Exhibit 99.1
fy2018q4_header.jpg
Generates Record EPS and Operating Cash Flow in FY18
 
Net Sales
Operating Income
Earnings Before Interest & Taxes (EBIT)
Diluted Net Income Per Share Attributable to CBI (EPS)
Fiscal Year 2018 Financial Highlights (1)  | In millions, except per share data
Reported
$7,585
$2,285
NA
$11.55
% Change
3%
(5%)
NA
54%
Comparable
$7,585
$2,473
$2,508
$8.72
% Change
3%
13%
13%
29%
Fourth Quarter Fiscal Year 2018 Financial Highlights (1)
Reported
$1,766
$516
NA
$4.64
% Change
8%
(27%)
NA
105%
Comparable
$1,766
$545
$546
$1.90
% Change
8%
10%
10%
28%
(1) Definitions of reported and comparable, as well as reconciliations of non-GAAP financial measures, are contained elsewhere in this news release. | NA=Not Applicable
HIGHLIGHTS

•
Achieves fiscal 2018 reported basis EPS of $11.55 and comparable basis EPS of $8.72, an increase of 54% and 29%, respectively; reported basis EPS reflects benefit related to U.S. tax reform
•
Generates record operating cash flow of more than $1.9 billion and $874 million of free cash flow for fiscal 2018
•
Provides fiscal 2019 outlook; expects reported basis EPS of $9.38 - $9.68 and comparable basis EPS of $9.40 - $9.70, excluding share repurchases
•
Projects fiscal 2019 operating cash flow target of approximately $2.45 billion and free cash flow projection of $1.2 - $1.3 billion
•
Repurchases 3.7 million shares of common stock for $800 million for the quarter; repurchases 4.8 million shares of common stock for $1.04 billion for fiscal 2018
•
Declares quarterly cash dividend of $0.74 per share Class A and $0.67 per share Class B common stock, an increase of approximately 42%; increases dividend payout ratio target to 30%
awardsandrecognition2017001.jpg
AWARDS + RECOGNITION

In addition to achieving another fiscal year of record-breaking performance, calendar 2017 was a year marked by an impressive list of awards and accolades. A listing of those achievements is embedded in this news release by clicking on the Awards + Recognition thumbnail.

 


rob_sands03152018.jpg
“Execution of our Total Beverage Alcohol premiumization strategy for fiscal 2018 produced best-in-class EPS growth of almost 30% as we continued to grow overall market share and improve margins across the business. We also completed significant operational expansion milestones at our Nava brewery and glass plant. We expect to capitalize on this momentum, as we are targeting impressive sales and earnings growth for the coming year.”
Rob Sands
 
Chief Executive Officer
 

“Fiscal 2018’s exceptional financial growth and record operating cash flow provided flexibility to return more than $1.4 billion to shareholders through a combination of share repurchases and dividends. Our strong financial profile and future business prospects provide us the confidence to increase our dividend by more than 40%. Savings from U.S. tax reform will be used to make smart investments to fuel growth in the coming year.”

david_klein03152018.jpg
David Klein
 
Executive Vice President
and Chief Financial Officer
 

1


fy2018q4_subheader.jpg
beer 
 
Shipment Volume
Depletion Volume
Net Sales
Operating Income
Year Ended | In millions; branded product, 24-pack, 12-ounce case equivalents
February 28, 2018
268.0
 
$4,658.5
$1,838.3
February 28, 2017
246.4
 
$4,229.3
$1,534.4
% Change
8.8%
9.8%
10.1%
19.8%
Three Months Ended
February 28, 2018
56.4
 
$997.2
$379.1
February 28, 2017
51.2
 
$891.2
$338.7
% Change
10.2%
11.0%
11.9%
11.9%
FISCAL YEAR 2018 HIGHLIGHTS
•
Constellation’s Beer portfolio was the #1 growth contributor to the U.S. beer market with all import brand families achieving record volume levels.
•
The Modelo brand family crossed the 110 million case milestone and drove strong portfolio performance and share gains with depletion growth of 18%.
•
Operating margin increased 320 basis points to 39.5%, driven primarily by strong operating performance and favorable pricing.
•
Combined Nava and Obregon brewery capacity reaches 31.5 million hectoliters; fourth furnace now operational at Nava glass plant.
•
Incremental capacity expansions planned at Obregon and Nava breweries to fuel industry-leading growth of the beer business.
 
FOURTH QUARTER 2018 HIGHLIGHTS
•
Strong portfolio depletion performance was driven by the Modelo and Corona brand families, up 18% and 6%, respectively.
•
Corona Familiar launched new 6 and 12-pack,12-ounce bottle packages in regionally expanded markets and claimed a position among top 10, high-end beer share gainers along with Modelo Especial, Modelo Chelada Tamarindo Picante and Pacifico.
•
Operating margin remained steady at 38%, as benefits from strong operating performance and pricing were mostly offset by higher SG&A, including increased marketing spend, for the quarter.
•
Corona Premier is positioned for nationwide launch during first quarter fiscal 2019 with significant TV advertising support planned for the first half of the year.
wine and spirits 
 
Shipment Volume
Organic Shipment Volume (1)
Depletion Volume
Net Sales (2)
Organic Net Sales (1)
Operating Income (2)
Year Ended | In millions; branded product, 9-liter case equivalents
February 28, 2018
59.0
58.6
 
$2,926.5
$2,876.1
$800.7
February 28, 2017
69.2
59.3
 
$3,102.2
$2,791.0
$800.8
% Change
(14.7%)
(1.2%)
0.9%
(5.7%)
3.0%
—%
Three Months Ended
February 28, 2018
15.6
15.6
 
$768.7
$768.7
$211.0
February 28, 2017
16.3
15.7
 
$736.8
$714.2
$196.1
% Change
(4.3%)
(0.6%)
2.1%
4.3%
7.6%
7.6%
(2) Year ended and three months ended February 28, 2017, include net sales of $311 million and $23 million, respectively, and operating income of $50 million and $5 million, respectively, that are no longer part of the wine and spirits segment results after the sale of the Canadian wine business.
FISCAL YEAR 2018 HIGHLIGHTS
•
Excluding the impact of the Canadian wine business divestiture, the wine and spirits business generated net sales and operating income growth of 5% and 7%, respectively.
•
Innovation efforts are paying off in the marketplace with brands like Cooper and Thief, 7 Moons and SVEDKA Vodka Blue Raspberry.
•
Operating margin increased 160 basis points to 27.4%, as mix benefits from portfolio premiumization efforts were partially offset by higher marketing investments and COGS.
 
