Item 8. Financial Statements and Supplementary Data

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 28, 2025

									Page
Management’s Annual Report on Internal Control Over Financial Reporting									56
Reports of Independent Registered Public Accounting Firm (PCAOB ID 185)									57
Consolidated Balance Sheets									61
Consolidated Statements of Comprehensive Income (Loss)									62
Consolidated Statements of Changes in Stockholders’ Equity									63
Consolidated Statements of Cash Flows									64
Notes to Consolidated Financial Statements
			1.			Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies			66
			2.			Acquisitions, Divestitures, and Restructuring			71
			3.			Inventories			74
			4.			Prepaid Expenses and Other			74
			5.			Property, Plant, and Equipment			74
			6.			Derivative Instruments			75
			7.			Fair Value of Financial Instruments			78
			8.			Goodwill			82
			9.			Intangible Assets			83
			10.			Other Assets			83
			11.			Other Accrued Expenses and Liabilities			85
			12.			Borrowings			85
			13.			Income Taxes			89
			14.			Deferred Income Taxes and Other Liabilities			93
			15.			Leases			93
			16.			Commitments and Contingencies			95
			17.			Stockholders' Equity			97
			18.			Stock-Based Employee Compensation			99
			19.			Net Income (Loss) Per Common Share Attributable to CBI			102
			20.			Accumulated Other Comprehensive Income (Loss)			103
			21.			Significant Customers and Concentration of Credit Risk			104
			22.			Business Segment Information			105
			23.			Selected Quarterly Financial Information (unaudited)			105

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Management’s Annual Report on Internal Control Over Financial Reporting

Management of Constellation Brands, Inc. and subsidiaries (the Company) is responsible for establishing and maintaining an adequate system of internal control over financial reporting. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time.

Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based on that evaluation, management concluded that the Company’s internal control over financial reporting was effective as of February 28, 2025.

The effectiveness of the Company’s internal control over financial reporting has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Constellation Brands, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Constellation Brands, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of February 28, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 28, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of February 28, 2025 and February 29, 2024, the related consolidated statements of comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 28, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated April 23, 2025 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Rochester, New York

April 23, 2025

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Constellation Brands, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Constellation Brands, Inc. and subsidiaries (the Company) as of February 28, 2025 and February 29, 2024, the related consolidated statements of comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 28, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2025 and February 29, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended February 28, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of February 28, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 23, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting*.*

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Unrecognized tax benefits

As discussed in Notes 1 and 13 to the consolidated financial statements, the Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination. The Company has recorded unrecognized tax benefits of $318.9 million as of February 28, 2025.

We identified the evaluation of certain of the Company’s unrecognized tax benefits as a critical audit matter. Specifically, complex auditor judgment, including the involvement of tax and valuation

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

professionals with specialized skills and knowledge, was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of its tax positions.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to evaluate uncertain tax positions. This included controls related to the interpretation of tax law, its application in the liability estimation process, and the review of activity that could result in changes to the Company’s unrecognized tax benefits. We involved tax professionals with specialized skills and knowledge, who assisted in evaluating the Company’s interpretation of tax law and tax authority rulings and in performing an independent assessment of certain of the Company’s tax positions and the amount of unrecognized tax benefit, if any, and comparing the results to the Company’s assessment. We also involved valuation professionals with specialized skills and knowledge, who assisted in assessing certain transfer pricing studies for compliance with applicable laws and regulations.

Fair value of the Wine and Spirits reporting unit

As discussed in Notes 1, 7, and 8 to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis, or more frequently, if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During the three months ended August 31, 2024, in connection with negative trends within the Wine and Spirits business, the Company updated its outlook for the Wine and Spirits reporting unit. The updated forecast indicated it was more likely than not that the fair value of the reporting unit might be below its carrying value. Accordingly, the Company performed an interim quantitative assessment for goodwill impairment using a discounted cash flow model to estimate the fair value of this reporting unit. The assessment indicated that the carrying value of this reporting unit exceeded its estimated fair value, resulting in a $2,250.0 million goodwill impairment. During the three months ended February 28, 2025, the Company performed its annual impairment analysis and updated its estimate of the fair value of the Wine and Spirits reporting unit using a discounted cash flow model to reflect the latest financial projections and an increase in the discount rate. As a result, the Company recognized an additional $490.7 million goodwill impairment charge to write-off the remaining goodwill balance for the Wine and Spirits reporting unit as of February 28, 2025.

We identified the evaluation of the fair value of the Wine and Spirits reporting unit as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate the key assumptions used in the discounted cash flow model, including the discount rate, projected revenue growth rates and operating margins, and long-term growth rate. Changes to these key assumptions could have a significant impact on the fair value of the reporting unit. Additionally, specialized skills and knowledge were required to assess the discount rate and long-term growth rate assumptions used in determining the fair value.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment assessment process, including controls related to the determination of the key assumptions used to estimate the fair value of the reporting unit. We evaluated the Company’s projected revenue growth rates and operating margins by comparing them to the Company’s historical performance and to relevant market data. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s long-term growth rate by comparing it to market data for long-term industry and economic growth expectations

• evaluating the Company’s discount rate by comparing it to a range of discount rates that were independently developed using publicly available market data for comparable companies.

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

Rochester, New York

April 23, 2025

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

			February 28, 2025						February 29, 2024
ASSETS
Current assets:
Cash and cash equivalents			$	68.1					$	152.4
Accounts receivable			736.5						832.8
Inventories			1,437.2						2,078.3
Prepaid expenses and other			561.1						666.0
Assets held for sale			913.5						—
Total current assets			3,716.4						3,729.5
Property, plant, and equipment			7,409.8						8,055.2
Goodwill			5,126.8						7,980.3
Intangible assets			2,532.3						2,731.7
Deferred income taxes			1,805.3						2,055.0
Other assets			1,061.7						1,140.0
Total assets			$	21,652.3					$	25,691.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings			$	806.7					$	241.4
Current maturities of long-term debt			1,402.0						956.8
Accounts payable			939.8						1,107.1
Other accrued expenses and liabilities			886.7						836.4
Total current liabilities			4,035.2						3,141.7
Long-term debt, less current maturities			9,289.0						10,681.1
Deferred income taxes and other liabilities			1,193.3						1,804.3
Total liabilities			14,517.5						15,627.1
Commitments and contingencies (Note 16)
CBI stockholders’ equity:
Preferred Stock, $0.01 par value – Authorized, 1,000,000 shares; Issued, none			—						—
Class A Stock, $0.01 par value – Authorized, 322,000,000 shares; Issued, 212,698,298 shares and 212,698,298 shares, respectively			2.1						2.1
Class 1 Stock, $0.01 par value – Authorized, 25,000,000 shares; Issued, 27,037 shares and 23,661 shares, respectively			—						—
Additional paid-in capital			2,144.6						2,047.3
Retained earnings			12,603.4						13,417.2
Accumulated other comprehensive income (loss)			(662.7)						376.8
Class A Stock in treasury, at cost, 34,505,141 shares and 29,809,881 shares, respectively			(7,205.4)						(6,100.3)
Total CBI stockholders’ equity			6,882.0						9,743.1
Noncontrolling interests			252.8						321.5
Total stockholders’ equity			7,134.8						10,064.6
Total liabilities and stockholders’ equity			$	21,652.3					$	25,691.7

The accompanying notes are an integral part of these statements.

Constellation Brands, Inc. FY 2025 Form 10-K			#WORTHREACHINGFOR I 61

PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, except per share data)

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
Sales			$	10,956.9					$	10,711.0					$	10,177.2
Excise taxes			(748.2)						(749.2)						(724.6)
Net sales			10,208.7						9,961.8						9,452.6
Cost of product sold			(4,894.1)						(4,944.3)						(4,683.6)
Gross profit			5,314.6						5,017.5						4,769.0
Selling, general, and administrative expenses			(1,950.0)						(1,832.7)						(1,928.1)
Goodwill and intangible assets impairment			(2,797.7)						—						(13.0)
Assets held for sale impairment			(478.0)						—						—
Gain (loss) on sale of business			266.0						(15.1)						15.0
Operating income (loss)			354.9						3,169.7						2,842.9
Income (loss) from unconsolidated investments			(26.3)						(511.8)						(2,036.4)
Interest expense, net			(411.4)						(436.1)						(422.9)
Income (loss) before income taxes			(82.8)						2,221.8						383.6
(Provision for) benefit from income taxes			51.7						(456.6)						(422.1)
Net income (loss)			(31.1)						1,765.2						(38.5)
Net (income) loss attributable to noncontrolling interests			(50.3)						(37.8)						(32.5)
Net income (loss) attributable to CBI			$	(81.4)					$	1,727.4					$	(71.0)
Net income (loss) per common share attributable to CBI:
Basic – Class A Stock			$	(0.45)					$	9.42					$	(0.11)
Basic – Class B Stock			NA						NA						$	(2.02)
Diluted – Class A Stock			$	(0.45)					$	9.39					$	(0.11)
Diluted – Class B Stock			NA						NA						$	(2.02)
Weighted average common shares outstanding:
Basic – Class A Stock			181.476						183.307						169.337
Basic – Class B Stock			NA						NA						23.206
Diluted – Class A Stock			181.476						183.959						169.337
Diluted – Class B Stock			NA						NA						23.206
Cash dividends declared per common share:
Class A Stock			$	4.04					$	3.56					$	3.20
Class B Stock			NA						NA						$	2.16

Comprehensive income (loss):
Net income (loss)			$	(31.1)					$	1,765.2					$	(38.5)
Other comprehensive income (loss), net of income tax effect:
Foreign currency translation adjustments			(818.7)						293.1						274.6
Unrealized gain (loss) on cash flow hedges			(256.6)						70.0						188.6
Pension/postretirement adjustments			2.2						1.2						0.1
Share of other comprehensive income (loss) of equity method investments			(10.6)						—						5.1
Other comprehensive income (loss), net of income tax effect			(1,083.7)						364.3						468.4
Comprehensive income (loss)			(1,114.8)						2,129.5						429.9
Comprehensive (income) loss attributable to noncontrolling interests			(6.1)						(53.8)						(59.7)
Comprehensive income (loss) attributable to CBI			$	(1,120.9)					$	2,075.7					$	370.2

The accompanying notes are an integral part of these statements.

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions)

			Stock												Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Treasury Stock						Non-controlling Interests						Total
			Class A						Class B
Balance at February 28, 2022			$	1.9					$	0.3					$	1,808.9					$	14,505.4					$	(412.7)					$	(4,171.9)					$	315.9					$	12,047.8
Comprehensive income (loss):
Net income (loss)			—						—						—						(71.0)						—						—						32.5						(38.5)
Other comprehensive income (loss), net of income tax effect			—						—						—						—						441.2						—						27.2						468.4
Comprehensive income (loss)																																													429.9
Reclassification payment			—						—						—						(1,500.0)						—						—						—						(1,500.0)
Retirement of treasury shares			—						(0.1)						—						(2.2)						—						2.3						—						—
Conversion of common shares			0.2						(0.2)						—						—						—						—						—						—
Repurchase of shares			—						—						—						—						—						(1,700.2)						—						(1,700.2)
Dividends declared			—						—						—						(588.3)						—						—						—						(588.3)
Noncontrolling interest distributions			—						—						—						—						—						—						(55.3)						(55.3)
Shares issued under equity compensation plans			—						—						25.7						—						—						5.9						—						31.6
Stock-based compensation			—						—						68.4						—						—						—						—						68.4
Balance at February 28, 2023			2.1						—						1,903.0						12,343.9						28.5						(5,863.9)						320.3						8,733.9
Comprehensive income (loss):
Net income (loss)			—						—						—						1,727.4						—						—						37.8						1,765.2
Other comprehensive income (loss), net of income tax effect			—						—						—						—						348.3						—						16.0						364.3
Comprehensive income (loss)																																													2,129.5
Repurchase of shares			—						—						—						—						—						(249.7)						—						(249.7)
Dividends declared			—						—						—						(654.1)						—						—						—						(654.1)
Noncontrolling interest distributions			—						—						—						—						—						—						(52.6)						(52.6)
Shares issued under equity compensation plans			—						—						80.6						—						—						13.3						—						93.9
Stock-based compensation			—						—						63.7						—						—						—						—						63.7
Balance at February 29, 2024			2.1						—						2,047.3						13,417.2						376.8						(6,100.3)						321.5						10,064.6
Comprehensive income (loss):
Net income (loss)			—						—						—						(81.4)						—						—						50.3						(31.1)
Other comprehensive income (loss), net of income tax effect			—						—						—						—						(1,039.5)						—						(44.2)						(1,083.7)
Comprehensive income (loss)																																													(1,114.8)
Repurchase of shares			—						—						—						—						—						(1,123.8)						—						(1,123.8)
Dividends declared			—						—						—						(732.4)						—						—						—						(732.4)
Noncontrolling interest distributions			—						—						—						—						—						—						(57.5)						(57.5)
Shares issued under equity compensation plans			—						—						33.5						—						—						18.7						—						52.2
Stock-based compensation			—						—						71.9						—						—						—						—						71.9
Purchase of noncontrolling interest			—						—						(8.1)						—						—						—						(17.3)						(25.4)
Balance at February 28, 2025			$	2.1					$	—					$	2,144.6					$	12,603.4					$	(662.7)					$	(7,205.4)					$	252.8					$	7,134.8

The accompanying notes are an integral part of these statements.

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)
			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)			$	(31.1)					$	1,765.2					$	(38.5)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Unrealized net (gain) loss on securities measured at fair value			47.9						85.4						45.9
Deferred tax provision (benefit)			(210.3)						147.9						207.8
Depreciation			445.7						427.9						383.8
Stock-based compensation			72.2						63.6						68.5
Equity in (earnings) losses of equity method investees and related activities, net of distributed earnings			(5.4)						321.2						971.8
Noncash lease expense			112.4						91.3						89.3
Amortization of debt issuance costs and loss on extinguishment of debt			10.4						11.7						34.0
Equity method investments impairment			8.7						136.1						1,060.3
Long-lived assets impairment			—						—						53.5
Assets held for sale impairment			478.0						—						—
(Gain) loss on sale of business			(266.0)						15.1						(15.0)
Gain (loss) on settlement of Pre-issuance hedge contracts			—						1.9						20.7
Net gain in connection with Exchangeable Shares			(7.2)						—						—
Goodwill and intangible assets impairment			2,797.7						—						13.0
Change in operating assets and liabilities, net of effects from purchase and sale of business:
Accounts receivable			90.3						73.2						(3.9)
Inventories			(152.2)						(182.3)						(356.4)
Prepaid expenses and other current assets			(89.4)						(76.5)						197.9
Accounts payable			101.5						24.7						114.9
Deferred revenue			(35.5)						(11.0)						12.8
Other accrued expenses and liabilities			(48.9)						(115.9)						(239.8)
Other			(166.6)						0.5						136.3
Total adjustments			3,183.3						1,014.8						2,795.4
Net cash provided by (used in) operating activities			3,152.2						2,780.0						2,756.9
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, and equipment			(1,214.1)						(1,269.1)						(1,035.4)
Purchase of business, net of cash acquired			(158.7)						(7.5)						(37.1)
Investments in equity method investees and securities			(35.0)						(34.6)						(30.8)
Proceeds from sale of assets			35.5						21.9						6.7
Proceeds from sale of business			409.2						5.4						96.7
Other investing activities			(11.7)						(2.0)						0.5
Net cash provided by (used in) investing activities			(974.8)						(1,285.9)						(999.4)

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CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)
			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt			—						1,144.4						3,344.9
Principal payments of long-term debt			(957.0)						(809.7)						(2,159.7)
Net proceeds from (repayments of) short-term borrowings			565.3						(923.9)						842.3
Dividends paid			(731.8)						(653.8)						(587.7)
Purchases of treasury stock			(1,123.8)						(249.7)						(1,700.2)
Proceeds from shares issued under equity compensation plans			73.8						104.5						42.4
Payments of minimum tax withholdings on stock-based payment awards			(13.8)						(11.2)						(10.4)
Payments of debt issuance, debt extinguishment, and other financing costs			(0.1)						(7.7)						(36.2)
Distributions to noncontrolling interests			(57.5)						(52.6)						(55.3)
Payment of contingent consideration			(0.7)						(14.9)						—
Purchase of noncontrolling interest			(16.2)						—						—
Payment to holders of Class B Stock in connection with the Reclassification			—						—						(1,500.0)
Net cash provided by (used in) financing activities			(2,261.8)						(1,474.6)						(1,819.9)
Effect of exchange rate changes on cash and cash equivalents			0.1						(0.6)						(3.5)
Net increase (decrease) in cash and cash equivalents			(84.3)						18.9						(65.9)
Cash and cash equivalents, beginning of year			152.4						133.5						199.4
Cash and cash equivalents, end of year			$	68.1					$	152.4					$	133.5
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year
Interest, net of interest capitalized			$	416.1					$	418.6					$	386.3
Income taxes, net of refunds received			$	197.1					$	333.5					$	129.7
Noncash investing and financing activities
Additions to property, plant, and equipment			$	143.1					$	269.6					$	183.3
Purchase of noncontrolling interest			$	9.2					$	—					$	—

The accompanying notes are an integral part of these statements.

