Avery Dennison (AVY) 10-K risk factor changes: FY2016 vs FY2016

The factors and risks discussed below, as well as the matters [removed: that are] generally [removed: set forth] [added: described] in this Annual Report on Form 10-K and the documents incorporated herein by reference, could materially adversely affect our business, including our results of operations, cash flows and financial condition, and cause the value of our securities to decline.

Our ability to attain our goals and objectives is dependent on numerous factors and risks, including but not limited to, the [removed: following:][added: ones described below:]

In [removed: 2015,] [added: 2016,] approximately [removed: 74%] [added: 75%] of our sales were from international operations.

Macroeconomic developments such as continued slower growth in China and parts of South America, the ongoing restructuring efforts relating to European sovereign and other debt obligations, the weakening of local economies in which we operate and uncertainty in the global credit or financial markets leading to the loss of consumer confidence could result in a material adverse effect on our business as a result of, among other things, reduced consumer spending, declines in asset valuations, diminished liquidity and credit availability, volatility in securities prices, credit rating downgrades, and fluctuations in foreign currency exchange rates, such as the [removed: recent] decline in [added: 2016 in] the value of the [added: British pound and declines in the value of the] euro and Chinese [removed: yuan (renminbi).][added: Yuan (renminbi) seen in recent years.]

In addition, business and operational disruptions or delays caused by political, social or economic instability and unrest – such as the ongoing significant civil, political and economic disturbances in places like Russia, Ukraine, Syria, [removed: Iraq] [added: Iraq, Iran, Turkey] and the related impact on global stability, terrorist attacks and the potential for other hostilities, public health crises or natural disasters in various parts of the world – could contribute to a climate of economic and political uncertainty that in turn could have material adverse effects on our business.

We are at risk that our competitors, which include certain of our [added: customers and] distributors, will expand in our key market segments and implement new technologies, enhancing their competitive position relative to ours.

We also are at risk to changes in customer order patterns, such as changes in the levels of inventory maintained by customers and the timing of customer purchases, which may be affected by announced price changes, changes in our incentive programs, or changes in the customer's ability to achieve incentive [added: targets.]

In addition, [removed: we are subject] to [removed: rules adopted] [added: verify our products as "conflict-free" as required] by [removed: the] SEC [removed: pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act] [added: rules] requiring disclosure concerning the use of certain minerals that are mined from the Democratic Republic of Congo and adjoining countries ("Conflict Mineral [removed: Rules").][added: Rules"), we could make alternative sourcing and supply decisions for materials used in certain of our products, which could materially adversely affect our pricing terms.]

Depending on market dynamics and the terms of customer contracts, our ability to recover any increased costs of [removed: complying with conflict minerals disclosure requirements or] obtaining raw materials from third party suppliers [added: due to the Conflict Mineral Rules or otherwise] may be limited.

_Our operations and activities outside of the U.S. may subject us to risks different from and potentially greater than those associated with our domestic [removed: operations._][added: operations_.]

A substantial portion of our employees and assets are located outside of the U.S. and, for the year ended [removed: January 2,] [added: December 31,] 2016, approximately [removed: 74%] [added: 75%] of our sales were generated from customers located outside of the U.S. International operations and activities involve risks that are different from and potentially greater than the risks we face with respect to our domestic operations, including our less extensive knowledge of and relationships with contractors, suppliers, distributors and customers in certain of these markets; changes in foreign political, regulatory and economic conditions, including nationally, regionally and locally; materially adverse effects of changes in exchange rates for foreign currencies; challenges with respect to the repatriation of foreign earnings; challenges of complying with a wide variety of foreign laws and regulations, including those relating to sales, corporate governance, operations, taxes, employment and legal proceedings; establishing effective controls and procedures to regulate our international operations and monitor compliance with U.S. laws and regulations such as the Foreign Corrupt Practices Act and similar foreign laws and regulations, including the United Kingdom's Bribery Act of 2010; differences in lending practices; challenges of complying with applicable export and import control laws and regulations; and differences in languages, cultures and time zones.

Many of these issues are discovered before shipping, causing delays in [removed: shipping, delays in the manufacturing process, and occasionally cancelled orders.]

In 2015, we announced a [removed: new] multi-year [added: transformation] plan for our [added: former] RBIS segment focused on accelerating growth through a more regionally driven business model intended to simplify our go-to-market market strategy, optimize management efficiencies and consolidate our manufacturing footprint.

For example, in the fourth quarter of 2015, we made the decision to exit one of our anticipated growth platforms in [removed: the] [added: our former] Vancive segment in order to refocus our efforts on more profitable strategic alternatives.

[added: We cannot provide assurance that we will achieve the] intended results of any of our business strategies, which involve operational complexities, consume management attention and require substantial resources and effort.

An increasing [removed: percentage] [added: amount] of our sales are derived from emerging markets, including countries in Asia, Latin America and Eastern Europe.

[removed: Our research] efforts are directed primarily toward developing new products and operating techniques and improving product performance, often in close association with our customers or end users.

Additionally, we focus on research projects related to RFID in our RBIS segment and medical technologies in [removed: Vancive,] [added: our IHM segment,] for both of which we hold and license a number of patents.

[removed: Our investment in the Kunshan facility and other] [added: These] infrastructure investments [removed: generally] are long-term in nature, and it is possible that these investments may not generate the expected return due to changes in the marketplace, failures to complete implementation, and other factors.

[removed: We] [added: In addition, we] intend to continue efforts to reduce costs in our operations, which have in the past included, and may continue to include, facility closures and square footage reductions, headcount [added: reductions, organizational restructuring, process standardization, and manufacturing relocation.]

With approximately [removed: 74%] [added: 75%] of our sales for the fiscal year ending [removed: January 2,] [added: December 31,] 2016 arising from foreign sales, we are subject to fluctuations in foreign currencies, such as the euro, the Chinese yuan (renminbi), and the British [removed: pound,] [added: pound] which can cause transaction, translation and other losses, and could negatively impact our sales and profitability.

For example, we completed the sale of certain of our assets and liabilities associated with a product line in our [added: former] RBIS segment in May 2015 at a loss and incurred impairment charges as well as exit costs, including costs associated with severance payments.

Any future divestitures we undertake may also involve additional risks, including separation of operations, products and personnel, diversion of management attention, [added: disruption to our other businesses and loss of key employees.]

In [removed: 2015,] [added: 2016,] approximately [removed: 74%] [added: 75%] of our sales were generated from customers located outside of the U.S., and a substantial portion of our assets and employees were located outside of the U.S. While we are taxed by local authorities on earnings from these sales, we have not accrued U.S. income taxes or foreign withholding taxes on [added: most of our] unrepatriated earnings for [removed: most] non-U.S. subsidiaries because we intend to indefinitely reinvest in the operations of those subsidiaries.