FOURTH QUARTER 2018 HIGHLIGHTS
•
Mix benefits, primarily from strong Meiomi volume, drove 8% organic net sales growth.
•
Focus Brands posted depletion growth of 7% as marketing investments helped drive Meiomi, The Prisoner, Black Box and Ruffino depletion growth of 24%, 18%, 16% and 10%, respectively.
•
Operating margin increased 80 basis points to 27.4%, as benefits from favorable mix were partially offset by higher COGS and marketing investments.

2


fy2018q4_subheader.jpg

U.S. TAX REFORM
Fiscal 2018 reported basis results reflect a benefit of $363 million, or $1.81 EPS, for a net adjustment to deferred and long-term tax liabilities related to recently enacted U.S. tax reform.
QUARTERLY DIVIDEND
On March 28, 2018, Constellation’s board of directors declared a quarterly cash dividend of $0.74 per share of Class A Common Stock and $0.67 per share of Class B Common Stock, payable on May 24, 2018, to stockholders of record as of the close of business on May 10, 2018.

† A copy of this news release, including the attachments and other financial information that may be discussed during the call, will be available on our website cbrands.com under “Investors/Reporting” prior to the call.

 

fy2018q4_webcast.jpg
OUTLOOK
The table below sets forth management’s current EPS expectations for fiscal 2019 compared to fiscal 2018 actual results, both on a reported basis and a comparable basis.
 
 
 
 
Reported Basis
Comparable Basis
 
 
 
 
FY19 Estimate
FY18 Actual
FY19 Estimate
FY18 Actual
Fiscal Year Ending February 28
$9.38 - $9.68
$11.55
$9.40 - $9.70
$8.72
 
 
 
 
 
 
 
 
 
 
 
 
For fiscal 2019, the beer business is targeting net sales and operating income growth to be in the range of 9 - 11 percent. For the wine and spirits business, the company expects net sales and operating income growth to be in the range of 2 - 4 percent.
Fiscal 2019 guidance also includes the following current assumptions:
●  Interest expense: $355 - $365 million
●  Tax rate: approximately 19 percent
●  Weighted average diluted shares outstanding: approximately 197 million; assumes no share repurchases for fiscal 2019
●  Operating cash flow: $2.35 - $2.55 billion
●  Capital expenditures: $1.15 - $1.25 billion, including approximately $900 million targeted for Mexico beer operations expansion activities
●  Free cash flow: $1.2 - $1.3 billion

ABOUT CONSTELLATION BRANDS
Constellation Brands (NYSE: STZ and STZ.B), a Fortune 500® company, is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand, Italy and Canada. Constellation is the No. 3 beer company in the U.S. with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. The company’s beer portfolio also includes Ballast Point, one of the most awarded craft brewers in the U.S., and Funky Buddha Brewery. In addition, Constellation is the world leader in premium wine, selling great brands that people love, including Robert Mondavi, Clos du Bois, Kim Crawford, Meiomi, Mark West, Black Box, Ruffino and The Prisoner. The company’s premium spirits brands include SVEDKA Vodka, Casa Noble Tequila and High West Whiskey.
Based in Victor, N.Y., the company believes that industry leadership involves a commitment to brand building, our trade partners, the environment, our investors and to consumers around the world who choose our products when celebrating big moments or enjoying quiet ones. Founded in 1945, Constellation has grown to become a significant player in the beverage alcohol industry with more than 100 brands in its portfolio; about 40 wineries, breweries and distilleries; and approximately 10,000 talented employees. We express our company vision: to elevate life with every glass raised.
To learn more, follow us on Twitter @cbrands and visit www.cbrands.com.
MEDIA CONTACTS
INVESTOR RELATIONS CONTACTS
Mike McGrew 773-251-4934 | Amy Martin 585-678-7141
Patty Yahn-Urlaub 585-678-7483 | Bob Czudak 585-678-7170

3


fy2018q4_subheader.jpg

SUPPLEMENTAL INFORMATION
Reported basis (“reported”) are amounts as reported under generally accepted accounting principles. Comparable basis (“comparable”) are amounts which exclude items that affect comparability (“comparable adjustments”), as they are not reflective of core operations of the segments. The company’s measure of segment profitability excludes comparable adjustments, which is consistent with the measure used by management to evaluate results. The company discusses various non-GAAP measures in this news release. Financial statements, as well as supplemental schedules and tables reconciling non-GAAP measures, together with definitions of these measures and the reasons management uses these measures, are included in this news release.

FORWARD-LOOKING STATEMENTS
The statements made under the heading Outlook, and all statements other than statements of historical fact set forth in this news release regarding Constellation Brands’ business strategy, future operations, future financial position, expected effective tax rates and anticipated tax liabilities, estimated revenues, projected costs, estimated diluted EPS, expected cash flow, future payments of dividends, prospects, plans and objectives of management, manner and timing of share repurchases pursuant to the share repurchase authorization, as well as information concerning expected actions of third parties, are forward-looking statements (collectively, the “Projections”) that involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by the Projections.
During the current quarter, Constellation Brands may reiterate the Projections. Prior to the start of the company’s quiet period, which will begin at the close of business on May 31, 2018, the public can continue to rely on the Projections as still being Constellation Brands’ current expectations on the matters covered, unless the company publishes a notice stating otherwise. During Constellation Brands’ “quiet period,” the Projections should not be considered to constitute the company’s expectations and should be considered historical, speaking as of prior to the quiet period only and not subject to update by the company.
The Projections are based on management’s current expectations and, unless otherwise noted, do not take into account the impact of any future acquisition, merger or any other business combination, divestiture, restructuring or other strategic business realignments, financing or share repurchase that may be completed after the date of this release. The Projections should not be construed in any manner as a guarantee that such results will in fact occur.
In addition to the risks and uncertainties of ordinary business operations, the Projections of the company contained in this news release are subject to a number of risks and uncertainties, including:
•
beer operations expansion, construction and optimization activities, and costs and timing associated with these activities, may vary from management’s current estimates;
•
accuracy of supply projections, including those relating to beer operations expansion activities and glass sourcing;
•
operating cash flow, free cash flow, effective tax rate and capital expenditures to support long-term growth may vary from management’s current estimates;
•
accuracy of projections associated with market opportunities and with previously announced acquisitions, investments and divestitures;
•
exact duration of the share repurchase implementation and the amount, timing and source of funds for any share repurchases;
•
amount and timing of future dividends are subject to the determination and discretion of the Board of Directors;
•
raw material and water supply, production or shipment difficulties could adversely affect the company’s ability to supply its customers;
 
