BASInvestmentConferenceHandout

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081308US

Investor Presentationand Supplemental Information

Forward-Looking StatementsCertain statements contained in this document are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such forward-looking 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 newmanufacturing 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); timelydevelopment 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.

This presentation includes references to the Company’s 2008 guidance, which was included in the Company’s second quarter earnings announcement as of July 22, 2008 and was current only as of that date. By including this previously provided guidance in this presentation, we are not affirming nor updating the previously released guidance, which was current only as of July 22, 2008. The Company undertakes no duty to update its forward-looking statements, including the earnings guidance.

Use of Non-GAAP Financial MeasuresThis 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 “Supplemental Materials” handout accompanying this presentation.

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> Sales trends somewhat mixed:– Organic sales growth improved sequentially for the PSM Segment; emerging

markets remain strong for materials businesses– Weakness in the U.S. retail environment continued to drive sales declines

(organic basis) for a number of businesses, including RIS and Office Products– European end market weakened for RIS

> Operating margin negatively impacted by raw material and energy inflation, pricing (carryover from prior year), and unfavorable segment/product mix

> Actions underway to weather the storm and position Company for economic rebound:

– Implementing additional price increases in Roll Materials and Office Products; new pricing actions taken in RIS

– Executing Paxar integration– Driving increased productivity across organization– Protecting investment in key growth programs (RFID, emerging markets, RIS,

other)– Projecting significant increase in free cash flow over the next few years

Actions underway to address challenging near-term business conditions

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2007 Proforma Revenue By Segment, with Annualized Paxar Sales(after intercompany eliminations)

Who we are… AVY by segment

2007 Net Sales (as reported) = $6.3 billion

Other Specialty Converting9%

Pressure-sensitiveMaterials52%

Retail InformationServices24%

Office and Consumer Products15%

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Who we are… AVY by region

2007 Proforma Revenue By Region, with Annualized Paxar Sales(before intergeographic eliminations)

* ”Other” includes Canada, Australia and South Africa

U.S.

Western Europe

EasternEurope

Asia

LatinAmerica

Other*

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Who we are.

> Global market share leader

How we win.

> Innovation

> Product breadth and quality

> Global footprint

> Regional scaleSales $3.5 bil.

Organic Sales Growth 2.8%

Operating Margin(1) 9.5%

Pressure-sensitive Materials (PSM)

(1) Excluding restructuring charges and other items –see Appendix, “Reconciliation of Non-GAAP Financial Measures to GAAP”

2007 FINANCIAL SNAPSHOT

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> Expand in faster-growing international markets by leveraging global and regional scale advantages

Roll Materials2007 revenues by geography, before intergeographic eliminations

PSM: How do we grow?

* ”Other” includes Canada, Australia and South Africa

U.S.

Western Europe

EasternEurope

Asia

LatinAmerica

Other*

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> Drive increased PS penetration of food and beverage segments (shift from glue-applied labels) through product innovation and marketing


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> Drive share gain in durable goods applications

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Optional photo extends to the 1-3/4” lineTransition to pressure-sensitive materials drives a better than

6% total applied cost advantage in labeling for breweries

Total Applied Cost Comparison

… while achieving:

> Premium brand image

> Design flexibility

> Functionality

> Ease of product changeover

Glue-Applied

Pressure-Sensitive

Cost down more than 6%...

Material Process Costs Tooling Other Costs

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Optional photo extends to the 1-3/4” linePressure-sensitive penetration of prime label (brand ID) segments

is still less than 25 percent in North America

Projected Market Growth('07 - '10 CAGR)

PS

Pen

etra

tion

North American Prime Label (Brand ID) Segments

Household

Food

Pharma Wine

Personal Care

BeerOther Beverage

Spirits

0%

20%

40%

60%

80%

0% 1% 2% 3% 4% 5% 6% 7% 8%

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• Drive growth in underpenetrated segments (food, beverage, household)

GrowthHow can we help you grow?

ProductivityHow can we help you become more cost effective?

InnovationHow can we help you look to the future?

