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Document and Entity Information - USD ($)	9 Months Ended
Document and Entity Information - USD ($)	Oct. 02, 2010	Oct. 30, 2010	Jul. 04, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	AVERY DENNISON CORPORATION
Entity Central Index Key	0000008818
Document Type	10-Q
Document Period End Date	Oct. 02, 2010
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--01-02
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 2,416,413,926
Entity Common Stock, Shares Outstanding		109,417,343

Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Oct. 02, 2010	Jan. 02, 2010
Current assets:
Cash and cash equivalents	$ 157.8	$ 138.1
Trade accounts receivable, less allowances of $57.5 and $56.2 at October 2, 2010 and January 2, 2010, respectively	1,079.2	918.6
Inventories, net	576.2	477.3
Current deferred and refundable income taxes	161.1	103.5
Other current assets	155.6	95.7
Total current assets	2,129.9	1,733.2
Property, plant and equipment	3,177.8	3,207.9
Accumulated depreciation	(1,910.1)	(1,853.2)
Property, plant and equipment, net	1,267.7	1,354.7
Goodwill	941.4	950.8
Other intangibles resulting from business acquisitions, net	237.4	262.2
Non-current deferred and refundable income taxes	188.9	236.6
Other assets	447.9	465.3
Total assets	5,213.2	5,002.8
Current liabilities:
Short-term and current portion of long-term debt	443.5	535.6
Accounts payable	762.8	689.8
Current deferred and payable income taxes	64.4	40.8
Other current liabilities	622.1	601.5
Total current liabilities	1,892.8	1,867.7
Long-term debt	1,065.8	1,088.7
Long-term retirement benefits and other liabilities	607.3	556.0
Non-current deferred and payable income taxes	$ 115.3	$ 127.8
Commitments and contingencies (see Note 14)
Shareholders' equity:
Common stock, $1 par value, authorized - 400,000,000 shares at October 2, 2010 and January 2, 2010; issued - 124,126,624 shares at October 2, 2010 and January 2, 2010; outstanding - 105,833,213 shares and 105,298,317 shares at October 2, 2010 and January 2, 2010, respectively	$ 124.1	$ 124.1
Capital in excess of par value	742.8	722.9
Retained earnings	1,635.9	1,499.7
Employee stock benefit trust, 3,569,130 shares and 6,744,845 shares at October 2, 2010 and January 2, 2010, respectively	(131.0)	(243.1)
Treasury stock at cost, 14,709,281 shares and 12,068,462 shares at October 2, 2010 and January 2, 2010, respectively	(688.4)	(595.8)
Accumulated other comprehensive loss	(151.4)	(145.2)
Total shareholders' equity	1,532.0	1,362.6
Total liabilities and shareholders' equity	$ 5,213.2	$ 5,002.8

Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($)	Oct. 02, 2010	Jan. 02, 2010
Current assets:
Allowances for trade accounts receivable	$ 57,500,000	$ 56,200,000
Shareholders' equity:
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	124,126,624	124,126,624
Common stock, shares outstanding	105,833,213	105,298,317
Employee stock benefit trust, shares	3,569,130	6,744,845
Treasury stock, shares	14,709,281	12,068,462

Consolidated Statement of Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2010	Oct. 03, 2009	Oct. 02, 2010	Oct. 03, 2009
Consolidated Statement of Income [Abstract]
Net sales	$ 1,640.8	$ 1,549.3	$ 4,875.6	$ 4,430.9
Cost of products sold	1,187.8	1,113.3	3,491.4	3,259.5
Gross profit	453.0	436.0	1,384.2	1,171.4
Marketing, general and administrative expense	346.4	323.1	1,025.4	927.4
Goodwill and indefinite-lived intangible asset impairment charges				832.0
Interest expense	19.1	19.1	57.7	67.0
Other expense, net	10.5	35.5	21.4	162.4
Income (loss) before taxes	77.0	58.3	279.7	(817.4)
Provision for (benefit from) income taxes	12.8	(4.2)	77.0	(20.8)
Net income (loss)	$ 64.2	$ 62.5	$ 202.7	$ (796.6)
Per share amounts:
Net income (loss) per common share	$ 0.61	$ 0.59	$ 1.92	$ (7.73)
Net income (loss) per common share, assuming dilution	0.6	0.59	1.9	(7.73)
Dividends	$ 0.2	$ 0.2	$ 0.6	$ 1.02
Average shares outstanding:
Common shares	105,800,000	105,100,000	105,600,000	103,100,000
Common shares, assuming dilution	107,100,000	106,000,000	106,700,000	103,100,000
Common shares outstanding at period end	105,833,213	105,200,000	105,833,213	105,200,000

Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Oct. 02, 2010	Oct. 03, 2009
Operating Activities
Net income (loss)	$ 202.7	$ (796.6)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	132.4	138.2
Amortization	55.5	55.8
Provision for doubtful accounts	15.2	16.3
Goodwill and indefinite-lived intangible asset impairment charges		832.0
Asset impairment and net (gain) loss on sale and disposal of assets	(0.5)	40.9
Loss from debt extinguishment	1.2	21.2
Stock-based compensation	25.9	19.8
Other non-cash expense and loss	33.5	16.2
Other non-cash income and gain	(0.5)	(7.2)
Changes in assets and liabilities and other adjustments, net of the effect of business acquisitions	(181.8)	(19.7)
Net cash provided by operating activities	283.6	316.9
Investing Activities
Purchases of property, plant and equipment, net	(50.1)	(45.7)
Purchases of software and other deferred charges	(17.1)	(20.4)
Proceeds from sale of investments, net	0.2	0.3
Other		(5.0)
Net cash used in investing activities	(67.0)	(70.8)
Financing Activities
Net decrease in borrowings (maturities of 90 days or less)	(35.7)	(58.1)
Additional borrowings (maturities longer than 90 days)	249.8
Payments of debt (maturities longer than 90 days)	(340.7)	(93.2)
Dividends paid	(66.5)	(112.3)
Proceeds from exercise of stock options, net	2.1
Other	(7.3)	2.0
Net cash used in financing activities	(198.3)	(261.6)
Effect of foreign currency translation on cash balances	1.4	1.9
Increase (decrease) in cash and cash equivalents	19.7	(13.6)
Cash and cash equivalents, beginning of year	138.1	105.5
Cash and cash equivalents, end of period	$ 157.8	$ 91.9