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CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 28, 2025

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business

We operate primarily in the beverage alcohol industry with operations in the U.S., Mexico, New Zealand, and Italy producing a powerful portfolio of consumer-connected, high-end imported beer brands, and higher-end wine and spirits brands.

Basis of presentation

Principles of consolidation

Our consolidated financial statements include our accounts and our majority-owned and controlled domestic and foreign subsidiaries. In addition, we have an equally-owned joint venture with Owens-Illinois. The joint venture owns and operates a state-of-the-art glass production plant which provides bottles exclusively for the Nava Brewery. We have determined that we are the primary beneficiary of this variable interest entity and accordingly, the results of operations of the joint venture are reported in the Beer segment and are included in our consolidated results of operations. All intercompany accounts and transactions are eliminated in consolidation.

Reclassification

We reclassified equity method investments to other assets on our consolidated balance sheet as of February 29, 2024, to conform with current year presentation.

Equity method investments

If we are not required to consolidate our investment in another entity, we use the equity method when we (i) can exercise significant influence over the other entity and (ii) hold common stock and/or in-substance common stock of the other entity. Under the equity method, investments are carried at cost, plus or minus our equity in the increases and decreases in the investee’s net assets after the date of acquisition. We monitor our equity method investments for factors indicating other-than-temporary impairment. Dividends received from the investee reduce the carrying amount of the investment.

Management’s use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Summary of significant accounting policies

Revenue recognition

Our revenue (referred to in our financial statements as “sales”) consists primarily of the sale of beer, wine, and spirits domestically in the U.S. Sales of products are for cash or otherwise agreed-upon credit terms. Our payment terms vary by location and customer, however, the time period between when revenue is recognized and when payment is due is not significant. Our customers consist primarily of wholesale distributors. Our revenue generating activities have a single performance obligation and are recognized at the point in time when control transfers and our obligation has been fulfilled, which is when the related goods are shipped or delivered to the customer, depending upon the method of distribution, and shipping terms. We have elected to treat shipping as a fulfillment activity. Revenue is measured as the amount of consideration we expect to receive in exchange for the sale of our product. Our sales terms do not allow for a right of return except for matters related to any manufacturing defects on our part. Amounts billed to customers for shipping and handling are included in sales.

As noted, the majority of our revenues are generated from the domestic sale of beer, wine, and spirits to wholesale distributors in the U.S. Our other revenue generating activities include the export of certain of our

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products to select international markets, as well as the sale of our products through state alcohol beverage control agencies, on-premise, retail locations in certain markets, and 3-tier eCommerce and DTC channels. We have evaluated these other revenue generating activities under the disaggregation disclosure criteria and concluded that they are immaterial for separate disclosure. See Note 22 for disclosure of net sales by product type.

Sales reflect reductions attributable to consideration given to customers in various customer incentive programs, including pricing discounts on single transactions, volume discounts, promotional and advertising allowances, coupons, and rebates. This variable consideration is recognized as a reduction of the transaction price based upon expected amounts at the time revenue for the corresponding product sale is recognized. For example, customer promotional discount programs are entered into with certain distributors for certain periods of time. The amount ultimately reimbursed to distributors is determined based upon agreed-upon promotional discounts which are applied to distributors’ sales to retailers. Other common forms of variable consideration include volume rebates for meeting established sales targets, and coupons and mail-in rebates offered to the consumer. The determination of the reduction of the transaction price for variable consideration requires that we make certain estimates and assumptions that affect the timing and amounts of revenue and liabilities recognized. We estimate this variable consideration by taking into account factors such as the nature of the promotional activity, historical information, and current trends, availability of actual results and expectations of customer and consumer behavior.

Excise taxes remitted to tax authorities are government-imposed excise taxes primarily on our beverage alcohol products. Excise taxes are shown on a separate line item as a reduction of sales and are recognized in our results of operations when the related product sale is recognized. Excise taxes are recognized as a current liability in other accrued expenses and liabilities, with the liability subsequently reduced when the taxes are remitted to the tax authority.

Cost of product sold

The types of costs included in cost of product sold are raw materials, packaging materials, manufacturing costs, plant administrative support and overheads, and freight and warehouse costs (including distribution network costs). Distribution network costs include inbound freight charges and outbound shipping and handling costs, purchasing and receiving costs, inspection costs, and warehousing and internal transfer costs.

Selling, general, and administrative expenses

The types of costs included in selling, general, and administrative expenses consist predominately of advertising and non-manufacturing administrative and overhead costs. We expense advertising (hereafter referred to as “marketing”) costs as incurred, shown, or distributed. Marketing expense for the years ended February 28, 2025, February 29, 2024, and February 28, 2023, was $931.2 million, $853.5 million, and $860.8 million, respectively.

Foreign currency translation

The functional currency of our foreign subsidiaries is generally the respective local currency. The translation from the applicable foreign currencies to U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate for the period. The resulting translation adjustments are recognized as a component of AOCI. Gains or losses resulting from foreign currency denominated transactions are included in selling, general, and administrative expenses.

Cash and cash equivalents

Cash equivalents consist of highly liquid investments with an original maturity when purchased of three months or less and are stated at cost, which approximates fair value.

Inventories

Inventories are stated at the lower of cost (primarily computed in accordance with the first-in, first-out method) or net realizable value. Elements of cost include materials, labor, and overhead.

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Bulk wine inventories are included as in-process inventories within current assets, in accordance with the general practices of the wine industry, although a portion of such inventories may be aged for periods greater than one year. A substantial portion of barreled whiskey and brandy will not be sold within one year because of the duration of the aging process. All barreled spirits are classified as in-process inventories and are included in current assets, in accordance with industry practice. Warehousing, insurance, value added taxes, and other carrying charges applicable to barreled spirits held for aging are included in inventory costs.

We assess the valuation of our inventories and reduce the carrying value of those inventories that are obsolete or in excess of our forecasted usage to their estimated net realizable value based on analyses and assumptions including, but not limited to, historical usage, future demand, and market requirements.

Property, plant, and equipment

Property, plant, and equipment is stated at cost. Major additions and improvements are recognized as an increase to the property accounts, while maintenance and repairs are expensed as incurred. The cost of properties sold or otherwise disposed of and the related accumulated depreciation are eliminated from the balance sheet accounts at the time of disposal and resulting gains and losses are included as a component of operating income (loss).

Interest incurred relating to expansion, optimization, and construction of facilities is capitalized to construction in progress. We cease the capitalization of interest when construction activities are substantially completed and the facility and related assets are available for their intended use. At this point, construction in progress is transferred to the appropriate asset class.

Depreciation

Depreciation is computed primarily using the straight-line method over the following estimated useful lives:

			Years
Land improvements			15 to 32
Vineyards			16 to 26
Buildings and improvements			10 to 50
Machinery and equipment			3 to 35
Motor vehicles			3 to 8

Derivative instruments

We enter into derivative instruments to manage our exposure to fluctuations in foreign currency exchange rates, commodity prices, and interest rates. We enter into derivatives for risk management purposes only, including derivatives designated in hedge accounting relationships as well as those derivatives utilized as economic hedges. We do not enter into derivatives for trading or speculative purposes. We recognize all derivatives as either assets or liabilities and measure those instruments at estimated fair value (see Notes 6 and 7). We present our derivative positions gross on our balance sheets.

The change in the fair value of outstanding cash flow hedges is deferred in stockholders’ equity as a component of AOCI. For all periods presented herein, gains or losses deferred in stockholders’ equity as a component of AOCI are recognized in our results of operations in the same period in which the hedged items are recognized and on the same financial statement line item as the hedged items.

Changes in fair values for derivative instruments not designated in a hedge accounting relationship are recognized directly in our results of operations each period and on the same financial statement line item as the hedged item. For purposes of measuring segment operating performance, the net gain (loss) from the changes in fair value of our undesignated commodity derivative contracts, prior to settlement, is reported outside of segment operating results until such time that the underlying exposure is recognized in the segment operating results. Upon settlement, the net gain (loss) from the changes in fair value of the undesignated commodity derivative contracts is reported in the appropriate operating segment, allowing our operating segment results to reflect the

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economic effects of the commodity derivative contracts without the resulting unrealized mark to fair value volatility.

Cash flows from the settlement of derivatives, including both economic hedges and those designated in hedge accounting relationships, appear on our statements of cash flows in the same categories as the cash flows of the hedged items.

Fair value of financial instruments

We calculate the estimated fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available, we use standard pricing models for various types of financial instruments (such as forwards, options, swaps, and convertible debt) which take into account the present value of estimated future cash flows (see Note 7).

Goodwill and other intangible assets

Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. A reporting unit is an operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management. We review our goodwill and indefinite-lived intangible assets annually for impairment, or sooner, if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We use January 1 as our annual impairment test measurement date. Indefinite-lived intangible assets consist principally of trademarks. Intangible assets determined to have a finite life, primarily customer relationships, are amortized over their estimated useful lives and are subject to review for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. Note 9 provides a summary of intangible assets segregated between amortizable and nonamortizable amounts.

Income taxes

We use the asset and liability method of accounting for income taxes. This method accounts for deferred income taxes by applying statutory rates in effect at the balance sheet date to the difference between the financial reporting and tax bases of assets and liabilities. Certain income earned by foreign subsidiaries is subject to GILTI, a U.S. tax on foreign earnings. We treat the tax effect of GILTI as a current period tax expense when incurred. We provide deferred income taxes, consisting primarily of foreign withholding and state taxes, on all applicable unremitted earnings of our foreign subsidiaries. Interest and penalties are recognized as a component of (provision for) benefit from income taxes.

We recognize a tax benefit from an uncertain tax position when it is more likely than not the position will be sustained upon examination. We measure and recognize the tax benefit from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. In addition, changes in existing tax laws or rates could significantly change our current estimate of our unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. Changes in current estimates, if significant, could have a material adverse impact on our financial statements.

Leases

We recognize right-of-use assets and lease liabilities on our balance sheet. We assess service arrangements to determine if an asset is explicitly or implicitly specified in the agreement and if we have the right to control the use of the identified asset.

The right-of-use asset and lease liability are initially measured at the present value of future lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our secured incremental borrowing rate. The incremental borrowing rates are determined using a portfolio approach based on publicly available information in connection with our unsecured borrowing rates. We elected to recognize expenses for leases with a term of 12 months or less on a straight-line basis over the lease term and not to recognize these short-term leases on the balance sheet.

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The right-of-use asset and lease liability are calculated including options to extend or to terminate the lease when we determine that it is reasonably certain that we will exercise those options. In making that determination, we consider various existing economic and market factors, business strategies as well as the nature, length, and terms of the agreement. Based on our evaluation using these factors, we concluded that the exercise of renewal options or early termination options would not be reasonably certain in determining the lease term at commencement for leases we currently have in place. Assumptions made at the commencement date are re-evaluated upon occurrence of certain events such as a lease modification.

Certain of our contractual arrangements may contain both lease and non-lease components. We elected to measure the lease liability by combining the lease and non-lease components as a single lease component for all asset classes.

Certain of our leases include variable lease payments, including payments that depend on an index or rate, as well as variable payments for items such as raw materials, labor, property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Certain grape purchasing arrangements include variable payments based on actual tonnage and price of grapes. In addition, certain third-party logistics arrangements include variable payments that vary depending on throughput. Such variable lease payments are excluded from the calculation of the right-of-use asset and the lease liability and are recognized in the period in which the obligation is incurred.

Indemnification liabilities

We have indemnified respective parties against certain liabilities that may arise in connection with certain acquisitions and divestitures. Indemnification liabilities are recognized when probable and estimable and included in deferred income taxes and other liabilities (see Note 16).

Stock-based employee compensation

We have two stock-based employee compensation plans (see Note 18). We apply grant date fair-value-based measurement methods in accounting for our stock-based payment arrangements and recognize all costs resulting from stock-based payment transactions, net of expected forfeitures, ratably over the requisite service period. Stock-based awards are subject to specific vesting conditions, generally time vesting, or upon retirement, disability, or death of the employee (as defined by the plan), if earlier. For awards granted to retirement-eligible employees, we recognize compensation expense ratably over the period from the date of grant to the date of retirement-eligibility.

Net income (loss) per common share attributable to CBI

We have one class of common stock with a material number of shares outstanding: Class A Stock. In addition, we have another class of common stock with an immaterial number of shares outstanding: Class 1 Stock. Prior to November 10, 2022, we had an additional class of common stock with a material number of shares outstanding: Class B Stock. For additional information on the classes of common stock and the Reclassification, see Note 17.

For the years ended February 28, 2025, and February 29, 2024, net income (loss) per common share attributable to CBI (hereafter referred to as “net income (loss) per common share”) – basic for Class A Stock has been computed based on the weighted average shares of common stock outstanding during the period. Net income (loss) per common share – diluted for Class A Stock reflects the weighted average shares of common stock plus the effect of dilutive securities outstanding during the period using the treasury stock method. The effect of dilutive securities includes the impact of outstanding stock-based awards. The dilutive computation does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on the net income (loss) per common share.

For the year ended February 28, 2023, we used the two-class method for the computation and presentation of net income (loss) per common share. The two-class method is an earnings allocation formula that calculates basic and diluted net income (loss) per common share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Under the two-class method, Class A Stock was assumed to receive a 10% greater participation

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in undistributed earnings (losses) than Class B Stock, in accordance with the respective minimum dividend rights of each class of stock.

Net income (loss) per common share – basic excluded the effect of common stock equivalents and was computed using the two-class method. Net income (loss) per common share – diluted for Class A Stock reflected the potential dilution that could result if securities or other contracts to issue common stock were exercised or converted into common stock. Net income (loss) per common share – diluted for Class A Stock was computed using the more dilutive of the if-converted or two-class method. For the year ended February 28, 2023, net income (loss) per common share – diluted for Class A Stock was computed using the two-class method, until such conversion took place pursuant to the Reclassification. Net income (loss) per common share – diluted for Class B Stock was computed using the two-class method and did not assume conversion of Class B Stock into shares of Class A Stock.

