Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections NA

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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections NA

This Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those set forth in, or implied by, such forward-looking statements. All statements other than statements of historical fact included in this Form 10-K are forward-looking statements, including without limitation:

*•*The statements under Item 1. “Business” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding:

*◦*our business strategy, future operations, innovation strategy and new products, future financial position, future net sales and expected volume and inventory trends, future marketing spend, future effective tax rates and anticipated tax liabilities, prospects, plans, and objectives of management;

*◦*the anticipated availability of water, agricultural and other raw materials, and packaging materials;

*◦*the COVID-19 pandemic;

*◦*our ESG strategy, sustainability initiatives, environmental stewardship targets, and human capital and DEI objectives and goals;

*◦*the potential impact to supply, production levels, and costs due to global supply chain logistics and transportation;

*◦*expected or potential actions of third parties, including possible changes to laws, rules, and regulations;

*◦*anticipated inflationary pressures and our responses thereto;

*◦*expected purchase accounting allocations;

*◦*the future expected balance of supply and demand for and inventory levels of our products;

*◦*the refinement of our wine and spirits portfolio;

*◦*the Wine and Spirits Divestitures, including potential amounts of contingent consideration;

*◦*the manner, timing, and duration of the share repurchase program and source of funds for share repurchases; and

*◦*the amount and timing of future dividends.

*•*The statements regarding our beer expansion, optimization, and/or construction activities, including anticipated scope, capacity, costs, capital expenditures, timeframes for completion, discussions with government officials in Mexico, and potential future impairment of non-recoverable brewery construction assets and other costs and expenses.

*•*The statements regarding:

*◦*the volatility of the fair value of our investment in Canopy measured at fair value;

*◦*our activities surrounding our investment in Canopy;

*◦*Canopy’s expectations and the transaction with Acreage;

*◦*the timing and source of funds for operating activities and exercises of the November 2018 Canopy Warrants, if any;

*◦*a potential future impairment of our Canopy Equity Method Investment; and

*◦*our future ownership level in Canopy and our future share of Canopy’s reported earnings and losses.

*•*The statements regarding our targeted net leverage ratio.

*•*The statements regarding the future reclassification of net gains from AOCI.

*•*The statements regarding the impact of any potential common stock declassification, including in connection with the Proposal.


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When used in this Form 10-K, the words “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of this Form 10-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. In addition to the risks and uncertainties of ordinary business operations and conditions in the general economy and markets in which we compete, our forward-looking statements contained in this Form 10-K are also subject to the risk, uncertainty, and possible variance from our current expectations regarding:

*•*water, agricultural and other raw material, and packaging material supply, production, and/or shipment difficulties which could adversely affect our ability to supply our customers;

*•*the ability to respond to anticipated inflationary pressures, including reductions in consumer discretionary income and our ability to pass along rising costs through increased selling prices;

*•*the actual impact to supply, production levels, and costs from global supply chain logistics, transportation challenges, wildfires, and severe weather events, due to, among other reasons, actual supply chain and transportation performance and the actual severity and geographical reach of wildfires and severe weather events;

*•*the actual balance of supply and demand for our products and percentage of our portfolio distributed through any particular distributor due to, among other reasons, actual raw material and water supply, actual shipments to distributors, and actual consumer demand;

*•*the actual demand, net sales, channel proportions, and volume trends for our products due to, among other reasons, actual shipments to distributors and actual consumer demand;

*•*beer operations expansion, optimization, and/or construction activities, scope, capacity, costs (including impairments), capital expenditures, and timing due to, among other reasons, market conditions, our cash and debt position, receipt of required regulatory approvals by the expected dates and on the expected terms, results of discussions with government officials in Mexico, the actual amount of non-recoverable brewery construction assets and other costs and expenses, and other factors as determined by management;

*•*the duration and impact of the COVID-19 pandemic, including but not limited to the impact and severity of new variants, vaccine efficacy and immunization rates, the closure of non-essential businesses, which may include our manufacturing facilities, and other associated governmental containment actions, and the increase in cyber-security attacks that have occurred while non-production employees work remotely;

