Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidating Financial Information

v2.4.0.8
Condensed Consolidating Financial Information
9 Months Ended
Nov. 30, 2013
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
CONDENSED CONSOLIDATING FINANCIAL INFORMATION:

The following information sets forth the condensed consolidating balance sheets as of November 30, 2013, and February 28, 2013, the condensed consolidating statements of comprehensive income for the nine months and three months ended November 30, 2013, and November 30, 2012, and the condensed consolidating statements of cash flows for the nine months ended November 30, 2013, and November 30, 2012, for the parent company, the combined subsidiaries of the Company which guarantee the Company’s senior notes (“Subsidiary Guarantors”), the combined subsidiaries of the Company which are not Subsidiary Guarantors (primarily foreign subsidiaries) (“Subsidiary Nonguarantors”) and the Company. The Subsidiary Guarantors are 100% owned, directly or indirectly, by the parent company and the guarantees are joint and several obligations of each of the Subsidiary Guarantors. The guarantees are full and unconditional, as those terms are used in Rule 3-10 of Regulation S-X, except that a Subsidiary Guarantor can be automatically released and relieved of its obligations under certain customary circumstances contained in the indentures governing the Company’s senior notes. These customary circumstances include, so long as other applicable provisions of the indentures are adhered to, the termination or release of a Subsidiary Guarantor’s guarantee of other indebtedness or upon the legal defeasance or covenant defeasance or satisfaction and discharge of the Company’s senior notes. Separate financial statements for the Subsidiary Guarantors of the Company are not presented because the Company has determined that such financial statements would not be material to investors. The accounting policies of the parent company, the Subsidiary Guarantors and the Subsidiary Nonguarantors are the same as those described for the Company in the Summary of Significant Accounting Policies in Note 1 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2013, and include the recently adopted accounting guidance described in Note 2 herein. There are no restrictions on the ability of the Subsidiary Guarantors to transfer funds to the Company in the form of cash dividends, loans or advances.
In connection with the preparation of the condensed consolidating financial information, the Company made certain immaterial adjustments to the condensed consolidating balance sheet at February 28, 2013, and the condensed consolidating statement of cash flows for the nine months ended November 30, 2012. The Company will also make similar adjustments to its condensed consolidating balance sheet and its condensed consolidating statements of cash flows for comparative prior periods presented in future filings. These adjustments (i)  did not change the net increase in cash and cash investments for the parent company, the Subsidiary Guarantors or the Subsidiary Nonguarantors and (ii)  had no impact on the consolidated amounts. The substantial majority of these adjustments had the effect of (i)  decreasing the parent company’s cash flows from operating activities and increasing the parent company’s cash flows from financing activities and (ii)  increasing the Subsidiary Guarantors’ cash flows from operating activities and decreasing the Subsidiary Guarantors’ cash flows from financing activities.

 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Condensed Consolidating Balance Sheet at November 30, 2013
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash investments
$
3.0

 
$
2.2

 
$
60.0

 
$

 
$
65.2

Accounts receivable, net
0.6

 
11.7

 
656.5

 

 
668.8

Inventories
160.5

 
1,298.7

 
405.3

 
(40.5
)
 
1,824.0

Intercompany receivable
7,158.4

 
12,087.8

 
3,320.9

 
(22,567.1
)
 

Prepaid expenses and other
45.9

 
89.6

 
487.5

 
(345.6
)
 
277.4

Total current assets
7,368.4

 
13,490.0

 
4,930.2

 
(22,953.2
)
 
2,835.4

Property, plant and equipment, net
39.4

 
845.6

 
1,020.4

 

 
1,905.4

Investments in subsidiaries
10,539.3

 
8.7

 

 
(10,548.0
)
 

Goodwill

 
5,411.2

 
738.8

 

 
6,150.0

Intangible assets, net

 
709.6

 
2,527.0

 
0.6

 
3,237.2

Intercompany notes receivable
3,658.2

 
10.3

 
32.8

 
(3,701.3
)
 

Other assets, net
67.2

 
88.1

 
69.4

 
(16.4
)
 
208.3

Total assets
$
21,672.5

 
$
20,563.5

 
$
9,318.6

 
$
(37,218.3
)
 
