Sealed Air (NYSE:SEE) on Tuesday was upgraded to Overweight from a previous investment rating of Neutral by analysts at J.P. Morgan. “We upgrade Sealed Air to Overweight. Sealed Air is a good free cash flow generator selling at a reasonable trading ...

Accessibility StatementSkip Navigation The landmark installation at longtime customer Cargill underscores proven performance and innovation CHARLOTTE, N.C., Sept. 9, 2025 /PRNewswire/ -- Sealed Air Corporation's (NYSE: SEE) CRYOVAC® brand food packaging reached a major milestone with the installation of its 4,000 rotary vacuum chamber system. The new machine was installed for longtime CRYOVAC® customer Cargill, a global leader in agriculture and food, reinforcing CRYOVAC®'s longstanding commitment to strong ...

Company Overview - Sealed Air (SEE) is a manufacturer specializing in food and protective packaging, as well as a supplier of packaging equipment. The company aims to automate and enhance the efficiency of its customers [1] Investment Focus - The investment strategy emphasizes companies that provide healthy dividends while also having potential for capital appreciation. The focus is on identifying undervalued businesses relative to their fundamentals, peers, and historical performance [2] Analyst Position - The analyst has a beneficial long position in Sealed Air shares, indicating a personal investment interest in the company [3]

Core Insights - Sealed Air reported a significant earnings beat for Q2 2025, with adjusted earnings per share (non-GAAP) at $0.89, surpassing analyst expectations of $0.71 [1][2] - GAAP revenue reached $1.33 billion, slightly exceeding forecasts but showing a decline of less than 1% compared to Q2 2024 [1][2] - Management reaffirmed full-year 2025 guidance, indicating caution due to ongoing volume pressures [1][12] Financial Performance - Adjusted EPS increased by 7.2% year-over-year from $0.83 in Q2 2024 [2] - Adjusted EBITDA was reported at $293 million, up 2.8% from $285 million in Q2 2024 [2] - Free cash flow (non-GAAP) for the first six months was $81 million, a decline of 60.9% from $207 million in the previous year [2][8] Business Overview - Sealed Air specializes in protective and food packaging products, operating in two segments: Food and Protective [3] - The company emphasizes sustainable packaging, automation, and operational efficiency as part of its strategic focus [4] Segment Performance - The Food segment reported GAAP net sales of $896 million, essentially flat year-over-year, with a 1% decline in volume offset by pricing actions [6] - The Protective segment experienced a 3% decrease in sales, driven by lower volume and price declines [7] - Adjusted EBITDA margin in the Food segment improved to 23.4%, while the Protective segment's margin dropped to 17.8% [6][7] Strategic Initiatives - The CTO2Grow program aims for substantial annual savings and has contributed to improved operating leverage and lower interest expenses [5][11] - The company holds over 2,400 patents and 2,200 trademarks, reinforcing its commitment to packaging innovation [10] Sustainability and Future Outlook - Sustainability remains a key focus, with efforts directed towards recyclable and renewable materials, although no measurable progress was reported in the quarter [11] - Management's guidance for full-year 2025 includes net sales between $5.1 billion and $5.5 billion, adjusted EBITDA between $1,075 million and $1,175 million, and adjusted EPS between $2.90 and $3.30 [12]

[Cover Page](index=1&type=section&id=Cover%20Page) - SEALED AIR CORPORATION filed a Form 10-Q for the quarterly period ended June 30, 2025[2](index=2&type=chunk) **Company Information** | Indicator | Value | | :--- | :--- | | Commission File Number | 1-12139 | | State of Incorporation | Delaware | | IRS Employer ID | 65-0654331 | | Registrant's Telephone Number | (980) 221-3235 | | Common Stock Trading Symbol | SEE | | Exchange Registered | New York Stock Exchange | | Large Accelerated Filer | Yes | | Shares Outstanding (July 31, 2025) | 147,094,899 | [Table of Contents](index=2&type=section&id=Table%20of%20Contents) - The Table of Contents outlines the structure of the Form 10-Q, including Part I Financial Information and Part II Other Information, with detailed listings of financial statements, notes, and other required disclosures[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [Cautionary Notice Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Notice%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements involving known and unknown risks that could cause actual results to differ materially[10](index=10&type=chunk) - Key risk factors include global economic conditions, inflation, raw material pricing, and regulatory actions[11](index=11&type=chunk) [PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Financial%20statements) The statements present the company's financial position, performance, and cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheets (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,028.6 | $1,891.8 | | Total Assets | $7,247.4 | $7,022.1 | | Total Current Liabilities | $1,699.4 | $1,635.5 | | Total Liabilities | $6,294.3 | $6,397.6 | | Total Stockholders' Equity | $953.1 | $624.5 | - **Total assets increased by $225.3 million (3.2%)** from December 31, 2024, to June 30, 2025, primarily driven by increases in inventories and trade receivables[13](index=13&type=chunk) - **Total stockholders' equity increased by $328.6 million (52.6%)** from December 31, 2024, to June 30, 2025, mainly due to net earnings and foreign currency translation adjustments[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) **Condensed Consolidated Statements of Operations (USD millions, except per share data)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1,335.0 | $1,345.1 | $2,607.5 | $2,674.7 | | Gross Profit | $406.2 | $416.0 | $797.9 | $816.8 | | Operating Profit | $198.3 | $205.6 | $381.7 | $390.6 | | Net Earnings | $93.1 | $98.3 | $206.6 | $180.3 | | Diluted EPS | $0.63 | $0.67 | $1.40 | $1.24 | - **Net sales decreased by 0.8%** for the three months and **2.5% for the six months** ended June 30, 2025, compared to the prior year periods[15](index=15&type=chunk) - **Net earnings decreased by 5.3%** for the three months but **increased by 14.6% for the six months** ended June 30, 2025, compared to the prior year periods[15](index=15&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) **Condensed Consolidated Statements of Comprehensive Income (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Earnings | $93.1 | $98.3 | $206.6 | $180.3 | | Other Comprehensive Income (Loss) | $84.7 | $(25.2) | $142.5 | $(54.9) | | Comprehensive Income, net of