Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Constellation Brands Inc., consolidated income statement

US$ in thousands

12 months ended:	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Sales	9,529,100)	9,355,700)	9,113,000)	8,884,300)	8,326,800)	8,061,600)
Excise taxes	(708,400)	(740,800)	(769,500)	(768,300)	(741,800)	(730,100)
Net sales	8,820,700)	8,614,900)	8,343,500)	8,116,000)	7,585,000)	7,331,500)
Cost of product sold	(4,113,400)	(4,148,900)	(4,191,600)	(4,035,700)	(3,767,800)	(3,802,100)
Gross profit	4,707,300)	4,466,000)	4,151,900)	4,080,300)	3,817,200)	3,529,400)
Selling, general, and administrative expenses	(1,711,400)	(1,665,100)	(1,621,800)	(1,668,100)	(1,532,700)	(1,392,400)
Impairment of brewery construction in progress	(665,900)	—)	—)	—)	—)	—)
Impairment of assets held for sale	—)	(24,000)	(449,700)	—)	—)	—)
Gain on sale of business	1,700)	14,200)	74,100)	—)	—)	262,400)
Operating income	2,331,700)	2,791,100)	2,154,500)	2,412,200)	2,284,500)	2,399,400)
Income (loss) from unconsolidated investments	(1,635,500)	150,300)	(2,668,600)	2,101,600)	487,200)	27,300)
Interest expense	(356,400)	(385,700)	(428,700)	(367,100)	(332,000)	(333,300)
Loss on extinguishment of debt	(29,400)	(12,800)	(2,400)	(1,700)	(97,000)	—)
Income (loss) before income taxes	310,400)	2,542,900)	(945,200)	4,145,000)	2,342,700)	2,093,400)
(Provision for) benefit from income taxes	(309,400)	(511,100)	966,600)	(685,900)	(11,900)	(554,200)
Net income	1,000)	2,031,800)	21,400)	3,459,100)	2,330,800)	1,539,200)
Net income attributable to noncontrolling interests	(41,400)	(33,800)	(33,200)	(23,200)	(11,900)	(4,100)
Net income (loss) attributable to CBI	(40,400)	1,998,000)	(11,800)	3,435,900)	2,318,900)	1,535,100)

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).

The financial data reveals a generally positive trend in sales and net sales over the six-year period, with sales increasing steadily from approximately $8.06 billion in 2017 to about $9.53 billion in 2022. Correspondingly, net sales, after adjusting for excise taxes, rose from roughly $7.33 billion to $8.82 billion, indicating resilience despite fluctuations in excise tax expense, which shows a slight declining pattern after 2020.

Gross profit has demonstrated consistent growth, rising from approximately $3.53 billion in 2017 to $4.71 billion in 2022. This trend reflects improved profitability at the gross margin level, despite some volatility in the cost of products sold which remained relatively stable in the latter years, hovering slightly above $4.1 billion.

Selling, general, and administrative expenses escalated steadily over the years, reaching nearly $1.71 billion in 2022 from $1.39 billion in 2017, which could indicate increased operational costs or investments in marketing and administration.

There were notable asset impairments related to brewery construction and assets held for sale, especially in 2020 and 2022, which negatively impacted operating results. The impairment recorded in 2022 amounts to $665.9 million, a significant charge compared to prior years’ smaller impairments.

Operating income exhibited volatility; it peaked at $2.79 billion in 2021 but declined to $2.33 billion in 2022. The dip in operating income in 2020 correlates with substantial impairment expenses and lower gains on the sale of business activities. Gains on sale of business were sporadic and diminished after 2017.

Income from unconsolidated investments experienced considerable swings, with a peak income of over $2.1 billion in 2019, followed by a large loss of approximately $2.67 billion in 2020. This volatility significantly affected overall profitability and suggests exposure to external investment risk.

Interest expense generally increased from 2017 to 2020, peaking at approximately $429 million, and then decreased slightly in subsequent years. There was also a recurring loss on extinguishment of debt, modest in comparison, which may have contributed to financing costs.

Income before income taxes showed a dramatic fluctuation, with a high point in 2019 at $4.15 billion, followed by a substantial loss in 2020 of nearly $945 million. The following years showed partial recovery but remained markedly below prior peak levels.

The tax provision fluctuated between benefits and expenses, with a notable income tax benefit in 2020, likely associated with the loss before taxes, and moderate provisions in other years.

Net income attributable to the company also reflected variability, peaking at $3.44 billion in 2019, plunging to a loss of $11.8 million in 2020, then recovering somewhat to $2.0 billion in 2021 before turning negative again in 2022 with a net loss of approximately $40.4 million. The net loss in 2020 and 2022 aligns with the observed impairments and losses from investments, highlighting the impact of one-time charges and investment volatility on profitability.

Overall, the data indicates stable top-line growth and gross profitability, but earnings have been materially affected by significant impairments and substantial fluctuations in investment income, leading to pronounced net income volatility in recent years.

Sales and Revenue Trends: Steady growth in sales and net sales, with excise taxes slightly declining post-2020.
Profitability: Gross profit shows consistent improvement, while operating income and net income reveal volatility due to impairments and investment results.
Expenses: Rising selling, general, and administrative expenses suggest increased operating costs; interest expenses peaked in 2020 then decreased slightly.
Impairments and One-Time Charges: Significant impairments in 2020 and 2022 negatively impacted earnings, alongside fluctuating gains on asset sales.
Investment Income: Income from unconsolidated investments is highly volatile, greatly influencing annual net income fluctuations.
Income Taxes: Income tax provisions vary, with a notable tax benefit coinciding with the 2020 loss before taxes.
Net Income: Strong performance through 2019 followed by diminished or negative net income in 2020 and 2022, reflecting the effect of impairments and volatile investment income.

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Constellation Brands Inc. (NYSE:STZ)

Income Statement