Form 10-K
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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SEALED AIR CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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65-0654331
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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2415 Cascade Pointe Boulevard,
Charlotte, North Carolina
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28208
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.10 per share
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Emerging growth company
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☐
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Non-accelerated filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 1.
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Business
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•
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extensive global reach, by which we leverage our strengths across our operations in
58
countries/regions to reach customers in
122
countries/regions;
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approximately
15,000
employees representing industry-leading expertise in package design, sales, service and engineering and in food science;
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leading brands, such as Cryovac
®
packaging technology, Bubble Wrap® brand cushioning, Jiffy
®
protective mailers, Instapak® foam-in-place systems and I-Pack
®
and e-Cube™ automated packaging systems;
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technology leadership with an emphasis on proprietary, patented and sustainable technologies;
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high mix of automated solutions and services that eliminate waste;
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total systems offering that includes specialty materials and formulations, equipment systems and services; and
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solid cash flow generation from premium solutions to meet our customers’ needs, productivity improvements, working capital management and an asset-light business model.
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Food Care (including Medical Applications and New Ventures businesses); and
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Product Care.
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Argentina
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Egypt
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Italy
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Peru
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Sweden
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Australia
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Finland
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Jamaica
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Philippines
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Switzerland
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Austria
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France
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Japan
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Poland
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Taiwan
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Belgium
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Germany
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Kenya
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Portugal
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Thailand
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Brazil
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Greece
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Luxembourg
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Romania
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Turkey
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Canada
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Guatemala
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Malaysia
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Russia
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Ukraine
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Chile
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Hong Kong
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Mexico
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Saudi Arabia
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United Arab Emirates
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China
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Hungary
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Morocco
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Singapore
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United Kingdom
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Colombia
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India
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Netherlands
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Slovakia
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Uruguay
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Costa Rica
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Indonesia
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New Zealand
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South Africa
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Czech Republic
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Ireland
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Nigeria
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South Korea
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Denmark
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Israel
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Norway
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Spain
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three comprehensive Packaging Development and Innovation laboratories located in the U.S. and Italy;
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seven Equipment Design Centers in the U.S., France, Switzerland, Italy and Singapore targeting innovation in equipment and digital solutions;
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four Customer Application laboratories in India, China, Singapore and Taipei; and
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thirty-five Package Design and Applications Centers for Product Care globally.
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foreign currency exchange controls and tax rates;
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foreign currency exchange rate fluctuations, including devaluations;
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the potential for changes in regional and local economic conditions, including local inflationary pressures;
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restrictive governmental actions such as those on transfer or repatriation of funds and trade protection matters, including antidumping duties, tariffs, embargoes and prohibitions or restrictions on acquisitions or joint ventures;
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changes in laws and regulations, including the laws and policies of the U.S. affecting trade and foreign investment;
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the difficulty of enforcing agreements and collecting receivables through certain foreign legal systems;
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variations in protection of intellectual property and other legal rights;
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more expansive legal rights of foreign unions or works councils;
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changes in labor conditions and difficulties in staffing and managing international operations;
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import and export delays caused, for example, by an extended strike at the port of entry, could cause a delay in our supply chain operations;
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social plans that prohibit or increase the cost of certain restructuring actions;
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the potential for nationalization of enterprises or facilities; and
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unsettled political conditions and possible terrorist attacks against U.S. or other interests.
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incur additional indebtedness;
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pay dividends or make other distributions or repurchase or redeem capital stock;
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prepay, redeem or repurchase certain debt;
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make loans and investments;
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sell assets;
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incur liens;
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enter into transactions with affiliates;
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alter the businesses we conduct;
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enter into agreements restricting our subsidiaries’ ability to pay dividends; and
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consolidate, merge or sell all or substantially all of our assets.
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limited in how we conduct our business;
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unable to respond to changing market conditions;
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unable to raise additional debt or equity financing to operate during general economic or business downturns or to repay other indebtedness when it becomes due; or
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unable to compete effectively or to take advantage of new business opportunities.
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Item 2.
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Properties
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Geographic Region
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Number of Manufacturing Facilities
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North America
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32
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Europe, Middle East and Africa ("EMEA")
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26
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Latin America
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10
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Asia, Australia and New Zealand ("APAC")
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26
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Total
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94
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Name and Current Position
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Age as of January 31, 2018
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First Elected to Current Position
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First Elected an Officer
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Edward L. Doheny II
President, Chief Executive Officer and Director |
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55
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2018
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2017
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Emile Z. Chammas
Senior Vice President
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49
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2010
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2010
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Kenneth P. Chrisman
Senior Vice President
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53
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2014
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2014
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Karl R. Deily
Senior Vice President
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60
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2006
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2006
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William G. Stiehl
Acting Chief Financial Officer, Chief Accounting Officer and Controller
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56
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2013
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2013
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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2017
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High
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Low
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Dividend
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First Quarter
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$
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50.22
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$
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43.30
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$
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0.16
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Second Quarter
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46.41
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42.30
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0.16
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Third Quarter
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46.12
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41.72
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0.16
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Fourth Quarter
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49.66
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43.01
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0.16
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2016
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High
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Low
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Dividend
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First Quarter
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$
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48.53
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$
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38.36
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$
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0.13
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Second Quarter
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52.68
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43.55
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0.16
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Third Quarter
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49.41
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45.11
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0.16
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Fourth Quarter
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48.84
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42.45
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0.16
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Total Cash
Dividends Paid
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Total Cash Dividends Paid per
Common Share
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(In millions)
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2010
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$
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79.7
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$
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0.50
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2011
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87.4
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0.52
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2012
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100.9
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0.52
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2013
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102.0
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0.52
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2014
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110.9
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0.52
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2015
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106.8
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0.52
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2016
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121.6
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0.61
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2017
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119.7
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0.64
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Total
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$
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829.0
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Period
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Total Number of Shares Purchase
(i)
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Announced Plans or Programs
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Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
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(a)
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(b)
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(c)
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(d)
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Balance as of September 30, 2017
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$
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1,490,004,316
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October 1, 2017 through October 31, 2017
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6,691
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—
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—
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1,490,004,316
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November 1, 2017 through November 30, 2017
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9,580,524
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44.99
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9,575,792
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1,057,017,974
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December 1, 2017 through December 31, 2017
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2,299,461
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48.58
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2,263,800
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947,060,470
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Total
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11,886,676
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11,839,592
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$
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947,060,470
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(i)
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We acquired shares by means of (i) a share trading plan we entered into with our brokers and pursuant to our publicly announced program (described below), (ii) accelerated share repurchase programs we entered into or terminated during the quarter, (iii) shares withheld from awards under our Omnibus Incentive Plan (the successor plan to our 2005 Contingent Stock Plan) pursuant to the provision thereof that permits minimum tax withholding obligations or other legally required charges to be satisfied by having us withhold shares from an award under that plan and (iv) shares reacquired pursuant to the forfeiture provision of our Omnibus Incentive Plan. We report price calculations in column (b) in the table above only for shares purchased as part of our publicly announced program, when applicable. For shares withheld for minimum tax withholding obligations or other legally required charges, we withhold shares at a price equal to their fair market value. We do not make payments for shares reacquired by the Company pursuant to the forfeiture provision of the Omnibus Incentive Plan as those shares are simply forfeited.
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Period
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Shares withheld for tax obligations and charges
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Average withholding price for shares in column “a”
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Forfeitures under Omnibus Incentive Plan
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Total
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(a)
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(b)
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(c)
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(d)
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October 2017
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1,647
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$
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44.16
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5,044
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6,691
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November 2017
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—
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—
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4,732
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4,732
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December 2017
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35,661
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49.30
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—
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35,661
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Total
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37,308
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9,776
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47,084
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Year Ended December 31,
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(In millions, except share data)
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2017
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2016
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2015
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2014
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2013
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Consolidated Statements of Operations Data
(3)
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Net sales
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$
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4,461.6
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$
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4,211.3
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$
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4,410.3
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$
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4,875.0
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$
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4,825.8
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Gross profit
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1,417.2
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1,404.9
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1,455.2
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1,438.3
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1,360.0
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Operating profit
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596.0
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631.4
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617.4
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553.8
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520.0
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Loss on debt redemption
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—
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(0.1
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)
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(110.0
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)
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(102.5
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)
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(36.3
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)
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Earnings from continuing operations before income tax provision
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393.3
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387.9
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291.4
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186.4
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104.1
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Net earnings (loss) from continuing operations
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62.8
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292.3
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158.8
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164.6
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13.4
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Gain on sale of discontinued operations, net of taxes
(1)(2)
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640.7
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—
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—
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—
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22.9
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Net earnings from discontinued operations, net of tax
(1)(2)
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111.4
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194.1
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176.6
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93.5
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89.5
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Net earnings available to common stockholders
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$
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814.9
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$
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486.4
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$
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335.4
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$
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258.1
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$
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125.8
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Basic and diluted net earnings (loss) per common share:
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Basic
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||||||||||
Continuing operations
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$
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0.34
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$
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1.50
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$
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0.78
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$
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0.78
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$
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0.07
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Discontinued operations
(1)(2)
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3.99
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0.99
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0.85
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0.44
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0.58
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Net earnings per common share—basic
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$
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4.33
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$
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2.49
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$
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1.63
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$
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1.22
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$
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0.65
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Diluted
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Continuing operations
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$
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0.33
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$
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1.48
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$
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0.77
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$
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0.77
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$
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0.06
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Discontinued operations
(1)(2)
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3.96
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0.98
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0.85
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0.43
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0.52
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Net earnings per common share—diluted
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$
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4.29
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$
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2.46
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$
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1.62
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$
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1.20
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$
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0.58
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Dividends per common share
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$
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0.64
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$
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0.61
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$
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0.52
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$
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0.52
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$
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0.52
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Consolidated Balance Sheets Data:
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|||||
Total assets
|
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$
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5,280.3
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$
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7,415.5
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$
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7,395.1
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|
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$
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7,912.0
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$
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9,132.3
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|
Settlement agreement and related accrued interest
|
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—
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—
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—
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—
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925.1
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|
|||||
Long-term debt, less current portion
(1)(2)
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3,230.5
|
|
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3,762.6
|
|
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4,076.7
|
|
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4,014.1
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|
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3,920.6
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|||||
Total stockholders’ equity
|
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152.3
|
|
|
609.7
|
|
|
527.0
|
|
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1,162.8
|
|
|
1,416.3
|
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|||||
Consolidated Cash Flows Data
(3)
:
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|
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|
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|
|||||
Net cash provided by (used in) operating activities
|
|
$
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424.4
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|
|
$
|
906.9
|
|
|
$
|
982.1
|
|
|
$
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(218.8
|
)
|
|
$
|
640.4
|
|
Net cash provided by (used in) investing activities
|
|
1,813.6
|
|
|
(314.8
|
)
|
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(60.0
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)
|
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(126.3
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)
|
|
(113.9
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)
|
|||||
Net cash used in financing activities
|
|
(1,864.3
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)
|
|
(540.9
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)
|
|
(788.7
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)
|
|
(321.2
|
)
|
|
(319.9
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)
|
|||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
$
|
149.3
|
|
|
$
|
214.0
|
|
|
$
|
213.3
|
|
|
$
|
107.5
|
|
|
$
|
120.5
|
|
Share-based incentive compensation
|
|
44.9
|
|
|
59.9
|
|
|
61.2
|
|
|
46.4
|
|
|
24.1
|
|
|||||
Capital expenditures
|
|
(183.8
|
)
|
|
(275.7
|
)
|
|
(184.0
|
)
|
|
129.7
|
|
|
102.3
|
|
|
(1)
|
Operating results for the Diversey Care division and the Food Hygiene and Cleaning business within our Food Care division were reclassified to discontinued operations in 2013 through the sale on September 6, 2017. The related assets and liabilities were reclassified to assets and liabilities held for sale as of December 31, 2013. See Note 3, "Discontinued Operations, Divestitures and Acquisitions," of the Notes to Consolidated Financial Statements for further information about the sale of the Diversey Care division and the Food Hygiene and Cleaning business within our Food Care division.
|
(2)
|
Operating results for the rigid medical packaging business were reclassified to discontinued operations in 2013. See Note 3, “Discontinued Operations, Divestitures and Acquisitions,” of the Notes to Consolidated Financial Statements in our previously filed Form 10-K for the year ended December 31, 2013 for further information about the sale of our rigid medical packaging business in 2013.
|
(3)
|
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a discussion of the factors that contributed to our consolidated operating results and our consolidated cash flows for the three years ended December 31, 2017.
|
•
|
Food Care (including Medical Applications and New Ventures businesses); and
|
•
|
Product Care.
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(In millions, except per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
||||||||
Net sales
|
|
$
|
4,461.6
|
|
|
$
|
4,211.3
|
|
|
$
|
4,410.3
|
|
|
5.9
|
%
|
|
(4.5
|
)%
|
Gross profit
|
|
$
|
1,417.2
|
|
|
$
|
1,404.9
|
|
|
$
|
1,455.2
|
|
|
0.9
|
%
|
|
(3.5
|
)%
|
As a % of net sales
|
|
31.8
|
%
|
|
33.4
|
%
|
|
33.0
|
%
|
|
|
|
|
|||||
Operating profit
|
|
$
|
596.0
|
|
|
$
|
631.4
|
|
|
$
|
617.4
|
|
|
(5.6
|
)%
|
|
2.3
|
%
|
As a % of net sales
|
|
13.4
|
%
|
|
15.0
|
%
|
|
14.0
|
%
|
|
|
|
|
|||||
Net earnings from continuing operations
|
|
$
|
62.8
|
|
|
$
|
292.3
|
|
|
$
|
158.8
|
|
|
(78.5
|
)%
|
|
84.1
|
%
|
Gain loss on discontinued operations, net of taxes
|
|
$
|
640.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
100.0
|
%
|
|
—
|
%
|
Net earnings from discontinued operations, net of taxes
|
|
$
|
111.4
|
|
|
$
|
194.1
|
|
|
$
|
176.6
|
|
|
(42.6
|
)%
|
|
9.9
|
%
|
Net earnings available to common stockholders
|
|
$
|
814.9
|
|
|
$
|
486.4
|
|
|
$
|
335.4
|
|
|
67.5
|
%
|
|
45.0
|
%
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.34
|
|
|
$
|
1.50
|
|
|
$
|
0.78
|
|
|
(77.3
|
)%
|
|
92.3
|
%
|
Discontinued operations
|
|
3.99
|
|
|
0.99
|
|
|
0.85
|
|
|
303.0
|
%
|
|
16.5
|
%
|
|||
Net earnings per common share - basic
|
|
$
|
4.33
|
|
|
$
|
2.49
|
|
|
$
|
1.63
|
|
|
73.9
|
%
|
|
52.8
|
%
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.33
|
|
|
$
|
1.48
|
|
|
$
|
0.77
|
|
|
(77.7
|
)%
|
|
92.2
|
%
|
Discontinued operations
|
|
3.96
|
|
|
0.98
|
|
|
0.85
|
|
|
304.1
|
%
|
|
15.3
|
%
|
|||
Net earnings per common share - diluted
|
|
$
|
4.29
|
|
|
$
|
2.46
|
|
|
$
|
1.62
|
|
|
74.4
|
%
|
|
51.9
|
%
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
186.9
|
|
|
194.3
|
|
|
203.9
|
|
|
|
|
|
|||||
Diluted
|
|
188.9
|
|
|
197.2
|
|
|
206.7
|
|
|
|
|
|
|||||
Non-U.S. GAAP Adjusted EBITDA from continuing operations
(1)
|
|
$
|
833.3
|
|
|
$
|
809.2
|
|
|
$
|
850.1
|
|
|
3.0
|
%
|
|
(4.8
|
)%
|
Non-U.S. GAAP Adjusted EPS from continuing operations
(2)(3)
|
|
$
|
1.81
|
|
|
$
|
1.70
|
|
|
$
|
1.84
|
|
|
6.5
|
%
|
|
(7.6
|
)%
|
|
(1)
|
See Note 4, “Segments” of the Notes to Consolidated Financial Statements for a reconciliation of U.S. GAAP net earnings to Non-U.S. GAAP Adjusted EBITDA.
|
(2)
|
See “Diluted Net Earnings per Common Share” below for a reconciliation of our U.S. GAAP EPS to our non-U.S. GAAP adjusted EPS.
|
(3)
|
Represents U.S. GAAP EPS adjusted for the net effect of Special Items, which are certain specified infrequent, non-operational or one-time costs/credits.
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(In millions, except per share data)
|
|
Net Earnings
|
|
EPS
|
|
Net Earnings
|
|
EPS
|
|
Net Earnings
|
|
EPS
|
||||||||||||
U.S. GAAP net earnings and EPS available to common stockholders from continuing operations
(1)
|
|
$
|
62.8
|
|
|
$
|
0.33
|
|
|
$
|
292.3
|
|
|
$
|
1.48
|
|
|
$
|
158.8
|
|
|
$
|
0.77
|
|
Special Items
(2)
|
|
279.8
|
|
|
1.48
|
|
|
42.4
|
|
|
0.22
|
|
|
221.1
|
|
|
1.07
|
|
||||||
Non-U.S. GAAP adjusted net earnings and adjusted EPS available to common stockholders from continuing operations
|
|
$
|
342.6
|
|
|
$
|
1.81
|
|
|
$
|
334.7
|
|
|
$
|
1.70
|
|
|
$
|
379.9
|
|
|
$
|
1.84
|
|
Weighted average number of common shares outstanding – Diluted
|
|
|
|
188.9
|
|
|
|
|
197.2
|
|
|
|
|
206.7
|
|
|
(1)
|
Net earnings per common share are calculated under the two-class method.
|
(2)
|
Special Items include the following:
|
|
|
Year Ended December 31,
|
||||||||||
(In millions, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Special Items:
|
|
|
|
|
|
|
||||||
Restructuring and other charges
(1)
|
|
$
|
(12.1
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(48.7
|
)
|
Other restructuring associated costs included in cost of sales and selling, general and administrative expenses
|
|
(14.3
|
)
|
|
(19.8
|
)
|
|
(25.7
|
)
|
|||
SARs
|
|
2.6
|
|
|
(0.7
|
)
|
|
(3.9
|
)
|
|||
Foreign currency exchange loss related to Venezuelan subsidiaries
|
|
—
|
|
|
(1.7
|
)
|
|
(27.2
|
)
|
|||
Charges related to ceasing operations in Venezuela
(1)
|
|
—
|
|
|
(48.5
|
)
|
|
—
|
|
|||
Loss on debt redemption and refinancing activities
|
|
—
|
|
|
(0.1
|
)
|
|
(110.0
|
)
|
|||
(Loss) gain on sale of North American foam trays and absorbent pads business and European food trays business
|
|
—
|
|
|
(1.8
|
)
|
|
13.4
|
|
|||
Charges related to acquisitions and divestitures and the sale of property, plant and equipment
|
|
(15.5
|
)
|
|
—
|
|
|
—
|
|
|||
Charges incurred related to the sale of Diversey
|
|
(68.6
|
)
|
|
(1.4
|
)
|
|
—
|
|
|||
Settlement/curtailment benefits related to the sale of Diversey pension plans
|
|
13.5
|
|
|
—
|
|
|
—
|
|
|||
Other Special Items
(2)
|
|
(3.1
|
)
|
|
(0.6
|
)
|
|
(1.2
|
)
|
|||
Pre-tax impact of Special Items
|
|
$
|
(97.5
|
)
|
|
$
|
(77.1
|
)
|
|
$
|
(203.3
|
)
|
Tax impact of Special Items and Tax Special Items
(3)
|
|
(182.3
|
)
|
|
34.7
|
|
|
(17.8
|
)
|
|||
Net impact of Special Items
|
|
$
|
(279.8
|
)
|
|
$
|
(42.4
|
)
|
|
$
|
(221.1
|
)
|
Weighted average number of common shares outstanding - Diluted
|
|
188.9
|
|
|
197.2
|
|
|
206.7
|
|
|||
Earnings per share impact from Special Items
|
|
$
|
(1.48
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(1.07
|
)
|
|
(1)
|
Due to the ongoing challenging economic situation in Venezuela, the Company approved a program in the second quarter of 2016 to cease operations in the country. Refer to Note 2, “Summary of Significant Accounting Policies and Recently Issued Accounting Standards" of the Notes to the Consolidated Financial Statements for further details.
|
(2)
|
Other Special Items for the year ended
December 31, 2017
primarily included transaction costs related to reorganizations. Other Special Items for the year ended
December 31, 2016
primarily included legal fees associated with restructuring and immaterial divestitures and acquisitions partially offset by a reduction in a non-income tax
|
(3)
|
Refer to Note 1 of the following table for a description of Tax Special Items.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. GAAP Earnings before income tax provision
|
|
$
|
393.3
|
|
|
$
|
387.9
|
|
|
$
|
291.4
|
|
Pre-tax impact of Special Items
|
|
(97.5
|
)
|
|
(77.1
|
)
|
|
(203.3
|
)
|
|||
Non-U.S. GAAP Adjusted Earnings before income tax provision
|
|
$
|
490.8
|
|
|
$
|
465.0
|
|
|
$
|
494.7
|
|
|
|
|
|
|
|
|
||||||
U.S. GAAP Income tax provision
|
|
$
|
330.5
|
|
|
$
|
95.6
|
|
|
$
|
132.6
|
|
Tax Special Items
(1)
|
|
(208.1
|
)
|
|
23.7
|
|
|
(73.6
|
)
|
|||
Tax impact of Special Items
(2)
|
|
25.8
|
|
|
11.0
|
|
|
55.8
|
|
|||
Non-U.S. GAAP Adjusted Income tax provision
|
|
$
|
148.2
|
|
|
$
|
130.3
|
|
|
$
|
114.8
|
|
|
|
|
|
|
|
|
||||||
U.S. GAAP Effective income tax rate
|
|
84.0
|
%
|
|
24.6
|
%
|
|
45.5
|
%
|
|||
Non-U.S. GAAP Adjusted income tax rate
|
|
30.2
|
%
|
|
28.0
|
%
|
|
23.2
|
%
|
|
(1)
|
For the year ended
December 31, 2017
, the Tax Special Items include the impact of the sale of Diversey, the revaluation of deferred tax assets as a result of U.S. Tax Reform and an increase in unrecognized tax benefits in foreign jurisdictions. For the year ended
December 31, 2016
, the Tax Special Items included adjustments to foreign tax credits and a change in the permanent reinvestment assertion in some of our foreign jurisdictions (i.e. a change in our repatriation of foreign earnings strategy). For the year ended
December 31, 2015
, the Tax Special Items included an increase in unrecognized tax benefits related to the Settlement Agreement.
|
(2)
|
The tax rate used to calculate the tax impact of Special Items is based on the jurisdiction in which the charge was recorded.
