Good day, ladies and gentlemen, and welcome to the Q4 2015 Sealed Air Earnings Conference Call. My name is Mark and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Lori Chaitman, Vice President Investor Relations. Please proceed ma'am.

Thank you and good morning, everyone. Before we begin our call today, I would like to note that we have provided a slide presentation to help guide our discussion. This presentation can be found on today's webcast and can be downloaded from our IR website at sealedair.com. I would like to remind you that statements made during this call stating management's outlook or predictions for the future are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the information in the section entitled Forward-Looking Statements in our earnings release, which applies to this call. Additionally, our future performance may differ due to a number of factors. Many of these factors are listed in our most recent Annual Report on Form 10-K and as revised and updated on our quarterly reports on Form 10-Q, which you can also find on our website at sealedair.com. We also discuss financial measures that do not conform to U.S. GAAP. You may find important information on our use of these measures and their reconciliation to U.S. GAAP in the financial tables that we have included in our earnings release. Please note that we will end the call by 11:00 AM today. Now, I'll turn the call over to Jerome Peribere, our President and CEO. Jerome?

Well, thank you, Lori, and good morning, everyone. I am proud to report on behalf of all Sealed Air employees that for the third consecutive year we executed on our commitments and delivered financial and operational improvements. We stayed focused on our objectives and our three division and functions performed extremely well. For the full-year 2015, we delivered 3% organic sales growth with favorable price mix in every division and in every region. Adjusted EBITDA margins expanded by 230 basis points. Our productivity metric, which is the ratio between our operating expenses to our gross profit, improved from 65% in 2014 to 60% in 2015. And if you look at our operational results excluding FX and the impact of 2015 divestitures, our net sales increased $217 million and our EBITDA increased by $212 million. That is impressive and something to be proud of. Our free cash flow in 2015 was $595 million, which excluded $184 million in CapEx, which included – sorry, $184 million in CapEx and $98 million in restructuring. And we returned $802 million to shareholders through share repurchases and still have $884 million remaining under our current authorization. Our Get Fit and Change the Game strategy is well under way and you can see the financial benefits from Get Fit programs over the last few years. Some of our Get Fit successes include a tight control and strategic alignments, pricing discipline, targeted R&D investments, gross margin expansion, productivity improvements, and working capital management, and there is still a lot to be done. In Supply Chain, for example, our Get Fit efforts are changing and simplifying how and where we operate to deliver improvements in cost of goods sold, cash management and service. Over the last 24 months, we have consolidated 9% of our total facilities, with another…

Thank you, Jerome. Turning to slide 10 and 11; let me walk you through out net sales bridge and adjusted EBITDA performance for the quarter and for the year. Starting with net sales on slide 10, we delivered $1.75 billion in sales in the fourth quarter and $7 billion for the year. On an organic basis, sales increased approximately 2% in the quarter and 3% for the full year. Sales growth was attributable to favorable price mix, which was 1.6% or $32 million in the quarter and 2.3% or $176 million for the full year. Volume was essentially unchanged in both periods. Unfavorable currency translation was $190 million in the quarter and $764 million for the full year. In 2015, approximately 18% of our total sales were exposed to the euro. In the quarter and for the full year, divestitures impacted net sales $64 million and $172 million respectively. Turning to slide 11, for the quarter, adjusted EBITDA of $282 million or 16.1% of net sales was essentially unchanged on an as-reported basis compared to our performance in the fourth quarter of 2014. Unfavorable currency translation was $30 million, and the impact from divestitures was $11 million. On an organic basis, adjusted EBITDA increased 15%. This increase was largely due to favorable mix and price cost spread of $40 million, and restructuring savings of $16 million. We are pleased to have delivered 190 basis point improvement in adjusted gross margin and 180 basis point improvement in adjusted EBITDA margin compared to last year. For the full year, adjusted EBITDA increased 5% year-over-year to $1.17 billion or 16.7% of net sales. Unfavorable currency was $126 million and the impact from divestitures was a negative $33 million. On an organic basis, adjusted EBITDA increased 19%. This increase was primarily due to favorable…

Your first question comes from the line of Scott Gaffner from Barclays. Please proceed.

