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
|
¨
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
Class
|
|
Number of Shares Outstanding
|
Class A Common Stock, par value $.01 per share
|
|
166,548,089
|
Class B Common Stock, par value $.01 per share
|
|
23,316,629
|
Class 1 Common Stock, par value $.01 per share
|
|
11,983
|
|
|
|
|
Item 1.
|
Financial Statements.
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
|
|||||||
|
November 30,
2018 |
|
February 28,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
130.6
|
|
|
$
|
90.3
|
|
Accounts receivable
|
837.2
|
|
|
776.2
|
|
||
Inventories
|
2,198.0
|
|
|
2,084.0
|
|
||
Prepaid expenses and other
|
472.7
|
|
|
523.5
|
|
||
Total current assets
|
3,638.5
|
|
|
3,474.0
|
|
||
Property, plant and equipment
|
4,986.3
|
|
|
4,789.7
|
|
||
Goodwill
|
8,061.8
|
|
|
8,083.1
|
|
||
Intangible assets
|
3,307.8
|
|
|
3,304.8
|
|
||
Equity method investments
|
3,583.0
|
|
|
121.5
|
|
||
Other assets
|
4,313.0
|
|
|
765.6
|
|
||
Total assets
|
$
|
27,890.4
|
|
|
$
|
20,538.7
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
731.5
|
|
|
$
|
746.8
|
|
Current maturities of long-term debt
|
1,065.6
|
|
|
22.3
|
|
||
Accounts payable
|
882.7
|
|
|
592.2
|
|
||
Other accrued expenses and liabilities
|
683.6
|
|
|
678.3
|
|
||
Total current liabilities
|
3,363.4
|
|
|
2,039.6
|
|
||
Long-term debt, less current maturities
|
11,772.5
|
|
|
9,417.6
|
|
||
Other liabilities
|
1,234.5
|
|
|
1,089.8
|
|
||
Total liabilities
|
16,370.4
|
|
|
12,547.0
|
|
||
Commitments and contingencies
|
|
|
|
||||
CBI stockholders’ equity:
|
|
|
|
||||
Class A Common Stock, $.01 par value – Authorized, 322,000,000 shares; Issued, 185,514,404 shares and 258,718,356 shares, respectively
|
1.9
|
|
|
2.6
|
|
||
Class B Convertible Common Stock, $.01 par value – Authorized, 30,000,000 shares; Issued, 28,322,429
shares and 28,335,387 shares, respectively
|
0.3
|
|
|
0.3
|
|
||
Additional paid-in capital
|
1,368.8
|
|
|
2,825.3
|
|
||
Retained earnings
|
13,176.8
|
|
|
9,157.2
|
|
||
Accumulated other comprehensive loss
|
(505.9
|
)
|
|
(202.9
|
)
|
||
|
14,041.9
|
|
|
11,782.5
|
|
||
Less: Treasury stock –
|
|
|
|
||||
Class A Common Stock, at cost, 18,970,734 shares and 90,743,239 shares, respectively
|
(2,783.0
|
)
|
|
(3,805.2
|
)
|
||
Class B Convertible Common Stock, at cost, 5,005,800 shares
|
(2.2
|
)
|
|
(2.2
|
)
|
||
|
(2,785.2
|
)
|
|
(3,807.4
|
)
|
||
Total CBI stockholders’ equity
|
11,256.7
|
|
|
7,975.1
|
|
||
Noncontrolling interests
|
263.3
|
|
|
16.6
|
|
||
Total stockholders’ equity
|
11,520.0
|
|
|
7,991.7
|
|
||
Total liabilities and stockholders’ equity
|
$
|
27,890.4
|
|
|
$
|
20,538.7
|
|
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,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales
|
$
|
6,916.3
|
|
|
$
|
6,390.6
|
|
|
$
|
2,160.6
|
|
|
$
|
1,981.7
|
|
Excise taxes
|
(597.5
|
)
|
|
(572.3
|
)
|
|
(188.0
|
)
|
|
(179.8
|
)
|
||||
Net sales
|
6,318.8
|
|
|
5,818.3
|
|
|
1,972.6
|
|
|
1,801.9
|
|
||||
Cost of product sold
|
(3,132.0
|
)
|
|
(2,851.0
|
)
|
|
(1,002.6
|
)
|
|
(891.6
|
)
|
||||
Gross profit
|
3,186.8
|
|
|
2,967.3
|
|
|
970.0
|
|
|
910.3
|
|
||||
Selling, general and administrative expenses
|
(1,239.9
|
)
|
|
(1,199.3
|
)
|
|
(413.5
|
)
|
|
(420.7
|
)
|
||||
Operating income
|
1,946.9
|
|
|
1,768.0
|
|
|
556.5
|
|
|
489.6
|
|
||||
Income (loss) from unconsolidated investments
|
918.2
|
|
|
249.7
|
|
|
(134.6
|
)
|
|
249.1
|
|
||||
Interest expense
|
(248.6
|
)
|
|
(245.1
|
)
|
|
(72.8
|
)
|
|
(81.4
|
)
|
||||
Loss on extinguishment of debt
|
(1.7
|
)
|
|
(19.1
|
)
|
|
(1.7
|
)
|
|
(10.3
|
)
|
||||
Income before income taxes
|
2,614.8
|
|
|
1,753.5
|
|
|
347.4
|
|
|
647.0
|
|
||||
Provision for income taxes
|
(405.1
|
)
|
|
(352.0
|
)
|
|
(35.3
|
)
|
|
(150.6
|
)
|
||||
Net income
|
2,209.7
|
|
|
1,401.5
|
|
|
312.1
|
|
|
496.4
|
|
||||
Net income attributable to noncontrolling interests
|
(13.3
|
)
|
|
(8.6
|
)
|
|
(9.0
|
)
|
|
(3.6
|
)
|
||||
Net income attributable to CBI
|
$
|
2,196.4
|
|
|
$
|
1,392.9
|
|
|
$
|
303.1
|
|
|
$
|
492.8
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
1,891.7
|
|
|
$
|
1,605.3
|
|
|
$
|
98.2
|
|
|
$
|
369.2
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
1.7
|
|
|
(21.6
|
)
|
|
3.6
|
|
|
2.0
|
|
||||
Comprehensive income attributable to CBI
|
$
|
1,893.4
|
|
|
$
|
1,583.7
|
|
|
$
|
101.8
|
|
|
$
|
371.2
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
$
|
11.66
|
|
|
$
|
7.22
|
|
|
$
|
1.62
|
|
|
$
|
2.55
|
|
Basic – Class B Convertible Common Stock
|
$
|
10.59
|
|
|
$
|
6.55
|
|
|
$
|
1.47
|
|
|
$
|
2.32
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
$
|
11.21
|
|
|
$
|
6.92
|
|
|
$
|
1.56
|
|
|
$
|
2.45
|
|
Diluted – Class B Convertible Common Stock
|
$
|
10.35
|
|
|
$
|
6.40
|
|
|
$
|
1.45
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
167.203
|
|
|
171.854
|
|
|
166.364
|
|
|
171.922
|
|
||||
Basic – Class B Convertible Common Stock
|
23.322
|
|
|
23.339
|
|
|
23.318
|
|
|
23.333
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
195.921
|
|
|
201.183
|
|
|
194.820
|
|
|
201.177
|
|
||||
Diluted – Class B Convertible Common Stock
|
23.322
|
|
|
23.339
|
|
|
23.318
|
|
|
23.333
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share:
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
$
|
2.22
|
|
|
$
|
1.56
|
|
|
$
|
0.74
|
|
|
$
|
0.52
|
|
Class B Convertible Common Stock
|
$
|
2.01
|
|
|
$
|
1.41
|
|
|
$
|
0.67
|
|
|
$
|
0.47
|
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
|||||||
|
For the Nine Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
2,209.7
|
|
|
$
|
1,401.5
|
|
|
|
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Unrealized net gain on securities measured at fair value
|
(786.5
|
)
|
|
(216.8
|
)
|
||
Net gain on sale of unconsolidated investment
|
(99.8
|
)
|
|
—
|
|
||
Net income tax benefit related to the Tax Cuts and Jobs Act
|
(37.6
|
)
|
|
—
|
|
||
Equity in earnings of equity method investees, net of distributed earnings
|
(18.4
|
)
|
|
(20.5
|
)
|
||
Depreciation
|
250.1
|
|
|
214.4
|
|
||
Deferred tax provision
|
208.1
|
|
|
91.1
|
|
||
Stock-based compensation
|
51.1
|
|
|
45.5
|
|
||
Amortization of debt issuance costs and loss on extinguishment of debt
|
25.8
|
|
|
27.6
|
|
||
Amortization and impairment of intangible assets
|
4.5
|
|
|
91.2
|
|
||
Loss on contract termination
|
—
|
|
|
59.0
|
|
||
Change in operating assets and liabilities, net of effects from purchases of businesses:
|
|
|
|
||||
Accounts receivable
|
(56.4
|
)
|
|
(38.4
|
)
|
||
Inventories
|
(127.7
|
)
|
|
(221.7
|
)
|
||
Prepaid expenses and other current assets
|
(56.6
|
)
|
|
(78.3
|
)
|
||
Accounts payable
|
301.3
|
|
|
157.7
|
|
||
Other accrued expenses and liabilities
|
33.7
|
|
|
(67.8
|
)
|
||
Other
|
72.6
|
|
|
23.9
|
|
||
Total adjustments
|
(235.8
|
)
|
|
66.9
|
|
||
Net cash provided by operating activities
|
1,973.9
|
|
|
1,468.4
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Investments in equity method investees and securities
|
(4,077.3
|
)
|
|
(191.3
|
)
|
||
Purchases of property, plant and equipment
|
(620.3
|
)
|
|
(705.6
|
)
|
||
Purchases of businesses, net of cash acquired
|
(45.3
|
)
|
|
(131.9
|
)
|
||
Proceeds from sale of unconsolidated investment
|
110.2
|
|
|
—
|
|
||
Proceeds from sales of assets
|
46.3
|
|
|
1.2
|
|
||
Other investing activities
|
(0.9
|
)
|
|
(10.7
|
)
|
||
Net cash used in investing activities
|
(4,587.3
|
)
|
|
(1,038.3
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
3,657.6
|
|
|
6,017.9
|
|
||
Proceeds from shares issued under equity compensation plans
|
32.6
|
|
|
37.5
|
|
||
Purchases of treasury stock
|
(504.3
|
)
|
|
(239.2
|
)
|
||
Dividends paid
|
(417.9
|
)
|
|
(301.1
|
)
|
||
Principal payments of long-term debt
|
(45.3
|
)
|
|
(6,522.8
|
)
|
||
Payments of debt issuance costs
|
(33.3
|
)
|
|
(32.4
|
)
|
||
Net proceeds from (repayments of) short-term borrowings
|
(14.5
|
)
|
|
604.9
|
|
||
Payments of minimum tax withholdings on stock-based payment awards
|
(13.6
|
)
|
|
(22.9
|
)
|
||
Net cash provided by (used in) financing activities
|
2,661.3
|
|
|
(458.1
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(7.6
|
)
|
|
5.1
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
40.3
|
|
|
(22.9
|
)
|
||
Cash and cash equivalents, beginning of period
|
90.3
|
|
|
177.4
|
|
||
Cash and cash equivalents, end of period
|
$
|
130.6
|
|
|
$
|
154.5
|
|
|
|
|
|
||||
Supplemental disclosures of noncash investing and financing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
130.9
|
|
|
$
|
155.7
|
|
Conversion of long-term debt to noncontrolling equity interest
|
$
|
248.4
|
|
|
$
|
—
|
|
|
As
Previously
Reported
|
|
Revenue
Recognition
Adjustments
|
|
As
Adjusted
|
||||||
(in millions, except per share data
)
|
|
|
|
|
|
||||||
Consolidated Balance Sheet at February 28, 2018
|
|
|
|
|
|
||||||
Other accrued expenses and liabilities
|
$
|
583.4
|
|
|
$
|
94.9
|
|
|
$
|
678.3
|
|
Total current liabilities
|
$
|
1,944.7
|
|
|
$
|
94.9
|
|
|
$
|
2,039.6
|
|
Other liabilities (including deferred income taxes – as previously reported, $718.3 million; as adjusted, $694.4 million)
|
$
|
1,113.7
|
|
|
$
|
(23.9
|
)
|
|
$
|
1,089.8
|
|
Total liabilities
|
$
|
12,476.0
|
|
|
$
|
71.0
|
|
|
$
|
12,547.0
|
|
Retained earnings
|
$
|
9,228.2
|
|
|
$
|
(71.0
|
)
|
|
$
|
9,157.2
|
|
Total stockholders’ equity
|
$
|
8,062.7
|
|
|
$
|
(71.0
|
)
|
|
$
|
7,991.7
|
|
|
|
|
|
|
|
|
As