For additional information on net income (loss) per common share, see Note 19.

Accounting pronouncements

Recently adopted accounting pronouncement

Segment reporting —

In November 2023, the FASB issued a standard requiring disclosures, on an annual and interim basis, of significant segment expenses and other segment items that are regularly provided to the CODM as well as the title and position of the CODM. We adopted these disclosures for our annual period ending February 28, 2025. The amendments in this standard were applied retrospectively to all prior periods presented in the financial statements (see Note 22).

Accounting pronouncements not yet adopted

Income taxes —

In December 2023, the FASB issued a standard to enhance the transparency and decision usefulness of income tax disclosures. This standard requires public companies to disclose (i) specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, (ii) the amount of income taxes paid disaggregated by federal, state, and foreign taxes and disaggregated by material individual jurisdictions, and (iii) income from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state, and foreign. We are required to adopt these disclosures for our annual period ending February 28, 2026, with early adoption permitted and this standard may be applied retrospectively. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition.

Disaggregation of income statement expenses —

In November 2024, the FASB issued a standard requiring disaggregated information about certain income statement expense line items to be disclosed on an annual and interim basis. We are required to adopt these disclosures for our annual period ending February 29, 2028, with early adoption permitted and this standard may be applied retrospectively. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition.

2. ACQUISITIONS, DIVESTITURES, AND RESTRUCTURING

Acquisitions

Sea Smoke

In June 2024, we acquired the Sea Smoke business, including a California-based luxury wine brand, vineyards, and a production facility for $158.7 million, net of closing and post-closing adjustments. This transaction also included the acquisition of goodwill, inventory, and a trademark. The results of operations of Sea Smoke are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition.

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Austin Cocktails

In April 2022, we acquired the remaining 73% ownership interest in Austin Cocktails, which included a portfolio of small batch, ready-to-drink cocktails. This transaction primarily included the acquisition of goodwill and a trademark. In addition, the purchase price for Austin Cocktails includes an earn-out over five years based on performance. The results of operations of Austin Cocktails are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition.

Lingua Franca

In March 2022, we acquired the Lingua Franca business, including a collection of Oregon-based luxury wines, a vineyard, and a production facility. This transaction also included the acquisition of a trademark and inventory. In addition, the purchase price for Lingua Franca includes an earn-out over seven years based on performance. The results of operations of Lingua Franca are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition.

Divestitures

SVEDKA Divestiture

On January 6, 2025, we sold the SVEDKA brand and related assets, primarily including inventory and equipment. The net cash proceeds from the SVEDKA Divestiture were used for general corporate purposes, including funding share repurchases, capital expenditures, and repayment of debt. Prior to the SVEDKA Divestiture, we recorded the results of operations of the SVEDKA brand in the Wine and Spirits segment. The following table summarizes the net gain recognized in connection with this divestiture, for the year ended February 28, 2025:

(in millions)
Cash received from buyer									$	409.2
Net assets sold									(139.7)
Direct costs to sell									(3.5)
Gain on sale of business (1)									$	266.0

(1)Included in gain (loss) on sale of business within our consolidated results of operations.

Craft Beer Divestitures

In June 2023, we completed the Craft Beer Divestitures. Prior to the Craft Beer Divestitures, we recorded the results of operations of such craft beer brands in the Beer segment.

2022 Wine Divestiture

On October 6, 2022, we sold certain of our mainstream and premium wine brands and related inventory. The net cash proceeds from the 2022 Wine Divestiture were utilized primarily to reduce outstanding borrowings. Prior to the 2022 Wine Divestiture, we recorded the results of operations of these brands in the Wine and Spirits segment. The following table summarizes the net gain recognized in connection with this divestiture, for the year ended February 28, 2023:

(in millions)
Cash received from buyer									$	96.7
Net assets sold									(66.9)
Direct costs to sell (1)									(14.8)
Gain on sale of business (2)									$	15.0

(1)Includes certain contract termination costs.

(2)Included in gain (loss) on sale of business within our consolidated results of operations.

Assets held for sale

The 2025 Wine Divestitures Transaction largely resulted in both (i) $879.8 million of wine and spirits net assets being reclassified to held for sale as of February 28, 2025, and (ii) a $478.0 million assets held for sale

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impairment. The impairment loss was included in assets held for sale impairment within our consolidated results of operations for the year ended February 28, 2025. The carrying value of assets held for sale as of February 28, 2025, consisted of the following:

(in millions)
Assets
Inventories			$	788.7
Prepaid expenses and other			0.5
Property, plant, and equipment			474.4
Intangible assets			127.9
Less: Assets held for sale impairment			(478.0)
Assets held for sale			913.5
Liabilities
Other accrued expenses and liabilities (1)			33.7
Net assets held for sale			$	879.8

(1)Liabilities held for sale are included in the Consolidated Balance Sheet as of February 28, 2025, within other accrued expenses and liabilities.

2025 Restructuring Initiative

The 2025 Restructuring Initiative is an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business, including through enhanced organizational efficiency and optimized expenditures across our organization. The majority of the work associated with the 2025 Restructuring Initiative is expected to be completed within the year ending February 28, 2026, and is estimated to result in $80 million to $100 million of cumulative pre-tax costs once all phases are fully implemented. This range is estimated to be comprised of (i) employee termination costs (60%) and (ii) consulting services as well as other costs, which primarily include contract termination costs (40%). We recognized $49.7 million of pre-tax restructuring costs during the year ended February 28, 2025, comprised of (i) $46.9 million of employee termination costs and (ii) $2.8 million of consulting services costs that were included in selling, general, and administrative costs within our consolidated results. As of February 28, 2025, the $49.7 million of pre-tax restructuring costs were captured in accrued restructuring within other accrued expenses and liabilities in the Consolidated Balance Sheet (see Note 11). We anticipate incurring approximately $40 million of additional pre-tax consulting services, employee termination, and other costs during the year ending February 28, 2026.

Subsequent event

2025 Wine Divestitures Transaction

In April 2025, we entered into a definitive agreement to fully divest and, in certain instances, exclusively license the trademarks of a portion of our wine and spirits business, primarily centered around our remaining mainstream wine brands and associated inventory, wineries, vineyards, offices, and facilities for $900 million, subject to certain adjustments. The 2025 Wine Divestitures Transaction is subject to the satisfaction of certain closing conditions, including receipt of required regulatory approval, and is expected to close immediately following the end of our first quarter of Fiscal 2026. We expect to use the net cash proceeds from the 2025 Wine Divestitures Transaction for general corporate purposes.

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3. INVENTORIES

The components of inventories are as follows:

			February 28, 2025						February 29, 2024
(in millions)
Raw materials and supplies			$	230.2					$	254.1
In-process inventories			540.9						1,096.0
Finished case goods			666.1						728.2
			$	1,437.2					$	2,078.3

The inventories balance as of February 28, 2025, excludes amounts reclassified to assets held for sale.

4. PREPAID EXPENSES AND OTHER

The major components of prepaid expenses and other are as follows:

			February 28, 2025						February 29, 2024
(in millions)
Value added taxes receivable			$	241.3					$	183.4
Prepaid taxes			150.4						130.9
Derivative assets			67.2						162.5
Income taxes receivable			14.9						64.3
Other			87.3						124.9
			$	561.1					$	666.0

The prepaid expenses and other balance at February 28, 2025, excludes an amount reclassified to assets held for sale.

5. PROPERTY, PLANT, AND EQUIPMENT

The major components of property, plant, and equipment are as follows:

			February 28, 2025						February 29, 2024
(in millions)
Land and land improvements			$	437.2					$	473.6
Vineyards			128.3						264.6
Buildings and improvements			1,907.9						1,941.6
Machinery and equipment			5,027.7						5,649.0
Motor vehicles			238.5						162.9
Construction in progress (1) (2)			2,218.1						2,296.6
			9,957.7						10,788.3
Less – Accumulated depreciation			(2,547.9)						(2,733.1)
			$	7,409.8					$	8,055.2

(1)We capitalized $74.2 million, $63.7 million, and $36.5 million of interest costs for the years ended February 28, 2025, February 29, 2024, and February 28, 2023, respectively, primarily due to the Mexico Beer Projects.

(2)Initial production at the Veracruz Brewery is expected to commence in late Fiscal 2026 or early Fiscal 2027.

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The property, plant, and equipment balance at February 28, 2025, and February 29, 2024, excludes amounts reclassified to assets held for sale. In July 2024, we sold the remaining assets classified as held for sale at the Mexicali Brewery.

6. DERIVATIVE INSTRUMENTS

Overview

We are exposed to market risk from changes in foreign currency exchange rates, commodity prices, and interest rates, that could affect our results of operations and financial condition. The impact on our results and financial position and the amounts reported in our financial statements will vary based upon the currency, commodity, and interest rate movements during the period, the effectiveness and level of derivative instruments outstanding, and whether they are designated and qualify for hedge accounting.

The estimated fair values of our derivative instruments change with fluctuations in currency rates, commodity prices, and/or interest rates and are expected to offset changes in the values of the underlying exposures. Our derivative instruments are held solely to manage our exposures to the aforementioned market risks as part of our normal business operations. We follow strict policies to manage these risks and do not enter into derivative instruments for trading or speculative purposes.

The aggregate notional value of outstanding derivative instruments is as follows:

			February 28, 2025						February 29, 2024
(in millions)
Derivative instruments designated as hedging instruments
Foreign currency contracts			$	2,843.6					$	2,045.6
Pre-issuance hedge contracts			$	275.0					$	—
Derivative instruments not designated as hedging instruments
Foreign currency contracts			$	378.2					$	735.9
Commodity derivative contracts			$	322.1					$	397.5

Cash flow hedges

Our derivative instruments designated in hedge accounting relationships are designated as cash flow hedges. We are exposed to foreign denominated cash flow fluctuations primarily in connection with third party and intercompany sales and purchases. We primarily use foreign currency forward contracts to hedge certain of these risks. In addition, we utilize interest rate swap, treasury lock, and swap lock contracts periodically to manage our exposure to changes in interest rates. Derivatives managing our cash flow exposures generally mature within three years or less, with a maximum maturity of five years.

To qualify for hedge accounting treatment, the details of the hedging relationship must be formally documented at inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risk that is being hedged, the derivative instrument, how effectiveness is being assessed, and how ineffectiveness will be measured. The derivative must be highly effective in offsetting changes in the cash flows of the risk being hedged. Throughout the term of the designated cash flow hedge relationship on at least a quarterly basis, a retrospective evaluation and prospective assessment of hedge effectiveness is performed based on quantitative and qualitative measures. All components of our derivative instruments’ gains or losses are included in the assessment of hedge effectiveness.

When we determine that a derivative instrument which qualified for hedge accounting treatment has ceased to be highly effective as a hedge, we discontinue hedge accounting prospectively. In the event the relationship is no longer effective, we recognize the change in the fair value of the hedging derivative instrument from the date the hedging derivative instrument became no longer effective immediately in our results of operations. We also discontinue hedge accounting prospectively when (i) a derivative expires or is sold,

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terminated, or exercised; (ii) it is no longer probable that the forecasted transaction will occur; or (iii) we determine that designating the derivative as a hedging instrument is no longer appropriate. When we discontinue hedge accounting prospectively, but the original forecasted transaction continues to be probable of occurring, the existing gain or loss of the derivative instrument remains in AOCI and is reclassified into earnings (losses) when the forecasted transaction occurs. When it becomes probable that the forecasted transaction will not occur, any remaining gain or loss in AOCI is recognized immediately in our results of operations.

We expect $17.3 million of net gains, net of income tax effect, to be reclassified from AOCI to our results of operations within the next 12 months.

Undesignated hedges

Certain of our derivative instruments do not qualify for hedge accounting treatment; for others, we choose not to maintain the required documentation to apply hedge accounting treatment. These undesignated instruments are primarily used to economically hedge our exposure to fluctuations in the value of foreign currency denominated receivables and payables; foreign currency investments, primarily consisting of loans to subsidiaries and foreign-denominated investments, and cash flows related primarily to the repatriation of those loans or investments; and commodity prices, including aluminum, corn, diesel fuel, and natural gas prices. We primarily use foreign currency forward and option contracts, generally less than 12 months in duration, and commodity swap contracts, generally less than 36 months in duration, with a maximum maturity of four years, to hedge some of these risks. In addition, from time to time, we utilize interest rate swap contracts, generally less than six months in duration, to economically hedge our exposure to changes in interest rates associated with the financing of significant investments and acquisitions. Our derivative policy permits the use of undesignated derivatives as approved by senior management.

Credit risk

We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the derivative contracts. To manage this risk, we contract only with major financial institutions that have earned investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association agreements which allow for net settlement of the derivative contracts. We have also established counterparty credit guidelines that are regularly monitored. Because of these safeguards, we believe the risk of loss from counterparty default to be immaterial.

In addition, our derivative instruments are not subject to credit rating contingencies or collateral requirements. As of February 28, 2025, the estimated fair value of derivative instruments in a net liability position due to counterparties was $20.5 million. If we were required to settle the net liability position under these derivative instruments on February 28, 2025, we would have had sufficient available liquidity on hand to satisfy this obligation.

Results of period derivative activity

The estimated fair value and location of our derivative instruments on our balance sheets are as follows (see Note 7):

Assets															Liabilities
			February 28, 2025						February 29, 2024									February 28, 2025						February 29, 2024
(in millions)
Derivative instruments designated as hedging instruments
Foreign currency contracts:
Prepaid expenses and other			$	56.2					$	154.1					Other accrued expenses and liabilities			$	36.9					$	3.5
Other assets			$	39.3					$	153.5					Deferred income taxes and other liabilities			$	38.6					$	0.2

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Assets															Liabilities
			February 28, 2025						February 29, 2024									February 28, 2025						February 29, 2024
(in millions)
Pre-issuance hedge contracts:
Prepaid expenses and other			$	2.2					$	—					Other accrued expenses and liabilities			$	—					$	—
Derivative instruments not designated as hedging instruments
Foreign currency contracts:
Prepaid expenses and other			$	1.5					$	3.6					Other accrued expenses and liabilities			$	0.9					$	1.7
Commodity derivative contracts:
Prepaid expenses and other			$	7.3					$	4.8					Other accrued expenses and liabilities			$	8.8					$	27.9
Other assets			$	2.3					$	1.4					Deferred income taxes and other liabilities			$	4.0					$	8.1

The principal effect of our derivative instruments designated in cash flow hedging relationships on our results of operations, as well as OCI, net of income tax effect, is as follows:

Derivative Instruments in Designated Cash Flow Hedging Relationships						Net Gain (Loss) Recognized in OCI						Location of Net Gain (Loss) Reclassified from AOCI to Income (Loss)						Net Gain (Loss) Reclassified from AOCI to Income (Loss)
(in millions)
For the Year Ended February 28, 2025
Foreign currency contracts						$	(161.8)					Sales						$	0.8
												Cost of product sold						96.3
Pre-issuance hedge contracts						2.3						Interest expense, net						—
						$	(159.5)											$	97.1
For the Year Ended February 29, 2024
Foreign currency contracts						$	205.7					Sales						$	(0.1)
												Cost of product sold						137.3
Pre-issuance hedge contracts						(0.1)						Interest expense, net						(1.6)
						$	205.6											$	135.6
For the Year Ended February 28, 2023
Foreign currency contracts						$	221.5					Sales						$	(1.3)
												Cost of product sold						50.8
Pre-issuance hedge contracts						15.7						Interest expense, net						(0.9)
						$	237.2											$	48.6

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The effect of our undesignated derivative instruments on our results of operations is as follows:

Derivative Instruments Not Designated as Hedging Instruments												Location of Net Gain (Loss) Recognized in Income (Loss)						Net Gain (Loss) Recognized in Income (Loss)
(in millions)
For the Year Ended February 28, 2025
Commodity derivative contracts												Cost of product sold						$	(0.3)
Foreign currency contracts												Selling, general, and administrative expenses						(29.7)
																		$	(30.0)
For the Year Ended February 29, 2024
Commodity derivative contracts												Cost of product sold						$	(44.2)
Foreign currency contracts												Selling, general, and administrative expenses						14.6
																		$	(29.6)
For the Year Ended February 28, 2023
Commodity derivative contracts												Cost of product sold						$	(15.0)
Foreign currency contracts												Selling, general, and administrative expenses						(19.8)
																		$	(34.8)

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

Authoritative guidance establishes a framework for measuring fair value, including a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy includes three levels:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities;

• Level 2 inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as volatility, interest rates, and yield curves that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

Fair value methodology

The following methods and assumptions are used to estimate the fair value of our financial instruments:

Foreign currency and commodity derivative contracts

The fair value is estimated using market-based inputs, obtained from independent pricing services, entered into valuation models. These valuation models require various inputs, including contractual terms, market foreign exchange prices, market commodity prices, interest-rate yield curves, and currency volatilities, as applicable (Level 2 fair value measurement).

