0001104659-20-087341 | 10-Q | XBRL Viewer

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 27, 2020	Dec. 28, 2019
Current assets:
Cash and cash equivalents	$ 262.6	$ 253.7
Trade accounts receivable, less allowances of $46.4 and $27.1 at June 27, 2020 and December 28, 2019, respectively	1,114.6	1,212.2
Inventories, net	726.6	663.0
Other current assets	220.8	211.7
Total current assets	2,324.6	2,340.6
Property, plant and equipment, net	1,228.8	1,210.7
Goodwill	1,039.8	930.8
Other intangibles resulting from business acquisitions, net	195.5	126.5
Deferred tax assets	211.1	225.4
Other assets	651.9	654.8
Total assets	5,651.7	5,488.8
Current liabilities:
Short-term borrowings and current portion of long-term debt and finance leases	268.6	440.2
Accounts payable	956.5	1,066.1
Accrued payroll and employee benefits	175.3	220.4
Other current liabilities	509.1	527.1
Total current liabilities	1,909.5	2,253.8
Long-term debt and finance leases	1,997.6	1,499.3
Long-term retirement benefits and other liabilities	417.4	421.4
Deferred tax liabilities and income taxes payable	113.3	110.3
Commitments and contingencies (see Note 12)
Shareholders' equity:
Common stock, $1 par value per share, authorized - 400,000,000 shares at June 27, 2020 and December 28, 2019; issued - 124,126,624 shares at June 27, 2020 and December 28, 2019; outstanding - 83,448,042 shares and 83,366,840 shares at June 27, 2020 and December 28, 2019, respectively	124.1	124.1
Capital in excess of par value	840.0	874.0
Retained earnings	3,100.2	2,979.1
Treasury stock at cost, 40,678,582 shares and 40,759,784 shares at June 27, 2020 and December 28, 2019, respectively	(2,447.2)	(2,425.1)
Accumulated other comprehensive loss	(403.2)	(348.1)
Total shareholders' equity	1,213.9	1,204.0
Total liabilities and shareholders' equity	$ 5,651.7	$ 5,488.8

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income (loss)	$ 79.7	$ 143.4	$ 213.9	$ (3.5)
Other comprehensive income (loss), net of tax:
Foreign currency translation	13.6	(10.5)	(55.0)	11.6
Pension and other postretirement benefits	0.7	0.2	1.3	300.9
Cash flow hedges	(5.5)	(0.1)	(1.4)	(0.3)
Other comprehensive income (loss), net of tax	8.8	(10.4)	(55.1)	312.2
Total comprehensive income, net of tax	$ 88.5	$ 133.0	$ 158.8	$ 308.7

Net Income (Loss) Per Common Share

6 Months Ended

Jun. 27, 2020

Net Income (Loss) Per Common Share

Net Income (Loss) Per Common Share

Note 9. Net Income (Loss) Per Common Share

Net income (loss) per common share was computed as follows:


		Three Months Ended				Six Months Ended
(In millions, except per share amounts)		June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
(A)	Net income (loss) available to common shareholders	$	79.7	$	143.4	$	213.9	$	(3.5)
(B)	Weighted average number of common shares outstanding		83.4		84.3		83.4		84.3
	Dilutive shares (additional common shares issuable under stock-based awards)		.4		.8		.5		—
(C)	Weighted average number of common shares outstanding, assuming dilution		83.8		85.1		83.9		84.3
Net income (loss) per common share: (A) ÷ (B)		$	.96	$	1.70	$	2.56	$	(.04)
Net income (loss) per common share, assuming dilution: (A) ÷ (C)		$	.95	$	1.69	$	2.55	$	(.04)

Certain stock-based compensation awards were not included in the computation of net income (loss) 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 for the three and six months ended June 27, 2020 or June 29, 2019.

For the six months ended June 29, 2019, the effect of dilutive shares (additional common shares issuable under stock-based awards) was not included in the computation of net loss per common share, assuming dilution, because we had a net loss. We excluded 1.0 million shares related to stock-based compensation awards from the computation for the six months ended June 29, 2019.

Cost Reduction Actions (Tables)

6 Months Ended

Jun. 27, 2020

Cost Reduction Actions

Restructuring charges and payments


			Charges,						Foreign
	Accrual at		Net of		Cash		Non-cash		Currency		Accrual at
(In millions)	December 28, 2019		Reversals		Payments		Impairment		Translation		June 27, 2020
2019/2020 Actions
Severance and related costs	$	21.9	$	40.2	$	(17.8)	$	—	$	.5	$	44.8
Asset impairment		—		1.7		—		(1.7)		—		—

2018/2019 Actions
Severance and related costs		6.5		(.2)		(6.2)		—		.1		.2
Lease cancellation costs		.3		—		—		—		—		.3
Total	$	28.7	$	41.7	$	(24.0)	$	(1.7)	$	.6	$	45.3

Restructuring charges, net of reversals, by reportable segment


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Restructuring charges, net of reversals, by reportable segment
Label and Graphic Materials	$	25.8	$	4.4	$	26.2	$	12.7
Retail Branding and Information Solutions		12.2		1.7		13.7		2.2
Industrial and Healthcare Materials		1.5		1.4		2.0		3.3
Corporate		(.2)		—		(.2)		—
Total	$	39.3	$	7.5	$	41.7	$	18.2

Supplemental Financial Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 27, 2020	Dec. 28, 2019
Inventories
Raw materials	$ 279.0	$ 231.6
Work-in-progress	202.3	201.0
Finished goods	245.3	230.4
Inventories, net	726.6	663.0
Property, Plant and Equipment
Property, plant and equipment	3,235.7	3,171.6
Accumulated depreciation	(2,006.9)	(1,960.9)
Property, plant and equipment, net	1,228.8	$ 1,210.7
Allowance for Credit Losses
Beginning Balance	27.1
Provision for credit losses	20.6
Amounts written off	(1.4)
Other, including foreign currency translation	0.1
Ending Balance	$ 46.4

Commitments and Contingencies

6 Months Ended

Jun. 27, 2020

Commitments and Contingencies

Commitments and Contingencies

Note 12. Commitments and Contingencies

Legal Proceedings

We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities.

Because of the uncertainties associated with claims resolution and litigation, future expenses to resolve these matters could be higher than the liabilities we have accrued; however, we are unable to reasonably estimate a range of potential expenses. If information were to become available that allowed us to reasonably estimate a range of potential expenses in an amount higher or lower than what we have accrued, we would adjust our accrued liabilities accordingly. Additional lawsuits, claims, inquiries, and other regulatory and compliance matters could arise in the future. The range of expenses for resolving any future matters would be assessed as they arise; until then, a range of potential expenses for such resolution cannot be determined. Based upon current information, we believe that the impact of the resolution of these matters would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows.

