Constellation Brands, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Fair Value of Financial Instruments (Tables)

Fair Value of Financial Instruments (Tables)

12 Months Ended

Feb. 28, 2013

Carrying amount and estimated fair value of financial instruments

The carrying amount and estimated fair value of the Company’s financial instruments are summarized as follows:



	February 28, 2013				February 29, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(in millions)
Assets:
Cash and cash investments	$	331.5	$	331.5	$	85.8	$	85.8
Accounts receivable, net	$	471.9	$	471.9	$	436.0	$	436.0
AFS debt securities	$	34.2	$	34.2	$	28.5	$	28.5
Foreign currency contracts	$	9.7	$	9.7	$	13.2	$	13.2
Interest rate swap contracts	$	6.6	$	6.6	$	—	$	—
Diesel fuel swap contracts	$	0.6	$	0.6	$	—	$	—
Notes receivable	$	—	$	—	$	1.6	$	1.6

Liabilities:
Notes payable to banks	$	—	$	—	$	377.9	$	377.6
Accounts payable	$	209.0	$	209.0	$	130.5	$	130.5
Long-term debt, including current portion	$	3,305.4	$	3,603.6	$	2,751.6	$	3,007.9
Foreign currency contracts	$	5.3	$	5.3	$	6.4	$	6.4
Interest rate swap contracts	$	47.1	$	47.1	$	45.7	$	45.7
Diesel fuel swap contracts	$	0.1	$	0.1	$	—	$	—

Financial assets and liabilities measured at fair value on a recurring basis

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis:



	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
(in millions)
February 28, 2013
Assets:
AFS debt securities	$	—	$	—	$	34.2	$	34.2
Foreign currency contracts	$	—	$	9.7	$	—	$	9.7
Interest rate swap contracts	$	—	$	6.6	$	—	$	6.6
Diesel fuel swap contracts	$	—	$	0.6	$	—	$	0.6
Liabilities:
Foreign currency contracts	$	—	$	5.3	$	—	$	5.3
Interest rate swap contracts	$	—	$	47.1	$	—	$	47.1
Diesel fuel swap contracts	$	—	$	0.1	$	—	$	0.1

February 29, 2012
Assets:
AFS debt securities	$	—	$	—	$	28.5	$	28.5
Foreign currency contracts	$	—	$	13.2	$	—	$	13.2
Liabilities:
Foreign currency contracts	$	—	$	6.4	$	—	$	6.4
Interest rate swap contracts	$	—	$	45.7	$	—	$	45.7

Reconciliation of changes in fair value of financial instruments measured at fair value on a recurring basis using significant unobservable inputs

The following table represents a reconciliation of the changes in fair value of the Company’s financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3):



	February 28, 2013		February 29, 2012			February 28, 2011
(in millions)
AFS Debt Securities
Balance as of March 1	$	28.5	$	40.8		$	—
Retained interest in Accolade (see Note 8)	—		—			39.6
Total net gains:
Included in earnings (interest expense, net)	5.0		5.5			0.4
Included in other comprehensive income (net unrealized gains on AFS debt securities)	0.7		3.9			0.8
Total net gains	5.7		9.4			1.2
Settlements	—		(21.7		)	—
Balance as of the last day of February	$	34.2	$	28.5		$	40.8

Assets and liabilities measured at fair value on a nonrecurring basis

The following table presents the Company’s assets and liabilities measured at fair value on a nonrecurring basis for which an impairment assessment was performed for the periods presented:



	Fair Value Measurements Using
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Losses
(in millions)
For the Year Ended February 29, 2012
Trademarks	$	—	$	—	$	96.0	$	38.1

For the Year Ended February 28, 2011
Long-lived assets held for sale	$	—	$	—	$	4.1	$	5.8
Trademarks	—		—		136.9		23.6
Total	$	—	$	—	$	141.0	$	29.4

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

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