[added: Our results of operations and cash flows from] operating activities may be materially adversely affected if tax rules regarding unrepatriated earnings change, if changes in our domestic cash needs require us to repatriate foreign earnings for which no tax provisions have been made, or if the U.S. international tax rules change as part of comprehensive tax reform or other tax legislation.

We upgrade and install new systems, which, if installed or programmed incorrectly or on a delayed timeframe, could cause delays or cancellations of [removed: customer orders, impede the manufacture or shipment of products, or disrupt the processing of transactions.]

For example, we experienced several recent key management changes, including the appointments of a [added: new] Chief [removed: Operating] [added: Financial] Officer [removed: during 2014] [added: in 2015] and a new Chief [removed: Financial] [added: Executive] Officer [removed: during 2015.][added: in 2016.]

The credit ratings assigned to us also impact the [added: interest rates paid.]

A downgrade of our short-term credit ratings [removed: below our current levels] could impact our ability to access the commercial paper markets and increase our borrowing costs.

In [removed: 2015,] [added: 2016,] our average variable-rate borrowings were approximately [removed: $175] [added: $281] million.

An assumed [removed: 40] [added: 20] basis point move in interest rates affecting our variable-rate borrowings (10% of our weighted-average interest rate on floating rate debt) would have increased interest expense by approximately [removed: $.7] [added: $.5] million on variable-rate borrowings in [removed: 2015.][added: 2016.]

While it is unclear whether [removed: this action suggests] [added: these actions suggest] a change in previous monetary policy positions, including but not limited to an elimination of quantitative easing over time, any such change or market expectation of such change may result in significantly higher long-term interest rates.

_Unfavorable developments in legal proceedings, investigations and other legal, [added: environmental,] compliance and regulatory matters, could impact us in a materially adverse manner._

Our financial results could be materially adversely affected by an unfavorable outcome to pending or future litigation and investigations, and other legal, [added: environmental,] compliance and regulatory matters.

[removed: We expect to continue incurring costs] associated with complying with these disclosure requirements, including for conducting diligence procedures to determine the sources of conflict minerals that may be used or necessary to the production of our products and, if applicable, potential changes to products, processes or sources of supply as a consequence of these verification activities.

There can be no assurance that any [added: outcome of any litigation,] investigation or [removed: litigation outcome] [added: other legal, environmental, compliance and regulatory matter] will be favorable.

We are required to comply with the anti-corruption laws and regulations of the U.S. government and various international jurisdictions, such as the U.S. Foreign Corrupt Practices Act and the [removed: United Kingdom's] [added: UK's] Bribery Act of 2010.

[removed: Any change in export or import regulations, economic sanctions or] related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could decrease our ability to export or sell our products internationally.

[added: During 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (together, the "ACA") were signed into law in the U.S.] The complexities and ramifications of the ACA are significant and [removed: being] [added: continue to be] implemented through a phased approach that is expected to continue over the next several years.

For example, [removed: since its enactment,] there have been several changes to the ACA [added: since its enactment] and the law is likely to continue to evolve [removed: during] [added: to] the [removed: course of its implementation.]

Due to recent changes in the U.S. government, we face uncertainty with respect to trade relations between the U.S. and many of its trading partners.

There is significant risk that tariffs or other restrictions could be imposed on products imported from China, Mexico or other countries, or that relations with these

countries and U.S. trading parties could more broadly deteriorate.

These countries could retaliate by imposing similar tariffs or restrictions on products exported from the U.S. Any of these actions or further developments in U.S. trade relations could have a material adverse effect on our business.

For example, in 2016, we announced the loss of a specific customer personal care program that had a negative impact on our business during the year.

In June 2016, the United Kingdom ("UK") held a referendum in which voters approved the UK's exit from the European Union (commonly known as "Brexit").

The immediate impact of Brexit was a significant decline in the value of the British pound compared to the U.S. dollar.

There may be further volatility in the value of the British pound and the economic stability of the UK, which may affect our ability to sell products in the UK.

There is also uncertainty as to how Brexit will affect the legal and regulatory environment in the UK and European Union, as well as whether it may lead other countries in the European Union to approve similar measures and cause further uncertainty in the region.

While our operations in the UK are relatively small, legal and regulatory changes in this region could have a material adverse effect on our business.

shipping, delays in the manufacturing process, and occasionally cancelled orders.

The profitable growth of our business in emerging markets is a significant focus of our long-term growth strategy and our regional results can fluctuate significantly based on economic conditions in these regions, which occurred with our results in China in 2016.

Our research

In 2016, we announced additional investments in capacity to support growth in our U.S. graphics business, in Asia and Luxembourg, and in RFID and heat transfer technology.

For example, in 2015, we announced a multi-year transformation plan for our former RBIS segment focused on accelerating growth through a more regionally driven business model intended to simplify our go-to-market strategy, optimize management efficiencies and consolidate our manufacturing footprint.

In 2016, we completed the acquisition of the European business of Mactac, a leading manufacturer of high-quality pressure-sensitive materials serving several graphics, specialty labels and industrial tapes segments, for $220 million.

We also announced our agreement to acquire Hanita Coatings, a pressure-sensitive materials manufacturer of specialty films and laminates, for $75 million, subject to customary adjustments.

In February 2017, we announced our agreement to acquire Yongle Tape Company Ltd., a manufacturer of specialty tapes and related products used in a variety of industrial markets, for $190 million, which is subject to customary adjustments, with an additional earn-out opportunity of up to $55 million to be paid based on the acquired business' achievement of certain performance targets over the next two years.

Due to recent changes in the U.S. government, the impact of future changes in tax laws and regulations and their application by regulators are uncertain.

customer orders, impede the manufacture or shipment of products, or disrupt the processing of transactions.

For example, in 2016, we announced investment in information technology to upgrade the systems in our North American Label and Graphic Materials business and drive supply chain productivity.

_We have one U.S. collective bargaining unit and various non-U.S. collective labor arrangements, which make us subject to potential work stoppages, union and works council campaigns and other labor disputes, any of which could adversely impact our business._

Work interruptions or stoppages could significantly impact the volume of products we have available for sale.

In addition, collective bargaining agreements, union contracts and labor laws may impair our ability to reduce labor costs by closing or downsizing manufacturing facilities to restructure our business because of limitations on personnel and salary changes and similar restrictions.

A work stoppage at one or more of our facilities could have a material adverse effect on our business.

In addition, if any of our customers were to experience a work stoppage, that customer may halt or limit purchases of our products, which could have a material adverse effect on our business.

