ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
16-0716709
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
207 High Point Drive, Building 100, Victor, New York
|
14564
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
|
|
(585) 678-7100
|
|
|
(Registrant’s telephone number, including area code)
|
|
|
|
|
|
Not Applicable
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
|
ý
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
Class
|
|
Number of Shares Outstanding
|
Class A Common Stock, par value $.01 per share
|
|
171,963,496
|
Class B Common Stock, par value $.01 per share
|
|
23,338,727
|
Class 1 Common Stock, par value $.01 per share
|
|
7,720
|
|
|
|
|
Item 1.
|
Financial Statements.
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
|
|||||||
|
May 31,
2017 |
|
February 28,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
199.1
|
|
|
$
|
177.4
|
|
Accounts receivable
|
832.0
|
|
|
737.0
|
|
||
Inventories
|
1,936.9
|
|
|
1,955.1
|
|
||
Prepaid expenses and other
|
392.5
|
|
|
360.5
|
|
||
Total current assets
|
3,360.5
|
|
|
3,230.0
|
|
||
Property, plant and equipment
|
4,186.9
|
|
|
3,932.8
|
|
||
Goodwill
|
7,972.3
|
|
|
7,920.5
|
|
||
Intangible assets
|
3,289.7
|
|
|
3,377.7
|
|
||
Other assets
|
150.0
|
|
|
141.4
|
|
||
Total assets
|
$
|
18,959.4
|
|
|
$
|
18,602.4
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Notes payable to banks
|
$
|
988.1
|
|
|
$
|
606.5
|
|
Current maturities of long-term debt
|
146.2
|
|
|
910.9
|
|
||
Accounts payable
|
558.8
|
|
|
559.8
|
|
||
Other accrued expenses and liabilities
|
489.3
|
|
|
620.4
|
|
||
Total current liabilities
|
2,182.4
|
|
|
2,697.6
|
|
||
Long-term debt, less current maturities
|
8,077.2
|
|
|
7,720.7
|
|
||
Deferred income taxes
|
1,135.5
|
|
|
1,133.6
|
|
||
Other liabilities
|
166.5
|
|
|
165.7
|
|
||
Total liabilities
|
11,561.6
|
|
|
11,717.6
|
|
||
Commitments and contingencies
|
|
|
|
||||
CBI stockholders’ equity:
|
|
|
|
||||
Class A Common Stock, $.01 par value
–
Authorized, 322,000,000 shares; Issued, 258,010,515 shares and 257,506,184 shares, respectively
|
2.6
|
|
|
2.6
|
|
||
Class B Convertible Common Stock, $.01 par value
–
Authorized, 30,000,000 shares; Issued, 28,344,527 shares and 28,358,527 shares, respectively
|
0.3
|
|
|
0.3
|
|
||
Additional paid-in capital
|
2,759.8
|
|
|
2,755.8
|
|
||
Retained earnings
|
7,612.3
|
|
|
7,310.0
|
|
||
Accumulated other comprehensive loss
|
(212.3
|
)
|
|
(399.8
|
)
|
||
|
10,162.7
|
|
|
9,668.9
|
|
||
Less: Treasury stock –
|
|
|
|
||||
Class A Common Stock, at cost, 86,082,806 shares and 86,262,971 shares, respectively
|
(2,770.8
|
)
|
|
(2,775.5
|
)
|
||
Class B Convertible Common Stock, at cost, 5,005,800 shares
|
(2.2
|
)
|
|
(2.2
|
)
|
||
|
(2,773.0
|
)
|
|
(2,777.7
|
)
|
||
Total CBI stockholders’ equity
|
7,389.7
|
|
|
6,891.2
|
|
||
Noncontrolling interests
|
8.1
|
|
|
(6.4
|
)
|
||
Total stockholders’ equity
|
7,397.8
|
|
|
6,884.8
|
|
||
Total liabilities and stockholders’ equity
|
$
|
18,959.4
|
|
|
$
|
18,602.4
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions, except per share data)
(unaudited)
|
|||||||
|
For the Three Months Ended May 31,
|
||||||
|
2017
|
|
2016
|
||||
Sales
|
$
|
2,115.3
|
|
|
$
|
2,053.0
|
|
Less – excise taxes
|
(179.8
|
)
|
|
(181.2
|
)
|
||
Net sales
|
1,935.5
|
|
|
1,871.8
|
|
||
Cost of product sold
|
(940.2
|
)
|
|
(990.5
|
)
|
||
Gross profit
|
995.3
|
|
|
881.3
|
|
||
Selling, general and administrative expenses
|
(427.2
|
)
|
|
(328.6
|
)
|
||
Operating income
|
568.1
|
|
|
552.7
|
|
||
Equity in earnings of equity method investees
|
0.4
|
|
|
0.7
|
|
||
Interest expense
|
(82.4
|
)
|
|
(84.6
|
)
|
||
Loss on write-off of debt issuance costs
|
(6.7
|
)
|
|
—
|
|
||
Income before income taxes
|
479.4
|
|
|
468.8
|
|
||
Provision for income taxes
|
(74.1
|
)
|
|
(149.7
|
)
|
||
Net income
|
405.3
|
|
|
319.1
|
|
||
Net income attributable to noncontrolling interests
|
(2.5
|
)
|
|
(0.8
|
)
|
||
Net income attributable to CBI
|
$
|
402.8
|
|
|
$
|
318.3
|
|
|
|
|
|
||||
Comprehensive income
|
$
|
604.8
|
|
|
$
|
313.2
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
(14.5
|
)
|
|
1.1
|
|
||
Comprehensive income attributable to CBI
|
$
|
590.3
|
|
|
$
|
314.3
|
|
|
|
|
|
||||
Net income per common share attributable to CBI:
|
|
|
|
||||
Basic – Class A Common Stock
|
$
|
2.09
|
|
|
$
|
1.61
|
|
Basic – Class B Convertible Common Stock
|
$
|
1.90
|
|
|
$
|
1.46
|
|
|
|
|
|
||||
Diluted – Class A Common Stock
|
$
|
2.00
|
|
|
$
|
1.55
|
|
Diluted – Class B Convertible Common Stock
|
$
|
1.85
|
|
|
$
|
1.43
|
|
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
||||
Basic – Class A Common Stock
|
171.555
|
|
|
176.542
|
|
||
Basic – Class B Convertible Common Stock
|
23.344
|
|
|
23.353
|
|
||
|
|
|
|
||||
Diluted – Class A Common Stock
|
201.030
|
|
|
205.367
|
|
||
Diluted – Class B Convertible Common Stock
|
23.344
|
|
|
23.353
|
|
||
|
|
|
|
||||
Cash dividends declared per common share:
|
|
|
|
||||
Class A Common Stock
|
$
|
0.52
|
|
|
$
|
0.40
|
|
Class B Convertible Common Stock
|
$
|
0.47
|
|
|
$
|
0.36
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
|||||||
|
For the Three Months Ended May 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
405.3
|
|
|
$
|
319.1
|
|
|
|
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Impairment and amortization of intangible assets
|
88.2
|
|
|
4.2
|
|
||
Depreciation
|
70.1
|
|
|
55.8
|
|
||
Stock-based compensation
|
15.1
|
|
|
16.0
|
|
||
Amortization and loss on write-off of debt issuance costs
|
9.8
|
|
|
3.2
|
|
||
Deferred tax provision (benefit)
|
(8.5
|
)
|
|
56.0
|
|
||
Change in operating assets and liabilities, net of effects from purchase of business:
|
|
|
|
||||
Accounts receivable
|
(96.8
|
)
|
|
(39.0
|
)
|
||
Inventories
|
18.4
|
|
|
(19.0
|
)
|
||
Prepaid expenses and other current assets
|
(36.0
|
)
|
|
(31.6
|
)
|
||
Accounts payable
|
(13.6
|
)
|
|
55.9
|
|
||
Deferred revenue
|
42.4
|
|
|
26.8
|
|
||
Other accrued expenses and liabilities
|
(130.7
|
)
|
|
(69.4
|
)
|
||
Other
|
17.9
|
|
|
(32.1
|
)
|
||
Total adjustments
|
(23.7
|
)
|
|
26.8
|
|
||
Net cash provided by operating activities
|
381.6
|
|
|
345.9
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(217.1
|
)
|
|
(169.4
|
)
|
||
Payments related to sale of business
|
(5.0
|
)
|
|
—
|
|
||
Purchase of business
|
—
|
|
|
(284.9
|
)
|
||
Other investing activities
|
0.8
|
|
|
0.4
|
|
||
Net cash used in investing activities
|
(221.3
|
)
|
|
(453.9
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Principal payments of long-term debt
|
(1,913.4
|
)
|
|
(94.2
|
)
|
||
Dividends paid
|
(100.5
|
)
|
|
(79.3
|
)
|
||
Payments of minimum tax withholdings on stock-based payment awards
|
(22.3
|
)
|
|
(45.5
|
)
|
||
Payments of debt issuance costs
|
(11.8
|
)
|
|
(3.2
|
)
|
||
Proceeds from issuance of long-term debt
|
1,508.5
|
|
|
709.5
|
|
||
Net proceeds from (repayments of) notes payable
|
381.3
|
|
|
(379.1
|
)
|
||
Proceeds from shares issued under equity compensation plans
|
16.6
|
|
|
15.9
|
|
||
Excess tax benefits from stock-based payment awards
|
—
|
|
|
68.8
|
|
||
Purchases of treasury stock
|
—
|
|
|
(1.0
|
)
|
||