•
general economic, geo-political, domestic, international and regulatory conditions, instability in world financial markets, unanticipated environmental liabilities and costs, or enhanced competitive activities;
•
changes to international trade agreements and tariffs, accounting standards, elections or assertions, tax laws or other governmental rules and regulations, and other factors which could impact the company’s reported financial position, results of operations or effective tax rate, and accuracy of any associated projections;
•
changes in interest rates and the inherent unpredictability of currency fluctuations, commodity prices and raw material costs; and
•
other factors and uncertainties disclosed in the company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended February 28, 2017, which could cause actual future performance to differ from current expectations.


4


Constellation Brands, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
 
February 28, 2018
 
February 28, 2017
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
90.3

 
$
177.4

Accounts receivable
776.2

 
737.0

Inventories
2,084.0

 
1,955.1

Prepaid expenses and other
523.5

 
360.5

Total current assets
3,474.0

 
3,230.0

Property, plant and equipment
4,789.7

 
3,932.8

Goodwill
8,083.1

 
7,920.5

Intangible assets
3,304.8

 
3,377.7

Other assets
887.1

 
141.4

Total assets
$
20,538.7

 
$
18,602.4

 
 
 
 
Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Short-term borrowings
$
746.8

 
$
606.5

Current maturities of long-term debt
22.3

 
910.9

Accounts payable
592.2

 
559.8

Other accrued expenses and liabilities
583.4

 
620.4

Total current liabilities
1,944.7

 
2,697.6

Long-term debt, less current maturities
9,417.6

 
7,720.7

Deferred income taxes
718.3

 
1,133.6

Other liabilities
395.4

 
165.7

Total liabilities
12,476.0

 
11,717.6

CBI stockholders’ equity
8,046.1

 
6,891.2

Noncontrolling interests
16.6

 
(6.4
)
Total stockholders’ equity
8,062.7

 
6,884.8

Total liabilities and stockholders’ equity
$
20,538.7

 
$
18,602.4


5


Constellation Brands, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
 
Three Months Ended
 
Years Ended
 
February 28, 2018
 
February 28, 2017
 
February 28, 2018
 
February 28, 2017
Sales
$
1,935.4

 
$
1,793.1

 
$
8,326.8

 
$
8,061.6

Excise taxes
(169.5
)
 
(165.1
)
 
(741.8
)
 
(730.1
)
Net sales
1,765.9

 
1,628.0

 
7,585.0

 
7,331.5

Cost of product sold
(916.8
)
 
(840.3
)
 
(3,767.8
)
 
(3,802.1
)
Gross profit
849.1

 
787.7

 
3,817.2

 
3,529.4

Selling, general and administrative expenses
(333.4
)
 
(348.3
)
 
(1,532.7
)
 
(1,392.4
)
Gain on sale of business
—

 
262.4

 
—

 
262.4

Operating income
515.7

 
701.8

 
2,284.5

 
2,399.4

Income (loss) from unconsolidated investments
237.5

 
(0.9
)
 
487.2

 
27.3

Interest expense
(86.9
)
 
(77.0
)
 
(332.0
)
 
(333.3
)
Loss on extinguishment of debt
(77.9
)
 
—

 
(97.0
)
 
—

Income before income taxes
588.4

 
623.9

 
2,342.7

 
2,093.4

(Provision for) benefit from income taxes
340.4

 
(162.0
)
 
(11.9
)
 
(554.2
)
Net income
928.8

 
461.9

 
2,330.8

 
1,539.2

Net income attributable to noncontrolling interests
(3.3
)
 
(9.9
)
 
(11.9
)
 
(4.1
)
Net income attributable to CBI
$
925.5

 
$
452.0

 
$
2,318.9

 
$
1,535.1

 
 
 
 
 
 
 
 
Net income per common share attributable to CBI:
 
 
 
 
 
 
 
Basic – Class A Common Stock
$
4.84

 
$
2.34

 
$
12.04

 
$
7.79

Basic – Class B Convertible Common Stock
$
4.40

 
$
2.12

 
$
10.93

 
$
7.07

 
 
 
 
 
 
 
 
Diluted – Class A Common Stock
$
4.64

 
$
2.26

 
$
11.55

 
$
7.52

Diluted – Class B Convertible Common Stock
$
4.28

 
$
2.09

 
$
10.66

 
$
6.93

 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic – Class A Common Stock
170.243

 
172.155

 
171.457

 
175.934

Basic – Class B Convertible Common Stock
23.329

 
23.353

 
23.336

 
23.353

 
 
 
 
 
 
 
 
Diluted – Class A Common Stock
199.494

 
199.868

 
200.745

 
204.099

Diluted – Class B Convertible Common Stock
23.329

 
23.353

 
23.336

 
23.353

 
 
 
 
 
 
 
 
Cash dividends declared per common share:
 
 
 
 
 
 
 
Class A Common Stock
$
0.52

 
$
0.40

 
$
2.08

 
$
1.60

Class B Convertible Common Stock
$
0.47

 
$
0.36

 
$
1.88

 
$
1.44


6


Constellation Brands, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
 
Years Ended
 
February 28, 2018
 
February 28, 2017
Cash flows from operating activities
 
 
 
Net income
$
2,330.8

 
$
1,539.2

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Unrealized gain on equity securities
(464.3
)
 
—

Net income tax benefit related to the Tax Cuts and Jobs Act
(363.0
)
 