Interest rate swap and Pre-issuance hedge contracts

The fair value is estimated based on quoted market prices from respective counterparties. Quotes are corroborated by using discounted cash flow models based upon forward interest-rate yield curves, which are obtained from independent pricing services (Level 2 fair value measurement).

Short-term borrowings

Our short-term borrowings consist of our commercial paper program and the revolving credit facility under our senior credit facility. The revolving credit facility is a variable interest rate bearing note with a fixed margin, adjustable based upon our debt rating (as defined in our senior credit facility). For these short-term borrowings the carrying value approximates the fair value.

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Long-term debt

The fair value of our fixed interest rate long-term debt is estimated by discounting cash flows using interest rates currently available for debt with similar terms and maturities (Level 2 fair value measurement). As of February 28, 2025, the carrying amount of long-term debt, including the current portion, was $10,691.0 million, compared with an estimated fair value of $9,990.0 million. As of February 29, 2024, the carrying amount of long-term debt, including the current portion, was $11,637.9 million, compared with an estimated fair value of $10,775.8 million.

The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value as of February 28, 2025, and February 29, 2024, due to the relatively short maturity of these instruments.

Recurring basis measurements

The following table presents our financial assets and liabilities measured at estimated fair value on a recurring basis:

			Fair Value Measurements Using
			Quoted Prices in Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
(in millions)
February 28, 2025
Assets:
Foreign currency contracts			$	—					$	97.0					$	—					$	97.0
Commodity derivative contracts			$	—					$	9.6					$	—					$	9.6
Pre-issuance hedge contracts			$	—					$	2.2					$	—					$	2.2
Liabilities:
Foreign currency contracts			$	—					$	76.4					$	—					$	76.4
Commodity derivative contracts			$	—					$	12.8					$	—					$	12.8
February 29, 2024
Assets:
Foreign currency contracts			$	—					$	311.2					$	—					$	311.2
Commodity derivative contracts			$	—					$	6.2					$	—					$	6.2
Liabilities:
Foreign currency contracts			$	—					$	5.4					$	—					$	5.4
Commodity derivative contracts			$	—					$	36.0					$	—					$	36.0

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Nonrecurring basis measurements

The following table presents our assets and liabilities measured at estimated fair value on a nonrecurring basis for which an impairment assessment was performed for the periods presented:

						Fair Value Measurements Using
			Balance Sheet Classification			Quoted Prices in Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total Losses
(in millions)
For the Year Ended February 28, 2025
Goodwill			Goodwill			$	—					$	—					$	—					$	2,740.7
Assets held for sale			Assets held for sale			—						879.8						—						478.0
Trademarks			Intangible assets			—						—						125.8						57.0
Equity method investments			Other assets			—						—						—						8.7
						$	—					$	879.8					$	125.8					$	3,284.4
For the Year Ended February 29, 2024
Equity method investments			Other assets			$	56.1					$	0.6					$	0.6					$	136.1
For the Year Ended February 28, 2023
Equity method investments			Other assets			$	398.4					$	—					$	—					$	1,060.3
Long-lived assets			Property, plant, and equipment			—						—						6.3						53.5
Trademarks			Intangible assets			—						—						—						13.0
						$	398.4					$	—					$	6.3					$	1,126.8

Goodwill

During the three months ended August 31, 2024, in connection with continued negative trends within our Wine and Spirits business primarily attributable to our U.S. wholesale market, driven by declines in both the overall wine market and in our mainstream and premium wine brands, management updated its Fiscal 2025 outlook for this reporting unit. The updated forecast indicated it was more likely than not the fair value of the Wine and Spirits reporting unit might be below its carrying value. Accordingly, we performed an interim quantitative assessment for goodwill impairment. This assessment indicated that the carrying value of the Wine and Spirits reporting unit exceeded its estimated fair value, resulting in a $2,250.0 million goodwill impairment. During the three months ended February 28, 2025, we performed our annual impairment analysis and updated our estimate of the fair value of the Wine and Spirits reporting unit to reflect the latest financial projections and an increase in the discount rate. As a result, we recognized an additional $490.7 million goodwill impairment to write-off the remaining goodwill balance for the Wine and Spirits reporting unit as of February 28, 2025. The $2,740.7 million total loss from impairment was included in goodwill and intangible assets impairment within our consolidated results for the year ended February 28, 2025. See Notes 8, 9, and 13 for further discussion.

When performing a quantitative assessment for impairment of goodwill, we measure the amount of impairment by calculating the amount by which the carrying value exceeds its estimated fair value. The estimated fair value is determined based on the discounted cash flow model. The most significant assumptions used in the discounted cash flow model were: (i) a 9% discount rate (for the interim assessment) and a 10% discount rate (for the annual assessment), (ii) a 1.5% expected long-term growth rate, and (iii) the annual cash flow projections.

Assets held for sale

For the three months ended February 28, 2025, largely in connection with the 2025 Wine Divestitures Transaction, assets held for sale with a $1,357.8 million carrying value, were written down to their current estimated fair value of $879.8 million, less costs to sell, resulting in a $478.0 million loss. This loss from impairment was included within assets held for sale impairment within our consolidated results for the year ended February

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28, 2025. These assets consisted primarily of inventory, production facilities, and intangible assets which had satisfied the conditions necessary to be classified as held for sale. Our estimated fair value was largely based on the expected proceeds from the 2025 Wine Divestitures Transaction as of February 28, 2025.

Trademarks

For the year ended February 28, 2025, in connection with the assessment of the same events and circumstances that resulted in the wine and spirits goodwill carrying value being written down to zero, we completed a quantitative assessment of our wine trademarks. We re-evaluated the wine units of account in contemplation of the 2025 Wine Divestitures Transaction and determined it was appropriate to have two reporting units, (i) held for sale brands and (ii) remaining brands. As a result, the held for sale brands trademark unit with a $182.8 million carrying value was written down to its estimated fair value of $125.8 million, resulting in a $57.0 million impairment. This loss was included in goodwill and intangible assets impairment within our consolidated results of operations for the year ended February 28, 2025.

When performing the quantitative assessment, the estimated fair value of the trademarks is calculated based on an income approach using the relief from royalty method. The most significant assumptions used in the relief from royalty method to determine the estimated fair value of intangible assets with indefinite lives in connection with this impairment testing were: (i) a 3% royalty rate (held for sale brands trademark unit) and a 7% royalty rate (remaining brands trademark unit), (ii) an 11% discount rate, (iii) a 1.5% expected long-term growth rate, and (iv) the annual revenue projections.

For the year ended February 28, 2023, in connection with certain continued negative trends within our Beer segment’s Funky Buddha and Four Corners craft beer portfolios, we updated our long-term financial forecasts for these portfolios. As a result, the Funky Buddha and Four Corners craft beer trademark assets with a carrying value of $13.0 million were written-off, resulting in an impairment of $13.0 million. This loss was included in goodwill and intangible assets impairment within our consolidated results of operations for the year ended February 28, 2023. The estimated fair value of these trademark assets was determined based on our updated cash flow projections. Additionally, in June 2023, we completed the Funky Buddha Divestiture and the Four Corners Divestiture.

Equity method investments

As of February 28, 2025, August 31, 2024, November 30, 2023, and August 31, 2023, we evaluated certain equity method investments, made through our corporate venture capital function within the Corporate Operations and Other segment, and determined there were other-than-temporary impairments due to business underperformance. These losses from impairment were included in income (loss) from unconsolidated investments within our consolidated results for the respective periods. The estimated fair values for the equity method investments evaluated as of February 28, 2025, August 31, 2024, and November 30, 2023, were based largely on the cash flows expected to be generated by the investment using unobservable data points. The estimated fair value for the equity method investments evaluated as of August 31, 2023, was based largely on observable prices for similar assets. In October 2023, we exited one of these equity method investments in exchange for a note receivable.

We evaluated our then-existing Canopy Equity Method Investment as of May 31, 2023, and determined there was an other-than-temporary impairment. Our conclusion was based on several contributing factors, including: (i) the fair value being less than the carrying value and the uncertainty surrounding Canopy’s stock price recovering in the near-term, (ii) Canopy recorded significant costs in its fourth quarter of fiscal 2023 results designed to align its Canadian cannabis operations and resources in response to continued unfavorable market trends, (iii) the substantial doubt about Canopy’s ability to continue as a going concern, as disclosed by Canopy, and (iv) Canopy’s identification of material misstatements in certain of its previously reported financial results related to sales in its BioSteel Sports Nutrition Inc. reporting unit that were accounted for incorrectly, including the recording of a goodwill impairment during its restated second quarter of fiscal 2023. As a result, the Canopy Equity Method Investment with a carrying value of $266.2 million was written down to its estimated fair value of $142.7 million, resulting in an impairment of $123.5 million. This loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for the year ended February 29, 2024. The estimated fair value was determined based on the closing price of the underlying equity security as of May 31,

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2023. Additionally, we no longer apply the equity method to our investment in Canopy following the April 2024 conversion of our Canopy common shares to Exchangeable Shares. For additional information, refer to Note 10.

As of August 31, 2022, we evaluated our then-existing Canopy Equity Method Investment and determined there was an other-than-temporary impairment based on several contributing factors, including: (i) the period of time for which the fair value had been less than the carrying value and the uncertainty surrounding Canopy’s stock price recovering in the near-term, (ii) Canopy recording a significant impairment of goodwill related to its cannabis operations during its first quarter of fiscal 2023, and (iii) the uncertainty of U.S. federal cannabis permissibility. As a result, the Canopy Equity Method Investment with a carrying value of $1,695.1 million was written down to its estimated fair value of $634.8 million, resulting in an impairment of $1,060.3 million. This loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for the year ended February 28, 2023. The estimated fair value was determined based on the closing price of the underlying equity security as of August 31, 2022.

Long-lived assets

For the year ended February 28, 2023, in connection with certain continued negative trends within our Beer segment’s craft beer business, management updated its long-term financial forecasts for this business and determined it was no longer part of the beer asset group. This change in financial forecasts indicated it was more likely than not the fair value of our long-lived assets associated with the craft beer business might be below its carrying value. Accordingly, we performed a quantitative assessment for impairment. As a result, certain long-lived assets with a carrying value of $59.8 million were written down to their estimated fair value of $6.3 million, resulting in a loss of $53.5 million. This loss was included in selling, general, and administrative expenses within our consolidated results of operations for the year ended February 28, 2023. These assets consisted primarily of property, plant, and equipment, including the Daleville Facility. Our estimated fair value was primarily based on the cash flows expected to be generated by the assets. Additionally, in May 2023, we sold the Daleville Facility in connection with our decision to exit the craft beer business.

8. GOODWILL

The changes in the carrying amount of goodwill are as follows:

			Beer						Wine and Spirits												Consolidated
(in millions)
Balance, February 28, 2023			$	5,188.9					$	2,736.5											$	7,925.4
Purchase accounting allocations (1)			—						6.5												6.5
Foreign currency translation adjustments			49.3						(0.9)												48.4
Balance, February 29, 2024			5,238.2						2,742.1												7,980.3
Purchase accounting allocations (2)			—						71.2												71.2
Foreign currency translation adjustments			(111.4)						0.6												(110.8)
Goodwill impairment			—						(2,740.7)												(2,740.7)
SVEDKA Divestiture (3)			—						(73.2)												(73.2)
Balance, February 28, 2025			$	5,126.8					$	—											$	5,126.8

(1)Purchase accounting allocations associated with the Domaine Curry acquisition.

(2)Preliminary purchase accounting allocations associated with the Sea Smoke acquisition.

(3)Allocation was based on the relative fair value of the portion of the business sold and the remaining wine and spirits portfolio. The relative fair values were determined using the transaction price and the income approach based on assumptions, including projected revenue growth, terminal growth, and discount rates and other projected financial information.

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9. INTANGIBLE ASSETS

The major components of intangible assets are as follows:

			February 28, 2025												February 29, 2024
			Gross Carrying Amount						Net Carrying Amount						Gross Carrying Amount						Net Carrying Amount
(in millions)
Amortizable intangible assets
Customer relationships			$	85.3					$	14.9					$	85.3					$	16.2
Other			20.7						0.3						20.8						0.3
Total			$	106.0					15.2						$	106.1					16.5
Nonamortizable intangible assets
Trademarks (1)									2,517.1												2,715.2
Total intangible assets									$	2,532.3											$	2,731.7

(1)The balance at February 28, 2025, was impacted by (i) assets reclassified to held for sale and (ii) a wine asset impairment.

We did not incur costs to renew or extend the term of acquired intangible assets for the years ended February 28, 2025, February 29, 2024, and February 28, 2023. Net carrying amount represents the gross carrying value net of accumulated amortization. Amortization expense for intangible assets was $1.3 million, $1.3 million, and $3.2 million for the years ended February 28, 2025, February 29, 2024, and February 28, 2023, respectively.

Estimated amortization expense for each of the five succeeding fiscal years and thereafter is as follows:

(in millions)
Fiscal 2026			$	1.3
Fiscal 2027			$	1.3
Fiscal 2028			$	1.3
Fiscal 2029			$	1.3
Fiscal 2030			$	1.3
Thereafter			$	8.7

10. OTHER ASSETS

The major components of other assets are as follows:

			February 28, 2025						February 29, 2024
(in millions)
Operating lease right-of-use asset			$	545.7					$	615.3
Income taxes receivable			135.5						—
Equity method investments			124.5						170.6
Other investments in debt and equity securities			60.3						73.0
Derivative assets			41.6						154.9
Exchangeable Shares			21.2						—
Other			132.9						126.2
			$	1,061.7					$	1,140.0

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Equity method investments

The carrying value of our equity method investments are as follows:

			February 28, 2025						February 29, 2024
(in millions)
Canopy Equity Method Investment (1)			$	—					$	42.5
Other equity method investments			124.5						128.1
			$	124.5					$	170.6

(1)Following the April 2024 conversion to Exchangeable Shares we no longer apply the equity method.

Other investments in debt and equity securities

We have multiple investments through our corporate venture capital function in debt and equity securities. As of February 28, 2025, we evaluated certain investments, primarily driven by business underperformance and solvency concerns, and concluded they should be written down to zero resulting in a loss of $47.9 million. This loss on securities measured at fair value was included in income (loss) from unconsolidated investments within our consolidated results for the year ended February 28, 2025.

