Delaware
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001-08495
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16-0716709
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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Not Applicable
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(Former name or former address, if changed since last report.)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Emerging growth company
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o
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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o
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Item 2.02
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Results of Operations and Financial Condition.
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Item 7.01
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Regulation FD Disclosure.
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Item 8.01
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Other Events.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits
.
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Exhibit No.
|
Description
|
99.1
|
News Release of Constellation Brands, Inc. dated April 3, 2019, regarding the repositioning of its wine and spirit business.
|
99.2
|
News Release of Constellation Brands, Inc. dated April 4, 2019, regarding its results for the fiscal year and fourth quarter ended February 28, 2019.
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Exhibit No.
|
Description
|
|
|
(99)
|
ADDITIONAL EXHIBITS
|
|
|
(99.1)
|
|
|
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(99.2)
|
Date:
|
April 4, 2019
|
CONSTELLATION BRANDS, INC.
|
|
|
|
|
|
|
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By:
|
/s/ David Klein
|
|
|
|
David Klein
|
|
|
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Executive Vice President and
Chief Financial Officer
|
•
|
Signs agreement with E. & J. Gallo Winery to divest approximately 30 brands from its wine and spirits portfolio principally priced at $11 retail and below, and related facilities, for $1.7 billion
|
•
|
Decision better aligns portfolio with consumer premiumization trends
|
MEDIA CONTACTS
|
|
INVESTOR RELATIONS CONTACTS
|
|
Mike McGrew 773-251-4934
|
|
michael.mcgrew@cbrands.com
|
Patty Yahn-Urlaub 585-678-7483
|
|
patty.yahn-urlaub@cbrands.com
|
Alex Wagner 415-912-3788
|
|
alex.wagner@cbrands.com
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Bob Czudak 585-678-7170
|
|
bob.czudak@cbrands.com
|
|
|
Tom Conaway
585-678-7503
|
|
thomas.conaway@cbrands.com
|
|
Net Sales
|
Operating Income
|
Earnings Before Interest & Taxes (EBIT)
|
Diluted Net Income Per Share Attributable to CBI (EPS)
|
Fiscal Year
2019 Financial Highlights
(1)
| In millions, except per share data
|
||||
Reported
|
$8,116
|
$2,412
|
NA
|
$17.57
|
% Change
|
7%
|
6%
|
NA
|
53%
|
Comparable
|
$8,116
|
$2,616
|
$2,633
|
$9.28
|
% Change
|
7%
|
6%
|
5%
|
7%
|
Fourth Quarter
Fiscal Year 2019 Financial Highlights
(1)
|
||||
Reported
|
$1,797
|
$465
|
NA
|
$6.37
|
% Change
|
2%
|
(9%)
|
NA
|
40%
|
Comparable
|
$1,797
|
$586
|
$571
|
$1.84
|
% Change
|
2%
|
8%
|
5%
|
(3%)
|
•
|
Achieves fiscal 2019 reported basis EPS of
$17.57
and comparable basis EPS of
$9.28
, an
increase of
53%
and
7%
, respectively; reported basis EPS includes
$1.97 billion
unrealized net gain
from increase in fair value of Canopy investments
|
•
|
Generates
record operating cash flow
of more than
$2.2 billion
and
$1.4 billion
of free cash flow for fiscal 2019
|
•
|
Provides
fiscal 2020 outlook
,
expects reported basis EPS of
$8.47 - $8.77
and comparable basis EPS of
$8.50 - $8.80
, including impact of wine and spirits divestiture, but
excluding Canopy Growth equity earnings
, share repurchases and gain or loss on the wine and spirits transaction
|
|
“We’ve positioned our wine and spirits business for success with our announced plans to sell a portion of the business, which enables us to continue to strategically focus on our powerhouse, high-margin, high-growth brands. During fiscal 2019, our beer business delivered industry-leading double-digit sales and operating income growth led by our powerful, high-end brands and successful consumer-led innovation. Overall, we’re confident in our ability to drive top line growth of mid-to-high single digits over the next three to five years across our entire business.”
|
|
|
“In fiscal 2019, we generated record operating cash flow of more than $2.2 billion, which enabled a return of more than $1 billion to shareholders through a combination of dividends and share repurchases. In fiscal 2020, we remain committed to increasing our quarterly dividend. Longer term, we expect the powerful cash generation capability of our core business to enable significant cash returns to shareholders of $4.5 billion in the form of share repurchases and dividends over the next three fiscal years.”
|
||
|
||||||
|
Bill Newlands
|
|
|
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David Klein
|
|
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President and Chief Executive Officer
|
|
|
Chief Financial Officer
|
•
|
Projects
fiscal 2020 operating cash flow target
of approximately
$2 billion
and
free cash flow projection
of
$1.1
-
$1.2 billion
|
•
|
Repurchases
2.4 million
shares of common stock
for
$504 million
for fiscal 2019
|
•
|
Declares quarterly cash dividend
of
$0.75
per share Class A and
$0.68
per share Class B common stock
|
•
|
Signs agreement with E. & J. Gallo Winery to sell
a portion
of wine and spirits business for approximately $1.7 billion, subject to closing adjustments
|
•
|
Constellation’s Beer portfolio was the
#1 growth contributor
to the U.S. beer market with all import brand families achieving record volume levels.
|
•
|
Corona brand family
shipment volume reached the 150 million case milestone and the
Modelo brand family
crossed the 125 million case mark, driving strong portfolio performance and share gains with depletion growth of 7% and 12%, respectively.
|
•
|
Held gross margin of
54.4%
in a rising cost environment.
|
•
|
Operating margin decreased slightly to
39.3%
, as favorable pricing was more than offset by higher marketing spend and transportation costs.
|
•
|
Marketing as a percent of net sales increased 30 basis points to 9.3% driven primarily by marketing initiatives for successful brand innovation launches.
|
•
|
Combined Nava and Obregon
brewery capacity reaches 34 million hectoliters
with completion of final capacity expansion at Nava Brewery.
|
•
|
Strong portfolio depletion performance was driven by the
Modelo
and
Corona
brand families
.
|
•
|
The beer business was the top U.S. share gainer during the winter holiday season driven by
Modelo Especial
,
Corona Premier
and
Corona Familiar
.
|
•
|
Q4 shipment volume was strong and exceeded expectations primarily due to timing. February 2019 distributor inventory levels are higher than planned due to muted depletion trends at the end of the quarter driven primarily by poor weather conditions for the West Coast during February. This shipment timing benefit is expected to reverse during fiscal 2020.
