Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 28, 2017 | Jul. 02, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Avery Dennison Corp | ||
Entity Central Index Key | 8,818 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 6,414,034,778 | ||
Entity Common Stock, Shares Outstanding | 88,123,603 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 195.1 | $ 158.8 |
Trade accounts receivable, less allowances of $47.8 and $31.5 at year-end 2016 and 2015, respectively | 1,001 | 964.7 |
Inventories, net | 519.1 | 478.7 |
Refundable income taxes | 30.3 | 30.9 |
Assets held for sale | 6.8 | 2.5 |
Other current assets | 152.5 | 139.8 |
Total current assets | 1,904.8 | 1,775.4 |
Property, plant and equipment, net | 915.2 | 847.9 |
Goodwill | 793.6 | 686.2 |
Other intangibles resulting from business acquisitions, net | 66.7 | 45.8 |
Non-current deferred income taxes | 313.2 | 372.2 |
Other assets | 402.9 | 406.2 |
Total assets | 4,396.4 | 4,133.7 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt and capital leases | 579.1 | 95.3 |
Accounts payable | 841.9 | 814.6 |
Accrued payroll and employee benefits | 217.4 | 194.6 |
Accrued trade rebates | 95.2 | 85.4 |
Income taxes payable | 37.9 | 45.1 |
Other accrued liabilities | 232.8 | 224.1 |
Total current liabilities | 2,004.3 | 1,459.1 |
Long-term debt and capital leases | 713.4 | 963.6 |
Long-term retirement benefits and other liabilities | 660.9 | 637.4 |
Non-current deferred and payable income taxes | 92.3 | 107.9 |
Commitments and contingencies (see Notes 7 and 8) | ||
Shareholders' equity: | ||
Common stock, $1 par value per share, authorized - 400,000,000 shares at year-end 2016 and 2015; issued - 124,126,624 shares at year-end 2016 and 2015; outstanding - 88,308,860 shares and 89,967,697 shares at year-end 2016 and 2015, respectively | 124.1 | 124.1 |
Capital in excess of par value | 852 | 834 |
Retained earnings | 2,473.3 | 2,277.6 |
Treasury stock at cost, 35,817,764 shares and 34,158,927 shares at year-end 2016 and 2015, respectively | (1,772) | (1,587) |
Accumulated other comprehensive loss | (751.9) | (683) |
Total shareholders' equity | 925.5 | 965.7 |
Total liabilities and shareholders' equity | $ 4,396.4 | $ 4,133.7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 |
Consolidated Balance Sheets | ||
Trade accounts receivable, allowances (in dollars) | $ 47.8 | $ 31.5 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized shares | 400,000,000 | 400,000,000 |
Common stock, issued shares | 124,126,624 | 124,126,624 |
Common stock, outstanding shares | 88,308,860 | 89,967,697 |
Treasury stock, shares | 35,817,764 | 34,158,927 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Consolidated Statements of Income | |||
Net sales | $ 6,086.5 | $ 5,966.9 | $ 6,330.3 |
Cost of products sold | 4,386.8 | 4,321.1 | 4,679.1 |
Gross profit | 1,699.7 | 1,645.8 | 1,651.2 |
Marketing, general and administrative expense | 1,097.5 | 1,108.1 | 1,158.9 |
Interest expense | 59.9 | 60.5 | 63.3 |
Other expense, net | 65.2 | 68.3 | 68.2 |
Income from continuing operations before taxes | 477.1 | 408.9 | 360.8 |
Provision for income taxes | 156.4 | 134.5 | 113.5 |
Income from continuing operations | 320.7 | 274.4 | 247.3 |
Loss from discontinued operations, net of tax | (0.1) | (2.2) | |
Net income | $ 320.7 | $ 274.3 | $ 245.1 |
Net income (loss) per common share: | |||
Continuing operations (in dollars per share) | $ 3.60 | $ 3.01 | $ 2.64 |
Discontinued operations (in dollars per share) | (0.03) | ||
Net income per common share (in dollars per share) | 3.60 | 3.01 | 2.61 |
Net income (loss) per common share, assuming dilution: | |||
Continuing operations (in dollars per share) | 3.54 | 2.95 | 2.58 |
Discontinued operations (in dollars per share) | (0.02) | ||
Net income per common share, assuming dilution (in dollars per share) | 3.54 | 2.95 | 2.56 |
Dividends per common share (in dollars per share) | $ 1.60 | $ 1.46 | $ 1.34 |
Weighted average number of shares outstanding: | |||
Common shares (in shares) | 89.1 | 91 | 93.8 |
Common shares, assuming dilution (in shares) | 90.7 | 92.9 | 95.7 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 320.7 | $ 274.3 | $ 245.1 |
Foreign currency translation: | |||
Translation loss | (53.7) | (139) | (149.8) |
Pension and other postretirement benefits: | |||
Net loss recognized from actuarial gain/loss and prior service cost/credit | (62.9) | (18.9) | (125.2) |
Reclassifications to net income | 44.2 | 22.9 | 16.9 |
Cash flow hedges: | |||
Gains (losses) recognized on cash flow hedges | 0.7 | (0.5) | 0.1 |
Reclassifications to net income | 2.8 | (2) | 0.9 |
Other comprehensive loss, net of tax | (68.9) | (137.5) | (257.1) |
Total comprehensive income (loss), net of tax | $ 251.8 | $ 136.8 | $ (12) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Common stock | Capital in excess of par value | Retained earnings | Treasury stock | Accumulated other comprehensive loss | Total |
Balance at Dec. 28, 2013 | $ 124.1 | $ 812.3 | $ 1,992.3 | $ (1,172.2) | $ (288.4) | $ 1,468.1 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 245.1 | 245.1 | ||||
Other comprehensive loss, net of tax | (257.1) | (257.1) | ||||
Repurchase of 3,781,528, 3,858,376 and 7,416,167 shares for treasury for the years ended 2016, 2015, and 2014, respectively | (355.5) | (355.5) | ||||
Issuance of 1,842,165, 3,019,001 and 1,299,931 shares under stock-based compensation plans, including tax of 12.3, $10.6 and $(4.1) for the years ended 2016, 2015, and 2014, respectively | 11.6 | (2) | 43.2 | 52.8 | ||
Contribution of 280,526, 348,116 and 396,781 shares to 401(k) Plan for the years ended 2016, 2015, and 2014, respectively | 6.2 | 13.2 | 19.4 | |||
Dividends: $1.60, $1.46 and $1.34 per share for the years ended 2016, 2015, and 2014, respectively | (125.1) | (125.1) | ||||
Balance at Jan. 03, 2015 | 124.1 | 823.9 | 2,116.5 | (1,471.3) | (545.5) | 1,047.7 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 274.3 | 274.3 | ||||
Other comprehensive loss, net of tax | (137.5) | (137.5) | ||||
Repurchase of 3,781,528, 3,858,376 and 7,416,167 shares for treasury for the years ended 2016, 2015, and 2014, respectively | (232.3) | (232.3) | ||||
Issuance of 1,842,165, 3,019,001 and 1,299,931 shares under stock-based compensation plans, including tax of 12.3, $10.6 and $(4.1) for the years ended 2016, 2015, and 2014, respectively | 10.1 | 11.8 | 104.5 | 126.4 | ||
Contribution of 280,526, 348,116 and 396,781 shares to 401(k) Plan for the years ended 2016, 2015, and 2014, respectively | 8.1 | 12.1 | 20.2 | |||
Dividends: $1.60, $1.46 and $1.34 per share for the years ended 2016, 2015, and 2014, respectively | (133.1) | (133.1) | ||||
Balance at Jan. 02, 2016 | 124.1 | 834 | 2,277.6 | (1,587) | (683) | 965.7 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 320.7 | 320.7 | ||||
Other comprehensive loss, net of tax | (68.9) | (68.9) | ||||
Repurchase of 3,781,528, 3,858,376 and 7,416,167 shares for treasury for the years ended 2016, 2015, and 2014, respectively | (262.4) | (262.4) | ||||
Issuance of 1,842,165, 3,019,001 and 1,299,931 shares under stock-based compensation plans, including tax of 12.3, $10.6 and $(4.1) for the years ended 2016, 2015, and 2014, respectively | 18 | 7.7 | 67.2 | 92.9 | ||
Contribution of 280,526, 348,116 and 396,781 shares to 401(k) Plan for the years ended 2016, 2015, and 2014, respectively | 9.8 | 10.2 | 20 | |||
Dividends: $1.60, $1.46 and $1.34 per share for the years ended 2016, 2015, and 2014, respectively | (142.5) | (142.5) | ||||
Balance at Dec. 31, 2016 | $ 124.1 | $ 852 | $ 2,473.3 | $ (1,772) | $ (751.9) | $ 925.5 |
Consolidated Statements of Sha7
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Repurchase of shares for treasury (in shares) | 3,800,000 | ||
Stock issued under stock-based compensation plans (in shares) | 1,842,165 | 3,019,001 | 1,299,931 |
Tax on stock issued under stock-based compensation plans | $ 12.3 | $ 10.6 | $ (4.1) |
Stock issued under 401(k) Plan (in shares) | 280,526 | 348,116 | 396,781 |
Dividends per common share (in dollars per share) | $ 1.60 | $ 1.46 | $ 1.34 |
Treasury stock | |||
Repurchase of shares for treasury (in shares) | 3,781,528 | 3,858,376 | 7,416,167 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Operating Activities | |||
Net income | $ 320.7 | $ 274.3 | $ 245.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 117.5 | 125.2 | 135.5 |
Amortization | 62.6 | 63.1 | 66.1 |
Provision for doubtful accounts and sales returns | 54.4 | 46.5 | 45.2 |
Loss on sale of businesses | 3.4 | ||
Indefinite-lived intangible asset impairment charge | 0 | 3 | |
Net losses from asset impairments and sales/disposals of assets | 1.5 | 12.2 | 10.2 |
Stock-based compensation | 27.2 | 26.3 | 28.3 |
Loss from settlement of pension obligations | 41.4 | ||
Other non-cash expense and loss | 46.2 | 50.1 | 44.2 |
Changes in assets and liabilities and other adjustments: | |||
Trade accounts receivable | (88.2) | (135.9) | (65.4) |
Inventories | (19.6) | (34.4) | (33) |
Other current assets | (7.6) | 3.9 | (33.7) |
Accounts payable | 31.6 | 65.5 | (62.8) |
Accrued liabilities | 32.4 | 7 | (18.2) |
Taxes on income | (14.1) | (23.7) | 15.3 |
Deferred income taxes | 52.3 | 12.9 | (17.9) |
Other assets | (1.2) | (0.3) | (3.5) |
Long-term retirement benefits and other liabilities | (71.8) | (19) | (6.9) |
Net cash provided by operating activities | 585.3 | 473.7 | 354.9 |
Investing Activities | |||
Purchases of property, plant and equipment | (176.9) | (135.8) | (147.9) |
Purchases of software and other deferred charges | (29.7) | (15.7) | (27.1) |
Proceeds from sales of property, plant and equipment | 8.5 | 7.6 | 4.3 |
(Purchases) sales of investments, net | (0.1) | (0.5) | 0.3 |
Payments for acquisitions and equity method investments, net of cash acquired | (237.2) | ||
Other | 1.5 | ||
Net cash used in investing activities | (435.4) | (142.9) | (170.4) |
Financing Activities | |||
Net increase (decrease) in borrowings (maturities of three months or less) | 234.9 | (98.4) | 126.5 |
Repayments of debt (maturities greater than three months) | (2.7) | (7.4) | (1.6) |
Dividends paid | (142.5) | (133.1) | (125.1) |
Share repurchases | (262.4) | (232.3) | (355.5) |
Proceeds from exercises of stock options, net | 71 | 104 | 34.2 |
Other | (4.5) | (0.1) | (2) |
Net cash used in financing activities | (106.2) | (367.3) | (323.5) |
Effect of foreign currency translation on cash balances | (7.4) | (11.9) | (4.9) |
Increase (decrease) in cash and cash equivalents | 36.3 | (48.4) | (143.9) |
Cash and cash equivalents, beginning of year | 158.8 | 207.2 | 351.1 |
Cash and cash equivalents, end of year | $ 195.1 | $ 158.8 | $ 207.2 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations We develop identification and decorative solutions for businesses worldwide. Our products include pressure-sensitive labeling technology and materials; films for graphic and reflective applications; brand and price tickets, tags and labels (including radio-frequency identification ("RFID") inlays); performance tapes; and pressure-sensitive adhesive products for surgical, wound care, ostomy, and electromedical applications. Principles of Consolidation The consolidated financial statements include the accounts of majority-owned subsidiaries. Intercompany accounts, transactions, and profits are eliminated in consolidation. We apply the equity method of accounting for investments in which we have significant influence but not a controlling interest. Segment Information In the fourth quarter of 2016, we changed our operating structure to align with our overall business strategy, and our Chief Executive Officer, who is also our chief operating decision maker, requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result of these events, our fiscal year 2016 results are reported based on our new reportable segments, as described in Note 15, "Segment Information." We have reclassified certain prior period amounts to reflect our new operating structure. Fiscal Year Normally, our fiscal years consist of 52 weeks, but every fifth or sixth fiscal year consists of 53 weeks. Our 2016 and 2015 fiscal years consisted of 52-week periods ending December 31, 2016 and January 2, 2016, respectively. Our 2014 fiscal year consisted of a 53-week period ending January 3, 2015. Financial Presentation As further discussed in Note 16, "Supplemental Financial Information," we have classified certain costs associated with the divestiture of our former Office and Consumer Products ("OCP") and Designed and Engineered Solutions ("DES") businesses as discontinued operations in the Consolidated Statements of Income for fiscal years 2015 and 2014. Unless otherwise noted, the results and financial condition of discontinued operations have been excluded from the notes to our Consolidated Financial Statements. Certain prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions for the reporting period and as of the date of the financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expense. Actual results could differ from these estimates. Cash and Cash Equivalents Cash and cash equivalents generally consist of cash on hand, deposits in banks, cash-in-transit, and bank drafts and short-term investments with maturities of three months or less when purchased or received. The carrying value of these assets approximates fair value due to the short maturity of the instruments. Accounts Receivable We record trade accounts receivable at the invoiced amount. The allowance for doubtful accounts reserve represents allowances for customer trade accounts receivable that are estimated to be partially or entirely uncollectible. The customer complaint reserve represents estimated sales returns and allowances. These allowances are used to reduce gross trade receivables to their net realizable values. We record these allowances based on estimates related to the following: • Customer-specific allowances; • Amounts based upon an aging schedule; and • An amount based on our historical experience. No single customer represented 10% or more of our net sales in, or trade accounts receivable at, year-end 2016 or 2015. However, during 2016, 2015, and 2014, our ten largest customers by net sales represented approximately 14%, 15%, and 13% of our net sales, respectively. As of December 31, 2016 and January 2, 2016, our ten largest customers by trade accounts receivable represented approximately 14% of our trade accounts receivable. These customers were concentrated primarily in our Label and Graphic Materials reportable segment. We generally do not require our customers to provide collateral. Inventories Inventories are stated at the lower of cost or net realizable value and are categorized as raw materials, work-in-progress, or finished goods. Cost is determined using the first-in, first-out method. Inventory reserves are recorded to cost of products sold for damaged, obsolete, excess and slow-moving inventory and we establish a lower cost basis for the inventory. We use estimates to record these reserves. Slow-moving inventory is reviewed by category and may be partially or fully reserved for depending on the type of product, level of usage, and the length of time the product has been included in inventory. Property, Plant and Equipment Depreciation is generally computed using the straight-line method over the estimated useful lives of the assets, ranging from ten to forty-five years for buildings and improvements and three to fifteen years for machinery and equipment. Leasehold improvements are depreciated over the shorter of the useful life of the asset or the term of the associated leases. Maintenance and repair costs are expensed as incurred; renewals and betterments are capitalized. Upon the sale or retirement of assets, the accounts are relieved of the cost and the related accumulated depreciation, with any resulting gain or loss included in net income. Software We capitalize internal and external software costs that are incurred during the application development stage of software development, including costs incurred for the design, coding, installation to hardware, testing, and upgrades and enhancements that provide the software or hardware with additional functionalities and capabilities. Internal and external software costs during the preliminary project stage are expensed, as are those costs during the post-implementation and/or operation stage, including internal and external training costs and maintenance costs. Capitalized software, which is included in "Other assets" in the Consolidated Balance Sheets, is amortized on a straight-line basis over the estimated useful life of the software, which is generally between five and ten years. Impairment of Long-lived Assets Impairment charges are recorded when the carrying amounts of long-lived assets are determined not to be recoverable. Recoverability is measured by comparing the undiscounted cash flows expected from their use and eventual disposition to the carrying value of the related asset or asset group. The amount of impairment loss is calculated as the excess of the carrying value over the fair value. Historically, changes in market conditions and management strategy have caused us to reassess the carrying amount of our long-lived assets. Goodwill and Other Intangibles Resulting from Business Acquisitions Business combinations are accounted for by the acquisition method, with the excess of the acquisition cost over the fair value of net tangible assets and identified intangible assets acquired considered goodwill. As a result, we disclose goodwill separately from other intangible assets. Other identifiable intangibles include customer relationships, patents and other acquired technology, trade names and trademarks, and other intangibles. We have the following reporting units: materials; retail branding and information solutions; reflective solutions; performance tapes; fastener solutions; adhesives; and medical solutions. In performing the required impairment tests, we primarily apply a present value (discounted cash flow) method to determine the fair value of the reporting units with goodwill. We perform our annual impairment test of goodwill during the fourth quarter. Certain factors may result in the need to perform an impairment test prior to the fourth quarter, including significant underperformance of a business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, or a decision to divest a portion of a reporting unit. We determine goodwill impairment using a two-step process. The first step is to identify if a potential impairment exists by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to have a potential impairment and the second step of the impairment test is not necessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if any. The second step, if necessary, compares the implied fair value of goodwill with the carrying amount of goodwill. If the implied fair value of goodwill exceeds the carrying amount, then goodwill is not considered impaired. However, if the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess. In consultation with outside specialists, we estimate the fair value of our reporting units using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions about the reporting units, including sales, operating margins, growth rates, and discount rates. Assumptions about discount rates are based on a weighted-average cost of capital for comparable companies. Assumptions about sales, operating margins, and growth rates are based on our forecasts, business plans, economic projections, anticipated future cash flows, and marketplace data. Assumptions are also made for varying perpetual growth rates for periods beyond the long-term business plan period. We base our fair value estimates on projected financial information and assumptions that we believe are reasonable. However, actual future results may differ from those estimates and projections, and those differences may be material. The valuation methodology used to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions. We test indefinite-lived intangible assets, consisting of trade names and trademarks, for impairment in the fourth quarter or whenever events or circumstances indicate that it is more likely than not that their carrying amounts exceed their fair values. Fair value is estimated as the discounted value of future revenues using a royalty rate that a third party would pay for use of the asset. Variation in the royalty rates could impact the estimate of fair value. If the carrying amount of an asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. See also Note 3, "Goodwill and Other Intangibles Resulting from Business Acquisitions." Foreign Currency Asset and liability accounts of international operations are translated into U.S. dollars at current rates. Revenues and expenses are translated at the weighted-average currency rate for the fiscal year. Gains and losses resulting from hedging the value of investments in certain international operations and from the translation of balance sheet accounts are recorded directly as a component of other comprehensive income. Financial Instruments We enter into foreign exchange hedge contracts to reduce our risk from exchange rate fluctuations associated with receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. We enter into interest rate contracts to help manage our exposure to certain interest rate fluctuations. We also enter into futures contracts to hedge certain price fluctuations for a portion of our anticipated domestic purchases of natural gas. The maximum length of time for which we hedge our exposure to the variability in future cash flows for forecasted transactions is 36 months. On the date we enter into a derivative contract, we determine whether the derivative will be designated as a hedge. Derivatives not designated as hedges are recorded on the balance sheets at fair value, with changes in fair value recognized in earnings. Derivatives designated as hedges are classified as either (1) hedges of the fair value of a recognized asset or liability or an unrecognized firm commitment ("fair value" hedges) or (2) hedges of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability ("cash flow" hedges). Our policy is not to purchase or hold any foreign currency, interest rate or commodity contracts for trading purposes. We assess, both at the inception of the hedge and on an ongoing basis, whether hedges are highly effective. If it is determined that a hedge is not highly effective, we prospectively discontinue hedge accounting. For cash flow hedges, the effective portion of the related gains and losses is recorded as a component of other comprehensive income, and the ineffective portion is reported in earnings. Amounts in accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged transaction affects earnings. In the event that the anticipated transaction is no longer likely to occur, we recognize the change in fair value of the instrument in current period earnings. Changes in fair value hedges are recognized in current period earnings. Changes in the fair value of underlying hedged items (such as recognized assets or liabilities) are also recognized in current period earnings and offset the changes in the fair value of the derivative. In the Consolidated Statements of Cash Flows, hedges are classified in the same category as the item hedged, primarily in operating activities. See also Note 5, "Financial Instruments." Fair Value Measurements We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability. We determine fair value based on a three-tier fair value hierarchy, which we use to prioritize the inputs used in measuring fair value. These tiers consist of Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions to determine the best estimate of fair value. Revenue Recognition Sales are recognized when persuasive evidence of an arrangement exists, pricing is determinable, delivery has occurred based on applicable sales terms, and collection is reasonably assured. Sale terms are free on board (f.o.b.) shipping point or f.o.b. destination, depending upon local business customs. In regions where f.o.b. shipping point terms are utilized, sales are recorded at the time of shipment because this is when title and risk of loss are transferred. In regions where f.o.b. destination terms are utilized, sales are recorded when the products are delivered to the customer's delivery site, because this is when title and risk of loss are transferred. Furthermore, sales, provisions for estimated returns, and the cost of products sold are recorded at the time title transfers to customers and when the customers assume the risks and rewards of ownership. Actual product returns are charged against estimated sales return allowances. Sales rebates and discounts are common practices in the industries in which we operate. Volume, promotional, price, cash and other discounts and customer incentives are accounted for as a reduction to gross sales. Rebates and discounts are recorded based upon estimates at the time products are sold. These estimates are based on our historical experience for similar programs and products. We review these rebates and discounts on an ongoing basis and accruals for rebates and discounts are adjusted, if necessary, as additional information becomes available. Research and Development Research and development costs are related to research, design, and testing of new products and applications and are expensed as incurred. Long-Term Incentive Compensation No long-term incentive compensation expense was capitalized in 2016, 2015, or 2014. Changes in estimated forfeiture rates are recorded as cumulative adjustments in the period that the estimates are revised. Valuation of Stock-Based Awards Our stock-based compensation expense is based on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis over the requisite service period for stock options and restricted stock units ("RSUs"). Compensation expense for performance units ("PUs") is based on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis as these awards cliff-vest at the end of the requisite service period. The compensation expense related to market-leveraged stock units ("MSUs") is based on the fair value of awards, adjusted for estimated forfeitures, and amortized on a graded-vesting basis over their respective performance periods. Compensation expense for awards with a market condition as a performance objective, which includes PUs and MSUs, is not adjusted if the condition is not met, as long as the requisite service period is met. The fair value of stock options is estimated as of the date of grant using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate, and the expected option term. The fair value of RSUs and the component of PUs that is subject to the achievement of performance objectives based on a performance condition is determined based on the fair market value of our common stock as of the date of grant, adjusted for foregone dividends. The fair value of stock-based awards that are subject to achievement of performance objectives based on a market condition, which includes MSUs and the other component of PUs, is determined using the Monte-Carlo simulation model, which utilizes multiple input variables, including expected stock price volatility and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the target performance objectives established for the award. Certain of these assumptions are based on management's estimates, in consultation with outside specialists. Significant changes in assumptions for future awards and actual forfeiture rates could materially impact stock-based compensation expense and our results of operations. Valuation of Cash-Based Awards Cash-based awards consist of long-term incentive units ("LTI Units") granted to eligible employees. Cash-based awards are classified as liability awards and remeasured at each quarter-end over the applicable vesting or performance period. In addition to LTI Units with terms and conditions that mirror those of RSUs, we also grant certain employees LTI Units with terms and conditions that mirror those of PUs and MSUs. Accounting for Income Taxes for Stock-Based Compensation We use the short-cut method to calculate the historical pool of windfall tax benefits related to non-employee director and employee stock-based compensation awards. In addition, we follow the tax law ordering approach to determine the sequence in which deductions and net operating loss carryforwards are utilized, as well as the direct-only approach to calculate the amount of windfall or shortfall tax benefits. See also Note 12, "Long-term Incentive Compensation." Taxes Based on Income Our provision for income taxes is determined using the asset and liability approach following the provisions of ASC 740, Accounting for Income Taxe s. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets when uncertainty regarding their realizability exists. We recognize and measure our uncertain tax positions following the more likely than not threshold for financial statement recognition and measurement for tax positions taken or expected to be taken in a tax return. See also Note 14, "Taxes Based on Income." Recent Accounting Requirements In January 2017, the Financial Accounting Standards Board ("FASB") issued amended guidance that simplifies the subsequent measurement of goodwill. This amended guidance eliminates step two of the goodwill impairment test, and a goodwill impairment will be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted. While we are currently assessing the timing of our adoption of this guidance, we do not anticipate that its adoption will have a significant impact on our financial position, results of operations, cash flows, or disclosures. In January 2017, the FASB issued guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. While we are currently assessing the timing of our adoption of this guidance, we do not anticipate that its adoption will have a significant impact on our financial position, results of operations, cash flows, and disclosures. In October 2016, the FASB issued guidance that requires companies to recognize the income tax effects of intra-entity sales and transfers of assets other than inventory in the period in which the transfer occurs. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. The guidance requires modified retrospective adoption. We are currently assessing the timing of our adoption of this guidance and its impact on our financial position, results of operations, cash flows, and disclosures. In August 2016, the FASB issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified in the statement of cash flows. This guidance requires retrospective adoption and will be effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted. We are currently assessing the impact of this guidance on our cash flows. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2016, and early adoption is permitted. Different components of the guidance require prospective, retrospective and/or modified retrospective adoption. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures. In March 2016, the FASB issued guidance on accounting for leases that requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. This guidance also requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective approach is required for adoption with respect to all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures. In May 2014, and in subsequent updates, the FASB issued revised guidance on revenue recognition. This revised guidance provides a single comprehensive model for accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This revised guidance will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. This revised guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This revised guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and can be applied retrospectively either to each prior reporting period presented ("full retrospective") or with the cumulative effect of adoption recognized at the date of initial application ("modified retrospective"). Early adoption is permitted for fiscal periods beginning after December 15, 2016. We expect to adopt the new standard under the modified retrospective approach in the first quarter of 2018. Based on the information we have evaluated to date, we do not anticipate that the adoption of this revised guidance will have a significant impact on our financial position, results of operations, or cash flows. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2016 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 2. ACQUISITIONS On August 1, 2016, we completed the acquisition of the European business of Mactac ("Mactac") from Platinum Equity through the purchase of Evergreen Holding V, LLC. Mactac manufactures pressure-sensitive materials that primarily complement our existing graphics portfolio. The total consideration for this acquisition, net of cash received, was approximately $220 million, which we funded primarily through existing credit facilities. Due to the allowable time required to complete our assessment, the valuation of certain acquired assets and liabilities, including environmental liabilities and taxes, is currently pending. This acquisition was not material to our Consolidated Financial Statements. In December 2016, we announced our agreement to acquire Hanita Coatings, a pressure-sensitive manufacturer of specialty films and laminates, from Kibbutz Hanita Coatings and Tene Investment Funds for a purchase price of $75 million, subject to customary adjustments. We expect to complete this acquisition in the first quarter of 2017. In February 2017, we announced our agreement to acquire Yongle Tape Company Ltd. ("Yongle Tape"), a manufacturer of specialty tapes and related products used in a variety of industrial markets, from Yongle Tape's management and ShawKwei & Partners. The purchase price is $190 million, which is subject to customary adjustments, with an additional earn-out opportunity of up to $55 million to be paid based on the acquired business' achievement of certain performance targets over the next two years. We expect to complete this acquisition in mid-2017. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | |
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | NOTE 3. GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS Goodwill Results from our annual goodwill impairment test in the fourth quarter of 2016 indicated that no impairment occurred in 2016. The fair value of these assets was primarily based on Level 3 inputs. Changes in the net carrying amount of goodwill for 2016 and 2015 by reportable segment were as follows: (In millions) Label and Retail Industrial and Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of January 3, 2015 $ $ $ – $ Acquisition adjustments – (.4 ) – (.4 ) Translation adjustments ) ) – ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of January 2, 2016 – Acquired during the current period (1) – Transfer (2) – ) – Translation adjustments ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of December 31, 2016 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Goodwill acquired during the current period primarily related to the Mactac acquisition. (2) In connection with our operating structure changes in 2016, we allocated goodwill associated with our fastener solutions reporting unit from Retail Branding and Information Solutions ("RBIS") to Industrial and Healthcare Materials ("IHM") based on the relative fair values of our fastener solutions and RBIS reporting units. Prior to 2016, no reporting units within IHM had allocated goodwill. Refer to Note 1, "Summary of Significant Accounting Policies," for more information. The carrying amounts of goodwill at December 31, 2016 and January 2, 2016 were net of accumulated impairment losses of $820 million, which were included in our RBIS reportable segment. In connection with the Mactac acquisition, we recognized goodwill based on our expectation of synergies and other benefits of combining our businesses. These synergies and benefits include the use of our existing commercial infrastructure to expand sales of products of the acquired business in a cost-efficient manner. The amount of goodwill recognized is not expected to be deductible for income tax purposes. Indefinite-Lived Intangible Assets Results from our annual indefinite-lived intangible assets impairment test in the fourth quarter of 2016 indicated that no impairment occurred in 2016. The carrying value of indefinite-lived intangible assets resulting from business acquisitions, consisting of trade names and trademarks, was $20.3 million and $7.8 million at December 31, 2016 and January 2, 2016, respectively. In connection with the Mactac acquisition in 2016, we acquired approximately $13 million of indefinite-lived intangible assets, which consist of trade names. These intangible assets were not subject to amortization as they were classified as indefinite-lived assets. Finite-Lived Intangible Assets In connection with the Mactac acquisition in 2016, we acquired approximately $29 million of identifiable intangible assets, which consist of customer relationships and patents and other acquired technology. The table below summarizes the amounts and weighted useful lives of these intangible assets: Amount Weighted-average ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ Patents and other acquired technology ​ ​ ​ ​ ​ ​ ​ ​ The following table sets forth our finite-lived intangible assets resulting from business acquisitions at December 31, 2016 and January 2, 2016, which continue to be amortized: 2016 2015 (In millions) Gross Accumulated Net Gross Accumulated Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships (1) $ $ $ $ $ $ Patents and other acquired technology (1) Trade names and trademarks Other intangibles .2 .6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes respective finite-lived intangible assets acquired from the Mactac acquisition. Amortization expense from continuing operations for finite-lived intangible assets resulting from business acquisitions was $19.9 million for 2016, $20.5 million for 2015, and $24.4 million for 2014. The estimated amortization expense for finite-lived intangible assets resulting from business acquisitions for each of the next five fiscal years is expected to be as follows: (In millions) Estimated ​ ​ ​ ​ ​ 2017 $ 2018 2019 2020 2021 ​ ​ ​ ​ ​ |
DEBT AND CAPITAL LEASES
DEBT AND CAPITAL LEASES | 12 Months Ended |
Dec. 31, 2016 | |
DEBT AND CAPITAL LEASES | |
DEBT AND CAPITAL LEASES | NOTE 4. DEBT AND CAPITAL LEASES Short-Term Borrowings We had $44.5 million and $28 million of borrowings from U.S. commercial paper issuances outstanding at December 31, 2016 and January 2, 2016, respectively, with a weighted-average interest rate of .9% and .7%, respectively. In March 2016, we entered into an agreement to establish a Euro-Commercial Paper Program pursuant to which we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $500 million. Proceeds from issuances under this program may be used for general corporate purposes. The maturities of the notes may vary, but may not exceed 364 days from the date of issuance. Our payment obligations with respect to any notes issued under this program are backed by our revolving credit facility (the "Revolver"). There are no financial covenants under this program. As of December 31, 2016, $209 million was outstanding under this program. Short-Term Credit Facilities In October 2014, we amended and restated the Revolver, increasing the amount available from certain domestic and foreign banks from $675 million to $700 million. The amendment also extended the Revolver's maturity date from December 22, 2016 to October 3, 2019 and adjusted pricing to reflect favorable market conditions. The maturity date may be extended for additional one-year periods under certain circumstances. The commitments under the Revolver may be increased by up to $325 million, subject to lender approval and customary requirements. The Revolver is used as a back-up facility for our commercial paper program and can be used for other corporate purposes. No balances were outstanding under the Revolver as of December 31, 2016 or January 2, 2016. Commitment fees associated with the Revolver in 2016, 2015, and 2014 were $1.1 million, $1.9 million, and $1.3 million, respectively. In addition to the Revolver, we have significant short-term lines of credit available in various countries totaling approximately $300 million at December 31, 2016. These lines may be cancelled at any time by us or the issuing banks. Short-term borrowings outstanding under our lines of credit were $72.9 million and $65 million at December 31, 2016 and January 2, 2016, respectively, with a weighted-average interest rate of 6.5% and 8.7%, respectively. From time to time, certain of our subsidiaries provide guarantees on certain arrangements with banks. Our exposure to these guarantees is not material. Long-Term Borrowings and Capital Leases Long-term debt, including its respective interest rates, and capital lease obligations at year-end consisted of the following: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt and capital leases Medium-term notes: Series 1995 due 2020 through 2025 $ $ Long-term notes: Senior notes due 2017 at 6.6% Senior notes due 2020 at 5.4% Senior notes due 2023 at 3.4% Senior notes due 2033 at 6.0% Capital leases Less amount classified as current (1) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt and capital leases (2) $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) In 2016, we reclassified approximately $250 million of senior notes due on October 1, 2017 from long-term debt to current portion of long-term debt. (2) Includes unamortized debt issuance cost and debt discount of $3.6 million and $.4 million as of year-end 2016 and $4.4 million and $.5 million as of year-end 2015, respectively. At year-end 2016, our medium-term notes had maturities from 2020 through 2025 and accrued interest at a weighted-average fixed rate of 7.5%. Maturities of long-term debt and capital lease payments for each of the next five fiscal years and thereafter are expected to be as follows: Year (In millions) ​ ​ ​ ​ ​ 2017 (classified as current) $ 2018 2019 2020 2021 2022 and thereafter ​ ​ ​ ​ ​ The maturities of capital lease payments in the table above include $5 million of imputed interest, $1.1 million of which is expected to be paid in 2017. In May 2015, we extended and amended the lease on our Mentor, Ohio facility for an additional ten years. This facility is used primarily as the North American headquarters and research center of our Label and Graphic Materials business. Because ownership of the facility transfers to us at the end of the lease term, it was accounted for as a capital lease. The carrying value of the lease at December 31, 2016 was approximately $22 million, of which approximately $20 million was included in "Long-term debt and capital leases" and approximately $2 million was included in "Short-term borrowings and current portion of long-term debt and capital leases" in the Consolidated Balance Sheets at December 31, 2016. Other The Revolver contains financial covenants requiring that we maintain specified ratios of total debt and interest expense in relation to certain measures of income. As of December 31, 2016 and January 2, 2016, we were in compliance with our financial covenants. Our total interest costs from continuing operations in 2016, 2015, and 2014 were $63.5 million, $63.5 million, and $67.2 million, respectively, of which $3.6 million, $3 million, and $3.9 million, respectively, were capitalized as part of the cost of assets. The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities on notes with similar rates, credit ratings, and remaining maturities. The fair value of short-term borrowings, which includes commercial paper issuances and short-term lines of credit, approximates carrying value given the short duration of these obligations. The fair value of our total debt was $1.31 billion at December 31, 2016 and $1.08 billion at January 2, 2016. Fair value amounts were determined based primarily on Level 2 inputs, which are inputs other than quoted prices in active markets that are either directly or indirectly observable. Refer to Note 1, "Summary of Significant Accounting Policies," for more information. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | NOTE 5. FINANCIAL INSTRUMENTS As of December 31, 2016, the aggregate U.S. dollar equivalent notional value of our outstanding commodity contracts and foreign exchange contracts was $2.8 million and $1.55 billion, respectively. We recognize derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. We designate commodity forward contracts on forecasted purchases of commodities and foreign exchange contracts on forecasted transactions as cash flow hedges and designate foreign exchange contracts on existing balance sheet items as fair value hedges. The following table shows the fair value and balance sheet locations of derivatives as of December 31, 2016: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets .5 Other accrued liabilities – Commodity contracts Other assets .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table shows the fair value and balance sheet locations of derivatives as of January 2, 2016: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets – Other accrued liabilities .7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Hedges For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings, resulting in no material net impact to income. The following table shows the components of the net gains (losses) recognized in income related to fair value hedge contracts. The corresponding gains or losses on the underlying hedged items approximated the net gains (losses) on these fair value hedge contracts. (In millions) Location of Net Gains ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Cost of products sold $ $ $ ) Foreign exchange contracts Marketing, general and administrative expense ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flow Hedges For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of "Accumulated other comprehensive loss" and reclassified into earnings in the same period(s) during which the hedged transaction impacts earnings. Gains and losses on the derivatives, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in current earnings. Gains (losses), before taxes, recognized in "Accumulated other comprehensive loss" (effective portion) on derivatives related to cash flow hedge contracts were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts $ .2 $ (.1 ) $ Commodity contracts .6 (.7 ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ .8 $ (.8 ) $ .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The amounts recognized in income related to the ineffective portion of, and the amount excluded from, effectiveness testing for cash flow hedges and derivatives not designated as hedging instruments were immaterial in 2016, 2015, and 2014. As of December 31, 2016, we expected a net loss of approximately $2.6 million to be reclassified from "Accumulated other comprehensive loss" to earnings within the next 12 months. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended |
Dec. 31, 2016 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | NOTE 6. PENSION AND OTHER POSTRETIREMENT BENEFITS Defined Benefit Plans We sponsor a number of defined benefit plans, the accrual of benefits under some of which has been frozen, covering eligible employees in the U.S. and certain other countries. Benefits payable to an employee are based primarily on years of service and the employee's compensation during the course of his or her employment with us. We are also obligated to pay unfunded termination indemnity benefits to certain employees outside of the U.S., which are subject to applicable agreements, laws and regulations. We have not incurred significant costs related to these benefits, and, therefore, no related costs are included in the disclosures below. In December 2015, we offered eligible former employees who were vested participants in the Avery Dennison Pension Plan (the "ADPP"), our U.S. pension plan, the opportunity to receive their benefits immediately as either a lump-sum payment or an annuity, rather than waiting until they are retirement eligible under the terms of the plan. In the second quarter of 2016, approximately $70 million of pension obligations related to this plan were settled from existing plan assets and a non-cash pre-tax settlement charge of $41.4 million was recorded in "Other expense, net" in the Consolidated Statements of Income. This settlement required us to remeasure the remaining net pension obligations of the ADPP. As a result, we recognized approximately $72 million of additional net pension obligations with a corresponding increase in actuarial losses recorded in "Accumulated other comprehensive loss," primarily due to lower discount rates in effect when the plan was remeasured. Employees who participated in the ADPP between December 1, 1986 and November 30, 1997 may also have had a benefit in a Stock Holding and Retirement Enhancement Account ("SHARE Account") associated with our defined contribution plan. The ADPP is a floor offset plan that coordinated the amount of projected benefit obligation to an eligible participant with his or her SHARE Account such that the total benefit payable to an eligible participant would equal the greater of the value of the participant's benefit from the ADPP or the value of the participant's SHARE Account. Lower than expected asset returns on the participant balances in the SHARE Account could have increased the projected benefit obligation under the ADPP. In the fourth quarter of 2013, we amended our plan documents to require participants to make an early election either to (a) receive their assets in the SHARE Account as a distribution, in which case their retirement benefit under the ADPP would be offset by the annuity equivalent of these assets or (b) transfer their SHARE Account assets to the ADPP and receive the full ADPP retirement benefit in annuity form, rather than wait to make such election upon termination of employment. These amendments resulted in an actuarial loss of approximately $20 million to the ADPP in 2013. By October 2014, all participants with a SHARE Account completed their elections and the existing SHARE Accounts were terminated, which resulted in the recording of an additional actuarial loss of $12 million. These actuarial losses are subject to future amortization. Plan Assets Our investment management of the ADPP assets utilizes a liability driven investment (LDI) strategy. Under an LDI strategy, the assets are invested in a diversified portfolio that is split into a growth portfolio and a liability hedging portfolio. The growth portfolio consists primarily of equity and high-yield fixed income securities. The liability hedging portfolio consists primarily of investment grade fixed income securities and cash and is intended, over time, to more closely match the liabilities of the plan. The investment objective of the portfolio is to improve the funded status of the plan; as funded status reaches certain trigger points, the portfolio moves to a more conservative asset allocation by increasing the allocation to the liability hedging portfolio. The current target allocation is 65% in the growth portfolio and 35% in the liability hedging portfolio, subject to periodic fluctuations due to market movements. The plan assets are diversified across asset classes, striving to balance risk and return within the limits of prudent risk-taking and Section 404 of the Employee Retirement Income Security Act of 1974, as amended. Because many of the pension liabilities are long-term, the investment horizon is also long-term, but the investment plan must also ensure adequate near-term liquidity to fund benefit payments. Assets in our international plans are invested in accordance with locally accepted practices and primarily include equity securities, fixed income securities, insurance contracts and cash. Asset allocations and investments vary by country and plan. Our target plan asset investment allocation for our international plans combined is 38% in equity securities, 49% in fixed income securities and cash, and 13% in insurance contracts and other investments, subject to periodic fluctuations in these respective asset classes. Fair Value Measurements The following is a description of the valuation methodologies used for assets measured at fair value: Cash is valued at nominal value. Mutual funds are valued at fair value as determined by quoted market prices, based upon the net asset value ("NAV") of shares held at year-end. Pooled funds are structured as collective trusts, not publicly traded, and valued by calculating NAV per unit based on the NAV of the underlying funds/trusts as a practical expedient for the fair value of the pooled funds. Insurance contracts are valued at book value, which approximates fair value and is calculated using the prior year balance plus or minus investment returns and changes in cash flows. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following table sets forth, by level within the fair value hierarchy (as applicable), U.S. plan assets (all in the ADPP) at fair value: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Cash $ – $ – $ – $ – Pooled funds – liability hedging portfolio (1) Pooled funds – growth portfolio (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total U.S. plan assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Cash $ – $ – $ – $ – Pooled funds – liability hedging portfolio (1) Pooled funds – growth portfolio (1) Other assets (2) .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total U.S. plan assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Pooled funds that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to reconcile to total U.S. plan assets. (2) Includes accrued recoverable taxes. The following table sets forth, by level within the fair value hierarchy (as applicable), international plan assets at fair value: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Cash $ $ $ – $ – Insurance contracts – – Pooled funds – fixed income securities (1) Pooled funds – equity securities (1) Pooled funds – other investments (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total international plan assets at fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Cash $ .8 $ .8 $ – $ – Insurance contracts – – Pooled funds – fixed income securities (1) Pooled funds – equity securities (1) Pooled funds – other investments (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total international plan assets at fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Pooled funds that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to reconcile to total international plan assets. The following table presents a reconciliation of Level 3 international plan asset activity during the year ended December 31, 2016: Level 3 Assets (In millions) Insurance Contracts ​ ​ ​ ​ ​ Balance at January 2, 2016 $ Acquisition (1) Net realized and unrealized gain .5 Purchases Settlements ) Impact of changes in foreign currency exchange rates ) ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition completed in August 2016, we assumed plan assets associated with two defined benefit plans in Belgium. Postretirement Health Benefits We provide postretirement health benefits to certain retired U.S. employees up to the age of 65 under a cost-sharing arrangement and provide supplemental Medicare benefits to certain U.S. retirees over the age of 65. Our policy is to fund the cost of the postretirement benefits from operating cash flows. While we have not expressed any intent to terminate postretirement health benefits, we may do so at any time, subject to applicable laws and regulations. Plan Assumptions Discount Rate In consultation with our actuaries, we annually review and determine the discount rates used to value our postretirement obligations. The assumed discount rate for each pension plan reflects market rates for high quality corporate bonds currently available. Our discount rate is determined by evaluating yield curves consisting of large populations of high quality corporate bonds. The projected pension benefit payment streams are then matched with bond portfolios to determine a rate that reflects the liability duration unique to our plans. In 2016, we began using a full yield curve approach to estimate the service and interest cost components of net periodic benefit cost for our pension and other postretirement benefit plans. Under this approach, we applied multiple discount rates from a yield curve composed of the rates of return on several hundred high-quality, fixed income corporate bonds available at the measurement date. We believe this approach provides a more precise measurement of service and interest cost by aligning the timing of the plans' liability cash flows to the corresponding rates on the yield curve. Historically, we estimated the service and interest cost components using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Long-term Return on Assets We determine the long-term rate of return assumption for plan assets by reviewing the historical and expected returns of both the equity and fixed income markets, taking into account our asset allocation, the correlation between returns in our asset classes, and the mix of active and passive investments. Additionally, current market conditions, including interest rates, are evaluated and market data is reviewed for reasonableness and appropriateness. Healthcare Cost Trend Rate Our practice is to fund the cost of postretirement benefits from operating cash flows. For measurement purposes, a 7% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2017. This rate is expected to decrease to 5% by 2024. A one-percentage-point change in assumed health care cost trend rates would have the following effects: (In millions) One-percentage-point One-percentage-point ​ ​ ​ ​ ​ ​ ​ ​ Effect on total of service and interest cost components $ .01 $ (.01 ) Effect on postretirement benefit obligations .3 (.3 ) ​ ​ ​ ​ ​ ​ ​ ​ Measurement Date We measure the actuarial value of our benefit obligations and plan assets using the calendar month-end closest to our fiscal year-end and adjust for any contributions or other significant events between the measurement date and our fiscal year-end. Plan Balance Sheet Reconciliations The following table provides a reconciliation of benefit obligations, plan assets, funded status of the plans and accumulated other comprehensive loss for our defined benefit plans: Plan Benefit Obligations Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in projected benefit obligations Projected benefit obligations at beginning of year $ $ $ $ $ $ Service cost .4 .4 – – Interest cost .2 .2 Participant contribution – – .5 .8 Amendments – (.6 ) – (.7 ) – – Actuarial loss (gain) ) ) (.2 ) ) Plan transfers – – – – – Acquisition (1) – – – – – Benefits paid ) ) ) ) ) ) Curtailments – (.3 ) – ) – – Settlements (2) ) – – ) – – Foreign currency translation – ) – ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations at end of year $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated benefit obligations at end of year $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition completed in August 2016, we assumed benefit obligations associated with two defined benefit plans in Belgium. (2) In 2016, settlements were related to the lump-sum pension payments associated with the ADPP. Plan Assets Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets Plan assets at beginning of year $ $ $ $ $ – $ – Actual return on plan assets ) ) – – Plan transfers – – – (.3 ) – – Acquisition (1) – – – – – Employer contributions .9 .9 Participant contributions – – .5 .8 Benefits paid ) ) ) ) ) ) Settlements (2) ) – – ) – – Foreign currency translation – ) – ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at end of year $ $ $ $ $ – $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition completed in August 2016, we assumed plan assets associated with two defined benefit plans in Belgium. (2) In 2016, settlements were related to the lump-sum pension payments associated with the ADPP. Funded Status Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status of the plans Other accrued liabilities $ ) $ ) $ ) $ ) $ (.8 ) $ ) Long-term retirement benefits and other liabilities (1) ) ) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets less than benefit obligations $ ) $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In accordance with our funding strategy, we have the option to fund certain of these liabilities with proceeds from our corporate-owned life insurance policies. Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average assumptions used to determine year-end benefit obligations Discount rate % % % % % % % % % Compensation rate increase – – – – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For U.S. and international plans combined, the projected benefit obligations and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets were $1.80 billion and $1.26 billion, respectively, at year-end 2016 and $1.77 billion and $1.26 billion, respectively, at year-end 2015. For U.S. and international plans combined, the accumulated benefit obligations and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were $1.74 billion and $1.26 billion, respectively, at year-end 2016 and $1.38 billion and $910.9 million, respectively, at year-end 2015. Accumulated Other Comprehensive Loss The following table sets forth the pre-tax amounts recognized in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets: Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss $ $ $ $ $ $ Prior service cost (credit) ) ) ) ) Net transition obligation – .2 – .3 – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in accumulated other comprehensive loss $ $ $ $ $ $ .8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table sets forth the pre-tax amounts, including those of discontinued operations, recognized in "Other comprehensive loss (income)": Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss (gain) $ $ $ $ $ $ $ (.2 ) $ ) $ .3 Prior service (credit) cost – (.6 ) – (.7 ) – ) – – – Amortization of unrecognized: Net actuarial loss ) ) ) ) ) ) ) ) ) Prior service (cost) credit ) .4 ) .3 ) (.4 ) Net transition obligation – (.1 ) – – – – – – – Curtailments – – – .2 – (.6 ) – – – Settlements ) – – ) (.6 ) (.4 ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in other comprehensive (income) loss $ ) $ $ (.1 ) $ ) $ $ $ $ (.3 ) $ .8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan Income Statement Reconciliations The following table sets forth the components of net periodic benefit cost, which are recorded in income from continuing operations, for our defined benefit plans: Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost $ .4 $ $ .4 $ $ .4 $ $ – $ – $ – Interest cost .1 .3 .3 Actuarial (gain) loss (.2 ) – .4 – – – – – Expected return on plan assets ) ) ) ) ) ) – – – Amortization of actuarial loss Amortization of prior service cost (credit) (.4 ) (.3 ) .4 ) ) ) Amortization of transition obligation – .1 – – – – – – – Recognized (gain) loss on curtailments – (.2 ) – (.2 ) – .6 – – – Recognized loss on settlements (1) – – .6 .4 – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost (credit) $ $ $ $ $ $ $ ) $ (.8 ) $ (.2 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In 2016, we recognized a loss on settlements related to the ADPP as a result of making the lump-sum pension payments described above. In 2015, we recognized a loss on settlements related to pension plans in Germany and France as a result of the sale of a product line in our RBIS reportable segment. We also recognized a loss on settlements for events in Switzerland in 2015 and 2014. These losses on settlements were recorded in "Other expense, net" in Consolidated Statements of Income. The following table sets forth the weighted-average assumptions used to determine net periodic cost: Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate % % % % % % % % % Expected return on assets – – – Compensation rate increase – – – – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan Contributions We make contributions to our defined benefit plans sufficient to meet the minimum funding requirements of applicable laws and regulations, plus additional amounts, if any, we determine to be appropriate. The following table sets forth our expected contributions in 2017: (In millions) ​ ​ ​ ​ ​ U.S. $ Int'l U.S. postretirement health benefits .8 ​ ​ ​ ​ ​ Future Benefit Payments Anticipated future benefit payments, which reflect expected service periods for eligible participants, were as follows: Pension Benefits U.S. Postretirement (In millions) U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 $ $ $ .8 2018 .5 2019 .5 2020 .4 2021 .4 2022 - 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Amortization Amounts in Accumulated Other Comprehensive Loss Our estimates of fiscal year 2017 amortization of amounts included in "Accumulated other comprehensive loss" were as follows: Pension U.S. Postretirement (In millions) U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss $ $ $ Prior service cost (credit) .9 (.4 ) ) Net transition obligation – .1 – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss (gain) to be recognized $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined Contribution Plans We sponsor various defined contribution plans worldwide, the largest of which is the Avery Dennison Corporation Employee Savings Plan ("Savings Plan"), a 401(k) plan for our U.S. employees. We recognized expense from continuing operations of $20 million, $20.2 million, and $19.4 million in 2016, 2015, and 2014, respectively, related to our employer contributions and employer match of participant contributions to the Savings Plan. Other Retirement Plans We have deferred compensation plans which permit eligible employees and directors to defer a portion of their compensation. The compensation voluntarily deferred by the participant, together with certain employer contributions, earns specified and variable rates of return. As of year-end 2016 and 2015, we had accrued $78.7 million and $77.9 million, respectively, for our obligations under these plans. A portion of the interest on certain of our contributions may be forfeited by participants if their employment terminates before age 55 other than by reason of death or disability. Our Directors Deferred Equity Compensation Plan allows our non-employee directors to elect to receive their cash compensation in deferred stock units ("DSUs") issued under our stock option and incentive plan. Dividend equivalents, representing the value of dividends per share paid on shares of our common stock and calculated with reference to the number of DSUs held as of a quarterly dividend record date, are credited in the form of additional DSUs on the applicable payable date. A director's DSUs are converted into shares of our common stock upon his or her resignation or retirement. Approximately .1 million DSUs were outstanding as of year-end 2016 and 2015, with an aggregate value of $10.2 million and $8 million, respectively. We hold corporate-owned life insurance policies, the proceeds from which are payable to us upon the death of covered participants. The cash surrender values of these policies, net of outstanding loans, which are included in "Other assets" in the Consolidated Balance Sheets, were $230.6 million and $227.1 million at year-end 2016 and 2015, respectively. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS | |
COMMITMENTS | NOTE 7. COMMITMENTS Minimum annual rental commitments on operating leases having initial or remaining non-cancelable lease terms of one year or more are as follows: Year (In millions) ​ ​ ​ ​ ​ 2017 $ 2018 2019 2020 2021 2022 and thereafter ​ ​ ​ ​ ​ Total minimum lease payments $ ​ ​ ​ ​ ​ Rent expense for operating leases from continuing operations was approximately $58 million in both 2016 and 2015 and $67 million in 2014. Operating leases primarily relate to office and warehouse space and equipment for information technology, machinery, and transportation. The terms of these leases do not impose significant restrictions or unusual obligations. Refer to Note 4, "Debt and Capital Leases," for information on capital lease obligations. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
CONTINGENCIES | |
CONTINGENCIES | NOTE 8. CONTINGENCIES Legal Proceedings We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. Because of the uncertainties associated with claims resolution and litigation, future expenses to resolve these matters could be higher than the liabilities we have accrued; however, we are unable to reasonably estimate a range of potential expenses. If information were to become available that allowed us to reasonably estimate a range of potential expenses in an amount higher or lower than what we have accrued, we would adjust our accrued liabilities accordingly. Additional lawsuits, claims, inquiries, and other regulatory and compliance matters could arise in the future. The range of expenses for resolving any future matters would be assessed as they arise; until then, a range of potential expenses for such resolution cannot be determined. Based upon current information, we believe that the impact of the resolution of these matters would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows. Environmental Expenditures Environmental expenditures are generally expensed. However, environmental expenditures for newly acquired assets and those which extend or improve the economic useful life of existing assets are capitalized and amortized over the shorter of the estimated useful life of the acquired asset or the remaining life of the existing asset. We review our estimates of costs of compliance with environmental laws related to remediation and cleanup of various sites, including sites in which governmental agencies have designated us as a potentially responsible party ("PRP"). When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. Potential insurance reimbursements are not offset against potential liabilities. As of December 31, 2016, we have been designated by the U.S. Environmental Protection Agency ("EPA") and/or other responsible state agencies as a PRP at thirteen waste disposal or waste recycling sites that are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination. No settlement of our liability related to any of the sites has been agreed upon. We are participating with other PRPs at these sites and anticipate that our share of remediation costs will be determined pursuant to agreements that we negotiate with the EPA or other governmental authorities. These estimates could change as a result of changes in planned remedial actions, remediation technologies, site conditions, the estimated time to complete remediation, environmental laws and regulations, and other factors. Because of the uncertainties associated with environmental assessment and remediation activities, future expenses to remediate these sites could be higher than the liabilities we have accrued; however, we are unable to reasonably estimate a range of potential expenses. If information were to become available that allowed us to reasonably estimate a range of potential expenses in an amount higher or lower than what we have accrued, we would adjust our environmental liabilities accordingly. In addition, we may be identified as a PRP at additional sites in the future. The range of expenses for remediation of any future-identified sites would be addressed as they arise; until then, a range of expenses for such remediation cannot be determined. The activity in 2016 and 2015 related to our environmental liabilities was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Balance at beginning of year $ $ Charges (reversals), net Payments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2016 and January 2, 2016, approximately $8 million and $7 million, respectively, of the balance was classified as short-term and included in "Other accrued liabilities" in the Consolidated Balance Sheets. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 9. FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of December 31, 2016: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Trading securities $ $ $ $ – Derivative assets .6 – Bank drafts – – Liabilities Derivative liabilities $ $ – $ $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of January 2, 2016: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Trading securities $ $ $ $ – Derivative assets – – Bank drafts – – Liabilities Derivative liabilities $ $ .7 $ $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trading securities include fixed income securities (primarily U.S. government and corporate debt securities) measured at fair value using quoted prices/bids and a money market fund measured at fair value using NAV. As of December 31, 2016, trading securities of $.5 million and $17.6 million were included in "Cash and cash equivalents" and "Other current assets," respectively, in the Consolidated Balance Sheets. As of January 2, 2016, trading securities of $.3 million and $17.6 million were included in "Cash and cash equivalents" and "Other current assets," respectively, in the Consolidated Balance Sheets. Derivatives that are exchange-traded are measured at fair value using quoted market prices and classified within Level 1 of the valuation hierarchy. Derivatives measured based on foreign exchange rate inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy. Bank drafts (maturities greater than three months) are valued at face value due to their short-term nature and were included in "Other current assets" in the Consolidated Balance Sheets. We utilized an income approach to estimate the fair values of the identifiable intangibles acquired from Mactac, using primarily Level 3 inputs. The discount rates we used to value these assets were between 10.5% and 12.5%. |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2016 | |
NET INCOME PER COMMON SHARE | |
NET INCOME PER COMMON SHARE | NOTE 10. NET INCOME PER COMMON SHARE Net income per common share was computed as follows: (In millions, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (A) Income from continuing operations $ $ $ (B) Loss from discontinued operations, net of tax – (.1 ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (C) Net income available to common shareholders $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (D) Weighted average number of common shares outstanding Dilutive shares (additional common shares issuable under stock-based awards) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (E) Weighted average number of common shares outstanding, assuming dilution ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per common share: Continuing operations (A) ÷ (D) $ $ $ Discontinued operations (B) ÷ (D) – – (.03 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share (C) ÷ (D) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per common share, assuming dilution: Continuing operations (A) ÷ (E) $ $ $ Discontinued operations (B) ÷ (E) – – (.02 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share, assuming dilution (C) ÷ (E) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certain stock-based compensation awards were not included in the computation of net income per common share, assuming dilution, because they would not have had a dilutive effect. Stock-based compensation awards excluded from the computation totaled approximately .2 million shares in 2016, 1 million shares in 2015, and 3 million shares in 2014. |
SUPPLEMENTAL EQUITY AND COMPREH
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | |
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | NOTE 11. SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION Common Stock and Share Repurchase Program Our Certificate of Incorporation authorizes five million shares of $1 par value preferred stock (of which none are outstanding), with respect to which our Board of Directors ("Board") may fix the series and terms of issuance, and 400 million shares of $1 par value voting common stock. From time to time, our Board authorizes the repurchase of shares of our outstanding common stock. Repurchased shares may be reissued under our stock option and incentive plan or used for other corporate purposes. In 2016, we repurchased approximately 3.8 million shares of our common stock at an aggregate cost of $262.4 million. On December 4, 2014, our Board authorized the repurchase of shares of our common stock in the aggregate amount of up to $500 million (exclusive of any fees, commissions, or other expenses related to such purchases), in addition to any outstanding shares authorized under any previous Board authorization. This authorization is the only one currently in effect and it will remain in effect until shares in the amount authorized have been repurchased. As of December 31, 2016, shares of our common stock in the aggregate amount of approximately $105 million remained authorized for repurchase under this Board authorization. Treasury Shares Reissuance We fund a portion of our employee-related expenses using shares of our common stock held in treasury. We record net gains or losses associated with our use of treasury shares to retained earnings. Other Comprehensive Income The changes in "Accumulated other comprehensive loss" (net of tax) for 2016 and 2015 were as follows: (In millions) Foreign Pension and Cash Flow Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 3, 2015 $ ) $ ) $ – $ ) Other comprehensive loss before reclassifications, net of tax ) ) (.5 ) ) Reclassifications to net income, net of tax – ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income, net of tax ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 2, 2016 $ ) $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications, net of tax ) ) .7 ) Reclassifications to net income, net of tax – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income, net of tax ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2016 $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The amounts reclassified from "Accumulated other comprehensive loss" to increase (decrease) income from continuing operations were as follows: (In millions) Affected Line Item in the ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flow hedges: Foreign exchange contracts $ ) $ $ ) Cost of products sold Commodity contracts (.7 ) ) .1 Cost of products sold Interest rate contracts (.1 ) (.1 ) (.1 ) Interest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Total before tax (.5 ) .3 Provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) (.9 ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension and other postretirement benefits (1) ) ) ) Provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassifications for the period $ ) $ ) $ ) Total, net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) See Note 6, "Pension and Other Postretirement Benefits," for more information. The following table sets forth the income tax (benefit) expense allocated to each component of other comprehensive loss: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension and other postretirement benefits: Net loss recognized from actuarial gain/loss and prior service cost/credit $ ) $ ) $ ) Reclassifications to net income Cash flow hedges: Gains (losses) recognized on cash flow hedges .1 (.3 ) .1 Reclassifications to net income (.5 ) .3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit related to items of other comprehensive loss $ (.5 ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
LONG-TERM INCENTIVE COMPENSATIO
LONG-TERM INCENTIVE COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
LONG-TERM INCENTIVE COMPENSATION | |
LONG-TERM INCENTIVE COMPENSATION | NOTE 12. LONG-TERM INCENTIVE COMPENSATION Equity Awards Stock-Based Compensation We maintain various stock option and incentive plans and grant our annual stock-based compensation awards to eligible employees in February and non-employee directors in May. Certain awards granted to retirement-eligible employees vest in full upon retirement; awards to these employees are accounted for as fully vested on the date of grant. Stock-based compensation expense from continuing operations and the total related recognized tax benefit were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense $ $ $ Tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ This expense was included in "Marketing, general and administrative expense" in the Consolidated Statements of Income. As of December 31, 2016, we had approximately $37 million of unrecognized compensation expense from continuing operations related to unvested stock-based awards, which is expected to be recognized over the remaining weighted-average requisite service period of approximately two years. Stock Options Stock options granted to non-employee directors and employees may be granted at no less than 100% of the fair market value of our common stock on the date of the grant. Options generally vest ratably over a three-year period for non-employee directors and over a four-year period for employees. Options expire ten years from the date of grant. The fair value of stock options is estimated as of the date of grant using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate and the expected option term. The following assumptions are used in estimating the fair value of granted stock options: Risk-free interest rate is based on the 52-week average of the Treasury-Bond rate that has a term corresponding to the expected option term. Expected stock price volatility represents an average of the implied and historical volatility. Expected dividend yield is based on the current annual dividend divided by the 12-month average of our monthly stock price prior to grant. Expected option term is determined based on historical experience under our stock option and incentive plans. The weighted-average grant date fair value per share for stock options granted in 2016 was $14.17. No stock options were granted in fiscal years 2015 and 2014. The underlying weighted-average assumptions used were as follows: ​ ​ ​ ​ ​ Risk-free interest rate % Expected stock price volatility % Expected dividend yield % Expected option term 6.5 years ​ ​ ​ ​ ​ The following table sets forth stock option information during 2016: Number Weighted-average Weighted-average Aggregate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 2, 2016 $ $ Granted Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2016 $ $ Options vested and expected to vest at December 31, 2016 Options exercisable at December 31, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total intrinsic value of stock options exercised was $31.7 million in 2016, $43.3 million in 2015, and $15.4 million in 2014. We received approximately $71 million in 2016, $104 million in 2015, and $34.2 million in 2014 from the exercise of stock options. The tax benefit associated with these exercised options was $11.3 million in 2016, $15.6 million in 2015, and $5.3 million in 2014. The intrinsic value of a stock option is based on the amount by which the market value of the underlying stock exceeds the exercise price of the option. Performance Units ("PUs") PUs are performance-based awards granted to eligible employees under our stock option and incentive plan. PUs are payable in shares of our common stock at the end of a three-year cliff vesting period provided that certain performance objectives are achieved at the end of the period. Over the performance period, the estimated number of shares of our common stock issuable upon vesting is adjusted upward or downward based upon the probability of the achievement of the performance objectives established for the award. The actual number of shares issued can range from 0% to 200% of the target shares at the time of grant. The weighted-average grant date fair value for PUs was $68.04, $51.37, and $47.85 in 2016, 2015, and 2014, respectively. The following table summarizes information related to awarded PUs: Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at January 2, 2016 $ Granted at target Adjustment for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects awards granted in excess of target as a result of our achieving above-target performance for the 2013-2015 performance period. The fair value of vested PUs was $13.8 million in 2016 and $12.2 million in 2015. In 2014, the PUs granted in 2011 were cancelled as the performance objective was not met as of the end of the three-year performance period. Market-Leveraged Stock Units ("MSUs") MSUs are performance-based awards granted to eligible employees under our stock option and incentive plan. MSUs are payable in shares of our common stock over a four-year period provided that the performance objective is achieved as of the end of each vesting period. MSUs accrue dividend equivalents during the vesting period, which are earned and paid only at vesting provided that, at a minimum, threshold performance is achieved. The number of shares earned is based upon our absolute total shareholder return at each vesting date and can range from 0% to 200% of the target amount of MSUs subject to vesting. Each of the four vesting periods represents one tranche of MSUs and the fair value of each of these four tranches was determined using the Monte-Carlo simulation model, which utilizes multiple input variables, including expected stock price volatility and other assumptions, to estimate the probability of achieving the performance objective established for the award. The weighted-average grant date fair value for MSUs was $72.93, $56.46, and $52.76 in 2016, 2015, and 2014, respectively. The following table summarizes information related to awarded MSUs: Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at January 2, 2016 $ Granted at target Adjustments for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects adjustments as a result of achieving above-target performance for each of the performance periods paid out in 2016. The fair value of vested MSUs was $12.4 million in 2016, $9.8 million in 2015, and $5.6 million in 2014. Restricted Stock Units ("RSUs") RSUs are service-based awards granted to eligible employees under our stock option and incentive plan, which generally vest ratably over a period of three years for non-employee directors and four years for employees provided that directorship or employment continues through the applicable vesting date. If that condition is not met, unvested RSUs are generally forfeited. The weighted-average grant date fair value for RSUs was $67.66, $53.29, and $45.91 in 2016, 2015, and 2014, respectively. The following table summarizes information related to awarded RSUs: Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at January 2, 2016 $ Granted Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of vested RSUs was $5.3 million, $8.4 million, and $9.5 million in 2016, 2015, and 2014, respectively. Cash Awards Long-Term Incentive Units ("LTI Units") LTI Units are granted to eligible employees under our long-term incentive unit plan. LTI Units are service-based awards that generally vest ratably over a four-year period. The settlement value equals the number of vested LTI Units multiplied by the average of the high and low market prices of our common stock on the vesting date. The compensation expense related to these awards is amortized on a straight-line basis and the fair value is remeasured using the estimated percentage of units expected to be earned multiplied by the average of the high and low market prices of our common stock at each quarter-end. We also grant cash-based awards in the form of performance and market-leveraged LTI Units to eligible employees. Performance LTI Units are payable in cash at the end of a three-year cliff vesting period provided that certain performance objectives are achieved at the end of the performance period. Market-leveraged LTI Units are payable in cash and vest ratably over a period of four years. The number of performance and market-leveraged LTI Units earned at vesting is adjusted upward or downward based upon the probability of achieving the performance objectives established for the respective award and the actual number of units issued can range from 0% to 200% of the target units subject to vesting. The performance and market-leveraged LTI Units are remeasured using the estimated percentage of units expected to be earned multiplied by the average of the high and low market prices of our common stock at each quarter-end over their respective performance periods. The compensation expense related to performance LTI Units is amortized on a straight-line basis over their respective performance periods. The compensation expense related to market-leveraged LTI Units is amortized on a graded-vesting basis over their respective performance periods. The compensation expense from continuing operations related to LTI Units was $23.8 million in 2016, $27.1 million in 2015, and $17.8 million in 2014. This expense was included in "Marketing, general and administrative expense" in the Consolidated Statements of Income. The total recognized tax benefit related to LTI Units was $7.8 million in 2016, $8.6 million in 2015, and $5.7 million in 2014. |
