- Third Quarter 2016 Sales of $1.7
Billion, Net Income of $163 Million and Reported EPS of $0.83
- Third Quarter 2016 Adjusted EPS of
$0.71 and Adjusted EBITDA of $304 Million or 17.7% of Net
Sales
- Updated Outlook for Full Year 2016;
Re-affirmed $550 million Free Cash Flow Guidance
- Announced on October 17, 2016 Plan to
Pursue Tax-Free Spin-Off of Diversey Care and Related Hygiene
Solutions Business
Sealed Air Corporation (NYSE:SEE) today announced financial
results for third quarter 2016. Commenting on these results, Jerome
A. Peribere, President and Chief Executive Officer, said, “In the
third quarter, we delivered strong margin performance and cash flow
generation as a result of our operating discipline and focus on
working capital management. As we were expecting, we experienced
notable increasing demand for our protein packaging, e-Commerce and
advanced hygiene solutions in North America and targeted countries
throughout Europe and Asia. These positive trends were offset by
macro headwinds in emerging countries, Australia and the industrial
market. Despite softer sales growth in the quarter and for the full
year 2016, we continue to expect performance to improve on both the
top and bottom line in Q4 and throughout 2017 as we continue
building a robust pipeline for our innovative solutions and
capitalize on end market growth opportunities.”
Peribere continued, “Since 2013, we have made significant
progress improving the quality of earnings, delivering leading
innovations to our customers, and building a performance-based
winning culture. As we look beyond 2016, we believe pursuing a
tax-free spin-off of Diversey Care and our related hygiene business
is the next step in our strategic transformation and will enable us
to unlock meaningful value for customers and shareholders. This
transaction would create two industry-leading, publicly-traded
companies with unique and compelling investment opportunities,
accelerated growth strategies and disciplined, returns-based
approaches to capital allocation.”
Unless otherwise stated, all results compare third quarter 2016
results to third 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.
Third Quarter 2016
Highlights
- Food Care net sales of $815 million
decreased 2.6% as reported. Currency had a negative impact on Food
Care net sales of 2.0%, or $17 million, and the divestiture had a
negative impact of 1.8%, or $15 million. On an organic basis, net
sales increased 1.2% due to favorable price/mix of 1.3% and
relatively flat volume growth. Volume growth of more than 3% in
North America and positive trends in EMEA were offset by weakness
in Latin America, and Asia Pacific. Adjusted EBITDA of $173 million
or 21.2% of net sales was attributable to favorable price/cost
spread and restructuring savings, which were partially offset by
higher non-material manufacturing expenses, unfavorable currency
translation and divestitures of non-core assets.
- Diversey Care net sales of $497 million
decreased 0.8% as reported and increased 1.5% on a constant dollar
basis. Currency had a negative impact on Diversey Care net sales of
2.3%, or $12 million in the quarter. Price/mix of 2.8%, which was
favorable across all the regions, was partially offset by lower
volumes of 1.3%. North America, Europe and Asia Pacific delivered
positive volume trends that were offset by declines in MEA and
Latin America. Diversey Care’s Adjusted EBITDA was $65 million or
13.0% of net sales. Adjusted EBITDA performance was attributable to
favorable price/cost spread and restructuring savings, which were
offset by targeted investments in marketing and research and
development, salary and wage inflation and lower volumes.
- Product Care net sales of $389 million
in the third quarter were relatively flat as reported and on a
constant dollar basis. Currency had a negative impact on Product
Care net sales of 0.5%, or $2 million. Sales volume increased 2.6%,
which was offset by unfavorable price/mix of 2.3%. North America
volumes were up 6% as a result of continued strength in e-Commerce
offset by rationalization efforts and ongoing weakness in the
industrial market. Adjusted EBITDA was $88 million or 22.7% of net
sales. Adjusted EBITDA performance was primarily related to higher
volumes.
Tax-Free Spin-Off of Diversey Care and
Related Hygiene Business
On October 17, 2016, Sealed Air announced a plan to pursue the
tax-free spin-off of its Diversey Care division and the food
hygiene and cleaning business within its Food Care division
(together “New Diversey”). The tax-free spin-off would create two
independent companies, New Sealed Air (the remaining Sealed Air
business) and New Diversey, each with an enhanced strategic focus,
simplified operating structure, distinct investment identity and
strong financial profile.
Under the spin-off plan, if effectuated, Sealed Air’s
shareholders would own 100% of the common stock of New Diversey
following completion of the spin-off. The spin-off company would be
led by Dr. Ilham Kadri, currently President of Diversey Care. The
transaction is expected to be completed in the second half of 2017,
subject to final approval by Sealed Air’s Board of Directors, as
well as satisfaction of customary conditions, including the
effectiveness of appropriate filings with the U.S. Securities and
Exchange Commission (“SEC”), and it is intended to qualify as a
tax-free distribution to Sealed Air shareholders for U.S. federal
income tax purposes. Sealed Air anticipates filing a Form 10
relating to the transaction with the SEC as early as the first
quarter of 2017.
