x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
CONSTELLATION BRANDS, INC. |
(Exact name of registrant as specified in its charter) |
Delaware |
16-0716709 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
370 Woodcliff Drive, Suite 300, Fairport, New York |
14450 |
(Address of principal executive offices) |
(Zip Code) |
(585) 218-3600 |
(Registrants telephone number, including area code) |
(Former name, former address and former fiscal year, if changed since last report) |
Class |
Number of Shares Outstanding | |
Class A Common Stock, Par Value $.01 Per Share |
95,935,580 | |
Class B Common Stock, Par Value $.01 Per Share |
11,984,930 |
|
PART I - FINANCIAL INFORMATION |
|||||||
Item 1. Financial Statements |
|||||||
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES |
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(in thousands, except share and per share data) |
|||||||
(unaudited) |
|||||||
August 31, |
February 29, |
||||||
2004 |
2004 |
||||||
ASSETS |
|||||||
CURRENT ASSETS: |
|||||||
Cash and cash investments |
$ |
9,768 |
$ |
37,136 |
|||
Accounts receivable, net |
789,081 |
635,910 |
|||||
Inventories |
1,318,748 |
1,261,378 |
|||||
Prepaid expenses and other |
176,999 |
137,047 |
|||||
Total current assets |
2,294,596 |
2,071,471 |
|||||
PROPERTY, PLANT AND EQUIPMENT, net |
1,061,278 |
1,097,362 |
|||||
GOODWILL |
1,491,925 |
1,540,637 |
|||||
INTANGIBLE ASSETS, net |
720,037 |
744,978 |
|||||
OTHER ASSETS, net |
87,814 |
104,225 |
|||||
Total assets |
$ |
5,655,650 |
$ |
5,558,673 |
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
CURRENT LIABILITIES: |
|||||||
Notes payable to banks |
$ |
193,596 |
$ |
1,792 |
|||
Current maturities of long-term debt |
79,343 |
267,245 |
|||||
Accounts payable |
403,073 |
270,291 |
|||||
Accrued excise taxes |
69,598 |
48,465 |
|||||
Other accrued expenses and liabilities |
457,658 |
442,009 |
|||||
Total current liabilities |
1,203,268 |
1,029,802 |
|||||
LONG-TERM DEBT, less current maturities |
1,720,588 |
1,778,853 |
|||||
DEFERRED INCOME TAXES |
197,835 |
187,410 |
|||||
OTHER LIABILITIES |
152,790 |
184,989 |
|||||
STOCKHOLDERS' EQUITY: |
|||||||
Preferred Stock, $.01 par value- |
|||||||
Authorized, 1,000,000 shares; |
|||||||
Issued, 170,500 shares at August 31, 2004, and |
|||||||
February 29, 2004 (Aggregate liquidation preference |
|||||||
of $172,951 at August 31, 2004) |
2 |
2 |
|||||
Class A Common Stock, $.01 par value- |
|||||||
Authorized, 275,000,000 shares; |
|||||||
Issued, 98,301,048 shares at August 31, 2004, |
|||||||
and 97,150,219 shares at February 29, 2004 |
983 |
971 |
|||||
Class B Convertible Common Stock, $.01 par value- |
|||||||
Authorized, 30,000,000 shares; |
|||||||
Issued, 14,550,230 shares at August 31, 2004, |
|||||||
and 14,564,630 shares at February 29, 2004 |
146 |
146 |
|||||
Additional paid-in capital |
1,043,467 |
1,024,048 |
|||||
Retained earnings |
1,137,234 |
1,010,193 |
|||||
Accumulated other comprehensive income |
228,354 |
372,302 |
|||||
2,410,186 |
2,407,662 |
||||||
Less-Treasury stock- |
|||||||
Class A Common Stock, 2,485,307 shares at |
|||||||
August 31, 2004, and 2,583,608 shares at |
|||||||
February 29, 2004, at cost |
(26,810 |
) |
(27,786 |
) | |||
Class B Convertible Common Stock, 2,502,900 shares |
|||||||
at August 31, 2004, and February 29, 2004, at cost |
(2,207 |
) |
(2,207 |
) | |||
(29,017 |
) |
(29,993 |
) | ||||
Less-Unearned compensation-restricted stock awards |
- |
(50 |
) | ||||
Total stockholders' equity |
2,381,169 |
2,377,619 |
|||||
Total liabilities and stockholders' equity |
$ |
5,655,650 |
$ |
5,558,673 |
|||
The accompanying notes are an integral part of these statements. |
1 | ||
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES |
|||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||
(in thousands, except per share data) |
|||||||||||||
(unaudited) |
|||||||||||||
For the Six Months Ended August 31, |
For the Three Months Ended August 31, |
||||||||||||
2004 |
2003 |
2004 |
2003 |
||||||||||
SALES |
$ |
2,474,557 |
$ |
2,140,757 |
$ |
1,300,242 |
$ |
1,150,517 |
|||||
Less - Excise taxes |
(510,311 |
) |
(456,891 |
) |
(263,301 |
) |
(239,453 |
) | |||||
Net sales |
1,964,246 |
1,683,866 |
1,036,941 |
911,064 |
|||||||||
COST OF PRODUCT SOLD |
(1,424,101 |
) |
(1,234,249 |
) |
(747,258 |
) |
(670,532 |
) | |||||
Gross profit |
540,145 |
449,617 |
289,683 |
240,532 |
|||||||||
SELLING, GENERAL AND ADMINISTRATIVE |
|||||||||||||
EXPENSES |
(270,783 |
) |
(235,095 |
) |
(132,355 |
) |
(127,293 |
) | |||||
RESTRUCTURING AND RELATED CHARGES |
(2,782 |
) |
(19,399 |
) |
(1,169 |
) |
(17,083 |
) | |||||
Operating income |
266,580 |
195,123 |
156,159 |
96,156 |
|||||||||
GAIN ON CHANGE IN FAIR VALUE OF |
|||||||||||||
DERIVATIVE INSTRUMENTS |
- |
1,181 |
- |
- |
|||||||||
EQUITY IN EARNINGS OF EQUITY |
|||||||||||||
METHOD INVESTEES |
262 |
839 |
200 |
511 |
|||||||||
INTEREST EXPENSE, net |
(60,681 |
) |
(80,341 |
) |
(30,400 |
) |
(41,098 |
) | |||||
Income before income taxes |
206,161 |
116,802 |
125,959 |
55,569 |
|||||||||
PROVISION FOR INCOME TAXES |
(74,218 |
) |
(42,049 |
) |
(45,345 |
) |
(20,005 |
) | |||||
NET INCOME |
131,943 |
74,753 |
80,614 |
35,564 |
|||||||||
Dividends on preferred stock |
(4,902 |
) |
(844 |
) |
(2,451 |
) |
(844 |
) | |||||
INCOME AVAILABLE TO COMMON |
|||||||||||||
STOCKHOLDERS |
$ |
127,041 |
$ |
73,909 |
$ |
78,163 |
$ |
34,720 |
|||||
SHARE DATA: |
|||||||||||||
Earnings per common share: |
|||||||||||||
Basic - Class A Common Stock |
$ |
1.20 |
$ |
0.78 |
$ |
0.73 |
$ |
0.36 |
|||||
Basic - Class B Common Stock |
$ |
1.09 |
$ |
0.71 |
$ |
0.67 |
$ |
0.32 |
|||||
Diluted |
$ |
1.14 |
$ |
0.75 |
$ |
0.69 |
$ |
0.34 |
|||||
Weighted average common shares outstanding: |
|||||||||||||
Basic - Class A Common Stock |
95,085 |
83,655 |
95,451 |
86,502 |
|||||||||
Basic - Class B Common Stock |
12,054 |
12,071 |
12,049 |
12,070 |
|||||||||
Diluted |
115,588 |
99,916 |
116,147 |
104,131 |
|||||||||
The accompanying notes are an integral part of these statements. |
2 | ||
|
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES |
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
For the Six Months Ended August 31, |
|||||||
2004 |
2003 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income |
$ |
131,943 |
$ |
74,753 |
|||
Adjustments to reconcile net income to net cash provided by |
|||||||
operating activities: |
|||||||
Depreciation of property, plant and equipment |
43,311 |
38,902 |
|||||
Deferred tax provision |
14,884 |
2,811 |
|||||
Amortization of intangible and other assets |
5,756 |
14,041 |
|||||
Loss on disposal of assets |
2,813 |
468 |
|||||
Noncash portion of loss on extinguishment of debt |
1,799 |
800 |
|||||
Stock-based compensation expense |
53 |
183 |
|||||
Amortization of discount on long-term debt |
35 |
28 |
|||||
Equity in earnings of equity method investees |
(262 |
) |
(839 |
) | |||
Gain on change in fair value of derivative instruments |
- |
(1,181 |
) | ||||
Change in operating assets and liabilities, net of effects |
|||||||
from purchases of businesses: |
|||||||
Accounts receivable, net |
(169,792 |
) |
(99,984 |
) | |||