COST REDUCTION ACTIONS
COST REDUCTION ACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
COST REDUCTION ACTIONS | |
COST REDUCTION ACTIONS | NOTE 13. COST REDUCTION ACTIONS Restructuring Charges We have compensation plans that provide eligible employees with severance in the event of an involuntary termination due to qualifying cost reduction actions. We calculate severance using benefit formulas under the respective plans. Accordingly, we record provisions for severance and other exit costs (including asset impairment charges and lease and other contract cancellation costs) when they are probable and estimable. In the absence of a plan or established local practice in overseas jurisdictions, liabilities for restructuring charges are recognized when incurred. 2015/2016 Actions During fiscal year 2016, we recorded $20.9 million in restructuring charges, net of reversals, related to restructuring actions initiated during the third quarter of 2015 ("2015/2016 Actions") that we expect to continue through 2017. These charges consisted of severance and related costs for the reduction of approximately 440 positions, lease cancellation costs, and asset impairment charges. During fiscal year 2015, we recorded $26.1 million in restructuring charges, net of reversals, related to our 2015/2016 Actions. These charges consisted of severance and related costs for the reduction of approximately 430 positions, lease cancellation costs, and asset impairment charges. No employees impacted by our 2015/2016 Actions taken through December 31, 2016 remained employed by us as of such date. 2014/2015 Actions During fiscal year 2015, we recorded $33.4 million in restructuring charges, net of reversals, related to restructuring actions we initiated in 2014 that continued through the second quarter of 2015 ("2014/2015 Actions"). These charges consisted of severance and related costs for the reduction of approximately 605 positions, lease cancellation costs, and asset impairment charges. During fiscal year 2014, we recorded $66.5 million in restructuring charges, net of reversals, related to our 2014/2015 Actions. These charges consisted of severance and related costs for the reduction of approximately 1,420 positions, lease cancellation costs, and asset impairment charges. No employees impacted by our 2014/2015 Actions remained employed by us as of December 31, 2016. Accruals for severance and related costs and lease cancellation costs were included in "Other accrued liabilities" in the Consolidated Balance Sheets. Asset impairment charges were based on the estimated market value of the assets, less selling costs, if applicable. Restructuring charges in continuing operations were included in "Other expense, net" in the Consolidated Statements of Income. During 2016, restructuring charges and payments were as follows: (In millions) Accrual at Charges Cash Non-cash Foreign Accrual at ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015/2016 Actions Severance and related costs $ $ $ ) $ – $ .1 $ Asset impairment charges – – ) – – Lease cancellation costs .2 ) – – .2 2014/2015 Actions Severance and related costs (.9 ) ) – – .7 Prior actions Severance and related costs .7 (.1 ) – – – .6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ .1 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During 2015, restructuring charges and payments were as follows: (In millions) Accrual at Charges Cash Non-cash Foreign Accrual at ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015/2016 Actions Severance and related costs $ – $ $ ) $ – $ – $ Asset impairment charges – – ) – – Lease cancellation costs – .5 (.3 ) – – .2 2014/2015 Actions Severance and related costs ) – (.9 ) Asset impairment charges – – ) – – Lease cancellation costs .1 .3 (.4 ) – – – Prior actions Severance and related costs .8 – – – (.1 ) .7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The table below shows the total amount of restructuring charges incurred by reportable segment and Corporate: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restructuring charges by reportable segment and Corporate Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials .9 Corporate – .4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
TAXES BASED ON INCOME
TAXES BASED ON INCOME | 12 Months Ended |
Dec. 31, 2016 | |
TAXES BASED ON INCOME | |
TAXES BASED ON INCOME | NOTE 14. TAXES BASED ON INCOME Taxes based on income (loss) were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current: U.S. federal tax $ $ $ State taxes .6 (.1 ) (.2 ) International taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: U.S. federal tax ) State taxes ) .5 International taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The principal items accounting for the difference between taxes computed at the U.S. statutory rate and taxes recorded were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Computed tax at 35% of income before taxes $ $ $ Increase (decrease) in taxes resulting from: State taxes, net of federal tax benefit Foreign earnings taxed at different rates (1) ) ) Valuation allowance ) .9 Corporate-owned life insurance ) ) ) U.S. federal research and development tax credits ) ) ) Tax contingencies and audit settlements ) ) Other items, net – ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Included foreign earnings taxed in the U.S., net of credits, in all years. Income (loss) from continuing operations before taxes from our U.S. and international operations was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. $ $ $ (.1 ) International ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The effective tax rate for continuing operations was 32.8%, 32.9%, and 31.5% for fiscal years 2016, 2015, and 2014, respectively. The 2016 effective tax rate for continuing operations included a tax expense of $7.6 million associated with the cost to repatriate non-permanently reinvested current earnings of certain foreign subsidiaries and a tax expense of $46.3 million related to the U.S. income and foreign withholding taxes resulting from changes in indefinite reinvestment assertions on certain foreign earnings; benefits from changes in certain tax reserves, including interest and penalties, of $16.8 million resulting from settlements of certain foreign audits and $5.4 million resulting from expirations of statutes of limitations; benefits of $6.7 million from the release of valuation allowances against certain deferred tax assets in a foreign jurisdiction associated with a structural simplification approved by the tax authority and $3.6 million from the release of valuation allowances on certain state deferred tax assets; and a tax expense of $8.4 million from deferred tax adjustments resulting from enacted tax rate changes in certain foreign jurisdictions. We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets. On the basis of this evaluation, we record valuation allowances only with respect to the portion of the deferred tax asset that is more likely than not to be realized. However, the amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income during the carryforward period changes or if objective negative evidence in the form of cumulative losses is no longer present. For example, if our U.S. profitability improves at a higher-than-expected rate, it is possible that the remaining valuation allowances on state deferred tax assets could be subject to further releases. In connection with our initiatives to simplify our corporate legal entity and intercompany financing structures, we evaluated the facts and circumstances surrounding the indefinite reinvestment assertions on certain foreign earnings that would be affected as a result of our actions to improve structural and operational efficiency. Our evaluation considered working capital, long-term liquidity, capitalization improvement, acquisition plans, and alignment of the existing structure with long-term strategic plans. As a result of this evaluation, we determined that the excess of the amount for financial reporting over the tax basis of investments in certain foreign subsidiaries is subject to reversal in the foreseeable future. As a result, we recorded a tax provision for the effects of changes in indefinite reinvestment assertions in 2016. The 2015 effective tax rate for continuing operations included tax expense of $20 million associated with the tax cost to repatriate non-permanently reinvested 2015 earnings of certain foreign subsidiaries; benefits from changes in certain tax reserves, including interest and penalties, of $5.8 million resulting from settlements of audits and $8.2 million resulting from expirations of statutes of limitations; and a tax benefit of $2.6 million from the extension of the federal research and development credit. The 2014 effective tax rate for continuing operations included tax benefits for changes in certain tax reserves, including interest and penalties, of $10.2 million resulting from settlements of audits and $18.1 million resulting from expirations of statutes of limitations; a repatriation tax benefit of $9.8 million related to certain foreign losses; a tax expense of $9.1 million from the taxable inclusion of a net foreign currency gain related to the revaluation of certain intercompany loans; a tax expense of $10.6 million related to our change in estimate of the potential outcome of uncertain tax issues in China and Germany; and a state tax expense of $2.5 million primarily related to gains arising as a result of certain foreign reorganizations. On December 18, 2015, the Protecting Americans from Tax Hikes Act of 2015 ("PATH Act") was enacted, which included a provision making permanent the federal research and development tax credit for the tax years 2015 and beyond. The PATH Act also retroactively extended the controlled foreign corporation ("CFC") look-through rule that had expired on December 31, 2014. For periods during which the look-through rule was effective, U.S. federal income tax on certain dividends, interest, rents, and royalties received or accrued by a CFC of a U.S. multinational enterprise from a related CFC are deferred. The retroactive effects of the extension of the CFC look-through rule did not have a material impact on our effective tax rate or operating results. The extension of the CFC look-through rule is currently scheduled to expire on December 31, 2019. Due to recent changes in the U.S. government, U.S. tax reform may be enacted in the near future. Significant changes that could occur include a reduction of the corporate income tax rate, a one-time deemed repatriation of untaxed foreign earnings, border adjustability, territoriality, and various increases to the tax base. Due to the lack of clarity regarding if, how, and when any such tax reform will be enacted, the potential impact of U.S. tax reform is unclear. We continue to closely monitor these developments. Deferred income taxes for approximately $1.9 billion of undistributed earnings of foreign subsidiaries have not been provided as of December 31, 2016 since these amounts are intended to be indefinitely reinvested in foreign operations. It is not practicable to calculate the deferred taxes associated with these earnings because of the variability of multiple factors that would need to be assessed at the time of any assumed repatriation; however, foreign tax credits would likely be available to reduce federal income taxes in the event of distribution. In making this assertion, we evaluate, among other factors, the profitability of our U.S. and foreign operations and the need for cash within and outside the U.S., including cash requirements for capital improvements, acquisitions, market expansion, dividends, and stock repurchases. Deferred income taxes reflect the temporary differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts utilized for tax purposes. The primary components of the temporary differences that gave rise to our deferred tax assets and liabilities were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Accrued expenses not currently deductible $ $ Net operating losses Tax credit carryforwards Stock-based compensation Pension and other postretirement benefits Inventory reserves Other assets .9 Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets (1) ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ) ) Repatriation accrual (2) ) ) Foreign operating loss recapture ) ) Other liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities (1) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflect gross amounts before jurisdictional netting of deferred tax assets and liabilities. (2) Included in the repatriation accruals as of December 31, 2016 and January 2, 2016 was a net deferred tax liability of $62.4 million and $12.5 million, respectively, associated with the future tax cost to repatriate non-permanently reinvested earnings of our foreign subsidiaries, which is offset by a contra deferred tax liability of $.3 million and $2.7 million, respectively, related to unrealized foreign exchange losses associated with earnings of our foreign subsidiaries that can be repatriated to the U.S. in future periods without incurring any additional U.S. federal income tax. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. The valuation allowance at December 31, 2016 and January 2, 2016 was $60.4 million and $73 million, respectively. Net operating loss carryforwards of foreign subsidiaries at December 31, 2016 and January 2, 2016 were $689.9 million and $825.8 million, respectively. Tax credit carryforwards of both domestic and foreign subsidiaries at December 31, 2016 and January 2, 2016 totaled $111.3 million and $114.4 million, respectively. If unused, foreign net operating losses and tax credit carryforwards will expire as follows: (In millions) Net Operating (1) Tax Credits ​ ​ ​ ​ ​ ​ ​ ​ Expires in 2017 $ $ .6 Expires in 2018 Expires in 2019 Expires in 2020 Expires in 2021 .4 Expires in 2022 Expires in 2023 Expires in 2024 .3 Expires in 2025 Expires in 2026 .5 Expires in 2027 .2 .2 Expires in 2028 .5 .1 Expires in 2029 – .1 Expires in 2030 – .1 Expires in 2031 – .1 Expires in 2032 – Expires in 2033 – Expires in 2034 – Expires in 2035 – Expires in 2036 – Indefinite life/no expiration ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Net operating losses are presented before tax effect and valuation allowance. Based on current projections, certain indefinite-lived foreign net operating losses may take up to 50 years to be fully utilized. At December 31, 2016, we had net operating loss carryforwards in certain state jurisdictions of $516 million before tax effect. Based on our current ability to generate state taxable income, it is more likely than not that the majority of these carryforwards will not be realized before they expire. Accordingly, a valuation allowance has been recorded on $513.7 million of the carryforwards. We do not anticipate the expected expiration of our remaining tax holidays in Thailand and Vietnam in 2017 to have a material effect on our effective tax rate, operating results, or financial condition. Unrecognized Tax Benefits As of December 31, 2016, our unrecognized tax benefits totaled $89.5 million, $71.5 million of which, if recognized, would reduce our annual effective income tax rate. As of January 2, 2016, our unrecognized tax benefits totaled $107.3 million, $89 million of which, if recognized, would reduce our annual effective income tax rate. Where applicable, we record potential accrued interest and penalties related to unrecognized tax benefits from our global operations in income tax expense. As a result, we recognized tax benefit of $3.1 million, tax expense of $1.3 million, and tax benefit of $1.3 million in the Consolidated Statements of Income in 2016, 2015, and 2014, respectively. We have accrued $22.3 million and $26.1 million for interest and penalties, net of tax benefit, in the Consolidated Balance Sheets at December 31, 2016 and January 2, 2016, respectively. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is set forth below: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Balance at beginning of year $ $ Additions for tax positions of the current year Reductions for tax positions of prior years ) ) Settlements with tax authorities ) ) Expirations of statutes of limitations ) ) Changes due to translation of foreign currencies ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ The amount of income taxes we pay is subject to ongoing audits by taxing jurisdictions around the world. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts, and circumstances existing at the time. We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate. As of the date the 2016 financial statements are being issued, we and our U.S. subsidiaries have completed the Internal Revenue Service's Compliance Assurance Process Program through 2015. We also expect the current German tax audit for tax years 2006-2010 to be completed in 2017. We are subject to routine tax examinations in other jurisdictions. With some exceptions, we and our subsidiaries are no longer subject to income tax examinations by tax authorities for years prior to 2006. It is reasonably possible that, during the next 12 months, we may realize a decrease in our uncertain tax positions, including interest and penalties, of approximately $16 million, primarily as a result of audit settlements and closing tax years. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 15. SEGMENT INFORMATION Segment Reporting We have the following reportable segments: • Label and Graphic Materials – manufactures and sells pressure-sensitive labeling technology and materials and films for graphic and reflective applications; • Retail Branding and Information Solutions – designs, manufactures and sells a wide variety of branding and information products and services, including brand and price tickets, tags and labels (including RFID inlays), and related services, supplies and equipment; and • Industrial and Healthcare Materials – manufactures performance tapes, fastener solutions, and an array of pressure-sensitive adhesive products for various medical applications. Intersegment sales are recorded at or near market prices and are eliminated in determining consolidated sales. We evaluate performance based on income from operations before interest expense and taxes. General corporate expenses are also excluded from the computation of income from operations for the segments. We do not disclose total assets by reportable segment since we neither generate nor review such information internally. As our reporting structure is not organized or reviewed internally by country, results by individual country are not provided. Financial information from continuing operations by reportable segment is set forth below: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intersegment sales Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intersegment sales $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before taxes Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials Corporate expense ) ) ) Interest expense ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net by reportable segment Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials Corporate .4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net by type Restructuring charges: Severance and related costs $ $ $ Asset impairment charges and lease and other contract cancellation costs Other items: Net loss from curtailment and settlement of pension obligations .3 Net gains on sales of assets ) ) ) Transaction costs – – Legal settlements – (.3 ) – Loss on sale of product line and related exit costs – – Indefinite-lived intangible asset impairment charge – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within our Industrial and Healthcare Materials reportable segment, net sales to unaffiliated customers for the combined Performance Tapes and Vancive Medical Technologies product groups were $377.4 million, $414.6 million, and $440 million in 2016, 2015, and 2014, respectively. Revenues from continuing operations by geographic area are set forth below. Revenues are attributed to geographic areas based on the location from which the product is shipped. (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers U.S. $ $ $ Europe Asia Latin America Other international ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers in Asia included sales in China (including Hong Kong) of $1.14 billion in both 2016 and 2015 and $1.11 billion in 2014. Property, plant and equipment, net, in our U.S. and international operations was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net U.S. $ $ $ International ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
SUPPLEMENTAL FINANCIAL INFORMATION | NOTE 16. SUPPLEMENTAL FINANCIAL INFORMATION Inventories Net inventories at year-end were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Raw materials $ $ Work-in-progress Finished goods ​ ​ ​ ​ ​ ​ ​ ​ Inventories, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ Property, Plant and Equipment Major classes of property, plant and equipment, stated at cost, at year-end were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Land $ $ Buildings and improvements Machinery and equipment Construction-in-progress ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment Accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ Software Capitalized software costs at year-end were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Cost $ $ Accumulated amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Software, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ Software amortization expense from continuing operations was $37.9 million in 2016, $37.6 million in 2015, and $36.4 million in 2014. Equity Method Investment In October 2016, we acquired a 22.6% interest in PragmatIC Printing Limited ("PragmatIC"), a company that develops flexible electronics technology. PragmatIC's primary assets are intangible assets related to its technology. We used the equity method to account for this investment. The carrying value of this investment was $9.5 million as of December 31, 2016 and was included in "Other assets" in the Consolidated Balance Sheets. Research and Development Research and development expense from continuing operations, which is included in "Marketing, general and administrative expense" in the Consolidated Statements of Income, was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information Cash paid for interest and income taxes, including amounts paid for discontinued operations, was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest, net of capitalized amounts $ $ $ Income taxes, net of refunds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency Effects Gains and losses resulting from foreign currency transactions are included in income in the period incurred. Transactions in foreign currencies (including receivables, payables and loans denominated in currencies other than the functional currency), including hedging impacts, decreased net income by $1.6 million, $6.1 million, and $8.7 million in 2016, 2015, and 2014, respectively. We had no operations in hyperinflationary economies in fiscal years 2016, 2015, or 2014. Discontinued Operations Loss from discontinued operations, net of tax, for 2015 included tax expense related to the completion of certain tax returns related to the sale of our former OCP and DES businesses. The loss from discontinued operations, net of tax, for 2014 reflected costs related to the resolution of certain post-closing adjustments in the third quarter of 2014. We continue to be subject to certain indemnification obligations under the terms of the purchase agreement. In addition, the tax liability associated with the sale is subject to the completion of tax return filings in certain foreign jurisdictions in which we operated the OCP and DES businesses. Sale of Product Line In May 2015, we sold certain assets and transferred certain liabilities associated with a product line in our RBIS reportable segment for $1.5 million. The pre-tax loss from the sale, when combined with exit costs related to the sale, totaled $8.5 million. The exit costs included $3.4 million of severance costs. In the first quarter of 2015, we recorded an impairment charge of approximately $2 million related to certain long-lived assets in this product line. This loss and these costs were included in "Other expense, net" in the Consolidated Statements of Income. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | NOTE 17. QUARTERLY FINANCIAL INFORMATION (Unaudited) (In millions, except per share data) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Net sales $ $ $ $ Gross profit Net income Net income per common share .90 .70 Net income per common share, assuming dilution .98 .88 .98 .69 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Net sales $ $ $ $ Gross profit Income from continuing operations (Loss) income from discontinued operations, net of tax – ) .4 .5 Net income Net income (loss) per common share: Continuing operations .79 .71 .89 .62 Discontinued operations – (.01 ) – .01 Net income per common share .79 .70 .89 .63 Net income (loss) per common share, assuming dilution: Continuing operations .78 .69 .87 .61 Discontinued operations – (.01 ) .01 .01 Net income per common share, assuming dilution .78 .68 .88 .62 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ "Other expense, net" is presented by type for each quarter below: (In millions) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Restructuring charges: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs .4 .7 Other items: Loss from settlement of pension obligations – – – Loss (gain) on sales of assets – .3 – ) Transaction costs – .9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Restructuring charges: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs .4 Other items: Net loss from curtailment and settlement of pension obligations – – – .3 Loss on sale of product line and related exit costs .2 – Legal settlements (.5 ) – .2 – Gain on sale of assets ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | Nature of Operations We develop identification and decorative solutions for businesses worldwide. Our products include pressure-sensitive labeling technology and materials; films for graphic and reflective applications; brand and price tickets, tags and labels (including radio-frequency identification ("RFID") inlays); performance tapes; and pressure-sensitive adhesive products for surgical, wound care, ostomy, and electromedical applications. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of majority-owned subsidiaries. Intercompany accounts, transactions, and profits are eliminated in consolidation. We apply the equity method of accounting for investments in which we have significant influence but not a controlling interest. |
Segment Information | Segment Information In the fourth quarter of 2016, we changed our operating structure to align with our overall business strategy, and our Chief Executive Officer, who is also our chief operating decision maker, requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result of these events, our fiscal year 2016 results are reported based on our new reportable segments, as described in Note 15, "Segment Information." We have reclassified certain prior period amounts to reflect our new operating structure. |
Fiscal Year | Fiscal Year Normally, our fiscal years consist of 52 weeks, but every fifth or sixth fiscal year consists of 53 weeks. Our 2016 and 2015 fiscal years consisted of 52-week periods ending December 31, 2016 and January 2, 2016, respectively. Our 2014 fiscal year consisted of a 53-week period ending January 3, 2015. |
Financial Presentation | Financial Presentation As further discussed in Note 16, "Supplemental Financial Information," we have classified certain costs associated with the divestiture of our former Office and Consumer Products ("OCP") and Designed and Engineered Solutions ("DES") businesses as discontinued operations in the Consolidated Statements of Income for fiscal years 2015 and 2014. Unless otherwise noted, the results and financial condition of discontinued operations have been excluded from the notes to our Consolidated Financial Statements. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions for the reporting period and as of the date of the financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expense. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents generally consist of cash on hand, deposits in banks, cash-in-transit, and bank drafts and short-term investments with maturities of three months or less when purchased or received. The carrying value of these assets approximates fair value due to the short maturity of the instruments. |
