ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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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)
|
|
|
|
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(585) 678-7100
|
|
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(Registrant’s telephone number, including area code)
|
|
|
|
|
|
|
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(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer
|
ý
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Accelerated filer
|
¨
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Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Class
|
|
Number of Shares Outstanding
|
Class A Common Stock, par value $.01 per share
|
|
166,621,513
|
Class B Common Stock, par value $.01 per share
|
|
23,440,365
|
Class 1 Common Stock, par value $.01 per share
|
|
None
|
|
|
|
|
Item 1.
|
Financial Statements.
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
|
|||||||
|
November 30, 2013
|
|
February 28, 2013
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash investments
|
$
|
65.2
|
|
|
$
|
331.5
|
|
Accounts receivable, net
|
668.8
|
|
|
471.9
|
|
||
Inventories
|
1,824.0
|
|
|
1,480.9
|
|
||
Prepaid expenses and other
|
277.4
|
|
|
186.9
|
|
||
Total current assets
|
2,835.4
|
|
|
2,471.2
|
|
||
PROPERTY, PLANT AND EQUIPMENT, net
|
1,905.4
|
|
|
1,229.0
|
|
||
GOODWILL
|
6,150.0
|
|
|
2,722.3
|
|
||
INTANGIBLE ASSETS, net
|
3,237.2
|
|
|
871.4
|
|
||
OTHER ASSETS, net
|
208.3
|
|
|
344.2
|
|
||
Total assets
|
$
|
14,336.3
|
|
|
$
|
7,638.1
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Notes payable to banks
|
$
|
170.5
|
|
|
$
|
—
|
|
Current maturities of long-term debt
|
67.1
|
|
|
27.6
|
|
||
Accounts payable
|
462.4
|
|
|
209.0
|
|
||
Accrued excise taxes
|
26.4
|
|
|
18.9
|
|
||
Other accrued expenses and liabilities
|
1,028.6
|
|
|
422.4
|
|
||
Total current liabilities
|
1,755.0
|
|
|
677.9
|
|
||
LONG-TERM DEBT, less current maturities
|
6,897.0
|
|
|
3,277.8
|
|
||
DEFERRED INCOME TAXES
|
710.0
|
|
|
599.6
|
|
||
OTHER LIABILITIES
|
184.5
|
|
|
222.5
|
|
||
COMMITMENTS AND CONTINGENCIES (
NOTE 15)
|
|
|
|
||||
STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Class A Common Stock, $.01 par value- Authorized, 322,000,000 shares; Issued, 246,852,839 shares at November 30, 2013, and 242,064,514 shares at February 28, 2013
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2.5
|
|
|
2.4
|
|
||
Class B Convertible Common Stock, $.01 par value- Authorized, 30,000,000 shares; Issued, 28,466,235 shares at November 30, 2013, and 28,517,035 shares at February 28, 2013
|
0.3
|
|
|
0.3
|
|
||
Additional paid-in capital
|
2,076.1
|
|
|
1,907.1
|
|
||
Retained earnings
|
4,281.0
|
|
|
2,495.1
|
|
||
Accumulated other comprehensive income
|
94.0
|
|
|
132.1
|
|
||
|
6,453.9
|
|
|
4,537.0
|
|
||
Less: Treasury stock –
|
|
|
|
||||
Class A Common Stock, 80,297,427 shares at November 30, 2013, and 80,799,298 shares at February 28, 2013, at cost
|
(1,661.9
|
)
|
|
(1,674.5
|
)
|
||
Class B Convertible Common Stock, 5,005,800 shares at November 30, 2013, and February 28, 2013, at cost
|
(2.2
|
)
|
|
(2.2
|
)
|
||
|
(1,664.1
|
)
|
|
(1,676.7
|
)
|
||
Total stockholders’ equity
|
4,789.8
|
|
|
2,860.3
|
|
||
Total liabilities and stockholders’ equity
|
$
|
14,336.3
|
|
|
$
|
7,638.1
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions, except per share data)
(unaudited)
|
|||||||||||||||
|
For the Nine Months
Ended November 30, |
|
For the Three Months
Ended November 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
SALES
|
$
|
3,973.0
|
|
|
$
|
2,383.4
|
|
|
$
|
1,593.5
|
|
|
$
|
860.4
|
|
Less – excise taxes
|
(396.5
|
)
|
|
(283.2
|
)
|
|
(150.2
|
)
|
|
(93.5
|
)
|
||||
Net sales
|
3,576.5
|
|
|
2,100.2
|
|
|
1,443.3
|
|
|
766.9
|
|
||||
COST OF PRODUCT SOLD
|
(2,133.7
|
)
|
|
(1,253.7
|
)
|
|
(833.6
|
)
|
|
(456.1
|
)
|
||||
Gross profit
|
1,442.8
|
|
|
846.5
|
|
|
609.7
|
|
|
310.8
|
|
||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
(675.6
|
)
|
|
(451.0
|
)
|
|
(245.9
|
)
|
|
(152.0
|
)
|
||||
IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS
|
(300.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
GAIN ON REMEASUREMENT TO FAIR VALUE OF EQUITY METHOD INVESTMENT
|
1,642.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Operating income
|
2,108.3
|
|
|
395.5
|
|
|
363.8
|
|
|
158.8
|
|
||||
EQUITY IN EARNINGS OF EQUITY METHOD INVESTEES
|
88.3
|
|
|
183.6
|
|
|
18.0
|
|
|
52.5
|
|
||||
INTEREST EXPENSE, net
|
(234.7
|
)
|
|
(166.7
|
)
|
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(89.6
|
)
|
|
(61.4
|
)
|
||||
LOSS ON WRITE-OFF OF FINANCING COSTS
|
—
|
|
|
(2.8
|
)
|
|
—
|
|
|
—
|
|
||||
Income before income taxes
|
1,961.9
|
|
|
409.6
|
|
|
292.2
|
|
|
149.9
|
|
||||
PROVISION FOR INCOME TAXES
|
(176.0
|
)
|
|
(103.5
|
)
|
|
(81.2
|
)
|
|
(40.4
|
)
|
||||
NET INCOME
|
$
|
1,785.9
|
|
|
$
|
306.1
|
|
|
$
|
211.0
|
|
|
$
|
109.5
|
|
|
|
|
|
|
|
|
|
||||||||
COMPREHENSIVE INCOME
|
$
|
1,747.8
|
|
|
$
|
297.7
|
|
|
$
|
240.4
|
|
|
$
|
117.1
|
|
|
|
|
|
|
|
|
|
||||||||
SHARE DATA:
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
$
|
9.63
|
|
|
$
|
1.70
|
|
|
$
|
1.13
|
|
|
$
|
0.61
|
|
Basic – Class B Convertible Common Stock
|
$
|
8.76
|
|
|
$
|
1.55
|
|
|
$
|
1.03
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
$
|
9.07
|
|
|
$
|
1.62
|
|
|
$
|
1.07
|
|
|
$
|
0.58
|
|
Diluted – Class B Convertible Common Stock
|
$
|
8.34
|
|
|
$
|
1.49
|
|
|
$
|
0.98
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
164.082
|
|
|
158.442
|
|
|
165.708
|
|
|
158.270
|
|
||||
Basic – Class B Convertible Common Stock
|
23.477
|
|
|
23.538
|
|
|
23.461
|
|
|
23.524
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
196.886
|
|
|
188.642
|
|
|
198.082
|
|
|
189.696
|
|
||||
Diluted – Class B Convertible Common Stock
|
23.477
|
|
|
23.538
|
|
|
23.461
|
|
|
23.524
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
|||||||
|
For the Nine Months
Ended November 30, |
||||||
|
2013
|
|
2012
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
1,785.9
|
|
|
$
|
306.1
|
|
|
|
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Gain on remeasurement to fair value of equity method investment
|
(1,642.0
|
)
|
|
—
|
|
||
Equity in earnings of equity method investees, net of distributed earnings
|
(52.1
|
)
|
|
23.5
|
|
||
Impairment of goodwill and intangible assets
|
300.9
|
|
|
—
|
|
||
Depreciation of property, plant and equipment
|
102.1
|
|
|
80.0
|
|
||
Stock-based compensation expense
|
37.5
|
|
|
31.3
|
|
||
Amortization of intangible assets
|
11.2
|
|
|
5.5
|
|
||
Deferred tax provision
|
10.1
|
|
|
40.5
|
|
||
Amortization of deferred financing costs
|
8.3
|
|
|
3.0
|
|
||
Loss (gain) on disposal of assets, net
|
0.4
|
|
|
(0.1
|
)
|
||
Loss on write-off of financing costs
|
—
|
|
|
2.8
|
|
||
Change in operating assets and liabilities, net of effects from purchase of business:
|
|
|
|
||||
Accounts receivable, net
|
(4.7
|
)
|
|
(104.2
|
)
|
||
Inventories
|
(112.2
|
)
|
|
(196.7
|
)
|
||
Prepaid expenses and other current assets
|
11.8
|
|
|
(0.3
|
)
|
||
Accounts payable
|
128.8
|
|
|
170.7
|
|
||
Accrued excise taxes
|
(6.8
|
)
|
|
(6.7
|
)
|
||
Other accrued expenses and liabilities
|
30.9
|
|
|
26.4
|
|
||
Other, net
|
19.0
|
|
|
7.2
|
|
||
Total adjustments
|
(1,156.8
|
)
|
|
82.9
|
|
||
Net cash provided by operating activities
|
629.1
|
|
|
389.0
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchase of business, net of cash acquired
|
(4,681.0
|
)
|
|
(159.3
|
)
|
||
Purchases of property, plant and equipment
|
(85.9
|
)
|
|
(52.2
|
)
|
||
Proceeds from sales of assets
|
7.8
|
|
|
8.0
|
|
||
Proceeds from notes receivable
|
—
|
|
|
4.6
|
|
||
Other investing activities
|
1.6
|
|
|
(1.3
|
)
|
||
Net cash used in investing activities
|
(4,757.5
|
)
|
|
(200.2
|
)
|
||
|
|
|
|
1.
|
BASIS OF PRESENTATION:
|
2.
|
RECENTLY ADOPTED ACCOUNTING GUIDANCE:
|
•
|
The proceeds from the issuance of
$1,550.0 million
aggregate principal amount of May 2013 Senior Notes (as defined in Note 13);
|
•
|
$1,500.0 million
in term loans consisting of a
$500.0 million
European Term A Facility (as defined in Note 13) and a
$1,000.0 million
European Term B Facility (as defined in
Note 13) under the 2013 Credit Agreement (as defined in Note 13);
|
•
|
$675.0 million
in term loans under the U.S. Term A-2 facility (as defined in Note 13) under the 2013 Credit Agreement;
|
•
|
$208.0 million
in proceeds of borrowings under the Company’s then existing accounts receivable securitization facility;
|
•
|
$580.0 million
in borrowings under the revolving credit facility under the 2013 Credit Agreement; and
|
•
|
Approximately
$232.0 million
of cash on hand (inclusive of
$13.0 million
of borrowings under a subsidiary working capital facility).