|
(In millions)
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||
Net sales
|
|
$
|
29.9
|
|
|
$
|
(124.9
|
)
|
Cost of sales
|
|
(22.5
|
)
|
|
85.6
|
|
||
Selling, general and administrative expenses
|
|
(4.9
|
)
|
|
20.8
|
|
||
Net earnings
|
|
(0.9
|
)
|
|
17.0
|
|
||
Adjusted EBITDA
|
|
4.9
|
|
|
(39.1
|
)
|
(In millions)
|
|
North America
|
|
EMEA
|
|
Latin America
|
|
APAC
|
|
Total
|
|||||||||||||||||||||||||
2016 net sales
|
|
$
|
2,237.8
|
|
|
53.1
|
%
|
|
$
|
962.7
|
|
|
22.9
|
%
|
|
$
|
396.8
|
|
|
9.4
|
%
|
|
$
|
614.0
|
|
|
14.6
|
%
|
|
$
|
4,211.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Volume – Units
|
|
161.4
|
|
|
7.2
|
%
|
|
12.9
|
|
|
1.3
|
%
|
|
5.9
|
|
|
1.5
|
%
|
|
8.6
|
|
|
1.4
|
%
|
|
188.8
|
|
|
4.5
|
%
|
|||||
Price/mix
(1)
|
|
12.9
|
|
|
0.6
|
%
|
|
(7.9
|
)
|
|
(0.8
|
)%
|
|
4.0
|
|
|
1.0
|
%
|
|
(1.0
|
)
|
|
(0.2
|
)%
|
|
8.0
|
|
|
0.2
|
%
|
|||||
Acquisition
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
23.6
|
|
|
3.8
|
%
|
|
23.6
|
|
|
0.6
|
%
|
|||||
Total constant dollar change (Non-U.S. GAAP)
|
|
174.3
|
|
|
7.8
|
%
|
|
5.0
|
|
|
0.5
|
%
|
|
9.9
|
|
|
2.5
|
%
|
|
31.2
|
|
|
5.0
|
%
|
|
220.4
|
|
|
5.2
|
%
|
|||||
Foreign currency translation
|
|
2.9
|
|
|
0.1
|
%
|
|
17.0
|
|
|
1.8
|
%
|
|
2.6
|
|
|
0.7
|
%
|
|
7.4
|
|
|
1.2
|
%
|
|
29.9
|
|
|
0.7
|
%
|
|||||
Total change (U.S. GAAP)
|
|
177.2
|
|
|
7.9
|
%
|
|
22.0
|
|
|
2.3
|
%
|
|
12.5
|
|
|
3.2
|
%
|
|
38.6
|
|
|
6.2
|
%
|
|
250.3
|
|
|
5.9
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2017 net sales
|
|
$
|
2,415.0
|
|
|
54.1
|
%
|
|
$
|
984.7
|
|
|
22.1
|
%
|
|
$
|
409.3
|
|
|
9.2
|
%
|
|
$
|
652.6
|
|
|
14.6
|
%
|
|
$
|
4,461.6
|
|
|
|
(In millions)
|
|
North America
|
|
EMEA
|
|
Latin America
|
|
APAC
|
|
Total
|
|||||||||||||||||||||||||
2015 net sales
|
|
$
|
2,315.3
|
|
|
52.5
|
%
|
|
$
|
1,033.1
|
|
|
23.4
|
%
|
|
$
|
423.3
|
|
|
9.6
|
%
|
|
$
|
638.6
|
|
|
14.5
|
%
|
|
$
|
4,410.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Volume – Units
|
|
68.8
|
|
|
3.0
|
%
|
|
20.8
|
|
|
2.0
|
%
|
|
(27.1
|
)
|
|
(6.4
|
)%
|
|
(15.7
|
)
|
|
(2.6
|
)%
|
|
46.8
|
|
|
1.2
|
%
|
|||||
Price/mix
(1)
|
|
(88.5
|
)
|
|
(3.8
|
)%
|
|
(0.4
|
)
|
|
—
|
%
|
|
72.2
|
|
|
17.1
|
%
|
|
(2.7
|
)
|
|
(0.4
|
)%
|
|
(19.4
|
)
|
|
(0.4
|
)%
|
|||||
Divestitures
|
|
(52.9
|
)
|
|
(2.3
|
)%
|
|
(48.6
|
)
|
|
(4.7
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(101.5
|
)
|
|
(2.3
|
)%
|
|||||
Total constant dollar change (Non-U.S. GAAP)
|
|
(72.6
|
)
|
|
(3.1
|
)%
|
|
(28.2
|
)
|
|
(2.6
|
)%
|
|
45.1
|
|
|
10.7
|
%
|
|
(18.4
|
)
|
|
(2.9
|
)%
|
|
(74.1
|
)
|
|
(1.6
|
)%
|
|||||
Foreign currency translation
|
|
(4.9
|
)
|
|
(0.3
|
)%
|
|
(42.2
|
)
|
|
(4.2
|
)%
|
|
(71.6
|
)
|
|
(16.9
|
)%
|
|
(6.2
|
)
|
|
(1.0
|
)%
|
|
(124.9
|
)
|
|
(2.9
|
)%
|
|||||
Total change (U.S. GAAP)
|
|
(77.5
|
)
|
|
(3.3
|
)%
|
|
(70.4
|
)
|
|
(6.8
|
)%
|
|
(26.5
|
)
|
|
(6.2
|
)%
|
|
(24.6
|
)
|
|
(3.9
|
)%
|
|
(199.0
|
)
|
|
(4.5
|
)%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2016 net sales
|
|
$
|
2,237.8
|
|
|
53.1
|
%
|
|
$
|
962.7
|
|
|
22.9
|
%
|
|
$
|
396.8
|
|
|
9.4
|
%
|
|
$
|
614.0
|
|
|
14.5
|
%
|
|
$
|
4,211.3
|
|
|
|
|
(1)
|
Our price/mix reported above includes the net impact of our pricing actions and rebates as well as the period-to-period change in the mix of products sold. Also included in our reported price/mix is the net effect of some of our customers purchasing our products in non-U.S. dollar or euro-denominated countries at selling prices denominated in U.S. dollars or euros. This primarily arises when we export products from the U.S. and euro-zone countries. The impact to our reported price/mix of these purchases in other countries at selling prices denominated in U.S. dollars or euros was not material in the periods included in the table above.
|
(In millions)
|
|
Food Care
|
|
Product Care
|
|
Total Company
|
|||||||||||||||
2016 Net Sales
|
|
$
|
2,686.8
|
|
|
63.8
|
%
|
|
$
|
1,524.5
|
|
|
36.2
|
%
|
|
$
|
4,211.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Volume – Units
|
|
102.6
|
|
|
3.8
|
%
|
|
86.2
|
|
|
5.7
|
%
|
|
188.8
|
|
|
4.5
|
%
|
|||
Price/mix
(1)
|
|
(0.7
|
)
|
|
—
|
%
|
|
8.7
|
|
|
0.6
|
%
|
|
8.0
|
|
|
0.2
|
%
|
|||
Acquisition
|
|
—
|
|
|
—
|
%
|
|
23.6
|
|
|
1.5
|
%
|
|
23.6
|
|
|
0.6
|
%
|
|||
Total constant dollar change (Non-U.S. GAAP)
|
|
101.9
|
|
|
3.8
|
%
|
|
118.5
|
|
|
7.8
|
%
|
|
220.4
|
|
|
5.2
|
%
|
|||
Foreign currency translation
|
|
26.5
|
|
|
1.0
|
%
|
|
3.4
|
|
|
0.2
|
%
|
|
29.9
|
|
|
0.7
|
%
|
|||
Total change (U.S. GAAP)
|
|
128.4
|
|
|
4.8
|
%
|
|
121.9
|
|
|
8.0
|
%
|
|
250.3
|
|
|
5.9
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2017 Net Sales
|
|
$
|
2,815.2
|
|
|
63.1
|
%
|
|
$
|
1,646.4
|
|
|
36.9
|
%
|
|
$
|
4,461.6
|
|
|
|
(In millions)
|
|
Food Care
|
|
Product Care
|
|
Total Company
|
|||||||||||||||
2015 Net Sales
|
|
$
|
2,856.1
|
|
|
64.8
|
%
|
|
$
|
1,554.2
|
|
|
35.2
|
%
|
|
4,410.3
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Volume – Units
|
|
25.5
|
|
|
0.9
|
%
|
|
21.3
|
|
|
1.4
|
%
|
|
$
|
46.8
|
|
|
1.2
|
%
|
||
Price/mix
(1)
|
|
9.3
|
|
|
0.3
|
%
|
|
(28.7
|
)
|
|
(1.8
|
)%
|
|
(19.4
|
)
|
|
(0.4
|
)%
|
|||
Divestitures
|
|
(101.5
|
)
|
|
(3.6
|
)%
|
|
—
|
|
|
—
|
%
|
|
(101.5
|
)
|
|
(2.3
|
)%
|
|||
Total constant dollar change (Non- U.S. GAAP)
|
|
(66.7
|
)
|
|
(2.3
|
)%
|
|
(7.4
|
)
|
|
(0.5
|
)%
|
|
(74.1
|
)
|
|
(1.6
|
)%
|
|||
Foreign currency translation
|
|
(102.6
|
)
|
|
(3.6
|
)%
|
|
(22.3
|
)
|
|
(1.4
|
)%
|
|
(124.9
|
)
|
|
(2.9
|
)%
|
|||
Total change (U.S. GAAP)
|
|
(169.3
|
)
|
|
(5.9
|
)%
|
|
(29.7
|
)
|
|
(1.9
|
)%
|
|
(199.0
|
)
|
|
(4.5
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2016 Net Sales
|
|
$
|
2,686.8
|
|
|
63.8
|
%
|
|
$
|
1,524.5
|
|
|
36.2
|
%
|
|
$
|
4,211.3
|
|
|
|
|
(1)
|
Our price/mix reported above includes the net impact of our pricing actions and rebates as well as the period-to-period change in the mix of products sold. Also included in our reported product price/mix is the net effect of some of our customers purchasing our products in non-U.S. dollar or euro-denominated countries at selling prices denominated in U.S. dollars or euros. This primarily arises when we export products from the U.S. and euro-zone countries. The impact to our reported price/mix of these purchases in other countries at selling prices denominated in U.S. dollars or euros was not material in the periods included in the table above.
|
•
|
higher unit volumes of $117 million, reflecting an increase in North America on strong demand of protein packaging and more modest increases in EMEA and Latin America.
|
•
|
lower unit volumes in APAC of $14 million primarily due to the continuation of historically low slaughter rates in Australia; and
|
•
|
unfavorable price/mix of $1 million.
|
•
|
the divestiture of our North American foam trays and absorbent pads and European food trays businesses of $102 million; and
|
•
|
lower unit volumes of $39 million, reflecting continued economic uncertainty and social and political instability in Latin America, and lower demand in Asia Pacific driven by historically low slaughter rates in Australia.
|
•
|
higher unit volumes of $64 million, in North America and EMEA combined with strong demand within our core product portfolio, adoption of new products and increased market penetration of advanced packaging solutions; and
|
•
|
favorable price/mix of $9 million reflecting an increase in Latin America and EMEA, primarily due to pricing initiatives implemented to offset currency devaluation, a favorable mix of new higher margin products and the implementation of value-added pricing initiatives and non-material inflationary costs, which was partially offset by unfavorable price/mix in North America primarily attributable to the timing of formula pricing adjustments at key customers.
|
•
|
incremental sales resulting from the acquisition of Fagerdala in Singapore of $24 million;
|
•
|
higher unit volumes of $86 million across all regions, primarily in North America due to ongoing strength in the e-Commerce and third party logistics markets as well as increased volume units in APAC; and
|
•
|
favorable price/mix of $9 million.
|
•
|
lower unit volumes of $39 million primarily due to rationalization and weakness in the industrial sector, as well as declines in Latin America due to the political and economic environment; and
|
•
|
unfavorable price/mix of $29 million primarily in North America driven by targeted pricing incentives and an unfavorable product mix related to accelerated growth in e-Commerce and a shift in demand due to more innovative, resource-efficient solutions.
|
•
|
higher unit volumes of $64 million, primarily in North America and EMEA due to ongoing strength in the e-Commerce and third party logistics markets.
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
||||||||
Net sales
|
|
$
|
4,461.6
|
|
|
$
|
4,211.3
|
|
|
$
|
4,410.3
|
|
|
5.9
|
%
|
|
(4.5
|
)%
|
Cost of sales
|
|
3,044.4
|
|
|
2,806.4
|
|
|
2,955.1
|
|
|
8.5
|
%
|
|
(5.0
|
)%
|
|||
As a % of net sales
|
|
68.2
|
%
|
|
66.6
|
%
|
|
67.0
|
%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
||||||||
Selling, general and administrative expenses
|
|
$
|
796.0
|
|
|
$
|
755.7
|
|
|
$
|
778.0
|
|
|
5.3
|
%
|
|
(2.9
|
)%
|
As a % of net sales
|
|
17.8
|
%
|
|
17.9
|
%
|
|
17.6
|
%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
||||||||
Amortization expense of intangible assets acquired
|
|
$
|
13.1
|
|
|
$
|
15.0
|
|
|
$
|
11.1
|
|
|
(12.7
|
)%
|
|
35.1
|
%
|
As a % of net sales
|
|
0.3
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
Change
|
|
Change
|
||||||||||
Interest expense on our various debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Term Loan A due July 2017
(1)
|
|
$
|
3.6
|
|
|
$
|
5.2
|
|
|
$
|
4.4
|
|
|
$
|
(1.6
|
)
|
|
$
|
0.8
|
|
Term Loan A due July 2019 (October 2016 prior to refinance)
(2)
|
|
18.6
|
|
|
19.9
|
|
|
18.0
|
|
|
(1.3
|
)
|
|
1.9
|
|
|||||
Revolving credit facility due July 2019 (October 2016 prior to refinance)
(2)
|
|
2.4
|
|
|
2.4
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|||||
6.50% Senior Notes due December 2020
|
|
28.1
|
|
|
27.7
|
|
|
28.0
|
|
|
0.4
|
|
|
(0.3
|
)
|
|||||
8.375% Senior Notes due September 2021
(3)
|
|
—
|
|
|
—
|
|
|
30.4
|
|
|
—
|
|
|
(30.4
|
)
|
|||||
4.875% Senior Notes due December 2022
|
|
21.5
|
|
|
21.4
|
|
|
21.3
|
|
|
0.1
|
|
|
0.1
|
|
|||||
5.25% Senior Notes due April 2023
|
|
23.0
|
|
|
23.0
|
|
|
23.0
|
|
|
—
|
|
|
—
|
|
|||||
4.50% Senior Notes due September 2023
(3)
|
|
21.0
|
|
|
20.4
|
|
|
10.9
|
|
|
0.5
|
|
|
9.5
|
|
|||||
5.125% Senior Notes due December 2024
|
|
22.3
|
|
|
22.3
|
|
|
22.3
|
|
|
—
|
|
|
—
|
|
|||||
5.50% Senior Notes due September 2025
(3)
|
|
22.3
|
|
|
22.3
|
|
|
12.1
|
|
|
—
|
|
|
10.2
|
|
|||||
6.875% Senior Notes due July 2033
|
|
31.0
|
|
|
31.0
|
|
|
31.0
|
|
|
—
|
|
|
—
|
|
|||||
Other interest expense
|
|
18.3
|
|
|
14.7
|
|
|
12.6
|
|
|
3.7
|
|
|
2.1
|
|
|||||
Less: capitalized interest
|
|
(10.3
|
)
|
|
(10.9
|
)
|
|
(5.4
|
)
|
|
0.7
|
|
|
(5.5
|
)
|
|||||
Total
|
|
$
|
201.8
|
|
|
$
|
199.4
|
|
|
$
|
211.0
|
|
|
$
|
2.4
|
|
|
$
|
(11.6
|
)
|
|
(1)
|
We repaid the notes upon maturity in July 2017.
|
(2)
|
In connection with the sale of Diversey, the Company prepaid several tranches of the Term Loan A facility due in July 2019. See Note 11, “Debt and Credit Facilities” of the Notes to Consolidated Financial Statements for further details.
|
(3)
|
In June 2015, we issued $400 million of 5.50% senior notes due 2025 and €400 million of 4.50% senior notes due 2023 and used the net proceeds of these notes to retire the existing $750 million of 8.375% senior notes due 2021.
|
Year Ended
|
|
Effective Tax Rate
|
|
2017
|
|
84.0
|
%
|
2016
|
|
24.6
|
%
|
2015
|
|
45.5
|
%
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
||||||||
Net earnings from continuing operations
|
|
$
|
62.8
|
|
|
$
|
292.3
|
|
|
$
|
158.8
|
|
|
(78.5
|
)%
|
|
84.1
|
%
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
||||||||
Net earnings from discontinued operations, net of taxes
|
|
$
|
111.4
|
|
|
$
|
194.1
|
|
|
$
|
176.6
|
|
|
(42.6
|
)%
|
|
9.9
|
%
|
|
|
Year Ended December 31,
|
|
2017 vs. 2016
|
|
2016 vs. 2016
|
||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
||||||||
Food Care
|
|
$
|
608.3
|
|
|
$
|
605.4
|
|
|
$
|
643.7
|
|
|
0.5
|
%
|
|
(5.9
|
)%
|
Adjusted EBITDA Margin
|
|
21.6
|
%
|
|
22.5
|
%
|
|
22.5
|
%
|
|
|
|
|
|||||
Product Care
|
|
332.3
|
|
|
331.1
|
|
|
322.1
|
|
|
0.4
|
%
|
|
2.8
|
%
|
|||
Adjusted EBITDA Margin
|
|
20.2
|
%
|
|
21.7
|
%
|
|
20.7
|
%
|
|
|
|
|
|||||
Corporate
(1)
|
|
(107.3
|
)
|
|
(127.3
|
)
|
|
(115.7
|
)
|
|
(15.7
|
)%
|
|
10.0
|
%
|
|||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
833.3
|
|
|
$
|
809.2
|
|
|
$
|
850.1
|
|
|
3.0
|
%
|
|
(4.8
|
)%
|
Adjusted EBITDA Margin
|
|
18.7
|
%
|
|
19.2
|
%
|
|
19.3
|
%
|
|
|
|
|
|
(1)
|
Corporate includes costs previously allocated to the Diversey Care segment and Food Hygiene and Cleaning business of our Food Care segment which are included as part of continuing operations of
$14 million
,
$15 million
and
$16 million
for
December 31,
2017,
2016
and
2015
respectively.
|
•
|
higher non-material manufacturing costs of $28 million, including salary and wage inflation; and
|
•
|
unfavorable mix and price/cost spread of $22 million, primarily due to higher raw material and freight costs.
|
•
|
higher unit volumes of $44 million; and
|
•
|
restructuring savings of $5 million.
|
•
|
higher operating expenses of approximately $33 million including salary and wage inflation, partially offset by a reduction in incentive-based compensation; and
|
•
|
the effect of the divestitures of the North American foam trays and absorbent pads business and the European food trays businesses of $21 million.
|
•
|
favorable price/mix and margin expansion of approximately $14 million;
|
•
|
restructuring savings of approximately $13 million; and
|
•
|
higher unit volumes of approximately $14 million.
|
•
|
positive volume trends of $37 million; and
|
•
|
restructuring savings of $2 million.
|
•
|
unfavorable mix and price/cost spread of $26 million primarily due to higher raw material and freight costs; and
|
•
|
higher non-material manufacturing costs of $12 million including salary and wage inflation.
|
•
|
positive volume trends of $8 million; and
|
•
|
restructuring savings of $4 million.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings from continuing operations
|
|
$
|
62.8
|
|
|
$
|
292.3
|
|
|
$
|
158.8
|
|
Interest expense
|
|
(201.8
|
)
|
|
(199.4
|
)
|
|
(211.0
|
)
|
|||
Interest income
|
|
17.6
|
|
|
7.5
|
|
|
6.8
|
|
|||
Income tax provision
(1)
|
|
330.5
|
|
|
95.6
|
|
|
132.6
|
|
|||
Depreciation and amortization
(4)
|
|
(158.3
|
)
|
|
(154.0
|
)
|
|
(151.3
|
)
|
|||
Accelerated depreciation and amortization of fixed assets and intangible assets for Venezuelan subsidiaries
|
|
—
|
|
|
1.7
|
|
|
0.1
|
|
|||
Special Items:
|
|
|
|
|
|
|
||||||
Restructuring and other charges
(1)(5)
|
|
(12.1
|
)
|
|
(2.5
|
)
|
|
(48.7
|
)
|
|||
Other restructuring associated costs included in cost of sales and selling, general and administrative expenses
|
|
(14.3
|
)
|
|
(19.8
|
)
|
|
(25.7
|
)
|
|||
SARs
|
|
2.6
|
|
|
(0.7
|
)
|
|
(3.9
|
)
|
|||
Foreign currency exchange loss related to Venezuelan subsidiaries
|
|
—
|
|
|
(1.7
|
)
|
|
(27.2
|
)
|
|||
Charges related to ceasing operations in Venezuela
(1)
|
|
—
|
|
|
(48.5
|
)
|
|
—
|
|
|||
Loss on debt redemption and refinancing activities
|
|
—
|
|
|
(0.1
|
)
|
|
(110.0
|
)
|
|||
(Loss) gain on sale of North American foam trays and absorbent pads business and European food trays business
|
|
—
|
|
|
(1.8
|
)
|
|
13.4
|
|
|||
Loss related to the sale of other businesses, investments and property, plant and equipment
|
|
(15.5
|
)
|
|
—
|
|
|
—
|
|
|||
Charges incurred related to the sale of Diversey
|
|
(68.6
|
)
|
|
(1.4
|
)
|
|
—
|
|
|||
Settlement/curtailment benefits related to the sale of Diversey pension plans
|
|
13.5
|
|
|
—
|
|
|
—
|
|
|||
Other Special Items
(3)
|
|
(3.1
|
)
|
|
(0.6
|
)
|
|
(1.2
|
)
|
|||
Pre-tax impact of Special Items
|
|
(97.5
|
)
|
|
(77.1
|
)
|
|
(203.3
|
)
|
|||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
833.3
|
|
|
$
|
809.2
|
|
|
$
|
850.1
|
|
|
(1)
|
Due to the ongoing challenging economic situation in Venezuela, the Company approved a program in the second quarter of 2016 to cease operations in the country. Refer to Note 2 “Summary of Significant Accounting Policies and Recently Issued Accounting Standards," of the Notes to Consolidated Financial Statements for further details.
|
(2)
|
This includes accelerated depreciation of non-strategic assets related to restructuring programs which were
$1.1 million
and
$0.1 million
for the years ended December 31,
2016
and
2015
, respectively.
|
(3)
|
Other Special Items for the year ended
December 31, 2017
primarily related to transaction costs related to reorganizations. Other Special Items for the year ended
December 31, 2016
primarily included legal fees associated with restructuring and acquisitions. Other Special Items for the year ended
December 31, 2015
primarily included legal fees associated with restructuring and acquisitions.
|
(4)
|
Depreciation and amortization by segment is as follows:
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Food Care
|
|
$
|
103.8
|
|
|
$
|
92.2
|
|
|
$
|
97.1
|
|
Product Care
|
|
47.3
|
|
|
40.1
|
|
|
37.6
|
|
|||
Corporate
|
|
7.2
|
|
|
21.7
|
|
|
16.6
|
|
|||
Total Company depreciation and amortization
(i)
|
|
$
|
158.3
|
|
|
$
|
154.0
|
|
|
$
|
151.3
|
|
|
(i)
|
Includes share-based incentive compensation of
$38 million
,
$51 million
and
$51 million
for the years ended
December 31, 2017
, 2016 and 2015, respectively.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Food Care
|
|
$
|
7.6
|
|
|
$
|
1.6
|
|
|
$
|
31.5
|
|
Product Care
|
|
4.5
|
|
|
0.9
|
|
|
17.2
|
|
|||
Total Company restructuring and other charges
(i)
|
|
$
|
12.1
|
|
|
$
|
2.5
|
|
|
$
|
48.7
|
|
|
(i)
|
For the year ended December 31, 2016 restructuring and other charges excludes $0.3 million related to severance and termination benefits for employees in our Venezuelan subsidiaries.
|
|
|
Payments Due by Years
|
||||||||||||||||||
(In millions)
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
$
|
25.3
|
|
|
$
|
25.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current portion of long-term debt exclusive of debt discounts and lender fees
|
|
2.2
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt, exclusive of debt discounts and lender fees
|
|
3,260.1
|
|
|
—
|
|
|
654.1
|
|
|
425.5
|
|
|
2,180.5
|
|
|||||
Total debt
(1)
|
|
$
|
3,287.6
|
|
|
$
|
27.5
|
|
|
$
|
654.1
|
|
|
$
|
425.5
|
|
|
$
|
2,180.5
|
|
Interest payments due on long-term debt
(2)
|
|
1,233.6
|
|
|
173.4
|
|
|
335.2
|
|
|
276.7
|
|
|
448.3
|
|
|||||
Operating leases
|
|
31.1
|
|
|
10.6
|
|
|
13.9
|
|
|
4.7
|
|
|
1.9
|
|
|||||
First quarter 2018 quarterly cash dividend declared
|
|
26.8
|
|
|
26.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other principal contractual obligations
|
|
67.8
|
|
|
62.9
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
(3)
|
|
$
|
4,646.9
|
|
|
$
|
301.2
|
|
|
$
|
1,008.1
|
|
|
$
|
706.9
|
|
|
$
|
2,630.7
|
|
|
(1)
|
These amounts include principal maturities (at face value) only. These amounts also include our contractual obligations under capital leases of $1.4 million in 2018, $2.1 million in 2019-2020 and less than $1.0 million in 2021-2022.
|
(2)
|
Includes interest payments required under our senior notes issuances and Amended Credit Facility only. The interest payments included above for our Term Loan A were calculated using the following assumptions:
|
•
|
interest rates based on stated rates based on LIBOR as of
December 31, 2017
; and
|
•
|
all non-U.S. dollar balances are converted using exchange rates as of
December 31, 2017
.
|
(3)
|
Obligations related to defined benefit pension plans and other post-employment benefit plans have been excluded from the table above, due to factors such as the retirement of employees, it is not reasonably possible to estimate when these obligations will become due. Refer to Note 14, “Profit Sharing, Retirement Savings Plans and Defined Benefit Pension Plans,” and Note 15, “Other Post-Employment Benefits and Other Employee Benefit Plans,” of the Notes to Consolidated Financial Statements for additional information related to these plans.
