FISCAL YEAR 2022 ANNUAL REPORT - AnnualReports.com

F I S C A L Y E A R 2 0 2 2 A N N U A L R E P O R T

WORTHREACHING

FOR

As I reflect on fiscal 2022, I’m extremely proud of how our team pulled together to deliver another strong year, driving record net sales growth, and robust cash flow generation. Our team accomplished this while battling through a series of headwinds, including the second year of the COVID-19 pandemic, supply chain challenges, adverse weather events, rising inflation, and rapidly shifting consumer preferences, to name a few. Through it all, we stayed true to who we are, laser-focused on meeting consumers’ needs, and relentless in our efforts to continue building brands consumers love.

Our strong performance in fiscal 2022 was headlined by our beer business, which delivered its 12th consecutive year of volume growth. Our beer portfolio posted net sales growth of 11% and added 30 million cases of high-end growth, extending our leadership position in IRI channels as the #1 high-end beer supplier, and the #1 dollar share gainer across the U.S. beer market. Modelo Especial became the #2 beer brand in U.S. dollar sales in fiscal 2022 and we believe it continues to have significant opportunities to expand distribution and household penetration in the years ahead. Sales of Corona Extra surged during the year and it continues to be one of the most loved beer brands in the U.S. beer market. Pacifico continued to expand distribution beyond its core base in Southern California, delivering 11% volume growth in fiscal 2022, and we believe it has a great pathway ahead to maintain that momentum over the medium-term.

Modelo Chelada complemented the growth of our core beer brands by continuing to make strides in the flavored malt beverage space as the #1 chelada in the U.S. beer market. And the recent launch of new innovations, including Modelo Chelada Naranja Picosa, Modelo Oro (a premium, sessionable, light cerveza with low calories and carbs), Modelo Cantarito-Style Cerveza, Corona Seltzerita, and our recently announced agreement with The Coca-Cola Company to introduce a new, distinctive line of spirit-based, ready-to-drink cocktails in the U.S. using the well-loved and fast-growing FRESCA® brand, are intended to help sustain our momentum going forward.

One hallmark of success for our beer business over the years has been our strength and continuity of leadership. Earlier this year, we announced that Jim Sabia assumed the role of Executive Vice President & President of our beer division. Jim has played a key role in helping to fuel the growth of our beer business for many years and we look forward to further building on our momentum under his leadership. Separately, we were deeply saddened by the sudden passing of Paul Hetterich, Executive Vice President & Chair of our beer division, in April. Paul was a driving force behind the success of our company for more than 35 years. We will forever be grateful to Paul for his passion and dedication in helping establish Constellation as a leader within the beverage alcohol industry. We are committed to honoring his legacy by striving to continue raising the bar on our performance in the years ahead.

Our wine and spirits business delivered solid gross margin improvement for the fiscal year. Our enhanced focus on premiumization of our wine and spirits portfolio continued to yield benefits, as our higher-end brands outpaced the overall U.S. wine and spirits category, primarily driven by Kim Crawford, Meiomi, and The Prisoner Wine Company.

Our innovation efforts in our wine and spirits business also produced strong results driven by Meiomi Cabernet Sauvignon and Kim Crawford Illuminate Sauvignon Blanc, which held the top two spots among new high-end products introduced over the last two years in IRI channels,(1) as well as The Prisoner varietal expansions, High West ready-to-serve cocktails, and Woodbridge’s Buttery Chardonnay and 3-liter box.

To complement our premiumization efforts, and in line with Constellation’s ambition to be the #1 player in fine wine and among the top five in ultra-luxury and icon wines, we recently acquired the highly acclaimed, Oregon wine brand Lingua Franca. We also acquired the remaining portion of Austin Cocktails, an emerging brand in the fast-growing ready-to-drink segment, which began as one of our first Constellation Ventures “Focus on Female Founders” investments. These transactions, along with our acquisition of the remaining portion of My

DEAR SHAREHOLDERS

Constellation Brands, Inc. FY 2022 Annual Report #WORTHREACHINGFOR

Favorite Neighbor in fiscal 2022, are designed to better position our wine and spirits business in categories with significant growth tailwinds behind them.

We continue to believe that the cannabis market represents a significant long-term growth opportunity and we’re encouraged by the work Canopy is doing to further sharpen its strategy—anchored by the premiumization of its brand portfolio, scaling of CPG brands BioSteel and Storz & Bickel across the U.S., and advancing Canopy’s U.S. THC strategy to unlock the U.S. market upon federal legalization. Canopy plans to continue strengthening its competitive positioning in the U.S. by building and acquiring high-quality brands and by focusing on operational excellence and best-in-class distribution supported by strategic relationships with two profitable multi-state operators (MSO)—Acreage and TerrAscend—which are positioned in high-growth Northeastern markets.

I’m also proud of the strides we’re making as part of our commitment to deliver on an ESG strategy that we believe is good for business and our world. We recently announced new targets to reduce our Scope 1 and Scope 2 greenhouse gas emissions by 15% between the periods fiscal 2020 to fiscal 2025 and to restore more than 1 billion gallons of water withdrawals from critical watersheds, while improving water accessibility in disadvantaged communities where we operate, between the periods fiscal 2023 to fiscal 2025.

As part of our commitment to supporting female- and minority-founded start-ups in the beverage alcohol space,

we invested in La Fête du Rosé (a disruptive rosé geared towards multicultural consumers) and Sapere Aude (a uniquely Californian sparkling wine). Our goal is to help improve female and minority entrepreneurs’ probability of success by providing access to funding, subject matter expertise, and enhanced distributor and retailer support. To date, a majority of participants in these programs are growing ahead of their respective categories.

Furthermore, we returned nearly $2 billion to shareholders in the form of dividends and share repurchases in fiscal 2022 and are on track to meet our commitment to return $5 billion to shareholders by year-end fiscal 2023. We remain committed to our previously stated capital allocation strategy, which includes maintaining our investment-grade credit rating, returning cash to shareholders, reinvesting in our beer business to support robust growth, and small, tuck-in acquisitions to fill portfolio gaps.

To fuel the continued growth of our imported beer portfolio, we plan to deploy an increased level of investment over the next four fiscal years to support construction of a new brewery in Southeast Mexico in the state of Veracruz, as well as continued expansion, optimization, and construction at our existing Nava and Obregon operations. Our beer business continues to significantly outperform the U.S. beer industry driven by robust consumer demand, and it is essential that we invest appropriately to support the expected ongoing growth momentum for our exceptional beer brands.

While we operate in a very dynamic and seemingly everchanging industry, one thing has remained constant over the years. Earlier this year, IRI issued its annual rankings of CPG growth leaders and Constellation was recognized for being one of the top performers yet again. In fact, Constellation has been recognized as an IRI growth leader more than any other CPG company in our peer set over the last 10 years.(2) That’s something we’re extremely proud of and we look forward to keeping this momentum going in our new fiscal year and beyond. I want to thank our employees, distributors, and shareholders for your continued confidence and support as we strive to build a company Worth Reaching For.

Bill Newlands President & CEO

IRI, Total U.S.—Multi-Outlet + Convenience, 52 weeks ending February 20, 2022 source for all market data, unless otherwise noted

Reconciliations of non-GAAP financial measures are contained on the inside back page of this Fiscal Year 2022 Annual Report

(1) IRI, Total U.S.—Multi-Outlet + Convenience, 104 weeks ending February 20, 2022

(2) IRI, Total U.S.—Multi-Outlet + Convenience, 52 weeks ending December 26, 2021; IRI and BCG Analysis



FISCAL 2022 HIGHLIGHTS

~$2B

$8.8B RECORD NET SALES

$2.7BTO SHAREHOLDERS

Returned nearly $2 billion to shareholders in FY22 in the form of share repurchases

and dividends as part of our commitment to return $5 billion

to shareholders by FY23.

12th consecutive year of volume growth in Beer businessand strong organic net sales growth in Wine & Spirits business in FY22.

OPERATING CASH FLOWSupporting continued

investment in the growth ofthe business and cash returns

to shareholders.

Source: IRI, Total U.S.—Multi-Outlet + Convenience, 52 weeks ending December 26, 2021; IRI and BCG Analysis

9 CONSECUTIVE YEARSAS A CPG GROWTH LEADER

HIGHEST NUMBER OF CONSECUTIVE YEARS AMONG LARGE CPG COMPANIES

202120202019

201820172016

201520142013

UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

WASHINGTON,D.C.20549

FORM10-K(MarkOne)

☒ ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

ForthefiscalyearendedFebruary28,2022or

☐ TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

Forthetransitionperiodfromto

Commissionfilenumber001-08495

CONSTELLATIONBRANDS,INC.(Exactnameofregistrantasspecifiedinitscharter)

Delaware 16-0716709

(Stateorotherjurisdictionofincorporationororganization) (I.R.S.EmployerIdentificationNo.)

207HighPointDrive,Building100,Victor,NewYork14564

(Addressofprincipalexecutiveoffices)(Zipcode)

Registrant’stelephonenumber,includingareacode(585)678-7100

SecuritiesregisteredpursuanttoSection12(b)oftheAct:

TitleofEachClass TradingSymbol(s) NameofEachExchangeonWhichRegistered

ClassACommonStock STZ NewYorkStockExchange

ClassBCommonStock STZ.B NewYorkStockExchange

SecuritiesregisteredpursuanttoSection12(g)oftheAct:None

Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.Yes☒No☐IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.Yes☐No☒Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecurities

ExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes☒No☐

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).Yes☒No☐

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct.LargeAcceleratedFiler ☒ Acceleratedfiler ☐Non-acceleratedfiler ☐ Smallerreportingcompany ☐

Emerginggrowthcompany ☐Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodfor

complyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.☐Indicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagement’sassessmentofthe

effectivenessofitsinternalcontroloverfinancialreportingunderSection404(b)oftheSarbanes-OxleyAct(15U.S.C.7262(b))bytheregisteredpublicaccountingfirmthatpreparedorissueditsauditreport.☒

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).Yes☐No☒

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Theaggregatemarketvalueofthevotingandnon-votingcommonequityheldbynon-affiliatesoftheregistrant,basedupontheclosingsalespricesoftheregistrant’sClassAandClassBCommonStockasreportedontheNewYorkStockExchangeasofthelastbusinessdayoftheregistrant’smostrecentlycompletedsecondfiscalquarterwas$33.3billion.

ThenumberofsharesoutstandingwithrespecttoeachoftheclassesofcommonstockofConstellationBrands,Inc.,asofApril14,2022,issetforthbelow:

Class NumberofSharesOutstanding

ClassACommonStock,parvalue$.01pershare 162,762,867

ClassBCommonStock,parvalue$.01pershare 23,205,885

Class1CommonStock,parvalue$.01pershare 2,248,714

DOCUMENTSINCORPORATEDBYREFERENCE

PortionsoftheProxyStatementofConstellationBrands,Inc.tobeissuedforthe2022AnnualMeetingofStockholdersareincorporatedbyreferenceinPartIIItotheextentdescribedtherein.

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TABLEOFCONTENTSPage

FORWARD-LOOKINGSTATEMENTS i

DEFINEDTERMS iv

PARTI

Item1. Business 1

Item1A. RiskFactors 17

Item1B. UnresolvedStaffComments NA

Item2. Properties 31

Item3. LegalProceedings 31

Item4. MineSafetyDisclosures NA

PARTII

Item5. MarketforRegistrant’sCommonEquity,RelatedStockholderMatters,andIssuerPurchasesofEquitySecurities

32

Item6. [Reserved] NA

Item7. Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations 33

Item7A. QuantitativeandQualitativeDisclosuresAboutMarketRisk 56

Item8. FinancialStatementsandSupplementaryData 58

Item9. ChangesinandDisagreementsWithAccountantsonAccountingandFinancialDisclosure NA

Item9A. ControlsandProcedures 117

Item9B. OtherInformation NA

Item9C. DisclosureRegardingForeignJurisdictionsthatPreventInspections NA

PARTIII

Item10. Directors,ExecutiveOfficers,andCorporateGovernance 118

Item11. ExecutiveCompensation 118

Item12. SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters 118

Item13. CertainRelationshipsandRelatedTransactions,andDirectorIndependence 119

Item14. PrincipalAccountantFeesandServices 119

PARTIV

Item15. ExhibitsandFinancialStatementSchedules 120

Item16. Form10-KSummary 120

SIGNATURES 127

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ThisForm10-Kcontains“forward-lookingstatements”withinthemeaningofSection27AoftheSecuritiesActandSection21EoftheExchangeAct.Theseforward-lookingstatementsaresubjecttoanumberofrisksanduncertainties,manyofwhicharebeyondourcontrol,whichcouldcauseactualresultstodiffermateriallyfromthosesetforthin,orimpliedby,suchforward-lookingstatements.AllstatementsotherthanstatementsofhistoricalfactincludedinthisForm10-Kareforward-lookingstatements,includingwithoutlimitation:

• ThestatementsunderItem1.“Business”andItem7.“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”regarding:◦ ourbusinessstrategy,futureoperations,innovationstrategyandnewproducts,futurefinancial

position,futurenetsalesandexpectedvolumeandinventorytrends,futuremarketingspend,futureeffectivetaxratesandanticipatedtaxliabilities,prospects,plans,andobjectivesofmanagement;

◦ theanticipatedavailabilityofwater,agriculturalandotherrawmaterials,andpackagingmaterials;

◦ theCOVID-19pandemic;◦ ourESGstrategy,sustainabilityinitiatives,environmentalstewardshiptargets,andhumancapital

andDEIobjectivesandgoals;◦ thepotentialimpacttosupply,productionlevels,andcostsduetoglobalsupplychainlogisticsand

transportation;◦ expectedorpotentialactionsofthirdparties,includingpossiblechangestolaws,rules,and

regulations;◦ anticipatedinflationarypressuresandourresponsesthereto;◦ expectedpurchaseaccountingallocations;◦ thefutureexpectedbalanceofsupplyanddemandforandinventorylevelsofourproducts;◦ therefinementofourwineandspiritsportfolio;◦ theWineandSpiritsDivestitures,includingpotentialamountsofcontingentconsideration;◦ themanner,timing,anddurationofthesharerepurchaseprogramandsourceoffundsforshare

repurchases;and◦ theamountandtimingoffuturedividends.

• Thestatementsregardingourbeerexpansion,optimization,and/orconstructionactivities,includinganticipatedscope,capacity,costs,capitalexpenditures,timeframesforcompletion,discussionswithgovernmentofficialsinMexico,andpotentialfutureimpairmentofnon-recoverablebreweryconstructionassetsandothercostsandexpenses.

• Thestatementsregarding:◦ thevolatilityofthefairvalueofourinvestmentinCanopymeasuredatfairvalue;◦ ouractivitiessurroundingourinvestmentinCanopy;◦ Canopy’sexpectationsandthetransactionwithAcreage;◦ thetimingandsourceoffundsforoperatingactivitiesandexercisesoftheNovember2018Canopy

Warrants,ifany;◦ apotentialfutureimpairmentofourCanopyEquityMethodInvestment;and◦ ourfutureownershiplevelinCanopyandourfutureshareofCanopy’sreportedearningsand

losses.• Thestatementsregardingourtargetednetleverageratio.• ThestatementsregardingthefuturereclassificationofnetgainsfromAOCI.• Thestatementsregardingtheimpactofanypotentialcommonstockdeclassification,includingin

connectionwiththeProposal.

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ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIi

WhenusedinthisForm10-K,thewords“anticipate,”“intend,”“expect,”andsimilarexpressionsareintendedtoidentifyforward-lookingstatements,althoughnotallforward-lookingstatementscontainsuchidentifyingwords.Allforward-lookingstatementsspeakonlyasofthedateofthisForm10-K.Weundertakenoobligationtoupdateorreviseanyforward-lookingstatements,whetherasaresultofnewinformation,futureevents,orotherwise.Althoughwebelievethattheexpectationsreflectedintheforward-lookingstatementsarereasonable,wecangivenoassurancethatsuchexpectationswillprovetobecorrect.Inadditiontotherisksanduncertaintiesofordinarybusinessoperationsandconditionsinthegeneraleconomyandmarketsinwhichwecompete,ourforward-lookingstatementscontainedinthisForm10-Karealsosubjecttotherisk,uncertainty,andpossiblevariancefromourcurrentexpectationsregarding:

• water,agriculturalandotherrawmaterial,andpackagingmaterialsupply,production,and/orshipmentdifficultieswhichcouldadverselyaffectourabilitytosupplyourcustomers;

• theabilitytorespondtoanticipatedinflationarypressures,includingreductionsinconsumerdiscretionaryincomeandourabilitytopassalongrisingcoststhroughincreasedsellingprices;

• theactualimpacttosupply,productionlevels,andcostsfromglobalsupplychainlogistics,transportationchallenges,wildfires,andsevereweatherevents,dueto,amongotherreasons,actualsupplychainandtransportationperformanceandtheactualseverityandgeographicalreachofwildfiresandsevereweatherevents;

• theactualbalanceofsupplyanddemandforourproductsandpercentageofourportfoliodistributedthroughanyparticulardistributordueto,amongotherreasons,actualrawmaterialandwatersupply,actualshipmentstodistributors,andactualconsumerdemand;

• theactualdemand,netsales,channelproportions,andvolumetrendsforourproductsdueto,amongotherreasons,actualshipmentstodistributorsandactualconsumerdemand;

• beeroperationsexpansion,optimization,and/orconstructionactivities,scope,capacity,costs(includingimpairments),capitalexpenditures,andtimingdueto,amongotherreasons,marketconditions,ourcashanddebtposition,receiptofrequiredregulatoryapprovalsbytheexpecteddatesandontheexpectedterms,resultsofdiscussionswithgovernmentofficialsinMexico,theactualamountofnon-recoverablebreweryconstructionassetsandothercostsandexpenses,andotherfactorsasdeterminedbymanagement;

• thedurationandimpactoftheCOVID-19pandemic,includingbutnotlimitedtotheimpactandseverityofnewvariants,vaccineefficacyandimmunizationrates,theclosureofnon-essentialbusinesses,whichmayincludeourmanufacturingfacilities,andotherassociatedgovernmentalcontainmentactions,andtheincreaseincyber-securityattacksthathaveoccurredwhilenon-productionemployeesworkremotely;

• theimpactofthemilitaryconflictinUkraineandassociatedgeopoliticaltensionsandresponses,includingoninflation,supplychains,commodities,energy,andcyber-security;

• theamount,timing,andsourceoffundsforanysharerepurchasesorfutureexercisesoftheNovember2018CanopyWarrants,ifany,whichmayvaryduetomarketconditions;ourcashanddebtposition;theimpactofthebeeroperationsexpansion,optimization,and/orconstructionactivities;theimpactofourinvestmentinCanopy;andotherfactorsasdeterminedbymanagementfromtimetotime;

• theamountandtimingoffuturedividendswhicharesubjecttothedeterminationanddiscretionofourBoardofDirectorsandmaybeimpactedifourabilitytousecashflowtofunddividendsisaffectedbyunanticipatedincreasesintotalnetdebt,weareunabletogeneratecashflowatanticipatedlevels,orwefailtogenerateexpectedearnings;

• thefairvalueofourinvestmentinCanopyduetomarketandeconomicconditionsinCanopy’smarketsandbusinesslocations;

• theaccuracyofmanagement’sprojectionsrelatingtotheCanopyinvestmentduetoCanopy’sactualresultsandmarketandeconomicconditions;

• thetimeframeandamountofanypotentialfutureimpairmentofourCanopyEquityMethodInvestmentifourexpectationsaboutCanopy’sprospectiveresultsandcashflowsdeclinewhichcouldbeinfluencedbyvariousfactorsincludingadversemarketconditionsorifCanopyrecordsasignificantimpairmentofgoodwillorintangibleassetsorotherlong-livedassets,makessignificantassetsales,orhaschangesinseniormanagement;

• theamountofcontingentconsideration,ifany,receivedintheWineandSpiritsDivestitureswhichwilldependonactualfuturebrandperformance;

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ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIii

• theexpectedimpactsofwineandspiritsportfoliorefinementactivities;• purchaseaccountingwithrespecttoanytransaction,ortheassumptionsusedregardingtheassets

purchasedandliabilitiesassumedtodeterminetheirfairvalue;• anyimpactofU.S.federallawsonCanopyStrategicTransactionsorupontheimplementationofsuch

CanopyStrategicTransactions,ortheimpactofanyCanopyStrategicTransactionuponourfutureownershiplevelinCanopyorourfutureshareofCanopy’sreportedearningsandlosses;

• whetheradefinitiveagreementinrelationtotheProposalwillbeenteredinto,whattheultimatetermsofanysuchagreementmaybe,whethertherequiredstockholderapprovalwouldbeobtained,andtheimpactofanysuchtransactiononoursharesoutstandingandassociatedfinancialmetrics;and

• ourtargetednetleverageratioduetomarketconditions,ourabilitytogeneratecashflowatexpectedlevels,andourabilitytogenerateexpectedearnings.

Additionalimportantfactorsthatcouldcauseactualresultstodiffermateriallyfromthosesetforthinorimpliedbyourforward-lookingstatementscontainedinthisForm10-KarethosedescribedinItem1A.“RiskFactors”andelsewhereinthisreportandinourotherfilingswiththeSEC.

MarketpositionsandindustrydatadiscussedinthisForm10-Kareasofcalendar2021andhavebeenobtainedorderivedfromindustryandgovernmentpublicationsandourestimates.Theindustryandgovernmentpublicationsinclude:BeerMarketersInsights;BeverageInformationGroup;GrowersNetwork;ImpactDatabankReviewandForecast;InternationalWineandSpiritsResearch(IWSR);IRI;BeerInstitute;andNationalAlcoholBeverageControlAssociation.Wehavenotindependentlyverifiedthedatafromtheindustryandgovernmentpublications.Unlessotherwisenoted,allreferencestomarketpositionsarebasedonequivalentunitvolume.

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ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIiii

DefinedTerms

Unlessthecontextotherwiserequires,theterms“Company,”“CBI,”“we,”“our,”or“us”refertoConstellationBrands,Inc.anditssubsidiaries.WeusetermsinthisForm10-KandinourNotesthatarespecifictousorareabbreviationsthatmaynotbecommonlyknownorused.