Inventories |
(119,808 |
) |
77,826 |
||||
Prepaid expenses and other current assets |
(36,251 |
) |
14,155 |
||||
Accounts payable |
145,195 |
(44,289 |
) | ||||
Accrued excise taxes |
22,085 |
13,906 |
|||||
Other accrued expenses and liabilities |
20,502 |
(13,305 |
) | ||||
Other, net |
(8,113 |
) |
10,140 |
||||
Total adjustments |
(77,793 |
) |
13,662 |
||||
Net cash provided by operating activities |
54,150 |
88,415 |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Purchases of property, plant and equipment |
(50,910 |
) |
(46,444 |
) | |||
Payment of accrued earn-out amount |
(1,339 |
) |
(978 |
) | |||
Proceeds from sale of assets |
1,024 |
10,150 |
|||||
Purchases of businesses, net of cash acquired |
- |
(1,069,166 |
) | ||||
Proceeds from sale of marketable equity securities |
- |
777 |
|||||
Net cash used in investing activities |
(51,225 |
) |
(1,105,661 |
) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Principal payments of long-term debt |
(234,676 |
) |
(1,021,688 |
) | |||
Payment of preferred stock dividends |
(4,902 |
) |
- |
||||
Payment of issuance costs of long-term debt |
(901 |
) |
(33,473 |
) | |||
Net proceeds from notes payable |
192,472 |
32,407 |
|||||
Exercise of employee stock options |
17,351 |
15,227 |
|||||
Proceeds from employee stock purchases |
2,432 |
1,817 |
|||||
Proceeds from issuance of long-term debt |
- |
1,600,000 |
|||||
Proceeds from equity offerings, net of fees |
- |
426,359 |
|||||
Net cash (used in) provided by financing activities |
(28,224 |
) |
1,020,649 |
||||
Effect of exchange rate changes on cash and cash investments |
(2,069 |
) |
30,252 |
||||
NET (DECREASE) INCREASE IN CASH AND CASH INVESTMENTS |
(27,368 |
) |
33,655 |
||||
CASH AND CASH INVESTMENTS, beginning of period |
37,136 |
13,810 |
|||||
CASH AND CASH INVESTMENTS, end of period |
$ |
9,768 |
$ |
47,465 |
|||
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING |
|||||||
AND FINANCING ACTIVITIES: |
|||||||
Fair value of assets acquired, including cash acquired |
$ |
- |
$ |
1,804,875 |
|||
Liabilities assumed |
- |
(648,089 |
) | ||||
Net assets acquired |
- |
1,156,786 |
|||||
Less - stock issuance |
- |
(77,243 |
) | ||||
Less - direct acquisition costs accrued or previously paid |
- |
(8,872 |
) | ||||
Less - cash acquired |
- |
(1,505 |
) | ||||
Net cash paid for purchases of businesses |
$ |
- |
$ |
1,069,166 |
|||
The accompanying notes are an integral part of these statements. |
3 | ||
|
1) | MANAGEMENTS REPRESENTATIONS: |
2) | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS: |
4 | ||
|
3) | ACQUISITIONS: |
(in thousands) |
||||
Current assets |
$ |
535,374 |
||
Property, plant and equipment |
332,125 |
|||
Other assets |
27,672 |
|||
Trademarks |
265,583 |
|||
Goodwill |
613,805 |
|||
Total assets acquired |
1,774,559 |
|||
Current liabilities |
294,692 |
|||
Long-term liabilities |
326,646 |
|||
Total liabilities acquired |
621,338 |
|||
Net assets acquired |
$ |
1,153,221 |
5 | ||
|
4) | INVENTORIES: |
August 31,
2004 |
February 29,
2004 |
||||||
(in thousands) |
|||||||
Raw materials and supplies |
$ |
62,050 |
$ |
49,633 |
|||
In-process inventories |
794,091 |
803,200 |
|||||
Finished case goods |
462,607 |
408,545 |
|||||
$ |
1,318,748 |
$ |
1,261,378 |
5) | GOODWILL: |
Constellation
Wines |
Constellation
Beers and
Spirits |
Consolidated |
||||||||
(in thousands) |
||||||||||
Balance, February 29, 2004 |
$ |
1,407,350 |
$ |
133,287 |
$ |
1,540,637 |
||||
Purchase accounting allocations |
(2,005 |
) |
- |
(2,005 |
) | |||||
Foreign currency translation adjustments |
(48,179 |
