☒ | 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.) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Class A Common Stock | STZ | New York Stock Exchange | ||||||
Class B Common Stock | STZ.B | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ |
Page | |||||||||||
PART I - FINANCIAL INFORMATION | |||||||||||
Item 1. Financial Statements | |||||||||||
Consolidated Balance Sheets | |||||||||||
Consolidated Statements of Comprehensive Income (Loss) | |||||||||||
Consolidated Statements of Changes in Stockholders’ Equity | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
Notes to Consolidated Financial Statements | |||||||||||
1. Basis of Presentation
|
|||||||||||
2. Inventories
|
|||||||||||
3. Acquisitions, Divestitures, and Business Transformation
|
|||||||||||
4. Derivative Instruments
|
|||||||||||
5. Fair Value of Financial Instruments
|
|||||||||||
6. Goodwill
|
|||||||||||
7. Intangible Assets
|
|||||||||||
8. Equity Method Investments
|
|||||||||||
9. Borrowings
|
|||||||||||
10. Income Taxes
|
|||||||||||
11. Stockholders' Equity
|
|||||||||||
12. Net Income (Loss) Per Common Share Attributable to CBI
|
|||||||||||
13. Comprehensive Income (Loss) Attributable to CBI
|
|||||||||||
14. Business Segment Information
|
|||||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | |||||||||||
Item 4. Controls and Procedures | |||||||||||
PART II – OTHER INFORMATION | |||||||||||
Item 4. Mine Safety Disclosures | NA | ||||||||||
Item 6. Exhibits | |||||||||||
INDEX TO EXHIBITS | |||||||||||
SIGNATURES |
FINANCIAL STATEMENTS |
May 31,
2020 |
February 29,
2020 |
||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 302.8 | $ | 81.4 | |||||||
Accounts receivable | 700.5 | 864.8 | |||||||||
Inventories | 1,332.6 | 1,373.6 | |||||||||
Prepaid expenses and other | 470.1 | 535.8 | |||||||||
Assets held for sale - current | 590.2 | 628.5 | |||||||||
Total current assets | 3,396.2 | 3,484.1 | |||||||||
Property, plant, and equipment | 5,098.2 | 5,333.0 | |||||||||
Goodwill | 7,684.9 | 7,757.1 | |||||||||
Intangible assets | 2,735.4 | 2,718.9 | |||||||||
Equity method investments | 2,885.7 | 3,093.9 | |||||||||
Securities measured at fair value | 809.5 | 1,117.1 | |||||||||
Deferred income taxes | 2,599.5 | 2,656.3 | |||||||||
Assets held for sale | 376.4 | 552.1 | |||||||||
Other assets | 564.0 | 610.7 | |||||||||
Total assets | $ | 26,149.8 | $ | 27,323.2 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Short-term borrowings | $ | — | $ | 238.9 | |||||||
Current maturities of long-term debt | 534.7 | 734.9 | |||||||||
Accounts payable | 505.5 | 557.6 | |||||||||
Other accrued expenses and liabilities | 712.2 | 780.4 | |||||||||
Total current liabilities | 1,752.4 | 2,311.8 | |||||||||
Long-term debt, less current maturities | 11,639.3 | 11,210.8 | |||||||||
Deferred income taxes and other liabilities | 1,380.5 | 1,326.3 | |||||||||
Total liabilities | 14,772.2 | 14,848.9 | |||||||||
Commitments and contingencies | |||||||||||
CBI stockholders’ equity: | |||||||||||
Class A Common Stock, $0.01 par value – Authorized, 322,000,000 shares; Issued, 186,093,277 shares and 186,090,745 shares, respectively
|
1.9 | 1.9 | |||||||||
Class B Convertible Common Stock, $0.01 par value – Authorized, 30,000,000 shares; Issued, 28,297,674 shares and 28,300,206 shares, respectively
|
0.3 | 0.3 | |||||||||
Additional paid-in capital | 1,523.3 | 1,514.6 | |||||||||
Retained earnings | 13,374.1 | 13,695.3 | |||||||||
Accumulated other comprehensive income (loss) | (1,022.4) | (266.3) | |||||||||
13,877.2 | 14,945.8 | ||||||||||
Less: Treasury stock – | |||||||||||
Class A Common Stock, at cost, 18,118,879 shares and 18,256,826 shares, respectively
|
(2,809.0) | (2,811.8) | |||||||||
Class B Convertible Common Stock, at cost, 5,005,800 shares
|
(2.2) | (2.2) | |||||||||
(2,811.2) | (2,814.0) | ||||||||||
Total CBI stockholders’ equity | 11,066.0 | 12,131.8 | |||||||||
Noncontrolling interests | 311.6 | 342.5 | |||||||||
Total stockholders’ equity | 11,377.6 | 12,474.3 | |||||||||
Total liabilities and stockholders’ equity | $ | 26,149.8 | $ | 27,323.2 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 1
|
FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
Sales | $ | 2,131.7 | $ | 2,282.5 | |||||||||||||||||||||||||
Excise taxes | (168.3) | (185.3) | |||||||||||||||||||||||||||
Net sales | 1,963.4 | 2,097.2 | |||||||||||||||||||||||||||
Cost of product sold | (975.1) | (1,068.5) | |||||||||||||||||||||||||||
Gross profit | 988.3 | 1,028.7 | |||||||||||||||||||||||||||
Selling, general, and administrative expenses | (353.3) | (406.0) | |||||||||||||||||||||||||||
Impairment of assets held for sale | (25.0) | — | |||||||||||||||||||||||||||
Operating income (loss) | 610.0 | 622.7 | |||||||||||||||||||||||||||
Income (loss) from unconsolidated investments | (571.2) | (930.6) | |||||||||||||||||||||||||||
Interest expense | (100.0) | (114.6) | |||||||||||||||||||||||||||
Loss on extinguishment of debt | (7.0) | — | |||||||||||||||||||||||||||
Income (loss) before income taxes | (68.2) | (422.5) | |||||||||||||||||||||||||||
(Provision for) benefit from income taxes | (104.4) | 185.4 | |||||||||||||||||||||||||||
Net income (loss) | (172.6) | (237.1) | |||||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | (5.3) | (8.3) | |||||||||||||||||||||||||||
Net income (loss) attributable to CBI | $ | (177.9) | $ | (245.4) | |||||||||||||||||||||||||
Comprehensive income (loss) | $ | (964.9) | $ | (239.8) | |||||||||||||||||||||||||
Comprehensive (income) loss attributable to noncontrolling interests | 30.9 | (7.2) | |||||||||||||||||||||||||||
Comprehensive income (loss) attributable to CBI | $ | (934.0) | $ | (247.0) | |||||||||||||||||||||||||
Net income (loss) per common share attributable to CBI: | |||||||||||||||||||||||||||||
Basic and Diluted – Class A Common Stock | $ | (0.94) | $ | (1.30) | |||||||||||||||||||||||||
Basic and Diluted – Class B Convertible Common Stock | $ | (0.86) | $ | (1.19) | |||||||||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||||||
Basic and Diluted – Class A Common Stock | 169.604 | 168.118 | |||||||||||||||||||||||||||
Basic and Diluted – Class B Convertible Common Stock | 23.293 | 23.317 | |||||||||||||||||||||||||||
Cash dividends declared per common share: | |||||||||||||||||||||||||||||
Class A Common Stock | $ | 0.75 | $ | 0.75 | |||||||||||||||||||||||||
Class B Convertible Common Stock | $ | 0.68 | $ | 0.68 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 2
|
FINANCIAL STATEMENTS |
Common Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Income (Loss) |
Treasury
Stock |
Non-controlling
Interests |
Total | |||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at February 29, 2020 | $ | 1.9 | $ | 0.3 | $ | 1,514.6 | $ | 13,695.3 | $ | (266.3) | $ | (2,814.0) | $ | 342.5 | $ | 12,474.3 | |||||||||||||||||||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | (177.9) | — | — | 5.3 | (172.6) | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of income tax effect | — | — | — | — | (756.1) | — | (36.2) | (792.3) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | (964.9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared | — | — | — | (143.3) | — | — | — | (143.3) | |||||||||||||||||||||||||||||||||||||||||||||
Shares issued under equity compensation plans | — | — | (6.0) | — | — | 2.8 | — | (3.2) | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 14.7 | — | — | — | — | 14.7 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at May 31, 2020 | $ | 1.9 | $ | 0.3 | $ | 1,523.3 | $ | 13,374.1 | $ | (1,022.4) | $ | (2,811.2) | $ | 311.6 | $ | 11,377.6 | |||||||||||||||||||||||||||||||||||||