$ U.S.dollars

2.25%July2021SeniorNotes $1,000.0millionprincipalamountof2.25%seniornotesissuedinJuly2021

2.65%November2017SeniorNotes $700.0millionprincipalamountof2.65%seniornotesissuedinNovember2017andredeemedinAugust2021,priortomaturity

2.70%May2017SeniorNotes $500.0millionprincipalamountof2.70%seniornotesissuedinMay2017andredeemedinAugust2021,priortomaturity

2018Authorization authoritytorepurchaseupto$3.0billionofourClassAStockandClassBStock,authorizedinJanuary2018byourBoardofDirectors

2019TermCreditAgreement atermloancreditagreement,datedasofJune28,2019,consistingoftheFive-YearTermFacility,nowsupersededbythe2020TermCreditAgreementandtheJune2021TermCreditAgreement

2020CreditAgreement ninthamendedandrestatedcreditagreement,datedasofMarch26,2020,providedforanaggregaterevolvingcreditfacilityof$2.0billion,nowsupersededbythe2022CreditAgreement

2020RestatementAgreement restatementagreement,datedasofMarch26,2020,thatamendedandrestatedoureighthamendedandrestatedcreditagreement,datedasofSeptember14,2018,whichwasourthen-existingseniorcreditfacility

2020TermCreditAgreement amendedandrestatedtermcreditagreement,datedasofMarch26,2020,nowrepaidinfull

2020TermLoanRestatementAgreement restatementagreement,datedasofMarch26,2020,thatamendedandrestatedthe2019TermCreditAgreement,resultingintheMarch2020TermCreditAgreement

2020U.S.wildfires significantwildfiresthatbrokeoutinCalifornia,Oregon,andWashingtonstateswhichaffectedthe2020U.S.grapeharvest

2021Authorization authoritytorepurchaseupto$2.0billionofourClassAStockandClassBStock,authorizedinJanuary2021byourBoardofDirectors

2022CreditAgreement tenthamendedandrestatedcreditagreement,datedasofApril14,2022,providesforanaggregaterevolvingcreditfacilityof$2.25billion

2022RestatementAgreement restatementagreement,datedasofApril14,2022,thatamendedandrestatedthe2020CreditAgreement,whichwasourthen-existingseniorcreditfacilityasofFebruary28,2022

2022TermCreditAgreement March2020TermCreditAgreement,inclusiveofamendmentsdatedasofJune10,2021,andApril14,2022

3-tier distributionchannelwhereproductsaresoldtoadistributor(wholesaler)whothensellstoaretailer;theretailersellstheproductstoaconsumer

3-tiereCommerce digitalcommerceexperienceforourconsumerstopurchasebeveragealcoholfromretailers

ABA alternativebeveragealcohol

Acreage AcreageHoldings,Inc.

AcreageFinancialInstrument acalloptionforCanopytoacquire70%ofthesharesofAcreageatafixedexchangeratioand30%atafloatingexchangeratio

AcreageTransaction Canopy’sintentiontoacquireAcreageuponU.S.federalcannabislegalization,subjecttocertainconditions

AdministrativeAgent BankofAmerica,N.A.,asadministrativeagentforapplicableseniorcreditfacilitiesandtermcreditagreements

Term Meaning

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ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIiv

AOCI accumulatedothercomprehensiveincome(loss)

ASR acceleratedsharerepurchaseagreementwithathird-partyfinancialinstitution

AustinCocktails wemadeaninitialinvestmentintheAustinCocktailsbusinessandsubsequentlyacquiredtheremainingownershipinterest

BallastPointDivestiture saleofBallastPointcraftbeerbusiness,includinganumberofitsassociatedproductionfacilitiesandbrewpubs

BlackVelvetDivestiture saleofBlackVelvetCanadianWhiskybusinessandthebrand’sassociatedproductionfacility,alongwithasubsetofCanadianwhiskybrandsproducedatthatfacility,andrelatedinventory

BRG(s) businessresourcegroup(s)

C$ Canadiandollars

Canopy wemadeaninvestmentinCanopyGrowthCorporation,anOntario,Canada-basedpubliccompany

CanopyDebtSecurities convertibledebtsecuritiesissuedbyCanopy

CanopyEquityMethodInvestment November2017CanopyInvestment,November2018CanopyInvestment,andMay2020CanopyInvestment,collectively

CanopyStrategicTransaction(s) anypotentialacquisition,divestiture,investment,orothersimilartransactionmadebyCanopy,includingbutnotlimitedtotheAcreageTransaction

CARESAct CoronavirusAid,Relief,andEconomicSecurityAct

CBInternational CBInternationalFinanceS.àr.l.,awholly-ownedsubsidiaryofours

CDC CentersforDiseaseControlandPrevention

Class1Stock ourClass1ConvertibleCommonStock,parvalue$0.01pershare

ClassAStock ourClassACommonStock,parvalue$0.01pershare

ClassBStock ourClassBConvertibleCommonStock,parvalue$0.01pershare

Coca-Cola TheCoca-ColaCompany

CODM chiefoperatingdecisionmaker

ComparableAdjustments certainitemsaffectingcomparabilitythathavebeenexcludedbymanagement

ConcentrateBusinessDivestiture saleofcertainbrandsusedinourconcentratesandhigh-colorconcentratebusiness,andcertainintellectualproperty,inventory,interestsincertaincontracts,andotherassets

Copper&Kings Copper&KingsAmericanBrandyCompany,acquiredbyus

CPG consumerpackagedgoods

Crown CrownImportsLLC,awholly-ownedsubsidiaryofours

CSR corporatesocialresponsibility

DEI diversity,equity,andinclusion

Depletions representU.S.domesticdistributorshipmentsofourrespectivebrandedproductstoretailcustomers,basedonthird-partydata

DGCL GeneralCorporationLawoftheStateofDelaware

DTC direct-to-consumer;adigitalcommerceexperienceforconsumerstopurchasedirectlyfrombrandwebsiteswithinventorycomingstraightfromthesupplier

EHS Environmental,Health,&Safety

EmpathyWines EmpathyWinesbusiness,includingadigitally-nativewinebrand,acquiredbyus

EmployeeStockPurchasePlan theCompany’semployeestockpurchaseplan,establishedin1989,underwhich9,000,000sharesofClassAStockmaybeissued

ERP enterpriseresourceplanningsystem

ESG environmental,social,andgovernance

ExchangeAct SecuritiesExchangeActof1934,asamended

Term Meaning

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ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIv

FASB FinancialAccountingStandardsBoard

Fiscal2020 theCompany’sfiscalyearendedFebruary29,2020



Fiscal2023 theCompany’sfiscalyearendingFebruary28,2023





Five-YearTermFacility afive-yeartermloanfacilityunderthe2022TermCreditAgreement

Form10-K thisAnnualReportonForm10-KforFiscal2022unlessotherwisespecified

Gallo E.&J.GalloWinery

GHG greenhousegas

GILTI globalintangiblelow-taxedincome

GlassPlant glassproductionplantinNavaoperatedthroughanequally-ownedjointventurewithOwens-Illinois

June2019WarrantModification June2019modificationofthetermsofthewarrantsandcertainotherrightsoriginallyobtainedinNovember2018whichgaveustheoptiontopurchase139.7millioncommonsharesofCanopy

June2019WarrantModificationLoss ourshareofCanopy’sadditionallossresultingfromtheJune2019WarrantModification

June2021TermCreditAgreement March2020TermCreditAgreement,inclusiveofamendmentdatedasofJune10,2021

Lender BankofAmerica,N.A.,aslenderforthetermcreditagreement

LIBOR LondonInterbankOfferedRate

LinguaFranca LinguaFranca,LLCbusiness,acquiredbyus

Long-TermStockIncentivePlan astockholder-approvedomnibusincentiveplanthatprovidestheabilitytograntvarioustypesofequityandcashawardstoeligibleplanparticipants

March2020TermCreditAgreement amendedandrestatedtermloancreditagreement,datedasofMarch26,2020,thatprovidedforaggregatefacilitiesof$491.3million,consistingoftheFive-YearTermFacility

May2020CanopyInvestment May2020exerciseoftheNovember2017CanopyWarrantsatanexercisepriceofC$12.98perwarrantshare

MD&A Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperationsunderItem7.ofthisForm10-K

MexicaliBrewery suspendedbreweryconstructionprojectlocatedinMexicali,BajaCalifornia,Mexico

MexicoBeerProjects expansion,optimization,and/orconstructionactivitiesattheObregonBrewery,NavaBrewery,andSoutheastMexicoBrewery

MissionBell MissionBellWineryinMadera,California

M&T ManufacturersandTradersTrustCompany

MyFavoriteNeighbor wemadeaninitialinvestmentinMyFavoriteNeighbor,LLCandsubsequentlyacquiredtheremainingownershipinterest

NA notapplicable

Nasdaq TheNasdaqGlobalSelectMarket

Nava Nava,Coahuila,Mexico

NavaBrewery brewerylocatedinNava

Term Meaning

TableofContents

ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIvi

Nelson’sGreenBrier wemadeaninitialinvestmentinNelson’sGreenBrierDistillery,LLCandsubsequentlyincreasedourownershipinterest

Netsales grosssaleslesspromotions,returnsandallowances,andexcisetaxes

NM notmeaningful

NobiloWineDivestiture saleofNewZealand-basedNobiloWinebrandandcertainrelatedassets

Note(s) notestotheconsolidatedfinancialstatementsunderItem8.ofthisForm10-K

November2017CanopyInvestment ourinitialinvestmentfor18.9millioncommonsharesofCanopy

November2017CanopyWarrants warrantswhichgaveustheoptiontopurchase18.9millioncommonsharesofCanopy,exercisedMay1,2020

November2018CanopyInvestment ourincrementalinvestmentfor104.5millioncommonsharesofCanopy

November2018CanopyTransaction November2018CanopyInvestmentandthepurchasebyusoftheNovember2018CanopyWarrants,collectively

November2018CanopyWarrants TrancheAWarrants,TrancheBWarrants,andTrancheCWarrants,collectively

NPD newproductdevelopment

NYSE NewYorkStockExchange

Obregon Obregon,Sonora,Mexico

ObregonBrewery brewerylocatedinObregon

OCI othercomprehensiveincome(loss)

Owens-Illinois O-IGlass,Inc.,theultimateparentofthecompanywithwhichwehaveanequally-ownedjointventuretooperatetheGlassPlant

PaulMassonDivestiture saleofPaulMassonGrandeAmberBrandybrand,relatedinventory,andinterestsincertaincontracts

Proposal non-bindingproposalfromtheSandsfamilyandentitiescontrolledbymembersoftheSandsfamilytodeclassifyourcommonstock

ProxyStatement ProxyStatementforFiscal2022tobeissuedinconnectionwiththe2022AnnualMeetingofStockholdersofourCompany

RTD ready-to-drink

Scope1 directGHGemissionsfromsourcesthatareownedorcontrolledbythecompany,suchasemissionsassociatedwithfurnacesorvehicles

Scope2 indirectGHGemissionsassociatedwiththepurchaseofelectricity,steam,heat,orcooling

SEC SecuritiesandExchangeCommission

SecuritiesAct SecuritiesActof1933,asamended

SKU stock-keepingunit,ascannablebarcode,mostoftenseenprintedonproductlabelsinaretailstore

SOFR securedovernightfinancingrateadministeredbytheFederalReserveBankofNewYork

SoutheastMexicoBrewery anewbreweryintendedtobelocatedinSoutheastMexicointhestateofVeracruz

SOX Section404oftheSarbanes-OxleyActof2002

TCJAct TaxCutsandJobsAct

TermLoanRestatementAgreement restatementagreement,datedasofMarch26,2020,thatamendedandrestatedourtermcreditagreementdatedasofSeptember14,2018,resultinginthe2020TermCreditAgreement

THC tetrahydrocannabinol

TrancheAWarrants warrantswhichgiveustheoptiontopurchase88.5millioncommonsharesofCanopyexpiringNovember1,2023

Term Meaning

TableofContents

ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIvii

TrancheBWarrants warrantswhichgiveustheoptiontopurchase38.4millioncommonsharesofCanopyexpiringNovember1,2026

TrancheCWarrants warrantswhichgiveustheoptiontopurchase12.8millioncommonsharesofCanopyexpiringNovember1,2026

TSX TorontoStockExchange

U.S. UnitedStatesofAmerica

U.S.GAAP generallyacceptedaccountingprinciplesintheU.S.

VWAPExercisePrice volume-weightedaverageoftheclosingmarketpriceofCanopy’scommonsharesontheTSXforthefivetradingdaysimmediatelyprecedingtheexercisedate

WHO WorldHealthOrganization

WineandSpiritsDivestiture saleofaportionofourwineandspiritsbusiness,includinglower-margin,lower-growthwineandspiritsbrands,relatedinventory,interestsincertaincontracts,wineries,vineyards,offices,andfacilities

WineandSpiritsDivestitures WineandSpiritsDivestitureandtheNobiloWineDivestiture,collectively

Term Meaning

TableofContents

ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORIviii

Item1.Business

Introduction

Weareaninternationalproducerandmarketerofbeer,wine,andspiritswithoperationsintheU.S.,Mexico,NewZealand,andItalywithpowerful,consumer-connected,high-qualitybrandslikeCoronaExtra,ModeloEspecial,theRobertMondaviBrandFamily,KimCrawford,Meiomi,ThePrisonerWineCompany,andHighWest.IntheU.S.,weareoneofthetopgrowthcontributorsatretailamongbeveragealcoholsuppliers.Wearethethird-largestbeercompanyandcontinuetostrengthenourleadershippositionasthe#1high-endbeersupplierandthe#1sharegaineracrosstheU.S.beermarket.Withinwineandspirits,wearemakingsolidprogressintransformingourbrandportfoliotoshifttoahigher-endfocusedbusinesstodelivernetsalesgrowthandmarginexpansion.Thestrengthofourbrandsmakesusasupplierofchoicetomanyofourconsumersandourcustomers,whichincludewholesaledistributors,retailers,andon-premiselocations.Weconductourbusinessthroughentitieswewhollyownaswellasthroughavarietyofjointventuresandotherentities.

Ourmissionistobuildbrandsthatpeoplelove.Weplacearelentlessfocusontheconsumerinourpursuittodeliverwhat’snextandcreatenewexperiencesthatelevatehumanconnections.WebelieveitisamissionthatisWorthReachingFor.Itisworthourdedication,hardwork,andthebold,calculatedriskswetaketodelivermoreforouremployees,consumers,tradepartners,stockholders,andcommunitiesinwhichweliveandwork.Itiswhathasmadeusoneofthefastest-growinglargeCPGcompaniesintheU.S.atretail.Ourcorevaluesguideourpursuits:

People–Truestrengthisachievedwheneveryonehasavoice.Thatiswhywebuildourcultureonafoundationthatencouragesinclusionanddiversityofthought,whereeveryonefeelsempoweredtobringtheirtrueselvesanddifferentpointsofviewstodriveusforwardCustomers–Wearerelentlesstoanticipatewhatconsumerswanttoday,tomorrow,andwellintothefutureEntrepreneurship–Asanindustryleader,weactwithabold,calculatedapproachtorealizeourvisionandunlocknewgrowthopportunitiesQuality–OurpromiseistopursuequalityinourprocessandproductsbycontinuouslyenhancingwhatwedoandhowwedoitIntegrity–Itisaboutmorethanachievinggoals.Howweachievethemisjustasimportant.Weactwithhighmoralandethicalstandardsandalwaysdotherightthing,evenwhenitisthehardthing

HeadquarteredinVictor,NewYork,weareaDelawarecorporationincorporatedin1972,asthesuccessortoabusinessfoundedin1945.

Strategy

Ouroverallstrategicvisionistoconsistentlydeliverindustry-leadingtotalstockholderreturnsoverthelong-termthroughafocusonthesekeypillars:

• continuebuildingstrongbrandspeoplelovewithadvantagedroutestomarket;• buildaculturethatisconsumer-obsessedandleveragesrobustinnovationcapabilitiestostayonthe

forefrontofconsumertrends;and• deliveronimpactfulESGinitiativesthatwebelievearenotonlygoodbusiness,butalsogoodforthe

world.

Wewillcontinuetostriveforsuccessbyensuringconsumer-leddecisionmakingdrivesallaspectsofourbusiness;buildingadiversetalentpipelinewithbest-in-classpeopledevelopment;investingindatasystems,architecture,andinfrastructurethatenablesourbusiness;andexemplifyingintentionalandproactivebalancesheetmanagement.Weplacefocusonpositioningourportfolioonhigher-margin,higher-growthcategoriesofthebeveragealcoholindustrytoalignwithconsumer-ledpremiumizationtrends,whichwebelievewillcontinuetodrivefastergrowthratesacrossbeer,wine,andspirits.Tocontinuecapitalizingonconsumer-ledpremiumizationtrends,becomemorecompetitive,andgrowourbusiness,wehaveemployedastrategydedicatedtoorganicgrowthandsupplementedbytargetedinvestmentsandacquisitions.Wealsobelieveakeycomponenttodriving

PARTI ITEM1.BUSINESS TableofContents

ConstellationBrands,Inc.FY2022Form10-K #WORTHREACHINGFORI1

fastergrowthratesistoinvestandstrengthenourleadershippositionwithintheDTCand3-tiereCommercechannels.Asaresultofthisstrategy,wehaverealizedimpactsoneachsegmentofourbusiness.

Inourbeerbusiness,wefocusonupholdingourleadershippositioninthehigh-endoftheU.S.beermarketthroughmaintenanceofleadingmargins,enhancementstoourresultsofoperationsandoperatingcashflow,andexploringnewavenuesforgrowth.Weareinvestinginthenextincrementofcapacityadditionsrequiredtosustainourmomentum.Wecontinuetofocusonconsumer-ledinnovationbycreatingnewlineextensionsbehindcelebrated,trustedbrandsandpackageformatsthatmeetemergingneeds.

Inourwineandspiritsbusiness,wecontinuetofocusonhigher-endbrands,improvingmargins,andcreatingoperatingefficiencies.Wecontinuetorefineourportfolioprimarilythroughtheacquisitionofhigher-margin,higher-growthwineandspiritsbrands.Werecentlyreorganizedthisbusinessintotwodistinctcommercialteams,onefocusedonourfinewineandcraftspiritsbrandsandtheotherfocusedonourmainstreamandpremiumbrands.Whileeachteamhasitsowndistinctstrategy,bothremainalignedtothegoalofacceleratingperformancebygrowingnetsalesandexpandingmargins.Inaddition,withintheDTCand3-tiereCommercechannels,weaimtohavethesechannelscollectivelyaccountfor20%ofourwineandspiritsbusinessovertime.

WecomplementourstrategywithourinvestmentinCanopybyexpandingourportfoliointoadjacentcategories.Canopyisaleadingcannabiscompanywithoperationsincountriesacrosstheworld.Thisinvestmentisconsistentwithourlong-termstrategytoidentify,address,andstayaheadofevolvingconsumertrendsandmarketdynamics.OurrelationshipwithCanopyisdesignedtohelppositionittobesuccessfulincannabisproduction,branding,andintellectualproperty.

Forfurtherinformationonourstrategy,see“Overview”withinMD&A.

Investments,acquisitions,anddivestitures

Inconnectionwithexecutingourstrategyasoutlinedabove,duringFiscal2022wecompletedthefollowingtransactions:

WineandSpiritssegment

LodiDistributionCenter December2021

AcquisitionofapreviouslyleaseddistributionfacilitylocatedinLodi,California;consistentwithourstrategicfocustoinvestininfrastructurethatenablesourbusinesstogrow.

MyFavoriteNeighbor November2021

Acquisitionofsuper-luxury,DTC-focusedwinebusinessaswellascertainwholesalesourcedbrands;supportedourfocusonconsumer-ledpremiumizationtrendsandmeetingtheevolvingneedsofourconsumers.

Date StrategicContribution

ForfurtherinformationaboutoursignificantFiscal2022,Fiscal2021,andFiscal2020transactions,referto(i)“Overview”withinMD&Aand(ii)Notes2and5.

Businesssegments

Wehavefourreportablesegments:(i)Beer,(ii)WineandSpirits,(iii)CorporateOperationsandOther,and(iv)Canopy.Thebusinesssegmentsreflecthowouroperationsaremanaged,resourcesareallocated,operatingperformanceisevaluatedbyseniormanagement,andthestructureofourinternalfinancialreporting.OurownershipinterestinCanopyallowsustoexercisesignificantinfluence,butnotcontrol,and,therefore,weaccountforourinvestmentinCanopyundertheequitymethod.AmountsincludedbelowfortheCanopysegmentrepresent100%ofCanopy’sreportedresultsonatwo-monthlag,preparedinaccordancewithU.S.GAAP,andconvertedfromCanadiandollarstoU.S.dollars.Althoughweownlessthan100%oftheoutstandingsharesofCanopy,100%ofitsresultsareincludedintheinformationbelowandsubsequentlyeliminatedtoreconciletoourconsolidatedfinancialstatements.



Wereportnetsalesintworeportablesegments,asCanopyiseliminatedinconsolidation,asfollows:

FortheYearsEnded

February28,2022

February28,2021

(inmillions)

Beer $ 6,751.6 $ 6,074.6

WineandSpirits:

Wine 1,819.3 2,208.4

Spirits 249.8 331.9

TotalWineandSpirits 2,069.1 2,540.3

Canopy 444.3 378.6

ConsolidationandEliminations (444.3) (378.6)

ConsolidatedNetSales $ 8,820.7 $ 8,614.9

Fiscal2022ConsolidatedNetSales

Beer:76.6%

Wine:20.6%

Spirits:2.8%

Fiscal2021ConsolidatedNetSales

Beer:70.5%

Wine:25.6%

Spirits:3.9%

BeersegmentWearethe#1brewerandsellerofimportedbeerintheU.S.market.Wearealsotheleaderinthehigh-

endsegmentoftheU.S.beermarket,whichincludestheimported,craft,andABAcategories.Wehavetheexclusiverighttoimport,market,andsellthefollowingMexicanbrandsinall50statesoftheU.S.:

CoronaBrandFamily ModeloBrandFamily OtherImportBrands

CoronaExtra CoronaLight ModeloEspecial Pacifico

CoronaPremier CoronaRefresca ModeloNegra Victoria

CoronaFamiliar CoronaHardSeltzer ModeloChelada

Wehavenineofthe15top-sellingimportedbeerbrandsintheU.S.ModeloEspecialisthebest-sellingimportedbeer,secondbest-sellingbeeroverall,andthefastest-growingmajorimportedbeerbrandintheU.S.CoronaExtraisthesecondlargestimportedbeerandfifthbest-sellingbeeroverallintheU.S.

