- 2016 Sales of $6.8 Billion, Net Income
of $486 Million and Reported EPS of $2.46
- 2016 Adjusted EPS of $2.66 and Adjusted
EBITDA of $1.16 Billion, or 17.1% of Net Sales, including
unfavorable currency translation of $0.11 per share and $35
million, respectively
- Provides Full Year 2017 Outlook
- Pursuing Tax-Free Spin-Off and Other
Strategic Alternatives, Including Potential Sale of New
Diversey
Sealed Air Corporation (NYSE:SEE) today announced financial
results for fourth quarter and full year 2016. Commenting on these
results, Jerome A. Peribere, President and Chief Executive Officer,
said, “In 2016, we generated a record level of cash flow, delivered
margin improvement for the fifth consecutive year and introduced an
unprecedented number of new and innovative solutions to our
customers around the world. These innovations coupled with
end-market growth opportunities lead to increased demand for our
protein packaging, hygiene and e-Commerce solutions. Similar to our
third quarter, these positive trends were offset by unfavorable
currency, challenging business environments in emerging countries
and Australia, and softness in the industrial market. We are
confident the underlying fundamentals of our strategy are intact
and expect accelerated top line growth and profitability
improvements in 2017.”
Peribere continued, “As we proceed with our plans to pursue a
tax-free spin-off of our Diversey Care and related food hygiene and
cleaning business, or ‘New Diversey,’ we are also exploring other
strategic alternatives, including a potential sale of New Diversey.
This is the appropriate next step in our Company’s transformation
and will enable us to unlock meaningful value for customers and
shareholders.”
Unless otherwise stated, all results compare fourth quarter 2016
results to fourth quarter 2015 results. Year-over-year financial
discussions present operating results as reported, and on an
organic or constant dollar basis. Constant dollar refers to unit
volume and price/mix performance and excludes the impact of
currency translation from all periods referenced. Organic refers to
unit volume and price/mix performance and excludes the impact of
currency translation and the results from the divestiture of the
North American foam trays and absorbent pads business, which was
divested on April 1, 2015, and the divestiture of the European food
trays business on November 1, 2015 (together “divestitures”), 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
certain specified items (“Special Items”), such as restructuring
charges, charges related to ceasing operations in Venezuela,
cash-settled stock appreciation rights (“SARs”) granted as part of
the Diversey acquisition, special tax items (“Tax Special Items”)
and certain other infrequent or 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.
Fourth Quarter 2016 Highlights by
Division
- Food Care net sales of $841 million
were flat as reported. Currency had a negative impact on Food Care
net sales of 2.3%, or $20 million, and divestitures had a negative
impact of 0.6%, or $5 million. On an organic basis, net sales
increased 2.7% due to positive volume of 2.0% and favorable
price/mix of 0.7%. Volume growth of more than 5% in North America
and positive trends in EMEA were partially offset by weakness in
Latin America and Australia. Adjusted EBITDA of $178 million was
attributable to favorable price/cost spread, positive volumes,
restructuring savings and lower operating expenses, which were
partially offset by unfavorable currency translation and
divestitures. Adjusted EBITDA margins of 21.2% expanded 250 basis
points compared to last year.
- Diversey Care net sales of $493 million
decreased 0.4% as reported and increased 2.8% on a constant dollar
basis. Currency had a negative impact on Diversey Care net sales of
3.2%, or $16 million in the quarter. Price/mix and volume increased
2.4% and 0.4% respectively. Volume growth of 7% in Asia-Pacific and
3% in North America were offset by lower volumes in the Middle East
and Latin America. Diversey Care’s Adjusted EBITDA was $64 million
or 13.0% of net sales. Adjusted EBITDA margins improved 180 basis
points compared to the fourth quarter 2015 as a result of favorable
price/cost spread and restructuring savings, which were offset by
higher operating expenses.
- Product Care net sales of $394 million
decreased 1.7% as reported and 0.5% on a constant dollar basis.
Currency had a negative impact on Product Care net sales of 1.2%,
or $5 million. Sales volume increased 1.5%, which was offset by
unfavorable price/mix of 2.0%. North America volumes were up more
than 3% as a result of continued strength in e-Commerce offset by
rationalization efforts, ongoing softness in the industrial market
and unfavorable price/mix. Adjusted EBITDA was $88 million or 22.3%
of net sales. Adjusted EBITDA margins expanded 80 basis points
compared to the same period a year ago due to higher volumes, which
were partially offset by negative price/cost spread.
Company Updates on Separation of New
Diversey
In mid-October the Company announced plans to pursue a tax-free
spin-off of New Diversey. As the Company considers that plan, it is
also exploring other strategic alternatives, including a potential
sale of New Diversey.
Fourth Quarter and Full Year 2016 U.S.
GAAP Summary
Fourth quarter net sales of $1.7 billion decreased 0.6% on an as
reported basis. Currency had a negative impact on total net sales
of 2.3%, or $40 million, and the Food Care divestitures had a
negative impact on total sales of 0.3%, or $5 million, in the
fourth quarter 2016.
For the full year 2016, net sales of $6.8 billion decreased 3.6%
on an as reported basis. Currency had a negative impact on total
net sales of 3.4%, or $243 million, and the Food Care divestitures
had a negative impact on total sales of 1.4%, or $102 million, in
2016.
Fourth quarter net income on a reported basis was $171 million,
or $0.87 per diluted share as compared to $124 million, or $0.62
per diluted share in the fourth quarter 2015. Net income in the
fourth quarter 2016 was favorably impacted by $22 million of
Special Items, primarily related to the release of certain tax
reserves, as described more fully below, partially offset by costs
related to restructuring activities and costs incurred regarding
the pursuit of strategic alternatives for New Diversey. Net income
in the fourth quarter 2015 was negatively impacted by $28 million
of Special Items, primarily consisting of costs related to
restructuring activities and a tax reserve related to the tax
refund received on the Settlement agreement (as defined in our 2015
Annual Report on Form 10-K), partially offset by the release of
certain tax reserves recorded at the time of the Diversey Holdings,
Inc. acquisition, for which the statute of limitations had
expired.
Full year 2016 net income on a reported basis was $486 million,
or $2.46 per diluted share as compared to $335 million, or $1.62
per diluted share for the full year 2015. Net earnings in the full
year 2016 were favorably impacted by $40 million of Special Items,
primarily related to the release of certain tax reserves, as
described more fully below, partially offset by expenses related to
restructuring activities and costs incurred regarding the pursuit
of strategic alternatives for New Diversey. Net income for the full
year 2015 included $201 million of Special Items, primarily
consisting of expenses related to restructuring activities and a
tax reserve recorded in relation to the tax refund received on the
Settlement agreement, partially offset by the release of certain
tax reserves recorded at the time of the Diversey Holdings, Inc.
acquisition, for which the statute of limitations had expired.
The effective tax rate in the fourth quarter of 2016 was (8.4)%,
compared to the effective tax rate of 1.8% in the fourth quarter of
2015. The effective tax rate in 2016 was favorably impacted by the
release of certain valuation allowances and tax reserves recorded
at the time of the Diversey Holdings, Inc. acquisition (the
“Diversey acquisition”), primarily resulting from the settlement of
an audit, and a decrease in liability related to future
repatriation of foreign earnings.