Exchangeable Shares

As of November 30, 2024, we evaluated the Exchangeable Shares for impairment primarily due to the business and industry factors that led to the decline in Canopy’s common share price since the date of conversion and exchange. We concluded that an impairment did exist and wrote down the Exchangeable Shares to their estimated fair value. Due to the continued decline in Canopy’s common share price, as of February 28, 2025, we evaluated the Exchangeable Shares for an additional impairment. We concluded an impairment did exist, and accordingly, the Exchangeable Shares with a $97.3 million carrying value at the April 2024 date of conversion and exchange were written down to $21.2 million, their estimated fair value as of February 28, 2025, resulting in a $76.1 million total impairment. The estimated fair values were determined using the same valuation model as of the date of conversion and exchange as noted below. This total loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for the year ended February 28, 2025. Future impairments, if any, will also be reported in income (loss) from unconsolidated investments within our consolidated results.

In April 2024, we elected to convert our 17.1 million Canopy common shares into Exchangeable Shares on a one-for-one basis. Additionally, in April 2024, we exchanged C$81.2 million of the principal amount of the C$100.0 million 4.25% promissory note issued to us by Canopy for 9.1 million Exchangeable Shares and forgave all accrued but unpaid interest together with the remaining principal amount of the note. As a result of these transactions, we (i) have 26.3 million Exchangeable Shares and (ii) recognized an $83.3 million net gain in income (loss) from unconsolidated investments within our consolidated results for the year ended February 28, 2025. The fair value of Exchangeable Shares on the date of the conversion and exchange was estimated using a valuation model based primarily on the following inputs: (i) Canopy’s common share price, (ii) the expected volatility of Canopy’s common shares, and (iii) the probability and timing of U.S. federal legalization of recreational cannabis. As the Exchangeable Shares are an equity security without a readily determinable fair value, we elected to account for the Exchangeable Shares under the measurement alternative method.

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11. OTHER ACCRUED EXPENSES AND LIABILITIES

The major components of other accrued expenses and liabilities are as follows:

			February 28, 2025						February 29, 2024
(in millions)
Salaries, commissions, and payroll benefits and withholdings			$	155.3					$	197.8
Promotions and advertising			133.7						146.7
Accrued interest			98.7						110.7
Contract liabilities			91.5						34.6
Operating lease liability			76.7						89.6
Accrued excise taxes			49.8						51.0
Accrued restructuring (1)			49.7						—
Derivative liabilities			46.6						33.1
Accrued insurance, property, and other taxes			34.4						28.4
Liabilities held for sale			33.7						—
Other			116.6						144.5
			$	886.7					$	836.4

(1)Represents amounts accrued as of February 28, 2025 in connection with the 2025 Restructuring Initiative.

12. BORROWINGS

Borrowings consist of the following:

			February 28, 2025																		February 29, 2024
			Current						Long-term						Total						Total
(in millions)
Short-term borrowings
Commercial paper			$	806.7																	$	241.4
			$	806.7																	$	241.4
Long-term debt
Senior notes			$	1,397.9					$	9,284.4					$	10,682.3					$	11,620.1
Other			4.1						4.6						8.7						17.8
			$	1,402.0					$	9,289.0					$	10,691.0					$	11,637.9

Bank facilities

Senior credit facility

In October 2022, the Company, CB International, the Administrative Agent, and certain other lenders agreed to amend the 2022 Credit Agreement. The October 2022 Credit Agreement Amendment revised certain defined terms and covenants and became effective in April 2024 following the (i) amendment by Canopy of its Articles of Incorporation, (ii) conversion of our Canopy common shares into Exchangeable Shares, and (iii) resignation of our nominees from the board of directors of Canopy.

In April 2022, the Company, CB International, the Administrative Agent, and certain other lenders entered into the 2022 Restatement Agreement that amended and restated our then-existing senior credit facility (as

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amended and restated by the 2022 Restatement Agreement, the 2022 Credit Agreement). The principal changes effected by the 2022 Restatement Agreement were the:

• refinance and increase of the existing revolving credit facility from $2.0 billion to $2.25 billion and extension of its maturity to April 14, 2027;

• refinement of certain negative covenants; and

• replacement of LIBOR rates with rates based on term SOFR.

April 2022 Term Credit Agreement

In April 2022, the Company, the Administrative Agent, and the Lender amended our then-existing credit agreement (as amended, the April 2022 Term Credit Agreement). The April 2022 Term Credit Agreement provided for a $491.3 million five year term loan facility. The principal changes effected by the amendment were the refinement of certain negative covenants and replacement of LIBOR rates with rates based on term SOFR. In August 2023, we repaid the outstanding five-year term loan facility borrowings under the April 2022 Term Credit Agreement with proceeds from commercial paper borrowings.

August 2022 Term Credit Agreement

In August 2022, the Company, the Administrative Agent, and certain other lenders entered into the August 2022 Term Credit Agreement. The August 2022 Term Credit Agreement provided for a $1.0 billion term loan facility and was not subject to amortization payments, with the balance due and payable three years after the November 10, 2022, funding date. The proceeds from the August 2022 Term Credit Agreement were used to partially fund the aggregate cash payment to holders of Class B Stock in connection with the Reclassification and to pay related fees as well as fees related to closing the August 2022 Term Credit Agreement. In February 2023, we repaid a portion of our indebtedness under the August 2022 Term Credit Agreement with proceeds from senior notes issued in February 2023. In May 2023, we repaid the remaining outstanding borrowings under the August 2022 Term Credit Agreement with proceeds from senior notes issued in May 2023. For additional information, refer to “Senior notes” below.

General

We and our subsidiaries are subject to covenants that are contained in the 2022 Credit Agreement, including those restricting the incurrence of additional subsidiary indebtedness, additional liens, mergers and consolidations, transactions with affiliates, and sale and leaseback transactions, in each case subject to numerous conditions, exceptions, and thresholds. The financial covenants are limited to a minimum interest coverage ratio and a maximum net leverage ratio.

Our senior credit facility permits us to elect, subject to the willingness of existing or new lenders to fund such increase and other customary conditions, to increase the revolving credit commitments. The increased commitments may be an unlimited amount so long as our net leverage ratio, as defined and computed pursuant to our senior credit facility, is no greater than 4.00 to 1.00 subject to certain limitations for the period defined pursuant to our senior credit facility.

Information with respect to borrowings under the 2022 Credit Agreement is as follows:

			Outstanding borrowings						Interest rate						SOFR margin						Outstanding letters of credit						Remaining borrowing capacity (1)
(in millions)
February 28, 2025
Revolving credit facility (2) (3)			$	—					—		%				—		%				$	11.3					$	1,430.7
February 29, 2024
Revolving credit facility (2) (3)			$	—					—		%				—		%				$	11.5					$	1,997.0

(1)Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2022 Credit Agreement and outstanding borrowings under our commercial paper program of $808.0 million and

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$241.5 million (excluding unamortized discount) for the years ended February 28, 2025, and February 29, 2024, respectively (see “Commercial paper program” below).

(2)Contractual interest rate varies based on our debt rating (as defined in the agreement) and is a function of SOFR plus a margin and a credit spread adjustment, or the base rate plus a margin, or, in certain circumstances where SOFR cannot be adequately ascertained or available, an alternative benchmark rate plus a margin.

(3)We and/or CB International are the borrower under the $2,250.0 million revolving credit facility with a maturity date of April 14, 2027. Includes a sub-facility for letters of credit of up to $200.0 million.

Commercial paper program

We have a commercial paper program which provides for the issuance of up to an aggregate principal amount of $2.25 billion of commercial paper. Our commercial paper program is backed by unused commitments under our revolving credit facility under our 2022 Credit Agreement. Accordingly, outstanding borrowings under our commercial paper program reduce the amount available under our revolving credit facility. Information with respect to our outstanding commercial paper borrowings is as follows:

			February 28, 2025						February 29, 2024
(in millions)
Outstanding borrowings (1)			$	806.7					$	241.4
Weighted average annual interest rate			4.7		%				5.7		%
Weighted average remaining term			13 days						4 days

(1)Outstanding commercial paper borrowings are net of unamortized discount.

Pre-issuance hedge contracts

We entered into Pre-issuance hedge contracts, which were designated as cash flow hedges. As a result, we have hedged the treasury rate on $300.0 million of future debt issuances, of which $275.0 million was outstanding, as of February 28, 2025. Upon the termination and settlement of these contracts, the unrealized gain (loss) is recognized in AOCI within our consolidated balance sheets and amortized to interest expense, net within our consolidated results of operations.

Senior notes

Information on our senior notes is as follows:

									Date of																		Outstanding Balance (1)
			Principal						Issuance						Maturity						Interest Payments						February 28, 2025						February 29, 2024
(in millions)
4.75% Senior Notes (2) (3)			$	400.0					Nov 2014						Nov 2024						May/Nov						$	—					$	399.5
4.75% Senior Notes (2) (3)			$	400.0					Dec 2015						Dec 2025						Jun/Dec						399.5						398.8
3.70% Senior Notes (2) (4)			$	600.0					Dec 2016						Dec 2026						Jun/Dec						598.9						598.3
3.50% Senior Notes (2) (4)			$	500.0					May 2017						May 2027						May/Nov						498.8						498.2
4.50% Senior Notes (2) (4)			$	500.0					May 2017						May 2047						May/Nov						494.2						493.9
3.60% Senior Notes (2) (4)			$	700.0					Feb 2018						Feb 2028						Feb/Aug						697.9						697.1
4.10% Senior Notes (2) (4)			$	600.0					Feb 2018						Feb 2048						Feb/Aug						593.4						593.2
4.40% Senior Notes (2) (4)			$	500.0					Oct 2018						Nov 2025						May/Nov						499.5						498.8
4.65% Senior Notes (2) (4)			$	500.0					Oct 2018						Nov 2028						May/Nov						497.9						497.3
5.25% Senior Notes (2) (4)			$	500.0					Oct 2018						Nov 2048						May/Nov						494.1						493.8
3.15% Senior Notes (2) (4)			$	800.0					Jul 2019						Aug 2029						Feb/Aug						796.8						796.1
2.875% Senior Notes (2) (4)			$	600.0					Apr 2020						May 2030						May/Nov						596.8						596.2

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									Date of																		Outstanding Balance (1)
			Principal						Issuance						Maturity						Interest Payments						February 28, 2025						February 29, 2024
(in millions)
3.75% Senior Notes (2) (4)			$	600.0					Apr 2020						May 2050						May/Nov						591.0						590.6
2.25% Senior Notes (2) (4)			$	1,000.0					Jul 2021						Aug 2031						Feb/Aug						991.8						990.5
3.60% Senior Notes (2)			$	550.0					May 2022						May 2024						May/Nov						—						549.8
4.35% Senior Notes (2) (4)			$	600.0					May 2022						May 2027						May/Nov						598.4						597.8
4.75% Senior Notes (2) (4)			$	700.0					May 2022						May 2032						May/Nov						695.0						694.4
5.00% Senior Notes (2) (5)			$	500.0					Feb 2023						Feb 2026						Feb/Aug						499.0						497.9
4.90% Senior Notes (2) (4)			$	750.0					May 2023						May 2033						May/Nov						741.6						740.7
4.80% Senior Notes (2) (4)			$	400.0					Jan 2024						Jan 2029						Jan/Jul						397.7						397.2
																											$	10,682.3					$	11,620.1

(1)Amounts are net of unamortized debt issuance costs and unamortized discounts, where applicable.

(2)Senior unsecured obligations which rank equally in right of payment to all of our existing and future senior unsecured indebtedness.

(3)Redeemable, in whole or in part, at our option at any time at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the applicable treasury rate plus 50 basis points.

(4)Redeemable, in whole or in part, at our option at any time prior to the stated redemption date as defined in the indenture, at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the applicable treasury rate plus the stated basis points as defined in the indenture. On or after the stated redemption date, redeemable, in whole or in part, at our option at any time at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest.

			Redemption
			Stated Redemption Date						Stated Basis Points
3.70% Senior Notes due December 2026			Sept 2026						25
3.50% Senior Notes due May 2027			Feb 2027						20
4.50% Senior Notes due May 2047			Nov 2046						25
3.60% Senior Notes due February 2028			Nov 2027						15
4.10% Senior Notes due February 2048			Aug 2047						20
4.40% Senior Notes due November 2025			Sept 2025						20
4.65% Senior Notes due November 2028			Aug 2028						25
5.25% Senior Notes due November 2048			May 2048						30
3.15% Senior Notes due August 2029			May 2029						20
2.875% Senior Notes due May 2030			Feb 2030						35
3.75% Senior Notes due May 2050			Nov 2049						40
2.25% Senior Notes due August 2031			May 2031						15
4.35% Senior Notes due May 2027			Apr 2027						25
4.75% Senior Notes due May 2032			Feb 2032						30
4.90% Senior Notes due May 2033			Feb 2033						25
4.80% Senior Notes due January 2029			Dec 2028						15

(5)Redeemable, in whole or in part, at our option at any time at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest.

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Indentures

Our indentures relating to our outstanding senior notes contain certain covenants, including, but not limited to: (i) a limitation on liens on certain assets, (ii) a limitation on certain sale and leaseback transactions, and (iii) restrictions on mergers, consolidations, and the transfer of all or substantially all of our assets to another person.

Subsidiary credit facilities

General

We have additional credit arrangements totaling $46.7 million and $67.7 million as of February 28, 2025, and February 29, 2024, respectively. As of February 28, 2025, and February 29, 2024, amounts outstanding under these arrangements were $8.7 million and $17.8 million, respectively, the majority of which is classified as long-term as of the respective date. These arrangements primarily support the financing needs of our domestic and foreign subsidiary operations. Interest rates and other terms of these borrowings vary from country to country, depending on local market conditions.