Goodwill and Other Intangibles Resulting from Business Acquisitions

9 Months Ended

Oct. 02, 2010

Goodwill and Other Intangibles Resulting from Business Acquisitions [Abstract]

Goodwill and Other Intangibles Resulting from Business Acquisitions

Note 3. Goodwill and Other Intangibles Resulting from Business Acquisitions

Goodwill

Changes in the net carrying amount of goodwill from operations for 2010 and 2009, by reportable segment, were as follows:


	Pressure-			Retail			Office and			Other
	sensitive			Information			Consumer			specialty
	Materials			Services			Products			converting
(In millions)	Segment			Segment			Segment			businesses			Total

Balance as of December 27, 2008	$	334.4		$	1,211.6		$	167.2		$	3.5		$	1,716.7
Acquisition adjustments⁽¹⁾		—			30.9			—			—			30.9
Goodwill impairment charges⁽²⁾		—			(820.0	)		—			—			(820.0	)
Translation adjustments		17.0			.3			5.8			.1			23.2

Balance as of January 2, 2010	$	351.4		$	422.8		$	173.0		$	3.6		$	950.8

Acquisitions		—			.7			—			—			.7
Translation adjustments		(6.4	)		1.0			(4.6	)		(0.1	)		(10.1	)

Balance as of October 2, 2010	$	345.0		$	424.5		$	168.4		$	3.5		$	941.4

Goodwill Summary:
Goodwill	$	345.0		$	1,244.5		$	168.4		$	3.5		$	1,761.4
Accumulated impairment losses		—			(820.0	)		—			—			(820.0	)

Balance as of October 2, 2010	$	345.0		$	424.5		$	168.4		$	3.5		$	941.4


⁽¹⁾		Acquisition adjustments in 2009 consisted of opening balance sheet adjustments associated with the DM Label Group (“DM Label”) acquisition in April 2008 of $32.6 and other acquisition adjustments of $(1.7).

⁽²⁾		In the first quarter of 2009, the Company recorded a non-cash impairment charge of $820 for the retail information services reporting unit, with no additional impairment charges recorded thereafter.

Indefinite-Lived Intangible Assets

In connection with the acquisition of Paxar Corporation, the Company acquired approximately $30 million of indefinite-lived intangible assets, consisting of certain trade names and trademarks, which are not subject to amortization because they have an indefinite useful life. In the first quarter of 2009, the Company recorded a non-cash impairment charge of $12 million related to these indefinite-lived intangible assets, with no additional impairment charges recorded thereafter. At October 2, 2010, the carrying value of these indefinite-lived intangible assets was $18 million. At January 2, 2010, the carrying value of these indefinite-lived intangible assets was $17.9 million, which included $.1 million of negative currency impact.

Finite-Lived Intangible Assets

The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions at October 2, 2010 and January 2, 2010, which continue to be amortized:


	October 2, 2010						January 2, 2010
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
(In millions)	Amount		Amortization		Amount		Amount		Amortization		Amount

Customer relationships	$	292.4	$	112.7	$	179.7	$	295.0	$	94.8	$	200.2
Patents and other acquired technology		53.6		27.0		26.6		53.6		23.5		30.1
Trade names and trademarks		45.0		38.1		6.9		47.0		39.8		7.2
Other intangibles		14.3		8.1		6.2		13.9		7.1		6.8

Total	$	405.3	$	185.9	$	219.4	$	409.5	$	165.2	$	244.3

Amortization expense on finite-lived intangible assets resulting from business acquisitions was $8.3 million and $24.6 million for the three and nine months ended October 2, 2010, respectively, and $8.2 million and $25.2 million for the three and nine months ended October 3, 2009, respectively. As of October 2, 2010, the estimated amortization expense for finite-lived intangible assets resulting from completed business acquisitions for each of the next five fiscal years is expected to be approximately $33 million in 2010, $33 million in 2011, $33 million in 2012, $31 million in 2013, and $28 million in 2014.

As of October 2, 2010, the weighted-average amortization periods from the date of acquisition and weighted-average remaining useful lives of finite-lived intangible assets were as follows:


	Weighted-average		Weighted-
	amortization		average
	periods from the		remaining
(In years)	date of acquisition		useful life

Customer relationships		14		8
Patents and other acquired technology		13		6
Trade names and trademarks		12		5
Other intangibles		7		3