Thanks. Good morning.

Good morning, Scott.

Good morning, Scott.

Just first question around Latin America, because I think in the quarter, if I looked at the slides correctly, it was up 10% organically in the quarter. Can you talk a little bit about that? Are you seeing anything in the economic environment that makes you concerned that that growth rate is not sustainable?

Well, Latin America has been a difficult continent throughout 2015, especially as devaluations in the second half have increased. Everybody knows the situation in Brazil, and we have dramatically suffered from our positions in Venezuela, but that's what it is. Having said that, we have some very strong bright spots, especially in Argentina, which has been one of the countries where we've been growing the most in local currency and in dollars in 2015. So, in the end, the environment is what it is. We have been slightly impacted in our Food Care business. We have restructured our product business – Product Care business, so we – the comparables are not easy to make here, because we have gotten rid of some very low-quality business. And in Diversey Care, we have had some spotty difficulties, including the countries I have mentioned, especially Venezuela and so. But altogether, we are fairly confident that we have hit the trough in these countries. In Food Care, we believe that in Latin America, outperformed the market despite the volume declines. There's a very strong interest in our new products introduction in countries like Argentina, Mexico and Brazil for example.

Operator, next question please.

Your next question comes from Ghansham Panjabi from Baird. Please proceed. Ghansham Panjabi - Robert W. Baird & Co., Inc. (Broker): Hey, guys. Good morning, and first off, congrats on the strong finish to 2015.

Thank you.

Thank you, Ghansham. Good morning. Ghansham Panjabi - Robert W. Baird & Co., Inc. (Broker): Yeah. I guess my question relates to the 2016 organic growth rate of 3.5%, which is clearly an acceleration over the second half 2015 run rate, even with the macro presumably more challenging. I guess what gives you more confidence on that type of outlook? And how does that break out between volume and price mix? Thanks.

So, it's interesting, it seems that everybody is rattled about (35:52) the economies. I would say the financial markets are pretty (36:00), one week it's oil, another week it's China, another week it's the banks, et cetera. I am not that negative. We are – we had growth of – when apples-to-apples, we had 2.8% growth in 2015. We have an objective of growing 3.5% plus and very frankly, I am very pleased with what I'm seeing with our new products and I could go and take them division-by-division. So, we have our Food Care business, which is going to be helped in the second half of the year by the massive cattle situation that we have talked in details about during our Investor Day saying that it was probably going to be coming the second half of 2016. And we definitely have now more confidence that it is clearly coming at that time. We have lots of very new products. We talked a lot about Darfresh on Tray. We talked a lot about OptiDure. We are – we have given you projections, 2018 projections for those type of products during our Investor Day. We are ahead of our schedule. We're very pleased. On Diversey Care, we're making very steady progress, substantial customer wins, very strong value proposition. Our Intellibot business is going well, our TASKI business is going well. Our positioning is very strong. Our Product Care has suffered from top-line growth in 2015. As we said earlier, we've divested from a little business in North America effective January 1. We are likely to conclude something else in Europe, which is not a quality business later in the first half. But our value proposition, the acquisition of B+, the launch of our FloWrap solutions, our new offerings are making me really confident. So, it's been a long answer. But very frankly, between 2.8% and 3.5%, given what we have is something that we should really be able to do. And this is in an economy which is not good, but when has it been good in the last three years?

And, Ghansham, just specific to your question about volume versus price mix. It's more heavily weighted with more than half driven by volume.

Operator, next question please.

Your next question comes from George Staphos from Bank of America. Please proceed.

