Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Jan. 27, 2018 | Jul. 01, 2017 | |
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. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 7,752,539,694 | ||
Entity Common Stock, Shares Outstanding | 87,927,816 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 224.4 | $ 195.1 |
Trade accounts receivable, less allowances of $36.2 and $47.8 at year-end 2017 and 2016, respectively | 1,180.3 | 1,001 |
Inventories, net | 609.6 | 519.1 |
Refundable income taxes | 28.9 | 30.3 |
Assets held for sale | 6.3 | 6.8 |
Other current assets | 188.4 | 152.5 |
Total current assets | 2,237.9 | 1,904.8 |
Property, plant and equipment, net | 1,097.9 | 915.2 |
Goodwill | 985.1 | 793.6 |
Other intangibles resulting from business acquisitions, net | 166.3 | 66.7 |
Non-current deferred income taxes | 196.3 | 313.2 |
Other assets | 453.4 | 402.9 |
Total assets | 5,136.9 | 4,396.4 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt and capital leases | 265.4 | 579.1 |
Accounts payable | 1,007.2 | 841.9 |
Accrued payroll and employee benefits | 248.5 | 217.4 |
Accrued trade rebates | 112.3 | 95.2 |
Income taxes payable | 49.2 | 37.9 |
Other accrued liabilities | 289.2 | 232.8 |
Total current liabilities | 1,971.8 | 2,004.3 |
Long-term debt and capital leases | 1,316.3 | 713.4 |
Long-term retirement benefits and other liabilities | 629.3 | 660.9 |
Non-current deferred and payable income taxes | 173.3 | 92.3 |
Commitments and contingencies (see Note 7 and 8) | ||
Shareholders' equity: | ||
Common stock, $1 par value per share, authorized - 400,000,000 shares at year-end 2017 and 2016; issued - 124,126,624 shares at year-end 2017 and 2016; outstanding - 88,011,541 shares and 88,308,860 shares at year-end 2017 and 2016, respectively | 124.1 | 124.1 |
Capital in excess of par value | 862.6 | 852 |
Retained earnings | 2,596.7 | 2,473.3 |
Treasury stock at cost, 36,115,083 shares and 35,817,764 shares at year-end 2017 and 2016, respectively | (1,856.7) | (1,772) |
Accumulated other comprehensive loss | (680.5) | (751.9) |
Total shareholders' equity | 1,046.2 | 925.5 |
Total liabilities and shareholders' equity | $ 5,136.9 | $ 4,396.4 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Trade accounts receivable, allowances (in dollars) | $ 36.2 | $ 47.8 |
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 | 88,011,541 | 88,308,860 |
Treasury stock, shares | 36,115,083 | 35,817,764 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Consolidated Statements of Income | |||
Net sales | $ 6,613.8 | $ 6,086.5 | $ 5,966.9 |
Cost of products sold | 4,801.6 | 4,386.8 | 4,321.1 |
Gross profit | 1,812.2 | 1,699.7 | 1,645.8 |
Marketing, general and administrative expense | 1,123.2 | 1,097.5 | 1,108.1 |
Other expense, net | 36.5 | 65.2 | 68.3 |
Interest expense | 63 | 59.9 | 60.5 |
Income from continuing operations before taxes | 589.5 | 477.1 | 408.9 |
Provision for income taxes | 307.7 | 156.4 | 134.5 |
Income from continuing operations | 281.8 | 320.7 | 274.4 |
Loss from discontinued operations, net of tax | (0.1) | ||
Net income | $ 281.8 | $ 320.7 | $ 274.3 |
Net income per common share: | |||
Continuing operations (in dollars per share) | $ 3.19 | $ 3.60 | $ 3.01 |
Net income per common share (in dollars per share) | 3.19 | 3.60 | 3.01 |
Net income per common share, assuming dilution: | |||
Continuing operations (in dollars per share) | 3.13 | 3.54 | 2.95 |
Net income per common share, assuming dilution (in dollars per share) | 3.13 | 3.54 | 2.95 |
Dividends per common share (in dollars per share) | $ 1.76 | $ 1.60 | $ 1.46 |
Weighted average number of shares outstanding: | |||
Common shares (in shares) | 88.3 | 89.1 | 91 |
Common shares, assuming dilution (in shares) | 90.1 | 90.7 | 92.9 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Consolidated Statements of Comprehensive Income | |||
Net income (loss) | $ 281.8 | $ 320.7 | $ 274.3 |
Foreign currency translation: | |||
Translation gain (loss) | 56.4 | (53.7) | (139) |
Pension and other postretirement benefits: | |||
Net loss recognized from actuarial gain/loss and prior service cost/credit | (3) | (62.9) | (18.9) |
Reclassifications to net income | 19.3 | 44.2 | 22.9 |
Cash flow hedges: | |||
(Losses) gains recognized on cash flow hedges | (2.2) | 0.7 | (0.5) |
Reclassifications to net income | 0.9 | 2.8 | (2) |
Other comprehensive income (loss), net of tax | 71.4 | (68.9) | (137.5) |
Total comprehensive income, net of tax | $ 353.2 | $ 251.8 | $ 136.8 |
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 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 (loss) | 274.3 | 274.3 | ||||
Other comprehensive income (loss), net of tax | (137.5) | (137.5) | ||||
Repurchase of 1,488,890, 3,781,528 and 3,858,376 shares for treasury for the years ended 2017, 2016, and 2015, respectively | (232.3) | (232.3) | ||||
Issuance of 960,656, 1,842,165 and 3,019,001 shares under stock-based compensation plans, including tax of $12.3 (2016) and $10.6 (2015) for the years ended 2017, 2016, and 2015, respectively | 10.1 | 11.8 | 104.5 | 126.4 | ||
Contribution of 230,915, 280,526 and 348,116 shares to 401(k) Plan for the years ended 2017, 2016, and 2015, respectively | 8.1 | 12.1 | 20.2 | |||
Dividends: $1.76, $1.60 and $1.46 per share for the years ended 2017, 2016, and 2015, 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 (loss) | 320.7 | 320.7 | ||||
Other comprehensive income (loss), net of tax | (68.9) | (68.9) | ||||
Repurchase of 1,488,890, 3,781,528 and 3,858,376 shares for treasury for the years ended 2017, 2016, and 2015, respectively | (262.4) | (262.4) | ||||
Issuance of 960,656, 1,842,165 and 3,019,001 shares under stock-based compensation plans, including tax of $12.3 (2016) and $10.6 (2015) for the years ended 2017, 2016, and 2015, respectively | 18 | 7.7 | 67.2 | 92.9 | ||
Contribution of 230,915, 280,526 and 348,116 shares to 401(k) Plan for the years ended 2017, 2016, and 2015, respectively | 9.8 | 10.2 | 20 | |||
Dividends: $1.76, $1.60 and $1.46 per share for the years ended 2017, 2016, and 2015, respectively | (142.5) | (142.5) | ||||
Balance at Dec. 31, 2016 | 124.1 | 852 | 2,473.3 | (1,772) | (751.9) | 925.5 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 281.8 | 281.8 | ||||
Other comprehensive income (loss), net of tax | 71.4 | 71.4 | ||||
Repurchase of 1,488,890, 3,781,528 and 3,858,376 shares for treasury for the years ended 2017, 2016, and 2015, respectively | (129.7) | (129.7) | ||||
Issuance of 960,656, 1,842,165 and 3,019,001 shares under stock-based compensation plans, including tax of $12.3 (2016) and $10.6 (2015) for the years ended 2017, 2016, and 2015, respectively | 10.6 | (14.4) | 36.2 | 32.4 | ||
Contribution of 230,915, 280,526 and 348,116 shares to 401(k) Plan for the years ended 2017, 2016, and 2015, respectively | 11.5 | 8.8 | 20.3 | |||
Dividends: $1.76, $1.60 and $1.46 per share for the years ended 2017, 2016, and 2015, respectively | (155.5) | (155.5) | ||||
Balance at Dec. 30, 2017 | $ 124.1 | $ 862.6 | $ 2,596.7 | $ (1,856.7) | $ (680.5) | $ 1,046.2 |
Consolidated Statements of Sha7
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Repurchase of shares for treasury (in shares) | 1,500,000 | 3,800,000 | |
Stock issued under stock-based compensation plans (in shares) | 960,656 | 1,842,165 | 3,019,001 |
Tax on stock issued under stock-based compensation plans | $ 12.3 | $ 10.6 | |
Stock issued under 401(k) Plan (in shares) | 230,915 | 280,526 | 348,116 |
Dividends per common share (in dollars per share) | $ 1.76 | $ 1.60 | $ 1.46 |
Treasury stock | |||
Repurchase of shares for treasury (in shares) | 1,488,890 | 3,781,528 | 3,858,376 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Operating Activities | |||
Net income (loss) | $ 281.8 | $ 320.7 | $ 274.3 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 126.6 | 117.5 | 125.2 |
Amortization | 52.1 | 62.6 | 63.1 |
Provision for doubtful accounts and sales returns | 37.6 | 54.4 | 46.5 |
Net losses from asset impairments and sales/disposals of assets | 1.4 | 1.5 | 12.2 |
Stock-based compensation | 30.2 | 27.2 | 26.3 |
Loss from settlement of pension obligations | 41.4 | ||
Deferred income taxes | 151.6 | 52.3 | 12.9 |
Other non-cash expense and loss | 53.9 | 46.2 | 50.1 |
Changes in assets and liabilities and other adjustments: | |||
Trade accounts receivable | (141.2) | (88.2) | (135.9) |
Inventories | (14.9) | (19.6) | (34.4) |
Other current assets | (6.5) | (7.6) | 3.9 |
Accounts payable | 83.4 | 31.6 | 65.5 |
Accrued liabilities | (0.6) | 32.4 | 7 |
Taxes on income | 29.6 | (14.1) | (23.7) |
Other assets | (11.8) | (1.2) | (0.3) |
Long-term retirement benefits and other liabilities | (23.1) | (71.8) | (19) |
Net cash provided by operating activities | 650.1 | 585.3 | 473.7 |
Investing Activities | |||
Purchases of property, plant and equipment | (190.5) | (176.9) | (135.8) |
Purchases of software and other deferred charges | (35.6) | (29.7) | (15.7) |
Proceeds from sales of property, plant and equipment | 6 | 8.5 | 7.6 |
Purchases of investments, net | (8.3) | (0.1) | (0.5) |
Payments for acquisitions, net of cash acquired, and investments in businesses | (319.3) | (237.2) | |
Other | 1.5 | ||
Net cash used in investing activities | (547.7) | (435.4) | (142.9) |
Financing Activities | |||
Net (decrease) increase in borrowings (maturities of three months or less) | (89.2) | 234.9 | (98.4) |
Additional long-term borrowings | 542.9 | ||
Repayments of long-term debt | (253.8) | (2.7) | (7.4) |
Dividend payments | (155.5) | (142.5) | (133.1) |
Share repurchases | (129.7) | (262.4) | (232.3) |
Proceeds from exercises of stock options, net | 22 | 71 | 104 |
Tax withholding for and excess tax benefit from stock-based compensation, net | (20.6) | (4.5) | (0.1) |
Net cash used in financing activities | (83.9) | (106.2) | (367.3) |
Effect of foreign currency translation on cash balances | 10.8 | (7.4) | (11.9) |
Increase (decrease) in cash and cash equivalents | 29.3 | 36.3 | (48.4) |
Cash and cash equivalents, beginning of year | 195.1 | 158.8 | 207.2 |
Cash and cash equivalents, end of year | $ 224.4 | $ 195.1 | $ 158.8 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 30, 2017 | |
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 and controlled 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. Fiscal Year Normally, our fiscal years consist of 52 weeks, but every fifth or sixth fiscal year consists of 53 weeks. Our 2017, 2016, and 2015 fiscal years consisted of 52-week periods ending December 30, 2017, December 31, 2016, and January 2, 2016, respectively. 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 year 2015. Unless otherwise noted, the results and financial condition of discontinued operations have been excluded from the notes to our Consolidated Financial Statements. Accounting Guidance Update In the first quarter of 2017, we adopted an accounting guidance update that simplifies several aspects of the accounting for stock-based payment transactions. As a result of adopting this update, beginning in the first quarter of 2017, (i) the tax effects related to stock-based payments at settlement or expiration were recognized through the income statement, a change from the previous requirement that certain tax effects be recognized in capital in excess of par value, and, as required by this guidance, this change was applied prospectively, and (ii) all tax-related cash flows resulting from stock-based payments were reported as operating activities on the statements of cash flows, a change from the previous requirement to present excess tax benefits as an inflow from financing activities and an outflow from operating activities, and, as permitted by this update, these changes were applied prospectively. Refer to Note 14, "Taxes Based on Income," for more information. In the third quarter of 2017, we adopted an accounting guidance update that simplifies the measurement of goodwill impairment. This guidance update eliminates step two of the goodwill impairment test, so that goodwill impairment is the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Our adoption of this guidance update did not have a significant impact on our financial position, results of operations, cash flows, or disclosures. 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 2017 or 2016. However, during 2017, 2016, and 2015, our ten largest customers by net sales represented approximately 15%, 14%, and 15% of our net sales, respectively. As of December 30, 2017 and December 31, 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 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 incurred during the application development stage of software development, including costs incurred for 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 using 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, and trade names and trademarks. In performing the required impairment tests, we perform a quantitative assessment, primarily consisting of a present value (discounted cash flow) method, to determine the fair value of the reporting units with goodwill. For certain reporting units the goodwill of which was acquired in the current period, we perform a qualitative assessment to determine whether a quantitative assessment is necessary. 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 compare the fair value of each reporting unit to its carrying amount, and, to the extent the carrying amount exceeds the fair value, an impairment of goodwill is recognized for the excess up to the amount of goodwill of that reporting unit. 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 materially differ from these estimates and projections. 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 derivative 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 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). Other derivatives not designated as hedges are recorded on the balance sheets at fair value, with changes in fair value recognized in earnings. 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. We also utilize certain foreign-currency-denominated debt to mitigate our foreign currency translation exposure from our net investment in foreign operations. See also Note 5, "Financial Instruments," for more information. 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 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 The accounting guidance update that simplifies several aspects of the accounting for stock-based payment transactions provided an accounting policy election in accounting for forfeitures of stock-based awards. We elected to continue our current practice of estimating expected forfeitures in determining the compensation cost to be recognized each period, rather than accounting for forfeitures as they occur. No long-term incentive compensation expense was capitalized in 2017, 2016, or 2015. 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 a performance objective based on a financial 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. LTI Units 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. See also Note 12, "Long-term Incentive Compensation," for more information. Taxes Based on Income Our provision for income taxes is determined using the asset and liability approach in accordance with GAAP. 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. Our income tax provision for fiscal year 2017 includes the estimated impact of the TCJA enacted in the U.S. on December 22, 2017. The TCJA significantly revises U.S. corporate income taxation, among other changes, lowering corporate income tax rates, implementing a modified territorial tax regime, and imposing a one-time transition tax through a deemed repatriation of accumulated untaxed earnings and profits of foreign subsidiaries. We include a reasonable estimate ("provisional amount") of the impact of the TCJA on our tax provision following the guidance of SAB 118. The final impact of the TCJA may differ from the provisional amount as included, possibly materially, due to, among other things, further refinement of our calculations, changes in interpretations and assumptions we have made, regulatory and administrative guidance that may be issued, and actions we may take as a result of the TCJA. See also Note 14, "Taxes Based on Income," for more information. Recent Accounting Requirements In February 2018, the Financial Accounting Standards Board ("FASB") issued guidance that provides entities with the option to reclassify certain tax effects of the TCJA in accumulated other comprehensive income to retained earnings. This guidance can be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal income tax rate pursuant to the TCJA is recognized. The guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted for reporting periods for which financial statements have yet to be issued or made available for issuance. We are currently assessing the impact of this guidance on our financial position and disclosures. In August 2017, the FASB issued amended guidance to improve the financial reporting of hedging relationships to better reflect the economic results of an entity's risk management activities in its financial statements, as well as to simplify the application of hedge accounting. The amended presentation and disclosure guidance is required prospectively. The guidance will be effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures. In May 2017, the FASB issued amended guidance that provides clarity on which changes to share-based awards are considered substantive and require modification accounting to be applied. This guidance is effective for interim and annual periods beginning after December 15, 2017. We do not regularly modify the terms and conditions of share-based awards and do not believe our adoption of this amended guidance will have a significant effect on our financial position, results of operations, cash flows, and disclosures. In March 2017, the FASB issued guidance that requires employers with defined benefit plans to present only the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Employers are required to present the other components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. Components other than the service cost component will not be eligible for capitalization in assets. Employers are required to apply the guidance on the presentation of the components of net periodic benefit cost in the income statement retrospectively, while the guidance that limits the capitalization of net periodic benefit cost in assets to the service cost component must be applied prospectively. This guidance is effective for interim and annual periods beginning after December 15, 2017. The non-service cost components of net periodic pension cost totaled approximately $18 million and $53 million for the years ended 2017 and 2016, respectively. The amount in 2016 included a recognized loss on settlement of pension obligations of approximately $41 million. We do not expect this guidance to have a significant impact on the presentation of our results of operations and 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 qualifies as a business. This guidance is for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. We do not anticipate that our adoption of this guidance 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 they occur. This guidance is effective for fiscal years and interim periods beginning after December 15, 2017. The guidance requires modified retrospective adoption. Upon adoption, we expect to derecognize tax-related deferred charges, including tax-related deferred charges recorded in 2017, and recognize deferred taxes related to certain intra-entity asset transfers as a net reduction to retained earnings. Refer to Note 14, "Taxes Based on Income," for more information. We do not believe adoption of this guidance will have a significant effect 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 and classification of certain cash receipts and cash payments in the statement of cash flows. This guidance requires retrospective adoption and is effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted. Based on the information we have to date, we do not anticipate that the adoption of this guidance will have a significant impact on our cash flows. In March 2016, and in subsequent updates, the FASB issued revised guidance on accounting for leases that requires lessees to recognize the rights and obligations created by leases on their balance sheets. This guidance, which will be effective for interim and annual periods beginning after December 15, 2018, also requires enhanced disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. Early adoption is permitted. We expect to adopt this guidance as of the effective date. 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. The guidance provides an optional transition practical expedient to not evaluate existing or expired land easements that were not previously accounted for as leases under the current guidance. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures, and expect its adoption to have a significant impact on our financial position 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 requires 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"). We will adopt the new standard under the modified retrospective approach in the first quarter of 2018. To prepare for this adoption, we established a project plan and cross-functional team to manage the assessment, design, and implementation of this new guidance. 