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 2025 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, including our 2025 Restructuring Initiative, 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, 2025, and November 30, 2024, and nine months ended November 30, 2025, and November 30, 2024. 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 Modelo Especial, Corona Extra, Pacifico, Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company, High West, Casa Noble, and Mi CAMPO. In the U.S., we are one of the top dollar share gainers among beverage alcohol suppliers. We are also the second-largest beer company and have the #1 beer brand, Modelo Especial, in dollar sales in the U.S. We continued to strengthen our leadership position in the U.S. beer market as the #1 dollar share gainer in the overall U.S. beer market


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and the #2 dollar share gainer in the high-end. Within wine and spirits, we have implemented a multi-year strategy that repositioned this business to a portfolio of exclusively higher-end brands that we believe will generate higher growth and higher margins, aligned to our focus on consumer-led premiumization trends, and we continue to progressively 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 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 comprised of exclusively higher-end wine and spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of corporate communications, corporate development, corporate finance, corporate strategy, executive management, human resources, internal audit, investor relations, IT, legal, and public affairs, as well as our investments such as those 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 then-owned 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 6, 7, and 11 for further discussion.

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 environmental, social, and governance 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 strong 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 our strategy to address consumer-led premiumization, product, and purchasing trends,


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which we anticipate will continue to drive stronger growth rates relative to the industry. To continue capitalizing on consumer-led premiumization trends, become more competitive, and aim to grow our business, we have employed a strategy dedicated to organic growth and supplemented by targeted investments and acquisitions. Our ongoing digital acceleration initiatives are aimed at driving results by enhancing our technology capabilities in key areas. In Fiscal 2026, we continue to focus on end-to-end digital supply chain planning, logistics, procurement, revenue growth management, and consumer insights and analytics. Additionally, we believe our continued focus on maintaining a strong balance sheet provides a solid financial foundation to support our broader strategic initiatives.

Our business strategy for the Beer segment focuses on upholding our leadership position in the U.S. beer market, including as a leader in the high-end segment, and continuing to seek 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. During the remainder of Fiscal 2026, we intend to continue to increase distribution for key brands, optimize growth through differentiated brand positioning, price pack architecture, and market prioritization as well as invest in the next phase of modular capacity additions necessary to support our anticipated future growth expectations. Expansion, optimization, and/or construction activities continue under our Mexico Beer Projects. Additionally, 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.

Our business strategy for the Wine and Spirits segment continues to focus on delivering growth and improving margins beyond Fiscal 2026 by driving our higher-end brands and operating efficiencies. We have repositioned this business to a portfolio of exclusively higher-end wine and spirits brands that we believe will generate higher growth and higher margins. We remain a key supplier in U.S. 3-tier brick-and-mortar distribution. In addition, we are advancing our aim to become a global, omni-channel competitor in line with evolving consumer preferences as we continue our efforts to progressively expand into international markets, DTC channels (including hospitality), and 3-tier eCommerce.

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 ratios for (i) comparable net leverage and (ii) dividend payout; 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 and may continue to be affected by the evolving consumer demand environment largely driven by what we believe to be ongoing socioeconomic factors. These factors may include subdued spend, depressed sentiment, value-seeking behaviors, and reductions in the discretionary income available to purchase our products among consumers, elevated unemployment, changing prices, inflation, other unfavorable global and regional economic conditions, demographic trends in the U.S., global supply chain disruptions and constraints, and geopolitical events, including the impact of military conflicts.

Recent developments in international trade relations, including significant changes in U.S. trade policy, actions which include threatened, new, and increased tariffs on other countries and retaliatory tariffs and actions imposed on certain U.S. goods, and ongoing litigation have produced heightened uncertainty with respect to trade and tariff policies and regulations affecting trade between the U.S. and other countries, which could continue to alter the global trade environment. For example, the U.S. government has imposed tariffs on product imports, including on raw and packaging materials, from certain countries (such as Mexico, the European Union including Italy, and New Zealand)


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and certain other countries have implemented tariffs on U.S. goods, such as the tariffs on certain product imports originating from the U.S. imposed by the Canadian government, although some of these tariffs were subsequently modified, delayed, or suspended.

We expect some or all of these market conditions and their impacts to continue during the remainder of Fiscal 2026 which could have a material impact on our results of operations and financial condition. We intend to continue to monitor the evolving consumer demand and socioeconomic environments and their impacts on our business. In addition, we have implemented the 2025 Restructuring Initiative, which 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. We also intend to continue our commodity and foreign exchange hedging programs. However, there can be no assurance that we will be able to adequately respond to softer consumer demand trends or fully mitigate rising costs, including as a result of new or increased tariffs, through increased selling prices, cost, productivity, efficiency, and inventory management initiatives, optimized marketing plans, and/or our commodity and foreign exchange hedging programs. Furthermore, to the extent severe weather events that impact our business, such as wildfires, droughts, floods, extreme heat, and/or late frosts, or other weather conditions that constrain purchasing occasions for our consumers, continue to occur or accelerate in future periods, it could have a material impact on our results of operations and financial condition.

2025 Restructuring Initiative

We have implemented the 2025 Restructuring Initiative which is expected to yield over $200 million in net annualized cost savings by Fiscal 2028. The majority of the work associated with the 2025 Restructuring Initiative is expected to be completed within Fiscal 2026 and is now estimated to result in $110 million to $130 million of cumulative pre-tax costs once all phases are fully implemented. In connection with the 2025 Restructuring Initiative, we recognized $56.4 million of pre-tax restructuring costs in Nine Months 2026 and $106.1 million of cumulative pre-tax costs since the inception of this initiative. These costs were included in selling, general, and administrative costs within our consolidated results. For additional information on the 2025 Restructuring Initiative, refer to Note 3.