Debt	9 Months Ended
Debt	Oct. 02, 2010
Debt [Abstract]
Debt	Note 4. Debt On March 10, 2009, the Company completed an exchange of approximately 6.6 million (or 75.15%) of its outstanding Corporate HiMEDS units. In aggregate, the exchange resulted in the extinguishment of approximately $331 million of senior notes that are part of the Corporate HiMEDS units, the issuance of approximately 6.5 million shares of the Company’s common stock (par value $1.00 per share) with a book value of approximately $297 million, and the payment of approximately $43 million in cash to participating holders who validly tendered their Corporate HiMEDS units. As a result of this exchange, the Company recorded a debt extinguishment loss of approximately $21 million (included in “Other expense, net” in the unaudited Consolidated Statement of Income) in the first quarter of 2009, which included a write-off of $9.6 million related to unamortized debt issuance costs. Subsequent to the end of the third quarter of 2010, on November 5, 2010, the Company completed the remarketing of its remaining HiMEDS senior notes in accordance with the original terms of the Corporate HiMEDS units by purchasing the approximately $109 million of these senior notes bearing an interest rate of 5.350% per year, due 2020. The remarketing of these senior notes is scheduled to settle on November 15, 2010 when the holders of these Corporate HiMEDS units use the net proceeds from the remarketing to purchase shares of the Company’s common stock from the Company. The amount of shares purchased by these holders depends upon the Company’s stock price at that time; based on the Company’s share price as of October 2, 2010, the holders would purchase approximately 2 million shares from the Company. After the transaction closes on November 15, 2010, the Company intends to cancel the senior notes it purchased in the remarketing. On April 13, 2010, the Company issued $250 of million of senior notes bearing an interest rate of 5.375% per year, due April 2020. The approximately $248 million in proceeds from the offering, net of underwriting discounts and offering expenses, were used, together with commercial paper borrowings, to repay the $325 million in indebtedness outstanding under a term loan credit facility of one of the Company’s wholly-owned subsidiaries in May 2010. In the second quarter of 2010, the Company recorded a debt extinguishment loss of $1.2 million (included in “Other expense, net” in the unaudited Consolidated Statement of Income) related to unamortized debt issuance costs from the term loan. As of October 2, 2010, the Company was in compliance with its financial covenants. The fair value of the Company’s debt is estimated based on the discounted amount of future cash flows using the current rates offered to the Company for debt of similar remaining maturities. The fair value of the Company’s total debt, including short-term borrowings, was $1.56 billion at October 2, 2010 and $1.60 billion at January 2, 2010. Fair value amounts were determined primarily based on Level 2 inputs, which are defined as inputs other than quoted prices in active markets that are either directly or indirectly observable.

Pension and Other Postretirement Benefits

9 Months Ended

Oct. 02, 2010

Pension and Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Note 5. Pension and Other Postretirement Benefits

In the third quarter of 2010, the Company made the decision to freeze two of its U.S. defined benefit plans – the Avery Dennison Pension Plan and the Benefit Restoration Plan (the “Plans”) effective December 31, 2010. Pension benefits under these Plans will stop accruing after December 31, 2010; however, pension benefits accrued through December 31, 2010 will be preserved and paid out (if fully vested at the time of retirement or other qualified event) under the terms of the Plans. As a result of freezing the Plans, the Company recognized a curtailment loss of $2.4 million in “Other expense, net” in the unaudited Consolidated Statement of Income and a net actuarial loss of approximately $59 million in “Accumulated other comprehensive loss” in the unaudited Condensed Consolidated Balance Sheet in the third quarter of 2010.

The following table sets forth the components of net periodic benefit cost for the periods shown:


	Pension Benefits
	Three Months Ended												Nine Months Ended
	October 2, 2010						October 3, 2009						October 2, 2010						October 3, 2009
(In millions)	U.S.			Int’l			U.S.			Int’l			U.S.			Int’l			U.S.			Int’l

Components of net periodic benefit cost:
Service cost	$	6.3		$	2.3		$	4.9		$	3.0		$	17.8		$	7.1		$	14.9		$	8.7
Interest cost		9.9			5.9			9.6			6.6			30.1			18.3			28.7			19.0
Expected return on plan assets		(11.9	)		(6.2	)		(12.1	)		(6.8	)		(36.3	)		(19.3	)		(36.4	)		(19.7	)
Recognized net actuarial loss		6.1			.6			2.6			.5			15.2			1.8			7.7			1.5
Amortization of prior service cost		.2			.1			.2			.1			.6			.3			.6			.3
Amortization of transition asset		—			(.2	)		—			(.1	)		—			(.4	)		—			(.4	)
Recognized loss on curtailment and settlement of obligation		2.4			—			—			—			2.4			1.9			—			—

Net periodic benefit cost	$	13.0		$	2.5		$	5.2		$	3.3		$	29.8		$	9.7		$	15.5		$	9.4


	U.S. Postretirement Health Benefits
	Three Months Ended						Nine Months Ended
(In millions)	October 2, 2010			October 3, 2009			October 2, 2010			October 3, 2009

Components of net periodic benefit cost:
Service cost	$	.4		$	.2		$	1.1		$	.7
Interest cost		.5			.4			1.5			1.4
Recognized net actuarial loss		.2			.4			1.2			1.2
Amortization of prior service cost		(.5	)		(.5	)		(1.5	)		(1.5	)

Net periodic benefit cost	$	.6		$	.5		$	2.3		$	1.8

The Company contributed $2.4 million and $7.8 million to its U.S. pension plans during the nine months ended October 2, 2010 and October 3, 2009, respectively. The Company expects to contribute at least $25 million to its U.S. pension plans in the fourth quarter of 2010. Additionally, the Company contributed $2.7 million and $2.2 million to its U.S. postretirement health benefit plan during the nine months ended October 2, 2010 and October 3, 2009, respectively. In the fourth quarter of 2010, the Company expects to contribute an additional $.4 million to its U.S. postretirement health benefit plan.

The Company contributed approximately $19 million and approximately $23 million to its international pension plans during the nine months ended October 2, 2010 and October 3, 2009, respectively. In the fourth quarter of 2010, the Company expects to contribute approximately $3 million to its international pension plans.

The Company recognized $2.8 million and $9.1 million for the three and nine months ended October 2, 2010, respectively, and $2.4 million and $6.4 million for the three and nine months ended October 3, 2009, respectively, related to the Company’s matching contributions to participant contributions in the Company’s defined contribution plan. This expense was recorded in “Marketing, general and administrative expense” in the unaudited Consolidated Statement of Income and was funded through the issuance of shares from the Company’s Employee Stock Benefit Trust.

