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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Constellation Brands Inc | NYSE:STZ.B | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 310.00 | 0 | 01:00:00 |
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
16-0716709
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
207 High Point Drive, Building 100, Victor, New York
|
14564
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
|
|
(585) 678-7100
|
|
|
(Registrant’s telephone number, including area code)
|
|
|
|
|
|
Not Applicable
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
|
ý
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
Class
|
|
Number of Shares Outstanding
|
Class A Common Stock, par value $.01 per share
|
|
167,864,014
|
Class B Common Stock, par value $.01 per share
|
|
23,324,443
|
Class 1 Common Stock, par value $.01 per share
|
|
7,088
|
|
|
|
|
Item 1.
|
Financial Statements.
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
|
|||||||
|
May 31,
2018 |
|
February 28,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
210.0
|
|
|
$
|
90.3
|
|
Accounts receivable
|
827.9
|
|
|
776.2
|
|
||
Inventories
|
2,068.4
|
|
|
2,084.0
|
|
||
Prepaid expenses and other
|
498.5
|
|
|
523.5
|
|
||
Total current assets
|
3,604.8
|
|
|
3,474.0
|
|
||
Property, plant and equipment
|
4,815.8
|
|
|
4,789.7
|
|
||
Goodwill
|
8,050.5
|
|
|
8,083.1
|
|
||
Intangible assets
|
3,301.6
|
|
|
3,304.8
|
|
||
Other assets
|
3,324.0
|
|
|
887.1
|
|
||
Total assets
|
$
|
23,096.7
|
|
|
$
|
20,538.7
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
669.7
|
|
|
$
|
746.8
|
|
Current maturities of long-term debt
|
20.9
|
|
|
22.3
|
|
||
Accounts payable
|
650.3
|
|
|
592.2
|
|
||
Other accrued expenses and liabilities
|
649.6
|
|
|
678.3
|
|
||
Total current liabilities
|
1,990.5
|
|
|
2,039.6
|
|
||
Long-term debt, less current maturities
|
9,416.4
|
|
|
9,417.6
|
|
||
Other liabilities
|
1,124.0
|
|
|
1,089.8
|
|
||
Total liabilities
|
12,530.9
|
|
|
12,547.0
|
|
||
Commitments and contingencies
|
|
|
|
||||
CBI stockholders’ equity:
|
|
|
|
||||
Class A Common Stock, $.01 par value – Authorized, 322,000,000 shares; Issued, 258,940,446 shares and 258,718,356 shares, respectively
|
2.6
|
|
|
2.6
|
|
||
Class B Convertible Common Stock, $.01 par value – Authorized, 30,000,000 shares; Issued, 28,330,243
shares and 28,335,387 shares, respectively
|
0.3
|
|
|
0.3
|
|
||
Additional paid-in capital
|
2,834.8
|
|
|
2,825.3
|
|
||
Retained earnings
|
12,002.4
|
|
|
9,157.2
|
|
||
Accumulated other comprehensive loss
|
(378.6
|
)
|
|
(202.9
|
)
|
||
|
14,461.5
|
|
|
11,782.5
|
|
||
Less: Treasury stock –
|
|
|
|
||||
Class A Common Stock, at cost, 91,111,003 shares and 90,743,239 shares, respectively
|
(3,902.9
|
)
|
|
(3,805.2
|
)
|
||
Class B Convertible Common Stock, at cost, 5,005,800 shares
|
(2.2
|
)
|
|
(2.2
|
)
|
||
|
(3,905.1
|
)
|
|
(3,807.4
|
)
|
||
Total CBI stockholders’ equity
|
10,556.4
|
|
|
7,975.1
|
|
||
Noncontrolling interests
|
9.4
|
|
|
16.6
|
|
||
Total stockholders’ equity
|
10,565.8
|
|
|
7,991.7
|
|
||
Total liabilities and stockholders’ equity
|
$
|
23,096.7
|
|
|
$
|
20,538.7
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions, except per share data)
(unaudited)
|
|||||||
|
For the Three Months Ended May 31,
|
||||||
|
2018
|
|
2017
|
||||
Sales
|
$
|
2,230.0
|
|
|
$
|
2,108.3
|
|
Excise taxes
|
(182.9
|
)
|
|
(179.8
|
)
|
||
Net sales
|
2,047.1
|
|
|
1,928.5
|
|
||
Cost of product sold
|
(998.5
|
)
|
|
(940.2
|
)
|
||
Gross profit
|
1,048.6
|
|
|
988.3
|
|
||
Selling, general and administrative expenses
|
(423.2
|
)
|
|
(427.2
|
)
|
||
Operating income
|
625.4
|
|
|
561.1
|
|
||
Income from unconsolidated investments
|
364.4
|
|
|
0.4
|
|
||
Interest expense
|
(87.8
|
)
|
|
(82.4
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
(6.7
|
)
|
||
Income before income taxes
|
902.0
|
|
|
472.4
|
|
||
Provision for income taxes
|
(155.7
|
)
|
|
(71.4
|
)
|
||
Net income
|
746.3
|
|
|
401.0
|
|
||
Net income attributable to noncontrolling interests
|
(2.5
|
)
|
|
(2.5
|
)
|
||
Net income attributable to CBI
|
$
|
743.8
|
|
|
$
|
398.5
|
|
|
|
|
|
||||
Comprehensive income
|
$
|
560.9
|
|
|
$
|
600.5
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
7.2
|
|
|
(14.5
|
)
|
||
Comprehensive income attributable to CBI
|
$
|
568.1
|
|
|
$
|
586.0
|
|
|
|
|
|
||||
Net income per common share attributable to CBI:
|
|
|
|
||||
Basic – Class A Common Stock
|
$
|
3.93
|
|
|
$
|
2.07
|
|
Basic – Class B Convertible Common Stock
|
$
|
3.57
|
|
|
$
|
1.88
|
|
|
|
|
|
||||
Diluted – Class A Common Stock
|
$
|
3.77
|
|
|
$
|
1.98
|
|
Diluted – Class B Convertible Common Stock
|
$
|
3.48
|
|
|
$
|
1.83
|
|
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
||||
Basic – Class A Common Stock
|
168.063
|
|
|
171.555
|
|
||
Basic – Class B Convertible Common Stock
|
23.326
|
|
|
23.344
|
|
||
|
|
|
|
||||
Diluted – Class A Common Stock
|
197.060
|
|
|
201.030
|
|
||
Diluted – Class B Convertible Common Stock
|
23.326
|
|
|
23.344
|
|
||
|
|
|
|
||||
Cash dividends declared per common share:
|
|
|
|
||||
Class A Common Stock
|
$
|
0.74
|
|
|
$
|
0.52
|
|
Class B Convertible Common Stock
|
$
|
0.67
|
|
|
$
|
0.47
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
|||||||
|
For the Three Months Ended May 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
746.3
|
|
|
$
|
401.0
|
|
|
|
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Unrealized gain on equity securities
|
(258.3
|
)
|
|
—
|
|
||
Gain on sale of unconsolidated investment
|
(101.4
|
)
|
|
—
|
|
||
Deferred tax provision (benefit)
|
116.2
|
|
|
(11.2
|
)
|
||
Depreciation
|
84.2
|
|
|
70.1
|
|
||
Stock-based compensation
|
17.3
|
|
|
15.1
|
|
||
Loss on extinguishment of debt and amortization of debt issuance costs
|
3.0
|
|
|
9.8
|
|
||
Impairment and amortization of intangible assets
|
1.5
|
|
|
88.2
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(49.3
|
)
|
|
(96.8
|
)
|
||
Inventories
|
10.6
|
|
|
18.4
|
|
||
Prepaid expenses and other current assets
|
(54.1
|
)
|
|
(36.0
|
)
|
||
Accounts payable
|
14.9
|
|
|
(13.6
|
)
|
||
Deferred revenue
|
47.3
|
|
|
42.4
|
|
||
Other accrued expenses and liabilities
|
(77.7
|
)
|
|
(123.7
|
)
|
||
Other
|
3.5
|
|
|
17.9
|
|
||
Total adjustments
|
(242.3
|
)
