- 2017 Sales from Continuing Operations
of $4.5 Billion, an increase of 6% As Reported
- 2017 Net Earnings from Continuing
Operations of $63 Million, Reported Net Earnings Per Share from
Continuing Operations of $0.33 and Operating Cash Flow of $398
Million
- 2017 Adjusted EBITDA of $833 Million,
or 18.7% of Net Sales, Adjusted EPS from Continuing Operations of
$1.81 and Free Cash Flow, excluding payments related to the sale of
Diversey, of $421 million, all exceeding the Company's previously
provided guidance
- Provides Full Year 2018 Outlook
Sealed Air Corporation (NYSE: SEE) today announced financial
results for the fourth quarter and full year 2017. Commenting on
these results, Ted Doheny, President and Chief Executive Officer,
said, “In 2017, we exceeded our previously provided guidance for
Net Sales, Adjusted EBITDA, Adjusted EPS and Free Cash Flow. Our
sales growth accelerated into year-end, resulting in 11% growth in
the fourth quarter and 6% for the full year. We capitalized on
strong end market trends within the protein and e-Commerce and
fulfillment sectors and experienced increased demand for our new
innovations. We executed on our share repurchase program by
returning $1.3 billion of capital through the use of open market
and accelerated share repurchase programs since January 1, 2017. We
currently have approximately $867 million remaining under the
authorized repurchase program.”
Doheny continued, "I have been working closely with our
leadership team to accelerate our strategy. I’m excited to see the
potential that we have within Sealed Air and take our performance
to the next level. In 2018, we plan to drive profitable
growth, recognize and promote talent and further improve
productivity with our Sealed Air Operational Excellence culture. We
will continue to focus on developing sustainable solutions that
leave our world, environment and communities better than we found
them."
Unless otherwise stated, all results compare fourth quarter 2017
results to fourth quarter 2016 results from continuing operations.
As a result of the sale of Diversey, which refers to Diversey Care
and the food hygiene and cleaning business, we have changed our
segment reporting structure effective as of January 1, 2017. Food
Care includes the Medical Applications business, which was
previously reported under 'Other.' Additionally, Food Care excludes
the food hygiene and cleaning business, which is a component of
Diversey and classified as discontinued operations. Year-over-year
financial discussions present operating results from continuing
operations as reported, and on a constant dollar basis. Constant
dollar refers to unit volume and price/mix performance and excludes
the impact of currency translation from all periods referenced.
Additionally, non-U.S. GAAP adjusted financial measures, such as
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and
Amortization (“Adjusted EBITDA”), Adjusted Net Earnings, Adjusted
Diluted Earnings Per Share (“Adjusted EPS”) and Adjusted Tax Rate,
exclude the impact of specified items (“Special Items”), such as
restructuring charges, charges related to the sale of Diversey,
charges related to ceasing operations in Venezuela, cash-settled
stock appreciation rights (“SARs”) granted as part of the original
Diversey acquisition, special tax items (“Tax Special Items”) and
certain other infrequent or one-time items. Please refer to the
supplemental information included with this press release for a
reconciliation of Non-U.S. GAAP to U.S. GAAP financial
measures.
Fourth Quarter Financial and Business
Highlights
- In the fourth quarter, Food Care net
sales of $764 million increased 8% as reported. Currency had a
positive impact on Food Care net sales of 2%, or $15 million. On a
constant dollar basis, net sales increased 6% driven by volume
growth of 5% and favorable price/mix of 1%. Volume trends were led
by 7% growth in North America, 6% in Latin America and 4% in
Europe, Middle East and Africa (EMEA), partially offset by a 2%
decline in Asia Pacific. Adjusted EBITDA of $162 million or 21.2%
of net sales was primarily attributable to positive volume trends
and favorable foreign currency, which were offset by higher raw
material and freight costs as well as non-material costs including
salary and wage increases.
- Product Care net sales of $464 million
in the fourth quarter were up 18% as reported. Currency had a
positive impact on Product Care net sales of 2%, or $9 million. On
a constant dollar basis, net sales increased 15% primarily due to
the acquisition of Fagerdala, which was completed on October 2,
2017, of $24 million or 6%, increased volumes of 5% and favorable
price/mix of 4%. Adjusted EBITDA of $95 million or 20.4% of net
sales was attributable to volume growth, which was partially offset
by non-material costs including salary and wage increases as well
as higher raw material and freight costs.
- Since January 1, 2017, Sealed Air
repurchased approximately $1.3 billion of shares through a
combination of open market repurchases and accelerated share
repurchase (ASR) programs. The Company has $867 million remaining
under the current authorized repurchase program.
Fourth Quarter and Full Year 2017 U.S.
GAAP Summary, Continuing Operations
Fourth quarter net sales of $1.2 billion increased 11% on an as
reported basis. Currency had a positive impact on total net sales
of 2%, or $25 million. For the full year 2017, net sales of $4.5
billion increased 6% on an as reported basis. Currency had a
positive impact on total net sales of 1%, or $30 million. As
reported, net sales increased across all regions for the fourth
quarter and full year 2017.
Fourth quarter net earnings from continuing operations on a
reported basis was $25 million, or $0.14 per diluted share, as
compared to net earnings from continuing operations of $151
million, or $0.77 per diluted share, in the fourth quarter 2016.