• Lean and Six Sigma process improvement • Expanded service programs

• Continual product re-engineering• Specialty application development

Joint partnership with customers drives growth

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Graphics and Reflective… > $600 mil. business with solid growth drivers

> Emerging markets

> Wide-format digital printers

> Differentiation through innovation, quality, and service

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0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2005 2006 2007 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08

AVY PSM Segment BMS PS Segment UPM Label Materials Segment

Operating Margin* | AVY PSM Segment vs. Peers

* Excluding restructuring charges

Data for BMS and UPM taken from public filings and earnings releases

Sustainable competitive advantages drive superior profitability and returns vs. peers

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Optional photo extends to the 1-3/4” lineMajor 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

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(1) Excluding restructuring charges, integration transition costs, and other items –see Appendix, “Reconciliation of Non-GAAP Financial Measures to GAAP”

Retail Information Services (RIS)

Sales $1.2 bil.

Organic Sales Growth 0.5%



Who we are.

> Largest global supplier in retail tag, ticketing, brand and product identification

How we win.

> Global scale, local presence

> Comprehensive product range that offers global consistency

> Strong relationships with major retailers and brand owners

> Unparalleled ability to support, create and inspire

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Global Footprint

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Benefits of Paxar acquisition

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.)

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Optional photo extends to the 1-3/4” lineIntegration cost synergies create path to substantial

margin improvement over medium-term

* Excluding restructuring charges, integration transition costs, and other items –see Appendix, Reconciliation of Non-GAAP Financial Measures to GAAP”

IncrementalSynergies

IncrementalGoodwillAmortizationand Corp. Fee

Other Productivity,Net of Incremental Investments & Cost Inflation

(Incl. Paxar priorto acquisition)

Adjusted RIS Operating Margin*

6%

6% -1% 12% +

2007 Combined 2009/2010

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RIS growth through innovation

> Digital Printing Services

> Heat Transfer

> Packaging

> RFID Applications

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Office and Consumer Products (OCP)

(1) Excluding restructuring charges and other items –see Appendix, “Reconciliation of Non-GAAP Financial Measures to GAAP”

Sales $1.0 bil.

Organic Sales Change (6.6)%



Who we are.

> Global leader in key Printable Media categories (labels, index dividers)

How we win.

> Proprietary products

> Ubiquitous software templates and other consumer-use “enablers”

> Powerful consumer brand

> Preferred supplier

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OCP: Key Strategic Priorities

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

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Renovation example: Labels

Objective: Deliver consumer preferred, IP-protected, value-added product that drives sales growth

Strategy: Optimize products by application (addressing, return addressing, shipping and filing/identification)

ClearEasy Peel

WhiteEasy Peel

TrueBlockShipping and Filing

InternetShipping

Larger ReturnAddress

Q4 2005 Q4 2006 Q4 2008Q2 2006 Q4 2007 Q4 2009

RepositionableNext GenEasy Peel

Q4 2008

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Optional photo extends to the 1-3/4” lineELS continues to drive operational transformation

for Office Products North America

Reduction in supply chain costs

Improved service, quality, and safety record

Improved capital efficiency and ROTC

2008 est. vs. ’01/’02

39%

51%

Supply chain headcount

Direct labor costs

2.2 pts to 97.8%

85%

Service – line fill rate

Defects per million

Plant/DC square footage

Fixed assets

ROTC 12.6 pts.

35%

36%

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RFID

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-821

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Target: > 12% compound annual growth in adjusted EPS through 2010

What does it mean for investors?Long-term earnings growth…

Earnings Per Share, Fully Diluted

Projecting 5 year CAGR in adjusted EPS of ~ 7.8% through 2008

$2.67$2.78

$2.26

$3.72

$3.07

$2.64

$3.06

$3.45

$3.84$3.91

$3.35 to$3.55

$3.75 to $3.95

2003 2004 2005 2006 2007 2008 Guidance(provided on

7/22/08)

EPS - GAAP EPS - Adjusted(1)

(2)

(1) Excludes restructuring charges, gains on sale of assets, and other items – see “Supplemental Materials” handout for detail.

(2) Guidance not affirmed or updated.

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12.8%

16.0%

14.3%

13.0%12.7%

2003 2004 2005 2006 2007 2008 Guidance 2010 Target

~ 12.0%

15%

Adjusted Return on Total Capital(1)

Improvement in returns temporarily halted by acquisition effect…expect to resume progress in ‘09

What does it mean for investors? Improving returns…

(1) Excludes restructuring charges, gains on sale of assets, and other items – see “Supplemental Materials” handout for detail.