|
|
For the Nine Months
Ended November 30, |
|
For the Three Months
Ended November 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
4,193.9
|
|
|
$
|
4,110.8
|
|
|
$
|
1,443.3
|
|
|
$
|
1,467.4
|
|
Income before income taxes
|
$
|
457.0
|
|
|
$
|
751.3
|
|
|
$
|
292.2
|
|
|
$
|
281.2
|
|
Net income
|
$
|
234.7
|
|
|
$
|
541.8
|
|
|
$
|
211.0
|
|
|
$
|
199.1
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
$
|
1.27
|
|
|
$
|
3.01
|
|
|
$
|
1.13
|
|
|
$
|
1.11
|
|
Basic – Class B Convertible Common Stock
|
$
|
1.15
|
|
|
$
|
2.74
|
|
|
$
|
1.03
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
$
|
1.19
|
|
|
$
|
2.87
|
|
|
$
|
1.07
|
|
|
$
|
1.05
|
|
Diluted – Class B Convertible Common Stock
|
$
|
1.10
|
|
|
$
|
2.64
|
|
|
$
|
0.98
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
164.082
|
|
|
158.442
|
|
|
165.708
|
|
|
158.270
|
|
||||
Basic – Class B Convertible Common Stock
|
23.477
|
|
|
23.538
|
|
|
23.461
|
|
|
23.524
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
196.886
|
|
|
188.642
|
|
|
198.082
|
|
|
189.696
|
|
||||
Diluted – Class B Convertible Common Stock
|
23.477
|
|
|
23.538
|
|
|
23.461
|
|
|
23.524
|
|
|
November 30, 2013
|
|
February 28, 2013
|
||||
(in millions
)
|
|
|
|
||||
Raw materials and supplies
|
$
|
81.4
|
|
|
$
|
45.5
|
|
In-process inventories
|
1,306.4
|
|
|
1,168.1
|
|
||
Finished case goods
|
436.2
|
|
|
267.3
|
|
||
|
$
|
1,824.0
|
|
|
$
|
1,480.9
|
|
|
November 30, 2013
|
|
February 28, 2013
|
||||
(in millions
)
|
|
|
|
||||
Income taxes receivable
|
$
|
106.0
|
|
|
$
|
117.3
|
|
Prepaid excise, sales and value added taxes
|
80.4
|
|
|
20.2
|
|
||
Other
|
91.0
|
|
|
49.4
|
|
||
|
$
|
277.4
|
|
|
$
|
186.9
|
|
|
November 30, 2013
|
|
February 28, 2013
|
||||
(in millions)
|
|
|
|
||||
Land and land improvements
|
$
|
333.1
|
|
|
$
|
304.6
|
|
Vineyards
|
217.5
|
|
|
214.5
|
|
||
Buildings and improvements
|
512.9
|
|
|
342.0
|
|
||
Machinery and equipment
|
1,570.4
|
|
|
1,090.6
|
|
||
Motor vehicles
|
48.0
|
|
|
47.3
|
|
||
Construction in progress
|
122.1
|
|
|
47.9
|
|
||
|
2,804.0
|
|
|
2,046.9
|
|
||
Less – Accumulated depreciation
|
(898.6
|
)
|
|
(817.9
|
)
|
||
|
$
|
1,905.4
|
|
|
$
|
1,229.0
|
|
Balance Sheet Location
|
|
November 30, 2013
|
|
February 28, 2013
|
||||
(in millions)
|
|
|
|
|
||||
Derivative instruments designated as hedging instruments
|
|
|
|
|
||||
Foreign currency contracts:
|
|
|
|
|
||||
Prepaid expenses and other
|
|
$
|
7.0
|
|
|
$
|
6.4
|
|
Other accrued expenses and liabilities
|
|
$
|
2.8
|
|
|
$
|
0.1
|
|
Other assets, net
|
|
$
|
2.7
|
|
|
$
|
2.4
|
|
Other liabilities
|
|
$
|
1.2
|
|
|
$
|
0.1
|
|
|
|
|
|
|
||||
Interest rate swap contracts:
|
|
|
|
|
||||
Other accrued expenses and liabilities
|
|
$
|
3.6
|
|
|
$
|
3.2
|
|
Other liabilities
|
|
$
|
1.8
|
|
|
$
|
3.1
|
|
|
|
|
|
|
||||
Diesel fuel swap contracts:
|
|
|
|
|
||||
Prepaid expenses and other
|
|
$
|
—
|
|
|
$
|
0.5
|
|
Other assets, net
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Other liabilities
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
|
|
|
|
||||
Derivative instruments not designated as hedging instruments
|
|
|
|
|
||||
Foreign currency contracts:
|
|
|
|
|
||||
Prepaid expenses and other
|
|
$
|
2.6
|
|
|
$
|
0.9
|
|
Other accrued expenses and liabilities
|
|
$
|
6.9
|
|
|
$
|
5.1
|
|
|
|
|
|
|
||||
Interest rate swap contracts:
|
|
|
|
|
||||
Prepaid expenses and other
|
|
$
|
4.4
|
|
|
$
|
3.3
|
|
Other accrued expenses and liabilities
|
|
$
|
16.6
|
|
|
$
|
13.2
|
|
Other assets, net
|
|
$
|
2.0
|
|
|
$
|
3.3
|
|
Other liabilities
|
|
$
|
19.1
|
|
|
$
|
27.6
|
|
|
|
|
|
|
||||
Diesel fuel swap contracts:
|
|
|
|
|
||||
Prepaid expenses and other
|
|
$
|
0.8
|
|
|
$
|
—
|
|
Other assets, net
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Derivative Instruments in
Designated Cash Flow
Hedging Relationships
|
|
Net
Gain (Loss)
Recognized
in OCI
(Effective
portion)
|
|
Location of Net Gain (Loss)
Reclassified from AOCI to
Income (Effective portion)
|
|
Net
Gain (Loss)
Reclassified
from AOCI to
Income
(Effective
portion)
|
||||
(in millions)
|
|
|
|
|
|
|
||||
For the Nine Months Ended November 30, 2013
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
1.3
|
|
|
Sales
|
|
$
|
2.6
|
|
Foreign currency contracts
|
|
0.9
|
|
|
Cost of product sold
|
|
0.3
|
|
||
Interest rate swap contracts
|
|
(0.9
|
)
|
|
Interest expense, net
|
|
(6.2
|
)
|
||
Total
|
|
$
|
1.3
|
|
|
Total
|
|
$
|
(3.3
|
)
|
|
|
|
|
|
|
|
||||
For the Nine Months Ended November 30, 2012
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
0.3
|
|
|
Sales
|
|
$
|
1.9
|
|
Foreign currency contracts
|
|
(0.3
|
)
|
|
Cost of product sold
|
|
1.7
|
|
||
Diesel fuel swap contracts
|
|
0.8
|
|
|
Cost of product sold
|
|
0.3
|
|
||
Interest rate swap contracts
|
|
(6.8
|
)
|
|
Interest expense, net
|
|
(6.1
|
)
|
||
Total
|
|
$
|
(6.0
|
)
|
|
Total
|
|
$
|
(2.2
|
)
|
|
|
|
|
|
|
|
||||
For the Three Months Ended November 30, 2013
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
1.5
|
|
|
Sales
|
|
$
|
1.0
|
|
Foreign currency contracts
|
|
2.7
|
|
|
Cost of product sold
|
|
0.1
|
|
||
Interest rate swap contracts
|
|
(3.5
|
)
|
|
Interest expense, net
|
|
(2.1
|
)
|
||
Total
|
|
$
|
0.7
|
|
|
Total
|
|
$
|
(1.0
|
)
|
|
|
|
|
|
|
|
||||
For the Three Months Ended November 30, 2012
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
1.3
|
|
|
Sales
|
|
$
|
0.2
|
|
Foreign currency contracts
|
|
1.5
|
|
|
Cost of product sold
|
|
0.3
|
|
||
Diesel fuel swap contracts
|
|
(0.1
|
)
|
|
Cost of product sold
|
|
0.3
|
|
||
Interest rate swap contracts
|
|
(0.6
|
)
|
|
Interest expense, net
|
|
(2.0
|
)
|
||
Total
|
|
$
|
2.1
|
|
|
Total
|
|
$
|
(1.2
|
)
|
Derivative Instruments in
Designated Cash Flow
Hedging Relationships
|
|
|
|
Location of Net Gain
Recognized in Income
(Ineffective portion)
|
|
Net Gain
Recognized
in Income
(Ineffective
portion)
|
||
(in millions)
|
|
|
|
|
|
|
||
For the Nine Months Ended November 30, 2013
|
|
|
|
|
|
|
||
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
0.3
|
|
Diesel fuel swap contracts
|
|
|
|
Selling, general and administrative expenses
|
|
0.1
|
|
|
|
|
|
|
|
|
$
|
0.4
|
|
|
|
|
|
|
|
|
||
For the Nine Months Ended November 30, 2012
|
|
|
|
|
|
|
||
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
0.2
|
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2013
|
|
|
|
|
|
|
||
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2012
|
|
|
|
|
|
|
||
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
—
|
|
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 Nine Months Ended November 30, 2013
|
|
|
|
|
|
|
||
Diesel fuel swap contracts
|
|
|
|
Cost of product sold
|
|
$
|
1.1
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(2.8
|
)
|
|
Interest rate swap contracts
|
|
|
|
Interest expense, net
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
$
|
(1.8
|
)
|
|
|
|
|
|
|
|
||
For the Nine Months Ended November 30, 2012
|
|
|
|
|
|
|
||
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
(3.1
|
)
|
Interest rate swap contracts
|
|
|
|
Interest expense, net
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
$
|
(3.6
|
)
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2013
|
|
|
|
|
|
|
||
Diesel fuel swap contracts
|
|
|
|
Cost of product sold
|
|
$
|
1.1
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(0.2
|
)
|
|
Diesel fuel swap contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(1.6
|
)
|
|
Interest rate swap contracts
|
|
|
|
Interest expense, net
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
$
|
(0.8
|
)
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2012
|
|
|
|
|
|
|
||
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
(0.9
|
)
|
Interest rate swap contracts
|
|
|
|
Interest expense, net
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
$
|
(1.0
|
)
|
|
November 30, 2013
|
|
February 28, 2013
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash investments
|
$
|
65.2
|
|
|
$
|
65.2
|
|
|
$
|
331.5
|
|
|
$
|
331.5
|
|
Accounts receivable, net
|
$
|
668.8
|
|
|
$
|
668.8
|
|
|
$
|
471.9
|
|
|
$
|
471.9
|
|
Available-for-sale debt securities
|
$
|
36.4
|
|
|
$
|
36.4
|
|
|
$
|
34.2
|
|
|
$
|
34.2
|
|
Foreign currency contracts
|
$
|
12.3
|
|
|
$
|
12.3
|
|
|
$
|
9.7
|
|
|
$
|
9.7
|
|
Interest rate swap contracts
|
$
|
6.4
|
|
|
$
|
6.4
|
|
|
$
|
6.6
|
|
|
$
|
6.6
|
|
Diesel fuel swap contracts
|
$
|
0.9
|
|
|
$
|
0.9
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Notes payable to banks
|
$
|
170.5
|
|
|
$
|
170.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts payable
|
$
|
462.4
|
|
|
$
|
462.4
|
|
|
$
|
209.0
|
|
|
$
|
209.0
|
|
Long-term debt, including current portion
|
$
|
6,964.1
|
|
|
$
|
6,995.6
|
|
|
$
|
3,305.4
|
|
|
$
|
3,603.6
|
|
Foreign currency contracts
|
$
|
10.9
|
|
|
$
|
10.9
|
|
|
$
|
5.3
|
|
|
$
|
5.3
|
|
Interest rate swap contracts
|
$
|
41.1
|
|
|
$
|
41.1
|
|
|
$
|
47.1
|
|
|
$
|
47.1
|
|
Diesel fuel swap contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
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)
|
|
|
|
|
|
|
|
||||||||
November 30, 2013
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
AFS debt securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36.4
|
|
|
$
|
36.4
|
|
Foreign currency contracts
|
$
|
—
|
|
|
$
|
12.3
|
|
|
$
|