) |
215 |
(47,964 |
) | |||||
Purchase price earn-out |
1,257 |
- |
1,257 |
|||||||
Balance, August 31, 2004 |
$ |
1,358,423 |
$ |
133,502 |
$ |
1,491,925 |
6) | INTANGIBLE ASSETS: |
August 31, 2004 |
February 29, 2004 |
||||||||||||
Gross
Carrying
Amount |
Net
Carrying
Amount |
Gross
Carrying
Amount |
Net
Carrying
Amount |
||||||||||
(in thousands) |
|||||||||||||
Amortizable intangible assets: |
|||||||||||||
Distribution agreements |
$ |
12,883 |
$ |
2,869 |
$ |
12,883 |
$ |
4,455 |
|||||
Other |
4,021 |
52 |
4,021 |
64 |
|||||||||
Total |
$ |
16,904 |
2,921 |
$ |
16,904 |
4,519 |
|||||||
Nonamortizable intangible assets: |
|||||||||||||
Trademarks |
698,704 |
722,047 |
|||||||||||
Agency relationships |
18,412 |
18,412 |
|||||||||||
Total |
717,116 |
740,459 |
|||||||||||
Total intangible assets |
$ |
720,037 |
$ |
744,978 |
6 | ||
|
(in thousands) |
||||
2005 |
$ |
1,225 |
||
2006 |
$ |
1,318 |
||
2007 |
$ |
341 |
||
2008 |
$ |
25 |
||
2009 |
$ |
12 |
||
2010 |
$ |
- |
7) | BORROWINGS: |
Tranche A
Term Loan |
Tranche B
Term Loan |
Total |
||||||||
(in thousands) |
||||||||||
2005 |
$ |
30,000 |
$ |
- |
$ |
30,000 |
||||
2006 |
80,000 |
5,000 |
85,000 |
|||||||
2007 |
100,000 |
5,000 |
105,000 |
|||||||
2008 |
120,000 |
125,313 |
245,313 |
|||||||
2009 |
- |
364,687 |
364,687 |
|||||||
$ |
330,000 |
$ |
500,000 |
$ |
830,000 |
7 | ||
|
8 | ||
|
8) | RETIREMENT SAVINGS PLANS AND POSTRETIREMENT BENEFIT PLANS: |
For the Six Months
Ended August 31, |
For the Three Months
Ended August 31, |
||||||||||||
2004 |
2003 |
2004 |
2003 |
||||||||||
(in thousands) |
|||||||||||||
Service cost |
$ |
1,074 |
$ |
1,101 |
$ |
531 |
$ |
550 |
|||||
Interest cost |
8,008 |
7,236 |
4,033 |
3,618 |
|||||||||
Expected return on plan assets |
(8,458 |
) |
(7,578 |
) |
(4,257 |
) |
(3,789 |
) | |||||
Amortization of prior service cost |
1,156 |
4 |
583 |
2 |
|||||||||
Recognized net actuarial loss |
100 |
1,010 |
50 |
505 |
|||||||||
Net periodic benefit cost |
$ |
1,880 |
$ |
1,773 |
$ |
940 |
$ |
886 |
For the Six Months
Ended August 31, |
For the Three Months
Ended August 31, |
||||||||||||
2004 |
2003 |
2004 |
2003 |
||||||||||
(in thousands) |
|||||||||||||
Service cost |
$ |
103 |
$ |
74 |
$ |
51 |
$ |
37 |
|||||
Interest cost |
166 |
141 |
83 |
70 |
|||||||||
Expected return on plan assets |
- |
- |
- |
- |
|||||||||
Amortization of prior service cost |
4 |
3 |
2 |
2 |
|||||||||
Recognized net actuarial loss |
11 |
10 |
6 |
5 |
|||||||||
Net periodic benefit cost |
$ |
284 |
$ |
228 |
$ |
142 |
$ |
114 |
9) | STOCKHOLDERS EQUITY: |
10) | EARNINGS PER COMMON SHARE: |
9 | ||
|
For the Six Months
Ended August 31, |
For the Three Months
Ended August 31, |
||||||||||||
2004 |
2003 |
2004 |
2003 |
||||||||||
(in thousands, except per share data) |
|||||||||||||
Net income |
$ |
131,943 |
$ |
74,753 |
$ |
80,614 |
$ |
35,564 |
|||||
Dividends on preferred stock |
(4,902 |
) |
(844 |
) |
(2,451 |
) |
(844 |
) | |||||
Income available to common stockholders |
$ |
127,041 |
$ |
73,909 |
$ |
78,163 |
$ |
34,720 |
|||||
Weighted average common shares outstanding - basic: |
|||||||||||||
Class A Common Stock |
95,085 |
83,655 |
95,451 |
86,502 |
|||||||||
Class B Common Convertible Stock |
12,054 |
12,071 |
12,049 |
12,070 |
|||||||||
Total weighted average common shares outstanding - basic |
107,139 |
95,726 |
107,500 |
98,572 |
|||||||||
Stock options |
3,457 |
3,101 |
3,655 |
3,381 |
|||||||||
Preferred stock |
4,992 |
1,089 |
4,992 |
2,178 |
|||||||||
Weighted average common shares outstanding - diluted |
115,588 |
99,916 |
116,147 |
104,131 |
|||||||||
