0000008818
2008-12-28
2010-01-02
0000008818
2008-12-27
0000008818
2009-07-04
0000008818
2010-07-31
0000008818
2010-04-04
2010-07-03
0000008818
2009-04-05
2009-07-04
0000008818
2010-07-03
0000008818
2010-01-02
0000008818
2008-12-28
2009-07-04
0000008818
2010-01-03
2010-07-03
iso4217:USD
xbrli:shares
xbrli:shares
iso4217:USD
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left">
</div>
<!-- xbrl,ns -->
<!-- xbrl,nx -->
<div align="left" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Note 1. General</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the opinion of management, the accompanying unaudited condensed consolidated financial
statements include normal recurring adjustments necessary for a fair statement of Avery Dennison
Corporation’s (the “Company’s”) interim results. The unaudited condensed consolidated financial
statements and notes in this Form 10-Q are presented as permitted by Article 10 of Regulation S-X.
The unaudited condensed consolidated financial statements do not contain certain information
included in the Company’s 2009 audited consolidated financial statements and notes. This Form 10-Q
should be read in conjunction with the Company’s audited consolidated financial statements and
notes included in the Company’s 2009 Annual Report on Form 10-K.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The second quarters of 2010 and 2009 consisted of thirteen-week periods ending July 3, 2010 and
July 4, 2009, respectively. The interim results of operations are not necessarily indicative of
future financial results.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Financial Presentation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain prior year amounts have been reclassified to conform with the current year presentation.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 2 - us-gaap:InventoryDisclosureTextBlock-->
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 2. Inventories</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Inventories consisted of:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>January 2, 2010</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">249.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">217.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Work-in-progress
</div></td>
<td> </td>
<td> </td>
<td align="right">135.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">119.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished goods
</div></td>
<td> </td>
<td> </td>
<td align="right">242.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">205.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventories at lower of FIFO cost or market (approximates replacement cost)
</div></td>
<td> </td>
<td> </td>
<td align="right">627.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">542.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventory reserves
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(63.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(65.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventories, net
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">564.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">477.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 3. Goodwill and Other Intangibles Resulting from Business Acquisitions</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Goodwill</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Changes in the net carrying amount of goodwill from operations for 2010 and 2009, by reportable
segment, were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Pressure-</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Retail</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Office and</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>sensitive</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Information</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Consumer</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>specialty</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Materials</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Services</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Products</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>converting</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>businesses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of December 27, 2008
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">334.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,211.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">167.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,716.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Acquisition adjustments<sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Goodwill impairment charges
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(820.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(820.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Translation adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right">17.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of January 2, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">351.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">422.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">173.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">950.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Translation adjustments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(44.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of July 3, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">326.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">417.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">159.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">906.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Goodwill Summary:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">326.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,237.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">159.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,726.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Accumulated impairment losses
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(820.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(820.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of July 3, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">326.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">417.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">159.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">906.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div style="margin-top: 3pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>Acquisition adjustments in 2009 consisted of opening balance sheet adjustments
associated with the DM Label Group (“DM Label”) acquisition in April 2008 of $32.6 and other
acquisition adjustments of $(1.7).</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the first quarter of 2009, the Company recorded a non-cash impairment charge of $820 million for
the retail information services reporting unit, with no additional impairment charges recorded
thereafter.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Indefinite-Lived Intangible Assets</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In connection with the acquisition of Paxar Corporation, the Company acquired approximately $30
million of indefinite-lived intangible assets, consisting of certain trade names and trademarks,
which are not subject to amortization because they have an indefinite useful life. In the first
quarter of 2009, the Company recorded a non-cash impairment charge of $12 million related to these
indefinite-lived intangible assets, with no additional impairment charges recorded thereafter. The
carrying value of these indefinite-lived intangible assets was $17.8 million and $17.9 million at
July 3, 2010 and January 2, 2010, respectively, which included $.2 million and $.1 million of
negative currency impact, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Finite-Lived Intangible Assets</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth the Company’s finite-lived intangible assets resulting from business
acquisitions at July 3, 2010 and January 2, 2010, which continue to be amortized:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>July 3, 2010</b><b></b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>January 2, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Net</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Net</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Carrying</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amortization</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amortization</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amount</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Customer relationships
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">283.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">102.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">180.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">295.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">94.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">200.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents and other acquired technology
</div></td>
<td> </td>
<td> </td>
<td align="right">53.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trade names and trademarks
</div></td>
<td> </td>
<td> </td>
<td align="right">42.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other intangibles
</div></td>
<td> </td>
<td> </td>
<td align="right">14.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">393.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">170.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">222.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">409.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">165.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">244.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 3px double #000000"> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Amortization expense on finite-lived intangible assets resulting from business acquisitions was
$8.1 million and $16.3 million for the three and six months ended July 3, 2010, respectively, and
$8.4 million and $17 million for the three and six months ended July 4, 2009, respectively. As of
July 3, 2010, the estimated amortization expense for finite-lived intangible assets resulting from
completed business acquisitions for each of the next five fiscal years is expected to be
approximately $33 million in 2010, $33 million in 2011, $33 million in 2012, $31 million in 2013,
and $27 million in 2014.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, the weighted-average amortization periods from the date of acquisition and
weighted-average remaining useful lives of finite-lived intangible assets were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Weighted-average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Weighted-</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>amortization</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>average</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>periods from the</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>remaining</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In years)</td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>date of acquisition</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>useful life</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Customer relationships
</div></td>
<td> </td>
<td> </td>
<td align="right">13</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents and other acquired technology
</div></td>
<td> </td>
<td> </td>
<td align="right">13</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trade names and trademarks
</div></td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other intangibles
</div></td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:DebtDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 4. Debt</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On April 13, 2010, the Company issued $250 million senior notes bearing an interest rate of 5.375%
per year, due April 2020. Proceeds from the offering, net of underwriting discounts and offering
expenses, were approximately $248 million and were used to repay a portion of the indebtedness
outstanding under a term loan credit facility of one of the Company’s wholly-owned subsidiaries.
