ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
16-0716709
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
207 High Point Drive, Building 100, Victor, New York
|
14564
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
|
|
(585) 678-7100
|
|
|
(Registrant’s telephone number, including area code)
|
|
|
|
|
|
Not Applicable
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
|
ý
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Class
|
|
Number of Shares Outstanding
|
Class A Common Stock, par value $.01 per share
|
|
172,704,868
|
Class B Common Stock, par value $.01 per share
|
|
23,352,727
|
Class 1 Common Stock, par value $.01 per share
|
|
2,080
|
|
|
|
|
Item 1.
|
Financial Statements.
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
|
|||||||
|
November 30,
2016 |
|
February 29,
2016 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
197.3
|
|
|
$
|
83.1
|
|
Accounts receivable
|
856.0
|
|
|
732.5
|
|
||
Inventories
|
2,123.1
|
|
|
1,851.6
|
|
||
Prepaid expenses and other
|
268.4
|
|
|
310.4
|
|
||
Total current assets
|
3,444.8
|
|
|
2,977.6
|
|
||
Property, plant and equipment
|
3,708.0
|
|
|
3,333.4
|
|
||
Goodwill
|
7,517.9
|
|
|
7,138.6
|
|
||
Intangible assets
|
3,494.2
|
|
|
3,403.8
|
|
||
Other assets
|
155.2
|
|
|
111.6
|
|
||
Total assets
|
$
|
18,320.1
|
|
|
$
|
16,965.0
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Notes payable to banks
|
$
|
353.4
|
|
|
$
|
408.3
|
|
Current maturities of long-term debt
|
915.7
|
|
|
856.7
|
|
||
Accounts payable
|
772.3
|
|
|
429.3
|
|
||
Accrued excise taxes
|
33.0
|
|
|
33.6
|
|
||
Other accrued expenses and liabilities
|
562.2
|
|
|
544.4
|
|
||
Total current liabilities
|
2,636.6
|
|
|
2,272.3
|
|
||
Long-term debt, less current maturities
|
7,362.5
|
|
|
6,816.2
|
|
||
Deferred income taxes
|
1,124.0
|
|
|
1,022.2
|
|
||
Other liabilities
|
199.3
|
|
|
162.5
|
|
||
Total liabilities
|
11,322.4
|
|
|
10,273.2
|
|
||
Commitments and contingencies
|
|
|
|
||||
CBI stockholders’ equity:
|
|
|
|
||||
Class A Common Stock, $.01 par value
–
Authorized, 322,000,000 shares; Issued, 256,983,922 shares and 255,558,026 shares, respectively
|
2.6
|
|
|
2.6
|
|
||
Class B Convertible Common Stock, $.01 par value
–
Authorized, 30,000,000 shares; Issued, 28,358,527 shares and 28,358,529 shares, respectively
|
0.3
|
|
|
0.3
|
|
||
Additional paid-in capital
|
2,705.5
|
|
|
2,589.0
|
|
||
Retained earnings
|
6,934.9
|
|
|
6,090.5
|
|
||
Accumulated other comprehensive loss
|
(596.7
|
)
|
|
(452.5
|
)
|
||
|
9,046.6
|
|
|
8,229.9
|
|
||
Less: Treasury stock –
|
|
|
|
||||
Class A Common Stock, at cost, 81,308,730 shares and 79,454,011 shares, respectively
|
(2,026.4
|
)
|
|
(1,668.1
|
)
|
||
Class B Convertible Common Stock, at cost, 5,005,800 shares
|
(2.2
|
)
|
|
(2.2
|
)
|
||
|
(2,028.6
|
)
|
|
(1,670.3
|
)
|
||
Total CBI stockholders’ equity
|
7,018.0
|
|
|
6,559.6
|
|
||
Noncontrolling interests
|
(20.3
|
)
|
|
132.2
|
|
||
Total stockholders’ equity
|
6,997.7
|
|
|
6,691.8
|
|
||
Total liabilities and stockholders’ equity
|
$
|
18,320.1
|
|
|
$
|
16,965.0
|
|
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,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Sales
|
$
|
6,268.5
|
|
|
$
|
5,523.3
|
|
|
$
|
1,992.7
|
|
|
$
|
1,812.4
|
|
Less – excise taxes
|
(565.0
|
)
|
|
(518.1
|
)
|
|
(182.2
|
)
|
|
(171.9
|
)
|
||||
Net sales
|
5,703.5
|
|
|
5,005.2
|
|
|
1,810.5
|
|
|
1,640.5
|
|
||||
Cost of product sold
|
(2,961.8
|
)
|
|
(2,759.0
|
)
|
|
(919.1
|
)
|
|
(907.0
|
)
|
||||
Gross profit
|
2,741.7
|
|
|
2,246.2
|
|
|
891.4
|
|
|
733.5
|
|
||||
Selling, general and administrative expenses
|
(1,044.1
|
)
|
|
(892.2
|
)
|
|
(357.4
|
)
|
|
(286.2
|
)
|
||||
Operating income
|
1,697.6
|
|
|
1,354.0
|
|
|
534.0
|
|
|
447.3
|
|
||||
Equity in earnings of equity method investees
|
28.2
|
|
|
28.5
|
|
|
27.5
|
|
|
27.3
|
|
||||
Interest expense
|
(256.3
|
)
|
|
(230.4
|
)
|
|
(77.6
|
)
|
|
(75.6
|
)
|
||||
Loss on write-off of debt issuance costs
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
||||
Income before income taxes
|
1,469.5
|
|
|
1,151.0
|
|
|
483.9
|
|
|
399.0
|
|
||||
Provision for income taxes
|
(392.2
|
)
|
|
(335.7
|
)
|
|
(78.9
|
)
|
|
(128.0
|
)
|
||||
Net income
|
1,077.3
|
|
|
815.3
|
|
|
405.0
|
|
|
271.0
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
5.8
|
|
|
(3.8
|
)
|
|
0.9
|
|
|
(0.5
|
)
|
||||
Net income attributable to CBI
|
$
|
1,083.1
|
|
|
$
|
811.5
|
|
|
$
|
405.9
|
|
|
$
|
270.5
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
918.4
|
|
|
$
|
591.2
|
|
|
$
|
240.3
|
|
|
$
|
297.9
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
20.5
|
|
|
6.3
|
|
|
12.0
|
|
|
(2.1
|
)
|
||||
Comprehensive income attributable to CBI
|
$
|
938.9
|
|
|
$
|
597.5
|
|
|
$
|
252.3
|
|
|
$
|
295.8
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
$
|
5.46
|
|
|
$
|
4.19
|
|
|
$
|
2.04
|
|
|
$
|
1.39
|
|
Basic – Class B Convertible Common Stock
|
$
|
4.95
|
|
|
$
|
3.80
|
|
|
$
|
1.85
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
$
|
5.27
|
|
|
$
|
3.99
|
|
|
$
|
1.98
|
|
|
$
|
1.33
|
|
Diluted – Class B Convertible Common Stock
|
$
|
4.86
|
|
|
$
|
3.69
|
|
|
$
|
1.82
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
177.171
|
|
|
172.509
|
|
|
177.513
|
|
|
173.933
|
|
||||
Basic – Class B Convertible Common Stock
|
23.353
|
|
|
23.366
|
|
|
23.353
|
|
|
23.358
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
205.484
|
|
|
203.356
|
|
|
205.455
|
|
|
204.096
|
|
||||
Diluted – Class B Convertible Common Stock
|
23.353
|
|
|
23.366
|
|
|
23.353
|
|
|
23.358
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share:
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
$
|
1.20
|
|
|
$
|
0.93
|
|
|
$
|
0.40
|
|
|
$
|
0.31
|
|
Class B Convertible Common Stock
|
$
|
1.08
|
|
|
$
|
0.84
|
|
|
$
|
0.36
|
|
|
$
|
0.28
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
|||||||
|
For the Nine Months Ended November 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
1,077.3
|
|
|
$
|
815.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
175.3
|
|
|
130.5
|
|
||
Deferred tax provision
|
114.7
|
|
|
192.5
|
|
||
Stock-based compensation
|
44.4
|
|
|
40.5
|
|
||
Amortization of debt issuance costs
|
9.6
|
|
|
9.0
|
|
||
Amortization of intangible assets
|
8.4
|
|
|
32.2
|
|
||
Equity in earnings of equity method investees, net of distributed earnings
|
(16.2
|
)
|
|
(18.7
|
)
|
||
Noncash portion of loss on write-off of debt issuance costs
|
—
|
|
|
1.1
|
|
||
Change in operating assets and liabilities, net of effects from purchases of businesses:
|
|
|
|
||||
Accounts receivable
|
(121.5
|
)
|
|
(121.5
|
)
|
||
Inventories
|
(193.9
|
)
|
|
(25.0
|
)
|
||
Prepaid expenses and other current assets
|
(30.4
|
)
|
|
46.8
|
|
||
Accounts payable
|
290.0
|
|
|
136.8
|
|
||
Accrued excise taxes
|
(0.6
|
)
|
|
4.3
|
|
||
Other accrued expenses and liabilities
|
77.5
|
|
|
(128.1
|
)
|
||
Other
|
(18.9
|
)
|
|
(24.1
|
)
|
||
Total adjustments
|
338.4
|
|
|
276.3
|
|
||
Net cash provided by operating activities
|
1,415.7
|
|
|
1,091.6
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(591.6
|
)
|
|
(513.8
|
)
|
||
Purchases of businesses, net of cash acquired
|
(542.2
|
)
|
|
(317.9
|
)
|
||
Other investing activities
|
(15.3
|
)
|
|
4.0
|
|
||
Net cash used in investing activities
|
(1,149.1
|
)
|
|
(827.7
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Principal payments of long-term debt
|
(907.7
|
)
|
|
(148.3
|
)
|
||
Purchases of treasury stock
|
(372.6
|
)
|
|
—
|
|
||
Dividends paid
|
(238.3
|
)
|
|
(180.4
|
)
|
||
Payments of minimum tax withholdings on stock-based payment awards
|
(66.9
|
)
|
|
(38.4
|
)
|
||
Net repayments of notes payable
|
(55.9
|
)
|
|
(15.9
|
)
|
||
Payments of debt issuance costs
|
(6.6
|
)
|
|
(7.9
|
)
|
||
Proceeds from issuance of long-term debt
|
1,350.1
|
|
|
210.0
|
|
||
Excess tax benefits from stock-based payment awards
|
112.2
|
|
|
204.2
|
|
||
Proceeds from shares issued under equity compensation plans
|
39.3
|
|
|
98.9
|
|
||
Net cash provided by (used in) financing activities
|
(146.4
|
)
|
|
122.2
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(6.0
|
)
|
|
(4.9
|
)
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
114.2
|
|
|
381.2
|
|
||
Cash and cash equivalents, beginning of period
|
83.1
|
|
|
110.1
|
|
||
Cash and cash equivalents, end of period
|
$
|
197.3
|
|
|
$
|
491.3
|
|
|
|
|
|
||||
Supplemental disclosures of noncash investing and financing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
218.0
|
|
|
$
|
53.1
|
|
Conversion of noncontrolling equity interest to long-term debt
|
$
|
132.0
|
|
|
$
|
—
|
|
|
November 30,
2016 |
|
February 29,
2016 |
||||
(in millions
)
|
|
|
|
||||
Raw materials and supplies
|
$
|
140.5
|
|
|
$
|
107.2
|
|
In-process inventories
|
1,382.7
|
|
|
1,218.7
|
|
||
Finished case goods
|
599.9
|
|
|
525.7
|
|
||
|
$
|
2,123.1
|
|
|
$
|
1,851.6
|
|
|
November 30,
2016 |
|
February 29,
2016 |
||||
(in millions
)
|
|
|
|
||||
Derivative instruments designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
1,062.6
|
|
|
$
|
731.6
|
|
Interest rate swap contracts
|
$
|
250.0
|
|
|
$
|
600.0
|
|
|
|
|
|
||||
Derivative instruments not designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
1,440.2
|
|
|
$
|
975.6
|
|
Commodity derivative contracts
|
$
|
168.7
|
|
|
$
|
198.7
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
1,000.0
|
|
Assets
|
|
Liabilities
|
||||||||||||||
|
November 30,
2016 |
|
February 29,
2016 |
|
|
November 30,
2016 |
|
February 29,
2016 |
||||||||
(in millions)
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments designated as hedging instruments
|
||||||||||||||||
Foreign currency contracts:
|
||||||||||||||||
Prepaid expenses and other
|
$
|
5.1
|
|
|
$
|
5.5
|
|
|
Other accrued expenses and liabilities
|
$
|
43.1
|
|
|
$
|
33.0
|
|
Other assets
|
$
|
2.8
|
|
|
$
|
1.2
|
|
|
Other liabilities
|
$
|
54.9
|
|
|
$
|
26.2
|
|
Interest rate swap contracts:
|
||||||||||||||||
Other assets
|
$
|
3.8
|
|
|
$
|
0.3
|
|
|
Other accrued expenses and liabilities
|
$
|
0.6
|
|
|
$
|
1.5
|
|
|
|
|
|
|
Other liabilities
|
$
|
—
|
|
|
$
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||||||
|
November 30,
2016 |
|
February 29,
2016 |
|
|
November 30,
2016 |
|
February 29,
2016 |
||||||||
(in millions)
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments not designated as hedging instruments