—
|
|
|
$
|
12.3
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
6.4
|
|
|
$
|
—
|
|
|
$
|
6.4
|
|
Diesel fuel swap contracts
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
10.9
|
|
|
$
|
—
|
|
|
$
|
10.9
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
41.1
|
|
|
$
|
—
|
|
|
$
|
41.1
|
|
|
|
|
|
|
|
|
|
||||||||
February 28, 2013
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
AFS debt securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34.2
|
|
|
$
|
34.2
|
|
Foreign currency contracts
|
$
|
—
|
|
|
$
|
9.7
|
|
|
$
|
—
|
|
|
$
|
9.7
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
Diesel fuel swap contracts
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
5.3
|
|
|
$
|
—
|
|
|
$
|
5.3
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
47.1
|
|
|
$
|
—
|
|
|
$
|
47.1
|
|
Diesel fuel swap contracts
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
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 Nine Months Ended November 30, 2013
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
159.6
|
|
|
$
|
278.7
|
|
Trademarks
|
—
|
|
|
—
|
|
|
68.3
|
|
|
22.2
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
227.9
|
|
|
$
|
300.9
|
|
|
Wine and Spirits
|
|
Beer
|
|
Consolidations
and
Eliminations
|
|
Consolidated
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Balance, February 29, 2012
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
2,632.9
|
|
|
$
|
13.0
|
|
|
$
|
(13.0
|
)
|
|
$
|
2,632.9
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
2,632.9
|
|
|
13.0
|
|
|
(13.0
|
)
|
|
2,632.9
|
|
||||
Purchase accounting allocations
|
110.0
|
|
|
—
|
|
|
—
|
|
|
110.0
|
|
||||
Foreign currency translation adjustments
|
(20.6
|
)
|
|
—
|
|
|
—
|
|
|
(20.6
|
)
|
||||
Balance, February 28, 2013
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
2,722.3
|
|
|
13.0
|
|
|
(13.0
|
)
|
|
2,722.3
|
|
||||
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
2,722.3
|
|
|
13.0
|
|
|
(13.0
|
)
|
|
2,722.3
|
|
||||
Purchase accounting allocations
|
—
|
|
|
3,702.8
|
|
|
13.0
|
|
|
3,715.8
|
|
||||
Impairment of goodwill
|
(278.7
|
)
|
|
—
|
|
|
—
|
|
|
(278.7
|
)
|
||||
Foreign currency translation adjustments
|
(8.7
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
(9.4
|
)
|
||||
Balance, November 30, 2013
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
2,707.3
|
|
|
3,715.1
|
|
|
—
|
|
|
6,422.4
|
|
||||
Accumulated impairment losses
|
(272.4
|
)
|
|
—
|
|
|
—
|
|
|
(272.4
|
)
|
||||
|
$
|
2,434.9
|
|
|
$
|
3,715.1
|
|
|
$
|
—
|
|
|
$
|
6,150.0
|
|
|
November 30, 2013
|
|
February 28, 2013
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
||||||||
(
in millions)
|
|
|
|
|
|
|
|
||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
$
|
104.5
|
|
|
$
|
72.6
|
|
|
$
|
82.9
|
|
|
$
|
54.7
|
|
Favorable interim supply agreement
|
68.3
|
|
|
64.1
|
|
|
—
|
|
|
—
|
|
||||
Other
|
14.6
|
|
|
6.3
|
|
|
7.9
|
|
|
2.2
|
|
||||
Total
|
$
|
187.4
|
|
|
143.0
|
|
|
$
|
90.8
|
|
|
56.9
|
|
||
|
|
|
|
|
|
|
|
||||||||
Nonamortizable intangible assets:
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
|
|
3,089.0
|
|
|
|
|
809.1
|
|
||||||
Other
|
|
|
5.2
|
|
|
|
|
5.4
|
|
||||||
Total
|
|
|
3,094.2
|
|
|
|
|
814.5
|
|
||||||
Total intangible assets, net
|
|
|
$
|
3,237.2
|
|
|
|
|
$
|
871.4
|
|
|
November 30, 2013
|
|
February 28, 2013
|
||||
(in millions)
|
|
|
|
||||
Deferred financing costs
|
$
|
85.2
|
|
|
$
|
54.4
|
|
Investments in equity method investees
|
81.9
|
|
|
243.6
|
|
||
Investment in Accolade
|
45.0
|
|
|
42.8
|
|
||
Other
|
18.4
|
|
|
17.3
|
|
||
|
230.5
|
|
|
358.1
|
|
||
Less – Accumulated amortization
|
(22.2
|
)
|
|
(13.9
|
)
|
||
|
$
|
208.3
|
|
|
$
|
344.2
|
|
|
For the Nine Months
Ended November 30, |
|
For the Three Months
Ended November 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
813.4
|
|
|
$
|
2,059.9
|
|
|
$
|
—
|
|
|
$
|
547.4
|
|
Gross profit
|
$
|
241.5
|
|
|
$
|
596.8
|
|
|
$
|
—
|
|
|
$
|
160.0
|
|
Income from continuing operations
|
$
|
142.1
|
|
|
$
|
344.6
|
|
|
$
|
—
|
|
|
$
|
78.6
|
|
Net income
|
$
|
142.1
|
|
|
$
|
344.6
|
|
|
$
|
—
|
|
|
$
|
78.6
|
|
|
November 30, 2013
|
|
February 28, 2013
|
||||
(in millions)
|
|
|
|
||||
Beer Business Acquisition payable
|
$
|
552.4
|
|
|
$
|
—
|
|
Promotions and advertising
|
99.8
|
|
|
80.3
|
|
||
Salaries, commissions, and payroll benefits and withholdings
|
97.6
|
|
|
80.5
|
|
||
Deferred revenue
|
52.8
|
|
|
49.3
|
|
||
Accrued interest
|
49.6
|
|
|
61.4
|
|
||
Income taxes payable
|
40.4
|
|
|
11.2
|
|
||
Other
|
136.0
|
|
|
139.7
|
|
||
|
$
|
1,028.6
|
|
|
$
|
422.4
|
|
|
November 30, 2013
|
|
February 28, 2013
|
||||||||||||
|
Current
|
|
Long-term
|
|
Total
|
|
Total
|
||||||||
(
in millions)
|
|
|
|
|
|
|
|
||||||||
Notes Payable to Banks
:
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility – Revolving Credit Loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
170.5
|
|
|
—
|
|
|
170.5
|
|
|
—
|
|
||||
|
$
|
170.5
|
|
|
$
|
—
|
|
|
$
|
170.5
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term Debt
:
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility – Term Loans
|
$
|
48.5
|
|
|
$
|
2,816.2
|
|
|
$
|
2,864.7
|
|
|
$
|
762.5
|
|
Senior Notes
|
—
|
|
|
4,047.0
|
|
|
4,047.0
|
|
|
2,496.0
|
|
||||
Other Long-term Debt
|
18.6
|
|
|
33.8
|
|
|
52.4
|
|
|
46.9
|
|
||||
|
$
|
67.1
|
|
|
$
|
6,897.0
|
|
|
$
|
6,964.1
|
|
|
$
|
3,305.4
|
|
|
U.S.
Term A
Facility
|
|
U.S.
Term A-1
Facility
|
|
U.S.
Term A-2
Facility
|
|
European
Term A
Facility
|
|
European
Term B
Facility
|
|
Total
|
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2014
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2015
|
19.4
|
|
|
1.8
|
|
|
25.3
|
|
|
18.7
|
|
|
7.5
|
|
|
72.7
|
|
||||||
2016
|
38.7
|
|
|
2.5
|
|
|
50.6
|
|
|
37.5
|
|
|
10.0
|
|
|
139.3
|
|
||||||
2017
|
51.5
|
|
|
2.5
|
|
|
67.5
|
|
|
50.0
|
|
|
10.0
|
|
|
181.5
|
|
||||||
2018
|
51.5
|
|
|
2.5
|
|
|
67.5
|
|
|
50.0
|
|
|
10.0
|
|
|
181.5
|
|
||||||
2019
|
335.2
|
|
|
2.4
|
|
|
438.8
|
|
|
325.0
|
|
|
10.0
|
|
|
1,111.4
|
|
||||||
Thereafter
|
—
|
|
|
233.3
|
|
|
—
|
|
|
—
|
|
|
945.0
|
|
|
1,178.3
|
|
||||||
|
$
|
496.3
|
|
|
$
|
245.0
|
|
|
$
|
649.7
|
|
|
$
|
481.2
|
|
|
$
|
992.5
|
|
|
$
|
2,864.7
|
|
|
For the Nine Months
Ended November 30, |
|
For the Three Months
Ended November 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||
Income available to common stockholders
|
$
|
1,785.9
|
|
|
$
|
306.1
|
|
|
$
|
211.0
|
|
|
$
|
109.5
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic:
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
164.082
|
|
|
158.442
|
|
|
165.708
|
|
|
158.270
|
|
||||
Class B Convertible Common Stock
|
23.477
|
|
|
23.538
|
|
|
23.461
|
|
|
23.524
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – diluted:
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
164.082
|
|
|
158.442
|
|
|
165.708
|
|
|
158.270
|
|
||||
Class B Convertible Common Stock
|
23.477
|
|
|
23.538
|
|
|
23.461
|
|
|
23.524
|
|
||||
Stock-based awards, primarily stock options
|
9.327
|
|
|
6.662
|
|
|
8.913
|
|
|
7.902
|
|
||||
Weighted average common shares outstanding – diluted
|
196.886
|
|
|
188.642
|
|
|
198.082
|
|
|
189.696
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share – basic:
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
$
|
9.63
|
|
|
$
|
1.70
|
|
|
$
|
1.13
|
|
|
$
|
0.61
|
|
Class B Convertible Common Stock
|
$
|
8.76
|
|
|
$
|
1.55
|
|
|
$
|
1.03
|
|
|
$
|
0.55
|
|
Earnings per common share – diluted:
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
$
|
9.07
|
|
|
$
|
1.62
|
|
|
$
|
1.07
|
|
|
$
|
0.58
|
|
Class B Convertible Common Stock
|
$
|
8.34
|
|
|
$
|
1.49
|
|
|
$
|
0.98
|
|
|
$
|
0.53
|
|
|
Before Tax
Amount
|
|
Tax (Expense)Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Nine Months Ended November 30, 2013
|
|
|
|
|
|
||||||
Net income
|
|
|
|
|
$
|
1,785.9
|
|
||||
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(39.0
|
)
|
|
$
|
(2.4
|
)
|
|
(41.4
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(39.0
|
)
|
|
(2.4
|
)
|
|
(41.4
|
)
|
|||
Unrealized gain on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative gains
|
2.0
|
|
|
(0.7
|
)
|
|
1.3
|
|
|||
Reclassification adjustments
|
5.3
|
|
|
(2.4
|
)
|
|
2.9
|
|
|||
Net gain recognized in other comprehensive loss
|
7.3
|
|
|
(3.1
|
)
|
|
4.2
|
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(1.8
|
)
|
|
(0.3
|
)
|
|
(2.1
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(1.8
|
)
|
|
(0.3
|
)
|
|
(2.1
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.7
|
|
|
(0.2
|
)
|
|
0.5
|
|
|||
Reclassification adjustments
|
0.9
|
|
|
(0.2
|
)
|
|
0.7
|
|
|||
Net gain recognized in other comprehensive loss
|
1.6
|
|
|
(0.4
|
)
|
|
1.2
|
|
|||
Other comprehensive loss
|
$
|
(31.9
|
)
|
|
$
|
(6.2
|
)
|
|
(38.1
|
)
|
|
Total comprehensive income
|
|
|
|
|
$
|
1,747.8
|
|
||||
|
|
|
|
|
|
||||||
For the Nine Months Ended November 30, 2012
|
|
|
|
|
|
||||||
Net income
|
|
|
|
|
$
|
306.1
|
|
||||
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(11.0
|
)
|
|
$
|
5.4
|
|
|
(5.6
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(11.0
|
)
|
|
5.4
|
|
|
(5.6
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(10.0
|
)
|
|
4.0
|
|
|
(6.0
|
)
|
|||
Reclassification adjustments
|
4.5
|
|
|
(2.5
|
)
|
|
2.0
|
|
|||
