Market Overview

Sealed Air Reports First Quarter 2017 Results

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Sealed Air Corporation (NYSE:SEE) today announced financial results for
first quarter 2017. Commenting on these results, Jerome A. Peribere,
President and Chief Executive Officer, said, "2017 is a transformational
year for Sealed Air. In March, we announced the sale of Diversey to Bain
Capital Private Equity in a transaction valued at $3.2 billion. This
transaction marks a significant milestone for both New Sealed Air and
Diversey and we are committed to a timely and successful separation. For
Sealed Air, the divestiture gives us an even greater focus on executing
our profitable growth story and the financial flexibility to invest in
our core business."

Peribere continued, "Our first quarter performance demonstrates our
commitment to renewed growth and high quality earnings. We were pleased
North America delivered 7% volume growth as a result of increased demand
for our protein packaging and e-Commerce solutions. Looking forward, we
expect continued momentum on the top line and improved earnings
throughout the remainder of the year."

Unless otherwise stated, all results compare first quarter 2017 results
to first quarter 2016 results from continuing operations. Diversey
refers to the Diversey Care and food hygiene and cleaning business. As a
result of the Diversey transaction, we have also changed our segment
reporting structure effective as of January 1, 2017. Food Care now
includes the Medical Applications businesses which were previously
reported under 'Other'. Additionally, Food Care now excludes the food
hygiene business, which is a component of Diversey and classified as
discontinued operations. Year-over-year financial discussions present
operating results from continuing operations as reported, and on a
constant dollar basis. Constant dollar refers to unit volume and
price/mix performance and excludes the impact of currency translation
from all periods referenced. Additionally, non-U.S. GAAP adjusted
financial measures, such as Adjusted Earnings Before Interest Expense,
Taxes, Depreciation and Amortization ("Adjusted EBITDA"), Adjusted Net
Earnings, Adjusted Diluted Earnings Per Share ("Adjusted EPS") and
Adjusted Tax Rate, exclude the impact of special items, such as
restructuring charges, charges related to the sale of Diversey, charges
related to ceasing operations in Venezuela, cash-settled stock
appreciation rights ("SARs") granted as part of the original Diversey
acquisition and certain other infrequent or one-time items. Please refer
to the supplemental information included with this press release for a
reconciliation of Non-U.S. GAAP to U.S. GAAP financial measures.

First Quarter 2017 Highlights by Division

  • Food Care net sales of $656 million increased 2.7% as reported.
    Currency had a positive impact on Food Care net sales of 0.6%, or $4
    million. On a constant dollar basis, net sales increased 2.1% due to
    positive volume growth of 3.1% partially offset by lower price/mix of
    1.0%. Volume growth of 9% in North America and 1% in Latin America
    were partially offset by declines in Europe, Middle East and Africa
    (EMEA) and Asia Pacific. Adjusted EBITDA of $142 million or 21.7% of
    net sales was primarily attributable to positive volume trends, which
    were partially offset by unfavorable mix and price/cost spread.
  • Product Care net sales of $377 million in the first quarter were up
    2.5% as reported and 3.6% on a constant dollar basis. Currency had a
    negative impact on Product Care net sales of 1.1%, or $4 million.
    Sales volume increased 5.0% with positive trends across all regions.
    This was offset by unfavorable price/mix of 1.4%. North America
    volumes were up 5.5% as a result of continued strength in e-Commerce.
    Adjusted EBITDA of $74 million or 19.7% of net sales was attributable
    to volume growth, which was more than offset by higher raw material
    costs and unfavorable mix of e-Commerce products.
  • On March 27, 2017, Sealed Air announced it had entered into a
    definitive agreement to sell Diversey to Bain Capital Private Equity,
    a leading global private investment firm, for $3.2 billion. The
    transaction is expected to close in early September.
  • In conjunction with the announced divestiture, Sealed Air's Board of
    Directors authorized an increase of the share repurchase program by an
    additional $1.5 billion of Sealed Air common stock. With this
    increase, the total authorization for future repurchases under the
    program is approximately $2.2 billion.

First Quarter 2017 U.S. GAAP Summary,
Continuing Operations

Net sales of $1.0 billion increased 2.6% on an as reported basis.
Currency had a negative impact on total net sales of 0.1%, or $1
million. As reported, net sales in Latin America and North America
increased 7.2% and 5.9% respectively. Asia Pacific was up 3.1% as
reported while EMEA declined 6.7%.

Net loss from continuing operations on a reported basis was $54 million,
or $(0.27) per diluted share as compared to $75 million, or $0.37 per
diluted share in the first quarter 2016. Net earnings in the first
quarter 2017 were unfavorably impacted by $139 million of special items,
including $127 million of tax expense recorded in accordance with the
pending sale of Diversey. Special items negatively impacting the first
quarter of 2017 also included costs incurred related to the sale of
Diversey, and restructuring and other restructuring associated costs.
Net earnings in the first quarter 2016 included $8 million of special
items, primarily consisting of restructuring and other restructuring
associated costs, a loss on the sale of our European food trays
business, and a loss on the remeasurement of our Venezuelan operations.