|
•
|
Operating margin increased
250
basis points to
40.5%
, as benefits from pricing and lower marketing spend were partially offset by higher transportation costs.
|
•
|
Marketing as a percent of net sales was 6.4% versus 8.0% for fourth quarter fiscal 2018.
|
•
|
Corona Refresca
is positioned for nationwide launch beginning first quarter fiscal 2020.
|
•
|
While depletion performance was below expectations, efforts to increase points of distribution for key brands has resulted in double-digit distribution gains for
Kim Crawford
,
Meiomi
,
Ruffino Sparkling
,
Cooper & Thief
and
High West
, which positions the higher-end of the portfolio for improved marketplace performance heading into fiscal 2020.
|
•
|
Innovation efforts are paying off with
Robert Mondavi Private Selection Rum Barrel Aged Merlot
showing momentum in the marketplace, and strong depletion growth for brands including
7 Moons
and
Cooper & Thief
, which was the
#1 growth driver
in the Super Luxury Wine Segment.
|
•
|
Operating margin decreased
70
basis points to
26.5%
, reflecting higher COGS driven primarily by increased grape and transportation costs, and unfavorable mix, partially offset by favorable pricing.
|
•
|
Shipment volume exceeded depletions volume, which is expected to reverse in first quarter fiscal 2020.
|
•
|
Several high-end wine and spirits brands posted double-digit consumer takeaway trends in IRI channels including
Kim Crawford
,
Meiomi
,
Ruffino
, the
Prisoner
portfolio and
High West
.
|
•
|
SVEDKA Vodka
delivered strong sales growth driven by the launch of the
“Bring Your Own Spirit”
marketing campaign, which improved consumer brand awareness and purchase intent.
|
•
|
Operating margin increased
60
basis points to
27.7%
, as
benefits from lower SG&A and favorable price
were partially offset by higher COGS.
|
(1)
|
Excludes fiscal 2019 Q2 - Q4 wine and spirits segment financial information included in our historical consolidated financial statements that will no longer be part of our consolidated results after the Transaction.
|
|
AWARDS + RECOGNITION
Calendar 2018 was a year marked by an
impressive list
of awards and accolades for Constellation Brands. A listing of those achievements is embedded in this news release by clicking on the Awards + Recognition thumbnail.
|
ABOUT CONSTELLATION BRANDS
Constellation Brands (NYSE: STZ and STZ.B), a Fortune 500® company, is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand, Italy and Canada. Constellation is the No. 3 beer company in the U.S. with high-end, iconic imported brands such as the Corona and Modelo brand families and Pacifico. Its high-quality, premium wine and spirits brands include the Robert Mondavi and The Prisoner Wine Company brand families, Kim Crawford, Ruffino, Meiomi and SVEDKA Vodka. The company’s portfolio also includes a collection of highly-rated, high-end brands such as SIMI and Mount Veeder Winery wine brands, High West Whiskey and Casa Noble Tequila, as well as new premium wine innovations such as Cooper & Thief and Spoken Barrel.
Based in Victor, N.Y., the company believes that industry leadership involves a commitment to brand building, our trade partners, the environment, our investors and to consumers around the world who choose our products when celebrating big moments or enjoying quiet ones. Since its founding in 1945, Constellation’s ability to see, meet and stay ahead of shifting consumer preferences and trends across total beverage alcohol has fueled our success and made us the No. 1 growth contributor in beverage alcohol in the U.S.
To learn more, follow us on Twitter
@cbrands
and visit
www.cbrands.com
.
|
MEDIA CONTACTS
|
|
INVESTOR RELATIONS CONTACTS
|
|
Mike McGrew 773-251-4934
|
|
michael.mcgrew@cbrands.com
|
Patty Yahn-Urlaub 585-678-7483
|
|
patty.yahn-urlaub@cbrands.com
|
Amy Martin 585-678-7141
|
|
amy.martin@cbrands.com
|
Bob Czudak 585-678-7170
|
|
bob.czudak@cbrands.com
|
|
|
Tom Conaway
585-678-7503
|
|
thomas.conaway@cbrands.com
|
•
|
completion of the pending Transaction;
|
•
|
impact of the pending Transaction, use of expected proceeds from the pending Transaction, amount of stranded costs, and amount and timing of cost reductions may vary from management’s current expectations;
|
•
|
beer operations expansion, construction and optimization activities, and costs and timing associated with these activities, may vary from management’s current estimates;
|
•
|
accuracy of supply projections, including those relating to beer operations expansion activities and glass sourcing;
|
•
|
operating cash flow, free cash flow, effective tax rate and capital expenditures to support long-term growth may vary from management’s current estimates;
|
•
|
accuracy of projections associated with market opportunities and with previously announced acquisitions, investments and divestitures;
|
•
|
accuracy of projections relating to the Canopy investment may vary from management’s current expectations;
|
•
|
exact duration of the share repurchase implementation and the amount, timing and source of funds for any share repurchases;
|
•
|
amount and timing of future dividends are subject to the determination and discretion of the board of directors;
|
•
|
raw material and water supply, production or shipment difficulties could adversely affect the company’s ability to supply its customers;
|
•
|
general economic, geo-political, domestic, international and regulatory conditions, instability in world financial markets, unanticipated environmental liabilities and costs, or enhanced competitive activities;
|
•
|
changes to international trade agreements and tariffs, accounting standards, elections or assertions, tax laws or other governmental rules and regulations, and other factors which could impact the company’s reported financial position, results of operations or effective tax rate, and accuracy of any associated projections;
|
•
|
changes in interest rates and the inherent unpredictability of currency fluctuations, commodity prices and raw material costs; and
|
•
|
other factors and uncertainties disclosed in the company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended February 28, 2018, as supplemented by the company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2018, which could cause actual future performance to differ from current expectations.
