Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 29, 2022 | Jul. 03, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 1, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 1-7685 | ||
Entity Registrant Name | AVERY DENNISON CORPORATION | ||
Entity Central Index Key | 0000008818 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Amendment Flag | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-1492269 | ||
Entity Address, City or Town | Glendale | ||
Entity Address, State or Province | CA | ||
Entity Address, Address Line One | 207 Goode Avenue | ||
City Area Code | 626 | ||
Local Phone Number | 304-2000 | ||
Entity Address, Postal Zip Code | 91203 | ||
Current Fiscal Year End Date | --01-01 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 17.3 | ||
Entity Common Stock, Shares Outstanding | 82,461,259 | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Firm ID | 238 | ||
Auditor Location | Los Angeles, California | ||
Common stock, $1 par value | |||
Document Information [Line Items] | |||
Security Exchange Name | NYSE | ||
Title of 12(b) Security | Common stock, $1 par value | ||
Trading Symbol | AVY | ||
Senior notes due 2025 at 1.25% | |||
Document Information [Line Items] | |||
Security Exchange Name | NASDAQ | ||
Title of 12(b) Security | 1.25% Senior Notes due 2025 | ||
Trading Symbol | AVY25 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 162.7 | $ 252.3 |
Trade accounts receivable, less allowances of $33 and $44.6 at year-end 2021 and 2020, respectively | 1,424.5 | 1,235.2 |
Inventories | 907.2 | 717.2 |
Other current assets | 240.2 | 211.5 |
Total current assets | 2,734.6 | 2,416.2 |
Property, plant and equipment, net | 1,477.7 | 1,343.7 |
Goodwill | 1,881.5 | 1,136.4 |
Other intangibles resulting from business acquisitions, net | 911.4 | 224.9 |
Deferred tax assets | 130.2 | 197.7 |
Other assets | 836.2 | 765 |
Total assets | 7,971.6 | 6,083.9 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt and finance leases | 318.8 | 64.7 |
Accounts payable | 1,298.8 | 1,050.9 |
Accrued payroll and employee benefits | 299 | 239 |
Accrued trade rebates | 176.3 | 140.2 |
Income taxes payable | 74.9 | 86.3 |
Other current liabilities | 380.1 | 344.9 |
Total current liabilities | 2,547.9 | 1,926 |
Long-term debt and finance leases | 2,785.9 | 2,052.1 |
Long-term retirement benefits and other liabilities | 474.9 | 503.6 |
Deferred tax liabilities and income taxes payable | 238.5 | 117.3 |
Commitments and contingencies (see Notes 7 and 8) | ||
Shareholders' equity: | ||
Common stock, $1 par value per share, authorized – 400,000,000 shares at year-end 2021 and 2020; issued – 124,126,624 shares at year-end 2021 and 2020; outstanding – 82,605,953 and 83,151,174 shares at year-end 2021 and 2020, respectively | 124.1 | 124.1 |
Capital in excess of par value | 862.3 | 862.1 |
Retained earnings | 3,880.7 | 3,349.3 |
Treasury stock at cost, 41,520,671 and 40,975,450 shares at year-end 2021 and 2020, respectively | (2,659.8) | (2,501) |
Accumulated other comprehensive loss | (282.9) | (349.6) |
Total shareholders' equity | 1,924.4 | 1,484.9 |
Total liabilities and shareholders' equity | $ 7,971.6 | $ 6,083.9 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
Consolidated Balance Sheets | ||
Trade accounts receivable, allowances (in dollars) | $ 33 | $ 44.6 |
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 | 82,605,953 | 83,151,174 |
Treasury stock, shares | 41,520,671 | 40,975,450 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 8,408.3 | $ 6,971.5 | $ 7,070.1 |
Cost of products sold | 6,095.5 | 5,048.2 | 5,166 |
Gross profit | 2,312.8 | 1,923.3 | 1,904.1 |
Marketing, general and administrative expense | 1,248.5 | 1,060.5 | 1,080.4 |
Other expense (income), net | 5.6 | 53.6 | 53.2 |
Interest expense | 70.2 | 70 | 75.8 |
Other non-operating expense (income), net | (4.1) | 1.9 | 445.2 |
Income before taxes | 992.6 | 737.3 | 249.5 |
Provision for (benefit from) income taxes | 248.6 | 177.7 | (56.7) |
Equity method investment (losses) gains | (3.9) | (3.7) | (2.6) |
Net income | $ 740.1 | $ 555.9 | $ 303.6 |
Per share amounts: | |||
Net income per common share (in dollars per share) | $ 8.93 | $ 6.67 | $ 3.61 |
Net income per common share, assuming dilution (in dollars per share) | $ 8.83 | $ 6.61 | $ 3.57 |
Weighted average number of shares outstanding: | |||
Common shares (in shares) | 82.9 | 83.4 | 84 |
Common shares, assuming dilution (in shares) | 83.8 | 84.1 | 85 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 740.1 | $ 555.9 | $ 303.6 |
Foreign currency translation: | |||
Translation gain (loss) | 30.7 | (3) | 2.3 |
Pension and other postretirement benefits: | |||
Net gain recognized from actuarial gain/loss and prior service cost/credit | 27.9 | 6.2 | 66.4 |
Reclassifications to net income | 4.4 | 2.9 | 266.1 |
Cash flow hedges: | |||
Gains (losses) recognized on cash flow hedges | 5.4 | (7.5) | 0.5 |
Reclassifications to net income | (1.7) | (0.1) | (1.4) |
Other comprehensive income (loss), net of tax | 66.7 | (1.5) | 333.9 |
Total comprehensive income, net of tax | $ 806.8 | $ 554.4 | $ 637.5 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | Common stock, $1 par value | Capital in excess of par value | Retained earnings | Treasury stock, at cost | Accumulated other comprehensive loss |
Beginning balance at Dec. 29, 2018 | $ 955.1 | $ 124.1 | $ 872 | $ 2,864.9 | $ (2,223.9) | $ (682) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 303.6 | 303.6 | ||||
Other comprehensive income (loss), net of tax | 333.9 | 333.9 | ||||
Repurchase of 925,425, 792,997 and 2,222,937 shares for treasury for the years ended 2021, 2020 and 2019, respectively | (237.7) | (237.7) | ||||
Issuance of 257,189, 389,102 and 665,380 shares under stock-based compensation plans for the years ended 2021, 2020 and 2019, respectively | 16.4 | 2 | (13.6) | 28 | ||
Contribution of 123,015, 188,229 and 200,742 shares to 401(k) Plan for the years ended 2021, 2020 and 2019, respectively | 22.4 | 13.9 | 8.5 | |||
Dividends of $2.66, $2.36 and $2.26 per share for the years ended 2021, 2020 and 2019, respectively | (189.7) | (189.7) | ||||
Ending balance at Dec. 28, 2019 | 1,204 | 124.1 | 874 | 2,979.1 | (2,425.1) | (348.1) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 555.9 | 555.9 | ||||
Other comprehensive income (loss), net of tax | (1.5) | (1.5) | ||||
Repurchase of 925,425, 792,997 and 2,222,937 shares for treasury for the years ended 2021, 2020 and 2019, respectively | (104.3) | (104.3) | ||||
Issuance of 257,189, 389,102 and 665,380 shares under stock-based compensation plans for the years ended 2021, 2020 and 2019, respectively | 4.9 | (11.9) | (3.4) | 20.2 | ||
Contribution of 123,015, 188,229 and 200,742 shares to 401(k) Plan for the years ended 2021, 2020 and 2019, respectively | 22.7 | 14.5 | 8.2 | |||
Dividends of $2.66, $2.36 and $2.26 per share for the years ended 2021, 2020 and 2019, respectively | (196.8) | (196.8) | ||||
Ending balance at Jan. 02, 2021 | 1,484.9 | 124.1 | 862.1 | 3,349.3 | (2,501) | (349.6) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 740.1 | 740.1 | ||||
Other comprehensive income (loss), net of tax | 66.7 | 66.7 | ||||
Repurchase of 925,425, 792,997 and 2,222,937 shares for treasury for the years ended 2021, 2020 and 2019, respectively | (180.9) | (180.9) | ||||
Issuance of 257,189, 389,102 and 665,380 shares under stock-based compensation plans for the years ended 2021, 2020 and 2019, respectively | 9.6 | 0.2 | (7.2) | 16.6 | ||
Contribution of 123,015, 188,229 and 200,742 shares to 401(k) Plan for the years ended 2021, 2020 and 2019, respectively | 24.6 | 19.1 | 5.5 | |||
Dividends of $2.66, $2.36 and $2.26 per share for the years ended 2021, 2020 and 2019, respectively | (220.6) | (220.6) | ||||
Ending balance at Jan. 01, 2022 | $ 1,924.4 | $ 124.1 | $ 862.3 | $ 3,880.7 | $ (2,659.8) | $ (282.9) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Stock issued under stock-based compensation plans (in shares) | 257,189 | 389,102 | 665,380 |
Stock issued under 401(k) Plan (in shares) | 123,015 | 188,229 | 200,742 |
Dividends per common share (in dollars per share) | $ 2.66 | $ 2.36 | $ 2.26 |
Treasury stock, at cost | |||
Repurchase of shares for treasury (in shares) | 925,425 | 792,997 | 2,222,937 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Operating Activities | |||
Net income | $ 740.1 | $ 555.9 | $ 303.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 167.3 | 154.2 | 140.3 |
Amortization | 76.8 | 51.1 | 38.7 |
Provision for credit losses and sales returns | 35.7 | 64 | 58.7 |
Stock-based compensation | 37.2 | 24 | 34.5 |
Pension plan settlements and related charges | 1.6 | 0.5 | 444.1 |
Deferred taxes and other non-cash taxes | 2.6 | 9.3 | (216.9) |
Other non-cash expense and loss (income and gain), net | 10.1 | 44.9 | 28.3 |
Changes in assets and liabilities and other adjustments: | |||
Trade accounts receivable | (113.2) | 14.7 | (42.2) |
Inventories | (182.7) | (6) | (18.1) |
Accounts payable | 255.2 | (68.2) | 46.4 |
Taxes on income | (7.3) | (35.2) | 5.4 |
Other assets | 4.1 | 18.2 | 38.4 |
Other liabilities | 19.3 | (76.1) | (114.7) |
Net cash provided by operating activities | 1,046.8 | 751.3 | 746.5 |
Investing Activities | |||
Purchases of property, plant and equipment | (255) | (201.4) | (219.4) |
Purchases of software and other deferred charges | (17.1) | (17.2) | (37.8) |
Proceeds from sales of property, plant and equipment | 1.1 | 9.2 | 7.8 |
Proceeds from insurance and sales (purchases) of investments, net | 3.1 | 5.6 | 4.9 |
Proceeds from sale of product line | 7.6 | 0 | 0 |
Payments for acquisitions, net of cash acquired, and investments in businesses | (1,477.6) | (350.4) | (6.5) |
Net cash used in investing activities | (1,737.9) | (554.2) | (251) |
Financing Activities | |||
Net increase (decrease) in borrowings with maturities of three months or less | 259.2 | (110.4) | (5.3) |
Additional borrowings under revolving credit facility | 500 | ||
Repayments of borrowings under revolving credit facility | (500) | ||
Additional long-term borrowings | 791.7 | 493.7 | |
Repayments of long-term debt and finance leases | (13.4) | (270.2) | (18.6) |
Dividends paid | (220.6) | (196.8) | (189.7) |
Share repurchases | (180.9) | (104.3) | (237.7) |
Net (tax withholding) proceeds related to stock-based compensation | (25.4) | (19.7) | (17.4) |
Other | (6.3) | (1.6) | |
Net cash provided by (used in) financing activities | 604.3 | (207.7) | (470.3) |
Effect of foreign currency translation on cash balances | (2.8) | 9.2 | (3.5) |
Increase (decrease) in cash and cash equivalents | (89.6) | (1.4) | 21.7 |
Cash and cash equivalents, beginning of year | 252.3 | 253.7 | 232 |
Cash and cash equivalents, end of year | $ 162.7 | $ 252.3 | $ 253.7 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 01, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Our businesses produce pressure-sensitive materials and a variety of tickets, tags, labels and other converted products. We sell most of our pressure-sensitive materials to label printers and converters that convert the materials into labels and other products through embossing, printing, stamping and die-cutting. Principles of Consolidation Our Consolidated Financial Statements include the accounts of majority-owned and controlled subsidiaries. Intercompany accounts, transactions, and profits are eliminated in consolidation. We apply the equity method of accounting for investments in which we have significant influence but not a controlling interest. Fiscal Year Our fiscal years generally consist of 52 weeks, but every fifth or sixth fiscal year consists of 53 weeks; our 2021 and 2019 fiscal years consisted of 5 2 1 53 2 Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions for the reporting period and as of the date of our financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expense. The business and economic uncertainty caused by the COVID-19 pandemic has made these estimates and assumptions more difficult to determine. As future events and their effect cannot be determined with precision, actual results could differ significantly from those estimates. Cash and Cash Equivalents Cash and cash equivalents generally consist of cash on hand, deposits in banks, cash-in-transit, Inventories We state inventories at the lower of cost or net realizable value and categorized as raw materials, work-in-progress, first-in, first-out to cost of products sold and we establish a lower cost basis for the inventory. Slow-moving inventory is reviewed by category and may be recognized partially or fully to cost of products sold depending on the type of product, level of usage, and length of time the product has been included in inventory. Trade Accounts Receivable We record trade accounts receivable at the invoiced amount. Our allowance for credit losses reflects customer trade accounts receivable that are estimated to be partially or entirely uncollectible. These allowances are used to reduce gross trade receivables to their net realizable values. We record these allowances based on estimates related to the following: • The financial condition of customers; • The aging of receivable balances; • Our historical collection experience; and • Current and expected future macroeconomic and market conditions. Property, Plant and Equipment We generally compute depreciation using the straight-line ten three gain or loss included in net income. Leases Our leases primarily relate to office and warehouse space, machinery, transportation, and equipment for information technology. We determine if an arrangement is a lease or contains a lease at inception. For lease accounting purposes, we do not separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short-term leases. We have options to renew or terminate some of our leases. We evaluate renewal and termination options based on considerations available at the lease commencement date and over the lease term to determine if we are reasonably certain to exercise these options. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. We recognize expense for operating leases using a straight-line basis over the lease term, with variable lease payments recognized in the periods in which they are incurred. Software We capitalize software costs incurred during the application development stage of software development, including costs incurred for design, coding, installation to hardware, testing, and upgrades and enhancements that provide the software or hardware with additional functionalities and capabilities. We expense software costs, including internal and external training costs and maintenance costs, incurred during the preliminary project stage and the post-implementation and/or operation stage. In addition, we capitalize implementation costs incurred under a hosting arrangement that is a service contract. Capitalized software, which is included in “Other assets” in the Consolidated Balance Sheets, is amortized on a straight-line basis over the estimated useful life of the software, which is generally between five Impairment of Long-lived Assets We record impairment charges when the carrying amounts of long-lived assets are determined not to be recoverable. We measure recoverability by comparing the undiscounted cash flows expected from the applicable asset or asset group’s use and eventual disposition to its carrying value. We calculate the amount of impairment loss as the excess of the carrying value over the fair value. Historically, changes in market conditions and management strategy have caused us to reassess the carrying amount of our long-lived assets. Goodwill and Other Intangibles Resulting from Business Acquisitions We account for business combinations using the acquisition method, with the excess of the acquisition cost over the fair value of net tangible assets and identified intangible assets acquired considered goodwill. As a result, we disclose goodwill separately from other intangible assets. Other identifiable intangibles include customer relationships, patented and other developed technology, and trade names and trademarks. We perform an annual impairment test of goodwill during the fourth quarter. Certain factors may cause us to perform an impairment test prior to the fourth quarter, including significant underperformance of a business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, or our decision to divest a portion of a reporting unit. In performing impairment tests, we have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative assessment for goodwill impairment. If the qualitative assessment indicates that it is more-likely-than-not We compare the fair value of each reporting unit to its carrying amount, and, to the extent the carrying amount exceeds the unit’s fair value, we recognize an impairment of goodwill for the excess up to the amount of goodwill of that reporting unit. In consultation with outside specialists, we estimate the fair value of our reporting units using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions about our reporting units, including their respective forecasted sales, operating margins and growth rates, as well as discount rates. Our assumptions about discount rates are based on the weighted average cost of capital for comparable companies. Our assumptions about sales, operating margins and growth rates are based on our forecasts, business plans, economic projections, anticipated future cash flows, and marketplace data. We also make assumptions for varying perpetual growth rates for periods beyond our long-term business plan period. We base our fair value estimates on projected financial information and assumptions that we believe are reasonable. However, actual future results may materially differ from these estimates and projections. The valuation methodology we use to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions. We test indefinite-lived intangible assets, consisting of trade names and trademarks, for impairment in the fourth quarter or whenever events or circumstances indicate that it is more-likely-than-not We amortize finite-lived intangible assets, consisting of customer relationships, patented and other developed technology, trade names and trademarks, and other intangibles, on a straight-line basis over the estimated useful life of the assets. See Note 3, “Goodwill and Other Intangibles Resulting from Business Acquisitions,” for more information. Foreign Currency We translate asset and liability accounts of international operations into U.S. dollars at current rates. Revenues and expenses are translated at the weighted average currency rate for the fiscal year. We record gains and losses resulting from hedging the value of investments in certain international operations and from the translation of balance sheet accounts directly as a component of other comprehensive income. We account for our operations in Argentina as highly inflationary, as the country’s three-year cumulative inflation rate exceeded 100%. As a result, the functional currency of our Argentine subsidiary is the U.S. dollar. Financial Instruments We enter into foreign exchange derivative contracts to reduce our risk from exchange rate fluctuations associated with receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. From time to time, 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 is 36 months for forecasted foreign exchange and commodity transactions and 10 years for cross-currency swap transactions. On the date we enter into a derivative contract, we determine whether the derivative will be designated as a hedge. Derivatives designated as hedges are classified as either (1) hedges of the fair value of a recognized asset or liability or an unrecognized firm commitment (“fair value” hedges) or (2) hedges of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (“cash flow” hedges). Other derivatives not designated as hedges are recorded on the balance sheets at fair value, with changes in fair value recognized in earnings. Our policy is not to purchase or hold any foreign currency, interest rate or commodity contracts for trading purposes. We assess, both at the inception of any hedge and on an ongoing basis, whether our hedges are highly effective. If we determine that a hedge is not highly effective, we prospectively discontinue hedge accounting. For cash flow hedges, we record gains and losses as components of other comprehensive income and reclassify them into earnings in the same period during which the hedged transaction affects earnings. In the event that the anticipated transaction is no longer likely to occur, we recognize the change in fair value of the instrument in current period earnings. We recognize changes in fair value hedges in current period earnings. We also recognize changes in the fair value of underlying hedged items (such as recognized assets or liabilities) in current period earnings and offset the changes in the fair value of the derivative. In the Consolidated Statements of Cash Flows, hedges are classified in the same category as the item hedged, primarily in operating activities. See Note 5, “Financial Instruments,” for more information. Fair Value Measurements We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability. We determine fair value based on a three-tier fair value hierarchy, which we use to prioritize the inputs used in measuring fair value. These tiers consist of Level 1, which are observable inputs such as quoted prices in active markets; Level 2, which are inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which are unobservable inputs in which little or no market data exists, and require us to develop our own assumptions to determine the best estimate of fair value. Revenue Recognition We recognize sales when or as we satisfy a performance obligation by transferring control of a product or service to a customer, in an amount that reflects the consideration to which we expect to be entitled for the product or service. We consider a number of factors in determining when we have transferred control to a customer, including the following: (i) our present right to payment; (ii) the customer’s legal title to the asset; (iii) physical possession of the asset; (iv) the customer’s significant risks and rewards of ownership of the asset; and (v) the customer’s acceptance of the asset. Our payment terms with our customers are generally consistent with those used in the industries and the regions in which we operate. We accept sales returns in certain limited circumstances. We record an estimate for return liabilities and a corresponding reduction to sales, in the amount we expect to repay or credit customers, which we base on historical returns and outstanding customer claims. We update our estimates each reporting period. Sales rebates, discounts, and other customer concessions represent variable consideration and are common in the industries and regions in which we operate, which we account for as a reduction to sales based on estimates at the time at which products are sold. We base these estimates on our historical experience, as well as current information such as sales forecasts. We review our estimates regularly and, as additional information becomes available, we adjust our sales and the respective accruals as necessary. We exclude sales tax, value-added tax, and other taxes we collect from customers from sales. We account for shipping and handling activities after control of a product is transferred to a customer as fulfillment costs and not as separate performance obligations. As a practical expedient, we have elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of less than one year. We generally expense sales commissions when incurred because the amortization period would have been one year or less. We record these costs in “Marketing, general and administrative expense” in the Consolidated Statements of Income. Research and Development Research and development costs are related to research, design and testing of new products and applications, which we expense as incurred. Long-Term Incentive Compensation No long-term incentive compensation expense was capitalized in 2021, 2020 or 2019. Valuation of Stock-Based Awards We base our stock-based compensation expense on the fair value of awards, adjusted for estimated forfeitures, amortized on a straight-line basis over the requisite service period for stock options and restricted stock units (“RSUs”). We base compensation expense for performance units (“PUs”) on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis as these awards cliff-vest at the end of the requisite service period. We base compensation expense related to market-leveraged stock units (“MSUs”) on the fair value of awards, adjusted for estimated forfeitures, and amortized on a graded-vesting basis over their respective performance periods. Compensation expense for awards with a market condition as a performance objective, which includes PUs and MSUs, is not adjusted if the condition is not met, as long as the requisite service period is met. We estimated the fair value of stock options as of the date of grant using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate and expected option term. We determine the fair value of RSUs and the component of PUs that is subject to the achievement of a performance objective using a financial performance condition based on the fair market value of our common stock as of the date of grant, adjusted for foregone dividends. Over the performance period of the PUs, the estimated number of shares of our common stock issuable upon vesting is adjusted upward or downward from the target shares at the time of grant based on the probability of the financial performance objectives established for the award being achieved. We determine the fair value of stock-based awards that are subject to achievement of performance objectives based on a market condition, which includes MSUs and the other component of PUs, using the Monte-Carlo simulation method, which utilizes multiple input variables, including expected stock price volatility and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the target performance objectives established for the award. Certain of these assumptions are based on management’s estimates, in consultation with outside specialists. Significant changes in assumptions for future awards and actual forfeiture rates could materially impact stock-based compensation expense and our results of operations. Valuation of Cash-Based Awards Cash-based awards consist of long-term incentive units (“LTI Units”) granted to eligible employees. We classify LTI Units as liability awards and remeasure them at each quarter-end Forfeitures We estimate expected forfeitures in determining the compensation cost to be recognized each period, rather than accounting for forfeitures as they occur. We record changes in estimated forfeiture rates as cumulative adjustments in the period estimates are revised. See Note 12, “Long-term Incentive Compensation,” for more information. Taxes Based on Income We are subject to income tax in the U.S. and multiple foreign jurisdictions, whereby judgment is required in evaluating and estimating our worldwide provision, accruals for taxes, deferred taxes and for evaluating our tax positions. Our provision for income taxes is determined using the asset and liability approach in accordance with GAAP. Under this approach, deferred taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets when uncertainty regarding their realizability exists. We recognize and measure our uncertain tax positions following the more-likely-than-not See Note 14, “Taxes Based on Income,” for more information. Recent Accounting Requirements In November 2021, the Financial Accounting Standards Board (“FASB”) issued an accounting guidance update that requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. This guidance is effective for our annual disclosures for our fiscal year beginning January 2, 2022. We are currently assessing the impact of this guidance on our disclosures. In October 2021, the FASB issued an accounting guidance update that requires entities to recognize and measure contract assets and liabilities acquired in a business combination in accordance with revenue recognition guidance. The update will generally result in an entity recognizing contract assets and liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than fair value. This guidance is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We will adopt this guidance at the beginning of our fiscal year on January 2, 2022. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Jan. 01, 2022 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 2. ACQUISITIONS Vestcom Acquisition On August 31, 2021, we completed our acquisition of CB Velocity Holdings, LLC (“Vestcom”), an Arkansas-based provider of shelf-edge pricing, productivity and consumer engagement solutions for retailers and consumer packaged goods companies, for purchase consideration We believe Vestcom’s solutions expand our position in high value categories while adding channel access and data management capabilities to our Retail Branding and Information Solutions (“RBIS”) reportable segment. The table below summarizes the preliminary fair value of assets acquired and liabilities assumed in the Vestcom acquisition. (In millions) Cash and cash equivalents $ 24.3 Trade accounts receivable 98.7 Other current assets 28.5 Property, plant and equipment 56.3 Goodwill 756.6 Other intangibles resulting from business acquisition 727.0 Other assets 22.7 Total assets 1,714.1 Current liabilities 47.5 Other liabilities 17.2 Deferred and non-current income tax liabilities 184.3 Total liabilities 249.0 Net assets acquired $ 1,465.1 The final allocation of purchase consideration to assets and liabilities is ongoing as we continue to evaluate certain balances, estimates and assumptions during the measurement period (up to one year from the acquisition date). Consistent with the allowable time to complete our assessment, the valuation of certain acquired assets and liabilities, including environmental liabilities and income taxes, is currently pending finalization. The impact of the Vestcom acquisition was not material to the proforma net sales or net income of our combined operations for the periods presented. Net sales and net income related to Vestcom post-acquisition were not material to the Consolidated Statements of Income for the periods presented. Other 2021 Acquisitions On March 18, 2021, we completed our acquisition of the net assets of ZippyYum, LLC (“ZippyYum”), a California-based developer of software products used in the food service and food preparation industries. We believe this acquisition enhances the product portfolio in our RBIS reportable segment. On March 1, 2021, we completed our acquisition of the issued and outstanding stock of JDC Solutions, Inc. (“JDC”), a Tennessee-based manufacturer of pressure-sensitive specialty tapes. We believe that this acquisition expands the product portfolio in our Industrial and Healthcare Materials (“IHM”) reportable segment. The acquisitions of ZippyYum and JDC are referred to collectively as the “Other 2021 Acquisitions.” The aggregate purchase consideration for the Other 2021 Acquisitions was approximately $43 million. We funded the Other 2021 Acquisitions using cash and commercial paper borrowings. In addition to the cash paid at closing, the sellers in one of these acquisitions are eligible for earn-out As of the acquisition date, we d earn-out The Other 2021 Acquisitions were not material, individually or in the aggregate, to the Consolidated Financial Statements. 2020 Acquisitions On December 31, 2020, we completed our acquisition of ACPO, Ltd. (“ACPO”), an Ohio-based manufacturer of self-wound (linerless) pressure-sensitive overlaminate products, for consideration of approximately $88 million. We Labels and Graphic Materials (“ LGM ”) reportable segment. On February 28, 2020, we completed our acquisition of Smartrac’s Transponder (RFID Inlay) division (“Smartrac”), a manufacturer of RFID products, for consideration of approximately $255 million ( € We believe this acquisition enhances our research and development capabilities, expands our product lines and provides additional manufacturing capacity. Results for Smartrac’s operations were included in our RBIS reportable segment. These acquisitions (the “2020 Acquisitions”) were not material, individually or in the aggregate, to the |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | 12 Months Ended |
Jan. 01, 2022 | |
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | |
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | NOTE 3. GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS Goodwill Results from our annual goodwill impairment test in the fourth quarter of 2021 indicated that no impairment occurred during 2021. The assumptions used in our assessment of these assets were primarily based on Level 3 inputs. Changes in the net carrying amount of goodwill for 2021 and 2020 by reportable segment were as follows: (In millions) Label and Retail Branding Industrial and Total Goodwill as of December 28, 2019 $ 407.8 $ 349.3 $ 173.7 $ 930.8 Acquisitions (1) 45.8 112.7 – 158.5 Translation adjustments 27.3 9.8 10.0 47.1 Goodwill as of January 2, 2021 480.9 $ 471.8 $ 183.7 $ 1,136.4 Acquisitions (2) – 774.5 6.9 781.4 Acquisition adjustment (3) 1.2 – – 1.2 Translation adjustments (25.7 ) (10.3 ) (1.5 ) (37.5 ) Goodwill as of January 1, 2022 $ 456.4 $ 1,236.0 $ 189.1 $ 1,881.5 (1) Goodwill acquired in 2020 related to the acquisitions of Smartrac, which is included in our RBIS reportable segment, and ACPO, which is included in our LGM reportable segment. We expect the recognized goodwill related to the Smartrac acquisition not to be deductible for income tax purposes and the recognized goodwill related to the ACPO acquisition to be deductible for income tax purposes. (2) Goodwill acquired related to the acquisitions of Vestcom, JDC and ZippyYum. We expect nearly all of the recognized goodwill related to the Vestcom and JDC acquisitions not to be deductible for income tax purposes and the recognized goodwill related to the ZippyYum acquisition to be deductible for income tax purposes. (3) Measurement period adjustment related to the finalization of the purchase price allocation for the acquisition of ACPO completed in December 2020. The carrying amounts of goodwill at January 1, 2022 and January 2, 2021 were net of accumulated impairment losses of $820 million recognized in fiscal year 2009 by our RBIS reportable segment. Indefinite-Lived Intangible Assets In connection with our acquisition of Vestcom, we acquired approximately $135 million of identifiable indefinite lived intangible assets consisting of trade names and trademarks. We utilized the income approach to estimate the fair values of acquired identifiable intangibles, primarily using Level 3 inputs. We applied significant judgment in determining the fair value of intangible assets, which included our estimates and assumptions with respect to estimated future revenue and related profit margins, royalty rates, discount rates, and economic lives assigned to the acquired intangible assets. Results from our annual indefinite-lived intangible assets impairment test in the fourth quarter indicated that no impairment occurred in 2021. The carrying value of indefinite-lived intangible assets resulting from business acquisitions, consisting of trade names and trademarks, was $155.6 million and $22.2 million at January 1, 2022 and January 2, 2021, respectively. Finite-Lived Intangible Assets In connection with our acquisition of Vestcom, we acquired approximately $592 million of identifiable finite-lived intangible assets, which consisted of customer relationships and patented and other developed technology. We utilized the income approach to estimate the fair values of acquired identifiable intangibles, primarily using Level 3 inputs. We applied significant judgment in determining the fair value of intangible assets, which included our estimates and assumptions with respect to estimated future revenue and related profit margins, customer retention rates, technology migration curves, royalty rates, discount rates, and economic lives assigned to the acquired intangible assets. The table below summarizes the amounts and useful lives of these intangible assets as of the acquisition date. Amount (in millions) Amortization Customer relationships $ 492.0 12 Patented and other developed technology 100.4 7 The intangible assets from the Other 2021 Acquisitions were not material to the Consolidated Financial Statements. In connection with the 2020 Acquisitions, we acquired approximately $106 million of identifiable finite-lived intangible assets, which consisted of customer relationships, trade names and trademarks and patented and other developed technology. We utilized the income and cost approaches to estimate the fair values of acquired identifiable intangibles, primarily using Level 3 inputs. The table below summarizes the amounts and weighted average Amount (in millions) Weighted average Patented and other developed technology $ 62.5 11 Customer relationships 41.4 7 Trade names and trademarks 2.2 5 The table below sets forth our finite-lived intangible assets resulting from business acquisitions at January 1, 2022 and January 2, 2021, which continue to be amortized. 2021 2020 (In millions) Gross Accumulated Net Gross Accumulated Net Customer relationships $ 862.5 $ 277.2 $ 585.3 $ 373.3 $ 254.1 $ 119.2 Patented and other developed technology 247.7 84.7 163.0 147.3 69.8 77.5 Trade names and trademarks 14.8 9.7 5.1 28.2 22.2 6.0 Other intangibles 3.2 .8 2.4 .2 .2 – Total $ 1,128.2 $ 372.4 $ 755.8 $ 549.0 $ 346.3 $ 202.7 Amortization expense for finite-lived intangible assets resulting from business acquisitions was $44.6 million for 2021, $19.9 million for 2020 and $13.5 million for 2019. We expect estimated amortization expense for finite-lived intangible assets resulting from business acquisitions for each of the next five fiscal years to be as follows: (In millions) Estimated 2022 $ 43.5 2023 42.5 2024 40.8 2025 40.0 2026 36.9 |
DEBT
DEBT | 12 Months Ended |
Jan. 01, 2022 | |
DEBT | |
DEBT | NOTE 4. DEBT Short-Term Borrowings We had $189 1, 2022 and no outstanding borrowings from U.S. commercial paper as of January 2, 2021. We have a Euro-Commercial Paper Program under which we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $500 million. Proceeds from issuances under this program may be used for general corporate purposes. The maturities of the notes vary, but may not exceed 364 days from the date of issuance. Our payment obligations with respect to any notes issued under this program are backed by our $800 million revolving credit facility (the “Revolver”). There are no financial covenants under this program. We had balance s Short-Term Credit Facilities In February 2020, we amended and restated the Revolver, eliminating one of the financial covenants and extending its maturity date to February 13, 2025. The maturity date may be further extended for a one-year up to $400 million, back-up and for other corporate purposes. No balance was outstanding under the Revolver as of January 1, 2022 or January 2, 2021. Commitment fees associated with the Revolver in 2021, 2020 and 2019 were $.9 million, $.8 million and $1.2 million, respectively. In addition to the Revolver, we have short-term lines of credit available in various countries of approximately $358 million in the aggregate at January 1 2 these 11.2 million and $ 22.2 million at January 1 2 January 2, 2021 , respectively, with weighted average interest rate s From time to time, we provide guarantees on certain arrangements with banks. Our exposure to these guarantees is not material. Long-Term Borrowings In August 2021, we issued $500 million of senior notes, due February 15, 2032, which bear an interest rate of 2.250%, payable semiannually in arrears. Our net proceeds from th is we can repay is In March 2020, we issued $500 million of senior notes, due April 2030. These senior notes bear an interest rate of 2.65% per year, payable semiannually in arrears. Our net proceeds from the issuance, after deducting underwriting discounts and offering expenses, were $493.7 million, which we used to repay both existing indebtedness under our commercial paper program used to fund our Smartrac acquisition and our $250 million of senior notes that matured in April 2020. Our long year-end (In millions) 2021 2020 Long-term debt Medium-term notes: Series 1995 due 2020 and 2025 $ 30.0 $ 30.0 Long-term notes: Senior notes due 2023 at 3.4% 249.5 249.3 Senior notes due 2024 at 0.85% 298.3 – Senior notes due 2025 at 1.25% (1) 563.3 612.1 Senior notes due 2028 at 4.875% 495.3 494.6 Senior notes due 2030 at 2.650% 494.8 494.2 Senior notes due 2032 at 2.25% 493.9 – Senior notes due 2033 at 6.0% 149.1 149.0 Less amount classified as current – – Total long-term debt (2) $ 2,774.2 $ 2,029.2 (1) These senior notes are euro-denominated. (2) Includes unamortized debt issuance cost s s year-end year-end At year-end We expect maturities of our long-term debt for each of the next five fiscal years and thereafter to be as follows: Year (In millions) 2022 $ – 2023 250.0 2024 300.0 2025 595.3 2026 – 2027 and thereafter 1,650.0 Refer to Note 7, “Commitments and Leases,” for information related to finance leases. Other Prior to its amendment and restatement in February 2020, the Revolver contained financial covenants requiring that we maintain specified ratios of total debt and interest expense in relation to certain measures of income. In February 2020, one of the financial covenants was eliminated. The remaining financial covenant requires us t o maintain a specified ratio of total debt in relation to a certain measure of income. As of January 1, 2022 and January 2, 2021, we were in compliance with our financial covenants. Our total interest costs in 2021, 2020 and 2019 were $75 million, $73.9 million and $81.1 million, respectively, of which $4.8 million, $3.9 million and $5.3 million, respectively, was capitalized as part of the cost of property, plant and equipment and capitalized software. The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities or euro government bond securities, as applicable, on notes with similar rates, credit ratings and remaining maturities. The fair value of short-term borrowings, which includes commercial paper issuances and short-term lines of credit, approximates their carrying value given their short duration. The fair value of our total debt was $3.25 billion at January 1, 2022 and $2.34 billion at January 2, 2021. Fair value amounts were determined based primarily on Level 2 inputs, which are inputs other than quoted prices in active markets that are either directly or indirectly observable. Refer to Note 1, “Summary of Significant Accounting Policies,” for more information. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Jan. 01, 2022 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | NOTE 5. FINANCIAL INSTRUMENTS As of January 1, 2022, the aggregate U.S. dollar equivalent notional value of our outstanding commodity contracts and foreign exchange contracts was $3.5 million and $1.67 billion, respectively. We recognize derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. We designate commodity forward contracts on forecasted purchases of commodities and foreign exchange contracts on forecasted transactions as cash flow hedges. We also enter into foreign exchange contracts to offset certain of our economic exposures arising from foreign exchange rate fluctuations. 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 these derivatives, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in current earnings. Except for the cross-currency swap discussed below, cash flow hedges were not material in 2021, 2020 or 2019. Cross-Currency Swap Following our Smartrac acquisition and issuance of senior notes in March 2020, we entered into U.S. dollar to euro cross-currency swap contracts with a total notional amount of $250 million to have the effect of converting the fixed-rate U.S. dollar-denominated debt in . The these contracts was $(10.3) million and $(36.7) million as of January 1, 2022 and January 2, 2021, respectively, and included in “Long-term retirement benefits and other liabilities” in the Consolidated Balance Sheets. Refer to Note 9, “Fair Value Measurements,” to the Consolidated Financial Statements for more information. We recorded no ineffectiveness from our cross-currency swap to earnings during 2021 or 2020. Other Derivatives The following table shows the fair value and balance sheet locations of other derivatives as of January 1, 2022 and January 2, 2021: Asset Liability (In millions) Balance Sheet Location 2021 2020 Balance Sheet Location 2021 2020 Foreign exchange contracts Other current assets $ 6.3 $ 5.1 Other current liabilities $ 2.9 $ 8.4 Commodity contracts Other current assets – .1 Other current liabilities – .1 $ 6.3 $ 5.2 $ 2.9 $ 8.5 For other derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings. The following table shows the components of the net gains (losses) recognized in income related to these derivative instruments: (In millions) Statements of Income Location 2021 2020 2019 Foreign exchange contracts Cost of products sold $ 1.4 $ 1.9 $ (1.5 ) Foreign exchange contracts Marketing, general and administrative expense 21.0 (14.2 ) 3.5 $ 22.4 $ (12.3 ) $ 2.0 |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended |
Jan. 01, 2022 | |
Retirement Benefits [Abstract] | |
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 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 have been included in the disclosures below. In 2019, we terminated and settled the Avery Dennison Pension Plan (the “ADPP”), a U.S. defined benefit plan. In connection with this termination, we settled approximately $753 million of ADPP liabilities by entering into an agreement to purchase annuities primarily from American General Life Insurance Company and through a combination of annuities and direct funding to the Pension Benefit Guaranty Corporation for a small portion of former employees and their beneficiaries. These settlements resulted in approximately $444 million of pretax charges in 2019, partially offset by related tax benefits of approximately $179 million. Plan Assets Assets in our international plans are invested in accordance with locally accepted practices and primarily include equity securities, fixed income securities, insurance contracts and cash. Asset allocations and investments vary by country and plan. Our target plan asset investment allocation for our international plans in the aggregate is approximately % in equity securities, % in fixed income securities and cash, and % in insurance contracts and other investments, subject to periodic fluctuations among these asset classes . Fair Value Measurements The valuation methodologies we use for assets measured at fair value are described below. Cash is valued at nominal value. Cash equivalents and mutual funds are valued at fair value as determined by quoted market prices, based upon the net asset value (“NAV”) of shares held at year-end. - These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While we believe these valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following table sets forth, by level within the fair value hierarchy (as applicable), international plan assets at fair value: Fair Value Measurements Using (In millions) Total Quoted (Level 1) Significant Significant 2021 Cash $ 10.1 $ 10.1 $ – $ – Insurance contracts 37.9 – – 37.9 Pooled funds – real estate investment trusts 11.0 – – 11.0 Pooled funds – fixed income securities (1) 464.4 Pooled funds – equity securities (1) 302.8 Pooled funds – other investments (1) 48.4 Total international plan assets at fair value $ 874.6 2020 Cash $ 3.8 $ 3.8 $ – $ – Insurance contracts 41.2 – – 41.2 Pooled funds – fixed income securities (1) 469.9 Pooled funds – equity securities (1) 332.8 Pooled funds – other investments (1) 49.5 Total international plan assets at fair value $ 897.2 (1) Pooled funds that are measured at fair value using the NAV per unit The following table presents a reconciliation of Level 3 international plan asset activity during the year ended January 1, 2022: Level 3 Assets (In millions) Insurance Contracts Pooled Funds – Total Balance at January 2, 2021 $ 41.2 $ – $ 41.2 Net realized and unrealized gain .7 – .7 Purchases 3.3 – 3.3 Settlements (4.6 ) – (4.6 ) Transfers into Level 3 (1) – 11.0 11.0 Impact of changes in foreign currency exchange rates (2.7 ) – (2.7 ) Balance at January 1, 2022 $ 37.9 $ 11.0 $ 48.9 (1) Transfers into Level 3 were primarily driven by the use of unobservable inputs in the pricing of the underlying assets. As a result of the ADPP settlements, there were no U.S. plan assets remaining as of January 1, 202 2 Plan Assumptions Discount Rate In consultation with our actuaries, we annually review and determine the discount rates used to value our pension and other postretirement obligations. The assumed discount rate for each pension plan reflects market rates for high quality corporate bonds currently available. Our discount rate is determined by evaluating yield curves consisting of large populations of high quality corporate bonds. The projected pension benefit payment streams are then matched with bond portfolios to determine a rate that reflects the liability duration unique to our plans. We use the full yield curve approach to estimate the service and interest cost components of net periodic benefit cost for our pension and other postretirement benefit plans. Under this approach, we apply multiple discount rates from a yield curve composed of the rates of return on several hundred high-quality, fixed income corporate bonds available at the measurement date. We believe that this approach provides a more precise measurement of service and interest cost by aligning the timing of a plan’s liability cash flows to its corresponding rates on the yield curve. Long-term Return on Assets We determine the long-term rate of return assumption for plan assets by reviewing the historical and expected returns of both the equity and fixed income markets, taking into account our asset allocation, the correlation between returns in our asset classes, and our mix of active and passive investments. Additionally, we evaluate current market conditions, including interest rates, and review market data for reasonableness and appropriateness. Measurement Date We measure the actuarial value of our benefit obligations and plan assets using the calendar month-end year-end year-end. Plan Balance Sheet Reconciliations The following table provides a reconciliation of benefit obligations, plan assets, funded status of the plans and accumulated other comprehensive loss for our defined benefit plans: Plan Benefit Obligations Pension Benefits 2021 2020 (In millions) U.S. Int’l U.S. Int’l Change in projected benefit obligations Projected benefit obligations at beginning of year $ 77.3 $ 953.9 $ 75.7 $ 811.7 Service cost – 19.0 – 17.8 Interest cost 1.0 8.9 1.8 11.0 Participant contribution – 4.7 – 3.7 Amendments – (.9 ) – .4 Actuarial (gain) loss (1.7 ) (15.6 ) 7.1 53.5 Benefits paid (9.8 ) (23.3 ) (7.3 ) (21.1 ) Settlements – (3.7 ) – (2.4 ) Foreign currency translation – (60.6 ) – 79.3 Projected benefit obligations at end of year $ 66.8 $ 882.4 $ 77.3 $ 953.9 Accumulated benefit obligations at end of year $ 66.8 $ 806.4 $ 77.3 $ 883.6 Plan Assets Pension Benefits 2021 2020 (In millions) U.S. Int’l U.S. Int’l Change in plan assets Plan assets at beginning of year $ – $ 897.2 $ – $ 734.4 Actual return on plan assets – 37.3 – 91.5 Employer contributions 9.8 20.7 7.3 17.2 Participant contributions – 4.7 – 3.7 Benefits paid (9.8 ) (23.3 ) (7.3 ) (21.1) Settlements – (3.7 ) – (2.4) Foreign currency translation – (58.3 ) – 73.9 Plan assets at end of year $ – $ 874.6 $ – $ 897.2 Funded Status Pension Benefits 2021 2020 (In millions) U.S. Int’l U.S. Int’l Funded status of the plans Other assets $ – $ 113.6 $ – $ 92.4 Other accrued liabilities (7.0 ) (1.0 ) (9.1 ) (1.5 ) Long-term retirement benefits and other liabilities (1) (59.8 ) (120.4 ) (68.2 ) (147.6 ) Plan assets less than benefit obligations $ (66.8 ) $ (7.8 ) $ (77.3 ) $ (56.7 ) (1) In accordance with our funding strategy, we have the option to fund certain of our U.S. liabilities with proceeds from our company-owned life insurance policies. Pension Benefits 2021 2020 U.S. Int’l U.S. Int’l Weighted average assumptions used to determine year-end Discount rate 2.49 % 1.57 % 2.02 % 1.26 % Compensation rate increase – 2.33 – 2.15 For U.S. and international plans combined, the projected benefit obligations and fair value s year-end year-end For U.S. and international plans combined, the accumulated benefit obligations and fair value s year-end mi year-end Accumulated Other Comprehensive Loss The following table shows the pre-tax Pension Benefits 2021 2020 (In millions) U.S. Int’l U.S. Int’l Net actuarial loss $ 15.6 $ 41.5 $ 18.2 $ 83.3 Prior service (credit) cost – (4.0 ) – (3.9 ) Net amount recognized in accumulated other comprehensive loss $ 15.6 $ 37.5 $ 18.2 $ 79.4 The following table shows the pre-tax Pension Benefits 2021 2020 2019 (In millions) U.S. Int’l U.S. Int’l U.S. Int’l Net actuarial loss (gain) $ (.7 ) $ (34.8 ) $ 3.5 $ (13.5 ) $ (44.6 ) $ (42.7) Prior service credit – (.9 ) – .4 – 1.8 Amortization of unrecognized: Net actuarial gain (.8 ) (6.1 ) (.6 ) (5.2 ) (.5 ) (4.0) Prior service credit (cost) – .4 – .4 – .4 Settlements (1.1 ) (.5 ) (.2 ) (.3 ) (442.8 ) (.6 ) Net amount recognized in other comprehensive loss (income) $ (2.6 ) $ (41.9 ) $ 2.7 $ (18.2 ) $ (487.9 ) $ (45.1 ) Plan Income Statement Reconciliations The following table shows the components of net periodic benefit cost, which are recorded in net income for our defined benefit plans: Pension Benefits 2021 2020 2019 (In millions) U.S. Int’l U.S. Int’l U.S. Int’l Service cost $ – $ 19.0 $ – $ 17.8 $ – $ 15.6 Interest cost 1.0 8.9 1.8 11.0 2.7 14.8 Actuarial loss (gain) (1.1 ) – 3.7 – 2.5 – Expected return on plan assets – (19.8 ) – (18.5 ) – (21.0 ) Amortization of actuarial loss .8 6.1 .6 5.2 .5 4.0 Amortization of prior service (credit) cost – (.4 ) – (.4 ) – (.4 ) Recognized loss on settlements (1) 1.1 .5 .2 .3 443.5 .6 Net periodic benefit cost (credit) $ 1.8 $ 14.3 $ 6.3 $ 15.4 $ 449.2 $ 13.6 (1) In 2021, settlements in the U.S. related to a non-qualified lump-sum Service cost and components of net periodic benefit cost other than service cost were included in “Marketing, general and administrative expense” and “Other non-operating The following table shows the weighted average assumptions used to determine net periodic cost: Pension Benefits 2021 2020 2019 U.S. Int’l U.S. Int’l U.S. Int’l Discount rate 2.20 % 1.26 % 2.89 % 1.66 % 3.73 % 2.39 % Expected return on assets – 2.61 – 2.79 – 3.38 Compensation rate increase – 2.15 – 2.21 – 2.23 Plan Contributions We make contributions to our defined benefit plans sufficient to meet the minimum funding requirements of applicable laws and regulations, plus additional amounts, if any, we determine to be appropriate. The following table sets forth our expected contributions in 2022: (In millions) U.S. pension plans $ 7.1 International pension plans 13.5 Future Benefit Payments The future benefit payments shown below reflect the expected service periods for eligible participants. Pension (In millions) U.S. Int’l 2022 $ 7.1 $ 20.1 2023 6.3 22.5 2024 6.1 23.6 2025 6.1 22.2 2026 5.9 27.1 2027-2031 22.5 138.5 Postretirement Health Benefits We provide postretirement health benefits to certain of our retired U.S. employees up to the age of 65 under a cost-sharing arrangement and provide supplemental Medicare benefits to certain of our U.S. retirees over the age of 65. Our new eligible participants retiring after December 31, 2021. Our policy is to fund the cost of these postretirement benefits from operating cash flows. While we do not intend to terminate these postretirement health benefits, we may do so at any time, subject to applicable laws and regulations. At year-end $ million and approximately $ million, respectively. At year-end , our postretirement health benefits obligation and related loss recorded in “Accumulated other comprehensive loss” were approximately $ million and approximately $ million, respectively. Net periodic benefit cost was not material in , or . Defined Contribution Plans We sponsor various defined contribution plans worldwide, the largest of which is the Avery Dennison Corporation Employee Savings Plan (“Savings Plan”), a 401(k) plan for our U.S. employees. We recognized expense of $24.6 million, $22.7 million and $22.4 million in 2021, 2020 and 2019, respectively, related to our employer contributions and employer match of participant contributions to the Savings Plan. Other Retirement Plans We have deferred compensation plans and programs that permit eligible employees and directors to defer a portion of their compensation. The compensation voluntarily deferred by the participant, together with certain employer contributions, earns specified and variable rates of return. As of year-end other than by reason of death or disability. Our Directors Deferred Equity Compensation Program allows our non-employee for both year-end We hold company-owned life insurance policies, the proceeds from which are payable to us upon the death of covered participants. The cash surrender values of these policies, net of outstanding loans, which are included in “Other assets” in the Consolidated Balance Sheets, were $272.2 million and $254.8 million at year-end |
