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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sealed Air Corporation | NYSE:SEE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.22 | 3.43% | 36.81 | 37.01 | 35.64 | 35.93 | 895,360 | 22:29:36 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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65-0654331
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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2415 Cascade Pointe Boulevard
Charlotte, North Carolina
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28208
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I. FINANCIAL INFORMATION
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PART II. OTHER INFORMATION
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(In millions, except share and per share data)
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March 31, 2018 (unaudited)
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December 31, 2017
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||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
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||
Cash and cash equivalents
|
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$
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326.9
|
|
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$
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594.0
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Trade receivables, net of allowance for doubtful accounts of $6.8 in 2018 and $6.5 in 2017
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465.1
|
|
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552.4
|
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Income tax receivables
|
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13.4
|
|
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85.1
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||
Other receivables
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99.3
|
|
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90.2
|
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Inventories, net of inventory reserves of $18.6 in 2018 and $15.5 in 2017
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563.8
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|
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506.8
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Current assets held for sale
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1.7
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4.0
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||
Prepaid expenses and other current assets
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195.0
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|
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33.9
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||
Total current assets
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1,665.2
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1,866.4
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Property and equipment, net
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1,013.6
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998.4
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Goodwill
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1,943.3
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1,939.8
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Identifiable intangible assets, net
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87.2
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83.6
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Deferred taxes
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127.0
|
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176.2
|
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||
Other non-current assets
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204.8
|
|
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215.9
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||
Total assets
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$
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5,041.1
|
|
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$
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5,280.3
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Liabilities and Stockholders' Equity
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Current liabilities:
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|
|
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Short-term borrowings
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$
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155.7
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$
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25.3
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Current portion of long-term debt
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1.6
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2.2
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Accounts payable
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729.9
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|
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723.8
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|
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Current liabilities held for sale
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—
|
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2.2
|
|
||
Accrued restructuring costs
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20.6
|
|
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15.4
|
|
||
Income tax payable
|
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46.2
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47.3
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Other current liabilities
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468.8
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562.0
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Total current liabilities
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1,422.8
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1,378.2
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Long-term debt, less current portion
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3,247.9
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3,230.5
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Deferred taxes
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27.4
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28.5
|
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Other non-current liabilities
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707.8
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490.8
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Total liabilities
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5,405.9
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5,128.0
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Commitments and contingencies - Note 16
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Stockholders’ equity:
|
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Preferred stock, $0.10 par value per share, 50,000,000 shares authorized; no shares issued in 2018 and 2017
|
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—
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—
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Common stock, $0.10 par value per share, 400,000,000 shares authorized; shares issued: 231,580,569 in 2018 and 230,080,944 in 2017; shares outstanding: 161,616,753 in 2018 and 168,595,521 in 2017
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23.2
|
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23.0
|
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||
Additional paid-in capital
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2,025.8
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1,939.6
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Retained earnings
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1,502.9
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1,735.2
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Common stock in treasury, 69,963,816 shares in 2018 and 61,485,423 shares in 2017
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(3,090.9
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)
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(2,700.6
|
)
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Accumulated other comprehensive loss, net of taxes
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(825.8
|
)
|
|
(844.9
|
)
|
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Total stockholders’ equity
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(364.8
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)
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152.3
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||
Total liabilities and stockholders’ equity
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$
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5,041.1
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$
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5,280.3
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Three Months Ended March 31, (unaudited)
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(In millions, except per share data)
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2018
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2017
|
||||
Net sales
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$
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1,131.0
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$
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1,032.2
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Cost of sales
(1)(2)
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757.0
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696.8
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Gross profit
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374.0
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335.4
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Selling, general and administrative expenses
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194.0
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197.4
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Amortization expense of intangible assets acquired
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3.9
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5.0
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Restructuring and other charges
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8.6
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1.9
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Operating profit
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167.5
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131.1
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Interest expense, net
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(42.0
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)
|
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(46.6
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)
|
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Other expense, net
(1)(2)
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(12.0
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)
|
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(1.8
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)
|
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Earnings before income tax provision
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113.5
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|
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82.7
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Income tax provision
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321.5
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136.4
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Net loss from continuing operations
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(208.0
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)
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(53.7
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)
|
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Gain on sale of discontinued operations, net of tax
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7.4
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—
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Net earnings from discontinued operations, net of tax
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—
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10.5
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Net loss
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$
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(200.6
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)
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$
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(43.2
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)
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Basic:
|
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|
|
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Continuing operations
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$
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(1.25
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)
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$
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(0.27
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)
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Discontinued operations
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0.04
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|
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0.05
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Net loss per common share - basic
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$
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(1.21
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)
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$
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(0.22
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)
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Diluted:
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|
||||
Continuing operations
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$
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(1.25
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)
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$
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(0.27
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)
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Discontinued operations
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0.04
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0.05
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Net loss per common share - diluted
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$
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(1.21
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)
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$
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(0.22
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)
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Dividends per common share
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$
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0.16
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$
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0.16
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Weighted average number of common shares outstanding:
|
|
|
|
|
||||
Basic
|
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165.3
|
|
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193.4
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||
Diluted
|
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165.3
|
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195.7
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(1)
|
Due to the adoption of ASU 2017-07, certain amounts related to defined benefit and other post-employment benefit plans were reclassified from cost of sales to other expense, net. Refer to Note 2, "Recently Adopted and Issued Accounting Standards," in the Notes to Condensed Consolidated Financial Statements for more information.
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(2)
|
As part of our review of costs included in the corporate segment, amounts related to division operations were identified and reclassified out of other expense, net to cost of sales.
The impact for the three months ended March 31, 2017 was
$1.9 million
.
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|
Three Months Ended March 31, (unaudited)
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||||||
(In millions)
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2018
|
|
2017
|
||||
Net loss
|
|
$
|
(200.6
|
)
|
|
$
|
(43.2
|
)
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
||
Recognition of pension items, net of taxes of $(0.2) and $0.2 for the three months ended March 31, 2018 and 2017, respectively
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0.6
|
|
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4.5
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|
||
Unrealized losses on derivative instruments for net investment hedge, net of taxes of $3.6 and $3.0 for the three months ended March 31, 2018 and 2017, respectively
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(10.7
|
)
|
|
(4.9
|
)
|
||
Unrealized gains (losses) on derivative instruments for cash flow hedge, net of taxes of $(0.5) and $1.2 for the three months ended March 31, 2018 and 2017, respectively
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0.8
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|
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(4.7
|
)
|
||
Foreign currency translation adjustments, net of taxes of $1.0 and $1.9 for the three months ended March 31, 2018 and 2017, respectively
|
|
28.4
|
|
|
55.2
|
|
||
Other comprehensive income, net of taxes
|
|
19.1
|
|
|
50.1
|
|
||
Comprehensive (loss) income, net of taxes
|
|
$
|
(181.5
|
)
|
|
$
|
6.9
|
|
(In millions)
|
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Retained Earnings
|
|
Common Stock
in Treasury
|
|
Accumulated Other
Comprehensive Loss, Net of Taxes |
|
Total
Stockholders’ Equity |
||||||||||||
Balance at December 31, 2016
|
|
$
|
22.8
|
|
|
$
|
1,974.1
|
|
|
$
|
1,040.0
|
|
|
$
|
(1,478.1
|
)
|
|
$
|
(949.1
|
)
|
|
$
|
609.7
|
|
Effect of contingent stock transactions
|
|
0.2
|
|
|
8.9
|
|
|
—
|
|
|
(21.7
|
)
|
|
—
|
|
|
(12.6
|
)
|
||||||
Stock issued for share-based incentive compensation
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
21.7
|
|
|
—
|
|
|
22.2
|
|
||||||
Recognition of pension items, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|
4.5
|
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.2
|
|
|
55.2
|
|
||||||
Unrealized loss on derivative instruments, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.6
|
)
|
|
(9.6
|
)
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
(43.2
|
)
|
|
—
|
|
|
—
|
|
|
(43.2
|
)
|
||||||
Dividends on common stock ($0.16 per share)
|
|
—
|
|
|
—
|
|
|
(31.4
|
)
|
|
—
|
|
|
—
|
|
|
(31.4
|
)
|
||||||
Balance at March 31, 2017
|
|
$
|
23.0
|
|
|
$
|
1,983.5
|
|
|
$
|
965.4
|
|
|
$
|
(1,478.1
|
)
|
|
$
|
(899.0
|
)
|
|
$
|
594.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2017
|
|
$
|
23.0
|
|
|
$
|
1,939.6
|
|
|
$
|
1,735.2
|
|
|
$
|
(2,700.6
|
)
|
|
$
|
(844.9
|
)
|
|
$
|
152.3
|
|
Effect of contingent stock transactions
|
|
0.2
|
|
|
6.2
|
|
|
—
|
|
|
(6.3
|
)
|
|
—
|
|
|
0.1
|
|
||||||
Stock issued for share-based incentive compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.7
|
|
|
—
|
|
|
20.7
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
80.0
|
|
|
—
|
|
|
(404.7
|
)
|
|
—
|
|
|
(324.7
|
)
|
||||||
Recognition of pension items, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.4
|
|
|
28.4
|
|
||||||
Unrealized loss on derivative instruments, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.9
|
)
|
|
(9.9
|
)
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
(200.6
|
)
|
|
—
|
|
|
—
|
|
|
(200.6
|
)
|
||||||
Dividends on common stock ($0.16 per share)
|
|
—
|
|
|
—
|
|
|
(26.6
|
)
|
|
—
|
|
|
—
|
|
|
(26.6
|
)
|
||||||
Impact of recently adopted accounting standards
(1)
|
|
—
|
|
|
—
|
|
|
(5.1
|
)
|
|
—
|
|
|
—
|
|
|
(5.1
|
)
|
||||||
Balance at March 31, 2018
|
|
$
|
23.2
|
|
|
$
|
2,025.8
|
|
|
$
|
1,502.9
|
|
|
$
|
(3,090.9
|
)
|
|
$
|
(825.8
|
)
|
|
$
|
(364.8
|
)
|
|
(1)
|
Due to the adoption of ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) the Company recorded decreases to retained earnings of
$2.7 million
and
$2.4 million
, respectively. See Note 2, "Recently Adopted and Issued Accounting Standards," in the Notes to Condensed Consolidated Financial Statements for more information.