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. However, our evaluation of the impact could change if we enter into new revenue arrangements in the future or interpretations of the new guidance evolve. Upon adoption of this revised guidance, allowances for customer returns, currently presented as a reduction of trade accounts receivable, will be classified as a returns liability. Our allowance for customer returns was $11.1 million and $10 million as of December 30, 2017 and December 31, 2016, respectively. The value of return assets is not expected to be significant. Effective beginning on the first day of our 2018 fiscal year, we have implemented appropriate changes to processes, policies, systems, and controls to support revenue recognition and disclosures in accordance with the revised guidance. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 30, 2017 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 2. ACQUISITIONS On June 23, 2017, we completed the stock acquisition of Yongle Tape Ltd. ("Yongle Tape"), a China-based manufacturer of specialty tapes and related products used in a variety of industrial markets, from Yongle Tape's management and Shaw Kwei & Partners. On May 19, 2017, we completed the stock acquisition of Finesse Medical Limited ("Finesse Medical"), an Ireland-based manufacturer of healthcare products used in the management of wound care and skin conditions, from Finesse Medical's management. On March 1, 2017, we completed the net asset acquisition of Hanita Coatings Rural Cooperative Association Limited and stock acquisition of certain of its subsidiaries ("Hanita"), an Israel-based pressure-sensitive manufacturer of specialty films and laminates, from Kibbutz Hanita Coatings and Tene Investment Funds. We expect the acquisitions of Yongle Tape, Finesse Medical, and Hanita (collectively, the "2017 Acquisitions") to expand our product portfolio and provide new growth opportunities. The aggregate purchase consideration for these acquisitions, which is subject to customary post-closing adjustments, was approximately $360 million. This included $15 million of payments based on Yongle Tape's achievement of certain pre-acquisition performance targets. The 2017 Acquisitions were funded through cash and existing credit facilities. In addition to the cash paid at the closing of the 2017 Acquisitions, certain sellers are eligible for earn-out payments of up to approximately $45 million related to the achievement of certain performance targets for 2017 and 2018. Based on our current estimates, we have accrued approximately $45 million for these additional earn-out payments, which has been included in the $360 million of aggregate purchase consideration. Consistent with the allowable time to complete our assessment, the valuations of certain acquired assets and liabilities, including environmental liabilities and income taxes, are currently pending. The 2017 Acquisitions were not material, individually or in the aggregate, to our Consolidated Financial Statements. On August 1, 2016, we completed the acquisition of the European business of Mactac ("Mactac") from Platinum Equity through the purchase of Evergreen Holdings 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. This acquisition was not material to our Consolidated Financial Statements. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 30, 2017 | |
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 2017 indicated that no impairment occurred during 2017. The fair value of these assets was primarily based on Level 3 inputs. Changes in the net carrying amount of goodwill for 2017 and 2016 by reportable segment were as follows: (In millions) Label and Retail Industrial and Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of January 2, 2016 $ $ $ – $ Acquisitions (1) – Transfer (2) – ) – Translation adjustments ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of December 31, 2016 2017 Acquisitions (1) – Acquisition adjustments (3) – .7 Translation adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of December 30, 2017 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Goodwill acquired in 2016 primarily related to the Mactac acquisition. Goodwill acquired in 2017 related to the acquisitions of Hanita, which is included in our Label and Graphic Materials ("LGM") reportable segment, and Finesse Medical and Yongle Tape, which are included in our Industrial and Healthcare Materials ("IHM") reportable segment. (2) In connection with our 2016 change in operating structure, we allocated goodwill associated with our fastener solutions reporting unit from our Retail Branding and Information Solutions ("RBIS") reportable segment to 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. (3) Goodwill purchase price allocation adjustments related to the acquisition of Mactac in August 2016. The carrying amounts of goodwill at December 30, 2017 and December 31, 2016 were net of accumulated impairment losses of $820 million recognized in fiscal year 2009 by our RBIS reportable segment. In connection with the 2017 Acquisitions, we recognized goodwill based on our expectation of synergies and other benefits from acquiring these businesses. We expect the majority of the recognized goodwill related to the Hanita acquisition 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 indicated that no impairment occurred in 2017. The carrying value of indefinite-lived intangible assets resulting from business acquisitions, consisting of trade names and trademarks, was $21.2 million and $20.3 million at December 30, 2017 and December 31, 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 2017 Acquisitions, we acquired approximately $110 million of identifiable intangible assets, which consisted of customer relationships, trade names and trademarks, and patents and other acquired technology. We utilized the income approach to estimate the fair values of the identifiable intangibles associated with the 2017 Acquisitions, using primarily Level 3 inputs. The discount rates we used to value these assets were between 11% and 16.5%. The table below summarizes the preliminary amounts and weighted useful lives of these intangible assets: Amount Weighted-average ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ Patents and other acquired technology Trade names and trademarks ​ ​ ​ ​ ​ ​ ​ ​ In connection with the Mactac acquisition in 2016, we acquired approximately $29 million of identifiable intangible assets, which consisted of customer relationships and patents and other acquired technology. 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%. The table below summarizes the amounts and weighted useful lives of these intangible assets: Amount Weighted-average ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ Patents and other acquired technology ​ ​ ​ ​ ​ ​ ​ ​ Refer to Note 2, "Acquisitions," for more information. The following table sets forth our finite-lived intangible assets resulting from business acquisitions at December 30, 2017 and December 31, 2016, which continue to be amortized: 2017 2016 (In millions) Gross Accumulated Net Gross Accumulated Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships (1) $ $ $ $ $ $ Patents and other acquired technology (1) Trade names and trademarks (2) Other intangibles – .2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes respective finite-lived intangible assets acquired from the 2017 Acquisitions and the Mactac acquisition. (2) Includes respective finite-lived intangible assets acquired from the 2017 Acquisitions. Amortization expense for finite-lived intangible assets resulting from business acquisitions was $18.6 million for 2017, $19.9 million for 2016, and $20.5 million for 2015. 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 ​ ​ ​ ​ ​ 2018 $ 2019 2020 2021 2022 ​ ​ ​ ​ ​ |
DEBT AND CAPITAL LEASES
DEBT AND CAPITAL LEASES | 12 Months Ended |
Dec. 30, 2017 | |
DEBT AND CAPITAL LEASES | |
DEBT AND CAPITAL LEASES | NOTE 4. DEBT AND CAPITAL LEASES Short-Term Borrowings We had $183.8 million and $44.5 million of borrowings from U.S. commercial paper issuances outstanding at December 30, 2017 and December 31, 2016, respectively, with a weighted-average interest rate of 1.79% and .9%, 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 30, 2017, there was no balance outstanding under this program. Short-Term Credit Facilities In November 2017, we amended and restated the Revolver, increasing the amount available from certain domestic and foreign banks from $700 million to $800 million. The amendment also extended the Revolver's maturity date to November 8, 2022. 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 $300 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 balance was outstanding under the Revolver as of December 30, 2017 or December 31, 2016. Commitment fees associated with the Revolver in 2017, 2016, and 2015 were $1.1 million, $1.1 million, and $1.9 million, respectively. In addition to the Revolver, we have significant short-term lines of credit available in various countries totaling approximately $330 million at December 30, 2017. These lines may be cancelled at any time by us or the issuing banks. Short-term borrowings outstanding under our lines of credit were $76.1 million and $72.9 million at December 30, 2017 and December 31, 2016, respectively, with a weighted-average interest rate of 6.2% and 6.5%, 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 In March 2017, we issued €500 million of senior notes, due March 2025. The senior notes bear an interest rate of 1.25% per year, payable annually in arrears. The net proceeds from the offering, after deducting underwriting discounts and estimated offering expenses, were $526.6 million (€495.5 million), a portion of which we used to repay commercial paper borrowings used to finance a portion of our acquisition of Mactac, and the remainder of which we used for general corporate purposes and the 2017 Acquisitions. We designated the senior notes as a net investment hedge of our investment in foreign operations. Refer to Note 5, "Financial Instruments," for more information. In October 2017, we repaid $250 million of senior notes at maturity using U.S. commercial paper borrowings. 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 2025 at 1.25% – Senior notes due 2033 at 6.0% Capital leases Other borrowings (1) – Less amount classified as current ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt and capital leases (2) $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Other borrowings consisted of long-term bank borrowings by foreign subsidiaries. (2) Includes unamortized debt issuance cost and debt discount of $7.1 million and $.7 million as of year-end 2017, respectively, and $3.6 million and $.4 million as of year-end 2016, respectively. At year-end 2017, our medium-term notes had maturities from 2020 through 2025 and accrued interest at a weighted-average fixed rate of 7.5%. We expect maturities of long-term debt and capital lease payments for each of the next five fiscal years and thereafter to be as follows: Year (In millions) ​ ​ ​ ​ ​ 2018 (classified as current) $ 2019 2020 2021 2022 2023 and thereafter ​ ​ ​ ​ ​ The maturities of capital lease payments in the table above include $3.9 million of imputed interest, $1 million of which is expected to be paid in 2018. 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, we accounted for it as a capital lease. The carrying value of the lease at December 30, 2017 was approximately $20 million, of which approximately $18 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 30, 2017. Other Our 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 30, 2017 and December 31, 2016, we were in compliance with our financial covenants. Our total interest costs from continuing operations in 2017, 2016, and 2015 were $67.9 million, $63.5 million, and $63.5 million, respectively, of which $4.9 million, $3.6 million, and $3 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 or euro government bond securities, as applicable, 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 $1.6 billion at December 30, 2017 and $1.31 billion at December 31, 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. 30, 2017 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | NOTE 5. FINANCIAL INSTRUMENTS As of December 30, 2017, the aggregate U.S. dollar equivalent notional value of our outstanding commodity contracts and foreign exchange contracts was $3.8 million and $1.37 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. We also enter into foreign exchange contracts to offset risks arising from foreign exchange rate fluctuations. The following table shows the fair value and balance sheet locations of cash flow hedges as of December 30, 2017 and December 31, 2016: Asset Liability (In millions) Balance Sheet Location Balance Sheet Location ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ .4 $ Other accrued liabilities $ .6 $ Commodity contracts Other current assets – .5 Other accrued liabilities – – Commodity contracts Other assets – .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ .4 $ $ .6 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table shows the fair value and balance sheet locations of other derivatives as of December 30, 2017 and December 31, 2016: Asset Liability (In millions) Balance Sheet Location Balance Sheet Location ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ $ Other accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ) .6 (.7 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ .8 $ (.8 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 2017, 2016, and 2015. As of December 30, 2017, we expected a net loss of approximately $.3 million to be reclassified from "Accumulated other comprehensive loss" to earnings within the next 12 months. Other Derivatives For other derivative instruments, which are not designated as hedging instruments, the gain or loss is recognized in current earnings. These derivatives are intended to offset certain of our economic exposures. The following table shows the components of the net gains (losses) recognized in income related to these derivative instruments. (In millions) Location of Net Gains (Losses) in Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Cost of products sold $ ) $ $ Foreign exchange contracts Marketing, general and administrative expense ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Investment Hedge In March 2017, we designated our €500 million of euro-denominated 1.25% senior notes due 2025 as a net investment hedge of our investment in foreign operations. The net assets from the investment in foreign operations were greater than the senior notes, and as such, the net investment hedge was effective. Refer to Note 4, "Debt and Capital Leases," for more information. Gain (loss), before tax, recognized in "Accumulated other comprehensive loss" (effective portion) related to the net investment hedge was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency denominated debt $ ) $ N/A $ N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We recorded no ineffectiveness from our net investment hedge in earnings during 2017. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended |
Dec. 30, 2017 | |
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, in 2016, 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. 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 includes both risk-seeking ("growth portfolio") and liability-hedging components. 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 39% in equity securities, 43% in fixed income securities and cash, and 18% 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. These methods 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 Cash $ – $ – $ – $ – Pooled funds – liability-hedging portfolio (1) Pooled funds – growth portfolio (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total U.S. plan assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Cash $ – $ – $ – $ – Pooled funds – liability-hedging portfolio (1) Pooled funds – growth portfolio (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. 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 30, 2017: Level 3 Assets (In millions) Insurance Contracts ​ ​ ​ ​ ​ Balance at December 31, 2016 $ Net realized and unrealized gain .7 Purchases Settlements ) Impact of changes in foreign currency exchange rates ​ ​ ​ ​ ​ Balance at December 30, 2017 $ ​ ​ ​ ​ ​ 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 the 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, we assumed a 7% annual rate of increase in the per capita cost of covered health care benefits for 2018. 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 (.2 ) ​ ​ ​ ​ ​ ​ ​ ​ 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 2017 2016 2017 2016 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in projected benefit obligations Projected benefit obligations at beginning of year $ $ $ $ $ $ Service cost .5 .4 – – Interest cost .1 .2 Participant contribution – – .5 .5 Amendments – ) – (.6 ) – – Actuarial loss (gain) ) (.1 ) (.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 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 2017 2016 (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 – (.7 ) – – – – Acquisition (1) – – – – – Employer contributions .9 .9 Participant contributions – – .5 .5 Benefits paid ) ) ) ) ) ) Settlements (2) – – ) – – – Foreign currency translation – – ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at end of year $ $ $ $ $ – $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition 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 2017 2016 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status of the plans Other accrued liabilities $ ) $ ) $ ) $ ) $ (.5 ) $ (.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. U.S. Postretirement Pension Benefits Health Benefits 2017 2016 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 $1.92 billion and $1.42 billion, respectively, at year-end 2017 and $1.80 billion and $1.26 billion, respectively, at year-end 2016. 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 $1.44 billion and $994 million, respectively, at year-end 2017 and $1.74 billion and $1.26 billion, respectively, at year-end 2016. 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 2017 2016 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss $ $ $ $ $ $ Prior service cost (credit) ) ) ) ) Net transition obligation – .1 – .2 – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in accumulated other comprehensive loss $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 2017 2016 2015 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss (gain) $ $ ) $ $ $ $ $ – $ (.2 ) $ ) Prior service (credit) cost – ) – (.6 ) – (.7 ) – – – Amortization of unrecognized: Net actuarial loss ) ) ) ) ) ) ) ) ) Prior service (cost) credit (.9 ) .4 ) .4 ) .3 Net transition obligation – – – (.1 ) – – – – – Curtailments – – – – – .2 – – – Settlements – – ) – – ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in other comprehensive (income) loss $ $ ) $ ) $ $ (.1 ) $ ) $ $ $ (.3 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 2017 2016 2015 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost $ .5 $ $ .4 $ $ .4 $ $ – $ – $ – Interest cost .1 .1 .3 Actuarial (gain) loss – (.2 ) – .4 – – – – Expected return on plan assets ) ) ) ) ) ) – – – Amortization of actuarial loss Amortization of prior service cost (credit) .9 (.4 ) (.4 ) (.3 ) ) ) ) Amortization of transition obligation – – – .1 – – – – – Recognized net (gain) loss on curtailments – – – (.2 ) – (.2 ) – – – Recognized loss on settlements (1) – – – – – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost (credit) $ $ $ $ $ $ $ ) $ ) $ (.8 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 in Switzerland in 2015. These losses on settlements were recorded in "Other expense, net" in the Consolidated Statements of Income. The following table sets forth the weighted-average assumptions used to determine net periodic cost: Pension Benefits U.S. Postretirement 2017 2016 2015 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 2018: (In millions) ​ ​ ​ ​ ​ U.S. $ Int'l U.S. postretirement health benefits .5 ​ ​ ​ ​ ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2018 $ $ $ .5 2019 .4 2020 .3 2021 .3 2022 .3 2023 - 2027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Amortization Amounts in Accumulated Other Comprehensive Loss Our estimates of fiscal year 2018 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) .8 (.5 ) ) 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 $20.2 million, $20 million, and $20.2 million in 2017, 2016, and 2015, respectively, related to our employer contributions and employer match of participant contributions to the Savings Plan. Other Retirement Plans We have deferred compensation plans that 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 2017 and 2016, we had accrued $86.9 million and $78.7 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 equity plans. 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 .2 million and .1 million DSUs were outstanding as of year-end 2017 and 2016, respectively, with an aggregate value of $17.8 million and $10.2 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 $243.5 million and $230.6 million at year-end 2017 and 2016, respectively. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 30, 2017 | |
