Sealed Air Corporation

during our third quarter call. We will continue to focus on our core business and customers, restore underlying fundamentals, and position ourselves for accelerated growth in 2025 and beyond. I will now share some updates across our transformational initiatives. First, as we previously mentioned, we recognize the need to reallocate global resources back into our regions to enhance customer proximity and improve commercial effectiveness. As part of our reorganization efforts, we also determined that blending the protective and food commercial teams contributed to a loss of customer centricity and reduced commercial rigor. Consequently, we have reorganized our commercial teams by reestablishing food and protective operating units within each region and shifted global resources to our regional teams. This is an initial step in our broader transformation to improve our commercial execution and capture incremental market share as conditions improve. Second, with sustainability as an accelerating megatrend in both food and protective, now more than ever, innovation will play a critical role in driving outside market growth. To maximize our opportunity, we are shifting our innovation focus from the laboratory to the field. What does this mean? We have a strong material science research and development capability, but we need to take the next step forward by better leveraging the voice of the customer to help prioritize and shape our innovation pipeline. Making this shift combined with our scale will allow us to outpace our competition, ultimately improving time to market and the commercial success of our new products. Throughout 2024, we will be introducing new recycle-ready products at an accelerating rate, bringing to market full automation solutions within case-ready, and expanding applications within our fluids and liquids businesses. Moving to slide four, you can see a practical example of where sustainability pressures driven by new regulations and consumer preferences are driving an unprecedented shift in the protein trace market. In response, We recently introduced the first bio-based, industrially compostable tray for protein packaging. These trays provide comparable performance and stability to traditional expanded polystyrene trays, allowing us to gain share in an estimated $5 billion tray market while supporting our customers' sustainability goals. Next, we have continued our portfolio optimization efforts. investing in core growth products while deprioritizing those that no longer align with our strategic objectives. We have made a lot of progress in redefining the long-term strategy for our portfolio of solutions. In large part, getting back to see differentiated material science, automation, and service expertise. As our transformation takes hold and markets recover and financing environment improves, we will be in a much stronger position to take actions to drive further shareholder value. Meanwhile, our primary focus remains on making improvements we can drive regardless of the operating environment. Finally, our cost reduction initiatives within CTO2Grow are progressing as planned. In 2023, we drove actions culminating in an annual run rate savings largely in 2024 of $50 million up from $40 million at the end of the third quarter. As part of the effort, we have completed three planned closures in 2023 and are in the process of closing four additional sites as part of our footprint rationalization efforts with more sites under review. In addition, we are right-sizing our Argentina operation given recent regulatory and economic instability. With the actions we have driven so far, we are currently at a total of $65 million in annual run rate savings. Building upon this momentum, we are confident in our ability to achieve $90 million in year-over-year cost savings in 2024. Moving on to updates in our food and protective segments, we observed ongoing challenges in the food segment where volumes declined year-over-year. However, Sequential performance improved in Q4 due to increased holiday demand. The challenges we faced in the fourth quarter stem from multiple factors, including the rebuilding of the cattle herd in North America, shifts in the European protein production and consumption, and consumer trade-downs in retail food. The depressed cattle cycle coupled with higher interest rates negatively impacted our equipment business as customers scaled back their capital expenditures to preserve cash. We expect these trends to continue to 2024. For protective, 2023 was a turbulent year. Real industrial production contracted year over year in most advanced economies. High inflation and the subsequent drag on real income continued to squeeze household spending power and is reducing the demand for consumer goods. Additionally, sustainability and new business models like shipping your own container and buy online, pick up in store, continue to reshape e-commerce packaging choices and demand. Pricing pressures have intensified as competitors step up to address weak market demand. On a positive note, the destocking of downstream inventories is largely complete. Different from previously expected, while market indicators are signaling an improving 2024, we have not yet seen this translate into improving demand for our customers' businesses and subsequent restocking or uptake in volumes for our packaging solutions. While we do not see an immediate near-term market catalyst, we are anticipating a gradual recovery in our end market throughout 2024, with volume lift towards the end of the year and continuing into 2025. As our markets recover, our focus on innovation and sustainability, coupled with our CTO to grow and strategic commercial initiatives, gives us confidence in CEE's continued recovery. Now I'd like to turn it over to Dustin to review our financial results. Dustin?

Thank you, Emil, and good morning, everyone. Moving to the fourth quarter and full year results, let's turn to slide five. Net sales were $1.4 billion in the quarter, flat on a constant currency basis, and were $5.5 billion for the full year of 2023, down 1% at constant currency. Adjusted EBITDA on the quarter was $274 million, down 8% compared to last year. For the year, adjusted EBITDA was approximately 1.1 billion, down 9%. Volumes have improved sequentially in Q4 as holiday demand drove a low single-digit seasonality pickup. As reported, adjusted earnings per share in the quarter of 88 cents were down 11% compared to a year ago. Our adjusted tax rate was 18% compared to 26.1% in the same period last year, driven by one-time benefits due to the reversal of liabilities related to uncertain tax positions. We did not repurchase any shares in the quarter. Our weighted average diluted shares outstanding in the fourth quarter of 2023 was $144.9 million. For the year, adjusted earnings per share of $3.18 was down 22%, primarily driven by lower adjusted EBITDA and higher interest expense, partially offset by lower tax expense. Turning to slide six, in Q4, LocalBox contributed 5% to total company sales, or approximately $70 million, but was offset by lower pricing and protective and lower volume in both businesses. The volume declines were driven by continued market pressures and protective, lower automation sales, as well as continued weakness in food, retail, and markets. Fourth quarter adjusted EBITDA of $274 million, which included $15 million contribution from local box, decreased $23 million, or approximately 8%, compared to last year, with margins of 19.9%, down 120 basis points. This performance was mainly driven by lower volumes within both segments, offset by contributions from local box.

Moving to slide seven.