taxes | $177.8 | $73.1 | $349.1 | $125.4 | - **Comprehensive income significantly increased** for both the three and six months ended June 30, 2025, primarily due to favorable foreign currency translation adjustments[18](index=18&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) **Condensed Consolidated Statements of Stockholders' Equity (USD millions)** | Item | Balance at Dec 31, 2024 | Balance at Jun 30, 2025 | | :--- | :--- | :--- | | Common Stock | $15.5 | $15.5 | | Additional Paid-in Capital | $1,445.7 | $1,447.2 | | Retained Earnings | $643.4 | $790.4 | | Common Stock in Treasury | $(404.2) | $(366.6) | | Accumulated Other Comprehensive Loss | $(1,075.9) | $(933.4) | | Total Stockholders' Equity | $624.5 | $953.1 | - **Total stockholders' equity increased by $328.6 million** from December 31, 2024, to June 30, 2025, driven by net earnings and a reduction in accumulated other comprehensive loss[23](index=23&type=chunk) - Dividends on common stock were **$0.20 per share** for both the three and six months ended June 30, 2025, totaling $29.8 million and $59.6 million, respectively[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows (USD millions)** | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net earnings | $206.6 | $180.3 | | Net cash provided by operating activities | $168.5 | $313.3 | | Net cash used in investing activities | $(80.1) | $(97.9) | | Net cash used in financing activities | $(158.4) | $(155.7) | | Effect of foreign currency exchange rate changes on cash | $52.6 | $(17.2) | | Net change during the period | $(17.4) | $42.5 | | Cash and cash equivalents, end of period | $354.4 | $388.6 | - **Net cash provided by operating activities decreased by $144.8 million** for the six months ended June 30, 2025, compared to the same period in 2024[26](index=26&type=chunk) - **Net cash used in investing activities decreased by $17.8 million**, primarily due to lower capital expenditures[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations for figures in the financial statements, covering key accounting policies and activities [Note 1 Organization and Basis of Presentation](index=9&type=section&id=Note%201%20Organization%20and%20Basis%20of%20Presentation) - Sealed Air Corporation is a global provider of packaging solutions, including CRYOVAC, SEALED AIR, LIQUIBOX, AUTOBAG, and BUBBLE WRAP brands[28](index=28&type=chunk)[29](index=29&type=chunk) - The financial statements are unaudited, with Argentina designated as a highly inflationary economy since July 1, 2018, impacting 'Other expense, net'[31](index=31&type=chunk)[35](index=35&type=chunk) **Remeasurement Losses due to Highly Inflationary Economy (Argentina, USD millions)** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $4.4 | $0.6 | | Six Months Ended June 30 | $6.1 | $5.5 | [Note 2 Recently Issued Accounting Standards](index=10&type=section&id=Note%202%20Recently%20Issued%20Accounting%20Standards) - The FASB issued ASU 2024-03 (Expense Disaggregation Disclosures) effective after December 15, 2026, requiring disaggregation of income statement expenses[36](index=36&type=chunk) - ASU 2023-09 (Improvements to Income Tax Disclosures) was issued, effective after December 15, 2024, requiring enhanced income tax disclosures[37](index=37&type=chunk) [Note 3 Revenue Recognition, Contracts with Customers](index=10&type=section&id=Note%203%20Revenue%20Recognition,%20Contracts%20with%20Customers) - The Company's revenue is generated from two reportable segments, Food and Protective, through sales of packaging materials, equipment, and services[38](index=38&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk) **Disaggregated Revenue by Segment and Geographic Region (USD millions)** | Segment/Region | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Food** | | | | | | Americas | $584.6 | $594.7 | $1,153.5 | $1,173.3 | | EMEA | $190.9 | $176.7 | $362.0 | $349.4 | | APAC | $111.7 | $111.8 | $218.5 | $222.7 | | **Protective** | | | | | | Americas | $272.1 | $288.7 | $533.8 | $585.0 | | EMEA | $97.3 | $96.2 | $191.9 | $195.7 | | APAC | $68.5 | $65.3 | $131.4 | $128.8 | | **Total Net Sales** | $1,335.0 | $1,345.1 | $2,607.5 | $2,674.7 | - Contract liabilities (unearned revenue) related to equipment accruals were **$17.0 million** at June 30, 2025, down from $18.8 million at December 31, 2024[47](index=47&type=chunk) [Note 4 Leases](index=12&type=section&id=Note%204%20Leases) - Sealed Air acts as both a lessor (providing automation and equipment solutions) and a lessee (for warehouses, offices, and manufacturing facilities)[50](index=50&type=chunk)[53](index=53&type=chunk) **Lease Receivables (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short-Term (12 months or less) | $10.9 | $9.3 | | Long-Term | $45.2 | $42.2 | | Total Lease Receivables | $56.1 | $51.5 | **Total Lease Liabilities (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Portion of Finance Leases | $(7.4) | $(6.6) | | Current Portion of Operating Lease Liabilities | $(31.3) | $(29.7) | | Long-Term Finance Leases | $(10.6) | $(12.9) | | Long-Term Operating Lease Liabilities | $(68.8) | $(74.8) | | Total Lease Liabilities | $(118.1) | $(124.0) | [Note 5 Segments](index=14&type=section&id=Note%205%20Segments) - The Company operates in two reportable segments: Food (packaging for industrial food processors) and Protective (packaging for various industries)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) **Net Sales by Reportable Segment (USD millions)** | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Food | $896.1 | $893.8 | $1,748.2 | $1,762.2 | | Protective | $438.9 | $451.3 | $859.3 | $912.5 | | Consolidated Net Sales | $1,335.0 | $1,345.1 | $2,607.5 | $2,674.7 | **Segment Gross Profit (USD millions)** | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Food | $279.7 | $278.6 | $547.8 | $538.1 | | Protective | $128.2 | $137.5 | $252.3 | $278.8 | | Total | $407.9 | $416.1 | $800.1 | $816.9 | [Note 6 Inventories, net](index=18&type=section&id=Note%206%20Inventories,%20net) **Inventories, net (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $167.8 | $157.1 | | Work in process | $188.1 | $155.4 | | Finished goods | $468.6 | $409.7 | | Total | $824.5 | $722.2 | - **Total inventories, net, increased by $102.3 million (14.2%)** from December 31, 2024, to June 30, 2025[68](index=68&type=chunk) [Note 7 Property and Equipment, net](index=18&type=section&id=Note%207%20Property%20and%20Equipment,%20net) **Property and Equipment, net (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property and equipment, gross | $4,296.3 | $4,075.4 | | Accumulated depreciation and amortization | $(2,849.7) | $(2,677.5) | | Property and equipment, net | $1,446.6 | $1,397.9 | - **Net property and equipment increased by $48.7 million (3.5%)** from December 31, 2024, to June 30, 2025[70](index=70&type=chunk) **Depreciation and Amortization Expense (USD millions)** | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Depreciation and amortization expense | $44.5 | $44.4 | $88.6 | $89.2 | [Note 8 Goodwill and Identifiable Intangible Assets, net](index=19&type=section&id=Note%208%20Goodwill%20and%20Identifiable%20Intangible%20Assets,%20net) - Goodwill is reviewed for impairment annually in the fourth quarter, with **no significant impairment indicators** present as of June 30, 2025[72](index=72&type=chunk)[74](index=74&type=chunk) **Goodwill by Reportable Segment (USD millions)** | Segment | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Food | $1,229.0 | $1,239.1 | | Protective | $1,649.5 | $1,663.4 | | Total Goodwill | $2,878.5 | $2,902.5 | **Identifiable Intangible Assets, net (USD millions)** | Item | June 30, 2025 (Net) | December 31, 2024 (Net) | | :--- | :--- | :--- | | Total intangible assets with definite lives | $348.9 | $372.7 | | Trademarks and tradenames with indefinite lives | $8.9 | $8.9 | | Total identifiable intangible assets, net | $357.8 | $381.6 | [Note 9 Accounts Receivable Securitization Programs](index=20&type=section&id=Note%209%20Accounts%20Receivable%20Securitization%20Programs) - The Company maintains U.S. and European accounts receivable securitization programs, treated as secured borrowings[77](index=77&type=chunk)[81](index=81&type=chunk) **Accounts Receivable Securitization Programs (USD millions)** | Program | June 30, 2025 (Borrowings) | December 31, 2024 (Borrowings) | | :--- | :--- | :--- | | U.S. Program | $50.0 | $50.0 | | European Program | $92.5 | $83.0 | | Total Outstanding Borrowings | $142.5 | $133.0 | - The total interest paid for these programs was **$3.2 million** for the six months ended June 30, 2025, down from $3.6 million in the prior year[84](index=84&type=chunk) [Note 10 Accounts Receivable Factoring Agreements](index=21&type=section&id=Note%2010%20Accounts%20Receivable%20Factoring%20Agreements) - The Company sells certain trade receivables to third-party financial institutions under factoring agreements qualifying for true-sale treatment[86](index=86&type=chunk) **Accounts Receivable Factoring Agreements (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross amounts factored (6 months) | N/A | N/A | $327.5 | $358.4 | | Fees associated with transfer | $2.3 | $3.0 | $4.4 | $6.0 | [Note 11 Supply Chain Financing Program](index=21&type=section&id=Note%2011%20Supply%20Chain%20Financing%20Program) - The Company facilitates a voluntary supply chain financing program for its suppliers[88](index=88&type=chunk) **Supply Chain Financing Program (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accounts payable balances included | $153.0 | $161.1 | [Note 12 Restructuring Activities](index=22&type=section&id=Note%2012%20Restructuring%20Activities) - The Board approved a 3-year 'CTO2Grow Program' in August 2023, with an estimated total cash cost of **$160 million**[89](index=89&type=chunk) **Restructuring Charges (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Restructuring charges (headcount) | $2.8 | $2.5 | $5.4 | $18.0 | | Other associated costs | $5.4 | $6.4 | $11.2 | $13.1 | | Contract terminations | $3.0 | $0.0 | $3.0 | $(0.1) | | Total charges | $12.2 | $8.9 | $21.2 | $31.1 | - The restructuring accrual at June 30, 2025, was **$26.3 million**, with $25.9 million expected to be paid within the next twelve months[93](index=93&type=chunk) [Note 13 Debt and Credit Facilities](index=23&type=section&id=Note%2013%20Debt%20and%20Credit%20Facilities) **Total Debt Outstanding (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short-term borrowings | $317.6 | $140.5 | | Current portion of long-term debt | $42.1 | $64.6 | | Total current debt | $359.7 | $205.1 | | Long-term debt, less current portion | $3,982.4 | $4,198.8 | | Total debt | $4,342.1 | $4,403.9 | - **Total debt decreased by $61.8 million** from December 31, 2024, to June 30, 2025[95](index=95&type=chunk) - The Company issued **$400.0 million of 6.500% senior notes due 2032** in June 2024, using proceeds to repurchase outstanding notes, resulting in a pre-tax loss of $6.8 million[98](index=98&type=chunk)[100](index=100&type=chunk) - The Company was in compliance with all financial covenants, with an **actual leverage ratio of 3.11 to 1.00** versus a maximum of 4.50 to 1.00 at June 30, 2025[101](index=101&type=chunk)[263](index=263&type=chunk) [Note 14 Derivatives and Hedging Activities](index=24&type=section&id=Note%2014%20Derivatives%20and%20Hedging%20Activities) - The Company uses derivative instruments to manage exposure to foreign currency and interest rates, not for trading purposes[103](index=103&type=chunk)[104](index=104&type=chunk) - Cross-currency swaps with a combined notional amount of **$432.8 million (2023) and $452.2 million (2025)** are designated as net investment hedges[112](index=112&type=chunk) **Fair Value of Derivative Instruments (USD millions)** | Item | June 30, 2025 (Assets) | June 30, 2025 (Liabilities) | December 31, 2024 (Assets) | December 31, 2024 (Liabilities) | | :--- | :--- | :--- | :--- | :--- | | Foreign currency forward contracts | $23.3 | $(3.0) | $6.0 | $(6.6) | | Cross-currency swaps | $0.0 | $(57.7) | $3.2 | $0.0 | | Total Net Derivatives | $(37.4) | $(37.4) | $2.6 | $2.6 | [Note 15 Fair Value Measurements, Equity Investments and Other Financial Instruments](index=28&type=section&id=Note%2015%20Fair%20Value%20Measurements,%20Equity%20Investments%20and%20Other%20Financial%20Instruments) - Fair value measurements are categorized into Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[121](index=121&type=chunk)[122](index=122&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) **Fair Value of Financial Instruments (USD millions)** | Item | June 30, 2025 (Total Fair Value) | December 31, 2024 (Total Fair Value) | | :--- | :--- | :--- | | Cash equivalents | $35.9 | $56.3 | | Derivative financial and hedging instruments net asset (liability) | $(37.4) | $2.6 | **Carrying Amounts and Estimated Fair Values of Debt (USD millions)** | Debt Type | June 30, 2025 (Carrying Amount) | June 30, 2025 (Fair Value) | December 31, 2024 (Carrying Amount) | December 31, 2024 (Fair Value) | | :--- | :--- | :--- | :--- | :--- | | Term Loan A due March 2027 | $486.2 | $486.2 | $743.2 | $743.2 | | Senior Secured Notes due October 2026 | $598.6 | $576.0 | $598.1 | $564.5 | | Senior Notes due December 2027 | $423.4 | $414.4 | $423.1 | $405.5 | | Senior Notes due February 2028 | $768.2 | $785.3 | $767.0 | $777.4 | | Senior Notes due April 2029 | $422.6 | $419.9 | $422.3 | $408.5 | | Senior Notes due February 2031 | $421.6 | $447.1 | $421.3 | $439.1 | | Senior Notes due July 2032 | $396.4 | $414.1 | $396.2 | $401.7 | | Senior Notes due July 2033 | $447.1 | $484.3 | $446.9 | $468.2 | | Other foreign borrowings | $133.1 | $133.1 | $109.9 | $109.8 | | Other domestic borrowings | $227.0 | $227.2 | $56.4 | $56.4 | | Total debt | $4,324.2 | $4,387.6 | $4,384.4 | $4,374.3 | [Note 16 Defined Benefit Pension Plans and Other Post-Employment Benefit Plans](index=30&type=section&id=Note%2016%20Defined%20Benefit%20Pension%20Plans%20and%20Other%20Post-Employment%20Benefit%20Plans) **Net Periodic Benefit Cost for Defined Benefit Pension Plans (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Service cost | $0.9 | $1.0 | $1.7 | $1.9 | | Interest cost | $6.3 | $6.9 | $12.6 | $13.6 | | Expected return on plan assets | $(7.7) | $(7.5) | $(15.2) | $(15.0) | | Amortization of net actuarial loss | $1.2 | $1.4 | $2.5 | $2.8 | | Total benefit cost | $0.7 | $1.8 | $1.6 | $3.4 | **Net Periodic Benefit Cost for Other Post-Employment Benefit Plans (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Interest cost | $0.4 | $0.3 | $0.7 | $0.7 | | Amortization of net prior service credit and net actuarial gain | $(0.1) | $(0.2) | $(0.3) | $(0.3) | | Net periodic benefit cost | $0.3 | $0.1 | $0.4 | $0.4 | [Note 17 Income Taxes](index=31&type=section&id=Note%2017%20Income%20Taxes) **Effective Income Tax Rate** | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | 28.3% | 27.8% | | Six Months Ended | 18.3% | 28.8% | - The six-month effective tax rate for 2025 was favorably impacted by the **reversal of accruals for uncertain tax positions**[140](index=140&type=chunk)[142](index=142&type=chunk) - The Company is evaluating the impact of the recently signed One Big Beautiful Bill Act (OBBB) and the OECD's Pillar Two global minimum tax rules[143](index=143&type=chunk)[144](index=144&type=chunk) [Note 18 Commitments and Contingencies](index=32&type=section&id=Note%2018%20Commitments%20and%20Contingencies) - The Company is involved in a legal dispute with Water.IO Ltd concerning a breach of contract, with Water.IO seeking approximately **$8 million**[145](index=145&type=chunk) - The Company accrues for anticipated costs associated with environmental laws, including PFAS claims, and believes current accruals are adequate[146](index=146&type=chunk)[147](index=147&type=chunk) - The Company has various guarantees and indemnification obligations, primarily related to the sale of businesses and product warranties[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Note 19 Stockholders' Equity](index=33&type=section&id=Note%2019%20Stockholders'%20Equity) - A **$1.0 billion share repurchase program** was approved in August 2021, with **$536.5 million remaining** as of June 30, 2025, and no shares repurchased during the period[152](index=152&type=chunk)[153](index=153&type=chunk) - Quarterly cash dividends of **$0.20 per common share** were declared and paid in March and June 2025[154](index=154&type=chunk)[155](index=155&type=chunk) **Total Share-Based Incentive Compensation Expense (USD millions)** | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total expense | $10.7 | $7.2 | $22.6 | $15.9 | - 2025 three-year PSU awards were granted with performance goals based on **Adjusted EPS Growth (50%)** and **Return on Invested Capital (50%)**[164](index=164&type=chunk) - The 2022-2024 PSU awards paid out at **75% of target** (40,752 units) in February 2025[167](index=167&type=chunk) [Note 20 Accumulated Other Comprehensive Loss](index=36&type=section&id=Note%2020%20Accumulated%20Other%20Comprehensive%20Loss) **Accumulated Other Comprehensive Loss (AOCL), Net of Taxes (USD millions)** | Item | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Balance | $(1,075.9) | $(933.4) | | Net current period other comprehensive income (loss) | N/A | $142.5 | - AOCL decreased by **$142.5 million** from December 31, 2024, to June 30, 2025, primarily due to a **$190.7 million gain from foreign currency translation adjustments**[168](index=168&type=chunk) [Note 21 Other Expense, net](index=37&type=section&id=Note%2021%20Other%20Expense,%20net) **Other Expense, net (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net foreign exchange transaction (loss) gain | $(0.8) | $2.2 | $(0.2) | $3.4 | | Foreign currency exchange loss due to highly inflationary economies | $(4.3) | $(0.6) | $(6.0) | $(5.5) | | Loss on debt redemption and refinancing activities | $(5.1) | $(6.8) | $(5.1) | $(6.8) | | Other income | $9.6 | $2.5 | $12.2 | $9.1 | | Other expense, net | $(11.3) | $(6.8) | $(10.8) | $(7.6) | [Note 22 Net Earnings Per Common Share](index=37&type=section&id=Note%2022%20Net%20Earnings%20Per%20Common%20Share) **Net Earnings Per Common Share (USD, except shares in millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings available to common stockholders | $93.1 | $98.3 | $206.6 | $180.3 | | Weighted average common shares outstanding - basic | 147.1 | 145.7 | 146.7 | 145.3 | | Basic net earnings per common share | $0.63 | $0.67 | $1.41 | $1.24 | | Diluted net earnings per common share | $0.63 | $0.67 | $1.40 | $1.24 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides its perspective on financial condition, operational results, market trends, and liquidity [Recent Events and Trends](index=38&type=section&id=Recent%20Events%20and%20Trends) - Food segment sales were slightly favorable in H1 2025 from pricing, while Protective segment sales declined due to lower volumes[173](index=173&type=chunk) - The Company expects slightly lower full-year volumes due to economic uncertainties but anticipates offsets from favorable foreign exchange and pricing[173](index=173&type=chunk) [Non-GAAP Information](index=38&type=section&id=Non-GAAP%20Information) - The Company uses non-GAAP measures like Adjusted EBITDA, Adjusted EPS, and Free Cash Flow to assess core performance[174](index=174&type=chunk) - These non-GAAP measures exclude 'Special Items' like restructuring charges to provide a clearer view of core business performance[175](index=175&type=chunk) **Non-GAAP Consolidated Adjusted EBITDA from Continuing Operations (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings from continuing operations | $94.2 | $97.8 | $211.1 | $181.2 | | Pre-tax impact of Special Items | $43.1 | $26.6 | $76.8 | $59.8 | | Non-GAAP Consolidated Adjusted EBITDA | $292.5 | $285.5 | $568.8 | $563.8 | **Non-GAAP Adjusted Net Earnings and Adjusted Diluted EPS from Continuing Operations (USD millions, except per share data)** | Item | 3 Months Ended June 30, 2025 (Net Earnings) | 3 Months Ended June 30, 2025 (Diluted EPS) | 3 Months Ended June 30, 2024 (Net Earnings) | 3 Months Ended June 30, 2024 (Diluted EPS) | | :--- | :--- | :--- | :--- | :--- | | GAAP Net earnings and diluted EPS | $94.2 | $0.64 | $97.8 | $0.67 | | Special Items | $37.7 | $0.26 | $22.9 | $0.16 | | Non-GAAP Adjusted net earnings and diluted EPS | $131.9 | $0.89 | $120.7 | $0.83 | **Non-GAAP Adjusted Income Tax Rate** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Effective income tax rate | 28.3% | 27.8% | 18.3% | 28.8% | | Non-GAAP Adjusted income tax rate | 24.4% | 25.5% | 25.0% | 25.7% | [Highlights of Financial Performance](index=42&type=section&id=Highlights%20of%20Financial%20Performance) **Financial Performance Highlights (USD millions, except per share amounts)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $1,335.0 | $1,345.1 | (0.8)% | $2,607.5 | $2,674.7 | (2.5)% | | Gross profit | $406.2 | $416.0 | (2.4)% | $797.9 | $816.8 | (2.3)% | | Operating profit | $198.3 | $205.6 | (3.6)% | $381.7 | $390.6 | (2.3)% | | Net earnings from continuing operations | $94.2 | $97.8 | (3.7)% | $211.1 | $181.2 | 16.5% | | Diluted EPS from continuing operations | $0.64 | $0.67 | (4.5)% | $1.43 | $1.24 | 15.3% | | Non-GAAP Consolidated Adjusted EBITDA | $292.5 | $285.5 | 2.5% | $568.8 | $563.8 | 0.9% | | Non-GAAP Adjusted EPS | $0.89 | $0.83 | 7.2% | $1.71 | $1.60 | 6.9% | [Foreign Currency Translation Impact on Condensed Consolidated Financial Results](index=43&type=section&id=Foreign%20Currency%20Translation%20Impact%20on%20Condensed%20Consolidated%20Financial%20Results) - Foreign currency translation had a **favorable impact of $6.9 million** on net sales for Q2 2025 but an **unfavorable impact of $23.0 million** for H1 2025[195](index=195&type=chunk) - The most significant currencies impacting translation are the euro, Australian dollar, Mexican peso, and Canadian dollar[194](index=194&type=chunk) [Net Sales by Segment](index=44&type=section&id=Net%20Sales%20by%20Segment) **Net Sales by Reportable Segment (USD millions)** | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Food | $896.1 | $893.8 | $1,748.2 | $1,762.2 | | Protective | $438.9 | $451.3 | $859.3 | $912.5 | | Total Company | $1,335.0 | $1,345.1 | $2,607.5 | $2,674.7 | - **Food segment net sales increased by less than 1%** on a constant currency basis for H1 2025, driven by favorable pricing[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - **Protective segment net sales decreased by 6%** on a constant currency basis for H1 2025, due to lower volume and unfavorable pricing[201](index=201&type=chunk)[207](index=207&type=chunk) [Cost of Sales](index=45&type=section&id=Cost%20of%20Sales) **Cost of Sales (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cost of sales | $928.8 | $929.1 | 0% | $1,809.6 | $1,857.9 | (2.6)% | | As a % of net sales | 69.6% | 69.1% | | 69.4% | 69.5% | | - **Cost of sales as a percentage of net sales increased by 50 basis points** for Q2 2025, partly due to higher inventory obsolescence expense[203](index=203&type=chunk) - For H1 2025, cost of sales decreased by **$48 million (3%)**, with a favorable foreign currency translation impact of $15 million[204](index=204&type=chunk) [Gross Profit](index=45&type=section&id=Gross%20Profit) **Segment Gross Profit (USD millions)** | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Food | $279.7 | $278.6 | 0.4% | $547.8 | $538.1 | 1.8% | | Protective | $128.2 | $137.5 | (6.8)% | $252.3 | $278.8 | (9.5)% | | Consolidated Gross Profit | $406.2 | $416.0 | (2.4)% | $797.9 | $816.8 | (2.3)% | - **Food segment gross profit increased** on a constant currency basis due to lower operating costs and favorable net price realization[209](index=209&type=chunk)[210](index=210&type=chunk) - **Protective segment gross profit decreased** on a constant currency basis due to unfavorable net price realization and lower volume[211](index=211&type=chunk)[212](index=212&type=chunk) [Selling, General and Administrative Expenses](index=46&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) **Selling, General and Administrative Expenses (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | SG&A expenses | $184.2 | $190.3 | (3.2)% | $370.8 | $376.7 | (1.6)% | | As a % of net sales | 13.8% | 14.1% | | 14.2% | 14.1% | | - **SG&A expenses decreased** on a constant currency basis due to cost reductions and productivity benefits from the CTO2Grow Program[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) [Amortization Expense of Intangible Assets](index=47&type=section&id=Amortization%20Expense%20of%20Intangible%20Assets) **Amortization Expense of Intangible Assets (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Amortization expense | $14.9 | $16.3 | (8.6)% | $30.1 | $31.1 | (3.2)% | - The decrease in amortization expense was **$1 million** for both the three and six months ended June 30, 2025, due to lower amortization of capitalized software[217](index=217&type=chunk)[218](index=218&type=chunk) [CTO2Grow Program](index=47&type=section&id=CTO2Grow%20Program) - The CTO2Grow Program aims for **$160 million in full annualized savings** by the end of 2025[220](index=220&type=chunk) **CTO2Grow Program Expenses (USD millions)** | Item | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :--- | :--- | :--- | | Restructuring charges (headcount) | $3 | $5 | | Other associated costs | $5 | $11 | | Contract terminations | $3 | $3 | | Non-cash expense | $1 | $2 | - For H1 2025, the program generated **$33 million in incremental cost benefits**, with an expected **$65 million for the full year 2025**[223](index=223&type=chunk)[224](index=224&type=chunk) [Interest Expense, net](index=48&type=section&id=Interest%20Expense,%20net) **Interest Expense, net (USD millions)** | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Interest expense on debt instruments | $61.1 | $67.2 | $(6.1) | $120.2 | $135.7 | $(15.5) | | Less: capitalized interest | $(2.6) | $(2.7) | $0.1 | $(5.5) | $(6.0) | $0.5 | | Less: interest income | $(11.2) | $(9.7) | $(1.5) | $(21.9) | $(18.5) | $(3.4) | | Total | $55.7 | $63.3 | $(7.6) | $112.5 | $128.4 | $(15.9) | - **Net interest expense decreased by $7.6 million** for the three months and **$15.9 million for the six months** ended June 30, 2025[227](index=227&type=chunk) [Other Expense, net](index=48&type=section&id=Other%20Expense,%20net) - Other expense, net, was **$(11.3) million** for Q2 2025 and **$(10.8) million** for H1 2025[170](index=170&type=chunk) - During Q2 2025, the Company recognized **$7 million in other income** from a lease termination fee[229](index=229&type=chunk) - A pre-tax loss on debt redemption of **$5 million** was recognized for the three and six months ended June 30, 2025[232](index=232&type=chunk) [Income