Bank of America 37 th Annual Investment Conference September 17, 2007 1 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 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, and a purported class action related to alleged disclosure and fiduciary duty violations pertaining to 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 impact of competitors’ actions, including expansion in key markets, product offerings and pricing; (3) the degree to which higher raw material and energy-related costs can be passed on to customers through selling price increases (and previously implemented selling price increases can be sustained), without a significant loss of volume; (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. Bank of America 37 th Annual Investment Conference Dan O’Bryant EVP and Chief Financial Officer Monday, September 17, 2007
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Bank of America 37th Annual Investment ConferenceSeptember 17, 2007
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Forward-Looking StatementsCertain 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 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, and a purported class action related to alleged disclosure and fiduciary duty violations pertaining to 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 impact of competitors’ actions, including expansion in key markets, product offerings and pricing; (3) the degree to which higher raw material and energy-related costs can be passed on to customers through selling price increases (and previously implemented selling price increases can be sustained), without a significant loss of volume; (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 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 Appendix section of this presentation.
Bank of America 37th Annual Investment Conference
Dan O’BryantEVP and Chief Financial Officer Monday, September 17, 2007
Bank of America 37th Annual Investment ConferenceSeptember 17, 2007
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Catalysts for value creation
1. Paxar integration will drive significant earnings accretion and free cash flow over the medium term
2. Annual P&L hit from RFID investment will decline
3. Notwithstanding challenging near-term market conditions, fundamentals of core businesses are strong
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Other Specialty Converting
Pressure-sensitive Materials
RetailInformation Services
Office and Consumer Products
Office and Consumer Products
Retail Information
Services
Pressure-sensitive Materials
Other Specialty Converting
2006 Net Sales = $5.6 billion
Overview of Today’s Portfolio
Revenue by Segment(after intercompany eliminations)
2006 Actual Proforma, With Paxar
2006 Net Sales = $6.4 billion
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2006 Revenue by Region(before intergeographic eliminations)
Eastern Europe
Western Europe
Latin America
Other*
Asia
U.S.
Overview of Today’s Portfolio
* “Other” includes Canada, Australia, and South Africa
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$3.2 B2006 Sales
Adj. Organic Sales Growth(1)
2006 2005Operating Margin(2)
+ 3.1% 9.6% 9.0%(1) Excluding currency, acquisitions, and divestitures – see Appendix for detail(2) Excluding restructuring charges and other items – see Appendix for detail
Snapshot of Pressure-sensitive Materials
2006 2005 2004
8.6%+ 3.6% + 9.6%
2004
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PSM Strategy and Outlook
• Leverage global and regional scale advantages; backward integration in films and adhesives
• Expand in faster-growing international markets
U.S.Asia
Other*Latin America
Western Europe
Eastern Europe
Roll Materials Group
2007 estimated revenues by geography, before intergeographiceliminations
* “Other” includes Canada, Australia, and South Africa
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PSM Strategy and Outlook (continued)
• Leverage global and regional scale advantages; backward integration in films and adhesives
• Expand in faster-growing international markets
• Drive increased PS penetration of food and beverage segments (shift from glue-applied labels) through product innovation and marketing
• Recapture share in North America
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Strategy for Mature Markets
• Growth Priorities:– Enhance customer value:
• Competitive differentiators – breadth of product offerings (films, paper, various adhesives) and innovation… combined with superior service and quality
• “Contract for Value” and Fasson Optimum Performance
– Pursue aggressive marketing / new product development efforts:
• Food and beverage applications• Low end durable applications• New, affordable films (i.e. GCX)• State of the art R&D facility in Mentor, Ohio
• Accelerate productivity to protect market position• Shutter least productive assets• Optimize production of “fighting core” products• New Films coater in U.S.
