- Increased 2014 Adjusted EBITDA by 7.5%
to $1.12 Billion and Generated Free Cash Flow of $612 Million,
excluding the W. R. Grace & Co. Settlement payment
- 2014 Adjusted EPS of $1.86 Increased
34%; Reported EPS of $1.20
- Company provides outlook for 2015 Net
Sales, Adjusted EBITDA, Adjusted EPS and Free Cash Flow
Sealed Air Corporation (NYSE:SEE) today announced financial
results for fourth quarter and full year 2014. Commenting on these
results, Jerome A. Peribere, President and Chief Executive Officer,
said, “2014 was a very strong year for Sealed Air – we generated
over $600 million of Free Cash Flow, expanded Adjusted EBITDA
margins by 90 basis points to 14.4% compared to 2013 and delivered
margin expansion across our three divisions. Despite currency
headwinds in the fourth quarter, we exceeded our expectations
across all key metrics in the quarter and for the year.”
“In 2015, we expect lower input costs combined with our
continued focus on earnings quality improvements to offset
unfavorable currency translation. Our outlook for Adjusted EBITDA
is expected to be in the range of $1.15 billion to $1.18 billion as
compared to 2014 Adjusted EBITDA of $1.12 billion. We will continue
to stay disciplined on our value-added selling approach and ‘Get
Fit and Change the Game’ initiatives, both of which are expected to
contribute to margin expansion. Additionally, we expect to generate
approximately $600 million in Free Cash Flow in 2015,” continued
Mr. Peribere.
Unless otherwise stated, all results compare fourth quarter 2014
results to fourth quarter 2013 results and are presented on a
continuing operations basis. The Rigid Medical Packaging business,
which the Company sold in December 2013, has been presented as
discontinued operations. Reported information is defined as U.S.
GAAP. Year-over-year net sales discussions present both reported
and constant currency performance. Constant currency sales
performance excludes the impact of currency translation.
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 Core Tax Rate,
exclude the impact of special items, such as restructuring charges,
cash-settled stock appreciation rights (“SARs”) granted as part of
the Diversey acquisition and certain other one-time items. Please
refer to the financial statements included with this press release
for a reconciliation of U.S. GAAP to Non-U.S. GAAP financial
measures.
Business and Financial
Highlights
- Food Care net sales of $985 million in
the fourth quarter and $3.8 billion in 2014 increased approximately
3.0% and 3.6% on a constant currency basis, respectively. Favorable
product price/mix was 3.5% in the quarter and 4.0% for the full
year on relatively flat volume in both periods. Currency had a
negative impact on Food Care net sales of 5.7%, or $59 million, in
the fourth quarter and 3.0%, or $117 million, in 2014. Food Care
delivered Adjusted EBITDA margin of 17.5% in the fourth quarter, an
increase of 170 basis points, and 17.5% in 2014, an increase of 140
basis points. These results were attributable to favorable mix and
price/cost spread as well as cost synergies, partially offset by
unfavorable currency translation and higher Selling, General &
Administrative (SG&A) costs.
- Diversey Care delivered positive volume
and favorable price/mix trends in the fourth quarter and for the
full year. Volume and price/mix trends combined with continued
strength in emerging markets resulted in fourth quarter net sales
of $536 million, an increase of 4.1% in constant currency, and 2014
net sales of $2.2 billion, an increase of 3.0% in constant
currency. Currency had a negative impact on Diversey Care net sales
of 5.9%, or $33 million, in the quarter and 2.4%, or $53 million,
in 2014. Diversey Care delivered Adjusted EBITDA margins of 10.9%
in the fourth quarter and 11.3% in 2014. Throughout the year,
Diversey Care’s focus on eliminating low margin business and
implementing cost savings initiatives was offset by investments in
sales and marketing and non-material inflation. Specifically
related to the fourth quarter, Adjusted EBITDA margins were
negatively impacted by unfavorable currency translation and supply
chain costs.
- Product Care net sales of $432 million
in the fourth quarter and $1.7 billion for the full year delivered
constant currency growth of 4.6% and 3.7%, respectively. Favorable
product price/mix was 4.0% in the quarter and 3.5% in 2014 on
relatively flat volume in both periods. Product Care delivered
Adjusted EBITDA margin of 17.9% in the fourth quarter, an increase
of 80 basis points, and 17.7% in 2014, an increase of 120 basis
points. The division’s performance in the quarter and for the year
was attributable to favorable mix and price/cost spread as well as
cost synergies, partially offset by higher SG&A expenses.
- In the fourth quarter 2014, the Company
issued $425 million aggregate principal amount of 4.875% senior
notes due 2022 and $425 million aggregate principal amount of
5.125% senior notes due 2024. Net proceeds from the offering were
used to repurchase $750 million aggregate principal amount of
8.125% senior notes due 2019. The Company amended and restated its
senior secured credit facilities totaling $2.13 billion in July
2014. The amended and restated facilities combined with the senior
notes issuance provided extended maturities, increased covenant
flexibility and reduced interest expense. The Company expects
annualized interest expense savings to be approximately $30
million.
- The Fusion Program (“the Plan”), a new
restructuring program consisting of projects across the Company’s
three divisions and functional support, was approved by the Board
of Directors in December 2014. The Company currently estimates that
it will incur aggregate costs of approximately $275 million to $285
million, of which the net cash cost is expected to be in the range
of $210 million to $220 million. The Plan is expected to be
substantially complete by the end of 2017 and estimated to generate
annualized savings of approximately $80 million to $85 million by
the end of 2018. Details pertaining to the Fusion Program were
previously disclosed in our Current Report on Form 8-K filed with
the Securities and Exchange Commission on December 24, 2014.
Fourth Quarter and Full Year 2014
Summary
Fourth quarter 2014 net sales of $2.0 billion decreased 1.9% on
a reported basis and increased 3.3% in constant currency. For the
full year 2014, net sales totaled $7.8 billion, a reported increase
of 0.8% and 3.2% in constant currency. Favorable product price/mix
was 3.0% in the quarter and 3.2% in 2014 on flat volume. Currency
had a negative impact on net sales of $105 million in the fourth
quarter and $183 million in 2014.
In the fourth quarter 2014, the Company delivered higher sales
across all regions on a constant currency basis as compared with
the fourth quarter 2013. Latin America and Asia, Middle East,
Africa and Turkey (“AMAT”) were the fastest growing regions,
increasing sales by 8.4% and 6.8%, respectively. North America
delivered constant currency net sales growth of 2.3%, Europe
increased 2.2% and Japan, Australia and New Zealand (“JANZ”) was up
0.8%. For the full year 2014, constant currency net sales increased
8.4% for Latin America, 6.9% for AMAT and 2.8% for North America.
Net sales in JANZ increased 1.9% and Europe was up slightly by
0.7%. The Company experienced improving business trends in Europe
throughout the year. Additionally, 2014 net sales from Developing
Regions1, which accounted for 25.7% of net sales, increased 8.1% in
constant currency and were essentially unchanged on an as reported
basis compared to last year.
Adjusted EBITDA for the fourth quarter 2014 was $282 million, or
14.3% of net sales, compared to $270 million, or 13.4% of net
sales, in 2013. The margin increase in the fourth quarter was
primarily attributable to favorable mix and price/cost spread as
well as cost synergies, partially offset by higher SG&A costs
and unfavorable currency translation. The higher SG&A expenses
were partly attributable to an increase of approximately $17
million in performance compensation recorded in the fourth quarter
2014, as compared to the same period a year ago, in recognition of
the strong full year-over-year performance in Adjusted EBITDA,
working capital management and other key financial metrics.
Full year 2014 Adjusted EBITDA was $1.12 billion, or 14.4% of
net sales. This represents a 7.5% increase compared to Adjusted
EBITDA of $1.04 billion in 2013, or 13.5% of net sales. This
increase was primarily due to favorable mix and price/cost spread
and cost synergies, partially offset by higher SG&A costs and
unfavorable currency translation. Incremental cost synergies in
2014 under previously announced restructuring programs were
approximately $97 million and primarily resulted from headcount
reductions, elimination of redundant costs, plant consolidations
and procurement and logistics savings.
On a reported basis, fourth quarter 2014 EPS was $0.31, which
included $0.28 per share of special items primarily consisting of a
loss recorded on the repurchase of 8.125% senior notes and
restructuring and other associated costs. This compares to fourth
quarter 2013 EPS of $0.02, which included $0.37 per share of
special items primarily consisting of a $50 million ($0.23 per
share) increase to the Company’s income tax provision resulting
from an increase in its valuation allowance with respect to the
deferred tax asset related to the W. R. Grace & Co. Settlement
agreement (“Settlement agreement”). Adjusted EPS was $0.59 for the
fourth quarter. This compares to Adjusted EPS of $0.39 in 2013. The
core tax rate was 9.4% in the fourth quarter 2014, compared to
18.8% in the fourth quarter 2013. Our core tax rate in the quarter
benefited from the December enactment of the extenders legislation,
containing certain favorable foreign tax provisions and extending
the research & development credit for the entire year, as well
as favorable earnings mix, with more taxable income than previously
anticipated in low taxed jurisdictions.
For the full year 2014, reported EPS was $1.20, which included
$0.66 per share of special items, mostly due to the loss on the
repurchase of the senior notes, and restructuring and other
associated costs. This compares to full year 2013 reported EPS of
$0.44, which included $0.95 per share of special items, mostly due
to restructuring charges and the increase in the valuation
allowance discussed above. Adjusted EPS for the full year 2014 was
$1.86, as compared to $1.39 in 2013. The core tax rate was 22.1% in
2014, compared to 20.7% in 2013.
The Company repurchased approximately 5.4 million shares of its
common stock in 2014 for $184 million at an average price of $34
per share. This includes 1.5 million shares purchased under a
10b5-1 share trading plan for $54 million at an average price of
$36 per share and approximately 3.9 million shares for $130 million
at an average price of $33 per share purchased from the WRG
Asbestos PI Trust in the second quarter 2014. During the fourth
quarter 2014, the Company repurchased approximately 1.4 million
shares for approximately $50 million, at an average price of $36.
Since January 1, 2015, the Company has repurchased approximately
498,000 shares for $21 million or at an average price of $41 per
share.
Cash Flow and Net Debt
Cash flow used in operating activities in 2014 was $202 million,
which includes the $930 million payment in February 2014 pursuant
to the Settlement agreement and an excess tax benefit of $38
million related to the 18 million shares of Common Stock issued
pursuant to the Settlement agreement. Excluding the Settlement
agreement payment and excess tax benefit, cash flow provided by
operating activities was $766 million, which is net of $108 million
of restructuring and $21 million of SARs payments. This compares
with cash provided by operating activities of $625 million in 2013,
which is net of $107 million of restructuring and $46 million of
SARs payments. Capital expenditures were $154 million in the full
year 2014 compared to $116 million in the full year 2013.
Free Cash Flow, defined as net cash used in operating activities
less capital expenditures, was a use of $356 million in 2014.
Excluding the Settlement agreement payment, accrued interest and
excess tax benefit, Free Cash Flow was a source of $612 million,
compared with a source of $509 million in 2013. The year-over-year
improvement was attributable to higher earnings and working capital
management.
Compared to December 31, 2013, the Company’s net debt decreased
$241 million to $4.1 billion as of December 31, 2014. This decrease
was primarily a result of cash generated from working capital and
operating activities, partially offset by amounts paid for
dividends and share repurchases.
Outlook for Full Year
2015
The Company estimates net sales to be approximately $7.4 billion
for the full year 2015, which assumes an unfavorable impact of
approximately 7% from foreign currency translation. Excluding the
impact of foreign currency translation, on a constant currency
basis, net sales are expected to increase approximately 2.5%.
Adjusted EPS is expected to be in the range of $2.08 to $2.18. This
represents an estimated increase of 12% to 17% compared with 2014
Adjusted EPS of $1.86. Adjusted EPS guidance excludes the impact of
special items. The Company’s core tax rate for 2015 is expected to
increase to approximately 25%.
Adjusted EBITDA is estimated to be in the range of $1.15 billion
to $1.18 billion, including approximately $80 million of
unfavorable currency translation. This compares with 2014 Adjusted
EBITDA of $1.12 billion.
For 2015, the Company anticipates capital expenditures of
approximately $180 million and cash restructuring payments of
approximately $120 million. The Company anticipates 2015 Free Cash
Flow to be approximately $600 million, excluding the tax refund of
approximately $245 million related to the Settlement agreement
payment.
Conference Call
Information
Date:
Tuesday, February 10, 2015
Time:
8:30am (ET)
Webcast:
www.sealedair.com in the Investor Relations section
Conference Dial
In:
(888) 713-4215 (domestic) (617) 213-4867 (international)
Participant
Code:
97306463
Conference Call
Replay Information
Dates:
Tuesday, February 10, 2015 starting at 12:30pm (ET) through
Tuesday, March 17, 2015 at 11:59pm (ET)
Webcast:
www.sealedair.com in the Investor Relations section
Conference Dial
In:
(888) 286-8010 (domestic) (617) 801-6888 (international)
Participant
Code:
90590956
Business
Sealed Air Corporation creates a world that feels, tastes and
works better. In 2014, the Company generated revenue of
approximately $7.8 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, ensures 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
25,000 employees who serve customers in 175 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
SEC 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 EPS, net sales on a "constant dollar" basis, Adjusted Gross
Profit, Adjusted Operating Profit, Free Cash Flow and Adjusted
EBITDA, as our management believes these measures are useful to
investors. We present results and guidance, adjusted to exclude the
effects of certain specified items (“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 Condensed Consolidated Statements of Operations to
Non-U.S. GAAP Adjusted Condensed Consolidated Statements of
Operations and Non-U.S. GAAP Adjusted EBITDA,” “Segment
Information,” and “Components of Change in Net Sales by Segment.”