For the full year 2016, the effective tax rate was 14.0%,
compared to the effective tax rate of 21.2% in 2015. The effective
tax rate was favorably impacted in 2016 primarily by tax benefits
for the release of certain tax reserves and valuation allowances
recorded at the time of the Diversey acquisition, current year
foreign tax credit generation, a decrease in liability related to
future repatriation of foreign earnings, favorable mix of foreign
and US earnings, and a tax benefit related to the Company’s early
adoption of ASU 2016-09, effective January 1, 2016.
Fourth Quarter and Full Year 2016
Non-U.S. GAAP Summary
In the fourth quarter net sales on an organic basis increased
2.0% driven by an increase in North American sales volumes across
all segments. Favorable price/mix contributed to organic sales
growth, reflecting positive trends in Diversey Care and Food Care,
which offset declines in Product Care.
For the full year 2016 net sales on an organic basis increased
1.3% driven by an increase in North American sales volumes
primarily in Food Care and Product Care. Favorable price/mix also
contributed to performance and reflected positive trends in
Diversey Care and Food Care which offset declines in Product
Care.
Adjusted EBITDA for the fourth quarter 2016 was $304 million, or
17.5% of net sales. This margin performance was attributable to a
favorable price/cost spread, restructuring savings and higher sales
volumes, partially offset by higher operating expenses, unfavorable
currency translation and the impact of divestitures.
Full year 2016 Adjusted EBITDA was $1.16 billion, or 17.1% of
net sales. This margin performance was attributable to a favorable
price/cost spread, restructuring savings and higher sales volumes,
partially offset by higher operating expenses, unfavorable currency
translation and the impact of divestitures.
Adjusted EPS was $0.76 for the fourth quarter 2016. This
compares to Adjusted EPS of $0.76 in the fourth quarter 2015. The
Adjusted Tax Rate was 18.4% in the fourth quarter 2016, compared to
7.6% in the fourth quarter 2015. The Adjusted Tax Rate in the
fourth quarter of 2016 was favorably impacted by an increase in
foreign tax credits and decrease in liability related to future
repatriation of foreign earnings.
Full year 2016 adjusted EPS was $2.66. This compares to Adjusted
EPS of $2.59 in 2015. The Adjusted Tax Rate was 21.6% for the full
year 2016, compared to 20.2% in 2015. The 2016 Adjusted Tax Rate
was positively impacted by a favorable mix of domestic versus
foreign sourced income, an increase in foreign tax credits and
decrease in liability related to future repatriation of foreign
earnings.
Cash Flow and Net Debt
Cash flow provided by operating activities in 2016 was $907
million, which is net of $66 million of restructuring payments.
This compares with cash provided by operating activities of $982
million in 2015. Cash provided by operating activities in 2015
included a tax refund of $235 million related to the payment of
funds in connection with the Settlement agreement (as defined in
the Company’s Form 10-K for the year ended December 31, 2015).
Excluding the tax refund, cash flow provided by operating
activities in 2015 was $747 million, which is net of $98 million of
restructuring and $21 million of SARs payments.
Capital expenditures increased to $276 million, as planned, in
the full year 2016 and compared to $184 million in 2015. Free Cash
Flow, defined as net cash provided by (used in) operating
activities (excluding the Settlement agreement and excess tax
benefit) less capital expenditures, was an inflow of $631 million
in 2016. This compares to an inflow of $609 million in 2015,
excluding the tax refund related to the payment of funds in
connection with the Settlement agreement.
Compared to December 31, 2015, the Company’s net debt decreased
$215 million to $4.0 billion as of December 31, 2016. This decrease
in borrowings primarily resulted from working capital management
and cash generated from operating activities, partially offset by
higher capital expenditures and amounts paid for share repurchases
and dividends.
During 2016, the Company repurchased approximately 4.7 million
shares for approximately $217 million, and paid cash dividends of
$122 million. The Company's decision to pursue the separation of
New Diversey through either a tax-free spin-off or other strategic
alternatives restricts the ability to repurchase shares under the
current share buyback program. Once the separation process is
concluded, the Company currently intends to resume share
repurchases.
Updated Outlook for Full Year
2017*
The Company estimates net sales to be essentially unchanged with
2016 as reported results, which assumes an unfavorable impact of
approximately 3% from foreign currency translation. Adjusted for
unfavorable currency, net sales in 2017 are expected to increase
approximately 2.5%. The Company's Food Care division and Product
Care division are expected to grow at approximately 3% in constant
dollars and Diversey Care is expected to grow at a constant dollar
rate of 1%.
Adjusted EBITDA is estimated to be approximately $1.18 billion,
which assumes approximately $40 million of unfavorable currency
translation. The Company's Food Care division and Product Care
division are expected to deliver Adjusted EBITDA growth and margin
expansion as compared with 2016 results. Diversey Care's Adjusted
EBITDA margin is expected to be consistent with 2016 results.
Adjusted EPS is expected to be approximately $2.70 per share,
which assumes approximately $0.14 per share of unfavorable currency
translation. Adjusted EPS guidance excludes the impact of Special
Items. The Company estimates an Adjusted Tax Rate of 23% and 197
million diluted shares outstanding.
The Company anticipates 2017 Free Cash Flow to be approximately
$600 million, including capital expenditures of approximately $185
million and cash restructuring payments in the range of $85 to $100
million. Estimated Free Cash Flow for 2017 does not include any
material fees associated with the New Diversey tax free spin-off or
other strategic alternatives, including a possible sale. Costs of
the separation of New Diversey are expected to be managed within
existing programs and funds generated as a result of the
separation.
Conference Call
Information
Date:
Thursday, February 9, 2017
Time:
10:00am (ET)
Webcast:
www.sealedair.com/investors
Conference Dial
In:
(855) 472-5411 (domestic) (330) 863-3389 (international)
Participant
Code:
52750366
A supplemental presentation accompanying the conference call
will be available on the Company’s website at
www.sealedair.com/investors.
Conference Call Replay
Information
Dates:
Thursday, February 9, 2017 at 1:00pm (ET) through Saturday, March
11, 2017 at 11:59pm (ET)
Webcast:
www.sealedair.com/investors
Conference Dial
In:
(855) 859-2056 (domestic) (404) 537-3406 (international)
Participant
Code:
52750366
Business
Sealed Air Corporation creates a world that feels, tastes and
works better. In 2016, the Company generated revenue of
approximately $6.8 billion by helping our customers achieve their
sustainability goals in the face of today’s biggest social and
environmental challenges. Our portfolio of widely recognized
brands, including Cryovac® brand food packaging solutions, Bubble
Wrap® brand cushioning and Diversey® cleaning and hygiene
solutions, enables a safer and less wasteful food supply chain,
protects valuable goods shipped around the world, and improves
health through clean environments. Sealed Air has approximately
23,000 employees who serve customers in 171 countries. To learn
more, visit www.sealedair.com.
Website Information
We routinely post important information for investors on our
website, www.sealedair.com, in the "Investor Relations" section. We
use this website as a means of disclosing material, non-public
information and for complying with our disclosure obligations under
Regulation FD. Accordingly, investors should monitor the Investor
Relations section of our website, in addition to following our
press releases, SEC filings, public conference calls, presentations
and webcasts. The information contained on, or that may be accessed
through, our website is not incorporated by reference into, and is
not a part of, this document.