Hi, everyone. Good morning. Congratulations on the year and thanks for all the details. I had a point of clarification question, and then I wanted to touch on organic volumes for the year. So Carol, I just want to make sure I heard you right. You are forecasting the EBITDA for the quarter coming in – did I hear correctly, at $245 million, with food being down somewhat? And I guess by implication, the other segments being up? And then just comparatively, what was the prior year if I strip out divestitures and the like?

So, George, on the – the $245 million is correct for the Q1 EBITDA forecast and driven mainly the decline by Food Care. So, yes, the implication is the other two would be up. And then on the divestitures, I guess – Lori, I'm trying to (40:00).

What we had for 2016, what we have is $18 million of – $18 million to $20 million in currency, and we've got about $18 million in divestitures.

Right. George, in Q1 of last year, it included – it has a North America and European trade divesture of $67 million. And on the bottom line, that impact is about $14 million in EBITDA. So $67 million on the top line and $14 million on the bottom line for Food Care. He had another question.

Operator, is George still available? I think he had another question.

George is not available.

Okay.

Okay. So, if George comes back in the queue, please let him in. Can we go to next question please?

Your next question comes from Adam Josephson from KeyBanc. Please proceed.

Thanks. Good morning, everyone. Carol, just on the FX assumptions, can you help us with what currency rates you are assuming for the full year? And how much different your sales and EBITDA guidance would be if you were taking today's rates as opposed to perhaps year-end rates?

Okay. So, with respect to the assumptions we made, euro, we used $1.05. We recognized that's less than where the euro's at today, but there's still a lot of volatility out there. And we feel like that's a good prudent exchange rate for us to utilize with our guidance. We referenced that about 18% of our revenues were based in euro for 2015, so the math can be calculated there. For the ruble, we used $80.5; the Brazilian real, $4.33; Australian dollar, $1.44; the Great British pound, $1.45; and the Canadian dollar, $1.30.

Operator, can you go to the next question, please?

Your next question comes from Anthony Pettinari from Citi. Please proceed.

Good morning. On free cash flow, getting beyond the CapEx bump in 2016, is that $200 million CapEx guidance for 2017 that you gave at the Analyst Day and I think that was sort of your normalized range beyond 2017. Is that still intact or is there anything – whether it's divestitures or maybe being a little bit ahead of expectations on Change the Game that would change that kind of $200 million normalized range?

So let me just make a general comment. You have pointed, Anthony, exactly the right thing, which is, are we ahead or are we late compared to our forecast given at Investor Day. And outside of currency, we're ahead, and we stand – what did we say? We said 4% to 5% organic growth on the top line and we said that it was not going to be linear. And what did we just say? We said 3.5% for 2016 and we confirmed that it's not going to be linear. It's going to be improving over time, thanks to the ramp-up of our solutions which are really getting market traction. Then we said 7% to 8% growth of EBITDA over time. Over that period 2015 to 2018, with the goal of reaching EBITDA margins of 18% in 2018 and 20% in 2020. You'll remember that I also said that our goal was to align the year with the EBITDA percentage, well, thanks to – in 2015, we're ahead and we plan to continue to be ahead. So, all together, we're comfortable with the EBITDA growth guideline that we have given for that – in July – or in June of last year for 2015 to 2018. And definitely with the growth targets, we believe that we are ahead. And on your point on capital, Carol can comment. But, yes, indeed we're also confident with the guidance that we have given over the next three years for free cash flow as a result – including also as a result of the capital where we said that it was going to be $180 million to $200 million, if I remember.

Yeah. So, $180 million to $220 million, so averaging out about $200 million and we still feel like that's the right number given growth, investment opportunities that we're very confident we'll have those investments that will continue to drive Change the Game.

Operator, next question please?

Your next question comes from George Staphos. Please proceed.

George?

George, please try to make sure your phone is not on mute.

Okay. You want to move to the next question, operator, please? Thank you.

Okay. Your next question comes from Chip Dillon from Vertical Research Partners. Please proceed.