—

Depreciation
293.8

 
237.5

Loss on extinguishment of debt and amortization of debt issuance costs
108.7

 
12.7

Deferred tax provision
114.9

 
128.7

Impairment and amortization of intangible assets
92.7

 
56.4

Stock-based compensation
60.9

 
56.1

Loss on contract termination
59.0

 
—

Gain on sale of business
—

 
(262.4
)
Change in operating assets and liabilities, net of effects from purchases of businesses:
 
 
 
Accounts receivable
(34.1
)
 
(49.4
)
Inventories
(123.8
)
 
(151.0
)
Prepaid expenses and other current assets
(111.5
)
 
(71.6
)
Accounts payable
12.8

 
115.9

Other accrued expenses and liabilities
(71.6
)
 
122.2

Other
26.1

 
(38.3
)
Total adjustments
(399.4
)
 
156.8

Net cash provided by operating activities
1,931.4

 
1,696.0

 
 
 
 
Cash flows from investing activities
 
 
 
Purchases of property, plant and equipment
(1,057.6
)
 
(907.4
)
Investment in equity securities
(191.3
)
 
—

Purchases of businesses, net of cash acquired
(150.1
)
 
(1,111.0
)
Proceeds from (payments related to) sale of business
(5.0
)
 
575.3

Other investing activities
(19.1
)
 
(18.7
)
Net cash used in investing activities
(1,423.1
)
 
(1,461.8
)
 
 
 
 
Cash flows from financing activities
 
 
 
Principal payments of long-term debt
(7,128.7
)
 
(971.8
)
Purchases of treasury stock
(1,038.5
)
 
(1,122.7
)
Dividends paid
(400.1
)
 
(315.1
)
Payments of debt extinguishment, debt issuance and other financing costs
(122.2
)
 
(14.1
)
Payments of minimum tax withholdings on stock-based payment awards
(31.7
)
 
(64.9
)
Proceeds from issuance of long-term debt
7,933.4

 
1,965.6

Net proceeds from short-term borrowings
137.2

 
197.1

Proceeds from shares issued under equity compensation plans
49.4

 
59.7

Excess tax benefits from stock-based payment awards
—

 
131.4

Net cash used in financing activities
(601.2
)
 
(134.8
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
5.8

 
(5.1
)
 
 
 
 
Net increase (decrease) in cash and cash equivalents
(87.1
)
 
94.3

Cash and cash equivalents, beginning of year
177.4

 
83.1

Cash and cash equivalents, end of year
$
90.3

 
$
177.4


7


Constellation Brands, Inc. and Subsidiaries
RECONCILIATION OF REPORTED AND ORGANIC NET SALES
(in millions)
(unaudited)

For periods of acquisition, we define organic net sales as current period reported net sales less net sales of products of acquired businesses reported for the current period, as appropriate. For periods of divestiture, we define organic net sales as prior period reported net sales less net sales of products of divested businesses reported for the prior period, as appropriate. We provide organic net sales because we use this information in monitoring and evaluating the underlying business trends of our core operations. In addition, we believe this information provides investors valuable insight on underlying business trends and results in order to evaluate year-over-year financial performance.
The company’s more significant acquisitions impacting the period below consist of (i)  Prisoner (acquired April 29, 2016) and (ii)  High West (acquired October 14, 2016) and Charles Smith (acquired October 19, 2016), collectively, the October 2016 Wine and Spirits Acquisitions. The divestiture impacting the periods below consists of the Canadian Divestiture (sold December 17, 2016).
 
Three Months Ended
 
 
 
Years Ended
 
 
 
February 28, 2018
 
February 28, 2017
 
Percent
Change
 
February 28, 2018
 
February 28, 2017
 
Percent
Change
Consolidated net sales
$
1,765.9

 
$
1,628.0

 
8
%
 
$
7,585.0

 
$
7,331.5

 
3
%
Less:  Prisoner (1)
—

 
—

 
 
 
(13.2
)
 
—

 
 
Less:  October 2016 Wine and Spirits Acquisitions (2)
—

 
—

 
 
 
(37.2
)
 
—

 
 
Less:  Canadian Divestiture (3)
—

 
(22.6
)
 
 
 
—

 
(311.2
)
 
 
Consolidated organic net sales
$
1,765.9

 
$
1,605.4

 
10
%
 
$
7,534.6

 
$
7,020.3

 
7
%
 
 
 
 
 
 
 
 
 
 
 
 
Beer net sales
$
997.2

 
$
891.2

 
12
%
 
$
4,658.5

 
$
4,229.3

 
10
%
 
 
 
 
 
 
 
 
 
 
 
 
Wine and Spirits net sales
$
768.7

 
$
736.8

 
4
%
 
$
2,926.5

 
$
3,102.2

 
(6
%)
Less:  Prisoner (1)
—

 
—

 
 
 
(13.2
)
 
—

 
 
Less:  October 2016 Wine and Spirits Acquisitions (2)
—

 
—

 
 
 
(37.2
)
 
—

 
 
Less:  Canadian Divestiture (3)
—

 
(22.6
)
 
 
 
—

 
(311.2
)
 
 
Wine and Spirits organic net sales
$
768.7

 
$
714.2

 
8
%
 
$
2,876.1

 
$
2,791.0

 
3
%
(1) 
For the period March 1, 2017, through April 28, 2017, included in the year ended February 28, 2018.
(2) 
For the period March 1, 2017, through the applicable periods in October 2017, included in the year ended February 28, 2018.
(3) 
For the periods December 1, 2016, through December 16, 2016, and March 1, 2016, through December 16, 2016, included in the three months and year ended February 28, 2017, respectively.