InthepastnineyearswehaveincreasedourproductioncapacityinMexicobyfourfoldallowingustheopportunitytofurtherexpandourleadershippositioninthehigh-endsegmentoftheU.S.beermarket.Sincethe2013acquisitionoftheimportedbeerbusiness,wehaveinvestedover$5.6billionintheMexicoBeerProjects,withapproximately$800millionduringFiscal2022.InearlyFiscal2022,wecompletedpartofaplannedexpansionprojectattheObregonBrewery.Thisprojectincreasedourtotalproductioncapacitytoapproximately39millionhectoliters,whichcontributedtosatisfyingourmedium-termcapacityneeds.Weexpecttospendan



additional$5.0billionto$5.5billionoverFiscal2023throughFiscal2026,withthemajorityofspendexpectedtooccurinthefirstthreefiscalyearsofthattimeframe.Expansion,optimization,and/orconstructionactivitiescontinueunderourMexicoBeerProjectstosupportexpectedfuturebusinessneeds.ForfurtherinformationaboutourMexicoBeerProjects,referto(i)“Production”below,(ii)MD&A,and(iii)Note7.

Wearealsobuildingonthesuccessofourleadingimportbrandfamiliesthroughourinnovationstrategy.OurModeloCheladabrandshavebecomeanimportantgrowthcontributortoourportfolioastheleadingcheladaintheU.S.beermarket.WecontinuedtobuildonthissuccessfulinnovationplatforminFiscal2022withanewentrant,ModeloCheladaPiñaPicante,whichwaslaunchedinAugust2021andisalreadyatopsharegaineramongimportedbrands.Tocapitalizeontherobustgrowthofthehigh-endABAcategorywelaunchedCoronaRefrescainFiscal2020andCoronaHardSeltzerinFiscal2021.InFiscal2022,weexpandedCoronaHardSeltzerintonewflavorsandrestagedourvarietypackswithconsumer-preferredthematicofferingsandenhancedflavorprofiles.Additionally,wearecontinuingeffortsfocusedonincreasingdistributionofproductsincan,draft,single-serve,andlargerpackagesizeformats.

InDecember2021,weenteredintoabrandauthorizationagreementwithCoca-ColaintheU.S.toextenditsFRESCA®brandintothebeveragealcoholcategoryfortheanticipatedlaunchofRTDvodkaspritzandtequilapalomacocktailsinFiscal2023.WeintendtoincludethenetsalesandoperatingresultsoftheseproductsinourBeersegment.

WineandSpiritssegmentWearealeading,higher-endwineandspiritscompanyintheU.S.market,withaportfoliothatincludes

higher-margin,higher-growthwineandspiritsbrands.Ourwineportfolioissupportedbygrapespurchasedfromindependentgrowers,primarilyintheU.S.andNewZealand,andvineyardholdingsintheU.S.,NewZealand,andItaly.OurwineandspiritsareprimarilymarketedintheU.S.andexportedtoCanadaandothermajorworldmarkets.

IntheU.S.,wehavenineofthe100top-sellinghigh-endwinebrands,withMeiomiandKimCrawfordachievingthefifthandeighthspots,respectively.Someofourwell-knownwineandspiritsbrandsandportfolioofbrandsinclude:

WineBrands WinePortfolioofBrands SpiritsBrands

7Moons Meiomi CharlesSmith CasaNoble MiCAMPO

Cook’sCaliforniaChampagne MountVeeder MyFavoriteNeighbor Copper&Kings Nelson’sGreenBrier

Cooper&Thief Ruffino RobertMondaviWinery HighWest SVEDKA

CraftersUnion SIMI Schrader

KimCrawford TheDreamingTree ThePrisonerWineCompany

InFiscal2022,ourfinewineandcraftspiritsbrandsdeliveredsolidgrowth,drivenprimarilybyThePrisonerWineCompanybrandsandHighWest,aswellasstronggainsinourDTC,3-tiereCommercechannels,



hospitality,andinternationalbusinesses.Thefocusforourmainstreamandpremiumbrandsisonmaintainingmarketshare,whilecontinuingtodelivergrowththroughpremiumwinebrands,suchasMeiomiandKimCrawford,consistentwithourconsumer-ledpremiumizationstrategy.

Overthelastfewyears,wehavebeenincreasingourinvestmentinsupportofon-trendproductinnovationaswebelievethisisoneofthekeydriversofoverallbeveragealcoholcategorygrowth.Wehavelaunchedseveralinnovationsthatarecreatingmomentumanddrivinggrowthforthebusiness,includingvarietallineextensions,suchasThePrisonercabernetsauvignonandchardonnayvarietals,Woodbridgespiritsbarrelagedvarietals,Meiomicabernetsauvignon,andSVEDKAandHighWestpre-mixedcocktailsintheRTDspace.Additionally,werecentlyextendedsomeofourwell-knownbrandsthroughbettermentlines,suchasKimCrawfordIlluminate,andnewpackageformats,suchasWoodbridge3-literbox.

CorporateOperationsandOthersegmentTheCorporateOperationsandOthersegmentincludestraditionalcorporate-relateditemsincludingcosts

ofexecutivemanagement,corporatedevelopment,corporatefinance,corporategrowthandstrategy,humanresources,internalaudit,investorrelations,legal,publicrelations,andinformationtechnology,aswellasourinvestmentsmadethroughourcorporateventurecapitalfunction.

CanopysegmentTheCanopyEquityMethodInvestmentmakesuptheCanopysegment.

Forfurtherinformationregardingnetsalesandoperatingincome(loss)ofourbusinesssegmentsandgeographicareasseeNote22.

Marketinganddistribution

Tofocusontheirrespectiveproductcategories,buildbrandequity,andincreasesales,weemployfull-time,in-housemarketing,sales,andcustomerservicefunctionsforourBeerandWineandSpiritssegments.Thesefunctionsengageinarangeofmarketingactivitiesandstrategies,includingmarketresearch,consumerandtradeadvertising,pricepromotions,point-of-salematerials,eventsponsorship,on-premisepromotions,andpublicrelations.Whereopportunitiesexist,particularlywithnationalaccountsintheU.S.,weleverageoursalesandmarketingskillsacrosstheorganization.

IntheU.S.,ourproductsareprimarilydistributedbywholesaledistributors,whichgenerallyhaveseparatedistributionnetworksfor(i)ourbeerportfolioand(ii)ourwineandspiritsportfolio.Inaddition,instateswherethegovernmentactsasthedistributor,wedistributeourproductsthroughstatealcoholbeveragecontrolagencies,whichsettheretailpricesofourproducts.Asisthecasewithallotherbeveragealcoholcompanies,productssoldthroughtheseagenciesaresubjecttoobtainingandmaintaininglistingstosellourproductsinthatagency’sstate.Stategovernmentscanalsoaffectpricespaidbyconsumersforourproductsthroughtheimpositionoftaxes.

Trademarksanddistributionagreements

Trademarksareanimportantaspectofourbusiness.Wesellproductsunderanumberoftrademarks,whichweownoruseunderlicense.Wealsohavevariouslicensesanddistributionagreementsforthesale,ortheproductionandsale,ofourproducts,andproductsofothers.Theselicensesanddistributionagreementshavevaryingtermsanddurations.

WithintheBeersegment,wehaveanexclusivesub-licensetousetrademarksrelatedtoourMexicanbeerbrandsintheU.S.Thissub-licenseagreementisperpetual.



Competition

Thebeveragealcoholindustryishighlycompetitive.Wecompeteonthebasisofquality,price,brandrecognitionandreputation,anddistributionstrength.Ourbeveragealcoholproductscompetewithotheralcoholicandnon-alcoholicbeveragesforconsumerpurchases,aswellasshelfspaceinretailstores,restaurantpresence,andwholesalerattention.Wecompetewithnumerousmultinationalproducersanddistributorsofbeveragealcoholproducts,someofwhichhavegreaterresourcesthanwedo.Ourprincipalcompetitorsinclude:

Beer Anheuser-BuschInBev,TheBostonBeerCompany,Heineken,MarkAnthony,MolsonCoors

Wine DeutschFamilyWine&Spirits,DuckhornPortfolio,E.&J.GalloWinery,Ste.MichelleWineEstates,TreasuryWineEstates,TrincheroFamilyEstates,TheWineGroup

Spirits BacardiUSA,BeamSuntory,Brown-Forman,Diageo,FifthGeneration,PernodRicard,SazeracCompany

Canopyoperatesintherecreationalandmedicinalcannabismarketsand,intheirlargestmarket,theycompetewithnumerouslicensedproducersanddistributorsofcannabisproducts.Intherecreationalmarket,Canopycompetesonthebasisofquality,price,brandrecognition,consistency,andvarietyofcannabisproductswhereasthesesamecompetitivefactorsapplyinthemedicinalmarketaswellasphysicianfamiliarity.

Production

AsofFebruary28,2022,ourproductioncapacityatourMexicanbrewerieswasapproximately39millionhectoliters.BytheendofFiscal2026,weexpecttoincreaseourcapacityinMexicotoapproximately64to69millionhectoliterstosupportthegrowthofourMexicanbeerbrands.ThisincludestheplannedconstructionoftheSoutheastMexicoBrewerywherethereisamplewaterandwewillhaveaskilledworkforcetomeetourlong-termneeds,aswellascontinuedexpansion,optimization,and/orconstructionatourcurrentbrewerylocationsinNavaandObregon.Forfurtherinformationontheseexpansion,optimization,and/orconstructionactivities,referto(i)MD&Aand(ii)Note7.WearecontinuingtoworkwithgovernmentofficialsinMexicotodeterminenextstepsforoursuspendedMexicaliBreweryconstructionproject.

OurDalevillefacility,locatedinRoanoke,Virginia,supportsourcraftandspecialtybusinessinadditiontoourdomesticinnovationinitiatives.InFiscal2023,weexpecttoproduceFRESCATMMixedRTDcocktailsusingrealspiritsatthisfacility.

IntheU.S.,weoperate12wineriesusingmanyvarietiesofgrapesgrownprincipallyintheNapa,Sonoma,Monterey,andSanJoaquinregionsofCalifornia.WealsooperatetwowineriesinNewZealandandsixwineriesinItaly.GrapesarecrushedinAugustthroughNovemberintheU.S.andItaly,andinFebruarythroughMayinNewZealandandstoredaswineuntilpackagedforsaleunderourbrandnamesorsoldinbulk.Theinventoriesofwineareusuallyattheirhighestlevelsduringandafterthecrushofeachyear’sgrapeharvestandarereducedassoldthroughouttheyear.InFiscal2023,weacquiredanadditionalU.S.wineryinOregon.Forfurtherinformationonthisacquisition,referto(i)“Overview”withinMD&Aand(ii)Note2.

WecurrentlyoperatefourdistilleriesintheU.S.fortheproductionofourspirits;twofacilitiesforHighWestwhiskey,onefacilityforCopper&KingsAmericanbrandies,andonefacilityforNelson’sGreenBrierbourbonandwhiskeyproducts.Therequirementsforgrainsandbulkspiritsusedintheproductionofourspiritsarepurchasedfromvarioussuppliers.

Certainofourwinesandspiritsmustbeagedformultipleyears.Therefore,ourinventoriesofwinesandspiritsmaybelargerinrelationtosalesandtotalassetsthaninmanyotherbusinesses.



Resourcesandavailabilityofproductionmaterials

TheprincipalcomponentsintheproductionofourMexicanandcraftbeerbrandsincludewater;agriculturalproducts,suchasyeastandgrains;andpackagingmaterials,whichincludeglass,aluminum,andcardboard.

ForourMexicanbeerbrands,packagingmaterialsarethelargestcostcomponentofproduction,withglassbottlesrepresentingthelargestcostcomponentofourpackagingmaterials.

ForFiscal2022,thepackageformatmixofourMexicanbeervolumesoldintheU.S.wasasfollows:

Glassbottles:63%

Aluminumcans:34%

Steelkegs:3%

Aspartofoureffortstosolidifyourbeerglasssourcingstrategyoverthelong-term,weformedanequally-ownedjointventurewithOwens-Illinois,oneoftheleadingmanufacturersofglasscontainersintheworld.Thejointventureownsastate-of-the-artGlassPlantadjacenttoourNavaBreweryinMexico.TheGlassPlantcurrentlyhasfiveoperationalglassfurnaceswhichsupplynearly60%ofthetotalannualglassbottlesupplyforourMexicanbeerbrands.Wealsohavelong-termglasssupplyagreementswithotherglassproducers.

TheNavaandObregonbreweriesreceivewateroriginatingfromaquifers.Webelievewehaveadequateaccesstowatertosupportthebreweries’ongoingrequirements,aswellasfuturerequirementsafterthecompletionofplannedexpansion,optimization,and/orconstructionactivities.Bothbreweriesemploycomprehensivewatermanagementpracticesthatfocusonwaterefficiencyandwastewatertreatmentoperationstoreusewaterconsumedaspartoftheproductionprocess.

Theprincipalcomponentsintheproductionofourwineandspiritsproductsareagriculturalproducts,suchasgrapesandgrain,andpackagingmaterials,primarilyglass.

Mostofourannualgraperequirementsaresatisfiedbygrowerpurchasesfromeachyear’sharvestwhichnormallybeginsinAugustandrunsthroughNovemberintheU.S.andItaly,andbeginsinFebruaryandrunsthroughMayinNewZealand.Wereceivegrapesfromapproximately150independentgrowerslocatedintheU.S.and55independentgrowersinNewZealandandItaly.Weenterintopurchaseagreementswithamajorityofthesegrowerswithpricingthatgenerallyvariesyear-to-yearandislargelybasedonthen-currentmarketprices.

AsofFebruary28,2022,weownedorleasedapproximately17,800acresoflandandvineyards,eitherfullybearingorunderdevelopment,intheU.S.,NewZealand,andItaly.Thisacreagesuppliesonlyasmallpercentageofouroveralltotalgrapeneedsforwineproduction.However,mostofthisacreageisusedtosupplyalargeportionofthegrapesusedfortheproductionofcertainofourhigher-endwines.Wecontinuetoconsiderthepurchaseorleaseofadditionalvineyards,andadditionallandforvineyardplantings,tosupplementourgrapesupply.

Webelievethatwehaveadequatesourcesofgrapesuppliestomeetoursalesexpectations.However,whendemandforcertainwineproductsexceedsexpectations,welooktosourcetheextrarequirementsfromthebulkwinemarketsaroundtheworld.

Thedistilledspiritsmanufacturedandimportedbyusrequirevariousagriculturalproducts,neutralgrainspirits,andbulkspirits,whichwefulfillthroughpurchasesfromvarioussourcesbycontractualarrangementandthroughpurchasesontheopenmarket.Webelievethatadequatesuppliesoftheaforementionedproductsareavailableatthepresenttime.

Weutilizeglassandpolyethyleneterephthalatebottlesandothermaterialssuchascaps,corks,capsules,labels,winebags,andcardboardcartonsinthebottlingandpackagingofourwineandspiritsproducts.Aftergrapepurchases,glassbottlesarethelargestcomponentofourcostofproductsold.IntheU.S.,theglassbottleindustryishighlyconcentratedwithonlyasmallnumberofproducers.Wehavetraditionallyobtained,and



continuetoobtain,ourglassrequirementsfromalimitednumberofproducersunderlong-termsupplyarrangements.Currently,oneproducersuppliesmostofourglasscontainerrequirementsforourU.S.operations.Wehavebeenabletosatisfyourrequirementswithrespecttotheforegoingandconsideroursourcesofsupplytobeadequateatthistime.

Governmentregulations

Wearesubjecttoarangeoflawsandregulationsinthecountriesinwhichweoperate.Whereweproduceproducts,wearesubjecttoenvironmentallawsandregulations,andmayberequiredtoobtainenvironmentalandalcoholbeveragepermitsandlicensestooperateourfacilities.Wherewemarketandsellproducts,wemaybesubjecttolawsandregulationsonbrandregistration,packagingandlabeling,distributionmethodsandrelationships,pricingandpricechanges,salespromotions,advertising,andpublicrelations.Wearealsosubjecttorulesandregulationsrelatingtochangesinofficersordirectors,ownership,orcontrol.

Webelieveweareincomplianceinallmaterialrespectswithallapplicablegovernmentallawsandregulationsinthecountriesinwhichweoperate.Wealsobelievethatthecostofadministrationandcompliancewith,andliabilityunder,suchlawsandregulationsdoesnothave,andisnotexpectedtohave,amaterialadverseimpactonourfinancialcondition,resultsofoperations,orcashflows.

Aspartofourbreweryexpansioneffortsandcommitmenttomakingapositiveimpactonthecommunitieswhereweoperate,weplantocontinueworkingwithlocalauthoritiesandcommunity-basedorganizationsonsustainabilityinitiativesthatbenefitlocalresidents.Criticallocalprojectshavebeenidentifiedthroughcommunitycollaborationandinputandguidancefromthird-partywaterrestorationorganizations.Forexample,toimprovewaterqualityintheNavaarea,wehavepartneredwithPronaturaNoreste,investingina10-yearprojectthatweexpectwillhelprestoretheBravoConchosbasinintheSerraníadelBurro.InObregon,wehaveworkedwithlocalorganizationstoconstructthreedamsalongtheYaquiValleycanalthathelpimprovewatermanagementefficiency,recoveringvolumesofwaterthatplayavitalroleinthesustainabilityoftheregion.Thisisinadditiontootherbenefitsweprovide,includinglocaljobcreationandfuelingeconomicdevelopment.WeplantoworkwithlocalauthoritiesinareasneartheSoutheastMexicoBreweryonsimilarinitiatives.

Seasonality

Thebeveragealcoholindustryissubjecttoseasonalityineachmajorcategory.Asaresult,inresponsetowholesalerandretailerdemandwhichprecedesconsumerpurchases,ourbeersalesaretypicallyhighestduringthefirstandsecondquartersofourfiscalyear,whichcorrespondtotheSpringandSummerperiodsintheU.S.Ourwineandspiritssalesaretypicallyhighestduringthethirdquarterofourfiscalyear,primarilyduetoseasonalholidaybuying.

ForFiscal2021,ourbeernetsaleswerehigherinthesecondandthirdquartersasinventorylevelsinourdistributionchannelswerereplenishedfollowingaCOVID-19relatedproductionslowdownatourmajorbreweriesinMexicoearlierintheyear.

ESG

Duringthecourseofourhistory,wehavebeencommittedtosafeguardingourenvironment,makingapositivedifferenceinourcommunities,andadvocatingforresponsibleconsumptionofbeveragealcoholproducts.OurESGstrategyisalignedwithourbusinessgoalsandstakeholderinterests,reflectsourCompanyvalues,andmoredirectlyaddressespressingsocietalneeds.Specifically,wededicateourresourcestowards:

Servingasgoodstewardsofourenvironmentandnaturalresources–Modelingwaterstewardshipforourindustry;andreducingGHGemissionsthroughenergyconservationandrenewableenergyinitiativesEnhancingsocialequitywithinourindustryandcommunities–Championingtheprofessionaldevelopmentandadvancementofwomeninbeveragealcoholandourcommunities;andenhancingeconomicdevelopmentandprosperityindisadvantagedcommunities



Promotingresponsiblebeveragealcoholconsumption–Empoweringadultstomakeresponsiblechoicesintheiralcohol(substance)consumptionbysupportingfact-basededucation,engagementprograms,andpolicies

DuringFiscal2022wetookthefollowingstepstoadvanceourESGstrategybykeyarea:

Servingasgoodstewardsofourenvironmentandnaturalresources• developedatargettorestoreapproximately1.1billiongallonsofwaterwithdrawalsfromcritical

watershedsandimprovewateraccessibilityindisadvantagedcommunitieswhereweoperatebetweentheperiodsFiscal2023toFiscal2025

• developedatargettoreduceScope1(direct)andScope2(indirect)GHGemissionsby15%betweentheperiodsFiscal2020toFiscal2025

• revisedtheBoardofDirectors’CorporateGovernanceandResponsibilityCommitteeChartertoincludeoversightofenvironmental,sustainability,andsocialresponsibilityprogramsandgoals

• completedanassessmenttoidentifyandprioritizeESGissuesthataremostimportanttoourwineandspiritsbusiness

• donated$200,000toTheNatureConservancy’sResilientWatershedProject

Enhancingsocialequitywithinourindustryandcommunities• fiveofoureightFocusonFemaleFounderandFocusOnMinorityFounderparticipantsgrewaheadof

theirrespectivecategories.Oursharedsalesteamhelpeddrivegrowthbetweenapproximately160%to420%inkeymarketsforAustinCocktails,DurhamDistillery,LaFêteduRosé,andCatoctinCreek

• ourAASCENDBRGandCSRteamcreatedthe2022MartinLutherKingJr./BlackHistoryMonthFundallowingemployeestheopportunitytolendtheirsupportbycontributingtocommunityorganizationsthatfocusonsocialequity.EmployeeandcompanymatcheddonationswenttotheEqualJusticeInitiative,FacingHistoryandOurselves,andtheSouthernPovertyLawCenter

• ourcompanysupportofDressforSuccessWorldwide,anorganizationwhosemissionistoempowerwomentoachieveeconomicindependence,helpedmorethan1.2millionwomenworldwide(80,000intheU.S.)worktowardsself-sufficiency.Directdollarstoaffiliatesinourmajorofficelocationshelpedmorethan3,500womenworktowardjobplacementandcareeradvancementgoals

• madea$1.75millionmulti-yearcommitmenttotheNationalRestaurantAssociationEducationFoundation's“RestaurantsAdvance”campaigninsupportofrebuildingtheindustryworkforce

• contributed$500,000toUnidosUStostrengthenHispanicfamilies’financialsecuritythroughfinancialempowermentandhomeownershipprograms

Promotingresponsiblebeveragealcoholconsumption• madeaminorityinvestmentinHopWTR,anadaptogenandnootropics-basednon-alcoholicproduct

line• implementedasix-weekwellnesschallengethatprovidedanopportunityforemployeestolearnmore

aboutconsciousconsumptionandhowourportfolioofbrandsplaysacriticalrole• promotedconsciousconsumptionthroughoutourcompanysocialmediaplatformsduringculturally

relevantmomentsandholidayssuchasNewYear’sEveandtheSuperBowl

ForfurtherinformationaboutourESGadvancementsreferto(i)“Humancapitalresources”belowand(ii)“Capitalresources”withinMD&A.