Yes and good morning. Question has to do with the – just basically the free cash flow guidance. And I just wanted to really zero in on the tax situation. You mentioned, Carol, a tax rate of 24% and I wondered how much of that would be cash taxes in the sense that you might still have some carryover tax benefits from the settlement and maybe some other items. In other words, is that going to be all cash or do you think it'll be some benefits carryover that will reduce the cash tax rate?

So, we – actually what we communicated, Chip, on Analyst Day is that our cash taxes will be going up as we move forward because we have utilized a lot of the benefits. So, our guidance at $125 million will be moving to $180 million is our estimate for 2018. So, we expect that to continue to increase as we go forward.

Operator, next question please.

Your next question comes from the line of Chris Manuel from Wells Fargo. Please proceed.

Good morning. This is Gabe Hajde, actually, sitting in for Chris. Wanted to touch on the raw material environment, sort of what your expectations are heading into the year, what's baked into guidance, and if there's any sort of benefit price-cost spread that you are looking at, that's baked into your number?

So, are you saying long-term, or you – could you rephrase the question? Are you referring about the long-term environment, or just basically 2016?

Well, Jerome, I mean, the more near-term question would be, what is assumed in your guidance? And given sort of what we're seeing with oil, where it is today, and increased capacity in polyethylene, is your long-term expectation that it could stay down here, in terms of resin, regardless of what happens with oil?

Okay. So, we have baked in our forecast weak polyethylene prices, olefins prices, and these are already in our forecast. We're very close to those markets and, so far, they are developing as we thought they would be developing. So, we don't believe that there is much upside compared to what we have forecasted at this point in time. With regards to the overall environment, while we are on February 10, have been, year-to-date, to nine countries around the world. And my job is to have one eye on the microscope and one eye on the telescope. And I can assure you that I'm very close to what's going on. And I went to Asia, I went to Europe, traveled in North America, and I am seeing positive momentum altogether. So this painting things in black and white globally is – might be fashionable, but I just don't see it this way. I'm seeing that we have customers, and we have momentum with customers, and we have new customers who are interested in what we're doing, who want to eliminate food waste, who want to eliminate and optimize packaging, et cetera, who want to improve their food safety, who want to see productivity improvements in their operations in the Diversey Care, and they're looking at us as having the ability, the capability, the knowledge, the results, to bring them value-add decisions. And I must say, I'm pretty optimistic.

Operator, next question please.

Your next question comes from Mark Wilde from BMA (sic) [BMO] (49:41) Capital Markets. Please proceed.

That's BMO, thanks. Good morning, Carol. Good morning, Jerome.

Good morning.

Good morning, Mark.

I wondered if you could just talk about sort of uses of cash in 2016. The stock is quite a bit cheaper now than your average price last year but, at the same time, probably acquisition multiples on businesses you might be interested in are probably coming down. So, just some thoughts on that.

So Mark, we've stated many times that, with respect to acquisitions, we do not have a huge focus to go out and acquire, something other than what could be considered a bolt-on or an added technology benefit for the company. And in fact, over the three-year planning horizon that we communicated on Analyst Day, we said we were estimating a total of approximately $400 million over that time period. Our acquisitions to-date have continued to be things that bring technology to the company, or expand market penetration capabilities with existing customers, and can help us win new customers. So that – our focus there won't change. Jerome has been very vocal about, with his experience, a lot of acquisitions just aren't successful and we're going to remain focused where we have core capabilities and we know we can bring successful financial results to our investors. With respect to looking at share repurchase, we were very active in 2015. We're confident in the price that we paid, that it's a good value over the long term. We work with the board, providing them various financial models around intrinsic value, Monte Carlo simulations based on our long-term forecasts. And while the price is extremely attractive right now, we'll continue to work with the board on what they think are the right actions for us to move forward with the remaining value of our share repurchase program. And we also will manage within that 3.5 times to 4 times leverage.

