Sealed Air releases combined financial statements for Sealed Air and Diversey, reports US$123M net earnings for 2010, US$126M for first nine months of 2011

Sandy Yang

ELMWOOD PARK, New Jersey , December 19, 2011 (press release) – Sealed Air Corporation (NYSE: SEE) today filed a Current Report on Form 8-K/A (the “8-K/A”, “filing”) with the U.S. Securities and Exchange Commission (SEC) which provides the pro forma combined financial statements for Sealed Air and Diversey for 2010 and the first nine months of 2011. We encourage you to review the detailed information provided in the Form 8-K/A, which is available on the SEC’s website at http://www.sec.gov and on our investor relations website at http://ir.sealedair.com.

This press release contains unaudited pro forma information and additional Non-U.S. GAAP information, which is provided for informational and illustrative purposes and is preliminary based on currently available information, which we believe is reasonable, but may be subject to change and differ materially from these statements. This pro forma information does not purport to project the future consolidated financial condition or results of operations for the combined company.

Financial Statements and Exhibits of Note

The following pro forma net earnings per share (EPS) and pro forma Adjusted EPS discussion references a revised pro forma Adjusted EPS calculation which excludes the combined company’s amortization of intangibles, non-cash interest expense, non-cash taxes and special items. We believe this revised Adjusted EPS definition helps management and investors better understand and evaluate the operating results and trends of the business. We believe that this metric, combined with other U.S. GAAP and non-U.S. GAAP metrics such as EBITDA, Adjusted EBITDA and Free Cash Flow will also aid in the comparison of our operating results with peers. For reporting consistency, we have elected to use our current free cash flow metric to convey cash financial results.

Earnings Per Share (EPS) and Adjusted Earnings Per Share (Adjusted EPS)

Our preliminary pro forma 2010 financial information includes an EPS of $0.59, or an Adjusted EPS of $1.77 per common share. The pro forma 2010 Adjusted EPS excludes $1.18 per common share relating to the amortization of intangible assets, non-cash interest expense, non-cash taxes and special items such as restructuring. (Please refer to the schedules included in this release for our reconciliation of U.S. GAAP to non-U.S. GAAP financial metrics.)

The pro forma financial statements also present EPS of $0.60 for the first nine months of 2011, or an Adjusted EPS of $1.25 per common share, which excludes approximately $0.65 per common share relating to similar items noted above.

The pro forma EPS results in both periods include the interest expense associated with the incremental debt incurred to finance the acquisition. The EPS impact of the new financings for the acquisition is estimated to have had a $1.12 per share impact for pro forma 2010 and a $0.84 per share impact for pro forma first nine months of 2011. Management is focused on realizing growth in EPS results and shareholder value by achieving growth plans, synergy targets, accelerated debt reduction and lower effective tax rates.

Net Earnings and Adjusted EBITDA

The preliminary pro forma 2010 financial statements present net earnings of $123 million. The preliminary pro forma 2010 Adjusted EBITDA would be $1,122 million or 14.8% of net sales, as compared to our initial Adjusted EBITDA estimate of $1,185 million or 15.6% of net sales provided June 8, 2011, primarily reflecting the harmonization to Sealed Air accounting policies. (Pro forma Adjusted EBITDA figures exclude synergies.) The variance of approximately $65 million is primarily due to a $36 million reclassification of Diversey customer equipment depreciation to align with Sealed Air accounting policies, $17 million of expense in SG&A relating to the issuance of cash-settled stock appreciation rights (“SARs”) for select Diversey employees in connection with the acquisition, and approximately $10 million of net adjustments to Diversey’s Credit Agreement EBITDA calculation (as defined in their public filings), which we would consider normal operating expenses and not applicable in the pro forma calculation of Adjusted EBITDA. The previous estimate for pro forma Adjusted EBITDA was based upon Diversey’s calculation of Credit Agreement EBITDA, which was utilized as a covenant measure, and Sealed Air’s Adjusted EBITDA metric, which is used as an operational performance measure.

The preliminary pro forma net earnings for the first nine months of 2011 is $126 million. Pro forma Adjusted EBITDA for the first nine months of 2011 is $820 million or 13.5% of net sales. (Please refer to the schedules included in this release for our reconciliation of U.S. GAAP to non-U.S. GAAP financial metrics.)

Depreciation and Amortization (D&A) and Purchase Accounting Adjustments

The preliminary pro forma financial statements present 2010 D&A of $339 million, which includes purchase accounting adjustments associated with the amortization of acquired intangible assets of $134 million, or $0.55 per share. The pro forma first nine months of 2011 D&A is reported as $246 million, which includes purchase accounting adjustments associated with the amortization of acquired intangible assets of $100 million, or $0.41 per share. Our preliminary 2012 estimate for D&A is $365 to $375 million.

Marketing Administrative and Development Expenses (SG&A)

The preliminary pro forma financial statements present expenses in SG&A relating to cash-settled stock appreciation rights (“SARs”) issued to select Diversey employees in connection with the acquisition of $17 million for 2010 and $11 million for the first nine months of 2011. Since the SARs replacement awards are settled in cash, future SARs related expense may fluctuate primarily on changes in the assumptions used to value the SAR’s which include our stock price, risk-free interest rates, participants’ forfeiture rates and dividend yields. As a result, the SARs may have an unfavorable impact on our Adjusted EBITDA, EPS and Adjusted EPS results.

Tax Rates

The filing presents pro forma effective income tax rates, which we believe are not indicative of future rates. Additionally, we have provided our preliminary 2012 core tax rate estimate of 30%, which excludes the tax impact of special items such as restructuring and integration costs. At this time, we are not able to estimate our 2012 effective income tax rate including such items. We expect to achieve lower effective income tax rates over time due to U.S. debt reduction, planning, and the benefits of the European principal company structure (as described in Diversey’s public filings), which we expect to launch in May 2012.

Business

Sealed Air is the new global leader in food safety and security, facility hygiene and product protection. With widely recognized and inventive brands such as Bubble Wrap® brand cushioning, Cryovac® brand food packaging solutions and Diversey® brand cleaning and hygiene solutions, Sealed Air offers efficient and sustainable solutions that create business value for customers, enhance the quality of life for consumers and provide a cleaner and healthier environment for future generations. On a pro forma basis, Sealed Air generated revenue of $7.6 billion in 2010 and has approximately 26,000 employees who serve customers in 175 countries. To learn more, visit http://www.sealedair.com.

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