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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Constellation Brands Inc., economic profit calculation

US$ in thousands

12 months ended:	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Net operating profit after taxes (NOPAT)¹	498,399)	2,686,552)	(778,137)	4,189,068)	2,136,576)	1,893,872)
Cost of capital²	12.48%	12.28%	10.96%	11.66%	12.32%	11.92%
Invested capital³	20,491,900)	21,239,800)	21,790,300)	24,890,124)	18,550,367)	17,413,511)

Economic profit⁴	(2,059,538)	77,619)	(3,166,762)	1,288,017)	(148,359)	(181,841)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 498,399 – 12.48% × 20,491,900 = -2,059,538

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Constellation Brands Inc. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

Constellation Brands Inc., NOPAT calculation

US$ in thousands

12 months ended:	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Net income (loss) attributable to CBI	(40,400)	1,998,000)	(11,800)	3,435,900)	2,318,900)	1,535,100)
Deferred income tax expense (benefit)¹	84,800)	336,400)	(1,153,700)	426,900)	(428,100)	128,700)
Increase (decrease) in deferred revenue²	118,300)	—)	—)	—)	—)	—)
Increase (decrease) in equity equivalents³	203,100)	336,400)	(1,153,700)	426,900)	(428,100)	128,700)
Interest expense	356,400)	385,700)	428,700)	367,100)	332,000)	333,300)
Interest expense, operating lease liability⁴	16,131)	17,277)	19,607)	16,531)	15,513)	14,350)
Adjusted interest expense	372,531)	402,977)	448,307)	383,631)	347,513)	347,650)
Tax benefit of interest expense⁵	(78,232)	(84,625)	(94,144)	(80,562)	(113,637)	(121,677)
Adjusted interest expense, after taxes⁶	294,299)	318,352)	354,163)	303,068)	233,876)	225,972)
Net income (loss) attributable to noncontrolling interest	41,400)	33,800)	33,200)	23,200)	11,900)	4,100)
Net operating profit after taxes (NOPAT)	498,399)	2,686,552)	(778,137)	4,189,068)	2,136,576)	1,893,872)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in deferred revenue.

³ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to CBI.

⁴ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 537,700 × 3.00% = 16,131

⁵ 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 372,531 × 21.00% = 78,232

⁶ Addition of after taxes interest expense to net income (loss) attributable to CBI.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Constellation Brands Inc. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

Constellation Brands Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Income tax provision (benefit)	309,400)	511,100)	(966,600)	685,900)	11,900)	554,200)
Less: Deferred income tax expense (benefit)	84,800)	336,400)	(1,153,700)	426,900)	(428,100)	128,700)
Add: Tax savings from interest expense	78,232)	84,625)	94,144)	80,562)	113,637)	121,677)
Cash operating taxes	302,832)	259,325)	281,244)	339,562)	553,637)	547,177)

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).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Constellation Brands Inc. cash operating taxes decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Constellation Brands Inc., invested capital calculation (financing approach)

US$ in thousands

	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Short-term borrowings	323,000)	—)	238,900)	791,500)	746,800)	606,500)
Current maturities of long-term debt	605,300)	29,200)	734,900)	1,065,200)	22,300)	910,900)
Long-term debt, less current maturities	9,488,200)	10,413,100)	11,210,800)	11,759,800)	9,417,600)	7,720,700)
Operating lease liability¹	537,700)	539,900)	560,200)	450,424)	452,267)	395,311)
Total reported debt & leases	10,954,200)	10,982,200)	12,744,800)	14,066,924)	10,638,967)	9,633,411)
Total CBI stockholders’ equity	11,731,900)	13,598,900)	12,131,800)	12,551,000)	8,046,100)	6,891,200)
Net deferred tax (assets) liabilities²	(1,835,700)	(1,922,800)	(2,272,400)	(1,153,600)	718,300)	1,132,400)
Deferred revenue³	136,100)	—)	—)	—)	—)	—)
Equity equivalents⁴	(1,699,600)	(1,922,800)	(2,272,400)	(1,153,600)	718,300)	1,132,400)
Accumulated other comprehensive (income) loss, net of tax⁵	412,700)	335,500)	266,300)	353,900)	202,900)	399,800)
Noncontrolling interests	315,900)	330,200)	342,500)	286,200)	16,600)	(6,400)
Adjusted total CBI stockholders’ equity	10,760,900)	12,341,800)	10,468,200)	12,037,500)	8,983,900)	8,417,000)
Construction in progres⁶	(1,223,200)	(2,084,200)	(1,422,700)	(1,214,300)	(1,072,500)	(636,900)
Invested capital	20,491,900)	21,239,800)	21,790,300)	24,890,124)	18,550,367)	17,413,511)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of deferred revenue.

⁴ Addition of equity equivalents to total CBI stockholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of construction in progres.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Constellation Brands Inc. invested capital decreased from 2020 to 2021 and from 2021 to 2022.

Constellation Brands Inc., cost of capital calculations

Feb 28, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	47,846,762)	47,846,762)	÷	59,052,762)	=	0.81	0.81	×	14.75%	=	11.95%
Total borrowings³	10,668,300)	10,668,300)	÷	59,052,762)	=	0.18	0.18	×	3.60% × (1 – 21.00%)	=	0.51%
Operating lease liability⁴	537,700)	537,700)	÷	59,052,762)	=	0.01	0.01	×	3.00% × (1 – 21.00%)	=	0.02%
Total:	59,052,762)					1.00					12.48%

Based on: 10-K (reporting date: 2022-02-28).

