QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
Page | |
PART I. FINANCIAL INFORMATION | |
PART II. OTHER INFORMATION | |
(In millions, except share and per share data) | June 30, 2019 (unaudited) | December 31, 2018 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Trade receivables, net of allowance for doubtful accounts of $9.9 in 2019 and $9.1 in 2018 | ||||||||
Income tax receivables | ||||||||
Other receivables | ||||||||
Inventories, net of inventory reserves of $22.2 in 2019 and $18.1 in 2018 | ||||||||
Current assets held for sale | ||||||||
Prepaid expenses and other current assets | ||||||||
Total current assets | ||||||||
Property and equipment, net | ||||||||
Goodwill | ||||||||
Identifiable intangible assets, net | ||||||||
Deferred taxes | ||||||||
Other non-current assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities and Stockholders' Deficit | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | $ | ||||||
Current portion of long-term debt | ||||||||
Accounts payable | ||||||||
Accrued restructuring costs | ||||||||
Income tax payable | ||||||||
Other current liabilities | ||||||||
Total current liabilities | ||||||||
Long-term debt, less current portion | ||||||||
Deferred taxes | ||||||||
Other non-current liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies - Note 18 | ||||||||
Stockholders’ deficit: | ||||||||
Preferred stock, $0.10 par value per share, 50,000,000 shares authorized; no shares issued in 2019 and 2018 | ||||||||
Common stock, $0.10 par value per share, 400,000,000 shares authorized; shares issued: 231,655,982 in 2019 and 231,619,037 in 2018; shares outstanding: 154,546,260 in 2019 and 155,654,370 in 2018 | ||||||||
Additional paid-in capital | ||||||||
Retained earnings | ||||||||
Common stock in treasury, 77,109,722 shares in 2019 and 75,964,667 shares in 2018 | ( | ) | ( | ) | ||||
Accumulated other comprehensive loss, net of taxes | ( | ) | ( | ) | ||||
Total stockholders’ deficit | ( | ) | ( | ) | ||||
Total liabilities and stockholders’ deficit | $ | $ |
Three Months Ended June 30, (unaudited) | Six Months Ended June 30, (unaudited) | |||||||||||||||
(In millions, except per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||
Cost of sales | ||||||||||||||||
Gross profit | ||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||
Amortization expense of intangible assets acquired | ||||||||||||||||
Restructuring charges | ||||||||||||||||
Operating profit | ||||||||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Foreign currency exchange loss due to highly inflationary economies | ( | ) | ( | ) | ||||||||||||
Other income (expense), net | ( | ) | ||||||||||||||
Earnings before income tax provision | ||||||||||||||||
Income tax provision | ||||||||||||||||
Net earnings (loss) from continuing operations | ( | ) | ||||||||||||||
Gain on sale of discontinued operations, net of tax | ||||||||||||||||
Net earnings (loss) | $ | $ | $ | $ | ( | ) | ||||||||||
Basic: | ||||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | ) | ||||||||||
Discontinued operations | ||||||||||||||||
Net earnings (loss) per common share - basic | $ | $ | $ | $ | ( | ) | ||||||||||
Diluted: | ||||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | ) | ||||||||||
Discontinued operations | ||||||||||||||||
Net earnings (loss) per common share - diluted | $ | $ | $ | $ | ( | ) | ||||||||||
Dividends per common share | $ | $ | $ | $ | ||||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic | ||||||||||||||||
Diluted |
Three Months Ended June 30, (unaudited) | Six Months Ended June 30, (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
(In millions) | Gross | Taxes | Net | Gross | Taxes | Net | Gross | Taxes | Net | Gross | Taxes | Net | ||||||||||||||||||||||||||||||||||||
Net earnings (loss) | $ | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of pension items | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
Unrealized (losses) gains on derivative instruments for net investment hedge | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
Unrealized (losses) gains on derivative instruments for cash flow hedge | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Other comprehensive (loss) income | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | ||||||||||||||||||||||
Comprehensive income (loss), net of taxes | $ | $ | $ | $ | ( | ) |
(In millions) | Common Stock | Additional Paid-in Capital | Retained Earnings | Common Stock in Treasury | Accumulated Other Comprehensive Loss, Net of Taxes | Total Stockholders’ Deficit | ||||||||||||||||||
Balance at March 31, 2019 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Effect of share-based incentive compensation | — | — | — | — | ||||||||||||||||||||
Repurchases of common stock | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
Recognition of pension items, net of taxes | — | — | — | — | ||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Unrealized loss on derivative instruments, net of taxes | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||
Dividends on common stock ($0.16 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2019 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Effect of share-based incentive compensation | — | — | — | |||||||||||||||||||||
Stock issued for profit sharing contribution paid in stock | — | — | — | |||||||||||||||||||||
Repurchases of common stock | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
Recognition of pension items, net of taxes | — | — | — | — | ||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | ||||||||||||||||||||
Unrealized gain on derivative instruments, net of taxes | — | — | — | — | ||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||
Dividends on common stock ($0.32 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2019 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Balance at March 31, 2018 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Effect of share-based incentive compensation | — | — | ( | ) | — | |||||||||||||||||||
Stock issued for profit sharing contribution paid in stock | — | — | — | |||||||||||||||||||||
Repurchase of common stock | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
Recognition of pension items, net of taxes | — | — | — | — | ||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Unrealized gain on derivative instruments, net of taxes | — | — | — | — | ||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||
Dividends on common stock ($0.16 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Impact of recently adopted accounting standards | — | — | — | — | ||||||||||||||||||||
Balance at June 30, 2018 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
Effect of share-based incentive compensation | — | ( | ) | — | ||||||||||||||||||||
Stock issued for profit sharing contribution paid in stock | — | — | — | |||||||||||||||||||||
Repurchases of common stock | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Recognition of pension items, net of taxes | — | — | — | — | ||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Unrealized gain on derivative instruments, net of taxes | — | — | — | — | ||||||||||||||||||||
Net loss | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Dividends on common stock ($0.32 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Impact of recently adopted accounting standards | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2018 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Six Months Ended June 30, (unaudited) | ||||||||
(In millions) | 2019 | 2018 | ||||||
Net earnings (loss) | $ | $ | ( | ) | ||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities | ||||||||
Depreciation and amortization | ||||||||
Share-based incentive compensation | ||||||||
Profit sharing expense | ||||||||
Provisions for bad debt | ||||||||
Provisions for inventory obsolescence | ||||||||
Deferred taxes, net | ( | ) | ||||||
Net gain on sale of business | ( | ) | ( | ) | ||||
Other non-cash items | ||||||||
Changes in operating assets and liabilities: | ||||||||
Trade receivables, net | ( | ) | ( | ) | ||||
Inventories, net | ( | ) | ( | ) | ||||
Accounts payable | ( | ) | ||||||
Income tax receivable/payable | ||||||||
Other assets and liabilities | ( | ) | ||||||
Net cash provided by operating activities | $ | $ | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | ( | ) | ( | ) | ||||
(Payments of) Proceeds from, net sale of business and property and equipment | ( | ) | ||||||
Businesses acquired, net of cash acquired | ( | ) | ||||||
Investment in cost method investments | ( | ) | ||||||
Settlement of foreign currency forward contracts | ( | ) | ( | ) | ||||
Other investing activities | ( | ) | ||||||
Net cash used in investing activities | $ | ( | ) | $ | ( | ) | ||
Cash flows from financing activities: | ||||||||
Net proceeds from borrowings | ||||||||
Payments of debt modification/extinguishment costs | ( | ) | ||||||
Dividends paid on common stock | ( | ) | ( | ) | ||||
Impact of tax withholding on share-based compensation | ( | ) | ( | ) | ||||
Repurchases of common stock | ( | ) | ( | ) | ||||
Net cash used in financing activities | $ | ( | ) | $ | ( | ) | ||
Effect of foreign currency exchange rate changes on cash and cash equivalents | $ | $ | ( | ) | ||||
Cash Reconciliation: | ||||||||
Cash and cash equivalents | ||||||||
Restricted cash and cash equivalents | ||||||||
Balance, beginning of period | $ | $ | ||||||
Net change during the period | ( | ) | ( | ) | ||||
Cash and cash equivalents | ||||||||
Restricted cash and cash equivalents | ||||||||
Balance, end of period | $ | $ | ||||||
Supplemental Cash Flow Information: | ||||||||
Interest payments, net of amounts capitalized | $ | $ | ||||||
Income tax payments, net of cash refunds | $ | $ | ||||||
Payments related to the sale of Diversey | $ | $ | ||||||
Restructuring payments including associated costs | $ | $ | ||||||
Non-cash items: | ||||||||
Transfers of shares of common stock from treasury for 2018 and 2017 profit-sharing contributions | $ | $ |
Three Months Ended June 30, 2019 | ||||||||||||
(In millions) | Food Care | Product Care | Total | |||||||||
North America | $ | $ | $ | |||||||||
EMEA | ||||||||||||
South America | ||||||||||||
APAC | ||||||||||||
Topic 606 Revenue | ||||||||||||
Non-Topic 606 Revenue (Leasing: Sales-type and Operating) | ||||||||||||
Total | $ | $ | $ |
Six Months Ended June 30, 2019 | ||||||||||||
(In millions) | Food Care | Product Care | Total | |||||||||
North America | $ | $ | $ | |||||||||
EMEA | ||||||||||||
South America | ||||||||||||
APAC | ||||||||||||
Topic 606 Revenue | ||||||||||||
Non-Topic 606 Revenue (Leasing: Sales-type and Operating) | ||||||||||||
Total | $ | $ | $ |
Three Months Ended June 30, 2018 | ||||||||||||
(In millions)(1) | Food Care | Product Care | Total | |||||||||
North America | $ | $ | $ | |||||||||
EMEA | ||||||||||||
South America | ||||||||||||
APAC | ||||||||||||
Topic 606 Revenue | ||||||||||||
Non-Topic 606 Revenue (Leasing: Sales-type and Operating) | ||||||||||||
Total | $ | $ | $ |
Six Months Ended June 30, 2018 | ||||||||||||
(In millions)(1) | Food Care | Product Care | Total | |||||||||
North America | $ | $ | $ | |||||||||
EMEA | ||||||||||||
South America | ||||||||||||
APAC | ||||||||||||
Topic 606 Revenue | ||||||||||||
Non-Topic 606 Revenue (Leasing: Sales-type and Operating) | ||||||||||||
Total | $ | $ | $ |
(1) | Amounts by geography has been reclassified from prior year disclosure to reflect adjustments to our regional operating model. As of January 1, 2019, our geographic regions are: North America, EMEA, South America and APAC. Our North American operations include Canada, the United States, Mexico and Central America. Mexico and Central America were previously included in Latin America. |
(In millions) | June 30, 2019 | December 31, 2018 | ||||||
Contract assets | $ | $ | ||||||
Contract liabilities |
(In millions) | Short-Term (12 months or less) | Long-Term | Total | |||||||||
Total transaction price | $ | $ | $ |
(in millions) | Short-Term (12 months or less) | Long-Term | Total | |||||||||
Total lease receivable (Sales-type and Operating) | $ | $ | $ |
(in millions) | June 30, 2019 | |||
Other non-current assets: | ||||
Finance leases - ROU assets | $ | |||
Finance leases - Accumulated depreciation | ( | ) | ||
Operating leases - ROU assets | ||||
Operating leases - Accumulated depreciation | ( | ) | ||
Total lease assets | $ | |||
Current portion of long-term debt: | ||||
Finance leases | $ | ( | ) | |
Operating leases | ( | ) | ||
Long-term debt, less current portion: | ||||
Finance leases | ( | ) | ||
Operating leases | ( | ) | ||
Total lease liabilities | $ | ( | ) |
(in millions) | Operating leases | Finance leases | ||||||
Remainder of 2019 | $ | $ | ||||||
2020 | ||||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
Thereafter | ||||||||
Total lease payments | ||||||||
Less: Interest | ( | ) | ( | ) | ||||
Present value of lease liabilities | $ | $ |
(in millions) | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
Lease cost | ||||||||
Finance leases | ||||||||
Amortization of ROU assets | $ | $ | ||||||
Interest on lease liabilities | ||||||||
Operating leases | ||||||||
Short-term lease cost | ||||||||
Variable lease cost | ||||||||
Total lease cost | $ | $ |
(in millions) | Six Months Ended June 30, 2019 | |||
Other information: | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from finance leases | $ | |||
Operating cash flows from operating leases | $ | |||
Financing cash flows from finance leases | $ | |||
ROU assets obtained in exchange for new finance lease liabilities | $ | |||
ROU assets obtained in exchange for new operating lease liabilities | $ |
Weighted average information: | |||
Finance leases | |||
Remaining lease term (in years) | |||
Discount rate | % | ||
Operating leases | |||
Remaining lease term (in years) | |||
Discount rate | % |
Preliminary Allocation | Measurement Period | Revised Preliminary Allocation | ||||||||||
(In millions) | As of August 1, 2018 | Adjustments | As of June 30, 2019 | |||||||||
Total consideration transferred | $ | $ | $ | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | ||||||||||||
Trade receivables, net | — | |||||||||||
Inventories, net | ||||||||||||
Prepaid expenses and other current assets | — | |||||||||||
Property and equipment, net | ( | ) | ||||||||||
Identifiable intangible assets, net | ||||||||||||
Goodwill | ||||||||||||
Other non-current assets | ( | ) | ||||||||||
Total assets | $ | $ | $ | |||||||||
Liabilities: | ||||||||||||
Current portion of long-term debt | ||||||||||||
Accounts payable | ( | ) | ||||||||||
Other current liabilities | — | |||||||||||
Long-term debt, less current portion | ||||||||||||
Total liabilities | $ | $ | ( | ) | $ |
Amount | Useful life | |||||
(in millions) | (in years) | |||||
Customer relationships | $ | |||||
Trademarks and tradenames | ||||||
Total intangible assets with definite lives | $ |
• | Food Care; and |
• | Product Care. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Sales: | ||||||||||||||||
Food Care | $ | $ | $ | $ | ||||||||||||
As a % of Total Company net sales | % | % | % | % | ||||||||||||
Product Care | ||||||||||||||||
As a % of Total Company net sales | % | % | % | % | ||||||||||||
Total Company Net Sales | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Non-U.S. GAAP Adjusted EBITDA from continuing operations | ||||||||||||||||
Food Care | $ | $ | $ | $ | ||||||||||||
Adjusted EBITDA Margin | % | % | % | % | ||||||||||||
Product Care | ||||||||||||||||
Adjusted EBITDA Margin | % | % | % | % | ||||||||||||
Corporate | ( | ) | ( | ) | ( | ) | ||||||||||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations | $ | $ | $ | $ | ||||||||||||
Adjusted EBITDA Margin | % | % | % | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net earnings (loss) from continuing operations | $ | $ | $ | $ | ( | ) | ||||||||||
Interest expense, net | ||||||||||||||||
Income tax provision | ||||||||||||||||
Depreciation and amortization, net of adjustments(1) | ||||||||||||||||
Special Items: | ||||||||||||||||
Restructuring charges(2) | ||||||||||||||||
Other restructuring associated costs(3) | ( | ) | ||||||||||||||
Foreign currency exchange loss due to highly inflationary economies | ||||||||||||||||
Charges related to the Novipax settlement agreement | ||||||||||||||||
(Income) charges related to acquisition and divestiture activity | ( | ) | ||||||||||||||
Loss (gain) from class-action litigation settlement | ( | ) | ||||||||||||||
Other Special Items(4) | ||||||||||||||||
Pre-tax impact of Special Items | ||||||||||||||||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations | $ | $ | $ | $ |
(1) | Depreciation and amortization by segment were as follows: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Food Care | $ | $ | $ | $ | ||||||||||||
Product Care | ||||||||||||||||
Total Company depreciation and amortization(i) | ||||||||||||||||
Depreciation and amortization adjustments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Depreciation and amortization, net of adjustments | $ | $ | $ | $ |
(i) | Includes share-based incentive compensation of $ |
(2) | Restructuring charges by segment were as follows: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Food Care | $ | $ | $ | $ | ||||||||||||
Product Care | ||||||||||||||||
Total Company restructuring charges | $ | $ | $ | $ |
(3) | Other restructuring associated costs for three and six months ended June 30, 2019, primarily relate to fees paid to third-party consultants in support of Reinvent SEE and costs related to property consolidations resulting from Reinvent SEE. |
(4) | Other Special Items for the three and six months ended June 30, 2019, primarily included fees related to professional services. |
(In millions) | June 30, 2019 | December 31, 2018 | ||||||
Assets allocated to segments:(1) | ||||||||
Food Care | $ | $ | ||||||
Product Care | ||||||||
Total segments | ||||||||
Assets not allocated: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Assets held for sale | ||||||||
Income tax receivables | ||||||||
Other receivables | ||||||||
Deferred taxes | ||||||||
Other | ||||||||
Total | $ | $ |
(1) | Beginning in 2018, the Company implemented a change in allocation of Corporate expenses, which are now allocated to Food Care and Product Care segments. At that time, the Company revised the method of allocation for some assets including property and equipment, net and goodwill, which were previously unallocated. |
(In millions) | June 30, 2019 | December 31, 2018 | ||||||
Raw materials | $ | $ | ||||||
Work in process | ||||||||
Finished goods | ||||||||
Total | $ | $ |
(In millions) | June 30, 2019 | December 31, 2018 | ||||||
Land and improvements | $ | $ | ||||||
Buildings | ||||||||
Machinery and equipment | ||||||||
Other property and equipment | ||||||||
Construction-in-progress | ||||||||
Property and equipment, gross | ||||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
Property and equipment, net(1) | $ | $ |
(1) | Upon adoption of ASU 2016-02, $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest cost capitalized | $ | $ | $ | $ | ||||||||||||
Depreciation and amortization expense for property and equipment | $ | $ | $ | $ |
(In millions) | Food Care | Product Care | Total | |||||||||
Gross Carrying Value at December 31, 2018 | $ | $ | $ | |||||||||
Accumulated impairment(1) | ( | ) | ( | ) | ( | ) | ||||||
Carrying Value at December 31, 2018 | $ | $ | $ | |||||||||
Acquisition, purchase price and other adjustments | ||||||||||||
Currency translation | ||||||||||||
Carrying Value at June 30, 2019 | $ | $ | $ |
(1) | There has been no change to our accumulated impairment balance as of June 30, 2019. |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
(In millions) | Gross Carrying Value | Accumulated Amortization | Net | Gross Carrying Value | Accumulated Amortization | Net | |||||||||||||||||
Customer relationships | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||
Trademarks and tradenames | ( | ) | ( | ) | |||||||||||||||||||
Capitalized software | ( | ) | ( | ) | |||||||||||||||||||
Technology | ( | ) | ( | ) | |||||||||||||||||||
Contracts | ( | ) | ( | ) | |||||||||||||||||||
Total intangible assets with definite lives | ( | ) | ( | ) | |||||||||||||||||||
Trademarks and tradenames with indefinite lives | — | — | |||||||||||||||||||||
Total identifiable intangible assets, net | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Year | Amount (in millions) | ||
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
Thereafter | |||
Total | $ |
(in millions) | Total Restructuring Program Range | Less Cumulative Spend to Date | Remaining Restructuring Spend(2) | |||||||||||||||||
Low | High | Low | High | |||||||||||||||||
Costs of reduction in headcount as a result of reorganization | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
Other expenses associated with the Program | ( | ) | ||||||||||||||||||
Total expense | ( | ) | ||||||||||||||||||
Capital expenditures | ( | ) | ||||||||||||||||||
Total estimated cash cost(1) | $ | $ | $ | ( | ) | $ | $ |
(1) | Total estimated cash cost excludes the impact of foreign currency and non-cash depreciation and amortization charges. |
(2) | Remaining restructuring spend primarily consists of restructuring costs associated with the Company’s Reinvent SEE strategy, and the completion of our efforts to eliminate stranded costs. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Other associated costs | $ | $ | $ | $ | ||||||||||||
Restructuring charges | ||||||||||||||||
Total charges | $ | $ | $ | $ | ||||||||||||
Capital expenditures | $ | $ | $ | $ |
(In millions) | |||
Restructuring accrual at December 31, 2018 | $ | ||
Accrual and accrual adjustments | |||
Cash payments during 2019 | ( | ) | |
Effect of changes in foreign currency exchange rates | |||
Restructuring accrual at June 30, 2019 | $ |
(In millions) | December 31, 2018 | |||||||
Short-term borrowings(1) | $ | $ | ||||||
Current portion of long-term debt(2) | ||||||||
Total current debt | ||||||||
Term Loan A due July 2023 | ||||||||
6.50% Senior Notes due December 2020 | ||||||||
4.875% Senior Notes due December 2022 | ||||||||
5.25% Senior Notes due April 2023 | ||||||||
4.50% Senior Notes due September 2023 | ||||||||
5.125% Senior Notes due December 2024 | ||||||||
5.50% Senior Notes due September 2025 | ||||||||
6.875% Senior Notes due July 2033 | ||||||||
Other(2) | ||||||||
Total long-term debt, less current portion(3) | ||||||||
Total debt(4) | $ | $ |
(1) | Short-term borrowings of $ |
(2) | Due to the adoption of ASU 2016-02, the |
(3) | Amounts are net of unamortized discounts and issuance costs of $ |
(4) | As of |
(In millions) | June 30, 2019 | December 31, 2018 | ||||||
Used lines of credit(1) | $ | $ | ||||||
Unused lines of credit | ||||||||
Total available lines of credit(2) | $ | $ |
(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) |
Cash Flow Hedge | Non-Designated as Hedging Instruments | Total | |||||||||||||||||||||
(In millions) | June 30, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | |||||||||||||||||
Derivative Assets | |||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Total Derivative Assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||||
Foreign currency forward contracts | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Total Derivative Liabilities(1) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Net Derivatives(2) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ |
(1) | Excludes € |
(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) | June 30, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | |||||||||||
Gross position | $ | $ | $ | ( | ) | $ | ( | ) | |||||||
Impact of master netting agreements | ( | ) | ( | ) | |||||||||||
Net amounts recognized on the Condensed Consolidated Balance Sheets | $ | $ | $ | ( | ) | $ | ( | ) |
Amount of Gain (Loss) Recognized in Earnings on Derivatives | |||||||||||||||||
Location of Gain (Loss) Recognized on | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | Condensed Consolidated Statements of Operations | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Cash Flow Hedges: | |||||||||||||||||
Foreign currency forward contracts | Cost of sales | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
Treasury locks | Interest expense, net | ||||||||||||||||
Sub-total cash flow hedges | ( | ) | ( | ) | |||||||||||||
Fair Value Hedges: | |||||||||||||||||
Interest rate swaps | Interest expense, net | ||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign currency forward contracts | Other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
• | 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. |
June 30, 2019 | ||||||||||||||||
(In millions) | Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Cash equivalents | $ | $ | $ | $ | ||||||||||||
Derivative financial and hedging instruments net asset: | ||||||||||||||||
Foreign currency forward contracts and options | $ | ( | ) | $ | $ | ( | ) | $ |
December 31, 2018 | ||||||||||||||||
(In millions) | Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Cash equivalents | $ | $ | $ | $ | ||||||||||||
Derivative financial and hedging instruments net asset: | ||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | |||||||||||||||
(In millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Term Loan A Facility due July 2023(1) | $ | $ | $ | $ | ||||||||||||
6.50% Senior Notes due December 2020 | ||||||||||||||||
4.875% Senior Notes due December 2022 | ||||||||||||||||
5.25% Senior Notes due April 2023 | ||||||||||||||||
4.50% Senior Notes due September 2023(1) | ||||||||||||||||
5.125% Senior Notes due December 2024 | ||||||||||||||||
5.50% Senior Notes due September 2025 | ||||||||||||||||
6.875% Senior Notes due July 2033 | ||||||||||||||||
Other foreign borrowings(1) | ||||||||||||||||
Other domestic borrowings | ||||||||||||||||
Total debt(2) | $ | $ | $ | $ |
(1) | Includes borrowings denominated in currencies other than U.S. dollars. |
(2) | At June 30, 2019, the carrying amount and estimated fair value of debt exclude lease liabilities. |
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | |||||||||||||||||||||||
(In millions) | U.S. | International | Total | U.S. | International | Total | ||||||||||||||||||
Components of net periodic benefit cost (income): | ||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Interest cost | ||||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Amortization of net prior service cost | ||||||||||||||||||||||||
Amortization of net actuarial loss | ||||||||||||||||||||||||
Net periodic cost (income) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Cost of settlement | ||||||||||||||||||||||||
Total benefit cost (income) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | |||||||||||||||||||||||
(In millions) | U.S. | International | Total | U.S. | International | Total | ||||||||||||||||||
Components of net periodic benefit cost (income): | ||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Interest cost | ||||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Amortization of net prior service cost | ||||||||||||||||||||||||
Amortization of net actuarial loss | ||||||||||||||||||||||||
Net periodic cost (income) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
Cost of settlement | ||||||||||||||||||||||||
Total benefit cost (income) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Components of net periodic benefit cost (income): | ||||||||||||||||
Interest cost | $ | $ | $ | $ | ||||||||||||
Amortization of net prior service credit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of net actuarial gain | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net periodic cost | $ | $ | $ | $ |
• | indemnities in connection with the sale of businesses, primarily related to the sale of Diversey. Our indemnity obligations under the relevant agreements may be limited in terms of time, amount or scope. As it relates to certain income tax related liabilities, the relevant agreements may not provide any cap for such liabilities, and the period in which we would be liable would lapse upon expiration of the statute of limitation for assessment of the underlying taxes. Because of the conditional nature of these obligations and the unique facts and circumstances involved in each particular agreement, we are unable to reasonably estimate the potential maximum exposure associated with these items; |
• | 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 generally do not establish a liability for product warranty based on a percentage of sales or other formula. 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 consolidated financial position and results 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 June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Total share-based incentive compensation expense(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 | ROIC | Adjusted EBITDA | ||||||||||
Number of units granted | ||||||||||||
Fair value on grant date(1) | $ | $ | $ |
(1) | Represents weighted average fair value for PSU awards approved on February 13, 2019 and February 14, 2019. |
TSR portion of the 2019 PSU Award | ||
Expected price volatility(1) | % | |
Risk-free interest rate(1) | % |
(1) | Represents average of assumptions for PSU awards approved on February 13, 2019 and February 14, 2019. |
(In millions) | Unrecognized Pension Items | Cumulative Translation Adjustment | Unrecognized Losses on Derivative Instruments for net investment hedge | Unrecognized Gains (Losses) on Derivative Instruments for cash flow hedge | Accumulated Other Comprehensive Loss, Net of Taxes | |||||||||||||||
Balance at December 31, 2017 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Other comprehensive income (loss) before reclassifications | ( | ) | ( | ) | ||||||||||||||||
Less: amounts reclassified from accumulated other comprehensive loss | ||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||||||
Balance at June 30, 2018(2) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||
Balance at December 31, 2018(1) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ||||||||||||||||||
Less: amounts reclassified from accumulated other comprehensive loss | ( | ) | ||||||||||||||||||
Net current period other comprehensive income (loss) | ( | ) | ||||||||||||||||||
Balance at June 30, 2019(2) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) |
(1) | In the fourth quarter of 2018, the Company Adopted ASU 2018-02. As part of the adoption, the Company elected to reclassify $ |
(2) | The ending balance in AOCL includes gains and losses on intra-entity foreign currency transactions. The intra-entity currency translation adjustment was $( |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
(In millions) | 2019(1) | 2018(1) | 2019(1) | 2018(1) | Location of Amount Reclassified from AOCL | |||||||||||||
Defined benefit pension plans and other post-employment benefits: | ||||||||||||||||||
Prior service credit | $ | $ | $ | $ | ||||||||||||||
Actuarial losses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Total pre-tax amount | ( | ) | ( | ) | ( | ) | ( | ) | Other income (expense), net | |||||||||
Tax benefit | ||||||||||||||||||
Net of tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Net gains (losses) on cash flow hedging derivatives: | ||||||||||||||||||
Foreign currency forward contracts(2) | ( | ) | ( | ) | Other income (expense), net | |||||||||||||
Treasury locks | Interest expense, net | |||||||||||||||||
Total pre-tax amount | ( | ) | ( | ) | ||||||||||||||
Tax (expense) benefit | ( | ) | ( | ) | ||||||||||||||
Net of tax | ( | ) | ( | ) | ||||||||||||||
Total reclassifications for the period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(1) | Amounts in parenthesis indicate changes to earnings (loss). |
(2) | These accumulated other comprehensive components are included in our derivative and hedging activities. See Note 14, “Derivatives and Hedging Activities,” of the Notes to Condensed Consolidated Financial Statements for additional details. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net foreign exchange transaction loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Bank fee expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Pension income other than service costs | ||||||||||||||||
Other, net(1) | ||||||||||||||||
Other income (expense), net | $ | $ | $ | $ | ( | ) |
(1) | Cryovac Brasil Ltda., a Sealed Air subsidiary, received a final decision from the Brazilian court regarding a claim in which Sealed Air contended that certain indirect taxes paid were calculated on an incorrect amount. As a result, for the three and six months ended June 30, 2019, we recorded $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Basic Net Earnings (Loss) Per Common Share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net earnings (loss) | $ | $ | $ | $ | ( | ) | ||||||||||
Distributed and allocated undistributed net earnings to unvested restricted stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Distributed and allocated undistributed net earnings (loss) | ( | ) | ||||||||||||||
Distributed net earnings - dividends paid to common stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Allocation of undistributed net earnings (loss) to common stockholders | $ | $ | $ | $ | ( | ) | ||||||||||
Denominator: | ||||||||||||||||
Weighted average number of common shares outstanding - basic | ||||||||||||||||
Basic net earnings per common share: | ||||||||||||||||
Distributed net earnings | $ | $ | $ | $ | ||||||||||||
Allocated undistributed net earnings (loss) to common stockholders | ( | ) | ||||||||||||||
Basic net earnings (loss) per common share | $ | $ | $ | $ | ( | ) | ||||||||||
Diluted Net Earnings (Loss) Per Common Share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Distributed and allocated undistributed net earnings (loss) | $ | $ | $ | $ | ( | ) | ||||||||||
Add: Allocated undistributed net earnings to unvested restricted stockholders | ||||||||||||||||
Less: Undistributed net earnings reallocated to unvested restricted stockholders | ( | ) | ( | ) | ||||||||||||
Net earnings (loss) available to common stockholders - diluted | $ | $ | $ | $ | ( | ) | ||||||||||
Denominator: | ||||||||||||||||
Weighted average number of common shares outstanding - basic | ||||||||||||||||
Effect of contingently issuable shares | ||||||||||||||||
Effect of unvested restricted stock units | ||||||||||||||||
Weighted average number of common shares outstanding - diluted under two-class | ||||||||||||||||
Effect of unvested restricted stock - participating security | ||||||||||||||||
Weighted average number of common shares outstanding - diluted under treasury stock | ||||||||||||||||
Diluted net earnings (loss) per common share | $ | $ | $ | $ | ( | ) |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||
(In millions, except per share amounts) | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Net sales | $ | 1,161.0 | $ | 1,155.2 | 0.5 | % | $ | 2,273.7 | $ | 2,286.2 | (0.5 | )% | ||||||||||
Gross profit | $ | 378.3 | $ | 363.5 | 4.1 | % | $ | 743.5 | $ | 737.5 | 0.8 | % | ||||||||||
As a % of net sales | 32.6 | % | 31.5 | % | 32.7 | % | 32.3 | % | ||||||||||||||
Operating profit | $ | 78.4 | $ | 160.2 | (51.1 | )% | $ | 219.5 | $ | 327.7 | (33.0 | )% | ||||||||||
As a % of net sales | 6.8 | % | 13.9 | % | 9.7 | % | 14.3 | % | ||||||||||||||
Net earnings (loss) from continuing operations | $ | 25.5 | $ | 83.3 | (69.4 | )% | $ | 89.8 | $ | (124.7 | ) | # | ||||||||||
Gain on sale of discontinued operations, net of tax | 7.7 | 31.1 | (75.2 | )% | 0.9 | 38.5 | (97.7 | )% | ||||||||||||||
Net earnings (loss) | $ | 33.2 | $ | 114.4 | (71.0 | )% | $ | 90.7 | $ | (86.2 | ) | # | ||||||||||
Basic: | ||||||||||||||||||||||
Continuing operations | $ | 0.16 | $ | 0.52 | (69.2 | )% | $ | 0.58 | $ | (0.77 | ) | # | ||||||||||
Discontinued operations | 0.06 | 0.19 | (68.4 | )% | 0.01 | 0.24 | (95.8 | )% | ||||||||||||||
Net earnings (loss) per common share - basic | $ | 0.22 | $ | 0.71 | (69.0 | )% | $ | 0.59 | $ | (0.53 | ) | # | ||||||||||
Diluted: | ||||||||||||||||||||||
Continuing operations | $ | 0.16 | $ | 0.52 | (69.2 | )% | $ | 0.58 | $ | (0.77 | ) | # | ||||||||||
Discontinued operations | 0.05 | 0.19 | (73.7 | )% | — | 0.24 | # | |||||||||||||||
Net earnings (loss) per common share - diluted | $ | 0.21 | $ | 0.71 | (70.4 | )% | $ | 0.58 | $ | (0.53 | ) | # | ||||||||||
Weighted average numbers of common shares outstanding: | ||||||||||||||||||||||
Basic | 154.5 | 159.7 | 154.6 | 162.5 | ||||||||||||||||||
Diluted | 155.3 | 160.6 | 155.3 | 162.5 | ||||||||||||||||||
Non-U.S. GAAP Adjusted EBITDA from continuing operations(1) | $ | 236.7 | $ | 217.5 | 8.8 | % | $ | 452.5 | $ | 422.3 | 7.2 | % | ||||||||||
Non-U.S. GAAP Adjusted EPS from continuing operations(2) | $ | 0.80 | $ | 0.64 | 25.0 | % | $ | 1.40 | $ | 1.15 | 21.7 | % |
# | Denotes a variance that is not meaningful. |
(1) | See Note 6, “Segments,” of the Notes to Condensed Consolidated Financial Statements for a reconciliation of net earnings (loss) from continuing operations to non-U.S. GAAP Adjusted EBITDA from continuing operations. |
(2) | See “Diluted Net Earnings (Loss) 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 June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||
(In millions, except per share data) | Net Earnings | Diluted EPS | Net Earnings | Diluted EPS | Net Earnings | Diluted EPS | Net (Loss) Earnings | Diluted EPS | ||||||||||||||||||||||||
U.S. GAAP net earnings (loss) and diluted EPS from continuing operations(1) | $ | 25.5 | $ | 0.16 | $ | 83.3 | $ | 0.52 | $ | 89.8 | $ | 0.58 | $ | (124.7 | ) | $ | (0.77 | ) | ||||||||||||||
Special Items(2) | 99.8 | 0.64 | 19.1 | 0.12 | 127.7 | 0.82 | 312.5 | 1.92 | ||||||||||||||||||||||||
Non-U.S. GAAP adjusted net earnings and adjusted diluted EPS from continuing operations | $ | 125.3 | $ | 0.80 | $ | 102.4 | $ | 0.64 | $ | 217.5 | $ | 1.40 | $ | 187.8 | $ | 1.15 | ||||||||||||||||
Weighted average number of common shares outstanding - Diluted | 155.3 | 160.6 | 155.3 | 162.5 |
(1) | Net earnings per common share are calculated under the two-class method. |
(2) | Special Items include the following: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions, except per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Special Items: | ||||||||||||||||
Restructuring charges | $ | 29.3 | $ | 7.1 | $ | 36.7 | $ | 15.7 | ||||||||
Other restructuring associated costs(i) | 21.3 | (0.4 | ) | 38.0 | 1.8 | |||||||||||
Foreign currency exchange loss due to highly inflationary economies | 1.3 | — | 2.1 | — | ||||||||||||
Charges related to the Novipax settlement agreement | 59.0 | — | 59.0 | — | ||||||||||||
(Income) charges related to acquisition and divestiture activity | (0.5 | ) | 7.0 | 3.2 | 17.8 | |||||||||||
Loss (gain) from class-action litigation settlement | — | 0.1 | — | (12.6 | ) | |||||||||||
Other Special Items(ii) | 7.3 | 1.7 | 14.7 | 1.9 | ||||||||||||
Pre-tax impact of Special Items | 117.7 | 15.5 | 153.7 | 24.6 | ||||||||||||
Tax impact of Special Items and Tax Special Items(iii) | (17.9 | ) | 3.6 | (26.0 | ) | 287.9 | ||||||||||
Net impact of Special Items | $ | 99.8 | $ | 19.1 | $ | 127.7 | $ | 312.5 | ||||||||
Weighted average number of common shares outstanding - Diluted | 155.3 | 160.6 | 155.3 | 162.5 | ||||||||||||
Loss per share impact from Special Items | $ | (0.64 | ) | $ | (0.12 | ) | $ | (0.82 | ) | $ | (1.92 | ) |
(i) | Other restructuring associated costs for three and six months ended June 30, 2019, primarily relate to fees paid to third-party consultants in support of Reinvent SEE and costs related to property consolidations resulting from Reinvent SEE. |
(ii) | Other Special Items for the three and six months ended June 30, 2019, primarily included fees related to professional services. |
(iii) | Refer to note 1 to the table below for a description of Special Items related to tax. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
U.S. GAAP Earnings before income tax provision from continuing operations | $ | 37.8 | $ | 116.8 | $ | 132.5 | $ | 230.3 | ||||||||
Pre-tax impact of Special Items | 117.7 | 15.5 | 153.7 | 24.6 | ||||||||||||
Non-U.S. GAAP Adjusted Earnings before income tax provision from continuing operations | $ | 155.5 | $ | 132.3 | $ | 286.2 | $ | 254.9 | ||||||||
U.S. GAAP Income tax provision from continuing operations | $ | 12.3 | $ | 33.5 | $ | 42.7 | $ | 355.0 | ||||||||
Tax Special Items(1) | (10.9 | ) | (6.7 | ) | (11.7 | ) | (293.9 | ) | ||||||||
Tax impact of Special Items | 28.8 | 3.1 | 37.7 | 6.0 | ||||||||||||
Non-U.S. GAAP Adjusted Income tax provision from continuing operations | $ | 30.2 | $ | 29.9 | $ | 68.7 | $ | 67.1 | ||||||||
U.S. GAAP Effective income tax rate | 32.5 | % | 28.7 | % | 32.2 | % | 154.1 | % | ||||||||
Non-U.S. GAAP Adjusted income tax rate | 19.4 | % | 22.6 | % | 24.0 | % | 26.3 | % |
(1) | For the three and six months ended June 30, 2019, the Tax Special Items primarily include adjustments related to a U.S. audit assessment associated with foreign tax credit utilization in 2011. For the six months ended June 30, 2018, the Tax Special Items included $290 million of provisional tax expense for one-time tax on unrepatriated foreign earnings pursuant to the TCJA. Refer to Note 17, “Income Taxes,” of the Notes to Condensed Consolidated Financial Statements for additional information. |
(In millions) | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
Net sales | $ | (40.8 | ) | $ | (93.6 | ) | ||
Cost of sales | 30.4 | 67.6 | ||||||
Selling, general and administrative expenses | 5.0 | 11.5 | ||||||
Net earnings | (1.9 | ) | (8.8 | ) | ||||
Adjusted EBITDA | (7.0 | ) | (17.1 | ) |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
(In millions) | North America | EMEA | South America | APAC | Total | ||||||||||||||||||||||||||||||
2018 Net Sales | $ | 660.2 | 57.2 | % | $ | 262.5 | 22.7 | % | $ | 55.3 | 4.8 | % | $ | 177.2 | 15.3 | % | $ | 1,155.2 | |||||||||||||||||
Price | (2.7 | ) | (0.4 | )% | 0.7 | 0.3 | % | 13.7 | 24.8 | % | 0.2 | 0.1 | % | 11.9 | 1.0 | % | |||||||||||||||||||
Volume(1) | 10.9 | 1.6 | % | (1.4 | ) | (0.6 | )% | 2.9 | 5.2 | % | (7.1 | ) | (4.0 | )% | 5.3 | 0.5 | % | ||||||||||||||||||
Total organic change (non-U.S. GAAP) | 8.2 | 1.2 | % | (0.7 | ) | (0.3 | )% | 16.6 | 30.0 | % | (6.9 | ) | (3.9 | )% | 17.2 | 1.5 | % | ||||||||||||||||||
Acquisition | 21.3 | 3.3 | % | — | — | % | — | — | % | 8.1 | 4.6 | % | 29.4 | 2.5 | % | ||||||||||||||||||||
Total constant dollar change (non-U.S. GAAP) | 29.5 | 4.5 | % | (0.7 | ) | (0.3 | )% | 16.6 | 30.0 | % | 1.2 | 0.7 | % | 46.6 | 4.0 | % | |||||||||||||||||||
Foreign currency translation | (1.1 | ) | (0.2 | )% | (15.2 | ) | (5.8 | )% | (15.7 | ) | (28.4 | )% | (8.8 | ) | (5.0 | )% | (40.8 | ) | (3.5 | )% | |||||||||||||||
Total change (U.S. GAAP) | 28.4 | 4.3 | % | (15.9 | ) | (6.1 | )% | 0.9 | 1.6 | % | (7.6 | ) | (4.3 | )% | 5.8 | 0.5 | % | ||||||||||||||||||
2019 Net Sales | $ | 688.6 | 59.3 | % | $ | 246.6 | 21.2 | % | $ | 56.2 | 4.8 | % | $ | 169.6 | 14.6 | % | $ | 1,161.0 |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
(In millions) | North America | EMEA | South America | APAC | Total | ||||||||||||||||||||||||||||||
2018 Net Sales | $ | 1,299.2 | 56.8 | % | $ | 520.4 | 22.8 | % | $ | 114.3 | 5.0 | % | $ | 352.3 | 15.4 | % | $ | 2,286.2 | |||||||||||||||||
Price | 6.0 | 0.4 | % | 2.2 | 0.4 | % | 28.5 | 24.9 | % | 0.3 | 0.1 | % | 37.0 | 1.6 | % | ||||||||||||||||||||
Volume(1) | (2.9 | ) | (0.2 | )% | (4.4 | ) | (0.8 | )% | 2.8 | 2.5 | % | (6.5 | ) | (1.9 | )% | (11.0 | ) | (0.5 | )% | ||||||||||||||||
Total organic change (non-U.S. GAAP) | 3.1 | 0.2 | % | (2.2 | ) | (0.4 | )% | 31.3 | 27.4 | % | (6.2 | ) | (1.8 | )% | 26.0 | 1.1 | % | ||||||||||||||||||
Acquisitions | 42.6 | 3.3 | % | — | — | % | — | — | % | 12.5 | 3.6 | % | 55.1 | 2.4 | % | ||||||||||||||||||||
Total constant dollar change (non-U.S. GAAP) | 45.7 | 3.5 | % | (2.2 | ) | (0.4 | )% | 31.3 | 27.4 | % | 6.3 | 1.8 | % | 81.1 | 3.5 | % | |||||||||||||||||||
Foreign currency translation | (4.1 | ) | (0.3 | )% | (35.8 | ) | (6.9 | )% | (34.6 | ) | (30.3 | )% | (19.1 | ) | (5.4 | )% | (93.6 | ) | (4.0 | )% | |||||||||||||||
Total change (U.S. GAAP) | 41.6 | 3.2 | % | (38.0 | ) | (7.3 | )% | (3.3 | ) | (2.9 | )% | (12.8 | ) | (3.6 | )% | (12.5 | ) | (0.5 | )% | ||||||||||||||||
2019 Net Sales | $ | 1,340.8 | 59.0 | % | $ | 482.4 | 21.2 | % | $ | 111.0 | 4.9 | % | $ | 339.5 | 14.9 | % | $ | 2,273.7 |
(1) | Our volume reported above includes the net impact of changes in unit volume as well as the period-to-period change in the mix of products sold. |
Three Months Ended June 30, | |||||||||||||||||||||
(In millions) | Food Care | Product Care | Total Company | ||||||||||||||||||
2018 Net Sales | $ | 713.0 | 61.7 | % | $ | 442.2 | 38.3 | % | $ | 1,155.2 | |||||||||||
Price | 9.5 | 1.3 | % | 2.4 | 0.5 | % | 11.9 | 1.0 | % | ||||||||||||
Volume(1) | 16.7 | 2.4 | % | (11.4 | ) | (2.5 | )% | 5.3 | 0.5 | % | |||||||||||
Total organic change (non-U.S. GAAP) | 26.2 | 3.7 | % | (9.0 | ) | (2.0 | )% | 17.2 | 1.5 | % | |||||||||||
Acquisitions | 3.0 | 0.4 | % | 26.4 | 5.9 | % | 29.4 | 2.5 | % | ||||||||||||
Total constant dollar change (non-U.S.GAAP) | 29.2 | 4.1 | % | 17.4 | 3.9 | % | 46.6 | 4.0 | % | ||||||||||||
Foreign currency translation | (31.2 | ) | (4.4 | )% | (9.6 | ) | (2.1 | )% | (40.8 | ) | (3.5 | )% | |||||||||
Total change (U.S. GAAP) | (2.0 | ) | (0.3 | )% | 7.8 | 1.8 | % | 5.8 | 0.5 | % | |||||||||||
2019 Net Sales | $ | 711.0 | 61.2 | % | $ | 450.0 | 38.8 | % | $ | 1,161.0 |
Six Months Ended June 30, | |||||||||||||||||||||
(In millions) | Food Care | Product Care | Total Company | ||||||||||||||||||
2018 Net Sales | $ | 1,409.3 | 61.6 | % | $ | 876.9 | 38.4 | % | $ | 2,286.2 | |||||||||||
Price | 30.5 | 2.1 | % | 6.5 | 0.7 | % | 37.0 | 1.6 | % | ||||||||||||
Volume(1) | 19.5 | 1.4 | % | (30.5 | ) | (3.4 | )% | (11.0 | ) | (0.5 | )% | ||||||||||
Total organic change (non-U.S. GAAP) | 50.0 | 3.5 | % | (24.0 | ) | (2.7 | )% | 26.0 | 1.1 | % | |||||||||||
Acquisitions | 3.0 | 0.3 | % | 52.1 | 5.9 | % | 55.1 | 2.4 | % | ||||||||||||
Total constant dollar change (non-U.S.GAAP) | 53.0 | 3.8 | % | 28.1 | 3.2 | % | 81.1 | 3.5 | % | ||||||||||||
Foreign currency translation | (71.3 | ) | (5.1 | )% | (22.3 | ) | (2.5 | )% | (93.6 | ) | (4.0 | )% | |||||||||
Total change (U.S. GAAP) | (18.3 | ) | (1.3 | )% | 5.8 | 0.7 | % | (12.5 | ) | (0.5 | )% | ||||||||||
2019 Net Sales | $ | 1,391.0 | 61.2 | % | $ | 882.7 | 38.8 | % | $ | 2,273.7 |
(1) | Our volume reported above includes the net impact of changes in unit volume as well as the period-to-period change in the mix of products sold. |
• | higher volume of $17 million, primarily in North America; |
• | favorable price impact of $9 million, primarily in South America driven by US dollar-based indexed price, partially offset in North America; and |
