Good day, ladies and gentlemen, and welcome to the Sealed Air Fourth Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Lori Chaitman, Vice President of Investor Relations. Please begin.

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 and Current Reports on Form 8-K, 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 reconciliations to U.S. GAAP in the financial tables that we have included in our earnings press release. Included in today's presentation on slide 3, you will find U.S. GAAP financial results that complement some of the non-U.S. GAAP measures used throughout the presentation. Now, I'll turn the call over to Jerome Peribere, our President and CEO. Jerome?

Thank you, Lori. Good morning, everyone. As you can see from our results, free cash flow and earnings per share performance were the highlights for the quarter and the year. We generated $631 million in free cash flow in 2016, and this was net of $276 million in CapEx and $66 million in restructuring. The significant upside relative to our guidance was primarily driven by our continuous strong focus on working capital. We also delivered $0.76 in adjusted EPS in the fourth quarter and $2.66 per share in 2016 after repurchasing only 5 million shares in the first nine months of the year. In the fourth quarter, both Food Care and Diversey Care delivered organic sales growth of approximately 3% and adjusted EPS growth of 16%. In Food Care, protein packaging volumes in North America increased more than 6%. Our hygiene business increased by 5% in constant dollars and we delivered favorable price mix on a global basis. Diversey Care's growth was primarily driven by favorable price mix of over 2% and volume increases of 7% and 3% in Asia-Pacific and North America, respectively. Where we felt short in the quarter was our top-line constant dollar growth in Product Care, which weighed on our adjusted EBITDA performance. We knew December would be a critical month for us with most of our global growth depending on our e-Commerce business, and we were happy with our e-Commerce volume growth of 15% in the quarter, but this was offset by weakness in global industrial GDP and our product rationalization efforts. And despite the shortfall in sales, adjusted EBITDA margins increased 80 basis points over the last year to 22.3%. So as I'm sure you all know, I am not happy with our overall organic growth of 1.3% in 2016. We underestimated the impact…

Thank you, Jerome. Turning to slide 11, let me walk you through our net sales performance on a year-over-year basis. We delivered $1.7 billion in net sales in the fourth quarter and $6.8 billion for the full year 2016. Volume contributed $26 million and $15 million to top line growth in the quarter and for the full year, respectively. Favorable price mix was $9 million in Q4 and $41 million for the year. Unfavorable currency translation was $40 million in the quarter and $243 million in 2016. Food Care divestitures impacted sales by $5 million in Q4 and $102 million for the full year. On slide 12, you can see that our adjusted EBITDA was $304 million or 17.5% of net sales in the fourth quarter and $1.16 billion or 17.1% for the full year. Mix and price/cost spread was $13 million favorable in Q4 and $46 million in 2016. Volume growth contributed $9 million to the quarter, and $19 million for the year. Restructuring savings were $10 million and $43 million in Q4 and 2016, respectively. Operating expenses increased $6 million in the quarter. For the full year, operating expenses increased $69 million, most of which is related to compensation inflation. Currency was a negative $4 million in Q4 and a negative $35 million in 2016. For the full year, divestitures had a negative impact of $21 million on adjusted EBITDA. Adjusted gross margins improved 60 basis points in the fourth quarter and in the full year, resulting in 36.8% margin and 37.4% margin, respectively. We were pleased with this performance in light of the volatility of input cost and timing of raw material cost pass through in Food Care. Adjusted earnings per share were $0.76 in the fourth quarter and $2.66 for the full year. Currency translation reduced…

Thank you. The first question is from Ghansham Panjabi of Baird. Your line is open. Ghansham Panjabi - Robert W. Baird & Co., Inc.: Hey, guys. Good morning.

Good morning, Ghansham.

Good morning, Ghansham. Ghansham Panjabi - Robert W. Baird & Co., Inc.: Hey, I guess, kind of looking back at 2016 and core sales growth, it was almost 50-50 divided between price mix and volume, is that the right way to think about 2017 as it relates to Food Care and Product Care growth at 3%, and off the (24:22) volume bucket for Food Care and Product Care, those two businesses, how much do you think will come from new products, OptiDure, Darfresh on Tray and all the many new products, Jerome, that introduced in Product Care late last year? Thanks.

So, good question. And no, I don't think that is going to be – the growth is going to be 50-50. I think that the growth is going to – actually the way we're seeing the growth is definitely more towards volume growth than price mix. That's mainly how we see it happen. We are dealing with the resin price which is flattish, it's coming up in the first quarter and so – but we believe that those are going to come down during the year. So, it really is volume growth that we're looking at.