(2)

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$0.0~ $15Proceeds from sale of investments, net

$ 63.2---Share Repurchase

$ 64.3$55 to $60Payment for software and other deferred charges(1)

53.1%45% to 50%Total debt to total capital at year-end

$171.8~ $180Dividends

$244.6> $400Free Cash Flow(2)

$190.5 ~ $135Payment for capital expenditures(1)

$499.4$580 to $610Cash flow from operations

2007

2008 Guidance(provided on

7/22/08)(3)(Millions, except as noted)

What does it mean for investors? ~ 65% boost to free cash flow in 2008 (current FCF yield ~ 9%)

(1) Includes Paxar integration related expenditures(2) Net cash provided by operating activities (as reported), less purchase of property, plant,

equipment, software, and other deferred charges, plus proceeds from sale of investments, net(3) Guidance not affirmed or updated

Target: > 30% compound annual growth through 2010

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$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

'75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07

Div

iden

ds p

er s

hare

32 consecutive years of dividend increases through 200732 consecutive years of dividend increases through 2007

Current Dividend Yield ~ 3%

What does it mean for investors? Dividend increase…

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Wrap-up: 2008 Priorities

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 Company-wide to improve productivity and enhance product quality and customer service

5. Deliver significant increase in free cash flow

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Wrap-up: Medium-term Financial Targets

(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

> 30% CAGR through 2010Free Cash Flow (2)

15% by 2010ROTC (1)

> 12% CAGR through 2010Adjusted EPS (1)

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Appendix

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7/22/08)(2)

2008 Earnings and Free Cash Flow Guidance

Add Back:

Estimated Integration Transition Costs, Restructuring and Asset Impairment Charges(1) ~ $0.40

Adjusted (non-GAAP) Earnings Per Share $3.75 to $3.95

Capital Expenditures and Investments in Software (ex-integration) ~ $170 mil.

Free Cash Flow (before dividends) > $400 mil.

Cash Costs of Paxar Integration (before tax) ~ $ 65 mil.

Reported (GAAP) Earnings Per Share $3.35 to $3.55

(1) Subject to revision as plans are finalized(2) Guidance not affirmed or updated.

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Guidance for adjusted (non-GAAP) earnings per share (see Slide 35 for reconciliation to GAAP): $3.75 to $3.95 (from $4.00 to $4.30 previously)

> Reduction in expectations reflects $35 to $45 mil. increase in expected raw material inflation for the year compared to previous estimate, alongside weakening end market demand, and incrementally weaker segment mix

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 (~ 3.5% before cost-outs, or approx. $110 mil.)> General inflation and reinvestment of savings for growth

2008 Earnings Guidance (provided on 7/22/08)(1): Key Considerations


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> Reported revenue up nearly 12%, including approx. 5% benefit from currency, and 7% from acquisitions– Sales flat to down slightly on an

organic basis… incrementally higher sales benefit from pricing vs. April estimate

– Unfavorable segment mix vs. previous assumption (slower growth in higher variable margin businesses)

> Raw material cost inflation of approximately 3.5% (~ $110 mil.), partially offset with benefit from global sourcing strategies, material cost-outs, and price increases

> Operating margin ~ 8%> Unchanged from previous> Effective tax rate of 14% to 16%> Unchanged from previous

Current Assumptions Previous Assumptions> Reported revenue up 10% to 12%,

including approx. 5% benefit from currency, and 7% from acquisitions– Sales roughly flat on an organic

basis, with modest volume growth offset by negative price/mix

> Approx. 2.5% (~ $70 mil.)

> 8.5% to 9.0%> Interest expense of $115 to $120 mil.> 15% - 18%> Negligible change in shares

2008 Earnings Guidance (provided on 7/22/08)(1): Key Assumptions


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Net sales increased 20% over prior year; 1% decline in sales on an organic basis> Net effect of Paxar and DM Label acquisitions was approx. 14%

> Currency added 7% ($0.05 benefit to earnings per share)

Operating margin before restructuring and asset impairment charges and transition costs associated with the Paxar integration declined by 130 basis points vs. prior year> Decline reflects raw material and energy inflation, carryover of 2007 price

reductions in the roll materials business, and negative segment and product mix

> Headwinds also included 50 basis points of margin compression from addition of base Paxar business (margin of base business lower than Company-average before integration savings)

> Margin improvement expected over balance of year, as benefits from pricing and productivity actions are realized

Second Quarter 2008 Overview

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Effective tax rate for the quarter was 19%> Annual effective tax rate for 2008 expected to be in the 14%-16% range

> Ongoing annual tax rate expected to be in the 17%-19% range for the foreseeable future, subject to significant volatility from quarter to quarter

