Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Introduction

This MD&A provides additional information on our businesses, current developments, financial condition, cash flows, and results of operations. It should be read in conjunction with our Financial Statements and with our consolidated financial statements and notes included in our 2024 Annual Report. This MD&A is organized as follows:

Overview. This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition, and potential future trends.

Strategy. This section provides a description of our strategy and a discussion of a recent development and significant divestitures, acquisitions, and investments.

Results of operations. This section provides an analysis of our results of operations presented on a business segment basis for the three months ended November 30, 2024, and November 30, 2023, and nine months ended November 30, 2024, and November 30, 2023. In addition, a brief description of significant transactions and other items that affect the comparability of the results is provided.

Liquidity and capital resources. This section provides an analysis of our cash flows, outstanding debt, and liquidity position. Included in the analysis of outstanding debt is a discussion of the financial capacity available to fund our on-going operations and future commitments, as well as a discussion of other financing arrangements.

Overview

We are an international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy with powerful, consumer-connected, high-quality brands like Corona Extra, Modelo Especial, Robert Mondavi Winery, Kim Crawford, Meiomi, The Prisoner Wine Company, High West, Casa Noble, and Mi CAMPO. In the U.S., we are one of the top growth contributors at retail among beverage alcohol suppliers. We are the second-largest beer company in the U.S. and continue to strengthen our leadership position as the #1 share gainer in the high-end beer segment and the overall U.S. beer market. In Fiscal 2024, Modelo Especial became the #1 beer brand in the U.S. beer market in dollar sales and continues to hold that position. Within wine and spirits, we have reshaped our brand portfolio to a higher-end focused business and continue our efforts to expand our supply channels through DTC and international markets. The strength of our brands makes us a supplier of choice to many of our consumers and our customers, which include wholesale distributors, retailers, and on-premise locations. We conduct our business through entities we wholly own as well as through a variety of joint ventures and other entities.

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


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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 development, corporate finance, corporate strategy, executive management, growth, human resources, internal audit, investor relations, IT, legal, and public relations, 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. 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.

Goodwill impairment

As of August 31, 2024, in connection with 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. Based on the aforementioned factors, we performed an interim quantitative assessment for goodwill impairment which 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. This loss from impairment was included in goodwill impairment within our consolidated results for Nine Months 2025. See Notes 4, 5, and 9 for further discussion.

Strategy

Business strategy

Our overall strategic vision is to consistently deliver industry-leading total stockholder returns over the long-term through a focus on these key pillars:

continue building strong brands people love with advantaged routes to market;
build a culture that is consumer-obsessed and leverages robust innovation capabilities to stay on the forefront of consumer trends;
deploy capital in line with disciplined and balanced priorities;
deliver on impactful ESG initiatives that we believe are not only good business, but also good for the world; and
empower the whole enterprise to achieve best-in-class operational efficiency.

We will continue to strive for success by ensuring consumer-led decision making drives all aspects of our business; building a diverse talent pipeline with best-in-class people development; investing in infrastructure that supports and enables our business, including data systems and architecture; and exemplifying intentional and proactive fiscal management. We place focus on positioning our portfolio on higher-margin, higher-growth categories of the beverage alcohol industry to align with consumer-led premiumization, product, and purchasing trends, which we anticipate will continue to drive faster relative growth rates across beer, wine, and spirits. To continue capitalizing on consumer-led premiumization trends, become more competitive, and grow our business, we have employed a strategy dedicated to organic growth and supplemented by targeted investments and acquisitions. We also believe a key component to driving faster relative growth rates is to invest and strengthen our position within the DTC and 3-tier eCommerce channels. We intend for our multi-year Digital Business Acceleration initiative to enable us to drive results by enhancing our technology capabilities in key areas. In Fiscal 2025, we continue to focus on end-to-end digital supply chain planning, logistics, and procurement, as well as introducing a new focus area, revenue growth management. Additionally, we believe our continued focus on maintaining a strong balance sheet provides a solid financial foundation to support our broader strategic initiatives.


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Our business strategy for the Beer segment focuses on upholding our leadership position in the U.S. beer market, including the high-end segment, and continuing to grow our high-end imported beer brands through maintenance of leading margins, enhancements to our results of operations and operating cash flow, and exploring new avenues for growth. This includes continued focus on growing our beer portfolio in the U.S. through expanding distribution for key brands, including within the 3-tier eCommerce channel, as well as investing in the next increment of modular capacity additions required to sustain our momentum. We continue to focus on consumer-led innovation by creating new line extensions behind celebrated, trusted brands and package formats, as well as new to world brands, that are intended to meet emerging needs. Additionally, expansion, optimization, and/or construction activities continue under our Mexico Beer Projects to align with our anticipated future growth expectations.

Our business strategy for the Wine and Spirits segment continues to focus on delivering growth and improving margins by driving our higher-end brands and operating efficiencies, while also seeking to deliver value from our mainstream brands. We have reshaped our portfolio through an enhanced focus on higher-end, higher-margin, and higher-growth wine and spirits brands. Our business is organized into three distinct category-based teams focused on (i) U.S. wine, (ii) international wine, and (iii) spirits. While each team has its own distinct brand execution strategy, all three remain aligned to the goal of accelerating performance by growing organic net sales and expanding margins. In addition, we are advancing our aim to become a global, omni-channel competitor in line with evolving consumer preferences. Our business continues its efforts to progressively expand into DTC channels (including hospitality), 3-tier eCommerce, and international markets, while remaining a major supplier in U.S. 3-tier brick-and-mortar distribution. In markets where it is feasible, we entered into a contractual arrangement with Southern Glazer’s Wine and Spirits to consolidate our U.S. distribution in order to obtain dedicated distributor selling resources which focus on our U.S. wine and spirits portfolio to drive organic growth.

Marketing, sales, and distribution of our products are primarily managed on a geographic basis allowing us to leverage leading market positions. In addition, market dynamics and consumer trends vary across each of our markets. Within our primary market in the U.S., we offer a range of beverage alcohol products across the imported beer, ABA, and branded wine and spirits categories, with generally separate distribution networks utilized for (i) our beer portfolio and (ii) our wine and spirits portfolio. The environment for our products is competitive in each of our markets.