Net loss recognized in other comprehensive loss
|
(5.5
|
)
|
|
1.5
|
|
|
(4.0
|
)
|
|||
Unrealized gain on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities gains
|
1.1
|
|
|
(0.4
|
)
|
|
0.7
|
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive loss
|
1.1
|
|
|
(0.4
|
)
|
|
0.7
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Reclassification adjustments
|
0.6
|
|
|
(0.2
|
)
|
|
0.4
|
|
|||
Net gain recognized in other comprehensive loss
|
0.7
|
|
|
(0.2
|
)
|
|
0.5
|
|
|||
Other comprehensive loss
|
$
|
(14.7
|
)
|
|
$
|
6.3
|
|
|
(8.4
|
)
|
|
Total comprehensive income
|
|
|
|
|
$
|
297.7
|
|
||||
|
|
|
|
|
|
|
Before Tax
Amount
|
|
Tax (Expense)Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Three Months Ended November 30, 2013
|
|
|
|
|
|
||||||
Net income
|
|
|
|
|
$
|
211.0
|
|
||||
Other comprehensive income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net gains
|
$
|
27.4
|
|
|
$
|
(0.8
|
)
|
|
26.6
|
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
27.4
|
|
|
(0.8
|
)
|
|
26.6
|
|
|||
Unrealized gain on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(0.4
|
)
|
|
1.1
|
|
|
0.7
|
|
|||
Reclassification adjustments
|
1.7
|
|
|
(0.8
|
)
|
|
0.9
|
|
|||
Net gain recognized in other comprehensive income
|
1.3
|
|
|
0.3
|
|
|
1.6
|
|
|||
Unrealized gain on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities gains
|
1.1
|
|
|
(0.2
|
)
|
|
0.9
|
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
1.1
|
|
|
(0.2
|
)
|
|
0.9
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Reclassification adjustments
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Net gain recognized in other comprehensive income
|
0.4
|
|
|
(0.1
|
)
|
|
0.3
|
|
|||
Other comprehensive income
|
$
|
30.2
|
|
|
$
|
(0.8
|
)
|
|
29.4
|
|
|
Total comprehensive income
|
|
|
|
|
$
|
240.4
|
|
||||
|
|
|
|
|
|
||||||
For the Three Months Ended November 30, 2012
|
|
|
|
|
|
||||||
Net income
|
|
|
|
|
$
|
109.5
|
|
||||
Other comprehensive income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net gains
|
$
|
1.4
|
|
|
$
|
1.9
|
|
|
3.3
|
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
1.4
|
|
|
1.9
|
|
|
3.3
|
|
|||
Unrealized gain on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative gains
|
2.8
|
|
|
(0.7
|
)
|
|
2.1
|
|
|||
Reclassification adjustments
|
2.2
|
|
|
(1.0
|
)
|
|
1.2
|
|
|||
Net gain recognized in other comprehensive income
|
5.0
|
|
|
(1.7
|
)
|
|
3.3
|
|
|||
Unrealized gain on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities gains
|
1.1
|
|
|
(0.3
|
)
|
|
0.8
|
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
1.1
|
|
|
(0.3
|
)
|
|
0.8
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Reclassification adjustments
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Net gain recognized in other comprehensive income
|
0.4
|
|
|
(0.2
|
)
|
|
0.2
|
|
|||
Other comprehensive income
|
$
|
7.9
|
|
|
$
|
(0.3
|
)
|
|
7.6
|
|
|
Total comprehensive income
|
|
|
|
|
$
|
117.1
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
Net
Unrealized
(Losses) Gains on
Derivative Instruments
|
|
Net
Unrealized
Gains (Losses)
on AFS Debt
Securities
|
|
Pension/
Postretirement
Adjustments
|
|
Accumulated
Other
Comprehensive
Income
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, February 28, 2013
|
$
|
170.4
|
|
|
$
|
(20.2
|
)
|
|
$
|
1.4
|
|
|
$
|
(19.5
|
)
|
|
$
|
132.1
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive (loss) income before reclassification adjustments
|
(41.4
|
)
|
|
1.3
|
|
|
(2.1
|
)
|
|
0.5
|
|
|
(41.7
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
2.9
|
|
|
—
|
|
|
0.7
|
|
|
3.6
|
|
|||||
Other comprehensive (loss) income
|
(41.4
|
)
|
|
4.2
|
|
|
(2.1
|
)
|
|
1.2
|
|
|
(38.1
|
)
|
|||||
Balance, November 30, 2013
|
$
|
129.0
|
|
|
$
|
(16.0
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(18.3
|
)
|
|
$
|
94.0
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at November 30, 2013
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash investments
|
$
|
3.0
|
|
|
$
|
2.2
|
|
|
$
|
60.0
|
|
|
$
|
—
|
|
|
$
|
65.2
|
|
Accounts receivable, net
|
0.6
|
|
|
11.7
|
|
|
656.5
|
|
|
—
|
|
|
668.8
|
|
|||||
Inventories
|
160.5
|
|
|
1,298.7
|
|
|
405.3
|
|
|
(40.5
|
)
|
|
1,824.0
|
|
|||||
Intercompany receivable
|
7,158.4
|
|
|
12,087.8
|
|
|
3,320.9
|
|
|
(22,567.1
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
45.9
|
|
|
89.6
|
|
|
487.5
|
|
|
(345.6
|
)
|
|
277.4
|
|
|||||
Total current assets
|
7,368.4
|
|
|
13,490.0
|
|
|
4,930.2
|
|
|
(22,953.2
|
)
|
|
2,835.4
|
|
|||||
Property, plant and equipment, net
|
39.4
|
|
|
845.6
|
|
|
1,020.4
|
|
|
—
|
|
|
1,905.4
|
|
|||||
Investments in subsidiaries
|
10,539.3
|
|
|
8.7
|
|
|
—
|
|
|
(10,548.0
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
5,411.2
|
|
|
738.8
|
|
|
—
|
|
|
6,150.0
|
|
|||||
Intangible assets, net
|
—
|
|
|
709.6
|
|
|
2,527.0
|
|
|
0.6
|
|
|
3,237.2
|
|
|||||
Intercompany notes receivable
|
3,658.2
|
|
|
10.3
|
|
|
32.8
|
|
|
(3,701.3
|
)
|
|
—
|
|
|||||
Other assets, net
|
67.2
|
|
|
88.1
|
|
|
69.4
|
|
|
(16.4
|
)
|
|
208.3
|
|
|||||
Total assets
|
$
|
21,672.5
|
|
|
$
|
20,563.5
|
|
|
$
|
9,318.6
|
|
|
$
|
(37,218.3
|
)
|
|
$
|
14,336.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable to banks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170.5
|
|
|
$
|
—
|
|
|
$
|
170.5
|
|
Current maturities of long-term debt
|
31.8
|
|
|
17.6
|
|
|
17.7
|
|
|
—
|
|
|
67.1
|
|
|||||
Accounts payable
|
38.9
|
|
|
269.6
|
|
|
153.9
|
|
|
—
|
|
|
462.4
|
|
|||||
Accrued excise taxes
|
9.2
|
|
|
12.1
|
|
|
5.1
|
|
|
—
|
|
|
26.4
|
|
|||||
Intercompany payable
|
10,853.5
|
|
|
8,279.9
|
|
|
3,433.7
|
|
|
(22,567.1
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
475.4
|
|
|
230.9
|
|
|
679.0
|
|
|
(356.7
|
)
|
|
1,028.6
|
|
|||||
Total current liabilities
|
11,408.8
|
|
|
8,810.1
|
|
|
4,459.9
|
|
|
(22,923.8
|
)
|
|
1,755.0
|
|
|||||
Long-term debt, less current maturities
|
5,407.0
|
|
|
33.1
|
|
|
1,456.9
|
|
|
—
|
|
|
6,897.0
|
|
|||||
Deferred income taxes
|
21.3
|
|
|
572.7
|
|
|
132.3
|
|
|
(16.3
|
)
|
|
710.0
|
|
|||||
Intercompany notes payable
|
—
|
|
|
3,682.3
|
|
|
19.0
|
|
|
(3,701.3
|
)
|
|
—
|
|
|||||
Other liabilities
|
45.6
|
|
|
25.5
|
|
|
113.4
|
|
|
—
|
|
|
184.5
|
|
|||||
Stockholders’ equity
|
4,789.8
|
|
|
7,439.8
|
|
|
3,137.1
|
|
|
(10,576.9
|
)
|
|
4,789.8
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
21,672.5
|
|
|
$
|
20,563.5
|
|
|
$
|
9,318.6
|
|
|
$
|
(37,218.3
|
)
|
|
$
|
14,336.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at February 28, 2013
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash investments
|
$
|
185.8
|
|
|
$
|
0.7
|
|
|
$
|
145.0
|
|
|
$
|
—
|
|
|
$
|
331.5
|
|
Accounts receivable, net
|
0.7
|
|
|
10.1
|
|
|
461.1
|
|
|
—
|
|
|
471.9
|
|
|||||
Inventories
|
151.5
|
|
|
1,019.4
|
|
|
317.2
|
|
|
(7.2
|
)
|
|
1,480.9
|
|
|||||
Intercompany receivable
|
4,598.2
|
|
|
9,291.4
|
|
|
1,075.1
|
|
|
(14,964.7
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
33.9
|
|
|
46.4
|
|
|
447.8
|
|
|
(341.2
|
)
|
|
186.9
|
|
|||||
Total current assets
|
4,970.1
|
|
|
10,368.0
|
|
|
2,446.2
|
|
|
(15,313.1
|
)
|
|
2,471.2
|
|
|||||
Property, plant and equipment, net
|
43.3
|
|
|
832.7
|
|
|
353.0
|
|
|
—
|
|
|
1,229.0
|
|
|||||
Investments in subsidiaries
|
7,307.0
|
|
|
2.8
|
|
|
—
|
|
|
(7,309.8
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
2,097.9
|
|
|
624.4
|
|
|
—
|
|
|
2,722.3
|
|
|||||
Intangible assets, net
|
—
|
|
|
686.5
|
|
|
184.9
|
|
|
—
|
|
|
871.4
|
|
|||||
Intercompany notes receivable
|
1,611.2
|
|
|
—
|
|
|
32.6
|
|
|
(1,643.8
|
)
|
|
—
|
|
|||||
Other assets, net
|
63.3
|
|
|
243.2
|
|
|
58.6
|
|
|
(20.9
|
)
|
|
344.2
|
|
|||||
Total assets
|
$
|
13,994.9
|
|
|
$
|
14,231.1
|
|
|
$
|
3,699.7
|
|
|
$
|
(24,287.6
|
)
|
|
$
|
7,638.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
9.8
|
|
|
$
|
17.7
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
27.6
|
|
Accounts payable
|
39.2
|
|
|
106.4
|
|
|
63.4
|
|
|
—
|
|
|
209.0
|
|
|||||
Accrued excise taxes
|
11.4
|
|
|
3.7
|
|
|
3.8
|
|
|
—
|
|
|
18.9
|
|
|||||
Intercompany payable
|
7,257.5
|
|
|
6,318.7
|
|
|
1,388.5
|
|
|
(14,964.7
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
518.2
|
|
|
171.1
|
|
|
76.1
|
|
|
(343.0
|
)
|
|
422.4
|
|
|||||
Total current liabilities
|
7,836.1
|
|
|
6,617.6
|
|
|
1,531.9
|
|
|
(15,307.7
|
)
|
|
677.9
|
|
|||||
Long-term debt, less current maturities
|
3,251.0
|
|
|
26.8
|
|
|
—
|
|
|
—
|
|
|
3,277.8
|
|
|||||
Deferred income taxes
|
—
|
|
|
543.0
|
|
|
77.5
|
|
|
(20.9
|
)
|
|
599.6
|
|
|||||
Intercompany notes payable
|
—
|
|
|
1,634.9
|
|
|
8.9
|
|
|
(1,643.8
|
)
|
|
—
|
|
|||||
Other liabilities
|
47.5
|
|
|
41.8
|
|
|
133.2
|
|
|
—
|
|
|
222.5
|
|
|||||
Stockholders’ equity
|
2,860.3
|
|
|
5,367.0
|
|
|
1,948.2
|
|
|
(7,315.2
|
)
|
|
2,860.3
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
13,994.9
|
|
|
$
|
14,231.1
|
|
|
$
|
3,699.7
|
|
|
$
|
(24,287.6
|
)
|
|
$
|
7,638.1
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2013
|
|||||||||||||||||||
Sales
|
$
|
1,762.9
|
|
|
$
|
2,815.8
|
|
|
$
|
1,413.2
|
|
|
$
|
(2,018.9
|
)
|
|
$
|
3,973.0
|
|
Less – excise taxes
|
(234.2
|
)
|
|
(110.3
|
)
|
|
(52.0
|
)
|
|
—
|
|
|
(396.5
|
)
|
|||||
Net sales
|
1,528.7
|
|
|
2,705.5
|
|
|
1,361.2
|
|
|
(2,018.9
|
)