The outstanding balance of the term loan credit facility of $325 million was fully repaid in May
2010 using the proceeds from the issuance of the senior notes and commercial paper borrowings. In
the second quarter of 2010, the Company recorded a debt extinguishment loss of $1.2 million
(included in “Other expense, net” in the unaudited Consolidated Statement of Income) related to
unamortized debt issuance costs from the term loan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On March 10, 2009, the Company completed an exchange of approximately 6.6 million (or 75.15%) of
its HiMEDS units. In aggregate, the exchange resulted in the extinguishment of approximately $331
million of senior notes that are part of the Corporate HiMEDS units, the issuance of approximately
6.5 million shares of the Company’s common stock (par value $1.00 per share) with a book value of
approximately $297 million, and the payment of approximately $43 million in cash to participating
holders who validly tendered their Corporate HiMEDS units. As a result of this exchange, the
Company recorded a debt extinguishment loss of approximately $21 million (included in “Other
expense, net” in the unaudited Consolidated Statement of Income) in the first quarter of 2009,
which included a write-off of $9.6 million related to unamortized debt issuance costs. Refer to
Note 14, “Commitments and Contingencies,” for further information.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, the Company was in compliance with its financial covenants.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of the Company’s debt is estimated based on the discounted amount of future cash
flows using the current rates offered to the Company for debt of similar remaining maturities. The
fair value of the Company’s total debt, including short-term borrowings, was $1.61 billion at July
3, 2010 and $1.60 billion at January 2, 2010. Fair value amounts were determined primarily based
on Level 2 inputs, which are defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 5. Pension and Other Postretirement Benefits</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth the components of net periodic benefit cost for the periods shown:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="31" style="border-bottom: 1px solid #000000"><b>Pension Benefits</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 0px solid #000000"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 0px solid #000000"><b>July 4, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 0px solid #000000"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 0px solid #000000"><b>July 4, 2009</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Int’l</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Int’l</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Int’l</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Int’l</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Components of net periodic
benefit cost:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">6.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">5.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">10.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(12.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(6.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(12.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(6.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(24.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(13.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(24.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(12.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognized net actuarial loss
</div></td>
<td> </td>
<td> </td>
<td align="right">4.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of transition asset
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognized loss on curtailment
and settlement of obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="33" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">8.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">16.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">7.2</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="33" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>U.S. Postretirement Health Benefits</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Components of net periodic
benefit cost:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognized net actuarial loss
</div></td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company contributed $1.6 million and $3.8 million to its U.S. pension plans during the six
months ended July 3, 2010 and July 4, 2009, respectively. The Company expects to contribute
between $25 million to $30 million to its U.S. pension plans for the remainder of 2010.
Additionally, the Company contributed $1.6 million and $1.3 million to its U.S. postretirement
health benefit plan during the six months ended July 3, 2010 and July 4, 2009, respectively. For
the remainder of 2010, the Company expects to contribute an additional $1.5 million to its U.S.