We remain committed to our long-term financial model of: growing sales, expanding margins, and increasing cash flow in order to continue to achieve comparable earnings per share growth as well as our target net leverage ratio on a comparable basis and target dividend payout ratio; investing to support the growth of our business; and delivering additional returns to stockholders through periodic share repurchases. Our results of operations and financial condition have been affected by macroeconomic headwinds, including rising unemployment, inflation, changing prices, other unfavorable global and regional economic conditions, global supply chain disruptions and constraints, and geopolitical events, as well as reductions in the discretionary income of consumers available to purchase our products and shifting consumer behaviors. Additionally, ongoing macroeconomic headwinds, particularly rising unemployment, have led to a recent deceleration in the rate of growth of consumer demand for our products. We are also monitoring potential changes to trade and tariff policies, particularly on imports from Mexico into the U.S. and possible retaliatory tariffs imposed by the Mexican government. We expect some or all of these impacts to continue during the remainder of Fiscal 2025 which could have a material impact on our results of operations. We intend to continue to monitor the economic environment, the shifting behavior of consumers, and their impacts on our business. In addition, we are continuing our commodity and foreign exchange hedging programs while also seeking to identify additional cost savings, inventory management, and efficiency initiatives. However, there can be no assurance that we will be able to fully mitigate rising costs, including as a result of potential new tariffs, through increased selling prices, cost savings, inventory management, and efficiency initiatives, and/or our commodity and foreign exchange hedging programs. Furthermore, to the extent climate-related severe weather events, such as droughts, floods, wildfires, extreme heat, and/or late frosts, or other weather conditions that constrain consumer purchasing occasions, continue to occur or accelerate in future periods, it could have a material impact on our results of operations and financial condition.


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ESG strategy

During the course of our history, we have been committed to safeguarding our environment, making a positive difference in our communities, and advocating for responsible consumption of beverage alcohol products. We believe our ESG strategy enables us to better meet stakeholder expectations and create and protect value for our business, reflects our Company values, and directly addresses pressing environmental and societal needs that are important to our stockholders, communities, consumers, and employees.

Specifically, we have focused on areas where we believe we have the greatest opportunities to make meaningful, positive impacts for people and the planet in a manner that strengthens our Company, and we dedicate our resources towards:

Serving as good stewards of our environment and natural resources

Improving water availability and resilience for our communities where we operate; reducing GHG emissions through energy conservation and renewable energy initiatives; and reducing operational waste and enhancing our use of returnable, recyclable, or renewable packaging

Enhancing social equity within our industry and communities

Championing the professional development and advancement of women in the beverage alcohol industry and our communities; enhancing economic development and prosperity in disadvantaged communities; and championing an inclusive workplace culture, characterized by diversity in background and thought, which reflects our consumers and the communities where we live and work

Promoting responsible beverage alcohol consumption

Ensuring the responsible promotion and marketing of our products; and empowering adults to make responsible choices in their alcohol (substance) consumption by supporting fact-based education, engagement programs, and policies

Recent Development

SVEDKA Divestiture

On January 6, 2025, we sold the SVEDKA brand and related assets, primarily including inventory and equipment. We received $409.2 million of cash proceeds, subject to certain post-closing adjustments, which will be used primarily for general corporate purposes. Prior to the completion of the SVEDKA Divestiture, we recorded the results of operations of the SVEDKA brand in the Wine and Spirits segment. We expect to recognize a gain of $250 million to $275 million in connection with this divestiture. This gain will be included within our consolidated results of operations for Fiscal 2025. This transaction supports our strategic focus on consumer-led premiumization trends and meeting the evolving needs of our consumer.

Divestitures, Acquisitions, and Investments

Beer segment

Mexicali Brewery

In July 2024, we sold the remaining assets classified as held for sale at the canceled Mexicali Brewery.

Craft Beer Divestitures

In June 2023, we completed the Craft Beer Divestitures. Accordingly, our consolidated results of operations include the results of operations of such craft beer brands through the dates of these divestitures. The Craft Beer Divestitures are consistent with our strategic focus on continuing to grow our high-end imported beer brands through maintenance of leading margins and enhancements to our results of operations.

Daleville Facility

In May 2023, we sold the Daleville Facility in connection with our decision to exit the craft beer business.


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Wine and Spirits segment

Nelson’s Green Brier investment

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.

Sea Smoke acquisition

In June 2024, we acquired the Sea Smoke business, including a California-based luxury wine brand, vineyards, and a production facility. 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.

These Wine and Spirits segment activities support our strategic focus on consumer-led premiumization trends and meeting the evolving needs of our consumers.

Corporate Operations and Other segment

Corporate ventures

As of August 31, 2024, and November 30, 2023, we evaluated certain equity method investments, made through our corporate venture capital function, and determined there were other-than-temporary impairments due to business underperformance, for the respective periods.

As of August 31, 2023, we evaluated certain equity method investments, made through our corporate venture capital function, and determined there were other-than-temporary impairments due to business underperformance. Investments with a $14.9 million carrying value were written down to $2.6 million, their estimated fair value, resulting in a $12.3 million impairment. This loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for Nine Months 2024. In October 2023, we exited one of these equity method investments in exchange for a note receivable.

Canopy investment

We have an investment in Canopy, a North American cannabis and CPG company providing medical and adult-use cannabis products, which expands our portfolio into adjacent categories.

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 accordingly, the Exchangeable Shares with a $97.3 million carrying value were written down to $58.7 million, their estimated fair value, resulting in a $38.6 million impairment. This loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for Third Quarter 2025 and Nine Months 2025.

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 our 2023 Canopy Promissory Note 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 based on the fair value of Exchangeable Shares on the date of the conversion and exchange. This net gain is included in income (loss) from unconsolidated investments within our consolidated results for Nine Months 2025.

Canopy Equity Method Investment —

We evaluated the 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


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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 $266.2 million carrying value was written down to $142.7 million, its estimated fair value, resulting in a $123.5 million impairment. This loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for Nine Months 2024. 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.

Other Canopy investments —

In April 2023, we extended the maturity of the remaining C$100.0 million principal amount of our then-existing Canopy Debt Securities by exchanging them for the 2023 Canopy Promissory Note. The fair value of the Canopy Debt Securities was $69.6 million as of February 28, 2023. As of May 31, 2023, we determined that the 2023 Canopy Promissory Note did not have future economic value and, accordingly, the fair value was reduced to zero.

For additional information on this recent development and these divestitures, acquisitions, and investments refer to Notes 4, 5, 7, and 11.

Results of Operations

Financial Highlights

Third Quarter 2025 compared with Third Quarter 2024

Our results of operations were positively impacted by (i) no longer recognizing equity losses from Canopy’s results following the conversion of our Canopy common shares to Exchangeable Shares and (ii) improvements within the Beer segment as a successful execution of cost savings initiatives and a favorable impact from pricing outpaced higher marketing spend as compared to Third Quarter 2024, partially offset by (i) a Third Quarter 2025 impairment of our Exchangeable Shares and (ii) a decline in Wine and Spirits segment net sales.
Net sales remained relatively flat** as a decline in Wine and Spirits net sales led by a decrease in branded shipment volume were offset by an increase in Beer net sales driven primarily by the favorable pricing and shipment volume growth.
Operating income remained relatively flat** as the decline in Wine and Spirits segment net sales was offset by (i) lower losses recognized on undesignated commodity derivative contracts for Third Quarter 2025 as compared to Third Quarter 2024 and (ii) improvements within the Beer segment as the successful execution of cost savings initiatives and the favorable pricing outpaced the higher marketing spend.

