Comparable Measures
Comparable measures are provided because management uses this information in evaluating the results of the core operations of the Company and/or internal goal setting. In addition, the Company believes this information provides investors valuable insight on underlying business trends and results in order to evaluate year-over-year financial performance. As such, the following items, when appropriate, are excluded from comparable results:
Acquisitions, Divestitures and Related Costs
Acquisitions, divestitures and related costs includes transaction and associated costs in connection with pending and completed acquisitions, investments and divestitures. In addition, in connection with acquisitions, the allocation of purchase price in excess of book value for certain inventory on hand at the date of acquisition is referred to as inventory step-up. Inventory step-up represents an assumed manufacturing profit attributable to the acquired company prior to acquisition. For inventory produced and sold after the acquisition date, the related manufacturer's profit accrues to the Company.
Restructuring and Other Strategic Business Development Costs
Restructuring and other strategic business development costs consist primarily of costs recognized by the Company in connection with certain activities which are intended to simplify, streamline or increase efficiencies. These costs include restructuring charges, such as employee termination benefit costs, contract termination costs, costs to consolidate or close facilities and relocate employees, and other costs which are not reflective of the core operations of the Company related to strategic business development initiatives.
Other
Other includes items that are not specifically related to acquisitions and divestitures or restructuring and other strategic business development costs (e.g. unrealized net gain (loss) on securities measured at fair value, loss on extinguishment of debt, impairment of assets, loss on contract termination and net (gain) loss from the mark to fair value of undesignated commodity derivative contracts prior to settlement).
Comparable Basis Earnings before Interest and Taxes ("Comparable Basis EBIT"), as used by the Company, means operating income plus equity in earnings (loss) of equity method investees, both on a comparable basis. Comparable Basis EBIT is considered a performance measure and the Company considers operating income the most comparable GAAP measure. Comparable Basis EBIT is used by management in evaluating the results of the core operations of the Company including, the results of its equity method investments. In addition, the Company believes this information provides investors valuable insight on underlying business trends and results in order to evaluate year-over-year financial performance.
The Company has disclosed its debt to Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") ratio and net debt to EBITDA ratio. These are non-GAAP financial measures that management believes are of interest to investors and lenders in relation to the Company's overall capital structure and its ability to borrow additional funds. The Company considers EBITDA a measure of liquidity and considers net cash provided by operating activities the most comparable GAAP measure.
Free cash flow as used by the Company means the Company's net cash flow from operating activities prepared in accordance with GAAP less capital expenditures for property, plant and equipment. Free cash flow is considered a liquidity measure and provides 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.
Reported Statements of Operations
(as adjusted) (1)
(in millions, except share and per share data)Net sales
Cost of product sold
Gross profit
Selling, general and administrative expenses (2) Gain on sale of business
Operating income
Income (loss) from unconsolidated investments Interest expense
Loss on extinguishment of debt
Income before income taxes (Provision for) benefit from income taxes
Net income
Net income attributable to noncontrolling interests
Net income attributable to CBI
Diluted net income per common share attributable to CBI
Diluted weighted average common shares outstanding
Cash dividends declared per common share:
Class A Common Stock
Class B Convertible Common Stock
Reported effective tax rateYear over year growth:
Net sales Operating income
Net income attributable to CBI
Diluted net income per common share attributable to CBIItems as a percent of net sales:
Cost of product sold Gross profit
Selling, general and administrative expenses Operating income
(1) Effective March 1, 2018, we adopted the FASB amended guidance regarding the recognition of revenue from contracts with customers using the retrospective application method. Accordingly, financial information for fiscal year 2017 and the interim and annual periods of fiscal 2018 presented herein has been adjusted to reflect the adoption of this amended guidance. Annual and interim periods prior to fiscal 2017, including interim periods for fiscal 2017, have not been adjusted to reflect the adoption of this amended guidance as the impact is not deemed material.
(2) Includes impairment of intangible assets of $46.0 million and $86.8 million for the years ended February 28, 2017, and February 28, 2018, respectively.