|
|
(19.4
|
)
|
||
Net cash provided by operating activities
|
504.0
|
|
|
381.6
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(168.2
|
)
|
|
(217.1
|
)
|
||
Proceeds from sale of unconsolidated investment
|
110.2
|
|
|
—
|
|
||
Other investing activities
|
4.5
|
|
|
(4.2
|
)
|
||
Net cash used in investing activities
|
(53.5
|
)
|
|
(221.3
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Dividends paid
|
(140.5
|
)
|
|
(100.5
|
)
|
||
Purchases of treasury stock
|
(100.0
|
)
|
|
—
|
|
||
Net proceeds from (repayments of) short-term borrowings
|
(77.5
|
)
|
|
381.3
|
|
||
Payments of minimum tax withholdings on stock-based payment awards
|
(12.9
|
)
|
|
(22.3
|
)
|
||
Principal payments of long-term debt
|
(5.9
|
)
|
|
(1,913.4
|
)
|
||
Proceeds from shares issued under equity compensation plans
|
7.6
|
|
|
16.6
|
|
||
Payments of debt issuance costs
|
—
|
|
|
(11.8
|
)
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,508.5
|
|
||
Net cash used in financing activities
|
(329.2
|
)
|
|
(141.6
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(1.6
|
)
|
|
3.0
|
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
119.7
|
|
|
21.7
|
|
||
Cash and cash equivalents, beginning of period
|
90.3
|
|
|
177.4
|
|
||
Cash and cash equivalents, end of period
|
$
|
210.0
|
|
|
$
|
199.1
|
|
|
|
|
|
||||
Supplemental disclosures of noncash investing and financing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
138.5
|
|
|
$
|
174.0
|
|
|
As
Previously
Reported
|
|
Revenue
Recognition
Adjustments
|
|
As
Adjusted
|
||||||
(in millions, except per share data
)
|
|
|
|
|
|
||||||
Consolidated Balance Sheet at February 28, 2018
|
|
|
|
|
|
||||||
Other accrued expenses and liabilities
|
$
|
583.4
|
|
|
$
|
94.9
|
|
|
$
|
678.3
|
|
Total current liabilities
|
$
|
1,944.7
|
|
|
$
|
94.9
|
|
|
$
|
2,039.6
|
|
Other liabilities (including deferred income taxes – as previously reported, $718.3 million; as adjusted, $694.4 million)
|
$
|
1,113.7
|
|
|
$
|
(23.9
|
)
|
|
$
|
1,089.8
|
|
Total liabilities
|
$
|
12,476.0
|
|
|
$
|
71.0
|
|
|
$
|
12,547.0
|
|
Retained earnings
|
$
|
9,228.2
|
|
|
$
|
(71.0
|
)
|
|
$
|
9,157.2
|
|
Total stockholders’ equity
|
$
|
8,062.7
|
|
|
$
|
(71.0
|
)
|
|
$
|
7,991.7
|
|
|
|
|
|
|
|
|
As
Previously
Reported
|
|
Revenue
Recognition
Adjustments
|
|
As
Adjusted
|
||||||
(in millions, except per share data
)
|
|
|
|
|
|
||||||
Consolidated Statement of Comprehensive Income for the Three Months Ended May 31, 2017
|
|||||||||||
Sales
|
$
|
2,115.3
|
|
|
$
|
(7.0
|
)
|
|
$
|
2,108.3
|
|
Net sales
|
$
|
1,935.5
|
|
|
$
|
(7.0
|
)
|
|
$
|
1,928.5
|
|
Gross profit
|
$
|
995.3
|
|
|
$
|
(7.0
|
)
|
|
$
|
988.3
|
|
Operating income
|
$
|
568.1
|
|
|
$
|
(7.0
|
)
|
|
$
|
561.1
|
|
Income before income taxes
|
$
|
479.4
|
|
|
$
|
(7.0
|
)
|
|
$
|
472.4
|
|
Provision for income taxes
|
$
|
(74.1
|
)
|
|
$
|
2.7
|
|
|
$
|
(71.4
|
)
|
Net income
|
$
|
405.3
|
|
|
$
|
(4.3
|
)
|
|
$
|
401.0
|
|
Net income attributable to CBI
|
$
|
402.8
|
|
|
$
|
(4.3
|
)
|
|
$
|
398.5
|
|
Comprehensive income attributable to CBI
|
$
|
590.3
|
|
|
$
|
(4.3
|
)
|
|
$
|
586.0
|
|
|
|
|
|
|
|
||||||
Net income per common share attributable to CBI:
|
|
|
|
|
|
||||||
Basic – Class A Common Stock
|
$
|
2.09
|
|
|
$
|
(0.02
|
)
|
|
$
|
2.07
|
|
Basic – Class B Convertible Common Stock
|
$
|
1.90
|
|
|
$
|
(0.02
|
)
|
|
$
|
1.88
|
|
|
|
|
|
|
|
||||||
Diluted – Class A Common Stock
|
$
|
2.00
|
|
|
$
|
(0.02
|
)
|
|
$
|
1.98
|
|
Diluted – Class B Convertible Common Stock
|
$
|
1.85
|
|
|
$
|
(0.02
|
)
|
|
$
|
1.83
|
|
|
May 31,
2018 |
|
February 28,
2018 |
||||
(in millions
)
|
|
|
|
||||
Raw materials and supplies
|
$
|
162.4
|
|
|
$
|
160.8
|
|
In-process inventories
|
1,318.4
|
|
|
1,382.8
|
|
||
Finished case goods
|
587.6
|
|
|
540.4
|
|
||
|
$
|
2,068.4
|
|
|
$
|
2,084.0
|
|
|
May 31,
2018 |
|
February 28,
2018 |
||||
(in millions
)
|
|
|
|
||||
Derivative instruments designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
1,644.2
|
|
|
$
|
1,465.4
|
|
|
|
|
|
||||
Derivative instruments not designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
428.9
|
|
|
$
|
440.6
|
|
Commodity derivative contracts
|
$
|
215.1
|
|
|
$
|
177.5
|
|
Derivative Instruments in
Designated Cash Flow
Hedging Relationships
|
|
Net
Gain (Loss)
Recognized
in OCI
|
|
Location of Net Gain (Loss)
Reclassified from
AOCI to Income
|
|
Net
Gain (Loss)
Reclassified
from AOCI
to Income
|
||||
(in millions)
|
|
|
|
|
|
|
||||
For the Three Months Ended May 31, 2018
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(41.9
|
)
|
|
Sales
|
|
$
|
0.1
|
|
|
|
|
|
Cost of product sold
|
|
4.1
|
|
|||
|
|
$
|
(41.9
|
)
|
|
|
|
$
|
4.2
|
|
|
|
|
|
|
|
|
||||
For the Three Months Ended May 31, 2017
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
38.6
|
|
|
Sales
|
|
$
|
0.3
|
|
|
|
|
|
Cost of product sold
|
|
(2.7
|
)
|
|||
Interest rate swap contracts
|
|
(2.0
|
)
|
|
Interest expense
|
|
(0.1
|
)
|
||
|
|
$
|
36.6
|
|
|
|
|
$
|
(2.5
|
)
|
Derivative Instruments Not
Designated as Hedging Instruments
|
|
|
|
Location of Net Gain (Loss)
Recognized in Income
|
|
Net
Gain (Loss)
Recognized
in Income
|
||
(in millions)
|
|
|
|
|
|
|
||
For the Three Months Ended May 31, 2018
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
15.4
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(1.9
|
)
|
|
|
|
|
|
|
|
$
|
13.5
|
|
|
|
|
|
|
|
|
||
For the Three Months Ended May 31, 2017
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
(3.1
|
)
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
4.7
|
|
|
|
|
|
|
|
|
$
|
1.6
|
|
•
|
Level 1 inputs are quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as interest rates and yield curves that are observable for the asset and liability, either directly or indirectly; and
|
•
|
Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
|
Expected life
(1)
|
1.9 years
|
|
Expected volatility
(2)
|
77.9
|
%
|
Risk-free interest rate
(3)
|
1.9
|
%
|
Expected dividend yield
(4)
|
0.0
|
%
|
(1)
|
Based on the expiration date of the warrants.
|
(2)
|
Based on historical volatility levels of the underlying equity security.
|
(3)
|
Based on the implied yield currently available on Canadian Treasury zero coupon issues with a remaining term equal to the expected life.
|
(4)
|
Based on historical dividend levels.