Balance at February 28, 2019 | $ | 1.9 | $ | 0.3 | $ | 1,410.8 | $ | 14,276.2 | $ | (353.9) | $ | (2,784.3) | $ | 286.2 | $ | 12,837.2 | |||||||||||||||||||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | (245.4) | — | — | 8.3 | (237.1) | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of income tax effect | — | — | — | — | (1.6) | — | (1.1) | (2.7) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | (239.8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared | — | — | — | (141.9) | — | — | — | (141.9) | |||||||||||||||||||||||||||||||||||||||||||||
Initial recognition of non-controlling interest | — | — | — | — | — | — | 20.2 | 20.2 | |||||||||||||||||||||||||||||||||||||||||||||
Shares issued under equity compensation plans | — | — | (9.3) | — | — | 6.3 | — | (3.0) | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 15.5 | — | — | — | — | 15.5 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at May 31, 2019 | $ | 1.9 | $ | 0.3 | $ | 1,417.0 | $ | 13,888.9 | $ | (355.5) | $ | (2,778.0) | $ | 313.6 | $ | 12,488.2 | |||||||||||||||||||||||||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 3
|
FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||
2020 | 2019 | ||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||
Net income (loss) | $ | (172.6) | $ | (237.1) | |||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||
Unrealized net (gain) loss on securities measured at fair value | 197.3 | 827.5 | |||||||||||||||
Deferred tax provision (benefit) | 98.9 | (245.4) | |||||||||||||||
Depreciation | 71.0 | 86.6 | |||||||||||||||
Stock-based compensation | 14.6 | 15.5 | |||||||||||||||
Equity in (earnings) losses of equity method investees and related activities, net of distributed earnings | 373.9 | 91.1 | |||||||||||||||
Noncash lease expense | 20.9 | 22.8 | |||||||||||||||
Impairment of assets held for sale | 25.0 | — | |||||||||||||||
Loss on inventory and related contracts | 24.3 | 44.5 | |||||||||||||||
Loss on settlement of treasury lock contracts | (29.3) | — | |||||||||||||||
Change in operating assets and liabilities, net of effects from purchases of businesses: | |||||||||||||||||
Accounts receivable | 167.0 | 58.6 | |||||||||||||||
Inventories | 48.6 | (50.3) | |||||||||||||||
Prepaid expenses and other current assets | 40.5 | (8.7) | |||||||||||||||
Accounts payable | (28.4) | (22.3) | |||||||||||||||
Deferred revenue | 34.4 | 53.1 | |||||||||||||||
Other accrued expenses and liabilities | (155.5) | (77.4) | |||||||||||||||
Other | (44.1) | 34.6 | |||||||||||||||
Total adjustments | 859.1 | 830.2 | |||||||||||||||
Net cash provided by (used in) operating activities | 686.5 | 593.1 | |||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||
Purchases of property, plant, and equipment | (144.2) | (155.7) | |||||||||||||||
Purchases of businesses, net of cash acquired | — | (36.2) | |||||||||||||||
Investments in equity method investees and securities | (213.4) | (20.0) | |||||||||||||||
Proceeds from sales of assets | 17.7 | 0.3 | |||||||||||||||
Proceeds from sale of business | 41.1 | — | |||||||||||||||
Other investing activities | (0.3) | (1.9) | |||||||||||||||
Net cash provided by (used in) investing activities | (299.1) | (213.5) | |||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 4
|
FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||
2020 | 2019 | ||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||
Proceeds from issuance of long-term debt | 1,194.6 | — | |||||||||||||||
Principal payments of long-term debt | (959.5) | (22.9) | |||||||||||||||
Net proceeds from (repayments of) short-term borrowings | (238.9) | (205.0) | |||||||||||||||
Dividends paid | (143.9) | (143.0) | |||||||||||||||
Proceeds from shares issued under equity compensation plans | 4.4 | 10.4 | |||||||||||||||
Payments of minimum tax withholdings on stock-based payment awards | (7.6) | (13.9) | |||||||||||||||
Payments of debt issuance, debt extinguishment, and other financing costs | (18.1) | — | |||||||||||||||
Net cash provided by (used in) financing activities | (169.0) | (374.4) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 3.0 | (0.1) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 221.4 | 5.1 | |||||||||||||||
Cash and cash equivalents, beginning of period | 81.4 | 93.6 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 302.8 | $ | 98.7 | |||||||||||||
Supplemental disclosures of noncash investing and financing activities | |||||||||||||||||
Additions to property, plant, and equipment | $ | 64.5 | $ | 35.6 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 5
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
May 31,
2020 |
February 29,
2020 |
||||||||||
(in millions) | |||||||||||
Raw materials and supplies | $ | 161.5 | $ | 171.7 | |||||||
In-process inventories | 775.0 | 814.7 | |||||||||
Finished case goods | 396.1 | 387.2 | |||||||||
$ | 1,332.6 | $ | 1,373.6 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 6
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(in millions) | ||||||||
Cash received from buyer | $ | 269.7 | ||||||
Net assets sold | (213.3) | |||||||
AOCI reclassification adjustments, primarily foreign currency translation | 20.9 | |||||||
Direct costs to sell | (3.8) | |||||||
Gain on sale of business | $ | 73.5 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 7
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
May 31,
2020 |
February 29, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Wine and Spirits |
Beer (1)
|
Wine and Spirits | Consolidated | |||||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | $ | — | $ | 2.4 | $ | — | $ | 2.4 | ||||||||||||||||||||||||||||||||||||
Inventories | 570.2 | 13.7 | 576.9 | 590.6 | ||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other | 20.0 | 2.8 | 32.7 | 35.5 | ||||||||||||||||||||||||||||||||||||||||
Assets held for sale - current | 590.2 | 18.9 | 609.6 | 628.5 | ||||||||||||||||||||||||||||||||||||||||
Property, plant, and equipment | 115.9 | 55.9 | 172.6 | 228.5 | ||||||||||||||||||||||||||||||||||||||||
Goodwill | 290.6 | 4.7 | 304.3 | 309.0 | ||||||||||||||||||||||||||||||||||||||||
Intangible assets | 375.2 | 28.2 | 384.0 | 412.2 | ||||||||||||||||||||||||||||||||||||||||
Equity method investments | 0.4 | — | 1.0 | 1.0 | ||||||||||||||||||||||||||||||||||||||||
Other assets | 26.3 | 24.8 | 26.3 | 51.1 | ||||||||||||||||||||||||||||||||||||||||
Less: Reserve for assets held for sale | (432.0) | (42.7) | (407.0) | (449.7) | ||||||||||||||||||||||||||||||||||||||||
Assets held for sale | 376.4 | 70.9 | 481.2 | 552.1 | ||||||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | 6.9 | 0.2 | 0.6 | 0.8 | ||||||||||||||||||||||||||||||||||||||||
Other accrued expenses and liabilities | 13.5 | 11.0 | 17.8 | 28.8 | ||||||||||||||||||||||||||||||||||||||||
Deferred income taxes and other liabilities | — | 33.3 | — | 33.3 | ||||||||||||||||||||||||||||||||||||||||
Liabilities held for sale (2)
|
20.4 | 44.5 | 18.4 | 62.9 | ||||||||||||||||||||||||||||||||||||||||
Net assets held for sale | $ | 946.2 | $ | 45.3 | $ | 1,072.4 | $ | 1,117.7 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 8
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||
Results of Operations Location | 2020 | 2019 | |||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Loss on inventory write-downs | Cost of product sold | $ | 4.1 | $ | 27.2 | ||||||||||||||||||||||||
Contract termination costs | Cost of product sold | 16.9 | 15.8 | ||||||||||||||||||||||||||
Employee termination costs | Selling, general, and administrative expenses | (1.3) | 11.9 | ||||||||||||||||||||||||||
