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| 8-K - FORM 8-K - SEALED AIR CORP/DE | d435267d8k.htm |
 Public Lender Presentation
November 5, 2012
Carol Lowe, SVP & CFO
Tod Christie, Treasurer
Exhibit 99.1 |
 SAFE
HARBOR AND REGULATION G STATEMENT 1
This
presentation
contains
“forward-looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation Reform Act of 1995. Forward-looking statements can be identified by
such words as “anticipates,”
“believes,”
“plan,”
“assumes,”
“could,”
“estimates,”
“expects,”
“intends,”
“may,”
“plans to,”
“will”
and similar expressions. Examples of these forward-looking statements include
2012 financial expectations and assumptions associated with our
2011-2014 Integration & Optimization Program, availability
and
pricing
of
raw
materials,
success
of
our
growth
programs,
economic
conditions,
and
the
success
of
pricing
actions.
These
statements
reflect
our
beliefs
and
expectations
as
to
future
events
and trends affecting our business, our consolidated financial position and our
results of operations. A variety
of
factors
may
cause
actual
results
to
differ
materially
from
these
expectations,
including
general
domestic and international economic and political conditions affecting packaging
utilization; changes in our raw material and energy costs; credit ratings;
competitive conditions and contract terms; currency translation and
devaluation effects, including Venezuela; the success of our financial growth,
profitability and manufacturing strategies and our cost reduction and productivity
efforts; the effects of animal and food-related health issues;
pandemics; environmental matters; regulatory actions and legal matters; and
the successful integration of Diversey. For more extensive information, see “Risk Factors”
and
“Cautionary
Notice
Regarding
Forward-Looking
Statements,”
which
appear
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. While we may elect to update
these forward-looking statements at some point in the future, we specifically disclaim
any
obligation
to
do
so,
whether
as
a
result
of
new
information,
future
events,
or
otherwise.
Our management uses non-U.S. GAAP financial measures to evaluate the
Company’s performance, which exclude items we consider unusual or
special items. We believe the use of such financial measures and
information may be useful to investors. We believe that the use of non-U.S. GAAP
measures helps investors to gain a better understanding of core operating results
and future prospects, consistent with how management measures and forecasts
the Company's performance, especially when comparing such results to
previous periods or forecasts. For important information on our use of
non-U.S. GAAP financial measures and information, including reconciliations of
such non-U.S. GAAP financial measures and information to comparable
U.S. GAAP measures and information, please refer to the financial tables
and information set forth at the end of this presentation for additional information. |
 $250
$301
$303
$253
$240
$242
$295
PF
Q1/11
PF
Q2/11
PF
Q3/11
Q4/11
Q1/12
Q2/12
Q3/12
REVENUE AND EBITDA OVERVIEW
Net Sales (Pro Forma
(1)
& Reported)
Credit Agreement EBITDA
14
$1,892
$2,089
$2,072
$2,053
$1,918
$2,004
$1,979
PF
Q1/11
PF
Q2/11
PF
Q3/11
Q4/11
Q1/12
Q2/12
Q3/12
13.2%
14.4%
14.6%
12.3%
12.5%
12.1%
14.9%
% of
Net Sales
LTM
Credit
Agreement
EBITDA:
$1,030mm
(2)
LTM Net Sales: $7,954mm
(2)
Note:
Please refer to the financial tables and information set forth at the end of this
presentation for additional information, including
the
use
of
non-U.S.
GAAP
financial
measures,
such
as
constant
dollar
sales,
pro
forma
sales,
adjusted
operating
profit, adjusted EBITDA, free cash flow and adjusted EPS.
(1)
Pro forma for Diversey acquisition. Credit Agreement EBITDA for those quarters
defined by Credit Agreement. (2)
LTM Net Sales and Credit Agreement EBITDA include Diversey Japan.
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1) |
 DIVERSEY JAPAN DIVESTITURE
•
On October 30, 2012, we announced the divestiture of Diversey Japan for
~$377 million (~$300 million of net proceeds)
–
Diversey Japan had trailing twelve months sales as of September 30, 2012, of
$321 million and normalized trailing twelve months adjusted EBITDA of
approximately $40 million
–
Divestiture enables us to focus on higher growth countries in which our portfolio
offers the greatest potential, and
–
Allows us to continue to offer leading solutions and service levels, while
accelerating debt reduction and generating value for our stockholders
•
Consistent with the announcement earlier this year that we reviewed our
complete product portfolio to ensure that we are investing in areas that are
strategic to our core focus
–
The overall portfolio rationalization could generate up to $500 million by 3Q
2013 16
Note:
Please refer to the financial tables and information set forth at the end of this
presentation for additional information,
including
the
use
of
non-U.S.