Divestitures, Acquisitions, and Investments

Beer segment

Mexicali Brewery sale

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

Wine and Spirits segment

2025 Wine Divestitures

On June 2, 2025, we sold and, in certain instances, exclusively licensed the trademarks of a portion of our wine and spirits business, primarily centered around our then-owned mainstream wine brands and associated inventory, wineries, vineyards, offices, and facilities for $845.9 million, subject to certain post-closing adjustments. The net cash proceeds from the 2025 Wine Divestitures were used for the repayment of debt.

SVEDKA Divestiture

On January 6, 2025, we sold the SVEDKA brand and related assets, primarily including inventory and equipment. The net cash proceeds were used for general corporate purposes, including funding share repurchases, capital expenditures, and repayment of debt.

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.


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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.

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 investments

As of August 31, 2025, and August 31, 2024, 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.

Exchangeable Shares

We own 26.3 million Exchangeable Shares. As of November 30, 2024, we evaluated our 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 April 2024 conversion of our Canopy common shares and exchange of a portion of the principal amount of a promissory note issued to us by Canopy. We concluded that an impairment did exist, and accordingly, our 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. Additionally, as of February 28, 2025, we again evaluated our Exchangeable Shares for impairment primarily due to the continued decline in Canopy’s common share price. We concluded that an impairment did exist, and accordingly, our Exchangeable Shares were written down to their estimated fair value of $21.2 million.

Following the April 2024 conversion and exchange, we recognized an $83.3 million net gain based on the fair value of our Exchangeable Shares.

The net gain (loss) of $(38.6) million and $44.7 million in connection with our Exchangeable Shares is included in income (loss) from unconsolidated investments within our consolidated results for Third Quarter 2025 and Nine Months 2025, respectively.

For additional information on these divestitures, acquisitions, and investments refer to Notes 2, 9, and 10.

RESULTS OF OPERATIONS

Financial Highlights

References to organic throughout the following discussion exclude the impacts of the 2025 Wine Divestitures and the SVEDKA Divestiture, collectively referred to as the “Wine and Spirits Divestitures,” where appropriate.

Third Quarter 2026 compared to Third Quarter 2025

Net sales decreased 10% largely due to the loss of net sales as a result of the Wine and Spirits Divestitures.

Operating income decreased 13% largely due to (i) the loss of net sales as a result of the Wine and Spirits Divestitures, (ii) the declines in Beer and organic Wine and Spirits segments net sales, and (iii) increased restructuring costs, partially offset by (i) a successful execution of efficiency and cost optimization initiatives within the Beer segment and (ii) reduced marketing spend within the Wine and Spirits segment.


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Net income attributable to CBI and diluted net income per common share attributable to CBI decreased 18% and 15%, respectively, largely due to the items discussed above and a higher provision for income taxes, partially offset by a Third Quarter 2025 impairment of our Exchangeable Shares.

Nine Months 2026 compared to Nine Months 2025

Net sales decreased 10% due to (i) the loss of net sales as a result of the Wine and Spirits Divestitures, (ii) a decrease in Beer net sales driven primarily by a shipment volume decline, partially offset by a favorable impact from pricing, and (iii) a decline in organic Wine and Spirits net sales led by a shipment volume decline.

Operating income increased largely due to (i) the Nine Months 2025 Wine and Spirits goodwill impairment, (ii) a successful execution of efficiency and cost optimization initiatives within the Beer segment, and (iii) reduced marketing spend within the Wine and Spirits segment, partially offset by (i) the loss of net sales as a result of the Wine and Spirits Divestitures, (ii) the declines in Beer and organic Wine and Spirits segments net sales, (iii) increased restructuring costs, and (iv) losses associated with asset impairment and related expenses.

Net income attributable to CBI and diluted net income per common share attributable to CBI both increased largely due to the items discussed above, partially offset by (i) a Nine Months 2026 provision for income taxes as compared to a benefit from income taxes for Nine Months 2025 and (ii) a Nine Months 2025 net gain in connection with Exchangeable Shares.

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 2026		Third Quarter 2025		Nine Months 2026		Nine Months 2025
(in millions)
Cost of product sold
Net gain (loss) on undesignated commodity derivative contracts	$	12.6	$	(0.8)	$	7.9	$	(10.5)
Settlements of undesignated commodity derivative contracts	2.6		8.3		9.3		23.8
Strategic business reconfiguration costs	0.8		—		(0.8)		—
Flow through of inventory step-up	(2.1)		(5.2)		(3.8)		(7.6)



Comparable Adjustments, Cost of product sold	13.9		2.3		12.6		5.7
Selling, general, and administrative expenses
2025 Restructuring Initiative	(34.8)		—		(56.4)		—

Gain (loss) on sale of business	(15.6)		—		(31.9)		—
Transition services agreements activity	(8.1)		(8.3)		(23.6)		(15.9)
Strategic business reconfiguration costs	(1.0)		(3.6)		(6.2)		(29.9)

Other gains (losses)	(1.3)		0.4		2.4		(20.7)
Comparable Adjustments, Selling, general, and administrative expenses	(60.8)		(11.5)		(115.7)		(66.5)
Goodwill impairment	—		—		—		(2,250.0)


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	Third Quarter 2026		Third Quarter 2025		Nine Months 2026		Nine Months 2025
(in millions)
Asset impairment and related expenses	—		—		(52.1)		—

Comparable Adjustments, Operating income (loss)	$	(46.9)	$	(9.2)	$	(155.2)	$	(2,310.8)

Comparable Adjustments, Income (loss) from unconsolidated investments	$	—	$	(38.9)	$	(10.1)	$	39.9

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.

Strategic business reconfiguration costs

We recognized costs primarily in connection with losses on write-downs of excess inventory resulting from our initiatives to streamline, increase efficiencies, and reduce our cost structure primarily within our Wine and Spirits segment (Third Quarter 2026, Nine Months 2026).

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

2025 Restructuring Initiative

We recognized costs in connection with an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business (Third Quarter 2026, Nine Months 2026).

Gain (loss) on sale of business

We recognized a net loss from the sales of businesses largely in connection with the 2025 Wine Divestitures (Third Quarter 2026, Nine Months 2026).