|
||||||||||||||||
Foreign currency contracts:
|
||||||||||||||||
Prepaid expenses and other
|
$
|
5.0
|
|
|
$
|
4.8
|
|
|
Other accrued expenses and liabilities
|
$
|
2.6
|
|
|
$
|
9.8
|
|
Commodity derivative contracts:
|
||||||||||||||||
Prepaid expenses and other
|
$
|
3.2
|
|
|
$
|
0.6
|
|
|
Other accrued expenses and liabilities
|
$
|
11.4
|
|
|
$
|
29.3
|
|
Other assets
|
$
|
1.8
|
|
|
$
|
0.3
|
|
|
Other liabilities
|
$
|
4.6
|
|
|
$
|
16.8
|
|
Interest rate swap contracts:
|
||||||||||||||||
Prepaid expenses and other
|
$
|
—
|
|
|
$
|
0.7
|
|
|
Other accrued expenses and liabilities
|
$
|
—
|
|
|
$
|
5.7
|
|
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, 2016
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(39.7
|
)
|
|
Sales
|
|
$
|
0.5
|
|
|
|
|
|
Cost of product sold
|
|
(18.4
|
)
|
|||
Interest rate swap contracts
|
|
2.2
|
|
|
Interest expense
|
|
(3.9
|
)
|
||
|
|
$
|
(37.5
|
)
|
|
|
|
$
|
(21.8
|
)
|
|
|
|
|
|
|
|
||||
For the Nine Months Ended November 30, 2015
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(25.5
|
)
|
|
Sales
|
|
$
|
1.6
|
|
|
|
|
|
Cost of product sold
|
|
(14.1
|
)
|
|||
Interest rate swap contracts
|
|
(1.0
|
)
|
|
Interest expense
|
|
(6.2
|
)
|
||
|
|
$
|
(26.5
|
)
|
|
|
|
$
|
(18.7
|
)
|
|
|
|
|
|
|
|
||||
For the Three Months Ended November 30, 2016
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(39.1
|
)
|
|
Sales
|
|
$
|
0.3
|
|
|
|
|
|
Cost of product sold
|
|
(7.7
|
)
|
|||
Interest rate swap contracts
|
|
2.1
|
|
|
Interest expense
|
|
(0.2
|
)
|
||
|
|
$
|
(37.0
|
)
|
|
|
|
$
|
(7.6
|
)
|
|
|
|
|
|
|
|
||||
For the Three Months Ended November 30, 2015
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
9.4
|
|
|
Sales
|
|
$
|
0.7
|
|
|
|
|
|
Cost of product sold
|
|
(6.3
|
)
|
|||
Interest rate swap contracts
|
|
—
|
|
|
Interest expense
|
|
(2.0
|
)
|
||
|
|
$
|
9.4
|
|
|
|
|
$
|
(7.6
|
)
|
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, 2016
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
14.4
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(20.4
|
)
|
|
|
|
|
|
|
|
$
|
(6.0
|
)
|
|
|
|
|
|
|
|
||
For the Nine Months Ended November 30, 2015
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
(34.5
|
)
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(18.9
|
)
|
|
|
|
|
|
|
|
$
|
(53.4
|
)
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2016
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
6.7
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(6.1
|
)
|
|
|
|
|
|
|
|
$
|
0.6
|
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2015
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
(18.1
|
)
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(3.8
|
)
|
|
|
|
|
|
|
|
$
|
(21.9
|
)
|
•
|
Level 1 inputs are quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as interest rates and yield curves that are observable for the asset and liability, either directly or indirectly; and
|
•
|
Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
|
|
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, 2016
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
12.9
|
|
|
$
|
—
|
|
|
$
|
12.9
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
Available-for-sale (“AFS”) debt securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.8
|
|
|
$
|
4.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
100.6
|
|
|
$
|
—
|
|
|
$
|
100.6
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
16.0
|
|
|
$
|
—
|
|
|
$
|
16.0
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
|
|
|
|
|
|
|
||||||||
February 29, 2016
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
11.5
|
|
|
$
|
—
|
|
|
$
|
11.5
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
AFS debt securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
4.6
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
69.0
|
|
|
$
|
—
|
|
|
$
|
69.0
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
46.1
|
|
|
$
|
—
|
|
|
$
|
46.1
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
7.6
|
|
|
$
|
—
|
|
|
$
|
7.6
|
|
|
Beer
|
|
Wine and Spirits
|
|
Consolidated
|
||||||
(in millions)
|
|
|
|
|
|
||||||
Balance, February 28, 2015
|
$
|
3,776.2
|
|
|
$
|
2,432.0
|
|
|
$
|
6,208.2
|
|
Purchase accounting allocations
(1)
|
761.8
|
|
|
203.3
|
|
|
965.1
|
|
|||
Foreign currency translation adjustments
|
(7.9
|
)
|
|
(26.8
|
)
|
|
(34.7
|
)
|
|||
Balance, February 29, 2016
|
4,530.1
|
|
|
2,608.5
|
|
|
7,138.6
|
|
|||
Purchase accounting allocations
(2)
|
1.4
|
|
|
373.7
|
|
|
375.1
|
|
|||
Foreign currency translation adjustments
|
(4.4
|
)
|
|
8.6
|
|
|
4.2
|
|
|||
Balance, November 30, 2016
|
$
|
4,527.1
|
|
|
$
|
2,990.8
|
|
|
$
|
7,517.9
|
|
(1)
|
Purchase accounting allocations associated with the acquisitions of Ballast Point (as defined below) (Beer) and Meiomi (as defined below) (Wine and Spirits).
|
(2)
|
Preliminary purchase accounting allocations associated primarily with the acquisitions of Prisoner, High West and Charles Smith (all as defined below) (Wine and Spirits).
|
(in millions)
|
|
||
Goodwill
|
$
|
763.2
|
|
Trademarks
|
222.8
|
|
|
Other
|
14.0
|
|
|
Total estimated fair value
|
1,000.0
|
|
|
Less – cash acquired
|
(1.5
|
)
|
|
Purchase price
|
$
|
998.5
|
|
|
November 30,
2016 |
||
(in millions)
|
|
||
Cash
|
$
|
7.8
|
|
Accounts receivable
|
44.7
|
|
|
Inventories
|
147.9
|
|
|
Prepaid expenses and other
|
6.3
|
|
|
Total current assets
|
206.7
|
|
|
Property, plant and equipment
|
112.6
|
|
|
Goodwill
|
125.1
|
|
|
Intangible assets
|
68.5
|
|
|
Other assets
|
1.7
|
|
|
Total assets
|
514.6
|
|
|
Current liabilities
|
(93.3
|
)
|
|
Long-term liabilities
|
(255.8
|
)
|
|
Total liabilities
|
(349.1
|
)
|
|
Net assets held for sale
|
$
|
165.5
|
|
|
November 30, 2016
|
|
February 29, 2016
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
$
|
106.2
|
|
|
$
|
59.6
|
|
|
$
|
102.5
|
|
|
$
|
60.2
|
|
Favorable interim supply agreement
|
68.3
|
|
|
—
|
|
|
68.3
|
|
|
2.2
|
|
||||
Other
|
21.4
|
|
|
2.6
|
|
|
22.3
|
|
|
3.5
|
|
||||
Total
|
$
|
195.9
|
|
|
62.2
|
|
|
$
|
193.1
|
|
|
65.9
|
|
||
|
|
|
|
|
|
|
|
||||||||
Nonamortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
|
|
3,427.9
|
|
|
|
|
3,333.8
|
|
||||||
Other
|
|
|
4.1
|
|
|
|
|
4.1
|
|
||||||
Total
|
|
|
3,432.0
|
|
|
|
|
3,337.9
|
|
||||||
Total intangible assets
|
|
|
$
|
3,494.2
|
|
|
|
|
$
|
3,403.8
|
|
|
November 30, 2016
|
|
February 29,
2016 |
||||||||||||
|
Current
|
|
Long-term
|
|
Total
|
|
Total
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Notes payable to banks
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility – Revolving Credit Loans
|
$
|
220.0
|
|
|
$
|
—
|
|
|
$
|
220.0
|
|
|
$
|
92.0
|
|
Other
|
133.4
|
|
|
—
|
|
|
133.4
|
|
|
316.3
|
|
||||
|
$
|
353.4
|
|
|
$
|
—
|
|
|
$
|
353.4
|
|
|
$
|
408.3
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility – Term Loans
|
$
|
192.5
|
|
|
$
|
3,641.8
|
|
|
$
|
3,834.3
|
|
|
$
|
2,856.8
|
|
Senior Notes
|
699.6
|
|
|
3,321.2
|
|
|
4,020.8
|
|
|
4,716.3
|
|
||||
Other
|
23.6
|
|
|
399.5
|
|
|
423.1
|
|
|
99.8
|
|
||||
|
$
|
915.7
|
|
|
$
|
7,362.5
|
|
|
$
|
8,278.2
|
|
|
$
|
7,672.9
|
|
•
|
The creation of a new
$700.0 million
European Term A-1 loan facility maturing on March 10, 2021;
|
•
|
An increase of the European revolving commitment under the revolving credit facility by
$425.0 million
to
$1.0 billion
;
|
•
|
The addition of CIHH as a new borrower under the new European Term A-1 loan facility and the European revolving commitment; and
|
•
|
The entry into a cross-guarantee agreement by CIH and CIHH whereby each guarantees the other’s obligations under the March 2016 Credit Agreement.
|
•
|
The creation of a new
$400.0 million
European Term A-2 loan facility with CIH as the borrower, maturing on March 10, 2021;
|
•
|
An adjustment of the Incremental Facilities (as defined below) from a fixed amount to a flexible amount;
|
•
|
The addition of CB International as a new borrower under the European revolving commitment; and
|
•
|
The entry into an amended and restated cross-guarantee agreement by the European Borrowers whereby each guarantees the others’ obligations under the 2016 Credit Agreement.
|
|
Amount
|
|
Maturity
|
||
(in millions)
|
|
|
|
||
Revolving Credit Facility
(1) (2)
|
$
|
1,150.0
|
|
|
July 16, 2020
|
U.S. Term A Facility
(1) (3)
|
1,192.1
|
|
|
July 16, 2020
|
|
U.S. Term A-1 Facility
(1) (3)
|
238.9
|
|
|
July 16, 2021
|
|
European Term A Facility
(1) (3)
|
1,340.7
|
|
|
July 16, 2020
|
|
European Term A-1 Facility
(1) (3)
|
682.5
|
|
|
March 10, 2021
|
|
European Term A-2 Facility
(1) (3)
|
400.0
|
|
|
March 10, 2021
|
|
|
$
|
5,004.2
|
|
|
|
(1)
|
Contractual interest rate varies based on our debt ratio (as defined in the 2016 Credit Agreement) and is a function of LIBOR plus a margin, or the base rate plus a margin.
|
(2)
|
Provides for credit facilities consisting of a
$150.0 million
U.S. Revolving Credit Facility and a
$1,000.0 million
European Revolving Credit Facility. Includes two sub-facilities for letters of credit of up to
$200.0 million
in the aggregate. We are the borrower under the U.S. Revolving Credit Facility and we and/or CIH and/or CIHH and/or CB International are the borrowers under the European Revolving Credit Facility.
|
(3)
|
We are the borrower under the U.S. Term A and the U.S. Term A-1 loan facilities. CIH is the borrower under the European Term A and the European Term A-2 loan facilities. CIHH is the borrower under the European Term A-1 loan facility.
|
|
Revolving
Credit
Facility
|
|
U.S.
Term A
Facility
(1)
|
|
U.S.
Term A-1
Facility
(1)
|
|
European
Term A
Facility
(1)
|
|
European
Term A-1
Facility
(1)
|
|
European
Term A-2
Facility
(1)
|
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Outstanding borrowings
|
$
|
220.0
|
|
|
$
|
1,184.4
|
|
|
$
|
238.5
|
|
|
$
|
1,334.1
|
|
|
$
|
679.6
|
|
|
$
|
397.7
|
|
Interest rate
|
2.1
|
%
|
|
2.0
|
%
|
|
2.3
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
||||||
Libor margin
|
1.5
|
%
|
|
1.5
|
%
|
|
1.75
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
||||||
Outstanding letters of credit
|
$
|
16.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Remaining borrowing capacity
|
$
|
913.3
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Outstanding term loan facility borrowings are net of unamortized debt issuance costs.
|
|
U.S.
Term A
Facility
|
|
U.S.
