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DeliversSolidBusinessPerformanceandGeneratesStrongCashFlowBeerBusinessAchievesDepletionGrowthof5.6%,orNearly7%AdjustedforSellDayImpact
BeerProductioninMexicoReturnstoNormalLevels;Wine&SpiritsPowerBrandsContinuetoGainTraction
NetSales
OperatingIncome
EarningsBeforeInterest&Taxes
(EBIT)
DilutedNetIncome(Loss)PerShare
AttributabletoCBI(EPS)
DilutedEPSExcludingCanopy
FirstQuarterFiscalYear2021FinancialHighlights(1)|Inmillions,exceptpersharedata
Reported $1,963 $610 NA $(0.94) NA
%Change (6%) (2%) NA 28% NA
Comparable $1,963 $691 $663 $2.30 $2.44
%Change (6%) (1%) 3% 4% 2%(1)Definitionsofreported,comparable,andorganic,aswellasreconciliationsofnon-GAAPfinancialmeasures,arecontainedelsewhereinthisnewsrelease.NA=NotApplicable
HIGHLIGHTS• DespiteCOVID-relatedchallenges,generatesreportedbasisEPS
of$(0.94)andcomparablebasisEPSof$2.30,includingCanopyGrowthequitylossesof$0.14;excludingCanopyGrowthequitylosses,achievedcomparablebasisEPSof$2.44
• Generates$687millionofoperatingcashflowand$542millionoffreecashflow,anincreaseof16%and24%,respectively
• Beerdepletionsremainstrongandconsistentwithlong-termtrends;productioninMexicoreturnstonormallevelsinJune
• Wine&spiritspremiumizationstrategygainsmomentum,withstrongPowerBrandsperformanceinIRIchannels
• Fullyredeemsoutstanding2.25%SeniorNotesdueNovember2020
• Declaresquarterlycashdividendof$0.75pershareClassAand$0.68pershareClassBcommonstock
• Contributesnearly$4millioninCOVID-19relatedsupport• SignsagreementstosellNobiloNewZealandSauvignonBlancand
PaulMassonGrandeAmberBrandy• AcquiresEmpathyWines,adigitally-nativewinebrand,which
strengthensthecompany’spositioninthedirect-to-consumerandeCommercemarketswithinthewineandspiritscategory
• Fiscal2021guidanceisunavailableatthistimeduetotheuncertaintyandpotentialimpactsonthebusinessfromCOVID-19
“WeovercameanumberofheadwindstodeliversolidfirstquarterresultsmarkedbymarginimprovementandimpressivedepletiongrowthforourBeerBusinessandourWine&SpiritsPowerBrandportfolio.WhiletheslowdownofourMexicanbeerproductionduetoCOVID-19createdshort-termimpacttodistributorinventorylevels,shipments,andnetsales,wecontinuetowininsaleschannelsthatareopen,consumerdemandforourbrandsremainsstrong,andouroutlookfortheyearremainspositive.”
“Ourstrongcashflowresultsprovidefinancialflexibilityaswecontinuetofocusonreducingourdebtlevels.Duringthequarterwerefinanceddebtatfavorableratestoenhanceliquidityduringthistimeofuncertainty.”
BillNewlands GarthHankinson
PresidentandChiefExecutiveOfficer ChiefFinancialOfficer
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI1
beerShipmentVolume
OrganicShipmentVolume(2)
DepletionVolume(2) NetSales(3)
OrganicNetSales(1)
OperatingIncome(3)
ThreeMonthsEnded|Inmillions;brandedproduct,24-pack,12-ouncecaseequivalentsMay31,2020 76.2 76.2 $1,384.1 $1,384.1 $577.8May31,2019 82.1 81.3 $1,477.4 $1,448.8 $580.6%Change (7.2%) (6.3%) 5.6% (6%) (4%) —%(2)
ThreemonthsendedMay31,2019,includesanadjustmenttoremovevolumeassociatedwiththeBallastPointcraftbeerbusiness“BallastPointDivestiture”fortheperiodMarch2,2019,throughMay31,2019.
(3)ThreemonthsendedMay31,2019,includes$28.6millionofnetsalesand$3.8millionofgrossprofitlessmarketingthatarenolongerpartofthebeersegmentresultsaftertheBallastPointDivestiture.
HIGHLIGHTS• Constellation’sBeerBusinessposteddepletiongrowthof5.6%as
strongperformanceinoff-premisechannelsmorethanoffsettheimpactofthe75%reductionintheon-premisechannelduetoCOVID-19relatedshut-downs.Whenadjustedforonelesssellingdayinthequarter,thebeerbusinessgeneratednearly7%depletiongrowth.
• TheCoronaBrandFamilygrewdouble-digitsinIRIchannelsdrivenbytheacceleratedgrowthofCoronaExtra,thesuccessfullaunchofCoronaHardSeltzer,andthecontinuedstrengthofCoronaPremierandCoronaRefresca.
• WiththesuccessfullaunchofCoronaHardSeltzer,thebrandhasquicklybecomethe#4hardseltzerplayer,approaching6%IRImarketshareintheU.S.hardseltzercategory.OngoingdistributiongainshaveledtoIRIACVdistributionofnearly65sinceproductlaunchinearlyMarch.
• ModeloEspecialcontinuestoseeacceleratingconsumertakeawaytrendsinIRIchannelsanddelivered12%depletiongrowthduringthequarter.
• ImpactsfromtheCOVID-19relatedslowdownofbeerproductioninMexicoimpactedshipmentvolumesanddistributorinventorylevelsandwillextendintoQ2.Productinventoriesareexpectedtoreturntomorenormallevelsduringthethirdquarterfiscal2021;long-termoutlookremainsintact.
• Operatingmarginincreased240basispointsto41.7%,asbenefitsfromtimingofmarketingspendandfavorablepricingwerepartiallyoffsetbyincreasedCOGS.
wineandspiritsShipmentVolume
OrganicShipmentVolume(4)
DepletionVolume(4) NetSales(5)
OrganicNetSales(1)
OperatingIncome(5)
ThreeMonthsEnded|Inmillions;brandedproduct,9-litercaseequivalentsMay31,2020 10.8 10.8 $579.3 $579.3 $164.0May31,2019 12.4 11.9 $619.8 $601.1 $160.8%Change (12.9%) (9.2%) (1.1%) (7%) (4%) 2%(4)
ThreemonthsendedMay31,2019,includesanadjustmenttoremovevolumeassociatedwiththeBlackVelvetCanadianWhiskybusiness“BlackVelvetDivestiture”fortheperiodMarch1,2019,throughMay31,2019.