Environmental Expenditures

Environmental expenditures are generally expensed. However, environmental expenditures for newly acquired assets and those 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. 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”). When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. Potential insurance reimbursements are not offset against potential liabilities.

As of June 27, 2020, 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 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 for the six months ended June 27, 2020 was as follows:


(In millions)
Balance at December 28, 2019	$	21.4
Charges, net of reversals		.8
Payments		(2.4)
Balance at June 27, 2020	$	19.8

Approximately $9 million and $10 million, respectively, of the balance was classified as short-term and included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets as of June 27, 2020 and December 28, 2019.

Segment and Disaggregated Revenue Information - Sales (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Segment Information
Net sales to unaffiliated customers	$ 1,528.5	$ 1,795.7	$ 3,251.5	$ 3,535.8
Corporate expense	(10.8)	(19.9)	(29.9)	(42.8)
Interest expense	(20.0)	(19.5)	(38.8)	(39.0)
Other non-operating expense, net	(0.2)	(0.9)	0.3	(447.4)
Income (loss) before taxes	103.3	188.7	284.2	(95.7)
Other expense, net	40.0	7.5	44.9	15.0
Intersegment sales
Segment Information
Net sales to unaffiliated customers	19.7	28.0	50.2	56.0
Label and Graphic Materials
Segment Information
Net sales to unaffiliated customers	1,101.5	1,206.3	2,275.0	2,384.6
Label and Graphic Materials \| Operating segments
Segment Information
Net sales to unaffiliated customers	12.9	20.1	35.3	41.3
Income (loss) before taxes	137.5	162.1	310.0	301.6
Other expense, net	25.8	4.4	26.9	12.0
Retail Branding and Information Solutions \| Operating segments
Segment Information
Net sales to unaffiliated customers	5.6	5.0	12.1	9.2
Income (loss) before taxes	(10.7)	50.4	20.2	101.8
Other expense, net	12.9	1.7	16.2	(0.3)
Industrial and Healthcare Materials
Segment Information
Net sales to unaffiliated customers	132.1	171.1	279.7	334.6
Industrial and Healthcare Materials \| Operating segments
Segment Information
Net sales to unaffiliated customers	1.2	2.9	2.8	5.5
Income (loss) before taxes	7.5	16.5	22.4	30.1
Other expense, net	1.5	$ 1.4	2.0	$ 3.3
Corporate \| Operating segments
Segment Information
Other expense, net	$ (0.2)		$ (0.2)

Taxes Based on Income

6 Months Ended

Jun. 27, 2020

Taxes Based on Income

Taxes Based on Income

Note 8. Taxes Based on Income

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


	Three Months Ended						Six Months Ended
(Dollars in millions)	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
Income (loss) before taxes	$	103.3		$	188.7		$	284.2		$	(95.7)
Provision for (benefit from) income taxes		22.2			44.9			68.5			(93.5)
Effective tax rate		21.5	%		23.8	%		24.1	%		97.7	%

Our provision for income taxes for the three and six months ended June 27, 2020 included $3.3 million and $10.5 million, respectively, 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”). Our provisions for income taxes for the three and six months ended June 27, 2020 also included $11.8 million of net discrete tax benefit primarily from decreases in certain tax reserves, including associated interest and penalties, as a result of closing tax years and effective settlements of certain foreign tax audits. Additionally, our provision for income taxes for the six months ended June 27, 2020 primarily reflected $2.8 million of tax benefit related to excess tax benefits associated with stock-based payments.

Our provisions for income taxes for the three and six months ended June 27, 2020 were not materially affected by COVID-19. Moreover, our ability to generate sufficient taxable income was not adversely affected in certain jurisdictions where a significant portion of our net deferred tax assets is concentrated. Our provisions for income taxes for the three and six months ended June 27, 2020 were not materially impacted by the stimulus packages and subsequent interpretations enacted in the U.S. and other countries to provide economic relief to businesses in response to COVID-19.

Our provision for (benefit from) income taxes for the three and six months ended June 29, 2019 included $4.9 million and $10.3 million, respectively, 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. Effective in 2019, we implemented certain structural changes to better align with our operational strategies, one benefit of which was to reduce our base erosion payments below the statutory minimum threshold. As a result, our benefits from income taxes for the three and six months ended June 29, 2019 did not include tax charges related to Base Erosion Anti-Abuse Tax. Our benefit from income taxes for the six months ended June 29, 2019 also primarily reflected the following discrete items: (i) $6.8 million of tax benefit related to excess tax benefits associated with stock-based payments; (ii) $11.5 million of tax benefit from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years; and (iii) approximately $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 $446.9 million and $77 million of which was related to the release of stranded tax effects in “Accumulated other comprehensive income” through the income statement. The tax effects were stranded primarily as a result of the U.S. federal tax rate change under the U.S. Tax Cuts and Jobs Act. Refer to Note 5, “Pension and Other Postretirement Benefits,” to the unaudited Condensed Consolidated Financial Statements for more information on the termination of the ADPP.

The amount of income taxes we pay is subject to ongoing audits by taxing jurisdictions around the world. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts, and circumstances existing at the time. We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate. The final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our tax provision and the related liabilities. To date, we and our U.S. subsidiaries have completed the IRS’ Compliance Assurance Process Program through 2017. With limited exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2010.

During the second quarter of 2020, we became aware of a foreign withholding tax regime that could be interpreted to subject us to withholding tax compliance requirements on certain cross-border intellectual property transactions for years remaining open under the applicable statutes of limitations. We continue to evaluate whether this foreign withholding tax regime would apply to us based on its recent interpretation and relevant tax treaties and considering our facts and circumstances. We currently do not expect that our exposure, if any, will have a material impact on our financial position, results of operations or cash flows.

On July 20, 2020, the U.S. Department of Treasury released final regulations that provide certain U.S. taxpayers with an annual election to exclude foreign income that is subject to a high effective tax rate from their GILTI inclusions. The final regulations apply beginning with our 2021 tax year with an option to retroactively apply them to our 2018 through 2020 tax years. Due to the timing of the release and the complexities involved in evaluating the available options, we cannot reasonably estimate the impact of the final regulations at this time.

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 $10 million, primarily as a result of audit settlements and closing tax years.

