• 3Q17 Reported EPS of $1.20
  • Adjusted EPS (non-GAAP) of $1.26
• 3Q17 Net sales increased 11.3% to $1.68 billion
  • Sales growth ex. currency (non-GAAP) of 10.0%
  • Organic sales growth (non-GAAP) of 5.3%
• Raised FY17 guidance midpoint for Reported and Adjusted EPS by $0.10

GLENDALE, Calif.--(BUSINESS WIRE)--Oct. 25, 2017-- Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its third quarter ended September 30, 2017. All non-GAAP financial measures referenced in this document are reconciled to GAAP in the attached tables. Unless otherwise indicated, comparisons are to the same period in the prior year.

“We delivered a strong quarter, with earnings above our expectations,” said Mitch Butier, Avery Dennison President and CEO. “LGM’s organic growth rate rebounded, as expected, and margin remained strong; RBIS delivered another great quarter, with continued strong sales growth and margin expansion; and IHM delivered solid organic sales growth while integrating two recently completed acquisitions.

“We raised our guidance for full-year earnings per share, reflecting our better than expected operating results,” said Butier. “The effective execution of our strategies continues to enhance our competitive advantage, driving profitable growth and higher returns.”

For more details on the company’s results, see the summary table accompanying this news release, as well as the supplemental presentation materials, “Third Quarter 2017 Financial Review and Analysis,” posted on the company’s website at www.investors.averydennison.com, and furnished to the SEC on Form 8-K.

Third Quarter 2017 Results by Segment

Sales change ex. currency refers to the increase or decrease in sales excluding the estimated impact of currency translation. The estimated impact of currency translation is calculated on a constant currency basis, with prior period results translated at current period average exchange rates to exclude the effect of currency fluctuations. Organic sales change refers to the increase or decrease in sales excluding the estimated impact of currency translation, product line exits, and acquisitions and divestitures. Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring charges and other items, as a percentage of sales.

Label and Graphic Materials

• Reported sales increased 8.7 percent. Sales excluding currency increased 6.9 percent; on an organic basis, sales grew an estimated 5.1 percent. Sales increased mid-single digits on an organic basis in Label and Packaging Materials, as well as the combined Graphics and Reflective Solutions businesses.
• Reported operating margin improved 30 basis points to 12.8 percent as the benefits of higher volume and productivity, were partially offset by higher employee-related costs and the net impact of pricing and raw material costs. Adjusted operating margin improved 40 basis points to 13.1 percent.

Retail Branding and Information Solutions

• Reported sales increased 6.3 percent; on an organic basis, sales grew an estimated 6.5 percent driven by strength in both RFID and the base business.
• Reported operating margin improved 20 basis points to 6.8 percent as the benefits of increased volume, productivity, and reduced amortization expense, were partially offset by higher employee-related costs and restructuring charges. Adjusted operating margin improved 170 basis points to 8.7 percent.

Industrial and Healthcare Materials

• Reported sales increased 51.8 percent. Sales excluding currency increased 50.3 percent; on an organic basis, sales grew an estimated 3.5 percent. Sales increased mid-single digits on an organic basis in both industrial and healthcare categories.
• Reported operating margin declined 290 basis points to 8.2 percent driven primarily by the impact of recent acquisitions. Adjusted operating margin declined 320 basis points to 8.3 percent.

Other

Share Repurchases / Equity Dilution from Long-Term Incentives

The company repurchased 0.4 million shares in the third quarter at an aggregate cost of $35 million. Net of dilution, the company’s share count decreased 0.1 million in the quarter.

Income Taxes

The third quarter effective tax rate was 26.2 percent, down from 30.4 percent in the prior year. The adjusted tax rate for the quarter was 28 percent, consistent with the company’s expectation for the full year tax rate.

Cost Reduction Actions

In the third quarter, the company realized approximately $14 million in pre-tax savings from restructuring, net of transition costs, and incurred pre-tax restructuring charges of approximately $10 million, nearly all of which represented cash charges.