COMMITMENTS AND LEASES
COMMITMENTS AND LEASES | 12 Months Ended |
Jan. 01, 2022 | |
Leases [Abstract] | |
COMMITMENTS AND LEASES | NOTE 7. COMMITMENTS AND LEASES Supplemental cost information related to leases is shown below. (In millions) 2021 2020 2019 Operating lease costs $ 68.8 $ 63.1 $ 65.4 Lease costs related to finance leases were not material in 2021, 2020 or 2019. Supplemental balance sheet information related to leases is shown below. (In millions) Balance Sheet Location 2021 2020 Assets Operating Other assets $ 183.0 $ 161.3 Finance (1) Property, plant and equipment, net 28.9 38.2 Total leased assets $ 211.9 $ 199.5 Liabilities Current: Operating Other current liabilities $ 47.3 $ 44.3 Finance Short-term borrowings and current portion of long-term debt and finance leases 5.5 5.6 Non-current: Operating Long-term retirement benefits and other liabilities 135.3 116.0 Finance Long-term debt and finance leases 11.7 22.9 Total lease liabilities $ 199.8 $ 188.8 (1) Finance lease assets are net of accumulated amortization of $10.4 million and $8.3 million as of January 1, 2022 and January 2, 2021, respectively. Supplemental cash flow information related to leases is shown below. (In millions) 2021 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 54.2 $ 54.9 $ 53.1 Operating lease assets obtained in exchange for operating lease liabilities 58.0 48.4 32.6 Cash flows related to finance leases were not material in 2021, 2020 or 2019. Weighted average remaining lease term and discount rate information related to leases as of January 1, 2022 is shown below. 2021 2020 Weighted average remaining lease term (in years): Operating 6.5 6.2 Finance 3.3 3.2 Weighted average discount rate (percentage): Operating 3.0 % 4.3 % Finance 2.9 2.9 Operating and finance lease liabilities by maturity date from January 1, 2022 are shown below. (In millions) Operating Leases Finance Leases 2022 $ 51.5 $ 6.1 2023 40.1 5.3 2024 29.8 5.0 2025 22.9 1.7 2026 14.4 .2 2027 and thereafter 45.7 – Total lease payments 204.4 18.3 Less: imputed interest (21.8 ) (1.1 ) Present value of lease liabilities $ 182.6 $ 17.2 As of January 1, 2022, we had no significant operating or finance leases that had not yet commenced. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Jan. 01, 2022 | |
Contingencies | |
CONTINGENCIES | NOTE Legal Proceedings We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. We are currently party to a litigation in which ADASA Inc. (“Adasa”), an unrelated third party, alleged that certain of our radio-frequency identification (“RFID”) products infringed on its patent. We recorded a contingent liability related to this matter in the second quarter of 2021 in the amount of $26.6 million based on a jury verdict issued on May 14, 2021. During the third quarter of 2021, the first instance judgment associated with the jury verdict was issued. This resulted in additional potential liability of $35.8 million for, among other things, royalties on a higher number of tags and royalties on tags sold after March 31, 2021. We did not increase the contingent liability we recorded for this additional potential liability. With continued evaluation of the matter and our defenses, as well as consultation with our outside counsel, we continue to believe that Adasa’s infringed it, and that the royalty rate used as the basis for the jury’s determination is unreasonable under prevailing industry standards, as well as that any liability related to this matter would be substantially lower than that which is reflected in either the jury verdict or the first instance judgment. On October 22, 2021, we appealed the judgment to the United States Court of Appeals for the Federal Circuit and continue to believe meritorious defenses exist to significantly reduce the liability we currently have recorded. As our appeal is still pending, we maintained our current contingent liability of $26.6 million for this matter as a reasonable estimate within the range of probable outcomes. We have largely completed our migration to alternative encoding methods used in our other RFID tags. 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 determined to be probable in an amount higher or lower than what we have accrued, we would adjust our accrued liabilities accordingly. Additional lawsuits, claims, inquiries, and other regulatory and compliance matters could arise in the future. The range of expenses for resolving any future matters would be assessed as they arise; until then, a range of potential expenses for such resolution cannot be determined. Based upon current information, we believe that the impact of the resolution of these matters would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows. Environmental Expenditures Environmental expenditures are generally expensed. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these matters could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. We review our estimates of the costs of complying with environmental laws related to remediation and cleanup of various sites, including sites in which governmental agencies have designated us as a potentially responsible party (“PRP”). Environmental expenditures for newly acquired assets and those that extend or improve the economic useful life of existing assets are capitalized and amortized over the shorter of the estimated useful life of the acquired asset or the remaining life of the existing asset. As of January 1, 2022, we have been designated by the U.S. Environmental Protection Agency (“EPA”) and/or other responsible state agencies as a PRP at twelve waste disposal or waste recycling sites that are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination. No settlement of our liability related to any of these sites has been agreed upon. We are participating with other PRPs at these sites and anticipate that our share of remediation costs will be determined pursuant to agreements that we negotiate with the EPA or other governmental authorities. These estimates could change as a result of changes in planned remedial actions, remediation technologies, site conditions, the estimated time to complete remediation, environmental laws and regulations, and other factors. Because of the uncertainties associated with environmental assessment and remediation activities, our 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 determined to be probable 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 related to our environmental liabilities in 2021 and 2020 was as follows: (In millions) 2021 2020 Balance at beginning of year $ 21.1 $ 21.4 Charges, net of reversals 2.9 3.0 Payments (2.1 ) (3.3 ) Balance at end of year $ 21.9 $ 21.1 Approximately $2 million and $9 million, respectively, of the balance was classified as short-term and included in “Other current liabilities” in the Consolidated Balance Sheets as of January 1, 2022 and January 2, 2021. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jan. 01, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 9. FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of January 1, 2022: Fair Value Measurements Using (In millions) Total Quoted Significant (Level 2) Significant Assets Investments $ 33.9 $ 27.1 $ 6.8 $ – Derivative assets 7.1 .6 6.5 – Bank drafts 14.1 14.1 – – Liabilities Cross-currency swap $ 10.3 $ – $ 10.3 $ – Derivative liabilities 3.6 – 3.6 – Contingent consideration liabilities 7.6 – – 7.6 The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of Fair Value Measurements Using (In millions) Total Quoted Significant (Level 2) Significant ( Assets Investments $ 33.6 $ 27.4 $ 6.2 $ – Derivative assets 5.2 .1 5.1 – Bank drafts 12.8 12.8 – – Liabilities Cross-currency swap $ 36.7 $ – $ 36.7 $ – Derivative liabilities 9.5 .3 9.2 – Investments include fixed income securities (primarily U.S. government and corporate debt securities) measured at fair value using quoted prices/bids and a money market fund measured at fair value using NAV. As of January 1, 2022, investments of $.5 million and $33.4 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the Consolidated Balance Sheets. As of January 2, 2021, investments of $1 million and $32.6 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the Consolidated Balance Sheets. Derivatives that are exchange-traded are measured at fair value using quoted market prices and classified within Level 1 of the valuation hierarchy. Derivatives measured based on foreign exchange rate inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy. Bank drafts (maturities greater than three months) are valued at face value due to their short-term nature and were included in “Other current assets” in the Consolidated Balance Sheets. Contingent consideration liabilities relate to estimated earn-out payments associated with one of the Other 2021 Acquisitions. These payments are based on the acquired company’s achievement of certain performance targets based on the terms of the purchase agreement, and our estimates are based on the expected payments related to these targets. We have classified these liabilities as Level 3. As of January 1, 2022, contingent consideration liabilities of approximately $2 million and $6 million were included in “Other current liabilities” and “Long-term retirement benefits and other liabilities,” respectively, in the Consolidated Balance Sheets. The activity related to contingent consideration in 2021 is shown below. (In millions) Acquisition $ 11.6 Payments (2.6 ) Adjustments (1.4 ) Balance at year end $ 7.6 In addition to the investments described |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 12 Months Ended |
Jan. 01, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE | NOTE 10. NET INCOME PER COMMON SHARE Net income per common share was computed as follows: (In millions, except per share amounts) 2021 2020 2019 (A) Net income $ 740.1 $ 555.9 $ 303.6 (B) Weighted average number of common shares outstanding 82.9 83.4 84.0 Dilutive shares (additional common shares issuable under stock-based awards) .9 .7 1.0 (C) Weighted average number of common shares outstanding, assuming dilution 83.8 84.1 85.0 Net income per common share (A) ÷ (B) $ 8.93 $ 6.67 $ 3.61 Net income per common share, assuming dilution (A) ÷ (C) $ 8.83 $ 6.61 $ 3.57 Certain stock-based compensation awards were not included in the computation of net income per common share, assuming dilution, because they would not have had a dilutive effect. Stock-based compensation awards excluded from the computation were not significant in 2021, 2020 or 2019. |
SUPPLEMENTAL EQUITY AND COMPREH
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | 12 Months Ended |
Jan. 01, 2022 | |
Stockholders' Equity Note [Abstract] | |
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION | NOTE 11. SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION Common Stock and Share Repurchase Program Our Amended and Restated Certificate of Incorporation authorizes five million shares of $1 par value preferred stock (of which no shares are outstanding), with respect to which our Board may fix the series and terms of issuance, and 400 million shares of $1 par value voting common stock. From time to time, our Board authorizes the repurchase of shares of our outstanding common stock. Repurchased shares may be reissued under our long-term incentive plan or used for other corporate purposes. In 2021, we repurchased approximately .9 million shares of our common stock at an aggregate cost of $180.9 million. In 2020, we repurchased approximately .8 million shares of our common stock at an aggregate cost of $104.3 million. In April 2019, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $650 million, exclusive of any fees, commissions or other expenses related to such purchases, in addition to the amount then outstanding under our previous Board authorization. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased. Shares of our common stock in the aggregate amount of $359.6 million as of January 1, 2022 remained authorized for repurchase under this Board authorization. Treasury Shares Reissuance We fund a portion of our employee-related expenses using shares of our common stock held in treasury. We record net gains or losses associated with our use of treasury shares to retained earnings. Accumulated Other Comprehensive Loss The changes in “Accumulated other comprehensive loss” (net of tax) for 2021 and 2020 were as follows: (In millions) Foreign Pension and Cash Flow Total Balance as of December 28, 2019 $ (245.1 ) $ (101.8 ) $ (1.2 ) $ (348.1 ) Other comprehensive income (loss) before reclassifications, net of tax (3.0 ) 6.2 (7.5 ) (4.3 ) Reclassifications to net income, net of tax – 2.9 (.1 ) 2.8 Net current-period other comprehensive income (loss), net of tax (3.0 ) 9.1 (7.6 ) (1.5 ) Balance as of January 2, 2021 $ (248.1 ) $ (92.7 ) $ (8.8 ) $ (349.6 ) Other comprehensive income (loss) before reclassifications, net of tax 30.7 27.9 5.4 64.0 Reclassifications to net income, net of tax – 4.4 (1.7 ) 2.7 Net current-period other comprehensive income (loss), net of tax 30.7 32.3 3.7 66.7 Balance as of January 1, 2022 $ (217.4 ) $ (60.4 ) $ (5.1 ) $ (282.9 ) The amounts reclassified from “Accumulated other comprehensive loss” to increase (decrease) net income were as follows: (In millions) 2021 2020 2019 Statements of Income Location Cash flow hedges: Foreign exchange contracts $ 1.3 $ .7 $ 2.1 Cost of products sold Commodity contracts .9 (.6 ) (.2 ) Cost of products sold Total before tax 2.2 .1 1.9 Tax (.5 ) – (.5 ) Provision for (benefit from) income taxes Net of tax 1.7 .1 1.4 Pension and other postretirement benefits (6.0 ) (3.8 ) (445.4 ) Other non-operating Tax 1.6 .9 179.3 Provision for (benefit from) income taxes Net of tax (4.4 ) (2.9 ) (266.1 ) Total reclassifications for the period $ (2.7 ) $ (2.8 ) $ (264.7 ) The following table sets forth the income tax (benefit) expense allocated to each component of other comprehensive income (loss): (In millions) 2021 2020 2019 Foreign currency translation: Translation gain (loss) $ (23.2 ) $ 27.5 $ (5.5 ) Pension and other postretirement benefits: Net gain recognized from actuarial gain/loss and prior service cost/credit 8.5 3.1 19.4 Reclassifications to net income 1.6 .9 179.3 Cash flow hedges: Gains (losses) recognized on cash flow hedges 1.7 (2.3 ) .2 Reclassifications to net income (.5 ) – (.5 ) Income tax (benefit) expense allocated to components of other comprehensive income (loss) $ (11.9 ) $ 29.2 $ 192.9 |
LONG-TERM INCENTIVE COMPENSATIO
LONG-TERM INCENTIVE COMPENSATION | 12 Months Ended |
Jan. 01, 2022 | |
LONG TERM INCENTIVE COMPENSATION | NOTE 12. LONG-TERM INCENTIVE COMPENSATION Stock-Based Awards Stock-Based Compensation We grant our annual stock-based compensation awards to eligible employees in March and non-employee Our 2017 Incentive Award Plan (the “Equity Plan”), a long-term incentive plan for employees and non-employee Stock-based compensation expense and the related recognized tax benefit were as follows: (In millions) 2021 2020 2019 Stock-based compensation expense $ 37.2 $ 24.0 $ 34.5 Tax benefit 4.6 2.9 4.3 This expense was included in “Marketing, general and administrative expense” in the Consolidated Statements of Income. As of January 1, 2022, we had approximately $47 million of unrecognized compensation expense related to unvested stock-based awards, which is expected to be recognized over the remaining weighted average requisite service period of approximately two years. Stock Options Stock options may be granted to employees and non-employee period No stock options were granted in fiscal years 2021, 2020 or 2019. The following table summarizes information related to stock options: Number of (in thousands) Weighted average Weighted average (in years) Aggregate Outstanding at January 2, 2021 162.1 $ 68.84 4.86 $ 14.0 Exercised (20.1 ) 34.19 Outstanding at January 1, 2022 142.0 $ 73.76 4.40 $ 20.3 Options vested and expected to vest at January 1, 2022 142.0 73.76 4.40 20.3 Options exercisable at January 1, 2022 142.0 $ 73.76 4.40 $ 20.3 The total intrinsic value of stock options exercised was $3.5 million in 2021, $4 million in 2020 and $23.5 million in 2019. We received approximately $1 million in 2021, $2 million in 2020 and $10 million in 2019 from the exercise of stock options. The tax benefit associated with these exercised options was $.9 million in 2021, $1 million in 2020 and $5.7 million in 2019. The intrinsic value of a stock option is based on the amount by which the market value of our stock exceeds the exercise price of the option. Performance Units (“PUs”) PUs are performance-based awards granted to eligible employees under the Equity Plan. PUs are payable in shares of our common stock at the end of a three vesting period provided that the designated performance objectives are achieved at the end of the period. Over the performance period, the estimated number of shares of our common stock issuable upon vesting is adjusted upward or downward based on the probability of achieving the performance objectives established for the award. The actual number of shares issued can range from 0% to 200% of the target shares at the time of grant. The weighted average grant date fair value for PUs was $191.86, $115.07 and $104.43 in 2021, 2020 and 2019, respectively. The following table summarizes information related to awarded PUs: Number of (in thousands) Weighted grant-date Unvested at January 2, 2021 356.6 $ 112.31 Granted at target 73.1 191.86 Adjustment for above-target performance (1) 54.3 122.96 Vested (156.1 ) 122.96 Forfeited/cancelled (5.8 ) 132.92 Unvested at January 1, 2022 322.1 $ 127.33 (1) Reflects adjustments for the vesting of awards based on above-target performance for the 201 8 20 The fair value of vested PUs was $19.2 million in 2021, $20.4 million in 2020 and $25.6 million in 2019. Market-Leveraged Stock Units (“MSUs”) MSUs are performance-based awards granted to eligible employees under our equity plans. MSUs are payable in shares of our common stock over a four-year period provided that the designated The following table summarizes information related to awarded MSUs: Number of (in thousands) Weighted Unvested at January 2, 2021 235.9 $ 110.89 Granted at target 61.2 216.06 Adjustments for above-target performance (1) 62.7 113.24 Vested (160.1 ) 110.99 Forfeited/cancelled (4.5 ) 141.78 Unvested at January 1, 2022 195.2 $ 143.16 (1) Reflects adjustments for the vesting of awards based on above-target performance for each of the tranches of awards vesting in 2021. The fair value of vested MSUs was $17.8 million in 2021, $17.6 million in 2020 and $15.9 million in 2019. Restricted Stock Units (“RSUs”) RSUs are service-based awards granted to eligible employees and non-employee three r non-employee in The following table summarizes information related to awarded RSUs: Number of (in thousands) Weighted grant-date Unvested at January 2, 2021 51.4 $ 109.47 Granted 11.2 196.26 Vested (26.1 ) 104.70 Forfeited/cancelled (.4 ) 108.44 Unvested at January 1, 2022 36.1 $ 139.82 The fair value of vested RSUs was $2.7 million, $3.8 million and $4.4 million in 2021, 2020 and 2019, respectively. Cash-Based Awards Long-Term Incentive Units (“LTI Units”) LTI Units are cash-based awards granted to employees under our long-term incentive unit plan. LTI Units are service-based awards that generally vest ratably over a four-year period. The settlement value equals the number of vested LTI Units multiplied by the average of the high and low market prices of our common stock on the vesting date. The compensation expense related to these awards is amortized on a straight-line basis and the fair value is remeasured using the estimated percentage of units expected to be earned multiplied by the average of the high and low market prices of our common stock at each quarter-end. We also grant performance-based, cash-based awards in the form of performance and market-leveraged LTI Units to eligible employees. Performance LTI Units are payable in cash at the end of a three-year cliff vesting period provided that certain performance objectives are achieved at the end of the performance period. Market-leveraged LTI Units are payable in cash and vest ratably over a period of four years. The number of performance and market-leveraged LTI Units earned at vesting is adjusted upward or downward based upon the probability of achieving the performance objectives established for the respective award and the actual number of units issued can range from 0% to 200% of the designated quarter-end The compensation expense related to LTI Units was $21.3 million in 2021, $13.8 million in 2020 and $19.1 million in 2019. This expense was included in “Marketing, general and administrative expense” in the Consolidated Statements of Income. The total recognized tax benefit related to LTI Units was $5.1 million in 2021, $3.3 million in 2020 and $4.4 million in 2019. |
COST REDUCTION ACTIONS
COST REDUCTION ACTIONS | 12 Months Ended |
Jan. 01, 2022 | |
Restructuring and Related Activities [Abstract] | |
COST REDUCTION ACTIONS | NOTE 13. COST REDUCTION ACTIONS Restructuring Charges We have plans that provide eligible employees with severance benefits in the event of an involuntary termination. We calculate severance using the benefit formulas under the applicable plans. We record restructuring charges from qualifying cost reduction actions for severance and other exit costs (including asset impairment charges and lease and other contract cancellation costs) when they are probable and estimable. 2019/2020 Actions During fiscal year 2021, we recorded $13.3 million in restructuring charges, net of reversals, related to our 2019/2020 actions. These charges consisted of severance and related costs for the reduction of approximately 360 positions and asset impairment charges at numerous locations across our company, reflecting COVID-19. COVID-19. Our activities related to our 2019/2020 actions began in the fourth quarter of fiscal year 2019 and continued through fiscal year 2021. 2018/2019 Actions In April 2018, we approved a restructuring plan (the “2018 Plan”) to consolidate the European footprint of our LGM reportable segment, which reduced headcount by approximately 390 positions, including temporary labor, in connection with the closure of a manufacturing facility. This reduction was partially offset by headcount additions in other locations, resulting in a net reduction of approximately 150 positions. During fiscal year s Our Net restructuring reversals during fiscal year s Accruals for severance and related costs and lease cancellation costs were included in “Other current liabilities” in the Consolidated Balance Sheets. Asset impairment charges were based on the estimated market value of the assets, less selling costs, if applicable. Restructuring charges were included in “Other expense (income), net” in the Consolidated Statemen ts of Income. During 2021, restructuring charges and payments were as follows: (In millions) Accrual at Charges, Cash Non-cash Foreign Accrual at 2019/2020 Actions Severance and related costs $ 28.3 $ 10.3 $ (26.2 ) $ – $ (.9 ) $ 11.5 Asset impairment charges – 2.4 – (2.4 ) – – Lease cancellation costs – .6 (.6 ) – – – 2018/2019 Actions Lease cancellation costs .3 – (.3 ) – – – Total $ 28.6 $ 13.3 $ (27.1 ) $ (2.4 ) $ (.9 ) $ 11.5 During 2020, restructuring charges and payments were as follows: (In millions) Accrual at Charges, Cash Non-cash Foreign Accrual at 2019/2020 Actions Severance and related costs $ 21.9 $ 49.8 $ (45.7 ) $ – $ 2.3 $ 28.3 Asset impairment charges – 6.2 – (6.2 ) – – 2018/2019 Actions Severance and related costs 6.5 (.7 ) (6.0 ) – .2 – Lease cancellation costs .3 – – – – .3 Total $ 28.7 $ 55.3 $ (51.7 ) $ (6.2 ) $ 2.5 $ 28.6 The table below shows the total amount of restructuring charges incurred by reportable segment and Corporate. (In millions) 2021 2020 2019 Restructuring charges by reportable segment and Corporate Label and Graphic Materials $ 3.4 $ 27.9 $ 29.0 Retail Branding and Information Solutions 7.6 18.7 9.8 Industrial and Healthcare Materials 1.6 8.4 9.4 Corporate 1.0 .3 2.2 Total $ 13.6 $ 55.3 $ 50.4 |
