Insert photo, graphic image or solid color block in this area. Avery Dennison

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1 guidelines and to far right edge of screen. Medium gray is the default. Every day. Everywhere. JPMorgan Insert photo, graphic image or solid color block in this area. Avery Dennison Extend frame to dotted lines above and below and to left and right edges. Go to View > Grids and Guides if you do not see the dotted guidelines in the background Supplemental Materials June 4, 2008

2 Forward-Looking Statements Certain information in this presentation may constitute forward-looking statements. These statements and financial or other business targets are subject to certain risks and uncertainties. Actual results and trends may differ materially from historical or expected results depending on a variety of factors, including but not limited to risks and uncertainties relating to investment in development activities and new production facilities; fluctuations in cost and availability of raw materials; ability of the Company to achieve and sustain targeted cost reductions, including synergies expected from the integration of the Paxar business in the time and at the cost anticipated; ability of the Company to generate sustained productivity improvement; successful integration of acquisitions; successful implementation of new manufacturing technologies and installation of manufacturing equipment; the financial condition and inventory strategies of customers; customer and supplier concentrations; changes in customer order patterns; loss of significant contract(s) or customer(s); timely development and market acceptance of new products; fluctuations in demand affecting sales to customers; impact of competitive products and pricing; selling prices; business mix shift; credit risks; ability of the Company to obtain adequate financing arrangements; fluctuations in interest rates; fluctuations in pension, insurance and employee benefit costs; impact of legal proceedings, including the Australian Competition and Consumer Commission investigation into industry competitive practices, and any related proceedings or lawsuits pertaining to this investigation or to the subject matter thereof or of the concluded investigations by the U.S. Department of Justice ( DOJ ), the European Commission, and the Canadian Department of Justice (including purported class actions seeking treble damages for alleged unlawful competitive practices, which were filed after the announcement of the DOJ investigation), as well as the impact of potential violations of the U.S. Foreign Corrupt Practices Act based on issues in China; changes in governmental regulations; changes in political conditions; fluctuations in foreign currency exchange rates and other risks associated with foreign operations; worldwide and local economic conditions; impact of epidemiological events on the economy and the Company s customers and suppliers; acts of war, terrorism, natural disasters; and other factors. The Company believes that the most significant risk factors that could affect its ability to achieve its stated financial expectations in the near-term include (1) the impact of economic conditions on underlying demand for the Company s products; (2) the degree to which higher raw material and energy-related costs can be passed on to customers through selling price increases, without a significant loss of volume; (3) the impact of competitors actions, including pricing, expansion in key markets, and product offerings; (4) potential adverse developments in legal proceedings and/or investigations regarding competitive activities, including possible fines, penalties, judgments or settlements; and (5) the ability of the Company to achieve and sustain targeted cost reductions, including expected synergies associated with the Paxar acquisition. Use of Non-GAAP Financial Measures This presentation contains certain non-gaap measures as defined by SEC rules. As required by these rules, we have provided a reconciliation of non-gaap measures to the most directly comparable GAAP measures, included in the Appendix section of this presentation.

3 Optional photo extends Challenging business conditions continued through Q1 actions underway to improve results > Slowdown in U.S. retail environment drove sales declines (organic basis) for both RIS and Office Products Office Products customers reduced inventories current levels approximately 15-20% lower than same time last year > Volume growth trend in roll materials improved vs. Q4, both in NA and Europe, but Graphics and Reflective declined > PSM margins negatively impacted by pricing, weaker product mix, and raw material inflation > Actions underway to weather the storm and position Company for economic rebound: Implementing price increases in Roll Materials (worldwide) and Office Products Executing Paxar integration Driving increased productivity across organization Protecting investment in key growth programs (RFID, emerging markets, RIS, other) Increasing focus on free cash flow trimming capital/it budgets and reducing working capital Remain committed to achieving original 2008 cash flow target 3

4 Who we are AVY by segment Optional photo extends 2007 Proforma Revenue By Segment, with Annualized Paxar Sales (after intercompany eliminations) Other Specialty Converting 9% Office and Consumer Products 15% Retail Information Services 24% Pressure-sensitive Materials 52% 2007 Net Sales (as reported) = $6.3 billion 4