Net income in the fourth quarter 2017 was unfavorably impacted by
$78 million of special items, including $42 million of tax related
items, $21 million related to the sale of Diversey, $11 million
primarily related to acquisition activity and $5 million of
restructuring and other restructuring associated costs. Net
earnings in the fourth quarter 2016 included $53 million of special
items, including $62 million of tax related items partially offset
by $8 million of charges related to restructuring and other costs
associated with our restructuring programs.
Full year 2017 net earnings from continuing operations on a
reported basis was $63 million, or $0.33 per diluted share, as
compared to net earnings from continuing operations of $292
million, or $1.48 per diluted share, for full year 2016. Net
earnings for the full year 2017 was unfavorably impacted by $280
million of special items, including $152 million of tax expense
related to the sale of Diversey, as well as $55 million of charges
related to the sale of Diversey, $26 million of restructuring and
other restructuring associated costs and $16 million primarily
related to acquisition activity. Net earnings for full year 2016
included $42 million of special items, primarily driven by $49
million related to ceasing operations in Venezuela and $22 million
of restructuring and other associated costs.
The effective tax rate in the fourth quarter of 2017 was 79.0%,
compared to the effective tax rate of (23.8)% in the fourth quarter
of 2016. The effective tax rate in the fourth quarter of
2017 was negatively impacted primarily by the revaluation of
deferred tax assets as a result of U.S. Tax Reform. The
effective tax rate in the fourth quarter of 2016 was favorably
impacted by changes in our repatriation strategy.
The effective tax rate for full year 2017 was 84.0%, compared to
the effective tax rate of 24.6% for full year 2016. The 2017 rate
was negatively impacted primarily by additional tax expenses
related to the sale of Diversey and the revaluation of deferred tax
assets as a result of U.S. Tax Reform.
Fourth Quarter and Full Year 2017
Non-U.S. GAAP Summary, Continuing Operations
Constant dollar net sales growth of 9% for the fourth quarter of
2017 was attributable to volume growth of 5%, favorable price/mix
of 2% and $24 million in sales from the Fagerdala acquisition. By
region, in constant dollars, North America sales increased 10%,
EMEA 5%, Latin America 6% and Asia Pacific 17%.
Constant dollar net sales growth of 5% for full year 2017 was
attributable to volume growth of 5% and $24 million in sales from
the Fagerdala acquisition. By region, in constant dollars, North
America sales increased 8%, EMEA 1%, Latin America 3% and Asia
Pacific 5%.
Adjusted EBITDA for the fourth quarter 2017 was $238 million, or
19.4% of net sales, compared to $216 million, or 19.6% of net sales
for the fourth quarter of 2016. Adjusted EBITDA included $19
million of Corporate expenses in the fourth quarter of 2017 as
compared to $36 million in the fourth quarter of 2016.
Adjusted EBITDA for full year 2017 was $833 million, or 18.7% of
net sales, compared to $809 million, or 19.2% of net sales for full
year 2016. Adjusted EBITDA included $107 million of Corporate
expenses for full year 2017 as compared to $127 million for full
year 2016. The decrease in corporate expenses is due to the
Company's efforts to address stranded costs associated with the
sale of Diversey and cost containment actions.
Adjusted EPS was $0.58 for the fourth quarter 2017. This
compares to Adjusted EPS of $0.50 in the fourth quarter 2016. The
Adjusted Tax Rate was 33.7% in the fourth quarter 2017, compared to
24.9% in the fourth quarter 2016.
Adjusted EPS was $1.81 for full year 2017. This compares to
Adjusted EPS of $1.70 for full year 2016. The Adjusted Tax Rate was
30.2% for full year 2017, compared to 28.0% for full year 2016.
Fourth Quarter and Full Year 2017 U.S.
GAAP Summary, Discontinued Operations
The sale of Diversey was completed during the third quarter on
September 6, 2017. The Company recognized a net gain on sale of
$641 million for the full year 2017. Net earnings from discontinued
operations was $111 million, or $0.59 per diluted share from
January 1, 2017 through completion of the sale, which included net
sales of $1.7 billion.
Cash Flow and Net Debt
Cash flow provided by operating activities in the year ended
December 31, 2017 was $398 million, which is net of $49
million of restructuring payments and $207 million of payments
related to the sale of Diversey, which included $170 million of tax
payments and the remainder primarily attributable to professional
fees required to facilitate the separation.
Capital expenditures were $184 million in the year ended
December 31, 2017. Free Cash Flow, defined as net cash
provided by operating activities less capital expenditures and
payments related to the sale of Diversey, was an inflow of $421
million in the year ended December 31, 2017.
The Company repurchased 27.3 million shares for approximately
$1.2 billion, with the remaining $80 million settled in the first
quarter of 2018, and paid cash dividends of $120 million during the
year ended December 31, 2017.
Net Debt, defined as total debt less cash and cash equivalents,
decreased to $2.7 billion as of December 31, 2017 from $3.8 billion
as of December 31, 2016. This decrease in net debt primarily
resulted from payments of debt and net cash received as part of the
sale of Diversey.
Outlook for Full Year
2018
For the full year 2018, the Company anticipates Net Sales of
approximately $4.75 to $4.80 billion, a constant dollar growth rate
of approximately 4.5%. Adjusted EBITDA from continuing operations
is expected to be in the range of $890 million to $910 million.
Currency is expected to have a favorable impact of approximately
$110 million on Net Sales and $20 million on Adjusted EBITDA. The
Company forecasts Adjusted EPS to be in the range of $2.35 to
$2.45, which is based on 169 million shares outstanding and an
anticipated Adjusted Tax Rate of 29.0%.