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Cash and cash equivalents
|
|
$
|
594.0
|
|
|
$
|
333.7
|
|
|
|
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
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Short-term borrowings
|
|
$
|
25.3
|
|
|
$
|
83.0
|
|
Current portion of long-term debt
|
|
2.2
|
|
|
297.0
|
|
||
Total current debt
|
|
27.5
|
|
|
380.0
|
|
||
Total long-term debt, less current portion
(1)
|
|
3,230.5
|
|
|
3,762.6
|
|
||
Total debt
|
|
3,258.0
|
|
|
4,142.6
|
|
||
Less: Cash and cash equivalents
|
|
(594.0
|
)
|
|
(333.7
|
)
|
||
Net debt
|
|
$
|
2,664.0
|
|
|
$
|
3,808.9
|
|
|
(1)
|
Amounts are net of unamortized discounts and debt issuance costs of
$30 million
as
December 31, 2017
and
$36 million
as of December 31,
2016
.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities
|
|
$
|
424.4
|
|
|
$
|
906.9
|
|
|
$
|
982.1
|
|
Net cash provided by (used in) investing activities
|
|
1,813.6
|
|
|
(314.8
|
)
|
|
(60.0
|
)
|
|||
Net cash used in financing activities
|
|
(1,864.3
|
)
|
|
(540.9
|
)
|
|
(788.7
|
)
|
|||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
|
(113.4
|
)
|
|
(39.2
|
)
|
|
(60.4
|
)
|
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
||||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
|
2016 vs. 2015
|
|||||||||
Cash flow provided by operating activities
|
|
$
|
424.4
|
|
|
$
|
906.9
|
|
|
$
|
982.1
|
|
|
$
|
(482.5
|
)
|
|
$
|
(75.2
|
)
|
Capital expenditures
|
|
(183.8
|
)
|
|
(275.7
|
)
|
|
(184.0
|
)
|
|
91.9
|
|
|
(275.9
|
)
|
|||||
Free cash flow
(1)
|
|
$
|
240.6
|
|
|
$
|
631.2
|
|
|
$
|
798.1
|
|
|
$
|
(390.6
|
)
|
|
$
|
(166.9
|
)
|
|
(1)
|
Free cash flow was $421 million in 2017 excluding the payment of charges related to the sale of Diversey of $181 million. Free cash flow was $609 million in 2015 excluding the tax refund received of $235 million in connection with the Settlement agreement and excess tax benefit of $46 million related to shares of Common Stock issued pursuant to the terms of the Settlement agreement.
|
•
|
$815 million
of net earnings, which included a reduction of
$255 million
of non-cash adjustments to reconcile net earnings to net cash provided by operating activities, including
$641 million
gain on the sale of Diversey, partially offset by adjustments for deferred taxes, depreciation and amortization, share-based incentive compensation expenses and profit sharing expenses;
|
•
|
$55 million
of changes in other liabilities and assets. This activity primarily reflects the timing of certain annual incentive compensation payments, reduction in restructuring activities due to the completion of programs; and
|
•
|
$17 million increase in working capital due to an increase in accounts payable partially offset by a decrease in accounts receivable and inventory. This activity reflects the timing of inventory purchases and the related payments of cash along with the seasonality of sales and collections.
|
•
|
$207 million
decrease in income tax payables primarily as a result of an increase in cash tax payments related to the sale of Diversey.
|
•
|
$486 million of net earnings, which included $291 million of non-cash adjustments to reconcile net earnings to net cash provided by operating activities, including adjustments for depreciation and amortization, share-
|
•
|
$177 million of changes in operating assets and liabilities, primarily reflecting an increase in accounts payable partially offset by a decrease in trade receivables and inventory. This activity reflects the utilization of financing agreements to extend external payment terms, timing of inventory purchases and the related payments of cash along with the seasonality of sales and collections.
|
•
|
$48 million of changes in other assets and liabilities. This was primarily attributable to changes in restructuring liabilities, an increase in leased assets and the timing of certain annual incentive compensation payments.
|
•
|
$335 million of net earnings, which included $367 million of non-cash adjustments to reconcile net earnings to cash provided by operating activities, including adjustments for depreciation and amortization of $213 million, share-based incentive compensation expense of $61 million, profit sharing expense of $36 million, a loss on debt redemption of $110 million, partially offset by $46 million of excess tax benefit related to the 18 million shares of our common stock issued pursuant to the Settlement agreement;
|
•
|
$235 million tax refund related to the Settlement agreement payment; and
|
•
|
$80 million of changes in operating assets and liabilities, primarily reflecting an increase in accounts payable and trade receivables partially offset by a decrease in inventory and other assets and liabilities. This activity reflects the timing of inventory purchases and the related payments of cash along with the timing of certain annual incentive compensation payments and interest payments and the seasonality of sales and collections.
|
•
|
impact from on the sale of Diversey of
$2.2 billion
, net of payments of debt of $777 million; and
|
•
|
$3 million related to the sale of businesses and property and equipment.
|
•
|
capital expenditures of
$184 million
;
|
•
|
$119 million
related to business acquisitions;
|
•
|
$62 million
due to the loss from settlement of cross currency swaps; and
|
•
|
$9 million
related to settlements of foreign currency forward contracts.
|
•
|
capital expenditures of $276 million related to restructuring programs and capacity expansions to support growth in net sales. Capital expenditures related to our restructuring programs were $124 million in 2016, which primarily reflected activity related to the building of our global headquarters in Charlotte, North Carolina;
|
•
|
cash paid on settlements of foreign currency forward contracts of $46 million; and
|
•
|
cash paid for businesses acquired of $6 million.
|
•
|
proceeds from sale of business of $8 million; and
|
•
|
proceeds from sales of property, plant and equipment of $5 million.
|
•
|
capital expenditures of $184 million related to capacity expansions to support growth in net sales. Capital expenditures related to our restructuring programs were $52 million in 2015.
|
•
|
proceeds from sale of business of $95 million; and
|
•
|
proceeds from sales property, plant and equipment of $33 million.
|
•
|
repurchases of common stock of
$1.3 billion
;
|
•
|
payments of Term Loan A due in July 2017 of $250 million and $98 million for the Brazilian tranche of Term Loan A;
|
•
|
payments of quarterly dividends of
$120 million
; and
|
•
|
acquisition of common stock for tax withholding obligations relating to stock-based compensation of $22 million.
|
•
|
a decrease in cash used as collateral on borrowing arrangement of
$25 million
; and
|
•
|
proceeds from the termination of our cross-currency swap of $17 million.
|
•
|
repurchase of common stock of $217 million;
|
•
|
decrease in short-term borrowings under our revolving credit facility, local lines of credit and accounts receivable securitization programs of $154 million;
|
•
|
payments of quarterly dividends of $122 million;
|
•
|
acquisition of common stock for tax withholding obligations relating to stock-based compensation of $31 million; and
|
•
|
repayments of $27 million on Term Loan A.
|
•
|
proceeds received from the settlement of cross-currency swaps of $6 million; and
|
•
|
a decrease in cash used as collateral on borrowing arrangement of $4 million.
|
•
|
repayment of $750 million of our 8.375% Senior Notes;
|
•
|
repurchase of common stock of $802 million;
|
•
|
payments of quarterly dividends of $107 million;
|
•
|
repayments of $50 million of Term Loan A;
|
•
|
debt extinguishment and debt issuance costs of $108 million; and
|
•
|
an increase in cash collateral on borrowing arrangements of $21 million.
|
•
|
proceeds from issuance of €400million of 4.50% Senior Notes and $400 million of 5.50% Senior Notes;
|
•
|
net proceeds from borrowings under our accounts receivable securitization programs of $107 million; and
|
•
|
an excess tax benefit of $46 million related to the 18 million shares of Common Stock issued pursuant to the Settlement agreement.
|
|
|
December 31,
|
|
|
||||||||
(In millions)
|
|
2017
|
|
2016
|
|
Change
|
||||||
Working capital (current assets less current liabilities)
|
|
$
|
488.2
|
|
|
$
|
96.3
|
|
|
$
|
391.9
|
|
Current ratio (current assets divided by current liabilities)
|
|
1.4x
|
|
|
1.0x
|
|
|
|
||||
Quick ratio (current assets, less inventories divided by current liabilities)
|
|
1.0x
|
|
|
0.8x
|
|
|
|
•
|
a decrease in the current portion of debt of $295 million due to principal payments on Term Loan A due in 2017 of $250 million and the Brazilian tranche of Term Loan A for $96 million;
|
•
|
an increase in cash and cash equivalents of $260 million related to the cash received as part of the sale of Diversey; and
|
•
|
an increase in receivables consistent with the higher sales performance in the fourth quarter of 2017 as compared to the same period in 2016.
|
•
|
an increase in accounts payable reflecting higher days payable outstanding consistent with utilization of structured payable arrangements as well as other initiatives for longer payment terms; and
|
•
|
a decrease in current assets held for sale of $821 million partially offset by a decrease in liabilities held for sale of $681 million as the sale of Diversey was completed on September 6, 2017.
|
•
|
a net increase in shares held in treasury of $1.2 billion and a decrease in additional paid in capital of $35 million due to the repurchase of common stock;
|
•
|
dividends paid and accrued on our common stock of $119 million; and
|
•
|
unrealized losses on derivative instruments of $77 million.
|
•
|
net earnings of
$815 million
;
|
•
|
an increase in unrecognized pension items of $173 million as a result of the transfer of pension plans as part of the sale of Diversey; and
|
•
|
cumulative translation adjustment of $8 million.
|
•
|
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.
|
United States
|
|
25 Basis Point Increase
(in millions)
|
|
25 Basis Point Decrease
(in millions)
|
||||
Discount Rate
|
|
|
|
|
||||
Effect on 2017 projected benefit obligation
|
|
$
|
(5.7
|
)
|
|
$
|
5.9
|
|
Effect on 2018 expected net periodic benefit cost
|
|
0.1
|
|
|
(0.1
|
)
|
||
|
|
100 Basis Point Increase
(in millions)
|
|
100 Basis Point Decrease
(in millions)
|
||||
Return on Assets
|
|
|
|
|
||||
Effect on 2018 expected net periodic benefit cost
|
|
$
|
(1.4
|
)
|
|
$
|
1.4
|
|
International
|
|
25 Basis Point Increase
(in millions)
|
|
25 Basis Point Decrease
(in millions)
|
||||
Discount Rate
|
|
|
|
|
||||
Effect on 2017 projected benefit obligation
|
|
$
|
(26.7
|
)
|
|
$
|
28.4
|
|
Effect on 2018 expected net periodic benefit cost
|
|
—
|
|
|
0.1
|
|
||
|
|
100 Basis Point Increase
(in millions)
|
|
100 Basis Point Decrease
(in millions)
|
||||
Return on Assets
|
|
|
|
|
||||
Effect on 2018 expected net periodic benefit cost
|
|
$
|
(6.1
|
)
|
|
$
|
6.1
|
|
|
|
Page
|
Reports of Independent Registered Public Accounting Firms
|
|
|
Financial Statements:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Financial Statement Schedule:
|
|
|
|
(In millions)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
594.0
|
|
|
$
|
333.7
|
|
Trade receivables, net of allowance for doubtful accounts of $6.5 in 2017 and $8.4 in 2016
|
|
552.4
|
|
|
460.5
|
|
||
Income tax receivables
|
|
85.1
|
|
|
11.5
|
|
||
Other receivables
|
|
90.2
|
|
|
72.7
|
|
||
Inventories, net of inventory reserves of $15.5 in 2017 and $13.4 in 2016
|
|
506.8
|
|
|
456.7
|
|
||
Assets held for sale
|
|
4.0
|
|
|
825.7
|
|
||
Prepaid expenses and other current assets
|
|
33.9
|
|
|
54.5
|
|
||
Total current assets
|
|
1,866.4
|
|
|
2,215.3
|
|
||
Property and equipment, net
|
|
998.4
|
|
|
889.6
|
|
||
Goodwill
|
|
1,939.8
|
|
|
1,882.9
|
|
||
Identifiable intangible assets, net
|
|
83.6
|
|
|
40.1
|
|
||
Deferred taxes
(1)
|
|
176.2
|
|
|
197.1
|
|
||
Non-current assets held for sale
(1)
|
|
—
|
|
|
2,015.1
|
|
||
Other non-current assets
|
|
215.9
|
|
|
175.4
|
|
||
Total assets
|
|
$
|
5,280.3
|
|
|
$
|
7,415.5
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
|
||
Short-term borrowings
|
|
$
|
25.3
|
|
|
$
|
83.0
|
|
Current portion of long-term debt
|
|
2.2
|
|
|
297.0
|
|
||
Accounts payable
|
|
723.8
|
|
|
539.2
|
|
||
Current liabilities held for sale
|
|
2.2
|
|
|
683.3
|
|
||
Accrued restructuring costs
|
|
15.4
|
|
|
44.8
|
|
||
Income tax payable
|
|
47.3
|
|
|
48.3
|
|
||
Other current liabilities
|
|
562.0
|
|
|
423.4
|
|
||
Total current liabilities
|
|
1,378.2
|
|
|
2,119.0
|
|
||
Long-term debt, less current portion
|
|
3,230.5
|
|
|
3,762.6
|
|
||
Deferred taxes
|
|
28.5
|
|
|
4.9
|
|
||
Non-current liabilities held for sale
(1)
|
|
—
|
|
|
517.2
|
|
||
Other non-current liabilities
|
|
490.8
|
|
|
402.1
|
|
||
Total liabilities
|
|
5,128.0
|
|
|
6,805.8
|
|
||
Commitments and Contingencies - Note 17
|
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.10 par value per share, 50,000,000 shares authorized; no shares issued in 2017 and 2016
|
|
—
|
|
|
—
|
|
||
Common stock, $0.10 par value per share, 400,000,000 shares authorized; shares issued: 230,080,944 in 2017 and 227,638,738 in 2016; shares outstanding: 168,595,521 in 2017 and 193,482,383 in 2016
|
|
23.0
|
|
|
22.8
|
|
||
Additional paid-in capital
|
|
1,939.6
|
|
|
1,974.1
|
|
||
Retained earnings
|
|
1,735.2
|
|
|
1,040.0
|
|
||
Common stock in treasury, 61,485,423 shares in 2017 and 34,156,355 shares in 2016
|
|
(2,700.6
|
)
|
|
(1,478.1
|
)
|
||
Accumulated other comprehensive loss, net of taxes:
|
|
|
|
|
||||
Unrecognized pension items
|
|
(103.4
|
)
|
|
(276.7
|
)
|
||
Cumulative translation adjustment
|
|
(694.4
|
)
|
|
(701.9
|
)
|
||
Unrealized net (loss) gain on derivative instruments for net investment hedge
|
|
(46.8
|
)
|
|
21.0
|
|
||
Unrealized net (loss) gain on derivative instruments for cash flow hedge
|
|
(0.3
|
)
|
|
8.5
|
|
||
Total accumulated other comprehensive loss, net of taxes
|
|
(844.9
|
)
|
|
(949.1
|
)
|
||
Total stockholders’ equity
|
|
152.3
|
|
|
609.7
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
5,280.3
|
|
|
$
|
7,415.5
|
|
|
(1)
|
As of December 31, 2016,
$27.2 million
of amounts which were previously classified as
$10.9 million
of non-current assets held for sale and
$16.3 million
of non-current liabilities held for sale were reclassified to deferred tax assets since the amounts were not transferred as part of the sale of Diversey.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
4,461.6
|
|
|
$
|
4,211.3
|
|
|
$
|
4,410.3
|
|
Cost of sales
(1)
|
|
3,044.4
|
|
|
2,806.4
|
|
|
2,955.1
|
|
|||
Gross profit
|
|
1,417.2
|
|
|
1,404.9
|
|
|
1,455.2
|
|
|||
Selling, general and administrative expenses
(1)
|
|
796.0
|
|
|
755.7
|
|
|
778.0
|
|
|||
Amortization expense of intangible assets acquired
|
|
13.1
|
|
|
15.0
|
|
|
11.1
|
|
|||
Restructuring and other charges
(1)
|
|
12.1
|
|
|
2.8
|
|
|
48.7
|
|
|||
Operating profit
|
|
596.0
|
|
|
631.4
|
|
|
617.4
|
|
|||
Interest expense
|
|
(201.8
|
)
|
|
(199.4
|
)
|
|
(211.0
|
)
|
|||
Interest income
|
|
17.6
|
|
|
7.5
|
|
|
6.8
|
|
|||
Foreign currency exchange loss related to Venezuelan subsidiaries
|
|
—
|
|
|
(1.7
|
)
|
|
(27.2
|
)
|
|||
Charge related to Venezuelan subsidiaries
(1)
|
|
—
|
|
|
(47.3
|
)
|
|
—
|
|
|||
Loss on debt redemption and refinancing activities
|
|
—
|
|
|
(0.1
|
)
|
|
(110.0
|
)
|
|||
(Loss) gain on sale of business, net
|
|
—
|
|
|
(1.8
|
)
|
|
13.4
|
|
|||
Other (expense) income, net
|
|
(18.5
|
)
|
|
(0.7
|
)
|
|
2.0
|
|
|||
Earnings before income tax provision
|
|
393.3
|
|
|
387.9
|
|
|
291.4
|
|
|||
Income tax provision
|
|
330.5
|
|
|
95.6
|
|
|
132.6
|
|
|||
Net earnings from continuing operations
|
|
62.8
|
|
|
292.3
|
|
|
158.8
|
|
|||
Gain on sale of discontinued operations, net of taxes
|
|
640.7
|
|
|
—
|
|
|
—
|
|
|||
Net earnings from discontinued operations, net of tax
(2)
|
|
111.4
|
|
|
194.1
|
|
|
176.6
|
|
|||
Net earnings available to common stockholders
|
|
$
|
814.9
|
|
|
$
|
486.4
|
|
|
$
|
335.4
|
|
Basic:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.34
|
|
|
$
|
1.50
|
|
|
0.78
|
|
|
Discontinued operations
(2)
|
|
3.99
|
|
|
0.99
|
|
|
0.85
|
|
|||
Net earnings per common share - basic
|
|
$
|
4.33
|
|
|
$
|
2.49
|
|
|
$
|
1.63
|
|
Diluted:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.33
|
|
|
$
|
1.48
|
|
|
$
|
0.77
|
|
Discontinued operations
(2)
|
|
3.96
|
|
|
0.98
|
|
|
0.85
|
|
|||
Net earnings per common share - diluted
|
|
$
|
4.29
|
|
|
$
|
2.46
|
|
|
$
|
1.62
|
|
Dividends per common share
|
|
$
|
0.64
|
|
|
$
|
0.61
|
|
|
$
|
0.52
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
186.9
|
|
|
194.3
|
|
|
203.9
|
|
|||
Diluted
|
|
188.9
|
|
|
197.2
|
|
|
206.7
|
|
|
(1)
|
Due to the ongoing challenging economic situation in Venezuela, the Company approved a program in the second quarter of 2016 to cease operations in the country. Refer to Note 2, “Summary of Significant Accounting Policies and Recently Issued Accounting Standards” under the “Impact of Inflation and Currency Fluctuation” section of the Notes to the Consolidated Financial Statements for further details.