Net cash provided by (used in) financing activities
|
(141.6
|
)
|
|
191.9
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
3.0
|
|
|
0.3
|
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
21.7
|
|
|
84.2
|
|
||
Cash and cash equivalents, beginning of period
|
177.4
|
|
|
83.1
|
|
||
Cash and cash equivalents, end of period
|
$
|
199.1
|
|
|
$
|
167.3
|
|
|
|
|
|
||||
Supplemental disclosures of noncash investing and financing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
174.0
|
|
|
$
|
88.0
|
|
|
May 31,
2017 |
|
February 28,
2017 |
||||
(in millions
)
|
|
|
|
||||
Raw materials and supplies
|
$
|
169.5
|
|
|
$
|
149.7
|
|
In-process inventories
|
1,189.8
|
|
|
1,260.1
|
|
||
Finished case goods
|
577.6
|
|
|
545.3
|
|
||
|
$
|
1,936.9
|
|
|
$
|
1,955.1
|
|
|
May 31,
2017 |
|
February 28,
2017 |
||||
(in millions
)
|
|
|
|
||||
Derivative instruments designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
998.7
|
|
|
$
|
981.7
|
|
Interest rate swap contracts
|
$
|
250.0
|
|
|
$
|
250.0
|
|
|
|
|
|
||||
Derivative instruments not designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
288.5
|
|
|
$
|
389.9
|
|
Commodity derivative contracts
|
$
|
165.8
|
|
|
$
|
153.2
|
|
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 Three Months Ended May 31, 2017
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
38.6
|
|
|
Sales
|
|
$
|
0.3
|
|
|
|
|
|
Cost of product sold
|
|
(2.7
|
)
|
|||
Interest rate swap contracts
|
|
(2.0
|
)
|
|
Interest expense
|
|
(0.1
|
)
|
||
|
|
$
|
36.6
|
|
|
|
|
$
|
(2.5
|
)
|
|
|
|
|
|
|
|
||||
For the Three Months Ended May 31, 2016
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(2.3
|
)
|
|
Sales
|
|
$
|
0.1
|
|
|
|
|
|
Cost of product sold
|
|
(5.0
|
)
|
|||
Interest rate swap contracts
|
|
0.9
|
|
|
Interest expense
|
|
(1.9
|
)
|
||
|
|
$
|
(1.4
|
)
|
|
|
|
$
|
(6.8
|
)
|
Derivative Instruments Not
Designated as Hedging Instruments
|
|
|
|
Location of Net Gain (Loss)
Recognized in Income
|
|
Net
Gain (Loss)
Recognized
in Income
|
||
(in millions)
|
|
|
|
|
|
|
||
For the Three Months Ended May 31, 2017
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
(3.1
|
)
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
4.7
|
|
|
|
|
|
|
|
|
$
|
1.6
|
|
|
|
|
|
|
|
|
||
For the Three Months Ended May 31, 2016
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
13.1
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(10.5
|
)
|
|
|
|
|
|
|
|
$
|
2.6
|
|
•
|
Level 1 inputs are quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as interest rates and yield curves that are observable for the asset and liability, either directly or indirectly; and
|
•
|
Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
May 31, 2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
31.3
|
|
|
$
|
—
|
|
|
$
|
31.3
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
4.5
|
|
|
$
|
—
|
|
|
$
|
4.5
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
Available-for-sale (“AFS”) debt securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.2
|
|
|
$
|
9.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
28.4
|
|
|
$
|
—
|
|
|
$
|
28.4
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
11.3
|
|
|
$
|
—
|
|
|
$
|
11.3
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
|
||||||||
February 28, 2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
13.2
|
|
|
$
|
—
|
|
|
$
|
13.2
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
AFS debt securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.5
|
|
|
$
|
9.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
70.4
|
|
|
$
|
—
|
|
|
$
|
70.4
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
11.6
|
|
|
$
|
—
|
|
|
$
|
11.6
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total Losses
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
For the Three Months Ended May 31, 2017
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136.0
|
|
|
$
|
86.8
|
|
|
Beer
|
|
Wine and Spirits
|
|
Consolidated
|
||||||
(in millions)
|
|
|
|
|
|
||||||
Balance, February 29, 2016
|
$
|
4,530.1
|
|
|
$
|
2,608.5
|
|
|
$
|
7,138.6
|
|
Purchase accounting allocations
(1)
|
510.8
|
|
|
373.7
|
|
|
884.5
|
|
|||
Canadian Divestiture
(2)
|
—
|
|
|
(126.1
|
)
|
|
(126.1
|
)
|
|||
Foreign currency translation adjustments
|
12.1
|
|
|
11.4
|
|
|
23.5
|
|
|||
Balance, February 28, 2017
|
5,053.0
|
|
|
2,867.5
|
|
|
7,920.5
|
|
|||
Purchase accounting allocations
(3)
|
7.8
|
|
|
(0.2
|
)
|
|
7.6
|
|
|||
Foreign currency translation adjustments
|
45.6
|
|
|
(1.4
|
)
|
|
44.2
|
|
|||
Balance, May 31, 2017
|
$
|
5,106.4
|
|
|
$
|
2,865.9
|
|
|
$
|
7,972.3
|
|
(1)
|
Preliminary purchase accounting allocations associated with the acquisitions of the Obregon Brewery (Beer), and High West and Charles Smith (Wine and Spirits), and purchase accounting allocations primarily associated with the acquisition of Prisoner (Wine and Spirits). See defined acquisition terms below.
|
(2)
|
Includes accumulated impairment losses of
C$289.1 million
, or
$216.8 million
.
|
(3)
|
Preliminary purchase accounting allocations associated primarily with the acquisition of the Obregon Brewery.
|
(in millions)
|
|
||
Cash received from buyer
|
$
|
580.2
|
|
Net assets sold
|
(175.3
|
)
|
|
AOCI reclassification adjustments, primarily foreign currency translation
|
(122.5
|
)
|
|
Direct costs to sell
|
(9.9
|
)
|
|
Other
|
(10.1
|
)
|
|
Gain on sale of business
|
$
|
262.4
|
|
|
May 31, 2017
|
|
February 28, 2017
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
$
|
89.1
|
|
|
$
|
47.3
|
|
|
$
|
89.1
|
|
|
$
|
48.6
|
|
Other
|
19.9
|
|
|
1.6
|
|
|
19.9
|
|
|
1.7
|
|
||||
Total
|
$
|
109.0
|
|
|
48.9
|
|
|
$
|
109.0
|
|
|
50.3
|
|
||
|
|
|
|
|
|
|
|
||||||||
Nonamortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
|
|
3,240.8
|
|
|
|
|
3,327.4
|
|
||||||
Total intangible assets
|
|
|
$
|
3,289.7
|
|
|
|
|
$
|
3,377.7
|
|
|
May 31, 2017
|
|
February 28,
2017 |
||||||||||||
|
Current
|
|
Long-term
|
|
Total
|
|
Total
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Notes payable to banks
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility – Revolving Credit Loans
|
$
|
505.0
|
|
|
$
|
—
|
|
|
$
|
505.0
|
|
|
$
|
231.0
|
|
Other
|
483.1
|
|
|
—
|
|
|
483.1
|
|
|
375.5
|
|
||||
|
$
|
988.1
|
|
|
$
|
—
|
|
|
$
|
988.1
|
|
|
$
|
606.5
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility – Term Loans
|
$
|
129.0
|
|
|
$
|
2,458.1
|
|
|
$
|
2,587.1
|
|
|
$
|
3,787.5
|
|
Senior Notes
|
—
|
|
|
5,401.2
|
|
|
5,401.2
|
|
|
4,617.0
|
|
||||
Other
|
17.2
|
|
|
217.9
|
|
|
235.1
|
|
|
227.1
|
|
||||
|
$
|
146.2
|
|
|
$
|
8,077.2
|
|
|
$
|
8,223.4
|
|
|
$
|
8,631.6
|
|
|
Revolving
Credit
Facility
|
|
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
|
$
|
505.0
|
|
|
$
|
237.4
|
|
|
$
|
1,299.4
|
|
|
$
|
662.4
|
|
|
$
|
387.9
|
|
Interest rate
|
2.5
|
%
|
|
2.7
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
|||||
LIBOR margin
|
1.5
|
%
|
|
1.75
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|||||
Outstanding letters of credit
|
$
|
17.5
|
|
|
|
|
|
|
|
|
|
||||||||
Remaining borrowing capacity
|
$
|
627.5
|
|
|
|
|
|
|
|
|
|
(1)
|
Outstanding term loan facility borrowings are net of unamortized debt issuance costs.
|
|
U.S.