*•*the impact of the military conflict in Ukraine and associated geopolitical tensions and responses, including on inflation, supply chains, commodities, energy, and cyber-security;

*•*the amount, timing, and source of funds for any share repurchases or future exercises of the November 2018 Canopy Warrants, if any, which may vary due to market conditions; our cash and debt position; the impact of the beer operations expansion, optimization, and/or construction activities; the impact of our investment in Canopy; and other factors as determined by management from time to time;

*•*the amount and timing of future dividends which are subject to the determination and discretion of our Board of Directors and may be impacted if our ability to use cash flow to fund dividends is affected by unanticipated increases in total net debt, we are unable to generate cash flow at anticipated levels, or we fail to generate expected earnings;

*•*the fair value of our investment in Canopy due to market and economic conditions in Canopy’s markets and business locations;

*•*the accuracy of management’s projections relating to the Canopy investment due to Canopy’s actual results and market and economic conditions;

*•*the timeframe and amount of any potential future impairment of our Canopy Equity Method Investment if our expectations about Canopy’s prospective results and cash flows decline which could be influenced by various factors including adverse market conditions or if Canopy records a significant impairment of goodwill or intangible assets or other long-lived assets, makes significant asset sales, or has changes in senior management;

*•*the amount of contingent consideration, if any, received in the Wine and Spirits Divestitures which will depend on actual future brand performance;


Constellation Brands, Inc. FY 2022 Form 10-K			#WORTHREACHINGFOR I ii

*•*the expected impacts of wine and spirits portfolio refinement activities;

*•*purchase accounting with respect to any transaction, or the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;

any impact of U.S. federal laws on Canopy Strategic Transactions or upon the implementation of such Canopy Strategic Transactions, or the impact of any Canopy Strategic Transaction upon our future ownership level in Canopy or our future share of Canopy’s reported earnings and losses;

*•*whether a definitive agreement in relation to the Proposal will be entered into, what the ultimate terms of any such agreement may be, whether the required stockholder approval would be obtained, and the impact of any such transaction on our shares outstanding and associated financial metrics; and

*•*our targeted net leverage ratio due to market conditions, our ability to generate cash flow at expected levels, and our ability to generate expected earnings.

Additional important factors that could cause actual results to differ materially from those set forth in or implied by our forward-looking statements contained in this Form 10-K are those described in Item 1A. “Risk Factors” and elsewhere in this report and in our other filings with the SEC.

Market positions and industry data discussed in this Form 10-K are as of calendar 2021 and have been obtained or derived from industry and government publications and our estimates. The industry and government publications include: Beer Marketers Insights; Beverage Information Group; Growers Network; Impact Databank Review and Forecast; International Wine and Spirits Research (IWSR); IRI; Beer Institute; and National Alcohol Beverage Control Association. We have not independently verified the data from the industry and government publications. Unless otherwise noted, all references to market positions are based on equivalent unit volume.


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Defined Terms

Unless the context otherwise requires, the terms “Company,” “CBI,” “we,” “our,” or “us” refer to Constellation Brands, Inc. and its subsidiaries. We use terms in this Form 10-K and in our Notes that are specific to us or are abbreviations that may not be commonly known or used.


Term						Meaning

$						U.S. dollars
2.25% July 2021 Senior Notes						$1,000.0 million principal amount of 2.25% senior notes issued in July 2021
2.65% November 2017 Senior Notes						$700.0 million principal amount of 2.65% senior notes issued in November 2017 and redeemed in August 2021, prior to maturity
2.70% May 2017 Senior Notes						$500.0 million principal amount of 2.70% senior notes issued in May 2017 and redeemed in August 2021, prior to maturity
2018 Authorization						authority to repurchase up to $3.0 billion of our Class A Stock and Class B Stock, authorized in January 2018 by our Board of Directors