Non-U.S. GAAP
Information
In this press release and supplement, we have included several
non-U.S. GAAP financial measures, including Adjusted Net Earnings
and Adjusted EPS, net sales on a “constant dollar” or “organic”
basis, Free Cash Flow, Adjusted EBITDA and Adjusted Tax Rate, as
our management believes these measures are useful to investors. We
present results and guidance, adjusted to exclude the effects of
Special Items and their related tax impact that would otherwise be
included under U.S. GAAP, to aid in comparisons with other periods
or prior guidance. In addition, non-U.S. GAAP measures are used by
management to review and analyze our operating performance and,
along with other data, as internal measures for setting annual
budgets and forecasts, assessing financial performance, providing
guidance and comparing our financial performance with our peers and
may also be used for purposes of determining incentive
compensation. The non-U.S. GAAP information has limitations as an
analytical tool and should not be considered in isolation from or
as a substitute for U.S. GAAP information. It does not purport to
represent any similarly titled U.S. GAAP information and is not an
indicator of our performance under U.S. GAAP. Non-U.S. GAAP
financial measures that we present may not be comparable with
similarly titled measures used by others. Investors are cautioned
against placing undue reliance on these non-U.S. GAAP measures. For
a reconciliation of these non-U.S. GAAP measures to U.S. GAAP and
other important information on our use of non-U.S. GAAP financial
measures, see the attached supplementary information entitled
“Condensed Consolidated Statements of Cash Flows” (under the
section entitled “Non-U.S. GAAP Free Cash Flow”), “Reconciliation
of U.S. GAAP Net Earnings and U.S. GAAP Net Earnings Per Share to
Non-U.S. GAAP Adjusted Net Earnings and Non-U.S. GAAP Adjusted Net
Earnings Per Share” “Segment Information,” “Reconciliation of U.S.
GAAP Net Earnings to Non-U.S. GAAP Total Company Adjusted EBITDA,”
“Components of Change in Net Sales by Segment,” “Components of
Changes in Net Sales by Region,” “Components of Organic Change in
Net Sales by Segment,” and “Components of Organic Changes in Net
Sales by Region.” Information reconciling forward-looking non-U.S.
GAAP measures to U.S. GAAP measures is not available without
unreasonable effort.
*We have not provided guidance for the most directly comparable
U.S. GAAP financial measures, as they are not available without
unreasonable effort due to the high variability, complexity, and
low visibility with respect to certain Special Items, including
gains and losses on the disposition of businesses, the ultimate
outcome of certain legal or tax proceedings, foreign currency gains
or losses resulting from the volatile currency market in Venezuela,
and other unusual gains and losses. These items are uncertain,
depend on various factors, and could be material to our results
computed in accordance with U.S. GAAP.
Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 concerning our business, consolidated
financial condition and results of operations. Forward-looking
statements are subject to risks and uncertainties, many of which
are outside our control, which could cause actual results to differ
materially from these statements. Therefore, you should not rely on
any of these forward-looking statements. Forward-looking statements
can be identified by such words as “anticipates,” “believes,”
“plan,” “assumes,” “could,” “should,” “estimates,” “expects,”
“intends,” “potential,” “seek,” “predict,” “may,” “will” and
similar references to future periods. All statements other than
statements of historical facts included in this press release
regarding our strategies, prospects, financial condition,
operations, costs, plans and objectives are forward-looking
statements. Examples of forward-looking statements include, among
others, statements we make regarding expected future operating
results, expectations regarding the results of restructuring and
other programs, anticipated levels of capital expenditures and
expectations of the effect on our financial condition of claims,
litigation, environmental costs, contingent liabilities and
governmental and regulatory investigations and proceedings. The
following are important factors that we believe could cause actual
results to differ materially from those in our forward-looking
statements: the tax benefits associated with the Settlement
agreement (as defined in our 2015 Annual Report on Form 10-K),
global economic and political conditions, changes in our credit
ratings, changes in raw material pricing and availability, changes
in energy costs, competitive conditions, the success of the
separation of the Diversey Care division and food hygiene business,
the success of our restructuring activities, currency translation
and devaluation effects, the success of our financial growth,
profitability, cash generation and manufacturing strategies and our
cost reduction and productivity efforts, the success of new product
offerings, the effects of animal and food-related health issues,
pandemics, consumer preferences, environmental matters, regulatory
actions and legal matters, and the other information referenced in
the “Risk Factors” section appearing in our most recent Annual
Report on Form 10-K, as filed with the Securities and Exchange
Commission, and as revised and updated by our Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K. Any forward-looking
statement made by us is based only on information currently
available to us and speaks only as of the date on which it is made.
We undertake no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
SEALED AIR CORPORATIONSUPPLEMENTARY
INFORMATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(1)(Unaudited)(In millions, except
per share data) Three Months EndedDecember
31, Year EndedDecember 31, 2016
2015 2016 2015 Net sales
$ 1,744.1 $ 1,753.9 6,778.3
$ 7,031.5 Cost of sales(2) 1,103.2
1,117.3 4,246.7 4,444.9
Gross profit
640.9 636.6 2,531.6 2,586.6 As a % of
total net sales 36.7 % 36.3 % 37.3 % 36.8 % Selling, general and
administrative expenses(2) 404.7 408.6 1,604.5 1,652.3 As a % of
total net sales 23.2 % 23.3 % 23.7 % 23.5 % Amortization expense of
intangible assets acquired 22.5 21.3 94.9 88.7 Stock appreciation
rights expense(3) — (0.2 ) (0.1 ) 3.9 Restructuring and other
charges(2) 9.7 10.3 13.2 78.3
Operating profit 204.0 196.6 819.1
763.4 Interest expense (51.3 ) (55.4 ) (213.1 ) (227.7 )
Foreign currency exchange loss related to Venezuelan
subsidiaries(4) (0.2 ) (2.4 ) (3.4 ) (33.1 ) Charges related to
Venezuelan subsidiaries(2) — — (46.0 ) — Loss on debt redemption
and refinancing activities(5) — 0.7 (0.1 ) (110.0 ) Gain (loss) on
sale of business(6) (0.2 ) (15.3 ) (1.8 ) 13.4 Other income, net
5.5 1.5 11.2 19.9
Earnings before
income tax provision 157.8 125.7 565.9
425.9 Income tax provision(2)(7) (13.3 ) 2.2
79.5 90.5 Effective income tax rate -8.4 % 1.8 % 14.0
% 21.2 %
Net income $ 171.1 $
123.5 486.4 $ 335.4 Net
earnings per common share:(8) Basic:(7)