*•*Net income attributable to CBI and diluted net income per common share attributable to CBI increased 21% and 23%, respectively, largely due to lower provision for income taxes and the items discussed above.

Nine Months 2025 compared to Nine Months 2024

Our results of operations were negatively impacted by the Nine Months 2025 Wine and Spirits goodwill impairment and a decline in the Wine and Spirits segment driven by a decrease in branded shipment volume, partially offset by (i) no longer recognizing equity losses from Canopy’s results following the conversion of our Canopy common shares to Exchangeable Shares, (ii) improvements within the Beer segment driven by 4.6% shipment volume growth and our successful execution of cost savings initiatives, (iii) a Nine Months 2024 impairment of our then-existing Canopy Equity Method


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Investment, (iv) a decrease in unrealized net losses on securities measured at fair value, and (v) a net gain in connection with Exchangeable Shares for the Nine Months 2025.

Net sales increased 3%** largely due to an increase in Beer net sales driven primarily by shipment volume growth and favorable impact from pricing, partially offset by a decline in Wine and Spirits net sales led by a decrease in branded shipment volume.
Operating income decreased 80%** largely due to the Nine Months 2025 Wine and Spirits goodwill impairment, partially offset by the improvements within the Beer segment resulting from shipment volume growth, lower cost of product sold, driven by the successful execution of cost savings initiatives, and favorable pricing.
Net income attributable to CBI** and diluted net income per common share attributable to CBI each decreased 78% largely due to the items discussed above, partially offset by a Nine Months 2025 benefit from income taxes as compared to a provision for income taxes for Nine Months 2024.

Comparable Adjustments

Management excludes items that affect comparability 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.

As more fully described herein and in the related Notes, the Comparable Adjustments that impacted comparability in our segment results for each period are as follows:


	Third Quarter 2025		Third Quarter 2024		Nine Months 2025		Nine Months 2024
(in millions)
Cost of product sold
Settlements of undesignated commodity derivative contracts	$	8.3	$	2.3	$	23.8	$	8.5
Flow through of inventory step-up	(5.2)		(1.2)		(7.6)		(2.7)
Net gain (loss) on undesignated commodity derivative contracts	(0.8)		(13.3)		(10.5)		(28.9)





Comparable Adjustments, Cost of product sold	2.3		(12.2)		5.7		(23.1)

Selling, general, and administrative expenses
Transition services agreements activity	(8.3)		(5.2)		(15.9)		(17.9)
Restructuring and other strategic business development costs	(3.6)		(5.3)		(29.9)		(23.6)
Transaction, integration, and other acquisition-related costs	(0.1)		—		(0.9)		(0.6)

Other gains (losses)	0.5		(0.2)		(19.8)		(9.3)
Comparable Adjustments, Selling, general, and administrative expenses	(11.5)		(10.7)		(66.5)		(51.4)

Goodwill impairment	—		—		(2,250.0)		—



Comparable Adjustments, Operating income (loss)	$	(9.2)	$	(22.9)	$	(2,310.8)	$	(74.5)

Comparable Adjustments, Income (loss) from unconsolidated investments	$	(38.9)	$	(61.0)	$	39.9	$	(452.8)


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Cost of product sold

Undesignated commodity derivative contracts

Net gain (loss) on undesignated commodity derivative contracts represents a net gain (loss) from the changes in fair value of undesignated commodity derivative contracts. The net gain (loss) is reported outside of segment operating results until such time that the underlying exposure is recognized in the segment operating results. At 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 the results of our operating segments to reflect the economic effects of the commodity derivative contracts without the resulting unrealized mark to fair value volatility.

Flow through of inventory step-up

In connection with acquisitions, the allocation of purchase price in excess of book value for certain inventories on hand at the date of acquisition is referred to as inventory step-up. Inventory step-up represents an assumed manufacturing profit attributable to the acquired business prior to acquisition.

Selling, general, and administrative expenses

Transition services agreements activity

We recognized costs in connection with transition services agreements related to the previous sale of a portion of our wine and spirits business.

Restructuring and other strategic business development costs

We recognized costs in connection with certain activities which are intended to streamline, increase efficiencies, and reduce our cost structure primarily within our Wine and Spirits segment.

Transaction, integration, and other acquisition-related costs

We recognized costs in connection with our investments, acquisitions, and divestitures.

Other gains (losses)

We recognized other gains (losses) primarily from (i) a net loss on foreign currency as a result of the resolution of various tax examinations and assessments (Nine Months 2025), (ii) losses on the sales of the Daleville Facility and Craft Beer Divestitures (Nine Months 2024), and (iii) recognition of a previously deferred gain upon release of a related indemnity (Nine Months 2024).

Goodwill impairment

We recognized a goodwill impairment in connection with negative trends within our Wine and Spirits business (Nine Months 2025). For additional information, refer to Notes 4, 5, and 9.

Income (loss) from unconsolidated investments

We recognized income (loss) primarily from (i) a net gain (loss) in connection with Exchangeable Shares (Third Quarter 2025, Nine Months 2025), (ii) comparable adjustments to equity in losses from Canopy’s results (Third Quarter 2024, Nine Months 2024), (iii) an impairment of our then-existing Canopy Equity Method Investment (Nine Months 2024), (iv) unrealized net losses from the changes in fair value of our securities measured at fair value (Nine Months 2025, Third Quarter 2024, Nine Months 2024), (v) impairment of our Exchangeable Shares (Third Quarter 2025, Nine Months 2025), and (vi) impairments of certain other equity method investments. For additional information, refer to Notes 4 and 7.


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Business Segments

Third Quarter 2025 compared to Third Quarter 2024

Net sales


	Third Quarter 2025		Third Quarter 2024		Dollar Change		Percent Change
(in millions)
Beer	$	2,032.4	$	1,968.5	$	63.9	3	%
Wine and Spirits:
Wine	374.6		435.8		(61.2)		(14	%)
Spirits	56.8		66.6		(9.8)		(15	%)
Total Wine and Spirits	431.4		502.4		(71.0)		(14	%)

Consolidated net sales	$	2,463.8	$	2,470.9	$	(7.1)	(0	%)


	Beer segment	Third Quarter 2025		Third Quarter 2024		Dollar Change		Percent Change
(in millions, branded product, 24-pack, 12-ounce case equivalents)
Net sales		$	2,032.4	$	1,968.5	$	63.9	3	%


Shipments		102.7		101.1				1.6	%


Depletions								3.2	%

The increase in Beer net sales is due to (i) $39.2 million of favorable impact from pricing in select markets and (ii) $31.2 million of shipment volume growth, partially offset by $6.5 million of unfavorable product mix primarily from a shift in package types. While our shipment volume growth benefited from continued consumer demand, we believe it was negatively impacted by subdued overall spend and prolonged value seeking behavior among consumers. Additionally, shipments trailed depletions due to normal seasonality and the impact of planned maintenance activities at our breweries.