Thank you. The next question is from George Staphos of Bank of America. Your line is open.

Hi, everyone. Good morning. Appreciate all the details. I guess if you could go back to the prior quarter and what your internal views might have been for 2017, and as we then fast forward to the current time, Jerome, what if anything has changed the most for you either positively or negatively in terms of the outlook for 2017, recognizing volume is going to be, in your view, an important contributor to top line growth, are there any other elements to your strategy that you might be working a little bit more aggressively this year, given that you said that you weren't entirely happy with the performance in 2016, as well. Thanks.

Okay. Thanks, George. Good question again. And no, I am not happy. I am not happy with the growth that we had, and I am disappointed. Why? Because we didn't have a very strong – we didn't have much growth in the first half, a little bit in the third quarter, it's improving somewhat in the fourth quarter, but it is not at the levels that I was expecting, and yes, indeed we have been surprised by a few things. Number one is the global GDP, you go to Bloomberg on February 2016 and you see that global GDP was forecasted at 2.4%, and it ended up – global ended up at 1.9% with the U.S. at 2.4% also, which ended up also at 1.9%, and Europe, which was forecasted at 1.9% and it is at 1.6%. And for 2017, the trend seems to be the same. Last year 2017 was seen to have a global GDP forecast, for 2017, a year ago, at 2.6%, and today's projection is 2.3%. So, we can't ignore those kind of things and what has disappointed me is the lack of industrial GDP growth. In a world economy, which had 1.9% global GDP growth, this is probably one of the worst years that we have experienced in many years actually. And it's always next year which is supposed to be better, but you know what? We're not counting on it. And in our forecast at this point in time, we are considering that the industrial world is not going to be better, and if it comes as a good surprise, well be it, we'd love that. Back in June of 2015, during Analyst Day, almost two years ago now, or 18 months ago, we were seeing a macro world which was going to be…

Operator, next question, please.

The next question is from Scott Gaffner of Barclays. Your line is open.

Thanks. Good morning, Jerome. Good morning, Carol.

Good morning, Scott.

Good morning.

Just looking back at the presentation from late last year, when you talked about the spin transaction for the Diversey business. And obviously, it was a tax-free spin, and you mentioned in the release, you are including possibly doing a potential sale. I mean, are you okay, potentially realizing the lower proceeds simply due to tax leakage for the business now, just because it does maybe get you to your goal of simplifying the operating structure, or how should we think about that?

Well, the way you should think about this is that we're going to be counting properly and that we're going to do what is the best for our shareholders. And, I'm not announcing a sale, well, I am saying that we are pursuing to do it right here.

Operator, next question please.

Yes. The next question is from Edlain Rodriguez of UBS. Your line is open.

Thank you. Good morning, guys.

Good morning.

Just one quick question on resin cost. I mean what are your expectations for 2017? I mean, they seem to be staying higher than expected and the case would not be, what oil prices do, or whether we'll see a decline in the second half of the year. So, how you combat in those rise in resin costs?

So the market is choppy, you've seen that, that there's been increases in September, which were given back two months later. You see that the $0.05 in February is going through. We'll have to see whether the $0.06 (34:56) is going through, you'll have ethylene prices which are high, you have turnarounds, which are fabulously orchestrated. And at the very same time, you'll have some high capacity, or lots of capacity which is coming later in the year. So our view on the full year is that our – that prices are going to be flattish, and formula prices have a little bit of lag, is this going to impact the first half? A little bit with those price increases announced, yes, but for the whole year, we are counting on flat sales, which is why, by the way, we are not going to – we are not having a lot of price in our growth forecast, we have price mix, but we don't have very much of that. What you have to know is that we're very diligent. We have announced the pricing increase effective March 1 in our Product Care business, we're looking at systematic price product line by line, it's not going to apply across the board, because it's going to apply to polyethylene based products and we don't have only polyethylene based products in Product Care. We're looking at similar things where we don't have formulas in other – in other divisions, and by definition, we're not in the business of absorbing those cost increases.

Thank you.

Operator, next question please.

Next question is from Adam Josephson of KeyBanc Capital Markets. Your line is open.

Thanks. Good morning, everyone.

Good morning.

Just one on the SC Johnson agreement. Can you just talk about what the adverse impact on Diversey's EBITDA is from termination of that relationship, and how the new Diversey pro forma EBITDA now compares to the $305 million that you laid out, when you announced the spin? Thank you.