Cost Reduction Actions

9 Months Ended

Oct. 02, 2010

Cost Reduction Actions [Abstract]

Cost Reduction Actions

Note 8. Cost Reduction Actions

Severance charges under the restructuring actions below were recorded to “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheet. Severance and related costs represent cash paid or to be paid to employees terminated under these actions. Asset impairments are based on the estimated market value of the assets. Charges below are included in “Other expense, net” in the unaudited Consolidated Statement of Income.

2010

During the first nine months of 2010, the Company continued its cost reduction program initiated in late 2008 and implemented additional restructuring actions. The Company recorded $15.5 million in pretax charges, which consisted of $12.4 million of severance and related costs, $2.1 million of asset impairment charges, and $1 million of lease cancellation costs. These actions are resulting in a reduction of approximately 900 positions. As of October 2, 2010, approximately 685 of these employees remain with the Company, the majority of whom are expected to leave in 2011. The table below details the accruals and payments related to these actions:


	Pressure-			Retail			Office and			Other
	sensitive			Information			Consumer			specialty
	Materials			Services			Products			converting
(In millions)	Segment			Segment			Segment			businesses			Total

Total severance and related costs accrued during the quarters ended:
April 3, 2010	$	1.5		$	2.2		$	.7		$	.3		$	4.7
July 3, 2010		2.0			—			(.1	)		—			1.9
October 2, 2010		.1			.9			4.5			.3			5.8

Total expense accrued during 2010		3.6			3.1			5.1			.6			12.4
2010 Settlements		(3.0	)		(1.9	)		(.1	)		(.2	)		(5.2	)

Balance at October 2, 2010	$	.6		$	1.2		$	5.0		$	.4		$	7.2


Asset Impairment
Machinery and equipment	$	.2		$	.2		$	—		$	.1		$	.5
Buildings		.4			.7			—			—			1.1
Land		.5			—			—			—			.5
Other
Lease Cancellations		—			—			1.0			—			1.0

	$	1.1		$	.9		$	1.0		$	.1		$	3.1

2009

In 2009, the Company continued its cost reduction program initiated in late 2008, resulting in a reduction of approximately 3,335 positions, impairment of certain assets, and lease cancellations. At October 2, 2010, approximately 295 of these employees remain with the Company and are expected to leave in 2010. Pretax charges related to these actions totaled $129.1 million, including severance and related costs of $86.8 million, impairment of fixed assets, buildings, land and patents of $39.9 million, and lease cancellation costs of $2.4 million. The table below details the accruals and payments related to these actions:


	Pressure-			Retail			Office and			Other
	sensitive			Information			Consumer			specialty
	Materials			Services			Products			converting
(In millions)	Segment			Segment			Segment			businesses			Total

Total severance and related costs accrued during the quarters ended:
April 4, 2009	$	7.6		$	5.8		$	.9		$	2.8		$	17.1
July 4, 2009		13.4			4.6			.3			7.5			25.8
October 3, 2009		3.9			21.0			(.2	)		2.3			27.0
January 2, 2010		2.3			6.3			8.0			.3			16.9

Total expense accrued during 2009		27.2			37.7			9.0			12.9			86.8
2009 Settlements		(19.5	)		(23.6	)		(.3	)		(11.0	)		(54.4	)
2010 Settlements		(6.9	)		(11.1	)		(7.9	)		(1.9	)		(27.8	)

Balance at October 2, 2010	$	.8		$	3.0		$	.8		$	—		$	4.6


Asset Impairments
Machinery and equipment	$	2.7		$	10.6		$	.7		$	14.0		$	28.0
Buildings		.7			2.4			3.9			.9			7.9
Land		.1			—			—			—			.1
Patents		1.9			.2			.4			1.4			3.9
Other
Lease cancellations		1.7			.7			—			—			2.4

	$	7.1		$	13.9		$	5.0		$	16.3		$	42.3

Financial Instruments and Foreign Currency

9 Months Ended

Oct. 02, 2010

Financial Instruments and Foreign Currency [Abstract]

Financial Instruments and Foreign Currency

Note 9. Financial Instruments and Foreign Currency

The Company enters into certain foreign exchange hedge contracts to reduce its exposure to 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 its operations outside the U.S. The Company enters into certain interest rate contracts to help manage its exposure to interest rate fluctuations. The Company also enters into certain natural gas and other commodity futures contracts to hedge price fluctuations for a portion of its anticipated domestic purchases. The maximum length of time for which the Company hedges its exposure to the variability in future cash flows for forecasted transactions is generally 12 to 24 months.

As of October 2, 2010, the U.S. dollar equivalent notional values of the Company’s outstanding commodity contracts and foreign currency contracts were $9.5 million and approximately $1.2 billion, respectively.

The Company recognizes all derivative instruments as either assets or liabilities at fair value. The Company designates commodity forward contracts on forecasted purchases of commodities and foreign currency contracts on forecasted transactions as cash flow hedges and designates foreign currency contracts on existing balance sheet items as fair value hedges.

On April 1, 2010, the Company entered into a contract to lock in the Treasury rate component of the interest rate on its $250 million debt issuance, which is discussed in Note 4, “Debt.” On April 9, 2010, the contract settled at a loss of $.3 million which is being amortized into interest expense over the term of the related debt.

The following table provides the balances and locations of derivatives as of October 2, 2010:


	Asset			Liability
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value

Foreign exchange contracts	Other current assets	$	14.4	Other current liabilities	$	5.6
Commodity contracts	Other current assets		.2	Other current liabilities		3.5

		$	14.6		$	9.1

The following table provides the balances and locations of derivatives as of January 2, 2010:


	Asset			Liability
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value

Foreign exchange contracts	Other current assets	$	5.0	Other current liabilities	$	6.5
Commodity contracts	Other current assets		.5	Other current liabilities		3.5

		$	5.5		$	10.0

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings, resulting in no net material impact to income.

