Market Overview

Sealed Air Reports Second Quarter Results

Share:
  • Net Earnings from Continuing Operations $83 million (up 187%) or $0.52
    per diluted share (up 271%)
  • Adjusted Earnings from Continuing Operations per diluted share
    increased 88% year-over-year to $0.64
  • Net Sales from Continuing Operations increased 8% year-over-year to
    $1.2 billion
  • Adjusted EBITDA from Continuing Operations increased 11%
    year-over-year to $218 million
  • Acquired AFP, Inc., a leading, U.S.-based fabricator of specialty
    packaging solutions
  • Reaffirm 2018 outlook for Net Sales approx. $4.75 billion, Adjusted
    EBITDA $890 to $910 million, Adjusted EPS $2.45 to $2.55 and Free Cash
    Flow approx. $400 million

Sealed Air Corporation (NYSE:SEE) today announced financial results for
the second quarter 2018. "In the second quarter, Net Sales and Adjusted
EBITDA increased 8% and 11%, respectively. Our differentiated and
innovative solutions portfolio allows us to capitalize on the rapidly
growing fresh food and e-commerce markets. This solid top line
performance combined with our efforts to reduce costs and drive
operational excellence resulted in improved operating leverage for the
second consecutive quarter compared to the same period last year," said
Ted Doheny, President and Chief Executive Officer.

"We are excited to announce the acquisition of AFP, Inc., a leading,
U.S.-based fabricator of specialty packaging solutions. AFP complements
our recent Fagerdala acquisition and expands our design capabilities for
the electronics, transportation and industrial markets. Building on our
first half 2018 results and continued business momentum, we are on track
to deliver our full year objectives despite anticipated currency
headwinds."

Unless otherwise stated, all results compare second quarter 2018 results
to second quarter 2017 results from continuing 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 specified items ("Special Items"), such as
restructuring charges, charges related to the sale of Diversey, gains
and losses related to acquisition and divestiture of businesses, special
tax items ("Tax Special Items") 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.

Business Highlights

Food Care second quarter net sales of $713 million increased 5% as
reported and on a constant dollar basis. The 5% increase was
attributable to favorable price/mix of 3% and volume growth of 2%.
Adjusted EBITDA increased 3% to $135 million or 19.0% of net sales.
Adjusted EBITDA performance was primarily due to favorable mix and
price/cost spread, restructuring savings and positive volume trends
partially offset by higher operating costs. Currency had a $1 million
unfavorable impact on Adjusted EBITDA.

Product Care second quarter net sales of $442 million increased 13% as
reported. Currency had a positive impact on Product Care net sales of
2%, or $8 million. On a constant dollar basis, net sales increased 11%,
including 6%, or $24 million, from Fagerdala, 5% from favorable
price/mix and a slight increase in volume. Adjusted EBITDA increased 13%
to $79 million or 17.8% of net sales. Adjusted EBITDA performance was
primarily attributable to favorable mix and price/cost spread,
restructuring savings and contributions from the Fagerdala acquisition
partially offset by higher operating costs. Currency had a $2 million
favorable impact on Adjusted EBITDA.

From April 1, 2018 through July 31, 2018, Sealed Air repurchased
approximately $125 million or 2.9 million shares bringing the total year
to date share repurchases to approximately $530 million or 11.7 million
shares. The Company has approximately $900 million remaining under the
current share repurchase authorization.

On July 12, 2018, Sealed Air entered into a third amended and restated
syndicated facility agreement whereby its existing revolver was
increased from $700 million to $1.0 billion and existing term loans were
rolled over. The maturity of the new facilities was extended to July
2023 with more favorable terms.

On August 1, 2018, Sealed Air acquired AFP, Inc., a leading, privately
held fabricator of foam, corrugated, molded pulp and wood packaging
solutions. This acquisition expands Sealed Air's protective packaging
solutions in the electronics, transportation and industrial markets with
custom-engineered applications. Acquiring the company will allow Sealed
Air to better position its fabricated foam innovations such as EcoPure,
a sustainable solution made from plant-based resin. AFP generated $125
million in net sales in 2017 and operates six facilities across the U.S.
with further presence in Asia and Mexico.

Second Quarter 2018 U.S. GAAP Summary

Net sales of $1.2 billion increased 8% on an as reported basis. Currency
had a positive impact on total net sales of 1%, or $8 million. As
reported, net sales increased 4% in North America, 7% in Latin America,
10% in EMEA and 22% in Asia Pacific.

