Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 03, 2015 | Oct. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Avery Dennison Corp | |
Entity Central Index Key | 8,818 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 3, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-02 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 91,102,268 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Oct. 03, 2015 | Jan. 03, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 171.7 | $ 227 |
Trade accounts receivable, less allowances of $34.3 and $30.5 at October 3, 2015 and January 3, 2015, respectively | 999 | 958.1 |
Inventories, net | 512.4 | 491.8 |
Current deferred and refundable income taxes | 103.6 | 107.5 |
Assets held for sale | 0.8 | |
Other current assets | 129.3 | 136.1 |
Total current assets | 1,916 | 1,921.3 |
Property, plant and equipment | 2,606.9 | 2,654.5 |
Accumulated depreciation | (1,766.3) | (1,779.2) |
Property, plant and equipment, net | 840.6 | 875.3 |
Goodwill | 690.7 | 721.6 |
Other intangibles resulting from business acquisitions, net | 50.7 | 67.4 |
Non-current deferred income taxes | 312.4 | 320.9 |
Other assets | 438.5 | 463.6 |
Total Assets | 4,248.9 | 4,370.1 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt and capital leases | 85.1 | 204.3 |
Accounts payable | 840.4 | 797.8 |
Current deferred and payable income taxes | 44.3 | 64.9 |
Other current liabilities | 499.7 | 530.8 |
Total current liabilities | 1,469.5 | 1,597.8 |
Long-term debt and capital leases | 968.5 | 945.3 |
Long-term retirement benefits and other liabilities | 622.2 | 648.3 |
Non-current deferred and payable income taxes | $ 133.4 | $ 127.8 |
Commitments and contingencies (see Note 15) | ||
Shareholders' equity: | ||
Common stock, $1 par value per share, authorized - 400,000,000 shares at October 3, 2015 and January 3, 2015; issued - 124,126,624 shares at October 3, 2015 and January 3, 2015; outstanding - 91,328,446 shares and 90,458,956 shares at October 3, 2015 and January 3, 2015, respectively | $ 124.1 | $ 124.1 |
Capital in excess of par value | 825.5 | 823.9 |
Retained earnings | 2,244.3 | 2,116.5 |
Treasury stock at cost, 32,798,178 shares and 33,667,668 shares at October 3, 2015 and January 3, 2015, respectively | (1,483.5) | (1,471.3) |
Accumulated other comprehensive loss | (655.1) | (542.3) |
Total shareholders' equity | 1,055.3 | 1,050.9 |
Total liabilities and shareholders' equity | $ 4,248.9 | $ 4,370.1 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Oct. 03, 2015 | Jan. 03, 2015 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade accounts receivable, allowances (in dollars) | $ 34.3 | $ 30.5 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized shares | 400,000,000 | 400,000,000 |
Common stock, issued shares | 124,126,624 | 124,126,624 |
Common stock, outstanding shares | 91,328,446 | 90,458,956 |
Treasury stock, shares | 32,798,178 | 33,667,668 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $ 1,468.1 | $ 1,559.6 | $ 4,512.1 | $ 4,725.5 |
Cost of products sold | 1,062.2 | 1,158.9 | 3,258.6 | 3,489.4 |
Gross profit | 405.9 | 400.7 | 1,253.5 | 1,236.1 |
Marketing, general and administrative expense | 268.1 | 278.4 | 841.8 | 873.1 |
Interest expense | 14.7 | 15.4 | 45.3 | 46.4 |
Other expense, net | 7 | 7.8 | 49 | 53.6 |
Income from continuing operations before taxes | 116.1 | 99.1 | 317.4 | 263 |
Provision for income taxes | 34.8 | 38.2 | 99.5 | 85.5 |
Income from continuing operations | 81.3 | 60.9 | 217.9 | 177.5 |
Income (loss) from discontinued operations, net of tax | 0.4 | (0.7) | (0.6) | (3) |
Net income | $ 81.7 | $ 60.2 | $ 217.3 | $ 174.5 |
Net income (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ 0.89 | $ 0.65 | $ 2.39 | $ 1.87 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.03) |
Net income per common share (in dollars per share) | 0.89 | 0.65 | 2.39 | 1.84 |
Net income (loss) per common share, assuming dilution: | ||||
Continuing operations (in dollars per share) | 0.87 | 0.64 | 2.35 | 1.84 |
Discontinued operations (in dollars per share) | 0.01 | (0.01) | (0.01) | (0.03) |
Net income per common share, assuming dilution (in dollars per share) | 0.88 | 0.63 | 2.34 | 1.81 |
Dividends per common share (in dollars per share) | $ 0.37 | $ 0.35 | $ 1.09 | $ 0.99 |
Weighted average number of shares outstanding: | ||||
Common shares (in shares) | 91.5 | 93.3 | 91.1 | 94.7 |
Common shares, assuming dilution (in shares) | 93.2 | 95.2 | 92.9 | 96.6 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 81.7 | $ 60.2 | $ 217.3 | $ 174.5 |
Other comprehensive loss, before tax: | ||||
Foreign currency translation | (60.6) | (79.5) | (129.7) | (83.5) |
Pension and other postretirement benefits | 7.5 | 5.7 | 26.8 | 21.6 |
Cash flow hedges | (0.3) | 0.5 | (1) | (0.1) |
Other comprehensive loss, before tax | (53.4) | (73.3) | (103.9) | (62) |
Income tax expense related to components of other comprehensive loss | 2.3 | 0.7 | 8.9 | 6.4 |
Other comprehensive loss, net of tax | (55.7) | (74) | (112.8) | (68.4) |
Total comprehensive income (loss), net of tax | $ 26 | $ (13.8) | $ 104.5 | $ 106.1 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Oct. 03, 2015 | Sep. 27, 2014 | |
Operating Activities | ||
Net income | $ 217.3 | $ 174.5 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 95.3 | 99 |
Amortization | 47.5 | 49.5 |
Provision for doubtful accounts and sales returns | 36.6 | 32.7 |
Loss on sale of businesses | 3 | |
Indefinite-lived intangible asset impairment charge | 3 | |
Net losses from asset impairments and sales/disposals of assets | 10.9 | 3.3 |
Stock-based compensation | 18.4 | 22.1 |
Other non-cash expense and loss | 38.9 | 32.1 |
Changes in assets and liabilities and other adjustments | (174.6) | (219) |
Net cash provided by operating activities | 290.3 | 200.2 |
Investing Activities | ||
Purchases of property, plant and equipment | (89.6) | (100.8) |
Purchases of software and other deferred charges | (9) | (22) |
Proceeds from sales of property, plant and equipment | 7.1 | 4.1 |
Purchases of investments, net | (0.2) | |
Other | 1.5 | |
Net cash used in investing activities | (90.2) | (118.7) |
Financing Activities | ||
Net (decrease) increase in borrowings (maturities of 90 days or less) | (109.8) | 86.3 |
Payments of debt (maturities longer than 90 days) | (6.2) | (1.1) |
Dividends paid | (99.6) | (93.4) |
Share repurchases | (108.5) | (247.3) |
Proceeds from exercises of stock options, net | 78.4 | 22.6 |
Other | (1.2) | (2.4) |
Net cash used in financing activities | (246.9) | (235.3) |
Effect of foreign currency translation on cash balances | (8.5) | (2.2) |
Decrease in cash and cash equivalents | (55.3) | (156) |
Cash and cash equivalents, beginning of year | 227 | 351.6 |
Cash and cash equivalents, end of period | $ 171.7 | $ 195.6 |
General
General | 9 Months Ended |
Oct. 03, 2015 | |
General | |
General | Note 1. General The unaudited Condensed Consolidated Financial Statements and notes in this Quarterly Report on Form 10-Q are presented as permitted by Article 10 of Regulation S-X and do not contain certain information included in the audited Consolidated Financial Statements and notes thereto in our 2014 Annual Report on Form 10-K, which should be read in conjunction with this Quarterly Report on Form 10-Q. The accompanying unaudited Condensed Consolidated Financial Statements include normal recurring adjustments necessary for a fair statement of our interim results. Interim results of operations are not necessarily indicative of future results. Fiscal Period The third quarters of 2015 and 2014 consisted of thirteen-week periods ending October 3, 2015 and September 27, 2014, respectively. The nine months ended October 3, 2015 and September 27, 2014 consisted of thirty-nine-week periods. Prior Period Financial Statement Revision During the third quarter of 2015, we determined that certain of our benefit plans were not properly accounted for since their inception between 1984 and 1988. These plans were frozen between 1994 and 2003. We assessed the materiality of these errors on prior periods’ financial statements in accordance with the United States Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 99, Materiality , codified in the Accounting Standards Codification (“ASC”) 250, Presentation of Financial Statements , and concluded that they were not material to any prior annual or interim periods. However, the aggregate amount of the prior period errors of approximately $24 million would have been material to our current interim Condensed Consolidated Statements of Income. Consequently, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements ), we have corrected these errors for all prior periods presented by revising the condensed consolidated financial statements and other financial information included herein. We also corrected the timing of immaterial previously recorded out-of-period adjustments and reflected them in the revised prior period financial statements, where applicable. Periods not presented herein will be revised, as applicable, in future filings. The effects of this revision on our unaudited Condensed Consolidated Balance Sheets are as follows: (In millions) As Previously Reported January 3, 2015 Adjustment As Revised January 3, 2015 Non-current deferred income taxes $ $ $ Total assets Long-term retirement benefits and other liabilities Retained earnings Accumulated other comprehensive loss ) Total shareholders’ equity Total liabilities and shareholders’ equity The effects of this revision on our unaudited Condensed Consolidated Statements of Income are as follows: Three Months Ended Nine Months Ended September 27, 2014 September 27, 2014 (In millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised Marketing, general and administrative expense $ $ $ $ $ $ Income from continuing operations before taxes ) ) Provision for income taxes .4 Income from continuing operations ) ) Loss from discontinued operations, net of tax (.7 ) – (.7 ) ) – ) Net income ) ) Per share amounts: Net income (loss) per common share: Continuing operations $ .70 $ (.05 ) $ .65 $ $ (.04 ) $ Discontinued operations (.01 ) .01 – (.03 ) – (.03 ) Net income per common share $ .69 $ (.04 ) $ .65 $ $ (.04 ) $ Net income (loss) per common share, assuming dilution: Continuing operations $ .68 $ (.04 ) $ .64 $ $ (.03 ) $ Discontinued operations – (.01 ) (.01 ) (.03 ) – (.03 ) Net income per common share, assuming dilution $ .68 $ (.05 ) $ .63 $ $ (.03 ) $ The effects of this revision on our unaudited Condensed Consolidated Statements of Comprehensive Income are as follows: Three Months Ended Nine Months Ended September 27, 2014 September 27, 2014 (In millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised Net income $ $ ) $ $ $ ) $ Pension and other postretirement benefits – Other comprehensive loss, before tax ) – ) ) ) Income tax expense related to components of other comprehensive loss ) .7 .9 Other comprehensive loss, net of tax ) ) ) ) Total comprehensive (loss) income, net of tax ) ) ) .6 |