$
14,336.3

 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Notes payable to banks
$

 
$

 
$
170.5

 
$

 
$
170.5

Current maturities of long-term debt
31.8

 
17.6

 
17.7

 

 
67.1

Accounts payable
38.9

 
269.6

 
153.9

 

 
462.4

Accrued excise taxes
9.2

 
12.1

 
5.1

 

 
26.4

Intercompany payable
10,853.5

 
8,279.9

 
3,433.7

 
(22,567.1
)
 

Other accrued expenses and liabilities
475.4

 
230.9

 
679.0

 
(356.7
)
 
1,028.6

Total current liabilities
11,408.8

 
8,810.1

 
4,459.9

 
(22,923.8
)
 
1,755.0

Long-term debt, less current maturities
5,407.0

 
33.1

 
1,456.9

 

 
6,897.0

Deferred income taxes
21.3

 
572.7

 
132.3

 
(16.3
)
 
710.0

Intercompany notes payable

 
3,682.3

 
19.0

 
(3,701.3
)
 

Other liabilities
45.6

 
25.5

 
113.4

 

 
184.5

Stockholders’ equity
4,789.8

 
7,439.8

 
3,137.1

 
(10,576.9
)
 
4,789.8

Total liabilities and stockholders’ equity
$
21,672.5

 
$
20,563.5

 
$
9,318.6

 
$
(37,218.3
)
 
$
14,336.3

 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Balance Sheet at February 28, 2013
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash investments
$
185.8

 
$
0.7

 
$
145.0

 
$

 
$
331.5

Accounts receivable, net
0.7

 
10.1

 
461.1

 

 
471.9

Inventories
151.5

 
1,019.4

 
317.2

 
(7.2
)
 
1,480.9

Intercompany receivable
4,598.2

 
9,291.4

 
1,075.1

 
(14,964.7
)
 

Prepaid expenses and other
33.9

 
46.4

 
447.8

 
(341.2
)
 
186.9

Total current assets
4,970.1

 
10,368.0

 
2,446.2

 
(15,313.1
)
 
2,471.2

Property, plant and equipment, net
43.3

 
832.7

 
353.0

 

 
1,229.0

Investments in subsidiaries
7,307.0

 
2.8

 

 
(7,309.8
)
 

Goodwill

 
2,097.9

 
624.4

 

 
2,722.3

Intangible assets, net

 
686.5

 
184.9

 

 
871.4

Intercompany notes receivable
1,611.2

 

 
32.6

 
(1,643.8
)
 

Other assets, net
63.3

 
243.2

 
58.6

 
(20.9
)
 
344.2

Total assets
$
13,994.9

 
$
14,231.1

 
$
3,699.7

 
$
(24,287.6
)
 
$
7,638.1

 
 
 
 
 
 
 
 
 
 
 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Current maturities of long-term debt
$
9.8

 
$
17.7

 
$
0.1

 
$

 
$
27.6

Accounts payable
39.2

 
106.4

 
63.4

 

 
209.0

Accrued excise taxes
11.4

 
3.7

 
3.8

 

 
18.9

Intercompany payable
7,257.5

 
6,318.7

 
1,388.5

 
(14,964.7
)
 

Other accrued expenses and liabilities
518.2

 
171.1

 
76.1

 
(343.0
)
 
422.4

Total current liabilities
7,836.1

 
6,617.6

 
1,531.9

 
(15,307.7
)
 
677.9

Long-term debt, less current maturities
3,251.0

 
26.8

 

 

 
3,277.8

Deferred income taxes

 
543.0

 
77.5

 
(20.9
)
 
599.6

Intercompany notes payable

 
1,634.9

 
8.9

 
(1,643.8
)
 

Other liabilities
47.5

 
41.8

 
133.2

 

 
222.5

Stockholders’ equity
2,860.3

 
5,367.0

 
1,948.2

 
(7,315.2
)
 
2,860.3

Total liabilities and stockholders’ equity
$
13,994.9

 
$
14,231.1

 
$
3,699.7

 
$
(24,287.6
)
 
$
7,638.1



 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2013
Sales
$
1,762.9

 
$
2,815.8

 
$
1,413.2

 
$
(2,018.9
)
 
$
3,973.0

Less – excise taxes
(234.2
)
 
(110.3
)
 
(52.0
)
 