Term A-1
Facility
|
|
European
Term A
Facility
|
|
European
Term A-1
Facility
|
|
European
Term A-2
Facility
|
|
Total
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
$
|
1.8
|
|
|
$
|
53.7
|
|
|
$
|
26.2
|
|
|
$
|
15.0
|
|
|
$
|
96.7
|
|
2019
|
2.4
|
|
|
71.5
|
|
|
35.0
|
|
|
20.0
|
|
|
128.9
|
|
|||||
2020
|
2.4
|
|
|
71.5
|
|
|
35.0
|
|
|
20.0
|
|
|
128.9
|
|
|||||
2021
|
2.4
|
|
|
1,108.3
|
|
|
35.0
|
|
|
20.0
|
|
|
1,165.7
|
|
|||||
2022
|
228.7
|
|
|
—
|
|
|
533.8
|
|
|
315.0
|
|
|
1,077.5
|
|
|||||
|
$
|
237.7
|
|
|
$
|
1,305.0
|
|
|
$
|
665.0
|
|
|
$
|
390.0
|
|
|
$
|
2,597.7
|
|
|
Date of
|
|
|
||||
|
Maturity
|
|
Interest
Payments
|
|
Principal
|
||
(in millions)
|
|
|
|
|
|
||
2.70% Senior Notes
(1) (2)
|
May 2022
|
|
May/Nov
|
|
$
|
500.0
|
|
3.50% Senior Notes
(1) (3)
|
May 2027
|
|
May/Nov
|
|
$
|
500.0
|
|
4.50% Senior Notes
(1) (4)
|
May 2047
|
|
May/Nov
|
|
$
|
500.0
|
|
(1)
|
Senior unsecured obligations which rank equally in right of payment to all of our existing and future senior unsecured indebtedness. Guaranteed by certain of our U.S. subsidiaries on a senior unsecured basis.
|
(2)
|
Redeemable, in whole or in part, at our option at any time prior to April 9, 2022, at a redemption price equal to
100%
of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the adjusted Treasury Rate plus
15
basis points. On or after April 9, 2022, redeemable, in whole or in part, at our option at any time at a redemption price equal to
100%
of the outstanding principal amount, plus accrued and unpaid interest.
|
(3)
|
Redeemable, in whole or in part, at our option at any time prior to February 9, 2027, at a redemption price equal to
100%
of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the adjusted Treasury Rate plus
20
basis points. On or after February 9, 2027, redeemable, in whole or in part, at our option at any time at a redemption price equal to
100%
of the outstanding principal amount, plus accrued and unpaid interest.
|
(4)
|
Redeemable, in whole or in part, at our option at any time prior to November 9, 2046, at a redemption price equal to
100%
of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the adjusted Treasury Rate plus
25
basis points. On or after November 9, 2046, redeemable, in whole or in part, at our option at any time at a redemption price equal to
100%
of the outstanding principal amount, plus accrued and unpaid interest.
|
|
Outstanding
Borrowings
|
|
Weighted
Average
Interest Rate
|
|
Remaining
Borrowing
Capacity
|
|||||
(in millions)
|
|
|
|
|
|
|||||
CBI Facility
|
$
|
198.2
|
|
|
1.9
|
%
|
|
$
|
101.8
|
|
Crown Facility
|
$
|
206.0
|
|
|
1.9
|
%
|
|
$
|
4.0
|
|
|
For the Three Months Ended
|
||||||||||||||
|
May 31, 2017
|
|
May 31, 2016
|
||||||||||||
|
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
|
$
|
358.6
|
|
|
$
|
44.2
|
|
|
$
|
284.2
|
|
|
$
|
34.1
|
|
Conversion of Class B common shares into Class A common shares
|
44.2
|
|
|
—
|
|
|
34.1
|
|
|
—
|
|
||||
Effect of stock-based awards on allocated net income
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||
Net income attributable to CBI allocated – diluted
|
$
|
402.8
|
|
|
$
|
43.2
|
|
|
$
|
318.3
|
|
|
$
|
33.4
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic
|
171.555
|
|
|
23.344
|
|
|
176.542
|
|
|
23.353
|
|
||||
Conversion of Class B common shares into Class A common shares
|
23.344
|
|
|
—
|
|
|
23.353
|
|
|
—
|
|
||||
Stock-based awards, primarily stock options
|
6.131
|
|
|
—
|
|
|
5.472
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
201.030
|
|
|
23.344
|
|
|
205.367
|
|
|
23.353
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI – basic
|
$
|
2.09
|
|
|
$
|
1.90
|
|
|
$
|
1.61
|
|
|
$
|
1.46
|
|
Net income per common share attributable to CBI – diluted
|
$
|
2.00
|
|
|
$
|
1.85
|
|
|
$
|
1.55
|
|
|
$
|
1.43
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Three Months Ended May 31, 2017
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
402.8
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net gains
|
$
|
148.7
|
|
|
$
|
(0.2
|
)
|
|
148.5
|
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
148.7
|
|
|
(0.2
|
)
|
|
148.5
|
|
|||
Unrealized gain on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative gains
|
51.9
|
|
|
(15.3
|
)
|
|
36.6
|
|
|||
Reclassification adjustments
|
3.8
|
|
|
(1.2
|
)
|
|
2.6
|
|
|||
Net gain recognized in other comprehensive income
|
55.7
|
|
|
(16.5
|
)
|
|
39.2
|
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive income
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reclassification adjustments
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Net gain recognized in other comprehensive income
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Other comprehensive income attributable to CBI
|
$
|
204.2
|
|
|
$
|
(16.7
|
)
|
|
187.5
|
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
590.3
|
|
||||
|
|
|
|
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Three Months Ended May 31, 2016
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
318.3
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(7.4
|
)
|
|
$
|
(1.8
|
)
|
|
(9.2
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(7.4
|
)
|
|
(1.8
|
)
|
|
(9.2
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(3.2
|
)
|
|
1.8
|
|
|
(1.4
|
)
|
|||
Reclassification adjustments
|
10.1
|
|
|
(3.4
|
)
|
|
6.7
|
|
|||
Net gain recognized in other comprehensive loss
|
6.9
|
|
|
(1.6
|
)
|
|
5.3
|
|
|||
Unrealized gain on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities gains
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive loss
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial losses
|
(0.6
|
)
|
|
0.2
|
|
|
(0.4
|
)
|
|||
Reclassification adjustments
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Net loss recognized in other comprehensive loss
|
(0.4
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(0.8
|
)
|
|
$
|
(3.2
|
)
|
|
(4.0
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
314.3
|
|
||||
|
|
|
|
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
Net
Unrealized
Gains (Losses)
on Derivative
Instruments
|
|
Net
Unrealized
Losses
on AFS Debt