|
|
|
Three Months Ended March 31, (unaudited)
|
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Net loss
|
|
$
|
(200.6
|
)
|
|
$
|
(43.2
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
32.8
|
|
|
52.8
|
|
||
Share-based incentive compensation
|
|
6.4
|
|
|
8.9
|
|
||
Profit sharing expense
|
|
5.2
|
|
|
8.8
|
|
||
Provisions for bad debt
|
|
0.3
|
|
|
1.8
|
|
||
Provisions for inventory obsolescence
|
|
—
|
|
|
2.4
|
|
||
Deferred taxes, net
|
|
56.9
|
|
|
112.2
|
|
||
Net gain on sale of business
|
|
(8.7
|
)
|
|
(2.3
|
)
|
||
Other non-cash items
|
|
(11.8
|
)
|
|
0.3
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Trade receivables, net
|
|
3.8
|
|
|
(3.3
|
)
|
||
Inventories
|
|
(50.6
|
)
|
|
(64.3
|
)
|
||
Accounts payable
|
|
7.3
|
|
|
56.1
|
|
||
Other assets and liabilities
|
|
125.3
|
|
|
(113.0
|
)
|
||
Net cash (used in) provided by operating activities
|
|
$
|
(33.7
|
)
|
|
$
|
17.2
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(43.4
|
)
|
|
(50.4
|
)
|
||
Proceeds, net from sale of business and property and equipment
|
|
8.1
|
|
|
2.3
|
|
||
Business acquired, net of cash acquired
|
|
0.9
|
|
|
—
|
|
||
Settlement of foreign currency forward contracts
|
|
1.0
|
|
|
(7.3
|
)
|
||
Other investing activities
|
|
(2.6
|
)
|
|
0.1
|
|
||
Net cash used in investing activities
|
|
$
|
(36.0
|
)
|
|
$
|
(55.3
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Net proceeds from borrowings
|
|
129.6
|
|
|
10.2
|
|
||
Dividends paid on common stock
|
|
(27.8
|
)
|
|
(31.4
|
)
|
||
Acquisition of common stock for tax withholding
|
|
(6.3
|
)
|
|
(21.5
|
)
|
||
Repurchases of common stock
|
|
(311.7
|
)
|
|
—
|
|
||
Other financing activities
|
|
—
|
|
|
(1.8
|
)
|
||
Net cash used in financing activities
(1)
|
|
$
|
(216.2
|
)
|
|
$
|
(44.5
|
)
|
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
|
$
|
18.8
|
|
|
$
|
8.5
|
|
Cash Reconciliation
(1)
:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
594.0
|
|
|
333.7
|
|
||
Restricted cash and cash equivalents
(2)
|
|
—
|
|
|
52.9
|
|
||
Balance, beginning of period
|
|
$
|
594.0
|
|
|
$
|
386.6
|
|
Net change during the period
|
|
$
|
(267.1
|
)
|
|
$
|
(74.1
|
)
|
Cash and cash equivalents
|
|
326.9
|
|
|
258.4
|
|
||
Restricted cash and cash equivalents
(2)
|
|
—
|
|
|
54.1
|
|
||
Balance, end of period
|
|
$
|
326.9
|
|
|
$
|
312.5
|
|
|
|
|
|
|
||||
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
||
Interest payments, net of amounts capitalized
|
|
$
|
37.6
|
|
|
$
|
48.0
|
|
Income tax payments
|
|
$
|
19.3
|
|
|
$
|
46.2
|
|
Payments related to the sale of Diversey and efforts to address related stranded costs
|
|
$
|
14.3
|
|
|
$
|
2.4
|
|
Restructuring payments including associated costs
|
|
$
|
2.8
|
|
|
$
|
15.2
|
|
Non-cash items:
|
|
|
|
|
||||
Transfers of shares of common stock from treasury for 2017 and 2016 profit-sharing contributions
|
|
$
|
20.7
|
|
|
$
|
22.3
|
|
|
(1)
|
Due to the adoption of ASU 2016-18, the Company now is required to include restricted cash as part of the change in the total cash balance. As a result, amounts which were previously classified as cash flows from financing activities have been reclassified as they are recognized in the total change in cash. Refer to Note 2, "Recently Adopted and Issued Accounting Standards," in the Notes to Condensed Consolidated Financial Statements for more information.
|
(2)
|
Restricted cash and cash equivalents included compensating balance deposits related to certain short-term borrowings.
|
|
March 31, 2018
|
||||||||
(In millions)
|
As Reported
|
Balances without Adoption of Topic 606
|
Effect of Change
|
||||||
Net sales
|
$
|
1,131.0
|
|
$
|
1,130.9
|
|
$
|
0.1
|
|
Other current liabilities
|
468.8
|
|
467.4
|
|
1.4
|
|
|||
Other non-current liabilities
|
707.8
|
|
706.0
|
|
1.8
|
|
Impact by Line Item
|
Reason for Change
|
Opening Balance Sheet Adjustment as of January 1, 2018
(In millions)
|
||
Other current liabilities
|
Certain contracts include an equipment accrual, whereby a customer is awarded a credit based on consumable purchases that can be redeemed for future equipment purchases. Long term contracts that include an equipment accrual create a timing difference between when cash is collected and the performance obligation is satisfied. Upon the adoption of Topic 606 the equipment accrual balance was increased to reflect the standalone selling price within our equipment portfolio.
|
$
|
2.4
|
|
Retained earnings
|
The modified retrospective adoption of the new revenue standard resulted in a cumulative adjustment decreasing retained earnings, which was associated with adjusting our equipment accrual contract offering to the standalone selling price value.
|
(2.4
|
)
|
|
|
|
|
|
|
|
||||||
(In millions)
|
|
Food Care
|
|
Product Care
|
|
Total
|
||||||
North America
|
|
$
|
341.0
|
|
|
$
|
249.9
|
|
|
$
|
590.9
|
|
EMEA
(1)
|
|
155.7
|
|
|
101.1
|
|
|
256.8
|
|
|||
Latin America
|
|
91.0
|
|
|
11.8
|
|
|
102.8
|
|
|||
APAC
(2)
|
|
103.7
|
|
|
69.9
|
|
|
173.6
|
|
|||
Topic 606 Segment Revenue
|
|
691.4
|
|
|
432.7
|
|
|
1,124.1
|
|
|||
Non-Topic 606 Revenue (Leasing)
|
|
4.9
|
|
|
2.0
|
|
|
6.9
|
|
|||
Total
|
|
$
|
696.3
|
|
|
$
|
434.7
|
|
|
$
|
1,131.0
|
|
|
(1)
|
EMEA = Europe, Middle East and Africa
|
(2)
|
APAC = Asia, Australia and New Zealand
|
(In millions)
|
|
December 31, 2017
|
|
January 1, 2018,
as adjusted
|
|
March 31, 2018
|
||||||
Contract assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Contract liabilities
|
|
3.1
|
|
|
5.5
|
|
|
6.3
|
|
(In millions)
|
|
Short-Term
(12 months or less) |
|
Long-Term
|
|
Total
|
||||||
Total transaction price
|
|
$
|
2.8
|
|
|
$
|
3.5
|
|
|
$
|
6.3
|
|
|
|
Three Months Ended
March 31, |
||
(In millions)
|
|
2017
|
||
Net sales
|
|
$
|
581.7
|
|
Cost of sales
|
|
330.5
|
|
|
Gross profit
|
|
251.2
|
|
|
Selling, general and administrative expenses
|
|
198.9
|
|
|
Amortization expense of intangible assets acquired
|
|
17.7
|
|
|
Operating profit
|
|
34.6
|
|
|
Other expense, net
|
|
(2.9
|
)
|
|
Earnings from discontinued operations before income tax provision
(1)
|
|
31.7
|
|
|
Income tax provision from discontinued operations
|
|
21.2
|
|
|
Net earnings from discontinued operations
|
|
$
|
10.5
|
|
|
(1)
|
For the
three
months ended
March 31, 2017
, net earnings from discontinued operations was impacted by a tax expense of
$19.5 million
related to a change in the repatriation strategy of foreign earnings.
|
|
|
Three Months Ended
March 31, |
||
(In millions)
|
|
2017
|
||
Non-cash items included in net earnings from discontinued operations:
|
|
|
|
|
Depreciation and amortization
|
|
$
|
23.4
|
|
Share-based incentive compensation
|
|
3.3
|
|
|
Profit sharing expense
|
|
1.0
|
|
|
Provision for bad debt
|
|
1.3
|
|
|
Capital expenditures
|
|
3.4
|
|
|
|
Preliminary Allocation
|
Measurement Period
|
Revised Preliminary Allocation
|
|||
(In millions)
|
|
As of October 2, 2017
|
Adjustments
|
As of March 31, 2018
|
|||
Total consideration transferred
|
|
$106.6
|
$(0.4)
|
$106.2
|
|||
|
|
|
|
|
|||
Assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
|
$13.3
|
|
$13.3
|
|||
Trade receivables, net
|
|
22.4
|
|
|
22.4
|
|
|
Inventory, net
|
|
10.0
|
|
|
10.0
|
|
|
Prepaid expenses and other current assets
|
|
8.4
|
|
|
8.4
|
|
|
Property and equipment, net
|
|
23.3
|
|
|
23.3
|
|
|
Intangible assets, net
|
|
41.4
|
|
0.7
|
|
42.1
|
|
Goodwill
|
|
39.3
|
|
(0.2
|
)
|
39.1
|
|
Assets
|
|
$158.1
|
$0.5
|
$158.6
|
|||
Liabilities:
|
|
|
|
|
|||
Short-term borrowings
|
|
$14.0
|
|
$14.0
|
|||
Accounts payable
|
|
6.9
|
|
|
6.9
|
|
|
Other current liabilities
|
|
15.1
|
|
0.9
|
|
16.0
|
|
Long-term debt, less current portion
|
|
3.8
|
|
|
3.8
|
|
|
Non-current deferred taxes
|
|
11.7
|
|
|
11.7
|
|
|
Liabilities
|
|
$51.5
|
$0.9
|
$52.4
|
•
|
Food Care; and
|
•
|
Product Care.