So, let me add a little bit of color in here. We – my view on acquisition hasn't changed. There is a time for making large acquisitions, and there's a time for staying focused. 2016 is still, for us, the time to remain focused. We have a lot of value to capture through our ongoing – in 2016, in 2017 to our Get Fit programs, a lot. And we have a tremendous ramp-up on our innovation and of our Change the Game. Let's separate those two. Change the Game are highly disruptive innovations, they're not all of our innovations. And we are continuing to do small acquisitions, and those are technology targeted and we are very pleased – very, very pleased – with every single of those that we have done, they are very small companies, generally speaking they're start-ups, but we have done that. Are we going to do bigger ones in the years to come? Yeah, we probably will. Having said that, you want to do those when you have basically exhausted the bulk of your opportunity – organic opportunity – and we have so many opportunities, on what we are improving and doing, that we should not be distracted.

Operator, next question please.

Your next question comes from the line of Philip Ng from Jefferies. Please proceed.

Hey. Good morning, guys. The industrial economy is obviously quite weak. It's impressive you expect Product Care volumes to be up this year. Can you kind of parse out the opportunities you are seeing that's driving the growth, whether it's e-commerce or dim weight, and how trends are shaking for just the broader market? Thanks.

Okay. So, the industrial – as you seem to focus here on the Product Care, it is correct that industrial markets, and we have noted that in our packaging sales for industry and on exports for out of the year, we have noted softness. This is correct. You mentioned e-commerce. We have had double-digit growth. We continue to have double-digit growth and we're focusing a lot on dim-weight and on solutions, which can reduce damage and improve the volume of the boxes, et cetera. This is why we have acquired B+. This is why we have developed and launched our FloWrap technologies. They're having huge interest. We're working with integrators; we're working with lots of 3PLs and fulfillment companies and we are very excited by the discussions that we're having. The pipeline is absolutely tremendous. And there's not one company we go to who is not impressed with the way we approach the market because we can help them reduce dim weight or dimension in the packaging, and reduce the damage. And when you look at the cash cost of the packaging operation between the cost of the packaging, the cost of the fulfillment operation, which is fulfillment velocity, which is the manpower to pack, between transportation cost and between damage, out of those four cash costs, the smallest of the cost is the cost of the packaging. And therefore, you cannot isolate the cost of the packaging from the other three because this is how we can add the most value to our customers and extract, by the way, the most value to ourselves also. And we have a very strong equipment placement story here that we – which has been ramping up over the whole year of last year, and we are very optimistic that this is a very good time for 2016.

Operator, I think we have time for one more question please.

Your next question comes from Rosemarie Morbelli from Gabelli & Company. Please proceed. Rosemarie Jeanne Morbelli - Gabelli & Company: Thank you. Good morning, everyone, and congratulations. Jerome, I was wondering if you could give us a little (56:29) on the food side and compare what you're expecting in terms of growth rate in North America versus a decline in Australia. Have those kind of met one another and decline in Australia will be lower than the increase in North America?

Okay. Well, there are cycles, and you pointed to that cycle. And yes, the Australian beef cycle, which was growing double-digits in the first half in Food Care, was growing at a lower pace in the fourth quarter. Having said that, now, we believe that the Food Care North America upside is going to be stronger than the Food Care situation in Brazil. And then once again, you have cattle, but you also have pork, chicken, et cetera, and we are fairly positive for the other parts of the world with regards to pork production and chicken production. In the U.S., we believe that in the second half, given the fact that you have a lot of cattle which moved to feedlots, instead of all the signs out there that it's going to be a stronger year for protein. So that's on the market side. We have grown in a negative environment. We have grown in the U.S. in a minus 5% capital environment in 2015 and this is by adding solutions, value add solutions to our customers and therefore, we're very optimistic about what's going to happen in the second half of 2016.

Operator, that's all we have time for this morning. Thank you, everyone for joining. Operator, I pass the call back to you.