The outlook for Free Cash Flow is approximately $400 million,
assuming capital expenditures of approximately $160 million and
cash restructuring payments of approximately $20 million, which
excludes restructuring payments of $30 million to address stranded
costs.
Conference Call
Information
Date:
Thursday, February 8,
2018
Time:
10:00 a.m. (ET)
Webcast:
www.sealedair.com/investors
Conference Dial
In:
(855) 472-5411 (domestic) (330) 863-3389 (international)
Participant
Code:
4975676
A supplemental presentation accompanying the conference call
will be available on the Company’s website at
www.sealedair.com/investors.
Conference Call Replay
Information
Dates:
Thursday, February 8, 2018 at 1:00 p.m.
(ET) through
Saturday, March 10, 2018 at 12:59 p.m.
(ET)
Webcast:
www.sealedair.com/investors
Conference Dial
In:
(855) 859-2056 (domestic) (404) 537-3406 (international)
Participant
Code:
4975676
Business
Sealed Air Corporation is a knowledge-based company focused on
packaging solutions that help our customers achieve their
sustainability goals in the face of today’s biggest social and
environmental challenges. Our portfolio of widely recognized
brands, including Cryovac® brand food packaging solutions and
Bubble Wrap® brand cushioning, enable a safer and less
wasteful food supply chain and protect valuable goods shipped
around the world. Sealed Air generated $4.5 billion in sales in
2017 and has approximately 15,000 employees who serve customers in
122 countries. To learn more, visit www.sealedair.com.
Website Information
We routinely post important information for investors on our
website, www.sealedair.com, in the "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 Net Debt, Adjusted Net
Earnings and Adjusted EPS, net sales on a “constant dollar” or
“organic” basis, Free Cash Flow, Adjusted EBITDA and Adjusted Tax
Rate, as our management believes these measures are useful to
investors. We present results and guidance, adjusted to exclude the
effects of Special Items and their related tax impact that would
otherwise be included under U.S. GAAP, to aid in comparisons with
other periods or prior guidance. In addition, non-U.S. GAAP
measures are used by management to review and analyze our operating
performance and, along with other data, as internal measures for
setting annual budgets and forecasts, assessing financial
performance, providing guidance and comparing our financial
performance with our peers and may also be used for purposes of
determining incentive compensation. The non-U.S. GAAP information
has limitations as an analytical tool and should not be considered
in isolation from or as a substitute for U.S. GAAP information. It
does not purport to represent any similarly titled U.S. GAAP
information and is not an indicator of our performance under U.S.
GAAP. Non-U.S. GAAP financial measures that we present may not be
comparable with similarly titled measures used by others. Investors
are cautioned against placing undue reliance on these non-U.S. GAAP
measures. For a reconciliation of these U.S. GAAP measures to
non-U.S. GAAP measures and other important information on our use
of non-U.S. GAAP financial measures, see the attached
supplementary information entitled “Condensed Consolidated
Statements of Cash Flows” (under the section entitled “Non-U.S.
GAAP Free Cash Flow”), “Reconciliation of U.S. GAAP Net Earnings
and U.S. GAAP Net Earnings Per Share to Non-U.S. GAAP Adjusted Net
Earnings and Non-U.S. GAAP Adjusted Net Earnings Per Share”
“Segment Information,” “Reconciliation of U.S. GAAP Net Earnings to
Non-U.S. GAAP Total Company Adjusted EBITDA,” “Components of Change
in Net Sales by Segment,” “Components of Changes in Net Sales by
Region,” “Components of Organic Change in Net Sales by Segment,”
and “Components of Organic Changes in Net Sales by Region.”
Information reconciling forward-looking U.S. GAAP measures to
non-U.S. GAAP measures is not available without unreasonable
effort.