Debt (Details) - USD ($) $ in Millions		1 Months Ended		3 Months Ended	6 Months Ended	12 Months Ended
Debt (Details) - USD ($) $ in Millions	Apr. 30, 2020	Mar. 28, 2020	Feb. 29, 2020	Jun. 27, 2020	Jun. 27, 2020	Dec. 28, 2019
Debt
Repayment of medium-term notes				$ 15.0
Fair value of debt				2,430.0	$ 2,430.0	$ 2,050.0
Aggregate principal amount	$ 250.0
Covenants compliance					we were in compliance with our financial covenants under the Revolver.	we were in compliance with our financial covenants under the Revolver.
Revolving credit facility
Debt
Maximum borrowing capacity			$ 800.0
Commitment for increased borrowing			$ 400.0
Amount outstanding				$ 0.0	$ 0.0	$ 0.0
Senior Notes Due April [2030]
Debt
Debt Instrument, Face Amount		$ 500.0
Debt Instrument, Interest Rate, Stated Percentage		2.65%
Proceeds, net of underwriting discounts and estimated offering expenses		$ 493.7

Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Net Income (Loss) Per Common Share
Net income (loss) available to common shareholders	$ 79.7	$ 143.4	$ 213.9	$ (3.5)
Weighted average number of common shares outstanding	83.4	84.3	83.4	84.3
Dilutive shares (additional common shares issuable under stock-based awards)	0.4	0.8	0.5
Weighted average number of common shares outstanding, assuming dilution	83.8	85.1	83.9	84.3
Net income (loss) per common share (in dollars per share)	$ 0.96	$ 1.70	$ 2.56	$ (0.04)
Net income (loss) per common share, assuming dilution (in dollars per share)	$ 0.95	$ 1.69	$ 2.55	$ (0.04)
Antidilutive shares, share-based compensation awards				1.0

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 27, 2020	Jul. 25, 2020
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 27, 2020
Document Transition Report	false
Entity File Number	1-7685
Entity Registrant Name	AVERY DENNISON CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-1492269
Entity Address, Address Line One	207 Goode Avenue
Entity Address, City or Town	Glendale
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91203
City Area Code	626
Local Phone Number	304-2000
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 Common Stock, Shares Outstanding		83,462,155
Current Fiscal Year End Date	--01-02
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000008818
Amendment Flag	false
Common stock, $1 par value
Title of 12(b) Security	Common stock, $1 par value
Trading Symbol	AVY
Security Exchange Name	NYSE
Senior notes due 2025 at 1.25%
Title of 12(b) Security	1.25% Senior Notes due 2025
Trading Symbol	AVY25
Security Exchange Name	NYSE

Supplemental Financial Information

6 Months Ended

Jun. 27, 2020

Supplemental Financial Information

Supplemental Financial Information

Note 14. Supplemental Financial Information

Inventories

Net inventories consisted of the following:


(In millions)	June 27, 2020		December 28, 2019
Raw materials	$	279.0	$	231.6
Work-in-progress		202.3		201.0
Finished goods		245.3		230.4
Inventories, net	$	726.6	$	663.0

Property, Plant and Equipment


(In millions)	June 27, 2020		December 28, 2019
Property, plant and equipment	$	3,235.7	$	3,171.6
Accumulated depreciation		(2,006.9)		(1,960.9)
Property, plant and equipment, net	$	1,228.8	$	1,210.7

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 collection experience, and current and expected future macroeconomic and market conditions, including as a result of COVID-19. Balances are written off in the period in which they are determined to be uncollectible.

The activity for the six months ended June 27, 2020 related to our allowance for credit losses was as follows:


(In millions)
Balance at December 28, 2019	$	27.1
Provision for credit losses⁽¹⁾		20.6
Amounts written off		(1.4)
Other, including foreign currency translation		.1
Balance at June 27, 2020	$	46.4

⁽¹⁾Primarily reflects impacts on customers as a result of COVID-19.

Net Income (Loss) Per Common Share (Tables)

6 Months Ended

Jun. 27, 2020

Net Income (Loss) Per Common Share

Schedule of net income (loss) per common share


		Three Months Ended				Six Months Ended
(In millions, except per share amounts)		June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
(A)	Net income (loss) available to common shareholders	$	79.7	$	143.4	$	213.9	$	(3.5)
(B)	Weighted average number of common shares outstanding		83.4		84.3		83.4		84.3
	Dilutive shares (additional common shares issuable under stock-based awards)		.4		.8		.5		—
(C)	Weighted average number of common shares outstanding, assuming dilution		83.8		85.1		83.9		84.3
Net income (loss) per common share: (A) ÷ (B)		$	.96	$	1.70	$	2.56	$	(.04)
Net income (loss) per common share, assuming dilution: (A) ÷ (C)		$	.95	$	1.69	$	2.55	$	(.04)

Goodwill and Other Intangibles Resulting from Business Acquisitions (Details) $ in Millions	6 Months Ended
	Jun. 27, 2020 USD ($)
Changes in the net carrying amount of goodwill
Goodwill, Beginning Balance	$ 930.8
Acquisition(1)	110.5
Translation adjustments	(1.5)
Goodwill, Ending Balance	1,039.8
Smartrac Acquisition
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract]
Intangible assets acquired	$ 78.0
Discount rate used to value the intangibles	13.50%
Patents and other acquired technology
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract]
Intangible assets acquired	$ 60.0
Amortization period (in years)	11 years
Customer relationships
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract]
Intangible assets acquired	$ 16.0
Amortization period (in years)	6 years
Trade names and trademarks
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract]
Intangible assets acquired	$ 2.0
Amortization period (in years)	5 years
Label and Graphic Materials
Changes in the net carrying amount of goodwill
Goodwill, Beginning Balance	$ 407.8
Translation adjustments	(1.7)
Goodwill, Ending Balance	406.1
Retail Branding and Information Solutions
Changes in the net carrying amount of goodwill
Goodwill, Beginning Balance	349.3
Acquisition(1)	110.5
Translation adjustments	0.7
Goodwill, Ending Balance	460.5
Industrial and Healthcare Materials
Changes in the net carrying amount of goodwill
Goodwill, Beginning Balance	173.7
Translation adjustments	(0.5)
Goodwill, Ending Balance	$ 173.2

Fair Value Measurements

6 Months Ended

Jun. 27, 2020

Fair Value Measurements

Fair Value Measurements

Note 11. 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 June 27, 2020:


			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
Trading securities	$	31.6	$	25.7	$	5.9	$	—
Derivative assets		7.3		—		7.3		—
Bank drafts		25.6		25.6		—		—
Liabilities
Derivative liabilities	$	13.0	$	.3	$	12.7	$	—

The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of December 28, 2019:


			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
Trading securities	$	30.6	$	26.0	$	4.6	$	—
Derivative assets		5.2		—		5.2		—
Bank drafts		21.3		21.3		—		—
Liabilities
Derivative liabilities	$	6.0	$	.4	$	5.6	$	—

Trading securities include fixed income securities (primarily U.S. government and corporate debt securities) measured at fair value using quoted prices/bids and a money market fund measured at fair value using net asset value. As of June 27, 2020, trading securities of $.6 million and $31 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. As of December 28, 2019, trading securities of $.4 million and $30.2 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. Derivatives that are exchange-traded are measured at fair value using quoted market prices and classified within Level 1 of the valuation hierarchy. Derivatives measured based on foreign exchange rate inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy. 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 unaudited Condensed Consolidated Balance Sheets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Supplemental Equity and Comprehensive Income Information (Tables)

