Avery Dennison CorpAVY

Avery Dennison Corp Fair Value Disclosure

10-KFiled Feb 25, 20263 min read
FAIR VALUE MEASUREMENTS
Recurring Fair Value Measurements
Assets and liabilities carried at fair value, measured on a recurring basis, as of December 31, 2025 were as follows:
Fair Value Measurements Using
(In millions)TotalQuoted
Prices in
Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Other
Unobservable
Inputs
(Level 3)
Assets
Investments$49.1 $24.1 $25.0 $— 
Derivative assets7.2 — 7.2 — 
Bank drafts7.5 7.5 — — 
Liabilities
Derivative liabilities$18.0 $.3 $17.7 $— 
Contingent consideration liabilities2.7 — — 2.7 
Assets and liabilities carried at fair value, measured on a recurring basis, as of December 28, 2024 were as follows:
Fair Value Measurements Using
(In millions)TotalQuoted
Prices in
Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Other
Unobservable
Inputs
(Level 3)
Assets
Investments$48.0 $24.2 $23.8 $— 
Derivative assets41.2 .4 40.8 — 
Bank drafts5.2 5.2 — — 
Liabilities
Derivative liabilities$41.5 $.4 $41.1 $— 
Contingent consideration liabilities4.8 — — 4.8 
Investments included fixed income securities (primarily U.S. government and corporate debt securities) measured at fair value using quoted prices/bids and a money market fund measured at fair value using NAV. As of December 31, 2025, investments of $1.1 million, $46.9 million, and $1.1 million were included in “Cash and cash equivalents,” “Other current assets,” and "Other assets," respectively, in the Consolidated Balance Sheets. As of December 28, 2024, investments of $1.5 million, $38.1 million, and $8.4 million were included in “Cash and cash equivalents,” “Other current assets,” and "Other assets," respectively, in the Consolidated Balance Sheets. Derivative instruments that are exchange-traded are measured at fair value using quoted market prices and classified within Level 1 of the valuation hierarchy. Derivative instruments measured based on foreign currency exchange rate inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy. Bank drafts (maturities greater than three months) are valued at face value due to their short-term nature and were included in “Other current assets” in the Consolidated Balance Sheets.
Contingent consideration liabilities relate to estimated earn-out payments associated with an acquisition completed in 2022, which is subject to the acquired company achieving certain post-acquisition performance targets. This liability was recorded based on the expected payments and has been classified as Level 3. Activity related to contingent consideration was immaterial in 2025 and 2024.
In addition to the investments described above, we hold venture investments that had a total carrying value of approximately $58 million and $45 million as of December 31, 2025 and December 28, 2024, respectively, which was included in “Other assets” in the Consolidated Balance Sheets. We hold certain venture investments based on Level 1 inputs; the fair value of these investments was $1.1 million as of December 31, 2025, and $8.4 million as of December 28, 2024. We recognized $23.3 million and $19.2 million in net losses in 2025 and 2024, respectively, and no net gains or losses in 2023 in our venture and other investments. These net gains or losses were recorded in “Other expense (income), net” in the Consolidated Statements of Income.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 21, 2024
2022Feb 22, 2023
2021Feb 25, 2021
2019Feb 26, 2020
2018Feb 27, 2019
2017Feb 21, 2018
2016Feb 24, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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