The U.S. Federal Reserve raised this rate by an additional quarter of a percentage point in December 2016 and indicated that additional increases would likely be forthcoming in 2017.

In addition, we may take actions to reduce the financial volatility associated with our pension liabilities, which could result in charges in the nearer term.

In 2016, we incurred approximately $41 million in non-cash charges in connection with the lump-sum settlement of certain pension obligations to terminated vested employees in our U.S. pension plan, which reduced our pension liability by approximately $70 million.

We expect to continue incurring costs

Any change in export or import regulations, economic sanctions or

Recent changes in the U.S. government could lead to repeal of or changes in some or all of the ACA; complying with any new legislation and/or reversing changes implemented under the ACA could be time-intensive and expensive, resulting in a material adverse effect on our business.

extent it continues to be implemented in accordance with its current terms.

targets.

In an effort to verify our products as "conflict-free," we could make alternative sourcing and supply decisions for materials used in certain of our products, which could materially adversely affect our pricing terms, particularly if suppliers incur significant additional costs and expenses in making the determinations required to conduct this verification process or if the number of suppliers offering minerals identified as "conflict free" is limited.

We cannot provide assurance that we will achieve the

The profitable growth of our business in emerging markets is a significant focus of our long-term growth strategy.

reductions, organizational restructuring, process standardization, and manufacturing relocation.

disruption to our other businesses and loss of key employees.

Our results of operations and cash flows from

interest rates paid.

We have identified products in certain businesses in our RBIS

and Vancive segments that include metals and minerals subject to the Conflict Mineral Rules.

Our due diligence efforts to verify the origins of these metals and minerals are ongoing.

During 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (together, the "ACA") were signed into law in the U.S. Certain of the provisions that could most significantly increase our healthcare costs in the near term include the removal of annual plan limits, the changes in rules regarding eligibility for dependents and the mandate that health plans cover 100% of preventative care.

In addition, our healthcare costs could increase if we are required to cover more employees than we do currently or pay penalty amounts in the event that employees do not elect our offered coverage.

The information called for by this Item [removed: is contained] [added: appears] under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our [removed: 2015] [added: 2016] Annual Report and incorporated herein by reference.

The information called for by this Item is contained under "Market-Sensitive Instruments and Risk Management" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our [removed: 2015] [added: 2016] Annual Report and incorporated herein by reference.

Some pressure-sensitive materials are sold to label printers and converters that [removed: "convert"] [added: convert] the materials into labels and other products through embossing, printing, stamping and die-cutting.

Our reportable segments [removed: in 2015] [added: for fiscal year 2016] were:

In [removed: 2015,] [added: 2016,] the [removed: PSM] [added: LGM, RBIS,] and [removed: RBIS] [added: IHM] segments [removed: contributed] [added: made up] approximately [removed: 73%] [added: 69%, 24%] and [removed: 26%,] [added: 7%,] respectively, of our total sales.

In [removed: 2015,] [added: 2016,] international operations constituted a substantial majority of our business, representing approximately [removed: 74%] [added: 75%] of our sales.

As of [removed: January 2,] [added: December 31,] 2016, we operated approximately 180 manufacturing and distribution facilities worldwide and had operations in over 50 countries.

Our [removed: PSM] [added: LGM] segment manufactures and sells Fasson®-, JAC®-, and Avery Dennison®-brand pressure-sensitive label and packaging materials, Avery [removed: Dennison®-brand] [added: Dennison®- and Mactac®-brand] graphics, [removed: Avery Dennison®-brand reflective products, Avery Dennison®-brand tapes,] and [removed: performance polymers (largely used to manufacture pressure-sensitive materials).][added: Avery]

The business of this segment tends not to be seasonal, except for certain outdoor graphics and reflective [removed: products and operations in Europe.][added: products.]

Pressure-sensitive materials consist primarily of papers, plastic films, metal foils and fabrics, which are coated with company-developed [added: and purchased adhesives, and then laminated with specially coated backing papers and films.]

[removed: These label] [added: Label] and packaging materials are sold worldwide to label [removed: printers and] converters for labeling, decorating, [removed: fastening, electronic data processing] and special applications in the home and personal care, beer and beverage, durables, pharmaceutical, wine and spirits, and food market segments.

It generally consists of four layers: a face material, which may be paper, metal foil, plastic film or fabric; an adhesive, which may be permanent or removable; a release coating; and a backing material to protect the adhesive [removed: against] [added: from] premature contact with other [removed: surfaces, which] [added: surfaces that] can also serve as [removed: the] [added: a] carrier for supporting and dispensing individual labels.

When the products are to be used, the release coating and protective backing are removed, exposing the [removed: adhesive, and] [added: adhesive so that] the label or other face material [removed: is] [added: may be] pressed or rolled into place.

Because [removed: self-adhesive materials] [added: they] are easy to apply without the need for adhesive activation, [removed: the use of] self-adhesive materials can provide cost savings compared [removed: with] [added: to] other materials that require heat- or moisture-activated adhesives.

Self-adhesive materials provide consistent and versatile adhesion and are available in a large selection of [removed: materials in nearly every size, shape] [added: materials, which can be made into labels of varying sizes] and [removed: color.][added: shapes.]

We also sell durable cast and reflective films to the construction, automotive, and fleet transportation market [removed: segments;] [added: segments] and reflective films for traffic and safety applications.

We provide sign shops, commercial printers and designers a broad range of pressure-sensitive materials to enable [removed: the creation of] [added: them to create] impactful and informative brand and decorative graphics.

Our [removed: performance tapes] [added: tape] products include coated tapes and adhesive transfer tapes that are sold for use in non-mechanical fastening, bonding and sealing [removed: systems in various industries.][added: systems.]

[removed: These] [added: The] tapes are [removed: sold to industrial original equipment manufacturers, converters, and disposable diaper producers worldwide] [added: available] in roll form and [removed: are available] in a wide range of face materials, sizes, thicknesses and adhesive properties.

In the [removed: PSM] [added: LGM] segment, our larger competitors in label and packaging materials include Raflatac, a subsidiary of UPM-Kymmene [added: Corporation, Lintec] Corporation; [removed: MACTac;] Ritrama, [removed: Inc.;] [added: Inc.,] Flexcon Corporation, [removed: Inc.;] [added: Inc.,] and various regional firms.

For [removed: performance tapes,] [added: tapes and bonding solutions,] our primary competitors include 3M, Tesa-SE, [removed: and] Nitto Denko [removed: Corporation.][added: Corporation, and various regional firms.]

We believe that our technical expertise, [removed: relative] size and scale of operations, [removed: ability to serve our customers with a] broad line of quality products and service programs, distribution [removed: and] [added: capabilities,] brand strength, and new product innovation are [removed: among] the [removed: more significant] [added: primary] advantages in maintaining and further developing our competitive position.