Sale of Product Line and Discon
Sale of Product Line and Discontinued Operations | 9 Months Ended |
Oct. 03, 2015 | |
Sale of Product Line and Discontinued Operations | |
Sale of Product Line and Discontinued Operations | Note 2. Sale of Product Line and Discontinued Operations Sale of Product Line In May 2015, we sold certain assets and transferred certain liabilities associated with a product line in our Retail Branding and Information Solutions (“RBIS”) reportable segment for $1.5 million. The pretax loss from the sale, when combined with exit costs related to the sale, totaled $8.5 million, including $.2 million in the third quarter of 2015. The exit costs included $3.4 million of severance costs, of which $1.2 million had been paid as of October 3, 2015. 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 unaudited Condensed Consolidated Statements of Income. Discontinued Operations Income (loss) from discontinued operations, net of tax, during the third quarter and nine months ended October 3, 2015 included tax benefits (expense) related to the completion of certain tax returns related to the sale of our former Office and Consumer Products (“OCP”) and Designed and Engineered Solutions (“DES”) businesses. Income (loss) from discontinued operations, net of tax, during the third quarter and nine months ended September 27, 2014 included costs related to the resolution of certain post-closing adjustments from the sale, including completion of the final purchase price allocation in the third quarter of 2014. We continue to be subject to certain indemnification obligations under the terms of the purchase agreement. In addition, the tax liability associated with the sale is subject to completion of remaining tax returns in certain foreign jurisdictions where we operated the OCP and DES businesses. |
Inventories
Inventories | 9 Months Ended |
Oct. 03, 2015 | |
Inventories | |
Inventories | Note 3. Inventories Net inventories consisted of: (In millions) October 3, 2015 January 3, 2015 Raw materials $ $ Work-in-progress Finished goods Inventories, net $ $ |
Goodwill
Goodwill | 9 Months Ended |
Oct. 03, 2015 | |
Goodwill. | |
Goodwill | Note 4. Goodwill Changes in the net carrying amount of goodwill for the nine months ended October 3, 2015, by reportable segment, were as follows: (In millions) Pressure-sensitive Materials Retail Branding and Information Solutions Total Goodwill as of January 3, 2015 $ $ $ Acquisition adjustments – (.3 ) (.3 ) Translation adjustments ) ) ) Goodwill as of October 3, 2015 $ $ $ The carrying amounts of goodwill at October 3, 2015 and January 3, 2015 were net of accumulated impairment losses of $820 million, which were included in our RBIS reportable segment. There was no goodwill associated with our Vancive Medical Technologies reportable segment. |
Debt and Capital Leases
Debt and Capital Leases | 9 Months Ended |
Oct. 03, 2015 | |
Debt | |
Debt and Capital Leases | Note 5. Debt and Capital Leases The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities on notes with similar rates, credit ratings, and remaining maturities. The fair value of short-term borrowings, which include 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 $1.11 billion at October 3, 2015 and $1.22 billion at January 3, 2015. 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. Our various loan agreements contain financial covenants requiring that we maintain specified ratios of total debt and interest expense in relation to certain measures of income. We were in compliance with our financial covenants as of October 3, 2015. 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 Materials Group business. Because ownership of the facility transfers to us at the end of the lease term, it was accounted for as a capital lease. The carrying value of the lease at October 3, 2015 was approximately $26 million, of which approximately $24 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 unaudited Condensed Consolidated Balance Sheets at October 3, 2015. |
Pension And Other Postretiremen
Pension And Other Postretirement Benefits | 9 Months Ended |
Oct. 03, 2015 | |
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. The following table sets forth the components of net periodic benefit cost (credit), which are recorded in income from continuing operations, for our defined benefit plans: Pension Benefits Three Months Ended Nine Months Ended October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 (In millions) U.S. Int’l U.S. Int’l U.S. Int’l U.S. Int’l Service cost $ .1 $ $ .1 $ $ .3 $ $ .3 $ Interest cost Expected return on plan assets ) ) ) ) ) ) ) ) Recognized net actuarial loss Amortization of prior service cost (credit) .2 – .2 .1 .8 (.1 ) .8 .3 Amortization of transition obligation – – – .1 – – – .1 Recognized loss on curtailment (1) – – – – – – – .6 Recognized loss on settlement (2) – – – – – – – Net periodic benefit cost $ $ $ $ $ $ $ $ (1) Recognized loss on curtailment related to a pension plan in the Netherlands and was recorded in “Other expense, net” in the unaudited Condensed Consolidated Statements of Income. (2) Recognized loss on settlement related to pension plans in Germany and France as a result of the sale of a product line in our RBIS reportable segment. The loss on settlement was recorded in “Other expense, net” in the unaudited Condensed Consolidated Statements of Income. U.S. Postretirement Health Benefits Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Interest cost $ .1 $ .1 $ .2 $ .2 Recognized net actuarial loss .5 .7 Amortization of prior service credit (.8 ) (.8 ) ) ) Net periodic benefit credit $ (.2 ) $ – $ (.6 ) $ (.1 ) 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. All of the contributions made in the first nine months of 2015 and 2014 were made to meet minimum funding requirements. The following table sets forth our contributions to our defined benefit plans: Nine Months Ended (In millions) October 3, 2015 September 27, 2014 U.S. $ $ Int’l U.S. postretirement health benefits .7 |
Research and Development
Research and Development | 9 Months Ended |
Oct. 03, 2015 | |
Research and Development | |
Research and Development | Note 7. Research and Development Research and development expense from continuing operations was $22.2 million and $70.6 million for the three and nine months ended October 3, 2015, respectively, and $25.1 million and $77 million for the three and nine months ended September 27, 2014, respectively. This expense was included in “Marketing, general and administrative expense” in the unaudited Condensed Consolidated Statements of Income. |
Long-Term Incentive Compensatio
Long-Term Incentive Compensation | 9 Months Ended |
Oct. 03, 2015 | |
Long-Term Incentive Compensation | |
Long-Term Incentive Compensation | Note 8. Long-Term Incentive Compensation Equity Awards Stock-based compensation expense from continuing operations was $5.2 million and $18.4 million for the three and nine months ended October 3, 2015, respectively, and $7.6 million and $22.1 million for the three and nine months ended September 27, 2014, respectively. This expense was included in “Marketing, general and administrative expense” in the unaudited Condensed Consolidated Statements of Income. As of October 3, 2015, we had approximately $32 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 period of approximately two years. Cash Awards Compensation expense from continuing operations related to long-term incentive units was $1.4 million and $16.7 million for the three and nine months ended October 3, 2015, respectively, and $2 million and $11.9 million for the three and nine months ended September 27, 2014, respectively. This expense was included in “Marketing, general and administrative expense” in the unaudited Condensed Consolidated Statements of Income. |
Cost Reduction Actions
Cost Reduction Actions | 9 Months Ended |
Oct. 03, 2015 | |
Cost Reduction Actions | |
