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Business Segment Information | 6 Months Ended
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Aug. 31, 2023
Segment Reporting [Abstract] |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION Prior to May 31, 2023, our internal management financial reporting consisted of three business divisions: (i) Beer, (ii) Wine and Spirits, and (iii) Canopy and we reported our operating results in four segments: (i) Beer, (ii) Wine and Spirits, (iii) Corporate Operations and Other, and (iv) Canopy. Due to several factors occurring as of May 31, 2023, including those which led to the additional Canopy Equity Method Investment impairment combined with Canopy’s financial results no longer being provided to, or reviewed by, our CODM, and no longer being used to make strategic decisions, allocate resources, or assess performance, we have removed Canopy as a reportable segment. Accordingly, effective May 31, 2023, o ur internal management financial reporting consists of two business divisions: (i) Beer and (ii) Wine and Spirits and we report our operating results in three segments: (i) Beer, (ii) Wine and Spirits, and (iii) Corporate Operations and Other. In the Beer segment, our portfolio consists of high-end imported beer brands and ABAs. We have an exclusive perpetual brand license to import, market, and sell our Mexican beer portfolio in the U.S. In the Wine and Spirits segment, we sell a portfolio that includes higher-margin, higher-growth wine brands complemented by certain higher-end spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of executive management, corporate development, corporate finance, corporate growth and strategy, human resources, internal audit, investor relations, IT, legal, and public relations, as well as our Canopy investment and investments made through our corporate venture capital function. All costs included in the Corporate Operations and Other segment are general costs that are applicable to the consolidated group and are, therefore, not allocated to the other reportable segments. All costs reported within the Corporate Operations and Other segment are not included in our CODM’s evaluation of the operating income (loss) performance of the other reportable segments. The business segments reflect how our operations are managed, how resources are allocated, how operating performance is evaluated by senior management, and the structure of our internal financial reporting. Long-lived tangible assets and total asset information by segment is not provided to, or reviewed by, our CODM as it is not used to make strategic decisions, allocate resources, or assess performance. In addition, management excludes Comparable Adjustments from its evaluation of the results of each operating segment as these Comparable Adjustments are not reflective of core operations of the segments. Segment operating performance and the incentive compensation of segment management are evaluated based on core segment operating income (loss) which does not include the impact of these Comparable Adjustments. We evaluate segment operating performance based on operating income (loss) of the respective business units. Comparable Adjustments that impacted comparability in our segment operating income (loss) for each period are as follows:
| For the Six Months Ended August 31, |  | For the Three Months Ended August 31,
| 2023 |  | 2022 |  | 2023 |  | 2022
(in millions) |  |  |  |  |  |  |
Cost of product sold |  |  |  |  |  |  |
Net gain (loss) on undesignated commodity derivative contracts | $ | (15.6) |  |  | $ | 33.1 |  |  | $ | 19.1 |  |  | $ | (15.4) |
Flow through of inventory step-up | (1.5) |  |  | (1.9) |  |  | (0.8) |  |  | (0.9) |
Settlements of undesignated commodity derivative contracts | 6.2 |  |  | (54.6) |  |  | 5.6 |  |  | (31.3) |
Net flow through of reserved inventory | — |  |  | 1.2 |  |  | — |  |  | 1.2 |
Recovery of (loss on) inventory write-down | — |  |  | 0.2 |  |  | — |  |  | — |
Comparable Adjustments, Cost of product sold | (10.9) |  |  | (22.0) |  |  | 23.9 |  |  | (46.4) |
Selling, general, and administrative expenses |  |  |  |  |  |  |
Restructuring and other strategic business development costs | (18.3) |  |  | (2.6) |  |  | (3.4) |  |  | (1.2) |
Transition services agreements activity | (12.7) |  |  | (7.9) |  |  | (7.0) |  |  | (4.5) |
Transaction, integration, and other acquisition-related costs | (0.6) |  |  | (0.7) |  |  | (0.3) |  |  | (0.5) |
Costs associated with the Reclassification | 0.2 |  |  | (21.3) |  |  | — |  |  | (20.6) |
Other gains (losses) (1) | (9.3) |  |  | 8.8 |  |  | (2.3) |  |  | 3.6 |
Comparable Adjustments, Selling, general, and administrative expenses | (40.7) |  |  | (23.7) |  |  | (13.0) |  |  | (23.2) |