Other costs | Selling, general, and administrative expenses | — | 6.3 | ||||||||||||||||||||||||||
Impairment of long-lived assets | Impairment of assets held for sale | 25.0 | — | ||||||||||||||||||||||||||
$ | 44.7 | $ | 61.2 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 9
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
May 31,
2020 |
February 29,
2020 |
||||||||||
(in millions) | |||||||||||
Derivative instruments designated as hedging instruments | |||||||||||
Foreign currency contracts | $ | 1,668.4 | $ | 1,831.0 | |||||||
Interest rate swap contracts | $ | 375.0 | $ | 375.0 | |||||||
Treasury lock contracts | $ | — | $ | 300.0 | |||||||
Derivative instruments not designated as hedging instruments | |||||||||||
Foreign currency contracts | $ | 323.0 | $ | 1,180.2 | |||||||
Commodity derivative contracts | $ | 268.3 | $ | 282.8 | |||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 10
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Derivative Instruments in
Designated Cash Flow Hedging Relationships |
Net
Gain (Loss) Recognized in OCI |
Location of Net Gain (Loss)
Reclassified from AOCI to Income (Loss) |
Net
Gain (Loss) Reclassified from AOCI to Income (Loss) |
|||||||||||||||||
(in millions) | ||||||||||||||||||||
For the Three Months Ended May 31, 2020 | ||||||||||||||||||||
Foreign currency contracts | $ | (193.4) | Sales | $ | 0.4 | |||||||||||||||
Cost of product sold | (8.5) | |||||||||||||||||||
Interest rate swap contracts | (0.3) | Interest expense | (0.4) | |||||||||||||||||
Treasury lock contracts | (16.1) | Interest expense | — | |||||||||||||||||
$ | (209.8) | $ | (8.5) | |||||||||||||||||
For the Three Months Ended May 31, 2019 | ||||||||||||||||||||
Foreign currency contracts | $ | (2.4) | Sales | $ | — | |||||||||||||||
Cost of product sold | 3.6 | |||||||||||||||||||
$ | (2.4) | $ | 3.6 | |||||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 11
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Derivative Instruments Not
Designated as Hedging Instruments |
Location of Net Gain (Loss)
Recognized in Income (Loss) |
Net
Gain (Loss) Recognized in Income (Loss) |
||||||||||||||||||
(in millions) | ||||||||||||||||||||
For the Three Months Ended May 31, 2020 | ||||||||||||||||||||
Commodity derivative contracts | Cost of product sold | $ | (26.8) | |||||||||||||||||
Foreign currency contracts | Selling, general, and administrative expenses | (25.9) | ||||||||||||||||||
$ | (52.7) | |||||||||||||||||||
For the Three Months Ended May 31, 2019 | ||||||||||||||||||||
Commodity derivative contracts | Cost of product sold | $ | (15.9) | |||||||||||||||||
Foreign currency contracts | Selling, general, and administrative expenses | (3.8) | ||||||||||||||||||
$ | (19.7) | |||||||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 12
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
May 31, 2020 (1) (2)
|
February 29, 2020 (2)
|
||||||||||||||||||||||||||||||||||||||||||||||
New
Tranche A
Warrants (3)
|
New
Tranche B
Warrants (4)
|
New
Tranche A
Warrants (3)
|
New
Tranche B
Warrants (4)
|
November
2017 Canopy
Warrants (3)
|
|||||||||||||||||||||||||||||||||||||||||||
Exercise price (5)
|
C$ | 50.40 | C$ | 76.68 | C$ | 50.40 | C$ | 76.68 | C$ | 12.98 | |||||||||||||||||||||||||||||||||||||
Valuation date stock price (6)
|
C$ | 24.21 | C$ | 24.21 | C$ | 25.17 | C$ | 25.17 | C$ | 25.17 | |||||||||||||||||||||||||||||||||||||
Remaining contractual term (7)
|
3.4 years | 6.4 years | 3.7 years | 6.7 years | 0.2 years | ||||||||||||||||||||||||||||||||||||||||||
Expected volatility (8)
|
70.0 | % | 70.0 | % | 70.0 | % | 70.0 | % | 105.3 | % | |||||||||||||||||||||||||||||||||||||
Risk-free interest rate (9)
|
0.3 | % | 0.4 | % | 1.1 | % | 1.1 | % | 1.5 | % | |||||||||||||||||||||||||||||||||||||
Expected dividend yield (10)
|
0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 13
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
May 31,
2020 |
February 29,
2020 |
||||||||||
Conversion price (1)
|
C$ | 48.17 | C$ | 48.17 | |||||||
Valuation date stock price (2)
|
C$ | 24.21 | C$ | 25.17 | |||||||
Remaining term (3)
|
3.1 years | 3.4 years | |||||||||
Expected volatility (4)
|
60.3 | % | 58.2 | % | |||||||
Risk-free interest rate (5)
|
0.3 | % | 1.1 | % | |||||||
Expected dividend yield (6)
|
0.0 | % | 0.0 | % |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 14
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Fair Value Measurements Using | |||||||||||||||||||||||||||||||||||
Quoted
Prices in Active Markets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
Total | ||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
May 31, 2020 | |||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | — | $ | 11.2 | $ | — | $ | 11.2 | |||||||||||||||||||||||||||
Commodity derivative contracts | $ | — | $ | 1.6 | $ | — | $ | 1.6 | |||||||||||||||||||||||||||
Equity securities (1)
|
$ | — | $ | 693.4 | $ | — | $ | 693.4 | |||||||||||||||||||||||||||
Canopy Debt Securities (1)
|
$ | — | $ | 116.1 | $ | — | $ | 116.1 | |||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | — | $ | 113.2 | $ | — | $ | 113.2 | |||||||||||||||||||||||||||
Commodity derivative contracts | $ | — | $ | 57.8 | $ | — | $ | 57.8 | |||||||||||||||||||||||||||
Interest rate swap contracts | $ | — | $ | 0.6 | $ | — | $ | 0.6 | |||||||||||||||||||||||||||
February 29, 2020 | |||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | — | $ | 96.3 | $ | — | $ | 96.3 | |||||||||||||||||||||||||||
Commodity derivative contracts | $ | — | $ | 0.6 | $ | — | $ | 0.6 | |||||||||||||||||||||||||||
Equity securities (1)
|
$ | — | $ | 991.5 | $ | — | $ | 991.5 | |||||||||||||||||||||||||||
Canopy Debt Securities (1)
|
$ | — | $ | 125.6 | $ | — | $ | 125.6 | |||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | — | $ | 34.4 | $ | — | $ | 34.4 | |||||||||||||||||||||||||||
Commodity derivative contracts | $ | — | $ | 40.9 | $ | — | $ | 40.9 | |||||||||||||||||||||||||||
Interest rate swap contracts | $ | — | $ | 0.8 | $ | — | $ | 0.8 | |||||||||||||||||||||||||||
Treasury lock contracts | $ | — | $ | 7.6 | $ | — | $ | 7.6 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 15
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Fair Value Measurements Using | Total Losses | ||||||||||||||||||||||||||||||||||||||||
Quoted
Prices in Active Markets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
For the Three Months Ended May 31, 2020 | ||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||
Long-lived assets held for sale | $ | — | $ | — | $ | 784.0 | $ | 25.0 | |||||||||||||||||||||||||||||||||
Beer | Wine and Spirits | Consolidated | |||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Balance, February 28, 2019 | $ | 5,167.9 | $ | 2,920.9 | $ | 8,088.8 | |||||||||||||||||||||||
Purchase accounting allocations (1)
|
— | 58.8 | 58.8 | ||||||||||||||||||||||||||
Black Velvet Divestiture | — | (72.2) | (72.2) | ||||||||||||||||||||||||||
Foreign currency translation adjustments | 0.2 | (9.5) | (9.3) | ||||||||||||||||||||||||||
Reclassified (to) from assets held for sale (2)
|
(4.7) | (304.3) | (309.0) | ||||||||||||||||||||||||||
Balance, February 29, 2020 | 5,163.4 | 2,593.7 | 7,757.1 | ||||||||||||||||||||||||||
Foreign currency translation adjustments | (86.2) | (0.6) | (86.8) | ||||||||||||||||||||||||||
Reclassified (to) from assets held for sale (2)
|
0.9 | 13.7 | 14.6 | ||||||||||||||||||||||||||
Balance, May 31, 2020 | $ | 5,078.1 | $ | 2,606.8 | $ | 7,684.9 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 16
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
May 31, 2020 | February 29, 2020 | ||||||||||||||||||||||||||||||||||
Gross