Taxes](index=49&type=section&id=Income%20Taxes) **Effective Income Tax Rate** | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | 28% | 28% | | Six Months Ended | 18% | 29% | - The six-month effective tax rate for 2025 was favorably impacted by the **reversal of accruals for uncertain tax positions**[234](index=234&type=chunk)[238](index=238&type=chunk) - Net decreases in unrecognized tax positions were **$40 million** for H1 2025, compared to an increase of $7 million in the prior year[238](index=238&type=chunk) [Net Earnings from Continuing Operations](index=49&type=section&id=Net%20Earnings%20from%20Continuing%20Operations) **Net Earnings from Continuing Operations (USD millions)** | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net earnings | $94.2 | $97.8 | (3.7)% | $211.1 | $181.2 | 16.5% | - Net earnings for Q2 2025 were unfavorably impacted by **$38 million of Special Items**[242](index=242&type=chunk)[243](index=243&type=chunk) - Net earnings for H1 2025 were unfavorably impacted by **$40 million of Special Items**, but partially offset by **$21 million in Tax Special Items**[242](index=242&type=chunk)[243](index=243&type=chunk) [Adjusted EBITDA by Segment](index=51&type=section&id=Adjusted%20EBITDA%20by%20Segment) **Segment Adjusted EBITDA (USD millions)** | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Food | $209.9 | $204.6 | 2.6% | $412.6 | $394.2 | 4.7% | | Protective | $78.0 | $81.8 | (4.6)% | $151.9 | $171.3 | (11.3)% | | Corporate | $4.6 | $(0.9) | | $4.3 | $(1.7) | | | Non-GAAP Consolidated Adjusted EBITDA | $292.5 | $285.5 | 2.5% | $568.8 | $563.8 | 0.9% | - **Food segment Adjusted EBITDA increased** on a constant currency basis due to lower operating costs and favorable net price realization[248](index=248&type=chunk)[249](index=249&type=chunk) - **Protective segment Adjusted EBITDA decreased** on a constant currency basis due to unfavorable net price realization and lower volume[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - **Corporate Adjusted EBITDA increased** due to income from a lease termination fee, partially offset by foreign currency losses[253](index=253&type=chunk)[254](index=254&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources include trade receivable collections, existing lines of credit, and capital markets access[255](index=255&type=chunk) - As of June 30, 2025, cash and cash equivalents totaled **$354 million**, with **88% ($313 million) located outside the U.S.**[256](index=256&type=chunk)[257](index=257&type=chunk) - Total outstanding borrowings under accounts receivable securitization programs were **$143 million** at June 30, 2025[258](index=258&type=chunk) - The Company had a **$1.0 billion revolving credit facility**, with **$829 million available** at June 30, 2025[262](index=262&type=chunk) **Non-GAAP Net Debt (USD millions)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt | $4,342.1 | $4,403.9 | | Less: Cash and cash equivalents | $(354.4) | $(371.8) | | Non-GAAP net debt | $3,987.7 | $4,032.1 | **Non-GAAP Free Cash Flow (USD millions)** | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash flow provided by operating activities | $168.5 | $313.3 | $(144.8) | | Capital expenditures | $(87.3) | $(105.8) | $18.5 | | Non-GAAP free cash flow | $81.2 | $207.5 | $(126.3) | - **Working capital increased by $72.9 million (28%)** due to higher inventories and trade receivables[279](index=279&type=chunk)[284](index=284&type=chunk) - **Stockholders' equity increased by $329 million (53%)** due to net earnings and cumulative translation adjustment gains[280](index=280&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to market risks and strategies used to manage these exposures [Interest Rates](index=57&type=section&id=Interest%20Rates) - The Company uses derivatives to manage interest rate fluctuations but had no outstanding instruments at June 30, 2025[289](index=289&type=chunk) - A hypothetical **10% increase in interest rates** would decrease the fair value of total debt by **$69 million** at June 30, 2025[290](index=290&type=chunk) [Foreign Exchange Rates](index=57&type=section&id=Foreign%20Exchange%20Rates) - The Company is exposed to foreign currency exchange rate changes, which can materially impact financial results[291](index=291&type=chunk) - Argentina, a highly inflationary economy, resulted in remeasurement losses of **$6 million** for H1 2025[292](index=292&type=chunk) - Russia's ruble fluctuations also expose the Company to foreign currency risks; Russia contributed approximately **1% of consolidated net sales** for H1 2025[294](index=294&type=chunk) - Cross-currency swaps with notional amounts of **$433 million (2023) and $452 million (2025)** are designated as net investment hedges[298](index=298&type=chunk) - Outstanding debt is generally denominated in the functional currency of the borrower subsidiary[301](index=301&type=chunk) [Customer Credit](index=60&type=section&id=Customer%20Credit) - The Company is exposed to customer credit risk and maintains an allowance for credit losses on trade receivables[303](index=303&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and reports no material changes in internal control [Disclosure Controls and Procedures](index=61&type=section&id=Disclosure%20Controls%20and%20Procedures) - The Company maintains disclosure controls and procedures to ensure timely and accurate reporting under the Exchange Act[304](index=304&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=61&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that disclosure controls and procedures were **effective at the 'reasonable assurance' level** as of June 30, 2025[305](index=305&type=chunk) [Changes in Internal Control over Financial Reporting](index=61&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were **no material changes** in internal control over financial reporting during the quarter ended June 30, 2025[306](index=306&type=chunk) [PART II. OTHER INFORMATION](index=62&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed discussion of legal proceedings provided in Note 18 of the financial statements - Legal proceedings information is incorporated by reference from Note 18, 'Commitments and Contingencies,' in Part I, Item 1 of this report[307](index=307&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) This section indicates no significant changes to the Company's risk factors since the last Annual Report - **No significant changes** to risk factors have occurred since December 31, 2024, as detailed in the 2024 Form 10-K[308](index=308&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on profit sharing contributions and the share repurchase program - In March 2025, **824,393 shares of common stock** were transferred from treasury to the 401(K) and Profit Sharing Plan[309](index=309&type=chunk) - **No shares were repurchased** during the quarter ended June 30, 2025, under the $1.0 billion share repurchase program, which had **$537 million remaining**[310](index=310&type=chunk)[311](index=311&type=chunk) [Item 5. Other Information](index=62&type=section&id=Item%205.