TAXES BASED ON INCOME
TAXES BASED ON INCOME | 12 Months Ended |
Jan. 01, 2022 | |
Taxes Based on Income | |
TAXES BASED ON INCOME | NOTE 14. TAXES BASED ON INCOME Taxes based on income were as follows: (In millions) 2021 2020 2019 Current: U.S. federal tax $ 7.3 $ 1.1 $ 11.0 State taxes 5.3 1.9 .5 International taxes 229.9 168.5 148.1 242.5 171.5 159.6 Deferred: U.S. federal tax (1.1 ) 5.0 (168.0 ) State taxes (5.3 ) 1.6 (8.9 ) International taxes 12.5 (.4 ) (39.4 ) 6.1 6.2 (216.3 ) Provision for (benefit from) income taxes $ 248.6 $ 177.7 $ (56.7 ) The principal items accounting for the difference between taxes computed at U.S. federal statutory rate and taxes recorded were as follows: (In millions) 2021 2020 2019 Tax provision computed at U.S. federal statutory rate (1) $ 208.5 $ 154.8 $ 52.4 Increase (decrease) in taxes resulting from: State taxes, net of federal tax benefit (1) 4.5 6.9 (12.8 ) U.S. pension plan settlements and related charges (1) – – (76.6 ) Foreign earnings taxed at different rates (2) 75.4 51.4 56.2 GILTI high-tax (3) (22.8 ) (12.5 ) – Foreign tax structuring and planning transactions (4) – – (47.9 ) Excess tax benefits associated with stock-based payments (4.1 ) (3.2 ) (7.8 ) Valuation allowance (4.8 ) (3.3 ) 2.0 U.S. federal research and development tax credits (6.2 ) (6.2 ) (6.1 ) Tax contingencies and audit settlements 3.9 (5.5 ) (11.8 ) Other items, net (5.8 ) (4.7 ) (4.3 ) Provision for (benefit from) income taxes $ 248.6 $ 177.7 $ (56.7 ) (1) Included in 2019 are tax effects of the pension plan settlement charges associated with the termination of the ADPP. In 2019, tax benefit o f $102 million on the pretax charge was reflected in the tax provision computed at U.S. federal statutory rate and state taxes, net of federal tax benefit. Moreover, in 2019, the tax benefit of $77 million related to the release of stranded tax effects in AOCI through the income statement was reflected in U.S. pension plan settlements and related charges. ( 2 All years included certain U.S. international tax provisions and foreign earnings taxed in the U.S., net of credits. ( 3 In 2021, we recognized $ 14.1 million and $8.7 million of benefit related to GILTI exclusion elections made on our amended 2018 and originally filed 2020 U.S. federal tax returns, respectively. In 2020, we recognized $12.5 million of benefit related to a GILTI exclusion election we planned to make ( 4 In 2019, we recognized a net tax benefit of $ 47.9 million related to a foreign structuring transaction. This net benefit resulted from the elimination of recapture conditions to which our previously recognized net operating losses were subject. By eliminating these conditions, our losses became permanent, and the offsetting deferred tax liability related to future recapture was released. Income before taxes from our U.S. and international operations was as follows: (In millions) 2021 2020 2019 U.S. $ 88.0 $ 123.8 $ (355.4 ) International 904.6 613.5 604.9 Income before taxes $ 992.6 $ 737.3 $ 249.5 Our effective tax rate was 25%, 24.1% and f or fiscal years 2021, 2020 and 2019, res p Our 2021 provision for (benefit from) income taxes included (i) $ million of net tax charge related to the tax on global intangible low-taxed income (“GILTI”) of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from foreign-derived intangible income (“FDII”); (ii) $ million of return-to-provision benefit related to a GILTI exclusion election made on our amended 2018 U.S. federal tax return; and (iii) $11.3 million of return-to-provision benefit, including $8.7 million related to a GILTI exclusion election and a higher FDII deduction reflected on our 2020 U.S. federal tax return. In fiscal year 2020, the U.S. Department of Treasury issued final regulations that provide certain U.S. taxpayers with an annual election to exclude foreign income subject to a high effective tax rate from their GILTI inclusions. This annual election included an option for retroactive application to tax years 2018 through 2020. We recognized related tax benefits for tax years 2018 through 2020 as of January 1, 2022. We have not yet determined whether to make the election for tax year 2021. We continue to evaluate the impact of these regulations and currently anticipate that the benefit from making this election on our 2021 U.S. federal tax return may be significant. Our 2021 provision for (benefit from) income taxes also reflected (i) net tax benefit primarily from the release of valuation allowance against certain deferred tax assets in the U.S. and foreign jurisdictions; (ii) net tax benefit primarily from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years; and (iii) net tax charges related to the tax effects of outcomes of certain legal proceedings. Our 2020 provision for (benefit from) income taxes included (i) $22.1 million of net tax charge related to the tax on GILTI of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from FDII; (ii) a $12.5 million return-to-provision adjustment related to an election we planned to make on our 2019 amended U.S. tax return; and (iii) net tax benefit primarily from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years in foreign jurisdictions, partially offset by increases in reserves from changes in judgment and additional interest and penalty accruals. Our 2019 provision for (benefit from) income taxes included $179 million of tax benefit related to the effective settlement of the ADPP, $102 million of which was the related tax effect on the pretax charge of $444 million and $77 million of which was related to the rel e Tax Cut s and Our accumulated earnings in foreign subsidiaries are not indefinitely reinvested and can generally be repatriated to the U.S. without material tax consequences. As of January 1, 2022, we recorded a deferred tax liability of $16.2 million related to future tax consequences from repatriating our accumulated earnings in foreign subsidiaries that are not indefinitely reinvested. Deferred Taxes Deferred taxes reflect the temporary differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts utilized for tax purposes. The primary components of the temporary differences that gave rise to our deferred tax assets and liabilities were as follows: (In millions) 2021 2020 Accrued expenses not currently deductible $ 34.6 $ 28.1 Net operating loss carryforwards 154.4 161.4 Tax credit carryforwards 34.6 55.9 Stock-based compensation 13.6 10.7 Pension and other postretirement benefits 38.8 52.4 Inventory reserve 14.7 12.9 Lease liabilities 42.5 39.0 Other assets 25.3 16.1 Valuation allowance (70.1 ) (68.2 ) Total deferred tax assets (1) 288.4 308.3 Depreciation and amortization (268.9 ) (80.2 ) Repatriation accrual (16.2 ) (39.0 ) Foreign operating loss recapture (3.4 ) (3.6 ) Lease assets (43.8 ) (38.7 ) Total deferred tax liabilities (1) (332.3 ) (161.5 ) Total net deferred tax assets (liabilities) (2) $ (43.9 ) $ 146.8 (1) Reflect gross amounts before jurisdictional netting of deferred tax assets and liabilities. (2) 2021 included deferred tax liabilities recognized as a result of the acquisition of Vestcom described in Note 2, “Acquisitions.” more-likely-than-not Net operating loss carryforwards of foreign subsidiaries at January 1, 2022 and January 2, 2021 were $508 million and $563 million, respectively. Tax credit carryforwards of both domestic and foreign subsidiaries at January 1, 2022 and January 2, 2021 totaled $35 million and $56 million, respectively. If unused, foreign net operating losses and tax credit carryforwards will expire as follows: (In millions) Net Operating Losses (1) Tax Credits Year of Expiry 2022 $ 1.7 $ .4 2023 3.8 .4 2024 2.9 .2 2025 3.2 .2 2026 9.4 1.0 2027-2041 19.9 28.2 Indefinite life/no expiry 467.0 4.2 Total $ 507.9 $ 34.6 (1) Net operating losses are presented before tax effects and valuation allowance. Certain indefinite-lived foreign net operating losses may require decades to be fully utilized under our current business model. At January 1, 2022, we had net operating loss carryforwards in certain states of million before tax effects. Based on our estimates of future state taxable income, it is more-likely-than-not As of January 1, 2022, our provision for (benefit from) income taxes did not materially benefit from applicable tax holidays in foreign jurisdictions. Unrecognized Tax Benefits As of January 1, 2022, our unrecognized tax benefits totaled $74 million, $68 million of which, if recognized, would reduce our annual effective income tax rate. As of January 2, 2021, our unrecognized tax benefits totaled $72 million, $63 million of which, if recognized, would reduce our annual effective income tax rate. Where applicable, we accrue potential interest and penalties related to unrecognized tax benefits in income tax expense. The interest and penalties we recognized during fiscal years 2021, 2020 and 2019 were not material, individually or in aggregate, to the Consolidated Statements of Income. We have accrued balance s of $19 million and $22 million for interest and penalties, net of tax benefit, in the Consolidated Balance Sheets at January 1, 2022 and January 2, 2021, respectively. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is set forth below . (In millions) 2021 2020 Balance at beginning of year $ 72.0 $ 69.9 Additions for tax positions of current year 9.1 6.5 Additions (reductions) for tax positions of prior years, net 1.2 5.2 Settlements with tax authorities (1.1 ) (3.3 ) Expirations of statutes of limitations (5.2 ) (8.7 ) Changes due to translation of foreign currencies (2.0 ) 2.4 Balance at end of year $ 74.0 $ 72.0 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 $9 million, primarily as a result of closing tax years. 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 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. The final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our tax provision for (benefit from) income taxes and the related liabilities. To date, we and our U.S. subsidiaries have completed the IRS’ Compliance Assurance Process Program through 201 8 . |
SEGMENT AND DISAGGREGATED REVEN
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | 12 Months Ended |
Jan. 01, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | NOTE 15. SEGMENT AND DISAGGREGATED REVENUE INFORMATION Segment Reporting We have the following reportable segments: • Label and Graphic Materials – manufactures and sells pressure-sensitive label and packaging materials and films for graphic and reflective products; • Retail Branding and Information Solutions – designs, manufactures and sells a wide variety of branding and information solutions, including brand and price tickets, tags and labels (including RFID inlays), and related services, supplies and equipment; and • Industrial and Healthcare Materials – manufactures and sells performance tapes and other adhesive products for industrial, medical and other applications, as well as fastener solutions. Intersegment sales are recorded at or near market prices and are eliminated in determining consolidated sales. We evaluate our performance based on income from operations before interest expense and taxes. Corporate expense is excluded from the computation of income from operations for the segments. We do not disclose total assets by reportable segment since we neither generate nor review that information internally. As our reporting structure is neither organized nor reviewed internally by country, results by individual country are not provided. Disaggregated Revenue Information Disaggregated revenue information is shown below in the manner that best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Revenue from our LGM reportable segment is attributed to geographic areas based on the location from which products are shipped. Revenue from our RBIS reportable segment is shown by product group . (In millions) 2021 2020 2019 Net sales to unaffiliated customers Label and Graphic Materials: U.S. $ 1,462.5 $ 1,294.3 $ 1,246.6 Europe 2,025.5 1,758.1 1,767.9 Asia 1,224.5 1,040.8 1,065.0 Latin America 395.4 340.3 375.4 Other international 322.5 281.6 291.0 Total Label and Graphic Materials 5,430.4 4,715.1 4,745.9 Retail Branding and Information Solutions: Apparel 1,839.1 1,432.3 1,458.5 Identification Solutions (1) 362.7 198.6 191.8 Total Retail Branding and Information Solutions 2,201.8 1,630.9 1,650.3 Industrial and Healthcare Materials 776.1 625.5 673.9 Net sales to unaffiliated customers $ 8,408.3 $ 6,971.5 $ 7,070.1 (1) Previously referred to as Printer Solutions Revenue by geographic area is shown below. Revenue is attributed to geographic areas based on the location from which products are shipped. (In millions) 2021 2020 2019 Net sales to unaffiliated customers U.S. $ 2,065.2 $ 1,683.6 $ 1,638.8 Europe 2,541.4 2,164.7 2,160.2 Asia 2,914.5 2,378.5 2,458.5 Latin America 537.6 440.3 498.3 Other international 349.6 304.4 314.3 Net sales to unaffiliated customers $ 8,408.3 $ 6,971.5 $ 7,070.1 Net sales to unaffiliated customers in Asia included sales in China (including Hong Kong) of $1.68 billion in 2021, $1.31 billion in 2020 and $1.38 billion in 2019. No single customer represented 10% or more of our net sales in year-end 2021, 2020 and 2019. During 2021, 2020 and 2019, our ten largest customers by net sales in the aggregate represented approximately 16%, 17% and 16% of our net sales, respectively. Additional Segment Information Additional financial information by reportable segment is shown below. (In millions) 2021 2020 2019 Intersegment sales Label and Graphic Materials $ 98.5 $ 80.3 $ 80.2 Retail Branding and Information Solutions 37.3 27.5 20.6 Industrial and Healthcare Materials 13.3 6.4 8.8 Intersegment sales $ 149.1 $ 114.2 $ 109.6 Income before taxes Label and Graphic Materials $ 801.7 $ 688.8 $ 601.5 Retail Branding and Information Solutions 257.2 144.7 196.6 Industrial and Healthcare Materials 81.6 58.2 60.0 Corporate expense (81.8 ) (82.5 ) (87.6 ) Interest expense (70.2 ) (70.0 ) (75.8 ) Other non-operating 4.1 (1.9 ) (445.2 ) Income before taxes $ $ $ Capital expenditures (1) (2) Label and Graphic Materials $ 133.6 $ 87.3 $ 137.8 Retail Branding and Information Solutions 96.3 101.6 63.1 Industrial and Healthcare Materials 36.7 17.3 24.2 Capital expenditures $ 266.6 $ 206.2 $ 225.1 Depreciation and amortization expense (1) Label and Graphic Materials $ 114.3 $ 107.0 $ 100.2 Retail Branding and Information Solutions 102.2 71.6 52.6 Industrial and Healthcare Materials 27.6 26.7 26.2 Depreciation and amortization expense $ 244.1 $ 205.3 $ 179.0 Other expense (income), net by reportable segment Label and Graphic Materials $ (28.1 ) $ 22.2 $ 28.3 Retail Branding and Information Solutions 36.6 22.7 9.9 Industrial and Healthcare Materials 2.4 8.4 9.4 Corporate (5.3 ) .3 5.6 Other expense (income), net $ 5.6 $ 53.6 $ 53.2 (1) Corporate capital expenditures and depreciation and amortization expense are allocated to the reportable segments based on their percentage of consolidated net sales. (2) Capital expenditures for property, plant and equipment include accruals. Other expense (income), net by type were as follows: (In millions) 2021 2020 2019 Other expense (income), net by type Restructuring charges: Severance and related costs $ 10.5 $ 49.1 $ 45.3 Asset impairment charges and lease cancellation costs 3.1 6.2 5.1 Other items: Transaction and related costs 20.9 4.2 2.6 Loss (gain) on sales of assets, net .2 (.5 ) (3.2 ) Gain on venture investments, net (23.0 ) (5.4 ) – Gain on sale of product line (5.7 ) – – Outcomes of legal proceedings, net (1) (.4 ) – 3.4 Other expense (income), net $ 5.6 $ 53.6 $ 53.2 (1) 2021 includes an indirect tax credit based on a Brazilian Federal Supreme Court ruling in our favor in the amount of $29.1 million, partially offset by a contingent liability related to a patent infringement lawsuit in the amount of $26.6 million. Refer to Note 8, “Contingencies” for more information related to the patent infringement lawsuit. Property, plant and equipment, net, in our U.S. and international operations were as follows: (In millions) 2021 2020 2019 Property, plant and equipment, net U.S. $ 524.0 $ 403.1 $ 366.9 International 953.7 940.6 843.8 Property, plant and equipment, net $ 1,477.7 $ 1,343.7 $ 1,210.7 Property, plant a n |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Jan. 01, 2022 | |
Supplemental Financial Information | |
SUPPLEMENTAL FINANCIAL INFORMATION | NOTE 16. SUPPLEMENTAL FINANCIAL INFORMATION Inventories Inventories at year-end were as follows: (In millions) 2021 2020 Raw materials $ 393.6 $ 268.6 Work-in-progress 233.1 210.3 Finished goods 280.5 238.3 Inventories $ 907.2 $ 717.2 Property, Plant and Equipment Major classes of property, plant and equipment, stated at cost, at year-end (In millions) 2021 2020 Land $ 28.6 $ 26.1 Buildings and improvements 777.6 746.4 Machinery and equipment 2,582.2 2,538.6 Construction-in-progress 237.8 165.2 Property, plant and equipment 3,626.2 3,476.3 Accumulated depreciation (2,148.5 ) (2,132.6 ) Property, plant and equipment, net $ 1,477.7 $ 1,343.7 Software Capitalized software costs at year-end (In millions) 2021 2020 Cost $ 403.9 $ 506.5 Accumulated amortization (280.6 ) (370.1 ) Software, net $ 123.3 $ 136.4 Software amortization expense was $30.1 million in 2021, $29 million in 2020 and $20.8 million in 2019. Allowance for Credit Losses Given the short-term nature of trade receivables, our allowance for credit losses is based on the financial condition of customers, the aging of receivable balances, our historical collections experience, and current and expected future macroeconomic and market conditions, including as a result of COVID-19. The activity related to our allowance for credit losses was as follows: (In millions) 2021 2020 Balance at beginning of year $ 44.6 $ 27.1 (Reversal of) provision for credit losses (1) (4.7 ) 20.3 Amounts written off (7.7 ) (5.7 ) Other, including foreign currency translation .8 2.9 Balance at end of year $ 33.0 $ 44.6 (1) For 2020, our provision for credit losses reflected impacts on customers as a result of COVID-19. The provision for credit losses was $10.6 million in 2019. Research and Development Research and development expense, which is included in “Marketing, general and administrative expense” in the Consolidated Statements of Income, was as follows: (In millions) 2021 2020 2019 Research and development expense $ 136.6 $ 112.8 $ 92.6 Supplemental Cash Flow Information Cash paid for interest and income taxes was as follows: (In millions) 2021 2020 2019 Interest $ 62.8 $ 69.6 $ 74.3 Income taxes, net of refunds 253.4 203.4 155.0 Foreign Currency Effects Gains and losses resulting from foreign currency transactions are included in income in the period incurred. Transactions in foreign currencies (including receivables, payables and loans denominated in currencies other than the functional currency), including hedging impacts, were not material in 2021, 2020 or 2019. Deferred Revenue Deferred revenue primarily relates to constrained variable consideration on supply agreements for sales of products, as well as to payments received in advance of performance under a contract. Deferred revenue is recognized as revenue as or when we perform under a contract. The following table shows the amounts and balance sheet locations of deferred revenue as of January 1, 2022 and January 2, 2021: (In millions) January 1, 2022 January 2, 2021 Other current liabilities $24.7 $18.9 Long-term retirement benefits and other liabilities 1.9 1.4 Total deferred revenue $26.6 $20.3 Revenue recognized from amounts included in deferred revenue as of January 2, 2021 was $18.4 million in 2021. Revenue recognized from amounts included in deferred revenue as of December 28, 2019 was $12 million in 2020. Revenue recognized from amounts included in deferred revenue as of December 29, 2018 was $10.8 million in 2019. This revenue was included in “Net sales” in the Consolidated Statements of Income. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 01, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | Nature of Operations Our businesses produce pressure-sensitive materials and a variety of tickets, tags, labels and other converted products. We sell most of our pressure-sensitive materials to label printers and converters that convert the materials into labels and other products through embossing, printing, stamping and die-cutting. |
Principles of Consolidation | Principles of Consolidation Our Consolidated Financial Statements include the accounts of majority-owned and controlled subsidiaries. Intercompany accounts, transactions, and profits are eliminated in consolidation. We apply the equity method of accounting for investments in which we have significant influence but not a controlling interest. |
Fiscal Year | Fiscal Year Our fiscal years generally consist of 52 weeks, but every fifth or sixth fiscal year consists of 53 weeks; our 2021 and 2019 fiscal years consisted of 5 2 1 53 2 |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions for the reporting period and as of the date of our financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expense. The business and economic uncertainty caused by the COVID-19 pandemic has made these estimates and assumptions more difficult to determine. As future events and their effect cannot be determined with precision, actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents generally consist of cash on hand, deposits in banks, cash-in-transit, |
Inventories | Inventories We state inventories at the lower of cost or net realizable value and categorized as raw materials, work-in-progress, first-in, first-out to cost of products sold and we establish a lower cost basis for the inventory. Slow-moving inventory is reviewed by category and may be recognized partially or fully to cost of products sold depending on the type of product, level of usage, and length of time the product has been included in inventory. |
Trade Accounts Receivable | Trade Accounts Receivable We record trade accounts receivable at the invoiced amount. Our allowance for credit losses reflects customer trade accounts receivable that are estimated to be partially or entirely uncollectible. These allowances are used to reduce gross trade receivables to their net realizable values. We record these allowances based on estimates related to the following: • The financial condition of customers; • The aging of receivable balances; • Our historical collection experience; and • Current and expected future macroeconomic and market conditions. |
Property, Plant and Equipment | Property, Plant and Equipment We generally compute depreciation using the straight-line ten three gain or loss included in net income. |
Leases | Leases Our leases primarily relate to office and warehouse space, machinery, transportation, and equipment for information technology. We determine if an arrangement is a lease or contains a lease at inception. For lease accounting purposes, we do not separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short-term leases. We have options to renew or terminate some of our leases. We evaluate renewal and termination options based on considerations available at the lease commencement date and over the lease term to determine if we are reasonably certain to exercise these options. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. We recognize expense for operating leases using a straight-line basis over the lease term, with variable lease payments recognized in the periods in which they are incurred. |
Software | Software We capitalize software costs incurred during the application development stage of software development, including costs incurred for design, coding, installation to hardware, testing, and upgrades and enhancements that provide the software or hardware with additional functionalities and capabilities. We expense software costs, including internal and external training costs and maintenance costs, incurred during the preliminary project stage and the post-implementation and/or operation stage. In addition, we capitalize implementation costs incurred under a hosting arrangement that is a service contract. Capitalized software, which is included in “Other assets” in the Consolidated Balance Sheets, is amortized on a straight-line basis over the estimated useful life of the software, which is generally between five |
Impairment of Long-lived Assets | Impairment of Long-lived Assets We record impairment charges when the carrying amounts of long-lived assets are determined not to be recoverable. We measure recoverability by comparing the undiscounted cash flows expected from the applicable asset or asset group’s use and eventual disposition to its carrying value. We calculate the amount of impairment loss as the excess of the carrying value over the fair value. Historically, changes in market conditions and management strategy have caused us to reassess the carrying amount of our long-lived assets. |