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Net Sales:
|
|
|
|
|
|
|
||
Food Care
|
|
$
|
696.3
|
|
|
$
|
655.6
|
|
As a % of Total Company net sales
|
|
61.6
|
%
|
|
63.5
|
%
|
||
Product Care
|
|
434.7
|
|
|
376.6
|
|
||
As a % of Total Company net sales
|
|
38.4
|
%
|
|
36.5
|
%
|
||
Total Company Net Sales
|
|
$
|
1,131.0
|
|
|
$
|
1,032.2
|
|
|
|
|
||||||
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Adjusted EBITDA from continuing operations
|
|
|
|
|
|
|
||
Food Care
|
|
$
|
134.7
|
|
|
$
|
122.0
|
|
Adjusted EBITDA Margin
|
|
19.3
|
%
|
|
18.6
|
%
|
||
Product Care
|
|
78.4
|
|
|
63.3
|
|
||
Adjusted EBITDA Margin
|
|
18.0
|
%
|
|
16.8
|
%
|
||
Corporate
|
|
(8.3)
|
|
|
(3.4)
|
|
||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
204.8
|
|
|
$
|
181.9
|
|
Adjusted EBITDA Margin
|
|
18.1
|
%
|
|
17.6
|
%
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Net loss from continuing operations
|
|
$
|
(208.0
|
)
|
|
$
|
(53.7
|
)
|
Interest expense, net
|
|
(42.0
|
)
|
|
(46.6
|
)
|
||
Income tax provision
|
|
321.5
|
|
|
136.4
|
|
||
Depreciation and amortization
(2)
|
|
(40.4
|
)
|
|
(37.2
|
)
|
||
Depreciation and amortization adjustments
|
|
0.2
|
|
|
—
|
|
||
Special Items:
|
|
|
|
|
||||
Restructuring and other charges
(3)
|
|
(8.6
|
)
|
|
(1.9
|
)
|
||
Other restructuring associated costs
|
|
(2.2
|
)
|
|
(3.9
|
)
|
||
(Loss) gain on acquisition and divestiture activity
|
|
(4.0
|
)
|
|
2.3
|
|
||
Charges incurred due to the sale of Diversey
|
|
(6.8
|
)
|
|
(16.1
|
)
|
||
Gain from class-action litigation settlement
|
|
12.7
|
|
|
—
|
|
||
Other Special Items
(1)
|
|
(0.2
|
)
|
|
4.2
|
|
||
Pre-tax impact of Special Items
|
|
(9.1
|
)
|
|
(15.4
|
)
|
||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
204.8
|
|
|
$
|
181.9
|
|
|
(1)
|
Other Special Items for the three months ended March 31, 2017 primarily included a recovered wage tax as the result of a court ruling partially offset by legal fees associated with restructuring and acquisitions.
|
(2)
|
Depreciation and amortization by segment is as follows:
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Food Care
|
|
$
|
26.9
|
|
|
$
|
24.7
|
|
Product Care
|
|
13.5
|
|
|
12.5
|
|
||
Total Company depreciation and amortization
(i)
|
|
$
|
40.4
|
|
|
$
|
37.2
|
|
|
(i)
|
Includes share-based incentive compensation of
$7.6 million
and
$8.0 million
for the
three
months ended
March 31, 2018
and
2017
, respectively.
|
(3)
|
Restructuring and other charges by segment were as follows:
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Food Care
|
|
$
|
4.6
|
|
|
$
|
1.2
|
|
Product Care
|
|
4.0
|
|
|
0.7
|
|
||
Total Company restructuring and other charges
|
|
$
|
8.6
|
|
|
$
|
1.9
|
|
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Assets allocated to segments:
|
|
|
|
|
|
|
||
Food Care
|
|
$
|
1,587.2
|
|
|
$
|
1,545.5
|
|
Product Care
|
|
2,568.3
|
|
|
2,620.2
|
|
||
Total segments
|
|
4,155.5
|
|
|
4,165.7
|
|
||
Assets not allocated:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
326.9
|
|
|
$
|
594.0
|
|
Assets held for sale
|
|
1.7
|
|
|
4.0
|
|
||
Income tax receivables
|
|
13.4
|
|
|
85.1
|
|
||
Other receivables
|
|
99.3
|
|
|
90.2
|
|
||
Deferred taxes
|
|
127.0
|
|
|
176.2
|
|
||
Other
|
|
317.3
|
|
|
165.1
|
|
||
Total
|
|
$
|
5,041.1
|
|
|
$
|
5,280.3
|
|
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Raw materials
|
|
$
|
95.9
|
|
|
$
|
82.8
|
|
Work in process
|
|
138.8
|
|
|
125.7
|
|
||
Finished goods
|
|
329.1
|
|
|
298.3
|
|
||
Total
|
|
$
|
563.8
|
|
|
$
|
506.8
|
|
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Land and improvements
|
|
$
|
43.9
|
|
|
$
|
43.5
|
|
Buildings
|
|
729.0
|
|
|
718.9
|
|
||
Machinery and equipment
|
|
2,374.5
|
|
|
2,330.5
|
|
||
Other property and equipment
|
|
121.3
|
|
|
116.3
|
|
||
Construction-in-progress
|
|
114.2
|
|
|
114.7
|
|
||
Property and equipment, gross
|
|
3,382.9
|
|
|
3,323.9
|
|
||
Accumulated depreciation and amortization
|
|
(2,369.3
|
)
|
|
(2,325.5
|
)
|
||
Property and equipment, net
|
|
$
|
1,013.6
|
|
|
$
|
998.4
|
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Interest cost capitalized
|
|
$
|
2.2
|
|
|
$
|
3.0
|
|
Depreciation and amortization expense for property and equipment
|
|
$
|
28.9
|
|
|
$
|
24.1
|
|
(In millions)
|
|
Food Care
|
|
Product Care
|
|
Total
|
||||||
Carrying Value at December 31, 2017
|
|
$
|
526.9
|
|
|
$
|
1,412.9
|
|
|
$
|
1,939.8
|
|
Purchase price and other adjustments
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|
(0.8
|
)
|
|||
Currency translation
|
|
3.9
|
|
|
0.4
|
|
|
4.3
|
|
|||
Carrying Value at March 31, 2018
|
|
$
|
530.2
|
|
|
$
|
1,413.1
|
|
|
$
|
1,943.3
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Gross
Carrying Value
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
Carrying Value
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Customer relationships
|
$
|
57.1
|
|
|
$
|
(20.5
|
)
|
|
$
|
36.6
|
|
|
$
|
59.7
|
|
|
$
|
(19.7
|
)
|
|
$
|
40.0
|
|
Trademarks and tradenames
|
11.7
|
|
|
(0.7
|
)
|
|
11.0
|
|
|
11.6
|
|
|
(0.5
|
)
|
|
11.1
|
|
||||||
Capitalized software
|
53.3
|
|
|
(42.0
|
)
|
|
11.3
|
|
|
50.6
|
|
|
(40.0
|
)
|
|
10.6
|
|
||||||
Technology
|
44.0
|
|
|
(28.3
|
)
|
|
15.7
|
|
|
39.2
|
|
|
(27.5
|
)
|
|
11.7
|
|
||||||
Contracts
|
13.5
|
|
|
(9.8
|
)
|
|
3.7
|
|
|
10.9
|
|
|
(9.6
|
)
|
|
1.3
|
|
||||||
Total intangible assets with definite lives
|
179.6
|
|
|
(101.3
|
)
|
|
78.3
|
|
|
172.0
|
|
|
(97.3
|
)
|
|
74.7
|
|
||||||
Trademarks and tradenames with indefinite lives
|
8.9
|
|
|
—
|
|
|
8.9
|
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
||||||
Total identifiable intangible assets, net
|
$
|
188.5
|
|
|
$
|
(101.3
|
)
|
|
$
|
87.2
|
|
|
$
|
180.9
|
|
|
$
|
(97.3
|
)
|
|
$
|
83.6
|
|
Year
|
Amount
(in millions)
|
||
Remainder of 2018
|
$
|
9.1
|
|
2019
|
9.2
|
|
|
2020
|
6.5
|
|
|
2021
|
5.0
|
|
|
Thereafter
|
48.5
|
|
|
Total
|
$
|
78.3
|
|
|
Sealed Air Restructuring Program
|
||
Approximate positions eliminated by the program
|
1,950
|
|
|
Estimated Program Costs (in millions):
|
|
|
|
Costs of reduction in headcount as a result of reorganization
|
$260-$270
|
|
|
Other expenses associated with the Program
|
130-135
|
|
|
Total expense
|
$390-$405
|
|
|
Capital expenditures
|
250-255
|
|
|
Proceeds, foreign exchange and other cash items
|
(70)-(75)
|
|
|
Total estimated net cash cost
|
$570-$585
|
|
|
Program to Date Cumulative Expense (in millions):
|
|
||
Costs of reduction in headcount as a result of reorganization
|
$
|
246
|
|
Other expenses associated with the Program
|
125
|
|
|
Total Cumulative Expense
|
$
|
371
|
|
Cumulative capital expenditures
|
$
|
235
|
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Continuing Operations:
|
|
|
|
|
||||
Other associated costs
|
|
$
|
2.2
|
|
|
$
|
3.9
|
|
Restructuring charges
|
|
8.6
|
|
|
1.9
|
|
||
Total charges from continuing operations
|
|
10.8
|
|
|
5.8
|
|
||
Charges included in discontinued operations
|
|
—
|
|
|
(1.7
|
)
|
||
Total charges
|
|
$
|
10.8
|
|
|
$
|
4.1
|
|
Capital expenditures
|
|
$
|
0.2
|
|
|
$
|
9.9
|
|
(In millions)
|
|
||
Restructuring accrual at December 31, 2017
|
$
|
16.1
|
|
Accrual and accrual adjustments
|
8.6
|
|
|
Cash payments during 2018
|
(4.1
|
)
|
|
Effect of changes in foreign currency exchange rates
|
0.3
|
|
|
Restructuring accrual at March 31, 2018
|
$
|
20.9
|
|
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Short-term borrowings
(1)
|
|
$
|
155.7
|
|
|
$
|
25.3
|
|
Current portion of long-term debt
|
|
1.6
|
|
|
2.2
|
|
||
Total current debt
|
|
157.3
|
|
|
27.5
|
|
||
Term Loan A due July 2019
|
|
225.0
|
|
|
222.7
|
|
||
6.50% Senior Notes due December 2020
|
|
423.7
|
|
|
423.6
|
|
||
4.875% Senior Notes due December 2022
|
|
420.6
|
|
|
420.4
|
|
||
5.25% Senior Notes due April 2023
|
|
420.6
|
|
|
420.4
|
|
||
4.50% Senior Notes due September 2023
|
|
488.7
|
|
|
474.3
|
|
||
5.125% Senior Notes due December 2024
|
|
420.9
|
|
|
420.7
|
|
||
5.50% Senior Notes due September 2025
|
|
396.7
|
|
|
396.7
|
|
||
6.875% Senior Notes due July 2033
|
|
445.4
|
|
|
445.4
|
|
||
Other
|
|
6.3
|
|
|
6.3
|
|
||
Total long-term debt, less current portion
(3)
|
|
3,247.9
|
|
|
3,230.5
|
|
||
Total debt
(2)
|
|
$
|
3,405.2
|
|
|
$
|
3,258.0
|
|
|
(1)
|
Short-term borrowings of
$155.7 million
at
March 31, 2018
are comprised of
$91.4 million
under our European securitization program and
$64.3 million
of short term borrowings from various lines of credit. Short-term borrowings of
$25.3 million
at
December 31, 2017
were comprised
$2.1 million
of Diversey accounts payable obligations under financing arrangements which Sealed Air was fully reimbursed for as part of the sale of Diversey as well as
$23.2 million
of short-term borrowings from various lines of credit.
