible current and future retirees under our funded plans Benefits paid by our funded pension plans are paid through a trust or trust equivalent. Cash funding requirements for our funded plans, which can be significantly impacted by earnings on investments, the discount rate, changes in the plans, and funding laws and regulations, are not included in this table as we are not able to estimate required contributions to the trust or trust equivalent. Refer to Note 6, Pension and Other Postretirement Benefits, to the Consolidated Financial Statements for expected contributions to our plans. |
| Unfunded termination indemnity benefits to certain employees outside of the U.S. These benefits are subject to applicable agreements, local laws and regulations. We have not incurred significant costs related to performance under these types of arrangements. | |
| Unrecognized tax benefit reserves of approximately $154 million, of which approximately $14 million may become payable during 2011. The resolution of the balance, including the timing of payments, is contingent upon various unknown factors and cannot be reasonably estimated. Refer to Note 11, Taxes Based on Income, to the Consolidated Financial Statements for further information on unrecognized tax benefits. | |
| Obligations associated with the headquarters and research center for our roll materials division (the Facility), located in Mentor, Ohio We completed the lease financing for the Facility, which consists generally of land, buildings, equipment and office furnishings, on September 9, 2005. We have leased the Facility under an operating lease arrangement, which contains a residual value guarantee of $33.4 million. |
(In millions) | 2010 | 2009 | ||||||
Balance at beginning of year
|
$ | 51.5 | $ | 54.6 | ||||
Purchase price adjustments related to acquisitions
|
| .9 | ||||||
Accruals
|
(1.2 | ) | 1.0 | |||||
Payments
|
(4.0 | ) | (5.0 | ) | ||||
Balance at end of year
|
$ | 46.3 | $ | 51.5 | ||||
(Dollars in millions) | 2010 | 2009 | ||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 127.5 | $ | 138.1 | ||||
Trade accounts receivable, less allowances of $51.4 and $56.2 at
end of year 2010 and 2009, respectively
|
996.1 | 918.6 | ||||||
Inventories, net
|
519.9 | 477.3 | ||||||
Current deferred and refundable income taxes
|
144.7 | 103.5 | ||||||
Other current assets
|
163.7 | 95.7 | ||||||
Total current assets
|
1,951.9 | 1,733.2 | ||||||
Property, plant and equipment, net
|
1,262.9 | 1,354.7 | ||||||
Goodwill
|
940.8 | 950.8 | ||||||
Other intangibles resulting from business acquisitions, net
|
228.9 | 262.2 | ||||||
Non-current deferred and refundable income taxes
|
266.0 | 236.6 | ||||||
Other assets
|
448.9 | 465.3 | ||||||
$ | 5,099.4 | $ | 5,002.8 | |||||
Liabilities and Shareholders Equity
|
||||||||
Current liabilities:
|
||||||||
Short-term and current portion of long-term debt
|
$ | 381.0 | $ | 535.6 | ||||
Accounts payable
|
748.2 | 689.8 | ||||||
Accrued payroll and employee benefits
|
259.7 | 216.0 | ||||||
Accrued trade rebates
|
126.0 | 115.1 | ||||||
Current deferred and payable income taxes
|
53.2 | 40.8 | ||||||
Other accrued liabilities
|
263.7 | 270.4 | ||||||
Total current liabilities
|
1,831.8 | 1,867.7 | ||||||
Long-term debt
|
956.2 | 1,088.7 | ||||||
Long-term retirement benefits and other liabilities
|
541.1 | 556.0 | ||||||
Non-current deferred and payable income taxes
|
124.6 | 127.8 | ||||||
Commitments and contingencies (see Notes 7 and 8)
|
||||||||
Shareholders equity:
|
||||||||
Common stock, $1 par value, authorized
400,000,000 shares at end of year 2010 and 2009;
issued 124,126,624 shares at end of year 2010
and 2009; outstanding 105,391,940 shares and
105,298,317 shares at end of year 2010 and 2009,
respectively
|
124.1 | 124.1 | ||||||
Capital in excess of par value
|
768.0 | 722.9 | ||||||
Retained earnings
|
1,727.9 | 1,499.7 | ||||||
Employee stock benefit trust, 1,784,741 shares and
6,744,845 shares
at end of year 2010 and 2009, respectively |
(73.2 | ) | (243.1 | ) | ||||
Treasury stock at cost, 16,934,943 shares and
12,068,462 shares
at end of year 2010 and 2009, respectively |
(758.2 | ) | (595.8 | ) | ||||
Accumulated other comprehensive loss
|
(142.9 | ) | (145.2 | ) | ||||
Total shareholders equity
|
1,645.7 | 1,362.6 | ||||||
$ | 5,099.4 | $ | 5,002.8 | |||||
(In millions, except per share amounts) | 2010 | 2009 | 2008 | |||||||||
Net sales
|
$ | 6,512.7 | $ | 5,952.7 | $ | 6,710.4 | ||||||
Cost of products sold
|
4,686.7 | 4,366.2 | 4,983.4 | |||||||||
Gross profit
|
1,826.0 | 1,586.5 | 1,727.0 | |||||||||
Marketing, general and administrative expense
|
1,370.4 | 1,268.8 | 1,304.3 | |||||||||
Goodwill and indefinite-lived intangible asset impairment charges
|
| 832.0 | | |||||||||
Interest expense
|
76.6 | 85.3 | 115.9 | |||||||||
Other expense, net
|
27.7 | 191.3 | 36.2 | |||||||||
Income (loss) before taxes
|
351.3 | (790.9 | ) | 270.6 | ||||||||
Provision for (benefit from) income taxes
|
34.4 | (44.2 | ) | 4.5 | ||||||||
Net income (loss)
|
$ | 316.9 | $ | (746.7 | ) | $ | 266.1 | |||||
Per share amounts:
|
||||||||||||
Net income (loss) per common share
|
$ | 3.00 | $ | (7.21 | ) | $ | 2.70 | |||||
Net income (loss) per common share, assuming dilution
|
$ | 2.97 | $ | (7.21 | ) | $ | 2.70 | |||||
Dividends
|
$ | .80 | $ | 1.22 | $ | 1.64 | ||||||
Average shares outstanding:
|
||||||||||||
Common shares
|
105.8 | 103.6 | 98.4 | |||||||||
Common shares, assuming dilution
|
106.8 | 103.6 | 98.7 | |||||||||
Cost of
|
Employee
|
Accumulated
|
||||||||||||||||||||||||||||||
Common
|
Capital in
|
unallocated
|
stock
|
other
|
||||||||||||||||||||||||||||
stock, $1
|
excess of
|
Retained
|
ESOP
|
benefit
|
Treasury
|
comprehensive
|
||||||||||||||||||||||||||