Third Quarter 2016 U.S. GAAP
Summary
Net sales of $1.7 billion decreased 1.7% on an as reported
basis. Currency had a negative impact on total net sales of 1.8%,
or $31 million, and the Food Care divestitures had a negative
impact on total sales of 0.8%, or $15 million, in the third quarter
2016. As reported, net sales in North America increased 1.6%, EMEA
declined 5.8% and Latin America and Asia Pacific also declined 2.9%
and 0.6%, respectively.
Net income on a reported basis was $163 million, or $0.83 per
diluted share as compared to $87 million, or $0.42 per diluted
share in the third quarter 2015. Net earnings in the third quarter
2016 were favorably impacted by $24 million of special items,
primarily related to the release of certain tax reserves, as
described more fully below, partially offset by restructuring
charges and other restructuring associated costs. Net earnings in
the third quarter 2015 included $57 million of special items,
primarily consisting of restructuring and other restructuring
associated costs, as well as a tax reserve recorded in relation 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.
The effective tax rate in the third quarter of 2016 was 5.5%,
compared to the effective tax rate of 31.3% in the third quarter of
2015. The effective tax rate was favorably impacted by $32 million
related to the release of certain tax reserves recorded at the time
of the Diversey Holdings, Inc. acquisition, for which the statute
of limitations had expired.
Third Quarter 2016 Non-U.S. GAAP
Summary
Net sales on an organic basis increased 0.9%. On a constant
dollar basis, Latin America was up 8.7% followed by North America,
which delivered constant dollar sales growth of 1.6%. Volume growth
in North America and Europe were offset by declines in MEA and Asia
Pacific. Organic sales in EMEA and Asia Pacific declined 0.5% and
3.1%, respectively.
Adjusted EBITDA for the third quarter 2016 was $304 million, or
17.7% of net sales. This margin performance was attributable to a
favorable price/cost spread and restructuring savings, partially
offset by $4 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 $0.71 for the third quarter 2016. This compares
to Adjusted EPS of $0.70 in the third quarter 2015. The Adjusted
Tax Rate was 23.1% in the third quarter 2016, compared to 18.8% in
the third quarter 2015. The Adjusted Tax Rate in the third quarter
of 2016 was negatively impacted by an increase in valuation
allowances on foreign tax credits.
Cash Flow and Net Debt
Cash flow provided by operating activities in the nine months
ended September 30, 2016 was $470 million, which is net of $51
million of restructuring payments. This compares with cash provided
by operating activities of $701 million in the nine months ended
September 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. Excluding the tax refund,
cash flow provided by operating activities in the first nine months
of 2015 was $466 million, which is net of $72 million of
restructuring and $20 million of SARs payments.
Capital expenditures increased to $190 million, as planned, in
the nine months ended September 30, 2016 and compared to $112
million in the nine months ended September 30, 2015. Free Cash
Flow, defined as net cash provided by (used in) operating less
capital expenditures, was an inflow of $280 million in the nine
months ended September 30, 2016. This compares to an inflow of $353
million in the nine months ended September 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
$132 million to $4.3 billion as of September 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 third quarter 2016, the Company repurchased
approximately 3.5 million shares for approximately $165 million,
and paid cash dividends of $31 million. In the nine month ended
September 30, 2016, the Company repurchased 4.7 million shares for
approximately $217 million, and paid cash dividends of $90
million.
Updated Outlook for Full Year
2016*
For the full year 2016, the Company expects to achieve Net Sales
of approximately $6.8 billion and Adjusted EBITDA of approximately
$1.17 billion. Currency is expected to have a negative impact of
approximately $225 million on net sales and $35 million on Adjusted
EBITDA. The outlook for Adjusted EPS is expected to be
approximately $2.60. 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 $90 million.
Conference Call
Information
Date:
Thursday, October 27, 2016
Time:
11:00am (ET)
Webcast:
www.sealedair.com/investors
Conference Dial
In:
(888) 680-0878 (domestic) (617) 213-4855 (international)
Participant
Code:
72265248
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, October 27, 2016 at 3:00pm (ET) through
Saturday, November 26, 2016 at 2:59pm (ET)
Webcast:
www.sealedair.com/investors
Conference Dial
In:
(888) 286-8010 (domestic) (617) 801-6888 (international)
Participant
Code:
19315392
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, 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 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 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, the success of the spin of
the Diversey Care division and food hygiene and cleaning business,
the success of our restructuring activities, currency translation
and devaluation effects, the success of our financial growth,
profitability, cash generation and manufacturing strategies and our
cost reduction and productivity efforts, the success of new product
offerings, the effects of animal and food-related health issues,
pandemics, consumer preferences, environmental matters, regulatory
actions and legal matters, and the other information referenced in
the “Risk Factors” section appearing in our most recent Annual
Report on Form 10-K, as filed with the Securities and Exchange
Commission, and as revised and updated by our Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K. Any forward-looking
statement made by us is based only on information currently
available to us and speaks only as of the date on which it is made.
