Constellation Brands Inc. (STZ, Financial) filed Quarterly Report for the period ended 2010-11-30.
Constellation Brands Inc. has a market cap of $4.12 billion; its shares were traded at around $19.49 with a P/E ratio of 10.71 and P/S ratio of 1.22. STZ is in the portfolios of Robert Olstein of Olstein Financial Alert Fund, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Pioneer Investments, Mario Gabelli of GAMCO Investors, David Dreman of Dreman Value Management, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC.
The fair value of fixed rate debt is subject to interest rate risk, credit risk and foreign currency risk. The estimated fair value of the Companys total fixed rate debt, including current maturities, was $2,085.8 million and $2,219.4 million as of November 30, 2010, and November 30, 2009, respectively. A hypothetical 1% increase from prevailing interest rates as of November 30, 2010, and November 30, 2009, would have resulted in a decrease in fair value of fixed interest rate long-term debt by $94.0 million and $96.2 million, respectively.
As of November 30, 2010, and November 30, 2009, the Company had outstanding cash flow designated interest rate swap agreements to minimize interest rate volatility. As of November 30, 2010, the swap agreements fix LIBOR interest rates on $500.0 million of the Companys floating LIBOR rate debt at an average rate of 2.9% (exclusive of borrowing margins) through September 1, 2016. As of November 30, 2009, the swap agreements fixed LIBOR interest rates on $1,200.0 million of the Companys floating LIBOR rate debt at an average rate of 4.0% through February 28, 2010. In addition, as of November 30, 2009, the Company had offsetting outstanding undesignated interest rate swap agreements with an absolute notional value of $2,400.0 million. A hypothetical 1% increase from prevailing interest rates as of November 30, 2010, would have increased the fair value of the interest rate swap agreements by $25.7 million. A hypothetical 1% increase from prevailing interest rates as of November 30, 2009, would not have resulted in a significant change in the fair value of the interest rate swap agreements.
In addition to the $2,085.8 million and $2,219.4 million estimated fair value of fixed rate debt outstanding as of November 30, 2010, and November 30, 2009, respectively, the Company also had variable rate debt outstanding (primarily LIBOR-based), certain of which includes a fixed margin. As of November 30, 2010, and November 30, 2009, the estimated fair value of the Companys total variable rate debt, including current maturities, was $1,743.7 million and $1,930.8 million, respectively. Using a sensitivity analysis based on a hypothetical 1% increase in prevailing interest rates over a 12-month period, the approximate increase in cash required for interest as of November 30, 2010, and November 30, 2009, is $36.1 million and $19.3 million, respectively.
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Constellation Brands Inc. has a market cap of $4.12 billion; its shares were traded at around $19.49 with a P/E ratio of 10.71 and P/S ratio of 1.22. STZ is in the portfolios of Robert Olstein of Olstein Financial Alert Fund, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Pioneer Investments, Mario Gabelli of GAMCO Investors, David Dreman of Dreman Value Management, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
As of November 30, 2010, and November 30, 2009, the Company had outstanding foreign currency derivative instruments with a notional value of $1,004.1 million and $1,144.3 million, respectively. Approximately 79% of the Companys total exposures were hedged as of November 30, 2010, including most of the Companys balance sheet exposures and certain of the Companys forecasted transactional exposures for the year ending February 28, 2011. The estimated fair value of the Companys foreign currency derivative instruments was a net asset of $19.9 million and $23.5 million as of November 30, 2010, and November 30, 2009, respectively. Using a sensitivity analysis based on estimated fair value of open contracts using forward rates, if the contract base currency had been 10% weaker as of November 30, 2010, and November 30, 2009, the fair value of open foreign currency contracts would have been decreased by $11.1 million and $37.8 million, respectively. Losses or gains from the revaluation or settlement of the related underlying positions would substantially offset such gains or losses on the derivative instruments.The fair value of fixed rate debt is subject to interest rate risk, credit risk and foreign currency risk. The estimated fair value of the Companys total fixed rate debt, including current maturities, was $2,085.8 million and $2,219.4 million as of November 30, 2010, and November 30, 2009, respectively. A hypothetical 1% increase from prevailing interest rates as of November 30, 2010, and November 30, 2009, would have resulted in a decrease in fair value of fixed interest rate long-term debt by $94.0 million and $96.2 million, respectively.
As of November 30, 2010, and November 30, 2009, the Company had outstanding cash flow designated interest rate swap agreements to minimize interest rate volatility. As of November 30, 2010, the swap agreements fix LIBOR interest rates on $500.0 million of the Companys floating LIBOR rate debt at an average rate of 2.9% (exclusive of borrowing margins) through September 1, 2016. As of November 30, 2009, the swap agreements fixed LIBOR interest rates on $1,200.0 million of the Companys floating LIBOR rate debt at an average rate of 4.0% through February 28, 2010. In addition, as of November 30, 2009, the Company had offsetting outstanding undesignated interest rate swap agreements with an absolute notional value of $2,400.0 million. A hypothetical 1% increase from prevailing interest rates as of November 30, 2010, would have increased the fair value of the interest rate swap agreements by $25.7 million. A hypothetical 1% increase from prevailing interest rates as of November 30, 2009, would not have resulted in a significant change in the fair value of the interest rate swap agreements.
In addition to the $2,085.8 million and $2,219.4 million estimated fair value of fixed rate debt outstanding as of November 30, 2010, and November 30, 2009, respectively, the Company also had variable rate debt outstanding (primarily LIBOR-based), certain of which includes a fixed margin. As of November 30, 2010, and November 30, 2009, the estimated fair value of the Companys total variable rate debt, including current maturities, was $1,743.7 million and $1,930.8 million, respectively. Using a sensitivity analysis based on a hypothetical 1% increase in prevailing interest rates over a 12-month period, the approximate increase in cash required for interest as of November 30, 2010, and November 30, 2009, is $36.1 million and $19.3 million, respectively.
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