(Dollars in millions, except per share amounts) | par value | par value | earnings | shares | trust | stock | income (loss) | Total | ||||||||||||||||||||||||
Fiscal year ended 2007
|
$ | 124.1 | $ | 781.1 | $ | 2,290.2 | $ | (3.8 | ) | $ | (428.8 | ) | $ | (858.2 | ) | $ | 84.8 | $ | 1,989.4 | |||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
266.1 | 266.1 | ||||||||||||||||||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
(177.3 | ) | (177.3 | ) | ||||||||||||||||||||||||||||
Effective portion of gains or losses on cash flow hedges, net of
tax of $(.6)
|
1.0 | 1.0 | ||||||||||||||||||||||||||||||
Net actuarial loss, prior service cost and net transition asset,
net of tax of $(103.5)
|
(191.0 | ) | (191.0 | ) | ||||||||||||||||||||||||||||
Other comprehensive loss
|
(367.3 | ) | (367.3 | ) | ||||||||||||||||||||||||||||
Total comprehensive loss
|
(101.2 | ) | ||||||||||||||||||||||||||||||
Repurchase of 195,221 shares for treasury, net of shares
issued
|
(9.5 | ) | (9.5 | ) | ||||||||||||||||||||||||||||
Stock issued under option plans, including $13.4 of tax and
dividends paid on stock held in stock trust
|
36.2 | 7.5 | 43.7 | |||||||||||||||||||||||||||||
Dividends: $1.64 per share
|
(175.0 | ) | (175.0 | ) | ||||||||||||||||||||||||||||
ESOP transactions, net
|
2.6 | 2.6 | ||||||||||||||||||||||||||||||
Employee stock benefit trust market value adjustment
|
(174.4 | ) | 174.4 | | ||||||||||||||||||||||||||||
Fiscal year ended 2008
|
124.1 | 642.9 | 2,381.3 | (1.2 | ) | (246.9 | ) | (867.7 | ) | (282.5 | ) | 1,750.0 | ||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net loss
|
(746.7 | ) | (746.7 | ) | ||||||||||||||||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
103.4 | 103.4 | ||||||||||||||||||||||||||||||
Effective portion of gains or losses on cash flow hedges, net of
tax of $2.9
|
4.8 | 4.8 | ||||||||||||||||||||||||||||||
Net actuarial loss, prior service cost and net transition asset,
net of tax of $6.2
|
29.1 | 29.1 | ||||||||||||||||||||||||||||||
Other comprehensive income
|
137.3 | 137.3 | ||||||||||||||||||||||||||||||
Total comprehensive loss
|
(609.4 | ) | ||||||||||||||||||||||||||||||
Issuance of 6,459,088 shares for treasury in conjunction
with HiMEDS conversion
|
16.0 | 296.9 | 312.9 | |||||||||||||||||||||||||||||
Employee stock benefit trust transfer of 686,500 shares to
treasury
|
25.0 | (25.0 | ) | | ||||||||||||||||||||||||||||
Stock issued under option plans, including $8.2 of tax and
dividends paid on stock held in stock trust
|
28.1 | 14.7 | 42.8 | |||||||||||||||||||||||||||||
Dividends: $1.22 per share
|
(134.9 | ) | (134.9 | ) | ||||||||||||||||||||||||||||
ESOP transactions, net
|
1.2 | 1.2 | ||||||||||||||||||||||||||||||
Employee stock benefit trust market value adjustment
|
35.9 | (35.9 | ) | | ||||||||||||||||||||||||||||
Fiscal year ended 2009
|
124.1 | 722.9 | 1,499.7 | | (243.1 | ) | (595.8 | ) | (145.2 | ) | 1,362.6 | |||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
316.9 | 316.9 | ||||||||||||||||||||||||||||||
Other comprehensive income:
|
||||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
18.1 | 18.1 | ||||||||||||||||||||||||||||||
Effective portion of gains or losses on cash flow hedges, net of
tax of $1.2
|
2.0 | 2.0 | ||||||||||||||||||||||||||||||
Net actuarial loss, prior service cost and net transition asset,
net of tax of $(3.3)
|
(17.8 | ) | (17.8 | ) | ||||||||||||||||||||||||||||
Other comprehensive income
|
2.3 | 2.3 | ||||||||||||||||||||||||||||||
Total comprehensive income
|
319.2 | |||||||||||||||||||||||||||||||
Issuance of 2,133,656 shares for treasury in conjunction
with HiMEDS remarketing
|
109.3 | 109.3 | ||||||||||||||||||||||||||||||
Repurchase of 2,683,243 shares for treasury
|
(108.7 | ) | (108.7 | ) | ||||||||||||||||||||||||||||
Employee stock benefit transfer of 4,316,894 shares to
treasury
|
163.0 | (163.0 | ) | | ||||||||||||||||||||||||||||
Stock issued under stock option plans, including $4.4 of tax and
dividends paid on stock held in stock trust
|
29.8 | 22.2 | 52.0 | |||||||||||||||||||||||||||||
Dividends: $.80 per share
|
(88.7 | ) | (88.7 | ) | ||||||||||||||||||||||||||||
Employee stock benefit trust market value adjustment
|
15.3 | (15.3 | ) | | ||||||||||||||||||||||||||||
Fiscal year ended 2010
|
$ | 124.1 | $ | 768.0 | $ | 1,727.9 | $ | | $ | (73.2 | ) | $ | (758.2 | ) | $ | (142.9 | ) | $ | 1,645.7 | |||||||||||||
(In millions) | 2010 | 2009 | 2008 | |||||||||
Operating Activities
|
||||||||||||
Net income (loss)
|
$ | 316.9 | $ | (746.7 | ) | $ | 266.1 | |||||
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
||||||||||||
Depreciation
|
172.9 | 187.6 | 204.6 | |||||||||
Amortization
|
74.7 | 79.7 | 73.8 | |||||||||
Provision for doubtful accounts
|
16.3 | 19.3 | 17.7 | |||||||||
Goodwill and indefinite-lived intangible asset impairment charges
|
| 832.0 | | |||||||||
Asset impairment and net loss on sale and disposal of assets of
$2.8, $9.4, and $6.5 in 2010, 2009, and 2008, respectively
|
5.1 | 48.0 | 16.8 | |||||||||
Loss from debt extinguishments
|
4.0 | 21.2 | | |||||||||
Stock-based compensation
|
35.2 | 25.8 | 29.0 | |||||||||
Other non-cash expense and loss
|
43.6 | 22.0 | 11.3 | |||||||||
Other non-cash income and gain
|
(.5 | ) | (8.7 | ) | (12.4 | ) | ||||||
Changes in assets and liabilities and other adjustments, net of
the effect of business acquisitions:
|
||||||||||||
Trade accounts receivable
|
(87.6 | ) | 95.7 | 57.7 | ||||||||
Inventories
|
(35.6 | ) | 133.3 | 16.5 | ||||||||
Other current assets
|
(39.8 | ) | 40.6 | (30.0 | ) | |||||||
Accounts payable
|
76.5 | (14.5 | ) | 3.4 | ||||||||
Accrued liabilities
|
30.0 | (37.9 | ) | (19.2 | ) | |||||||
Taxes on income
|
(12.0 | ) | .3 | 34.3 | ||||||||