Outlook

In its supplemental presentation materials, “Third Quarter 2017 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2017 financial results. Based on the factors listed and other assumptions, the company now expects 2017 reported earnings per share of $4.60 to $4.65. Excluding an estimated $0.30 per share for restructuring charges and other items, the company now expects adjusted earnings per share (non-GAAP) of $4.90 to $4.95.

Note: Throughout this release and the supplemental presentation materials, amounts on a per share basis reflect fully diluted shares outstanding.

About Avery Dennison

Avery Dennison (NYSE: AVY) is a global leader in pressure-sensitive label and functional materials and labeling solutions for apparel. The company’s applications and technologies are an integral part of products used in every major industry. With operations in more than 50 countries and more than 25,000 employees worldwide, Avery Dennison serves customers in the consumer packaging, graphical display, logistics, apparel, industrial and healthcare industries. Headquartered in Glendale, California, the company reported sales of $6.1 billion in 2016. Learn more at www.averydennison.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this document are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other business targets, are subject to certain risks and uncertainties. Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but are not limited to, risks and uncertainties relating to the following: fluctuations in demand affecting sales to customers; worldwide and local economic conditions; changes in political conditions; changes in governmental laws and regulations; fluctuations in currency exchange rates and other risks associated with foreign operations, including in emerging markets; the financial condition and inventory strategies of customers; changes in customer preferences; fluctuations in cost and availability of raw materials; our ability to generate sustained productivity improvement; our ability to achieve and sustain targeted cost reductions; the impact of competitive products and pricing; loss of significant contracts or customers; collection of receivables from customers; selling prices; business mix shift; execution and integration of acquisitions and completion of potential dispositions; timely development and market acceptance of new products, including sustainable or sustainably-sourced products; investment in development activities and new production facilities; amounts of future dividends and share repurchases; customer and supplier concentrations; successful implementation of new manufacturing technologies and installation of manufacturing equipment; disruptions in information technology systems, including cyber-attacks or other intrusions to network security; successful installation of new or upgraded information technology systems; data security breaches; volatility of financial markets; impairment of capitalized assets, including goodwill and other intangibles; credit risks; our ability to obtain adequate financing arrangements and maintain access to capital; fluctuations in interest and tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; outcome of tax audits; fluctuations in pension, insurance, and employee benefit costs; the impact of legal and regulatory proceedings, including with respect to environmental, health and safety; protection and infringement of intellectual property; the impact of epidemiological events on the economy and our customers and suppliers; acts of war, terrorism, and natural disasters; and other factors.

We believe that the most significant risk factors that could affect our financial performance in the near-term include: (1) the impacts of global economic conditions and political uncertainty on underlying demand for our products and foreign currency fluctuations; (2) competitors’ actions, including pricing, expansion in key markets, and product offerings; (3) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through selling price increases, without a significant loss of volume; and (4) the execution and integration of acquisitions.

For a more detailed discussion of these and other factors, see “Risk Factors” and “Management’s Discussion and Analysis of Results of Operations and Financial Condition” in our 2016 Form 10-K, filed on February 23, 2017 with the Securities and Exchange Commission, and subsequent quarterly reports on Form 10-Q. The forward-looking statements included in this document are made only as of the date of this document, and we undertake no obligation to update these statements to reflect subsequent events or circumstances, other than as may be required by law.

For more information and to listen to a live broadcast or an audio replay of the quarterly conference call with analysts, visit the Avery Dennison website at www.investors.averydennison.com.