Information reconciling forward-looking non-U.S. GAAP measures to
U.S. GAAP measures is not available without unreasonable
effort.
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,” “estimates,” “expects,” “intends,”
“may,” “plans to,” “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 expected cash tax benefits
associated with the Settlement agreement (as defined in our 2013
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, 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 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 are
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.
1 Developing Regions are Africa, Asia (excluding Japan and South
Korea), Central and Eastern Europe, and Latin America.
SEALED AIR CORPORATION SUPPLEMENTARY
INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(1) (Unaudited) (In millions, except
per share data) Three Months
Ended Year Ended December 31, December 31,
2014 2013 2014 2013 Revised(2)
Revised(2)
Net sales $ 1,973.7 $
2,012.5 $ 7,750.5 $ 7,690.8 Cost
of sales 1,301.4 1,343.9 5,062.9
5,100.9
Gross profit 672.3
668.6 2,687.6 2,589.9 As a % of total net
sales 34.1 % 33.2 % 34.7 % 33.7 % Selling, general and
administrative expenses(3) 462.7 438.6 1,837.2 1,749.1 As a % of
total net sales 23.4 % 21.8 % 23.7 % 22.7 % Amortization expense of
intangible assets acquired 26.1 30.8 118.9 123.2 Stock appreciation
rights expense(4) 4.9 11.3 8.1 38.1 Integration related costs 0.8
0.4 4.1 1.1 Restructuring and other charges 34.1
12.6 65.7 73.8
Operating profit 143.7 174.9 653.6
604.6 Interest expense (65.6 ) (91.6 ) (287.7 ) (361.0 )
Impairment of equity method investment - - (5.7 ) (2.1 ) Foreign
currency exchange loss related to Venezuelan subsidiaries(5) (1.5 )
(0.2 ) (20.4 ) (13.1 ) Gain from Claims Settlement(6) — — 21.1 —
Loss on debt redemption and refinancing activities(7) (84.0 ) (3.9
) (102.5 ) (36.3 ) Other income (expense), net 2.9
(9.2 ) 8.8 (11.9 )
(Loss) Earnings from continuing
operations before income taxprovision
(4.5 ) 70.0 267.2 180.2 Income
tax (benefit) provision (70.8 ) 65.0
9.1 84.9 Effective income tax rate # % 92.9 %
3.4 % 47.1 %
Net earnings from continuing operations
66.3 5.0 258.1
95.3 Net earnings from discontinued
operations(8) —
24.0 —
30.5 Net earnings available to
common stockholders $ 66.3 $
29.0 $ 258.1 $
125.8 Net earnings per common
share(9):
Basic:
Continuing operations $ 0.31 $ 0.03 $ 1.22 $ 0.49 Discontinued
operations — 0.12 —
0.16
Net earnings per common share - basic
$ 0.31 $ 0.15 $
1.22 $ 0.65 Diluted:
Continuing operations $ 0.31 0.02 $ 1.20 0.44 Discontinued
operations — 0.11 —
0.14
Net earnings per common share - diluted
$ 0.31 $ 0.13 $
1.20 $ 0.58 Dividends per
common share $ 0.13 $ 0.13
$ 0.52 $ 0.52
Weighted average number of common shares outstanding:
Basic 209.5 194.9
210.0 194.6
Diluted 212.1 214.7
213.9 214.2
#
Not meaningful.
(1) The supplementary information included in this press release
for 2014 is preliminary and subject to change prior to the filing
of our upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) During the fourth quarter of 2014, we
changed the method of valuing our inventories that used the Last In
First Out (“LIFO”) method to the First In First Out (“FIFO”)
method, so that all of our inventories are now valued at FIFO. We
applied this change in accounting principle retrospectively.
Accordingly all previously reported financial information has been
revised. The impact of the change on net earnings was not material.
(3) As previously disclosed in our 2013 Annual Report on Form 10-K,
on May 25, 2010, one of our Italian subsidiaries received a demand
from the Italian Ministry of Economic Development (the “Ministry”)
for the total repayment of grant monies paid to two of our former
subsidiaries (a former Product Care business) in the amount of €5
million. Our Italian subsidiary submitted a total denial of
liability in regard to this matter on June 30, 2010. A hearing on
the merits was held on July 3, 2014; in mid-September, our
subsidiary was advised that the demand for repayment of €10 million
was upheld. Accordingly, we have recorded a current liability and
corresponding charge of $14 million ($0.07 per share) related to
this matter. The liability is included in other current liabilities
on the condensed consolidated balance sheets and the charge is
included in SG&A expenses on the condensed consolidated
statements of operations. The charge is treated as a special item
and included in Corporate in the Other category. (4) At December
31, 2014, the remaining amount of unvested cash-settled stock
appreciation rights (“SARs”) will fully vest by March 31, 2015.
However, we will continue to incur expense related to these SARs
until the last expiration date of these awards (March 2021). The
amount of related future expense will fluctuate based on exercise
and forfeiture activity and changes in the assumptions used in the
valuation model, including the price of Sealed Air common stock.