The effective tax rate in the first quarter of 2017 was 165.1%, compared
to the effective tax rate of 19.0% in the first quarter of 2016. The
effective tax rate in the first quarter of 2017 was negatively impacted
by previously discussed tax expense related to the pending sale of
Diversey, which was partially offset by a $9 million tax benefit on
share-based compensation and a $5 million benefit related to statute of
limitations expirations and audit settlements. The effective tax rate in
the first quarter of 2016 was favorably impacted by a $10 million tax
benefit on share-based compensation.

First Quarter 2017 Non-U.S. GAAP Summary,
Continuing Operations

Net sales on a constant dollar basis increased 2.7%. North America was
up 5.7% followed by Latin America, which delivered constant dollar sales
growth of 5.5%. Volumes increased 3.8% with positive trends across the
all regions except EMEA. Volumes in North America increased 7.4% and
Latin America was up 1.4%. Constant dollar sales were relatively flat in
Asia Pacific while EMEA declined 3.5%.

Adjusted EBITDA for the first quarter 2017 was $182 million, or 17.6% of
net sales, compared to $186 million, or 18.5% of net sales for the first
quarter of 2016. Adjusted EBITDA included $34 million of Corporate
expenses in the first quarter of 2017, of which $8 million reflected
costs that were previously allocated to Diversey but not included in net
income from discontinued operations. Corporate expenses were $30 million
in the first quarter of 2016, and included $5 million of costs that were
previously allocated to Diversey, but which were not included in net
income from discontinued operations.

Adjusted EPS was $0.43 for the first quarter 2017. This compares to
Adjusted EPS of $0.42 in the first quarter 2016. The Adjusted Tax Rate
was 13.6% in the first quarter 2017, compared to 18.8% in the first
quarter 2016. The Adjusted Tax Rate in the first quarter of 2017 was
favorably impacted by $9 million of tax benefit on share-based
compensation and $6 million benefit related to statute of limitations
expirations and audit settlements. The Adjusted Tax Rate in the first
quarter of 2016 was favorably impacted by a $10 million tax benefit on
share-based compensation.

First Quarter 2017 U.S. GAAP Summary,
Discontinued Operations
.

Net sales included in the calculation of net earnings from discontinued
operations were $582 million as compared to $585 million in the first
quarter of 2016. Net income from discontinued operations on a reported
basis was $11 million, or $0.05 per diluted share, as compared to $28
million, or $0.14 per diluted share in the first quarter 2016. Net
earnings in the first quarter 2017 were negatively impacted by $19
million of tax expense related to the planned repatriation of foreign
earnings.

Cash Flow and Net Debt

Cash flow provided by operating activities in the first three months of
2017 was $17 million, which is net of $15 million of restructuring
payments. This compares with cash provided by operating activities of
$15 million in the first three months of 2016.

Capital expenditures decreased to $50 million in the first three months
of 2017 compared to $52 million in the first three months of 2016. Free
Cash Flow, defined as net cash provided by operating activities less
capital expenditures, was an outflow of $33 million in the first three
months of 2017. This compares to an outflow of $41 million in the first
three months of 2016.

Compared to December 31, 2016, the Company's net debt increased $89
million to $3.9 billion as of March 31, 2017. This increase in net debt
primarily resulted from a use of working capital, capital expenditures,
and amounts paid for dividends.

Updated Outlook for Full Year 2017, Continuing
Operations

For the full year 2017, the Company expects to achieve approximately Net
Sales of $4.3 billion, as compared to $4.2 billion for the full year
2016. This sales performance is based on an expected 3% constant dollar
sales growth in Food Care and 3 - 4% constant dollar sales growth in
Product Care. Currency is expected to have a negative impact of $35
million on Net Sales in 2017.

Adjusted EBITDA from continuing operations for the full year 2017 is
expected to be approximately $825 million, as compared to $808 million
for the full year 2016. The outlook for Adjusted EBITDA assumes $25
million of costs that were previously allocated to Diversey that were
not included in net earnings from discontinued operations, which
compares to $17 million in 2016. Currency is expected to have a negative
impact of approximately $5 million on Adjusted EBITDA in 2017.

Adjusted EPS from continuing operations is expected to be approximately
$1.70 for the full year 2017 and assumes an Adjusted Tax Rate of 28% and
an estimated 196 million diluted shares outstanding, which is in line
with diluted shares outstanding in the first quarter of 2017.