Our RBIS segment designs, manufactures and sells a wide variety of branding and information solutions to retailers, brand owners, apparel manufacturers, distributors and industrial customers on a [added: global basis.]

[removed: The business of this] [added: This] segment [removed: tends to be seasonal,] [added: experiences some seasonality,] with higher volume generally in advance of the spring, fall (back-to-school), and holiday shipping periods.

[removed: RBIS information solutions include RFID-enabled inventory accuracy,] visibility and loss prevention solutions; price ticketing and marking; care, content, and country of origin compliance solutions; and brand protection and security solutions.

In the RBIS segment, our primary competitors include Checkpoint Systems, Inc., [added: a subsidiary of CCL Industries Inc.,] R-pac International Corporation, and SML Group Limited.

Our [removed: Vancive segment is a leader in the development of innovative technologies for medical applications and manufactures] [added: Vancive-brand products include] an array of [removed: pressure-sensitive adhesive] [added: PSA] materials and products that address the needs of medical device manufacturers, clinicians, and patients for surgical, wound care, ostomy, [removed: electromedical,] and [removed: wearable] [added: electromedical] device applications.

[added: For] Vancive [removed: competes] [added: products, we compete] with a variety of specialized medical [added: tapes and converted] products [removed: providers] [added: suppliers] ranging from start-ups to multinational companies.

We believe that entry [removed: of competitors] into the medical solutions business is limited by capital and [removed: technical] [added: regulatory] requirements.

[removed: We] [added: For both our Vancive and fastener solutions businesses, we] believe that our ability to serve our customers with [removed: quality,] [added: high-quality,] cost-effective [added: solutions] and [removed: innovative products] [added: our innovation capabilities] are [removed: among] the [removed: more] [added: most] significant factors in developing our competitive [removed: position.][added: positions.]

Certain financial information on our reporting segments for fiscal years [added: 2016,] 2015, [removed: 2014,] and [removed: 2013] [added: 2014] appears in Note 15, "Segment Information," in the Notes to Consolidated Financial Statements contained in our [removed: 2015] [added: 2016] Annual Report to Shareholders (our [removed: "2015] [added: "2016] Annual Report") and is incorporated herein by reference.

Certain financial information about our sales by geographic area for fiscal years [added: 2016,] 2015, [removed: 2014,] and [removed: 2013] [added: 2014] appears in Note 15, "Segment Information," in the Notes to Consolidated Financial Statements contained in our [removed: 2015] [added: 2016] Annual Report and is incorporated herein by reference.

Certain financial information about our working capital for fiscal years [added: 2016,] 2015, [removed: 2014,] and [removed: 2013] [added: 2014] appears in the "Financial Condition" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" (Part II, Item 7) and is incorporated herein by reference.

Our research efforts are directed primarily toward developing new products and operating techniques and improving [added: productivity and] product performance, often in close association with customers.

These efforts include patent and product development work relating to printing and coating technologies, as well as adhesive, release and ink [added: chemistries.]

Additionally, we focus on research projects related to RFID in our RBIS segment and medical technologies in [removed: Vancive,] [added: our IHM segment,] for both of which we hold and license a number of patents.

Our expenses for research and development were [removed: $91.9] [added: $89.7] million in [removed: 2015, $102.5] [added: 2016, $91.9] million in [removed: 2014,] [added: 2015,] and [removed: $96] [added: $102.5] million in [removed: 2013.][added: 2014.]

A portion of our manufacturing process for self-adhesive materials utilizes certain organic solvents which, unless controlled, could be emitted into the [removed: atmosphere.][added: atmosphere or contaminate soil or groundwater.]

Emissions of [added: and contamination by] these substances are regulated by federal, state, local and foreign governments.

[removed: print to stockholders who request them] [added: These documents are also available free of charge] by [removed: writing to:] [added: written request to] Corporate Secretary, Avery Dennison Corporation, 207 Goode Avenue, Glendale, California 91203.

In the fourth quarter of 2016, we changed our operating structure to align with our overall business strategy, and our Chief Executive Officer, who is also our chief operating decision maker, requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance.

As a result of these events, our fiscal year 2016 results are reported based on our new reportable segments described below and in Note 15, "Segment Information." We have reclassified certain prior period amounts to reflect our new operating structure.

Label and Graphic Materials ("LGM");

Industrial and Healthcare Materials ("IHM").

These segment changes resulted in the movement of performance tapes (previously part of the former Pressure-sensitive Materials segment) and fastener solutions (previously part of RBIS) into the IHM segment.

Label and Graphic Materials Segment

Dennison®-brand reflective products.

In recent years, as the apparel industry has moved to more frequent seasonal updates, this segment has experienced less seasonality than in previous years.

RBIS information solutions include item-level RFID solutions,

Industrial and Healthcare Materials Segment

Our IHM segment manufactures and sells Fasson®-brand and Avery Dennison®-brand tapes and fasteners, VanciveTM\-brand medical pressure-sensitive adhesive (PSA) based materials and products, and performance polymers.

The mechanical fasteners are primarily precision extruded and injection-molded plastic devices used in various applications in automotive, industrial, and retail applications.

These tapes and fasteners are sold worldwide to original equipment manufacturers, as well as converters, for use in various bonding and fastening applications in the automotive, electronics, building and construction, other industrial, and personal care segments.

We believe that entry of competitors into this field is limited by technical knowledge and capital requirements.

We believe that our technical expertise, size and scale of operations, broad line of quality products and new product innovation are the most significant advantages in maintaining and further developing our competitive position in this business.

For fastener products, there are a variety of competitors supplying extruded and injection molded fasteners and fastener attaching equipment.

They range from smaller regional competitors to multinational companies.

We believe that entry into this business is limited by capital requirements and technical knowledge.

Certain prior period amounts have been reclassified to reflect our new reportable segments, as described above.

Reports filed with the SEC may be viewed at www.sec.gov or obtained at the SEC Public Reference Room in Washington, D.C. Information about the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

Pressure-sensitive Materials ("PSM");

Vancive Medical Technologies™ ("Vancive").

On July 1, 2013, we completed the sale our Office and Consumer Products ("OCP") and Designed and Engineered Solutions ("DES") businesses to CCL Industries Inc. We continue to be subject to indemnification obligations, including for breaches of certain representations, warranties and covenants, under the terms of the purchase agreement.

In addition, the tax liability associated with the sale is subject to completion of tax return filings in the jurisdictions where we operated the OCP and DES businesses.

The OCP and DES businesses are reported as discontinued operations in this Form 10-K.

Pressure-sensitive Materials Segment

and purchased adhesives, and then laminated with specially coated backing papers and films.