6 Months Ended

Jun. 27, 2020

Supplemental Equity and Comprehensive Income Information

Schedule of Consolidated Statements of Shareholders' Equity


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Common stock issued, $1 par value per share	$	124.1	$	124.1	$	124.1	$	124.1
Capital in excess of par value
Beginning balance	$	852.5	$	851.5	$	874.0	$	872.0
Issuance of shares under stock-based compensation plans⁽¹⁾		(12.5)		6.2		(34.0)		(14.3)
Ending balance	$	840.0	$	857.7	$	840.0	$	857.7
Retained earnings
Beginning balance	$	3,064.8	$	2,663.5	$	2,979.1	$	2,864.9
Net income (loss)		79.7		143.4		213.9		(3.5)
Issuance of shares under stock-based compensation plans⁽¹⁾		.9		.9		(3.3)		(13.4)
Contribution of shares to 401(k) Plan⁽¹⁾		3.2		3.3		7.3		7.0
Dividends		(48.4)		(48.8)		(96.8)		(92.7)
Ending balance	$	3,100.2	$	2,762.3	$	3,100.2	$	2,762.3
Treasury stock at cost
Beginning balance	$	(2,456.0)	$	(2,287.8)	$	(2,425.1)	$	(2,223.9)
Repurchase of shares for treasury		—		(27.9)		(45.2)		(116.6)
Issuance of shares under stock-based compensation plans⁽¹⁾		6.6		1.8		18.6		24.1
Contribution of shares to 401(k) Plan⁽¹⁾		2.2		2.1		4.5		4.6
Ending balance	$	(2,447.2)	$	(2,311.8)	$	(2,447.2)	$	(2,311.8)
Accumulated other comprehensive loss
Beginning balance	$	(412.0)	$	(359.4)	$	(348.1)	$	(682.0)
Other comprehensive income (loss), net of tax⁽²⁾		8.8		(10.4)		(55.1)		312.2
Ending balance	$	(403.2)	$	(369.8)	$	(403.2)	$	(369.8)

⁽¹⁾We fund a portion of our employee-related expenses using shares of our common stock held in treasury. We reduce capital in excess of par value based on the grant date fair value of the awards vested and record net gains or losses associated with our use of treasury shares to retained earnings.

⁽²⁾In the first quarter of 2019, we effectively settled our remaining obligations under the ADPP. Refer to Note 5, "Pension and Other Postretirement Benefits,” to the unaudited Condensed Consolidated Financial Statements for more information.

Schedule of dividends per common share


	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Dividends per common share	$	.58	$	.58	$	1.16	$	1.10

Schedule of changes in "Accumulated other comprehensive loss" (net of tax)


			Pension and
	Foreign		Other
	Currency		Postretirement		Cash Flow
(In millions)	Translation		Benefits		Hedges		Total
Balance as of December 28, 2019	$	(245.1)	$	(101.8)	$	(1.2)	$	(348.1)
Other comprehensive loss before reclassifications, net of tax		(55.0)		—		(1.5)		(56.5)
Reclassifications to net income, net of tax		—		1.3		.1		1.4
Net current-period other comprehensive (loss) income, net of tax		(55.0)		1.3		(1.4)		(55.1)
Balance as of June 27, 2020	$	(300.1)	$	(100.5)	$	(2.6)	$	(403.2)


			Pension and
	Foreign		Other
	Currency		Postretirement		Cash Flow
(In millions)	Translation		Benefits		Hedges		Total
Balance as of December 29, 2018	$	(247.4)	$	(434.3)	$	(.3)	$	(682.0)
Other comprehensive income before reclassifications, net of tax⁽¹⁾		11.6		36.0		.3		47.9
Reclassifications to net loss, net of tax⁽²⁾		—		264.9		(.6)		264.3
Net current-period other comprehensive income (loss), net of tax		11.6		300.9		(.3)		312.2
Balance as of June 29, 2019	$	(235.8)	$	(133.4)	$	(.6)	$	(369.8)

⁽¹⁾Other comprehensive income before reclassifications, net of tax, for pension and other postretirement benefits related to the remeasurement of the ADPP’s net pension obligations and included tax of $10.7.

⁽²⁾Reclassifications to net loss for pension and other postretirement benefits included losses of $444.2 and related tax of $179.3 which were recorded in "Other non-operating expense, net" and "Provision for (benefit from) income taxes," respectively.

Supplemental Equity and Comprehensive Income Information

6 Months Ended

Jun. 27, 2020

Supplemental Equity and Comprehensive Income Information

Supplemental Equity and Comprehensive Income Information

Note 10. Supplemental Equity and Comprehensive Income Information

Consolidated Changes in Shareholders’ Equity


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Common stock issued, $1 par value per share	$	124.1	$	124.1	$	124.1	$	124.1
Capital in excess of par value
Beginning balance	$	852.5	$	851.5	$	874.0	$	872.0
Issuance of shares under stock-based compensation plans⁽¹⁾		(12.5)		6.2		(34.0)		(14.3)
Ending balance	$	840.0	$	857.7	$	840.0	$	857.7
Retained earnings
Beginning balance	$	3,064.8	$	2,663.5	$	2,979.1	$	2,864.9
Net income (loss)		79.7		143.4		213.9		(3.5)
Issuance of shares under stock-based compensation plans⁽¹⁾		.9		.9		(3.3)		(13.4)
Contribution of shares to 401(k) Plan⁽¹⁾		3.2		3.3		7.3		7.0
Dividends		(48.4)		(48.8)		(96.8)		(92.7)
Ending balance	$	3,100.2	$	2,762.3	$	3,100.2	$	2,762.3
Treasury stock at cost
Beginning balance	$	(2,456.0)	$	(2,287.8)	$	(2,425.1)	$	(2,223.9)
Repurchase of shares for treasury		—		(27.9)		(45.2)		(116.6)
Issuance of shares under stock-based compensation plans⁽¹⁾		6.6		1.8		18.6		24.1
Contribution of shares to 401(k) Plan⁽¹⁾		2.2		2.1		4.5		4.6
Ending balance	$	(2,447.2)	$	(2,311.8)	$	(2,447.2)	$	(2,311.8)
Accumulated other comprehensive loss
Beginning balance	$	(412.0)	$	(359.4)	$	(348.1)	$	(682.0)
Other comprehensive income (loss), net of tax⁽²⁾		8.8		(10.4)		(55.1)		312.2
Ending balance	$	(403.2)	$	(369.8)	$	(403.2)	$	(369.8)

Dividends per common share were as follows:


	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Dividends per common share	$	.58	$	.58	$	1.16	$	1.10

Changes in Accumulated Other Comprehensive Loss

The changes in “Accumulated other comprehensive loss” (net of tax) for the six-month period ended June 27, 2020 were as follows:


			Pension and
	Foreign		Other
	Currency		Postretirement		Cash Flow
(In millions)	Translation		Benefits		Hedges		Total
Balance as of December 28, 2019	$	(245.1)	$	(101.8)	$	(1.2)	$	(348.1)
Other comprehensive loss before reclassifications, net of tax		(55.0)		—		(1.5)		(56.5)
Reclassifications to net income, net of tax		—		1.3		.1		1.4
Net current-period other comprehensive (loss) income, net of tax		(55.0)		1.3		(1.4)		(55.1)
Balance as of June 27, 2020	$	(300.1)	$	(100.5)	$	(2.6)	$	(403.2)

The changes in “Accumulated other comprehensive loss” (net of tax) for the six-month period ended June 29, 2019 were as follows:


			Pension and
	Foreign		Other
	Currency		Postretirement		Cash Flow
(In millions)	Translation		Benefits		Hedges		Total
Balance as of December 29, 2018	$	(247.4)	$	(434.3)	$	(.3)	$	(682.0)
Other comprehensive income before reclassifications, net of tax⁽¹⁾		11.6		36.0		.3		47.9
Reclassifications to net loss, net of tax⁽²⁾		—		264.9		(.6)		264.3
Net current-period other comprehensive income (loss), net of tax		11.6		300.9		(.3)		312.2
Balance as of June 29, 2019	$	(235.8)	$	(133.4)	$	(.6)	$	(369.8)

Goodwill and Other Intangibles Resulting from Business Acquisitions (Tables)

6 Months Ended

Jun. 27, 2020

Goodwill and Other Intangibles Resulting from Business Acquisitions

Schedule of changes in net carrying amount of goodwill


	Label and		Retail Branding		Industrial and
	Graphic		and Information		Healthcare
(In millions)	Materials		Solutions		Materials		Total
Goodwill as of December 28, 2019	$	407.8	$	349.3	$	173.7	$	930.8
Acquisition⁽¹⁾		—		110.5		—		110.5
Translation adjustments		(1.7)		.7		(.5)		(1.5)
Goodwill as of June 27, 2020	$	406.1	$	460.5	$	173.2	$	1,039.8

⁽¹⁾Goodwill acquired related to the acquisition of Smartrac, which is based on a preliminary allocation to the Retail Branding and Information Solutions reportable segment. In the first quarter of 2020, a portion of the goodwill related to the acquisition of Smartrac was reported under Label and Graphic Materials, reflecting sales through that segment's channels. To better align the reporting with our current organization structure, the goodwill associated with the acquisition was reclassified and is now included solely under Retail Branding and Information Solutions. The amount of goodwill recognized is not expected to be deductible for income tax purposes.

Summary of the preliminary amounts and weighted useful lives of finite-lived intangible assets


			Amortization
	Amount		period
	(in millions)		(in years)
Patents and other acquired technology	$	60.0	11
Customer relationships		16.0	6
Trade names and trademarks		2.0	5

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 1,528.5	$ 1,795.7	$ 3,251.5	$ 3,535.8
Cost of products sold	1,145.6	1,313.4	2,383.5	2,588.1
Gross profit	382.9	482.3	868.0	947.7
Marketing, general and administrative expense	219.4	265.7	500.4	542.0
Other expense, net	40.0	7.5	44.9	15.0
Interest expense	20.0	19.5	38.8	39.0
Other non-operating expense, net	0.2	0.9	(0.3)	447.4
Income (loss) before taxes	103.3	188.7	284.2	(95.7)
Provision for (benefit from) income taxes	22.2	44.9	68.5	(93.5)
Equity method investment losses	(1.4)	(0.4)	(1.8)	(1.3)
Net income (loss)	$ 79.7	$ 143.4	$ 213.9	$ (3.5)
Per share amounts:
Net income (loss) per common share (in dollars per share)	$ 0.96	$ 1.70	$ 2.56	$ (0.04)
Net income (loss) per common share, assuming dilution (in dollars per share)	$ 0.95	$ 1.69	$ 2.55	$ (0.04)
Weighted average number of shares outstanding:
Common shares (in shares)	83.4	84.3	83.4	84.3
Common shares, assuming dilution (in shares)	83.8	85.1	83.9	84.3

Segment and Disaggregated Revenue Information

6 Months Ended

Jun. 27, 2020

Segment and Disaggregated Revenue Information

Segment and Disaggregated Revenue Information

Note 13. Segment and Disaggregated Revenue Information

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.


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Net sales to unaffiliated customers
Label and Graphic Materials:
U.S.⁽¹⁾	$	315.1	$	320.1	$	643.2	$	631.8
Europe⁽¹⁾		422.3		452.2		867.6		902.1
Asia⁽¹⁾		230.7		267.1		472.0		523.3
Latin America		70.9		94.4		161.1		185.0
Other international		62.5		72.5		131.1		142.4
Total Label and Graphic Materials⁽¹⁾		1,101.5		1,206.3		2,275.0		2,384.6
Retail Branding and Information Solutions:
Apparel⁽¹⁾		255.0		370.4		613.6		723.5
Printer Solutions		39.9		47.9		83.2		93.1
Total Retail Branding and Information Solutions⁽¹⁾		294.9		418.3		696.8		816.6
Industrial and Healthcare Materials		132.1		171.1		279.7		334.6
Net sales to unaffiliated customers	$	1,528.5	$	1,795.7	$	3,251.5	$	3,535.8

⁽¹⁾In the first quarter of 2020, an insignificant portion of the net sales and associated operating loss related to the acquisition of Smartrac was reported in Label and Graphic Materials' results, reflecting sales through that segment's channels. To better align the reporting with our current organization structure, the results associated with the acquisition were reclassified and are now included solely in Retail Branding and Information Solutions' results.

Additional Segment Information

Additional financial information by reportable segment is shown below.


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Intersegment sales
Label and Graphic Materials	$	12.9	$	20.1	$	35.3	$	41.3
Retail Branding and Information Solutions		5.6		5.0		12.1		9.2
Industrial and Healthcare Materials		1.2		2.9		2.8		5.5
Intersegment sales	$	19.7	$	28.0	$	50.2	$	56.0
Income (loss) before taxes
Label and Graphic Materials⁽¹⁾	$	137.5	$	162.1	$	310.0	$	301.6
Retail Branding and Information Solutions⁽¹⁾		(10.7)		50.4		20.2		101.8
Industrial and Healthcare Materials		7.5		16.5		22.4		30.1
Corporate expense		(10.8)		(19.9)		(29.9)		(42.8)
Interest expense		(20.0)		(19.5)		(38.8)		(39.0)
Other non-operating expense, net		(.2)		(.9)		.3		(447.4)
Income (loss) before taxes	$	103.3	$	188.7	$	284.2	$	(95.7)
Other expense, net by reportable segment
Label and Graphic Materials⁽¹⁾	$	25.8	$	4.4	$	26.9	$	12.0
Retail Branding and Information Solutions⁽¹⁾		12.9		1.7		16.2		(.3)
Industrial and Healthcare Materials		1.5		1.4		2.0		3.3
Corporate		(.2)		—		(.2)		—
Other expense, net	$	40.0	$	7.5	$	44.9	$	15.0
Other expense, net by type
Restructuring charges:
Severance and related costs	$	37.5	$	6.1	$	39.9	$	16.5
Asset impairment charges and lease cancellation costs		1.8		1.4		1.8		1.7
Other items:
Transaction and related costs		.7		—		3.2		—
Gain on sales of assets		—		—		—		(3.2)
Other expense, net	$	40.0	$	7.5	$	44.9	$	15.0

Goodwill and Other Intangibles Resulting from Business Acquisitions

6 Months Ended

Jun. 27, 2020

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

Changes in the net carrying amount of goodwill for the six months ended June 27, 2020 by reportable segment are shown below.