• | contributions from acquisition activity of $3 million. |
• | favorable price impact of $30 million, primarily in South America, driven by US dollar-based indexed pricing; |
• | higher volume of $20 million, particularly in North America with positive volume trends also in South America and APAC, slightly offset by EMEA; and |
• | contributions from acquisition activity of $3 million. |
• | $26 million related to an increase in sales due to the AFP acquired business; and |
• | favorable price impact of $2 million, primarily in North America. |
• | lower volume of $11 million across all regions. |
• | $52 million related to an increase in sales due to the AFP acquired business; and |
• | favorable price impact of $7 million, primarily in North America. |
• | lower volume of $31 million, primarily in North America and APAC. |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||
(In millions) | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Net sales | $ | 1,161.0 | $ | 1,155.2 | 0.5 | % | $ | 2,273.7 | $ | 2,286.2 | (0.5 | )% | ||||||||||
Cost of sales | 782.7 | 791.7 | (1.1 | )% | 1,530.2 | 1,548.7 | (1.2 | )% | ||||||||||||||
As a % of net sales | 67.4 | % | 68.5 | % | 67.3 | % | 67.7 | % |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||
(In millions) | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Selling, general and administrative expenses | $ | 266.2 | $ | 192.8 | 38.1 | % | $ | 478.3 | $ | 386.8 | 23.7 | % | ||||||||||
As a % of net sales | 22.9 | % | 16.7 | % | 21.0 | % | 16.9 | % |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||
(In millions) | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Amortization expense of intangible assets acquired | $ | 4.4 | $ | 3.4 | 29.4 | % | $ | 9.0 | $ | 7.3 | 23.3 | % | ||||||||||
As a % of net sales | 0.4 | % | 0.3 | % | 0.4 | % | 0.3 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
(In millions) | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Interest expense on our various debt instruments: | ||||||||||||||||||||||||
Term Loan A due July 2023(1) | $ | 2.1 | $ | 2.4 | $ | (0.3 | ) | $ | 4.3 | $ | 4.7 | $ | (0.4 | ) | ||||||||||
Revolving credit facility due July 2023(1) | 0.3 | 0.6 | (0.3 | ) | 0.7 | 1.2 | (0.5 | ) | ||||||||||||||||
6.50% Senior Notes due December 2020 | 7.1 | 7.0 | 0.1 | 14.1 | 14.0 | 0.1 | ||||||||||||||||||
4.875% Senior Notes due December 2022 | 5.4 | 5.3 | 0.1 | 10.8 | 10.7 | 0.1 | ||||||||||||||||||
5.25% Senior Notes due April 2023 | 5.8 | 5.7 | 0.1 | 11.6 | 11.5 | 0.1 | ||||||||||||||||||
4.50% Senior Notes due September 2023 | 5.2 | 5.4 | (0.2 | ) | 10.4 | 11.1 | (0.7 | ) | ||||||||||||||||
5.125% Senior Notes due December 2024 | 5.6 | 5.6 | — | 11.2 | 11.2 | — | ||||||||||||||||||
5.50% Senior Notes due September 2025 | 5.6 | 5.6 | — | 11.2 | 11.2 | — | ||||||||||||||||||
6.875% Senior Notes due July 2033 | 7.7 | 7.7 | — | 15.5 | 15.5 | — | ||||||||||||||||||
Other interest expense | 4.6 | 4.6 | — | 9.0 | 8.7 | 0.3 | ||||||||||||||||||
Less: capitalized interest | (2.1 | ) | (1.5 | ) | (0.6 | ) | (3.9 | ) | (3.7 | ) | (0.2 | ) | ||||||||||||
Less: interest income | (4.1 | ) | (3.9 | ) | (0.2 | ) | (6.8 | ) | (9.6 | ) | 2.8 | |||||||||||||
Total | $ | 43.2 | $ | 44.5 | $ | (1.3 | ) | $ | 88.1 | $ | 86.5 | $ | 1.6 |
(1) | On July 12, 2018, the Company and certain of its subsidiaries entered into the Third Amended and Restated Credit Agreement. On August 1, 2019, the Company and certain of its subsidiaries entered into amendment No. 2 to the Third Amended and Restated Agreement. See Note 13, "Debt and Credit Facilities," of the Notes to Condensed Consolidated Financial Statements for further details. |
• | The actual mix of earnings by jurisdiction could fluctuate from the Company’s projection; |
• | The tax effects of 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; and |
• | Any future legislative changes, and any related additional tax optimization efforts to address these changes. |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||
(In millions) | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Net earnings (loss) from continuing operations | $ | 25.5 | $ | 83.3 | (69.4 | )% | $ | 89.8 | $ | (124.7 | ) | (172.0 | )% |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||
(In millions) | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Food Care | $ | 155.6 | $ | 135.4 | 14.9 | % | $ | 298.5 | $ | 270.1 | 10.5 | % | ||||||||||
Adjusted EBITDA Margin | 21.9 | % | 19.0 | % | 21.5 | % | 19.2 | % | ||||||||||||||
Product Care | 84.0 | 78.5 | 7.0 | % | 159.0 | 156.9 | 1.3 | % | ||||||||||||||
Adjusted EBITDA Margin | 18.7 | % | 17.8 | % | 18.0 | % | 17.9 | % | ||||||||||||||
Corporate | (2.9 | ) | 3.6 | (180.6 | )% | (5.0 | ) | (4.7 | ) | 6.4 | % | |||||||||||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations | $ | 236.7 | $ | 217.5 | 8.8 | % | $ | 452.5 | $ | 422.3 | 7.2 | % | ||||||||||
Adjusted EBITDA Margin | 20.4 | % | 18.8 | % | 19.9 | % | 18.5 | % |
• | Price cost spread of $8 million and restructuring savings of $10 million both of which benefited from our Reinvent SEE actions; and |
• | Business growth including $6 million from higher volume. |
• | Price cost spread of $26 million and restructuring savings of $17 million, both of which benefited from our Reinvent SEE actions; and |
• | Business growth including $6 million from higher volume. |
• | Higher operating costs of $7 million, including labor inflation and investment in the business as well as benefits from our Reinvent SEE actions. |
• | Price cost spread of $11 million and restructuring savings of $7 million, both of which benefited from our Reinvent SEE actions; and |
• | Contributions from recent acquisitions of $1 million. |
• | Higher operating costs of $8 million including labor inflation, investment in the business, and non-material manufacturing costs as well as benefits from our Reinvent SEE actions; and |
• | lower volume of $4 million, primarily driven by economic headwinds, particularly in the industrial sector. |
• | Price cost spread of $15 million and restructuring savings of $11 million, both benefited from our Reinvent SEE actions; and |
• | Contributions from recent acquisitions of $1 million. |
• | Higher operating costs of $9 million, including labor inflation, investment in the business, and non-material manufacturing costs as well as benefits from our Reinvent SEE actions; and |
• | lower volume of $12 million, primarily driven by economic headwinds, particularly in the industrial sector. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net earnings (loss) from continuing operations | $ | 25.5 | $ | 83.3 | $ | 89.8 | $ | (124.7 | ) | |||||||
Interest expense, net | 43.2 | 44.5 | 88.1 | 86.5 | ||||||||||||
Income tax provision | 12.3 | 33.5 | 42.7 | 355.0 | ||||||||||||
Depreciation and amortization, net of adjustments(1) | 38.0 | 40.7 | 78.2 | 80.9 | ||||||||||||
Special Items: | ||||||||||||||||
Restructuring charges(2) | 29.3 | 7.1 | 36.7 | 15.7 | ||||||||||||
Other restructuring associated costs(3) | 21.3 | (0.4 | ) | 38.0 | 1.8 | |||||||||||
Foreign currency exchange loss due to highly inflationary economies | 1.3 | — | 2.1 | — | ||||||||||||
Charges related to the Novipax settlement agreement | 59.0 | — | 59.0 | — | ||||||||||||
(Income) charges related to acquisition and divestiture activity | (0.5 | ) | 7.0 | 3.2 | 17.8 | |||||||||||
Loss (gain) from class-action litigation settlement | — | 0.1 | — | (12.6 | ) | |||||||||||
Other Special Items(4) | 7.3 | 1.7 | 14.7 | 1.9 | ||||||||||||
Pre-tax impact of Special Items | 117.7 | 15.5 | 153.7 | 24.6 | ||||||||||||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations | $ | 236.7 | $ | 217.5 | $ | 452.5 | $ | 422.3 |
(1) | Depreciation and amortization by segment is as follows: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Food Care | $ | 25.0 | $ | 27.2 | $ | 51.2 | $ | 54.1 | ||||||||
Product Care | 13.1 | 13.6 | 28.0 | 27.1 | ||||||||||||
Total Company depreciation and amortization(i) | 38.1 | 40.8 | 79.2 | 81.2 | ||||||||||||
Depreciation and amortization adjustments | (0.1 | ) | (0.1 | ) | (1.0 | ) | (0.3 | ) | ||||||||
Depreciation and amortization, net of adjustments | $ | 38.0 | $ | 40.7 | $ | 78.2 | $ | 80.9 |
(i) | Includes share-based incentive compensation of $5 million and $13 million for the three and six months ended June 30, 2019, respectively, and $8 million and $15 million for the three and six months ended June 30, 2018, respectively. |
(2) | Restructuring charges by segment were as follows: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Food Care | $ | 18.6 | $ | 1.5 | $ | 22.4 | $ | 6.1 | ||||||||
Product Care | 10.7 | 5.6 | 14.3 | 9.6 | ||||||||||||
Total Company restructuring charges | $ | 29.3 | $ | 7.1 | $ | 36.7 | $ | 15.7 |
(3) | Other restructuring associated costs for three and six months ended June 30, 2019, primarily relate to fees paid to third-party consultants in support of Reinvent SEE and costs related to property consolidations resulting from Reinvent SEE. |
(4) | Other Special Items for the three and six months ended June 30, 2019, primarily included fees related to professional services. |
(In millions) | June 30, 2019 | December 31, 2018 | ||||||
Cash and cash equivalents | $ | 222.2 | $ | 271.7 |
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) | June 30, 2019 | December 31, 2018 | ||||||
Short-term borrowings | $ | 265.3 | $ | 232.8 | ||||
Current portion of long-term debt | 31.6 | 4.9 | ||||||
Total current debt | 296.9 | 237.7 | ||||||
Total long-term debt, less current portion(1) | 3,291.7 | 3,236.5 | ||||||
Total debt | 3,588.6 | 3,474.2 | ||||||
Less: Cash and cash equivalents | (222.2 | ) | (271.7 | ) | ||||
Net Debt | $ | 3,366.4 | $ | 3,202.5 |
(1) | Amounts are net of unamortized discounts and debt issuance costs of $22 million as June 30, 2019 and $24 million as of December 31, 2018. |
Six Months Ended June 30, | ||||||||
(In millions) | 2019 | 2018 | ||||||
Net cash provided by operating activities | $ | 169.3 | $ | 36.6 | ||||
Net cash used in investing activities | (124.4 | ) | (80.8 | ) | ||||
Net cash used in financing activities | (98.2 | ) | (362.7 | ) | ||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | 3.8 | (7.0 | ) |
Six Months Ended June 30, | ||||||||||||
(In millions) | 2019 | 2018 | Change | |||||||||
Cash flow provided by operating activities | $ | 169.3 | $ | 36.6 | $ | 132.7 | ||||||
Capital expenditures | (94.5 | ) | (73.7 | ) | (20.8 | ) | ||||||
Free cash flow(1) | $ | 74.8 | $ | (37.1 | ) | $ | 111.9 |
(1) | Free cash flow was $(5) million in the six months ended June 30, 2018 excluding the payment of charges related to the sale of Diversey and efforts to address related stranded costs of $33 million. |
• | $91 million of net earnings, as well as $90 million of non-cash adjustments to reconcile net earnings to net cash provided by operating activities primarily including depreciation and amortization, share-based incentive compensation expenses and profit sharing expenses; and |
• | $52 million of changes in other liabilities and assets balances. This activity reflects timing of accrued liabilities including accrued restructuring, taxes payable and various other liabilities including the accrued settlement to Novipax. |
• | $63 million of changes in working capital, including an increase in inventory reflecting the timing of raw material purchases as well as a decrease to accounts payable. |
• | $73 million change in tax payable/receivable balances. This activity reflects an increase of provisional tax expense for the one-time tax on unrepatriated foreign earnings pursuant to the TCJA. |
• | $86 million of net loss, which was offset by $122 million of non-cash adjustments to reconcile net earnings to net cash provided by operating activities, primarily attributable to an increase in deferred taxes, depreciation and amortization, share-based incentive compensation expenses and profit sharing expenses; |
• | $58 million of changes in working capital, 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; and |
• | $14 million of changes in other liabilities and assets. This activity primarily reflects a one-time payment in lieu of certain future royalty payments and the timing of incentive compensation payments. |
• | capital expenditures of $95 million; |
• | $23 million for acquisition activity during the quarter; and |
• | $7 million related to settlements of foreign currency forward contracts and other investing activity. |
• | capital expenditures of $74 million; |
• | an increase in cost method investments of $8 million; and |
• | $8 million related to proceeds from the sale of businesses and working capital adjustments for acquisitions. |
• | repurchases of common stock of $67 million; |
• | payments of quarterly dividends of $50 million; and |
• | netting of common stock for tax withholding obligations relating to stock-based compensation of $11 million. |
• | an increase in net proceeds from borrowings of $29 million primarily due to draws on our local lines of credit for use of working capital as well as new lease activity. |
• | repurchases of common stock of $408 million; |
• | payments of quarterly dividends of $54 million; and |
• | acquisition of common stock for tax withholding obligations relating to stock-based compensation of $6 million. |
• | an increase in borrowings of $106 million primarily due to an increase in borrowings under our accounts receivable securitization programs. |
(In millions) | June 30, 2019 | December 31, 2018 | Change | |||||||||
Working capital (current assets less current liabilities) | $ | (10.8 | ) | $ | 66.2 | $ | (77.0 | ) | ||||
Current ratio (current assets divided by current liabilities) | 1.0x | 1.0x | ||||||||||
Quick ratio (current assets, less inventories divided by current liabilities) | 0.6x | 0.7x |
• | a decrease in cash and cash equivalents of $50 million related primarily to investing and financing activities, including the payment of dividends and repurchases of our common stock, partially offset by cash generated from operations; |
• | an increase in current portion of long-term debt of $27 million and short-term borrowings of $33 million due to the recognition of operating leases resulting from the adoption of ASU 2016-02 and a net increase in borrowings under our revolving credit facility and accounts receivable securitization programs; and |
• | an increase in other current liabilities of $32 million, reflecting the timing of accrued liabilities including the accrued settlement payment to Novipax, taxes payable and various other liabilities. |
• | an increase in inventories, net of $51 million due to the timing of inventory purchases and an inventory stock build to meet forecasted demand as well as an increase in safety stock |
• | net earnings of $91 million; |
• | stock issued for profit sharing contribution paid in stock of $22 million; |
• | miscellaneous less material impacts including cumulative translation adjustment of $6 million, effect of share-based incentive compensation of $3 million, recognition of pension items, net of taxes of $2 million and unrealized gains on derivative instruments of $1 million. |
• | a net increase in shares held in treasury of $67 million; and |
• | dividends paid and accrued on our common stock of $50 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 | ||||||||||
(a) | (b) | (c) | (d) | |||||||||||
Balance as of March 31, 2019 | $ | 757,246,697 | ||||||||||||
April 1, 2019 through April 30, 2019 | 9,194 | $ | — | — | 757,246,697 | |||||||||
May 1, 2019 through May 31, 2019 | 1,166,362 | $ | 42.98 | 1,154,047 | 707,648,181 | |||||||||
June 1, 2019 through June 30, 2019 | 12,310 | $ | — | — | 707,648,181 | |||||||||
Total | 1,187,866 | 1,154,047 | $ | 707,648,181 |
(1) | On July 9, 2015, the Board of Directors authorized a stock repurchase program to repurchase up to $1.5 billion of the Company’s issued and outstanding common stock. This program replaced the previous stock repurchase program approved in August 2007. On March 25, 2017, the Board of Directors authorized up to an additional $1.5 billion of repurchases of the Company’s outstanding common stock under such program. Additionally, on May 2, 2018, the Board of Directors increased the share repurchase program authorization to $1.0 billion. This new program has no expiration date and replaced the previous authorizations. We from time to time acquire shares by means of (i) open market transactions, including through plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and privately negotiated transactions, including accelerated share repurchase programs, pursuant to our publicly announced program described above, (ii) shares withheld from awards under our Omnibus Incentive Plan pursuant to the provision thereof that permits tax withholding obligations or other legally required charges to be satisfied by having us withhold shares from an award under that plan and (iii) 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. |
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) | ||||||||||
April 2019 | 2,016 | $ | 45.95 | 7,178 | 9,194 | ||||||||
May 2019 | 1,262 | $ | 46.62 | 11,053 | 12,315 | ||||||||
June 2019 | 2,658 | $ | 45.65 | 9,652 | 12,310 | ||||||||
Total | 5,936 | 27,883 | 33,819 |
Exhibit Number | Description | |
3.1 | ||
3.2 | ||
10.1 | ||
10.2 | ||
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: August 2, 2019 | By: | /s/ James M. Sullivan | |
James M. Sullivan | |||
Chief Financial Officer |
Page | |||
ARTICLE 1 Definitions | 1 | ||
1.1 | Definitions. | 1 | |
1.2 | Accounting Terms. | 2 | |
ARTICLE 2 Purchase and Sale | 2 | ||
2.1 | Purchase and Sale. | 2 | |
2.2 | Purchase Price. | 2 | |
2.3 | Estimated Purchase Price; Payments at the Closing. | 2 | |
2.4 | Post-Closing Adjustment. | 4 | |
2.5 | Consent to Transactions. | 8 | |
2.6 | Required Withholding. | 8 | |
ARTICLE 3 Representations and Warranties Concerning the Transaction | 9 | ||
3.1 | Organization, Authority; Capacity and Representation. | 9 | |
3.2 | Ownership of Shares. | 10 | |
3.3 | Execution and Delivery; Enforceability. | 10 | |
3.4 | Noncontravention. | 10 | |
3.5 | Legal Proceedings. | 11 | |
3.6 | Brokerage. | 11 | |
3.7 | No Additional Representations. | 11 | |
ARTICLE 4 Representations and Warranties Concerning the Acquired Companies | 12 | ||
4.1 | Organization and Good Standing; Authority; Enforceability. | 12 | |
4.2 | Capitalization. | 13 | |
4.3 | Other Ventures. | 14 | |
4.4 | Noncontravention. | 14 | |
4.5 | Financial Statements. | 15 | |
4.6 | Absence of Certain Changes or Events. | 17 | |
4.7 | Taxes. | 19 | |
4.8 | Employees. | 21 | |
4.9 | Employee Benefit Plans and Other Compensation Arrangements. | 23 | |
4.10 | Permits; Compliance with Laws. | 27 | |
4.11 | Real and Personal Properties. | 28 | |
4.12 | Intellectual Property. | 29 | |
4.13 | Contracts. | 32 | |
4.14 | Litigation | 34 | |
4.15 | Insurance. | 35 | |
4.16 | Environmental Matters. | 35 | |
4.17 | Related Party Transactions. | 36 | |
4.18 | Product Warranty. | 36 | |
4.19 | Material Customers and Suppliers. | 37 | |
4.20 | Brokerage. | 37 | |
4.21 | Trade Regulation. | 37 | |
4.22 | Privacy and Security | 38 | |
4.23 | No Additional Representations. | 39 | |
ARTICLE 5 Representations and Warranties of Buyer | 40 | ||
5.1 | Organization; Authorization. | 40 | |
5.2 | Execution and Delivery; Enforceability. | 40 |
5.3 | Noncontravention. | 40 | |
5.4 | Investment Intent; Restricted LLC Interests. | 41 | |
5.5 | Sufficiency of Funds. | 41 | |
5.6 | Solvency. | 42 | |
5.7 | Brokerage. | 42 | |
5.8 | Due Diligence Investigation. | 42 | |
ARTICLE 6 Conditions Precedent | 42 | ||
6.1 | Conditions to Buyer’s Obligation. | 42 | |
6.2 | Conditions to the Seller Parties’ Obligation. | 45 | |
6.3 | Frustration of Closing Conditions. | 47 | |
ARTICLE 7 The Closing | 47 | ||
ARTICLE 8 Additional Covenants and Agreements | 48 | ||
8.1 | Pre-Closing Covenants and Agreements. | 48 | |
8.2 | Miscellaneous Covenants. | 52 | |
8.3 | No Shop. | 57 | |
8.4 | Seller Release. | 57 | |
8.5 | Acquired Company Engagements; Privileged Information. | 58 | |
8.6 | Employee and Employee Benefit Matters. | 59 | |
8.7 | Confidentiality. | 63 | |
ARTICLE 9 Tax Matters | 63 | ||
9.1 | Apportionment of Taxes. | 63 | |
9.2 | Tax Returns. | 64 | |
9.3 | Controversies. | 65 | |
9.4 | Cooperation. | 66 | |
9.5 | Allocation of Purchase Price. | 66 | |
9.6 | Transfer Taxes. | 67 | |
9.7 | Tax Sharing Agreements. | 67 | |
ARTICLE 10 Certain Definitions | 67 | ||
ARTICLE 11 Construction; Miscellaneous Provisions | 82 | ||
11.1 | No Survival. | 82 | |
11.2 | Notices. | 83 | |
11.3 | Entire Agreement. | 85 | |
11.4 | Modification. | 85 | |
11.5 | Jurisdiction and Venue. | 85 | |
11.6 | Enforcement. | 85 | |
11.7 | Binding Effect. | 86 | |
11.8 | Headings. | 86 | |
11.9 | Number and Gender; Inclusion; Interpretation. | 86 | |
11.10 | Counterparts. | 87 | |
11.11 | Third Parties. | 87 | |
11.12 | Disclosure Letter and Exhibits. | 87 | |
11.13 | Construction. | 88 | |
11.14 | Governing Law. | 88 | |
11.15 | Non-Recourse. | 88 | |
11.16 | No Assignments. | 88 | |
EXHIBITS: | |||
Exhibit A: | Working Capital Calculation |
Exhibit B: | Form of Escrow Agreement | ||
Exhibit C: | Representation and Warranty Policy |
(a) | Five Hundred Ten Million Dollars ($510,000,000); |
(b) | plus an amount equal to the Closing Cash; |
(c) | minus an amount equal to the Closing Indebtedness; |
(d) | plus the amount, if any, by which the Closing Working Capital exceeds the Working Capital Target, or minus the amount, if any, by which the Working Capital Target exceeds the Closing Working Capital; |
(e) | minus an amount equal to the Transaction Bonuses; and |
(f) | minus an amount equal to the Selling Expenses. |
(b) | If to Sellers’ Representative or the Seller Parties or any Seller Party: |
(c) | If to the Company (prior to the Closing): |
By: | /S/ William G. Stiehl | |
Name: | William G. Stiehl | |
Its: | Senior Vice President and Chief Financial Officer |
By: | /S/ Cliff A. Brehm | |
Name: | Cliff A. Brehm | |
Its: | President |
By: | /S/ David E. Goessler | |
Name: | David E. Goessler | |
Its: | Treasurer |
By: | /S/ Bernard Lerner | |
Bernard Lerner, Trustee |
By: | /S/ Roy A. Krall | |
Roy A. Krall, Trustee |
By: | /S/ Roy A. Krall | |
Roy A. Krall, Trustee |
By: | /S/ Matthew A. Lerner | |
Matthew A. Lerner, Trustee |
By: | /S/ Daryl D. Manzetti | |
Daryl D. Manzetti, Trustee |
By: | /S/ Daryl D. Manzetti | |
Daryl D. Manzetti, Trustee |
By: | /S/ Matthew A. Lerner | |
Matthew A. Lerner, Trustee |
By: | /S/ Matthew A. Lerner | |
Matthew A. Lerner, Trustee |
By: | /S/ Thomas Dunlap | |
Thomas Dunlap, Trustee |
By: | /S/ Thomas Dunlap | |
Thomas Dunlap, Trustee |
By: | /S/ Daryl D. Manzetti | |
Daryl D. Manzetti, Trustee |
By: | /S/ Clifford A. Brehm | |
Clifford A. Brehm, Trustee |
By: | /S/ Nels Carlson | |
Name: | Nels Carlson | |
Its: | Managing Director |
/S/ Thomas J. Dunlap | ||
Thomas J. Dunlap |
/S/ Jessica Lerner | ||
Jessica Lerner |
/S/ David Lerner | ||
David Lerner |
/S/ Maia Dunlap | ||
Maia Dunlap |
/S/ Eliana Dunlap | ||
Eliana Dunlap |
By: | /S/ David E. Goessler | |
Name: | David E. Goessler | |
Its: | Treasurer |
/S/ EDWARD L. DOHENY II |
Edward L. Doheny II |
President and Chief Executive Officer |
/S/ JAMES M. SULLIVAN |
James M. Sullivan |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /S/ EDWARD L. DOHENY II | ||
Edward L. Doheny II | |||
President and Chief Executive Officer | |||