Third Quarter Financial Summary - Preliminary, unaudited
(In millions, except % and per share amounts)
										% Change vs. P/Y
		3Q				3Q							Ex.
		2017				2016				Reported			Currency (a)			Organic (b)
Net sales, by segment:
Label and Graphic Materials		$	1,137.3			$	1,046.3			8.7	%		6.9	%		5.1	%
Retail Branding and Information Solutions			373.8				351.5			6.3	%		6.5	%		6.5	%
Industrial and Healthcare Materials			168.4				110.9			51.8	%		50.3	%		3.5	%
Total net sales		$	1,679.5			$	1,508.7			11.3	%		10.0	%		5.3	%
		As Reported (GAAP)																		Adjusted Non-GAAP (c)
		3Q				3Q				%			% of Sales							3Q				3Q				%			% of Sales
		2017				2016				Change			2017			2016				2017				2016				Change			2017			2016
Operating income (loss) / operating margins before interest and taxes, by segment:
Label and Graphic Materials		$	145.5			$	130.7						12.8	%		12.5	%			$	148.7			$	133.4						13.1	%		12.7	%
Retail Branding and Information Solutions			25.3				23.2						6.8	%		6.6	%				32.7				24.7						8.7	%		7.0	%
Industrial and Healthcare Materials			13.8				12.3						8.2	%		11.1	%				14.0				12.7						8.3	%		11.5	%
Corporate expense			(21.0	)			(23.5	)													(21.0	)			(23.5	)
Total operating income before interest and taxes / operating margins		$	163.6			$	142.7			15	%		9.7	%		9.5	%			$	174.4			$	147.3			18	%		10.4	%		9.8	%
Interest expense		$	16.8			$	14.7													$	16.8			$	14.7
Income before taxes		$	146.8			$	128.0			15	%		8.7	%		8.5	%			$	157.6			$	132.6			19	%		9.4	%		8.8	%
Provision for income taxes (d)		$	38.5			$	38.9													$	44.1			$	41.0
Net income		$	108.3			$	89.1			22	%		6.4	%		5.9	%			$	113.5			$	91.6			24	%		6.8	%		6.1	%
Net income per common share, assuming dilution		$	1.20			$	0.98			22	%									$	1.26			$	1.01			25	%
																					2017				2016
3Q Free Cash Flow (d)(e)																				$	163.0			$	95.9
YTD Free Cash Flow (d)(e)																				$	256.0			$	247.7

		See accompanying schedules A-4 to A-8 for reconciliations from GAAP to non-GAAP financial measures.
(a)		Percentage change in sales excluding the estimated impact of currency translation.
(b)		Percentage change in sales excluding the estimated impact of currency translation, product line exits, acquisitions and divestitures, and, where applicable, the extra week in our fiscal year.
(c)		Excludes restructuring charges and other items.
(d)		In the first quarter of 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU requires that all tax effects related to share-based payments at settlement or expiration be recognized through the provision for income taxes, a change from the previous requirement that certain tax effects be recognized in shareholders' equity. As required by this ASU, this change has been applied prospectively after the date of adoption.
		This ASU also requires that all tax-related cash flows resulting from share-based payments be reported as operating activities on the statements of cash flows, a change from the previous requirement that windfall tax benefits be presented as an inflow from financing activities and an outflow from operating activities. As permitted by this ASU, prior periods have not been retrospectively adjusted for this change.
(e)		Free cash flow refers to cash flow from operations, less payments for property, plant and equipment, software and other deferred charges, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from sales (purchases) of investments.

A-1
AVERY DENNISON CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
		(UNAUDITED)
		Three Months Ended						Nine Months Ended
		Sep. 30, 2017			Oct. 1, 2016			Sep. 30, 2017			Oct. 1, 2016
Net sales		$	1,679.5		$	1,508.7		$	4,878.5		$	4,535.7
Cost of products sold			1,227.9			1,091.1			3,531.9			3,261.4
Gross profit			451.6			417.6			1,346.6			1,274.3
Marketing, general and administrative expense			277.2			270.3			837.2			817.7
Interest expense			16.8			14.7			49.7			45.4
Other expense, net(1)			10.8			4.6			27.5			60.4
Income before taxes			146.8			128.0			432.2			350.8
Provision for income taxes(2)			38.5			38.9			90.8			92.1
Net income		$	108.3		$	89.1		$	341.4		$	258.7
Per share amounts:
Net income per common share, assuming dilution		$	1.20		$	0.98		$	3.79		$	2.85
Weighted average number of common shares outstanding,
assuming dilution			89.9			90.6			90.1			90.9