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
May 31, 2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
13.4
|
|
|
$
|
—
|
|
|
$
|
13.4
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
20.2
|
|
|
$
|
—
|
|
|
$
|
20.2
|
|
Equity securities
|
$
|
535.2
|
|
|
$
|
378.7
|
|
|
$
|
—
|
|
|
$
|
913.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
64.7
|
|
|
$
|
—
|
|
|
$
|
64.7
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
|
|
|
|
|
|
|
||||||||
February 28, 2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
40.3
|
|
|
$
|
—
|
|
|
$
|
40.3
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
9.1
|
|
|
$
|
—
|
|
|
$
|
9.1
|
|
Equity securities
|
$
|
402.4
|
|
|
$
|
253.2
|
|
|
$
|
—
|
|
|
$
|
655.6
|
|
Debt securities, AFS
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.6
|
|
|
$
|
16.6
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
19.9
|
|
|
$
|
—
|
|
|
$
|
19.9
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
5.6
|
|
|
$
|
—
|
|
|
$
|
5.6
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total Losses
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
For the Three Months Ended May 31, 2017
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136.0
|
|
|
$
|
86.8
|
|
|
Beer
|
|
Wine and Spirits
|
|
Consolidated
|
||||||
(in millions)
|
|
|
|
|
|
||||||
Balance, February 28, 2017
|
$
|
5,053.0
|
|
|
$
|
2,867.5
|
|
|
$
|
7,920.5
|
|
Purchase accounting allocations
(1)
|
63.9
|
|
|
56.2
|
|
|
120.1
|
|
|||
Foreign currency translation adjustments
|
40.7
|
|
|
1.8
|
|
|
42.5
|
|
|||
Balance, February 28, 2018
|
5,157.6
|
|
|
2,925.5
|
|
|
8,083.1
|
|
|||
Purchase accounting allocations
|
—
|
|
|
0.5
|
|
|
0.5
|
|
|||
Foreign currency translation adjustments
|
(29.3
|
)
|
|
(3.8
|
)
|
|
(33.1
|
)
|
|||
Balance, May 31, 2018
|
$
|
5,128.3
|
|
|
$
|
2,922.2
|
|
|
$
|
8,050.5
|
|
(1)
|
Purchase accounting allocations associated primarily with the acquisitions of a brewery operation business in Obregon, Sonora, Mexico (the “Obregon Brewery”) (Beer) (
$13.8 million
) and the Schrader Cellars, LLC business (Wine and Spirits), and preliminary purchase accounting allocations associated with the acquisition of the Funky Buddha Brewery LLC business (Beer).
|
|
May 31, 2018
|
|
February 28, 2018
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
$
|
89.8
|
|
|
$
|
42.9
|
|
|
$
|
89.8
|
|
|
$
|
44.2
|
|
Other
|
20.3
|
|
|
1.2
|
|
|
20.3
|
|
|
1.4
|
|
||||
Total
|
$
|
110.1
|
|
|
44.1
|
|
|
$
|
110.1
|
|
|
45.6
|
|
||
|
|
|
|
|
|
|
|
||||||||
Nonamortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
|
|
3,257.5
|
|
|
|
|
3,259.2
|
|
||||||
Total intangible assets
|
|
|
$
|
3,301.6
|
|
|
|
|
$
|
3,304.8
|
|
|
May 31,
2018 |
|
February 28,
2018 |
||||
(in millions
)
|
|
|
|
||||
Deferred income taxes (see Note 2)
|
$
|
2,194.4
|
|
|
$
|
—
|
|
Investments in equity securities
|
913.9
|
|
|
655.6
|
|
||
Investments in equity method investees
|
127.2
|
|
|
121.5
|
|
||
Other
|
88.5
|
|
|
110.0
|
|
||
|
$
|
3,324.0
|
|
|
$
|
887.1
|
|
|
May 31, 2018
|
|
February 28,
2018 |
||||||||||||
|
Current
|
|
Long-term
|
|
Total
|
|
Total
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Short-term borrowings
|
|
|
|
|
|
|
|
||||||||
Senior credit facility, Revolving credit loans
|
$
|
138.0
|
|
|
|
|
|
|
|
$
|
79.0
|
|
|||
Commercial paper
|
239.7
|
|
|
|
|
|
|
|
266.9
|
|
|||||
Other
|
292.0
|
|
|
|
|
|
|
|
400.9
|
|
|||||
|
$
|
669.7
|
|
|
|
|
|
|
|
|
$
|
746.8
|
|
||
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
|
|
|
|
|
|
||||||||
Senior credit facility, Term loans
|
$
|
5.0
|
|
|
$
|
491.4
|
|
|
$
|
496.4
|
|
|
$
|
497.7
|
|
Senior notes
|
—
|
|
|
8,677.5
|
|
|
8,677.5
|
|
|
8,674.2
|
|
||||
Other
|
15.9
|
|
|
247.5
|
|
|
263.4
|
|
|
268.0
|
|
||||
|
$
|
20.9
|
|
|
$
|
9,416.4
|
|
|
$
|
9,437.3
|
|
|
$
|
9,439.9
|
|
|
Amount
|
|
Maturity
|
||
(in millions)
|
|
|
|
||
Revolving Credit Facility
(1) (2)
|
$
|
1,500.0
|
|
|
July 14, 2022
|
U.S. Term A-1 Facility
(1) (3)
|
500.0
|
|
|
July 14, 2024
|
|
|
$
|
2,000.0
|
|
|
|
(1)
|
Contractual interest rate varies based on our debt rating (as defined in the 2017 Credit Agreement) and is a function of LIBOR plus a margin, or the base rate plus a margin.
|
(2)
|
Consists of a
$190.0 million
U.S. Revolving Credit Facility and a
$1,310.0 million
European Revolving Credit Facility. We are the borrower under the
$1,500.0 million
Revolving Credit Facility (inclusive of the U.S. Revolving Credit Facility and the European Revolving Credit Facility). CIH and/or CB International are additional borrowers under the European Revolving Credit Facility. Includes two sub-facilities for letters of credit of up to
$200.0 million
in the aggregate.
|
(3)
|
We are the borrower under the U.S. Term A-1 loan facility.
|
|
Revolving
Credit
Facility
|
|
U.S.
Term A-1
Facility
(1)
|
||||
(in millions)
|
|
|
|
||||
Outstanding borrowings
|
$
|
138.0
|
|
|
$
|
496.4
|
|
Interest rate
|
3.1
|
%
|
|
3.4
|
%
|
||
LIBOR margin
|
1.13
|
%
|
|
1.50
|
%
|
||
Outstanding letters of credit
|
$
|
10.9
|
|
|
|
||
Remaining borrowing capacity
(2)
|
$
|
1,111.1
|
|
|
|
(1)
|
Outstanding term loan facility borrowings are net of unamortized debt issuance costs.
|
(2)
|
Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2017 Credit Agreement and outstanding borrowings under our commercial paper program of
$240.0 million
(excluding unamortized discount) (see “Commercial paper program”).