|
(2)
|
For the year ended December 31, 2017, there was a revision to net earnings from discontinued operations, net of tax, on the Consolidated Statement of Operations related to depreciation and amortization on Diversey assets held for sale. As a result, net earnings from discontinued operations, net of tax, increased
$16.4 million
and increased net earnings per basic and diluted shares by
$0.09
per share.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings available to common stockholders
|
|
$
|
814.9
|
|
|
$
|
486.4
|
|
|
$
|
335.4
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|||
Unrecognized pension items, net of taxes of $(45.8) for 2017, $2.4 for 2016 and $5.4 for 2015
|
|
173.3
|
|
|
(10.7
|
)
|
|
(15.9
|
)
|
|||
Unrealized (losses) gains on derivative instruments for net investment hedge, net of taxes of $42.0 for 2017, $(12.0) for 2016 and $(1.1) for 2015
|
|
(67.8
|
)
|
|
19.3
|
|
|
1.7
|
|
|||
Unrealized (losses) gains on derivative instruments for cash flow hedge, net of taxes of $2.4 for 2017, $(0.1) for 2016 and $0.3 for 2015
|
|
(8.8
|
)
|
|
0.2
|
|
|
2.1
|
|
|||
Foreign currency translation adjustments, net of tax of $5.3 for 2017, $(19.8) for 2016 and $16.9 for 2015
|
|
7.5
|
|
|
(137.9
|
)
|
|
(194.1
|
)
|
|||
Other comprehensive income (loss), net of taxes
|
|
104.2
|
|
|
(129.1
|
)
|
|
(206.2
|
)
|
|||
Comprehensive income, net of taxes
|
|
$
|
919.1
|
|
|
$
|
357.3
|
|
|
$
|
129.2
|
|
(In millions)
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Common
Stock in
Treasury
|
|
Accumulated Other
Comprehensive
Loss, Net of Taxes
|
|
Total
Stockholders’
Equity
|
||||||||||||
Balance at December 31, 2014
|
|
$
|
22.5
|
|
|
$
|
1,787.0
|
|
|
$
|
448.5
|
|
|
$
|
(481.4
|
)
|
|
$
|
(613.8
|
)
|
|
$
|
1,162.8
|
|
Effect of contingent stock transactions
|
|
0.1
|
|
|
58.6
|
|
|
—
|
|
|
(9.4
|
)
|
|
—
|
|
|
49.3
|
|
||||||
Stock issued for share-based incentive compensation
|
|
—
|
|
|
23.2
|
|
|
—
|
|
|
27.1
|
|
|
—
|
|
|
50.3
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(802.0
|
)
|
|
—
|
|
|
(802.0
|
)
|
||||||
Unrecognized pension items, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.9
|
)
|
|
(15.9
|
)
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194.1
|
)
|
|
(194.1
|
)
|
||||||
Unrealized gain on derivative instruments, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
3.8
|
|
||||||
Settlement share transfer and excess tax benefit
(1)
|
|
—
|
|
|
46.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46.2
|
|
||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
335.4
|
|
|
—
|
|
|
—
|
|
|
335.4
|
|
||||||
Dividends on common stock ($0.52 per share)
|
|
—
|
|
|
—
|
|
|
(108.7
|
)
|
|
—
|
|
|
—
|
|
|
(108.7
|
)
|
||||||
Balance at December 31, 2015
|
|
$
|
22.6
|
|
|
$
|
1,915.0
|
|
|
$
|
675.2
|
|
|
$
|
(1,265.7
|
)
|
|
$
|
(820.0
|
)
|
|
$
|
527.1
|
|
Effect of contingent stock transactions
|
|
0.2
|
|
|
59.9
|
|
|
—
|
|
|
(30.7
|
)
|
|
—
|
|
|
29.4
|
|
||||||
Stock issued for share-based incentive compensation
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
35.3
|
|
|
—
|
|
|
37.4
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(217.0
|
)
|
|
—
|
|
|
(217.0
|
)
|
||||||
Unrecognized pension items, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.7
|
)
|
|
(10.7
|
)
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(137.9
|
)
|
|
(137.9
|
)
|
||||||
Unrealized gain on derivative instruments, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.5
|
|
|
19.5
|
|
||||||
Settlement share transfer and excess tax benefit
|
|
—
|
|
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
486.4
|
|
|
—
|
|
|
—
|
|
|
486.4
|
|
||||||
Dividends on common stock ($0.61 per share)
|
|
—
|
|
|
—
|
|
|
(121.6
|
)
|
|
—
|
|
|
—
|
|
|
(121.6
|
)
|
||||||
Balance at December 31, 2016
|
|
$
|
22.8
|
|
|
$
|
1,974.1
|
|
|
$
|
1,040.0
|
|
|
$
|
(1,478.1
|
)
|
|
$
|
(949.1
|
)
|
|
$
|
609.7
|
|
Effect of contingent stock transactions
|
|
0.2
|
|
|
45.0
|
|
|
—
|
|
|
(22.2
|
)
|
|
—
|
|
|
23.0
|
|
||||||
Stock issued for share-based incentive compensation
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
21.8
|
|
|
—
|
|
|
22.3
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
(80.0
|
)
|
|
—
|
|
|
(1,222.1
|
)
|
|
—
|
|
|
(1,302.1
|
)
|
||||||
Unrecognized pension items, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173.3
|
|
|
173.3
|
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
7.5
|
|
||||||
Unrealized loss on derivative instruments, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76.6
|
)
|
|
(76.6
|
)
|
||||||
Settlement share transfer and excess tax benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
814.9
|
|
|
—
|
|
|
—
|
|
|
814.9
|
|
||||||
Dividends on common stock ($0.64 per share)
|
|
—
|
|
|
—
|
|
|
(119.7
|
)
|
|
—
|
|
|
—
|
|
|
(119.7
|
)
|
||||||
Balance at December 31, 2017
|
|
$
|
23.0
|
|
|
$
|
1,939.6
|
|
|
$
|
1,735.2
|
|
|
$
|
(2,700.6
|
)
|
|
$
|
(844.9
|
)
|
|
$
|
152.3
|
|
|
(1)
|
In 2015, we recorded an out-of-period adjustment of
$46.2 million
related to excess tax benefits from the Settlement agreement. Refer to Note 16, “Income Taxes” of the Notes to Consolidated Financial Statements for further details.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
(1)
|
||||||
Net earnings available to common stockholders
|
|
$
|
814.9
|
|
|
$
|
486.4
|
|
|
$
|
335.4
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
149.3
|
|
|
214.0
|
|
|
213.3
|
|
|||
Share-based incentive compensation
|
|
44.9
|
|
|
59.9
|
|
|
61.2
|
|
|||
Profit sharing expense
|
|
23.2
|
|
|
24.6
|
|
|
36.0
|
|
|||
Loss on debt redemption and refinancing activities
|
|
—
|
|
|
0.1
|
|
|
110.0
|
|
|||
Remeasurement loss related to Venezuelan subsidiaries
|
|
—
|
|
|
3.4
|
|
|
33.1
|
|
|||
Charges related to Venezuelan subsidiaries
|
|
—
|
|
|
46.0
|
|
|
—
|
|
|||
Provisions for bad debt
|
|
2.9
|
|
|
4.3
|
|
|
5.8
|
|
|||
Provisions for inventory obsolescence
|
|
3.6
|
|
|
6.4
|
|
|
(0.2
|
)
|
|||
Deferred taxes, net
|
|
121.0
|
|
|
(61.7
|
)
|
|
(22.6
|
)
|
|||
Excess tax benefit from common stock issued in the Settlement agreement
(1)
|
|
—
|
|
|
—
|
|
|
(46.2
|
)
|
|||
Net (gain) loss on sale of businesses
|
|
(641.2
|
)
|
|
1.9
|
|
|
(24.6
|
)
|
|||
Foreign currency gains (losses)
|
|
29.9
|
|
|
(4.9
|
)
|
|
9.8
|
|
|||
Other non-cash items
|
|
11.1
|
|
|
(2.6
|
)
|
|
(8.2
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Trade receivables, net
|
|
(81.4
|
)
|
|
(33.9
|
)
|
|
36.7
|
|
|||
Inventories
|
|
(55.4
|
)
|
|
(17.1
|
)
|
|
(38.3
|
)
|
|||
Accounts payable
|
|
154.1
|
|
|
228.0
|
|
|
81.4
|
|
|||
Income tax receivable/payable
|
|
(207.1
|
)
|
|
7.3
|
|
|
32.2
|
|
|||
Settlement agreement and related items
(1)
|
|
—
|
|
|
—
|
|
|
235.2
|
|
|||
Other assets and liabilities
|
|
54.6
|
|
|
(55.2
|
)
|
|
(67.9
|
)
|
|||
Net cash provided by operating activities
|
|
$
|
424.4
|
|
|
$
|
906.9
|
|
|
$
|
982.1
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
$
|
(183.8
|
)
|
|
$
|
(275.7
|
)
|
|
$
|
(184.0
|
)
|
Proceeds from sale of business
|
|
1.0
|
|
|
7.8
|
|
|
94.6
|
|
|||
Businesses acquired in purchase transactions, net of cash acquired
|
|
(119.2
|
)
|
|
(5.8
|
)
|
|
(27.5
|
)
|
|||
Proceeds from sales of property, equipment and other assets
|
|
1.7
|
|
|
4.9
|
|
|
32.9
|
|
|||
Loss from settlement of cross currency swaps
|
|
(61.8
|
)
|
|
—
|
|
|
—
|
|
|||
Impact of sale of Diversey
|
|
2,184.4
|
|
|
—
|
|
|
—
|
|
|||
Settlement of foreign currency forward contracts
|
|
(8.7
|
)
|
|
(46.0
|
)
|
|
24.0
|
|
|||
Net cash provided by (used in) investing activities
|
|
$
|
1,813.6
|
|
|
$
|
(314.8
|
)
|
|
$
|
(60.0
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Net (payments) proceeds from short-term borrowings
|
|
$
|
(93.7
|
)
|
|
$
|
(154.2
|
)
|
|
$
|
111.2
|
|
Cash used as collateral on borrowing arrangements
|
|
25.4
|
|
|
3.6
|
|
|
(20.5
|
)
|
|||
Proceeds from cross currency swap
|
|
17.4
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from long-term debt
|
|
—
|
|
|
—
|
|
|
855.0
|
|
|||
Payments of long-term debt
(2)
|
|
(369.5
|
)
|
|
(27.1
|
)
|
|
(754.3
|
)
|
|||
Excess tax benefit from common stock issued in the Settlement agreement
(1)
|
|
—
|
|
|
—
|
|
|
46.2
|
|
|||
Dividends paid on common stock
|
|
(119.7
|
)
|
|
(121.6
|
)
|
|
(106.8
|
)
|
|||
Repurchases of common stock
(3)
|
|
(1,302.1
|
)
|
|
(217.0
|
)
|
|
(802.0
|
)
|
|||
Payments for debt issuance costs
|
|
—
|
|
|
—
|
|
|
(8.8
|
)
|
|||
Payments for debt extinguishment costs
|
|
—
|
|
|
(0.1
|
)
|
|
(99.4
|
)
|
|||
Acquisition of common stock for tax withholding
|
|
(22.1
|
)
|
|
(30.7
|
)
|
|
(9.3
|
)
|
|||
Other financing activities
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|||
Net cash used in financing activities
|
|
$
|
(1,864.3
|
)
|
|
$
|
(540.9
|
)
|
|
$
|
(788.7
|
)
|
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
|
$
|
(113.4
|
)
|
|
$
|
(39.2
|
)
|
|
$
|
(60.4
|
)
|
Net change in cash and cash equivalents
|
|
260.3
|
|
|
12.0
|
|
|
73.0
|
|
|||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
(1)
|
||||||
Balance, beginning of period
|
|
$
|
333.7
|
|
|
$
|
321.7
|
|
|
$
|
248.7
|
|
Net change during the period
|
|
260.3
|
|
|
12.0
|
|
|
73.0
|
|
|||
Balance, end of period
|
|
$
|
594.0
|
|
|
$
|
333.7
|
|
|
$
|
321.7
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
||||||
Interest payments, net of amounts capitalized
|
|
$
|
210.8
|
|
|
$
|
215.1
|
|
|
$
|
229.7
|
|
Income tax payments
|
|
$
|
161.7
|
|
|
$
|
125.8
|
|
|
$
|
101.6
|
|
Payments related to sale of Diversey
|
|
$
|
180.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
SARs payments (less amounts included in restructuring payments)
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
20.7
|
|
Restructuring payments including associated costs
|
|
$
|
49.3
|
|
|
$
|
66.1
|
|
|
$
|
98.3
|
|
Non-cash items:
|
|
|
|
|
|
|
||||||
Transfers of shares of our common stock from treasury for our 2016, 2015 and 2014 profit-sharing plan contributions
|
|
$
|
22.3
|
|
|
$
|
37.6
|
|
|
$
|
36.7
|
|
|
(1)
|
During the first quarter of 2015, the Company received the tax refund of
$235.2 million
related to the Settlement agreement payment. See Note 16 “Income Taxes” of the Notes to Consolidated Financial Statements for further discussion of the out-of-period adjustment.
|
(2)
|
Payments of borrowings included in financing activities excludes amounts which were paid using cash proceeds from the sale of Diversey. As a result,
$755.2 million
of payments of borrowings is included within investing activities for a total payment of borrowings of
$1.1 billion
through the year ended December 31, 2017.
|
(3)
|
The Company entered into an accelerated share repurchase agreement with a third-party financial institution to repurchase
$400.0 million
of the Company’s common stock. The full amount was paid as of December 31, 2017; however, only
$320.0 million
was used to repurchase shares at that point in time. The ASR program concluded in February 2018.
|
•
|
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.
|
•
|
CENCOEX at the official rate of
6.3
;
|
•
|
SICAD auction process at the awarded exchange rate (opening rate at
12.0
and at
December 31, 2015
it was
13.5
); and
|
•
|
SIMADI at the negotiated rate (rate of
198.6986
at
December 31, 2015
).
|
•
|
The preferential rate for essential goods and services was changed from
6.3
to
10.0
bolivars per U.S. dollar and is no longer called CENCOEX but was called the DIPRO;
|
•
|
The SICAD rate was eliminated which reduced the number of legal mechanisms from three down to only two; and
|
•
|
Eliminated the SIMADI rate which was replaced by the DICOM rate which will be allowed to float freely beginning at a rate of approximately
203.0
bolivars to U.S. dollar.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
|
$
|
1,669.0
|
|
|
$
|
2,567.0
|
|
|
$
|
2,621.2
|
|
Cost of sales
|
|
950.4
|
|
|
1,440.3
|
|
|
1,489.8
|
|
|||
Gross profit
|
|
718.6
|
|
|
1,126.7
|
|
|
1,131.4
|
|
|||
Selling, general and administrative expenses
|
|
538.3
|
|
|
859.2
|
|
|
907.8
|
|
|||
Amortization expense of intangible assets acquired
|
|
23.9
|
|
|
79.9
|
|
|
77.6
|
|
|||
Operating profit
|
|
156.4
|
|
|
187.6
|
|
|
146.0
|
|
|||
Other expense, net
|
|
(17.0
|
)
|
|
(9.7
|
)
|
|
(11.4
|
)
|
|||
Earnings from discontinued operations before income tax (benefit) provision
|
|
139.4
|
|
|
177.9
|
|
|
134.6
|
|
|||
Income tax (benefit) provision from discontinued operations
(1)
|
|
28.0
|
|
|
(16.2
|
)
|
|
(42.0
|
)
|
|||
Net earnings from discontinued operations
|
|
$
|
111.4
|
|
|
$
|
194.1
|
|
|
$
|
176.6
|
|
|
(1)
|
For the year ended
December 31, 2017
, net earnings from discontinued operations included tax expense of
$28.0 million
, primarily driven by a change in our repatriation strategy and offset by a favorable earnings mix in jurisdictions with lower rates. For the year ended
December 31, 2016
, net earnings from discontinued operations were impacted by tax benefits of
$16.2 million
, primarily related to the release of reserves and favorable earnings mix in jurisdictions with lower tax rates. For the year ended
December 31, 2015
, net earnings from discontinued operations were impacted by tax benefits of
$42.0 million
, primarily related to the release of reserves and favorable earnings mix in jurisdictions with lower tax rates.
|
(In millions)
|
|
December 31, 2016
|
||
Assets:
|
|
|
||
Cash and cash equivalents
|
|
$
|
30.0
|
|
Trade receivables, net
|
|
438.2
|
|
|
Inventories
|
|
203.2
|
|
|
Other receivables
|
|
70.3
|
|
|
Prepaid expenses and other current assets
|
|
80.6
|
|
|
Property and equipment, net
|
|
170.6
|
|
|
Goodwill
|
|
972.8
|
|
|
Intangible assets, net
|
|
669.9
|
|
|
Deferred taxes
(1)
|
|
39.8
|
|
|
Other non-current assets
|
|
162.0
|
|
|
Total assets held for sale
|
|
$
|
2,837.4
|
|
Liabilities:
|
|
|
||
Short-term borrowings
|
|
$
|
9.6
|
|
Current portion of long-term debt
|
|
31.1
|
|
|
Accounts payable
|
|
346.5
|
|
|
Other current liabilities
|
|
296.1
|
|
|
Long-term debt
|
|
175.7
|
|
|
Deferred taxes
(1)
|
|
72.5
|
|
|
Other non-current liabilities
|
|
269.0
|
|
|
Total liabilities held for sale
|
|
$
|
1,200.5
|
|
|
(1)
|
As of December 31, 2016,
$27.2 million
of amounts which were previously classified as
$10.9 million
of non-current assets held for sale and
$16.3 million
of non-current liabilities held for sale were reclassified to deferred tax assets since the amounts were not transferred as part of the sale of Diversey.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Non-cash items included in net earnings from discontinued operations:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
$
|
29.3
|
|
|
$
|
111.4
|
|
|
$
|
112.5
|
|
Share-based incentive compensation
|
|
10.2
|
|
|
12.0
|
|
|
10.1
|
|
|||
Profit sharing expense
|
|
3.0
|
|
|
2.9
|
|
|
4.5
|
|
|||
Provision for bad debt
|
|
2.3
|
|
|
5.0
|
|
|
3.1
|
|
|||
Capital expenditures
|
|
11.9
|
|
|
17.8
|
|
|
37.1
|
|
|
|
Preliminary Allocation
|
||
(In millions)
|
|
As of October 2, 2017
|
||
Total consideration transferred
|
|
$
|
106.6
|
|
|
|
|
||
Assets:
|
|
|
||
Cash and cash equivalents
|
|
$
|
13.3
|
|
Trade receivables, net
|
|
22.4
|
|
|
Inventory, net
|
|
10.0
|
|
|
Prepaid expenses and other current assets
|
|
8.4
|
|
|
Property and equipment, net
|
|
23.3
|
|
|
Intangible assets, net
|
|
41.4
|
|
|
Goodwill
|
|
39.3
|
|
|
Assets
|
|
$
|
158.1
|
|
Liabilities:
|
|
|
||
Short-term borrowings
|
|
$
|
14.0
|
|
Accounts payable
|
|
6.9
|
|
|
Other current liabilities
|
|
15.1
|
|
|
Long-term debt, less current portion
|
|
3.8
|
|
|
Non-current deferred taxes
|
|
11.7
|
|
|
Liabilities
|
|
$
|
51.5
|
|
•
|
Food Care (including Medical Applications and New Ventures businesses); and
|
•
|
Product Care.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net Sales
|
|
|
|
|
|
|
|
|
|
|||
Food Care
|
|
$
|
2,815.2
|
|
|
$
|
2,686.8
|
|
|
$
|
2,856.1
|
|
As a % of Total Company net sales
|
|
63.1
|
%
|
|
63.8
|
%
|
|
64.8
|
%
|
|||
Product Care
|
|
1,646.4
|
|
|
1,524.5
|
|
|
1,554.2
|
|
|||
As a % of Total Company net sales
|
|
36.9
|
%
|
|
36.2
|
%
|
|
35.2
|
%
|
|||
Total Company Net Sales
|
|
$
|
4,461.6
|
|
|
$
|
4,211.3
|
|
|
$
|
4,410.3
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Adjusted EBITDA from continuing operations
|
|
|
|
|
|
|
|
|
|
|||
Food Care
|
|
$
|
608.3
|
|
|
$
|
605.4
|
|
|
$
|
643.7
|
|
Adjusted EBITDA Margin
|
|
21.6
|
%
|
|
22.5
|
%
|
|
22.5
|
%
|
|||
Product Care
|
|
332.3
|
|
|
331.1
|
|
|
322.1
|
|
|||
Adjusted EBITDA Margin
|
|
20.2
|
%
|
|
21.7
|
%
|
|
20.7
|
%
|
|||
Corporate
(1)
|
|
(107.3
|
)
|
|
(127.3
|
)
|
|
(115.7
|
)
|
|||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
833.3
|
|
|
$
|
809.2
|
|
|
$
|
850.1
|
|
Adjusted EBITDA Margin
|
|
18.7
|
%
|
|
19.2
|
%
|
|
19.3
|
%
|
|
(1)
|
Corporate includes costs previously allocated to the Diversey Care segment and Food Hygiene and Cleaning business of our Food Care segment which are included as part of continuing operations of
$13.7 million
,
$15.0 million
and
$16.3 million
for
December 31,
2017,
2016
and
2015
respectively.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings from continuing operations
|
|
$
|
62.8
|
|
|
$
|
292.3
|
|
|
$
|
158.8
|
|
Interest expense
|
|
(201.8
|
)
|
|
(199.4
|
)
|
|
(211.0
|
)
|
|||
Interest income
|
|
17.6
|
|
|
7.5
|
|
|
6.8
|
|
|||
Income tax provision
(1)
|
|
330.5
|
|
|
95.6
|
|
|
132.6
|
|
|||
Depreciation and amortization
(4)
|
|
(158.3
|
)
|
|
(154.0
|
)
|
|
(151.3
|
)
|
|||
Depreciation and amortization adjustments
(2)
|
|
—
|
|
|
1.7
|
|
|
0.1
|
|
|||
Special Items:
|
|
|
|
|
|
|
||||||
Restructuring and other charges
(1)(5)
|
|
(12.1
|
)
|
|
(2.5
|
)
|
|
(48.7
|
)
|
|||
Other restructuring associated costs included in cost of sales and selling, general and administrative expenses
|
|
(14.3
|
)
|
|
(19.8
|
)
|
|
(25.7
|
)
|
|||
SARs
|
|
2.6
|
|
|
(0.7
|
)
|
|
(3.9
|
)
|
|||
Foreign currency exchange loss related to Venezuelan subsidiaries
|
|
—
|
|
|
(1.7
|
)
|
|
(27.2
|
)
|
|||
Charges related to ceasing operations in Venezuela
(1)
|
|
—
|
|
|
(48.5
|
)
|
|
—
|
|
|||
Loss on debt redemption and refinancing activities
|
|
—
|
|
|
(0.1
|
)
|
|
(110.0
|
)
|
|||
(Loss) gain on sale of North American foam trays and absorbent pads business and European food trays business
|
|
—
|
|
|
(1.8
|
)
|
|
13.4
|
|
|||
Charges related to acquisitions and divestitures and the sale of property, plant and equipment
|
|
(15.5
|
)
|
|
—
|
|
|
—
|
|
|||
Charges incurred related to the sale of Diversey
|
|
(68.6
|
)
|
|
(1.4
|
)
|
|
—
|
|
|||
Settlement/curtailment benefits related to the sale of Diversey pension plans
|
|
13.5
|
|
|
—
|
|
|
—
|
|
|||
Other Special Items
(3)
|
|
(3.1
|
)
|
|
(0.6
|
)
|
|
(1.2
|
)
|
|||
Pre-tax impact of Special Items
|
|
(97.5
|
)
|
|
(77.1
|
)
|
|
(203.3
|
)
|
|||
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations
|
|
$
|
833.3
|
|
|
$
|
809.2
|
|
|
$
|
850.1
|
|
|
(1)
|
Due to the ongoing challenging economic situation in Venezuela, the Company approved a program in the second quarter of 2016 to cease operations in the country. Refer to Note 2 “Summary of Significant Accounting Policies and Recently Issued Accounting Standards," of the Notes to Consolidated Financial Statements for further details.
|
(2)
|
This includes accelerated depreciation of non-strategic assets related to restructuring programs which were
$1.1 million
and
$0.1 million
for the years ended December 31,
2016
and
2015
, respectively.
|
(3)
|
Other Special Items for the year ended
December 31, 2017
primarily included transaction costs related to reorganizations. Other Special Items for the year ended
December 31, 2016
primarily included legal fees associated with restructuring and immaterial divestitures and acquisitions partially offset by a reduction in a non-income tax reserve following the completion of a governmental audit. Other Special Items for the year ended
December 31, 2015
primarily included legal fees associated with restructuring and acquisitions.
|
(4)
|
Depreciation and amortization by segment is as follows:
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Food Care
|
|
$
|
103.8
|
|
|
$
|
92.2
|
|
|
$
|
97.1
|
|
Product Care
|
|
47.3
|
|
|
40.1
|
|
|
37.6
|
|
|||
Corporate
|
|
7.2
|
|
|
21.7
|
|
|
16.6
|
|
|||
Total Company depreciation and amortization
(i)
|
|
$
|
158.3
|
|
|
$
|
154.0
|
|
|
$
|
151.3
|
|
|
(i)
|
Includes share-based incentive compensation of
$38.2 million
in
2017
,
$50.9 million
in
2016
and
$51.0 million
in
2015
.
|
(5)
|
Restructuring and other charges by segment were as follows:
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Food Care
|
|
$
|
7.6
|
|
|
$
|
1.6
|
|
|
$
|
31.5
|
|
Product Care
|
|
4.5
|
|
|
0.9
|
|
|
17.2
|
|
|||
Total Company restructuring and other charges
(i)
|
|
$
|
12.1
|
|
|
$
|
2.5
|
|
|
$
|
48.7
|
|
|
(i)
|
For the year ended
December 31, 2016
restructuring and other charges excludes
$0.3 million
related to severance and termination benefits for employees in our Venezuelan subsidiaries.
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Assets:
|
|
|
|
|
|
|
||
Trade receivables, net, and finished goods inventories, net
|
|
|
|
|
|
|
||
Food Care
|
|
$
|
511.5
|
|
|
$
|
459.9
|
|
Product Care
|
|
339.1
|
|
|
261.5
|
|
||
Total segments and other
|
|
$
|
850.6
|
|
|
$
|
721.4
|
|
Assets not allocated
|
|
|
|
|
||||
Cash and cash equivalents
|
|
594.0
|
|
|
333.7
|
|
||
Property and equipment, net
|
|
998.4
|
|
|
889.6
|
|
||
Goodwill
|
|
1,939.8
|
|
|
1,882.9
|
|
||
Intangible assets, net
|
|
83.6
|
|
|
40.1
|
|
||
Assets held for sale
|
|
4.0
|
|
|
2,840.8
|
|
||
Other
|
|
809.9
|
|
|
707.0
|
|
||
Total
|
|
$
|
5,280.3
|
|
|
$
|
7,415.5
|
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
(1)
:
|
|
|
|
|
|
|
||||||
North America
(3)
|
|
$
|
2,415.0
|
|
|
$
|
2,237.8
|
|
|
$
|
2,315.2
|
|
EMEA
|
|
984.7
|
|
|
962.7
|
|
|
1,033.1
|
|
|||
Latin America
|
|
409.3
|
|
|
396.8
|
|
|
423.3
|
|
|||
APAC
|
|
652.6
|
|
|
614.0
|
|
|
638.7
|
|
|||
Total
|
|
$
|
4,461.6
|
|
|
$
|
4,211.3
|
|
|
$
|
4,410.3
|
|
Total long-lived assets
(1)(2)
:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
639.6
|
|
|
$
|
633.5
|
|
|
|
||
EMEA
|
|
274.1
|
|
|
213.3
|
|
|
|
||||
Latin America
|
|
74.6
|
|
|
68.7
|
|
|
|
||||
APAC
|
|
226.0
|
|
|
149.5
|
|
|
|
||||
Total
|
|
$
|
1,214.3
|
|
|
$
|
1,065.0
|
|
|
|
|
(1)
|
Net sales to external customers attributed to geographic areas represent net sales to external customers based on destination. No non-U.S. country accounted for net sales in excess of
10%
of consolidated net sales for the years ended
December 31, 2017
,
2016
or
2015
or long-lived assets in excess of
10%
of consolidated long-lived assets at
December 31, 2017
and
2016
.
|
(2)
|
Total long-lived assets represent total assets excluding total current assets, deferred tax assets, goodwill, intangible assets and non-current assets held for sale.
|
(3)
|
Net sales to external customers within the U.S. were
$2,278.6 million
for the year ended
December 31, 2017
,
$2,112.1 million
for the year ended
December 31, 2016
and
$2,188.8 million
for the year ended
December 31, 2015
.