Securities
|
|
Pension/
Postretirement
Adjustments
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, February 28, 2017
|
$
|
(358.0
|
)
|
|
$
|
(38.0
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
(399.8
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassification adjustments
|
148.5
|
|
|
36.6
|
|
|
(0.3
|
)
|
|
—
|
|
|
184.8
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
2.6
|
|
|
—
|
|
|
0.1
|
|
|
2.7
|
|
|||||
Other comprehensive income (loss)
|
148.5
|
|
|
39.2
|
|
|
(0.3
|
)
|
|
0.1
|
|
|
187.5
|
|
|||||
Balance, May 31, 2017
|
$
|
(209.5
|
)
|
|
$
|
1.2
|
|
|
$
|
(2.6
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(212.3
|
)
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at May 31, 2017
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
32.6
|
|
|
$
|
6.9
|
|
|
$
|
159.6
|
|
|
$
|
—
|
|
|
$
|
199.1
|
|
Accounts receivable
|
1.7
|
|
|
10.1
|
|
|
820.2
|
|
|
—
|
|
|
832.0
|
|
|||||
Inventories
|
170.8
|
|
|
1,578.4
|
|
|
371.2
|
|
|
(183.5
|
)
|
|
1,936.9
|
|
|||||
Intercompany receivable
|
22,818.1
|
|
|
29,965.6
|
|
|
13,180.2
|
|
|
(65,963.9
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
90.6
|
|
|
66.8
|
|
|
247.7
|
|
|
(12.6
|
)
|
|
392.5
|
|
|||||
Total current assets
|
23,113.8
|
|
|
31,627.8
|
|
|
14,778.9
|
|
|
(66,160.0
|
)
|
|
3,360.5
|
|
|||||
Property, plant and equipment
|
70.1
|
|
|
942.8
|
|
|
3,174.0
|
|
|
—
|
|
|
4,186.9
|
|
|||||
Investments in subsidiaries
|
14,483.5
|
|
|
126.2
|
|
|
—
|
|
|
(14,609.7
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,587.8
|
|
|
1,384.5
|
|
|
—
|
|
|
7,972.3
|
|
|||||
Intangible assets
|
—
|
|
|
866.9
|
|
|
2,422.8
|
|
|
—
|
|
|
3,289.7
|
|
|||||
Intercompany notes receivable
|
5,129.9
|
|
|
—
|
|
|
101.1
|
|
|
(5,231.0
|
)
|
|
—
|
|
|||||
Other assets
|
17.8
|
|
|
77.2
|
|
|
55.0
|
|
|
—
|
|
|
150.0
|
|
|||||
Total assets
|
$
|
42,815.1
|
|
|
$
|
40,228.7
|
|
|
$
|
21,916.3
|
|
|
$
|
(86,000.7
|
)
|
|
$
|
18,959.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable to banks
|
$
|
485.0
|
|
|
$
|
—
|
|
|
$
|
503.1
|
|
|
$
|
—
|
|
|
$
|
988.1
|
|
Current maturities of long-term debt
|
4.5
|
|
|
15.1
|
|
|
126.6
|
|
|
—
|
|
|
146.2
|
|
|||||
Accounts payable
|
35.7
|
|
|
157.7
|
|
|
365.4
|
|
|
—
|
|
|
558.8
|
|
|||||
Intercompany payable
|
29,013.0
|
|
|
23,973.0
|
|
|
12,977.9
|
|
|
(65,963.9
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
201.8
|
|
|
219.4
|
|
|
109.1
|
|
|
(41.0
|
)
|
|
489.3
|
|
|||||
Total current liabilities
|
29,740.0
|
|
|
24,365.2
|
|
|
14,082.1
|
|
|
(66,004.9
|
)
|
|
2,182.4
|
|
|||||
Long-term debt, less current maturities
|
5,638.1
|
|
|
19.3
|
|
|
2,419.8
|
|
|
—
|
|
|
8,077.2
|
|
|||||
Deferred income taxes
|
13.6
|
|
|
814.1
|
|
|
307.8
|
|
|
—
|
|
|
1,135.5
|
|
|||||
Intercompany notes payable
|
—
|
|
|
5,201.3
|
|
|
29.7
|
|
|
(5,231.0
|
)
|
|
—
|
|
|||||
Other liabilities
|
33.7
|
|
|
21.2
|
|
|
111.6
|
|
|
—
|
|
|
166.5
|
|
|||||
Total liabilities
|
35,425.4
|
|
|
30,421.1
|
|
|
16,951.0
|
|
|
(71,235.9
|
)
|
|
11,561.6
|
|
|||||
Total CBI stockholders’ equity
|
7,389.7
|
|
|
9,807.6
|
|
|
4,957.2
|
|
|
(14,764.8
|
)
|
|
7,389.7
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
8.1
|
|
|
—
|
|
|
8.1
|
|
|||||
Total stockholders’ equity
|
7,389.7
|
|
|
9,807.6
|
|
|
4,965.3
|
|
|
(14,764.8
|
)
|
|
7,397.8
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
42,815.1
|
|
|
$
|
40,228.7
|
|
|
$
|
21,916.3
|
|
|
$
|
(86,000.7
|
)
|
|
$
|
18,959.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at February 28, 2017
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
9.6
|
|
|
$
|
5.8
|
|
|
$
|
162.0
|
|
|
$
|
—
|
|
|
$
|
177.4
|
|
Accounts receivable
|
2.4
|
|
|
18.5
|
|
|
716.1
|
|
|
—
|
|
|
737.0
|
|
|||||
Inventories
|
162.3
|
|
|
1,628.5
|
|
|
330.9
|
|
|
(166.6
|
)
|
|
1,955.1
|
|
|||||
Intercompany receivable
|
21,927.8
|
|
|
28,384.7
|
|
|
12,410.6
|
|
|
(62,723.1
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
40.4
|
|
|
74.8
|
|
|
169.0
|
|
|
76.3
|
|
|
360.5
|
|
|||||
Total current assets
|
22,142.5
|
|
|
30,112.3
|
|
|
13,788.6
|
|
|
(62,813.4
|
)
|
|
3,230.0
|
|
|||||
Property, plant and equipment
|
69.5
|
|
|
951.1
|
|
|
2,912.2
|
|
|
—
|
|
|
3,932.8
|
|
|||||
Investments in subsidiaries
|
13,884.2
|
|
|
125.0
|
|
|
—
|
|
|
(14,009.2
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,589.9
|
|
|
1,330.6
|
|
|
—
|
|
|
7,920.5
|
|
|||||
Intangible assets
|
—
|
|
|
955.1
|
|
|
2,422.6
|
|
|
—
|
|
|
3,377.7
|
|
|||||
Intercompany notes receivable
|
5,074.5
|
|
|
188.3
|
|
|
100.6
|
|
|
(5,363.4
|
)
|
|
—
|
|
|||||
Other assets
|
17.9
|
|
|
77.2
|
|
|
46.3
|
|
|
—
|
|
|
141.4
|
|
|||||
Total assets
|
$
|
41,188.6
|
|
|
$
|
38,998.9
|
|
|
$
|
20,600.9
|
|
|
$
|
(82,186.0
|
)
|
|
$
|
18,602.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable to banks
|
$
|
231.0
|
|
|
$
|
—
|
|
|
$
|
375.5
|
|
|
$
|
—
|
|
|
$
|
606.5
|
|
Current maturities of long-term debt
|
767.9
|
|
|
16.3
|
|
|
126.7
|
|
|
—
|
|
|
910.9
|
|
|||||
Accounts payable
|
47.6
|
|
|
146.2
|
|
|
366.0
|
|
|
—
|
|
|
559.8
|
|
|||||
Intercompany payable
|
27,675.4
|
|
|
22,786.3
|
|
|
12,261.4
|
|
|
(62,723.1
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
270.2
|
|
|
164.8
|
|
|
153.8
|
|
|
31.6
|
|
|
620.4
|
|
|||||
Total current liabilities
|
28,992.1
|
|
|
23,113.6
|
|
|
13,283.4
|
|
|
(62,691.5
|
)
|
|
2,697.6
|
|
|||||
Long-term debt, less current maturities
|
5,260.2
|
|
|
23.0
|
|
|
2,437.5
|
|
|
—
|
|
|
7,720.7
|
|
|||||
Deferred income taxes
|
13.3
|
|
|
823.2
|
|
|
297.1
|
|
|
—
|
|
|
1,133.6
|
|
|||||
Intercompany notes payable
|
—
|
|
|
5,334.0
|
|
|
29.4
|
|
|
(5,363.4
|
)
|
|
—
|
|
|||||
Other liabilities
|
31.8
|
|
|
18.9
|
|
|
115.0
|
|
|
—
|
|
|
165.7
|
|
|||||
Total liabilities
|
34,297.4
|
|
|
29,312.7
|
|
|
16,162.4
|
|
|
(68,054.9
|
)
|
|
11,717.6
|
|
|||||
Total CBI stockholders’ equity
|
6,891.2
|
|
|
9,686.2
|
|
|
4,444.9
|
|
|
(14,131.1
|
)
|
|
6,891.2
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
|
—
|
|
|
(6.4
|
)
|
|||||
Total stockholders’ equity
|
6,891.2
|
|
|
9,686.2
|
|
|
4,438.5
|
|
|
(14,131.1
|
)
|
|
6,884.8
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
41,188.6