Deferred taxes
|
(48.2 | ) | (91.0 | ) | (114.2 | ) | ||||||
Other assets
|
(12.2 | ) | 2.3 | 20.8 | ||||||||
Long-term retirement benefits and other liabilities
|
(52.6 | ) | (40.0 | ) | (36.5 | ) | ||||||
Net cash provided by operating activities
|
486.7 | 569.0 | 539.7 | |||||||||
Investing Activities
|
||||||||||||
Purchase of property, plant and equipment, net
|
(83.5 | ) | (69.7 | ) | (118.4 | ) | ||||||
Purchase of software and other deferred charges
|
(25.1 | ) | (30.6 | ) | (63.1 | ) | ||||||
Payments for acquisitions
|
| | (131.2 | ) | ||||||||
Proceeds from sale (purchase) of investments, net
|
.8 | (.5 | ) | 17.2 | ||||||||
Other
|
| (5.0 | ) | 2.0 | ||||||||
Net cash used in investing activities
|
(107.8 | ) | (105.8 | ) | (293.5 | ) | ||||||
Financing Activities
|
||||||||||||
Net decrease in borrowings (maturities of 90 days or less)
|
(98.4 | ) | (192.3 | ) | (390.1 | ) | ||||||
Additional borrowings (maturities longer than 90 days)
|
249.8 | | 400.1 | |||||||||
Payments of debt (maturities longer than 90 days)
|
(341.2 | ) | (108.3 | ) | (50.7 | ) | ||||||
Dividends paid
|
(88.7 | ) | (134.9 | ) | (175.0 | ) | ||||||
Purchase of treasury stock
|
(108.7 | ) | | (9.8 | ) | |||||||
Proceeds from exercise of stock options, net
|
2.5 | .6 | 2.7 | |||||||||
Other
|
(6.8 | ) | 2.2 | 14.3 | ||||||||
Net cash used in financing activities
|
(391.5 | ) | (432.7 | ) | (208.5 | ) | ||||||
Effect of foreign currency translation on cash balances
|
2.0 | 2.1 | (3.7 | ) | ||||||||
(Decrease) increase in cash and cash equivalents
|
(10.6 | ) | 32.6 | 34.0 | ||||||||
Cash and cash equivalents, beginning of year
|
138.1 | 105.5 | 71.5 | |||||||||
Cash and cash equivalents, end of year
|
$ | 127.5 | $ | 138.1 | $ | 105.5 | ||||||
o
Pressure-sensitive Materials manufactures and sells
pressure-sensitive labeling technology and materials, films for
graphic and reflective applications, performance polymers
(largely adhesives used to manufacture pressure-sensitive
materials), and extruded films
o
Retail Information Services designs, manufactures
and sells a wide variety of branding and information products
and services, including brand and price tickets, tags and
labels, and related services, supplies and equipment
o
Office and Consumer Products manufactures and sells
a variety of office and consumer products, including labels,
binders, dividers, sheet protectors, and writing instruments
(In millions)
2010
2009
2008
$
69.7
$
78.3
$
114.6
94.5
47.5
77.0
o
Customer-specific allowances
o
Amounts based upon an aging schedule
o
An estimated amount, based on the Companys historical
experience
(In millions)
2010
2009
$
243.3
$
217.9
130.5
119.6
205.3
205.2
579.1
542.7
(59.2
)
(65.4
)
$
519.9
$
477.3
(In millions)
2010
2009
$
65.1
$
68.4
738.1
764.1
2,325.7
2,334.8
57.3
40.6
3,186.2
3,207.9
(1,923.3
)
(1,853.2
)
$
1,262.9
$
1,354.7
(In millions)
2010
2009
$
381.7
$
364.0
(238.7
)
(214.1
)
$
143.0
$
149.9
(In millions, except per share amounts)
2010
2009
2008
$
316.9
$
(746.7
)
$
266.1
105.8
103.6
98.4
1.0
.3
106.8
103.6
98.7
$
3.00
$
(7.21
)
$
2.70
$
2.97
$
(7.21
)
$
2.70
(In millions)
2010
2009
$
187.3
$
169.2
(321.2
)
(303.4
)
(9.0
)
(11.0
)
$
(142.9
)
$
(145.2
)
(In millions)
2010
2009
$
(11.0
)
$
(15.8
)
12.3
15.2
(10.3
)
(10.4
)
$
(9.0
)
$
(11.0
)
Other
Pressure-
Retail
Office and
specialty
sensitive
Information
Consumer
converting
(In millions)
Materials
Services
Products
businesses
Total
$
334.4
$
1,211.6
$
167.2
$
3.5
$
1,716.7
30.9
30.9
(820.0
)
(820.0
)
17.0
.3
5.8
.1
23.2
351.4
422.8
173.0
3.6
950.8
351.4
1,242.8
173.0
3.6
1,770.8
(820.0
)
(820.0
)
351.4
422.8
173.0
3.6
950.8
.7
.7
(5.4
)
(.3
)
(4.9
)
(.1
)
(10.7
)
346.0
423.2
168.1
3.5
940.8
346.0
1,243.2
168.1
3.5
1,760.8
(820.0
)
(820.0
)
$
346.0
$
423.2
$
168.1
$
3.5
$
940.8
(1)
Acquisition adjustments in 2009
consisted of opening balance sheet adjustments associated with
the DM Label acquisition in April 2008 of $32.6 and other
acquisition adjustments of $(1.7).
(2)
As part of the interim goodwill
impairment test completed in the second quarter of 2009, the
Company recorded a non-cash impairment charge of $820 for the
retail information services reporting unit in the first quarter
of 2009, with no additional impairment charge recorded
thereafter.
2010
2009
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
(In millions)
Amount
Amortization
Amount
Amount
Amortization
Amount
$
291.9
$
119.2
$
172.7
$
295.0
$
94.8
$
200.2
53.6
28.1
25.5
53.6
23.5
30.1
44.8
38.0
6.8
47.0
39.8
7.2
14.4
8.5
5.9
13.9
7.1
6.8
$
404.7
$
193.8
$
210.9
$
409.5
$
165.2
$
244.3
Weighted-average
amortization periods
Weighted-average
from the date of
remaining
(In years)
acquisition
useful life
13
8
13
6
12
5
7
3
(In millions)
2010
2009
$
50.0
$
50.0
340.0
250.0
250.0
249.2
249.0
109.4
249.8
150.0
150.0
8.4
.8
(1.2
)
(60.5
)
$
956.2
$
1,088.7
NOTE 5.
FINANCIAL
INSTRUMENTS
Asset
Liability
(In millions)
Balance Sheet Location
Fair Value
Balance Sheet Location
Fair Value
Other current assets
$
16.8
Other current liabilities
$
7.9
Other current assets
.1
Other current liabilities
2.4
$
16.9
$
10.3
Asset
Liability
(In millions)
Balance Sheet Location
Fair Value
Balance Sheet Location
Fair Value
Other current assets
$
5.0
Other current liabilities
$
6.5
Other current assets
.5
Other current liabilities
3.5
$
5.5
$
10.0
(In millions)
Location of Gain (Loss) in Income
2010
2009
Cost of products sold
$
(3.4
)
$
(2.8
)
Marketing, general and administrative expense
40.2
15.3
$
36.8
$
12.5
(In millions)
2010
2009
$
(.3
)
$
(6.0
)
(7.7
)
(4.0
)
(2.7
)
$
(10.3
)
$
(10.4
)
(In millions)
Location of Loss in Income
2010
2009
Interest expense
$
(4.8
)
$
(6.9
)
Cost of products sold
(2.9
)
(2.5
)
Cost of products sold
(4.6
)
(5.8
)
$
(12.3
)
$
(15.2
)
NOTE 6.
