- Second Quarter 2016 Sales of $1.7
Billion, Net Income of $50 Million and Reported EPS of $0.25
- Second Quarter 2016 Adjusted EPS of
$0.65 and Adjusted EBITDA of $306 Million or 17.7% of Net
Sales
- Updated 2016 Outlook
Sealed Air Corporation (NYSE:SEE) today announced financial
results for second quarter 2016. Commenting on these results,
Jerome A. Peribere, President and Chief Executive Officer, said,
“In the second quarter, we delivered $1.7 billion in net sales by
leveraging growth opportunities in targeted regions and end
markets, offsetting other areas that were challenged by economic
uncertainty. These efforts, coupled with our continued focus on new
product adoption and operational disciplines, resulted in solid
margin performance in our three core divisions. We are delivering
on our 2016 objectives, and expect stronger performance in the
second half of the year. This performance will be primarily driven
by increased demand for our core product portfolio, recently
introduced innovations, and accelerated growth in the global
protein market and e-Commerce sector. We also anticipate less
currency headwinds than previously forecasted.”
Unless otherwise stated, all results compare second quarter 2016
results to second 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 in November 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 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 and certain other infrequent or
one-time items. Please refer to the financial statements included
with this press release for a reconciliation of Non-U.S. GAAP to
U.S. GAAP financial measures.
Second Quarter 2016
Highlights
- Food Care net sales of $802 million
decreased 5.2% as reported. Currency had a negative impact on Food
Care net sales of 4.6%, or $39 million and the divestiture had a
negative impact of 1.7%, or $15 million. On an organic basis, net
sales increased 1.1% due to favorable price/mix of 0.4% and volume
growth of 0.7%. Positive volume trends in North America and Europe,
Middle East and Africa offset ongoing weakness in Latin America.
Adjusted EBITDA of $163 million or 20.3% of net sales was
attributable to favorable price/cost spread, positive volume trends
and restructuring savings, which were more than offset by higher
non-material manufacturing expenses, unfavorable currency
translation, divestitures of non-core assets, and salary and wage
inflation.
- Diversey Care net sales of $532 million
decreased 0.6% as reported and increased 2.4% on a constant dollar
basis. Currency had a negative impact on Diversey Care net sales of
3.0%, or $16 million in the quarter. All regions experienced
positive constant dollar sales growth driven by favorable price/mix
of 2.0% and a slight increase in volumes of 0.4%. Our fastest
growing regions in constant dollar sales were Asia Pacific with
6.8% growth and North America with 2.9% growth. Diversey Care’s
Adjusted EBITDA was $86 million or 16.2% of net sales. Adjusted
EBITDA performance was favorably impacted by a $5.6 million
reimbursement of previously incurred environmental expenses, as
well as favorable price/cost spread and restructuring savings,
which were partially offset by unfavorable currency translation and
salary and wage inflation.
- Product Care net sales of $374 million
in the second quarter decreased 2.5% as reported and 1.5% on a
constant dollar basis. Currency had a negative impact on Product
Care net sales of 1.0%, or $4 million. Sales volume increased 0.4%
despite continued rationalization efforts and ongoing weakness in
the industrial market. Adjusted EBITDA was $79 million or 21.1% of
net sales. This performance was primarily attributable to positive
volume trends, manufacturing efficiencies and continued price
discipline, which were more than offset by salary and wage
inflation and unfavorable currency translation.
Second Quarter 2016 U.S. GAAP
Summary
Net sales of $1.7 billion decreased 3.2% on an as reported
basis. Currency had a negative impact on total net sales of 3.3%,
or $59 million, and the Food Care divestitures had a negative
impact on total sales of 0.8%, or $15 million, in the second
quarter. As reported, Latin America and Asia Pacific declined 11.3%
and 3.5%, respectively. EMEA and North America also declined 1.6%
and 2.5% on an as reported basis.
Net income on a reported basis was $50 million, or $0.25 per
diluted share as compared to $28 million, or $0.13 per diluted
share in the second quarter 2015. Net income in the second quarter
2016 included $79 million of special items, charges related to
ceasing operations in Venezuela, restructuring charges and other
costs associated with our restructuring programs, and a loss on the
remeasurement of our Venezuelan subsidiaries. Net earnings in the
second quarter 2015 included $99 million of special items,
primarily consisting of the loss on debt redemption and refinancing
activities, a loss on the remeasurement of our Venezuelan
subsidiaries, and restructuring charges and other costs associated
with our restructuring programs, partially offset by gains on the
sale of our North American foam trays and absorbent pads
business.
The effective tax rate in the second quarter of 2016 was 59.7%,
compared to the effective tax rate of 34.5% in the second quarter
of 2015. The effective tax rate was negatively impacted by $52
million of charges related to ceasing operations in Venezuela for
which we will receive no tax benefit. We also recorded discrete tax
expense of $24 million, which primarily reflected an increase in
valuation allowances against expiring foreign tax credits and
increases in unrecognized tax benefits.
Second Quarter 2016 Non-U.S. GAAP
Summary
Net sales on an organic basis increased 0.9%. Organic sales are
adjusted for the negative impact of unfavorable currency
translation and Food Care divestitures in North America and Europe.
The Company’s fastest growing region on an organic basis was Latin
America with 8.2%, followed by sales growth in EMEA of 2.5% and
Asia Pacific of 0.7%. North America declined 2.2% in constant
dollars primarily due to formula pricing in the Food Care division,
softness in the industrial market and rationalization efforts in
the Product Care division.
Adjusted EBITDA for the second quarter 2016 was $306 million, or
17.7% of net sales, including a $6.8 million reimbursement received
by the Company of previously incurred environmental expenses, of
which $5.6 million impacted the Diversey Care division. Margin
performance in the second quarter 2016 was attributable to a
favorable price/cost spread, restructuring savings, the
reimbursement of previously incurred environmental expenses, and
positive volume trends. These items were partially offset by $9
million of unfavorable currency translation, divestitures of $3
million as well as salary and wage inflation and higher
non-material manufacturing expenses.
Adjusted EPS was $0.65 for the second quarter 2016. This
compares to Adjusted EPS of $0.60 in the second quarter 2015. The
Adjusted Tax Rate was 29.1% in the second quarter 2016, compared to
28.9% in the second quarter 2015. The Adjusted Tax Rate was
negatively impacted by an unfavorable mix of domestic versus
foreign sourced income.
Cash Flow and Net Debt
Cash flow provided by operating activities in the six months
ended June 30, 2016 was $181 million, which is net of $36 million
of restructuring payments. This compares with cash provided by
operating activities of $456 million in the six months ended June
30, 2015. In March 2015, the Company received a tax refund of $235
million related to the payment of funds in connection with the
Settlement agreement (as defined in our 2015 Annual Report on Form
10-K). Excluding the tax refund, cash flow provided by operating
activities in the first six months of 2015 was $221 million, which
is net of $45 million of restructuring and $18 million of SARs
payments. The anticipated decline in cash flow in the six months
ended June 30, 2016 compared to the same period a year ago was
primarily due to working capital.
Capital expenditures increased as planned to $114 million in the
six months ended June 30, 2016 and compared to $58 million in the
six months ended June 30, 2015. Free Cash Flow, defined as net cash
provided by (used in) operating less capital expenditures, was an
inflow of $68 million in the six months ended June 30, 2016. This
compares to an inflow of $163 million in the six months ended June
30, 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 increased
$122 million to $4.3 billion as of June 30, 2016. This increase in
borrowings primarily resulted from a use of working capital, higher
capital expenditures, and amounts paid for share repurchases and
dividends.
During the second quarter 2016, the Company repurchased
approximately 0.4 million shares for approximately $20 million, and
paid cash dividends of $32 million. In the first half of 2016, the
Company repurchased 1.1 million shares for approximately $52
million, and paid cash dividends of $58 million.
Updated Outlook for Full Year
2016*
The Company updated guidance previously provided on April 28,
2016. For the full year 2016, the Company expects to achieve Net
Sales of approximately $6.85 billion and Adjusted EBITDA in the
range of $1.17 to $1.18 billion. The outlook for Adjusted EPS is
expected to be at the high end of the previous guidance range of
$2.52 to $2.60. Currency is expected to have a negative impact of
approximately $275 million on net sales and $45 million on Adjusted
EBITDA. The outlook assumes an Adjusted Tax Rate of 24%. Adjusted
EPS guidance excludes the impact of special items. The Company
continues to anticipate 2016 Free Cash Flow to be approximately
$550 million, including capital expenditures of approximately $275
million and cash restructuring payments of approximately $110
million.
Conference Call
Information
Date: Thursday, July 28, 2016 Time: 9:00am (ET)
Webcast: www.sealedair.com/investors Conference Dial In: (888)
679-8035 (domestic) (617) 213-4848 (international) Participant
Code: 49357253
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, July 28, 2016 at 3:00pm (ET) through
Saturday, August 27, 2016 at 2:59pm (ET) Webcast:
www.sealedair.com/investors Conference Dial In: (888) 286-8010
(domestic) (617) 801-6888 (international) Participant Code:
13354310
Business
Sealed Air Corporation creates a world that feels, tastes and
works better. In 2015, the Company generated revenue of
approximately $7.0 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 169 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, Adjusted Gross Profit, Adjusted Operating Profit, 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 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,” “Reconciliation of Non-U.S. GAAP Total
Company Adjusted EBITDA to U.S. GAAP Net Earnings from Continuing
Operations,” “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, 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 is based only on information
currently available to us and speaks only as of the date on which
it is made. We undertake no obligation to publicly update any
forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future developments or otherwise.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(1)
(Unaudited)
(In millions, except per share
data)
Three Months Ended Six Months
Ended June 30, June 30, 2016
2015 2016 2015 Net
sales $ 1,727.0 $ 1,785.0 $
3,317.6 $ 3,531.4 Cost of sales(2)
1,065.6 1,121.2 2,066.9 2,218.0
Gross
profit 661.4 663.8 1,250.7 1,313.4
As a % of total net sales 38.3 % 37.2 % 37.7 % 37.2 % Selling,
general and administrative expenses(2) 413.5 415.3 809.5 843.1 As a
% of total net sales 23.9 % 23.3 % 24.4 % 23.9 % Amortization
expense of intangible assets acquired 27.5 23.0 48.9 45.6 Stock
appreciation rights expense(3) (0.1 ) 1.6 0.2 4.5 Restructuring and
other charges(2) 1.9 16.9 1.9 29.6
Operating profit 218.6 207.0 390.2
390.6 Interest expense (54.3 ) (59.0 ) (109.0 ) (117.5 )
Foreign currency exchange loss related to Venezuelan
subsidiaries(4) (1.1 ) (30.5 ) (2.8 ) (29.7 ) Charges related to
Venezuelan subsidiaries(2) (46.0 ) — (46.0 ) — Loss on debt
redemption and refinancing activities(5) — (110.8 ) — (111.3 ) Gain
(loss) on sale of business(6) — 29.2 (1.6 ) 29.2
Other income, net
5.8 7.0 4.5 12.9
Earnings before
income tax provision 123.0 42.9 235.3
174.2 Income tax provision 73.4 14.8
93.8 48.9 Effective income tax rate 59.7 % 34.5 % 39.9 %
28.1 %
Net income $ 49.6 $ 28.1
$ 141.5 $ 125.3 Net earnings per
common share(7): Basic : $
0.25 $ 0.13 $ 0.72 $
0.60 Diluted: 0.25 0.13
0.71 0.59 Dividends per common
share $ 0.16 $ 0.13 $
0.29 $ 0.26 Weighted average number of
common shares outstanding: Basic 195.6
208.5 195.4 208.7
Diluted 197.9 211.3
197.5 211.5
(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-Q 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 $52.1 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 $1.0 million recorded in costs of
sales and the release of cumulative translation adjustment of
approximately $46.0 million recorded in charges related to
Venezuelan subsidiaries.
