Management's explanation of the reported results — what drove revenue, margins, and cash flow — from the annual 10-K filing (Item 7, MD&A).
The text below is reproduced verbatim from AVY’s SEC filing. See also AVY’s supply chain and financial statements.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required by this Item appears under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual Report and is incorporated herein by reference. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required 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 2021 Annual Report and incorporated herein by reference. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item, including the Consolidated Financial Statements and Notes thereto, Statement of Management Responsibility for Financial Statements, Management’s Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm, is contained in our 2021 Annual Report and incorporated herein by reference. 22 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Item 9A. CONTROLS AND PROCEDURES 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 our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective 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 our Chief Executive Officer and our Chief Financial Officer as appropriate, to allow for timely decisions regarding required disclosure. Management’s Report on Internal Control Over Financial Reporting. We are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Under the supervision and with the participation of our management, including our Chief Executive Officer and our 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 January 1, 2022. We have excluded Vestcom from our assessment of internal control over financial reporting as of January 1, 2022 because we acquired the company in a purchase business combination during the third quarter of fiscal year 2021. Vestcom is a wholly-owned subsidiary, whose total assets (excluding goodwill and other intangibles, which are in the scope of our assessment) represents 3% and whose total revenue represents 2% of the related consolidated financial statement amounts as of and for the year ended January 1, 2022. The effectiveness of our internal control over financial reporting as of January 1, 2022 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 2021 Annual Report, which is also incorporated herein by reference. Changes in Internal Control over Financial Reporting. 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. Item 9B. OTHER INFORMATION None. Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 23 Table of Contents PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The information concerning directors and corporate governance required by this Item is incorporated herein by reference from the definitive proxy statement for our Annual Meeting of Stockholders to be held on April 28, 2022 (our “2022 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 required by this Item appears, in part, on the next page of this report, and is also incorporated by reference from our 2022 Proxy Statement. If applicable, information concerning any late filings under Section 16(a) of the Exchange Act is incorporated by reference from our annual proxy statement; no such information was applicable for the 2022 Proxy Statement. The information required by this Item concerning our Audit and Finance Committee is incorporated by reference from our 2022 Proxy Statement. 24 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS (1) Name and Position Age Executive Officer Since Former Positions within Past Five Years/ Officer Positions with Avery Dennison Mitchell R. Butier 50 March 2007 2016-2019 President and Chief Executive Officer Chairman, President and 2015-2016 President and Chief Operating Officer Chief Executive Officer 2014-2015 President, Chief Operating Officer and Chief Financial Officer 2010-2014 Senior Vice President and Chief Financial Officer 2007-2010 Vice President, Global Finance and Chief Accounting Officer Gregory S. Lovins 49 March 2017 2017 Vice President and Interim Chief Senior Vice President and Financial Officer Chief Financial Officer 2016-2017 Vice President and Treasurer 2011-2016 Vice President, Global Finance, Materials Group Deena Baker-Nel 51 September 2020 2018-2020 Vice President, Human Resources, Vice President and LGM Chief Human Resources Officer 2015-2018 Vice President, Human Resources, RBIS Lori J. Bondar 61 June 2010 2010-2020 Vice President, Controller and Chief Vice President, Controller, Accounting Officer Treasurer and 2008-2010 Vice President and Controller Chief Accounting Officer Nicholas Colisto 55 September 2020 2012-2018 Senior Vice