GAAP
financial
measures,
such
as
constant
dollar
sales,
pro
forma
sales, adjusted operating profit, adjusted EBITDA, free cash flow and adjusted
EPS. |
 FY2012
OUTLOOK UPDATED FOR DISCONTINUED OPERATIONS The revised outlook excludes
Diversey Japan 1845
~2,030
YTD
4Q-12e
YTD
4Q-12e
Free Cash Flow FY12 Guidance: $375-$400MM
(Previously $425-$450MM)
~235-260
Net Sales: Approx. $7.7B, incl. $(300)MM F/X
(Previously $7.7B, incl. $(400)MM F/X)
1Q: 1,845
2Q: 1,925
3Q: 1,900
1Q: 17
2Q: 94
3Q: 28
$139 MM
23
YTD
Credit Agreement EBITDA
$776MM
1Q: 240
2Q: 242
3Q: 295
$5,670MM
YTD
4Q-12e
265-280
Adjusted EBITDA:
$995-$1,010MM, incl $(30)MM F/X
(Previously $1,050-$1,075MM, incl $(40)MM F/X)
$729MM
1Q: 228
2Q: 229
3Q: 272
Note:
Please refer to the financial tables and information set forth at the end of this
presentation for additional information,
including
the
use
of
non-U.S.
GAAP
financial
measures,
such
as
constant
dollar
sales,
pro
forma
sales, adjusted operating profit, adjusted EBITDA, free cash flow and adjusted
EPS. |
 GRACE
PROCEEDINGS SUMMARY UPDATE •
W. R. Grace facing several appeals
in the Third Circuit Court of Appeals
•
Although Grace publicly stated it would seek waivers from several parties to
allow Grace to emerge from bankruptcy with these appeals outstanding,
Grace subsequently indicated that it was unable to receive all necessary
waivers
•
Sealed Air is prepared to make its settlement payment once all funding
conditions are met but has not waived any condition, including that Grace's
plan not be subject to appeal
•
We continue to monitor the bankruptcy process
•
Estimated cash liability of $877 million as of December 31, 2012
-
partially
offset by related tax benefits
24 |
 29
Appendix |
 Non-U.S. GAAP Free Cash Flow
(1)(2)
(Unaudited)
(In millions)
(1): Our 2011 adjusted EBITDA calculation has been revised to conform to our 2012 presentation. In the
first quarter of 2012, we revised our calculation of adjusted EBITDA to exclude our
share-based incentive compensation expense related to our U.S. profit sharing plan. At its
discretion and with the approval of the Organization and Compensation Committee of our Board of
Directors, management can elect to settle all or a portion of our U.S. profit sharing contribution with Company stock. Also, our calculation of adjusted EBITDA reflects the impact of other
income (expense).
(2): Non-U.S. GAAP free cash flow may not represent residual cash flow available for discretionary
or non-discretionary expenditures that are not deducted from this measure, including any
mandatory debt servicing and restructuring payments.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2012
2011
2012
2011
Non-U.S. GAAP adjusted cash net earnings - continuing operations
$79.2
$102.4
$211.9
$252.8
Add: Depreciation expense on property, plant and equipment, net of special items
42.1
34.3
125.9
102.1
Add: Share-based incentive compensation and profit sharing expense
11.5
13.8
31.6
31.7
Less: Capital expenditures
(30.0)
(31.6)
(97.8)
(78.1)
Changes in working capital items:
Receivables, net
(57.9)
14.4
(40.3)
(20.0)
Inventories, net
(2.4)
25.9
(83.5)
(80.1)
Accounts payable
(14.6)
(10.5)
(9.0)
21.1
Non-U.S. GAAP Free Cash Flow - continuing operations
$27.9
$148.7
$138.8
$229.5
Discontinued operations
6.5
--
18.7
--
Total non-U.S. GAAP Free Cash Flow
$34.4
$148.7
$157.5
$229.5
30 |
 Non-U.S.