Earnings per common share - basic: |
|||||||||||||
Class A Common Stock |
$ |
1.20 |
$ |
0.78 |
$ |
0.73 |
$ |
0.36 |
|||||
Class B Common Convertible Stock |
$ |
1.09 |
$ |
0.71 |
$ |
0.67 |
$ |
0.32 |
|||||
Earnings per common share - diluted |
$ |
1.14 |
$ |
0.75 |
$ |
0.69 |
$ |
0.34 |
11) | STOCK-BASED COMPENSATION: |
10 | ||
|
For the Six Months
Ended August 31, |
For the Three Months
Ended August 31, |
||||||||||||
2004 |
2003 |
2004 |
2003 |
||||||||||
(in thousands, except per share data) |
|||||||||||||
Net income, as reported |
$ |
131,943 |
$ |
74,753 |
$ |
80,614 |
$ |
35,564 |
|||||
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects |
32 |
120 |
17 |
15 |
|||||||||
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |
(10,476 |
) |
(4,809 |
) |
(7,842 |
) |
(2,344 |
) | |||||
Pro forma net income |
$ |
121,499 |
$ |
70,064 |
$ |
72,789 |
$ |
33,235 |
|||||
Earnings per common share - basic: |
|||||||||||||
Class A Common Stock, as reported |
$ |
1.20 |
$ |
0.78 |
$ |
0.73 |
$ |
0.36 |
|||||
Class B Common Convertible Stock, as reported |
$ |
1.09 |
$ |
0.71 |
$ |
0.67 |
$ |
0.32 |
|||||
Class A Common Stock, pro forma |
$ |
1.10 |
$ |
0.73 |
$ |
0.66 |
$ |
0.33 |
|||||
Class B Common Convertible Stock, pro forma |
$ |
1.00 |
$ |
0.67 |
$ |
0.60 |
$ |
0.30 |
|||||
Earnings per common share - diluted, as reported |
$ |
1.14 |
$ |
0.75 |
$ |
0.69 |
$ |
0.34 |
|||||
Earnings per common share - diluted, pro forma |
$ |
1.05 |
$ |
0.70 |
$ |
0.63 |
$ |
0.32 |
12) | COMPREHENSIVE INCOME: |
For the Six Months
Ended August 31, |
For the Three Months
Ended August 31, |
||||||||||||
2004 |
2003 |
2004 |
2003 |
||||||||||
(in thousands) |
|||||||||||||
Net income |
$ |
131,943 |
$ |
74,753 |
$ |
80,614 |
$ |
35,564 |
|||||
Other comprehensive income, net of tax: |
|||||||||||||
Foreign currency translation adjustments |
(124,245 |
) |
106,117 |
(19,500 |
) |
(21,654 |
) | ||||||
Cash flow hedges: |
|||||||||||||
Net derivative (losses) gains, net of tax benefit (expense) of $9,948, ($9,148), $484 and ($2,127), respectively |
(23,097 |
) |
21,295 |
(1,201 |
) |
8,813 |
|||||||
Reclassification adjustments, net of tax expense (benefit) of $659, ($612), ($844) and ($612), respectively |
1,434 |
(1,343 |
) |
(1,977 |
) |
(1,343 |
) | ||||||
Net cash flow hedges |
(21,663 |
) |
19,952 |
(3,178 |
) |
7,470 |
|||||||
Unrealized gains (losses) on marketable equity securities, net of tax (expense) benefit of ($17), $347, ($62) and $347, respectively |
39 |
(810 |
) |
(143 |
) |
(810 |
) | ||||||
Minimum pension liability adjustment, net of tax (expense) benefit of ($813), $148, ($316) and ($874), respectively |
1,921 |
(271 |
) |
790 |
1,547 |
||||||||
Total comprehensive (loss) income |
$ |
(12,005 |
) |
$ |
199,741 |
$ |
58,583 |
$ |
22,117 |
11 | ||
|
Foreign
Currency
Translation
Adjustments |
Net
Unrealized
Gains on
Derivatives |
Unrealized
Loss on
Marketable
Equity
Securities |
Minimum
Pension
Liability
Adjustment |
Accumulated
Other
Comprehensive
Income (Loss) |
||||||||||||
(in thousands) |
||||||||||||||||
Balance, February 29, 2004 |
$ |
393,972 |
$ |
36,949 |
$ |
(432 |
) |
$ |
(58,187 |
) |
$ |
372,302 |
||||
Current period change |
(124,245 |
) |
(21,663 |
) |
39 |
1,921 |
(143,948 |
) | ||||||||
Balance, August 31, 2004 |
$ |
269,727 |
$ |
15,286 |
$ |
(393 |
) |
$ |
(56,266 |
) |
$ |
228,354 |
12 | ||
|
Employee
Termination
Benefit
Costs |
Grape
Contract
Termination
Costs |
Facility
Consolidation/
Relocation
Costs |
Total |
||||||||||
(in thousands) |
|||||||||||||
Balance, February 29, 2004 |
$ |
1,539 |
$ |