postretirement health benefit plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company contributed approximately $14 million and approximately $20 million to its
international pension plans during the six months ended July 3, 2010 and July 4, 2009,
respectively. For the remainder of 2010, the Company expects to contribute an additional $4
million to its international pension plans.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognized $2.8 million and $6.3 million for the three and six months ended July 3,
2010, respectively, and $2.7 million and $4 million for the three and six months ended July 4,
2009, respectively, related to the Company’s matching contributions to participant contributions in
the Company’s defined contribution plan. This expense was recorded in “Marketing, general and
administrative expense” in the unaudited Consolidated Statement of Income and was funded through
the issuance of shares from the Company’s Employee Stock Benefit Trust.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:ResearchDevelopmentAndComputerSoftwareDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 6. Research and Development</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Research and development expense for the three and six months ended July 3, 2010 was $23.5 million
and $46.3 million, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the three and six months ended July 4, 2009, research and development expense was $21.6 million
and $44.8 million, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 7. Stock-Based Compensation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Net income included stock-based compensation expense related to stock options, performance units
(“PUs”), restricted stock units (“RSUs”) and restricted stock of $8.6 million and $16.2 million for
the three and six months ended July 3, 2010, respectively, and $6.8 million and $13.2 million for
the three and six months ended July 4, 2009, respectively. Total stock-based compensation expense
was included in “Marketing, general and administrative expense” in the unaudited Consolidated
Statement of Income and was recorded in corporate expense and the Company’s operating segments, as
appropriate.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In February 2010 and April 2010, the Company granted its annual stock-based compensation awards to
its employees and directors, respectively. Awards granted to retirement-eligible employees are
treated as though the awards were immediately vested; as a result, the compensation expense related
to these awards of $.6 million and $.9 million was recognized during the six months ended July 3,
2010 and July 4, 2009, respectively, and was included in the stock-based compensation expense noted
above.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, the Company had approximately $61 million of unrecognized compensation cost
related to unvested stock options, PUs, RSUs and restricted stock under the Company’s plans. The
total unrecognized compensation expense is expected to be recognized over the remaining
weighted-average requisite service period of approximately three years for stock options and
approximately two years for RSUs, PUs and restricted stock, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:RestructuringAndRelatedActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 8. Cost Reduction Actions</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Severance charges under the restructuring actions below were recorded to “Other current
liabilities” in the unaudited Condensed Consolidated Balance Sheet. Severance and related costs
represent cash paid or to be paid to employees terminated under these actions. Asset impairments
are based on the estimated market value of the assets. Charges below are included in “Other
expense, net” in the unaudited Consolidated Statement of Income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2010</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the first six months of 2010, the Company continued its cost reduction efforts that were
initiated in late 2008 and recorded $7.4 million in pretax charges, which consisted of $6.6 million
of severance and related costs and $.8 million of asset impairment charges. These actions are
resulting in a reduction of approximately 280 positions. As of July 3, 2010, approximately 130 of
these employees remain with the Company and are expected to leave in 2010. The table below details
the accruals and payments related to these actions:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Pressure-</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Retail</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Office and</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>sensitive</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Information</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Consumer</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>specialty</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Materials</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Services</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Products</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>converting</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>businesses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total severance and related
costs accrued during the
quarters ended:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">April 3, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">July 3, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total expense accrued during 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">3.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2010 Settlements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at July 3, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Asset Impairment</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Machinery and equipment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Buildings
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2009</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2009, the Company continued its cost reduction efforts that were initiated in late 2008,
resulting in a reduction of approximately 3,335 positions, impairment of certain assets, and lease
cancellations. At July 3, 2010, approximately 420 of these employees remain with the Company and
are expected to leave in 2010. Pretax charges related to these actions totaled $129.1 million,
including severance and related costs of $86.8 million, impairment of fixed assets, buildings, land
and patents of $39.9 million, and lease cancellation charges of $2.4 million. The table below
details the accruals and payments related to these actions:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Pressure-</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Retail</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Office and</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>sensitive</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Information</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Consumer</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>specialty</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Materials</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Services</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Products</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>converting</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Segment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>businesses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total severance and related
costs accrued during the
quarters ended:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">April 4, 2009
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">July 4, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">13.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">October 3, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">3.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">January 2, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">2.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total expense accrued during 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">27.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">86.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2009 Settlements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(54.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2010 Settlements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at July 3, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Asset Impairments</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Machinery and equipment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">28.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Buildings
</div></td>
<td> </td>
<td> </td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Land
</div></td>
<td> </td>
<td> </td>
<td align="right">.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents
</div></td>
<td> </td>
<td> </td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Other</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Lease cancellations
</div></td>
<td> </td>
<td> </td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">42.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 9. Financial Instruments and Foreign Currency</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company enters into certain foreign exchange hedge contracts to reduce its exposure to risk
from exchange rate fluctuations associated with receivables, payables, loans and firm commitments
denominated in certain foreign currencies that arise primarily as a result of its operations
outside the U.S. The Company enters into certain interest rate contracts to help manage its
exposure to interest rate fluctuations. The Company also enters into certain natural gas and other
commodity futures contracts to hedge price fluctuations for a portion of its anticipated domestic
purchases. The maximum length of time in which the Company hedges its exposure to the variability
in future cash flows for forecasted transactions is generally 12 to 24 months.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, the U.S. dollar equivalent notional values of the Company’s outstanding
commodity contracts and foreign currency contracts were $11.7 million and approximately $1 billion,
respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognizes all derivative instruments as either assets or liabilities at fair value.