*We have not provided guidance for the most directly comparable
U.S. GAAP financial measures, as they are not available without
unreasonable effort due to the high variability, complexity, and
low visibility with respect to certain Special Items, including
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 2016 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 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)
Three Months EndedDecember 31,
Year EndedDecember 31, (In millions,
except per share data) 2017 2016
2017 2016 Net sales $ 1,227.8 $ 1,101.4
$ 4,461.6 $ 4,211.3 Cost of sales(2) 853.4 738.5
3,044.4 2,806.4 Gross profit 374.4 362.9 1,417.2
1,404.9 Selling, general and administrative expenses(2) 205.8 188.9
796.0 755.7 Amortization expense of intangible assets acquired 3.9
4.6 13.1 15.0 Restructuring and other charges(2) 2.9 1.4
12.1 2.8 Operating profit 161.8 168.0 596.0
631.4 Interest expense (48.1 ) (48.0 ) (201.8 ) (199.4 ) Interest
income 7.3 2.2 17.6 7.5 Foreign currency exchange loss related to
Venezuelan subsidiaries — (0.1 ) — (1.7 ) Charge related to
Venezuelan subsidiaries(2) — (1.3 ) — (47.3 ) Loss on debt
redemption and refinancing activities — (0.1 ) — (0.1 ) Loss on
sale of business, net — (0.2 ) — (1.8 ) Other (expense) income, net
(2.0 ) 1.7 (18.5 ) (0.7 ) Earnings before income tax
provision (benefit) 119.0 122.2 393.3 387.9 Income tax provision
(benefit) 94.0 (29.1 ) 330.5 95.6 Net earnings
from continuing operations 25.0 151.3 62.8 292.3 (Loss) gain on
sale of discontinued operations, net of tax (58.6 ) — 640.7 — Net
earnings from discontinued operations, net of tax(3) 0.1
19.8 111.4 194.1 Net (loss) earnings available
to common stockholders $ (33.5 ) $ 171.1 $ 814.9 $
486.4
Basic: Continuing operations $ 0.14 $ 0.79 $
0.34 $ 1.50 Discontinued operations(3) (0.33 ) 0.10 3.99
0.99 Net (loss) earnings per common share - basic $
(0.19 ) $ 0.89 $ 4.33 $ 2.49
Diluted:
Continuing operations $ 0.14 $ 0.77 $ 0.33 $ 1.48 Discontinued
operations(3) (0.33 ) 0.10 3.96 0.98 Net
(loss) earnings per common share - diluted $ (0.19 ) $ 0.87
$ 4.29 $ 2.46 Dividends per common share $ 0.16
$ 0.16 $ 0.64 $ 0.61 Weighted average
number of common shares outstanding: Basic 175.3 192.4
186.9 194.3 Diluted 175.9 196.2
188.9 197.2
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) Due to the ongoing
challenging economic situation in Venezuela, the Company approved a
program in the second quarter of 2016 to cease operations in the
country. This resulted in total costs of $49.4 million being
incurred which included a voluntary reduction in headcount
including severance and termination benefits for employees of $0.3
million, depreciation and amortization expense related to fixed
assets and intangibles of $0.5 million, inventory reserves of $0.4
million, income tax expense of $0.9 million and the
reclassification of $47.3 million of cumulative translation
adjustment resulting in a charge to Net income as the Company’s
decision to cease operations is similar to a substantially complete
liquidation. (3) For the year ended December 31, 2017, there was a
revision to net earnings from discontinued operations, net of tax,
on the Condensed Consolidated Statement of Operations related to
depreciation and amortization on Diversey assets held for sale. As
a result, net earnings from discontinued operations, net of tax,
increased $16.4 million and increased net earnings per basic and
diluted shares by $0.09.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED BALANCE
SHEETS(1)
(Unaudited)
(In millions) December 31, 2017
December 31, 2016 ASSETS Current
assets: Cash and cash equivalents $ 594.0 $ 333.7 Trade
receivables, net 552.4 460.5 Income tax receivables 85.1 11.5 Other
receivables 90.2 72.7 Inventories, net 506.8 456.7 Current assets
held for sale 4.0 825.7 Prepaid expenses and other current assets
33.9 54.5 Total current assets 1,866.4 2,215.3
Property and equipment, net 998.4 889.6 Goodwill 1,939.8 1,882.9
Intangible assets, net 83.6 40.1 Deferred taxes(2) 176.2 197.1
Non-current assets held for sale(2) — 1,998.8 Other non-current
assets 215.9 175.4 Total assets $ 5,280.3 $
7,399.2
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Short-term borrowings $ 25.3 $ 83.0 Current portion of
long-term debt 2.2 297.0 Accounts payable 723.8 539.2 Current
liabilities held for sale 2.2 683.3 Accrued restructuring costs
15.4 44.8 Income tax payable 47.3 48.3 Other current liabilities
562.0 423.4 Total current liabilities 1,378.2 2,119.0
Long-term debt, less current portion 3,230.5 3,762.6 Deferred taxes
28.5 4.9 Non-current liabilities held for sale — 501.0 Other
non-current liabilities 490.8 402.0 Total liabilities
5,128.0 6,789.5 Stockholders’ equity: Preferred stock — — Common
stock 23.0 22.8 Additional paid-in capital 1,939.6 1,974.1 Retained
earnings 1,735.2 1,040.0 Common stock in treasury (2,700.6 )
(1,478.1 ) Accumulated other comprehensive loss, net of taxes
(844.9 ) (949.1 ) Total stockholders’ equity 152.3 609.7
Total liabilities and stockholders’ equity $ 5,280.3
$ 7,399.2
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) As of December 31,
2016, $27.2 million of amounts which were previously classified as
non-current assets held for sale were reclassified to deferred tax
assets as the amounts did not go with the sale of Diversey.