President and Vice President and Chief Information Officer, Xylem Inc. Chief Information Officer Deon Stander 53 August 2016 2013-2015 Vice President and General Manager, Vice President and Global Commercial and Innovation, General Manager, RBIS RBIS 2010-2012 Vice President and General Manager, Global Commercial, RBIS Ignacio Walker 45 September 2020 2020 Vice President and Assistant General Vice President and Counsel, Americas Chief Legal Officer 2018-2019 Vice President and Assistant General Counsel 2013-2017 Vice President and Assistant General Counsel, RBIS (1) Executive officers are generally elected on the date of our annual stockholder meeting to serve a one-year term and until their successors are duly elected and qualified. 25 Table of Contents Item 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference from our 2022 Proxy Statement. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated by reference from our 2022 Proxy Statement. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item is incorporated by reference from our 2022 Proxy Statement. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item is incorporated by reference from our 2022 Proxy Statement. 26 Table of Contents PART IV Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) Financial Statements, Financial Statement Schedule and Exhibits (1) Financial statements filed as part of this report are listed on the accompanying Index to Financial Statements. (2) All financial statement schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto. (3) Exhibits filed as a part of this report are listed on the accompanying Exhibit Index. Each management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K is identified as such on the Exhibit Index. (b) The exhibits required to be filed by Item 601 of Regulation S-K are set forth on the accompanying Exhibit Index. 27 Table of Contents AVERY DENNISON CORPORATION INDEX TO FINANCIAL STATEMENTS Data incorporated by reference from the attached portions of the 2021 Annual Report to Shareholders of Avery Dennison Corporation: Consolidated Financial Statements: Consolidated Balance Sheets as of January 1, 2022 and January 2, 2021 Consolidated Statements of Income for 2021, 2020 and 2019 Consolidated Statements of Comprehensive Income for 2021, 2020 and 2019 Consolidated Statements of Shareholders’ Equity for 2021, 2020 and 2019 Consolidated Statements of Cash Flows for 2021, 2020 and 2019 Notes to Consolidated Financial Statements Statement of Management Responsibility for Financial Statements and Management’s Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) Except for the Consolidated Financial Statements and Notes thereto, 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 2021 Annual Report to Shareholders is not to be deemed “filed” as part of this report. 28 Table of Contents AVERY DENNISON CORPORATION EXHIBIT INDEX For the Year Ended January 1, 2022 Exhibit No. Exhibit Name Originally Filed as Exhibit No. Filing (1) 2.1 Agreement and Plan of Merger, dated as of July 27, 2021, by and among Registrant, CB Velocity Holdings, LLC, Lobo Merger Sub, LLC and Charlesbank Equity Fund VIII, Limited Partnership, as unitholder representative 2.1 Current Report on Form 8-K, filed July 30, 2021 3.1(i) Amended and Restated Certificate of Incorporation, as filed on April 28, 2011 with the Office of Delaware Secretary of State 3.1 Current Report on Form 8-K, filed April 29, 2011 3.1(ii) Amended and Restated Bylaws, effective as of December 7, 2017 3.1(ii) Current Report on Form 8-K, filed December 8, 2017 4.1 Indenture, dated as of March 15, 1991, between Registrant and Security Pacific National Bank, as Trustee (the “1991 Indenture”) 4.1 Registration Statement on Form S-3 (File No. 33-39491), filed March 19, 1991 4.2 First Supplemental Indenture, dated as of March 16, 1993, between Registrant and BankAmerica National Trust Company, as successor Trustee (the “Supplemental Indenture”) 4.4 Registration Statement on Form S-3 (File No. 33-59642), filed March 17, 1993 4.3 Officers’ Certificate establishing a series of Securities entitled “Medium-Term Notes, Series C” under the 1991 Indenture, as amended by the Supplemental Indenture 4.1 Current Report on Form 8-K, filed May 12, 1995 4.4 Indenture, dated as of July 3, 2001, between Registrant and Chase Manhattan Bank and Trust Company, National Association, as trustee (the “2001 Indenture”) 4.1 Registration Statement on Form S-3 (File No. 333-64558), filed July 3, 2001 4.5 Officers’ Certificate establishing Securities entitled “6.000% Notes due 2033” under the 2001 Indenture 4.2 Current Report on Form 8-K, filed January 16, 2003 4.6 6.000% Notes Due 2033 4.4 