Cost Reduction Actions | Note 9. Cost Reduction Actions 2015/2016 Actions We recorded $6.6 million in restructuring charges related to restructuring actions initiated during the third quarter of 2015, which we expect to continue through 2016 (“2015/2016 Actions”). These charges consisted of severance and related costs for the reduction of approximately 85 positions, lease cancellation costs, and asset impairment charges. No employees impacted by our 2015/2016 Actions taken through October 3, 2015 remained employed with us as of such date. We expect charges and payments related to these actions to be substantially completed in 2016. 2014/2015 Actions During the nine months ended October 3, 2015, we recorded $33.9 million in restructuring charges, net of reversals, related to restructuring actions we initiated in 2014 that continued through the second quarter of 2015 (“2014/2015 Actions”). These charges consisted of severance and related costs for the reduction of approximately 605 positions, lease cancellation costs, and asset impairment charges. In 2014, we recorded $66.5 million in restructuring charges, net of reversals, related to our 2014/2015 Actions. These charges consisted of severance and related costs for the reduction of approximately 1,420 positions, lease cancellation costs, and asset impairment charges. Approximately 180 employees impacted by our 2014/2015 Actions remained employed with us as of October 3, 2015. We expect charges and payments related to these actions to be substantially completed in 2016. Accruals for severance and related costs and lease cancellation costs were included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets. Asset impairment charges were based on the estimated market value of the assets. Restructuring costs were included in “Other expense, net” in the unaudited Condensed Consolidated Statements of Income. During the nine months ended October 3, 2015, restructuring charges and payments were as follows: (In millions) Accrual at January 3, 2015 Charges (Reversals), net Cash Payments Non-cash Impairment Foreign Currency Translation Accrual at October 3, 2015 2015/2016 Actions Severance and related costs $ – $ $ ) $ – $ – $ Asset impairment charges – – ) – – Lease cancellation costs – .1 (.1 ) – – – 2014/2015 Actions Severance and related costs ) – (.9 ) Asset impairment charges – – ) – – Lease cancellation costs .1 .3 (.3 ) – – .1 2012 Program Severance and related costs .8 – – – (.1 ) .7 Total $ $ $ ) $ ) $ ) $ The table below shows the total amount of restructuring costs incurred by reportable segment and Corporate. Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Restructuring costs by reportable segment and Corporate Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies .1 .1 Corporate .1 .4 .4 $ $ $ $ |
Financial Instruments
Financial Instruments | 9 Months Ended |
Oct. 03, 2015 | |
Financial Instruments | |
Financial Instruments | Note 10. Financial Instruments We enter into foreign exchange hedge contracts to reduce our risk from exchange rate fluctuations associated with receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. We enter into interest rate contracts to help manage our exposure to certain interest rate fluctuations. We also enter into futures contracts to hedge certain price fluctuations for a portion of our anticipated domestic purchases of natural gas. The maximum length of time for which we hedge our exposure to the variability in future cash flows for forecasted transactions is 36 months. As of October 3, 2015, the aggregate U.S. dollar equivalent notional value of our outstanding commodity contracts and foreign exchange contracts was $2.6 million and $1.2 billion, respectively. We recognize all derivative instruments as either assets or liabilities at fair value in the unaudited Condensed Consolidated Balance Sheets. We designate commodity forward contracts on forecasted purchases of commodities and foreign exchange contracts on forecasted transactions as cash flow hedges and designate foreign exchange contracts on existing balance sheet items as fair value hedges. The following table provides the fair value and balance sheet locations of derivatives as of October 3, 2015: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets – Other accrued liabilities .8 Long-term retirement benefits and other liabilities .1 $ $ The following table provides the fair value and balance sheet locations of derivatives as of January 3, 2015: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets – Other accrued liabilities Long-term retirement benefits and other liabilities .2 $ $ Fair Value Hedges For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings, resulting in no material net impact to income. The following table provides the components of net gain (loss) recognized in income related to fair value hedge contracts. The corresponding gains or losses on the underlying hedged items approximated the net gain (loss) on these fair value hedge contracts. Three Months Ended Nine Months Ended (In millions) Location of Net Gains (Losses) in Income October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Foreign exchange contracts Cost of products sold $ $ – $ $ ) Foreign exchange contracts Marketing, general and administrative expense ) ) ) ) $ ) $ ) $ ) $ ) Cash Flow Hedges For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of “Accumulated other comprehensive loss” and reclassified into earnings in the same period(s) during which the hedged transaction impacts earnings. Gains and losses on the derivative, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in current earnings. Gains (losses) recognized in “Accumulated other comprehensive loss” (effective portion) on derivatives related to cash flow hedge contracts were as follows: Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Foreign exchange contracts $ $ .7 $ $ ) Commodity contracts ) (.3 ) (.5 ) (.1 ) $ $ .4 $ .7 $ ) The amount of gain or loss 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 not material for the three and nine months ended October 3, 2015 and September 27, 2014, respectively. As of October 3, 2015, we expected a net gain of approximately $1 million to be reclassified from “Accumulated other comprehensive loss” to earnings within the next 12 months. See Note 13, “Comprehensive Income,” for more information. |
Taxes Based on Income
Taxes Based on Income | 9 Months Ended |
Oct. 03, 2015 | |
Taxes Based on Income | |
Taxes Based On Income | Note 11. Taxes Based on Income The following table summarizes our income from continuing operations before taxes, provision for income taxes from continuing operations, and effective tax rate: Three Months Ended Nine Months Ended (Dollars in millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Income from continuing operations before taxes $ $ $ $ Provision for income taxes Effective tax rate % % % % The effective tax rate for continuing operations for the three and nine months ended October 3, 2015 included $4.2 million of tax benefit resulting from return to provision adjustments pursuant to the completion of the 2014 U.S. federal tax return and $.9 million of tax benefit from a favorable foreign tax law change. Additionally, the effective tax rate for the nine months ended October 3, 2015 included $1.6 million of net tax benefit related to changes in the effective tax rates in certain foreign municipalities; $4.2 million of tax benefit due to decreases in certain tax reserves as a result of closing tax years; and $5.4 million of tax expense associated with the tax cost to repatriate non-permanently reinvested 2015 earnings of certain foreign subsidiaries. The effective tax rate for continuing operations for the three and nine months ended September 27, 2014 included $4.2 million and $20 million of tax benefit as a result of changes in certain tax reserves and valuation allowances, respectively; and $4.6 million of tax expense from the taxable inclusion of a net foreign currency gain related to the revaluation of certain intercompany loans. Additionally, the effective tax rate for the nine months ended September 27, 2014 included $6 million of tax expense related to our change in estimate of the potential outcome of uncertain tax issues in China. 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. 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 $15 million, primarily as a result of closing tax years. |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Oct. 03, 2015 | |
Net Income Per Common Share | |
Net Income Per Common Share | Note 12. Net Income Per Common Share Net income per common share was computed as follows: Three Months Ended Nine Months Ended (In millions, except per share amounts) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 (A) Income from continuing operations $ $ $ $ (B) Income (loss) from discontinued operations, net of tax .4 (.7 ) (.6 ) ) (C) Net income available to common shareholders $ $ $ $ (D) Weighted average number of common shares outstanding Dilutive shares (additional common shares issuable under stock-based awards) (E) Weighted average number of common shares outstanding, assuming dilution Net income (loss) per common share: Continuing operations (A) ÷ (D) $ .89 $ .65 $ $ Discontinued operations (B) ÷ (D) – – – (.03 ) Net income per common share (C) ÷ (D) $ .89 $ .65 $ $ Net income (loss) per common share, assuming dilution: Continuing operations (A) ÷ (E) $ .87 $ .64 $ $ Discontinued operations (B) ÷ (E) .01 (.01 ) (.01 ) (.03 ) Net income per common share, assuming dilution (C) ÷ (E) $ .88 $ .63 $ $ Certain stock-based compensation awards were not included in the computation of net income per common share, assuming dilution, because they would not have had a dilutive effect. Stock-based compensation awards excluded from the computation totaled approximately .5 million shares and 1 million shares for the three and nine months ended October 3, 2015, respectively, and approximately 3 million shares for both the three and nine months ended September 27, 2014. |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Oct. 03, 2015 | |
Comprehensive Income | |