(1)		"Other expense, net" for the third quarter of 2017 includes severance and related costs of $8.7, asset impairment and lease cancellation charges of $1.8, and transaction costs of $.3.
		"Other expense, net" for the third quarter of 2016 includes severance and related costs of $1.9, asset impairment and lease cancellation charges of $.7, and transaction costs of $2.
		"Other expense, net" for 2017 YTD includes severance and related costs of $21.7, asset impairment and lease cancellation charges of $2.1, and transaction costs of $3.7.
		"Other expense, net" for 2016 YTD includes severance and related costs of $10.7, asset impairment and lease cancellation charges of $3.9, loss from settlement of pension obligations of $41.4, transaction costs of $4.1, and loss on sale of asset of $.3.
(2)		In the first quarter of 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU requires that all tax effects related to share-based payments at settlement or expiration be recognized through the provision for income taxes, a change from the previous requirement that certain tax effects be recognized in shareholders' equity. As required by this ASU, this change has been applied prospectively after the date of adoption.

A-2
AVERY DENNISON CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
		(UNAUDITED)
ASSETS		Sep. 30, 2017				Oct. 1, 2016
Current assets:
Cash and cash equivalents		$	232.3			$	189.4
Trade accounts receivable, net			1,184.8				1,069.7
Inventories, net			620.0				565.3
Assets held for sale			6.8				5.9
Other current assets			239.4				183.3
Total current assets			2,283.3				2,013.6
Property, plant and equipment, net			1,047.0				905.4
Goodwill and other intangibles resulting from business acquisitions, net			1,147.2				892.5
Non-current deferred income taxes			350.4				390.7
Other assets			445.1				398.2
		$	5,273.0			$	4,600.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt and capital leases		$	383.0			$	587.6
Accounts payable			949.2				866.7
Other current liabilities			691.1				601.8
Total current liabilities			2,023.3				2,056.1
Long-term debt and capital leases			1,298.4				713.0
Other long-term liabilities			813.4				788.9
Shareholders' equity:
Common stock			124.1				124.1
Capital in excess of par value			854.6				843.1
Retained earnings			2,693.3				2,444.1
Treasury stock at cost			(1,838.0	)			(1,699.9	)
Accumulated other comprehensive loss			(696.1	)			(669.0	)
Total shareholders' equity			1,137.9				1,042.4
		$	5,273.0			$	4,600.4

A-3
AVERY DENNISON CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
		(UNAUDITED)
		Nine Months Ended
		Sep. 30, 2017				Oct. 1, 2016
Operating Activities:
Net income		$	341.4			$	258.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			92.6				88.8
Amortization			42.2				46.7
Provision for doubtful accounts and sales returns			28.1				33.8
Net losses from asset impairments and sales/disposals of assets			2.4				3.8
Stock-based compensation			22.2				20.1
Loss from settlement of pension obligations			---				41.4
Other non-cash expense and loss			41.0				34.7
Changes in assets and liabilities and other adjustments			(177.3	)			(162.3	)
Net cash provided by operating activities			392.6				365.7
Investing Activities:
Purchases of property, plant and equipment			(111.4	)			(104.9	)
Purchases of software and other deferred charges			(23.5	)			(16.6	)
Proceeds from sales of property, plant and equipment			3.0				4.3
Purchases of investments, net			(4.7	)			(0.8	)
Payments for acquisitions, net of cash acquired, and investments in businesses			(309.5	)			(227.5	)
Net cash used in investing activities			(446.1	)			(345.5	)
Financing Activities:
Net (decrease) increase in borrowings (maturities of three months or less)			(220.1	)			242.0
Additional long-term borrowings			526.6				---
Repayments of long-term debt			(2.5	)			(1.9	)
Dividends paid			(115.8	)			(106.2	)
Share repurchases			(104.8	)			(181.5	)
Proceeds from exercises of stock options, net			17.7				63.4
Tax withholding for and excess tax benefit from stock-based compensation, net			(20.3	)			(4.4	)
Net cash provided by financing activities			80.8				11.4
Effect of foreign currency translation on cash balances			9.9				(1.0	)
Increase in cash and cash equivalents			37.2				30.6
Cash and cash equivalents, beginning of year			195.1				158.8
Cash and cash equivalents, end of period		$	232.3			$	189.4