The Company's Free Cash Flow outlook assumes an early September close on
the sale of Diversey and is based on a full year of Adjusted EBITDA from
continuing operations of $825 million and eight months from discontinued
operations of $215 million. Free Cash Flow outlook excludes cash flow
generation from working capital related to Diversey in the last four
months of the year, and does not include payments expected to be paid in
relation to the sale of Diversey. The Company anticipates 2017 Free Cash
Flow to be approximately $390 million, including capital expenditures of
approximately $175 million and cash restructuring payments of
approximately $50 million, which excludes any restructuring programs to
address stranded and unallocated costs. Full year 2016 Free Cash Flow
was $631 million, including $276 million of capital expenditures and
cash restructuring payments of $66 million.

Conference Call Information

Date:

      Tuesday, May 9, 2017

Time:

10:00am (ET)

Webcast:

www.sealedair.com/investors

Conference Dial In:

(855) 472-5411 (domestic)
(330) 863-3389 (international)

Participant Code:

6791312
 

A supplemental presentation accompanying the conference call will be
available on the Company's website at www.sealedair.com/investors.

Conference Call Replay Information

Dates:

      Tuesday, May 9, 2017 at 1:00pm (ET) through
Thursday, June 8, 2017 at 12:59pm (ET)

Webcast:

www.sealedair.com/investors

Conference Dial In:

(855) 859-2056 (domestic)
(404) 537-3406 (international)

Participant Code:

6791312
 

Business

Sealed Air Corporation creates a world that feels, tastes and works
better. In 2016, the Company generated revenue of approximately $6.8
billion by helping our customers achieve their sustainability goals in
the face of today's biggest social and environmental challenges. Our
portfolio of widely recognized brands, including Cryovac® brand food
packaging solutions, Bubble Wrap® brand cushioning and Diversey®
cleaning and hygiene solutions, enables a safer and less wasteful food
supply chain, protects valuable goods shipped around the world, and
improves health through clean environments. Sealed Air has approximately
23,000 employees who serve customers in 171 countries. To learn more,
visit www.sealedair.com.

Website Information

We routinely post important information for investors on our website, www.sealedair.com,
in the "Investor Relations" section. We use this website as a means of
disclosing material, non-public information and for complying with our
disclosure obligations under Regulation FD. Accordingly, investors
should monitor the Investor Relations section of our website, in
addition to following our press releases, SEC filings, public conference
calls, presentations and webcasts. The information contained on, or that
may be accessed through, our website is not incorporated by reference
into, and is not a part of, this document.

Non-U.S. GAAP Information

In this press release and supplement, we have included several non-U.S.
GAAP financial measures, including Adjusted Net Earnings and Adjusted
EPS, net sales on a "constant dollar" or "organic" basis, Free Cash
Flow, Adjusted EBITDA and Adjusted Tax Rate, as our management believes
these measures are useful to investors. We present results and guidance,
adjusted to exclude the effects of Special Items and their related tax
impact that would otherwise be included under U.S. GAAP, to aid in
comparisons with other periods or prior guidance. In addition, non-U.S.
GAAP measures are used by management to review and analyze our operating
performance and, along with other data, as internal measures for setting
annual budgets and forecasts, assessing financial performance, providing
guidance and comparing our financial performance with our peers and may
also be used for purposes of determining incentive compensation. The
non-U.S. GAAP information has limitations as an analytical tool and
should not be considered in isolation from or as a substitute for U.S.
GAAP information. It does not purport to represent any similarly titled
U.S. GAAP information and is not an indicator of our performance under
U.S. GAAP. Non-U.S. GAAP financial measures that we present may not be
comparable with similarly titled measures used by others. Investors are
cautioned against placing undue reliance on these non-U.S. GAAP
measures. For a reconciliation of these non-U.S. GAAP measures to U.S.
GAAP and other important information on our use of non-U.S. GAAP
financial measures, see the attached supplementary information entitled
"Condensed Consolidated Statements of Cash Flows" (under the section
entitled "Non-U.S. GAAP Free Cash Flow"), "Reconciliation of U.S. GAAP
Net Earnings and U.S. GAAP Net Earnings Per Share to Non-U.S. GAAP
Adjusted Net Earnings and Non-U.S. GAAP Adjusted Net Earnings Per Share"
"Segment Information," "Reconciliation of U.S. GAAP Net Earnings to
Non-U.S. GAAP Total Company Adjusted EBITDA," "Components of Change in
Net Sales by Segment," "Components of Changes in Net Sales by Region,"
"Components of Organic Change in Net Sales by Segment," and "Components
of Organic Changes in Net Sales by Region." Information reconciling
forward-looking non-U.S. GAAP measures to U.S. GAAP measures is not
available without unreasonable effort.

*We have not provided guidance for the most directly comparable U.S.
GAAP financial measures, as they are not available without unreasonable
effort due to the high variability, complexity, and low visibility with
respect to certain Special Items, including gains and losses on the
disposition of businesses, the ultimate outcome of certain legal or tax
proceedings, foreign currency gains or losses resulting from the
volatile currency market in Venezuela, and other unusual gains and
losses. These items are uncertain, depend on various factors, and could
be material to our results computed in accordance with U.S. GAAP.