2019 Term Credit Agreement						a term loan credit agreement, dated as of June 28, 2019, consisting of the Five-Year Term Facility, now superseded by the 2020 Term Credit Agreement and the June 2021 Term Credit Agreement
2020 Credit Agreement						ninth amended and restated credit agreement, dated as of March 26, 2020, provided for an aggregate revolving credit facility of $2.0 billion, now superseded by the 2022 Credit Agreement
2020 Restatement Agreement						restatement agreement, dated as of March 26, 2020, that amended and restated our eighth amended and restated credit agreement, dated as of September 14, 2018, which was our then-existing senior credit facility
2020 Term Credit Agreement						amended and restated term credit agreement, dated as of March 26, 2020, now repaid in full
2020 Term Loan Restatement Agreement						restatement agreement, dated as of March 26, 2020, that amended and restated the 2019 Term Credit Agreement, resulting in the March 2020 Term Credit Agreement
2020 U.S. wildfires						significant wildfires that broke out in California, Oregon, and Washington states which affected the 2020 U.S. grape harvest
2021 Authorization						authority to repurchase up to $2.0 billion of our Class A Stock and Class B Stock, authorized in January 2021 by our Board of Directors
2022 Credit Agreement						tenth amended and restated credit agreement, dated as of April 14, 2022, provides for an aggregate revolving credit facility of $2.25 billion
2022 Restatement Agreement						restatement agreement, dated as of April 14, 2022, that amended and restated the 2020 Credit Agreement, which was our then-existing senior credit facility as of February 28, 2022
2022 Term Credit Agreement						March 2020 Term Credit Agreement, inclusive of amendments dated as of June 10, 2021, and April 14, 2022
3-tier						distribution channel where products are sold to a distributor (wholesaler) who then sells to a retailer; the retailer sells the products to a consumer
3-tier eCommerce						digital commerce experience for our consumers to purchase beverage alcohol from retailers
ABA						alternative beverage alcohol
Acreage						Acreage Holdings, Inc.
Acreage Financial Instrument						a call option for Canopy to acquire 70% of the shares of Acreage at a fixed exchange ratio and 30% at a floating exchange ratio
Acreage Transaction						Canopy’s intention to acquire Acreage upon U.S. federal cannabis legalization, subject to certain conditions
Administrative Agent						Bank of America, N.A., as administrative agent for applicable senior credit facilities and term credit agreements


Constellation Brands, Inc. FY 2022 Form 10-K			#WORTHREACHINGFOR I iv


Term						Meaning

AOCI						accumulated other comprehensive income (loss)
ASR						accelerated share repurchase agreement with a third-party financial institution
Austin Cocktails						we made an initial investment in the Austin Cocktails business and subsequently acquired the remaining ownership interest
Ballast Point Divestiture						sale of Ballast Point craft beer business, including a number of its associated production facilities and brewpubs

Black Velvet Divestiture						sale of Black Velvet Canadian Whisky business and the brand’s associated production facility, along with a subset of Canadian whisky brands produced at that facility, and related inventory
BRG(s)						business resource group(s)
C$						Canadian dollars
Canopy						we made an investment in Canopy Growth Corporation, an Ontario, Canada-based public company
Canopy Debt Securities						convertible debt securities issued by Canopy
Canopy Equity Method Investment						November 2017 Canopy Investment, November 2018 Canopy Investment, and May 2020 Canopy Investment, collectively
Canopy Strategic Transaction(s)						any potential acquisition, divestiture, investment, or other similar transaction made by Canopy, including but not limited to the Acreage Transaction
CARES Act						Coronavirus Aid, Relief, and Economic Security Act