PENSION AND OTHER
POSTRETIREMENT BENEFITS
2010
2009
U.S.
Intl
U.S.
Intl
70
%
47
%
71
%
42
%
30
43
29
47
10
11
100
%
100
%
100
%
100
%
Fair Value Measurements Using
Quoted
Significant
Significant
Prices in
Other
Other
Active
Observable
Unobservable
Markets
Inputs
Inputs
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
$
.2
$
.2
$
$
56.3
56.3
109.3
109.3
165.6
165.6
84.1
84.1
83.1
83.1
19.0
19.0
12.7
12.7
140.4
140.4
34.6
34.6
373.9
198.9
175.0
$
539.7
$
199.1
$
340.6
$
.3
$
540.0
(1)
Included accrued receivables and
pending broker settlements at year end 2010.
Fair Value Measurements Using
Quoted
Significant
Significant
Prices in
Other
Other
Active
Observable
Unobservable
Markets
Inputs
Inputs
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
$
4.1
$
4.1
$
$
.3
.3
179.4
179.4
179.7
.3
179.4
79.3
79.3
63.8
63.8
12.2
12.2
11.9
11.9
9.3
9.3
21.7
21.7
198.2
198.2
16.7
16.7
27.3
27.3
44.0
16.7
27.3
$
426.0
$
4.4
$
394.3
$
27.3
.6
$
426.6
(1)
Included accrued receivables and
pending broker settlements at year end 2010.
Level 3 assets
Insurance
(In millions)
Contracts
$
26.9
.8
(.3
)
(.1
)
$
27.3
Fair Value Measurements Using
Quoted
Significant
Significant
Prices in
Other
Other
Active
Observable
Unobservable
Markets
Inputs
Inputs
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
$
.3
$
.3
$
$
40.5
40.5
97.8
97.8
138.3
138.3
174.9
174.9
15.2
15.2
137.3
137.3
327.4
190.1
137.3
1.9
1.9
$
467.9
$
192.3
$
275.6
$
(.2
)
$
467.7
(1)
Included accrued receivables and
pending broker settlements at year end 2009.
Fair Value Measurements Using
Quoted
Significant
Significant
Prices in
Other
Other
Active
Observable
Unobservable
Markets
Inputs
Inputs
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
$
4.7
$
4.7
$
$
.2
.2
1.0
1.0
179.8
179.8
181.0
.2
180.8
163.9
163.9
26.9
26.9
18.2
18.2
7.0
7.0
$
401.7
$
4.9
$
369.9
$
26.9
.4
$
402.1
(1)
Included accrued receivables and
pending broker settlements at year end 2009.
Level 3 assets
Insurance
(In millions)
Contracts
$
23.0
.9
1.8
1.2
$
26.9
One-percentage-point
One-percentage-point
(In millions)
increase
decrease
$
.2
$
(.2
)
3.5
(3.1
)
U.S. Postretirement
Pension Benefits
Health Benefits
2010
2009
2010
2009
(In millions)
U.S.
Intl
U.S.
Intl
$
693.6
$
465.8
$
611.9
$
449.9
$
37.0
$
31.8
23.8
9.8
18.9
11.8
1.5
1.0
40.1
24.5
38.8
25.8
1.9
1.9
4.1
4.3
1.2
1.8
.8
.1
(.3
)
56.3
50.3
63.2
(25.0
)
1.9
5.3
2.0
.3
2.0
(37.8
)
(19.5
)
(41.2
)
(20.1
)
(4.8
)
(4.8
)
.3
(34.0
)
(.8
)
(8.2
)
(.8
)
(21.7
)
19.9
$
744.8
$
504.7
$
693.6
$
465.8
$
38.7
$
37.0
$
742.3
$
474.9
$
658.0
$
439.2
(1)
Plan transfer for the U.S.
represented a transfer from the Companys savings plan.
(2)
Pension settlements in 2010
represented settlement events in Canada, Belgium, Korea, Taiwan,
and France.
U.S. Postretirement
Pension Benefits
Health Benefits
2010
2009
2010
2009
(In millions)
U.S.
Intl
U.S.
Intl
$
467.7
$
402.1
$
386.6
$
325.0
$
$
54.7
44.1
86.7
60.8
2.0
.1
2.0
53.4
24.5
33.5
16.5
3.6
3.0
4.1
4.3
1.2
1.8
(37.8
)
(19.5
)
(41.1
)
(20.1
)
(4.8
)
(4.8
)
(8.2
)
(.8
)
.7
(20.6
)
15.7
$
540.0
$
426.6
$
467.7
$
402.1
$
$
(1)
Plan transfer for the U.S.
represented a transfer from the Companys savings plan.
(2)
Pension settlements in 2010
represented settlement events in Canada, Belgium, Korea, Taiwan,
and France.
(3)
Adjustment in 2009 represented an
additional plan assets related to a German pension plan.
U.S. Postretirement
Pension Benefits
Health Benefits
2010
2009
2010
2009
(In millions)
U.S.
Intl
U.S.
Intl
$
$
40.0
$
$
45.7
$
$
(3.3
)
(2.9
)
(3.1
)
(2.4
)
(2.7
)
(3.0
)
(201.5
)
(115.2
)
(222.8
)
(107.0
)
(36.0
)
(34.0
)
$
(204.8
)
$
(78.1
)
$
(225.9
)
$
(63.7
)
$
(38.7
)
$
(37.0
)
U.S. Postretirement
Pension Benefits
Health Benefits
2010
2009
2008
2010
2009
2008
U.S.
Intl
U.S.
Intl
U.S.
Intl
5.50
%
5.24
%
6.00
%
5.72
%
6.60
%
5.74
%
5.25
%
5.50
%
6.60
%
2.95
3.59
2.99
3.59
2.59
U.S. Postretirement
Pension Benefits
Health Benefits
2010
2009
2010
2009
(In millions)
U.S.
Intl
U.S.
Intl
$
355.1
$
(.7
)
$
359.3
$
(1.3
)
$
25.8
$
25.6
2.2
3.8
4.7
4.1
(16.5
)
(18.5
)
104.2
78.9
$
357.3
$
107.3
$
364.0
$
81.7
$
9.3
$
7.1
U.S. Postretirement
Pension Benefits
Health Benefits
Before-Tax
Before-Tax
Before-
Amounts
Amounts
Net-of-Tax
Tax
Net-of-Tax
(In millions)
U.S.
Intl
Tax Effect
Amount
Amount
Tax Effect
Amount
$
364.0
$
81.7
$
(146.7
)
$
299.0
$
7.1
$
(2.7
)
$
4.4
(23.4
)
(4.7
)
9.7
(18.4
)
.4
(.2
)
.2
340.6
77.0
(137.0
)
280.6
7.5
(2.9
)
4.6
15.9
30.1
(1)
(11.8
)
34.2
1.8
(.7
)
1.1
.8
.2
(.3
)
.7
$
357.3
$
107.3
$
(149.1
)
$
315.5
$
9.3
$
(3.6
)
$
5.7
(1)
Net of foreign currency translation
gain of $2.1.