Previously
Reported
|
|
Revenue
Recognition
Adjustments
|
|
As
Adjusted
|
||||||
(in millions, except per share data
)
|
|
|
|
|
|
||||||
Consolidated Statement of Comprehensive Income for the Nine Months Ended November 30, 2017
|
|||||||||||
Sales
|
$
|
6,391.4
|
|
|
$
|
(0.8
|
)
|
|
$
|
6,390.6
|
|
Net sales
|
$
|
5,819.1
|
|
|
$
|
(0.8
|
)
|
|
$
|
5,818.3
|
|
Gross profit
|
$
|
2,968.1
|
|
|
$
|
(0.8
|
)
|
|
$
|
2,967.3
|
|
Operating income
|
$
|
1,768.8
|
|
|
$
|
(0.8
|
)
|
|
$
|
1,768.0
|
|
Income before income taxes
|
$
|
1,754.3
|
|
|
$
|
(0.8
|
)
|
|
$
|
1,753.5
|
|
Provision for income taxes
|
$
|
(352.3
|
)
|
|
$
|
0.3
|
|
|
$
|
(352.0
|
)
|
Net income
|
$
|
1,402.0
|
|
|
$
|
(0.5
|
)
|
|
$
|
1,401.5
|
|
Net income attributable to CBI
|
$
|
1,393.4
|
|
|
$
|
(0.5
|
)
|
|
$
|
1,392.9
|
|
Comprehensive income attributable to CBI
|
$
|
1,584.2
|
|
|
$
|
(0.5
|
)
|
|
$
|
1,583.7
|
|
|
|
|
|
|
|
||||||
Net income per common share attributable to CBI:
|
|
|
|
|
|
||||||
Basic – Class A Common Stock
|
$
|
7.22
|
|
|
$
|
—
|
|
|
$
|
7.22
|
|
Basic – Class B Convertible Common Stock
|
$
|
6.55
|
|
|
$
|
—
|
|
|
$
|
6.55
|
|
|
|
|
|
|
|
||||||
Diluted – Class A Common Stock
|
$
|
6.93
|
|
|
$
|
(0.01
|
)
|
|
$
|
6.92
|
|
Diluted – Class B Convertible Common Stock
|
$
|
6.40
|
|
|
$
|
—
|
|
|
$
|
6.40
|
|
|
|
|
|
|
|
||||||
Consolidated Statement of Comprehensive Income for the Three Months Ended November 30, 2017
|
|||||||||||
Sales
|
$
|
1,978.9
|
|
|
$
|
2.8
|
|
|
$
|
1,981.7
|
|
Net sales
|
$
|
1,799.1
|
|
|
$
|
2.8
|
|
|
$
|
1,801.9
|
|
Gross profit
|
$
|
907.5
|
|
|
$
|
2.8
|
|
|
$
|
910.3
|
|
Operating income
|
$
|
486.8
|
|
|
$
|
2.8
|
|
|
$
|
489.6
|
|
Income before income taxes
|
$
|
644.2
|
|
|
$
|
2.8
|
|
|
$
|
647.0
|
|
Provision for income taxes
|
$
|
(149.5
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(150.6
|
)
|
Net income
|
$
|
494.7
|
|
|
$
|
1.7
|
|
|
$
|
496.4
|
|
Net income attributable to CBI
|
$
|
491.1
|
|
|
$
|
1.7
|
|
|
$
|
492.8
|
|
Comprehensive income attributable to CBI
|
$
|
369.5
|
|
|
$
|
1.7
|
|
|
$
|
371.2
|
|
|
|
|
|
|
|
||||||
Net income per common share attributable to CBI:
|
|
|
|
|
|
||||||
Basic – Class A Common Stock
|
$
|
2.54
|
|
|
$
|
0.01
|
|
|
$
|
2.55
|
|
Basic – Class B Convertible Common Stock
|
$
|
2.31
|
|
|
$
|
0.01
|
|
|
$
|
2.32
|
|
|
|
|
|
|
|
||||||
Diluted – Class A Common Stock
|
$
|
2.44
|
|
|
$
|
0.01
|
|
|
$
|
2.45
|
|
Diluted – Class B Convertible Common Stock
|
$
|
2.26
|
|
|
$
|
—
|
|
|
$
|
2.26
|
|
|
November 30,
2018 |
|
February 28,
2018 |
||||
(in millions
)
|
|
|
|
||||
Raw materials and supplies
|
$
|
142.3
|
|
|
$
|
160.8
|
|
In-process inventories
|
1,532.5
|
|
|
1,382.8
|
|
||
Finished case goods
|
523.2
|
|
|
540.4
|
|
||
|
$
|
2,198.0
|
|
|
$
|
2,084.0
|
|
|
November 30,
2018 |
|
February 28,
2018 |
||||
(in millions
)
|
|
|
|
||||
Derivative instruments designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
1,598.7
|
|
|
$
|
1,465.4
|
|
|
|
|
|
||||
Derivative instruments not designated as hedging instruments
|
|
|
|
||||
Foreign currency contracts
|
$
|
356.8
|
|
|
$
|
440.6
|
|
Commodity derivative contracts
|
$
|
260.2
|
|
|
$
|
177.5
|
|
Derivative Instruments in
Designated Cash Flow
Hedging Relationships
|
|
Net
Gain (Loss)
Recognized
in OCI
|
|
Location of Net Gain (Loss)
Reclassified from
AOCI to Income
|
|
Net
Gain (Loss)
Reclassified
from AOCI
to Income
|
||||
(in millions)
|
|
|
|
|
|
|
||||
For the Nine Months Ended November 30, 2018
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(55.6
|
)
|
|
Sales
|
|
$
|
0.1
|
|
|
|
|
|
Cost of product sold
|
|
5.2
|
|
|||
|
|
$
|
(55.6
|
)
|
|
|
|
$
|
5.3
|
|
|
|
|
|
|
|
|
||||
For the Nine Months Ended November 30, 2017
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
44.5
|
|
|
Sales
|
|
$
|
(0.3
|
)
|
|
|
|
|
Cost of product sold
|
|
0.3
|
|
|||
Interest rate swap contracts
|
|
(1.5
|
)
|
|
Interest expense
|
|
1.3
|
|
||
|
|
$
|
43.0
|
|
|
|
|
$
|
1.3
|
|
|
|
|
|
|
|
|
||||
For the Three Months Ended November 30, 2018
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(48.6
|
)
|
|
Sales
|
|
$
|
—
|
|
|
|
|
|
Cost of product sold
|
|
0.5
|
|
|||
|
|
$
|
(48.6
|
)
|
|
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
||||
For the Three Months Ended November 30, 2017
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(22.1
|
)
|
|
Sales
|
|
$
|
(0.4
|
)
|
|
|
|
|
Cost of product sold
|
|
2.3
|
|
|||
Interest rate swap contracts
|
|
0.9
|
|
|
Interest expense
|
|
1.4
|
|
||
|
|
$
|
(21.2
|
)
|
|
|
|
$
|
3.3
|
|
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, 2018
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
(5.1
|
)
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(58.5
|
)
|
|
Interest rate swap contracts
|
|
|
|
Interest expense
|
|
35.0
|
|
|
|
|
|
|
|
|
$
|
(28.6
|
)
|
|
|
|
|
|
|
|
||
For the Nine Months Ended November 30, 2017
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
4.3
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
4.4
|
|
|
|
|
|
|
|
|
$
|
8.7
|
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2018
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
(14.7
|
)
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(30.4
|
)
|
|
Interest rate swap contracts
|
|
|
|
Interest expense
|
|
32.3
|
|
|
|
|
|
|
|
|
$
|
(12.8
|
)
|
|
|
|
|
|
|
|
||
For the Three Months Ended November 30, 2017
|
|
|
|
|
|
|
||
Commodity derivative contracts
|
|
|
|
Cost of product sold
|
|
$
|
3.5
|
|
Foreign currency contracts
|
|
|
|
Selling, general and administrative expenses
|
|
(2.0
|
)
|
|
|
|
|
|
|
|
$
|
1.5
|
|
•
|
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.
|
|
November 30, 2018
|
|
February 28, 2018
|
|||||
|
November
2018 Canopy
Warrants
|
|
November
2017 Canopy
Warrants
|
|
November
2017 Canopy
Warrants
|
|||
Expected life
(1)
|
2.9 years
|
|
|
1.4 years
|
|
|
2.2 years
|
|
Expected volatility
(2)
|
75.2
|
%
|
|
83.2
|
%
|
|
70.9
|
%
|
Risk-free interest rate
(3)
|
2.2
|
%
|
|
2.1
|
%
|
|
1.8
|
%
|
Expected dividend yield
(4)
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
(1)
|
Based on the expiration date of the warrants.
|
(2)
|
Based on historical volatility levels of the underlying equity security.
|
(3)
|
Based on the implied yield currently available on Canadian Treasury zero coupon issues with a remaining term equal to the expected life.
|
(4)
|
Based on historical dividend levels.
|
Remaining term
(1)
|
4.6 years
|
|
Expected volatility
(2)
|
44.2
|
%
|
Risk-free interest rate
(3)
|
2.2
|
%
|
Expected dividend yield
(4)
|
0.0
|
%
|
(1)
|
Based on the contractual maturity date of the notes.
|
(2)
|
Based on historical volatility levels of the underlying equity security reduced to account for certain risks not incorporated into the option-pricing model.
|
(3)
|
Based on the implied yield currently available on Canadian Treasury zero coupon issues with a term equal to the remaining contractual term of the debt securities.
|
(4)
|
Based on historical dividend levels.
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
November 30, 2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
11.3
|
|
|
$
|
—
|
|
|
$
|
11.3
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
8.3
|
|
|
$
|
—
|
|
|
$
|
8.3
|
|
Equity securities
(1) (2)
|
$
|
—
|
|
|
$
|
1,881.2
|
|
|
$
|
—
|
|
|
$
|
1,881.2
|
|
Canopy Debt Securities
(2)
|
$
|
—
|
|
|
$
|
166.9
|
|
|
$
|
—
|
|
|
$
|
166.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
67.5
|
|
|
$
|
—
|
|
|
$
|
67.5
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
17.2
|
|
|
$
|
—
|
|
|
$
|
17.2
|
|
|
|
|
|
|
|
|
|
||||||||
February 28, 2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
40.3
|
|
|
$
|
—
|
|
|
$
|
40.3
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
9.1
|
|
|
$
|
—
|
|
|
$
|
9.1
|
|
Equity securities
(1)
|
$
|
402.4
|
|
|
$
|
253.2
|
|
|
$
|
—
|
|
|
$
|
655.6
|
|
Debt securities, AFS
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.6
|
|
|
$
|
16.6
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
19.9
|
|
|
$
|
—
|
|
|
$
|
19.9
|
|
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
5.6
|
|
|
$
|
—
|
|
|
$
|
5.6
|
|
(1)
|
Equity securities consist of:
|
November 30, 2018
|
|
February 28, 2018
|
||||
|
(in millions)
|
|
|
|
||||
|
November 2017 Canopy Investment
|
$
|
—
|
|
|
$
|
402.4
|
|
|
November 2017 Canopy Warrants
|
476.8
|
|
|
253.2
|
|
||
|
November 2018 Canopy Warrants
|
1,404.4
|
|
|
—
|
|
||
|
|
$
|
1,881.2
|
|
|
$
|
655.6
|
|
(2)
|
Unrealized net gain (loss) from the changes in fair value of our securities measured at fair value recognized in income (loss) from unconsolidated investments, are as follows:
|
||||||||||||||||
|
|
For the Nine Months Ended
|
|
For the Three Months Ended
|
|||||||||||||
|
|
November 30, 2018
|
|
November 30, 2017
|
|
November 30, 2018
|
|
November 30, 2017
|
|||||||||
|
(in millions)
|
|
|
|
|
|
|
|
|||||||||
|
November 2017 Canopy Investment
(i)
|
$
|
292.5
|
|
|
$
|
139.7
|
|
|
$
|
(168.5
|
)
|
|
$
|
139.7
|
|
|
|
November 2017 Canopy Warrants
|
223.5
|
|
|
77.1
|
|
|
(212.4
|
)
|
|
77.1
|
|
|||||
|
November 2018 Canopy Warrants
|
257.6
|
|
|
—
|
|
|
257.6
|
|
|
—
|
|
|||||
|
Canopy Debt Securities
|
12.9
|
|
|
—
|
|
|
(40.6
|
)
|
|
—
|
|
|||||
|
|
$
|
786.5
|
|
|
$
|
216.8
|
|
|
$
|
(163.9
|
)
|
|
$
|
216.8
|
|
|
|
(i)
|
Accounted for at fair value from the date of investment in November 2017 through October 31, 2018. Accounted for under the equity method from November 1, 2018.