|
|
Outstanding
Borrowings
|
|
Weighted
Average
Interest Rate
|
|
Remaining
Borrowing
Capacity
|
|||||
(in millions)
|
|
|
|
|
|
|||||
CBI Facility
|
$
|
207.6
|
|
|
2.8
|
%
|
|
$
|
52.4
|
|
Crown Facility
|
$
|
68.7
|
|
|
2.8
|
%
|
|
$
|
181.3
|
|
|
|
|
Class A Common Shares
|
||||||
|
Repurchase Authorization
|
|
Dollar Value of Shares Repurchased
|
|
Number of Shares Repurchased
|
||||
(in millions, except share data)
|
|
|
|
|
|
||||
2018 Authorization
|
$
|
3,000.0
|
|
|
$
|
591.6
|
|
|
2,730,375
|
|
For the Three Months Ended
|
||||||||||||||
|
May 31, 2018
|
|
May 31, 2017
|
||||||||||||
|
Common Stock
|
|
Common Stock
|
||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||
(in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||
Net income attributable to CBI allocated – basic
|
$
|
660.6
|
|
|
$
|
83.2
|
|
|
$
|
354.7
|
|
|
$
|
43.8
|
|
Conversion of Class B common shares into Class A common shares
|
83.2
|
|
|
—
|
|
|
43.8
|
|
|
—
|
|
||||
Effect of stock-based awards on allocated net income
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
(1.0
|
)
|
||||
Net income attributable to CBI allocated – diluted
|
$
|
743.8
|
|
|
$
|
81.3
|
|
|
$
|
398.5
|
|
|
$
|
42.8
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic
|
168.063
|
|
|
23.326
|
|
|
171.555
|
|
|
23.344
|
|
||||
Conversion of Class B common shares into Class A common shares
|
23.326
|
|
|
—
|
|
|
23.344
|
|
|
—
|
|
||||
Stock-based awards, primarily stock options
|
5.671
|
|
|
—
|
|
|
6.131
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
197.060
|
|
|
23.326
|
|
|
201.030
|
|
|
23.344
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI – basic
|
$
|
3.93
|
|
|
$
|
3.57
|
|
|
$
|
2.07
|
|
|
$
|
1.88
|
|
Net income per common share attributable to CBI – diluted
|
$
|
3.77
|
|
|
$
|
3.48
|
|
|
$
|
1.98
|
|
|
$
|
1.83
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Three Months Ended May 31, 2018
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
743.8
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(132.3
|
)
|
|
$
|
—
|
|
|
(132.3
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(132.3
|
)
|
|
—
|
|
|
(132.3
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(58.2
|
)
|
|
16.3
|
|
|
(41.9
|
)
|
|||
Reclassification adjustments
|
(5.8
|
)
|
|
1.6
|
|
|
(4.2
|
)
|
|||
Net loss recognized in other comprehensive loss
|
(64.0
|
)
|
|
17.9
|
|
|
(46.1
|
)
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.4
|
)
|
|
0.1
|
|
|
(0.3
|
)
|
|||
Reclassification adjustments
|
1.9
|
|
|
0.9
|
|
|
2.8
|
|
|||
Net gain recognized in other comprehensive loss
|
1.5
|
|
|
1.0
|
|
|
2.5
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reclassification adjustments
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Net gain recognized in other comprehensive loss
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(194.5
|
)
|
|
$
|
18.8
|
|
|
(175.7
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
568.1
|
|
||||
|
|
|
|
|
|
||||||
For the Three Months Ended May 31, 2017
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
398.5
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net gains
|
$
|
148.7
|
|
|
$
|
(0.2
|
)
|
|
148.5
|
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
148.7
|
|
|
(0.2
|
)
|
|
148.5
|
|
|||
Unrealized gain on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative gains
|
51.9
|
|
|
(15.3
|
)
|
|
36.6
|
|
|||
Reclassification adjustments
|
3.8
|
|
|
(1.2
|
)
|
|
2.6
|
|
|||
Net gain recognized in other comprehensive income
|
55.7
|
|
|
(16.5
|
)
|
|
39.2
|
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive income
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reclassification adjustments
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Net gain recognized in other comprehensive income
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Other comprehensive income attributable to CBI
|
$
|
204.2
|
|
|
$
|
(16.7
|
)
|
|
187.5
|
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
586.0
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
Net
Unrealized
Gains (Losses)
on Derivative
Instruments
|
|
Net
Unrealized
Losses
on AFS Debt
Securities
|
|
Pension/
Postretirement
Adjustments
|
|
Accumulated
Other
Comprehensive
Loss
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, February 28, 2018
|
$
|
(212.3
|
)
|
|
$
|
14.5
|
|
|
$
|
(2.5
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(202.9
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive loss before reclassification adjustments
|
(132.3
|
)
|
|
(41.9
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(174.5
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(4.2
|
)
|
|
2.8
|
|
|
0.2
|
|
|
(1.2
|
)
|
|||||
Other comprehensive income (loss)
|
(132.3
|
)
|
|
(46.1
|
)
|
|
2.5
|
|
|
0.2
|
|
|
(175.7
|
)
|
|||||
Balance, May 31, 2018
|
$
|
(344.6
|
)
|
|
$
|
(31.6
|
)
|
|
$
|
—
|
|
|
$
|
(2.4
|
)
|
|
$
|
(378.6
|
)
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at May 31, 2018
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
5.3
|
|
|
$
|
2.8
|
|
|
$
|
201.9
|
|
|
$
|
—
|
|
|
$
|
210.0
|
|
Accounts receivable
|
0.7
|
|
|
20.4
|
|
|
806.8
|
|
|
—
|
|
|
827.9
|
|
|||||
Inventories
|
188.9
|
|
|
1,514.6
|
|
|
575.5
|
|
|
(210.6
|
)
|
|
2,068.4
|
|
|||||
Intercompany receivable
|
27,854.8
|
|
|
37,920.3
|
|
|
19,261.5
|
|
|
(85,036.6
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
98.8
|
|
|
71.0
|
|
|
378.5
|
|
|
(49.8
|
)
|
|
498.5
|
|
|||||
Total current assets
|
28,148.5
|
|
|
39,529.1
|
|
|
21,224.2
|
|
|
(85,297.0
|
)
|
|
3,604.8
|
|
|||||
Property, plant and equipment
|
81.3
|
|
|
790.8
|
|
|
3,943.7
|
|
|
—
|
|
|
4,815.8
|
|
|||||
Investments in subsidiaries
|
23,892.2
|
|
|
447.7
|
|
|
6,017.9
|
|
|
(30,357.8
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,185.5
|
|
|
1,865.0
|
|
|
—
|
|
|
8,050.5
|
|
|||||
Intangible assets
|
—
|
|
|
716.9
|
|
|
2,584.7
|
|
|
—
|
|
|
3,301.6
|
|
|||||
Intercompany notes receivable
|
6,082.7
|
|
|
2,271.0
|
|
|
—
|
|
|
(8,353.7
|
)
|
|
—
|
|
|||||
Other assets
|
37.3
|
|
|
3.3
|
|
|
3,304.3
|
|
|
(20.9
|
)
|
|
3,324.0
|
|
|||||
Total assets
|
$
|
58,242.0
|
|
|
$
|
49,944.3
|
|
|
$
|
38,939.8
|
|
|
$
|
(124,029.4
|
)
|
|
$
|
23,096.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
239.7
|
|
|
$
|
—
|
|
|
$
|
430.0
|
|
|
$
|
—
|
|
|
$
|
669.7
|
|
Current maturities of long-term debt
|
7.1
|
|
|
13.6
|
|
|
0.2
|
|
|
—
|
|
|
20.9
|
|
|||||
Accounts payable
|
55.2
|
|
|
106.0
|
|
|
489.1
|
|
|
—
|
|
|
650.3
|
|
|||||
Intercompany payable
|
37,872.8
|
|
|
29,665.1
|
|
|
17,498.7
|
|
|
(85,036.6
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
312.5
|
|
|
285.8
|
|
|
138.7
|
|
|
(87.4
|
)
|
|
649.6
|
|
|||||
Total current liabilities
|
38,487.3
|
|
|
30,070.5
|
|
|
18,556.7
|
|
|
(85,124.0
|
)
|
|
1,990.5