Transition services agreements activity

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

Strategic business reconfiguration costs

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

Other gains (losses)

We recognized other gains (losses) primarily from (i) a net gain (loss) from the sale of assets (Third Quarter 2026, Nine Months 2026) and (ii) a net loss on foreign currency as a result of the resolution of various tax examinations and assessments (Nine Months 2025).


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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 6, 7, and 11.

Asset impairment and related expenses

Largely in connection with the 2025 Wine Divestitures we recognized contract liabilities and inventory obsolescence expenses, partially offset by changes in then-existing net assets held for sale (Nine Months 2026). For additional information, refer to Note 6.

Income (loss) from unconsolidated investments

We recognized income (loss) from (i) unrealized net losses from the changes in fair value of our securities measured at fair value (Nine Months 2026, Nine Months 2025), (ii) impairments of equity method investments (Third Quarter 2025, Nine Months 2026, and Nine Months 2025), and (iii) a net gain (loss) in connection with our Exchangeable Shares (Third Quarter 2025, Nine Months 2025). For additional information, refer to Note 9.

Business Segments

Third Quarter 2026 compared to Third Quarter 2025

Net sales


	Third Quarter 2026		Third Quarter 2025		Dollar Change		Percent Change
(in millions)
Beer	$	2,009.7	$	2,032.4	$	(22.7)	(1	%)
Wine and Spirits:
Wine	174.5		374.6		(200.1)		(53	%)
Spirits	38.6		56.8		(18.2)		(32	%)
Total Wine and Spirits	213.1		431.4		(218.3)		(51	%)
Consolidated net sales	$	2,222.8	$	2,463.8	$	(241.0)	(10	%)


	Beer segment	Third Quarter 2026		Third Quarter 2025		Dollar Change		Percent Change
(in millions, branded product, 24-pack, 12-ounce case equivalents)
Net sales		$	2,009.7	$	2,032.4	$	(22.7)	(1	%)

Shipments		100.4		102.7				(2.2	%)

Depletions								(3.0	%)

The decrease in Beer net sales is largely due to a $46.2 million decline in shipment volume, partially offset by $30.3 million of favorable impact from pricing in select markets. We believe our net sales continue to be suppressed by the socioeconomic factors discussed above.


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	Wine and Spirits segment	Third Quarter 2026		Third Quarter 2025		Dollar Change		Percent Change
(in millions, branded product, 9-liter case equivalents)
Net sales		$	213.1	$	431.4	$	(218.3)	(51	%)
Shipments
Total		1.5		5.1				(70.6	%)
Organic (1)		1.5		1.5				—	%
U.S. Wholesale		1.1		4.3				(74.4	%)
Organic U.S. Wholesale (1)		1.1		1.0				10.0	%




Depletions								0.0	%

(1)Includes adjustments to remove volumes associated with the Wine and Spirits Divestitures for the period September 1, 2024, through November 30, 2024.

The decrease in Wine and Spirits net sales is due to $202.6 million from the Wine and Spirits Divestitures that are no longer part of our business and a $15.7 million decrease in organic net sales. The decrease in organic net sales is largely driven by (i) a $6.7 million decrease in contractual distributor payments as compared to Third Quarter 2025 and (ii) a $5.0 million decrease from strategic pricing actions taken on select brands. Additionally, we believe our branded wine and spirits shipment volume was negatively impacted by both tariffs imposed by the U.S. government and by retaliatory tariffs and actions in certain international markets.

Gross profit


	Third Quarter 2026		Third Quarter 2025		Dollar Change		Percent Change
(in millions)
Beer	$	1,063.2	$	1,076.7	$	(13.5)	(1	%)
Wine and Spirits	106.1		205.3		(99.2)		(48	%)
Comparable Adjustments	13.9		2.3		11.6		NM
Consolidated gross profit	$	1,183.2	$	1,284.3	$	(101.1)	(8	%)


			The decrease in Beer gross profit is largely due to (i) a $24.5 million decline in shipment volume and (ii) $13.3 million of increased cost of product sold, partially offset by the $30.3 million favorable impact from pricing. The increase in cost of product sold is primarily due to (i) $13.6 million in tariffs on aluminum, (ii) $7.2 million of foreign currency transactional losses, (iii) $7.1 million of unfavorable fixed cost absorption related to decreased production levels as compared to Third Quarter 2025, (iv) $5.7 million of increased transportation costs, and (v) a $4.0 million increase in brewery costs, including maintenance, partially offset by $25.0 million of lower depreciation resulting from the timing of assets being put into service. To partially offset the increase in cost of product sold we are executing efficiency and cost optimization initiatives focused largely on procurement and logistics that resulted in over $40 million of net benefit for Third Quarter 2026.


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			The decrease in Wine and Spirits gross profit is due to $78.4 million from the Wine and Spirits Divestitures that is no longer part of our business and a $20.8 million decrease in organic gross profit. The decrease in organic gross profit is largely attributable to (i) $7.0 million of unfavorable product mix, (ii) the $6.7 million decrease in contractual distributor payments, (iii) the $5.0 million decrease from strategic pricing actions, and (iv) a $3.2 million increase in cost of product sold. The increase in cost of product sold is largely attributable to unfavorable fixed cost absorption related to decreased production levels as compared to Third Quarter 2025.

Gross profit as a percent of net sales increased to 53.2% for Third Quarter 2026 compared with 52.1% for Third Quarter 2025. This increase was largely driven by rate growth from (i) divestitures of lower-margin brands, contributing approximately 120 basis points, (ii) beer pricing, which contributed approximately 60 basis points, and (iii) a favorable change in Comparable Adjustments, contributing approximately 50 basis points. These increases were partially offset by (i) 55 basis points of rate decline from higher cost of product sold within the Beer segment, (ii) approximately 25 basis points as a result of lower contractual distributor payments and strategic pricing actions within the Wine and Spirits segment, and (iii) approximately 20 basis points of unfavorable product mix shift within the Wine and Spirits segment.