Net earnings from continuing operations on an as reported basis was $83
million, or $0.52 per diluted share, which was unfavorably impacted by
$19 million of special items, primarily related to restructuring charges
and charges related to the sale of Diversey. This compares to net
earnings in the second quarter 2017 of $29 million, or $0.14 per diluted
share, which was unfavorably impacted by $40 million of special items,
including $18 million of tax expense and $18 million of pre-tax charges
related the sale of Diversey.

The effective tax rate in the second quarter of 2018 was of 28.7%,
compared to 66.0% in the second quarter of 2017. The 2017 rate was
negatively affected by tax expense related to the sale of Diversey, an
increase in tax related to earnings mix, and the settlement of an audit
in Europe for $3 million.

Second Quarter 2018 Non-U.S. GAAP Summary

On a constant dollar basis, net sales increased 7% reflecting favorable
price/mix of 4%, contribution from the Fagerdala acquisition of 2%, and
an increase in volume of 1%. The Company experienced increased demand
for its differentiated solutions on a global basis. This was partially
offset by a decline in equipment sales, particularly in Food Care North
America due to timing and strong prior year comparable results.
Equipment sales are expected to grow in the second half of the year. By
region, constant dollar sales increased 4% in North America and EMEA,
19% in Latin America, and 20% in Asia Pacific.

Adjusted EBITDA increased 11% to $218 million, or 18.8% of net sales.
This compares to $196 million, or 18.3% of net sales for the second
quarter of 2017. Currency had a favorable $2 million, or 1%, impact on
Adjusted EBITDA in the quarter. The year-over-year margin increase was
primarily attributable to favorable mix and price/cost spread,
restructuring savings and contributions from the Fagerdala acquisition
partially offset by higher operating costs.

Adjusted EPS was $0.64 for the second quarter 2018 compared to $0.34 in
the second quarter 2017. The Adjusted Tax Rate was 22.6% in the second
quarter 2018, compared to 38.9% in the second quarter 2017. The 2017
rate was unfavorably impacted by earnings mix.

Cash Flow and Net Debt

Cash flow provided by operating activities in the six months ended
June 30, 2018 was an inflow of $37 million, which includes the
previously announced one-time payment of $42 million in lieu of future
royalty payments and $33 million of payments related to the sale of
Diversey and efforts to address related stranded costs.

Capital expenditures were $74 million in the six months ended June 30,
2018. Free Cash Flow, defined as net cash provided by operating
activities less capital expenditures and excluding payments related to
the sale of Diversey and efforts to address related stranded costs, was
an outflow of $5 million in the six months ended June 30, 2018.

During the six months ended June 30, 2018, the Company had cash used in
financing activities of $408 million related to share repurchases and
cash dividends of $54 million.

Net Debt, defined as total debt less cash and cash equivalents,
increased to $3.2 billion as of June 30, 2018 from $2.7 billion as of
December 31, 2017. This increase resulted from a use of cash related to
working capital and share repurchases.

Outlook for Full Year 2018

For the full year 2018, Sealed Air anticipates Net Sales to be
approximately $4.75 billion, a constant dollar growth rate of
approximately 7%. This compares to previous guidance of constant dollar
sales growth of 4.5%. The company reaffirms its outlook for Adjusted
EBITDA from continuing operations to be in the range of $890 million to
$910 million. The forecast for Adjusted EPS remains in the range of
$2.45 to $2.55, which is based on 161 million shares outstanding and an
anticipated Adjusted Tax Rate of 28.0%. Full year outlook assumes five
months of contribution from AFP.

Currency headwinds are expected to negatively impact Net Sales and
Adjusted EBITDA by $20 million and $5 million, respectively. This
compares to the prior forecast which assumed a favorable impact from
currency of approximately $110 million on Net Sales and $20 million on
Adjusted EBITDA.

The outlook for Free Cash Flow continues to be approximately $400
million, assuming capital expenditures of approximately $160 million and
cash restructuring payments of approximately $20 million, which excludes
restructuring payments of $30 million to address related stranded costs.