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Inventories, net:
|
|
|
|
|
|
|
||
Raw materials
|
|
$
|
82.8
|
|
|
$
|
81.5
|
|
Work in process
|
|
125.7
|
|
|
114.4
|
|
||
Finished goods
|
|
298.3
|
|
|
260.8
|
|
||
Total
|
|
$
|
506.8
|
|
|
$
|
456.7
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Land and improvements
|
|
$
|
43.5
|
|
|
$
|
41.6
|
|
Buildings
|
|
718.9
|
|
|
600.2
|
|
||
Machinery and equipment
|
|
2,330.5
|
|
|
2,091.5
|
|
||
Other property and equipment
|
|
116.3
|
|
|
104.3
|
|
||
Construction-in-progress
|
|
114.7
|
|
|
210.1
|
|
||
Property and equipment, gross
|
|
3,323.9
|
|
|
3,047.7
|
|
||
Accumulated depreciation and amortization
|
|
(2,325.5
|
)
|
|
(2,158.1
|
)
|
||
Property and equipment, net
|
|
$
|
998.4
|
|
|
$
|
889.6
|
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest cost capitalized
|
|
$
|
10.3
|
|
|
$
|
11.0
|
|
|
$
|
5.4
|
|
Depreciation and amortization expense for property and equipment
|
|
$
|
107.0
|
|
|
$
|
88.2
|
|
|
$
|
89.1
|
|
(In millions)
|
|
Food Care
|
|
Product Care
|
|
Total
|
||||||
Carrying Value at December 31, 2016
|
|
$
|
510.8
|
|
|
$
|
1,372.1
|
|
|
$
|
1,882.9
|
|
Acquisition and divestiture
|
|
10.1
|
|
|
39.3
|
|
|
49.4
|
|
|||
Currency translation
|
|
6.0
|
|
|
1.5
|
|
|
7.5
|
|
|||
Carrying Value at December 31, 2017
|
|
$
|
526.9
|
|
|
$
|
1,412.9
|
|
|
$
|
1,939.8
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
(1)
|
|
Gross
Carrying
Value
|
|
Accumulated
Impairment
|
|
Net
|
||||||||||||
Customer relationships
|
|
$
|
59.7
|
|
|
$
|
(19.7
|
)
|
|
$
|
40.0
|
|
|
$
|
25.0
|
|
|
$
|
(17.5
|
)
|
|
$
|
7.5
|
|
Trademarks and tradenames
|
|
11.6
|
|
|
(0.5
|
)
|
|
11.1
|
|
|
0.6
|
|
|
(0.2
|
)
|
|
0.4
|
|
||||||
Capitalized software
|
|
50.6
|
|
|
(40.0
|
)
|
|
10.6
|
|
|
42.6
|
|
|
(31.2
|
)
|
|
11.4
|
|
||||||
Technology
|
|
39.2
|
|
|
(27.5
|
)
|
|
11.7
|
|
|
34.4
|
|
|
(24.2
|
)
|
|
10.2
|
|
||||||
Contracts
|
|
10.9
|
|
|
(9.6
|
)
|
|
1.3
|
|
|
10.6
|
|
|
(8.9
|
)
|
|
1.7
|
|
||||||
Total intangible assets with definite lives
|
|
172.0
|
|
|
(97.3
|
)
|
|
74.7
|
|
|
113.2
|
|
|
(82.0
|
)
|
|
31.2
|
|
||||||
Trademarks and tradenames with indefinite lives
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
||||||
Total identifiable intangible assets
|
|
$
|
180.9
|
|
|
$
|
(97.3
|
)
|
|
$
|
83.6
|
|
|
$
|
122.1
|
|
|
$
|
(82.0
|
)
|
|
$
|
40.1
|
|
|
(1)
|
As of December 31, 2017, amounts include intangible assets inquired as part of the Fagerdala acquisition. See Note 3, "Discontinued Operations, Divestitures and Acquisitions" to the Notes to Consolidated Financial Statements for additional information related to the Fagerdala acquisition.
|
Year
|
|
Amount
(in millions)
|
||
2018
|
|
$
|
11.1
|
|
2019
|
|
8.1
|
|
|
2020
|
|
5.8
|
|
|
2021
|
|
5.3
|
|
|
Thereafter
|
|
44.4
|
|
|
Total
|
|
$
|
74.7
|
|
|
Remaining weighted average useful lives
|
Customer relationships
|
15.3
|
Trademarks and trade names
|
14.5
|
Technology
|
3.3
|
Contracts
|
3.7
|
Total identifiable intangible assets, net with definite lives
|
11.5
|
|
|
Sealed Air Restructuring Program
|
||
Approximate positions eliminated by the Program
|
|
1,950
|
|
|
Estimated Program Costs (in millions):
|
|
|
||
Costs of reduction in headcount as a result of reorganization
|
|
$260-$270
|
|
|
Other expenses associated with the Program
|
|
130-135
|
|
|
Total expense
|
|
$390-$405
|
|
|
Capital expenditures
|
|
250-255
|
|
|
Proceeds, foreign exchange and other cash items
|
|
(70)-(75)
|
|
|
Total estimated net cash cost
|
|
$570-$585
|
|
|
Program to Date Cumulative Expense (in millions):
|
|
|
||
Costs of reduction in headcount as a result of reorganization
|
|
$
|
237
|
|
Other expenses associated with the Program
|
|
123
|
|
|
Total Cumulative Expense
|
|
$
|
360
|
|
Cumulative capital expenditures
|
|
$
|
235
|
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Continuing operations:
|
|
|
|
|
|
|
||||||
Other associated costs
|
|
$
|
14.3
|
|
|
$
|
19.8
|
|
|
$
|
25.7
|
|
Restructuring charges
|
|
12.1
|
|
|
2.5
|
|
|
48.7
|
|
|||
Total charges from continuing operations
|
|
26.4
|
|
|
22.3
|
|
|
74.4
|
|
|||
Charges included in discontinued operations
|
|
2.4
|
|
|
18.6
|
|
|
46.8
|
|
|||
Total charges
|
|
$
|
28.8
|
|
|
$
|
40.9
|
|
|
$
|
121.2
|
|
Capital Expenditures
|
|
$
|
21.3
|
|
|
$
|
123.5
|
|
|
$
|
52.0
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Other current liabilities:
|
|
|
|
|
||||
Accrued salaries, wages and related costs
|
|
$
|
194.0
|
|
|
$
|
149.4
|
|
Accrued operating expenses
(1)
|
|
237.2
|
|
|
156.8
|
|
||
Accrued customer volume rebates
|
|
87.9
|
|
|
76.1
|
|
||
Accrued interest
|
|
38.5
|
|
|
37.9
|
|
||
Accrued employee benefit liability
|
|
4.4
|
|
|
3.2
|
|
||
Total
|
|
$
|
562.0
|
|
|
$
|
423.4
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Other non-current liabilities:
|
|
|
|
|
||||
Accrued employee benefit liability
|
|
$
|
163.7
|
|
|
$
|
172.4
|
|
Other postretirement liability
|
|
46.1
|
|
|
51.7
|
|
||
Other various liabilities
(1)
|
|
281.0
|
|
|
178.0
|
|
||
Total
|
|
$
|
490.8
|
|
|
$
|
402.1
|
|
|
(1)
|
As of December 31, 2017, accrued operating expenses and other various liabilities included income tax liabilities of
$36.4 million
and
$227.6 million
, respectively.
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Short-term borrowings
(1)
|
|
$
|
25.3
|
|
|
$
|
83.0
|
|
Current portion of long-term debt
|
|
2.2
|
|
|
297.0
|
|
||
Total current debt
|
|
27.5
|
|
|
380.0
|
|
||
Term Loan A due July 2019
|
|
222.7
|
|
|
818.3
|
|
||
6.50% Senior Notes due December 2020
|
|
423.6
|
|
|
423.1
|
|
||
4.875% Senior Notes due December 2022
|
|
420.4
|
|
|
419.6
|
|
||
5.25% Senior Notes due April 2023
|
|
420.4
|
|
|
419.7
|
|
||
4.50% Senior Notes due September 2023
|
|
474.3
|
|
|
416.7
|
|
||
5.125% Senior Notes due December 2024
|
|
420.7
|
|
|
420.2
|
|
||
5.50% Senior Notes due September 2025
|
|
396.7
|
|
|
396.4
|
|
||
6.875% Senior Notes due July 2033
|
|
445.4
|
|
|
445.3
|
|
||
Other
|
|
6.3
|
|
|
3.3
|
|
||
Total long-term debt, less current portion
(3)
|
|
3,230.5
|
|
|
3,762.6
|
|
||
Total debt
(2)(4)
|
|
$
|
3,258.0
|
|
|
$
|
4,142.6
|
|
|
(1)
|
Short-term borrowings of
$25.3 million
at
December 31, 2017
are comprised of
$2.1 million
of Diversey accounts payable obligations under financing arrangements which Sealed Air was fully reimbursed for as part of the sale of
|
(2)
|
As of
December 31, 2017
, our weighted average interest rate on our short-term borrowings outstanding was
5.4%
and on our long-term debt outstanding was
5.3%
. As of
December 31, 2016
, our weighted average interest rate on our short-term borrowings outstanding was
4.8%
and on our long-term debt outstanding was
4.7%
.
|
(3)
|
Amounts are net of unamortized discounts and issuance costs of
$29.5 million
as
December 31, 2017
and
$36.3 million
as of
December 31, 2016
.
|
(4)
|
Long-term debt instruments are listed in order of priority.
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Used lines of credit
(1)(2)
|
|
$
|
23.2
|
|
|
$
|
83.0
|
|
Unused lines of credit
|
|
1,108.6
|
|
|
1,074.4
|
|
||
Total available lines of credit
(3)
|
|
$
|
1,131.8
|
|
|
$
|
1,157.4
|
|
|
(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)
|
At the end of 2017 there was
no
cash held on deposit. As of
December 31, 2016
, there were
$25.4 million
of cash held on deposit as a compensating balance for certain short-term borrowings.
|
(3)
|
Of the total available lines of credit,
$855.5 million
were committed as of
December 31, 2017
.
|
Year
|
|
Amount
(in millions) |
||
2018
|
|
$
|
2.2
|
|
2019
|
|
228.2
|
|
|
2020
|
|
425.9
|
|
|
2021
|
|
0.4
|
|
|
2022
|
|
425.1
|
|
|
Thereafter
|
|
2,180.5
|
|
|
Total
|
|
$
|
3,262.3
|
|
|
|
Cash Flow Hedge
|
|
Net Investment Hedge
|
|
Non-Designated as Hedging Instruments
|
|
Total
|
||||||||||||||||||||||||
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
0.5
|
|
|
$
|
4.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
|
$
|
11.4
|
|
|
$
|
4.1
|
|
|
$
|
16.3
|
|
Interest rate and currency swaps
|
|
—
|
|
|
23.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.9
|
|
||||||||
Total Derivative Assets
|
|
$
|
0.5
|
|
|
$
|
28.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
|
$
|
11.4
|
|
|
$
|
4.1
|
|
|
$
|
40.2
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
(2.4
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3.3
|
)
|
|
$
|
(11.5
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(11.6
|
)
|
Cross-currency swaps
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
||||||||
Total Derivative Liabilities
(1)
|
|
$
|
(2.4
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(5.3
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(11.5
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(16.9
|
)
|
Net Derivatives
(2)
|
|
$
|
(1.9
|
)
|
|
$
|
28.7
|
|
|
$
|
—
|
|
|
$
|
(5.3
|
)
|
|
$
|
0.3
|
|
|
$
|
(0.1
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
23.3
|
|
|
(1)
|
Excludes
€400.0 million
of euro-denominated debt (
$474.3 million
equivalent at
December 31, 2017
and
$416.7 million
equivalent at
December 31, 2016
), designated as a net investment hedge.
|
(2)
|
The following table reconciles gross positions without the impact of master netting agreements to the balance sheet classification:
|
|
|
Other Current Assets
|
|
Other Current Liabilities
|
|
Other Non-current Assets
|
|
Other Non-current Liabilities
|
||||||||||||||||||||||||
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Gross position
|
|
$
|
4.1
|
|
|
$
|
22.6
|
|
|
$
|
(5.7
|
)
|
|
$
|
(11.6
|
)
|
|
$
|
—
|
|
|
$
|
17.6
|
|
|
$
|
—
|
|
|
$
|
(5.3
|
)
|
Reclassified to held for sale
|
|
—
|
|
|
(7.3
|
)
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
(17.6
|
)
|
|
—
|
|
|
—
|
|
||||||||
Impact of master netting agreements
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
0.4
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net amounts recognized on the Consolidated Balance Sheet
|
|
$
|
3.7
|
|
|
$
|
15.1
|
|
|
$
|
(5.3
|
)
|
|
$
|
(9.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5.3
|
)
|
|
|
Amount of Gain (Loss) Recognized in
Earnings on Derivatives
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
(1)(4)
|
|
$
|
0.9
|
|
|
$
|
0.6
|
|
|
$
|
9.6
|
|
Interest rate and currency swaps
(2)(4)
|
|
(3.4
|
)
|
|
(25.9
|
)
|
|
25.7
|
|
|||
Treasury locks
(3)
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Sub-total cash flow hedges
|
|
(2.4
|
)
|
|
(25.2
|
)
|
|
35.4
|
|
|||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
|
|||
Interest rate swaps
|
|
0.5
|
|
|
0.5
|
|
|
0.4
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
(4)
|
|
(8.4
|
)
|
|
(27.6
|
)
|
|
32.0
|
|
|||
Total
|
|
$
|
(10.3
|
)
|
|
$
|
(52.3
|
)
|
|
$
|
67.8
|
|
|
(1)
|
Amounts recognized on the foreign currency forward contracts were included in cost of sales during the years ended
December 31, 2017
and 2016 and other income (expense), net during the year ended
December 31, 2015
.
|
(2)
|
As of
December 31, 2017
, amounts recognized on the interest rate and currency swaps included a
$1.0 million
loss on the remeasurement of the hedged debt, which is included in other (expense) income, net and interest expense of
$2.5 million
related to the hedge of the interest payments. As of
December 31, 2016
, amounts recognized on the interest rate and currency swaps included a
$20.8 million
loss which offset a loss on remeasurement of the hedged debt, which is included in other (expense) income, net and interest expense of
$5.1 million
related to the hedge of interest payments. As of
December 31, 2015
, amounts recognized on the interest rate and currency swaps included a
$31.6 million
gain which offset a loss on remeasurement of the hedged debt, which is included in other (expense) income, net and interest expense of
$5.9 million
related to the hedge of interest payments.
|
(3)
|
Amounts recognized on the treasury locks were included in interest expense which is related to amortization of terminated interest rate swaps.
|
(4)
|
Amounts related to Diversey have been reclassified to earnings from discontinued operations, net of tax on the Consolidated Statement of Operations. For the years ended December 31, 2017, 2016 and 2015 there was
$0.8 million
,
$(32.2) million
and
$22.4 million
reclassified, respectively.
|
|
|
December 31, 2017
|
||||||||||||||
(In millions)
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents
|
|
$
|
297.5
|
|
|
$
|
297.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative financial and hedging instruments net asset (liability):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward and option contracts
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
|
December 31, 2016
|
||||||||||||||
(In millions)
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents
|
|
$
|
71.3
|
|
|
$
|
71.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Compensating balance deposits
|
|
$
|
52.9
|
|
|
$
|
52.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative financial and hedging instruments net asset (liability):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
Interest rate and currency swaps
|
|
$
|
23.9
|
|
|
$
|
—
|
|
|
$
|
23.9
|
|
|
$
|
—
|
|
Cross-currency swaps
|
|
$
|
(5.3
|
)
|
|
$
|
—
|
|
|
$
|
(5.3
|
)
|
|
$
|
—
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(In millions)
|
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
Term Loan A Facility due July 2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
249.9
|
|
|
$
|
249.9
|
|
Term Loan A Facility due July 2019
(1)
|
|
222.7
|
|
|
222.7
|
|
|
1,067.8
|
|
|
1,067.8
|
|
||||
6.50% Senior Notes due December 2020
|
|
423.6
|
|
|
465.1
|
|
|
423.1
|
|
|
477.3
|
|
||||
4.875% Senior Notes due December 2022
|
|
420.4
|
|
|
451.0
|
|
|
419.6
|
|
|
437.6
|
|
||||
5.25% Senior Notes due April 2023
|
|
420.4
|
|
|
455.6
|
|
|
419.7
|
|
|
441.1
|
|
||||
4.50% Senior Notes due September 2023
(1)
|
|
474.3
|
|
|
544.4
|
|
|
416.7
|
|
|
453.4
|
|
||||
5.125% Senior Notes due December 2024
|
|
420.7
|
|
|
456.2
|
|
|
420.2
|
|
|
437.3
|
|
||||
5.50% Senior Notes due September 2025
|
|
396.7
|
|
|
439.9
|
|
|
396.4
|
|
|
418.8
|
|
||||
6.875% Senior Notes due July 2033
|
|
445.4
|
|
|
527.3
|
|
|
445.3
|
|
|
462.7
|
|
||||
Other foreign loans
(1)
|
|
30.2
|
|
|
30.4
|
|
|
78.9
|
|
|
79.2
|
|
||||
Other domestic loans
|
|
3.6
|
|
|
3.6
|
|
|
21.4
|
|
|
21.3
|
|
||||
Total debt
|
|
$
|
3,258.0
|
|
|
$
|
3,596.2
|
|
|
$
|
4,359.0
|
|
|
$
|
4,546.4
|
|
Less amounts included as liabilities held for sale
|
|
—
|
|
|
—
|
|
|
216.4
|
|
|
216.4
|
|
||||
Total debt from continuing operations
|
|
$
|
3,258.0
|
|
|
$
|
3,596.2
|
|
|
$
|
4,142.6
|
|
|
$
|
4,330.0
|
|
|
(1)
|
Includes borrowings denominated in currencies other than U.S. dollars.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net periodic benefit cost:
|
|
|
|
|
|
|
||||||
U.S. and international net periodic benefit cost (income) included in cost of sales
|
|
$
|
0.2
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
U.S. and international net periodic benefit cost included in selling, general and administrative expenses
|
|
0.8
|
|
|
10.2
|
|
|
9.2
|
|
|||
Total benefit cost
|
|
$
|
1.0
|
|
|
$
|
11.9
|
|
|
$
|
10.9
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Projected benefit obligation at beginning of period
|
|
$
|
213.1
|
|
|
$
|
765.8
|
|
|
$
|
978.9
|
|
|
$
|
215.0
|
|
|
$
|
748.0
|
|
|
$
|
963.0
|
|
Service cost
|
|
0.1
|
|
|
6.9
|
|
|
7.0
|
|
|
0.6
|
|
|
10.0
|
|
|
10.6
|
|
||||||
Interest cost
|
|
6.8
|
|
|
16.1
|
|
|
22.9
|
|
|
7.8
|
|
|
18.3
|
|
|
26.1
|
|
||||||
Actuarial loss (gain)
|
|
11.3
|
|
|
16.5
|
|
|
27.8
|
|
|
8.9
|
|
|
72.6
|
|
|
81.5
|
|
||||||
Settlement/curtailment
|
|
(13.8
|
)
|
|
(21.2
|
)
|
|
(35.0
|
)
|
|
(11.4
|
)
|
|
(0.6
|
)
|
|
(12.0
|
)
|
||||||
Benefits paid
|
|
(12.9
|
)
|
|
(22.6
|
)
|
|
(35.5
|
)
|
|
(12.7
|
)
|
|
(27.2
|
)
|
|
(39.9
|
)
|
||||||
Employee contributions
|
|
—
|
|
|
2.2
|
|
|
2.2
|
|
|
—
|
|
|
2.8
|
|
|
2.8
|
|
||||||
Business divestiture
|
|
—
|
|
|
(120.2
|
)
|
|
(120.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
0.1
|
|
|
1.1
|
|
|
1.2
|
|
|
4.9
|
|
|
(1.7
|
)
|
|
3.2
|
|
||||||
Foreign exchange impact
|
|
—
|
|
|
57.6
|
|
|
57.6
|
|
|
—
|
|
|
(56.4
|
)
|
|
(56.4
|
)
|
||||||
Projected benefit obligation at end of period
|
|
$
|
204.7
|
|
|
$
|
702.2
|
|
|
$
|
906.9
|
|
|
$
|
213.1
|
|
|
$
|
765.8
|
|
|
$
|
978.9
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
|
$
|
150.3
|
|
|
$
|
621.5
|
|
|
$
|
771.8
|
|
|
$
|
156.7
|
|
|
$
|
603.6
|
|
|
$
|
760.3
|
|
Actual return on plan assets
|
|
19.3
|
|
|
50.8
|
|
|
70.1
|
|
|
9.1
|
|
|
80.5
|
|
|
89.6
|
|
||||||
Employer contributions
|
|
6.3
|
|
|
21.8
|
|
|
28.1
|
|
|
0.2
|
|
|
17.7
|
|
|
17.9
|
|
||||||
Employee contributions
|
|
—
|
|
|
2.2
|
|
|
2.2
|
|
|
—
|
|
|
2.8
|
|
|
2.8
|
|
||||||
Benefits paid
|
|
(12.9
|
)
|
|
(22.6
|
)
|
|
(35.5
|
)
|
|
(12.7
|
)
|
|
(27.2
|
)
|
|
(39.9
|
)
|
||||||
Settlement/curtailment
|
|
(14.3
|
)
|
|
(16.1
|
)
|
|
(30.4
|
)
|
|
(5.1
|
)
|
|
(0.5
|
)
|
|
(5.6
|
)
|
||||||
Business divestiture
|
|
—
|
|
|
(74.2
|
)
|
|
(74.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
2.1
|
|
|
—
|
|
|
2.1
|
|
||||||
Foreign exchange impact
|
|
—
|
|
|
44.6
|
|
|
44.6
|
|
|
—
|
|
|
(55.4
|
)
|
|
(55.4
|
)
|
||||||
Fair value of plan assets at end of period
|
|
$
|
148.7
|
|
|
$
|
627.5
|
|
|
$
|
776.2
|
|
|
$
|
150.3
|
|
|
$
|
621.5
|
|
|
$
|
771.8
|
|
Underfunded status at end of year
|
|
$
|
(56.0
|
)
|
|
$
|
(74.7
|
)
|
|
$
|
(130.7
|
)
|
|
$
|
(62.8
|
)
|
|
$
|
(144.3
|
)
|
|
$
|
(207.1
|
)
|
Accumulated benefit obligation at end of year
|
|
$
|
204.8
|
|
|
$
|
688.9
|
|
|
$
|
893.7
|
|
|
$
|
213.1
|
|
|
$
|
720.6
|
|
|
$
|
933.7
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||
Other assets
|
|
$
|
—
|
|
|
$
|
39.1
|
|
|
$
|
39.1
|
|
|
$
|
—
|
|
|
$
|
17.8
|
|
|
$
|
17.8
|
|
Other current liabilities
|
|
—
|
|
|
(2.4
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
(2.5
|
)
|
|
(2.5
|
)
|
||||||
Other liabilities
|
|
(56.1
|
)
|
|
(113.3
|
)
|
|
(169.4
|
)
|
|
(61.1
|
)
|
|
(120.9
|
)
|
|
(182.0
|
)
|
||||||
Net amount recognized
|
|
$
|
(56.1
|
)
|
|
$
|
(76.6
|
)
|
|
$
|
(132.7
|
)
|
|
$
|
(61.1
|
)
|
|
$
|
(105.6
|
)
|
|
$
|
(166.7
|
)
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||||||||
Components of net periodic benefit cost (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Service cost
|
|
$
|
0.1
|
|
|
$
|
6.9
|
|
|
$
|
7.0
|
|
|
$
|
0.6
|
|
|
$
|
10.0
|
|
|
$
|
10.6
|
|
|
$
|
0.7
|
|
|
$
|
10.7
|
|
|
$
|
11.4
|
|
Interest cost
|
|
6.8
|
|
|
16.1
|
|
|
22.9
|
|
|
7.8
|
|
|
18.3
|
|
|
26.1
|
|
|
8.6
|
|
|
21.8
|
|
|
30.4
|
|
|||||||||
Expected return on plan assets
|
|
(9.8
|
)
|
|
(30.6
|
)
|
|
(40.4
|
)
|
|
(10.0
|
)
|
|
(24.3
|
)
|
|
(34.3
|
)
|
|
(11.4
|
)
|
|
(28.3
|
)
|
|
(39.7
|
)
|
|||||||||
Other adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of net prior service cost
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of net actuarial loss
|
|
0.8
|
|
|
5.7
|
|
|
6.5
|
|
|
2.2
|
|
|
5.3
|
|
|
7.5
|
|
|
1.8
|
|
|
6.0
|
|
|
7.8
|
|
|||||||||
Net periodic benefit (income) cost
|
|
$
|
(2.1
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
1.9
|
|
|
$
|
9.3
|
|
|
$
|
11.2
|
|
|
$
|
(0.3
|
)
|
|
$
|
10.2
|
|
|
$
|
9.9
|
|
Cost (income) of settlement/curtailment
|
|
2.1
|
|
|
3.0
|
|
|
5.1
|
|
|
0.6
|
|
|
0.1
|
|
|
0.7
|
|
|
1.6
|
|
|
(0.6
|
)
|
|
1.0
|
|
|||||||||
Total benefit cost
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
1.0
|
|
|
$
|
2.5
|
|
|
$
|
9.4
|
|
|
$
|
11.9
|
|
|
$
|
1.3
|
|
|
$
|
9.6
|
|
|
$
|
10.9
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||
Unrecognized prior service costs
|
|
$
|
0.1
|
|
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
(1.2
|
)
|
|
$
|
(1.2
|
)
|
Unrecognized net actuarial loss
|
|
41.4
|
|
|
104.7
|
|
|
146.1
|
|
|
42.0
|
|
|
163.0
|
|
|
205.0
|
|
||||||
Total
|
|
$
|
41.5
|
|
|
$
|
105.3
|
|
|
$
|
146.8
|
|
|
$
|
42.0
|
|
|
$
|
161.8
|
|
|
$
|
203.8
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||
Current year actuarial loss (gain)
|
|
$
|
2.3
|
|
|
$
|
(8.7
|
)
|
|
$
|
(6.4
|
)
|
|
$
|
3.6
|
|
|
$
|
16.2
|
|
|
$
|
19.8
|
|
Amortization of actuarial loss
|
|
(0.8
|
)
|
|
(5.7
|
)
|
|
(6.5
|
)
|
|
(2.3
|
)
|
|
(5.3
|
)
|
|
(7.6
|
)
|
||||||
Business divestiture
|
|
—
|
|
|
(42.6
|
)
|
|
(42.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other adjustments
|
|
—
|
|
|
1.3
|
|
|
1.3
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
||||||
Settlement/curtailment gain
|
|
(2.1
|
)
|
|
(2.3
|
)
|
|
(4.4
|
)
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(0.7
|
)
|
||||||
Total
|
|
$
|
(0.6
|
)
|
|
$
|
(58.0
|
)
|
|
$
|
(58.6
|
)
|
|
$
|
1.0
|
|
|
$
|
10.7
|
|
|
$
|
11.7
|
|
|
|
Year Ended 2018
|
||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
||||||
Unrecognized prior service costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unrecognized net actuarial loss
|
|
1.0
|
|
|
2.5
|
|
|
3.5
|
|
|||
Total
|
|
$
|
1.0
|
|
|
$
|
2.5
|
|
|
$
|
3.5
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||
Accumulated benefit obligation
|
|
$
|
204.8
|
|
|
$
|
338.7
|
|
|
$
|
543.5
|
|
|
$
|
213.1
|
|
|
$
|
412.0
|
|
|
$
|
625.1
|
|
Fair value of plan assets
|
|
148.7
|
|
|
236.2
|
|
|
384.9
|
|
|
150.3
|
|
|
283.3
|
|
|
433.6
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
||||
Benefit obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
3.6
|
%
|
|
2.5
|
%
|
|
4.0
|
%
|
|
2.4
|
%
|
Rate of compensation increase
|
|
N/A
|
|
|
2.3
|
%
|
|
N/A
|
|
|
2.4
|
%
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
||||||
Net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
4.0
|
%
|
|
2.4
|
%
|
|
4.3
|
%
|
|
2.8
|
%
|
|
3.9
|
%
|
|
3.0
|
%
|
Expected long-term rate of return
|
|
6.7
|
%
|
|
5.0
|
%
|
|
6.7
|
%
|
|
4.3
|
%
|
|
6.5
|
%
|
|
4.7
|
%
|
Rate of compensation increase
|
|
N/A
|
|
|
2.4
|
%
|
|
3.0
|
%
|
|
2.5
|
%
|
|
3.0
|
%
|
|
2.4
|
%
|
|
|
Amount
|
||||||||||
(In millions)
|
|
U.S.