5 Who we are AVY by region Optional photo extends 2007 Proforma Revenue By Region, with Annualized Paxar Sales (before intergeographic eliminations) Latin America Other* Asia U.S. Eastern Europe Western Europe 5 * Other includes Canada, Australia and South Africa

6 Optional photo extends Pressure-sensitive Materials (PSM) Who we are. > Global market share leader How we win. > Innovation > Product breadth and quality 2007 FINANCIAL SNAPSHOT Sales $3.5 bil. Organic Sales Growth 2.8% Operating Margin (1) 9.5% > Global footprint > Regional scale 6 (1) Excluding restructuring charges and other items see Appendix, Reconciliation of Non-GAAP Financial Measures to GAAP

7 PSM: How do we grow? Optional photo extends > Expand in faster-growing international markets by leveraging global and regional scale advantages Roll Materials 2007 revenues by geography, before intergeographic eliminations Asia Latin America Other* U.S. Eastern Europe Western Europe 7 * Other includes Canada, Australia and South Africa

8 PSM: How do we grow? Optional photo extends > Drive increased PS penetration of food and beverage segments (shift from glue-applied labels) through product innovation and marketing 8

9 PSM: How do we grow? Optional photo extends > Drive share gain in durable goods applications 9

10 Optional photo extends Transition to pressure-sensitive to the 1-3/4 materials line drives a better than 6% total applied cost advantage in labeling for breweries Total Applied Cost Comparison Glue- Applied Pressure- Sensitive Cost down more than 6%... while achieving: > Premium brand image > Design flexibility > Functionality > Ease of product changeover Material Process Costs Tooling Other Costs 10

11 Optional photo extends Pressure-sensitive penetration to the 1-3/4 of line prime label (brand ID) segments is still less than 25 percent in North America North American Prime Label (Brand ID) Segments 80% Pharma Wine PS Penetration 60% 40% 20% Personal Care Food Household Spirits 0% Beer Other Beverage 0% 1% 2% 3% 4% 5% 6% 7% 8% Projected Market Growth ('07 - '10 CAGR) 11

12 Optional photo extends Joint partnership with customers drives growth Growth How can we help you grow? Drive growth in underpenetrated segments (food, beverage, household) Productivity How can we help you become more cost effective? Lean and Six Sigma process improvement Expanded service programs Innovation How can we help you look to the future? Continual product re-engineering Specialty application development 12

13 Optional photo extends Graphics and Reflective > $600 mil. business with solid growth drivers > Emerging markets > Wide-format digital printers > Differentiation through innovation, quality, and service 13

14 Optional photo extends Sustainable competitive advantages drive superior profitability and returns vs. peers Operating Margin* AVY PSM Segment vs. Peers 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 AVY PSM Segment BMS PS Segment UPM Label Materials Segment 14 * Excluding restructuring charges

15 Optional photo extends Major initiatives underway to drive future productivity gains for PSM > Announced price increases > Product (materials) re-engineering > Raw materials strategic sourcing initiatives > Quakertown scale-up for films > Coater optimization and shut-downs > Enterprise Lean Sigma 15

16 Optional photo extends Retail Information Services (RIS) Who we are. > Largest global supplier in retail tag, ticketing, brand and product identification How we win. > Global scale, local presence 2007 FINANCIAL SNAPSHOT Sales $1.2 bil. Organic Sales Growth 0.5% Operating Margin (1) 6.0% > Comprehensive product range that offers global consistency > Strong relationships with major retailers and brand owners > Unparalleled ability to support, create and inspire 16 (1) Excluding restructuring charges, integration transition costs, and other items see Appendix, Reconciliation of Non-GAAP Financial Measures to GAAP

17 Global Footprint Optional photo extends 17

18 Benefits of Paxar acquisition Optional photo extends Enhanced the Company s top-line growth potential > More than doubled sales in segment with above-average growth potential > Combined complementary strengths > Improved ability to meet customer demands for product innovation, quality, and speed of service $115 to $125 mil. of cost synergies > Elimination of headquarters, costs of running public company (~ $25 mil.) > Front-end (e.g., sales, product development) redundancies (~ $15 mil.) > In-sourcing of supplies, procurement savings (~ $25 mil.) > Rationalization of production facilities and related overhead ($50 to $60 mil.) 18