Humancapitalresources

AsofMarch31,2022,wehadapproximately10,000employees,includingapproximately1,200employeesthroughourequally-ownedjointventurewithOwens-Illinois.Thenumberofemployeesmaychangethroughouttheyear,asweemployadditionalworkersduringthegrapecrushingseasons.Approximately20%oftheemployeesarecoveredbycollectivebargainingagreements.Collectivebargainingagreementsexpiringwithinoneyearareminimal.Weconsiderouremployeerelationsgenerallytobegood.

Employeegeographicdataisasfollows:

U.S.39%

Mexico55%

OtherNon-U.S.6%

COVID-19responseWehaveanexistingCrisisManagementCommitteethat,sinceJanuary2020,hasbeencloselymonitoring

theimpactofthevirusthatcausesCOVID-19onourbusinessandourworkforce.InMarch2020,theWHOrecognizedCOVID-19asapandemic.Inresponse,weimplementedvariousmeasurestoreducethespreadofthevirusincludingworkingfromhome,restrictingvisitorstoourproductionlocations,splittingourproductionworkforces,reducingtheon-siteproductionworkforcelevels,screeningworkersbeforetheyenterfacilities,enforcingsocialdistancing,andencouragingemployeestoadheretopreventionmeasuresrecommendedbytheCDCandtheWHO.ToincentivizeU.S.employeestoreceiveCOVID-19vaccines,weprovidedaone-timeemployeeprotectionbonustoallfull-timeandpart-timeU.S.employeeswhosubmittedproofofbeingfullyvaccinatedorhadapprovedexemptions.InMexico,COVID-19vaccineswerenotasreadilyavailableasintheU.S.Wecreatedprogramstofacilitateaccessthroughfree,voluntaryon-siteclinicsandlocalvaccinationsitesforouremployees,includingthoseattheGlassPlant,theirfamilies,aswellasforotherlocalNavaandObregonbusinesses.Theseeffortscontributedtoachievinganemployeevaccinationrateofmorethan98%atourNavaandObregonbreweries.Additionally,ourChiefMedicalOfficerprovidesongoinghealth-relatedadviceandexpertisetoourexecutiveofficers,CrisisManagementCommittee,andhumanresourcesleadershipteamsastheymakedecisionsdesignedtoprotectthehealthandsafetyofourworkforce.Thepreventativemeasureswehaveimplementedmaybemodifiedand/ordiscontinuedasgovernmentagenciesissuenewguidance,includingduetofluctuationsinCOVID-19caselevels.

Wevaluethecontributionsofourworkforceandconsideredtheimpactsthepandemicwouldhaveontheirwell-being.Forourproductionworkforce,whereemployeeswerenotabletoworkduetotemporaryfacilityclosuresorillness,weprotectedtheirpaytoensuretheyhadacontinuedpaycheck.Forourhospitalityemployees,werecognizedamaterialportionoftheirpaycomesfromcustomergratuitiesandwepaidtheseemployeesanequivalentvalueduringthenecessarytimeaway.Ournon-productionworkforceisabletoworkremotelyusingvarioustechnologytools.Aspartoftheremoteofficeapproach,weprovidereimbursementforhomeofficesupportensuringouremployeeshavetheresourcesneededtobeeffective.WehaveaformalCOVID-19policyandoffervariousprogramstoassistouremployees,includingengagingwiththird-partywellnessproviderstohostdedicatedsessionsonmentalandphysicalwell-being,andincreasedflexibilityandresourcessurroundingpersonalandfamilycommitments.

Diversity,equity,andinclusionOurDEIstrategicprioritiesareasfollows:

Cultivateabest-in-class,diverse,andequitableworkforce–onethatreflectstheuniverseofconsumersthatexistandthecommunitiesinwhichweliveandserveFosterawinninginclusiveculture–createamoreequitableexperienceforunderrepresentedgroups;harnessthebenefitsofdiversityandinclusivityEnhancesocialequity–extendourinfluencetoenhancesocialequitywithinthebeveragealcoholindustryandcommunitiesinwhichweliveandserve



WeprovideopportunitiesforouremployeestoadvanceourDEIstrategicprioritiesthroughagrowingcommunityofBRGs.OurBRGsaresupportedatthehighestlevelwithsponsorshipsfromourexecutives.See“InformationaboutourExecutiveOfficers”below.EachBRGistaskedwithmakingabusinessimpactonbehalfoftherepresentedgroupandwelcomesallies.InFiscal2022,approximately60%ofourU.S.salariedemployeesweremembersofoneormoreBRG.

MonitoringhumancapitalmetricsisakeycomponenttoensuringweareexecutingonourstrategyandmakingprogressagainstourDEIobjectivesandgoals.InFiscal2022,werevisedourBoardofDirectors’HumanResourceCommitteeChartertospeciallyaddressoversightofemployeeDEImatters.Wemeasuregenderandethnicrepresentationtounderstanddiversityatvariouslevelsacrosstheorganization,assessprogressovertime,anddrivecontinuousimprovement.WehaveestablishedgoalstoenhancebothgenderrepresentationandoverallethnicdiversityamongourU.S.salariedpopulationto50%and30%,respectively,byFiscal2026.Ourself-disclosed,U.S.salariedemployeeinformationisasfollows:

FemaleRepresentation

42% 43%

50% 50%

Fiscal2021

Fiscal2022

EthnicDiversity

20% 22%

30% 30%

Fiscal2021

Fiscal2022

Additionally,inFiscal2022,welaunchedaDEIgrowthdashboardforourU.S.salariedemployeebase,centeredaroundidentifyingandaddressingworkforcediversityrepresentationopportunities,utilizing2020U.S.Censusdataasabenchmark.ThisdashboardissharedwithourexecutivesandwithcertaincommitteesoftheBoardofDirectorsonaquarterlybasisenablingthemtomonitortheprogressmadeandtoprovideguidanceonnecessarynextstepstoattainourrepresentationgoals.Wealsoassessmetricsthroughoutthehumanresourcelifecycletoidentifypotentialbiasandbarriersinourprocesses,includingtalentacquisition,turnover,engagementscores,orparticipationinBRGevents.

CompensationandbenefitsWestrivetoprovidepay,benefits,andservicesthatmeettheneedsofouremployees.Therearefour

componentsofcompensation:(i)basepay,(ii)long-termincentivesdependentonanumberoffactorssuchasgeographiclocationandmanagementlevelwhichcanincluderestrictedstockunits,stockoptions,andperformanceshareunits,(iii)short-termincentives,and(iv)recognitionawards.Basecompensationisreviewedonanannualbasisensuringitiscompetitiveinthemarketandgivesemployeesopportunitiestoearnmoreforexceedingexpectations.Ourtotalrewardsprogramalsooffersvaluablebenefits,tools,andresourcesdesignedtohelpemployeesstayhealthyandwell,whileachievingsecurity,growth,satisfaction,andsuccess.

ProfessionaldevelopmentBuildingdiversetalentpipelines,deliveringbest-in-classpeopledevelopment,andchampioning

professionaladvancementarekeycomponentsofourhumancapitalstrategywhichisdesignedtopositionourbusinessforlong-termgrowth.InFiscal2022,wespentapproximately$17millionindevelopmentandtrainingcosts,includingthedeliveryoffourleadershipdevelopmentprogramsandthreewomen’sfocuseddevelopmentprogramsthroughtheUniversityofConstellationBrands,ourlearninganddevelopmentcenter.Wearecommittedtoofferingprograms,resources,andexperiencesthatempoweremployeestogrowtheircareersandkeepreachingforwhat’snext,bothpersonallyandprofessionally.

SuccessionplanningWehaveacomprehensivesuccessionplanningprocess,ledbyourhumanresourcesteamandoverseen

bytheHumanResourcesCommitteeofourBoard.InadditiontotheHumanResourcesCommittee’senhancedfocusonexecutive,seniorleader,andhigh-potentialemployeesuccession,ourfullBoardisalsoinvolvedinChiefExecutiveOfficersuccessionplanningandsuccessionandpeopledevelopmentforthebroaderemployeepopulation.Aspartofthesuccessionplanningprocess,wereviewanddiscusspotentialsuccessorstokeyrolesandexaminebackgrounds,capabilities,andappropriatedevelopmentalopportunities.



EmployeeengagementWeassessemployeeengagementthroughtargetedpulsesurveys,whichprovidefeedbackonavarietyof

topics,suchascompanydirectionandstrategy,resources,support,workenvironmentpreferences,andwell-being.Duringcalendaryear2021,wehadaresponserateof76%tooursurveyandanengagementmeasurementof86%acrossoursurveyedpopulation.

SafetyWearecommittedtoensuringthesafetyofouremployees.OurglobalEHSpolicydefinesourdedication

toprovidingasafeandhealthyworkingenvironmentanddevelopingaculturewhereallemployeestakeresponsibilityfortheirownsafetyaswellasthesafetyofotherswhileminimizingourimpactontheenvironmentinthecommunitieswhereweliveandwork.WithafocusoncontinuousimprovementwearedevelopingmorerobustEHSmanagementsystems,strengtheningemployeeawarenessandtraining,andensuringseniorleadershipengagementonsafety.Work-relatedinjuriesresultingfromtheproductionofourbeer,wine,andspiritsproductsarewellbelowindustryaverage.Ourrecordableincidentrateascomparedtotheindustryaverageareasfollows:

FortheYearsEnded

February28,2022

February28,2021

PercentChange

Recordableincidentrate(1) 0.79 0.95 (17%)

Industryaverage(2) 3.45 3.50

(1) DefinedastotalnumberofworldwideConstellationwork-relatedinjuries(casesbeyondfirstaid)per100full-timeemployees.

(2) Calculatedbytakingtheweightedaverageofthemostrecent(2020)U.S.BureauofLaborStatisticsdataforwineries,breweries,anddistilleriesbasedonourportfoliomixonFebruary2022andFebruary2021fortheyearsendedFebruary28,2022,andFebruary28,2021,respectively.

EmpoweringouremployeestogivebackGivingbacktoourcommunitiesisavalue

instilledbyourfounder,MarvinSands,andremainscoretoourcompany’sDNA.Weempowerouremployeestoengageinthecommunitieswheretheyliveandworkinavarietyofways,includingvolunteeringtimeandthroughacharitablematchingprogramavailabletoallU.S.employees.

Wematchdonationsrangingfromamaximumof$5,000to$50,000peryear,dependingonmanagementlevel,tocharitableorganizations.

$5.8millionFiscal2022corporatecharitablecontributions,

includingcompanymatchofemployeedonations



InformationaboutourExecutiveOfficers

ExecutiveofficersoftheCompanyaregenerallychosenorelectedtotheirpositionsannuallyandholdofficeuntiltheearlieroftheirremovalorresignationoruntiltheirsuccessorsarechosenandqualified.InformationwithrespecttoourexecutiveofficersasofApril21,2022,isasfollows:

WilliamA.Newlands,age63,isthePresidentandChiefExecutiveOfficeroftheCompany.HehasservedasChiefExecutiveOfficeroftheCompanyandasadirectorsinceMarch2019andasPresidentsinceFebruary2018.HeservedasChiefOperatingOfficerfromJanuary2017throughFebruary2019andasExecutiveVicePresidentoftheCompanyfromJanuary2015untilFebruary2018.FromJanuary2016toJanuary2017heperformedtheroleofPresident,Wine&SpiritsDivisionandfromJanuary2015throughJanuary2016heperformedtheroleofChiefGrowthOfficer.Mr.NewlandsjoinedtheCompanyinJanuary2015.PriortothatheservedfromOctober2011untilAugust2014asSeniorVicePresidentandPresident,NorthAmericaof

BeamInc.,asSeniorVicePresidentandPresident,NorthAmericaofBeamGlobalSpirits&Wine,Inc.fromDecember2010toOctober2011,andasSeniorVicePresidentandPresident,USAofBeamGlobalSpirits&Wine,Inc.fromFebruary2008toDecember2010.BeamInc.,aproducerandsellerofbrandeddistilledspiritsproducts,mergedwithasubsidiaryofSuntoryHoldingLimited,aJapanesecompany,in2014.PriortoOctober2011,BeamGlobalSpirits&Wine,Inc.wasthespiritsoperatingsegmentofFortuneBrands,Inc.,whichwasaleadingconsumerproductscompanythatmadeandsoldbrandedconsumerproductsworldwideinthedistilledspirits,homeandsecurity,andgolfmarkets.

RobertSands,age63,istheExecutiveChairmanoftheBoardoftheCompany,havingservedintherolesinceMarch2019andasadirectorsinceJanuary1990.Previously,heservedasChiefExecutiveOfficeroftheCompanyfromJuly2007throughFebruary2019.Mr.SandsalsoservedasPresidentoftheCompanyfromDecember2002toFebruary2018,asChiefOperatingOfficerfromDecember2002toJuly2007,asGroupPresidentfromApril2000throughDecember2002,asChiefExecutiveOfficer,InternationalfromDecember1998throughApril2000,asExecutiveVicePresidentfromOctober1993throughApril2000,asGeneralCounselfromJune1986throughMay2000,andasVicePresidentfromJune1990throughOctober1993.HeisthebrotherofRichardSands.

RichardSands,Ph.D.,age71,istheExecutiveViceChairmanoftheBoardoftheCompany,havingservedintherolesinceMarch2019.HepreviouslyservedasChairmanoftheBoardoftheCompanyfromSeptember1999throughFebruary2019.HehasbeenemployedbytheCompanyinvariouscapacitiessince1979.Hehasservedasadirectorsince1982.HeservedasChiefExecutiveOfficerfromOctober1993toJuly2007,asPresidentfromMay1986toDecember2002,asChiefOperatingOfficerfromMay1986toOctober1993,andasExecutiveVicePresidentfrom1982toMay1986.HeisthebrotherofRobertSands.

JamesO.Bourdeau,age57,istheExecutiveVicePresidentandChiefLegalOfficeroftheCompany,havingservedintherolesinceDecember2017andastheCompany’sSecretarysinceApril2017.Priortothat,heservedastheCompany’sSeniorVicePresidentandGeneralCounsel,CorporateDevelopment,havingperformedthatrolefromSeptember2014untilDecember2017.BeforejoiningtheCompanyinSeptember2014,Mr.BourdeauwasanattorneywiththelawfirmofNixonPeabodyLLPfromJuly2000throughSeptember2014,andapartnerfromFebruary2005throughSeptember2014.Mr.Bourdeauwasassociatedwithanotherlawfirmfrom1995to2000.

BRGsponsorship-StellarPRIDEsupportingourLGBTQ+community



K.KristannCarey,age52,willbetheExecutiveVicePresidentandChiefHumanResourcesOfficeroftheCompany,effectiveMay9,2022.Ms.CareyhasservedastheCompany’sSeniorVicePresident,HumanResources,BeerDivisionsinceFebruary2019.FromJuly2018untilDecember2020,sheperformedtheroleofChiefDiversityOfficer.FromJuly2017untilJanuary2019,sheservedasChiefComplianceOfficerandfromNovember2015untilJanuary2019,sheservedasSeniorVicePresidentandGeneralCounsel,BeerDivision.FromJune2013untilNovember2015,sheservedasVicePresidentandAssociateGeneralCounsel,BeerDivision.BeforejoiningtheCompany,Ms.Careyservedinrolesofincreasingresponsibility

withMcDonald’sCorporationfromJanuary2005untilJune2013,mostrecentlyasSeniorCounsel.PriortojoiningMcDonald’sCorporation,sheworkedatthelawfirmsofSeyfarthShawLLPfromJanuary2003throughJanuary2005andCassiday,Schade&GloorLLPfromOctober1998untilJanuary2003.

BRGsponsorship-SupportingandAttractingLatinosUnitedforDiversityandDevelopment

GarthHankinson,age54,istheExecutiveVicePresidentandChiefFinancialOfficeroftheCompany,havingservedintherolesinceJanuary2020.Priortothat,heservedastheCompany’sSeniorVicePresident,CorporateDevelopment,apositionhehadbeeninsinceFebruary2016,wherehewasresponsibleforleadingalloftheCompany’sfinancialplanning,reporting,andanalysisactivities,aswellasalleffortsrelatedtomergers,acquisitions,venturesinvestments,andstrategicalliances.FromOctober2009untilFebruary2016,heservedastheVicePresident,CorporateDevelopmentoftheCompany.FromOctober2007untilOctober2009,Mr.HankinsonservedastheVicePresident,BusinessDevelopmentforConstellation’sprior

Canadianbusiness,ConstellationBrandsCanada,Inc.,whichwasaCanadiansubsidiaryoftheCompanyduringthattime.FromMarch2004untilOctober2007,heservedastheDirectorofCorporateDevelopment.

BRGsponsorship-VALORsupportingveterans,servicemembers,firstresponders,andtheirfamilies

RobertHanson,age59,istheExecutiveVicePresidentandPresident,Wine&SpiritsDivisionoftheCompany,havingservedintherolesinceJune2019.Priortothat,heservedasChiefExecutiveOfficerofJohnHardyGlobalLimited,aluxuryjewelrybrand,fromAugust2014toJune2019.HecontinuedtoserveasitsChairmanoftheBoarduntilJuly2020.HeservedasChiefExecutiveOfficerandaDirectorofAmericanEagleOutfitters,Inc.,aleadingglobalspecialtyretailerofclothing,accessories,andpersonalcareproductsfromJanuary2012toJanuary2014.HeservedLeviStrauss&Co.from1988to2011inavarietyofimportantleadershiprolesacrossmultiplebrandswhereheledcross-functionalteams,includingmerchandising,product

development,multi-channeloperations,marketingandcreativeteams,inadditiontoafullsupportstaff.Mr.Hanson’srolesatLevi’sincludedservingasGlobalPresidentoftheLevi’sBrandfrom2010to2011;President,Levi’sStraussAmericas/NorthAmericafrom2006to2010;President,Levi’sBrandU.S.from2001to2006;andPresident/VicePresident,Levi’sEurope/Africa/MiddleEastfrom1998to2001.

BRGsponsorship-Win.Inspire.Support.Elevate.supportingourfemalecommunity

ThomasM.Kane,age61,istheExecutiveVicePresidentandChiefHumanResourcesOfficeroftheCompany,havingservedintherolesincejoiningtheCompanyinMay2013throughhisretirementfromsuchrole,whichwillbeeffectiveMay9,2022.Mr.KanepreviouslyservedasSeniorVicePresident,HumanResourcesandGovernmentRelationsofArmstrongWorldIndustries,Inc.,aglobalproducerofflooringproductsandceilingsystems,fromFebruary2012toMay2013,heservedasitsSeniorVicePresident,HumanResourcesfromAugust2010toFebruary2012andservedasitsChiefComplianceOfficerfromFebruary2011toFebruary2012.Priortothat,Mr.KaneservedasGlobalVicePresident,HumanResourcesforBlack&Decker

PowerTools,amanufacturerofpowerandhandtools,from2002to2010.From1999to2002Mr.KaneservedasGlobalHRleaderofGESpecialtyMaterials,alargemanufacturerofsiliconeproducts.

BRGsponsorship-Win.Inspire.Support.Elevate.supportingourfemalecommunity



MichaelMcGrew,age48,hasbeenanExecutiveVicePresidentoftheCompanysinceApril2020.BeginningDecember2020,Mr.McGrewhasperformedtheroleofExecutiveVicePresident,andChiefCommunications,CSR,andDiversityOfficeroftheCompany.Mr.McGrewjoinedConstellationBrandsin2014asSeniorDirector,CommunicationsfortheCompany’sBeerDivision.HewaspromotedtoVicePresident,Communications–BeerDivisionin2016andassumedtheroleofVicePresident,CorporateCommunicationsin2017.PriortojoiningConstellationBrands,heheldanumberofroleswithincreasingresponsibilityatGrainger,thena$9billionglobalproviderofindustrialsuppliesandequipment.WhileatGrainger,from2011to

2013Mr.McGrewservedasDirector,U.S.BusinessCommunications,fromJanuary2013toOctober2013heservedasSeniorDirector,U.S.Business&GlobalSupplyChainCommunicationsandfromOctober2013toSeptember2014heservedasSeniorDirector,Communications–Americas,amongotherrolesofincreasingresponsibility.

MallikaMonteiro,age43,hasbeenanExecutiveVicePresidentoftheCompanysinceOctober2019.BeginningMarch2021,Ms.MonteirohasperformedtheroleofExecutiveVicePresident,andChiefGrowth,Strategy,andDigitalOfficer.FromOctober2019toFebruary2021sheperformedtheroleofExecutiveVicePresident,ChiefGrowthandStrategyOfficerandfromOctober2018toSeptember2019,sheperformedtheroleofSeniorVicePresident,ChiefGrowthOfficer.ShejoinedConstellationinOctober2016asVicePresident,BeerInnovationandwasgivenadditionalresponsibilitiesasChiefofStafftotheCompany'sExecutiveManagementCommitteeinAugust2018.PriortojoiningConstellation,fromJuly2014toSeptember2016,

Ms.MonteirowasaSeniorMarketingDirectoratAnheuserBuschInBev.PriortojoiningAnheuserBuschInBev,sheservedinrolesofincreasingresponsibilitywithBeamSuntoryInc.,includingasAssociateBrandManager-JimBeamfromJuly2007toJune2009,BrandManager-CognacfromJuly2009toDecember2011,andSeniorBrandManager-Vodka,fromJanuary2012toJune2014.