|
(2)
|
As of
March 31, 2018
, our weighted average interest rate on our short-term borrowings outstanding was
1.8%
and on our long-term debt outstanding was
5.3%
. As of
December 31, 2017
, our weighted average interest rate on our short-term borrowings outstanding was
5.4%
and on our long-term debt outstanding was
5.3%
.
|
(3)
|
Amounts are net of unamortized discounts and issuance costs of
$28.1 million
as
March 31, 2018
and
$29.5 million
as of
December 31, 2017
.
|
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Used lines of credit
(1)
|
|
$
|
155.7
|
|
|
$
|
23.2
|
|
Unused lines of credit
|
|
942.3
|
|
|
1,108.6
|
|
||
Total available lines of credit
(2)
|
|
$
|
1,098.0
|
|
|
$
|
1,131.8
|
|
|
(1)
|
Includes total borrowings under the accounts receivable securitization programs, the revolving credit facility and borrowings under lines of credit available to several subsidiaries.
|
(2)
|
Of the total available lines of credit,
$852.7 million
was committed as of
March 31, 2018
.
|
|
Cash Flow
|
|
Non-Designated
|
|
Total
|
||||||||||||||||||
(In millions)
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
7.2
|
|
|
$
|
3.6
|
|
|
$
|
7.9
|
|
|
$
|
4.1
|
|
Total Derivative Assets
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
7.2
|
|
|
$
|
3.6
|
|
|
$
|
7.9
|
|
|
$
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
$
|
(1.0
|
)
|
|
$
|
(2.4
|
)
|
|
$
|
(9.2
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(10.2
|
)
|
|
$
|
(5.7
|
)
|
Total Derivative Liabilities
(1)
|
$
|
(1.0
|
)
|
|
$
|
(2.4
|
)
|
|
$
|
(9.2
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(10.2
|
)
|
|
$
|
(5.7
|
)
|
Net Derivatives
(2)
|
$
|
(0.3
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
0.3
|
|
|
$
|
(2.3
|
)
|
|
$
|
(1.6
|
)
|
|
(1)
|
Excludes
€400.0 million
of euro-denominated debt (
$488.7 million
equivalent at
March 31, 2018
and
$474.3 million
equivalent at
December 31, 2017
), designated as a net investment hedge.
|
(2)
|
The following table reconciles gross positions without the impact of master netting agreements to the balance sheet classification:
|
|
Other Current Assets
|
|
Other Current Liabilities
|
||||||||||||
(In millions)
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||
Gross position
|
$
|
7.9
|
|
|
$
|
4.1
|
|
|
$
|
(10.2
|
)
|
|
$
|
(5.7
|
)
|
Impact of master netting agreements
|
(0.4
|
)
|
|
(0.4
|
)
|
|
0.4
|
|
|
0.4
|
|
||||
Net amounts recognized on the Condensed Consolidated Balance Sheet
|
$
|
7.5
|
|
|
$
|
3.7
|
|
|
$
|
(9.8
|
)
|
|
$
|
(5.3
|
)
|
|
|
|
Amount of Gain (Loss) Recognized in
Earnings on Derivatives
|
||||||
|
Location of Gain (Loss) Recognized on
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
Condensed Consolidated Statements of Operations
|
|
2018
|
|
2017
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts
|
Cost of sales
|
|
$
|
(0.6
|
)
|
|
$
|
0.1
|
|
Treasury locks
|
Interest expense, net
|
|
—
|
|
|
0.1
|
|
||
Sub-total cash flow hedges
|
|
|
(0.6
|
)
|
|
0.2
|
|
||
Fair Value Hedges:
|
|
|
|
|
|
|
|
||
Interest rate swaps
|
Interest expense, net
|
|
0.1
|
|
|
0.1
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts
|
Other expense, net
|
|
(1.2
|
)
|
|
5.2
|
|
||
Total
|
|
|
$
|
(1.7
|
)
|
|
$
|
5.5
|
|
•
|
Level 1 Inputs:
Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
•
|
Level 2 Inputs:
Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
•
|
Level 3 Inputs:
Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
|
|
March 31, 2018
|
||||||||||||||
(In millions)
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents
|
|
$
|
101.6
|
|
|
$
|
101.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative financial and hedging instruments net liability:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts and options
|
|
$
|
(2.3
|
)
|
|
$
|
—
|
|
|
$
|
(2.3
|
)
|
|
$
|
—
|
|
|
|
December 31, 2017
|
||||||||||||||
(In millions)
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents
|
|
$
|
297.5
|
|
|
$
|
297.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative financial and hedging instruments net liability:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
(In millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Term Loan A Facility due July 2019
(1)
|
|
$
|
225.0
|
|
|
$
|
225.0
|
|
|
$
|
222.7
|
|
|
$
|
222.7
|
|
6.50% Senior Notes due December 2020
|
|
423.7
|
|
|
452.7
|
|
|
423.6
|
|
|
465.1
|
|
||||
4.875% Senior Notes due December 2022
|
|
420.6
|
|
|
431.8
|
|
|
420.4
|
|
|
451.0
|
|
||||
5.25% Senior Notes due April 2023
|
|
420.6
|
|
|
437.9
|
|
|
420.4
|
|
|
455.6
|
|
||||
4.50% Senior Notes due September 2023
(1)
|
|
488.7
|
|
|
549.4
|
|
|
474.3
|
|
|
544.4
|
|
||||
5.125% Senior Notes due December 2024
|
|
420.9
|
|
|
434.4
|
|
|
420.7
|
|
|
456.2
|
|
||||
5.50% Senior Notes due September 2025
|
|
396.7
|
|
|
417.9
|
|
|
396.7
|
|
|
439.9
|
|
||||
6.875% Senior Notes due July 2033
|
|
445.4
|
|
|
506.2
|
|
|
445.4
|
|
|
527.3
|
|
||||
Other foreign loans
(1)
|
|
162.3
|
|
|
161.3
|
|
|
30.2
|
|
|
30.4
|
|
||||
Other domestic loans
|
|
1.3
|
|
|
1.4
|
|
|
3.6
|
|
|
3.6
|
|
||||
Total debt
|
|
$
|
3,405.2
|
|
|
$
|
3,618.0
|
|
|
$
|
3,258.0
|
|
|
$
|
3,596.2
|
|
|
(1)
|
Includes borrowings denominated in currencies other than U.S. dollars.
|
|
|
Three Months Ended
March 31, 2018 |
|
Three Months Ended
March 31, 2017 |
||||||||||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||
Components of net periodic benefit (income) cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
Interest cost
|
|
1.6
|
|
|
3.9
|
|
|
5.5
|
|
|
1.8
|
|
|
4.0
|
|
|
5.8
|
|
||||||
Expected return on plan assets
|
|
(2.2
|
)
|
|
(7.4
|
)
|
|
(9.6
|
)
|
|
(2.5
|
)
|
|
(7.6
|
)
|
|
(10.1
|
)
|
||||||
Amortization of net actuarial loss
|
|
0.3
|
|
|
0.6
|
|
|
0.9
|
|
|
0.2
|
|
|
1.4
|
|
|
1.6
|
|
||||||
Net periodic benefit income
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|
(2.2
|
)
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(1.0
|
)
|
||||||
Cost of settlement/curtailment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||||
Total benefit income
|
|
$
|
(0.3
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Components of net periodic benefit cost:
|
|
|
|
|
||||
Interest cost
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
Amortization of net prior service cost
|
|
(0.1
|
)
|
|
(0.5
|
)
|
||
Net periodic benefit cost
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
||
(In millions)
|
|
March 31, 2017
|
||
Defined benefit pension plans
|
|
$
|
(0.2
|
)
|
Other employee benefit plans
|
|
—
|
|
|
Total income included in discontinued operations
|
|
$
|
(0.2
|
)
|
•
|
establishes a flat corporate income tax rate of 21.0% on U.S. earnings;
|
•
|
imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);
|
•
|
generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation;
|
•
|
imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, global intangible low-taxed income (GILTI);
|
•
|
subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);
|
•
|
eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales;
|
•
|
allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed;
|
•
|
reduces deductions with respect to certain compensation paid to specified executive officers; and
|
•
|
allows for installment payments to be paid over a period of eight years.
|
•
|
product warranties with respect to certain products sold to customers in the ordinary course of business. These warranties typically provide that products will conform to specifications. We accrue a warranty liability on a transaction-specific basis depending on the individual facts and circumstances related to each sale. Both the liability and annual expense related to product warranties are immaterial to our Condensed Consolidated Balance Sheet or Statement of Operations; and
|
•
|
licenses of intellectual property by us to third parties in which we have agreed to indemnify the licensee against third party infringement claims.