Date: August 2, 2019 | |||
By: | /S/ JAMES M. SULLIVAN | ||
James M. Sullivan | |||
Chief Financial Officer | |||
Date: August 2, 2019 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9.9 | $ 9.1 |
Inventory reserves | $ 22.2 | $ 18.1 |
Preferred stock, par value per share (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value per share (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 231,655,982 | 231,619,037 |
Common stock, shares outstanding (in shares) | 154,546,260 | 155,654,370 |
Common stock in treasury, shares (in shares) | 77,109,722 | 75,964,667 |
Condensed Consolidated Statements of Stockholders' Deficit (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
May 16, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Stockholders' Equity [Abstract] | |||||
Dividends per share common stock (in dollars per share) | $ 0.16 | $ 160,000.00 | $ 160,000.00 | $ 320,000.00 | $ 320,000.00 |
Organization and Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization We are a global leader in food safety and security and product protection. We serve an array of end markets including food and beverage processing, food service, retail and commercial and consumer applications. Our focus is on achieving quality profitable growth and increased earnings power through partnering with our customers to provide innovative, sustainable packaging solutions that solve their most complex packaging problems and create differential value for them. We do so through our iconic brands, differentiated technologies, leading market positions, global scale and market access and well-established customer relationships. We conduct substantially all of our business through two wholly-owned subsidiaries, Cryovac, LLC and Sealed Air Corporation (US). Throughout this report, when we refer to “Sealed Air,” the “Company,” “we,” “our,” or “us,” we are referring to Sealed Air Corporation and all of our subsidiaries, except where the context indicates otherwise. Basis of Presentation Our Condensed Consolidated Financial Statements include all of the accounts of the Company and our subsidiaries. We have eliminated all significant intercompany transactions and balances in consolidation. In management’s opinion, all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of our Condensed Consolidated Balance Sheets as of June 30, 2019 and our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018 have been made. The results set forth in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and in our Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. All amounts are in millions, except per share amounts, and approximate due to rounding. Some prior period amounts have been reclassified to conform to the current year presentation. These reclassifications, individually and in the aggregate, did not have a material impact on our condensed consolidated financial condition, results of operations or cash flows. Our Condensed Consolidated Financial Statements were prepared in accordance with the interim reporting requirements of the SEC. As permitted under those rules, annual footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted. The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ from these estimates. We are responsible for the unaudited Condensed Consolidated Financial Statements and notes included in this report. As these are condensed financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (“2018 Form 10-K”) and with the information contained in other publicly-available filings with the SEC. As part of the Company's Reinvent SEE strategy, we have evaluated and made adjustments to our regional operating model. As of January 1, 2019, our Geographic regions are: North America, EMEA, South America and APAC. Our North American operations include Canada, the United States, Mexico and Central America. Mexico and Central America were previously included in Latin America. EMEA consists of Europe, Middle East, Africa and Turkey. APAC refers to our collective Asia Pacific region, including Greater China, India, Southeast Asia, Japan, Korea, Australia and New Zealand. Impact of Inflation and Currency Fluctuation Argentina Economic and political events in Argentina have continued to expose us to heightened levels of foreign currency exchange risk. As of July 1, 2018, Argentina was designated as a highly inflationary economy under U.S. GAAP, and the U.S. dollar replaced the Argentine peso as the functional currency for our subsidiaries in Argentina. All Argentine peso-denominated monetary assets and liabilities were remeasured into U.S. dollars using the current exchange rate available to us, and any changes in the exchange rate are reflected in net foreign exchange transaction loss, within Foreign currency exchange loss due to highly inflationary economies on the Condensed Consolidated Statements of Operations. For the three and six months ended June 30, 2019, the Company recognized a $1.3 million and $2.1 million remeasurement pre-tax loss related to Argentina, respectively.
|
Recently Adopted and Issued Accounting Standards |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Adopted and Issued Accounting Standards | Recently Adopted and Issued Accounting Standards Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842), and issued subsequent amendments to the initial guidance thereafter. This ASU requires an entity to recognize a right-of-use asset (ROU) and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification of the underlying lease as either finance or operating. Similar modifications have been made to lessor accounting in-line with revenue recognition guidance. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard was effective for us on January 1, 2019. Entities are required to adopt ASC 842 using a modified retrospective transition method. Full retrospective transition is prohibited. The guidance permits an entity to apply the standard’s transition provisions at either the beginning of the earliest comparative period presented in the financial statements or the beginning of the period of adoption (i.e., on the effective date). We adopted the new standard on its effective date. The new standard provides several optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient not to separate lease and non-lease components for all of our leases, which means all consideration that is fixed, or in-substance fixed, relating to the non-lease components will be captured as part of our lease components for balance sheet purposes. As of June 30, 2019, we recognized additional operating lease liabilities of $79.1 million with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments for existing operating leases on our Condensed Consolidated Balance Sheets. See Note 4, "Leases," of the Notes to Condensed Consolidated Financial Statements for additional lease disclosures. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. ASU 2018-16 adds the overnight index swap rate based on the Secured Overnight Financing Rate to the list of U.S. benchmark interest rates eligible to be hedged within ASC 815. This ASU names the Secured Overnight Financing Rate as the preferred reference rate alternative to the London Interbank Offered Rate (LIBOR). The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company adopted ASU 2018-16 on January 1, 2019. The adoption did not have an impact on the Company's Condensed Consolidated Financial Results. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. As a result of the U.S. Tax Cuts and Jobs Act ("TCJA"), this ASU was issued to provide entities with the option to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings. The Company elected to early adopt ASU 2018-02 as of October 1, 2018 in which the impact was applied to the period of adoption. As part of the adoption, the Company has elected to reclassify the tax effects of the TCJA from accumulated other comprehensive loss ("AOCL") to retained earnings. The adoption of the ASU 2018-02 resulted in a $13.4 million reclassification from AOCL to retained earnings due to the stranded tax effects of the TCJA which was recorded in the period ended December 31, 2018. The primary AOCL balances which were impacted by the TCJA were unrecognized pension items and unrecognized gains (losses) on derivative instruments. Recently Issued Accounting Standards In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments. ASU 2019-04 provides updates and amendments to previously issued ASUs. The amendments clarify the scope of the credit losses standard and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments. Codification Improvements to Topic 326, Financial Instruments - Credit Losses is effective upon our adoption of ASU 2016-13, which we plan to adopt as of January 1, 2020. The amendment will be included in our overall adoption of ASU 2016-13. The amendments related to Derivatives and Hedging address partial-term fair value hedges and fair value hedge basis adjustments. Codification Improvements to Topic 815, Derivatives and Hedging are effective for us beginning the first annual reporting period beginning after April 25, 2019. Amendments on Topic 825, Financial Instruments mainly address the scope of the guidance, the requirement for remeasurement under ASC 820 when using the measurement alternative, certain disclosure requirements and which equity securities have to be remeasured at historical exchange rates. For amendments related to ASU 2016-01 (Topic 825, Financial Instruments), the effective date is fiscal years and interim period beginning after December 15, 2019, with early adoption permitted. We do not believe that the adoption of ASU 2019-04 will have an impact on the Company's Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 amends ASC 350-40 and aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. We are currently in the process of evaluating the effect that ASU 2018-15 will have on the Company's Condensed Consolidated Financial Results. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 eliminates, adds and clarifies certain disclosure requirements related to defined benefit plans and other postretirement plans. The guidance is effective for fiscal years ending after December 15, 2020, with early adoption permitted for reporting periods for which financial statements have yet to be issued or made available for issuance. We do not believe that the adoption of ASU 2018-14 will have an impact on the Company's Condensed Consolidated Financial Statements with the exception of new and expanded disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 amends the fair value measurement disclosure requirements of ASC 820, including new, eliminated and modified disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted upon the issuance of this ASU, including interim periods for which financial statements have not yet been issued or made available for issuance. If adopted early, entities are permitted to early adopt the eliminated or modified disclosure requirements and delay the adoption of the new disclosure requirements until their effective date. We do not believe that the adoption of ASU 2018-13 will have an impact on the Company's Condensed Consolidated Financial Statements with the exception of new and expanded disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments and issued subsequent amendments to the initial guidance. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. The ASU also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal periods. Entities may adopt earlier as of the fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. We are currently in the process of implementing this new standard update however we do not anticipate this to have a material impact on the Company's Condensed Consolidated Financial Results with the exception of new and expanded disclosure requirements.
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Revenue Recognition, Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition, Contracts with Customers | Revenue Recognition, Contracts with Customers Description of Revenue Generating Activities We employ sales, marketing and customer service personnel throughout the world who sell and market our products and services to and/or through a large number of distributors, fabricators, converters, e-commerce and mail order fulfillment firms, and contract packaging firms as well as directly to end-users such as food processors, food service businesses, supermarket retailers, pharmaceutical companies, healthcare facilities, medical device manufacturers, and other manufacturers. As discussed in Note 6, "Segments," of the Notes to Condensed Consolidated Financial Statements, our reporting segments include: Food Care and Product Care. Our Food Care applications are largely sold directly to end customers, while most of our Product Care products are sold through business supply distributors. Food Care: Food Care largely serves perishable food processors, predominantly in fresh red meat, smoked and processed meats, poultry and dairy (solids and liquids) markets worldwide, and maintains a leading position in its target applications. Food Care provides integrated packaging materials and equipment solutions to provide food safety, shelf life extension, and total cost optimization with innovative, sustainable packaging that enables customers to reduce costs and enhance their brands in the marketplace. Product Care: Product Care packaging solutions are utilized across many global markets and are especially valuable to e-Commerce, electronics and industrial manufacturing. Product Care solutions are designed to protect valuable goods in shipping, and drive operational excellence for our customers, increasing their order fulfillment velocity while minimizing material usage, dimensional weight and packaging labor requirements. The acquisition of Fagerdala in 2017 and AFP in 2018 enabled us to further expand our protective packaging solutions in electronics, transportation and industrial markets with turnkey, custom-engineered, fabricated solutions. Product Care benefits from the continued expansion of e-Commerce, increasing freight costs, scarcity of labor, and increasing demand for more sustainable packaging. Product Care solutions are largely sold through supply distributors that sell to business/industrial end-users. Product Care solutions are additionally sold directly to fabricators, original equipment manufacturers, contract manufacturers, third-party logistics partners, e-commerce/fulfillment operations, and at various retail centers. Product Care solutions are marketed under industry-leading brands including Bubble Wrap® packaging, Cryovac® performance shrink films, Instapak® polyurethane foam packaging systems, and Korrvu® suspension and retention packaging. Adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and subsequent amendments to the initial guidance, collectively, Topic 606. The Company adopted the new revenue recognition standard using the modified retrospective approach with a cumulative effect adjustment to retained earnings as of the adoption date. The adoption of Topic 606 did not have a significant impact on our condensed consolidated financial statements with the exception of new and expanded disclosures. However, reporting periods prior to Topic 606 adoption may not be comparable due to differences between Topic 606 and the previous accounting guidance. Identify Contract with Customer: For Sealed Air, the determination of whether an arrangement meets the definition of a contract under Topic 606 depends on whether it creates enforceable rights and obligations. While enforceability is a matter of law, we believe that enforceable rights and obligations in a contract must be substantive in order for the contract to be in scope of Topic 606. That is, the penalty for noncompliance must be significant relative to the minimum obligation. Fixed or minimum purchase obligations with penalties for noncompliance are the most common examples of substantive enforceable rights present in our contracts. We determined that the contract term is the period of enforceability outlined by the terms of the contract. This means that in many cases, the term stated in the contract is different than the period of enforceability. After the minimum purchase obligation is met, subsequent sales are treated as separate contracts on a purchase order by purchase order basis. If no minimum purchase obligation exists, each purchase order represents the contract. Performance Obligations: The most common goods and services determined to be distinct performance obligations are consumables/materials, equipment sales, and maintenance. Free on loan and leased equipment is typically identified as a separate lease component in scope of Topic 842. The other goods or services promised in the contract with the customer in most cases do not represent performance obligations because they are neither separate nor distinct, or they are not material in the context of the contract. Transaction Price and Variable Consideration: Sealed Air has many forms of variable consideration present in its contracts with customers, including rebates and other discounts. Sealed Air estimates variable consideration using either the expected value method or the most likely amount method as described in the standard. We include in the transaction price some or all of an amount of variable consideration estimated to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For all contracts that contain a form of variable consideration, Sealed Air estimates at contract inception, and periodically throughout the term of the contract, what volume of goods and/or services the customer will purchase in a given period and determines how much consideration is payable to the customer or how much consideration Sealed Air would be able to recover from the customer based on the structure of the type of variable consideration. In most cases the variable consideration in contracts with customers results in amounts payable to the customer by Sealed Air. Sealed Air adjusts the contract transaction price based on any changes in estimates each reporting period and performs an inception to date cumulative adjustment to the amount of revenue previously recognized. When the contract with a customer contains a minimum purchase obligation, Sealed Air only has enforceable rights to the amount of consideration promised in the minimum purchase obligation through the enforceable term of the contract. This amount of consideration, plus any variable consideration, makes up the transaction price for the contract. Charges for rebates and other allowances are recognized as a deduction from revenue on an accrual basis in the period in which the associated revenue is recorded. When we estimate our rebate accruals, we consider customer-specific contractual commitments including stated rebate rates and history of actual rebates paid. Our rebate accruals are reviewed at each reporting period and adjusted to reflect data available at that time. We adjust the accruals to reflect any differences between estimated and actual amounts. These adjustments of transaction price impact the amount of net sales recognized by us in the period of adjustment. Revenue recognized in the three and six months ended June 30, 2019 from performance obligations satisfied in previous reporting periods was $0.7 million and $1.8 million, respectively, and $1.6 million and $3.3 million in the three and six months ended June 30, 2018, respectively. The Company does not adjust consideration in contracts with customers for the effects of a significant financing component if the Company expects that the period between transfer of a good or service and payment for that good or service will be one year or less. This is expected to be the case for the majority of contracts. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales on the Condensed Consolidated Statements of Operations. Allocation of Transaction Price: Sealed Air determines the standalone selling price for a performance obligation by first looking for observable selling prices of that performance obligation sold on a standalone basis. If an observable price is not available, we estimate the standalone selling price of the performance obligation using one of the three suggested methods in the following order of preference: adjusted market assessment approach, expected cost plus a margin approach, and residual approach. Sealed Air often offers rebates to customers in their contracts that are related to the amount of consumables purchased. We believe that this form of variable consideration should only be allocated to consumables because the entire amount of variable consideration relates to the customer’s purchase of and Sealed Air’s efforts to provide consumables. Additionally, Sealed Air has many contracts that have pricing tied to third-party indices. We believe that variability from index-based pricing should be allocated specifically to consumables because the pricing formulas in these contracts are related to the cost to produce consumables. Transfer of Control: Revenue is recognized upon transfer of control to the customer. Revenue for consumables and equipment sales is recognized based on shipping terms, which is the point in time the customer obtains control of the promised goods. Maintenance revenue is recognized straight-line on the basis that the level of effort is consistent over the term of the contract. Lease components within contracts with customers are recognized in accordance with Topic 842. Disaggregated Revenue For the three and six months ended June 30, 2019 and 2018, revenues from contracts with customers summarized by Segment and Geographic region were as follows:
Contract Balances The time between when a performance obligation is satisfied and when billing and payment occur is closely aligned, with the exception of equipment accruals. An equipment accrual is a contract offering, whereby a customer is incentivized to use a portion of the consumables transaction price 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, resulting in a contract liability (unearned revenue). The closing balances of contract liabilities arising from contracts with customers as of June 30, 2019 and December 31, 2018 were as follows:
Revenue recognized in the three and six months ended June 30, 2019 that was included in the contract liability balance at the beginning of the period was $0.9 million and $1.7 million, respectively, and $2.3 million and $3.0 million in the three and six months ended June 30, 2018, respectively. This revenue was driven primarily by equipment performance obligations being satisfied. The contract liability balance represents deferred revenue, primarily related to equipment accruals. The increase in 2019 and 2018 to deferred revenue was driven by new contracts recently entered into and volume on existing agreements. Remaining Performance Obligations Our enforceable contractual obligations tend to be short term in nature, and the following table does not include the transaction price of any remaining performance obligations that are part of the contracts with expected durations of less than one year. Additionally, the following table summarizes the estimated transaction price from contracts with customers allocated to performance obligations or portions of performance obligations that have not yet been satisfied as of June 30, 2019, as well as the expected timing of recognition of that transaction price.