%20Other%20Information) This section states no director or officer modified a Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted, modified, or terminated a 'Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[312](index=312&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational and XBRL-related documents - Exhibits include the Company's Certificate of Incorporation, By-Laws, offer letters, certifications, and Inline XBRL documents[313](index=313&type=chunk) [Signature](index=64&type=section&id=Signature) This section contains the signature of the authorized officer confirming the filing of the report - The report was signed on August 5, 2025, by Veronika Johnson, Interim Chief Financial Officer, Chief Accounting Officer, and Controller[315](index=315&type=chunk)

Core Insights - Sealed Air Corporation (SEE) reported adjusted earnings per share of 89 cents for Q2 2025, exceeding the Zacks Consensus Estimate of 72 cents, reflecting a 7% year-over-year improvement due to better operating leverage and business optimization [1][8] - Total sales for the quarter were $1.335 billion, surpassing the Zacks Consensus Estimate of $1.318 billion, but down 0.7% year over year, with pricing positively impacting sales by 0.5% and volumes declining by 1.8% [2][8] - Adjusted EBITDA for the quarter was approximately $276.93 million, a 3% increase from the previous year, driven by lower operating costs and productivity benefits, resulting in an adjusted EBITDA margin of 21.9% [4][8] Financial Performance - The cost of sales remained flat at $929 million, while gross profit decreased by 2% to $406 million, leading to a gross margin contraction of 50 basis points to 30.4% [3] - Selling, General and Administrative (SG&A) expenses were reduced to $184 million, down 3.2% from $190 million in the prior year [3] - The Food segment reported net sales of $896 million, a slight increase of 0.3% year over year, while the Protective segment saw a decline in net sales to $439 million, down 2.7% [5][6] Segment Analysis - In the Food segment, adjusted EBITDA rose by 2.6% to around $210 million, supported by lower operating costs, while the Protective segment's adjusted EBITDA fell by 5% to $78 million due to unfavorable net price realization [6][9] - Currency fluctuations had a favorable impact of 1% on sales, while pricing negatively affected sales by 2% and volumes fell by 2% due to prior-year customer churn [7][8] Cash Flow and Balance Sheet - Cash flow from operating activities was approximately $168.5 million in the first half of 2025, a decrease from $313 million in the same period last year [10] - As of June 30, 2025, total debt stood at $4.34 billion, with $1.2 billion in available liquidity, including $354 million in cash and $830 million in undrawn credit facilities [11] Guidance and Market Performance - Sealed Air expects net sales for 2025 to be between $5.1 billion and $5.5 billion, indicating a potential 2% decline from 2024 sales of $5.39 billion [12] - Adjusted EBITDA is projected to be between $1.075 billion and $1.175 billion, with adjusted earnings per share forecasted at $2.90 to $3.30, compared to $3.14 in 2024 [12] - Over the past year, Sealed Air's shares have decreased by 16.8%, compared to an 11.2% decline in the industry [13]

Financial Data and Key Metrics Changes - Net sales for the second quarter were $1,340 million, down 1% on a constant currency basis [27] - Adjusted EBITDA was $293 million, up 3% on a constant currency basis [27] - Adjusted earnings per share increased to $0.89, up 7% as reported and 10% on a constant currency basis [28] - Adjusted tax rate improved to 24.4% from 25.5% in the same period last year [28] Business Line Data and Key Metrics Changes - Food segment net sales were $896 million, flat as favorable pricing offset softer volumes [30] - Protective segment net sales were $439 million, down 3% as reported and 4% in constant currency [33] - Food adjusted EBITDA was $210 million, up 3%, with a margin of 23.4%, up 50 basis points [32] - Protective adjusted EBITDA was $78 million, down 5%, with a margin of 17.8%, up 20 basis points from the first quarter [33] Market Data and Key Metrics Changes - The U.S. beef cycle saw a decline of 7% in slaughter rates, impacting the food segment [22] - EMEA region for food showed strength with volumes up low single digits [32] - North American market pressures accelerated in the second quarter, affecting food service and industrial processing [19] Company Strategy and Development Direction - The company is focused on transforming its Protective segment and improving customer engagement [12][14] - New product innovations include the Jiffy embossed paper mailer and hybrid auto vac solutions [15] - The company is optimizing its manufacturing footprint and has opened a new facility in Lakeland, Florida [16] Management's Comments on Operating Environment and Future Outlook - Management noted a stable second quarter despite global trade uncertainties and tariff impacts [10][11] - The company remains cautious about the second half of the year due to market uncertainties and lower growth expectations [17] - Management expressed confidence in the ongoing transformation and capital allocation discipline, with net debt below $4 billion for the first time since 2022 [25][26] Other Important Information - The company is maintaining its sales guidance range of $5.1 billion to $5.5 billion and adjusted EBITDA guidance of $1.075 billion to $1.175 billion [36] - Free cash flow guidance remains at $400 million, with capital expenditures expected to be lower than originally anticipated [38] Q&A Session All Questions and Answers Question: What does the volume impact for the second half look like for food? - Management expects a volume mix in the second half to be down three points in Q3 and Q4, primarily due to consumer spending shifts [46] Question: How should we think about near-term outlook for margins specific to food? - Management indicated that while there is a margin impact from volume loss, network optimization efforts are expected to balance out margins [55] Question: Can you talk about specific cost takeouts expected for the second half? - Management highlighted a focus on cost takeout initiatives, aiming for approximately $90 million in savings for the full year [60] Question: Are you seeing any slowdown in