We undertake no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
SEALED AIR CORPORATION SUPPLEMENTARY
INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(1) (Unaudited) (In millions, except
per share data)
Three Months Ended Nine Months Ended September
30, September 30, 2016 2015 2016
2015 Net sales $ 1,716.6
$ 1,746.2 $ 5,034.2 $
5,277.6 Cost of sales(2) 1,076.6
1,109.6 3,143.5 3,327.6
Gross
profit 640.0 636.6 1,890.7 1,950.0
As a % of total net sales 37.3 % 36.5 % 37.6 % 36.9 % Selling,
general and administrative expenses(2) 390.3 400.6 1,199.8 1,243.7
As a % of total net sales 22.7 % 22.9 % 23.8 % 23.6 % Amortization
expense of intangible assets acquired 23.5 21.8 72.4 67.4 Stock
appreciation rights expense(3) (0.3 ) (0.4 ) (0.1 ) 4.1
Restructuring and other charges(2) 1.6 38.4
3.5 68.0
Operating profit
224.9 176.2 615.1 566.8 Interest
expense (52.8 ) (54.8 ) (161.8 ) (172.3 ) Foreign currency exchange
loss related to Venezuelan subsidiaries(4) (0.4 ) (1.0 ) (3.2 )
(30.7 ) Charges related to Venezuelan subsidiaries(2) — — (46.0 ) —
Loss on debt redemption and refinancing activities(5) (0.1 ) 0.6
(0.1 ) (110.7 ) Gain (loss) on sale of business(6) — (0.5 ) (1.6 )
28.7 Other income, net 1.2 5.5
5.7 18.4
Earnings before income tax
provision 172.8 126.0 408.1 300.2
Income tax provision(7) 9.5 39.4
92.8 88.3 Effective income tax rate 5.5 % 31.3
% 22.7 % 29.4 %
Net income $ 163.3
$ 86.6 $ 315.3 $
211.9 Net earnings per common
share(8): Basic:(7) $
0.84 $ 0.43 $ 1.60
$ 1.02 Diluted:(7)
0.83 0.42 1.59
1.01 Dividends per common share
$ 0.16 $ 0.13 $
0.45 $ 0.39 Weighted average
number of common shares outstanding: Basic
194.1 202.9 195.0
206.7 Diluted(7)
196.7 205.8 197.5
209.5
_______________________
(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 this evaluation, we recorded a remeasurement loss of $1
million and $31 million in the three and nine months ended
September 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 less than $1 million
and $3 million in the three and nine months ended September 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) 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 377,130
and 370,090 diluted weighted average number of common shares
outstanding for the three and nine months ended September 30, 2016,
respectively, and recognition of excess tax benefits of $1.8
million and $12.4 million in income tax provision for the three and
nine months ended September 30, 2016, respectively. As a result,
net earnings per share increased by $0.01 per share and $0.06 per
share for the three and nine months ended September 30, 2016,
respectively. (8) Net earnings per common share are calculated
under the two-class method. See our Annual Report on Form 10-K for
year ended December 31, 2015 for more information on the two-class
method.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED BALANCE
SHEETS(1)
(Unaudited)
(In millions)
September 30, December
31, 2016 2015(2) Assets Current
assets: Cash and cash equivalents $ 332.8 $ 358.4 Trade
receivables, net 779.4 758.4 Other receivables 169.2 147.5
Inventories 766.0 660.8 Assets held for sale 7.0 10.3 Other current
assets 321.7 280.2
Total current assets
2,376.1 2,215.6 Property and equipment, net(2)
1,033.5 945.7 Goodwill 2,913.5 2,909.5 Intangible assets, net 741.8
784.3 Other assets, net 540.9 549.9
Total
assets $ 7,605.8 $ 7,405.0
Liabilities and stockholders' equity Current liabilities:
Short-term borrowings $ 332.2 $ 241.9 Current portion of long-term
debt 328.6 46.6 Accounts payable 823.3 675.3 Other current
liabilities 799.7 843.3
Total current
liabilities 2,283.8 1,807.1 Long-term debt, less
current portion 4,000.7 4,266.8 Other liabilities(2) 768.5
804.0
Total liabilities 7,053.0
6,877.9 Stockholders' equity 552.8 527.1
Total liabilities and stockholders' equity $
7,605.8 $ 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 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, 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. Additionally, amounts related to asset retirement
obligations were recorded as of December 31, 2015. This resulted in
an increase to property and equipment, net and other liabilities of
$15 million.
