Quarterly report pursuant to Section 13 or 15(d)

Product Recall

v2.4.1.9
Product Recall
 9 Months Ended
Nov. 30, 2014
Commitments and Contingencies Disclosure [Abstract]  
PRODUCT RECALL
PRODUCT RECALL:

In August 2014, the Company announced a voluntary product recall of select packages in the U.S. and Guam containing 12-ounce clear glass bottles of its Corona Extra beer that may contain small particles of glass (the “Product Recall”). The Product Recall was a precautionary step after routine inspections in the Company’s quality control laboratory detected defects in certain bottles that could cause small particles of glass to break off and fall into the bottle. The potentially affected bottles came from a glass plant run by a third-party manufacturer that supplies the Company with bottles.

A summary of the estimated charges, net of recoveries, recorded on the Company’s Consolidated Statements of Comprehensive Income is as follows:
 
For the Nine Months Ended November 30, 2014
 
For the Three Months Ended November 30, 2014
(in millions)
 
 
 
Net sales
$
3.3

 
$
(0.2
)
Cost of product sold
8.0

 
2.6

Selling, general and administrative expenses
0.5

 
0.2

Total
$
11.8

 
$
2.6



For the nine months and three months ended November 30, 2014, recorded amounts represent costs for which the third-party manufacturer has not yet agreed to reimburse to the Company. The reduction to net sales is associated primarily with wholesale distributor payments in connection with the collection and handling of recalled product. The charge to cost of product sold consists primarily of freight costs associated with the potentially affected product.

While the Company expects to continue to collaborate with its third-party manufacturer and obtain reimbursement from its third-party manufacturer for some or all of the costs associated with the Product Recall, there can be no assurance there will be any potential recoveries. Any additional direct costs related to the Product Recall are not expected to be material.