Carrying Amount |
Net
Carrying Amount |
Gross
Carrying Amount |
Net
Carrying Amount |
||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Amortizable intangible assets | |||||||||||||||||||||||||||||||||||
Customer relationships | $ | 87.6 | $ | 30.7 | $ | 87.4 | $ | 31.8 | |||||||||||||||||||||||||||
Other | 20.4 | 0.3 | 20.2 | 0.3 | |||||||||||||||||||||||||||||||
Total | $ | 108.0 | 31.0 | $ | 107.6 | 32.1 | |||||||||||||||||||||||||||||
Nonamortizable intangible assets | |||||||||||||||||||||||||||||||||||
Trademarks | 2,704.4 | 2,686.8 | |||||||||||||||||||||||||||||||||
Total intangible assets | $ | 2,735.4 | $ | 2,718.9 |
May 31, 2020 | February 29, 2020 | ||||||||||||||||||||||||||||||||||
Carrying Value |
Ownership Percentage (1)
|
Carrying Value |
Ownership Percentage (1)
|
||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Canopy Equity Method Investment | $ | 2,667.6 | 35.2 | % | $ | 2,911.7 | 35.3 | % | |||||||||||||||||||||||||||
Other equity method investments (2)
|
218.1 |
20%-50%
|
182.2 |
20%-50%
|
|||||||||||||||||||||||||||||||
$ | 2,885.7 | $ | 3,093.9 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 17
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 18
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 19
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 80.3 | $ | 70.7 | |||||||||||||||||||||||||
Gross profit (loss) | $ | (57.3) | $ | 11.3 | |||||||||||||||||||||||||
Net income (loss) | $ | (973.6) | $ | (268.9) | |||||||||||||||||||||||||
Net income (loss) attributable to Canopy | $ | (953.4) | $ | (284.1) |
May 31, 2020 |
February 29,
2020 |
||||||||||||||||||||||||||||||||||
Current | Long-term | Total | Total | ||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Short-term borrowings | |||||||||||||||||||||||||||||||||||
Commercial paper | $ | — | $ | 238.9 | |||||||||||||||||||||||||||||||
$ | — | $ | 238.9 | ||||||||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||||||||||
Term loan credit facilities | $ | 24.6 | $ | 1,015.1 | $ | 1,039.7 | $ | 1,295.7 | |||||||||||||||||||||||||||
Senior notes | 499.4 | 10,612.9 | 11,112.3 | 10,624.7 | |||||||||||||||||||||||||||||||
Other | 10.7 | 11.3 | 22.0 | 25.3 | |||||||||||||||||||||||||||||||
$ | 534.7 | $ | 11,639.3 | $ | 12,174.0 | $ | 11,945.7 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 20
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 21
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Amount | Maturity | ||||||||||
(in millions) | |||||||||||
2020 Credit Agreement | |||||||||||
Revolving Credit Facility (1) (2)
|
$ | 2,000.0 | Sept 14, 2023 | ||||||||
2020 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 | ||||||||||
March 2020 Term Credit Agreement | |||||||||||
2019 Five-Year Term Facility (1) (3)
|
$ | 491.3 | Jun 28, 2024 |
2020 Credit Agreement |
2020 Term Credit
Agreement |
March 2020 Term Credit Agreement | |||||||||||||||||||||||||||
Revolving
Credit Facility |
Three-Year
Term
Facility (1) (2)
|
Five-Year
Term
Facility (1) (2)
|
2019 Five-Year Term Facility (1)
|
||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Outstanding borrowings | $ | — | $ | 249.8 | $ | 317.1 | $ | 472.8 | |||||||||||||||||||||
Interest rate | — | % | 1.5 | % | 1.6 | % | 1.2 | % | |||||||||||||||||||||
LIBOR margin | — | % | 1.13 | % | 1.25 | % | 0.88 | % | |||||||||||||||||||||
Outstanding letters of credit | $ | 11.8 | |||||||||||||||||||||||||||
Remaining borrowing capacity (3)
|
$ | 1,988.2 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 22
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Date of | Redemption | |||||||||||||||||||||||||||||||||||||||||||
Principal | Maturity | Interest Payments | Stated Redemption Rate | Stated Basis Points | ||||||||||||||||||||||||||||||||||||||||
(in millions, except basis points) | ||||||||||||||||||||||||||||||||||||||||||||
2.875% Senior Notes (1) (2)
|
$ | 600.0 | May 2030 | May/Nov | Feb 2030 | 35 | ||||||||||||||||||||||||||||||||||||||
3.75% Senior Notes (1) (2)
|
$ | 600.0 | May 2050 | May/Nov | Nov 2049 | 40 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 23
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(in millions) | |||||
2021 | $ | 26.8 | |||
2022 | 1,432.2 | ||||
2023 | 1,828.9 | ||||
2024 | 1,393.7 | ||||
2025 | 780.7 | ||||
2026 | 400.0 | ||||
Thereafter | 6,400.0 | ||||
$ | 12,262.3 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 24
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Class 1 | Class A | Class B | |||||||||||||||||||||||||||||||||||||||||||
Balance at February 29, 2020 | 186,090,745 | 28,300,206 | 1,692,227 | 18,256,826 | 5,005,800 | ||||||||||||||||||||||||||||||||||||||||||
Conversion of shares | 2,532 | (2,532) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | 2,576 | (44,593) | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock units (1)
|
— | — | — | (76,019) | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of performance share units (1)
|
— | — | — | (17,335) | — | ||||||||||||||||||||||||||||||||||||||||||
Balance at May 31, 2020 | 186,093,277 | 28,297,674 | 1,694,803 | 18,118,879 | 5,005,800 | ||||||||||||||||||||||||||||||||||||||||||
Balance at February 28, 2019 | 185,740,178 | 28,322,419 | 1,149,624 | 18,927,966 | 5,005,800 | ||||||||||||||||||||||||||||||||||||||||||
Conversion of shares | 133,667 | (55) | (133,612) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | 2,107 | (173,725) | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock units (1)
|
— | — | — | (88,683) | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of performance share units (1)
|
— | — | — | (29,015) | — | ||||||||||||||||||||||||||||||||||||||||||
Cancellation of restricted shares | — | — | — | 444 | — | ||||||||||||||||||||||||||||||||||||||||||
Balance at May 31, 2019 | 185,873,845 | 28,322,364 | 1,018,119 | 18,636,987 | 5,005,800 | ||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended
May 31, |
|||||||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||
Restricted Stock Units | 37,506 | ||||||||||||||||||||||||||||
Performance Share Units | 9,433 | ||||||||||||||||||||||||||||
2019 | |||||||||||||||||||||||||||||
Restricted Stock Units | 48,562 | ||||||||||||||||||||||||||||
Performance Share Units | 17,439 |
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 | $ | 1,045.9 | 4,897,605 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 25
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
May 31, 2020 | May 31, 2019 | ||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||
Class A (1)
|
Class B |
Class A (1)
|
Class B | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share data) | |||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to CBI allocated –
basic and diluted |
$ | (158.0) | $ | (19.9) | $ | (217.7) | $ | (27.7) | |||||||||||||||||||||||||||||||||
Weighted average common shares outstanding –
basic and diluted |
169.604 | 23.293 | 168.118 | 23.317 | |||||||||||||||||||||||||||||||||||||
Net income (loss) per common share attributable to CBI –
basic and diluted |
$ | (0.94) | $ | (0.86) | $ | (1.30) | $ | (1.19) | |||||||||||||||||||||||||||||||||
(1)
|
We have excluded the following weighted average common shares outstanding from the calculation of diluted net income (loss) per common share, as the effect of including these would have been anti-dilutive:
|
||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
May 31, 2020 | May 31, 2019 | ||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||
Class B Convertible Common Stock | 23.293 | 23.317 | |||||||||||||||||||||||||||||||||||||||
Stock-based awards, primarily stock options | 1.908 | 3.433 | |||||||||||||||||||||||||||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 26