Forward-Looking Statements

This press release contains "forward-looking statements" within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 concerning our business, consolidated
financial condition and results of operations. Forward-looking
statements are subject to risks and uncertainties, many of which are
outside our control, which could cause actual results to differ
materially from these statements. Therefore, you should not rely on any
of these forward-looking statements. Forward-looking statements can be
identified by such words as "anticipates," "believes," "plan,"
"assumes," "could," "should," "estimates," "expects," "intends,"
"potential," "seek," "predict," "may," "will" and similar references to
future periods. All statements other than statements of historical facts
included in this press release regarding our strategies, prospects,
financial condition, operations, costs, plans and objectives are
forward-looking statements. Examples of forward-looking statements
include, among others, statements we make regarding expected future
operating results, expectations regarding the results of restructuring
and other programs, anticipated levels of capital expenditures and
expectations of the effect on our financial condition of claims,
litigation, environmental costs, contingent liabilities and governmental
and regulatory investigations and proceedings. The following are
important factors that we believe could cause actual results to differ
materially from those in our forward-looking statements: the tax
benefits associated with the Settlement agreement (as defined in our
2016 Annual Report on Form 10-K), global economic and political
conditions, changes in our credit ratings, changes in raw material
pricing and availability, changes in energy costs, competitive
conditions, the success of the separation of the Diversey Care division
and food hygiene business, the success of our restructuring activities,
currency translation and devaluation effects, the success of our
financial growth, profitability, cash generation and manufacturing
strategies and our cost reduction and productivity efforts, the success
of new product offerings, the effects of animal and food-related health
issues, pandemics, consumer preferences, environmental matters,
regulatory actions and legal matters, and the other information
referenced in the "Risk Factors" section appearing in our most recent
Annual Report on Form 10-K, as filed with the Securities and Exchange
Commission, and as revised and updated by our Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. Any forward-looking statement made
by us is based only on information currently available to us and speaks
only as of the date on which it is made. We undertake no obligation to
publicly update any forward-looking statement, whether written or oral,
that may be made from time to time, whether as a result of new
information, future developments or otherwise.

 
 
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(1)
(Unaudited)
(In millions, except per share data)
           
Three Months Ended
March 31,
2017 2016
 
Net sales $ 1,032.2 $ 1,005.9
Cost of sales   695.8     670.3  
Gross profit 336.4 335.6
As a % of total net sales 32.6 % 33.4 %
Selling, general and administrative expenses 195.8 185.1
As a % of total net sales 19.0 % 18.4 %
Amortization expense of intangible assets acquired 5.0 2.8
Restructuring and other charges   1.9     (0.2 )
Operating profit 133.7 147.9
Interest expense (48.8 ) (50.9 )
Foreign currency exchange loss related to Venezuelan subsidiaries (1.0 )
Other expense, net   (2.3 )   (3.5 )
Earnings from continuing operations before income tax provision 82.6 92.5
Income tax provision(2)   136.4     17.6  
Effective income tax rate 165.1 % 19.0 %
Net (loss) earnings from continuing operations (53.8 ) 74.9
Net earnings from discontinued operations, net of tax   10.6     27.5  
Net (loss) earnings available to common stockholders $ (43.2 ) $ 102.4  
Basic(2)(3):
Continuing operations $ (0.27 ) $ 0.37
Discontinued operations   0.05     0.14  
Net (loss) earnings per common share - basic $ (0.22 ) $ 0.51  
Diluted(2)(3):
Continuing operations $ (0.27 ) $ 0.37
Discontinued operations   0.05     0.14  
Net (loss) earnings per common share - diluted $ (0.22 ) $ 0.51  
Dividends per common share $ 0.16   $ 0.13  
Weighted average number of common shares outstanding:
Basic   193.4     195.2  
Diluted(2)   195.7     197.5  

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
(2) The Company early adopted ASU 2016-09 on a prospective basis as
required, related to the recognition of excess tax benefits to the
income statement which were previously recorded in additional
paid-in capital, effective January 1, 2016. This resulted in an
additional 404,347 diluted weighted average number of common shares
outstanding for the three months ended March 31, 2016, and
recognition of excess tax benefits of $9.6 million in income tax
provision from continuing operations for the three months ended
March 31, 2016. As a result, net earnings per common share increased
by $0.05 per share per share for the three months ended March 31,
2016.
(3) Net earnings per common share are calculated under the two-class
method. See our Annual Report on Form 10-K for year ended December
31, 2016 for more information on the two-class method.
 