BRGsponsorship-ConstellationParentsNetwork

JamesA.Sabia,Jr.,age60,istheCompany’sExecutiveVicePresidentandPresident,BeerDivisionaswellasPresidentofCrown,havingperformedtheserolessinceJanuary2022andFebruary2022,respectively.HehasbeenanExecutiveVicePresidentoftheCompanysinceMay2018.FromMarch2021throughJanuary2022heservedasExecutiveVicePresident,ManagingDirector,BeerDivision.FromMay2018throughMarch2021heperformedtheroleofExecutiveVicePresident,ChiefMarketingOfficer.HejoinedtheCompanyinAugust2007asVicePresident,MarketingfortheCompany’sspiritsbusiness.Sincethen,hehasservedinrolesofincreasingresponsibilitywiththeCompany.Since2009,hehasservedastheChiefMarketing

OfficeroftheCompany’sBeerDivision.From2009toJune2013,Mr.SabiawasemployedbyCrown,ofwhichtheCompanyowneda50%interestandwastheCompany’sbeerbusinessduringthatperiod.InJune2013,theCompanyacquiredtheremaining50%ofCrown,whichbecameawholly-ownedindirectsubsidiaryoftheCompanyonthatdate.PriortojoiningtheCompany,Mr.SabiawaswithMolsonCoorsBrewingCompanyfor17years.

BRGsponsorship-AfricanAmericansStrengtheningConstellation’sEngagement,Networking,&Development

CompanyInformation

Ourwebsiteishttps://www.cbrands.com,andourinvestorrelationswebsiteishttps://ir.cbrands.com.OurfilingswiththeSEC,includingourForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-Kandamendmentstothosereports,filedorfurnishedpursuanttoSection13(a)or15(d)oftheExchangeAct,areaccessiblefreeofchargeonourinvestorrelationswebsiteassoonasreasonablypracticableafterweelectronicallyfilesuchmaterialwith,orfurnishitto,theSEC.TheSECmaintainsawebsite,https://www.sec.gov,thatcontainsreports,proxy,andinformationstatements,andotherinformationregardingissuers,suchasourselves,thatfileelectronicallywiththeSEC.



WehaveadoptedaChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthicsthatspecificallyappliestoourchiefexecutiveofficer,ourprincipalfinancialofficer,andourcontroller,andisavailableonourinvestorrelationswebsite.ThisChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthicsmeetstherequirementsassetforthintheExchangeAct,Item406ofRegulationS-K.WealsohaveadoptedaCodeofBusinessConductandEthicsthatappliestoallemployees,directors,andofficers,includingeachpersonwhoissubjecttotheChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthics.TheCodeofBusinessConductandEthicsisavailableonourwebsite,togetherwithourGlobalCodeofResponsiblePracticesforBeverageAlcoholAdvertisingandMarketingathttps://www.cbrands.com/story/policies.Copiesofthesematerialsareavailableinprinttoanystockholderwhorequeststhem.StockholdersshoulddirectsuchrequestsinwritingtoInvestorRelationsDepartment,ConstellationBrands,Inc.,207HighPointDrive,Building100,Victor,NewYork14564,orbytelephoningourInvestorCenterat1-888-922-2150.

OurBoardofDirectorsCorporateGovernanceGuidelinesandtheChartersoftheBoard’sAuditCommittee,HumanResourcesCommittee(whichservesastheBoard’scompensationcommittee)andCorporateGovernanceandResponsibilityCommittee(whichservesastheBoard’snominatingcommittee)areaccessibleonourinvestorrelationswebsite.Amendmentsto,andwaiversgrantedtoourdirectorsandexecutiveofficersunderourcodesofethics,ifany,willbepostedinthisareaofourwebsite.

Theinformationregardingourwebsitesandtheircontentisforyourconvenienceonly.ThecontentofourwebsitesisnotdeemedtobeincorporatedbyreferenceinthisreportorfiledwiththeSEC.



Item1A.RiskFactors

Inadditiontoinformationdiscussedelsewhereinthisreport,youshouldcarefullyconsiderthefollowingfactors,aswellasadditionalfactorsnotpresentlyknowntousorthatwecurrentlydeemtobeimmaterial,whichcouldmateriallyaffectourbusiness,liquidity,financialcondition,and/orresultsofoperationsinpresentand/orfutureperiods.

OperationalRisksSupplyofqualitywater,agricultural,andotherrawmaterials,certainrawandpackagingmaterials

purchasedundersupplycontracts;inflation;limitedgroupofglassbottlesuppliers;supplychaindisruptionsThequalityandquantityofwateravailableforuseisimportanttothesupplyofouragriculturalraw

materialsandourabilitytooperateourbusiness.Waterisalimitedresourceinmanypartsoftheworldandifclimatepatternschangeanddroughtsbecomemoresevere,theremaybeascarcityofwaterorpoorwaterqualitywhichmayaffectourproductioncostsorimposecapacityconstraints.Wearedependentonsufficientamountsofqualitywaterforoperationofourbreweries,wineries,anddistilleries,aswellastoirrigateourvineyardsandconductourotheroperations.Thesuppliersoftheagriculturalrawmaterialswepurchasearealsodependentuponsufficientsuppliesofqualitywaterfortheirvineyardsandfields.Ifwateravailabletoouroroursuppliers’operationsbecomesscarceorthequalityofthatwaterdeteriorates,wemayincurincreasedproductioncostsorfacemanufacturingconstraints.Inaddition,waterpurificationandwastetreatmentinfrastructurelimitationscouldincreasecostsorconstrainoperationofourproductionfacilitiesandvineyards.Asubstantialreductioninwatersuppliescouldresultinmateriallossesofgrapecropsandvinesorothercrops,suchascorn,barley,orhops,whichcouldleadtoashortageofourproductsupply.

WehavesubstantialbreweryoperationsinMexico,breweryoperationsinTexas,Virginia,andFlorida,andsubstantialwineoperationsinCalifornia,NewZealand,andItaly.Californiahasenduredandcontinuestoexperienceprolongeddroughtconditionswhichhaveresultedintheimpositionofcertainrestrictionsonwaterusage,andiftheseconditionsorrestrictionspersistand/orincreaseinseverity,itcouldhaveanadverseeffectuponthoseoperations.OurNavaBreweryissourcedfromasinglewatersupply.Althoughweanticipateouroperationswillhaveadequatesourcesofqualitywatertosupporttheirongoingrequirements,thereisnoguaranteethatthesourcesofwater,methodsofwaterdelivery,waterquality,orwaterrequirementswillnotchangemateriallyinthefuture.Wemayincuradditionalexpensesforimprovingwaterdelivery,quality,andefficiencyaswellasforsecuringadditionalwatersources.

Ourbreweries,theGlassPlant,ourwineries,andourdistilleriesusealargevolumeofagriculturalandotherrawmaterialstoproducetheirproducts.Theseincludecornstarchandsugars,malt,hops,fruits,yeast,andwaterforourbreweries;sodaashandsilicasandfortheGlassPlant;grapesandwaterforourwineries;andgrainandwaterforourdistilleries.Ourbreweries,wineries,anddistilleriesalluselargeamountsofvariouspackagingmaterials,includingglass,aluminum,cardboard,andotherpaperproducts.Ourproductionfacilitiesalsouseelectricity,naturalgas,anddieselfuelintheiroperations.Certainrawmaterialsandpackagingmaterialsarepurchasedundercontractsofvaryingmaturities.Thesupply,on-timeavailability,andpriceofrawmaterials,packagingmaterials,andenergycanbeaffectedbymanyfactorsbeyondourcontrol,includingmarketdemand,globalgeopoliticaleventsandmilitaryconflicts,suchasrepercussionsfromtherecentconflictinUkraine(includingoncertaincommodities,suchasaluminum,corn,crudeoil,naturalgas,andsteel),droughts,storms,andotherweatherconditionsornaturalorman-madeevents,economicfactorsaffectinggrowthdecisions,plantdiseases,andtheft.Inflationarypressures,includingformaterialcosts,energy,commodities,supplychainlogistics,andlabor,maycontinuetonegativelyimpactus,andwemaybeunabletopassalongrisingcoststoconsumersthroughincreasedsellingprices.

Ourbreweries,wineries,anddistilleriesarealsodependentuponanadequatesupplyofglassbottles,andwehaveexperiencedglassbottlepurchasingshortages,particularlyforbrownglassusedforcertainofourMexicanbeerbrands.Glassbottlecostsareoneofourlargestcomponentsofcostofproductsold.TheGlassPlantproducesamajorityofthetotalannualglassbottlesupplyforourMexicanbeerbrands,andwecurrentlyhaveasmallnumberofothersuppliersofglassbottlesforourMexicanbeerbrands.IntheU.S.,glassbottleshaveonlyasmallnumberofproducers.Currently,oneproducersuppliesamajorityofourglasscontainerrequirementsfor

PARTI ITEM1A.RISKFACTORS TableofContents


ourU.S.wineandspiritsoperationswhileadifferentproducersuppliestheglassbottlesforourcraftbeeroperations.

Supplychaindisruptions,suchaslackofavailabilityandincreasedcostsofoceanfreightshippingcontainersanddelaysatseaand/orlandports,couldcontinuetoimpactourdistributionandproductioncapabilities.Totheextentanyoftheforegoingfactorsincreasesthecostsofourfinishedproductsorleadstoashortageofourproductsupplyorinventorylevels,wecouldexperienceamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Relianceuponcomplexinformationsystemsandthird-partyglobalnetworks;cyber-attacks;notrealizingbenefitsofournewglobalERP

Wedependoninformationtechnologytoenableustooperateefficientlyandinterfacewithcustomersandsuppliers,maintainfinancialaccuracyandefficiency,andeffectaccurateandtimelygovernmentalreporting.Ifwedonotallocateandeffectivelymanagetheresourcesnecessarytobuildandsustainthepropertechnologyinfrastructure,wecouldbesubjecttotransactionerrors,processinginefficiencies,lossofcustomers,businessdisruptions,lossofordamagetointellectualpropertythroughsecuritybreach,orpenaltiesassociatedwiththefailuretotimelyfilegovernmentalreports.Werecognizethatmanygroupsonaworldwidebasishaveexperiencedincreasesinsecuritybreaches,cyber-attacks,andotherhackingactivitiessuchasdenialofservice,malware,andransomware,andthereisthepossibilityofretaliatorycyber-attacks,includingbystate-sponsoredorganizations,stemmingfromgeopoliticalandeconomicresponsestoRussia’sinvasionofUkraine.Aswithalllargeinformationtechnologysystems,oursystemscouldbepenetratedbyincreasinglysophisticatedoutsidepartiesintentonextractingconfidentialorproprietaryinformation,corruptingourinformation,disruptingourbusinessprocesses,engagingintheunauthorizeduseofstrategicinformationaboutusorouremployees,customers,orconsumers,ordemandingmonetarypayment.Suchunauthorizedaccesscoulddisruptouroperationsandcouldresultinvariouscostsandadverseconsequences,includingthelossofassetsorrevenues,litigation,regulatoryactions,remediationcosts,increasedcyber-securityprotectioncosts,damagetoourreputation,harmtoouremployees,orthefailurebyustoretainorattractcustomersfollowingsuchanevent.

Wehaveoutsourcedvariousfunctionstothird-partyserviceprovidersandmayoutsourceotherfunctionsinthefuture.Werelyonsuchthird-partiestoprovideservicesonatimelyandeffectivebasis,butwedonotultimatelycontroltheirperformance.Inaddition,ourdistributors,wholesalers,suppliers,jointventurepartners,andotherexternalbusinesspartnersutilizetheirowninformationtechnologysystemsthataresubjecttosimilarriskstousasdescribedabove.Theirfailuretoperformasexpectedorasrequiredbycontract,oracyber-attackonthemthatdisruptstheirsystems,couldresultinsignificantdisruptionsandcoststoouroperationsor,inthecaseofthird-partyserviceproviders,apenetrationofoursystems.

InFiscal2022,wecompletedtheimplementationofanewglobalERPacrossourbusinessunitsusingaphasedapproach.WedesignedtheERPtoaccuratelymaintainourfinancialrecords,enhanceoperationalfunctionality,andprovidetimelyinformationtoourmanagementteamrelatedtotheoperationofthebusiness.WeplantomakeenhancementstotheERPandassociatedprocessesandtools,whichwillcontinuetorequiretheinvestmentofpersonnelandfinancialresources.IfourERPdoesnotoperateasintendedortheanticipatedbenefitsfromthisimplementationarenotfullyrealized,wemayexperiencedelays,increasedcosts,andotherdifficultiesthatmayinterferewithbeingabletooperateourbusinessandtheeffectivenessofourinternalcontroloverfinancialreportingcouldbeadverselyaffected.

Totheextentanyoftheforegoingfactorsresultinsignificantdisruptionsandcoststoouroperationsorreducetheeffectivenessofourinternalcontroloverfinancialreporting,wecouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

EconomicandotheruncertaintiesassociatedwithourinternationaloperationsOurproductsareproducedandsoldinnumerouscountries,wehaveemployeesinvariouscountries,and

wehaveproductionfacilitiescurrentlyintheU.S.,Mexico,NewZealand,andItaly.

Thecountriesinwhichweoperateimposeduties,excisetaxes,and/orothertaxesonbeveragealcoholproducts,and/oroncertainrawmaterialsusedtoproduceourbeveragealcoholproducts,invaryingamounts.



Governmentalbodiesmayproposechangestointernationaltradeagreements,treaties,tariffs,taxes,andothergovernmentrulesandregulationsincludingbutnotlimitedtoenvironmentaltreatiesandregulations.TherecentmilitaryconflictinUkraineandescalatinggeopoliticaltensionsresultingfromsuchconflicthaveresultedandmaycontinuetoresultinsanctions,tariffs,andimport-exportrestrictionswhich,whencombinedwithanyretaliatoryactionsthatmaybetakenbyRussia,couldcausefurtherinflationarypressuresandeconomicandsupplychaindisruptions(includingimpactsonpricesandsupplyofcertaincommodities,suchasaluminum,corn,crudeoil,naturalgas,andsteel).Significantincreasesinimportandexcisedutiesorothertaxeson,orthatimpact,beveragealcoholproductsaswellasanytariffs,particularlyonimportsfromMexicoandanyretaliatorytariffsimposedbytheMexicangovernment,couldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Inaddition,governmentalagenciesextensivelyregulatethebeveragealcoholproductsindustryconcerningsuchmattersaslicensing,warehousing,tradeandpricingpractices,permittedandrequiredlabeling,advertisingandrelationswithwholesalersandretailers.Certainregulationsalsorequirewarninglabelsandsignage.Wemaybesubjecttoneworrevisedregulationsorincreasedlicensingfees,requirements,ortaxes.Additionally,variousjurisdictionsmayseektoadoptsignificantadditionalproductlabelingorwarningrequirementsorlimitationsonthemarketingorsaleofourproductsbecauseofwhatourproductscontainorallegationsthatourproductscauseadversehealtheffects.Ifthesetypesofrequirementsbecomeapplicabletooneormoreofourmajorproductsundercurrentorfutureenvironmentalorhealthlawsorregulations,theymayinhibitsalesofsuchproducts.

Theseuncertaintiesandchanges,aswellasthedecisions,policies,andeconomicstrengthofoursuppliersanddistributors,couldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

DependenceonlimitedfacilitiesforproductionofourMexicanbeerbrands,andexpansion,optimization,andconstructionissues

WearedependentonourNavaandObregonbreweriesasoursolesourcesofsupplytofulfillourMexicanbeerbrandsproductrequirements,bothnowaswellasforthenear-term.

Expansion,optimization,and/orconstructionactivitiescontinueatourNavaandObregonbreweries,andweareexploringconstructionoftheSoutheastMexicoBrewery.WehavesuspendedMexicaliBreweryconstructionactivitiesfollowinganegativeresultfromapublicconsultationheldinMexico.WecontinuetoworkwithMexicangovernmentofficialsto(i)determinenextstepsforoursuspendedMexicaliBreweryconstructionproject,(ii)pursuevariousformsofrecoveryforcapitalizedcostsandadditionalexpensesincurredinestablishingtheMexicaliBrewery,and(iii)exploreoptionstoaddfurthercapacityelsewhereinMexico,includingtheconstructionoftheSoutheastMexicoBrewery,tomeetourlong-termneeds.Thesearemulti-billion-dollaractivities,withrisksofcompletiondelays,costoverruns,andfurtherassetimpairments.ThereisalsonoassuranceofanyrecoverywithrespecttothesuspendedMexicaliBrewery.

Expansionandoptimizationofcurrentproductionfacilitiesandconstructionofnewproductionfacilitiesaresubjecttovariousregulatoryanddevelopmentalrisks,includingbutnotlimitedto:(i)ourabilitytoobtaintimelycertificateauthorizations,necessaryapprovalsandpermitsfromregulatoryagenciesatallorontermsthatareacceptabletous;(ii)potentialchangesinfederal,state,andlocallawsandregulations,includingenvironmentalrequirements,thatpreventaprojectfromproceedingorincreasetheanticipatedcostoftheproject;(iii)inabilitytoacquirerights-of-wayorlandorwaterrightsonatimelybasisontermsthatareacceptabletous;(iv)inabilitytoacquirethenecessaryenergysupplies,includingelectricity,naturalgas,anddieselfuel;or(v)ahaltordelayinexpansion,optimization,orconstructionactivitiesduetoCOVID-19.Anyoftheseeventscoulddelaytheexpansion,optimization,orconstructionofourproductionfacilities.

WemaynotbeabletosatisfyourproductsupplyrequirementsfortheMexicanbeerbrandsintheeventof(i)asignificantdisruptionorthepartialortotaldestructionoftheNavaorObregonbreweriesortheGlassPlant,(ii)difficultyshippingrawmaterialsandproductintooroutoftheU.S.,or(iii)atemporaryinabilitytoproduceourproductduetoclosureorlowerproductionlevelsofoneormoreofourMexicanbreweries,includingasaresultofCOVID-19.Also,ifthecontemplatedexpansion,optimization,and/orconstructionactivitiesatthe



NavaandObregonbreweriesandconstructionofadditionalbrewerycapacityinMexicoareabandonedornototherwisecompletedbytheirtargetedcompletiondates,wemaynotbeabletoproducesufficientquantitiesofourMexicanbeertosatisfyourneeds.Undersuchcircumstances,wemaybeunabletoobtainourMexicanbeeratareasonablepricefromanothersource,ifatall.AsignificantdisruptionatourNavaorObregonbreweries,ortheGlassPlant,evenonashort-termbasis,couldimpairourabilitytoproduceandshipproductstomarketonatimelybasis.Alternativefacilitieswithsufficientcapacityorcapabilitiesmaynotreadilybeavailable,maycostsubstantiallymore,ormaytakeasignificanttimetostartproduction,anyofwhichcouldhaveamaterialadverseeffectonourproductsupply,business,liquidity,financialcondition,and/orresultsofoperations.

Operationaldisruptionsorcatastrophiclosstobreweries,wineries,otherproductionfacilities,ordistributionsystems

AllofourMexicanbeerbrandsproductsupplyiscurrentlyproducedatourNavaandObregonbreweries.Manyoftheworkersatthesebreweriesarecoveredbycollectivebargainingagreements.TheGlassPlanthasfiveoperationalglassfurnaceswhichproduceamajorityofthetotalannualglassbottlesupplyforourMexicanbeerbrands.Severalofourvineyardsandproductionanddistributionfacilities,includingcertainCaliforniaandOregonwineries,areinareaspronetoseismicactivity.Additionally,wehavevariousvineyardsandwineriesinCaliforniaandOregonwhichhaverecentlyexperiencedwildfiresand/orlandslides.

Ifanyoftheseorotherofourpropertiesandproductionfacilitiesweretoexperienceasignificantoperationaldisruptionorcatastrophicloss,itcoulddelayordisruptproduction,shipments,andrevenue,andresultinpotentiallysignificantexpensestorepairorreplacethesepropertiesorfindsuitablealternativeproviders.Also,ourproductionfacilitiesareassetintensive.Asouroperationsareconcentratedinalimitednumberofproductionanddistributionfacilities,wearemorelikelytoexperienceasignificantoperationaldisruptionorcatastrophiclossinanyonelocationfromactsofwarorterrorism,fires,floods,earthquakes,severewinterstormsorfrosts,hurricanes,pandemics,laborstrikesorotherlaboractivities,cyber-attacksandotherattemptstopenetrateourorourthird-partyserviceproviders’informationtechnologysystemsortheinformationtechnologyusedbyournon-productionemployeeswhoworkremotelyduringtheCOVID-19pandemic,unavailabilityofraworpackagingmaterials,orothernaturalorman-madeevents.GeopoliticalandeconomicresponsestoRussia’sinvasionofUkrainecouldimpactglobalenergypricesandsupply,particularlyforcrudeoilandnaturalgas,aswellasresultinretaliatorycyber-attacks.Ifasignificantoperationaldisruptionorcatastrophiclossweretooccur,wecouldbreachagreements,ourreputationcouldbeharmed,andourbusiness,liquidity,financialcondition,and/orresultsofoperationscouldbeadverselyaffectedby,amongotheritems,highermaintenancecharges,unexpectedcapitalspending,orproductsupplyconstraints.

Ourinsurancepoliciesdonotcovercertaintypesofcatastrophesandmaynotcovercertaineventssuchaspandemics.Economicconditionsanduncertaintiesinglobalmarketsmayadverselyaffectthecostandothertermsuponwhichweareabletoobtainpropertydamageandbusinessinterruptioninsurance.Ifourinsurancecoverageisadverselyaffected,ortotheextentwehaveelectedtoself-insure,wemaybeatgreaterriskthatwemayexperienceanadverseimpacttoourbusiness,liquidity,financialcondition,and/orresultsofoperations.