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total Losses
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
For the Nine Months Ended November 30, 2017
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136.0
|
|
|
$
|
86.8
|
|
|
Beer
|
|
Wine and Spirits
|
|
Consolidated
|
||||||
(in millions)
|
|
|
|
|
|
||||||
Balance, February 28, 2017
|
$
|
5,053.0
|
|
|
$
|
2,867.5
|
|
|
$
|
7,920.5
|
|
Purchase accounting allocations
(1)
|
63.9
|
|
|
56.2
|
|
|
120.1
|
|
|||
Foreign currency translation adjustments
|
40.7
|
|
|
1.8
|
|
|
42.5
|
|
|||
Balance, February 28, 2018
|
5,157.6
|
|
|
2,925.5
|
|
|
8,083.1
|
|
|||
Purchase accounting allocations
(2)
|
22.3
|
|
|
11.8
|
|
|
34.1
|
|
|||
Foreign currency translation adjustments
|
(48.7
|
)
|
|
(6.7
|
)
|
|
(55.4
|
)
|
|||
Balance, November 30, 2018
|
$
|
5,131.2
|
|
|
$
|
2,930.6
|
|
|
$
|
8,061.8
|
|
(1)
|
Purchase accounting allocations associated primarily with the acquisitions of a brewery operation business in Obregon, Sonora, Mexico (the “Obregon Brewery”) (
$13.8 million
) and Funky Buddha Brewery LLC (Beer), and Schrader Cellars, LLC (Wine and Spirits).
|
(2)
|
Preliminary purchase accounting allocations associated primarily with the acquisitions of
F
our Corners Brewing Company LLC (Beer) and a production facility in Italy (Wine and Spirits).
|
|
November 30, 2018
|
|
February 28, 2018
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Net
Carrying
Amount
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
$
|
89.9
|
|
|
$
|
40.4
|
|
|
$
|
89.8
|
|
|
$
|
44.2
|
|
Other
|
20.4
|
|
|
1.0
|
|
|
20.3
|
|
|
1.4
|
|
||||
Total
|
$
|
110.3
|
|
|
41.4
|
|
|
$
|
110.1
|
|
|
45.6
|
|
||
|
|
|
|
|
|
|
|
||||||||
Nonamortizable intangible assets
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
|
|
3,266.4
|
|
|
|
|
3,259.2
|
|
||||||
Total intangible assets
|
|
|
$
|
3,307.8
|
|
|
|
|
$
|
3,304.8
|
|
|
November 30, 2018
|
|
February 28, 2018
|
||||||||||
|
Carrying Value
|
|
Ownership Percentage
|
|
Carrying Value
|
|
Ownership Percentage
|
||||||
(in millions)
|
|
|
|
|
|
|
|
||||||
Canopy Equity Method Investment
|
$
|
3,435.2
|
|
|
36.0
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Other equity method investments
|
147.8
|
|
|
20%-50%
|
|
|
121.5
|
|
|
20%-50%
|
|
||
|
$
|
3,583.0
|
|
|
|
|
$
|
121.5
|
|
|
|
|
November 30,
2018 |
|
February 28,
2018 |
||||
(in millions
)
|
|
|
|
||||
Deferred income taxes (see Note 2)
|
$
|
2,177.7
|
|
|
$
|
—
|
|
Investments in securities measured at fair value
|
2,048.1
|
|
|
672.2
|
|
||
Other
|
87.2
|
|
|
93.4
|
|
||
|
$
|
4,313.0
|
|
|
$
|
765.6
|
|
|
November 30, 2018
|
|
February 28,
2018 |
||||||||||||
|
Current
|
|
Long-term
|
|
Total
|
|
Total
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Short-term borrowings
|
|
|
|
|
|
|
|
||||||||
Senior credit facility, Revolving credit loans
|
$
|
105.0
|
|
|
|
|
|
|
|
$
|
79.0
|
|
|||
Commercial paper
|
626.5
|
|
|
|
|
|
|
|
266.9
|
|
|||||
Other
|
—
|
|
|
|
|
|
|
|
400.9
|
|
|||||
|
$
|
731.5
|
|
|
|
|
|
|
|
|
$
|
746.8
|
|
||
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
|
|
|
|
|
|
||||||||
Senior credit facility, Term loan
|
$
|
5.0
|
|
|
$
|
489.0
|
|
|
$
|
494.0
|
|
|
$
|
497.7
|
|
Term loan credit facility
|
50.0
|
|
|
1,448.9
|
|
|
1,498.9
|
|
|
—
|
|
||||
Senior notes
|
997.0
|
|
|
9,816.1
|
|
|
10,813.1
|
|
|
8,674.2
|
|
||||
Other
|
13.6
|
|
|
18.5
|
|
|
32.1
|
|
|
268.0
|
|
||||
|
$
|
1,065.6
|
|
|
$
|
11,772.5
|
|
|
$
|
12,838.1
|
|
|
$
|
9,439.9
|
|
•
|
The removal of CIH as a borrower under the August 2018 Credit Agreement;
|
•
|
The termination of a cross-guarantee agreement by the European Borrowers; and
|
•
|
The addition of a mechanism to provide for the replacement of LIBOR with an alternative benchmark rate in certain circumstances where LIBOR cannot be adequately ascertained or available.
|
|
Amount
|
|
Maturity
|
||
(in millions)
|
|
|
|
||
2018 Credit Agreement
|
|
|
|
||
Revolving Credit Facility
(1) (2)
|
$
|
2,000.0
|
|
|
Sept 14, 2023
|
U.S. Term A-1 Facility
(1) (3)
|
500.0
|
|
|
July 14, 2024
|
|
|
$
|
2,500.0
|
|
|
|
Term Credit Agreement
|
|
|
|
||
Three-Year Term Facility
(1) (3)
|
$
|
500.0
|
|
|
Nov 1, 2021
|
Five-Year Term Facility
(1) (3)
|
1,000.0
|
|
|
Nov 1, 2023
|
|
|
$
|
1,500.0
|
|
|
|
(1)
|
Contractual interest rate varies based on our debt rating (as defined in the respective agreement) and is a function of LIBOR plus a margin, or the base rate plus a margin, or, in certain circumstances where LIBOR cannot be adequately ascertained or available, an alternative benchmark rate plus a margin.
|
(2)
|
We and/or CB International are the borrower under the
$2,000.0 million
Revolving Credit Facility. Includes a sub-facility for letters of credit of up to
$200.0 million
.
|
(3)
|
We are the borrower under the U.S. Term A-1 loan facility, the Three-Year Term Facility and the Five-Year Term Facility.
|
|
2018 Credit Agreement
|
|
Term Credit Agreement
|
||||||||||||
|
Revolving
Credit
Facility
|
|
U.S.
Term A-1
Facility
(1)
|
|
Three-Year
Term
Facility
(1)
|
|
Five-Year
Term
Facility
(1)
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Outstanding borrowings
|
$
|
105.0
|
|
|
$
|
494.0
|
|
|
$
|
499.5
|
|
|
$
|
999.4
|
|
Interest rate
|
3.4
|
%
|
|
3.8
|
%
|
|
3.4
|
%
|
|
3.5
|
%
|
||||
LIBOR margin
|
1.13
|
%
|
|
1.50
|
%
|
|
1.13
|
%
|
|
1.25
|
%
|
||||
Outstanding letters of credit
|
$
|
10.7
|
|
|
|
|
|
|
|
||||||
Remaining borrowing capacity
(2)
|
$
|
1,257.2
|
|
|
|
|
|
|
|
(1)
|
Outstanding term loan facility borrowings are net of unamortized debt issuance costs.
|
(2)
|
Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2018 Credit Agreement and outstanding borrowings under our commercial paper program of
$627.1 million
(excluding unamortized discount) (see “Commercial paper program”).
|
|
|
|
Date of
|
|
Redemption
|
|||||||
|
Principal
|
|
Maturity
|
|
Interest Payments
|
|
Stated Redemption Date
|
|
Stated Basis Points
|
|||
(
in millions, except basis points)
|
|
|
|
|
|
|
|
|
|
|||
Senior Floating Rate Notes
(1) (2)
|
$
|
650.0
|
|
|
Nov 2021
|
|
Quarterly
|
|
|
|
|
|
4.40% Senior Notes
(1) (3)
|
$
|
500.0
|
|
|
Nov 2025
|
|
May/Nov
|
|
Sept 2025
|
|
20
|
|
4.65% Senior Notes
(1) (3)
|
$
|
500.0
|
|
|
Nov 2028
|
|
May/Nov
|
|
Aug 2028
|
|
25
|
|
5.25% Senior Notes
(1) (3)
|
$
|
500.0
|
|
|
Nov 2048
|
|
May/Nov
|
|
May 2048
|
|
30
|
|
(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)
|
Interest will accrue for each quarterly interest period at a rate equal to three-month LIBOR plus 0.70% per year as determined on the applicable interest determination date as defined in the indenture. Interest is payable quarterly in February, May, August and November. The notes are not redeemable prior to October 30, 2019. On or after this date, the notes are redeemable, in whole or in part, at our option at any time prior to maturity, 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 the stated redemption date as defined in the indenture, 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 the stated basis points as defined in the indenture. On or after the stated redemption date, 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.
|
•
|
Lower effective tax rates applicable to our foreign businesses;
|
•
|
The recognition of an income tax benefit for the three months ended November 30, 2018, associated with an adjustment to provisional amounts recognized for the year ended February 28, 2018, in connection with the Tax Cuts and Jobs Act (the “TCJ Act”) (see additional discussion below); and
|
•
|
The recognition of a net income tax benefit from stock-based compensation award activity.
|
•
|
Lower effective tax rates applicable to our foreign businesses, including our assertion regarding indefinitely reinvesting earnings of certain foreign subsidiaries, which was initially asserted in the third quarter of fiscal 2017; and
|
•
|
The recognition of a net income tax benefit from stock-based compensation award activity.
|
|
|
|
Class A Common Shares
|
||||||
|
Repurchase
Authorization
|
|
Dollar Value
of Shares
Repurchased
|
|
Number of
Shares
Repurchased
|
||||
(in millions, except share data)
|
|
|
|
|
|
||||
2018 Authorization
|
$
|
3,000.0
|
|
|
$
|
995.9
|
|
|
4,632,012
|
|
For the Nine Months Ended
|
||||||||||||||
|
November 30, 2018
|
|
November 30, 2017
|
||||||||||||
|
Common Stock
|
|
Common Stock
|
||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||
(in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||
Net income attributable to CBI allocated – basic
|
$
|
1,949.3
|
|
|
$
|
247.1
|
|
|
$
|
1,240.0
|
|
|
$
|
152.9
|
|
Conversion of Class B common shares into Class A common shares
|
247.1
|
|
|
—
|
|
|
152.9
|
|
|
—
|
|
||||
Effect of stock-based awards on allocated net income
|
—
|
|
|
(5.6
|
)
|
|
—
|
|
|
(3.6
|
)
|
||||
Net income attributable to CBI allocated – diluted
|
$
|
2,196.4
|
|
|
$
|
241.5
|
|
|
$
|
1,392.9
|
|
|
$
|
149.3
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic
|
167.203
|
|
|
23.322
|
|
|
171.854
|
|
|
23.339
|
|
||||
Conversion of Class B common shares into Class A common shares
|
23.322
|
|
|
—
|
|
|
23.339
|
|
|
—
|
|
||||
Stock-based awards, primarily stock options
|
5.396
|
|
|
—
|
|
|
5.990
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
195.921
|
|
|
23.322
|
|
|
201.183
|
|
|
23.339
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI – basic
|
$
|
11.66
|
|
|
$
|
10.59
|
|
|
$
|
7.22
|
|
|
$
|
6.55
|
|
Net income per common share attributable to CBI – diluted
|
$
|
11.21
|
|
|
$
|
10.35
|
|
|
$
|
6.92
|
|
|
$
|
6.40
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
For the Three Months Ended
|
||||||||||||||
|
November 30, 2018
|
|
November 30, 2017
|
||||||||||||
|
Common Stock
|
|
Common Stock
|
||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||
Net income attributable to CBI allocated – basic
|
$
|
268.9
|
|
|
$
|
34.2
|
|
|
$
|
438.7
|
|
|
$
|
54.1
|
|
Conversion of Class B common shares into Class A common shares
|
34.2
|
|
|
—
|
|
|
54.1
|
|
|
—
|
|
||||
Effect of stock-based awards on allocated net income
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(1.3
|
)
|
||||
Net income attributable to CBI allocated – diluted
|
$
|
303.1
|
|
|
$
|
33.7
|
|
|
$
|
492.8
|
|
|
$
|
52.8
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic
|
166.364
|
|
|
23.318
|
|
|
171.922
|
|
|
23.333
|
|
||||
Conversion of Class B common shares into Class A common shares
|
23.318
|
|
|
—
|
|
|
23.333
|
|
|
—
|
|
||||
Stock-based awards, primarily stock options
|
5.138
|
|
|
—
|
|
|
5.922
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
194.820
|
|
|
23.318
|
|
|
201.177
|
|
|
23.333
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI – basic