In the first quarter of 2017, we adopted the provisions of Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU requires that all tax-related cash flows resulting from share-based payments be reported as operating activities on the statements of cash flows, a change from the previous requirement that windfall tax benefits be presented as an inflow from financing activities and an outflow from operating activities. As permitted by this ASU, prior periods have not been retrospectively adjusted.

A-4

Reconciliation of Non-GAAP Financial Measures in Accordance with SEC Regulations G and S-K

We report our financial results in conformity with accounting principles generally accepted in the United States of America, or GAAP, and also communicate with investors using certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. These non-GAAP financial measures are intended to supplement presentation of our financial results that are prepared in accordance with GAAP. Based upon feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are useful to their assessment of our performance and operating trends, as well as liquidity.

Our non-GAAP financial measures exclude the impact of certain events, activities, or strategic decisions. The accounting effects of these events, activities or decisions, which are included in the GAAP financial measures, may make it difficult to assess our underlying performance in a single period. By excluding the accounting effects, positive or negative, of certain items (e.g., restructuring charges, legal settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, losses from curtailment and settlement of pension obligations, gains or losses on sales of certain assets, and other items), we believe that we are providing meaningful supplemental information to facilitate an understanding of our core operating results and liquidity measures. These non-GAAP financial measures are used internally to evaluate trends in our underlying performance, as well as to facilitate comparison to the results of competitors for a single period. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency, or timing.

We use the following non-GAAP financial measures in the accompanying news release and presentation:

Sales change ex. currency refers to the increase or decrease in sales excluding the estimated impact of currency translation. The estimated impact of currency translation is calculated on a constant currency basis, with prior period results translated at current period average exchange rates to exclude the effect of currency fluctuations.

Organic sales change refers to the increase or decrease in sales excluding the estimated impact of currency translation, product line exits, acquisitions and divestitures, and, where applicable, the extra week in our fiscal year.

We believe that sales change ex. currency and organic sales change assist investors in evaluating the sales growth from the ongoing activities of our businesses and provide greater ability to evaluate our results from period to period.

Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring charges and other items, as a percentage of sales.

Adjusted tax rate refers to our anticipated full-year GAAP tax rate using the most likely scenario in a range of estimated tax rates for the year. This range includes various items such as the impact of the discrete rates applicable to the adjustments we make in calculating our adjusted non-GAAP earnings, changes in uncertain tax positions and our repatriation assertions on unremitted earnings, and other items that may impact our full-year GAAP tax rate.

Adjusted net income refers to income before taxes, tax-effected at the adjusted tax rate, and adjusted for tax-effected restructuring charges and other items.

Adjusted net income per common share, assuming dilution (adjusted EPS) refers to adjusted net income divided by weighted average number of common shares outstanding, assuming dilution.

We believe that adjusted operating margin, adjusted net income, and adjusted EPS assist investors in understanding our core operating trends and comparing our results with those of our competitors.

Free cash flow refers to cash flow from operations, less payments for property, plant and equipment, software and other deferred charges, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from sales (purchases) of investments. We believe that free cash flow assists investors by showing the amount of cash we have available for debt reductions, dividends, share repurchases, and acquisitions.

The following reconciliations are provided in accordance with Regulations G and S-K and reconcile our non-GAAP financial measures with the most directly comparable GAAP financial measures.