(3) The remaining amount of cash-settled stock appreciation
rights (“SARs”) were fully vested as of 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 the change, we recorded a
remeasurement loss of $31 million and $30 million in the three and
six months ended June 30, 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 $1 million and $3 million in the three and
six months ended June 30, 2016, respectively.
(5) In June 2015, we issued $400 million of 5.5% senior notes
due 2025 and €400 million of 4.5% senior notes due 2023 and used
the net proceeds of these notes to retire the existing $750 million
of 8.375% senior notes due 2021. The aggregate repurchase price was
$866 million, which primarily included the principle amount of $750
million, premium of $99 million and accrued interest of $17
million. We recognized a total net pre-tax loss of $111 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 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 million.
In November 2015, we completed the sale of our European food trays
business for a pre-tax loss of $13 million and reported an
additional loss of $1.6 million in 2016.
(7) Net earnings per common share are calculated under the
two-class method. See our Annual Report on Form 10-K for period
ended December 31, 2015 for more information on the two-class
method.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED BALANCE
SHEETS(1)
(Unaudited)
(In millions)
June 30, December
31, 2016
2015(1)
Assets Current assets: Cash and cash equivalents $ 297.5 $
358.4 Trade receivables, net 839.9 758.4 Other receivables 177.6
147.5 Inventories 748.0 660.8 Assets held for sale 3.4 10.3 Other
current assets 293.6 280.2
Total
current assets 2,360.0 2,215.6 Property and
equipment, net 980.0 930.7 Goodwill 2,906.8 2,909.5 Intangible
assets, net 764.4 784.3 Other assets, net 515.5
549.9
Total assets $ 7,526.7
$ 7,390.0 Liabilities and
stockholders' equity Current liabilities: Short-term borrowings
$ 281.0 $ 241.9 Current portion of long-term debt 76.6 46.6
Accounts payable 777.6 675.3 Other current liabilities 758.2
843.3
Total current liabilities
1,893.4 1,807.1 Long-term debt, less current portion
4,259.1 4,266.8 Other liabilities 787.2 789.0
Total liabilities 6,939.7
6,862.9 Stockholders' equity 587.0
527.1
Total liabilities and stockholders'
equity $ 7,526.7 $ 7,390.0
(1) 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
$36 million and a decrease in long-term debt of $36
million as of December 31, 2015 on the Condensed Consolidated
Balance Sheets.
CALCULATION OF NET DEBT
(1)
June 30, December 31,
2016
2015(2)
Short-term borrowings $ 281.0 $ 241.9 Current portion
of long-term debt 76.6 46.6 Long-term debt, less current portion
4,259.1 4,266.8 Total debt 4,616.7
4,555.3 Less: cash and cash equivalents (297.5
)
(358.4
)
Net debt $ 4,319.2 $
4,196.9
(1) The supplementary information included in this press release
for 2016 is preliminary and subject to change prior to the filing
of our upcoming Quarterly Report on Form 10-Q 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 $36 million and a decrease in
long-term debt of $36 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)
Six Months Ended June 30, 2016
2015 Revised(2) Net income $ 141.5 $ 125.3
Adjustments to reconcile net earnings to net cash provided by
operating activities(3) 218.6 269.0 Changes in: Trade receivables,
net (83.9 ) (47.9 ) Inventories (82.9 ) (99.1 ) Accounts payable
90.3 107.4 Settlement agreement, and related items (4) — 235.2
Changes in all other operating assets and liabilities (102.4
) (133.8 )
Cash flow provided by operating activities
181.2 456.1 Capital expenditures for property
and equipment (113.5 ) (57.6 ) Proceeds, net from sale of
businesses 7.8 75.6 Business acquired in purchase transactions, net
of cash and cash equivalents acquired — (8.5 ) Proceeds from sales
of property, equipment and other assets 0.4 26.4 Settlement of
foreign currency forward contracts (31.3 ) 39.6
Cash flow (used in) provided by investing activities
(136.6 ) 75.5 Net proceeds from
borrowings 35.0 69.6 Cash used as collateral on borrowing
arrangements 0.3 (14.7 ) Repurchase of common stock (52.0 ) (149.7
) Payments for debt extinguishment and issuance costs — (108.2 )
Excess tax benefit from stock based compensation 6.8 — Dividends
paid on common stock (57.0 ) (54.8 ) Acquisition of common stock
for tax withholding (22.3 ) (7.4 )
Cash flow used in financing
activities
(89.2 ) (265.2 ) Effect of
foreign currency exchange rates on cash and cash equivalents
(16.3 ) (34.3 )
Cash and cash equivalents beginning of period $
358.4 $ 286.4 Net change in cash and cash
equivalents (60.9 ) 232.1
Cash and cash
equivalents end of period $ 297.5 $
518.5 Non-U.S. GAAP Free Cash Flow: Cash flow
from operating activities $ 181.2 $ 456.1 Capital expenditures for
property and equipment (113.5 ) (57.6 )
Free Cash
Flow(5)
$ 67.7 $ 398.5 Settlement
agreement and related items (4) — (235.2 )
Free
Cash Flow excluding Settlement agreement and related items
$ 67.7 $ 163.3 Additional Cash
Flow Information: Interest payments, net of amounts capitalized $
108.0 $ 131.4 Income tax payments $ 59.9 $ 52.8 SARs payments (less
amounts included in restructuring payments) $ 1.9 $ 18.3
Restructuring payments (including associated costs) $ 36.4 $ 45.2
(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-Q with the Securities
and Exchange Commission.
(2) For the six months ended June 30, 2015, certain amounts
related to the settlement of a net investment hedge and foreign
currency gains and losses were misclassified on the Condensed
Consolidated Statement of Cash Flows. The reclassification of these
items resulted in a decrease in cash provided by operating
activities of $6 million, an increase to cash provided by investing
activities of $3 million, and a decrease of $4 million due to the
effect of foreign currency exchange rate changes in cash.
Additionally, certain amounts related to compensating balance
arrangements were misclassified in the Condensed Consolidated
Balance Sheet and Condensed Consolidated Statement of Cash Flows.