Current Report on Form 8-K, filed January 16, 2003 4.7 Indenture, dated as of November 20, 2007, between Registrant and Bank of New York 4.2 Current Report on Form 8-K, filed November 20, 2007 4.8 Third Supplemental Indenture, dated as of April 8, 2013, between Registrant and Bank of NY 4.2 Current Report on Form 8-K, filed April 8, 2013 4.9 Form of 3.35% Senior Notes due 2023 4.2 Current Report on Form 8-K, filed April 8, 2013 4.10 Fourth Supplemental Indenture, dated as of March 3, 2017, between Registrant and The Bank of New York Mellon Trust Company, N.A. (“BNY Mellon”) as Trustee (including Form of 1.250% Senior Notes due 2025 on Exhibit A thereto) 4.2 Current Report on Form 8-K, filed March 3, 2017 29 Table of Contents Exhibit No. Exhibit Name Originally Filed as Exhibit No. Filing (1) 4.11 Fifth Supplemental Indenture, dated as of December 6, 2018, between Registrant and BNY Mellon, as Trustee (including Form of 4.875% Senior Notes due 2028 on Exhibit A thereto) 4.2 Current Report on Form 8-K, filed December 6, 2018 4.12 Sixth Supplemental Indenture, dated as of March 11, 2020, between Registrant and BNY Mellon, as Trustee (including Form of 2.650% Senior Notes due 2030 on Exhibit A thereto) 4.2 Current Report on Form 8-K, filed March 11, 2020 4.13 Seventh Supplemental Indenture, dated as of August 18, 2021, between Registrant and BNY Mellon, as Trustee (including Form of 0.850% Senior Notes due 2024 on Exhibit A thereto) 4.2 Current Report on Form 8-K filed on August 18, 2021 4.14 Eighth Supplemental Indenture, dated as of August 18, 2021, between Registrant and BNY Mellon, as Trustee (including Form of 2.250% Senior Notes due 2032 on Exhibit A thereto) 4.3 Current Report on Form 8-K filed on August 18, 2021 4.15 Description of Securities 4.15 2020 Annual Report on Form 10-K, filed February 25, 2021 10.1 Fifth Amended and Restated Credit Agreement, dated as of February 13, 2020, by and among Registrant, Bank of America, N.A., as administrative agent and the lenders party thereto 10.1 Current Report on Form 8-K, filed February 14, 2020 10.2 First Amendment, dated August 9, 2021, to the Fifth Amended and Restated Credit Agreement, dated as of February 13,2020, by and among Registrant, the lenders party thereto, the agents party thereto and Bank of America, N.A., as administrative agent 10.1 Current Report on Form 8-K, filed August 12, 2021 10.3* Amended and Restated Supplemental Executive Retirement Plan (“SERP”) 10.11.1 Quarterly Report on Form 10-Q, filed August 12, 2009 10.4* Complete Restatement and Amendment of Executive Variable Deferred Compensation Plan (“EVDCP”) 10.16 1994 Annual Report on Form 10-K, filed March 30, 1995 10.5* Amendment No. 1 to EVDCP 10.16.1 1999 Annual Report on Form 10-K, filed March 30, 2000 10.6* Amended and Restated 2005 Directors Variable Deferred Compensation Plan 10.18.2 Quarterly Report on Form 10-Q, filed May 10, 2011 10.7* Amended and Restated Stock Option and Incentive Plan (“Equity Plan”) A 2012 Proxy Statement on Schedule 14A, filed March 9, 2012 10.8* First Amendment to Equity Plan 10.20 2014 Annual Report on Form 10-K, filed February 25, 2015 10.9* 2017 Incentive Award Plan (“2017 Plan”) B 2017 Proxy Statement on Schedule 14A, filed March 10, 2017 10.10* Amended and Restated Annual Incentive Plan 10.1 Quarterly Report on Form 10-Q, filed May 1, 2020 30 Table of Contents Exhibit No. Exhibit Name Originally Filed as Exhibit No. Filing (1) 10.11* Complete Restatement and Amendment of Executive Deferred Retirement Plan (“EDRP”) 10.28 1994 Annual Report on Form 10-K, filed March 30, 1995 10.12* Amendment No. 1 to EDRP 10.28.1 1999 Annual Report on Form 10-K, filed March 30, 2000 10.13* Amendment No. 2 to EDRP 10.28.2 2001 Annual Report on Form 10-K, filed March 4, 2002 10.14* 2005 Executive Variable Deferred Retirement Plan, amended and restated 10.1 Quarterly Report on Form 10-Q, filed May 7, 2013 10.15* Amended and Restated Key Executive Change of Control Severance Plan 10.4 Quarterly Report on Form 10-Q, filed May 1, 2020 10.16* Amended and Restated Executive Severance Plan 10.3 Quarterly Report on Form 10-Q, filed May 1, 2020 10.17* Form of Executive Severance Agreement 10.19 2020 Annual Report on Form 10-K, filed February 25, 2021 10.18* Amended and Restated Long-Term Incentive Unit Plan (“LTI Unit Plan”) 10.2 Quarterly Report on Form 10-Q, filed May 1, 2020 10.19* Form of Restricted Stock Unit Agreement under Equity Plan 10.38 2013 Annual Report on Form 10-K, filed February 26, 2014 10.20* Form of Performance Unit Agreement under Equity Plan 10.39 2013 Annual Report on Form 10-K, filed February 26, 2014 10.21* Form of Market-Leveraged Stock Unit Agreement under