(5) Based on changes to the Venezuelan currency exchange rate
mechanisms, we changed the exchange rate we used to remeasure our
Venezuelan subsidiary’s financial statements into U.S. dollars. As
a result of the change in our excess cash position in our
Venezuelan subsidiaries being remeasured, we recorded a
remeasurement loss of $2 million in the three months ended December
31, 2014 and $20 million in the year ended December 31, 2014. In
February 2013, the Venezuelan government announced a devaluation of
the Bolivar from an official exchange rate of 4.3 to 6.3 bolivars
per U.S. dollar. Due to this devaluation, as of December 31, 2013,
we remeasured our bolivar denominated monetary assets and
liabilities, which resulted in a pretax loss of less than $1
million in the three months ended December 31, 2013 and a $13
million pretax loss in the year ended December 31, 2013. (6) As
previously disclosed in our Quarterly Report on Form 10-Q for the
three months ended March 31, 2014, on February 3, 2014 we funded
the cash consideration ($930 million) and issued the shares
reserved under the Settlement agreement as defined therein. As a
result, we recognized a gain on Claims Settlement of $21 million,
which primarily consisted of the release of certain tax and other
liabilities. (7) In November 2014, we issued $425 million of 4.875%
senior notes and $425 million of 5.125% notes and used
substantially all of the proceeds to retire the 8.125% Senior Notes
due September 2019. We repurchased the 8.125% Senior Notes at fair
value. The aggregate repurchase price was $837 million, which
included the principal amount of $750 million, premium of $75
million and accrued interest of $13 million. We recognized a total
net pre-tax loss of $84 million in the three months ended December
31, 2014, which included the premiums mentioned above. Also
included in the loss on debt redemption was $9 million of
accelerated amortization of original non-lender fees related to the
8.125% senior notes. (8) In December 2013, we completed the sale of
our rigid medical packaging business for net cash proceeds of $122
million. Our 2013 results include a net gain of $23 million from
the sale of our medical rigid packaging business. The financial
result of the rigid medical packaging business is reported as
discontinued operations, net of tax. (9) Net earnings per common
share is calculated under two-class method. See our Quarterly
Report on Form 10-Q for period ended September 30, 2014 for further
details.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED BALANCE
SHEETS(1)
(Unaudited)
(In millions)
December 31, December 31, 2014
2013 Revised(2)
Assets Current assets: Cash and cash
equivalents $ 322.6 $ 992.4 Trade receivables, net(3) 1,002.2
1,126.4 Other receivables 404.1 147.9 Inventories 707.6 730.2
Assets held for sale(4) 27.3 — Other current assets 227.8
462.6
Total current assets
2,691.6 3,459.5 Property and equipment, net 993.2
1,134.5 Goodwill 3,005.5 3,114.6 Intangible assets, net 872.2
1,016.9 Other assets, net 479.2 450.5
Total assets $ 8,041.7 $
9,176.0 Liabilities and stockholders' equity
Current liabilities: Short-term borrowings $ 130.4 $ 81.6 Current
portion of long-term debt 1.1 201.5 Accounts payable 638.7 524.5
Settlement agreement and related accrued interest(5) — 925.1 Other
current liabilities 960.7 968.1
Total current liabilities 1,730.9 2,700.8
Long-term debt, less current portion 4,282.5 4,116.4 Other
liabilities 865.5 942.5
Total
liabilities 6,878.9 7,759.7
Total parent company stockholders' equity 1,162.8 1,414.9
Noncontrolling interests — 1.4
Total
stockholders' equity 1,162.8
1,416.3 Total liabilities and stockholders'
equity $ 8,041.7 $ 9,176.0
CALCULATION OF NET DEBT
(1)
December 31, December 31, 2014
2013 Short-term borrowings $ 130.4 $ 81.6
Current portion of long-term debt 1.1 201.5 Settlement agreement
and related accrued interest(5) — 925.1 Long-term debt, less
current portion 4,282.5 4,116.4 Total
debt 4,414.0 5,324.6 Less: cash and cash equivalents (322.6
) (992.4 )
Net debt $ 4,091.4
$ 4,332.2 (1) The
supplementary information included in this press release for 2014
is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) During the fourth quarter of 2014, we
changed the method of valuing our inventories that used the LIFO
method to the FIFO method, so that all of our inventories are now
valued at FIFO. We applied this change in accounting principle
retrospectively. Accordingly all previously reported financial
information has been revised. The change from LIFO to FIFO resulted
in an increase to inventories of $42 million as of December 31,
2013. The impact of the change to net earnings was not material.
(3) As of December 31, 2014, we had $36 million of borrowings
outstanding under our accounts receivable securitization programs,
and accordingly, the trade receivables that serve as collateral
under these borrowings were reclassified from trade receivables,
net to other current assets. (4) In August 2014, we signed an
agreement for purchase and sale relating to our building located in
Racine, Wisconsin. As of December 31, 2014, the building and
certain related assets met the criteria of assets held for sale
classification. Accordingly, we reclassified $26 million from
property, plant and equipment to assets held for sale as of
December 31, 2014. (5) As previously disclosed in our Quarterly
Report on Form 10-Q for the three months ended March 31, 2014, on
February 3, 2014 we funded the cash consideration and issued the
shares reserved under the Settlement agreement.
SEALED AIR CORPORATION SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(1)
(Unaudited) (In millions) Year Ended
December 31, 2014 2013 Revised(2) Net earnings
available to common stockholders - continuing operations $ 258.1 $
95.3
Adjustments to reconcile net earnings to
net cash (used in) provided by operatingactivities - continuing
operations(3)
417.2 418.6 Changes in: Trade receivables, net (21.1 ) 35.5
Inventories (48.6 ) 22.0 Accounts payable 159.4 36.3 Settlement
agreement, related accrued interest and excess tax benefit (4)
(967.4 ) — Changes in all other operating assets and liabilities
0.5 17.1
Cash flow (used in)
provided by operating activities - continuing operations
(201.9 ) 624.8 Capital expenditures for
property and equipment (153.9 ) (116.0 ) Other investing activities
12.4 10.5
Cash flow used in
investing activities - continuing operations (141.5
) (105.5 ) Net proceeds from (payments
of) short-term borrowings and long-term debt(5) 51.9 (180.0 )
Repurchase of common stock (184.0 ) — Dividends paid on common
stock (110.9 ) (102.0 ) Excess tax benefit from Common Stock issued
in the Settlement agreement 37.7 — Acquisition of common stock for
tax withholding obligations under our Omnibus stock plan (3.0 )
(3.9 ) Payments of debt issuance costs (24.9 ) (7.7 ) Payments of
debt extinguishment costs (74.0 ) (26.2 ) Proceeds of termination
of interest rate swaps 3.1 —
Cash
flow used in financing activities - continuing operations
(304.1 ) (319.8 ) Cash flow
from discontinued operations, including net gain(5)
— 127.0 Effect
of foreign currency exchange rates on cash and cash equivalents
(22.3 ) (13.7 )
Cash and cash equivalents beginning of period $
992.4 $ 679.6 Net change in cash and cash
equivalents (669.8 ) 312.8
Cash and cash
equivalents end of period $ 322.6 $
992.4 Non-U.S. GAAP Free Cash Flow:
Cash flow from operating activities - continuing operations(4) $
(201.9 ) $ 624.8 Capital expenditures for property and equipment
(153.9 ) (116.0 )
Free Cash Flow(6)
$
(355.8 ) $ 508.8 Settlement agreement
and related accrued interest (4) 967.4 -
Free Cash Flow excluding Settlement agreement and related
accrued interest $ 611.6 $
508.8 Additional Cash Flow Information:
Interest payments, net of amounts capitalized(7) $ 710.4 $
289.7 Income tax payments $ 89.2 $ 114.8 SARs
payments (less amounts included in restructuring payments) $ 21.1
$ 46.0 Restructuring payments (including associated
costs) $ 108.1 $ 107.0 (1) The
supplementary information included in this press release for 2014
is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) During the fourth quarter of 2014, we
changed the method of valuing our inventories that used the LIFO
method to the FIFO method, so that all of our inventories are now
valued at FIFO. We applied this change in accounting principle
retrospectively. Accordingly all previously reported financial
information has been revised. The impact of the change to net
earnings was not material. (3) 2014 primarily consists of
depreciation and amortization of $321 million, profit sharing
expense of $37 million, and loss on debt redemption and refinancing
activities of $102 million, partially offset by gain on Settlement
agreement of $(21) million. 2013 primarily consists of depreciation
and amortization of $308 million, loss on debt redemption of $36
million and profit sharing expense of $35 million. (4) In February
2014, we used $930 million of cash to fund the cash portion of the
Settlement agreement and related accrued interest. To fund the cash
payment, we used $555 million of cash and cash equivalents and
utilized borrowings of $260 million from our revolving credit
facility and $115 million from our accounts receivable
securitization programs. In December 2014, we recorded an excess
tax benefit of $38 million related to the 18 million shares of
Common Stock issued in the Settlement agreement. (5) In December
2013, we completed the sale of our rigid medical packaging business
for net cash proceeds of $122 million. Our 2013 results include a
net gain of $23 million from the sale of our medical rigid
packaging business. The financial result of the rigid medical
packaging business is reported as discontinued operations, net of
tax. (6) 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. (7) Interest payments in 2014 include
$417 million related to the Settlement agreement.