|
|
International
|
|
Total
|
||||||
Year
|
|
|
|
|
|
|
||||||
2018
|
|
$
|
13.4
|
|
|
$
|
29.8
|
|
|
$
|
43.2
|
|
2019
|
|
12.5
|
|
|
25.9
|
|
|
38.4
|
|
|||
2020
|
|
12.0
|
|
|
26.8
|
|
|
38.8
|
|
|||
2021
|
|
12.5
|
|
|
29.7
|
|
|
42.2
|
|
|||
2022
|
|
13.5
|
|
|
30.7
|
|
|
44.2
|
|
|||
Thereafter
|
|
62.3
|
|
|
158.2
|
|
|
220.5
|
|
|||
Total
|
|
$
|
126.2
|
|
|
$
|
301.1
|
|
|
$
|
427.3
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
|
Total
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
||||||||||||||||
(In millions)
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Cash and cash equivalents
(1)
|
|
$
|
7.5
|
|
|
$
|
5.6
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
|
$
|
4.3
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
Fixed income funds
(2)
|
|
385.9
|
|
|
—
|
|
|
385.9
|
|
|
—
|
|
|
371.9
|
|
|
—
|
|
|
371.9
|
|
|
—
|
|
||||||||
Equity funds
(3)
|
|
257.6
|
|
|
—
|
|
|
257.6
|
|
|
—
|
|
|
258.8
|
|
|
—
|
|
|
258.8
|
|
|
—
|
|
||||||||
Other
(4)
|
|
125.2
|
|
|
—
|
|
|
35.7
|
|
|
89.5
|
|
|
135.3
|
|
|
—
|
|
|
34.6
|
|
|
100.7
|
|
||||||||
Total
|
|
$
|
776.2
|
|
|
$
|
5.6
|
|
|
$
|
681.1
|
|
|
$
|
89.5
|
|
|
$
|
771.8
|
|
|
$
|
4.3
|
|
|
$
|
666.8
|
|
|
$
|
100.7
|
|
|
(1)
|
Short-term investment fund that invests in a collective trust that holds short-term highly liquid investments with principal preservation and daily liquidity as its primary objectives. Investments are primarily comprised of certificates of deposit, government securities, commercial paper, and time deposits.
|
(2)
|
Fixed income funds that invest in a diversified portfolio primarily consisting of publicly traded government bonds and corporate bonds. There are no restrictions on these investments, and they are valued at the net asset value of shares held at year end.
|
(3)
|
Equity funds that invest in a diversified portfolio of publicly traded domestic and international common stock, with an emphasis in European equities. There are no restrictions on these investments, and they are valued at the net asset value of shares held at year end.
|
(4)
|
The majority of these assets are invested in real estate funds and other alternative investments. Also includes guaranteed insurance contracts, which consists of Company and employee contributions and accumulated interest income at guaranteed stated interest rates and provides for benefit payments and plan expenses.
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
|
$
|
100.7
|
|
|
$
|
79.5
|
|
Gains on assets still held at end of year
|
|
2.3
|
|
|
4.8
|
|
||
Purchases, sales, issuance, and settlements
|
|
1.3
|
|
|
2.7
|
|
||
Transfers in and/or out of Level 3
|
|
(21.2
|
)
|
|
22.9
|
|
||
Foreign exchange gain (loss)
|
|
6.4
|
|
|
(9.2
|
)
|
||
Balance at end of period
|
|
$
|
89.5
|
|
|
$
|
100.7
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Change in benefit obligations:
|
|
|
|
|
||||
Benefit obligation at beginning of period
|
|
$
|
54.0
|
|
|
$
|
64.4
|
|
Service cost
|
|
0.1
|
|
|
0.2
|
|
||
Interest cost
|
|
1.6
|
|
|
1.9
|
|
||
Actuarial loss (gain)
|
|
1.0
|
|
|
(6.3
|
)
|
||
Benefits paid, net
|
|
(4.3
|
)
|
|
(4.3
|
)
|
||
Settlement/curtailment
|
|
(1.2
|
)
|
|
—
|
|
||
Loss due to exchange rate movements
|
|
0.1
|
|
|
—
|
|
||
Plan amendments
|
|
—
|
|
|
(1.9
|
)
|
||
Benefit obligation at end of period
|
|
$
|
51.3
|
|
|
$
|
54.0
|
|
Change in plan assets:
|
|
|
|
|
|
|
||
Fair value of plan assets at beginning of period
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer contribution
|
|
4.3
|
|
|
4.3
|
|
||
Benefits paid, net
|
|
(4.3
|
)
|
|
(4.3
|
)
|
||
Fair value of plan assets at end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
Net amount recognized:
|
|
|
|
|
|
|
||
Underfunded status
|
|
$
|
(51.3
|
)
|
|
$
|
(54.0
|
)
|
Accumulated benefit obligation at end of year
|
|
$
|
51.3
|
|
|
$
|
54.0
|
|
Net amount recognized in consolidated balance sheets consists of:
|
|
|
|
|
|
|
||
Current liability
|
|
$
|
(5.2
|
)
|
|
$
|
(3.0
|
)
|
Non-current liability
|
|
(46.1
|
)
|
|
(51.0
|
)
|
||
Net amount recognized
|
|
$
|
(51.3
|
)
|
|
$
|
(54.0
|
)
|
Amounts recognized in accumulated other comprehensive income consist of:
|
|
|
|
|
|
|
||
Net actuarial loss
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
Prior service credit
|
|
(3.1
|
)
|
|
(17.9
|
)
|
||
Total
|
|
$
|
(1.1
|
)
|
|
$
|
(15.9
|
)
|
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.8
|
|
Interest cost
|
|
1.6
|
|
|
1.9
|
|
|
2.9
|
|
|||
Amortization of net loss
|
|
(0.2
|
)
|
|
—
|
|
|
0.4
|
|
|||
Amortization of prior service credit
|
|
(1.2
|
)
|
|
(1.6
|
)
|
|
(0.8
|
)
|
|||
Net periodic benefit cost
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
$
|
3.3
|
|
Income of settlement/curtailment
|
|
(13.5
|
)
|
|
—
|
|
|
(1.2
|
)
|
|||
Total benefit (income) cost for fiscal year
|
|
$
|
(13.2
|
)
|
|
$
|
0.5
|
|
|
$
|
2.1
|
|
|
|
|
||
(In millions)
|
|
December 31, 2017
|
||
Unrecognized prior service costs
|
|
$
|
(0.3
|
)
|
Unrecognized net actuarial loss
|
|
(0.2
|
)
|
|
Total
|
|
$
|
(0.5
|
)
|
(In millions)
|
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total of service and interest cost components
|
|
$
|
—
|
|
|
$
|
—
|
|
Effect on post-retirement benefit obligation
|
|
0.4
|
|
|
(0.4
|
)
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current tax expense:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
79.6
|
|
|
$
|
57.6
|
|
|
$
|
44.7
|
|
State and local
|
|
14.3
|
|
|
1.2
|
|
|
8.4
|
|
|||
Foreign
|
|
106.0
|
|
|
67.3
|
|
|
49.0
|
|
|||
Total current expense
|
|
$
|
199.9
|
|
|
$
|
126.1
|
|
|
$
|
102.1
|
|
Deferred tax expense (benefit):
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
130.1
|
|
|
$
|
(15.8
|
)
|
|
$
|
10.7
|
|
State and local
|
|
5.3
|
|
|
3.6
|
|
|
10.9
|
|
|||
Foreign
|
|
(4.8
|
)
|
|
(18.3
|
)
|
|
8.9
|
|
|||
Total deferred tax expense (benefit)
|
|
130.6
|
|
|
(30.5
|
)
|
|
30.5
|
|
|||
Total income tax provision
|
|
$
|
330.5
|
|
|
$
|
95.6
|
|
|
$
|
132.6
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
2017
|
|
2016
|
||||
Restructuring reserves
|
|
$
|
2.7
|
|
|
$
|
6.6
|
|
Accruals not yet deductible for tax purposes
|
|
10.7
|
|
|
8.4
|
|
||
Net operating loss carryforwards
|
|
199.4
|
|
|
188.4
|
|
||
Foreign, federal and state credits
|
|
69.2
|
|
|
51.5
|
|
||
Employee benefit items
|
|
69.6
|
|
|
132.1
|
|
||
Capitalized expenses
|
|
10.8
|
|
|
45.7
|
|
||
Derivatives and other
|
|
23.7
|
|
|
—
|
|
||
Sub-total deferred tax assets
|
|
386.1
|
|
|
432.7
|
|
||
Valuation allowance
|
|
(189.2
|
)
|
|
(167.7
|
)
|
||
Total deferred tax assets
|
|
$
|
196.9
|
|
|
$
|
265.0
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
$
|
(13.9
|
)
|
|
$
|
(24.7
|
)
|
Unremitted foreign earnings
|
|
(9.0
|
)
|
|
(22.2
|
)
|
||
Intangibles
|
|
(26.3
|
)
|
|
(23.6
|
)
|
||
Other
|
|
—
|
|
|
(2.2
|
)
|
||
Total deferred tax liabilities
|
|
(49.2
|
)
|
|
(72.7
|
)
|
||
Net deferred tax assets
|
|
$
|
147.7
|
|
|
$
|
192.3
|
|
•
|
$151.2 million
of foreign items, primarily net operating losses;
|
•
|
$21.9 million
of state net operating loss carryforwards; and
|
•
|
$12.1 million
of state tax credits.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
Computed expected tax
|
|
$
|
137.7
|
|
|
35.0
|
%
|
|
$
|
135.9
|
|
|
35.0
|
%
|
|
$
|
102.0
|
|
|
35.0
|
%
|
State income taxes, net of federal tax benefit
|
|
7.6
|
|
|
1.9
|
%
|
|
4.8
|
|
|
1.2
|
%
|
|
12.5
|
|
|
4.3
|
%
|
|||
Foreign earnings taxed at lower rates
|
|
(22.3
|
)
|
|
(5.7
|
)%
|
|
(22.4
|
)
|
|
(5.8
|
)%
|
|
(22.6
|
)
|
|
(7.8
|
)%
|
|||
U.S. tax on foreign earnings
|
|
72.3
|
|
|
18.4
|
%
|
|
10.7
|
|
|
2.8
|
%
|
|
(0.5
|
)
|
|
(0.2
|
)%
|
|||
Foreign tax credits
|
|
(12.1
|
)
|
|
(3.1
|
)%
|
|
(30.3
|
)
|
|
(7.8
|
)%
|
|
(5.3
|
)
|
|
(1.8
|
)%
|
|||
Unremitted foreign earnings
|
|
—
|
|
|
—
|
%
|
|
(9.4
|
)
|
|
(2.4
|
)%
|
|
(86.0
|
)
|
|
(29.5
|
)%
|
|||
Reorganization and divestitures
|
|
75.9
|
|
|
19.3
|
%
|
|
—
|
|
|
—
|
%
|
|
67.9
|
|
|
23.3
|
%
|
|||
Net change in valuation allowance
|
|
(2.0
|
)
|
|
(0.5
|
)%
|
|
(47.8
|
)
|
|
(12.3
|
)%
|
|
47.8
|
|
|
16.4
|
%
|
|||
Net change in unrecognized tax benefits
|
|
33.4
|
|
|
8.5
|
%
|
|
16.0
|
|
|
4.1
|
%
|
|
75.3
|
|
|
25.8
|
%
|
|||
U.S. Tax Reform
|
|
41.1
|
|
|
10.4
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Deferred tax adjustments
|
|
14.1
|
|
|
3.6
|
%
|
|
47.1
|
|
|
12.1
|
%
|
|
(75.6
|
)
|
|
(25.9
|
)%
|
|||
Other
|
|
(15.2
|
)
|
|
(3.8
|
)%
|
|
(9.0
|
)
|
|
(2.3
|
)%
|
|
17.1
|
|
|
5.9
|
%
|
|||
Income tax expense and rate
|
|
$
|
330.5
|
|
|
84.0
|
%
|
|
$
|
95.6
|
|
|
24.6
|
%
|
|
$
|
132.6
|
|
|
45.5
|
%
|
•
|
increase in tax on items related to the sale of Diversey recognized in continuing operations;
|
•
|
increase related to U.S. tax on foreign income offset by benefit of foreign tax credits;
|
•
|
increase in tax expense due to the provisional impacts of the U.S. Tax Reform including revaluation of U.S. deferred tax assets; and
|
•
|
increase in tax expense for unrecognized tax benefits in foreign jurisdictions.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance of unrecognized tax benefits
|
|
$
|
162.6
|
|
|
$
|
131.3
|
|
|
$
|
18.9
|
|
Additions for tax positions of current year
|
|
7.3
|
|
|
11.1
|
|
|
1.2
|
|
|||
Additions for tax positions of prior years
|
|
49.3
|
|
|
23.4
|
|
|
111.8
|
|
|||
Reductions for tax positions of prior years
|
|
(4.3
|
)
|
|
(1.4
|
)
|
|
(0.6
|
)
|
|||
Reductions for lapses of statutes of limitation and settlements
|
|
(0.6
|
)
|
|
(1.8
|
)
|
|
—
|
|
|||
Ending balance of unrecognized tax benefits
|
|
$
|
214.3
|
|
|
$
|
162.6
|
|
|
$
|
131.3
|
|
•
|
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.
|
Year
|
Amount
(in millions)
|
||
2018
(1)
|
$
|
62.9
|
|
2019
|
2.5
|
|
|
2020
|
2.4
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
67.8
|
|
|
(1)
|
Contractual obligations in 2018 include an agreement of a one-time
$45.0 million
payment in lieu of certain future royalty payments to aid in expediting our organizational efficiency initiatives.
|
Year
|
Amount
(in millions)
|
||
2018
|
$
|
10.6
|
|
2019
|
7.9
|
|
|
2020
|
6.0
|
|
|
2021
|
3.4
|
|
|
2022
|
1.3
|
|
|
Thereafter
|
1.9
|
|
|
Total
|
$
|
31.1
|
|
(In millions, except per share amounts)
|
|
Total Cash
Dividends Paid
|
|
Total Cash Dividends
Paid Per Common Share
|
||||
2015
|
|
$
|
106.8
|
|
|
$
|
0.52
|
|
2016
|
|
121.6
|
|
|
0.61
|
|
||
2017
|
|
119.7
|
|
|
0.64
|
|
||
Total
|
|
$
|
348.1
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Changes in common stock:
|
|
|
|
|
|
|
|||
Number of shares, beginning of year
|
|
227,638,738
|
|
|
225,625,636
|
|
|
224,683,653
|
|
Restricted stock shares issued for new awards under the Omnibus Incentive Plan and 2005 Contingent Stock Plan
|
|
480,283
|
|
|
481,834
|
|
|
419,844
|
|
Restricted stock shares, forfeited
|
|
(184,235
|
)
|
|
(89,699
|
)
|
|
(185,056
|
)
|
Shares issued for vested restricted stock units
|
|
607,231
|
|
|
179,826
|
|
|
172,071
|
|
Shares issued for 2012 President and Chief Operating Officer (COO) Four-Year Award
|
|
—
|
|
|
325,000
|
|
|
—
|
|
Shares issued for 2014 Special PSU Awards
|
|
749,653
|
|
|
—
|
|
|
—
|
|
Shares issued for 2014 Three-Year PSU Awards
|
|
636,723
|
|
|
—
|
|
|
—
|
|
Shares issued for 2013 Three-Year PSU Awards
|
|
—
|
|
|
1,074,017
|
|
|
—
|
|
Shares issued for 2012 Three-Year PSU Awards
|
|
—
|
|
|
—
|
|
|
442,985
|
|
Shares issued for SLO Awards
|
|
136,783
|
|
|
20,587
|
|
|
71,893
|
|
Shares granted and issued under the Omnibus Incentive Plan and Directors Stock Plan to Directors
|
|
15,768
|
|
|
21,537
|
|
|
20,246
|
|
Number of shares issued, end of year
|
|
230,080,944
|
|
|
227,638,738
|
|
|
225,625,636
|
|
Changes in common stock in treasury:
|
|
|
|
|
|
|
|
|
|
Number of shares held, beginning of year
|
|
34,156,355
|
|
|
29,612,337
|
|
|
14,151,759
|
|
Repurchase of common stock
|
|
27,320,816
|
|
|
4,680,313
|
|
|
16,123,111
|
|
Profit sharing contribution paid in stock
|
|
(502,519
|
)
|
|
(830,613
|
)
|
|
(787,463
|
)
|
Restricted stock shares forfeitures transferred to Omnibus Incentive Plan Reserve
|
|
—
|
|
|
—
|
|
|
(75,638
|
)
|
Restricted stock shares, forfeited
|
|
—
|
|
|
(1,813
|
)
|
|
—
|
|
Shares withheld for taxes
|
|
510,771
|
|
|
696,131
|
|
|
200,568
|
|
Number of shares held, end of year
|
|
61,485,423
|
|
|
34,156,355
|
|
|
29,612,337
|
|
Number of common stock outstanding, end of year
|
|
168,595,521
|
|
|
193,482,383
|
|
|
196,013,299
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Number of shares available, beginning of year
|
|
5,385,870
|
|
|
7,694,739
|
|
|
8,775,994
|
|
Restricted stock shares issued for new awards under the Omnibus Incentive Plan and 2005 Contingent Stock Plan
|
|
(480,283
|
)
|
|
(481,834
|
)
|
|
(419,844
|
)
|
Restricted stock shares forfeited
|
|
184,235
|
|
|
87,886
|
|
|
185,056
|
|
Restricted stock units awarded
|
|
(351,946
|
)
|
|
(428,595
|
)
|
|
(300,085
|
)
|
Restricted stock units forfeited
|
|
288,801
|
|
|
29,774
|
|
|
38,100
|
|
Shares issued for 2012 President and COO Four-Year Award
|
|
—
|
|
|
(325,000
|
)
|
|
—
|
|
Shares issued for 2014 Special PSU Awards
|
|
(749,653
|
)
|
|
—
|
|
|
—
|
|
Shares issued for 2014 Three-Year PSU Awards
|
|
(636,723
|
)
|
|
—
|
|
|
—
|
|
Shares issued for 2013 Three-Year PSU Awards
|
|
—
|
|
|
(1,074,017
|
)
|
|
—
|
|
Shares issued for 2012 Three-year PSU Awards
|
|
—
|
|
|
—
|
|
|
(442,985
|
)
|
Restricted stock units awarded for SLO Awards
|
|
(44,254
|
)
|
|
(81,614
|
)
|
|
(134,078
|
)
|
SLO units forfeited
|
|
3,639
|
|
|
—
|
|
|
13,752
|
|
Director shares granted and issued
|
|
(15,491
|
)
|
|
(18,022
|
)
|
|
(20,246
|
)
|
Director units granted and deferred
(1)
|
|
(17,008
|
)
|
|
(17,447
|
)
|
|
(925
|
)
|
Shares withheld for taxes
(2)
|
|
101,767
|
|
|
—
|
|
|
—
|
|
Number of shares available, end of year
(3)
|
|
3,668,954
|
|
|
5,385,870
|
|
|
7,694,739
|
|
|
(1)
|
Director units granted and deferred include the impact of share-settled dividends earned and deferred on deferred shares.
|
(2)
|
The Omnibus Incentive Plan and 2005 Contingent Stock Plan permit “minimum” withholding of taxes and other charges that may be required by law to be paid attributable to awards by withholding a portion of the shares attributable to such awards.
|
(3)
|
The above table excludes approximately
2.2 million
of contingently issuable shares under the PSU awards and SLO awards, which represents the maximum number of shares that could be issued under those plans as of
December 31, 2017
.
|
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
2017 Three-year PSU Awards
(1)
|
|
$
|
9.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2017 COO and Chief Executive Officer-Designate 2017 New Hire Equity Awards
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
2016 Three-year PSU Awards
(1)
|
|
2.0
|
|
|
6.3
|
|
|
—
|
|
|||
2016 President & CEO Inducement Award
|
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|||
2015 Three-year PSU Awards
|
|
(0.8
|
)
|
|
3.5
|
|
|
4.7
|
|
|||
2014 Special PSU Awards
(2)(3)
|
|
3.2
|
|
|
8.8
|
|
|
15.7
|
|
|||
2014 Three-year PSU Awards
|
|
—
|
|
|
4.9
|
|
|
7.0
|
|
|||
2013 Three-year PSU Awards
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|||
2012 President & COO Four-year Incentive Compensation
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
|||
SLO Awards
|
|
1.1
|
|
|
2.5
|
|
|
3.7
|
|
|||
Other long-term share-based incentive compensation programs
(4)(6)
|
|
32.6
|
|
|
36.2
|
|
|
25.1
|
|
|||
Total share-based incentive compensation expense
(5)
|
|
$
|
48.5
|
|
|
$
|
62.9
|
|
|
$
|
61.2
|
|
Associated tax benefits recognized
|
|
$
|
11.8
|
|
|
$
|
19.7
|
|
|
$
|
18.6
|
|
|
(1)
|
On May 18, 2017, The Organization and Compensation Committee of our Board of Directors (“O&C Committee”) approved a change in the vesting policy regarding the existing 2017 Three-year PSU Awards and 2016 Three-year PSU Awards for Ilham Kadri. The approved change will result in a pro-rata share of vesting calculated on the close date of the sale of Diversey. Dr. Kadri’s awards will still be subject to the performance metrics stipulated in the plan documents, and will be paid out in accordance with the original planned timing.
|
(2)
|
The amount does not include expense related to the 2014 Special PSU awards that will be settled in cash of
$1.0 million
in the year ended
December 31, 2017
.
|
(3)
|
The amount includes only the two initial performance-based equity awards. See below for further detail.
|
(4)
|
The amount includes the expenses associated with the restricted stock awards consisting of restricted stock shares, restricted stock units and cash-settled restricted stock unit awards.
|
(5)
|
The amounts do not include the expense related to our U.S. profit sharing contributions made in the form of our common stock as these contributions are not considered share-based incentive compensation.
|
(6)
|
On August 4, 2017, the Equity Award Committee approved a change in the vesting condition regarding the existing long-term share based compensation programs transferring to Diversey as part of the sale of Diversey. The approved change will result in a pro-rata share of vesting calculated on the close date of the sale of Diversey. We recorded the cumulative expense of the higher fair value of the impacted awards at modification approval.
|
|
|
Restricted stock shares
|
|
Restricted stock units
|
||||||||||||||||||
|
|
Shares
|
|
Weighted-Average per Share Fair Value on Grant Date
|
|
Aggregate
Intrinsic
Value (in millions)
|
|
Shares
|
|
Weighted-Average per Share Fair Value on Grant Date
|
|
Aggregate
Intrinsic
Value (in millions)
|
||||||||||
Non-vested at December 31, 2016
|
|
1,317,138
|
|
|
$
|
40.13
|
|
|
|
|
|
1,101,444
|
|
|
$
|
40.11
|
|
|
|
|
||
Granted
|
|
480,283
|
|
|
47.00
|
|
|
|
|
|
351,946
|
|
|
46.75
|
|
|
|
|
||||
Vested
|
|
(567,770
|
)
|
|
34.33
|
|
|
$
|
26.6
|
|
|
(607,231
|
)
|
|
36.96
|
|
|
$
|
28.3
|
|
||
Forfeited or expired
|
|
(184,235
|
)
|
|
45.54
|
|
|
|
|
(288,737
|
)
|
|
43.66
|
|
|
|
||||||
Non-vested at December 31, 2017
|
|
1,045,416
|
|
|
$
|
45.21
|
|
|
|
|
|
557,422
|
|
|
$
|
45.34
|
|
|
|
|
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Fair value of restricted stock shares vested
|
|
$
|
19.5
|
|
|
$
|
10.0
|
|
|
$
|
10.2
|
|
Fair value of restricted stock units vested
|
|
$
|
22.4
|
|
|
$
|
5.2
|
|
|
$
|
3.0
|
|
(In millions)
|
|
Unrecognized Compensation Costs
|
|
Weighted Average to be recognized (in years)
|
||
Restricted Stock shares
|
|
$
|
21.0
|
|
|
1.3
|
Restricted Stock units
|
|
$
|
11.3
|
|
|
1.3
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Number of units granted
|
|
99,522
|
|
|
165,391
|
|
|
158,964
|
|
|||
Weighted average fair value on grant date
(1)
|
|
$
|
45.21
|
|
|
$
|
43.09
|
|
|
$
|
46.05
|
|
|
(1)
|
On May 18, 2017, the O&C Committee approved a change in the vesting policy regarding the existing 2017 Three-year PSU Awards and 2016 Three-year PSU Awards for Ilham Kadri. The modified vesting terms resulted in award modification accounting treatment. The Weighted average fair value on grant date reflects the impact of the fair value on date of modification for these awards.