Debt payments

As of February 28, 2025, the required principal repayments under long-term debt obligations (excluding unamortized debt issuance costs and unamortized discounts of $47.0 million and $20.7 million, respectively) for each of the five succeeding fiscal years and thereafter are as follows:

(in millions)
Fiscal 2026			$	1,404.1
Fiscal 2027			603.2
Fiscal 2028			1,801.3
Fiscal 2029			900.0
Fiscal 2030			800.0
Thereafter			5,250.1
			$	10,758.7

13. INCOME TAXES

Income (loss) before income taxes was generated as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Domestic			$	(2,633.0)					$	(140.2)					$	(1,441.6)
Foreign			2,550.2						2,362.0						1,825.2
			$	(82.8)					$	2,221.8					$	383.6

The income tax provision (benefit) consisted of the following:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Current
Federal			$	16.7					$	152.6					$	(54.3)
State			25.9						16.4						15.5
Foreign			116.0						139.7						253.1
Total current			158.6						308.7						214.3

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			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Deferred
Federal			(436.4)						27.7						82.6
State			(73.1)						(19.0)						29.9
Foreign			299.2						139.2						95.3
Total deferred			(210.3)						147.9						207.8
Income tax provision (benefit)			$	(51.7)					$	456.6					$	422.1

A reconciliation of the total tax provision (benefit) to the amount computed by applying the statutory U.S. federal income tax rate to income before provision for (benefit from) income taxes is as follows:

			For the Years Ended
			February 28, 2025												February 29, 2024												February 28, 2023
			Amount						% of Pretax Income (Loss)						Amount						% of Pretax Income (Loss)						Amount						% of Pretax Income (Loss)
(in millions, except % of pretax income (loss) data)
Income tax provision (benefit) at statutory rate			$	(17.4)					21.0		%				$	466.6					21.0		%				$	80.6					21.0		%
State and local income taxes, net of federal income tax provision (benefit) (1)			(31.2)						37.7		%				35.9						1.6		%				3.4						0.9		%
Net income tax benefit from the realization of tax losses related to a prior period divestiture			—						—		%				—						—		%				(166.4)						(43.4		%)
Net income tax benefit from a tax entity classification change			—						—		%				(31.2)						(1.4		%)				—						—		%
Earnings taxed at other than U.S. statutory rate (2)			(241.0)						291.1		%				(75.9)						(3.4		%)				(49.2)						(12.8		%)
Net income tax provision (benefit) from legislative changes (3)			—						—		%				(9.6)						(0.4		%)				10.9						2.8		%
Wine and Spirits-related impairments including the non-deductible portion of the wine and spirits goodwill impairment			253.3						(306.0		%)				—						—		%				—						—		%
Excess tax benefits from stock-based compensation awards (4)			(5.3)						6.4		%				(8.0)						(0.4		%)				(5.2)						(1.4		%)
Net income tax provision (benefit) recognized for adjustment to valuation allowance (5)			24.1						(29.1		%)				86.2						3.9		%				557.6						145.4		%
Net income tax provision (benefit) in connection with sale of the remaining assets at the canceled Mexicali Brewery			(22.2)						26.8		%				—						—		%				—						—		%
Net income tax provision (benefit) for various U.S. income tax credits			(14.1)						17.0		%				—						—		%				—						—		%
Net income tax provision (benefit) in connection with the SVEDKA Divestiture			6.0						(7.2		%)				—						—		%				—						—		%
Miscellaneous items, net			(3.9)						4.7		%				(7.4)						(0.3		%)				(9.6)						(2.5		%)
Income tax provision (benefit) at effective rate			$	(51.7)					62.4		%				$	456.6					20.6		%				$	422.1					110.0		%

(1)Includes differences resulting from adjustments to the current and deferred state effective tax rates.

(2)Consists of the following (i) difference between the U.S. statutory rate and local jurisdiction tax rates, (ii) the provision for incremental U.S. taxes on earnings of certain foreign subsidiaries offset by foreign tax credits,

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(iii) the non-U.S. portion of tax provision (benefit) recorded on the unrealized net gain (loss) from the changes in fair value of our investment in Canopy, and (iv) the non-U.S. portion of tax benefits recorded on the Canopy equity in earnings (losses) and related activities.

(3)The years ended February 29, 2024, and February 28, 2023, represent a net income tax provision resulting from the remeasurement of our deferred tax assets in connection with a legislative update in Switzerland.

(4)Represents the recognition of the income tax effect of stock-based compensation awards in the income statement when the awards vest or are settled.

(5)The year ended February 28, 2025, consists primarily of valuation allowances related to net operating losses and the years ended February 29, 2024, and February 28, 2023, consists primarily of valuation allowances related to our investment in Canopy.

Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income. Additionally, we have provided deferred income taxes, consisting primarily of foreign withholding and state taxes, on all applicable unremitted earnings of our foreign subsidiaries, except for those earnings that we consider to be indefinitely reinvested.

Significant components of deferred tax assets (liabilities) consist of the following:

			February 28, 2025						February 29, 2024
(in millions)
Deferred tax assets
Intangible assets			$	1,716.1					$	1,872.3
Loss carryforwards			619.3						719.4
Stock-based compensation			20.7						20.1
Inventory			33.1						23.8
Lease liabilities			102.3						117.5
Investments in unconsolidated investees			652.2						635.2
Other accruals			280.1						238.2
Gross deferred tax assets			3,423.8						3,626.5
Valuation allowances			(1,170.0)						(1,140.4)
Deferred tax assets, net			2,253.8						2,486.1
Deferred tax liabilities
Intangible assets			(264.9)						(644.0)
Property, plant, and equipment			(122.7)						(161.2)
Right-of-use assets			(88.3)						(106.5)
Provision for unremitted earnings			(26.8)						(29.2)
Other accruals			(38.4)						(81.7)
Total deferred tax liabilities			(541.1)						(1,022.6)
Deferred tax assets (liabilities), net			$	1,712.7					$	1,463.5

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the projected reversal of deferred tax liabilities and projected future taxable income as well as tax planning strategies. Based upon this assessment, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of any valuation allowances.

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As of February 28, 2025, operating loss carryforwards, which are primarily state and foreign, totaling $3.2 billion are being carried forward in a number of jurisdictions where we are permitted to use tax operating losses from prior periods to reduce future taxable income. Of these operating loss carryforwards, $1.7 billion will expire by fiscal 2032, $850.0 million will expire between fiscal 2033 and fiscal 2045, and $650.0 million may be carried forward indefinitely in certain jurisdictions. Additionally, as of February 28, 2025, federal capital losses totaling $1.4 billion are being carried forward in multiple jurisdictions; and will expire, if unused, between Fiscal 2029 and fiscal 2034.

We have recognized valuation allowances for operating loss carryforwards and other deferred tax assets when we believe it is more likely than not that these items will not be fully realized. The increase in our valuation allowances as of February 28, 2025, primarily related to operating loss carryforwards.

The liability for income taxes associated with uncertain tax positions, excluding interest and penalties, and a reconciliation of the beginning and ending unrecognized tax benefit liabilities is as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Balance as of March 1			$	416.1					$	344.3					$	279.0
Increases as a result of tax positions taken during a prior period			51.8						48.1						51.5
Decreases as a result of tax positions taken during a prior period			(124.7)						(2.5)						(3.4)
Increases as a result of tax positions taken during the current period			28.0						31.5						36.8
Decreases related to settlements with tax authorities			(43.9)						(2.8)						(15.2)
Decreases related to lapse of applicable statute of limitations			(8.4)						(2.5)						(4.4)
Balance as of last day of February			$	318.9					$	416.1					$	344.3

As of February 28, 2025, and February 29, 2024, we had $438.4 million and $488.5 million, respectively, of unrecognized tax benefit liabilities, including interest and penalties, recognized on our balance sheets. These liabilities are primarily recorded as non-current as of the balance sheet date.

As of February 28, 2025, we had $318.9 million of unrecognized tax benefit liabilities, of which $183.4 million if recognized would decrease the effective tax rate in the year of resolution. As of February 29, 2024, we had $416.1 million of unrecognized tax benefit liabilities that if recognized would decrease the effective tax rate in the year of resolution.

We file U.S. federal income tax returns and various state, local, and foreign income tax returns. Major tax jurisdictions where we are subject to examination by tax authorities include Italy, Mexico, New Zealand, Switzerland, and the U.S. Various U.S. state and foreign income tax examinations are currently in progress. It is reasonably possible that the liability associated with our unrecognized tax benefit liabilities will increase or decrease within the next 12 months as a result of these examinations or the expiration of statutes of limitation. As of February 28, 2025, we estimate that unrecognized tax benefit liabilities could change by a range of $100 million to $250 million. With few exceptions, we are no longer subject to U.S. federal, state, local, or foreign income tax examinations for fiscal years prior to February 28, 2022.

We provide for additional tax expense based on probable outcomes of ongoing tax examinations and assessments in various jurisdictions. While it is often difficult to predict the outcome or the timing of resolution of any tax matter, we believe the reserves reflect the probable outcome of known tax contingencies. Unfavorable settlement of any particular issue would require the use of cash.

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14. DEFERRED INCOME TAXES AND OTHER LIABILITIES

The major components of deferred income taxes and other liabilities are as follows:

			February 28, 2025						February 29, 2024
(in millions)
Operating lease liability			$	539.1					$	588.7
Unrecognized tax benefit liabilities			424.3						407.9
Deferred income taxes			92.6						591.5
Derivative liabilities			42.6						8.3
Contract liabilities			10.7						80.2
Other			84.0						127.7
			$	1,193.3					$	1,804.3

15. LEASES

General

We primarily lease certain vineyards, office and production facilities, warehouses, production equipment, and vehicles. We have concluded that certain grape purchasing arrangements associated with the purchase of grape production yielded from a specified block of a vineyard and certain third-party logistics arrangements contain a lease.

Balance sheet location

A summary of lease right-of-use assets and liabilities are as follows:

			Balance Sheet Classification			February 28, 2025						February 29, 2024
(in millions)
Assets
Operating lease			Other assets			$	545.7					$	615.3
Finance lease			Property, plant, and equipment			18.2						18.2
Total right-of-use assets						$	563.9					$	633.5
Liabilities
Current:
Operating lease			Other accrued expenses and liabilities			$	76.7					$	89.6
Finance lease			Current maturities of long-term debt			4.1						7.5
Non-current:
Operating lease			Deferred income taxes and other liabilities			539.1						588.7
Finance lease			Long-term debt, less current maturities			4.6						10.3
Total lease liabilities						$	624.5					$	696.1

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Lease cost

The components of total lease cost are as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Operating lease cost			$	112.6					$	98.2					$	96.2
Finance lease cost:
Amortization of right-of-use assets			7.2						9.4						9.2
Interest on lease liabilities			1.0						1.4						1.1
Short-term lease cost			11.5						10.5						6.6
Variable lease cost			135.2						182.1						176.5
Total lease cost			$	267.5					$	301.6					$	289.6

Lease maturities

As of February 28, 2025, minimum payments due for lease liabilities for each of the five succeeding fiscal years and thereafter are as follows:

			Operating Leases						Finance Leases
(in millions)
Fiscal 2026			$	113.6					$	4.7
Fiscal 2027			95.8						3.4
Fiscal 2028			83.7						1.3
Fiscal 2029			78.3						—
Fiscal 2030			72.7						—
Thereafter			384.1						0.1
Total lease payments			828.2						9.5
Less: Interest			(212.4)						(0.8)
Total lease liabilities			$	615.8					$	8.7

Related party transaction

We have a long-term lease for office space with an affiliate of a director.

Supplemental information

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	114.8					$	99.5					$	99.7
Operating cash flows from finance leases			$	1.0					$	1.4					$	1.1
Financing cash flows from finance leases			$	7.0					$	9.7					$	8.8
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases			$	63.0					$	268.5					$	63.2
Finance leases			$	—					$	—					$	10.1

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			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Weighted-average remaining lease term: (1)
Operating leases			11.6 years						10.7 years						11.8 years
Finance leases			2.3 years						2.8 years						3.3 years
Weighted-average discount rate:
Operating leases			4.2		%				4.3		%				3.3		%
Finance leases			8.8		%				7.5		%				6.3		%

(1)Our leases have varying terms with remaining lease terms of up to approximately 30 years. Certain of our lease arrangements provide us with the option to extend or to terminate the lease early.

16. COMMITMENTS AND CONTINGENCIES

Purchase commitments and contingencies

We have entered into various long-term contracts in the normal course of business. As of February 28, 2025, the estimated aggregate minimum purchase commitments under these contracts through the date of the last contractual commitment are as follows:

			Type			Commitment Date			Amount
(in millions)
Raw materials and supplies (1)			Packaging, malt, grapes, and corn			December 2037			$	5,878.5
Contract services			Transportation, IT, marketing, warehousing and bottling, energy contract services, and consumer and market insights			January 2032			463.7
Capital expenditures (2)			Property, plant, and equipment and contractor and manufacturing services			January 2028			205.5
In-process and finished goods inventories			Bulk wine and spirits, finished wine case goods, and related contracts			September 2030			54.7
									$	6,602.4

(1)Certain grape purchasing arrangements include the purchase of grape production yielded from specified blocks of a vineyard. The actual tonnage and price of grapes that we purchase will vary each year depending on certain factors, including weather, time of harvest, overall market conditions, and the agricultural practices and location of the vineyard. Amounts included herein for the estimated aggregate minimum grape purchase commitments consist of estimates for the purchase of the grapes and the implicit leases of the land. Certain grape purchasing arrangements classified as leases have not resulted in the recognition of right-of-use assets and lease liabilities on our balance sheet due to their variable nature.

(2)Consists of purchase commitments entered into primarily in connection with the Mexico Beer Projects.

We expect a portion of our purchase commitments under these contracts to transfer with the 2025 Wine Divestitures Transaction.

Indemnification liabilities

In connection with prior divestitures, we have indemnified respective parties against certain liabilities that may arise subsequent to the divestiture. As of February 28, 2025, and February 29, 2024, these liabilities consist primarily of indemnifications related to certain income tax matters and lease contracts. As of February 28, 2025, and February 29, 2024, the carrying amount of our indemnification liabilities was $18.4 million and $32.9 million, respectively, and are included in other accrued expenses and liabilities and deferred income taxes and other

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liabilities. We do not expect to be required to make material payments under the indemnifications and we believe that the likelihood is remote that the indemnifications could have a material adverse effect on our business, liquidity, financial condition, and/or results of operations.

Supply chain finance program

We have an agreement with a financial institution for payment services and facilitate a voluntary supply chain finance program through this participating financial institution. The program is available to certain of our suppliers allowing them the option to manage their cash flow. We are not a party to the agreements between the participating financial institution and the suppliers in connection with the program. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. We account for payments made under the supply chain finance program the same as our other accounts payable, as a reduction to our cash flow from operating activities.

The changes in outstanding obligations under our supply chain finance program are as follows:

(in millions)
Balance, February 28, 2023						$	3.9
Additions						53.8
Settlements (1)						(50.4)
Balance, February 29, 2024 (2)						7.3
Additions						127.1
Settlements (1)						(130.6)
Balance, February 28, 2025 (2)						$	3.8

(1)Reflects amounts settled through the supply chain finance program and paid to the financial institution.

(2)Reflects amount payable to the participating financial institution for suppliers who voluntarily participated in the supply chain finance program and was included in accounts payable within our consolidated balance sheets.

Legal matters

In the ordinary course of our business, we are subject to lawsuits, arbitration, claims, and other legal proceedings in connection with our business. Some of the legal actions include claims for substantial or unspecified compensatory and/or punitive damages and/or injunctive relief. A substantial adverse judgment or other unfavorable resolution of these matters could have a material adverse effect on our financial condition, results of operations, or cash flows. Management believes that we have adequate legal defenses with respect to the legal proceedings to which it is a defendant or respondent and that the outcome of these pending proceedings is not likely to have a material adverse effect on our financial condition, results of operations, and/or cash flows. However, we are unable to predict the outcome of these matters.

Regulatory matters

We are in discussions with various governmental agencies concerning matters raised during regulatory examinations or otherwise subject to such agencies’ inquiry. These matters could result in censures, fines, or other sanctions. Management believes the outcome of any pending regulatory matters will not have a material adverse effect on our financial condition, results of operations, and/or cash flows. However, we are unable to predict the outcome of these matters.

Insurance recoveries

During the year ended February 29, 2024, we recorded $56.3 million of business interruption and other recoveries from our insurance carriers. These recoveries related to an outage at our Nava Brewery due to severe winter weather events in early 2021. These proceeds are included in our consolidated results of operations for the year ended February 29, 2024.