CALCULATION OF NET DEBT
(1)
September 30, December
31, 2016 2015(2) Short-term
borrowings $ 332.2 $ 241.9 Current portion of long-term debt 328.6
46.6 Long-term debt, less current portion 4,000.7
4,266.8 Total debt 4,661.5 4,555.3 Less: cash and cash equivalents
(332.8 ) (358.4 )
Net debt $
4,328.7 $ 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)
Nine Months Ended September 30, 2016
2015 Revised(2) Net income $ 315.3 $ 211.9 Adjustments to
reconcile net earnings to net cash provided by operating
activities(3) 309.6 353.0 Changes in: Trade receivables, net (58.5
) (47.0 ) Inventories (100.5 ) (127.3 ) Accounts payable 140.5
119.6 Settlement agreement, and related items (4) — 235.2 Changes
in all other operating assets and liabilities (135.9 )
(44.5 )
Cash flow provided by operating
activities(5) 470.5 700.9 Capital
expenditures for property and equipment (190.2 ) (112.3 ) Proceeds,
net from sale of businesses 7.8 75.7 Business acquired in purchase
transactions, net of cash and cash equivalents acquired (5.8 )
(25.1 ) Proceeds from sales of property, equipment and other assets
0.6 32.4 Settlement of foreign currency forward contracts
(43.1 ) 21.5
Cash flow used in investing
activities (230.7 ) (7.8 )
Net proceeds from borrowings 72.7 256.8 Cash used as collateral on
borrowing arrangements 1.5 (13.5 ) Proceeds from cross currency
swap 6.2 — Repurchase of common stock (217.0 ) (685.7 ) Payments
for debt extinguishment and issuance costs (0.1 ) (108.0 )
Dividends paid on common stock (90.1 ) (81.2 ) Acquisition of
common stock for tax withholding (22.7 ) (8.7 )
Cash flow used in financing activities(5)
(249.5 ) (640.3 ) Effect of
foreign currency exchange rates on cash and cash equivalents
(15.9 ) (55.4 )
Cash and cash equivalents beginning of period $
358.4 $ 286.4 Net change in cash and cash
equivalents (25.6 ) (2.6 )
Cash and cash
equivalents end of period $ 332.8 $
283.8 Non-U.S. GAAP Free Cash Flow:
Cash flow from operating activities $ 470.5 $ 700.9 Capital
expenditures for property and equipment (190.2 )
(112.3 )
Free Cash Flow(6)
$ 280.3 $
588.6 Settlement agreement and related items (4) —
(235.2 )
Free Cash Flow excluding Settlement
agreement and related items $ 280.3
$ 353.4 Additional Cash Flow
Information: Interest payments, net of amounts capitalized $ 157.4
$ 169.1 Income tax payments $ 93.5 $ 78.8
SARs payments (less amounts included in restructuring
payments) $ 1.9 $ 20.0 Restructuring payments
(including associated costs) $ 51.0 $ 71.7
_______________________
(1) The supplementary information included in this press
release for 2016 is preliminary and subject to change prior to the
filing of our upcoming Quarterly Report on Form 10-Q with the
Securities and Exchange Commission. (2) For the nine months ended
September 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 in the Condensed
Consolidated Statement of Cash Flows for the nine months ended
September 30, 2015 resulted in an increase in cash provided by
operating activities of $22.3 million, a decrease to cash provided
by investing activities of $14.7 million, and an decrease of $7.6
million due to the effect of foreign currency exchange rate changes
on 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 $15 million decrease
in financing activities, $36 million decrease in Cash and cash
equivalents beginning of period, and $49 million decrease in Cash
and cash equivalents end of period. (3) 2016 primarily consists of
depreciation and amortization of $161 million, share based
compensation expense of $45 million, profit sharing expense of $30
million, charges related to ceasing operations in Venezuela of $46
million, a remeasurement loss of $3 million and loss on sale of
businesses of $2 million. 2015 primarily consists of loss on bond
redemption of $111 million, depreciation and amortization of $162
million, share-based compensation expense of $49 million, and a
remeasurement loss of $31 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) 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 nine months ended September 30, 2016. There was not a material
impact on the nine months ended September 30, 2015. (6) Free cash
flow does not represent residual cash available for discretionary
expenditures, including mandatory debt servicing requirements or
non-discretionary expenditures that are not deducted from this
measure.
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)
Three Months Ended
September 30, Nine Months Ended September 30,
2016 2015 2016 2015
Net Net Net Net (In
millions, except per share data) Earnings EPS
Earnings EPS Earnings EPS
Earnings EPS
U.S. GAAP net earnings and EPS
available to common stockholders (2)
$ 163.3 $ 0.83 $ 86.6 $ 0.42 $ 315.3 $ 1.59 $ 211.9 $ 1.01 Special
items(3) (24.2 ) (0.12 ) 56.6 0.28
61.5 0.32 173.1 0.83
Non-U.S. GAAP adjusted net earnings and
adjusted EPS available to common stockholders
$ 139.1 $ 0.71 $ 143.2 $ 0.70 $ 376.8 $ 1.91 $ 385.0
$ 1.84
Weighted average number of common shares
outstanding - Diluted
196.7 205.8 197.5 209.5
_______________________
(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) Net earnings per common
share is calculated under the two-class method. (3) Special items
include the following:
Three Months Ended September
30,
Nine Months Ended September
30,
(In millions, except per share data) 2016
2015 2016 2015 Special Items:
Restructuring and other charges(1) $ (1.6 ) $ (38.4 ) $ (3.2 ) $
(68.0 )
Other restructuring associated costs
included in cost of sales and selling, general and
administrative expenses
(6.0 ) (13.0 ) (17.3 ) (32.2 ) SARs 0.3 0.4 0.1 (4.1 )
Foreign currency exchange loss related to
Venezuelan subsidiaries
(0.4 ) (1.0 ) (3.2 ) (30.7 ) Charges related to ceasing operations
in Venezuela(1) — — (52.1 ) — Loss on debt redemption and
refinancing activities (0.1 ) 0.6 (0.1 ) (110.7 )
(Loss) gain on sale of North American foam
trays and absorbent pads business and European food
trays business
— (0.5 ) (1.6 ) 28.7
(Loss) gain related to the sale of other
businesses, investments and property, plant and
equipment
0.6 0.2 (1.5 ) 9.0 Other special items(2) (0.9 ) 1.3
(0.7 ) (0.4 ) Pre-tax impact of special items
(8.1 ) (50.4 ) (79.6 ) (208.4 ) Tax impact of special items and tax
special items(3) 32.3 (6.2 ) 18.1
35.3 Net impact of special items $ 24.2
$ (56.6 ) $ (61.5 ) $ (173.1 ) Weighted average number of common
shares outstanding - Diluted 196.7 205.8
197.5 209.5 Earnings per share
impact from special items $ 0.12 $ (0.28 ) $ (0.32 ) $ (0.83
)
_______________________
(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 three and nine months ended September 30,
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 and nine months ended September 30,
2015 primarily included legal fees associated with restructuring
and acquisitions. (3) For the three and nine months ended September
30, 2016, the special tax items including the release of certain
tax reserves recorded at the time of the Diversey Holdings, Inc.