Accounts Receivable | Accounts Receivable We record trade accounts receivable at the invoiced amount. The allowance for doubtful accounts reserve represents allowances for customer trade accounts receivable that are estimated to be partially or entirely uncollectible. The customer complaint reserve represents estimated sales returns and allowances. These allowances are used to reduce gross trade receivables to their net realizable values. We record these allowances based on estimates related to the following: • Customer-specific allowances; • Amounts based upon an aging schedule; and • An amount based on our historical experience. No single customer represented 10% or more of our net sales in, or trade accounts receivable at, year-end 2016 or 2015. However, during 2016, 2015, and 2014, our ten largest customers by net sales represented approximately 14%, 15%, and 13% of our net sales, respectively. As of December 31, 2016 and January 2, 2016, our ten largest customers by trade accounts receivable represented approximately 14% of our trade accounts receivable. These customers were concentrated primarily in our Label and Graphic Materials reportable segment. We generally do not require our customers to provide collateral. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value and are categorized as raw materials, work-in-progress, or finished goods. Cost is determined using the first-in, first-out method. Inventory reserves are recorded to cost of products sold for damaged, obsolete, excess and slow-moving inventory and we establish a lower cost basis for the inventory. We use estimates to record these reserves. Slow-moving inventory is reviewed by category and may be partially or fully reserved for depending on the type of product, level of usage, and the length of time the product has been included in inventory. |
Property, Plant and Equipment | Property, Plant and Equipment Depreciation is generally computed using the straight-line method over the estimated useful lives of the assets, ranging from ten to forty-five years for buildings and improvements and three to fifteen years for machinery and equipment. Leasehold improvements are depreciated over the shorter of the useful life of the asset or the term of the associated leases. Maintenance and repair costs are expensed as incurred; renewals and betterments are capitalized. Upon the sale or retirement of assets, the accounts are relieved of the cost and the related accumulated depreciation, with any resulting gain or loss included in net income. |
Software | Software We capitalize internal and external software costs that are incurred during the application development stage of software development, including costs incurred for the design, coding, installation to hardware, testing, and upgrades and enhancements that provide the software or hardware with additional functionalities and capabilities. Internal and external software costs during the preliminary project stage are expensed, as are those costs during the post-implementation and/or operation stage, including internal and external training costs and maintenance costs. Capitalized software, which is included in "Other assets" in the Consolidated Balance Sheets, is amortized on a straight-line basis over the estimated useful life of the software, which is generally between five and ten years. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Impairment charges are recorded when the carrying amounts of long-lived assets are determined not to be recoverable. Recoverability is measured by comparing the undiscounted cash flows expected from their use and eventual disposition to the carrying value of the related asset or asset group. The amount of impairment loss is calculated as the excess of the carrying value over the fair value. Historically, changes in market conditions and management strategy have caused us to reassess the carrying amount of our long-lived assets. |
Goodwill and Other Intangibles Resulting from Business Acquisitions | Goodwill and Other Intangibles Resulting from Business Acquisitions Business combinations are accounted for by the acquisition method, with the excess of the acquisition cost over the fair value of net tangible assets and identified intangible assets acquired considered goodwill. As a result, we disclose goodwill separately from other intangible assets. Other identifiable intangibles include customer relationships, patents and other acquired technology, trade names and trademarks, and other intangibles. We have the following reporting units: materials; retail branding and information solutions; reflective solutions; performance tapes; fastener solutions; adhesives; and medical solutions. In performing the required impairment tests, we primarily apply a present value (discounted cash flow) method to determine the fair value of the reporting units with goodwill. We perform our annual impairment test of goodwill during the fourth quarter. Certain factors may result in the need to perform an impairment test prior to the fourth quarter, including significant underperformance of a business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, or a decision to divest a portion of a reporting unit. We determine goodwill impairment using a two-step process. The first step is to identify if a potential impairment exists by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to have a potential impairment and the second step of the impairment test is not necessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if any. The second step, if necessary, compares the implied fair value of goodwill with the carrying amount of goodwill. If the implied fair value of goodwill exceeds the carrying amount, then goodwill is not considered impaired. However, if the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess. In consultation with outside specialists, we estimate the fair value of our reporting units using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions about the reporting units, including sales, operating margins, growth rates, and discount rates. Assumptions about discount rates are based on a weighted-average cost of capital for comparable companies. Assumptions about sales, operating margins, and growth rates are based on our forecasts, business plans, economic projections, anticipated future cash flows, and marketplace data. Assumptions are also made for varying perpetual growth rates for periods beyond the long-term business plan period. We base our fair value estimates on projected financial information and assumptions that we believe are reasonable. However, actual future results may differ from those estimates and projections, and those differences may be material. The valuation methodology used to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions. We test indefinite-lived intangible assets, consisting of trade names and trademarks, for impairment in the fourth quarter or whenever events or circumstances indicate that it is more likely than not that their carrying amounts exceed their fair values. Fair value is estimated as the discounted value of future revenues using a royalty rate that a third party would pay for use of the asset. Variation in the royalty rates could impact the estimate of fair value. If the carrying amount of an asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. See also Note 3, "Goodwill and Other Intangibles Resulting from Business Acquisitions." |
Foreign Currency | Foreign Currency Asset and liability accounts of international operations are translated into U.S. dollars at current rates. Revenues and expenses are translated at the weighted-average currency rate for the fiscal year. Gains and losses resulting from hedging the value of investments in certain international operations and from the translation of balance sheet accounts are recorded directly as a component of other comprehensive income. |
Financial Instruments | Financial Instruments We enter into foreign exchange hedge contracts to reduce our risk from exchange rate fluctuations associated with receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. We enter into interest rate contracts to help manage our exposure to certain interest rate fluctuations. We also enter into futures contracts to hedge certain price fluctuations for a portion of our anticipated domestic purchases of natural gas. The maximum length of time for which we hedge our exposure to the variability in future cash flows for forecasted transactions is 36 months. On the date we enter into a derivative contract, we determine whether the derivative will be designated as a hedge. Derivatives not designated as hedges are recorded on the balance sheets at fair value, with changes in fair value recognized in earnings. Derivatives designated as hedges are classified as either (1) hedges of the fair value of a recognized asset or liability or an unrecognized firm commitment ("fair value" hedges) or (2) hedges of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability ("cash flow" hedges). Our policy is not to purchase or hold any foreign currency, interest rate or commodity contracts for trading purposes. We assess, both at the inception of the hedge and on an ongoing basis, whether hedges are highly effective. If it is determined that a hedge is not highly effective, we prospectively discontinue hedge accounting. For cash flow hedges, the effective portion of the related gains and losses is recorded as a component of other comprehensive income, and the ineffective portion is reported in earnings. Amounts in accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged transaction affects earnings. In the event that the anticipated transaction is no longer likely to occur, we recognize the change in fair value of the instrument in current period earnings. Changes in fair value hedges are recognized in current period earnings. Changes in the fair value of underlying hedged items (such as recognized assets or liabilities) are also recognized in current period earnings and offset the changes in the fair value of the derivative. In the Consolidated Statements of Cash Flows, hedges are classified in the same category as the item hedged, primarily in operating activities. See also Note 5, "Financial Instruments." |
Fair Value Measurements | Fair Value Measurements We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability. We determine fair value based on a three-tier fair value hierarchy, which we use to prioritize the inputs used in measuring fair value. These tiers consist of Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions to determine the best estimate of fair value. |
Revenue Recognition | Revenue Recognition Sales are recognized when persuasive evidence of an arrangement exists, pricing is determinable, delivery has occurred based on applicable sales terms, and collection is reasonably assured. Sale terms are free on board (f.o.b.) shipping point or f.o.b. destination, depending upon local business customs. In regions where f.o.b. shipping point terms are utilized, sales are recorded at the time of shipment because this is when title and risk of loss are transferred. In regions where f.o.b. destination terms are utilized, sales are recorded when the products are delivered to the customer's delivery site, because this is when title and risk of loss are transferred. Furthermore, sales, provisions for estimated returns, and the cost of products sold are recorded at the time title transfers to customers and when the customers assume the risks and rewards of ownership. Actual product returns are charged against estimated sales return allowances. Sales rebates and discounts are common practices in the industries in which we operate. Volume, promotional, price, cash and other discounts and customer incentives are accounted for as a reduction to gross sales. Rebates and discounts are recorded based upon estimates at the time products are sold. These estimates are based on our historical experience for similar programs and products. We review these rebates and discounts on an ongoing basis and accruals for rebates and discounts are adjusted, if necessary, as additional information becomes available. |
Research and Development | Research and Development Research and development costs are related to research, design, and testing of new products and applications and are expensed as incurred. |
Long-Term Incentive Compensation | Long-Term Incentive Compensation No long-term incentive compensation expense was capitalized in 2016, 2015, or 2014. Changes in estimated forfeiture rates are recorded as cumulative adjustments in the period that the estimates are revised. Valuation of Stock-Based Awards Our stock-based compensation expense is based on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis over the requisite service period for stock options and restricted stock units ("RSUs"). Compensation expense for performance units ("PUs") is based on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis as these awards cliff-vest at the end of the requisite service period. The compensation expense related to market-leveraged stock units ("MSUs") is based on the fair value of awards, adjusted for estimated forfeitures, and amortized on a graded-vesting basis over their respective performance periods. Compensation expense for awards with a market condition as a performance objective, which includes PUs and MSUs, is not adjusted if the condition is not met, as long as the requisite service period is met. The fair value of stock options is estimated as of the date of grant using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate, and the expected option term. The fair value of RSUs and the component of PUs that is subject to the achievement of performance objectives based on a performance condition is determined based on the fair market value of our common stock as of the date of grant, adjusted for foregone dividends. The fair value of stock-based awards that are subject to achievement of performance objectives based on a market condition, which includes MSUs and the other component of PUs, is determined using the Monte-Carlo simulation model, which utilizes multiple input variables, including expected stock price volatility and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the target performance objectives established for the award. Certain of these assumptions are based on management's estimates, in consultation with outside specialists. Significant changes in assumptions for future awards and actual forfeiture rates could materially impact stock-based compensation expense and our results of operations. Valuation of Cash-Based Awards Cash-based awards consist of long-term incentive units ("LTI Units") granted to eligible employees. Cash-based awards are classified as liability awards and remeasured at each quarter-end over the applicable vesting or performance period. In addition to LTI Units with terms and conditions that mirror those of RSUs, we also grant certain employees LTI Units with terms and conditions that mirror those of PUs and MSUs. Accounting for Income Taxes for Stock-Based Compensation We use the short-cut method to calculate the historical pool of windfall tax benefits related to non-employee director and employee stock-based compensation awards. In addition, we follow the tax law ordering approach to determine the sequence in which deductions and net operating loss carryforwards are utilized, as well as the direct-only approach to calculate the amount of windfall or shortfall tax benefits. See also Note 12, "Long-term Incentive Compensation." |
Taxes Based on Income | Taxes Based on Income Our provision for income taxes is determined using the asset and liability approach following the provisions of ASC 740, Accounting for Income Taxe s. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets when uncertainty regarding their realizability exists. We recognize and measure our uncertain tax positions following the more likely than not threshold for financial statement recognition and measurement for tax positions taken or expected to be taken in a tax return. See also Note 14, "Taxes Based on Income." |
Recent Accounting Requirements | Recent Accounting Requirements In January 2017, the Financial Accounting Standards Board ("FASB") issued amended guidance that simplifies the subsequent measurement of goodwill. This amended guidance eliminates step two of the goodwill impairment test, and a goodwill impairment will be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted. While we are currently assessing the timing of our adoption of this guidance, we do not anticipate that its adoption will have a significant impact on our financial position, results of operations, cash flows, or disclosures. In January 2017, the FASB issued guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. While we are currently assessing the timing of our adoption of this guidance, we do not anticipate that its adoption will have a significant impact on our financial position, results of operations, cash flows, and disclosures. In October 2016, the FASB issued guidance that requires companies to recognize the income tax effects of intra-entity sales and transfers of assets other than inventory in the period in which the transfer occurs. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. The guidance requires modified retrospective adoption. We are currently assessing the timing of our adoption of this guidance and its impact on our financial position, results of operations, cash flows, and disclosures. In August 2016, the FASB issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified in the statement of cash flows. This guidance requires retrospective adoption and will be effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted. We are currently assessing the impact of this guidance on our cash flows. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2016, and early adoption is permitted. Different components of the guidance require prospective, retrospective and/or modified retrospective adoption. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures. In March 2016, the FASB issued guidance on accounting for leases that requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. This guidance also requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective approach is required for adoption with respect to all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures. In May 2014, and in subsequent updates, the FASB issued revised guidance on revenue recognition. This revised guidance provides a single comprehensive model for accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This revised guidance will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. This revised guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This revised guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and can be applied retrospectively either to each prior reporting period presented ("full retrospective") or with the cumulative effect of adoption recognized at the date of initial application ("modified retrospective"). Early adoption is permitted for fiscal periods beginning after December 15, 2016. We expect to adopt the new standard under the modified retrospective approach in the first quarter of 2018. Based on the information we have evaluated to date, we do not anticipate that the adoption of this revised guidance will have a significant impact on our financial position, results of operations, or cash flows. |
GOODWILL AND OTHER INTANGIBLE27
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | |
Changes in net carrying amount of goodwill | (In millions) Label and Retail Industrial and Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of January 3, 2015 $ $ $ – $ Acquisition adjustments – (.4 ) – (.4 ) Translation adjustments ) ) – ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of January 2, 2016 – Acquired during the current period (1) – Transfer (2) – ) – Translation adjustments ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of December 31, 2016 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Goodwill acquired during the current period primarily related to the Mactac acquisition. (2) In connection with our operating structure changes in 2016, we allocated goodwill associated with our fastener solutions reporting unit from Retail Branding and Information Solutions ("RBIS") to Industrial and Healthcare Materials ("IHM") based on the relative fair values of our fastener solutions and RBIS reporting units. Prior to 2016, no reporting units within IHM had allocated goodwill. Refer to Note 1, "Summary of Significant Accounting Policies," for more information. |
Summary of weighted-average amortization periods from the date of acquisition and weighted-average remaining useful lives of finite-lived intangible assets | Amount Weighted-average ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ Patents and other acquired technology ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of finite-lived intangible assets | 2016 2015 (In millions) Gross Accumulated Net Gross Accumulated Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships (1) $ $ $ $ $ $ Patents and other acquired technology (1) Trade names and trademarks Other intangibles .2 .6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes respective finite-lived intangible assets acquired from the Mactac acquisition. |
Estimated amortization expense for finite lived intangible assets | (In millions) Estimated ​ ​ ​ ​ ​ 2017 $ 2018 2019 2020 2021 ​ ​ ​ ​ ​ |
DEBT AND CAPITAL LEASES (Tables
DEBT AND CAPITAL LEASES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
DEBT AND CAPITAL LEASES | |
Schedule of long-term debt, including its respective interest rates, and capital lease obligations | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt and capital leases Medium-term notes: Series 1995 due 2020 through 2025 $ $ Long-term notes: Senior notes due 2017 at 6.6% Senior notes due 2020 at 5.4% Senior notes due 2023 at 3.4% Senior notes due 2033 at 6.0% Capital leases Less amount classified as current (1) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt and capital leases (2) $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) In 2016, we reclassified approximately $250 million of senior notes due on October 1, 2017 from long-term debt to current portion of long-term debt. (2) Includes unamortized debt issuance cost and debt discount of $3.6 million and $.4 million as of year-end 2016 and $4.4 million and $.5 million as of year-end 2015, respectively. |
Schedule of maturities of long-term debt and capital lease payments for each of the next five fiscal years and thereafter | Year (In millions) ​ ​ ​ ​ ​ 2017 (classified as current) $ 2018 2019 2020 2021 2022 and thereafter ​ ​ ​ ​ ​ |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FINANCIAL INSTRUMENTS | |
Fair value and balance sheet locations of derivatives | The following table shows the fair value and balance sheet locations of derivatives as of December 31, 2016: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets .5 Other accrued liabilities – Commodity contracts Other assets .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table shows the fair value and balance sheet locations of derivatives as of January 2, 2016: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets – Other accrued liabilities .7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Components of net gain (loss) recognized in income related to fair value hedge contracts | (In millions) Location of Net Gains ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Cost of products sold $ $ $ ) Foreign exchange contracts Marketing, general and administrative expense ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Components of the gains (losses), before taxes, recognized in "Accumulated other comprehensive loss" on derivatives related to cash flow hedge | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts $ .2 $ (.1 ) $ Commodity contracts .6 (.7 ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ .8 $ (.8 ) $ .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
PENSION AND OTHER POSTRETIREM30
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Defined Benefit Plans | |
Schedule of one-percentage-point change in assumed health care cost trend rates | (In millions) One-percentage-point One-percentage-point ​ ​ ​ ​ ​ ​ ​ ​ Effect on total of service and interest cost components $ .01 $ (.01 ) Effect on postretirement benefit obligations .3 (.3 ) ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of plan benefit obligations | Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in projected benefit obligations Projected benefit obligations at beginning of year $ $ $ $ $ $ Service cost .4 .4 – – Interest cost .2 .2 Participant contribution – – .5 .8 Amendments – (.6 ) – (.7 ) – – Actuarial loss (gain) ) ) (.2 ) ) Plan transfers – – – – – Acquisition (1) – – – – – Benefits paid ) ) ) ) ) ) Curtailments – (.3 ) – ) – – Settlements (2) ) – – ) – – Foreign currency translation – ) – ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations at end of year $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated benefit obligations at end of year $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition completed in August 2016, we assumed benefit obligations associated with two defined benefit plans in Belgium. (2) In 2016, settlements were related to the lump-sum pension payments associated with the ADPP. |
Schedule of plan assets | Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets Plan assets at beginning of year $ $ $ $ $ – $ – Actual return on plan assets ) ) – – Plan transfers – – – (.3 ) – – Acquisition (1) – – – – – Employer contributions .9 .9 Participant contributions – – .5 .8 Benefits paid ) ) ) ) ) ) Settlements (2) ) – – ) – – Foreign currency translation – ) – ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at end of year $ $ $ $ $ – $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition completed in August 2016, we assumed plan assets associated with two defined benefit plans in Belgium. (2) In 2016, settlements were related to the lump-sum pension payments associated with the ADPP. |
Schedule of funded status | Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status of the plans Other accrued liabilities $ ) $ ) $ ) $ ) $ (.8 ) $ ) Long-term retirement benefits and other liabilities (1) ) ) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets less than benefit obligations $ ) $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In accordance with our funding strategy, we have the option to fund certain of these liabilities with proceeds from our corporate-owned life insurance policies. |
Schedule of weighted-average assumptions used to determine year-end benefit obligations | Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average assumptions used to determine year-end benefit obligations Discount rate % % % % % % % % % Compensation rate increase – – – – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of pre-tax amounts, recognized in "Accumulated other comprehensive loss" | Pension Benefits U.S. Postretirement 2016 2015 2016 2015 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss $ $ $ $ $ $ Prior service cost (credit) ) ) ) ) Net transition obligation – .2 – .3 – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in accumulated other comprehensive loss $ $ $ $ $ $ .8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of pretax amounts, including that of discontinued operations, recognized in "Other comprehensive loss (income)" | Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss (gain) $ $ $ $ $ $ $ (.2 ) $ ) $ .3 Prior service (credit) cost – (.6 ) – (.7 ) – ) – – – Amortization of unrecognized: Net actuarial loss ) ) ) ) ) ) ) ) ) Prior service (cost) credit ) .4 ) .3 ) (.4 ) Net transition obligation – (.1 ) – – – – – – – Curtailments – – – .2 – (.6 ) – – – Settlements ) – – ) (.6 ) (.4 ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in other comprehensive (income) loss $ ) $ $ (.1 ) $ ) $ $ $ $ (.3 ) $ .8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of net periodic benefit cost (credit) | Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost $ .4 $ $ .4 $ $ .4 $ $ – $ – $ – Interest cost .1 .3 .3 Actuarial (gain) loss (.2 ) – .4 – – – – – Expected return on plan assets ) ) ) ) ) ) – – – Amortization of actuarial loss Amortization of prior service cost (credit) (.4 ) (.3 ) .4 ) ) ) Amortization of transition obligation – .1 – – – – – – – Recognized (gain) loss on curtailments – (.2 ) – (.2 ) – .6 – – – Recognized loss on settlements (1) – – .6 .4 – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost (credit) $ $ $ $ $ $ $ ) $ (.8 ) $ (.2 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In 2016, we recognized a loss on settlements related to the ADPP as a result of making the lump-sum pension payments described above. In 2015, we recognized a loss on settlements related to pension plans in Germany and France as a result of the sale of a product line in our RBIS reportable segment. We also recognized a loss on settlements for events in Switzerland in 2015 and 2014. These losses on settlements were recorded in "Other expense, net" in Consolidated Statements of Income. |
