NOTE 16. SUPPLEMENTAL FINANCIAL INFORMATION

Inventories

Net inventories at year-end were as follows:

(In millions)	2017		2016

Raw materials	$	214.6	$	185.0
Work-in-progress		179.8		156.8
Finished goods		215.2		177.3

Inventories, net	$	609.6	$	519.1

Property, Plant and Equipment

Major classes of property, plant and equipment, stated at cost, at year-end were as follows:

(In millions)	2017			2016

Land	$	31.1		$	29.3
Buildings and improvements		638.9			565.3
Machinery and equipment		2,188.2			1,949.5
Construction-in-progress		142.7			117.3

Property, plant and equipment		3,000.9			2,661.4
Accumulated depreciation		(1,903.0	)		(1,746.2	)

Property, plant and equipment, net	$	1,097.9		$	915.2

Software

Capitalized software costs at year-end were as follows:

(In millions)	2017			2016

Cost	$	428.9		$	415.5
Accumulated amortization		(301.8	)		(297.9	)

Software, net	$	127.1		$	117.6

Software amortization expense from continuing operations was $29.3 million in 2017, $37.9 million in 2016, and $37.6 million in 2015.

Equity Method Investment

In October 2016, we acquired a 22.6% interest in PragmatIC Printing Limited ("PragmatIC"), a company that develops flexible electronics technology. PragmatIC's primary assets are intangible assets related to its technology. We used the equity method to account for this investment. The carrying values of this investment were $9.1 million and $9.5 million as of December 30, 2017 and December 31, 2016, respectively, and were included in "Other assets" in the Consolidated Balance Sheets.

Research and Development

Research and development expense from continuing operations, which is included in "Marketing, general and administrative expense" in the Consolidated Statements of Income, was as follows:

(In millions)	2017		2016		2015

Research and development expense	$	93.4	$	89.7	$	91.9

Supplemental Cash Flow Information

Cash paid for interest and income taxes, including amounts paid for discontinued operations, were as follows:

(In millions)	2017		2016		2015

Interest, net of capitalized amounts	$	57.7	$	58.9	$	60.1
Income taxes, net of refunds		125.6		106.1		129.9

Foreign Currency Effects

Gains and losses resulting from foreign currency transactions are included in income in the period incurred. Transactions in foreign currencies (including receivables, payables and loans denominated in currencies other than the functional currency), including hedging impacts, decreased net income by $4.1 million, $1.6 million, and $6.1 million in 2017, 2016, and 2015, respectively.

We had no operations in hyperinflationary economies in fiscal years 2017, 2016, or 2015.

Discontinued Operations

Loss from discontinued operations, net of tax, for 2015 included tax expense related to the completion of certain tax returns related to the sale of our former OCP and DES businesses. We continue to be subject to certain indemnification obligations under the terms of the purchase agreement.

Sale of Product Line

In May 2015, we sold certain assets and transferred certain liabilities associated with a product line in our RBIS reportable segment for $1.5 million. The pre-tax loss from the sale, when combined with exit costs related to the sale, totaled $8.5 million. The exit costs included $3.4 million of severance costs. In the first quarter of 2015, we recorded an impairment charge of approximately $2 million related to certain long-lived assets in this product line. This loss and these costs were included in "Other expense, net" in the Consolidated Statements of Income.