|
Constellation Brands, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
|
|||||||
|
February 28,
2019 |
|
February 28,
2018 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
93.6
|
|
|
$
|
90.3
|
|
Accounts receivable
|
846.9
|
|
|
776.2
|
|
||
Inventories
|
2,130.4
|
|
|
2,084.0
|
|
||
Prepaid expenses and other
|
613.1
|
|
|
523.5
|
|
||
Total current assets
|
3,684.0
|
|
|
3,474.0
|
|
||
Property, plant and equipment
|
5,267.3
|
|
|
4,789.7
|
|
||
Goodwill
|
8,088.8
|
|
|
8,083.1
|
|
||
Intangible assets
|
3,198.1
|
|
|
3,304.8
|
|
||
Equity method investments
|
3,465.6
|
|
|
121.5
|
|
||
Securities measured at fair value
|
3,234.7
|
|
|
672.2
|
|
||
Deferred income taxes
|
2,183.3
|
|
|
—
|
|
||
Other assets
|
109.7
|
|
|
93.4
|
|
||
Total assets
|
$
|
29,231.5
|
|
|
$
|
20,538.7
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
791.5
|
|
|
$
|
746.8
|
|
Current maturities of long-term debt
|
1,065.2
|
|
|
22.3
|
|
||
Accounts payable
|
616.7
|
|
|
592.2
|
|
||
Other accrued expenses and liabilities
|
690.4
|
|
|
678.3
|
|
||
Total current liabilities
|
3,163.8
|
|
|
2,039.6
|
|
||
Long-term debt, less current maturities
|
11,759.8
|
|
|
9,417.6
|
|
||
Deferred income taxes and other liabilities
|
1,470.7
|
|
|
1,089.8
|
|
||
Total liabilities
|
16,394.3
|
|
|
12,547.0
|
|
||
CBI stockholders’ equity
|
12,551.0
|
|
|
7,975.1
|
|
||
Noncontrolling interests
|
286.2
|
|
|
16.6
|
|
||
Total stockholders’ equity
|
12,837.2
|
|
|
7,991.7
|
|
||
Total liabilities and stockholders’ equity
|
$
|
29,231.5
|
|
|
$
|
20,538.7
|
|
Constellation Brands, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
|
|||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
February 28,
2019 |
|
February 28,
2018 |
|
February 28,
2019 |
|
February 28,
2018 |
||||||||
Sales
|
$
|
1,968.0
|
|
|
$
|
1,931.5
|
|
|
$
|
8,884.3
|
|
|
$
|
8,322.1
|
|
Excise taxes
|
(170.8
|
)
|
|
(169.5
|
)
|
|
(768.3
|
)
|
|
(741.8
|
)
|
||||
Net sales
|
1,797.2
|
|
|
1,762.0
|
|
|
8,116.0
|
|
|
7,580.3
|
|
||||
Cost of product sold
|
(903.7
|
)
|
|
(916.8
|
)
|
|
(4,035.7
|
)
|
|
(3,767.8
|
)
|
||||
Gross profit
|
893.5
|
|
|
845.2
|
|
|
4,080.3
|
|
|
3,812.5
|
|
||||
Selling, general and administrative expenses
|
(428.2
|
)
|
|
(333.4
|
)
|
|
(1,668.1
|
)
|
|
(1,532.7
|
)
|
||||
Operating income
|
465.3
|
|
|
511.8
|
|
|
2,412.2
|
|
|
2,279.8
|
|
||||
Income from unconsolidated investments
|
1,183.4
|
|
|
237.5
|
|
|
2,101.6
|
|
|
487.2
|
|
||||
Interest expense
|
(118.5
|
)
|
|
(86.9
|
)
|
|
(367.1
|
)
|
|
(332.0
|
)
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(77.9
|
)
|
|
(1.7
|
)
|
|
(97.0
|
)
|
||||
Income before income taxes
|
1,530.2
|
|
|
584.5
|
|
|
4,145.0
|
|
|
2,338.0
|
|
||||
(Provision for) benefit from income taxes
|
(280.8
|
)
|
|
329.3
|
|
|
(685.9
|
)
|
|
(22.7
|
)
|
||||
Net income
|
1,249.4
|
|
|
913.8
|
|
|
3,459.1
|
|
|
2,315.3
|
|
||||
Net income attributable to noncontrolling interests
|
(9.9
|
)
|
|
(3.3
|
)
|
|
(23.2
|
)
|
|
(11.9
|
)
|
||||
Net income attributable to CBI
|
$
|
1,239.5
|
|
|
$
|
910.5
|
|
|
$
|
3,435.9
|
|
|
$
|
2,303.4
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to CBI:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
$
|
6.57
|
|
|
$
|
4.76
|
|
|
$
|
18.24
|
|
|
$
|
11.96
|
|
Basic – Class B Convertible Common Stock
|
$
|
5.97
|
|
|
$
|
4.32
|
|
|
$
|
16.57
|
|
|
$
|
10.86
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
$
|
6.37
|
|
|
$
|
4.56
|
|
|
$
|
17.57
|
|
|
$
|
11.47
|
|
Diluted – Class B Convertible Common Stock
|
$
|
5.87
|
|
|
$
|
4.21
|
|
|
$
|
16.21
|
|
|
$
|
10.59
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic – Class A Common Stock
|
167.391
|
|
|
170.243
|
|
|
167.249
|
|
|
171.457
|
|
||||
Basic – Class B Convertible Common Stock
|
23.316
|
|
|
23.329
|
|
|
23.321
|
|
|
23.336
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted – Class A Common Stock
|
194.499
|
|
|
199.494
|
|
|
195.532
|
|
|
200.745
|
|
||||
Diluted – Class B Convertible Common Stock
|
23.316
|
|
|
23.329
|
|
|
23.321
|
|
|
23.336
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share:
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
$
|
0.74
|
|
|
$
|
0.52
|
|
|
$
|
2.96
|
|
|
$
|
2.08
|
|
Class B Convertible Common Stock
|
$
|
0.67
|
|
|
$
|
0.47
|
|
|
$
|
2.68
|
|
|
$
|
1.88
|
|
Constellation Brands, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
|||||||
|
Years Ended
|
||||||
|
February 28,
2019 |
|
February 28,
2018 |
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
3,459.1
|
|
|
$
|
2,315.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Unrealized net gain on securities measured at fair value
|
(1,971.2
|
)
|
|
(464.3
|
)
|
||
Net gain on sale of unconsolidated investment