	Wine and Spirits segment	Third Quarter 2025		Third Quarter 2024		Dollar Change		Percent Change
(in millions, branded product, 9-liter case equivalents)
Net sales		$	431.4	$	502.4	$	(71.0)	(14	%)


Shipments		5.1		6.1				(16.4	%)


U.S. Wholesale shipments		4.3		5.4				(20.4	%)






Depletions								(4.3	%)

The decrease in Wine and Spirits net sales is largely driven by (i) a $74.8 million decrease in branded wine and spirits shipment volume, (ii) a $12.2 million decrease in non-branded net sales led by a decline in bulk wine sales, and (iii) a $7.8 million decrease from pricing actions in certain markets, as well as a $2.5 million decrease in contractual distributor payments as compared to Third Quarter 2024, partially offset by $26.4 million of favorable product mix driven by consumer-led premiumization. The decrease in branded wine and spirits shipment volume is attributable to our U.S. wholesale market, primarily driven by declines in both the overall wine market and in our mainstream and premium wine brands, as well as retailer inventory destocking.


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Gross profit


	Third Quarter 2025		Third Quarter 2024		Dollar Change		Percent Change
(in millions)
Beer	$	1,076.7	$	1,039.1	$	37.6	4	%
Wine and Spirits	205.3		243.7		(38.4)		(16	%)
Comparable Adjustments	2.3		(12.2)		14.5		NM
Consolidated gross profit	$	1,284.3	$	1,270.6	$	13.7	1	%


			The increase in Beer gross profit is due to (i) the $39.2 million favorable impact from pricing and (ii) $16.5 million of shipment volume growth, partially offset by (i) $14.9 million of increased cost of product sold and (ii) $3.2 million of unfavorable product mix. The higher cost of product sold is primarily due to (i) $15.1 million of higher depreciation resulting from the Mexico Beer Projects, (ii) a $9.4 million increase in brewery costs, including compensation and benefits, and (iii) $8.1 million of higher material costs, including malt and aluminum, partially offset by $5.9 million of favorable foreign currency translation benefit and (i) $5.6 million of decreased transportation costs and (ii) $4.1 million of favorable fixed cost absorption related to increased production levels as compared to Third Quarter 2024, each driven by efficiency initiatives. To partially offset the increase in cost of product sold we are executing efficiency initiatives focused largely on logistics and procurement that resulted in almost $40 million of cost savings for Third Quarter 2025.


			The decrease in Wine and Spirits gross profit is attributable to a $43.2 million decline in branded wine and spirits shipment volume and the $7.8 million impact from pricing actions in certain markets, as well as the $2.5 million decrease in contractual distributor payments, partially offset by $15.5 million of reduced cost of product sold. The decrease in cost of product sold was largely attributable to lower operational costs, including transportation and warehousing costs, partially offset by increased raw materials costs, including grapes, and unfavorable fixed cost absorption related to decreased production levels as compared to Third Quarter 2024.

Gross profit as a percent of net sales increased to 52.1% for Third Quarter 2025 compared with 51.4% for Third Quarter 2024. This increase was largely due to (i) approximately 80 basis points of favorable impact from Beer pricing, (ii) approximately 65 basis points of rate growth from lower cost of product sold within the Wine and Spirits segment, and (iii) a favorable change in Comparable Adjustments, contributing 60 basis points, partially offset by (i) approximately 65 basis points of rate decline from unfavorable product mix within the Wine and Spirits segment and (ii) approximately 60 basis points of rate decline from higher cost of product sold within the Beer segment.

Selling, general, and administrative expenses


	Third Quarter 2025		Third Quarter 2024		Dollar Change		Percent Change
(in millions)
Beer	$	306.8	$	281.8	$	25.0	9	%
Wine and Spirits	110.1		116.1		(6.0)		(5	%)
Corporate Operations and Other	62.9		65.1		(2.2)		(3	%)
Comparable Adjustments	11.5		10.7		0.8		NM
Consolidated selling, general, and administrative expenses	$	491.3	$	473.7	$	17.6	4	%


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			The increase in Beer selling, general, and administrative expenses is largely driven by $32.8 million of higher marketing spend primarily led by advertising campaigns to support our high-end imported beer brands, partially offset by $7.5 million of decreased general and administrative expenses. The decrease in general and administrative expenses is primarily due to lower short-term incentive accruals and favorable foreign currency impact as compared to Third Quarter 2024.


			The decrease in Wine and Spirits selling, general, and administrative expenses is largely due to $3.7 million and $2.4 million of decreased general and administrative expenses and marketing spend, respectively. The decrease in general and administrative expenses is driven by lower short-term incentive accruals and depreciation expense, partially offset by higher other payroll expenses as compared to Third Quarter 2024. Marketing as a percentage of net sales increased year-over-year driven by support of our largest brands.


			The decrease in Corporate Operations and Other selling, general, and administrative expenses is largely due to lower short-term incentive accruals, partially offset by higher (i) stock-based compensation expense, (ii) consulting services, (iii) depreciation expense as a result of our June 2024 corporate headquarters relocation, and (iv) other payroll expenses as compared to Third Quarter 2024.

Selling, general, and administrative expenses as a percent of net sales increased to 19.9% for Third Quarter 2025 as compared to 19.2% for Third Quarter 2024. The increase is largely driven by (i) approximately 50 basis points of rate growth from Beer selling, general, and administrative expenses and (ii) approximately 30 basis points of rate growth from Wine and Spirits as the decrease in Wine and Spirits net sales exceeded the decrease in selling, general and administrative expenses, partially offset by approximately 10 basis points of rate decline from Corporate Operations and Other selling, general, and administrative expenses.

Operating income (loss)


	Third Quarter 2025		Third Quarter 2024		Dollar Change		Percent Change
(in millions)
Beer	$	769.9	$	757.3	$	12.6	2	%
Wine and Spirits	95.2		127.6		(32.4)		(25	%)
Corporate Operations and Other	(62.9)		(65.1)		2.2		3	%
Comparable Adjustments	(9.2)		(22.9)		13.7		NM
Consolidated operating income (loss)	$	793.0	$	796.9	$	(3.9)	(0	%)


			The increase in Beer operating income is largely attributable to the cost savings initiatives, the favorable impact from pricing, and shipment volume growth, partially offset by the increased marketing spend, higher depreciation, and increase in brewery costs, as described above.


			The decrease in Wine and Spirits operating income is largely attributable to the decline in branded wine and spirits shipment volume and impact from pricing actions in certain markets, partially offset by the lower cost of product sold, as described above.