|
|
|
$
|
38,998.9
|
|
|
$
|
20,600.9
|
|
|
$
|
(82,186.0
|
)
|
|
$
|
18,602.4
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended May 31, 2017
|
|||||||||||||||||||
Sales
|
$
|
698.8
|
|
|
$
|
1,794.2
|
|
|
$
|
868.5
|
|
|
$
|
(1,246.2
|
)
|
|
$
|
2,115.3
|
|
Less – excise taxes
|
(83.7
|
)
|
|
(93.4
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
(179.8
|
)
|
|||||
Net sales
|
615.1
|
|
|
1,700.8
|
|
|
865.8
|
|
|
(1,246.2
|
)
|
|
1,935.5
|
|
|||||
Cost of product sold
|
(477.2
|
)
|
|
(1,232.0
|
)
|
|
(452.9
|
)
|
|
1,221.9
|
|
|
(940.2
|
)
|
|||||
Gross profit
|
137.9
|
|
|
468.8
|
|
|
412.9
|
|
|
(24.3
|
)
|
|
995.3
|
|
|||||
Selling, general and administrative expenses
|
(104.9
|
)
|
|
(303.3
|
)
|
|
(27.9
|
)
|
|
8.9
|
|
|
(427.2
|
)
|
|||||
Operating income
|
33.0
|
|
|
165.5
|
|
|
385.0
|
|
|
(15.4
|
)
|
|
568.1
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
433.5
|
|
|
1.1
|
|
|
0.5
|
|
|
(434.7
|
)
|
|
0.4
|
|
|||||
Interest income
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Intercompany interest income
|
57.9
|
|
|
93.3
|
|
|
0.8
|
|
|
(152.0
|
)
|
|
—
|
|
|||||
Interest expense
|
(65.2
|
)
|
|
(0.3
|
)
|
|
(17.0
|
)
|
|
—
|
|
|
(82.5
|
)
|
|||||
Intercompany interest expense
|
(93.3
|
)
|
|
(58.1
|
)
|
|
(0.6
|
)
|
|
152.0
|
|
|
—
|
|
|||||
Loss on write-off of debt issuance costs
|
(6.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|||||
Income before income taxes
|
359.2
|
|
|
201.5
|
|
|
368.8
|
|
|
(450.1
|
)
|
|
479.4
|
|
|||||
(Provision for) benefit from income taxes
|
43.6
|
|
|
(65.5
|
)
|
|
(36.0
|
)
|
|
(16.2
|
)
|
|
(74.1
|
)
|
|||||
Net income
|
402.8
|
|
|
136.0
|
|
|
332.8
|
|
|
(466.3
|
)
|
|
405.3
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
|||||
Net income attributable to CBI
|
$
|
402.8
|
|
|
$
|
136.0
|
|
|
$
|
330.3
|
|
|
$
|
(466.3
|
)
|
|
$
|
402.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
590.3
|
|
|
$
|
135.3
|
|
|
$
|
520.2
|
|
|
$
|
(655.5
|
)
|
|
$
|
590.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended May 31, 2016
|
|||||||||||||||||||
Sales
|
$
|
623.7
|
|
|
$
|
1,686.8
|
|
|
$
|
966.1
|
|
|
$
|
(1,223.6
|
)
|
|
$
|
2,053.0
|
|
Less – excise taxes
|
(78.0
|
)
|
|
(86.9
|
)
|
|
(16.3
|
)
|
|
—
|
|
|
(181.2
|
)
|
|||||
Net sales
|
545.7
|
|
|
1,599.9
|
|
|
949.8
|
|
|
(1,223.6
|
)
|
|
1,871.8
|
|
|||||
Cost of product sold
|
(451.4
|
)
|
|
(1,151.5
|
)
|
|
(564.8
|
)
|
|
1,177.2
|
|
|
(990.5
|
)
|
|||||
Gross profit
|
94.3
|
|
|
448.4
|
|
|
385.0
|
|
|
(46.4
|
)
|
|
881.3
|
|
|||||
Selling, general and administrative expenses
|
(91.3
|
)
|
|
(193.1
|
)
|
|
(55.2
|
)
|
|
11.0
|
|
|
(328.6
|
)
|
|||||
Operating income
|
3.0
|
|
|
255.3
|
|
|
329.8
|
|
|
(35.4
|
)
|
|
552.7
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
368.9
|
|
|
2.3
|
|
|
—
|
|
|
(370.5
|
)
|
|
0.7
|
|
|||||
Interest income
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.4
|
|
|||||
Intercompany interest income
|
57.4
|
|
|
73.3
|
|
|
—
|
|
|
(130.7
|
)
|
|
—
|
|
|||||
Interest expense
|
(74.3
|
)
|
|
(0.4
|
)
|
|
(10.3
|
)
|
|
—
|
|
|
(85.0
|
)
|
|||||
Intercompany interest expense
|
(73.1
|
)
|
|
(57.4
|
)
|
|
(0.2
|
)
|
|
130.7
|
|
|
—
|
|
|||||
Income before income taxes
|
282.0
|
|
|
273.1
|
|
|
319.6
|
|
|
(405.9
|
)
|
|
468.8
|
|
|||||
(Provision for) benefit from income taxes
|
36.3
|
|
|
(105.9
|
)
|
|
(91.5
|
)
|
|
11.4
|
|
|
(149.7
|
)
|
|||||
Net income
|
318.3
|
|
|
167.2
|
|
|
228.1
|
|
|
(394.5
|
)
|
|
319.1
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|||||
Net income attributable to CBI
|
$
|
318.3
|
|
|
$
|
167.2
|
|
|
$
|
227.3
|
|
|
$
|
(394.5
|
)
|
|
$
|
318.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
314.3
|
|
|
$
|
168.7
|
|
|
$
|
221.5
|
|
|
$
|
(390.2
|
)
|
|
$
|
314.3
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended May 31, 2017
|
|||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(161.0
|
)
|
|
$
|
451.6
|
|
|
$
|
91.0
|
|
|
$
|
—
|
|
|
$
|
381.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(4.8
|
)
|
|
(25.6
|
)
|
|
(186.7
|
)
|
|
—
|
|
|
(217.1
|
)
|
|||||
Payments related to sale of business
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
(5.0
|
)
|
|||||
Net proceeds from intercompany notes
|
419.3
|
|
|
0.9
|
|
|
—
|
|
|
(420.2
|
)
|
|
—
|
|
|||||
Net investments in equity affiliates
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|||||
Net cash provided by (used in) investing activities
|
408.7
|
|
|
(24.7
|
)
|
|
(190.9
|
)
|
|
(414.4
|
)
|
|
(221.3
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid to parent company
|
—
|
|
|
—
|
|
|
(8.0
|
)
|
|
8.0
|
|
|
—
|
|
|||||
Net contributions from equity affiliates
|
—
|
|
|
13.6
|
|
|
0.2
|
|
|
(13.8
|
)
|
|
—
|
|
|||||
Net repayments of intercompany notes
|
(1.7
|
)
|
|
(413.1
|
)
|
|
(5.4
|
)
|
|
420.2
|
|
|
—
|
|
|||||
Principal payments of long-term debt
|
(1,876.8
|
)
|
|
(4.9
|
)
|
|
(31.7
|
)
|
|
—
|
|
|
(1,913.4
|
)
|
|||||
Dividends paid
|
(100.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.5
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(21.4
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(22.3
|
)
|
|||||
Payments of debt issuance costs
|
(11.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.8
|
)
|
|||||
Proceeds from issuance of long-term debt
|
1,495.5
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
1,508.5
|
|
|||||
Net proceeds from notes payable
|
254.0
|
|
|
—
|
|
|
127.3
|
|
|
—
|
|
|
381.3
|
|
|||||
Proceeds from shares issued under equity compensation plans
|
16.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.6
|
|
|||||
Net cash provided by (used in) financing activities
|
(224.7
|
)
|
|
(425.8
|
)
|
|
94.5
|
|
|
414.4
|
|
|
(141.6
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
23.0
|
|
|
1.1
|
|
|
(2.4
|
)
|
|
—
|
|
|
21.7
|
|
|||||
Cash and cash equivalents, beginning of period
|
9.6
|
|
|
5.8
|
|
|
162.0
|
|
|
—
|
|
|
177.4
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
32.6
|
|
|
$
|
6.9
|
|
|
$
|
159.6
|
|
|
$
|
—
|
|
|
$
|
199.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Three Months Ended May 31, 2016
|
|||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(221.8