Term A-1
Facility
|
|
European
Term A
Facility
|
|
European
Term A-1
Facility
|
|
European Term A-2 Facility
|
|
Total
|
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017
|
$
|
15.9
|
|
|
$
|
0.6
|
|
|
$
|
17.8
|
|
|
$
|
8.8
|
|
|
$
|
5.0
|
|
|
$
|
48.1
|
|
2018
|
63.6
|
|
|
2.4
|
|
|
71.5
|
|
|
35.0
|
|
|
20.0
|
|
|
192.5
|
|
||||||
2019
|
63.6
|
|
|
2.4
|
|
|
71.5
|
|
|
35.0
|
|
|
20.0
|
|
|
192.5
|
|
||||||
2020
|
63.6
|
|
|
2.4
|
|
|
71.5
|
|
|
35.0
|
|
|
20.0
|
|
|
192.5
|
|
||||||
2021
|
985.4
|
|
|
2.4
|
|
|
1,108.4
|
|
|
35.0
|
|
|
20.0
|
|
|
2,151.2
|
|
||||||
2022
|
—
|
|
|
228.7
|
|
|
—
|
|
|
533.7
|
|
|
315.0
|
|
|
1,077.4
|
|
||||||
|
$
|
1,192.1
|
|
|
$
|
238.9
|
|
|
$
|
1,340.7
|
|
|
$
|
682.5
|
|
|
$
|
400.0
|
|
|
$
|
3,854.2
|
|
|
Outstanding
Borrowings
|
|
Weighted
Average
Interest Rate
|
|
Remaining
Borrowing
Capacity
|
|||||
(in millions)
|
|
|
|
|
|
|||||
CBI Facility
|
$
|
97.0
|
|
|
1.5
|
%
|
|
$
|
208.0
|
|
Crown Facility
|
$
|
—
|
|
|
—
|
%
|
|
$
|
150.0
|
|
|
|
|
Class A Common Shares
|
||||||
|
Repurchase
Authorization
|
|
Dollar Value
of Shares
Repurchased
|
|
Number of
Shares
Repurchased
|
||||
(in millions, except share data)
|
|
|
|
|
|
||||
2013 Authorization
|
$
|
1,000.0
|
|
|
$
|
1,000.0
|
|
|
18,670,632
|
2017 Authorization
|
$
|
1,000.0
|
|
|
$
|
153.1
|
|
|
994,142
|
|
For the Nine Months Ended
|
||||||||||||||
|
November 30, 2016
|
|
November 30, 2015
|
||||||||||||
|
Common Stock
|
|
Common Stock
|
||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||
(in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||
Net income attributable to CBI allocated – basic
|
$
|
967.5
|
|
|
$
|
115.6
|
|
|
$
|
722.7
|
|
|
$
|
88.8
|
|
Conversion of Class B common shares into Class A common shares
|
115.6
|
|
|
—
|
|
|
88.8
|
|
|
—
|
|
||||
Effect of stock-based awards on allocated net income
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
(2.6
|
)
|
||||
Net income attributable to CBI allocated – diluted
|
$
|
1,083.1
|
|
|
$
|
113.4
|
|
|
$
|
811.5
|
|
|
$
|
86.2
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic
|
177.171
|
|
|
23.353
|
|
|
172.509
|
|
|
23.366
|
|
||||
Conversion of Class B common shares into Class A common shares
|
23.353
|
|
|
—
|
|
|
23.366
|
|
|
—
|
|
||||
Stock-based awards, primarily stock options
|
4.960
|
|
|
—
|
|
|
7.481
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
205.484
|
|
|
23.353
|
|
|
203.356
|
|
|
23.366
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI – basic
|
$
|
5.46
|
|
|
$
|
4.95
|
|
|
$
|
4.19
|
|
|
$
|
3.80
|
|
Net income per common share attributable to CBI – diluted
|
$
|
5.27
|
|
|
$
|
4.86
|
|
|
$
|
3.99
|
|
|
$
|
3.69
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
For the Three Months Ended
|
||||||||||||||
|
November 30, 2016
|
|
November 30, 2015
|
||||||||||||
|
Common Stock
|
|
Common Stock
|
||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||
Net income attributable to CBI allocated – basic
|
$
|
362.6
|
|
|
$
|
43.3
|
|
|
$
|
241.1
|
|
|
$
|
29.4
|
|
Conversion of Class B common shares into Class A common shares
|
43.3
|
|
|
—
|
|
|
29.4
|
|
|
—
|
|
||||
Effect of stock-based awards on allocated net income
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||
Net income attributable to CBI allocated – diluted
|
$
|
405.9
|
|
|
$
|
42.5
|
|
|
$
|
270.5
|
|
|
$
|
28.6
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic
|
177.513
|
|
|
23.353
|
|
|
173.933
|
|
|
23.358
|
|
||||
Conversion of Class B common shares into Class A common shares
|
23.353
|
|
|
—
|
|
|
23.358
|
|
|
—
|
|
||||
Stock-based awards, primarily stock options
|
4.589
|
|
|
—
|
|
|
6.805
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
205.455
|
|
|
23.353
|
|
|
204.096
|
|
|
23.358
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI – basic
|
$
|
2.04
|
|
|
$
|
1.85
|
|
|
$
|
1.39
|
|
|
$
|
1.26
|
|
Net income per common share attributable to CBI – diluted
|
$
|
1.98
|
|
|
$
|
1.82
|
|
|
$
|
1.33
|
|
|
$
|
1.22
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Nine Months Ended November 30, 2016
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
1,083.1
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(128.4
|
)
|
|
$
|
(0.7
|
)
|
|
(129.1
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(128.4
|
)
|
|
(0.7
|
)
|
|
(129.1
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(55.3
|
)
|
|
17.8
|
|
|
(37.5
|
)
|
|||
Reclassification adjustments
|
32.0
|
|
|
(10.1
|
)
|
|
21.9
|
|
|||
Net loss recognized in other comprehensive loss
|
(23.3
|
)
|
|
7.7
|
|
|
(15.6
|
)
|
|||
Unrealized gain on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities gains
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive loss
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial losses
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Reclassification adjustments
|
0.5
|
|
|
(0.1
|
)
|
|
0.4
|
|
|||
Net gain recognized in other comprehensive loss
|
0.4
|
|
|
(0.1
|
)
|
|
0.3
|
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(151.2
|
)
|
|
$
|
7.0
|
|
|
(144.2
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
938.9
|
|
||||
|
|
|
|
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Nine Months Ended November 30, 2015
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
811.5
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(209.7
|
)
|
|
$
|
2.7
|
|
|
(207.0
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(209.7
|
)
|
|
2.7
|
|
|
(207.0
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(36.2
|
)
|
|
9.7
|
|
|
(26.5
|
)
|
|||
Reclassification adjustments
|
27.1
|
|
|
(8.2
|
)
|
|
18.9
|
|
|||
Net loss recognized in other comprehensive loss
|
(9.1
|
)
|
|
1.5
|
|
|
(7.6
|
)
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
1.2
|
|
|
(0.3
|
)
|
|
0.9
|
|
|||
Reclassification adjustments
|
0.3
|
|
|
(0.2
|
)
|
|
0.1
|
|
|||
Net gain recognized in other comprehensive loss
|
1.5
|
|
|
(0.5
|
)
|
|
1.0
|
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(217.7
|
)
|
|
$
|
3.7
|
|
|
(214.0
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
597.5
|
|
||||
|
|
|
|
|
|
||||||
For the Three Months Ended November 30, 2016
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
405.9
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(125.6
|
)
|
|
$
|
1.0
|
|
|
(124.6
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(125.6
|
)
|
|
1.0
|
|
|
(124.6
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(52.2
|
)
|
|
15.2
|
|
|
(37.0
|
)
|
|||
Reclassification adjustments
|
11.1
|
|
|
(3.4
|
)
|
|
7.7
|
|
|||
Net loss recognized in other comprehensive loss
|
(41.1
|
)
|
|
11.8
|
|
|
(29.3
|
)
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.5
|
|
|
(0.2
|
)
|
|
0.3
|
|
|||
Reclassification adjustments
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Net gain recognized in other comprehensive loss
|
0.7
|
|
|
(0.3
|
)
|
|
0.4
|
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(166.1
|
)
|
|
$
|
12.5
|
|
|
(153.6
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
252.3
|
|
||||
|
|
|
|
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Three Months Ended November 30, 2015
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
270.5
|
|
||||
Other comprehensive income attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net gains
|
$
|
8.1
|
|
|
$
|
(0.1
|
)
|
|
8.0
|
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
8.1
|
|
|
(0.1
|
)
|
|
8.0
|
|
|||
Unrealized gain on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative gains
|
12.7
|
|
|
(3.3
|
)
|
|
9.4
|
|
|||
Reclassification adjustments
|
10.8
|
|
|
(3.1
|
)
|
|
7.7
|
|
|||
Net gain recognized in other comprehensive income
|
23.5
|
|
|
(6.4
|
)
|
|
17.1
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||
Reclassification adjustments
|
0.1
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|||
Net gain recognized in other comprehensive income
|
0.4
|
|
|
(0.2
|
)
|
|
0.2
|
|
|||
Other comprehensive income attributable to CBI
|
$
|
32.0
|
|
|
$
|
(6.7
|
)
|
|
25.3
|
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
295.8
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
Net
Unrealized
Losses on
Derivative
Instruments
|
|
Net
Unrealized
Gains (Losses)
on AFS Debt
Securities
|
|
Pension/
Postretirement
Adjustments
|
|
Accumulated
Other
Comprehensive
Loss
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, February 29, 2016
|
$
|
(390.5
|
)
|
|
$
|
(46.1
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
(13.1
|
)
|
|
$
|
(452.5
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassification adjustments
|
(129.1
|
)
|
|
(37.5
|
)
|
|
0.2
|
|
|
(0.1
|
)
|
|
(166.5
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
21.9
|
|
|
—
|
|
|
0.4
|
|
|
22.3
|
|
|||||
Other comprehensive income (loss)
|
(129.1
|
)
|
|
(15.6
|
)
|
|
0.2
|
|
|
0.3
|
|
|
(144.2
|
)
|
|||||
Balance, November 30, 2016
|
$
|
(519.6
|
)
|
|
$
|
(61.7
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(12.8
|
)
|
|
$
|
(596.7
|
)
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at November 30, 2016
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
13.3
|
|
|
$
|
7.7
|
|
|
$
|
176.3
|
|
|
$
|
—
|
|
|
$
|
197.3
|
|
Accounts receivable
|
0.7
|
|
|
23.7
|
|
|
831.6
|
|
|
—
|
|
|
856.0
|
|
|||||
Inventories
|
170.5
|
|
|
1,628.3
|
|
|
434.9
|
|
|
(110.6
|
)
|
|
2,123.1
|
|
|||||
Intercompany receivable
|
21,273.6
|
|
|
28,448.7
|
|
|
11,599.4
|
|
|
(61,321.7
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
40.1
|
|
|
58.7
|
|
|
262.4
|
|
|
(92.8
|
)
|
|
268.4
|
|
|||||
Total current assets
|
21,498.2
|
|
|
30,167.1
|
|
|
13,304.6
|
|
|
(61,525.1
|
)
|
|
3,444.8
|
|
|||||
Property, plant and equipment
|
65.6
|
|
|
922.1
|
|
|
2,720.3
|
|
|
—
|
|
|
3,708.0
|
|
|||||
Investments in subsidiaries
|
13,258.5
|
|
|
23.4
|
|
|
—
|
|
|
(13,281.9
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,590.1
|
|
|
927.8
|
|
|
—
|
|
|
7,517.9
|
|
|||||
Intangible assets
|
—
|
|
|
1,002.9
|
|
|
2,491.3
|
|
|
—
|
|
|
3,494.2
|
|
|||||
Intercompany notes receivable
|
5,016.3
|
|
|
200.1
|
|
|
200.0
|
|
|
(5,416.4
|
)
|
|
—
|
|
|||||
Other assets
|
19.5
|
|
|
92.2
|
|
|
43.5
|
|
|
—
|
|
|
155.2
|
|
|||||
Total assets
|
$
|
39,858.1
|
|
|
$
|
38,997.9
|
|
|
$
|
19,687.5
|
|
|
$
|
(80,223.4
|
)
|
|
$
|
18,320.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable to banks
|
$
|
220.0
|
|
|
$
|
—
|
|
|
$
|
133.4
|
|
|
$
|
—
|
|
|
$
|
353.4
|
|
Current maturities of long-term debt
|
767.7
|
|
|
17.0
|
|
|
131.0
|
|
|
—
|
|
|
915.7
|
|
|||||
Accounts payable
|
46.0
|
|
|
337.6
|
|
|
388.7
|
|
|
—
|
|
|
772.3
|
|
|||||
Accrued excise taxes
|
15.1
|
|
|
12.5
|
|
|
5.4
|
|
|
—
|
|
|
33.0
|
|
|||||
Intercompany payable
|
26,589.9
|
|
|
23,011.5
|
|
|
11,720.3
|
|
|
(61,321.7
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
280.4
|
|
|
214.4
|
|
|
195.9
|
|
|
(128.5
|
)
|
|
562.2
|
|
|||||
Total current liabilities
|
27,919.1
|
|
|
23,593.0
|
|
|
12,574.7
|
|
|
(61,450.2
|
)
|
|
2,636.6
|
|
|||||
Long-term debt, less current maturities
|
4,680.2
|
|
|
25.4
|
|
|
2,656.9
|
|
|
—
|
|
|
7,362.5
|
|
|||||
Deferred income taxes
|
12.5
|
|
|
815.4
|
|
|
296.1
|
|
|
—
|
|
|
1,124.0
|
|
|||||
Intercompany notes payable
|
200.0
|
|
|
5,184.0
|
|
|
32.4
|
|
|
(5,416.4
|
)
|
|
—
|
|
|||||
Other liabilities
|
28.3
|
|
|
30.2
|
|
|
140.8
|
|
|
—
|
|
|
199.3
|
|
|||||
Total liabilities
|
32,840.1
|
|
|
29,648.0
|
|
|
15,700.9
|
|
|
(66,866.6
|
)
|
|
11,322.4
|
|
|||||
Total CBI stockholders’ equity
|
7,018.0
|
|
|
9,349.9
|
|
|
4,006.9
|
|
|
(13,356.8
|
)
|
|
7,018.0
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(20.3
|
)
|
|
—
|
|
|
(20.3
|
)
|
|||||
Total stockholders’ equity
|
7,018.0
|
|
|
9,349.9
|
|
|
3,986.6
|
|
|
(13,356.8
|
)
|
|
6,997.7
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
39,858.1
|
|
|
$
|
38,997.9
|
|
|
$
|
19,687.5
|
|
|
$
|
(80,223.4
|
)
|
|
$
|
18,320.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at February 29, 2016
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
6.0
|
|
|
$
|
4.2
|
|
|
$
|
72.9
|
|
|
$
|
—
|
|
|
$
|
83.1
|
|
Accounts receivable
|
0.4
|
|
|
22.3
|
|
|
709.8
|
|
|
—
|
|
|
732.5
|
|
|||||
Inventories
|
151.6
|
|
|
1,483.5
|
|
|
344.0
|
|
|
(127.5
|
)
|
|
1,851.6
|
|
|||||
Intercompany receivable
|
17,459.3
|
|
|
23,758.9
|
|
|
9,393.5
|
|
|
(50,611.7
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
29.6
|
|
|
67.8
|
|
|
281.1
|
|
|
(68.1
|
)
|
|
310.4
|
|
|||||
Total current assets
|
17,646.9
|
|
|
25,336.7
|
|
|
10,801.3
|
|
|
(50,807.3
|
)
|
|
2,977.6
|
|
|||||
Property, plant and equipment
|
63.2
|
|
|
879.8
|
|
|
2,390.4
|
|
|
—
|
|
|
3,333.4
|
|
|||||
Investments in subsidiaries
|
13,047.2
|
|
|
19.0
|
|
|
—
|
|
|
(13,066.2
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,376.4
|
|
|
762.2
|
|
|
—
|
|
|
7,138.6
|
|
|||||
Intangible assets
|
—
|
|
|
970.9
|
|
|
2,430.8
|
|
|
2.1
|
|
|
3,403.8
|
|
|||||
Intercompany notes receivable
|
4,705.9
|
|
|
86.6
|
|
|
—
|
|
|
(4,792.5
|
)
|
|
—
|
|
|||||
Other assets
|
20.0
|
|
|
69.6
|
|
|
22.0
|
|
|
—
|
|
|
111.6
|
|
|||||
Total assets
|
$
|
35,483.2
|
|
|
$
|
33,739.0
|
|
|
$
|
16,406.7
|
|
|
$
|
(68,663.9
|
)
|
|
$
|
16,965.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable to banks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
408.3
|
|
|
$
|
—
|
|
|
$
|
408.3
|
|
Current maturities of long-term debt
|
765.6
|
|
|
18.0
|
|
|
73.1
|
|
|
—
|
|
|
856.7
|
|
|||||
Accounts payable
|
37.7
|
|
|
100.7
|
|
|
290.9
|
|
|
—
|
|
|
429.3
|
|
|||||
Accrued excise taxes
|
14.7
|
|
|
14.7
|
|
|
4.2
|
|
|
—
|
|
|
33.6
|
|
|||||
Intercompany payable
|
22,293.3
|
|
|
19,018.6
|
|
|
9,299.8
|
|
|
(50,611.7
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
349.1
|
|
|
185.1
|
|
|
119.4
|
|
|
(109.2
|
)
|
|
544.4
|
|
|||||
Total current liabilities
|
23,460.4
|
|
|
19,337.1
|
|
|
10,195.7
|
|
|
(50,720.9
|
)
|
|
2,272.3
|
|
|||||
Long-term debt, less current maturities
|
5,421.4
|
|
|
26.3
|
|
|
1,368.5
|
|
|
—
|
|
|
6,816.2
|
|
|||||
Deferred income taxes
|
11.9
|
|
|
734.8
|
|
|
275.5
|
|
|
—
|
|
|
1,022.2
|
|
|||||
Intercompany notes payable
|
—
|
|
|
4,776.6
|
|
|
15.9
|
|
|
(4,792.5
|
)
|
|
—
|
|
|||||
Other liabilities
|
29.9
|
|
|
39.1
|
|
|
93.5
|
|
|
—
|
|
|
162.5
|
|
|||||
Total liabilities
|
28,923.6
|
|
|
24,913.9
|
|
|
11,949.1
|
|
|
(55,513.4
|
)
|
|
10,273.2
|
|
|||||
Total CBI stockholders’ equity
|
6,559.6
|
|
|
8,825.1
|
|
|
4,325.4
|
|
|
(13,150.5
|
)
|
|
6,559.6
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
132.2
|
|
|
—
|
|
|
132.2
|
|
|||||
Total stockholders’ equity
|
6,559.6
|
|
|
8,825.1
|
|
|
4,457.6
|
|
|
(13,150.5
|
)
|
|
6,691.8
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
35,483.2
|
|
|
$
|
33,739.0
|
|
|
$
|
16,406.7
|
|
|
$
|
(68,663.9
|
)
|
|
$
|
16,965.0
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2016
|
|||||||||||||||||||
Sales
|
$
|
2,070.2
|
|
|
$
|
5,061.5
|
|
|
$
|
2,604.0
|
|
|
$
|
(3,467.2
|
)
|
|
$
|
6,268.5
|
|
Less – excise taxes
|
(260.0
|
)
|
|
(254.2
|
)
|
|
(50.8
|
)
|
|
—
|
|
|
(565.0
|
)
|
|||||
Net sales
|
1,810.2
|
|
|
4,807.3
|
|
|
2,553.2
|
|
|
(3,467.2
|
)
|
|
5,703.5
|
|
|||||
Cost of product sold
|
(1,472.9
|
)
|
|
(3,444.7
|
)
|
|
(1,483.5
|
)
|
|
3,439.3
|
|
|
(2,961.8
|
)
|
|||||
Gross profit
|
337.3
|
|
|
1,362.6
|
|
|
1,069.7
|
|
|
(27.9
|
)
|
|
2,741.7
|
|
|||||
Selling, general and administrative expenses
|
(310.4
|
)
|
|
(590.9
|
)
|
|
(181.7
|
)
|
|
38.9
|
|
|
(1,044.1
|
)
|
|||||
Operating income
|
26.9
|
|
|
771.7
|
|
|
888.0
|
|
|
11.0
|
|
|
1,697.6
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
1,207.5
|
|
|
32.0
|
|
|
0.5
|
|
|
(1,211.8
|
)
|
|
28.2
|
|
|||||
Interest income
|
0.4
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
1.3
|
|
|||||
Intercompany interest income
|
170.9
|
|
|
229.5
|
|
|
0.1
|
|
|
(400.5
|
)
|
|
—
|
|
|||||
Interest expense
|
(212.6
|
)
|
|
(1.2
|
)
|
|
(43.8
|
)
|
|
—
|
|
|
(257.6
|
)
|
|||||
Intercompany interest expense
|
(229.1
|
)
|
|
(170.7
|
)
|
|
(0.7
|
)
|
|
400.5
|
|
|
—
|
|
|||||
Income before income taxes
|
964.0
|
|
|
861.3
|
|
|
845.0
|
|
|
(1,200.8
|
)
|
|
1,469.5
|
|
|||||
(Provision for) benefit from income taxes
|
119.1
|
|
|
(336.5
|
)
|
|
(170.5
|
)
|
|
(4.3
|
)
|
|
(392.2
|
)
|
|||||
Net income
|
1,083.1
|
|
|
524.8
|
|
|
674.5
|
|
|
(1,205.1
|
)
|
|
1,077.3
|
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
5.8
|
|
|||||
Net income attributable to CBI
|
$
|
1,083.1
|
|
|
$
|
524.8
|
|
|
$
|
680.3
|
|
|
$
|
(1,205.1
|
)
|
|
$
|
1,083.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
938.9
|
|
|
$
|
524.8
|
|
|
$
|
527.6
|
|
|
$
|
(1,052.4
|
)
|
|
$
|
938.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2015
|
|||||||||||||||||||
Sales
|
$
|
1,891.7
|
|
|
$
|
4,289.2
|
|
|
$
|
2,294.4
|
|
|
$
|
(2,952.0
|
)
|
|
$
|
5,523.3
|
|
Less – excise taxes
|
(251.3
|
)
|
|
(219.4
|
)
|
|
(47.4
|
)
|
|
—
|
|
|
(518.1
|
)
|
|||||
Net sales
|
1,640.4
|
|
|
4,069.8
|
|
|
2,247.0
|
|
|
(2,952.0
|
)
|
|
5,005.2
|
|
|||||
Cost of product sold
|
(1,325.4
|
)
|
|
(3,023.4
|
)
|
|
(1,377.4
|
)
|
|
2,967.2
|
|
|
(2,759.0
|
)
|
|||||
Gross profit
|
315.0
|
|
|
1,046.4
|
|
|
869.6
|
|
|
15.2
|
|
|
2,246.2
|
|
|||||
Selling, general and administrative expenses
|
(281.5
|
)
|
|
(508.9
|
)
|
|
(96.8
|
)
|
|
(5.0
|
)
|
|
(892.2
|
)
|
|||||
Operating income
|
33.5
|
|
|
537.5
|
|
|
772.8
|
|
|
10.2
|
|
|
1,354.0
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
924.9
|
|
|
31.8
|
|
|
0.8
|
|
|
(929.0
|
)
|
|
28.5
|
|
|||||
Interest income
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.5
|
|
|||||
Intercompany interest income
|
138.0
|
|
|
196.6
|
|
|
0.1
|
|
|
(334.7
|
)
|
|
—
|
|
|||||
Interest expense
|
(212.3
|
)
|
|
(0.9
|
)
|
|
(17.7
|
)
|
|
—
|
|
|
(230.9
|
)
|
|||||
Intercompany interest expense
|
(196.2
|
)
|
|
(137.9
|
)
|
|
(0.6
|
)
|
|
334.7
|
|
|
—
|
|
|||||
Loss on write-off of debt issuance costs
|
(0.4
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(1.1
|
)
|
|||||
Income before income taxes
|
687.6
|
|
|
627.1
|
|
|
755.1
|
|
|
(918.8
|
)
|
|
1,151.0
|
|
|||||
(Provision for) benefit from income taxes
|
123.9
|
|
|
(247.1
|
)
|
|
(208.2
|
)
|
|
(4.3
|
)
|
|
(335.7
|
)
|
|||||
Net income
|
811.5
|
|
|
380.0
|
|
|
546.9
|
|
|
(923.1
|
)
|
|
815.3
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
(3.8
|
)
|
|||||
Net income attributable to CBI
|
$
|
811.5
|
|
|
$
|
380.0
|
|
|
$
|
543.1
|
|
|
$
|
(923.1
|
)
|
|
$
|
811.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
597.5
|
|
|
$
|
379.1
|
|
|
$
|
325.6
|
|
|
$
|
(704.7
|
)
|
|
$
|
597.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2016
|
|||||||||||||||||||
Sales
|
$
|
734.8
|
|
|
$
|
1,563.5
|
|
|
$
|
815.2
|
|
|
$
|
(1,120.8
|
)
|
|
$
|
1,992.7
|
|
Less – excise taxes
|
(89.9
|
)
|
|
(73.8
|
)
|
|
(18.5
|
)
|
|
—
|
|
|
(182.2
|
)
|
|||||
Net sales
|
644.9
|
|
|
1,489.7
|
|
|
796.7
|
|
|
(1,120.8
|
)
|
|
1,810.5
|
|
|||||
Cost of product sold
|
(522.4
|
)
|
|
(1,043.9
|
)
|
|
(459.7
|
)
|
|
1,106.9
|
|
|
(919.1
|
)
|
|||||
Gross profit
|
122.5
|
|
|
445.8
|
|
|
337.0
|
|
|
(13.9
|
)
|
|
891.4
|
|
|||||
Selling, general and administrative expenses
|
(109.7
|
)
|
|
(194.7
|
)
|
|
(70.1
|
)
|
|
17.1
|
|
|
(357.4
|
)
|
|||||
Operating income
|
12.8
|
|
|
251.1
|
|
|
266.9
|
|
|
3.2
|
|
|
534.0
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
430.9
|
|
|
28.4
|
|
|
0.1
|
|
|
(431.9
|
)
|
|
27.5
|
|
|||||
Interest income
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||
Intercompany interest income
|
56.2
|
|
|
80.3
|
|
|
—
|
|
|
(136.5
|
)
|
|
—
|
|
|||||
Interest expense
|
(61.5
|
)
|
|
(0.4
|
)
|
|
(16.0
|
)
|
|
—
|
|
|
(77.9
|
)
|
|||||
Intercompany interest expense
|
(80.1
|
)
|
|
(56.1
|
)
|
|
(0.3
|
)
|
|
136.5
|
|
|
—
|
|
|||||
Income before income taxes
|
358.3
|
|
|
303.3
|
|
|
251.0
|
|
|
(428.7
|
)
|
|
483.9
|
|
|||||
(Provision for) benefit from income taxes
|
47.6
|
|
|
(119.1
|
)
|
|
(7.3
|
)
|
|
(0.1
|
)
|
|
(78.9
|
)
|
|||||
Net income
|
405.9
|
|
|
184.2
|
|
|
243.7
|
|
|
(428.8
|
)
|
|
405.0
|
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|||||
Net income attributable to CBI
|
$
|
405.9
|
|
|
$
|
184.2
|
|
|
$
|
244.6
|
|
|
$
|
(428.8
|
)
|
|
$
|
405.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
252.3
|
|
|
$
|
182.5
|
|
|
$
|
85.9
|
|
|
$
|
(268.4
|
)
|
|
$
|
252.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2015
|
|||||||||||||||||||
Sales
|
$
|
708.1
|
|
|
$
|
1,366.8
|
|
|
$
|
676.4
|
|
|
$
|
(938.9
|
)
|
|
$
|
1,812.4
|
|
Less – excise taxes
|
(91.6
|
)
|
|
(64.6
|
)
|
|
(15.7
|
)
|
|
—
|
|
|
(171.9
|
)
|
|||||
Net sales
|
616.5
|
|
|
1,302.2
|
|
|
660.7
|
|
|
(938.9
|
)
|
|
1,640.5
|
|
|||||
Cost of product sold
|
(496.9
|
)
|
|
(943.8
|
)
|
|
(425.3
|
)
|
|
959.0
|
|
|
(907.0
|
)
|
|||||
Gross profit
|
119.6
|
|
|
358.4
|
|
|
235.4
|
|
|
20.1
|
|
|
733.5
|
|
|||||
Selling, general and administrative expenses
|
(81.9
|
)
|
|
(157.6
|
)
|
|
(34.6
|
)
|
|
(12.1
|
)
|
|
(286.2
|
)
|
|||||
Operating income
|
37.7
|
|
|
200.8
|
|
|
200.8
|
|
|
8.0
|
|
|
447.3
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
298.6
|
|
|
28.1
|
|
|
0.4
|
|
|
(299.8
|
)
|
|
27.3
|
|
|||||
Interest income
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Intercompany interest income
|
46.0
|
|
|
66.3
|
|
|
0.1
|
|
|
(112.4
|
)
|
|
—
|
|
|||||
Interest expense
|
(71.5
|
)
|
|
(0.3
|
)
|
|
(3.9
|
)
|
|
—
|
|
|
(75.7
|
)
|
|||||
Intercompany interest expense
|
(66.2
|
)
|
|
(46.0
|
)
|
|
(0.2
|
)
|
|
112.4
|
|
|
—
|
|
|||||
Income before income taxes
|
244.6
|
|
|
248.9
|
|
|
197.3
|
|
|
(291.8
|
)
|
|
399.0
|
|
|||||
(Provision for) benefit from income taxes
|
25.9
|
|
|
(99.2
|
)
|
|
(51.4
|
)
|
|
(3.3
|
)
|
|
(128.0
|
)
|
|||||
Net income
|
270.5
|
|
|
149.7
|
|
|
145.9
|
|
|
(295.1
|
)
|
|
271.0
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||||
Net income attributable to CBI
|
$
|
270.5
|
|
|
$
|
149.7
|
|
|
$
|
145.4
|
|
|
$
|
(295.1
|
)
|
|
$
|
270.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
295.8
|
|
|
$
|
149.0
|
|
|
$
|
169.8
|
|
|
$
|
(318.8
|
)
|
|
$
|
295.8
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2016
|
|||||||||||||||||||
Net cash provided by operating activities
|
$
|
27.4
|
|
|
$
|
914.0
|
|
|
$
|
966.3
|
|
|
$
|
(492.0
|
)
|
|
$
|
1,415.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(6.3
|
)
|
|
(110.3
|
)
|
|
(475.0
|
)
|
|
—
|
|
|
(591.6
|
)
|
|||||
Purchases of businesses, net of cash acquired
|
—
|
|
|
(284.9
|
)
|
|
(257.3
|
)
|
|
—
|
|
|
(542.2
|
)
|
|||||
Net proceeds from intercompany notes
|
267.2
|
|
|
7.5
|
|
|
—
|
|
|
(274.7
|
)
|
|
—
|
|
|||||
Net returns of capital from equity affiliates
|
361.7
|
|
|
—
|
|
|
—
|
|
|
(361.7
|
)
|
|
—
|
|
|||||
Other investing activities
|
0.2
|
|
|
0.1
|
|
|
(15.6
|
)
|
|
—
|
|
|
(15.3
|
)
|
|||||
Net cash provided by (used in) investing activities
|
622.8
|
|
|
(387.6
|
)
|
|
(747.9
|
)
|
|
(636.4
|
)
|
|
(1,149.1
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid to parent company
|
—
|
|
|
—
|
|
|
(850.4
|
)
|
|
850.4
|
|
|
—
|
|
|||||
Net contributions from (returns of capital to) equity affiliates
|
—
|
|
|
(8.6
|
)
|
|
5.3
|
|
|
3.3
|
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
347.7
|
|
|
(436.7
|
)
|
|
(185.7
|
)
|
|
274.7
|
|
|
—
|
|
|||||
Principal payments of long-term debt
|
(751.2
|
)
|
|
(15.9
|
)
|
|
(140.6
|
)
|
|
—
|
|
|
(907.7
|
)
|
|||||
Purchases of treasury stock
|
(372.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(372.6
|
)
|
|||||
Dividends paid
|
(238.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(238.3
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(61.7
|
)
|
|
(5.2
|
)
|
|
—
|
|
|
(66.9
|
)
|
|||||
Net proceeds from (repayments of) notes payable
|
220.0
|
|
|
—
|
|
|
(275.9
|
)
|
|
—
|
|
|
(55.9
|
)
|
|||||
Payments of debt issuance costs
|
—
|
|
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
|||||
Proceeds from issuance of long-term debt
|
—
|
|
|
—
|
|
|
1,350.1
|
|
|
—
|
|
|
1,350.1
|
|
|||||
Excess tax benefits from stock-based payment awards
|
112.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112.2
|
|
|||||
Proceeds from shares issued under equity compensation plans
|
39.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39.3
|
|
|||||
Net cash used in financing activities
|
(642.9
|
)
|
|
(522.9
|
)
|
|
(109.0
|
)
|
|
1,128.4
|
|
|
(146.4
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash equivalents
|
7.3
|
|
|
3.5
|
|
|
103.4
|
|
|
—
|
|
|
114.2
|
|
|||||
Cash and cash equivalents, beginning of period
|
6.0
|
|
|
4.2
|
|
|
72.9
|
|
|
—
|
|
|
83.1
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
13.3
|
|
|
$
|
7.7
|
|
|
$
|
176.3
|
|
|
$
|
—
|
|
|
$
|
197.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2015
|
|||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(456.3
|
)
|
|
$
|
775.1
|
|
|
$
|
772.8
|
|
|
$
|
—
|
|
|
$
|
1,091.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(8.8
|
)
|
|
(31.8
|
)
|
|
(473.2
|
)
|
|
—
|
|
|
(513.8
|
)
|
|||||
Purchases of businesses, net of cash acquired
|
—
|
|
|
(316.2
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
(317.9
|
)
|
|||||
Net proceeds from intercompany notes
|
376.4
|
|
|
—
|
|
|
—
|
|
|
(376.4
|
)
|
|
—
|
|
|||||
Net investments in equity affiliates
|
(236.4
|
)
|
|
—
|
|
|
—
|
|
|
236.4
|
|
|
—
|
|
|||||
Other investing activities
|
2.0
|
|
|
(0.7
|
)
|
|
2.7
|
|
|
—
|
|
|
4.0
|
|
|||||
Net cash provided by (used in) investing activities
|
133.2
|
|
|
(348.7
|
)
|
|
(472.2
|
)
|
|
(140.0
|
)
|
|
(827.7
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net contributions from (returns of capital to) equity affiliates
|
—
|
|
|
(31.4
|
)
|
|
267.8
|
|
|
(236.4
|
)
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
292.2
|
|
|
(345.3
|
)
|
|
(323.3
|
)
|
|
376.4
|
|
|
—
|
|
|||||
Principal payments of long-term debt
|
(47.9
|
)
|
|
(13.8
|
)
|
|
(86.6
|
)
|
|
—
|
|
|
(148.3
|
)
|
|||||
Dividends paid
|
(180.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(180.4
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(35.7
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
(38.4
|
)
|
|||||
Net repayments of notes payable
|
—
|
|
|
—
|
|
|
(15.9
|
)
|
|
—
|
|
|
(15.9
|
)
|
|||||
Payments of debt issuance costs
|
(7.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.9
|
)
|
|||||
Proceeds from issuance of long-term debt
|
200.0
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
210.0
|
|
|||||
Excess tax benefits from stock-based payment awards
|
204.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204.2
|
|
|||||
Proceeds from shares issued under equity compensation plans
|
98.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98.9
|
|
|||||
Net cash provided by (used in) financing activities
|
559.1
|
|
|
(426.2
|
)
|
|
(150.7
|
)
|
|
140.0
|
|
|
122.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
and cash equivalents
|
—
|
|
|
—
|
|
|
(4.9
|
)
|
|
—
|
|
|
(4.9
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash equivalents
|
236.0
|
|
|
0.2
|
|
|
145.0
|
|
|
—
|
|
|
381.2
|
|
|||||
Cash and cash equivalents, beginning of period
|
24.5
|
|
|
0.7
|
|
|
84.9
|
|
|
—
|
|
|
110.1
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
260.5
|
|
|
$
|
0.9
|
|
|
$
|
229.9
|
|
|
$
|
—
|
|
|
$
|
491.3
|
|
|
For the Nine Months Ended November 30,
|
|
For the Three Months Ended November 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Cost of product sold
|
|
|
|
|
|
|
|
||||||||
Settlements of undesignated commodity derivative contracts
|
$
|
20.3
|
|
|
$
|
20.4
|
|
|
$
|
5.2
|
|
|
$
|
8.2
|
|
Net gain (loss) on undesignated commodity derivative contracts
|
14.4
|
|
|
(34.5
|
)
|
|
6.7
|
|
|
(18.1
|
)
|
||||
Flow through of inventory step-up
|
(16.4
|
)
|
|
(9.8
|
)
|
|
(4.9
|
)
|
|
(8.6
|
)
|
||||
Amortization of favorable interim supply agreement
|
(2.2
|
)
|
|
(25.3
|
)
|
|
—
|
|
|
(7.4
|
)
|
||||
Total cost of product sold
|
16.1
|
|
|
(49.2
|
)
|
|
7.0
|
|
|
(25.9
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
||||||||
Transaction, integration and other acquisition-related costs
|
(11.0
|
)
|
|
(12.7
|
)
|
|
(5.7
|
)
|
|
(1.9
|
)
|
||||
Net gain (costs) associated with the Canadian Divestiture and related activities
|
(4.5
|
)
|
|
—
|
|
|
3.6
|
|
|
—
|
|
||||
Restructuring and related charges
|
(0.9
|
)
|
|
(15.0
|
)
|
|
0.1
|
|
|
(0.7
|
)
|
||||
Other costs
|
(2.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
||||
Total selling, general and administrative expenses
|
(19.0
|
)
|
|
(27.7
|
)
|
|
(4.6
|
)
|
|
(2.6
|
)
|
||||
Comparable Adjustments, Operating income (loss)
|
$
|
(2.9
|
)
|
|
$
|
(76.9
|
)
|
|
$
|
2.4
|
|
|
$
|
(28.5
|
)
|
|
For the Nine Months Ended November 30,
|
|
For the Three Months Ended November 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Beer
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
3,338.1
|
|
|
$
|
2,816.6
|
|
|
$
|
964.6
|
|
|
$
|
831.3
|
|
Segment operating income
|
$
|
1,195.7
|
|
|
$
|
984.0
|
|
|
$
|
335.7
|
|
|
$
|
291.6
|
|
Long-lived tangible assets
|
$
|
2,506.6
|
|
|
$
|
1,806.7
|
|
|
$
|
2,506.6
|
|
|
$
|
1,806.7
|
|
Total assets
|
$
|
10,351.5
|
|
|
$
|
8,596.3
|
|
|
$
|
10,351.5
|
|
|
$
|
8,596.3
|
|
Capital expenditures
|
$
|
494.9
|
|
|
$
|
457.3
|
|
|
$
|
191.0
|
|
|
$
|
196.6
|
|
Depreciation and amortization
|
$
|
82.7
|
|
|
$
|
41.4
|
|
|
$
|
29.5
|
|
|
$
|
13.5
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended November 30,
|
|
For the Three Months Ended November 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Wine and Spirits
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Wine
|
$
|
2,102.8
|
|
|
$
|
1,931.5
|
|
|
$
|
754.3
|
|