acquisition, for which the statute of limitations had expired. For
the three and nine months ended September 30, 2015, the special tax
items including 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.
The calculation of the non-U.S. GAAP Adjusted income tax rate is as
follows:
Three Months EndedSeptember
30,
Nine Months Ended September
30,
(In millions, except per share data) 2016
2015 2016 2015 U.S. GAAP Earnings
before income tax provision $ 172.8 $ 126.0 $ 408.1 $ 300.2 Pre-tax
impact of special items (8.1 ) (50.4 ) (79.6 )
(208.4 ) Non-U.S. GAAP Adjusted Earnings before income tax
provision $ 180.9 $ 176.4 $ 487.7 $ 508.6
U.S. GAAP Income tax (benefit) provision $ 9.5 $ 39.4
$ 92.8 $ 88.3 Tax impact of special items 32.3
(6.2 ) 18.1 35.3 Non-U.S. GAAP Adjusted
Income tax (benefit) provision $ 41.8 $ 33.2 $ 110.9
$ 123.6 U.S. GAAP Effective income tax rate
5.5 % 31.3 % 22.7 % 29.4 % Non-U.S. GAAP Adjusted income tax rate
23.1 % 18.8 % 22.7 % 24.3 %
SEALED AIR
CORPORATION SUPPLEMENTARY INFORMATION
SEGMENT INFORMATION(1)
(Unaudited)
(In millions)
Three
Months Ended Nine Months Ended September 30,
% September 30, % 2016
2015(2)
Change 2016
2015(2)
Change Net Sales: Food Care $ 814.6 $ 836.4
(2.6 ) % $ 2,381.6 $ 2,562.8 (7.1 ) % As a % of Total Company net
sales 47.5 % 47.9 % 47.3 % 48.6 % Diversey Care 497.4 501.8 (0.8 )
% 1,470.7 1,504.7 (2.3 ) % As a % of Total Company net sales 29.0 %
28.7 % 29.2 % 28.5 % Product Care 388.6 389.3 (0.2 ) % 1,130.0
1,153.1 (2.0 ) % As a % of Total Company net sales 22.6 % 22.3 %
22.4 % 21.8 % Other 16.0 18.7 (14.4 ) %
51.9 57.0 (8.9 ) %
Total Company Net
Sales $ 1,716.6 $ 1,746.2
(1.7 ) %
$ 5,034.2
$ 5,277.6 (4.6 ) %
Three Months Ended Nine Months Ended September
30, % September 30, % 2016
2015(2)
Change 2016
2015(2)
Change Adjusted EBITDA: Food Care $ 172.5 $
168.4 2.4 % $ 483.1 $ 532.6 (9.3 ) % Adjusted EBITDA Margin 21.2 %
20.1 % 20.3 % 20.8 % Diversey Care 64.6 66.4 (2.7 ) % 187.1 176.5
6.0 % Adjusted EBITDA Margin 13.0 % 13.2 % 12.7 % 11.7 % Product
Care 88.2 81.9 7.7 % 244.1 237.9 2.6 % Adjusted EBITDA Margin 22.7
% 21.0 % 21.6 % 20.6 % Other (21.4 )
(16.7 ) 28.1 % (61.7 ) (55.2 ) 11.8 %
Non-U.S. GAAP Total Company Adjusted
EBITDA
$ 303.9 $ 300.0
1.3 %
$ 852.6 $
891.8 (4.4 ) % Adjusted EBITDA Margin
17.7 % 17.2 % 16.9 % 16.9 %
_______________________
(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) As of January 1, 2016, our
Kevothermal business was moved from Other to our Product Care
Segment. This resulted in a reclassification of $4.6 million of net
sales and $0.9 million of adjusted EBITDA for the three months
ended September 30, 2015 and $10.3 million of net sales and $2.3
million of adjusted EBITDA for the nine months ended September 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 Nine
Months Ended September 30, September 30,
2016 2015 2016 2015
Non-U.S. GAAP Total Company Adjusted EBITDA $
303.9 $ 300.0 $ 852.6 $
891.8 Depreciation and amortization (2)(4) (70.2 ) (68.7 )
(208.0 ) (211.1 ) Special items:
Accelerated depreciation of non-strategic