¹ US$ in thousands

² Equity. See details »

³ Total borrowings. See details »

⁴ Operating lease liability. See details »

Feb 28, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	46,238,745)	46,238,745)	÷	58,359,545)	=	0.79	0.79	×	14.75%	=	11.68%
Total borrowings³	11,580,900)	11,580,900)	÷	58,359,545)	=	0.20	0.20	×	3.68% × (1 – 21.00%)	=	0.58%
Operating lease liability⁴	539,900)	539,900)	÷	58,359,545)	=	0.01	0.01	×	3.20% × (1 – 21.00%)	=	0.02%
Total:	58,359,545)					1.00					12.28%

Based on: 10-K (reporting date: 2021-02-28).

¹ US$ in thousands

² Equity. See details »

³ Total borrowings. See details »

⁴ Operating lease liability. See details »

Feb 29, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	29,508,508)	29,508,508)	÷	43,243,508)	=	0.68	0.68	×	14.75%	=	10.06%
Total borrowings³	13,174,800)	13,174,800)	÷	43,243,508)	=	0.30	0.30	×	3.59% × (1 – 21.00%)	=	0.86%
Operating lease liability⁴	560,200)	560,200)	÷	43,243,508)	=	0.01	0.01	×	3.50% × (1 – 21.00%)	=	0.04%
Total:	43,243,508)					1.00					10.96%

Based on: 10-K (reporting date: 2020-02-29).

¹ US$ in thousands

² Equity. See details »

³ Total borrowings. See details »

⁴ Operating lease liability. See details »

Feb 28, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	39,701,259)	39,701,259)	÷	53,711,683)	=	0.74	0.74	×	14.75%	=	10.90%
Total borrowings³	13,560,000)	13,560,000)	÷	53,711,683)	=	0.25	0.25	×	3.67% × (1 – 21.00%)	=	0.73%
Operating lease liability⁴	450,424)	450,424)	÷	53,711,683)	=	0.01	0.01	×	3.67% × (1 – 21.00%)	=	0.02%
Total:	53,711,683)					1.00					11.66%

Based on: 10-K (reporting date: 2019-02-28).

¹ US$ in thousands

² Equity. See details »

³ Total borrowings. See details »

⁴ Operating lease liability. See details »

Feb 28, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	43,687,019)	43,687,019)	÷	54,284,486)	=	0.80	0.80	×	14.75%	=	11.87%
Total borrowings³	10,145,200)	10,145,200)	÷	54,284,486)	=	0.19	0.19	×	3.43% × (1 – 32.70%)	=	0.43%
Operating lease liability⁴	452,267)	452,267)	÷	54,284,486)	=	0.01	0.01	×	3.43% × (1 – 32.70%)	=	0.02%
Total:	54,284,486)					1.00					12.32%

Based on: 10-K (reporting date: 2018-02-28).

¹ US$ in thousands

² Equity. See details »

³ Total borrowings. See details »

⁴ Operating lease liability. See details »

Feb 28, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,322,598)	33,322,598)	÷	43,169,910)	=	0.77	0.77	×	14.75%	=	11.38%
Total borrowings³	9,452,000)	9,452,000)	÷	43,169,910)	=	0.22	0.22	×	3.63% × (1 – 35.00%)	=	0.52%
Operating lease liability⁴	395,311)	395,311)	÷	43,169,910)	=	0.01	0.01	×	3.63% × (1 – 35.00%)	=	0.02%
Total:	43,169,910)					1.00					11.92%

Based on: 10-K (reporting date: 2017-02-28).

¹ US$ in thousands

² Equity. See details »

³ Total borrowings. See details »

⁴ Operating lease liability. See details »

Constellation Brands Inc., economic spread ratio calculation, comparison to benchmarks

	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(2,059,538)	77,619)	(3,166,762)	1,288,017)	(148,359)	(181,841)
Invested capital²	20,491,900)	21,239,800)	21,790,300)	24,890,124)	18,550,367)	17,413,511)
Performance Ratio
Economic spread ratio³	-10.05%	0.37%	-14.53%	5.17%	-0.80%	-1.04%
Benchmarks
Economic Spread Ratio, Competitors⁴
Altria Group Inc.	11.02%	-2.07%	4.27%	-9.65%	—	—
Coca-Cola Co.	3.68%	5.22%	3.01%	3.30%	—	—
Mondelēz International Inc.	-3.72%	-0.71%	-1.87%	-2.32%	—	—
PepsiCo Inc.	4.92%	5.46%	4.09%	5.86%	—	—

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -2,059,538 ÷ 20,491,900 = -10.05%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Constellation Brands Inc. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Constellation Brands Inc., economic profit margin calculation, comparison to benchmarks

	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(2,059,538)	77,619)	(3,166,762)	1,288,017)	(148,359)	(181,841)

Net sales	8,820,700)	8,614,900)	8,343,500)	8,116,000)	7,585,000)	7,331,500)
Add: Increase (decrease) in deferred revenue	118,300)	—)	—)	—)	—)	—)
Adjusted net sales	8,939,000)	8,614,900)	8,343,500)	8,116,000)	7,585,000)	7,331,500)
Performance Ratio
Economic profit margin²	-23.04%	0.90%	-37.95%	15.87%	-1.96%	-2.48%
Benchmarks
Economic Profit Margin, Competitors³
Altria Group Inc.	12.65%	-2.67%	6.78%	-16.37%	—	—
Coca-Cola Co.	6.85%	10.84%	6.90%	6.53%	—	—
Mondelēz International Inc.	-7.53%	-1.52%	-4.31%	-5.28%	—	—
PepsiCo Inc.	3.96%	4.80%	4.07%	5.18%	—	—

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).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -2,059,538 ÷ 8,939,000 = -23.04%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Constellation Brands Inc. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Constellation Brands Inc. (NYSE:STZ)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin