AVYAvery Dennison

Refer to your discussion of free cash flow and similarly in your earnings releases and 10- Q filings. Given that free cash flow is typically calculated as cash from operating activities as presented in the statement of cash flows under GAAP, less capital expenditures, please revise the title of these measures to something similar to ``Adjusted Free Cash Flow´´ to alert your investors that it has been adjusted from

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the measure typically referred to as ``Free Cash Flow.´´ Please refer to Question No. 102.07 of the Compliance & Disclosure Interpretations ("C&DIs") on Non-GAAP Financial Measures, updated December 13, 2022.

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Please expand your revenue recognition policy to discuss how and when revenue for your specific products within your two reportable segments is recognized. For example, disclose for which products and services revenue is recognized at a point in time and those that are recognized over time, including the input measures used in recognizing the revenue.

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Disclose when control of your products or services is transferred to the customer, along with the related performance obligations. Your current disclosure in the first paragraph is general in nature, and should be expanded or tailored to be specific to the nature of the products and services you provide. For example, we note your Materials Group segment manufactures and sells pressure-sensitive label materials and performance tapes products, brand graphics and reflective products, whereas your Solutions Group segment offers RFID solutions, branding and embellishment solutions, data management and identification solutions, etc. as disclosed in the Business section and also in Note 15. Please revise your disclosures accordingly. Refer to ASC 606-10-25-14 through 25-18 and ASC 606-10-50-12.

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In your letter to us dated July 20, 2015, you discussed contacts with Syria. Your disclosure states that you acquired the European business of Mactac in 2016. We located a news article reporting that Mactac Europe serves customers in regions including North Africa, a region that includes Sudan. Syria and Sudan are designated by the State Department as state sponsors of terrorism and are subject to U.S.

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economic sanctions and/or export controls. You do not provide disclosure about Syria or Sudan in your Form 10-K. Please describe to us the nature and extent of any past, current, and anticipated contacts with Syria and Sudan since your 2015 letter, including contacts with their governments, whether through subsidiaries, affiliates, distributors, resellers, or other direct or indirect arrangements. Please also discuss the materiality of any such contacts, in quantitative terms and in terms of qualitative factors that a reasonable investor would deem important in making an investment decision. Address the potential impact of the investor sentiment evidenced by divestment and similar initiatives that have been directed toward companies with operations associated with U.S.-designated state sponsors of terrorism.

Avery Dennison Corporation (the “Company”) acknowledges receipt of the March 27, 2018 comment letter (the “Comment Letter”) from the Office of Global Security Risk of the Securities and Exchange Commission to Gregory S. Lovins, the Company’s Senior Vice President and Chief Financial Officer. The Company requests a small extension of time to respond. The Company intends to file its response via EDGAR on or before Friday, May 4, 2018. Read in the reply ↗

In your letter to us dated September 30, 2011, you discussed contacts with Syria. As you are aware, Syria is designated by the State Department as a state sponsor of terrorism and is subject to U.S. economic sanctions and export controls.

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Please describe to us the nature and extent of your past, current, and anticipated contacts with Syria since your 2011 letter, if any, whether through subsidiaries, affiliates, distributors, resellers or other direct or indirect arrangements. You should describe any products, components, technologies or services you have provided to Syria, directly or indirectly, and any agreements, commercial arrangements, or other contacts with the Syrian government or entities it controls.

No reply letter found.

Please discuss the materiality of any contacts with Syria you describe in response to the comment above, and whether those contacts constitute a material investment risk for your security holders. You should address materiality in quantitative terms, including the approximate dollar amounts of any associated revenues, assets, and liabilities for the last three fiscal years and the subsequent interim period.

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Also, address materiality in terms of qualitative factors that a reasonable investor would deem important in making an investment decision, including the potential impact of corporate activities upon a company’s reputation and share value. As you know, various state and municipal governments, universities, and other investors have proposed or adopted divestment or similar initiatives regarding investment in companies that do business with U.S.- designated state sponsors of terrorism. You should address the potential impact of the investor sentiment evidenced by such actions directed toward companies that have operations associated with Syria.

No reply letter found.

We note that the adjustment to your income tax expense reconciliation captioned “tax contingencies and audit settlements” represented an 18.2% increase to the amount calculated based on domestic federal statutory tax rates for the fiscal year ended December 28, 2013.

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Please provide us with a description of the types of items typically represented by this adjustment and tell us about the amounts that make up the total for the current fiscal year. Refer to FASB ASC 740-10-50-12.

We note your response to comment 4 in our letter dated May 7, 2014. Please provide us with the following information with regard to your operating structure:

· Tell us about the factors you considered in identifying your Chief Executive Officer as your chief operating decision maker (“CODM”);

In consideration of ASC 280-10-50-5, our chief operating decision maker (CODM) determination was based on the operational and reporting protocols of the Company which reflect that our Chief Executive Officer, Dean Scarborough, has ultimate responsibility for allocating Company resources to our

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operating segments and assessing the performance of the segments and the Company as a whole. As part of his role in overseeing the Company’s direction, he establishes performance targets to advance the Company’s long-term strategy and increase stockholder value, allocates capital to the Company’s operating segments to achieve those targets, develops compensation programs to incent segment leaders to achieve those targets, and analyzes key performance metrics to track Company and segment progress.

· Provide a copy of your organization chart which identifies the positions, roles, or functions that report directly to your CODM;

The following senior officers of the Company report directly to our CODM:

- Donald Nolan, President, Materials Group (segment manager for the PSM segment responsible for executing the segment’s strategy and managing its day-to-day operations, including sales, marketing, supply chain, research and development, and innovation);

- Shawn Neville, President, RBIS (segment manager for the RBIS segment responsible for executing the segment’s strategy and managing its day-to-day operations, including sales, marketing, supply chain, research and development, and innovation);

- Howard Kelly, Vice President and General Manager, Vancive (segment manager for the Vancive segment responsible for executing the segment’s strategy and managing its day-to-day operations, including sales, marketing, supply chain, research and development, and innovation);

- Mitchell Butier, Senior Vice President & Chief Financial Officer (responsible for the Company’s finance functions, including financial reporting, investor relations, financial planning and analysis, tax and treasury);

- Richard Hoffman, Senior Vice President & Chief Information Officer (responsible for the Company’s information technology (IT) functions, including enterprise-wide IT strategy development, oversight of global IT application systems, and development of annual IT plan and budget);

- Anne Hill, Senior Vice President, Chief Human Resources & Communications Officer (responsible for the Company’s human resources and communications functions, including leadership and organization development, performance management programs, training, compensation and benefits, staffing, employee relations, affirmative action/diversity, and communications); and

- Susan Miller, Senior Vice President, General Counsel & Secretary (responsible for the Company’s legal function, including corporate policies, mergers, acquisitions and divestitures’ support, intellectual property, corporate governance, values and ethics, risk management and the corporate secretarial function).

Attached as Exhibit A is an organizational chart reflecting our CODM and his direct reports.

· Explain in greater detail the responsibilities of the segment managers identified in your prior response and tell us about the manner in which they typically interact with your CODM;

Our CODM establishes and monitors performance targets and incentive plan metrics for the Company and its operating segments. In addition to the segment managers’ responsibilities described in the previous section, each of the segment managers is accountable for establishing performance targets and allocating capital for the geographic locations and product lines within their respective operating segment, as well as setting incentive targets for the managers within the segment. At monthly team meetings our CODM holds with his direct reports (and on an ad hoc basis between meetings), our segment managers discuss segment operational issues with our CODM, including ad-hoc information below the segment level (i.e., geographic location or product line) to assist in his decision-making process with respect to resource allocation to the operating segments and give him background information to explain the drivers of segment performance.

· Describe the process through which your CODM reviews performance and makes decisions about the allocation of resources and provide us with a copy of the reports or information used in connection with these functions for the fiscal year ended December 28, 2013.

Process for Allocation of Resources

Our CODM’s decision-making process related to the allocation of resources includes the consideration of spending budgets for fixed capital and software; headcount and other operating expense-related investments driven primarily by the needs of the operating segments; funding of acquisitions; and uses of cash for dividends or share repurchases. This process begins with establishing long-term financial targets for the operating segments and the Company as a whole, which are aligned upon with the Board of Directors and communicated periodically to shareholders. The Company’s long-term financial targets are communicated publicly and include five-year targets for five financial metrics (organic sales growth; operating margin; adjusted earnings per share (EPS) growth; return on total capital (ROTC); and net debt-to-EBITDA) for the Company as a whole, as well as five-year targets for two financial metrics (organic sales growth and EBIT margin) for each operating segment. Our CODM neither sets nor communicates long-term financial targets at any level below the operating segment level.