|
|
|||||
Long-term debt, less current maturities
|
9,168.9
|
|
|
16.6
|
|
|
230.9
|
|
|
—
|
|
|
9,416.4
|
|
|||||
Intercompany notes payable
|
—
|
|
|
4,886.6
|
|
|
3,467.1
|
|
|
(8,353.7
|
)
|
|
—
|
|
|||||
Other liabilities
|
29.4
|
|
|
513.1
|
|
|
602.4
|
|
|
(20.9
|
)
|
|
1,124.0
|
|
|||||
Total liabilities
|
47,685.6
|
|
|
35,486.8
|
|
|
22,857.1
|
|
|
(93,498.6
|
)
|
|
12,530.9
|
|
|||||
Total CBI stockholders’ equity
|
10,556.4
|
|
|
14,457.5
|
|
|
16,073.3
|
|
|
(30,530.8
|
)
|
|
10,556.4
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
9.4
|
|
|||||
Total stockholders’ equity
|
10,556.4
|
|
|
14,457.5
|
|
|
16,082.7
|
|
|
(30,530.8
|
)
|
|
10,565.8
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
58,242.0
|
|
|
$
|
49,944.3
|
|
|
$
|
38,939.8
|
|
|
$
|
(124,029.4
|
)
|
|
$
|
23,096.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at February 28, 2018
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
4.6
|
|
|
$
|
4.4
|
|
|
$
|
81.3
|
|
|
$
|
—
|
|
|
$
|
90.3
|
|
Accounts receivable
|
2.0
|
|
|
12.6
|
|
|
761.6
|
|
|
—
|
|
|
776.2
|
|
|||||
Inventories
|
184.3
|
|
|
1,537.5
|
|
|
546.6
|
|
|
(184.4
|
)
|
|
2,084.0
|
|
|||||
Intercompany receivable
|
27,680.0
|
|
|
37,937.5
|
|
|
18,940.8
|
|
|
(84,558.3
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
138.4
|
|
|
77.7
|
|
|
311.0
|
|
|
(3.6
|
)
|
|
523.5
|
|
|||||
Total current assets
|
28,009.3
|
|
|
39,569.7
|
|
|
20,641.3
|
|
|
(84,746.3
|
)
|
|
3,474.0
|
|
|||||
Property, plant and equipment
|
76.2
|
|
|
775.7
|
|
|
3,937.8
|
|
|
—
|
|
|
4,789.7
|
|
|||||
Investments in subsidiaries
|
20,948.7
|
|
|
442.0
|
|
|
5,876.9
|
|
|
(27,267.6
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,185.5
|
|
|
1,897.6
|
|
|
—
|
|
|
8,083.1
|
|
|||||
Intangible assets
|
—
|
|
|
718.2
|
|
|
2,586.6
|
|
|
—
|
|
|
3,304.8
|
|
|||||
Intercompany notes receivable
|
6,236.4
|
|
|
2,435.4
|
|
|
—
|
|
|
(8,671.8
|
)
|
|
—
|
|
|||||
Other assets
|
33.1
|
|
|
4.7
|
|
|
866.7
|
|
|
(17.4
|
)
|
|
887.1
|
|
|||||
Total assets
|
$
|
55,303.7
|
|
|
$
|
50,131.2
|
|
|
$
|
35,806.9
|
|
|
$
|
(120,703.1
|
)
|
|
$
|
20,538.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
266.9
|
|
|
$
|
—
|
|
|
$
|
479.9
|
|
|
$
|
—
|
|
|
$
|
746.8
|
|
Current maturities of long-term debt
|
7.1
|
|
|
15.0
|
|
|
0.2
|
|
|
—
|
|
|
22.3
|
|
|||||
Accounts payable
|
63.4
|
|
|
128.3
|
|
|
400.5
|
|
|
—
|
|
|
592.2
|
|
|||||
Intercompany payable
|
37,408.2
|
|
|
30,029.7
|
|
|
17,120.4
|
|
|
(84,558.3
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
356.2
|
|
|
199.3
|
|
|
150.5
|
|
|
(27.7
|
)
|
|
678.3
|
|
|||||
Total current liabilities
|
38,101.8
|
|
|
30,372.3
|
|
|
18,151.5
|
|
|
(84,586.0
|
)
|
|
2,039.6
|
|
|||||
Long-term debt, less current maturities
|
9,166.9
|
|
|
9.1
|
|
|
241.6
|
|
|
—
|
|
|
9,417.6
|
|
|||||
Intercompany notes payable
|
—
|
|
|
5,029.2
|
|
|
3,642.6
|
|
|
(8,671.8
|
)
|
|
—
|
|
|||||
Other liabilities
|
59.9
|
|
|
493.5
|
|
|
553.8
|
|
|
(17.4
|
)
|
|
1,089.8
|
|
|||||
Total liabilities
|
47,328.6
|
|
|
35,904.1
|
|
|
22,589.5
|
|
|
(93,275.2
|
)
|
|
12,547.0
|
|
|||||
Total CBI stockholders’ equity
|
7,975.1
|
|
|
14,227.1
|
|
|
13,200.8
|
|
|
(27,427.9
|
)
|
|
7,975.1
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
16.6
|
|
|
—
|
|
|
16.6
|
|
|||||
Total stockholders’ equity
|
7,975.1
|
|
|
14,227.1
|
|
|
13,217.4
|
|
|
(27,427.9
|
)
|
|
7,991.7
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
55,303.7
|
|
|
$
|
50,131.2
|
|
|
$
|
35,806.9
|
|
|
$
|
(120,703.1
|
)
|
|
$
|
20,538.7
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended May 31, 2018
|
|||||||||||||||||||
Sales
|
$
|
682.6
|
|
|
$
|
1,881.2
|
|
|
$
|
1,007.6
|
|
|
$
|
(1,341.4
|
)
|
|
$
|
2,230.0
|
|
Excise taxes
|
(78.8
|
)
|
|
(100.9
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(182.9
|
)
|
|||||
Net sales
|
603.8
|
|
|
1,780.3
|
|
|
1,004.4
|
|
|
(1,341.4
|
)
|
|
2,047.1
|
|
|||||
Cost of product sold
|
(486.8
|
)
|
|
(1,322.1
|
)
|
|
(498.3
|
)
|
|
1,308.7
|
|
|
(998.5
|
)
|
|||||
Gross profit
|
117.0
|
|
|
458.2
|
|
|
506.1
|
|
|
(32.7
|
)
|
|
1,048.6
|
|
|||||
Selling, general and administrative expenses
|
(141.3
|
)
|
|
(238.7
|
)
|
|
(49.5
|
)
|
|
6.3
|
|
|
(423.2
|
)
|
|||||
Operating income (loss)
|
(24.3
|
)
|
|
219.5
|
|
|
456.6
|
|
|
(26.4
|
)
|
|
625.4
|
|
|||||
Equity in earnings (losses) of equity method investees and subsidiaries
|
910.6
|
|
|
(12.5
|
)
|
|
147.2
|
|
|
(1,040.6
|
)
|
|
4.7
|
|
|||||
Unrealized gain on equity securities
|
—
|
|
|
—
|
|
|
258.3
|
|
|
—
|
|
|
258.3
|
|
|||||
Net gain on sale of unconsolidated investment
|
—
|
|
|
—
|
|
|
101.4
|
|
|
—
|
|
|
101.4
|
|
|||||
Interest income
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|||||
Intercompany interest income
|
67.6
|
|
|
158.8
|
|
|
0.9
|
|
|
(227.3
|
)
|
|
—
|
|
|||||
Interest expense
|
(80.3
|
)
|
|
(0.3
|
)
|
|
(7.6
|
)
|
|
—
|
|
|
(88.2
|
)
|
|||||
Intercompany interest expense
|
(133.6
|
)
|
|
(49.5
|
)
|
|
(44.2
|
)
|
|
227.3
|
|
|
—
|
|
|||||
Income before income taxes
|
740.0
|
|
|
316.0
|
|
|
913.0
|
|
|
(1,067.0
|
)
|
|
902.0
|
|
|||||
(Provision for) benefit from income taxes
|
3.8
|
|
|
(76.9
|
)
|
|
(96.1
|
)
|
|
13.5
|
|
|
(155.7
|
)
|
|||||
Net income
|
743.8
|
|
|
239.1
|
|
|
816.9
|
|
|
(1,053.5
|
)
|
|
746.3
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
|||||
Net income attributable to CBI
|
$
|
743.8
|
|
|
$
|
239.1
|
|
|
$
|
814.4
|
|
|
$
|
(1,053.5
|
)
|
|
$
|
743.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
568.1
|
|
|
$
|
238.5
|
|
|
$
|
638.2
|
|
|
$
|
(876.7
|
)
|
|
$
|
568.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended May 31, 2017
|
|||||||||||||||||||
Sales
|
$
|
694.9
|
|
|
$
|
1,750.1
|
|
|
$
|
903.3
|
|
|
$
|
(1,240.0
|
)
|
|
$
|
2,108.3
|
|
Excise taxes
|
(83.6
|
)
|
|
(93.4
|
)
|
|
(2.8
|
)
|
|
—
|
|
|
(179.8
|
)
|
|||||
Net sales
|
611.3
|
|
|
1,656.7
|
|
|
900.5
|
|
|
(1,240.0
|
)
|
|
1,928.5
|
|
|||||
Cost of product sold
|
(477.2
|
)
|
|
(1,214.6
|
)
|
|
(470.3
|
)
|
|
1,221.9
|
|
|
(940.2
|
)
|
|||||
Gross profit
|
134.1
|
|
|
442.1
|
|
|
430.2
|
|
|
(18.1
|
)
|
|
988.3
|
|
|||||
Selling, general and administrative expenses
|
(105.0
|
)
|
|
(281.5
|
)
|
|
(43.5
|
)
|
|
2.8
|
|
|
(427.2
|
)
|
|||||
Operating income
|
29.1
|
|
|
160.6
|
|
|
386.7
|
|
|
(15.3
|
)
|
|
561.1
|
|
|||||
Equity in earnings (losses) of equity method investees and subsidiaries
|
431.6
|
|
|
(11.5
|
)
|
|
114.3
|
|
|
(534.0
|
)
|
|
0.4
|
|
|||||
Interest income
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Intercompany interest income
|
57.9
|
|
|
117.4
|
|
|
1.2
|
|
|
(176.5
|
)
|
|
—
|
|
|||||
Interest expense
|
(65.2
|
)
|
|
(0.3
|
)
|
|
(17.0
|
)
|
|
—
|
|
|
(82.5
|
)
|
|||||
Intercompany interest expense
|
(93.3
|
)
|
|
(49.3
|
)
|
|
(33.9
|
)
|
|
176.5
|