Comprehensive Income | Note 13. Comprehensive Income The changes in “Accumulated other comprehensive loss” (net of tax) for the nine-month period ended October 3, 2015 were as follows: (In millions) Foreign Currency Translation Pension and Other Postretirement Benefits Cash Flow Hedges Total Balance as of January 3, 2015 $ ) $ ) $ – $ ) Other comprehensive loss before reclassifications, net of tax ) .5 .6 ) Reclassifications to net income, net of tax – ) Net current-period other comprehensive (loss) income, net of tax ) (.8 ) ) Balance as of October 3, 2015 $ ) $ ) $ (.8 ) $ ) The changes in “Accumulated other comprehensive loss” (net of tax) for the nine-month period ended September 27, 2014 were as follows: (In millions) Foreign Currency Translation Pension and Other Postretirement Benefits Cash Flow Hedges Total Balance as of December 28, 2013 $ $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications, net of tax ) ) ) Reclassifications to net income, net of tax – Net current-period other comprehensive (loss) income, net of tax ) (.1 ) ) Balance as of September 27, 2014 $ $ ) $ ) $ ) The amounts reclassified from “Accumulated other comprehensive loss” to increase (decrease) income from continuing operations were as follows: Amounts Reclassified from Accumulated Other Comprehensive Loss Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Affected Line Item in the Statements Where Net Income is Presented Cash flow hedges: Foreign exchange contracts $ $ (.2 ) $ $ ) Cost of products sold Commodity contracts (.1 ) – (.9 ) .2 Cost of products sold Interest rate contracts (.1 ) – (.1 ) – Interest expense (.2 ) ) Total before tax (.2 ) .2 (.3 ) .4 Provision for income taxes – ) Net of tax Pension and other postretirement benefits (1) ) ) ) ) Provision for income taxes ) ) ) ) Net of tax $ ) $ ) $ ) $ ) Total, net of tax (1) See Note 6, “Pension and Other Postretirement Benefits,” for more information . The following table sets forth the income tax expense (benefit) allocated to each component of other comprehensive loss: Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Foreign currency translation $ – $ ) $ – $ (.9 ) Pension and other postretirement benefits Cash flow hedges (.1 ) .1 (.2 ) – Income tax expense related to components of other comprehensive loss $ $ .7 $ $ |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 03, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | Note 14. 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 October 3, 2015: Fair Value Measurements Using (In millions) Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets Trading securities $ $ $ $ – Derivative assets – – Liabilities Derivative liabilities $ $ .9 $ $ – The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of January 3, 2015: Fair Value Measurements Using (In millions) Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets Trading securities $ $ $ $ – Derivative assets – – 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 net asset value. As of October 3, 2015, trading securities of $.6 million and $17.5 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. As of January 3, 2015, trading securities of $.8 million and $17.1 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the unaudited Condensed 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. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 03, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 15. Commitments and 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. We have accrued liabilities for matters where it is probable that a loss will be incurred and the amount of loss can be reasonably estimated. 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 As of October 3, 2015, we have been designated by the U.S. Environmental Protection Agency (“EPA”) and/or other responsible state agencies as a potentially responsible party (“PRP”) at thirteen waste disposal or waste recycling sites, which are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination and for which no settlement of our liability has been agreed. We are participating with other PRPs at these sites and anticipate that our share of remediation costs will be determined pursuant to agreements entered into in the normal course of negotiations with the EPA or other governmental authorities. We have accrued liabilities for sites where it is probable that a loss will be incurred and the cost or amount of loss can be reasonably estimated. 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 for the nine months ended October 3, 2015 related to our environmental liabilities was as follows: (In millions) Balance at January 3, 2015 $ Charges (reversals), net Payments ) Balance at October 3, 2015 $ As of October 3, 2015, approximately $8 million of the balance was classified as short-term and included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets. Guarantees We participate in receivable financing programs with several financial institutions whereby advances may be requested from these financial institutions. We guarantee the collection of the related receivables. At October 3, 2015, the outstanding amount guaranteed was approximately $17 million. We believe our exposure to these guarantees is not material. Unused letters of credit (primarily standby) outstanding with various financial institutions were approximately $43 million at October 3, 2015. |
Segment Information
Segment Information | 9 Months Ended |
Oct. 03, 2015 | |
Segment Information | |
Segment Information | Note 16. Segment Information Financial information from continuing operations by reportable segment is set forth below. Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Net sales to unaffiliated customers Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies Net sales to unaffiliated customers $ $ $ $ Intersegment sales Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions .3 .5 Vancive Medical Technologies Intersegment sales $ $ $ $ Income from continuing operations before taxes Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies ) ) ) ) Corporate expense ) ) ) ) Interest expense ) ) ) ) Income from continuing operations before taxes $ $ $ $ Other expense, net by reportable segment Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies .1 .1 Corporate .3 .4 .4 Other expense, net $ $ $ $ Other expense, net by type Restructuring costs: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs Other items: Indefinite-lived intangible asset impairment charge – – Loss on sale of product line and related exit costs .2 – – Gain on sale of assets – ) ) ) Loss from curtailment of pension obligation – – – .6 Legal settlement .2 – (.3 ) – Other expense, net $ $ $ $ |
Recent Accounting Requirements
Recent Accounting Requirements | 9 Months Ended |
Oct. 03, 2015 | |
Accounting Changes and Error Corrections | |
Recent Accounting Requirements | Note 17. Recent Accounting Requirements In July 2015, the Financial Accounting Standards Board (“FASB”) amended guidance to simplify the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years. We do not anticipate that adoption of this amended guidance will have a significant impact on our financial position, results of operations, cash flows, or disclosures. In May 2015, the FASB amended guidance to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Additionally, the amended guidance removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. This guidance is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, and applied retrospectively. Early adoption is permitted. Most of the assets in our U.S. and international pension plans are invested in funds that are valued at net asset value. Although we do not anticipate that adoption of this guidance will have a significant impact on our financial position, results of operations, or cash flows, the adoption of this amended guidance may result in a significant amount of plan assets not being disclosed within the fair value hierarchy. In April 2015, the FASB issued guidance about accounting for fees paid in a cloud computing arrangement. Examples of cloud computing arrangements include software as a service, platform as a service, infrastructure as a service, and other similar hosting arrangements. As clarified in the guidance, if a cloud computing arrangement includes a software license, the software license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This guidance is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, and may be adopted prospectively or retrospectively. We do not anticipate that adoption of this guidance will have a significant impact on our financial position, results of operations, cash flows, or disclosures. In April 2015, the FASB revised guidance to allow employers with fiscal year-ends that do not coincide with a calendar month-end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the calendar month closest to their fiscal year-end. Employers that make this election must apply the alternative measurement date to all defined benefit plans. The guidance also allows all employers to elect to remeasure defined plan assets and obligations in interim periods at the closest calendar month-end to an event that triggers the remeasurement. This revised guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years. We do not anticipate that adoption of this revised guidance will have a significant impact on our financial position, results of operations, cash flows, or disclosures. In April 2015, the FASB revised guidance on the presentation of debt issuance costs. Under this revised guidance, debt issuance costs should be presented in the balance sheet as a direct deduction from the carrying value of the associated debt, consistent with the presentation of a debt discount. In August 2015, this guidance was further revised to allow for debt issuance costs related to line-of-credit arrangements to be classified as assets and amortized ratably over the term of the arrangement. This revised guidance is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years. We do not anticipate that adoption of this revised guidance will have a significant impact on our financial position, results of operations, cash flows, or disclosures. In May 2014, the FASB issued revised guidance on revenue recognition. This revised guidance provides a single comprehensive model for accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This revised guidance will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. This revised guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This revised guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and can be applied retrospectively either to each prior reporting period presented or with the cumulative effect of adoption recognized at the date of initial application. Early adoption is permitted for fiscal periods beginning after December 15, 2016. 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. |
General (Policies)
General (Policies) | 9 Months Ended |
Oct. 03, 2015 | |
General | |