CB International						CB International Finance S.à r.l., a wholly-owned subsidiary of ours
CDC						Centers for Disease Control and Prevention
Class 1 Stock						our Class 1 Convertible Common Stock, par value $0.01 per share
Class A Stock						our Class A Common Stock, par value $0.01 per share
Class B Stock						our Class B Convertible Common Stock, par value $0.01 per share
Coca-Cola						The Coca-Cola Company
CODM						chief operating decision maker
Comparable Adjustments						certain items affecting comparability that have been excluded by management
Concentrate Business Divestiture						sale of certain brands used in our concentrates and high-color concentrate business, and certain intellectual property, inventory, interests in certain contracts, and other assets
Copper & Kings						Copper & Kings American Brandy Company, acquired by us
CPG						consumer packaged goods
Crown						Crown Imports LLC, a wholly-owned subsidiary of ours
CSR						corporate social responsibility
DEI						diversity, equity, and inclusion
Depletions						represent U.S. domestic distributor shipments of our respective branded products to retail customers, based on third-party data
DGCL						General Corporation Law of the State of Delaware
DTC						direct-to-consumer; a digital commerce experience for consumers to purchase directly from brand websites with inventory coming straight from the supplier
EHS						Environmental, Health, & Safety
Empathy Wines						Empathy Wines business, including a digitally-native wine brand, acquired by us
Employee Stock Purchase Plan						the Company’s employee stock purchase plan, established in 1989, under which 9,000,000 shares of Class A Stock may be issued
ERP						enterprise resource planning system
ESG						environmental, social, and governance
Exchange Act						Securities Exchange Act of 1934, as amended


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Term						Meaning

FASB						Financial Accounting Standards Board
Fiscal 2020						the Company’s fiscal year ended February 29, 2020
Fiscal 2021						the Company’s fiscal year ended February 28, 2021
Fiscal 2022						the Company’s fiscal year ended February 28, 2022
Fiscal 2023						the Company’s fiscal year ending February 28, 2023
Fiscal 2024						the Company’s fiscal year ending February 29, 2024
Fiscal 2025						the Company’s fiscal year ending February 28, 2025
Fiscal 2026						the Company’s fiscal year ending February 28, 2026
Fiscal 2027						the Company’s fiscal year ending February 28, 2027
Five-Year Term Facility						a five-year term loan facility under the 2022 Term Credit Agreement
Form 10-K						this Annual Report on Form 10-K for Fiscal 2022 unless otherwise specified
Gallo						E. & J. Gallo Winery
GHG						greenhouse gas
GILTI						global intangible low-taxed income
Glass Plant						glass production plant in Nava operated through an equally-owned joint venture with Owens-Illinois

June 2019 Warrant Modification						June 2019 modification of the terms of the warrants and certain other rights originally obtained in November 2018 which gave us the option to purchase 139.7 million common shares of Canopy
June 2019 Warrant Modification Loss						our share of Canopy’s additional loss resulting from the June 2019 Warrant Modification
June 2021 Term Credit Agreement						March 2020 Term Credit Agreement, inclusive of amendment dated as of June 10, 2021
Lender						Bank of America, N.A., as lender for the term credit agreement
LIBOR						London Interbank Offered Rate
Lingua Franca						Lingua Franca, LLC business, acquired by us
Long-Term Stock Incentive Plan						a stockholder-approved omnibus incentive plan that provides the ability to grant various types of equity and cash awards to eligible plan participants
March 2020 Term Credit Agreement						amended and restated term loan credit agreement, dated as of March 26, 2020, that provided for aggregate facilities of $491.3 million, consisting of the Five-Year Term Facility
May 2020 Canopy Investment						May 2020 exercise of the November 2017 Canopy Warrants at an exercise price of C$12.98 per warrant share
MD&A						Management’s Discussion and Analysis of Financial Condition and Results of Operations under Item 7. of this Form 10-K
Mexicali Brewery						suspended brewery construction project located in Mexicali, Baja California, Mexico
Mexico Beer Projects						expansion, optimization, and/or construction activities at the Obregon Brewery, Nava Brewery, and Southeast Mexico Brewery
Mission Bell						Mission Bell Winery in Madera, California
M&T						Manufacturers and Traders Trust Company
My Favorite Neighbor						we made an initial investment in My Favorite Neighbor, LLC and subsequently acquired the remaining ownership interest
NA						not applicable
Nasdaq						The Nasdaq Global Select Market
Nava						Nava, Coahuila, Mexico
Nava Brewery						brewery located in Nava


