Analysis of Debt
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- Income Statement
- Statement of Comprehensive Income
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Current Ratio since 2005
- Analysis of Revenues
- Aggregate Accruals
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Total Debt (Carrying Amount)
Constellation Brands Inc., balance sheet: debt
US$ in thousands
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
- Short-term borrowings
- The short-term borrowings exhibit fluctuations over the periods with a peak at 791,500 thousand USD in 2019, after rising from 606,500 thousand USD in 2017 to 746,800 thousand USD in 2018. A significant drop occurs in 2020 to 238,900 thousand USD, and after an absence of reported data for 2021, the value recovers moderately to 323,000 thousand USD in 2022.
- Current maturities of long-term debt
- This category displays notable volatility, with an initial value of 910,900 thousand USD in 2017, followed by a sharp decline to 22,300 thousand USD in 2018. It then surges dramatically to 1,065,200 thousand USD in 2019 and remains elevated at 734,900 thousand USD in 2020, before plunging again to 29,200 thousand USD in 2021. In 2022, there is a significant increase to 605,300 thousand USD.
- Long-term debt, less current maturities
- The long-term debt shows an overall increasing trend from 7,720,700 thousand USD in 2017 to a peak of 11,759,800 thousand USD in 2019. Following this peak, the amount steadily decreases to 9,488,200 thousand USD by 2022, indicating a reduction in long-term obligations over the last three years of the period analyzed.
- Total borrowings (carrying amount)
- Total borrowings rise consistently from 9,238,100 thousand USD in 2017 to a peak of 13,616,500 thousand USD in 2019. After this peak, total borrowings decline substantially to 10,416,500 thousand USD by 2022, reflecting a contraction in overall debt levels. This trend aligns with the reductions observed in long-term debt, suggesting deleveraging or repayment actions after 2019.
Total Debt (Fair Value)
| Feb 28, 2022 | |
|---|---|
| Selected Financial Data (US$ in thousands) | |
| Short-term borrowings | |
| Long-term debt, including current portion | |
| Total total borrowings (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2022-02-28).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on borrowings:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2022-02-28).
1 US$ in thousands
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Constellation Brands Inc., interest costs incurred
US$ in thousands
| 12 months ended: | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense | |||||||||||||
| Capitalized interest costs | |||||||||||||
| Interest costs incurred |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
- Interest Expense
- The interest expense remained relatively stable between 2017 and 2018, with values around 333,300 and 332,000 thousand US dollars respectively. From 2018 to 2020, there was a noticeable increase, peaking at 428,700 thousand US dollars in 2020. Subsequently, a decline is observed with interest expense dropping to 385,700 thousand US dollars in 2021 and further decreasing to 356,400 thousand US dollars in 2022.
- Capitalized Interest Costs
- Capitalized interest costs were first reported in 2018 at 17,400 thousand US dollars, indicating the beginning of capitalizing interest expenses. These costs increased to 23,100 thousand US dollars in 2019 and peaked at 37,200 thousand US dollars in 2020. Thereafter, a decreasing trend is observed, with amounts falling to 31,500 thousand US dollars in 2021 and 25,300 thousand US dollars in 2022.
- Interest Costs Incurred
- The total interest costs incurred, which represent the sum of interest expense and capitalized interest costs, show a consistent upward trajectory from 333,300 thousand US dollars in 2017 to a peak of 465,900 thousand US dollars in 2020. After reaching this high point, the interest costs incurred declined steadily to 417,200 thousand US dollars in 2021 and further to 381,700 thousand US dollars in 2022.
- Summary
- Over the six-year period, the data indicates an overall increase in total interest costs incurred until 2020, followed by a gradual reduction through 2022. The initial stability in interest expense was offset by a rise in capitalized interest costs starting in 2018, with both components peaking around 2020. Subsequent declines in both interest expense and capitalized interest suggest a potential reduction in borrowing costs or effective management of capital expenditures. The trends highlight a period of increased financing costs culminating in 2020, succeeded by a moderate easing over the following two years.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
2022 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio exhibited notable fluctuations over the analyzed period. It started at 7.28 in 2017 and increased steadily to 8.06 in 2018, followed by a significant rise to 12.29 in 2019. However, there was a sharp decline in 2020, with the ratio turning negative at -1.2, indicating a period where earnings were insufficient to cover interest expenses. In the subsequent years, the ratio recovered to 7.59 in 2021 but decreased again to 1.87 in 2022, reflecting a weakened ability to cover interest costs compared to earlier years.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio displayed a similar trajectory to the unadjusted ratio. It began at 7.28 in 2017, increased moderately to 7.66 in 2018, and then rose substantially to 11.56 in 2019. The ratio declined sharply in 2020 to -1.11, mirroring the negative coverage of interest expenses. Recovery occurred in 2021 with a ratio of 7.02, followed by a decrease to 1.75 in 2022. This pattern suggests that even when accounting for capitalized interest, the company faced significant challenges in maintaining consistent interest coverage during the COVID-19 pandemic and thereafter.
- Overall Analysis
- The data reveal a strong capacity to cover interest expenses from 2017 through 2019, peaking in 2019. The sudden negative ratios in 2020 signify a critical downturn, likely influenced by external economic factors affecting profitability. Although there is a partial recovery in 2021, the interest coverage ratios remain substantially lower than pre-2020 levels, indicating ongoing financial stress or increased interest obligations. The similarity between the adjusted and unadjusted ratios suggests that capitalized interest had a limited effect on the overall interest coverage profile.