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) ​ ​ ​ ​ ​ 2018 $ 2019 2020 2021 2022 2023 and thereafter ​ ​ ​ ​ ​ Total minimum lease payments $ ​ ​ ​ ​ ​ Rent expense for operating leases from continuing operations was approximately $64 million in 2017 and approximately $58 million in both 2016 and 2015. Operating leases primarily relate to office and warehouse space and equipment for information technology, machinery, and transportation. These leases do not impose significant restrictions or unusual obligations. Refer to Note 4, "Debt and Capital Leases," for more information. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 30, 2017 | |
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 30, 2017, 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 2017 and 2016 related to our environmental liabilities was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Balance at beginning of year $ $ Acquisitions – Charges (reversals), net Payments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ As of December 30, 2017 and December 31, 2016, approximately $5 million and $8 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. 30, 2017 | |
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 30, 2017: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Trading securities $ $ $ $ – Derivative assets – – Bank drafts – – Liabilities Derivative liabilities $ $ .1 $ $ – Contingent consideration liabilities – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ $ – $ $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 30, 2017, trading securities of $.4 million and $22.3 million were included in "Cash and cash equivalents" and "Other current assets," respectively, in the Consolidated Balance Sheets. 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. 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. Contingent consideration liabilities relate to estimated earn-out payments associated with certain of the 2017 Acquisitions. These payments are based on the achievement of certain performance targets in 2017 and 2018 based on the applicable terms of the purchase agreements, and our estimates are based on the expected payments related to these targets under the terms of their respective agreements. We have classified these liabilities as Level 3. As of December 30, 2017, contingent consideration liabilities of approximately $18 million and $27 million were included in "Other accrued liabilities" and "Long-term retirement benefits and other liabilities," respectively, in the Consolidated Balance Sheets. |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 30, 2017 | |
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 per common share: Continuing operations (A) ÷ (D) $ $ $ Discontinued operations (B) ÷ (D) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share (C) ÷ (D) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share, assuming dilution: Continuing operations (A) ÷ (E) $ $ $ Discontinued operations (B) ÷ (E) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 were not significant in 2017. Stock-based compensation awards excluded from the computation totaled approximately .2 million shares in 2016 and 1 million shares in 2015. |
SUPPLEMENTAL EQUITY AND COMPREH
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | 12 Months Ended |
Dec. 30, 2017 | |
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 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 long-term incentive plan or used for other corporate purposes. In 2017, we repurchased approximately 1.5 million shares of our common stock at an aggregate cost of $129.7 million. In 2016, we repurchased approximately 3.8 million shares of our common stock at an aggregate cost of $262.4 million. In April 2017, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $650 million, exclusive of any fees, commissions or other expenses related to such purchases, in addition to the amount outstanding under our previous Board authorization. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased. As of December 30, 2017, shares of our common stock in the aggregate amount of $625.2 million remained authorized for repurchase under this Board authorization. As of December 31, 2016, shares of our common stock in the aggregate amount of $104.9 million remained authorized under our previous 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 2017 and 2016 were as follows: (In millions) Foreign Pension and Cash Flow Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ ) $ ) $ $ ) Other comprehensive income (loss) before reclassifications, net of tax ) ) Reclassifications to net income, net of tax – .9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive income (loss), net of tax ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 30, 2017 $ ) $ ) $ (.3 ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ .2 $ ) $ Cost of products sold Commodity contracts .2 (.7 ) ) Cost of products sold Interest rate contracts ) (.1 ) (.1 ) Interest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Total before tax .5 (.5 ) 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) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation: Translation gain (loss) $ ) $ ) $ ) Pension and other postretirement benefits: Net loss recognized from actuarial gain/loss and prior service cost/credit .5 ) ) Reclassifications to net income Cash flow hedges: (Losses) gains recognized on cash flow hedges (.6 ) .1 (.3 ) Reclassifications to net income .5 (.5 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit related to items of other comprehensive loss $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
LONG-TERM INCENTIVE COMPENSATIO
LONG-TERM INCENTIVE COMPENSATION | 12 Months Ended |
Dec. 30, 2017 | |
LONG-TERM INCENTIVE COMPENSATION | |
LONG-TERM INCENTIVE COMPENSATION | NOTE 12. LONG-TERM INCENTIVE COMPENSATION Stock-Based 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. In April 2017, our shareholders approved our 2017 Incentive Award Plan (the "Equity Plan") to replace our Amended and Restated Stock Option and Incentive Plan. The Equity Plan, a long-term incentive plan for eligible employees and non-employee directors, allows us to grant stock-based compensation awards – including stock options, restricted stock units, performance units, and market-leveraged stock units – or a combination of these and other awards. Under the Equity Plan, the aggregate number of shares available for issuance is 5.4 million shares and each full value award is counted as 1.5 shares for purposes of the number of shares authorized for issuance. Full value awards include restricted stock units, performance units, and market-leveraged stock units. Stock-based compensation expense from continuing operations and the 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 30, 2017, we had approximately $38 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 employees may be granted at no less than 100% of the fair market value of our common stock on the date of the grant and generally vest ratably over a four-year period. 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 2017 and 2015. 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 2017: Number Weighted-average Weighted-average Aggregate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2016 $ $ Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 30, 2017 $ $ Options vested and expected to vest at December 30, 2017 Options exercisable at December 30, 2017 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total intrinsic value of stock options exercised was $26.8 million in 2017, $31.7 million in 2016, and $43.3 million in 2015. We received approximately $22 million in 2017, $71 million in 2016, and $104 million in 2015 from the exercise of stock options. The tax benefit associated with these exercised options was $10.1 million in 2017, $11.3 million in 2016, and $15.6 million in 2015. 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 equity plans. 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 $82.15, $68.04, and $51.37 in 2017, 2016, and 2015, respectively. The following table summarizes information related to awarded PUs: Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ Granted at target Adjustment for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 30, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects adjustments for awards vesting based on above-target performance for the 2014-2016 performance period. The fair value of vested PUs was $11.2 million in 2017, $13.8 million in 2016, and $12.2 million in 2015. Market-Leveraged Stock Units ("MSUs") MSUs are performance-based awards granted to eligible employees under our equity plans. 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 $91.40, $72.93, and $56.46 in 2017, 2016, and 2015, respectively. The following table summarizes information related to awarded MSUs: Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ Granted at target Adjustments for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 30, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects adjustments for awards vesting based on above-target performance for each of the performance periods vesting in 2017. The fair value of vested MSUs was $19.3 million in 2017, $12.4 million in 2016, and $9.8 million in 2015. Restricted Stock Units ("RSUs") RSUs are service-based awards granted to eligible employees under our equity plans, which generally vest ratably over a period of four years for employees. Prior to 2017, RSUs granted to non-employee directors under our equity plans vested ratably over a period of three years. Beginning in 2017, RSUs granted to non-employee directors generally vest over a period of one year. The vesting of RSUs is subject to continued service 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 $82.77, $67.66, and $53.29 in 2017, 2016, and 2015, respectively. The following table summarizes information related to awarded RSUs: Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ Granted Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 30, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of vested RSUs was $2.7 million, $5.3 million, and $8.4 million in 2017, 2016, and 2015, respectively. Cash-Based 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 $36.6 million in 2017, $23.8 million in 2016, and $27.1 million in 2015. 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 $8.3 million in 2017, $7.8 million in 2016, and $8.6 million in 2015. |
COST REDUCTION ACTIONS
COST REDUCTION ACTIONS | 12 Months Ended |
Dec. 30, 2017 | |
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. We calculate severance using benefit formulas under the respective plans. Accordingly, we record restructuring charges from qualifying cost reduction actions 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 2017, we recorded $34.1 million in restructuring charges, net of reversals, related to restructuring actions initiated during the third quarter of 2015 ("2015/2016 Actions"). These charges consisted of severance and related costs for the reduction of approximately 920 positions, lease cancellation costs, and asset impairment charges. During fiscal year 2016, we recorded $20.9 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 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. Prior Actions During fiscal year 2015, we recorded $33.4 million in restructuring charges, net of reversals, related to prior restructuring actions. These charges consisted of severance and related costs for the reduction of approximately 605 positions, lease cancellation costs, and asset impairment charges. 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 2017, 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 ) $ Lease cancellation costs .2 (.8 ) – – .6 Asset impairment charges – – ) – – Prior actions Severance and related costs (.7 ) (.6 ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ (.1 ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Prior actions Severance and related costs ) ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ .1 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 .2 .9 Corporate – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
TAXES BASED ON INCOME
TAXES BASED ON INCOME | 12 Months Ended |
Dec. 30, 2017 | |
TAXES BASED ON INCOME | |
TAXES BASED ON INCOME | NOTE 14. TAXES BASED ON INCOME Taxes based on income were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current: U.S. federal tax $ $ $ State taxes .2 .6 (.1 ) 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 ) Tax Cuts and Jobs Act (1) – – Foreign earnings taxed at different rates (2) ) ) Excess tax benefits associated with stock-based payments (3) ) – – 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) During 2017, we recognized a net tax charge of $172 million as a result of the TCJA. This amount includes the direct impacts of the TCJA, including items that would otherwise be separately disclosed as tax effects of foreign earnings taxed at different rates, tax contingencies and audit settlements, and other items. (2) Included foreign earnings taxed in the U.S., net of credits, in all years. (3) During 2017, we recognized a tax benefit of $16 million as a result of our adoption of the accounting guidance update related to stock-based payments. Income from continuing operations before taxes from our U.S. and international operations was as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. $ $ $ International ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The effective tax rate for continuing operations was 52.2%, 32.8%, and 32.9% for fiscal years 2017, 2016, and 2015, respectively. The 2017 effective tax rate for continuing operations included a net tax charge of $172 million related to the enactment of the TCJA, $5.1 million of tax benefit from the release of valuation allowance on certain state deferred tax assets, $4.2 million of tax benefit, including previously accrued interest and penalties, from effective settlements and changes in our judgment about tax filing positions as a result of new information, and $4.4 million of tax benefit from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years. The 2017 effective tax rate also included a net benefit of $16 million related to our adoption of the accounting guidance update related to stock-based payments described in Note 1, "Summary of Significant Accounting Policies." This accounting guidance update required that the effect of excess tax benefits associated with stock-based payments to be recognized in the income statement instead of in capital in excess of par value as was the case prior to our adoption of this update. Excess tax benefits are the effects of tax deductions in excess of compensation expense recognized for financial accounting purposes. These benefits related to stock-based awards generally are generated as a result of stock price appreciation during the vesting period or between the time of grant and the time of exercise. We expect future excess tax benefits to vary depending on our stock-based payments in future reporting periods. These excess tax benefits may cause variability in our future effective tax rate as they can fluctuate based on vesting and exercise activity, as well as our future stock price. In 2017, as a result of intra-entity sales and transfers of assets other than inventory related to the recent integration of an acquisition, we recognized a total of approximately $14 million of tax-related deferred charges in "Other current assets" and "Other assets." However, we expect the tax-related deferred charges to be derecognized as an adjustment to retained earnings upon our adoption of the accounting guidance update described in Note 1, "Summary of Significant Accounting Policies." The 2016 effective tax rate for continuing operations included $7.6 million of tax expense associated with the cost to repatriate current earnings of certain foreign subsidiaries and $46.3 million of tax expense related to U.S. income and foreign withholding taxes resulting from changes in indefinite reinvestment assertions on certain foreign earnings and profits; 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 $8.4 million of tax expense from deferred tax adjustments resulting from 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 our assessment, we record valuation allowances only with respect to the portion of the deferred tax asset that is more likely than not to be realized. Our assessment of the future realizability of our deferred tax assets relies heavily on our forecasted earnings in certain jurisdictions, and such forecasted earnings are determined by the manner in which we operate our business. Any changes to our operations may affect our assessment of deferred tax assets considered realizable if the positive evidence no longer outweighs the negative evidence. 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 and profits 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 our 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 and 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 current 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, as a result of the enactment of the Protecting Americans from Tax Hikes Act of 2015 ("PATH Act"), 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. U.S. Tax Reform On December 22, 2017, the TCJA was enacted in the U.S. The TCJA significantly revises U.S. corporate income taxation by, among other changes, lowering corporate income tax rates to 21%, implementing a modified territorial tax regime and imposing a one-time transition tax through a deemed repatriation of accumulated untaxed earnings and profits of foreign subsidiaries. Based on currently available information, we included a provisional amount of $172 million as the estimated impact resulting from the TCJA in our results for the fourth quarter and full year 2017. This provisional amount includes expenses of $147 million related to the estimated transition tax, $49.2 million resulting from the estimated remeasurement of net U.S. deferred tax assets at the lower corporate income tax rate, a $9.3 million reserve related to potential uncertainties of our accumulated tax attributes that were used in our estimated transition tax calculation, $5.3 million from the estimated reduction of previously recognized U.S. deferred tax assets that we no longer anticipate to benefit from due to changes in the future deductibility of executive compensation, partially offset by a net benefit of $38.8 million, primarily from the reversal of the deferred tax liability that we previously recorded for future tax costs associated with repatriations of certain foreign earnings and profits that we consider not to be indefinitely reinvested. We have not finalized the accounting for income tax effects of the TCJA and we are relying on the guidance in SAB 118 to include our provisional amount of the accounting impact of the TCJA in our financial statements for the fourth quarter and full year 2017. Specifically, the provisional amount recorded includes the transition tax, the remeasurement of deferred taxes and uncertain tax positions as they related to the TCJA, changes to certain estimates and amounts related to earnings and profits of and taxes paid by certain foreign subsidiaries, changes in limitations governing the future deductibility of our previously recorded deferred tax assets on executive compensation, and an accrual for foreign withholding taxes associated with our previous indefinite reinvestment assertions. Furthermore, we are still in the process of analyzing the effects of new tax provisions related to certain types of foreign incomes, such as Global Intangible Low-taxed Income ("GILTI"), Base Erosion Antiabuse Tax ("BEAT"), and Foreign Derived Intangible Income ("FDII"), as well as other domestic provisions that are effective starting in 2018. Additionally, we are reevaluating our previous indefinite reinvestment assertions and, should we decide to change such assertions, we will adjust our income tax provision in the period in which such determination is made. We have not made a determination on our accounting policy choice of whether to treat taxes on our GILTI as period costs or to recognize deferred taxes for basis differences expected to reverse as GILTI. The final impact of the TCJA may materially differ from our provisional amount, due to, among other things, further refinement of our data, calculations and analysis, changes in interpretations and assumptions, regulatory and administrative guidance, and actions we may take as a result of the TCJA. The TCJA implements a modified territorial tax regime that provides a full exemption for foreign dividends received by a U.S. corporation from a foreign corporation in which the U.S. corporation owns at least a 10% stake. In connection with the full dividend exemption, the TCJA also eliminates future foreign tax credits for foreign income taxes or withholding taxes paid or accrued with respect to any dividend to which the new exemption applies. Absent the availability of foreign tax credits to offset against potential foreign withholding taxes related to future repatriation of certain foreign earnings and profits that we consider not to be indefinitely reinvested, we reflected a net incremental impact of $11.5 million as an increase to our deferred tax liability. This tax expense was included in our provisional amount of $172 million referenced above. For the remaining undistributed earnings of our foreign subsidiaries, we continue to consider such earnings to be indefinitely reinvested according to our current operating plans and no deferred tax liability has been recorded for potential future taxes related to such earnings. The imposition of the transition tax by the TCJA significantly reduced the largest component of potential future tax liabilities associated with future repatriation of our foreign earnings and profits. As a result, we continue to evaluate our