The following table provides the components of the gain (loss) recognized in income related to fair value hedging contracts. The corresponding gains or losses on the underlying hedged items approximated the net gain (loss) on these fair value hedging contracts.


		Three Months Ended						Nine Months Ended
(In millions)	Location of Gain (Loss) in Income	October 2, 2010			October 3, 2009			October 2, 2010			October 3, 2009

Foreign exchange contracts	Cost of products sold	$	(.2	)	$	(.5	)	$	(2.1	)	$	(2.2	)
Foreign exchange contracts	Marketing, general and administrative expense		.2			(16.9	)		33.5			8.0

		$	—		$	(17.4	)	$	31.4		$	5.8

Cash Flow Hedges

For derivative instruments that are designated and qualify as a cash flow hedge, 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 or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

The following table provides the components of the loss recognized in accumulated other comprehensive loss on derivatives (effective portion) related to cash flow hedging contracts:


		Three Months Ended						Nine Months Ended
(In millions)		October 2, 2010			October 3, 2009			October 2, 2010			October 3, 2009

Foreign exchange contracts		$	(.5	)	$	(1.8	)	$	(3.8	)	$	(5.5	)
Commodity contracts			(1.4	)		.7			(3.9	)		(2.2	)
Interest rate contract			—			—			(0.3	)		—

		$	(1.9	)	$	(1.1	)	$	(8.0	)	$	(7.7	)


The following table provides the components of the gain (loss) reclassified from accumulated other comprehensive loss (effective portion) related to cash flow hedging contracts:

		Three Months Ended						Nine Months Ended
(In millions)	Location of Loss in Income	October 2, 2010			October 3, 2009			October 2, 2010			October 3, 2009

Foreign exchange contracts	Cost of products sold	$	(1.2	)	$	(1.2	)	$	(2.1	)	$	(6.0	)
Commodity contracts	Cost of products sold		(.8	)		(2.0	)		(3.5	)		(1.7	)
Interest rate contracts	Interest expense		(1.1	)		(1.1	)		(2.9	)		(4.2	)

		$	(3.1	)	$	(4.3	)	$	(8.5	)	$	(11.9	)

As of October 2, 2010, a net loss of approximately $8 million is expected to be reclassified from accumulated other comprehensive loss to earnings within the next 12 months. See Note 12, “Comprehensive Income (Loss),” for more information.

The amount of gain or loss recognized in income related to the ineffective portion of, and the amounts excluded from, effectiveness testing for cash flow hedges and derivatives not designated as hedging instruments were not significant for the three and nine months ended October 2, 2010 and October 3, 2009, respectively.

Foreign Currency

Transactions in foreign currencies (including receivables, payables and loans denominated in currencies other than the functional currency) decreased net income by $2.3 million and $5.3 million for the three and nine months ended October 2, 2010, respectively. Transactions in foreign currencies increased net income by $.2 million and increased net loss by $1.6 million for the three and nine months ended October 3, 2009, respectively. These amounts exclude the effects from translation of foreign currencies on the Company’s financial statements.

In the three and nine months ended October 2, 2010 and October 3, 2009, respectively, no translation gains or losses for hyperinflationary economies were recognized in net income (loss) since the Company had no operations in hyperinflationary economies.

Taxes Based on Income

9 Months Ended

Oct. 02, 2010

Taxes Based on Income [Abstract]

Taxes Based on Income

Note 10. Taxes Based on Income

The effective tax rate for the three and nine months ended October 2, 2010 was approximately 17% and approximately 28%, respectively. The effective tax rate for the three months ended October 3, 2009 was approximately negative 7%, which, when applied to income, resulted in a tax benefit. The effective tax rate for the nine months ended October 3, 2009 was approximately 3%, which, when applied to the loss, resulted in a tax benefit. The effective tax rate for the first nine months of 2010 includes a benefit of approximately $17 million from discrete events, primarily the release of certain tax contingencies due to statute expirations, partially offset by the recognition of certain valuation allowances and other items. The Company’s effective tax rate is lower than the U.S. federal statutory rate of 35% due to the Company’s operations outside the U.S. where the statutory tax rates are generally lower. Additional taxes are not provided for most foreign earnings because the Company currently plans to indefinitely reinvest these amounts.

The following table summarizes the Company’s income (loss) before taxes, provision for (benefit from) income taxes, and effective tax rate:


	Three Months Ended						Nine Months Ended
(In millions)	October 2, 2010			October 3, 2009			October 2, 2010			October 3, 2009

Income (loss) before taxes	$	77.0		$	58.3		$	279.7		$	(817.4	)
Provision for (benefit from) income taxes		12.8			(4.2	)		77.0			(20.8	)

Effective tax rate		17	%		(7	)%		28	%		3	%

The amount of income taxes the Company pays is subject to ongoing audits by taxing jurisdictions around the world. The Company’s estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts, and circumstances existing at that time. The Company believes that it has adequately provided for reasonably foreseeable outcomes related to these matters. However, the Company’s future results may include favorable or unfavorable adjustments to its estimated tax liabilities in the period the assessments are made or resolved, which may impact the Company’s effective tax rate. With some exceptions, the Company and its subsidiaries are no longer subject to income tax examinations by tax authorities for years prior to 2005.

It is reasonably possible that during the next 12 months, the Company may realize a decrease in its gross uncertain tax positions by approximately $42 million, primarily as the result of cash payments and closing tax years. The Company anticipates that it is reasonably possible that cash payments of up to $15 million relating to gross uncertain tax positions could be paid within the next 12 months.