SEALED AIR CORPORATION SUPPLEMENTARY INFORMATION
RECONCILIATION OF U.S. GAAP CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS TO
NON-U.S. GAAP ADJUSTED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND
NON-U.S. GAAP ADJUSTED
EBITDA(1)
(Unaudited) (In millions, except per share data)
Three Months Ended
December 31, 2014 2013
U.S.
GAAPAsReported
Less:SpecialItems(2)
Non-U.S.GAAPAdjusted
U.S.
GAAPAsReported
Less:SpecialItems(2)
Non-U.S.GAAPAdjusted
Revised(3) Revised(3)
Net sales $ 1,973.7
$ — $ 1,973.7 $ 2,012.5
$ — $ 2,012.5 Cost of sales
1,301.4 (4.5 ) 1,296.9 1,343.9
(1.7 ) 1,342.2
Gross profit
672.3 4.5 676.8 668.6 1.7
670.3 As a % of total net sales 34.1 % 34.3 % 33.2 % 33.3 %
Selling, general and administrative expenses 462.7 (12.2 ) 450.5
438.6 (5.5 ) 433.1 As a % of total net sales 23.4 % 22.8 % 21.8 %
21.5 % Amortization expense of intangible assets acquired 26.1
— 26.1 30.8
— 30.8 Stock appreciation rights expense
4.9 (4.9 )
— 11.3 (11.3 )
— Integration related costs
0.8 (0.8 )
— 0.4 (0.4 )
— Restructuring and other
charges 34.1 (34.1 ) —
12.6 (12.6 ) —
Operating profit
143.7 56.5 200.2 174.9 31.5
206.4 As a % of total net sales 7.3 % 10.1 % 8.7 % 10.3 %
Interest expense (65.6 ) — (65.6 ) (91.6 ) — (91.6 )
Foreign currency exchange loss related
toVenezuelan subsidiaries
(1.5 ) 1.5 — (0.2 ) 0.2 — Loss on debt redemption and refinancing
activities (84.0 ) 84.0 — (3.9 ) 3.9 — Other income (expense), net
2.9 1.3 4.2 (9.2 )
(0.3 ) (9.5 )
(Loss) earnings from continuing
operationsbefore income tax provision
(4.5 ) 143.3 138.8 70.0
35.3 105.3 Income tax (benefit) provision
(70.8 ) 83.9 13.1 65.0
(45.2 ) 19.8 Effective income tax rate # % 9.4
% 92.9 % 18.8 %
Net earnings from continuing operations
66.3 59.4 125.7 5.0 80.5
85.5 Net earnings from discontinued operations(4) —
— — 24.0
(24.0 ) —
Net earnings available to common
stockholders $ 66.3 $ 59.4
$ 125.7 $ 29.0
$ 56.5 $ 85.5 Net
earnings per common share(5): Diluted:
Continuing operations $ 0.31 $ 0.28 $ 0.59 $ 0.02 $ 0.37 $ 0.39
Discontinued operations — — —
0.11 (0.11 ) —
Net earnings per common share -
diluted
$ 0.31 $ 0.28 $
0.59 $ 0.13 $ 0.26
$ 0.39
Weighted average number of common
sharesoutstanding:
Diluted 212.1 212.1
212.1 214.7
214.7 214.7 Non-U.S. GAAP
Adjusted EBITDA: Non-U.S. GAAP Adjusted Operating Profit
$ 200.2 $ 206.4 Other income (expense),
net 4.2 (9.5 ) Depreciation and amortization(6) 79.0 73.5
Write down of non-strategic assets,
included indepreciation and amortization
(1.8 ) (0.3 )
Non-U.S. GAAP Adjusted EBITDA
$ 281.6 $ 270.1 As a % of
total net sales 14.3 % 13.4 %
#
Not meaningful.
(1) The supplementary information included in this press release
for 2014 is preliminary and subject to change prior to the filing
of our upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2)
Special items consist of certain one-time
costs or charges/credits that are included in our U.S. GAAP
reported results. These special items include restructuring and
other associated costs related to our previously announced Fusion
program (“Fusion”), Earnings Quality Improvement Program (“EQIP”)
and the Integration and Optimization Program (“IOP”) restructuring
programs, foreign currency exchange losses related to Venezuelan
subsidiaries and stock appreciation rights (“SARs”) expense, and
losses recorded on debt redemption and refinancing activities.
(3) During the fourth quarter of 2014, we changed the method of
valuing our inventories that used the LIFO method to the FIFO
method, so that all of our inventories are now valued at FIFO. We
applied this change in accounting principle retrospectively.
Accordingly all previously reported financial information has been
revised. The impact of the change to net earnings to net earnings
was not material. (4) In December 2013, we completed the sale of
our rigid medical packaging business for net cash proceeds of $122
million. Our 2013 results include a net gain of $23 million from
the sale of our medical rigid packaging business. The financial
result of the rigid medical packaging business is reported as
discontinued operations, net of tax. (5) Net earnings per common
share is calculated under two-class method. See our Quarterly
Report on Form 10-Q for period ended September 30, 2014 for further
details. (6)
Depreciation and amortization
includes:
Three Months Ended December
31, 2014 2013 Depreciation of property,
plant and equipment $ 35.6 $ 38.9 Amortization of intangible assets
acquired 26.1 30.8 Amortization of deferred share-based
compensation 17.3 3.8
Total $
79.0 $ 73.5 SEALED AIR
CORPORATION SUPPLEMENTARY INFORMATION RECONCILIATION
OF U.S. GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS TO
NON-U.S. GAAP ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND NON-U.S. GAAP ADJUSTED EBITDA(1)
(Unaudited) (In millions, except per share data)
Year Ended
December 31, 2014 2013
U.S.