The reclassification resulted in $14 million decrease in financing
activities, $36 million decrease in Cash and cash equivalents
beginning of period, and $51 million decrease in Cash and cash
equivalents end of period.
(3) 2016 primarily consists of depreciation and amortization of
$107 million, share based compensation expense of $31 million,
profit sharing expense of $17 million, charges related to ceasing
operations in Venezuela of $46 million, loss on sale of businesses
of $2 million, a remeasurement loss of $3 million, partially offset
by excess tax benefits related to stock based compensation of $7
million. 2015 primarily consists of loss on bond redemption of $111
million, depreciation and amortization of $109 million, share-based
compensation expense of $33 million, and a remeasurement loss of
$30 million partially offset by a gain on sale of business of $36
million.
(4) 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.
(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 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 June
30, 2016 2015
U.S.GAAPAsReported
Less:SpecialItems(2)
Non-U.S.GAAPAdjusted
U.S.GAAPAsReported
Less:SpecialItems(2)
Non-U.S.GAAPAdjusted
Net sales $
1,727.0 $ — $ 1,727.0 $
1,785.0 $ — $ 1,785.0 Cost of
sales(3) 1,065.6 (1.5 ) 1,064.1 1,121.2
(1.6 ) 1,119.6
Gross profit 661.4
1.5 662.9 663.8 1.6 665.4 As a %
of total net sales 38.3 % 38.4 % 37.2 % 37.3 % Selling, general and
administrative expenses(3) 413.5 (7.6 ) 405.9 415.3 (7.8 ) 407.5 As
a % of total net sales 23.9 % 23.5 % 23.3 % 22.8 % Amortization
expense of intangible assets acquired 27.5
— 27.5 23.0
— 23.0 Stock appreciation rights (benefit) expense (0.1 )
0.1
— 1.6 (1.6 )
— Restructuring and other charges(3)
1.9 (1.9 ) — 16.9 (16.9 )
—
Operating profit 218.6 10.9 229.5
207.0 27.9 234.9 As a % of total net sales
12.7 % 13.3 % 11.6 % 13.2 % Interest expense (54.3 ) — (54.3 )
(59.0 ) — (59.0 ) Foreign currency exchange loss related to
Venezuelan subsidiaries
(1.1 ) 1.1 — (30.5 ) 30.5 — Charges related to Venezuelan
subsidiaries(3) (46.0 ) 46.0 — — — — Loss on debt redemption and
refinancing activities — — — (110.8 ) 110.8 — Gain (Loss) on sale
of business — — — 29.2 (29.2 ) — Other income (expense), net
5.8 0.8 6.6 7.0 (3.9 ) 3.1
Earnings before income tax provision 123.0
58.8 181.8 42.9 136.1 179.0
Income tax (benefit) provision 73.4 (20.5 )
52.9 14.8 37.0 51.8 Effective income tax
rate(4) 59.7 % 29.1 % 34.5 %
28.9 %
Net income $ 49.6
$ 79.3 $ 128.9 $ 28.1
$ 99.1 $ 127.2 Net earnings per
common share(5): Diluted $
0.25 $ 0.40 $ 0.65 $
0.13 $ 0.47 $ 0.60
Weighted average number of common shares
outstanding:
Diluted 197.9 197.9
197.9 211.3 211.3
211.3 Non-U.S. GAAP Adjusted EBITDA:
Non-U.S. GAAP Adjusted Operating Profit $
229.5 $ 234.9 Other income (expense), net 6.6
3.1 Depreciation and amortization(3)(6) 74.3 69.3 Accelerated
depreciation and amortization of fixed
assets and intangible assets for
Venezuelan
subsidiaries, included in depreciation
and
amortization(3)
(4.8 ) — Write down of non-strategic assets, included in
depreciation and amortization
— 0.3
Non-U.S. GAAP Adjusted EBITDA $
305.6 $ 307.6 As a % of total net sales 17.7 %
17.2 %
__________________
(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-Q with the Securities
and Exchange Commission.
(2) Special items are certain specified infrequent,
non-operational or one-time costs/credits that are included in our
U.S. GAAP reported results. These special items include charges
related to ceasing operations in Venezuela, restructuring charges
and other costs associated with our restructuring programs, and a
loss on the remeasurement of our Venezuelan subsidiaries. See the
‘Reconciliation of Non-U.S. GAAP Total Company Adjusted EBITDA to
U.S. GAAP Net Earnings from Continuing Operations’ table on page 15
for a description of the special items.
(3) 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 $52.1 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 $1.0 million recorded in costs of
sales and the release of cumulative translation adjustment of
approximately $46.0 million recorded in charges related to
Venezuelan subsidiaries.
(4) Our Adjusted Tax Rate is defined as the effective income tax
rate on Non-U.S. GAAP Adjusted Net Earnings.
(5) Net earnings per common share are calculated under two-class
method. See our Annual Report on Form 10-K for period ended
December 31, 2015 for more information on the two-class method.