	Label and		Retail Branding		Industrial and
	Graphic		and Information		Healthcare
(In millions)	Materials		Solutions		Materials		Total
Goodwill as of December 28, 2019	$	407.8	$	349.3	$	173.7	$	930.8
Acquisition⁽¹⁾		—		110.5		—		110.5
Translation adjustments		(1.7)		.7		(.5)		(1.5)
Goodwill as of June 27, 2020	$	406.1	$	460.5	$	173.2	$	1,039.8

The duration and severity of COVID-19 could result in future impairment charges to our reportable segments’ goodwill balances. While we have concluded that a triggering event did not occur during the six months ended June 27, 2020, a prolonged pandemic could significantly impact our results of operations and result in changes to assumptions utilized in the determination of the estimated fair values of goodwill that could trigger an impairment.

Finite-Lived Intangible Assets

In connection with the Smartrac acquisition, we acquired approximately $78 million of identifiable intangible assets, which consisted of customer relationships, trade names and trademarks, and patents and other acquired technology. We utilized the income approach to estimate the fair values of the identifiable intangibles associated with the acquisition, primarily using Level 3 inputs. The discount rate we used to value these assets was 13.5%.

The table below summarizes the amounts and useful lives of these intangible assets as of the acquisition date.


			Amortization
	Amount		period
	(in millions)		(in years)
Patents and other acquired technology	$	60.0	11
Customer relationships		16.0	6
Trade names and trademarks		2.0	5

Refer to Note 2, “Acquisitions,” to the unaudited Condensed Consolidated Financial Statements for more information.

Segment and Disaggregated Revenue Information (Tables)

6 Months Ended

Jun. 27, 2020

Segment and Disaggregated Revenue Information

Summary of net sales to unaffiliated customers


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Net sales to unaffiliated customers
Label and Graphic Materials:
U.S.⁽¹⁾	$	315.1	$	320.1	$	643.2	$	631.8
Europe⁽¹⁾		422.3		452.2		867.6		902.1
Asia⁽¹⁾		230.7		267.1		472.0		523.3
Latin America		70.9		94.4		161.1		185.0
Other international		62.5		72.5		131.1		142.4
Total Label and Graphic Materials⁽¹⁾		1,101.5		1,206.3		2,275.0		2,384.6
Retail Branding and Information Solutions:
Apparel⁽¹⁾		255.0		370.4		613.6		723.5
Printer Solutions		39.9		47.9		83.2		93.1
Total Retail Branding and Information Solutions⁽¹⁾		294.9		418.3		696.8		816.6
Industrial and Healthcare Materials		132.1		171.1		279.7		334.6
Net sales to unaffiliated customers	$	1,528.5	$	1,795.7	$	3,251.5	$	3,535.8

Summary of additional financial information by reportable segment


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Intersegment sales
Label and Graphic Materials	$	12.9	$	20.1	$	35.3	$	41.3
Retail Branding and Information Solutions		5.6		5.0		12.1		9.2
Industrial and Healthcare Materials		1.2		2.9		2.8		5.5
Intersegment sales	$	19.7	$	28.0	$	50.2	$	56.0
Income (loss) before taxes
Label and Graphic Materials⁽¹⁾	$	137.5	$	162.1	$	310.0	$	301.6
Retail Branding and Information Solutions⁽¹⁾		(10.7)		50.4		20.2		101.8
Industrial and Healthcare Materials		7.5		16.5		22.4		30.1
Corporate expense		(10.8)		(19.9)		(29.9)		(42.8)
Interest expense		(20.0)		(19.5)		(38.8)		(39.0)
Other non-operating expense, net		(.2)		(.9)		.3		(447.4)
Income (loss) before taxes	$	103.3	$	188.7	$	284.2	$	(95.7)
Other expense, net by reportable segment
Label and Graphic Materials⁽¹⁾	$	25.8	$	4.4	$	26.9	$	12.0
Retail Branding and Information Solutions⁽¹⁾		12.9		1.7		16.2		(.3)
Industrial and Healthcare Materials		1.5		1.4		2.0		3.3
Corporate		(.2)		—		(.2)		—
Other expense, net	$	40.0	$	7.5	$	44.9	$	15.0
Other expense, net by type
Restructuring charges:
Severance and related costs	$	37.5	$	6.1	$	39.9	$	16.5
Asset impairment charges and lease cancellation costs		1.8		1.4		1.8		1.7
Other items:
Transaction and related costs		.7		—		3.2		—
Gain on sales of assets		—		—		—		(3.2)
Other expense, net	$	40.0	$	7.5	$	44.9	$	15.0

Fair Value Measurements (Tables)

6 Months Ended

Jun. 27, 2020

Fair Value Measurements

Assets and liabilities carried at fair value, measured on a recurring basis

The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of June 27, 2020:


			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
Trading securities	$	31.6	$	25.7	$	5.9	$	—
Derivative assets		7.3		—		7.3		—
Bank drafts		25.6		25.6		—		—
Liabilities
Derivative liabilities	$	13.0	$	.3	$	12.7	$	—

The following table provides the assets and liabilities carried at fair value, measured on a recurring basis, as of December 28, 2019:


			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
Trading securities	$	30.6	$	26.0	$	4.6	$	—
Derivative assets		5.2		—		5.2		—
Bank drafts		21.3		21.3		—		—
Liabilities
Derivative liabilities	$	6.0	$	.4	$	5.6	$	—