1,048 |
$ |
- |
$ |
2,587 |
|||||
Restructuring charges |
1,231 |
- |
256 |
1,487 |
|||||||||
Cash expenditures |
(1,575 |
) |
- |
(256 |
) |
(1,831 |
) | ||||||
Foreign currency adjustments |
(55 |
) |
- |
- |
(55 |
) | |||||||
Balance, May 31, 2004 |
1,140 |
1,048 |
- |
2,188 |
|||||||||
Restructuring charges |
382 |
- |
358 |
740 |
|||||||||
Reversal of prior accruals |
(228 |
) |
- |
- |
(228 |
) | |||||||
Cash expenditures |
(373 |
) |
- |
(358 |
) |
(731 |
) | ||||||
Foreign currency adjustments |
(11 |
) |
- |
- |
(11 |
) | |||||||
Balance, August 31, 2004 |
$ |
910 |
$ |
1,048 |
$ |
- |
$ |
1,958 |
14) | CONDENSED CONSOLIDATING FINANCIAL INFORMATION: |
13 | ||
|
Parent
Company |
Subsidiary
Guarantors |
Subsidiary
Nonguarantors |
Eliminations |
Consolidated |
||||||||||||
(in thousands) |
||||||||||||||||
Condensed Consolidating Balance Sheet at August 31, 2004 |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash investments |
$ |
737 |
$ |
1,291 |
$ |
7,740 |
$ |
- |
$ |
9,768 |
||||||
Accounts receivable, net |
115,653 |
211,396 |
462,032 |
- |
789,081 |
|||||||||||
Inventories |
12,665 |
697,885 |
618,212 |
(10,014 |
) |
1,318,748 |
||||||||||
Prepaid expenses and other |
15,856 |
110,297 |
50,846 |
- |
176,999 |
|||||||||||
Intercompany (payable) receivable |
(468,880 |
) |
(102,263 |
) |
571,143 |
- |
- |
|||||||||
Total current assets |
(323,969 |
) |
918,606 |
1,709,973 |
(10,014 |
) |
2,294,596 |
|||||||||
Property, plant and equipment, net |
50,640 |
412,557 |
598,081 |
- |
1,061,278 |
|||||||||||
Investments in subsidiaries |
4,402,623 |
1,801,493 |
- |
(6,204,116 |
) |
- |
||||||||||
Goodwill |
51,172 |
583,079 |
857,674 |
- |
1,491,925 |
|||||||||||
Intangible assets, net |
10,572 |
386,851 |
322,614 |
- |
720,037 |
|||||||||||
Other assets, net |
31,062 |
2,341 |
54,411 |
- |
87,814 |
|||||||||||
Total assets |
$ |
4,222,100 |
$ |
4,104,927 |
$ |
3,542,753 |
$ |
(6,214,130 |
) |
$ |
5,655,650 |
|||||
Current liabilities: |
||||||||||||||||
Notes payable to banks |
$ |
139,000 |
$ |
- |
$ |
54,596 |
$ |
- |
$ |
193,596 |
||||||
Current maturities of long-term debt |
72,565 |
3,482 |
3,296 |
- |
79,343 |
|||||||||||
Accounts payable |
35,897 |
112,812 |
254,364 |
- |
403,073 |
|||||||||||
Accrued excise taxes |
8,676 |
32,619 |
28,303 |
- |
69,598 |
|||||||||||
Other accrued expenses and liabilities |
116,004 |
70,050 |
271,272 |
332 |
457,658 |
|||||||||||
Total current liabilities |
372,142 |
218,963 |
611,831 |
332 |
1,203,268 |
|||||||||||
Long-term debt, less current maturities |
1,686,496 |
6,488 |
27,604 |
- |
1,720,588 |
|||||||||||
Deferred income taxes |
45,480 |
120,792 |
31,563 |
- |
197,835 |
|||||||||||
Other liabilities |
3,885 |
22,143 |
126,762 |
- |
152,790 |
|||||||||||
Stockholders equity: |
||||||||||||||||
Preferred stock |
2 |
- |
- |
- |
2 |
|||||||||||
Class A and Class B common stock |
1,129 |
6,443 |
141,573 |
(148,016 |
) |
1,129 |
||||||||||
Additional paid-in capital |
1,043,467 |
1,952,157 |
2,415,934 |
(4,368,091 |
) |
1,043,467 |
||||||||||
Retained earnings |
1,148,441 |
1,588,158 |
99,851 |
(1,699,216 |
) |
1,137,234 |
||||||||||
Accumulated other comprehensive (loss) income |
(49,925 |
) |
189,783 |
87,635 |
861 |
228,354 |
||||||||||
Treasury stock and other |
(29,017 |
) |
- |
- |
- |
(29,017 |
) | |||||||||
Total stockholders equity |
2,114,097 |
3,736,541 |
2,744,993 |
(6,214,462 |
) |
2,381,169 |
||||||||||
Total liabilities and stockholders equity |
$ |
4,222,100 |
$ |
4,104,927 |
$ |
3,542,753 |
$ |
(6,214,130 |
) |
$ |
5,655,650 |
|||||