Fiscal Period | Fiscal Period The third quarters of 2015 and 2014 consisted of thirteen-week periods ending October 3, 2015 and September 27, 2014, respectively. The nine months ended October 3, 2015 and September 27, 2014 consisted of thirty-nine-week periods. |
General (Tables)
General (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
General | |
Summary of Previously Stated and Corrected Balances of Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Income and Condensed Consolidated Statement of Comprehensive Income | The effects of this revision on our unaudited Condensed Consolidated Balance Sheets are as follows: (In millions) As Previously Reported January 3, 2015 Adjustment As Revised January 3, 2015 Non-current deferred income taxes $ $ $ Total assets Long-term retirement benefits and other liabilities Retained earnings Accumulated other comprehensive loss ) Total shareholders’ equity Total liabilities and shareholders’ equity The effects of this revision on our unaudited Condensed Consolidated Statements of Income are as follows: Three Months Ended Nine Months Ended September 27, 2014 September 27, 2014 (In millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised Marketing, general and administrative expense $ $ $ $ $ $ Income from continuing operations before taxes ) ) Provision for income taxes .4 Income from continuing operations ) ) Loss from discontinued operations, net of tax (.7 ) – (.7 ) ) – ) Net income ) ) Per share amounts: Net income (loss) per common share: Continuing operations $ .70 $ (.05 ) $ .65 $ $ (.04 ) $ Discontinued operations (.01 ) .01 – (.03 ) – (.03 ) Net income per common share $ .69 $ (.04 ) $ .65 $ $ (.04 ) $ Net income (loss) per common share, assuming dilution: Continuing operations $ .68 $ (.04 ) $ .64 $ $ (.03 ) $ Discontinued operations – (.01 ) (.01 ) (.03 ) – (.03 ) Net income per common share, assuming dilution $ .68 $ (.05 ) $ .63 $ $ (.03 ) $ The effects of this revision on our unaudited Condensed Consolidated Statements of Comprehensive Income are as follows: Three Months Ended Nine Months Ended September 27, 2014 September 27, 2014 (In millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised Net income $ $ ) $ $ $ ) $ Pension and other postretirement benefits – Other comprehensive loss, before tax ) – ) ) ) Income tax expense related to components of other comprehensive loss ) .7 .9 Other comprehensive loss, net of tax ) ) ) ) Total comprehensive (loss) income, net of tax ) ) ) .6 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Inventories | |
Net inventories | (In millions) October 3, 2015 January 3, 2015 Raw materials $ $ Work-in-progress Finished goods Inventories, net $ $ |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Goodwill. | |
Changes in net carrying amount of goodwill | (In millions) Pressure-sensitive Materials Retail Branding and Information Solutions Total Goodwill as of January 3, 2015 $ $ $ Acquisition adjustments – (.3 ) (.3 ) Translation adjustments ) ) ) Goodwill as of October 3, 2015 $ $ $ |
Pension and Other Postretirem28
Pension and Other Postretirement Benefits (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Pension and Other Postretirement Benefits. | |
Schedule of components of net periodic benefit cost (credit) | Pension Benefits Three Months Ended Nine Months Ended October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 (In millions) U.S. Int’l U.S. Int’l U.S. Int’l U.S. Int’l Service cost $ .1 $ $ .1 $ $ .3 $ $ .3 $ Interest cost Expected return on plan assets ) ) ) ) ) ) ) ) Recognized net actuarial loss Amortization of prior service cost (credit) .2 – .2 .1 .8 (.1 ) .8 .3 Amortization of transition obligation – – – .1 – – – .1 Recognized loss on curtailment (1) – – – – – – – .6 Recognized loss on settlement (2) – – – – – – – Net periodic benefit cost $ $ $ $ $ $ $ $ (1) Recognized loss on curtailment related to a pension plan in the Netherlands and was recorded in “Other expense, net” in the unaudited Condensed Consolidated Statements of Income. (2) Recognized loss on settlement related to pension plans in Germany and France as a result of the sale of a product line in our RBIS reportable segment. The loss on settlement was recorded in “Other expense, net” in the unaudited Condensed Consolidated Statements of Income. U.S. Postretirement Health Benefits Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Interest cost $ .1 $ .1 $ .2 $ .2 Recognized net actuarial loss .5 .7 Amortization of prior service credit (.8 ) (.8 ) ) ) Net periodic benefit credit $ (.2 ) $ – $ (.6 ) $ (.1 ) |
Schedule of defined benefit plan contributions | Nine Months Ended (In millions) October 3, 2015 September 27, 2014 U.S. $ $ Int’l U.S. postretirement health benefits .7 |
Cost Reduction Actions (Tables)
Cost Reduction Actions (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Cost Reduction Actions | |
Restructuring charges and payments | (In millions) Accrual at January 3, 2015 Charges (Reversals), net Cash Payments Non-cash Impairment Foreign Currency Translation Accrual at October 3, 2015 2015/2016 Actions Severance and related costs $ – $ $ ) $ – $ – $ Asset impairment charges – – ) – – Lease cancellation costs – .1 (.1 ) – – – 2014/2015 Actions Severance and related costs ) – (.9 ) Asset impairment charges – – ) – – Lease cancellation costs .1 .3 (.3 ) – – .1 2012 Program Severance and related costs .8 – – – (.1 ) .7 Total $ $ $ ) $ ) $ ) $ |
Total amount of restructuring costs incurred by reportable segment and Corporate | Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Restructuring costs by reportable segment and Corporate Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies .1 .1 Corporate .1 .4 .4 $ $ $ $ |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Financial Instruments | |
Fair value and balance sheet locations of derivatives | The following table provides the fair value and balance sheet locations of derivatives as of October 3, 2015: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets – Other accrued liabilities .8 Long-term retirement benefits and other liabilities .1 $ $ The following table provides the fair value and balance sheet locations of derivatives as of January 3, 2015: Asset Liability (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign exchange contracts Other current assets $ Other accrued liabilities $ Commodity contracts Other current assets – Other accrued liabilities Long-term retirement benefits and other liabilities .2 $ $ |
Components of the gain (loss) recognized in income related to fair value hedge contracts | Three Months Ended Nine Months Ended (In millions) Location of Net Gains (Losses) in Income October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Foreign exchange contracts Cost of products sold $ $ – $ $ ) Foreign exchange contracts Marketing, general and administrative expense ) ) ) ) $ ) $ ) $ ) $ ) |
Components of the gain (loss) recognized in income related to cash flow hedges | Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Foreign exchange contracts $ $ .7 $ $ ) Commodity contracts ) (.3 ) (.5 ) (.1 ) $ $ .4 $ .7 $ ) |
Taxes Based on Income (Tables)
Taxes Based on Income (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Taxes Based on Income | |
Income from continuing operations before taxes, provision for income taxes from continuing operations, and effective tax rate | Three Months Ended Nine Months Ended (Dollars in millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Income from continuing operations before taxes $ $ $ $ Provision for income taxes Effective tax rate % % % % |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Net Income Per Common Share | |
Schedule of net income per common share | Three Months Ended Nine Months Ended (In millions, except per share amounts) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 (A) Income from continuing operations $ $ $ $ (B) Income (loss) from discontinued operations, net of tax .4 (.7 ) (.6 ) ) (C) Net income available to common shareholders $ $ $ $ (D) Weighted average number of common shares outstanding Dilutive shares (additional common shares issuable under stock-based awards) (E) Weighted average number of common shares outstanding, assuming dilution Net income (loss) per common share: Continuing operations (A) ÷ (D) $ .89 $ .65 $ $ Discontinued operations (B) ÷ (D) – – – (.03 ) Net income per common share (C) ÷ (D) $ .89 $ .65 $ $ Net income (loss) per common share, assuming dilution: Continuing operations (A) ÷ (E) $ .87 $ .64 $ $ Discontinued operations (B) ÷ (E) .01 (.01 ) (.01 ) (.03 ) Net income per common share, assuming dilution (C) ÷ (E) $ .88 $ .63 $ $ |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Comprehensive Income | |
Schedule of changes in "Accumulated other comprehensive loss" (net of tax) | (In millions) Foreign Currency Translation Pension and Other Postretirement Benefits Cash Flow Hedges Total Balance as of January 3, 2015 $ ) $ ) $ – $ ) Other comprehensive loss before reclassifications, net of tax ) .5 .6 ) Reclassifications to net income, net of tax – ) Net current-period other comprehensive (loss) income, net of tax ) (.8 ) ) Balance as of October 3, 2015 $ ) $ ) $ (.8 ) $ ) (In millions) Foreign Currency Translation Pension and Other Postretirement Benefits Cash Flow Hedges Total Balance as of December 28, 2013 $ $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications, net of tax ) ) ) Reclassifications to net income, net of tax – Net current-period other comprehensive (loss) income, net of tax ) (.1 ) ) Balance as of September 27, 2014 $ $ ) $ ) $ ) |