previous indefinite reinvestment assertions and, should we decide to change such assertions, we will adjust our income tax provision in the period in which such determination is made. SAB 118 provides for a measurement period up to one year from the enactment of the TCJA within which we may complete our final assessment of the legislation's impact. We will reflect and disclose in subsequent reporting periods any material adjustments to our provisional amount. As a result of the transition tax imposed by the TCJA, we expect to fully utilize all of our U.S. federal tax credit carryforwards of $101.2 million, causing a reduction in our non-current deferred tax assets at the end of 2017. The estimated cash tax impact of the transition tax is $27.8 million, net of tax credit carryforwards and expected tax credits estimated to be generated in 2017. We will elect to pay the transition cash tax over an eight-year period, interest free, with the first installment due in 2018. Accordingly, we classified the first installment of $2.2 million in our current income taxes payable and the remaining $25.6 million in our non-current income taxes payable. We did not discount the cash tax related to the transition tax pursuant to the exposure draft issued by the FASB in January 2018. We neither expect our future cash tax rate to be materially impacted by the transition tax nor our future cash tax rate to benefit significantly from the reduction in the U.S. corporate income tax rate. Undistributed Foreign Earnings and Profits As of December 30, 2017, we have accumulated undistributed earnings and profits of foreign subsidiaries of approximately $2.9 billion, $2.5 billion of which was subject to the transition tax associated with the TCJA and $.4 billion of which was otherwise previously taxed. Deferred income taxes for approximately $2.3 billion of these accumulated undistributed earnings and profits of foreign subsidiaries have not been provided as of December 30, 2017 since they are intended to be indefinitely reinvested in foreign operations. Notwithstanding the fact that the TCJA reduced the significance of the U.S. federal income tax consequences of future repatriation, we continue to face uncertainties that significantly limit our ability to determine the amount of potential unrecognized deferred tax liabilities related to our indefinite reinvestment in our foreign subsidiaries. These uncertainties include, but are not limited to, the timing, amount, and sequence of repatriation transactions; future foreign currency fluctuations; local country tax laws or applicable treaty exemptions; entity classification and ownership status; and the corporate actions we ultimately take to reverse our investment basis differences at the time of assumed repatriation. As a result, we believe it continues to be not practicable to calculate the deferred taxes associated with these indefinitely reinvested earnings and profits. In making this assertion, we evaluated, 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 share repurchases. Deferred Income Taxes 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 Unrealized foreign currency losses (1) – Other assets .9 Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets (2) ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ) ) Repatriation accrual (3) ) ) Foreign operating loss recapture ) ) Other liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities (2) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Primarily reflect the unrealized foreign currency losses in 2017 related to our net investment hedge described in Note 5, "Financial Instruments." (2) Reflect gross amounts before jurisdictional netting of deferred tax assets and liabilities. (3) The repatriation accruals as of December 30, 2017 and December 31, 2016 primarily include net deferred tax liabilities of $27.7 million and $62.4 million, respectively, associated with the future tax cost to repatriate earnings of our foreign subsidiaries that are not indefinitely reinvested. 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 30, 2017 and December 31, 2016 was $63.4 million and $60.4 million, respectively. Net operating loss carryforwards of foreign subsidiaries at December 30, 2017 and December 31, 2016 were $633.7 million and $689.9 million, respectively. Tax credit carryforwards of both domestic and foreign subsidiaries at December 30, 2017 and December 31, 2016 totaled $14 million and $111.3 million, respectively. If unused, foreign net operating losses and tax credit carryforwards will expire as follows: (In millions) Net Operating (1) Tax Credits ​ ​ ​ ​ ​ ​ ​ ​ 2018 $ $ .1 2019 .1 2020 .2 2021 .4 2022 .5 2023 .5 2024 .4 .3 2025 .3 2026 .9 2027 .8 .3 2028 – .1 2029 – .1 2030 – .2 2031 – .3 2032 – .4 2033 – – 2034 .7 – 2035 – – 2036 – – 2037 – – Indefinite life/no expiry ​ ​ ​ ​ ​ ​ ​ ​ 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 30, 2017, we had net operating loss carryforwards in certain state jurisdictions of $523 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 $521.1 million of the carryforwards. As of December 30, 2017, our provision for income taxes does not reflect any material benefits from applicable tax holidays in foreign jurisdictions. Unrecognized Tax Benefits As of December 30, 2017, our unrecognized tax benefits totaled $108.7 million, $83.9 million of which, if recognized, would reduce our annual effective income tax rate. 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. 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 expense of $1.5 million, tax expense of $3.1 million, and tax benefit of $1.3 million in the Consolidated Statements of Income in 2017, 2016, and 2015, respectively. We have accrued $25.8 million and $22.3 million for interest and penalties, net of tax benefit, in the Consolidated Balance Sheets at December 30, 2017 and December 31, 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 Additions (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 2017 Consolidated Financial Statements are being issued, we and our U.S. subsidiaries have completed the Internal Revenue Service's Compliance Assurance Process Program through 2016. We also expect a German tax audit for tax years 2006-2010 to be completed in 2018. 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 $22 million, primarily as a result of audit settlements and closing tax years. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 30, 2017 | |
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 neither organized nor 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 .2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net by type Restructuring charges: Severance and related costs $ $ $ Asset impairment charges and lease cancellation costs Other items: Transaction costs – Net gains on sales of assets ) ) ) Net loss from curtailment and settlement of pension obligations – .3 Legal settlements – – (.3 ) Loss on sale of product line and related exit costs – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $515.1 million, $377.4 million, and $414.6 million in 2017, 2016, and 2015, 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 $1.3 billion in 2017, and $1.14 billion in both 2016 and 2015. 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. 30, 2017 | |
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 $29.3 million in 2017, $37.9 million in 2016, and $37.6 million in 2015. 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 values of this investment were $9.1 million and $9.5 million as of December 30, 2017 and December 31, 2016, respectively, and were 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, were as follows: (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest, net of capitalized amounts $ $ $ Income taxes, net of refunds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign 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 $4.1 million, $1.6 million, and $6.1 million in 2017, 2016, and 2015, respectively. We had no operations in hyperinflationary economies in fiscal years 2017, 2016, or 2015. 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. We continue to be subject to certain indemnification obligations under the terms of the purchase agreement. 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. 30, 2017 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | NOTE 17. QUARTERLY FINANCIAL INFORMATION (Unaudited) (In millions, except per share data) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 Net sales $ $ $ $ Gross profit Net income (loss) (1) ) Net income (loss) per common share (.68 ) Net income (loss) per common share, assuming dilution (.66 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) During the fourth quarter of 2017, we recognized a net tax charge of $172 million as a result of the TCJA. "Other expense, net" is presented by type for each quarter below: (In millions) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 Restructuring charges: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs – .3 .1 Other items: Net gains on sales of assets – – – ) Transaction costs .8 .3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 30, 2017 | |
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 and controlled 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. |
Fiscal Year | Fiscal Year Normally, our fiscal years consist of 52 weeks, but every fifth or sixth fiscal year consists of 53 weeks. Our 2017, 2016, and 2015 fiscal years consisted of 52-week periods ending December 30, 2017, December 31, 2016, and January 2, 2016, respectively. |
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 year 2015. Unless otherwise noted, the results and financial condition of discontinued operations have been excluded from the notes to our Consolidated Financial Statements. |
Accounting Guidance Update | Accounting Guidance Update In the first quarter of 2017, we adopted an accounting guidance update that simplifies several aspects of the accounting for stock-based payment transactions. As a result of adopting this update, beginning in the first quarter of 2017, (i) the tax effects related to stock-based payments at settlement or expiration were recognized through the income statement, a change from the previous requirement that certain tax effects be recognized in capital in excess of par value, and, as required by this guidance, this change was applied prospectively, and (ii) all tax-related cash flows resulting from stock-based payments were reported as operating activities on the statements of cash flows, a change from the previous requirement to present excess tax benefits as an inflow from financing activities and an outflow from operating activities, and, as permitted by this update, these changes were applied prospectively. Refer to Note 14, "Taxes Based on Income," for more information. In the third quarter of 2017, we adopted an accounting guidance update that simplifies the measurement of goodwill impairment. This guidance update eliminates step two of the goodwill impairment test, so that goodwill impairment is the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Our adoption of this guidance update did not have a significant impact on our financial position, results of operations, cash flows, or disclosures. |
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 2017 or 2016. However, during 2017, 2016, and 2015, our ten largest customers by net sales represented approximately 15%, 14%, and 15% of our net sales, respectively. As of December 30, 2017 and December 31, 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 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 incurred during the application development stage of software development, including costs incurred for 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 using 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, and trade names and trademarks. In performing the required impairment tests, we perform a quantitative assessment, primarily consisting of a present value (discounted cash flow) method, to determine the fair value of the reporting units with goodwill. For certain reporting units the goodwill of which was acquired in the current period, we perform a qualitative assessment to determine whether a quantitative assessment is necessary. 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 compare the fair value of each reporting unit to its carrying amount, and, to the extent the carrying amount exceeds the fair value, an impairment of goodwill is recognized for the excess up to the amount of goodwill of that reporting unit. 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 materially differ from these estimates and projections. 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 derivative 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 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). Other derivatives not designated as hedges are recorded on the balance sheets at fair value, with changes in fair value recognized in earnings. 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. We also utilize certain foreign-currency-denominated debt to mitigate our foreign currency translation exposure from our net investment in foreign operations. See also Note 5, "Financial Instruments," for more information. |
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 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 The accounting guidance update that simplifies several aspects of the accounting for stock-based payment transactions provided an accounting policy election in accounting for forfeitures of stock-based awards. We elected to continue our current practice of estimating expected forfeitures in determining the compensation cost to be recognized each period, rather than accounting for forfeitures as they occur. No long-term incentive compensation expense was capitalized in 2017, 2016, or 2015. 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 a performance objective based on a financial 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. LTI Units 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. See also Note 12, "Long-term Incentive Compensation," for more information. |
Taxes Based on Income | Taxes Based on Income Our provision for income taxes is determined using the asset and liability approach in accordance with GAAP. 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. Our income tax provision for fiscal year 2017 includes the estimated impact of the TCJA enacted in the U.S. on December 22, 2017. The TCJA significantly revises U.S. corporate income taxation, among other changes, lowering corporate income tax rates, implementing a modified territorial tax regime, and imposing a one-time transition tax through a deemed repatriation of accumulated untaxed earnings and profits of foreign subsidiaries. We include a reasonable estimate ("provisional amount") of the impact of the TCJA on our tax provision following the guidance of SAB 118. The final impact of the TCJA may differ from the provisional amount as included, possibly materially, due to, among other things, further refinement of our calculations, changes in interpretations and assumptions we have made, regulatory and administrative guidance that may be issued, and actions we may take as a result of the TCJA. See also Note 14, "Taxes Based on Income," for more information. |
Recent Accounting Requirements | Recent Accounting Requirements In February 2018, the Financial Accounting Standards Board ("FASB") issued guidance that provides entities with the option to reclassify certain tax effects of the TCJA in accumulated other comprehensive income to retained earnings. This guidance can be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal income tax rate pursuant to the TCJA is recognized. The guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted for reporting periods for which financial statements have yet to be issued or made available for issuance. We are currently assessing the impact of this guidance on our financial position and disclosures. In August 2017, the FASB issued amended guidance to improve the financial reporting of hedging relationships to better reflect the economic results of an entity's risk management activities in its financial statements, as well as to simplify the application of hedge accounting. The amended presentation and disclosure guidance is required prospectively. The guidance will be effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures. In May 2017, the FASB issued amended guidance that provides clarity on which changes to share-based awards are considered substantive and require modification accounting to be applied. This guidance is effective for interim and annual periods beginning after December 15, 2017. We do not regularly modify the terms and conditions of share-based awards and do not believe our adoption of this amended guidance will have a significant effect on our financial position, results of operations, cash flows, and disclosures. In March 2017, the FASB issued guidance that requires employers with defined benefit plans to present only the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Employers are required to present the other components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. Components other than the service cost component will not be eligible for capitalization in assets. Employers are required to apply the guidance on the presentation of the components of net periodic benefit cost in the income statement retrospectively, while the guidance that limits the capitalization of net periodic benefit cost in assets to the service cost component must be applied prospectively. This guidance is effective for interim and annual periods beginning after December 15, 2017. The non-service cost components of net periodic pension cost totaled approximately $18 million and $53 million for the years ended 2017 and 2016, respectively. The amount in 2016 included a recognized loss on settlement of pension obligations of approximately $41 million. We do not expect this guidance to have a significant impact on the presentation of our results of operations and 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 qualifies as a business. This guidance is for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. We do not anticipate that our adoption of this guidance 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 they occur. This guidance is effective for fiscal years and interim periods beginning after December 15, 2017. The guidance requires modified retrospective adoption. Upon adoption, we expect to derecognize tax-related deferred charges, including tax-related deferred charges recorded in 2017, and recognize deferred taxes related to certain intra-entity asset transfers as a net reduction to retained earnings. Refer to Note 14, "Taxes Based on Income," for more information. We do not believe adoption of this guidance will have a significant effect 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 and classification of certain cash receipts and cash payments in the statement of cash flows. This guidance requires retrospective adoption and is effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted. Based on the information we have to date, we do not anticipate that the adoption of this guidance will have a significant impact on our cash flows. In March 2016, and in subsequent updates, the FASB issued revised guidance on accounting for leases that requires lessees to recognize the rights and obligations created by leases on their balance sheets. This guidance, which will be effective for interim and annual periods beginning after December 15, 2018, also requires enhanced disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. Early adoption is permitted. We expect to adopt this guidance as of the effective date. 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. The guidance provides an optional transition practical expedient to not evaluate existing or expired land easements that were not previously accounted for as leases under the current guidance. We are currently assessing the impact of this guidance on our financial position, results of operations, cash flows, and disclosures, and expect its adoption to have a significant impact on our financial position 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 requires 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"). We will adopt the new standard under the modified retrospective approach in the first quarter of 2018. To prepare for this adoption, we established a project plan and cross-functional team to manage the assessment, design, and implementation of this new guidance. 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. However, our evaluation of the impact could change if we enter into new revenue arrangements in the future or interpretations of the new guidance evolve. Upon adoption of this revised guidance, allowances for customer returns, currently presented as a reduction of trade accounts receivable, will be classified as a returns liability. Our allowance for customer returns was $11.1 million and $10 million as of December 30, 2017 and December 31, 2016, respectively. The value of return assets is not expected to be significant. Effective beginning on the first day of our 2018 fiscal year, we have implemented appropriate changes to processes, policies, systems, and controls to support revenue recognition and disclosures in accordance with the revised guidance. |
GOODWILL AND OTHER INTANGIBLE27
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