CALCULATION OF NET
DEBT(1)
December 31, 2017
December 31, 2016 Short-term borrowings $ 25.3 $ 83.0
Current portion of long-term debt 2.2 297.0 Long-term debt, less
current portion 3,230.5 3,762.6 Total
debt 3,258.0 4,142.6 Less: cash and cash equivalents (594.0 )
(333.7 )
Net debt $ 2,664.0
$ 3,808.9
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(1)
(Unaudited)
Year Ended December 31, (In
millions) 2017 2016 Net earnings
available to common stockholders $ 814.9 $ 486.4 Adjustments to
reconcile net earnings to net cash provided by operating
activities(2) (245.7 ) 291.4 Changes in operating assets and
liabilities: Trade receivables, net (81.4 ) (33.9 ) Inventories
(55.4 ) (17.1 ) Accounts payable 154.1 228.0 Other assets and
liabilities (188.6 ) (47.9 )
Net cash provided by operating
activities $ 397.9 $ 906.9
Cash flows from investing activities: Capital expenditures $
(183.8 ) $ (275.7 ) Proceeds from sale of business 1.0 7.8
Businesses acquired in purchase transactions, net of cash acquired
(119.2 ) (5.8 ) Proceeds from sales of property, equipment and
other assets 1.7 4.9 Loss from settlement of cross currency swaps
(61.8 ) — Impact of sale of Diversey(3) 2,126.0 — Settlement of
foreign currency forward contracts (8.7 ) (46.0 )
Net cash
provided by (used in) investing activities $
1,755.2 $ (314.8 ) Cash flows
from financing activities: Net payments on short-term borrowings $
(93.7 ) $ (154.2 ) Cash used as collateral on borrowing
arrangements 25.4 3.6 Proceeds from cross currency swap 17.4 —
Payments of long-term debt (369.5 ) (27.1 ) Dividends paid on
common stock (119.7 ) (121.6 ) Repurchases of common stock(4)
(1,302.2 ) (217.0 ) Payments for debt extinguishment costs — (0.1 )
Acquisition of common stock for tax withholding (22.0 ) (30.7 )
Other financing activities — 6.2
Net cash used in
financing activities $ (1,864.3 ) $
(540.9 ) Effect of foreign currency exchange rate
changes on cash and cash equivalents $ (28.5
) $ (39.2 ) Balance, beginning of
period $ 333.7 $ 321.7 Net change during the period 260.3
12.0
Balance, end of period $ 594.0 $ 333.7
Non-U.S. GAAP Free Cash Flow: Cash flow from
operating activities $ 397.9 $ 906.9 Capital expenditures for
property and equipment (183.8 ) (275.7 )
Free Cash
Flow(5) $ 214.1 $
631.2 Supplemental Cash Flow Information:
Interest payments, net of amounts capitalized $ 210.8 $
215.1 Income tax payments $ 161.7 $ 125.8
Payments related to the sale of Diversey(3) $ 207.4 $ —
Stock appreciation rights payments (less amounts included in
restructuring payments) $ — $ 1.9 Restructuring
payments including associated costs $ 49.3 $ 66.1
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) 2017 primarily consists
of $641 million related to the gain on sale from Diversey partially
offset by $131 million of deferred taxes, depreciation and
amortization $149 million, share based compensation expense of $45
million and profit sharing expense of $23 million. 2016 primarily
consists of depreciation and amortization of $214 million, share
based compensation expense of $60 million, profit sharing expense
of $25 million and charges related to ceasing operations in
Venezuela of $46 million, which were partially offset by a decrease
in deferred taxes of $62 million. (3) Payments of borrowings
included in financing activities excludes amounts which were paid
using cash proceeds from the sale of Diversey. As a result, $755
million of payments of borrowings is included within investing
activities for a total payment of borrowings of $1.1 billion
through the year ended December 31, 2017. (4) The Company entered
into an accelerated share repurchase agreement with a third-party
financial institution to repurchase $400 million of the Company’s
common stock. The full amount was paid as of December 31, 2017
however, only $320 million was used to repurchase shares at that
point in time. The ASR program concluded in January 2018. (5) Free
cash flow was $421 million in 2017 excluding the payment of charges
related to the sale of Diversey of $207 million. These payments
include $170 million related to tax payments and the remainder
primarily attributable to professional fees. 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 EndedDecember
31,
Year EndedDecember 31,
2017 2016 2017
2016 (In millions, except per share data)
NetEarnings
EPS
NetEarnings
EPS
NetEarnings
EPS
NetEarnings
EPS
U.S. GAAP net earnings and EPS
available to common stockholders from continuing
operations(2)
$ 25.0 $ 0.14 $ 151.3
$ 0.77 $ 62.8 $ 0.33
$ 292.3 $ 1.48 Special Items(3) 78.1
0.44 (53.3 ) (0.27 ) 279.8 1.48 42.4
0.22
Non-U.S. GAAP adjusted net earnings
and adjusted EPS available to common stockholders
from continuing operations
$ 103.1 $ 0.58 $
98.0 $ 0.50 $
342.6 $ 1.81 $
334.7 $ 1.70
Weighted average number of common
sharesoutstanding - Diluted
175.9 196.2 188.9 197.2
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) Net earnings per common
share is calculated under the two-class method. (3) Special Items
include the following:
Three Months EndedDecember
31,
Year EndedDecember 31,
(In millions, except per share data) 2017
2016 2017 2016(1)
Special Items: Restructuring and other charges $ (2.9 ) $ (1.4 ) $
(12.1 ) $ (2.5 )
Other restructuring associated costs
included in cost of salesand selling, general and administrative
expenses
(1.6 ) (6.6 ) (14.3 ) (19.8 ) SARs (0.4 ) — 2.6 (0.7 )
Foreign currency exchange loss related to
Venezuelansubsidiaries
— (0.1 ) — (1.7 ) Charges related to ceasing operations in
Venezuela(1) — (1.2 ) — (48.5 )
Loss on sale of North American foam trays
and absorbentpads business and European food trays business
— (0.2 ) — (1.8 )
Loss related to the acquisitions of other
businesses and saleof property, plant and equipment
(10.7 ) — (15.5 ) — Charges related to the sale of Diversey (21.0 )
(1.4 ) (68.6 ) (1.4 )
Settlement/curtailment benefits related to
retained Diverseyretirement plans
— — 13.5 — Other Special Items(2) 0.1 2.6 (3.1 ) (0.7
) Pre-tax impact of Special Items (36.5 ) (8.3 ) (97.5 ) (77.1 )
Tax impact of Special Items and Tax Special Items(3) (41.6 ) 61.6
(182.3 ) 34.7 Net impact of Special Items $ (78.1 ) $
53.3 $ (279.8 ) $ (42.4 )
Weighted average number of common shares
outstanding -Diluted
175.9 196.2 188.9 197.2 Earnings per share
impact from Special Items $ (0.44 ) $ 0.27 $ (1.48 ) $ (0.22
)
______________
(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. This
resulted in total costs of $49.4 million being incurred which
included a voluntary reduction in headcount including severance and
termination benefits for employees of $0.3 million, depreciation
and amortization expense related to fixed assets and intangibles of
$0.5 million, inventory reserves of $0.4 million, income tax
expense of $0.9 million and the reclassification of $47.3 million
of cumulative translation adjustment resulting in a charge to Net
income as the Company’s decision to cease operations is similar to
a substantially complete liquidation. (2) Other Special Items for
the three months and year ended December 31, 2017 primarily
included transaction costs related to reorganizations. Other
Special Items for the three months and year ended December 31, 2016
primarily included a reduction in a non-income tax reserve
following the completion of a governmental audit in the fourth
quarter partially offset by legal fees associated with
restructuring and acquisitions. (3) Refer to Note 1 to the table
below for a description of Special Items related to tax.