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Before Tax
Amount |
Tax (Expense)
Benefit |
Net of Tax
Amount |
|||||||||||||||
(in millions) | |||||||||||||||||
For the Three Months Ended May 31, 2020 | |||||||||||||||||
Net income (loss) attributable to CBI | $ | (177.9) | |||||||||||||||
Other comprehensive income (loss) attributable to CBI: | |||||||||||||||||
Foreign currency translation adjustments: | |||||||||||||||||
Net gain (loss) | $ | (619.9) | $ | — | (619.9) | ||||||||||||
Reclassification adjustments | — | — | — | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | (619.9) | — | (619.9) | ||||||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||||
Net derivative gain (loss) | (200.5) | 5.3 | (195.2) | ||||||||||||||
Reclassification adjustments | 7.7 | (0.5) | 7.2 | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | (192.8) | 4.8 | (188.0) | ||||||||||||||
Pension/postretirement adjustments: | |||||||||||||||||
Net actuarial gain (loss) | 0.5 | (0.2) | 0.3 | ||||||||||||||
Reclassification adjustments | — | — | — | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | 0.5 | (0.2) | 0.3 | ||||||||||||||
Share of OCI of equity method investments | |||||||||||||||||
Net gain (loss) | 52.5 | (1.0) | 51.5 | ||||||||||||||
Reclassification adjustments | — | — | — | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | 52.5 | (1.0) | 51.5 | ||||||||||||||
Other comprehensive income (loss) attributable to CBI | $ | (759.7) | $ | 3.6 | (756.1) | ||||||||||||
Comprehensive income (loss) attributable to CBI | $ | (934.0) | |||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 27
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Before Tax
Amount |
Tax (Expense)
Benefit |
Net of Tax
Amount |
|||||||||||||||
(in millions) | |||||||||||||||||
For the Three Months Ended May 31, 2019 | |||||||||||||||||
Net income (loss) attributable to CBI | $ | (245.4) | |||||||||||||||
Other comprehensive income (loss) attributable to CBI: | |||||||||||||||||
Foreign currency translation adjustments: | |||||||||||||||||
Net gain (loss) | $ | 18.3 | $ | — | 18.3 | ||||||||||||
Reclassification adjustments | — | — | — | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | 18.3 | — | 18.3 | ||||||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||||
Net derivative gain (loss) | (4.4) | 1.7 | (2.7) | ||||||||||||||
Reclassification adjustments | (2.3) | (0.6) | (2.9) | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | (6.7) | 1.1 | (5.6) | ||||||||||||||
Pension/postretirement adjustments: | |||||||||||||||||
Net actuarial gain (loss) | 0.1 | — | 0.1 | ||||||||||||||
Reclassification adjustments | — | — | — | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | 0.1 | — | 0.1 | ||||||||||||||
Share of OCI of equity method investments | |||||||||||||||||
Net gain (loss) | (18.8) | 4.4 | (14.4) | ||||||||||||||
Reclassification adjustments | — | — | — | ||||||||||||||
Net gain (loss) recognized in other comprehensive income (loss) | (18.8) | 4.4 | (14.4) | ||||||||||||||
Other comprehensive income (loss) attributable to CBI | $ | (7.1) | $ | 5.5 | (1.6) | ||||||||||||
Comprehensive income (loss) attributable to CBI | $ | (247.0) | |||||||||||||||
Foreign
Currency Translation Adjustments |
Net
Unrealized Gain (Loss) on Derivative Instruments |
Pension/
Postretirement Adjustments |
Share of OCI of Equity Method Investments |
Accumulated
Other Comprehensive Income (Loss) |
|||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Balance, February 29, 2020 | $ | (345.7) | $ | 62.5 | $ | (2.6) | $ | 19.5 | $ | (266.3) | |||||||||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassification adjustments | (619.9) | (195.2) | 0.3 | 51.5 | (763.3) | ||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 7.2 | — | — | 7.2 | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | (619.9) | (188.0) | 0.3 | 51.5 | (756.1) | ||||||||||||||||||||||||||||||
Balance, May 31, 2020 | $ | (965.6) | $ | (125.5) | $ | (2.3) | $ | 71.0 | $ | (1,022.4) |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 28
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Cost of product sold | |||||||||||||||||||||||||||||
Strategic business development costs | $ | (24.3) | $ | (44.5) | |||||||||||||||||||||||||
Net gain (loss) on undesignated commodity derivative contracts | (26.8) | (15.9) | |||||||||||||||||||||||||||
COVID-19 incremental costs | (4.6) | — | |||||||||||||||||||||||||||
Settlements of undesignated commodity derivative contracts | 10.4 | 1.8 | |||||||||||||||||||||||||||
Accelerated depreciation | — | (3.5) | |||||||||||||||||||||||||||
Flow through of inventory step-up | — | (0.4) | |||||||||||||||||||||||||||
Total cost of product sold | (45.3) | (62.5) |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 29
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||||||||||||||||
Net gain (loss) on foreign currency derivative contracts | (8.0) | — | |||||||||||||||||||||||||||
COVID-19 incremental costs | (6.5) | — | |||||||||||||||||||||||||||
Restructuring and other strategic business development costs | (3.1) | (23.6) | |||||||||||||||||||||||||||
Transaction, integration, and other acquisition-related costs | (0.8) | (2.3) | |||||||||||||||||||||||||||
Other gains (losses) (1)
|
7.4 | 13.4 | |||||||||||||||||||||||||||
Total selling, general, and administrative expenses | (11.0) | (12.5) | |||||||||||||||||||||||||||
Impairment of assets held for sale | (25.0) | — | |||||||||||||||||||||||||||
Comparable Adjustments, Operating income (loss) | $ | (81.3) | $ | (75.0) |
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Beer | |||||||||||||||||||||||||||||
Net sales | $ | 1,384.1 | $ | 1,477.4 | |||||||||||||||||||||||||
Segment operating income (loss) | $ | 577.8 | $ | 580.6 | |||||||||||||||||||||||||
Capital expenditures | $ | 108.3 | $ | 102.1 | |||||||||||||||||||||||||
Depreciation and amortization | $ | 44.3 | $ | 54.3 | |||||||||||||||||||||||||
Wine and Spirits | |||||||||||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||||||
Wine | $ | 499.6 | $ | 535.0 | |||||||||||||||||||||||||
Spirits | 79.7 | 84.8 | |||||||||||||||||||||||||||
Net sales | $ | 579.3 | $ | 619.8 | |||||||||||||||||||||||||
Segment operating income (loss) | $ | 164.0 | $ | 160.8 | |||||||||||||||||||||||||
Income (loss) from unconsolidated investments | $ | 3.5 | $ | 4.0 | |||||||||||||||||||||||||
Equity method investments (1)
|
$ | 121.9 | $ | 82.7 | |||||||||||||||||||||||||
Capital expenditures | $ | 9.5 | $ | 26.9 | |||||||||||||||||||||||||
Depreciation and amortization | $ | 22.5 | $ | 25.0 | |||||||||||||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 30
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Corporate Operations and Other | |||||||||||||||||||||||||||||
Segment operating income (loss) | $ | (50.5) | $ | (43.7) | |||||||||||||||||||||||||
Income (loss) from unconsolidated investments | $ | 0.2 | $ | (1.1) | |||||||||||||||||||||||||
Equity method investments | $ | 96.3 | $ | 68.4 | |||||||||||||||||||||||||
Capital expenditures | $ | 26.4 | $ | 26.7 | |||||||||||||||||||||||||
Depreciation and amortization | $ | 5.6 | $ | 5.3 | |||||||||||||||||||||||||
Canopy | |||||||||||||||||||||||||||||
Net sales | $ | 80.3 | $ | 70.7 | |||||||||||||||||||||||||
Segment operating income (loss) | $ | (733.2) | $ | (170.0) | |||||||||||||||||||||||||
Capital expenditures | $ | 70.0 | $ | 112.2 | |||||||||||||||||||||||||
Depreciation and amortization | $ | 30.1 | $ | 17.6 | |||||||||||||||||||||||||
Consolidation and Eliminations | |||||||||||||||||||||||||||||