(5)ThreemonthsendedMay31,2019,includes$18.7millionofnetsalesand$8.3millionofgrossprofitlessmarketingthatarenolongerpartofthewineandspiritssegmentresultsaftertheBlackVelvetDivestiture.
HIGHLIGHTS• ThePowerBrandsarewinninginthehigher-endandacrossthe
majorityofpricesegmentsoftheU.S.Winecategorywithstrongvelocity,anddistributiongainsthatareoutpacingthemarket.PowerBranddepletionvolumegrew5%drivenbyKimCrawford,Meiomi,SVEDKA,ThePrisonerBrandFamily,andWoodbridgebyRobertMondavi.
• InnovationinitiativesaredrivinggrowthwithPowerBrandslikeThePrisonerUnshackledandRobertMondaviPrivateSelectionButteryChardonnay.
• Operatingmarginincreased240basispointsto28.3%asbenefitsfromprice,SG&A,andmixwerepartiallyoffsetbytheBlackVelvetDivestitureandhigherCOGS.
• EmpathyWinesacquisitionreinforcesandsupportsthecompany’sdirect-to-consumerand3-tiereCommercestrategy,asconsumerscontinuetomigratetothesechannels.
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI2
InformationRelatedtotheWineandSpiritsBusinessestobeSoldThefurtherrevisedWineandSpiritstransactiontosellaportionofthebusinesstoE.&J.GalloWinery(“Gallo”)(the“FurtherRevisedWineandSpiritsTransaction”)isnowassumedtocloseduringQ2fiscal2021andtheseparate,butrelated,agreementtodivesttheNobiloWinebrandtoGallo(the“NobiloTransaction”)isassumedtoclosebytheendofQ2offiscal2021.Inaddition,thecompanyintendstodivestthePaulMassonGrandeAmberBrandybrandandtheconcentratebusinessinseparatetransactionsthatareassumedtocloseduringQ2fiscal2021andplanstoretaintheCooksandJ.RogetbrandsandtheMissionBellWinery.
Thefollowingtablepresentsestimatedselectedwineandspiritssegmentfinancialinformationincludedinourconsolidatedfinancialstatementsthatwillnolongerbepartofourconsolidatedresultsafterthesetransactions:
EstimatedInformationforWineandSpiritsBusinessestobeSold FY20Q2 FY20Q3 FY20Q4 FY21Q1
(inmillions)Shipmentvolume(9-litercaseequivalents) 5.8 4.7 6.1 4.5
Netsales $229 $179 $237 $187
CAM(grossprofitlessmarketing) $83 $62 $84 $77
Inaddition,thecompanysoldtheBlackVelvetCanadianWhiskybusinessonNovember1,2019.Theapproximatefiscal2020shipmentvolume,netsales,andgrossprofitlessmarketingtotaled1.6million9-litercaseequivalents,$50.3million,and$23.2million,respectively.
AsaresultoftheFurtherRevisedWineandSpiritstransactions,astrandedcostreductionplanof$130millionisexpectedtoberealizedoverthefiscal2021tofiscal2022timeframe.
DOINGOURPARTTODRIVEMEANINGFULANDLASTINGCHANGETheconditionsthathaveallowedsystemicracialinjusticetopersistintheU.S.haveexistedfartoolong.Wemustdobetterasindividuals,asacompany,andasacountry.TolearnmoreaboutcommitmentsourcompanyismakingtoachievegreaterequityforourAfricanAmerican/BlackcolleaguesatConstellation,withinourindustry,andwithinthecommunitieswhereweliveandwork,visitwww.cbrands.com/news.
Initiatives:
• Committedtoinvest$100milliontosupportAfricanAmerican/Blackandminority-ownedstartupsinthebeveragealcoholspaceandrelatedcategoriesoverthenext10years.
• Enteredamulti-yearpartnershipwiththeEqualJusticeInitiative,includinganinvestmentof$1milliontofurtherEJI'smissionandprovidetrainingopportunitiesforConstellationleadership.
RALLYINGAROUNDOURCOMMUNITIESANDINDUSTRYPARTNERSTOSUPPORTCOVID-19RELIEFEFFORTSWHILEKEEPINGEMPLOYEES’SAFETYTHE#1PRIORITY
Constellationhasworkedtirelesslytohelppavethepathtorecoveryforindustrypartnerssuchaslocalrestaurantsandbarsandat-riskcommunitiesdisproportionatelyimpactedbyCOVID-19,includingHispanicandAfricanAmerican/Blackcommunities,acrosstheU.S.Tolearnmoreaboutourcorporatesocialresponsibilityefforts,visitour2020CorporateSocialResponsibilityreport.
• NationalRestaurantAssociationEducationFoundation:Donatedmorethan$1.5milliontohelpproviderelieftoover40,000restaurantworkerswhosejobswereimpactedbytheCOVID-19pandemic.
• #FirstRespondersFirst:Donatednearly$1milliontohelpprovideequipmentandsupporttoserveonthefrontlines,helpingthosemostinneedincommunitiesacrosstheU.S.
• U.S.Bartenders’GuildNationalCharityFund:Provided$500,000tobartendersandsupportstaffwhowereforcedoutofworkduetoCOVID-19.
• MexicanRedCross:Contributed$500,000tohelpfirstresponderswithneededmedicalsuppliesinMexico.
• HealthcareprofessionalsinVenetoRegioninItaly:Providedmuch-neededsupporttothehard-hitVenetoregion,contributing$250,000toprovidehospitalsuppliestohealthcareprofessionals.
• Implementedvariousmeasurestoreducethespreadofthevirusincludingworkingfromhome,restrictingvisitorstoourproductionlocations,reducingtheon-siteproductionworkforcelevels,screeningworkersbeforetheyenterfacilities,andimplementingsocialdistancing.
• SentthousandsoffacecoveringstoCBIteammembersacrossthecountryandouroperationsfacilities.
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI3
QUARTERLYDIVIDEND
OnJune30,2020,Constellation’sboardofdirectorsdeclaredaquarterlycashdividendof$0.75pershareofClassACommonStockand$0.68pershareofClassBCommonStock,payableonAugust25,2020,tostockholdersofrecordasofthecloseofbusinessonAugust11,2020.