Performance polymer products include a range of solvent- and emulsion-based acrylic polymer adhesives, protective coatings and other polymer additives for our internal use, as well as for sale to other companies.

global basis.

Vancive Medical Technologies Segment

Vancive's recent advances include the development of BeneHoldTM CHG adhesive, a proprietary adhesive technology providing sustained antimicrobial performance for up to seven days.

It can be used in multiple applications in which prevention of infection is a requirement, including vascular access cover dressings.

chemistries.

These documents are also available free of charge in

As of [removed: January 2,] [added: December 31,] 2016, we have been designated by the U.S. Environmental Protection Agency ("EPA") and/or other responsible state agencies as a potentially responsible party ("PRP") at thirteen waste disposal or waste recycling [removed: sites, which] [added: sites that] are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination.

[removed: No settlement of our liability related to any of] the sites has been agreed upon.

We have accrued liabilities for sites where it is probable that a loss [added: or cost] will be incurred and the [removed: cost or] amount of loss [added: or cost] can be reasonably estimated.

[added: If information were to become available that allowed us to reasonably] estimate a range of potential expenses in an amount higher or lower than what we have accrued, we would adjust our environmental liabilities accordingly.

As of [removed: January 2,] [added: December 31,] 2016, our [removed: estimated] accrued liability associated with environmental remediation was [removed: $17.7] [added: $21.3] million.

See also Note 8, "Contingencies," in the Notes to Consolidated Financial Statements [removed: of] [added: contained in] our [removed: 2015] [added: 2016] Annual Report, which is incorporated herein by reference.

No settlement of our liability related to any of

If information were to become available that allowed us to reasonably

For the fiscal year ended [removed: January 2,] [added: December 31,] 2016

The aggregate market value of voting and non-voting common equity held by non-affiliates as of July [removed: 4, 2015,] [added: 2, 2016,] the last business day of the registrant's most recently completed second fiscal quarter, was [removed: $5,661,989,013.][added: $6,414,034,778.]

Number of shares of common stock, $1 par value, outstanding as of January [removed: 30, 2016,] [added: 28, 2017,] the end of the registrant's most recent fiscal month: [removed: 89,430,815.][added: 88,123,603.]

| Portions of Annual Report to Shareholders for fiscal year ended [removed: January 2,] [added: December 31,] 2016 | | Parts I, II |

| Portions of Definitive Proxy Statement for Annual Meeting of Stockholders to be held on April [removed: 28, 2016] [added: 27, 2017] | | Parts III, IV |

FISCAL YEAR [removed: 2015] [added: 2016] ANNUAL REPORT ON FORM 10-K

| [Item [removed: 1.](#ca76201_item_1._business)] [added: 1.](#ca43801_item_1._business)] | | [removed: [Business](#ca76201_item_1._business)] [added: [Business](#ca43801_item_1._business)] | | [removed: [1](#ca76201_item_1._business)] [added: [1](#ca43801_item_1._business)] |

| [Item [removed: 1A.](#ca76201_item_1a._risk_factors)] [added: 1A.](#ca43801_item_1a._risk_factors)] | | [Risk [removed: Factors](#ca76201_item_1a._risk_factors)] [added: Factors](#ca43801_item_1a._risk_factors)] | | [removed: [5](#ca76201_item_1a._risk_factors)] [added: [5](#ca43801_item_1a._risk_factors)] |

| [Item [removed: 1B.](#ce76201_item_1b._unresolved_staff_comments)] [added: 1B.](#cc43801_item_1b._unresolved_staff_comments)] | | [Unresolved Staff [removed: Comments](#ce76201_item_1b._unresolved_staff_comments)] [added: Comments](#cc43801_item_1b._unresolved_staff_comments)] | | [removed: [17](#ce76201_item_1b._unresolved_staff_comments)] [added: [18](#cc43801_item_1b._unresolved_staff_comments)] |

| [Item [removed: 2.](#ce76201_item_2._properties)] [added: 2.](#cc43801_item_2._properties)] | | [removed: [Properties](#ce76201_item_2._properties)] [added: [Properties](#cc43801_item_2._properties)] | | [removed: [17](#ce76201_item_2._properties)] [added: [18](#cc43801_item_2._properties)] |

| [Item [removed: 3.](#ce76201_item_3._legal_proceedings)] [added: 3.](#cc43801_item_3._legal_proceedings)] | | [Legal [removed: Proceedings](#ce76201_item_3._legal_proceedings)] [added: Proceedings](#cc43801_item_3._legal_proceedings)] | | [removed: [17](#ce76201_item_3._legal_proceedings)] [added: [18](#cc43801_item_3._legal_proceedings)] |

| [Item [removed: 4.](#ce76201_item_4._mine_safety_disclosures)] [added: 4.](#cc43801_item_4._mine_safety_disclosures)] | | [Mine Safety [removed: Disclosures](#ce76201_item_4._mine_safety_disclosures)] [added: Disclosures](#cc43801_item_4._mine_safety_disclosures)] | | [removed: [18](#ce76201_item_4._mine_safety_disclosures)] [added: [19](#cc43801_item_4._mine_safety_disclosures)] |

| [Item [removed: 5.](#cg76201_item_5._market_for_registrant___ite04666)] [added: 5.](#ce43801_item_5._market_for_registrant___ite04666)] | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#cg76201_item_5._market_for_registrant___ite04666)] [added: Securities](#ce43801_item_5._market_for_registrant___ite04666)] | | [removed: [19](#cg76201_item_5._market_for_registrant___ite04666)] [added: [20](#ce43801_item_5._market_for_registrant___ite04666)] |

| [Item [removed: 6.](#cg76201_item_6._selected_financial_data)] [added: 6.](#ce43801_item_6._selected_financial_data)] | | [Selected Financial [removed: Data](#cg76201_item_6._selected_financial_data)] [added: Data](#ce43801_item_6._selected_financial_data)] | | [removed: [19](#cg76201_item_6._selected_financial_data)] [added: [20](#ce43801_item_6._selected_financial_data)] |

| [Item [removed: 7.](#cg76201_item_7._management_s_discussio__ite03668)] [added: 7.](#ce43801_item_7._management_s_discussio__ite03668)] | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#cg76201_item_7._management_s_discussio__ite03668)] [added: Operations](#ce43801_item_7._management_s_discussio__ite03668)] | | [removed: [19](#cg76201_item_7._management_s_discussio__ite03668)] [added: [20](#ce43801_item_7._management_s_discussio__ite03668)] |

