Cover Page - SEALED AIR CORPORATION filed a Form 10-Q for the quarterly period ended June 30, 20252 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 - 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 disclosures789 Cautionary Notice Regarding Forward-Looking Statements - The report contains forward-looking statements involving known and unknown risks that could cause actual results to differ materially10 - Key risk factors include global economic conditions, inflation, raw material pricing, and regulatory actions11 PART I. FINANCIAL INFORMATION Financial Statements The statements present the company's financial position, performance, and cash flows for the reported periods Condensed Consolidated Balance Sheets 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 receivables13 - 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 adjustments13 Condensed Consolidated Statements of Operations 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 periods15 - 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 periods15 Condensed Consolidated Statements of Comprehensive Income 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 adjustments18 Condensed Consolidated Statements of Stockholders' Equity 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 loss23 - 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, respectively23 Condensed Consolidated Statements of Cash Flows 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 202426 - Net cash used in investing activities decreased by $17.8 million, primarily due to lower capital expenditures26 Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations for figures in the financial statements, covering key accounting policies and activities Note 1 Organization and Basis of Presentation - Sealed Air Corporation is a global provider of packaging solutions, including CRYOVAC, SEALED AIR, LIQUIBOX, AUTOBAG, and BUBBLE WRAP brands2829 - The financial statements are unaudited, with Argentina designated as a highly inflationary economy since July 1, 2018, impacting 'Other expense, net'3135 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 - The FASB issued ASU 2024-03 (Expense Disaggregation Disclosures) effective after December 15, 2026, requiring disaggregation of income statement expenses36 - ASU 2023-09 (Improvements to Income Tax Disclosures) was issued, effective after December 15, 2024, requiring enhanced income tax disclosures37 Note 3 Revenue Recognition, Contracts with Customers - The Company's revenue is generated from two reportable segments, Food and Protective, through sales of packaging materials, equipment, and services383942 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, 202447 Note 4 Leases - Sealed Air acts as both a lessor (providing automation and equipment solutions) and a lessee (for warehouses, offices, and manufacturing facilities)5053 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 - The Company operates in two reportable segments: Food (packaging for industrial food processors) and Protective (packaging for various industries)565758 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 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, 202568 Note 7 Property and Equipment, net 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, 202570 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 - Goodwill is reviewed for impairment annually in the fourth quarter, with no significant impairment indicators present as of June 30, 20257274 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 - The Company maintains U.S. and European accounts receivable securitization programs, treated as secured borrowings7781 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 year84 Note 10 Accounts Receivable Factoring Agreements - The Company sells certain trade receivables to third-party financial institutions under factoring agreements qualifying for true-sale treatment86 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 - The Company facilitates a voluntary supply chain financing program for its suppliers88 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 - The Board approved a 3-year 'CTO2Grow Program' in August 2023, with an estimated total cash cost of $160 million89 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 months93 Note 13 Debt and Credit Facilities 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, 202595 - 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 million98100 - 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, 2025101263 Note 14 Derivatives and Hedging Activities - The Company uses derivative instruments to manage exposure to foreign currency and interest rates, not for trading purposes103104 - Cross-currency swaps with a combined notional amount of $432.8 million (2023) and $452.2 million (2025) are designated as net investment hedges112 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 - Fair value measurements are categorized into Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)121122124125 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 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 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 positions140142 - 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 rules143144 Note 18 Commitments and Contingencies - The Company is involved in a legal dispute with Water.IO Ltd concerning a breach of contract, with Water.IO seeking approximately $8 million145 - The Company accrues for anticipated costs associated with environmental laws, including PFAS claims, and believes current accruals are adequate146147 - The Company has various guarantees and indemnification obligations, primarily related to the sale of businesses and product warranties148149150 Note 19 Stockholders' Equity - 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 period152153 - Quarterly cash dividends of $0.20 per common share were declared and paid in March and June 2025154155 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 - The 2022-2024 PSU awards paid out at 75% of target (40,752 units) in February 2025167 Note 20 Accumulated Other Comprehensive Loss 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 adjustments168 Note 21 Other Expense, net 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 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 Management provides its perspective on financial condition, operational results, market