Selling, general, and administrative expenses


	Third Quarter 2026		Third Quarter 2025		Dollar Change		Percent Change
(in millions)
Beer	$	299.7	$	306.8	$	(7.1)	(2	%)
Wine and Spirits	72.4		110.1		(37.7)		(34	%)
Corporate Operations and Other	58.3		62.9		(4.6)		(7	%)
Comparable Adjustments	60.8		11.5		49.3		NM
Consolidated selling, general, and administrative expenses	$	491.2	$	491.3	$	(0.1)	0	%


			The decrease in Beer selling, general, and administrative expenses is largely due to $4.5 million and $2.7 million of decreased general and administrative expenses and marketing spend, respectively. The decrease in general and administrative expenses was driven by cost savings measures as a result of the 2025 Restructuring Initiative, lower short-term incentive accruals, and favorable foreign currency impact, partially offset by increased compensation and benefits. Marketing as a percentage of net sales is relatively flat year-over-year in continued support our high-end imported beer brands.


			The decrease in Wine and Spirits selling, general, and administrative expenses is largely due to $28.1 million and $9.0 million of decreased marketing spend and general and administrative expenses, respectively. The decrease in marketing spend is primarily driven by our smaller portfolio of exclusively higher-end wine and spirits brands. The decrease in general and administrative expenses was largely driven by cost savings measures as a result of the 2025 Restructuring Initiative.


			The decrease in Corporate Operations and Other selling, general, and administrative expenses is largely due to a decrease in compensation and benefits, driven by lower (i) headcount resulting from the 2025 Restructuring Initiative and (ii) stock-based compensation expense as compared to Third Quarter 2025, partially offset by increased legal expenses.

Selling, general, and administrative expenses as a percent of net sales increased to 22.1% for Third Quarter 2026 as compared to 19.9% for Third Quarter 2025. The increase is driven by rate growth (i) from an unfavorable change in Comparable Adjustments, contributing approximately 205 basis points, and (ii) of approximately 185 basis points of unfavorable impact from the Wine and Spirits Divestitures, partially offset by approximately 145 basis points and


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approximately 20 basis points of rate declines from lower selling, general, and administrative expenses in the Wine and Spirits and Corporate Operations and Other segments, respectively.

Operating income (loss)


	Third Quarter 2026		Third Quarter 2025		Dollar Change		Percent Change
(in millions)
Beer	$	763.5	$	769.9	$	(6.4)	(1	%)
Wine and Spirits	33.7		95.2		(61.5)		(65	%)
Corporate Operations and Other	(58.3)		(62.9)		4.6		7	%
Comparable Adjustments	(46.9)		(9.2)		(37.7)		NM
Consolidated operating income (loss)	$	692.0	$	793.0	$	(101.0)	(13	%)


			The decrease in Beer operating income is largely attributable to the decline in shipment volume and the unfavorable impacts from tariffs on aluminum and fixed cost absorption, partially offset by the favorable impacts from (i) efficiency and cost optimization initiatives, (ii) pricing, and (iii) depreciation expense, as described above.


			The decrease in Wine and Spirits operating income is largely attributable to the (i) Wine and Spirits Divestitures, (ii) unfavorable product mix, and (iii) declines in contractual distributor payments and price, partially offset by lower marketing spend, as described above.


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

Income (loss) from unconsolidated investments


	Third Quarter 2026		Third Quarter 2025		Dollar Change		Percent Change
(in millions)
Equity in earnings (losses) from equity method investees and related activities	$	23.5	$	23.9	$	(0.4)	(2	%)
Net gain (loss) in connection with Exchangeable Shares	—		(38.6)		38.6		NM

Impairment of equity method investments	—		(0.3)		0.3		NM


Income (loss) from unconsolidated investments	$	23.5	$	(15.0)	$	38.5	NM

Interest expense, net

Interest expense, net decreased to $83.2 million for Third Quarter 2026 as compared to $104.4 million for Third Quarter 2025. This decrease of $21.2 million, or 20%, is due to approximately $865 million of lower average borrowings and approximately 10 basis points of lower weighted average interest rates. For additional information, refer to Note 10.


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(Provision for) benefit from income taxes

The provision for income taxes increased to $110.1 million for Third Quarter 2026 from $44.5 million for Third Quarter 2025. Our effective tax rate for Third Quarter 2026 was 17.4% as compared with 6.6% for Third Quarter 2025. In comparison to prior year, our effective tax rate was largely impacted by:

net income tax impacts resulting from (i) the Third Quarter 2025 reversal of valuation allowances for capital loss carryforwards in connection with the SVEDKA Divestiture and (ii) effective tax rates applicable for foreign businesses; partially offset by
a net income tax benefit resulting from the changes to valuation allowances related to net operating losses and tax legislation updates.

For additional information, refer to Note 11.

Net income (loss) attributable to CBI

Net income attributable to CBI decreased to $502.8 million for Third Quarter 2026 from $615.9 million for Third Quarter 2025. This decrease of $113.1 million, or 18%, is largely attributable to the (i) net sales declines in both the Wine and Spirits and Beer segments and (ii) higher provision for income taxes, partially offset by (i) Third Quarter 2025 impairment of our Exchangeable Shares, (ii) successful execution of efficiency and optimization initiatives within the Beer segment, and (iii) lower marketing spend within the Wine and Spirits segment.

Nine Months 2026 compared to Nine Months 2025

Net sales


	Nine Months 2026		Nine Months 2025		Dollar Change		Percent Change
(in millions)
Beer	$	6,589.2	$	6,835.4	$	(246.2)	(4	%)
Wine and Spirits:
Wine	545.5		1,040.1		(494.6)		(48	%)
Spirits	84.1		169.0		(84.9)		(50	%)
Total Wine and Spirits	629.6		1,209.1		(579.5)		(48	%)

Consolidated net sales	$	7,218.8	$	8,044.5	$	(825.7)	(10	%)


	Beer segment	Nine Months 2026		Nine Months 2025		Dollar Change		Percent Change
(in millions, branded product, 24-pack, 12-ounce case equivalents)
Net sales		$	6,589.2	$	6,835.4	$	(246.2)	(4%)

Shipments		329.1		346.4				(5.0%)

Depletions								(2.7%)

The decrease in Beer net sales is largely due to a (i) $341.6 million decline in shipment volume and (ii) $21.1 million of unfavorable product mix primarily from a shift in package types, partially offset by $116.5 million of favorable impact from pricing in select markets. We believe our net sales continue to be suppressed by the socioeconomic factors discussed above. Additionally, shipments trailed depletions as distributors rebalanced inventory levels led by softer consumer demand trends. We also continue to expect shipment volume to generally align with depletion volume for Fiscal 2026.