Schedule of amounts reclassified from "Accumulated other comprehensive loss" to increase (decrease) income from continuing operations | Amounts Reclassified from Accumulated Other Comprehensive Loss Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Affected Line Item in the Statements Where Net Income is Presented Cash flow hedges: Foreign exchange contracts $ $ (.2 ) $ $ ) Cost of products sold Commodity contracts (.1 ) – (.9 ) .2 Cost of products sold Interest rate contracts (.1 ) – (.1 ) – Interest expense (.2 ) ) Total before tax (.2 ) .2 (.3 ) .4 Provision for income taxes – ) Net of tax Pension and other postretirement benefits (1) ) ) ) ) Provision for income taxes ) ) ) ) Net of tax $ ) $ ) $ ) $ ) 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 loss (income): | Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Foreign currency translation $ – $ ) $ – $ (.9 ) Pension and other postretirement benefits Cash flow hedges (.1 ) .1 (.2 ) – Income tax expense related to components of other comprehensive loss $ $ .7 $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
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 October 3, 2015: Fair Value Measurements Using (In millions) Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets Trading securities $ $ $ $ – Derivative assets – – Liabilities Derivative liabilities $ $ .9 $ $ – The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of January 3, 2015: Fair Value Measurements Using (In millions) Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets Trading securities $ $ $ $ – Derivative assets – – Liabilities Derivative liabilities $ $ $ $ – |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Commitments and Contingencies | |
Costs of Environmental Liabilities with Remediation | (In millions) Balance at January 3, 2015 $ Charges (reversals), net Payments ) Balance at October 3, 2015 $ |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
Segment Information | |
Financial information, by reportable segment from continuing operations | Three Months Ended Nine Months Ended (In millions) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014 Net sales to unaffiliated customers Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies Net sales to unaffiliated customers $ $ $ $ Intersegment sales Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions .3 .5 Vancive Medical Technologies Intersegment sales $ $ $ $ Income from continuing operations before taxes Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies ) ) ) ) Corporate expense ) ) ) ) Interest expense ) ) ) ) Income from continuing operations before taxes $ $ $ $ Other expense, net by reportable segment Pressure-sensitive Materials $ $ $ $ Retail Branding and Information Solutions Vancive Medical Technologies .1 .1 Corporate .3 .4 .4 Other expense, net $ $ $ $ Other expense, net by type Restructuring costs: Severance and related costs $ $ $ $ Asset impairment charges and lease cancellation costs Other items: Indefinite-lived intangible asset impairment charge – – Loss on sale of product line and related exit costs .2 – – Gain on sale of assets – ) ) ) Loss from curtailment of pension obligation – – – .6 Legal settlement .2 – (.3 ) – Other expense, net $ $ $ $ |
General (Details)
General (Details) - USD ($) $ in Millions | Oct. 03, 2015 | Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 |
Length of fiscal period | 91 days | 91 days | 273 days | 273 days | |
Accounting Changes and Error Corrections | |||||
Additions to Long-term retirement benefits and other liabilities | $ 24 |
General (Detail 2)
General (Detail 2) - USD ($) $ in Millions | Oct. 03, 2015 | Jan. 03, 2015 | Sep. 27, 2014 | Dec. 28, 2013 |
Accounting Changes and Error Corrections | ||||
Deferred Tax Assets, Net, Noncurrent | $ 312.4 | $ 320.9 | ||
Total Assets | 4,248.9 | 4,370.1 | ||
Long-term retirement benefits and other liabilities | 622.2 | 648.3 | ||
Retained earnings | 2,244.3 | 2,116.5 | ||
Accumulated other comprehensive loss | (655.1) | (542.3) | $ (349.6) | $ (281.2) |
Total shareholders' equity | 1,055.3 | 1,050.9 | ||
Total liabilities and shareholders' equity | $ 4,248.9 | 4,370.1 | ||
As Previously Reported | ||||
Accounting Changes and Error Corrections | ||||
Deferred Tax Assets, Net, Noncurrent | 311 | |||
Total Assets | 4,360.2 | |||
Long-term retirement benefits and other liabilities | 622.8 | |||
Retained earnings | 2,137.1 | |||
Accumulated other comprehensive loss | (547.3) | |||
Total shareholders' equity | 1,066.5 | |||
Total liabilities and shareholders' equity | 4,360.2 | |||
Adjustments | ||||
Accounting Changes and Error Corrections | ||||
Deferred Tax Assets, Net, Noncurrent | 9.9 | |||
Total Assets | 9.9 | |||
Long-term retirement benefits and other liabilities | 25.5 | |||
Retained earnings | (20.6) | |||
Accumulated other comprehensive loss | 5 | |||
Total shareholders' equity | (15.6) | |||
Total liabilities and shareholders' equity | $ 9.9 |
General (Detail 3)
General (Detail 3) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Accounting Changes and Error Corrections | ||||
Marketing, general and administrative expense | $ 268.1 | $ 278.4 | $ 841.8 | $ 873.1 |
Income from continuing operations before taxes | 116.1 | 99.1 | 317.4 | 263 |
Provision for income taxes | 34.8 | 38.2 | 99.5 | 85.5 |
Income from continuing operations | 81.3 | 60.9 | 217.9 | 177.5 |
Loss from discontinued operations, net of tax | 0.4 | (0.7) | (0.6) | (3) |
Net income | $ 81.7 | $ 60.2 | $ 217.3 | $ 174.5 |
Net income (loss) per common share: | ||||
Continuing operations | $ 0.89 | $ 0.65 | $ 2.39 | $ 1.87 |
Discontinued operations | 0 | 0 | 0 | (0.03) |
Net income per common share | 0.89 | 0.65 | 2.39 | 1.84 |
Net income (loss) per common share, assuming dilution: | ||||
Continuing operations | 0.87 | 0.64 | 2.35 | 1.84 |
Discontinued operations | 0.01 | (0.01) | (0.01) | (0.03) |
Net income per common share, assuming dilution | $ 0.88 | $ 0.63 | $ 2.34 | $ 1.81 |
As Previously Reported | ||||
Accounting Changes and Error Corrections | ||||
Marketing, general and administrative expense | $ 276.3 | $ 870 | ||
Income from continuing operations before taxes | 101.2 | 266.1 | ||
Provision for income taxes | 36.2 | 85.1 | ||
Income from continuing operations | 65 | 181 | ||
Loss from discontinued operations, net of tax | (0.7) | (3) | ||
Net income | $ 64.3 | $ 178 | ||
Net income (loss) per common share: | ||||
Continuing operations | $ 0.70 | $ 1.91 | ||
Discontinued operations | (0.01) | (0.03) | ||
Net income per common share | 0.69 | 1.88 | ||
Net income (loss) per common share, assuming dilution: | ||||
Continuing operations | 0.68 | 1.87 | ||
Discontinued operations | (0.03) | |||
Net income per common share, assuming dilution | $ 0.68 | $ 1.84 | ||
Adjustments | ||||
Accounting Changes and Error Corrections | ||||
Marketing, general and administrative expense | $ 2.1 | $ 3.1 | ||
Income from continuing operations before taxes | (2.1) | (3.1) | ||
Provision for income taxes | 2 | 0.4 | ||
Income from continuing operations | (4.1) | (3.5) | ||
Net income | $ (4.1) | $ (3.5) | ||
Net income (loss) per common share: | ||||
Continuing operations | $ (0.05) | $ (0.04) | ||
Discontinued operations | 0.01 | |||
Net income per common share | (0.04) | (0.04) | ||
Net income (loss) per common share, assuming dilution: | ||||
Continuing operations | (0.04) | (0.03) | ||
Discontinued operations | (0.01) | |||
Net income per common share, assuming dilution | $ (0.05) | $ (0.03) |
General (Detail 4)
General (Detail 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Accounting Changes and Error Corrections | ||||
Net income | $ 81.7 | $ 60.2 | $ 217.3 | $ 174.5 |
Pension and other postretirement benefits | 7.5 | 5.7 | 26.8 | 21.6 |
Other comprehensive loss, before tax | (53.4) | (73.3) | (103.9) | (62) |
Income tax expense related to components of other comprehensive loss | 2.3 | 0.7 | 8.9 | 6.4 |
Other comprehensive loss, net of tax | (55.7) | (74) | (112.8) | (68.4) |
Total comprehensive (loss) income, net of tax | $ 26 | (13.8) | $ 104.5 | 106.1 |
As Previously Reported | ||||
Accounting Changes and Error Corrections | ||||
Net income | 64.3 | 178 | ||
Pension and other postretirement benefits | 5.7 | 16.6 | ||
Other comprehensive loss, before tax | (73.3) | (67) | ||
Income tax expense related to components of other comprehensive loss | 1.7 | 5.5 | ||
Other comprehensive loss, net of tax | (75) | (72.5) | ||
Total comprehensive (loss) income, net of tax | (10.7) | 105.5 | ||
Adjustments | ||||
Accounting Changes and Error Corrections | ||||
Net income | (4.1) | (3.5) | ||
Pension and other postretirement benefits | 5 | |||
Other comprehensive loss, before tax | 5 | |||
Income tax expense related to components of other comprehensive loss | (1) | 0.9 | ||
Other comprehensive loss, net of tax | 1 | 4.1 | ||
Total comprehensive (loss) income, net of tax | $ (3.1) | $ 0.6 |
Sale of Product Line and Disc41
Sale of Product Line and Discontinued Operations (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May. 31, 2015 | Oct. 03, 2015 | Apr. 04, 2015 | Oct. 03, 2015 | Sep. 27, 2014 | |
Operating results of discontinued operations and loss on sale | |||||
Loss on sale of product line and related exit costs | $ 0.2 | $ 10.5 | |||
Impairment of long-lived assets of product line | $ 2 | ||||
Loss on sale before taxes | $ (3) | ||||
Retail Branding and Information Solutions | |||||
Operating results of discontinued operations and loss on sale | |||||
Proceeds from Sale of Other Productive Assets | $ 1.5 | ||||
Loss on sale of product line and related exit costs | $ 0.2 | 8.5 | |||
Severance Costs | 3.4 | ||||
Severance cost paid | $ 1.2 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Oct. 03, 2015 | Jan. 03, 2015 |
Inventories | ||
Raw materials | $ 191.4 | $ 183.6 |
Work-in-progress | 153.1 | 150.4 |
Finished goods | 167.9 | 157.8 |
Inventories, net | $ 512.4 | $ 491.8 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | Jan. 03, 2015 | |
Changes in net carrying amount of goodwill | ||||
Goodwill, Beginning Balance | $ 721.6 | |||
Acquisition adjustments(1) | (0.3) | |||
Translation adjustments | (30.6) | |||
Goodwill, Ending Balance | 690.7 | |||
Indefinite-lived intangible assets (excluding goodwill) | ||||
Impairment of indefinite-lived intangible assets | $ 3 | $ 3 | ||
Pressure-sensitive Materials | ||||
Changes in net carrying amount of goodwill | ||||
Goodwill, Beginning Balance | 306.6 | |||
Translation adjustments | (24.3) | |||
Goodwill, Ending Balance | 282.3 | |||