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 2, 2016 $ $ $ – $ Acquisitions (1) – Transfer (2) – ) – Translation adjustments ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of December 31, 2016 2017 Acquisitions (1) – Acquisition adjustments (3) – .7 Translation adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill as of December 30, 2017 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Goodwill acquired in 2016 primarily related to the Mactac acquisition. Goodwill acquired in 2017 related to the acquisitions of Hanita, which is included in our Label and Graphic Materials ("LGM") reportable segment, and Finesse Medical and Yongle Tape, which are included in our Industrial and Healthcare Materials ("IHM") reportable segment. (2) In connection with our 2016 change in operating structure, we allocated goodwill associated with our fastener solutions reporting unit from our Retail Branding and Information Solutions ("RBIS") reportable segment to 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. (3) Goodwill purchase price allocation adjustments related to the acquisition of Mactac in August 2016. |
Summary of the preliminary amounts and weighted useful lives of finite-lived intangible assets | Amount Weighted-average ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ Patents and other acquired technology Trade names and trademarks ​ ​ ​ ​ ​ ​ ​ ​ Amount Weighted-average ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ Patents and other acquired technology ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of finite-lived intangible assets | 2017 2016 (In millions) Gross Accumulated Net Gross Accumulated Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships (1) $ $ $ $ $ $ Patents and other acquired technology (1) Trade names and trademarks (2) Other intangibles – .2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes respective finite-lived intangible assets acquired from the 2017 Acquisitions and the Mactac acquisition. (2) Includes respective finite-lived intangible assets acquired from the 2017 Acquisitions. |
Estimated amortization expense for finite lived intangible assets | (In millions) Estimated ​ ​ ​ ​ ​ 2018 $ 2019 2020 2021 2022 ​ ​ ​ ​ ​ |
DEBT AND CAPITAL LEASES (Tables
DEBT AND CAPITAL LEASES (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
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 2025 at 1.25% – Senior notes due 2033 at 6.0% Capital leases Other borrowings (1) – Less amount classified as current ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt and capital leases (2) $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Other borrowings consisted of long-term bank borrowings by foreign subsidiaries. (2) Includes unamortized debt issuance cost and debt discount of $7.1 million and $.7 million as of year-end 2017, respectively, and $3.6 million and $.4 million as of year-end 2016, 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) ​ ​ ​ ​ ​ 2018 (classified as current) $ 2019 2020 2021 2022 2023 and thereafter ​ ​ ​ ​ ​ |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
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 ) .6 (.7 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ .8 $ (.8 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Components of the net gains (losses) recognized in income related to other derivative instruments, which are not designated as hedging instruments | (In millions) Location of Net Gains (Losses) in Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Cost of products sold $ ) $ $ Foreign exchange contracts Marketing, general and administrative expense ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Components of the gain (loss), before tax, recognized in Accumulated other comprehensive loss related to the net investment hedge | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency denominated debt $ ) $ N/A $ N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Cash Flow Hedging | |
Fair value and balance sheet locations of derivatives | Asset Liability (In millions) Balance Sheet Location Balance Sheet Location ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ .4 $ Other accrued liabilities $ .6 $ Commodity contracts Other current assets – .5 Other accrued liabilities – – Commodity contracts Other assets – .1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ .4 $ $ .6 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Not designated as hedging instruments | |
Fair value and balance sheet locations of derivatives | Asset Liability (In millions) Balance Sheet Location Balance Sheet Location ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts Other current assets $ $ Other accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
PENSION AND OTHER POSTRETIREM30
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
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 (.2 ) ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of plan benefit obligations | Pension Benefits U.S. Postretirement 2017 2016 2017 2016 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in projected benefit obligations Projected benefit obligations at beginning of year $ $ $ $ $ $ Service cost .5 .4 – – Interest cost .1 .2 Participant contribution – – .5 .5 Amendments – ) – (.6 ) – – Actuarial loss (gain) ) (.1 ) (.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 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 2017 2016 (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 – (.7 ) – – – – Acquisition (1) – – – – – Employer contributions .9 .9 Participant contributions – – .5 .5 Benefits paid ) ) ) ) ) ) Settlements (2) – – ) – – – Foreign currency translation – – ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at end of year $ $ $ $ $ – $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In connection with the Mactac acquisition 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 2017 2016 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status of the plans Other accrued liabilities $ ) $ ) $ ) $ ) $ (.5 ) $ (.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 | U.S. Postretirement Pension Benefits Health Benefits 2017 2016 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 2017 2016 (In millions) U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss $ $ $ $ $ $ Prior service cost (credit) ) ) ) ) Net transition obligation – .1 – .2 – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in accumulated other comprehensive loss $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of pretax amounts, including that of discontinued operations, recognized in "Other comprehensive loss (income)" | Pension Benefits U.S. Postretirement 2017 2016 2015 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss (gain) $ $ ) $ $ $ $ $ – $ (.2 ) $ ) Prior service (credit) cost – ) – (.6 ) – (.7 ) – – – Amortization of unrecognized: Net actuarial loss ) ) ) ) ) ) ) ) ) Prior service (cost) credit (.9 ) .4 ) .4 ) .3 Net transition obligation – – – (.1 ) – – – – – Curtailments – – – – – .2 – – – Settlements – – ) – – ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in other comprehensive (income) loss $ $ ) $ ) $ $ (.1 ) $ ) $ $ $ (.3 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of net periodic benefit cost (credit) | Pension Benefits U.S. Postretirement 2017 2016 2015 (In millions) U.S. Int'l U.S. Int'l U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost $ .5 $ $ .4 $ $ .4 $ $ – $ – $ – Interest cost .1 .1 .3 Actuarial (gain) loss – (.2 ) – .4 – – – – Expected return on plan assets ) ) ) ) ) ) – – – Amortization of actuarial loss Amortization of prior service cost (credit) .9 (.4 ) (.4 ) (.3 ) ) ) ) Amortization of transition obligation – – – .1 – – – – – Recognized net (gain) loss on curtailments – – – (.2 ) – (.2 ) – – – Recognized loss on settlements (1) – – – – – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost (credit) $ $ $ $ $ $ $ ) $ ) $ (.8 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 in Switzerland in 2015. These losses on settlements were recorded in "Other expense, net" in the Consolidated Statements of Income. |
Schedule of weighted-average assumptions used to determine net periodic cost | Pension Benefits U.S. Postretirement 2017 2016 2015 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 .5 ​ ​ ​ ​ ​ |
Schedule of anticipated future benefit payments | Pension Benefits U.S. Postretirement (In millions) U.S. Int'l ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2018 $ $ $ .5 2019 .4 2020 .3 2021 .3 2022 .3 2023 - 2027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
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) .8 (.5 ) ) 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 Cash $ – $ – $ – $ – Pooled funds – liability-hedging portfolio (1) Pooled funds – growth portfolio (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total U.S. plan assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2016 Cash $ – $ – $ – $ – Pooled funds – liability-hedging portfolio (1) Pooled funds – growth portfolio (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. |
Int'l | |
Defined Benefit Plans | |
Schedule of fair value of plan assets | Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 December 31, 2016 $ Net realized and unrealized gain .7 Purchases Settlements ) Impact of changes in foreign currency exchange rates ​ ​ ​ ​ ​ Balance at December 30, 2017 $ ​ ​ ​ ​ ​ |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
COMMITMENTS | |
Minimum annual rental commitments on operating leases | Year (In millions) ​ ​ ​ ​ ​ 2018 $ 2019 2020 2021 2022 2023 and thereafter ​ ​ ​ ​ ​ Total minimum lease payments $ ​ ​ ​ ​ ​ |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
CONTINGENCIES | |
Costs of environmental liabilities with remediation | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ Balance at beginning of year $ $ Acquisitions – Charges (reversals), net Payments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
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 30, 2017: Fair Value Measurements Using (In millions) Total Quoted Significant Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Trading securities $ $ $ $ – Derivative assets – – Bank drafts – – Liabilities Derivative liabilities $ $ .1 $ $ – Contingent consideration liabilities – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ $ – $ $ – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
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 per common share: Continuing operations (A) ÷ (D) $ $ $ Discontinued operations (B) ÷ (D) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share (C) ÷ (D) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share, assuming dilution: Continuing operations (A) ÷ (E) $ $ $ Discontinued operations (B) ÷ (E) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per common share, assuming dilution (C) ÷ (E) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUPPLEMENTAL EQUITY AND COMPR35
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
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 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 $ ) $ ) $ $ ) Other comprehensive income (loss) before reclassifications, net of tax ) ) Reclassifications to net income, net of tax – .9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive income (loss), net of tax ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 30, 2017 $ ) $ ) $ (.3 ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
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 $ .2 $ ) $ Cost of products sold Commodity contracts .2 (.7 ) ) Cost of products sold Interest rate contracts ) (.1 ) (.1 ) Interest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Total before tax .5 (.5 ) 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 expense (benefit) allocated to each component of other comprehensive income | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation: Translation gain (loss) $ ) $ ) $ ) Pension and other postretirement benefits: Net loss recognized from actuarial gain/loss and prior service cost/credit .5 ) ) Reclassifications to net income Cash flow hedges: (Losses) gains recognized on cash flow hedges (.6 ) .1 (.3 ) Reclassifications to net income .5 (.5 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit related to items of other comprehensive loss $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
LONG-TERM INCENTIVE COMPENSAT36
LONG-TERM INCENTIVE COMPENSATION (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Long-Term Incentive Compensation | |
Summary of stock-based compensation expense from continuing operations and the related recognized tax benefit | (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 December 31, 2016 $ $ Exercised ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 30, 2017 $ $ Options vested and expected to vest at December 30, 2017 Options exercisable at December 30, 2017 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Performance Units (PUs) | |
Long-Term Incentive Compensation | |
Information related to awarded PUs | Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ Granted at target Adjustment for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 30, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects adjustments for awards vesting based on above-target performance for the 2014-2016 performance period. |
Market-leveraged stock units (MSUs) | |
Long-Term Incentive Compensation | |
Information related to awarded MSUs | Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ Granted at target Adjustments for above-target performance (1) Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 30, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Reflects adjustments for awards vesting based on above-target performance for each of the performance periods vesting in 2017. |
Restricted Stock Units (RSUs) | |
Long-Term Incentive Compensation | |
Summary of information related to awarded RSUs | Number of Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 31, 2016 $ Granted Vested ) Forfeited/cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Unvested at December 30, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ |
COST REDUCTION ACTIONS (Tables)
COST REDUCTION ACTIONS (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
COST REDUCTION ACTIONS | |
Restructuring charges and payments | During 2017, 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 ) $ Lease cancellation costs .2 (.8 ) – – .6 Asset impairment charges – – ) – – Prior actions Severance and related costs (.7 ) (.6 ) – – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ (.1 ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Prior actions Severance and related costs ) ) – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ) $ .1 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
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 .2 .9 Corporate – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
TAXES BASED ON INCOME (Tables)
TAXES BASED ON INCOME (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
TAXES BASED ON INCOME | |
Taxes based on income | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current: U.S. federal tax $ $ $ State taxes .2 .6 (.1 ) 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 ) Tax Cuts and Jobs Act (1) – – Foreign earnings taxed at different rates (2) ) ) Excess tax benefits associated with stock-based payments (3) ) – – 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) During 2017, we recognized a net tax charge of $172 million as a result of the TCJA. This amount includes the direct impacts of the TCJA, including items that would otherwise be separately disclosed as tax effects of foreign earnings taxed at different rates, tax contingencies and audit settlements, and other items. (2) Included foreign earnings taxed in the U.S., net of credits, in all years. (3) During 2017, we recognized a tax benefit of $16 million as a result of our adoption of the accounting guidance update related to stock-based payments. |
Income (loss) from continuing operations before taxes from our U.S. and international operations | (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. $ $ $ 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 Unrealized foreign currency losses (1) – Other assets .9 Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets (2) ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ) ) Repatriation accrual (3) ) ) Foreign operating loss recapture ) ) Other liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities (2) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ (1) Primarily reflect the unrealized foreign currency losses in 2017 related to our net investment hedge described in Note 5, "Financial Instruments." (2) Reflect gross amounts before jurisdictional netting of deferred tax assets and liabilities. (3) The repatriation accruals as of December 30, 2017 and December 31, 2016 primarily include net deferred tax liabilities of $27.7 million and $62.4 million, respectively, associated with the future tax cost to repatriate earnings of our foreign subsidiaries that are not indefinitely reinvested. |
Schedule of tax credit and net operating loss carryforwards | (In millions) Net Operating (1) Tax Credits ​ ​ ​ ​ ​ ​ ​ ​ 2018 $ $ .1 2019 .1 2020 .2 2021 .4 2022 .5 2023 .5 2024 .4 .3 2025 .3 2026 .9 2027 .8 .3 2028 – .1 2029 – .1 2030 – .2 2031 – .3 2032 – .4 2033 – – 2034 .7 – 2035 – – 2036 – – 2037 – – Indefinite life/no expiry ​ ​ ​ ​ ​ ​ ​ ​ 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 Additions (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. 30, 2017 | |
SEGMENT INFORMATION | |
Summary of financial information by reportable segment | (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 .2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net by type Restructuring charges: Severance and related costs $ $ $ Asset impairment charges and lease cancellation costs Other items: Transaction costs – Net gains on sales of assets ) ) ) Net loss from curtailment and settlement of pension obligations – .3 Legal settlements – – (.3 ) Loss on sale of product line and related exit costs – – ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. 30, 2017 | |
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. 30, 2017 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | |
Quarterly financial information | (In millions, except per share data) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 Net sales $ $ $ $ Gross profit Net income (loss) (1) ) Net income (loss) per common share (.68 ) Net income (loss) per common share, assuming dilution (.66 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) During the fourth quarter of 2017, we recognized a net tax charge of $172 million as a result of the TCJA. |
Summary of other expense, net by type for each quarter | (In millions) First Second Third Fourth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 Restructuring charges: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs – .3 .1 Other items: Net gains on sales of assets – – – ) Transaction costs .8 .3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Summary Of Significant Accounting Policies | |||
Length of Fiscal Period | 364 days | 364 days | 364 days |
Maximum length of time hedged in cash flow hedge | 36 months | ||
Stock-based compensation expense capitalized | $ 0 | $ 0 | $ 0 |
Recent Accounting Requirements | |||
Recognized loss on settlement | $ (41.4) | ||
Customer concentration risk | Net sales | Ten largest customers | |||
Summary Of Significant Accounting Policies | |||
Concentration risk percentage | 15.00% | 14.00% | 15.00% |
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 | ||
Accounting Standards Update 2017-07 | |||
Recent Accounting Requirements | |||
Non-service cost components of net periodic pension cost | $ 18 | $ 53 | |
Recognized loss on settlement | 41 | ||
Accounting Standards Update 2014-09 | |||
Recent Accounting Requirements | |||
Allowance for customer returns | $ 11.1 | $ 10 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | Aug. 01, 2016 | Dec. 30, 2017 |
2017 Acquisitions | ||
Acquisitions | ||
Purchase price | $ 360 | |
Additional earn-out payments related to acquired businesses' achievement of certain performance targets for 2017 and 2018 years | 45 | |
Accrued additional earn-out payments | 45 | |
Yongle Tape Acquisition | ||
Acquisitions | ||
Purchase consideration paid on achievement of certain pre-acquisition performance targets | $ 15 | |
Mactac Acquisition | ||
Acquisitions | ||
Purchase price | $ 220 |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Goodwill | ||
Impairment of goodwill | $ 0 | |
Changes in the net carrying amount of goodwill | ||
Goodwill, Beginning Balance | 793.6 | $ 686.2 |
Acquisitions | 143 | 122.1 |
Acquisition adjustments | 5.5 | |
Translation adjustments | 43 | (14.7) |
Goodwill, Ending Balance | 985.1 | 793.6 |
Indefinite-Lived Intangible Assets | ||
Indefinite-lived intangible assets, carrying value | 21.2 | 20.3 |
Impairment of indefinite-lived intangible assets | 0 | |
Mactac Acquisition | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 29 | |
Mactac Acquisition | Significant Other Unobservable Inputs (Level 3) | Minimum | ||
Finite Lived Intangible Assets Acquired | ||
Discount rate used to value the intangibles | 10.50% | |
Mactac Acquisition | Significant Other Unobservable Inputs (Level 3) | Maximum | ||
Finite Lived Intangible Assets Acquired | ||
Discount rate used to value the intangibles | 12.50% | |
2017 Acquisitions | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 110 | |
2017 Acquisitions | Significant Other Unobservable Inputs (Level 3) | Minimum | ||
Finite Lived Intangible Assets Acquired | ||