A-5
AVERY DENNISON CORPORATION
PRELIMINARY RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except % and per share amounts)
		(UNAUDITED)
		Three Months Ended									Nine Months Ended
		Sep. 30, 2017					Oct. 1, 2016				Sep. 30, 2017				Oct. 1, 2016
Reconciliation from GAAP to Non-GAAP Operating Margins:
Net sales		$	1,679.5				$	1,508.7			$	4,878.5			$	4,535.7
Income before taxes		$	146.8				$	128.0			$	432.2			$	350.8
Income before taxes as a percentage of sales			8.7	%				8.5	%			8.9	%			7.7	%
Adjustment:
Interest expense		$	16.8				$	14.7			$	49.7			$	45.4
Operating income before interest expense and taxes		$	163.6				$	142.7			$	481.9			$	396.2
Operating Margins			9.7	%				9.5	%			9.9	%			8.7	%
Income before taxes		$	146.8				$	128.0			$	432.2			$	350.8
Adjustments:
Restructuring charges:
Severance and related costs			8.7					1.9				21.7				10.7
Asset impairment and lease cancellation charges			1.8					0.7				2.1				3.9
Transaction costs			0.3					2.0				3.7				4.1
Loss from settlement of pension obligations			---					---				---				41.4
Loss on sale of asset			---					---				---				0.3
Interest expense			16.8					14.7				49.7				45.4
Adjusted operating income before interest expense and taxes (non-GAAP)		$	174.4				$	147.3			$	509.4			$	456.6
Adjusted Operating Margins (non-GAAP)			10.4	%				9.8	%			10.4	%			10.1	%
Reconciliation from GAAP to Non-GAAP Net Income:
As reported net income		$	108.3				$	89.1			$	341.4			$	258.7
Adjustments:
Restructuring charges			10.5					2.6				23.8				14.6
Transaction costs			0.3					2.0				3.7				4.1
Loss from settlement of pension obligations			---					---				---				41.4
Loss on sale of asset			---					---				---				0.3
Tax effect of pre-tax adjustments and impact of adjusted tax rate(1)		(5.6			)			(2.1	)			(37.9	)			(43.6	)
Adjusted Net Income (non-GAAP)		$	113.5				$	91.6			$	331.0			$	275.5

A-5
(continued)
AVERY DENNISON CORPORATION
PRELIMINARY RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except % and per share amounts)
		(UNAUDITED)
		Three Months Ended								Nine Months Ended
		Sep. 30, 2017				Oct. 1, 2016				Sep. 30, 2017				Oct. 1, 2016
Reconciliation from GAAP to Non-GAAP Net Income per Common Share:
As reported net income per common share, assuming dilution		$	1.20			$	0.98			$	3.79			$	2.85
Adjustments per common share, net of tax:
Restructuring charges, loss from settlement of pension obligations, transaction costs, and loss on sale of asset(1)			0.06				0.03				(0.12	)			0.18
Adjusted Net Income per Common Share, assuming dilution (non-GAAP)		$	1.26			$	1.01			$	3.67			$	3.03
Weighted average number of common shares outstanding, assuming dilution			89.9				90.6				90.1				90.9
(1) The adjusted tax rate was 28% for the three and nine months ended Sep. 30, 2017, and 31% and 33% for the three and nine months ended Oct. 1, 2016, respectively.
		(UNAUDITED)
		Three Months Ended								Nine Months Ended
		Sep. 30, 2017				Oct. 1, 2016				Sep. 30, 2017				Oct. 1, 2016
Reconciliation of Free Cash Flow:
Net cash provided by operating activities		$	214.3			$	149.7			$	392.6			$	365.7
Purchases of property, plant and equipment			(44.9	)			(43.6	)			(111.4	)			(104.9	)
Purchases of software and other deferred charges			(8.6	)			(10.5	)			(23.5	)			(16.6	)
Proceeds from sales of property, plant and equipment			2.8				1.1				3.0				4.3
Purchases of investments, net			(0.6	)			(0.8	)			(4.7	)			(0.8	)
Free Cash Flow (non-GAAP)		$	163.0			$	95.9			$	256.0			$	247.7