Retail Branding and Information Solutions | ||||
Changes in net carrying amount of goodwill | ||||
Goodwill, Beginning Balance | 415 | |||
Acquisition adjustments(1) | (0.3) | |||
Translation adjustments | (6.3) | |||
Goodwill, Ending Balance | 408.4 | |||
Accumulated impairment losses | 820 | $ 820 | ||
Vancive Medical Technologies | ||||
Changes in net carrying amount of goodwill | ||||
Goodwill, Ending Balance | $ 0 |
Debt and Capital Leases (Detail
Debt and Capital Leases (Details) - USD ($) $ in Millions | 1 Months Ended | ||
May. 31, 2015 | Oct. 03, 2015 | Jan. 03, 2015 | |
Debt | |||
Fair value of debt | $ 1,110 | $ 1,220 | |
Mentor lease facility | |||
Capital Lease Obligations [Abstract] | |||
Capital Lease Obligations | 26 | ||
Capital Lease Obligations, Noncurrent | 24 | ||
Capital Lease Obligations, Current | $ 2 | ||
Term of Lease Financing for Commercial Facility | 10 years |
Pension and Other Postretirem45
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
U.S. | ||||
Components of net periodic benefit cost: | ||||
Employer contributions | $ 2.9 | $ 3.9 | ||
U.S. | Continuing operations | ||||
Components of net periodic benefit cost: | ||||
Service cost | $ 0.1 | $ 0.1 | 0.3 | 0.3 |
Interest cost | 10.8 | 11.1 | 32.5 | 33.5 |
Expected return on plan assets | (12.8) | (12.9) | (38.6) | (38.9) |
Recognized net actuarial loss | 5.2 | 4.1 | 15.4 | 12.2 |
Amortization of prior service cost (credit) | 0.2 | 0.2 | 0.8 | 0.8 |
Net periodic benefit cost (credit) | 3.5 | 2.6 | 10.4 | 7.9 |
Int'l | ||||
Components of net periodic benefit cost: | ||||
Employer contributions | 11.2 | 12.8 | ||
Int'l | Continuing operations | ||||
Components of net periodic benefit cost: | ||||
Service cost | 3.3 | 3.3 | 10.3 | 10 |
Interest cost | 4.3 | 5.8 | 13.1 | 18 |
Expected return on plan assets | (5.4) | (6.6) | (16.2) | (19.6) |
Recognized net actuarial loss | 2.4 | 1.3 | 7.2 | 3.9 |
Amortization of prior service cost (credit) | 0.1 | (0.1) | 0.3 | |
Amortization of transition obligation | 0.1 | 0.1 | ||
Recognized loss on curtailment | 0.6 | |||
Recognized loss on settlement | 3.8 | |||
Net periodic benefit cost (credit) | 4.6 | 4 | 18.1 | 13.3 |
U.S. Postretirement Health Benefits | Continuing operations | ||||
Components of net periodic benefit cost: | ||||
Interest cost | 0.1 | 0.1 | 0.2 | 0.2 |
Recognized net actuarial loss | 0.5 | 0.7 | 1.6 | 2.1 |
Amortization of prior service cost (credit) | (0.8) | $ (0.8) | (2.4) | (2.4) |
Net periodic benefit cost (credit) | $ (0.2) | (0.6) | (0.1) | |
Employer contributions | $ 0.7 | $ 1.2 |
Research and Development (Detai
Research and Development (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Marketing, general and administrative expense | ||||
Research and development expense | $ 22.2 | $ 25.1 | $ 70.6 | $ 77 |
Long-Term Incentive Compensat47
Long-Term Incentive Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Marketing, general and administrative expense | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 5.2 | $ 7.6 | $ 18.4 | $ 22.1 |
Cash-based LTI awards | 1.4 | $ 2 | 16.7 | $ 11.9 |
Stock-based awards | Continuing operations | ||||
Stock-Based Compensation | ||||
Unrecognized compensation cost related to share based compensation cost | $ 32 | $ 32 | ||
Unrecognized compensation cost weighted average recognition period | 2 years |
Cost Reduction Actions (Details
Cost Reduction Actions (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 03, 2015USD ($)item | Oct. 03, 2015USD ($)item | Jan. 03, 2015USD ($)item | |
Restructuring Cost and Reserve | |||
Charges (Reversals), net | $ | $ 40.5 | ||
2015/2016 Actions | |||
Restructuring Cost and Reserve | |||
Charges (Reversals), net | $ | $ 6.6 | ||
Number of positions reduced as a result of Cost Reduction Actions | 85 | ||
2014/2015 Actions | |||
Restructuring Cost and Reserve | |||
Charges (Reversals), net | $ | $ 33.9 | $ 66.5 | |
Number of positions reduced as a result of Cost Reduction Actions | 605 | 1,420 | |
Number of positions remaining | 180 | 180 |
Cost Reduction Actions (Detai49
Cost Reduction Actions (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | Jan. 03, 2015 | |
Cost Reduction Actions | |||||
Beginning Balance | $ 17.7 | ||||
Charges (Reversals), net | 40.5 | ||||
Cash payments | (42.1) | ||||
Non-cash Impairment | (5.1) | ||||
Foreign Currency translation | (1) | ||||
Ending Balance | $ 10 | 10 | $ 17.7 | ||
Severance and related costs | |||||
Cost Reduction Actions | |||||
Charges (Reversals), net | 4.7 | $ 5.1 | 35 | $ 48 | |
2015/2016 Actions | |||||
Cost Reduction Actions | |||||
Charges (Reversals), net | 6.6 | ||||
2015/2016 Actions | Severance and related costs | |||||
Cost Reduction Actions | |||||
Charges (Reversals), net | 4.8 | ||||
Cash payments | (2.3) | ||||
Ending Balance | 2.5 | 2.5 | |||
2015/2016 Actions | Asset impairment charges | |||||
Cost Reduction Actions | |||||
Charges (Reversals), net | 1.7 | ||||
Non-cash Impairment | (1.7) | ||||
2015/2016 Actions | Lease cancellation costs | |||||
Cost Reduction Actions | |||||
Charges (Reversals), net | 0.1 | ||||
Cash payments | (0.1) | ||||
2014/2015 Actions | |||||
Cost Reduction Actions | |||||
Charges (Reversals), net | 33.9 | 66.5 | |||
2014/2015 Actions | Severance and related costs | |||||
Cost Reduction Actions | |||||
Beginning Balance | 16.8 | ||||
Charges (Reversals), net | 30.2 | ||||
Cash payments | (39.4) | ||||
Foreign Currency translation | (0.9) | ||||
Ending Balance | 6.7 | 6.7 | 16.8 | ||
2014/2015 Actions | Asset impairment charges | |||||
Cost Reduction Actions | |||||
Charges (Reversals), net | 3.4 | ||||
Non-cash Impairment | (3.4) | ||||
2014/2015 Actions | Lease cancellation costs | |||||
Cost Reduction Actions | |||||
Beginning Balance | 0.1 | ||||
Charges (Reversals), net | 0.3 | ||||
Cash payments | (0.3) | ||||
Ending Balance | 0.1 | 0.1 | 0.1 | ||
2012 Program | Severance and related costs | |||||
Cost Reduction Actions | |||||
Beginning Balance | 0.8 | ||||
Foreign Currency translation | (0.1) | ||||
Ending Balance | $ 0.7 | $ 0.7 | $ 0.8 |
Cost Reduction Actions (Detai50
Cost Reduction Actions (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Restructuring Cost and Reserve | ||||
Restructuring costs | $ 40.5 | |||
Other expense, net | ||||
Restructuring Cost and Reserve | ||||
Restructuring costs | $ 6.6 | $ 6.7 | 40.5 | $ 52.5 |
Pressure-sensitive Materials | Other expense, net | ||||
Restructuring Cost and Reserve | ||||
Restructuring costs | 1.1 | 2.1 | 15.5 | 35.7 |
Retail Branding and Information Solutions | Other expense, net | ||||
Restructuring Cost and Reserve | ||||
Restructuring costs | 3.7 | 4.1 | 19.4 | 16.3 |
Vancive Medical Technologies | Other expense, net | ||||
Restructuring Cost and Reserve | ||||
Restructuring costs | 1.7 | 0.1 | 3.4 | 0.1 |
Corporate | Other expense, net | ||||
Restructuring Cost and Reserve | ||||
Restructuring costs | $ 0.1 | $ 0.4 | $ 2.2 | $ 0.4 |
Financial Instruments (Details)
Financial Instruments (Details) - Cash Flow Hedging $ in Millions | 9 Months Ended |
Oct. 03, 2015USD ($) | |
Financial Instruments | |
Maximum length of time hedged in cash flow hedge | 36 months |
Cash Flow Hedge Gain to be Reclassified within Twelve Months | $ 1 |
Foreign exchange contracts | |
Financial Instruments | |
Notional amount | 1,200 |
Commodity contracts | |
Financial Instruments | |
Notional amount | $ 2.6 |
Financial Instruments (Details
Financial Instruments (Details 2) - USD ($) $ in Millions | Oct. 03, 2015 | Jan. 03, 2015 |
Derivatives, Fair Value | ||
Asset | $ 4.4 | $ 10.3 |
Liability | 9 | 11.7 |
Long-term retirement benefits and other liabilities | ||
Derivatives, Fair Value | ||
Liability | 0.1 | 0.2 |
Foreign exchange contracts | Other current assets | ||
Derivatives, Fair Value | ||
Asset | 4.4 | 10.3 |
Foreign exchange contracts | Other accrued liabilities | ||
Derivatives, Fair Value | ||
Liability | 8.1 | 10.5 |
Commodity contracts | Other accrued liabilities | ||
Derivatives, Fair Value | ||
Liability | $ 0.8 | $ 1 |
Financial Instruments (Detail53
Financial Instruments (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Fair Value Hedges | ||||
Gain (loss) in income | $ (17.6) | $ (25.7) | $ (12.6) | $ (31.2) |
Foreign exchange contracts | Cost of products sold | ||||
Fair Value Hedges | ||||
Gain (loss) in income | 2.3 | 3.3 | (3) | |
Foreign exchange contracts | Marketing, general and administrative expense | ||||
Fair Value Hedges | ||||
Gain (loss) in income | $ (19.9) | $ (25.7) | $ (15.9) | $ (28.2) |
Financial Instruments (Detail54
Financial Instruments (Details 4) - Cash Flow Hedging - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Derivative Instruments, Gains (Losses) | ||||
Gains (losses) recognized in accumulated other comprehensive loss on derivatives | $ 1 | $ 0.4 | $ 0.7 | $ (1.6) |
Foreign exchange contracts | ||||
Derivative Instruments, Gains (Losses) | ||||
Gains (losses) recognized in accumulated other comprehensive loss on derivatives | 2.7 | 0.7 | 1.2 | (1.5) |
Commodity contracts | ||||
Derivative Instruments, Gains (Losses) | ||||
Gains (losses) recognized in accumulated other comprehensive loss on derivatives | $ (1.7) | $ (0.3) | $ (0.5) | $ (0.1) |
Taxes Based on Income (Details)
Taxes Based on Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Taxes Based on Income | ||||
Income from continuing operations before taxes | $ 116.1 | $ 99.1 | $ 317.4 | $ 263 |
Provision for income taxes | $ 34.8 | $ 38.2 | $ 99.5 | $ 85.5 |
Effective tax rate (as a percent) | 30.00% | 38.50% | 31.30% | 32.50% |
Tax benefit for adjustments to domestic income taxes | $ 4.2 | $ 4.2 | ||
Tax benefit from an enacted favorable foreign tax law change | 0.9 | 0.9 | ||
Tax expense associated with the tax cost to repatriate non-permanently reinvested 2015 earnings of certain foreign subsidiaries | 5.4 | |||
Net tax benefit related to changes in the effective tax rates in certain foreign municipalities | 1.6 | |||
Tax benefit due primarily to decreases in certain tax reserves as a result of closing of tax years | 4.2 | |||