Reported E.P.S. of $0.93 includes $0.10 of restructuring charges, asset impairment, and transition costs for Paxar integration, net of gain on sale of investment> $0.05 of transition costs associated with Paxar integration

> $0.09 of restructuring and asset impairment charges

> $0.04 gain on sale of investment

Adjusted E.P.S. of $1.03

Second Quarter 2008 Overview (continued)

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PRESSURE-SENSITIVE MATERIALSReported sales of $980 mil., up 11% compared with prior year> Organic sales growth of approx. 3%, representing modest pick-up from Q1

paceChange in sales for roll materials business by region, adjusted for the effect of currency and intercompany sales:> Europe up at mid single digit rate> North America declined at low single digit rate> Asia growth in mid teens> South America up at low single digit rate

Graphics & Reflective business down low single digit rate before currency

Excluding restructuring charges and other items, operating margin declined 170 basis points vs. prior year to 8.2%, as the negative effects of raw material inflation and prior year price reductions more than offset the initial benefits of price increases, restructuring and other productivity initiatives> Incremental benefit of pricing actions expected to be realized in second half

of the year

Second Quarter 2008 Segment Overview

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RETAIL INFORMATION SERVICESReported sales of $438 mil., up 100% compared with prior year due to the Paxar and DM Label acquisitions> Organic sales decline of approx. 3%> Continued weakness of domestic retail apparel market; sales growth

trend for products destined for European market remained positive, but weakened considerably compared to pace delivered in last few quarters

Adjusting the prior year number to include pre-acquisition Paxar results (see Slide 44), operating margin before transition costs, restructuring, and other items declined 80 basis points to 7.0%, as integration savings (approx. $20 mil.) and other productivity actions were more than offset by the effects of:> Lower volume (reduced fixed cost leverage) > Employee-related, raw material and other cost inflation > Incremental intangible amortization (approx. $5 mil.) and higher corporate

cost allocation (approx. $4 mil.) associated with Paxar

Second Quarter 2008 Segment Overview (continued)

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> Targeting approximately $120 mil. of annual synergies when complete; roughly 85% of targeted synergies expected to be captured in Company’s run rate by year-end*

> Total synergies of approximately $21 mil. in Q2, up from $18 mil. in Q1> No change to anticipated cash costs of integration ($165 - $180 mil)

– $109 mil. of cash integration costs incurred since deal close

– Approximately $35 mil. in cash costs to be paid in second half of 2008

– Balance (approx. $30 mil.) to be paid in 2009/2010, over half of which relates to IT investment

Paxar Integration Update

* Approx. 15% of this synergy is captured outside of RIS, due to in-sourcing of materials (benefits PSM segment), and reduction in corporate expense

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OFFICE AND CONSUMER PRODUCTSReported sales of $255 mil., down 3% compared with prior year> Organic sales decline of approx. 6%, due to weak end market demand in

North America and delay in orders related to back-to-school seasonExcluding restructuring charges, operating margin improved by 110 basis points to 17.3%, as the benefit of restructuring and other productivity initiatives, as well as favorable product mix, more than offset inflation and reduced fixed cost leverage associated with lower sales

OTHER SPECIALTY CONVERTINGReported sales of $155 mil., down 4% compared with prior year> Organic sales decline of approx. 9%, or approx. 7% when adjusted for exit

of low margin distribution businessOperating margin declined by 90 basis points to 3.5%, as the benefit of productivity initiatives, as well as a reduction in the loss from RFID, was more than offset by reduced fixed cost leverage and cost inflation

Second Quarter 2008 Segment Overview (continued)

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($ in millions, except as noted) Q2-08 VarianceTotal RIS Paxar1 Total Fav (Unf)

Net Sales, as reported 438.2 219.4 207.5 426.9

Adjusted Non-GAAP Operating Income2 30.5 21.3 12.0 33.3

Adjusted Non-GAAP Operating Margin 2 7.0% 9.7% 5.8% 7.8% (80) b.p.