The Company designates commodity forward contracts on forecasted purchases of commodities and
foreign currency contracts on forecasted transactions as cash flow hedges and designates foreign
currency contracts on existing balance sheet items as fair value hedges.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On April 1, 2010, the Company entered into a contract to lock in the Treasury rate component of the
interest rate on its $250 million debt issuance, which is discussed in Note 4, “Debt.” On April 9,
2010, the contract settled at a loss of $.3 million which is being amortized into interest expense
over the term of the related debt.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the balances and locations of derivatives as of July 3, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="5" style="border-bottom: 1px solid #000000"><b>Asset</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="5" style="border-bottom: 1px solid #000000"><b>Liability</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Balance Sheet Location</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Fair Value</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Balance Sheet Location</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Fair Value</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="5" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Other current assets</td>
<td> </td>
<td align="right">$</td>
<td align="right">10.7</td>
<td> </td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Other current liabilities</td>
<td> </td>
<td align="right">$</td>
<td align="right">11.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Commodity contracts
</div></td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Other current assets</td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Other current liabilities</td>
<td> </td>
<td> </td>
<td align="right">3.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10.9</td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="right">$</td>
<td align="right">14.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the balances and locations of derivatives as of January 2, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="5" style="border-bottom: 1px solid #000000"><b>Asset</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="5" style="border-bottom: 1px solid #000000"><b>Liability</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Balance Sheet Location</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Fair Value</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Balance Sheet Location</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Fair Value</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="5" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td align="left" valign="top">Other current assets</td>
<td> </td>
<td align="right">$</td>
<td align="right">5.0</td>
<td> </td>
<td> </td>
<td align="left" valign="top">Other current liabilities</td>
<td> </td>
<td align="right">$</td>
<td align="right">6.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Commodity contracts
</div></td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Other current assets</td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Other current liabilities</td>
<td> </td>
<td> </td>
<td align="right">3.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="right">$</td>
<td align="right">5.5</td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Fair Value Hedges</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss
on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the
hedged risk, are recognized in current earnings, resulting in no net material impact to income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the components of the gain (loss) recognized in income related to fair
value hedging contracts. The corresponding gains or losses on the underlying hedged items
approximated the net gain (loss) on these fair value hedging contracts.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="27%"> </td>
<td width="3%"> </td>
<td width="40%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Location of Gain (Loss) in Income</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="19" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">Foreign exchange contracts</td>
<td> </td>
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of products sold
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(1.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(1.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(1.7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">Foreign exchange contracts</td>
<td> </td>
<td nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Marketing, general and administrative expense
</div></td>
<td> </td>
<td> </td>
<td align="right">17.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="19" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top"> </td>
<td> </td>
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">16.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">31.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">23.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="19" valign="top" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Cash Flow Hedges</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For derivative instruments that are designated and qualify as a cash flow hedge, the effective
portion of the gain or loss on the derivative is reported as a component of accumulated other
comprehensive loss and reclassified into earnings in the same period or periods during which the
hedged transaction affects earnings. Gains and losses on the derivative representing either hedge
ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in
current earnings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the components of the gain (loss) recognized in accumulated other
comprehensive loss on derivatives (effective portion) related to cash flow hedging contracts:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(2.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3.7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Commodity contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate contract
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(4.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(6.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(6.6</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the components of the gain (loss) reclassified from accumulated other
comprehensive loss (effective portion) related to cash flow hedging contracts:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="22%"> </td>
<td width="3%"> </td>
<td width="32%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="4%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Location of Gain (Loss) in Income</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="19" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">Foreign exchange contracts</td>
<td> </td>
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of products sold
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(1.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">Commodity contracts</td>
<td> </td>
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of products sold
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(3.1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">Interest rate contracts</td>
<td> </td>
<td>
<div style="margin-left:15px; text-indent:-15px">Interest expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(4.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="19" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td align="left" valign="top"> </td>
<td> </td>
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(2.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(5.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(7.6</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="19" valign="top" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, a net loss of approximately $9 million is expected to be reclassified from
accumulated other comprehensive loss to earnings within the next 12 months. See Note 12,
“Comprehensive Income (Loss),” for more information.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The amount of gain or loss recognized in income related to the ineffective portion of, and the
amounts excluded from, effectiveness testing for cash flow hedges and derivatives not designated as
hedging instruments were not significant for the three and six months ended July 3, 2010 and July
4, 2009, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Foreign Currency</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Transactions in foreign currencies (including receivables, payables and loans denominated in
currencies other than the functional currency) decreased net income by $1.9 million and $3 million
for the three and six months ended July 3, 2010, respectively. Transactions in foreign currencies
decreased net income by $2.2 million and increased net loss by $1.8 million for the three and six
months ended July 4, 2009, respectively. These amounts exclude the effects from translation
of foreign currencies on the Company’s financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the three and six months ended July 3, 2010 and July 4, 2009, respectively, no translation gains
or losses for hyperinflationary economies were recognized in net income (loss) since the Company
had no operations in hyperinflationary economies.