|
(99.8
|
)
|
|
—
|
|
||
Net income tax benefit related to the Tax Cuts and Jobs Act
|
(37.6
|
)
|
|
(351.2
|
)
|
||
Deferred tax provision
|
426.9
|
|
|
113.8
|
|
||
Depreciation
|
333.1
|
|
|
293.8
|
|
||
Impairment and amortization of intangible assets
|
114.0
|
|
|
92.7
|
|
||
Stock-based compensation
|
64.1
|
|
|
60.9
|
|
||
Amortization of debt issuance costs and loss on extinguishment of debt
|
29.4
|
|
|
108.7
|
|
||
Loss on contract termination
|
—
|
|
|
59.0
|
|
||
Change in operating assets and liabilities, net of effects from purchases of businesses:
|
|
|
|
||||
Accounts receivable
|
(71.9
|
)
|
|
(34.1
|
)
|
||
Inventories
|
(61.9
|
)
|
|
(123.8
|
)
|
||
Prepaid expenses and other current assets
|
(103.0
|
)
|
|
(111.5
|
)
|
||
Accounts payable
|
21.4
|
|
|
12.8
|
|
||
Other accrued expenses and liabilities
|
(22.1
|
)
|
|
(66.8
|
)
|
||
Other
|
165.8
|
|
|
26.1
|
|
||
Total adjustments
|
(1,212.8
|
)
|
|
(383.9
|
)
|
||
Net cash provided by operating activities
|
2,246.3
|
|
|
1,931.4
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Investments in equity method investees and securities
|
(4,081.5
|
)
|
|
(210.9
|
)
|
||
Purchases of property, plant and equipment
|
(886.3
|
)
|
|
(1,057.6
|
)
|
||
Purchases of businesses, net of cash acquired
|
(45.6
|
)
|
|
(150.1
|
)
|
||
Proceeds from sale of unconsolidated investment
|
110.2
|
|
|
—
|
|
||
Proceeds from sales of assets
|
72.3
|
|
|
5.9
|
|
||
Other investing activities
|
(0.9
|
)
|
|
(10.4
|
)
|
||
Net cash used in investing activities
|
(4,831.8
|
)
|
|
(1,423.1
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
3,657.6
|
|
|
7,933.4
|
|
||
Proceeds from shares issued under equity compensation plans
|
63.2
|
|
|
49.4
|
|
||
Net proceeds from short-term borrowings
|
45.5
|
|
|
137.2
|
|
||
Dividends paid
|
(557.7
|
)
|
|
(400.1
|
)
|
||
Purchases of treasury stock
|
(504.3
|
)
|
|
(1,038.5
|
)
|
||
Principal payments of long-term debt
|
(62.8
|
)
|
|
(7,128.7
|
)
|
||
Payments of debt issuance, debt extinguishment and other financing costs
|
(34.6
|
)
|
|
(122.2
|
)
|
||
Payments of minimum tax withholdings on stock-based payment awards
|
(13.6
|
)
|
|
(31.7
|
)
|
||
Net cash provided by (used in) financing activities
|
2,593.3
|
|
|
(601.2
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(4.5
|
)
|
|
5.8
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
3.3
|
|
|
(87.1
|
)
|
||
Cash and cash equivalents, beginning of year
|
90.3
|
|
|
177.4
|
|
||
Cash and cash equivalents, end of year
|
$
|
93.6
|
|
|
$
|
90.3
|
|
Constellation Brands, Inc. and Subsidiaries
SUMMARIZED SEGMENT AND INCOME (LOSS) FROM UNCONSOLIDATED INVESTMENTS INFORMATION
(in millions)
(unaudited)
|
|||||||||||||||||||||
|
Three Months Ended
|
|
|
|
Years Ended
|
|
|
||||||||||||||
|
February 28,
2019 |
|
February 28,
2018 |
|
Percent
Change
|
|
February 28,
2019 |
|
February 28,
2018 |
|
Percent
Change
|
||||||||||
Beer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment net sales
|
$
|
1,090.1
|
|
|
$
|
997.0
|
|
|
9
|
%
|
|
$
|
5,202.1
|
|
|
$
|
4,660.4
|
|
|
12
|
%
|
Segment gross profit
|
$
|
586.9
|
|
|
$
|
531.5
|
|
|
10
|
%
|
|
$
|
2,830.7
|
|
|
$
|
2,531.2
|
|
|
12
|
%
|
% Net sales
|
53.8
|
%
|
|
53.3
|
%
|
|
|
|
54.4
|
%
|
|
54.3
|
%
|
|
|
||||||
Segment operating income
|
$
|
441.4
|
|
|
$
|
378.9
|
|
|
16
|
%
|
|
$
|
2,042.9
|
|
|
$
|
1,840.2
|
|
|
11
|
%
|
% Net sales
|
40.5
|
%
|
|
38.0
|
%
|
|
|
|
39.3
|
%
|
|
39.5
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wine and Spirits
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wine net sales
|
$
|
599.4
|
|
|
$
|
673.6
|
|
|
(11
|
%)
|
|
$
|
2,532.5
|
|
|
$
|
2,556.3
|
|
|
(1
|
%)
|
Spirits net sales
|
107.7
|
|
|
91.4
|
|
|
18
|
%
|
|
381.4
|
|
|
363.6
|
|
|
5
|
%
|
||||
Segment net sales
|
$
|
707.1
|
|
|
$
|
765.0
|
|
|
(8
|
%)
|
|
$
|
2,913.9
|
|
|
$
|
2,919.9
|
|
|
—
|
%
|
Segment gross profit
|
$
|
311.2
|
|
|
$
|
333.7
|
|
|
(7
|
%)
|
|
$
|
1,279.5
|
|
|
$
|
1,309.4
|
|
|
(2
|
%)
|
% Net sales
|
44.0
|
%
|
|
43.6
|
%
|
|
|
|
43.9
|
%
|
|
44.8
|
%
|
|
|
||||||
Segment operating income
|
$
|
196.0
|
|
|
$
|
207.3
|
|
|
(5
|
%)
|
|
$
|
771.2
|
|
|
$
|
794.1
|
|
|
(3
|
%)
|
% Net sales
|
27.7
|
%
|
|
27.1
|
%
|
|
|
|
26.5
|
%
|
|
27.2
|
%
|
|
|
||||||
Segment income from unconsolidated investments
|
$
|
1.2
|
|
|
$
|
2.1
|
|
|
(43
|
%)
|
|
$
|
33.4
|
|
|
$
|
34.4
|
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate Operations and Other
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating loss
|
$
|
(51.4
|
)
|
|
$
|
(45.6
|
)
|
|
13
|
%
|
|
$
|
(197.9
|
)
|
|
$
|
(165.8
|
)
|
|
19
|
%
|
Segment income (loss) from unconsolidated investments
|
$
|
(16.4
|
)
|