 
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS(1)

(Unaudited)

(In millions)

             
March 31, December 31,
2017 2016
Assets
Current assets:
Cash and cash equivalents $ 258.4 $ 333.7
Trade receivables, net 450.5 460.5
Other receivables 84.0 84.2
Inventories 507.0 456.7
Current assets held for sale 2,891.8 825.7
Other current assets   95.8   54.6
Total current assets 4,287.5 2,215.4
Property and equipment, net 910.1 889.6
Goodwill 1,884.7 1,882.9
Intangible assets, net 39.3 40.1
Deferred taxes 122.4 169.9
Non-current assets held for sale 2,026.0
Other assets, net   177.2   175.3
Total assets $ 7,421.2 $ 7,399.2
Liabilities and stockholders' equity
Current liabilities:
Short-term borrowings $ 96.9 $ 83.0
Current portion of long-term debt 296.5 297.0
Accounts payable 581.1 539.2
Current liabilities held for sale 1,215.4 683.3
Other current liabilities   471.7   516.5
Total current liabilities 2,661.6 2,119.0
Long-term debt, less current portion 3,762.7 3,762.6
Deferred taxes 4.3 4.9
Non-current liabilities held for sale 501.0
Other liabilities   397.8   402.0
Total liabilities   6,826.4   6,789.5
Stockholders' equity   594.8   609.7
Total liabilities and stockholders' equity $ 7,421.2 $ 7,399.2

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
 
 

CALCULATION OF NET DEBT (1)

                         
March 31, December 31,
2017 2016
 
 
Short-term borrowings $ 96.9 $ 83.0
Current portion of long-term debt 296.5 297.0
Long-term debt, less current portion   3,762.7     3,762.6  
Total debt 4,156.1 4,142.6
Less: cash and cash equivalents   (258.4 )   (333.7 )
Net debt $ 3,897.7   $ 3,808.9  

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
 
 
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(1)
(Unaudited)
(In millions)
     
Three Months Ended March 31,
2017 2016
Revised(3)
Net (loss) earnings available to common stockholders $ (43.2 ) $ 102.4
Adjustments to reconcile net earnings to net cash provided by
operating activities(2)
184.9 66.7
Changes in:
Trade receivables, net (3.3 ) (22.3 )
Inventories (64.3 ) (65.1 )
Accounts payable 56.1 39.0
Changes in all other operating assets and liabilities   (113.0 )   (106.0 )
Cash flow provided by operating activities 17.2 14.7
 
Capital expenditures for property and equipment (50.4 ) (51.8 )
Proceeds, net from sale of businesses 2.3 4.2
Proceeds from sales of property, equipment and other assets 0.1 1.3
Settlement of foreign currency forward contracts   (7.3 )   (22.4 )
Cash flow used in investing activities (55.3 ) (68.7 )
 
Net proceeds (payments) from borrowings 10.2 106.8
Cash used as collateral on borrowing arrangements (1.2 ) (0.2 )
Repurchase of common stock (32.0 )
Dividends paid on common stock (31.4 ) (26.2 )
Acquisition of common stock for tax withholding (21.5 ) (22.3 )
Other financing activities   (1.8 )    
Cash flow (used in) provided by financing activities (45.7 ) 26.1
 
Effect of foreign currency exchange rates on cash and cash
equivalents
  8.5     (10.9 )
 
Cash and cash equivalents beginning of period $ 333.7 $ 321.7
Net change in cash and cash equivalents   (75.3 )   (38.8 )
Cash and cash equivalents end of period $ 258.4   $ 282.9  
 
Non-U.S. GAAP Free Cash Flow:
Cash flow from operating activities $ 17.2 $ 14.7
Capital expenditures for property and equipment   (50.4 )   (51.8 )
Free Cash Flow(4) $ (33.2 ) $ (37.1 )
 
Additional Cash Flow Information:
Interest payments, net of amounts capitalized $ 48.0   $ 48.9  
Income tax payments $ 46.2   $ 29.6  
SARs payments (less amounts included in restructuring payments) $   $ 0.1  
Restructuring payments (including associated costs) $ 15.2   $ 18.7  

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
(2) 2017 primarily consists of $112 million of deferred taxes, including
$127 million of tax expense recorded in accordance with the pending
sale of Diversey, depreciation and amortization of $53 million,
share based compensation expense of $9 million and profit sharing
expense of $9 million. 2016 primarily consists of depreciation and
amortization of $59 million, profit sharing expense of $7 million
and loss on sale of businesses of $3 million.
(3) The Company early adopted ASU 2016-09 on a retrospective basis
related to the classification of excess tax benefits on the
Statement of Cash Flows, effective January 1, 2016, which resulted
in an increase in operating cash flow of $7 million and a decrease
in financing activities of $7 million for the three months ended
March 31, 2016. Additionally, due to changes in the accounting
treatment of a factoring agreement the Company reclassified amounts
from cash and cash equivalents to other receivables $3 million as of
March 31, 2016. This reclassification resulted in a decrease in cash
provided by operating activities of $4 million for the three months
ended March 31, 2016.
(4)

Free cash flow was $(31) million in 2017 excluding the payment of
charges related to the sale of Diversey of $2 million. Free cash
flow does not represent residual cash available for discretionary
expenditures, including mandatory debt servicing requirements or
non-discretionary expenditures that are not deducted from this
measure.