Net sales | $ | (80.3) | $ | (70.7) | |||||||||||||||||||||||||
Operating income (loss) | $ | 733.2 | $ | 170.0 | |||||||||||||||||||||||||
Income (loss) from unconsolidated investments | $ | (31.7) | $ | (54.4) | |||||||||||||||||||||||||
Equity method investments | $ | 2,667.5 | $ | 3,279.3 | |||||||||||||||||||||||||
Capital expenditures | $ | (70.0) | $ | (112.2) | |||||||||||||||||||||||||
Depreciation and amortization | $ | (30.1) | $ | (17.6) | |||||||||||||||||||||||||
Comparable Adjustments | |||||||||||||||||||||||||||||
Operating income (loss) | $ | (81.3) | $ | (75.0) | |||||||||||||||||||||||||
Income (loss) from unconsolidated investments | $ | (543.2) | $ | (879.1) | |||||||||||||||||||||||||
Depreciation and amortization | $ | — | $ | 3.5 | |||||||||||||||||||||||||
Consolidated | |||||||||||||||||||||||||||||
Net sales | $ | 1,963.4 | $ | 2,097.2 | |||||||||||||||||||||||||
Operating income (loss) | $ | 610.0 | $ | 622.7 | |||||||||||||||||||||||||
Income (loss) from unconsolidated investments (2)
|
$ | (571.2) | $ | (930.6) | |||||||||||||||||||||||||
Equity method investments (1)
|
$ | 2,885.7 | $ | 3,430.4 | |||||||||||||||||||||||||
Capital expenditures | $ | 144.2 | $ | 155.7 | |||||||||||||||||||||||||
Depreciation and amortization | $ | 72.4 | $ | 88.1 | |||||||||||||||||||||||||
(1)
|
Equity method investments balance at May 31, 2020, exclude amounts reclassified to assets held for sale.
|
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 31
|
FINANCIAL STATEMENTS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(2)
|
Income (loss) from unconsolidated investments consists of: | ||||||||||||||||||||||||||||||||||||||||
For the Three Months
Ended May 31, |
|||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||
Unrealized net gain (loss) on securities measured at fair value | $ | (197.3) | $ | (827.5) | |||||||||||||||||||||||||||||||||||||
Equity in earnings (losses) from Canopy and related activities | (377.6) | (106.0) | |||||||||||||||||||||||||||||||||||||||
Equity in earnings (losses) from other equity method investees | 3.7 | 3.0 | |||||||||||||||||||||||||||||||||||||||
Net gain (loss) on sale of unconsolidated investment | — | (0.1) | |||||||||||||||||||||||||||||||||||||||
$ | (571.2) | $ | (930.6) |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 32
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 33
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 34
|
MD&A |
Wine Brands |
Wine Portfolio
of Brands |
Spirits Brands | ||||||||||||||||||||||||
● 7 Moons
|
● Drylands
|
● SIMI
|
● Charles Smith
|
● Casa Noble
|
||||||||||||||||||||||
● Auros
|
● Kim Crawford
|
● Spoken Barrel
|
● Prisoner
|
● High West
|
||||||||||||||||||||||
● Champagne Palmer & Co
|
● Meiomi
|
● Robert Mondavi
|
● Mi CAMPO
|
|||||||||||||||||||||||
● Cooper & Thief
|
● Mount Veeder
|
● Schrader
|
● Nelson’s Green Brier
|
|||||||||||||||||||||||
● Crafters Union
|
● Nobilo (1)
|
● SVEDKA
|
||||||||||||||||||||||||
● Cuvée Sauvage
|
● Ruffino
|
● The Real McCoy
|
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 35
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 36
|
MD&A |
Date of
Investment |
Investment |
First
Quarter 2021 |
First
Quarter 2020 |
|||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
Nov 2017 |
Warrants (1)
|
$ | (61.8) | $ | (134.1) | |||||||||||||||||||||||||||
June 2018 | Convertible debt securities | (12.5) | (32.6) | |||||||||||||||||||||||||||||
Nov 2018 | Warrants | (123.0) | (660.8) | |||||||||||||||||||||||||||||
$ | (197.3) | $ | (827.5) |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 37
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 38
|
MD&A |
Net Sales | Gross Profit |
Marketing (1)
|
|||||||||||||||
(in millions) | |||||||||||||||||
First Quarter 2021 | |||||||||||||||||
Wine and Spirits segment results | $ | 187 | $ | 78 | $ | 1 | |||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 39
|
MD&A |
First
Quarter 2021 |
First
Quarter 2020 |
||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Cost of product sold | |||||||||||||||||||||||
Net gain (loss) on undesignated commodity derivative contracts | $ | (26.8) | $ | (15.9) | |||||||||||||||||||
Strategic business development costs | (24.3) | (44.5) | |||||||||||||||||||||
COVID-19 incremental costs | (4.6) | — | |||||||||||||||||||||
Settlements of undesignated commodity derivative contracts | 10.4 | 1.8 | |||||||||||||||||||||
Accelerated depreciation | — | (3.5) | |||||||||||||||||||||
Flow through of inventory step-up | — | (0.4) | |||||||||||||||||||||
Total cost of product sold | (45.3) | (62.5) | |||||||||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||||||||||
Net gain (loss) on foreign currency derivative contracts | (8.0) | — | |||||||||||||||||||||
COVID-19 incremental costs | (6.5) | — | |||||||||||||||||||||
Restructuring and other strategic business development costs | (3.1) | (23.6) | |||||||||||||||||||||
Transaction, integration, and other acquisition-related costs | (0.8) | (2.3) | |||||||||||||||||||||
Other gains (losses)
|
7.4 | 13.4 | |||||||||||||||||||||
Total selling, general, and administrative expenses | (11.0) | (12.5) | |||||||||||||||||||||
Impairment of assets held for sale | (25.0) | — | |||||||||||||||||||||
Comparable Adjustments, Operating income (loss) | $ | (81.3) | $ | (75.0) | |||||||||||||||||||
Income (loss) from unconsolidated investments | $ | (543.2) | $ | (879.1) |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 40
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 41
|
MD&A |
First
Quarter 2021 |
First
Quarter 2020 |
Dollar
Change |
Percent
Change |
||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Beer | $ | 1,384.1 | $ | 1,477.4 | $ | (93.3) | (6 | %) | |||||||||||||||
Wine and Spirits: | |||||||||||||||||||||||
Wine | 499.6 | 535.0 | (35.4) | (7 | %) | ||||||||||||||||||
Spirits | 79.7 | 84.8 | (5.1) | (6 | %) | ||||||||||||||||||
Total Wine and Spirits | 579.3 | 619.8 | (40.5) | (7 | %) | ||||||||||||||||||
Canopy | 80.3 | 70.7 | 9.6 | 14 | % | ||||||||||||||||||
Consolidation and Eliminations | (80.3) | (70.7) | (9.6) | (14 | %) | ||||||||||||||||||
Consolidated net sales | $ | 1,963.4 | $ | 2,097.2 | $ | (133.8) | (6 | %) |
Beer segment
|
First
Quarter 2021 |
First
Quarter 2020 |
Dollar
Change |
Percent
Change |
||||||||||||||||||||||||||||||||||||||||
(in millions, branded product, 24-pack, 12-ounce case equivalents) | ||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 1,384.1 | $ | 1,477.4 | $ | (93.3) | (6 | %) | ||||||||||||||||||||||||||||||||||||
Shipment volume | ||||||||||||||||||||||||||||||||||||||||||||
Total | 76.2 | 82.1 | (7.2 | %) | ||||||||||||||||||||||||||||||||||||||||
Organic (1)
|
76.2 | 81.3 | (6.3 | %) | ||||||||||||||||||||||||||||||||||||||||
Depletion volume (1) (2)
|
5.6 | % |
|
The decrease in Beer net sales is primarily due to $89.3 million of volume decline within our Mexican beer portfolio, which was impacted by COVID-19 containment measures negatively affecting on-premise sales and production activity at our major breweries in Mexico, and $28.6 million from the Ballast Point Divestiture. The decline was partially offset by an $18.7 million favorable impact from pricing in select markets within our Mexican beer portfolio. The depletion volume trend outpaced the shipment volume trend for First Quarter Fiscal 2021, driven by reduced production activity in response to COVID-19 containment measures. We expect shipment volume will begin to align with depletion volume during the third quarter of fiscal 2021 as we replenish distribution channels and COVID-19 containment measures allow for return to on-premise.