|
)
|
|
$
|
1.0
|
|
|
$
|
566.7
|
|
|
$
|
—
|
|
|
$
|
345.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(4.1
|
)
|
|
(27.5
|
)
|
|
(137.8
|
)
|
|
—
|
|
|
(169.4
|
)
|
|||||
Purchase of business
|
—
|
|
|
(284.9
|
)
|
|
—
|
|
|
—
|
|
|
(284.9
|
)
|
|||||
Net repayments of intercompany notes
|
(377.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
377.3
|
|
|
—
|
|
|||||
Net returns of capital from equity affiliates
|
354.8
|
|
|
—
|
|
|
—
|
|
|
(354.8
|
)
|
|
—
|
|
|||||
Other investing activities
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.4
|
|
|||||
Net cash used in investing activities
|
(26.4
|
)
|
|
(312.5
|
)
|
|
(137.5
|
)
|
|
22.5
|
|
|
(453.9
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid to parent company
|
—
|
|
|
—
|
|
|
(357.0
|
)
|
|
357.0
|
|
|
—
|
|
|||||
Net contributions from equity affiliates
|
—
|
|
|
0.1
|
|
|
2.1
|
|
|
(2.2
|
)
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
275.5
|
|
|
362.6
|
|
|
(260.8
|
)
|
|
(377.3
|
)
|
|
—
|
|
|||||
Principal payments of long-term debt
|
(16.5
|
)
|
|
(6.0
|
)
|
|
(71.7
|
)
|
|
—
|
|
|
(94.2
|
)
|
|||||
Dividends paid
|
(79.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79.3
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(42.5
|
)
|
|
(3.0
|
)
|
|
—
|
|
|
(45.5
|
)
|
|||||
Payments of debt issuance costs
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
|||||
Proceeds from issuance of long-term debt
|
—
|
|
|
—
|
|
|
709.5
|
|
|
—
|
|
|
709.5
|
|
|||||
Net repayments of notes payable
|
—
|
|
|
—
|
|
|
(379.1
|
)
|
|
—
|
|
|
(379.1
|
)
|
|||||
Proceeds from shares issued under equity compensation plans
|
15.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.9
|
|
|||||
Excess tax benefits from stock-based payment awards
|
68.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68.8
|
|
|||||
Purchases of treasury stock
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|||||
Net cash provided by (used in) financing activities
|
263.4
|
|
|
314.2
|
|
|
(363.2
|
)
|
|
(22.5
|
)
|
|
191.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
and cash equivalents
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash equivalents
|
15.2
|
|
|
2.7
|
|
|
66.3
|
|
|
—
|
|
|
84.2
|
|
|||||
Cash and cash equivalents, beginning of period
|
6.0
|
|
|
4.2
|
|
|
72.9
|
|
|
—
|
|
|
83.1
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
21.2
|
|
|
$
|
6.9
|
|
|
$
|
139.2
|
|
|
$
|
—
|
|
|
$
|
167.3
|
|
|
For the Three Months Ended May 31,
|
||||||
|
2017
|
|
2016
|
||||
(in millions)
|
|
|
|
||||
Cost of product sold
|
|
|
|
||||
Flow through of inventory step-up
|
$
|
(7.0
|
)
|
|
$
|
(8.1
|
)
|
Net gain (loss) on undesignated commodity derivative contracts
|
(3.1
|
)
|
|
13.1
|
|
||
Settlements of undesignated commodity derivative contracts
|
2.4
|
|
|
8.3
|
|
||
Amortization of favorable interim supply agreement
|
—
|
|
|
(2.2
|
)
|
||
Total cost of product sold
|
(7.7
|
)
|
|
11.1
|
|
||
|
|
|
|
||||
Selling, general and administrative expenses
|
|
|
|
||||
Impairment of intangible assets
|
(86.8
|
)
|
|
—
|
|
||
Costs associated with the Canadian Divestiture and related activities
|
(3.2
|
)
|
|
(3.7
|
)
|
||
Transaction, integration and other acquisition-related costs
|
(1.6
|
)
|
|
(2.3
|
)
|
||
Other losses
|
(1.4
|
)
|
|
(1.1
|
)
|
||
Total selling, general and administrative expenses
|
(93.0
|
)
|
|
(7.1
|
)
|
||
Comparable Adjustments, Operating income (loss)
|
$
|
(100.7
|
)
|
|
$
|
4.0
|
|
|
For the Three Months Ended May 31,
|
||||||
|
2017
|
|
2016
|
||||
(in millions)
|
|
|
|
||||
Beer
|
|
|
|
||||
Net sales
|
$
|
1,242.3
|
|
|
$
|
1,151.0
|
|
Segment operating income
|
$
|
500.6
|
|
|
$
|
409.3
|
|
Long-lived tangible assets
|
$
|
3,081.1
|
|
|
$
|
2,362.3
|
|
Total assets
|
$
|
11,679.1
|
|
|
$
|
10,276.3
|
|
Capital expenditures
|
$
|
191.2
|
|
|
$
|
145.0
|
|
Depreciation and amortization
|
$
|
39.8
|
|
|
$
|
25.9
|
|
|
|
|
|
|
For the Three Months Ended May 31,
|
||||||
|
2017
|
|
2016
|
||||
(in millions)
|
|
|
|
||||
Wine and Spirits
|
|
|
|
||||
Net sales:
|
|
|
|
||||
Wine
|
$
|
605.0
|
|
|
$
|
643.1
|
|
Spirits
|
88.2
|
|
|
77.7
|
|
||
Net sales
|
$
|
693.2
|
|
|
$
|
720.8
|
|
Segment operating income
|
$
|
205.6
|
|
|
$
|
168.0
|
|
Equity in earnings of equity method investees
|
$
|
0.2
|
|
|
$
|
0.8
|
|
Long-lived tangible assets
|
$
|
982.2
|
|
|
$
|
1,035.3
|
|
Investments in equity method investees
|
$
|
77.3
|
|
|
$
|
76.5
|
|
Total assets
|
$
|
6,888.3
|
|
|
$
|
6,984.8
|
|
Capital expenditures
|
$
|
21.6
|
|
|
$
|
12.5
|
|
Depreciation and amortization
|
$
|
22.6
|
|
|
$
|
24.9
|
|
|
|
|
|
||||
Corporate Operations and Other
|
|
|
|
||||
Segment operating loss
|
$
|
(37.4
|
)
|
|
$
|
(28.6
|
)
|
Equity in earnings (losses) of equity method investees
|
$
|
0.2
|
|
|
$
|
(0.1
|
)
|
Long-lived tangible assets
|
$
|
123.6
|
|
|
$
|
109.6
|
|
Investments in equity method investees
|
$
|
21.3
|
|
|
$
|
5.9
|
|
Total assets
|
$
|
392.0
|
|
|
$
|
368.9
|
|
Capital expenditures
|
$
|
4.3
|
|
|
$
|
11.9
|
|
Depreciation and amortization
|
$
|
9.1
|
|
|
$
|
7.0
|
|
|
|
|
|
||||
Comparable Adjustments
|
|
|
|
||||
Operating income (loss)
|
$
|
(100.7
|
)
|
|
$
|
4.0
|
|
Depreciation and amortization
|
$
|
—
|
|
|
$
|
2.2
|
|
|
|
|
|
||||
Consolidated
|
|
|
|
||||
Net sales
|
$
|
1,935.5
|
|
|
$
|
1,871.8
|
|
Operating income
|
$
|
568.1
|
|
|
$
|
552.7
|
|
Equity in earnings of equity method investees
|
$
|
0.4
|
|
|
$
|
0.7
|
|
Long-lived tangible assets
|
$
|
4,186.9
|
|
|
$
|
3,507.2
|
|
Investments in equity method investees
|
$
|
98.6
|
|
|
$
|
82.4
|
|
Total assets
|
$
|
18,959.4
|
|
|
$
|
17,630.0
|
|
Capital expenditures
|
$
|
217.1
|
|
|
$
|
169.4
|
|
Depreciation and amortization
|
$
|
71.5
|
|
|
$
|
60.0
|
|
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 and a discussion of acquisitions and divestitures.
|
•
|
Results of operations.
This section provides an analysis of our results of operations presented on a business segment basis. In addition, a brief description of transactions and other items that affect the comparability of the results is provided.
|
•
|
Financial liquidity and capital resources.