Fair Value Measurements

9 Months Ended

Oct. 02, 2010

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 13. Fair Value Measurements

Recurring Fair Value Measurements

The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of October 2, 2010:


			Fair Value Measurements Using
					Significant		Significant
			Quoted Prices		Other		Other
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(In millions)	Total		(Level 1)		(Level 2)		(Level 3)

Assets:
Available for sale securities	$	12.2	$	12.2	$	—	$	—
Derivative assets		14.6		.2		14.4		—

Liabilities:
Derivative liabilities	$	9.1	$	3.5	$	5.6	$	—

The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of January 2, 2010:


			Fair Value Measurements Using
					Significant		Significant
			Quoted Prices		Other		Other
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(In millions)	Total		(Level 1)		(Level 2)		(Level 3)

Assets:
Available for sale securities	$	11.9	$	11.9	$	—	$	—
Derivative assets		5.5		.5		5.0		—

Liabilities:
Derivative liabilities	$	10.0	$	3.5	$	6.5	$	—

Available for sale securities are measured at fair value using quoted prices and classified within Level 1 of the valuation hierarchy. Derivatives that are exchange-traded are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy. Derivatives measured based on inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy.

Non-recurring Fair Value Measurements

Fair value measurements of assets on a non-recurring basis during the three months ended October 2, 2010 were not significant.

The following table summarizes the fair value measurements of assets on a non-recurring basis during the nine months ended October 2, 2010:

Fair Value Measurements Using

Quoted

Significant

Prices

Other

in Active

Observable

Unobservable

Markets

Inputs

Total

(In millions)

Total

(Level 1)

(Level 2)

(Level 3)

Losses

Long-lived assets

1.9

—

1.9

—

(.5

)

Long-lived assets with carrying amounts totaling $2.4 million were written down to their fair values of $1.9 million, resulting in an impairment charge of $.5 million for the nine months ended October 2, 2010, which was included in “Other expense, net” in the unaudited Consolidated Statement of Income.

The following table summarizes the fair value measurements of assets on a non-recurring basis during the nine months ended October 3, 2009:


			Fair Value Measurements Using
			Quoted		Significant		Significant
			Prices		Other		Other
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs		Total
(In millions)	Total		(Level 1)		(Level 2)		(Level 3)		Losses

Goodwill	$	415.0	$	—	$	—	$	415.0	$	(820.0	)
Indefinite-lived intangible assets		18.0		—		—		18.0		(12.0	)
Long-lived assets		9.6		—		6.6		3.0		(19.5	)

Long-lived assets with carrying amounts totaling $29.1 million were written down to their fair values of $9.6 million, resulting in an impairment charge of $4.5 million and $19.5 million for the three and nine months ended October 3, 2009, respectively, which was included in “Other expense, net” in the unaudited Consolidated Statement of Income.

Goodwill with a carrying amount of approximately $1.2 billion was written down to its implied fair value of $415 million, resulting in a non-cash impairment charge of $820 million. Additionally, certain indefinite-lived assets with a total carrying value of approximately $30 million were written down to their implied fair value of $18 million, resulting in a non-cash impairment charge of $12 million. These charges are included in “Goodwill and indefinite-lived intangible asset impairment charges” in the unaudited Consolidated Statement of Income for the nine months ended October 3, 2009. Refer to Note 3, “Goodwill and Other Intangibles Resulting from Business Acquisitions,” for further information.

Commitments and Contingencies

9 Months Ended

Oct. 02, 2010

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 14. Commitments and Contingencies

Legal Proceedings

On May 21, 2003, The Harman Press filed in the Superior Court for the County of Los Angeles, California, a purported class action on behalf of indirect purchasers of label stock against the Company, UPM-Kymenne Corporation (“UPM”) and UPM’s subsidiary Raflatac (“Raflatac”), seeking treble damages and other relief for alleged unlawful competitive practices, with allegations including that the defendants attempted to limit competition among themselves through anticompetitive understandings. Three similar complaints were filed in various California courts. In November 2003, on petition from the parties, the California Judicial Council ordered the cases be coordinated for pretrial purposes. The cases were assigned to a coordination trial judge in the Superior Court for the City and County of San Francisco on March 30, 2004. On September 30, 2004, the Harman Press amended its complaint to add Bemis Company, Inc.’s subsidiary Morgan Adhesives Company (“MACtac”) as a defendant. On January 21, 2005, American International Distribution Corporation filed a purported class action on behalf of indirect purchasers in the Superior Court for Chittenden County, Vermont. Similar actions were filed by Richard Wrobel, on February 16, 2005, in the District Court of Johnson County, Kansas; and by Chad and Terry Muzzey, on February 16, 2005, in the District Court of Scotts Bluff County, Nebraska. On February 17, 2005, Judy Benson filed a purported multi-state class action on behalf of indirect purchasers in the Circuit Court for Cocke County, Tennessee. Without admitting liability, the Company agreed to pay plaintiffs $2 million to resolve all claims related to the purported state class actions in the states of Kansas, Nebraska, Tennessee and Vermont. Those settlements were approved by the Tennessee court on March 12, 2010. The Company recorded $2 million in the third quarter of 2009 in respect of the settlement of those claims, and made that payment on December 28, 2009. Also, without admitting any liability, the Company paid $2.5 million on July 15, 2010 to resolve all claims in the California action. This settlement was preliminarily approved by the California court on July 23, 2010 with the final approval hearing scheduled for December 8, 2010. In respect of settlement of this claim, the Company recorded $.7 million in the fourth quarter of 2009 and $.3 million and $1.5 million in the first and second quarters of 2010, respectively.

The Company and its subsidiaries are involved in various other lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of the Company’s business. Based upon current information, management believes that the impact of the resolution of these other matters is not material to the Company’s financial position, or is not estimable.