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Term						Meaning

Nelson’s Green Brier						we made an initial investment in Nelson’s Green Brier Distillery, LLC and subsequently increased our ownership interest
Net sales						gross sales less promotions, returns and allowances, and excise taxes
NM						not meaningful
Nobilo Wine Divestiture						sale of New Zealand-based Nobilo Wine brand and certain related assets
Note(s)						notes to the consolidated financial statements under Item 8. of this Form 10-K
November 2017 Canopy Investment						our initial investment for 18.9 million common shares of Canopy
November 2017 Canopy Warrants						warrants which gave us the option to purchase 18.9 million common shares of Canopy, exercised May 1, 2020
November 2018 Canopy Investment						our incremental investment for 104.5 million common shares of Canopy
November 2018 Canopy Transaction						November 2018 Canopy Investment and the purchase by us of the November 2018 Canopy Warrants, collectively
November 2018 Canopy Warrants						Tranche A Warrants, Tranche B Warrants, and Tranche C Warrants, collectively
NPD						new product development
NYSE						New York Stock Exchange
Obregon						Obregon, Sonora, Mexico
Obregon Brewery						brewery located in Obregon
OCI						other comprehensive income (loss)
Owens-Illinois						O-I Glass, Inc., the ultimate parent of the company with which we have an equally-owned joint venture to operate the Glass Plant
Paul Masson Divestiture						sale of Paul Masson Grande Amber Brandy brand, related inventory, and interests in certain contracts

Proposal						non-binding proposal from the Sands family and entities controlled by members of the Sands family to declassify our common stock
Proxy Statement						Proxy Statement for Fiscal 2022 to be issued in connection with the 2022 Annual Meeting of Stockholders of our Company
RTD						ready-to-drink
Scope 1						direct GHG emissions from sources that are owned or controlled by the company, such as emissions associated with furnaces or vehicles
Scope 2						indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling
SEC						Securities and Exchange Commission
Securities Act						Securities Act of 1933, as amended
SKU						stock-keeping unit, a scannable bar code, most often seen printed on product labels in a retail store
SOFR						secured overnight financing rate administered by the Federal Reserve Bank of New York
Southeast Mexico Brewery						a new brewery intended to be located in Southeast Mexico in the state of Veracruz
SOX						Section 404 of the Sarbanes-Oxley Act of 2002
TCJ Act						Tax Cuts and Jobs Act
Term Loan Restatement Agreement						restatement agreement, dated as of March 26, 2020, that amended and restated our term credit agreement dated as of September 14, 2018, resulting in the 2020 Term Credit Agreement
THC						tetrahydrocannabinol
Tranche A Warrants						warrants which give us the option to purchase 88.5 million common shares of Canopy expiring November 1, 2023


Constellation Brands, Inc. FY 2022 Form 10-K			#WORTHREACHINGFOR I vii


Term						Meaning

Tranche B Warrants						warrants which give us the option to purchase 38.4 million common shares of Canopy expiring November 1, 2026
Tranche C Warrants						warrants which give us the option to purchase 12.8 million common shares of Canopy expiring November 1, 2026
TSX						Toronto Stock Exchange
U.S.						United States of America
U.S. GAAP						generally accepted accounting principles in the U.S.
VWAP Exercise Price						volume-weighted average of the closing market price of Canopy’s common shares on the TSX for the five trading days immediately preceding the exercise date
WHO						World Health Organization
Wine and Spirits Divestiture						sale of a portion of our wine and spirits business, including lower-margin, lower-growth wine and spirits brands, related inventory, interests in certain contracts, wineries, vineyards, offices, and facilities
Wine and Spirits Divestitures						Wine and Spirits Divestiture and the Nobilo Wine Divestiture, collectively


Constellation Brands, Inc. FY 2022 Form 10-K			#WORTHREACHINGFOR I viii


PART I			ITEM 1. BUSINESS			Table of Contents

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