|
$
|
(0.3
|
)
|
|
NM
|
|
|
$
|
(16.7
|
)
|
|
$
|
0.2
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated operating income
|
$
|
465.3
|
|
|
$
|
511.8
|
|
|
|
|
$
|
2,412.2
|
|
|
$
|
2,279.8
|
|
|
|
||
Comparable Adjustments
|
120.7
|
|
|
28.8
|
|
|
|
|
204.0
|
|
|
188.7
|
|
|
|
||||||
Comparable operating income
|
$
|
586.0
|
|
|
$
|
540.6
|
|
|
|
|
$
|
2,616.2
|
|
|
$
|
2,468.5
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated income from unconsolidated investments
|
$
|
1,183.4
|
|
|
$
|
237.5
|
|
|
|
|
$
|
2,101.6
|
|
|
$
|
487.2
|
|
|
|
||
Comparable Adjustments
|
(1,198.6
|
)
|
|
(235.7
|
)
|
|
|
|
(2,084.9
|
)
|
|
(452.6
|
)
|
|
|
||||||
Comparable income (loss) from unconsolidated investments
|
$
|
(15.2
|
)
|
|
$
|
1.8
|
|
|
|
|
$
|
16.7
|
|
|
$
|
34.6
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated EBIT
|
$
|
570.8
|
|
|
$
|
542.4
|
|
|
|
|
$
|
2,632.9
|
|
|
$
|
2,503.1
|
|
|
|
|
Three Months Ended
|
|
|
|
Years Ended
|
|
|
||||||||||
|
February 28,
2019 |
|
February 28,
2018 |
|
Percent
Change
|
|
February 28,
2019 |
|
February 28,
2018 |
|
Percent
Change
|
||||||
Beer
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(in millions, branded product, 24-pack,
12-ounce case equivalents)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Shipment volume
|
60.9
|
|
|
56.4
|
|
|
8.0
|
%
|
|
294.1
|
|
|
268.0
|
|
|
9.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depletion volume
(1)
|
|
|
|
|
8.1
|
%
|
|
|
|
|
|
8.8
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wine and Spirits
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(in millions, branded product, 9-liter case equivalents)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Shipment volume
|
14.2
|
|
|
15.6
|
|
|
(9.0
|
%)
|
|
58.5
|
|
|
59.0
|
|
|
(0.8
|
%)
|
U.S. Domestic shipment volume
|
13.3
|
|
|
14.6
|
|
|
(8.9
|
%)
|
|
54.4
|
|
|
54.7
|
|
|
(0.5
|
%)
|
U.S. Domestic Focus Brands shipment volume
(2)
|
8.4
|
|
|
8.8
|
|
|
(4.5
|
%)
|
|
33.9
|
|
|
33.1
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Domestic depletion volume
(1)
|
|
|
|
|
(4.0
|
%)
|
|
|
|
|
|
(2.6
|
%)
|
||||
U.S. Domestic Focus Brands depletion volume
(1) (2)
|
|
|
|
|
(0.6
|
%)
|
|
|
|
|
|
0.6
|
%
|
(1)
|
Depletions represent distributor shipments of our respective branded products to retail customers, based on third-party data.
|
(2)
|
U.S. Domestic Focus Brands include the following brands and/or portfolios of brands: 7 Moons, Black Box, Casa Noble, Clos du Bois, Franciscan, High West, Kim Crawford, Mark West, Meiomi, Mount Veeder, Nobilo, Ravage, Robert Mondavi, Ruffino, Schrader, Simi, SVEDKA Vodka, The Dreaming Tree and the Charles Smith and Prisoner portfolios of brands.
|
|
Three Months Ended February 28, 2019
|
|
Three Months Ended February 28, 2018
|
|
Percent
Change -
Reported
Basis
(GAAP)
|
|
Percent
Change -
Comparable
Basis
(Non-GAAP)
|
||||||||||||||||||
|
Reported
Basis
(GAAP)
|
Comparable
Adjustments
|
Comparable
Basis
(Non-GAAP)
|
|
Reported
Basis
(GAAP)
|
Comparable
Adjustments
|
Comparable
Basis
(Non-GAAP)
|
|
|||||||||||||||||
Net sales
|
$
|
1,797.2
|
|
|
$
|
1,797.2
|
|
|
$
|
1,762.0
|
|
|
$
|
1,762.0
|
|
|
2
|
%
|
|
2
|
%
|
||||
Cost of product sold
|
(903.7
|
)
|
$
|
4.6
|
|
|
|
(916.8
|
)
|
$
|
20.0
|
|
|
|
|
|
|
||||||||
Gross profit
|
893.5
|
|
4.6
|
|
$
|
898.1
|
|
|
845.2
|
|
20.0
|
|
$
|
865.2
|
|
|
6
|
%
|
|
4
|
%
|
||||
Selling, general and administrative expenses
|
(428.2
|
)
|
116.1
|
|
|
|
(333.4
|
)
|
8.8
|
|
|
|
|
|
|
||||||||||
Operating income
|
465.3
|
|
120.7
|
|
$
|
586.0
|
|
|
511.8
|
|
28.8
|
|
$
|
540.6
|
|
|
(9
|
%)
|
|
8
|
%
|
||||
Income from unconsolidated investments
|
1,183.4
|
|
(1,198.6
|
)
|
|
|
237.5
|
|
(235.7
|
)
|
|
|
|
|
|
||||||||||
EBIT
|
|
|
$
|
570.8
|
|
|
|
|
$
|
542.4
|
|
|
NA
|
|
|
5
|
%
|
||||||||
Interest expense
|
(118.5
|
)
|
|
|
|
(86.9
|
)
|
|
|
|
|
|
|
||||||||||||
Loss on extinguishment of debt
|
—
|
|
|
|
|
|
(77.9
|
)
|
77.9
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
1,530.2
|
|
(1,077.9
|
)
|
$
|
452.3
|
|
|
584.5
|
|
(129.0
|
)
|
$
|
455.5
|
|
|
162
|
%
|
|
(1
|
%)
|
||||
(Provision for) benefit from income taxes
(1)
|
(280.8
|
)
|
196.4
|
|
|
|
329.3
|
|
(405.3
|
)
|
|
|
|
|
|
||||||||||
Net income
|
1,249.4
|
|
(881.5
|
)
|
|
|
913.8
|
|
(534.3
|
)
|
|
|
|
|
|
||||||||||
Net income attributable to noncontrolling interests
|
(9.9
|
)
|
|
|
|
(3.3
|
)
|
|
|
|
|
|
|
||||||||||||
Net income attributable to CBI
|
$
|
1,239.5
|
|
$
|
(881.5
|
)
|
$
|
358.0
|
|
|
$
|
910.5
|
|
$
|
(534.3
|
)
|
$
|
376.2
|
|
|
36
|
%
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
EPS
(2)
|
$
|
6.37
|
|
$
|
(4.53
|
)
|
$
|
1.84
|
|
|
$
|
4.56
|
|
$
|
(2.68
|
)
|
$