†Acopyofthisnewsrelease,includingtheattachmentsandotherfinancialinformationthatmaybediscussedduringthecall,willbeavailableonourwebsitecbrands.comunder“Investors/Reporting”priortothecall.
CANOPYGROWTHINVESTMENT
Constellation’sshareofCanopyGrowth’sequityearningsandrelatedactivitiesforfirstquarteroffiscal2021totaledalossof$377.6milliononareportedbasisandalossof$31.7milliononacomparablebasis.
Constellationhasrecognizeda$112millionunrealizednetgaininreportedbasisresultssincetheinitialCanopyinvestmentinNovember2017;$197milliondecreaseinthefairvalueofCanopyinvestmentswasrecognizedforfirstquarteroffiscal2021.
OnMay1,2020,ConstellationexercisedtheNovember2017CanopyWarrantsatanexercisepriceofC$12.98perwarrantshareforC$245.0million,or$173.9million.OnMay1,2020,Constellation’sownershipinterestinCanopyincreasedto38.6%.TheclosingstockpriceonthedateofexercisewasC$21.43.
LEADERSHIPPERSPECTIVESOurteamputsitsdeepexperienceinbusiness,strategy,andleadershiptowork,shapinganenvironmentwherewerealizeourambitionsandbeliefs.IntheLeadershipPerspectiveblog,PresidentandCEOBillNewlandsandotherConstellationthoughtleaderssharetheirvisionforthebrands,insightsabouttheindustry,andtheculturalfoundationsthatdriveourcompanyforward.WeinviteyoutojoinusaswebuildafutureWorthReachingFor.
3-TiereCommerce:UnderstandingOurEvolvingDigitalConsumerinanUnexpectedTime
ABOUTCONSTELLATIONBRANDSAtConstellationBrands(NYSE:STZandSTZ.B),ourmissionistobuildbrandsthatpeoplelovebecausewebelievesharingatoast,unwindingafteraday,celebratingmilestones,andhelpingpeopleconnect,areWorthReachingFor.It’sworthourdedication,hardwork,andtheboldcalculatedriskswetaketodelivermoreforourconsumers,tradepartners,shareholders,andcommunitiesinwhichweliveandwork.It’swhathasmadeusoneofthefastest-growinglargeCPGcompaniesintheU.S.atretail,anditdrivesourpursuittodeliverwhat’snext.
Today,wearealeadinginternationalproducerandmarketerofbeer,wine,andspiritswithoperationsintheU.S.,Mexico,NewZealand,andItaly.Everyday,peoplereachforourhigh-end,iconicimportedbeerbrandssuchasCoronaExtra,CoronaLight,CoronaPremier,ModeloEspecial,ModeloNegra,andPacifico,andourhigh-qualitypremiumwineandspiritsbrands,includingtheRobertMondaviBrandFamily,KimCrawford,Meiomi,ThePrisonerBrandFamily,SVEDKAVodka,CasaNobleTequila,andHighWestWhiskey.
Butwewon’tstophere.Ourvisionaryleadershipteamandpassionateemployeesfrombarrelroomtoboardroomarereachingforthenextlevel,toexploretheboundariesofthebeveragealcoholindustryandbeyond.Joinusindiscoveringwhat’sWorthReachingFor.
Tolearnmore,[email protected].
MEDIACONTACTS INVESTORRELATIONSCONTACTSMikeMcGrew 773-251-4934 [email protected] PattyYahn-Urlaub 585-678-7483 [email protected] 585-678-7141 [email protected] BobCzudak 585-678-7170 [email protected]
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI4
SUPPLEMENTALINFORMATIONReportedbasis(“reported”)areamountsasreportedundergenerallyacceptedaccountingprinciples.Comparablebasis(“comparable”)areamountswhichexcludeitemsthataffectcomparability(“comparableadjustments”),astheyarenotreflectiveofcoreoperationsofthesegments.Thecompany’smeasureofsegmentprofitabilityexcludescomparableadjustments,whichisconsistentwiththemeasureusedbymanagementtoevaluateresults.Thecompanydiscussesvariousnon-GAAPmeasuresinthisnewsrelease.Financialstatements,aswellassupplementalschedulesandtablesreconcilingnon-GAAPmeasures,togetherwithdefinitionsofthesemeasuresandthereasonsmanagementusesthesemeasures,areincludedinthisnewsrelease.
FORWARD-LOOKINGSTATEMENTSAllstatementsotherthanstatementsofhistoricalfactsetforthinthisnewsreleaseregardingConstellationBrands’businessstrategy,futureoperations,futurefinancialposition,estimatedrevenues,projectedcosts,expectednetsalesandoperatingincome,expectedcashflow,futurepaymentsofdividends,andprospects,plansandobjectivesofmanagement,aswellasinformationconcerningexpectedactionsofthirdparties,areforward-lookingstatements(collectively,the“Projections”)thatinvolverisksanduncertaintiesthatcouldcauseactualresultstodiffermateriallyfromthosesetforthinorimpliedbytheProjections.
Duringthecurrentquarter,ConstellationBrandsmayreiteratetheProjections.Priortothestartofthecompany’squietperiod,whichwillbeginatthecloseofbusinessonAugust31,2020,thepubliccancontinuetorelyontheProjectionsasstillbeingConstellationBrands’currentexpectationsonthematterscovered,unlessthecompanypublishesanoticestatingotherwise.DuringConstellationBrands’“quietperiod,”theProjectionsshouldnotbeconsideredtoconstitutethecompany’sexpectationsandshouldbeconsideredhistorical,speakingasofpriortothequietperiodonlyandnotsubjecttoupdatebythecompany.
TheProjectionsarebasedonmanagement’scurrentexpectationsand,unlessotherwisenoted,donottakeintoaccounttheimpactofanyfutureacquisition,merger,oranyotherbusinesscombination,divestiture,restructuring,orotherstrategicbusinessrealignments,financingorsharerepurchasethatmaybecompletedafterthedateofthisrelease.TheProjectionsshouldnotbeconstruedinanymannerasaguaranteethatsuchresultswillinfactoccur.TheactualimpactofCOVID-19anditsassociatedoperatingenvironmentmaybemateriallydifferentthanmanagement’sexpectations.ThependingFurtherRevisedWineandSpiritsTransactionandthependingNobiloTransaction,thependingPaulMassonGrandeAmberBrandytransaction,andthependingconcentratebusinesstransaction(collectively,the“WineandSpiritsTransactions”)areeachsubjecttothesatisfactionofcertainclosingconditions,including,butnotlimitedto,receiptofrequiredregulatoryclearances.TheNobiloTransactionisalsoconditionedoncompletionoftheFurtherRevisedWineandSpiritsTransaction.TherecanbenoassurancetheWineandSpiritsTransactionswilloccurorwilloccuronthetermsortimetablescontemplatedhereby.