GAAPAsReported
Less:SpecialItems(4)
Non-U.S.GAAPAdjusted
U.S.
GAAPAsReported
Less:SpecialItems(4)
Non-U.S.GAAPAdjusted
Revised(3) Revised(3)
Net sales $ 7,750.5
$ — $ 7,750.5 $ 7,690.8
$ — $ 7,690.8 Cost of sales
5,062.9 (12.6 ) 5,050.3 5,100.9
(7.4 ) 5,093.5
Gross profit
2,687.6 12.6 2,700.2 2,589.9 7.4
2,597.3 As a % of total net sales 34.7 % 34.8 % 33.7 % 33.8
% Selling, general and administrative expenses(2) 1,837.2 (42.0 )
1,795.2 1,749.1 (24.7 ) 1,724.4 As a % of total net sales 23.7 %
23.2 % 22.7 % 22.4 % Amortization expense of intangible assets
acquired 118.9
— 118.9 123.2
— 123.2 Stock
appreciation rights expense 8.1 (8.1 )
— 38.1 (38.1 )
— Integration related costs 4.1 (4.1 )
— 1.1 (1.1 )
— Restructuring and other charges 65.7
(65.7 ) — 73.8 (73.8 ) —
Operating profit 653.6 132.5
786.1 604.6 145.1 749.7 As a % of total
net sales 8.4 % 10.1 % 7.9 % 9.7 % Interest expense (287.7 ) —
(287.7 ) (361.0 ) — (361.0 ) Impairments of equity method
investment (5.7 ) 5.7 — (2.1 ) 2.1 —
Foreign currency exchange loss related to
Venezuelansubsidiaries
(20.4 ) 20.4 — (13.1 ) 13.1 — Gain from Claims Settlement 21.1
(21.1 ) — — — — Loss on debt redemption and refinancing activities
(102.5 ) 102.5 — (36.3 ) 36.3 — Other income (expense), net
8.8 4.7 13.5 (11.9 )
0.5 (11.4 )
Earnings from continuing operations
before income tax provision
267.2 244.7 511.9 180.2 197.1
377.3 Income tax provision 9.1 103.9
113.0 84.9 (6.7 )
78.2 Effective income tax rate 3.4 % 22.1 % 47.1 % 20.7 %
Net earnings from continuing operations 258.1
140.8 398.9 95.3 203.8 299.1 Net
earnings from discontinued operations(5) — —
— 30.5 (30.5 ) —
Net earnings available to common stockholders
$ 258.1 $ 140.8 $
398.9 $ 125.8 $
173.3 $ 299.1 Net earnings
per common share(6): Diluted: Continuing
operations $ 1.20 $ 0.66 $ 1.86 $ 0.44 $ 0.95 $ 1.39 Discontinued
operations — — —
0.14 (0.14 ) —
Net earnings per common share -
diluted
$ 1.20 $ 0.66 $
1.86 $ 0.58 $ 0.81
$ 1.39
Weighted average number of common
sharesoutstanding:
Diluted 213.9 213.9
213.9 214.2
214.2 214.2 Non-U.S. GAAP
Adjusted EBITDA: Non-U.S. GAAP Adjusted Operating Profit
$ 786.1 $ 749.7 Other income (expense),
net 13.5 (11.4 ) Depreciation and amortization(7) 320.8 307.5
Write down of non-strategic assets,
included indepreciation and amortization
(2.1 ) (5.3 )
Non-U.S. GAAP Adjusted EBITDA
$ 1,118.3 $ 1,040.5 As a
% of total net sales 14.4 % 13.5 % (1) The
supplementary information included in this press release for 2014
is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) As previously disclosed in our 2013 Annual
Report on Form 10-K, on May 25, 2010, one of our Italian
subsidiaries received a demand from the Italian Ministry of
Economic Development (the “Ministry”) for the total repayment of
grant monies paid to two of our former subsidiaries (a former
Product Care business) in the amount of €5 million. Our Italian
subsidiary submitted a total denial of liability in regard to this
matter on June 30, 2010. A hearing on the merits was held on July
3, 2014; in mid-September, our subsidiary was advised that the
demand for repayment of €10 million was upheld. Accordingly, we
have recorded a current liability and corresponding charge of $14
million ($0.07 per share) related to this matter. The liability is
included in other current liabilities on the condensed consolidated
balance sheets and the charge is included in selling, general and
administrative expenses on the condensed consolidated statements of
operations. The charge is treated as a special item and included in
Corporate in the Other category. (3) During the fourth quarter of
2014, we changed the method of valuing our inventories that used
the LIFO method to the FIFO method, so that all of our inventories
are now valued at FIFO. We applied this change in accounting
principle retrospectively. Accordingly all previously reported
financial information has been revised. The impact of the change to
net earnings was not material. (4) Special items consist of certain
one-time costs or charges/credits that are included in our U.S.