| [Item [removed: 7A.](#cg76201_item_7a._quantitative_and_qual__ite02669)] [added: 7A.](#ce43801_item_7a._quantitative_and_qual__ite02669)] | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#cg76201_item_7a._quantitative_and_qual__ite02669)] [added: Risk](#ce43801_item_7a._quantitative_and_qual__ite02669)] | | [removed: [19](#cg76201_item_7a._quantitative_and_qual__ite02669)] [added: [20](#ce43801_item_7a._quantitative_and_qual__ite02669)] |

| [Item [removed: 8](#cg76201_item_8._financial_statements_and_supplementary_data)] [added: 8](#ce43801_item_8._financial_statements_and_supplementary_data)] | | [Financial Statements and Supplementary [removed: Data](#cg76201_item_8._financial_statements_and_supplementary_data)] [added: Data](#ce43801_item_8._financial_statements_and_supplementary_data)] | | [removed: [20](#cg76201_item_8._financial_statements_and_supplementary_data)] [added: [21](#ce43801_item_8._financial_statements_and_supplementary_data)] |

| [Item [removed: 9.](#cg76201_item_9._changes_in_and_disagre__ite03576)] [added: 9.](#ce43801_item_9._changes_in_and_disagre__ite03576)] | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#cg76201_item_9._changes_in_and_disagre__ite03576)] [added: Disclosure](#ce43801_item_9._changes_in_and_disagre__ite03576)] | | [removed: [20](#cg76201_item_9._changes_in_and_disagre__ite03576)] [added: [21](#ce43801_item_9._changes_in_and_disagre__ite03576)] |

| [Item [removed: 9A.](#cg76201_item_9a._controls_and_procedures)] [added: 9A.](#ce43801_item_9a._controls_and_procedures)] | | [Controls and [removed: Procedures](#cg76201_item_9a._controls_and_procedures)] [added: Procedures](#ce43801_item_9a._controls_and_procedures)] | | [removed: [20](#cg76201_item_9a._controls_and_procedures)] [added: [21](#ce43801_item_9a._controls_and_procedures)] |

| [Item [removed: 9B.](#cg76201_item_9b._other_information)] [added: 9B.](#ce43801_item_9b._other_information)] | | [Other [removed: Information](#cg76201_item_9b._other_information)] [added: Information](#ce43801_item_9b._other_information)] | | [removed: [20](#cg76201_item_9b._other_information)] [added: [21](#ce43801_item_9b._other_information)] |

| [ PART [removed: III](#cg76201_part_iii)] [added: III](#ce43801_part_iii)] | | | | |

| [Item [removed: 10.](#cg76201_item_10._directors,_executive___ite02315)] [added: 10.](#ce43801_item_10._directors,_executive___ite02315)] | | [Directors, Executive Officers, and Corporate [removed: Governance](#cg76201_item_10._directors,_executive___ite02315)] [added: Governance](#ce43801_item_10._directors,_executive___ite02315)] | | [removed: [21](#cg76201_item_10._directors,_executive___ite02315)] [added: [22](#ce43801_item_10._directors,_executive___ite02315)] |

| [Item [removed: 11.](#ci76201_item_11._executive_compensation)] [added: 11.](#cg43801_item_11._executive_compensation)] | | [Executive [removed: Compensation](#ci76201_item_11._executive_compensation)] [added: Compensation](#cg43801_item_11._executive_compensation)] | | [removed: [23](#ci76201_item_11._executive_compensation)] [added: [24](#cg43801_item_11._executive_compensation)] |

| [Item [removed: 12.](#ci76201_item_12._security_ownership_of__ite04004)] [added: 12.](#cg43801_item_12._security_ownership_of__ite04004)] | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ci76201_item_12._security_ownership_of__ite04004)] [added: Matters](#cg43801_item_12._security_ownership_of__ite04004)] | | [removed: [23](#ci76201_item_12._security_ownership_of__ite04004)] [added: [24](#cg43801_item_12._security_ownership_of__ite04004)] |

| [Item [removed: 13.](#ci76201_item_13._certain_relationships__ite03067)] [added: 13.](#cg43801_item_13._certain_relationships__ite03067)] | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ci76201_item_13._certain_relationships__ite03067)] [added: Independence](#cg43801_item_13._certain_relationships__ite03067)] | | [removed: [23](#ci76201_item_13._certain_relationships__ite03067)] [added: [24](#cg43801_item_13._certain_relationships__ite03067)] |

| [Item [removed: 14.](#ci76201_item_14._principal_accounting_fees_and_services)] [added: 14.](#cg43801_item_14._principal_accounting_fees_and_services)] | | [Principal Accounting Fees and [removed: Services](#ci76201_item_14._principal_accounting_fees_and_services)] [added: Services](#cg43801_item_14._principal_accounting_fees_and_services)] | | [removed: [23](#ci76201_item_14._principal_accounting_fees_and_services)] [added: [24](#cg43801_item_14._principal_accounting_fees_and_services)] |

| [Item [removed: 15.](#ci76201_item_15._exhibits,_financial_statement_schedules)] [added: 15.](#cg43801_item_15._exhibits,_financial_statement_schedules)] | | [Exhibits, Financial Statement [removed: Schedules](#ci76201_item_15._exhibits,_financial_statement_schedules)] [added: Schedules](#cg43801_item_15._exhibits,_financial_statement_schedules)] | | [removed: [24](#ci76201_item_15._exhibits,_financial_statement_schedules)] [added: [25](#cg43801_item_15._exhibits,_financial_statement_schedules)] |

| [Power of [removed: Attorney](#ck76201_power_of_attorney)] [added: Attorney](#ci43801_power_of_attorney)] | | | | [removed: [26](#ck76201_power_of_attorney)] [added: [27](#ci43801_power_of_attorney)] |

10-K 1 a2230940z10-k.htm 10-K

2016 10-K

| [PART I](#ca43801_part_i) | | | | |

| [ PART II](#ce43801_part_ii) | | | | |

| [ PART IV](#cg43801_part_iv) | | | | |

| [Signatures](#ci43801_signatures) | | | | [26](#ci43801_signatures) |

10-K 1 a2227408z10-k.htm 10-K

Use these links to rapidly review the document

2015 10-K

| [PART I](#ca76201_part_i) | | | | |

| [ PART II](#cg76201_part_ii) | | | | |

| [ PART IV](#ci76201_part_iv) | | | | |

| [Signatures](#ck76201_signatures) | | | | [25](#ck76201_signatures) |

As of [removed: January 2,] [added: December 31,] 2016, we operated manufacturing facilities in excess of 100,000 square feet in the locations listed [removed: below:][added: below.]

| Domestic | | Peachtree City, Georgia; Fort Wayne, Greenfield, and Lowell, Indiana; Fairport Harbor, Mentor, and Painesville, Ohio; [added: Mill Hall] and Quakertown, Pennsylvania |

| Foreign | | [removed: Turnhout,] [added: Soignies,] Belgium; Vinhedo, Brazil; Kunshan, China; Champ-sur-Drac, France; Gotha and Schwelm, Germany; Rodange, Luxembourg; Bangi, Malaysia; and Cramlington, United Kingdom |

| Domestic | | [removed: Lenoir, North Carolina and] Miamisburg, Ohio |

| Foreign | | Nansha, Panyu, and Suzhou, [removed: China and] [added: China;] Ancarano, [removed: Italy] [added: Italy; and Long An Province, Vietnam] |

In addition to the manufacturing facilities described above, our other principal facilities include our corporate headquarters in Glendale, [removed: California,] [added: California] and our divisional offices located in Westborough, Massachusetts; Mentor, Ohio; Kunshan, China; and Oegstgeest, the Netherlands.

We own all of the principal properties identified above, except for [added: facilities in] the following [removed: facilities,] [added: locations,] which are leased: [removed: Vinhedo, Brazil;] Glendale, California; [added: Nansha and] Panyu, China; [removed: Rodange, Luxembourg;] Westborough, Massachusetts; Mentor, Ohio; and Oegstgeest, the Netherlands.

Label and Graphic Materials Segment

Industrial and Healthcare Materials Segment

| | | |

| --- | --- | --- |

| Domestic | | Painesville, Ohio |

| Foreign | | Turnhout, Belgium and Kunshan, China |

Pressure-sensitive Materials Segment

The information called for by Item 201 of Regulation S-K appears under "Corporate Information – Stock and Dividend Data" in our [removed: 2015] [added: 2016] Annual Report and is incorporated herein by reference.

We did not sell any unregistered securities during the fourth quarter of [removed: 2015.][added: 2016.]

Repurchases by us or our "affiliated purchasers" (as defined in Rule 10b-18(a)(3) of the Exchange Act) of registered equity securities in the three fiscal months of the fourth quarter of [removed: 2015] [added: 2016] are listed in the following table.

The periods shown are our fiscal periods during the thirteen-week quarter ended [removed: January 2,] [added: December 31,] 2016.

This [removed: authorization] is the only [removed: one] [added: authorization] currently in effect and [added: it] will remain in effect until [removed: the] shares [added: in the amount] authorized [removed: thereby] have been repurchased.

| October 2, 2016 – October 29, 2016 | | 227.2 | | $76.57 | | 227.2 | | |

| October 30, 2016 – November 26, 2016 | | 547.5 | | 70.28 | | 547.5 | | |

| November 27, 2016 – December 31, 2016 | | 347.2 | | 72.04 | | 347.2 | | |

| Total | | 1,121.9 | | $72.10 | | 1,121.9 | | $104.9 |

| October 4, 2015 – October 31, 2015 | | 283.5 | | $59.93 | | 283.5 | | |

| November 1, 2015 – November 28, 2015 | | 828.0 | | 64.70 | | 828.0 | | |

| November 29, 2015 – January 2, 2016 | | 826.6 | | 64.32 | | 826.6 | | |

| Total | | 1,938.1 | | $63.84 | | 1,938.1 | | $367.2 |

Selected financial data for each of our last five fiscal years appears under "Five-year Summary" in our [removed: 2015] [added: 2016] Annual Report and is incorporated herein by reference.

The information called for by this Item is contained in our [removed: 2015] [added: 2016] Annual Report (including the Consolidated Financial Statements and the Notes thereto, Statement of Management Responsibility for Financial Statements and Management's Report on Internal Control Over Financial Reporting, and the Report of Independent Registered Public Accounting Firm) and incorporated herein by reference.

_Disclosure Controls and Procedures._ As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including [removed: the] [added: our] Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act).

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer [removed: have] concluded that our disclosure controls and procedures [removed: are] [added: were] effective [removed: to provide] [added: in providing] reasonable assurance that information is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including [removed: the] [added: our] Chief Executive Officer and the Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including [removed: the] [added: our] Chief Executive Officer and the Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in _Internal Control — Integrated Framework (2013)_ issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of [removed: January 2,] [added: December 31,] 2016.

(See Management's Report on Internal Control Over Financial Reporting [added: contained] in our [removed: 2015] [added: 2016] Annual Report, which is incorporated herein by reference.)

Management's assessment of the effectiveness of our internal control over financial reporting as of [removed: January 2,] [added: December 31,] 2016 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in the Report of Independent Registered Public Accounting Firm contained in our [removed: 2015] [added: 2016] Annual Report, which is also incorporated herein by reference.

During 2014, we began a phased implementation of a new transactional system in our RBIS segment that is expected to continue through [removed: 2017.][added: 2018.]

Processes affected by this implementation include, among other things, order management, pricing, shipping, [added: purchasing,] general accounting and planning.

[removed: Except for these changes,] [added: Other than this implementation,] there have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The information concerning directors and corporate governance called for by this Item is incorporated herein by reference from the definitive proxy statement for our Annual Meeting of Stockholders to be held on April [removed: 28, 2016] [added: 27, 2017] (our [removed: "2016] [added: "2017] Proxy Statement"), which will be filed with the SEC pursuant to Regulation 14A within 120 days of the end of the fiscal year covered by this report.

The information concerning executive officers called for by this Item appears, in part, on the next page of this report, and is also incorporated by reference from our [removed: 2016] [added: 2017] Proxy Statement.

The information concerning any late filings under Section 16(a) of the Exchange Act is incorporated by reference from our [removed: 2016] [added: 2017] Proxy Statement.

We will satisfy [added: the] disclosure requirements [removed: under] [added: of] Item 5.05 of Form 8-K regarding any amendment to, or waiver of, any provision of the Code that applies to these officers [added: by] disclosing the nature of [added: any] such amendment or waiver on our website or in a [removed: current report] [added: Current Report] on Form 8-K.

The information called for by this Item concerning our Audit and Finance Committee is incorporated by reference from our [removed: 2016] [added: 2017] Proxy Statement.