8


Constellation Brands, Inc. and Subsidiaries
SUPPLEMENTAL SHIPMENT AND DEPLETION INFORMATION
(unaudited)
 
Three Months Ended
 
 
 
Years Ended
 
 
 
February 28, 2018
 
February 28, 2017
 
Percent
Change
 
February 28, 2018
 
February 28, 2017
 
Percent
Change
Beer
 
 
 
 
 
 
 
 
 
 
 
(in millions, branded product, 24-pack,
12-ounce case equivalents)
 
 
 
 
 
 
 
 
 
 
 
Shipment volume
56.4

 
51.2

 
10.2
%
 
268.0

 
246.4

 
8.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Depletion volume (1)
 
 
 
 
11.0
%
 
 
 
 
 
9.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Wine and Spirits
 
 
 
 
 
 
 
 
 
 
 
(in millions, branded product, 9-liter case equivalents)
 
 
 
 
 
 
 
 
 
 
 
Shipment volume
15.6

 
16.3

 
(4.3
%)
 
59.0

 
69.2

 
(14.7
%)
Organic shipment volume (2) (3)
15.6

 
15.7

 
(0.6
%)
 
58.6

 
59.3

 
(1.2
%)
U.S. Domestic shipment volume
14.6

 
14.4

 
1.4
%
 
54.7

 
55.0

 
(0.5
%)
U.S. Domestic organic shipment volume (2)
14.6

 
14.4

 
1.4
%
 
54.4

 
55.0

 
(1.1
%)
U.S. Domestic Focus Brands shipment volume (4)
8.9

 
8.4

 
6.0
%
 
33.6

 
31.8

 
5.7
%
U.S. Domestic organic Focus Brands shipment volume (4) (5)
8.9

 
8.4

 
6.0
%
 
33.4

 
31.8

 
5.0
%
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Domestic depletion volume (1) (6)
 
 
 
 
2.1
%
 
 
 
 
 
0.9
%
U.S. Domestic Focus Brands depletion
volume (1) (4) (7)
 
 
 
 
7.1
%
 
 
 
 
 
6.6
%
(1) 
Depletions represent distributor shipments of our respective branded products to retail customers, based on third-party data.
(2) 
Includes an adjustment to remove:
•
Prisoner shipment volume for the period March 1, 2017, through April 28, 2017, for the year ended February 28, 2018; and
•
High West and Charles Smith shipment volume for the period March 1, 2017, through the applicable periods in October 2017, for the year ended February 28, 2018.
(3) 
Includes an adjustment to remove shipment volume associated with the business sold in connection with the Canadian Divestiture for the periods December 1, 2016, through December 16, 2016, and March 1, 2016, through December 16, 2016, for the three months and year ended February 28, 2017, respectively.
(4) 
U.S. Domestic Focus Brands include the following brands:  7 Moons, Black Box, Casa Noble, Clos du Bois, Estancia, Franciscan, High West, Kim Crawford, Kung Fu Girl, Mark West, Meiomi, Mount Veeder, Nobilo, Ravage, Robert Mondavi, Ruffino, Simi, SVEDKA Vodka, The Dreaming Tree, The Prisoner and The Velvet Devil.
(5) 
Includes an adjustment to remove:
•
The Prisoner shipment volume for the period March 1, 2017, through April 28, 2017, for the year ended February 28, 2018; and
•
High West, Kung Fu Girl and The Velvet Devil shipment volume for the period March 1, 2017, through the applicable periods in October 2017, for the year ended February 28, 2018.
(6) 
Includes depletion volume for the prior comparable periods noted of:
•
Prisoner products for March 1, 2016, through April 28, 2016, for the year ended February 28, 2017; and
•
High West and Charles Smith products for March 1, 2016, through the applicable periods in October 2016, for the year ended February 28, 2017.
(7) 
Includes depletion volume for the prior comparable periods noted of:
•
The Prisoner for March 1, 2016, through April 28, 2016, for the year ended February 28, 2017; and
•
High West, Kung Fu Girl and The Velvet Devil for March 1, 2016, through the applicable periods in October 2016, for the year ended February 28, 2017.

9


Constellation Brands, Inc. and Subsidiaries
SUMMARIZED SEGMENT AND INCOME FROM UNCONSOLIDATED INVESTMENTS INFORMATION
(in millions)
(unaudited)
 
Three Months Ended
 
 
 
Years Ended
 
 
 
February 28, 2018
 
February 28, 2017
 
Percent
Change
 
February 28, 2018
 
February 28, 2017
 
Percent
Change
Beer
 
 
 
 
 
 
 
 
 
 
 
Segment net sales
$
997.2

 
$
891.2

 
12
%
 
$
4,658.5

 
$
4,229.3

 
10
%
Segment gross profit
$
531.7

 
$
464.2

 
15
%
 
$
2,529.3

 
$
2,151.3

 
18
%
% Net sales
53.3
%
 
52.1
%
 
 
 
54.3
%
 
50.9
%
 
 
Segment operating income
$
379.1

 
$
338.7

 
12
%
 
$
1,838.3

 
$
1,534.4

 
20
%
% Net sales
38.0
%
 
38.0
%
 
 
 
39.5
%
 
36.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wine and Spirits
 
 
 
 
 
 
 
 
 
 
 
Wine net sales
$
677.2

 
$
636.5

 
6
%
 
$
2,559.5

 
$
2,739.3

 
(7
%)
Spirits net sales
91.5

 
100.3

 
(9
%)
 
367.0

 
362.9

 
1
%
Segment net sales
$
768.7

 
$
736.8

 
4
%
 
$
2,926.5

 
$
3,102.2

 
(6
%)
Segment gross profit
$
337.4

 
$
322.2

 
5
%
 
$
1,316.0

 
$
1,360.7

 
(3
%)
% Net sales
43.9
%
 
43.7
%
 
 
 
45.0
%
 
43.9
%
 
 
Segment operating income
$
211.0

 
$
196.1

 
8
%
 
$
800.7

 
$
800.8

 
—
%
% Net sales
27.4
%
 
26.6
%
 
 
 
27.4
%
 
25.8
%
 
 
Segment income from unconsolidated investments
$
2.1

 
$
0.8

 
NM

 
$
34.4

 
$
29.2

 
18
%
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Operations and Other
 
 
 
 
 
 
 
 
 
 
 
Segment operating loss
$
(45.6
)
 
$
(40.0
)
 
14
%
 
$
(165.8
)
 
$
(139.9
)
 
19
%
Segment income (loss) from unconsolidated investments
$
(0.3
)
 
$
—

 
NM

 
$
0.2

 
$
(0.2
)
 
NM

 
 
 
 
 
 
 
 
 
 
 
 
Consolidated operating income
$
515.7

 
$
701.8

 
 