Discount rate used to value the intangibles | 11.00% | |
2017 Acquisitions | Significant Other Unobservable Inputs (Level 3) | Maximum | ||
Finite Lived Intangible Assets Acquired | ||
Discount rate used to value the intangibles | 16.50% | |
Customer relationships | Mactac Acquisition | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 26.1 | |
Weighted-average amortization period (in years) | 15 years | |
Customer relationships | 2017 Acquisitions | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 71.5 | |
Weighted-average amortization period (in years) | 16 years | |
Patents and other acquired technology | Mactac Acquisition | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 2.5 | |
Weighted-average amortization period (in years) | 4 years | |
Patents and other acquired technology | 2017 Acquisitions | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 34 | |
Weighted-average amortization period (in years) | 8 years | |
Trade names and trademarks | 2017 Acquisitions | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 4.2 | |
Weighted-average amortization period (in years) | 6 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 | $ 373.3 | 277.9 |
Acquisitions | 17.5 | 107.8 |
Acquisition adjustments | 4.8 | |
Translation adjustments | 33.9 | (12.4) |
Goodwill, Ending Balance | 429.5 | 373.3 |
Retail Branding and Information Solutions | ||
Changes in the net carrying amount of goodwill | ||
Goodwill, Beginning Balance | 353.9 | 408.3 |
Transfer | (53.1) | |
Translation adjustments | 1.5 | (1.3) |
Goodwill, Ending Balance | 355.4 | 353.9 |
Accumulated impairment losses | 820 | 820 |
Industrial and Healthcare Materials | ||
Changes in the net carrying amount of goodwill | ||
Goodwill, Beginning Balance | 66.4 | |
Acquisitions | 125.5 | 14.3 |
Acquisition adjustments | 0.7 | |
Transfer | 53.1 | |
Translation adjustments | 7.6 | (1) |
Goodwill, Ending Balance | $ 200.2 | $ 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. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 455.8 | $ 332.2 | |
Accumulated Amortization | 310.7 | 285.8 | |
Net Carrying Amount | 145.1 | 46.4 | |
Amortization expense on finite-lived intangible assets from business acquisition | 18.6 | 19.9 | $ 20.5 |
Customer relationships | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 329.2 | 247.1 | |
Accumulated Amortization | 226.4 | 209.4 | |
Net Carrying Amount | 102.8 | 37.7 | |
Patents and other acquired technology | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 86.9 | 52 | |
Accumulated Amortization | 51.3 | 46.7 | |
Net Carrying Amount | 35.6 | 5.3 | |
Trade names and trademarks | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 27.7 | 21.4 | |
Accumulated Amortization | 21 | 18.2 | |
Net Carrying Amount | 6.7 | 3.2 | |
Other intangibles | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 12 | 11.7 | |
Accumulated Amortization | $ 12 | 11.5 | |
Net Carrying Amount | $ 0.2 |
GOODWILL AND OTHER INTANGIBLE46
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS - Future Amortization Expense (Details) $ in Millions | Dec. 30, 2017USD ($) |
Future amortization expense for finite-lived intangible assets | |
2,018 | $ 14.7 |
2,019 | 13.9 |
2,020 | 12 |
2,021 | 11.8 |
2,022 | $ 10.8 |
DEBT AND CAPITAL LEASES (Detail
DEBT AND CAPITAL LEASES (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Short-Term Borrowings from U.S. commercial paper | |||
Short-term debt | |||
U.S. Commercial paper | $ 183.8 | $ 44.5 | |
Weighted average interest rate | 1.79% | 0.90% | |
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 | $ 0 |
DEBT AND CAPITAL LEASES - Revol
DEBT AND CAPITAL LEASES - Revolving Credit Facility (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Nov. 30, 2017 | Oct. 31, 2017 | |
Uncommitted lines of credit | |||||
Revolving credit facility | |||||
Uncommitted lines of credit | $ 330 | ||||
Short term borrowings outstanding | $ 76.1 | $ 72.9 | |||
Weighted average interest rate | 6.20% | 6.50% | |||
Revolving credit facility | |||||
Revolving credit facility | |||||
Maximum borrowing capacity | $ 800 | ||||
Extension in maturity date | 1 year | ||||
Commitment for increased borrowing | $ 300 | ||||
Amount outstanding | 0 | $ 0 | |||
Commitment fees | $ 1.1 | $ 1.1 | $ 1.9 | ||
Previous revolving credit facility | |||||
Revolving credit facility | |||||
Maximum borrowing capacity | $ 700 |
DEBT AND CAPITAL LEASES - Long-
DEBT AND CAPITAL LEASES - Long-Term Debt and Respective Weighted-Average Interest Rate (Details) € in Millions, $ in Millions | 1 Months Ended | ||||
Oct. 31, 2017USD ($) | Mar. 31, 2017EUR (€) | Mar. 31, 2017USD ($) | Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Long-term debt and capital leases | |||||
Capital leases | $ 25 | $ 25.2 | |||
Other borrowings | 16.6 | ||||
Less amount classified as current | (5.5) | (252.7) | |||
Total long-term debt and capital leases | 1,316.3 | 713.4 | |||
Unamortized debt issuance cost | 7.1 | 3.6 | |||
Unamortized debt discount | 0.7 | 0.4 | |||
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 | ||||
Interest rate of senior notes (as a percent) | 6.60% | 6.60% | |||
Senior notes due 2020 at 5.4% | |||||
Long-term debt and capital leases | |||||
Senior notes | $ 249.5 | $ 249.3 | |||
Interest rate of senior notes (as a percent) | 5.40% | 5.40% | |||
Senior notes due 2023 at 3.4% | |||||
Long-term debt and capital leases | |||||
Senior notes | $ 248.7 | $ 248.4 | |||
Interest rate of senior notes (as a percent) | 3.40% | 3.40% | |||
Senior notes due 2025 at 1.3% | |||||
Long-term debt and capital leases | |||||
Senior notes | $ 588.4 | ||||
Interest rate of senior notes (as a percent) | 1.25% | 1.25% | |||
Senior notes due 2033 at 6.0% | |||||
Long-term debt and capital leases | |||||
Senior notes | $ 148.7 | $ 148.6 | |||
Interest rate of senior notes (as a percent) | 6.00% | 6.00% | |||
Senior notes due March 2025 at 1.25% | |||||
Long-term debt and capital leases | |||||
Senior notes issued | € | € 500 | ||||
Interest rate of senior notes (as a percent) | 1.25% | ||||
Proceeds, net of underwriting discounts and offering expenses | € 495.5 | $ 526.6 | |||
Senior notes due October 2017 at 6.6% | |||||
Long-term debt and capital leases | |||||
Repayment of senior notes | $ 250 |
DEBT AND CAPITAL LEASES - Lon50
DEBT AND CAPITAL LEASES - Long-Term Debt and Capital Leases (Details) $ in Millions | Dec. 30, 2017USD ($) |
Maturities of Long-term debt and capital leases | |
2018 (classified as current) | $ 6.4 |
2,019 | 19.9 |
2,020 | 269.3 |
2,021 | 3.9 |
2,022 | 3.4 |
2023 and thereafter | 1,030.6 |
Total amount of imputed interest on capital lease obligations | 3.9 |
Current amount of imputed interest on capital lease obligations | $ 1 |
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. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Debt and Capital Leases | ||||
Interest costs | $ 67.9 | $ 63.5 | $ 63.5 | |
Interest costs capitalized | 4.9 | 3.6 | $ 3 | |
Fair value of debt | 1,600 | 1,310 | ||
Capital Lease Obligations | ||||
Capital Lease Obligations | 25 | $ 25.2 | ||
Mentor lease facility | ||||
Capital Lease Obligations | ||||
Term of lease financing for commercial facility | 10 years | |||
Capital Lease Obligations | 20 | |||
Capital Lease Obligations, Noncurrent | 18 | |||
Capital Lease Obligations, Current | $ 2 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - Cash Flow Hedging $ in Millions | Dec. 30, 2017USD ($) |
Commodity contracts | |
Financial Instruments | |
Notional amount | $ 3.8 |
Foreign exchange contracts | |
Financial Instruments | |
Notional amount | $ 1,370 |
FINANCIAL INSTRUMENTS - Cash Fl
FINANCIAL INSTRUMENTS - Cash Flow Hedges and Other Derivatives, Fair Value (Details) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
Cash Flow Hedging | ||
Cash Flow Hedges, Fair Value | ||
Asset | $ 0.4 | $ 3.6 |
Liability | 0.6 | 1 |
Cash Flow Hedging | Foreign exchange contracts | Other current assets | ||
Cash Flow Hedges, Fair Value | ||
Asset | 0.4 | 3 |
Cash Flow Hedging | Foreign exchange contracts | Other accrued liabilities | ||
Cash Flow Hedges, Fair Value | ||
Liability | 0.6 | 1 |
Cash Flow Hedging | Commodity contracts | Other current assets | ||
Cash Flow Hedges, Fair Value | ||
Asset | 0.5 | |
Cash Flow Hedging | Commodity contracts | Other assets | ||
Cash Flow Hedges, Fair Value | ||
Asset | 0.1 | |
Not designated as hedging instruments | Foreign exchange contracts | Other current assets | ||
Cash Flow Hedges, Fair Value | ||
Asset | 3.5 | 1.6 |
Not designated as hedging instruments | Foreign exchange contracts | Other accrued liabilities | ||
Cash Flow Hedges, Fair Value | ||
Liability | $ 5.6 | $ 6.8 |
FINANCIAL INSTRUMENTS - Gains (
FINANCIAL INSTRUMENTS - Gains (Losses) Recognized in AOCI (Details) - Cash Flow Hedging - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Gain (loss) recognized in current earnings | |||
Gains (losses) recognized in accumulated other comprehensive loss | $ (2.8) | $ 0.8 | $ (0.8) |
Cash flow net loss to be reclassified within the next 12 months | 0.3 | ||
Foreign exchange contracts | |||
Gain (loss) recognized in current earnings | |||
Gains (losses) recognized in accumulated other comprehensive loss | (2.2) | 0.2 | (0.1) |
Commodity contracts | |||
Gain (loss) recognized in current earnings | |||
Gains (losses) recognized in accumulated other comprehensive loss | $ (0.6) | $ 0.6 | $ (0.7) |
FINANCIAL INSTRUMENTS - Net Gai
FINANCIAL INSTRUMENTS - Net Gains (Losses) Recognized in Current Earnings (Details) - Not designated as hedging instruments - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Gain (loss) recognized in current earnings | |||
Net Gains (Losses) in Income | $ (44.1) | $ 6.9 | $ 5.8 |
Foreign exchange contracts | Cost of products sold | |||
Gain (loss) recognized in current earnings | |||
Net Gains (Losses) in Income | (1.2) | 2.8 | 2.9 |
Foreign exchange contracts | Marketing, general and administrative expense | |||
Gain (loss) recognized in current earnings | |||
Net Gains (Losses) in Income | $ (42.9) | $ 4.1 | $ 2.9 |
FINANCIAL INSTRUMENTS - Net Inv
FINANCIAL INSTRUMENTS - Net Investment Hedge (Details) € in Millions, $ in Millions | 12 Months Ended | |
Dec. 30, 2017USD ($) | Mar. 31, 2017EUR (€) | |
Gain (loss) recognized in current earnings | ||
Amount of ineffectiveness from net investment hedge in earnings | $ | $ 0 | |
Senior notes due March 2025 at 1.25% | ||
Gain (loss) recognized in current earnings | ||
Senior notes issued | € | € 500 | |
Interest rate of senior notes (as a percent) | 1.25% | |
Net Investment Hedge | Designated | ||
Gain (loss) recognized in current earnings | ||
Foreign currency denominated debt | $ | $ (63.7) | |
Net Investment Hedge | Designated | Senior notes due March 2025 at 1.25% | ||
Gain (loss) recognized in current earnings | ||
Senior notes issued | € | € 500 | |
Interest rate of senior notes (as a percent) | 1.25% |
PENSION AND OTHER POSTRETIREM57
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jul. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
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 | $ 1,082.1 | 1,033.7 | $ 1,088.9 | |
Net actuarial loss (gain) | 21.8 | 39.1 | 21.1 | |
Components of net periodic benefit cost (credit) | ||||
Recognized loss on settlements | 41.4 | |||
Actuarial loss (gain) | $ 72 | $ 73.1 | 39.1 | |
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 | ||||
Projected benefit obligations | $ 836.7 | 762.9 | 674.7 | |
Net actuarial loss (gain) | (17.2) | 48.9 | $ 11.3 | |
Components of net periodic benefit cost (credit) | ||||
Actuarial loss (gain) | $ (26.4) | $ 123.8 | ||
Int'l | Equity Securities | ||||
Defined Benefit Plans | ||||
Target assets allocation (as a percent) | 39.00% | |||
Int'l | Fixed income securities and cash | ||||
Defined Benefit Plans | ||||
Target assets allocation (as a percent) | 43.00% | |||
Int'l | Other investments | ||||
Defined Benefit Plans | ||||
Target assets allocation (as a percent) | 18.00% |
PENSION AND OTHER POSTRETIREM58
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Benefit Plans (Details) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 |
U.S. | |||
Defined Benefit Plans | |||
Total plan assets | $ 740.2 | $ 672.1 | $ 704.9 |
U.S. | Total | |||
Defined Benefit Plans | |||
Total plan assets | 740.2 | 672.1 | |
U.S. | Liability hedging portfolio | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 275.6 | 269 | |
U.S. | Growth portfolio | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 464.6 | 403.1 | |
Int'l | |||
Defined Benefit Plans | |||
Total plan assets | 683.7 | 584.2 | $ 552.1 |
Int'l | Total | |||
Defined Benefit Plans | |||
Total plan assets | 683.7 | 584.2 | |
Int'l | Cash | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 1.7 | 3 | |
Int'l | Pooled funds - Fixed income securities | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 278.5 | 284.2 | |
Int'l | Insurance contracts | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 35.7 | 30.5 | |
Int'l | Equity Securities | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 277.3 | 223.4 | |
Int'l | Pooled funds - Other | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 90.5 | 43.1 | |
Int'l | Quoted Prices in Active Markets (Level 1) | Cash | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 1.7 | 3 | |
Int'l | Significant Other Unobservable Inputs (Level 3) | Insurance contracts | |||
Defined Benefit Plans | |||
Total plan assets at fair value | $ 35.7 | $ 30.5 |
PENSION AND OTHER POSTRETIREM59
PENSION AND OTHER POSTRETIREMENT BENEFITS - Reconciliation For Assets Measure At Fair Value Using Level 3 (Details) - Int'l - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Reconciliation of Level 3 assets | ||
Impact of changes in foreign currency exchange rates | $ 71.1 | $ (51.1) |
Significant Other Unobservable Inputs (Level 3) | Insurance contracts | ||
Reconciliation of Level 3 assets | ||
Balance at the beginning of the year | 30.5 | |
Net realized and unrealized gain | 0.7 | |
Purchases | 2.8 | |
Settlements | (1.4) | |
Impact of changes in foreign currency exchange rates | 3.1 | |
Balance at the end of the year | $ 35.7 | $ 30.5 |
PENSION AND OTHER POSTRETIREM60
PENSION AND OTHER POSTRETIREMENT BENEFITS - One-Percentage-Point Change Assumed (Details) | 12 Months Ended |
Dec. 30, 2017USD ($) | |
Defined Benefit Plans | |
Healthcare cost trend rate assumed for 2018 (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 | $ (0.2) |
U.S. Postretirement Health Benefits | |
Defined Benefit Plans | |
Minimum age for which supplemental Medicare benefits are provided | 65 years |
U.S. | |
Defined Benefit Plans | |
Maximum age for which postretirement benefits are provided | 65 years |
PENSION AND OTHER POSTRETIREM61
PENSION AND OTHER POSTRETIREMENT BENEFITS - Change in Projected Benefit Obligations (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jul. 02, 2016USD ($) | Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($)item | |
U.S. | |||
Change in projected benefit obligations | |||
Projected benefit obligations at beginning of year | $ 1,033.7 | $ 1,088.9 | |
Service cost | 0.5 | 0.4 | |
Interest cost | 35.3 | 34.4 | |
Actuarial loss (gain) | $ 72 | 73.1 | 39.1 |
Benefits paid | (60.5) | (59.9) | |
Settlements | $ (70) | (69.2) | |
Projected benefit obligations at end of year | 1,082.1 | 1,033.7 | |
Accumulated benefit obligations at end of year | 1,082.1 | 1,033.7 | |
Int'l | |||
Change in projected benefit obligations | |||
Projected benefit obligations at beginning of year | 762.9 | 674.7 | |
Service cost | 18.2 | 13.9 | |
Interest cost | 14.3 | 16.4 | |
Participant contribution | 3.4 | 2.9 | |
Amendments | (2.1) | (0.6) | |
Actuarial loss (gain) | (26.4) | 123.8 | |
Plan transfers | (1.3) | ||
Acquisition | 14.6 | ||
Benefits paid | (22.5) | (21.8) | |
Curtailments | (0.3) | ||
Foreign currency translation | 90.2 | (60.7) | |
Projected benefit obligations at end of year | 836.7 | 762.9 | |
Accumulated benefit obligations at end of year | 355.6 | $ 704.8 | |
Belgium | Mactac Acquisition | |||
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 | $ 5.9 | |
Interest cost | 0.1 | 0.2 | |
Participant contribution | 0.5 | 0.5 | |
Actuarial loss (gain) | (0.1) | (0.2) | |
Benefits paid | (1.4) | (1.4) | |
Projected benefit obligations at end of year | $ 4.1 | $ 5 |
PENSION AND OTHER POSTRETIREM62
PENSION AND OTHER POSTRETIREMENT BENEFITS - Change in Plan Assets (Details) $ in Millions | 12 Months Ended | |
Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($)item | |
U.S. | ||
Change in plan assets | ||
Plan assets at beginning of year | $ 672.1 | $ 704.9 |
Actual return on plan assets | 90.1 | 42.9 |
Employer contributions | 38.5 | 53.4 |
Benefits paid | (60.5) | (59.9) |
Settlements | (69.2) | |
Plan assets at end of year | 740.2 | 672.1 |
Int'l | ||
Change in plan assets | ||
Plan assets at beginning of year | 584.2 | 552.1 |
Actual return on plan assets | 34.2 | 79.4 |
Plan transfers | (0.7) | |
Acquisition | 8.9 | |
Employer contributions | 14 | 13.8 |
Participant contributions | 3.4 | 2.9 |
Benefits paid | (22.5) | (21.8) |
Foreign currency translation | 71.1 | (51.1) |
Plan assets at end of year | 683.7 | $ 584.2 |
Belgium | Mactac Acquisition | ||
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 | 0.5 |
Benefits paid | $ (1.4) | $ (1.4) |
PENSION AND OTHER POSTRETIREM63
PENSION AND OTHER POSTRETIREMENT BENEFITS - Funded Status of the Plan (Details) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
U.S. and international plans | ||
Pension plans with projected benefit obligations in excess of plan assets | ||
Projected benefit obligation in excess of plan assets | $ 1,920 | $ 1,800 |
Fair value of plan assets in excess of plan assets | 1,420 | 1,260 |
Pension plans with accumulated benefit obligations in excess of plan assets | ||
Accumulated benefit obligations | 1,440 | 1,740 |
Fair value of plan assets | 994 | 1,260 |
U.S. | ||
Funded status of the plans | ||
Other accrued liabilities | (33.4) | (13.5) |
Long-term retirement benefits and other liabilities | (308.5) | (348.1) |
Plan assets less than benefit obligations | $ (341.9) | $ (361.6) |
Weighted-average assumptions used to determine year-end benefit obligations | ||
Discount rate (as a percent) | 3.71% | 4.25% |
Int'l | ||
Funded status of the plans | ||
Other accrued liabilities | $ (2.4) | $ (2) |
Long-term retirement benefits and other liabilities | (150.6) | (176.7) |
Plan assets less than benefit obligations | $ (153) | $ (178.7) |
Weighted-average assumptions used to determine year-end benefit obligations | ||
Discount rate (as a percent) | 2.25% | 2.12% |
Compensation rate increase | 2.29% | 2.27% |
U.S. Postretirement Health Benefits | ||
Funded status of the plans | ||
Other accrued liabilities | $ (0.5) | $ (0.8) |
Long-term retirement benefits and other liabilities | (3.6) | (4.2) |
Plan assets less than benefit obligations | $ (4.1) | $ (5) |
Weighted-average assumptions used to determine year-end benefit obligations | ||
Discount rate (as a percent) | 3.55% | 3.95% |
PENSION AND OTHER POSTRETIREM64
PENSION AND OTHER POSTRETIREMENT BENEFITS - Pre-tax Amount Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
U.S. | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | $ 567.2 | $ 564.2 |
Prior service cost (credit) | 16.7 | 17.5 |
Net amount recognized in accumulated other comprehensive loss | 583.9 | 581.7 |
Int'l | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | 186.5 | 213.6 |
Prior service cost (credit) | (7.4) | (4.9) |
Net transition obligation | 0.1 | 0.2 |
Net amount recognized in accumulated other comprehensive loss | 179.2 | 208.9 |
U.S. Postretirement Health Benefits | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | 17 | 18.5 |
Prior service cost (credit) | (13.1) | (16.4) |
Net amount recognized in accumulated other comprehensive loss | $ 3.9 | $ 2.1 |
PENSION AND OTHER POSTRETIREM65
PENSION AND OTHER POSTRETIREMENT BENEFITS - Pre-tax Amount Recognized in Other Comprehensive Loss (Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
U.S. | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | $ 21.8 | $ 39.1 | $ 21.1 |
Amortization of unrecognized net actuarial loss | (18.7) | (19) | (20) |
Amortization of unrecognized prior service (cost) credit | (0.9) | (1.2) | (1.2) |
Settlements | (41.4) | ||
Net amount recognized in other comprehensive (income) loss | 2.2 | (22.5) | (0.1) |
Int'l | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | (17.2) | 48.9 | 11.3 |
Prior service (credit) cost | (2.1) | (0.6) | (0.7) |
Amortization of unrecognized net actuarial loss | (10.8) | (7) | (9.4) |
Amortization of unrecognized prior service (cost) credit | 0.4 | 0.4 | 0.3 |
Amortization of transition obligation | (0.1) | ||
Curtailments | 0.2 | ||
Settlements | (4.3) | ||
Net amount recognized in other comprehensive (income) loss | (29.7) | 41.6 | (2.6) |
U.S. Postretirement Health Benefits | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | (0.2) | (1.4) | |
Amortization of unrecognized net actuarial loss | (1.5) | (1.7) | (2.2) |
Amortization of unrecognized prior service (cost) credit | 3.3 | 3.2 | 3.3 |
Net amount recognized in other comprehensive (income) loss | $ 1.8 | $ 1.3 | $ (0.3) |
PENSION AND OTHER POSTRETIREM66
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. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Components of net periodic benefit cost (credit) | ||||
Recognized loss on settlements | $ 41.4 | |||
U.S. | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | $ 0.5 | 0.4 | ||
Interest cost | 35.3 | 34.4 | ||
Actuarial loss (gain) | $ 72 | 73.1 | 39.1 | |
Recognized loss on settlements | $ 41.4 | |||