Goodwill and Other Intangibles Resulting from Business Acquisitions | Goodwill and Other Intangibles Resulting from Business Acquisitions We account for business combinations using the acquisition method, with the excess of the acquisition cost over the fair value of net tangible assets and identified intangible assets acquired considered goodwill. As a result, we disclose goodwill separately from other intangible assets. Other identifiable intangibles include customer relationships, patented and other developed technology, and trade names and trademarks. We perform an annual impairment test of goodwill during the fourth quarter. Certain factors may cause us to perform an impairment test prior to the fourth quarter, including significant underperformance of a business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, or our decision to divest a portion of a reporting unit. In performing impairment tests, we have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative assessment for goodwill impairment. If the qualitative assessment indicates that it is more-likely-than-not We compare the fair value of each reporting unit to its carrying amount, and, to the extent the carrying amount exceeds the unit’s fair value, we recognize an impairment of goodwill for the excess up to the amount of goodwill of that reporting unit. In consultation with outside specialists, we estimate the fair value of our reporting units using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions about our reporting units, including their respective forecasted sales, operating margins and growth rates, as well as discount rates. Our assumptions about discount rates are based on the weighted average cost of capital for comparable companies. Our assumptions about sales, operating margins and growth rates are based on our forecasts, business plans, economic projections, anticipated future cash flows, and marketplace data. We also make assumptions for varying perpetual growth rates for periods beyond our long-term business plan period. We base our fair value estimates on projected financial information and assumptions that we believe are reasonable. However, actual future results may materially differ from these estimates and projections. The valuation methodology we use to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions. We test indefinite-lived intangible assets, consisting of trade names and trademarks, for impairment in the fourth quarter or whenever events or circumstances indicate that it is more-likely-than-not We amortize finite-lived intangible assets, consisting of customer relationships, patented and other developed technology, trade names and trademarks, and other intangibles, on a straight-line basis over the estimated useful life of the assets. See Note 3, “Goodwill and Other Intangibles Resulting from Business Acquisitions,” for more information. |
Foreign Currency | Foreign Currency We translate asset and liability accounts of international operations into U.S. dollars at current rates. Revenues and expenses are translated at the weighted average currency rate for the fiscal year. We record gains and losses resulting from hedging the value of investments in certain international operations and from the translation of balance sheet accounts directly as a component of other comprehensive income. We account for our operations in Argentina as highly inflationary, as the country’s three-year cumulative inflation rate exceeded 100%. As a result, the functional currency of our Argentine subsidiary is the U.S. dollar. |
Financial Instruments | Financial Instruments We enter into foreign exchange derivative contracts to reduce our risk from exchange rate fluctuations associated with receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. From time to time, 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 is 36 months for forecasted foreign exchange and commodity transactions and 10 years for cross-currency swap transactions. On the date we enter into a derivative contract, we determine whether the derivative will be designated as a hedge. Derivatives designated as hedges are classified as either (1) hedges of the fair value of a recognized asset or liability or an unrecognized firm commitment (“fair value” hedges) or (2) hedges of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (“cash flow” hedges). Other derivatives not designated as hedges are recorded on the balance sheets at fair value, with changes in fair value recognized in earnings. Our policy is not to purchase or hold any foreign currency, interest rate or commodity contracts for trading purposes. We assess, both at the inception of any hedge and on an ongoing basis, whether our hedges are highly effective. If we determine that a hedge is not highly effective, we prospectively discontinue hedge accounting. For cash flow hedges, we record gains and losses as components of other comprehensive income and reclassify them into earnings in the same period during which the hedged transaction affects earnings. In the event that the anticipated transaction is no longer likely to occur, we recognize the change in fair value of the instrument in current period earnings. We recognize changes in fair value hedges in current period earnings. We also recognize changes in the fair value of underlying hedged items (such as recognized assets or liabilities) in current period earnings and offset the changes in the fair value of the derivative. In the Consolidated Statements of Cash Flows, hedges are classified in the same category as the item hedged, primarily in operating activities. See Note 5, “Financial Instruments,” for more information. |
Fair Value Measurements | Fair Value Measurements We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability. We determine fair value based on a three-tier fair value hierarchy, which we use to prioritize the inputs used in measuring fair value. These tiers consist of Level 1, which are observable inputs such as quoted prices in active markets; Level 2, which are inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which are unobservable inputs in which little or no market data exists, and require us to develop our own assumptions to determine the best estimate of fair value. |
Revenue Recognition | Revenue Recognition We recognize sales when or as we satisfy a performance obligation by transferring control of a product or service to a customer, in an amount that reflects the consideration to which we expect to be entitled for the product or service. We consider a number of factors in determining when we have transferred control to a customer, including the following: (i) our present right to payment; (ii) the customer’s legal title to the asset; (iii) physical possession of the asset; (iv) the customer’s significant risks and rewards of ownership of the asset; and (v) the customer’s acceptance of the asset. Our payment terms with our customers are generally consistent with those used in the industries and the regions in which we operate. We accept sales returns in certain limited circumstances. We record an estimate for return liabilities and a corresponding reduction to sales, in the amount we expect to repay or credit customers, which we base on historical returns and outstanding customer claims. We update our estimates each reporting period. Sales rebates, discounts, and other customer concessions represent variable consideration and are common in the industries and regions in which we operate, which we account for as a reduction to sales based on estimates at the time at which products are sold. We base these estimates on our historical experience, as well as current information such as sales forecasts. We review our estimates regularly and, as additional information becomes available, we adjust our sales and the respective accruals as necessary. We exclude sales tax, value-added tax, and other taxes we collect from customers from sales. We account for shipping and handling activities after control of a product is transferred to a customer as fulfillment costs and not as separate performance obligations. As a practical expedient, we have elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of less than one year. We generally expense sales commissions when incurred because the amortization period would have been one year or less. We record these costs in “Marketing, general and administrative expense” in the Consolidated Statements of Income. |
Research and Development | Research and Development Research and development costs are related to research, design and testing of new products and applications, which we expense as incurred. |
Long-Term Incentive Compensation | Long-Term Incentive Compensation No long-term incentive compensation expense was capitalized in 2021, 2020 or 2019. Valuation of Stock-Based Awards We base our stock-based compensation expense on the fair value of awards, adjusted for estimated forfeitures, amortized on a straight-line basis over the requisite service period for stock options and restricted stock units (“RSUs”). We base compensation expense for performance units (“PUs”) on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis as these awards cliff-vest at the end of the requisite service period. We base compensation expense related to market-leveraged stock units (“MSUs”) on the fair value of awards, adjusted for estimated forfeitures, and amortized on a graded-vesting basis over their respective performance periods. Compensation expense for awards with a market condition as a performance objective, which includes PUs and MSUs, is not adjusted if the condition is not met, as long as the requisite service period is met. We estimated the fair value of stock options as of the date of grant using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate and expected option term. We determine the fair value of RSUs and the component of PUs that is subject to the achievement of a performance objective using a financial performance condition based on the fair market value of our common stock as of the date of grant, adjusted for foregone dividends. Over the performance period of the PUs, the estimated number of shares of our common stock issuable upon vesting is adjusted upward or downward from the target shares at the time of grant based on the probability of the financial performance objectives established for the award being achieved. We determine the fair value of stock-based awards that are subject to achievement of performance objectives based on a market condition, which includes MSUs and the other component of PUs, using the Monte-Carlo simulation method, which utilizes multiple input variables, including expected stock price volatility and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the target performance objectives established for the award. Certain of these assumptions are based on management’s estimates, in consultation with outside specialists. Significant changes in assumptions for future awards and actual forfeiture rates could materially impact stock-based compensation expense and our results of operations. Valuation of Cash-Based Awards Cash-based awards consist of long-term incentive units (“LTI Units”) granted to eligible employees. We classify LTI Units as liability awards and remeasure them at each quarter-end Forfeitures We estimate expected forfeitures in determining the compensation cost to be recognized each period, rather than accounting for forfeitures as they occur. We record changes in estimated forfeiture rates as cumulative adjustments in the period estimates are revised. See Note 12, “Long-term Incentive Compensation,” for more information. |
Taxes Based on Income | Taxes Based on Income We are subject to income tax in the U.S. and multiple foreign jurisdictions, whereby judgment is required in evaluating and estimating our worldwide provision, accruals for taxes, deferred taxes and for evaluating our tax positions. Our provision for income taxes is determined using the asset and liability approach in accordance with GAAP. Under this approach, deferred taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets when uncertainty regarding their realizability exists. We recognize and measure our uncertain tax positions following the more-likely-than-not See Note 14, “Taxes Based on Income,” for more information. |
Recent Accounting Requirements | Recent Accounting Requirements In November 2021, the Financial Accounting Standards Board (“FASB”) issued an accounting guidance update that requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. This guidance is effective for our annual disclosures for our fiscal year beginning January 2, 2022. We are currently assessing the impact of this guidance on our disclosures. In October 2021, the FASB issued an accounting guidance update that requires entities to recognize and measure contract assets and liabilities acquired in a business combination in accordance with revenue recognition guidance. The update will generally result in an entity recognizing contract assets and liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than fair value. This guidance is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We will adopt this guidance at the beginning of our fiscal year on January 2, 2022. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |
Schedule Of Assets Acquired And Liabilities Assumed In Business Acquisition | The table below summarizes the preliminary fair value of assets acquired and liabilities assumed in the Vestcom acquisition. (In millions) Cash and cash equivalents $ 24.3 Trade accounts receivable 98.7 Other current assets 28.5 Property, plant and equipment 56.3 Goodwill 756.6 Other intangibles resulting from business acquisition 727.0 Other assets 22.7 Total assets 1,714.1 Current liabilities 47.5 Other liabilities 17.2 Deferred and non-current income tax liabilities 184.3 Total liabilities 249.0 Net assets acquired $ 1,465.1 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | |
Schedule of changes in net carrying amount of goodwill | Changes in the net carrying amount of goodwill for 2021 and 2020 by reportable segment were as follows: (In millions) Label and Retail Branding Industrial and Total Goodwill as of December 28, 2019 $ 407.8 $ 349.3 $ 173.7 $ 930.8 Acquisitions (1) 45.8 112.7 – 158.5 Translation adjustments 27.3 9.8 10.0 47.1 Goodwill as of January 2, 2021 480.9 $ 471.8 $ 183.7 $ 1,136.4 Acquisitions (2) – 774.5 6.9 781.4 Acquisition adjustment (3) 1.2 – – 1.2 Translation adjustments (25.7 ) (10.3 ) (1.5 ) (37.5 ) Goodwill as of January 1, 2022 $ 456.4 $ 1,236.0 $ 189.1 $ 1,881.5 (1) Goodwill acquired in 2020 related to the acquisitions of Smartrac, which is included in our RBIS reportable segment, and ACPO, which is included in our LGM reportable segment. We expect the recognized goodwill related to the Smartrac acquisition not to be deductible for income tax purposes and the recognized goodwill related to the ACPO acquisition to be deductible for income tax purposes. (2) Goodwill acquired related to the acquisitions of Vestcom, JDC and ZippyYum. We expect nearly all of the recognized goodwill related to the Vestcom and JDC acquisitions not to be deductible for income tax purposes and the recognized goodwill related to the ZippyYum acquisition to be deductible for income tax purposes. (3) Measurement period adjustment related to the finalization of the purchase price allocation for the acquisition of ACPO completed in December 2020. |
Summary of the amounts and useful lives of finite-lived intangible assets | The table below summarizes the amounts and useful lives of these intangible assets as of the acquisition date. Amount (in millions) Amortization Customer relationships $ 492.0 12 Patented and other developed technology 100.4 7 The table below summarizes the amounts and weighted average Amount (in millions) Weighted average Patented and other developed technology $ 62.5 11 Customer relationships 41.4 7 Trade names and trademarks 2.2 5 |
Schedule of finite-lived intangible assets | 2021 2020 (In millions) Gross Accumulated Net Gross Accumulated Net Customer relationships $ 862.5 $ 277.2 $ 585.3 $ 373.3 $ 254.1 $ 119.2 Patented and other developed technology 247.7 84.7 163.0 147.3 69.8 77.5 Trade names and trademarks 14.8 9.7 5.1 28.2 22.2 6.0 Other intangibles 3.2 .8 2.4 .2 .2 – Total $ 1,128.2 $ 372.4 $ 755.8 $ 549.0 $ 346.3 $ 202.7 |
Estimated amortization expense for finite lived intangible assets | (In millions) Estimated 2022 $ 43.5 2023 42.5 2024 40.8 2025 40.0 2026 36.9 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
DEBT | |
Schedule of long-term debt, including its respective interest rates, at year-end | Our long year-end (In millions) 2021 2020 Long-term debt Medium-term notes: Series 1995 due 2020 and 2025 $ 30.0 $ 30.0 Long-term notes: Senior notes due 2023 at 3.4% 249.5 249.3 Senior notes due 2024 at 0.85% 298.3 – Senior notes due 2025 at 1.25% (1) 563.3 612.1 Senior notes due 2028 at 4.875% 495.3 494.6 Senior notes due 2030 at 2.650% 494.8 494.2 Senior notes due 2032 at 2.25% 493.9 – Senior notes due 2033 at 6.0% 149.1 149.0 Less amount classified as current – – Total long-term debt (2) $ 2,774.2 $ 2,029.2 (1) These senior notes are euro-denominated. (2) Includes unamortized debt issuance cost s s year-end year-end |
Schedule of maturities of long term debt for each of the next five fiscal years and thereafter | We expect maturities of our long-term debt for each of the next five fiscal years and thereafter to be as follows: Year (In millions) 2022 $ – 2023 250.0 2024 300.0 2025 595.3 2026 – 2027 and thereafter 1,650.0 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) - Other Derivatives | 12 Months Ended |
Jan. 01, 2022 | |
Fair value and balance sheet locations of derivatives | The following table shows the fair value and balance sheet locations of other derivatives as of January 1, 2022 and January 2, 2021: Asset Liability (In millions) Balance Sheet Location 2021 2020 Balance Sheet Location 2021 2020 Foreign exchange contracts Other current assets $ 6.3 $ 5.1 Other current liabilities $ 2.9 $ 8.4 Commodity contracts Other current assets – .1 Other current liabilities – .1 $ 6.3 $ 5.2 $ 2.9 $ 8.5 |
Components of the net gains (losses) recognized in income related to other derivative instruments, which are not designated as hedging instruments | The following table shows the components of the net gains (losses) recognized in income related to these derivative instruments: (In millions) Statements of Income Location 2021 2020 2019 Foreign exchange contracts Cost of products sold $ 1.4 $ 1.9 $ (1.5 ) Foreign exchange contracts Marketing, general and administrative expense 21.0 (14.2 ) 3.5 $ 22.4 $ (12.3 ) $ 2.0 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Defined Benefit Plans | |
Schedule of plan benefit obligations | |
Schedule of plan assets | Pension Benefits 2021 2020 (In millions) U.S. Int’l U.S. Int’l Change in plan assets Plan assets at beginning of year $ – $ 897.2 $ – $ 734.4 Actual return on plan assets – 37.3 – 91.5 Employer contributions 9.8 20.7 7.3 17.2 Participant contributions – 4.7 – 3.7 Benefits paid (9.8 ) (23.3 ) (7.3 ) (21.1) Settlements – (3.7 ) – (2.4) Foreign currency translation – (58.3 ) – 73.9 Plan assets at end of year $ – $ 874.6 $ – $ 897.2 |
Schedule of funded status | Pension Benefits 2021 2020 (In millions) U.S. Int’l U.S. Int’l Funded status of the plans Other assets $ – $ 113.6 $ – $ 92.4 Other accrued liabilities (7.0 ) (1.0 ) (9.1 ) (1.5 ) Long-term retirement benefits and other liabilities (1) (59.8 ) (120.4 ) (68.2 ) (147.6 ) Plan assets less than benefit obligations $ (66.8 ) $ (7.8 ) $ (77.3 ) $ (56.7 ) (1) In accordance with our funding strategy, we have the option to fund certain of our U.S. liabilities with proceeds from our company-owned life insurance policies. |
Schedule of weighted-average assumptions used to determine year-end benefit obligations | Pension Benefits 2021 2020 U.S. Int’l U.S. Int’l Weighted average assumptions used to determine year-end Discount rate 2.49 % 1.57 % 2.02 % 1.26 % Compensation rate increase – 2.33 – 2.15 |
Schedule of pre-tax amounts, recognized in "Accumulated other comprehensive loss" | Pension Benefits 2021 2020 (In millions) U.S. Int’l U.S. Int’l Net actuarial loss $ 15.6 $ 41.5 $ 18.2 $ 83.3 Prior service (credit) cost – (4.0 ) – (3.9 ) Net amount recognized in accumulated other comprehensive loss $ 15.6 $ 37.5 $ 18.2 $ 79.4 |
Schedule of pretax amounts, including that of discontinued operations, recognized in "Other comprehensive loss (income)" | Pension Benefits 2021 2020 2019 (In millions) U.S. Int’l U.S. Int’l U.S. Int’l Net actuarial loss (gain) $ (.7 ) $ (34.8 ) $ 3.5 $ (13.5 ) $ (44.6 ) $ (42.7) Prior service credit – (.9 ) – .4 – 1.8 Amortization of unrecognized: Net actuarial gain (.8 ) (6.1 ) (.6 ) (5.2 ) (.5 ) (4.0) Prior service credit (cost) – .4 – .4 – .4 Settlements (1.1 ) (.5 ) (.2 ) (.3 ) (442.8 ) (.6 ) Net amount recognized in other comprehensive loss (income) $ (2.6 ) $ (41.9 ) $ 2.7 $ (18.2 ) $ (487.9 ) $ (45.1 ) |
Schedule of components of net periodic benefit cost (credit) | Pension Benefits 2021 2020 2019 (In millions) U.S. Int’l U.S. Int’l U.S. Int’l Service cost $ – $ 19.0 $ – $ 17.8 $ – $ 15.6 Interest cost 1.0 8.9 1.8 11.0 2.7 14.8 Actuarial loss (gain) (1.1 ) – 3.7 – 2.5 – Expected return on plan assets – (19.8 ) – (18.5 ) – (21.0 ) Amortization of actuarial loss .8 6.1 .6 5.2 .5 4.0 Amortization of prior service (credit) cost – (.4 ) – (.4 ) – (.4 ) Recognized loss on settlements (1) 1.1 .5 .2 .3 443.5 .6 Net periodic benefit cost (credit) $ 1.8 $ 14.3 $ 6.3 $ 15.4 $ 449.2 $ 13.6 (1) In 2021, settlements in the U.S. related to a non-qualified lump-sum |
Schedule of weighted-average assumptions used to determine net periodic cost | Pension Benefits 2021 2020 2019 U.S. Int’l U.S. Int’l U.S. Int’l Discount rate 2.20 % 1.26 % 2.89 % 1.66 % 3.73 % 2.39 % Expected return on assets – 2.61 – 2.79 – 3.38 Compensation rate increase – 2.15 – 2.21 – 2.23 |
Schedule of defined benefit plan contributions | (In millions) U.S. pension plans $ 7.1 International pension plans 13.5 |
Schedule of anticipated future benefit payments | Pension (In millions) U.S. Int’l 2022 $ 7.1 $ 20.1 2023 6.3 22.5 2024 6.1 23.6 2025 6.1 22.2 2026 5.9 27.1 2027-2031 22.5 138.5 |
International | |
Defined Benefit Plans | |
Schedule of fair value of plan assets | The following table sets forth, by level within the fair value hierarchy (as applicable), international plan assets at fair value: Fair Value Measurements Using (In millions) Total Quoted (Level 1) Significant Significant 2021 Cash $ 10.1 $ 10.1 $ – $ – Insurance contracts 37.9 – – 37.9 Pooled funds – real estate investment trusts 11.0 – – 11.0 Pooled funds – fixed income securities (1) 464.4 Pooled funds – equity securities (1) 302.8 Pooled funds – other investments (1) 48.4 Total international plan assets at fair value $ 874.6 2020 Cash $ 3.8 $ 3.8 $ – $ – Insurance contracts 41.2 – – 41.2 Pooled funds – fixed income securities (1) 469.9 Pooled funds – equity securities (1) 332.8 Pooled funds – other investments (1) 49.5 Total international plan assets at fair value $ 897.2 (1) Pooled funds that are measured at fair value using the NAV per unit |
Schedule of reconciliation of Level 3 assets | The following table presents a reconciliation of Level 3 international plan asset activity during the year ended January 1, 2022: Level 3 Assets (In millions) Insurance Contracts Pooled Funds – Total Balance at January 2, 2021 $ 41.2 $ – $ 41.2 Net realized and unrealized gain .7 – .7 Purchases 3.3 – 3.3 Settlements (4.6 ) – (4.6 ) Transfers into Level 3 (1) – 11.0 11.0 Impact of changes in foreign currency exchange rates (2.7 ) – (2.7 ) Balance at January 1, 2022 $ 37.9 $ 11.0 $ 48.9 (1) Transfers into Level 3 were primarily driven by the use of unobservable inputs in the pricing of the underlying assets. |
COMMITMENTS AND LEASES (Tables)
COMMITMENTS AND LEASES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Leases [Abstract] | |
Supplemental cost information related to leases | (In millions) 2021 2020 2019 Operating lease costs $ 68.8 $ 63.1 $ 65.4 |
Supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases is shown below. (In millions) Balance Sheet Location 2021 2020 Assets Operating Other assets $ 183.0 $ 161.3 Finance (1) Property, plant and equipment, net 28.9 38.2 Total leased assets $ 211.9 $ 199.5 Liabilities Current: Operating Other current liabilities $ 47.3 $ 44.3 Finance Short-term borrowings and current portion of long-term debt and finance leases 5.5 5.6 Non-current: Operating Long-term retirement benefits and other liabilities 135.3 116.0 Finance Long-term debt and finance leases 11.7 22.9 Total lease liabilities $ 199.8 $ 188.8 (1) Finance lease assets are net of accumulated amortization of $10.4 million and $8.3 million as of January 1, 2022 and January 2, 2021, respectively. |
Supplemental cash flow information related to leases | Supplemental cash flow information related to leases is shown below. (In millions) 2021 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 54.2 $ 54.9 $ 53.1 Operating lease assets obtained in exchange for operating lease liabilities 58.0 48.4 32.6 |
Schedule of weighted average remaining lease term and discount rate information | 2021 2020 Weighted average remaining lease term (in years): Operating 6.5 6.2 Finance 3.3 3.2 Weighted average discount rate (percentage): Operating 3.0 % 4.3 % Finance 2.9 2.9 |
Schedule of operating and finance lease liabilities by maturity date | Operating and finance lease liabilities by maturity date from January 1, 2022 are shown below. (In millions) Operating Leases Finance Leases 2022 $ 51.5 $ 6.1 2023 40.1 5.3 2024 29.8 5.0 2025 22.9 1.7 2026 14.4 .2 2027 and thereafter 45.7 – Total lease payments 204.4 18.3 Less: imputed interest (21.8 ) (1.1 ) Present value of lease liabilities $ 182.6 $ 17.2 |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Loss Contingency [Abstract] | |
Schedule of activity related to our environmental liabilities | The activity related to our environmental liabilities in 2021 and 2020 was as follows: (In millions) 2021 2020 Balance at beginning of year $ 21.1 $ 21.4 Charges, net of reversals 2.9 3.0 Payments (2.1 ) (3.3 ) Balance at end of year $ 21.9 $ 21.1 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Fair Value Disclosures [Abstract] | |
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 January 1, 2022: Fair Value Measurements Using (In millions) Total Quoted Significant (Level 2) Significant Assets Investments $ 33.9 $ 27.1 $ 6.8 $ – Derivative assets 7.1 .6 6.5 – Bank drafts 14.1 14.1 – – Liabilities Cross-currency swap $ 10.3 $ – $ 10.3 $ – Derivative liabilities 3.6 – 3.6 – Contingent consideration liabilities 7.6 – – 7.6 The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of Fair Value Measurements Using (In millions) Total Quoted Significant (Level 2) Significant ( Assets Investments $ 33.6 $ 27.4 $ 6.2 $ – Derivative assets 5.2 .1 5.1 – Bank drafts 12.8 12.8 – – Liabilities Cross-currency swap $ 36.7 $ – $ 36.7 $ – Derivative liabilities 9.5 .3 9.2 – |
Summary of activity related to contingent consideration | The activity related to contingent consideration in 2021 is shown below. (In millions) Acquisition $ 11.6 Payments (2.6 ) Adjustments (1.4 ) Balance at year end $ 7.6 In addition to the investments described |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of net income per common share | Net income per common share was computed as follows: (In millions, except per share amounts) 2021 2020 2019 (A) Net income $ 740.1 $ 555.9 $ 303.6 (B) Weighted average number of common shares outstanding 82.9 83.4 84.0 Dilutive shares (additional common shares issuable under stock-based awards) .9 .7 1.0 (C) Weighted average number of common shares outstanding, assuming dilution 83.8 84.1 85.0 Net income per common share (A) ÷ (B) $ 8.93 $ 6.67 $ 3.61 Net income per common share, assuming dilution (A) ÷ (C) $ 8.83 $ 6.61 $ 3.57 |