19 Optional photo extends Integration update: actions taken or underway Restructuring actions approved to-date (~ $85 mil. of savings) Close former Paxar corporate headquarters Completed Consolidate sales force Integrate Korea, Singapore and Thailand Restructure Mexico, El Salvador and Dominican Republic Close Paxar manufacturing unit in Germany Transfer production lines to more cost-effective locations Other Completed Completed By Q2 08 End of 08 Q Q4 08 End of 08 Procurement / in-sourcing related projects (~ $25 mil. of savings): Absorb third party or Paxar in-house laminates into Roll Materials Division Execute procurement actions to leverage scale Q Q2 08 Q Q

20 Optional photo extends Integration cost synergies to create the 1-3/4 line path to substantial margin improvement over medium-term Adjusted RIS Operating Margin* 6% -1% 12% + 6% 2007 Combined Incremental Incremental Other Productivity, 2009/2010 Synergies Goodwill Net of Incremental (Incl. Paxar prior Amortization Investments & Cost to acquisition) and Corp. Fee Inflation 20 * Excluding restructuring charges, integration transition costs, and other items see Appendix, Reconciliation of Non-GAAP Financial Measures to GAAP

21 RIS growth through innovation Optional photo extends > Digital Printing Services > Heat Transfer > Packaging > RFID Applications 21

22 Optional photo extends Office and Consumer Products (OCP) Who we are. > Global leader in key Printable Media categories (labels, index dividers) How we win. > Proprietary products 2007 FINANCIAL SNAPSHOT Sales $1.0 bil. Organic Sales Change (6.6)% Operating Margin (1) 17.6% > Ubiquitous software templates and other consumer-use enablers > Powerful consumer brand > Preferred supplier 22 (1) Excluding restructuring charges and other items see Appendix, Reconciliation of Non-GAAP Financial Measures to GAAP

23 OCP: Key Strategic Priorities Optional photo extends Focus on core products, growth projects with rapid payback > Product renovation to maintain / grow share vs. private label offerings Maintain / expand margin and ROTC > Product mix improvement > Price increases to offset raw material inflation > Enterprise Lean Sigma > Capital investment substantially below D&A 23

24 Renovation example: Labels Optional photo extends Objective: Strategy: Deliver consumer preferred, IP-protected, value-added product that drives sales growth Optimize products by application (addressing, return addressing, shipping and filing/identification) Clear Easy Peel Internet Shipping White Easy Peel Larger Return Address TrueBlock Shipping and Filing Next Gen Easy Peel Repositionable Q Q Q Q Q Q Q

25 Optional photo extends ELS continues to drive operational transformation for Office Products North America Reduction in supply chain costs Supply chain headcount Direct labor costs 2008 est. vs. 01/ 02 39% 51% Improved service, quality, and safety record Service line fill rate Defects per million 2.2 pts to 97.8% 85% Improved capital efficiency and ROTC Plant/DC square footage Fixed assets ROTC 35% 36% 12.6 pts. 25

26 RFID Optional photo extends Carton and pallet tagging Item-level tagging apparel, airline baggage, pharmaceutical, etc. AD-220/AD-221 AD-420/AD-421 AD-612 AD-622 AD-812/AD-811 AD-820/AD

27 What does it mean for investors? Long-term earnings growth Optional photo extends Earnings Per Share, Fully Diluted $4.00 to $4.30 Projecting 5 year CAGR in adjusted EPS of 8.7% to 10.2% through 2008 $3.45 $3.72 $3.84 $3.91 $3.60 to $3.90 $3.06 $3.07 $2.67 $2.64 $2.78 $ Guidance (revised) EPS - GAAP EPS - Adjusted* Target: > 12% compound annual growth through * Excludes restructuring charges, gains on sale of assets, and other items see Appendix for detail.

28 What does it mean for investors? Improving returns Optional photo extends Adjusted Return on Total Capital* 14.3% 16.0% 15% 12.7% 13.0% 12.8% ~ 12.0% Guidance 2010 Target Improvement in returns temporarily halted by acquisition effect expect to resume progress in * Excludes restructuring charges, gains on sale of assets, and other items see Appendix for detail.