|
$
|
1.62
|
|
|
$
|
1.47
|
|
|
$
|
2.55
|
|
|
$
|
2.32
|
|
Net income per common share attributable to CBI – diluted
|
$
|
1.56
|
|
|
$
|
1.45
|
|
|
$
|
2.45
|
|
|
$
|
2.26
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Nine Months Ended November 30, 2018
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
2,196.4
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(248.4
|
)
|
|
$
|
—
|
|
|
(248.4
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(248.4
|
)
|
|
—
|
|
|
(248.4
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(61.7
|
)
|
|
8.1
|
|
|
(53.6
|
)
|
|||
Reclassification adjustments
|
(5.0
|
)
|
|
1.2
|
|
|
(3.8
|
)
|
|||
Net loss recognized in other comprehensive loss
|
(66.7
|
)
|
|
9.3
|
|
|
(57.4
|
)
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.4
|
)
|
|
0.1
|
|
|
(0.3
|
)
|
|||
Reclassification adjustments
|
1.9
|
|
|
0.9
|
|
|
2.8
|
|
|||
Net gain recognized in other comprehensive loss
|
1.5
|
|
|
1.0
|
|
|
2.5
|
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Reclassification adjustments
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Net gain recognized in other comprehensive loss
|
0.5
|
|
|
(0.2
|
)
|
|
0.3
|
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(313.1
|
)
|
|
$
|
10.1
|
|
|
(303.0
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
1,893.4
|
|
||||
|
|
|
|
|
|
||||||
For the Nine Months Ended November 30, 2017
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
1,392.9
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net gains
|
$
|
154.4
|
|
|
$
|
(0.1
|
)
|
|
154.3
|
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive income
|
154.4
|
|
|
(0.1
|
)
|
|
154.3
|
|
|||
Unrealized gain on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative gains
|
55.6
|
|
|
(16.7
|
)
|
|
38.9
|
|
|||
Reclassification adjustments
|
(2.4
|
)
|
|
0.4
|
|
|
(2.0
|
)
|
|||
Net gain recognized in other comprehensive income
|
53.2
|
|
|
(16.3
|
)
|
|
36.9
|
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive income
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial losses
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Reclassification adjustments
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Net loss recognized in other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income attributable to CBI
|
$
|
207.2
|
|
|
$
|
(16.4
|
)
|
|
190.8
|
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
1,583.7
|
|
||||
|
|
|
|
|
|
|
Before Tax
Amount
|
|
Tax (Expense)
Benefit
|
|
Net of Tax
Amount
|
||||||
(in millions)
|
|
|
|
|
|
||||||
For the Three Months Ended November 30, 2018
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
303.1
|
|
||||
Other comprehensive income (loss) attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(155.9
|
)
|
|
$
|
—
|
|
|
(155.9
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(155.9
|
)
|
|
—
|
|
|
(155.9
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(52.5
|
)
|
|
7.1
|
|
|
(45.4
|
)
|
|||
Reclassification adjustments
|
(0.3
|
)
|
|
0.2
|
|
|
(0.1
|
)
|
|||
Net loss recognized in other comprehensive loss
|
(52.8
|
)
|
|
7.3
|
|
|
(45.5
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial gains
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net gain recognized in other comprehensive loss
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(208.5
|
)
|
|
$
|
7.2
|
|
|
(201.3
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
101.8
|
|
||||
|
|
|
|
|
|
||||||
For the Three Months Ended November 30, 2017
|
|
|
|
|
|
||||||
Net income attributable to CBI
|
|
|
|
|
$
|
492.8
|
|
||||
Other comprehensive loss attributable to CBI:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net losses
|
$
|
(99.1
|
)
|
|
$
|
0.9
|
|
|
(98.2
|
)
|
|
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(99.1
|
)
|
|
0.9
|
|
|
(98.2
|
)
|
|||
Unrealized loss on cash flow hedges:
|
|
|
|
|
|
||||||
Net derivative losses
|
(27.4
|
)
|
|
7.0
|
|
|
(20.4
|
)
|
|||
Reclassification adjustments
|
(3.1
|
)
|
|
0.7
|
|
|
(2.4
|
)
|
|||
Net loss recognized in other comprehensive loss
|
(30.5
|
)
|
|
7.7
|
|
|
(22.8
|
)
|
|||
Unrealized loss on AFS debt securities:
|
|
|
|
|
|
||||||
Net AFS debt securities losses
|
(0.8
|
)
|
|
0.2
|
|
|
(0.6
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss recognized in other comprehensive loss
|
(0.8
|
)
|
|
0.2
|
|
|
(0.6
|
)
|
|||
Pension/postretirement adjustments:
|
|
|
|
|
|
||||||
Net actuarial losses
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Reclassification adjustments
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Net loss recognized in other comprehensive loss
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Other comprehensive loss attributable to CBI
|
$
|
(130.3
|
)
|
|
$
|
8.7
|
|
|
(121.6
|
)
|
|
Comprehensive income attributable to CBI
|
|
|
|
|
$
|
371.2
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
Net
Unrealized
Gains (Losses)
on Derivative
Instruments
|
|
Net
Unrealized
Losses
on AFS Debt
Securities
|
|
Pension/
Postretirement
Adjustments
|
|
Accumulated
Other
Comprehensive
Loss
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, February 28, 2018
|
$
|
(212.3
|
)
|
|
$
|
14.5
|
|
|
$
|
(2.5
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(202.9
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassification adjustments
|
(248.4
|
)
|
|
(53.6
|
)
|
|
(0.3
|
)
|
|
0.1
|
|
|
(302.2
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(3.8
|
)
|
|
2.8
|
|
|
0.2
|
|
|
(0.8
|
)
|
|||||
Other comprehensive income (loss)
|
(248.4
|
)
|
|
(57.4
|
)
|
|
2.5
|
|
|
0.3
|
|
|
(303.0
|
)
|
|||||
Balance, November 30, 2018
|
$
|
(460.7
|
)
|
|
$
|
(42.9
|
)
|
|
$
|
—
|
|
|
$
|
(2.3
|
)
|
|
$
|
(505.9
|
)
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at November 30, 2018
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
5.4
|
|
|
$
|
2.4
|
|
|
$
|
122.8
|
|
|
$
|
—
|
|
|
$
|
130.6
|
|
Accounts receivable
|
436.5
|
|
|
341.3
|
|
|
59.4
|
|
|
—
|
|
|
837.2
|
|
|||||
Inventories
|
198.1
|
|
|
1,590.6
|
|
|
577.9
|
|
|
(168.6
|
)
|
|
2,198.0
|
|
|||||
Intercompany receivable
|
29,127.3
|
|
|
40,158.9
|
|
|
19,860.0
|
|
|
(89,146.2
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
180.1
|
|
|
55.7
|
|
|
355.1
|
|
|
(118.2
|
)
|
|
472.7
|
|
|||||
Total current assets
|
29,947.4
|
|
|
42,148.9
|
|
|
20,975.2
|
|
|
(89,433.0
|
)
|
|
3,638.5
|
|
|||||
Property, plant and equipment
|
80.7
|
|
|
778.8
|
|
|
4,126.8
|
|
|
—
|
|
|
4,986.3
|
|
|||||
Investments in subsidiaries
|
29,562.7
|
|
|
514.5
|
|
|
6,337.2
|
|
|
(36,414.4
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,185.5
|
|
|
1,876.3
|
|
|
—
|
|
|
8,061.8
|
|
|||||
Intangible assets
|
—
|
|
|
714.3
|
|
|
2,593.5
|
|
|
—
|
|
|
3,307.8
|
|
|||||
Intercompany notes receivable
|
5,590.5
|
|
|
2,318.8
|
|
|
—
|
|
|
(7,909.3
|
)
|
|
—
|
|
|||||
Equity method investments
|
17.2
|
|
|
1.8
|
|
|
3,564.0
|
|
|
—
|
|
|
3,583.0
|
|
|||||
Other assets
|
39.1
|
|
|
1.9
|
|
|
4,294.7
|
|
|
(22.7
|
)
|
|
4,313.0
|
|
|||||
Total assets
|
$
|
65,237.6
|
|
|
$
|
52,664.5
|
|
|
$
|
43,767.7
|
|
|
$
|
(133,779.4
|
)
|
|
$
|
27,890.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
626.5
|
|
|
$
|
—
|
|
|
$
|
105.0
|
|
|
$
|
—
|
|
|
$
|
731.5
|
|
Current maturities of long-term debt
|
1,052.0
|
|
|
13.4
|
|
|
0.2
|
|
|
—
|
|
|
1,065.6
|
|
|||||
Accounts payable
|
60.6
|
|
|
402.3
|
|
|
419.8
|
|
|
—
|
|
|
882.7
|
|
|||||
Intercompany payable
|
40,102.2
|
|
|
31,342.1
|
|
|
17,701.9
|
|
|
(89,146.2
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
352.5
|
|
|
313.2
|
|
|
159.5
|
|
|
(141.6
|
)
|
|
683.6
|
|
|||||
Total current liabilities
|
42,193.8
|
|
|
32,071.0
|
|
|
18,386.4
|
|
|
(89,287.8
|
)
|
|
3,363.4
|
|
|||||
Long-term debt, less current maturities
|
11,754.0
|
|
|
18.0
|
|
|
0.5
|
|
|
—
|
|
|
11,772.5
|
|
|||||
Intercompany notes payable
|
—
|
|
|
4,987.0
|
|
|
2,922.3
|
|
|
(7,909.3
|
)
|
|
—
|
|
|||||
Other liabilities
|
33.1
|
|
|
543.0
|
|
|
681.1
|
|
|
(22.7
|
)
|
|
1,234.5
|
|
|||||
Total liabilities
|
53,980.9
|
|
|
37,619.0
|
|
|
21,990.3
|
|
|
(97,219.8
|
)
|
|
16,370.4
|
|
|||||
CBI stockholders’ equity
|
11,256.7
|
|
|
15,045.5
|
|
|
21,514.1
|
|
|
(36,559.6
|
)
|
|
11,256.7
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
263.3
|
|
|
—
|
|
|
263.3
|
|
|||||
Total stockholders’ equity
|
11,256.7
|
|
|
15,045.5
|
|
|
21,777.4
|
|
|
(36,559.6
|
)
|
|
11,520.0
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
65,237.6
|
|
|
$
|
52,664.5
|
|
|
$
|
43,767.7
|
|
|
$
|
(133,779.4
|
)
|
|
$
|
27,890.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Balance Sheet at February 28, 2018
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
4.6
|
|
|
$
|
4.4
|
|
|
$
|
81.3
|
|
|
$
|
—
|
|
|
$
|
90.3
|
|
Accounts receivable
|
2.0
|
|
|
12.6
|
|
|
761.6
|
|
|
—
|
|
|
776.2
|
|
|||||
Inventories
|
184.3
|
|
|
1,537.5
|
|
|
546.6
|
|
|
(184.4
|
)
|
|
2,084.0
|
|
|||||
Intercompany receivable
|
27,680.0
|
|
|
37,937.5
|
|
|
18,940.8
|
|
|
(84,558.3
|
)
|
|
—
|
|
|||||
Prepaid expenses and other
|
138.4
|
|
|
77.7
|
|
|
311.0
|
|
|
(3.6
|
)
|
|
523.5
|
|
|||||
Total current assets
|
28,009.3
|
|
|
39,569.7
|
|
|
20,641.3
|
|
|
(84,746.3
|
)
|
|
3,474.0
|
|
|||||
Property, plant and equipment
|
76.2
|
|
|
775.7
|
|
|
3,937.8
|
|
|
—
|
|
|
4,789.7
|
|
|||||
Investments in subsidiaries
|
20,948.7
|
|
|
442.0
|
|
|
5,876.9
|
|
|
(27,267.6
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
6,185.5
|
|
|
1,897.6
|
|
|
—
|
|
|
8,083.1
|
|
|||||
Intangible assets
|
—
|
|
|
718.2
|
|
|
2,586.6
|
|
|
—
|
|
|
3,304.8
|
|
|||||
Intercompany notes receivable
|
6,236.4
|
|
|
2,435.4
|
|
|
—
|
|
|
(8,671.8
|
)
|
|
—
|
|
|||||
Equity method investments
|
—
|
|
|
1.9
|
|
|
119.6
|
|
|
—
|
|
|
121.5
|
|
|||||
Other assets
|
33.1
|
|
|
2.8
|
|
|
747.1
|
|
|
(17.4
|
)
|
|
765.6
|
|
|||||
Total assets
|
$
|
55,303.7
|
|
|
$
|
50,131.2
|
|
|
$
|
35,806.9
|
|
|
$
|
(120,703.1
|
)
|
|
$
|
20,538.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
266.9
|
|
|
$
|
—
|
|
|
$
|
479.9
|
|
|
$
|
—
|
|
|
$
|
746.8
|
|
Current maturities of long-term debt
|
7.1
|
|
|
15.0
|
|
|
0.2
|
|
|
—
|
|
|
22.3
|
|
|||||
Accounts payable
|
63.4
|
|
|
128.3
|
|
|
400.5
|
|
|
—
|
|
|
592.2
|
|
|||||
Intercompany payable
|
37,408.2
|
|
|
30,029.7
|
|
|
17,120.4
|
|
|
(84,558.3
|
)
|
|
—
|
|
|||||
Other accrued expenses and liabilities
|
356.2
|
|
|
199.3
|
|
|
150.5
|
|
|
(27.7
|
)
|
|
678.3
|
|
|||||
Total current liabilities
|
38,101.8
|
|
|
30,372.3
|
|
|
18,151.5
|
|
|
(84,586.0
|
)
|
|
2,039.6
|
|
|||||
Long-term debt, less current maturities
|
9,166.9
|
|
|
9.1
|
|
|
241.6
|
|
|
—
|
|
|
9,417.6
|
|
|||||
Intercompany notes payable
|
—
|
|
|
5,029.2
|
|
|