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
(6.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|||||
Income before income taxes
|
353.4
|
|
|
216.9
|
|
|
451.4
|
|
|
(549.3
|
)
|
|
472.4
|
|
|||||
(Provision for) benefit from income taxes
|
45.1
|
|
|
(68.4
|
)
|
|
(31.9
|
)
|
|
(16.2
|
)
|
|
(71.4
|
)
|
|||||
Net income
|
398.5
|
|
|
148.5
|
|
|
419.5
|
|
|
(565.5
|
)
|
|
401.0
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
|||||
Net income attributable to CBI
|
$
|
398.5
|
|
|
$
|
148.5
|
|
|
$
|
417.0
|
|
|
$
|
(565.5
|
)
|
|
$
|
398.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
586.0
|
|
|
$
|
149.4
|
|
|
$
|
605.7
|
|
|
$
|
(755.1
|
)
|
|
$
|
586.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended May 31, 2018
|
|||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(133.6
|
)
|
|
$
|
329.1
|
|
|
$
|
308.5
|
|
|
$
|
—
|
|
|
$
|
504.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(3.9
|
)
|
|
(26.8
|
)
|
|
(137.5
|
)
|
|
—
|
|
|
(168.2
|
)
|
|||||
Proceeds from sale of unconsolidated investment
|
—
|
|
|
—
|
|
|
110.2
|
|
|
—
|
|
|
110.2
|
|
|||||
Net proceeds from intercompany notes
|
265.3
|
|
|
80.5
|
|
|
1.3
|
|
|
(347.1
|
)
|
|
—
|
|
|||||
Net returns of capital from equity affiliates
|
2.1
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|||||
Other investing activities
|
0.3
|
|
|
0.5
|
|
|
3.7
|
|
|
—
|
|
|
4.5
|
|
|||||
Net cash provided by (used in) investing activities
|
263.8
|
|
|
54.2
|
|
|
(22.3
|
)
|
|
(349.2
|
)
|
|
(53.5
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid
to parent company
|
—
|
|
|
—
|
|
|
(17.0
|
)
|
|
17.0
|
|
|
—
|
|
|||||
Net contributions from equity affiliates
|
—
|
|
|
6.8
|
|
|
8.1
|
|
|
(14.9
|
)
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
132.3
|
|
|
(374.8
|
)
|
|
(104.6
|
)
|
|
347.1
|
|
|
—
|
|
|||||
Dividends paid
|
(140.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140.5
|
)
|
|||||
Purchases of treasury stock
|
(100.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.0
|
)
|
|||||
Net repayments of short-term borrowings
|
(27.7
|
)
|
|
—
|
|
|
(49.8
|
)
|
|
—
|
|
|
(77.5
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(12.3
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(12.9
|
)
|
|||||
Principal payments of long-term debt
|
(1.2
|
)
|
|
(4.6
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(5.9
|
)
|
|||||
Proceeds from shares issued under equity compensation plans
|
7.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|||||
Net cash used in financing activities
|
(129.5
|
)
|
|
(384.9
|
)
|
|
(164.0
|
)
|
|
349.2
|
|
|
(329.2
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
0.7
|
|
|
(1.6
|
)
|
|
120.6
|
|
|
—
|
|
|
119.7
|
|
|||||
Cash and cash equivalents, beginning of period
|
4.6
|
|
|
4.4
|
|
|
81.3
|
|
|
—
|
|
|
90.3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
5.3
|
|
|
$
|
2.8
|
|
|
$
|
201.9
|
|
|
$
|
—
|
|
|
$
|
210.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended May 31, 2017
|
|||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(161.0
|
)
|
|
$
|
488.9
|
|
|
$
|
53.7
|
|
|
$
|
—
|
|
|
$
|
381.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(4.8
|
)
|
|
(21.9
|
)
|
|
(190.4
|
)
|
|
—
|
|
|
(217.1
|
)
|
|||||
Net proceeds from intercompany notes
|
419.3
|
|
|
—
|
|
|
0.9
|
|
|
(420.2
|
)
|
|
—
|
|
|||||
Net investments in equity affiliates
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|
—
|
|
|
(4.2
|
)
|
|||||
Net cash provided by (used in) investing activities
|
408.7
|
|
|
(21.9
|
)
|
|
(193.7
|
)
|
|
(414.4
|
)
|
|
(221.3
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid to parent company
|
—
|
|
|
—
|
|
|
(8.0
|
)
|
|
8.0
|
|
|
—
|
|
|||||
Net contributions from equity affiliates
|
—
|
|
|
11.3
|
|
|
2.5
|
|
|
(13.8
|
)
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
(1.7
|
)
|
|
(450.9
|
)
|
|
32.4
|
|
|
420.2
|
|
|
—
|
|
|||||
Dividends paid
|
(100.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.5
|
)
|
|||||
Net proceeds from short-term borrowings
|
254.0
|
|
|
—
|
|
|
127.3
|
|
|
—
|
|
|
381.3
|
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(21.4
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(22.3
|
)
|
|||||
Principal payments of long-term debt
|
(1,876.8
|
)
|
|
(4.9
|
)
|
|
(31.7
|
)
|
|
—
|
|
|
(1,913.4
|
)
|
|||||
Proceeds from shares issued under equity compensation plans
|
16.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.6
|
|
|||||
Payments of debt issuance costs
|
(11.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.8
|
)
|
|||||
Proceeds from issuance of long-term debt
|
1,495.5
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
1,508.5
|
|
|||||
Net cash provided by (used in) financing activities
|
(224.7
|
)
|
|
(465.9
|
)
|
|
134.6
|
|
|
414.4
|
|
|
(141.6
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
and cash equivalents
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
23.0
|
|
|
1.1
|
|
|
(2.4
|
)
|
|
—
|
|
|
21.7
|
|
|||||
Cash and cash equivalents, beginning of period
|
9.6
|
|
|
5.3
|
|
|
162.5
|
|
|
—
|
|
|
177.4
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
32.6
|
|
|
$
|
6.4
|
|
|
$
|
160.1
|
|
|
$
|
—
|
|
|
$
|
199.1
|
|
|
For the Three Months Ended May 31,
|
||||||
|
2018
|
|
2017
|
||||
(in millions)
|
|
|
|
||||
Cost of product sold
|
|
|
|
||||
Net gain (loss) on undesignated commodity derivative contracts
|
$
|
15.4
|
|
|
$
|
(3.1
|
)
|
Accelerated depreciation
|
(3.4
|
)
|
|
—
|
|
||
Settlements of undesignated commodity derivative contracts
|
(1.5
|
)
|
|
2.4
|
|
||
Loss on inventory write-down
|
(1.5
|
)
|
|
—
|
|
||
Flow through of inventory step-up
|
(0.6
|
)
|
|
(7.0
|
)
|
||
Total cost of product sold
|
8.4
|
|
|
(7.7
|
)
|
||
|
|
|
|
||||
Selling, general and administrative expenses
|
|
|
|
||||
Deferred compensation
|
(16.3
|
)
|
|
—
|
|
||
Restructuring and other strategic business development costs
|
(4.3
|
)
|
|
(1.4
|
)
|
||
Impairment of intangible assets
|
—
|
|
|
(86.8
|
)
|
||
Costs associated with the sale of the Canadian wine business and related activities
|
—
|
|
|
(3.2
|
)
|
||
Transaction, integration and other acquisition-related costs
|
—
|
|
|
(1.6
|
)
|
||
Total selling, general and administrative expenses
|
(20.6
|
)
|
|
(93.0
|
)
|
||
Comparable Adjustments, Operating loss
|
$
|
(12.2
|
)
|
|
$
|
(100.7
|
)
|
|
For the Three Months Ended May 31,
|
||||||
|
2018
|
|
2017
|
||||
(in millions)
|
|
|
|
||||
Beer
|
|
|
|
||||
Net sales
|
$
|
1,375.1
|
|
|
$
|
1,239.2
|
|
Segment operating income
|
$
|
520.0
|
|
|
$
|
497.5
|
|
Long-lived tangible assets
|
$
|
3,665.2
|
|
|
$
|
3,081.1
|
|
Total assets
|
$
|
14,674.7
|
|
|
$
|
11,679.1
|
|
Capital expenditures
|
$
|
136.5
|
|
|
$
|
191.2
|
|
Depreciation and amortization
|
$
|
49.5
|
|
|
$
|
39.8
|
|
|
|
|
|
|
For the Three Months Ended May 31,