|
1.89
|
|
|
40
|
%
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average common shares outstanding – diluted
|
194.499
|
|
|
194.499
|
|
|
199.494
|
|
|
199.494
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross margin
|
49.7
|
%
|
|
50.0
|
%
|
|
48.0
|
%
|
|
49.1
|
%
|
|
|
|
|
||||||||||
Operating margin
|
25.9
|
%
|
|
32.6
|
%
|
|
29.0
|
%
|
|
30.7
|
%
|
|
|
|
|
||||||||||
Effective tax rate
|
18.4
|
%
|
|
18.7
|
%
|
|
(56.3
|
)%
|
|
16.7
|
%
|
|
|
|
|
|
Three Months Ended February 28, 2019
|
|
Three Months Ended February 28, 2018
|
||||||||||||||||||||||
Comparable Adjustments
|
Acquisitions,
Divestitures
and Related
Costs
(3)
|
Restructuring
and Other
Strategic
Business
Development
Costs
(4)
|
Other
(5)
|
Total
|
|
Acquisitions,
Divestitures
and Related
Costs
(3)
|
Restructuring
and Other
Strategic
Business
Development
Costs
(4)
|
Other
(5)
|
Total
|
||||||||||||||||
Cost of product sold
|
$
|
(1.3
|
)
|
$
|
(2.4
|
)
|
$
|
(0.9
|
)
|
$
|
(4.6
|
)
|
|
$
|
(1.7
|
)
|
$
|
—
|
|
$
|
(18.3
|
)
|
$
|
(20.0
|
)
|
Selling, general and administrative expenses
|
$
|
(1.1
|
)
|
$
|
(6.2
|
)
|
$
|
(108.8
|
)
|
$
|
(116.1
|
)
|
|
$
|
(1.3
|
)
|
$
|
(6.5
|
)
|
$
|
(1.0
|
)
|
$
|
(8.8
|
)
|
Operating loss
|
$
|
(2.4
|
)
|
$
|
(8.6
|
)
|
$
|
(109.7
|
)
|
$
|
(120.7
|
)
|
|
$
|
(3.0
|
)
|
$
|
(6.5
|
)
|
$
|
(19.3
|
)
|
$
|
(28.8
|
)
|
Income from unconsolidated investments
|
$
|
(3.9
|
)
|
$
|
—
|
|
$
|
1,202.5
|
|
$
|
1,198.6
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
235.7
|
|
$
|
235.7
|
|
Loss on extinguishment of debt
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(77.9
|
)
|
$
|
(77.9
|
)
|
(Provision for) benefit from income taxes
(1)
|
$
|
1.5
|
|
$
|
2.0
|
|
$
|
(199.9
|
)
|
$
|
(196.4
|
)
|
|
$
|
—
|
|
$
|
2.1
|
|
$
|
403.2
|
|
$
|
405.3
|
|
Net income (loss) attributable to CBI
|
$
|
(4.8
|
)
|
$
|
(6.6
|
)
|
$
|
892.9
|
|
$
|
881.5
|
|
|
$
|
(3.0
|
)
|
$
|
(4.4
|
)
|
$
|
541.7
|
|
$
|
534.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
EPS
(2)
|
$
|
(0.02
|
)
|
$
|
(0.03
|
)
|
$
|
4.59
|
|
$
|
4.53
|
|
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
$
|
2.72
|
|
$
|
2.68
|
|
(1)
|
The effective tax rate applied to each Comparable Adjustment amount is generally based upon the jurisdiction in which the Comparable Adjustment was recognized. Additionally, for the three months and year ended
February 28, 2019
, the (provision for) benefit from income taxes includes a benefit recognized for the reversal of a valuation allowance originally established in connection with a change in accounting principle. For the year ended
February 28, 2019
, and for the three months and year ended
February 28, 2018
, the (provision for) benefit from income taxes also includes a net income tax benefit recognized in connection with the Tax Cuts and Jobs Act (the “TCJ Act”)(see (5) and (8) herein).
|
(2)
|
May not sum due to rounding as each item is computed independently.
|
(3)
|
For the
three months ended
February 28, 2019
, acquisitions, divestitures and related costs consist of transaction, integration and other acquisition-related costs recognized primarily in connection with the November 2018 investment in Canopy Growth Corporation (“Canopy”). For the
three months ended
February 28, 2018
, acquisitions, divestitures and related costs consist of transaction, integration and other acquisition-related costs recognized primarily in connection with the November 2017 investment in Canopy and the acquisition of the Schrader Cellars business.
|
(4)
|
For the
three months ended
February 28, 2019
,
and
February 28, 2018
, restructuring and other strategic business development costs consist primarily of costs recognized in connection with the development of a program specifically intended to identify opportunities for further streamlining of processes and improving capabilities, linking strategy with execution, prioritizing resources and enabling a new enterprise resource planning system.
|
(5)
|
For the
three months ended
February 28, 2019
, other consists primarily of an unrealized net gain from the mark to fair value of our investments in Canopy and the net income tax benefit recognized for the reversal of a valuation allowance, partially offset by an impairment of certain Ballast Point intangible assets. For the
three months ended
February 28, 2018
, other consists primarily of a net income tax benefit recognized in connection with the TCJ Act and an unrealized net gain from the mark to fair value of our investment in Canopy, partially offset by loss on extinguishment of debt and loss on write-down of certain bulk wine inventory as a result of smoke damage sustained during the Fall 2017 California wildfires.