A-6
AVERY DENNISON CORPORATION
PRELIMINARY SUPPLEMENTARY INFORMATION
(In millions, except %)
(UNAUDITED)
		Third Quarter Ended
		NET SALES						OPERATING INCOME								OPERATING MARGINS
		2017			2016			2017 (1)				2016 (2)				2017			2016
Label and Graphic Materials		$	1,137.3		$	1,046.3		$	145.5			$	130.7			12.8	%		12.5	%
Retail Branding and Information Solutions			373.8			351.5			25.3				23.2			6.8	%		6.6	%
Industrial and Healthcare Materials			168.4			110.9			13.8				12.3			8.2	%		11.1	%
Corporate Expense			N/A			N/A			(21.0	)			(23.5	)		N/A			N/A
TOTAL FROM OPERATIONS		$	1,679.5		$	1,508.7		$	163.6			$	142.7			9.7	%		9.5	%

(1) Operating income for the third quarter of 2017 includes severance and related costs of $8.7, asset impairment and lease cancellation charges of $1.8, and transaction costs of $.3. Of the total $10.8, the Label and Graphic Materials segment recorded $3.2, the Retail Branding and Information Solutions segment recorded $7.4, and the Industrial and Healthcare Materials segment recorded $.2.

(2) Operating income for the third quarter of 2016 includes severance and related costs of $1.9, asset impairment and lease cancellation charges of $.7, and transaction costs of $2. Of the total $4.6, the Label and Graphic Materials segment recorded $2.7, the Retail Branding and Information Solutions segment recorded $1.5, and the Industrial and Healthcare Materials segment recorded $.4.

RECONCILIATION FROM GAAP TO NON-GAAP SUPPLEMENTARY INFORMATION
		Third Quarter Ended
		OPERATING INCOME						OPERATING MARGINS
		2017			2016			2017			2016
Label and Graphic Materials
Operating income and margins, as reported		$	145.5		$	130.7		12.8	%		12.5	%
Adjustments:
Restructuring charges:
Severance and related costs			2.9			0.6		0.3	%		---
Asset impairment and lease cancellation charges			0.2			0.1		---			---
Transaction costs			0.1			2.0		---			0.2	%
Adjusted operating income and margins (non-GAAP)		$	148.7		$	133.4		13.1	%		12.7	%
Retail Branding and Information Solutions
Operating income and margins, as reported		$	25.3		$	23.2		6.8	%		6.6	%
Adjustments:
Restructuring charges:
Severance and related costs			5.8			1.3		1.5	%		0.4	%
Asset impairment and lease cancellation charges			1.6			0.2		0.4	%		---
Adjusted operating income and margins (non-GAAP)		$	32.7		$	24.7		8.7	%		7.0	%
Industrial and Healthcare Materials
Operating income and margins, as reported		$	13.8		$	12.3		8.2	%		11.1	%
Adjustments:
Restructuring charges:
Asset impairment charges			---			0.4		---			0.4	%
Transaction costs			0.2			---		0.1	%		---
Adjusted operating income and margins (non-GAAP)		$	14.0		$	12.7		8.3	%		11.5	%

A-7
AVERY DENNISON CORPORATION
PRELIMINARY SUPPLEMENTARY INFORMATION
(In millions, except %)
(UNAUDITED)
		Nine Months Year-to-Date
		NET SALES						OPERATING INCOME								OPERATING MARGINS
		2017			2016			2017(1)				2016 (2)				2017			2016
Label and Graphic Materials		$	3,350.0		$	3,123.5		$	429.3			$	395.6			12.8	%		12.7	%
Retail Branding and Information Solutions			1,115.7			1,069.5			80.1				67.8			7.2	%		6.3	%
Industrial and Healthcare Materials			412.8			342.7			37.6				44.8			9.1	%		13.1	%
Corporate Expense			N/A			N/A			(65.1	)			(112.0	)		N/A			N/A
TOTAL FROM OPERATIONS		$	4,878.5		$	4,535.7		$	481.9			$	396.2			9.9	%		8.7	%