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Number of units granted
|
|
100,958
|
|
|
124,755
|
|
|
65,796
|
|
|||
Weighted average fair value on grant date
(1)
|
|
$
|
44.24
|
|
|
$
|
54.94
|
|
|
$
|
59.91
|
|
Expected Price volatility
(1)
|
|
25.31
|
%
|
|
26.69
|
%
|
|
29.90
|
%
|
|||
Risk-free interest rate
(1)
|
|
1.56
|
%
|
|
0.98
|
%
|
|
1.05
|
%
|
|
(1)
|
On May 18, 2017, the O&C Committee approved a change in the vesting policy regarding the existing 2017 Three-year PSU Awards and 2016 Three-year PSU Awards for Ilham Kadri. The modified vesting terms resulted in award modification accounting treatment. The Weighted average fair value on grant date reflects the impact of the fair value on date of modification for these awards.
|
|
|
2017
|
||
Number of units granted
|
|
99,522
|
|
|
Weighted average fair value on grant date
(1)
|
|
$
|
45.21
|
|
|
(1)
|
On May 18, 2017, the O&C Committee approved a change in the vesting policy regarding the existing 2017 Three-year PSU Awards and 2016 Three-year PSU Awards for Ilham Kadri. The modified vesting terms resulted in award modification accounting treatment. The Weighted average fair value on grant date reflects the impact of the fair value on date of modification for these awards.
|
|
|
Estimated Payout %
|
||||||||||
|
|
Net Trade Sales Growth
|
|
Adjusted EBITDA
|
|
TSR
|
|
Combined
|
||||
2017 Three-year PSU Awards
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
2016 Three-year PSU Awards
|
|
NA
|
|
|
59
|
%
|
|
—
|
%
|
|
30
|
%
|
2015 Three-year PSU Awards
|
|
NA
|
|
|
73
|
%
|
|
73
|
%
|
|
73
|
%
|
|
|
Shares
|
|
Aggregate Intrinsic Value
(in millions)
(2)
|
|||
Outstanding at December 31, 2016
|
|
827,712
|
|
|
|
|
|
Granted
(1)
|
|
300,002
|
|
|
|
|
|
Converted
|
|
(325,178
|
)
|
|
$
|
30.0
|
|
Forfeited or expired
|
|
(139,605
|
)
|
|
|
||
Outstanding at December 31, 2017
|
|
662,931
|
|
|
|
|
|
Fully vested at December 31, 2017
|
|
543,975
|
|
|
$
|
26.8
|
|
|
(1)
|
This represents the target number of performance units granted. Actual number of PSUs earned, if any, is dependent upon performance and may range from
0%
to
200%
percent of the target.
|
(2)
|
The aggregate intrinsic value is based on the actual number of PSUs earned and vested at
December 31, 2016
which were issued in February
2017
.
|
|
|
Shares
|
|
Weighted-Average per Share Fair Value on Grant Date
|
|||
Non-vested at December 31, 2016
|
|
459,014
|
|
|
$
|
49.55
|
|
Granted
|
|
300,002
|
|
|
$
|
44.88
|
|
Vested
|
|
(500,455
|
)
|
|
$
|
47.89
|
|
Forfeited or expired
|
|
(139,605
|
)
|
|
$
|
46.43
|
|
Non-vested at December 31, 2017
|
|
118,956
|
|
|
$
|
48.40
|
|
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Fair value of three-year PSU awards vested
|
|
$
|
24.0
|
|
|
$
|
14.3
|
|
|
$
|
20.1
|
|
(In millions)
|
|
Unrecognized Compensation Costs
|
|
Weighted Average to be recognized (in years)
|
||
2017 Three-year PSU Awards
|
|
$
|
2.1
|
|
|
2.0
|
2016 Three-year PSU Awards
|
|
0.5
|
|
|
1.0
|
|
2015 Three-year PSU Awards
|
|
—
|
|
|
0.0
|
|
|
2017 Performance-vesting New Hire Award
|
||
Fair value on grant date
|
|
$
|
10.63
|
|
Expected price volatility
|
|
25.0
|
%
|
|
Risk-free interest rate
|
|
1.6
|
%
|
|
|
2016 Performance-vesting Inducement Award
|
||
Fair value on grant date
|
|
$
|
12.55
|
|
Expected price volatility
|
|
24.60
|
%
|
|
Risk-free interest rate
|
|
0.92
|
%
|
(In millions)
|
|
Unrecognized
Pension Items
|
|
Cumulative
Translation
Adjustment
|
|
Unrecognized
Gains (Losses) on Derivative Instruments for net investment
hedge
|
|
Unrecognized Gains (Losses) on Derivative Instruments
for cash flow hedge
|
|
Accumulated
Other Comprehensive
Income (Loss), Net of
Taxes
|
||||||||||
Balance at December 31, 2015
(1)
|
|
$
|
(266.0
|
)
|
|
$
|
(564.0
|
)
|
|
$
|
1.7
|
|
|
$
|
8.3
|
|
|
$
|
(820.0
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(18.0
|
)
|
|
(91.9
|
)
|
|
19.3
|
|
|
(16.7
|
)
|
|
(107.3
|
)
|
|||||
Less: amounts reclassified from accumulated other comprehensive income (loss)
|
|
7.3
|
|
|
(46.0
|
)
|
|
—
|
|
|
16.9
|
|
|
(21.8
|
)
|
|||||
Net current period other comprehensive (loss) income
|
|
(10.7
|
)
|
|
(137.9
|
)
|
|
19.3
|
|
|
0.2
|
|
|
(129.1
|
)
|
|||||
Balance at December 31, 2016
(1)
|
|
$
|
(276.7
|
)
|
|
$
|
(701.9
|
)
|
|
$
|
21.0
|
|
|
$
|
8.5
|
|
|
$
|
(949.1
|
)
|
Other comprehensive income (loss) before reclassifications
(2)
|
|
167.1
|
|
|
7.5
|
|
|
(67.8
|
)
|
|
(10.4
|
)
|
|
96.4
|
|
|||||
Less: amounts reclassified from accumulated other comprehensive income (loss)
|
|
6.2
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
7.8
|
|
|||||
Net current period other comprehensive income (loss)
|
|
173.3
|
|
|
7.5
|
|
|
(67.8
|
)
|
|
(8.8
|
)
|
|
104.2
|
|
|||||
Balance at December 31, 2017
(1)
|
|
$
|
(103.4
|
)
|
|
$
|
(694.4
|
)
|
|
$
|
(46.8
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(844.9
|
)
|
|
(1)
|
The ending balance in AOCI includes gains and losses on intra-entity foreign currency transactions. The intra-entity currency translation adjustment was
$(78.2) million
,
$(8.3) million
and
$31.1 million
for the years ended
December 31, 2017
,
2016
and
2015
.
|
(2)
|
Includes
$173.4 million
of unrecognized pension items and
$454.7 million
of cumulative translation adjustments, which were written off as part of the sale of Diversey for the year ended
December 31, 2017
.
|
(In millions)
|
|
2017
(1)
|
|
2016
(1)
|
|
2015
(1)
|
|
Location of Amount Reclassified from AOCI
|
||||||
Defined benefit pension plans and other post-employment benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Prior service costs
|
|
$
|
1.3
|
|
|
$
|
1.6
|
|
|
$
|
0.7
|
|
|
(2)
|
Actuarial losses
|
|
(10.0
|
)
|
|
(11.2
|
)
|
|
(11.1
|
)
|
|
(2)
|
|||
Total pre-tax amount
(5)
|
|
(8.7
|
)
|
|
(9.6
|
)
|
|
(10.4
|
)
|
|
|
|||
Tax (expense) benefit
|
|
2.5
|
|
|
2.3
|
|
|
2.3
|
|
|
|
|||
Net of tax
|
|
(6.2
|
)
|
|
(7.3
|
)
|
|
(8.1
|
)
|
|
|
|||
Reclassifications from cumulative translation adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Charges related to Venezuelan subsidiaries
|
|
—
|
|
|
46.0
|
|
|
—
|
|
|
(4)
|
|||
Net gains (losses) on cash flow hedging derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
0.9
|
|
|
0.6
|
|
|
9.6
|
|
|
(3)
Other income, net
|
|||
Interest rate and currency swaps
|
|
(3.4
|
)
|
|
(25.9
|
)
|
|
25.7
|
|
|
(3)
Various
|
|||
Treasury locks
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
(3)
Interest expense
|
|||
Total pre-tax amount
|
|
(2.4
|
)
|
|
(25.2
|
)
|
|
35.4
|
|
|
|
|||
Tax benefit (expense)
|
|
0.8
|
|
|
8.3
|
|
|
(11.0
|
)
|
|
|
|||
Net of tax
|
|
(1.6
|
)
|
|
(16.9
|
)
|
|
24.4
|
|
|
|
|||
Total reclassifications for the period
|
|
$
|
(7.8
|
)
|
|
$
|
21.8
|
|
|
$
|
16.3
|
|
|
|
|
(1)
|
Amounts in parenthesis indicate changes to earnings (loss).
|
(2)
|
These accumulated other comprehensive components are included in the computation of net periodic benefit costs within cost of sales and selling, general, and administrative expenses on the Consolidated Statement of Operations.
|
(3)
|
These accumulated other comprehensive components are included in our derivative and hedging activities. See Note 12, “Derivatives and Hedging Activities” of the Notes to Consolidated Financial Statements for additional details.
|
(4)
|
Due to the ongoing challenging economic situation in Venezuela, the Company approved a program in the second quarter of 2016 to cease operations in the country. Refer to Note 2, “Summary of Significant Accounting Policies and Recently Issued Accounting Standards” under the “Impact of Inflation and Currency Fluctuation” section of the Notes to the Consolidated Financial Statements for further details.
|
(5)
|
Amounts related to Diversey have been reclassified to earnings from discontinued operations, net of tax on the Consolidated Statement of Operations. For the years ended December 31, 2017, 2016 and 2015 there was
$3.7 million
,
$3.8 million
and
$3.1 million
reclassified, respectively.
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net foreign exchange transaction (loss) gain
|
|
$
|
(5.9
|
)
|
|
$
|
8.3
|
|
|
$
|
7.3
|
|
Bank fee expense
|
|
(5.8
|
)
|
|
(5.4
|
)
|
|
(5.7
|
)
|
|||
Net (loss) gain on disposals of property and equipment and other
|
|
(0.7
|
)
|
|
(1.4
|
)
|
|
0.1
|
|
|||
Other, net
|
|
(6.1
|
)
|
|
(2.2
|
)
|
|
0.3
|
|
|||
Other (expense) income, net
|
|
$
|
(18.5
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
2.0
|
|
|
|
Year Ended December 31,
|
||||||||||
(In millions, except per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Basic Net Earnings Per Common Share:
|
|
|
|
|
|
|
||||||
Numerator
|
|
|
|
|
|
|
||||||
Net earnings available to common stockholders
|
|
$
|
814.9
|
|
|
$
|
486.4
|
|
|
$
|
335.4
|
|
Distributed and allocated undistributed net earnings to non-vested restricted stockholders
|
|
(4.9
|
)
|
|
(3.4
|
)
|
|
(2.2
|
)
|
|||
Distributed and allocated undistributed net earnings to common stockholders
|
|
810.0
|
|
|
483.0
|
|
|
333.2
|
|
|||
Distributed net earnings - dividends paid to common stockholders
|
|
(118.7
|
)
|
|
(118.7
|
)
|
|
(106.2
|
)
|
|||
Allocation of undistributed net earnings to common stockholders
|
|
$
|
691.3
|
|
|
$
|
364.3
|
|
|
$
|
227.0
|
|
Denominator
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding - basic
|
|
186.9
|
|
|
194.3
|
|
|
203.9
|
|
|||
Basic net earnings per common share:
|
|
|
|
|
|
|
||||||
Distributed net earnings to common stockholders
|
|
$
|
0.64
|
|
|
$
|
0.61
|
|
|
$
|
0.52
|
|
Allocated undistributed net earnings to common stockholders
|
|
3.69
|
|
|
1.88
|
|
|
1.11
|
|
|||
Basic net earnings per common share
|
|
$
|
4.33
|
|
|
$
|
2.49
|
|
|
$
|
1.63
|
|
Diluted Net Earnings Per Common Share:
|
|
|
|
|
|
|
||||||
Numerator
|
|
|
|
|
|
|
||||||
Distributed and allocated undistributed net earnings to common stockholders
|
|
$
|
810.0
|
|
|
$
|
483.0
|
|
|
$
|
333.2
|
|
Add: Allocated undistributed net earnings to unvested restricted stockholders
|
|
4.3
|
|
|
2.6
|
|
|
1.6
|
|
|||
Less: Undistributed net earnings reallocated to non-vested restricted stockholders
|
|
(4.3
|
)
|
|
(2.6
|
)
|
|
(1.6
|
)
|
|||
Net earnings available to common stockholders - diluted
|
|
$
|
810.0
|
|
|
$
|
483.0
|
|
|
$
|
333.2
|
|
Denominator
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding - basic
|
|
186.9
|
|
|
194.3
|
|
|
203.9
|
|
|||
Effect of contingently issuable shares
|
|
0.7
|
|
|
1.2
|
|
|
1.3
|
|
|||
Effect of unvested restricted stock units
|
|
0.7
|
|
|
0.7
|
|
|
0.7
|
|
|||
Weighted average number of common shares outstanding - diluted under two-class
|
|
188.3
|
|
|
196.2
|
|
|
205.9
|
|
|||
Effect of unvested restricted stock - participating security
|
|
0.6
|
|
|
1.0
|
|
|
0.8
|
|
|||
Weighted average number of common shares outstanding - diluted under treasury stock
|
|
188.9
|
|
|
197.2
|
|
|
206.7
|
|
|||
Diluted net earnings per common share
|
|
$
|
4.29
|
|
|
$
|
2.46
|
|
|
$
|
1.62
|
|
|
|
2017
|
||||||||||||||
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
(In millions, except per share amounts)
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
Net sales
|
|
$
|
1,032.2
|
|
|
$
|
1,070.3
|
|
|
$
|
1,131.3
|
|
|
$
|
1,227.8
|
|
Gross profit
|
|
336.4
|
|
|
344.3
|
|
|
362.1
|
|
|
374.4
|
|
||||
Net (loss) earnings from continuing operations
|
|
(53.7
|
)
|
|
29.0
|
|
|
62.5
|
|
|
25.0
|
|
||||
Gain (loss) on sale of discontinued operations, net of taxes
|
|
—
|
|
|
—
|
|
|
699.3
|
|
|
(58.6
|
)
|
||||
Net earnings from discontinued operations, net of tax
(2)
|
|
10.5
|
|
|
75.1
|
|
|
25.7
|
|
|
0.1
|
|
||||
Net (loss) earnings available to common stockholders
(1)
|
|
$
|
(43.2
|
)
|
|
$
|
104.1
|
|
|
$
|
787.5
|
|
|
$
|
(33.5
|
)
|
Basic:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(0.27
|
)
|
|
$
|
0.14
|
|
|
$
|
0.33
|
|
|
$
|
0.14
|
|
Discontinued operations
(2)
|
|
0.05
|
|
|
0.39
|
|
|
3.86
|
|
|
(0.33
|
)
|
||||
Net (loss) earnings per common share - basic
|
|
$
|
(0.22
|
)
|
|
$
|
0.53
|
|
|
$
|
4.19
|
|
|
$
|
(0.19
|
)
|
Diluted:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(0.27
|
)
|
|
$
|
0.14
|
|
|
$
|
0.33
|
|
|
$
|
0.14
|
|
Discontinued operations
(2)
|
|
0.05
|
|
|
0.38
|
|
|
3.82
|
|
|
(0.33
|
)
|
||||
Net (loss) earnings per common share - diluted
|
|
$
|
(0.22
|
)
|
|
$
|
0.52
|
|
|
$
|
4.15
|
|
|
$
|
(0.19
|
)
|
|
|
2016
|
||||||||||||||
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
(In millions, except per share amounts)
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
Net sales
|
|
$
|
1,005.9
|
|
|
$
|
1,038.9
|
|
|
$
|
1,065.1
|
|
|
$
|
1,101.4
|
|
Gross profit
|
|
335.6
|
|
|
349.7
|
|
|
356.7
|
|
|
362.9
|
|
||||
Net earnings from continuing operations
|
|
75.3
|
|
|
2.0
|
|
|
63.7
|
|
|
151.3
|
|
||||
Net earnings from discontinued operations, net of tax
|
|
27.2
|
|
|
47.6
|
|
|
99.5
|
|
|
19.8
|
|
||||
Net earnings available to common stockholders
(1)
|
|
$
|
102.5
|
|
|
$
|
49.6
|
|
|
$
|
163.2
|
|
|
$
|
171.1
|
|
Basic:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.38
|
|
|
$
|
0.01
|
|
|
$
|
0.33
|
|
|
$
|
0.78
|
|
Discontinued operations
|
|
0.14
|
|
|
0.24
|
|
|
0.51
|
|
|
0.10
|
|
||||
Net earnings per common share - basic
|
|
$
|
0.52
|
|
|
$
|
0.25
|
|
|
$
|
0.84
|
|
|
$
|
0.88
|
|
Diluted:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.38
|
|
|
$
|
0.01
|
|
|
$
|
0.32
|
|
|
$
|
0.77
|
|
Discontinued operations
|
|
0.14
|
|
|
0.24
|
|
|
0.51
|
|
|
0.10
|
|
||||
Net earnings per common share - diluted
|
|
$
|
0.52
|
|
|
$
|
0.25
|
|
|
$
|
0.83
|
|
|
$
|
0.87
|
|
|
(1)
|
The sum of the quarterly per share amounts may not agree to the respective annual amounts due to rounding.
|
(2)
|
For the three months ended June 30, 2017, there was a revision to net earnings from discontinued operations, net of tax, on the Consolidated Statement of Operations related to depreciation and amortization on Diversey assets held for sale. As a result, selling, general and administrative expenses decreased
$6.1 million
, amortization expenses of intangible assets acquired decreased
$16.5 million
and income tax provision from discontinued operations increased
$6.2 million
.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13
.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Exhibit
Number
|
|
Description
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5 |
|
|
|
|
|
10.6 |
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10 |
|
|
|
|
|
10.11 |
|
|
|
|
|
10.12 |
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
10.46
|
|
|
|
|
|
10.47
|
|
|
|
|
|
12.1
|
|
|
|
|
|
21
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Description
|
|
Balance at Beginning of Year
|
|
Charged to Costs and Expenses
|
|
Deductions
|
|
|
|
Foreign Currency Translation and Other
|
|
|
|
Balance at End of Year
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
8.4
|
|
|
$
|
0.3
|
|
|
$
|
(2.5
|
)
|
|
(1)
|
|
$
|
0.3
|
|
|
|
|
$
|
6.5
|
|
Inventory obsolescence reserve
|
|
$
|
13.4
|
|
|
$
|
3.5
|
|
|
$
|
(2.7
|
)
|
|
(2)
|
|
$
|
1.3
|
|
|
|
|
$
|
15.5
|
|
Valuation allowance on deferred tax assets
|
|
$
|
167.7
|
|
|
$
|
3.4
|
|
|
$
|
—
|
|
|
|
|
$
|
18.1
|
|
|
|
|
$
|
189.2
|
|
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Allowance for doubtful accounts
|
|
$
|
10.5
|
|
|
$
|
(0.1
|
)
|
|
$
|
(2.1
|
)
|
|
(1)
|
|
$
|
0.1
|
|
|
|
|
$
|
8.4
|
|
Inventory obsolescence reserve
|
|
$
|
12.2
|
|
|
$
|
3.8
|
|
|
$
|
(2.1
|
)
|
|
(2)
|
|
$
|
(0.5
|
)
|
|
|
|
$
|
13.4
|
|
Valuation allowance on deferred tax assets
|
|
$
|
208.9
|
|
|
$
|
(37.4
|
)
|
|
$
|
—
|
|
|
|
|
$
|
(3.8
|
)
|
|
|
|
$
|
167.7
|
|
Year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
|
$
|
12.8
|
|
|
$
|
1.1
|
|
|
$
|
(2.1
|
)
|
|
(1)
|
|
$
|
(1.3
|
)
|
|
|
|
$
|
10.5
|
|
Inventory obsolescence reserve
|
|
$
|
17.9
|
|
|
$
|
—
|
|
|
$
|
(3.8
|
)
|
|
(2)
|
|
$
|
(1.9
|
)
|
|
|
|
$
|
12.2
|
|
Valuation allowance on deferred tax assets
|
|
$
|
164.1
|
|
|
$
|
(51.4
|
)
|
|
$
|
—
|
|
|
|
|
$
|
96.2
|
|
|
(3)
|
|
$
|
208.9
|
|
|
(1)
|
Primarily accounts receivable balances written off, net of recoveries.
|
(2)
|
Primarily items removed from inventory.
|
(3)
|
Includes an in-country foreign impairment not recorded for U.S. GAAP.
|
|
SEALED AIR CORPORATION
(Registrant)
|
|
|
|
|
|
By:
|
/S/ EDWARD L. DOHENY, II
|
|
|
Edward L. Doheny, II
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
By:
|
/S/ EDWARD L. DOHENY, II
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 21, 2018
|
|
Edward L. Doheny, II
|
|
|
|
|
|
|
|
|
|
|
|
/
S
/
WILLIAM G. STIEHL
|
|
Acting Chief Financial Officer,
Chief Accounting Officer and Controller
(Principal Financial Officer and Controller)
|
|
February 21, 2018
|
By:
|
William G. Stiehl
|
|
|
|
|
|
|
|
|
|
|
|
/
S
/
MICHAEL CHU
|
|
Director
|
|
February 21, 2018
|
By:
|
Michael Chu
|
|
|
|
|
|
|
|
|
|
|
By:
|
/
S
/
LAWRENCE R. CODEY
|
|
Director
|
|
February 21, 2018
|
|
Lawrence R. Codey
|
|
|
|
|
|
|
|
|
|
|
By:
|
/
S
/
PATRICK DUFF
|
|
Director
|
|
February 21, 2018
|
|
Patrick Duff
|
|
|
|
|
|
|
|
|
|
|
By:
|
/
S
/
JACQUELINE B. KOSECOFF
|
|
Director
|
|
February 21, 2018
|
|
Jacqueline B. Kosecoff
|
|
|
|
|
|
|
|
|
|
|
By:
|
/
S
/
NEIL LUSTIG
|
|
Director
|
|
February 21, 2018
|
|
Neil Lustig
|
|
|
|
|
|
|
|
|
|
|
By:
|
/S/ HENRY R. KEIZER
|
|
Director
|
|
February 21, 2018
|
|
Henry R. Keizer
|
|
|
|
|
|
|
|
|
|
|
By:
|
/
S
/
WILLIAM J. MARINO
|
|
Director
|
|
February 21, 2018
|
|
William J. Marino
|
|
|
|
|
|
|
|
|
|
|
By:
|
/
S
/
RICHARD L. WAMBOLD
|
|
Director
|
|
February 21, 2018
|
|
Richard L. Wambold
|
|
|
|
|
|
|
|
|
|
|
By:
|
/
S
/
JERRY R. WHITAKER
|
|
Director
|
|
February 21, 2018
|
|
Jerry R. Whitaker
|
|
|
|
(i)
|
for each non-employee director who is designated as chair of the Audit Committee, a fee of Six Thousand Two Hundred Fifty Dollars ($6,250) per calendar quarter for serving as chair, and for each other member of the Audit Committee, a fee of Two Thousand Five Hundred Dollars ($2,500) per calendar quarter for serving as a member;
|
(ii)
|
for each non-employee director who is designated as chair of the Nominating and Corporate Governance Committee, a fee of Three Thousand Seven Hundred Fifty Dollars ($3,750) per calendar quarter for serving as chair, and for each other member of the Nominating and Corporate Governance Committee, a fee of One Thousand Eight Hundred Seventy Five Dollars ($1,875) per calendar quarter for serving as a member;
|
(iii)
|
for each non-employee director who is designated as chair of the Organization and Compensation Committee, a fee of Five Thousand Dollars ($5,000) per calendar quarter for serving as chair, and for each other member of the Organization and Compensation Committee, a fee of Two Thousand Five Hundred Dollars ($2,500) per calendar quarter for serving as a member;
|
(iv)
|
a fee of Two Thousand Dollars ($2,000) per day for special assignments undertaken by a non-employee director at the request of the Board or any committee of the Board or for attending a director education program; and
|
(v)
|
meeting fees as approved by the Board of Directors for non-employee directors who serve on any special committee or for attendance at special meetings of the Board of Directors or a committee of the Board of Directors in the event of a major transaction, etc.
|
(i)
|
Early in the year, the Organization and Compensation Committee (the “Committee”) of the Board of Directors will establish a schedule based on overall Company performance for the year (measured by one or more Company-wide financial, strategic or other goals, with related weightings if more than one goal is selected), with a threshold level of goal attainment below which no pool would be funded and a maximum level of goal attainment at or above which a maximum pool would be funded, in each case subject to subparagraphs (ii), (iii) and (iv) below. The schedule will be reviewed and may be adjusted each year by the Committee.
|
(ii)
|
The Committee will have discretion to fund a portion of the pool if an extraordinary event occurs that adversely affects Company performance (such as a natural disaster causing significant business disruption) and the Committee determines nonetheless that the Company performed well relative to its peers.
|
(iii)
|
If a Company-wide bonus pool is funded for a year per the applicable schedule established in subparagraph (i) above, the Committee may in its discretion, upon consultation with the Chief Executive Officer (“CEO”), adjust the funded pool for the year up or down by up to 25% of the target pool to recognize quality of earnings, performance relative to peers, or other facts.
|
Grant Date:
|
[__________]
|
1.
|
Grant of Units
.
|
2.
|
Restrictions
. Subject to any exceptions set forth in this Agreement, until such time as the Units become earned and vested and are settled in shares of Stock in accordance with Section 1, the Units or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred, or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer, or encumber the Units or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Units will be forfeited by the Grantee and all of the Grantee’s rights to such Units shall immediately terminate without any payment of consideration by the Company.
|
3.
|
Cancellation of Rights
. If any portion of the Units fail to become earned and vested (for example, because the Grantee fails to satisfy the vesting conditions specified in the Notice prior to a Separation from Service), then such Units shall be immediately forfeited as of the date of such failure and all of the Grantee’s rights to such Units shall immediately terminate without any payment of consideration by the Company.
|
4.
|
Responsibility for Taxes
.
|
5.
|
Grantee Representations
. The Grantee hereby represents to the Company that the Grantee has read and fully understands the provisions of this Agreement, the Prospectus, and the Plan, and that the Grantee’s decision to participate in the Plan is completely voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his or her own advisors with respect to the tax consequences of this Award.
|
6.
|
Regulatory Restrictions on the Shares Issued Upon Settlement
. Notwithstanding the other provisions of this Agreement, the Committee shall have the sole discretion to impose such conditions, restrictions, and
|
A1.
|
Data Privacy
.