</div>
</div>
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<!-- Begin Block Tagged Note 10 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 10. Taxes Based on Income</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The effective tax rate for the three and six months ended July 3, 2010 was approximately 33% and
approximately 32%, respectively. The effective tax rate for the three months ended July 4, 2009
was approximately 1%. The effective tax rate for the six months ended July 4, 2009 was
approximately 2%, which, when applied to the loss, resulted in a tax benefit. The effective tax
rate for the first six months of 2010 included an immaterial net impact from discrete events, as
the $3 million benefit in the first quarter of 2010 was offset by the $3 million expense in the
second quarter of 2010. Discrete events are primarily related to tax contingencies, statutory tax
rate changes and the release of certain valuation allowances. The Company’s effective tax rate is
lower than the U.S. federal statutory rate of 35% due to the Company’s operations outside the U.S.
where the statutory tax rates are generally lower. Additional taxes are not provided for most
foreign earnings because the Company currently plans to indefinitely reinvest these amounts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The amount of income taxes the Company pays is subject to ongoing audits by taxing jurisdictions
around the world. The Company’s estimate of the potential outcome of any uncertain tax issue is
subject to management’s assessment of relevant risks, facts, and circumstances existing at that
time. The Company believes that it has adequately provided for reasonably foreseeable outcomes
related to these matters. However, the Company’s future results may include favorable or
unfavorable adjustments to its estimated tax liabilities in the period the assessments are made or
resolved, which may impact the Company’s effective tax rate. With some exceptions, the Company and
its subsidiaries are no longer subject to income tax examinations by tax authorities for years
prior to 2005.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">It is reasonably possible that during the next 12 months, the Company may realize a decrease in its
gross uncertain tax positions by approximately $57 million, primarily as the result of cash
payments and closing tax years. The Company anticipates that it is reasonably possible that cash
payments of up to $14 million relating to gross uncertain tax positions could be paid within the
next 12 months.
</div>
</div>
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<!-- Begin Block Tagged Note 11 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 11. Net Income (Loss) Per Share</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Net income (loss) per common share amounts were computed as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions, except per share amounts)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">(A) Net income (loss) available to common
shareholders
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">83.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">39.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">138.5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(859.1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">(B) Weighted-average number of common shares
outstanding
</div></td>
<td> </td>
<td> </td>
<td align="right">105.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">105.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">105.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">102.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:35px; text-indent:-15px">Dilutive shares (additional common shares issuable
under employee stock-based awards)
</div></td>
<td> </td>
<td> </td>
<td align="right">1.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:35px; text-indent:-35px">(C) Weighted-average number of common shares
outstanding, assuming dilution
</div></td>
<td> </td>
<td> </td>
<td align="right">106.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">105.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">106.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">102.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss) per common share (A) ÷ (B)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">.79</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.38</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1.31</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(8.41</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss) per common share, assuming
dilution (A) ÷ (C)
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">.78</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.38</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1.30</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(8.41</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain employee stock-based 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. Employee
stock-based awards excluded from the computation totaled approximately 8 million shares and
approximately 9 million shares for the three and six months ended July 3, 2010, respectively, and
approximately 11 million shares for the three months ended July 4, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the six months ended July 4, 2009, the effect of normally dilutive securities (for example,
employee stock-based awards) was not dilutive because the Company generated a net operating loss.
Employee stock-based awards excluded from the computation totaled approximately 12 million shares
for the six months ended July 4, 2009.
</div>
</div>
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<!-- Begin Block Tagged Note 12 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 12. Comprehensive Income (Loss)</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Comprehensive income (loss) includes net income (loss), foreign currency translation adjustment,
net actuarial loss, prior service cost
and net transition assets, net of tax, and the gains or losses on the effective portion of
cash flow and firm commitment hedges, net of tax, that are currently presented as a component of
shareholders’ equity. The Company’s total comprehensive income (loss) was $37.5 million and $66
million for the three and six months ended July 3, 2010, respectively, and $102.9 million and
$(839.1) million for the three and six months ended July 4, 2009, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The components of accumulated other comprehensive loss (net of tax, with the exception of the
foreign currency translation adjustment) were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>January 2, 2010</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency translation adjustment
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">90.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">169.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net actuarial loss, prior service cost and net transition assets, less amortization
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(296.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(303.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss on derivative instruments designated as cash flow and firm commitment hedges
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(11.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(11.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(217.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(145.2</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Cash flow and firm commitment hedging instrument activities in other comprehensive loss, net of
tax, were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>January 2, 2010</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginning accumulated derivative loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(11.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(15.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss reclassified to earnings
</div></td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net change in the revaluation of hedging transactions
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(6.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(10.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending accumulated derivative loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(11.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(11.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 13 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note
13. Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Recurring Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the assets and liabilities carried at fair value, measured on a
recurring basis, as of July 3, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Markets</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 1)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 2)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Available for sale securities
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">12.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">12.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative assets
</div></td>
<td> </td>
<td> </td>
<td align="right">10.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative liabilities
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">14.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.3</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides the assets and liabilities carried at fair value, measured on a
recurring basis, as of January 2, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Markets</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 1)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 2)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 3)</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Available for sale securities
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">11.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative assets
</div></td>
<td> </td>
<td> </td>
<td align="right">5.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative liabilities
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">10.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6.5</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Available for sale securities are measured at fair value using quoted prices and classified within
Level 1 of the valuation hierarchy. Derivatives that are exchange-traded are measured at fair value
using quoted market prices and are classified within Level 1 of the
valuation hierarchy. Derivatives measured based on inputs that are readily available in
public markets are classified within Level 2 of the valuation hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Non-recurring Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the fair value measurements of assets on a non-recurring basis
during the six months ended July 3, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Quoted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Prices in</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Active</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Markets</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 1)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 2)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 3)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Losses</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-lived assets
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(.5</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Long-lived assets with carrying amounts totaling $2.4 million were written down to their fair
values of $1.9 million, resulting in an impairment charge of $.5 million for the three and six
months ended July 3, 2010, respectively, which were included in “Other expense, net” in the
unaudited Consolidated Statement of Income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the fair value measurements of assets on a non-recurring basis
during the six months ended July 4, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Quoted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Prices in</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Active</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Markets</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 1)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 2)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(Level 3)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Losses</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">415.0</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">415.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(820.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Indefinite-lived intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">18.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(12.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-lived assets
</div></td>
<td> </td>
<td> </td>
<td align="right">5.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(15.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Long-lived assets with carrying amounts totaling $20.5 million were written down to their fair
values of $5.5 million, resulting in an impairment charge of $2.6 million and $15 million for the
three and six months ended July 4, 2009, respectively, which was included in “Other expense, net”
in the unaudited Consolidated Statement of Income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill with a carrying amount of $1.2 billion was written down to its implied fair value of $415
million, resulting in a non-cash impairment charge of $820 million. Additionally, certain
indefinite-lived assets with a total carrying value of approximately $30 million were written down
to their implied fair value of $18 million, resulting in a non-cash impairment charge of $12
million. These charges are included in “Goodwill and indefinite-lived intangible asset impairment
charges” in the unaudited Consolidated Statement of Income for the three and six months ended July
4, 2009, respectively. Refer to Note 3, “Goodwill and Other Intangibles Resulting from Business
Acquisitions,” for further information.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 14. Commitments and Contingencies</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Legal Proceedings</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company provides the following update to the disclosure contained in its Annual Report on Form
10-K for the year ended January 2, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On May 21, 2003, The Harman Press filed in the Superior Court for the County of Los Angeles,
California, a purported class action on behalf of indirect purchasers of label stock against the
Company, UPM and UPM’s subsidiary Raflatac (“Raflatac”), seeking treble damages and other relief
for alleged unlawful competitive practices, with allegations including that the defendants
attempted to limit competition among themselves through anticompetitive understandings. Three
similar complaints were filed in various California courts. In November 2003, on petition from the
parties, the California Judicial Council ordered the cases be coordinated for pretrial
purposes. The cases were assigned to a coordination trial judge in the Superior Court for the
City and County of San Francisco on March 30, 2004. On September 30, 2004, the Harman Press amended
its complaint to add Bemis’ subsidiary Morgan Adhesives Company (“MACtac”) as a defendant. On
January 21, 2005, American International Distribution Corporation filed a purported class action on
behalf of indirect purchasers in the Superior Court for Chittenden County, Vermont. Similar actions
were filed by Richard Wrobel, on February 16, 2005, in the District Court of Johnson County,
Kansas; and by Chad and Terry Muzzey, on February 16, 2005, in the District Court of Scotts Bluff
County, Nebraska. On February 17, 2005, Judy Benson filed a purported multi-state class action on
behalf of indirect purchasers in the Circuit Court for Cocke County, Tennessee. Without admitting
liability, the Company agreed to pay plaintiffs $2 million to resolve all claims related to the
purported state class actions in the states of Kansas, Nebraska, Tennessee and Vermont. Those
settlements were approved by the Tennessee court on March 12, 2010. The Company recorded $2
million in the third quarter of 2009 in respect of the settlement of those claims, and made that
payment on December 28, 2009. Also, without admitting any liability, the Company paid $2.5 million
on July 15, 2010 to resolve all claims in the California action. This settlement was preliminarily
approved by the California court on July 23, 2010 with the final approval hearing scheduled for
December 2010. In respect of settlement of this claim, the Company recorded $.7 in the fourth
quarter of 2009 and $.3 and $1.5 million in the first and second quarters of 2010,
respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company and its subsidiaries are involved in various other lawsuits, claims, inquiries, and
other regulatory and compliance matters, most of which are routine to the nature of the Company’s
business. Based upon current information, management believes that the impact of the resolution of
these other matters is not material to the Company’s financial position, or is not estimable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Environmental</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, the Company has been designated by the U.S. Environmental Protection Agency