bidding and order activity? - Management reported no significant change in order patterns and remains optimistic about the performance of the industrial portfolio [71] Question: Why is the adjusted EBITDA range for 2025 so wide? - Management attributed the wide range to conservatism and low visibility regarding end markets, preferring to wait for more clarity in Q3 [78] Question: Can you describe your issue with procuring specialty resins? - Management clarified that there are no procurement issues but noted challenges related to tariffs impacting certain specialty resins [80]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were $1.34 billion, down 1% on a constant currency basis [24] - Adjusted EBITDA for the quarter was $293 million, up 3% on a constant currency basis [24] - Adjusted earnings per share increased to $0.89, up 7% as reported and 10% on a constant currency basis [25] - Adjusted EBITDA margin was 22%, up 70 basis points [27] Business Line Data and Key Metrics Changes - Food segment net sales were $896 million, flat as favorable pricing offset softer volumes [28] - Protective segment net sales were $439 million, down 3% as reported and 4% in constant currency [31] - Food adjusted EBITDA was $210 million, up 3%, with a margin of 23.4%, up 50 basis points [30] - Protective adjusted EBITDA was $78 million, down 5%, with a margin of 17.8%, up 20 basis points from the first quarter [31] Market Data and Key Metrics Changes - The U.S. beef cycle saw a decline of 7%, impacting the overall protein markets [20] - EMEA and Asia regions for the food business showed strength with volumes up low single digits [30] - The North American market faced pressures, particularly in the food service sector, leading to a shift in consumer spending [18] Company Strategy and Development Direction - The company is focused on transforming its Protective segment and improving customer engagement [12] - A new Chief Financial Officer, Kristin Actis Grande, is expected to drive transformation and shareholder value [6][7] - The company is optimizing its manufacturing footprint and has opened a new facility in Lakeland, Florida [15] - The strategy includes simplifying the organization and moving closer to the markets served [23] Management's Comments on Operating Environment and Future Outlook - Management noted a stable second quarter despite global trade uncertainties and tariff impacts [9] - The company remains cautious about the second half of the year due to market uncertainties and lower growth expectations [15][23] - The outlook for the food business is impacted by shifting consumer spending patterns, particularly towards value grocery [18] Other Important Information - The company generated $81 million in free cash flow in the first half of 2025 [32] - The net leverage ratio was 3.6 times, with a goal to reduce it to approximately 3.0 times by 2026 [32] - The company is maintaining its sales guidance range of $5.1 billion to $5.5 billion for the year [34] Q&A Session Summary Question: Impact of beef headwinds on volume expectations - Management indicated that the cattle cycle is expected to impact volumes, with a forecast of down 3% to 4% for 2025 and flat in 2027 [41][43] Question: Near-term outlook for food margins - Management expressed confidence in maintaining margins despite headwinds, citing ongoing productivity improvements [51][52] Question: Specific cost savings and guidance maintenance - Management highlighted ongoing cost takeout initiatives and network optimization efforts to bolster earnings [57][58] Question: Order activity and market dynamics - Management reported no significant changes in order patterns and remains optimistic about internal initiatives driving growth [66][68] Question: Full year EBITDA range and conservatism - Management clarified that the wide EBITDA range reflects conservatism due to market volatility and uncertainty [74] Question: Specialty resins procurement challenges - Management noted that while procurement is not an issue, tariff impacts have affected certain specialty resins [76][78] Question: Cattle cycle in South America and Australia - Management indicated strong performance in both regions, with expectations for continued strength [94][95]

Q2 2025 Financial Performance - Net sales were $13 billion, down 1% as reported and constant currency [12] - Adjusted EBITDA reached $293 million, up 2% as reported and 3% on a constant currency basis [12] - Adjusted EPS increased to $089, up 7% as reported and 10% in constant currency [12] - Adjusted EBITDA margin increased by 70 bps to 219%, driven by productivity savings, but offset by unfavorable net price realization and lower volumes [16] Segment Performance - Food Protective segment: Organic sales were flat, with adjusted EBITDA up 3% to $210 million and margin up 50 bps to 234% [17] - Protective segment: Organic sales decreased by 4%, with adjusted EBITDA down 5% to $78 million and margin down 30 bps to 178% [17] H1 2025 Financials - Net sales decreased by 3% to $2607 billion as reported, with a 2% organic decline due to lower volumes [37, 35] - Adjusted EBITDA increased by 1% to $569 million as reported, and 3% on a constant currency basis [37, 36] - Free cash flow was $81 million, lower than the $207 million in H1 2024, due to higher incentive compensation and timing of tax payments [22, 44] Capital Allocation and Outlook - The company is targeting a net debt to adjusted EBITDA ratio of approximately 30x by 2026 [21, 28] - The company maintains its 2025 outlook with net sales between $51 billion and $55 billion, adjusted EBITDA between $1075 billion and $1175 billion, and adjusted EPS between $290 and $330 [24]

Group 1: Earnings Performance - Sealed Air reported quarterly earnings of $0.89 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, and up from $0.83 per share a year ago, representing an earnings surprise of +23.61% [1] - The company has surpassed consensus EPS estimates for the last four quarters, with revenues of $1.34 billion for the quarter ended June 2025, which also exceeded the Zacks Consensus Estimate by 1.26% [2] Group 2: Stock Performance and Outlook - Sealed Air shares have declined approximately 14.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Group 3: Estimate Revisions and Industry Context - The trend of estimate revisions for Sealed Air was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is $0.75 on revenues of $1.33 billion, and for the current fiscal year, it is $3.07 on revenues of $5.29 billion [7] - The Containers - Paper and Packaging industry, to which Sealed Air belongs, is currently ranked in the bottom 28% of Zacks industries, suggesting potential challenges for stock performance [8]