$ 0.89 $ 0.63 $ 2.49
$ 1.63 Diluted:(7) 0.87
0.62 2.46 1.62
Dividends per common share $ 0.16 $
0.13 $ 0.61 $ 0.52 Weighted
average number of common shares outstanding: Basic
192.4 195.5 194.3
203.9 Diluted(7) 196.2
198.4 197.2 206.7
_______________________
(1)
The supplementary information included in this press
release for 2016 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) Due to the ongoing
challenging economic situation in Venezuela, the Company approved a
program in the second quarter of 2016 to cease operations in the
country. This resulted in total costs of $53.0 million being
incurred which included a voluntary reduction in headcount
including severance and termination benefits for employees of
approximately $0.3 million recorded in restructuring and other
charges, depreciation and amortization expense related to fixed
assets and intangibles of approximately $4.8 million recorded in
selling, general and administrative expenses, inventory reserves of
$0.9 million recorded in costs of sales, income tax expense of $1.0
million and the release of cumulative translation adjustment of
approximately $46.0 million recorded in charges related to
Venezuelan subsidiaries. (3) The remaining amount of unvested
cash-settled stock appreciation rights (“SARs”) fully vested on
March 31, 2015. However, we will continue to incur expense related
to these SARs until the last expiration date of these awards
(February 2020). 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. (4) Based on changes to the Venezuelan
currency exchange rate mechanisms, in the first quarter of 2015, we
changed the exchange rate we used to remeasure our Venezuelan
subsidiaries’ financial statements into U.S. dollars. Starting June
30, 2015 through to December 31, 2015, we concluded that we would
use the SIMADI rate to remeasure our bolivar denominated monetary
assets and liabilities since it was our only legally available
option and at that time, our intent on a go-forward basis to
utilize this market to settle any future transactions based on the
then current facts and circumstances. As a result of this
evaluation, we recorded a remeasurement loss of $2.4 million and
$33.1 million in the three months and year ended December 31, 2015,
respectively. In the first quarter of 2016, based on further
changes in the Venezuelan exchange rate mechanisms whereby the
SIMADI rate was eliminated and replaced by the DICOM rate, we used
the DICOM rate to remeasure our bolivar denominated monetary assets
and liabilities. As a result of this evaluation, the Company
reported a remeasurement loss of less than $0.2 million and $3.4
million in the three months and year ended December 31, 2016,
respectively. (5) In June 2015, we issued $400.0 million of 5.5%
senior notes due 2025 and €400.0 million of 4.5% senior notes due
2023 and used the net proceeds of these notes to retire the
existing $750.0 million of 8.375% senior notes due 2021. The
aggregate repurchase price was $866.0 million, which primarily
included the principle amount of $750.0 million, premium of $99.0
million and accrued interest of $17.0 million. We recognized a
total net pre-tax loss of $111.0 million in the three months ended
June 30, 2015, which included the premiums mentioned above. Also
included in the loss on debt redemption was $11.0 million of
accelerated amortization of original non-lender fees related to the
8.375% senior notes. (6) In April 2015, we completed the sale of
our North American foam trays and absorbent pads business for a
gain of $29.2 million. In November 2015, we completed the sale of
our European food trays business for a pre-tax loss of $13.0
million and reported an additional loss of $1.8 million related to
both divestitures in 2016. (7) The Company early adopted ASU
2016-09 on a prospective basis as required, related to the
recognition of excess tax benefits to the income statement which
were previously recorded in additional paid-in capital, effective
January 1, 2016. This resulted in an additional 536,975 and 446,747
diluted weighted average number of common shares outstanding for
the three months and year ended December 31, 2016, respectively,
and recognition of excess tax benefits of $5.7 million and $18.1
million in income tax provision for the three months and year ended
December 31, 2016, respectively. As a result, net earnings per
share increased by $0.04 per share and $0.10 per share for the
three months and year ended December 31, 2016, respectively. (8)
Net earnings per common share are calculated under the two-class
method. See our upcoming Annual Report on Form 10-K for year ended
December 31, 2016 for more information on the two-class method.
SEALED AIR CORPORATIONSUPPLEMENTARY
INFORMATION
CONDENSED CONSOLIDATED BALANCE
SHEETS(1)
(Unaudited)
(In millions)
December 31,2016 December
31,2015(2) Assets Current assets: Cash and
cash equivalents(2) $ 363.7 $ 351.7 Trade receivables, net 898.7
758.4 Other receivables(2) 154.5 154.2 Inventories 659.9 660.8
Assets held for sale 3.3 10.3 Other current assets 135.2
280.3
Total current assets 2,215.3
2,215.7 Property and equipment, net(2) 1,060.3 945.7
Goodwill 2,855.6 2,909.5 Intangible assets, net 710.1 784.3 Other
assets, net(2) 547.8 549.8
Total assets
$ 7,389.1 $ 7,405.0 Liabilities and
stockholders' equity Current liabilities: Short-term
borrowings(2) $ 92.6 $ 248.2 Current portion of long-term debt
328.1 46.6 Accounts payable(2) 885.7 669.0 Other current
liabilities 812.5 843.3
Total current
liabilities 2,118.9 1,807.1 Long-term debt, less
current portion(2) 3,938.3 4,266.8 Other liabilities(2)
722.2 804.0
Total liabilities 6,779.4
6,877.9 Stockholders' equity 609.7
527.1
Total liabilities and stockholders' equity $
7,389.1 $ 7,405.0
_______________________
(1) The supplementary information included in this
press release for 2016 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 first quarter of
2016, the Company adopted ASU 2015-03, Interest—Imputation of
Interest (Subtopic 835-30): Simplifying the Presentation of Debt
Issuance Costs (“ASU 2015-03”) and ASU 2015-15, Interest—Imputation
of Interest (Subtopic 835-30), Presentation and Subsequent
Measurement of Debt Issuance Costs Associated with Line-of-Credit
Arrangements (“ASU 2015-15”), which resulted in a decrease in other
assets of $35.9 million and a decrease in long-term debt of $35.9
million as of December 31, 2015 on the Condensed Consolidated
Balance Sheets. Amounts have been revised to properly reflect asset
retirement obligations. This revision resulted in an increase to
property and equipment, net, as well as other non-current
liabilities of $15.0 million as of December 31, 2015. Certain
amounts related to external payment terms were misclassified in the
Consolidated Balance Sheet. The revision of this item resulted in a
decrease in accounts payable and an increase in short term
borrowings of $6.3 million as of December 31, 2015. Additionally,
due to changes in the accounting treatment of a factoring agreement
the Company reclassified $6.7 million from cash and cash
equivalents to other receivables as of December 31, 2015.