Inadditiontotherisksanduncertaintiesofordinarybusinessoperations,theProjectionsofthecompanycontainedinthisnewsreleasearesubjecttoanumberofrisksanduncertainties,including:
• durationandimpactoftheCOVID-19pandemic,includingbutnotlimitedtoclosureofnon-essentialbusinesses,whichmayincludeourmanufacturingfacilities,andothergovernmentalcontainmentactions;
• completionofthependingWineandSpiritsTransactions;
• impactoftheWineandSpiritsTransactions,amountanduseofexpectedproceedsfromthependingtransactions,amountofstrandedcosts,andamountandtimingofcostreductionsmayvaryfrommanagement’scurrentexpectations;
• amountofcontingentconsideration,ifany,receivedintheFurtherRevisedWineandSpiritsTransactionwilldependonactualbrandperformance;
• beeroperationsexpansion,construction,andoptimizationactivities,andcostsandtimingassociatedwiththeseactivities,mayvaryfrommanagement’scurrentestimates;
• accuracyofsupplyprojections,includingthoserelatingtobeeroperationsexpansionactivitiesandglasssourcing;
• operatingcashflow,freecashflow,effectivetaxrate,andcapitalexpenditurestosupportlong-termgrowthmayvaryfrommanagement’scurrentestimates;
• accuracyofprojectionsassociatedwithmarketopportunitiesandwithpreviouslyannouncedacquisitions,investments,anddivestitures;
• accuracyofprojectionsrelatingtotheCanopyinvestmentsmayvaryfrommanagement’scurrentexpectations;
• exactdurationofthesharerepurchaseimplementationandtheamount,timing,andsourceoffundsforanysharerepurchases;
• amountandtimingoffuturedividendsaresubjecttothedeterminationanddiscretionoftheboardofdirectors;
• rawmaterialandwatersupply,productionorshipmentdifficultiescouldadverselyaffectthecompany’sabilitytosupplyitscustomers;
• generaleconomic,geo-political,domestic,internationalandregulatoryconditions,instabilityinworldfinancialmarkets,healthepidemicsorpandemics,quarantinesorcurfews,unanticipatedenvironmentalliabilitiesandcosts,orenhancedcompetitiveactivities;
• changestointernationaltradeagreementsandtariffs,accountingstandards,electionsorassertions,taxlawsorothergovernmentalrulesandregulations,andotherfactorswhichcouldimpactthecompany’sreportedfinancialposition,resultsofoperations,oreffectivetaxrate,andaccuracyofanyassociatedprojections;
• changesininterestratesandtheinherentunpredictabilityofcurrencyfluctuations,commodityprices,andrawmaterialcosts;and
• otherfactorsanduncertaintiesdisclosedinthecompany’sfilingswiththeSecuritiesandExchangeCommission,includingitsAnnualReportonForm10-KforthefiscalyearendedFebruary29,2020,whichcouldcauseactualfutureperformancetodifferfromcurrentexpectations.
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI5
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONDENSEDCONSOLIDATEDBALANCESHEETS
(inmillions)(unaudited)
May31,2020
February29,2020
ASSETS
Currentassets:
Cashandcashequivalents $ 302.8 $ 81.4
Accountsreceivable 700.5 864.8
Inventories 1,332.6 1,373.6
Prepaidexpensesandother 470.1 535.8
Assetsheldforsale-current 590.2 628.5
Totalcurrentassets 3,396.2 3,484.1
Property,plant,andequipment 5,098.2 5,333.0
Goodwill 7,684.9 7,757.1
Intangibleassets 2,735.4 2,718.9
Equitymethodinvestments 2,885.7 3,093.9
Securitiesmeasuredatfairvalue 809.5 1,117.1
Deferredincometaxes 2,599.5 2,656.3
Assetsheldforsale 376.4 552.1
Otherassets 564.0 610.7
Totalassets $ 26,149.8 $ 27,323.2
LIABILITIESANDSTOCKHOLDER’SEQUITY
Currentliabilities:
Short-termborrowings $ — $ 238.9
Currentmaturitiesoflong-termdebt 534.7 734.9
Accountspayable 505.5 557.6
Otheraccruedexpensesandliabilities 712.2 780.4
Totalcurrentliabilities 1,752.4 2,311.8
Long-termdebt,lesscurrentmaturities 11,639.3 11,210.8
Deferredincometaxesandotherliabilities 1,380.5 1,326.3
Totalliabilities 14,772.2 14,848.9
CBIstockholders’equity 11,066.0 12,131.8
Noncontrollinginterests 311.6 342.5
Totalstockholders’equity 11,377.6 12,474.3
Totalliabilitiesandstockholders’equity $ 26,149.8 $ 27,323.2
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI6
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFOPERATIONS
(inmillions,exceptpersharedata)(unaudited)
ThreeMonthsEnded
May31,2020
May31,2019
Sales $ 2,131.7 $ 2,282.5
Excisetaxes (168.3) (185.3)
Netsales 1,963.4 2,097.2
Costofproductsold (975.1) (1,068.5)
Grossprofit 988.3 1,028.7
Selling,general,andadministrativeexpenses (353.3) (406.0)
Impairmentofassetsheldforsale (25.0) —
Operatingincome(loss) 610.0 622.7
Income(loss)fromunconsolidatedinvestments (571.2) (930.6)
Interestexpense (100.0) (114.6)
Lossonextinguishmentofdebt (7.0) —
Income(loss)beforeincometaxes (68.2) (422.5)
(Provisionfor)benefitfromincometaxes (104.4) 185.4
Netincome(loss) (172.6) (237.1)
Netincome(loss)attributabletononcontrollinginterests (5.3) (8.3)
Netincome(loss)attributabletoCBI $ (177.9) $ (245.4)
Netincome(loss)percommonshareattributabletoCBI:
BasicandDiluted–ClassACommonStock $ (0.94) $ (1.30)
BasicandDiluted–ClassBConvertibleCommonStock $ (0.86) $ (1.19)
Weightedaveragecommonsharesoutstanding:
BasicandDiluted–ClassACommonStock 169.604 168.118
BasicandDiluted–ClassBConvertibleCommonStock 23.293 23.317
Cashdividendsdeclaredpercommonshare:
ClassACommonStock $ 0.75 $ 0.75
ClassBConvertibleCommonStock $ 0.68 $ 0.68
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI7
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWS
(inmillions)(unaudited)
ThreeMonthsEnded
May31,2020
May31,2019
CASHFLOWSFROMOPERATINGACTIVITIESNetincome(loss) $ (172.6) $ (237.1)Adjustmentstoreconcilenetincome(loss)tonetcashprovidedbyoperatingactivities:
Unrealizednet(gain)lossonsecuritiesmeasuredatfairvalue 197.3 827.5Deferredtaxprovision(benefit) 98.9 (245.4)Depreciation 71.0 86.6Stock-basedcompensation 14.6 15.5
Equityin(earnings)lossesofequitymethodinvesteesandrelatedactivities,netofdistributedearnings 373.9 91.1Noncashleaseexpense 20.9 22.8Impairmentofassetsheldforsale 25.0 —Lossoninventoryandrelatedcontracts 24.3 44.5Lossonsettlementoftreasurylockcontracts (29.3) —Changeinoperatingassetsandliabilities,netofeffectsfrompurchasesofbusinesses:
Accountsreceivable 167.0 58.6Inventories 48.6 (50.3)Prepaidexpensesandothercurrentassets 40.5 (8.7)Accountspayable (28.4) (22.3)Deferredrevenue 34.4 53.1Otheraccruedexpensesandliabilities (155.5) (77.4)
Other (44.1) 34.6Totaladjustments 859.1 830.2Netcashprovidedby(usedin)operatingactivities 686.5 593.1
CASHFLOWSFROMINVESTINGACTIVITIESPurchasesofproperty,plant,andequipment (144.2) (155.7)Purchasesofbusinesses,netofcashacquired — (36.2)Investmentsinequitymethodinvesteesandsecurities (213.4) (20.0)Proceedfromsalesofassets 17.7 0.3Proceedsfromsaleofbusiness 41.1 —Otherinvestingactivities (0.3) (1.9)
Netcashprovidedby(usedin)investingactivities (299.1) (213.5)CASHFLOWSFROMFINANCINGACTIVITIES
Proceedsfromissuanceoflong-termdebt 1,194.6 —Principalpaymentsoflong-termdebt (959.5) (22.9)Netproceedsfrom(repaymentsof)short-termborrowings (238.9) (205.0)Dividendspaid (143.9) (143.0)Proceedsfromsharesissuedunderequitycompensationplans 4.4 10.4Paymentsofminimumtaxwithholdingsonstock-basedpaymentawards (7.6) (13.9)Paymentsofdebtissuance,debtextinguishment,andotherfinancingcosts (18.1) —
Netcashprovidedby(usedin)financingactivities (169.0) (374.4)
Effectofexchangeratechangesoncashandcashequivalents 3.0 (0.1)
Netincrease(decrease)incashandcashequivalents 221.4 5.1Cashandcashequivalents,beginningofperiod 81.4 93.6Cashandcashequivalents,endofperiod $ 302.8 $ 98.7
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI8
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESRECONCILIATIONOFREPORTEDANDORGANICNETSALES
(inmillions)(unaudited)
Forperiodsofacquisition,wedefineorganicnetsalesascurrentperiodreportednetsaleslessnetsalesofproductsofacquiredbusinessesreportedforthecurrentperiod,asappropriate.Forperiodsofdivestiture,wedefineorganicnetsalesaspriorperiodreportednetsaleslessnetsalesofproductsofdivestedbusinessesreportedforthepriorperiod,asappropriate.Weprovideorganicnetsalesbecauseweusethisinformationinmonitoringandevaluatingtheunderlyingbusinesstrendsofourcoreoperations.Inaddition,webelievethisinformationprovidesinvestorsvaluableinsightonunderlyingbusinesstrendsandresultsinordertoevaluateyear-over-yearfinancialperformance.
ThedivestituresimpactingtheperiodbelowconsistoftheBlackVelvetDivestiture(soldNovember1,2019)andtheBallastPointDivestiture(soldMarch2,2020).
ThreeMonthsEnded
May31,2020
May31,2019
PercentChange
Consolidatednetsales $ 1,963.4 $ 2,097.2 (6%)Less:BlackVelvetDivestiture(1) — (18.7)Less:BallastPointDivestiture(2) — (28.6)
Consolidatedorganicnetsales $ 1,963.4 $ 2,049.9 (4%)
Beernetsales $ 1,384.1 $ 1,477.4 (6%)
Less:BallastPointDivestiture(2) — (28.6)
Beerorganicnetsales $ 1,384.1 $ 1,448.8 (4%)
WineandSpiritsnetsales $ 579.3 $ 619.8 (7%)Less:BlackVelvetDivestiture(1) — (18.7)
WineandSpiritsorganicnetsales $ 579.3 $ 601.1 (4%)
(1) FortheperiodMarch1,2019,throughMay31,2019,includedinthethreemonthsendedMay31,2019.(2) FortheperiodMarch2,2019,throughMay31,2019,includedinthethreemonthsendedMay31,2019.
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI9
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESSUPPLEMENTALSHIPMENTANDDEPLETIONINFORMATION
(unaudited)
ThreeMonthsEnded
May31,2020
May31,2019
PercentChange
Beer
(inmillions,brandedproduct,24-pack,12-ouncecaseequivalents)
Shipmentvolume 76.2 82.1 (7.2%)
Organicshipmentvolume(1) 76.2 81.3 (6.3%)
Depletionvolume(2)(3) 5.6%
WineandSpirits
(inmillions,brandedproduct,9-litercaseequivalents)
Shipmentvolume 10.8 12.4 (12.9%)
Organicshipmentvolume(4) 10.8 11.9 (9.2%)
U.S.Domesticshipmentvolume 9.9 11.3 (12.4%)
U.S.Domesticorganicshipmentvolume(4) 9.9 10.8 (8.3%)
U.S.DomesticPowerBrandsshipmentvolume(5) 5.0 4.5 11.1%
U.S.Domesticdepletionvolume(2)(6) (1.1%)
U.S.DomesticPowerBrandsdepletionvolume(2)(5) 4.7%
(1) IncludesanadjustmenttoremoveshipmentvolumeassociatedwiththeBallastPointDivestiturefortheperiodMarch2,2019,throughMay31,2019,forthethreemonthsendedMay31,2019.