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019
Operating Activities
Net income (loss)	$ 213.9	$ (3.5)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	74.6	70.4
Amortization	23.2	19.0
Provision for credit losses and sales returns	38.8	26.8
Stock-based compensation	1.4	16.5
Pension plan settlements and related charges		446.9
Deferred taxes and other non-cash taxes	16.4	(166.6)
Other non-cash expense and loss (income and gain), net	16.7	10.3
Changes in assets and liabilities and other adjustments	(201.0)	(181.0)
Net cash provided by operating activities	184.0	238.8
Investing Activities
Purchases of property, plant and equipment	(63.9)	(79.8)
Purchases of software and other deferred charges	(11.0)	(13.0)
Proceeds from sales of property, plant and equipment	0.1	7.4
Proceeds from insurance and sales (purchases) of investments, net	(0.4)	4.3
Payments for acquisition, net of cash acquired, and investments in businesses	(252.8)	(6.5)
Net cash used in investing activities	(328.0)	(87.6)
Financing Activities
Net increase in borrowings (maturities of three months or less)	92.5	112.9
Additional borrowings under revolving credit facility	500.0
Repayments of revolving credit facility	(500.0)
Additional long-term borrowings	493.7
Repayments of long-term debt and finance leases	(267.6)	(16.5)
Dividends paid	(96.8)	(92.7)
Share repurchases	(45.2)	(116.6)
Net (tax withholding) proceeds related to stock-based compensation	(20.5)	(20.4)
Payments of contingent consideration		(1.6)
Net cash provided by (used in) financing activities	156.1	(134.9)
Effect of foreign currency translation on cash balances	(3.2)	(1.0)
Increase in cash and cash equivalents	8.9	15.3
Cash and cash equivalents, beginning of year	253.7	232.0
Cash and cash equivalents, end of period	$ 262.6	$ 247.3

Taxes Based on Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Taxes Based on Income (Details) - USD ($) $ in Millions	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Income (loss) before taxes	$ 103.3	$ 188.7	$ 284.2	$ (95.7)
Provision for (benefit from) income taxes	$ 22.2	$ 44.9	$ 68.5	$ (93.5)
Effective tax rate (as a percent)	21.50%	23.80%	24.10%	97.70%
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)	$ 3.3	$ 4.9	$ 10.5	$ 10.3
Net discrete tax benefit primarily from decreases in certain tax reserves, including associated interest and penalties, as a result of closing tax years and effective settlements of certain foreign tax audits	11.8		11.8
Tax benefit from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years				11.5
Tax benefits related to excess tax benefits associated with stock-based payments			2.8	6.8
Reasonably possible decrease in uncertain tax positions, including interest and penalties, primarily as a result of audit settlements and closing tax years during the next 12 months	$ 10.0		$ 10.0
ADPP
Discrete tax benefits related to the effective settlement of the ADPP				179.0
Tax benefits related to the effective settlement of the ADPP on the tax effect of the pretax charge				102.0
Pretax charge related to the effective settlement of the ADPP				446.9
Tax benefit related to release of stranded tax effects in AOCI through income statement				$ 77.0

Supplemental Equity and Comprehensive Income Information - Consolidated Statements of Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019	Mar. 28, 2020	Dec. 28, 2019	Mar. 30, 2019
Increase (Decrease) in Stockholders' Equity
Common stock issued, $1 par value per share	$ 124.1	$ 124.1	$ 124.1	$ 124.1		$ 124.1
Common stock, par value (in dollars per share)	$ 1		$ 1		$ 1	$ 1	$ 1
Beginning balance			$ 1,204.0
Net income (loss)	$ 79.7	143.4	213.9	(3.5)
Other comprehensive income (loss), net of tax	8.8	$ (10.4)	(55.1)	$ 312.2
Ending balance	$ 1,213.9		$ 1,213.9
Dividends per common share (in dollars per share)	$ 0.58	$ 0.58	$ 1.16	$ 1.10
Capital in excess of par value
Increase (Decrease) in Stockholders' Equity
Beginning balance	$ 852.5	$ 851.5	$ 874.0	$ 872.0
Issuance of shares under stock-based compensation plans	(12.5)	6.2	(34.0)	(14.3)
Ending balance	840.0	857.7	840.0	857.7
Retained earnings
Increase (Decrease) in Stockholders' Equity
Beginning balance	3,064.8	2,663.5	2,979.1	2,864.9
Net income (loss)	79.7	143.4	213.9	(3.5)
Issuance of shares under stock-based compensation plans	0.9	0.9	(3.3)	(13.4)
Contribution of shares to 401(k) Plan	3.2	3.3	7.3	7.0
Dividends	(48.4)	(48.8)	(96.8)	(92.7)
Ending balance	3,100.2	2,762.3	3,100.2	2,762.3
Treasury stock at cost
Increase (Decrease) in Stockholders' Equity
Beginning balance	(2,456.0)	(2,287.8)	(2,425.1)	(2,223.9)
Repurchase of shares for treasury		(27.9)	(45.2)	(116.6)
Issuance of shares under stock-based compensation plans	6.6	1.8	18.6	24.1
Contribution of shares to 401(k) Plan	2.2	2.1	4.5	4.6
Ending balance	(2,447.2)	(2,311.8)	(2,447.2)	(2,311.8)
Accumulated other comprehensive loss
Increase (Decrease) in Stockholders' Equity
Beginning balance	(412.0)	(359.4)	(348.1)	(682.0)
Other comprehensive income (loss), net of tax	8.8	(10.4)	(55.1)	312.2
Ending balance	$ (403.2)	$ (369.8)	$ (403.2)	$ (369.8)

Supplemental Financial Information (Tables)

6 Months Ended

Jun. 27, 2020

Supplemental Financial Information

Schedule of net inventories


(In millions)	June 27, 2020		December 28, 2019
Raw materials	$	279.0	$	231.6
Work-in-progress		202.3		201.0
Finished goods		245.3		230.4
Inventories, net	$	726.6	$	663.0

Schedule of property, plant and equipment


(In millions)	June 27, 2020		December 28, 2019
Property, plant and equipment	$	3,235.7	$	3,171.6
Accumulated depreciation		(2,006.9)		(1,960.9)
Property, plant and equipment, net	$	1,228.8	$	1,210.7

Schedule of allowance for credit losses


(In millions)
Balance at December 28, 2019	$	27.1
Provision for credit losses⁽¹⁾		20.6
Amounts written off		(1.4)
Other, including foreign currency translation		.1
Balance at June 27, 2020	$	46.4

⁽¹⁾Primarily reflects impacts on customers as a result of COVID-19.

Cost Reduction Actions

6 Months Ended

Jun. 27, 2020

Cost Reduction Actions

Cost Reduction Actions

Note 6. Cost Reduction Actions

2019/2020 Actions

During the six months ended June 27, 2020, we recorded $41.9 million in restructuring charges related to our 2019/2020 actions. These charges consisted of severance and related costs for the reduction of approximately 1,750 positions from numerous locations across our company, which primarily included actions in our LGM and RBIS reportable segments. The actions in LGM were primarily associated with the consolidation of our graphics business in Europe, partially in response to COVID-19. The actions in RBIS were primarily related to global headcount and footprint reduction, with some actions accelerated and expanded in response to COVID-19.

2018/2019 Actions

During the six months ended June 27, 2020, we recorded $.2 million in net restructuring reversals related to our 2018/2019 actions.