Assets recognized for the costs to obtain or fulfill a contract The Company recognizes incremental costs to fulfill a contract as an asset if such incremental costs are expected to be recovered, relate directly to a contract or anticipated contract, and generate or enhance resources that will be used to satisfy performance obligations in the future. The Company recognizes incremental costs to obtain a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. For example, the Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. Costs for shipping and handling activities performed after a customer obtains control of a good are accounted for as costs to fulfill a contract and are included in cost of goods sold.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Lessor Sealed Air has contractual obligations as a lessor with respect to free on loan equipment and leased equipment, both sales-type and operating. The consideration in a contract that contains both lease and non-lease components is allocated based on the standalone selling price. Our contractual obligations for operating leases can include termination and renewal options. Our contractual obligations for sales-type leases tend to have fixed terms and can include purchase options. We utilize the reasonably certain threshold criteria in determining which options our customers will exercise. All lease payments are primarily fixed in nature and therefore captured in the lease receivable. Our lease receivable balance at June 30, 2019 was:
Lessee Sealed Air has contractual obligations as a lessee with respect to warehouses, offices, and manufacturing facilities, IT equipment, automobiles, and material production equipment. Under the leasing standard, ASU 2016-02, leases that are more than one year in duration are capitalized and recorded on the balance sheet. Some of our leases, namely for automobiles and real estate, offer an option to extend the term of such leases. We utilize the reasonably certain threshold criteria in determining which options we will exercise. Furthermore, some of our lease payments are based on index rates with minimum annual increases. These represent fixed payments and are captured in the future minimum lease payments calculation. In determining the discount rate to use in calculating the present value of lease payments, we estimate the rate of interest we would pay on a collateralized loan with the same payment terms as the lease by utilizing our bond yields traded in the secondary market to determine the estimated cost of funds for the particular tenor. We update our assumptions and discount rates on a quarterly basis. The standard also provides practical expedients for an entity’s transition and ongoing accounting. In terms of transition accounting, we elected the ‘package of practical expedients’, which permits us to not reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. In terms of ongoing accounting, we have elected to use the short-term lease recognition exemption for all asset classes. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets. We have also elected the practical expedient to not separate lease and non-lease components for all asset classes, meaning all consideration that is fixed, or in-substance fixed, will be captured as part of our lease components for balance sheet purposes. Furthermore, all variable payments included in lease agreements will be disclosed as variable lease expense when incurred. Generally, variable lease payments are based on usage and common area maintenance. These payments will be included as variable lease expense when recognized. The following table details our lease obligations included in our Condensed Consolidated Balance Sheets.
At June 30, 2019, estimated future minimum annual rental commitments under non-cancelable real and personal property leases were as follows:
The following lease cost is included in our Condensed Consolidated Statements of Operations:
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Leases | Leases Lessor Sealed Air has contractual obligations as a lessor with respect to free on loan equipment and leased equipment, both sales-type and operating. The consideration in a contract that contains both lease and non-lease components is allocated based on the standalone selling price. Our contractual obligations for operating leases can include termination and renewal options. Our contractual obligations for sales-type leases tend to have fixed terms and can include purchase options. We utilize the reasonably certain threshold criteria in determining which options our customers will exercise. All lease payments are primarily fixed in nature and therefore captured in the lease receivable. Our lease receivable balance at June 30, 2019 was:
Lessee Sealed Air has contractual obligations as a lessee with respect to warehouses, offices, and manufacturing facilities, IT equipment, automobiles, and material production equipment. Under the leasing standard, ASU 2016-02, leases that are more than one year in duration are capitalized and recorded on the balance sheet. Some of our leases, namely for automobiles and real estate, offer an option to extend the term of such leases. We utilize the reasonably certain threshold criteria in determining which options we will exercise. Furthermore, some of our lease payments are based on index rates with minimum annual increases. These represent fixed payments and are captured in the future minimum lease payments calculation. In determining the discount rate to use in calculating the present value of lease payments, we estimate the rate of interest we would pay on a collateralized loan with the same payment terms as the lease by utilizing our bond yields traded in the secondary market to determine the estimated cost of funds for the particular tenor. We update our assumptions and discount rates on a quarterly basis. The standard also provides practical expedients for an entity’s transition and ongoing accounting. In terms of transition accounting, we elected the ‘package of practical expedients’, which permits us to not reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. In terms of ongoing accounting, we have elected to use the short-term lease recognition exemption for all asset classes. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets. We have also elected the practical expedient to not separate lease and non-lease components for all asset classes, meaning all consideration that is fixed, or in-substance fixed, will be captured as part of our lease components for balance sheet purposes. Furthermore, all variable payments included in lease agreements will be disclosed as variable lease expense when incurred. Generally, variable lease payments are based on usage and common area maintenance. These payments will be included as variable lease expense when recognized. The following table details our lease obligations included in our Condensed Consolidated Balance Sheets.
At June 30, 2019, estimated future minimum annual rental commitments under non-cancelable real and personal property leases were as follows:
The following lease cost is included in our Condensed Consolidated Statements of Operations:
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Divestitures and Acquisitions |
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Divestitures and Acquisitions | Divestitures and Acquisitions Divestitures Embalagens Ltda. On August 1, 2017, we entered into an agreement to sell our polystyrene food tray business in Guarulhos, Brazil for a gross purchase price of R$26.9 million (or $8.2 million as of the closing date of March 19, 2018). The purchase price was subject to working capital, cash and debt adjustments, which were finalized in the fourth quarter of 2018 for R$1.6 million (or $0.4 million). For the three and six months ended June 30, 2018, the Company recognized an immaterial net loss and a net gain on the sale of $1.0 million, respectively, within other income (expense), net on the Condensed Consolidated Statements of Operations. Acquisitions Automated Packaging Systems, Inc. On May 1, 2019, the Company announced it signed a definitive agreement to acquire Automated Packaging Systems, Inc. (APS), a leading manufacturer of high-reliability, automated bagging systems, for $510.0 million, net of cash acquired and debt assumed. Approximately $60 million of the $510 million purchase price will be paid to APS’s European employees in accordance with a deferred incentive compensation plan. The transaction closed on August 1, 2019. Other Activity During the second quarter of 2019, Food Care had acquisition activity resulting in a total purchase price paid of $23.4 million. The Company allocated the consideration transferred to the fair value of assets acquired and liabilities assumed, resulting in an allocation to goodwill of $6.0 million for the acquisition activity. Identifiable intangible assets acquired were not material. AFP, Inc. On August 1, 2018, the Company acquired AFP, Inc., a leading, privately held fabricator of foam, corrugated, molded pulp and wood packaging solutions, to join its Product Care division. This acquisition further expands our protective packaging solutions in the electronics, transportation and industrial markets with custom-engineered applications. We acquired 100% of AFP shares for an estimated consideration of $74.1 million, excluding cash acquired of $3.3 million. The following table summarizes the consideration transferred to acquire AFP and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed.
The following tables summarizes the identifiable intangible assets, net and their useful life.
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Segments |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments The Company’s segment reporting structure consists of two reportable segments and a Corporate category as follows:
The Company’s Food Care and Product Care segments are considered reportable segments under FASB ASC Topic 280. Our reportable segments are aligned with similar groups of products and management team. Corporate includes certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate overhead costs, including administrative functions and cost recovery variances not allocated to the reportable segments from global functional expenses. The Company evaluates performance of the reportable segments based on the results of each segment. The Company allocates expense to each segment based on various factors including direct usage of resources, allocation of headcount, allocation of software licenses or, in cases where costs are not clearly delineated, costs may be allocated on portion of either net trade sales or an expense factor such as cost of goods sold. We allocate and disclose depreciation and amortization expense to our segments, although depreciation and amortization are not included in the segment performance metric Adjusted EBITDA. We also allocate and disclose restructuring charges and impairment of goodwill and other intangible assets by segment, although they are not included in the segment performance metric Adjusted EBITDA since restructuring charges and impairment of goodwill and other intangible assets are categorized as Special Items. The accounting policies of the reportable segments and Corporate are the same as those applied to the Condensed Consolidated Financial Statements. Refer to "Non-U.S. GAAP Information" for additional details on the use and calculation of our non-U.S. GAAP measures presented below. The following tables show Net Sales and Adjusted EBITDA by reportable segment:
The following table shows a reconciliation of net earnings (loss) from continuing operations to non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations:
Assets by Reportable Segments The following table shows assets allocated by reportable segment. Assets allocated by reportable segment include: trade receivables, net; inventory, net; property and equipment, net; goodwill; intangible assets, net; and leased systems, net.
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Inventories, net |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, net | Inventories, net The following table details our inventories, net:
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Property and Equipment, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, net | Property and Equipment, net The following table details our property and equipment, net:
The following table details our interest cost capitalized and depreciation and amortization expense for property and equipment.
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Goodwill and Identifiable Intangible Assets, net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Identifiable Intangible Assets, net | Goodwill and Identifiable Intangible Assets, net Goodwill The following table shows our goodwill balances by reportable segment. We review goodwill for impairment on a reporting unit basis annually during the fourth quarter of each year and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. As of June 30, 2019, we did not identify any changes in circumstances that would indicate the carrying value of goodwill may not be recoverable.
Identifiable Intangible Assets, net The following tables summarize our identifiable intangible assets, net. As of June 30, 2019, there were no impairment indicators present.
The following table shows the remaining estimated future amortization expense at June 30, 2019.
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Accounts Receivable Securitization Programs |
6 Months Ended |
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Jun. 30, 2019 | |
Transfers and Servicing [Abstract] | |
Accounts Receivable Securitization Programs | Accounts Receivable Securitization Programs U.S. Accounts Receivable Securitization Program We and a group of our U.S. operating subsidiaries maintain an accounts receivable securitization program under which they sell eligible U.S. accounts receivable to an indirectly wholly-owned subsidiary that was formed for the sole purpose of entering into this program. The wholly-owned subsidiary in turn may sell an undivided fractional ownership interest in these receivables with two banks and issuers of commercial paper administered by these banks. The wholly-owned subsidiary retains the receivables it purchases from the operating subsidiaries. Any transfers of fractional ownership interests of receivables under the U.S. receivables securitization program to the two banks and issuers of commercial paper administered by these banks are considered secured borrowings with pledge of collateral and will be classified as short-term borrowings on our Condensed Consolidated Balance Sheets. These banks do not have any recourse against the general credit of the Company. The net trade receivables that served as collateral for these borrowings are reclassified from trade receivables, net to prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. As of June 30, 2019, the maximum purchase limit for receivable interests was $60.0 million, subject to the availability limits described below. The amounts available from time to time under this program may be less than $60.0 million due to a number of factors, including but not limited to our credit ratings, trade receivable balances, the creditworthiness of our customers and our receivables collection experience. As of June 30, 2019, the amount available under the program was $57.4 million. Although we do not believe restrictions under this program presently materially restrict our operations, if an additional event occurs that triggers one of these restrictive provisions, we could experience a further decline in the amounts available to us under the program or termination of the program. The program expires annually in August and is renewable. European Accounts Receivable Securitization Program We and a group of our European subsidiaries maintain an accounts receivable securitization program with a special purpose vehicle, or SPV, two banks and issuers of commercial paper administered by these banks. The European program is structured to be a securitization of certain trade receivables that are originated by certain of our European subsidiaries. The SPV borrows funds from the banks to fund its acquisition of the receivables and provides the banks with a first priority perfected security interest in the accounts receivable. We do not have an equity interest in the SPV. We concluded the SPV is a variable interest entity because its total equity investment at risk is not sufficient to permit the SPV to finance its activities without additional subordinated financial support from the bank via loans or via the collections from accounts receivable already purchased. Additionally, we are considered the primary beneficiary of the SPV since we control the activities of the SPV, and are exposed to the risk of uncollectable receivables held by the SPV. Therefore, the SPV is consolidated in our Condensed Consolidated Financial Statements. Any activity between the participating subsidiaries and the SPV is eliminated in consolidation. Loans from the banks to the SPV will be classified as short-term borrowings on our Condensed Consolidated Balance Sheets. The net trade receivables that served as collateral for these borrowings are reclassified from trade receivables, net to prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. As of June 30, 2019, the maximum purchase limit for receivable interests was €80.0 million ($91.0 million equivalent at June 30, 2019), subject to availability limits. The terms and provisions of this program are similar to our U.S. program discussed above. As of June 30, 2019, the amount available under this program before utilization was €70.0 million ($79.6 million equivalent as of June 30, 2019). This program expires annually in August and is renewable. Utilization of Our Accounts Receivable Securitization Programs As of June 30, 2019, there were no amounts borrowed under our U.S. program and €69.0 million ($78.5 million equivalent at June 30, 2019) borrowed under our European program. As of December 31, 2018, there were no amounts borrowed under our U.S. program and €73.3 million ($83.9 million equivalent at December 31, 2018) borrowed under our European program. We continue to service the trade receivables supporting the programs, and the banks are permitted to re-pledge this collateral. The total interest paid for these programs was approximately $0.2 million and $0.4 million for the three and six months ended June 30, 2019 and approximately $0.2 million for the three and six months ended June 30, 2018. Under limited circumstances, the banks and the issuers of commercial paper can end purchases of receivables interests before the above expiration dates. A failure to comply with debt leverage or various other ratios related to our receivables collection experience could result in termination of the receivables programs. We were in compliance with these ratios at June 30, 2019. Accounts Receivable Factoring AgreementsThe Company has entered into factoring agreements and customers' supply chain financing arrangements, to sell certain receivables to unrelated third-party financial institutions. These programs are entered into in the normal course of business. We account for these transactions in accordance with ASC 860, "Transfers and Servicing" ("ASC 860"). ASC 860 allows for the ownership transfer of accounts receivable to qualify for sale treatment when the appropriate criteria is met, which permits the Company to present the balances sold under the program to be excluded from Accounts receivable, net on the Condensed Consolidated Balance Sheets. Receivables are considered sold when (i) they are transferred beyond the reach of the Company and its creditors, (ii) the purchaser has the right to pledge or exchange the receivables, and (iii) the Company has no continuing involvement in the transferred receivables. In addition, the Company provides no other forms of continued financial support to the purchaser of the receivables once the receivables are sold. Gross amounts factored under this program for the six months ended June 30, 2019 and the twelve months ended December 31, 2018 were $157.4 million and $249.8 million, respectively. The fees associated with transfer of receivables for all programs were approximately $0.8 million and $1.3 million for the three and six months ended June 30, 2019, respectively and approximately $0.5 million and $1 million for the three and six months ended June 30, 2018, respectively.
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Accounts Receivable Factoring Agreements |
6 Months Ended |
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Jun. 30, 2019 | |
Transfers and Servicing [Abstract] | |
Accounts Receivable Factoring Agreement | Accounts Receivable Securitization Programs U.S. Accounts Receivable Securitization Program We and a group of our U.S. operating subsidiaries maintain an accounts receivable securitization program under which they sell eligible U.S. accounts receivable to an indirectly wholly-owned subsidiary that was formed for the sole purpose of entering into this program. The wholly-owned subsidiary in turn may sell an undivided fractional ownership interest in these receivables with two banks and issuers of commercial paper administered by these banks. The wholly-owned subsidiary retains the receivables it purchases from the operating subsidiaries. Any transfers of fractional ownership interests of receivables under the U.S. receivables securitization program to the two banks and issuers of commercial paper administered by these banks are considered secured borrowings with pledge of collateral and will be classified as short-term borrowings on our Condensed Consolidated Balance Sheets. These banks do not have any recourse against the general credit of the Company. The net trade receivables that served as collateral for these borrowings are reclassified from trade receivables, net to prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. As of June 30, 2019, the maximum purchase limit for receivable interests was $60.0 million, subject to the availability limits described below. The amounts available from time to time under this program may be less than $60.0 million due to a number of factors, including but not limited to our credit ratings, trade receivable balances, the creditworthiness of our customers and our receivables collection experience. As of June 30, 2019, the amount available under the program was $57.4 million. Although we do not believe restrictions under this program presently materially restrict our operations, if an additional event occurs that triggers one of these restrictive provisions, we could experience a further decline in the amounts available to us under the program or termination of the program. The program expires annually in August and is renewable. European Accounts Receivable Securitization Program We and a group of our European subsidiaries maintain an accounts receivable securitization program with a special purpose vehicle, or SPV, two banks and issuers of commercial paper administered by these banks. The European program is structured to be a securitization of certain trade receivables that are originated by certain of our European subsidiaries. The SPV borrows funds from the banks to fund its acquisition of the receivables and provides the banks with a first priority perfected security interest in the accounts receivable. We do not have an equity interest in the SPV. We concluded the SPV is a variable interest entity because its total equity investment at risk is not sufficient to permit the SPV to finance its activities without additional subordinated financial support from the bank via loans or via the collections from accounts receivable already purchased. Additionally, we are considered the primary beneficiary of the SPV since we control the activities of the SPV, and are exposed to the risk of uncollectable receivables held by the SPV. Therefore, the SPV is consolidated in our Condensed Consolidated Financial Statements. Any activity between the participating subsidiaries and the SPV is eliminated in consolidation. Loans from the banks to the SPV will be classified as short-term borrowings on our Condensed Consolidated Balance Sheets. The net trade receivables that served as collateral for these borrowings are reclassified from trade receivables, net to prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. As of June 30, 2019, the maximum purchase limit for receivable interests was €80.0 million ($91.0 million equivalent at June 30, 2019), subject to availability limits. The terms and provisions of this program are similar to our U.S. program discussed above. As of June 30, 2019, the amount available under this program before utilization was €70.0 million ($79.6 million equivalent as of June 30, 2019). This program expires annually in August and is renewable. Utilization of Our Accounts Receivable Securitization Programs As of June 30, 2019, there were no amounts borrowed under our U.S. program and €69.0 million ($78.5 million equivalent at June 30, 2019) borrowed under our European program. As of December 31, 2018, there were no amounts borrowed under our U.S. program and €73.3 million ($83.9 million equivalent at December 31, 2018) borrowed under our European program. We continue to service the trade receivables supporting the programs, and the banks are permitted to re-pledge this collateral. The total interest paid for these programs was approximately $0.2 million and $0.4 million for the three and six months ended June 30, 2019 and approximately $0.2 million for the three and six months ended June 30, 2018. Under limited circumstances, the banks and the issuers of commercial paper can end purchases of receivables interests before the above expiration dates. A failure to comply with debt leverage or various other ratios related to our receivables collection experience could result in termination of the receivables programs. We were in compliance with these ratios at June 30, 2019. Accounts Receivable Factoring AgreementsThe Company has entered into factoring agreements and customers' supply chain financing arrangements, to sell certain receivables to unrelated third-party financial institutions. These programs are entered into in the normal course of business. We account for these transactions in accordance with ASC 860, "Transfers and Servicing" ("ASC 860"). ASC 860 allows for the ownership transfer of accounts receivable to qualify for sale treatment when the appropriate criteria is met, which permits the Company to present the balances sold under the program to be excluded from Accounts receivable, net on the Condensed Consolidated Balance Sheets. Receivables are considered sold when (i) they are transferred beyond the reach of the Company and its creditors, (ii) the purchaser has the right to pledge or exchange the receivables, and (iii) the Company has no continuing involvement in the transferred receivables. In addition, the Company provides no other forms of continued financial support to the purchaser of the receivables once the receivables are sold. Gross amounts factored under this program for the six months ended June 30, 2019 and the twelve months ended December 31, 2018 were $157.4 million and $249.8 million, respectively. The fees associated with transfer of receivables for all programs were approximately $0.8 million and $1.3 million for the three and six months ended June 30, 2019, respectively and approximately $0.5 million and $1 million for the three and six months ended June 30, 2018, respectively.