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Snapshot of Office and Consumer Products
(1) Excluding currency, acquisitions, and divestitures – see Appendix for detail(2) Excluding restructuring charges and other items – see Appendix for detail
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Snapshot of Retail Information Services
(1) Excluding currency, acquisitions, and divestitures – see Appendix for detail(2) Excluding restructuring charges and other items – see Appendix for detail
• Industry consolidation driving share gain for global providers… customers want global quality (data integrity, color consistency) and speed
• Labels and tags are low cost / high value to retailers
• Rapid growth in Asia (China, India, other countries in region) – proximity to manufacturers is key to success
• Paxar acquisition – a perfect fit
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Acquisition... Value Drivers:
• Enhances top-line growth potential– Increases our presence (more than doubles RIS sales) in
the expanding, highly fragmented, retail information and brand identification market
– Combines complementary strengths… broadens our range of product and service capabilities
– Improves ability to meet customer demands for product innovation and improved quality and speed of service
– Facilitates expansion into new product and geographic segments
• $115 to $125 mil. of cost synergies– Similar infrastructure – areas of overlap include SG&A
(e.g., corporate overhead, back office support) and production
– Proven track record with acquisition integration on global scale… high degree of confidence in ability to quickly achieve the savings
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Other Specialty Converting Businesses
(1) Excluding currency, acquisitions, and divestitures – see Appendix for detail(2) Excluding restructuring charges and other items – see Appendix for detail
$0.6 B2006 Sales
Adj. Organic Sales Growth(1)
2006 2005Operating Margin(2)
+ 4.9% 3.5% 3.4%2006 2005 2004
7.0%+ 2.3% + 8.2%2004
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The RFID tag market continues to expand
40 B Vandergraf Int’l30 B ABI
8 B VDC
Estimates of RFID Unit Volume By 2012
0
20
40
60
80
100
120
RFID Market Unit VolumeCompound Annual Growth: 2006-2012
Auto
mot
ive CPGRet
ail
Elec
tronic
s
Tran
spor
tatio
n
Phar
ma
Other
Health
Car
eGov
ernm
ent
Perc
ent
Even conservative estimates define huge market by 2012
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Summary
• Short-Term: Challenging market environment –
Accelerate productivity improvement
• Long-Term: Paxar
RFID
Strong core business fundamentals
Substantial increase in free cash flow over medium term
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APPENDIX
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Reconciliation of Non-GAAP Financial Measures to GAAP
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2.6%1.2%7.4%2.5%4.9%Organic Sales Growth
0.3%1.3%(1.4%)Comparability Adjustments
2.5%
0.3%
1.4%
2.9%
2005*
2.8%5.9%2.5%4.9%Adjusted Organic Sales Growth
(1.0%)0.1%6.0%5.1%Less Impact of Acquisitions, Net of Divestitures
0.3%4.7%6.1%0.6%Less Impact of Currency
1.9%12.1%14.6%10.6%Reported Sales Growth
2006*200420032002
Total Company Adjusted Organic Sales Growth
* From continuing operationsNote: Columns may not foot due to minor rounding differences 22
Bank of America 37th Annual Investment ConferenceSeptember 17, 2007
* 2005 GAAP sales have been re-stated for Business Media reporting change from RIS to Other Specialty Converting.