Tax benefit as a result of changes in certain tax reserves and valuation allowances | $ 4.2 | $ 20 | ||
Tax expense from the taxable inclusion of a net foreign currency gain related to revaluation of certain intercompany loans | $ 4.6 | 4.6 | ||
Tax expense related to change in estimate of the potential outcome of uncertain tax issues in China | $ 6 | |||
Reasonably possible decrease in unrecognized tax benefits during next 12 months | $ 15 | $ 15 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Net income per common share amounts | ||||
Income from continuing operations | $ 81.3 | $ 60.9 | $ 217.9 | $ 177.5 |
Income (loss) from discontinued operations, net of tax | 0.4 | (0.7) | (0.6) | (3) |
Net income | $ 81.7 | $ 60.2 | $ 217.3 | $ 174.5 |
Weighted average number of common shares outstanding | 91.5 | 93.3 | 91.1 | 94.7 |
Dilutive shares (additional common shares issuable under stock-based awards) | 1.7 | 1.9 | 1.8 | 1.9 |
Weighted average number of common shares outstanding, assuming dilution | 93.2 | 95.2 | 92.9 | 96.6 |
Net income (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ 0.89 | $ 0.65 | $ 2.39 | $ 1.87 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.03) |
Net income per common share (in dollars per share) | 0.89 | 0.65 | 2.39 | 1.84 |
Net income (loss) per common share, assuming dilution: | ||||
Continuing operations (in dollars per share) | 0.87 | 0.64 | 2.35 | 1.84 |
Discontinued operations (in dollars per share) | 0.01 | (0.01) | (0.01) | (0.03) |
Net income per common share, assuming dilution (in dollars per share) | $ 0.88 | $ 0.63 | $ 2.34 | $ 1.81 |
Stock-based compensation awards excluded from the computation of net income per common share, assuming dilution | 0.5 | 3 | 1 | 3 |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Changes in Accumulated other comprehensive loss (net of tax) | ||||
Balance at beginning of the period | $ (542.3) | $ (281.2) | ||
Other comprehensive loss before reclassifications, net of tax | (128.6) | (81.6) | ||
Reclassifications to net income, net of tax | 15.8 | 13.2 | ||
Net current-period other comprehensive (loss) income, net of tax | $ (55.7) | $ (74) | (112.8) | (68.4) |
Balance at end of the period | (655.1) | (349.6) | (655.1) | (349.6) |
Foreign Currency Translation | ||||
Changes in Accumulated other comprehensive loss (net of tax) | ||||
Balance at beginning of the period | (16.7) | 137.1 | ||
Other comprehensive loss before reclassifications, net of tax | (129.7) | (82.6) | ||
Net current-period other comprehensive (loss) income, net of tax | (129.7) | (82.6) | ||
Balance at end of the period | (146.4) | 54.5 | (146.4) | 54.5 |
Pension and Other Postretirement Benefits | ||||
Changes in Accumulated other comprehensive loss (net of tax) | ||||
Balance at beginning of the period | (525.6) | (417.3) | ||
Other comprehensive loss before reclassifications, net of tax | 0.5 | 2.2 | ||
Reclassifications to net income, net of tax | 17.2 | 12.1 | ||
Net current-period other comprehensive (loss) income, net of tax | 17.7 | 14.3 | ||
Balance at end of the period | (507.9) | (403) | (507.9) | (403) |
Cash Flow Hedges | ||||
Changes in Accumulated other comprehensive loss (net of tax) | ||||
Balance at beginning of the period | (1) | |||
Other comprehensive loss before reclassifications, net of tax | 0.6 | (1.2) | ||
Reclassifications to net income, net of tax | (1.4) | 1.1 | ||
Net current-period other comprehensive (loss) income, net of tax | (0.8) | (0.1) | ||
Balance at end of the period | $ (0.8) | $ (1.1) | $ (0.8) | $ (1.1) |
Comprehensive Income (Details 2
Comprehensive Income (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Amounts reclassified from Accumulated other comprehensive loss | ||||
Cost of products sold | $ (1,062.2) | $ (1,158.9) | $ (3,258.6) | $ (3,489.4) |
Interest Expense | 14.7 | 15.4 | 45.3 | 46.4 |
Income from continuing operations before taxes | 116.1 | 99.1 | 317.4 | 263 |
Provision for income taxes | (34.8) | (38.2) | (99.5) | (85.5) |
Income from continuing operations | 81.3 | 60.9 | 217.9 | 177.5 |
Amounts Reclassified from Accumulated other comprehensive loss | ||||
Amounts reclassified from Accumulated other comprehensive loss | ||||
Income from continuing operations | (4.1) | (4.1) | (15.8) | (13.2) |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | ||||
Amounts reclassified from Accumulated other comprehensive loss | ||||
Income from continuing operations before taxes | 1.2 | (0.2) | 1.7 | (1.5) |
Provision for income taxes | (0.2) | 0.2 | (0.3) | 0.4 |
Income from continuing operations | 1 | 1.4 | (1.1) | |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Foreign exchange contracts | ||||
Amounts reclassified from Accumulated other comprehensive loss | ||||
Cost of products sold | 1.4 | (0.2) | 2.7 | (1.7) |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Commodity contracts | ||||
Amounts reclassified from Accumulated other comprehensive loss | ||||
Cost of products sold | (0.1) | (0.9) | 0.2 | |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Interest Rate Contracts | ||||
Amounts reclassified from Accumulated other comprehensive loss | ||||
Interest Expense | 0.1 | 0.1 | ||
Pension and Other Postretirement Benefits | Amounts Reclassified from Accumulated other comprehensive loss | ||||
Amounts reclassified from Accumulated other comprehensive loss | ||||
Pension and other postretirement benefits | (7.5) | (5.7) | (26.3) | (17.6) |
Provision for income taxes | 2.4 | 1.6 | 9.1 | 5.5 |
Income from continuing operations | $ (5.1) | $ (4.1) | $ (17.2) | $ (12.1) |
Comprehensive Income (Details 3
Comprehensive Income (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Income tax expense (benefit) allocated to other comprehensive income (loss) | ||||
Foreign currency translation | $ (1) | $ (0.9) | ||
Pension and other postretirement benefits | $ 2.4 | 1.6 | $ 9.1 | 7.3 |
Cash flow hedges | (0.1) | 0.1 | (0.2) | |
Income tax expense related to components of other comprehensive loss | $ 2.3 | $ 0.7 | $ 8.9 | $ 6.4 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Oct. 03, 2015 | Jan. 03, 2015 |
Assets | ||
Derivative assets | $ 4.4 | $ 10.3 |
Liabilities | ||
Derivative liabilities | 9 | 11.7 |
Recurring | ||
Assets | ||
Trading securities | 18.1 | 17.9 |
Derivative assets | 4.4 | 10.3 |
Liabilities | ||
Derivative liabilities | 9 | 11.7 |
Recurring | Cash and Cash Equivalents | ||
Assets | ||
Trading securities | 0.6 | 0.8 |
Recurring | Other current assets | ||
Assets | ||
Trading securities | 17.5 | 17.1 |
Quoted Prices in Active Markets (Level 1) | Recurring | ||
Assets | ||
Trading securities | 9.6 | 7.6 |
Liabilities | ||
Derivative liabilities | 0.9 | 1.2 |
Significant Other Observable Inputs (Level 2) | Recurring | ||
Assets | ||
Trading securities | 8.5 | 10.3 |
Derivative assets | 4.4 | 10.3 |
Liabilities | ||
Derivative liabilities | $ 8.1 | $ 10.5 |
Commitments and Contingencies61
Commitments and Contingencies (Details) $ in Millions | 9 Months Ended |
Oct. 03, 2015USD ($)item | |
Environmental | |
Environmental site contingency number of sites | item | 13 |
Activity related to environmental liabilities | |
Balance at beginning of year | $ 26.2 |
Charges (reversals), net | 1.4 |
Payments | (6.3) |
Balance at end of year | 21.3 |
Short term environmental liabilities | 8 |
Letters of credit | |
Guarantor Obligations | |
Unused borrowing capacity with various financial institutions | 43 |
Guarantee receivable financing | |
Guarantor Obligations | |
Guarantee obligations | $ 17 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Segment Reporting Information | ||||
Net sales | $ 1,468.1 | $ 1,559.6 | $ 4,512.1 | $ 4,725.5 |
Interest expense | (14.7) | (15.4) | (45.3) | (46.4) |
Income from continuing operations before taxes | 116.1 | 99.1 | 317.4 | 263 |
Other expense, net | 7 | 7.8 | 49 | 53.6 |
Intersegment | ||||
Segment Reporting Information | ||||
Net sales | 16.1 | 19.4 | 52.4 | 58.5 |
Pressure-sensitive Materials | Operating segments | ||||
Segment Reporting Information | ||||
Net sales | 1,083.7 | 1,157 | 3,318.4 | 3,481.4 |
Income from continuing operations before taxes | 130.5 | 116.6 | 383.2 | 315.1 |
Other expense, net | 1.1 | 2.1 | 13.8 | 36.3 |
Pressure-sensitive Materials | Intersegment | ||||
Segment Reporting Information | ||||
Net sales | 14.6 | 16.2 | 46.5 | 49.1 |
Retail Branding and Information Solutions | Operating segments | ||||
Segment Reporting Information | ||||
Net sales | 366.8 | 383.9 | 1,138.7 | 1,186 |
Income from continuing operations before taxes | 25.1 | 20.6 | 54.3 | 65.5 |
Other expense, net | 3.9 | 5.2 | 29.4 | 16.8 |
Retail Branding and Information Solutions | Intersegment | ||||
Segment Reporting Information | ||||
Net sales | 0.3 | 0.5 | 1.5 | 1.9 |
Vancive Medical Technologies | Operating segments | ||||
Segment Reporting Information | ||||
Net sales | 17.6 | 18.7 | 55 | 58.1 |
Income from continuing operations before taxes | (1.2) | (2.9) | (4.7) | (7.2) |
Other expense, net | 1.7 | 0.1 | 3.4 | 0.1 |
Vancive Medical Technologies | Intersegment | ||||
Segment Reporting Information | ||||
Net sales | 1.2 | 2.7 | 4.4 | 7.5 |
Corporate | ||||
Segment Reporting Information | ||||
Income from continuing operations before taxes | (23.6) | (19.8) | (70.1) | (64) |
Other expense, net | $ 0.3 | $ 0.4 | $ 2.4 | $ 0.4 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Restructuring costs | ||||
Charges | $ 40.5 | |||
Other items: | ||||
Indefinite-lived intangible asset impairment charge | $ 3 | $ 3 | ||
Loss on sale of product line and related exit costs | $ 0.2 | 10.5 | ||
Gain on sale of asset | (1.9) | (1.7) | (2.5) | |
Loss from curtailment of pension obligation | 0.6 | |||
Legal settlement | 0.2 | (0.3) | ||
Other expense, net | 7 | 7.8 | 49 | 53.6 |
Severance and related costs | ||||
Restructuring costs | ||||
Charges | 4.7 | 5.1 | 35 | 48 |
Asset impairment, lease and other contract cancellation charges | ||||
Restructuring costs | ||||
Charges | $ 1.9 | $ 1.6 | $ 5.5 | $ 4.5 |