The calculation of the non-U.S. GAAP Adjusted income tax rate is
as follows:
Three Months EndedDecember 31,
Year EndedDecember 31, (In millions)
2017 2016 2017
2016
U.S. GAAP Earnings before income tax
provision fromcontinuing operations
$ 119.0 $ 122.2 $ 393.3 $ 387.9 Pre-tax impact of Special Items
(36.5 ) (8.3 ) (97.5 ) (77.1 )
Non-U.S. GAAP Adjusted Earnings before
income taxprovision from continuing operations
$ 155.5 $ 130.5 $ 490.8 $ 465.0
U.S. GAAP Income tax provision (benefit)
from continuingoperations
$ 94.0 $ (29.1 ) $ 330.5 $ 95.6 Tax Special Items(1) (57.8 ) 50.5
(208.1 ) 23.7 Tax impact of Special Items 16.2 11.1
25.8 11.0
Non-U.S. GAAP Adjusted Income tax
provision fromcontinuing operations
$ 52.4 $ 32.5 $ 148.2 $ 130.3
U.S. GAAP Effective income tax rate 79.0 % (23.8 )% 84.0 % 24.6 %
Non-U.S. GAAP Adjusted income tax rate 33.7 % 24.9 % 30.2 % 28.0 %
______________
(1) For the twelve months ended December 31,
2017, the special tax items included $152 million of tax expense in
accordance with the sale of Diversey.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
SEGMENT INFORMATION(1)
(Unaudited)
Three Months EndedDecember 31,
Year EndedDecember 31, (In
millions) 2017 2016 2017
2016 Net Sales: Food Care $ 764.1 $
707.6 $ 2,815.2 $ 2,686.8 As a % of Total Company net sales 62.2 %
64.2 % 63.1 % 63.8 % Product Care 463.7 393.8 1,646.4 1,524.5 As a
% of Total Company net sales 37.8 % 35.8 % 36.9 % 36.2 %
Total
Company Net Sales $ 1,227.8 $
1,101.4 $ 4,461.6 $
4,211.3 Three Months EndedDecember
31, Year EndedDecember 31, (In millions)
2017 2016 2017 2016 Adjusted EBITDA
from continuing operations(2): Food Care $ 162.3
$ 164.7 $ 608.3 $ 605.4 Adjusted EBITDA Margin 21.2 % 23.3 % 21.6 %
22.5 % Product Care 94.6 87.3 332.3 331.1 Adjusted EBITDA Margin
20.4 % 22.2 % 20.2 % 21.7 % Corporate(3) (18.6) (35.6) (107.3)
(127.3)
Non-U.S. GAAP Total Company Adjusted
EBITDA from continuing operations
$ 238.3 $ 216.4 $
833.3 $ 809.2 Adjusted EBITDA
Margin 19.4 % 19.6 % 18.7 % 19.2 %
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) As of January 1, 2017
we modified our calculation of Adjusted EBITDA to exclude interest
income. The impact in this modification was $2.2 million and $7.5
million for the three months and year ended December 31, 2016,
respectively. (3) Unallocated costs related to Diversey that have
been included in adjusted EBITDA for Corporate were as follows:
Three Months EndedDecember
31, Year EndedDecember 31, (In
millions) 2017 2016 2017
2016 Unallocated costs $ — $ 4.1 $ 13.7 $ 15.0
SEALED AIR CORPORATION
SEGMENT INFORMATION – CONTINUED
SUPPLEMENTARY
INFORMATION(1)
RECONCILIATION OF U.S. GAAP NET
EARNINGS TO
NON-U.S. GAAP TOTAL COMPANY ADJUSTED
EBITDA
(Unaudited)
Three Months EndedDecember 31,
Year EndedDecember 31, (In
millions) 2017 2016 2017
2016(2) U.S. GAAP Net earnings from
continuing operations $ 25.0 $
151.3 $ 62.8 $ 292.3 Interest
expense (48.1 ) (48.0 ) (201.8 ) (199.4 ) Interest income 7.3 2.2
17.6 7.5 Income tax provision (benefit) 94.0 (29.1 ) 330.5 95.6
Depreciation and amortization(4) (42.0 ) (41.0 ) (158.3 ) (154.0 )
Depreciation and amortization adjustments — 0.9 — 1.7 Special
Items: Restructuring and other charges(5) (2.9 ) (1.4 ) (12.1 )
(2.5 )
Other restructuring associated costs
included in cost ofsales and selling, general and administrative
expenses
(1.6 ) (6.6 ) (14.3 ) (19.8 ) SARs (0.4 ) — 2.6 (0.7 )
Foreign currency exchange loss related to
Venezuelansubsidiaries
— (0.1 ) — (1.7 ) Charges related to ceasing operations in
Venezuela — (1.2 ) — (48.5 )
Loss on sale of North American foam trays
and absorbentpads business and European food business
— (0.2 ) — (1.8 )
Loss related to the acquisitions of other
businesses andsale of property, plant and equipment
(10.7 ) — (15.5 ) — Charges incurred related to the sale of
Diversey (21.0 ) (1.4 ) (68.6 ) (1.4 )