assets related to restructuring programs
— (0.1 ) 0.1 0.2
Accelerated depreciation and amortization
of fixed assets and intangible assets for Venezuelan
subsidiaries(2)
— — 4.8 — Restructuring and other charges(2)(5) (1.6 ) (38.4 ) (3.2
) (68.0 )
Other restructuring associated costs
included in cost of sales and selling, general and administrative
expenses
(6.0 ) (13.0 ) (17.3 ) (32.2 ) SARs 0.3 0.4 0.1 (4.1 )
Foreign currency exchange loss related to
Venezuelan subsidiaries
(0.4 ) (1.0 ) (3.2 ) (30.7 )
Charges related to ceasing operations in
Venezuela(2)
— — (52.1 ) — Loss on debt redemption and refinancing activities
(0.1 ) 0.6 (0.1 ) (110.7 )
(Loss) gain on sale of North America foam
trays and absorbent pads business and European food trays
business
— (0.5 ) (1.6 ) 28.7
(Loss) gain related to the sale of other
businesses, investments and property, plant and equipment
0.6 0.9 (1.5 ) 9.7 Other(3) (0.9 ) 0.6 (0.7 ) (1.1 ) Interest
expense (52.8 ) (54.8 ) (161.8 ) (172.3 ) Income tax provision
9.5 39.4 92.8 88.3
U.S. GAAP net income $ 163.3
$ 86.6 $ 315.3 $
211.9
(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) 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) Other special items for the three and nine
months ended September 30, 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 and nine months
ended September 30, 2015 primarily included legal fees associated
with restructuring and acquisitions. (4) Depreciation and
amortization by segment are as follows:
Three Months Ended Nine
Months Ended September 30, September 30,
2016
2015
2016
2015
Food Care $ 25.7 $ 26.6 $ 75.9 $ 81.8 Diversey Care 23.9
25.7 71.9 77.0 Product Care 9.7 9.3 28.6 28.8 Other 10.9
7.1 31.6 23.5
Total Company depreciation
and amortization(1) $ 70.2 $
68.7 $ 208.0 $ 211.1
(1)
Includes share-based incentive
compensation of $15.6 million and $46.8 million for the three and
nine months ended September 30, 2016 and $15.9 million and $49.1
million for the three and nine months ended September 30, 2015,
respectively.
(5) Restructuring and other charges by segment is as
follows:
Three Months Ended
Nine Months Ended September 30, September
30,
2016
2015
2016
2015
Food Care $ 0.8 $ 15.4 $ 1.5 $ 29.5 Diversey Care 0.4 16.0
0.9 25.5 Product Care 0.3 6.7 0.7 12.6 Other 0.1 0.3
0.1 0.4
Total Company restructuring and other
charges(1) $ 1.6 $ 38.4
$ 3.2 $ 68.0
(1) For the nine months ended September 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 September 30, (Unaudited)
(In millions) Food Care Diversey Care
Product Care(4) Other(4)
Total
Company
2015 Net Sales $ 836.4 $ 501.8 $ 389.3 $ 18.7
$ 1,746.2 Volume - Units (0.6 ) (0.1 ) % (6.5
) (1.3 ) % 10.1 2.6 % (2.3 ) (12.3 ) % 0.7 — % Price/mix (2) 10.5
1.3 % 13.8 2.8 % (9.0 ) (2.3 ) % (0.3 ) (1.6 ) % 15.0 0.9 %
Divestitures (14.7 ) (1.8 ) % — — % — —
% — — % (14.7 ) (0.8 ) %
Total constant dollar change (Non-U.S.
GAAP)(3)
(4.8 ) (0.6 ) % 7.3 1.5 % 1.1 0.3 % (2.6 ) (13.9 ) % 1.0 0.1 %
Foreign currency translation (17.0 ) (2.0 ) % (11.7 ) (2.3 ) % (1.8
) (0.5 ) % (0.1 ) (0.5 ) % (30.6 ) (1.8 ) %
Total change (U.S.