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Total Company Operating Margin
($ in millions, except as noted) FY 2003 FY 2004 FY 2005 FY 2006
Net Sales 4,736.8 5,317.0 5,473.5 5,575.9Operating income, as reported 397.1 434.0 424.7 481.1Operating margin, as reported (GAAP) 8.4% 8.2% 7.8% 8.6%Non-GAAP adjustments:Restructuring costs, asset impairment, lease cancellation costs, and environmental remediation, net of gains on asset sales 30.5 35.2 63.6 36.2 Adjusted non-GAAP operating income 427.6 469.2 488.3 517.3Adjusted non-GAAP operating margin 9.0% 8.8% 8.9% 9.3%
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Total Company Return on Total Capital
($ in millions, except as noted) FY 2003 FY 2004 FY 2005 FY 2006
GAAPAverage Invested Capital (5 point average) 2,503.2 2,663.2 2,707.6 2,655.4Net Income 267.9 279.7 226.4 367.2 Addback: After-tax interest expense 42.4 43.8 46.1 46.0Return on Average Total Capital 12.4% 12.1% 10.1% 15.6%
Pro-formaAdj. Average Invested Capital (5 point average) 2,503.6 2,682.7 2,742.8 2,683.3Net Income 267.9 279.7 226.4 367.2 Addback: After-tax interest expense 42.4 43.8 46.1 46.0 Addback: After-tax restructuring costs, asset impairment, lease cancellation costs, environmental remediation, and impact of discontinued ops, net of gains on asset sales -0.8 27.6 119.8 12.5Pro-forma Return on Average Total Capital 12.4% 13.1% 14.3% 15.9%
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($ in millions, except as noted) FY 2004 FY 2005 FY 2006
Pressure Sensitive MaterialsNet Sales 2,984.8 3,114.5 3,236.3Operating income, as reported 221.4 258.1 301.2Operating margin, as reported 7.4% 8.3% 9.3%Non-GAAP adjustments:Restructuring costs, asset impairment, and lease cancellation costs, net of gains on asset sales 34.4 23.0 9.3 Adjusted non-GAAP operating income 255.8 281.1 310.5Adjusted non-GAAP operating margin 8.6% 9.0% 9.6%
Office and Consumer ProductsNet Sales 1,172.5 1,136.1 1,072.0Operating income, as reported 186.4 168.0 179.0Operating margin, as reported 15.9% 14.8% 16.7%Non-GAAP adjustments:Restructuring costs, asset impairment, and lease cancellation costs, net of gains on asset sales 0.5 21.8 (2.3)Adjusted non-GAAP operating income 186.9 189.8 176.7Adjusted non-GAAP operating margin 15.9% 16.7% 16.5%
OPERATING MARGIN BY SEGMENT
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($ in millions, except as noted) FY 2004 FY 2005 FY 2006
Retail Information ServicesNet Sales 592.7 630.4 667.7Operating income, as reported 43.4 37.7 45.0Operating margin, as reported 7.3% 6.0% 6.7%Non-GAAP adjustments:Restructuring costs, asset impairment, and lease cancellation costs, net of gains on asset sales 0.3 7.5 11.2 Adjusted non-GAAP operating income 43.7 45.2 56.2Adjusted non-GAAP operating margin 7.4% 7.2% 8.4%
Other Specialty Converting BusinessesNet Sales 567.0 592.5 599.9Operating income, as reported 39.9 14.1 17.2Operating margin, as reported 7.0% 2.4% 2.9%Non-GAAP adjustments:Restructuring costs, asset impairment, and lease cancellation costs, net of gains on asset sales 0.0 6.2 3.7 Adjusted non-GAAP operating income 39.9 20.3 20.9Adjusted non-GAAP operating margin 7.0% 3.4% 3.5%
OPERATING MARGIN BY SEGMENT
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Note: Historical figures have NOT been adjusted to remove the contribution from businesses subsequently divested or discontinued.
Estimated After-Tax Amortization of Intangibles(per share, included in E.P.S. above)
2007 $ 0.10 to $ 0.152008 and on $ 0.20 to $ 0.30
Estimated Integration Costs / One-Time Charges amount, timing and accounting treatment (P&L vs. goodwill adjustment) to be determined…
Restructuring, Asset Impairment, and Integration-Related Costs: $125 to $135 mil. IT-Related Costs: $ 50 to $ 75 mil.Total: $175 to $210 mil. (~ 85% cash)
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Paxar Financial Outlook (continued)
Estimated cost synergies (net of potential offsets): $115 to $125 mil.(90%+ cash)
Timing to achieve savings (% of target savings achieved)
2007 Year-End Run Rate: 30% - 40%2008 Mid-Year Run Rate: 60% - 70%2008 Year-End Run Rate: 90%+
Financing
Weighted average interest rate of 6.5% to 7.0%(higher than original expectation due to interest rate increases since transaction was announced, and anticipated mix of financial instruments, including the issuance of hybrid securities)