GAAP
EBIT,
EBITDA,
AND
ADJUSTED
EBITDA
(1)
(Unaudited)
(In millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2012
2011
2012
2011
U.S. GAAP net (loss) earnings available to common stockholders - continuing operations
($1,171.1)
$73.7
($1,200.1)
$198.4
Add: Interest Expense
96.5
36.6
291.2
110.5
Add: Income tax provision (benefit)
(4.4)
26.4
(11.8)
73.8
Non-U.S. GAAP EBIT - continuing operations
(1,079.0)
136.7
(920.7)
382.7
Depreciation and amortization on property, plant and equipment and intangible assets acquired
75.4
36.7
230.9
109.6
Non-U.S. GAAP EBITDA - continuing operations
(1,003.6)
173.4
(689.8)
492.3
Add: Share-based incentive compensation and profit sharing expense
11.5
13.8
31.6
31.7
Add: Impairment of goodwill and other intangible assets
1,223.5
--
1,223.5
--
Add: 2011-2014 Integration and Optimization Program restructuring charges
36.6
--
109.4
--
Add: Other restructuring charges
0.2
--
0.7
--
Add: Costs related to the acquisition of Diversey
1.3
24.1
4.8
30.7
Add: 2011-2014 Integration and Optimization Program associated costs (less accelerated
depreciation and amortization expense of $5.2 million in the nine months ended September 30,
2012) 2.8
--
4.9
--
Add: Non-recurring associated costs from legacy Diversey restructuring programs (less
accelerated depreciation and amortization expwnaw od $0.3 million in the nine months ended
September 30, 2012) (0.5)
--
17.2
--
Add: Impariment of equity investment and related provisions for bad debt
--
--
25.8
--
Less: Gains from foreign currncy forward contracts related to the closing of the acquisition of
Diversey --
(6.3)
--
(6.3)
Add: European manufacturing facility closure charges
0.2
--
0.2
0.2
Add: Foreign currency exchange losses related to Venezuelan subsidiary
--
--
0.2
0.2
Add: Settlement agreement related costs
0.4
0.2
0.6
0.8
Non-U.S. GAAP adjusted EBITDA - continuing operations
$272.4
$205.2
$729.1
$549.6
Total net sales
$1,900.3
$1,247.1
$5,670.3
$3,588.2
Non-U.S. GAAP adjusted EBITDA as a % of total net sales - continuing operations
14.3%
16.5%
12.9%
15.3%
Discontinued operations
12.8
--
34.7
--
Total non-U.S. GAAP adjusted EBITDA
$285.2
$205.2
$763.8
$549.6
(1): Our 2011 adjusted EBITDA calculation has been revised to conform to our 2012 presentation. In the
first quarter of 2012, we revised our calculation of adjusted EBITDA to exclude our
share-based incentive compensation expense related to our U.S. profit sharing plan. At its
discretion and with the approval of the Organization and Compensation Committee of our Board of
Directors, management can elect to settle all or a portion of our U.S. profit sharing contribution with Company stock. Also, our calculation of adjusted EBITDA reflects the impact of other
income (expense).
31 |
 Credit Agreement EBITDA Reconciliation
(1)
(Unaudited)
(In millions)
32
(1): Our 2011 adjusted EBITDA calculation has been revised to conform to our 2012 presentation. In the
first quarter of 2012, we revised our calculation of adjusted EBITDA to exclude our
share-based incentive compensation expense related to our U.S. profit sharing plan. At its
discretion and with the approval of the Organization and Compensation Committee of our Board of
Directors, management can elect to settle all or a portion of our U.S. profit sharing contribution with Company stock. Also, our calculation of adjusted EBITDA reflects the impact of other
income (expense).
Three months ended,
December 31, 2011
March 31, 2012
June 30, 2012
September 30, 2012
Total non-U.S. GAAP adjusted EBITDA
$245.2
$235.8
$242.9
$285.2
Add: Net Earnings from discontinued operations
--
--
--
5.9
Less: 2011 - 2014 Integration and Optimization Program associated costs
--
(0.5)
(1.6)
(2.8)
Add: Non-recurring associated costs from legacy Diversey restructuring
programs (11.0)
(7.3)
(10.4)
0.5
Less: European manufacturing facility closure charges
(0.1)
--
(0.1)
(0.2)
Less: Settlement agreement related costs
(0.1)
(0.1)
(0.1)
(0.4)
Add: Non cash contributions - Pensions
12.5
4.1
4.1
4.1
Less: (Gains) or losses from sales of assets
--
0.2
(0.1)
(0.6)
(Income) or loss accounted for by equity method of accounting, net of cash
dividends and distributions to the Company
(0.9)
(0.5)
(1.9)
(0.6)
Less: Any costs, expenses or charges in connection with EPC Transactions
5.3
5.1
6.3
0.8
Add: EBITDA (loss) from unrestricted subsidiaries
2.6
2.7
3.0
2.8
Rounding
(0.1)
0.2
(0.2)
0.2
Total Credit Agreement EBITDA
$253.4
$239.7
$241.9
$294.8
(2)
(2): Total non-U.S. GAAP adjusted EBITDA for the three months ended December
31, 2011, March 31, 2012 and June 30, 2012 have not been restated from prior disclosures and therefore
include the results of Diversey Japan as credit agreement EBITDA includes these
results. Please refer to the the financial tables and information set forth in the Company's earnings
press releases for the relevant quarters for a reconciliation of U.S. GAAP net
(loss) earnings available to common stockholders - diluted as reported to non-U.S. GAAP adjusted EBITDA. |