GAAP) (21.8 ) (2.6 ) %
(4.4 ) (0.8 ) % (0.7
) (0.2 ) % (2.7 )
(14.4 ) % (29.6 ) (1.7
) % 2016 Net
Sales $ 814.6 $ 497.4 $
388.6 $ 16.0 $ 1,716.6
COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY SEGMENT(1)
Three
Months Ended September 30, (Unaudited) (In millions)
Food Care Diversey Care Product
Care(4) Other(4)
Total
Company
2015 Net Sales $ 836.4 $ 501.8 $ 389.3 $ 18.7 $
1,746.2 Less: Divestitures (14.7 ) — — — (14.7
) 2015 Net Sales, Excluding Divestitures (Non-US GAAP) 821.7 501.8
389.3 18.7 1,731.5 Volume - Units (0.6 ) (0.1 ) % (6.5 )
(1.3 ) % 10.1 2.6 % (2.3 ) (12.3 ) % 0.7 — % Price/mix (2) 10.5
1.3 % 13.8 2.8 % (9.0 ) (2.3 ) % (0.3 )
(1.6 ) % 15.0 0.9 % Total Organic change (Non-US
GAAP) (3) 9.9 1.2 % 7.3 1.5 % 1.1 0.3 % (2.6 ) (13.9 ) % 15.7 0.9 %
Foreign Currency Translation (17.0 ) (2.0 ) % (11.7 ) (2.3 ) % (1.8
) (0.5 ) % (0.1 ) (0.5 ) % (30.6 ) (1.8 ) % Total change (Non-US
GAAP) (7.1 ) (0.8 ) % (4.4 ) (0.8 ) % (0.7 ) (0.2 ) % (2.7 ) (14.4
) % (14.9 ) (0.9 ) %
2016 Net
Sales $ 814.6 $ 497.4 $
388.6 $ 16.0 $ 1,716.6
_______________________
(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 $4.6 million of net sales and $0.9 million of
adjusted EBITDA for the three months ended September 30, 2015.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
SEGMENT(1)
Nine Months Ended September 30, (Unaudited)
Food Care Diversey Care Product
Care(4) Other(4)
Total 2015 Net Sales $ 2,562.8 $ 1,504.7 $
1,153.1 $ 57.0 $ 5,277.6 Volume - Units
17.8 0.7 % (5.2 ) (0.3 ) % 15.3 1.3 % (4.2 ) (7.4 ) % 23.7 0.4 %
Price/mix (2) 20.1 0.8 % 32.2 2.1 % (21.2 ) (1.8 ) % 0.8 1.3 % 31.9
0.6 % Divestitures (96.6 ) (3.8 ) % — — % — —
% — — % (96.6 ) (1.8 ) % Total constant dollar
change (Non-U.S. GAAP)(3) (58.7 ) (2.3 ) % 27.0 1.8 % (5.9 ) (0.5 )
% (3.4 ) (6.1 ) % (41.0 ) (0.8 ) % Foreign currency translation
(122.5 ) (4.8 ) % (61.0 ) (4.1 ) % (17.2 ) (1.5 ) % (1.7 ) (2.8 ) %
(202.4 ) (3.8 ) %
Total change (U.S. GAAP) (181.2
) (7.1 ) % (34.0 )
(2.3 ) % (23.1 ) (2.0
) % (5.1 ) (8.9 )
% (243.4 ) (4.6 ) %
2016 Net Sales $
2,381.6 $ 1,470.7 $ 1,130.0
$ 51.9 $ 5,034.2
COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY SEGMENT(1)
Nine Months
Ended September 30, (Unaudited) (In millions) Food
Care Diversey Care Product
Care(4) Other(4)
Total
Company
2015 Net Sales $ 2,562.8 $ 1,504.7 $ 1,153.1 $ 57.0 $
5,277.6 Less: Divestitures (96.6 ) — — — (96.6
) 2015 Net Sales, Excluding Divestitures (Non-US GAAP) 2,466.2
1,504.7 1,153.1 57.0 5,181.0 Volume - Units 17.8 0.7 % (5.2
) (0.3 ) % 15.3 1.3 % (4.2 ) (7.4 ) % 23.7 0.5 % Price/mix (2) 20.1
0.8 % 32.2 2.1 % (21.2 ) (1.8 ) % 0.8
1.3 % 31.9 0.6 % Total Organic change
(Non-US GAAP) (3) 37.9 1.5 % 27.0 1.8 % (5.9 ) (0.5 ) % (3.4 ) (6.1
) % 55.6 1.1 % Foreign Currency Translation (122.5 ) (4.8 ) % (61.0
) (4.1 ) % (17.2 ) (1.5 ) % (1.7 ) (2.8 ) % (202.4 ) (3.8 ) % Total
change (Non-US GAAP) (84.6 ) (3.3 ) % (34.0 ) (2.3 ) % (23.1 ) (2.0
) % (5.1 ) (8.9 ) % (146.8 ) (2.7 ) %
2016 Net Sales $ 2,381.6 $
1,470.7 $ 1,130.0 $ 51.9
$ 5,034.2
_______________________
(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) 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 $10.3 million of net sales and $2.3 million of
adjusted EBITDA for the nine months ended September 30, 2015.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
REGION(1)
Three Months
Ended September 30, (Unaudited) (In millions) North
America EMEA(2) Latin
America APAC(3) Total 2015 Net Sales $
726.4 $ 605.9 $ 165.8 $ 248.1 $ 1,746.2 Volume