Pension Benefits
U.S. Postretirement
2010
2009
2008
Health Benefits
(In millions)
U.S.
Intl
U.S.
Intl
U.S.
Intl
2010
2009
2008
$
23.8
$
9.8
$
18.9
$
11.8
$
19.5
$
14.1
$
1.5
$
1.0
$
1.0
40.1
24.5
38.8
25.8
36.1
28.1
2.0
1.9
1.8
(48.4
)
(25.9
)
(48.6
)
(26.8
)
(50.9
)
(29.0
)
20.2
2.4
9.3
2.1
6.0
3.6
1.6
1.5
1.5
.8
.5
.8
.5
1.1
1.4
(2.0
)
(2.0
)
(2.0
)
(.5
)
(.6
)
(.6
)
2.4
(.9
)
(.1
)
2.3
(1)
.9
.2
$
38.9
$
12.2
$
20.1
$
13.0
$
11.8
$
17.5
$
3.1
$
2.4
$
2.3
(1)
Represented settlement events in
Canada, Belgium, and Korea.
Pension Benefits
U.S. Postretirement
2010
2009
2008
Health Benefits
U.S.
Intl
U.S.
Intl
U.S.
Intl
2010
2009
2008
6.00
%
(1)
5.72
%
6.60
%
5.74
%
6.55
%
5.53
%
5.50
%
6.60
%
6.30
%
8.75
6.23
8.75
6.51
8.75
6.66
3.59
2.99
3.59
2.59
3.59
2.66
(1)
The ADPP and BRP were remeasured on
August 1, 2010 at 5.40% to reflect the plan freezes
effective December 31, 2010.
U.S. Postretirement
Pension Benefits
Health Benefits
(In millions)
U.S.
Intl
$
40.5
$
18.7
$
2.7
41.8
20.0
2.5
43.1
21.0
2.5
44.4
22.0
2.4
45.6
23.4
2.4
259.6
143.2
13.6
U.S. Postretirement
Pension Benefits
Health Benefits
(In millions)
U.S.
Intl
$
8.4
$
3.9
$
1.8
.4
.4
(2.0
)
(.5
)
$
8.8
$
3.8
$
(.2
)
NOTE 7.
COMMITMENTS
Year
(In millions)
$
66.1
52.2
36.8
23.1
17.5
48.5
$
244.2
NOTE 8.
CONTINGENCIES
(In millions)
2010
2009
$
51.5
$
54.6
.9
(1.2
)
1.0
(4.0
)
(5.0
)
$
46.3
$
51.5
2010
2009
2008
2.61
%
2.76
%
4.15
%
31.99
%
41.51
%
29.86
%
2.51
%
3.83
%
2.76
%
6.0 years
6.1 years
6.0 years
Weighted-
Weighted-
average
Number
average
remaining
Aggregate
of options
exercise
contractual
intrinsic value
(in thousands)
price
life (in years)
(in millions)
10,760.2
$
49.72
5.87
$
34.0
1,850.8
33.09
(121.2
)
21.10
(921.4
)
53.41
11,568.4
$
47.06
5.75
$
62.0
11,441.9
47.25
5.72
60.0
8,298.1
$
52.70
4.69
$
20.5
Number
Weighted-
of options
average
(in thousands)
exercise price
3,566.3
$
36.01
1,850.8
33.09
(2,006.8
)
38.59
(140.0
)
36.32
3,270.3
$
32.76
Weighted-
Number of
average
PUs
grant-date
(in thousands)
fair value
651.2
$
22.12
342.5
29.06
(15.1
)
28.66
(60.5
)
23.45
918.1
$
24.52
o
A vesting period of 1 to 5 years provided that employment
continues for 1 to 5 years after the date of the
award; or
o
A vesting period of 3 years provided that a certain
performance objective is met at the end of the third year after
the year of the award. If the performance objective is not
achieved at the end of the third year, these same RSUs may vest
if the performance objective is met at the end of the fourth
year, and if not achieved at that time, then these same RSUs may
vest if the performance objective is met at the end of the fifth
year following the year of grant.
Weighted-
Number of
average
RSUs
grant-date
(in thousands)
fair value
783.3
$
32.24
598.4
30.01
(197.8
)
39.00
(56.0
)
29.76
1,127.9
$
30.00
Pressure-
Retail
Office and
Other
sensitive
Information
Consumer
specialty
Materials
Services
Products
converting
(In millions)
Segment
Segment
Segment
businesses
Total
$
1.5
$
2.2
$
.7
$
.3
$
4.7
2.0
(.1
)
1.9
.1
.9
4.5
.3
5.8
.9
(.4
)
.2
2.2
2.9
4.5
2.7
5.3
2.8
15.3
(3.9
)
(1.9
)
(.5
)
(.6
)
(6.9
)
$
.6
$
.8
$
4.8
$
2.2
$
8.4
$
.2
$
.2
$
$
.1
$
.5
.7
.9
1.6
.5
.5
.2
.9
1.1
$
1.4
$
1.3
$
.9
$
.1
$
3.7
Pressure-
Retail
Office and
Other
sensitive
Information
Consumer
specialty
Materials
Services
Products
converting
(In millions)
Segment
Segment
Segment
businesses
Total
$
7.6
$
5.8
$
.9
$
2.8
$
17.1
13.4
4.6
.3
7.5
25.8
3.9
21.0
(.2
)
2.3
27.0
2.3
6.3
8.0
.3
16.9
27.2
37.7
9.0
12.9
86.8
(19.5
)
(23.6
)
(.3
)
(11.0
)
(54.4
)
(7.1
)
(13.7
)
(8.1
)
(1.8
)
(30.7
)
$
.6
$
.4
$
.6
$
.1
$
1.7
$
2.7
$
10.6
$
.7
$
14.0
$
28.0
.7
2.4
3.9
.9
7.9
.1
.1
1.9
.2
.4
1.4
3.9
1.7
.7
2.4
$
7.1
$
13.9
$
5.0
$
16.3
$
42.3
Pressure-
Retail
Office and
Other
sensitive
Information
Consumer
specialty
Materials
Services
Products
converting
(In millions)
Segment
Segment
Segment
businesses
Total
$
1.5
$
1.4
$
.2
$
.2
$
3.3
.2
2.8
4.2
7.2
2.5
1.4
3.2
1.6
8.7
2.5
3.8
3.1
1.2
10.6
6.7
9.4
10.7
3.0
29.8
(1.5
)
(4.7
)
(5.2
)
(1.1
)
(12.5
)
(5.0
)
(4.6
)
(4.8
)
(1.8
)
(16.2
)
(.2
)
(.1
)
(.7
)
(.1
)
(1.1
)
$
$
$
$
$
$
4.9
$
1.3
$
1.2
$
.2
$
7.6
.1
.1
.9
.9
.9
1.4
2.3
$
5.8
$
2.8
$
2.1
$
.2
$
10.9
(In millions)
2010
2009
2008
$
(11.9
)
$
(13.1
)
$
4.3
(3.6
)
2.0
3.9
97.9
58.6
126.7
82.4
47.5
134.9
(16.6
)
(49.0
)
(36.5
)
7.2
(7.5
)
2.3
(38.6
)
(35.2
)
(96.2
)
(48.0
)
(91.7
)
(130.4
)
$
34.4
$
(44.2
)
$
4.5
(In millions)
2010
2009
2008
$
123.0
$
(276.8
)
$
94.7
1.6
(7.9
)
3.5
(63.6
)
(5.9
)
(62.2
)
2.5
4.0
(45.3
)
276.4
(7.9
)
(30.5
)
(3.8
)
(2.8
)
(5.2
)
(17.7
)
7.2
24.8
.3
(7.9
)
(5.8
)
$
34.4
$
(44.2
)
$
4.5
(In millions)
2010
2009
2008
$
27.0
$
(412.6
)
$
(14.2
)
324.3
(378.3
)
284.8
$
351.3
$
(790.9
)
$
270.6
(In millions)
2010
2009
$
69.7
$
65.8
348.5
214.7
111.4
101.8
13.5
14.1
108.6
94.8
104.2
107.3
11.6
11.3
7.5
1.7
(115.6
)
(115.4
)
659.4
496.1
(188.1
)
(184.3
)
(15.3
)
(21.7
)
(122.0
)
(6.6
)
(13.0
)
(332.0
)
(219.0
)
$
327.4
$
277.1
(1)
Reflects gross amount before
jurisdictional netting of deferred tax assets and liabilities.