|
|
3,576.5
|
|
|||||
Cost of product sold
|
(1,303.8
|
)
|
|
(1,871.8
|
)
|
|
(931.3
|
)
|
|
1,973.2
|
|
|
(2,133.7
|
)
|
|||||
Gross profit
|
224.9
|
|
|
833.7
|
|
|
429.9
|
|
|
(45.7
|
)
|
|
1,442.8
|
|
|||||
Selling, general and administrative expenses
|
(315.0
|
)
|
|
(260.8
|
)
|
|
(112.6
|
)
|
|
12.8
|
|
|
(675.6
|
)
|
|||||
Impairment of goodwill and intangible assets
|
—
|
|
|
—
|
|
|
(300.9
|
)
|
|
—
|
|
|
(300.9
|
)
|
|||||
Gain on remeasurement to fair value of equity method investment
|
—
|
|
|
1,642.0
|
|
|
—
|
|
|
—
|
|
|
1,642.0
|
|
|||||
Operating (loss) income
|
(90.1
|
)
|
|
2,214.9
|
|
|
16.4
|
|
|
(32.9
|
)
|
|
2,108.3
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
2,008.4
|
|
|
92.8
|
|
|
0.4
|
|
|
(2,013.3
|
)
|
|
88.3
|
|
|||||
Interest income
|
0.1
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
5.9
|
|
|||||
Intercompany interest income
|
117.3
|
|
|
122.8
|
|
|
1.1
|
|
|
(241.2
|
)
|
|
—
|
|
|||||
Interest expense
|
(206.5
|
)
|
|
(3.5
|
)
|
|
(30.6
|
)
|
|
—
|
|
|
(240.6
|
)
|
|||||
Intercompany interest expense
|
(130.3
|
)
|
|
(110.4
|
)
|
|
(0.5
|
)
|
|
241.2
|
|
|
—
|
|
|||||
Income (loss) before income taxes
|
1,698.9
|
|
|
2,316.6
|
|
|
(7.4
|
)
|
|
(2,046.2
|
)
|
|
1,961.9
|
|
|||||
Benefit from (provision for) income taxes
|
87.0
|
|
|
(246.3
|
)
|
|
(26.2
|
)
|
|
9.5
|
|
|
(176.0
|
)
|
|||||
Net income (loss)
|
$
|
1,785.9
|
|
|
$
|
2,070.3
|
|
|
$
|
(33.6
|
)
|
|
$
|
(2,036.7
|
)
|
|
$
|
1,785.9
|
|
Comprehensive income (loss)
|
$
|
1,747.8
|
|
|
$
|
2,098.9
|
|
|
$
|
(77.4
|
)
|
|
$
|
(2,021.5
|
)
|
|
$
|
1,747.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2012
|
|||||||||||||||||||
Sales
|
$
|
1,536.7
|
|
|
$
|
1,283.5
|
|
|
$
|
623.7
|
|
|
$
|
(1,060.5
|
)
|
|
$
|
2,383.4
|
|
Less – excise taxes
|
(158.8
|
)
|
|
(74.8
|
)
|
|
(49.6
|
)
|
|
—
|
|
|
(283.2
|
)
|
|||||
Net sales
|
1,377.9
|
|
|
1,208.7
|
|
|
574.1
|
|
|
(1,060.5
|
)
|
|
2,100.2
|
|
|||||
Cost of product sold
|
(1,105.0
|
)
|
|
(857.5
|
)
|
|
(344.1
|
)
|
|
1,052.9
|
|
|
(1,253.7
|
)
|
|||||
Gross profit
|
272.9
|
|
|
351.2
|
|
|
230.0
|
|
|
(7.6
|
)
|
|
846.5
|
|
|||||
Selling, general and administrative expenses
|
(249.2
|
)
|
|
(81.0
|
)
|
|
(130.7
|
)
|
|
9.9
|
|
|
(451.0
|
)
|
|||||
Operating income
|
23.7
|
|
|
270.2
|
|
|
99.3
|
|
|
2.3
|
|
|
395.5
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
427.0
|
|
|
183.5
|
|
|
0.4
|
|
|
(427.3
|
)
|
|
183.6
|
|
|||||
Interest income
|
0.4
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.7
|
|
|||||
Intercompany interest income
|
59.2
|
|
|
144.1
|
|
|
1.2
|
|
|
(204.5
|
)
|
|
—
|
|
|||||
Interest expense
|
(169.0
|
)
|
|
(0.6
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
(171.4
|
)
|
|||||
Intercompany interest expense
|
(144.1
|
)
|
|
(60.3
|
)
|
|
(0.1
|
)
|
|
204.5
|
|
|
—
|
|
|||||
Loss on write-off of financing costs
|
(2.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.8
|
)
|
|||||
Income before income taxes
|
194.4
|
|
|
536.9
|
|
|
103.3
|
|
|
(425.0
|
)
|
|
409.6
|
|
|||||
Benefit from (provision for) income taxes
|
111.7
|
|
|
(227.1
|
)
|
|
12.4
|
|
|
(0.5
|
)
|
|
(103.5
|
)
|
|||||
Net income
|
$
|
306.1
|
|
|
$
|
309.8
|
|
|
$
|
115.7
|
|
|
$
|
(425.5
|
)
|
|
$
|
306.1
|
|
Comprehensive income
|
$
|
297.7
|
|
|
$
|
308.7
|
|
|
$
|
108.6
|
|
|
$
|
(417.3
|
)
|
|
$
|
297.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2013
|
|||||||||||||||||||
Sales
|
$
|
641.1
|
|
|
$
|
1,182.4
|
|
|
$
|
591.6
|
|
|
$
|
(821.6
|
)
|
|
$
|
1,593.5
|
|
Less – excise taxes
|
(80.9
|
)
|
|
(51.2
|
)
|
|
(18.1
|
)
|
|
—
|
|
|
(150.2
|
)
|
|||||
Net sales
|
560.2
|
|
|
1,131.2
|
|
|
573.5
|
|
|
(821.6
|
)
|
|
1,443.3
|
|
|||||
Cost of product sold
|
(478.8
|
)
|
|
(779.1
|
)
|
|
(391.4
|
)
|
|
815.7
|
|
|
(833.6
|
)
|
|||||
Gross profit
|
81.4
|
|
|
352.1
|
|
|
182.1
|
|
|
(5.9
|
)
|
|
609.7
|
|
|||||
Selling, general and administrative expenses
|
(95.6
|
)
|
|
(116.3
|
)
|
|
(38.5
|
)
|
|
4.5
|
|
|
(245.9
|
)
|
|||||
Operating (loss) income
|
(14.2
|
)
|
|
235.8
|
|
|
143.6
|
|
|
(1.4
|
)
|
|
363.8
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
285.6
|
|
|
18.7
|
|
|
0.2
|
|
|
(286.5
|
)
|
|
18.0
|
|
|||||
Interest income
|
—
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|||||
Intercompany interest income
|
46.6
|
|
|
44.9
|
|
|
0.3
|
|
|
(91.8
|
)
|
|
—
|
|
|||||
Interest expense
|
(75.7
|
)
|
|
(0.5
|
)
|
|
(15.4
|
)
|
|
—
|
|
|
(91.6
|
)
|
|||||
Intercompany interest expense
|
(47.6
|
)
|
|
(44.0
|
)
|
|
(0.2
|
)
|
|
91.8
|
|
|
—
|
|
|||||
Income before income taxes
|
194.7
|
|
|
254.9
|
|
|
130.5
|
|
|
(287.9
|
)
|
|
292.2
|
|
|||||
Benefit from (provision for) income taxes
|
16.3
|
|
|
(93.3
|
)
|
|
(4.5
|
)
|
|
0.3
|
|
|
(81.2
|
)
|
|||||
Net income
|
$
|
211.0
|
|
|
$
|
161.6
|
|
|
$
|
126.0
|
|
|
$
|
(287.6
|
)
|
|
$
|
211.0
|
|
Comprehensive income
|
$
|
240.4
|
|
|
$
|
183.1
|
|
|
$
|
157.0
|
|
|
$
|
(340.1
|
)
|
|
$
|
240.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2012
|
|||||||||||||||||||
Sales
|
$
|
570.1
|
|
|
$
|
483.1
|
|
|
$
|
223.5
|
|
|
$
|
(416.3
|
)
|
|
$
|
860.4
|
|
Less – excise taxes
|
(55.4
|
)
|
|
(20.2
|
)
|
|
(17.9
|
)
|
|
—
|
|
|
(93.5
|
)
|
|||||
Net sales
|
514.7
|
|
|
462.9
|
|
|
205.6
|
|
|
(416.3
|
)
|
|
766.9
|
|
|||||
Cost of product sold
|
(424.3
|
)
|
|
(320.0
|
)
|
|
(124.8
|
)
|
|
413.0
|
|
|
(456.1
|
)
|
|||||
Gross profit
|
90.4
|
|
|
142.9
|
|
|
80.8
|
|
|
(3.3
|
)
|
|
310.8
|
|
|||||
Selling, general and administrative expenses
|
(82.6
|
)
|
|
(28.7
|
)
|
|
(44.8
|
)
|
|
4.1
|
|
|
(152.0
|
)
|
|||||
Operating income
|
7.8
|
|
|
114.2
|
|
|
36.0
|
|
|
0.8
|
|
|
158.8
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
141.4
|
|
|
53.9
|
|
|
0.2
|
|
|
(143.0
|
)
|
|
52.5
|
|
|||||
Interest income
|
0.3
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.8
|
|
|||||
Intercompany interest income
|
19.7
|
|
|
48.7
|
|
|
0.4
|
|
|
(68.8
|
)
|
|
—
|
|
|||||
Interest expense
|
(62.9
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(63.2
|
)
|
|||||
Intercompany interest expense
|
(48.7
|
)
|
|
(20.1
|
)
|
|
—
|
|
|
68.8
|
|
|
—
|
|
|||||
Income before income taxes
|
57.6
|
|
|
196.7
|
|
|
37.8
|
|
|
(142.2
|
)
|
|
149.9
|
|
|||||
Benefit from (provision for) income taxes
|
51.9
|
|
|
(96.1
|
)
|
|
4.0
|
|
|
(0.2
|
)
|
|
(40.4
|
)
|
|||||
Net income
|
$
|
109.5
|
|
|
$
|
100.6
|
|
|
$
|
41.8
|
|
|
$
|
(142.4
|
)
|
|
$
|
109.5
|
|
Comprehensive income
|
$
|
117.1
|
|
|
$
|
101.0
|
|
|
$
|
47.3
|
|
|
$
|
(148.3
|
)
|
|
$
|
117.1
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2013
|
|||||||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(266.2
|
)
|
|
$
|
910.0
|
|
|
$
|
4.1
|
|
|
$
|
(18.8
|
)
|
|
$
|
629.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of business, net of cash acquired
|
—
|
|
|
(1,770.1
|
)
|
|
(2,910.9
|
)
|
|
—
|
|
|
(4,681.0
|
)
|
|||||
Purchases of property, plant and equipment
|
(5.7
|
)
|
|
(45.9
|
)
|
|
(34.3
|
)
|
|
—
|
|
|
(85.9
|
)
|
|||||
Proceeds from sales of assets
|
—
|
|
|
0.2
|
|
|
7.6
|
|
|
—
|
|
|
7.8
|
|
|||||
Net proceeds from intercompany notes
|
859.2
|
|
|
—
|
|
|
—
|
|
|
(859.2
|
)
|
|
—
|
|
|||||
Net investments in equity affiliates
|
(1,095.0
|
)
|
|
(5.0
|
)
|
|
—
|
|
|
1,100.0
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
2.2
|
|
|
(0.6
|
)
|
|
—
|
|
|
1.6
|
|
|||||
Net cash used in investing activities
|
(241.5
|
)
|
|
(1,818.6
|
)
|
|
(2,938.2
|
)
|
|
240.8
|
|
|
(4,757.5
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payments of dividends
|
—
|
|
|
—
|
|
|
(18.8
|
)
|
|
18.8
|
|
|
—
|
|
|||||
Net (returns of capital to) contributions from equity affiliates
|
—
|
|
|
(188.4
|
)
|
|
1,288.4
|
|
|
(1,100.0
|
)
|
|
—
|
|
|||||
Net (repayments of) proceeds from intercompany notes
|
(1,941.5
|
)
|
|
1,129.9
|
|
|
(47.6
|
)
|
|
859.2
|
|
|
—
|
|
|||||
Proceeds from issuance of long-term debt
|
2,225.0
|
|
|
—
|
|
|
1,500.0
|
|
|
—
|
|
|
3,725.0
|
|
|||||
Net proceeds from notes payable
|
—
|
|
|
—
|
|
|
170.6
|
|
|
—
|
|
|
170.6
|
|
|||||
Proceeds from exercises of employee stock options
|
93.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93.1
|
|
|||||
Excess tax benefits from stock-based payment awards
|
64.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64.7
|
|
|||||
Proceeds from employee stock purchases
|
2.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|||||
Principal payments of long-term debt
|
(49.3
|
)
|
|
(15.0
|
)
|
|
(26.3
|
)
|
|
—
|
|
|
(90.6
|
)
|
|||||
Payments of financing costs of long-term debt
|
(69.6
|
)
|
|
—
|
|
|
(12.6
|
)
|
|
—
|
|
|
(82.2
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(16.4
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
(18.0
|
)
|
|||||
Net cash provided by financing activities
|
324.9
|
|
|
910.1
|
|
|
2,852.1
|
|
|
(222.0
|
)
|
|
3,865.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash investments
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
(3.0
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash and cash investments
|
(182.8
|
)
|
|
1.5
|
|
|
(85.0
|
)
|
|
—
|
|
|
(266.3
|
)
|
|||||
Cash and cash investments, beginning of period
|
185.8
|
|
|
0.7
|
|
|
145.0
|
|
|
—
|
|
|
331.5
|
|
|||||
Cash and cash investments, end of period
|
$
|
3.0
|
|
|
$
|
2.2
|
|
|
$
|
60.0
|
|
|
$
|
—
|
|
|
$
|
65.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2012