This section provides an analysis of our cash flows and a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments, as well as a discussion of other financing arrangements.
|
•
|
leveraging our leading position in total beverage alcohol and our scale with wholesalers and retailers to expand distribution of our product portfolio and cross promotional opportunities;
|
•
|
strengthening relationships with wholesalers and retailers by providing consumer and beverage alcohol insights;
|
•
|
investing in brand building activities;
|
•
|
positioning ourselves for success with consumer-led innovation capabilities;
|
•
|
realizing operating efficiencies through expanding and enhancing production capabilities and maximizing asset utilization; and
|
•
|
developing employees to enhance performance in the marketplace.
|
|
First
Quarter 2017 |
||
(in millions)
|
|
||
Net sales
|
$
|
89.6
|
|
Gross profit
|
$
|
35.5
|
|
Depreciation and amortization
|
$
|
2.8
|
|
Operating income
|
$
|
9.5
|
|
Income before income taxes
|
$
|
9.3
|
|
|
|
||
Cash flow from operating activities
|
$
|
12.3
|
|
•
|
Our results of operations benefited from improvements in both the Beer and Wine and Spirits segments.
|
•
|
Net sales
increased
3%
primarily due to an increase in Beer’s net sales driven predominantly by volume growth within our Mexican beer portfolio, partially offset by a decrease in Wine and Spirits’ net sales due largely to the Canadian Divestiture.
|
•
|
Operating income
increased
3%
largely
due to benefits from lower cost of product sold and the net sales volume growth for the Mexican beer portfolio, and benefits from the acquired brands and a favorable product mix shift within the Wine and Spirits segment, partially offset by an unfavorable change in Comparable Adjustments.
|
•
|
Net income attributable to CBI and diluted net income per common share attributable to CBI
increased
27%
and
29%
, 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 the third quarter of fiscal 2017 and our March 1, 2017 adoption of the FASB’s amended share-based compensation guidance.
|
|
First
Quarter 2018 |
|
First
Quarter 2017 |
||||
(in millions)
|
|
|
|
||||
Cost of product sold
|
|
|
|
||||
Flow through of inventory step-up
|
$
|
(7.0
|
)
|
|
$
|
(8.1
|
)
|
Net gain (loss) on undesignated commodity derivative contracts
|
(3.1
|
)
|
|
13.1
|
|
||
Settlements of undesignated commodity derivative contracts
|
2.4
|
|
|
8.3
|
|
||
Amortization of favorable interim supply agreement
|
—
|
|
|
(2.2
|
)
|
||
Total cost of product sold
|
(7.7
|
)
|
|
11.1
|
|
||
|
|
|
|
||||
|
|
|
|
|
First
Quarter 2018 |
|
First
Quarter 2017 |
||||
(in millions)
|
|
|
|
||||
Selling, general and administrative expenses
|
|
|
|
||||
Impairment of intangible assets
|
(86.8
|
)
|
|
—
|
|
||
Costs associated with the Canadian Divestiture and related activities
|
(3.2
|
)
|
|
(3.7
|
)
|
||
Transaction, integration and other acquisition-related costs
|
(1.6
|
)
|
|
(2.3
|
)
|
||
Other losses
|
(1.4
|
)
|
|
(1.1
|
)
|
||
Total selling, general and administrative expenses
|
(93.0
|
)
|
|
(7.1
|
)
|
||
|
|
|
|
||||
Loss on write-off of debt issuance costs
|
(6.7
|
)
|
|
—
|
|
||
Comparable Adjustments
|
$
|
(107.4
|
)
|
|
$
|
4.0
|
|
|
First
Quarter 2018 |
|
First
Quarter 2017 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
1,242.3
|
|
|
$
|
1,151.0
|
|
|
$
|
91.3
|
|
|
8
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|
|
|||||||
Wine
|
605.0
|
|
|
643.1
|
|
|
(38.1
|
)
|
|
(6
|
%)
|
|||
Spirits
|
88.2
|
|
|
77.7
|
|
|
10.5
|
|
|
14
|
%
|
|||
Total Wine and Spirits
|
693.2
|
|
|
720.8
|
|
|
(27.6
|
)
|
|
(4
|
%)
|
|||
Consolidated net sales
|
$
|
1,935.5
|
|
|
$
|
1,871.8
|
|
|
$
|
63.7
|
|
|
3
|
%
|
Beer Segment
|
First
Quarter 2018 |
|
First
Quarter 2017 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 24-pack, 12-ounce case equivalents)
|
||||||||||||||
Net sales
|
$
|
1,242.3
|
|
|
$
|
1,151.0
|
|
|
$
|
91.3
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
(1)
|
71.7
|
|
|
67.0
|
|
|
|
|
|
7.0
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(1) (2)
|
|
|
|
|
|
|
11.6
|
%
|
(1)
|
Previously reported Beer shipment and depletion volumes were restated in the fourth quarter of fiscal 2017 for an immaterial error associated with the conversion of 7-ounce Coronita case equivalents to 12-ounce case equivalents.
|
(2)
|
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.
|
Wine and Spirits Segment
|
First
Quarter 2018 |
|
First
Quarter 2017 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 9-liter case equivalents)
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
693.2
|
|
|
$
|
720.8
|
|
|
$
|
(27.6
|
)
|
|
(4
|
%)
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
|
|
|
|
|
|
|
|
|||||||
Total
|
13.9
|
|
|
16.4
|
|
|
|
|
(15.2
|
%)
|
||||
Organic
|
13.7
|
|
|
13.6
|
|
|
|
|
0.7
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||
U.S. Domestic
|
12.9
|
|
|
12.4
|
|
|
|
|
4.0
|
%
|
||||
Organic U.S. Domestic
|
12.8
|
|
|
12.4
|
|
|
|
|
3.2
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||
U.S. Domestic Focus Brands
|
7.8
|
|
|
7.1
|
|
|
|
|
9.9
|
%
|
||||
Organic U.S. Domestic Focus Brands
|
7.7
|
|
|
7.1
|
|
|
|
|
8.5
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(2)
|
|
|
|
|
|
|
|
|||||||
U.S. Domestic
|
|
|
|
|
|
|
(1.1
|
%)
|
||||||
U.S. Domestic Focus Brands
|
|
|
|
|
|
|
3.6
|
%
|
|
First
Quarter 2018 |
|
First
Quarter 2017 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
683.6
|
|
|
$
|
572.2
|
|
|
$
|
111.4
|
|
|
19
|
%
|
Wine and Spirits
|
319.4
|
|
|
298.0
|
|
|
21.4
|
|
|
7
|
%
|
|||
Comparable Adjustments
|
(7.7
|
)
|
|
11.1
|
|
|
(18.8
|
)
|
|
NM
|
|
|||
Consolidated gross profit
|
$
|
995.3
|
|
|
$
|
881.3
|
|
|
$
|
114.0
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|||||||
NM = Not meaningful
|
|
|
|
|
|
|
|
|
First
Quarter 2018 |
|
First
Quarter 2017 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
183.0
|
|
|
$
|
162.9
|
|
|
$
|
20.1
|
|
|
12
|
%
|
Wine and Spirits
|
113.8
|
|
|
130.0
|
|
|
(16.2
|
)
|
|
(12
|
%)
|
|||
Corporate Operations and Other
|
37.4
|
|
|
28.6
|
|
|
8.8
|
|
|
31
|
%
|
|||
Comparable Adjustments
|
93.0
|
|
|
7.1
|
|
|
85.9
|
|
|
NM
|
|
|||
Consolidated selling, general and administrative expenses
|
$
|
427.2
|
|
|
$
|
328.6
|
|
|
$
|
98.6
|
|
|
30
|
%
|
|
First
Quarter 2018 |
|
First
Quarter 2017 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
500.6
|
|
|
$
|
409.3
|
|
|
$
|
91.3
|
|
|
22
|
%
|
Wine and Spirits
|
205.6
|
|
|
168.0
|
|
|
37.6
|
|
|
22
|
%
|
|||
Corporate Operations and Other
|
(37.4
|
)
|
|
(28.6
|
)
|
|
(8.8
|
)
|
|
(31
|
%)
|
|||
Comparable Adjustments
|
(100.7
|
)
|
|
4.0
|
|
|
(104.7
|
)
|
|
NM
|
|
|||
Consolidated operating income
|
$
|
568.1
|
|
|
$
|
552.7
|
|
|
$
|
15.4
|
|
|
3
|
%
|
|
First
Quarter 2018 |
|
First
Quarter 2017 |
||||
(in millions)
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
381.6
|
|
|
$
|
345.9
|
|
Net cash used in investing activities
|
(221.3
|
)
|
|
(453.9
|
)
|
||
Net cash provided by (used in) financing activities
|
(141.6
|
)
|
|
191.9
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3.0
|
|
|
0.3
|
|
||
Net increase in cash and cash equivalents
|
$
|
21.7
|
|
|
$
|
84.2
|
|
•
|
First Quarter 2018
principal payments of long-term debt driven largely by the repayment of term loan borrowings under our senior credit facility of $1,176.2 million and the January 2008 Senior Notes of $700.0 million; and
|
•
|
First Quarter 2018
decrease in excess tax benefits from stock-based payment awards of
$68.8 million
in connection with our March 1, 2017, adoption of the FASB’s amended guidance for, among other items, the accounting for income taxes related to share-based compensation and the related classification in the statement of cash flows. Refer to Note 2 of the Financial Statements for additional information;
|
•
|
First Quarter 2018
proceeds from issuance of long-term debt of $1,500.0 million (used to repay the January 2008 Senior Notes, and a portion of our outstanding term loan borrowings under our senior credit facility; compared with
|
•
|
First Quarter 2017
proceeds from issuance of long-term debt of $700.0 million from term loan borrowings under our senior credit facility (used to refinance borrowings under our prior senior credit facility and accounts receivable securitization facilities, and for other general corporate purposes); and
|
•
|
First Quarter 2018
net proceeds from notes payable of
$381.3 million
compared with
First Quarter 2017
net repayments of notes payable of
$379.1 million
.