 
$
2,284.5

 
$
2,399.4

 
 
Comparable Adjustments
28.8

 
(207.0
)
 
 
 
188.7

 
(204.1
)
 
 
Comparable operating income
$
544.5

 
$
494.8

 
 
 
$
2,473.2

 
$
2,195.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated income (loss) from unconsolidated investments
$
237.5

 
$
(0.9
)
 
 
 
$
487.2

 
$
27.3

 
 
Comparable Adjustments
(235.7
)
 
1.7

 
 
 
(452.6
)
 
1.7

 
 
Comparable income from unconsolidated investments
$
1.8

 
$
0.8

 
 
 
$
34.6

 
$
29.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated EBIT
$
546.3

 
$
495.6

 
 
 
$
2,507.8

 
$
2,224.3

 
 
NM=Not Meaningful

10


Constellation Brands, Inc. and Subsidiaries
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(unaudited)

We report our financial results in accordance with generally accepted accounting principles in the U.S. (“GAAP”). However, non-GAAP financial measures, as defined in the reconciliation tables below, are provided because we use this information in evaluating the results of our core operations and/or internal goal setting. In addition, we believe this information provides investors valuable insight on underlying business trends and results in order to evaluate year-over-year financial performance. See the tables below for supplemental financial data and corresponding reconciliations of these non-GAAP financial measures to GAAP financial measures for the periods presented. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Please refer to our website at http://www.cbrands.com/investors/reporting for a more detailed description and further discussion of these non-GAAP financial measures.
 
Three Months Ended February 28, 2018
 
Three Months Ended February 28, 2017
 
Percent
Change -
Reported
Basis
(GAAP)
 
Percent
Change -
Comparable
Basis
(Non-GAAP)
 
Reported
Basis
(GAAP)
Comparable
Adjustments
Comparable
Basis
(Non-GAAP)
 
Reported
Basis
(GAAP)
Comparable
Adjustments
Comparable
Basis
(Non-GAAP)
 
Net sales
$
1,765.9

 
$
1,765.9

 
$
1,628.0

 
$
1,628.0

 
8
%
 
8
%
Cost of product sold
(916.8
)
$
20.0

 
 
(840.3
)
$
(1.3
)
 
 
 
 
 
Gross profit
849.1

20.0

$
869.1

 
787.7

(1.3
)
$
786.4

 
8
%
 
11
%
Selling, general and administrative expenses
(333.4
)
8.8

 
 
(348.3
)
56.7

 
 
 
 
 
Gain on sale of business
—

 
 
 
262.4

(262.4
)
 
 
 
 
 
Operating income
515.7

28.8

$
544.5

 
701.8

(207.0
)
$
494.8

 
(27
%)
 
10
%
Income (loss) from unconsolidated investments
237.5

(235.7
)
 
 
(0.9
)
1.7

 
 
 
 
 
EBIT
 
 
$
546.3

 
 
 
$
495.6

 
NA

 
10
%
Interest expense
(86.9
)
 
 
 
(77.0
)
 
 
 
 
 
 
Loss on extinguishment of debt
(77.9
)
77.9

 
 
—

 
 
 
 
 
 
Income before income taxes
588.4

(129.0
)
$
459.4

 
623.9

(205.3
)
$
418.6

 
(6
%)
 
10
%
(Provision for) benefit from income taxes (1)
340.4

(417.1
)
 
 
(162.0
)
49.3

 
 
 
 
 
Net income
928.8

(546.1
)
 
 
461.9

(156.0
)
 
 
 
 
 
Net income attributable to noncontrolling interests
(3.3
)
 
 
 
(9.9
)
 
 
 
 
 
 
Net income attributable to CBI
$
925.5

$
(546.1
)
$
379.4

 
$
452.0

$
(156.0
)
$
296.0

 
105
%
 
28
%
 
 
 
 
 
 
 
 
 
 
 
 
EPS (2)
$
4.64

$
(2.74
)
$
1.90

 
$
2.26

$
(0.78
)
$
1.48

 
105
%
 
28
%
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding – diluted
199.494

 
199.494

 
199.868

 
199.868

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross margin
48.1
 %
 
49.2
%
 
48.4
%
 
48.3
%
 
 
 
 
Operating margin
29.2
 %
 
30.8
%
 
43.1
%
 
30.4
%
 
 
 
 
Effective tax rate
(57.9
)%
 
16.7
%
 
26.0
%
 
26.9
%
 
 
 
 

11


 
Three Months Ended February 28, 2018
 
Three Months Ended February 28, 2017
Comparable Adjustments
Acquisitions,
Divestitures
and Related
Costs (3)
Restructuring
and Other
Strategic
Business
Development
Costs (4)
Other (5)
Total
 
Acquisitions,
Divestitures
and Related
Costs (3)
Other (5)
Total
Cost of product sold
$
(1.7
)
$
—

$
(18.3
)
$
(20.0
)
 
$
(3.7
)
$
5.0

$
1.3

Selling, general and administrative expenses
$
(1.3
)
$
(6.5
)
$
(1.0
)
$
(8.8
)
 
$
(19.1
)
$
(37.6
)
$
(56.7
)
Gain on sale of business
$
—

$
—

$
—

$
—

 
$
262.4

$
—

$
262.4

Operating income (loss)
$
(3.0
)
$
(6.5
)
$
(19.3
)
$
(28.8
)
 
$
239.6

$
(32.6
)
$
207.0

Income (loss) from unconsolidated investments
$
—

$
—

$
235.7

$
235.7

 
$
—

$
(1.7
)
$
(1.7
)
Loss on extinguishment of debt
$
—

$
—

$
(77.9
)
$
(77.9
)
 
$
—

$
—

$
—

(Provision for) benefit from income taxes (1)
$
—

$
2.1

$
415.0

$
417.1

 
$
(62.2
)
$
12.9

$
(49.3
)
Net income (loss) attributable to CBI
$
(3.0
)
$
(4.4
)
$
553.5

$
546.1

 
$
177.4

$
(21.4
)
$
156.0

 
 
 
 
 
 
 
 