- Units 27.3 3.8 % (7.5 ) (1.2 ) % (10.2 ) (6.2 ) % (8.9 ) (3.6 ) %
0.7 — % Price/mix (15.7 ) (2.2 ) % 4.8 0.8 % 24.7 14.9 % 1.2 0.5 %
15.0 0.9 % Divestitures — — % (14.7 ) (2.4 ) % —
— % — — % (14.7 ) (0.8 ) % Total
constant dollar change (Non-U.S. GAAP) 11.6 1.6 % (17.4 ) (2.8 ) %
14.5 8.7 % (7.7 ) (3.1 ) % 1.0 0.1 % Foreign currency translation
0.3 — % (17.8 ) (3.0 ) % (19.2 ) (11.6 ) % 6.1
2.5 % (30.6 ) (1.8 ) %
Total change (U.S. GAAP)
11.9 1.6 % (35.2 )
(5.8 ) % (4.7 ) (2.9
) % (1.6 ) (0.6 )
% (29.6 ) (1.7 ) %
2016 Net Sales $ 738.3
$ 570.7 $ 161.1 $ 246.5
$ 1,716.6 COMPONENTS OF ORGANIC
CHANGE IN NET SALES BY REGION(1)
Three
Months Ended September 30, (Unaudited) (In millions)
North America EMEA(2) Latin America
APAC(3) Total 2015 Net Sales $ 726.4 $ 605.9 $
165.8 $ 248.1 $ 1,746.2 Less: Divestitures — (14.7 ) —
— (14.7 ) 2015 Net Sales, Excluding Divestitures
(Non-US GAAP) 726.4 591.2 165.8 248.1 1,731.5 Volume - Units
27.3 3.8 % (7.5 ) (1.3 ) % (10.2 ) (6.2 ) % (8.9 ) (3.6 ) % 0.7 — %
Price/mix (15.7 ) (2.2 ) % 4.8 0.8 % 24.7 14.9
% 1.2 0.5 % 15.0 0.9 % Total
Organic change (Non-US GAAP) (4) 11.6 1.6 % (2.7 ) (0.5 ) % 14.5
8.7 % (7.7 ) (3.1 ) % 15.7 0.9 % Foreign Currency Translation 0.3
— % (17.8 ) (3.0 ) % (19.2 ) (11.6 ) % 6.1 2.5
% (30.6 ) (1.8 ) % Total change (Non-US GAAP) 11.9
1.6 % (20.5 ) (3.5 ) % (4.7 ) (2.9 ) % (1.6 ) (0.6 ) % (14.9
) (0.9 ) %
2016 Net Sales
$ 738.3 $ 570.7 $ 161.1
$ 246.5 $ 1,716.6
_______________________
(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.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
REGION(1)
Nine Months Ended September 30, (Unaudited)
North America EMEA(2) Latin
America APAC(3) Total 2015
Net Sales $ 2,202.5 $ 1,803.8 $ 524.7 $ 746.6
$ 5,277.6 Volume - Units 43.1 2.0 % 15.1 0.8 %
(27.0) (5.1) % (7.5) (1.0) % 23.7 0.4 % Price/mix (60.8) (2.8) %
16.6 0.9 % 72.7 13.9 % 3.4 0.5 % 31.9 0.6 % Divestitures (52.9)
(2.4) (43.7) (2.4) % — — % — — % (96.6) (1.8) % Total constant
dollar change (Non-U.S. GAAP) (70.6) (3.2) % (12.0) (0.7) % 45.7
8.8 % (4.1) (0.5) % (41.0) (0.8) % Foreign currency translation
(9.3) (0.4) % (66.1) (3.8) % (104.3) (19.9) % (22.7) (3.1) %
(202.4) (3.8) %
Total change (U.S. GAAP) (79.9)
(3.6) % (78.1) (4.5) %
(58.6) (11.1) % (26.8) (3.6)
% (243.4) (4.6) %
2016 Net Sales $ 2,122.6 $
1,725.7 $ 466.1 $ 719.8 $ 5,034.2
COMPONENTS OF ORGANIC CHANGE IN NET
SALES BY REGION(1)
Nine Months
Ended September 30, (Unaudited) (In millions) North
America EMEA(2) Latin
America APAC(3) Total 2015 Net Sales $
2,202.5 $ 1,803.8 $ 524.7 $ 746.6 $ 5,277.6 Less:
Divestitures (52.9 ) (43.7 ) — — (96.6 ) 2015 Net
Sales, Excluding Divestitures (Non-US GAAP) 2,149.6 1,760.1 524.7
746.6 5,181.0 Volume - Units 43.1 2.0 % 15.1 0.9 % (27.0 )
(5.1 ) % (7.5 ) (1.0 ) % 23.7 0.5 % Price/mix (60.8 ) (2.8 ) % 16.6
0.9 % 72.7 13.9 % 3.4 0.5
% 31.9 0.6 % Total Organic change (Non-US GAAP) (4)
(17.7 ) (0.8 ) % 31.7 1.8 % 45.7 8.8 % (4.1 ) (0.5 ) % 55.6 1.1 %
Foreign Currency Translation (9.3 ) (0.4 ) % (66.1 ) (3.8 ) %
(104.3 ) (19.9 ) % (22.7 ) (3.1 ) % (202.4 ) (3.8 ) % Total change
(Non-US GAAP) (27.0 ) (1.2 ) % (34.4 ) (2.0 ) % (58.6 ) (11.1 ) %
(26.8 ) (3.6 ) % (146.8 ) (2.7 ) %
2016 Net Sales $ 2,122.6 $
1,725.7 $ 466.1 $ 719.8 $
5,034.2
_______________________
(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) 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/20161027005377/en/
Sealed Air CorporationInvestors:Lori Chaitman, 201-712-7310
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