U.S. | Continuing operations | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 0.5 | 0.4 | $ 0.4 | |
Interest cost | 35.3 | 34.4 | 45.8 | |
Actuarial loss (gain) | 1.7 | (0.2) | 0.4 | |
Expected return on plan assets | (40.5) | (42.7) | (51.5) | |
Amortization of actuarial loss | 18.7 | 19 | 20 | |
Amortization of prior service cost (credit) | 0.9 | 1.2 | 1.2 | |
Recognized loss on settlements | 41.4 | |||
Net periodic benefit cost (credit) | 16.6 | 53.5 | 16.3 | |
Int'l | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 18.2 | 13.9 | ||
Interest cost | 14.3 | 16.4 | ||
Actuarial loss (gain) | (26.4) | 123.8 | ||
Amortization of transition obligation | (0.1) | |||
Int'l | Continuing operations | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 18.2 | 13.9 | 13.8 | |
Interest cost | 14.3 | 16.4 | 17.3 | |
Expected return on plan assets | (21.1) | (21.4) | (21.5) | |
Amortization of actuarial loss | 10.8 | 7 | 9.4 | |
Amortization of prior service cost (credit) | (0.4) | (0.4) | (0.3) | |
Amortization of transition obligation | 0.1 | |||
Recognized net (gain) loss on curtailments | (0.2) | (0.2) | ||
Recognized loss on settlements | 4.3 | |||
Net periodic benefit cost (credit) | 21.8 | 15.4 | 22.8 | |
U.S. Postretirement Health Benefits | ||||
Components of net periodic benefit cost (credit) | ||||
Interest cost | 0.1 | 0.2 | ||
Actuarial loss (gain) | (0.1) | (0.2) | ||
U.S. Postretirement Health Benefits | Continuing operations | ||||
Components of net periodic benefit cost (credit) | ||||
Interest cost | 0.1 | 0.1 | 0.3 | |
Amortization of actuarial loss | 1.5 | 1.7 | 2.2 | |
Amortization of prior service cost (credit) | (3.3) | (3.2) | (3.3) | |
Net periodic benefit cost (credit) | $ (1.7) | $ (1.4) | $ (0.8) |
PENSION AND OTHER POSTRETIREM67
PENSION AND OTHER POSTRETIREMENT BENEFITS - Weighted-Average Assumptions for Determining Net Periodic Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
U.S. | |||
Weighted-average assumptions used for determining net periodic cost | |||
Discount rate | 4.18% | 4.55% | 4.00% |
Expected return on assets | 7.00% | 7.25% | 7.50% |
Company's contribution to the defined benefit plan in the next fiscal year | $ 34 | ||
Int'l | |||
Weighted-average assumptions used for determining net periodic cost | |||
Discount rate | 2.12% | 2.95% | 2.54% |
Expected return on assets | 3.77% | 4.14% | 4.27% |
Compensation rate increase | 2.27% | 2.24% | 2.22% |
Company's contribution to the defined benefit plan in the next fiscal year | $ 14.9 | ||
U.S. Postretirement Health Benefits | |||
Weighted-average assumptions used for determining net periodic cost | |||
Discount rate | 3.95% | 4.13% | 3.50% |
Company's contribution to the defined benefit plan in the next fiscal year | $ 0.5 |
PENSION AND OTHER POSTRETIREM68
PENSION AND OTHER POSTRETIREMENT BENEFITS - Future Benefit Payments (Details) $ in Millions | Dec. 30, 2017USD ($) |
U.S. | |
Future Benefit Payments | |
2,018 | $ 83 |
2,019 | 58.9 |
2,020 | 59 |
2,021 | 60.6 |
2,022 | 60.5 |
2023 - 2027 | 305.9 |
Int'l | |
Future Benefit Payments | |
2,018 | 20.4 |
2,019 | 21.8 |
2,020 | 21.3 |
2,021 | 23 |
2,022 | 25.9 |
2023 - 2027 | 145.5 |
U.S. Postretirement Health Benefits | |
Future Benefit Payments | |
2,018 | 0.5 |
2,019 | 0.4 |
2,020 | 0.3 |
2,021 | 0.3 |
2,022 | 0.3 |
2023 - 2027 | $ 1.3 |
PENSION AND OTHER POSTRETIREM69
PENSION AND OTHER POSTRETIREMENT BENEFITS - Estimated Amortization Amounts in AOCI (Details) $ in Millions | Dec. 30, 2017USD ($) |
U.S. | |
Estimated amortization amounts in AOCI | |
Net actuarial loss | $ 20.8 |
Prior service cost (credit) | 0.8 |
Net loss (gain) to be recognized | 21.6 |
Int'l | |
Estimated amortization amounts in AOCI | |
Net actuarial loss | 8.1 |
Prior service cost (credit) | (0.5) |
Net transition obligation | 0.1 |
Net loss (gain) to be recognized | 7.7 |
U.S. Postretirement Health Benefits | |
Estimated amortization amounts in AOCI | |
Net actuarial loss | 1.4 |
Prior service cost (credit) | (3.3) |
Net loss (gain) to be recognized | $ (1.9) |
PENSION AND OTHER POSTRETIREM70
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Contribution and Other Retirement Plans (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Defined contribution and other retirement plans | |||
Recognized defined contribution plan cost | $ 20.2 | $ 20 | $ 20.2 |
Deferred compensation plan accrued | $ 86.9 | $ 78.7 | |
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 | 0.2 | 0.1 | |
Value of DSUs outstanding under directors deferred equity compensation plan for non-employee directors | $ 17.8 | $ 10.2 | |
Other assets | |||
Defined contribution and other retirement plans | |||
Cash surrender value included in other assets | $ 243.5 | $ 230.6 |
COMMITMENTS (Details)
COMMITMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Minimum annual rental commitments on operating leases | |||
2,018 | $ 48.2 | ||
2,019 | 35.8 | ||
2,020 | 26.3 | ||
2,021 | 18.2 | ||
2,022 | 13.6 | ||
2023 and thereafter | 47.6 | ||
Total minimum lease payments | 189.7 | ||
Rent expense for operating leases from continuing operations | $ 64 | $ 58 | $ 58 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | 12 Months Ended | |
Dec. 30, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Environmental Liabilities Associated with Remediation | ||
Environmental site contingency number of sites | item | 13 | |
Balance at beginning of year | $ 21.3 | $ 17.7 |
Acquisitions | 3 | |
Charges (reversals), net | 2.8 | 11.6 |
Payments | (6) | (8) |
Balance at end of year | 21.1 | 21.3 |
Short term environmental liabilities | $ 5 | $ 8 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Trading securities | $ 22.7 | $ 18.1 |
Derivative assets | 3.9 | 5.2 |
Bank drafts | 18.4 | 14.3 |
Liabilities | ||
Derivative liabilities | 6.2 | 7.8 |
Contingent consideration liabilities | 45 | |
Cash and Cash Equivalents | ||
Assets | ||
Trading securities | 0.4 | 0.5 |
Other current assets | ||
Assets | ||
Trading securities | 22.3 | 17.6 |
Quoted Prices in Active Markets (Level 1) | ||
Assets | ||
Trading securities | 17.7 | 11.7 |
Derivative assets | 0.6 | |
Bank drafts | 18.4 | 14.3 |
Liabilities | ||
Derivative liabilities | 0.1 | |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Trading securities | 5 | 6.4 |
Derivative assets | 3.9 | 4.6 |
Liabilities | ||
Derivative liabilities | 6.1 | $ 7.8 |
Significant Other Unobservable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration liabilities | 45 | |
Significant Other Unobservable Inputs (Level 3) | Other accrued liabilities | ||
Liabilities | ||
Contingent consideration liabilities | 18 | |
Significant Other Unobservable Inputs (Level 3) | Long-term retirement benefits and other liabilities | ||
Liabilities | ||
Contingent consideration liabilities | $ 27 |
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. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
NET INCOME PER COMMON SHARE | |||||||||||
Income from continuing operations | $ 281.8 | $ 320.7 | $ 274.4 | ||||||||
Loss from discontinued operations, net of tax | (0.1) | ||||||||||
Net income available to common shareholders | $ (59.6) | $ 108.3 | $ 120.9 | $ 112.2 | $ 62 | $ 89.1 | $ 80 | $ 89.6 | $ 281.8 | $ 320.7 | $ 274.3 |
Weighted average number of common shares outstanding | 88.3 | 89.1 | 91 | ||||||||
Dilutive shares (additional common shares issuable under stock-based awards) | 1.8 | 1.6 | 1.9 | ||||||||
Weighted average number of common shares outstanding, assuming dilution | 90.1 | 90.7 | 92.9 | ||||||||
Net income per common share: | |||||||||||
Continuing operations (in dollars per share) | $ 3.19 | $ 3.60 | $ 3.01 | ||||||||
Net income per common share (in dollars per share) | $ (0.68) | $ 1.23 | $ 1.37 | $ 1.27 | $ 0.70 | $ 1 | $ 0.90 | $ 1 | 3.19 | 3.60 | 3.01 |
Net income per common share, assuming dilution: | |||||||||||
Continuing operations (in dollars per share) | 3.13 | 3.54 | 2.95 | ||||||||
Net income per common share, assuming dilution (in dollars per share) | $ (0.66) | $ 1.20 | $ 1.34 | $ 1.25 | $ 0.69 | $ 0.98 | $ 0.88 | $ 0.98 | $ 3.13 | $ 3.54 | $ 2.95 |
Stock-based compensation awards excluded from the computation of net income per common share, assuming dilution | 0.2 | 1 |
SUPPLEMENTAL EQUITY AND COMPR75
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Apr. 30, 2017 | |
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 | |||
Common stock, authorized shares | 400,000,000 | 400,000,000 | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||
Repurchase of common stock | 1,500,000 | 3,800,000 | ||
Repurchase of common stock, value | $ 129.7 | $ 262.4 | $ 232.3 | |
Share repurchase authorized amount | $ 650 | |||
Share repurchase remained authorized amount | $ 625.2 | $ 104.9 |
SUPPLEMENTAL EQUITY AND COMPR76
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION - Change in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | $ (751.9) | $ (683) | |
Other comprehensive income (loss) before reclassifications, net of tax | 51.2 | (115.9) | |
Reclassifications to net income, net of tax | 20.2 | 47 | |
Net current-period other comprehensive income (loss) income, net of tax | 71.4 | (68.9) | $ (137.5) |
Balance at end of the year | (680.5) | (751.9) | (683) |
Foreign Currency Translation | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | (212.6) | (158.9) | |
Other comprehensive income (loss) before reclassifications, net of tax | 56.4 | (53.7) | |
Net current-period other comprehensive income (loss) income, net of tax | 56.4 | (53.7) | |
Balance at end of the year | (156.2) | (212.6) | (158.9) |
Pension and Other Postretirement Benefits | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | (540.3) | (521.6) | |
Other comprehensive income (loss) before reclassifications, net of tax | (3) | (62.9) | |
Reclassifications to net income, net of tax | 19.3 | 44.2 | |
Net current-period other comprehensive income (loss) income, net of tax | 16.3 | (18.7) | |
Balance at end of the year | (524) | (540.3) | (521.6) |
Cash Flow Hedges | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Balance at beginning of the year | 1 | (2.5) | |
Other comprehensive income (loss) before reclassifications, net of tax | (2.2) | 0.7 | |
Reclassifications to net income, net of tax | 0.9 | 2.8 | |
Net current-period other comprehensive income (loss) income, net of tax | (1.3) | 3.5 | |
Balance at end of the year | $ (0.3) | $ 1 | $ (2.5) |
SUPPLEMENTAL EQUITY AND COMPR77
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION - Reclassification Adjustment Out of Accumulated Other Comprehensive loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Amounts reclassified from Accumulated other comprehensive loss | |||
Cost of products sold | $ (4,801.6) | $ (4,386.8) | $ (4,321.1) |
Interest expense | (63) | (59.9) | (60.5) |
Income from continuing operations before taxes | 589.5 | 477.1 | 408.9 |
Provision for income taxes | (307.7) | (156.4) | (134.5) |
Income from continuing operations | 281.8 | 320.7 | 274.4 |
Income tax (benefit) expense allocated - Foreign currency translation: | |||
Translation gain (loss) | (25.1) | (3.3) | (2.2) |
Income tax (benefit) expense allocated - Pension and other postretirement benefits: | |||
Net loss recognized from actuarial gain/loss and prior service cost/credit | 0.5 | (24.2) | (11.4) |
Reclassifications to net income | 8.9 | 22.6 | 10.4 |
Income tax (benefit) expense allocated - Cash flow hedges: | |||
(Losses) gains recognized on cash flow hedges | (0.6) | 0.1 | (0.3) |
Reclassifications to net income | 0.5 | 1 | (0.5) |
Income tax benefit related to items of other comprehensive loss | (15.8) | (3.8) | (4) |
Amounts Reclassified from Accumulated other comprehensive loss | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Income from continuing operations | (20.2) | (47) | (20.9) |
Pension and Other Postretirement Benefits | Amounts Reclassified from Accumulated other comprehensive loss | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Pension and other postretirement benefits | (28.2) | (66.8) | (33.3) |
Provision for income taxes | 8.9 | 22.6 | 10.4 |
Income from continuing operations | (19.3) | (44.2) | (22.9) |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Income from continuing operations before taxes | (1.4) | (3.8) | 2.5 |
Provision for income taxes | 0.5 | 1 | (0.5) |
Income from continuing operations | (0.9) | (2.8) | 2 |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Foreign exchange contracts | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Cost of products sold | 0.2 | (3) | 3.9 |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Commodity contracts | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Cost of products sold | 0.2 | (0.7) | (1.3) |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Interest Rate Contracts | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Interest expense | $ (1.8) | $ (0.1) | $ (0.1) |
LONG-TERM INCENTIVE COMPENSAT78
LONG-TERM INCENTIVE COMPENSATION (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2017shares | Dec. 30, 2017USD ($)itemshares | Dec. 31, 2016USD ($)$ / shares | Jan. 02, 2016USD ($)shares | |
Long-Term Incentive 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 | $ 26.8 | $ 31.7 | $ 43.3 | |
Proceeds from exercises of stock options | 22 | 71 | 104 | |
Tax benefit associated with option exercises | 10.1 | $ 11.3 | 15.6 | |
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 | ||||
Long-Term Incentive Compensation | ||||
Stock-based compensation expense | 30.2 | $ 27.2 | 26.3 | |
Tax benefit | 4.3 | 8.5 | 8.2 | |
Long-term incentive units | Continuing operations | Marketing, general and administrative expense | ||||
Long-Term Incentive Compensation | ||||
Cash-based awards compensation expense | 36.6 | 23.8 | 27.1 | |
Employee Service Cash Award Tax Benefit from Compensation Expense | $ 8.3 | $ 7.8 | $ 8.6 | |
Stock Options | ||||
Long-Term Incentive Compensation | ||||
Option expiration period | 10 years | |||
Stock Options | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Stock Options | Minimum | ||||
Long-Term Incentive 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) | ||||
Long-Term Incentive 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 | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Market-leveraged stock units (MSUs) | Minimum | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 0.00% | |||
Market-leveraged stock units (MSUs) | Maximum | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 200.00% | |||
Market-leveraged long-term incentive units | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Performance long-term incentive units | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 3 years | |||
Performance long-term incentive units | Minimum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 0.00% | |||
Performance long-term incentive units | Maximum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 200.00% | |||
Performance Units (PUs) | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 3 years | |||
Performance Units (PUs) | Minimum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 0.00% | |||
Performance Units (PUs) | Maximum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 200.00% | |||
Restricted Stock Units (RSUs) | Ratable vesting | Non-employee directors | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 1 year | 3 years | ||
Restricted Stock Units (RSUs) | Ratable vesting | Employees | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Unvested Stock Options, Performance Units, Restricted Stock Units and Market-leveraged stock units (MSUs) | Continuing operations | ||||
Long-Term Incentive Compensation | ||||
Unrecognized compensation cost related to share based compensation cost | $ 38 | |||
Unrecognized compensation cost weighted average recognition period | 2 years | |||
Equity Plan | ||||
Long-Term Incentive Compensation | ||||
Aggregate number of shares available under the plan | shares | 5,400,000 | |||
Fungible share ratio | shares | 1.5 |
LONG-TERM INCENTIVE COMPENSAT79
LONG-TERM INCENTIVE COMPENSATION - Stock Option Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Number of options | ||
Outstanding beginning balance, options | 1,115,200 | |
Exercised, options | (571,600) | |
Outstanding ending balance, options | 543,600 | 1,115,200 |
Options vested and expected to vest, options | 527,400 | |
Options exercisable | 402,500 | |
Weighted-average exercise price | ||
Outstanding, Weighted-average exercise price, beginning balance | $ 41.29 | |
Exercised, weighted-average exercise price | 38.50 | |
Outstanding, Weighted-average exercise price, ending balance | 44.22 | $ 41.29 |
Options vested and expected to vest, Weighted-average exercise price | 43.30 | |
Options exercisable ,Weighted-average exercise price | $ 33.79 | |
Weighted-average remaining contractual life | ||
Outstanding ,Weighted-average remaining contractual life beginning balance | 4 years 11 months 9 days | 4 years 8 months 19 days |
Outstanding ,Weighted-average remaining contractual life ending balance | 4 years 11 months 9 days | 4 years 8 months 19 days |
Options vested or expected to vest, Weighted-average remaining contractual life | 4 years 9 months 29 days | |
Options exercisable, Weighted-average remaining contractual life | 3 years 8 months 19 days | |
Aggregate intrinsic value | ||
Outstanding, Aggregate intrinsic value beginning balance | $ 32.8 | |
Outstanding, Aggregate intrinsic value ending balance | 38.4 | $ 32.8 |
Options vested and expected to vest, Aggregate Intrinsic Value | 37.7 | |
Options exercisable, Aggregate Intrinsic Value | $ 32.6 |
LONG-TERM INCENTIVE COMPENSAT80
LONG-TERM INCENTIVE COMPENSATION - Number of Awards, Weighted-average Grant-date Fair Value (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Performance Units (PUs) | |||
Number of awards | |||
Unvested at December 31, 2016 | 490,800 | ||
Granted at target | 164,400 | ||
Adjustments for above-target performance | 114,200 | ||
Vested | (231,500) | ||
Forfeited/cancelled | (52,800) | ||
Unvested at December 30, 2017 | 485,100 | 490,800 | |
Fair value | $ 11.2 | $ 13.8 | $ 12.2 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 58.47 | ||
Weighted-average grant-date fair value, granted at target | 82.15 | $ 68.04 | $ 51.37 |
Weighted-average grant-date fair value, Adjustment for above-target performance | 48.59 | ||
Weighted-average grant-date fair value, vested | 48.26 | ||
Weighted-average grant-date fair value, forfeited/Cancelled | 66.08 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 68.15 | $ 58.47 | |
Market-leveraged stock units (MSUs) | |||
Number of awards | |||
Unvested at December 31, 2016 | 530,700 | ||
Granted at target | 123,700 | ||
Adjustments for above-target performance | 126,000 | ||
Vested | (342,000) | ||
Forfeited/cancelled | (34,800) | ||
Unvested at December 30, 2017 | 403,600 | 530,700 | |
Fair value | $ 19.3 | $ 12.4 | $ 9.8 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 62.09 | ||
Weighted-average grant-date fair value, granted at target | 91.40 | $ 72.93 | $ 56.46 |
Weighted-average grant-date fair value, Adjustment for above-target performance | 55.24 | ||
Weighted-average grant-date fair value, vested | 56.33 | ||
Weighted-average grant-date fair value, forfeited/Cancelled | 71.15 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 70.07 | $ 62.09 | |
Restricted Stock Units (RSUs) | |||
Number of awards | |||
Unvested at December 31, 2016 | 117,700 | ||
Granted at target | 74,500 | ||
Vested | (47,600) | ||
Forfeited/cancelled | (4,200) | ||
Unvested at December 30, 2017 | 140,400 | 117,700 | |
Fair value | $ 2.7 | $ 5.3 | $ 8.4 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 58.87 | ||
Weighted-average grant-date fair value, granted at target | 82.77 | $ 67.66 | $ 53.29 |
Weighted-average grant-date fair value, vested | 55.72 | ||
Weighted-average grant-date fair value, forfeited/Cancelled | 59.53 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 72.62 | $ 58.87 |
COST REDUCTION ACTIONS (Details
COST REDUCTION ACTIONS (Details) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017USD ($)item | Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($)item | |
2015/2016 Actions | |||
Restructuring charges: | |||
Charges (Reversals), net | $ | $ 34.1 | $ 20.9 | $ 26.1 |
Number of positions reduced as a result of Cost Reduction Actions | item | 920 | 440 | 430 |
Prior Actions | |||
Restructuring charges: | |||
Charges (Reversals), net | $ | $ 33.4 | ||
Number of positions reduced as a result of Cost Reduction Actions | item | 605 |
COST REDUCTION ACTIONS - Restru
COST REDUCTION ACTIONS - Restructuring Charges and Payments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Severance and related costs | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | $ 9.5 | $ 8.7 | $ 7.3 | $ 5.7 | $ 4 | $ 1.9 | $ 3.6 | $ 5.2 | $ 31.2 | $ 14.7 | $ 52.5 |
2015/2016 Actions | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | 34.1 | 20.9 | 26.1 | ||||||||
2015/2016 Actions | Severance and related costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 3.3 | 8.4 | 3.3 | 8.4 | |||||||
Charges (Reversals), net | 31.9 | 15.7 | |||||||||
Cash payments | (30.8) | (20.9) | |||||||||
Foreign Currency Translation | (0.1) | 0.1 | |||||||||
Ending Balance | 4.3 | 3.3 | 4.3 | 3.3 | 8.4 | ||||||
2015/2016 Actions | Asset impairment charges | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | 1 | 4.1 | |||||||||
Non-cash Impairment | (1) | (4.1) | |||||||||
2015/2016 Actions | Lease cancellation costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 0.2 | 0.2 | 0.2 | 0.2 | |||||||
Charges (Reversals), net | 1.2 | 1.1 | |||||||||
Cash payments | (0.8) | (1.1) | |||||||||