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Total share-based incentive compensation expense
(1)
|
|
$
|
7.6
|
|
|
$
|
8.1
|
|
|
(1)
|
The amounts included above do not include the expense related to our U.S. profit sharing contributions made in the form of our common stock or the expense or income related to certain cash-based awards, however, the amounts include the expense related to share based awards that are settled in cash.
|
|
|
TSR
|
|
Net Sales CAGR
|
|
Adjusted EBITDA
|
||||||
Number of units granted
|
|
56,829
|
|
|
57,378
|
|
|
57,378
|
|
|||
Fair value on grant date
|
|
$
|
43.40
|
|
|
$
|
41.72
|
|
|
$
|
41.72
|
|
|
TSR portion of the 2018 PSU Award
|
|
Expected price volatility
|
22.0
|
%
|
Risk-free interest rate
|
2.0
|
%
|
(In millions)
|
|
Unrecognized
Pension Items
|
|
Cumulative
Translation
Adjustment
|
|
Unrecognized Gains
(Losses) on
Derivative
Instruments
for net
investment
hedge
|
|
Unrecognized Gains
(Losses) on
Derivative
Instruments
for cash flow hedge
|
|
Accumulated Other
Comprehensive
Income
(Loss), Net of Taxes
|
||||||||||
Balance at December 31, 2016
|
|
$
|
(276.7
|
)
|
|
$
|
(701.9
|
)
|
|
$
|
21.0
|
|
|
$
|
8.5
|
|
|
$
|
(949.1
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
2.8
|
|
|
55.2
|
|
|
(4.9
|
)
|
|
(6.5
|
)
|
|
46.6
|
|
|||||
Less: amounts reclassified from accumulated other comprehensive income
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
3.5
|
|
|||||
Net current period other comprehensive income (loss)
|
|
4.5
|
|
|
55.2
|
|
|
(4.9
|
)
|
|
(4.7
|
)
|
|
50.1
|
|
|||||
Balance at March 31, 2017
(1)
|
|
$
|
(272.2
|
)
|
|
$
|
(646.7
|
)
|
|
$
|
16.1
|
|
|
$
|
3.8
|
|
|
$
|
(899.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2017
|
|
$
|
(103.4
|
)
|
|
$
|
(694.4
|
)
|
|
$
|
(46.8
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(844.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
—
|
|
|
28.4
|
|
|
(10.7
|
)
|
|
0.3
|
|
|
18.0
|
|
|||||
Less: amounts reclassified from accumulated other comprehensive income
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
1.1
|
|
|||||
Net current period other comprehensive income (loss)
|
|
0.6
|
|
|
28.4
|
|
|
(10.7
|
)
|
|
0.8
|
|
|
19.1
|
|
|||||
Balance at March 31, 2018
(1)
|
|
$
|
(102.8
|
)
|
|
$
|
(666.0
|
)
|
|
$
|
(57.5
|
)
|
|
$
|
0.5
|
|
|
$
|
(825.8
|
)
|
|
(1)
|
The ending balance in AOCI includes gains and losses on intra-entity foreign currency transactions. The intra-entity currency translation adjustment was
$(16.5) million
as of
March 31, 2018
and
$11.3 million
as of
March 31, 2017
.
|
|
|
Three Months Ended
March 31, |
|
|
||||||
(In millions)
|
|
2018
(1)
|
|
2017
(1)
|
|
Location of Amount
Reclassified from AOCI
|
||||
Defined benefit pension plans and other post-employment benefits:
|
|
|
|
|
|
|
|
|
||
Prior service costs
|
|
$
|
0.1
|
|
|
$
|
0.5
|
|
|
(2)
|
Actuarial losses
|
|
(0.9
|
)
|
|
(2.8
|
)
|
|
(2)
|
||
Total pre-tax amount
|
|
(0.8
|
)
|
|
(2.3
|
)
|
|
|
||
Tax benefit
|
|
0.2
|
|
|
0.6
|
|
|
|
||
Net of tax
|
|
(0.6
|
)
|
|
(1.7
|
)
|
|
|
||
Net gains (losses) on cash flow hedging derivatives:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
(0.6
|
)
|
|
0.6
|
|
|
(3)
Other expense, net
|
||
Interest rate and currency swaps
|
|
—
|
|
|
(3.8
|
)
|
|
(3)
|
||
Treasury locks
|
|
—
|
|
|
0.1
|
|
|
(3)
Interest expense, net
|
||
Total pre-tax amount
|
|
(0.6
|
)
|
|
(3.1
|
)
|
|
|
||
Tax benefit
|
|
0.1
|
|
|
1.3
|
|
|
|
||
Net of tax
|
|
(0.5
|
)
|
|
(1.8
|
)
|
|
|
||
Total reclassifications for the period
|
|
$
|
(1.1
|
)
|
|
$
|
(3.5
|
)
|
|
|
|
(1)
|
Amounts in parenthesis indicate changes to earnings (loss).
|
(2)
|
These accumulated other comprehensive components are included in the computation of net periodic benefit costs within cost of sales and selling, general, and administrative expenses on the Condensed Consolidated Statement of Operations.
|
(3)
|
These accumulated other comprehensive components are included in our derivative and hedging activities. See Note 12, “Derivatives and Hedging Activities,” of the Notes to Consolidated Financial Statements for additional details.
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Net foreign exchange transaction loss
|
|
$
|
(11.7
|
)
|
|
$
|
(4.0
|
)
|
Bank fee expense
|
|
(1.0
|
)
|
|
(1.8
|
)
|
||
Net gain on disposals of business and property and equipment
|
|
0.5
|
|
|
2.3
|
|
||
Pension income other than service costs
|
|
2.5
|
|
|
0.8
|
|
||
Other, net
|
|
(2.3
|
)
|
|
0.9
|
|
||
Other expense, net
|
|
$
|
(12.0
|
)
|
|
$
|
(1.8
|
)
|
|
|
Three Months Ended
March 31, |
||||||
(In millions, except per share amounts)
|
|
2018
|
|
2017
|
||||
Basic Net Loss Per Common Share:
|
|
|
|
|
||||
Numerator
|
|
|
|
|
||||
Net loss
|
|
$
|
(200.6
|
)
|
|
$
|
(43.2
|
)
|
Distributed and allocated undistributed net (loss) earnings to non-vested restricted stockholders
|
|
(0.2
|
)
|
|
0.1
|
|
||
Distributed and allocated undistributed net loss
|
|
(200.8
|
)
|
|
(43.1
|
)
|
||
Distributed net loss - dividends paid
|
|
(26.3
|
)
|
|
(31.0
|
)
|
||
Allocation of undistributed net loss to common stockholders
|
|
$
|
(227.1
|
)
|
|
$
|
(74.1
|
)
|
Denominator
|
|
|
|
|
||||
Weighted average number of common shares outstanding - basic
|
|
165.3
|
|
|
193.4
|
|
||
Basic net earnings per common share:
|
|
|
|
|
||||
Distributed net earnings
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
Allocated undistributed net loss to common stockholders
|
|
(1.37
|
)
|
|
(0.38
|
)
|
||
Basic net loss per common share
|
|
$
|
(1.21
|
)
|
|
$
|
(0.22
|
)
|
Diluted Net Loss Per Common Share:
|
|
|
|
|
||||
Numerator
|
|
|
|
|
||||
Distributed and allocated undistributed net loss
|
|
$
|
(200.8
|
)
|
|
$
|
(43.1
|
)
|
Add: Allocated undistributed net earnings to unvested restricted stockholders
|
|
—
|
|
|
—
|
|
||
Less: Undistributed net earnings reallocated to non-vested restricted stockholders
|
|
—
|
|
|
—
|
|
||
Net loss available to common stockholders - diluted
|
|
$
|
(200.8
|
)
|
|
$
|
(43.1
|
)
|
Denominator
|
|
|
|
|
||||
Weighted average number of common shares outstanding - basic
|
|
165.3
|
|
|
193.4
|
|
||
Effect of contingently issuable shares
|
|
—
|
|
|
0.8
|
|
||
Effect of unvested restricted stock units
|
|
—
|
|
|
0.9
|
|
||
Weighted average number of common shares outstanding - diluted under two-class
|
|
165.3
|
|
|
195.1
|
|
||
Effect of unvested restricted stock - participating security
|
|
—
|
|
|
0.6
|
|
||
Weighted average number of common shares outstanding - diluted under treasury stock
|
|
165.3
|
|
|
195.7
|
|
||
Diluted net loss per common share
|
|
$
|
(1.21
|
)
|
|
$
|
(0.22
|
)
|
|
|
Three Months Ended March 31,
|
|
%
|
|||||||
(In millions, except per share amounts)
|
|
2018
|
|
2017
|
|
Change
|
|||||
Net sales
|
|
$
|
1,131.0
|
|
|
$
|
1,032.2
|
|
|
9.6
|
%
|
Gross profit
|
|
$
|
374.0
|
|
|
$
|
335.4
|
|
|
11.5
|
%
|
As a % of net sales
|
|
33.1
|
%
|
|
32.5
|
%
|
|
|
|||
Operating profit
|
|
$
|
167.5
|
|
|
$
|
131.1
|
|
|
27.8
|
%
|
As a % of net sales
|
|
14.8
|
%
|
|
12.7
|
%
|
|
|
|||
Net loss from continuing operations
|
|
$
|
(208.0
|
)
|
|
$
|
(53.7
|
)
|
|
#
|
|
Gain on sale of discontinued operations, net of tax
|
|
7.4
|
|
|
—
|
|
|
#
|
|
||
Net earnings from discontinued operations, net of tax
|
|
—
|
|
|
10.5
|
|
|
#
|
|
||
Net loss
|
|
$
|
(200.6
|
)
|
|
$
|
(43.2
|
)
|
|
#
|
|
Basic:
|
|
|
|
|
|
|
|||||
Continuing operations
|
|
$
|
(1.25
|
)
|
|
$
|
(0.27
|
)
|
|
#
|
|
Discontinued operations
|
|
0.04
|
|
|
0.05
|
|
|
(20.0
|
)%
|
||
Net loss per common share-basic
|
|
$
|
(1.21
|
)
|
|
$
|
(0.22
|
)
|
|
#
|
|
Diluted:
|
|
|
|
|
|
|
|||||
Continuing operations
|
|
$
|
(1.25
|
)
|
|
$
|
(0.27
|
)
|
|
#
|
|
Discontinued operations
|
|
0.04
|
|
|
0.05
|
|
|
(20.0
|
)%
|
||
Net loss per common share-diluted
|
|
$
|
(1.21
|
)
|
|
$
|
(0.22
|
)
|
|
#
|
|
Weighted average numbers of common shares outstanding:
|
|
|
|
|
|
|
|||||
Basic
|
|
165.3
|
|
|
193.4
|
|
|
|
|
||
Diluted
|
|
165.3
|
|
|
195.7
|
|
|
|
|
||
Non-U.S. GAAP Adjusted EBITDA from continuing operations
(1)
|
|
$
|
204.8
|
|
|
$
|
181.9
|
|
|
12.6
|
%
|
Non-U.S. GAAP Adjusted EPS from continuing operations
(2)
|
|
$
|
0.51
|
|
|
$
|
0.43
|
|
|
18.6
|
%
|
|
#
|
Denotes a variance greater than or equal to 100%, or not meaningful.