|
||||||
|
2018
|
|
2017
|
||||
(in millions)
|
|
|
|
||||
Wine and Spirits
|
|
|
|
||||
Net sales:
|
|
|
|
||||
Wine
|
$
|
591.8
|
|
|
$
|
602.1
|
|
Spirits
|
80.2
|
|
|
87.2
|
|
||
Net sales
|
$
|
672.0
|
|
|
$
|
689.3
|
|
Segment operating income
|
$
|
167.8
|
|
|
$
|
201.7
|
|
Income from unconsolidated investments
|
$
|
4.8
|
|
|
$
|
0.2
|
|
Long-lived tangible assets
|
$
|
1,065.5
|
|
|
$
|
982.2
|
|
Investments in equity method investees
|
$
|
85.0
|
|
|
$
|
77.3
|
|
Total assets
|
$
|
7,093.1
|
|
|
$
|
6,888.3
|
|
Capital expenditures
|
$
|
27.8
|
|
|
$
|
21.6
|
|
Depreciation and amortization
|
$
|
24.4
|
|
|
$
|
22.6
|
|
|
|
|
|
||||
Corporate Operations and Other
|
|
|
|
||||
Segment operating loss
|
$
|
(50.2
|
)
|
|
$
|
(37.4
|
)
|
Income (loss) from unconsolidated investments
|
$
|
(0.1
|
)
|
|
$
|
0.2
|
|
Long-lived tangible assets
|
$
|
85.1
|
|
|
$
|
123.6
|
|
Investments in equity method investees
|
$
|
42.2
|
|
|
$
|
21.3
|
|
Total assets
|
$
|
1,328.9
|
|
|
$
|
392.0
|
|
Capital expenditures
|
$
|
3.9
|
|
|
$
|
4.3
|
|
Depreciation and amortization
|
$
|
8.4
|
|
|
$
|
9.1
|
|
|
|
|
|
||||
Comparable Adjustments
|
|
|
|
||||
Operating loss
|
$
|
(12.2
|
)
|
|
$
|
(100.7
|
)
|
Income from unconsolidated investments
|
$
|
359.7
|
|
|
$
|
—
|
|
Depreciation and amortization
|
$
|
3.4
|
|
|
$
|
—
|
|
|
|
|
|
||||
Consolidated
|
|
|
|
||||
Net sales
|
$
|
2,047.1
|
|
|
$
|
1,928.5
|
|
Operating income
|
$
|
625.4
|
|
|
$
|
561.1
|
|
Income from unconsolidated investments
(1)
|
$
|
364.4
|
|
|
$
|
0.4
|
|
Long-lived tangible assets
|
$
|
4,815.8
|
|
|
$
|
4,186.9
|
|
Investments in equity method investees
|
$
|
127.2
|
|
|
$
|
98.6
|
|
Total assets
|
$
|
23,096.7
|
|
|
$
|
18,959.4
|
|
Capital expenditures
|
$
|
168.2
|
|
|
$
|
217.1
|
|
Depreciation and amortization
|
$
|
85.7
|
|
|
$
|
71.5
|
|
|
For the Three Months Ended
|
||||||
|
May 31,
2018 |
|
May 31,
2017 |
||||
(in millions)
|
|
|
|
||||
Unrealized gain on equity securities
|
$
|
258.3
|
|
|
$
|
—
|
|
Net gain on sale of unconsolidated investment
|
101.4
|
|
|
—
|
|
||
Equity in earnings from equity method investees
|
4.7
|
|
|
0.4
|
|
||
|
$
|
364.4
|
|
|
$
|
0.4
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Overview.
This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition and potential future trends.
|
•
|
Strategy.
This section provides a description of our strategy, including a discussion of latest investment activity.
|
•
|
Results of operations.
This section provides an analysis of our results of operations presented on a business segment basis. In addition, a brief description of transactions and other items that affect the comparability of the results is provided.
|
•
|
Financial liquidity and capital resources.
This section provides an analysis of our cash flows and a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments, as well as a discussion of other financing arrangements.
|
•
|
leveraging our leading position in total beverage alcohol and our scale with wholesalers and retailers to expand distribution of our product portfolio and to provide for cross promotional opportunities;
|
•
|
strengthening relationships with wholesalers and retailers by providing consumer and beverage alcohol insights;
|
•
|
investing in brand building activities;
|
•
|
positioning ourselves for success with consumer-led innovation capabilities that identify, meet and stay ahead of evolving consumer trends and market dynamics;
|
•
|
realizing operating efficiencies through expanding and enhancing production capabilities and maximizing asset utilization; and
|
•
|
developing employees to enhance performance in the marketplace.
|
•
|
Our results of operations benefited primarily from continued improvements within the Beer segment and an unrealized gain from the changes in fair value of our investments in Canopy Growth Corporation and a net gain on the sale of the Accolade Wine Investment.
|
•
|
Net sales
increased
6%
primarily due to an increase in Beer net sales driven predominantly by volume growth within our Mexican beer portfolio, partially offset by a decrease in Wine and Spirits net sales due largely to unfavorable shipment volumes.
|
•
|
Operating income
increased
11%
largely
due to the overlap of an impairment of intangible assets for First Quarter 2018. Consolidated operating income growth was tempered by planned increases in marketing spend, higher cost of goods sold and increased investment in the business.
|
•
|
Net income attributable to CBI and diluted net income per common share attributable to CBI
increased
87%
and
90%
, respectively, primarily due to the factors discussed above.
|
|
First
Quarter 2019 |
|
First
Quarter 2018 |
||||
(in millions)
|
|
|
|
||||
Cost of product sold
|
|
|
|
||||
Net gain (loss) on undesignated commodity derivative contracts
|
$
|
15.4
|
|
|
$
|
(3.1
|
)
|
Accelerated depreciation
|
(3.4
|
)
|
|
—
|
|
||
Settlements of undesignated commodity derivative contracts
|
(1.5
|
)
|
|
2.4
|
|
||
Loss on inventory write-down
|
(1.5
|
)
|
|
—
|
|
||
Flow through of inventory step-up
|
(0.6
|
)
|
|
(7.0
|
)
|
||
Total cost of product sold
|
8.4
|
|
|
(7.7
|
)
|
||
|
|
|
|
||||
Selling, general and administrative expenses
|
|
|
|
||||
Deferred compensation
|
(16.3
|
)
|
|
—
|
|
||
Restructuring and other strategic business development costs
|
(4.3
|
)
|
|
(1.4
|
)
|
||
Impairment of intangible assets
|
—
|
|
|
(86.8
|
)
|
||
Costs associated with the sale of the Canadian wine business and related activities
|
—
|
|
|
(3.2
|
)
|
||
Transaction, integration and other acquisition-related costs
|
—
|
|
|
(1.6
|
)
|
||
Total selling, general and administrative expenses
|
(20.6
|
)
|
|
(93.0
|
)
|
||
Comparable Adjustments, Operating loss
|
$
|
(12.2
|
)
|
|
$
|
(100.7
|
)
|
|
|
|
|
||||
Income from unconsolidated investments
|
$
|
359.7
|
|
|
$
|
—
|
|
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
1,375.1
|
|
|
$
|
1,239.2
|
|
|
$
|
135.9
|
|
|
11
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|
|
|||||||
Wine
|
591.8
|
|
|
602.1
|
|
|
(10.3
|
)
|
|
(2
|
%)
|
|||
Spirits
|
80.2
|
|
|
87.2
|
|
|
(7.0
|
)
|
|
(8
|
%)
|
|||
Total Wine and Spirits
|
672.0
|
|
|
689.3
|
|
|
(17.3
|
)
|
|
(3
|
%)
|
|||
Consolidated net sales
|
$
|
2,047.1
|
|
|
$
|
1,928.5
|
|
|
$
|
118.6
|
|
|
6
|
%
|
Beer Segment
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 24-pack, 12-ounce case equivalents)
|
||||||||||||||
Net sales
|
$
|
1,375.1
|
|
|
$
|
1,239.2
|
|
|
$
|
135.9
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
|
77.9
|
|
|
71.7
|
|
|
|
|
|
8.6
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(1)
|
|
|
|
|
|
|
8.9
|
%
|
(1)
|
Depletions represent distributor shipments of our respective branded products to retail customers, based on third-party data.