 
(396.5
)
Net sales
1,528.7

 
2,705.5

 
1,361.2

 
(2,018.9
)
 
3,576.5

Cost of product sold
(1,303.8
)
 
(1,871.8
)
 
(931.3
)
 
1,973.2

 
(2,133.7
)
Gross profit
224.9

 
833.7

 
429.9

 
(45.7
)
 
1,442.8

Selling, general and administrative expenses
(315.0
)
 
(260.8
)
 
(112.6
)
 
12.8

 
(675.6
)
Impairment of goodwill and intangible assets

 

 
(300.9
)
 

 
(300.9
)
Gain on remeasurement to fair value of equity method investment

 
1,642.0

 

 

 
1,642.0

Operating (loss) income
(90.1
)
 
2,214.9

 
16.4

 
(32.9
)
 
2,108.3

Equity in earnings of equity method investees and subsidiaries
2,008.4

 
92.8

 
0.4

 
(2,013.3
)
 
88.3

Interest income
0.1

 

 
5.8

 

 
5.9

Intercompany interest income
117.3

 
122.8

 
1.1

 
(241.2
)
 

Interest expense
(206.5
)
 
(3.5
)
 
(30.6
)
 

 
(240.6
)
Intercompany interest expense
(130.3
)
 
(110.4
)
 
(0.5
)
 
241.2

 

Income (loss) before income taxes
1,698.9

 
2,316.6

 
(7.4
)
 
(2,046.2
)
 
1,961.9

Benefit from (provision for) income taxes
87.0

 
(246.3
)
 
(26.2
)
 
9.5

 
(176.0
)
Net income (loss)
$
1,785.9

 
$
2,070.3

 
$
(33.6
)
 
$
(2,036.7
)
 
$
1,785.9

Comprehensive income (loss)
$
1,747.8

 
$
2,098.9

 
$
(77.4
)
 
$
(2,021.5
)
 
$
1,747.8

 
 
 
 
 
 
 
 
 
 
 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended November 30, 2012
Sales
$
1,536.7

 
$
1,283.5

 
$
623.7

 
$
(1,060.5
)
 
$
2,383.4

Less – excise taxes
(158.8
)
 
(74.8
)
 
(49.6
)
 

 
(283.2
)
Net sales
1,377.9

 
1,208.7

 
574.1

 
(1,060.5
)
 
2,100.2

Cost of product sold
(1,105.0
)
 
(857.5
)
 
(344.1
)
 
1,052.9

 
(1,253.7
)
Gross profit
272.9

 
351.2

 
230.0

 
(7.6
)
 
846.5

Selling, general and administrative expenses
(249.2
)
 
(81.0
)
 
(130.7
)
 
9.9

 
(451.0
)
Operating income
23.7

 
270.2

 
99.3

 
2.3

 
395.5

Equity in earnings of equity method investees and subsidiaries
427.0

 
183.5

 
0.4

 
(427.3
)
 
183.6

Interest income
0.4

 

 
4.3

 

 
4.7

Intercompany interest income
59.2

 
144.1

 
1.2

 
(204.5
)
 

Interest expense
(169.0
)
 
(0.6
)
 
(1.8
)
 

 
(171.4
)
Intercompany interest expense
(144.1
)
 
(60.3
)
 
(0.1
)
 
204.5

 

Loss on write-off of financing costs
(2.8
)
 

 

 

 
(2.8
)
Income before income taxes
194.4

 
536.9

 
103.3

 
(425.0
)
 
409.6

Benefit from (provision for) income taxes
111.7

 
(227.1
)
 
12.4

 
(0.5
)
 
(103.5
)
Net income
$
306.1

 
$
309.8

 
$
115.7

 
$
(425.5
)
 
$
306.1

Comprehensive income
$
297.7

 
$
308.7

 
$
108.6

 
$
(417.3
)
 
$
297.7

 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2013
Sales
$
641.1

 
$
1,182.4

 
$
591.6

 
$
(821.6
)
 
$
1,593.5

Less – excise taxes
(80.9
)
 
(51.2
)
 
(18.1
)
 

 
(150.2
)
Net sales
560.2

 
1,131.2

 
573.5

 
(821.6
)
 
1,443.3

Cost of product sold
(478.8
)
 
(779.1
)
 
(391.4
)
 