EXECUTIVE OFFICERS OF AVERY [removed: DENNISON(1)][added: DENNISON(1)]

| [removed: Name] [added: Name and Position] | | Age | | Served as Executive Officer since | | Former Positions within Past Five [removed: Years /] [added: Years/] Prior [removed: Offices] [added: Positions] with Avery Dennison | | |

| Dean A. Scarborough | | [removed: 60] [added: 61] | | August 1997 | | [removed: 2010-2014] [added: 2014-2016] | | [removed: Chairman, President] [added: Chairman] and [added: Chief Executive Officer] |

| [added: Executive] Chairman [removed: and] | | | | | | [added: 2010-2014] | | [added: Chairman, President and] Chief Executive Officer |

| [removed: Chief Executive Officer] | | | | | | 2005-2010 | | President and Chief Executive Officer |

| Mitchell R. Butier | | [removed: 44] [added: 45] | | March 2007 | | [removed: 2014-2015] [added: 2015-2016] | | [removed: President,] [added: President and] Chief Operating Officer [removed: and] |

| President and | | | | | | [added: 2014-2015] | | [added: President,] Chief [removed: Financial] [added: Operating] Officer [added: and] |

| [removed: Chief Operating Officer] | | | | | | 2010-2014 | | Senior Vice President and |

| Anne L. Bramman | | [removed: 48] [added: 49] | | March 2015 | | 2011-2015 | | Senior Vice President and |

| [added: Susan C. Miller] | | [added: 57] | | [added: March 2008] | | [removed: 2008-2011] [added: 2008-2009] | | Senior Vice President and |

| [added: Chief Executive Officer] | | | | | | | | Chief Financial [removed: Officer, Henri Bendel] [added: Officer] |

| Lori J. Bondar | | [removed: 55] [added: 56] | | June 2010 | | 2008-2010 | | Vice President and Controller |

| [removed: Georges Gravanis] [added: President,] | | [removed: 58] | | [removed: May 2015] | | 2010-2015 | | Vice President and General Manager, |

| [removed: President,] [added: Label and Graphic] Materials [removed: Group] | | | | | | | | Materials Group Asia Pacific |

| Anne Hill | | [removed: 56] [added: 57] | | May 2007 | | | | |

| Georges Gravanis | | 59 | | May 2015 | | 2015-2016 | | President, Materials Group |

| Deon Stander | | 48 | | August 2016 | | 2013-2015 | | Vice President and General Manager, |

| Vice President and | | | | | | | | Global Commercial and Innovation, |

| General Manager, | | | | | | | | RBIS |

| Retail Branding | | | | | | 2010-2012 | | Vice President and |

| and Information | | | | | | | | General Manager, |

| Solutions ("RBIS") | | | | | | | | Global Commercial RBIS |

| Michael Johansen | | 51 | | December 2016 | | 2015-2016 | | Vice President and General Manager, |

| Vice President and | | | | | | | | Performance Tapes |

| General Manager, | | | | | | 2010-2015 | | Vice President & General Manager, |

| Industrial and Health Care | | | | | | | | RBIS Sourcing Regions & Supply Chain |

| Materials | | | | | | | | |

| Susan C. Miller | | 56 | | March 2008 | | 2008-2009 | | Senior Vice President and |

The information called for by this Item is incorporated by reference from our [removed: 2016] [added: 2017] Proxy Statement.

The information called for by this Item is incorporated by reference from our [removed: 2016] [added: 2017] Proxy Statement.

The information called for by this Item is incorporated by reference from our [removed: 2016] [added: 2017] Proxy Statement.

The information called for by this Item is incorporated by reference from our [removed: 2016] [added: 2017] Proxy Statement.

Dated: February [removed: 24, 2016][added: 23, 2017]

| /s/ Dean A. Scarborough Dean A. Scarborough | | | | [removed: Chairman and Chief] Executive [removed: Officer] [added: Chairman] | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Anne L. Bramman Anne L. Bramman | | | | Senior Vice President and Chief Financial Officer (Principal Financial Officer) | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Lori J. Bondar Lori J. Bondar | | | | Vice President, Controller, and Chief Accounting Officer (Principal Accounting Officer) | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Bradley A. Alford Bradley A. Alford | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Anthony K. Anderson Anthony K. Anderson | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Peter K. Barker Peter K. Barker | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Ken C. Hicks Ken C. Hicks | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ David E. I. Pyott David E. I. Pyott | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Patrick T. Siewert Patrick T. Siewert | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Julia A. Stewart Julia A. Stewart | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

| /s/ Martha N. Sullivan Martha N. Sullivan | | | | Director | | February [removed: 24, 2016] [added: 23, 2017] |

Data incorporated by reference from the attached portions of the [removed: 2015] [added: 2016] Annual Report to Shareholders of Avery Dennison Corporation:

| | Consolidated Balance Sheets as of [removed: January 2,] [added: December 31,] 2016 and January [removed: 3, 2015] [added: 2, 2016] | | |

| | Consolidated Statements of Income for [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] | | |

| | Consolidated Statements of Comprehensive Income for [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] | | |

| | Consolidated Statements of Shareholders' Equity for [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] | | |

| | Consolidated Statements of Cash Flows for [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] | | |

Except for the Consolidated Financial Statements, Statement of Management Responsibility for Financial Statements, Management's Report on Internal Control Over Financial Reporting and Report of Independent Registered Public Accounting Firm listed above, and certain information referred to in Items 1, 5, 6, 7, and 7A of this report that is expressly incorporated herein by reference, our [removed: 2015] [added: 2016] Annual Report to Shareholders is not to be deemed "filed" as part of this report.

For the Year Ended [removed: January 2,] [added: December 31,] 2016

| 10.2 | | Second [removed: Amendment,] [added: Amendment to ADOPC Credit Agreement,] dated as of January 23, [removed: 2009, to ADOPC Credit Agreement] [added: 2009] | | 99.4 | | Current Report on Form 8-K, filed January 27, 2009 |

| 13† | | Portions of Annual Report to Shareholders for fiscal year ended [removed: January 2,] [added: December 31,] 2016 | | N/A | | N/A |

| /s/ Mitchell R. Butier Mitchell R. Butier | | | | President, Chief Executive Officer, and Director | | February 23, 2017 |

| /s/ Andres A. Lopez Andres A. Lopez | | | | Director | | February 23, 2017 |

| 10.43* | | Offer Letter to Dean A. Scarborough | | 10.1 | | Quarterly Report on Form 10-Q, filed May 3, 2016 |

| 10.44* | | Offer Letter to Mitchell R. Butier | | 10.2 | | Quarterly Report on Form 10-Q, filed May 3, 2016 |

| 10.45* | | Localization Letter to Georges Gravanis | | 10.1 | | Quarterly Report on Form 10-Q, filed August 2, 2016 |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and as of the dates indicated.

| 2.1 | | Purchase Agreement, dated as of January 29, 2013, by and among CCL Industries, Inc. ("CCL"), a corporation organized under the laws of Canada, those subsidiaries of CCL to be designated pursuant to Section 5.8 thereof, Registrant, and those subsidiaries of Registrant listed in Annex A thereof | | 2.1 | | Current Report on Form 8-K, filed January 30, 2013 |

| 2.2 | | Amendment to Purchase Agreement, dated as of July 1, 2013, by and between Registrant and CCL | | 2.1 | | Current Report on Form 8-K, filed July 1, 2013 |