(“EPA”) and/or other responsible state agencies as a potentially responsible party (“PRP”) at
fourteen waste disposal or waste recycling sites, which are the subject of separate investigations
or proceedings concerning alleged soil and/or groundwater contamination and for which no settlement
of the Company’s liability has been agreed. The Company is participating with other PRPs at such
sites, and anticipates that its share of cleanup costs will be determined pursuant to remedial
agreements entered into in the normal course of negotiations with the EPA or other governmental
authorities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has accrued estimated liabilities for these and certain other sites, including sites in
which governmental agencies have designated the Company as a PRP, where it is probable that a loss
will be incurred and the cost or amount of loss can be reasonably estimated. However, because of
the uncertainties associated with environmental assessment and remediation activities, future
expense to remediate the currently identified sites and any sites that could be identified in the
future for cleanup could be higher than the liability currently accrued.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The activity for the first six months of 2010 related to environmental liabilities, which includes
costs associated with compliance and remediation, was as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td align="left">(In millions)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 2, 2010
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">56.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchase price adjustments related to acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accruals
</div></td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Payments
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2.6</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at July 3, 2010
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">54.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, approximately $11 million of the total balance was classified as short-term.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">These estimates could change depending on various factors, such as modification of currently
planned remedial actions, changes in remediation technologies, changes in site conditions, changes
in the estimated time to complete remediation, changes in laws and regulations affecting
remediation requirements, as well as other factors.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Product Warranty</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company provides for an estimate of costs that may be incurred under its basic limited warranty
at the time product revenue is recognized. These costs primarily include materials and labor
associated with the service or sale of the product. Factors that affect the Company’s warranty
liability include the number of units installed or sold, historical and anticipated rate of
warranty claims on those units, cost per claim to satisfy the Company’s warranty obligation and
availability of insurance coverage. Because these factors are impacted by actual experience and
future expectations, the Company assesses the adequacy of its recorded warranty liability and
adjusts the amounts as necessary. As of July 3, 2010, the Company’s product warranty liabilities
were $1.8 million.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Other</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On September 9, 2005, the Company completed the lease financing for a commercial facility
located in Mentor, Ohio, used primarily for the headquarters and research center for its roll
materials division. The facility consists generally of land, buildings, equipment and office
furnishings. The Company leases the facility under an operating lease arrangement, which contains
a residual value guarantee of $33.4 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company participates in international receivable financing programs with several financial
institutions whereby advances may be requested from these financial institutions. These advances
are guaranteed by the Company. At July 3, 2010, the Company had guaranteed approximately $14
million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, the Company guaranteed up to approximately $17 million of certain foreign
subsidiaries’ obligations to their suppliers, as well as approximately $411 million of certain
subsidiaries’ lines of credit with various financial institutions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 3, 2010, approximately 2 million HiMEDS units with a carrying value of approximately
$109 million remained outstanding. The purchase contracts related to these units obligate the
holders to purchase from the Company a certain number of shares in November 2010, dependent upon
the stock price at the time. Based upon the Company’s share price as of July 3, 2010, the holders
would purchase approximately 2 million shares from the Company.
Refer to Note 4. “Debt,” for further information.
</div>
</div>
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<!-- Begin Block Tagged Note 15 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 15. Segment Information</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Financial information by reportable segment and other businesses is set forth below. Certain prior
year amounts have been restated to reflect a transfer of a business from the Retail Information
Services segment to other specialty converting businesses.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(In millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 3, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>July 4, 2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Net sales to unaffiliated customers:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pressure-sensitive Materials
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">923.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">793.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,821.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,602.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Retail Information Services
</div></td>
<td> </td>
<td> </td>
<td align="right">411.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">330.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">756.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">646.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Office and Consumer Products
</div></td>
<td> </td>
<td> </td>
<td align="right">208.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">216.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">388.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">401.3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other specialty converting businesses
</div></td>
<td> </td>
<td> </td>
<td align="right">135.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">114.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">268.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">231.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net sales to unaffiliated customers
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1,680.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,455.4</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3,234.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2,881.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Intersegment sales:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pressure-sensitive Materials
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">38.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">35.1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">80.0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">72.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Retail Information Services
</div></td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Office and Consumer Products
</div></td>
<td> </td>
<td> </td>
<td align="right">.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other specialty converting businesses
</div></td>
<td> </td>
<td> </td>
<td align="right">9.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Eliminations
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(48.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(39.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(96.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(80.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Intersegment sales