Condensed Consolidating Balance Sheet at February 29, 2004 | ||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash investments |
$ |
1,048 |
$ |
4,664 |
$ |
31,424 |
$ |
- |
$ |
37,136 |
||||||
Accounts receivable, net |
137,422 |
145,152 |
353,336 |
- |
635,910 |
|||||||||||
Inventories |
9,922 |
696,928 |
561,900 |
(7,372 |
) |
1,261,378 |
||||||||||
Prepaid expenses and other |
8,734 |
72,788 |
55,525 |
- |
137,047 |
|||||||||||
Intercompany (payable) receivable |
(381,765 |
) |
(176,470 |
) |
558,235 |
- |
- |
|||||||||
Total current assets |
(224,639 |
) |
743,062 |
1,560,420 |
(7,372 |
) |
2,071,471 |
|||||||||
Property, plant and equipment, net |
50,022 |
409,852 |
637,488 |
- |
1,097,362 |
|||||||||||
Investments in subsidiaries |
4,270,871 |
1,757,700 |
- |
(6,028,571 |
) |
- |
||||||||||
Goodwill |
50,338 |
586,259 |
904,040 |
- |
1,540,637 |
|||||||||||
Intangible assets, net |
10,572 |
385,581 |
348,825 |
- |
744,978 |
|||||||||||
Other assets, net |
36,041 |
2,146 |
66,038 |
- |
104,225 |
|||||||||||
Total assets |
$ |
4,193,205 |
$ |
3,884,600 |
$ |
3,516,811 |
$ |
(6,035,943 |
) |
$ |
5,558,673 |
14 | ||
|
Parent
Company |
Subsidiary
Guarantors |
Subsidiary
Nonguarantors |
Eliminations |
Consolidated |
||||||||||||
(in thousands) |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Notes payable to banks |
$ |
- |
$ |
- |
$ |
1,792 |
$ |
- |
$ |
1,792 |
||||||
Current maturities of long-term debt |
260,061 |
3,949 |
3,235 |
- |
267,245 |
|||||||||||
Accounts payable |
33,631 |
67,459 |
169,201 |
- |
270,291 |
|||||||||||
Accrued excise taxes |
8,005 |
15,344 |
25,116 |
- |
48,465 |
|||||||||||
Other accrued expenses and liabilities |
151,534 |
23,352 |
267,123 |
- |
442,009 |
|||||||||||
Total current liabilities |
453,231 |
110,104 |
466,467 |
- |
1,029,802 |
|||||||||||
Long-term debt, less current maturities |
1,739,221 |
8,510 |
31,122 |
- |
1,778,853 |
|||||||||||
Deferred income taxes |
56,815 |
119,704 |
10,891 |
- |
187,410 |
|||||||||||
Other liabilities |
6,209 |
21,646 |
157,134 |
- |
184,989 |
|||||||||||
Stockholders equity: |
||||||||||||||||
Preferred stock |
2 |
- |
- |
- |
2 |
|||||||||||
Class A and Class B common stock |
1,117 |
6,443 |
141,573 |
(148,016 |
) |
1,117 |
||||||||||
Additional paid-in capital |
1,024,048 |
1,977,179 |
2,418,614 |
(4,395,793 |
) |
1,024,048 |
||||||||||
Retained earnings |
1,017,565 |
1,431,384 |
53,378 |
(1,492,134 |
) |
1,010,193 |
||||||||||
Accumulated other comprehensive (loss) income |
(74,960 |
) |
209,630 |
237,632 |
- |
372,302 |
||||||||||
Treasury stock and other |
(30,043 |
) |
- |
- |
- |
(30,043 |
) | |||||||||
Total stockholders equity |
1,937,729 |
3,624,636 |
2,851,197 |
(6,035,943 |
) |
2,377,619 |
||||||||||
Total liabilities and stockholders equity |
$ |
4,193,205 |
$ |
3,884,600 |
$ |
3,516,811 |
$ |
(6,035,943 |
) |
$ |
5,558,673 |
|||||
Condensed Consolidating Statement of Income for the Six Months Ended August 31, 2004 | ||||||||||||||||
Sales |
$ |
386,014 |
$ |
1,043,690 |
$ |
1,222,083 |
$ |
(177,230 |
) |
$ |
2,474,557 |
|||||
Less - excise taxes |
(66,335 |
) |
(224,885 |
) |
(219,091 |
) |
- |
(510,311 |
) | |||||||
Net sales |
319,679 |
818,805 |
1,002,992 |
(177,230 |
) |
1,964,246 |
||||||||||
Cost of product sold |
(292,303 |
) |
(487,190 |
) |
(818,003 |
) |
173,395 |
(1,424,101 |
) | |||||||
Gross profit |
27,376 |
331,615 |
184,989 |
(3,835 |
) |
540,145 |
||||||||||
Selling, general and administrative expenses |
(72,987 |
) |
(102,139 |
) |
(95,657 |
) |
- |
(270,783 |
) | |||||||
Restructuring and related charges |
- |
(1,535 |
) |
(1,247 |
) |
- |