3,642.6
|
|
|
(8,671.8
|
)
|
|
—
|
|
|||||
Other liabilities
|
59.9
|
|
|
493.5
|
|
|
553.8
|
|
|
(17.4
|
)
|
|
1,089.8
|
|
|||||
Total liabilities
|
47,328.6
|
|
|
35,904.1
|
|
|
22,589.5
|
|
|
(93,275.2
|
)
|
|
12,547.0
|
|
|||||
CBI stockholders’ equity
|
7,975.1
|
|
|
14,227.1
|
|
|
13,200.8
|
|
|
(27,427.9
|
)
|
|
7,975.1
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
16.6
|
|
|
—
|
|
|
16.6
|
|
|||||
Total stockholders’ equity
|
7,975.1
|
|
|
14,227.1
|
|
|
13,217.4
|
|
|
(27,427.9
|
)
|
|
7,991.7
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
55,303.7
|
|
|
$
|
50,131.2
|
|
|
$
|
35,806.9
|
|
|
$
|
(120,703.1
|
)
|
|
$
|
20,538.7
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2018
|
|||||||||||||||||||
Sales
|
$
|
2,263.2
|
|
|
$
|
5,757.6
|
|
|
$
|
2,891.6
|
|
|
$
|
(3,996.1
|
)
|
|
$
|
6,916.3
|
|
Excise taxes
|
(269.5
|
)
|
|
(318.5
|
)
|
|
(9.5
|
)
|
|
—
|
|
|
(597.5
|
)
|
|||||
Net sales
|
1,993.7
|
|
|
5,439.1
|
|
|
2,882.1
|
|
|
(3,996.1
|
)
|
|
6,318.8
|
|
|||||
Cost of product sold
|
(1,565.2
|
)
|
|
(4,062.8
|
)
|
|
(1,505.6
|
)
|
|
4,001.6
|
|
|
(3,132.0
|
)
|
|||||
Gross profit
|
428.5
|
|
|
1,376.3
|
|
|
1,376.5
|
|
|
5.5
|
|
|
3,186.8
|
|
|||||
Selling, general and administrative expenses
|
(425.5
|
)
|
|
(651.5
|
)
|
|
(180.0
|
)
|
|
17.1
|
|
|
(1,239.9
|
)
|
|||||
Operating income
|
3.0
|
|
|
724.8
|
|
|
1,196.5
|
|
|
22.6
|
|
|
1,946.9
|
|
|||||
Equity in earnings (losses) of equity method investees and subsidiaries
|
2,519.4
|
|
|
(25.3
|
)
|
|
494.4
|
|
|
(2,956.6
|
)
|
|
31.9
|
|
|||||
Unrealized net gain on securities measured at fair value
|
—
|
|
|
—
|
|
|
786.5
|
|
|
—
|
|
|
786.5
|
|
|||||
Net gain on sale of unconsolidated investment
|
—
|
|
|
—
|
|
|
99.8
|
|
|
—
|
|
|
99.8
|
|
|||||
Interest income
|
0.6
|
|
|
—
|
|
|
7.3
|
|
|
—
|
|
|
7.9
|
|
|||||
Intercompany interest income
|
198.4
|
|
|
487.2
|
|
|
3.7
|
|
|
(689.3
|
)
|
|
—
|
|
|||||
Interest expense
|
(240.2
|
)
|
|
(0.9
|
)
|
|
(15.4
|
)
|
|
—
|
|
|
(256.5
|
)
|
|||||
Intercompany interest expense
|
(411.5
|
)
|
|
(148.2
|
)
|
|
(129.6
|
)
|
|
689.3
|
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|||||
Income before income taxes
|
2,068.0
|
|
|
1,037.6
|
|
|
2,443.2
|
|
|
(2,934.0
|
)
|
|
2,614.8
|
|
|||||
(Provision for) benefit from income taxes
|
128.4
|
|
|
(248.4
|
)
|
|
(284.0
|
)
|
|
(1.1
|
)
|
|
(405.1
|
)
|
|||||
Net income
|
2,196.4
|
|
|
789.2
|
|
|
2,159.2
|
|
|
(2,935.1
|
)
|
|
2,209.7
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
|
—
|
|
|
(13.3
|
)
|
|||||
Net income attributable to CBI
|
$
|
2,196.4
|
|
|
$
|
789.2
|
|
|
$
|
2,145.9
|
|
|
$
|
(2,935.1
|
)
|
|
$
|
2,196.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
1,893.4
|
|
|
$
|
788.6
|
|
|
$
|
1,843.1
|
|
|
$
|
(2,631.7
|
)
|
|
$
|
1,893.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2017
|
|||||||||||||||||||
Sales
|
$
|
2,171.4
|
|
|
$
|
5,279.6
|
|
|
$
|
2,638.1
|
|
|
$
|
(3,698.5
|
)
|
|
$
|
6,390.6
|
|
Excise taxes
|
(263.2
|
)
|
|
(299.7
|
)
|
|
(9.4
|
)
|
|
—
|
|
|
(572.3
|
)
|
|||||
Net sales
|
1,908.2
|
|
|
4,979.9
|
|
|
2,628.7
|
|
|
(3,698.5
|
)
|
|
5,818.3
|
|
|||||
Cost of product sold
|
(1,524.4
|
)
|
|
(3,686.0
|
)
|
|
(1,350.6
|
)
|
|
3,710.0
|
|
|
(2,851.0
|
)
|
|||||
Gross profit
|
383.8
|
|
|
1,293.9
|
|
|
1,278.1
|
|
|
11.5
|
|
|
2,967.3
|
|
|||||
Selling, general and administrative expenses
|
(347.1
|
)
|
|
(661.0
|
)
|
|
(202.1
|
)
|
|
10.9
|
|
|
(1,199.3
|
)
|
|||||
Operating income
|
36.7
|
|
|
632.9
|
|
|
1,076.0
|
|
|
22.4
|
|
|
1,768.0
|
|
|||||
Equity in earnings (losses) of equity method investees and subsidiaries
|
1,524.8
|
|
|
(14.6
|
)
|
|
366.6
|
|
|
(1,844.0
|
)
|
|
32.8
|
|
|||||
Unrealized net gain on securities measured at fair value and related activities
|
—
|
|
|
—
|
|
|
216.9
|
|
|
—
|
|
|
216.9
|
|
|||||
Interest income
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.4
|
|
|||||
Intercompany interest income
|
177.1
|
|
|
365.2
|
|
|
3.3
|
|
|
(545.6
|
)
|
|
—
|
|
|||||
Interest expense
|
(198.6
|
)
|
|
(0.9
|
)
|
|
(46.0
|
)
|
|
—
|
|
|
(245.5
|
)
|
|||||
Intercompany interest expense
|
(293.1
|
)
|
|
(147.2
|
)
|
|
(105.3
|
)
|
|
545.6
|
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
(7.0
|
)
|
|
—
|
|
|
(12.1
|
)
|
|
—
|
|
|
(19.1
|
)
|
|||||
Income before income taxes
|
1,240.0
|
|
|
835.4
|
|
|
1,499.7
|
|
|
(1,821.6
|
)
|
|
1,753.5
|
|
|||||
(Provision for) benefit from income taxes
|
152.9
|
|
|
(292.0
|
)
|
|
(188.1
|
)
|
|
(24.8
|
)
|
|
(352.0
|
)
|
|||||
Net income
|
1,392.9
|
|
|
543.4
|
|
|
1,311.6
|
|
|
(1,846.4
|
)
|
|
1,401.5
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(8.6
|
)
|
|
—
|
|
|
(8.6
|
)
|
|||||
Net income attributable to CBI
|
$
|
1,392.9
|
|
|
$
|
543.4
|
|
|
$
|
1,303.0
|
|
|
$
|
(1,846.4
|
)
|
|
$
|
1,392.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
1,583.7
|
|
|
$
|
543.2
|
|
|
$
|
1,498.0
|
|
|
$
|
(2,041.2
|
)
|
|
$
|
1,583.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2018
|
|||||||||||||||||||
Sales
|
$
|
772.0
|
|
|
$
|
1,763.7
|
|
|
$
|
886.9
|
|
|
$
|
(1,262.0
|
)
|
|
$
|
2,160.6
|
|
Excise taxes
|
(89.8
|
)
|
|
(94.9
|
)
|
|
(3.3
|
)
|
|
—
|
|
|
(188.0
|
)
|
|||||
Net sales
|
682.2
|
|
|
1,668.8
|
|
|
883.6
|
|
|
(1,262.0
|
)
|
|
1,972.6
|
|
|||||
Cost of product sold
|
(530.4
|
)
|
|
(1,242.6
|
)
|
|
(490.5
|
)
|
|
1,260.9
|
|
|
(1,002.6
|
)
|
|||||
Gross profit
|
151.8
|
|
|
426.2
|
|
|
393.1
|
|
|
(1.1
|
)
|
|
970.0
|
|
|||||
Selling, general and administrative expenses
|
(153.9
|
)
|
|
(199.4
|
)
|
|
(65.8
|
)
|
|
5.6
|
|
|
(413.5
|
)
|
|||||
Operating income (loss)
|
(2.1
|
)
|
|
226.8
|
|
|
327.3
|
|
|
4.5
|
|
|
556.5
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
373.5
|
|
|
0.7
|
|
|
167.7
|
|
|
(512.6
|
)
|
|
29.3
|
|
|||||
Unrealized net loss on securities measured at fair value
|
—
|
|
|
—
|
|
|
(163.9
|
)
|
|
—
|
|
|
(163.9
|
)
|
|||||
Interest income
|
0.5
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
4.4
|
|
|||||
Intercompany interest income
|
63.1
|
|
|
165.7
|
|
|
1.3
|
|
|
(230.1
|
)
|
|
—
|
|
|||||
Interest expense
|
(75.6
|
)
|
|
(0.4
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(77.2
|
)
|
|||||
Intercompany interest expense
|
(140.5
|
)
|
|
(49.2
|
)
|
|
(40.4
|
)
|
|
230.1
|
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|||||
Income before income taxes
|
217.2
|
|
|
343.6
|
|
|
294.7
|
|
|
(508.1
|
)
|
|
347.4
|
|
|||||
(Provision for) benefit from income taxes
|
85.9
|
|
|
(80.5
|
)
|
|
(37.6
|
)
|
|
(3.1
|
)
|
|
(35.3
|
)
|
|||||
Net income
|
303.1
|
|
|
263.1
|
|
|
257.1
|
|
|
(511.2
|
)
|
|
312.1
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(9.0
|
)
|
|
—
|
|
|
(9.0
|
)
|
|||||
Net income attributable to CBI
|
$
|
303.1
|
|
|
$
|
263.1
|
|
|
$
|
248.1
|
|
|
$
|
(511.2
|
)
|
|
$
|
303.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
101.8
|
|
|
$
|
263.1
|
|
|
$
|
46.8
|
|
|
$
|
(309.9
|
)
|
|
$
|
101.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2017
|
|||||||||||||||||||
Sales
|
$
|
756.3
|
|
|
$
|
1,585.8
|
|
|
$
|
795.6
|
|
|
$
|
(1,156.0
|
)
|
|
$
|
1,981.7
|
|
Excise taxes
|
(89.2
|
)
|
|
(87.1
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
(179.8
|
)
|
|||||
Net sales
|
667.1
|
|
|
1,498.7
|
|
|
792.1
|
|
|
(1,156.0
|
)
|
|
1,801.9
|
|
|||||
Cost of product sold
|
(537.9
|
)
|
|
(1,111.3
|
)
|
|
(397.4
|
)
|
|
1,155.0
|
|
|
(891.6
|
)
|
|||||
Gross profit
|
129.2
|
|
|
387.4
|
|
|
394.7
|
|
|
(1.0
|
)
|
|
910.3
|
|
|||||
Selling, general and administrative expenses
|
(130.8
|
)
|
|
(186.9
|
)
|
|
(108.1
|
)
|
|
5.1
|
|
|
(420.7
|
)
|
|||||
Operating income (loss)
|
(1.6
|
)
|
|
200.5
|
|
|
286.6
|
|
|
4.1
|
|
|
489.6
|
|
|||||
Equity in earnings of equity method investees and subsidiaries
|
551.7
|
|
|
8.8
|
|
|
122.1
|
|
|
(650.4
|
)
|
|
32.2
|
|
|||||
Unrealized net gain on securities measured at fair value and related activities
|
—
|
|
|
—
|
|
|
216.9
|
|
|
—
|
|
|
216.9
|
|
|||||
Interest income
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|||||
Intercompany interest income
|
60.3
|
|
|
125.2
|
|
|
0.9
|
|
|
(186.4
|
)
|
|
—
|
|
|||||
Interest expense
|
(69.5
|
)
|
|
(0.4
|
)
|
|
(11.7
|
)
|
|
—
|
|
|
(81.6
|
)
|
|||||
Intercompany interest expense
|
(101.4
|
)
|
|
(48.7
|
)
|
|
(36.3
|
)
|
|
186.4
|
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
(10.3
|
)
|
|
—
|
|
|
(10.3
|
)
|
|||||
Income before income taxes
|
439.6
|
|
|
285.4
|
|
|
568.3
|
|
|
(646.3
|
)
|
|
647.0
|
|
|||||
(Provision for) benefit from income taxes
|
53.2
|
|
|
(99.0
|
)
|
|
(102.8
|
)
|
|
(2.0
|
)
|
|
(150.6
|
)
|
|||||
Net income
|
492.8
|
|
|
186.4
|
|
|
465.5
|
|
|
(648.3
|
)
|
|
496.4
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
|
—
|
|
|
(3.6
|
)
|
|||||
Net income attributable to CBI
|
$
|
492.8
|
|
|
$
|
186.4
|
|
|
$
|
461.9
|
|
|
$
|
(648.3
|
)
|
|
$
|
492.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to CBI
|
$
|
371.2
|
|
|
$
|
188.2
|
|
|
$
|
338.6
|
|
|
$
|
(526.8
|
)
|
|
$
|
371.2
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2018
|
|||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(18.5
|
)
|
|
$
|
628.5
|
|
|
$
|
1,363.9
|
|
|
$
|
—
|
|
|
$
|
1,973.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments in equity method investees and securities
|
—
|
|
|
(0.1
|
)
|
|
(4,077.2
|
)
|
|
—
|
|
|
(4,077.3
|
)
|
|||||
Purchases of property, plant and equipment
|
(23.4
|
)
|
|
(79.4
|
)
|
|
(517.5
|
)
|
|
—
|
|
|
(620.3
|
)
|
|||||
Purchases of businesses, net of cash acquired
|
—
|
|
|
(19.5
|
)
|
|
(25.8
|
)
|
|
—
|
|
|
(45.3
|
)
|
|||||
Proceeds from sale of unconsolidated investment
|
—
|
|
|
—
|
|
|
110.2
|
|
|
—
|
|
|
110.2
|
|
|||||
Proceeds from sales of assets
|
0.5
|
|
|
39.4
|
|
|
6.4
|
|
|
—
|
|
|
46.3
|
|
|||||
Net proceeds from intercompany notes
|
694.0
|
|
|
—
|
|
|
—
|
|
|
(694.0
|
)
|
|
—
|
|
|||||
Net investment in equity affiliates
|
(3,934.9
|
)
|
|
(11.1
|
)
|
|
—
|
|
|
3,946.0
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
|||||
Net cash used in investing activities
|
(3,263.8
|
)
|
|
(70.7
|
)
|
|
(4,504.8
|
)
|
|
3,252.0
|
|
|
(4,587.3
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid
to parent company
|
—
|
|
|
—
|
|
|
(36.5
|
)
|
|
36.5
|
|
|
—
|
|
|||||
Net contributions from equity affiliates
|
—
|
|
|
28.8
|
|
|
3,953.7
|
|
|
(3,982.5
|
)
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
206.9
|
|
|
(562.6
|
)
|
|
(338.3
|
)
|
|
694.0
|
|
|
—
|
|
|||||
Proceeds from issuance of long-term debt
|
3,645.6
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
3,657.6
|
|
|||||
Proceeds from shares issued under equity compensation plans
|
32.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.6
|
|
|||||
Purchases of treasury stock