1) For the 11 weeks of 2nd quarter prior to acquisition close (values provided by Paxar upon close -- unaudited results)2) See Attachment A-4 to Exhibit 99.1

Q2-07

Second Quarter Margin Comparison Reconciliation for Effects of Paxar – RIS

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Reconciliation of Non-GAAP Financial Measures to GAAP

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($ in millions)

PressureSensitiveMaterials

RetailInformation

Services

Office andConsumerProducts

Other SpecialtyConverting Businesses

2006 GAAP Sales $3,236.3 $667.7 $1,072.0 $599.9Impact of 2007 Currency Changes $174.3 $16.7 $25.3 $15.62006 Adjusted Non-GAAP Sales $3,410.6 $684.4 $1,097.3 $615.5

2007 GAAP Sales $3,497.7 $1,174.5 $1,016.2 $619.4Est. 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%

Organic Sales Growth by Segment: 2007

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($ in millions, except as noted) FY 2005 FY 2006 FY 2007

Pressure Sensitive MaterialsNet Sales 3,114.5 3,236.3 3,497.7Operating income, as reported 264.1 301.6 318.7Operating margin, as reported 8.5% 9.3% 9.1%Non-GAAP adjustments:Restructuring costs, asset impairment charges, and other items 23.0 9.3 13.8 Adjusted non-GAAP operating income 287.1 310.9 332.5Adjusted non-GAAP operating margin 9.2% 9.6% 9.5%

Retail Information ServicesNet Sales 630.4 667.7 1,174.5Operating income, as reported 37.7 45.7 -4.0Operating margin, as reported 6.0% 6.8% -0.3%Non-GAAP adjustments:Transition costs, restructuring costs, asset impairment charges, and other items 7.5 11.2 74.2 Adjusted non-GAAP operating income 45.2 56.9 70.2Adjusted non-GAAP operating margin 7.2% 8.5% 6.0%

OPERATING MARGIN BY SEGMENT

Prior period reported numbers restated to conform with Q4-07 change in inventory accounting methodology and reclassification of units between segments.

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($ in millions, except as noted) FY 2005 FY 2006 FY 2007

Office and Consumer ProductsNet Sales 1,136.1 1,072.0 1,016.2Operating income, as reported 161.9 187.4 173.6Operating 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 183.7 185.1 178.4Adjusted non-GAAP operating margin 16.2% 17.3% 17.6%

Other Specialty Converting BusinessesNet Sales 592.5 599.9 619.4Operating income, as reported 14.9 17.3 25.4Operating margin, as reported 2.5% 2.9% 4.1%Non-GAAP adjustments:Restructuring costs and asset impairment charges 6.2 3.7 4.2 Adjusted non-GAAP operating income 21.1 21.0 29.6Adjusted 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 53.6 52.8 55.0Adj non-GAAP operating margin ex-RFID 9.1% 8.8% 9.0%

OPERATING MARGIN BY SEGMENT

Prior period reported numbers restated to conform with Q4-07 change in inventory accounting methodology and reclassification of units between segments.

Earnings Per Share(1), GAAP vs. Adjusted

(1) 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 subsequentlydivested or discontinued.

(2) Guidance not affirmed or updated

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2003 2004 2005 2006 2007


7/22/08)(2)

GAAP EPS 2.67 2.78 2.26 3.72 3.07 $3.35 to $3.55

Restructuring costs, asset impairment charges, and other items 0.22 0.27 0.40 0.27 0.49 ~ $0.25

Loss (income) from discontinued operations (0.25) 0.01 0.65 (0.15) - -

Tax Expense on Repatriated Earnings - - 0.14 - - -

Transition costs associated with the Paxar integration - - - - 0.35 ~ $0.15

Adjusted EPS 2.64 3.06 3.45 3.84 3.91 $3.75 to $3.95

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ROTC*, GAAP vs. Adjusted

* 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.

($ in millions, except as noted) FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

GAAPAverage Invested Capital (5 point average) 2,421.0 2,671.1 2,717.5 2,667.5 3,649.8Net Income 267.4 279.0 226.8 373.2 303.5

Addback: After-tax interest expense 42.4 44.0 46.0 45.7 85.1Return on Average Total Capital 12.8% 12.1% 10.0% 15.7% 10.6%

AdjustedAdj. Average Invested Capital (5 point average) 2,419.9 2,690.2 2,752.9 2,695.4 3,683.8Net Income 267.4 279.0 226.8 373.2 303.5

Addback: After-tax interest expense 42.4 44.0 46.0 45.7 85.1Addback: After-tax transition costs, restructuring costs, asset impairment charges, impact of discontinued ops, and other items -3.0 27.6 119.8 12.5 83.0

Adjusted Return on Average Total Capital 12.7% 13.0% 14.3% 16.0% 12.8%

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Economy & Finance

BASInvestmentConferenceHandout