(2) Depletionsrepresentdistributorshipmentsofourrespectivebrandedproductstoretailcustomers,basedonthird-partydata.
(3) IncludesanadjustmenttoremovedepletionvolumeassociatedwiththeBallastPointDivestiturefortheperiodMarch2,2019,throughMay31,2019,forthethreemonthsendedMay31,2019.
(4) IncludesanadjustmenttoremoveshipmentvolumeassociatedwiththeBlackVelvetDivestiturefortheperiodMarch1,2019,throughMay31,2019,forthethreemonthsendedMay31,2019.
(5) U.S.DomesticPowerBrandsincludethefollowingbrandsand/orportfolioofbrands:
WineBrandsWinePortfolioof
Brands SpiritsBrands
● 7Moons ● Drylands ● SIMI ● CharlesSmith ● CasaNoble
● Auros ● KimCrawford ● SpokenBarrel ● Prisoner ● HighWest
● ChampagnePalmer&Co ● Meiomi ● RobertMondavi ● MiCAMPO
● Cooper&Thief ● MountVeeder ● Schrader ● Nelson’sGreenBrier
● CraftersUnion ● Nobilo(7) ● SVEDKA
● CuvéeSauvage ● Ruffino ● TheRealMcCoy(6) IncludesanadjustmenttoremovedepletionvolumeassociatedwiththeBlackVelvetDivestiturefortheperiodMarch1,
2019,throughMay31,2019,forthethreemonthsendedMay31,2019.(7) Brandisexpectedtobedivestedbytheendofsecondquarteroffiscal2021.
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI10
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESSUMMARIZEDSEGMENTANDINCOME(LOSS)FROMUNCONSOLIDATEDINVESTMENTSINFORMATION
(inmillions)(unaudited)
ThreeMonthsEndedMay31,2020
May31,2019
PercentChange
BeerSegmentnetsales $ 1,384.1 $ 1,477.4 (6%)Segmentgrossprofit $ 769.7 $ 819.5 (6%)
%Netsales 55.6% 55.5%Segmentoperatingincome(loss) $ 577.8 $ 580.6 —%
%Netsales 41.7% 39.3%
WineandSpiritsWinenetsales $ 499.6 $ 535.0 (7%)Spiritsnetsales 79.7 84.8 (6%)
Segmentnetsales $ 579.3 $ 619.8 (7%)Segmentgrossprofit $ 263.9 $ 271.7 (3%)
%Netsales 45.6% 43.8%Segmentoperatingincome(loss) $ 164.0 $ 160.8 2%
%Netsales 28.3% 25.9%Segmentincome(loss)fromunconsolidatedinvestments $ 3.5 $ 4.0 (13%)
CorporateOperationsandOtherSegmentoperatingincome(loss) $ (50.5) $ (43.7) (16%)Segmentincome(loss)fromunconsolidatedinvestments $ 0.2 $ (1.1) NM
Canopyequityearnings(losses)(1) $ (31.7) $ (54.4) 42%
Consolidatedoperatingincome(loss) $ 610.0 $ 622.7 (2%)ComparableAdjustments 81.3 75.0 NM
Comparableoperatingincome(loss) $ 691.3 $ 697.7 (1%)
Consolidatedincome(loss)fromunconsolidatedinvestments $ (571.2) $ (930.6) 39%ComparableAdjustments 543.2 879.1 NM
Comparableincome(loss)fromunconsolidatedinvestments $ (28.0) $ (51.5) 46%
ConsolidatedEBIT $ 663.3 $ 646.2 3%
(1) Werecognizeourequityinearnings(losses)forCanopyonatwo-monthlag.Accordingly,werecognizedourshareofCanopy’searnings(losses)fortheperiodsJanuary1,2020,throughMarch31,2020,andJanuary1,2019,throughMarch31,2019,inourconsolidatedresultsforthethreemonthsendedMay31,2020,andMay31,2019,respectively.Thesummarizedfinancialinformationbelowrepresents100%ofCanopy’sreportedresults,preparedinaccordancewithgenerallyacceptedaccountingprinciplesintheU.S.(“GAAP”),andconvertedfromCanadiandollarstoU.S.dollarsusingtheapplicableweightedaverageexchangerates.
ThreeMonthsEnded
May31,2020
May31,2019
Netsales $ 80.3 $ 70.7
Grossprofit(loss) $ (57.3) $ 11.3
%Netsales (71.4)% 16.0%
Operatingincome(loss) $ (733.2) $ (170.0)
%Netsales NM NM
NM=NotMeaningful
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI11
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESRECONCILIATIONSOFGAAPTONON-GAAPFINANCIALMEASURES
(inmillions,exceptpersharedata)(unaudited)
WereportourfinancialresultsinaccordancewithGAAP.However,non-GAAPfinancialmeasures,asdefinedinthereconciliationtablesbelow,areprovidedbecauseweusethisinformationinevaluatingtheresultsofourcoreoperationsand/orinternalgoalsetting.Inaddition,webelievethisinformationprovidesinvestorsvaluableinsightonunderlyingbusinesstrendsandresultsinordertoevaluateyear-over-yearfinancialperformance.Seethetablesbelowforsupplementalfinancialdataandcorrespondingreconciliationsofthesenon-GAAPfinancialmeasurestoGAAPfinancialmeasuresfortheperiodspresented.Non-GAAPfinancialmeasuresshouldbeviewedinadditionto,andnotasanalternativefor,ourreportedresultspreparedinaccordancewithGAAP.Pleaserefertoourwebsiteathttp://www.cbrands.com/investors/reportingforamoredetaileddescriptionandfurtherdiscussionofthesenon-GAAPfinancialmeasures.