(2,782 |
) | ||||||||
Operating (loss) income |
(45,611 |
) |
227,941 |
88,085 |
(3,835 |
) |
266,580 |
|||||||||
Gain on change in fair value of derivative instruments |
- |
- |
- |
- |
- |
|||||||||||
Equity in earnings of equity method investees and subsidiaries |
156,774 |
46,473 |
262 |
(203,247 |
) |
262 |
||||||||||
Interest income (expense), net |
10,796 |
(55,596 |
) |
(15,881 |
) |
- |
(60,681 |
) | ||||||||
Income before income taxes |
121,959 |
218,818 |
72,466 |
(207,082 |
) |
206,161 |
||||||||||
Benefit from (provision for) income taxes |
13,819 |
(62,044 |
) |
(25,993 |
) |
- |
(74,218 |
) | ||||||||
Net income |
135,778 |
156,774 |
46,473 |
(207,082 |
) |
131,943 |
||||||||||
Dividends on preferred stock |
(4,902 |
) |
- |
- |
- |
(4,902 |
) | |||||||||
Income available to common stockholders |
$ |
130,876 |
$ |
156,774 |
$ |
46,473 |
$ |
(207,082 |
) |
$ |
127,041 |
15 | ||
|
Parent
Company |
Subsidiary
Guarantors |
Subsidiary
Nonguarantors |
Eliminations |
Consolidated |
||||||||||||
(in thousands) |
||||||||||||||||
Condensed Consolidating Statement of Income for the Six Months Ended August 31, 2003 |
||||||||||||||||
Sales |
$ |
379,913 |
$ |
1,109,997 |
$ |
852,076 |
$ |
(201,229 |
) |
$ |
2,140,757 |
|||||
Less - excise taxes |
(65,204 |
) |
(215,308 |
) |
(176,379 |
) |
- |
(456,891 |
) | |||||||
Net sales |
314,709 |
894,689 |
675,697 |
(201,229 |
) |
1,683,866 |
||||||||||
Cost of product sold |
(278,296 |
) |
(616,823 |
) |
(540,167 |
) |
201,037 |
(1,234,249 |
) | |||||||
Gross profit |
36,413 |
277,866 |
135,530 |
(192 |
) |
449,617 |
||||||||||
Selling, general and administrative expenses |
(62,985 |
) |
(98,601 |
) |
(73,509 |
) |
- |
(235,095 |
) | |||||||
Restructuring and related charges |
- |
(18,095 |
) |
(1,304 |
) |
- |
(19,399 |
) | ||||||||
Operating (loss) income |
(26,572 |
) |
161,170 |
60,717 |
(192 |
) |
195,123 |
|||||||||
Gain on change in fair value of derivative instruments |
1,181 |
- |
- |
- |
1,181 |
|||||||||||
Equity in earnings of equity method investees and subsidiaries |
93,096 |
38,599 |
299 |
(131,155 |
) |
839 |
||||||||||
Interest income (expense), net |
1,167 |
(76,531 |
) |
(4,977 |
) |
- |
(80,341 |
) | ||||||||
Income before income taxes |
68,872 |
123,238 |
56,039 |
(131,347 |
) |
116,802 |
||||||||||
Benefit from (provision for) income taxes |
6,073 |
(30,142 |
) |
(17,980 |
) |
- |
(42,049 |
) | ||||||||
Net income |
74,945 |
93,096 |
38,059 |
(131,347 |
) |
74,753 |
||||||||||
Dividends on preferred stock |
(844 |
) |
- |
- |
- |
(844 |
) | |||||||||
Income available to common stockholders |
$ |
74,101 |
$ |
93,096 |
$ |
38,059 |
$ |
(131,347 |
) |
$ |
73,909 |
|||||
Condensed Consolidating Statement of Income for the Three Months Ended August 31, 2004 | ||||||||||||||||
Sales |
$ |
215,474 |
$ |
554,942 |
$ |
636,445 |
$ |
(106,619 |
) |
$ |
1,300,242 |
|||||
Less - excise taxes |
(34,480 |
) |
(115,666 |
) |
(113,155 |
) |
- |
(263,301 |
) | |||||||
Net sales |
180,994 |
439,276 |
523,290 |
(106,619 |
) |
1,036,941 |
||||||||||
Cost of product sold |
(161,191 |
) |
(263,446 |
) |
(426,237 |
) |
103,616 |
(747,258 |
) | |||||||
Gross profit |
19,803 |
175,830 |
97,053 |
(3,003 |
) |
289,683 |
||||||||||
Selling, general and administrative expenses |
(34,143 |
) |
(50,072 |
) |
(48,140 |
) |
- |
(132,355 |
) | |||||||
Restructuring and related charges |
- |
(234 |
) |
(935 |
) |
- |
(1,169 |
) | ||||||||
Operating (loss) income |
(14,340 |
) |
125,524 |
47,978 |
(3,003 |
) |
156,159 |
|||||||||
Gain on change in fair value of derivative instruments |
- |
- |
- |
- |