CALCULATION OF NET DEBT
(1)
December 31,2016 December
31,2015(2) Short-term borrowings $
92.6 $ 248.2 Current portion of long-term debt 328.1 46.6 Long-term
debt, less current portion 3,938.3 4,266.8 Total debt
4,359.0 4,561.6 Less: cash and cash equivalents (363.7 )
(351.7 )
Net debt $ 3,995.3 $
4,209.9
_______________________
(1) The supplementary information included in this
press release for 2016 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 first quarter of
2016, the Company adopted ASU 2015-03 & ASU 2015-15 which
resulted in a decrease in other assets of $35.9 million and a
decrease in long-term debt of $35.9 million as of December 31, 2015
on the Condensed Consolidated Balance Sheets.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(1)
(Unaudited)
(In millions)
Year Ended December 31, 2016
2015 Revised Net income $ 486.4 $ 335.4 Adjustments to
reconcile net earnings to net cash provided by operating
activities(2) 291.4 367.4 Changes in: Trade receivables, net (33.9
) 36.7 Inventories (17.1 ) (38.3 ) Accounts payable 228.0 81.4
Settlement agreement, and related items (3) — 235.2 Changes in all
other operating assets and liabilities (47.9 ) (35.7
)
Cash flow provided by operating activities(4)
906.9 982.1 Capital expenditures for property
and equipment (275.7 ) (184.0 ) Proceeds, net from sale of
businesses 7.8 94.6 Business acquired in purchase transactions, net
of cash and cash equivalents acquired (5.8 ) (27.5 ) Proceeds from
sales of property, equipment and other assets 4.9 32.9 Settlement
of foreign currency forward contracts (46.0 ) 24.0
Cash flow used in investing activities (314.8
) (60.0 ) Net proceeds (payments) from
borrowings (181.3 ) 211.9 Cash used as collateral on borrowing
arrangements 3.6 (20.5 ) Excess tax benefit from Common Stock
issues in the Settlement agreement — 46.2 Repurchase of common
stock (217.0 ) (802.0 ) Payments for debt extinguishment and
issuance costs (0.1 ) (108.2 ) Dividends paid on common stock
(121.6 ) (106.8 ) Acquisition of common stock for tax withholding
(30.7 ) (9.3 ) Other financing activities 6.2 —
Cash flow used in financing activities(4)
(540.9 ) (788.7 ) Effect of
foreign currency exchange rates on cash and cash equivalents
(39.2 ) (60.4 )
Cash and cash equivalents beginning of period $
351.7 $ 278.7 Net change in cash and cash
equivalents 12.0 73.0
Cash and cash equivalents
end of period $ 363.7 $ 351.7
Non-U.S. GAAP Free Cash Flow: Cash flow from
operating activities $ 906.9 $ 982.1 Capital expenditures for
property and equipment (275.7 ) (184.0 )
Free Cash
Flow(5) $ 631.2 $ 798.1
Settlement agreement and related items(3) — (189.0 )
Free Cash Flow excluding Settlement agreement and related
items $ 631.2 $ 609.1
Additional Cash Flow Information: Interest payments, net of amounts
capitalized $ 215.1 $ 229.7 Income tax payments $ 125.8 $ 101.6
SARs payments (less amounts included in restructuring payments) $
1.9 $ 20.7 Restructuring payments (including associated costs) $
66.1 $ 98.3
_______________________
(1) The supplementary information included in this
press release for 2016 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) 2016 primarily consists of
depreciation and amortization of $214 million, share based
compensation expense of $60 million, profit sharing expense of $25
million, charges related to ceasing operations in Venezuela of $46
million, a remeasurement loss of $3 million and gain on sale of
businesses of $2 million. 2015 primarily consists of loss on bond
redemption of $110 million, depreciation and amortization of $213
million, share-based compensation expense of $61 million, and a
remeasurement loss of $33 million partially offset by a gain on
sale of business of $25 million. (3) During the first quarter of
2015, the Company received the tax refund of $235 million related
to the payment of funds in connection with the Settlement agreement
payment. (4) The Company early adopted ASU 2016-09 on a
retrospective basis related to the classification of excess tax
benefits on the Statement of Cash Flows, effective January 1, 2016,
which resulted in an increase in operating cash flow of $6.8
million and a decrease in financing activities of $6.8 million for
the year ended December 31, 2016 and an increase in operating cash
flow of $13.1 million and a decrease in financing activities of
$13.1 million for the year ended December 31, 2015. (5) Free cash
flow does not represent residual cash available for discretionary
expenditures, including mandatory debt servicing requirements or
non-discretionary expenditures that are not deducted from this
measure.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
RECONCILIATION OF U.S. GAAP NET
EARNINGS AND U.S. GAAP NET EARNINGS PER COMMON SHARE TO
NON-U.S. GAAP ADJUSTED NET EARNINGS AND
NON-U.S. GAAP ADJUSTED NET EARNINGS PER COMMON
SHARE(1)
(Unaudited)
(In millions, except per share
data)
Three Months Ended December 31, Year Ended
December 31, 2016 2015 2016
2015 NetEarnings
NetEarnings NetEarnings
NetEarnings EPS
EPS EPS EPS U.S. GAAP net earnings and EPS
available to
common stockholders (2)
$ 171.1 $ 0.87 $ 123.5 $ 0.62 $ 486.4 $ 2.46 $ 335.4 $ 1.62 Special
Items(3) (21.5 ) (0.11 ) 27.6 0.14
40.0 0.20 200.7 0.97
Non-U.S. GAAP
adjusted net earnings and
adjusted EPS available to common
stockholders
$ 149.6 $ 0.76 $ 151.1 $ 0.76 $ 526.4 $ 2.66 $ 536.1
$ 2.59 Weighted average number of common shares
outstanding - Diluted
196.2 198.4 197.2 206.7
_______________________
(1) The supplementary information included in this
press release for 2016 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) Net earnings per common
share is calculated under the two-class method. (3) Special Items
include the following:
Three Months Ended
December 31,
Year Ended
December 31,
2016 2015 2016
2015 Special Items: Restructuring and other charges(1) $
(9.7 ) $ (10.3 ) $ (12.9 ) $ (78.3 ) Other restructuring associated
costs included in cost of sales and
selling, general and administrative
expenses
(10.7 ) (10.7 ) (28.0 ) (42.9 ) SARs — 0.2 0.1 (3.9 ) Foreign
currency exchange loss related to Venezuelan
subsidiaries
(0.2 ) (2.4 ) (3.4 ) (33.1 ) Charges related to ceasing operations
in Venezuela(1) — — (52.1 ) — Loss on debt redemption and
refinancing activities — 0.7 (0.1 ) (110.0 ) (Loss) gain on sale of
North American foam trays and absorbent
pads business and European food trays
business
(0.2 ) (15.3 ) (1.8 ) 13.4 (Loss) gain related to the sale of other
businesses,
investments and property, plant and
equipment
(0.1 ) 2.1 (1.6 ) 11.1 Charges incurred related to pursuit of
strategic alternatives for
New Diversey
(6.7 ) — (6.7 ) — Other Special Items(2) 2.0 (2.1 )
1.3 (2.5 ) Pre-tax impact of Special Items (25.6 )
(37.8 ) (105.2 ) (246.2 ) Tax impact of Special Items and Tax
Special Items(1)(3) 47.1 10.2 65.2 45.5
Net impact of Special Items $ 21.5 $ (27.6 ) $ (40.0 ) $ (200.7 )
Weighted average number of common shares outstanding – Diluted
196.2 198.4 197.2 206.7 Earnings per
share impact from Special Items $ 0.11 $ (0.14 ) $ (0.20 ) $ (0.97
)
_______________________
(1) Due to the ongoing challenging economic situation
in Venezuela, the Company approved a program in the second quarter
of 2016 to cease operations in the country. Refer to note 2 on the
Condensed Consolidated Statement of Operations above. (2) Other
Special Items for the year ended December 31, 2016 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. Other Special Items
for the year ended December 31, 2015 primarily included legal fees
associated with restructuring and acquisitions. (3) 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
December 31,
Year Ended
December 31,
2016 2015 2016
2015 U.S. GAAP Earnings before income tax provision $ 157.8
$ 125.7 $ 565.9 $ 425.9 Pre-tax impact of Special Items
(25.6 ) (37.8 ) (105.2 ) (246.2 ) Non-U.S.
GAAP Adjusted Earnings before income tax provision $ 183.4 $ 163.5
$ 671.1 $ 672.1 U.S. GAAP Income tax (benefit) provision $
(13.3 ) $ 2.2 $ 79.5 $ 90.5 Tax Special Items(1) 32.6 (1.8 ) 48.5
(17.0 ) Tax impact of Special Items 14.5 12.0
16.7 62.5 Non-U.S. GAAP Adjusted Income tax provision $ 33.8
$ 12.4 $ 144.7 $ 136.0 U.S. GAAP Effective income tax rate
-8.4 % 1.8 % 14.0 % 21.2 % Non-U.S. GAAP Adjusted income tax rate
18.4 % 7.6 % 21.6 % 20.2 %
_______________________
(1) For the three months and year ended December 31,
2016, the Tax Special Items including the release of certain tax
reserves and valuation allowances recorded at the time of the
Diversey Holdings, Inc. acquisition, for which the statute of
limitations had expired or which had been settled. For the year
ended December 31, 2015, the Tax Special Items included a tax
reserve related to the tax refund received on the Settlement
agreement, which was partially offset by the release of certain tax
reserves recorded at the time of the Diversey Holdings, Inc.