SUPPLEMENTAL EQUITY AND COMPR_2
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in "Accumulated other comprehensive loss" (net of tax) | The changes in “Accumulated other comprehensive loss” (net of tax) for 2021 and 2020 were as follows: (In millions) Foreign Pension and Cash Flow Total Balance as of December 28, 2019 $ (245.1 ) $ (101.8 ) $ (1.2 ) $ (348.1 ) Other comprehensive income (loss) before reclassifications, net of tax (3.0 ) 6.2 (7.5 ) (4.3 ) Reclassifications to net income, net of tax – 2.9 (.1 ) 2.8 Net current-period other comprehensive income (loss), net of tax (3.0 ) 9.1 (7.6 ) (1.5 ) Balance as of January 2, 2021 $ (248.1 ) $ (92.7 ) $ (8.8 ) $ (349.6 ) Other comprehensive income (loss) before reclassifications, net of tax 30.7 27.9 5.4 64.0 Reclassifications to net income, net of tax – 4.4 (1.7 ) 2.7 Net current-period other comprehensive income (loss), net of tax 30.7 32.3 3.7 66.7 Balance as of January 1, 2022 $ (217.4 ) $ (60.4 ) $ (5.1 ) $ (282.9 ) |
Schedule of amounts reclassified from "Accumulated other comprehensive loss" to increase (decrease) net income | The amounts reclassified from “Accumulated other comprehensive loss” to increase (decrease) net income were as follows: (In millions) 2021 2020 2019 Statements of Income Location Cash flow hedges: Foreign exchange contracts $ 1.3 $ .7 $ 2.1 Cost of products sold Commodity contracts .9 (.6 ) (.2 ) Cost of products sold Total before tax 2.2 .1 1.9 Tax (.5 ) – (.5 ) Provision for (benefit from) income taxes Net of tax 1.7 .1 1.4 Pension and other postretirement benefits (6.0 ) (3.8 ) (445.4 ) Other non-operating Tax 1.6 .9 179.3 Provision for (benefit from) income taxes Net of tax (4.4 ) (2.9 ) (266.1 ) Total reclassifications for the period $ (2.7 ) $ (2.8 ) $ (264.7 ) |
Schedule of income tax (benefit) expense allocated to each component of other comprehensive income (loss) | The following table sets forth the income tax (benefit) expense allocated to each component of other comprehensive income (loss): (In millions) 2021 2020 2019 Foreign currency translation: Translation gain (loss) $ (23.2 ) $ 27.5 $ (5.5 ) Pension and other postretirement benefits: Net gain recognized from actuarial gain/loss and prior service cost/credit 8.5 3.1 19.4 Reclassifications to net income 1.6 .9 179.3 Cash flow hedges: Gains (losses) recognized on cash flow hedges 1.7 (2.3 ) .2 Reclassifications to net income (.5 ) – (.5 ) Income tax (benefit) expense allocated to components of other comprehensive income (loss) $ (11.9 ) $ 29.2 $ 192.9 |
LONG-TERM INCENTIVE COMPENSAT_2
LONG-TERM INCENTIVE COMPENSATION (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Long-Term Incentive Compensation | |
Summary of stock-based compensation expense and the related recognized tax benefit | (In millions) 2021 2020 2019 Stock-based compensation expense $ 37.2 $ 24.0 $ 34.5 Tax benefit 4.6 2.9 4.3 |
Stock Options | |
Long-Term Incentive Compensation | |
Summary of information related to stock options | Number of (in thousands) Weighted average Weighted average (in years) Aggregate Outstanding at January 2, 2021 162.1 $ 68.84 4.86 $ 14.0 Exercised (20.1 ) 34.19 Outstanding at January 1, 2022 142.0 $ 73.76 4.40 $ 20.3 Options vested and expected to vest at January 1, 2022 142.0 73.76 4.40 20.3 Options exercisable at January 1, 2022 142.0 $ 73.76 4.40 $ 20.3 |
Performance Units (PS) | |
Long-Term Incentive Compensation | |
Summary of information related to awarded PUs | Number of (in thousands) Weighted grant-date Unvested at January 2, 2021 356.6 $ 112.31 Granted at target 73.1 191.86 Adjustment for above-target performance (1) 54.3 122.96 Vested (156.1 ) 122.96 Forfeited/cancelled (5.8 ) 132.92 Unvested at January 1, 2022 322.1 $ 127.33 |
Market-leveraged stock units (MSUs) | |
Long-Term Incentive Compensation | |
Summary of information related to awarded MSUs | Number of (in thousands) Weighted Unvested at January 2, 2021 235.9 $ 110.89 Granted at target 61.2 216.06 Adjustments for above-target performance (1) 62.7 113.24 Vested (160.1 ) 110.99 Forfeited/cancelled (4.5 ) 141.78 Unvested at January 1, 2022 195.2 $ 143.16 |
Restricted Stock Units (RSUs) | |
Long-Term Incentive Compensation | |
Summary of information related to awarded RSUs | Number of (in thousands) Weighted grant-date Unvested at January 2, 2021 51.4 $ 109.47 Granted 11.2 196.26 Vested (26.1 ) 104.70 Forfeited/cancelled (.4 ) 108.44 Unvested at January 1, 2022 36.1 $ 139.82 |
COST REDUCTION ACTIONS (Tables)
COST REDUCTION ACTIONS (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring charges and payments | During 2021, restructuring charges and payments were as follows: (In millions) Accrual at Charges, Cash Non-cash Foreign Accrual at 2019/2020 Actions Severance and related costs $ 28.3 $ 10.3 $ (26.2 ) $ – $ (.9 ) $ 11.5 Asset impairment charges – 2.4 – (2.4 ) – – Lease cancellation costs – .6 (.6 ) – – – 2018/2019 Actions Lease cancellation costs .3 – (.3 ) – – – Total $ 28.6 $ 13.3 $ (27.1 ) $ (2.4 ) $ (.9 ) $ 11.5 During 2020, restructuring charges and payments were as follows: (In millions) Accrual at Charges, Cash Non-cash Foreign Accrual at 2019/2020 Actions Severance and related costs $ 21.9 $ 49.8 $ (45.7 ) $ – $ 2.3 $ 28.3 Asset impairment charges – 6.2 – (6.2 ) – – 2018/2019 Actions Severance and related costs 6.5 (.7 ) (6.0 ) – .2 – Lease cancellation costs .3 – – – – .3 Total $ 28.7 $ 55.3 $ (51.7 ) $ (6.2 ) $ 2.5 $ 28.6 |
Total amount of restructuring charges incurred by reportable segment and Corporate | The table below shows the total amount of restructuring charges incurred by reportable segment and Corporate. (In millions) 2021 2020 2019 Restructuring charges by reportable segment and Corporate Label and Graphic Materials $ 3.4 $ 27.9 $ 29.0 Retail Branding and Information Solutions 7.6 18.7 9.8 Industrial and Healthcare Materials 1.6 8.4 9.4 Corporate 1.0 .3 2.2 Total $ 13.6 $ 55.3 $ 50.4 |
TAXES BASED ON INCOME (Tables)
TAXES BASED ON INCOME (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Taxes Based on Income | |
Taxes based on income | Taxes based on income were as follows: (In millions) 2021 2020 2019 Current: U.S. federal tax $ 7.3 $ 1.1 $ 11.0 State taxes 5.3 1.9 .5 International taxes 229.9 168.5 148.1 242.5 171.5 159.6 Deferred: U.S. federal tax (1.1 ) 5.0 (168.0 ) State taxes (5.3 ) 1.6 (8.9 ) International taxes 12.5 (.4 ) (39.4 ) 6.1 6.2 (216.3 ) Provision for (benefit from) income taxes $ 248.6 $ 177.7 $ (56.7 ) |
The principal items accounting for the difference between taxes | The principal items accounting for the difference between taxes computed at U.S. federal statutory rate and taxes recorded were as follows: (In millions) 2021 2020 2019 Tax provision computed at U.S. federal statutory rate (1) $ 208.5 $ 154.8 $ 52.4 Increase (decrease) in taxes resulting from: State taxes, net of federal tax benefit (1) 4.5 6.9 (12.8 ) U.S. pension plan settlements and related charges (1) – – (76.6 ) Foreign earnings taxed at different rates (2) 75.4 51.4 56.2 GILTI high-tax (3) (22.8 ) (12.5 ) – Foreign tax structuring and planning transactions (4) – – (47.9 ) Excess tax benefits associated with stock-based payments (4.1 ) (3.2 ) (7.8 ) Valuation allowance (4.8 ) (3.3 ) 2.0 U.S. federal research and development tax credits (6.2 ) (6.2 ) (6.1 ) Tax contingencies and audit settlements 3.9 (5.5 ) (11.8 ) Other items, net (5.8 ) (4.7 ) (4.3 ) Provision for (benefit from) income taxes $ 248.6 $ 177.7 $ (56.7 ) (1) Included in 2019 are tax effects of the pension plan settlement charges associated with the termination of the ADPP. In 2019, tax benefit o f $102 million on the pretax charge was reflected in the tax provision computed at U.S. federal statutory rate and state taxes, net of federal tax benefit. Moreover, in 2019, the tax benefit of $77 million related to the release of stranded tax effects in AOCI through the income statement was reflected in U.S. pension plan settlements and related charges. ( 2 All years included certain U.S. international tax provisions and foreign earnings taxed in the U.S., net of credits. ( 3 In 2021, we recognized $ 14.1 million and $8.7 million of benefit related to GILTI exclusion elections made on our amended 2018 and originally filed 2020 U.S. federal tax returns, respectively. In 2020, we recognized $12.5 million of benefit related to a GILTI exclusion election we planned to make ( 4 In 2019, we recognized a net tax benefit of $ 47.9 million related to a foreign structuring transaction. This net benefit resulted from the elimination of recapture conditions to which our previously recognized net operating losses were subject. By eliminating these conditions, our losses became permanent, and the offsetting deferred tax liability related to future recapture was released. |
Income before taxes from our U.S. and international operations | Income before taxes from our U.S. and international operations was as follows: (In millions) 2021 2020 2019 U.S. $ 88.0 $ 123.8 $ (355.4 ) International 904.6 613.5 604.9 Income before taxes $ 992.6 $ 737.3 $ 249.5 |
Components of the temporary differences | The primary components of the temporary differences that gave rise to our deferred tax assets and liabilities were as follows: (In millions) 2021 2020 Accrued expenses not currently deductible $ 34.6 $ 28.1 Net operating loss carryforwards 154.4 161.4 Tax credit carryforwards 34.6 55.9 Stock-based compensation 13.6 10.7 Pension and other postretirement benefits 38.8 52.4 Inventory reserve 14.7 12.9 Lease liabilities 42.5 39.0 Other assets 25.3 16.1 Valuation allowance (70.1 ) (68.2 ) Total deferred tax assets (1) 288.4 308.3 Depreciation and amortization (268.9 ) (80.2 ) Repatriation accrual (16.2 ) (39.0 ) Foreign operating loss recapture (3.4 ) (3.6 ) Lease assets (43.8 ) (38.7 ) Total deferred tax liabilities (1) (332.3 ) (161.5 ) Total net deferred tax assets (liabilities) (2) $ (43.9 ) $ 146.8 (1) Reflect gross amounts before jurisdictional netting of deferred tax assets and liabilities. (2) 2021 included deferred tax liabilities recognized as a result of the acquisition of Vestcom described in Note 2, “Acquisitions.” |
Schedule of tax credit and net operating loss carryforwards | If unused, foreign net operating losses and tax credit carryforwards will expire as follows: (In millions) Net Operating Losses (1) Tax Credits Year of Expiry 2022 $ 1.7 $ .4 2023 3.8 .4 2024 2.9 .2 2025 3.2 .2 2026 9.4 1.0 2027-2041 19.9 28.2 Indefinite life/no expiry 467.0 4.2 Total $ 507.9 $ 34.6 (1) Net operating losses are presented before tax effects and valuation allowance. |
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is set forth below . (In millions) 2021 2020 Balance at beginning of year $ 72.0 $ 69.9 Additions for tax positions of current year 9.1 6.5 Additions (reductions) for tax positions of prior years, net 1.2 5.2 Settlements with tax authorities (1.1 ) (3.3 ) Expirations of statutes of limitations (5.2 ) (8.7 ) Changes due to translation of foreign currencies (2.0 ) 2.4 Balance at end of year $ 74.0 $ 72.0 |
SEGMENT AND DISAGGREGATED REV_2
SEGMENT AND DISAGGREGATED REVENUE INFORMATION (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | (In millions) 2021 2020 2019 Net sales to unaffiliated customers Label and Graphic Materials: U.S. $ 1,462.5 $ 1,294.3 $ 1,246.6 Europe 2,025.5 1,758.1 1,767.9 Asia 1,224.5 1,040.8 1,065.0 Latin America 395.4 340.3 375.4 Other international 322.5 281.6 291.0 Total Label and Graphic Materials 5,430.4 4,715.1 4,745.9 Retail Branding and Information Solutions: Apparel 1,839.1 1,432.3 1,458.5 Identification Solutions (1) 362.7 198.6 191.8 Total Retail Branding and Information Solutions 2,201.8 1,630.9 1,650.3 Industrial and Healthcare Materials 776.1 625.5 673.9 Net sales to unaffiliated customers $ 8,408.3 $ 6,971.5 $ 7,070.1 (1) Previously referred to as Printer Solutions Revenue by geographic area is shown below. Revenue is attributed to geographic areas based on the location from which products are shipped. (In millions) 2021 2020 2019 Net sales to unaffiliated customers U.S. $ 2,065.2 $ 1,683.6 $ 1,638.8 Europe 2,541.4 2,164.7 2,160.2 Asia 2,914.5 2,378.5 2,458.5 Latin America 537.6 440.3 498.3 Other international 349.6 304.4 314.3 Net sales to unaffiliated customers $ 8,408.3 $ 6,971.5 $ 7,070.1 |
Schedule Of Revenue From External Customers By Geographic Area And Product Group | Additional financial information by reportable segment is shown below. (In millions) 2021 2020 2019 Intersegment sales Label and Graphic Materials $ 98.5 $ 80.3 $ 80.2 Retail Branding and Information Solutions 37.3 27.5 20.6 Industrial and Healthcare Materials 13.3 6.4 8.8 Intersegment sales $ 149.1 $ 114.2 $ 109.6 Income before taxes Label and Graphic Materials $ 801.7 $ 688.8 $ 601.5 Retail Branding and Information Solutions 257.2 144.7 196.6 Industrial and Healthcare Materials 81.6 58.2 60.0 Corporate expense (81.8 ) (82.5 ) (87.6 ) Interest expense (70.2 ) (70.0 ) (75.8 ) Other non-operating 4.1 (1.9 ) (445.2 ) Income before taxes $ $ $ Capital expenditures (1) (2) Label and Graphic Materials $ 133.6 $ 87.3 $ 137.8 Retail Branding and Information Solutions 96.3 101.6 63.1 Industrial and Healthcare Materials 36.7 17.3 24.2 Capital expenditures $ 266.6 $ 206.2 $ 225.1 Depreciation and amortization expense (1) Label and Graphic Materials $ 114.3 $ 107.0 $ 100.2 Retail Branding and Information Solutions 102.2 71.6 52.6 Industrial and Healthcare Materials 27.6 26.7 26.2 Depreciation and amortization expense $ 244.1 $ 205.3 $ 179.0 Other expense (income), net by reportable segment Label and Graphic Materials $ (28.1 ) $ 22.2 $ 28.3 Retail Branding and Information Solutions 36.6 22.7 9.9 Industrial and Healthcare Materials 2.4 8.4 9.4 Corporate (5.3 ) .3 5.6 Other expense (income), net $ 5.6 $ 53.6 $ 53.2 (1) Corporate capital expenditures and depreciation and amortization expense are allocated to the reportable segments based on their percentage of consolidated net sales. (2) Capital expenditures for property, plant and equipment include accruals. Other expense (income), net by type were as follows: (In millions) 2021 2020 2019 Other expense (income), net by type Restructuring charges: Severance and related costs $ 10.5 $ 49.1 $ 45.3 Asset impairment charges and lease cancellation costs 3.1 6.2 5.1 Other items: Transaction and related costs 20.9 4.2 2.6 Loss (gain) on sales of assets, net .2 (.5 ) (3.2 ) Gain on venture investments, net (23.0 ) (5.4 ) – Gain on sale of product line (5.7 ) – – Outcomes of legal proceedings, net (1) (.4 ) – 3.4 Other expense (income), net $ 5.6 $ 53.6 $ 53.2 (1) 2021 includes an indirect tax credit based on a Brazilian Federal Supreme Court ruling in our favor in the amount of $29.1 million, partially offset by a contingent liability related to a patent infringement lawsuit in the amount of $26.6 million. Refer to Note 8, “Contingencies” for more information related to the patent infringement lawsuit. |
Schedule of Entity Wide Disclosure on Geographic Areas Long Lived Assets in Individual Countries | Property, plant and equipment, net, in our U.S. and international operations were as follows: (In millions) 2021 2020 2019 Property, plant and equipment, net U.S. $ 524.0 $ 403.1 $ 366.9 International 953.7 940.6 843.8 Property, plant and equipment, net $ 1,477.7 $ 1,343.7 $ 1,210.7 |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Supplemental Financial Information | |
Schedule of inventories | Inventories at year-end were as follows: (In millions) 2021 2020 Raw materials $ 393.6 $ 268.6 Work-in-progress 233.1 210.3 Finished goods 280.5 238.3 Inventories $ 907.2 $ 717.2 |
Schedule of property, plant and equipment | Major classes of property, plant and equipment, stated at cost, at year-end (In millions) 2021 2020 Land $ 28.6 $ 26.1 Buildings and improvements 777.6 746.4 Machinery and equipment 2,582.2 2,538.6 Construction-in-progress 237.8 165.2 Property, plant and equipment 3,626.2 3,476.3 Accumulated depreciation (2,148.5 ) (2,132.6 ) Property, plant and equipment, net $ 1,477.7 $ 1,343.7 |
Schedule of capitalized software costs | Capitalized software costs at year-end (In millions) 2021 2020 Cost $ 403.9 $ 506.5 Accumulated amortization (280.6 ) (370.1 ) Software, net $ 123.3 $ 136.4 Software amortization expense was $30.1 million in 2021, $29 million in 2020 and $20.8 million in 2019. |
Schedule of allowance for credit losses | The activity related to our allowance for credit losses was as follows: (In millions) 2021 2020 Balance at beginning of year $ 44.6 $ 27.1 (Reversal of) provision for credit losses (1) (4.7 ) 20.3 Amounts written off (7.7 ) (5.7 ) Other, including foreign currency translation .8 2.9 Balance at end of year $ 33.0 $ 44.6 (1) For 2020, our provision for credit losses reflected impacts on customers as a result of COVID-19. |
Schedule of research and development expense | Research and development expense, which is included in “Marketing, general and administrative expense” in the Consolidated Statements of Income, was as follows: (In millions) 2021 2020 2019 Research and development expense $ 136.6 $ 112.8 $ 92.6 |
Schedule of cash paid for interest and income taxes | Cash paid for interest and income taxes was as follows: (In millions) 2021 2020 2019 Interest $ 62.8 $ 69.6 $ 74.3 Income taxes, net of refunds 253.4 203.4 155.0 |
Schedule of amounts and balance sheet locations of deferred revenue | The following table shows the amounts and balance sheet locations of deferred revenue as of January 1, 2022 and January 2, 2021: (In millions) January 1, 2022 January 2, 2021 Other current liabilities $24.7 $18.9 Long-term retirement benefits and other liabilities 1.9 1.4 Total deferred revenue $26.6 $20.3 Revenue recognized from amounts included in deferred revenue as of January 2, 2021 was $18.4 million in 2021. Revenue recognized from amounts included in deferred revenue as of December 28, 2019 was $12 million in 2020. Revenue recognized from amounts included in deferred revenue as of December 29, 2018 was $10.8 million in 2019. This revenue was included in “Net sales” in the Consolidated Statements of Income. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Length of fiscal period | 364 days | 371 days | 364 days | |
Stock-based compensation expense capitalized | $ 0 | $ 0 | $ 0 | |
Currency Swap | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Maximum length of time for which exposure is hedged to the variability in future cash flows | 10 years | 10 years | 10 years | |
Foreign Exchange And Commodity Transactions | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Maximum length of time for which exposure is hedged to the variability in future cash flows | 36 months | 36 months | 36 months | |
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Software estimated useful lives | 5 years | |||
Minimum | Buildings and improvements | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful lives | 10 years | |||
Minimum | Machinery and equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful lives | 3 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Software estimated useful lives | 10 years | |||
Maximum | Argentina | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Cumulative inflation rate | 100.00% | |||
Maximum | Buildings and improvements | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful lives | 45 years | |||
Maximum | Machinery and equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful lives | 15 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) € in Millions, $ in Millions | Aug. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Feb. 28, 2020USD ($) | Feb. 28, 2020EUR (€) | Jan. 01, 2022USD ($) |
ACQUISITIONS | ||||||
Business combination contingent consideration liability | $ 7.6 | |||||
Smartrac Transponder Division | ||||||
ACQUISITIONS | ||||||
Purchase consideration | $ 255 | € 232 | ||||
ACPO Limited | ||||||
ACQUISITIONS | ||||||
Purchase consideration | $ 88 | |||||
Vestcom | ||||||
ACQUISITIONS | ||||||
Purchase consideration | $ 1,470 | |||||
ZippyYum And Jdc | ||||||
ACQUISITIONS | ||||||
Purchase consideration | $ 43 | |||||
Business combination contingent consideration maximum amount | 13 | |||||
Business combination contingent consideration liability | $ 12 |
ACQUISITIONS - SCHEDULE OF ASSE
ACQUISITIONS - SCHEDULE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN BUSINESS ACQUISTION (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,881.5 | $ 1,136.4 | $ 930.8 |
Vestcom | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | 24.3 | ||
Trade accounts receivable | 98.7 | ||
Other current assets | 28.5 | ||
Property, plant and equipment | 56.3 | ||
Goodwill | 756.6 | ||
Other intangibles resulting from business acquisition | 727 | ||
Other assets | 22.7 | ||
Total assets | 1,714.1 | ||
Current liabilities | 47.5 | ||
Other liabilities | 17.2 | ||
Deferred and non-current income tax liabilities | 184.3 | ||
Total liabilities | 249 | ||
Net assets acquired | $ 1,465.1 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Changes in the net carrying amount of goodwill | ||
Goodwill, Beginning Balance | $ 1,136.4 | $ 930.8 |
Acquisition | 781.4 | 158.5 |
Acquisition adjustment | 1.2 | |
Translation adjustments | (37.5) | 47.1 |
Goodwill, Ending Balance | 1,881.5 | 1,136.4 |
Indefinite-Lived Intangible Assets | ||
Indefinite-lived intangible assets, carrying value | 155.6 | 22.2 |
Impairment of indefinite-lived intangible assets | 0 | |
Vestcom | ||
Changes in the net carrying amount of goodwill | ||
Goodwill, Ending Balance | 756.6 | |
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | 592 | |
Indefinite-Lived Intangible Assets | ||
Indefinite-lived Intangible Assets Acquired | 135 | |
Customer relationships | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 492 | $ 41.4 |
Amortization period (in years) | 12 years | 7 years |
Patented and other developed technology | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 100.4 | $ 62.5 |
Amortization period (in years) | 7 years | 11 years |
Trade names and trademarks | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 2.2 | |
Amortization period (in years) | 5 years | |
Label and Graphic Materials | ||
Changes in the net carrying amount of goodwill | ||
Goodwill, Beginning Balance | $ 480.9 | $ 407.8 |
Acquisition | 45.8 | |
Acquisition adjustment | 1.2 | |
Translation adjustments | (25.7) | 27.3 |
Goodwill, Ending Balance | 456.4 | 480.9 |
Retail Branding and Information Solutions | ||
Changes in the net carrying amount of goodwill | ||
Goodwill, Beginning Balance | 471.8 | 349.3 |
Acquisition | 774.5 | 112.7 |
Translation adjustments | (10.3) | 9.8 |
Goodwill, Ending Balance | 1,236 | 471.8 |
Accumulated impairment losses | 820 | 820 |
Industrial and Healthcare Materials | ||
Changes in the net carrying amount of goodwill | ||
Goodwill, Beginning Balance | 183.7 | 173.7 |
Acquisition | 6.9 | |
Translation adjustments | (1.5) | 10 |
Goodwill, Ending Balance | 189.1 | $ 183.7 |
ACPO Limited | Smartrac Transponder Division | ||
Finite Lived Intangible Assets Acquired | ||
Intangible assets acquired | $ 106 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS - Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 1,128.2 | $ 549 | |
Accumulated Amortization | 372.4 | 346.3 | |
Net Carrying Amount | 755.8 | 202.7 | |
Amortization expense on finite-lived intangible assets from business acquisition | 44.6 | 19.9 | $ 13.5 |
Customer relationships | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 862.5 | 373.3 | |
Accumulated Amortization | 277.2 | 254.1 | |
Net Carrying Amount | 585.3 | 119.2 | |
Patented and other developed technology | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 247.7 | 147.3 | |
Accumulated Amortization | 84.7 | 69.8 | |
Net Carrying Amount | 163 | 77.5 | |
Trade names and trademarks | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 14.8 | 28.2 | |
Accumulated Amortization | 9.7 | 22.2 | |
Net Carrying Amount | 5.1 | 6 | |
Other intangibles | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 3.2 | 0.2 | |
Accumulated Amortization | 0.8 | 0.2 | |
Net Carrying Amount | $ 2.4 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS - Future Amortization Expense (Details) $ in Millions | Jan. 01, 2022USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2022 | $ 43.5 |
2023 | 42.5 |
2024 | 40.8 |
2025 | 40 |
2026 | $ 36.9 |
DEBT - (Details)
DEBT - (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Feb. 29, 2020 | Jan. 01, 2022 | Jan. 02, 2021 | |
Short-term debt | |||
Covenants compliance | we were in compliance with our financial covenants. | we were in compliance with our financial covenants. | |
Short Term Borrowings From U.S. Commercial Paper | |||
Short-term debt | |||
U.S. Commercial paper | $ 189 | $ 0 | |
U.S. Commercial paper weighted average interest rate | 0.32% | ||
Short-Term Borrowings from Euro-Commercial Paper | |||
Short-term debt | |||
Maximum borrowing capacity | $ 500 | ||
Maturities of the notes | 364 days | ||
Covenants compliance | There are no financial covenants under this program. | ||
Euro-Commercial paper | $ 113.1 | $ 36.9 | |
Revolving credit facility | |||
Short-term debt | |||
Commitment for increased borrowing | $ 400 | ||
Maximum borrowing capacity | $ 800 | ||
Covenants compliance | In February 2020, we amended and restated the Revolver, eliminating one of the financial covenants and extending its maturity date to February 13, 2025. |
DEBT - Revolving Credit Facilit
DEBT - Revolving Credit Facility (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Revolving credit facility | |||
Line of Credit Facility [Line Items] | |||
Amount outstanding | $ 0 | $ 0 | |
Commitment fees | 0.9 | 0.8 | $ 1.2 |
Uncommitted lines of credit | |||
Line of Credit Facility [Line Items] | |||
Uncommitted lines of credit | 358 | ||
Short term borrowings outstanding | $ 11.2 | $ 22.2 | |
Weighted average interest rate | 4.97% | 3.60% |
DEBT - Long-Term Debt and Respe
DEBT - Long-Term Debt and Respective Weighted-Average Interest Rate (Details) - USD ($) $ in Millions | 1 Months Ended | 5 Months Ended | |||||
Aug. 31, 2021 | Apr. 30, 2020 | Mar. 31, 2020 | Jun. 27, 2020 | Jan. 01, 2022 | Jan. 02, 2021 | Mar. 29, 2020 | |
Long-term Debt, Unclassified [Abstract] | |||||||
Less amount classified as current | |||||||
Total long-term debt | $ 2,774.2 | 2,029.2 | |||||
Unamortized debt issuance cost | 12.9 | 8.7 | |||||
Unamortized debt discount | 8.2 | 4.9 | |||||
Repayment of medium-term notes | $ 15 | ||||||
ADPP | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Amount of contribution | $ 250 | ||||||
Series 1995 due 2020 and 2025 | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Medium-term notes | $ 30 | $ 30 | |||||
Medium-Term Notes | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Weighted-average interest rate | 7.50% | 7.50% | |||||