|
(1)
|
See Note 5, “Segments,” of the Notes to Condensed Consolidated Financial Statements for a reconciliation of net loss from continuing operations to Non-U.S. GAAP Adjusted EBITDA from continuing operations.
|
(2)
|
See “Diluted Net Earnings per Common Share” for a reconciliation of our EPS from continuing operations to our non-U.S. GAAP adjusted EPS from continuing operations.
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||
(In millions, except per share data)
|
|
Net
Earnings |
|
Diluted EPS
|
|
Net
Earnings |
|
Diluted EPS
|
||||||||
U.S. GAAP net loss and diluted EPS from continuing operations
(1)
|
|
$
|
(208.0
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(53.7
|
)
|
|
$
|
(0.27
|
)
|
Special Items
(2)
|
|
293.4
|
|
|
1.76
|
|
|
138.5
|
|
|
0.70
|
|
||||
Non-U.S. GAAP adjusted net earnings and adjusted diluted EPS from continuing operations
|
|
$
|
85.4
|
|
|
$
|
0.51
|
|
|
$
|
84.8
|
|
|
$
|
0.43
|
|
Weighted average number of common shares outstanding - Diluted
|
|
|
|
|
165.3
|
|
|
|
|
|
195.7
|
|
|
(1)
|
Net earnings per common share are calculated under the two-class method.
|
(2)
|
Special items include the following:
|
|
|
Three Months Ended March 31,
|
||||||
(In millions, except per share data)
|
|
2018
|
|
2017
|
||||
Special Items:
|
|
|
|
|
||||
Restructuring and other charges
|
|
$
|
(8.6
|
)
|
|
$
|
(1.9
|
)
|
Other restructuring associated costs
|
|
(2.2
|
)
|
|
(3.9
|
)
|
||
(Loss) gain on acquisition and divestiture activity
|
|
(4.0
|
)
|
|
2.3
|
|
||
Charges incurred due to the sale of Diversey
|
|
(6.8
|
)
|
|
(16.1
|
)
|
||
Gain from class-action litigation settlement
|
|
12.7
|
|
|
—
|
|
||
Other Special Items
(1)
|
|
(0.2
|
)
|
|
4.2
|
|
||
Pre-tax impact of Special Items
|
|
$
|
(9.1
|
)
|
|
$
|
(15.4
|
)
|
Tax impact of Special Items and Tax Special Items
(2)
|
|
(284.3
|
)
|
|
(123.1
|
)
|
||
Net impact of Special Items
|
|
$
|
(293.4
|
)
|
|
$
|
(138.5
|
)
|
Weighted average number of common shares outstanding - Diluted
|
|
165.3
|
|
|
195.7
|
|
||
Loss per share impact from Special Items
|
|
$
|
(1.76
|
)
|
|
$
|
(0.70
|
)
|
|
(1)
|
Other Special Items for the three months ended March 31, 2017 primarily included a recovered wage tax as the result of a court ruling partially offset by legal fees associated with restructuring and acquisitions.
|
(2)
|
Refer to Note 1 to the table below for a description of Special Items related to tax.
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
U.S. GAAP Earnings before income tax provision from continuing operations
|
|
$
|
113.5
|
|
|
$
|
82.7
|
|
Pre-tax impact of Special Items
|
|
(9.1
|
)
|
|
(15.4
|
)
|
||
Non-U.S. GAAP Adjusted Earnings before income tax provision from continuing operations
|
|
$
|
122.6
|
|
|
$
|
98.1
|
|
|
|
|
|
|
||||
U.S. GAAP Income tax provision from continuing operations
|
|
$
|
321.5
|
|
|
$
|
136.4
|
|
Tax Special Items
(1)
|
|
(287.2
|
)
|
|
(128.3
|
)
|
||
Tax impact of Special Items
|
|
2.9
|
|
|
5.2
|
|
||
Non-U.S. GAAP Adjusted Income tax provision from continuing operations
|
|
$
|
37.2
|
|
|
$
|
13.3
|
|
|
|
|
|
|
||||
U.S. GAAP Effective income tax rate
|
|
283.3
|
%
|
|
164.9
|
%
|
||
Non-U.S. GAAP Adjusted income tax rate
|
|
30.3
|
%
|
|
13.6
|
%
|
|
(1)
|
For the three months ended March 31, 2018, the Tax Special Items included $290 million of provisional tax expense for one-time tax on unrepatriated foreign earnings pursuant to the TCJA. For the
three
months ended
March 31, 2017
, the special tax items included $127 million of tax expense recorded in accordance with the sale of Diversey. Refer to Note 15, “Income Taxes,” of the Notes to Condensed Consolidated Financial Statements for additional information.
|
(In millions)
|
|
Three Months Ended March 31, 2018
|
||
Net sales
|
|
$
|
35.7
|
|
Cost of sales
|
|
(24.6
|
)
|
|
Selling, general and administrative expenses
|
|
(6.0
|
)
|
|
Net earnings
|
|
3.2
|
|
|
Adjusted EBITDA
|
|
5.8
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||||||
(In millions)
|
|
North America
|
|
EMEA
|
|
Latin America
|
|
APAC
|
|
Total
|
|||||||||||||||||||||||||
2017 Net Sales
|
|
$
|
563.6
|
|
|
54.6
|
%
|
|
$
|
220.5
|
|
|
21.4
|
%
|
|
$
|
96.7
|
|
|
9.4
|
%
|
|
$
|
151.4
|
|
|
14.7
|
%
|
|
$
|
1,032.2
|
|
|
|
|
Volume-Units
|
|
13.2
|
|
|
2.3
|
%
|
|
5.5
|
|
|
2.5
|
%
|
|
6.6
|
|
|
6.8
|
%
|
|
(1.1
|
)
|
|
(0.7
|
)%
|
|
24.2
|
|
|
2.3
|
%
|
|||||
Price/mix
(1)
|
|
15.6
|
|
|
2.8
|
%
|
|
2.5
|
|
|
1.1
|
%
|
|
0.6
|
|
|
0.6
|
%
|
|
(1.0
|
)
|
|
(0.7
|
)%
|
|
17.7
|
|
|
1.7
|
%
|
|||||
Acquisition
|
|
1.7
|
|
|
0.3
|
%
|
|
—
|
|
|
—
|
%
|
|
0.4
|
|
|
0.4
|
%
|
|
19.1
|
|
|
12.6
|
%
|
|
21.2
|
|
|
2.1
|
%
|
|||||
Total constant dollar change (Non-U.S. GAAP)
|
|
30.5
|
|
|
5.4
|
%
|
|
8.0
|
|
|
3.6
|
%
|
|
7.6
|
|
|
7.8
|
%
|
|
17.0
|
|
|
11.2
|
%
|
|
63.1
|
|
|
6.1
|
%
|
|||||
Foreign currency translation
|
|
1.5
|
|
|
0.3
|
%
|
|
29.2
|
|
|
13.2
|
%
|
|
(1.3
|
)
|
|
(1.3
|
)%
|
|
6.3
|
|
|
4.2
|
%
|
|
35.7
|
|
|
3.5
|
%
|
|||||
Total change (U.S. GAAP)
|
|
32.0
|
|
|
5.7
|
%
|
|
37.2
|
|
|
16.8
|
%
|
|
6.3
|
|
|
6.5
|
%
|
|
23.3
|
|
|
15.4
|
%
|
|
98.8
|
|
|
9.6
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2018 Net Sales
|
|
$
|
595.6
|
|
|
52.7
|
%
|
|
$
|
257.7
|
|
|
22.8
|
%
|
|
$
|
103.0
|
|
|
9.1
|
%
|
|
$
|
174.7
|
|
|
15.4
|
%
|
|
$
|
1,131.0
|
|
|
|
|
(1)
|
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. The impact to our reported price/mix of these purchases in other countries at selling prices denominated in U.S. dollars or euros was not material in the periods included in the table above.