The Company’s external targets become the basis for our CODM to establish internal targets for both short-term (annual) and long-term (three-year) management incentive compensation. The Company currently uses three-year cumulative economic value added (EVA) as its only long-term financial metric at the operating segment level for management incentive purposes. Embedded in this metric are assumptions related to capital expenditures and other investments that will be allocated to the segments based on the Company’s long-term strategic plan determined by our CODM.

Our CODM establishes annual operating plan (AOP) targets and annual incentive plan (AIP) targets in line with the long-term targets referenced above. Our CODM reviews and approves annual operating plans and incentive plan targets at the operating segment level only. Each of the three segment managers is responsible for further allocating the annual operating plan and incentive plan targets to geographic location and product line managers within their respective segments.

Process for Review of Performance

The method our CODM uses to regularly review the short-term performance of our segments is through analysis and discussion of key performance metrics and financial information. Our CODM receives a monthly flash report with a “CEO Summary” (a copy of the CEO Summary for the fiscal year ended December 28, 2013 is attached as Exhibit B) containing current period actual, forecast, plan and comparable prior year actual financial information for each of the three segments and the Company as a whole. Our CODM reviews the performance of each segment by comparing the segment’s current period results (net sales and EBIT) with AOP targets, the most recent quarterly forecast, and the prior year to assess how segment results impacted the Company’s overall results. Since the CEO Summary does not contain any commentary or other insights, our CODM has monthly team meetings and informal discussions with his direct reports to better understand the reasons for and sources of variances between results relative to the AOP, forecast and prior year.

In addition to his discussions with segment managers, our CODM receives, within the monthly flash report, a summary of additional financial information about operating segment performance that is used by our Chief Financial Officer, the “CFO Summary.” This report is not regularly reviewed by the CODM for allocating resources or assessing performance. In addition, the CODM has access and may periodically refer to information regularly reviewed by our segment managers and functional leaders to help him better understand variances and key drivers impacting results.

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It appears that the adjustment to your income tax expense reconciliation captioned “corporate owned life insurance” was described as “deferred compensation assets” in your prior year filings. Please describe the nature of this line item and tell us why a change in the caption used to describe it was deemed appropriate. Refer to FASB ASC 740-10-50-12.

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Please revise your disclosure of net operating losses and tax credit carryforwards on pages 57-58 of your annual report to state the amount that will expire each year if unused. Refer to FASB ASC 740-10-50-3.

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Disclosure in your filing states that certain operating segments are aggregated or combined based on materiality, quantitative factors, and similar qualitative economic characteristics. It appears that your pressure-sensitive materials segment includes both your label and packaging materials business and your graphics, reflective, and performance tapes business.

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Please provide us with an analysis supporting the aggregation of these businesses into a single operating segment pursuant to FASB ASC 280-10-50-11. With regard to the similarities in economic characteristics, please address the remarks attributed to your chief executive officer as part of the conference call to discuss your March 29, 2014 operating results indicating that your graphics, reflective, and performance tapes business has higher than average margins.

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We note your response to comment 4 in our letter dated May 7, 2014. Please provide us with the following information with regard to your operating structure:  Tell us about the factors you considered in identifying your Chief Executive Officer as your chief operating decision maker (“CODM”);  Provide a copy of your organization chart which identifies the positions, roles, or functions that report directly to your

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CODM;  Explain in greater detail the responsibilities of the segment managers identified in your prior response and tell us about the manner in which they typically interact with your CODM; and  Describe the process through which your CODM reviews performance and makes decisions about the allocation of resources and provide us with a copy of the reports or information used in connection with these functions for the fiscal year ended December 28, 2013.

We note your response to comment 1 in our letter dated July 15, 2014. It appears that the reports provided with your response include information regarding revenues from external customers by product. Please tell has how you considered the guidance per FASB ASC 280-10-50-40 and concluded that it is impracticable to provide this type of disclosure.