During the six months ended June 27, 2020, restructuring charges and payments were as follows:


			Charges,						Foreign
	Accrual at		Net of		Cash		Non-cash		Currency		Accrual at
(In millions)	December 28, 2019		Reversals		Payments		Impairment		Translation		June 27, 2020
2019/2020 Actions
Severance and related costs	$	21.9	$	40.2	$	(17.8)	$	—	$	.5	$	44.8
Asset impairment		—		1.7		—		(1.7)		—		—

2018/2019 Actions
Severance and related costs		6.5		(.2)		(6.2)		—		.1		.2
Lease cancellation costs		.3		—		—		—		—		.3
Total	$	28.7	$	41.7	$	(24.0)	$	(1.7)	$	.6	$	45.3

Accruals for severance and related costs and lease cancellation costs were included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets. Asset impairment charges were based on the estimated market value of the assets, less selling costs, if applicable. Restructuring charges were included in “Other expense, net” in the unaudited Condensed Consolidated Statements of Operations.

The table below shows the total amount of restructuring charges, net of reversals, incurred by reportable segment.


	Three Months Ended				Six Months Ended
(In millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Restructuring charges, net of reversals, by reportable segment
Label and Graphic Materials	$	25.8	$	4.4	$	26.2	$	12.7
Retail Branding and Information Solutions		12.2		1.7		13.7		2.2
Industrial and Healthcare Materials		1.5		1.4		2.0		3.3
Corporate		(.2)		—		(.2)		—
Total	$	39.3	$	7.5	$	41.7	$	18.2

Supplemental Equity and Comprehensive Income Information - Changes in AOCI (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Changes in Accumulated other comprehensive loss (net of tax)
Balance at beginning of the period			$ (348.1)	$ (682.0)
Other comprehensive (loss) income before reclassifications, net of tax			(56.5)	47.9
Reclassifications to net income, net of tax			1.4	264.3
Net current-period other comprehensive (loss) income, net of tax	$ 8.8	$ (10.4)	(55.1)	312.2
Balance at end of the period	(403.2)	(369.8)	(403.2)	(369.8)
ADPP
Changes in Accumulated other comprehensive loss (net of tax)
Reclassifications to net income, net of tax				179.3
Foreign Currency Translation
Changes in Accumulated other comprehensive loss (net of tax)
Balance at beginning of the period			(245.1)	(247.4)
Other comprehensive (loss) income before reclassifications, net of tax			(55.0)	11.6
Net current-period other comprehensive (loss) income, net of tax			(55.0)	11.6
Balance at end of the period	(300.1)	(235.8)	(300.1)	(235.8)
Pension and Other Postretirement Benefits
Changes in Accumulated other comprehensive loss (net of tax)
Balance at beginning of the period			(101.8)	(434.3)
Other comprehensive (loss) income before reclassifications, net of tax				36.0
Reclassifications to net income, net of tax			1.3	264.9
Net current-period other comprehensive (loss) income, net of tax			1.3	300.9
Balance at end of the period	(100.5)	(133.4)	(100.5)	(133.4)
Pension and Other Postretirement Benefits \| ADPP
Changes in Accumulated other comprehensive loss (net of tax)
Other comprehensive (loss) income before reclassifications, net of tax				10.7
Reclassifications to net income, net of tax			444.2
Cash Flow Hedges
Changes in Accumulated other comprehensive loss (net of tax)
Balance at beginning of the period			(1.2)	(0.3)
Other comprehensive (loss) income before reclassifications, net of tax			(1.5)	0.3
Reclassifications to net income, net of tax			0.1	(0.6)
Net current-period other comprehensive (loss) income, net of tax			(1.4)	(0.3)
Balance at end of the period	$ (2.6)	$ (0.6)	$ (2.6)	$ (0.6)

Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 29, 2019	Jun. 29, 2019	Dec. 28, 2019
Components of net periodic benefit cost (credit)
Recognized loss on settlements		$ 446.9
ADPP
Components of net periodic benefit cost (credit)
Settlements			$ 753.0
Related tax benefits		179.0
Pretax charge related to the effective settlement of the ADPP		446.9
U.S. plans
Components of net periodic benefit cost (credit)
Net periodic benefit cost	$ 2.0	449.7
Settlements		446.9
International plans
Components of net periodic benefit cost (credit)
Net periodic benefit cost	$ 3.2	$ 6.5

General (Policies)	6 Months Ended
General (Policies)	Jun. 27, 2020
General
Fiscal Periods	Fiscal Periods The three and six months ended June 27, 2020 and June 29, 2019 consisted of thirteen-week and twenty-six week periods, respectively.
Accounting Guidance Updates	Accounting Guidance Updates Credit Losses In the first quarter of 2020, using the modified retrospective approach, we adopted amended accounting guidance that requires credit losses on financial instruments, including trade receivables, to be measured based on the expected credit loss model instead of the incurred loss model. The expected credit loss model requires us to consider forward-looking information to estimate our allowance for credit losses. Our adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.

Financial Instruments - (Details) - USD ($) $ in Millions	Jun. 27, 2020	Mar. 28, 2020
Cross currency contract
Financial Instruments
Notional amount		$ 250
Long-term retirement benefits and other liabilities
Financial Instruments
Fair value of the contract	$ (3)

General (Details)	3 Months Ended		6 Months Ended
General (Details)	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
General
Length of fiscal period	91 days	91 days	182 days	182 days

Acquisitions (Details) - Smartrac Acquisition € in Millions, $ in Millions	Feb. 28, 2020 USD ($)	Feb. 28, 2020 EUR (€)	Jun. 27, 2020 USD ($)
Acquisitions
Purchase consideration	$ 255.0	€ 232
Business Combination, Payable amount of customary adjustments			$ 4.9

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 27, 2020	Dec. 28, 2019
CONDENSED CONSOLIDATED BALANCE SHEETS
Trade accounts receivable, allowances (in dollars)	$ 46.4	$ 27.1
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	83,448,042	83,366,840
Treasury stock, shares	40,678,582	40,759,784

Commitments and Contingencies (Details) $ in Millions	6 Months Ended
Commitments and Contingencies (Details) $ in Millions	Jun. 27, 2020 USD ($) site	Dec. 28, 2019 USD ($)
Environmental Liabilities Associated with Remediation
Environmental site contingency number of sites \| site	12
Balance at beginning of the period	$ 21.4
Charges, net of reversals	0.8
Payments	(2.4)
Balance at end of the period	19.8
Short term environmental liabilities	$ 9.0	$ 10.0

Cost Reduction Actions - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 27, 2020 USD ($) position
2018 Plan
Cost Reduction Actions
Net restructuring reversals	$ 0.2
2019/2020 Actions
Cost Reduction Actions
Restructuring charges	$ 41.9
Number of positions eliminated \| position	1,750