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17. STOCKHOLDERS’ EQUITY

Common stock

We have one class of common stock with a material number of shares outstanding: Class A Stock. Holders of Class A Stock are entitled to one vote per share. In addition, we have a class of common stock with an immaterial number of shares outstanding: Class 1 Stock. Shares of Class 1 Stock generally have no voting rights. Class 1 Stock shares are convertible into shares of Class A Stock on a one-to-one basis at any time at the option of the holder, provided that the holder immediately sells the Class A Stock acquired upon conversion. Because shares of Class 1 Stock are convertible into shares of Class A Stock, for each share of Class 1 Stock issued, we must reserve one share of Class A Stock for issuance upon the conversion of the share of Class 1 Stock. Holders of Class 1 Stock do not have any preference as to dividends, but may participate in any dividend if and when declared by the Board of Directors. If we pay a cash dividend on Class 1 Stock, each share of Class A Stock will receive an amount at least 10% greater than the amount of cash dividend per share paid on Class 1 Stock. In addition, the Board of Directors may declare and pay a dividend on Class A Stock without paying a dividend on Class 1 Stock.

Prior to the Reclassification, we had an additional class of common stock with a material number of shares outstanding: Class B Stock. Shares of Class B Stock were convertible into shares of Class A Stock on a one-to-one basis at any time at the option of the holder. Holders of Class B Stock were entitled to 10 votes per share. See “Reclassification” below for additional information.

The number of shares of common stock issued and treasury stock, and associated share activity, are as follows:

			Common Stock																		Treasury Stock
			Class A						Class B						Class 1						Class A						Class B
Balance at February 28, 2022			187,263,859						28,212,340						2,248,679						22,824,607						5,005,800
Share repurchases			—						—						—						7,086,446						—
Retirement of shares (1)			—						(5,005,800)						—						—						(5,005,800)
Conversion of shares (2)			25,433,569						(23,206,540)						(2,227,029)						—						—
Exercise of stock options			—						—						1,055						(262,970)						—
Employee stock purchases			—						—						—						(57,284)						—
Vesting of restricted stock units (3)			—						—						—						(76,047)						—
Vesting of performance share units (3)			—						—						—						(16,326)						—
Balance at February 28, 2023			212,697,428						—						22,705						29,498,426						—
Share repurchases			—						—						—						1,043,366						—
Conversion of shares			870						—						(870)						—						—
Exercise of stock options			—						—						1,826						(582,476)						—
Employee stock purchases			—						—						—						(59,408)						—
Vesting of restricted stock units (3)			—						—						—						(76,914)						—
Vesting of performance share units (3)			—						—						—						(13,113)						—
Balance at February 29, 2024			212,698,298						—						23,661						29,809,881						—
Share repurchases			—						—						—						5,252,003						—
Exercise of stock options			—						—						3,376						(389,640)						—
Employee stock purchases			—						—						—						(67,405)						—
Vesting of restricted stock units (3)			—						—						—						(90,941)						—
Vesting of performance share units (3)			—						—						—						(8,757)						—
Balance at February 28, 2025			212,698,298						—						27,037						34,505,141						—

(1)Shares of our Class B Treasury Stock were retired to authorized and unissued shares of our Class B Stock prior to completing the Reclassification.

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(2)Includes shares of Class B Stock issued and outstanding immediately prior to the Effective Time that were reclassified, exchanged, and converted into one share of Class A Stock and the right to receive $64.64 in cash, without interest (see “Reclassification” below).

(3)Net of the following shares withheld to satisfy tax withholding requirements:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
Restricted Stock Units			48,648						40,023						37,494
Performance Share Units			5,728						8,735						4,919

Stock repurchases

In January 2018, our Board of Directors authorized the repurchase of up to $3.0 billion of our publicly traded common stock, which was fully utilized as of May 31, 2022. Additionally, in each of January 2021 and November 2023, our Board of Directors authorized the repurchase of up to $2.0 billion of our publicly traded common stock. The 2021 Authorization was fully utilized as of November 30, 2024. The Board of Directors did not specify a date upon which these authorizations would expire. Shares repurchased under these authorizations become treasury shares.

A summary of share repurchase activity is as follows:

									For the Years Ended
						February 28, 2025												February 29, 2024												February 28, 2023
															Dollar Value						Number of Shares						Dollar Value						Number of Shares						Dollar Value						Number of Shares
(in millions, except share data)
2018 Authorization															$	—					—						$	—					—						$	563.6					2,254,536
2021 Authorization															613.7						2,462,271						249.7						1,043,366						1,136.6						4,831,910
2023 Authorization															510.1						2,789,732						—						—						—						—
															$	1,123.8					5,252,003						$	249.7					1,043,366						$	1,700.2					7,086,446

Subsequent to February 28, 2025, we repurchased 494,094 shares of Class A Stock pursuant to the 2025 Authorization at an aggregate cost of $91.7 million through open market transactions. As of April 23, 2025, total shares repurchased under our board authorizations are as follows:

									Class A Stock
			Repurchase Authorization						Dollar Value of Shares Repurchased						Number of Shares Repurchased
(in millions, except share data)
2018 Authorization			$	3,000.0					$	3,000.0					13,331,156
2021 Authorization			$	2,000.0					$	2,000.0					8,337,547
2023 Authorization (1)			$	2,000.0					$	510.1					2,789,732
2025 Authorization (1) (2)			$	4,000.0					$	91.7					494,094

(1)In April 2025, we announced that our Board of Directors authorized the repurchase of up to $4.0 billion of our publicly traded common stock expiring in February 2028. The 2025 Authorization replaced the 2023 Authorization in its entirety and no further repurchases will be made pursuant to the 2023 Authorization. Shares repurchased under the 2025 Authorization have become treasury shares.

(2)As of April 23, 2025, $3,908.3 million remains available for future share repurchases, excluding the impact of Federal excise tax owed pursuant to the IRA.

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Reclassification

In November 2022, we completed the Reclassification at the Effective Time as contemplated by the Reclassification Agreement. Pursuant to the Reclassification, each share of Class B Stock issued and outstanding immediately prior to the Effective Time was reclassified, exchanged, and converted into one share of Class A Stock and the right to receive $64.64 in cash, without interest. The aggregate cash payment to holders of Class B Stock at the Effective Time was $1.5 billion. We utilized our $1.0 billion delayed draw three-year term loan facility under the August 2022 Term Credit Agreement and borrowings under our commercial paper program to fund the aggregate cash payment to holders of Class B Stock.

Common stock dividends

In April 2025, our Board of Directors declared a quarterly cash dividend of $1.02 per share of Class A Stock and $0.92 per share of Class 1 Stock payable in the first quarter of Fiscal 2026.

Purchase of noncontrolling interest

In October 2024, we purchased the remaining 25% noncontrolling interest in Nelson’s Green Brier, a portfolio of Tennessee-based craft bourbon and whiskey products.

18. STOCK-BASED EMPLOYEE COMPENSATION

We have two stock-based employee compensation plans (as further discussed below). Total compensation cost recognized for our stock-based awards and income tax benefits related thereto are as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Total compensation cost recognized in our results of operations (1)			$	72.2					$	63.6					$	68.5
Income tax benefit related thereto recognized in our results of operations			$	10.6					$	9.5					$	8.0

(1)The majority is included in selling, general, and administrative expenses.

Long-Term Stock Incentive Plan

Under our Long-Term Stock Incentive Plan, nonqualified stock options, restricted stock units, performance share units, and other stock-based awards may be granted to our employees, officers, and directors. The aggregate number of shares of our Class A Stock and Class 1 Stock available for awards under our Long-Term Stock Incentive Plan is 108,000,000 shares.

The exercise price, vesting period, and term of nonqualified stock options granted are established by the committee administering the plan (the “Committee”). The exercise price of any nonqualified stock option may not be less than the fair market value of our Class A Stock on the date of grant. Nonqualified stock options generally vest and become exercisable over a three-year period from the date of grant and expire as established by the Committee, but not later than 10 years after the grant date.

Grants of restricted stock units, performance share units, and other stock-based awards may contain such vesting periods, terms, conditions, and other requirements as the Committee may establish. Restricted stock unit awards are based on service and generally vest over one to three years from the date of grant. Performance share unit awards are based on service and the satisfaction of certain performance conditions, and vest over a required employee service period, generally from one to three years from the date of grant, which closely matches the performance period. The performance conditions include the achievement of specified financial or operational performance metrics, or market conditions which require the achievement of specified levels of stockholder return relative to other companies as defined in the applicable performance share unit agreement. The actual number of shares to be awarded upon vesting of a performance share unit award will range between 0% and 200% of the target award, based upon the measure of performance as certified by the Committee.

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A summary of stock option activity under our Long-Term Stock Incentive Plan is as follows:

			For the Years Ended
			February 28, 2025												February 29, 2024												February 28, 2023
			Number of Options						Weighted Average Exercise Price						Number of Options						Weighted Average Exercise Price						Number of Options						Weighted Average Exercise Price
Outstanding as of March 1			2,564,288						$	203.47					3,067,962						$	194.47					2,906,342						$	178.62
Granted			124,418						$	260.11					151,848						$	226.76					479,758						$	254.00
Exercised			(393,016)						$	162.80					(584,302)						$	160.41					(264,025)						$	123.55
Forfeited			(29,237)						$	246.98					(55,351)						$	225.04					(51,102)						$	218.68
Expired			(8,420)						$	245.19					(15,869)						$	196.57					(3,011)						$	189.32
Outstanding as of last day of February			2,258,033						$	212.95					2,564,288						$	203.47					3,067,962						$	194.47
Exercisable			1,761,492						$	203.26					1,702,984						$	193.68					1,747,884						$	179.30

As of February 28, 2025, the aggregate intrinsic value of our options outstanding and exercisable was $12.6 million and $12.6 million, respectively. In addition, the weighted average remaining contractual life for our options outstanding and exercisable was 5.5 years and 4.9 years, respectively.

The fair value of stock options vested, and the intrinsic value of and tax benefit realized from the exercise of stock options, are as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Fair value of stock options vested			$	23.6					$	27.3					$	26.9
Intrinsic value of stock options exercised			$	34.6					$	54.6					$	32.6
Tax benefit realized from stock options exercised			$	5.4					$	10.4					$	7.4

The weighted average grant-date fair value of stock options granted and the weighted average inputs used to estimate the fair value on the date of grant using the Black-Scholes option-pricing model are as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
Grant-date fair value			$	78.32					$	64.75					$	73.16
Expected life (1)			5.8 years						5.8 years						6.3 years
Expected volatility (2)			27.8		%				28.8		%				27.6		%
Risk-free interest rate (3)			4.7		%				3.6		%				3.0		%
Expected dividend yield (4)			1.6		%				1.6		%				1.3		%

(1)Based on historical experience of employees’ exercise behavior for similar type awards.

(2)Based primarily on historical volatility levels of our Class A Stock.

(3)Based on the implied yield currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life.

(4)Based on the calculated yield on our Class A Stock at date of grant using the current fiscal year projected annualized dividend distribution rate.

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A summary of restricted stock unit and performance share unit activity under our Long-Term Stock Incentive Plan is as follows:

			For the Years Ended
			February 28, 2025												February 29, 2024												February 28, 2023
			Number						Weighted Average Grant-Date Fair Value						Number						Weighted Average Grant-Date Fair Value						Number						Weighted Average Grant-Date Fair Value
Restricted Stock Units
Outstanding balance as of March 1, Nonvested			335,614						$	228.75					291,859						$	223.75					291,171						$	202.68
Granted			171,601						$	260.44					192,300						$	227.30					128,743						$	252.53
Vested			(139,589)						$	220.63					(116,937)						$	213.83					(113,541)						$	202.64
Forfeited			(33,641)						$	245.56					(31,608)						$	228.90					(14,514)						$	221.33
Outstanding balance as of last day of February, Nonvested			333,985						$	246.73					335,614						$	228.75					291,859						$	223.75
Performance Share Units
Outstanding balance as of March 1, Nonvested			110,061						$	292.78					85,649						$	302.06					86,641						$	268.12
Granted			57,804						$	290.73					67,734						$	238.01					32,976						$	395.55
Performance achievement (1)			(6,366)						$	318.71					(10,725)						$	202.53					(7,415)						$	316.81
Vested			(14,485)						$	318.71					(21,848)						$	202.53					(21,245)						$	298.25
Forfeited			(6,942)						$	267.90					(10,749)						$	295.07					(5,308)						$	323.44
Outstanding balance as of last day of February, Nonvested			140,072						$	289.31					110,061						$	292.78					85,649						$	302.06

(1)Reflects the net number of awards achieved above (below) target levels based on actual performance measured at the end of the performance period.

The fair value of shares vested for our restricted stock unit and performance share unit awards is as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Restricted stock units			$	35.4					$	27.0					$	27.9
Performance share units			$	3.7					$	5.0					$	5.2

The weighted average grant-date fair value of performance share units granted with a market condition and the weighted average inputs used to estimate the fair value on the date of grant using the Monte Carlo Simulation model are as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
Grant-date fair value			$	324.98					$	251.63					$	395.47
Grant-date price			$	261.71					$	224.38					$	254.21
Performance period			2.9 years						2.9 years						2.9 years
Expected volatility (1)			20.4		%				23.8		%				32.1		%
Risk-free interest rate (2)			4.7		%				3.8		%				2.8		%
Expected dividend yield (3)			0.0		%				0.0		%				0.0		%

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(1)Based primarily on historical volatility levels of our Class A Stock.

(2)Based on the implied yield currently available on U.S. Treasury zero coupon issues with a remaining term equal to the performance period.

(3)No expected dividend yield as units granted earn dividend equivalents.

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan under which 9,000,000 shares of Class A Stock may be issued. Under the terms of the plan, eligible employees may purchase shares of our Class A Stock through payroll deductions. The purchase price is the lower of 85% of the fair market value of the stock on the first or last day of the purchase period. For the years ended February 28, 2025, February 29, 2024, and February 28, 2023, employees purchased 67,405 shares, 59,408 shares, and 57,284 shares, respectively, under this plan.

Other

As of February 28, 2025, there was $57.6 million of total unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under our stock-based employee compensation plans. This cost is expected to be recognized in our results of operations over a weighted-average period of 1.6 years. With respect to the issuance of shares under any of our stock-based compensation plans, we have the option to issue authorized but unissued shares or treasury shares.

19. NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CBI

The computation of basic and diluted net income (loss) per common share for the applicable years ended is as follows:

			February 28, 2025						February 29, 2024
(in millions, except per share data)
Net income (loss) attributable to CBI			$	(81.4)					$	1,727.4
Weighted average common shares outstanding – basic			181.476						183.307
Stock-based awards, primarily stock options (1)			—						0.652
Weighted average common shares outstanding – diluted			181.476						183.959
Net income (loss) per common share attributable to CBI – basic			$	(0.45)					$	9.42
Net income (loss) per common share attributable to CBI – diluted			$	(0.45)					$	9.39

									February 28, 2023
									Class A Stock (1)						Class B Stock (2)
(in millions, except per share data)
Net income (loss) attributable to CBI allocated – basic and diluted									$	(24.0)					$	(47.0)
Weighted average common shares outstanding – basic and diluted									169.337						23.206
Net income (loss) per common share attributable to CBI – basic and diluted									$	(0.11)					$	(2.02)

(1)			We have excluded the following weighted average common shares outstanding from the calculation of diluted net income (loss) per common share, as the effect of including these would have been anti-dilutive, in millions:
									For the Years Ended
									February 28, 2025						February 28, 2023
						Class B Stock			—						16.149
						Stock-based awards, primarily stock options			0.429						0.713
(2)			Net income (loss) per common share attributable to CBI was determined through November 10, 2022, the date the Reclassification was completed.