So, well, we have never given and we're not going to be giving the specific detail on this contract, but I have – I have said that we are expecting 1% sales growth and flattish EBITDA in 2017 out of Diversey Care as a result of this. Given that we are having under non-Diversey Care – non-SC Johnson business we're having higher growth than what we had in total in 2017 – in 2016.

The next question is from Brian Maguire of Goldman Sachs. Your line is open. Brian Maguire - Goldman Sachs & Co.: Hey, good morning. Thanks for taking my question. Just wanted to clarify a couple things on the 2017 outlook. Carol, first I think I heard you mention it was probably a $10 million basis adjustment in the way that you're calculating EBITDA for 2017, that's a negative on there. Then why not give a range on it, given some of the uncertainty out there? You know, historically, I think, you'd given maybe a $20 million range, is it kind of appropriate to think about it as a $10 million range around the point estimate? And then, just finally, on the first quarter, usually at least in 2016, you saw about a $40 million drop in EBITDA from 4Q to 1Q, are you thinking about a sort of a similar amount of seasonality this year? Thanks.

Thank you, Brian. Yes, we highlighted that if you looked at it apples-to-apples and how interest expense – our interest income would be treated, the 1180 (38:32) would be $10 million higher, including interest income. So we've made that change in our guidance and we'll reflect that in our actual results as we move forward. If you want to have a number for comparison purposes, the interest income that was included in the adjusted EBITDA reported for 2016 is $13 million of positive interest income. And we'll reflect that change in Q1. With respect to providing a range, we just felt that it was probably cleaner to pick a point of the $1.18 billion and work towards that, it helps with our modeling, as well as yours and our investors to do that, so that's what we've done. And then just we highlighted and called out the various moving pieces, and I think, one of the changes versus maybe what you were looking at before is definitely on the share count and the currency and SCJ, all three of those are causing a bit of headwind, if you look at probably street expectations versus the numbers that we've reported this morning as our outlook.

So what you're having here is in 2017, we have included basically $50 million of negative, and it's $40 million from currency, and it is $10 million – actually it's more, it's $13 million on the interest income. So you have $53 million right there. And then next to that, you'll have a very transparent explanation of a flat Diversey Care in terms of EBITDA for the simple reason in constant currency – flat EBITDA, for the simple reason that we have a temporary situation with these consumer goods contracts. And this compares to a double-digit EBITDA growth in constant currency every single year in the last four years in Diversey Care. So that's what's going on. And should currency be better than the $40 million impact? We're going to be obviously happy about this. It is pretty choppy, remember, the euro was at $1.03 four weeks ago, three-and-a-half weeks, it is at $1.07, and those kind of things. You have quite a few movements of currency at this point in time. But you have $53 million of negatives right away as I just compared those two things on interest income, and currency.

And Brian with respect to your question about Q1 2017, we did highlight in our comments that we do expect it to be the low point in terms of EBITDA earnings in 2017, and we will accelerate as we move throughout the year.

Operator, next question, please.

The next question is from Tyler Langton of JPMorgan. Your line is open.

Good morning. Thank you. Just had a question on the currencies, I don't know if I missed it, but could you just give some details on, I guess, what rates you are assuming in your guidance and then, I think Carol you mentioned the euro sensitivity, but could you give any sensitivity around your exposure to the other currencies? Thanks.

Yes. So if we look at for 2017, we have assumed the euro at $1.05 and the great British pound at $1.25. Those would be two of the major currencies, and I called out the percentages in my comments that the euro represents about 18% of net sales and the British pound was 5%. The next highest currency that reflects – that impacts us is the Australian dollar at 4% of our net sales. And we're assuming a rate of $1.33 for 2017.

Operator, next question, please.

Yes. The next question is from Phil Ng of Jefferies. Your line is open.

Hey, guys. Just a quick clarification question, I assume the comment around looking at strategic alternatives, you just limited at Diversey rather than entire company, and I guess, separately, just given the growth you're seeing in 2017 from new products, the beef cycle turning and just being done with pruning on the industrial side, I would have thought mix would have contributed more in 2017? Can you just talk about how you think about mix the next few years? Thanks.

If you just give a little bit of more color to the question, specific question? Mix, what kind of mix are you referring to?

Referring to Change the Game, Jerome, in terms of price mix in 2017?