29 What does it mean for investors? Increase in free cash flow Optional photo extends (Millions, except as noted) 2008 Guidance (revised) 2007 Cash flow from operations $600 to $640 $499.4 Payment for capital expenditures (1) $135 to $140 $190.5 Payment for software and other deferred charges (2) $55 to $60 $ 64.3 Free Cash Flow (3) $400 to $450 $244.6 Dividends ~ $180 $171.8 Share Repurchase --- $ 63.2 Total debt to total capital at year-end 45% to 50% 53.1% Free cash flow up ~ 75% in 2008; current FCF Yield ~ 9% 29 (1) 2008 Guidance includes $5 - $10 mil. in capital investments related to Paxar integration (2) 2008 Guidance includes $15 - $20 mil. in software investments related to Paxar integration (3) Cash flow from operations less payment for capital expenditures, software and other deferred charges

30 What does it mean for investors? Dividend increase Optional photo extends 32 consecutive years of dividend increase $1.80 $1.60 $1.40 $1.20 Dividends per share $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 Current Dividend Yield ~ 3% 30

31 Wrap-up: 2008 Priorities Optional photo extends 1. Capture Paxar integration synergies deliver on RIS growth commitment 2. Improve trajectory of PSM business: > Continued growth in emerging markets > Investment in new application growth > Accelerated productivity improvement > Price increases to offset raw material inflation 3. Continue to renovate core Office Products; manage for margin/cash flow 4. Accelerate Enterprise Lean Sigma efforts Companywide to improve productivity and enhance product quality and customer service 5. Deliver significant increase in free cash flow 31

32 Optional photo extends Wrap-up: Medium-term Financial Targets Adjusted EPS (1) > 12% CAGR through 2010 ROTC (1) 15% by 2010 Free Cash Flow (2) > 30% CAGR through (1) Excluding restructuring charges, gains on sale of assets, and other items (2) Cash flow from operations less payment for capital expenditures, software and other deferred charges

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34 Optional photo extends Appendix 34

35 Optional photo extends 2008 Earnings and Free Cash Flow Guidance 2008 Guidance (revised) Reported (GAAP) Earnings Per Share $3.60 to $3.90 Add Back: Estimated Integration Transition Costs, Restructuring and Asset Impairment Charges* ~ $0.40 Adjusted (non-gaap) Earnings Per Share $4.00 to $4.30 Capital Expenditures and Investments in Software (ex-integration) Cash Costs of Paxar Integration (before tax) ~ $170 mil. ~ $ 65 mil. Free Cash Flow (before dividends) $400 to $450 mil. 35 * Subject to revision as plans are finalized

36 Optional photo extends 2008 Earnings Guidance (revised): Key Considerations Guidance for adjusted (non-gaap) earnings per share: $4.00 to $4.30 (from $4.15 to $4.55 previously) > Performance within range is highly dependent on organic growth and product mix > Midpoint of range assumes no meaningful change in macro-economic environment over the balance of the year Positive factors contributing to our outlook: > Incremental cost synergies from Paxar integration ($60 to $70 mil.) > Restructuring actions already announced ($25 to $30 mil. incremental to 2007) > Other restructuring and ongoing productivity initiatives > Price increases to partially offset raw material inflation > Reduced loss from building RFID business ($10 mil.) > Currency translation benefit of approx. 5% to top-line (E.P.S. benefit of ~ $0.16) > Lower tax rate Offsetting factors vs. 2007: > Higher interest ($10 to $15 mil.) and equity-based comp expense (~ $10 mil.) > Raw material inflation (~2.5% before cost-outs, or approx. $70 mil.) > General inflation and reinvestment of savings for growth 36

37 Optional photo extends 2008 Earnings Guidance (revised): Key Assumptions Current Assumptions > Reported revenue up 10% to 12%, including approximately 5% benefit from currency, and 7% from acquisitions Sales roughly flat on an organic basis, with modest volume growth offset by negative price/mix > Raw material cost inflation of approximately 2.5% (~ $70 mil.), offset with benefit from global sourcing strategies, material cost-outs, and price increases > Operating margin of 8.5% to 9.0% > Interest expense of $115 to $120 mil. > Effective tax rate of 15% to 18% (approx. 20% effective quarterly tax rate in Q2-Q4) > Negligible change in shares outstanding Previous Assumptions > Reported revenue up 9.5% to 12.5%, including 2% to 3% from currency and 6.5% from acquisitions Sales up 1% to 3% on an organic basis > Approx. 2% ($50-$55 mil.) > 9% to 10% > $125 to $135 mil. > 18% - 20% > Negligible change 37