 
 

SEALED AIR CORPORATION

SUPPLEMENTARY INFORMATION

RECONCILIATION OF U.S. GAAP NET EARNINGS AND U.S. GAAP NET
EARNINGS PER COMMON SHARE TO

NON-U.S. GAAP ADJUSTED NET EARNINGS AND NON-U.S. GAAP ADJUSTED
NET EARNINGS PER COMMON SHARE
(1)

(Unaudited)

(In millions, except per share data)

   
Three Months Ended March 31,
2017   2016
Net   Net  
Earnings EPS Earnings EPS

U.S. GAAP net (loss) earnings and EPS available to
  common
stockholders from continuing operations
(2)

$ (53.8) $ (0.27) $ 74.9 $ 0.37
Special Items(3)   138.6   0.70   7.9   0.05

Non-U.S. GAAP adjusted net (loss) earnings and
  adjusted
EPS available to common stockholders

  from
continuing operations

$ 84.8 $ 0.43 $ 82.8 $ 0.42

Weighted average number of common shares
  outstanding -
Diluted

  195.7   197.5

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
(2) Net earnings per common share is calculated under the two-class
method.
(3) Special Items include the following:
       
Three Months Ended

March 31,

2017   2016
Special Items:
Restructuring and other charges $ (1.9 ) $ 0.2

Other restructuring associated costs included in cost of sales and
selling,
general and administrative expenses

(3.9 ) (3.9 )
SARs (0.1 )

Foreign currency exchange loss related to Venezuelan
  subsidiaries

(1.0 )

Gain (loss) on sale of North American foam trays and
  absorbent
pads business and European food trays
  business

2.3 (1.6 )

Loss related to the sale of other businesses,
  investments
and property, plant and equipment

(1.7 )
Charges incurred related to the sale of Diversey (16.1 )
Other Special Items(1)   4.1     (1.4 )
Pre-tax impact of Special Items (15.5 ) (9.5 )
Tax impact of Special Items and Tax Special Items(2)   (123.1 )   1.6  
Net impact of Special Items $ (138.6 ) $ (7.9 )
Weighted average number of common shares outstanding - Diluted   195.7     197.5  
Earnings per share impact from Special Items $ (0.70 ) $ (0.05 )

__________________

(1)   Other Special Items for the three months ended March 31, 2017
primarily included a recovered wage tax as the result of a court
ruling partially offset by legal fees associated with restructuring
and acquisitions. Other Special Items for the three months ended
March 31, 2016 primarily included legal fees associated with
restructuring and acquisitions.
(2) Refer to Note 1 to the table below for a description of Special
Items related to tax.
 
 

The calculation of the non-U.S. GAAP Adjusted income tax rate is
as follows:

   
Three Months Ended

March 31,

2017   2016

U.S. GAAP Earnings before income tax provision from continuing
operations

$ 82.6 $ 92.5
Pre-tax impact of Special Items   (15.5 )   (9.5 )

Non-U.S. GAAP Adjusted Earnings before income tax provision from
continuing operations

$ 98.1   $ 102.0  
 

U.S. GAAP Income tax (benefit) provision from continuing operations

$ 136.4 $ 17.6
Tax Special Items(1) (128.3 )
Tax impact of Special Items   5.2     1.6  

Non-U.S. GAAP Adjusted Income tax provision from continuing
operations

$ 13.3   $ 19.2  
 
U.S. GAAP Effective income tax rate 165.1 % 19.0 %
Non-U.S. GAAP Adjusted income tax rate 13.6 % 18.8 %

__________________

(1)   For the three months ended March 31, 2017, the special tax items
included $127 million of tax expense recorded in accordance with the
pending sale of Diversey.
 
 
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
SEGMENT INFORMATION(1)
(Unaudited)
           
Three Months Ended
March 31, %
2017

2016

Change
 
Net Sales:
Food Care $ 655.6 $ 638.4 2.7 %
As a % of Total Company net sales 63.5 % 63.5 %
Product Care 376.6 367.5 2.5 %
As a % of Total Company net sales   36.5 %   36.5 %  
Total Company Net Sales $ 1,032.2   $ 1,005.9   2.6 %
 
 
Three Months Ended
March 31, %
2017

2016

Change
 
Adjusted EBITDA from continuing operations(2):
Food Care $ 141.5 $ 138.6 2.1 %
Adjusted EBITDA Margin 21.6 % 21.7 %
Product Care 74.1 77.1 -3.9 %
Adjusted EBITDA Margin 19.7 % 21.0 %
Corporate expenses and unallocated costs(3)   (33.7 )   (29.5 ) 14.2 %

Non-U.S. GAAP Total Company
  Adjusted
EBITDA from continuing operations

$ 181.9   $ 186.2   -2.3 %
Adjusted EBITDA Margin 17.6 % 18.5 %

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
(2) As of January 1, 2017 we modified our calculation of Adjusted EBITDA
to exclude interest income. The impact in this modification was $1.6
million for the three months ended March 31, 2016.
(3) Unallocated costs related to Diversey that have been included in
adjusted EBITDA for Corporate were as follows:
                                               