			As previously discussed, the decrease in Corporate Operations and Other operating loss is largely due to net compensation and benefits impacts.


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Income (loss) from unconsolidated investments


	Third Quarter 2025		Third Quarter 2024		Dollar Change		Percent Change
(in millions)
Net gain (loss) in connection with Exchangeable Shares	$	(38.6)	$	—	$	(38.6)	NM
Equity in earnings (losses) from other equity method investees and related activities	23.9		26.0		(2.1)		(8	%)
Equity in earnings (losses) from Canopy and related activities	—		(56.5)		56.5		NM
Impairment of equity method investments	(0.3)		(0.3)		0.0		0	%
Unrealized net gain (loss) on securities measured at fair value	—		(11.0)		11.0		NM

	$	(15.0)	$	(41.8)	$	26.8	64	%

Interest expense, net

Interest expense, net remained relatively flat at $104.4 million for Third Quarter 2025 as compared to $104.2 million for Third Quarter 2024 as (i) approximately 5 basis points of higher weighted average interest rates and (ii) a decrease in capitalized interest in connection with the Mexico Beer Projects as compared to the Third Quarter 2024 were offset by approximately $40 million of lower average borrowings. For additional information, refer to Note 8.

(Provision for) benefit from income taxes

The provision for income taxes decreased to $44.5 million for Third Quarter 2025 from $130.0 million for Third Quarter 2024. Our effective tax rate for Third Quarter 2025 was 6.6% as compared with 20.0% for Third Quarter 2024. In comparison to prior year, our income taxes were impacted primarily by the net income tax benefit resulting from the reversal of valuation allowances for capital loss carryforwards in connection with the SVEDKA Divestiture. For additional information, refer to Note 9.

Net income (loss) attributable to CBI

Net income (loss) attributable to CBI increased to $615.9 million for Third Quarter 2025 from $509.1 million for Third Quarter 2024. This increase of $106.8 million, or 21%, is largely attributable to the lower provision for income taxes as compared to Third Quarter 2024.

Nine Months 2025 compared to Nine Months 2024

Net sales


	Nine Months 2025		Nine Months 2024		Dollar Change		Percent Change
(in millions)
Beer	$	6,835.4	$	6,459.8	$	375.6	6	%
Wine and Spirits:
Wine	1,040.1		1,180.7		(140.6)		(12	%)
Spirits	169.0		182.1		(13.1)		(7	%)
Total Wine and Spirits	1,209.1		1,362.8		(153.7)		(11	%)

Consolidated net sales	$	8,044.5	$	7,822.6	$	221.9	3	%


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	Beer segment	Nine Months 2025		Nine Months 2024		Dollar Change		Percent Change
(in millions, branded product, 24-pack, 12-ounce case equivalents)
Net sales		$	6,835.4	$	6,459.8	$	375.6	6	%


Shipments		346.4		331.1				4.6	%


Depletions (1)								3.9	%

(1)Includes an adjustment to remove volumes associated with the Craft Beer Divestitures for the period March 1, 2023, through May 31, 2023.

The increase in Beer net sales is due to (i) $296.4 million of shipment volume growth and (ii) $124.3 million of favorable impact from pricing in select markets, partially offset by $45.1 million of unfavorable product mix primarily from a shift in package types. While our shipment volume growth benefited from continued consumer demand, we believe it was negatively impacted by subdued overall spend and prolonged value seeking behavior among consumers. We expect shipment volume to generally align with depletion volume for Fiscal 2025.


	Wine and Spirits segment	Nine Months 2025		Nine Months 2024		Dollar Change		Percent Change
(in millions, branded product, 9-liter case equivalents)
Net sales		$	1,209.1	$	1,362.8	$	(153.7)	(11	%)


Shipments		16.2		18.1				(10.5	%)


U.S. Wholesale shipments		14.1		15.9				(11.3	%)






Depletions								(11.6	%)

The decrease in Wine and Spirits net sales is largely driven by (i) a $132.9 million decrease in branded wine and spirits shipment volume, (ii) a $20.5 million decrease in non-branded net sales led by a decline in bulk wine sales, and (iii) $10.6 million of unfavorable product mix, partially offset by $16.1 million from higher contractual distributor payments as compared to Nine Months 2024. The decrease in branded wine and spirits shipment volume is attributable to our U.S. wholesale market, primarily driven by declines in both the overall wine market and in our mainstream and premium wine brands, as well as retailer inventory destocking. We expect U.S. Wholesale shipment volume to generally align with depletion volume for Fiscal 2025.

Gross profit


	Nine Months 2025		Nine Months 2024		Dollar Change		Percent Change
(in millions)
Beer	$	3,656.2	$	3,366.5	$	289.7	9	%
Wine and Spirits	538.0		634.9		(96.9)		(15	%)
Comparable Adjustments	5.7		(23.1)		28.8		NM
Consolidated gross profit	$	4,199.9	$	3,978.3	$	221.6	6	%


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			The increase in Beer gross profit is primarily due to (i) $158.3 million of shipment volume growth, (ii) the $124.3 million of favorable impact from pricing, and (iii) $37.0 million of reduced cost of product sold, partially offset by $29.9 million of unfavorable product mix. The reduced cost of product sold is primarily due to (i) $35.4 million of favorable fixed cost absorption related to increased production levels as compared to Nine Months 2024, (ii) $29.2 million of decreased transportation costs, (iii) $13.7 million due to costs related to a voluntary product recall of select kegs for Nine Months 2024, and (iv) $7.5 million of lower material costs, including aluminum, cartons, and lumber, each driven by efficiency initiatives, tempered by higher malt costs, partially offset by (i) $25.9 million of higher depreciation resulting from the Mexico Beer Projects and (ii) a $23.9 million increase in brewery costs, including compensation and benefits. To partially offset the expected increases in cost of product sold we are executing initiatives focused largely on logistics and procurement that resulted in nearly $155 million of cost savings for Nine Months 2025.


			The decrease in Wine and Spirits gross profit is attributable to (i) a $73.7 million decrease in branded wine and spirits shipment volume and (ii) $40.1 million of unfavorable product mix from lower-margin net sales, partially offset by (i) $16.1 million from the higher contractual distributor payments and (ii) $4.9 million of reduced cost of product sold. The decrease in cost of product sold was largely attributable to lower operational costs, including short-term incentive accruals and transportation and warehousing costs, partially offset by unfavorable fixed cost absorption related to decreased production levels as compared to Nine Months 2024 and increased raw materials costs, including grapes.

Gross profit as a percent of net sales increased to 52.2% for Nine Months 2025 compared with 50.9% for Nine Months 2024. This increase was largely due to (i) 75 basis points of favorable impact from Beer pricing, (ii) approximately 45 basis points of rate growth from lower cost of product sold within the Beer segment, (iii) a favorable change in Comparable Adjustments, contributing approximately 35 basis points, and (iv) approximately 15 basis points of rate growth from non-branded net sales, partially offset by approximately 45 basis points of rate decline resulting from unfavorable product mix within the Wine and Spirits segment.