|
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 42
|
MD&A |
Wine and Spirits segment
|
First
Quarter 2021 |
First
Quarter 2020 |
Dollar
Change |
Percent
Change |
||||||||||||||||||||||
(in millions, branded product, 9-liter case equivalents) | ||||||||||||||||||||||||||
Net sales | $ | 579.3 | $ | 619.8 | $ | (40.5) | (7 | %) | ||||||||||||||||||
Shipment volume | ||||||||||||||||||||||||||
Total | 10.8 | 12.4 | (12.9 | %) | ||||||||||||||||||||||
Organic (3)
|
10.8 | 11.9 | (9.2 | %) | ||||||||||||||||||||||
U.S. Domestic | 9.9 | 11.3 | (12.4 | %) | ||||||||||||||||||||||
Organic U.S. Domestic (3)
|
9.9 | 10.8 | (8.3 | %) | ||||||||||||||||||||||
U.S. Domestic Power Brands | 5.0 | 4.5 | 11.1 | % | ||||||||||||||||||||||
Depletion volume (2)
|
||||||||||||||||||||||||||
U.S. Domestic (3)
|
(1.1 | %) | ||||||||||||||||||||||||
U.S. Domestic Power Brands | 4.7 | % |
|
The decrease in Wine and Spirits net sales is primarily due to a $49.7 million decline in branded wine and spirits volume and $18.7 million from the Black Velvet Divestiture, partially offset by $20.8 million from favorable pricing and $13.6 million increase from favorable product mix shift. The Wine and Spirits First Quarter 2021 results have been negatively impacted by (i) on-premise and retail tasting room closures as a result of COVID-19 containment measures and (ii) transition activities with distributors who are repositioning for ownership of brands upon closing the Wine and Spirits Transactions, partially offset by an increase in off-premise, including eCommerce. During Fiscal 2021 as these transition activities with distributors continue to occur we do not expect shipment volume to be aligned with depletion volume.
|
|
Canopy segment
Our ownership interest in Canopy allows us to exercise significant influence, but not control, and, therefore, we account for our investment in Canopy under the equity method. Amounts included for the Canopy segment represent 100% of Canopy’s reported results on a two-month lag, prepared in accordance with U.S. GAAP, and converted from Canadian dollars to U.S. dollars. Although we own less than 100% of the outstanding shares of Canopy, 100% of the Canopy results are included and subsequently eliminated in order to reconcile to our consolidated financial statements. See “Income (Loss) from Unconsolidated Investments” below for a discussion of Canopy’s net sales, gross profit (loss), selling, general, and administrative expenses, and operating income (loss).
|
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 43
|
MD&A |
|
The decrease in Beer is primarily due to $50.4 million of volume decline and $7.0 million of higher cost of product sold, partially offset by $18.7 million favorable impact from pricing. The higher cost of product sold is largely related to COVID-19 containment measures and increased focus on the production of our fastest moving products and packaging sizes to meet forecasted demand. This drove a $9.8 million increase in operational costs primarily consisting of higher material costs, including glass, pallets, and cartons, and unfavorable fixed cost absorption.
|
|
The decrease in Wine and Spirits is largely due to $19.7 million of decline in branded wine and spirits volume, a decrease of $8.5 million in gross profit due to the Black Velvet Divestiture, $5.1 million of decline driven by retail tasting room closures as a result of COVID-19 containment measures, and $3.8 million higher cost of product sold, partially offset by $20.8 million from favorable pricing and $8.5 million of favorable product mix shift.
|
First
Quarter 2021 |
First
Quarter 2020 |
Dollar
Change |
Percent
Change |
||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Beer | $ | 191.9 | $ | 238.9 | $ | (47.0) | (20 | %) | |||||||||||||||
Wine and Spirits | 99.9 | 110.9 | (11.0) | (10 | %) | ||||||||||||||||||
Corporate Operations and Other | 50.5 | 43.7 | 6.8 | 16 | % | ||||||||||||||||||
Canopy | 675.9 | 181.3 | 494.6 | NM | |||||||||||||||||||
Consolidation and Eliminations | (675.9) | (181.3) | (494.6) | NM | |||||||||||||||||||
Comparable Adjustments | 11.0 | 12.5 | (1.5) | (12 | %) | ||||||||||||||||||
Consolidated selling, general, and administrative expenses | $ | 353.3 | $ | 406.0 | $ | (52.7) | (13 | %) |
|
The decrease in Beer is primarily due to a decrease of $41.2 million in marketing spend that largely resulted from COVID-19 containment measures. Our planned investment to support the growth of our Mexican beer portfolio through media and event sponsorships was suspended and/or canceled in First Quarter 2021. The favorable marketing spend as a percentage of net sales recognized in First Quarter 2021 is expected to return to targeted assumptions during the remainder of Fiscal 2021.
|
|
The decrease in Wine and Spirits is primarily due to a decrease of $9.6 million in general and administrative expenses. The decrease in general and administrative expenses is largely driven by certain cost saving initiatives including decreased compensation and benefits and decreased travel and entertainment expenses resulting from COVID-19 containment measures.
|
|
The increase in Corporate Operations and Other is largely due to approximately $5 million of unfavorable foreign currency losses and an increase of approximately $3 million in charitable contributions, primarily driven by COVID-19 support efforts.
|
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 44
|
MD&A |
First
Quarter 2021 |
First
Quarter 2020 |
Dollar
Change |
Percent
Change |
||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Beer | $ | 577.8 | $ | 580.6 | $ | (2.8) | — | % | |||||||||||||||
Wine and Spirits | 164.0 | 160.8 | 3.2 | 2 | % | ||||||||||||||||||
Corporate Operations and Other | (50.5) | (43.7) | (6.8) | (16 | %) | ||||||||||||||||||
Canopy | (733.2) | (170.0) | (563.2) | NM | |||||||||||||||||||
Consolidation and Eliminations | 733.2 | 170.0 | 563.2 | NM | |||||||||||||||||||
Comparable Adjustments | (81.3) | (75.0) | (6.3) | (8 | %) | ||||||||||||||||||
Consolidated operating income (loss) | $ | 610.0 | $ | 622.7 | $ | (12.7) | (2 | %) |
|
The decrease in Beer is primarily attributable to the net sales decline and higher cost of product sold, partially offset by decreased marketing spend and favorable pricing impact.
|
|
The decrease in Wine and Spirits was driven by the decline in branded wine and spirits volume and the Black Velvet Divestiture, partially offset by favorable pricing and decreased compensation and benefits.
|
|
As previously discussed, the Corporate Operations and Other increase in operating loss is due largely to unfavorable foreign currency losses and an increase in charitable contributions.