|
(504.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(504.3
|
)
|
|||||
Dividends paid
|
(417.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(417.9
|
)
|
|||||
Principal payments of long-term debt
|
(6.2
|
)
|
|
(13.2
|
)
|
|
(25.9
|
)
|
|
—
|
|
|
(45.3
|
)
|
|||||
Payments of debt issuance costs
|
(33.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.3
|
)
|
|||||
Net proceeds from (repayments of) short-term borrowings
|
359.7
|
|
|
—
|
|
|
(374.2
|
)
|
|
—
|
|
|
(14.5
|
)
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(12.8
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(13.6
|
)
|
|||||
Net cash provided by (used in) financing activities
|
3,283.1
|
|
|
(559.8
|
)
|
|
3,190.0
|
|
|
(3,252.0
|
)
|
|
2,661.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
|
—
|
|
|
(7.6
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
0.8
|
|
|
(2.0
|
)
|
|
41.5
|
|
|
—
|
|
|
40.3
|
|
|||||
Cash and cash equivalents, beginning of period
|
4.6
|
|
|
4.4
|
|
|
81.3
|
|
|
—
|
|
|
90.3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
5.4
|
|
|
$
|
2.4
|
|
|
$
|
122.8
|
|
|
$
|
—
|
|
|
$
|
130.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2017
|
|||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(315.2
|
)
|
|
$
|
1,060.7
|
|
|
$
|
722.9
|
|
|
$
|
—
|
|
|
$
|
1,468.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in securities
|
—
|
|
|
—
|
|
|
(191.3
|
)
|
|
—
|
|
|
(191.3
|
)
|
|||||
Purchases of property, plant and equipment
|
(15.4
|
)
|
|
(83.9
|
)
|
|
(606.3
|
)
|
|
—
|
|
|
(705.6
|
)
|
|||||
Purchases of businesses, net of cash acquired
|
—
|
|
|
(70.9
|
)
|
|
(61.0
|
)
|
|
—
|
|
|
(131.9
|
)
|
|||||
Proceeds from sales of assets
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|||||
Net proceeds from intercompany notes
|
134.5
|
|
|
—
|
|
|
2.8
|
|
|
(137.3
|
)
|
|
—
|
|
|||||
Net investments in equity affiliates
|
(1,350.6
|
)
|
|
—
|
|
|
—
|
|
|
1,350.6
|
|
|
—
|
|
|||||
Other investing activities
|
(6.2
|
)
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
(10.7
|
)
|
|||||
Net cash used in investing activities
|
(1,237.7
|
)
|
|
(154.8
|
)
|
|
(859.1
|
)
|
|
1,213.3
|
|
|
(1,038.3
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid to parent company
|
—
|
|
|
—
|
|
|
(33.0
|
)
|
|
33.0
|
|
|
—
|
|
|||||
Net contributions from (returns of capital to) equity affiliates
|
—
|
|
|
(0.2
|
)
|
|
1,383.8
|
|
|
(1,383.6
|
)
|
|
—
|
|
|||||
Net proceeds from (repayments of) intercompany notes
|
(11.6
|
)
|
|
(871.9
|
)
|
|
746.2
|
|
|
137.3
|
|
|
—
|
|
|||||
Proceeds from issuance of long-term debt
|
3,990.4
|
|
|
—
|
|
|
2,027.5
|
|
|
—
|
|
|
6,017.9
|
|
|||||
Proceeds from shares issued under equity compensation plans
|
37.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37.5
|
|
|||||
Purchases of treasury stock
|
(239.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(239.2
|
)
|
|||||
Dividends paid
|
(301.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(301.1
|
)
|
|||||
Principal payments of long-term debt
|
(2,116.6
|
)
|
|
(14.5
|
)
|
|
(4,391.7
|
)
|
|
—
|
|
|
(6,522.8
|
)
|
|||||
Payments of debt issuance costs
|
(28.9
|
)
|
|
—
|
|
|
(3.5
|
)
|
|
—
|
|
|
(32.4
|
)
|
|||||
Net proceeds from short-term borrowings
|
238.6
|
|
|
—
|
|
|
366.3
|
|
|
—
|
|
|
604.9
|
|
|||||
Payments of minimum tax withholdings on stock-based payment awards
|
—
|
|
|
(21.9
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
(22.9
|
)
|
|||||
Net cash provided by (used in) financing activities
|
1,569.1
|
|
|
(908.5
|
)
|
|
94.6
|
|
|
(1,213.3
|
)
|
|
(458.1
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
and cash equivalents
|
—
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
16.2
|
|
|
(2.6
|
)
|
|
(36.5
|
)
|
|
—
|
|
|
(22.9
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
9.6
|
|
|
5.3
|
|
|
162.5
|
|
|
—
|
|
|
177.4
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
25.8
|
|
|
$
|
2.7
|
|
|
$
|
126.0
|
|
|
$
|
—
|
|
|
$
|
154.5
|
|
|
For the Nine Months Ended November 30,
|
|
For the Three Months Ended November 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Cost of product sold
|
|
|
|
|
|
|
|
||||||||
Settlements of undesignated commodity derivative contracts
|
$
|
(7.3
|
)
|
|
$
|
4.6
|
|
|
$
|
(2.2
|
)
|
|
$
|
(0.1
|
)
|
Accelerated depreciation
|
(6.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
||||
Net gain (loss) on undesignated commodity derivative contracts
|
(5.1
|
)
|
|
4.3
|
|
|
(14.7
|
)
|
|
3.5
|
|
||||
Flow through of inventory step-up
|
(3.6
|
)
|
|
(17.0
|
)
|
|
(2.2
|
)
|
|
(7.2
|
)
|
||||
Loss on inventory write-down
|
(2.8
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
||||
Total cost of product sold
|
(25.3
|
)
|
|
(8.1
|
)
|
|
(21.9
|
)
|
|
(3.8
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
||||||||
Net loss on foreign currency derivative contracts associated with acquisition of investment
|
(32.6
|
)
|
|
—
|
|
|
(25.5
|
)
|
|
—
|
|
||||
Deferred compensation
|
(16.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restructuring and other strategic business development costs
|
(10.9
|
)
|
|
(7.5
|
)
|
|
(2.3
|
)
|
|
(4.1
|
)
|
||||
Transaction, integration and other acquisition-related costs
|
(9.1
|
)
|
|
(6.8
|
)
|
|
(8.1
|
)
|
|
(4.5
|
)
|
||||
Impairment of intangible assets
|
—
|
|
|
(86.8
|
)
|
|
—
|
|
|
—
|
|
||||
Loss on contract termination
(1)
|
—
|
|
|
(59.0
|
)
|
|
—
|
|
|
(59.0
|
)
|
||||
Costs associated with the sale of the Canadian wine business and related activities
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
||||
Other gains
(2)
|
10.9
|
|
|
11.5
|
|
|
2.4
|
|
|
8.1
|
|
||||
Total selling, general and administrative expenses
|
(58.0
|
)
|
|
(151.8
|
)
|
|
(33.5
|
)
|
|
(59.5
|
)
|
||||
Comparable Adjustments, Operating loss
|
$
|
(83.3
|
)
|
|
$
|
(159.9
|
)
|
|
$
|
(55.4
|
)
|
|
$
|
(63.3
|
)
|
(1)
|
Represents a loss incurred in connection with the early termination of a beer glass supply contract with Owens-Illinois.
|
(2)
|
Includes a gain of
$8.5 million
for the nine months ended November 30, 2018, in connection with the sale of certain non-core assets and a gain of
$8.1 million
for the nine months and three months ended November 30, 2017, in connection with the reduction in estimated fair value of a contingent liability associated with a prior period acquisition.
|
|
For the Nine Months Ended November 30,
|
|
For the Three Months Ended November 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Beer
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
4,112.0
|
|
|
$
|
3,663.4
|
|
|
$
|
1,209.8
|
|
|
$
|
1,042.5
|
|
Segment operating income
|
$
|
1,601.5
|
|
|
$
|
1,461.3
|
|
|
$
|
450.9
|
|
|
$
|
394.8
|
|
Long-lived tangible assets
|
$
|
3,810.1
|
|
|
$
|
3,410.7
|
|
|
$
|
3,810.1
|
|
|
$
|
3,410.7
|
|
Total assets
|
$
|
14,654.6
|
|
|
$
|
12,025.3
|
|
|
$
|
14,654.6
|
|
|
$
|
12,025.3
|
|
Capital expenditures
|
$
|
507.3
|
|
|
$
|
593.7
|
|
|
$
|
211.0
|
|
|
$
|
160.6
|
|
Depreciation and amortization
|
$
|
152.0
|
|
|
$
|
121.6
|
|
|
$
|
51.5
|
|
|
$
|
41.7
|
|
|
|
|
|
|
|
|
|
||||||||
Wine and Spirits
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Wine
|
$
|
1,933.1
|
|
|
$
|
1,882.7
|
|
|
$
|
670.3
|
|
|
$
|
666.6
|
|
Spirits
|
273.7
|
|
|
272.2
|
|
|
92.5
|
|
|
92.8
|
|
||||
Net sales
|
$
|
2,206.8
|
|
|
$
|
2,154.9
|
|
|
$
|
762.8
|
|
|
$
|
759.4
|
|
Segment operating income
|
$
|
575.2
|
|
|
$
|
586.8
|
|
|
$
|
206.0
|
|
|
$
|
199.4
|
|
Income from unconsolidated investments
|
$
|
32.2
|
|
|
$
|
32.3
|
|
|
$
|
28.4
|
|
|
$
|
32.1
|
|
Long-lived tangible assets
|
$
|
1,093.5
|
|
|
$
|
1,024.7
|
|
|
$
|
1,093.5
|
|
|
$
|
1,024.7
|
|
Equity method investments
|
$
|
97.8
|
|
|
$
|
97.3
|
|
|
$
|
97.8
|
|
|
$
|
97.3
|
|
Total assets
|
$
|
7,366.0
|
|
|
$
|
7,268.7
|
|
|
$
|
7,366.0
|
|
|
$
|
7,268.7
|
|
Capital expenditures
|
$
|
91.1
|
|
|
$
|
98.2
|
|
|
$
|
32.3
|
|
|
$
|
35.2
|
|
Depreciation and amortization
|
$
|
73.4
|
|
|
$
|
69.9
|
|
|
$
|
24.2
|
|
|
$
|
24.1
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate Operations and Other
|
|
|
|
|
|
|
|
||||||||
Segment operating loss
|
$
|
(146.5
|
)
|
|
$
|
(120.2
|
)
|
|
$
|
(45.0
|
)
|
|
$
|
(41.3
|
)
|
Income (loss) from unconsolidated investments
|
$
|
(0.3
|
)
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
|
$
|
0.1
|
|
Long-lived tangible assets
|
$
|
82.7
|
|
|
$
|
115.6
|
|
|
$
|
82.7
|
|
|
$
|
115.6
|
|
Equity method investments
|
$
|
3,485.2
|
|
|
$
|
21.6
|
|
|
$
|
3,485.2
|
|
|
$
|
21.6
|
|
Total assets
|
$
|
5,869.8
|
|
|
$
|
813.1
|
|
|
$
|
5,869.8
|
|
|
$
|
813.1
|
|
Capital expenditures
|
$
|
21.9
|
|
|
$
|
13.7
|
|
|
$
|
6.4
|
|
|
$
|
4.7
|
|
Depreciation and amortization
|
$
|
22.7
|
|
|
$
|
27.3
|
|
|
$
|
5.6
|
|
|
$
|
9.2
|
|
|
|
|
|
|
|
|
|
||||||||
Comparable Adjustments
|
|
|
|
|
|
|
|
||||||||
Operating loss
|
$
|
(83.3
|
)
|
|
$
|
(159.9
|
)
|
|
$
|
(55.4
|
)
|
|
$
|
(63.3
|
)
|
Income (loss) from unconsolidated investments
|
$
|
886.3
|
|
|
$
|
216.9
|
|
|
$
|
(163.9
|
)
|
|
$
|
216.9
|
|
Depreciation and amortization
|
$
|
6.5
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
6,318.8
|
|
|
$
|
5,818.3
|
|
|
$
|
1,972.6
|
|
|
$
|
1,801.9
|
|
Operating income
|
$
|
1,946.9
|
|
|
$
|
1,768.0
|
|
|
$
|
556.5
|
|
|
$
|
489.6
|
|
Income (loss) from unconsolidated investments
(1)
|
$
|
918.2
|
|
|
$
|
249.7
|
|
|
$
|
(134.6
|
)
|
|
$
|
249.1
|
|
Long-lived tangible assets
|
$
|
4,986.3
|
|
|
$
|
4,551.0
|
|
|
$
|
4,986.3
|
|
|
$
|
4,551.0
|
|
Equity method investments
|
$
|
3,583.0
|
|
|
$
|
118.9
|
|
|
$
|
3,583.0
|
|
|
$
|
118.9
|
|
Total assets
|
$
|
27,890.4
|
|
|
$
|
20,107.1
|
|
|
$
|
27,890.4
|
|
|
$
|
20,107.1
|
|
Capital expenditures
|
$
|
620.3
|
|
|
$
|
705.6
|
|
|
$
|
249.7
|
|
|
$
|
200.5
|
|
Depreciation and amortization
|
$
|
254.6
|
|
|
$
|
218.8
|
|
|
$
|
82.8
|
|
|
$
|
75.0
|
|
|
For the Nine Months Ended
|
|
For the Three Months Ended
|
||||||||||||
|
November 30,
2018 |
|
November 30,
2017 |
|
November 30,
2018 |
|
November 30,
2017 |
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Unrealized net gain (loss) on securities measured at fair value and related activities
|
$
|
786.5
|
|
|
$
|
216.8
|
|
|
$
|
(163.9
|
)
|
|
$
|
216.8
|
|
Net gain on sale of unconsolidated investment
|
99.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Equity in earnings from equity method investees
|
31.9
|
|
|
32.8
|
|
|
29.3
|
|
|
32.2
|
|
||||
Net gain on foreign currency derivative contracts associated with November 2017 Canopy securities measured at fair value
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
|
$
|
918.2
|
|
|
$
|
249.7
|
|
|
$
|
(134.6
|
)
|
|
$
|
249.1
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Overview.