(1) Operating income for 2017 includes severance and related costs of $21.7, asset impairment and lease cancellation charges of $2.1, and transaction costs of $3.7. Of the total $27.5, the Label and Graphic Materials segment recorded $10.4, the Retail Branding and Information Solutions segment recorded $14, and the Industrial and Healthcare Materials segment recorded $3.1.

(2) Operating income for 2016 includes severance and related costs of $10.7, asset impairment and lease cancellation charges of $3.9, loss from settlement of pension obligations of $41.4, transaction costs of $4.1, and loss on sale of asset of $.3. Of the total $60.4, the Label and Graphic Materials segment recorded $11, the Retail Branding and Information Solutions segment recorded $7.1, the Industrial and Healthcare Materials segment recorded $.9, and Corporate recorded $41.4.

RECONCILIATION FROM GAAP TO NON-GAAP SUPPLEMENTARY INFORMATION
		Nine Months Year-to-Date
		OPERATING INCOME						OPERATING MARGINS
		2017			2016			2017			2016
Label and Graphic Materials
Operating income and margins, as reported		$	429.3		$	395.6		12.8	%		12.7	%
Adjustments:
Restructuring charges:
Severance and related costs			9.6			4.8		0.3	%		0.1	%
Asset impairment and lease cancellation charges			0.3			2.5		---			0.1	%
Transaction costs			0.5			3.7		---			0.1	%
Adjusted operating income and margins (non-GAAP)		$	439.7		$	406.6		13.1	%		13.0	%
Retail Branding and Information Solutions
Operating income and margins, as reported		$	80.1		$	67.8		7.2	%		6.3	%
Adjustments:
Restructuring charges:
Severance and related costs			11.9			5.4		1.1	%		0.5	%
Asset impairment and lease cancellation charges			1.8			1.0		0.1	%		0.1	%
Transaction costs related to sale of product line			0.3			0.4		---			0.1	%
Loss on sale of asset			---			0.3		---			---
Adjusted operating income and margins (non-GAAP)		$	94.1		$	74.9		8.4	%		7.0	%
Industrial and Healthcare Materials
Operating income and margins, as reported		$	37.6		$	44.8		9.1	%		13.1	%
Adjustments:
Restructuring charges:
Severance and related costs			0.2			0.5		0.1	%		0.1	%
Asset impairment charges			---			0.4		---			0.1	%
Transaction costs			2.9			---		0.7	%		---
Adjusted operating income and margins (non-GAAP)		$	40.7		$	45.7		9.9	%		13.3	%

A-8
AVERY DENNISON CORPORATION
PRELIMINARY SUPPLEMENTARY INFORMATION
(UNAUDITED)
		Third Quarter 2017
					Label and			Retail Branding			Industrial and
		Total			Graphic			and Information			Healthcare
		Company			Materials			Solutions			Materials
Reconciliation of GAAP to Non-GAAP sales change
Reported sales change		11.3	%		8.7	%		6.3	%		51.8	%
Foreign currency translation		(1.3	%)		(1.8	%)		0.2	%		(1.5	%)
Sales change ex. currency (non-GAAP)		10.0	%		6.9	%		6.5	%		50.3	%
Acquisitions		(4.7	%)		(1.8	%)		---			(46.8	%)
Organic sales change (non-GAAP)		5.3	%		5.1	%		6.5	%		3.5	%

View source version on businesswire.com: http://www.businesswire.com/news/home/20171025005362/en/

Source: Avery Dennison Corporation

Avery Dennison Corporation
Media Relations:
Rob Six, (626) 304-2361
rob.six@averydennison.com
or
Investor Relations:
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