COVID-19orotherpandemics,outbreaksofcommunicableinfectionsordiseases,orotherpublichealthconcernsinthemarketsinwhichourconsumersoremployeesliveand/orinwhichweorourdistributors,retailers,andsuppliersoperate

Diseaseoutbreaks,includingtheCOVID-19pandemic,andotherpublichealthconditionshaveresultedandcouldcontinuetoresultindisruptionsanddamagetoourbusinesscausedbypotentialnegativeconsumerpurchasingbehavioraswellasdisruptiontooursupplychains,productionprocesses,andoperations.Consumerpurchasingbehaviormaybeimpactedbyreducedconsumptionbyconsumerswhomaynotbeabletoleavehomeorotherwiseshopinanormalmannerasaresultofgovernmentalcontainmentactions,quarantines,orothercancellationsofpubliceventsandotheropportunitiestopurchaseourproducts,frombar,restaurant,andvenueclosuresorcapacityrestrictions,orfromareductioninconsumerdiscretionaryincomeduetoreducedorlimitedworkandlayoffs.Supplydisruptionmayresultfromrestrictionsontheabilityofemployeesandothersinthesupplychaintotravelandwork,suchascausedbyquarantineorindividualillness,orwhichmayresultfromborderclosuresimposedbygovernmentstodeterthespreadofcommunicableinfectionordisease,ordeterminationsbyusoroursuppliersordistributorstotemporarilysuspendoperationsinaffectedareas,orotheractionswhichrestricttheabilitytodistributeourproductsorwhichmayotherwisenegativelyimpactourabilityto



produce,package,andshipourproducts,forourdistributorstodistributeourproducts,orforoursupplierstoprovideusourrawmaterials.Portsorchannelsofentrymaybeclosedoroperateatonlyaportionofcapacity,ortransportationofproductwithinaregionorcountrymaybelimited,ifworkersareunabletoreporttoworkduetotravelrestrictionsorpersonalillness.Ouroperationsandtheoperationsofoursuppliersmaybecomelessefficientorotherwisebecomenegativelyimpactedifourexecutiveleadersorotherpersonnelcriticaltoouroperationsareunabletoworkorifasignificantpercentageoftheworkforceisunabletoworkorisrequiredtoworkremotely.Aprolongedquarantineorborderclosurecouldresultintemporaryorlonger-termdisruptionsofsalespatterns,consumptionandtradepatterns,supplychains,productionprocesses,andoperations.Awidespreadhealthcrisis,suchastheCOVID-19pandemic,couldnegativelyaffecttheeconomiesandfinancialmarketsofmanycountriesresultinginaglobaleconomicdownturnwhichcouldnegativelyimpactdemandforourproductsandourabilitytoborrowmoney.Anyoftheseeventscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Climatechange;environmentalregulatorycomplianceandemissionsandstewardshiptargetsOurbusinessdependsuponagriculturalactivityandnaturalresources.Therehasbeenmuchpublic

discussionrelatedtoconcernsthatcarbondioxideandotherGHGsintheatmospheremayhaveanadverseimpactonglobaltemperatures,weatherpatterns,andthefrequencyandseverityofextremeweatherandnaturaldisasters.Severeweathereventsandnaturaldisasters,suchasourexperienceswithdrought,flooding,and/orwildfiresinCalifornia,Oregon,orWashington,anunexpectedseverewinterstorminTexasorMexico,oralatefrostinNewZealand,andclimatechangemaynegativelyaffectagriculturalproductivityintheregionsfromwhichwepresentlysourceourvariousagriculturalrawmaterialsortheenergysupplypoweringourproductionfacilities.Decreasedavailabilityofourrawmaterialsmayincreaseourcostofproductsold.Severeweathereventsandnaturaldisastersorchangesinthefrequencyorintensityofweathereventsornaturaldisasterscanalsoimpactproductqualityanddisruptoursupplychains,whichmayaffectproductionoperations,insurancecostandcoverage,aswellasdeliveryofourproductstowholesalers,retailers,andconsumers.Naturaldisasterssuchasseverestorms,floods,andearthquakesmayalsonegativelyimpacttheabilityofconsumerstopurchaseourproducts.

Wemayexperiencesignificantfutureincreasesinthecostsassociatedwithenvironmentalregulatorycompliance,includingfees,licenses,andthecostofcapitalimprovementsforouroperatingfacilitiestomeetenvironmentalregulatoryrequirements.Inaddition,wemaybepartytovariousenvironmentalremediationobligationsarisinginthenormalcourseofourbusinessorrelatingtohistoricalactivitiesofbusinessesweacquire.Duetoregulatorycomplexities,governmentalorcontractualrequirements,uncertaintiesinherentinlitigation,andtheriskofunidentifiedcontaminantsinourcurrentandformerproperties,thepotentialexistsforremediation,liability,indemnification,andothercoststodiffermateriallyfromthecoststhatwehaveestimated.Wemayincurcostsassociatedwithenvironmentalcompliancearisingfromeventswecannotcontrol,suchasunusuallyseverefloods,hurricanes,earthquakes,orfires.WehavealsodisclosedtargetsrelatedtorestorationofwaterwithdrawalsandScope1andScope2GHGemissions,theachievementofwhichwillrequireustomakeinvestmentsandallocateresources.Wecannotassurethatwehaveallottedsufficientresourcestoattain,orthatweultimatelywillachieve,thesetargetsorthatourcostsinrelationtoanyoftheforegoingmatterswillnotexceedourprojections,whichcouldhaveamaterialadverseeffectuponourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Relianceonwholesaledistributors,majorretailers,andgovernmentagenciesLocalmarketstructuresanddistributionchannelsvaryworldwide.WithinourprimarymarketintheU.S.,

weofferarangeofbeveragealcoholproductswithgenerallyseparatedistributionnetworksutilizedforourbeerportfolioandourwineandspiritsportfolio.IntheU.S.,wesellourproductsprincipallytowholesalersforresaletoretailoutletsanddirectlytogovernmentagencies.WehaveanexclusivearrangementwithonewholesalerthatgeneratesalargeportionofourbrandedU.S.wineandspiritsnetsales,andwehaveonewholesalerforourbeerportfoliowhich,throughmultipleentities,representsroughlyone-fifthofourconsolidatednetsales.Wholesalersandretailersofourproductsofferproductswhichcompetedirectlywithourproductsforretailshelfspace,promotionalsupportandconsumerpurchases,andwholesalersorretailersmaygivehigherprioritytoproductsofourcompetitors.Thereplacementorpoorperformanceofourmajorwholesalers,retailers,orgovernmentagenciescouldresultintemporaryorlonger-termsalesdisruptionsorcouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.



Contaminationanddegradationofproductqualityfromdiseases,pests,andweatherandclimateconditions

Contamination,whetherarisingaccidentallyorthroughdeliberatethird-partyaction,orothereventsthatharmtheintegrityorconsumersupportforourbrands,couldadverselyaffectsales.Variousdiseases,pests,fungi,viruses,drought,frosts,andcertainotherweatherconditionsortheeffectsofclimateconditions,suchassmoketaintfromwildfires,couldaffectthequalityandquantityofbarley,hops,grapes,andotheragriculturalrawmaterialsavailable,decreasingthesupplyandqualityofourproducts.Similarly,powerdisruptionsduetoweatherconditionscouldadverselyimpactourproductionprocessesandthequalityofourproducts.Wecannotguaranteethatweand/oroursuppliersofagriculturalrawmaterialswillsucceedinpreventingcontaminationinexistingand/orfuturevineyardsorfields.Futuregovernmentrestrictionsregardingtheuseofcertainmaterialsusedingrowinggrapesorotheragriculturalrawmaterialsmayincreasevineyardcostsand/orreduceproductionofgrapesorothercrops.Itisalsopossiblethatasuppliermaynotprovidematerialsorproductcomponentswhichmeetourrequiredstandardsormayfalsifydocumentationassociatedwiththefulfillmentofthoserequirements.

Productcontaminationortamperingorthefailuretomaintainourstandardsforproductquality,safety,andintegrity,includingwithrespecttorawmaterials,naturallyoccurringcompounds,packagingmaterials,orproductcomponentsobtainedfromsuppliers,mayalsoreducedemandforourproductsorcauseproductionanddeliverydisruptions.Contaminantsorotherdefectsinrawmaterials,packagingmaterials,orproductcomponentspurchasedfromthirdpartiesandusedintheproductionofourbeer,wine,orspiritsproducts,ordefectsinthefermentationordistillationprocesscouldleadtolowbeveragequalityaswellasillnessamong,orinjuryto,consumersofourproductsandmayresultinreducedsalesoftheaffectedbrandorallourbrands.

Ifanyofourproductsbecomeunsafeorunfitforconsumption,aremisbranded,orcauseinjury,wemayhavetoengageinaproductrecalland/orbesubjecttoliabilityandincuradditionalcosts.Awidespreadproductrecall,multipleproductrecalls,orasignificantproductliabilityjudgmentcouldcauseourproductstobeunavailableforaperiod,whichcouldreduceconsumerdemandandbrandequityandresultinreputationalharm.

MarijuanaiscurrentlyillegalunderU.S.federallawandinotherjurisdictions;wedonotcontrolCanopy’sbusinessoroperations

TheabilityofCanopytoachieveitsbusinessobjectivesiscontingent,inpart,uponthelegalityofthecannabisindustry,Canopy’scompliancewithregulatoryrequirementsenactedbyvariousgovernmentalauthorities,andCanopyobtainingallregulatoryapprovals,wherenecessary,fortheproductionandsaleofitsproducts.Thelawsandregulationsgoverningmedicinalandrecreationalcannabisarestilldeveloping,includinginwaysthatwemaynotforesee.Canopy’ssuccesswilldependon,amongotherthings,theabilityofCanopytooperatesuccessfullyinthecannabismarketspaceandthepresenceofsufficientretailoutlets.Therearealsoconcernsabouthealthissuesassociatedwithcertaintypesofformfactorsforcannabisproducts,suchasthoseusedininhalables.Theseissuesmayresultinalessrobustconsumerdemandforcertainformfactors.ThereisnoassurancearobustcannabisconsumermarketwilldevelopconsistentwithourexpectationsorthatconsumerswillpurchaseanyCanopyproducts.AlthoughtheAgricultureImprovementActof2018hastakenhempandhempderivedcannabinoidsoutofthemostrestrictiveclassofcontrolledsubstances,marijuanaisaschedule-1controlledsubstanceintheU.S.andiscurrentlyillegalunderU.S.federallaw.EveninthoseU.S.statesinwhichtherecreationaluseofmarijuanahasbeenlegalized,itsuseremainsaviolationofU.S.federallaw.SinceU.S.federallawscriminalizingtheuseofmarijuanapreemptstatelawsthatlegalizeitsuse,continuationofU.S.federallawinitscurrentstateregardingmarijuanawouldlikelylimittheexpansionofCanopy’sbusinessintotheU.S.Similarissuesofillegalityapplyinothercountries.Anyamendmenttoorreplacementofexistinglawstomakethemmoreonerous,ordelaysinamendingorreplacingexistinglawstoliberalizethelegalpossessionanduseofcannabis,ordelaysinobtaining,orthefailuretoobtain,anynecessaryregulatoryapprovalsmaysignificantlydelayornegativelyimpactCanopy’smarkets,products,andsalesinitiativesandcouldhaveamaterialadverseeffectonCanopy’sbusiness,liquidity,financialcondition,and/orresultsofoperations.Werethattooccur,wemaynotbeabletorecoverthevalueofourinvestmentinCanopy.

WehavetherighttonominatefourmembersoftheCanopyboardofdirectors.WhilewedonotcontrolCanopy’sbusinessoroperations,wedorelyonCanopy’sinternalcontrolsandproceduresforoperationofthatbusiness.Nevertheless,ourfinancingarrangementsrequireustocertify,amongotherthings,thattoourknowledge(i)CanopyisproperlylicensedandoperatinginaccordancewithCanadianlawsinallmaterialrespects;



(ii)Canopydoesnotknowinglyorintentionallypurchase,manufacture,distribute,import,and/orsellmarijuana,oranyothercontrolledsubstanceinorfromtheU.S.oranyotherjurisdiction,ineachcase,wheresuchpurchase,manufacture,distribution,importation,orsaleofmarijuanaorsuchothercontrolledsubstanceisillegal,exceptincompliancewithallapplicablefederal,state,local,orforeignlaws,rules,andregulations;and(iii)Canopydoesnotknowinglyorintentionallypartnerwith,investin,ordistributemarijuanaoranyothercontrolledsubstancetoanythird-partythatknowinglyorintentionallypurchases,sells,manufactures,ordistributesmarijuanaoranyothercontrolledsubstanceintheU.S.oranyotherjurisdiction,ineachcase,wheresuchpurchase,sale,manufacture,ordistributionofmarijuanaorsuchothercontrolledsubstanceisillegal,exceptincompliancewithallapplicablefederal,state,local,orforeignlaws,rules,andregulations.WerewetoknowthatCanopywasknowinglyorintentionallyviolatinganyoftheseapplicablelaws,wewouldbeunabletomaketherequiredcertificationunderourfinancingarrangements,whichcouldleadtoadefaultunderthosefinancingarrangements.

StrategicRisksPotentialdeclineintheconsumptionofproductswesell;dependenceonsalesofourMexicanbeerbrandsOurbusinessdependsuponconsumers’consumptionofourbeer,wine,andspiritsbrands,andsalesof

ourMexicanbeerbrandsintheU.S.areasignificantportionofourbusiness.Consumerpreferencesmayshiftduetoavarietyoffactors,includingchangesintastepreferencesandleisure,dining,andbeverageconsumptionpatterns,demographicorsocialtrends,perceivedvalue,andpublichealthpoliciesputintoeffecttomitigatethespreadofCOVID-19.Further,alimitedorgeneraldeclineinconsumptioninoneormoreofourproductcategoriescouldoccurinthefutureduetoavarietyoffactors,including:

• ageneraldeclineineconomicorgeopoliticalconditions;• concernaboutthehealthconsequencesofconsumingbeveragealcoholproductsandaboutdrinking

anddriving;• ageneraldeclineintheconsumptionofbeveragealcoholproductsinon-premiseestablishments,

whichmayresultfromstricterlawsrelatingtodrivingwhileundertheinfluenceofalcohol;• theincreasedactivityofanti-alcoholgroupsorotherbodiesadvocatingmeasuresdesignedtoreduce

theconsumptionofbeveragealcoholproducts,suchastheWHO;• increasedfederal,state,provincial,andforeignexcise,orothertaxesonbeveragealcoholproducts

andpossiblerestrictionsonbeveragealcoholadvertisingandmarketing;• increasedregulationrestrictingthepurchaseorconsumptionofbeveragealcoholproducts;• inflation,includingtheimpactofreduceddiscretionaryincomeofconsumersavailabletopurchaseour

productsandincreasedcommoditiescosts;and• wars,healthepidemicsorpandemics,quarantines,weather,andnaturalorman-madedisasters.

Iftheseoranyotherfactorscauseadeclineinthegrowthrate,amount,orprofitabilityofoursalesoftheMexicanbeerbrandsintheU.S.oranymaterialshiftinconsumerpreferencesandtasteinourmajormarketsawayfromourbeer,wine,andspiritsbrands,andourMexicanbeerbrandsinparticular,orfromthecategoriesinwhichtheycompete,itcouldadverselyaffectourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Acquisition,divestiture,investment,andNPDstrategiesFromtimetotime,weacquirebusinesses,assets,orsecuritiesofcompaniesthatwebelievewillprovidea

strategicfitwithourbusiness.Weintegrateacquiredbusinesseswithourexistingoperations;ouroverallinternalcontroloverfinancialreportingprocesses;andourfinancial,operations,andinformationsystems.Ifthefinancialperformanceofourbusiness,assupplementedbytheassetsandbusinessesacquired,doesnotmeetourexpectations,itmaymakeitmoredifficultforustoserviceourdebtobligationsandourresultsofoperationsmayfailtomeetmarketexpectations.Wemaynoteffectivelyassimilatethebusinessorproductofferingsofacquiredcompaniesintoourbusinessorwithintheanticipatedcostsortimeframes,retainkeycustomersandsuppliersorkeyemployeesofacquiredbusinesses,orsuccessfullyimplementourbusinessplanforthecombinedbusiness.Inaddition,ourfinaldeterminationsandappraisalsoftheestimatedfairvalueofassetsacquiredandliabilitiesassumedinouracquisitionsmayvarymateriallyfromearlierestimatesandwemayfailtofullyrealizeanticipatedcostsavings,growthopportunities,orotherpotentialsynergies.Wecannotassurethatthefairvalueofacquiredbusinessesorinvestmentswillremainconstant.



Wemayalsodivestourselvesofbusinesses,assets,orsecuritiesofcompanies,includingthosethatwebelievenolongerprovideastrategicfitwithourbusiness.Wemayprovidevariousindemnificationsinconnectionwithdivestituresofbusinessesorassets.Theamountofcontingentconsideration,ifany,receivedindivestitures,includingintheWineandSpiritsDivestitures,mayvarybasedonvariousfactorsincludingactualfuturebrandperformance.Divestituresofportionsofourbusinessmayalsoresultincostsstrandedinourremainingbusiness.Delaysindevelopingorimplementingplanstoaddresssuchcostscoulddelayorpreventtheaccomplishmentofourfinancialobjectives.

Wehavealsoacquiredorretainedownershipinterestsincompanieswhichwedonotcontrol,suchasourjointventuretooperatetheGlassPlant,ourinterestinCanopy,andinvestmentsmadethroughourcorporateventurecapitalfunction,andwehaveacquiredcontrolofcompanieswhichwedonotwhollyown,suchasour75%interestinNelson’sGreenBrier.Ourjointventurepartnersortheotherpartiesthatholdtheremainingownershipinterestsincompanieswhichwedonotcontrolmayatanytimehaveeconomic,business,orlegalinterestsorgoalsthatareinconsistentwithourgoalsorthegoalsofthejointventuresorthosecompanies.Ourjointventurearrangementsandthearrangementsthroughwhichweacquiredorholdourotherequityormembershipinterestsmayrequireus,amongothermatters,topaycertaincosts,tomakecapitalinvestments,tofulfillaloneourjointventurepartners’obligations,ortopurchaseotherparties’interests.Theentitiesinwhichwehaveaninterestmaybesubjecttolitigationwhichmayhaveanadverseimpactontheirabilitytodobusinessorunderwhichtheymayincurcostsandexpenseswhichcouldhaveamaterialadverseimpactontheiroperationsorfinancialconditionwhich,inturn,couldnegativelyimpactthevalueofourinvestment.

WepreviouslyincreasedourinvestmentinCanopythroughexerciseofourwarrantsinCanopyandwemayfurtherincreaseourinvestmentinthefuture.Whilewewillnotdevelop,distribute,manufacture,orsellcannabisproductsintheU.S.,oranywhereelseintheworld,unlesslegallypermissibletodosoatallgovernmentallevelsintheparticularjurisdiction,thisinvestmentcouldaffectconsumerperceptionofourexistingbrandsandourreputationwithvariousconstituencies.

Inaddition,ourcontinuedsuccessdepends,inpart,onourabilitytodevelopnewproducts.Thelaunchandongoingsuccessofnewproductsareinherentlyuncertain,especiallywithrespecttoconsumerappeal.Anewproductlaunchcangiverisetoavarietyofcosts.Anunsuccessfullaunch,amongotherthings,canaffectconsumerperceptionofexistingbrandsandourreputation.Unsuccessfulimplementationorshort-livedpopularityofourproductinnovationshasresultedandmayinthefutureresultininventorywrite-offsandothercosts.

Wecannotassurethatwewillrealizetheexpectedbenefitsofacquisitions,divestitures,investments,ornewproducts.Wehaverecognizedimpairmentlossesand/orwrite-offsinconnectionwithacquiredanddivestedbusinessesandinvestments,andwemaydosoagaininthefuture.Wealsocannotassurethatouracquisitions,investments,orjointventureswillbeprofitableorthatforecastsregardingacquisition,divestiture,orinvestmentactivitieswillbeaccurateorthattheinternalcontroloverfinancialreportingofentitieswhichwemustconsolidateasaresultofourinvestmentactivitiesbutdonotcontrolorwhollyownwillbeasrobustasourinternalcontroloverfinancialreporting.Ourfailuretoadequatelymanagetherisksassociatedwithacquisitions,divestitures,investments,ornewproducts,orthefailureofanentityinwhichwehaveanequityormembershipinterest,couldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

OurCanopyinvestmentisdependentuponanemergingmarketandlegalsalesofcannabisproductsThelegalcannabismarketisanemergingmarket.ThelegislativeframeworkpertainingtotheCanadian

cannabismarket,aswellascannabismarketsinothercountries,isuncertain.ThesuccessoftheCanopytransactionswilldependon,amongotherthings,theabilityofCanopytocreateastrongplatformtooperatesuccessfullyinthecannabismarketspace,consumerdemandforitsproducts,andthepresenceofsufficientretailoutlets.ThereisnoassurancearobustcannabisconsumermarketwilldevelopconsistentwithourexpectationsorthatconsumerswillpurchaseanyCanopyproducts.

Thechanginglegallandscapeandthelackofconsumermarketdatamakesitdifficulttopredictthepaceatwhichthecannabismarketmaygrow,ifatall,andtheproductsthatconsumerswillpurchaseinthecannabismarketplace.Forexample,theCanadianCannabisActprohibitstestimonials,lifestylebrandingandpackagingthatisappealingtoyouth.Therestrictionsonadvertising,marketing,andtheuseoflogosandbrandnamescouldhave



amaterialadverseeffectonCanopy’sbusiness,liquidity,financialcondition,and/orresultsofoperations,andourinvestmentinCanopy.Additionally,CanopymustrelyonitsownmarketresearchandinternaldatatoforecastsalesasdetailedforecastsmaynotbefullyavailableatthisearlystageinthecannabisindustryinCanadaandglobally.Marketresearchrelatingtotheadult-userecreationallegalcannabisindustryisinitsearlystagesand,assuch,trendscanonlybeforecasted.

AfailureinthedemandforCanopy’sproductstomaterializeasaresultofcompetition,consumerdesire,competitionfromlegalandillegalmarketentrantsorotherproducts,orotherfactorscouldhaveamaterialadverseeffectonCanopy’sbusiness,liquidity,financialcondition,and/orresultsofoperations.Thechanginglegallandscapeandthelackofconsumermarketdatamakesitdifficulttopredictthepaceatwhichthecannabismarketmaygrow,ifatall,andtheproductsthatconsumerswillpurchaseinthecannabismarketplace.