ThreeMonthsEndedMay31,2020 ThreeMonthsEndedMay31,2019 PercentChange-ReportedBasis(GAAP)
PercentChange-
ComparableBasis
(Non-GAAP)
ReportedBasis(GAAP)
ComparableAdjustments
ComparableBasis
(Non-GAAP)
ReportedBasis(GAAP)
ComparableAdjustments
ComparableBasis
(Non-GAAP)
Netsales $ 1,963.4 $ 1,963.4 $ 2,097.2 $ 2,097.2 (6%) (6%)
Costofproductsold (975.1) $ 45.3 (1,068.5) $ 62.5
Grossprofit 988.3 45.3 $ 1,033.6 1,028.7 62.5 $ 1,091.2 (4%) (5%)
Selling,general,andadministrativeexpenses (353.3) 11.0 (406.0) 12.5
Impairmentofassetsheldforsale (25.0) 25.0 —
Operatingincome(loss) 610.0 81.3 $ 691.3 622.7 75.0 $ 697.7 (2%) (1%)
Income(loss)fromunconsolidatedinvestments (571.2) 543.2 (930.6) 879.1
EBIT $ 663.3 $ 646.2 NA 3%
Interestexpense (100.0) (114.6)
Lossonextinguishmentofdebt (7.0) 7.0 —
Income(loss)beforeincometaxes (68.2) 631.5 $ 563.3 (422.5) 954.1 $ 531.6 84% 6%
(Provisionfor)benefitfromincometaxes(1) (104.4) (5.9) 185.4 (278.9)
Netincome(loss) (172.6) 625.6 (237.1) 675.2
Netincome(loss)attributabletononcontrollinginterests (5.3) (8.3)
Netincome(loss)attributabletoCBI $ (177.9) $ 625.6 $ 447.7 $ (245.4) $ 675.2 $ 429.8 28% 4%
EPS(2) $ (0.94) $ 3.21 $ 2.30 $ (1.30) $ 3.46 $ 2.21 28% 4%
Weightedaveragecommonsharesoutstanding–diluted(3) 169.604 25.201 194.805 168.118 26.750 194.868
Grossmargin 50.3% 52.6% 49.1% 52.0%
Operatingmargin 31.1% 35.2% 29.7% 33.3%
Effectivetaxrate (153.1)% 19.6% 43.9% 17.6%
ConstellationBrands,Inc.Q1FY2021Form10-Q #WORTHREACHINGFORI12
ThreeMonthsEndedMay31,2020 ThreeMonthsEndedMay31,2019
ComparableAdjustments
Acquisitions,Divestitures,andRelatedCosts(4)
RestructuringandOtherStrategicBusiness
DevelopmentCosts(5) Other(6) Total
Acquisitions,Divestitures,andRelatedCosts(4)
RestructuringandOtherStrategicBusiness
DevelopmentCosts(5) Other(6) Total
Costofproductsold $ — $ (24.3)$ (21.0)$ (45.3) $ (0.4)$ (48.0)$ (14.1)$ (62.5)Selling,general,andadministrativeexpenses $ (1.4)$ (3.1)$ (6.5)$ (11.0) $ 9.2 $ (23.6)$ 1.9 $ (12.5)Impairmentofassetsheldforsale $ — $ (25.0)$ — $ (25.0) $ — $ — $ — $ —Operatingincome(loss) $ (1.4)$ (52.4)$ (27.5)$ (81.3) $ 8.8 $ (71.6)$ (12.2)$ (75.0)Income(loss)fromunconsolidatedinvestments $ (0.5)$ (235.4)$ (307.3)$ (543.2) $ (9.3)$ — $ (869.8)$ (879.1)Lossonextinguishmentofdebt $ — $ — $ (7.0)$ (7.0) $ — $ — $ — $ —(Provisionfor)benefitfromincometaxes(1) $ (23.6)$ 21.9 $ 7.6 $ 5.9 $ 54.2 $ 17.4 $ 207.3 $ 278.9Netincome(loss)attributabletoCBI $ (25.5)$ (265.9)$ (334.2)$ (625.6) $ 53.7 $ (54.2)$ (674.7)$ (675.2)
EPS(2) $ (0.13)$ (1.36)$ (1.72)$ (3.21) $ 0.28 $ (0.28)$ (3.46)$ (3.46)(1) TheeffectivetaxrateappliedtoeachComparableAdjustmentamountisgenerallybaseduponthejurisdictioninwhichtheComparableAdjustmentwasrecognized.Forthe
threemonthsendedMay31,2020,the(provisionfor)benefitfromincometaxesincludesanetincometaxprovisionrecognizedasaresultofadjustmentstovaluationallowancesandanetincometaxprovisionrelatedtolegislativeandgovernmentalinitiativesundertheCoronavirusAid,Relief,andEconomicSecurityAct(“CARESAct”).ForthethreemonthsendedMay31,2019,the(provisionfor)benefitfromincometaxesincludesnetincometaxbenefitprimarilyfromthereversalofavaluationallowancerelatedtocapitallosscarryforwardsasaresultofclassifyingassetsheldforsaleinconnectionwiththedefinitiveagreementtosellaportionofthewineandspiritsbusinesstoE.&J.GalloWinery.
(2) Maynotsumduetoroundingaseachitemiscomputedindependently.ForthethreemonthsendedMay31,2020,andMay31,2019,thecomparableadjustmentsandcomparablebasisdilutednetincomepersharearecalculatedonafullydilutivebasis.(3)
(3) Wehaveexcludedthefollowingweightedaveragecommonsharesoutstandingfromthecalculationofdilutednetincome(loss)percommonshare,astheeffectofincludingthesewouldhavebeenanti-dilutive,inmillions:
FortheThreeMonthsEndedMay31,2020 May31,2019
ClassBConvertibleCommonStock 23.293 23.317Stock-basedawards,primarilystockoptions 1.908 3.433
(4) ForthethreemonthsendedMay31,2020,acquisitions,divestitures,andrelatedcostsprimarilyconsistofanetincometaxprovisionrecognizedfortheadjustmentstovaluationallowancesandaanetlossonforeigncurrencycontracts,partiallyoffsetbyanetgainrecognizedinconnectionwithavineyardsale.ForthethreemonthsendedMay31,2019,acquisitions,divestitures,andrelatedcostsconsistprimarilyofanetincometaxbenefitrecognizedforthereversalofavaluationallowanceandagainrelatedtotheremeasurementofourpreviouslyheldequityinterestinNelson’sGreenBrierDistillerybusinesstotheacquisition-datefairvalue.
(5) ForthethreemonthsendedMay31,2020,restructuringandotherstrategicbusinessdevelopmentcostsconsistprimarilyofequitylossesfromCanopyGrowthCorporation(“Canopy”)relatedtocostsdesignedtoimprovetheirorganizationalfocus,streamlineoperations,andalignproductioncapabilitywithprojecteddemand.ThethreemonthsendedMay31,2020,alsoincludedcoststooptimizeourportfolio,gainefficiencies,reduceourcoststructure,andanimpairmentoflong-livedassetsheldforsalewithinthewineandspiritssegment.ForthethreemonthsendedMay31,2019,restructuringandotherstrategicbusinessdevelopmentcostsconsistprimarilyofcoststooptimizeourportfolio,gainefficiencies,andreduceourcoststructurewithinthewineandspiritssegment.