Division of Corporate Finance

Attn: Ethan Horowitz, Branch Chief

We acknowledge that certain of our internal reports include supplemental revenue information for certain product lines within one of our reportable segments as it provides some

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insight to our CFO. However – based on the guidance under ASC 280-10-50-40 and related illustrative disclosure under ASC 280-10-55-51 – because our segments are reported based on products and services, we believe that no additional disclosure regarding revenues by product or product group is required. Note that, consistent with ASC 280-10-50-41, we do disclose revenues by geographic area in Note 13, Segment Information, of our 2013 Annual Report on Form 10-K. In future filings, we will add clarifying language to indicate that we have determined our reportable segments based on the products and services we sell.

Our disclosure in Note 13 indicating that disclosure of revenues for each product is impracticable was based on the fact that, although our global reporting system is able to aggregate revenues for certain product groups, it does not capture revenues at the product level. However, as we believe no additional disclosure by product or product group is required, we will remove this disclosure in future filings to avoid confusion.

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We note your response to comment 1 in our comment letter dated July 15, 2014. It appears that the reports provided with your response include information regarding revenues from external customers by product. Please tell us how you considered the guidance per FASB ASC 280-10-50-40 and concluded that it is impracticable to provide this type of disclosure.

Your response to comment 1 in our letter dated October 7, 2014 states that additional disclosure regarding revenues by product or product group is not required because your segments are reported based on products and services. We do not believe that this position is consistent with the disclosure requirements per FASB ASC 280-10-50.

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Please revise to disclose revenues for each of your products and services or each group of similar products and services.

To clarify our October 7, 2014 response, our operating segments – Pressure-sensitive

Materials (“PSM”), Retail Branding and Information Solutions (“RBIS”), and Vancive Medical Technologies (“Vancive”) – are based on similar products and services. Although our CFO Summary includes some additional product revenue information due to our historical internal reporting structure, we had considered all products within these segments as similar, and believed that we had met the requirements of ASC 280-10-50-40 “to report the revenues from external customers for each product and service or each group of similar products and services.”

Nearly all of our products fall into one of two types – they are either (i) “base materials,” which we sell to companies to be “converted” into either a component or end product (for example, a roll of pressure-sensitive film, which we sell to a printer/converter that die-cuts and prints on the material to turn it into labels; this product is subsequently sold to an end user, such as a consumer products company) or (ii) “converted products” that start with a base material (for example, a roll of pressure-sensitive film or paper stock) that we die-cut, print, and/or otherwise modify for sale to an end user, such as a printed label sold to a garment manufacturer.

Our PSM operating segment consists entirely of “base materials,” which are all multi-layer laminates manufactured on high-speed coating equipment. While the layers differ from product to product (for example, type of face stock, adhesive, top coat), the basic manufacturing process is the same for all the products in this segment. Our PSM end products are rolls of pressure-sensitive paper, film, foil, or tape. For virtually all products except performance tapes, the end use for the eventual converted product is to communicate information (for example, a label on a shampoo bottle), branding (for example, graphic material on the side of a bus), or otherwise cover/decorate a surface (for example, colored film to wrap a vehicle). Reflective products represent a variation of a PSM base material used in graphic applications, with the minor distinguishing feature of enhanced reflectivity of the film “face stock” utilized (for example, reflective material on a stop sign). (Note: While the revenue information for this product line was separately presented in the CFO Summary in the past, this reflects legacy reporting when the business unit was larger, had a more diverse product line, and was managed separately; today, these products are similar to other products within our PSM segment. We are updating our CFO Summary to remove this line item, as it does not provide relevant information to senior management.)

In the case of performance tapes, while the manufacturing process and raw materials are similar to other products within the PSM segment, the end use differs in that these products primarily serve a bonding or fastening function, rather than an information sharing/branding purpose. In this respect, these products are more akin to the functional products which are part of Vancive, discussed below. Because of the similarities in raw materials, manufacturing process, distribution method, etc., and the fact that this division has reported directly to the leader of the PSM segment, we have viewed this as one of many similar products within this segment. However, given the unique functional nature of these products, we can see a case for treating this as a distinct product group for purposes of disclosing annual revenue per ASC 280-10-50-40, and will provide this supplemental revenue information in future Form 10-K filings, including appropriate comparative information for prior years, beginning with the Form 10-K for fiscal year 2014 (which we plan to file in February 2015).