|
|
Remaining Borrowing Capacity
|
||||||
|
May 31,
2017 |
|
June 23,
2017 |
||||
(in millions)
|
|
|
|
||||
Revolving Credit Facility
|
$
|
627.5
|
|
|
$
|
607.5
|
|
CBI Facility
|
$
|
101.8
|
|
|
$
|
39.0
|
|
Crown Facility
|
$
|
4.0
|
|
|
$
|
54.0
|
|
|
|
|
Class A Common Shares
|
||||||
|
Repurchase Authorization
|
|
Dollar Value of Shares Repurchased
|
|
Number of Shares Repurchased
|
||||
(in millions, except share data)
|
|
|
|
|
|
||||
2017 Authorization
|
$
|
1,000.0
|
|
|
$
|
453.1
|
|
|
3,006,547
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
Aggregate
Notional Value
|
|
Fair Value,
Net Asset (Liability)
|
|
Increase (Decrease)
in Fair Value –
Hypothetical
10% Adverse Change
|
||||||||||||||||||
|
May 31,
2017 |
|
May 31,
2016 |
|
May 31,
2017 |
|
May 31,
2016 |
|
May 31,
2017 |
|
May 31,
2016 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
$
|
1,287.2
|
|
|
$
|
3,193.5
|
|
|
$
|
2.9
|
|
|
$
|
(54.8
|
)
|
|
$
|
(72.4
|
)
|
|
$
|
19.5
|
|
Commodity derivative contracts
|
$
|
165.8
|
|
|
$
|
186.9
|
|
|
$
|
(6.8
|
)
|
|
$
|
(23.7
|
)
|
|
$
|
14.0
|
|
|
$
|
14.5
|
|
|
Aggregate
Notional Value
|
|
Fair Value,
Net Asset (Liability)
|
|
Increase (Decrease)
in Fair Value –
Hypothetical
1% Rate Increase
|
||||||||||||||||||
|
May 31,
2017 |
|
May 31,
2016 |
|
May 31,
2017 |
|
May 31,
2016 |
|
May 31,
2017 |
|
May 31,
2016 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed interest rate debt
|
$
|
5,488.6
|
|
|
$
|
4,790.0
|
|
|
$
|
(5,760.4
|
)
|
|
$
|
(5,001.2
|
)
|
|
$
|
(360.9
|
)
|
|
$
|
(203.7
|
)
|
Variable interest rate debt
|
$
|
3,782.3
|
|
|
$
|
3,570.3
|
|
|
$
|
(3,764.4
|
)
|
|
$
|
(3,183.4
|
)
|
|
$
|
(93.4
|
)
|
|
$
|
(114.4
|
)
|
Interest rate swap contracts
|
$
|
250.0
|
|
|
$
|
1,700.0
|
|
|
$
|
3.7
|
|
|
$
|
(5.5
|
)
|
|
$
|
6.9
|
|
|
$
|
(7.6
|
)
|
Item 4.
|
Controls and Procedures.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 6.
|
Exhibits.
|
|
|
CONSTELLATION BRANDS, INC.
|
|
|
|
|
|
Date:
|
June 29, 2017
|
By:
|
/s/ Lisa M. Schnorr
|
|
|
|
Lisa M. Schnorr, Senior Vice President
and Controller
|
|
|
|
|
Date:
|
June 29, 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 as Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2016 and incorporated herein by reference).
|
|
|
|
4.1
|
|
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). #
|
|
|
|
4.2
|
|
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). #
|
|
|
|
4.3
|
|
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).
|
|
|
|
4.4
|
|
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).
|
|
|
|
4.5
|
|
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).
|
|
|
|
4.6
|
|
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).
|
|
|
|
4.7
|
|
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).
|
|
|
|
4.8
|
|
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).
|
|
|
|
4.9
|
|
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).
|
|
|
|
4.10
|
|
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).
|
|
|
|
4.11
|
|
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).
|
|
|
|
4.12
|
|
Supplemental Indenture No. 12 with respect to 2.700% Senior Notes due 2022, dated as of May 9, 2017, 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 9, 2017, filed May 9, 2017 and incorporated herein by reference).
|
|
|
|
4.13
|
|
Supplemental Indenture No. 13 with respect to 3.500% Senior Notes due 2027, dated as of May 9, 2017, 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 9, 2017, filed May 9, 2017 and incorporated herein by reference).
|
|
|
|
4.14
|
|
Supplemental Indenture No. 14 with respect to 4.500% Senior Notes due 2047, dated as of May 9, 2017, among the Company, as Issuer, certain subsidiaries, as Guarantors, and Manufacturers and Traders Trust Company, as Trustee (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K dated May 9, 2017, filed May 9, 2017 and incorporated herein by reference).
|
|
|
|
4.15
|
|
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
|
|
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).
|
|
|
|
10.3
|
|
Form of Executive Employment Agreement between Constellation Brands, Inc. and certain of its Other Executive Officers (including Christopher Stenzel) (filed herewith). *
|
|
|
|
10.4
|
|
Executive Employment Agreement dated February 27, 2017 and effective March 1, 2017, among Crown Imports LLC, Constellation Brands, Inc. and William F. Hackett (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 25, 2017, filed February 28, 2017 and incorporated herein by reference). *
|
|
|
|
10.5
|
|
Form of Terms and Conditions Memorandum for Employees with respect to grants of options to purchase Class 1 Stock pursuant to the Company’s Long-Term Stock Incentive Plan (grants on or after April 21, 2017) (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 21, 2017, filed April 25, 2017 and incorporated herein by reference). *
|
|
|
|
10.6
|
|
Form of Restricted Stock Unit Agreement with respect to the Company’s Long-Term Stock Incentive Plan (awards on or after April 21, 2017) (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 21, 2017, filed April 25, 2017 and incorporated herein by reference). *
|
|
|
|
#
|
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.
|
|
CONSTELLATION BRANDS, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
Name:
|
[Name]
|
|
Title:
|
[Title]
|
|
|
|
|
|
[Name]
|
|
|
|
[Name]
|
|
|
|
[Name]
|
|
[Title]
|
|
For the Three Months Ended
|
|
For the Fiscal Years Ended
|
||||||||||||||||||||||||
|
May 31,
2017 |
|
May 31,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2015 |
|
February 28,
2014 |
|
February 28,
2013 |
||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income before income taxes
|
$
|
479.4
|
|
|
$
|
468.8
|
|
|
$
|
2,093.4
|
|
|
$
|
1,501.2
|
|
|
$
|
1,179.6
|
|
|
$
|
2,202.3
|
|
|
$
|
516.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Plus fixed charges
|
87.4
|
|
|
88.8
|
|
|
356.7
|
|
|
332.3
|
|
|
352.3
|
|
|
337.5
|
|
|
239.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Less interest capitalized
|
(3.7
|
)
|
|
(2.5
|
)
|
|
(16.6
|
)
|
|
(12.7
|
)
|
|
(8.2
|
)
|
|
(0.9
|
)
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earnings, as adjusted
|
$
|
563.1
|
|
|
$
|
555.1
|
|
|
$
|
2,433.5
|
|
|
$
|
1,820.8
|
|
|
$
|
1,523.7
|
|
|
$
|
2,538.9
|
|
|
$
|
755.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest on debt and capitalized leases, amortization of debt issuance costs, and amortization of discount on debt
(b)
|
$
|
86.3
|
|
|
$
|
87.6
|
|
|
$
|
352.0
|
|
|
$
|
327.8
|
|
|
$
|
347.7
|
|
|
$
|
332.2
|
|
|
$
|
234.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest element of rentals
|
1.1
|
|
|
1.2
|
|
|
4.7
|
|
|
4.5
|
|
|
4.7
|
|
|
5.3
|
|
|
5.1
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total fixed charges
|
$
|
87.4
|
|
|
$
|
88.8
|
|
|
$
|
356.7
|
|
|
$
|
332.3
|
|
|
$
|
352.4
|
|
|
$
|
337.5
|
|
|
$
|
239.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Ratio of Earnings to Fixed Charges
|
6.4x
|
|
|
6.3x
|
|
|
6.8x
|
|
|
5.5x
|
|
|
4.3x
|
|
|
7.5x
|
|
|
3.2x
|
|
(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:
|
June 29, 2017
|
/s/ Robert Sands
|
|
|
Robert Sands,
President and Chief Executive Officer
|
Dated:
|
June 29, 2017
|
/s/ David Klein
|
|
|
David Klein,
Executive Vice President and
Chief Financial Officer
|