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

20. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) attributable to CBI includes the following components:

			Before Tax Amount						Tax (Expense) Benefit						Net of Tax Amount
(in millions)
For the Year Ended February 28, 2023
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)			$	255.0					$	—					$	255.0
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			255.0						—						255.0
Unrealized gain (loss) on cash flow hedges:
Net derivative gain (loss)			259.3						(33.2)						226.1
Amounts reclassified			(50.2)						5.1						(45.1)
Net gain (loss) recognized in other comprehensive income (loss)			209.1						(28.1)						181.0
Pension/postretirement adjustments:
Net actuarial gain (loss)			0.1						—						0.1
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			0.1						—						0.1
Share of OCI of equity method investments:
Net gain (loss)			2.6						2.5						5.1
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			2.6						2.5						5.1
Other comprehensive income (loss) attributable to CBI			$	466.8					$	(25.6)					$	441.2
For the Year Ended February 29, 2024
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)			$	279.3					$	—					$	279.3
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			279.3						—						279.3
Unrealized gain (loss) on cash flow hedges:
Net derivative gain (loss)			222.1						(26.4)						195.7
Amounts reclassified			(144.7)						16.7						(128.0)
Net gain (loss) recognized in other comprehensive income (loss)			77.4						(9.7)						67.7
Pension/postretirement adjustments:
Net actuarial gain (loss)			2.1						(0.8)						1.3
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			2.1						(0.8)						1.3
Other comprehensive income (loss) attributable to CBI			$	358.8					$	(10.5)					$	348.3

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

			Before Tax Amount						Tax (Expense) Benefit						Net of Tax Amount
(in millions)
For the Year Ended February 28, 2025
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)			$	(786.7)					$	—					$	(786.7)
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			(786.7)						—						(786.7)
Unrealized gain (loss) on cash flow hedges:
Net derivative gain (loss)			(172.4)						20.9						(151.5)
Amounts reclassified			(105.3)						12.4						(92.9)
Net gain (loss) recognized in other comprehensive income (loss)			(277.7)						33.3						(244.4)
Pension/postretirement adjustments:
Net actuarial gain (loss)			3.1						(0.9)						2.2
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			3.1						(0.9)						2.2
Share of OCI of equity method investments:
Net gain (loss)			—						—						—
Amounts reclassified			(10.7)						0.1						(10.6)
Net gain (loss) recognized in other comprehensive income (loss)			(10.7)						0.1						(10.6)
Other comprehensive income (loss) attributable to CBI			$	(1,072.0)					$	32.5					$	(1,039.5)

Accumulated other comprehensive income (loss), net of income tax effect, includes the following components:

			Foreign Currency Translation Adjustments						Unrealized Net Gain (Loss) on Derivative Instruments												Pension/ Postretirement Adjustments						Share of OCI of Equity Method Investments						Accumulated Other Comprehensive Income (Loss)
(in millions)
Balance, February 29, 2024			$	102.9					$	266.2											$	(2.6)					$	10.3					$	376.8
Other comprehensive income (loss):
Other comprehensive income (loss) before reclassification adjustments			(786.7)						(151.5)												2.2						—						(936.0)
Amounts reclassified from accumulated other comprehensive income (loss)			—						(92.9)												—						(10.6)						(103.5)
Other comprehensive income (loss)			(786.7)						(244.4)												2.2						(10.6)						(1,039.5)
Balance, February 28, 2025			$	(683.8)					$	21.8											$	(0.4)					$	(0.3)					$	(662.7)

21. SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK

Net sales to our 10 largest customers represented approximately 59%, 58%, and 55% of our net sales for the years ended February 28, 2025, February 29, 2024, and February 28, 2023, respectively, and are expected to continue to represent a significant portion of our revenues. Net sales to customers which individually amount to

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PART II			ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			Table of Contents

10% or more of our net sales, and the associated amounts receivable from these customers as a percentage of our accounts receivable, are as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
Reyes Beer Division entities
Net sales			25.4		%				25.1		%				22.7		%
Accounts receivable			15.0		%				17.7		%				15.6		%
Southern Glazer’s Wine and Spirits
Net sales			11.2		%				11.7		%				13.0		%
Accounts receivable			32.9		%				28.1		%				24.0		%

Net sales for the above customers are primarily reported within the Beer and Wine and Spirits segments, respectively. Our arrangements with certain of our customers may, generally, be terminated by either party with prior notice. The majority of our accounts receivable balance is generated from sales to independent distributors with whom we have a predetermined collection date arranged through electronic funds transfer. We perform ongoing credit evaluations of our customers’ financial position, and management is of the opinion that any risk of significant loss is reduced due to the diversity of our customers and geographic sales area.

22. BUSINESS SEGMENT INFORMATION

Our internal management financial reporting consists of two business divisions: (i) Beer and (ii) Wine and Spirits and we report our operating results in three segments: (i) Beer, (ii) Wine and Spirits, and (iii) Corporate Operations and Other. In the Beer segment, our portfolio consists of high-end imported beer brands and ABAs. We have an exclusive perpetual brand license to produce our Mexican beer portfolio and to import, market, and sell such portfolio in the U.S. In the Wine and Spirits segment, we sell a portfolio that includes higher-end wine brands complemented by certain higher-end spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of corporate communications, corporate development, corporate finance, corporate strategy and growth, executive management, human resources, internal audit, investor relations, IT, legal, and public affairs, as well as our Canopy investment and investments made through our corporate venture capital function. All costs included in the Corporate Operations and Other segment are general costs that are applicable to the consolidated group and are, therefore, not allocated to the other reportable segments. All costs reported within the Corporate Operations and Other segment are not included in our CODM’s evaluation of the operating income (loss) performance of the other reportable segments. Our CODM is our President and Chief Executive Officer. The business segments reflect how our operations are managed, how resources are allocated, how operating performance is evaluated by senior management, and the structure of our internal financial reporting. Long-lived tangible assets and total asset information by segment is not provided to, or reviewed by, our CODM as it is not used to make strategic decisions, allocate resources, or assess performance. Our CODM utilizes segment comparable operating income (loss) performance in deciding how to deploy capital in line with disciplined and balanced priorities. These priorities largely include investing in our people and our brands, making capital investments and strategic acquisitions, providing a cash dividend program, and from time-time time, repurchasing shares of our common stock. Our CODM also monitors budgeted versus actual results in assessing segment operating performance and understanding underlying business trends.

Management excludes Comparable Adjustments from its evaluation of the results of each operating segment as these Comparable Adjustments are not reflective of core operations of the segments. Segment operating performance and the incentive compensation of segment management are evaluated based on core segment operating income (loss) which does not include the impact of these Comparable Adjustments, collectively referred to as comparable operating income (loss). We evaluate segment operating performance based on comparable operating income (loss) of the respective business units.

The accounting policies of the segments are the same as those described for the Company in the Summary of Significant Accounting Policies in Note 1. Segment information is as follows:

			Beer						Wine and Spirits						Corporate Operations and Other						Consolidated
(in millions)
For the Year Ended February 28, 2025
Net sales			$	8,539.8					$	1,668.9					$	—					$	10,208.7
Cost of product sold (1)			(3,973.7)						(926.6)						—
Marketing			(769.0)						(162.2)						—
% Net sales			9.0		%				9.7		%
General and administrative expenses (1)			(402.7)						(255.0)						(244.6)
Comparable operating income (loss) (1)			$	3,394.4					$	325.1					$	(244.6)					3,474.9
Operating margin			39.7		%				19.5		%
Comparable adjustments (2)																					(3,120.0)
Operating income (loss)																					354.9
Income (loss) from unconsolidated investments (3)																					(26.3)
Interest expense, net (4)																					(411.4)
Income (loss) before income taxes																					$	(82.8)
Capital expenditures			$	991.5					$	177.0					$	45.6					$	1,214.1
Depreciation and amortization			$	341.1					$	84.2					$	21.7					$	447.0
% Net sales			4.0		%				5.0		%
For the Year Ended February 29, 2024
Net sales			$	8,162.6					$	1,799.2					$	—					$	9,961.8
Cost of product sold (1)			(3,948.4)						(963.1)						—
Marketing			(688.5)						(165.0)						—
% Net sales			8.4		%				9.2		%
General and administrative expenses (1)			(431.3)						(272.4)						(247.6)
Comparable operating income (loss) (1)			$	3,094.4					$	398.7					$	(247.6)					3,245.5
Operating margin			37.9		%				22.2		%
Comparable adjustments (2)																					(75.8)
Operating income (loss)																					3,169.7
Income (loss) from unconsolidated investments (3)																					(511.8)
Interest expense, net (4)																					(436.1)
Income (loss) before income taxes																					$	2,221.8
Capital expenditures			$	947.9					$	185.6					$	135.6					$	1,269.1
Depreciation and amortization			$	323.9					$	88.8					$	16.5					$	429.2
% Net sales			4.0		%				4.9		%
For the Year Ended February 28, 2023
Net sales			$	7,465.0					$	1,987.6					$	—					$	9,452.6
Cost of product sold (1)			(3,527.2)						(1,060.4)						—
Marketing			(676.8)						(184.0)						—
% Net sales			9.1		%				9.3		%
General and administrative expenses (1)			(399.6)						(290.1)						(277.9)
Comparable operating income (loss) (1)			$	2,861.5					$	453.1					$	(277.9)					3,036.7
Operating margin			38.3		%				22.8		%
Comparable adjustments (2)																					(193.8)
Operating income (loss)																					2,842.9
Income (loss) from unconsolidated investments (3)																					(2,036.4)
Interest expense, net (4)																					(422.9)
Income (loss) before income taxes																					$	383.6
Capital expenditures			$	813.9					$	151.8					$	69.7					$	1,035.4
Depreciation and amortization			$	285.4					$	83.2					$	18.4					$	387.0
% Net sales			3.8		%				4.2		%

(1)Amounts are determined and presented on a non-GAAP basis and are intended to reflect our core operations.

(2)Comparable Adjustments that impacted comparability in our segment operating income (loss) for each period are as follows:

						For the Years Ended
						February 28, 2025						February 29, 2024						February 28, 2023
			(in millions)
			Cost of product sold
			Strategic business reconfiguration costs			$	(10.7)					$	—					$	(1.2)
			Flow through of inventory step-up			(10.2)						(3.6)						(4.5)
			Net gain (loss) on undesignated commodity derivative contracts			(0.3)						(44.2)						(15.0)
			Settlements of undesignated commodity derivative contracts			26.8						15.0						(76.7)
			Other gains (losses)			0.6						—						1.4
			Comparable Adjustments, Cost of product sold			6.2						(32.8)						(96.0)
			Selling, general, and administrative expenses
			Restructuring and other strategic business reconfiguration costs			(79.3)						(46.3)						(9.9)
			Transition services agreements activity			(22.6)						(24.9)						(20.5)
			Transaction, integration, and other acquisition-related costs			(1.2)						(0.6)						(1.4)
			Insurance recoveries			—						55.1						5.2
			Long-lived assets impairment			—						—						(53.5)
			Other gains (losses) (i)			(13.4)						(11.2)						(19.7)
			Comparable Adjustments, selling, general, and administrative expenses			(116.5)						(27.9)						(99.8)
			Goodwill and intangible assets impairment			(2,797.7)						—						(13.0)
			Assets held for sale impairment			(478.0)						—						—
			Gain (loss) on sale of business			266.0						(15.1)						15.0
			Comparable Adjustments, Operating income (loss)			$	(3,120.0)					$	(75.8)					$	(193.8)

(i)			Primarily includes the following:
						For the Years Ended
						February 28, 2025						February 29, 2024						February 28, 2023
			(in millions)
			Net loss on foreign currency as a result of the resolution of various tax examinations and assessments			$	(20.7)					$	—					$	—
			Decreases in estimated fair values of contingent liabilities associated with prior period acquisitions			$	7.0					$	2.0					$	12.9
			Net loss from changes in the indemnification of liabilities associated with prior period divestitures			$	—					$	(12.7)					$	—
			Costs associated with the Reclassification			$	—					$	0.2					$	(37.8)
			Gain from remeasurement of previously held equity method investments			$	—					$	—					$	5.2

(3)			Income (loss) from unconsolidated investments consists of:
									For the Years Ended
									February 28, 2025						February 29, 2024						February 28, 2023
						(in millions)
						Unrealized net gain (loss) on securities measured at fair value (ii)			$	(47.9)					$	(85.4)					$	(45.9)
						Equity method investments impairment			(8.7)						(136.1)						(1,060.3)
						Equity in earnings (losses) from other equity method investees and related activities			23.1						31.0						19.1
						Net gain in connection with Exchangeable Shares (ii)			7.2						—						—
						Equity in earnings (losses) from Canopy and related activities			—						(321.3)						(949.3)
									$	(26.3)					$	(511.8)					$	(2,036.4)
			(ii)			Effective as of May 31, 2023, we determined that the 2023 Canopy Promissory Note did not have future economic value given the substantial doubt about Canopy’s ability to continue as a going concern, as disclosed by Canopy, prior to the maturity of the note. Accordingly, the fair value of the remaining balance for this instrument was determined to be zero. In April 2024, we exchanged the 2023 Canopy Promissory Note for Exchangeable Shares. Additionally, as of November 30, 2024 and February 28, 2025, we impaired our Exchangeable Shares.
(4)			Interest expense, net consists of:
									For the Years Ended
									February 28, 2025						February 29, 2024						February 28, 2023
						(in millions)
						Interest expense			$	(418.4)					$	(443.6)					$	(415.9)
						Interest income			7.0						8.2						17.2
						Loss on extinguishment of debt			—						(0.7)						(24.2)
									$	(411.4)					$	(436.1)					$	(422.9)

Our principal area of operation is in the U.S. Current operations outside the U.S. are in Mexico for the Beer segment and primarily in New Zealand and Italy for the Wine and Spirits segment. Revenues are attributed to countries based on the location of the customer.

Geographic data is as follows:

			For the Years Ended
			February 28, 2025						February 29, 2024						February 28, 2023
(in millions)
Net sales
U.S.			$	10,016.4					$	9,748.1					$	9,194.5
Non-U.S. (1)			192.3						213.7						258.1
			$	10,208.7					$	9,961.8					$	9,452.6

(1)Consists primarily of Canada and Italy for the year ended February 28, 2025, and primarily of Canada and New Zealand for the years ended February 29, 2024, and February 28, 2023.

			February 28, 2025						February 29, 2024
(in millions)
Long-lived tangible assets (1)
U.S.			$	898.9					$	1,304.6
Non-U.S. (primarily Mexico)			6,510.9						6,750.6
			$	7,409.8					$	8,055.2

(1)Long-lived tangible assets balance at February 28, 2025, and February 29, 2024, excludes amounts reclassified to assets held for sale.

23. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

A summary of selected quarterly financial information is as follows:

			For the Three Months Ended
			February 28, 2025						February 29, 2024
(in millions, except per share data)
Net sales			$	2,164.2					$	2,139.2
Gross profit			$	1,114.7					$	1,039.2
Net income (loss) attributable to CBI (1)			$	(375.3)					$	392.4
Net income (loss) per common share attributable to CBI (1):
Basic – Class A Stock			$	(2.09)					$	2.15
Diluted – Class A Stock			$	(2.09)					$	2.14

(1)Includes the following:

						For the Three Months Ended
						February 28, 2025						February 29, 2024
			(in millions, net of income tax effect)
			Goodwill and intangible assets impairment			$	(497.6)					$	—
			Assets held for sale impairment			$	(364.2)					$	—
			Net income tax expense recognized for adjustments to valuation allowances			$	(73.3)					$	—
			Unrealized net gain (loss) on securities measured at fair value			$	(45.4)					$	—
			Gain (loss) on sale of business			$	195.0					$	—
			Insurance recoveries			$	—					$	45.8
			Equity in earnings (losses) from Canopy			$	—					$	(31.7)

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PART II			OTHER KEY INFORMATION			Table of Contents