|
|
Canopy segment
Canopy net sales increased to $80.3 million for First Quarter 2021 from $70.7 million for First Quarter 2020. This increase of $9.6 million, or 14% is primarily attributable to an increase in medical sales, largely resulting from their April 2019 acquisition of C3, Europe’s largest cannabinoid-based pharmaceuticals company, partially offset by a decline in Canadian recreational sales. Canopy gross profit (loss) decreased to $(57.3) million for First Quarter 2021 from $11.3 million or First Quarter 2020. This decrease of $68.6 million is primarily driven by inventory write-downs related to its organizational and strategic review of their business and detailed evaluation of inventory. Canopy selling, general, and administrative expenses increased $494.6 million primarily from their decision to close greenhouse facilities as well as other changes related to its organizational and strategic review of their business. The combination of these factors were the main contributors to the decrease in operating income (loss) of $563.2 million.
|
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 45
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 46
|
MD&A |
First
Quarter 2021 |
First
Quarter 2020 |
Dollar
Change |
|||||||||||||||
(in millions) | |||||||||||||||||
Net cash provided by (used in): | |||||||||||||||||
Operating activities | $ | 686.5 | $ | 593.1 | $ | 93.4 | |||||||||||
Investing activities | (299.1) | (213.5) | (85.6) | ||||||||||||||
Financing activities | (169.0) | (374.4) | 205.4 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 3.0 | (0.1) | 3.1 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 221.4 | $ | 5.1 | $ | 216.3 |
First
Quarter 2021 |
First
Quarter 2020 |
Dollar
Change |
|||||||||||||||
(in millions) | |||||||||||||||||
Net proceeds from (payments of) debt, current and long-term, and related activities | $ | (21.9) | $ | (227.9) | $ | 206.0 | |||||||||||
Dividends paid | (143.9) | (143.0) | (0.9) | ||||||||||||||
Net cash provided by stock-based compensation activities | (3.2) | (3.5) | 0.3 | ||||||||||||||
Net cash provided by (used in) financing activities | $ | (169.0) | $ | (374.4) | $ | 205.4 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 47
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 48
|
MD&A |
Remaining Borrowing Capacity | |||||||||||||||||
May 31,
2020 |
June 26,
2020 |
||||||||||||||||
(in millions) | |||||||||||||||||
Revolving Credit Facility (1)
|
$ | 1,988.2 | $ | 1,988.2 | |||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 49
|
MD&A |
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 | $ | 1,045.9 | 4,897,605 | ||||||||||||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 50
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 51
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 52
|
MD&A |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 53
|
OTHER KEY INFORMATION |
Aggregate
Notional Value |
Fair Value,
Net Asset (Liability) |
Increase (Decrease)
in Fair Value – Hypothetical 10% Adverse Change |
|||||||||||||||||||||||||||||||||||||||||||||||||||
May 31,
2020 |
May 31,
2019 |
May 31,
2020 |
May 31,
2019 |
May 31,
2020 |
May 31,
2019 |
||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 1,991.4 | $ | 2,155.5 | $ | (102.0) | $ | 13.9 | $ | 144.9 | $ | (157.5) | |||||||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | $ | 268.3 | $ | 271.3 | $ | (56.2) | $ | (17.3) | $ | 19.8 | $ | 22.2 |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 54
|
OTHER KEY INFORMATION |
Aggregate
Notional Value |
Fair Value,
Net Asset (Liability) |
Increase (Decrease)
in Fair Value –
Hypothetical
1% Rate Increase (1)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
May 31,
2020 |
May 31,
2019 |
May 31,
2020 |
May 31,
2019 |
May 31,
2020 |
May 31,
2019 |
||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed interest rate debt | $ | 10,572.0 | $ | 10,274.8 | $ | (11,445.0) | $ | (10,487.0) | $ | (841.2) | $ | (616.5) | |||||||||||||||||||||||||||||||||||||||||
Interest rate swap contracts | $ | 375.0 | $ | — | $ | (0.6) | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 55
|
OTHER KEY INFORMATION |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 56
|
OTHER KEY INFORMATION |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 57
|
OTHER KEY INFORMATION |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 58
|
OTHER KEY INFORMATION |
4.14 | ||||||||
4.15 | ||||||||
4.16 | ||||||||
4.17 | ||||||||
4.18 | ||||||||
4.19 | ||||||||
4.20 | ||||||||
4.21 | ||||||||
4.22 | ||||||||
4.23 | ||||||||
4.24 | ||||||||
4.25 | ||||||||
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 59
|
OTHER KEY INFORMATION |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 60
|
OTHER KEY INFORMATION |
10.3 | ||||||||
10.4 | ||||||||
10.5 | ||||||||
10.6 | ||||||||
10.7 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
99.1 | ||||||||
99.2 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (filed herewith). | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document (filed herewith). | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith). | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith). | |||||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document (filed herewith). | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith). | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 61
|
OTHER KEY INFORMATION |
* | Designates management contract or compensatory plan or arrangement. | ||||
# | Company’s Commission File No. 001-08495. | ||||
† | The exhibits, disclosure schedules, and other schedules, as applicable, have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Constellation Brands, Inc. agrees to furnish supplementally a copy of such exhibits, disclosure schedules, and other schedules, as applicable, or any section thereof, to the SEC upon request. | ||||
‡ | Portions of this exhibit are redacted pursuant to Item 601(b)(2)(ii) of Regulation S-K. |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 62
|
CONSTELLATION BRANDS, INC. | ||||||||||||||
Date: | July 1, 2020 | By: | /s/ Kenneth W. Metz | |||||||||||
Kenneth W. Metz, Vice President
and Controller |
||||||||||||||
Date: | July 1, 2020 | By: | /s/ Garth Hankinson | |||||||||||
Garth Hankinson, Executive Vice President and
Chief Financial Officer (principal financial officer and principal accounting officer) |
Constellation Brands, Inc. Q1 FY 2021 Form 10-Q |
#WORTHREACHINGFOR I 63
|
Very truly yours, | ||||||||||||||
CONSTELLATION BRANDS, INC. | ||||||||||||||
By: /s/ Blair Veenema | ||||||||||||||
Name: Blair Veenema | ||||||||||||||
Title:Vice President, Corporate Development |
By: /s/ Doug Vilas | |||||||||||
Name : Doug Vilas | |||||||||||
Title: Chief Executive Officer | |||||||||||
Date: May 22, 2020 | |||||||||||
Name of Participant: | |||||
Grant Date: | |||||
Number of Options Granted: | |||||
Exercise Price: | |||||
Vesting Dates: |
•1st anniversary of the Grant Date: 25% of the Shares subject to the Options (“Option Shares”)
•2nd anniversary of the Grant Date: 25% of Option Shares
•3rd anniversary of the Grant Date: 25% of Option Shares
•4th anniversary of the Grant Date: remaining balance of Option Shares
|
||||
Earliest Retirement Date:
|
The first November 1st that is at least six months following the Grant Date
|
||||
Termination Date: |
Name of Participant: | |||||
Grant Date: | |||||
Number of Restricted Stock Units: | |||||
Vesting Dates: |
•The first May 1st that is at least six months following the Grant Date (the “Initial Vesting Date”): 25% of the Restricted Stock Units
•1st anniversary of the Initial Vesting Date: 25% of Restricted Stock Units
•2nd anniversary of the Initial Vesting Date: 25% of Restricted Stock Units
•3rd anniversary of the Initial Vesting Date (the “Final Vesting Date”): remaining balance of Restricted Stock Units
|
||||
Earliest Retirement Date:
|
The first November 1st that is at least six months following the Grant Date
|
Name of Participant: | |||||
Grant Date: | |||||
Target Number of Performance Share Units: | |||||
Service Vesting Date: | |||||
Earliest Retirement Date:
|
The first November 1st that is at least six months following the Date of Grant | ||||
PSU Payment Period
|
Within the two-week period following the Service Vesting Date |
/s/ William A. Newlands | ||
William A. Newlands | ||
President and
Chief Executive Officer |
/s/ Garth Hankinson | ||
Garth Hankinson | ||
Executive Vice President and
Chief Financial Officer |
Dated: | July 1, 2020 | /s/ William A. Newlands | ||||||
William A. Newlands
President and Chief Executive Officer |
Dated: | July 1, 2020 | /s/ Garth Hankinson | ||||||
Garth Hankinson
Executive Vice President and Chief Financial Officer |