Senior notes due 2023 at 3.4% | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Senior notes | $ 249.5 | $ 249.3 | |||||
Interest rate of senior notes (as a percent) | 3.40% | 3.40% | |||||
Senior notes due 2025 at 1.25% | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Senior notes | $ 563.3 | $ 612.1 | |||||
Interest rate of senior notes (as a percent) | 1.25% | 1.25% | |||||
Senior notes due 2028 at 4.875% | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Senior notes | $ 495.3 | $ 494.6 | |||||
Interest rate of senior notes (as a percent) | 4.875% | 4.875% | |||||
Senior notes due 2030 at 2.650% | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Senior notes | $ 494.8 | $ 494.2 | |||||
Senior notes issued | $ 500 | ||||||
Interest rate of senior notes (as a percent) | 2.65% | 2.65% | 2.65% | ||||
Proceeds, net of underwriting discounts and estimated offering expenses | $ 493.7 | ||||||
Senior notes due 2033 at 6.0% | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Senior notes | $ 149.1 | $ 149 | |||||
Interest rate of senior notes (as a percent) | 6.00% | 6.00% | |||||
Senior Notes Due 2024 | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Senior notes | $ 298.3 | ||||||
Senior notes issued | $ 300 | ||||||
Interest rate of senior notes (as a percent) | 0.85% | 0.85% | 0.85% | ||||
Proceeds, net of underwriting discounts and estimated offering expenses | $ 298 | ||||||
Senior Notes Due 2032 | |||||||
Long-term Debt, Unclassified [Abstract] | |||||||
Senior notes | $ 493.9 | ||||||
Senior notes issued | $ 500 | ||||||
Interest rate of senior notes (as a percent) | 2.25% | 2.25% | 2.25% | ||||
Proceeds, net of underwriting discounts and estimated offering expenses | $ 493.7 |
DEBT - Long-Term Debt and Capit
DEBT - Long-Term Debt and Capital Leases (Details) $ in Millions | Jan. 01, 2022USD ($) |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2022 | |
2023 | 250 |
2024 | 300 |
2025 | 595.3 |
2026 | |
2027 and thereafter | $ 1,650 |
DEBT - Debt issued and Capital
DEBT - Debt issued and Capital Lease Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Debt Instrument [Line Items] | |||
Interest costs | $ 75 | $ 73.9 | $ 81.1 |
Interest costs capitalized | 4.8 | 3.9 | $ 5.3 |
Fair value of debt | $ 3,250 | $ 2,340 | |
Covenants compliance | we were in compliance with our financial covenants. | we were in compliance with our financial covenants. |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) $ in Millions | Jan. 01, 2022USD ($) |
Commodity contracts | |
Financial Instruments | |
Notional amount | $ 3.5 |
Foreign exchange contracts | |
Financial Instruments | |
Notional amount | $ 1,670 |
FINANCIAL INSTRUMENTS - Cross-C
FINANCIAL INSTRUMENTS - Cross-Currency Swap (Details) - Cross-Currency Swap - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Mar. 28, 2020 | |
Financial Instruments | |||
Notional amount | $ 250 | ||
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ (10.3) | $ (36.7) | |
Amount of ineffectiveness from cross-currency swap | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Net Los
FINANCIAL INSTRUMENTS - Net Losses Recognized in Income (Details) - Other Derivatives - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Gains (losses) recognized in current earnings [Line Items] | |||
Net Gains (Losses) in Income | $ 22.4 | $ (12.3) | $ 2 |
Foreign exchange contracts | Cost of products sold | |||
Gains (losses) recognized in current earnings [Line Items] | |||
Net Gains (Losses) in Income | 1.4 | 1.9 | (1.5) |
Foreign exchange contracts | Marketing, general and administrative expense | |||
Gains (losses) recognized in current earnings [Line Items] | |||
Net Gains (Losses) in Income | $ 21 | $ (14.2) | $ 3.5 |
FINANCIAL INSTRUMENTS - Balance
FINANCIAL INSTRUMENTS - Balance Sheet Locations of Other Derivatives, Fair Value (Details) - Other Derivatives - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
Other current assets [Member] | ||
Other Derivatives, Fair Value [Line Items] | ||
Asset | $ 6.3 | $ 5.2 |
Other current liabilities [Member] | ||
Other Derivatives, Fair Value [Line Items] | ||
Liability | 2.9 | 8.5 |
Foreign exchange contracts | Other current assets [Member] | ||
Other Derivatives, Fair Value [Line Items] | ||
Asset | 6.3 | 5.1 |
Foreign exchange contracts | Other current liabilities [Member] | ||
Other Derivatives, Fair Value [Line Items] | ||
Liability | $ 2.9 | 8.4 |
Commodity contracts | Other current assets [Member] | ||
Other Derivatives, Fair Value [Line Items] | ||
Asset | 0.1 | |
Commodity contracts | Other current liabilities [Member] | ||
Other Derivatives, Fair Value [Line Items] | ||
Liability | $ 0.1 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Components of net periodic benefit cost (credit) | |||
Recognized loss on settlements | $ 1.6 | $ 0.5 | $ 444.1 |
ADPP | |||
Components of net periodic benefit cost (credit) | |||
Recognized loss on settlements | 444 | ||
Settlements | 753 | ||
Tax benefit associated with termination of pension plan | $ 179 | ||
International | Equity Securities | |||
Components of net periodic benefit cost (credit) | |||
Target assets allocation (as a percent) | 32.00% | ||
International | Fixed income securities and cash | |||
Components of net periodic benefit cost (credit) | |||
Target assets allocation (as a percent) | 60.00% | ||
International | Other investments | |||
Components of net periodic benefit cost (credit) | |||
Target assets allocation (as a percent) | 8.00% |
PENSION AND OTHER POSTRETIREM_4
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Benefit Plans (Details) - International - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 |
Defined Benefit Plans | |||
Total plan assets | $ 874.6 | $ 897.2 | $ 734.4 |
Cash | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 10.1 | 3.8 | |
Pooled funds - Fixed income securities | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 464.4 | 469.9 | |
Pooled funds – Real Estate Investment Trusts | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 11 | ||
Insurance contracts | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 37.9 | 41.2 | |
Pooled funds - Other | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 48.4 | 49.5 | |
Equity Securities | Total | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 302.8 | 332.8 | |
Quoted Prices in Active Markets (Level 1) | Cash | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 10.1 | 3.8 | |
Significant Other Observable Inputs (Level 3) | Pooled funds – Real Estate Investment Trusts | |||
Defined Benefit Plans | |||
Total plan assets at fair value | 11 | ||
Significant Other Observable Inputs (Level 3) | Insurance contracts | |||
Defined Benefit Plans | |||
Total plan assets at fair value | $ 37.9 | $ 41.2 |
PENSION AND OTHER POSTRETIREM_5
PENSION AND OTHER POSTRETIREMENT BENEFITS - Reconciliation For Assets Measure At Fair Value Using Level 3 (Details) - Significant Other Observable Inputs (Level 3) - International $ in Millions | 12 Months Ended |
Jan. 01, 2022USD ($) | |
Reconciliation of Level 3 assets | |
Balance at the beginning of the year | $ 41.2 |
Net realized and unrealized gain | 0.7 |
Purchases | 3.3 |
Settlements | (4.6) |
Transfers into Level 3 | 11 |
Impact of changes in foreign currency exchange rates | (2.7) |
Balance at the end of the year | 48.9 |
Insurance contracts | |
Reconciliation of Level 3 assets | |
Balance at the beginning of the year | 41.2 |
Net realized and unrealized gain | 0.7 |
Purchases | 3.3 |
Settlements | (4.6) |
Impact of changes in foreign currency exchange rates | (2.7) |
Balance at the end of the year | 37.9 |
Pooled funds – Real Estate Investment Trusts | |
Reconciliation of Level 3 assets | |
Transfers into Level 3 | 11 |
Balance at the end of the year | $ 11 |
PENSION AND OTHER POSTRETIREM_6
PENSION AND OTHER POSTRETIREMENT BENEFITS - Change in Projected Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
U.S. | ||
Change in projected benefit obligations | ||
Projected benefit obligations at beginning of year | $ 77.3 | $ 75.7 |
Interest cost | 1 | 1.8 |
Actuarial (gain) loss | (1.7) | 7.1 |
Benefits paid | (9.8) | (7.3) |
Projected benefit obligations at end of year | 66.8 | 77.3 |
Accumulated benefit obligations at end of year | 66.8 | 77.3 |
International | ||
Change in projected benefit obligations | ||
Projected benefit obligations at beginning of year | 953.9 | 811.7 |
Service cost | 19 | 17.8 |
Interest cost | 8.9 | 11 |
Participant contribution | 4.7 | 3.7 |
Amendments | (0.9) | 0.4 |
Actuarial (gain) loss | (15.6) | 53.5 |
Benefits paid | (23.3) | (21.1) |
Settlements | (3.7) | (2.4) |
Foreign currency translation | (60.6) | 79.3 |
Projected benefit obligations at end of year | 882.4 | 953.9 |
Accumulated benefit obligations at end of year | $ 806.4 | $ 883.6 |
PENSION AND OTHER POSTRETIREM_7
PENSION AND OTHER POSTRETIREMENT BENEFITS - Change in Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
U.S. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contributions | $ 9.8 | $ 7.3 |
Benefits paid | (9.8) | (7.3) |
International | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at beginning of year | 897.2 | 734.4 |
Actual return on plan assets | 37.3 | 91.5 |
Employer contributions | 20.7 | 17.2 |
Participant contributions | 4.7 | 3.7 |
Benefits paid | (23.3) | (21.1) |
Settlements | (3.7) | (2.4) |
Foreign currency translation | (58.3) | 73.9 |
Plan assets at end of year | $ 874.6 | $ 897.2 |
PENSION AND OTHER POSTRETIREM_8
PENSION AND OTHER POSTRETIREMENT BENEFITS - Funded Status of the Plan (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
U.S. | ||
Pension plans with accumulated benefit obligations in excess of plan assets | ||
Projected benefit obligation in excess of plan assets | $ 261 | $ 295 |
Accumulated benefit obligations | 228 | 265 |
Fair value of plan assets | 67 | 69 |
Fair value of plan assets | 73 | 69 |
U.S. | ||
Funded status of the plans | ||
Other accrued liabilities | (7) | (9.1) |
Long-term retirement benefits and other liabilities | (59.8) | (68.2) |
Plan assets less than benefit obligations | $ (66.8) | $ (77.3) |
Weighted-average assumptions used to determine year-end benefit obligations | ||
Discount rate (as a percent) | 2.49% | 2.02% |
International | ||
Funded status of the plans | ||
Other assets | $ 113.6 | $ 92.4 |
Other accrued liabilities | (1) | (1.5) |
Long-term retirement benefits and other liabilities | (120.4) | (147.6) |
Plan assets less than benefit obligations | $ (7.8) | $ (56.7) |
Weighted-average assumptions used to determine year-end benefit obligations | ||
Discount rate (as a percent) | 1.57% | 1.26% |
Compensation rate increase | 2.33% | 2.15% |
PENSION AND OTHER POSTRETIREM_9
PENSION AND OTHER POSTRETIREMENT BENEFITS - Pre-tax Amount Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
U.S. | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | $ 15.6 | $ 18.2 |
Net amount recognized in accumulated other comprehensive loss | 15.6 | 18.2 |
International | ||
Pretax amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | 41.5 | 83.3 |
Prior service (credit) cost | (4) | (3.9) |
Net amount recognized in accumulated other comprehensive loss | $ 37.5 | $ 79.4 |
PENSION AND OTHER POSTRETIRE_10
PENSION AND OTHER POSTRETIREMENT BENEFITS - Pre-tax Amount Recognized in Other Comprehensive Loss (Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
U.S. | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | $ (0.7) | $ 3.5 | $ (44.6) |
Amortization of unrecognized net actuarial gain | (0.8) | (0.6) | (0.5) |
Settlements | (1.1) | (0.2) | (442.8) |
Net amount recognized in other comprehensive loss (income) | (2.6) | 2.7 | (487.9) |
International | |||
Defined Benefit Plans | |||
Net actuarial loss (gain) | (34.8) | (13.5) | (42.7) |
Prior service credit | (0.9) | 0.4 | 1.8 |
Amortization of unrecognized net actuarial gain | (6.1) | (5.2) | (4) |
Amortization of unrecognized prior service credit (cost) | 0.4 | 0.4 | 0.4 |
Settlements | (0.5) | (0.3) | (0.6) |
Net amount recognized in other comprehensive loss (income) | $ (41.9) | $ (18.2) | $ (45.1) |
PENSION AND OTHER POSTRETIRE_11
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Components of net periodic benefit cost (credit) | |||
Recognized loss on settlements | $ 1.6 | $ 0.5 | $ 444.1 |
U.S. | |||
Components of net periodic benefit cost (credit) | |||
Interest cost | 1 | 1.8 | |
Actuarial loss (gain) | (1.7) | 7.1 | |
U.S. | Continuing Operations [Member] | |||
Components of net periodic benefit cost (credit) | |||
Interest cost | 1 | 1.8 | 2.7 |
Actuarial loss (gain) | (1.1) | 3.7 | 2.5 |
Amortization of actuarial loss | 0.8 | 0.6 | 0.5 |
Recognized loss on settlements | 1.1 | 0.2 | 443.5 |
Net periodic benefit cost (credit) | 1.8 | 6.3 | 449.2 |
International | |||
Components of net periodic benefit cost (credit) | |||
Service cost | 19 | 17.8 | |
Interest cost | 8.9 | 11 | |
Actuarial loss (gain) | (15.6) | 53.5 | |
International | Continuing Operations [Member] | |||
Components of net periodic benefit cost (credit) | |||
Service cost | 19 | 17.8 | 15.6 |
Interest cost | 8.9 | 11 | 14.8 |
Expected return on plan assets | (19.8) | (18.5) | (21) |
Amortization of actuarial loss | 6.1 | 5.2 | 4 |
Amortization of prior service (credit) cost | (0.4) | (0.4) | (0.4) |
Recognized loss on settlements | 0.5 | 0.3 | 0.6 |
Net periodic benefit cost (credit) | $ 14.3 | $ 15.4 | $ 13.6 |
PENSION AND OTHER POSTRETIRE_12
PENSION AND OTHER POSTRETIREMENT BENEFITS - Weighted-Average Assumptions for Determining Net Periodic Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
U.S. | |||
Weighted average assumptions used to determine net periodic cost | |||
Discount rate | 2.20% | 2.89% | 3.73% |
Company's contributions to the defined benefit plan in the next fiscal year | $ 7.1 | ||
International | |||
Weighted average assumptions used to determine net periodic cost | |||
Discount rate | 1.26% | 1.66% | 2.39% |
Expected return on assets | 2.61% | 2.79% | 3.38% |
Compensation rate increase | 2.15% | 2.21% | 2.23% |
Company's contributions to the defined benefit plan in the next fiscal year | $ 13.5 |
PENSION AND OTHER POSTRETIRE_13
PENSION AND OTHER POSTRETIREMENT BENEFITS - Future Benefit Payments (Details) $ in Millions | Jan. 01, 2022USD ($) |
U.S. | |
Future Benefit Payments | |
2022 | $ 7.1 |
2023 | 6.3 |
2024 | 6.1 |
2025 | 6.1 |
2026 | 5.9 |
2027-2031 | 22.5 |
International | |
Future Benefit Payments | |
2022 | 20.1 |
2023 | 22.5 |
2024 | 23.6 |
2025 | 22.2 |
2026 | 27.1 |
2027-2031 | $ 138.5 |
PENSION AND OTHER POSTRETIRE_14
PENSION AND OTHER POSTRETIREMENT BENEFITS - Postretirement Health Benefits, Defined Contribution and Other Retirement Plans (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Defined contribution and other retirement plans | |||
Postretirement health benefits obligation | $ 2 | $ 3 | |
Accumulated other comprehensive loss relating to postretirement health benefits obligation | 12 | 10 | |
Value of DSUs outstanding under deferred compensation plans | $ 24 | $ 22 | |
DSUs outstanding under deferred compensation plans | 0.1 | 0.1 | |
Recognized defined contribution plan cost | $ 24.6 | $ 22.7 | $ 22.4 |
Deferred compensation plan accrued | $ 96.1 | 95.1 | |
Minimum age of participant for termination of employment to determine forfeiture of interest on contribution | 55 years | ||
Other assets | |||
Defined contribution and other retirement plans | |||
Cash surrender value included in other assets | $ 272.2 | $ 254.8 |
COMMITMENTS AND LEASES - Supple
COMMITMENTS AND LEASES - Supplemental Cost Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Leases [Abstract] | |||
Operating lease costs | $ 68.8 | $ 63.1 | $ 65.4 |
COMMITMENTS AND LEASES - Supp_2
COMMITMENTS AND LEASES - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating Lease, Assets | $ 183 | $ 161.3 |
Operating Lease, Assets (Balance Sheet Location) | Other assets | |
Finance Lease, Assets | $ 28.9 | 38.2 |
Finance Lease, Assets (Balance Sheet Location) | Property, plant and equipment, net | |
Total leased assets | $ 211.9 | 199.5 |
Operating Lease, Current Liabilities | $ 47.3 | 44.3 |
Operating Lease, Current Liabilities (Balance Sheet Location) | Other current liabilities | |
Finance Lease, Current Liabilities | $ 5.5 | 5.6 |
Finance Lease, Current Liabilities (Balance Sheet Location) | Short-term borrowings and current portion of long-term debt and finance leases | |
Operating Lease, Non-current Liabilities | $ 135.3 | 116 |
Operating Lease, Non-current Liabilities (Balance Sheet Location) | Long-term retirement benefits and other liabilities | |
Finance Lease, Non-current Liabilities | $ 11.7 | 22.9 |
Finance Lease, Non-current Liabilities (Balance Sheet Location) | Long-term Debt and Lease Obligation | |
Total lease liabilities | $ 199.8 | 188.8 |
Accumulated amortization, finance lease assets | $ 10.4 | $ 8.3 |
COMMITMENTS AND LEASES - Supp_3
COMMITMENTS AND LEASES - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Leases [Abstract] | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 54.2 | $ 54.9 | $ 53.1 |
Operating lease assets obtained in exchange for operating lease liabilities | $ 58 | $ 48.4 | $ 32.6 |
COMMITMENTS AND LEASES - Schedu
COMMITMENTS AND LEASES - Schedule of Weighted Average Remaining Lease Term and Discount Rate Information (Details) | Jan. 01, 2022 | Jan. 01, 2020 |
Leases [Abstract] | ||
Operating Lease, Weighted average remaining lease term (in years) | 6 years 6 months | 6 years 2 months 12 days |
Finance Lease, Weighted average remaining lease term (in years) | 3 years 3 months 18 days | 3 years 2 months 12 days |
Operating Lease, Weighted average discount rate (as a percent) | 3.00% | 4.30% |
Finance Lease, Weighted average discount rate (as a percent) | 2.90% | 2.90% |
COMMITMENTS AND LEASES - Sche_2
COMMITMENTS AND LEASES - Schedule of Maturities of Lease Liabilities (Details) $ in Millions | Jan. 01, 2022USD ($) |
Operating Leases | |
2022 | $ 51.5 |
2023 | 40.1 |
2024 | 29.8 |
2025 | 22.9 |
2026 | 14.4 |
2027 and thereafter | 45.7 |
Total lease payments | 204.4 |
Less: imputed interest | (21.8) |
Present value of lease liabilities | 182.6 |
Finance Leases | |
2022 | 6.1 |
2023 | 5.3 |
2024 | 5 |
2025 | 1.7 |
2026 | 0.2 |
Total lease payments | 18.3 |
Less: imputed interest | (1.1) |
Present value of lease liabilities | $ 17.2 |
Number of operating lease contracts not yet commenced | 0 |
Number of finance lease contract not yet commenced | 0 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | 12 Months Ended | |||
Jan. 01, 2022USD ($)sites | Jan. 02, 2021USD ($) | Oct. 02, 2021USD ($) | May 14, 2021USD ($) | |
Environmental Liabilities Associated with Remediation | ||||
Environmental site contingency number of sites | sites | 12 | |||
Balance at beginning of year | $ 21.1 | $ 21.4 | ||
Charges, net of reversals | 2.9 | 3 | ||
Payments | (2.1) | (3.3) | ||
Balance at end of year | 21.9 | 21.1 | ||
Short term environmental liabilities | 2 | $ 9 | ||
Contingent liability | $ 26.6 | $ 26.6 | ||
Loss contingency, estimate of possible loss | $ 35.8 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Liabilities | ||
Contingent consideration liabilities | $ 7.6 | |
Other Expense Income Net [Member] | ||
Liabilities | ||
Unrealized gain (loss) on investments | 23 | $ 5.4 |
Cash and cash equivalents | ||
Assets | ||
Investments | 0.5 | 1 |
Other current assets | ||
Assets | ||
Investments | 33.4 | 32.6 |
Venture investments | 49.3 | 22 |
Recurring | ||
Assets | ||
Investments | 33.9 | 33.6 |
Derivative assets | 7.1 | 5.2 |
Bank drafts | 14.1 | 12.8 |
Liabilities | ||
Cross-currency swap | 10.3 | 36.7 |
Derivative liabilities | 3.6 | 9.5 |
Contingent consideration liabilities | 7.6 | |
Quoted Prices in Active Markets (Level 1) | ||
Assets | ||
Investments | 27.1 | 27.4 |
Derivative assets | 0.6 | 0.1 |
Bank drafts | 14.1 | 12.8 |
Liabilities | ||
Derivative liabilities | 0.3 | |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Investments | 6.8 | 6.2 |
Derivative assets | 6.5 | 5.1 |
Liabilities | ||
Cross-currency swap | 10.3 | 36.7 |
Derivative liabilities | 3.6 | $ 9.2 |
Significant Other Observable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration liabilities | 7.6 | |
Significant Other Observable Inputs (Level 3) | Other Current Liabilities | ||
Liabilities | ||
Contingent consideration liabilities | 2 | |
Significant Other Observable Inputs (Level 3) | Long Term Retirement Benefits And Other Liabilities [Member] | ||
Liabilities | ||
Contingent consideration liabilities | $ 6 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Activity Related to Contingent Consideration (Details) $ in Millions | 12 Months Ended |
Jan. 01, 2022USD ($) | |
ACQUISITIONS | |
Acquisition | $ 11.6 |
Payments | (2.6) |
Adjustment | (1.4) |
Balance at year end | $ 7.6 |
NET INCOME PER COMMON SHARE (De
NET INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Net Income Per Common Share | |||
Net income | $ 740.1 | $ 555.9 | $ 303.6 |
Weighted average number of common shares outstanding | 82.9 | 83.4 | 84 |
Dilutive shares (additional common shares issuable under stock-based awards) | 0.9 | 0.7 | 1 |
Weighted average number of common shares outstanding, assuming dilution | 83.8 | 84.1 | 85 |
Net income per common share (in dollars per share) | $ 8.93 | $ 6.67 | $ 3.61 |
Net income per common share, assuming dilution (in dollars per share) | $ 8.83 | $ 6.61 | $ 3.57 |
SUPPLEMENTAL EQUITY AND COMPR_3
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | Apr. 30, 2019 | |
Preferred stock, shares authorized | 5,000,000 | |||
Preferred stock, par value (in dollars per share) | $ 1 | |||
Preferred stock, outstanding shares | 0 | |||
Common stock, authorized shares | 400,000,000 | 400,000,000 | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||
Repurchase of common stock, value | $ 180.9 | $ 104.3 | $ 237.7 | |
Share repurchase authorized amount | $ 650 | |||
Share repurchase remained authorized amount | $ 359.6 | |||
Treasury stock, at cost | ||||
Repurchase of common stock | 925,425 | 792,997 | 2,222,937 | |
Repurchase of common stock, value | $ 180.9 | $ 104.3 | $ 237.7 |
SUPPLEMENTAL EQUITY AND COMPR_4
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION - Change in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Changes in Accumulated other comprehensive loss (net of tax) | |||
Beginning balance | $ 1,484.9 | $ 1,204 | $ 955.1 |
Net current-period other comprehensive income (loss), net of tax | 66.7 | (1.5) | 333.9 |
Ending balance | 1,924.4 | 1,484.9 | 1,204 |
Foreign Currency Translation | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Beginning balance | (248.1) | (245.1) | |
Other comprehensive income (loss) before reclassifications, net of tax | 30.7 | (3) | |
Reclassifications to net income, net of tax | |||
Net current-period other comprehensive income (loss), net of tax | 30.7 | (3) | |
Ending balance | (217.4) | (248.1) | (245.1) |
Pension and Other Postretirement Benefits | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Beginning balance | (92.7) | (101.8) | |
Other comprehensive income (loss) before reclassifications, net of tax | 27.9 | 6.2 | |
Reclassifications to net income, net of tax | 4.4 | 2.9 | |
Net current-period other comprehensive income (loss), net of tax | 32.3 | 9.1 | |
Ending balance | (60.4) | (92.7) | (101.8) |
Cash Flow Hedges | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Beginning balance | (8.8) | (1.2) | |
Other comprehensive income (loss) before reclassifications, net of tax | 5.4 | (7.5) | |
Reclassifications to net income, net of tax | (1.7) | (0.1) | |
Net current-period other comprehensive income (loss), net of tax | 3.7 | (7.6) | |
Ending balance | (5.1) | (8.8) | (1.2) |
Accumulated other comprehensive loss | |||
Changes in Accumulated other comprehensive loss (net of tax) | |||
Beginning balance | (349.6) | (348.1) | (682) |
Other comprehensive income (loss) before reclassifications, net of tax | 64 | (4.3) | |
Reclassifications to net income, net of tax | 2.7 | 2.8 | |
Net current-period other comprehensive income (loss), net of tax | 66.7 | (1.5) | 333.9 |
Ending balance | $ (282.9) | $ (349.6) | $ (348.1) |
SUPPLEMENTAL EQUITY AND COMPR_5
SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION - Reclassification Adjustment Out of Accumulated Other Comprehensive loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Amounts reclassified from Accumulated other comprehensive loss | |||
Cost of products sold | $ (6,095.5) | $ (5,048.2) | $ (5,166) |
Income before taxes | 992.6 | 737.3 | 249.5 |
Provision for (benefit from) income taxes | (248.6) | (177.7) | 56.7 |
Net income (loss) | 740.1 | 555.9 | 303.6 |
Income tax (benefit) expense allocated - Foreign currency translation: | |||
Translation gain (loss) | (23.2) | 27.5 | (5.5) |
Income tax (benefit) expense allocated - Pension and other postretirement benefits: | |||
Net gain recognized from actuarial gain/loss and prior service cost/credit | 8.5 | 3.1 | 19.4 |
Reclassifications to net income | 1.6 | 0.9 | 179.3 |
Income tax (benefit) expense allocated - Cash flow hedges: | |||
Gains (losses) recognized on cash flow hedges | 1.7 | (2.3) | 0.2 |
Reclassifications to net income | (0.5) | (0.5) | |
Income tax (benefit) expense allocated to components of other comprehensive income (loss) | (11.9) | 29.2 | 192.9 |
Amounts Reclassified from Accumulated other comprehensive loss | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Net income (loss) | (2.7) | (2.8) | (264.7) |
Pension and Other Postretirement Benefits | Amounts Reclassified from Accumulated other comprehensive loss | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Other non-operating expense (income), net | (6) | (3.8) | (445.4) |
Provision for (benefit from) income taxes | 1.6 | 0.9 | 179.3 |
Net income (loss) | (4.4) | (2.9) | (266.1) |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Income before taxes | 2.2 | 0.1 | 1.9 |
Provision for (benefit from) income taxes | (0.5) | (0.5) | |
Net income (loss) | 1.7 | 0.1 | 1.4 |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Foreign exchange contracts | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Cost of products sold | 1.3 | 0.7 | 2.1 |
Cash Flow Hedges | Amounts Reclassified from Accumulated other comprehensive loss | Commodity contracts | |||
Amounts reclassified from Accumulated other comprehensive loss | |||
Cost of products sold | $ 0.9 | $ (0.6) | $ (0.2) |
LONG-TERM INCENTIVE COMPENSAT_3
LONG-TERM INCENTIVE COMPENSATION (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2017shares | Jan. 01, 2022USD ($)itemshares | Jan. 02, 2021USD ($)shares | Dec. 28, 2019USD ($)shares | |
Long-Term Incentive Compensation | ||||
Stock option granted | shares | 0 | 0 | 0 | |
Total intrinsic value of stock options exercised | $ 3.5 | $ 4 | $ 23.5 | |
Proceeds from exercises of stock options | 1 | 2 | 10 | |
Tax benefit associated with option exercises | 0.9 | 1 | 5.7 | |
Equity Plan | ||||
Long-Term Incentive Compensation | ||||