acquisition, for which the statute of limitations had expired and
the Grace settlement.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
SEGMENT INFORMATION(1)
(Unaudited)
(In millions)
Three Months Ended Year Ended December
31, %Change December 31,
%Change 2016
2015(2)
2016
2015(2)
Net Sales: Food Care $ 840.5 $ 842.3 (0.2 )% $
3,222.1 $ 3,405.1 (5.4 )% As a % of Total Company net sales 48.2 %
48.0 % 47.5 % 48.4 % Diversey Care 492.5 494.4 (0.4 )% 1,963.2
1,999.1 (1.8 )% As a % of Total Company net sales 28.2 % 28.2 %
29.0 % 28.4 % Product Care 393.7 400.5 (1.7 )% 1,523.7 1,553.6 (1.9
)% As a % of Total Company net sales 22.6 % 22.8 % 22.5 % 22.1 %
Other 17.4 16.7 4.2 % 69.3 73.7 (6.0 )%
Total Company Net Sales $ 1,744.1 $
1,753.9 (0.6 )%
$ 6,778.3
$ 7,031.5 (3.6 )%
Three Months Ended Year Ended December 31,
%Change December 31, %Change
2016
2015(2)
2016
2015(2)
Adjusted EBITDA: Food Care $ 178.0 $ 157.2 13.2 % $
661.1 $ 689.8 (4.2 )% Adjusted EBITDA Margin 21.2 % 18.7 % 20.5 %
20.3 % Diversey Care 64.2 55.4 15.9 % 251.3 231.9 8.4 % Adjusted
EBITDA Margin 13.0 % 11.2 % 12.8 % 11.6 % Product Care 87.7 86.2
1.7 % 331.8 324.1 2.4 % Adjusted EBITDA Margin 22.3 % 21.5 % 21.8 %
20.9 % Other (25.5 ) (16.5 ) 54.5 % (87.2 )
(71.7 ) 21.6 %
Non-U.S. GAAP Total Company
Adjusted EBITDA
$ 304.4 $ 282.3 7.8 %
$
1,157.0 $ 1,174.1 (1.5 )%
Adjusted EBITDA Margin 17.5 % 16.1 % 17.1 % 16.7 %
_______________________
(1) The supplementary information included in this
press release for 2016 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 of January 1, 2016, our
Kevothermal business was moved from Other to our Product Care
Segment. This resulted in a reclassification of $2.8 million of net
sales and $0.8 million of adjusted EBITDA for the three months
ended December 31, 2015 and $13.1 million of net sales and $3.1
million of adjusted EBITDA for the year ended December 31, 2015.
SEALED AIR CORPORATION
SEGMENT INFORMATION – CONTINUED
SUPPLEMENTARY
INFORMATION(1)
RECONCILIATION OF U.S. GAAP NET
EARNINGS TO
NON-U.S. GAAP TOTAL COMPANY ADJUSTED
EBITDA
(Unaudited)
(In millions)
Three Months EndedDecember
31,
Year EndedDecember 31,
2016 2015 2016
2015 U.S. GAAP net income $
171.1 $ 123.5 $ 486.4 $
335.4 Interest expense (51.3 ) (55.4 ) (213.1 ) (227.7 )
Income tax provision(2) (13.3 ) 2.2 79.5 90.5 Depreciation and
amortization(5) (70.2 ) (63.4 ) (278.2 ) (274.5 ) Depreciation and
amortization adjustments(2)(3) 0.5 — 5.4 0.2 Special Items:
Restructuring and other charges(2)(6) (9.7 ) (10.3 ) (12.9 ) (78.3
) Other restructuring associated costs included in cost of
sales and selling, general and
administrative expenses
(10.7 ) (10.7 ) (28.0 ) (42.9 ) SARs — 0.2 0.1 (3.9 ) Foreign
currency exchange loss related to
Venezuelan subsidiaries
(0.2 ) (2.4 ) (3.4 ) (33.1 ) Charges related to ceasing operations
in Venezuela(2) — — (52.1 ) — Loss on debt redemption and
refinancing activities — 0.7 (0.1 ) (110.0 ) (Loss) gain on sale of
North America foam trays and absorbent
pads business and European food trays
business
(0.2 ) (15.3 ) (1.8 ) 13.4 (Loss) gain related to the sale of other
businesses,
investments and property, plant and
equipment
(0.1 ) 2.1 (1.6 ) 11.1 Charges incurred related to pursuit of
strategic alternatives for
New Diversey
(6.7 ) — (6.7 ) — Other(4) 2.0 (2.1 ) 1.3
(2.5 ) Pre-tax impact of Special Items (25.6 )
(37.8 ) (105.2 ) (246.2 )
Non-U.S. GAAP Total
Company Adjusted EBITDA $ 304.4 $
282.3 $ 1,157.0 $ 1,174.1
_______________________
(1) The supplementary information included in this
press release for 2016 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) Due to the ongoing
challenging economic situation in Venezuela, the Company approved a
program in the second quarter of 2016 to cease operations in the
country. Refer to note 2 on the Condensed Consolidated Statement of
Operations above. (3) This includes accelerated depreciation of
non-strategic assets related to restructuring programs which were
$0.5 million and $0.6 million for the three months and year ended
December 31, 2016. (4) Other Special Items for the three months and
year ended December 31, 2016 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. Other Special Items for the three months and year
ended December 31, 2015 primarily included legal fees associated
with restructuring and acquisitions. (5) Depreciation and
amortization by segment are as follows:
Three Months EndedDecember 31,
Year EndedDecember 31, 2016
2015 2016 2015 Food Care
$ 26.5 $ 26.1 $ 102.4 $ 107.9 Diversey Care 22.7 28.5 94.6 105.5
Product Care 11.5 8.6 40.1 37.4 Other 9.5 0.2
41.1 23.7
Total Company depreciation and
amortization(1) $ 70.2 $
63.4 $ 278.2 $ 274.5
_______________________
(1)
Includes share-based incentive compensation of $16.1
million and $62.9 million for the three months and year ended
December 31, 2016 and $12.1 million and $61.2 million for the three
months and year ended December 31, 2015, respectively.