(In millions)
2010
2009
$
151.7
$
142.9
8.0
17.4
32.0
7.0
9.8
(1.8
)
(7.9
)
(2.1
)
(36.7
)
(41.9
)
(4.3
)
4.8
127.2
151.7
27.0
30.3
$
154.2
$
182.0
(In millions)
2010
2009
2008
$
3,639.8
$
3,300.0
$
3,643.8
1,521.7
1,320.9
1,547.2
815.2
849.3
935.8
536.0
482.5
583.6
$
6,512.7
$
5,952.7
$
6,710.4
$
157.0
$
147.1
$
172.5
2.0
1.6
2.1
.8
.7
1.2
30.7
15.8
26.3
(190.5
)
(165.2
)
(202.1
)
$
$
$
$
317.8
$
184.7
$
257.2
65.0
(899.0
)
13.5
91.5
118.1
145.7
4.8
(44.1
)
5.2
(51.2
)
(65.3
)
(35.1
)
(76.6
)
(85.3
)
(115.9
)
$
351.3
(1)
$
(790.9
)
(2)
$
270.6
(3)
(In millions)
2010
2009
2008
$
50.2
$
41.5
$
50.1
28.2
19.6
45.0
4.4
5.6
6.1
22.7
7.6
16.6
1.8
1.3
1.4
$
107.3
$
75.6
$
119.2
$
77.8
$
86.2
$
91.7
53.2
58.3
65.6
11.2
13.6
17.0
26.7
25.6
26.3
4.0
3.9
4.0
$
172.9
$
187.6
$
204.6
(1)
Results for 2010 included
Other expense, net totaling $27.7, consisting of
restructuring costs, asset impairment charges and lease
cancellation costs of $19, loss from curtailment and settlement
of pension obligations of $4.3, loss from debt extinguishments
of $4, net legal settlement costs of $.9, partially offset by a
gain on a sale of investment of $(.5). Of the total $27.7, the
Pressure-sensitive Materials segment recorded $6.9, the Retail
Information Services segment recorded $5.8, the Office and
Consumer Products segment recorded $8.4, the other specialty
converting businesses recorded $3.1, and Corporate recorded $3.5.
(2)
Results for 2009 included
Other expense, net totaling $191.3, consisting of
restructuring costs, asset impairment charges and lease
cancellation costs of $129.1, legal settlements of $41, and a
loss from debt extinguishment of $21.2. Of the total $191.3, the
Pressure-sensitive Materials segment recorded $75.3, the Retail
Information Services segment recorded $51.6, the Office and
Consumer Products segment recorded $14, the other specialty
converting businesses recorded $29.2 and Corporate recorded
$21.2.
Additionally, 2009 operating loss
for the Retail Information Services segment included goodwill
and indefinite-lived intangible asset impairment charges of $832
taken in the first quarter of 2009.
(3)
Results for 2008 included
Other expense, net totaling $36.2, consisting of
restructuring costs, asset impairment charges and lease
cancellation costs of $40.7, partially offset by a gain on sale
of investments of $(4.5). Of the total $36.2, the
Pressure-sensitive Materials segment recorded $12.6, the Retail
Information Services segment recorded $12.2, the Office and
Consumer Products segment recorded $12.7, the other specialty
converting businesses recorded $3.2 and Corporate recorded
$(4.5).
Additionally, 2008 operating income
for the Retail Information Services segment included transition
costs associated with the Paxar and DM Label acquisitions of
$24.1.
(4)
Included capital expenditures
accrued but not paid of $12.4 in 2010, $8.2 in 2009 and $4.7 in
2008. Capital expenditures refer to purchases of property, plant
and equipment.
(In millions)
2010
2009
2008
$
2,111.5
$
2,026.4
$
2,218.4
2,019.5
1,949.4
2,366.6
1,513.3
1,236.8
1,297.6
484.3
394.2
448.0
384.1
345.9
379.8
$
6,512.7
$
5,952.7
$
6,710.4
$
488.4
$
509.3
$
604.2
774.5
845.4
888.8
$
1,262.9
$
1,354.7
$
1,493.0
NOTE 13.
QUARTERLY
FINANCIAL INFORMATION (Unaudited)
First
Second
Third
Fourth
(In millions, except per share data)
Quarter
(1)
Quarter
(2)
Quarter
(3)
Quarter
(4)
$
1,554.7
$
1,680.1
$
1,640.8
$
1,637.1
440.8
490.4
453.0
441.8
54.7
83.8
64.2
114.2
.52
.79
.61
1.08
.51
.78
.60
1.06
$
1,426.2
$
1,455.4
$
1,549.3
$
1,521.8
345.1
390.3
436.0
415.1
(898.9
)
39.8
62.5
49.9
(8.99
)
.38
.59
.47
(8.99
)
.38
.59
.47
(1)
Results in the first quarter of
2010 included pretax Other expense, net totaling
$6.3, consisting of restructuring costs of $4.7, asset
impairment charges of $.2, and an accrual for legal settlements
of $1.4.
Results in the first quarter of
2009 included pretax Other expense, net totaling
$97.3 consisting of asset impairment charges of $21.9,
restructuring costs of $17.1, lease cancellation charges of $.1,
an accrual for a legal settlement of $37, and a loss of $21.2
from debt extinguishment. Additionally, results included
goodwill and indefinite-lived intangible asset impairment
charges of $832.