Our RBIS operating segment consists entirely of “converted products,” along with related products and services, focused almost exclusively on apparel and footwear, with some general retail and supply chain applications. These converted products generally take the form of custom printed tickets, tags, labels, and packaging, in sharp contrast to the stock nature of the PSM business. To the extent that any products have a pressure-sensitive component (e.g., a label), this base material is typically sourced from our PSM segment. In contrast to the high-speed, roll-to-roll coating process that characterizes PSM manufacturing, the RBIS converting process uses relatively smaller-scale printers, looms (for the production of woven fabric labels), and other smaller-scale equipment.

Vancive is somewhat of a hybrid between a “base material” and “converted products” business. Some of the products in this segment are functional tapes not unlike those sold by the performance tapes business within PSM. However, most of the products include additional converting steps to create components sold primarily to medical device manufacturers (such as surgical, wound care, ostomy and securement products). What distinguishes these products as a group is that they all serve the medical industry, which carries unique manufacturing and control requirements (e.g., clean rooms, certifications, FDA approvals).

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Your response to comment 1 in our letter dated October 7, 2014 states that additional disclosure regarding revenues by product or product group is not required because your segments are reported based on products and services. We do not believe that this position is consistent with the disclosure requirements per FASB ASC 280-10-50.

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Please revise to disclose revenues for each of your products and services or each group of similar products and services.

Your response to comment 1 in our letter dated December 4, 2014 appears to primarily address the similarities in the manufacturing process for the product lines in your pressure sensitive materials segment. Please tell us whether you evaluated the similarities or dissimilarities of any other aspects or characteristics of these product lines in applying FASB ASC 280-10-50-40. If not, explain to us why not. Otherwise, describe for us the results of your evaluations. Read in the reply ↗

Your response also states that your global reporting system is able to aggregate revenues for “certain product groups.” Please describe these product groups to us and explain how they compare to the products identified on page 11 of Exhibit 13 to your Form 10-K.

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Separately, your response letters dated June 4, 2014 and August 15, 2014 make reference to “product lines.” Please tell us how your product lines differ from the product groups referred to in your response dated October 22, 2014.

Please provide us with a description of the similarities and differences in the economic characteristics of the product lines within your pressure sensitive materials segment. As part of your response, please provide us with information regarding the revenues and margins by product line for each of the last three fiscal years.

We considered the aggregation criteria in ASC 280-10-50-11 to determine whether the product lines in our pressure-sensitive materials segment can be grouped in our entity-wide disclosures.

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Although such guidance covers determinations regarding the aggregation of operating segments, we believe the factors contained in ASC 280-10-50-11 are also relevant to the analysis of our product lines.

Based on an assessment of these criteria taken as a whole, we concluded that our materials and reflective product lines in our pressure sensitive materials segment are similar while our performance tapes product line has certain characteristics that are sufficiently different from the other two product lines such that disclosure of annual revenues per ASC 280-10-50-11 is warranted. In particular, the major differentiating factors distinguishing the performance tapes product line from the materials and reflective product lines are (i) the dissimilar nature and use of performance tapes products, which are for bonding and fastening rather than conveying branding or other information, and (ii) their differing classes of customer (primarily original equipment manufacturers and disposable diaper producers rather than printers/converters).

Attached, as Exhibit A, is a chart summarizing our assessment of the similarities and differences among the product lines. This summary chart is intended to supplement our narrative discussion of certain of these similarities and differences contained in our December 18, 2014 response.

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Your response to comment 1 in our letter dated December 4, 2014 appears to primarily address the similarities in the manufacturing process for the product lines in your pressure sensitive materials segment. Please tell us whether you evaluated the similarities or dissimilarities of any other aspects or characteristics of these product lines in applying FASB ASC 280-10-50-40. If not, explain to us why not.

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Otherwise, describe for us the results of your evaluations.

No reply letter found.

Please provide us with a description of the similarities and differences in the economic characteristics of the product lines within your pressure sensitive materials segment. As part of your response, please provide us with information regarding the revenues and margins by product line for each of the last three fiscal years.

No reply letter found.