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	Wine and Spirits segment	Nine Months 2026		Nine Months 2025		Dollar Change		Percent Change
(in millions, branded product, 9-liter case equivalents)
Net sales		$	629.6	$	1,209.1	$	(579.5)	(48	%)
Shipments
Total		6.7		16.2				(58.6	%)
Organic (1) (2)		6.7		7.4				(9.5	%)
U.S. Wholesale		5.2		14.1				(63.1	%)
Organic U.S. Wholesale (1) (2)		5.2		5.8				(10.3	%)
Depletions								(6.6	%)

(1)Includes adjustments to remove volumes associated with the SVEDKA Divestiture for the period March 1, 2024, through November 30, 2024.

(2)Includes adjustments to remove volumes associated with the 2025 Wine Divestitures for the period June 2, 2024, through November 30, 2024.

The decrease in Wine and Spirits net sales is due to $459.1 million from the Wine and Spirits Divestitures that are no longer part of our business and a $120.4 million decrease in organic net sales. The decrease in organic net sales is largely driven by (i) a $65.1 million decrease in branded wine and spirits shipment volume, (ii) a $22.6 million decrease from strategic pricing actions taken on select brands, (iii) $19.2 million in lower contractual distributor payments as compared to Nine Months 2025, and (iv) $13.4 million of unfavorable product mix. The decrease in branded wine and spirits shipment volume and unfavorable product mix are primarily attributable to our U.S. wholesale market, including the change in cadence of shipments to better align with ongoing weaker consumer demand particularly affecting the overall mainstream price segments prior to the 2025 Wine Divestitures. Additionally, we believe our branded wine and spirits shipment volume was negatively impacted by both tariffs imposed by the U.S. government and by retaliatory tariffs and actions in certain international markets. We also continue to expect our repositioned portfolio depletion volume to outpace shipment volume for Fiscal 2026.

Gross profit


	Nine Months 2026		Nine Months 2025		Dollar Change		Percent Change
(in millions)
Beer	$	3,490.2	$	3,656.2	$	(166.0)	(5	%)
Wine and Spirits	257.0		538.0		(281.0)		(52	%)
Comparable Adjustments	12.6		5.7		6.9		NM
Consolidated gross profit	$	3,759.8	$	4,199.9	$	(440.1)	(10	%)


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			The decrease in Beer gross profit is primarily due to (i) a $181.6 million decrease in shipment volume and (ii) $82.8 million of increased cost of product sold, partially offset by the $116.5 million of favorable impact from pricing. The increased cost of product sold is primarily due to (i) $43.1 million in tariffs on aluminum, (ii) $41.7 million of unfavorable fixed cost absorption related to decreased production levels as compared to Nine Months 2025, and (iii) an $11.9 million increase in brewery costs, including maintenance and utilities, partially offset by $13.8 million of lower depreciation, resulting from the timing of assets being put into service. To partially offset the increase in cost of product sold we are executing efficiency and cost optimization initiatives focused largely on procurement and logistics that resulted in over $145 million of net benefit for Nine Months 2026.


			The decrease in Wine and Spirits gross profit is due to $176.9 million from the Wine and Spirits Divestitures that is no longer part of our business and a $104.1 million decrease in organic gross profit. The decrease in organic gross profit is largely attributable to (i) a $41.3 million decrease in branded wine and spirits shipment volume, (ii) the $22.6 million decrease from strategic pricing actions, (iii) the $19.2 million decrease in contractual distributor payments, (iv) $10.1 million of unfavorable product mix, and (v) a $10.1 million increase in cost of product sold. The increase in cost of product sold is largely attributable to unfavorable fixed cost absorption related to decreased production levels as compared to Nine Months 2025.

Gross profit as a percent of net sales decreased slightly to 52.1% for Nine Months 2026 compared with 52.2% for Nine Months 2025. This decrease was primarily due to rate decline of (i) 170 basis points and approximately 20 basis points from higher cost of product sold within the Beer and Wine and Spirits segments, respectively, (ii) approximately 40 basis points as a result of strategic pricing actions and lower contractual distributor payments within the Wine and Spirits segment, (iii) 15 basis points of unfavorable product mix shift within the Beer segment, and (iv) 15 basis points of lower organic branded Wine and Spirits shipment volume. These declines were largely offset by rate growth of (i) approximately 140 basis points driven by divestitures of lower-margin brands and (ii) approximately 110 basis points of favorable impact from beer pricing.

Selling, general, and administrative expenses


	Nine Months 2026		Nine Months 2025		Dollar Change		Percent Change
(in millions)
Beer	$	901.7	$	885.6	$	16.1	2	%
Wine and Spirits	249.1		312.6		(63.5)		(20	%)
Corporate Operations and Other	161.4		180.0		(18.6)		(10	%)
Comparable Adjustments	115.7		66.5		49.2		NM
Consolidated selling, general, and administrative expenses	$	1,427.9	$	1,444.7	$	(16.8)	(1	%)


			The increase in Beer selling, general, and administrative expenses is largely driven by $10.9 million and $4.7 million of increased general and administrative expenses and marketing spend, respectively. The increase in general and administrative expenses is primarily due to higher compensation and benefits and consulting costs, partially offset by lower short-term incentive accruals and cost savings measures as a result of the 2025 Restructuring Initiative. Marketing as a percentage of net sales increased year-over-year to support our high-end imported beer brands. We continue to expect marketing as a percentage of net sales to approximate 9% for Fiscal 2026.