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Restructuring Activities |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Activities | Restructuring Activities For the three and six months ended June 30, 2019, the Company incurred $29.3 million and $36.7 million, respectively, of restructuring charges and $21.3 million and $38.0 million, respectively, of other related costs. These were primarily a result of restructuring costs associated with the Company’s Reinvent SEE strategy. Our Restructuring Program consists of previously existing restructuring programs and the new three-year restructuring program which is part of our Reinvent SEE strategy. The Company expects restructuring activities to be completed by the end of 2021. The Board of Directors has approved cumulative restructuring spend of $840 to $885 million. Restructuring spend is estimated to be incurred as follows:
The following table details our restructuring activities reflected in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018:
The restructuring accrual, spending and other activity for the six months ended June 30, 2019 and the accrual balance remaining at June 30, 2019 related to these programs were as follows:
We expect to pay $52.4 million of the accrual balance remaining at June 30, 2019 within the next twelve months. This amount is included in accrued restructuring costs on the Condensed Consolidated Balance Sheets at June 30, 2019. The remaining accrual of $2.5 million is expected to be substantially paid by the end of 2020. This amount is included in other non-current liabilities on our Condensed Consolidated Balance Sheets at June 30, 2019.
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Debt and Credit Facilities |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Facilities | Debt and Credit Facilities Our total debt outstanding consisted of the amounts set forth in the following table:
revolving credit facility, $83.9 million under our European securitization program and $8.9 million of short-term borrowings from various lines of credit.
Amended and Restated Senior Secured Credit Facility On July 12, 2018, the Company and certain of its subsidiaries entered into a third amended and restated credit agreement and an amendment No. 1 thereto (the "Third Amended and Restated Agreement") whereby its senior secured credit facility was amended and restated with Bank of America, N.A., as agent and the other financial institutions party thereto. The changes include: (i) the refinancing of the term loan A facilities and revolving credit facilities with a new U.S. dollar term loan A facility in an aggregate principal amount of approximately $186.5 million, a new pounds sterling term loan A facility in an aggregate principal amount of approximately £29.4 million, and increased our revolving credit facilities from $700.0 million to $1.0 billion (including revolving facilities available in U.S. dollars, euros, pounds sterling, Canadian dollars, Australian dollars, Japanese yen, New Zealand dollars and Mexican pesos), (ii) increased flexibility to lower the interest rate margin for the term loan A facilities and revolving credit facilities, which will range from 125 to 200 basis points (bps) in the case of LIBOR loans, subject to the achievement of certain leverage tests, (iii) the extension of the final maturity of the term loan A facilities and revolving credit commitment to July 11, 2023, (iv) the removal of the requirement to prepay the loans with respect to excess cash flow, (v) adjustments to the financial maintenance covenant of Consolidated Net Debt to Consolidated EBITDA (in each case, as defined in the Third Amended and Restated Credit Agreement) and other covenants to provide additional flexibility to the Company, (vi) the release of certain non-U.S. asset collateral previously pledged by certain of the Company's subsidiaries and (vii) other amendments. As a result of the Third Amended and Restated Credit Agreement, we recognized $1.9 million of loss on debt redemption in our Condensed Consolidated Statements of Operations in the third quarter of 2018. This amount includes $1.5 million of accelerated amortization of original issuance discount related to the term loan A and lender and non-lender fees related to the entire credit facility. Also included in the loss on debt redemption was $0.4 million of non-lender fees incurred in connection with the Third Amended and Restated Credit Agreement. In addition, we incurred $0.7 million of lender and third-party fees that are included in the carrying amounts of the outstanding debt under the credit facility. We also capitalized $4.9 million of fees that are included in other assets on our Condensed Consolidated Balance Sheets. The amortization expense related to original issuance discount and lender and non-lender fees is calculated using the effective interest rate method over the lives of the respective debt instruments. On August 1, 2019, Sealed Air Corporation, on behalf of itself and certain of its subsidiaries, and Sealed Air Corporation (US) entered into an amendment and incremental assumption agreement (the Amendment) whereby the Company's existing senior secured credit facility with Bank of America, N.A., as agent, and the other financial institutions party thereto, was amended. The Amendment provides for a new incremental term facility in an aggregate principal amount of up to $475 million, to be used, in part, to finance the acquisition of APS. Amortization expense related to the senior secured credit facility was $0.5 million and $0.9 million for the three and six months ended June 30, 2019, and is included in interest expense, net in our Condensed Consolidated Statements of Operations. Short-term Borrowings The following table summarizes our available lines of credit and committed and uncommitted lines of credit, including the revolving credit facility discussed above, and the amounts available under our accounts receivable securitization programs.
Covenants Each issue of our outstanding senior notes imposes limitations on our operations and those of specified subsidiaries. The Third Amended and Restated Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on our indebtedness, liens, investments, restricted payments, mergers and acquisitions, dispositions of assets, transactions with affiliates, amendment of documents and sale leasebacks, and a covenant specifying a maximum permitted ratio of Consolidated Net Debt to Consolidated EBITDA (as defined in the Third Amended and Restated Credit Agreement). We were in compliance with the above financial covenants and limitations at June 30, 2019.
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Derivatives and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities We report all derivative instruments on our Condensed Consolidated Balance Sheets at fair value and establish criteria for designation and effectiveness of transactions entered into for hedging purposes. As a large global organization, we face exposure to market risks, such as fluctuations in foreign currency exchange rates and interest rates. To manage the volatility relating to these exposures, we enter into various derivative instruments from time to time under our risk management policies. We designate derivative instruments as hedges on a transaction basis to support hedge accounting. The changes in fair value of these hedging instruments offset in part or in whole corresponding changes in the fair value or cash flows of the underlying exposures being hedged. We assess the initial and ongoing effectiveness of our hedging relationships in accordance with our policy. We do not purchase, hold or sell derivative financial instruments for trading purposes. Our practice is to terminate derivative transactions if the underlying asset or liability matures or is sold or terminated, or if we determine the underlying forecasted transaction is no longer probable of occurring. We record the fair value positions of all derivative financial instruments on a net basis by counterparty for which a master netting arrangement is utilized. Foreign Currency Forward Contracts Designated as Cash Flow Hedges The primary purpose of our cash flow hedging activities is to manage the potential changes in value associated with the amounts receivable or payable on equipment and raw material purchases that are denominated in foreign currencies in order to minimize the impact of the changes in foreign currencies. We record gains and losses on foreign currency forward contracts qualifying as cash flow hedges in AOCL to the extent that these hedges are effective and until we recognize the underlying transactions in net earnings, at which time we recognize these gains and losses in cost of sales, on our Condensed Consolidated Statements of Operations. Cash flows from derivative financial instruments are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows. These contracts generally have original maturities of less than 12 months. Net unrealized after-tax losses/gains related to cash flow hedging activities that were included in AOCL were a $0.1 million and $1.3 million loss for the three and six months ended June 30, 2019, respectively, and a $1.3 million and $2.4 million gain for the three and six months ended June 30, 2018, respectively. The unrealized amounts in AOCL will fluctuate based on changes in the fair value of open contracts during each reporting period. We estimate that $0.1 million of net unrealized gains related to cash flow hedging activities included in AOCL will be reclassified into earnings within the next twelve months. Foreign Currency Forward Contracts Not Designated as Hedges Our subsidiaries have foreign currency exchange exposure from buying and selling in currencies other than their functional currencies. The primary purposes of our foreign currency hedging activities are to manage the potential changes in value associated with the amounts receivable or payable on transactions denominated in foreign currencies and to minimize the impact of the changes in foreign currencies related to foreign currency-denominated interest-bearing intercompany loans and receivables and payables. The changes in fair value of these derivative contracts are recognized in other income (expense), net, on our Condensed Consolidated Statements of Operations and are largely offset by the remeasurement of the underlying foreign currency-denominated items indicated above. Cash flows from derivative financial instruments are classified as cash flows from investing activities in the Condensed Consolidated Statements of Cash Flows. These contracts generally have original maturities of less than 12 months. Interest Rate Swaps From time to time, we may use interest rate swaps to manage our fixed and floating interest rates on our outstanding indebtedness. At June 30, 2019 and December 31, 2018, we had no outstanding interest rate swaps. Net Investment Hedge The €400.0 million 4.50% notes issued in June 2015 are designated as a net investment hedge, hedging a portion of our net investment in a certain European subsidiary against fluctuations in foreign exchange rates. The change in the translated value of the debt was $4.8 million ($3.6 million net of tax) as of June 30, 2019 and is reflected in AOCL on our Condensed Consolidated Balance Sheets. In March 2015, we entered into a series of cross-currency swaps with a combined notional amount of $425.0 million, hedging a portion of the net investment in a certain European subsidiary against fluctuations in foreign exchange rates. As a result of the sale of Diversey, we terminated these cross-currency swaps in September 2017 and settled these swaps in October 2017. The fair value of the swaps on the date of termination was a liability of $61.9 million which was partially offset by semi-annual interest settlements of $17.7 million. This resulted in a net impact of $(44.2) million which is recorded in AOCL. For derivative instruments that are designated and qualify as hedges of net investments in foreign operations, changes in fair values of the derivative instruments are recognized in unrealized net gains or loss on derivative instruments for net investment hedge, a component of AOCL, net of taxes, to offset the changes in the values of the net investments being hedged. Any portion of the net investment hedge that is determined to be ineffective is recorded in other income (expense), net on the Condensed Consolidated Statements of Operations. Other Derivative Instruments We may use other derivative instruments from time to time to manage exposure to foreign exchange rates and to access to international financing transactions. These instruments can potentially limit foreign exchange exposure by swapping borrowings denominated in one currency for borrowings denominated in another currency. Fair Value of Derivative Instruments See Note 15, “Fair Value Measurements and Other Financial Instruments,” of the Notes to Condensed Consolidated Financial Statements for a discussion of the inputs and valuation techniques used to determine the fair value of our outstanding derivative instruments. The following table details the fair value of our derivative instruments included on our Condensed Consolidated Balance Sheets.
The following table details the effect of our derivative instruments on our Condensed Consolidated Statements of Operations.
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Fair Value Measurements and Other Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Other Financial Instruments | Fair Value Measurements and Other Financial Instruments Fair Value Measurements In determining fair value of financial instruments, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in our assessment of fair value. We determine fair value of our financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
The following table details the fair value hierarchy of our financial instruments:
Cash Equivalents Our cash equivalents at June 30, 2019 and December 31, 2018 consisted of bank time deposits (Level 1). Since these are short-term highly liquid investments with remaining maturities of 3 months or less at the date of purchase, they present negligible risk of changes in fair value due to changes in interest rates. Derivative Financial Instruments Our foreign currency forward contracts, foreign currency options, interest rate swaps and cross-currency swaps are recorded at fair value on our Condensed Consolidated Balance Sheets using a discounted cash flow analysis that incorporates observable market inputs. These market inputs include foreign currency spot and forward rates, and various interest rate curves, and are obtained from pricing data quoted by various banks, third-party sources and foreign currency dealers involving identical or comparable instruments (Level 2). Counterparties to these foreign currency forward contracts have at least an investment grade rating. Credit ratings on some of our counterparties may change during the term of our financial instruments. We closely monitor our counterparties’ credit ratings and, if necessary, will make any appropriate changes to our financial instruments. The fair value generally reflects the estimated amounts that we would receive or pay to terminate the contracts at the reporting date. Other Financial Instruments The following financial instruments are recorded at fair value or at amounts that approximate fair value: (1) trade receivables, net, (2) certain other current assets, (3) accounts payable and (4) other current liabilities. The carrying amounts reported on our Condensed Consolidated Balance Sheets for the above financial instruments closely approximate their fair value due to the short-term nature of these assets and liabilities. Other liabilities that are recorded at carrying value on our Condensed Consolidated Balance Sheets include our credit facilities and senior notes. We utilize a market approach to calculate the fair value of our senior notes. Due to their limited investor base and the face value of some of our senior notes, they may not be actively traded on the date we calculate their fair value. Therefore, we may utilize prices and other relevant information generated by market transactions involving similar securities, reflecting U.S. Treasury yields to calculate the yield to maturity and the price on some of our senior notes. These inputs are provided by an independent third party and are considered to be Level 2 inputs. We derive our fair value estimates of our various other debt instruments by evaluating the nature and terms of each instrument, considering prevailing economic and market conditions, and examining the cost of similar debt offered at the balance sheet date. We also incorporated our credit default swap rates and currency specific swap rates in the valuation of each debt instrument, as applicable. These estimates are subjective and involve uncertainties and matters of significant judgment, and therefore we cannot determine them with precision. Changes in assumptions could significantly affect our estimates. The table below shows the carrying amounts and estimated fair values of our debt, excluding our lease liabilities.
Included among our non-financial assets and liabilities that are not required to be measured at fair value on a recurring basis are inventories, net property and equipment, goodwill, intangible assets and asset retirement obligations.
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Defined Benefit Pension Plans and Other Post-Employment Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Other Post-Employment Benefit Plans | Defined Benefit Pension Plans and Other Post-Employment Benefit Plans The following tables show the components of our net periodic benefit cost (income) for our defined benefit pension plans for the three and six months ended June 30, 2019 and 2018:
The following table shows the components of our net periodic benefit cost (income) for our other post-retirement employee benefit plans for the three and six months ended June 30, 2019 and 2018:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective Income Tax Rate and Income Tax Provision On December 22, 2017, the TCJA was enacted into law. TCJA significantly changes existing U.S. tax law and includes numerous provisions that affect our business such as imposing a one-time transition tax on deemed repatriation of deferred foreign income ("Transition Tax"), reducing the U.S. federal statutory tax rate, and adopting a territorial tax system. The TCJA includes a provision to tax global intangible low-taxed income (“GILTI”), thereby requiring us to include in our U.S income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The GILTI provision is complex and subject to continuing regulatory interpretation by the U.S. Internal Revenue Service (“IRS”). We are required to make an accounting policy election to either (1) treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factor such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). We have elected to recognize the GILTI as a period expense in the period the tax is incurred. Under this policy, we have not provided deferred taxes related to temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period. For interim tax reporting, we estimate one annual effective tax rate for tax jurisdictions not subject to a valuation allowance and apply that rate to the year-to-date ordinary income/(loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur. Our effective income tax rate was 32.5% and 32.2% for the three and six months ended June 30, 2019, respectively. In comparison to the U.S. statutory rate of 21.0%, the Company's effective income tax rate is negatively impacted by foreign earnings taxed at a higher rate, the effect of GILTI and other foreign income inclusions in the U.S. tax base, a U.S. audit assessment associated with foreign tax credit utilization in 2011, state income taxes and non-deductible expenses, and is positively impacted by the benefits for the release of valuation allowance on foreign deferred assets in Brazil related to improved profitability from Reinvent SEE initiatives and the U.S. Research and Development credit. Our effective income tax rate was 28.7% and 154.1% for the three and six months ended June 30, 2018, respectively. In comparison to the U.S. statutory rate of 21.0%, the Company’s effective tax rate was negatively impacted by the Transition Tax and GILTI provisions associated with the TCJA, withholding taxes, non-deductible expenses and state income taxes, offset by the benefits from lapses in statute of limitations on foreign unrecognized tax benefits. The decrease in valuation allowances for the three and six months ended June 30, 2019 was $8.1 million. The change in valuation allowances for the three and six months ended June 30, 2018 was not material. We reported a net increase in unrecognized tax benefits in the three and six months ended June 30, 2019 of $7.7 million and $9.7 million, respectively, primarily related to a U.S. audit assessment and interest accruals on existing positions. We reported a net decrease in unrecognized tax benefits in the three months and six months ended June 30, 2018 of $10.7 million and $14.0 million, respectively, primarily related to statute of limitations lapses in foreign jurisdictions. Interest and penalties on tax assessments are included in income tax expense.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||
Commitments and Contingencies | Commitments and Contingencies Cryovac Transaction Commitments and Contingencies Refer to Part II, Item 8, Note 18, “Commitments and Contingencies,” to our audited Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 for a description of the Settlement agreement (as defined therein). Novipax Complaint On March 31, 2017, a complaint was filed in the Superior Court of the State of Delaware against Sealed Air Corporation, Cryovac Inc., Sealed Air Corporation (US) and Sealed Air (Canada) Co./Cie. (individually and collectively the “Company”) styled Novipax Holdings LLC ("Novipax") v. Sealed Air Corporation, Cryovac Inc., Sealed Air Corporation (US) and Sealed Air (Canada) Co. / Cie. (the “Complaint”). The Complaint alleged claims for fraud, breach of contract, and unjust enrichment relating to the plaintiff's acquisition of the Company's North America foam trays and absorbent pads business in 2015 for $75.6 million. The relief sought included unspecified monetary damages, exemplary damages, rescission or recessionary damages, reasonable attorneys' fees and pre-judgment and post-judgment interest. Depositions commenced in the first quarter of 2019, and the case was calendared for trial to commence in June 2019. During the second quarter of 2019, the Company engaged in mediation with Novipax to settle the claim and the parties reached a preliminary settlement agreement. To cover the estimated costs of settlement, including a one-time cash payment as well as accrual of expenses relating to a proposed supply agreement under which the Company would continue to purchase materials from Novipax for a specified period for use in the manufacturing of the Company’s products, the Company recorded a charge of $59.0 million during the second quarter, which is included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Operations. Subsequent to quarter end, on July 10, 2019 the settlement agreement was finalized and executed, and the parties agreed to the release and dismissal of the litigation claims. Environmental Matters We are subject to loss contingencies resulting from environmental laws and regulations, and we accrue for anticipated costs associated with investigatory and remediation efforts when an assessment has indicated that a loss is probable and can be reasonably estimated. These accruals are not reduced by potential insurance recoveries, if any. We do not believe that it is reasonably possible that our liability in excess of the amounts that we have accrued for environmental matters will be material to our Condensed Consolidated Balance Sheets or Statements of Operations. Environmental liabilities are reassessed whenever circumstances become better defined or remediation efforts and their costs can be better estimated. We evaluate these liabilities periodically based on available information, including the progress of remedial investigations at each site, the current status of discussions with regulatory authorities regarding the methods and extent of remediation and the apportionment of costs among potentially responsible parties. As some of these issues are decided (the outcomes of which are subject to uncertainties) or new sites are assessed and costs can be reasonably estimated, we adjust the recorded accruals, as necessary. We believe that these exposures are not material to our Condensed Consolidated Balance Sheets or Statements of Operations. We believe that we have adequately reserved for all probable and estimable environmental exposures. Guarantees and Indemnification Obligations We are a party to many contracts containing guarantees and indemnification obligations. These contracts primarily consist of:
As of June 30, 2019, the Company has no reason to believe a loss exceeding amounts already recognized would be incurred.
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Stockholders' Deficit |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Deficit | Stockholders’ Deficit Repurchase of Common Stock In July 2015, our Board of Directors authorized a repurchase program of up to $1.5 billion of the Company’s common stock, reflecting its commitment to return value to shareholders. That repurchase program had no expiration date and replaced the previously authorized program, which was terminated. In March 2017, our Board of Directors authorized an increase to the existing share repurchase program by up to an additional $1.5 billion of the Company’s common stock. Additionally, on May 2, 2018, the Board of Directors increased the share repurchase program authorization to $1.0 billion. This new program has no expiration date and replaced the previous authorizations. Refer to Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds” for further information. During the three and six months ended June 30, 2019, we repurchased 1,154,047 and 1,560,633 shares, for approximately $49.5 million and $67.2 million, with an average share price of $42.98 and $43.09, respectively. These repurchases were made under open market transactions, including through plans complying with Rule 10b5-1 under the of the Securities Exchange Act of 1934, as amended, and pursuant to the share repurchase program previously authorized by our Board of Directors. During the three and six months ended June 30, 2018, we repurchased 1,780,578 and 10,575,532 shares, for approximately $77.1 million and $481.6 million, respectively. These repurchases were made under privately negotiated, accelerated share repurchase activities or open market transactions including through plans complying with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and pursuant to the share repurchase program previously authorized by our Board of Directors. During the three and six months ended June 30, 2018, share purchases under open market transactions were 1,780,578 and 9,355,896 shares for approximately $77.1 million and $401.6 million with an average share price of $43.29 and $42.93, respectively. Dividends On May 16, 2019, our Board of Directors declared a quarterly cash dividend of $0.16 per common share, or $24.7 million, which was paid on June 21, 2019, to stockholders of record at the close of business on June 7, 2019. On July 11, 2019, our Board of Directors declared a quarterly cash dividend of $0.16 per common share, which will be paid on September 20, 2019, to stockholders of record at the close of business on September 6, 2019. The dividends paid in the six months ended June 30, 2019 were recorded as a reduction to cash and cash equivalents and retained earnings on our Condensed Consolidated Balance Sheets. Our credit facility and our notes contain covenants that restrict our ability to declare or pay dividends. However, we do not believe these covenants are likely to materially limit the future payment of quarterly cash dividends on our common stock. From time to time, we may consider other means of returning value to our stockholders based on our Condensed Consolidated Statements of Operations. There is no guarantee that our Board of Directors will declare any further dividends. Share-based Compensation In 2014, the Board of Directors adopted, and its stockholders approved the Omnibus Incentive Plan (“Omnibus Incentive Plan”). Under the Omnibus Incentive Plan, the maximum number of shares of Common Stock authorized was 4,250,000, plus total shares available to be issued as of May 22, 2014 under the 2002 Directors Stock Plan and the 2005 Contingent Stock Plan (collectively, the “Predecessor Plans”). The Omnibus Incentive Plan replaced the Predecessor Plans and no further awards were granted under the Predecessor Plans. The Omnibus Incentive Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share units known as PSU awards, other stock awards and cash awards to officers, non-employee directors, key employees, consultants and advisers. In 2018, the Board of Directors adopted, and its shareholders approved an amendment and restatement to the 2014 Omnibus Incentive Plan. The amended plan adds 2,199,114 shares of common stock to the share pool previously available under the Omnibus Incentive Plan. We record share-based incentive compensation expense in selling, general and administrative expenses and cost of sales on our Condensed Consolidated Statements of Operations for both equity-classified and liability-classified awards. We record corresponding credit to additional paid-in capital within stockholders’ equity for equity-classified awards, and to either current or non-current liability for liability-classified awards based on the fair value of the share-based incentive compensation awards at the date of grant. Total expense for the liability-classified awards continues to be remeasured to fair value at the end of each reporting period. We recognize an expense or credit reflecting the straight-line recognition, net of estimated forfeitures, of the expected cost of the program. The number of Performance Share Units ("PSU") earned may equal, exceed or be less than the targeted number of shares depending on whether the performance criteria are met, surpassed or not met. The table below shows our total share-based incentive compensation expense:
PSU Awards During the first 90 days of each year, the Organization and Compensation (“O&C”) Committee of our Board of Directors approves PSU awards for our executive officers and other selected key executives, which include for each officer or executive a target number of shares of common stock and performance goals and measures that will determine the percentage of the target award that is earned following the end of the three-year performance period. Following the end of the performance period, in addition to shares, participants will also receive a cash payment in the amount of the dividends (without interest) that would have been paid during the performance period on the number of shares that they have earned. Each PSU is subject to forfeiture if the recipient terminates employment with the Company prior to the end of the three-year award performance period for any reason other than death, disability or retirement. In the event of death, disability or retirement, a participant will receive a prorated payment based on such participant’s number of full months of service during the award performance period, further adjusted based on the achievement of the performance goals during the award performance period. All of these PSUs are classified as equity in the Condensed Consolidated Balance Sheets. 2019 Three-year PSU Awards In February 2019, the O&C Committee approved awards with a three-year performance period beginning January 1, 2019 to December 31, 2021 for certain executives. The O&C Committee established performance goals, which are (i) total shareholder return (TSR) weighted at 34%, (ii) 2021 consolidated adjusted EBITDA margin weighted at 33%, and (iii) Return on Invested Capital weighted at 33%. The total number of shares to be issued for these awards can range from zero to 200% of the target number of shares. The number of PSUs granted and the grant date fair value of the PSUs are shown in the following table:
The assumptions used to calculate the grant date fair value of the PSUs based on TSR are shown in the following table:
2016 Three-year PSU Awards In February 2019, the O&C Committee reviewed the performance results for the 2016-2018 PSUs. Performance goals for these PSUs were based on Adjusted EBITDA margins and relative TSR. Based on overall performance for 2016-2018 PSUs, these awards paid out at 0% of target or zero units.