trends, and liquidity Recent Events and Trends - Food segment sales were slightly favorable in H1 2025 from pricing, while Protective segment sales declined due to lower volumes173 - The Company expects slightly lower full-year volumes due to economic uncertainties but anticipates offsets from favorable foreign exchange and pricing173 Non-GAAP Information - The Company uses non-GAAP measures like Adjusted EBITDA, Adjusted EPS, and Free Cash Flow to assess core performance174 - These non-GAAP measures exclude 'Special Items' like restructuring charges to provide a clearer view of core business performance175 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 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 - 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 2025195 - The most significant currencies impacting translation are the euro, Australian dollar, Mexican peso, and Canadian dollar194 Net Sales by Segment 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 pricing198199200 - Protective segment net sales decreased by 6% on a constant currency basis for H1 2025, due to lower volume and unfavorable pricing201207 Cost of Sales 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 expense203 - For H1 2025, cost of sales decreased by $48 million (3%), with a favorable foreign currency translation impact of $15 million204 Gross Profit 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 realization209210 - Protective segment gross profit decreased on a constant currency basis due to unfavorable net price realization and lower volume211212 Selling, General and Administrative Expenses 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 Program214215216 Amortization Expense of Intangible Assets 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 software217218 CTO2Grow Program - The CTO2Grow Program aims for $160 million in full annualized savings by the end of 2025220 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 2025223224 Interest Expense, net 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, 2025227 Other Expense, net - Other expense, net, was $(11.3) million for Q2 2025 and $(10.8) million for H1 2025170 - During Q2 2025, the Company recognized $7 million in other income from a lease termination fee229 - A pre-tax loss on debt redemption of $5 million was recognized for the three and six months ended June 30, 2025232 Income Taxes 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 positions234238 - Net decreases in unrecognized tax positions were $40 million for H1 2025, compared to an increase of $7 million in the prior year238 Net Earnings from Continuing Operations 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 Items242243 - Net earnings for H1 2025 were unfavorably impacted by $40 million of Special Items, but partially offset by $21 million in Tax Special Items242243 Adjusted EBITDA by Segment 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 realization248249 - Protective segment Adjusted EBITDA decreased on a constant currency basis due to unfavorable net price realization and lower volume250251252 - Corporate Adjusted EBITDA increased due to income from a lease termination fee, partially offset by foreign currency losses253254 Liquidity and Capital Resources - Primary liquidity sources include trade receivable collections, existing lines of credit, and capital markets access255 - As of June 30, 2025, cash and cash equivalents totaled $354 million, with 88% ($313 million) located outside the U.S.256257 - Total outstanding borrowings under accounts receivable securitization programs were $143 million at June 30, 2025258 - The Company had a $1.0 billion revolving credit facility, with $829 million available at June 30, 2025262 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 receivables279284 - Stockholders' equity increased by $329 million (53%) due to net earnings and cumulative translation adjustment gains280 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the Company's exposure to market risks and strategies used to manage these exposures Interest Rates - The Company uses derivatives to manage interest rate fluctuations but had no outstanding instruments at June 30, 2025289 - A hypothetical 10% increase in interest rates would decrease the fair value of total debt by $69 million at June 30, 2025290 Foreign Exchange Rates - The Company is exposed to foreign currency exchange rate changes, which can materially impact financial results291 - Argentina, a highly inflationary economy, resulted in remeasurement losses of $6 million for H1 2025292 - Russia's ruble fluctuations also expose the Company to foreign currency risks; Russia contributed approximately 1% of consolidated net sales for H1 2025294 - Cross-currency swaps with notional amounts of $433 million (2023) and $452 million (2025) are designated as net investment hedges298 - Outstanding debt is generally denominated in the functional currency of the borrower subsidiary301 Customer Credit - The Company is exposed to customer credit risk and maintains an allowance for credit losses on trade receivables303 Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and reports no material changes in internal control Disclosure Controls and Procedures - The Company maintains disclosure controls and procedures to ensure timely and accurate reporting under the Exchange Act304 Evaluation of Disclosure Controls and Procedures - Management concluded that disclosure controls and procedures were effective at the 'reasonable assurance' level as of June 30, 2025305 Changes in Internal Control over Financial Reporting - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025306 PART II. OTHER INFORMATION Item 1. Legal Proceedings 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 report307 Item 1A. Risk Factors 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-K308 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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 Plan309 - No shares were repurchased during the quarter ended June 30, 2025, under the $1.0 billion share repurchase program, which had $537 million remaining310311 Item 5. Other Information 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, 2025312 Item 6. Exhibits 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 documents313 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 Controller315
Sealed Air(SEE) - 2025 Q2 - Quarterly Report