Selling, general, and administrative expenses


	Nine Months 2025		Nine Months 2024		Dollar Change		Percent Change
(in millions)
Beer	$	885.6	$	857.5	$	28.1	3	%
Wine and Spirits	312.6		347.3		(34.7)		(10	%)
Corporate Operations and Other	180.0		181.8		(1.8)		(1	%)
Comparable Adjustments	66.5		51.4		15.1		NM
Consolidated selling, general, and administrative expenses	$	1,444.7	$	1,438.0	$	6.7	0	%


			The increase in Beer selling, general, and administrative expenses is largely driven by $46.9 million of additional marketing spend primarily led by advertising campaigns to support our high-end imported beer brands as well as new product launches, partially offset by $18.4 million of decreased general and administrative expenses. The decrease in general and administrative expenses is primarily due to lower short-term incentive accruals and decreased legal expenses, partially offset by higher other compensation and benefits, including stock-based compensation expense.


			The decrease in Wine and Spirits selling, general, and administrative expenses is largely driven by $26.6 million and $8.0 million of decreased general and administrative expenses and marketing spend, respectively. The decrease in general and administrative expenses is primarily due to lower (i) short-term incentive accruals, (ii) litigation expenses, and (iii) consulting services. Marketing spend as a percentage of net sales remained relatively consistent year-over-year.


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			Corporate Operations and Other selling, general, and administrative expenses remained relatively flat as decreased costs associated with lower short-term incentive accruals and a tax credit resulting from our June 2024 corporate headquarters relocation were offset by higher (i) stock-based compensation expense, (ii) consulting services, (iii) other payroll expenses, and (iv) depreciation expense driven by the headquarters relocation.

Selling, general, and administrative expenses as a percent of net sales decreased to 18.0% for Nine Months 2025 as compared with 18.4% for Nine Months 2024. The decrease is largely driven by (i) approximately 55 basis points of rate decline as the increase in Beer net sales exceeded the increase in selling, general, and administrative expenses and (ii) approximately 10 basis points of rate decline from a decrease in Wine and Spirits’ selling, general, and administrative expenses, partially offset by an unfavorable change in Comparable Adjustments, contributing approximately 20 basis points of rate growth.

Operating income (loss)


	Nine Months 2025		Nine Months 2024		Dollar Change		Percent Change
(in millions)
Beer	$	2,770.6	$	2,509.0	$	261.6	10	%
Wine and Spirits	225.4		287.6		(62.2)		(22	%)
Corporate Operations and Other	(180.0)		(181.8)		1.8		1	%
Comparable Adjustments	(2,310.8)		(74.5)		(2,236.3)		NM
Consolidated operating income (loss)	$	505.2	$	2,540.3	$	(2,035.1)	(80	%)


			The increase in Beer operating income is largely attributable to the shipment volume growth, cost savings initiatives, and the favorable impact from pricing, partially offset by the increased marketing spend, unfavorable product mix, the higher depreciation, and the increase in brewery costs, as described above.


			The decrease in Wine and Spirits operating income is largely attributable to the decline in branded wine and spirits shipment volume and unfavorable product mix, partially offset by decreased selling, general, and administrative expenses and the higher contractual distributor payments, as described above.


			As previously discussed, Corporate Operations and Other operating loss remained relatively flat as lower net compensation and benefits impacts and the tax credit were offset by higher consulting services.

Income (loss) from unconsolidated investments


	Nine Months 2025		Nine Months 2024		Dollar Change		Percent Change
(in millions)
Net gain in connection with Exchangeable Shares	$	44.7	$	—	$	44.7	NM
Equity in earnings (losses) from other equity method investees	26.0		32.4		(6.4)		(20	%)
Equity in earnings (losses) from Canopy and related activities	—		(288.3)		288.3		NM
Impairment of equity method investments	(2.4)		(136.1)		133.7		98	%
Unrealized net gain (loss) on securities measured at fair value	(2.5)		(85.4)		82.9		97	%

	$	65.8	$	(477.4)	$	543.2	114	%


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Interest expense, net

Interest expense, net decreased to $311.2 million for Nine Months 2025 as compared to $333.7 million for Nine Months 2024. This decrease of $22.5 million, or 7%, is largely due to (i) approximately $265 million of lower short-term and long-term average borrowings and (ii) an increase in capitalized interest in connection with the Mexico Beer Projects as compared to Nine Months 2024. For additional information, refer to Note 8.

(Provision for) benefit from income taxes

The (provision for) benefit from income taxes increased to $79.7 million for Nine Months 2025 from $(368.4) million for Nine Months 2024. Our effective tax rate for Nine Months 2025 was 30.7% as compared with 21.3% for Nine Months 2024. In comparison to prior year, our income taxes were impacted primarily by:

a Nine Months 2025 net income tax benefit recognized following the (i) resolution of various tax examinations and assessments related to prior periods and (ii) reversal of valuation allowances for capital loss carryforwards in connection with the SVEDKA Divestiture; partially offset by
the net income tax impacts resulting from the (i) non-deductible portion of the Wine and Spirits goodwill impairment and (ii) sale of the remaining assets at the canceled Mexicali Brewery.

For additional information, refer to Note 9.

We expect our reported effective tax rate for Fiscal 2025 to be in the range of 7% to 9%. This range includes the impact of the SVEDKA Divestiture.

Net income (loss) attributable to CBI

Net income (loss) attributable to CBI decreased to $293.9 million for Nine Months 2025 from $1,335.0 million for Nine Months 2024. This decrease of $1,041.1 million, or 78%, is largely attributable to the Nine Months 2025 Wine and Spirits goodwill impairment, partially offset by the (i) favorable impact from income (loss) from unconsolidated investments driven by Canopy-related activities, (ii) benefit from income taxes, and (iii) Nine Months 2025 improvements within the Beer segment.

Liquidity and Capital Resources

General

Our primary source of liquidity has been cash flow from operating activities. Our ability to consistently generate robust cash flow from our operations is one of our most significant financial strengths; it enables us to invest in our people and our brands, make capital investments and strategic acquisitions, provide a cash dividend program, and from time-to-time, repurchase shares of our common stock. Our largest use of cash in our operations is for purchasing and carrying inventories and carrying seasonal accounts receivable. Historically, we have used this cash flow to repay our short-term borrowings and fund capital expenditures. Additionally, our commercial paper program is used to fund our short-term borrowing requirements and to maintain our access to the capital markets. We use our short-term borrowings, including our commercial paper program, to support our working capital requirements and capital expenditures, among other things.