 
EPS (2)
$
(0.02
)
$
(0.02
)
$
2.77

$
2.74

 
$
0.89

$
(0.11
)
$
0.78

(1) 
The effective tax rate applied to each Comparable Adjustment amount is generally based upon the jurisdiction in which the Comparable Adjustment was recognized. Additionally, for the three months and year ended February 28, 2018, the (provision for) benefit from income taxes also includes a net income tax benefit recognized in connection with the Tax Cuts and Jobs Act (the “TCJ Act”) (see (5) and (8) herein).
(2) 
May not sum due to rounding as each item is computed independently.
(3) 
For the three months ended February 28, 2018, acquisitions, divestitures and related costs consist of transaction, integration and other acquisition-related costs recognized primarily in connection with the investment in Canopy Growth Corporation in November 2017 and the acquisition of the Schrader Cellars wine business in June 2017. For the three months ended February 28, 2017, acquisitions, divestitures and related costs consist of a net gain recognized in connection with the Canadian Divestiture and related activities, partially offset by transaction, integration and other acquisition-related costs recognized primarily in connection with the acquisitions of Charles Smith, the June 2013 beer business and Prisoner.
(4) 
For the three months ended February 28, 2018, restructuring and other strategic business development costs consist primarily of costs recognized in connection with the development of a program specifically intended to identify opportunities for further streamlining of processes and improving capabilities, linking strategy with execution, prioritizing resources and enabling an integrated digital platform.
(5) 
For the three months ended February 28, 2018, other consists primarily of a net income tax benefit recognized in connection with the TCJ Act and an unrealized gain from the mark to fair value of our investment in Canopy Growth Corporation; partially offset by loss on extinguishment of debt and loss on write-down of certain bulk wine inventory as a result of smoke damage sustained during the Fall 2017 California wildfires. For the three months ended February 28, 2017, other consists primarily of impairment of certain intangible assets.


12


Constellation Brands, Inc. and Subsidiaries
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(in millions, except per share data)
(unaudited)
 
Year Ended February 28, 2018
 
Year Ended February 28, 2017
 
Percent
Change -
Reported
Basis
(GAAP)
 
Percent
Change -
Comparable
Basis
(Non-GAAP)
 
Reported
Basis
(GAAP)
Comparable
Adjustments
Comparable
Basis
(Non-GAAP)
 
Reported
Basis
(GAAP)
Comparable
Adjustments
Comparable
Basis
(Non-GAAP)
 
Net sales
$
7,585.0

 
$
7,585.0

 
$
7,331.5

 
$
7,331.5

 
3
%
 
3
%
Cost of product sold
(3,767.8
)
$
28.1

 
 
(3,802.1
)
$
(17.4
)
 
 
 
 
 
Gross profit
3,817.2

28.1

$
3,845.3

 
3,529.4

(17.4
)
$
3,512.0

 
8
%
 
9
%
Selling, general and administrative expenses
(1,532.7
)
160.6

 
 
(1,392.4
)
75.7

 
 
 
 
 
Gain on sale of business
—

 
 
 
262.4

(262.4
)
 
 
 
 
 
Operating income
2,284.5

188.7

$
2,473.2

 
2,399.4

(204.1
)
$
2,195.3

 
(5
%)
 
13
%
Income from unconsolidated investments
487.2

(452.6
)
 
 
27.3

1.7

 
 
 
 
 
EBIT
 
 
$
2,507.8

 
 
 
$
2,224.3

 
NA

 
13
%
Interest expense
(332.0
)
 
 
 
(333.3
)
 
 
 
 
 
 
Loss on extinguishment of debt
(97.0
)
97.0

 
 
—

 
 
 
 
 
 
Income before income taxes
2,342.7

(166.9
)
$
2,175.8

 
2,093.4

(202.4
)
$
1,891.0

 
12
%
 
15
%
Provision for income taxes (1)
(11.9
)
(402.4
)
 
 
(554.2
)
48.0

 
 
 
 
 
Net income
2,330.8

(569.3
)


 
1,539.2

(154.4
)


 


 


Net income attributable to noncontrolling interests
(11.9
)
 
 
 
(4.1
)
 
 
 
 
 
 
Net income attributable to CBI
$
2,318.9

$
(569.3
)
$
1,749.6

 
$
1,535.1

$
(154.4
)
$
1,380.7

 
51
%
 
27
%
 
 
 
 
 
 
 
 
 
 
 
 
EPS (2)
$
11.55

$
(2.84
)
$
8.72

 
$
7.52

$
(0.76
)
$
6.76

 
54
%
 
29
%
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding – diluted
200.745

 
200.745

 
204.099

 
204.099

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross margin
50.3
%
 
50.7
%
 
48.1
%
 
47.9
%
 
 
 
 
Operating margin
30.1
%
 
32.6
%
 
32.7
%
 
29.9
%
 
 
 
 
Effective tax rate
0.5
%
 
19.0
%
 
26.5
%
 
26.8
%
 
 
 
 

13


 
Year Ended February 28, 2018
 
Year Ended February 28, 2017
Comparable Adjustments
Acquisitions,
Divestitures
and Related
Costs (6)
Restructuring
and Other
Strategic
Business
Development
Costs (7)
Other (8)
Total
 
Acquisitions,
Divestitures
and Related
Costs (6)
Restructuring
and Other
Strategic
Business
Development
Costs
Other (8)
Total
Cost of product sold
$
(18.7
)
$
—

$
(9.4
)
$
(28.1
)
 
$
(22.3
)
$
—

$
39.7

$
17.4

Selling, general and administrative expenses
$
(11.3
)
$
(14.0
)
$
(135.3
)
$
(160.6
)
 
$
(34.6
)
$
(0.9
)
$
(40.2
)
$
(75.7
)
Gain on sale of business
$
—

$
—

$
—

$
—

 
$
262.4

$
—

$
—

$
262.4

Operating income (loss)
$
(30.0
)
$
(14.0
)
$
(144.7
)
$
(188.7
)
 
$
205.5

$
(0.9
)
$
(0.5
)
$
204.1

Income (loss) from unconsolidated investments
$
—

$
—

$
452.6

$
452.6

 
$
—

$
—

$
(1.7
)
$
(1.7
)
Loss on extinguishment of debt
$
—

$
—

$
(97.0
)
$
(97.0
)
 