This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition and potential future trends.
|
•
|
Strategy.
This section provides a description of our strategy, including a discussion of investments and acquisitions.
|
•
|
Results of operations.
This section provides an analysis of our results of operations presented on a business segment basis for the
three months ended
November 30, 2018
(“
Third Quarter 2019
”), and
November 30, 2017
(“
Third Quarter 2018
”), and the
nine months ended
November 30, 2018
(“
Nine Months 2019
”), and
November 30, 2017
(“
Nine Months 2018
”). In addition, a brief description of transactions and other items that affect the comparability of the results is provided.
|
•
|
Financial liquidity and capital resources.
This section provides an analysis of our cash flows and a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments, as well as a discussion of other financing arrangements.
|
•
|
leveraging our leading position in total beverage alcohol and our scale with wholesalers and retailers to expand distribution of our product portfolio and to provide for cross promotional opportunities;
|
•
|
strengthening relationships with wholesalers and retailers by providing consumer and beverage alcohol insights;
|
•
|
investing in brand building activities;
|
•
|
positioning ourselves for success with consumer-led innovation capabilities that identify, meet and stay ahead of evolving consumer trends and market dynamics;
|
•
|
realizing operating efficiencies through expanding and enhancing production capabilities and maximizing asset utilization; and
|
•
|
developing employees to enhance performance in the marketplace.
|
Date of
Investment
|
|
Investment
Acquired
|
|
Purchase
Price
|
|
Method of
Accounting
|
||
(in millions)
|
|
|
|
|
|
|
||
Nov 2017
|
|
Common shares
|
|
$
|
130.1
|
|
|
Fair value / equity method
(1)
|
Nov 2017
|
|
Warrants
|
|
61.2
|
|
|
Fair value
|
|
|
|
|
|
$
|
191.3
|
|
|
|
|
|
|
|
|
|
|
||
June 2018
|
|
Convertible debt securities
|
|
$
|
150.5
|
|
|
Fair value
|
|
|
|
|
|
|
|
||
Nov 2018
|
|
Common shares
|
|
$
|
2,740.3
|
|
|
Equity method
|
Nov 2018
|
|
Warrants
|
|
1,146.8
|
|
|
Fair value
|
|
|
|
|
|
$
|
3,887.1
|
|
(2)
|
Date of
Investment
|
|
Investment
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Nine
Months 2019 |
|
Nine
Months 2018 |
||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||||
Nov 2017
|
|
Common shares
(1)
|
$
|
(168.5
|
)
|
|
$
|
139.7
|
|
|
$
|
292.5
|
|
|
$
|
139.7
|
|
Nov 2017
|
|
Warrants
|
(212.4
|
)
|
|
77.1
|
|
|
223.5
|
|
|
77.1
|
|
||||
June 2018
|
|
Convertible debt securities
|
(40.6
|
)
|
|
—
|
|
|
12.9
|
|
|
—
|
|
||||
Nov 2018
|
|
Warrants
|
257.6
|
|
|
—
|
|
|
257.6
|
|
|
—
|
|
||||
|
|
|
$
|
(163.9
|
)
|
|
$
|
216.8
|
|
|
$
|
786.5
|
|
|
$
|
216.8
|
|
(1)
|
Accounted for at fair value from the date of investment in November 2017 through October 31, 2018. Accounted for under the equity method from November 1, 2018 (refer to Note 8 of the Financial Statements).
|
(2)
|
I
ncludes $17.2 million of direct acquisition costs capitalized under the equity method cost accumulation model. Excludes $7.3 million of direct acquisition costs associated with the investment in warrants which are expensed as incurred in selling, general and administrative expenses. See “Financial Liquidity and Capital Resources
–
General” for a discussion of financing for this transaction.
|
•
|
Our results of operations benefited primarily from continued improvements in the Beer segment, partially offset by an unrealized net loss from the changes in fair value of our investments in Canopy
.
|
•
|
Net sales
increased
9%
primarily due to an i
ncrease in Beer net sales driven predominantly by volume growth within our Mexican beer portfolio.
|
•
|
Operating income
increased
14%
largely due to the Beer net sales volume growth and a favorable impact from pricing within our Mexican beer portfolio, combined with lower selling, general and administrative expenses within Wine and Spirits.
|
•
|
Net income a
ttributable to CBI and diluted net income per common share attributable to CBI
decreased
primarily due to an unrealized net loss from the changes in fair value of our investments in Canopy for
Third Quarter 2019
as compared with an unrealized net gain for
Third Quarter 2018
.
|
•
|
Our results of operations benefited primarily from continued improvements within the Beer segment, an unrealized net gain from the changes in fair value of our investments in Canopy and a net gain on the sale of the Accolade Wine Investment.
|
•
|
Net sales
increased
9%
primarily due to an increase in Beer net sales driven predominantly by volume growth and a favorable impact from pricing within our Mexican beer portfolio.
|
•
|
Operating income
increased
10%
largely
due to the net sales volume growth and favorable impact from pricing within our Mexican beer portfolio, and the overlap of an impairment of intangible assets for the
|
•
|
Net income attributable to CBI and diluted net income per common share attributable to CBI
increased
significantly primarily due to the factors discussed above.
|
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Nine
Months 2019 |
|
Nine
Months 2018 |
||||||||
(in millions)
|
|
|
|
|
|
|
|
||||||||
Cost of product sold
|
|
|
|
|
|
|
|
||||||||
Net gain (loss) on undesignated commodity derivative contracts
|
$
|
(14.7
|
)
|
|
$
|
3.5
|
|
|
$
|
(5.1
|
)
|
|
$
|
4.3
|
|
Settlements of undesignated commodity derivative contracts
|
(2.2
|
)
|
|
(0.1
|
)
|
|
(7.3
|
)
|
|
4.6
|
|
||||
Flow through of inventory step-up
|
(2.2
|
)
|
|
(7.2
|
)
|
|
(3.6
|
)
|
|
(17.0
|
)
|
||||
Accelerated depreciation
|
(1.5
|
)
|
|
—
|
|
|
(6.5
|
)
|
|
—
|
|
||||
Loss on inventory write-down
|
(1.3
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
—
|
|
||||
Total cost of product sold
|
(21.9
|
)
|
|
(3.8
|
)
|
|
(25.3
|
)
|
|
(8.1
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
||||||||
Net loss on foreign currency derivative contracts associated with acquisition of investment
|
(25.5
|
)
|
|
—
|
|
|
(32.6
|
)
|
|
—
|
|
||||
Transaction, integration and other acquisition-related costs
|
(8.1
|
)
|
|
(4.5
|
)
|
|
(9.1
|
)
|
|
(6.8
|
)
|
||||
Restructuring and other strategic business development costs
|
(2.3
|
)
|
|
(4.1
|
)
|
|
(10.9
|
)
|
|
(7.5
|
)
|
||||
Deferred compensation
|
—
|
|
|
—
|
|
|
(16.3
|
)
|
|
—
|
|
||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(86.8
|
)
|
||||
Loss on contract termination
|
—
|
|
|
(59.0
|
)
|
|
—
|
|
|
(59.0
|
)
|
||||
Costs associated with the sale of the Canadian wine business and related activities
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
||||
Other gains
|
2.4
|
|
|
8.1
|
|
|
10.9
|
|
|
11.5
|
|
||||
Total selling, general and administrative expenses
|
(33.5
|
)
|
|
(59.5
|
)
|
|
(58.0
|
)
|
|
(151.8
|
)
|
||||
Comparable Adjustments, Operating loss
|
$
|
(55.4
|
)
|
|
$
|
(63.3
|
)
|
|
$
|
(83.3
|
)
|
|
$
|
(159.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from unconsolidated investments
|
$
|
(163.9
|
)
|
|
$
|
216.9
|
|
|
$
|
886.3
|
|
|
$
|
216.9
|
|
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
1,209.8
|
|
|
$
|
1,042.5
|
|
|
$
|
167.3
|
|
|
16
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|
|
|||||||
Wine
|
670.3
|
|
|
666.6
|
|
|
3.7
|
|
|
1
|
%
|
|||
Spirits
|
92.5
|
|
|
92.8
|
|
|
(0.3
|
)
|
|
—
|
%
|
|||
Total Wine and Spirits
|
762.8
|
|
|
759.4
|
|
|
3.4
|
|
|
—
|
%
|
|||
Consolidated net sales
|
$
|
1,972.6
|
|
|
$
|
1,801.9
|
|
|
$
|
170.7
|
|
|
9
|
%
|
Beer Segment
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 24-pack, 12-ounce case equivalents)
|
||||||||||||||
Net sales
|
$
|
1,209.8
|
|
|
$
|
1,042.5
|
|
|
$
|
167.3
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
|
68.0
|
|
|
59.6
|
|
|
|
|
|
14.1
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(1)
|
|
|
|
|
|
|
7.8
|
%
|
(1)
|
Depletions represent distributor shipments of our respective branded products to retail customers, based on third-party data.
|
Wine and Spirits Segment
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 9-liter case equivalents)
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
762.8
|
|
|
$
|
759.4
|
|
|
$
|
3.4
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
|
|
|
|
|
|
|
|
|||||||
Total
|
14.8
|
|
|
14.8
|
|
|
|
|
—
|
%
|
||||
U.S. Domestic
|
13.8
|
|
|
13.6
|
|
|
|
|
1.5
|
%
|
||||
U.S. Domestic Focus Brands
|
8.3
|
|
|
8.3
|
|
|
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(1)
|
|
|
|
|
|
|
|
|||||||
U.S. Domestic
|
|
|
|
|
|
|
(3.2
|
%)
|
||||||
U.S. Domestic Focus Brands
|
|
|
|
|
|
|
0.3
|
%
|
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
651.0
|
|
|
$
|
569.4
|
|
|
$
|
81.6
|
|
|
14
|
%
|
Wine and Spirits
|
340.9
|
|
|
344.7
|
|
|
(3.8
|
)
|
|
(1
|
%)
|
|||
Comparable Adjustments
|
(21.9
|
)
|
|
(3.8
|
)
|
|
(18.1
|
)
|
|
NM
|
|
|||
Consolidated gross profit
|
$
|
970.0
|
|
|
$
|
910.3
|
|
|
$
|
59.7
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|||||||
NM = Not meaningful
|
|
|
|
|
|
|
|
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
200.1
|
|
|
$
|
174.6
|
|
|
$
|
25.5
|
|
|
15
|
%
|
Wine and Spirits
|
134.9
|
|
|
145.3
|
|
|
(10.4
|
)
|
|
(7
|
%)
|
|||
Corporate Operations and Other
|
45.0
|
|
|
41.3
|
|
|
3.7
|
|
|
9
|
%
|
|||
Comparable Adjustments
|
33.5
|
|
|
59.5
|
|
|
(26.0
|
)
|
|
(44
|
%)
|
|||
Consolidated selling, general and administrative expenses
|
$
|
413.5
|
|
|
$
|
420.7
|
|
|
$
|
(7.2
|
)
|
|
(2
|
%)
|
|
Third
Quarter 2019 |
|
Third
Quarter 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
450.9
|
|
|
$
|
394.8
|
|
|
$
|
56.1
|
|
|
14
|
%
|
Wine and Spirits
|
206.0
|
|
|
199.4
|
|
|
6.6
|
|
|
3
|
%
|
|||
Corporate Operations and Other
|
(45.0
|
)
|
|
(41.3
|
)
|
|
(3.7
|
)
|
|
(9
|
%)
|
|||
Comparable Adjustments
|
(55.4
|
)
|
|
(63.3
|
)
|
|
7.9
|
|
|
(12
|
%)
|
|||
Consolidated operating income
|
$
|
556.5
|
|
|
$
|
489.6
|
|
|
$
|
66.9
|
|
|
14
|
%
|
•
|
The new, lower federal statutory rate of 21% for
Third Quarter 2019
associated with the December 2017 TCJ Act, as compared to the federal statutory rate of 35% in effect for
Third Quarter 2018
;
|
•
|
The recognition of an income tax benefit upon the completion of our analysis of the income tax implications of the TCJ Act for
Third Quarter 2019
resulting from a decrease in the mandatory one-time transition tax on unremitted earnings of our foreign businesses; and
|
•
|
A larger net income tax benefit from higher stock-based compensation award activity for
Third Quarter 2019
from increased option exercise activity.