38 First Quarter 2008 Overview Optional photo extends Net sales increased 18.4% over prior year > Net effect of Paxar acquisition was approx. 14% > Currency added 6% ($0.05 benefit to earnings per share) > Sales declined approximately 2% on an organic basis Operating margin before restructuring and asset impairment charges and transition costs associated with the Paxar integration declined by 200 basis points vs. prior year > Decline reflects carryover of 2007 price reductions in the roll materials business, raw material inflation, negative segment and product mix, as well as reduced fixed cost leverage > Headwinds also included 50 basis points of margin compression from addition of base Paxar business (margin of base business is lower than Company-average before integration savings) 38

39 Optional photo extends First Quarter 2008 Overview (continued) Annual effective tax rate for 2008 expected to be in the 15%-18% range (down from 18%-20% originally) > Ongoing annual tax rate now expected to be in the 17%-19% range for the foreseeable future (down from 18%-20% previously), subject to significant volatility from quarter to quarter > Effective tax rate for the quarter was negative (12.3%), primarily due to recognition of $21 million tax benefit from increased ability to realize deferred tax assets Reported E.P.S. of $0.69 includes $0.11 of restructuring charges, asset impairment, and transition costs for Paxar integration > $0.06 of transition costs associated with Paxar integration > $0.05 of restructuring and asset impairment charges Adjusted E.P.S. of $

40 Optional photo extends First Quarter 2008 Segment Overview PRESSURE-SENSITIVE MATERIALS Reported sales of $920 mil., up 7% compared with prior year > Organic sales growth of approx. 1%, slower than Q4 pace Change in sales for roll materials business by region, adjusted for the effect of currency and intercompany sales: > Europe up at low single digit rate (improved vs. Q4 pace) > North America declined at low single digit rate (similar to 2H-07) > Asia growth in mid-teens > South America roughly comparable to prior year Graphics & Reflective business down mid-single-digit rate before currency Excluding restructuring and asset impairment charges, operating margin declined 170 basis points vs. prior year to 8.0%, as the negative effects of pricing and raw material inflation more than offset benefits from restructuring and other productivity initiatives 40

41 Optional photo extends First Quarter 2008 Segment Overview (continued) RETAIL INFORMATION SERVICES Reported sales of $372 mil., up 138% compared with prior year due to the Paxar acquisition > Organic sales decline of approx. 1% > Continued weakness of domestic retail apparel market; sales on products destined for European market remained solid Operating margin before transition costs and restructuring charges declined 330 basis points to 1.0%, as integration synergies (approx. $17 mil.) and other productivity actions were more than offset by the effects of: > Employee-related / raw material cost inflation > Reduced fixed cost leverage > Negative price/mix > Intangible amortization (approx. $6 mil.) and higher corporate cost allocation (approx. $4 mil.) associated with Paxar 41

42 Paxar Integration Update Optional photo extends > Targeting up to $125 mil. of annual synergy savings when complete > Realized approx. $17 mil. of savings in Q1, up from $11 mil. in Q4 > Over 75% of targeted savings expected to be captured in run rate by year-end > No change to anticipated cash costs of integration ($165 - $180 mil) > Last piece of permanent financing completed in February 42

43 Optional photo extends First Quarter 2008 Segment Overview (continued) OFFICE AND CONSUMER PRODUCTS Reported sales of $194 mil., down 9% compared with prior year > Organic sales decline of approx. 12%, due in part to customer inventory reductions ($12 mil. estimated impact to net sales) Excluding restructuring charges, operating margin declined 150 basis points to 11.1%, as the benefit of restructuring and other productivity initiatives was more than offset by reduced fixed cost leverage OTHER SPECIALTY CONVERTING Reported sales of $159 mil., comparable to prior year > Organic sales decline of approx. 4%, or roughly comparable to prior year when adjusted for exit of low margin distribution business Excluding restructuring charges, operating margin declined 130 basis points to 5.8%, as the benefit of restructuring and other productivity initiatives as well as a reduction in the loss from RFID was more than offset by reduced fixed cost leverage and cost inflation 43