GAAP reported results. These special items include restructuring
and other associated costs related to our previously announced
Fusion, EQIP and IOP restructuring programs, foreign currency
exchange losses related to Venezuelan subsidiaries, losses recorded
on debt redemption and refinancing activities and stock
appreciation rights (“SARs”) expense and, in 2014, the gain from
Claims Settlement and the development grant matter. (5) In December
2013, we completed the sale of our rigid medical packaging business
for net cash proceeds of $122 million. Our 2013 results include a
net gain of $23 million from the sale of our medical rigid
packaging business. The financial result of the rigid medical
packaging business is reported as discontinued operations, net of
tax. (6) Net earnings per common share is calculated under
two-class method. See our Quarterly Report on Form 10-Q for period
ended September 30, 2014 for further details. (7) Depreciation and
amortization includes:
Year
Ended December 31, 2014 2013 Depreciation
of property, plant and equipment $ 147.8 $ 160.2 Amortization of
intangible assets acquired 118.9 123.2 Amortization of deferred
share-based compensation 54.1 24.1
Total
$ 320.8 $ 307.5 SEALED
AIR CORPORATION SUPPLEMENTARY INFORMATION SEGMENT
INFORMATION(1) (Unaudited)
Three Months Ended Year Ended
December 31, % December 31, %
2014
2013
Change 2014 2013 Change
Revised(2)
Revised(2)
Net Sales: Food Care $ 985.4 $ 1,013.1 (2.7 )% $
3,835.3 $ 3,814.2 0.6 % As a % of Total Company net sales 49.9 %
50.3 % 49.5 % 49.6 % Diversey Care 535.9 545.9 (1.8 )% 2,173.1
2,160.8 0.6 % As a % of Total Company net sales 27.2 % 27.1 % 28.0
% 28.1 % Product Care 431.9 424.9 1.6 % 1,655.0 1,610.0 2.8 % As a
% of Total Company net sales 21.9 % 21.1 %
21.4 % 20.9 %
Total Reportable Segments Net
Sales 1,953.2 1,983.9 (1.5 )%
7,663.4 7,585.0 1.0 % Other 20.5
28.6 (28.3 )% 87.1 105.8
(17.7 )%
Total Company Net Sales $ 1,973.7
$ 2,012.5 (1.9 )%
$ 7,750.5 $ 7,690.8
0.8 %
Three Months Ended Year
Ended December 31, % December 31, %
2014 2013 Change 2014 2013
Change Revised(2) Revised(2)
Adjusted EBITDA: Food
Care $ 172.2 $ 160.2 7.5 % $ 670.2 $ 614.7 9.0 % Adjusted EBITDA
Margin 17.5 % 15.8 % 17.5 % 16.1 % Diversey Care 58.3 60.7 (4.0 )%
245.0 237.3 3.2 % Adjusted EBITDA Margin 10.9 % 11.1 % 11.3 % 11.0
% Product Care 77.2 72.8 6.0 % 292.7 266.3 9.9 % Adjusted EBITDA
Margin 17.9 % 17.1 % 17.7 % 16.5
%
Total Reportable Segments
AdjustedEBITDA
307.7 293.7 4.8 %
1,207.9
1,118.3 8.0 % Other (26.1 ) (23.6 )
10.6 % (89.6 ) (77.8 ) 15.2 %
Non-U.S. GAAP Total
CompanyAdjusted EBITDA
$ 281.6 $ 270.1
4.3 %
$ 1,118.3 $ 1,040.5
7.5 % Adjusted EBITDA Margin 14.3 % 13.4 % 14.4 %
13.5 % (1) As previously announced, effective as of
January 1, 2014, the Company changed its segment reporting
structure in order to reflect the way management now makes
operating decisions and manages the growth and profitability of the
business. See our Current Report on Form 8-K filed with the SEC on
April 16, 2014 for further details. The supplementary information
included in this press release for 2014 is preliminary and subject
to change prior to the filing of our upcoming Annual Report on Form
10-K with the Securities and Exchange Commission. (2) During the
fourth quarter of 2014, we changed the method of valuing our
inventories that used the LIFO method to the FIFO method, so that
all of our inventories are now valued at FIFO. We applied this
change in accounting principle retrospectively. Accordingly all
previously reported financial information has been revised. The
impact of the change to net earnings was not material.
SEALED AIR CORPORATION SEGMENT INFORMATION -
CONTINUED SUPPLEMENTARY INFORMATION(1)
RECONCILIATION OF NON-U.S. GAAP TOTAL
COMPANY ADJUSTED EBITDA TO
U.S. GAAP NET EARNINGS FROM CONTINUING
OPERATIONS
(Unaudited) Three
Months Ended Year Ended December 31, December
31, 2014 2013 2014 2013
Revised(2)
Revised(2)
Non-U.S. GAAP Total Company Adjusted EBITDA
$ 281.6 $ 270.1 $ 1,118.3
$ 1,040.5 Depreciation and amortization (3) (79.0 )
(73.5 ) (320.8 ) (307.5 ) Special items(4):
Write down of non-strategic assets
included in depreciationand amortization
1.8 0.3 2.1 5.3 Restructuring and other charges(5) (34.1 ) (12.6 )
(65.7 ) (73.8 )
Other restructuring associated costs
included in cost ofsales and selling, general and administrative
expenses
(10.9 ) (7.1 ) (34.2 ) (32.0 )
Development grant matter included in
selling, general andadministrative expenses(6)
— — (14.0 ) — Termination of licensing agreement (5.3 ) — (5.3 ) —
Relocation costs included in selling,
general and administrativeexpenses
(1.9 ) — (2.4 ) — SARs (4.9 ) (11.3 ) (8.1 ) (38.1 ) Integration
related costs (0.8 ) (0.4 ) (4.1 ) (1.1 ) Impairments of equity
method investment — — (5.7 ) (2.1 )
Foreign currency exchange (loss) gains
related toVenezuelan subsidiaries
(1.5 ) (0.2 ) (20.4 ) (13.1 ) Loss on debt redemption and
refinancing activities (84.0 ) (3.9 ) (102.5 ) (36.3 ) Gain from
Claims Settlement in 2014 and related costs (0.2 ) (0.4 ) 20.3 (1.0
)
Non-operating charge for contingent
guarantee included inother income (expense), net
— — (2.5 ) — Other income (expense), net 0.3 0.6 (0.1 ) 0.4
Interest expense (65.6 ) (91.6 ) (287.7 ) (361.0 ) Income tax
(benefit) provision (70.8 ) 65.0 9.1
84.9
U.S. GAAP net earnings from continuing
operations $ 66.3 $ 5.0
$ 258.1 $ 95.3
(1) The supplementary information included in
this press release for 2014 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) During the fourth
quarter of 2014, we changed the method of valuing our inventories
that used the LIFO method to the FIFO method, so that all of our
inventories are now valued at FIFO. We applied this change in
accounting principle retrospectively. Accordingly all previously
reported financial information has been revised. The impact of the
change to net earnings was not material. (3) Depreciation and
amortization by segment is as follows:
Three Months Ended Year Ended
December 31, December 31, 2014 2013
2014 2013 Revised(2) Revised(2) Food Care $ 29.2 $