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			The decrease in Wine and Spirits selling, general, and administrative expenses is largely driven by $50.1 million and $12.3 million of decreased marketing spend and general and administrative expenses, respectively. The decrease in marketing spend is primarily driven by our smaller portfolio of exclusively higher-end wine and spirits brands, however, as a percentage of net sales, it increased year-over-year driven by support of our largest brands. The decrease in general and administrative expenses is largely driven by cost savings measures as a result of the 2025 Restructuring Initiative.


			The decrease in Corporate Operations and Other selling, general, and administrative expenses is largely due to a decrease in compensation and benefits driven by lower (i) headcount resulting from the 2025 Restructuring Initiative, (ii) stock-based compensation expense as compared to Nine Months 2025, and (iii) short-term incentive accruals, partially offset by a Nine Months 2025 tax credit and higher depreciation expense, each as a result of our June 2024 corporate headquarters relocation.

Selling, general, and administrative expenses as a percent of net sales increased to 19.8% for Nine Months 2026 as compared with 18.0% for Nine Months 2025. The increase is largely driven by (i) 115 basis points of unfavorable impact from the Wine and Spirits Divestitures, (ii) approximately 80 basis points of rate growth from higher Beer selling, general, and administrative expenses coupled with the decline in Beer net sales, and (iii) an unfavorable change in Comparable Adjustments, contributing 65 basis points of rate growth, partially offset by 55 basis points and 25 basis points of rate decline from decreases in selling, general, and administrative expenses within the Wine and Spirits and Corporate Operations and Other segments, respectively.

Operating income (loss)


	Nine Months 2026		Nine Months 2025		Dollar Change		Percent Change
(in millions)
Beer	$	2,588.5	$	2,770.6	$	(182.1)	(7	%)
Wine and Spirits	7.9		225.4		(217.5)		(96	%)
Corporate Operations and Other	(161.4)		(180.0)		18.6		10	%
Comparable Adjustments	(155.2)		(2,310.8)		2,155.6		NM
Consolidated operating income (loss)	$	2,279.8	$	505.2	$	1,774.6	NM


			The decrease in Beer operating income is largely attributable to the decline in shipment volume and the increase in cost of product sold, including tariffs on aluminum, partially offset by the favorable impact from pricing and efficiency and cost optimization initiatives, as described above. For Fiscal 2026, we expect an approximate $70 million impact from tariffs.


			The decrease in Wine and Spirits operating income is largely attributable to (i) the Wine and Spirits Divestitures, (ii) the decline in organic branded wine and spirits shipment volume, (iii) strategic pricing actions, (iv) lower contractual distributor payment, and (v) unfavorable product mix, partially offset by lower marketing spend, as described above. For Fiscal 2026, we now expect an approximate $13 million impact from tariffs.


			As previously discussed, the decrease in Corporate Operations and Other operating loss is largely due to the decrease in compensation and benefits, partially offset by the Nine Months 2025 tax credit and higher depreciation expense.


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Income (loss) from unconsolidated investments


	Nine Months 2026		Nine Months 2025		Dollar Change		Percent Change
(in millions)
Net gain in connection with Exchangeable Shares	$	—	$	44.7	$	(44.7)	NM
Equity in earnings (losses) from equity method investees	23.0		26.0		(3.0)		(12	%)
Impairment of equity method investments	(1.5)		(2.4)		0.9		38	%
Unrealized net gain (loss) on securities measured at fair value	(5.0)		(2.5)		(2.5)		(100	%)

Income (loss) from unconsolidated investments	$	16.5	$	65.8	$	(49.3)	(75	%)

Interest expense, net

Interest expense, net decreased to $269.7 million for Nine Months 2026 as compared to $311.2 million for Nine Months 2025. This decrease of $41.5 million, or 13%, is due to approximately $785 million of lower average borrowings and approximately 5 basis points of lower weighted average interest rates. For additional information, refer to Note 10.

(Provision for) benefit from income taxes

The (provision for) benefit from income taxes increased to $(494.5) million for Nine Months 2026 from $79.7 million for Nine Months 2025. Our effective tax rate for Nine Months 2026 was 24.4% as compared with 30.7% for Nine Months 2025. In comparison to prior year, our effective tax rate was largely impacted by:

net income tax impacts resulting from (i) the resolution of tax examinations and assessments related to prior periods, (ii) net income tax impacts resulting from the Nine Months 2025 reversal of valuation allowances for capital loss carryforwards in connection with the SVEDKA Divestiture, (iii) effective tax rates applicable for foreign businesses, and (iv) changes to valuation allowances related to net operating losses and tax legislation updates; partially offset by
net income tax impacts resulting from the Nine Months 2025 (i) sale of the remaining assets at the canceled Mexicali Brewery, and (ii) non-deductible portion of the Wine and Spirits goodwill impairment.

We continue to expect our reported effective tax rate for Fiscal 2026 to be in the range of 17% to 19%, inclusive of (i) our evaluation of the OB3 Act and (ii) Pillar Two. We will continue to assess the implications of the OB3 Act and Pillar Two. As it relates to the OB3 Act, our income tax provision may continue to be impacted as additional clarifications or interpretive guidance related to the OB3 Act is released.

For additional information, refer to Note 11.

Net income (loss) attributable to CBI

Net income attributable to CBI increased to $1,484.9 million for Nine Months 2026 from $293.9 million for Nine Months 2025. This increase of $1,191.0 million, or 405%, is largely attributable to (i) the Nine Months 2025 Wine and Spirits goodwill impairment, (ii) the successful continued execution of efficiency and optimization initiatives within the Beer segment, and (iii) decreased marketing spend with the Wine and Spirits segment, partially offset by the (i) net sales declines in both the Wine and Spirits and Beer segments, (ii) Nine Months 2026 provision for income taxes as compared to a benefit from income taxes for Nine Months 2025, (iii) Nine Months 2026 asset impairment and related expenses, and (iv) Nine Months 2025 net gain in connection with our Exchangeable Shares.