(6) ForthethreemonthsendedMay31,2020,otherconsistsprimarilyofanunrealizednetlossfromthemarktofairvalueofourinvestmentsinCanopy,costsassociatedwithCanopyequitylosses,anetincometaxprovisionrelatedtotheCARESAct,anetlossfromthemarktofairvalueofundesignatedcommodityderivativecontracts,andincrementalcostsincurredrelatedtotheCOVID-19pandemic.ForthethreemonthsendedMay31,2019,otherconsistsprimarilyofanunrealizednetlossfromthemarktofairvalueofourinvestmentsinCanopyandcostsassociatedwithCanopyequitylosses.
ConstellationBrands,Inc.Q1FY2021Form10-Q #WORTHREACHINGFORI13
CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESRECONCILIATIONSOFGAAPTONON-GAAPFINANCIALMEASURES(continued)
(inmillions,exceptpersharedata)(unaudited)
CanopyEquityEarnings(Losses)andRelatedActivities(“CanopyEIE”)CanopyEIEnon-GAAPfinancialmeasuresareprovidedbecausemanagementusesthisinformationtomonitorourinvestmentinCanopy.Inaddition,webelievethisinformationprovidesinvestorsvaluableinsightonunderlyingbusinesstrendsandresultsinordertoevaluateyear-over-yearfinancialperformance.
ThreeMonthsEnded
May31,2020
May31,2019
Equityearnings(losses)andrelatedactivities-reportedbasis,CanopyEIE(GAAP)(1) $ (377.6) $ (106.0)
ComparableAdjustments(2)(3) 345.9 51.6
Equitylossesandrelatedactivities-comparablebasis,CanopyEIE(Non-GAAP) (31.7) (54.4)
(Provisionfor)benefitfromincometaxes(3) 4.6 15.6
Netincome(loss)attributabletoCBI-comparablebasis,CanopyEIE(Non-GAAP) $ (27.1) $ (38.8)
ThreeMonthsEnded
May31,2020
May31,2019
EPS-reportedbasis,CanopyEIE(GAAP) $ (1.93) $ (0.42)
ComparableAdjustments-CanopyEIE(Non-GAAP) 1.74 0.20
EPS-comparablebasis,CanopyEIE(Non-GAAP)(4) $ (0.14) $ (0.20)
ThreeMonthsEnded
May31,2020 May31,2019
Income(loss)beforeincome
taxes
(Provisionfor)benefitfromincometaxes(3)
Effectivetaxrate(6)
Income(loss)beforeincome
taxes
(Provisionfor)benefitfromincometaxes(3)
Effectivetaxrate(6)
Reportedbasis(GAAP) $ (68.2) $ (104.4) (153.1)% (422.5) 185.4 43.9%
ComparableAdjustments-(Non-GAAP) 631.5 (5.9) 954.1 (278.9)
Comparablebasis(Non-GAAP) 563.3 (110.3) 19.6% $ 531.6 $ (93.5) 17.6%
Comparablebasis,CanopyEIE(Non-GAAP) (31.7) 4.6 (54.4) 15.6
Comparablebasis,excludingCanopyEIE(Non-GAAP) $ 595.0 $ (114.9) 19.3% $ 586.0 $ (109.1) 18.6%
ThreeMonthsEnded
May31,2020
May31,2019
EPS-comparablebasis(Non-GAAP)(5) $ 2.30 $ 2.21
Comparablebasis,CanopyEIE(Non-GAAP) (0.14) (0.20)
EPS-comparablebasis,excludingCanopyEIE(Non-GAAP)(4) $ 2.44 $ 2.40
(1) Equityearnings(losses)andrelatedactivitiesareincludedinincome(loss)fromunconsolidatedinvestments.(2) ComparableAdjustments,CanopyEIEinclude:restructuringandotherstrategicbusinessdevelopmentcosts,unrealized
net(gain)lossfromthemarktofairvalueofsecuritiesmeasuredatfairvalueandrelatedactivities,flowthroughofinventorystep-up,share-basedcompensationexpenserelatedtoacquisitionmilestones,acquisitioncosts,lossondilutionduetoCanopy’sissuanceofadditionalstock,andother(gains)losses.
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI14
(3) TheComparableAdjustmenteffectivetaxrateappliedtoeachComparableAdjustmentamountisgenerallybaseduponthejurisdictioninwhichtheadjustmentwasrecognized.Thebenefitfromincometaxeseffectivetaxrateappliedtoourequityinearnings(losses)ofCanopyisgenerallybasedonthetaxratesofthelegalentitiesthatholdourinvestment.
(4) Maynotsumduetoroundingaseachitemiscomputedindependently.Thecomparableadjustmentsandcomparablebasisdilutednetincomepersharearecalculatedonafullydilutivebasis.
(5) Seereconciliationoftheapplicablenon-GAAPfinancialmeasuresonpage12.(6) EffectivetaxrateisnotconsideredaGAAPfinancialmeasure,forpurposesofthisreconciliation,wederivedthereported
GAAPmeasurebasedonGAAPresults,whichservesasthebasisforthereconciliationtothecomparablenon-GAAPfinancialmeasure.
FreeCashFlowFreecashflow,asdefinedinthereconciliationbelow,isconsideredaliquiditymeasureandisconsideredtoprovideusefulinformationtoinvestorsabouttheamountofcashgenerated,whichcanthenbeused,afterrequireddebtserviceanddividendpayments,forothergeneralcorporatepurposes.Alimitationoffreecashflowisthatitdoesnotrepresentthetotalincreaseordecreaseinthecashbalancefortheperiod.Freecashflowshouldbeconsideredinadditionto,notasasubstitutefor,orsuperiorto,cashflowfromoperatingactivitiespreparedinaccordancewithGAAP.
ThreeMonthsEnded
May31,2020
May31,2019
Netcashprovidedbyoperatingactivities(GAAP) $ 686.5 $ 593.1
Purchasesofproperty,plant,andequipment (144.2) (155.7)
Freecashflow(Non-GAAP) $ 542.3 $ 437.4
ConstellationBrands,Inc.Q1FY2021EarningsRelease #WORTHREACHINGFORI15