815.7

 
(833.6
)
Gross profit
81.4

 
352.1

 
182.1

 
(5.9
)
 
609.7

Selling, general and administrative expenses
(95.6
)
 
(116.3
)
 
(38.5
)
 
4.5

 
(245.9
)
Operating (loss) income
(14.2
)
 
235.8

 
143.6

 
(1.4
)
 
363.8

Equity in earnings of equity method investees and subsidiaries
285.6

 
18.7

 
0.2

 
(286.5
)
 
18.0

Interest income

 

 
2.0

 

 
2.0

Intercompany interest income
46.6

 
44.9

 
0.3

 
(91.8
)
 

Interest expense
(75.7
)
 
(0.5
)
 
(15.4
)
 

 
(91.6
)
Intercompany interest expense
(47.6
)
 
(44.0
)
 
(0.2
)
 
91.8

 

Income before income taxes
194.7

 
254.9

 
130.5

 
(287.9
)
 
292.2

Benefit from (provision for) income taxes
16.3

 
(93.3
)
 
(4.5
)
 
0.3

 
(81.2
)
Net income
$
211.0

 
$
161.6

 
$
126.0

 
$
(287.6
)
 
$
211.0

Comprehensive income
$
240.4

 
$
183.1

 
$
157.0

 
$
(340.1
)
 
$
240.4

 
 
 
 
 
 
 
 
 
 
 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended November 30, 2012
Sales
$
570.1

 
$
483.1

 
$
223.5

 
$
(416.3
)
 
$
860.4

Less – excise taxes
(55.4
)
 
(20.2
)
 
(17.9
)
 

 
(93.5
)
Net sales
514.7

 
462.9

 
205.6

 
(416.3
)
 
766.9

Cost of product sold
(424.3
)
 
(320.0
)
 
(124.8
)
 
413.0

 
(456.1
)
Gross profit
90.4

 
142.9

 
80.8

 
(3.3
)
 
310.8

Selling, general and administrative expenses
(82.6
)
 
(28.7
)
 
(44.8
)
 
4.1

 
(152.0
)
Operating income
7.8

 
114.2

 
36.0

 
0.8

 
158.8

Equity in earnings of equity method investees and subsidiaries
141.4

 
53.9

 
0.2

 
(143.0
)
 
52.5

Interest income
0.3

 

 
1.5

 

 
1.8

Intercompany interest income
19.7

 
48.7

 
0.4

 
(68.8
)
 

Interest expense
(62.9
)
 

 
(0.3
)
 

 
(63.2
)
Intercompany interest expense
(48.7
)
 
(20.1
)
 

 
68.8

 

Income before income taxes
57.6

 
196.7

 
37.8

 
(142.2
)
 
149.9

Benefit from (provision for) income taxes
51.9

 
(96.1
)
 
4.0

 
(0.2
)
 
(40.4
)
Net income
$
109.5

 
$
100.6

 
$
41.8

 
$
(142.4
)
 
$
109.5

Comprehensive income
$
117.1

 
$
101.0

 
$
47.3

 
$
(148.3
)
 
$
117.1



 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2013
Net cash (used in) provided by operating activities
$
(266.2
)
 
$
910.0

 
$
4.1

 
$
(18.8
)
 
$
629.1

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Purchase of business, net of cash acquired

 
(1,770.1
)
 
(2,910.9
)
 

 
(4,681.0
)
Purchases of property, plant and equipment
(5.7
)
 
(45.9
)
 
(34.3
)
 

 
(85.9
)
Proceeds from sales of assets

 
0.2

 
7.6

 

 
7.8

Net proceeds from intercompany notes
859.2

 

 

 
(859.2
)
 

Net investments in equity affiliates
(1,095.0
)
 
(5.0
)
 

 
1,100.0

 

Other investing activities

 
2.2

 
(0.6
)
 

 
1.6

Net cash used in investing activities
(241.5
)
 
(1,818.6
)
 
(2,938.2
)
 
240.8

 
(4,757.5
)
 
 
 
 
 
 
 
 
 
 
 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Payments of dividends

 

 
(18.8
)
 
18.8

 

Net (returns of capital to) contributions from equity affiliates

 
(188.4
)
 
1,288.4

 
(1,100.0
)
 

Net (repayments of) proceeds from intercompany notes
(1,941.5
)
 