Three Months Ended
March 31,

        2017        

 

        2016        

 
Unallocated costs $       8.0 $       5.1
 
 

SEALED AIR CORPORATION

SEGMENT INFORMATION – CONTINUED

SUPPLEMENTARY INFORMATION(1)

RECONCILIATION OF U.S. GAAP NET EARNINGS TO

NON-U.S. GAAP TOTAL COMPANY ADJUSTED EBITDA

(Unaudited)

(In millions)

     

Three Months Ended

March 31,

2017 2016
 
U.S. GAAP net earnings from continuing operations $ (53.8 ) $ 74.9
Interest expense (48.8 ) (50.9 )
Interest income 2.2 1.6
Income tax provision 136.4 17.6
Depreciation and amortization(3) (37.2 ) (34.9 )
Special Items:
Restructuring and other charges (1.9 ) 0.2

Other restructuring associated costs included in cost of
  sales
and selling, general and administrative expenses

(3.9 ) (3.9 )
SARs (0.1 )

Foreign currency exchange loss related to
  Venezuelan
subsidiaries

(1.0 )

Gain (loss) on sale of North American foam trays and
  absorbent
pads business and European food trays
  business

2.3 (1.6 )

Loss related to the sale of other businesses,
  investments
and property, plant and equipment

(1.7 )
Charges incurred related to the sale of Diversey (16.1 )
Other(2)   4.1     (1.4 )
Pre-tax impact of Special Items   (15.5 )   (9.5 )
Non-U.S. GAAP Total Company Adjusted EBITDA from

continuing operations

$ 181.9   $ 186.2  

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
(2) Other Special Items for the three months ended March 31, 2017
primarily included a recovered wage tax as the result of a court
ruling partially offset by legal fees associated with restructuring
and acquisitions. Other Special Items for the three months ended
March 31, 2016 primarily included legal fees associated with
restructuring and acquisitions.
(3) Depreciation and amortization by segment are as follows:
       
 

 

Three Months Ended

March 31,

       2017      

 

       2016      

 
Food Care $ 25.1 $ 22.9
Product Care 11.5 9.6
Corporate   0.6   2.4
Total Company depreciation and amortization(1) $ 37.2 $ 34.9

__________________

(1)   Includes share-based incentive compensation of $8.0 million and
$11.5 million for the three months March 31, 2017 and March 31, 2016
respectively.
 
 
(4) Restructuring and other charges by segment is as follows:
         
 

Three Months Ended

March 31,

      2017      

 

      2016      

 
Food Care $ 1.2 $ (0.1 )
Product Care   0.7   (0.1 )
Total Company restructuring and other charges $ 1.9 $ (0.2 )
 
 
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY SEGMENT(1)
             
Three Months Ended March 31, (Unaudited)
(In millions) Food Care   Product Care  

Total

Company

2016 Net Sales $ 638.4 $ 367.5 $ 1,005.9
 
Volume - Units 19.8 3.1 % 18.5 5.0 % 38.3 3.8 %
Price/mix(2)   (6.2 ) (1.0 ) %   (5.2 ) (1.4 ) %   (11.4 ) (1.1 ) %
Total constant dollar change (Non-U.S. GAAP)(3) 13.6 2.1 % 13.3 3.6 % 26.9 2.7 %
Foreign currency translation   3.6   0.6   %   (4.2 ) (1.1 ) %   (0.6 ) (0.1 ) %
Total change (U.S. GAAP)   17.2   2.7   %   9.1   2.5   %   26.3   2.6   %
     
2017 Net Sales $ 655.6   $ 376.6   $ 1,032.2  

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly report on Form 10-Q with the Securities and
Exchange Commission.
(2) Our price/mix reported above includes the net impact of our pricing
actions and rebates as well as the period-to-period change in the
mix of products sold. Also included in our reported price/mix is the
net effect of some of our customers purchasing our products in
non-U.S. dollar or euro denominated countries at selling prices
denominated in U.S. dollars or euros. This primarily arises when we
export products from the U.S. and euro-zone countries.
(3) Total constant dollar change is a non-U.S. GAAP financial measure
which excludes the impact of foreign currency translation. Since we
are a U.S. domiciled company, we translate our
foreign-currency-denominated financial results into U.S. dollars.
Due to changes in the value of foreign currencies relative to the
U.S. dollar, translating our financial results from foreign
currencies to U.S. dollars may result in a favorable or unfavorable
impact. It is important that we take into account the effects of
foreign currency translation when we view our results and plan our
strategies. Nonetheless, we cannot control changes in foreign
currency exchange rates. Consequently, when our management looks at
our financial results to measure the core performance of our
business, we exclude the impact of foreign currency translation by
translating our current period results at prior period foreign
currency exchange rates. We also may exclude the impact of foreign
currency translation when making incentive compensation
determinations. As a result, our management believes that these
presentations are useful internally and may be useful to our
investors.
 