|
$
|
719.4
|
|
Spirits
|
262.6
|
|
|
257.1
|
|
|
91.6
|
|
|
89.8
|
|
||||
Net sales
|
$
|
2,365.4
|
|
|
$
|
2,188.6
|
|
|
$
|
845.9
|
|
|
$
|
809.2
|
|
Segment operating income
|
$
|
604.7
|
|
|
$
|
542.8
|
|
|
$
|
231.0
|
|
|
$
|
222.7
|
|
Equity in earnings of equity method investees
|
$
|
28.4
|
|
|
$
|
28.5
|
|
|
$
|
27.7
|
|
|
$
|
27.3
|
|
Long-lived tangible assets
|
$
|
1,069.7
|
|
|
$
|
1,034.1
|
|
|
$
|
1,069.7
|
|
|
$
|
1,034.1
|
|
Investments in equity method investees
|
$
|
92.9
|
|
|
$
|
91.0
|
|
|
$
|
92.9
|
|
|
$
|
91.0
|
|
Total assets
|
$
|
7,616.3
|
|
|
$
|
6,856.5
|
|
|
$
|
7,616.3
|
|
|
$
|
6,856.5
|
|
Capital expenditures
|
$
|
55.3
|
|
|
$
|
52.4
|
|
|
$
|
25.7
|
|
|
$
|
20.5
|
|
Depreciation and amortization
|
$
|
76.0
|
|
|
$
|
75.3
|
|
|
$
|
25.8
|
|
|
$
|
23.7
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate Operations and Other
|
|
|
|
|
|
|
|
||||||||
Segment operating loss
|
$
|
(99.9
|
)
|
|
$
|
(95.9
|
)
|
|
$
|
(35.1
|
)
|
|
$
|
(38.5
|
)
|
Equity in losses of equity method investees
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
Long-lived tangible assets
|
$
|
131.7
|
|
|
$
|
108.2
|
|
|
$
|
131.7
|
|
|
$
|
108.2
|
|
Investments in equity method investees
|
$
|
22.8
|
|
|
$
|
1.0
|
|
|
$
|
22.8
|
|
|
$
|
1.0
|
|
Total assets
|
$
|
352.3
|
|
|
$
|
655.3
|
|
|
$
|
352.3
|
|
|
$
|
655.3
|
|
Capital expenditures
|
$
|
41.4
|
|
|
$
|
4.1
|
|
|
$
|
6.3
|
|
|
$
|
1.9
|
|
Depreciation and amortization
|
$
|
22.8
|
|
|
$
|
20.7
|
|
|
$
|
8.2
|
|
|
$
|
6.7
|
|
|
|
|
|
|
|
|
|
||||||||
Comparable Adjustments
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
$
|
(2.9
|
)
|
|
$
|
(76.9
|
)
|
|
$
|
2.4
|
|
|
$
|
(28.5
|
)
|
Depreciation and amortization
|
$
|
2.2
|
|
|
$
|
25.3
|
|
|
$
|
—
|
|
|
$
|
7.4
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
5,703.5
|
|
|
$
|
5,005.2
|
|
|
$
|
1,810.5
|
|
|
$
|
1,640.5
|
|
Operating income
|
$
|
1,697.6
|
|
|
$
|
1,354.0
|
|
|
$
|
534.0
|
|
|
$
|
447.3
|
|
Equity in earnings of equity method investees
|
$
|
28.2
|
|
|
$
|
28.5
|
|
|
$
|
27.5
|
|
|
$
|
27.3
|
|
Long-lived tangible assets
|
$
|
3,708.0
|
|
|
$
|
2,949.0
|
|
|
$
|
3,708.0
|
|
|
$
|
2,949.0
|
|
Investments in equity method investees
|
$
|
115.7
|
|
|
$
|
92.0
|
|
|
$
|
115.7
|
|
|
$
|
92.0
|
|
Total assets
|
$
|
18,320.1
|
|
|
$
|
16,108.1
|
|
|
$
|
18,320.1
|
|
|
$
|
16,108.1
|
|
Capital expenditures
|
$
|
591.6
|
|
|
$
|
513.8
|
|
|
$
|
223.0
|
|
|
$
|
219.0
|
|
Depreciation and amortization
|
$
|
183.7
|
|
|
$
|
162.7
|
|
|
$
|
63.5
|
|
|
$
|
51.3
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Overview.
This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition and potential future trends.
|
•
|
Strategy.
This section provides a description of our strategy on a business segment basis and a discussion of recent developments and acquisitions.
|
•
|
Results of operations.
This section provides an analysis of our results of operations presented on a business segment basis. In addition, a brief description of transactions and other items that affect the comparability of the results is provided.
|
•
|
Financial liquidity and capital resources.
This section provides an analysis of our cash flows and a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments, as well as a discussion of other financing arrangements.
|
•
|
continued focus on growing our Mexican beer portfolio in the U.S. through
expanding distribution for key brands, as well as new product development and innovation within the existing portfolio of brands;
|
•
|
completion of an additional 7.5 million hectoliters production capacity expansion of the Nava Brewery, from 20 million to 25 million expected by summer of calendar 2017 and from 25 million to 27.5 million expected by early calendar 2018;
|
•
|
construction of a new, state-of-the-art brewery located in Mexicali, Baja California, Mexico (the “Mexicali Brewery”) with the first 5 million hectoliters of production capacity expected to be completed by calendar year-end 2019; and
|
•
|
participation in the high-end craft beer category.
|
|
For the Nine Months Ended November 30,
|
|
For the Year Ended February 29, 2016
|
||||||||
|
2016
|
|
2015
|
|
|||||||
(in millions)
|
|
|
|
|
|
||||||
Net sales
|
$
|
288.6
|
|
|
$
|
284.3
|
|
|
$
|
365.1
|
|
Gross profit
|
$
|
122.5
|
|
|
$
|
117.7
|
|
|
$
|
152.9
|
|
Depreciation and amortization
|
$
|
8.6
|
|
|
$
|
8.5
|
|
|
$
|
11.1
|
|
Operating income
|
$
|
46.6
|
|
|
$
|
47.7
|
|
|
$
|
62.5
|
|
Income before income taxes
|
$
|
43.5
|
|
|
$
|
47.4
|
|
|
$
|
61.9
|
|
|
|
|
|
|
|
||||||
Cash flow from operating activities
|
$
|
35.2
|
|
|
$
|
55.0
|
|
|
$
|
80.0
|
|
|
|
|
|
|
|
||||||
Total assets
|
$
|
514.6
|
|
|
|
|
|
||||
Long-term debt, including current maturities
|
$
|
204.0
|
|
|
|
|
|
•
|
Our results of operations benefited from improvements in both the Beer and Wine and Spirits segments.
|
•
|
Net sales
increased
10%
primarily due to volume growth within our Mexican beer portfolio and net sales from the acquired Ballast Point and Prisoner brands.
|
•
|
Operating income
increased
19%
primarily
due to the strong consumer demand for the Mexican beer portfolio and benefits from lower Comparable Adjustments.
|
•
|
Net income attributable to CBI and diluted net income per common share attributable to CBI
increased
50%
and
49%
, respectively, primarily due to an income tax benefit driven largely by a change in our assertion regarding the indefinite reinvestment of certain foreign earnings in Third Quarter 2017 and the strong results for the Beer business.
|
•
|
Our results of operations benefited from improvements in both the Beer and Wine and Spirits segments.
|
•
|
Net sales
increased
14%
primarily due to the strong consumer demand and the favorable impact from pricing in select markets within the Mexican beer portfolio and net sales from the acquired Ballast Point, Meiomi and Prisoner brands.
|
•
|
Operating income
increased
25%
primarily
due to the strong consumer demand for the Mexican beer portfolio; benefits from the acquisitions of Ballast Point, Meiomi and Prisoner; and lower Comparable Adjustments.
|
•
|
Net income attributable to CBI and diluted net income per common share attributable to CBI
increased
33%
and
32%
, respectively, primarily due to the items discussed above and an income tax benefit driven largely by a change in our assertion regarding the indefinite reinvestment of certain foreign earnings in Third Quarter 2017.
|
|
Third
Quarter 2017 |
|
Third
Quarter 2016 |
|
Nine
Months 2017 |
|
Nine
Months 2016 |
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Cost of product sold
|
|
|
|
|
|
|
|
||||||||
Net gain (loss) on undesignated commodity derivative contracts
|
$
|
6.7
|
|
|
$
|
(18.1
|
)
|
|
$
|
14.4
|
|
|
$
|
(34.5
|
)
|
Settlements of undesignated commodity derivative contracts
|
5.2
|
|
|
8.2
|
|
|
20.3
|
|
|
20.4
|
|
||||
Flow through of inventory step-up
|
(4.9
|
)
|
|
(8.6
|
)
|
|
(16.4
|
)
|
|
(9.8
|
)
|
||||
Amortization of favorable interim supply agreement
|
—
|
|
|
(7.4
|
)
|
|
(2.2
|
)
|
|
(25.3
|
)
|
||||
Total cost of product sold
|
7.0
|
|
|
(25.9
|
)
|
|
16.1
|
|
|
(49.2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
||||||||
Transaction, integration and other acquisition-related costs
|
(5.7
|
)
|
|
(1.9
|
)
|
|
(11.0
|
)
|
|
(12.7
|
)
|
||||
Net gain (costs) associated with the Canadian Divestiture and related activities
|
3.6
|
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
||||
Restructuring and related charges
|
0.1
|
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(15.0
|
)
|
||||
Other costs
|
(2.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
||||
Total selling, general and administrative expenses
|
(4.6
|
)
|
|
(2.6
|
)
|
|
(19.0
|
)
|
|
(27.7
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss on write-off of debt issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
||||
Comparable Adjustments
|
$
|
2.4
|
|
|
$
|
(28.5
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
(78.0
|
)
|
|
Third
Quarter 2017 |
|
Third
Quarter 2016 |
|
% Increase
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
964.6
|
|
|
$
|
831.3
|
|
|
16
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|||||
Wine
|
754.3
|
|
|
719.4
|
|
|
5
|
%
|
||
Spirits
|
91.6
|
|
|
89.8
|
|
|
2
|
%
|
||
Total Wine and Spirits
|
845.9
|
|
|
809.2
|
|
|
5
|
%
|
||
Consolidated net sales
|
$
|
1,810.5
|
|
|
$
|
1,640.5
|
|
|
10
|
%
|
Beer
|
Third
Quarter 2017 |
|
Third
Quarter 2016 |
|
% Increase
|
|||||
(in millions, branded product, 24-pack, 12-ounce case equivalents)
|
|
|
|
|
|
|||||
Net sales
|
$
|
964.6
|
|
|
$
|
831.3
|
|
|
16
|
%
|
|
|
|
|
|
|
|||||
Shipment volume
|
|
|
|
|
|
|||||
Total
|
57.7
|
|
|
51.4
|
|
|
12.3
|
%
|
||
Organic
|
56.7
|
|
|
51.4
|
|
|
10.3
|
%
|
||
|
|
|
|
|
|
|||||
Depletion volume
(1)
|
|
|
|
|
10.7
|
%
|
Wine and Spirits
|
Third
Quarter 2017 |
|
Third
Quarter 2016 |
|
% Increase (Decrease)
|
|||||
(in millions, branded product, 9-liter case equivalents)
|
|
|
|
|
|
|||||
Net sales
|
$
|
845.9
|
|
|
$
|
809.2
|
|
|
5
|
%
|
|
|
|
|
|
|
|||||
Shipment volume
|
|
|
|
|
|
|||||
Total
|
18.3
|
|
|
18.4
|
|
|
(0.5
|
%)
|
||
Organic
|
18.2
|
|
|
18.4
|
|
|
(1.1
|
%)
|
||
|
|
|
|
|
|
|||||
U.S. Domestic
|
14.0
|
|
|
14.1
|
|
|
(0.7
|
%)
|
||
Organic U.S. Domestic
|
13.9
|
|
|
14.1
|
|
|
(1.4
|
%)
|
||
|
|
|
|
|
|
|||||
U.S. Domestic Focus Brands
|
8.1
|
|
|
7.6
|
|
|
6.6
|
%
|
||
Organic U.S. Domestic Focus Brands
|
8.1
|
|
|
7.6
|
|
|
6.6
|
%
|
||
|
|
|
|
|
|
|||||
Depletion volume
(1)
|
|
|
|
|
|
|||||
U.S. Domestic
|
|
|
|
|
3.4
|
%
|
||||
U.S. Domestic Focus Brands
|
|
|
|
|
8.8
|
%
|
(1)
|
Depletions represent distributor shipments of our respective branded products to retail customers, based on third-party data, including acquired brands from the date of acquisition and for the comparable prior year period.
|
|
Third
Quarter 2017 |
|
Third
Quarter 2016 |
|
% Increase
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
499.4
|
|
|
$
|
406.2
|
|
|
23
|
%
|
Wine and Spirits
|
385.0
|
|
|
353.2
|
|
|
9
|
%
|
||
Comparable Adjustments
|
7.0
|
|
|
(25.9
|
)
|
|
NM
|
|
||
Consolidated gross profit
|
$
|
891.4
|
|
|
$
|
733.5
|
|
|
22
|
%
|
|
|
|
|
|
|
|||||
NM = Not meaningful
|
|
|
|
|
|
|
Third
Quarter 2017 |
|
Third
Quarter 2016 |
|
% Increase
(Decrease)
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
163.7
|
|
|
$
|
114.6
|
|
|
43
|
%
|
Wine and Spirits
|
154.0
|
|
|
130.5
|
|
|
18
|
%
|
||
Corporate Operations and Other
|
35.1
|
|
|
38.5
|
|
|
(9
|
%)
|
||
Comparable Adjustments
|
4.6
|
|
|
2.6
|
|
|
77
|
%
|
||
Consolidated selling, general and administrative expenses
|
$
|
357.4
|
|
|
$
|
286.2
|
|
|
25
|
%
|
|
Third
Quarter 2017 |
|
Third
Quarter 2016 |
|
% Increase
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
335.7
|
|
|
$
|
291.6
|
|
|
15
|
%
|
Wine and Spirits
|
231.0
|
|
|
222.7
|
|
|
4
|
%
|
||
Corporate Operations and Other
|
(35.1
|
)
|
|
(38.5
|
)
|
|
9
|
%
|
||
Comparable Adjustments
|
2.4
|
|
|
(28.5
|
)
|
|
NM
|
|
||
Consolidated operating income
|
$
|
534.0
|
|
|
$
|
447.3
|
|
|
19
|
%
|
|
Nine
Months 2017 |
|
Nine
Months 2016 |
|
% Increase
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
3,338.1
|
|
|
$
|
2,816.6
|
|
|
19
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|||||
Wine
|
2,102.8
|
|
|
1,931.5
|
|
|
9
|
%
|
||
Spirits
|
262.6
|
|
|
257.1
|
|
|
2
|
%
|
||
Total Wine and Spirits
|
2,365.4
|
|
|
2,188.6
|
|
|
8
|
%
|
||
Consolidated net sales
|
$
|
5,703.5
|
|
|
$
|
5,005.2
|
|
|
14
|
%
|
Beer
|
Nine
Months 2017 |
|
Nine
Months 2016 |
|
% Increase
|
|||||
(in millions, branded product, 24-pack, 12-ounce case equivalents)
|
|
|
|
|
|
|||||
Net sales
|
$
|
3,338.1
|
|
|
$
|
2,816.6
|
|
|
19
|
%
|
|
|
|
|
|
|
|||||
Shipment volume
|
|
|
|
|
|
|
||||
Total
|
200.5
|
|
|
175.7
|
|
|
14.1
|
%
|
||
Organic
|
196.6
|
|
|
175.7
|
|
|
11.9
|
%
|
||
|
|
|
|
|
|
|||||
Depletion volume
(1)
|
|
|
|
|
11.6
|
%
|
Wine and Spirits
|
Nine
Months 2017 |
|
Nine
Months 2016 |
|
% Increase
|
|||||
(in millions, branded product, 9-liter case equivalents)
|
|
|
|
|
|
|||||
Net sales
|
$
|
2,365.4
|
|
|
$
|
2,188.6
|
|
|
8
|
%
|
|
|
|
|
|
|
|||||
Shipment volume
|
|
|
|
|
|
|||||
Total
|
52.9
|
|
|
51.1
|
|
|
3.5
|
%
|
||
Organic
|
52.3
|
|
|
51.1
|
|
|
2.3
|
%
|
||
|
|
|
|
|
|
|||||
U.S. Domestic
|
40.6
|
|
|
38.6
|
|
|
5.2
|
%
|
||
Organic U.S. Domestic
|
40.0
|
|
|
38.6
|
|
|
3.6
|
%
|
||
|
|
|
|
|
|
|||||
U.S. Domestic Focus Brands
|
23.4
|
|
|
20.8
|
|
|
12.5
|
%
|
||
Organic U.S. Domestic Focus Brands
|
22.9
|
|
|
20.8
|
|
|
10.1
|
%
|
||
|
|
|
|
|
|
|||||
Depletion volume
(1)
|
|
|
|
|
|
|||||
U.S. Domestic
|
|
|
|
|
3.9
|
%
|
||||
U.S. Domestic Focus Brands
|
|
|
|
|
9.7
|
%
|
(1)
|
Depletions represent distributor shipments of our respective branded products to retail customers, based on third-party data, including acquired brands from the date of acquisition and for the comparable prior year period.
|
|
Nine
Months 2017 |
|
Nine
Months 2016 |
|
% Increase
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
1,687.1
|
|
|
$
|
1,374.3
|
|
|
23
|
%
|
Wine and Spirits
|
1,038.5
|
|
|
921.1
|
|
|
13
|
%
|
||
Comparable Adjustments
|
16.1
|
|
|
(49.2
|
)
|
|
NM
|
|
||
Consolidated gross profit
|
$
|
2,741.7
|
|
|
$
|
2,246.2
|
|
|
22
|
%
|
|
Nine
Months 2017 |
|
Nine
Months 2016 |
|
% Increase (Decrease)
|
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
491.4
|
|
|
$
|
390.3
|
|
|
26
|
%
|
Wine and Spirits
|
433.8
|
|
|
378.3
|
|
|
15
|
%
|
||
Corporate Operations and Other
|
99.9
|
|
|
95.9
|
|
|
4
|
%
|
||
Comparable Adjustments
|
19.0
|
|
|
27.7
|
|
|
(31
|
%)
|
||
Consolidated selling, general and administrative expenses
|
$
|
1,044.1
|
|
|
$
|
892.2
|
|
|
17
|
%
|
|
Nine
Months 2017 |
|
Nine
Months 2016 |
|
% Increase
(Decrease) |
|||||
(in millions)
|
|
|
|
|
|
|||||
Beer
|
$
|
1,195.7
|
|
|
$
|
984.0
|
|
|
22
|
%
|
Wine and Spirits
|
604.7
|
|
|
542.8
|
|
|
11
|
%
|
||
Corporate Operations and Other
|
(99.9
|
)
|
|
(95.9
|
)
|
|
(4
|
%)
|
||
Comparable Adjustments
|
(2.9
|
)
|
|
(76.9
|
)
|
|
NM
|
|
||
Consolidated operating income
|
$
|
1,697.6
|
|
|
$
|
1,354.0
|
|
|
25
|
%
|
|
Nine
Months 2017 |
|
Nine
Months 2016 |
||||
(in millions)
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
1,415.7
|
|
|
$
|
1,091.6
|
|
Net cash used in investing activities
|
(1,149.1
|
)
|
|
(827.7
|
)
|
||
Net cash provided by (used in) financing activities
|
(146.4
|
)
|
|
122.2
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(6.0
|
)
|
|
(4.9
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
114.2
|
|
|
$
|
381.2
|
|
•
|
Nine Months 2017
principal payments of long-term debt driven largely by the repayment of the August 2006 Senior Notes of $700.0 million;
|
•
|
Nine Months 2017
share repurchases under the 2013 Authorization of
$372.6 million
; and
|
•
|
Nine Months 2017
excess tax benefits from stock-based payment awards of
$112.2 million
compared with
$204.2 million
for
Nine Months 2016
due to decreased
Nine Months 2017
employee equity award exercise activity;
|
•
|
Nine Months 2017
proceeds from issuance of long-term debt of $700.0 million (used to refinance borrowings under our then-existing senior credit facility and accounts receivable securitization facilities, and for other general corporate purposes) and $400.0 million (used to finance the purchase price for the acquisitions of High West and Charles Smith, and for other general corporate purposes) from term loan borrowings under our senior credit facility;
|
•
|
Nine Months 2017
proceeds from issuance of long-term debt of
C$275.0 million
(
$214.1 million
at issuance) from term loan borrowings under the Canadian Credit Agreement (used for general corporate purposes); compared with
|
•
|
Nine Months 2016
proceeds from issuance of long-term debt of $200.0 million from term loan borrowings under our then-existing senior credit facility (used to fund a portion of the purchase price for the acquisition of Meiomi).
|
|
Remaining Borrowing Capacity
|
||||||
|
November 30,
2016 |
|
December 31,
2016 |
||||
(in millions)
|
|
|
|
||||
Revolving Credit Facility
|
$
|
913.3
|
|
|
$
|
1,038.3
|
|
CBI Facility
|
$
|
208.0
|
|
|
$
|
202.0
|
|
Crown Facility
|
$
|
150.0
|
|
|
$
|
140.0
|
|
|
|
|
Class A Common Shares
|
||||||
|
Repurchase Authorization
|
|
Dollar Value of Shares Repurchased
|
|
Number of Shares Repurchased
|
||||
(in millions, except share data)
|
|
|
|
|
|
||||
2013 Authorization
|
$
|
1,000.0
|
|
|
$
|
1,000.0
|
|
|
18,670,632
|
2017 Authorization
|
$
|
1,000.0
|
|
|
$
|
153.1
|
|
|
994,142
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
Aggregate
Notional Value
|
|
Fair Value,
Net Liability
|
|
Increase
in Fair Value –
Hypothetical
10% Adverse Change
|
||||||||||||||||||
|
November 30,
2016 |
|
November 30,
2015 |
|
November 30,
2016 |
|
November 30,
2015 |
|
November 30,
2016 |
|
November 30,
2015 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
$
|
2,502.8
|
|
|
$
|
1,573.6
|
|
|
$
|
87.7
|
|
|
$
|
37.0
|
|
|
$
|
30.2
|
|
|
$
|
62.2
|
|
Commodity derivative contracts
|
$
|
168.7
|
|
|
$
|
213.6
|
|
|
$
|
11.0
|
|
|
$
|
40.9
|
|
|
$
|
13.5
|
|
|
$
|
15.3
|
|
|
Aggregate
Notional Value
|
|
Fair Value,
Net Asset (Liability)
|
|
Increase (Decrease)
in Fair Value –
Hypothetical
1% Rate Increase
|
||||||||||||||||||
|
November 30,
2016 |
|
November 30,
2015 |
|
November 30,
2016 |
|
November 30,
2015 |
|
November 30,
2016 |
|
November 30,
2015 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed interest rate debt
|
$
|
4,101.1
|
|
|
$
|
4,409.4
|
|
|
$
|
(4,320.2
|
)
|
|
$
|
(4,570.4
|
)
|
|
$
|
(187.1
|
)
|
|
$
|
(185.6
|
)
|
Variable interest rate debt
|
$
|
4,580.3
|
|
|
$
|
2,994.3
|
|
|
$
|
(4,416.8
|
)
|
|
$
|
(2,574.6
|
)
|
|
$
|
(133.7
|
)
|
|
$
|
(99.5
|
)
|
Interest rate swap contracts
|
$
|
250.0
|
|
|
$
|
1,500.0
|
|
|
$
|
3.2
|
|
|
$
|
(11.4
|
)
|
|
$
|
8.1
|
|
|
$
|
(2.6
|
)
|
Item 4.
|
Controls and Procedures.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|
Total Number
of Shares
Purchased as
Part of a
Publicly
Announced
Program
|
|
Approximate
Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Program
(1) (4)
|
|
||||||
September 1 – 30, 2016
|
|
119,657
|
|
|
$
|
164.50
|
|
|
119,657
|
|
|
$
|
644,366,145
|
|
(2)
|
October 1 – 31, 2016
|
|
54,757
|
|
|
$
|
166.11
|
|
|
54,757
|
|
|
$
|
635,270,719
|
|
(2)
|
November 1 – 30, 2016
|
|
2,203,279
|
|
|
$
|
153.59
|
|
|
2,203,279
|
|
|
$
|
296,879,266
|
|
(3)
|
Total
|
|
2,377,693
|
|
|
$
|
154.42
|
|
|
2,377,693
|
|
|
|
|
(1)
|
In April 2012, our Board of Directors authorized the repurchase of up to an aggregate amount of $1.0 billion of our Class A Common Stock and Class B Convertible Common Stock under the 2013 Authorization. The Board of Directors did not specify a date upon which the 2013 Authorization would expire.
|
(2)
|
Repurchases made September 1, 2016, through October 7, 2016, were made pursuant to a Rule 10b5-1 trading plan.