Settlement/curtailment benefits related to
retainedDiversey retirement plans
— — 13.5 — Other Special Items(3) 0.1 2.6 (3.1 ) (0.7
) Pre-tax impact of Special items (36.5 ) (8.3 ) (97.5 ) (77.1 )
Non-U.S. GAAP Total Company Adjusted
EBITDA from continuing operations
$ 238.3 $ 216.4 $
833.3 $ 809.2
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) Due to the ongoing
challenging economic situation in Venezuela, the Company approved a
program in the second quarter of 2016 to cease operations in the
country. This resulted in total costs of $49.4 million being
incurred which included a voluntary reduction in headcount
including severance and termination benefits for employees of $0.3
million, depreciation and amortization expense related to fixed
assets and intangibles of $0.5 million, inventory reserves of $0.4
million, income tax expense of $0.9 million and the
reclassification of $47.3 million of cumulative translation
adjustment resulting in a charge to Net income as the Company’s
decision to cease operations is similar to a substantially complete
liquidation. (3) Other Special Items for the three months and year
ended December 31, 2017 primarily included transaction costs
related to reorganizations. Other Special Items for the three
months and year ended December 31, 2016 primarily included a
reduction in a non-income tax reserve following the completion of a
governmental audit in the fourth quarter partially offset by legal
fees associated with restructuring and acquisitions. (4)
Depreciation and amortization by segment are as follows:
Three Months EndedDecember 31,
Year EndedDecember 31, (In millions)
2017 2016 2017
2016 Food Care $ 28.0 $ 23.9 $ 103.8 $ 92.2 Product Care
13.1 11.5 47.3 40.1 Corporate 0.9 5.6 7.2 21.7
Total Company
depreciation and amortization(1) $ 42.0
$ 41.0 $ 158.3
$ 154.0
______________
(1) Includes share-based incentive
compensation of $7.0 million and $38.2 million for the three months
and year ended December 31, 2017, respectively, and $13.3 million
and $50.9 million for the three months and year ended December 31,
2016, respectively. (5) Restructuring
and other charges by segment is as follows:
Three
Months EndedDecember 31, Year
EndedDecember 31, (In millions) 2017
2016 2017 2016
Food Care $ 1.8 $ 0.9 $ 7.6 $ 1.6 Product Care 1.1 0.5
4.5 0.9
Total Company restructuring and other
charges(1) $ 2.9 $
1.4 $ 12.1 $ 2.5
______________
(1) For the year ended December 31, 2016
restructuring and other charges excludes $0.3 million related to
severance and termination benefits for employees in our Venezuelan
subsidiaries.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
SEGMENT(1)
(Unaudited)
Three Months Ended December 31, (In
millions) Food Care Product Care
Total Company 2016 Net Sales $ 707.6
$ 393.8 $ 1,101.4
Volume - Units 33.8 4.8 % 21.0 5.3 % 54.8 5.0 %
Price/mix(2) 7.0 1.0 % 16.4 4.2 % 23.4 2.1 % Acquisition — —
% 23.6 6.0 % 23.6 2.1 %
Total constant dollar change
(Non-U.S.GAAP)(3)
40.8 5.8 % 61.0 15.5 % 101.8 9.2 % Foreign currency translation
15.7 2.2 % 8.9 2.3 % 24.6 2.2 %
Total
change (U.S. GAAP) 56.5 8.0 % 69.9
17.8 % 126.4 11.5 %
2017 Net Sales $ 764.1
$ 463.7 $ 1,227.8
Year Ended December 31, (In millions)
Food Care Product Care
Total Company 2016 Net Sales $ 2,686.8 $
1,524.5 $ 4,211.3
Volume - Units 102.6 3.8 % 86.2 5.7 % 188.8 4.5 % Price/mix(2) (0.7
) — % 8.7 0.6 % 8.0 0.2 % Acquisition — — % 23.6 1.5
% 23.6 0.6 %
Total constant dollar change
(Non-U.S.GAAP)(3)
101.9 3.8 % 118.5 7.8 % 220.4 5.2 % Foreign currency translation
26.5 1.0 % 3.4 0.2 % 29.9 0.7 %
Total
change (U.S. GAAP) 128.4 4.8 %
121.9 8.0 % 250.3 5.9 %
2017 Net Sales $ 2,815.2
$ 1,646.4 $ 4,461.6
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) Our price/mix reported
above includes the net impact of our pricing actions and rebates as
well as the period-to-period change in the mix of products sold.