(6) Depreciation and amortization includes:
Three
Months Ended June 30, 2016
2015 Depreciation of property, plant and equipment $ 30.0 $
31.4 Amortization of intangible assets acquired 27.5 23.0
Amortization of deferred share-based compensation 16.8
14.9
Total $ 74.3 $ 69.3
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)
Six Months Ended June 30,
2016 2015 U.S. GAAP
As Reported
Less:
Special Items(2)
Non-U.S. GAAP Adjusted U.S. GAAP
As Reported
Less:
Special Items(2)
Non-U.S. GAAP Adjusted
Net sales $ 3,317.6 $ — $
3,317.6 $ 3,531.4 $ — $
3,531.4 Cost of sales(3) 2,066.9 (2.7 )
2,064.2 2,218.0 (2.5 ) 2,215.5
Gross
profit 1,250.7 2.7 1,253.4 1,313.4
2.5 1,315.9 As a % of total net sales 37.7 % 37.8 %
37.2 % 37.3 % Selling, general and administrative expenses(3) 809.5
(13.5 ) 796.0 843.1 (16.5 ) 826.6 As a % of total net sales 24.4 %
24.0 % 23.9 % 23.4 % Amortization expense of intangible assets
acquired 48.9
— 48.9 45.6
— 45.6 Stock appreciation
rights expense 0.2 (0.2 )
— 4.5 (4.5 )
—
Restructuring and other charges(3) 1.9 (1.9 )
— 29.6 (29.6 ) —
Operating profit
390.2 18.3 408.5 390.6 53.1
443.7 As a % of total net sales 11.8 % 12.3 % 11.1 % 12.6 %
Interest expense (109.0 ) — (109.0 ) (117.5 ) — (117.5 ) Foreign
currency exchange loss related to
Venezuelan subsidiaries
(2.8 ) 2.8 — (29.7 ) 29.7 — Charges related to Venezuelan
subsidiaries(3) (46.0 ) 46.0 — — — — Loss on debt redemption and
refinancing activities — — — (111.3 ) 111.3 — Gain (loss) on sale
of business (1.6 ) 1.6 — 29.2 (29.2 ) — Other (expense) income, net
4.5 2.8 7.3 12.9 (6.9 )
6.0
Earnings before income tax provision 235.3
71.5 306.8 174.2
158.0 332.2 Income tax provision 93.8
(14.1 ) 79.7 48.9 41.5 90.4
Effective income tax rate(4) 39.9 %
26.0 % 28.1 % 27.2 %
Net income
$ 141.5 85.6 $ 227.1
$ 125.3 $ 116.5 $ 241.8
Net earnings per common share(5):
Diluted: $ 0.71 $ 0.44 $
1.15 $ 0.59 $ 0.55 $
1.14 Weighted average number of common shares
outstanding:
Diluted 197.5 197.5
197.5 211.5 211.5
211.5 Non-U.S. GAAP Adjusted EBITDA:
Non-U.S. GAAP Adjusted Operating Profit $
408.5 $ 443.7 Other income (expense), net 7.3
6.0 Depreciation and amortization(3)(6) 137.8 142.4 Accelerated
depreciation and amortization of fixed
assets and intangible assets for
Venezuelan
subsidiaries, included in depreciation
and
amortization(3)
(4.8 ) — Write down of non-strategic assets, included in
depreciation and amortization
(0.1 ) (0.3 )
Non-U.S. GAAP Adjusted EBITDA
$ 548.7 $ 591.8 As a % of total net
sales 16.5 % 16.8 %
__________________
(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-Q with the Securities
and Exchange Commission.
(2) Special items are certain specified infrequent,
non-operational or one-time costs/credits that are included in our
U.S. GAAP reported results. These special items include charges
related to ceasing operations in Venezuela, restructuring charges
and other costs associated with our restructuring programs, and a
loss on the remeasurement of our Venezuelan subsidiaries, and
gains/losses on sale of businesses. See the ‘Reconciliation of
Non-U.S. GAAP Total Company Adjusted EBITDA to U.S. GAAP Net
Earnings from Continuing Operations’ table on page 15 for a
description of the special items.
(3) 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 $52.1 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 $1.0 million recorded in costs of
sales and the release of cumulative translation adjustment of
approximately $46.0 million recorded in charges related to
Venezuelan subsidiaries.
(4) Our Adjusted Tax Rate is defined as the effective income tax
rate on Non-U.S. GAAP Adjusted Net Earnings.
(5) Net earnings per common share are calculated under two-class
method. See our Annual Report on Form 10-K for period ended
December 31, 2015 for more information on the two-class method.
(6) Depreciation and amortization includes:
Six
Months Ended June 30, 2016
2015 Depreciation of property, plant and equipment $ 57.7 $
63.6 Amortization of intangible assets acquired 48.9 45.6
Amortization of deferred share-based compensation 31.2
33.2
Total $ 137.8 $
142.4
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
SEGMENT INFORMATION(1)
(Unaudited)
(In millions)
Three Months Ended Six
Months Ended June 30, % June
30, % 2016
2015(2)
Change 2016
2015(2)
Change Net Sales: Food Care $
802.3 $ 846.6 (5.2 ) % $ 1,567.0 $ 1,726.4 (9.2 ) % As a % of Total
Company net sales 46.5 % 47.4 % 47.2 % 48.9 % Diversey Care 531.9
535.0 (0.6 ) % 973.3 1,002.9 (3.0 ) % As a % of Total Company net
sales 30.8 % 30.0 % 29.3 % 28.4 % Product Care 374.2 383.9 (2.5 ) %
741.4 763.8 (2.9 ) % As a % of Total Company net sales 21.7 % 21.5
% 22.3 % 21.6 % Other 18.6 19.5 (4.6 )
% 35.9 38.3 (6.3 ) %
Total Company
Net Sales $ 1,727.0 $ 1,785.0
(3.2 ) %
$ 3,317.6
$ 3,531.4 (6.1 ) %
Three
Months Ended Six Months Ended
June 30, % June 30, %
2016
2015(2)
Change 2016
2015(2)
Change Adjusted EBITDA: Food Care $ 162.8 $
173.7 (6.3 ) % $ 310.6 $ 364.2 (14.7 ) % Adjusted EBITDA Margin
20.3 % 20.5 % 19.8 % 21.1 % Diversey Care 86.2 69.0 24.9 % 122.5
110.1 11.3 % Adjusted EBITDA Margin 16.2 % 12.9 % 12.6 % 11.0 %
Product Care 78.8 79.6 (1.0 ) % 155.9 156.0 (0.1 ) % Adjusted
EBITDA Margin 21.1 % 20.7 % 21.0 % 20.4 % Other (22.2 )
(14.7 ) 51.0 % (40.3 ) (38.5 )
4.7 %
Non-U.S. GAAP Total Company
Adjusted EBITDA
$ 305.6 $ 307.6 (0.7
) %
$ 548.7 $ 591.8
(7.3 ) % Adjusted EBITDA Margin 17.7 % 17.2 % 16.5 %
16.8 %
(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-Q with the Securities
and Exchange Commission.