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||
(In millions)
|
|
Food Care
|
|
Product Care
|
|
Total Company
|
|||||||||||||||
2017 Net Sales
|
|
$
|
655.6
|
|
|
63.5
|
%
|
|
$
|
376.6
|
|
|
36.5
|
%
|
|
$
|
1,032.2
|
|
|
|
|
Volume - Units
|
|
12.9
|
|
|
2.0
|
%
|
|
11.3
|
|
|
3.0
|
%
|
|
24.2
|
|
|
2.3
|
%
|
|||
Price/mix
(1)
|
|
7.5
|
|
|
1.1
|
%
|
|
10.2
|
|
|
2.7
|
%
|
|
17.7
|
|
|
1.7
|
%
|
|||
Acquisition
|
|
—
|
|
|
—
|
%
|
|
21.2
|
|
|
5.6
|
%
|
|
21.2
|
|
|
2.1
|
%
|
|||
Total constant dollar change (Non-U.S. GAAP)
|
|
20.4
|
|
|
3.1
|
%
|
|
42.7
|
|
|
11.3
|
%
|
|
63.1
|
|
|
6.1
|
%
|
|||
Foreign currency translation
|
|
20.3
|
|
|
3.2
|
%
|
|
15.4
|
|
|
4.1
|
%
|
|
35.7
|
|
|
3.5
|
%
|
|||
Total change (U.S. GAAP)
|
|
40.7
|
|
|
6.3
|
%
|
|
58.1
|
|
|
15.4
|
%
|
|
98.8
|
|
|
9.6
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2018 Net Sales
|
|
$
|
696.3
|
|
|
61.6
|
%
|
|
$
|
434.7
|
|
|
38.4
|
%
|
|
$
|
1,131.0
|
|
|
|
|
(1)
|
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. The impact to our reported price/mix of these purchases in other countries at selling prices denominated in U.S. dollars or euros was not material in the periods included in the table above.
|
•
|
higher unit volumes of $15 million, primarily reflecting an increase in North America on strong demand of protein packaging and an increase in Latin America including an acquisition; and
|
•
|
favorable price/mix of $7 million.
|
•
|
lower unit volumes of $2 million in APAC which was negatively impacted by further deterioration in the dairy market.
|
•
|
$21 million related to an increase in sales due to the acquisition of Fagerdala;
|
•
|
higher unit volumes of $11 million, primarily in North America due to ongoing strength in the e-Commerce and third-party logistics markets; and
|
•
|
favorable price/mix of $10 million.
|
|
Three Months Ended March 31,
|
|
%
|
|||||||
(In millions)
|
2018
|
|
2017
|
|
Change
|
|||||
Net sales
|
$
|
1,131.0
|
|
|
$
|
1,032.2
|
|
|
9.6
|
%
|
Cost of sales
|
757.0
|
|
|
696.8
|
|
|
8.6
|
%
|
||
As a % of net sales
|
66.9
|
%
|
|
67.5
|
%
|
|
|
|
|
Three Months Ended March 31,
|
|
%
|
|||||||
(In millions)
|
|
2018
|
|
2017
|
|
Change
|
|||||
Selling, general and administrative expenses
|
|
$
|
194.0
|
|
|
$
|
197.4
|
|
|
(1.7
|
)%
|
As a % of net sales
|
|
17.2
|
%
|
|
19.1
|
%
|
|
|
|
|
Three Months Ended March 31,
|
|
%
|
|||||||
(In millions)
|
|
2018
|
|
2017
|
|
Change
|
|||||
Amortization expense of intangible assets acquired
|
|
$
|
3.9
|
|
|
$
|
5.0
|
|
|
(22.0
|
)%
|
As a % of net sales
|
|
0.3
|
%
|
|
0.5
|
%
|
|
|
|
|
Three months ended March 31,
|
|
2018 vs. 2017
|
||||||||
(In millions)
|
|
2018
|
|
2017
|
|
Change
|
||||||
Interest expense on our various debt instruments:
|
|
|
|
|
|
|
||||||
Term Loan A due July 2017
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
(1.5
|
)
|
Term Loan A due July 2019 (October 2016 prior to refinance)
|
|
2.3
|
|
|
5.2
|
|
|
(2.9
|
)
|
|||
Revolving credit facility due July 2019 (October 2016 prior to refinance)
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|||
6.50% Senior Notes due December 2020
|
|
7.0
|
|
|
6.9
|
|
|
0.1
|
|
|||
4.875% Senior Notes due December 2022
|
|
5.4
|
|
|
5.4
|
|
|
—
|
|
|||
5.25% Senior Notes due April 2023
|
|
5.8
|
|
|
5.8
|
|
|
—
|
|
|||
4.50% Senior Notes due September 2023
|
|
5.7
|
|
|
4.9
|
|
|
0.8
|
|
|||
5.125% Senior Notes due December 2024
|
|
5.6
|
|
|
5.6
|
|
|
—
|
|
|||
5.50% Senior Notes due September 2025
|
|
5.6
|
|
|
5.6
|
|
|
—
|
|
|||
6.875% Senior Notes due July 2033
|
|
7.8
|
|
|
7.8
|
|
|
—
|
|
|||
Other interest expense
|
|
4.1
|
|
|
2.5
|
|
|
1.6
|
|
|||
Less: capitalized interest
|
|
(2.2
|
)
|
|
(3.0
|
)
|
|
0.8
|
|
|||
Less: interest income
|
|
(5.7
|
)
|
|
(2.2
|
)
|
|
(3.5
|
)
|
|||
Total
|
|
$
|
42.0
|
|
|
$
|
46.6
|
|
|
$
|
(4.6
|
)
|
•
|
The actual mix of earnings by jurisdiction could fluctuate from the Company’s projection.
|
•
|
The tax effects of other discrete items, including accruals related to tax contingencies, the resolution of worldwide tax matters, tax audit settlements, statute of limitations expirations and changes in tax regulations, which are reflected in the period in which they occur.
|
•
|
Any future legislative changes or potential tax reform, the impact of future regulations and guidance implementing the TCJA and any related additional tax planning efforts to address these changes.
|
|
|
Three Months Ended March 31,
|
|
%
|
|||||||
(In millions)
|
|
2018
|
|
2017
|
|
Change
|
|||||
Net loss from continuing operations
|
|
$
|
(208.0
|
)
|
|
$
|
(53.7
|
)
|
|
287.3
|
%
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Earnings from discontinued operations before income tax provision (benefit)
|
|
$
|
—
|
|
|
$
|
31.7
|
|
Income tax provision (benefit) from discontinued operations
|
|
—
|
|
|
21.2
|
|
||
Net earnings from discontinued operations
|
|
$
|
—
|
|
|
$
|
10.5
|
|
|
|
Three Months Ended
March 31, |
|
%
|
|||||||
(In millions)
|
|
2018
|
|
2017
|
|
Change
|
|||||
Food Care
|
|
$
|
134.7
|
|
|
$
|
122.0
|
|
|
10.4
|
%
|
Adjusted EBITDA Margin
|
|
19.3
|
%
|
|
18.6
|
%
|
|
|
|
||
Product Care
|
|
78.4
|
|
|
63.3
|
|
|
23.9
|
%
|
||
Adjusted EBITDA Margin
|
|
18.0
|
%
|
|
16.8
|
%
|
|
|
|
||
Corporate
|
|
(8.3
|
)
|
|
(3.4
|
)
|
|
144.1
|
%
|
||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
204.8
|
|
|
$
|
181.9
|
|
|
12.6
|
%
|
Adjusted EBITDA Margin
|
|
18.1
|
%
|
|
17.6
|
%
|
|
|
|
•
|
restructuring savings of $7 million; and
|
•
|
positive volume trends of $4 million primarily reflecting improving protein trends and adoption of our advanced product portfolio.
|
•
|
an increase in raw material and freight costs of $3 million.
|
•
|
positive volume trends of $5 million;
|
•
|
favorable costs of $5 million primarily driven by cost control actions and income from the acquisition of Fagerdala; and
|
•
|
restructuring savings of $3 million.
|
•
|
unfavorable mix and price/cost spread of $1 million.
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Net loss from continuing operations
|
|
$
|
(208.0
|
)
|
|
$
|
(53.7
|
)
|
Interest expense, net
|
|
(42.0)
|
|
|
(46.6)
|
|
||
Income tax provision
|
|
321.5
|
|
|
136.4
|
|
||
Depreciation and amortization
(2)
|
|
(40.4)
|
|
|
(37.2)
|
|
||
Depreciation and amortization adjustments
|
|
0.2
|
|
|
—
|
|
||
Special Items:
|
|
|
|
|
||||
Restructuring and other charges
(3)
|
|
(8.6
|
)
|
|
(1.9
|
)
|
||
Other restructuring associated costs
|
|
(2.2
|
)
|
|
(3.9
|
)
|
||
(Loss) gain on acquisition and divestiture activity
|
|
(4.0
|
)
|
|
2.3
|
|
||
Charges incurred due to the sale of Diversey
|
|
(6.8
|
)
|
|
(16.1
|
)
|
||
Gain from class-action litigation settlement
|
|
12.7
|
|
|
—
|
|
||
Other Special Items
(1)
|
|
(0.2
|
)
|
|
4.2
|
|
||
Pre-tax impact of Special Items
|
|
(9.1)
|
|
|
(15.4)
|
|
||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
204.8
|
|
|
$
|
181.9
|
|
|
(1)
|
Other Special Items for the three months ended March 31, 2017 primarily included a recovered wage tax as the result of a court ruling partially offset by legal fees associated with restructuring and acquisitions.