Environmental

As of October 2, 2010, the Company has been designated by the U.S. Environmental Protection Agency (“EPA”) and/or other responsible state agencies as a potentially responsible party (“PRP”) at fourteen waste disposal or waste recycling sites, which are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination and for which no settlement of the Company’s liability has been agreed. The Company is participating with other PRPs at such sites, and anticipates that its share of cleanup costs will be determined pursuant to remedial agreements entered into in the normal course of negotiations with the EPA or other governmental authorities.

The Company has accrued estimated liabilities for these and certain other sites, including sites in which governmental agencies have designated the Company as a PRP, where it is probable that a loss will be incurred and the cost or amount of loss can be reasonably estimated. However, because of the uncertainties associated with environmental assessment and remediation activities, future expense to remediate the currently identified sites and any sites that could be identified in the future for cleanup could be higher than the liability currently accrued.

The activity for the first nine months of 2010 related to environmental liabilities, which includes costs associated with compliance and remediation, was as follows:


(In millions)

Balance at January 2, 2010	$	56.5
Accruals		.8
Payments		(3.1	)

Balance at October 2, 2010	$	54.2

As of October 2, 2010, approximately $12 million of the total balance was classified as short-term.

These estimates could change depending on various factors, such as modification of currently planned remedial actions, changes in remediation technologies, changes in site conditions, changes in the estimated time to complete remediation, changes in laws and regulations affecting remediation requirements, as well as other factors.

Product Warranty

The Company provides for an estimate of costs that may be incurred under its basic limited warranty at the time product revenue is recognized. These costs primarily include materials and labor associated with the service or sale of the product. Factors that affect the Company’s warranty liability include the number of units installed or sold, historical and anticipated rate of warranty claims on those units, cost per claim to satisfy the Company’s warranty obligation and availability of insurance coverage. Because these factors are impacted by actual experience and future expectations, the Company assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. As of October 2, 2010, the Company’s product warranty liabilities were $1.9 million.

Other

On September 9, 2005, the Company completed the lease financing for a commercial facility located in Mentor, Ohio, used primarily for the headquarters and research center for its roll materials division. The facility consists generally of land, buildings, equipment and office furnishings. The Company leases the facility under an operating lease arrangement, which contains a residual value guarantee of $33.4 million.

The Company participates in international receivable financing programs with several financial institutions whereby advances may be requested from these financial institutions. These advances are guaranteed by the Company. At October 2, 2010, the Company had guaranteed approximately $14 million.

As of October 2, 2010, the Company guaranteed up to approximately $17 million of certain foreign subsidiaries’ obligations to their suppliers, as well as approximately $439 million of certain subsidiaries’ lines of credit with various financial institutions.

Segment Information

9 Months Ended

Oct. 02, 2010

Segment Information [Abstract]

Segment Information

Note 15. Segment Information

Financial information by reportable segment and other businesses is set forth below. Certain prior year amounts have been restated to reflect a transfer of a business from the Retail Information Services segment to other specialty converting businesses.


	Three Months Ended						Nine Months Ended
(In millions)	October 2, 2010			October 3, 2009			October 2, 2010			October 3, 2009

Net sales to unaffiliated customers:
Pressure-sensitive Materials	$	896.7		$	851.0		$	2,717.8		$	2,453.4
Retail Information Services		378.7			324.2			1,135.4			970.3
Office and Consumer Products		229.7			242.8			618.5			644.1
Other specialty converting businesses		135.7			131.3			403.9			363.1

Net sales to unaffiliated customers	$	1,640.8		$	1,549.3		$	4,875.6		$	4,430.9

Intersegment sales:
Pressure-sensitive Materials	$	37.9		$	37.7		$	117.9		$	110.2
Retail Information Services		.5			.4			1.7			.9
Office and Consumer Products		.3			.2			.7			.6
Other specialty converting businesses		7.5			4.7			22.4			11.7
Eliminations		(46.2	)		(43.0	)		(142.7	)		(123.4	)

Intersegment sales	$	—		$	—		$	—		$	—

Income (loss) before taxes:
Pressure-sensitive Materials	$	72.2		$	75.7		$	247.5		$	126.1
Retail Information Services		11.4			(29.0	)		46.5			(887.1	)
Office and Consumer Products		20.4			41.0			71.3			98.9
Other specialty converting businesses		2.5			.8			9.5			(38.3	)
Corporate expense		(10.4	)		(11.1	)		(37.4	)		(50.0	)
Interest expense		(19.1	)		(19.1	)		(57.7	)		(67.0	)

Income (loss) before taxes	$	77.0	⁽¹⁾	$	58.3	⁽²⁾	$	279.7	⁽³⁾	$	(817.4	)⁽⁴⁾


⁽¹⁾		Operating income for the third quarter of 2010 included “Other expense, net” totaling $10.5, consisting of restructuring costs of $5.8, asset impairment charges of $1.3 and lease cancellation costs of $1 and a loss from curtailment of domestic pension obligations of $2.4. Of the total $10.5, the Pressure-sensitive Materials segment recorded $2.3, the Retail Information Services segment recorded $1.8, the Office and Consumer Products segment recorded $5.8, and the other specialty converting businesses recorded $.6.

⁽²⁾		Operating income for the third quarter of 2009 included “Other expense, net” totaling $35.5, consisting of restructuring costs of $27, asset impairment charges of $4.7, lease cancellation costs of $1.8, and legal settlement costs of $2. Of the total $35.5, the Pressure-sensitive Materials segment recorded $8.3, the Retail Information Services segment recorded $22.3, the Office and Consumer Products segment recorded $(.2), and the other specialty converting businesses recorded $5.1.