|
|
Year Ended February 28, 2019
|
|
Year Ended February 28, 2018
|
|
Percent
Change -
Reported
Basis
(GAAP)
|
|
Percent
Change -
Comparable
Basis
(Non-GAAP)
|
||||||||||||||||||
|
Reported
Basis
(GAAP)
|
Comparable
Adjustments
|
Comparable
Basis
(Non-GAAP)
|
|
Reported
Basis
(GAAP)
|
Comparable
Adjustments
|
Comparable
Basis
(Non-GAAP)
|
|
|||||||||||||||||
Net sales
|
$
|
8,116.0
|
|
|
$
|
8,116.0
|
|
|
$
|
7,580.3
|
|
|
$
|
7,580.3
|
|
|
7
|
%
|
|
7
|
%
|
||||
Cost of product sold
|
(4,035.7
|
)
|
$
|
29.9
|
|
|
|
(3,767.8
|
)
|
$
|
28.1
|
|
|
|
|
|
|
||||||||
Gross profit
|
4,080.3
|
|
29.9
|
|
$
|
4,110.2
|
|
|
3,812.5
|
|
28.1
|
|
$
|
3,840.6
|
|
|
7
|
%
|
|
7
|
%
|
||||
Selling, general and administrative expenses
|
(1,668.1
|
)
|
174.1
|
|
|
|
(1,532.7
|
)
|
160.6
|
|
|
|
|
|
|
||||||||||
Operating income
|
2,412.2
|
|
204.0
|
|
$
|
2,616.2
|
|
|
2,279.8
|
|
188.7
|
|
$
|
2,468.5
|
|
|
6
|
%
|
|
6
|
%
|
||||
Income from unconsolidated investments
|
2,101.6
|
|
(2,084.9
|
)
|
|
|
487.2
|
|
(452.6
|
)
|
|
|
|
|
|
||||||||||
EBIT
|
|
|
$
|
2,632.9
|
|
|
|
|
$
|
2,503.1
|
|
|
NA
|
|
|
5
|
%
|
||||||||
Interest expense
|
(367.1
|
)
|
(20.1
|
)
|
|
|
(332.0
|
)
|
|
|
|
|
|
|
|||||||||||
Loss on extinguishment of debt
|
(1.7
|
)
|
1.7
|
|
|
|
(97.0
|
)
|
97.0
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
4,145.0
|
|
(1,899.3
|
)
|
$
|
2,245.7
|
|
|
2,338.0
|
|
(166.9
|
)
|
$
|
2,171.1
|
|
|
77
|
%
|
|
3
|
%
|
||||
Provision for income taxes
(1)
|
(685.9
|
)
|
278.6
|
|
|
|
(22.7
|
)
|
(390.6
|
)
|
|
|
|
|
|
||||||||||
Net income
|
3,459.1
|
|
(1,620.7
|
)
|
|
|
2,315.3
|
|
(557.5
|
)
|
|
|
|
|
|
||||||||||
Net income attributable to noncontrolling interests
|
(23.2
|
)
|
|
|
|
(11.9
|
)
|
|
|
|
|
|
|
||||||||||||
Net income attributable to CBI
|
$
|
3,435.9
|
|
$
|
(1,620.7
|
)
|
$
|
1,815.2
|
|
|
$
|
2,303.4
|
|
$
|
(557.5
|
)
|
$
|
1,745.9
|
|
|
49
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
EPS
(2)
|
$
|
17.57
|
|
$
|
(8.29
|
)
|
$
|
9.28
|
|
|
$
|
11.47
|
|
$
|
(2.78
|
)
|
$
|
8.70
|
|
|
53
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average common shares outstanding – diluted
|
195.532
|
|
|
195.532
|
|
|
200.745
|
|
|
200.745
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross margin
|
50.3
|
%
|
|
50.6
|
%
|
|
50.3
|
%
|
|
50.7
|
%
|
|
|
|
|
||||||||||
Operating margin
|
29.7
|
%
|
|
32.2
|
%
|
|
30.1
|
%
|
|
32.6
|
%
|
|
|
|
|
||||||||||
Effective tax rate
|
16.5
|
%
|
|
18.1
|
%
|
|
1.0
|
%
|
|
19.0
|
%
|
|
|
|
|
|
Year Ended February 28, 2019
|
|
Year Ended February 28, 2018
|
||||||||||||||||||||||
Comparable Adjustments
|
Acquisitions,
Divestitures
and Related
Costs
(6)
|
Restructuring
and Other
Strategic
Business
Development
Costs
(7)
|
Other
(8)
|
Total
|
|
Acquisitions,
Divestitures
and Related
Costs
(6)
|
Restructuring
and Other
Strategic
Business
Development
Costs
(7)
|
Other
(8)
|
Total
|
||||||||||||||||
Cost of product sold
|
$
|
(4.9
|
)
|
$
|
(8.9
|
)
|
$
|
(16.1
|
)
|
$
|
(29.9
|
)
|
|
$
|
(18.7
|
)
|
$
|
—
|
|
$
|
(9.4
|
)
|
$
|
(28.1
|
)
|
Selling, general and administrative expenses
|
$
|
(34.1
|
)
|
$
|
(17.1
|
)
|
$
|
(122.9
|
)
|
$
|
(174.1
|
)
|
|
$
|
(11.3
|
)
|
$
|
(14.0
|
)
|
$
|
(135.3
|
)
|
$
|
(160.6
|
)
|
Operating loss
|
$
|
(39.0
|
)
|
$
|
(26.0
|
)
|
$
|
(139.0
|
)
|
$
|
(204.0
|
)
|
|
$
|
(30.0
|
)
|
$
|
(14.0
|
)
|
$
|
(144.7
|
)
|
$
|
(188.7
|
)
|
Income from unconsolidated investments
|
$
|
95.9
|
|
$
|
—
|
|
$
|
1,989.0
|
|
$
|
2,084.9
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
452.6
|
|
$
|
452.6
|
|
Interest income, net
|
$
|
20.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
20.1
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Loss on extinguishment of debt
|
$
|
—
|
|
$
|
—
|
|
$
|
(1.7
|
)
|
$
|
(1.7
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(97.0
|
)
|
$
|
(97.0
|
)
|
(Provision for) benefit from income taxes
(1)
|
$
|
9.4
|
|
$
|
6.5
|
|
$
|
(294.5
|
)
|
$
|
(278.6
|
)
|
|
$
|
9.6
|
|
$
|
4.9
|
|
$
|
376.1
|
|
$
|
390.6
|
|
Net income (loss) attributable to CBI
|
$
|
86.4
|
|
$
|
(19.5
|
)
|
$
|
1,553.8
|
|
$
|
1,620.7
|
|
|
$
|
(20.4
|
)
|
$
|
(9.1
|
)
|
$
|
587.0
|
|
$
|
557.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
EPS
(2)
|
$
|
0.44
|
|
$
|
(0.10
|
)
|
$
|
7.95
|
|
$
|
8.29
|
|
|
$
|
(0.10
|
)
|
$
|
(0.05
|
)
|
$
|
2.92
|
|
$
|
2.78
|
|
(6)
|
For the
year ended
February 28, 2019
, acquisitions, divestitures and related costs consist primarily of (i) a net gain recognized in connection with the sale of our remaining interest in our previously-owned Australian and European business (the “Accolade Wine Investment”), (ii) a net gain on the settlement of interest rate swap contracts entered into to economically hedge our exposure to interest rate volatility associated with the debt financing for the November 2018 investment in Canopy, and (iii) a gain on the sale of certain assets. These gains were partially offset by transaction and other acquisition-related costs recognized in connection with the November 2018 investment in Canopy, including (i) a net loss on the settlement of foreign currency option contracts entered into to fix the U.S. dollar cost of the transaction, (ii) bridge commitment fees associated with debt financing of our investment and (iii) direct acquisition costs. For the
year ended
February 28, 2018
, acquisitions, divestitures and related costs consist of (i) transaction, integration and other acquisition-related costs recognized primarily in connection with the acquisitions of Prisoner, the Schrader Cellars business, the October 2016 Wine and Spirits Acquisitions and Obregon, and the November 2017 investment in Canopy, and (ii) costs recognized in connection with the sale of the Canadian wine business and related activities.