Okay. So, we're not giving those kind of details of price mix for existing products or new product, et cetera. Generally speaking, what you have to consider is that our solution based offering is having higher margins because as we are creating, with some of our solutions, extraordinary value for our customers, we are in a mode of sharing those. And we have glowing examples of those and when you take products like OptiDure where you have less flickers at the production level, where you have more additional sales because of the shine of the product and tightness in the vacuum. When you have Darfresh on Tray, which reduces dramatically the shrink at the retailer level, and it improves the shelf life and therefore, the supply chain. When you have products like FloWrap and StealthWrap, whose number one benefit are – and I-Pack, number one benefit are to reduce the shipping costs, because they generate less Cube, which is by the way in e-commerce, the number one cost. When you take the whole packaging operation, the number one cost is freight, is shipping cost. So when you can improve all of those kind of things, you are in a position to obviously enjoy better margins if you can demonstrate those value. So that's how we're going. But having said that, we're not giving details on the margins of existing products versus the new products, although during our Investor Day in September, we'll be able to give an update of how we're progressing and with our Change the Game offering.

Operator, next question please.

The next question is from Anthony Pettinari of Citi. Your line is open.

Hey, good morning.

Good morning, Anthony.

Just a question on Product Care. A third of that business is e-commerce, third-party logistics that's presumably growing double digits. Can you help us square that with the 1.5% overall volume growth in the Q? And then maybe just following up on Phil's question, if I look at the three businesses for the year, Product Care had the best volume growth but the weakest price/mix. Is that a case where some of the new sales gains in e-commerce are coming from lower margin products or any color you can give there will be helpful?

Yes, you're correct that the volume growth in Product Care total year has been 1.4% in 2016 versus 1% in Food Care. It's not like this in the fourth quarter because it was Food Care, which had the highest growth. Having said that, the price/mix has also been different, and the price/mix has been more unfavorable every single quarter during 2016. And this is because we don't have price formula. So depending on the mix and also depending on the type of products or resin prices, we have to adapt our pricing in a very different way because those are very different businesses with our customers there.

Operator, next question, please.

The next question is from Chris Manuel of Wells Fargo Securities. Your line is open.

Good morning. I have just one question on Diversey, but there's a couple little pieces to it. First, the $250 million or so you did this year, remind us, because I forget, what the corporate allocation element is in there, so what should I think the real kind of EBITDA number is. And then if I heard you correctly, earlier in the call you said that share repurchase would be sort of on hold until you made a decision or got some clarity there, whether it's a spin or sale. And I guess then the last piece is timing. Has anything changed from it being a third quarter event?

Okay, So, Chris, I'll start with respect to allocation. The costs that sit within the businesses that you see within our segment reporting, they primarily represent the cost to operate that business, and that's true for all three of the businesses. So I would not think about it having a huge amount or even a mid-sized amount of allocation that's not needed to support the business. We've made a decision all along that we keep a lot of the more corporate-type costs, they sit in that other category where we have corporate and the Other Medical and New Ventures small business. So what sits there within the segment is largely what it requires for that business to operate within Sealed Air. And then with respect to the separation itself, we've referenced the second half, and there is really not a lot more we can say on that separation. It's proceeding as Jerome has described.

Operator, next question please.

Yes. The next question is from Jason Freuchtel of SunTrust. Your line is open.

Hi. Good morning.

Good morning.

In terms of your free cash flow guidance, I think total cash restructuring expectations over the course of 2016 and 2017 came down relative to what you previously indicated. Is the difference primarily being driven by the separation of Diversey Care and will restructuring payments go away in 2018? And then additionally for CapEx, is $185 million an appropriate level to assume going forward for just the Food Care and Product Care segments?

Okay. So, Jason, thank you. With respect to the restructuring, you're correct. The amounts are lower than what we had originally forecast even as late as Q3. And you're also correct that it is largely driven by the separation plans. I made the comment on our Q3 earnings call that we would manage initial cost within the existing program, as it related to starting to address some of the stranded costs, and that's what we've looked at. We've also been very diligent about going through the programs and prioritizing based on what could give a near-term return and also recognizing that separation of a business of this size for New Diversey also takes commitment and focus. And we want to make sure we optimize value for the shareholder and we continue great service for our customers. So that's also caused prioritization, and it decreased the amount we spent in 2016 and shifting to 2017. In total, the amount for restructuring is not changing. We would expect to have some spend in 2018, but also savings in 2018 based on this shift. But we will be taking a hard look as we move throughout the first half at this program and what will add the most value for Sealed Air. With respect to the CapEx, we'll provide more color on forecasted CapEx for Food Care and for Product Care post identification of the separation.