(6)
Restructuring and other charges by segment is as
follows:
Three
Months EndedDecember 31, Year EndedDecember
31, 2016 2015 2016
2015 Food Care $ 4.7 $ 8.4 $ 6.2 $ 37.9
Diversey Care 2.8 (3.3 ) 3.7 22.2 Product Care 2.2 4.6 2.9 17.2
Other — 0.6 0.1 1.0
Total Company
restructuring and other charges(1) $ 9.7
$ 10.3 $ 12.9 $ 78.3
_______________________
(1)
For the year ended December 31, 2016, restructuring and
other charges excludes $0.3 million related to severance and
termination benefits for employees in our Venezuelan subsidiaries.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
SEGMENT(1)
Three Months Ended December 31, (Unaudited) (In
millions) Food Care Diversey Care
Product Care(5)
Other(5) Total
Company
2015 Net Sales $ 842.3 $ 494.4 $ 400.5
$ 16.7 $ 1,753.9
Volume - Units 16.7 2.0 % 1.8 0.4 % 6.0 1.5 % 1.7 10.2 % 26.2 1.5 %
Price/mix(2) 6.0 0.7 % 12.1 2.4 % (8.0 ) (2.0 ) % (1.0 ) (6.0 ) %
9.1 0.5 % Divestitures
(5.0
)
(0.6 ) % — — % — — % — — % (5.0 ) (0.3
) % Total constant dollar change (Non-U.S. GAAP)(3) 17.7 2.1 % 13.9
2.8 % (13.8 ) (0.5 ) % 0.7 4.2 % 30.3 1.7 % Foreign currency
translation (19.5 ) (2.3 ) % (15.8 ) (3.2 ) %
(4.8 ) (1.2 ) % — — % (40.1 ) (2.3 ) %
Total
change (U.S. GAAP) (1.8 ) (0.2
) % (1.9 ) (0.4 )
% (6.8 ) (1.7 ) %
0.7 4.2 % (9.8 )
(0.6 ) %
2016 Net Sales $
840.5 $ 492.5 $ 393.7 $
17.4 $ 1,744.1 COMPONENTS OF
ORGANIC CHANGE IN NET SALES BY SEGMENT(1)
Three Months Ended December 31, (Unaudited) (In
millions) Food Care Diversey Care Product
Care(5) Other(5) Total
Company
2015 Net Sales $ 842.3 $ 494.4 $ 400.5 $ 16.7 $ 1,753.9 Less:
Divestitures (5.0 ) — — — (5.0 )
2015 Net Sales, Excluding Divestitures (Non-US GAAP) 837.3 494.4
400.5 16.7 1,748.9 Volume - Units 16.7 2.0 % 1.8 0.4 % 6.0
1.5 % 1.7 10.2 % 26.2 1.5 % Price/mix(2) 6.0 0.7 %
12.1 2.4 % (8.0 ) (2.0 ) % (1.0 ) (6.0 ) % 9.1
0.5 % Total Organic change (Non-US GAAP)(4) 22.7 2.7 % 13.9 2.8 %
(2.0 ) (0.5 ) % 0.7 4.2 % 35.3 2.0 % Foreign Currency Translation
(19.5 ) (2.3 ) % (15.8 ) (3.2 ) % (4.8 ) (1.2
) % — — % (40.1 ) (2.3 ) % Total change (Non-US GAAP)
3.2 0.4 % (1.9 ) (0.3 ) % (6.8 ) (1.7 ) %
0.7 4.2 % (4.8 ) (0.3 ) %
2016 Net Sales
$ 840.5 $ 492.5 $ 393.7
$ 17.4 $ 1,744.1
_______________________
(1) The supplementary information included in this
press release for 2016 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 price/mix reported
above includes the net impact of our pricing actions and rebates as
well as the period-to-period change in the mix of products sold.
Also included in our reported price/mix is the net effect of some
of our customers purchasing our products in non-U.S. dollar or euro
denominated countries at selling prices denominated in U.S. dollars
or euros. This primarily arises when we export products from the
U.S. and euro-zone countries. (3) Total constant dollar change is a
non-U.S. GAAP financial measure which excludes the impact of
foreign currency translation. Since we are a U.S. domiciled
company, we translate our foreign-currency-denominated financial
results into U.S. dollars. Due to changes in the value of foreign
currencies relative to the U.S. dollar, translating our financial
results from foreign currencies to U.S. dollars may result in a
favorable or unfavorable impact. It is important that we take into
account the effects of foreign currency translation when we view
our results and plan our strategies. Nonetheless, we cannot control
changes in foreign currency exchange rates. Consequently, when our
management looks at our financial results to measure the core
performance of our business, we exclude the impact of foreign
currency translation by translating our current period results at
prior period foreign currency exchange rates. We also may exclude
the impact of foreign currency translation when making incentive
compensation determinations. As a result, our management believes
that these presentations are useful internally and may be useful to
our investors. (4) Total organic change is a non-U.S. GAAP
financial measure which excludes the impact of foreign currency
translation, as discuss more fully in the footnote above, as well
as divestitures. (5) As of January 1, 2016, our Kevothermal
business was moved from Other to our Product Care Segment. This
resulted in a reclassification of $2.8 million of net sales for the
three months ended December 31, 2015.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
SEGMENT(1)
Year Ended December 31,
(Unaudited)
(In millions) Food Care Diversey Care
Product Care(5) Other(5) Total
2015 Net Sales $ 3,405.1 $ 1,999.1 $
1,553.6 $ 73.7 $ 7,031.5
Volume - Units 34.5 1.0
%
(3.4 ) (0.2 )% 21.3 1.4
%
(2.5 ) (3.4 )% 49.9 0.6
%
Price/mix(2) 26.1 0.8
%
44.3 2.2
%
(29.2 ) (1.9 )% (0.2 ) (0.3 )% 41.0 0.6
%
Divestitures (101.6 ) (3.0 )% — — % — —
% — — % (101.6 ) (1.4 )% Total constant dollar change
(Non-U.S. GAAP)(3) (41.0 ) (1.2 )% 40.9 2.0
%
(7.9 ) (0.5 )%
(2.7
) (3.7 )% (10.7 ) (0.2 )% Foreign currency translation
(142.0 ) (4.2 )% (76.8 ) (3.8 )% (22.0 ) (1.4 )%
(1.7 ) (2.3 )% (242.5 ) (3.4 )%
Total change (U.S.
GAAP) (183.0 ) (5.4 )%
(35.9 ) (1.8 )%
(29.9 ) (1.9 )% (4.4
) (6.0 )% (253.2 )
(3.6 )% 2016
Net Sales $ 3,222.1 $ 1,963.2
$ 1,523.7 $ 69.3 $
6,778.3
COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY SEGMENT(1)
Year Ended December 31, (Unaudited) (In
millions) Food Care Diversey Care
Product Care(5)
Other(5) Total
Company
2015 Net Sales $ 3,405.1 $ 1,999.1 $
1,553.6 $ 73.7 $ 7,031.5
Less: Divestitures (101.6 ) — — —
(101.6 ) 2015 Net Sales, Excluding Divestitures (Non-US
GAAP) 3,303.5 1,999.1 1,553.6 73.7 6,929.9 Volume - Units
34.5 1.0
%
(3.4 ) (0.2 )% 21.3 1.4
%
(2.5 ) (3.4 )% 49.9 0.7 % Price/mix(2) 26.1 0.8
%
44.3 2.2 % (29.2 ) (1.9 )% (0.2 ) (0.3 )%
41.0 0.6 %
Total Organic change (Non-US GAAP)(4)
60.6 1.8
%
40.9 2.0 % (7.9 ) (0.5 )% (2.7 ) (3.7 )% 90.9 1.3
%
Foreign Currency Translation (142.0 ) (4.2 )% (76.8 )
(3.8 )% (22.0 ) (1.4 )% (1.7 ) (2.3 )% (242.5
) (3.5 )% Total change (Non-US GAAP) (81.4 ) (2.4 )%
(35.9 ) (1.8 )% (29.9 ) (1.9 )% (4.4 ) (6.0 )%
(151.6 ) (2.2 )%
2016 Net Sales $ 3,222.1
$ 1,963.2 $ 1,523.7 $
69.3 $ 6,778.3
_______________________
(1) The supplementary information included in this
press release for 2016 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 price/mix reported
above includes the net impact of our pricing actions and rebates as
well as the period-to-period change in the mix of products sold.