(2)
Results in the second quarter of
2010 included pretax Other expense, net totaling
$4.6, consisting of restructuring costs of $1.9, asset
impairment charges of $.6, a loss from curtailment and
settlement of a foreign pension obligation of $1.9, and a loss
of $1.2 from debt extinguishment, partially offset by a gain on
sale of investment of $(.5) and net gain on legal settlements of
$(.5).
Results in the second quarter of
2009 included pretax Other expense, net totaling
$29.6 consisting of restructuring costs of $25.8 asset
impairment charges of $3.3, and lease cancellation charges of
$.5.
(3)
Results in the third quarter of
2010 included pretax Other expense, net totaling
$10.5, consisting of restructuring costs of $5.8, asset
impairment charges of $1.3 and lease cancellation costs of $1
and a loss from curtailment and settlement of domestic pension
obligations of $2.4.
Results in the third quarter of
2009 included pretax Other expense, net totaling
$35.5 consisting of restructuring costs of $27 and asset
impairment charges of $4.7, lease cancellation charges of $1.8,
and legal settlement charges of $2.
(4)
Results in the fourth quarter of
2010 included pretax Other expense, net totaling
$6.3 consisting of restructuring costs of $2.9, asset impairment
charges of $.4, and lease cancellation charges of $.2, and a
loss of $2.8 from debt extinguishment.
Results in the fourth quarter of
2009 included pretax Other expense, net totaling
$28.9 consisting of restructuring costs of $16.9, asset
impairment charges of $9.9, lease cancellation charges of $.1,
and legal settlement charges of $2. Additionally, results
included
out-of-period
adjustments related to deferred compensation assets of $4.9 and
a deferred tax asset of $1, which decreased net income by $5.9.
NOTE 14.
FAIR VALUE
MEASUREMENTS
Fair Value Measurements Using
Significant
Significant
Other
Other
Quoted Prices in
Observable
Unobservable
Active Markets
Inputs
Inputs
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
$
12.2
$
12.2
$
$
16.9
.1
16.8
$
10.3
$
2.4
$
7.9
$
Fair Value Measurements Using
Significant
Significant
Other
Other
Quoted Prices in
Observable
Unobservable
Active Markets
Inputs
Inputs
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
$
11.9
$
11.9
$
$
5.5
.5
5.0
$
10.0
$
3.5
$
6.5
$
Fair Value Measurements Using
Significant
Significant
Other
Other
Quoted Prices in
Observable
Unobservable
Active Markets
Inputs
Inputs
Total
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
Gains (Losses)
$
2.4
$
$
2.4
$
$
(1.0
)
Fair Value Measurements Using
Significant
Significant
Other
Other
Quoted Prices in
Observable
Unobservable
Active Markets
Inputs
Inputs
Total
(In millions)
Total
(Level 1)
(Level 2)
(Level 3)
Gains (Losses)
$
415.0
$
$
$
415.0
$
(820.0
)
18.0
18.0
(12.0
)
11.0
8.0
3.0
(20.3
)
Chairman, President and
Chief Executive Officer
Mitchell R. Butier
Senior Vice President
and Chief Financial Officer
2009
2010
High
Low
High
Low
$
40.07
$
30.79
$
33.61
$
17.26
41.39
31.32
29.76
23.94
38.04
31.67
36.56
24.23
42.49
35.80
40.02
34.81
(1)
Prices shown represent closing
prices on the NYSE
JURISDICTION OF | ||
NAME OF SUBSIDIARY | ORGANIZATION | |
ADC PHILIPPINES, INC.
|
PHILIPPINES | |
ADESPAN S.R.L.
|
ITALY | |
ADESPAN U.K. LIMITED
|
UNITED KINGDOM | |
ADHIPRESS BANGLADESH LTD.
|
BANGLADESH | |
ADHIPRESS (HONG KONG) LTD.
|
HONG KONG | |
ADVANCE FAR INVESTMENTS LIMITED
|
BRITISH VIRGIN ISLANDS | |
ALKAHN HONG KONG LABELS LTD.
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HONG KONG | |
AMERICAN TRIM PRODUCTS (ASIA) LIMITED
|
HONG KONG | |
ARTISTIC INTERNATIONAL (HK) LTD.
|
HONG KONG | |
ASTRIA S.R.L.
|
ITALY | |
AVERY CORP.
|
U.S.A. | |
AVERY DE MEXICO SRL DE CV
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MEXICO | |
AVERY DENNISON HOLDINGS (MALTA) LIMITED
|
MALTA | |
AVERY DENNISON AUSTRALIA GROUP HOLDINGS PTY LIMITED
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AUSTRALIA | |
AVERY DENNISON AUSTRALIA INTERNATIONAL HOLDINGS PTY LTD.
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AVERY DENNISON BELGIE BVBA
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AVERY DENNISON BULGARIA EOOD
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AVERY DENNISON BV
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NETHERLANDS | |
AVERY DENNISON CANADA CORPORATION
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CANADA | |
AVERY DENNISON CENTRAL EUROPE GMBH
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GERMANY | |
AVERY DENNISON CHILE S.A.
|
CHILE | |
AVERY DENNISON COLOMBIA S. A.
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COLOMBIA | |
AVERY DENNISON CONVERTED PRODUCTS DE MEXICO, S.A. DE C.V.
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MEXICO | |
AVERY DENNISON CONVERTED PRODUCTS EL SALVADOR S. A. DE C. V.
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AVERY DENNISON COORDINATION CENTER BVBA
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AVERY DENNISON CORPORATION
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U.S.A. | |
AVERY DENNISON C.A.
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VENEZUELA | |
AVERY DENNISON DE ARGENTINA S.A.
|
ARGENTINA | |
AVERY DENNISON DEUTSCHLAND GMBH
|
GERMANY | |
AVERY DENNISON DO BRASIL LTDA.
|
BRAZIL | |
AVERY DENNISON DOMINICAN REPUBLIC S. A.
|
DOMINICAN REPUBLIC | |
AVERY DENNISON EGYPT LLC
|
EGYPT | |
AVERY DENNISON ETIKET TICARET LIMITED SIRKETI
|
TURKEY | |
AVERY DENNISON EUROPE GMBH
|
SWITZERLAND | |
AVERY DENNISON EUROPE HOLDING (DEUTSCHLAND) GMBH & CO KG
|
GERMANY | |
AVERY DENNISON FINANCE BELGIUM BVBA
|
BELGIUM | |
AVERY DENNISON FINANCE GERMANY GMBH
|
GERMANY | |
AVERY DENNISON FINANCE LUXEMBOURG II SARL
|
LUXEMBOURG | |
AVERY DENNISON FINANCE LUXEMBOURG S. A. R. L.
|
LUXEMBOURG | |
AVERY DENNISON FINANCE LUXEMBOURG III SARL
|
LUXEMBOURG | |
AVERY DENNISON FOUNDATION
|
U.S.A. | |
AVERY DENNISON FRANCE S.A.S.
|
FRANCE | |
AVERY DENNISON G HOLDINGS I LLC
|
U.S.A. | |
AVERY DENNISON G HOLDINGS III LLC
|
U.S.A. | |
AVERY DENNISON G INVESTMENTS 111 LIMITED
|
GIBRALTAR | |
AVERY DENNISON G INVESTMENTS V LIMITED
|
GIBRALTAR | |
AVERY DENNISON GROUP DANMARK APS
|
DENMARK | |
AVERY DENNISON GROUP SINGAPORE (PTE) LIMITED
|
SINGAPORE | |
AVERY DENNISON GULF FZCO
|
UNITED ARAB EMIRATES |
JURISDICTION OF
NAME OF SUBSIDIARY
ORGANIZATION
SWITZERLAND
GERMANY
LUXEMBOURG
NETHERLANDS
U.S.A.