We seek to maintain adequate liquidity to meet working capital requirements, fund capital expenditures, and repay scheduled principal and interest payments on debt. Absent deterioration of market conditions, we believe that cash flows from operating and financing activities will provide adequate resources to satisfy our working capital, scheduled principal and interest payments on debt, anticipated dividend payments, periodic share repurchases, and anticipated capital expenditure requirements for both our short-term and long-term capital needs.

We have an agreement with a financial institution for payment services and to 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


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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. As of November 30, 2024, and February 29, 2024, the amount payable to this participating financial institution for suppliers who voluntarily participate in the supply chain finance program was $0.8 million and $7.3 million, respectively, and was included in accounts payable within our consolidated balance sheets. 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.

Cash Flows


	Nine Months 2025		Nine Months 2024		Dollar Change
(in millions)
Net cash provided by (used in):
Operating activities	$	2,557.5	$	2,346.8	$	210.7
Investing activities	(1,098.2)		(929.9)		(168.3)
Financing activities	(1,538.8)		(1,472.4)		(66.4)
Effect of exchange rate changes on cash and cash equivalents	0.8		0.7		0.1
Net increase (decrease) in cash and cash equivalents	$	(78.7)	$	(54.8)	$	(23.9)

Operating activities

The increase in net cash provided by (used in) operating activities consists of:


	Nine Months 2025		Nine Months 2024		Dollar Change
(in millions)
Net income (loss)	$	339.5	$	1,360.8	$	(1,021.3)
Unrealized net (gain) loss on securities measured at fair value	2.5		85.4		(82.9)
Deferred tax provision (benefit)	(184.2)		28.2		(212.4)
Equity in (earnings) losses of equity method investees and related activities, net of distributed earnings	(25.8)		257.3		(283.1)
Impairment of equity method investments	2.4		136.1		(133.7)
Net gain in connection with Exchangeable Shares	(44.7)		—		(44.7)
Goodwill impairment	2,250.0		—		2,250.0
Other non-cash adjustments	326.9		550.0		(223.1)
Change in operating assets and liabilities, net of effects from purchase and sale of business	(109.1)		(71.0)		(38.1)
Net cash provided by (used in) operating activities	$	2,557.5	$	2,346.8	$	210.7

The $38.1 million net change in operating assets and liabilities was largely driven by lower (i) accrued expenses for the Beer segment driven by the timing of marketing accruals and (ii) inventory levels for the Beer segment driven by higher demand for our products. These changes were partially offset by higher (i) accounts payable for the Beer segment resulting from the timing of payments and the growth of our beer business and (ii) inventory levels for the Wine and Spirits segment led by declines in both the overall wine market and in our mainstream and premium wine brands, as well as retailer inventory destocking. Additionally, net cash provided by operating activities was negatively impacted by higher Nine Months 2025 income tax payments following the resolution of various tax examinations and assessments as compared to Nine Months 2024.

Investing activities

Net cash used in investing activities increased to $1,098.2 million for Nine Months 2025 from $929.9 million for Nine Months 2024. This increase of $168.3 million, or 18%, was primarily due to a $151.2 million


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increase in business acquisitions, driven by the June 2024 Sea Smoke acquisition, and $19.6 million of additional capital expenditures, largely related to the Mexico Beer Projects. The increase in net cash used in investing activities was partially offset by $13.0 million in higher proceeds from the sale of assets for Nine Months 2025 as compared to Nine Months 2024.

Financing activities

The increase in net cash provided by (used in) financing activities consists of:


	Nine Months 2025		Nine Months 2024		Dollar Change
(in millions)
Net proceeds from (payments of) debt, current and long-term, and related activities	$	(307.4)	$	(774.4)	$	467.0
Dividends paid	(551.3)		(491.1)		(60.2)
Purchases of treasury stock	(668.1)		(249.7)		(418.4)
Net cash provided by stock-based compensation activities	52.4		77.8		(25.4)
Distributions to noncontrolling interests	(47.5)		(35.0)		(12.5)
Payment of contingent consideration	(0.7)		—		(0.7)
Purchase of noncontrolling interest	(16.2)		—		(16.2)
Net cash provided by (used in) financing activities	$	(1,538.8)	$	(1,472.4)	$	(66.4)

Debt

Total debt outstanding as of November 30, 2024, amounted to $11,579.1 million, a decrease of $300.2 million, or 3%, from February 29, 2024. This decrease consisted of:

4068


						Debt repayment						Debt issuance

Bank facilities

The Company, CB International, the Administrative Agent, and certain other lenders are parties to the 2022 Credit Agreement. The October 2022 Credit Agreement Amendment revised certain defined terms and covenants in the 2022 Credit Agreement 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.


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General

The majority of our outstanding borrowings as of November 30, 2024, consisted of fixed-rate senior unsecured notes, with maturities ranging from calendar 2025 to calendar 2050.

Additionally, 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.

We do not have purchase commitments from buyers for our commercial paper and, therefore, our ability to issue commercial paper is subject to market demand. If the commercial paper market is not available to us for any reason when commercial paper borrowings mature, we will utilize unused commitments under our revolving credit facility under our 2022 Credit Agreement to repay commercial paper borrowings. We do not expect that fluctuations in demand for commercial paper will affect our liquidity given our borrowing capacity available under our revolving credit facility.

We had the following remaining borrowing capacity available under our 2022 Credit Agreement:


	November 30, 2024		December 31, 2024
(in millions)
Revolving credit facility (1)	$	1,347.2	$	1,489.2

(1)Net of outstanding revolving credit facility borrowings and outstanding letters of credit under our 2022 Credit Agreement and outstanding borrowings under our commercial paper program (excluding unamortized discount) of $891.5 million and $749.5 million as of November 30, 2024, and December 31, 2024, respectively.

The financial institutions participating in our 2022 Credit Agreement have complied with prior funding requests and we believe they will comply with any future funding requests. However, there can be no assurances that any particular financial institution will continue to do so.

As of November 30, 2024, we and our subsidiaries were subject to covenants that are contained in our 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, both as defined in our 2022 Credit Agreement. As of November 30, 2024, under our 2022 Credit Agreement, the minimum interest coverage ratio was 2.5x and the maximum net leverage ratio was 4.0x.

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.

As of November 30, 2024, we were in compliance with our covenants under our 2022 Credit Agreement and our indentures, and have met all debt payment obligations.

For further discussion and presentation of our borrowings and available sources of borrowing, refer to Note 12 of our consolidated financial statements included in our 2024 Annual Report and Note 8.


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Common Stock Dividends

On January 8, 2025, our Board of Directors declared a quarterly cash dividend of $1.01 per share of Class A Stock and $0.91 per share of Class 1 Stock payable on February 21, 2025, to stockholders of record of each class as of the close of business on February 7, 2025.