$
—

$
—

$
—

$
—

(Provision for) benefit from income taxes (1)
$
9.6

$
4.9

$
387.9

$
402.4

 
$
(48.9
)
$
0.3

$
0.6

$
(48.0
)
Net income (loss) attributable to CBI
$
(20.4
)
$
(9.1
)
$
598.8

$
569.3

 
$
156.6

$
(0.6
)
$
(1.6
)
$
154.4

 
 
 
 
 
 
 
 
 
 
EPS (2)
$
(0.10
)
$
(0.05
)
$
2.98

$
2.84

 
$
0.77

$
—

$
(0.01
)
$
0.76

(6) 
For the year ended February 28, 2018, acquisitions, divestitures and related costs consist of (i)  transaction, integration and other acquisition-related costs recognized primarily in connection with the acquisitions of Prisoner, the Schrader Cellars wine business, the October 2016 Wine and Spirits Acquisitions and the Obregon brewery in December 2016, and the investment in Canopy Growth Corporation, and (ii)  costs recognized in connection with the Canadian Divestiture and related activities. For the year ended February 28, 2017, acquisitions, divestitures and related costs consist of a net gain recognized in connection with the Canadian Divestiture and related activities, partially offset by transaction, integration and other acquisition-related costs recognized primarily in connection with the acquisitions of Prisoner, the June 2013 beer business and Meiomi.
(7) 
For the year ended February 28, 2018, restructuring and other strategic business development costs consist primarily of costs recognized in connection with the development of a program specifically intended to identify opportunities for further streamlining of processes and improving capabilities, linking strategy with execution, prioritizing resources and enabling an integrated digital platform.
(8) 
For the year ended February 28, 2018, other consists primarily of an unrealized gain from the mark to fair value of our investment in Canopy Growth Corporation and a net income tax benefit recognized in connection with the TCJ Act; partially offset by (i)  loss on extinguishment of debt, (ii)  impairment of certain intangible assets, (iii)  loss associated with the restructuring of an agreement with Owens-Illinois and (iv)  loss on write-down of certain bulk wine inventory as a result of smoke damage sustained during the Fall 2017 California wildfires. For the year ended February 28, 2017, other consists primarily of a net gain from the mark to fair value of undesignated commodity derivative contracts, partially offset by an impairment of certain intangible assets.


14


Constellation Brands, Inc. and Subsidiaries
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
GUIDANCE - EPS
(in millions, except per share data)
(unaudited)

EPS Guidance
 
Range for the Year
Ending February 28, 2019
Forecasted EPS - reported basis (GAAP)
$
9.38

 
$
9.68

Acquisitions, divestitures and related costs (1)
0.02

 
0.02

Forecasted EPS - comparable basis (Non-GAAP) (2)
$
9.40

 
$
9.70

 
Actual for the
Year Ended
February 28, 2018
EPS - reported basis (GAAP)
$
11.55

Acquisitions, divestitures and related costs (1)
0.10

Restructuring and other strategic business development costs (3)
0.05

Other (4)
(2.98
)
EPS - comparable basis (Non-GAAP) (2)
$
8.72

(1) 
Includes an estimated $0.01 and $0.01 EPS for the year ending February 28, 2019, associated with transaction, integration and other acquisition-related costs in connection with the Schrader Cellars wine acquisition and the High West acquisition, respectively. Includes $0.02, $0.02, $0.02, $0.01 and $0.01 EPS for the year ended February 28, 2018, associated primarily with transaction, integration and other acquisition-related costs in connection with the Prisoner acquisition, the Schrader Cellars wine acquisition, the investment in Canopy Growth Corporation, the October 2016 Wine and Spirits Acquisitions and the Obregon brewery acquisition, respectively, and $0.01 EPS for the year ended February 28, 2018, associated with costs in connection with the Canadian Divestiture and related activities. (2) 
(2) 
May not sum due to rounding as each item is computed independently.
(3) 
Includes $0.05 EPS for the year ended February 28, 2018, associated primarily with costs recognized in connection with the development of a program specifically intended to identify opportunities for further streamlining of processes and improving capabilities, linking strategy with execution, prioritizing resources and enabling an integrated digital platform.
(4) 
Includes ($1.96), ($1.81), ($0.03), ($0.03) and ($0.02) EPS for the year ended February 28, 2018, associated with an unrealized gain from the mark to fair value of our investment in Canopy Growth Corporation, a net income tax benefit recognized in connection with the TCJ Act, a net gain from the mark to fair value of undesignated commodity derivative contracts, a gain in connection with the reduction in estimated fair value of a contingent liability associated with a prior period acquisition, and a foreign currency translation gain related to business reorganization activities, respectively; partially offset by $0.32, $0.28, $0.21 and $0.06 EPS for the year ended February 28, 2018, associated primarily with loss on extinguishment of debt, impairment of certain intangible assets, loss associated with the restructuring of an agreement with Owens-Illinois and loss on write-down of certain bulk wine inventory as a result of smoke damage sustained during the Fall 2017 California wildfires, respectively. (2) 

15


Constellation Brands, Inc. and Subsidiaries
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
GUIDANCE - FREE CASH FLOW
(in millions)
(unaudited)

Free Cash Flow Guidance

Free cash flow, as defined in the reconciliation below, is considered a liquidity measure and is considered to provide useful information to investors about the amount of cash generated, which can then be used, after required debt service and dividend payments, for other general corporate purposes. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Free cash flow should be considered in addition to, not as a substitute for, or superior to, cash flow from operating activities prepared in accordance with GAAP.
 
Range for the Year
Ending February 28, 2019
Net cash provided by operating activities (GAAP)
$
2,350.0

 
$
2,550.0

Purchases of property, plant and equipment
(1,150.0
)
 
(1,250.0
)
Free cash flow (Non-GAAP)
$
1,200.0

 
$
1,300.0

 

Actual for the
Year Ended
February 28, 2018
 

Actual for the
Year Ended
February 28, 2017
Net cash provided by operating activities (GAAP)
$
1,931.4

 
$
1,696.0

Purchases of property, plant and equipment
(1,057.6
)
 
(907.4
)
Free cash flow (Non-GAAP)
$
873.8

 
$
788.6


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