NEW ZEALAND
NETHERLANDS
HUNGARY
SPAIN
LUXEMBOURG
LUXEMBOURG
LUXEMBOURG
LUXEMBOURG
LUXEMBOURG
ITALY
JAPAN
TURKEY
SOUTH KOREA
SRI LANKA
LUXEMBOURG
LUXEMBOURG
GERMANY
LUXEMBOURG
LUXEMBOURG
NETHERLANDS
SWITZERLAND
FRANCE
GERMANY
IRELAND
NETHERLANDS
NEW ZEALAND
AUSTRALIA
ROMANIA
RUSSIA
FRANCE
GERMANY
MALAYSIA
UNITED KINGDOM
MAURITIUS
MOROCCO
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
NETHERLANDS
DENMARK
NORWAY
NORWAY
UNITED KINGDOM
U.S.A.
JURISDICTION OF
NAME OF SUBSIDIARY
ORGANIZATION
MEXICO
FRANCE
U.S.A.
ITALY
UNITED KINGDOM
AUSTRALIA
NEW ZEALAND
SOUTH AFRICA
U.S.A.
JAPAN
UNITED KINGDOM
PERU
POLAND
CZECH REPUBLIC
BRAZIL
COLOMBIA
MEXICO
DOMINICAN REPUBLIC
EL SALVADOR
GUATEMALA
U.S.A.
UNITED KINGDOM
SOUTH AFRICA
HONDURAS
U.S.A.
KOREA
MALAYSIA
TAIWAN
VIETNAM
FRANCE
SPAIN
ITALY
POLAND
SWEDEN
DENMARK
SWITZERLAND
DENMARK
U.S.A.
NETHERLANDS
SINGAPORE
SOUTH AFRICA
FINLAND
SWEDEN
FRANCE
ROMANIA
TURKEY
TAIWAN
UNITED KINGDOM
UNITED KINGDOM
GERMANY
AUSTRIA
GERMANY
GERMANY
MAURITIUS
CHINA
CHINA
JURISDICTION OF
NAME OF SUBSIDIARY
ORGANIZATION
CHINA
CHINA
HONG KONG
INDIA
IRELAND
CHINA
MALAYSIA
CHINA
CHINA
THAILAND
VIETNAM
MEXICO
U.S.A.
UNITED KINGDOM
UNITED KINGDOM
FRANCE
U.S.A.
PUERTO RICO
U.S.A.
AUSTRALIA
BRITISH VIRGIN ISLANDS
BRITISH VIRGIN ISLANDS
HONG KONG
ITALY
GERMANY
HONG KONG
BRAZIL
U.S.A.
U.S.A.
U.S.A.
UNITED KINGDOM
CHINA
CHINA
BRITISH VIRGIN ISLANDS
COLOMBIA
BRITISH VIRGIN ISLANDS
MALAYSIA
DOMINICAN REPUBLIC
BRAZIL
NEW ZEALAND
UNITED KINGDOM
FRANCE
SOUTH AFRICA
JERSEY, CHANNEL ISLANDS
CHINA
MEXICO
HONG KONG
HONG KONG
HONG KONG
U.S.A.
UNITED KINGDOM
SINGAPORE
HONG KONG
BRITISH VIRGIN ISLANDS
BRITISH VIRGIN ISLANDS
BRITISH VIRGIN ISLANDS
JURISDICTION OF
NAME OF SUBSIDIARY
ORGANIZATION
BANGLADESH
NETHERLANDS
CANADA
U.S.A.
AUSTRALIA
MALAYSIA
MEXICO
COLOMBIA
EL SALVADOR
GUATEMALA
MEXICO
NICARAGUA
BRAZIL
UNITED KINGDOM
HONG KONG
SOUTH KOREA
MOROCCO
CHINA
PAKISTAN
PERU
CHINA
BRAZIL
CHINA
HONG KONG
SINGAPORE
THAILAND
INDONESIA
INDONESIA
INDONESIA
INDONESIA
MEXICO
MEXICO
U.S.A.
TURKEY
TURKEY
HONG KONG
HONG KONG
MEXICO
GUATEMALA
HONG KONG
SINGAPORE
PHILIPPINES
HONG KONG
MEXICO
U.S.A.
SINGAPORE
BRITISH VIRGIN ISLANDS
CHINA
CHINA
ITALY
BRAZIL
BRITISH VIRGIN ISLANDS
HONG KONG
U.S.A.
Signature | Title | Date | ||
|
||||
/s/ Dean A. Scarborough
|
Chairman, President and
Chief Executive Officer |
February 25, 2011 | ||
|
||||
/s/ Bradley A. Alford
|
Director | February 25, 2011 | ||
|
||||
/s/ Peter K. Barker
|
Director | February 25, 2011 | ||
|
||||
/s/ Rolf Börjesson
|
Director | February 25, 2011 | ||
|
||||
/s/ John T. Cardis
|
Director | February 25, 2011 | ||
|
||||
|
||||
/s/ Ken C. Hicks
|
Director | February 25, 2011 |
Signature | Title | Date | ||
|
||||
/s/ Peter W. Mullin
|
Director | February 25, 2011 | ||
|
||||
/s/ David E. I. Pyott
|
Director | February 25, 2011 | ||
|
||||
/s/ Debra L. Reed
|
Director | February 25, 2011 | ||
|
||||
/s/ Patrick T. Siewert
|
Director | February 25, 2011 | ||
|
||||
/s/ Julia A. Stewart
|
Director | February 25, 2011 |
1. | I have reviewed this annual report on Form 10-K of Avery Dennison Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
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/s/ Dean A. Scarborough | |
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Dean A. Scarborough | |
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Chairman, President and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Avery Dennison Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
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/s/ Mitchell R. Butier | |
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Mitchell R. Butier | |
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Senior Vice President and | |
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Chief Financial Officer |
(i) | the Annual Report on Form 10-K of the Company for the fiscal year ended January 1, 2011 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and | ||
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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/s/ Dean A. Scarborough
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Dean A. Scarborough | |
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Chairman, President and Chief Executive Officer |
* | The above certification accompanies the issuers Annual Report on Form 10-K and is furnished, not filed, as provided in SEC Release 33-8238, dated June 5, 2003. |
(i) | the Annual Report on Form 10-K of the Company for the fiscal year ended January 1, 2011 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and | ||
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Mitchell R. Butier | ||||
Mitchell R. Butier | ||||
Senior Vice President and
Chief Financial Officer |
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* | The above certification accompanies the issuers Annual Report on Form 10-K and is furnished, not filed, as provided in SEC Release 33-8238, dated June 5, 2003. |