We currently expect to continue to pay a regular quarterly cash dividend to stockholders of our common stock in the future, but such payments are subject to approval of our Board of Directors and are dependent upon our financial condition, results of operations, capital requirements, and other factors, including those set forth under Item 1A. “Risk Factors” of our 2024 Annual Report as supplemented by the additional factors set forth under Item 1A. “Risk Factors” included in this Form 10-Q.

Share Repurchase Program

Our Board of Directors authorized the repurchase of our publicly traded common stock of up to $2.0 billion under the 2021 Authorization and an additional repurchase of up to $2.0 billion under the 2023 Authorization. The 2021 Authorization was fully utilized during Third Quarter 2025, through open market transactions.

As of November 30, 2024, total shares repurchased under the 2021 Authorization and the 2023 Authorization are as follows:


			Class A Stock
	Repurchase Authorization		Dollar Value of Shares Repurchased		Number of Shares Repurchased
(in millions, except share data)
2021 Authorization	$	2,000.0	$	2,000.0	8,337,547
2023 Authorization	$	2,000.0	$	54.4	230,177

Share repurchases under the 2023 Authorization may be accomplished at management’s discretion from time to time based on market conditions, our cash and debt position, and other factors as determined by management. Shares may be repurchased through open market or privately negotiated transactions. We may fund future share repurchases with cash generated from operations and/or proceeds from borrowings. Any repurchased shares will become treasury shares, including shares previously repurchased under the 2021 Authorization and the 2023 Authorization.

We currently expect to continue to repurchase shares in the future, but such repurchases are dependent upon our financial condition, results of operations, capital requirements, and other factors, including those set forth under Item 1A. “Risk Factors” of our 2024 Annual Report as supplemented by the additional factors set forth under Item 1A. “Risk Factors” included in this Form 10-Q.

For additional information, refer to Note 17 of our consolidated financial statements included in our 2024 Annual Report and Note 11.

Capital Expenditures

Management reviews the capital expenditure program periodically and modifies it as required to meet current and projected future business needs. We now plan to spend $1.3 billion for capital expenditures in Fiscal 2025, including $1.0 billion for the Beer segment associated primarily with the Mexico Beer Projects. The remaining planned Fiscal 2025 capital expenditures continue to consist of improvements to existing operating facilities and replacements of existing equipment and/or buildings.


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Accounting Guidance

Accounting guidance adopted for Nine Months 2025 did not have a material impact on our Financial Statements.

Information Regarding Forward-Looking Statements

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

The statements under MD&A regarding:

◦our business strategy, strategic vision, growth plans, innovation and Digital Business Acceleration initiatives, new products, future operations, financial position, net sales, expenses, hedging programs, cost savings and efficiency initiatives, capital expenditures, effective tax rates and anticipated tax liabilities, expected volume, inventory, supply, and demand levels, balance, and trends, long-term financial model, access to capital markets, liquidity and capital resources, and prospects, plans, and objectives of management;

◦our beer expansion, optimization, and/or construction activities, including anticipated scope, capacity, costs, capital expenditures, and timeframes for completion;

◦macroeconomic headwinds, including rising unemployment, inflation, changing prices, other unfavorable global and regional economic conditions, global supply chain disruptions and constraints, and geopolitical events, as well as reductions in consumer discretionary income, and shifting consumer behaviors, and our responses thereto;

◦expected or potential actions of third parties, including possible changes to laws, rules, and regulations, such as potential changes to trade and tariff policies, particularly on imports from Mexico into the U.S. and possible retaliatory tariffs imposed by the Mexican government;

◦the potential impact of climate-related severe weather events or other weather conditions;

◦the expected use of cash proceeds from and gain to be recognized in connection with the SVEDKA Divestiture;

◦the availability of a supply chain finance program;

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

◦the amount and timing of future dividends and our target dividend payout ratio; and

◦our target net leverage ratio.

The statements regarding the future reclassification of net gains from AOCI.
The statements regarding potential future impairments of our Wine and Spirits goodwill or Canopy investment.

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

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


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MD&A			Table of Contents

the ability to respond to anticipated inflationary pressures, including reductions in consumer discretionary income and our ability to pass along rising costs through increased selling prices;
the actual impact to supply, production levels, and costs from global supply chain disruptions and constraints, transportation challenges (including from labor strikes or other labor activities), shifting consumer behaviors, wildfires, and severe weather events;
reliance on complex information systems and third‐party global networks as well as risks associated with cybersecurity and artificial intelligence;
economic and other uncertainties associated with our international operations, including potential new tariffs;
dependence on limited facilities for production of our Mexican beer brands, including beer operations expansion, optimization, and/or construction activities, scope, capacity, supply, costs (including impairments), capital expenditures, and timing;
operational disruptions or catastrophic loss to our breweries, wineries, other production facilities, or distribution systems;
the impact of military conflicts, geopolitical tensions, and responses, including on inflation, supply chains, commodities, energy, and cybersecurity;
climate change, ESG regulatory compliance and failure to meet emissions, stewardship, and other ESG targets, objectives, or ambitions, and timing changes for our ESG reporting;
reliance on wholesale distributors, major retailers, and government agencies;
contamination and degradation of product quality from diseases, pests, weather, and other conditions;
communicable disease outbreaks, pandemics, or other widespread public health crises and associated governmental containment actions;
effects of employee labor activities that could increase our costs;
a potential decline in the consumption of products we sell and our dependence on sales of our Mexican beer brands;
impacts of our acquisition, divestiture, investment, and new product innovation strategies and activities, including the Sea Smoke acquisition and the SVEDKA Divestiture;
the success of operational and commercial execution, cost savings, and efficiency initiatives;
dependence upon our trademarks and proprietary rights, including the failure to protect our intellectual property rights;
potential damage to our reputation;
competition in our industry and for talent;
our indebtedness and interest rate fluctuations;
our international operations, worldwide and regional economic trends and financial market conditions, including macroeconomic headwinds, geopolitical uncertainty, or other governmental rules and regulations;
class action or other litigation we may face;
potential write-downs of our intangible assets, such as goodwill and trademarks, including potential future impairments of our Wine and Spirits goodwill;
changes to tax laws, fluctuations in our effective tax rate, including tax impacts resulting from the non-deductible portion of the Wine and Spirits goodwill impairment and the sale of the remaining assets at the canceled Mexicali Brewery, accounting for tax positions, the resolution of tax disputes, changes to accounting standards, elections, assertions, or policies, and the impact of a global minimum tax rate;
the amount, timing, and source of funds for any share repurchases;
the amount and timing of future dividends; and
ownership of our Class A Stock by the Sands Family Stockholders and their Board of Director nomination rights as well as the choice-of-forum provision in our amended and restated by-laws.

For additional information about risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by our forward-looking statements, please refer to Item 1A. “Risk Factors” of our 2024 Annual Report as supplemented by the additional factors set forth under Item 1A. “Risk Factors” included in this Form 10-Q.


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OTHER KEY INFORMATION			Table of Contents

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