44 Optional photo extends Reconciliation of Non-GAAP Financial Measures to GAAP 44

45 Organic Sales Growth by Segment: 2007 ($ in millions) Pressure Sensitive Materials Retail Information Services Office and Consumer Products Other Specialty Converting Businesses 2006 GAAP Sales $3,236.3 $667.7 $1,072.0 $599.9 Impact of 2007 Currency Changes $174.3 $16.7 $25.3 $ Adjusted Non-GAAP Sales $3,410.6 $684.4 $1,097.3 $ GAAP Sales $3,497.7 $1,174.5 $1,016.2 $619.4 Est. Impact of Acq.& Divestitures ($7.8) $486.6 ($9.2) ($1.4) 2006 Adjusted Non-GAAP Sales $3,505.5 $687.9 $1,025.4 $620.8 GAAP Sales Growth 8.1% 75.9% -5.2% 3.3% Organic Sales Growth 2.8% 0.5% -6.6% 0.9% 45

46 OPERATING MARGIN BY SEGMENT ($ in millions, except as noted) FY 2005 FY 2006 FY 2007 Pressure Sensitive Materials Net Sales 3, , ,497.7 Operating income, as reported Operating margin, as reported 8.5% 9.3% 9.1% Non-GAAP adjustments: Restructuring costs, asset impairment charges, and other items Adjusted non-gaap operating income Adjusted non-gaap operating margin 9.2% 9.6% 9.5% Retail Information Services Net Sales ,174.5 Operating income, as reported Operating margin, as reported 6.0% 6.8% -0.3% Non-GAAP adjustments: Transition costs, restructuring costs, asset impairment charges, and other items Adjusted non-gaap operating income Adjusted non-gaap operating margin 7.2% 8.5% 6.0% Prior period reported numbers restated to conform with Q4-07 change in inventory accounting methodology and reclassification of units between segments. 46

47 OPERATING MARGIN BY SEGMENT ($ in millions, except as noted) FY 2005 FY 2006 FY 2007 Office and Consumer Products Net Sales 1, , ,016.2 Operating income, as reported Operating margin, as reported 14.3% 17.5% 17.1% Non-GAAP adjustments: Restructuring costs, asset impairment charges, and other items 21.8 (2.3) 4.8 Adjusted non-gaap operating income Adjusted non-gaap operating margin 16.2% 17.3% 17.6% Other Specialty Converting Businesses Net Sales Operating income, as reported Operating margin, as reported 2.5% 2.9% 4.1% Non-GAAP adjustments: Restructuring costs and asset impairment charges Adjusted non-gaap operating income Adjusted non-gaap operating margin 3.6% 3.5% 4.8% EBIT Impact of RFID (32.5) (31.8) (25.4) Adj non-gaap operating income ex-rfid Adj non-gaap operating margin ex-rfid 9.1% 8.8% 9.0% Prior period reported numbers restated to conform with Q4-07 change in inventory accounting methodology and reclassification of units between segments. 47

48 Earnings Per Share*, GAAP vs. Adjusted Guidance (revised) GAAP EPS $3.60 to $3.90 Restructuring costs, asset impairment charges, and other items Loss (income) from discontinued operations ~ $0.25 (0.25) (0.15) - - Tax Expense on Repatriated Earnings Transition costs associated with the Paxar integration ~ $0.15 Adjusted EPS $4.00 to $4.30 * Prior period reported numbers restated to conform with Q4-07 change in inventory accounting methodology. Historical figures have NOT been adjusted to remove the contribution from businesses subsequently divested or discontinued. 48

49 ROTC*, GAAP vs. Adjusted ($ in millions, except as noted) FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 GAAP Average Invested Capital (5 point average) 2, , , , ,649.8 Net Income Addback: After-tax interest expense Return on Average Total Capital 12.8% 12.1% 10.0% 15.7% 10.6% Adjusted Adj. Average Invested Capital (5 point average) 2, , , , ,683.8 Net Income Addback: After-tax interest expense Addback: After-tax transition costs, restructuring costs, asset impairment charges, impact of discontinued ops, and other items Adjusted Return on Average Total Capital 12.7% 13.0% 14.3% 16.0% 12.8% * Prior period reported numbers restated to conform with Q4-07 change in inventory accounting methodology. Historical figures have NOT been adjusted to remove the contribution from businesses subsequently divested or discontinued. 49