Operator, next question please.

The next question is from Mark Wilde of Bank of Montreal. Your line is open.

Yeah. Good morning, Jerome. Good morning, Carol and Lori.

Good morning.

Just wanted to swing back to the Product Care business and can we get some sense of whether in general the e-commerce business right now has lower margins than the segment overall? And then also, I'm just kind of curious why volume isn't a little bit better given that we're seeing things like the ISM Index for manufacturing pickup, we're seeing some pickup in other forms of industrial packaging, so maybe your thoughts there.

Okay. So what Product Care has clearly suffered from is from the mix between industrial and e-commerce and 3PL. Let me address the second part of your question first, which is the Index. Yes, in general speaking, we can see some ratios, which are hanging in there. The reality is that we have the bulk of our business, about 85% of our business, is in North America and is in Europe. And when you look at those two parts of the world and when you talk with our customers, and very frankly on the industrial part, their exports and their business is suffering, and it's just sluggish. When you have the U.S. with a GDP of 1.9%, all driven by consumers, you can call this an industrial GDP boom or these kind of things. And as I said, the bulk of our Product Care business is in North America and in Europe. So that's the way it is. Unfortunately, we have a large part of our Product Care business in there. Fortunately, we're growing very fast in the 3PL and e-commerce business, and the solutions that we have are absolutely second to none, disruptive, and revolutionary. Thus every time we are engaged with new customers, we are going through a whole process of new value being created and working on how we can go and get the kind of things done. And now addressing your first question, which was related to the margins of e-commerce versus industrial. Yes, indeed with our current portfolio, they are slightly lower. But with the solutions that we have shown at Pack Expo, they are going to be definitely improving and not lagging our industrial business.

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

Okay. The final question will come from Arun Viswanathan of RBC Capital Markets. Your line is open.

Great. Thank you. I just wanted to get back to the volume side. You seem somewhat confident in there, and maybe you can just discuss how that works out by region. North America and Europe have seen decent gains in both Food Care and Product Care, but the non-U.S. is still pretty concerning. How do you see that playing out next year? Do you see continued drags in Latin America and Australia, and then also in Europe in Product Care? Thanks.

It seems that your question started with Food Care and so...

Yeah. I just wanted to see if you can go through both if possible. Thanks.

Sure. So in Food Care, we're seeing continually strong growth out of North America. We had negative volume in Latin America, actually very negative in Brazil, positive in some other parts of Latin America, but for a total being negative. We believe that this is going to be stabilized. When we look at the herd and type of the cattle cycle, we are seeing that, specifically in Brazil, we're seeing that it has hit the trough in 2016. We believe that the first half of the year is going to be somewhat flattish, and that it is going to start to improve in the second half of 2017. When you look at Australia, 2017 is going to be lower than 2016. Again, we are following very closely their herd size. The herd size is being rebuilt in 2017. It has dramatically come down in 2016 for all the reasons that we talked about. And when you think about the herds in 2014, it was 29 million head, and in 2016 it was about 26.2 million. And this has been a huge reduction and the slaughter rate has dramatically decreased. We believe that it is going to continue in 2017 at lower a pace but it's going to continue, and definitely as the herd is being rebuilt from 2016 in 2017 and onwards, towards 2021, we believe that the business in Australia, the slaughter rate is going to increase, and as you know, it's a positive from 2018. So what we see is that from 2018, we're going to have the three big parts of the world which are exporting, et cetera, which are Latin America, Australia, and North America be on an up cycle, and that's going to be definitely very positive of that. To be noted also is that the exports out of Brazil are improving, but you have to remember that about 88% of the Brazilian beef exports are frozen and 12% are fresh. The good news is that fresh is expanding with the approval to export to the U.S. and will open to Asian markets as well. So on Product Care, we think we have a huge momentum on 3PL and e-commerce. We're going to be showing more of the partnership agreements that we have in the second quarter with very important ones. And so we're doing great things. It is going great and we are going to be showing, we believe, nice growth in the 3PL, e-commerce in North America. The European business has been negative in the fourth quarter. Disappointing, definitely led by our industrial business in Europe. The whole question is how do we mitigate with e-commerce and 3PL the flattish trends in industrial. And our view is that we shouldn't count on industrial increase in 2017, and preserve our position there at the very same time, continue to aggressively grow the businesses which have momentum and in which we're very disruptive.

Operator, that ends our conference call for today. Thank you every one for joining.

Thank you. Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Good day.