Aggregate number of shares available under the plan | shares | 5,400,000 | |||
Fungible share ratio | shares | 1.5 | |||
Marketing, general and administrative expense | ||||
Long-Term Incentive Compensation | ||||
Stock-based compensation expense | 37.2 | 24 | 34.5 | |
Tax benefit | 4.6 | 2.9 | 4.3 | |
Long-term incentive units | Marketing, general and administrative expense | ||||
Long-Term Incentive Compensation | ||||
Cash-based awards compensation expense | 21.3 | 13.8 | 19.1 | |
Tax Benefit | $ 5.1 | $ 3.3 | $ 4.4 | |
Stock Options | ||||
Long-Term Incentive Compensation | ||||
Option expiration period | 10 years | |||
Stock Options | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Stock Options | Minimum | ||||
Long-Term Incentive Compensation | ||||
Purchase price of common stock as a percentage of its fair market value granted to non-employee directors and employees | 100.00% | |||
Market-leveraged stock units (MSUs) | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Number of tranches represented by each vesting period | item | 1 | |||
Number of tranches represented by the entire vesting period | item | 4 | |||
Market-leveraged stock units (MSUs) | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Market-leveraged stock units (MSUs) | Minimum | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 0.00% | |||
Market-leveraged stock units (MSUs) | Maximum | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 200.00% | |||
Market-leveraged long-term incentive units | Ratable vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Performance long-term incentive units | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 3 years | |||
Performance long-term incentive units | Minimum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 0.00% | |||
Performance long-term incentive units | Maximum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Shares issued (as a percent) | 200.00% | |||
Performance Units (PS) | Minimum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 3 years | |||
Shares issued (as a percent) | 0.00% | |||
Performance Units (PS) | Maximum | Cliff vesting | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Shares issued (as a percent) | 200.00% | |||
Restricted Stock Units (RSUs) | Ratable vesting | Directors | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 1 year | |||
Restricted Stock Units (RSUs) | Minimum | Ratable vesting | Employees | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 3 years | |||
Restricted Stock Units (RSUs) | Maximum | Ratable vesting | Employees | ||||
Long-Term Incentive Compensation | ||||
Vesting period | 4 years | |||
Unvested Stock Options, Performance Units, Restricted Stock Units and Market-leveraged stock units (MSUs) | ||||
Long-Term Incentive Compensation | ||||
Unrecognized compensation cost related to share based compensation cost | $ 47 | |||
Unrecognized compensation cost weighted average recognition period | 2 years |
LONG-TERM INCENTIVE COMPENSAT_4
LONG-TERM INCENTIVE COMPENSATION - Stock Option Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Number of options | ||
Outstanding beginning balance, options | 162,100 | |
Exercised, options | (20,100) | |
Outstanding ending balance, options | 142,000 | 162,100 |
Options vested and expected to vest, options | 142,000 | |
Options exercisable | 142,000 | |
Weighted-average exercise price | ||
Outstanding, Weighted-average exercise price, beginning balance | $ 68.84 | |
Exercised, weighted-average exercise price | 34.19 | |
Outstanding, Weighted-average exercise price, ending balance | 73.76 | $ 68.84 |
Options vested and expected to vest, Weighted-average exercise price | 73.76 | |
Options exercisable ,Weighted-average exercise price | $ 73.76 | |
Weighted-average remaining contractual life | ||
Outstanding ,Weighted-average remaining contractual life | 4 years 4 months 24 days | 4 years 10 months 9 days |
Options vested or expected to vest, Weighted-average remaining contractual life | 4 years 4 months 24 days | |
Options exercisable, Weighted-average remaining contractual life | 4 years 4 months 24 days | |
Aggregate intrinsic value | ||
Outstanding, Aggregate intrinsic value | $ 20.3 | $ 14 |
Options vested and expected to vest, Aggregate Intrinsic Value | 20.3 | |
Options exercisable, Aggregate Intrinsic Value | $ 20.3 |
LONG-TERM INCENTIVE COMPENSAT_5
LONG-TERM INCENTIVE COMPENSATION - Number of Awards, Weighted-average Grant-date Fair Value (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Performance Units (PS) | |||
Number of awards | |||
Unvested at January 2, 2021 | 356,600 | ||
Granted at target | 73,100 | ||
Adjustments for above-target performance | 54,300 | ||
Vested | (156,100) | ||
Forfeited/cancelled | (5,800) | ||
Unvested at January 1, 2022 | 322,100 | 356,600 | |
Fair value | $ 19.2 | $ 20.4 | $ 25.6 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 112.31 | ||
Weighted-average grant-date fair value, granted at target | 191.86 | $ 115.07 | $ 104.43 |
Weighted-average grant-date fair value, adjustment for above-target performance | 122.96 | ||
Weighted-average grant-date fair value, vested | 122.96 | ||
Weighted-average grant-date fair value, forfeited/cancelled | 132.92 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 127.33 | $ 112.31 | |
Market-leveraged stock units (MSUs) | |||
Number of awards | |||
Unvested at January 2, 2021 | 235,900 | ||
Granted at target | 61,200 | ||
Adjustments for above-target performance | 62,700 | ||
Vested | (160,100) | ||
Forfeited/cancelled | (4,500) | ||
Unvested at January 1, 2022 | 195,200 | 235,900 | |
Fair value | $ 17.8 | $ 17.6 | $ 15.9 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 110.89 | ||
Weighted-average grant-date fair value, granted at target | 216.06 | $ 94.55 | $ 135.85 |
Weighted-average grant-date fair value, adjustment for above-target performance | 113.24 | ||
Weighted-average grant-date fair value, vested | 110.99 | ||
Weighted-average grant-date fair value, forfeited/cancelled | 141.78 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 143.16 | $ 110.89 | |
Restricted Stock Units (RSUs) | |||
Number of awards | |||
Unvested at January 2, 2021 | 51,400 | ||
Granted at target | 11,200 | ||
Vested | (26,100) | ||
Forfeited/cancelled | (400) | ||
Unvested at January 1, 2022 | 36,100 | 51,400 | |
Fair value | $ 2.7 | $ 3.8 | $ 4.4 |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value unvested, beginning balance | $ 109.47 | ||
Weighted-average grant-date fair value, granted at target | 196.26 | $ 111.71 | $ 107.18 |
Weighted-average grant-date fair value, vested | 104.70 | ||
Weighted-average grant-date fair value, forfeited/cancelled | 108.44 | ||
Weighted-average grant-date fair value unvested, ending balance | $ 139.82 | $ 109.47 |
COST REDUCTION ACTIONS (Details
COST REDUCTION ACTIONS (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Apr. 28, 2018position | Jan. 01, 2022USD ($)position | Jan. 02, 2021USD ($)position | |
Restructuring charges: | |||
Charges, Net of Reversals | $ 13.3 | $ 55.3 | |
2018 Plan | |||
Restructuring charges: | |||
Net number of position reduced as a result of Cost Reduction Actions | position | 150 | ||
Charges, Net of Reversals | 0 | 0 | |
Expected number of positions reduced as a result of Cost Reduction Actions | position | 390 | ||
2018/2019 Actions | |||
Restructuring charges: | |||
Charges, Net of Reversals | $ 0 | $ 0 | |
2019/2020 Actions | |||
Restructuring charges: | |||
Net number of position reduced as a result of Cost Reduction Actions | position | 360 | 2,160 | |
Charges, Net of Reversals | $ 13.3 | $ 56 |
COST REDUCTION ACTIONS - Restru
COST REDUCTION ACTIONS - Restructuring Charges and Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Cost Reduction Actions | |||
Beginning Balance | $ 28.6 | $ 28.7 | |
Charges, Net of Reversals | 13.3 | 55.3 | |
Cash Payments | (27.1) | (51.7) | |
Non-cash Impairment | (2.4) | (6.2) | |
Foreign Currency Translation | (0.9) | 2.5 | |
Ending Balance | 11.5 | 28.6 | $ 28.7 |
Severance and related costs | |||
Cost Reduction Actions | |||
Charges, Net of Reversals | 10.5 | 49.1 | 45.3 |
2019/2020 Actions | |||
Cost Reduction Actions | |||
Charges, Net of Reversals | 13.3 | 56 | |
2019/2020 Actions | Severance and related costs | |||
Cost Reduction Actions | |||
Beginning Balance | 28.3 | 21.9 | |
Charges, Net of Reversals | 10.3 | 49.8 | |
Cash Payments | (26.2) | (45.7) | |
Non-cash Impairment | |||
Foreign Currency Translation | (0.9) | 2.3 | |
Ending Balance | 11.5 | 28.3 | 21.9 |
2019/2020 Actions | Asset impairment charges | |||
Cost Reduction Actions | |||
Beginning Balance | |||
Charges, Net of Reversals | 2.4 | 6.2 | |
Cash Payments | |||
Non-cash Impairment | (2.4) | (6.2) | |
Foreign Currency Translation | |||
Ending Balance | |||
2019/2020 Actions | Lease cancellation costs | |||
Cost Reduction Actions | |||
Beginning Balance | |||
Charges, Net of Reversals | 0.6 | ||
Cash Payments | (0.6) | ||
Non-cash Impairment | |||
Foreign Currency Translation | |||
Ending Balance | |||
2018/2019 Actions | |||
Cost Reduction Actions | |||
Charges, Net of Reversals | 0 | 0 | |
2018/2019 Actions | Severance and related costs | |||
Cost Reduction Actions | |||
Beginning Balance | 6.5 | ||
Charges, Net of Reversals | (0.7) | ||
Cash Payments | (6) | ||
Non-cash Impairment | |||
Foreign Currency Translation | 0.2 | ||
Ending Balance | 6.5 | ||
2018/2019 Actions | Lease cancellation costs | |||
Cost Reduction Actions | |||
Beginning Balance | 0.3 | 0.3 | |
Charges, Net of Reversals | |||
Cash Payments | (0.3) | ||
Non-cash Impairment | |||
Foreign Currency Translation | |||
Ending Balance | $ 0.3 | $ 0.3 |
COST REDUCTION ACTIONS - Rest_2
COST REDUCTION ACTIONS - Restructuring Charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Restructuring charges: | |||
Restructuring charges | $ 13.3 | $ 55.3 | |
Other expense (income), net | |||
Restructuring charges: | |||
Restructuring charges | 13.6 | 55.3 | $ 50.4 |
Label and Graphic Materials | Other expense (income), net | |||
Restructuring charges: | |||
Restructuring charges | 3.4 | 27.9 | 29 |
Retail Branding and Information Solutions | Other expense (income), net | |||
Restructuring charges: | |||
Restructuring charges | 7.6 | 18.7 | 9.8 |
Industrial and Healthcare Materials | Other expense (income), net | |||
Restructuring charges: | |||
Restructuring charges | 1.6 | 8.4 | 9.4 |
Corporate Segment | Other expense (income), net | |||
Restructuring charges: | |||
Restructuring charges | $ 1 | $ 0.3 | $ 2.2 |
TAXES BASED ON INCOME (Details)
TAXES BASED ON INCOME (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Current: | |||
U.S. federal tax | $ 7.3 | $ 1.1 | $ 11 |
State taxes | 5.3 | 1.9 | 0.5 |
International taxes | 229.9 | 168.5 | 148.1 |
Total | 242.5 | 171.5 | 159.6 |
Deferred: | |||
U.S. federal tax | (1.1) | 5 | (168) |
State taxes | (5.3) | 1.6 | (8.9) |
International taxes | 12.5 | (0.4) | (39.4) |
Total | 6.1 | 6.2 | (216.3) |
Provision for (benefit from) income taxes | $ 248.6 | $ 177.7 | $ (56.7) |
TAXES BASED ON INCOME - Increas
TAXES BASED ON INCOME - Increase (Decrease) in Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Tax provision computed at the U.S. federal statutory rate | $ 208.5 | $ 154.8 | $ 52.4 |
Increase (decrease) in taxes resulting from: | |||
State taxes, net of federal tax benefit | 4.5 | 6.9 | (12.8) |
U.S. pension plan settlements and related charges | (76.6) | ||
Foreign earnings taxed at different rates | 75.4 | 51.4 | 56.2 |
Excess tax benefits associated with stock-based payments | (4.1) | (3.2) | (7.8) |
Foreign tax structuring and planning transactions | (47.9) | ||
GILTI high-tax exclusion election, net | (22.8) | (12.5) | |
Valuation allowance | (4.8) | (3.3) | 2 |
U.S. federal research and development tax credits | (6.2) | (6.2) | (6.1) |
Tax contingencies and audit settlements | 3.9 | (5.5) | (11.8) |
Other items, net | (5.8) | (4.7) | (4.3) |
Provision for (benefit from) income taxes | 248.6 | 177.7 | (56.7) |
Benefits earned related to GILTI exclusion election | 8.7 | ||
Benefits earned related to GILTI exclusion election for amended tax return | $ 14.1 | ||
Return-to-provision adjustment related to an election to be made on our 2019 amended U.S. tax return | $ 12.5 | ||
ADPP | |||
Increase (decrease) in taxes resulting from: | |||
Tax effects of pension plan settlement charges associated with the termination of the ADPP | 102 | ||
Release of stranded tax effects in AOCI through the income statement | $ 77 |
TAXES BASED ON INCOME - Effecti
TAXES BASED ON INCOME - Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Effective tax rate (as a percent) | 25.00% | 24.10% | (22.70%) |
Recognized loss on settlements | $ 1.6 | $ 0.5 | $ 444.1 |
Net tax charge related to the tax on global intangible low-taxed income ("GILTI") of foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from foreign-derived intangible income ("FDII") | 28.5 | 22.1 | 24.7 |
Deferred tax liability related to future tax consequences from repatriating accumulated earnings from foreign subsidiaries that are not indefinitely reinvested | 16.2 | ||
Return-to-provision adjustment related to an election to be made on our 2019 amended U.S. tax return | $ 12.5 | ||
Return-to-provision benefit on amended 2020 U.S. tax return. | 11.3 | ||
Return-to-provision benefit related to a GILTI exclusion election made on our amended 2018 U.S. federal tax return | 14.1 | ||
Return-to-provision benefit related to a GILTI exclusion election and a higher FDII deduction upon completion of our 2020 U.S. federal tax return | $ 8.7 | ||
ADPP | |||
Tax benefits related to the effective settlement of the ADPP | 179 | ||
Tax effect on the pretax charge | 102 | ||
Recognized loss on settlements | 444 | ||
Release of stranded tax effects in AOCI through the income statement | 77 | ||
Tax benefit from a foreign structuring transaction resulting in previously recognized tax losses becoming permanent | $ 47.9 |
TAXES BASED ON INCOME - Income
TAXES BASED ON INCOME - Income (Loss) from Continuing Operations before Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Taxes Based on Income | |||
U.S. | $ 88 | $ 123.8 | $ (355.4) |
International | 904.6 | 613.5 | 604.9 |
Income before taxes | $ 992.6 | $ 737.3 | $ 249.5 |
TAXES BASED ON INCOME - Schedul
TAXES BASED ON INCOME - Schedule of Components of the Temporary Differences (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
Schedule of components of the temporary differences | ||
Accrued expenses not currently deductible | $ 34.6 | $ 28.1 |
Net operating loss carryforwards | 154.4 | 161.4 |
Tax credit carryforwards | 34.6 | 55.9 |
Stock-based compensation | 13.6 | 10.7 |
Pension and other postretirement benefits | 38.8 | 52.4 |
Inventory reserve | 14.7 | 12.9 |
Lease liabilities | 42.5 | 39 |
Other assets | 25.3 | 16.1 |
Valuation allowance | (70.1) | (68.2) |
Total deferred tax assets | 288.4 | 308.3 |
Depreciation and amortization | (268.9) | (80.2) |
Repatriation accrual | (16.2) | (39) |
Foreign operating loss recapture | (3.4) | (3.6) |
Lease assets | (43.8) | (38.7) |
Total deferred tax liabilities | (332.3) | (161.5) |
Total net deferred tax assets (liabilities) | $ 146.8 | |
Total net deferred tax assets (liabilities) | $ (43.9) |
TAXES BASED ON INCOME - Net Ope
TAXES BASED ON INCOME - Net Operating Loss and Tax Carryforwards (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | $ 508 | $ 563 |
Tax credit carryforwards of domestic and foreign subsidiaries | 34.6 | $ 55.9 |
Net operating loss and credit carryforward | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 507.9 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 34.6 | |
2022 | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 1.7 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 0.4 | |
2023 | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 3.8 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 0.4 | |
2024 | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 2.9 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 0.2 | |
2025 | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 3.2 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 0.2 | |
2026 | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 9.4 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 1 | |
2027 - 2041 | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 19.9 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 28.2 | |
Indefinite life/no expiry | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 467 | |
Tax credit carryforwards of domestic and foreign subsidiaries | 4.2 | |
State | ||
Net operating loss and credit carryforward [Line Items] | ||
Net operating loss carryforwards of foreign subsidiaries | 547 | |
Operating loss carryforwards, valuation allowance | $ 479 |
TAXES BASED ON INCOME - Unrecog
TAXES BASED ON INCOME - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 |
Taxes Based on Income | |||
Unrecognized tax benefits | $ 74 | $ 72 | $ 69.9 |
Unrecognized tax benefits, if recognized, would reduce annual effective income tax rate | 68 | 63 | |
Accrued interest and penalties for uncertain tax positions, net of tax benefit | $ 19 | $ 22 |
TAXES BASED ON INCOME - Reconci
TAXES BASED ON INCOME - Reconciliation of the Beginning and Ending Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at beginning of year | $ 72 | $ 69.9 |
Additions for tax positions of current year | 9.1 | 6.5 |
Additions (reductions) for tax positions of prior years, net | 1.2 | 5.2 |
Settlements with tax authorities | (1.1) | (3.3) |
Expirations of statutes of limitations | (5.2) | (8.7) |
Changes due to translation of foreign currencies | (2) | 2.4 |
Balance at end of year | 74 | $ 72 |
Reasonably possible decrease in uncertain tax positions, including interest and penalties, during the next 12 months | $ 9 |
SEGMENT AND DISAGGREGATED REV_3
SEGMENT AND DISAGGREGATED REVENUE INFORMATION - Net Sales to Unaffiliated Customers (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | $ 8,408.3 | $ 6,971.5 | $ 7,070.1 |
Industrial and Healthcare Materials | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 776.1 | 625.5 | 673.9 |
Label and Graphic Materials | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 5,430.4 | 4,715.1 | 4,745.9 |
Retail Branding and Information Solutions | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 2,201.8 | 1,630.9 | 1,650.3 |
Retail Branding and Information Solutions | Apparel | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 1,839.1 | 1,432.3 | 1,458.5 |
Retail Branding and Information Solutions | Identification Solutions and Vestcom | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 362.7 | 198.6 | 191.8 |
U.S. | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 2,065.2 | 1,683.6 | 1,638.8 |
U.S. | Label and Graphic Materials | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 1,462.5 | 1,294.3 | 1,246.6 |
Europe | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 2,541.4 | 2,164.7 | 2,160.2 |
Europe | Label and Graphic Materials | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 2,025.5 | 1,758.1 | 1,767.9 |
Asia | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 2,914.5 | 2,378.5 | 2,458.5 |
Asia | Label and Graphic Materials | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 1,224.5 | 1,040.8 | 1,065 |
Latin America | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 537.6 | 440.3 | 498.3 |
Latin America | Label and Graphic Materials | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 395.4 | 340.3 | 375.4 |
Other international | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 349.6 | 304.4 | 314.3 |
Other international | Label and Graphic Materials | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | 322.5 | 281.6 | 291 |
China Including HongKong | |||
Net sales to unaffiliated customers | |||
Net sales to unaffiliated customers | $ 1,680 | $ 1,310 | $ 1,380 |
Net sales | Revenue from Rights Concentration Risk [Member] | Single Customer [Member] | |||
Net sales to unaffiliated customers | |||
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Net sales | Revenue from Rights Concentration Risk [Member] | Ten Customer [Member] | |||
Net sales to unaffiliated customers | |||
Concentration risk percentage | 16.00% | 17.00% | 16.00% |
SEGMENT AND DISAGGREGATED REV_4
SEGMENT AND DISAGGREGATED REVENUE INFORMATION - Additional Financial Information by Reportable Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | $ 8,408.3 | $ 6,971.5 | $ 7,070.1 |
Interest expense | (70.2) | (70) | (75.8) |
Other non-operating expense (income), net | 4.1 | (1.9) | (445.2) |
Income before taxes | 992.6 | 737.3 | 249.5 |
Capital expenditures | 266.6 | 206.2 | 225.1 |
Depreciation and amortization expense | 244.1 | 205.3 | 179 |
Other expense (income), net | 5.6 | 53.6 | 53.2 |
Intersegment sales | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | 149.1 | 114.2 | 109.6 |
Label and Graphic Materials | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | 5,430.4 | 4,715.1 | 4,745.9 |
Label and Graphic Materials | Operating segments | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Income before taxes | 801.7 | 688.8 | 601.5 |
Capital expenditures | 133.6 | 87.3 | 137.8 |
Depreciation and amortization expense | 114.3 | 107 | 100.2 |
Other expense (income), net | (28.1) | 22.2 | 28.3 |
Label and Graphic Materials | Intersegment sales | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | 98.5 | 80.3 | 80.2 |
Retail Branding and Information Solutions | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | 2,201.8 | 1,630.9 | 1,650.3 |
Retail Branding and Information Solutions | Operating segments | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Income before taxes | 257.2 | 144.7 | 196.6 |
Capital expenditures | 96.3 | 101.6 | 63.1 |
Depreciation and amortization expense | 102.2 | 71.6 | 52.6 |
Other expense (income), net | 36.6 | 22.7 | 9.9 |
Retail Branding and Information Solutions | Intersegment sales | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | 37.3 | 27.5 | 20.6 |
Industrial and Healthcare Materials | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | 776.1 | 625.5 | 673.9 |
Industrial and Healthcare Materials | Operating segments | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Income before taxes | 81.6 | 58.2 | 60 |
Capital expenditures | 36.7 | 17.3 | 24.2 |
Depreciation and amortization expense | 27.6 | 26.7 | 26.2 |
Other expense (income), net | 2.4 | 8.4 | 9.4 |
Industrial and Healthcare Materials | Intersegment sales | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Net sales to unaffiliated customers | 13.3 | 6.4 | 8.8 |
Corporate | Operating segments | |||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | |||
Income before taxes | (81.8) | (82.5) | (87.6) |
Other expense (income), net | $ (5.3) | $ 0.3 | $ 5.6 |
SEGMENT AND DISAGGREGATED REV_5
SEGMENT AND DISAGGREGATED REVENUE INFORMATION - Other Expense (Income), Net by Type (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Restructuring charges: | |||
Restructuring charges | $ 13.3 | $ 55.3 | |
Other items: | |||
Transaction and related costs | 20.9 | 4.2 | $ 2.6 |
Loss (gain) on sales of assets, net | 0.2 | (0.5) | (3.2) |
Gain on venture investments, net | (23) | (5.4) | |
Gain on sale of product line | (5.7) | ||
Outcomes of legal proceedings, net | (0.4) | 3.4 | |
Other expense (income), net | 5.6 | 53.6 | 53.2 |
Severance and related costs | |||
Restructuring charges: | |||
Restructuring charges | 10.5 | 49.1 | 45.3 |
Asset impairment charges and lease cancellation costs | |||
Restructuring charges: | |||
Restructuring charges | $ 3.1 | $ 6.2 | $ 5.1 |
SEGMENT AND DISAGGREGATED REV_6
SEGMENT AND DISAGGREGATED REVENUE INFORMATION - Other Expense (Income), Net by Type (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2022 | Dec. 28, 2019 | |
Other Nonrecurring Income Expense [Line Items] | ||
Outcomes of legal proceedings, net | $ (0.4) | $ 3.4 |
Reduction in Taxes [Member] | BRAZIL | ||
Other Nonrecurring Income Expense [Line Items] | ||
Outcomes of legal proceedings, net | (29.1) | |
Infringement of Patent [Member] | ||
Other Nonrecurring Income Expense [Line Items] | ||
Outcomes of legal proceedings, net | $ 26.6 |
SEGMENT AND DISAGGREGATED REV_7
SEGMENT AND DISAGGREGATED REVENUE INFORMATION - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 |
Property, plant and equipment, net | |||
Property, plant and equipment, net | $ 1,477.7 | $ 1,343.7 | $ 1,210.7 |
U.S. | |||
Property, plant and equipment, net | |||
Property, plant and equipment, net | 524 | 403.1 | 366.9 |
International | |||
Property, plant and equipment, net | |||
Property, plant and equipment, net | 953.7 | 940.6 | 843.8 |
China Including HongKong | |||
Property, plant and equipment, net | |||
Property, plant and equipment, net | $ 290 | $ 297 | $ 282 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Inventories (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 |
Inventories | ||
Raw materials | $ 393.6 | $ 268.6 |
Work-in-progress | 233.1 | 210.3 |
Finished goods | 280.5 | 238.3 |
Inventories | $ 907.2 | $ 717.2 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 3,626.2 | $ 3,476.3 | |
Accumulated depreciation | (2,148.5) | (2,132.6) | |
Property, plant and equipment, net | 1,477.7 | 1,343.7 | $ 1,210.7 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 28.6 | 26.1 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 777.6 | 746.4 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 2,582.2 | 2,538.6 | |
Construction-in-progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 237.8 | $ 165.2 |
SUPPLEMENTAL FINANCIAL INFORM_5
SUPPLEMENTAL FINANCIAL INFORMATION - Allowance of credit losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Allowance for Credit Losses | |||
Balance at beginning of year | $ 44.6 | $ 27.1 | |
(Reversal of) provision for credit losses | (4.7) | 20.3 | $ 10.6 |
Amounts written off | (7.7) | (5.7) | |
Other, including foreign currency translation | 0.8 | 2.9 | |
Balance at end of year | $ 33 | $ 44.6 | $ 27.1 |
SUPPLEMENTAL FINANCIAL INFORM_6
SUPPLEMENTAL FINANCIAL INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Research and Development | |||
Research and development expense | $ 136.6 | $ 112.8 | $ 92.6 |
Cash paid for interest and income taxes | |||
Interest | 62.8 | 69.6 | 74.3 |
Income taxes, net of refunds | 253.4 | 203.4 | 155 |
Deferred Revenue | |||
Total deferred revenue | 26.6 | 20.3 | |
Revenue recognized during the period | 18.4 | 12 | 10.8 |
Other current liabilities | |||
Deferred Revenue | |||
Total deferred revenue | 24.7 | 18.9 | |
Long-term retirement benefits and other liabilities | |||
Deferred Revenue | |||
Total deferred revenue | 1.9 | 1.4 | |
Total software | |||
Capitalized software costs | |||
Software amortization expense | 30.1 | 29 | $ 20.8 |
Total software | Other assets | |||
Capitalized software costs | |||
Cost | 403.9 | 506.5 | |
Accumulated amortization | (280.6) | (370.1) | |
Software, net | $ 123.3 | $ 136.4 |