Conference Call Information

Date:   Thursday, August 2, 2018
Time: 10:00 a.m. (ET)
Webcast:

www.sealedair.com/investors

Conference Dial In: (855) 472-5411 (domestic)
(330) 863-3389 (international)
Participant Code: 3293157
 

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

Conference Call Replay Information

Date:   Thursday, August 2, 2018 at 1:00 p.m. (ET) through
Saturday, September 1, 2018 at 1:00 p.m. (ET)
Webcast:

www.sealedair.com/investors

Conference Dial In: (855) 859-2056 (domestic)
(404) 537-3406 (international)
Participant Code: 3293157
 

Business

Sealed Air Corporation is a knowledge-based company focused on packaging
solutions that help 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 and Bubble Wrap® brand cushioning,
enable a safer and less wasteful food supply chain and protect valuable
goods shipped around the world. Sealed Air generated $4.5 billion in
sales in 2017 and has approximately 15,000 employees who serve customers
in 122 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 "Investors" 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 Net Debt, Adjusted Net Earnings and
Adjusted EPS, net sales on a "constant dollar" 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 U.S. GAAP measures to non-U.S.
GAAP measures 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 Net
Earnings and Net Earnings Common Per Share to Non-U.S. GAAP Adjusted Net
Earnings and Non-U.S. GAAP Adjusted Net Earnings Per Common Share,"
"Reconciliation of Net Earnings to Non-U.S. GAAP Total Company Adjusted
EBITDA," "Components of Change in Net Sales by Segment" and "Components
of Changes in Net Sales by Region." Information reconciling
forward-looking U.S. GAAP measures to non-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 restructuring charges, gains
and losses related to acquisition and divestiture of businesses, the
ultimate outcome of certain legal or tax proceedings, 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: global economic and political conditions, currency
translation and devaluation effects, changes in raw material pricing and
availability, competitive conditions, the success of new product
offerings, consumer preferences, the effects of animal and food-related
health issues, pandemics, changes in energy costs, environmental
matters, the success of our restructuring activities, the success of our
financial growth, profitability, cash generation and manufacturing
strategies and our cost reduction and productivity efforts, changes in
our credit ratings, the tax benefit associated with the Settlement
agreement (as defined in our 2017 Annual Report on Form 10-K),
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 because of new information,
future developments or otherwise.

 
Sealed Air Corporation
Supplemental Information

Condensed Consolidated Statements of Operations(1)

 
  Three Months Ended June 30,   Six Months Ended June 30,
(unaudited) (unaudited)
(In millions, except per share data) 2018   2017 2018   2017
Net sales $ 1,155.2 $ 1,070.3 $ 2,286.2 $ 2,102.5
Cost of sales(2)(3) 791.7   726.8   1,548.7   1,423.6  
Gross profit 363.5 343.5 737.5 678.9
Selling, general and administrative expenses(2) 192.8 202.9 386.8 400.3
Amortization expense of intangible assets acquired 3.4 1.1 7.3 6.1
Restructuring and other charges(4) 7.1   1.1   15.7   3.0  
Operating profit 160.2 138.4 327.7 269.5
Interest expense, net (44.5 ) (47.7 ) (86.5 ) (94.3 )
Other income (expense), net(2)(3) 1.1   (5.3 ) (10.9 ) (7.1 )
Earnings before income tax provision 116.8 85.4 230.3 168.1
Income tax provision(4) 33.5   56.4   355.0   192.8  
Net earnings (loss) from continuing operations 83.3 29.0 (124.7 ) (24.7 )
Gain on sale of discontinued operations, net of tax 31.1 38.5
Net earnings from discontinued operations, net of tax(4)(5)   75.1     85.7  
Net earnings (loss) $ 114.4   $ 104.1   $ (86.2 ) $ 61.0  
Basic:
Continuing operations $ 0.52 $ 0.14 $ (0.77 ) $ (0.13 )
Discontinued operations(5) 0.19   0.39   0.24   0.44  
Net earnings (loss) per common share - basic $ 0.71   $ 0.53   $ (0.53 ) $ 0.31  
Diluted:
Continuing operations $ 0.52 $ 0.14 $ (0.77 ) $ (0.13 )
Discontinued operations(5) 0.19   0.38   0.24   0.43  
Net earnings (loss) per common share - diluted $ 0.71   $ 0.52   $ (0.53 ) $ 0.30  
Dividends per common share $ 0.16   $ 0.16   $ 0.32   $ 0.32  
Weighted average number of common shares outstanding:
Basic 159.7   192.5   162.5   192.9  
Diluted 160.6   194.8   162.5   195.3  

________________

(1)     The supplementary information included in this press release for
2018 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) Due to the adoption of ASU 2017-07, certain amounts related to
defined benefit and other post-employment benefit plans were
reclassified from cost of sales and selling, general and
administrative expenses to other expense, net. The total impact for
the three and six months ended June 30, 2017 was $0.6 million and
$1.4 million, respectively.
(3) As part of our review of costs included in the corporate segment,
amounts related to division operations were identified and
reclassified out of other expense, net to cost of sales. This
resulted in a reclassification of $1.3 million and $3.2 million for
the three and six months ended June 30, 2017, respectively.
(4) During the three and six months ended June 30, 2017, a
reclassification of restructuring expenses from continuing
operations to discontinued operations was made for $0.9 million,
approximately $0.6 million net of taxes.
(5) For the three and six months ended June 30, 2017, there was a
revision to net earnings from discontinued operations, net of tax,
related to depreciation and amortization on Diversey assets held for
sale. As a result, net earnings from discontinued operations, net of
tax, increased $16.4 million and increased basic and diluted shares
by $0.09 per share.
 
 
Sealed Air Corporation
Supplemental Information

Condensed Consolidated Balance Sheets(1)

 
  June 30, 2018   December 31,

(In millions)

(unaudited) 2017
Assets
Current assets:
Cash and cash equivalents $ 180.1 $ 594.0
Trade receivables, net 495.5 552.4
Income tax receivables 19.9 85.1
Other receivables 100.0 90.2
Inventories, net 580.2 506.8
Current assets held for sale 0.7 4.0
Prepaid expenses and other current assets 154.6   33.9  
Total current assets 1,531.0 1,866.4
Property and equipment, net 983.7 998.4
Goodwill 1,932.0 1,939.8
Identifiable intangible assets, net 85.6 83.6
Deferred taxes 113.6 176.2
Other non-current assets 213.3   215.9  
Total assets $ 4,859.2   $ 5,280.3  
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings $ 117.1 $ 25.3
Current portion of long-term debt 1.5 2.2
Accounts payable 790.7 723.8
Current liabilities held for sale 2.2
Accrued restructuring costs 20.4 15.4
Income tax payable 64.5 47.3
Other current liabilities 379.9   562.0  
Total current liabilities 1,374.1 1,378.2
Long-term debt, less current portion 3,217.1 3,230.5
Deferred taxes 19.4 28.5
Other non-current liabilities 621.0   490.8  
Total liabilities 5,231.6 5,128.0
Stockholders' equity:
Preferred stock
Common stock 23.2 23.0
Additional paid-in capital 2,035.0 1,939.6
Retained earnings 1,593.2 1,735.2
Common stock in treasury (3,165.0 ) (2,700.6 )
Accumulated other comprehensive loss, net of taxes (858.8 ) (844.9 )
Total stockholders' equity (372.4 ) 152.3  
Total liabilities and stockholders' equity $ 4,859.2   $ 5,280.3  

________________

(1)     The supplementary information included in this press release for
2018 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)

   
June 30, 2018 December 31,
(unaudited) 2017
Short-term borrowings $ 117.1 $ 25.3
Current portion of long-term debt 1.5 2.2
Long-term debt, less current portion 3,217.1   3,230.5  
Total debt 3,335.7 3,258.0
Less: cash and cash equivalents (180.1 ) (594.0 )
Net debt $ 3,155.6   $ 2,664.0  
________________
(1)     The supplementary information included in this press release for
2018 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
Supplemental Information

Condensed Consolidated Statements of Cash Flows(1)

 
  Six Months Ended June 30,
(unaudited)
(In millions) 2018   2017
Net (loss) earnings(1) $ (86.2 ) $ 61.0
Adjustments to reconcile net (loss) earnings to net cash provided by
operating activities(2)
122.0 247.9
Changes in operating assets and liabilities:
Trade receivables, net (24.2 ) (58.3 )
Inventories (92.6 ) (82.8 )
Accounts payable 58.7 145.4
Other assets and liabilities 59.0   (171.9 )
Net cash provided by operating activities $ 36.7   $ 141.3  
Cash flows from investing activities:
Capital expenditures (73.7 ) (93.2 )
Proceeds, net from sale of business and property and equipment 8.3 3.6
Business acquired, net of cash acquired (3.5 )
Investment in cost method investments (7.5 )
Settlement of foreign currency forward contracts (5.3 ) 11.3
Other investing activities (2.6 )  
Net cash used in investing activities $ (80.8 ) $ (81.8 )
Cash flows from financing activities:
Changes in short term borrowings 105.7 252.2
Payments of debt extinguishment costs (0.4 )
Dividends paid on common stock (54.0 ) (61.8 )
Acquisition of common stock for tax withholding (6.1 ) (21.5 )
Repurchases of common stock (407.9 ) (305.3 )
Other financing activities   0.3  
Net cash used in financing activities(3) $ (362.7 ) $ (136.1 )
Effect of foreign currency exchange rate changes on cash and cash
equivalents
$ (7.0 ) $ (12.1 )
Cash and cash equivalents 594.0 333.7
Restricted cash and cash equivalents(3)   52.9  
Balance, beginning of period $ 594.0   $ 386.6  
Net change during the period $ (413.8 ) $ (88.7 )
Cash and cash equivalents 180.1 243.0
Restricted cash and cash equivalents(3)   54.9  
Balance, end of period $ 180.1   $ 297.9  
 
Non-U.S. GAAP Free Cash Flow:
Cash flow from operating activities $ 36.7 $ 141.3
Capital expenditures for property and equipment (73.7 ) (93.2 )
Free Cash Flow(4) $ (37.0 ) $ 48.1  
 
Supplemental Cash Flow Information:
Interest payments, net of amounts capitalized $ 95.6   $ 107.0  
Income tax payments $ 97.1   $ 92.6  
Payments related to the sale of Diversey and efforts to address
related stranded costs(4)
$ 32.5   $ 44.8  
Restructuring payments including associated costs $ 3.7   $ 33.1  
Non-cash items:
Transfers of shares of common stock from treasury for 2017 and 2016
profit-sharing contributions
$ 23.8   $ 22.3  
________________
(1)     The supplementary information included in this press release for
2018 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) 2018 adjustments primarily consists of depreciation and amortization
of $66 million, deferred taxes of $51 million, share based
compensation expense of $15 million and profit sharing expense of
$10 million partially offset by a gain on the sale of Diversey of
$39 million. 2017 adjustments primarily consists of $123 million of
deferred taxes, depreciation and amortization $82 million, share
based compensation expense of $23 million and profit sharing expense
of $13 million.
(3) The Company adopted ASU 2016-18, Restricted Cash, in the current
year. As a result, there was an increase in cash flows from
financing activities of $2 million due to the reclassification of
restricted cash to a change in the total cash balance.
(4) Free cash flow was an outflow of $5 million in 2018 excluding the
payment of charges related to the sale of Diversey and efforts to
address related stranded costs of $33 million.
 
 
Sealed Air Corporation

Supplemental Information(1)

Reconciliation of Net Earnings and Net Earnings per Common Share
to Non-U.S. GAAP Adjusted
Net Earnings and Non-U.S. GAAP Adjusted Net Earnings Per Common
Share
(Unaudited)
 
  Three Months Ended June 30,   Six Months Ended June 30,
2018   2017 2018   2017
(In millions, except per share data)

Net
Earnings

 

Diluted
EPS

Net
Earnings

 

Diluted
EPS

Net
Earnings

 

Diluted
EPS

Net
Earnings

 