Schedule of weighted-average assumptions used to determine net periodic cost | Pension Benefits U.S. Postretirement 2016 2015 2014 2016 2015 2014 U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate % % % % % % % % % Expected return on assets – – – Compensation rate increase – – – – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of defined benefit plan contributions | (In millions) ​ ​ ​ ​ ​ U.S. $ Int'l U.S. postretirement health benefits .8 ​ ​ ​ ​ ​ |
Schedule of anticipated future benefit payments | Pension Benefits U.S. Postretirement (In millions) U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 $ $ $ .8 2018 .5 2019 .5 2020 .4 2021 .4 2022 - 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated amortization of amounts, included in "Accumulated other comprehensive loss" | Pension U.S. Postretirement (In millions) U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss $ $ $ Prior service cost (credit) .9 (.4 ) ) Net transition obligation – .1 – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss (gain) to be recognized $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
U.S. | |
Defined Benefit Plans | |
Schedule of fair value of plan assets | Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Cash $ – $ – $ – $ – Pooled funds – liability hedging portfolio (1) Pooled funds – growth portfolio (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total U.S. plan assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Cash $ – $ – $ – $ – Pooled funds – liability hedging portfolio (1) Pooled funds – growth portfolio (1) Other assets (2) .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total U.S. plan assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Pooled funds that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to reconcile to total U.S. plan assets. (2) Includes accrued recoverable taxes. |
Int'l | |
Defined Benefit Plans | |
Schedule of fair value of plan assets | Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Cash $ $ $ – $ – Insurance contracts – – Pooled funds – fixed income securities (1) Pooled funds – equity securities (1) Pooled funds – other investments (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total international plan assets at fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Cash $ .8 $ .8 $ – $ – Insurance contracts – – Pooled funds – fixed income securities (1) Pooled funds – equity securities (1) Pooled funds – other investments (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total international plan assets at fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Pooled funds that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to reconcile to total international plan assets. |
Schedule of reconciliation of Level 3 assets | Level 3 Assets (In millions) Insurance Contracts ​ ​ ​ ​ ​ Balance at January 2, 2016 $ Acquisition (1) Net realized and unrealized gain .5 Purchases Settlements ) Impact of changes in foreign currency exchange rates ) ​ ​ ​ ​ ​ Balance at December 31, 2016 $ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition completed in August 2016, we assumed plan assets associated with two defined benefit plans in Belgium. |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS | |
Minimum annual rental commitments on operating leases | Year (In millions) ​ ​ ​ ​ ​ 2017 $ 2018 2019 2020 2021 2022 and thereafter ​ ​ ​ ​ ​ Total minimum lease payments $ ​ ​ ​ ​ ​ |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CONTINGENCIES | |
Costs of environmental liabilities with remediation | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Balance at beginning of year $ $ Charges (reversals), net Payments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
Assets and liabilities carried at fair value, measured on a recurring basis | The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of December 31, 2016: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Trading securities $ $ $ $ – Derivative assets .6 – Bank drafts – – Liabilities Derivative liabilities $ $ – $ $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of January 2, 2016: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Trading securities $ $ $ $ – Derivative assets – – Bank drafts – – Liabilities Derivative liabilities $ $ .7 $ $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
NET INCOME PER COMMON SHARE | |
Schedule of net income per common share | (In millions, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (A) Income from continuing operations $ $ $ (B) Loss from discontinued operations, net of tax – (.1 ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (C) Net income available to common shareholders $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (D) Weighted average number of common shares outstanding Dilutive shares (additional common shares issuable under stock-based awards) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (E) Weighted average number of common shares outstanding, assuming dilution ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per common share: Continuing operations (A) ÷ (D) $ $ $ Discontinued operations (B) ÷ (D) – – (.03 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share (C) ÷ (D) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per common share, assuming dilution: Continuing operations (A) ÷ (E) $ $ $ Discontinued operations (B) ÷ (E) – – (.02 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share, assuming dilution (C) ÷ (E) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUPPLEMENTAL EQUITY AND COMPR35
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | |
Schedule of changes in "Accumulated other comprehensive loss" (net of tax) | (In millions) Foreign Pension and Cash Flow Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 3, 2015 $ ) $ ) $ – $ ) Other comprehensive loss before reclassifications, net of tax ) ) (.5 ) ) Reclassifications to net income, net of tax – ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income, net of tax ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 2, 2016 $ ) $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications, net of tax ) ) .7 ) Reclassifications to net income, net of tax – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income, net of tax ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2016 $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of amounts reclassified from "Accumulated other comprehensive loss" to increase (decrease) income from continuing operations | (In millions) Affected Line Item in the ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flow hedges: Foreign exchange contracts $ ) $ $ ) Cost of products sold Commodity contracts (.7 ) ) .1 Cost of products sold Interest rate contracts (.1 ) (.1 ) (.1 ) Interest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Total before tax (.5 ) .3 Provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) (.9 ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension and other postretirement benefits (1) ) ) ) Provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassifications for the period $ ) $ ) $ ) Total, net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) See Note 6, "Pension and Other Postretirement Benefits," for more information. |
Income tax (benefit) expense allocated to each component of other comprehensive loss | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension and other postretirement benefits: Net loss recognized from actuarial gain/loss and prior service cost/credit $ ) $ ) $ ) Reclassifications to net income Cash flow hedges: Gains (losses) recognized on cash flow hedges .1 (.3 ) .1 Reclassifications to net income (.5 ) .3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit related to items of other comprehensive loss $ (.5 ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
LONG-TERM INCENTIVE COMPENSAT36
LONG-TERM INCENTIVE COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Summary of stock-based compensation expense from continuing operations and the total recognized tax benefit related to this expense | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense $ $ $ Tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted-average assumptions of options granted during the year | ​ ​ ​ ​ ​ Risk-free interest rate % Expected stock price volatility % Expected dividend yield % Expected option term 6.5 years ​ ​ ​ ​ ​ |
Schedule of stock option activity | Number Weighted-average Weighted-average Aggregate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 2, 2016 $ $ Granted Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2016 $ $ Options vested and expected to vest at December 31, 2016 Options exercisable at December 31, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Performance Units (PUs) | |
Stock-Based Compensation | |
Information related to awarded PUs | Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at January 2, 2016 $ Granted at target Adjustment for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects awards granted in excess of target as a result of our achieving above-target performance for the 2013-2015 performance period. |
Market-leveraged stock units (MSUs) | |
Stock-Based Compensation | |
Information related to awarded MSUs | Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at January 2, 2016 $ Granted at target Adjustments for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects adjustments as a result of achieving above-target performance for each of the performance periods paid out in 2016. |
Restricted Stock Units (RSUs) | |
Stock-Based Compensation | |
Summary of information related to awarded RSUs | Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at January 2, 2016 $ Granted Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ |
COST REDUCTION ACTIONS (Tables)
COST REDUCTION ACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
COST REDUCTION ACTIONS | |
Restructuring charges and payments | During 2016, restructuring charges and payments were as follows: (In millions) Accrual at Charges Cash Non-cash Foreign Accrual at ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015/2016 Actions Severance and related costs $ $ $ ) $ – $ .1 $ Asset impairment charges – – ) – – Lease cancellation costs .2 ) – – .2 2014/2015 Actions Severance and related costs (.9 ) ) – – .7 Prior actions Severance and related costs .7 (.1 ) – – – .6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ .1 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During 2015, restructuring charges and payments were as follows: (In millions) Accrual at Charges Cash Non-cash Foreign Accrual at ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015/2016 Actions Severance and related costs $ – $ $ ) $ – $ – $ Asset impairment charges – – ) – – Lease cancellation costs – .5 (.3 ) – – .2 2014/2015 Actions Severance and related costs ) – (.9 ) Asset impairment charges – – ) – – Lease cancellation costs .1 .3 (.4 ) – – – Prior actions Severance and related costs .8 – – – (.1 ) .7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Total amount of restructuring charges incurred by reportable segment and Corporate | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restructuring charges by reportable segment and Corporate Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials .9 Corporate – .4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
TAXES BASED ON INCOME (Tables)
TAXES BASED ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
TAXES BASED ON INCOME | |
Taxes based on income (loss) | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current: U.S. federal tax $ $ $ State taxes .6 (.1 ) (.2 ) International taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: U.S. federal tax ) State taxes ) .5 International taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
The principal items accounting for the difference between taxes | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Computed tax at 35% of income before taxes $ $ $ Increase (decrease) in taxes resulting from: State taxes, net of federal tax benefit Foreign earnings taxed at different rates (1) ) ) Valuation allowance ) .9 Corporate-owned life insurance ) ) ) U.S. federal research and development tax credits ) ) ) Tax contingencies and audit settlements ) ) Other items, net – ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Included foreign earnings taxed in the U.S., net of credits, in all years. |
Income (loss) from continuing operations before taxes from our U.S. and international operations | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. $ $ $ (.1 ) International ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Components of the temporary differences | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Accrued expenses not currently deductible $ $ Net operating losses Tax credit carryforwards Stock-based compensation Pension and other postretirement benefits Inventory reserves Other assets .9 Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets (1) ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ) ) Repatriation accrual (2) ) ) Foreign operating loss recapture ) ) Other liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities (1) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflect gross amounts before jurisdictional netting of deferred tax assets and liabilities. (2) Included in the repatriation accruals as of December 31, 2016 and January 2, 2016 was a net deferred tax liability of $62.4 million and $12.5 million, respectively, associated with the future tax cost to repatriate non-permanently reinvested earnings of our foreign subsidiaries, which is offset by a contra deferred tax liability of $.3 million and $2.7 million, respectively, related to unrealized foreign exchange losses associated with earnings of our foreign subsidiaries that can be repatriated to the U.S. in future periods without incurring any additional U.S. federal income tax. |
Schedule of tax credit and net operating loss carryforwards | (In millions) Net Operating (1) Tax Credits ​ ​ ​ ​ ​ ​ ​ ​ Expires in 2017 $ $ .6 Expires in 2018 Expires in 2019 Expires in 2020 Expires in 2021 .4 Expires in 2022 Expires in 2023 Expires in 2024 .3 Expires in 2025 Expires in 2026 .5 Expires in 2027 .2 .2 Expires in 2028 .5 .1 Expires in 2029 – .1 Expires in 2030 – .1 Expires in 2031 – .1 Expires in 2032 – Expires in 2033 – Expires in 2034 – Expires in 2035 – Expires in 2036 – Indefinite life/no expiration ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Net operating losses are presented before tax effect and valuation allowance. |
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Balance at beginning of year $ $ Additions for tax positions of the current year Reductions for tax positions of prior years ) ) Settlements with tax authorities ) ) Expirations of statutes of limitations ) ) Changes due to translation of foreign currencies ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT INFORMATION | |
Financial information, by reportable segment from continuing operations | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intersegment sales Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intersegment sales $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before taxes Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials Corporate expense ) ) ) Interest expense ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net by reportable segment Label and Graphic Materials $ $ $ Retail Branding and Information Solutions Industrial and Healthcare Materials Corporate .4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net by type Restructuring charges: Severance and related costs $ $ $ Asset impairment charges and lease and other contract cancellation costs Other items: Net loss from curtailment and settlement of pension obligations .3 Net gains on sales of assets ) ) ) Transaction costs – – Legal settlements – (.3 ) – Loss on sale of product line and related exit costs – – Indefinite-lived intangible asset impairment charge – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of net sales to unaffiliated customers | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers U.S. $ $ $ Europe Asia Latin America Other international ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales to unaffiliated customers $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of property, plant and equipment, net | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net U.S. $ $ $ International ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUPPLEMENTAL FINANCIAL INFORM40
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
Net inventories | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Raw materials $ $ Work-in-progress Finished goods ​ ​ ​ ​ ​ ​ ​ ​ Inventories, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
Property, Plant and Equipment | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Land $ $ Buildings and improvements Machinery and equipment Construction-in-progress ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment Accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
Capitalized software costs | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Cost $ $ Accumulated amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Software, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of research and development expense | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Cash paid for interest and income taxes | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest, net of capitalized amounts $ $ $ Income taxes, net of refunds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
QUARTERLY FINANCIAL INFORMATI41
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | |
Quarterly financial information | (In millions, except per share data) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Net sales $ $ $ $ Gross profit Net income Net income per common share .90 .70 Net income per common share, assuming dilution .98 .88 .98 .69 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Net sales $ $ $ $ Gross profit Income from continuing operations (Loss) income from discontinued operations, net of tax – ) .4 .5 Net income Net income (loss) per common share: Continuing operations .79 .71 .89 .62 Discontinued operations – (.01 ) – .01 Net income per common share .79 .70 .89 .63 Net income (loss) per common share, assuming dilution: Continuing operations .78 .69 .87 .61 Discontinued operations – (.01 ) .01 .01 Net income per common share, assuming dilution .78 .68 .88 .62 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of other expense, net by type for each quarter | (In millions) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Restructuring charges: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs .4 .7 Other items: Loss from settlement of pension obligations – – – Loss (gain) on sales of assets – .3 – ) Transaction costs – .9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 Restructuring charges: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs .4 Other items: Net loss from curtailment and settlement of pension obligations – – – .3 Loss on sale of product line and related exit costs .2 – Legal settlements (.5 ) – .2 – Gain on sale of assets ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Summary Of Significant Accounting Policies | |||
Length of Fiscal Period | 364 days | 364 days | 371 days |
Maximum length of time hedged in cash flow hedge | 36 months | ||
Stock-based compensation cost capitalized | $ 0 | $ 0 | $ 0 |
Customer concentration risk | Net sales | Ten largest customers | |||
Summary Of Significant Accounting Policies | |||
Concentration risk percentage | 14.00% | 15.00% | 13.00% |
Customer concentration risk | Accounts receivable | Ten largest customers | |||
Summary Of Significant Accounting Policies | |||
Concentration risk percentage | 14.00% | 14.00% | |
Minimum | |||
Summary Of Significant Accounting Policies | |||
Software estimated useful lives | 5 years | ||
Minimum | Buildings and improvements | |||
Summary Of Significant Accounting Policies | |||
Property and equipment estimated useful lives | 10 years | ||
Minimum | Machinery and equipment | |||
Summary Of Significant Accounting Policies | |||
Property and equipment estimated useful lives | 3 years | ||
Maximum | |||
Summary Of Significant Accounting Policies | |||
Software estimated useful lives | 10 years | ||
Maximum | Customer concentration risk | Net sales | |||
Summary Of Significant Accounting Policies | |||
Concentration risk percentage | 10.00% | 10.00% | |
Maximum | Customer concentration risk | Accounts receivable | |||
Summary Of Significant Accounting Policies | |||
Concentration risk percentage | 10.00% | 10.00% | |
Maximum | Buildings and improvements | |||
Summary Of Significant Accounting Policies | |||
Property and equipment estimated useful lives | 45 years | ||
Maximum | Machinery and equipment | |||
Summary Of Significant Accounting Policies | |||
Property and equipment estimated useful lives | 15 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | Aug. 01, 2016 | Feb. 28, 2017 | Dec. 31, 2016 |
Mactac Acquisition | |||
Business Acquisition | |||
Purchase price | $ 220 | ||
Hanita Coatings Acquisition | |||
Business Acquisition | |||
Purchase price | $ 75 | ||
Yongle Tape Acquisition | |||
Business Acquisition | |||
Purchase price | $ 190 | ||
Additional earn-out opportunity to be paid | $ 55 |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Goodwill | |||
Impairment of goodwill | $ 0 | ||
Changes in the net carrying amount of goodwill | |||
Goodwill, Beginning Balance | 686.2 | $ 721.6 | |
Acquisition adjustments | (0.4) | ||
Acquired during current period | 122.1 | ||
Translation adjustments | (14.7) | (35) | |
Goodwill, Ending Balance | 793.6 | 686.2 | $ 721.6 |
Indefinite-Lived Intangible Assets | |||
Indefinite-lived intangible assets, carrying value | 20.3 | 7.8 | |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | 3 | |
Mactac Acquisition | |||
Finite Lived Intangible Assets Acquired | |||
Intangible assets acquired | 29 | ||
Customer relationships | Mactac Acquisition | |||
Finite Lived Intangible Assets Acquired | |||
Intangible assets acquired | $ 26.1 | ||
Weighted-average useful life (in years) | 15 years | ||
Patents and other acquired technology | Mactac Acquisition | |||
Finite Lived Intangible Assets Acquired | |||
Intangible assets acquired | $ 2.5 | ||
Weighted-average useful life (in years) | 4 years | ||
Trade names | Mactac Acquisition | |||
Indefinite-Lived Intangible Assets | |||
Indefinite-lived intangible assets, carrying value | $ 13 | ||
Label and Graphic Materials | |||
Changes in the net carrying amount of goodwill | |||
Goodwill, Beginning Balance | 277.9 | 306.6 | |
Acquired during current period | 107.8 | ||
Translation adjustments | (12.4) | (28.7) | |
Goodwill, Ending Balance | 373.3 | 277.9 | 306.6 |
Retail Branding and Information Solutions | |||
Changes in the net carrying amount of goodwill | |||
Goodwill, Beginning Balance | 408.3 | 415 | |
Acquisition adjustments | (0.4) | ||
Transfer | (53.1) | ||
Translation adjustments | (1.3) | (6.3) | |
Goodwill, Ending Balance | 353.9 | 408.3 | $ 415 |
Accumulated impairment losses | 820 | $ 820 | |
Industrial and Healthcare Materials | |||
Changes in the net carrying amount of goodwill | |||
Acquired during current period | 14.3 | ||
Transfer | 53.1 | ||
Translation adjustments | (1) | ||
Goodwill, Ending Balance | $ 66.4 |
GOODWILL AND OTHER INTANGIBLE45
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS - Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 332.2 | $ 307.1 | |
Accumulated Amortization | 285.8 | 269.1 | |
Net Carrying Amount | 46.4 | 38 | |
Amortization expense on finite-lived intangible assets from business acquisition | 19.9 | 20.5 | $ 24.4 |
Customer relationships | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 247.1 | 224.3 | |
Accumulated Amortization | 209.4 | 193.9 | |
Net Carrying Amount | 37.7 | 30.4 | |
Patents and other acquired technology | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 52 | 49 | |
Accumulated Amortization | 46.7 | 45.3 | |
Net Carrying Amount | 5.3 | 3.7 | |
Trade names and trademarks | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 21.4 | 22 | |
Accumulated Amortization | 18.2 | 18.7 | |
Net Carrying Amount | 3.2 | 3.3 | |
Other intangibles | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 11.7 | 11.8 | |
Accumulated Amortization | 11.5 | 11.2 | |
Net Carrying Amount | $ 0.2 | $ 0.6 |
GOODWILL AND OTHER INTANGIBLE46
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS - Future Amortization Expense (Details) $ in Millions | Dec. 31, 2016USD ($) |
Future amortization expense for finite-lived intangible assets | |
2,017 | $ 12.2 |
2,018 | 4.9 |
2,019 | 4 |
2,020 | 3.3 |
2,021 | $ 3 |
DEBT AND CAPITAL LEASES (Detail
DEBT AND CAPITAL LEASES (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | |
Short-Term Borrowings from U.S. Commercial Paper | |||
Short-term debt | |||
U.S. Commercial paper | $ 44.5 | $ 28 | |
Weighted average interest rate | 0.90% | 0.70% | |
Short-Term Borrowings from Euro-Commercial Paper | |||
Short-term debt | |||
Maximum borrowing capacity | $ 500 | ||
Maturities of the notes | 364 days | ||
Covenants compliance | There are no financial covenants under this program | ||
Euro-Commercial paper | $ 209 |
DEBT AND CAPITAL LEASES - Revol
DEBT AND CAPITAL LEASES - Revolving Credit Facility (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | Oct. 31, 2014 | |
Uncommitted lines of credit | ||||
Revolving credit facility | ||||
Uncommitted lines of credit | $ 300 | |||
Short term borrowings outstanding | $ 72.9 | $ 65 | ||
Weighted average interest rate | 6.50% | 8.70% | ||
Revolving credit facility | ||||
Revolving credit facility | ||||
Maximum borrowing capacity | $ 700 | |||
Extension in maturity date | 1 year | |||
Commitment for increased borrowing | $ 325 | |||
Commitment fees | 1.1 | $ 1.9 | $ 1.3 | |
Amount outstanding | $ 0 | $ 0 | ||
Previous revolving credit facility | ||||
Revolving credit facility | ||||
Maximum borrowing capacity | $ 675 |
DEBT AND CAPITAL LEASES - Long-
DEBT AND CAPITAL LEASES - Long-Term Debt and Respective Weighted-Average Interest Rate (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 |
Long-term debt and capital leases | ||
Capital leases | $ 25.2 | $ 26 |
Less amount classified as current | (252.7) | (2.5) |
Total long-term debt and capital leases | 713.4 | 963.6 |
Long-term debt, current | 250 | |
Unamortized debt issuance cost | 3.6 | 4.4 |
Unamortized debt discount | 0.4 | 0.5 |
Series 1995 due 2020 through 2025 | ||
Long-term debt and capital leases | ||
Senior notes | $ 44.9 | 44.9 |
Weighted-average interest rate | 7.50% | |
Senior notes due 2017 at 6.6% | ||
Long-term debt and capital leases | ||
Senior notes | $ 249.7 | $ 249.4 |
Weighted-average interest rate | 6.60% | 6.60% |
Senior notes due 2020 at 5.4% | ||
Long-term debt and capital leases | ||
Senior notes | $ 249.3 | $ 249 |
Weighted-average interest rate | 5.40% | 5.40% |
Senior notes due 2023 at 3.4% | ||
Long-term debt and capital leases | ||
Senior notes | $ 248.4 | $ 248.2 |
Weighted-average interest rate | 3.40% | 3.40% |
Senior notes due 2033 at 6.0% | ||
Long-term debt and capital leases | ||
Senior notes | $ 148.6 | $ 148.6 |
Weighted-average interest rate | 6.00% | 6.00% |
DEBT AND CAPITAL LEASES - Lon50
DEBT AND CAPITAL LEASES - Long-Term Debt and Capital Leases (Details) $ in Millions | Dec. 31, 2016USD ($) |
Maturities of Long-term debt and capital leases | |
2017 (classified as current) | $ 254.1 |
2,018 | 4.1 |
2,019 | 4 |
2,020 | 268.6 |
2,021 | 3.5 |
2022 and thereafter | $ 440.9 |
DEBT AND CAPITAL LEASES - Debt
DEBT AND CAPITAL LEASES - Debt issued and Capital Lease Obligations (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
May 31, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Debt | ||||
Total amount of imputed interest on capital lease obligations | $ 5 | |||
Current amount of imputed interest on capital lease obligations | 1.1 | |||
Interest costs | 63.5 | $ 63.5 | $ 67.2 | |
Interest costs capitalized | 3.6 | 3 | $ 3.9 | |
Fair value of debt | 1,310 | 1,080 | ||
Capital Lease Obligations | ||||
Capital Lease Obligations | 25.2 | $ 26 | ||
Mentor lease facility | ||||
Capital Lease Obligations | ||||
Term of lease financing for commercial facility | 10 years | |||
Capital Lease Obligations | 22 | |||
Capital Lease Obligations, Current | 2 | |||
Capital Lease Obligations, Noncurrent | $ 20 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - Cash Flow Hedging $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Financial Instruments | |
Cash flow net loss to be reclassified within the next 12 months | $ 2.6 |
Commodity contracts | |
Financial Instruments | |
Notional amount | 2.8 |
Foreign exchange contracts | |
Financial Instruments | |
Notional amount | $ 1,550 |
FINANCIAL INSTRUMENTS - Derivat
FINANCIAL INSTRUMENTS - Derivative, Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 |
Derivatives, Fair Value | ||
Asset | $ 5.2 | $ 5.6 |
Liability | 7.8 | 5.2 |
Foreign exchange contracts | Other current assets | ||
Derivatives, Fair Value | ||
Asset | 4.6 | 5.6 |
Foreign exchange contracts | Other accrued liabilities | ||