|
Wine and Spirits Segment
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 9-liter case equivalents)
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
672.0
|
|
|
$
|
689.3
|
|
|
$
|
(17.3
|
)
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
|
|
|
|
|
|
|
|
|||||||
Total
|
13.5
|
|
|
13.9
|
|
|
|
|
(2.9
|
%)
|
||||
U.S. Domestic
|
12.5
|
|
|
12.9
|
|
|
|
|
(3.1
|
%)
|
||||
U.S. Domestic Focus Brands
|
7.8
|
|
|
7.7
|
|
|
|
|
1.3
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(1)
|
|
|
|
|
|
|
|
|||||||
U.S. Domestic
|
|
|
|
|
|
|
(3.6
|
%)
|
||||||
U.S. Domestic Focus Brands
|
|
|
|
|
|
|
0.4
|
%
|
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
749.4
|
|
|
$
|
680.5
|
|
|
$
|
68.9
|
|
|
10
|
%
|
Wine and Spirits
|
290.8
|
|
|
315.5
|
|
|
(24.7
|
)
|
|
(8
|
%)
|
|||
Comparable Adjustments
|
8.4
|
|
|
(7.7
|
)
|
|
16.1
|
|
|
NM
|
|
|||
Consolidated gross profit
|
$
|
1,048.6
|
|
|
$
|
988.3
|
|
|
$
|
60.3
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|||||||
NM = Not meaningful
|
|
|
|
|
|
|
|
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
229.4
|
|
|
$
|
183.0
|
|
|
$
|
46.4
|
|
|
25
|
%
|
Wine and Spirits
|
123.0
|
|
|
113.8
|
|
|
9.2
|
|
|
8
|
%
|
|||
Corporate Operations and Other
|
50.2
|
|
|
37.4
|
|
|
12.8
|
|
|
34
|
%
|
|||
Comparable Adjustments
|
20.6
|
|
|
93.0
|
|
|
(72.4
|
)
|
|
NM
|
|
|||
Consolidated selling, general and administrative expenses
|
$
|
423.2
|
|
|
$
|
427.2
|
|
|
$
|
(4.0
|
)
|
|
(1
|
%)
|
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
520.0
|
|
|
$
|
497.5
|
|
|
$
|
22.5
|
|
|
5
|
%
|
Wine and Spirits
|
167.8
|
|
|
201.7
|
|
|
(33.9
|
)
|
|
(17
|
%)
|
|||
Corporate Operations and Other
|
(50.2
|
)
|
|
(37.4
|
)
|
|
(12.8
|
)
|
|
(34
|
%)
|
|||
Comparable Adjustments
|
(12.2
|
)
|
|
(100.7
|
)
|
|
88.5
|
|
|
NM
|
|
|||
Consolidated operating income
|
$
|
625.4
|
|
|
$
|
561.1
|
|
|
$
|
64.3
|
|
|
11
|
%
|
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
||||||
(in millions)
|
|
|
|
|
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
504.0
|
|
|
$
|
381.6
|
|
|
$
|
122.4
|
|
Investing activities
|
(53.5
|
)
|
|
(221.3
|
)
|
|
167.8
|
|
|||
Financing activities
|
(329.2
|
)
|
|
(141.6
|
)
|
|
(187.6
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1.6
|
)
|
|
3.0
|
|
|
(4.6
|
)
|
|||
Net increase in cash and cash equivalents
|
$
|
119.7
|
|
|
$
|
21.7
|
|
|
$
|
98.0
|
|
|
First
Quarter 2019 |
|
First
Quarter 2018 |
|
Dollar
Change |
||||||
(in millions)
|
|
|
|
|
|
||||||
Dividends paid
|
$
|
(140.5
|
)
|
|
$
|
(100.5
|
)
|
|
$
|
(40.0
|
)
|
Purchases of treasury stock
|
(100.0
|
)
|
|
—
|
|
|
(100.0
|
)
|
|||
Net payments of debt, current and long-term, and related activities
|
(83.4
|
)
|
|
(35.4
|
)
|
|
(48.0
|
)
|
|||
Net cash used in stock-based compensation activities
|
(5.3
|
)
|
|
(5.7
|
)
|
|
0.4
|
|
|||
Net cash used in financing activities
|
$
|
(329.2
|
)
|
|
$
|
(141.6
|
)
|
|
$
|
(187.6
|
)
|
|
Remaining Borrowing Capacity
|
||||||
|
May 31,
2018 |
|
June 25,
2018
|
||||
(in millions)
|
|
|
|
||||
Revolving Credit Facility
(1)
|
$
|
1,111.1
|
|
|
$
|
850.6
|
|
CBI Facility
|
$
|
52.4
|
|
|
$
|
234.4
|
|
Crown Facility
|
$
|
181.3
|
|
|
$
|
235.0
|
|
(1)
|
Net of outstanding revolving credit facility borrowings and outstanding letters of credit under our 2017 Credit Agreement and outstanding borrowings under our commercial paper program.
|
|
|
|
Class A Common Shares
|
||||||
|
Repurchase Authorization
|
|
Dollar Value of Shares Repurchased
|
|
Number of Shares Repurchased
|
||||
(in millions, except share data)
|
|
|
|
|
|
||||
2018 Authorization
|
$
|
3,000.0
|
|
|
$
|
591.6
|
|
|
2,730,375
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
Aggregate
Notional Value
|
|
Fair Value,
Net Asset (Liability)
|
|
Increase (Decrease)
in Fair Value –
Hypothetical
10% Adverse Change
|
||||||||||||||||||
|
May 31,
2018 |
|
May 31,
2017 |
|
May 31,
2018 |
|
May 31,
2017 |
|
May 31,
2018 |
|
May 31,
2017 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
$
|
2,073.1
|
|
|
$
|
1,287.2
|
|
|
$
|
(51.3
|
)
|
|
$
|
2.9
|
|
|
$
|
136.5
|
|
|
$
|
(72.4
|
)
|
Commodity derivative contracts
|
$
|
215.1
|
|
|
$
|
165.8
|
|
|
$
|
17.4
|
|
|
$
|
(6.8
|
)
|
|
$
|
(19.9
|
)
|
|
$
|
14.0
|
|
|
Aggregate
Notional Value
|
|
Fair Value,
Net Asset (Liability)
|
|
Increase (Decrease)
in Fair Value –
Hypothetical
1% Rate Increase
|
||||||||||||||||||
|
May 31,
2018 |
|
May 31,
2017 |
|
May 31,
2018 |
|
May 31,
2017 |
|
May 31,
2018 |
|
May 31,
2017 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed interest rate debt
|
$
|
8,782.9
|
|
|
$
|
5,488.6
|
|
|
$
|
(8,590.9
|
)
|
|
$
|
(5,760.4
|
)
|
|
$
|
(491.8
|
)
|
|
$
|
(360.9
|
)
|
Variable interest rate debt
|
$
|
1,397.7
|
|
|
$
|
3,782.3
|
|
|
$
|
(1,384.4
|
)
|
|
$
|
(3,764.4
|
)
|
|
$
|
(30.7
|
)
|
|
$
|
(93.4
|
)
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
250.0
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
Item 4.
|
Controls and Procedures.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|
Total Number
of Shares
Purchased as
Part of a
Publicly
Announced
Program
|
|
Approximate
Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Program
(1)
|
||||||
March 1 – 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,508,369,668
|
|
April 1 – 30, 2018
|
|
137,211
|
|
|
$
|
227.25
|
|
|
137,211
|
|
|
$
|
2,477,187,787
|
|
May 1 – 31, 2018
|
|
313,297
|
|
|
$
|
219.65
|
|
|
313,297
|
|
|
$
|
2,408,371,308
|
|
Total
|
|
450,508
|
|
|
$
|
221.97
|
|
|
450,508
|
|
|
|
(1)
|
In January 2018, we announced that our Board of Directors authorized the repurchase of up to an aggregate amount of $3.0 billion of our Class A Common Stock and Class B Convertible Common Stock under the 2018 Authorization. The Board of Directors did not specify a date upon which the 2018 Authorization would expire. Share repurchases for the periods included herein were effected through open market transactions.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 6.
|
Exhibits.
|
Exhibit No.
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
4.18
|
|
|
|
|
|
4.19
|
|
|
|
|
|
4.20
|
|
|
|
|
|
4.21
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
10.7
|
|
|
|
|
|
12.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.1
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of May 31, 2018 and February 28, 2018, (ii) Consolidated Statements of Comprehensive Income for the three months ended May 31, 2018 and 2017, (iii) Consolidated Statements of Cash Flows for the three months ended May 31, 2018 and 2017, and (iv) Notes to Consolidated Financial Statements.
|
#
|
Company’s Commission File No. 001-08495.
|
*
|
Designates management contract or compensatory plan or arrangement.
|
|
|
CONSTELLATION BRANDS, INC.
|
|
|
|
|
|
Date:
|
June 29, 2018
|
By:
|
/s/ Thomas M. McCorry
|
|
|
|
Thomas M. McCorry, Senior Vice President
and Controller
|
|
|
|
|
Date:
|
June 29, 2018
|
By:
|
/s/ David Klein
|
|
|
|
David Klein, Executive Vice President and
Chief Financial Officer (principal financial
officer and principal accounting officer)
|
1 Year Constellation Brands Chart |
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