 
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY REGION(1)
                   
Three Months Ended March 31, (Unaudited)
(In millions) North America EMEA(2) Latin America APAC(3) Total
2016 Net Sales $ 531.6 $ 235.4 $ 90.9 $ 148.0 $ 1,005.9
 
Volume - Units 39.4 7.4 % (3.6 ) (1.5 ) % 1.3 1.4 % 1.2 0.8 % 38.3 3.8 %
Price/mix(4)   (9.2 ) (1.7 ) %   (4.7 ) (2.0 ) %   3.7 4.1 %   (1.2 ) (0.8 ) %   (11.4 ) (1.1 ) %
Total constant dollar change (Non-U.S. GAAP)(5) 30.2 5.7 % (8.3 ) (3.5 ) % 5.0 5.5 % % 26.9 2.7 %
Foreign currency translation   0.6   0.1   %   (8.0 ) (3.4 ) %   1.5 1.7 %   5.3   3.6   %   (0.6 ) (0.1 ) %
Total change (U.S. GAAP) $ 30.8   5.8   % $ (16.3 ) (6.9 ) % $ 6.5 7.2 % $ 5.3   3.6   % $ 26.3   2.6   %
         
2017 Net Sales $ 562.4   $ 219.1   $ 97.4 $ 153.3   $ 1,032.2  

__________________

(1)   The supplementary information included in this press release for
2017 is preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission.
(2) EMEA consists of Europe, Middle East, Africa and Turkey.
(3) APAC refers collectively to our Asia Pacific region. This region
consists of i) Greater China, ii) India/Southeast Asia and iii)
Australia, New Zealand, Japan and Korea.
(4) Our price/mix reported above includes the net impact of our pricing
actions and rebates as well as the period-to-period change in the
mix of products sold. Also included in our reported price/mix is the
net effect of some of our customers purchasing our products in
non-U.S. dollar or euro denominated countries at selling prices
denominated in U.S. dollars or euros. This primarily arises when we
export products from the U.S. and euro-zone countries.
(5) Total constant dollar change is a non-U.S. GAAP financial measure
which excludes the impact of foreign currency translation. Since we
are a U.S. domiciled company, we translate our
foreign-currency-denominated financial results into U.S. dollars.
Due to changes in the value of foreign currencies relative to the
U.S. dollar, translating our financial results from foreign
currencies to U.S. dollars may result in a favorable or unfavorable
impact. It is important that we take into account the effects of
foreign currency translation when we view our results and plan our
strategies. Nonetheless, we cannot control changes in foreign
currency exchange rates. Consequently, when our management looks at
our financial results to measure the core performance of our
business, we exclude the impact of foreign currency translation by
translating our current period results at prior period foreign
currency exchange rates. We also may exclude the impact of foreign
currency translation when making incentive compensation
determinations. As a result, our management believes that these
presentations are useful internally and may be useful to our
investors.
 
 

SEALED AIR CORPORATION

SUPPLEMENTARY INFORMATION

HIGHLIGHTS OF FINANCIAL STATEMENTS

(Unaudited)

(In millions)

                             
Year Ended
December 31,
2016
 
Net sales $ 4,211.3
Earnings from continuing operations before income tax provision 380.7
Cash flow from operating activities 906.9
Adjusted EBITDA from continuing operations 807.6
 
 

SEALED AIR CORPORATION

SUPPLEMENTARY INFORMATION

RECONCILIATION OF U.S. GAAP EARNINGS BEFORE INCOME TAX

PROVISION TO NON-U.S. GAAP TOTAL COMPANY ADJUSTED EBITDA

(Unaudited)

(In millions)

             
Year Ended
December 31,
2016
 
Earnings from continuing operations before income tax provision $ 380.7
Interest expense (199.4 )
Interest income 7.5
Depreciation and amortization (158.1 )
Depreciation and amortization adjustments 5.4
Special Items:
Restructuring and other charges (4.4 )

Other restructuring associated costs included in cost of
  sales
and selling, general and administrative expenses

(20.0 )
SARs (0.7 )

Foreign currency exchange loss related to
  Venezuelan
subsidiaries

(1.6 )
Charges related to ceasing operations in Venezuela (52.7 )
Loss on debt redemption and refinancing activities (0.1 )

Gain (loss) on sale of North American foam trays and
  absorbent
pads business and European food trays
  business

(1.8 )

Loss related to the sale of other businesses,
  investments
and property, plant and equipment

(1.6 )
Charges incurred related to the sale of Diversey (1.4 )
Other   2.0  
Pre-tax impact of Special Items   (82.3 )

Non-U.S. GAAP Total Company Adjusted EBITDA from
  continuing
operations

$ 807.6  

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