By accepting this Award, the Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in this document and any other grant materials by and among, as applicable, the Company, the Employer, and any other Affiliate for the exclusive purpose of implementing, administering, and managing the Grantee’s participation in the Plan.
|
A2.
|
Additional Acknowledgements
. By entering into this Agreement and accepting the grant of Units evidenced hereby, the Grantee acknowledges, understands, and agrees that:
|
A3.
|
No Advice Regarding Grant
. The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding the Grantee’s participation in the Plan, acquisition of any shares of Stock under the Plan, or subsequent sale of such shares of Stock. The Grantee should consult with the Grantee’s personal tax, legal, and financial advisors regarding the Grantee’s participation in the Plan before taking any action in relation thereto.
|
A4.
|
Language
. The Grantee acknowledges that he or she is proficient in the English language and understands the content of this Agreement and other Plan-related materials. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version differs from the English version, the English version shall control.
|
A5.
|
Electronic Delivery and Acceptance
. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.
|
A6.
|
Insider-Trading/Market-Abuse Laws
. The Grantee acknowledge that, depending on his or her country, his or her broker’s country, or the country in which the Stock is listed, the Grantee may be subject to insider-trading restrictions and/or market-abuse laws in applicable jurisdictions, which may affect his or her ability to accept, acquire, sell or attempt to sell, or otherwise dispose of the shares of Stock, rights to shares of Stock (
e.g.
, the Units), or rights linked to the value of Stock, during such times as the Grantee is considered to have “inside information” regarding the Company (as defined by the laws and regulations in applicable jurisdictions, including the United States and the Grantee’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Grantee placed before possessing inside information. Furthermore, the Grantee may be prohibited from (i) disclosing insider information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Grantee is responsible for complying with any applicable restrictions, and the Grantee should speak to his or her personal legal advisor regarding this matter.
|
A7.
|
Foreign Asset/Account Reporting Requirements
. The Grantee acknowledges that there may be certain foreign asset and/or account reporting requirements that may affect the Grantee’s ability to acquire or hold shares of Stock acquired under the Plan (or cash received from participating in the Plan) in a brokerage or bank account outside of the Grantee’s country. The Grantee may be required to report such accounts, assets, or transactions to the tax or other authorities in his or her country. The Grantee may also be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to the Grantee’s country through a designated bank or broker within a certain time after receipt. The Grantee acknowledges that it is his or her responsibility to be compliant with such regulations and the Grantee should speak to his or her personal advisor on this matter.
|
Grant Date:
|
[__________]
|
Vesting Date
|
% Vesting
|
[December 31, 20__]
|
100%
|
1.
|
Grant of Units
.
|
2.
|
Restrictions
. Subject to any exceptions set forth in this Agreement, until such time as the Units become earned and vested and are settled in shares of Stock in accordance with Section 1, the Units or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred, or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer, or encumber the Units or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Units will be forfeited by the Grantee and all of the Grantee’s rights to such Units shall immediately terminate without any payment of consideration by the Company.
|
3.
|
Cancellation of Rights
. If any portion of the Units fail to become earned and vested (for example, because the Grantee fails to satisfy the vesting conditions specified in the Notice prior to a Separation from Service), then such Units shall be immediately forfeited as of the date of such failure and all of the Grantee’s rights to such Units shall immediately terminate without any payment of consideration by the Company.
|
4.
|
Responsibility for Taxes
.
|
5.
|
Grantee Representations
. The Grantee hereby represents to the Company that the Grantee has read and fully understands the provisions of this Agreement, the Prospectus, and the Plan, and that the Grantee’s decision to participate in the Plan is completely voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his or her own advisors with respect to the tax consequences of this Award.
|
6.
|
Regulatory Restrictions on the Shares Issued Upon Settlement
. Notwithstanding the other provisions of this Agreement, the Committee shall have the sole discretion to impose such conditions, restrictions and
|
7.
|
Miscellaneous
.
|
A1.
|
Data Privacy
.
By accepting this Award, the Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in this document and any other grant materials by and among, as applicable, the Company, the Employer, and any other Affiliate for the exclusive purpose of implementing, administering, and managing the Grantee’s participation in the Plan.
|
A2.
|
Additional Acknowledgements
. By entering into this Agreement and accepting the grant of Units evidenced hereby, the Grantee acknowledges, understands, and agrees that:
|
A3.
|
No Advice Regarding Grant
. The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding the Grantee’s participation in the Plan, acquisition of any shares of Stock under the Plan, or subsequent sale of such shares of Stock. The Grantee should consult with the Grantee’s personal tax, legal, and financial advisors regarding the Grantee’s participation in the Plan before taking any action in relation thereto.
|
A4.
|
Language
. The Grantee acknowledges that he or she is proficient in the English language and understands the content of this Agreement and other Plan-related materials. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version differs from the English version, the English version shall control.
|
A5.
|
Electronic Delivery and Acceptance
. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.
|
A6.
|
Insider-Trading/Market-Abuse Laws
. The Grantee acknowledge that, depending on his or her country, his or her broker’s country, or the country in which the Stock is listed, the Grantee may be subject to insider-trading restrictions and/or market-abuse laws in applicable jurisdictions, which may affect his or her ability to accept, acquire, sell or attempt to sell, or otherwise dispose of the shares of Stock, rights to shares of Stock (
e.g.
, the Units), or rights linked to the value of Stock, during such times as the Grantee is considered to have “inside information” regarding the Company (as defined by the laws and regulations in applicable jurisdictions, including the United States and the Grantee’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Grantee placed before possessing inside information. Furthermore, the Grantee may be prohibited from (i) disclosing insider information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Grantee is responsible for complying with any applicable restrictions, and the Grantee should speak to his or her personal legal advisor regarding this matter.
|
A7.
|
Foreign Asset/Account Reporting Requirements
. The Grantee acknowledges that there may be certain foreign asset and/or account reporting requirements that may affect the Grantee’s ability to acquire or hold shares of Stock acquired under the Plan (or cash received from participating in the Plan) in a brokerage or bank account outside of the Grantee’s country. The Grantee may be required to report such accounts, assets, or transactions to the tax or other authorities in his or her country. The Grantee may also be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to the Grantee’s country through a designated bank or broker within a certain time after receipt. The Grantee acknowledges
|
Grant Date:
|
[__________]
|
Vesting Date
|
% Vesting
|
Second anniversary of Grant Date
|
100%
|
1.
|
Grant of Units
.
|
2.
|
Restrictions
. Subject to any exceptions set forth in this Agreement, until such time as the Units become earned and vested and are settled in shares of Stock in accordance with Section 1, the Units or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred, or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer, or encumber the Units or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Units will be forfeited by the Grantee and all of the Grantee’s rights to such Units shall immediately terminate without any payment of consideration by the Company.
|
3.
|
Cancellation of Rights
. If any portion of the Units fail to become earned and vested (for example, because the Grantee fails to satisfy the vesting conditions specified in the Notice prior to a Separation from Service), then such Units shall be immediately forfeited as of the date of such failure and all of the Grantee’s rights to such Units shall immediately terminate without any payment of consideration by the Company.
|
4.
|
Responsibility for Taxes
.
|
5.
|
Grantee Representations
. The Grantee hereby represents to the Company that the Grantee has read and fully understands the provisions of this Agreement, the Prospectus, and the Plan, and that the Grantee’s decision to participate in the Plan is completely voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his or her own advisors with respect to the tax consequences of this Award.
|
6.
|
Regulatory Restrictions on the Shares Issued Upon Settlement
. Notwithstanding the other provisions of this Agreement, the Committee shall have the sole discretion to impose such conditions, restrictions, and
|
7.
|
Miscellaneous
.
|
A1.
|
Data Privacy
.
By accepting this Award, the Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in this document and any other grant materials by and among, as applicable, the Company, the Employer, and any other Affiliate for the exclusive purpose of implementing, administering, and managing the Grantee’s participation in the Plan.
|
A2.
|
Additional Acknowledgements
. By entering into this Agreement and accepting the grant of Units evidenced hereby, the Grantee acknowledges, understands, and agrees that:
|
A3.
|
No Advice Regarding Grant
. The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding the Grantee’s participation in the Plan, acquisition of any shares of Stock under the Plan, or subsequent sale of such shares of Stock. The Grantee should consult with the Grantee’s personal tax, legal, and financial advisors regarding the Grantee’s participation in the Plan before taking any action in relation thereto.
|
A4.
|
Language
. The Grantee acknowledges that he or she is proficient in the English language and understands the content of this Agreement and other Plan-related materials. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version differs from the English version, the English version shall control.
|
A5.
|
Electronic Delivery and Acceptance
. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.
|
A6.
|
Insider-Trading/Market-Abuse Laws
. The Grantee acknowledge that, depending on his or her country, his or her broker’s country, or the country in which the Stock is listed, the Grantee may be subject to insider-trading restrictions and/or market-abuse laws in applicable jurisdictions, which may affect his or her ability to accept, acquire, sell or attempt to sell, or otherwise dispose of the shares of Stock, rights to shares of Stock (
e.g.
, the Units), or rights linked to the value of Stock, during such times as the Grantee is considered to have “inside information” regarding the Company (as defined by the laws and regulations in applicable jurisdictions, including the United States and the Grantee’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Grantee placed before possessing inside information. Furthermore, the Grantee may be prohibited from (i) disclosing insider information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Grantee is responsible for complying with any applicable restrictions, and the Grantee should speak to his or her personal legal advisor regarding this matter.
|
A7.
|
Foreign Asset/Account Reporting Requirements
. The Grantee acknowledges that there may be certain foreign asset and/or account reporting requirements that may affect the Grantee’s ability to acquire or hold shares of Stock acquired under the Plan (or cash received from participating in the Plan) in a brokerage or bank account outside of the Grantee’s country. The Grantee may be required to report such accounts, assets, or transactions to the tax or other authorities in his or her country. The Grantee may also be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to the Grantee’s country through a designated bank or broker within a certain time after receipt. The Grantee acknowledges
|
Grant Date:
|
[__________]
|
1.
|
Grant of Shares of Restricted Stock
.
|
2.
|
Ownership Rights
. During the Period of Restriction, the Grantee is entitled to all voting and ownership rights applicable to the Stock, provided that any cash dividends that may be paid on the Restricted Shares will be accrued (without interest) and shall be subject to the same vesting conditions as applicable to the Restricted Shares set forth in the Notice. To the extent the Restricted Shares become vested, any accrued dividends with respect to such Restricted Shares shall be paid in cash on or about the same time as the applicable vesting date for the Restricted Shares.
|
3.
|
Forfeiture and Return of Shares
. With respect to all Restricted Shares that are forfeited, the Grantee shall have no further rights as a stockholder from and after the date of forfeiture. The Grantee agrees that forfeited Restricted Shares shall be deemed canceled and returned to the treasury of the Company and that the Grantee will have no further incidents of ownership, including the right to receive dividends or other distributions with respect to forfeited shares.
|
4.
|
Responsibility for Taxes
.
|
5.
|
Grantee Representations
. The Grantee hereby represents to the Company that the Grantee has read and fully understands the provisions of this Agreement, the Prospectus, and the Plan, and that the Grantee’s decision to participate in the Plan is completely voluntary.
|
6.
|
Regulatory Restrictions on the Shares Issued Upon Settlement
. Notwithstanding the other provisions of this Agreement, the Committee shall have the sole discretion to impose such conditions, restrictions, and limitations on the issuance of shares of Stock with respect to this Award unless and until the Committee
determines that such issuance complies with (i) any applicable registration requirements under the Securities Act (unless the Committee has determined that an exemption therefrom is available), (ii) any applicable listing requirement of any stock exchange on which the Stock is listed, (iii) any applicable Company policy or administrative rules, and (iv) any other applicable provision of state, federal, or foreign law, including foreign securities laws where applicable.
|
7.
|
Nature of Grant
. By entering into this Agreement and accepting the grant of Restricted Shares evidenced hereby, the Grantee acknowledges, understands, and agrees that:
|
8.
|
Miscellaneous
.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings available to covered fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations before income tax provision
|
|
$
|
393.3
|
|
|
$
|
387.9
|
|
|
$
|
291.4
|
|
|
$
|
186.4
|
|
|
$
|
104.1
|
|
Total fixed charges
|
|
215.9
|
|
|
210.4
|
|
|
216.4
|
|
|
279.5
|
|
|
353.0
|
|
|||||
Amortization of capitalized interest
|
|
6.5
|
|
|
6.3
|
|
|
5.9
|
|
|
5.8
|
|
|
5.8
|
|
|||||
Capitalized interest
|
|
(10.3
|
)
|
|
(11.0
|
)
|
|
(5.4
|
)
|
|
(6.2
|
)
|
|
(4.9
|
)
|
|||||
Earnings available to cover fixed charges
|
|
605.4
|
|
|
593.6
|
|
|
508.3
|
|
|
465.5
|
|
|
458.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
201.8
|
|
|
$
|
199.4
|
|
|
$
|
211.0
|
|
|
$
|
273.3
|
|
|
$
|
348.1
|
|
Capitalized interest
|
|
10.3
|
|
|
11.0
|
|
|
5.4
|
|
|
6.2
|
|
|
4.9
|
|
|||||
Interest component of rental expense
(1)
|
|
3.8
|
|
|
9.2
|
|
|
9.6
|
|
|
11.7
|
|
|
12.5
|
|
|||||
Total fixed charges
|
|
$
|
215.9
|
|
|
$
|
210.4
|
|
|
$
|
216.4
|
|
|
$
|
279.5
|
|
|
$
|
353.0
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
2.8x
|
|
|
2.8x
|
|
|
2.3x
|
|
|
1.7x
|
|
|
1.3x
|
|
|
B+ Equipment SAS
|
France
|
Beacon Holdings, LLC
|
Delaware
|
Blue Dot Packaging Pty Ltd.
|
Australia
|
BluPack (New Zealand)
|
New Zealand
|
Cactus Shanghai Trading Co., Ltd.
|
China
|
Ciras C.V.
|
Netherlands
|
Ciras C.V. - Luxembourg Branch
|
Luxembourg
|
CPI Packaging, Inc.
|
Delaware
|
Cryovac Brasil Ltda.
|
Brazil
|
Cryovac Holdings II, LLC
|
Delaware†
|
Cryovac, Inc. †
|
Delaware
|
Cryovac International Holdings Inc.
|
Delaware
|
Cryovac Leasing Corporation
|
Delaware
|
Cryovac (Malaysia) Sdn. Bhd.
|
Malaysia
|
Cryovac Packaging Portugal Embalagens, Ltda
|
Portugal
|
Cryovac-Sealed Air de Costa Rica S.R.L.
|
Costa Rica
|
Cryovac Sweden AB
|
Sweden
|
Deltaplam Embalagens Industria e Comercio Ltda
|
Brazil
|
Diversey J Trustee Limited
|
United Kingdom
|
Diversey Trustee Limited
|
United Kingdom
|
Entapack Pty. Ltd.
|
Australia
|
Fagerdala (Chengdu) Packaging Co., Ltd.
|
China
|
Fagerdala (Chongqing) Packaging Co., Ltd. (Branch)
|
China
|
Fagerdala (Huiyang) Packaging Co., Ltd. (Branch)
|
China
|
Fagerdala Leamchabung Ltd.
|
Thailand
|
Fagerdala Malaysia Sdn Bhd.
|
Malaysia
|
Fagerdala Mexico S.A. de C.V.
|
Mexico
|
Fagerdala Mexico S.A. de C.V. (Chihuahua Branch)
|
Mexico
|
Fagerdala Mexico Supply Chain S.A. de C.V.
|
Mexico
|
Fagerdala Packaging Inc. (Indiana)
|
United States
|
Fagerdala Shanghai Foams Co. Ltd.
|
China
|
Fagerdala (Shanghai) Polymer Co. Ltd.
|
China
|
Fagerdala Singapore Pte. Limited
|
Singapore
|
Fagerdala Singapore Pte. Limited (Taiwan Branch)
|
Republic of China
|
Fagerdala Suzhou Packaging Co. Ltd.
|
China
|
Fagerdala Suzhou Packaging Co. Ltd. (Hefei Branch)
|
China
|
Fagerdala Thailand Ltd.
|
Thailand
|
Fagerdala (Xiamen) Packaging Co. Ltd.
|
China
|
GEIE VES**
|
France
|
Getpacking.com, GmbH
|
Switzerland
|
Invertol S.de R.L. de C.V.
|
Mexico
|
JCS Sealed Air Kaustik
|
Russia
|
Kevothermal, LLC
|
Delaware
|
Kevothermal Limited
|
United Kingdom
|
Pack-Tiger GmbH
|
Switzerland
|
Packaging C.V.
|
Netherlands
|
Sealed Air (India) Limited
|
Delaware
|
Sealed Air International Holdings, LLC
|
Delaware
|
Sealed Air Investment and Management Co., Ltd.
|
China
|
Sealed Air (Israel) Ltd.
|
Israel
|
Sealed Air Japan G.K.
|
Japan
|
Sealed Air (Korea) Limited
|
Korea
|
Sealed Air (Latin America) Holdings II, LLC
|
Delaware
|
Sealed Air Limited
|
Ireland
|
Sealed Air Limited
|
United Kingdom
|
Sealed Air LLC
|
Delaware
|
Sealed Air Luxembourg S.a.r.l.
|
Luxembourg
|
Sealed Air Luxembourg (I) S.a.r.l.
|
Luxembourg
|
Sealed Air Luxembourg (II) S.a.r.l.
|
Luxembourg
|
Sealed Air (Malaysia) Sdn. Bhd.
|
Malaysia
|
Sealed Air Management Holding Verwaltungs GmbH
|
Germany
|
Sealed Air Multiflex GmbH
|
Germany
|
Sealed Air Netherlands (Holdings) I B.V.
|
Netherlands
|
Sealed Air Netherlands (Holdings) II B.V.
|
Germany
|
Sealed Air Netherlands (Holdings) II B.V. - Deutsche Zweigniederlassung
|
Germany
|
Sealed Air Netherlands (Holdings) III B.V.
|
Netherlands
|
Sealed Air Netherlands Holdings V B.V.
|
Netherlands
|
Sealed Air Nevada Holdings Limited
|
Nevada
|
Sealed Air (New Zealand)
|
New Zealand
|
Sealed Air Norge AS
|
Norway
|
Sealed Air OY
|
Finland
|
Sealed Air (China) Co., Ltd.
|
China
|
Sealed Air Packaging LLC
|
Delaware
|
Sealed Air Packaging (India) Private Limited
|
India
|
Sealed Air Packaging Materials (India), LLP
|
India
|
Sealed Air Packaging (Shanghai) Co., Limited
|
China
|
Sealed Air Packaging S.L.U.
|
Spain
|
Sealed Air Packaging (Thailand) Co., Ltd.
|
Thailand
|
Sealed Air Paketleme Malzemeleri Ticaret Limited Sirketi
|
Turkey
|
Sealed Air Peru S.A.C.
|
Peru
|
Sealed Air (Philippines) Inc.
|
Philippines
|
Sealed Air Polska Sp. Zo.o.
|
Poland
|
Sealed Air S.A.S.
|
France
|
Sealed Air (Singapore) Pte. Ltd.
|
Singapore
|
Sealed Air S.r.l.
|
Italy
|
Sealed Air s.r.o.
|
Czech Republic
|
Sealed Air South Africa (Pty.) Ltd.
|
South Africa
|
Sealed Air Svenska AB
|
Sweden
|
Sealed Air Taiwan Limited
|
Taiwan
|
Sealed Air (Thailand) Limited
|
Thailand
|
Sealed Air (Ukraine) Limited
|
Ukraine
|
Sealed Air Uruguay S.A.
|
Uruguay
|
Sealed Air US Holdings (Thailand), LLC
|
Delaware
|
Sealed Air Venezuela Corporation
|
Delaware
|
Sealed Air Verpackungen GmbH
|
Germany
|
Shanklin Corporation
|
Delaware
|
Soinpar Industrial Ltda.
|
Brazil
|
TART s.r.o.**
|
Czech Republic
|
TempTrip LLC
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 333-196508) of Sealed Air Corporation,
|
(2)
|
Registration Statement (Form S-8 No. 333-176275) of Sealed Air Corporation,
|
(3)
|
Registration Statement (Form S-8 No. 333-176267) of Sealed Air Corporation,
|
(4)
|
Registration Statement (Form S-8 No. 333-152909) of Sealed Air Corporation,
|
(5)
|
Registration Statement (Form S-8 No. 333-126890) of Sealed Air Corporation,
|
(6)
|
Registration Statement (Form S-8 No. 333- 89090) of Sealed Air Corporation, and
|
(7)
|
Registration Statement (Form S-3 No. 333-195059) of Sealed Air Corporation;
|
/s/ Ernst & Young LLP
|
|
Charlotte, North Carolina
|
February 21, 2018
|
/S/ EDWARD L. DOHENY, II
|
Edward L. Doheny, II
|
President and Chief Executive Officer
|
/S/ WILLIAM G. STIEHL
|
William G. Stiehl
|
Acting Chief Financial Officer,
Chief Accounting Officer and Controller
|
(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
|
|
|
|
Name: Edward L. Doheny, II
|
|
|
|
Title
: President and Chief Executive Officer
|
|
|
|
|
Date: February 21, 2018
|
|
|
|
|
|
|
|
By:
|
|
|
/s/ WILLIAM G. STIEHL
|
|
|
|
Name: William G. Stiehl
|
|
|
|
Title:
Acting Chief Financial Officer,
Chief Accounting Officer and Controller
|
|
|
|
|
Date: February 21, 2018
|
|
|
|