|
(2)
|
Depreciation and amortization by segment is as follows:
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Food Care
|
|
$
|
26.9
|
|
|
$
|
24.7
|
|
Product Care
|
|
13.5
|
|
|
12.5
|
|
||
Total Company depreciation and amortization
(i)
|
|
$
|
40.4
|
|
|
$
|
37.2
|
|
|
(i)
|
Includes share-based incentive compensation of
$8 million
for the
three
months ended
March 31, 2018
and
2017
.
|
(3)
|
Restructuring and other charges by segment were as follows:
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Food Care
|
|
$
|
4.6
|
|
|
$
|
1.2
|
|
Product Care
|
|
4.0
|
|
|
0.7
|
|
||
Total Company restructuring and other charges
|
|
$
|
8.6
|
|
|
$
|
1.9
|
|
|
|
|
|
|
||||
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
|
$
|
326.9
|
|
|
$
|
594.0
|
|
|
|
Moody’s Investor
Services
|
|
Standard
& Poor’s
|
Corporate Rating
|
|
Ba2
|
|
BB+
|
Senior Unsecured Rating
|
|
Ba3
|
|
BB+
|
Senior Secured Credit Facility Rating
|
|
Baa3
|
|
BBB-
|
Outlook
|
|
Stable
|
|
Stable
|
|
|
|
|
|
||||
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Short-term borrowings
|
|
$
|
155.7
|
|
|
$
|
25.3
|
|
Current portion of long-term debt
|
|
1.6
|
|
|
2.2
|
|
||
Total current debt
|
|
157.3
|
|
|
27.5
|
|
||
Total long-term debt, less current portion
(1)
|
|
3,247.9
|
|
|
3,230.5
|
|
||
Total debt
|
|
3,405.2
|
|
|
3,258.0
|
|
||
Less: Cash and cash equivalents
|
|
(326.9
|
)
|
|
(594.0
|
)
|
||
Net Debt
|
|
$
|
3,078.3
|
|
|
$
|
2,664.0
|
|
|
(1)
|
Amounts are net of unamortized discounts and debt issuance costs of
$28 million
as
March 31, 2018
and
$30 million
as of
December 31, 2017
.
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Net cash (used in) provided by operating activities
|
|
$
|
(33.7
|
)
|
|
$
|
17.2
|
|
Net cash used in investing activities
|
|
(36.0
|
)
|
|
(55.3
|
)
|
||
Net cash used in financing activities
|
|
(216.2
|
)
|
|
(44.5
|
)
|
||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
|
18.8
|
|
|
8.5
|
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
(In millions)
|
|
2018
|
|
2017
|
|
Change
|
||||||
Cash flow (used in) provided by operating activities
|
|
$
|
(33.7
|
)
|
|
$
|
17.2
|
|
|
$
|
(50.9
|
)
|
Capital expenditures
|
|
(43.4
|
)
|
|
(50.4
|
)
|
|
7.0
|
|
|||
Free cash flow
(1)
|
|
$
|
(77.1
|
)
|
|
$
|
(33.2
|
)
|
|
$
|
(43.9
|
)
|
|
(1)
|
Free cash flow was $(63) million in 2018 excluding the payment of charges related to the sale of Diversey and efforts to address related stranded costs of $14 million and $(31) million in 2017 excluding the payment of charges related to the sale of Diversey of $2 million.
|
•
|
$201 million
of net loss, which included an increase of
$81 million
of non-cash adjustments to reconcile net earnings to net cash provided by operating activities, primarily attributable to an increase in deferred taxes of $57 million, depreciation and amortization, share-based incentive compensation expenses and profit sharing expenses.
|
•
|
$40 million of changes in operating assets and liabilities, as a result of an increase in inventory partially offset by increases in accounts payable and a decrease in net trade receivables. This activity reflects the timing of inventory purchases and an increase in inventory stock due to an increase in sales year over year.
|
•
|
$125 million
of changes in other liabilities and assets. This activity primarily reflects an increase of provisional tax expense for one-time tax on unrepatriated foreign earnings pursuant to the TCJA as well as a one-time payment in lieu of certain future royalty payments.
|
•
|
$185 million
of non-cash adjustments to reconcile net earnings to net cash provided by operating activities, including adjustments for deferred taxes, depreciation and amortization, share-based incentive compensation expenses and profit sharing expenses.
|
•
|
$113 million
of changes in other liabilities and assets. This activity primarily reflects the timing of certain annual incentive compensation payments and payments of rebates;
|
•
|
$43 million
of net losses; and
|
•
|
$12 million
of changes in operating assets and liabilities, primarily reflecting an increase in trade receivables and inventory partially offset by an increase in accounts payable. This activity reflects the utilization of financing agreements to extend external payment terms, timing of inventory purchases and the related payments of cash along with the seasonality of sales and collections.
|
•
|
capital expenditures of $43 million.
|
•
|
$9 million related to proceeds from the sale of businesses and working capital adjustments for acquisitions.
|
•
|
capital expenditures of
$50 million
; and
|
•
|
$7 million
related to settlements of foreign currency forward contracts.
|
•
|
$2 million
related to net proceeds in the sale of business and property and equipment.
|
•
|
repurchases of common stock of
$312 million
;
|
•
|
payments of quarterly dividends of
$28 million
; and
|
•
|
acquisition of common stock for tax withholding obligations relating to stock-based compensation of
$6 million
.
|
•
|
an increase in borrowings of $130 million primarily due to an increase in borrowings under our accounts receivable securitization programs.
|
•
|
payments of quarterly dividends of
$31 million
;
|
•
|
acquisition of common stock for tax withholding obligations relating to stock-based compensation of
$22 million
;
|
•
|
payments of Term Loan A of $14 million; and
|
•
|
payments made for the settlement of cross currency swaps of $2 million.
|
•
|
increases in short-term borrowings under our revolving credit facility, local lines of credit and accounts receivable securitization programs of $24 million.
|
(In millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
|
Change
|
||||||
Working capital (current assets less current liabilities)
|
|
$
|
242.4
|
|
|
$
|
488.2
|
|
|
$
|
(245.8
|
)
|
Current ratio (current assets divided by current liabilities)
|
|
1.2x
|
|
|
1.4x
|
|
|
|
||||
Quick ratio (current assets, less inventories divided by current liabilities)
|
|
0.8x
|
|
|
1.0x
|
|
|
|
•
|
a decrease in cash and cash equivalents of
$267 million
related primarily to the repurchase of common shares; and
|
•
|
an increase in short term borrowings primarily due to an increase in borrowings under our accounts receivables securitization programs.
|
•
|
an increase in prepaid expenses and other current assets due to a payment in lieu of certain future royalty payments.
|
•
|
a net increase in shares held in treasury of
$405 million
and decrease in additional paid-in capital of
$80 million
due to the repurchase of common stock;
|
•
|
a net loss of
$201 million
;
|
•
|
dividends paid and accrued on our common stock of
$27 million
; and
|
•
|
unrealized losses on derivative instruments of
$10 million
.
|
•
|
cumulative translation adjustment of
$28 million
; and
|
•
|
stock-based incentive compensation of
$21 million
.
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of
Shares Purchased as
Part of Announced Plans or Programs
|
|
Maximum Approximate Dollar
Value of Shares that May
Yet be Purchased Under the Plans or Programs
(2)
|
||||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
||||||
Balance at December 31, 2017
|
|
|
|
|
|
|
|
$
|
947,060,470
|
|
||||
January 1, 2018 through January 31, 2018
|
|
1,186
|
|
|
—
|
|
|
—
|
|
|
947,060,470
|
|
||
February 1, 2018 through February 28, 2018
|
|
4,330,849
|
|
|
$
|
44.62
|
|
|
4,181,362
|
|
|
741,566,967
|
|
|
March 1, 2018 through March 31, 2018
|
|
4,624,699
|
|
|
$
|
43.16
|
|
|
4,613,592
|
|
|
542,545,036
|
|
|
Total
|
|
8,956,734
|
|
|
|
|
8,794,954
|
|
|
$
|
542,545,036
|
|
|
(1)
|
We acquired shares by means of (i) a share trading plan we entered into with our brokers and pursuant to our publicly announced program (described below), (ii) accelerated share repurchase programs we entered into or terminated during the quarter, (iii) shares withheld from awards under our Omnibus Incentive Plan (the successor plan to our 2005 Contingent Stock Plan) pursuant to the provision thereof that permits minimum tax withholding obligations or other legally required charges to be satisfied by having us withhold shares from an award under that plan and (iv) shares reacquired pursuant to the forfeiture provision of our Omnibus Incentive Plan. We report price calculations in column (b) in the table above only for shares purchased as part of our publicly announced program, when applicable. For shares withheld for minimum tax withholding obligations or other legally required charges, we withhold shares at a price equal to their fair market value. We do not make payments for shares reacquired by the Company pursuant to the forfeiture provision of the Omnibus Incentive Plan as those shares are simply forfeited.
|
(2)
|
The Maximum Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs is exclusive of the May 2018 $1.0 billion authorization which is discussed below.
|
Period
|
|
Shares withheld
for tax obligations and charges
|
|
Average withholding
price for shares in column “a”
|
|
Forfeitures under
Omnibus Incentive Plan
|
|
Total
|
|||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|||||
January 2018
|
|
—
|
|
|
—
|
|
|
1,186
|
|
|
1,186
|
|
|
February 2018
|
|
144,503
|
|
|
$
|
41.7
|
|
|
4,984
|
|
|
149,487
|
|
March 2018
|
|
5,910
|
|
|
$
|
44.3
|
|
|
5,197
|
|
|
11,107
|
|
Total
|
|
150,413
|
|
|
|
|
11,367
|
|
|
161,780
|
|
Exhibit
Number
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
10.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Sealed Air Corporation
|
||
|
|
|
|
Date: May 7, 2018
|
By:
|
|
/s/ William G. Stiehl
|
|
|
|
William G. Stiehl
|
|
|
|
Acting Chief Financial Officer,
Chief Accounting Officer and Controller
|
1 Year Sealed Air Chart |
1 Month Sealed Air Chart |
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