|
(7)
|
For the years ended
February 28, 2019
, and
February 28, 2018
, restructuring and other strategic business development costs consist primarily of costs recognized in connection with the development of a program specifically intended to identify opportunities for further streamlining of processes and improving capabilities, linking strategy with execution, prioritizing resources and enabling a new enterprise resource planning system.
|
(8)
|
For the
year ended
February 28, 2019
, other consists primarily of an unrealized net gain from the mark to fair value of our investments in Canopy and net income tax benefits recognized (i) for the reversal of a valuation allowance and (ii) in connection with the TCJ Act; partially offset by an impairment of certain Ballast Point intangible assets and a prior period adjustment for deferred compensation related to certain employment agreements. For the
year ended
February 28, 2018
, other consists primarily of an unrealized net gain from the mark to fair value of our investment in Canopy and a net income tax benefit recognized in connection with the TCJ Act; partially offset by (i) loss on extinguishment of debt, (ii) impairment of certain Ballast Point intangible assets, (iii) loss associated with the restructuring of an agreement with Owens-Illinois and (iv) loss on write-down of certain bulk wine inventory as a result of smoke damage sustained during the Fall 2017 California wildfires.
|
Canopy Equity Losses and Related Activities (“Canopy EIE”)
|
Three Months Ended February 28, 2019
|
|
Year Ended February 28, 2019
|
||||
Equity losses and related activities - reported basis, Canopy EIE (GAAP)
(1)
|
$
|
(2.6
|
)
|
|
$
|
(2.6
|
)
|
Comparable Adjustments
|
(13.9
|
)
|
|
(13.9
|
)
|
||
Equity losses and related activities - comparable basis, Canopy EIE (Non-GAAP)
|
(16.5
|
)
|
|
(16.5
|
)
|
||
Benefit from income taxes
(2)
|
3.9
|
|
|
3.9
|
|
||
Net income attributable to CBI - comparable basis, Canopy EIE (Non-GAAP)
|
$
|
(12.6
|
)
|
|
$
|
(12.6
|
)
|
|
|
|
|
||||
EPS - comparable basis, Canopy EIE (Non-GAAP)
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
Three Months Ended February 28, 2019
|
|
Year Ended February 28, 2019
|
||||
EBIT - comparable basis (Non-GAAP)
(3)
|
$
|
570.8
|
|
|
$
|
2,632.9
|
|
Equity losses and related activities - comparable basis, Canopy EIE (Non-GAAP)
|
(16.5
|
)
|
|
(16.5
|
)
|
||
EBIT - comparable basis, excluding Canopy EIE (Non-GAAP)
|
$
|
587.3
|
|
|
$
|
2,649.4
|
|
|
Three Months Ended February 28, 2019
|
|
Year Ended February 28, 2019
|
||||
EPS - comparable basis (Non-GAAP)
(3)
|
$
|
1.84
|
|
|
$
|
9.28
|
|
EPS - comparable basis, Canopy EIE (Non-GAAP)
|
(0.06
|
)
|
|
(0.06
|
)
|
||
EPS - comparable basis, excluding Canopy EIE (Non-GAAP)
(4)
|
$
|
1.90
|
|
|
$
|
9.34
|
|
EPS Guidance
|
Range for the Year
Ending February 29, 2020
|
||||||
Forecasted EPS - reported basis (GAAP)
|
$
|
8.47
|
|
|
$
|
8.77
|
|
Restructuring and other strategic business development costs
(5)
|
0.03
|
|
|
0.03
|
|
||
Forecasted EPS - comparable basis (Non-GAAP)
(4)
|
$
|
8.50
|
|
|
$
|
8.80
|
|
|
Actual for the
Year Ended
February 28, 2019
|
||
EPS - reported basis (GAAP)
|
$
|
17.57
|
|
Acquisitions, divestitures and related costs
(6)
|
(0.44
|
)
|
|
Restructuring and other strategic business development costs
(5)
|
0.10
|
|
|
Other
(7)
|
(7.95
|
)
|
|
EPS - comparable basis (Non-GAAP)
(4)
|
$
|
9.28
|
|
Free Cash Flow Guidance
Free cash flow, as defined in the reconciliation below, is considered a liquidity measure and is considered to provide useful information to investors about the amount of cash generated, which can then be used, after required debt service and dividend payments, for other general corporate purposes. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Free cash flow should be considered in addition to, not as a substitute for, or superior to, cash flow from operating activities prepared in accordance with GAAP.
|
|||||||
|
Range for the Year
Ending February 29, 2020
|
||||||
Net cash provided by operating activities (GAAP)
|
$
|
1,900.0
|
|
|
$
|
2,100.0
|
|
Purchases of property, plant and equipment
|
(800.0
|
)
|
|
(900.0
|
)
|
||
Free cash flow (Non-GAAP)
|
$
|
1,100.0
|
|
|
$
|
1,200.0
|
|
|
Actual for the
Year Ended February 28, 2019 |
|
Actual for the
Year Ended February 28, 2018 |
||||
Net cash provided by operating activities (GAAP)
|
$
|
2,246.3
|
|
|
$
|
1,931.4
|
|
Purchases of property, plant and equipment
|
(886.3
|
)
|
|
(1,057.6
|
)
|
||
Free cash flow (Non-GAAP)
|
$
|
1,360.0
|
|
|
$
|
873.8
|
|
(7)
|
Other includes:
(4)
|
Actual for the
Year Ended February 28, 2019 |
||
|
Unrealized net gain from mark to fair value of investments in Canopy
|
$
|
(7.99
|
)
|
|
Net income tax benefit recognized for the reversal of a valuation allowance
|
$
|
(0.26
|
)
|
|
Net income tax benefit recognized in connection with the TCJ Act
|
$
|
(0.19
|
)
|
|
Unconsolidated investments, other
|
$
|
(0.07
|
)
|
|
Impairment of certain Ballast Point intangible assets
|
$
|
0.41
|
|
|
Prior period adjustment for deferred compensation related to certain employment contracts
|
$
|
0.08
|
|
|
Net loss from mark to fair value of undesignated commodity derivative contracts
|
$
|
0.03
|
|
|
Adverse supply contracts
|
$
|
0.02
|
|
|
Loss on extinguishment of debt
|
$
|
0.01
|
|
|
Loss on write-down of certain bulk wine inventory as a result of smoke damage sustained during wildfires in California
|
$
|
0.01
|
|