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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 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 planned 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 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, 2025, and February 28, 2025, the amount payable to this participating financial institution for suppliers who voluntarily participate in the supply chain finance program was $44.9 million and $39.4 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 2026		Nine Months 2025		Dollar Change
(in millions)
Net cash provided by (used in):
Operating activities	$	2,106.2	$	2,557.5	$	(451.3)
Investing activities	230.1		(1,098.2)		1,328.3
Financing activities	(2,254.7)		(1,538.8)		(715.9)
Effect of exchange rate changes on cash and cash equivalents	2.7		0.8		1.9
Net increase (decrease) in cash and cash equivalents	$	84.3	$	(78.7)	$	163.0


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Operating activities

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


	Nine Months 2026		Nine Months 2025		Dollar Change
(in millions)
Net income (loss)	$	1,532.1	$	339.5	$	1,192.6

Deferred tax provision (benefit)	311.7		(184.2)		495.9

Asset impairment and related expenses	52.1		—		52.1

(Gain) loss on sale of business	31.9		—		31.9
Net gain in connection with Exchangeable Shares	—		(44.7)		44.7
Goodwill impairment	—		2,250.0		(2,250.0)
Other non-cash adjustments	360.3		317.8		42.5
Change in operating assets and liabilities, net of effects from purchase and sale of business	(181.9)		(120.9)		(61.0)
Net cash provided by (used in) operating activities	$	2,106.2	$	2,557.5	$	(451.3)

The $61.0 million net change in operating assets and liabilities was largely driven by higher accounts receivable for the Beer segment as a result of timing of sales and collections, as well as lower accounts payable for both the Beer and Wine and Spirits segments, driven by the timing of purchases and lower purchasing activity following the Wine and Spirits Divestitures, respectively. These changes were partially offset by lower accounts receivables for the Wine and Spirits segment due to lower net sales, reflecting the impact of the Wine and Spirits Divestitures. Additionally, net cash provided by operating activities was positively impacted by lower Nine Months 2026 income tax payments as compared to Nine Months 2025 following the resolution of various tax examinations and assessments.

Investing activities

Net cash provided by (used in) investing activities increased to $230.1 million for Nine Months 2026 from $(1,098.2) million for Nine Months 2025. This increase of $1,328.3 million, or 121%, was primarily due to (i) $850.6 million higher proceeds from sale of business, driven by the 2025 Wine Divestitures, (ii) $275.4 million reduced capital expenditures for Nine Months 2026 as compared to Nine Months 2025, and (iii) $158.7 million reduced business acquisition activity for Nine Months 2026, driven by the June 2024 acquisition of the Sea Smoke wine business.

Financing activities

The increase in net cash used in financing activities consisted of:


	Nine Months 2026		Nine Months 2025		Dollar Change
(in millions)
Net proceeds from (payments of) debt, current and long-term, and related activities	$	(846.5)	$	(307.4)	$	(539.1)
Dividends paid	(538.8)		(551.3)		12.5
Purchases of treasury stock	(824.1)		(668.1)		(156.0)
Net cash provided by (used in) stock-based compensation activities	(6.3)		52.4		(58.7)
Distributions to noncontrolling interests	(37.5)		(47.5)		10.0
Payment of contingent consideration	(1.5)		(0.7)		(0.8)
Purchase of noncontrolling interest	—		(16.2)		16.2
Net cash provided by (used in) financing activities	$	(2,254.7)	$	(1,538.8)	$	(715.9)


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Debt

Total debt outstanding as of November 30, 2025, amounted to $10,663.8 million, a decrease of $833.9 million, or 7%, from February 28, 2025. This decrease consisted of:

4151


						Debt issuance						Debt repayment and redemption

Bank facilities

In May 2025, we entered into the 2025 Term Credit Agreement, which provided for a six-month delayed draw $500.0 million term loan facility. Effective October 21, 2025, we terminated all commitments under the 2025 Term Credit Agreement.

In April 2025, we entered into the 2025 Restatement Agreement that amended and restated our then-existing senior credit facility. The 2025 Restatement Agreement resulted in (i) refinancing the existing $2.25 billion revolving credit facility, (ii) extending its maturity to April 28, 2030, and (iii) refining certain negative covenants. There are no borrowings outstanding under the 2025 Credit Agreement.

Senior notes

Issuance

In October 2025, we issued the 4.95% October 2025 Senior Notes. Proceeds from this offering, net of discount and debt issuance costs, of $495.0 million were used for general corporate purposes, including the repayment of the 4.40% October 2018 Senior Notes.

In May 2025, we issued the 4.80% May 2025 Senior Notes. Proceeds from this offering, net of discount and debt issuance costs, of $496.0 million were used for general corporate purposes, including repayment of commercial paper and other indebtedness, working capital, funding capital expenditures, and other business opportunities.

Repayment and Redemption

On November 17, 2025, we repaid the 4.40% October 2018 Senior Notes upon maturity, together with accrued and unpaid interest, using the proceeds from the 4.95% October 2025 Senior Notes and cash on hand. On July 2, 2025, we redeemed the 4.75% December 2015 Senior Notes prior to maturity using proceeds from the 2025 Wine Divestitures and cash on hand. On June 12, 2025, we redeemed the 5.00% February 2023 Senior Notes prior to maturity using proceeds from the 2025 Wine Divestitures. The 4.75% December 2015 Senior Notes and the 5.00% February 2023 Senior Notes were redeemed at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest.


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General

The majority of our outstanding borrowings as of November 30, 2025, consisted of fixed-rate senior unsecured notes, with maturities ranging from calendar 2026 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 2025 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 expect to utilize unused commitments under our revolving credit facility under our 2025 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 2025 Credit Agreement:


	November 30, 2025		December 31, 2025
(in millions)
Revolving credit facility (1)	$	1,863.7	$	2,025.7

(1)Net of outstanding revolving credit facility borrowings and outstanding letters of credit under our 2025 Credit Agreement and outstanding borrowings under our commercial paper program (excluding unamortized discount) of $375.0 million and $213.0 million as of November 30, 2025, and December 31, 2025, respectively.