Derivatives, Fair Value | ||
Liability | 7.8 | 4.5 |
Commodity contracts | Other current assets | ||
Derivatives, Fair Value | ||
Asset | 0.5 | |
Commodity contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset | $ 0.1 | |
Commodity contracts | Other accrued liabilities | ||
Derivatives, Fair Value | ||
Liability | $ 0.7 |
FINANCIAL INSTRUMENTS - Net Gai
FINANCIAL INSTRUMENTS - Net Gain (Loss) Recognized in Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Fair Value Hedges | |||
Gain (loss) in income | $ 6.9 | $ 5.8 | $ (44.9) |
Foreign exchange contracts | Cost of products sold | |||
Fair Value Hedges | |||
Gain (loss) in income | 2.8 | 2.9 | (1.6) |
Foreign exchange contracts | Marketing, general and administrative expense | |||
Fair Value Hedges | |||
Gain (loss) in income | $ 4.1 | $ 2.9 | $ (43.3) |
FINANCIAL INSTRUMENTS - Gains (
FINANCIAL INSTRUMENTS - Gains (Losses) Recognized in AOCI (Details) - Cash Flow Hedging - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Derivative Instruments, Gains (Losses) | |||
Gains (losses) recognized in accumulated other comprehensive loss on derivatives | $ 0.8 | $ (0.8) | $ 0.1 |
Foreign exchange contracts | |||
Derivative Instruments, Gains (Losses) | |||
Gains (losses) recognized in accumulated other comprehensive loss on derivatives | 0.2 | (0.1) | 1.3 |
Commodity contracts | |||
Derivative Instruments, Gains (Losses) | |||
Gains (losses) recognized in accumulated other comprehensive loss on derivatives | $ 0.6 | $ (0.7) | $ (1.2) |
PENSION AND OTHER POSTRETIREM56
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 31, 2014 | Jul. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Components of net periodic benefit cost (credit) | ||||||
Recognized loss on settlements | $ 41.4 | |||||
U.S. | ||||||
Defined Benefit Plans | ||||||
Settlements | $ 70 | 69.2 | ||||
Projected benefit obligations | 1,033.7 | $ 1,088.9 | $ 1,161.1 | |||
Net actuarial loss (gain) | 39.1 | 21.1 | 135.6 | |||
Components of net periodic benefit cost (credit) | ||||||
Recognized loss on settlements | 41.4 | |||||
Actuarial (gain) loss | $ 72 | $ 39.1 | (58.3) | |||
U.S. | Growth portfolio | ||||||
Defined Benefit Plans | ||||||
Target assets allocation (as a percent) | 65.00% | |||||
U.S. | Liability hedging portfolio | ||||||
Defined Benefit Plans | ||||||
Target assets allocation (as a percent) | 35.00% | |||||
Int'l | ||||||
Defined Benefit Plans | ||||||
Settlements | 13.3 | |||||
Projected benefit obligations | $ 762.9 | 674.7 | 737.1 | |||
Net actuarial loss (gain) | 48.9 | 11.3 | $ 51.3 | |||
Components of net periodic benefit cost (credit) | ||||||
Actuarial (gain) loss | $ 123.8 | $ (1.4) | ||||
Int'l | Equity Securities | ||||||
Defined Benefit Plans | ||||||
Target assets allocation (as a percent) | 38.00% | |||||
Int'l | Fixed income securities and cash | ||||||
Defined Benefit Plans | ||||||
Target assets allocation (as a percent) | 49.00% | |||||
Int'l | Insurance contracts and other investments | ||||||
Defined Benefit Plans | ||||||
Target assets allocation (as a percent) | 13.00% | |||||
SHARE Plan | ||||||
Defined Benefit Plans | ||||||
Net actuarial loss (gain) | $ 12 | $ 20 |
PENSION AND OTHER POSTRETIREM57
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Benefit Plans (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 |
U.S. | |||
Defined Benefit Plans | |||
Total plan assets | $ 672.1 | $ 704.9 | $ 778.9 |
U.S. | Total | |||
Defined Benefit Plans | |||
Total plan assets | 672.1 | 704.9 | |
U.S. | Liability hedging portfolio | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 269 | 335.9 | |
U.S. | Growth portfolio | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 403.1 | 368.9 | |
U.S. | Other assets | Total | |||
Defined Benefit Plans | |||
Other assets (payables) | 0.1 | ||
Int'l | |||
Defined Benefit Plans | |||
Total plan assets | 584.2 | 552.1 | $ 618.1 |
Int'l | Total | |||
Defined Benefit Plans | |||
Total plan assets | 584.2 | 552.1 | |
Int'l | Cash | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 3 | 0.8 | |
Int'l | Pooled funds - Fixed income securities | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 284.2 | 275.7 | |
Int'l | Insurance contracts | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 30.5 | 21.4 | |
Int'l | Equity Securities | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 223.4 | 218.1 | |
Int'l | Other investments | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 43.1 | 36.1 | |
Int'l | Quoted Prices in Active Markets (Level 1) | Cash | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 3 | 0.8 | |
Int'l | Significant Other Unobservable Inputs (Level 3) | Insurance contracts | |||
Defined Benefit Plans | |||
Total plan assets at fair value | $ 30.5 | $ 21.4 |
PENSION AND OTHER POSTRETIREM58
PENSION AND OTHER POSTRETIREMENT BENEFITS - Reconciliation For Assets Measure At Fair Value Using Level 3 (Details) - Int'l $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($) | |
Reconciliation of Level 3 assets | ||
Impact of changes in foreign currency exchange rates | $ (51.1) | $ (52.1) |
Significant Other Unobservable Inputs (Level 3) | Insurance contracts | ||
Reconciliation of Level 3 assets | ||
Balance at the beginning of the period | 21.4 | |
Acquisition | 8.9 | |
Net realized and unrealized gain | 0.5 | |
Purchases | 2.6 | |
Settlements | (1.5) | |
Impact of changes in foreign currency exchange rates | (1.4) | |
Balance at the end of the period | $ 30.5 | $ 21.4 |
Belgium | Mactac Acquisition | ||
Reconciliation of Level 3 assets | ||
Number of plans | item | 2 |
PENSION AND OTHER POSTRETIREM59
PENSION AND OTHER POSTRETIREMENT BENEFITS One-Percentage-Point Change Assumed (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Defined Benefit Plans | |
Healthcare cost trend rate assumed for 2016 (as a percent) | 7.00% |
Healthcare cost trend rate by 2024 (as a percent) | 5.00% |
One-percentage-point change in assumed health care cost trend rates | |
Effect of one-percentage-point increase on total of service and interest cost components | $ 0.01 |
Effect of one-percentage-point decrease on total of service and interest cost components | (0.01) |
Effect of one-percentage-point increase on postretirement benefit obligations | 0.3 |
Effect of one-percentage-point decrease on postretirement benefit obligations | $ (0.3) |
U.S. Postretirement Health Benefits | |
Defined Benefit Plans | |
Maximum age for which postretirement benefits are provided | 65 years |
Minimum age for which supplemental Medicare benefits are provided | 65 years |
PENSION AND OTHER POSTRETIREM60
PENSION AND OTHER POSTRETIREMENT BENEFITS - Change in Projected Benefit Obligations (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jul. 02, 2016USD ($) | Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($) | |
U.S. | |||
Change in projected benefit obligations | |||
Projected benefit obligations at beginning of year | $ 1,088.9 | $ 1,161.1 | |
Service cost | 0.4 | 0.4 | |
Interest cost | 34.4 | 45.8 | |
Actuarial (gain) loss | $ 72 | 39.1 | (58.3) |
Benefits paid | (59.9) | (60.1) | |
Settlements | $ (70) | (69.2) | |
Projected benefit obligations at end of year | 1,033.7 | 1,088.9 | |
Accumulated benefit obligations at end of year | 1,033.7 | 1,088.9 | |
Int'l | |||
Change in projected benefit obligations | |||
Projected benefit obligations at beginning of year | 674.7 | 737.1 | |
Service cost | 13.9 | 13.8 | |
Interest cost | 16.4 | 17.3 | |
Participant contribution | 2.9 | 3.1 | |
Amendments | (0.6) | (0.7) | |
Actuarial (gain) loss | 123.8 | (1.4) | |
Plan transfers | 2.5 | ||
Acquisition | 14.6 | ||
Benefits paid | (21.8) | (19) | |
Curtailments | (0.3) | (2.7) | |
Settlements | (13.3) | ||
Foreign currency translation | (60.7) | (62) | |
Projected benefit obligations at end of year | 762.9 | 674.7 | |
Accumulated benefit obligations at end of year | $ 704.8 | 625.4 | |
Int'l | Mactac Acquisition | Belgium | |||
Change in projected benefit obligations | |||
Number of plans | item | 2 | ||
U.S. Postretirement Health Benefits | |||
Change in projected benefit obligations | |||
Projected benefit obligations at beginning of year | $ 5.9 | 8 | |
Interest cost | 0.2 | 0.2 | |
Participant contribution | 0.5 | 0.8 | |
Actuarial (gain) loss | (0.2) | (1.4) | |
Benefits paid | (1.4) | (1.7) | |
Projected benefit obligations at end of year | $ 5 | $ 5.9 |
PENSION AND OTHER POSTRETIREM61
PENSION AND OTHER POSTRETIREMENT BENEFITS - Change in Plan Assets (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($) | |
U.S. | ||
Change in plan assets | ||
Plan assets at the beginning of year | $ 704.9 | $ 778.9 |
Actual return on plan assets | 42.9 | (28.3) |
Employer contributions | 53.4 | 14.4 |
Benefits paid | (59.9) | (60.1) |
Settlements | (69.2) | |
Plan assets at the end of year | 672.1 | 704.9 |
Int'l | ||
Change in plan assets | ||
Plan assets at the beginning of year | 552.1 | 618.1 |
Actual return on plan assets | 79.4 | (7.4) |
Plan transfers | (0.3) | |
Acquisition | 8.9 | |
Employer contributions | 13.8 | 14.3 |
Participant contributions | 2.9 | 3.1 |
Benefits paid | (21.8) | (19) |
Settlements | (4.6) | |
Foreign currency translation | (51.1) | (52.1) |
Plan assets at the end of year | $ 584.2 | 552.1 |
Int'l | Mactac Acquisition | Belgium | ||
Change in plan assets | ||
Number of plans | item | 2 | |
U.S. Postretirement Health Benefits | ||
Change in plan assets | ||
Employer contributions | $ 0.9 | 0.9 |
Participant contributions | 0.5 | 0.8 |
Benefits paid | $ (1.4) | $ (1.7) |
PENSION AND OTHER POSTRETIREM62
PENSION AND OTHER POSTRETIREMENT BENEFITS - Funded Status of the Plan (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 |
U.S. plans | |||
Pension plans with projected benefit obligations in excess of plan assets | |||
Projected benefit obligation in excess of plan assets | $ 1,800 | $ 1,770 | |
Fair value of plan assets in excess of plan assets | 1,260 | 1,260 | |
Pension plans with accumulated benefit obligations in excess of plan assets | |||
Accumulated benefit obligations | 1,740 | 1,380 | |
Fair value of plan assets | 1,260 | 910.9 | |
U.S. | |||
Funded status of the plans | |||
Other accrued liabilities | (13.5) | (13.4) | |
Long-term retirement benefits and other liabilities | (348.1) | (370.6) | |
Plan assets less than benefit obligations | $ (361.6) | $ (384) | |
Weighted-average assumptions used to determine year-end benefit obligations | |||
Discount rate (as a percent) | 4.25% | 4.55% | 4.00% |
Int'l | |||
Funded status of the plans | |||
Other accrued liabilities | $ (2) | $ (2.2) | |
Long-term retirement benefits and other liabilities | (176.7) | (120.4) | |
Plan assets less than benefit obligations | $ (178.7) | $ (122.6) | |
Weighted-average assumptions used to determine year-end benefit obligations | |||
Discount rate (as a percent) | 2.12% | 2.95% | 2.54% |
Compensation rate increase | 2.27% | 2.21% | 2.22% |
U.S. Postretirement Health Benefits | |||
Funded status of the plans | |||
Other accrued liabilities | $ (0.8) | $ (1.2) | |
Long-term retirement benefits and other liabilities | (4.2) | (4.7) | |
Plan assets less than benefit obligations | $ (5) | $ (5.9) | |
Weighted-average assumptions used to determine year-end benefit obligations | |||
Discount rate (as a percent) | 3.95% | 4.13% | 3.50% |
PENSION AND OTHER POSTRETIREM63
PENSION AND OTHER POSTRETIREMENT BENEFITS - Pre-tax Amount Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 |
U.S. | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | $ 564.2 | $ 585.5 |
Prior service cost (credit) | 17.5 | 18.7 |
Net amount recognized in accumulated other comprehensive loss | 581.7 | 604.2 |
Int'l | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | 213.6 | 171.9 |
Prior service cost (credit) | (4.9) | (4.9) |
Net transition obligation | 0.2 | 0.3 |
Net amount recognized in accumulated other comprehensive loss | 208.9 | 167.3 |
U.S. Postretirement Health Benefits | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | 18.5 | 20.4 |
Prior service cost (credit) | (16.4) | (19.6) |
Net amount recognized in accumulated other comprehensive loss | $ 2.1 | $ 0.8 |
PENSION AND OTHER POSTRETIREM64
PENSION AND OTHER POSTRETIREMENT BENEFITS - Pre-tax Amount Recognized in Other Comprehensive Loss (Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
U.S. | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | $ 39.1 | $ 21.1 | $ 135.6 |
Amortization of unrecognized net actuarial loss | (19) | (20) | (16.2) |
Amortization of unrecognized prior service (cost) credit | (1.2) | (1.2) | (1.2) |
Settlements | (41.4) | (0.6) | |
Net amount recognized in other comprehensive (income) loss | (22.5) | (0.1) | 117.6 |
Int'l | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | 48.9 | 11.3 | 51.3 |
Prior service cost (credit) | (0.6) | (0.7) | (7.3) |
Amortization of unrecognized net actuarial loss | (7) | (9.4) | (5.2) |
Amortization of unrecognized prior service (cost) credit | 0.4 | 0.3 | (0.4) |
Net transition obligation | (0.1) | ||
Curtailments | 0.2 | (0.6) | |
Settlements | (4.3) | (0.4) | |
Net amount recognized in other comprehensive (income) loss | 41.6 | (2.6) | 37.4 |
U.S. Postretirement Health Benefits | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | (0.2) | (1.4) | 0.3 |
Amortization of unrecognized net actuarial loss | (1.7) | (2.2) | (2.8) |
Amortization of unrecognized prior service (cost) credit | 3.2 | 3.3 | 3.3 |
Net amount recognized in other comprehensive (income) loss | $ 1.3 | $ (0.3) | $ 0.8 |
PENSION AND OTHER POSTRETIREM65
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jul. 02, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Components of net periodic benefit cost (credit) | ||||
Recognized loss on settlements | $ 41.4 | |||
U.S. | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 0.4 | $ 0.4 | ||
Interest cost | 34.4 | 45.8 | ||
Actuarial (gain) loss | $ 72 | 39.1 | (58.3) | |
Recognized loss on settlements | $ 41.4 | |||
U.S. | Continuing operations | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 0.4 | 0.4 | $ 0.4 | |
Interest cost | 34.4 | 45.8 | 47.9 | |
Actuarial (gain) loss | (0.2) | 0.4 | 4 | |
Expected return on plan assets | (42.7) | (51.5) | (51.9) | |
Amortization of actuarial loss | 19 | 20 | 16.2 | |
Amortization of prior service cost (credit) | 1.2 | 1.2 | 1.2 | |
Recognized loss on settlements | 41.4 | 0.6 | ||
Net periodic benefit cost (credit) | 53.5 | 16.3 | 18.4 | |
Int'l | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 13.9 | 13.8 | ||
Interest cost | 16.4 | 17.3 | ||
Actuarial (gain) loss | 123.8 | (1.4) | ||
Amortization of transition obligation | (0.1) | |||
Int'l | Continuing operations | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 13.9 | 13.8 | 12.9 | |
Interest cost | 16.4 | 17.3 | 23.8 | |
Expected return on plan assets | (21.4) | (21.5) | (26) | |
Amortization of actuarial loss | 7 | 9.4 | 5.2 | |
Amortization of prior service cost (credit) | (0.4) | (0.3) | 0.4 | |
Amortization of transition obligation | 0.1 | |||
Recognized (gain) loss on curtailments | (0.2) | (0.2) | 0.6 | |
Recognized loss on settlements | 4.3 | 0.4 | ||
Net periodic benefit cost (credit) | 15.4 | 22.8 | 17.3 | |
U.S. Postretirement Health Benefits | ||||
Components of net periodic benefit cost (credit) | ||||
Interest cost | 0.2 | 0.2 | ||
Actuarial (gain) loss | (0.2) | (1.4) | ||
U.S. Postretirement Health Benefits | Continuing operations | ||||
Components of net periodic benefit cost (credit) | ||||
Interest cost | 0.1 | 0.3 | 0.3 | |
Amortization of actuarial loss | 1.7 | 2.2 | 2.8 | |
Amortization of prior service cost (credit) | (3.2) | (3.3) | (3.3) | |
Net periodic benefit cost (credit) | $ (1.4) | $ (0.8) | $ (0.2) |
PENSION AND OTHER POSTRETIREM66
PENSION AND OTHER POSTRETIREMENT BENEFITS - Weighted-Average Assumptions for Determining Net Periodic Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
U.S. | |||
Weighted-average assumptions used for determining net periodic cost | |||
Discount rate | 4.55% | 4.00% | 4.85% |
Expected return on assets | 7.25% | 7.50% | 7.75% |
Company's contribution to the defined benefit plan in the next fiscal year | $ 13.8 | ||
Int'l | |||
Weighted-average assumptions used for determining net periodic cost | |||
Discount rate | 2.95% | 2.54% | 3.88% |
Expected return on assets | 4.14% | 4.27% | 4.82% |
Compensation rate increase | 2.24% | 2.22% | 2.24% |
Company's contribution to the defined benefit plan in the next fiscal year | $ 13 | ||
U.S. Postretirement Health Benefits | |||
Weighted-average assumptions used for determining net periodic cost | |||
Discount rate | 4.13% | 3.50% | 3.45% |
Company's contribution to the defined benefit plan in the next fiscal year | $ 0.8 |
PENSION AND OTHER POSTRETIREM67
PENSION AND OTHER POSTRETIREMENT BENEFITS - Future Benefit Payments (Details) $ in Millions | Dec. 31, 2016USD ($) |
U.S. | |
Future Benefit Payments | |
2,017 | $ 61.6 |
2,018 | 83.2 |
2,019 | 58.9 |
2,020 | 59.1 |
2,021 | 60.7 |
2022 - 2026 | 305.1 |
Int'l | |
Future Benefit Payments | |
2,017 | 16 |
2,018 | 16.7 |
2,019 | 20.1 |
2,020 | 19.2 |
2,021 | 19.5 |
2022 - 2026 | 120 |
U.S. Postretirement Health Benefits | |
Future Benefit Payments | |
2,017 | 0.8 |
2,018 | 0.5 |
2,019 | 0.5 |
2,020 | 0.4 |
2,021 | 0.4 |
2022 - 2026 | $ 1.5 |
PENSION AND OTHER POSTRETIREM68
PENSION AND OTHER POSTRETIREMENT BENEFITS - Estimated Amortization Amounts in AOCI (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
U.S. | |
Estimated amortization amounts in AOCI | |
Net actuarial loss | $ 18.4 |
Prior service cost (credit) | 0.9 |
Net loss (gain) to be recognized | 19.3 |
Int'l | |
Estimated amortization amounts in AOCI | |
Net actuarial loss | 10.1 |
Prior service cost (credit) | (0.4) |
Net transition obligation | 0.1 |
Net loss (gain) to be recognized | 9.8 |
U.S. Postretirement Health Benefits | |
Estimated amortization amounts in AOCI | |
Net actuarial loss | 1.6 |
Prior service cost (credit) | (3.3) |
Net loss (gain) to be recognized | $ (1.7) |
PENSION AND OTHER POSTRETIREM69
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Contribution and Other Retirement Plans (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Defined contribution and other retirement plans | |||
Recognized defined contribution plan cost | $ 20 | $ 20.2 | $ 19.4 |
Deferred compensation plan accrued | $ 78.7 | $ 77.9 | |
Minimum age of participant for termination of employment to determine forfeiture of interest on contribution | 55 years | ||
DSUs outstanding under directors deferred equity compensation plan for non-employee directors | 0.1 | 0.1 | |
Value of DSUs outstanding under directors deferred equity compensation plan for non-employee directors | $ 10.2 | $ 8 | |
Other assets | |||
Defined contribution and other retirement plans | |||
Cash surrender value included in other assets | $ 230.6 | $ 227.1 |
COMMITMENTS (Details)
COMMITMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Minimum annual rental commitments on operating leases | |||
2,017 | $ 40 | ||
2,018 | 29.6 | ||
2,019 | 20 | ||
2,020 | 13.9 | ||
2,021 | 8.8 | ||
2022 and thereafter | 25.5 | ||
Total minimum lease payments | 137.8 | ||
Rent expense for operating leases from continuing operations | $ 58 | $ 58 | $ 67 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($) | |
Environmental Liabilities Associated with Remediation | ||
Environmental site contingency number of sites | item | 13 | |
Balance at beginning of year | $ 17.7 | $ 26.2 |
Charges (reversals), net | 11.6 | 1.2 |
Payments | (8) | (9.7) |
Balance at end of year | 21.3 | 17.7 |
Short term environmental liabilities | $ 8 | $ 7 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Assets | ||
Derivative assets | $ 5.2 | $ 5.6 |
Liabilities | ||
Derivative liabilities | 7.8 | 5.2 |
Recurring | ||
Assets | ||
Trading securities | 18.1 | 17.9 |
Derivative assets | 5.2 | 5.6 |
Bank drafts | 14.3 | 24.8 |
Liabilities | ||
Derivative liabilities | 7.8 | 5.2 |
Recurring | Cash and Cash Equivalents | ||
Assets | ||
Trading securities | 0.5 | 0.3 |
Recurring | Other current assets | ||
Assets | ||
Trading securities | 17.6 | 17.6 |
Quoted Prices in Active Markets (Level 1) | Recurring | ||
Assets | ||
Trading securities | 11.7 | 11.3 |
Derivative assets | 0.6 | |
Bank drafts | 14.3 | 24.8 |
Liabilities | ||
Derivative liabilities | 0.7 | |
Significant Other Observable Inputs (Level 2) | Recurring | ||
Assets | ||
Trading securities | 6.4 | 6.6 |
Derivative assets | 4.6 | 5.6 |
Liabilities | ||
Derivative liabilities | $ 7.8 | $ 4.5 |
Significant Other Unobservable Inputs (Level 3) | Minimum | ||
Mactac Acquisition | ||
Discount rate used to value the intangibles | 10.50% | |
Significant Other Unobservable Inputs (Level 3) | Maximum | ||
Mactac Acquisition | ||
Discount rate used to value the intangibles | 12.50% |
NET INCOME PER COMMON SHARE (De
NET INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Net income per common share amounts | |||||||||||
Income from continuing operations | $ 56.5 | $ 81.3 | $ 64.7 | $ 71.9 | $ 320.7 | $ 274.4 | $ 247.3 | ||||
Loss from discontinued operations, net of tax | (0.1) | (2.2) | |||||||||
Net income available to common shareholders | $ 62 | $ 89.1 | $ 80 | $ 89.6 | $ 57 | $ 81.7 | $ 63.7 | $ 71.9 | $ 320.7 | $ 274.3 | $ 245.1 |
Weighted average number of common shares outstanding | 89.1 | 91 | 93.8 | ||||||||
Dilutive shares (additional common shares issuable under stock-based awards) | 1.6 | 1.9 | 1.9 | ||||||||
Weighted average number of common shares outstanding, assuming dilution | 90.7 | 92.9 | 95.7 | ||||||||
Net income (loss) per common share: | |||||||||||
Continuing operations (in dollars per share) | $ 0.62 | $ 0.89 | $ 0.71 | $ 0.79 | $ 3.60 | $ 3.01 | $ 2.64 | ||||
Discontinued operations (in dollars per share) | 0.01 | (0.01) | (0.03) | ||||||||
Net income per common share (in dollars per share) | $ 0.70 | $ 1 | $ 0.90 | $ 1 | 0.63 | 0.89 | 0.70 | 0.79 | 3.60 | 3.01 | 2.61 |
Net income (loss) per common share, assuming dilution: | |||||||||||
Continuing operations (in dollars per share) | 0.61 | 0.87 | 0.69 | 0.78 | 3.54 | 2.95 | 2.58 | ||||
Discontinued operations (in dollars per share) | 0.01 | 0.01 | (0.01) | (0.02) | |||||||
Net income per common share, assuming dilution (in dollars per share) | $ 0.69 | $ 0.98 | $ 0.88 | $ 0.98 | $ 0.62 | $ 0.88 | $ 0.68 | $ 0.78 | $ 3.54 | $ 2.95 | $ 2.56 |
Stock-based compensation awards excluded from the computation of net income per common share, assuming dilution | 0.2 | 1 | 3 |
SUPPLEMENTAL EQUITY AND COMPR74
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 04, 2014 | |
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | ||||
Preferred stock, shares authorized | 5,000,000 | |||
Preferred stock, par value (in dollars per share) | $ 1 | |||
Preferred stock, outstanding shares | 0 | 0 | ||
Common stock, authorized shares | 400,000,000 | 400,000,000 | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||
Repurchase of common stock | 3,800,000 | |||
Repurchase of common stock, value | $ 262.4 | $ 232.3 | $ 355.5 | |
Share repurchase authorized amount | $ 500 | |||
Share repurchase remained authorized amount | $ 105 |
SUPPLEMENTAL EQUITY AND COMPR75
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION - Change in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | $ (683) | $ (545.5) | |
Other comprehensive (loss) income before reclassifications, net of tax | (115.9) | (158.4) | |
Reclassifications to net income, net of tax | 47 | 20.9 | |
Net current-year other comprehensive (loss) income, net of tax | (68.9) | (137.5) | $ (257.1) |
Balance at end of the year | (751.9) | (683) | (545.5) |
Foreign Currency Translation | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | (158.9) | (19.9) | |
Other comprehensive (loss) income before reclassifications, net of tax | (53.7) | (139) | |
Net current-year other comprehensive (loss) income, net of tax | (53.7) | (139) | |
Balance at end of the year | (212.6) | (158.9) | (19.9) |
Pension and Other Postretirement Benefits | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | (521.6) | (525.6) | |
Other comprehensive (loss) income before reclassifications, net of tax | (62.9) | (18.9) | |
Reclassifications to net income, net of tax | 44.2 | 22.9 | |
Net current-year other comprehensive (loss) income, net of tax | (18.7) | 4 | |
Balance at end of the year | (540.3) | (521.6) | $ (525.6) |
Cash Flow Hedges | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | (2.5) | ||
Other comprehensive (loss) income before reclassifications, net of tax | 0.7 | (0.5) | |
Reclassifications to net income, net of tax | 2.8 | (2) | |
Net current-year other comprehensive (loss) income, net of tax | 3.5 | (2.5) | |
Balance at end of the year | $ 1 | $ (2.5) |
SUPPLEMENTAL EQUITY AND COMPR76
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION - Reclassification Adjustment Out of Accumulated Other Comprehensive loss (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Amounts reclassified from Accumulated other comprehensive loss | |||||||
Cost of products sold | $ 4,386.8 | $ 4,321.1 | $ 4,679.1 | ||||
Interest expense | 59.9 | 60.5 | 63.3 | ||||
Income from continuing operations before taxes | 477.1 | 408.9 | 360.8 | ||||
Provision for income taxes | (156.4) | (134.5) | (113.5) | ||||
Income from continuing operations | $ 56.5 | $ 81.3 | $ 64.7 | $ 71.9 | 320.7 | 274.4 | 247.3 |
Income tax (benefit) expense allocated - Pension and other postretirement benefits: | |||||||
Net loss recognized from actuarial gain/loss and prior service cost/credit | (24.2) | (11.4) | (54.7) | ||||
Reclassifications to net income | 22.6 | 10.4 | 7.2 | ||||
Income tax (benefit) expense allocated - Cash flow hedges: | |||||||
Gains (losses) recognized on cash flow hedges | 0.1 | (0.3) | 0.1 | ||||
Reclassifications to net income | 1 | (0.5) | 0.3 | ||||
Income tax benefit related to items of other comprehensive loss | (0.5) | (1.8) | (47.1) | ||||
Amounts Reclassified from Accumulated other comprehensive Loss | |||||||
Amounts reclassified from Accumulated other comprehensive loss | |||||||
Income from continuing operations | (47) | (20.9) | (17.8) | ||||
Pension and Other Postretirement Benefits | Amounts Reclassified from Accumulated other comprehensive Loss | |||||||
Amounts reclassified from Accumulated other comprehensive loss | |||||||
Pension and other postretirement benefits | (66.8) | (33.3) | (24.1) | ||||
Provision for income taxes | 22.6 | 10.4 | 7.2 | ||||
Income from continuing operations | (44.2) | (22.9) | (16.9) | ||||
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive Loss | |||||||
Amounts reclassified from Accumulated other comprehensive loss | |||||||
Income from continuing operations before taxes | (3.8) | 2.5 | (1.2) | ||||
Provision for income taxes | 1 | (0.5) | 0.3 | ||||
Income from continuing operations | (2.8) | 2 | (0.9) | ||||
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive Loss | Foreign exchange contracts | |||||||
Amounts reclassified from Accumulated other comprehensive loss | |||||||
Cost of products sold | (3) | 3.9 | (1.2) | ||||
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive Loss | Commodity contracts | |||||||
Amounts reclassified from Accumulated other comprehensive loss | |||||||
Cost of products sold | (0.7) | (1.3) | 0.1 | ||||
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive Loss | Interest rate contracts | |||||||
Amounts reclassified from Accumulated other comprehensive loss | |||||||
Interest expense | $ (0.1) | $ (0.1) | $ (0.1) |
LONG-TERM INCENTIVE COMPENSAT77
LONG-TERM INCENTIVE COMPENSATION (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)item$ / shares | Jan. 02, 2016USD ($)shares | Jan. 03, 2015USD ($)shares | |
Stock-Based Compensation | |||
Stock option granted | shares | 0 | 0 | |
Weighted-average fair value per share of options granted | $ / shares | $ 14.17 | ||
Total intrinsic value of stock options exercised | $ 31.7 | $ 43.3 | $ 15.4 |
Tax deductions associated with option exercises | 11.3 | 15.6 | 5.3 |
Proceeds from exercises of stock options, net | $ 71 | 104 | 34.2 |
Weighted average assumptions | |||
Risk-free interest rate | 1.75% | ||
Expected stock price volatility | 24.58% | ||
Expected dividend yield | 2.58% | ||
Expected option term | 6 years 6 months | ||
Continuing operations | Marketing, general and administrative expense | |||
Stock-Based Compensation | |||
Stock-based compensation expense | $ 27.2 | 26.3 | 28.3 |
Tax benefit related to Stock-based compensation | 8.5 | 8.2 | 10.5 |
Long-term incentive units | Continuing operations | Marketing, general and administrative expense | |||
Stock-Based Compensation | |||
Cash-based LTI awards compensation expense | 23.8 | 27.1 | 17.8 |
Employee Service Cash Award Tax Benefit from Compensation Expense | $ 7.8 | $ 8.6 | $ 5.7 |
Stock Options | |||
Stock-Based Compensation | |||
Option expiration period | 10 years | ||
Stock Options | Ratable vesting | Non-employee Directors | |||
Stock-Based Compensation | |||
Vesting period | 3 years | ||
Stock Options | Ratable vesting | Employees | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Stock Options | Minimum | |||
Stock-Based Compensation | |||
Purchase price of common stock as a percentage of its fair market value granted to non-employee directors and employees | 100.00% | ||
Market-leveraged stock units (MSUs) | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Number of tranches represented by each vesting period | item | 1 | ||
Number of tranches represented by the entire vesting period | item | 4 | ||
