Pension and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2012

Pension and Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Note 6. Pension and Other Postretirement Benefits

Defined Benefit Plans

The Company sponsors a number of defined benefit plans covering eligible U.S. employees and employees in certain other countries. The Company is also obligated to pay unfunded termination indemnity benefits to certain employees outside of the U.S., which are subject to applicable agreements, local laws and regulations. The Company has not incurred significant costs related to performance under termination indemnity arrangements and therefore their associated costs are not included in the disclosures below.

The following table sets forth the components of net periodic benefit cost, recorded in income from continuing operations, for the Company’s defined benefit plans:

	Pension Benefits
	Three Months Ended												Six Months Ended
	June 30, 2012						July 2, 2011						June 30, 2012						July 2, 2011
(In millions)	U.S.			Int’l			U.S.			Int’l			U.S.			Int’l			U.S.			Int’l
Service cost		$      .1			$   2.3			$       –			$   3.0			$      .2			$   4.6			$     .1			$   5.8
Interest cost		9.7			6.2			10.1			6.8			19.4			12.3			20.1			13.4
Expected return on plan assets		(11.5	)		(5.6	)		(11.3	)		(6.3	)		(23.0	)		(11.1	)		(22.6	)		(12.4	)
Recognized net actuarial loss		3.5			.9			2.1			1.0			6.9			1.7			4.0			2.0
Amortization of prior service cost		.1			.1			.1			.1			.2			.2			.2			.2
Amortization of transition asset		–			(.2	)		–			(.2	)		–			(.3	)		–			(.3	)
Net periodic benefit cost		$    1.9			$   3.7			$    1.0			$   4.4			$    3.7			$   7.4			$   1.8			$   8.7

	U.S. Postretirement Health Benefits
	Three Months Ended						Six Months Ended
(In millions)	June 30, 2012			July 2, 2011			June 30, 2012			July 2, 2011
Service cost		$    –			$   .5			$      –			$    .9
Interest cost		.1			.5			.2			1.0
Recognized net actuarial loss		.6			.4			1.2			.9
Amortization of prior service cost (credit)		(1.2	)		(.5	)		(2.4	)		(1.0	)
Net periodic benefit cost (credit)		$  (.5	)		$   .9			$  (1.0	)		$  1.8

The Company makes contributions to these plans that are sufficient to meet the minimum funding requirements of applicable laws and regulations, plus additional amounts, if any, that management determines to be appropriate. The Company contributed $26.9 million and $26.8 million to its U.S. pension plans during the six months ended June 30, 2012 and July 2, 2011, respectively. The Company contributed $1.4 million and $.9 million to its U.S. postretirement health benefit plan during the six months ended June 30, 2012 and July 2, 2011, respectively. The Company contributed approximately $10 million to its international pension plans during both the six months ended June 30, 2012 and July 2, 2011. All of these contributions were made to meet minimum funding requirements.

Defined Contribution Plans

The Company sponsors various defined contribution plans worldwide, with the largest plan being the Avery Dennison Corporation Savings Plan (“Savings Plan”), a 401(k) plan covering its U.S. employees. The Company recognized expense from continuing operations of $6.5 million and $13.4 million during the three and six months ended June 30, 2012 and $5.3 million and $13.4 million during the three and six months ended July 2, 2011, respectively, related to its contributions and match of participant contributions to the Savings Plan. Prior to the termination of the Company’s Employee Stock Benefit Trust (“ESBT”) on July 21, 2011, these contributions were funded using shares of the Company’s common stock held in the ESBT. Subsequent to the termination of the ESBT, these contributions have been funded using shares of the Company’s common stock held in treasury.