⁽³⁾		Operating income for the first nine months of 2010 included “Other expense, net” totaling $21.4, consisting of restructuring costs of $12.4, asset impairment charges of $2.1 and lease cancellation costs of $1, a loss from curtailment and settlement of pension obligations of $4.3, a loss from debt extinguishment of $1.2, and net legal settlement costs of $.9, partially offset by a gain on sale of investment of $(.5). Of the total $21.4, the Pressure-sensitive Materials segment recorded $5.7, the Retail Information Services segment recorded $5.8, the Office and Consumer Products segment recorded $8.3, the other specialty converting businesses recorded $.9, and Corporate recorded $.7.


⁽⁴⁾		Operating loss for the first nine months of 2009 included “Other expense, net” totaling $162.4, consisting of restructuring costs of $69.9, asset impairment charges of $29.9, lease cancellation costs of $2.4, legal settlement costs of $39, and a loss from debt extinguishment of $21.2. Of the total $162.4, the Pressure-sensitive Materials segment recorded $70.2, the Retail Information Services segment recorded $37, the Office and Consumer Products segment recorded $5.5, the other specialty converting businesses recorded $28.5, and Corporate recorded $21.2.

		Additionally, operating loss for the Retail Information Services segment for the first nine months of 2009 included $832 of goodwill and indefinite-lived intangible asset impairment charges taken in the first quarter of 2009.

Recent Accounting Requirements	9 Months Ended
Recent Accounting Requirements	Oct. 02, 2010
Recent Accounting Requirements [Abstract]
Recent Accounting Requirements	Note 16. Recent Accounting Requirements In January 2010, the Financial Accounting Standards Board (“FASB”) updated accounting guidance regarding fair value measurement disclosure. This guidance requires companies to disclose the amount of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for these transfers and for any transfers in or out of Level 3 of the fair value hierarchy. In addition, the guidance clarifies certain existing disclosure requirements. This updated guidance was effective at the beginning of 2010 and did not have a material impact on the Company’s disclosures. In June 2009, FASB issued changes to consolidation accounting. Among other items, these changes respond to concerns about the application of certain key provisions of previous accounting standards, including those regarding the transparency of the involvement with variable interest entities. The Company adopted these changes at the beginning of 2010. These changes did not have a material impact on the Company’s financial condition, results of operations, cash flows, or disclosures. FASB issued in May 2009, and amended in February 2010, an accounting standard on subsequent events. This standard defines what qualifies as a subsequent event—those events or transactions that occur following the balance sheet date, but before the financial statements are issued, or are available to be issued. This standard was effective for interim and annual periods ending after June 15, 2009. The Company adopted this accounting standard in the second quarter of 2009. In April 2009, FASB issued changes to disclosure requirements regarding fair value of financial instruments, which require disclosure about fair value of financial instruments, whether recognized or not recognized in the unaudited Condensed Consolidated Balance Sheet, in interim financial information. These changes also require fair value information to be presented together with the related carrying amount and disclosure regarding the methods and significant assumptions used to estimate fair value. These changes were effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company has included the required disclosures in Note 4, “Debt.” FASB issued in December 2007, and amended in April 2009, a revised accounting standard for business combinations. This standard defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. In general, this standard requires the acquiring entity in a business combination to recognize the fair value of all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date as the fair value measurement point; and modifies the disclosure requirements. This standard applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008. The adoption of this standard did not have a material impact on the Company’s financial results of operations and financial condition.

General	9 Months Ended
General	Oct. 02, 2010
General [Abstract]
General	Note 1. General In the opinion of management, the accompanying unaudited condensed consolidated financial statements include normal recurring adjustments necessary for a fair statement of Avery Dennison Corporation’s (the “Company’s”) interim results. The unaudited condensed consolidated financial statements and notes in this Form 10-Q are presented as permitted by Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements do not contain certain information included in the Company’s 2009 audited consolidated financial statements and notes. This Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s 2009 Annual Report on Form 10-K. The third quarters of 2010 and 2009 consisted of thirteen-week periods ending October 2, 2010 and October 3, 2009, respectively. The interim results of operations are not necessarily indicative of future financial results. Financial Presentation Certain prior year amounts have been reclassified to conform with the current year presentation.

Research and Development	9 Months Ended
Research and Development	Oct. 02, 2010
Research and Development [Abstract]
Research and Development	Note 6. Research and Development Research and development expense for the three and nine months ended October 2, 2010 was $23.4 million and $69.7 million, respectively. For the three and nine months ended October 3, 2009, research and development expense was $22.3 million and $67.1 million, respectively.

Stock-Based Compensation	9 Months Ended
Stock-Based Compensation	Oct. 02, 2010
Stock-Based Compensation [Abstract]
Stock-Based Compensation	Note 7. Stock-Based Compensation Net income included stock-based compensation expense related to stock options, performance units (“PUs”), restricted stock units (“RSUs”) and restricted stock of $9.8 million and $25.9 million for the three and nine months ended October 2, 2010, respectively, and $6.6 million and $19.8 million for the three and nine months ended October 3, 2009, respectively. Total stock-based compensation expense was included in “Marketing, general and administrative expense” in the unaudited Consolidated Statement of Income and was recorded in corporate expense and the Company’s operating segments, as appropriate. In February 2010 and April 2010, the Company granted its annual stock-based compensation awards to its employees and directors, respectively. Awards granted to retirement-eligible employees are treated as though the awards were immediately vested; as a result, the compensation expense related to these awards of $.6 million and $.9 million was recognized during the nine months ended October 2, 2010 and October 3, 2009, respectively, and was included in the stock-based compensation expense noted above. As of October 2, 2010, the Company had approximately $58 million of unrecognized compensation cost related to unvested stock options, PUs, RSUs and restricted stock under the Company’s plans. The total unrecognized compensation expense is expected to be recognized over the remaining weighted-average requisite service period of approximately three years for stock options and approximately two years for RSUs, PUs and restricted stock, respectively.