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table provides details of comprehensive income (loss) for the six months ended June 30, 2019 and 2018:
The following table provides detail of amounts reclassified from AOCL:
(2) These accumulated other comprehensive components are included in our derivative and hedging activities. See Note 14, “Derivatives and Hedging Activities,” of the Notes to Condensed Consolidated Financial Statements for additional details.
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Other Income (Expense), net |
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Other Income (Expense), net | Other Income (Expense), net The following table provides details of other income (expense), net:
(1) Cryovac Brasil Ltda., a Sealed Air subsidiary, received a final decision from the Brazilian court regarding a claim in which Sealed Air contended that certain indirect taxes paid were calculated on an incorrect amount. As a result, for the three and six months ended June 30, 2019, we recorded $4.8 million income to Other, net for a claim of overpaid taxes related to 2015 through 2018.
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Net Earnings (Loss) Per Common Share |
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Net Earnings (Loss) Per Common Share | Net Earnings (Loss) Per Common Share The following table shows the calculation of basic and diluted net earnings (loss) per common share under the two-class method:
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Organization and Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our Condensed Consolidated Financial Statements include all of the accounts of the Company and our subsidiaries. We have eliminated all significant intercompany transactions and balances in consolidation. In management’s opinion, all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of our Condensed Consolidated Balance Sheets as of June 30, 2019 and our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018 have been made. The results set forth in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and in our Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. All amounts are in millions, except per share amounts, and approximate due to rounding. Some prior period amounts have been reclassified to conform to the current year presentation. These reclassifications, individually and in the aggregate, did not have a material impact on our condensed consolidated financial condition, results of operations or cash flows. Our Condensed Consolidated Financial Statements were prepared in accordance with the interim reporting requirements of the SEC. As permitted under those rules, annual footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted. The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ from these estimates. We are responsible for the unaudited Condensed Consolidated Financial Statements and notes included in this report. As these are condensed financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (“2018 Form 10-K”) and with the information contained in other publicly-available filings with the SEC. As part of the Company's Reinvent SEE strategy, we have evaluated and made adjustments to our regional operating model. As of January 1, 2019, our Geographic regions are: North America, EMEA, South America and APAC. Our North American operations include Canada, the United States, Mexico and Central America. Mexico and Central America were previously included in Latin America. EMEA consists of Europe, Middle East, Africa and Turkey. APAC refers to our collective Asia Pacific region, including Greater China, India, Southeast Asia, Japan, Korea, Australia and New Zealand.
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Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842), and issued subsequent amendments to the initial guidance thereafter. This ASU requires an entity to recognize a right-of-use asset (ROU) and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification of the underlying lease as either finance or operating. Similar modifications have been made to lessor accounting in-line with revenue recognition guidance. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard was effective for us on January 1, 2019. Entities are required to adopt ASC 842 using a modified retrospective transition method. Full retrospective transition is prohibited. The guidance permits an entity to apply the standard’s transition provisions at either the beginning of the earliest comparative period presented in the financial statements or the beginning of the period of adoption (i.e., on the effective date). We adopted the new standard on its effective date. The new standard provides several optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient not to separate lease and non-lease components for all of our leases, which means all consideration that is fixed, or in-substance fixed, relating to the non-lease components will be captured as part of our lease components for balance sheet purposes. As of June 30, 2019, we recognized additional operating lease liabilities of $79.1 million with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments for existing operating leases on our Condensed Consolidated Balance Sheets. See Note 4, "Leases," of the Notes to Condensed Consolidated Financial Statements for additional lease disclosures. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. ASU 2018-16 adds the overnight index swap rate based on the Secured Overnight Financing Rate to the list of U.S. benchmark interest rates eligible to be hedged within ASC 815. This ASU names the Secured Overnight Financing Rate as the preferred reference rate alternative to the London Interbank Offered Rate (LIBOR). The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company adopted ASU 2018-16 on January 1, 2019. The adoption did not have an impact on the Company's Condensed Consolidated Financial Results. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. As a result of the U.S. Tax Cuts and Jobs Act ("TCJA"), this ASU was issued to provide entities with the option to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings. The Company elected to early adopt ASU 2018-02 as of October 1, 2018 in which the impact was applied to the period of adoption. As part of the adoption, the Company has elected to reclassify the tax effects of the TCJA from accumulated other comprehensive loss ("AOCL") to retained earnings. The adoption of the ASU 2018-02 resulted in a $13.4 million reclassification from AOCL to retained earnings due to the stranded tax effects of the TCJA which was recorded in the period ended December 31, 2018. The primary AOCL balances which were impacted by the TCJA were unrecognized pension items and unrecognized gains (losses) on derivative instruments. Recently Issued Accounting Standards In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments. ASU 2019-04 provides updates and amendments to previously issued ASUs. The amendments clarify the scope of the credit losses standard and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments. Codification Improvements to Topic 326, Financial Instruments - Credit Losses is effective upon our adoption of ASU 2016-13, which we plan to adopt as of January 1, 2020. The amendment will be included in our overall adoption of ASU 2016-13. The amendments related to Derivatives and Hedging address partial-term fair value hedges and fair value hedge basis adjustments. Codification Improvements to Topic 815, Derivatives and Hedging are effective for us beginning the first annual reporting period beginning after April 25, 2019. Amendments on Topic 825, Financial Instruments mainly address the scope of the guidance, the requirement for remeasurement under ASC 820 when using the measurement alternative, certain disclosure requirements and which equity securities have to be remeasured at historical exchange rates. For amendments related to ASU 2016-01 (Topic 825, Financial Instruments), the effective date is fiscal years and interim period beginning after December 15, 2019, with early adoption permitted. We do not believe that the adoption of ASU 2019-04 will have an impact on the Company's Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 amends ASC 350-40 and aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. We are currently in the process of evaluating the effect that ASU 2018-15 will have on the Company's Condensed Consolidated Financial Results. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 eliminates, adds and clarifies certain disclosure requirements related to defined benefit plans and other postretirement plans. The guidance is effective for fiscal years ending after December 15, 2020, with early adoption permitted for reporting periods for which financial statements have yet to be issued or made available for issuance. We do not believe that the adoption of ASU 2018-14 will have an impact on the Company's Condensed Consolidated Financial Statements with the exception of new and expanded disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 amends the fair value measurement disclosure requirements of ASC 820, including new, eliminated and modified disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted upon the issuance of this ASU, including interim periods for which financial statements have not yet been issued or made available for issuance. If adopted early, entities are permitted to early adopt the eliminated or modified disclosure requirements and delay the adoption of the new disclosure requirements until their effective date. We do not believe that the adoption of ASU 2018-13 will have an impact on the Company's Condensed Consolidated Financial Statements with the exception of new and expanded disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments and issued subsequent amendments to the initial guidance. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. The ASU also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal periods. Entities may adopt earlier as of the fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. We are currently in the process of implementing this new standard update however we do not anticipate this to have a material impact on the Company's Condensed Consolidated Financial Results with the exception of new and expanded disclosure requirements.
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Revenue Recognition, Contracts with Customers | Description of Revenue Generating Activities We employ sales, marketing and customer service personnel throughout the world who sell and market our products and services to and/or through a large number of distributors, fabricators, converters, e-commerce and mail order fulfillment firms, and contract packaging firms as well as directly to end-users such as food processors, food service businesses, supermarket retailers, pharmaceutical companies, healthcare facilities, medical device manufacturers, and other manufacturers. As discussed in Note 6, "Segments," of the Notes to Condensed Consolidated Financial Statements, our reporting segments include: Food Care and Product Care. Our Food Care applications are largely sold directly to end customers, while most of our Product Care products are sold through business supply distributors. Food Care: Food Care largely serves perishable food processors, predominantly in fresh red meat, smoked and processed meats, poultry and dairy (solids and liquids) markets worldwide, and maintains a leading position in its target applications. Food Care provides integrated packaging materials and equipment solutions to provide food safety, shelf life extension, and total cost optimization with innovative, sustainable packaging that enables customers to reduce costs and enhance their brands in the marketplace. Product Care: Product Care packaging solutions are utilized across many global markets and are especially valuable to e-Commerce, electronics and industrial manufacturing. Product Care solutions are designed to protect valuable goods in shipping, and drive operational excellence for our customers, increasing their order fulfillment velocity while minimizing material usage, dimensional weight and packaging labor requirements. The acquisition of Fagerdala in 2017 and AFP in 2018 enabled us to further expand our protective packaging solutions in electronics, transportation and industrial markets with turnkey, custom-engineered, fabricated solutions. Product Care benefits from the continued expansion of e-Commerce, increasing freight costs, scarcity of labor, and increasing demand for more sustainable packaging. Product Care solutions are largely sold through supply distributors that sell to business/industrial end-users. Product Care solutions are additionally sold directly to fabricators, original equipment manufacturers, contract manufacturers, third-party logistics partners, e-commerce/fulfillment operations, and at various retail centers. Product Care solutions are marketed under industry-leading brands including Bubble Wrap® packaging, Cryovac® performance shrink films, Instapak® polyurethane foam packaging systems, and Korrvu® suspension and retention packaging. Adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and subsequent amendments to the initial guidance, collectively, Topic 606. The Company adopted the new revenue recognition standard using the modified retrospective approach with a cumulative effect adjustment to retained earnings as of the adoption date. The adoption of Topic 606 did not have a significant impact on our condensed consolidated financial statements with the exception of new and expanded disclosures. However, reporting periods prior to Topic 606 adoption may not be comparable due to differences between Topic 606 and the previous accounting guidance. Identify Contract with Customer: For Sealed Air, the determination of whether an arrangement meets the definition of a contract under Topic 606 depends on whether it creates enforceable rights and obligations. While enforceability is a matter of law, we believe that enforceable rights and obligations in a contract must be substantive in order for the contract to be in scope of Topic 606. That is, the penalty for noncompliance must be significant relative to the minimum obligation. Fixed or minimum purchase obligations with penalties for noncompliance are the most common examples of substantive enforceable rights present in our contracts. We determined that the contract term is the period of enforceability outlined by the terms of the contract. This means that in many cases, the term stated in the contract is different than the period of enforceability. After the minimum purchase obligation is met, subsequent sales are treated as separate contracts on a purchase order by purchase order basis. If no minimum purchase obligation exists, each purchase order represents the contract. Performance Obligations: The most common goods and services determined to be distinct performance obligations are consumables/materials, equipment sales, and maintenance. Free on loan and leased equipment is typically identified as a separate lease component in scope of Topic 842. The other goods or services promised in the contract with the customer in most cases do not represent performance obligations because they are neither separate nor distinct, or they are not material in the context of the contract. Transaction Price and Variable Consideration: Sealed Air has many forms of variable consideration present in its contracts with customers, including rebates and other discounts. Sealed Air estimates variable consideration using either the expected value method or the most likely amount method as described in the standard. We include in the transaction price some or all of an amount of variable consideration estimated to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For all contracts that contain a form of variable consideration, Sealed Air estimates at contract inception, and periodically throughout the term of the contract, what volume of goods and/or services the customer will purchase in a given period and determines how much consideration is payable to the customer or how much consideration Sealed Air would be able to recover from the customer based on the structure of the type of variable consideration. In most cases the variable consideration in contracts with customers results in amounts payable to the customer by Sealed Air. Sealed Air adjusts the contract transaction price based on any changes in estimates each reporting period and performs an inception to date cumulative adjustment to the amount of revenue previously recognized. When the contract with a customer contains a minimum purchase obligation, Sealed Air only has enforceable rights to the amount of consideration promised in the minimum purchase obligation through the enforceable term of the contract. This amount of consideration, plus any variable consideration, makes up the transaction price for the contract. Charges for rebates and other allowances are recognized as a deduction from revenue on an accrual basis in the period in which the associated revenue is recorded. When we estimate our rebate accruals, we consider customer-specific contractual commitments including stated rebate rates and history of actual rebates paid. Our rebate accruals are reviewed at each reporting period and adjusted to reflect data available at that time. We adjust the accruals to reflect any differences between estimated and actual amounts. These adjustments of transaction price impact the amount of net sales recognized by us in the period of adjustment. Revenue recognized in the three and six months ended June 30, 2019 from performance obligations satisfied in previous reporting periods was $0.7 million and $1.8 million, respectively, and $1.6 million and $3.3 million in the three and six months ended June 30, 2018, respectively. The Company does not adjust consideration in contracts with customers for the effects of a significant financing component if the Company expects that the period between transfer of a good or service and payment for that good or service will be one year or less. This is expected to be the case for the majority of contracts. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales on the Condensed Consolidated Statements of Operations. Allocation of Transaction Price: Sealed Air determines the standalone selling price for a performance obligation by first looking for observable selling prices of that performance obligation sold on a standalone basis. If an observable price is not available, we estimate the standalone selling price of the performance obligation using one of the three suggested methods in the following order of preference: adjusted market assessment approach, expected cost plus a margin approach, and residual approach. Sealed Air often offers rebates to customers in their contracts that are related to the amount of consumables purchased. We believe that this form of variable consideration should only be allocated to consumables because the entire amount of variable consideration relates to the customer’s purchase of and Sealed Air’s efforts to provide consumables. Additionally, Sealed Air has many contracts that have pricing tied to third-party indices. We believe that variability from index-based pricing should be allocated specifically to consumables because the pricing formulas in these contracts are related to the cost to produce consumables. Transfer of Control: Revenue is recognized upon transfer of control to the customer. Revenue for consumables and equipment sales is recognized based on shipping terms, which is the point in time the customer obtains control of the promised goods. Maintenance revenue is recognized straight-line on the basis that the level of effort is consistent over the term of the contract. Lease components within contracts with customers are recognized in accordance with Topic 842.
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Lessor Lease | Lessor Sealed Air has contractual obligations as a lessor with respect to free on loan equipment and leased equipment, both sales-type and operating. The consideration in a contract that contains both lease and non-lease components is allocated based on the standalone selling price. Our contractual obligations for operating leases can include termination and renewal options. Our contractual obligations for sales-type leases tend to have fixed terms and can include purchase options. We utilize the reasonably certain threshold criteria in determining which options our customers will exercise.
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Lessee Leases | Lessee Sealed Air has contractual obligations as a lessee with respect to warehouses, offices, and manufacturing facilities, IT equipment, automobiles, and material production equipment. Under the leasing standard, ASU 2016-02, leases that are more than one year in duration are capitalized and recorded on the balance sheet. Some of our leases, namely for automobiles and real estate, offer an option to extend the term of such leases. We utilize the reasonably certain threshold criteria in determining which options we will exercise. Furthermore, some of our lease payments are based on index rates with minimum annual increases. These represent fixed payments and are captured in the future minimum lease payments calculation. In determining the discount rate to use in calculating the present value of lease payments, we estimate the rate of interest we would pay on a collateralized loan with the same payment terms as the lease by utilizing our bond yields traded in the secondary market to determine the estimated cost of funds for the particular tenor. We update our assumptions and discount rates on a quarterly basis. The standard also provides practical expedients for an entity’s transition and ongoing accounting. In terms of transition accounting, we elected the ‘package of practical expedients’, which permits us to not reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. In terms of ongoing accounting, we have elected to use the short-term lease recognition exemption for all asset classes. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets. We have also elected the practical expedient to not separate lease and non-lease components for all asset classes, meaning all consideration that is fixed, or in-substance fixed, will be captured as part of our lease components for balance sheet purposes. Furthermore, all variable payments included in lease agreements will be disclosed as variable lease expense when incurred. Generally, variable lease payments are based on usage and common area maintenance. These payments will be included as variable lease expense when recognized.
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Revenue Recognition, Contracts with Customers (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts With Customers Summarized by Segment | For the three and six months ended June 30, 2019 and 2018, revenues from contracts with customers summarized by Segment and Geographic region were as follows:
(1) Amounts by geography has been reclassified from prior year disclosure to reflect adjustments to our regional operating model. As of January 1, 2019, our geographic regions are: North America, EMEA, South America and APAC. Our North American operations include Canada, the United States, Mexico and Central America. Mexico and Central America were previously included in Latin America.
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Opening and Closing Balances of Contract Assets And Contract Liabilities | The closing balances of contract liabilities arising from contracts with customers as of June 30, 2019 and December 31, 2018 were as follows:
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Summary of Estimated Transaction Price from Contracts With Customers Allocated to Performance Obligations Remaining Performance Obligation, Expected Timing Of Satisfaction | Additionally, the following table summarizes the estimated transaction price from contracts with customers allocated to performance obligations or portions of performance obligations that have not yet been satisfied as of June 30, 2019, as well as the expected timing of recognition of that transaction price.
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Lease Payments Captured in Lease Receivable | All lease payments are primarily fixed in nature and therefore captured in the lease receivable. Our lease receivable balance at June 30, 2019 was:
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Assets And Liabilities, Lessee | The following table details our lease obligations included in our Condensed Consolidated Balance Sheets.
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Finance Lease, Future Minimum Annual Rental Commitments | At June 30, 2019, estimated future minimum annual rental commitments under non-cancelable real and personal property leases were as follows:
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Operating Lease, Future Minimum Annual Rental Commitments | At June 30, 2019, estimated future minimum annual rental commitments under non-cancelable real and personal property leases were as follows:
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Schedule of Lease Costs and Other Information | The following lease cost is included in our Condensed Consolidated Statements of Operations:
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Divestitures and Acquisitions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Consideration transferred and the Preliminary Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The following table summarizes the consideration transferred to acquire AFP and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed.
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Schedule of Identifiable Intangible Assets, net and Their useful Life | The following tables summarizes the identifiable intangible assets, net and their useful life.
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Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales and Adjusted EBITDA by Reportable Segments | The following tables show Net Sales and Adjusted EBITDA by reportable segment:
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Reconciliation of Net Earning (Loss) to Total Company Adjusted EBITDA | The following table shows a reconciliation of net earnings (loss) from continuing operations to non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations:
(4) Other Special Items for the three and six months ended June 30, 2019, primarily included fees related to professional services.
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Assets by Reportable Segments | The following table shows assets allocated by reportable segment. Assets allocated by reportable segment include: trade receivables, net; inventory, net; property and equipment, net; goodwill; intangible assets, net; and leased systems, net.
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Inventories, net (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | The following table details our inventories, net:
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Property and Equipment, net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment, Net | The following table details our property and equipment, net:
(1) Upon adoption of ASU 2016-02, $28.3 million of assets that were included in property and equipment, net as of December 31, 2018 were reclassified to other non-current assets on our Condensed Consolidated Balance Sheets. These assets were related to capital leases, primarily for warehouse, office and small manufacturing facilities, IT equipment and automobiles, which are now ROU assets. Refer to Note 4, “Leases,” of the Notes to Condensed Consolidated Financial Statements for additional information on our ROU assets.
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Interest Cost Capitalized And Depreciation And Amortization Expense For Property And Equipment | The following table details our interest cost capitalized and depreciation and amortization expense for property and equipment.
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Goodwill and Identifiable Intangible Assets, net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Goodwill Balances by Segment Reporting Structure | The following table shows our goodwill balances by reportable segment. We review goodwill for impairment on a reporting unit basis annually during the fourth quarter of each year and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. As of June 30, 2019, we did not identify any changes in circumstances that would indicate the carrying value of goodwill may not be recoverable.
(1) There has been no change to our accumulated impairment balance as of June 30, 2019.