Dependenceupontrademarksandproprietaryrights,failuretoprotectourintellectualpropertyrightsOurfuturesuccessdependssignificantlyonourabilitytoprotectourcurrentandfuturebrandsand

productsandtodefendourintellectualpropertyrights.Wehavebeengrantednumeroustrademarkregistrationsandusecertaintrademarksunderlicensecoveringourbrandsandproducts,andwehavefiled,andexpecttocontinuetofileorhavefiledonourbehalf,trademarkapplicationsseekingtoprotectnewlydevelopedbrandsandproducts.Wecannotbesurethattrademarkregistrationswillbeissuedwithrespecttoanyofsuchtrademarkapplications.Wecouldalso,byomission,failtotimelyreneworprotectatrademarkandourcompetitorscouldchallenge,invalidate,orcircumventanyexistingorfuturetrademarksissuedto,orlicensedby,us.SeveralofoursubsidiariesaredefendantsinalawsuitoriginallyfiledinU.S.DistrictCourtfortheSouthernDistrictofNewYorkinFebruary2021andamendedinDecember2021,whichalleges,amongotherthings,thatoursublicenseofthetrademarksforourMexicanbeerbrandsshouldnotpermitustousetheCoronabrandnameonourCoronaHardSeltzerortheModelobrandnameonourModeloRanchWater.Whilewebelievethislawsuitiswithoutmerit,ifwearenotsuccessful,wemaynotbeabletomarketourhardseltzerproductinitscurrentformulationundertheCoronabrandnameorourranchwaterproductinitscurrentformulationundertheModelobrandnamewhichmayhaveanadverseeffectonourbusinessandfinancialcondition.Wemaybesubjecttootherlitigationrelatedtoourtrademarksandintellectualpropertyrights.Asubstantialadversejudgmentorotherunfavorableresolutionofthesemattersorourfailuretootherwiseprotectourintellectualpropertyrightscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

FinancialRisksIndebtednessWehaveincurredindebtednesstofinanceinvestmentsandacquisitions,fundbeeroperationsexpansion,

optimization,andconstructionactivities,paycashdividends,andrepurchasesharesofourcommonstock.Inthefuture,wemaycontinuetoincuradditionalindebtednessforanyoralloftheseactivitiesaswellastofundothergeneralcorporatepurposes.Wecannotassurethatourbusinesswillgeneratesufficientcashflowfromoperationstomeetallourdebtservicerequirements;returnvaluetostockholderssuchasthroughpaymentofdividendsorrepurchaseofsharesofourcommonstock;andfundourgeneralcorporateandcapitalrequirements.

Ourcurrentandfuturedebtserviceobligationsandcovenantscouldhaveimportantconsequences.Theseconsequencesinclude,ormayinclude,thefollowing:

• ourabilitytoobtainfinancingforfutureworkingcapitalneedsorinvestments/acquisitionsorotherpurposesmaybelimited;

• ourfundsavailableforoperations,expansions,andconstruction,dividends,orotherdistributions,orsharerepurchasesmaybereducedbecausewededicateasignificantportionofourcashflowfromoperationstothepaymentofprincipalandinterestonourindebtedness;

• ourabilitytoconductourbusinesscouldbelimitedbyrestrictivecovenants;and• ourvulnerabilitytoadverseeconomicconditionsmaybegreaterthanlessleveragedcompetitorsand,

thus,ourabilitytowithstandcompetitivepressuresmaybelimited.

Additionally,anyfailuretomeetrequiredpaymentsonourdebt,orfailuretocomplywithanycovenantsintheinstrumentsgoverningourdebt,couldresultinaneventofdefaultunderthetermsofthoseinstrumentsandadowngradetoourcreditratings.Adowngradeinourcreditratingswouldincreaseourborrowingcostsand



couldaffectourabilitytoissuecommercialpaper.Certainofourdebtfacilitiesalsocontainchangeofcontrolprovisionswhich,iftriggered,mayresultinanaccelerationofourobligationtorepaythedebt.Inaddition,certainofourcurrentandfuturedebtandderivativefinancialinstrumentshave,orinthefuture,couldhaveinterestratesthataretiedtoreferencerates,suchasSOFR.Thevolatilityandavailabilityofsuchreferencerates,includingestablishmentofalternativereferencerates,isoutofourcontrol.Changestoortheunavailabilityofsuchratesorthemannerforcalculationofsuchreferencerates,couldresultinincreasestothecostofourdebt.

Ifwedonotcomplywiththeobligationscontainedinourseniorcreditfacility,ourexistingorfutureindentures,orotherloanagreements,wecouldbeindefaultundersuchdebtfacilitiesoragreements.Insuchanevent,theholdersofourdebtcouldelecttodeclareasdueandpayableallamountsoutstandingunderthoseinstruments.Adefaultcouldalsorequiretheimmediaterepaymentofoutstandingobligationsunderotherdebtfacilitiesoragreementsthatcontaincross-accelerationorcross-defaultprovisions.Ifthatoccurred,wemightnothaveavailablefundstosatisfyourrepaymentobligations.

SecuritiesmeasuredatfairvalueThevalueofthewarrantsandconvertibledebtweholdinCanopythroughoursubsidiariesissubjectto

thevolatilityofthemarketpriceofCanopy’scommonstock.Thisvolatilitysubjectsourfinancialstatementstovolatility.ThemarketpriceofCanopy’scommonstockhasexperiencedsignificantvolatility,andthatvolatilitymaycontinueinthefutureandmayalsobesubjecttowidefluctuationsinresponsetomanyfactorsbeyondthecontrolofCanopy,orofus.Thesefactorsinclude,butarenotlimitedto:

• actualoranticipatedfluctuationsinCanopy’sreportedresultsofoperationsorfinancialposition,includingduetoasignificantimpairmentofgoodwill,intangibleassets,orotherlong-livedassets;

• recommendationsandreportsbysecuritiesandindustryanalysts;• impactofCOVID-19onCanopy’soperations,revenues,andabilitytoaccessfinancialmarketsaswell

as,onthecannabisindustrygenerally;• significantacquisitions,investments,and/orequityissuancesbyCanopy;• changesintheperformanceormarketvaluationsofcompaniesinCanopy’sindustry;• announcementofdevelopmentsandmaterialeventsbyCanopyoritscompetitors;• fluctuationsinthecostsofvitalproductionmaterialsandservices;• additionordepartureofCanopyexecutiveofficersorotherkeypersonnel;• speculativetradingactivitybycertaininvestors;• newsreportsrelatingtotrends,concerns,technological,orcompetitivedevelopments,regulatory

changesandotherrelatedissuesinCanopy’sindustryortargetmarkets;• legalandregulatorychangesaffectingthecannabisindustrygenerallyandCanopy’sbusinessand

operations;and• administrativeobligationsassociatedwithHealthCanadarequirementsandcompliancewithall

associatedrulesandregulationsincluding,butnotlimitedto,theCanadianCannabisAct.

WecurrentlyaccountforourinvestmentinCanopyundertheequitymethod.TheremaybeafutureimpairmentofourCanopyEquityMethodInvestmentifCanopy’sstockpriceremainsbelowourcarryingvalueofthatinvestmentanddoesnotrecoverinthenear-termorifourexpectationsaboutCanopy’sprospectiveresultsandcashflowsdecline,whichcouldbeinfluencedbyavarietyoffactorsincludingthoselistedabove.WerecognizeourequityinCanopy’searningsonatwo-monthlagprimarilybecauseoftheavailabilityofCanopy’sfinancialresultssinceCanopy’sfiscalyearendsannuallyMarch31whileourfiscalyearendsannuallyonthelastdayofFebruary.

Canopy’scorporategovernanceandvaluationCanopy’sbusinessissubjecttoevolvingcorporategovernanceandpublicdisclosureregulationsthatmay

fromtimetotimeincreasebothCanopy’scompliancecostsandtheriskofitsnon-compliance.Theseincludechangingrulesandregulationspromulgatedbyanumberofgovernmentalandself-regulatedorganizations,including,butnotlimitedto,theCanadianSecuritiesAdministrators,theTSX,theInternationalAccountingStandardsBoard,theSEC,andNasdaq.TheserulescontinuetoevolveinscopeandcomplexitycreatingnewrequirementsforCanopy.CanopyisrequiredtocomplywithapplicableNasdaqlistingstandardsandSOXrequirements.Inthefuture,Canopy’sinternalcontrolsmaynotbeadequate,orCanopymaynotbeableto



maintainadequateandeffectiveinternalcontrolsoverfinancialreportingasrequiredbySOX,oronanongoingbasisifstandardsaremodified,supplemented,oramendedfromtimetotime.Ifnotmaintained,investorscouldloseconfidenceinthereliabilityofitsfinancialstatements,whichcouldharmCanopy’sbusinessandhaveanegativeimpactonthetradingpriceormarketvalueofCanopysecurities.

Inaddition,werecordasequityinearningsourproportionalshareofCanopy’sresultsofoperations.WecouldhaveamaterialweaknessintheeventtheproportionalshareofCanopy’sresultsofoperationsthatwerecordcontainsanerrorasaresultofanerrorinCanopy’sfinancialstatementsthatwedonotdetect.

AlthoughwedonotcontrolCanopy,wedohavesignificantinfluenceoverCanopy.IfwecontrolledCanopy,wewouldhavetoconsolidateCanopyintoourfinancialstatements,andifCanopyhadamaterialweakness,wewouldinheritCanopy’smaterialweaknessthroughconsolidation.Insuchanevent,evenifCanopy’sfinancialstatementswerecorrect,thefactthatCanopyhadamaterialweaknesscouldresultinamaterialweaknessforus.

Classactionorotherlitigationrelatingtoabuseofourproducts,themisuseofourproducts,productliability,ormarketingorsalespractices,includingproductlabeling

Therehasbeenpublicattentiondirectedatthebeveragealcoholindustry,whichwebelieveisduetoconcernoverproblemsrelatedtoharmfuluseofalcohol,includingdrinkinganddriving,underagedrinking,andhealthconsequencesfromthemisuseofalcohol.Wecouldbeexposedtolawsuitsrelatingtoproductliabilityormarketingorsalespractices,includingproductlabeling.Adversedevelopmentsinlawsuitsconcerningthesetypesofmattersorasignificantdeclineinthesocialacceptabilityofbeveragealcoholproductsthatmayresultfromlawsuitscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

OtherRisksControlbytheSandsfamily;ProposalfromtheSandsfamilytodeclassifyourcommonstockOurClassBStockisprincipallyheldbymembersoftheSandsfamily,eitherdirectlyorthroughentities

controlledbymembersoftheSandsfamily.HoldersofClassAStockareentitledtoonevotepershareandholdersofClassBStockareentitledto10votespershare.HoldersofClass1Stockgenerallydonothavevotingrights.ThestockownershipoftheSandsfamilyandentitiescontrolledbymembersoftheSandsfamilyrepresentsamajorityofthecombinedvotingpowerofallclassesofourcommonstockasofthedateofthisForm10-K,votingasasingleclass.Consequently,theSandsfamilycurrentlyhasthepowertoelectamajorityofourdirectorsandapproveactionsrequiringtheapprovalofthestockholdersoftheCompanyvotingasasingleclass.

OnApril2,2022,wereceivedtheProposalwhichproposesthateachshareofClassBStockwouldbeconvertedinto1.35sharesofClassAStock.ItisexpectedthattheSandsfamilyandentitiescontrolledbymembersoftheSandsfamilywillcontinuetobeourlargeststockholderifatransactionwereconsummatedonthetermsproposed.OurBoardofDirectorshasestablishedaSpecialCommitteetoevaluatetheProposal.AnydefinitiveagreementwiththeSandsfamilyandentitiescontrolledbymembersoftheSandsfamilywithrespecttothepotentialtransactionmustbeapprovedbytheSpecialCommitteeaswellasourBoardofDirectors.PursuanttothetermsoftheProposal,anypotentialtransactionwouldalsorequiretheapprovalofholdersofamajorityofthesharesofClassAStockthatdonotalsoholdsharesofClassBStock.Wecannotassureyouthatadefinitiveagreementwillbeenteredinto,includingbecausetheSpecialCommitteeortheBoardofDirectorsdoesnotapproveanysuchtransaction,orwhattheultimatetermsofanysuchagreementmaybe.Inaddition,evenifanagreementisapprovedbytheSpecialCommitteeandtheBoardofDirectors,atransactionstillmaynotbecompletedifsuchtransactionisnotapprovedbytheholdersofamajorityofthesharesofClassAStockthatdonotalsoholdsharesofClassBStock.

TheSandsfamilyandentitiescontrolledbymembersoftheSandsfamilyhavepledgedsharesofClassAStockandClassBStocktosecurevariouscreditfacilities.Intheeventofnoncompliancewithcertaincovenantsunderthecreditfacilities,thefinancialinstitutionstowhichsuchstockispledgedhavecertainremedies,includingtherighttosellthepledgedshares(whichwouldrequiretheconversionofClassBStockintoClassAStockpriortoanysales)subjecttocertainprotectionsaffordedtotheborrowersandpledgors.Thesalebysuchfinancialinstitutionsofasubstantialamountofthepledgedsharescoulddepress,orresultinvolatilityin,thetradingprice



ofourClassAStockand/orresultintheSandsfamilyandentitiescontrolledbymembersoftheSandsfamilyceasingtoownsharesrepresentingamajorityofthecombinedvotingpowerofallclassesofourcommonstockvotingasasingleclass.Inaddition,ifsignificantstockindicesdecidetoprohibittheinclusionofcompanieswithdualclassstructures,thepriceofourClassAStockcouldbenegativelyimpactedandcouldbecomemorevolatile.

Choice-of-forumprovisioncontainedinby-lawsregardingcertainstockholderlitigationOurby-lawsprovidethat,unlessweconsentinwritingtotheselectionofanalternativeforum,(i)the

CourtofChanceryofDelaware(orifsuchcourtlackssubjectmatterjurisdiction,thefederaldistrictcourtofDelaware)will,tothefullestextentpermittedbylaw,bethesoleandexclusiveforumforanyderivativeactionorproceedingbroughtonbehalfoftheCompany;anyactionassertingaclaimofbreachofafiduciarydutyowedbyanyofourcurrentorformerdirectors,officers,orstockholderstotheCompanyorourstockholders;anyactionassertingaclaimarisingpursuanttoanyprovisionoftheDGCL,ourcertificateofincorporation,orourby-lawsorastowhichtheDGCLconfersjurisdictionontheCourtofChanceryofDelaware;oranyactionassertingaclaimgovernedbytheinternalaffairsdoctrine,and(ii)thefederaldistrictcourtsoftheU.S.will,tothefullestextentpermittedbylaw,bethesoleandexclusiveforumforanycomplaintassertingacauseofactionarisingundertheSecuritiesAct.

Tothefullestextentpermittedbylaw,thischoice-of-forumprovisionwillapplytostateandfederallawclaims,includingclaimsunderthefederalsecuritieslaws(includingtheSecuritiesActandtheExchangeAct),althoughourstockholderswillnotbedeemedtohavewaivedourcompliancewiththefederalsecuritieslawsandtherulesandregulationsthereunder.Thischoice-of-forumprovisionmayincreasecostsforastockholderpursuinganysuchclaim,discourageclaimsorlimitastockholder’sabilitytobringaclaiminajudicialforumthatsuchstockholderfindsfavorablefordisputeswithusorourdirectors,officers,otherstockholders,orotheremployeeswhichmaydiscouragesuchlawsuitseventhoughanaction,ifsuccessful,mightbenefitourstockholders.Inaddition,thecourtslocatedinDelawaremayreachdifferentjudgmentsorresultsthanwouldothercourts,includingcourtswhereastockholderwouldotherwisechoosetobringtheaction,andsuchjudgmentsorresultsmaybemorefavorabletousthantoourstockholders.Ifacourtweretofindthischoice-of-forumprovisioninapplicableorunenforceableinanaction,wemayincuradditionalcostsassociatedwithresolvingsuchactioninotherjurisdictionswhichcouldadverselyaffectourbusiness,liquidity,financialcondition,and/orresultsofoperations.Anypersonorentitypurchasingorotherwiseacquiringorholdinganyinterestinsharesofourcapitalstockwillbedeemedtohavenoticeofandconsentedtotheprovisionsofourby-lawsdescribedabove.

GeneralRisksInternationaloperations,worldwideandregionaleconomictrendsandfinancialmarketconditions,

geopoliticaluncertainty,interestratefluctuations,orothergovernmentalrulesandregulationsRisksassociatedwithinternationaloperations,anyofwhichcouldhaveamaterialadverseeffectonour

business,liquidity,financialcondition,and/orresultsofoperations,include:

• changesinlocalpolitical,economic,social,andlaborconditions;• potentialdisruptionfromwarsandmilitaryconflicts,includingRussia’sinvasionofUkraine,terrorism,

kidnapping,anddrug-relatedorothertypesofviolence;• restrictionsonforeignownershipandinvestmentsoronrepatriationofcashearnedincountries

outsidetheU.S.;• importandexportrequirementsandborderaccessibility;• protectionisttradepolicies,sanctions,andtariffs;• currencyexchangeratefluctuations;• alessdevelopedandlesscertainlegalandregulatoryenvironmentinsomecountries,which,among

otherthings,cancreateuncertaintyregardingcontractenforcement,intellectualpropertyrights,privacyobligations,realpropertyrights,andliabilityissues;and

• inadequatelevelsofcompliancewithapplicabledomesticandforeignanti-briberyandanti-corruptionlaws,includingtheForeignCorruptPracticesAct.

Unfavorableglobalorregionaleconomicconditions,includingeconomicslowdownorrecessionandthedisruption,volatility,andtighteningofcreditandcapitalmarkets,aswellasunemployment,taxincreases,governmentalspendingcuts,orcontinuinghighlevelsofinflation,couldaffectconsumerspendingpatternsand



purchasesofourproducts.Thesecouldalsocreateorexacerbatecreditissues,cashflowissues,andotherfinancialhardshipsforusandoursuppliers,distributors,retailers,andconsumers.Theinabilityofsuppliers,distributors,andretailerstoaccessliquiditycouldimpactourabilitytoproduceanddistributeourproducts.

Wearealsoexposedtorisksassociatedwithinterestratefluctuations.Wecouldexperiencechangesinourabilitytomanagefluctuationsininterestratesand,accordingly,therecanbenoassurancethatwewillbesuccessfulinreducingthoserisks.

Wecouldalsobeaffectedbynationalizationofourinternationaloperations,unstablegovernments,unfamiliarorbiasedlegalsystems,intergovernmentaldisputesoranimusagainsttheU.S.AnydeterminationthatouroperationsoractivitiesdidnotcomplywithapplicableU.S.orforeignlawsorregulationscouldresultintheimpositionoffinesandpenalties,interruptionsofbusiness,terminationsofnecessarylicensesandpermits,andotherlegalandequitablesanctions.

DamagetoourreputationThesuccessofourbrandsdependsuponthepositiveimagethatconsumershaveofthosebrandsand

maintainingagoodreputationiscriticaltosellingourbrandedproducts.Ourreputationcouldalsobeimpactednegativelybypublicperception,adversepublicity(whetherornotvalid,suchasthesimilarityofthenameofcertainofourbrandsortrademarksandatypeofvirus),negativecommentsinsocialmedia,orourresponsesrelatingto:

• aperceivedfailuretomaintainhighethicalstandardsandresponsibleoperatingpracticestoachievebusinessgoalsforallouroperationsandactivities,includingthoserelatedtoourESGandDEIstrategies,initiatives,andtargetsaswellasassociatedreportingregulations,standards,frameworks,andratings;

• aperceivedfailuretoaddressconcernsrelatingtothequality,safety,orintegrityofourproducts,includingfromcontamination,whetherarisingaccidentallyorthroughdeliberatethird-partyaction;

• allegationsthatwe,orpersonscurrentlyorformerlyassociatedwithus,haveviolatedapplicablelawsorregulations,includingbutnotlimitedtothoserelatedtosafety,employment,discrimination,harassment,whistle-blowing,privacy,corporatecitizenship,improperbusinesspractices,orcyber-security;

• ourenvironmentalimpact,includinguseofagriculturalmaterials,packaging,waterandenergyuse,andwastemanagement;or

• effortsthatareperceivedasinsufficienttopromotetheresponsibleuseofalcoholorcannabis.

Failuretocomplywithapplicablelawsandregulations,maintainaneffectivesystemofinternalcontrols,provideaccurateandtimelyfinancialstatementinformation,orprotectourinformationsystemsagainstserviceinterruptions,misappropriationofdata,orbreachesofsecurity,couldalsohurtourreputation.Damagetoourreputationorlossofconsumerconfidenceinourproductsforanyoftheseorotherreasonscouldresultindecreaseddemandforourproductsandcouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations,aswellasrequireadditionalresourcestorebuildourreputation,competitiveposition,andbrandequityandrenewinvestorconfidence.

CompetitionWeoperateinahighlycompetitiveindustry,andoursalesandprofitabilitycouldbenegativelyaffectedby

numerousfactorsincluding:

• ourinabilitytomaintainorincreaseprices;• newentrantsinourmarketorcategories;• theconsolidationofdistributors,wholesalers,retailers,andsuppliers;• thedecisionofwholesalers,retailers,orconsumerstopurchasecompetitors’productsinsteadofours;• ageneraldeclineinbeveragealcoholconsumptionduetoconsumerdietarypreferencechangesor

consumerssubstitutinglegalizedmarijuanaorothersimilarproductsinlieuofbeveragealcohol;or• pricing,purchasing,financing,operational,advertising,orpromotionaldecisionsmadebywholesalers,

stateandotherlocalagencies,andretailerswhichcouldaffecttheirsupplyof,orconsumerdemandfor,ourproducts.



Ourcontinuedsuccessalsodependsonourabilitytoattractandretainahigh-qualityanddiverseworkforceinacompetitiveenvironmentfortalent.Wecouldalsoexperiencehigherthanexpectedselling,general,andadministrativeexpensesifwefinditnecessarytoincreasethenumberofourpersonnelorouradvertisingormarketingexpenditurestomaintainourcompetitiveposition,duetoemployeeturnoverincludingasaresultoftheongoing“greatresignation”occurringintheU.S.economy,orforotherreasons.Wecannotguaranteethatwewillbeabletoincreaseourpricestopassalongtoourcustomersanyincreasedcostsweincur.