(in millions, except per share data)
Net Sales Reported Net Sales Comparable Net SalesCost of Product Sold Reported Cost of Product Sold
Acquisitions, Divestitures and Related Costs
Inventory Step-Up
Favorable Interim Supply Agreement
Total Acquisitions, Divestitures and Related Costs
Restructuring and Other Strategic Business Development Costs
Accelerated Depreciation
Total Restructuring and Other Strategic Business Development Costs
Other
Net (Gain) Loss on Undesignated Commodity Swap Contracts
Settlements of Undesignated Commodity Swap Contracts
Inventory, Other
Total Other
Comparable Cost of Product Sold
Gross Profit Reported Gross Profit
Acquisitions, Divestitures and Related Costs
Inventory Step-Up
Favorable Interim Supply Agreement
Total Acquisitions, Divestitures and Related Costs
Restructuring and Other Strategic Business Development Costs
Accelerated Depreciation
Total Restructuring and Other Strategic Business Development Costs
Other
Net (Gain) Loss on Undesignated Commodity Swap Contracts
Settlements of Undesignated Commodity Swap Contracts
Inventory, Other
Total Other Comparable Gross ProfitFiscal Year 2017
$ $
7,321.1 7,321.1
$ (3,802.1)
20.1 2.2 22.3
- -
(16.3) (23.4)
-
(39.7) $ (3,819.5)
$
20.1
2.2 22.3
- -
(16.3) (23.4)
- (39.7)
$
3,501.6
First Quarter 2018
3,519.0 $
Second Quarter 2018
$ $
$
1,928.5 1,928.5
$ $
2,087.9 2,087.9
$ $
(940.2) $ (1,019.2) $
7.0 - 7.0
2.8 - 2.8
- -- -
3.1 (2.4)
(3.9) (2.3)
- 0.7
- (6.2)
$
(932.5) $ (1,022.6) $
$
988.3 $
996.0
3.1 (2.4)
7.0
- 7.0
- 0.7
- -$
1,068.7
1,065.3
(3.9) (2.3)
- (6.2)
2.8 - 2.8
- -$
$
Third Quarter 2018
1,801.9 1,801.9
(891.6) $
(887.8) $
910.3 $
914.1
(3.5) 0.1 - (3.4)
(3.5) 0.1 - (3.4)
7.2
- 7.2
7.2
- 7.2
- -- -$ $
$
Fourth Quarter 2018
1,762.0 1,762.0
(916.8) $ (3,767.8)
1.7 - 1.7
(896.8) $ (3,739.7)
845.2 $
865.2
19.1 18.3
19.1 18.3
(3.1) 2.3
(3.1) 2.3
1.7
- 1.7
- -- -Fiscal Year 2018
$ $
7,580.3 7,580.3
18.7
- 18.7
- -9.4
3,812.5
18.7
- 18.7
- -
(7.4) (2.3) 19.1 9.4
$
3,840.6
(7.4) (15.4)
(2.3) 1.5
19.1 1.5
$ $
First Quarter 2019
2,047.1 2,047.1
Second | Third | Nine | |||
Quarter | Quarter | Months | |||
2019 | 2019 | 2019 | |||
$ | 2,299.1 | $ | 1,972.6 | $ | 6,318.8 |
$ | 2,299.1 | $ | 1,972.6 | $ | 6,318.8 |
$ (1,130.9) | $ (1,002.6) | $ (3,132.0) |
0.8 | 2.2 | 3.6 |
- | - | - |
0.8 | 2.2 | 3.6 |
1.6 | 1.5 | 6.5 |
1.6 | 1.5 | 6.5 |
5.8 | 14.7 | 5.1 |
3.6 | 2.2 | 7.3 |
- | 1.3 | 2.8 |
9.4 | 18.2 | 15.2 |
$ (1,006.9) | $ (1,119.1) | $ (3,106.7) |
$
(998.5)
0.6 - 0.6
3.4 3.4
(12.4)
$
(980.7)
$
1,048.6
$
1,168.2
$
970.0 $ 2.2
3,186.8
0.6 - 0.6
0.8 - 0.8
3.6
- 2.2
-
3.6
3.4 3.4
1.6 1.6
1.5 1.5
6.5 6.5
(15.4)
5.8 3.6 - 9.4
14.7 5.1
1.5
2.2 7.3
1.5
1.3 2.8
(12.4)
18.2
15.2
$
1,040.2
$
1,180.0
$
991.9
$
3,212.1
(in millions, except per share data)
Selling, General and Administrative Expenses Reported Selling, General and Administrative Expenses
Acquisitions, Divestitures and Related Costs
Transaction, Integration and Other Acquistion-Related Costs (2)
Costs Associated with Sale of the Canadian Wine Business and Related Activities Net Loss on Foreign Currency Contracts Associated with Acquisition of Investment Selling, General and Administrative Expenses, Other
Total Acquisitions, Divestitures and Related Costs
Restructuring and Other Strategic Business Development Costs