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Summary of Identifiable Intangible Assets with Indefinite Useful Lives | The following tables summarize our identifiable intangible assets, net. As of June 30, 2019, there were no impairment indicators present.
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Summary of Identifiable Intangible Assets with Definite Useful Lives | The following tables summarize our identifiable intangible assets, net. As of June 30, 2019, there were no impairment indicators present.
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Remaining Estimated Future Amortization Expense | The following table shows the remaining estimated future amortization expense at June 30, 2019.
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Restructuring Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Approved Restructuring Spending |
(2) Remaining restructuring spend primarily consists of restructuring costs associated with the Company’s Reinvent SEE strategy, and the completion of our efforts to eliminate stranded costs.
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Restructuring and Relocation Activities | The following table details our restructuring activities reflected in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018:
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Components of Restructuring Accrual, Spending and Other Activity and Accrual Balance Remaining | The restructuring accrual, spending and other activity for the six months ended June 30, 2019 and the accrual balance remaining at June 30, 2019 related to these programs were as follows:
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Debt and Credit Facilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Debt Outstanding | Our total debt outstanding consisted of the amounts set forth in the following table:
revolving credit facility, $83.9 million under our European securitization program and $8.9 million of short-term borrowings from various lines of credit.
(4) As of June 30, 2019, our weighted average interest rate on our short-term borrowings outstanding was 3.0% and on our long-term debt outstanding was 5.4%. As of December 31, 2018, our weighted average interest rate on our short-term borrowings outstanding was 2.8% and on our long-term debt outstanding was 5.4%.
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Lines of Credit | The following table summarizes our available lines of credit and committed and uncommitted lines of credit, including the revolving credit facility discussed above, and the amounts available under our accounts receivable securitization programs.
(2) Of the total available lines of credit, $1,137.0 million was committed as of June 30, 2019
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Derivatives and Hedging Activities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments | The following table details the fair value of our derivative instruments included on our Condensed Consolidated Balance Sheets.
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Offsetting Assets | The following table reconciles gross positions without the impact of master netting agreements to the balance sheet classification:
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Offsetting Liabilities | The following table reconciles gross positions without the impact of master netting agreements to the balance sheet classification:
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Effect of Derivative Instruments on Condensed Consolidated Statements of Operations | The following table details the effect of our derivative instruments on our Condensed Consolidated Statements of Operations.
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Fair Value Measurements and Other Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Hierarchy of Financial Instruments | The following table details the fair value hierarchy of our financial instruments:
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Carrying Amounts and Estimated Fair Values of Debt | The table below shows the carrying amounts and estimated fair values of our debt, excluding our lease liabilities.
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Defined Benefit Pension Plans and Other Post-Employment Benefit Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost (Income) | The following tables show the components of our net periodic benefit cost (income) for our defined benefit pension plans for the three and six months ended June 30, 2019 and 2018:
The following table shows the components of our net periodic benefit cost (income) for our other post-retirement employee benefit plans for the three and six months ended June 30, 2019 and 2018:
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Stockholders' Deficit (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Share-based Incentive Compensation Expense | The table below shows our total share-based incentive compensation expense:
(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.
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Number of PSUs Granted and Grant Date Fair Value of PSUs | The number of PSUs granted and the grant date fair value of the PSUs are shown in the following table:
(1) Represents weighted average fair value for PSU awards approved on February 13, 2019 and February 14, 2019.
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Summary of Assumptions Used to Calculate the Grant Date Fair Value | The assumptions used to calculate the grant date fair value of the PSUs based on TSR are shown in the following table:
(1) Represents average of assumptions for PSU awards approved on February 13, 2019 and February 14, 2019.
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Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Comprehensive Income (Loss) | The following table provides details of comprehensive income (loss) for the six months ended June 30, 2019 and 2018:
(2) The ending balance in AOCL includes gains and losses on intra-entity foreign currency transactions. The intra-entity currency translation adjustment was $(0.4) million and $69.9 million as of June 30, 2019 and 2018, respectively.
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Detail of Amounts Reclassified from AOCL | The following table provides detail of amounts reclassified from AOCL:
(2) These accumulated other comprehensive components are included in our derivative and hedging activities. See Note 14, “Derivatives and Hedging Activities,” of the Notes to Condensed Consolidated Financial Statements for additional details.
|
Other Income (Expense), net (Tables) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Other Income (Expense), net | The following table provides details of other income (expense), net:
(1) Cryovac Brasil Ltda., a Sealed Air subsidiary, received a final decision from the Brazilian court regarding a claim in which Sealed Air contended that certain indirect taxes paid were calculated on an incorrect amount. As a result, for the three and six months ended June 30, 2019, we recorded $4.8 million income to Other, net for a claim of overpaid taxes related to 2015 through 2018.
|
Net Earnings (Loss) Per Common Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Net Earnings Per Common Share | The following table shows the calculation of basic and diluted net earnings (loss) per common share under the two-class method:
|
Organization and Basis of Presentation (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
subsidiary
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of wholly-owned subsidiaries | subsidiary | 2 | |
Remeasurement loss | $ | $ 1.3 | $ 2.1 |
Recently Adopted and Issued Accounting Standards (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Jun. 30, 2019 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | $ 79.1 | |
ASU 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Tax Cuts And Jobs Act Of 2017, tax effect, reclassification from Accumulated Other Comprehensive Loss to retained earnings, tax effect | $ 13.4 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | 79.1 | |
Operating lease right-of-use assets | $ 79.1 |
Revenue Recognition, Contracts with Customers - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenue from Contract with Customer [Abstract] | ||||
Revenue recognized from performance obligations satisfied In previous periods | $ 0.7 | $ 1.6 | $ 1.8 | $ 3.3 |
Revenue recognized that was included in contract liability | $ 0.9 | $ 2.3 | $ 1.7 | $ 3.0 |
Revenue Recognition, Contracts with Customers - Contracts with Customer Asset and Liability (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 0.0 | $ 0.0 |
Contract liabilities | $ 11.7 | $ 10.4 |
Leases - Summary of Lease Payments Captured in Lease Receivables (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Short-Term (12 months or less) | $ 3.7 |
Long-Term | 9.1 |
Total | $ 12.8 |
Leases - Lease Obligations (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Other non-current assets: | ||||
Finance leases - ROU assets | $ 44.5 | $ 44.5 | ||
Finance leases - Accumulated depreciation | (11.5) | (11.5) | ||
Operating leases - ROU assets | 90.8 | 90.8 | ||
Operating leases - Accumulated depreciation | (13.9) | (13.9) | ||
Total lease assets | 109.9 | 109.9 | ||
Current portion of long-term debt: | ||||
Finance leases | (7.9) | (7.9) | ||
Operating leases | (23.7) | (23.7) | ||
Long-term debt, less current portion: | ||||
Finance leases | (27.3) | (27.3) | ||
Operating leases | (55.4) | (55.4) | ||
Unrealized gain on derivative instruments, net of taxes | (4.5) | $ 23.6 | 1.0 | $ 13.7 |
Total lease liabilities | $ (114.3) | $ (114.3) |
Leases - Schedule of Lease Commitments (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Operating leases | |
Remainder of 2019 | $ 16.1 |
2020 | 26.0 |
2021 | 18.8 |
2022 | 11.5 |
2023 | 7.3 |
Thereafter | 17.0 |
Total lease payments | 96.7 |
Less: Interest | (17.6) |
Present value of lease liabilities | 79.1 |
Finance leases | |
Remainder of 2019 | 5.0 |
2020 | 9.0 |
2021 | 7.4 |
2022 | 4.4 |
2023 | 2.7 |
Thereafter | 15.1 |
Total lease payments | 43.6 |
Less: Interest | (8.4) |
Present value of lease liabilities | $ 35.2 |
Divestitures and Acquisitions - Divestitures (Details) - Polystyrene Food Tray Business - Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations R$ in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
BRL (R$)
|
Dec. 31, 2018
USD ($)
|
Mar. 19, 2018
BRL (R$)
|
Aug. 01, 2017
BRL (R$)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gross purchase price | R$ 1.6 | $ 0.4 | R$ 8.2 | R$ 26.9 | ||
Gain on sale | $ 1.0 | $ 1.0 |
Divestitures and Acquisitions - Acquisitions Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
May 01, 2019 |
Aug. 01, 2018 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,957.2 | $ 1,947.6 | ||
Product Care | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 1,431.4 | $ 1,427.9 | ||
Automated Packaging Systems | ||||
Business Acquisition [Line Items] | ||||
Cash paid to acquire business | $ 510.0 | |||
Automated Packaging Systems | APS European Employees | ||||
Business Acquisition [Line Items] | ||||
Cash paid to acquire business | $ 60.0 | |||
Other Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Cash paid to acquire business | 23.4 | |||
Goodwill | 6.0 | |||
AFP, Inc | Product Care | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 21.6 | $ 22.7 | ||
Percentage of shares acquired | 100.00% | |||
Consideration transferred | $ 74.1 | |||
Cash acquired from acquisition | $ 3.3 |
Divestitures and Acquisitions - Schedule of Intangible Assets, net and Useful Live (Details) - Product Care - AFP, Inc - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Aug. 01, 2018 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, net | $ 19.3 | $ 18.6 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, net | $ 14.9 | |
Useful life | 11 years | |
Trademarks and tradenames | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, net | $ 4.4 | |
Useful life | 5 years |
Segments - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Inventories, net (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 93.2 | $ 79.9 |
Work in process | 150.6 | 142.4 |
Finished goods | 352.3 | 322.6 |
Total | $ 596.1 | $ 544.9 |
Property and Equipment, net - Schedule of Property and Equipment, net (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Property, Plant and Equipment [Abstract] | |||
Land and improvements | $ 42.3 | $ 41.2 | |
Buildings | 729.6 | 728.6 | |
Machinery and equipment | 2,379.2 | 2,325.7 | |
Other property and equipment | 124.7 | 135.6 | |
Construction-in-progress | 153.3 | 155.1 | |
Property and equipment, gross | 3,429.1 | 3,386.2 | |
Accumulated depreciation and amortization | (2,379.0) | (2,350.0) | |
Property and equipment, net | 1,050.1 | 1,036.2 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | $ (1,050.1) | $ (1,036.2) | |
ASU 2016-02 | |||
Property, Plant and Equipment [Abstract] | |||
Property and equipment, net | $ (28.3) | ||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | 28.3 | ||
Non-current assets | $ 28.3 |
Property and Equipment, net - Interest Cost Capitalized and Depreciation and Amortization Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Property, Plant and Equipment [Abstract] | ||||
Interest cost capitalized | $ 2.1 | $ 1.5 | $ 3.9 | $ 3.7 |
Depreciation and amortization expense for property and equipment | $ 28.8 | $ 29.7 | $ 57.0 | $ 58.6 |
Goodwill and Identifiable Intangible Assets, net - Summary of Goodwill Balances by Reportable Segment (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Goodwill [Roll Forward] | ||
Gross Carrying Value | $ 2,137.8 | |
Accumulated impairment | $ (190.2) | |
Carrying Value | 1,947.6 | |
Acquisition, purchase price and other adjustments | 9.1 | |
Currency translation | 0.5 | |
Carrying Value | 1,957.2 | |
Food Care | ||
Goodwill [Roll Forward] | ||
Carrying Value | 519.7 | |
Acquisition, purchase price and other adjustments | 6.0 | |
Currency translation | 0.1 | |
Carrying Value | 525.8 | |
Product Care | ||
Goodwill [Roll Forward] | ||
Carrying Value | 1,427.9 | |
Acquisition, purchase price and other adjustments | 3.1 | |
Currency translation | 0.4 | |
Carrying Value | 1,431.4 | |
Operating Segments | Food Care | ||
Goodwill [Roll Forward] | ||
Gross Carrying Value | 568.9 | |
Accumulated impairment | (49.2) | |
Operating Segments | Product Care | ||
Goodwill [Roll Forward] | ||
Gross Carrying Value | $ 1,568.9 | |
Accumulated impairment | $ (141.0) |
Goodwill and Identifiable Intangible Assets, net - Remaining Estimated Future Amortization Expense (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Year | ||
Remainder of 2019 | $ 7.9 | |
2020 | 15.0 | |
2021 | 11.7 | |
2022 | 7.9 | |
Thereafter | 49.1 | |
Net | $ 91.6 | $ 92.8 |
Accounts Receivable Factoring Agreements (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Transfers and Servicing [Abstract] | |||||
Amounts factored under program | $ 157.4 | $ 157.4 | $ 249.8 | ||
Fees associated with transfer of receivables | $ 0.8 | $ 0.5 | $ 1.3 | $ 1.0 |
Restructuring Activities - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 29.3 | $ 7.1 | $ 36.7 | $ 15.7 | |
Other related costs | 21.3 | $ (0.4) | $ 38.0 | $ 1.8 | |
Restructuring Program term (in years) | 3 years | ||||
Restructuring accrual expected to pay | 52.4 | $ 52.4 | $ 33.5 | ||
Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 29.3 | 36.7 | |||
Other related costs | 21.3 | 38.0 | |||
Restructuring accrual expected to pay | 52.4 | 52.4 | |||
Restructuring accrual remaining | 2.5 | 2.5 | |||
Minimum | Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Other related costs | 230.0 | ||||
Approved cumulative restructuring spend | 840.0 | 840.0 | |||
Maximum | Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Other related costs | 245.0 | ||||
Approved cumulative restructuring spend | $ 885.0 | $ 885.0 |
Restructuring Activities - By Condensed Consolidated Statements of Operations Location (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Continuing Operations: | ||||
Other related costs | $ 21.3 | $ (0.4) | $ 38.0 | $ 1.8 |
Restructuring charges | 29.3 | 7.1 | 36.7 | 15.7 |
Total charges | 50.6 | 7.5 | 74.7 | 18.3 |
Capital expenditures | 1.8 | 0.3 | 2.3 | 0.5 |
Continuing Operations | ||||
Continuing Operations: | ||||
Other related costs | 21.3 | 0.4 | 38.0 | 2.6 |
Restructuring charges | $ 29.3 | $ 7.1 | $ 36.7 | $ 15.7 |
Restructuring Activities - Restructuring Accrual, Spending and Other Activity and Accrual Balance Remaining (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Restructuring accrual at beginning of period | $ 37.5 |
Accrual and accrual adjustments | 36.7 |
Cash payments during 2019 | (19.9) |
Effect of changes in foreign currency exchange rates | 0.6 |
Restructuring accrual at end of period | $ 54.9 |
Debt and Credit Facilities - Short-term Borrowings (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Used lines of credit | $ 265.3 | $ 232.8 |
Unused lines of credit | 1,077.5 | 1,135.3 |
Total available lines of credit | 1,342.8 | $ 1,368.1 |
Committed Line Of Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Total available lines of credit | $ 1,137.0 |
Derivatives and Hedging Activities - Offsetting Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Offsetting Assets [Line Items] | ||
Gross position | $ 2.7 | $ 3.5 |
Other Current Assets | ||
Offsetting Assets [Line Items] | ||
Gross position | 2.7 | 3.5 |
Impact of master netting agreements | (1.8) | (1.4) |
Net amounts recognized on the Condensed Consolidated Balance Sheets | $ 0.9 | $ 2.1 |
Derivatives and Hedging Activities - Offsetting Liabilities (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Offsetting Liabilities [Line Items] | ||
Gross position | $ (4.0) | $ (2.9) |
Other Current Liabilities | ||
Offsetting Liabilities [Line Items] | ||
Gross position | (4.0) | (2.9) |
Impact of master netting agreements | 1.8 | 1.4 |
Net amounts recognized on the Condensed Consolidated Balance Sheets | $ (2.2) | $ (1.5) |
Defined Benefit Pension Plans and Other Post-Employment Benefit Plans - Components of Net Periodic Benefit Cost (Income) for Defined Benefit Pension Plans (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Components of net periodic benefit cost (income): | ||||
Service cost | $ 1.0 | $ 1.2 | $ 2.0 | $ 2.2 |
Interest cost | 5.5 | 5.5 | 10.9 | 11.0 |
Expected return on plan assets | (7.9) | (9.7) | (15.8) | (19.3) |
Amortization of net prior service cost | 0.1 | 0.0 | 0.1 | 0.0 |
Amortization of net actuarial loss | 1.3 | 0.8 | 2.5 | 1.7 |
Net periodic cost (income) | 0.0 | (2.2) | (0.3) | (4.4) |
Cost of settlement | 0.1 | 0.1 | 0.3 | 0.1 |
Total benefit cost (income) | 0.1 | (2.1) | 0.0 | (4.3) |
U.S. | ||||
Components of net periodic benefit cost (income): | ||||
Service cost | 0.0 | 0.1 | 0.0 | 0.1 |
Interest cost | 1.8 | 1.6 | 3.5 | 3.2 |
Expected return on plan assets | (1.8) | (2.2) | (3.6) | (4.4) |
Amortization of net prior service cost | 0.0 | 0.0 | 0.0 | 0.0 |
Amortization of net actuarial loss | 0.4 | 0.2 | 0.7 | 0.5 |
Net periodic cost (income) | 0.4 | (0.3) | 0.6 | (0.6) |
Cost of settlement | 0.0 | 0.0 | 0.0 | 0.0 |
Total benefit cost (income) | 0.4 | (0.3) | 0.6 | (0.6) |
International | ||||
Components of net periodic benefit cost (income): | ||||
Service cost | 1.0 | 1.1 | 2.0 | 2.1 |
Interest cost | 3.7 | 3.9 | 7.4 | 7.8 |
Expected return on plan assets | (6.1) | (7.5) | (12.2) | (14.9) |
Amortization of net prior service cost | 0.1 | 0.0 | 0.1 | 0.0 |
Amortization of net actuarial loss | 0.9 | 0.6 | 1.8 | 1.2 |
Net periodic cost (income) | (0.4) | (1.9) | (0.9) | (3.8) |
Cost of settlement | 0.1 | 0.1 | 0.3 | 0.1 |
Total benefit cost (income) | $ (0.3) | $ (1.8) | $ (0.6) | $ (3.7) |
Defined Benefit Pension Plans and Other Post-Employment Benefit Plans - Net Period Benefit Costs (income) for Post-retirement Employee Benefit Plans (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 5.5 | $ 5.5 | $ 10.9 | $ 11.0 |
Amortization of net prior service credit | 0.1 | 0.0 | 0.1 | 0.0 |
Amortization of net actuarial gain | 1.3 | 0.8 | 2.5 | 1.7 |
Net periodic cost (income) | 0.0 | (2.2) | (0.3) | (4.4) |
Other employee benefit plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 0.4 | 0.4 | 0.8 | 0.7 |
Amortization of net prior service credit | (0.1) | (0.1) | (0.2) | (0.2) |
Amortization of net actuarial gain | (0.1) | (0.1) | (0.1) | (0.1) |
Net periodic cost (income) | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.4 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate, percent | 32.50% | 28.70% | 32.20% | 154.10% |
Decrease in the valuation allowance | $ 8.1 | $ 8.1 | ||
Increase in unrecognized tax benefits | $ 7.7 | $ 10.7 | $ 9.7 | $ 14.0 |
Commitments and Contingencies (Details) - North American Foam Trays And Absorbent Pads - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from sale of business | $ 75.6 | |
Litigation settlement amount | $ 59.0 |
Stockholders' Deficit - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 11, 2019 |
May 16, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Dividends Payable [Line Items] | ||||||
Quarterly cash dividend (in dollars per share) | $ 0.16 | $ 160,000.00 | $ 160,000.00 | $ 320,000.00 | $ 320,000.00 | |
Amount of quarterly cash dividend declared | $ 24.7 | |||||
Subsequent Event | ||||||
Dividends Payable [Line Items] | ||||||
Quarterly cash dividend (in dollars per share) | $ 0.16 |
Stockholders' Deficit - Share-based Compensation Omnibus Incentive Plan (Details) - 2014 Omnibus Incentive Plan - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
May 22, 2014 |
|
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Maximum number of shares of common stock authorized (in shares) | 4,250,000 | |
Additional shares added by amended plan (in shares) | 2,199,114 |
Stockholders' Deficit - Total Share-based Incentive Compensation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Equity [Abstract] | ||||
Total share-based incentive compensation expense | $ 4.8 | $ 7.1 | $ 13.2 | $ 14.6 |
Stockholders' Deficit - Number of PSUs Granted and Grant Date Fair Value of PSUs (Details) |
Feb. 14, 2019
$ / shares
shares
|
---|---|
TSR | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of units granted (in shares) | shares | 49,819 |
Fair value on grant date (in usd per share) | $ / shares | $ 58.25 |
ROIC | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of units granted (in shares) | shares | 66,807 |
Fair value on grant date (in usd per share) | $ / shares | $ 42.16 |
Adjusted EBITDA | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of units granted (in shares) | shares | 66,807 |
Fair value on grant date (in usd per share) | $ / shares | $ 42.16 |
Stockholders' Deficit - Summary of Assumptions Used to Calculate the Grant Date Fair Value (Details) - TSR |
Feb. 14, 2019 |
---|---|
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected price volatility | 22.80% |
Risk-free interest rate | 2.50% |
Other Income (Expense), net (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Other Income (Expense) [Line Items] | ||||
Net foreign exchange transaction loss | $ (1.5) | $ (2.0) | $ (2.6) | $ (13.7) |
Bank fee expense | (1.3) | (1.4) | (2.5) | (2.4) |
Pension income other than service costs | 0.5 | 2.7 | 0.9 | 5.2 |
Other, net | 6.2 | 1.8 | 7.4 | 0.0 |
Other income (expense), net | 3.9 | $ 1.1 | 3.2 | $ (10.9) |
Claim For Overpayment Of Income Taxes | ||||
Other Income (Expense) [Line Items] | ||||
Other, net | $ 4.8 | $ 4.8 |
Label | Element | Value |
---|---|---|
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,700,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,700,000 |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,400,000) |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (3,400,000) |
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