|
|||||||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(217.5
|
)
|
|
$
|
506.4
|
|
|
$
|
100.1
|
|
|
$
|
—
|
|
|
$
|
389.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of business, net of cash acquired
|
—
|
|
|
(159.3
|
)
|
|
—
|
|
|
—
|
|
|
(159.3
|
)
|
|||||
Purchases of property, plant and equipment
|
(7.9
|
)
|
|
(33.4
|
)
|
|
(10.9
|
)
|
|
—
|
|
|
(52.2
|
)
|
|||||
Proceeds from sales of assets
|
—
|
|
|
4.9
|
|
|
3.1
|
|
|
—
|
|
|
8.0
|
|
|||||
Proceeds from notes receivable
|
1.2
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|||||
Net proceeds from intercompany notes
|
307.2
|
|
|
—
|
|
|
—
|
|
|
(307.2
|
)
|
|
—
|
|
|||||
Net returns of capital from equity affiliates
|
14.0
|
|
|
—
|
|
|
—
|
|
|
(14.0
|
)
|
|
—
|
|
|||||
Other investing activities
|
(0.5
|
)
|
|
0.2
|
|
|
(1.0
|
)
|
|
—
|
|
|
(1.3
|
)
|
|||||
Net cash provided by (used in) investing activities
|
314.0
|
|
|
(184.2
|
)
|
|
(8.8
|
)
|
|
(321.2
|
)
|
|
(200.2
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net contributions from (returns of capital to) equity affiliates
|
0.1
|
|
|
(7.9
|
)
|
|
(6.2
|
)
|
|
14.0
|
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
0.5
|
|
|
(307.5
|
)
|
|
(0.2
|
)
|
|
307.2
|
|
|
—
|
|
|||||
Proceeds from issuance of long-term debt
|
2,050.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,050.0
|
|
|||||
Net repayments of notes payable
|
(298.0
|
)
|
|
—
|
|
|
(58.0
|
)
|
|
—
|
|
|
(356.0
|
)
|
|||||
Proceeds from exercises of employee stock options
|
135.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
135.0
|
|
|||||
Excess tax benefits from stock-based payment awards
|
17.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.2
|
|
|||||
Proceeds from employee stock purchases
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||||
Principal payments of long-term debt
|
(846.4
|
)
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
(851.6
|
)
|
|||||
Payments of financing costs of long-term debt
|
(35.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35.2
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||||
Payment of restricted cash upon issuance of long-term debt
|
(650.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(650.0
|
)
|
|||||
Purchases of treasury stock
|
(383.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(383.0
|
)
|
|||||
Net cash used in financing activities
|
(7.7
|
)
|
|
(320.6
|
)
|
|
(64.9
|
)
|
|
321.2
|
|
|
(72.0
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
and cash investments
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
(2.1
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash investments
|
88.8
|
|
|
1.6
|
|
|
24.3
|
|
|
—
|
|
|
114.7
|
|
|||||
Cash and cash investments, beginning
of period
|
0.5
|
|
|
0.6
|
|
|
84.7
|
|
|
—
|
|
|
85.8
|
|
|||||
Cash and cash investments, end of
period
|
$
|
89.3
|
|
|
$
|
2.2
|
|
|
$
|
109.0
|
|
|
$
|
—
|
|
|
$
|
200.5
|
|
|
For the Nine Months
Ended November 30, |
|
For the Three Months
Ended November 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Cost of Product Sold:
|
|
|
|
|
|
|
|
||||||||
Flow through of inventory step-up
|
$
|
11.0
|
|
|
$
|
5.7
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
Amortization of favorable interim supply agreement
|
4.3
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
||||
Cost of Product Sold
|
15.3
|
|
|
5.7
|
|
|
2.2
|
|
|
3.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, General and Administrative Expenses:
|
|
|
|
|
|
|
|
||||||||
Transaction and related costs associated with pending and completed acquisitions
|
43.8
|
|
|
17.6
|
|
|
8.9
|
|
|
8.5
|
|
||||
Deferred compensation
|
7.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restructuring charges
|
(1.0
|
)
|
|
1.0
|
|
|
(0.1
|
)
|
|
0.3
|
|
||||
Other costs
|
(1.8
|
)
|
|
3.3
|
|
|
0.2
|
|
|
1.9
|
|
||||
Selling, General and Administrative Expenses
|
48.0
|
|
|
21.9
|
|
|
9.0
|
|
|
10.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Impairment of Goodwill and Intangible Assets
|
300.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain on Remeasurement to Fair Value of Equity Method Investment
|
(1,642.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Restructuring Charges and Unusual Items
|
$
|
(1,277.8
|
)
|
|
$
|
27.6
|
|
|
$
|
11.2
|
|
|
$
|
14.1
|
|
|
For the Nine Months
Ended November 30, |
|
For the Three Months
Ended November 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Beer
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
2,237.8
|
|
|
$
|
2,059.9
|
|
|
$
|
661.6
|
|
|
$
|
547.4
|
|
Segment operating income
|
$
|
572.9
|
|
|
$
|
345.4
|
|
|
$
|
212.5
|
|
|
$
|
79.0
|
|
Long-lived tangible assets
|
$
|
694.4
|
|
|
$
|
8.8
|
|
|
$
|
694.4
|
|
|
$
|
8.8
|
|
Total assets
|
$
|
7,214.7
|
|
|
$
|
350.8
|
|
|
$
|
7,214.7
|
|
|
$
|
350.8
|
|
Capital expenditures
|
$
|
23.2
|
|
|
$
|
0.8
|
|
|
$
|
19.6
|
|
|
$
|
0.4
|
|
Depreciation and amortization
|
$
|
24.2
|
|
|
$
|
2.0
|
|
|
$
|
11.1
|
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended November 30, |
|
For the Three Months
Ended November 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Wine and Spirits
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Wine
|
$
|
1,938.3
|
|
|
$
|
1,870.7
|
|
|
$
|
711.9
|
|
|
$
|
693.5
|
|
Spirits
|
213.8
|
|
|
229.5
|
|
|
69.8
|
|
|
73.4
|
|
||||
Net sales
|
$
|
2,152.1
|
|
|
$
|
2,100.2
|
|
|
$
|
781.7
|
|
|
$
|
766.9
|
|
Segment operating income
|
$
|
471.9
|
|
|
$
|
490.8
|
|
|
$
|
186.1
|
|
|
$
|
196.5
|
|
Equity in earnings of equity method investees
|
$
|
18.1
|
|
|
$
|
13.1
|
|
|
$
|
18.0
|
|
|
$
|
14.2
|
|
Long-lived tangible assets
|
$
|
1,094.6
|
|
|
$
|
1,107.9
|
|
|
$
|
1,094.6
|
|
|
$
|
1,107.9
|
|
Investments in equity method investees
|
$
|
81.9
|
|
|
$
|
80.6
|
|
|
$
|
81.9
|
|
|
$
|
80.6
|
|
Total assets
|
$
|
6,704.6
|
|
|
$
|
7,141.6
|
|
|
$
|
6,704.6
|
|
|
$
|
7,141.6
|
|
Capital expenditures
|
$
|
51.0
|
|
|
$
|
45.3
|
|
|
$
|
15.4
|
|
|
$
|
14.6
|
|
Depreciation and amortization
|
$
|
72.2
|
|
|
$
|
67.8
|
|
|
$
|
24.7
|
|
|
$
|
23.4
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate Operations and Other
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Segment operating loss
|
$
|
(71.7
|
)
|
|
$
|
(67.7
|
)
|
|
$
|
(23.6
|
)
|
|
$
|
(23.6
|
)
|
Long-lived tangible assets
|
$
|
116.4
|
|
|
$
|
128.8
|
|
|
$
|
116.4
|
|
|
$
|
128.8
|
|
Total assets
|
$
|
417.0
|
|
|
$
|
1,035.2
|
|
|
$
|
417.0
|
|
|
$
|
1,035.2
|
|
Capital expenditures
|
$
|
12.0
|
|
|
$
|
6.9
|
|
|
$
|
1.7
|
|
|
$
|
2.0
|
|
Depreciation and amortization
|
$
|
17.4
|
|
|
$
|
17.7
|
|
|
$
|
6.3
|
|
|
$
|
6.1
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring Charges and Unusual Items
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
$
|
1,277.8
|
|
|
$
|
(27.6
|
)
|
|
$
|
(11.2
|
)
|
|
$
|
(14.1
|
)
|
Equity in losses of equity method investees
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
||||||||
Consolidation and Eliminations
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
(813.4
|
)
|
|
$
|
(2,059.9
|
)
|
|
$
|
—
|
|
|
$
|
(547.4
|
)
|
Operating income
|
$
|
(142.6
|
)
|
|
$
|
(345.4
|
)
|
|
$
|
—
|
|
|
$
|
(79.0
|
)
|
Equity in earnings of Crown Imports
|
$
|
70.3
|
|
|
$
|
170.7
|
|
|
$
|
—
|
|
|
$
|
38.5
|
|
Long-lived tangible assets
|
$
|
—
|
|
|
$
|
(8.8
|
)
|
|
$
|
—
|
|
|
$
|
(8.8
|
)
|
Investments in equity method investees
|
$
|
—
|
|
|
$
|
145.9
|
|
|
$
|
—
|
|
|
$
|
145.9
|
|
Total assets
|
$
|
—
|
|
|
$
|
(204.9
|
)
|
|
$
|
—
|
|
|
$
|
(204.9
|
)
|
Capital expenditures
|
$
|
(0.3
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
Depreciation and amortization
|
$
|
(0.5
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
3,576.5
|
|
|
$
|
2,100.2
|
|
|
$
|
1,443.3
|
|
|
$
|
766.9
|
|
Operating income
|
$
|
2,108.3
|
|
|
$
|
395.5
|
|
|
$
|
363.8
|
|
|
$
|
158.8
|
|
Equity in earnings of equity method investees
|
$
|
88.3
|
|
|
$
|
183.6
|
|
|
$
|
18.0
|
|
|
$
|
52.5
|
|
Long-lived tangible assets
|
$
|
1,905.4
|
|
|
$
|
1,236.7
|
|
|
$
|
1,905.4
|
|
|
$
|
1,236.7
|
|
Investments in equity method investees
|
$
|
81.9
|
|
|
$
|
226.5
|
|
|
$
|
81.9
|
|
|
$
|
226.5
|
|
Total assets
|
$
|
14,336.3
|
|
|
$
|
8,322.7
|
|
|
$
|
14,336.3
|
|
|
$
|
8,322.7
|
|
Capital expenditures
|
$
|
85.9
|
|
|
$
|
52.2
|
|
|
$
|
36.7
|
|
|
$
|
16.6
|
|
Depreciation and amortization
|
$
|
113.3
|
|
|
$
|
85.5
|
|
|
$
|
42.1
|
|
|
$
|
29.5
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
The proceeds from the issuance of
$1,550.0 million
aggregate principal amount of May 2013 Senior Notes (as defined below);
|
•
|
$1,500.0 million
in term loans consisting of a
$500.0 million
European Term A Facility (as defined below) and a
$1,000.0 million
European Term B Facility (as defined below) under the 2013 Credit Agreement (as defined below);
|
•
|
$675.0 million
in term loans under the U.S. Term A-2 facility (as defined below) under the 2013 Credit Agreement;
|
•
|
$208.0 million
in proceeds of borrowings under the Company’s then existing accounts receivable securitization facility (as discussed below);
|
•
|
$580.0 million
in borrowings under the revolving credit facility under the 2013 Credit Agreement; and
|
•
|
Approximately
$232.0 million
of cash on hand (inclusive of
$13.0 million
of borrowings under a subsidiary working capital facility).