(2) As of January 1, 2016, our Kevothermal business was moved
from Other to our Product Care division. This resulted in a
reclassification of $3 million of net sales and less than $1
million of adjusted EBITDA for the three months ended June 30, 2015
and $6 million of net sales and less than $2 million of adjusted
EBITDA for the six months ended June 30, 2015.
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)
(In millions)
Three Months Ended
Six Months Ended June 30, June 30, 2016
2015 2016 2015
Non-U.S. GAAP Total Company Adjusted EBITDA $
305.6 $ 307.6 $ 548.7 $
591.8 Depreciation and amortization (2)(4) (74.3 ) (69.3 )
(137.8 ) (142.4 ) Special items:
Accelerated depreciation of non-strategic
assets related to restructuring programs
0.1 (0.3 ) 0.1 0.3
Accelerated depreciation and amortization
of fixed assets and intangible assets for Venezuelan
subsidiaries(2)
4.8 — 4.8 — Restructuring and other charges(2)(5) (1.6 ) (16.9 )
(1.6 ) (29.6 )
Other restructuring associated costs
included in cost of sales and selling, general and administrative
expenses
(5.2 ) (10.7 ) (11.3 ) (19.2 ) SARs 0.1 (1.6 ) (0.2 ) (4.5 )
Foreign currency exchange (loss) gains
related to Venezuelan subsidiaries
(1.1 ) (30.5 ) (2.8 ) (29.7 ) Charges related to ceasing operations
in Venezuela(2) (52.1 ) — (52.1 ) — Loss on debt redemption and
refinancing activities — (110.8 ) — (111.3 )
Gain (loss) on sale of North America foam
trays and absorbent pads business and European food trays
business
— 29.2 (1.6 ) 29.2
Gain (loss) related to the sale of other
businesses, investments and property, plant and equipment
(0.4 ) 5.3 (2.1 ) 8.8 Other(3) 1.4 (0.1 ) 0.2 (1.7 ) Interest
expense (54.3 ) (59.0 ) (109.0 ) (117.5 ) Income tax provision
73.4 14.8 93.8 48.9
U.S. GAAP net
income $ 49.6 $ 28.1 $
141.5 $ 125.3
(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-Q 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 $52 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
$4.7 million recorded in selling, general and administrative
expenses, inventory reserves of $1.0 million recorded in costs of
sales and the release of cumulative translation adjustment of
approximately $46.0 million recorded in charges related to
Venezuelan subsidiaries.
(3) Other special items for the three and six months ended June
30, 2016 primarily included a reduction in a non-income tax reserve
based on completion of an audit partially offset by legal fees
associated with restructuring and acquisitions. Other special items
for the three and six months ended June 30, 2015 primarily included
legal fees associated with restructuring and acquisitions.
(4) Depreciation and amortization by segment are as follows:
Three Months Ended Six
Months Ended June 30, June 30, 2016
2015 2016
2015 Food Care $ 24.5 $ 26.8 $ 50.2 $ 55.3 Diversey
Care 25.0 25.2 48.0 51.3 Product Care 9.3 9.4 18.9 19.5 Other
15.5 7.9 20.7 16.3
Total Company
depreciation and amortization(1) $ 74.3
$ 69.3 $ 137.8 $ 142.4
(1) Includes share-based incentive compensation of $16.8 million
and $31.2 million for the three and six months ended June 30, 2016
and $14.9 million and $33.2 million for the three and six months
ended June 30, 2015, respectively.
(5) Restructuring and other charges by segment is as
follows:
Three Months Ended Six
Months Ended June 30, June 30, 2016
2015 2016
2015 Food Care $ 0.7 $ 7.2 $ 0.7 $ 14.1 Diversey Care
0.5 6.3 0.5 9.5 Product Care 0.4 3.3 0.4 5.9 Other —
0.1 — 0.1
Total Company restructuring and other
charges(1) $ 1.6 $ 16.9
$ 1.6 $ 29.6
(1) For the three and six months ended June 30, 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 June 30,
(Unaudited) (In millions) Food Care
Diversey Care Product Care(4)
Other(4) Total
Company
2015 Net Sales $ 846.6 $ 535.0 $ 383.9
$ 19.5 $ 1,785.0 Volume - Units
5.6 0.7 % 2.4 0.4 % 1.5 0.4 % (1.0 ) (5.1 ) % 8.5 0.5 % Price/mix
(2) 3.7 0.4 % 10.5 2.0 % (7.4 ) (1.9 ) % 0.3 1.5 % 7.1 0.4 %
Divestitures (14.8 ) (1.7 ) % — — %
— — % — — % (14.8 ) (0.8
) % Total constant dollar change (Non-U.S. GAAP)(3) (5.5 ) (0.6 ) %
12.9 2.4 % (5.9 ) (1.5 ) % (0.7 ) (3.6 ) % 0.8 0.1 % Foreign
currency translation (38.8 ) (4.6 ) % (16.0 )
(3.0 ) % (3.8 ) (1.0 ) % (0.2 )
(1.0 ) % (58.8 ) (3.3 ) %
Total change (U.S.
GAAP) (44.3 ) (5.2 )
% (3.1 ) (0.6 )
% (9.7 ) (2.5 )
% (0.9 ) (4.6 )
% (58.0 ) (3.2 )
%
2016 Net Sales $ 802.3 $
531.9 $ 374.2 $ 18.6 $
1,727.0 COMPONENTS OF ORGANIC CHANGE IN NET SALES
BY SEGMENT(1) Three Months Ended
June 30, (Unaudited) (In millions) Food Care
Diversey Care Product Care(4)
Other(4) Total
Company
2015 Net Sales $ 846.6 $ 535.0 $ 383.9
$ 19.5 $ 1,785.0 Less: Divestitures
(14.8 ) — — — (14.8 ) 2015 Net
Sales, Excluding Divestitures (Non-US GAAP) 831.8 535.0 383.9 19.5
1,770.2 Volume - Units 5.6 0.7 % 2.4 0.4 % 1.5 0.4 % (1.0 )
(5.1 ) % 8.5 0.5 % Price/mix (2) 3.7 0.4 %
10.5 2.0 % (7.4 ) (1.9 ) % 0.3
1.5 % 7.1 0.4 % Total Organic change (Non-US GAAP)
(3) 9.3 1.1 % 12.9 2.4 % (5.9 ) (1.5 ) % (0.7 ) (3.6 ) % 15.6 0.9 %
Foreign Currency Translation (38.8 ) (4.6 ) %
(16.0 ) (3.0 ) % (3.8 ) (1.0 ) % (0.2 )
(1.0 ) % (58.8 ) (3.3 ) % Total change (Non-US
GAAP) (29.5 ) (3.5 ) % (3.1 ) (0.6 ) %
(9.7 ) (2.5 ) % (0.9 ) (4.6 ) %
(43.2 ) (2.4 ) %
2016 Net Sales $
802.3 $ 531.9 $ 374.2 $
18.6 $ 1,727.0
________________________
(1) The supplementary information included in this press release
for 2016 is preliminary and subject to change prior to the filing
of our upcoming Quarterly Report on Form 10-Q with the Securities
and Exchange Commission.