|
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
4,112.0
|
|
|
$
|
3,663.4
|
|
|
$
|
448.6
|
|
|
12
|
%
|
Wine and Spirits:
|
|
|
|
|
|
|
|
|||||||
Wine
|
1,933.1
|
|
|
1,882.7
|
|
|
50.4
|
|
|
3
|
%
|
|||
Spirits
|
273.7
|
|
|
272.2
|
|
|
1.5
|
|
|
1
|
%
|
|||
Total Wine and Spirits
|
2,206.8
|
|
|
2,154.9
|
|
|
51.9
|
|
|
2
|
%
|
|||
Consolidated net sales
|
$
|
6,318.8
|
|
|
$
|
5,818.3
|
|
|
$
|
500.5
|
|
|
9
|
%
|
Beer Segment
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 24-pack, 12-ounce case equivalents)
|
||||||||||||||
Net sales
|
$
|
4,112.0
|
|
|
$
|
3,663.4
|
|
|
$
|
448.6
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
|
233.2
|
|
|
211.6
|
|
|
|
|
10.2
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(1)
|
|
|
|
|
|
|
9.0
|
%
|
(1)
|
Depletions represent distributor shipments of our respective branded products to retail customers, based on third-party data.
|
Wine and Spirits Segment
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions, branded product, 9-liter case equivalents)
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
2,206.8
|
|
|
$
|
2,154.9
|
|
|
$
|
51.9
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|||||||
Shipment volume
|
|
|
|
|
|
|
|
|||||||
Total
|
44.3
|
|
|
43.4
|
|
|
|
|
2.1
|
%
|
||||
U.S. Domestic
|
41.1
|
|
|
40.1
|
|
|
|
|
2.5
|
%
|
||||
U.S. Domestic Focus Brands
|
25.5
|
|
|
24.3
|
|
|
|
|
4.9
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||
Depletion volume
(1)
|
|
|
|
|
|
|
|
|||||||
U.S. Domestic
|
|
|
|
|
|
|
(2.1
|
%)
|
||||||
U.S. Domestic Focus Brands
|
|
|
|
|
|
|
1.1
|
%
|
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
2,243.8
|
|
|
$
|
1,999.7
|
|
|
$
|
244.1
|
|
|
12
|
%
|
Wine and Spirits
|
968.3
|
|
|
975.7
|
|
|
(7.4
|
)
|
|
(1
|
%)
|
|||
Comparable Adjustments
|
(25.3
|
)
|
|
(8.1
|
)
|
|
(17.2
|
)
|
|
NM
|
|
|||
Consolidated gross profit
|
$
|
3,186.8
|
|
|
$
|
2,967.3
|
|
|
$
|
219.5
|
|
|
7
|
%
|
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
642.3
|
|
|
$
|
538.4
|
|
|
$
|
103.9
|
|
|
19
|
%
|
Wine and Spirits
|
393.1
|
|
|
388.9
|
|
|
4.2
|
|
|
1
|
%
|
|||
Corporate Operations and Other
|
146.5
|
|
|
120.2
|
|
|
26.3
|
|
|
22
|
%
|
|||
Comparable Adjustments
|
58.0
|
|
|
151.8
|
|
|
(93.8
|
)
|
|
(62
|
%)
|
|||
Consolidated selling, general and administrative expenses
|
$
|
1,239.9
|
|
|
$
|
1,199.3
|
|
|
$
|
40.6
|
|
|
3
|
%
|
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
|
Percent
Change |
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Beer
|
$
|
1,601.5
|
|
|
$
|
1,461.3
|
|
|
$
|
140.2
|
|
|
10
|
%
|
Wine and Spirits
|
575.2
|
|
|
586.8
|
|
|
(11.6
|
)
|
|
(2
|
%)
|
|||
Corporate Operations and Other
|
(146.5
|
)
|
|
(120.2
|
)
|
|
(26.3
|
)
|
|
(22
|
%)
|
|||
Comparable Adjustments
|
(83.3
|
)
|
|
(159.9
|
)
|
|
76.6
|
|
|
(48
|
%)
|
|||
Consolidated operating income
|
$
|
1,946.9
|
|
|
$
|
1,768.0
|
|
|
$
|
178.9
|
|
|
10
|
%
|
•
|
The new, lower federal statutory rate of 21% for
Nine Months 2019
associated with the December 2017 TCJ Act, as compared to the federal statutory rate of 35% in effect for
Nine Months 2018
;
|
•
|
Lower effective tax rates applicable to our foreign businesses, net of incremental U.S. tax on foreign earnings under the TCJ Act; and
|
•
|
The recognition of an income tax benefit upon the completion of our analysis of the income tax implications of the TCJ Act for
Third Quarter 2019
resulting from a decrease in the mandatory one-time transition tax on unremitted earnings of our foreign businesses.
|
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
||||||
(in millions)
|
|
|
|
|
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
1,973.9
|
|
|
$
|
1,468.4
|
|
|
$
|
505.5
|
|
Investing activities
|
(4,587.3
|
)
|
|
(1,038.3
|
)
|
|
(3,549.0
|
)
|
|||
Financing activities
|
2,661.3
|
|
|
(458.1
|
)
|
|
3,119.4
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(7.6
|
)
|
|
5.1
|
|
|
(12.7
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
40.3
|
|
|
$
|
(22.9
|
)
|
|
$
|
63.2
|
|
|
Nine
Months 2019 |
|
Nine
Months 2018 |
|
Dollar
Change |
||||||
(in millions)
|
|
|
|
|
|
||||||
Net proceeds from debt, current and long-term, and related activities
|
$
|
3,564.5
|
|
|
$
|
67.6
|
|
|
$
|
3,496.9
|
|
Purchases of treasury stock
|
(504.3
|
)
|
|
(239.2
|
)
|
|
(265.1
|
)
|
|||
Dividends paid
|
(417.9
|
)
|
|
(301.1
|
)
|
|
(116.8
|
)
|
|||
Net cash provided by stock-based compensation activities
|
19.0
|
|
|
14.6
|
|
|
4.4
|
|
|||
Net cash provided by (used in) financing activities
|
$
|
2,661.3
|
|
|
$
|
(458.1
|
)
|
|
$
|
3,119.4
|
|
|
Remaining Borrowing Capacity
|
||||||
|
November 30,
2018 |
|
December 31,
2018
|
||||
(in millions)
|
|
|
|
||||
Revolving Credit Facility
(1)
|
$
|
1,257.2
|
|
|
$
|
1,164.4
|
|
(1)
|
Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2018 Credit Agreement and outstanding borrowings under our commercial paper program.
|
|
|
|
Class A Common Shares
|
||||||
|
Repurchase Authorization
|
|
Dollar Value of Shares Repurchased
|
|
Number of Shares Repurchased
|
||||
(in millions, except share data)
|
|
|
|
|
|
||||
2018 Authorization
|
$
|
3,000.0
|
|
|
$
|
995.9
|
|
|
4,632,012
|
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
|
||||||||||||||||||
|
November 30,
2018 |
|
November 30,
2017 |
|
November 30,
2018 |
|
November 30,
2017 |
|
November 30,
2018 |
|
November 30,
2017 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
$
|
1,955.5
|
|
|
$
|
1,871.5
|
|
|
$
|
(56.2
|
)
|
|
$
|
3.2
|
|
|
$
|
136.5
|
|
|
$
|
(108.7
|
)
|
Commodity derivative contracts
|
$
|
260.2
|
|
|
$
|
164.3
|
|
|
$
|
(8.9
|
)
|
|
$
|
2.8
|
|
|
$
|
22.1
|
|
|
$
|
(14.8
|
)
|
|
Aggregate
Notional Value
|
|
Fair Value
|
|
Decrease
in Fair Value –
Hypothetical
1% Rate Increase
|
||||||||||||||||||
|
November 30,
2018 |
|
November 30,
2017 |
|
November 30,
2018 |
|
November 30,
2017 |
|
November 30,
2018 |
|
November 30,
2017 |
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed interest rate debt
|
$
|
10,282.1
|
|
|
$
|
7,490.8
|
|
|
$
|
9,855.4
|
|
|
$
|
7,720.7
|
|
|
$
|
(569.0
|
)
|
|
$
|
(406.8
|
)
|
Variable interest rate debt
|
$
|
3,376.5
|
|
|
$
|
1,923.8
|
|
|
$
|
3,333.6
|
|
|
$
|
1,902.8
|
|
|
$
|
(98.1
|
)
|
|
$
|
(41.8
|
)
|
Item 4.
|
Controls and Procedures.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 6.
|
Exhibits.
|
Exhibit No.
|
|
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
4.18
|
|
|
|
|
|
4.19
|
|
|
|
|
|
4.20
|
|
|
|
|
|
4.21
|
|
|
|
|
|
4.22
|
|
|
|
|
|
4.23
|
|
|
|
|
|
4.24
|
|
|
|
|
|
4.25
|
|
|
|
|
|
4.26
|
|
|
|
|
|
4.27
|
|
|
4.28
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.1
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of November 30, 2018 and February 28, 2018, (ii) Consolidated Statements of Comprehensive Income for the nine months and three months ended November 30, 2018 and 2017, (iii) Consolidated Statements of Cash Flows for the nine months ended November 30, 2018 and 2017, and (iv) Notes to Consolidated Financial Statements.
|
#
|
Company’s Commission File No. 001-08495.
|
*
|
Designates management contract or compensatory plan or arrangement.
|
|
|
CONSTELLATION BRANDS, INC.
|
|
|
|
|
|
Date:
|
January 9, 2019
|
By:
|
/s/ Thomas M. McCorry
|
|
|
|
Thomas M. McCorry, Senior Vice President
and Controller
|
|
|
|
|
Date:
|
January 9, 2019
|
By:
|
/s/ David Klein
|
|
|
|
David Klein, Executive Vice President and
Chief Financial Officer (principal financial
officer and principal accounting officer)
|
A.
|
On August 14, 2018, the Purchaser and the Corporation entered into a subscription agreement (the “
Subscription Agreement
”), pursuant to which the Purchaser agreed to purchase 104,500,000 common shares in the capital of the Corporation and 139,745,453 common share purchase warrants of the Corporation.
|
B.
|
Pursuant to Section 2.1(a) of the Subscription Agreement and in consideration for the issuance by the Corporation of the Purchased Shares, the Purchaser has agreed to pay the Share Purchase Price, being $5,078,700,000, to the Corporation on the date of this Agreement.
|
C.
|
The Corporation has requested and the Purchaser has agreed to satisfy a portion of the Share Purchase Price in U.S. dollars, as more particularly set out in this Agreement.
|
1.
|
The Share Purchase Price shall be satisfied by the payment of:
|
(a)
|
US$2,000,000,000 (the “
USD Amount
”); and
|
(b)
|
an amount in Canadian dollars equal to (i) the Share Purchase Price, less (ii) the Canadian dollar equivalent of the USD Amount, calculated based on the October 29, 2018 daily exchange rate of $CDN/$US posted by the Bank of Canada at 4:30 p.m. (Ottawa time) on October 29, 2018 on its website at “https://www.bankofcanada.ca/rates/exchange/daily-exchange-rates/” (the “
Exchange Rate
”),
|
2.
|
Except for the agreement to satisfy a portion of the Share Purchase Price in U.S. dollars at the Exchange Rate, as set out in Section 1, nothing in this Foreign Exchange Rate Agreement amends or modifies any term or condition of the Subscription Agreement or any other agreement or certificate delivered pursuant thereto.
|
3.
|
Capitalized terms used but not defined in this Agreement have the meanings attributed to them in the Subscription Agreement.
|
4.
|
Unless otherwise indicated, all references to dollars or “$” in this Agreement refer to Canadian dollars.
|
5.
|
This Agreement shall be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable in such Province.
|
|
|
CANOPY GROWTH CORPORATION
|
|
By:
|
/s/ Tim Saunders
|
||
|
Name: Tim Saunders
|
||
|
Title: Executive Vice President and CFO
|
|
|
CBG HOLDINGS LLC
|
|
By:
|
/s/ Garth Hankinson
|
||
|
Name: Garth Hankinson
|
||
|
Title: Vice President
|
/s/ Robert Sands
|
Robert Sands
|
Chief Executive Officer
|
/s/ David Klein
|
David Klein
|
Executive Vice President and Chief Financial Officer
|
Dated:
|
January 9, 2019
|
/s/ Robert Sands
|
|
|
Robert Sands,
Chief Executive Officer
|
Dated:
|
January 9, 2019
|
/s/ David Klein
|
|
|
David Klein,
Executive Vice President and
Chief Financial Officer
|