|
(3)
|
Subsequent to
November 30, 2016
, we utilized the remaining
$296.9 million
available under the 2013 Authorization to repurchase
1,988,311
shares of Class A Common Stock at an average cost of
$149.31
per share, through open market transactions, thereby completing the 2013 Authorization. All repurchases made subsequent to November 30, 2016, were made pursuant to a Rule 10b5-1 trading plan.
|
(4)
|
In November 2016, our Board of Directors authorized the repurchase of up to an aggregate amount of $1.0 billion of our Class A Common Stock and Class B Convertible Common Stock under the 2017 Authorization. The Board of Directors did not specify a date upon which the 2017 Authorization would expire. Subsequent to November 30, 2016, we repurchased
994,142
shares of Class A Common Stock pursuant to the 2017 Authorization at an aggregate cost of
$153.1 million
, or an average cost of
$154.02
per share, through open market transactions. All repurchases made subsequent to November 30, 2016, were made pursuant to a Rule 10b5-1 trading plan.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 6.
|
Exhibits.
|
|
|
CONSTELLATION BRANDS, INC.
|
|
|
|
|
|
Date:
|
January 5, 2017
|
By:
|
/s/ Lisa M. Schnorr
|
|
|
|
Lisa M. Schnorr, Senior Vice President
and Controller
|
|
|
|
|
Date:
|
January 5, 2017
|
By:
|
/s/ David Klein
|
|
|
|
David Klein, 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 Amendment No. 1 to Current Report on Form 8-K/A dated June 28, 2012, filed November 9, 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, amended as of October 4, 2016 (filed herewith).
|
|
|
|
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 (no longer outstanding), 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 (no longer outstanding), 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 the Company, Constellation Brands Beach Holdings, Inc., Crown Imports LLC, 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
|
|
Supplemental Indenture No. 8, dated as of May 28, 2014, among the Company, Constellation Marketing Services, Inc., and The Bank of New York Mellon Trust Company, National Association, as trustee (filed as Exhibit 4.9 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2014 and incorporated herein by reference).
|
|
|
|
4.10
|
|
Supplemental Indenture No. 9, dated as of January 15, 2016, among the Company, Home Brew Mart, Inc. and The Bank of New York Mellon Trust Company, N.A. (successor trustee to BNY Midwest Trust Company), as Trustee (filed as Exhibit 4.10 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2016 and incorporated herein by reference).
|
|
|
|
4.11
|
|
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). #
|
|
|
|
4.12
|
|
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). #
|
|
|
|
4.13
|
|
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). #
|
|
|
|
4.14
|
|
Supplemental Indenture No. 3, dated as of June 7, 2013, among the Company, Constellation Brands Beach Holdings, Inc., Crown Imports LLC, 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).
|
|
|
|
4.15
|
|
Supplemental Indenture No. 4, dated as of May 28, 2014, among the Company, Constellation Marketing Services, Inc., and The Bank of New York Mellon Trust Company, National Association, as trustee (filed as Exhibit 4.14 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2014 and incorporated herein by reference).
|
|
|
|
4.16
|
|
Supplemental Indenture No. 5, dated as of January 15, 2016, among the Company, Home Brew Mart, Inc. and The Bank of New York Mellon Trust Company, N.A. (successor trustee to BNY Midwest Trust Company), as Trustee (filed as Exhibit 4.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2016 and incorporated herein by reference).
|
|
|
|
4.17
|
|
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).
|
|
|
|
4.18
|
|
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).
|
|
|
|
4.19
|
|
Supplemental Indenture No. 3, with respect to 3.75% Senior Notes due May 2021, dated as of May 14, 2013, 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 May 14, 2013, filed May 16, 2013 and incorporated herein by reference).
|
|
|
|
4.20
|
|
Supplemental Indenture No. 4, with respect to 4.25% Senior Notes due May 2023, dated as of May 14, 2013, among the Company, 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).
|
|
|
|
4.21
|
|
Supplemental Indenture No. 5, dated as of June 7, 2013, among the Company, Constellation Brands Beach Holdings, Inc., Crown Imports LLC, 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).
|
|
|
|
4.22
|
|
Supplemental Indenture No. 6, dated as of May 28, 2014, among the Company, Constellation Marketing Services, Inc., and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.21 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2014 and incorporated herein by reference).
|
|
|
|
4.23
|
|
Supplemental Indenture No. 7, with respect to 3.875% Senior Notes due 2019, dated as of November 3, 2014, 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 November 3, 2014, filed November 7, 2014 and incorporated herein by reference).
|
|
|
|
4.24
|
|
Supplemental Indenture No. 8, with respect to 4.750% Senior Notes due 2024, dated as of November 3, 2014, among the Company, 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 November 3, 2014, filed November 7, 2014 and incorporated herein by reference).
|
|
|
|
4.25
|
|
Supplemental Indenture No. 9, with respect to 4.750% Senior Notes due 2025, dated December 4, 2015, 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 December 4, 2015, filed December 8, 2015 and incorporated herein by reference).
|
|
|
|
4.26
|
|
Supplemental Indenture No. 10, dated as of January 15, 2016, among the Company, Home Brew Mart, Inc. and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.26 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2016 and incorporated herein by reference).
|
|
|
|
4.27
|
|
Supplemental Indenture No. 11 with respect to 3.700% Senior Notes due 2026, dated as of December 6, 2016, 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 December 6, 2016, filed December 6, 2016 and incorporated herein by reference).
|
|
|
|
4.28
|
|
Restatement Agreement, dated as of March 10, 2016, by and among the Company, CIH International S.à r.l., CIH Holdings S.à r.l., CI Cerveza S.à r.l., the Guarantors, Bank of America, N.A., as administrative agent, and the Lenders party thereto, including the Fourth Amended and Restated Credit Agreement dated as of March 10, 2016, by and among the Company, CIH International S.à r.l., CIH Holdings S.à r.l., 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 March 10, 2016, filed March 15, 2016 and incorporated herein by reference).
|
|
|
|
4.29
|
|
Restatement Agreement, dated as of October 13, 2016, by and among the Company, CIH International S.à r.l., CIH Holdings S.à r.l., CB International Finance S.à r.l., CI Cerveza S.à r.l., the Guarantors, Bank of America, N.A., as administrative agent, and the Lenders thereto, including the Fifth Amended and Restated Credit Agreement dated as of October 13, 2016, by and among the Company, CIH International S.à r.l., CIH Holdings S.à r.l., CB International Finance S.à r.l., 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 October 13, 2016, filed October 18, 2016 and incorporated herein by reference).
|
|
|
|
10.1
|
|
Amended and Restated Guarantee Agreement, dated as of June 7, 2013, made by the subsidiaries of the Company from time to time party thereto and Constellation Brands, Inc., in favor of Bank of America, N.A., as Administrative Agent, for the ratable benefit of the Lenders party to the Credit Agreement (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K dated June 7, 2013, filed June 11, 2013 and incorporated herein by reference).
|
|
|
|
10.2
|
|
Cross-Guarantee Agreement, dated as of March 10, 2016, by and among CIH International S.à r.l., CIH Holdings S.à r.l. and Bank of America, N.A., as administrative agent (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 10, 2016, filed March 15, 2016 and incorporated herein by reference).
|
|
|
|
10.3
|
|
Form of U.S. Pledge Agreement (filed as Exhibit D-1 to 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).
|
|
|
|
10.4
|
|
Form of Luxembourg Equity Pledge Agreement (filed as Exhibit D-2 to 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).
|
|
|
|
10.5
|
|
Form of Luxembourg PEC Pledge Agreement (filed as Exhibit D-3 to 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).
|
|
|
|
10.6
|
|
Form of Barbados Charge Over Shares (filed as Exhibit D-4 to 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).
|
|
|
|
10.7
|
|
Form of Mexican Pledge Agreement (filed as 10.60 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2016 and incorporated herein by reference).
|
|
|
|
10.8
|
|
Amended and Restated Cross-Guarantee Agreement, dated as of October 13, 2016, by and among CIH International S.à r.l., CIH Holdings S.à r.l., CB International Finance S.à r.l., and Bank of America, N.A., as administrative agent (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 13, 2016, filed October 18, 2016 and incorporated herein by reference).
|
|
|
|
10.9
|
|
Second Amendment to Interim Supply Agreement dated as of September 20, 2016, by and between CIH International S.à r.l., as successor by assignment to Crown Imports LLC and Grupo Modelo, S. de R.L. de C.V., as successor to Grupo Modelo, S.A.B. de C.V. (filed as Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2016 and incorporated herein by reference). +
|
|
|
|
10.10
|
|
Retention Bonus Agreement dated November 24, 2016 between Constellation Brands Canada, Inc. and John A. (Jay) Wright (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 24, 2016, filed November 28, 2016 and incorporated herein by reference). *
|
|
|
|
12.1
|
|
Statements re computation of ratios (filed herewith).
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith).
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith).
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (filed herewith).
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (filed herewith).
|
|
|
|
99.1
|
|
Stipulation and Order dated April 19, 2013, among Constellation Brands, Inc., Anheuser-Busch Inbev SA/NV, Grupo Modelo, S.A.B. de C.V., and the Antitrust Division of the United States Department of Justice (filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated April 19, 2013, filed April 19, 2013 and incorporated herein by reference).
|
|
|
|
99.2
|
|
Final Judgment filed with the United States District Court for the District of Columbia on October 24, 2013, together with Exhibits B and C (filed as Exhibit 99.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2013 and incorporated herein by reference).
|
|
|
|
101.1
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of November 30, 2016 and February 29, 2016, (ii) Consolidated Statements of Comprehensive Income for the nine months and three months ended November 30, 2016 and 2015, (iii) Consolidated Statements of Cash Flows for the nine months ended November 30, 2016 and 2015, and (iv) Notes to Consolidated Financial Statements.
|
#
|
Company’s Commission File No. 001-08495.
|
+
|
Portions of this exhibit were redacted pursuant to a confidential treatment request filed with and approved by the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
*
|
Designates management contract or compensatory plan or arrangement.
|
|
For the Nine Months Ended
|
|
For the Fiscal Years Ended
|
||||||||||||||||||||||||
|
November 30,
2016 |
|
November 30,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
|
February 28,
2014 |
|
February 28,
2013 |
|
February 29,
2012 |
||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income before income taxes
|
$
|
1,469.5
|
|
|
$
|
1,151.0
|
|
|
$
|
1,501.2
|
|
|
$
|
1,179.6
|
|
|
$
|
2,202.3
|
|
|
$
|
516.4
|
|
|
$
|
534.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Plus fixed charges
|
269.8
|
|
|
245.0
|
|
|
332.3
|
|
|
352.3
|
|
|
337.5
|
|
|
239.4
|
|
|
194.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Less interest capitalized
|
(8.3
|
)
|
|
(10.5
|
)
|
|
(12.7
|
)
|
|
(8.2
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earnings, as adjusted
|
$
|
1,731.0
|
|
|
$
|
1,385.5
|
|
|
$
|
1,820.8
|
|
|
$
|
1,523.7
|
|
|
$
|
2,538.9
|
|
|
$
|
755.8
|
|
|
$
|
728.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest on debt and capitalized leases, amortization of debt issuance costs, and amortization of discount on debt
(b)
|
$
|
266.3
|
|
|
$
|
241.7
|
|
|
$
|
327.8
|
|
|
$
|
347.7
|
|
|
$
|
332.2
|
|
|
$
|
234.3
|
|
|
$
|
188.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest element of rentals
|
3.6
|
|
|
3.3
|
|
|
4.5
|
|
|
4.7
|
|
|
5.3
|
|
|
5.1
|
|
|
6.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total fixed charges
|
$
|
269.9
|
|
|
$
|
245.0
|
|
|
$
|
332.3
|
|
|
$
|
352.4
|
|
|
$
|
337.5
|
|
|
$
|
239.4
|
|
|
$
|
194.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Ratio of Earnings to Fixed Charges
|
6.4x
|
|
|
5.7x
|
|
|
5.5x
|
|
|
4.3x
|
|
|
7.5x
|
|
|
3.2x
|
|
|
3.8x
|
|
(a)
|
For the purpose of calculating the ratio of earnings to fixed charges, “earnings” represent income before income taxes (adjusted, as appropriate, for equity in earnings of equity method investees) plus fixed charges less interest capitalized. “Fixed charges” consist of interest expensed and capitalized, amortization of debt issuance costs, amortization of discount on debt, and the portion of rental expense which management believes is representative of the interest component of lease expense.
|
(b)
|
The Company’s policy is to classify interest expense recognized on uncertain tax positions as income tax expense. The Company has excluded interest expense recognized on uncertain tax positions from the Ratio of Earnings to Fixed Charges.
|
/s/ Robert Sands
|
Robert Sands
|
President and Chief Executive Officer
|
/s/ David Klein
|
David Klein
|
Executive Vice President and Chief Financial Officer
|
Dated:
|
January 5, 2017
|
/s/ Robert Sands
|
|
|
Robert Sands,
President and Chief Executive Officer
|
Dated:
|
January 5, 2017
|
/s/ David Klein
|
|
|
David Klein,
Executive Vice President and
Chief Financial Officer
|