Comparable Adjustments, Operating income (loss) | $ | (51.6) |  |  | $ | (45.7) |  |  | $ | 10.9 |  |  | $ | (69.6) |
(1) | Primarily includes the following:
|  | For the Six Months Ended August 31, |  | For the Three Months Ended August 31,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
| (in millions) |  |  |  |  |  |  |
| Gain (loss) on sale of business | $ | (14.9) |  |  | $ | — |  |  | $ | (7.9) |  |  | $ | — |
| Recognition of a previously deferred gain upon release of a related indemnity | $ | 5.6 |  |  | $ | — |  |  | $ | 5.6 |  |  | $ | — |
| Gain from remeasurement of previously held equity method investments | $ | — |  |  | $ | 5.2 |  |  | $ | — |  |  | $ | — |
| Decreases in estimated fair values of contingent liabilities associated with prior period acquisitions | $ | — |  |  | $ | 4.4 |  |  | $ | — |  |  | $ | 4.4 |
The accounting policies of the segments are the same as those described for the Company in Note 1 of our consolidated financial statements included in our 2023 Annual Report. Segment information is as follows:
| For the Six Months Ended August 31, |  | For the Three Months Ended August 31,
| 2023 |  | 2022 |  | 2023 |  | 2022
(in millions) |  |  |  |  |  |  |
Beer |  |  |  |  |  |  |
Net sales | $ | 4,491.3 |  |  | $ | 4,037.5 |  |  | $ | 2,392.7 |  |  | $ | 2,139.3 |
Segment operating income (loss) | $ | 1,751.7 |  |  | $ | 1,628.4 |  |  | $ | 953.9 |  |  | $ | 865.6 |
Capital expenditures | $ | 440.3 |  |  | $ | 357.8 |  |  | $ | 234.7 |  |  | $ | 196.0 |
Depreciation and amortization | $ | 160.2 |  |  | $ | 135.2 |  |  | $ | 81.4 |  |  | $ | 67.0 |
| For the Six Months Ended August 31, |  | For the Three Months Ended August 31,
| 2023 |  | 2022 |  | 2023 |  | 2022
(in millions) |  |  |  |  |  |  |
Wine and Spirits |  |  |  |  |  |  |
Net sales: |  |  |  |  |  |  |
Wine | $ | 744.9 |  |  | $ | 846.1 |  |  | $ | 383.9 |  |  | $ | 442.0 |
Spirits | 115.5 |  |  | 134.7 |  |  | 60.2 |  |  | 73.8 |
Net sales | $ | 860.4 |  |  | $ | 980.8 |  |  | $ | 444.1 |  |  | $ | 515.8 |
Segment operating income (loss) | $ | 160.0 |  |  | $ | 190.4 |  |  | $ | 80.7 |  |  | $ | 99.4 |
Income (loss) from unconsolidated investments | $ | 10.6 |  |  | $ | 4.9 |  |  | $ | 8.3 |  |  | $ | 3.4 |
Equity method investments | $ | 104.4 |  |  | $ | 100.5 |  |  | $ | 104.4 |  |  | $ | 100.5 |
Capital expenditures | $ | 77.5 |  |  | $ | 51.6 |  |  | $ | 38.9 |  |  | $ | 21.8 |
Depreciation and amortization | $ | 45.6 |  |  | $ | 43.3 |  |  | $ | 23.1 |  |  | $ | 21.0 |
Corporate Operations and Other |  |  |  |  |  |  |
Segment operating income (loss) | $ | (116.7) |  |  | $ | (143.6) |  |  | $ | (66.8) |  |  | $ | (82.3) |
Income (loss) from unconsolidated investments | $ | (54.4) |  |  | $ | (91.0) |  |  | $ | (21.1) |  |  | $ | (37.0) |
Equity method investments | $ | 172.7 |  |  | $ | 732.9 |  |  | $ | 172.7 |  |  | $ | 732.9 |
Capital expenditures | $ | 64.2 |  |  | $ | 25.6 |  |  | $ | 31.4 |  |  | $ | 20.6 |
Depreciation and amortization | $ | 8.6 |  |  | $ | 6.9 |  |  | $ | 4.2 |  |  | $ | 3.7 |
Comparable Adjustments |  |  |  |  |  |  |
Operating income (loss) | $ | (51.6) |  |  | $ | (45.7) |  |  | $ | 10.9 |  |  | $ | (69.6) |
Income (loss) from unconsolidated investments | $ | (391.8) |  |  | $ | (1,820.9) |  |  | $ | (7.4) |  |  | $ | (1,685.5) |
Consolidated |  |  |  |  |  |  |
Net sales | $ | 5,351.7 |  |  | $ | 5,018.3 |  |  | $ | 2,836.8 |  |  | $ | 2,655.1 |
Operating income (loss) | $ | 1,743.4 |  |  | $ | 1,629.5 |  |  | $ | 978.7 |  |  | $ | 813.1 |
Income (loss) from unconsolidated investments (1) | $ | (435.6) |  |  | $ | (1,907.0) |  |  | $ | (20.2) |  |  | $ | (1,719.1) |
Equity method investments | $ | 277.1 |  |  | $ | 833.4 |  |  | $ | 277.1 |  |  | $ | 833.4 |
Capital expenditures | $ | 582.0 |  |  | $ | 435.0 |  |  | $ | 305.0 |  |  | $ | 238.4 |
Depreciation and amortization | $ | 214.4 |  |  | $ | 185.4 |  |  | $ | 108.7 |  |  | $ | 91.7 |
(1) | Income (loss) from unconsolidated investments consists of:
|  |  | For the Six Months Ended August 31, |  | For the Three Months Ended August 31,
|  |  | 2023 |  | 2022 |  | 2023 |  | 2022
|  | (in millions) |  |  |  |  |  |  |
|  | Impairment of equity method investments | $ | (135.8) |  |  | $ | (1,060.3) |  |  | $ | (12.3) |  |  | $ | (1,060.3) |
|  | Unrealized net gain (loss) on securities measured at fair value | (74.4) |  |  | (31.7) |  |  | (2.6) |  |  | (9.3) |
|  | Equity in earnings (losses) from Canopy and related activities | (231.8) |  |  | (815.7) |  |  | (12.0) |  |  | (650.7) |
|  | Equity in earnings (losses) from other equity method investees and related activities | 6.4 |  |  | 0.7 |  |  | 6.7 |  |  | 1.2 |
|  |  | $ | (435.6) |  |  | $ | (1,907.0) |  |  | $ | (20.2) |  |  | $ | (1,719.1) |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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