Also included in our reported price/mix is the net effect of some
of our customers purchasing our products in non-U.S. dollar or
euro-denominated countries at selling prices denominated in U.S.
dollars or euros. This primarily arises when we export products
from the U.S. and euro-zone countries. (3) Total constant dollar
change is a non-U.S. GAAP financial measure which excludes the
impact of foreign currency translation. Since we are a U.S.
domiciled company, we translate our foreign currency denominated
financial results into U.S. dollars. Due to changes in the value of
foreign currencies relative to the U.S. dollar, translating our
financial results from foreign currencies to U.S. dollars may
result in a favorable or unfavorable impact. It is important that
we take into account the effects of foreign currency translation
when we view our results and plan our strategies. Nonetheless, we
cannot control changes in foreign currency exchange rates.
Consequently, when our management looks at our financial results to
measure the core performance of our business, we exclude the impact
of foreign currency translation by translating our current period
results at prior period foreign currency exchange rates. We also
may exclude the impact of foreign currency translation when making
incentive compensation determinations. As a result, our management
believes that these presentations are useful internally and may be
useful to our investors.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
REGION(1)
(Unaudited)
Three Months Ended December 31, (In
millions) North America
EMEA(2) Latin America
APAC(3) Total 2016 net
sales $ 580.0 $ 246.2 $ 107.7
$ 167.5 $ 1,101.4
Volume - Units 33.7 5.8 % 11.8 4.8 % 7.3 6.8 % 2.0 1.2 %
54.8 5.0 % Price/mix(4) 21.6 3.7 % (0.5 ) (0.2 )% (0.4 ) (0.4 )%
2.7 1.6 % 23.4 2.1 % Acquisition — — % — — % —
— % 23.6 14.1 % 23.6 2.1 %
Total constant dollarchange
(Non-U.S.GAAP)(5)
55.3 9.5 % 11.3 4.6 % 6.9 6.4 % 28.3 16.9 % 101.8 9.2 %
Foreign currencytranslation
1.8 0.3 % 20.5 8.3 % 0.5 0.5 % 1.8 1.1
% 24.6 2.2 %
Total change (U.S. GAAP)
57.1 9.8 % 31.8 12.9 %
7.4 6.9 % 30.1 18.0 %
126.4 11.5 %
2017 net sales $ 637.1 $
278.0 $ 115.1 $
197.6 $ 1,227.8
Year Ended December 31, (In millions)
North America EMEA(2)
Latin America APAC(3)
Total 2016 net sales $ 2,237.8
$ 962.7 $ 396.8 $ 614.0
$ 4,211.3 Volume - Units
161.4 7.2 % 12.9 1.3 % 5.9 1.5 % 8.6 1.4 % 188.8 4.5 % Price/mix(4)
12.9 0.6 % (7.9 ) (0.8 )% 4.0 1.0 % (1.0 ) (0.2 )% 8.0 0.2 %
Acquisition — — % — — % — — % 23.6 3.8
% 23.6 0.6 %
Total constant dollar change
(Non-U.S.GAAP)(5)
174.3 7.8 % 5.0 0.5 % 9.9 2.5 % 31.2 5.0 % 220.4 5.2 %
Foreign currencytranslation
2.9 0.1 % 17.0 1.8 % 2.6 0.7 % 7.4 1.2
% 29.9 0.7 %
Total change (U.S. GAAP)
177.2 7.9 % 22.0 2.3 %
12.5 3.2 % 38.6 6.2 %
250.3 5.9 %
2017 net sales $ 2,415.0 $
984.7 $ 409.3 $
652.6 $ 4,461.6
______________
(1) The supplementary information included in
this press release for 2017 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. (2) EMEA consists of
Europe, Middle East, Africa and Turkey. (3) APAC refers
collectively to our Asia Pacific region. This region consists of i)
Greater China, ii) India/Southeast Asia and iii) Australia, New
Zealand, Japan and Korea. (4) Our price/mix reported above includes
the net impact of our pricing actions and rebates as well as the
period-to-period change in the mix of products sold. Also included
in our reported price/mix is the net effect of some of our
customers purchasing our products in non-U.S. dollar or
euro-denominated countries at selling prices denominated in U.S.
dollars or euros. This primarily arises when we export products
from the U.S. and euro-zone countries. (5) Total constant dollar
change is a non-U.S. GAAP financial measure which excludes the
impact of foreign currency translation. Since we are a U.S.
domiciled company, we translate our foreign currency denominated
financial results into U.S. dollars. Due to changes in the value of
foreign currencies relative to the U.S. dollar, translating our
financial results from foreign currencies to U.S. dollars may
result in a favorable or unfavorable impact. It is important that
we take into account the effects of foreign currency translation
when we view our results and plan our strategies. Nonetheless, we
cannot control changes in foreign currency exchange rates.
Consequently, when our management looks at our financial results to
measure the core performance of our business, we exclude the impact
of foreign currency translation by translating our current period
results at prior period foreign currency exchange rates. We also
may exclude the impact of foreign currency translation when making
incentive compensation determinations. As a result, our management
believes that these presentations are useful internally and may be
useful to our investors.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180208005323/en/
For Sealed Air CorporationInvestor RelationsLori Chaitman,
704-503-8841
Sealed Air (NYSE:SEE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sealed Air (NYSE:SEE)
Historical Stock Chart
From Apr 2023 to Apr 2024