The financial institutions participating in our 2025 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, 2025, we and our subsidiaries were subject to covenants that are contained in our 2025 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 2025 Credit Agreement. As of November 30, 2025, under our 2025 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, 2025, we were in compliance with our covenants under our 2025 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 2025 Annual Report and Note 10.


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Common Stock Dividends

On January 7, 2026, 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 on February 12, 2026, to stockholders of record of each class as of the close of business on January 29, 2026.

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 2025 Annual Report.

Share Repurchase Program

Our Board of Directors authorized the repurchase of our publicly traded common stock of up to $4.0 billion under the 2025 Authorization which expires in February 2028. As of November 30, 2025, total shares repurchased are as follows:


			Class A Stock
	Repurchase Authorization		Dollar Value of Shares Repurchased		Number of Shares Repurchased
(in millions, except share data)
2025 Authorization (1)	$	4,000.0	$	824.1	5,005,283

(1)As of November 30, 2025, $3,175.9 million remains available for future share repurchases, excluding the impact of Federal excise tax owed pursuant to the IRA.

Share repurchases under the 2025 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, proceeds from borrowings, and/or divestiture proceeds. Any repurchased shares will become treasury shares, including shares previously repurchased under the 2025 Authorization.

We currently expect to return $4.0 billion in share repurchases to stockholders from Fiscal 2026 through Fiscal 2028, 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 2025 Annual Report.

For additional information, refer to Note 17 of our consolidated financial statements included in our 2025 Annual Report and Note 12.

Accounting Guidance

Accounting guidance adopted for Nine Months 2026 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:


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◦our business strategy, including our strategic vision, growth plans, digital acceleration initiatives, Beer segment focus on upholding our leadership position in the U.S. beer market, and Wine and Spirits segment focus on delivering growth and improving margins beyond Fiscal 2026;

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

◦our innovation, marketing, sales, and distribution plans, activities, and strategies;

◦our long-term financial model, target comparable net leverage and target dividend payout ratios, future operations, financial condition and position, net sales, expenses including potential future impairment losses, hedging programs, cost savings, restructuring, and efficiency initiatives, including the 2025 Restructuring Initiative, capital expenditures, effective tax rates, anticipated tax liabilities, and potential impacts to our income tax provision, expected volume, inventory, supply and demand levels, balance, cadence, and trends, access to capital markets, liquidity and capital resources, including our ability to consistently generate robust cash flow and raise or repay debt, and prospects, plans, and objectives of management;

◦the evolving consumer demand environment and trends, ongoing socioeconomic factors, including subdued spend, depressed sentiment, value-seeking behaviors, and reductions in the discretionary income, elevated unemployment, changing prices, inflation, other unfavorable global and regional economic conditions, demographic trends in the U.S., global supply chain disruptions and constraints, and geopolitical events, including the impact of military conflicts, and our responses thereto;

◦recent and potential future changes to trade and tariff policies, particularly on imports from Mexico, the European Union including Italy, and New Zealand into the U.S. and retaliatory tariffs and other responses imposed on certain product imports originating from the U.S.;

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

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

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

◦the amount and timing of future dividends.

The statements regarding the future reclassification of net gains from AOCI, potential future impairments of our Canopy investment, potential continued impacts from the OB3 Act on our effective tax rate and our income tax provision, including from additional clarifications or interpretive guidance related to the OB3 Act, potential impacts from Pillar Two, and our aim to hedge 100% of our balance sheet exposures.

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:

potential further declines 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 development strategies and activities, including the 2025 Wine Divestitures;
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;


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economic and other uncertainties associated with our international operations, including new or increased tariffs;
water, agricultural and other raw material, and packaging material supply, production, and/or transportation difficulties, disruptions, and impacts, including limited groups of certain suppliers;
reliance on complex information systems and third‐party global networks, including internal control over financial reporting changes in connection with our OneStream consolidation system implementation, as well as risks associated with cybersecurity and artificial intelligence;
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 potential impairments), capital expenditures, and timing;
operational disruptions or catastrophic loss to our breweries, wineries, other production facilities, or distribution systems;
severe weather, natural and man-made disasters, climate change, environmental sustainability and CSR-related regulatory compliance, and failure to meet environmental sustainability and CSR targets, commitments, and aspirations;
the success of our cost savings, restructuring, and efficiency initiatives, including changes in key personnel responsible for oversight of our internal control over financial reporting in connection with the 2025 Restructuring Initiative;
reliance on wholesale distributors, major retailers, and government agencies;
contamination and degradation of product quality from diseases, pests, weather, and other conditions;
communicable infection or disease outbreaks, pandemics, or other widespread public health crises impacting our consumers, employees, distributors, retailers, and/or suppliers;
effects of employee labor activities that could increase our costs;
our indebtedness and interest rate fluctuations;
our international operations, worldwide and regional economic trends and financial market conditions, geopolitical uncertainty, including the impact of military conflicts, or other governmental rules and regulations;
class action or other litigation we face or may face, including relating to alleged securities law violations, abuse or misuse of our products, product liability, marketing or sales practices, including product labeling, or other matters;
potential impairments of our intangible assets, such as goodwill and trademarks;
changes to tax laws, fluctuations in our effective tax rate, accounting for tax positions, the resolution of tax disputes, changes to accounting standards, elections, assertions, or policies, and the potential impact of a global minimum tax rate;
uncertainties related to future cash dividends and share repurchases, which may affect the price of our common stock;
ownership of our Class A Stock by certain individuals and entities affiliated with the Sands family and their Board of Director nomination rights; and
the choice-of-forum provision in our amended and restated by-laws regarding certain stockholder litigation.

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 contained in the Form 10-Q, please refer to Item 1A. “Risk Factors” of our 2025 Annual Report.


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