(2) Our price/mix reported above includes the net impact of our
pricing actions and rebates as well as the period-to-period change
in the mix of products sold. Also included in our reported
price/mix is the net effect of some of our customers purchasing our
products in non-U.S. dollar or euro denominated countries at
selling prices denominated in U.S. dollars or euros. This
primarily arises when we export products from the U.S. and
euro-zone countries.
(3) 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.
(4) As of January 1, 2016, our Kevothermal business was moved
from Other to our Product Care division. This resulted in a
reclassification of $3 million of net sales and less than $1
million of adjusted EBITDA for the three months ended June 30,
2015.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
SEGMENT(1)
Six Months Ended June 30, (Unaudited)
Food Care Diversey Care
Product Care(4)
Other(4)
Total 2015 Net Sales $ 1,726.4 $
1,002.9 $ 763.8 $ 38.3 $ 3,531.4
Volume - Units 18.4 1.1 % 1.3 0.1 % 5.2 0.7 % (1.9 )
(5.0 ) % 23.0 0.7 % Price/mix (2) 9.6 0.6 % 18.4 1.8 % (12.2 ) (1.6
) % 1.1 2.9 % 16.9 0.5 % Divestitures (81.9 ) (4.7 )
% — — % — — % — — %
(81.9 ) (2.3 ) % Total constant dollar change
(Non-U.S. GAAP)(3) (53.9 ) (3.0 ) % 19.7 1.9 % (7.0 ) (0.9 ) % (0.8
) (2.1 ) % (42.0 ) (1.1 ) % Foreign currency translation
(105.5 ) (6.2 ) % (49.3 ) (4.9 ) %
(15.4 ) (2.0 ) % (1.6 ) (4.2 ) % (171.8
) (5.0 ) %
Total change (U.S. GAAP)
(159.4 ) (9.2 ) %
(29.6 ) (3.0 ) %
(22.4 ) (2.9 ) %
(2.4 ) (6.3 ) %
(213.8 ) (6.1 ) %
2016 Net Sales $ 1,567.0 $ 973.3
$ 741.4 $ 35.9 $ 3,317.6
COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY SEGMENT(1)
Six Months Ended June 30, (Unaudited)
(In millions) Food Care Diversey Care
Product Care(4) Other(4)
Total
Company
2015 Net Sales $ 1,726.4 $ 1,002.9 $
763.8 $ 38.3 $ 3,531.4 Less:
Divestitures (81.9 ) — — — (81.9
) 2015 Net Sales, Excluding Divestitures (Non-US GAAP) 1,644.5
1,002.9 763.8 38.3 3,449.5 Volume - Units 18.4 1.1 % 1.3 0.1
% 5.2 0.7 % (1.9 ) (5.0 ) % 23.0 0.7 % Price/mix (2) 9.6
0.6 % 18.4 1.8 % (12.2 ) (1.6 )
% 1.1 2.9 % 16.9 0.5 % Total Organic
change (Non-US GAAP) (4) 28.0 1.7 % 19.7 1.9 % (7.0 ) (0.9 ) % (0.8
) (2.1 ) % 39.9 1.2 % Foreign Currency Translation (105.5 )
(6.3 ) % (49.3 ) (4.9 ) % (15.4 )
(2.0 ) % (1.6 ) (4.2 ) % (171.8 )
(5.0 ) % Total change (Non-US GAAP) (77.5 )
(4.6 ) % (29.6 ) (3.0 ) % (22.4 ) (2.9
) % (2.4 ) (6.3 ) % (131.9 ) (3.8 ) %
2016 Net Sales $ 1,567.0 $
973.3 $ 741.4 $ 35.9 $
3,317.6
________________________
(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-Q with the Securities
and Exchange Commission.
(2) Our price/mix reported above includes the net impact of our
pricing actions and rebates as well as the period-to-period change
in the mix of products sold. Also included in our reported
price/mix is the net effect of some of our customers purchasing our
products in non-U.S. dollar or euro denominated countries at
selling prices denominated in U.S. dollars or euros. This
primarily arises when we export products from the U.S. and
euro-zone countries.
(3) 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.
(4) As of January 1, 2016, our Kevothermal business was moved
from Other to our Product Care division. This resulted in a
reclassification of $6 million of net sales and less than $2
million of adjusted EBITDA for the six months ended June 30,
2015.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
REGION(1)
Three Months Ended June 30, (Unaudited)
(In millions) North America
EMEA(2) Latin America
APAC(3) Total 2015 Net Sales $ 738.8
$ 617.2 $ 181.2 $ 247.8 $ 1,785.0
Volume - Units 9.0 1.2 % 7.8 1.3 % (8.7 ) (4.8 ) %
0.4 0.2 % 8.5 0.5 % Price/mix (24.8 ) (3.4 ) % 7.2 1.2 % 23.5 13.0
% 1.2 0.5 % 7.1 0.4 % Divestitures — — % (14.8
) (2.4 ) % — — % — — %
(14.8 ) (0.8 ) % Total constant dollar change (Non-U.S.