Also included in our reported price/mix is the net effect of some
of our customers purchasing our products in non-U.S. dollar or euro
denominated countries at selling prices denominated in U.S. dollars
or euros. This primarily arises when we export products from the
U.S. and euro-zone countries. (3) Total constant dollar change is a
non-U.S. GAAP financial measure which excludes the impact of
foreign currency translation. Since we are a U.S. domiciled
company, we translate our foreign-currency-denominated financial
results into U.S. dollars. Due to changes in the value of foreign
currencies relative to the U.S. dollar, translating our financial
results from foreign currencies to U.S. dollars may result in a
favorable or unfavorable impact. It is important that we take into
account the effects of foreign currency translation when we view
our results and plan our strategies. Nonetheless, we cannot control
changes in foreign currency exchange rates. Consequently, when our
management looks at our financial results to measure the core
performance of our business, we exclude the impact of foreign
currency translation by translating our current period results at
prior period foreign currency exchange rates. We also may exclude
the impact of foreign currency translation when making incentive
compensation determinations. As a result, our management believes
that these presentations are useful internally and may be useful to
our investors. (4) The total organic change excludes the impact of
foreign currency translation and divestitures. These items are
considered non-U.S. GAAP financial measures. (5)
As of January 1, 2016, our Kevothermal
business was moved from Other to our Product Care Segment. This
resulted in a reclassification of $13.1 million of net sales for
the year ended December 31, 2015.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
REGION(1)
Three Months Ended December 31, (Unaudited) (In
millions) North America
EMEA(2) Latin America
APAC(3) Total 2015 Net
Sales $ 720.7 $ 606.6 $ 171.1
$ 255.5 $ 1,753.9 Volume
- Units 30.1 4.2
%
(4.4 ) (0.7 )% (4.2 ) (2.5 ) % 4.7 1.8 % 26.2 1.5
%
Price/mix(4) (20.7 ) (2.9 )% 7.6 1.3
%
23.5 13.7 % (1.3 ) (0.5 ) % 9.1 0.5
%
Divestitures — —
%
(5.0 ) (0.8 )% — — % — —
% (5.0 ) (0.3 )% Total constant dollar change
(Non-U.S. GAAP)(5) 9.4 1.3
%
(1.8 ) (0.2 )% 19.3 11.2 % 3.4 1.3 % 30.3 1.7
%
Foreign currency translation 0.1 —
%
(28.0 ) (4.7 )% (15.4 ) (9.0 ) % 3.2
1.3 % (40.1 ) (2.3 )%
Total change (U.S. GAAP)
9.5 1.3
%
(29.8 ) (4.9 )%
3.9 2.2 % 6.6
2.6 % (9.8 )
(0.6 )%
2016 Net Sales $ 730.2 $ 576.8
$ 175.0 $ 262.1 $
1,744.1 COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY REGION(1) Three Months Ended December
31, (Unaudited) (In millions) North
America EMEA(2) Latin America
APAC(3) Total 2015 Net Sales $ 720.7 $ 606.6 $
171.1 $ 255.5 $ 1,753.9 Less: Divestitures — (5.0 )
— — (5.0 ) 2015 Net Sales,
Excluding Divestitures (Non-US GAAP) 720.7 601.6 171.1 255.5
1,748.9 Volume - Units 30.1 4.2 % (4.4 ) (0.7 )% (4.2 ) (2.5
) % 4.7 1.8 % 26.2 1.5
%
Price/mix(4) (20.7 ) (2.9
)%
7.6 1.3
%
23.5 13.7 % (1.3 ) (0.5 ) % 9.1
0.5
%
Total Organic change (Non-US GAAP)(6) 9.4 1.3
%
3.2 0.6
%
19.3 11.2 % 3.4 1.3 % 35.3 2.0
%
Foreign Currency Translation 0.1 —
%
(28.0 ) (4.7 )% (15.4 ) (9.0 ) % 3.2
1.3
%
(40.1 ) (2.3 )% Total change (Non-US GAAP) 9.5 1.3
%
(24.8 ) (4.1 )% 3.9 2.2 % 6.6
2.6 % (4.8 ) (0.3 )%
2016 Net Sales $ 730.2
$ 576.8 $ 175.0 $
262.1 $ 1,744.1
___________________
(1) The supplementary information included in this
press release for 2016 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) 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. (6) The total organic change excludes the impact of
foreign currency translation and divestitures. These items are
considered non-U.S. GAAP financial measures.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
REGION(1)
Year Ended December 31, (Unaudited) (In
millions) North America
EMEA(2) Latin America
APAC(3) Total 2015 Net
Sales $ 2,923.2 $ 2,410.4 $ 695.8
$ 1,002.1 $ 7,031.5
Volume - Units 73.2 2.5 % 10.7 0.4 % (31.2 ) (4.5 ) % (2.8 )
(0.3 ) % 49.9 0.6 % Price/mix(4) (81.5 ) (2.8 ) % 24.2 1.0 % 96.2
13.8 % 2.1 0.2 % 41.0 0.6 % Divestitures (52.9 ) (1.8 ) %
(48.7 ) (2.0 ) % — — % — — % (101.6 )
(1.4 ) % Total constant dollar change (Non-U.S. GAAP)(5) (61.2 )
(2.1 ) % (13.8 ) (0.6 ) % 65.0 9.3 % (0.7 ) (0.1 ) % (10.7 ) (0.2 )
% Foreign currency translation (9.2 ) (0.3 ) % (94.1
) (3.9 ) % (119.7 ) (17.2 ) % (19.5 ) (1.9 ) %
(242.5 ) (3.4 ) %
Total change (U.S. GAAP)
(70.4 ) (2.4 ) %
(107.9 ) (4.5 ) %
(54.7 ) (7.9 ) %
(20.2 ) (2.0 ) %
(253.2 ) (3.6 ) %
2016 Net
Sales $ 2,852.8 $ 2,302.5 $
641.1 $ 981.9 $ 6,778.3
COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY REGION(1)
Year Ended December 31, (Unaudited) (In
millions) North America
EMEA(2) Latin America
APAC(3) Total 2015 Net
Sales $ 2,923.2 $ 2,410.4 $ 695.8
$ 1,002.1 $ 7,031.5 Less:
Divestitures (52.9 ) (48.7 ) — —
(101.6 ) 2015 Net Sales, Excluding Divestitures (Non-US GAAP)
2,870.3 2,361.7 695.8 1,002.1 6,929.9 Volume - Units 73.2
2.5 % 10.7 0.5 % (31.2 ) (4.5 ) % (2.8 ) (0.3 ) % 49.9 0.7 %
Price/mix(4) (81.5 ) (2.8 ) % 24.2 1.0 % 96.2
13.8 % 2.1 0.2 % 41.0 0.6 % Total Organic change
(Non-US GAAP)(6) (8.3 ) (0.3 ) % 34.9 1.5 % 65.0 9.3 % (0.7 ) (0.1
) % 90.9 1.3 % Foreign Currency Translation (9.2 ) (0.3 ) %
(94.1 ) (4.0 ) % (119.7 ) (17.2 ) % (19.5 )
(1.9 ) % (242.5 ) (3.5 ) % Total change (Non-US GAAP)
(17.5 ) (0.6 ) % (59.2 ) (2.5 ) % (54.7 ) (7.9 ) %
(20.2 ) (2.0 ) % (151.6 ) (2.2 ) %
2016 Net
Sales $ 2,852.8 $ 2,302.5 $
641.1 $ 981.9 $ 6,778.3
___________________
(1) The supplementary information included in this
press release for 2016 is preliminary and subject to change prior
to the filing of our upcoming Quarterly Report on Form 10-K 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.
(6)
The total organic change excludes the impact of foreign currency
translation and divestitures. These items are considered non-U.S.
GAAP financial measures.
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Sealed Air CorporationLori Chaitman, 201-712-7310
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