Equity Plan 10.40 2013 Annual Report on Form 10-K, filed February 26, 2014 10.22* Form of Long-Term Incentive Unit Agreement under LTI Unit Plan 10.41 2013 Annual Report on Form 10-K, filed February 26, 2014 10.23* Form of Director Restricted Stock Unit Agreement under 2017 Plan 10.2 Quarterly Report on Form 10-Q, filed August 1, 2017 10.24* Form of Employee Market-Leveraged Stock Unit Agreement under 2017 Plan 10.3 Quarterly Report on Form 10-Q, filed August 1, 2017 10.25* Form of Employee Performance Unit Agreement under 2017 Plan 10.4 Quarterly Report on Form 10-Q, filed August 1, 2017 10.26* Form of Employee Restricted Stock Unit Agreement under 2017 Plan 10.5 Quarterly Report on Form 10-Q, filed August 1, 2017 10.27* Form of Employee Non-Qualified Stock Option Agreement under 2017 Plan 10.6 Quarterly Report on Form 10-Q, filed August 1, 2017 10.28* Offer Letter to Mitchell R. Butier 10.2 Quarterly Report on Form 10-Q, filed May 3, 2016 10.29* Offer Letter to Gregory S. Lovins 10.1 Quarterly Report on Form 10-Q, filed August 1, 2017 13† Portions of Annual Report to Shareholders for fiscal year ended January 1, 2022 N/A N/A 31 Table of Contents Exhibit No. Exhibit Name Originally Filed as Exhibit No. Filing (1) 21† List of Subsidiaries N/A N/A 23† Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm N/A N/A 24† Power of Attorney (see Signatures – Power of Attorney) N/A N/A 31.1† Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 N/A N/A 31.2† Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 N/A N/A 32.1†† Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 N/A N/A 32.2†† Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 N/A N/A 101.INS††† Inline XBRL Instance Filing – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document N/A N/A 101.SCH††† Inline XBRL Extension Schema Filing N/A N/A 101.CAL††† Inline XBRL Extension Calculation Linkbase Filing N/A N/A 101.DEF††† Inline XBRL Extension Definition Linkbase Filing N/A N/A 101.LAB††† Inline XBRL Extension Label Linkbase Filing N/A N/A 101.PRE††† Inline XBRL Extension Presentation Linkbase Filing N/A N/A 104††† Inline XBRL for the cover page of this Annual Report on Form 10-K, included as part of the Exhibit 101 inline XBRL document set (1) Unless otherwise noted, the File Number for all filings is File No. 1-7685. * Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K pursuant to Item 15(b) of Form 10-K. † Filed herewith. †† This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the Exchange Act and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing. ††† Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, are deemed not filed for purposes of Section 18 of the Exchange Act and otherwise are not subject to liability under those sections. Item 16. FORM 10-K SUMMARY Not applicable. 32 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AVERY DENNISON CORPORATION By: /s/ Gregory S. Lovins Gregory S. Lovins Senior Vice President and Chief Financial Officer Dated: February 23, 2022 33 Table of Contents POWER OF ATTORNEY Each person whose signature appears below does hereby constitute and appoint Gregory S. Lovins and Ignacio J. Walker, and each of them, with full power of substitution, his or her true and lawful attorney-in-fact to act for him or her in any and all capacities, to sign this Annual Report on Form 10-K and any or all amendments or supplements thereto, and to file each of the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully, to all intents and purposes, as he or she could do in person, hereby ratifying and confirming all that said attorneys-in-fact or substitutes, or any of them, may lawfully do or cause to be done by virtue hereof. 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. Signature Title Date /s/ Mitchell R. Butier Mitchell R. Butier Chairman, President, and Chief Executive Officer February 23, 2022 /s/ Gregory S. Lovins Gregory S. Lovins Senior Vice President and Chief Financial Officer (Principal Financial Officer) February 23, 2022 /s/ Lori J. Bondar Lori J. Bondar Vice President, Controller, Treasurer and Chief Accounting Officer (Principal Accounting Officer) February 23, 2022 /s/ Bradley A. Alford Bradley A. Alford Director February 23, 2022 /s/ Anthony K. Anderson Anthony K. Anderson Director February 23, 2022 /s/ Mark J. Barrenechea Mark J. Barrenechea Director February 23, 2022 /s/ Ken C. Hicks Ken C. Hicks Director February 23, 2022 /s/ Andres A. Lopez Andres A. Lopez Director February 23, 2022 /s/ Patrick T. Siewert Patrick T. Siewert Director February 23, 2022 /s/ Julia A. Stewart Julia A. Stewart Director February 23, 2022 /s/ Martha N. Sullivan Martha N. Sullivan Director February 23, 2022 34