|
|
Third
Quarter 2014 |
|
Third
Quarter 2013 |
|
% Increase
(Decrease)
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
661.6
|
|
|
$
|
547.4
|
|
|
21
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|||||
Wine
|
711.9
|
|
|
693.5
|
|
|
3
|
%
|
||
Spirits
|
69.8
|
|
|
73.4
|
|
|
(5
|
%)
|
||
Wine and Spirits
|
781.7
|
|
|
766.9
|
|
|
2
|
%
|
||
Consolidations and eliminations
|
—
|
|
|
(547.4
|
)
|
|
100
|
%
|
||
Consolidated Net Sales
|
$
|
1,443.3
|
|
|
$
|
766.9
|
|
|
88
|
%
|
|
Third
Quarter 2014 |
|
Third
Quarter 2013 |
|
% Increase
(Decrease) |
||||
(in millions)
|
|
|
|
|
|
||||
Beer
|
$
|
212.5
|
|
|
$
|
79.0
|
|
|
169%
|
Wine and Spirits
|
186.1
|
|
|
196.5
|
|
|
(5%)
|
||
Corporate Operations and Other
|
(23.6
|
)
|
|
(23.6
|
)
|
|
—%
|
||
Consolidations and eliminations
|
—
|
|
|
(79.0
|
)
|
|
100%
|
||
Total Reportable Segments
|
375.0
|
|
|
172.9
|
|
|
117%
|
||
Restructuring Charges and Unusual Items
|
(11.2
|
)
|
|
(14.1
|
)
|
|
21%
|
||
Consolidated Operating Income
|
$
|
363.8
|
|
|
$
|
158.8
|
|
|
129%
|
|
Third
Quarter 2014 |
|
Third
Quarter 2013 |
||||
(in millions)
|
|
|
|
||||
Cost of Product Sold
|
|
|
|
||||
Amortization of favorable interim supply agreement
|
$
|
2.2
|
|
|
$
|
—
|
|
Flow through of inventory step-up
|
—
|
|
|
3.4
|
|
||
Cost of Product Sold
|
2.2
|
|
|
3.4
|
|
||
|
|
|
|
||||
Selling, General and Administrative Expenses
|
|
|
|
||||
Transaction and related costs associated with pending and completed acquisitions
|
8.9
|
|
|
8.5
|
|
||
Restructuring charges
|
(0.1
|
)
|
|
0.3
|
|
||
Other costs
|
0.2
|
|
|
1.9
|
|
||
Selling, General and Administrative Expenses
|
9.0
|
|
|
10.7
|
|
||
|
|
|
|
||||
Restructuring Charges and Unusual Items
|
$
|
11.2
|
|
|
$
|
14.1
|
|
|
Nine Months
2014 |
|
Nine Months
2013 |
|
% Increase
(Decrease) |
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
2,237.8
|
|
|
$
|
2,059.9
|
|
|
9
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|||||
Wine
|
1,938.3
|
|
|
1,870.7
|
|
|
4
|
%
|
||
Spirits
|
213.8
|
|
|
229.5
|
|
|
(7
|
%)
|
||
Wine and Spirits
|
2,152.1
|
|
|
2,100.2
|
|
|
2
|
%
|
||
Consolidations and eliminations
|
(813.4
|
)
|
|
(2,059.9
|
)
|
|
61
|
%
|
||
Consolidated Net Sales
|
$
|
3,576.5
|
|
|
$
|
2,100.2
|
|
|
70
|
%
|
|
Nine Months
2014 |
|
Nine Months
2013 |
|
Increase
(Decrease) |
||||||
(in millions)
|
|
|
|
|
|
||||||
Transaction and related costs associated with pending and completed acquisitions
|
$
|
43.8
|
|
|
$
|
17.6
|
|
|
$
|
26.2
|
|
Deferred compensation
|
7.0
|
|
|
—
|
|
|
7.0
|
|
|||
Restructuring charges
|
(1.0
|
)
|
|
1.0
|
|
|
(2.0
|
)
|
|||
Other costs
|
(1.8
|
)
|
|
3.3
|
|
|
(5.1
|
)
|
|||
|
$
|
48.0
|
|
|
$
|
21.9
|
|
|
$
|
26.1
|
|
|
Nine Months
2014 |
|
Nine Months
2013 |
|
% Increase
(Decrease) |
||||
(in millions)
|
|
|
|
|
|
||||
Beer
|
$
|
572.9
|
|
|
$
|
345.4
|
|
|
66%
|
Wine and Spirits
|
471.9
|
|
|
490.8
|
|
|
(4%)
|
||
Corporate Operations and Other
|
(71.7
|
)
|
|
(67.7
|
)
|
|
(6%)
|
||
Consolidations and eliminations
|
(142.6
|
)
|
|
(345.4
|
)
|
|
59%
|
||
Total Reportable Segments
|
830.5
|
|
|
423.1
|
|
|
96%
|
||
Restructuring Charges and Unusual Items
|
1,277.8
|
|
|
(27.6
|
)
|
|
NM
|
||
Consolidated Operating Income
|
$
|
2,108.3
|
|
|
$
|
395.5
|
|
|
NM
|
|
|
|
|
|
|
||||
NM = Not Meaningful
|
|
|
|
|
|
|
Nine Months
2014 |
|
Nine Months
2013 |
||||
(in millions)
|
|
|
|
||||
Cost of Product Sold
|
|
|
|
||||
Flow through of inventory step-up
|
$
|
11.0
|
|
|
$
|
5.7
|
|
Amortization of favorable interim supply agreement
|
4.3
|
|
|
—
|
|
||
Cost of Product Sold
|
15.3
|
|
|
5.7
|
|
||
|
|
|
|
||||
Selling, General and Administrative Expenses
|
|
|
|
||||
Transaction and related costs associated with pending and completed acquisitions
|
43.8
|
|
|
17.6
|
|
||
Deferred compensation
|
7.0
|
|
|
—
|
|
||
Restructuring charges
|
(1.0
|
)
|
|
1.0
|
|
||
Other costs
|
(1.8
|
)
|
|
3.3
|
|
||
Selling, General and Administrative Expenses
|
48.0
|
|
|
21.9
|
|
||
|
|
|
|
||||
Impairment of Goodwill and Intangible Assets
|
300.9
|
|
|
—
|
|
||
|
|
|
|
||||
Gain on Remeasurement to Fair Value of Equity Method Investment
|
(1,642.0
|
)
|
|
—
|
|
||
|
|
|
|
||||
Restructuring Charges and Unusual Items
|
$
|
(1,277.8
|
)
|
|
$
|
27.6
|
|
|
U.S.
Term A
Facility
|
|
U.S.
Term A-1
Facility
|
|
U.S.
Term A-2
Facility
|
|
European
Term A
Facility
|
|
European
Term B
Facility
|
|
Total
|
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2014
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2015
|
19.4
|
|
|
1.8
|
|
|
25.3
|
|
|
18.7
|
|
|
7.5
|
|
|
72.7
|
|
||||||
2016
|
38.7
|
|
|
2.5
|
|
|
50.6
|
|
|
37.5
|
|
|
10.0
|
|
|
139.3
|
|
||||||
2017
|
51.5
|
|
|
2.5
|
|
|
67.5
|
|
|
50.0
|
|
|
10.0
|
|
|
181.5
|
|
||||||
2018
|
51.5
|
|
|
2.5
|
|
|
67.5
|
|
|
50.0
|
|
|
10.0
|
|
|
181.5
|
|
||||||
2019
|
335.2
|
|
|
2.4
|
|
|
438.8
|
|
|
325.0
|
|
|
10.0
|
|
|
1,111.4
|
|
||||||
Thereafter
|
—
|
|
|
233.3
|
|
|
—
|
|
|
—
|
|
|
945.0
|
|
|
1,178.3
|
|
||||||
|
$
|
496.3
|
|
|
$
|
245.0
|
|
|
$
|
649.7
|
|
|
$
|
481.2
|
|
|
$
|
992.5
|
|
|
$
|
2,864.7
|
|
|
PAYMENTS DUE BY PERIOD
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
After
5 years
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable to banks
|
$
|
170.5
|
|
|
$
|
170.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt (excluding unamortized discount)
|
$
|
6,967.1
|
|
|
$
|
17.9
|
|
|
$
|
737.0
|
|
|
$
|
1,771.6
|
|
|
$
|
4,440.6
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 6.
|
Exhibits.
|
|
|
CONSTELLATION BRANDS, INC.
|
|
|
|
|
|
Dated:
|
January 9, 2014
|
By:
|
/s/ David E. Klein
|
|
|
|
David E. Klein, Senior Vice President,
Treasurer and Controller
|
|
|
|
|
Dated:
|
January 9, 2014
|
By:
|
/s/ Robert Ryder
|
|
|
|
Robert Ryder, Executive Vice President and
Chief Financial Officer (principal financial
officer and principal accounting officer)
|
Exhibit No.
|
|
|
2.1
|
|
Membership Interest Purchase Agreement, dated as of June 28, 2012, among Constellation Beers Ltd., Constellation Brands Beach Holdings, Inc., Constellation Brands, Inc. and Anheuser-Busch InBev SA/NV (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated June 28, 2012, filed July 2, 2012 and incorporated herein by reference.) +
|
|
|
|
2.2
|
|
Amended and Restated Membership Interest Purchase Agreement, dated as of February 13, 2013, among Constellation Beers Ltd., Constellation Brands Beach Holdings, Inc., Constellation Brands, Inc. and Anheuser-Busch InBev SA/NV (filed as Exhibit 2.1 to the Company’s Amendment No. 1 to Current Report on Form 8-K/A dated February 13, 2013, filed February 25, 2013 and incorporated herein by reference.) +
|
|
|
|
2.3
|
|
First Amendment dated as of April 19, 2013, to the Amended and Restated Membership Interest Purchase Agreement, dated as of February 13, 2013, among Constellation Beers Ltd., Constellation Brands Beach Holdings, Inc., Constellation Brands, Inc. and Anheuser-Busch InBev SA/NV (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated April 19, 2013, filed April 19, 2013 and incorporated herein by reference.) +
|
|
|
|
2.4
|
|
Stock Purchase Agreement dated as of February 13, 2013, between Anheuser-Busch InBev SA/NV and Constellation Brands, Inc. (filed as Exhibit 2.2 to the Company’s Amendment No. 1 to Current Report on Form 8-K/A dated February 13, 2013, filed February 25, 2013 and incorporated herein by reference.) +
|
|
|
|
2.5
|
|
First Amendment dated as of April 19, 2013, to the Stock Purchase Agreement dated as of February 13, 2013, between Anheuser-Busch InBev SA/NV and Constellation Brands, Inc. (filed as Exhibit 2.2 to the Company’s Current Report on Form 8-K dated April 19, 2013, filed April 19, 2013 and incorporated herein by reference.) +
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2009 and incorporated herein by reference.)
|
|
|
|
3.2
|
|
Certificate of Amendment to the Certificate of Incorporation of the Company (filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2009 and incorporated herein by reference.)
|
|
|
|
3.3
|
|
Amended and Restated By-Laws of the Company (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K dated December 6, 2007, filed December 12, 2007 and incorporated herein by reference.) #
|
|
|
|
4.1
|
|
Indenture, dated as of August 15, 2006, by and among the Company, as Issuer, certain subsidiaries, as Guarantors and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated August 15, 2006, filed August 18, 2006 and incorporated herein by reference.) #
|
|
|
|
4.2
|
|
Supplemental Indenture No. 1, with respect to 7.25% Senior Notes due 2016, dated as of August 15, 2006, among the Company, as Issuer, certain subsidiaries, as Guarantors, and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated August 15, 2006, filed August 18, 2006 and incorporated herein by reference.) #
|
|
|
|
4.3
|
|
Supplemental Indenture No. 2, dated as of November 30, 2006, by and among the Company, Vincor International Partnership, Vincor International II, LLC, Vincor Holdings, Inc., R.H. Phillips, Inc., The Hogue Cellars, Ltd., Vincor Finance, LLC, and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.28 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2006 and incorporated herein by reference.) #
|
|
|
|
4.4
|
|
Supplemental Indenture No. 3, dated as of May 4, 2007, by and among the Company, Barton SMO Holdings LLC, ALCOFI INC., and Spirits Marque One LLC, and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.32 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2007 and incorporated herein by reference.) #
|
|
|
|
4.5
|
|
Supplemental Indenture No. 4, with respect to 8 3/8% Senior Notes due 2014, dated as of December 5, 2007, by and among the Company, as Issuer, certain subsidiaries, as Guarantors, and The Bank of New York Trust Company, N.A., (as successor to BNY Midwest Trust Company), as Trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated December 5, 2007, filed December 11, 2007 and incorporated herein by reference.) #
|
|
|
|
4.6
|
|
Supplemental Indenture No. 5, dated as of January 22, 2008, by and among the Company, BWE, Inc., Atlas Peak Vineyards, Inc., Buena Vista Winery, Inc., Clos du Bois Wines, Inc., Gary Farrell Wines, Inc., Peak Wines International, Inc., and Planet 10 Spirits, LLC, and The Bank of New York Trust Company, N.A. (successor trustee to BNY Midwest Trust Company), as Trustee (filed as Exhibit 4.37 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2008 and incorporated herein by reference.) #
|
|
|
|
4.7
|
|
Supplemental Indenture No. 6, dated as of February 27, 2009, by and among the Company, Constellation Services LLC, and The Bank of New York Mellon Trust Company National Association (successor trustee to BNY Midwest Trust Company), as Trustee (filed as Exhibit 4.31 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2009 and incorporated herein by reference.)
|
|
|
|
4.8
|
|
Supplemental Indenture No. 7, dated as of June 7, 2013, among Constellation Brands Beach Holdings, Inc., Crown Imports LLC, Constellation Brands, Inc., and The Bank of New York Mellon Trust Company, National Association, as trustee (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated June 7, 2013, filed June 11, 2013 and incorporated herein by reference.)
|
|
|
|
4.9
|
|
Indenture, with respect to 7.25% Senior Notes due May 2017, dated May 14, 2007, by and among the Company, as Issuer, certain subsidiaries, as Guarantors, and The Bank of New York Trust Company, N.A., as Trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated May 9, 2007, filed May 14, 2007 and incorporated herein by reference.) #
|
|
|
|
4.10
|
|
Supplemental Indenture No. 1, dated as of January 22, 2008, by and among the Company, BWE, Inc., Atlas Peak Vineyards, Inc., Buena Vista Winery, Inc., Clos du Bois Wines, Inc., Gary Farrell Wines, Inc., Peak Wines International, Inc., and Planet 10 Spirits, LLC, and The Bank of New York Trust Company, N.A. (successor trustee to BNY Midwest Trust Company), as Trustee (filed as Exhibit 4.39 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2008 and incorporated herein by reference.) #
|
|
|
|
4.11
|
|
Supplemental Indenture No. 2, dated as of February 27, 2009, by and among the Company, Constellation Services LLC, and The Bank of New York Mellon Trust Company National Association (successor trustee to BNY Midwest Trust Company), as Trustee (filed as Exhibit 4.34 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2009 and incorporated herein by reference.)
|
|
|
|
4.12
|
|
Supplemental Indenture No. 3, dated as of June 7, 2013, among Constellation Brands Beach Holdings, Inc., Crown Imports LLC, Constellation Brands, Inc., and The Bank of New York Mellon Trust Company, National Association, as trustee (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K, dated June 7, 2013, filed June 11, 2013 and incorporated herein by reference.)
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4.13
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Indenture, dated as of April 17, 2012, by and among the Company, as Issuer, certain subsidiaries, as Guarantors and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated April 17, 2012, filed April 23, 2012 and incorporated herein by reference.)