1,129.9

 
(47.6
)
 
859.2

 

Proceeds from issuance of long-term debt
2,225.0

 

 
1,500.0

 

 
3,725.0

Net proceeds from notes payable

 

 
170.6

 

 
170.6

Proceeds from exercises of employee stock options
93.1

 

 

 

 
93.1

Excess tax benefits from stock-based payment awards
64.7

 

 

 

 
64.7

Proceeds from employee stock purchases
2.5

 

 

 

 
2.5

Principal payments of long-term debt
(49.3
)
 
(15.0
)
 
(26.3
)
 

 
(90.6
)
Payments of financing costs of long-term debt
(69.6
)
 

 
(12.6
)
 

 
(82.2
)
Payments of minimum tax withholdings on stock-based payment awards

 
(16.4
)
 
(1.6
)
 

 
(18.0
)
Net cash provided by financing activities
324.9

 
910.1

 
2,852.1

 
(222.0
)
 
3,865.1

 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash and cash investments

 

 
(3.0
)
 

 
(3.0
)
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash investments
(182.8
)
 
1.5

 
(85.0
)
 

 
(266.3
)
Cash and cash investments, beginning of period
185.8

 
0.7

 
145.0

 

 
331.5

Cash and cash investments, end of period
$
3.0

 
$
2.2

 
$
60.0

 
$

 
$
65.2

 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended November 30, 2012
Net cash (used in) provided by operating activities
$
(217.5
)
 
$
506.4

 
$
100.1

 
$

 
$
389.0

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Purchase of business, net of cash acquired

 
(159.3
)
 

 

 
(159.3
)
Purchases of property, plant and equipment
(7.9
)
 
(33.4
)
 
(10.9
)
 

 
(52.2
)
Proceeds from sales of assets

 
4.9

 
3.1

 

 
8.0

Proceeds from notes receivable
1.2

 
3.4

 

 

 
4.6

Net proceeds from intercompany notes
307.2

 

 

 
(307.2
)
 

Net returns of capital from equity affiliates
14.0

 

 

 
(14.0
)
 

Other investing activities
(0.5
)
 
0.2

 
(1.0
)
 

 
(1.3
)
Net cash provided by (used in) investing activities
314.0

 
(184.2
)

(8.8
)

(321.2
)

(200.2
)
 
 
 
 
 
 
 
 
 
 
 
Parent
Company
 
Subsidiary
Guarantors
 
Subsidiary
Nonguarantors
 
Eliminations
 
Consolidated
(in millions)
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Net contributions from (returns of capital to) equity affiliates
0.1

 
(7.9
)
 
(6.2
)
 
14.0

 

Net proceeds from (repayments of) intercompany notes
0.5

 
(307.5
)
 
(0.2
)
 
307.2

 

Proceeds from issuance of long-term debt
2,050.0

 

 

 

 
2,050.0

Net repayments of notes payable
(298.0
)
 

 
(58.0
)
 

 
(356.0
)
Proceeds from exercises of employee stock options
135.0

 

 

 

 
135.0

Excess tax benefits from stock-based payment awards
17.2

 

 

 

 
17.2

Proceeds from employee stock purchases
2.1

 

 

 

 
2.1

Principal payments of long-term debt
(846.4
)
 
(5.2
)
 

 

 
(851.6
)
Payments of financing costs of long-term debt
(35.2
)
 

 

 

 
(35.2
)
Payments of minimum tax withholdings on stock-based payment awards

 

 
(0.5
)
 

 
(0.5
)
Payment of restricted cash upon issuance of long-term debt
(650.0
)
 

 

 

 
(650.0
)
Purchases of treasury stock
(383.0
)
 

 

 

 
(383.0
)
Net cash used in financing activities
(7.7
)
 
(320.6
)
 
(64.9
)
 
321.2

 
(72.0
)
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
and cash investments

 

 
(2.1
)
 

 
(2.1
)
 
 
 
 
 
 
 
 
 
 
Net increase in cash and cash investments
88.8

 
1.6

 
24.3

 

 
114.7

Cash and cash investments, beginning
of period
0.5

 
0.6

 
84.7

 

 
85.8

Cash and cash investments, end of
period
$
89.3

 
$
2.2

 
$
109.0

 
$

 
$
200.5