GAAP) (15.8 ) (2.2 ) % 0.2 0.1 % 14.8 8.2 % 1.6 0.7 % 0.8 0.1 %
Foreign currency translation (2.7 ) (0.3 ) %
(10.3 ) (1.7 ) % (35.4 ) (19.5 ) %
(10.4 ) (4.2 ) % (58.8 ) (3.3 ) %
Total
change (U.S. GAAP) (18.5 )
(2.5 ) % (10.1 )
(1.6 ) % (20.6 )
(11.3 ) % (8.8 )
(3.5 ) % (58.0 )
(3.2 ) %
2016 Net Sales $
720.3 $ 607.1 $ 160.6 $
239.0 $ 1,727.0 COMPONENTS OF ORGANIC
CHANGE IN NET SALES BY REGION(1)
Three Months Ended June 30, (Unaudited) (In millions)
North America EMEA(2) Latin
America APAC(3) Total 2015
Net Sales $ 738.8 $ 617.2 $ 181.2 $ 247.8
$ 1,785.0 Less: Divestitures — (14.8 )
— — (14.8 ) 2015 Net Sales, Excluding Divestitures
(Non-US GAAP) 738.8 602.4 181.2 247.8 1,770.2 Volume - Units
9.0 1.2 % 7.8 1.3 % (8.7 ) (4.8 ) % 0.4 0.2 % 8.5 0.5 % Price/mix
(24.8 ) (3.4 ) % 7.2 1.2 % 23.5
13.0 % 1.2 0.5 % 7.1 0.4 % Total
Organic change (Non-US GAAP) (4) (15.8 ) (2.2 ) % 15.0 2.5 % 14.8
8.2 % 1.6 0.7 % 15.6 0.9 % Foreign Currency Translation (2.7
) (0.3 ) % (10.3 ) (1.7 ) % (35.4 )
(19.5 ) % (10.4 ) (4.2 ) % (58.8 )
(3.3 ) % Total change (Non-US GAAP) (18.5 )
(2.5 ) % 4.7 0.8 % (20.6 ) (11.3 ) %
(8.8 ) (3.5 ) % (43.2 ) (2.4 ) %
2016 Net Sales $ 720.3 $ 607.1
$ 160.6 $ 239.0 $ 1,727.0
________________________
(1) The supplementary information included in this press release
for 2016 is preliminary and subject to change prior to the filing
of our upcoming Quarterly Report on Form 10-Q with the Securities
and Exchange Commission.
(2) EMEA consists of Europe, Middle East, Africa and Turkey.
(3) APAC refers collectively to our Asia Pacific region. This
region consists of i) Greater China, ii) India/Southeast Asia and
iii) Australia, New Zealand, Japan and Korea.
(4) 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)
Six Months Ended June 30, (Unaudited) North
America EMEA(2) Latin
America APAC(3) Total 2015
Net Sales $ 1,476.1 $ 1,197.9 $ 358.9 $ 498.5
$ 3,531.4 Volume - Units 15.8 1.1 % 22.6 1.9 %
(16.8 ) (4.7 ) % 1.4 0.3 % 23.0 0.7 % Price/mix (45.1 ) (3.1 ) %
11.8 1.0 % 48.0 13.4 % 2.2 0.4 % 16.9 0.5 % Divestitures
(52.9 ) (3.6 ) (29.0 ) (2.4 ) % —
— % — — % (81.9 ) (2.3 ) % Total
constant dollar change (Non-U.S. GAAP) (82.2 ) (5.6 ) % 5.4 0.5 %
31.2 8.7 % 3.6 0.7 % (42.0 ) (1.1 ) % Foreign currency translation
(9.6 ) (0.6 ) % (48.3 ) (4.1 ) %
(85.1 ) (23.7 ) % (28.8 ) (5.8 ) %
(171.8 ) (5.0 ) %
Total change (U.S. GAAP)
(91.8 ) (6.2 ) %
(42.9 ) (3.6 ) %
(53.9 ) (15.0 ) %
(25.2 ) (5.1 ) %
(213.8 ) (6.1 ) %
2016 Net Sales $ 1,384.3 $
1,155.0 $ 305.0 $ 473.3 $
3,317.6
COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY REGION(1)
Six Months Ended June 30, (Unaudited) (In
millions) North America EMEA(2)
Latin America APAC(3)
Total 2015 Net Sales $ 1,476.1 $ 1,197.9 $
358.9 $ 498.5 $ 3,531.4 Less: Divestitures
(52.9 ) (29.0 ) — — (81.9 ) 2015
Net Sales, Excluding Divestitures (Non-US GAAP) 1,423.2 1,168.9
358.9 498.5 3,449.5 Volume - Units 15.8 1.1 % 22.6 1.9 %
(16.8 ) (4.7 ) % 1.4 0.3 % 23.0 0.7 % Price/mix (45.1 )
(3.1 ) % 11.8 1.0 % 48.0 13.4 %
2.2 0.4 % 16.9 0.5 % Total Organic
change (Non-US GAAP) (4) (29.3 ) (2.0 ) % 34.4 2.9 % 31.2 8.7 % 3.6
0.7 % 39.9 1.2 % Foreign Currency Translation (9.6 )
(0.6 ) % (48.3 ) (4.1 ) % (85.1 ) (23.7
) % (28.8 ) (5.8 ) % (171.8 ) (5.0 ) %
Total change (Non-US GAAP) (38.9 ) (2.6 ) %
(13.9 ) (1.2 ) % (53.9 ) (15.0 ) %
(25.2 ) (5.1 ) % (131.9 ) (3.8 ) %
2016 Net Sales $ 1,384.3 $
1,155.0 $ 305.0 $ 473.3 $
3,317.6
________________________
(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-Q with the Securities
and Exchange Commission.
(2) EMEA consists of Europe, Middle East, Africa and Turkey.
(3) APAC refers collectively to our Asia Pacific region. This
region consists of i) Greater China, ii) India/Southeast Asia and
iii) Australia, New Zealand, Japan and Korea.
(4) 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160728005495/en/
Sealed Air CorporationInvestors:Lori Chaitman, 201-703-4161
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