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4.14
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Supplemental Indenture No. 1, with respect to 6.0% Senior Notes due May 2022, dated as of April 17, 2012, among the Company, as Issuer, certain subsidiaries, as Guarantors, and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.1.1 to the Company’s Current Report on Form 8-K, dated April 17, 2012, filed April 23, 2012 and incorporated herein by reference.)
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4.15
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Supplemental Indenture No. 2, with respect to 4.625% Senior Notes due March 2023, dated as of August 14, 2012, among the Company, as Issuer, certain subsidiaries, as Guarantors, and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated August 14, 2012, filed August 17, 2012 and incorporated herein by reference.)
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4.16
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Supplemental Indenture No. 3, with respect to 3.75% Senior Notes due May 2021, dated as of May 14, 2013, among Constellation Brands, Inc., as Issuer, certain subsidiaries, as Guarantors, and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated May 14, 2013, filed May 16, 2013 and incorporated herein by reference.)
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4.17
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Supplemental Indenture No. 4, with respect to 4.25% Senior Notes due May 2023, dated as of May 14, 2013, among Constellation Brands, Inc., as Issuer, certain subsidiaries, as Guarantors, and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated May 14, 2013, filed May 16, 2013 and incorporated herein by reference.)
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4.18
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Supplemental Indenture No. 5, dated as of June 7, 2013, among Constellation Brands Beach Holdings, Inc., Crown Imports LLC, Constellation Brands, Inc., and Manufacturers and Traders Trust Company, as trustee (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K, dated June 7, 2013, filed June 11, 2013 and incorporated herein by reference.)
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4.19
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Restatement Agreement, dated as of May 2, 2013, among the Company, CIH, Bank of America, N.A., as administrative agent, and the lenders party thereto, including Second Amended and Restated Credit Agreement dated as of May 2, 2013, among the Company, CIH, Bank of America, N.A., as administrative agent, and the Lenders party thereto (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated May 2, 2013, filed May 7, 2013 and incorporated herein by reference.)
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4.20
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Joinder Agreement, dated as of June 7, 2013, between CIH International S.à r.l., Bank of America, N.A., as administrative agent and lender (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated June 7, 2013, filed June 11, 2013 and incorporated herein by reference.)
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1.
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By adding the following new paragraph to the end of Section 1.1, effective as of January 1, 2014:
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Dated: January 9, 2014
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/s/ Robert Sands
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Robert Sands,
President and Chief Executive Officer
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Dated: January 9, 2014
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/s/ Robert Ryder
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Robert Ryder,
Executive Vice President and
Chief Financial Officer
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UNITED STATES OF AMERICA,
Plaintiff,
v.
ANHEUSER-BUSCH InBEV
SA/NV, et al. ,
Defendants.
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Civil Action No. 13-127 (RWR) Judge Richard W. Roberts
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I.
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JURISDICTION
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II.
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DEFINITIONS
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1.
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Constellation; or
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2.
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an alternative purchaser of the Divestiture Assets selected pursuant to the procedures set forth in this Final Judgment.
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1.
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confidential commercial information of Constellation (or other Acquirer) that has been obtained from such entity, including quantities, units, and prices of items ordered or purchased from the Sellers by the Acquirer, and any other competitively sensitive information regarding the Sellers’ or the Acquirer’s performance under the Interim Supply Agreement or the Transition Services Agreement; and
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2.
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confidential unit sales data, non-public pricing strategies and plans, or any other confidential commercial information of the Acquirer that either an ABI-Owned Distributor, or any other Distributor in which ABI acquires a majority interest after the date of the divestiture contemplated herein, obtains from the Acquirer by virtue of its relationship with the Acquirer.
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1.
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In the event that the Acquirer is a buyer other than Constellation, the Divestiture Assets shall also include the Entire Importer Interest, pursuant to ABI’s Drag-Along Right to require Constellation to divest such interest, and subject to Constellation’s right to receive compensation in the event of such divestiture, as set forth in Section 12.5 of the MIPA, attached hereto in Exhibit A; and
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a.
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in the event that a Divestiture Trustee is appointed, the Divestiture Trustee may, with the consent of the United States pursuant to Section IV.J herein: include in the Divestiture Assets any additional assets, including tangible assets as well as intellectual property interests and other intangible interests or assets that extend beyond the United States, if the Divestiture Trustee finds the inclusion of such assets necessary to enable the Acquirer to expand the Piedras Negras Brewery to a Nominal Capacity of at least twenty (20) million hectoliters of packaged Beer per year, or to remedy any breach that the Monitoring Trustee has identified pursuant to Section VIII.B.3 herein; or
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b.
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remove from the divestiture package any assets that are not needed by the Acquirer to accomplish the purposes of this Final Judgment, if such removal will facilitate the divestiture of Modelo’s United States Beer business as contemplated by this Final Judgment.
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1.
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the form of agreement between Modelo and Crown, attached as Exhibit A to the MIPA, attached hereto, and incorporated herein, or
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2.
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in the event the Divestiture Assets are sold to an Acquirer other than Constellation, an agreement between Sellers and the Acquirer to provide the same types of services under substantially similar terms as provided in Exhibit A to the MIPA incorporated hereto, subject to approval by the United States in its sole discretion.
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1.
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the form of agreement between ABI and Constellation attached as Exhibit B to the Stock Purchase Agreement, and incorporated herein; or
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2.
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in the event the Divestiture Assets are sold to an Acquirer other than Constellation, an agreement between Sellers and such Acquirer to provide the same types of services under substantially similar terms as provided in Exhibit B to the Stock Purchase Agreement incorporated hereto, subject to approval by the United States in its sole discretion.
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III.
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APPLICABILITY
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IV.
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DIVESTITURE
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1.
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by ABI, the certain representations contained in Section 3.25 of the Stock Purchase Agreement attached in Exhibit A hereto regarding the sufficiency of the assets to be divested;
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2.
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by ABI, the certain representations contained in Section 3.26 of the Stock Purchase Agreement attached in Exhibit A hereto regarding the absence of present knowledge of impediments to the expansion of capacity of the Piedras Negras Brewery;
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3.
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by Modelo, the representations set forth in the Letter of Grupo Modelo, S.A.B. de C.V., dated April 17, 2013, attached hereto as Exhibit C, regarding the issues described in subparagraphs A.1 and A.2 above; and
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4.
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by Modelo, the representations set forth in the Letter of Grupo Modelo, S.A.B. de C.V., dated April 17, 2013, attached hereto as Exhibit C, regarding the sufficiency of the assets being divested for the importation, marketing, distribution and sale of Modelo Brand Beer in the United States.
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1.
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made to an Acquirer that, in the United States’ sole judgment, has the intent and capability (including the necessary managerial, operational, technical and financial capability) to complete the expansion of the Piedras Negras Brewery as contemplated herein, and to compete in the business of providing Beer; and
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2.
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accomplished so as to satisfy the United States, in its sole discretion, that none of the terms of the agreement between an Acquirer and Sellers gives Sellers the ability unreasonably to raise the Acquirer’s costs, to lower the Acquirer’s efficiency, or otherwise to interfere in the ability of the Acquirer to compete effectively.
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V.
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REQUIRED EXPANSION AND OTHER PROVISIONS DESIGNED TO PROMOTE COMPETITION
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1.
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Within six (6) months from the date of divestiture, the appointment of, and contracts executed with, design and engineering firms;
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2.
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Within twelve (12) months from the date of divestiture, the completion of the design and engineering (including specifications and rated capacities) of the brewhouse, packaging hall, and warehouse;
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3.
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Within twelve (12) months from the date of divestiture, the obtainment of all necessary permits;
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4.
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Within twelve (12) months from the date of divestiture, the commencement of construction of the brewhouse, packaging hall, and warehouse;
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5.
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Within twenty-four (24) months from the date of divestiture, the completion of the construction of the warehouse and completion of the installation of equipment in the warehouse;
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6.
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Within thirty (30) months from the date of divestiture, the completion of the construction of the brewhouse and completion of the installation of equipment in the brewhouse;
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7.
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Within thirty-six (36) months from the date of divestiture, the completion of the construction of the packaging hall and the completion of the installation of equipment in the packaging hall; and
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8.
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Within thirty-six (36) months from the date of divestiture, Constellation determines in its discretion that it is able to obtain its supply requirements from the Piedras Negras Brewery and is no longer dependent on supply under the Interim Supply Agreement.
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VI.
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APPOINTMENT OF TRUSTEE TO EFFECT DIVESTITURE
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VII.
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NOTICE OF PROPOSED DIVESTITURE
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VIII.
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MONITORING TRUSTEE
|
1.
|
the attainment of the construction milestones by the Acquirer as set forth in Section V.A, the reasons for any failure to meet such milestones, and recommended remedies for any such failure;
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2.
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any breach or other problem that arises under the Transition Services Agreement, Interim Supply Agreement, or other agreement between Sellers and Acquirer that may affect the accomplishment of the purposes of this Final Judgment, the reasons for such breach or problem, and recommended remedies therefor; and
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3.
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any breach or other concern regarding the accuracy of the representations made by ABI in sections 3.25 and 3.26 of the Stock Purchase Agreement, incorporated herein, or successor agreements thereto, and by Modelo in the Letter of Grupo Modelo, S.A.B. de C.V., incorporated herein as Exhibit C, and recommended remedies therefor.
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IX.
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FINANCING
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X.
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HOLD SEPARATE
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XI.
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AFFIDAVITS
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XII.
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NOTIFICATION OF FUTURE TRANSACTIONS
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XIII.
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FIREWALL
|
1.
|
furnish a copy of this Final Judgment and related Competitive Impact Statement within sixty (60) days of entry of the Final Judgment to (a) each officer, director, and any other employee that will receive Acquirer Confidential Information; (b) each officer, director, and any other employee that is involved in (i) any contact with the other companies that are parties to the Transition Services Agreement and Interim Supply Agreement, (ii) making decisions under the Transition Services Agreement or the Interim Supply Agreement, (iii) making decisions regarding ABI’s Distributor Incentive Programs, or (iv) making decisions regarding the treatment of Crown by either ABI-Owned Distributors, or by any other Distributor in which ABI acquires a majority interest after the date of the divestiture contemplated herein; and (c) any successor to a person designated in Section XIII.D.1(a) or (b);
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2.
|
annually brief each person designated in Section XIII.D.1 on the meaning and requirements of this Final Judgment and the antitrust laws; and
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3.
|
obtain from each person designated in Section XIII.D.1, within sixty (60) days of that person’s receipt of the Final Judgment, a certification that he or she (i) has read and, to the best of his or her ability, understands and agrees to abide by the terms of this Final Judgment; (ii) is not aware of any violation of the Final Judgment that has not been reported to the company; and (iii) understands that any person’s failure to comply with this Final Judgment may result in an enforcement action for civil or criminal contempt of court against each Defendant and/or any person who violates this Final Judgment.
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XIV.
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COMPLIANCE INSPECTION
|
1.
|
access during Defendants’ office hours to inspect and copy, or at the option of the United States, to require Defendants to provide hard copy or electronic copies of, all books, ledgers, accounts, records, data, and documents in the possession, custody, or control of Defendants, relating to any matters contained in this Final Judgment; and
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2.
|
to interview, either informally or on the record, Defendants’ officers, employees, or agents, who may have their individual counsel present, regarding such matters. The interviews shall be subject to the reasonable convenience of the interviewee and without restraint or interference by Defendants.
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XV.
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NO REACQUISITION
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XVI.
|
BANKRUPTCY
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XVII.
|
RETENTION OF JURISDICTION
|
XVIII.
|
EXPIRATION OF FINAL JUDGMENT
|
XIX.
|
PUBLIC INTEREST DETERMINATION
|
•
|
Future Expansion
. Grupo Modelo is not aware at this time of any material impediment (physical, legal, regulatory or otherwise) to the expansion of the Piedras Negras plant to operate at a nominal capacity of thirty million (30,000,000) hectoliters of beer per annum (assuming that sufficient capital expenditures shall have been made and necessary permits shall have been sought).
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•
|
Proprietary Inputs
. With the exception of yeast and recipes, there are no proprietary inputs required to operate the Piedras Negras plant.
|
•
|
Sufficiency
. Grupo Modelo is not aware at this time of any additional assets beyond the Divestiture Asset(as that term is defined in the proposed Final Judgment) that would need to be transferred to Constellation Brands, Inc. (“Constellation”) in order to operate the Piedras Negras plant.
|
•
|
Employees.
At this time, all employees who spend substantially all of their time working at the Piedras Negras plant are employed by Servicios Modelo de Coahuila, S.A. de C.V., except for the employees of independent contractors who perform job functions not directly related to the production of beer at the Piedras Negras plant, including but not limited to gardening, cleaning and medical services.
|
Sincerely,
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||
|
||
GRUPO MODELO, S.A.B DE C.V.
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||
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|
|
By:
|
|
/s/ Carlos Fernandez
|
|
|
Name: Carlos Fernandez
|
|
|
Title: CEO
|