Diluted
EPS

U.S. GAAP net earnings (loss) and diluted EPS from continuing
operations
(2)
$ 83.3 $ 0.52 $ 29.0 $ 0.14 $ (124.7 ) $ (0.77 ) $ (24.7 ) $ (0.13 )
Special Items(3) 19.1   0.12   39.5   0.20   312.5   1.92   177.9   0.91  
Non-U.S. GAAP adjusted net earnings and adjusted diluted EPS from
continuing operations
$ 102.4   $ 0.64   $ 68.5   $ 0.34   $ 187.8   $ 1.15   $ 153.2   $ 0.78  
Weighted average number of common shares outstanding - Diluted 160.6   194.8   162.5   195.3  
________________
(1)     The supplementary information included in this press release for
2018 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 (loss) per common share is calculated under the
two-class method.
(3) Special Items include the following:
  Three Months Ended   Six Months Ended
June 30, June 30,
(In millions, except per share data) 2018   2017 2018   2017
Special Items:
Restructuring and other charges $ (7.1 ) $ (1.1 ) $ (15.7 ) $ (3.0 )
Other restructuring associated costs 0.4 (5.9 ) (1.8 ) (9.8 )
Loss on debt redemption (0.4 ) (0.4 )
(Loss) gain on acquisition and divestiture activity (1.2 ) (0.4 ) (5.2 ) 1.9
Charges due to the sale of Diversey (5.8 ) (17.8 ) (12.6 ) (33.9 )
(Loss) gain from class-action litigation settlement (0.1 ) 12.6
Other Special Items(i) (1.3 ) (1.6 ) (1.5 ) 2.6  
Pre-tax impact of Special Items (15.5 ) (26.8 ) (24.6 ) (42.2 )
Tax impact of Special Items and Tax Special Items(ii) (3.6 ) (12.7 ) (287.9 ) (135.7 )
Net impact of Special Items $ (19.1 ) $ (39.5 ) $ (312.5 ) $ (177.9 )
Weighted average number of common shares outstanding - Diluted 160.6 194.8 162.5 195.3
Loss per share impact from Special Items $ (0.12 ) $ (0.20 ) $ (1.92 ) $ (0.91 )
________________
(i)     Other Special Items for the three months ended June 30, 2017
primarily included an expense related to the recovered wage tax
reserve as well as legal fees associated with restructuring and
acquisitions. Other Special Items for the six months ended June 30,
2017 primarily included a reduction in a non-income tax reserve
following the completion of a governmental audit partially offset by
legal fees associated with restructuring and acquisitions.
(ii) 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
June 30,

Six Months Ended
June 30,

(In millions) 2018   2017 2018   2017
U.S. GAAP Earnings before income tax provision from continuing
operations
$ 116.8 $ 85.4 $ 230.3 $ 168.1
Pre-tax impact of special items (15.5 ) (26.8 ) (24.6 ) (42.2 )

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

$ 132.3   $ 112.2   $ 254.9   $ 210.3  
 
U.S. GAAP Income tax provision from continuing operations $ 33.5 $ 56.4 $ 355.0 $ 192.8
Tax Special Items(1) (6.7 ) (21.6 ) (293.9 ) (149.9 )
Tax impact of Special Items 3.1   8.9   6.0   14.2  
Non-U.S. GAAP Adjusted Income tax provision from continuing
operations
$ 29.9   $ 43.7   $ 67.1   $ 57.1  
 
U.S. GAAP Effective income tax rate 28.7 % 66.0 % 154.1 % 114.7 %
Non-U.S. GAAP Adjusted income tax rate 22.6 % 38.9 % 26.3 % 27.2 %
________________
(1)     For the three and six months ended June 30, 2018, the Tax Special
Items included $290 million of provisional tax expense for one-time
tax on unrepatriated foreign earnings pursuant to the Tax Cut and
Jobs Act ("TCJA"). For the three and six months ended June 30, 2017,
Tax Special Items included $18 million and $127 million of tax
expense, respectively, recorded in accordance with the sale of
Diversey.
 
 
Sealed Air Corporation

Supplemental Information(1)

Components of Change in Net Sales by Segment
(Unaudited)
 
  Three Months Ended June 30,
(In millions) Food Care   Product Care   Total Company
2017 Net Sales $ 679.5     63.5 % $ 390.8     36.5 % $ 1,070.3    
Volume - Units 13.1 1.9 % 1.0 0.3 % 14.1 1.3 %
Price/mix(2) 20.4 3.0 % 19.3 4.9 % 39.7 3.7 %
Acquisitions   %

23.6

  6.0 % 23.6   2.2 %
Total constant dollar change (Non-U.S. GAAP)(3) 33.5 4.9 % 43.9 11.2 % 77.4 7.2 %
Foreign currency translation   % 7.5   1.9 % 7.5   0.7 %
Total change (U.S. GAAP) 33.5 4.9 % 51.4 13.1 % 84.9 7.9 %
     
2018 Net Sales $ 713.0   61.7 % $ 442.2   38.3 % $ 1,155.2  
 
 
Six Months Ended June 30,
(In millions) Food Care Product Care Total Company
2017 Net Sales $ 1,335.1 63.5 % $ 767.4 36.5 % $ 2,102.5
Volume - Units 26.0 1.9 % 12.3 1.6 % 38.3 1.8 %
Price/mix(2) 27.9 2.1 % 29.5 3.8 % 57.4 2.7 %
Acquisitions   % 44.8   5.8 % 44.8   2.1 %
Total constant dollar change (Non-U.S. GAAP)(3) 53.9 4.0 % 86.6 11.2 % 140.5 6.6 %
Foreign currency translation 20.3   1.5 % 22.9   3.0 % 43.2   2.1 %
Total change (U.S. GAAP) 74.2 5.5 % 109.5 14.2 % 183.7 8.7 %
     
2018 Net Sales $ 1,409.3   61.6 % $ 876.9   38.4 % $ 2,286.2  
________________
(1)     The supplementary information included in this press release for
2018 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 consider 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

Supplemental Information(1)

Components of Change in Net Sales by Region
(Unaudited)
 
  Three Months Ended June 30,
(In millions) North America   EMEA(2)   Latin America   APAC(3)   Total
2017 Net Sales $ 591.1   55.2 % $ 238.3     22.3 % $ 96.1   9.0 % $ 144.8     13.5 % $ 1,070.3    
Volume - Units (9.5 ) (1.6 )% 5.3 2.2 % 11.1 11.6 % 7.2 5.0 % 14.1 1.3 %
Price/mix(4) 28.1 4.8 % 4.4 1.8 % 7.0 7.3 % 0.2 0.1 % 39.7 3.7 %
Acquisitions 2.1   0.4 %   % 0.5   0.5 % 21.0   14.5 % 23.6   2.2 %
Total constant dollar change (Non-U.S. GAAP)(5) 20.7 3.6 % 9.7 4.0 % 18.6 19.4 % 28.4 19.6 % 77.4 7.2 %
Foreign currency translation 1.6   0.3 % 14.0   5.9 % (11.9 ) (12.4 )% 3.8   2.6 % 7.5   0.7 %
Total change (U.S. GAAP) 22.3 3.9 % 23.7 9.9 % 6.7 7.0 % 32.2 22.2 % 84.9 7.9 %
         
2018 Net Sales $ 613.4   53.1 % $ 262.0   22.7 % $ 102.8   8.9 % $ 177.0   15.3 % $ 1,155.2  
 
  Six Months Ended June 30,
(In millions) North America   EMEA(2)   Latin America   APAC(3)   Total
2017 Net Sales $ 1,154.7     54.9 % $ 458.8     21.8 % $ 192.8   9.2 % $ 296.2   14.1 % $ 2,102.5    
Volume - Units 3.7 0.3 % 10.8 2.4 % 17.7 9.2 % 6.1 2.1 % 38.3 1.8 %
Price/mix(4) 43.7 3.8 % 6.9 1.5 % 7.6 3.9 % (0.8 ) (0.3 )% 57.4 2.7 %
Acquisitions 3.8   0.3 %   % 0.9   0.5 % 40.1   13.5 % 44.8   2.1 %
Total constant dollar change (Non-U.S. GAAP)(5) 51.2 4.4 % 17.7 3.9 % 26.2 13.6 % 45.4 15.3 % 140.5 6.6 %
Foreign currency translation 3.1   0.3 % 43.2   9.4 % (13.2 ) (6.8 )% 10.1   3.4 % 43.2   2.1 %
Total change (U.S. GAAP) 54.3 4.7 % 60.9 13.3 % 13.0 6.8 % 55.5 18.7 % 183.7 8.7 %
         
2018 Net Sales $ 1,209.0   52.9 % $ 519.7   22.7 % $ 205.8   9.0 % $ 351.7   15.4 % $ 2,286.2  
________________
(1)     The supplementary information included in this press release for
2018 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

Supplemental Information(1)

Segment Information

Reconciliation of Net Earnings to Non-U.S. GAAP Total Company
Adjusted EBITDA

(Unaudited)

 
To accelerate productivity improvements and elimination of
operational redundancies, the Company implemented a change in
allocation of Corporate expenses, effective January 1, 2018. These
expenses are now allocated to Food Care and Product Care segments.
For comparison purposes, the Company presented 2017 results to
reflect the revised allocation of these costs. This segment
reporting change has no impact on total Company Adjusted EBITDA.
 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
(In millions) 2018   2017 2018   2017
Net Sales:
Food Care $ 713.0 $ 679.5 $ 1,409.3 $ 1,335.1
As a % of Total Company net sales 61.7 % 63.5 % 61.6 % 63.5 %
Product Care 442.2 390.8 876.9 767.4
As a % of Total Company net sales 38.3 % 36.5 % 38.4 % 36.5 %
Total Company Net Sales $ 1,155.2   $ 1,070.3   $ 2,286.2   $ 2,102.5  
 
 
Three Months Ended
June 30,
Six Months Ended
June 30,
(In millions) 2018 2017 2018 2017
Adjusted EBITDA from continuing operations:
Food Care $ 135.4 $ 131.8 $ 270.1 $ 253.8
Adjusted EBITDA Margin 19.0 % 19.4 % 19.2 % 19.0 %
Product Care 78.5 69.4 156.9 132.7
Adjusted EBITDA Margin 17.8 % 17.8 % 17.9 % 17.3 %
Corporate 3.6   (4.9 ) (4.7 ) (8.3 )
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing
operations
$ 217.5   $ 196.3   $ 422.3   $ 378.2  
Adjusted EBITDA Margin 18.8 % 18.3 % 18.5 % 18.0 %
________________
(1)     The supplementary information included in this press release for
2018 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.
 
   

Three Months Ended
June 30,

Six Months Ended
June 30,
(In millions) 2018   2017 2018   2017
U.S. GAAP Net earnings (loss) from continuing operations $ 83.3 $ 29.0 $ (124.7 ) $ (24.7 )
Interest expense, net (44.5 ) (47.7 ) (86.5 ) (94.3 )
Income tax provision 33.5 56.4 355.0 192.8
Depreciation and amortization(2) (40.8 ) (36.4 ) (81.2 ) (73.6 )
Depreciation and amortization adjustments 0.1 0.3
Special Items:
Restructuring and other charges(3) (7.1 ) (1.1 ) (15.7 ) (3.0 )
Other restructuring associated costs 0.4 (5.9 ) (1.8 ) (9.8 )
Loss on debt redemption (0.4 ) (0.4 )
(Loss) gain on acquisition and divestiture activity (1.2 ) (0.4 ) (5.2 ) 1.9
Charges incurred due to the sale of Diversey (5.8 ) (17.8 ) (12.6 ) (33.9 )
(Loss) gain from class-action litigation settlement (0.1 ) 12.6
Other Special Items(4) (1.3 ) (1.6 ) (1.5 ) 2.6  
Pre-tax impact of Special items (15.5 ) (26.8 ) (24.6 ) (42.2 )
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing
operations
$ 217.5   $ 196.3   $ 422.3   $ 378.2  
________________
(1)     The supplementary information included in this press release for
2018 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 depreciation and amortization previously reclassified to the
Corporate segment has been allocated to the divisions. Depreciation
and amortization by segment are as follows:
 
   
Three Months Ended
June 30,
Six Months Ended
June 30,
(In millions) 2018   2017 2018   2017
Food Care $ 27.2 $ 25.8 $ 54.1 $ 50.5
Product Care 13.6 10.6 27.1 23.1
Total Company depreciation and amortization(i) $ 40.8   $ 36.4   $ 81.2   $ 73.6
________________
(i)     Includes share-based incentive compensation of $7.7 million and
$15.3 million for the three and six months ended June 30, 2018,
respectively, and $10.9 million and $18.9 million for the three and
six months ended June 30, 2017, respectively.
 
(3) Restructuring and other charges by segment is as follows:
  Three Months Ended
June 30,
  Six Months Ended
June 30,
(In millions) 2018   2017 2018   2017
Food Care $ 1.5 $ 0.7 $ 6.1 $ 1.9
Product Care 5.6   0.4   9.6   1.1
Total Company restructuring and other charges $ 7.1   $ 1.1   $ 15.7   $ 3.0
________________
(4)     Other Special Items for the three months ended June 30, 2017
primarily included expense related to the recovered wage tax reserve
as well as legal fees associated with restructuring and
acquisitions. Other Special Items for the six months ended June 30,
2017, primarily included a recovered wage tax as the result of a
court ruling partially offset by legal fees associated with
restructuring and acquisitions.
 

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