Market-leveraged stock units (MSUs) | Ratable vesting | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Market-leveraged stock units (MSUs) | Minimum | Ratable vesting | |||
Stock-Based Compensation | |||
Shares issued (as a percent) | 0.00% | ||
Market-leveraged stock units (MSUs) | Maximum | Ratable vesting | |||
Stock-Based Compensation | |||
Shares issued (as a percent) | 200.00% | ||
Market-leveraged long-term incentive units | Ratable vesting | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Performance long-term incentive units | Cliff vesting | |||
Stock-Based Compensation | |||
Vesting period | 3 years | ||
Performance long-term incentive units | Minimum | Cliff vesting | |||
Stock-Based Compensation | |||
Shares issued (as a percent) | 0.00% | ||
Performance long-term incentive units | Maximum | Cliff vesting | |||
Stock-Based Compensation | |||
Shares issued (as a percent) | 200.00% | ||
Performance Units (PUs) | Cliff vesting | |||
Stock-Based Compensation | |||
Vesting period | 3 years | ||
Performance Units (PUs) | Minimum | Cliff vesting | |||
Stock-Based Compensation | |||
Shares issued (as a percent) | 0.00% | ||
Performance Units (PUs) | Maximum | Cliff vesting | |||
Stock-Based Compensation | |||
Shares issued (as a percent) | 200.00% | ||
Restricted Stock Units (RSUs) | Non-employee Directors | |||
Stock-Based Compensation | |||
Vesting period | 3 years | ||
Restricted Stock Units (RSUs) | Employees | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Unvested Stock Options, Performance Units, Restricted Stock Units and Market-leveraged stock units | Continuing operations | |||
Stock-Based Compensation | |||
Unrecognized compensation cost related to share based compensation cost | $ 37 | ||
Unrecognized compensation cost weighted average recognition period | 2 years |
LONG-TERM INCENTIVE COMPENSAT78
LONG-TERM INCENTIVE COMPENSATION - Number of Options, Weighted-average Exercise Price (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Number of options | ||
Outstanding beginning balance, options | 2,369,900 | |
Granted, Options | 141,100 | |
Exercised, options | (1,384,100) | |
Forfeited or expired, options | (11,700) | |
Outstanding ending balance, options | 1,115,200 | 2,369,900 |
Options vested and expected to vest, options | 1,091,300 | |
Options exercisable | 974,100 | |
Weighted-average exercise price | ||
Outstanding, Weighted-average exercise price, beginning balance | $ 45.30 | |
Granted, weighted-average exercise price | 73.96 | |
Exercised, weighted-average exercise price | 51.35 | |
Forfeited or expired, Weighted-average exercise price | 58.16 | |
Outstanding, Weighted-average exercise price, ending balance | 41.29 | $ 45.30 |
Options vested and expected to vest, Weighted-average exercise price | 40.57 | |
Options exercisable ,Weighted-average exercise price | $ 36.55 | |
Weighted-average remaining contractual life | ||
Outstanding ,Weighted-average remaining contractual life beginning balance | 4 years 8 months 19 days | 3 years 8 months 5 days |
Outstanding ,Weighted-average remaining contractual life ending balance | 4 years 8 months 19 days | 3 years 8 months 5 days |
Options vested or expected to vest, Weighted-average remaining contractual life | 4 years 7 months 13 days | |
Options exercisable, Weighted-average remaining contractual life | 4 years 15 days | |
Aggregate intrinsic value | ||
Outstanding, Aggregate intrinsic value beginning balance | $ 43.8 | |
Outstanding, Aggregate intrinsic value ending balance | 32.8 | $ 43.8 |
Options vested and expected to vest, Aggregate Intrinsic Value | 32.8 | |
Options exercisable, Aggregate Intrinsic Value | $ 32.8 |
LONG-TERM INCENTIVE COMPENSAT79
LONG-TERM INCENTIVE COMPENSATION - Number of Awards, Weighted-average Grant-date Fair Value (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Performance Units (PUs) | |||
Number of awards | |||
Unvested at January 3, 2015 | 447,100 | ||
Granted at target | 244,700 | ||
Adjustments for above-target performance | 155,600 | ||
Vested | (315,600) | ||
Forfeited/cancelled | (41,000) | ||
Unvested at January 2, 2016 | 490,800 | 447,100 | |
Fair value | $ 13.8 | $ 12.2 | |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 47.63 | ||
Weighted-average grant-date fair value, granted at target | 68.04 | $ 51.37 | $ 47.85 |
Weighted-average grant-date fair value, Adjustment for above-target performance | 43.91 | ||
Weighted-average grant-date fair value, vested | 43.82 | ||
Weighted-average grant-date fair value, forfeited/Cancelled | 54.84 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 58.47 | $ 47.63 | |
Market-leveraged stock units (MSUs) | |||
Number of awards | |||
Unvested at January 3, 2015 | 606,100 | ||
Granted at target | 182,900 | ||
Adjustments for above-target performance | 67,400 | ||
Vested | (264,300) | ||
Forfeited/cancelled | (61,400) | ||
Unvested at January 2, 2016 | 530,700 | 606,100 | |
Fair value | $ 12.4 | $ 9.8 | $ 5.6 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 55.04 | ||
Weighted-average grant-date fair value, granted at target | 72.93 | $ 56.46 | $ 52.76 |
Weighted-average grant-date fair value, Adjustment for above-target performance | 51.58 | ||
Weighted-average grant-date fair value, vested | 46.88 | ||
Weighted-average grant-date fair value, forfeited/Cancelled | 57.80 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 62.09 | $ 55.04 | |
Restricted Stock Units (RSUs) | |||
Number of awards | |||
Unvested at January 3, 2015 | 214,600 | ||
Granted at target | 52,800 | ||
Vested | (147,300) | ||
Forfeited/cancelled | (2,400) | ||
Unvested at January 2, 2016 | 117,700 | 214,600 | |
Fair value | $ 5.3 | $ 8.4 | $ 9.5 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 40.96 | ||
Weighted-average grant-date fair value, granted at target | 67.66 | $ 53.29 | $ 45.91 |
Weighted-average grant-date fair value, vested | 36.14 | ||
Weighted-average grant-date fair value, forfeited/Cancelled | 38.74 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 58.87 | $ 40.96 |
COST REDUCTION ACTIONS (Details
COST REDUCTION ACTIONS (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($)item | Jan. 03, 2015USD ($)item | |
2015/2016 Actions | |||
Restructuring Charges: | |||
Charges (Reversals), net | $ | $ 20.9 | $ 26.1 | |
Number of positions reduced as a result of Cost Reduction Actions | 440 | 430 | |
Number of positions remaining | 0 | ||
2014/2015 Actions | |||
Restructuring Charges: | |||
Charges (Reversals), net | $ | $ 33.4 | $ 66.5 | |
Number of positions reduced as a result of Cost Reduction Actions | 605 | 1,420 | |
Number of positions remaining | 0 |
COST REDUCTION ACTIONS - Restru
COST REDUCTION ACTIONS - Restructuring Charges and Payments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Severance and related costs | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | $ 4 | $ 1.9 | $ 3.6 | $ 5.2 | $ 17.5 | $ 4.7 | $ 16.8 | $ 13.5 | $ 14.7 | $ 52.5 | $ 54.7 |
2015/2016 Actions | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | 20.9 | 26.1 | |||||||||
2015/2016 Actions | Severance and related costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 8.4 | 8.4 | |||||||||
Charges (Reversals), net | 15.7 | 22.7 | |||||||||
Cash payments | (20.9) | (14.3) | |||||||||
Foreign Currency Translation | 0.1 | ||||||||||
Ending Balance | 3.3 | 8.4 | 3.3 | 8.4 | |||||||
2015/2016 Actions | Asset impairment charges | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | 4.1 | 2.9 | |||||||||
Non-cash Impairment | (4.1) | (2.9) | |||||||||
2015/2016 Actions | Lease cancellation costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 0.2 | 0.2 | |||||||||
Charges (Reversals), net | 1.1 | 0.5 | |||||||||
Cash payments | (1.1) | (0.3) | |||||||||
Ending Balance | 0.2 | 0.2 | 0.2 | 0.2 | |||||||
2014/2015 Actions | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | 33.4 | 66.5 | |||||||||
2014/2015 Actions | Severance and related costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 4.8 | 16.8 | 4.8 | 16.8 | |||||||
Charges (Reversals), net | (0.9) | 29.8 | |||||||||
Cash payments | (3.2) | (40.9) | |||||||||
Foreign Currency Translation | (0.9) | ||||||||||
Ending Balance | 0.7 | 4.8 | 0.7 | 4.8 | 16.8 | ||||||
2014/2015 Actions | Asset impairment charges | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | 3.3 | ||||||||||
Non-cash Impairment | (3.3) | ||||||||||
2014/2015 Actions | Lease cancellation costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 0.1 | 0.1 | |||||||||
Charges (Reversals), net | 0.3 | ||||||||||
Cash payments | (0.4) | ||||||||||
Ending Balance | 0.1 | ||||||||||
Prior actions | Severance and related costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 0.7 | 0.8 | 0.7 | 0.8 | |||||||
Charges (Reversals), net | (0.1) | ||||||||||
Foreign Currency Translation | (0.1) | ||||||||||
Ending Balance | 0.6 | 0.7 | 0.6 | 0.7 | 0.8 | ||||||
Total | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | $ 14.1 | $ 17.7 | 14.1 | 17.7 | |||||||
Charges (Reversals), net | 19.9 | 59.5 | |||||||||
Cash payments | (25.2) | (55.9) | |||||||||
Non-cash Impairment | (4.1) | (6.2) | |||||||||
Foreign Currency Translation | 0.1 | (1) | |||||||||
Ending Balance | $ 4.8 | $ 14.1 | $ 4.8 | $ 14.1 | $ 17.7 |
COST REDUCTION ACTIONS - Rest82
COST REDUCTION ACTIONS - Restructuring Charges (Details) - Continuing operations - Other expense, net - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Restructuring Charges: | |||
Restructuring charges | $ 19.9 | $ 59.5 | $ 66.1 |
Label and Graphic Materials | |||
Restructuring Charges: | |||
Restructuring charges | 8.5 | 13.6 | 40.1 |
Retail Branding and Information Solutions | |||
Restructuring Charges: | |||
Restructuring charges | 10.5 | 35.7 | 21.3 |
Industrial and Healthcare Materials | |||
Restructuring Charges: | |||
Restructuring charges | $ 0.9 | 8 | 4.3 |
Corporate | |||
Restructuring Charges: | |||
Restructuring charges | $ 2.2 | $ 0.4 |
TAXES BASED ON INCOME (Details)
TAXES BASED ON INCOME (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Current: | |||
U.S. federal tax | $ 10.1 | $ 26.4 | $ 14.5 |
State taxes | 0.6 | (0.1) | (0.2) |
International taxes | 77.3 | 92.7 | 116 |
Total | 88 | 119 | 130.3 |
Deferred: | |||
U.S. federal tax | 64.4 | 6.3 | (16.1) |
State taxes | (3) | 0.5 | 1.9 |
International taxes | 7 | 8.7 | (2.6) |
Total | 68.4 | 15.5 | (16.8) |
Provision for income taxes | $ 156.4 | $ 134.5 | $ 113.5 |
TAXES BASED ON INCOME - Increas
TAXES BASED ON INCOME - Increase (Decrease) in Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
TAXES BASED ON INCOME | |||
Computed tax at 35% of income before taxes | $ 167 | $ 143.1 | $ 126.2 |
U.S statutory rate | 35.00% | 35.00% | 35.00% |
Increase (decrease) in taxes resulting from: | |||
State taxes, net of federal tax benefit | $ 2.2 | $ 1.3 | $ 1.4 |
Foreign earnings taxed at different rates | 27 | (7.5) | (14.9) |
Valuation allowance | (11.9) | 0.9 | 9.9 |
Corporate-owned life insurance | (4.3) | (1.9) | (4.2) |
U.S. federal research and development tax credits | (2.9) | (2.6) | (1.6) |
Tax contingencies and audit settlements | (20.7) | 5.1 | (1.5) |
Other items, net | (3.9) | (1.8) | |
Provision for income taxes | $ 156.4 | $ 134.5 | $ 113.5 |
TAXES BASED ON INCOME - Income
TAXES BASED ON INCOME - Income (Loss) from Continuing Operations before Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
TAXES BASED ON INCOME | |||
U.S. | $ 17.9 | $ 33.9 | $ (0.1) |
International | 459.2 | 375 | 360.9 |
Income from continuing operations before taxes | $ 477.1 | $ 408.9 | $ 360.8 |
TAXES BASED ON INCOME - Effecti
TAXES BASED ON INCOME - Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Effective tax rate (as a percent) | 32.80% | 32.90% | 31.50% |
Tax expense associated with the tax cost to repatriate non-permanently reinvested earnings of certain foreign subsidiaries | $ 7.6 | $ 20 | |
Tax expense related to the U.S. income and foreign withholding taxes resulting from changes in indefinite reinvestment assertions on certain foreign earnings | 46.3 | ||
Tax benefits on changes in certain tax reserves, including interest and penalties, resulting from settlements of audits | 16.8 | 5.8 | $ 10.2 |
Tax benefits on changes in certain tax reserves, including interest and penalties, resulting from expirations of statutes of limitations | 5.4 | 8.2 | 18.1 |
Tax benefit from the extension of the federal research and development credit | $ 2.6 | ||
Repatriation tax benefit related to certain foreign losses | (9.8) | ||
Tax expense from the taxable inclusion of a net foreign currency gain related to revaluation of certain intercompany loans | 9.1 | ||
Undistributed earnings of foreign subsidiaries considered indefinitely reinvested in foreign operations | 1,900 | ||
State | |||
Tax benefit on partial release of valuation allowances on state deferred tax assets | 3.6 | ||
State tax expense primarily related to gains arising as a result of certain foreign reorganizations | 2.5 | ||
Foreign | |||
Enacted tax rate changes in certain foreign jurisdictions | 8.4 | ||
Tax benefit from release of valuation allowance against certain deferred tax assets in a foreign jurisdiction associated with a structural simplification approved by tax authority | $ 6.7 | ||
Tax expense related to change in estimate of the potential outcome of uncertain tax issues in China and Germany | $ 10.6 |
TAXES BASED ON INCOME - Schedul
TAXES BASED ON INCOME - Schedule of Components of the Temporary Differences (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
TAXES BASED ON INCOME | ||
Net deferred tax liability associated with the future tax cost to repatriate non permanently reinvested earnings of the Company's foreign subsidiaries | $ 62.4 | $ 12.5 |
Contra deferred tax liability related to unrealized foreign exchange losses associated with earnings of foreign subsidiaries that can be repatriated to the U.S. without incurring any additional foreign U.S. federal income taxes | 0.3 | 2.7 |
Schedule of components of the temporary differences | ||
Accrued expenses not currently deductible | 42.1 | 35.1 |
Net operating losses | 195.9 | 253.3 |
Tax credit carryforwards | 111.3 | 114.4 |
Stock-based compensation | 28.4 | 37.3 |
Pension and other postretirement benefits | 207.7 | 204.6 |
Inventory reserves | 7.1 | 6.9 |
Other assets | 0.9 | 8.9 |
Valuation allowance | (60.4) | (73) |
Total deferred tax assets | 533 | 587.5 |
Depreciation and amortization | (86.1) | (101) |
Repatriation accrual | (62.1) | (9.8) |
Foreign operating loss recapture | (79.8) | (108.3) |
Other liabilities | (2.3) | (2.9) |
Total deferred tax liabilities | (230.3) | (222) |
Total net deferred tax assets from continuing operations | $ 302.7 | $ 365.5 |
TAXES BASED ON INCOME - Net Ope
TAXES BASED ON INCOME - Net Operating Loss and Tax Carryforwards (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | $ 111.3 | $ 114.4 |
Net operating loss and credit carryforward | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 689.9 | |
Tax credit carryforwards before tax effect | 111.3 | |
Expires in 2017 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 10 | |
Expires in 2018 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 12.6 | |
Expires in 2019 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 4.7 | |
Expires in 2020 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 5.4 | |
Expires in 2021 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 4.1 | |
Expires in 2022 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 9.6 | |
Expires in 2023 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 6.7 | |
Expires in 2024 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 11.2 | |
Expires in 2025 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 4.4 | |
Expires in 2026 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 0.5 | |
Expires in 2027 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 0.2 | |
Expires in 2028 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 0.5 | |
Indefinite life/no expiration | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 620 | |
Expires in 2017 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.6 | |
Expires in 2018 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 13.1 | |
Expires in 2019 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 33.1 | |
Expires in 2020 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 15.8 | |
Expires in 2021 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.4 | |
Expires in 2022 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 9.6 | |
Expires in 2023 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 5.1 | |
Expires in 2024 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.3 | |
Expires in 2025 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 7.2 | |
Expires in 2026 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 3.7 | |
Expires in 2027 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.2 | |
Expires in 2028 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.1 | |
Expires in 2029 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.1 | |
Expires in 2030 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.1 | |
Expires in 2031 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 0.1 | |
Expires in 2032 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 1.6 | |
Expires in 2033 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 2.9 | |
Expires in 2034 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 2.5 | |
Expires in 2035 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 3.4 | |
Expires in 2036 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 3 | |
Indefinite/no expiration | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards before tax effect | 8.4 | |
Foreign | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | $ 689.9 | $ 825.8 |
Foreign | Maximum | ||
Net operating loss and tax carryforwards | ||
Expected period for certain indefinite-lived foreign net operating losses to be fully utilized | 50 years | |
State | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | $ 516 | |
Operating loss carryforwards, valuation allowance | $ 513.7 |
TAXES BASED ON INCOME - Unrecog
TAXES BASED ON INCOME - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
TAXES BASED ON INCOME | |||
Unrecognized tax benefits | $ 89.5 | $ 107.3 | $ 122.6 |
Unrecognized tax benefits, if recognized, would reduce annual effective income tax rate | 71.5 | 89 | |
Interest expense and penalties recognized in current year for uncertain tax positions | (3.1) | 1.3 | $ (1.3) |
Accrued interest and penalties for uncertain tax positions, net of tax benefit | $ 22.3 | $ 26.1 |
TAXES BASED ON INCOME - Reconci
TAXES BASED ON INCOME - Reconciliation of the Beginning and Ending Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at beginning of year | $ 107.3 | $ 122.6 |
Additions for tax positions of the current year | 6.9 | 11.1 |
Reductions for tax positions of prior years | (15.7) | (4) |
Settlements with tax authorities | (2.1) | (4.5) |
Expirations of statutes of limitations | (4.2) | (8.6) |
Changes due to translation of foreign currencies | (2.7) | (9.3) |
Balance at end of year | 89.5 | $ 107.3 |
Reasonably possible decrease in unrecognized tax benefits from continuing operations during next 12 months | $ (16) |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Segment Information | |||||||||||
Net sales | $ 1,550.8 | $ 1,508.7 | $ 1,541.5 | $ 1,485.5 | $ 1,454.8 | $ 1,468.1 | $ 1,516 | $ 1,528 | $ 6,086.5 | $ 5,966.9 | $ 6,330.3 |
Interest expense | (59.9) | (60.5) | (63.3) | ||||||||
Income from continuing operations before taxes | 477.1 | 408.9 | 360.8 | ||||||||
Capital expenditures | 176.9 | 138.9 | 152.2 | ||||||||
Depreciation and amortization expense | 180.1 | 188.3 | 201.6 | ||||||||
Other expense, net | $ 4.8 | $ 4.6 | $ 50.2 | $ 5.6 | $ 19.3 | $ 7 | $ 27.7 | $ 14.3 | 65.2 | 68.3 | 68.2 |
Intersegment | |||||||||||
Segment Information | |||||||||||
Net sales | 73.5 | 79 | 85.8 | ||||||||
Label and Graphic Materials | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales | 4,187.3 | 4,032.1 | 4,298.7 | ||||||||
Income from continuing operations before taxes | 516.2 | 453.4 | 396.9 | ||||||||
Capital expenditures | 118.8 | 68.3 | 100.6 | ||||||||
Depreciation and amortization expense | 103.1 | 104.9 | 108.2 | ||||||||
Other expense, net | 13 | 12.1 | 41.5 | ||||||||
Label and Graphic Materials | Intersegment | |||||||||||
Segment Information | |||||||||||
Net sales | 63.4 | 61.3 | 64.2 | ||||||||
Retail Branding and Information Solutions | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales | 1,445.4 | 1,443.4 | 1,516 | ||||||||
Income from continuing operations before taxes | 102.6 | 51.6 | 68.5 | ||||||||
Capital expenditures | 50.9 | 51 | 37.3 | ||||||||
Depreciation and amortization expense | 64.3 | 70.6 | 79.2 | ||||||||
Other expense, net | 9.8 | 45.7 | 22 | ||||||||
Retail Branding and Information Solutions | Intersegment | |||||||||||
Segment Information | |||||||||||
Net sales | 2.9 | 2.9 | 2.5 | ||||||||
Industrial and Healthcare Materials | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales | 453.8 | 491.4 | 515.6 | ||||||||
Income from continuing operations before taxes | 54.6 | 57.1 | 45.2 | ||||||||
Capital expenditures | 7.2 | 19.6 | 14.3 | ||||||||
Depreciation and amortization expense | 12.7 | 12.8 | 14.2 | ||||||||
Other expense, net | 1.9 | 8 | 4.3 | ||||||||
Industrial and Healthcare Materials | Intersegment | |||||||||||
Segment Information | |||||||||||
Net sales | 7.2 | 14.8 | 19.1 | ||||||||
Industrial and Healthcare Materials | Performance Tapes | |||||||||||
Segment Information | |||||||||||
Net sales | 377.4 | 414.6 | 440 | ||||||||
Corporate | |||||||||||
Segment Information | |||||||||||
Income from continuing operations before taxes | (136.4) | (92.7) | (86.5) | ||||||||
Other expense, net | $ 40.5 | $ 2.5 | $ 0.4 |
SEGMENT INFORMATION - Other Exp
SEGMENT INFORMATION - Other Expenses, Net by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Other items: | |||||||||||
Net loss from curtailment and settlement of pension obligations | $ 41.4 | $ 0.3 | $ 41.4 | $ 0.3 | $ 1.6 | ||||||
Net gains on sales of assets | $ (1.4) | 0.3 | $ (1.7) | (1.1) | (1.7) | (2.5) | |||||
Transaction costs | 5 | ||||||||||
Legal settlements | $ 0.2 | (0.5) | (0.3) | ||||||||
Loss on sale of product line and related exit costs | 10.5 | ||||||||||
Indefinite-lived intangible asset impairment charge | 0 | 3 | |||||||||
Other expense, net | 4.8 | $ 4.6 | 50.2 | $ 5.6 | 19.3 | 7 | $ 27.7 | 14.3 | 65.2 | 68.3 | 68.2 |
Severance and related costs | |||||||||||
Restructuring charges: | |||||||||||
Restructuring charges | 4 | 1.9 | 3.6 | 5.2 | 17.5 | 4.7 | 16.8 | 13.5 | 14.7 | 52.5 | 54.7 |
Asset impairment charges and lease cancellation costs | |||||||||||
Restructuring charges: | |||||||||||
Restructuring charges | $ 1.3 | $ 0.7 | $ 2.8 | $ 0.4 | $ 1.5 | $ 1.9 | $ 3.2 | $ 0.4 | $ 5.2 | $ 7 | $ 11.4 |
SEGMENT INFORMATION - Property,
SEGMENT INFORMATION - Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | $ 1,550.8 | $ 1,508.7 | $ 1,541.5 | $ 1,485.5 | $ 1,454.8 | $ 1,468.1 | $ 1,516 | $ 1,528 | $ 6,086.5 | $ 5,966.9 | $ 6,330.3 |
Property, plant and equipment, net | |||||||||||
Property, plant and equipment, net | 915.2 | 847.9 | 915.2 | 847.9 | 875.3 | ||||||
U.S. | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 1,525.6 | 1,546.8 | 1,529.4 | ||||||||
Property, plant and equipment, net | |||||||||||
Property, plant and equipment, net | 278.5 | 263.4 | 278.5 | 263.4 | 261.5 | ||||||
Europe | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 1,838.8 | 1,753 | 2,074.4 | ||||||||
Asia | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 1,996.1 | 1,924 | 1,914.2 | ||||||||
China (Including Hong Kong) | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 1,140 | 1,140 | 1,110 | ||||||||
Latin America | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 450.5 | 466.3 | 522.9 | ||||||||
Other international | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 275.5 | 276.8 | 289.4 | ||||||||
International | |||||||||||
Property, plant and equipment, net | |||||||||||
Property, plant and equipment, net | $ 636.7 | $ 584.5 | $ 636.7 | $ 584.5 | $ 613.8 |
SUPPLEMENTAL FINANCIAL INFORM94
SUPPLEMENTAL FINANCIAL INFORMATION (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 |
Inventories | ||
Raw materials | $ 185 | $ 180.5 |
Work-in-progress | 156.8 | 143 |
Finished goods | 177.3 | 155.2 |
Inventories, net | $ 519.1 | $ 478.7 |
SUPPLEMENTAL FINANCIAL INFORM95
SUPPLEMENTAL FINANCIAL INFORMATION - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 |
Property, Plant and Equipment | |||
Property, plant and equipment | $ 2,661.4 | $ 2,599.9 | |
Accumulated depreciation | (1,746.2) | (1,752) | |
Property, plant and equipment, net | 915.2 | 847.9 | $ 875.3 |
Land | |||
Property, Plant and Equipment | |||
Property, plant and equipment | 29.3 | 30.4 | |
Buildings and improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment | 565.3 | 579.3 | |
Machinery and equipment | |||
Property, Plant and Equipment | |||
Property, plant and equipment | 1,949.5 | 1,922.3 | |
Construction-in-progress | |||
Property, Plant and Equipment | |||
Property, plant and equipment | $ 117.3 | $ 67.9 |
SUPPLEMENTAL FINANCIAL INFORM96
SUPPLEMENTAL FINANCIAL INFORMATION - Software, Equity Method Investment and Research and Development (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | Oct. 31, 2016 | |
Research and Development | ||||
Research and development expense | $ 89.7 | $ 91.9 | $ 102.5 | |
PragmatIC | ||||
Equity Method Investment | ||||
Interest of equity method investment | 22.60% | |||
Carrying value of investment | $ 9.5 | |||
Total software | ||||
Capitalized software costs | ||||
Software amortization expense from continuing operations | 37.9 | 37.6 | $ 36.4 | |
Total software | Other assets | ||||
Capitalized software costs | ||||
Cost | 415.5 | 398.2 | ||
Accumulated amortization | (297.9) | (270.8) | ||
Software, net | $ 117.6 | $ 127.4 |
SUPPLEMENTAL FINANCIAL INFORM97
SUPPLEMENTAL FINANCIAL INFORMATION - Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Cash paid for interest and income taxes | |||
Interest, net of capitalized amounts | $ 58.9 | $ 60.1 | $ 61.6 |
Income taxes, net of refunds | 106.1 | 129.9 | 108.8 |
Foreign Currency | |||
Foreign currency translation adjustment | $ 1.6 | $ 6.1 | $ 8.7 |
SUPPLEMENTAL FINANCIAL INFORM98
SUPPLEMENTAL FINANCIAL INFORMATION - Sale Of Product Line (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
May 31, 2015 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on sale of product line and related exit costs | $ 0.2 | $ 7.7 | $ 2.6 | |
Retail Branding and Information Solutions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of product line | $ 1.5 | |||
Loss on sale of product line and related exit costs | 8.5 | |||
Severance costs | $ 3.4 | |||
Retail Branding and Information Solutions | Other expense, net | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment of long-lived assets of product line | $ 2 |
QUARTERLY FINANCIAL INFORMATI99
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | |||||||||||
Net sales | $ 1,550.8 | $ 1,508.7 | $ 1,541.5 | $ 1,485.5 | $ 1,454.8 | $ 1,468.1 | $ 1,516 | $ 1,528 | $ 6,086.5 | $ 5,966.9 | $ 6,330.3 |
Gross profit | 425.4 | 417.6 | 434.1 | 422.6 | 392.3 | 405.9 | 417.6 | 430 | 1,699.7 | 1,645.8 | 1,651.2 |
Income from continuing operations | 56.5 | 81.3 | 64.7 | 71.9 | 320.7 | 274.4 | 247.3 | ||||
(Loss) income from discontinued operations, net of tax | 0.5 | 0.4 | (1) | ||||||||
Net income | $ 62 | $ 89.1 | $ 80 | $ 89.6 | $ 57 | $ 81.7 | $ 63.7 | $ 71.9 | $ 320.7 | $ 274.3 | $ 245.1 |
Net income (loss) per common share: | |||||||||||
Continuing operations (in dollars per share) | $ 0.62 | $ 0.89 | $ 0.71 | $ 0.79 | $ 3.60 | $ 3.01 | $ 2.64 | ||||
Discontinued operations (in dollars per share) | 0.01 | (0.01) | (0.03) | ||||||||
Net income per common share (in dollars per share) | $ 0.70 | $ 1 | $ 0.90 | $ 1 | 0.63 | 0.89 | 0.70 | 0.79 | 3.60 | 3.01 | 2.61 |
Net income (loss) per common share, assuming dilution: | |||||||||||
Continuing operations (in dollars per share) | 0.61 | 0.87 | 0.69 | 0.78 | 3.54 | 2.95 | 2.58 | ||||
Discontinued operations (in dollars per share) | 0.01 | 0.01 | (0.01) | (0.02) | |||||||
Net income per common share, assuming dilution (in dollars per share) | $ 0.69 | $ 0.98 | $ 0.88 | $ 0.98 | $ 0.62 | $ 0.88 | $ 0.68 | $ 0.78 | $ 3.54 | $ 2.95 | $ 2.56 |
QUARTERLY FINANCIAL INFORMAT100
QUARTERLY FINANCIAL INFORMATION - Other Expense, Net by Type (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Other items: | |||||||||||
Net loss from curtailment and settlement of pension obligations | $ 41.4 | $ 0.3 | $ 41.4 | $ 0.3 | $ 1.6 | ||||||
Loss on sale of product line and related exit costs | $ 0.2 | $ 7.7 | $ 2.6 | ||||||||
Legal settlements | 0.2 | (0.5) | (0.3) | ||||||||
Loss (gain) on sale of assets | $ (1.4) | 0.3 | (1.7) | (1.1) | (1.7) | (2.5) | |||||
Transaction costs | 0.9 | $ 2 | 2.1 | ||||||||
Other expense, net | 4.8 | 4.6 | 50.2 | $ 5.6 | 19.3 | 7 | 27.7 | 14.3 | 65.2 | 68.3 | 68.2 |
Severance and related costs | |||||||||||
Restructuring Charges: | |||||||||||
Restructuring charges | 4 | 1.9 | 3.6 | 5.2 | 17.5 | 4.7 | 16.8 | 13.5 | 14.7 | 52.5 | 54.7 |
Asset impairment charges and lease cancellation costs | |||||||||||
Restructuring Charges: | |||||||||||
Restructuring charges | $ 1.3 | $ 0.7 | $ 2.8 | $ 0.4 | $ 1.5 | $ 1.9 | $ 3.2 | $ 0.4 | $ 5.2 | $ 7 | $ 11.4 |