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Income (loss) before taxes:</b><sup style="font-size: 85%; vertical-align: text-top"> </sup>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pressure-sensitive Materials
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">87.5</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">50.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">175.3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">50.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Retail Information Services
</div></td>
<td> </td>
<td> </td>
<td align="right">35.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(5.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">35.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(858.1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Office and Consumer Products
</div></td>
<td> </td>
<td> </td>
<td align="right">31.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other specialty converting businesses
</div></td>
<td> </td>
<td> </td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(11.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">7.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(39.1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(11.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(8.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(27.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(38.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(21.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(20.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(38.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(47.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Income (loss) before taxes
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">125.8</td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">40.2</td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">202.7</td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top">(3)</sup></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(875.7</td>
<td nowrap="nowrap">)<sup style="font-size: 85%; vertical-align: text-top">(4)</sup></td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 3pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>Operating income for the second quarter of 2010 included “Other expense, net”
totaling $4.6, consisting of restructuring costs of $1.9, asset impairment charges of $.6, a
loss from curtailment and settlement of a foreign pension obligation of $1.9, and a loss of
$1.2 from debt extinguishment, partially offset by a gain on sale of investment of $(.5) and
net gain on legal settlements of $(.5). Of the total $4.6, the Pressure-sensitive Materials
segment recorded $1.5, the Retail Information Services segment recorded $.6, the Office and
Consumer Products segment recorded $1.8, and corporate recorded $.7.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="right" style="font-size: 10pt; margin-top: 0pt">
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td>Operating income for the second quarter of 2009 included “Other expense, net”
totaling $29.6, consisting of restructuring costs of
$25.8, asset impairment charges of $3.3, and lease cancellation charges of $.5. Of the total
$29.6, the Pressure-sensitive Materials segment recorded $13.8, the Retail Information Services
segment recorded $5.1, the Office and Consumer Products segment recorded $3, and the other
specialty converting businesses recorded $7.7.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(3)</sup></td>
<td> </td>
<td>Operating income for the first six months of 2010 included “Other expense, net”
totaling $10.9, consisting of restructuring costs of $6.6, asset impairment charges of $.8, a
loss from curtailment and settlement of a foreign pension obligation of $1.9, a loss of $1.2
from debt extinguishment, and net legal settlement costs of $.9, partially offset by a gain on
sale of investment of $(.5). Of the total $10.9, the Pressure-sensitive Materials segment
recorded $3.4, the Retail Information Services segment recorded $4, the Office and Consumer
Products segment recorded $2.5, the other specialty converting businesses recorded $.3, and
corporate recorded $.7.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(4)</sup></td>
<td> </td>
<td>Operating loss for the first six months of 2009 included “Other expense, net”
totaling $126.9, consisting of restructuring costs of $42.9, asset impairment charges of
$25.2, lease cancellation charges of $.6, legal settlement costs of $37, and a loss of $21.2
from debt extinguishment. Of the total $126.9, the Pressure-sensitive Materials segment
recorded $61.9, the Retail Information Services segment recorded $14.7, the Office and
Consumer Products segment recorded $5.7, the other specialty converting businesses recorded
$23.4, and corporate recorded $21.2.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"> </td>
<td> </td>
<td>Additionally, operating loss for the Retail Information Services segment for the first six months
of 2009 included $832 of goodwill and indefinite-lived intangible asset impairment charges.</td>
</tr>
</table>
</div>
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<!-- Begin Block Tagged Note 16 - us-gaap:ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 16. Recent Accounting Requirements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2010, the Financial Accounting Standards Board (“FASB”) updated accounting guidance
regarding fair value measurement disclosure. This guidance requires companies to disclose the
amount of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the
reasons for these transfers and for any transfers in or out of Level 3 of the fair value hierarchy.
In addition, the guidance clarifies certain existing disclosure requirements. This updated guidance
was effective at the beginning of 2010 and did not have a material impact on the Company’s
disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, FASB issued changes to consolidation accounting. Among other items, these changes
respond to concerns about the application of certain key provisions of previous accounting
standards, including those regarding the transparency of the involvement with variable interest
entities. The Company adopted these changes at the beginning of 2010. These changes did not have a
material impact on the Company’s financial condition, results of operations, cash flows, or
disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">FASB issued in May 2009, and amended in February 2010, a new accounting standard on subsequent
events. This standard defines what qualifies as a subsequent event—those events or transactions
that occur following the balance sheet date, but before the financial statements are issued, or are
available to be issued. This standard was effective for interim and annual periods ending after
June 15, 2009. The Company adopted this accounting standard in the second quarter of 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, FASB issued changes to disclosure requirements regarding fair value of financial
instruments, which require disclosure about fair value of financial instruments, whether recognized
or not recognized in the unaudited Condensed Consolidated Balance Sheet, in interim financial
information. These changes also require fair value information to be presented together with the
related carrying amount and disclosure regarding the methods and significant assumptions used to
estimate fair value. These changes were effective for interim reporting periods ending after June
15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company has
included the required disclosures in Note 4, “Debt.”
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">FASB issued in December 2007, and amended in April 2009, a revised accounting standard for business
combinations. This standard defines the acquirer as the entity that obtains control of one or more
businesses in the business combination and establishes the acquisition date as the date that the
acquirer achieves control. In general, this standard requires the acquiring entity in a business
combination to recognize the fair value of all the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date as the fair value measurement point; and modifies the
disclosure requirements. This standard applies prospectively to business combinations for which
the acquisition date is on or after the first annual reporting period beginning on or after
December 15, 2008. The adoption of this standard did not have a material impact on the Company’s
financial results of operations and financial condition.
</div>
</div>
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false
--01-02
Q2
2011
2010-07-03
10-Q
0000008818
109911473
Yes
Large Accelerated Filer
2416413926
AVERY DENNISON CORPORATION
No
Yes
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