29.1 $ 121.3 $ 118.4 Diversey Care 27.3 33.3 126.3 132.3 Product
Care 10.7 9.4 41.4 38.2
Total
reportable segments 67.2 71.8 289.0
288.9 Other 11.8 1.7 31.8 18.6
Total Company depreciation and amortization $
79.0 $ 73.5 $ 320.8
$
307.5
(4) Includes items we consider unusual or special
items. See Note 2 of “Reconciliation of U.S. GAAP Condensed
Consolidated Statements of Operations to Non-U.S. GAAP Adjusted
Condensed Consolidated Statements of Operations and Non-U.S. GAAP
Adjusted EBITDA,” for further information. (5) Restructuring and
other charges by segment is as follows:
Three Months Ended
Year Ended
December 31,
December 31, 2014 2013 2014
2013 Revised(2) Revised(2) Food Care $ 14.4 $ 5.2 $
27.3 $ 25.1 Diversey Care 12.3 5.9 24.3 32.2 Product Care
7.3 2.8 13.6 16.4
Total reportable
segments 34.0 13.9 65.2 73.7 Other
0.1 (1.3 ) 0.5 0.1
Total Company
restructuring and other charges $ 34.1 $
12.6 $ 65.7 $ 73.8
(6) As previously disclosed in our 2013 Annual Report on
Form 10-K, on May 25, 2010, one of our Italian subsidiaries
received a demand from the Italian Ministry of Economic Development
(the “Ministry”) for the total repayment of grant monies paid to
two of our former subsidiaries (a former Product Care business) in
the amount of €5 million. Our Italian subsidiary submitted a total
denial of liability in regard to this matter on June 30, 2010. A
hearing on the merits was held on July 3, 2014; in mid-September,
our subsidiary was advised that the demand for repayment of €10
million was upheld. Accordingly, we have recorded a current
liability and corresponding charge of $14 million ($0.07 per share)
related to this matter. The liability is included in other current
liabilities on the condensed consolidated balance sheets and the
charge is included in selling, general and administrative expenses
on the condensed consolidated statements of operations. The charge
is treated as a special item and included in Corporate in the Other
category.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION COMPONENTS OF CHANGE IN NET
SALES BY SEGMENT(1) (Unaudited) (In
millions) Three Months
Ended December 31 Food Care Diversey Care
Product Care Other
TotalCompany
2013 Net Sales $ 1,013.1 $ 545.9 $ 424.9 $ 28.6 $ 2,012.5
Volume - Units (4.9 ) (0.5 ) % 13.3 2.4 % 2.4 0.6 % (5.8 ) (20.4 )
% 5.0 0.3 % Product price/mix (2) 35.7 3.5 %
9.3 1.7 % 17.1 4.0 (1.1 ) (3.8 ) %
61.0 3.0 %
Total constant dollar change
(Non-U.S.GAAP)(3)
30.8 3.0 % 22.6 4.1 %
19.5 4.6 % (6.9 ) (24.2
) % 66.0 3.3 % Foreign currency
translation (58.5 ) (5.7 ) % (32.6 ) (5.9 ) %
(12.5 ) (3.0 ) (1.2 ) (4.1 ) % (104.8 ) (5.2 ) %
Total change (U.S. GAAP) (27.7 )
(2.7 ) % (10.0 )
(1.8 ) % 7.0 1.6
% (8.1 ) (28.3 ) %
(38.8 ) (1.9 ) %
2014 Net Sales $
985.4 $ 535.9 $ 431.9 $
20.5 $ 1,973.7 Year Ended
December 31 Food Care Diversey Care Product
Care Other
TotalCompany
2013 Net Sales $ 3,814.2 $ 2,160.8 $ 1,610.0 $ 105.8 $ 7,690.8
Volume - Units (16.1 ) (0.4 ) % 27.4 1.3 % 2.6 0.2 % (20.3 )
(19.2 ) % (6.4 ) — % Product price/mix (2) 154.2 4.0
% 37.4 1.7 % 55.7 3.5 % 2.1 2.0
% 249.4 3.2 %
Total constant dollar change
(Non-U.S.GAAP)(3)
138.1 3.6 % 64.8 3.0 %
58.3 3.7 % (18.2 ) (17.2
) % 243.0 3.2 % Foreign currency
translation (117.0 ) (3.0 ) % (52.5 ) (2.4 ) %
(13.3 ) (0.9 ) % (0.5 ) (0.5 ) % (183.3 ) (2.4 ) %
Total change (U.S. GAAP) 21.1 0.6
% 12.3 0.6 %
45.0 2.8 % (18.7
) (17.7 ) % 59.7
0.8 %
2014 Net Sales $ 3,835.3 $
2,173.1 $ 1,655.0 $ 87.1
$ 7,750.5 (1) The results above
are presented on a continuing operations basis, excluding our rigid
medical packaging business, which we sold in December 2013. The
supplementary information included in this press release for 2014
is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) Our product 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 product 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) Changes in these items
excluding the impact of foreign currency translation are non-U.S.
GAAP financial measures. 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) Unaudited (In millions)
Three Months Ended
December 31
NorthAmerica
Europe
LatinAmerica
AMAT(2)
JANZ(3)
Total
2013 Net Sales $ 772.9 $ 652.9 $ 218.5 $ 209.6 $ 158.6 $ 2,012.5
Volume - Units (3.4 ) (0.4 ) % 5.8 0.9 % (5.4 ) (2.5 ) % 7.4
3.5 % 0.6 0.4 % 5.0 0.3 % Product price/mix 21.1 2.7
% 8.5 1.3 % 23.7 10.9 % 7.0 3.3
% 0.7 0.4 % 61.0 3.0 %
Total constant dollar change
(Non-U.S. GAAP)
17.7 2.3 % 14.3 2.2 %
18.3 8.4 % 14.4 6.8 %
1.3 0.8 % 66.0 3.3 %
Foreign currency translation (5.2 ) (0.7 ) % (54.6 )
(8.4 ) % (27.0 ) (12.4 ) % (7.2 ) (3.4 ) %
(10.8 ) (6.8 ) % (104.8 ) (5.2 ) %
Total change (U.S.
GAAP) 12.5 1.6 %
(40.3 ) (6.2 ) %
(8.7 ) (4.0 ) %
7.2 3.4 % (9.5 )
(6.0 ) % (38.8 )
(1.9 ) %
2014 Net Sales $ 785.4 $
612.6 $ 209.8 $ 216.8 $
149.1 $ 1,973.7 Year Ended December
31
NorthAmerica
Europe
LatinAmerica
AMAT(2)
JANZ(3)
Total
2013 Net Sales $ 3,004.9 $ 2,427.3 $ 840.7 $ 845.1 $ 572.8 $
7,690.8 Volume - Units (13.4 ) (0.5 ) % (2.6 ) (0.1 ) %
(26.2 ) (3.1 ) % 36.7 4.3 % (0.9 ) (0.2 ) % (6.4 ) — % Product
price/mix 99.0 3.3 % 20.1 0.8 %
96.5 11.5 % 21.8 2.6 % 12.0 2.1
% 249.4 3.2 %
Total constant dollar
change(Non-U.S. GAAP)
85.6 2.8 % 17.5 0.7 %
70.3 8.4 % 58.5 6.9 %
11.1 1.9 % 243.0 3.2 %
Foreign currency translation (18.6 ) (0.6 ) % 2.3 0.1
% (103.5 ) (12.3 ) % (34.1 ) (4.0 ) %
(29.4 ) (5.1 ) % (183.3 ) (2.4 ) %
Total change (U.S.
GAAP) 67.0 2.2 %
19.8 0.8 % (33.2 )
(3.9 ) % 24.4 2.9
% (18.3 ) (3.2 ) %
59.7 0.8 %
2014 Net Sales $ 3,071.9
$ 2,447.1 $ 807.5 $ 869.5
$ 554.5 $ 7,750.5 (1)
The results above are presented on a continuing operations
basis, excluding our rigid medical packaging business, which we
sold in December 2013. The supplementary information included in
this press release for 2014 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) AMAT consists of Asia,
Middle East, Africa and Turkey. (3) JANZ consists of Japan,
Australia and New Zealand.
Sealed Air CorporationInvestor:Lori Chaitman,
201-703-4161orMedia:Ken Aurichio, 201-703-4164
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