Ending Balance | 0.6 | 0.2 | 0.6 | 0.2 | 0.2 | ||||||
Prior Actions | |||||||||||
Cost Reduction Actions | |||||||||||
Charges (Reversals), net | 33.4 | ||||||||||
Prior Actions | Severance and related costs | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | 1.3 | 5.5 | 1.3 | 5.5 | |||||||
Charges (Reversals), net | (0.7) | (1) | |||||||||
Cash payments | (0.6) | (3.2) | |||||||||
Ending Balance | 1.3 | 1.3 | 5.5 | ||||||||
Total | |||||||||||
Cost Reduction Actions | |||||||||||
Beginning Balance | $ 4.8 | $ 14.1 | 4.8 | 14.1 | |||||||
Charges (Reversals), net | 33.4 | 19.9 | |||||||||
Cash payments | (32.2) | (25.2) | |||||||||
Non-cash Impairment | (1) | (4.1) | |||||||||
Foreign Currency Translation | (0.1) | 0.1 | |||||||||
Ending Balance | $ 4.9 | $ 4.8 | $ 4.9 | $ 4.8 | $ 14.1 |
COST REDUCTION ACTIONS - Rest83
COST REDUCTION ACTIONS - Restructuring Charges (Details) - Continuing operations - Other expense, net - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Restructuring charges: | |||
Restructuring charges | $ 33.4 | $ 19.9 | $ 59.5 |
Label and Graphic Materials | |||
Restructuring charges: | |||
Restructuring charges | 14.8 | 8.5 | 13.6 |
Retail Branding and Information Solutions | |||
Restructuring charges: | |||
Restructuring charges | 18.4 | 10.5 | 35.7 |
Industrial and Healthcare Materials | |||
Restructuring charges: | |||
Restructuring charges | $ 0.2 | $ 0.9 | 8 |
Corporate | |||
Restructuring charges: | |||
Restructuring charges | $ 2.2 |
TAXES BASED ON INCOME (Details)
TAXES BASED ON INCOME (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Current: | |||
U.S. federal tax | $ 47 | $ 10.1 | $ 26.4 |
State taxes | 0.2 | 0.6 | (0.1) |
International taxes | 111 | 77.3 | 92.7 |
Total | 158.2 | 88 | 119 |
Deferred: | |||
U.S. federal tax | 134.8 | 64.4 | 6.3 |
State taxes | (3.7) | (3) | 0.5 |
International taxes | 18.4 | 7 | 8.7 |
Total | 149.5 | 68.4 | 15.5 |
Provision for income taxes | $ 307.7 | $ 156.4 | $ 134.5 |
TAXES BASED ON INCOME - Increas
TAXES BASED ON INCOME - Increase (Decrease) in Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
TAXES BASED ON INCOME | |||
Computed tax at 35% of income before taxes | $ 206.7 | $ 167 | $ 143.1 |
U.S statutory income tax rate | 35.00% | 35.00% | 35.00% |
Increase (decrease) in taxes resulting from: | |||
State taxes, net of federal tax benefit | $ (3.2) | $ 2.2 | $ 1.3 |
Tax Cuts and Jobs Act | 172 | ||
Foreign earnings taxed at different rates | (40.2) | 27 | (7.5) |
Excess tax benefits associated with stock based payments | (16) | ||
Valuation allowance | (1.4) | (11.9) | 0.9 |
Corporate-owned life insurance | (6.7) | (4.3) | (1.9) |
U.S. federal research and development tax credits | (4.9) | (2.9) | (2.6) |
Tax contingencies and audit settlements | (1.9) | (20.7) | 5.1 |
Other items, net | 3.3 | (3.9) | |
Provision for income taxes | 307.7 | $ 156.4 | $ 134.5 |
Net tax charge result from TCJA | 172 | ||
Tax benefit recognized as a result of the adoption of the accounting guidance update related to stock-based payments | $ 16 |
TAXES BASED ON INCOME - Income
TAXES BASED ON INCOME - Income (Loss) from Continuing Operations before Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
TAXES BASED ON INCOME | |||
U.S. | $ 49 | $ 17.9 | $ 33.9 |
International | 540.5 | 459.2 | 375 |
Income from continuing operations before taxes | $ 589.5 | $ 477.1 | $ 408.9 |
TAXES BASED ON INCOME - Effecti
TAXES BASED ON INCOME - Effective Tax Rate (Details) - USD ($) $ in Millions | Dec. 22, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 |
Effective tax rate (as a percent) | 52.20% | 32.80% | 32.90% | |
Net tax charge result from TCJA | $ 172 | |||
Tax benefit from release of valuation allowance on certain state deferred tax assets | 5.1 | |||
Tax benefit, including interest and penalties, from effective settlements and changes in our judgment about tax filing positions as result of new information | 4.2 | |||
Tax benefit from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years | 4.4 | |||
Tax benefit recognized as a result of the adoption of the accounting guidance update related to stock-based payments | 16 | |||
Tax-related deferred charges recognized in other current assets and other assets | 14 | |||
Tax expense associated with the tax cost to repatriate current 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 and profits | 46.3 | |||
Tax benefits on changes in certain tax reserves, including interest and penalties, resulting from settlements of audits | 16.8 | 5.8 | ||
Tax benefits on changes in certain tax reserves, including interest and penalties, resulting from expirations of statutes of limitations | 5.4 | 8.2 | ||
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 benefit on release of valuation allowance on certain state deferred tax assets | 3.6 | |||
Tax expense from deferred tax adjustments resulting from tax rate changes in certain foreign jurisdictions | $ 8.4 | |||
Tax benefit from the extension of the federal research and development credit | $ 2.6 | |||
Corporate income tax rates that was enacted in the U.S. by the TCJA | 21.00% | |||
Estimated provisional amount from TCJA | 172 | |||
Estimated transition tax, provisional amount | 147 | |||
Estimated remeasurement of net U.S. deferred tax assets at a lower enacted corporate income tax rate | 49.2 | |||
Reserve related to potential uncertainties of our accumulated tax attributes that were used in our estimated transition tax calculation | 9.3 | |||
Estimated reduction of previously recognized U.S. deferred tax assets that no longer anticipate to benefit due to changes in future deductibility of executive compensation | 5.3 | |||
Net benefit primarily from reversal of the deferred tax liability that are previously recorded for future tax costs with repatriations of certain foreign earnings that are not indefinitely reinvested | 38.8 | |||
Increase to deferred tax liability due to absent the availability of foreign tax credit to offset against potential foreign withholding taxes related to future repatriation of certain foreign earnings and profit that are not indefinitely reinvested | 11.5 | |||
Deferred tax liability recorded for potential future taxes related to foreign earnings | 0 | |||
The fully utilizatin of U.S. federal tax credit carryforwards as a result of the transition tax imposed by the TCJA, causing a reduction in non-current deferred tax assets | 101.2 | |||
Estimated cash tax impact of transition tax, net of tax credit carryforwards and expected tax credits estimated to be generated in 2017 | $ 27.8 | |||
Transition cash tax, elected payment period (in years) | 8 years | |||
Transition cash tax first installment, current income taxes payable | $ 2.2 | |||
Transition cash tax balance, non-current income taxes payable | 25.6 | |||
Total accumulated undistributed earnings and profits of foreign subsidiaries | 2,900 | |||
Undistributed earnings and profits of foreign subsidiaries subject to transition tax associated with the TCJA | 2,500 | |||
Undistributed earnings and profits of foreign subsidiaries subject to transition tax associated with the TCJA that were previously taxed | 400 | |||
Deferred income taxes of accumulated undistributed earnings of foreign subsidiaries that are intended to be indefinitely reinvested in foreign operations | $ 2,300 | |||
Minimum | ||||
Percentage of ownership that provides full exemption for foreign dividends received by a U.S. corporation from a foreign corporation that implemented by the TCJA | 10.00% |
TAXES BASED ON INCOME - Schedul
TAXES BASED ON INCOME - Schedule of Components of the Temporary Differences (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Schedule of components of the temporary differences | ||
Accrued expenses not currently deductible | $ 19.9 | $ 42.1 |
Net operating losses | 185.9 | 195.9 |
Tax credit carryforwards | 14 | 111.3 |
Stock-based compensation | 18 | 28.4 |
Pension and other postretirement benefits | 140.9 | 207.7 |
Inventory reserves | 6.5 | 7.1 |
Unrealized foreign currency losses | 14.9 | |
Other assets | 6.3 | 0.9 |
Valuation allowance | (63.4) | (60.4) |
Total deferred tax assets | 343 | 533 |
Depreciation and amortization | (95.3) | (86.1) |
Repatriation accrual | (27.7) | (62.1) |
Foreign operating loss recapture | (54.9) | (79.8) |
Other liabilities | (8.8) | (2.3) |
Total deferred tax liabilities | (186.7) | (230.3) |
Total net deferred tax assets | 156.3 | 302.7 |
Net deferred tax liabilities associated with the future tax cost to repatriate non-indefinitely reinvested earnings of the Company's foreign subsidiaries | $ 27.7 | $ 62.4 |
TAXES BASED ON INCOME - Net Ope
TAXES BASED ON INCOME - Net Operating Loss and Tax Carryforwards (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | $ 14 | $ 111.3 |
Net operating loss and credit carryforward | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 633.7 | |
Tax credit carryforwards | 14 | |
2,018 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 14.3 | |
2,019 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 4.8 | |
2,020 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 5.5 | |
2,021 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 3.5 | |
2,022 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 9.8 | |
2,023 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 5 | |
2,024 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 0.4 | |
2,025 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 2.3 | |
2,026 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 0.9 | |
2,027 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 0.8 | |
2,034 | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 0.7 | |
Indefinite life/no expiry | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | 585.7 | |
2,018 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.1 | |
2,019 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.1 | |
2,020 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.2 | |
2,021 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.4 | |
2,022 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.5 | |
2,023 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.5 | |
2,024 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.3 | |
2,025 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.3 | |
2,026 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 1.6 | |
2,027 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.3 | |
2,028 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.1 | |
2,029 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.1 | |
2,030 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.2 | |
2,031 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.3 | |
2,032 | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 0.4 | |
Indefinite life/no expiry | ||
Net operating loss and tax carryforwards | ||
Tax credit carryforwards | 8.6 | |
Foreign | ||
Net operating loss and tax carryforwards | ||
Net operating loss carryforwards | $ 633.7 | $ 689.9 |
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 | $ 523 | |
Operating loss carryforwards, valuation allowance | $ 521.1 |
TAXES BASED ON INCOME - Unrecog
TAXES BASED ON INCOME - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
TAXES BASED ON INCOME | |||
Unrecognized tax benefits | $ 108.7 | $ 89.5 | $ 107.3 |
Unrecognized tax benefits, if recognized, would reduce annual effective income tax rate | 83.9 | 71.5 | |
Interest expense and penalties recognized in current year for uncertain tax positions | 1.5 | 3.1 | $ (1.3) |
Accrued interest and penalties for uncertain tax positions, net of tax benefit | $ 25.8 | $ 22.3 |
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. 30, 2017 | Dec. 31, 2016 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at beginning of year | $ 89.5 | $ 107.3 |
Additions for tax positions of the current year | 14.1 | 6.9 |
Additions (reductions) for tax positions of prior years | 3 | (15.7) |
Settlements with tax authorities | (1.6) | (2.1) |
Expirations of statutes of limitations | (2.7) | (4.2) |
Changes due to translation of foreign currencies | 6.4 | (2.7) |
Balance at end of year | 108.7 | $ 89.5 |
Reasonably possible decrease in uncertain tax positions, including interest and penalties, during the next 12 months | $ (22) |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Segment Information | |||||||||||
Net sales to unaffiliated customers | $ 1,735.3 | $ 1,679.5 | $ 1,626.9 | $ 1,572.1 | $ 1,550.8 | $ 1,508.7 | $ 1,541.5 | $ 1,485.5 | $ 6,613.8 | $ 6,086.5 | $ 5,966.9 |
Interest expense | (63) | (59.9) | (60.5) | ||||||||
Income from continuing operations before taxes | 589.5 | 477.1 | 408.9 | ||||||||
Capital expenditures | 193.8 | 176.9 | 138.9 | ||||||||
Depreciation and amortization expense | 178.7 | 180.1 | 188.3 | ||||||||
Other expense, net | $ 9 | $ 10.8 | $ 10.2 | $ 6.5 | $ 4.8 | $ 4.6 | $ 50.2 | $ 5.6 | 36.5 | 65.2 | 68.3 |
Intersegment sales | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 75 | 73.5 | 79 | ||||||||
Label and Graphic Materials | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 4,511.7 | 4,187.3 | 4,032.1 | ||||||||
Income from continuing operations before taxes | 567.3 | 516.2 | 453.4 | ||||||||
Capital expenditures | 125.5 | 118.8 | 68.3 | ||||||||
Depreciation and amortization expense | 102.3 | 103.1 | 104.9 | ||||||||
Other expense, net | 14.5 | 13 | 12.1 | ||||||||
Label and Graphic Materials | Intersegment sales | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 64.1 | 63.4 | 61.3 | ||||||||
Retail Branding and Information Solutions | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 1,511.2 | 1,445.4 | 1,443.4 | ||||||||
Income from continuing operations before taxes | 122.9 | 102.6 | 51.6 | ||||||||
Capital expenditures | 48.8 | 50.9 | 51 | ||||||||
Depreciation and amortization expense | 56.4 | 64.3 | 70.6 | ||||||||
Other expense, net | 18.1 | 9.8 | 45.7 | ||||||||
Retail Branding and Information Solutions | Intersegment sales | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 3.2 | 2.9 | 2.9 | ||||||||
Industrial and Healthcare Materials | Operating segments | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 590.9 | 453.8 | 491.4 | ||||||||
Income from continuing operations before taxes | 50.5 | 54.6 | 57.1 | ||||||||
Capital expenditures | 19.5 | 7.2 | 19.6 | ||||||||
Depreciation and amortization expense | 20 | 12.7 | 12.8 | ||||||||
Other expense, net | 3.7 | 1.9 | 8 | ||||||||
Industrial and Healthcare Materials | Intersegment sales | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 7.7 | 7.2 | 14.8 | ||||||||
Industrial and Healthcare Materials | Performance Tapes | |||||||||||
Segment Information | |||||||||||
Net sales to unaffiliated customers | 515.1 | 377.4 | 414.6 | ||||||||
Corporate | |||||||||||
Segment Information | |||||||||||
Income from continuing operations before taxes | (88.2) | (136.4) | (92.7) | ||||||||
Other expense, net | $ 0.2 | $ 40.5 | $ 2.5 |
SEGMENT INFORMATION - Other Exp
SEGMENT INFORMATION - Other Expense, Net by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Other items: | |||||||||||
Transaction costs | $ 5.2 | $ 5 | |||||||||
Net gains on sales of assets | $ (2.1) | (2.1) | (1.1) | $ (1.7) | |||||||
Net loss from curtailment and settlement of pension obligations | $ 41.4 | 41.4 | 0.3 | ||||||||
Legal settlements | (0.3) | ||||||||||
Loss on sale of product line and related exit costs | 10.5 | ||||||||||
Other expense, net | 9 | $ 10.8 | $ 10.2 | $ 6.5 | $ 4.8 | $ 4.6 | 50.2 | $ 5.6 | 36.5 | 65.2 | 68.3 |
Severance and related costs | |||||||||||
Restructuring charges: | |||||||||||
Restructuring charges | 9.5 | 8.7 | 7.3 | $ 5.7 | 4 | 1.9 | 3.6 | 5.2 | 31.2 | 14.7 | 52.5 |
Asset impairment charges and lease cancellation costs | |||||||||||
Restructuring charges: | |||||||||||
Restructuring charges | $ 0.1 | $ 1.8 | $ 0.3 | $ 1.3 | $ 0.7 | $ 2.8 | $ 0.4 | $ 2.2 | $ 5.2 | $ 7 |
SEGMENT INFORMATION - Net Sales
SEGMENT INFORMATION - Net Sales to Unaffiliated Customers and Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | $ 1,735.3 | $ 1,679.5 | $ 1,626.9 | $ 1,572.1 | $ 1,550.8 | $ 1,508.7 | $ 1,541.5 | $ 1,485.5 | $ 6,613.8 | $ 6,086.5 | $ 5,966.9 |
Property, plant and equipment, net | |||||||||||
Property, plant and equipment, net | 1,097.9 | 915.2 | 1,097.9 | 915.2 | 847.9 | ||||||
U.S. | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 1,557.8 | 1,525.6 | 1,546.8 | ||||||||
Property, plant and equipment, net | |||||||||||
Property, plant and equipment, net | 286.4 | 278.5 | 286.4 | 278.5 | 263.4 | ||||||
Europe | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 2,041.6 | 1,838.8 | 1,753 | ||||||||
Asia | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 2,250.5 | 1,996.1 | 1,924 | ||||||||
China (including Hong Kong) | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 1,300 | 1,140 | 1,140 | ||||||||
Latin America | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 476.4 | 450.5 | 466.3 | ||||||||
Other International | |||||||||||
Net sales to unaffiliated customers | |||||||||||
Net sales to unaffiliated customers | 287.5 | 275.5 | 276.8 | ||||||||
International | |||||||||||
Property, plant and equipment, net | |||||||||||
Property, plant and equipment, net | $ 811.5 | $ 636.7 | $ 811.5 | $ 636.7 | $ 584.5 |
SUPPLEMENTAL FINANCIAL INFORM95
SUPPLEMENTAL FINANCIAL INFORMATION (Details) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Raw materials | $ 214.6 | $ 185 |
Work-in-progress | 179.8 | 156.8 |
Finished goods | 215.2 | 177.3 |
Inventories, net | $ 609.6 | $ 519.1 |
SUPPLEMENTAL FINANCIAL INFORM96
SUPPLEMENTAL FINANCIAL INFORMATION - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 |
Property, Plant and Equipment | |||
Property, plant and equipment | $ 3,000.9 | $ 2,661.4 | |
Accumulated depreciation | (1,903) | (1,746.2) | |
Property, plant and equipment, net | 1,097.9 | 915.2 | $ 847.9 |
Land | |||
Property, Plant and Equipment | |||
Property, plant and equipment | 31.1 | 29.3 | |
Buildings and improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment | 638.9 | 565.3 | |
Machinery and equipment | |||
Property, Plant and Equipment | |||
Property, plant and equipment | 2,188.2 | 1,949.5 | |
Construction-in-progress | |||
Property, Plant and Equipment | |||
Property, plant and equipment | $ 142.7 | $ 117.3 |
SUPPLEMENTAL FINANCIAL INFORM97
SUPPLEMENTAL FINANCIAL INFORMATION - Software, Equity Method Investment and Research and Development (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Oct. 31, 2016 | |
Research and Development | ||||
Research and development expense | $ 93.4 | $ 89.7 | $ 91.9 | |
PragmatIC | ||||
Equity Method Investment | ||||
Interest of equity method investment | 22.60% | |||
Carrying value of investment | 9.1 | 9.5 | ||
Total software | ||||
Capitalized software costs | ||||
Software amortization expense from continuing operations | 29.3 | 37.9 | $ 37.6 | |
Total software | Other assets | ||||
Capitalized software costs | ||||
Cost | 428.9 | 415.5 | ||
Accumulated amortization | (301.8) | (297.9) | ||
Software, net | $ 127.1 | $ 117.6 |
SUPPLEMENTAL FINANCIAL INFORM98
SUPPLEMENTAL FINANCIAL INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Cash paid for interest and income taxes | |||
Interest, net of capitalized amounts | $ 57.7 | $ 58.9 | $ 60.1 |
Income taxes, net of refunds | 125.6 | 106.1 | 129.9 |
Foreign Currency Effects | |||
Foreign currency translation adjustment | $ 4.1 | $ 1.6 | $ 6.1 |
SUPPLEMENTAL FINANCIAL INFORM99
SUPPLEMENTAL FINANCIAL INFORMATION - Sale Of Product Line (Details) - Retail Branding and Information Solutions - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
May 31, 2015 | Apr. 04, 2015 | |
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 transaction and exit costs | 8.5 | |
Severance costs | $ 3.4 | |
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 INFORMAT100
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | |||||||||||
Net sales | $ 1,735.3 | $ 1,679.5 | $ 1,626.9 | $ 1,572.1 | $ 1,550.8 | $ 1,508.7 | $ 1,541.5 | $ 1,485.5 | $ 6,613.8 | $ 6,086.5 | $ 5,966.9 |
Gross profit | 465.6 | 451.6 | 452.6 | 442.4 | 425.4 | 417.6 | 434.1 | 422.6 | 1,812.2 | 1,699.7 | 1,645.8 |
Net income (loss) | $ (59.6) | $ 108.3 | $ 120.9 | $ 112.2 | $ 62 | $ 89.1 | $ 80 | $ 89.6 | $ 281.8 | $ 320.7 | $ 274.3 |
Net income (loss) per common share: | |||||||||||
Net income (loss) per common share (in dollars per share) | $ (0.68) | $ 1.23 | $ 1.37 | $ 1.27 | $ 0.70 | $ 1 | $ 0.90 | $ 1 | $ 3.19 | $ 3.60 | $ 3.01 |
Net income (loss) per common share, assuming dilution: | |||||||||||
Net income (loss) per common share, assuming dilution (in dollars per share) | $ (0.66) | $ 1.20 | $ 1.34 | $ 1.25 | $ 0.69 | $ 0.98 | $ 0.88 | $ 0.98 | $ 3.13 | $ 3.54 | $ 2.95 |
Net tax charge result from TCJA | $ 172 |
QUARTERLY FINANCIAL INFORMAT101
QUARTERLY FINANCIAL INFORMATION (Unaudited) - Other Expense, Net by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Other items: | |||||||||||
Loss from settlement of pension obligations | $ 41.4 | $ 41.4 | $ 0.3 | ||||||||
Net gains on sales of assets | $ (2.1) | $ (2.1) | (1.1) | (1.7) | |||||||
Loss (gain) on sales of assets | $ (1.4) | 0.3 | |||||||||
Transaction costs | 1.5 | $ 0.3 | $ 2.6 | $ 0.8 | 0.9 | $ 2 | 2.1 | ||||
Other expense, net | 9 | 10.8 | 10.2 | 6.5 | 4.8 | 4.6 | 50.2 | $ 5.6 | 36.5 | 65.2 | 68.3 |
Severance and related costs | |||||||||||
Restructuring charges: | |||||||||||
Restructuring charges | 9.5 | 8.7 | 7.3 | $ 5.7 | 4 | 1.9 | 3.6 | 5.2 | 31.2 | 14.7 | 52.5 |
Asset impairment charges and lease cancellation costs | |||||||||||
Restructuring charges: | |||||||||||
Restructuring charges | $ 0.1 | $ 1.8 | $ 0.3 | $ 1.3 | $ 0.7 | $ 2.8 | $ 0.4 | $ 2.2 | $ 5.2 | $ 7 |