Restructuring and Other Strategic Business Development Costs Total Restructuring and Other Strategic Business Development Costs
Other
Impairment of Goodwill and Intangible Assets
Deferred Compensation
Loss on Contract Termination
Selling, General and Administrative Expenses, Other Total Other
Comparable Selling, General and Administrative Expenses
Gain on Sale of Business Reported Gain on Sale of Business
Acquisitions, Divestitures and Related Costs
Gain on Sale of Business
Total Acquisitions, Divestitures and Related Costs Comparable Gain on Sale of Business
Operating Income Reported Operating Income
Acquisitions, Divestitures and Related Costs
Inventory Step-Up
Favorable Interim Supply Agreement
Transaction, Integration and Other Acquistion-Related Costs (2)
Costs Associated with Sale of the Canadian Wine Business and Related Activities Net Loss on Foreign Currency Contracts Associated with Acquisition of Investment Selling, General and Administrative Expenses, Other
Gain on Sale of Business
Total Acquisitions, Divestitures and Related Costs
Restructuring and Other Strategic Business Development Costs
Accelerated Depreciation
Restructuring and Other Strategic Business Development Costs
Total Restructuring and Other Strategic Business Development Costs
(in millions, except per share data)
Comparable Operating Income
Other
Net (Gain) Loss on Undesignated Commodity Swap Contracts Settlements of Undesignated Commodity Swap Contracts Inventory, Other
Impairment of Goodwill and Intangible Assets Deferred Compensation
Loss on Contract Termination
Selling, General and Administrative Expenses, Other Total Other
Income (Loss) From Unconsolidated Investments Reported Income (Loss) From Unconsolidated Investments
Acquisitions, Divestitures and Related Costs
Net Gain (Loss) on Sale of Unconsolidated Investment Total Acquisitions, Divestitures and Related Costs
Other
Unrealized Net Gain (Loss) on Securities Measured at Fair Value
Equity Method Investments, Other
Total Other
Comparable Income (Loss) From Unconsolidated InvestmentsInterest Expense Reported Interest Expense
Acquisitions, Divestitures and Related Costs
Net Gain on Interest Rate Swap Contracts Associated with Debt Financing of Investment
Interest Expense, Other
Total Acquisitions, Divestitures and Related Costs Comparable Interest Expense
Loss on Extinguishment of Debt Reported Loss on Extinguishment of Debt
Other
Loss on Extinguishment of Debt
Total Other
Comparable Loss on Extinguishment of Debt
(Provision For) Benefit From Income Taxes Reported (Provision For) Benefit From Income Taxes
Acquisitions, Divestitures and Related Costs
Inventory Step-Up
Favorable Interim Supply Agreement
Transaction, Integration and Other Acquistion-Related Costs
Costs Associated with Sale of the Canadian Wine Business and Related Activities Net Loss on Foreign Currency Contracts Associated with Acquisition of Investment Selling, General and Administrative Expenses, Other
Gain on Sale of Business
Net Gain (Loss) on Sale of Unconsolidated Investment
Net Gain on Interest Rate Swap Contracts Associated with Debt Financing of Investment
Interest Expense, Other
Total Acquisitions, Divestitures and Related Costs
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Constellation Brands Inc. published this content on 09 January 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 09 January 2019 13:08:10 UTC