Intangibleassets,suchasgoodwillandtrademarksWehaveasignificantamountofintangibleassetssuchasgoodwillandtrademarksandmayacquiremore

intangibleassetsinthefuture.Intangibleassetsaresubjecttoaperiodicimpairmentevaluationunderapplicableaccountingstandards.Thewrite-downofanyoftheseintangibleassetscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Changestotaxlaws,fluctuationsinoureffectivetaxrate,accountingfortaxpositions,theresolutionoftaxdisputes,andchangestoaccountingstandards,elections,assertions,orpolicies

Changestofederal,state,provincial,local,orforeigntaxlaws,couldresultinincreasedtaxesonourproducts,business,customers,orconsumers.Variousproposalstoincreasetaxesonbeveragealcoholproductshavebeenmadeatthefederalandstatelevelsoratothergovernmentalbodiesinrecentyears.Federal,state,provincial,local,orforeigngovernmentalentitiesmayconsiderincreasingtaxesuponbeveragealcoholproductsastheyexploreavailablealternativesforraisingfunds,includingtooffsetbudgetorotherdeficits.

Inaddition,significantjudgmentisrequiredtodetermineoureffectivetaxrateandevaluateourtaxpositions.Ourprovisionforincometaxesincludesaprovisionforuncertaintaxpositions.Fluctuationsinfederal,state,local,andforeigntaxes,orachangetouncertaintaxpositions,includingrelatedinterestandpenalties,mayimpactoureffectivetaxrateandourfinancialresults.Whentaxmattersarise,severalyearsmayelapsebeforesuchmattersareauditedandfinallyresolved.Unfavorableresolutionofanytaxmattercouldincreaseoureffectivetaxrateandresolutionofataxissuemayrequiretheuseofcashintheyearofresolution.

U.S.taxchangesorchangesinhowinternationalcorporationsaretaxed,includingchangesinhowexistingtaxlawsareinterpretedorenforced,orchangestoaccountingstandards,elections,orassertionsaswellasouraccountingpoliciescouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Cashdividendsandsharerepurchasesaresubjecttoanumberofuncertainties,andmayaffectthepriceofourcommonstock

Ourcapitalallocationstrategycontemplatesquarterlycashdividendsandperiodicsharerepurchasesunderoursharerepurchaseprogram.Wefundourcashdividendsandsharerepurchasesthroughacombinationofcashflowfromoperations,borrowings,anddivestitureproceeds.However,wearenotrequiredtodeclaredividendsortomakeanysharerepurchasesunderoursharerepurchaseprogram.Wemaydiscontinue,limit,suspend,increase,ordelayourdividendsandsharerepurchasesatanytimewithoutpriornotice.Evenifnotdiscontinued,theamountofsuchdividendsandrepurchasesmaybechanged,andtheamount,timing,andfrequencyofsuchdividendsandrepurchasesmayvaryfromhistoricalpracticeorfromourstatedexpectations.DecisionswithrespecttodividendsandsharerepurchasesaresubjecttothediscretionofourBoardofDirectorsandwillbebasedonavarietyoffactors.Importantfactorsthatcouldcauseustodiscontinue,limit,suspend,increase,ordelayourcashdividendsorsharerepurchasesincludemarketconditions,thepriceofourcommonstock,thenatureandtimingofotherinvestmentopportunities,changesinourbusinessstrategy,thetermsofourfinancingarrangements,ouroutlookastoourabilitytoobtainfinancingatattractiverates,theimpactonourcreditratings,andtheavailabilityofcash.Thereductionoreliminationofourcashdividend,orlongersuspensionoreliminationofoursharerepurchaseprogramcouldadverselyaffectthemarketpricesofourcommonstock.Additionally,therecanbenoassurancethatanysharerepurchaseswillenhancestockholdervaluebecausethemarketpricesofourcommonstockmaydeclinebelowthelevelsatwhichwerepurchasedsharesofcommonstock,andshort-termstockpricefluctuationscouldreducetheprogram’seffectiveness.



Item2.Properties

Weoperatebreweries,wineries,distilleries,andbottlingplants,manyofwhichincludewarehousinganddistributionfacilitiesonthepremises,andthroughajointventure,weoperateaglassproductionplant.Inadditiontoourprincipalphysicalpropertiesdescribedbelow,certainofourbusinessesmaintainofficespaceforsalesandsimilaractivitiesandoffsitewarehouseanddistributionfacilitiesinavarietyofgeographiclocations.

OurcorporateheadquartersarelocatedinleasedofficesinVictor,NewYork.WeplantorelocateourcorporateheadquarterstoaleasedofficeinRochester,NewYorkinFiscal2024.OursegmentsalsomaintainleasedofficespacesinotherlocationsintheU.S.andinternationally.

Webelievethatourfacilities,takenasawhole,areingoodconditionandworkingorder.WithintheBeersegment,wehaveadequatecapacitytomeetourcurrentneedsandwehaveundertakenactivitiestoincreaseourproductioncapacitytoaddressouranticipatedfuturedemand.WithintheWineandSpiritssegment,wehaveadequatecapacitytomeetourneedsfortheforeseeablefuture.AsofFebruary28,2022,ourprincipalphysicalpropertiesbysegment,excludingCanopy,allofwhichareowned,consistof:

Beer WineandSpirits

Breweries

• NavaBreweryinNava,Coahuila,Mexico• ObregonBreweryinObregon,Sonora,Mexico

Productionfacility

• GlassPlantinNava,Coahuila,Mexico

Wineries

• GonzalesWineryinGonzales,California,U.S.• MissionBellWineryinMadera,California,U.S.• WoodbridgeWineryinAcampo,California,U.S.• KimCrawfordWineryinMarlborough,SouthIsland,NewZealand

Warehouse,distribution,andotherproductionfacilities

• LodiDistributionCenterinLodi,California,U.S.• PontassieveWineryinFlorence,Italy

WithinourWineandSpiritssegment,asofFebruary28,2022,weowned,leased,orhadinterestsinapproximately9,700acresofvineyardsinCalifornia(U.S.),6,700acresofvineyardsinNewZealand,and1,400acresofvineyardsinItaly.InFiscal2023,weacquiredtheLinguaFrancabusinesswhichincludedavineyardandaproductionfacilityinOregon(U.S.).Forfurtherinformationonthisacquisition,referto(i)“Overview”withinMD&Aand(ii)Note2.

Item3.LegalProceedings

ForinformationregardingLegalProceedings,seeRiskFactorsandNote16.

PARTI OTHERKEYINFORMATION TableofContents


Item5.MarketforRegistrant’sCommonEquity,RelatedStockholderMatters,andIssuerPurchasesofEquitySecurities

OurClassAStockandClassBStocktradeontheNYSEunderthesymbolsSTZandSTZ.B,respectively.ThereisnopublictradingmarketforourClass1Stock.AtApril14,2022,thenumberofholdersofrecordofourClassAStock,ClassBStock,andClass1Stockwere478,91,and18,respectively.

ForinformationregardingarecentdevelopmentrelatedtoaproposeddeclassificationofourClassBStock,dividends,andsharerepurchaseprograms,see(i)MD&Aand(ii)Note17.

Forinformationonsecuritiesauthorizedforissuanceunderourequitycompensationplans,seeSecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMattersunderItem12.ofthisForm10-K.

PARTII OTHERKEYINFORMATION TableofContents


Item7.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations

Introduction

Wehaveelectedtoomitdiscussionontheearliestofthethreeyearscoveredbytheconsolidatedfinancialstatementspresented.RefertoItem7.“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”and“LiquidityandCapitalResources”locatedinourForm10-KforthefiscalyearendedFebruary28,2021,filedonApril20,2021,forreferencetodiscussionofthefiscalyearendedFebruary29,2020,theearliestofthethreefiscalyearspresented.ThisMD&A,whichshouldbereadinconjunctionwithourFinancialStatements,isorganizedasfollows:

Overview.Thissectionprovidesageneraldescriptionofourbusiness,whichwebelieveisimportantinunderstandingtheresultsofouroperations,financialcondition,andpotentialfuturetrends.

Strategy.Thissectionprovidesadescriptionofourstrategyandadiscussionofrecentdevelopments,COVID-19andglobalsupplychainrelatedimpacts,andsignificantinvestments,acquisitions,anddivestitures.

Resultsofoperations.Thissectionprovidesananalysisofourresultsofoperationspresentedonabusinesssegmentbasis.Inaddition,abriefdescriptionofsignificanttransactionsandotheritemsthataffectthecomparabilityoftheresultsisprovided.

Liquidityandcapitalresources.Thissectionprovidesananalysisofourcashflows,outstandingdebt,liquidityposition,andcommitments.Includedintheanalysisofoutstandingdebtisadiscussionofthefinancialcapacityavailabletofundourongoingoperationsandfuturecommitments,aswellasadiscussionofotherfinancingarrangements.

Criticalaccountingpoliciesandestimates.Thissectionidentifiesaccountingpoliciesthatareconsideredimportanttoourresultsofoperationsandfinancialcondition,requiresignificantjudgment,andinvolvesignificantmanagementestimates.Oursignificantaccountingpolicies,includingthoseconsideredtobecriticalaccountingpolicies,aresummarizedinNote1.

Overview

Ourinternalmanagementfinancialreportingconsistsofthreebusinessdivisions:(i)Beer,(ii)WineandSpirits,and(iii)Canopyandwereportouroperatingresultsinfoursegments:(i)Beer,(ii)WineandSpirits,(iii)CorporateOperationsandOther,and(iv)Canopy.OurCanopyEquityMethodInvestmentmakesuptheCanopysegment.

IntheBeersegment,ourportfolioconsistsofhigh-endimportedbeerbrands,craftbeer,andABAs.Wehaveanexclusiveperpetualbrandlicensetoimport,market,andsellourMexicanbeerportfoliointheU.S.IntheWineandSpiritssegment,wesellaportfoliothatincludeshigher-margin,higher-growthwinebrandscomplementedbycertainhigher-endspiritsbrands.AmountsincludedintheCorporateOperationsandOthersegmentconsistofcostsofexecutivemanagement,corporatedevelopment,corporatefinance,corporategrowthandstrategy,humanresources,internalaudit,investorrelations,legal,publicrelations,andinformationtechnology,aswellasourinvestmentsmadethroughourcorporateventurecapitalfunction.AllcostsincludedintheCorporateOperationsandOthersegmentaregeneralcoststhatareapplicabletotheconsolidatedgroupandare,therefore,notallocatedtotheotherreportablesegments.AllcostsreportedwithintheCorporateOperationsandOthersegmentarenotincludedinourCODM’sevaluationoftheoperatingincome(loss)performanceoftheotherreportablesegments.Thebusinesssegmentsreflecthowouroperationsaremanaged,howresourcesareallocated,howoperatingperformanceisevaluatedbyseniormanagement,andthestructureofourinternalfinancialreporting.

PARTII ITEM7.MD&A TableofContents


Strategy

OurbusinessstrategyfortheBeersegmentfocusesonupholdingourleadershippositioninthehigh-endsegmentoftheU.S.beermarketthroughmaintenanceofleadingmargins,enhancementstoourresultsofoperationsandoperatingcashflow,andexploringnewavenuesforgrowth.ThisincludescontinuedfocusongrowingourbeerportfoliointheU.S.throughexpandingdistributionforkeybrands,includingwithintheDTCand3-tiereCommercechannels,aswellascontinuedexpansion,optimization,and/orconstructionactivitiesforourMexicobeeroperations.Additionally,inanefforttomorefullycompeteingrowingsectorsofthehigh-endsegmentoftheU.S.beermarket,wehaveleveragedourinnovationcapabilitiestocreatenewlineextensionsbehindcelebrated,trustedbrandsandpackageformatsthatmeetemergingneeds.

WehaveincreasedourproductioncapacityinMexicobyfourfoldsincethe2013acquisitionoftheimportedbeerbusiness.InearlyFiscal2022,wecompletedpartofaplannedexpansionattheObregonBrewery,increasingourproductioncapacitytoapproximately39millionhectoliters.Expansion,optimization,and/orconstructionactivitiescontinueunderourMexicoBeerProjectstoalignwithouranticipatedfuturegrowthexpectations.Atthistime,wehavesuspendedallMexicaliBreweryconstructionactivities,followinganegativeresultfromapublicconsultationheldinMexico.See“Capitalexpenditures”below.

OurbusinessstrategyfortheWineandSpiritssegmentfocusesongrowingindustry-leading,higher-endwineandspiritsbrandsthroughmarginimprovementsandcreationofoperatingefficiencies.Wefocusourinvestmentdollarson(i)buildingandrefreshingexistingbrandswithinourportfoliothroughconsumerinsights,sensoryexpertise,andinnovation,and(ii)refiningourportfoliothroughtargetedacquisitionsofhigher-margin,higher-growthwineandspiritsbrands.Werecentlyreorganizedthisbusinessintotwodistinctcommercialteams,onefocusedonourfinewineandcraftspiritsbrandsandtheotherfocusedonourmainstreamandpremiumbrands.Whileeachteamhasitsowndistinctstrategy,bothremainalignedtothegoalofacceleratingperformancebygrowingnetsalesandexpandingmargins.Additionally,wecontinuetostrengthenourleadershippositionandinvestinDTCand3-tiereCommercechannels.Inmarketswhereitisfeasible,weenteredintocontractualarrangementstoconsolidateourU.S.distributioninordertoobtaindedicateddistributorsellingresourceswhichfocusonourU.S.wineandspiritsportfoliotodriveorganicgrowth.ThisU.S.distributorcurrentlyrepresentsabout70%ofourbrandedwineandspiritsvolumeintheU.S.

Marketing,sales,anddistributionofourproductsareprimarilymanagedonageographicbasisallowingustoleverageleadingmarketpositions.Inaddition,marketdynamicsandconsumertrendsvaryacrosseachofourmarkets.WithinourprimarymarketintheU.S.,weofferarangeofbeveragealcoholproductsacrosstheimportedbeer,craftbeer,ABA,brandedwine,andspiritscategories,withgenerallyseparatedistributionnetworksutilizedfor(i)ourbeerportfolioand(ii)ourwineandspiritsportfolio.Theenvironmentforourproductsiscompetitiveineachofourmarkets.

WecomplementourstrategywithourinvestmentinCanopybyexpandingourportfoliointoadjacentcategories.Canopyisaleadingcannabiscompanywithoperationsincountriesacrosstheworld.Thisinvestmentisconsistentwithourlong-termstrategytoidentify,address,andstayaheadofevolvingconsumertrendsandmarketdynamics.OurstrategicrelationshipwithCanopyisdesignedtohelppositionittobesuccessfulincannabisproduction,branding,andintellectualproperty.

Weremaincommittedtoourlong-termfinancialmodelof:growingsales,expandingmargins,andincreasingcashflowinordertoachieveearningspersharegrowth,maintainourtargetednetleverageratio,anddeliverreturnstostockholdersthroughthepaymentofdividendsandperiodicsharerepurchases.OurresultsofoperationsandfinancialconditionhavebeenaffectedbyinflationandchangingpricesandweexpecttheseimpactstocontinueinFiscal2023.OurFiscal2023resultsofoperationscouldalsobeimpactedbyreductionsindiscretionaryincomeofconsumersavailabletopurchaseourproducts.Weintendtopassalongrisingcoststhroughincreasedsellingprices,subjecttonormalcompetitiveconditions.Inaddition,wecontinuetoidentifyongoingcostsavingsinitiatives,includingourcommodityhedgeprogram.However,therecanbenoassurancesthatwewillbeabletofullymitigaterisingcoststhroughincreasedsellingpricesand/orcostsavingsinitiatives.Furthermore,totheextentclimate-relatedevents,suchasthe2020U.S.wildfiresorthelatefrostinNewZealand,



continuetooccuroraccelerateinfutureperiods,itcouldhaveamaterialimpactonourresultsofoperationsandfinancialcondition.

RecentDevelopments

ClassBStockdeclassificationproposalInApril2022,wereceivedtheProposalwhichproposesthateachshareofClassBStockwouldbe

convertedinto1.35sharesofClassAStock.OurBoardofDirectorshasestablishedaSpecialCommitteetoevaluatetheProposal.AnydefinitiveagreementwithrespecttothepotentialtransactionmustbeapprovedbytheSpecialCommitteeaswellasourBoardofDirectors.Inaddition,pursuanttothetermsoftheProposal,anypotentialtransactionwouldrequiretheapprovalofholdersofamajorityofthesharesofourClassAStockthatdonotalsoholdsharesofClassBStock.

OtheracquisitionsDuringthefirstquarterofFiscal2023,wecompletedtheacquisitionsofotherbusinesses,consistingof

LinguaFranca,whichincludedacollectionofluxurywines,avineyard,andaproductionfacility,andtheremaining73%ownershipinterestinAustinCocktails,whichincludedaportfolioofsmallbatch,RTDcocktails.Thepurchasepriceforeachacquisitionincludesanearn-outbasedontheperformanceoftherespectivebrands.TheresultsofoperationsoftheseacquiredbusinesseswillbereportedintheWineandSpiritssegmentandwillbeincludedinourconsolidatedresultsofoperationsfromtheirrespectivedateofacquisition.

COVID-19andGlobalSupplyChainRelatedImpacts

COVID-19containmentmeasuresaffecteduspredominantlyinthefirsthalfofFiscal2021primarilyinthereductionof(i)depletionvolumeonourproductsintheon-premisebusinessduetobarandrestaurantclosuresand(ii)shipmentvolumerelatedtothereducedproductionactivityatourmajorbreweriesinMexicowhichwewereabletorectifyinthesecondhalfofFiscal2021.Theon-premisebusinesshashistoricallybeenabout10%to15%ofourdepletionvolumeforbeer,wine,andspirits.Ouron-premisedepletionvolumesforFiscal2022were,andinFiscal2023maycontinuetobe,impactedbyregionalCOVID-19caselevels,vaccineimmunizationrates,newCOVID-19variants,andvaccineefficacyagainstnewCOVID-19variants.Currently,ourbreweries,wineries,distilleries,andbottlingfacilitiesareopenandoperational.

Asreflectedinthediscussionbelow,wehaveseenconsumersshiftmoreoftheirtotalshoppingspendtoonlinechannelssincetheCOVID-19outbreak,whichhasledtoincreasedeCommercesales,includingDTC,forourbusiness.Fiscal2022wasimpactedbychallengeswithbothglobalsupplychainlogisticsandtransportationwhichcontributedtolowerproductinventorylevelsandhighercostofproductsold.Forexample,wineproducedinNewZealandandItalyandsubsequentlyshippedtotheU.S.fordistributioncontinuestobeaffectedbythelackofavailabilityandincreasedcostsofoceanfreightshippingcontainersandportdelayscausingincreasedstoragecharges.Inaddition,duringFiscal2022,weexperiencedabrownglasspurchasingshortage,whichimpactedcertainofourimportedbeerbrands.ThissupplyreturnedtonormallevelsinearlyFiscal2023.Totheextentthesecircumstancescontinuetooccuroraccelerateinfutureperiodsitcouldhaveamaterialimpactonourresultsofoperations.

InresponsetoCOVID-19,wehaveensuredourongoingliquidityandfinancialflexibilitythroughcashpreservationinitiatives,capitalmanagementadjustments,andcostcontrolmeasures.WehaveusedopportunitiestodefersomepaymentsincludingcertainpayrolltaxesundertheCARESActaffordedtousearlierinthepandemic.Wearenotabletoestimatethelong-termimpactofCOVID-19onourbusiness,financialcondition,resultsofoperations,and/orcashflow.Webelievewehavesufficientliquidityavailablefromoperatingcashflow,cashonhand,andavailabilityunderourrevolvingcreditfacility.Weexpecttohavecontinuedaccesstocapitalmarketsandtobeabletocontinuetoreturnvaluetostockholdersthroughdividendsandperiodicsharerepurchases.



Investments,Acquisitions,andDivestitures

BeersegmentBallastPointDivestitureInMarch2020,wesoldtheBallastPointcraftbeerbusiness,includinganumberofitsassociated

productionfacilitiesandbrewpubs.Accordingly,ourconsolidatedresultsofoperationsincludetheresultsofoperationsofourBallastPointcraftbeerbusinessthroughthedateofdivestiture.

WineandSpiritssegmentMyFavoriteNeighboracquisitionInNovember2021,weacquiredtheremaining65%ownershipinterestinMyFavoriteNeighbor,which

primarilyincludedtheacquisitionofgoodwill,trademarks,inventory,andproperty,plant,andequipment.TheresultsofoperationsofMyFavoriteNeighborarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.InApril2020,wemadeaninitialinvestmentinMyFavoriteNeighborthatwasaccountedforundertheequitymethod.Werecognizedourshareoftheirequityinearnings(losses)inourconsolidatedfinancialstatementsintheWineandSpiritssegmentuptothedateweacquiredtheremainingownershipinterest.TheMyFavoriteNeighborinvestmentandsubsequentacquisitionsupportedourstrategicfocusonconsumer-ledpremiumizationtrendsandmeetingtheevolvingneedsofourconsumers.

PaulMassonDivestitureInJanuary2021,wesoldthePaulMassonGrandeAmberBrandybrand,relatedinventory,andinterestsin

certaincontracts.Wereceivedcashproceedsof$267.4million,netofpost-closingadjustments.Thenetcashproceedswereusedforgeneralcorporatepurposes.Werecognizedanetgainof$58.4milliononthesaleofthebusinessprimarilyfortheyearendedFebruary28,2021.

WineandSpiritsDivestituresInJanuary2021,wesoldaportionofourwineandspiritsbusiness,includinglower-margin,lower-growth

wineandspiritsbrands,relatedinventory,interestsincertaincontracts,wineries,vineyards,offices,andfacilities.Wereceivednetcashproceedsof$538.4million,netofpost-closingadjustments.Inaddition,wehavethepotentialtoearnanincremental$250millionofcontingentconsiderationifcertainbrandperformancetargetsaremetoveratwo-yearperiodafterclosing.

InJanuary2021,wealsosoldtheNewZealand-basedNobiloWinebrandandcertainrelatedassets.Wereceivedcashproceedsof$129.0million,netofpost-closingadjustments.

ThecashproceedsfromtheWineandSpiritsDivestitureswereutilizedtoreduceoutstandingdebtandforothergeneralcorporatepurposes.Werecognizedanetlossof$33.6millionontheWineandSpiritsDivestituresprimarilyfortheyearendedFebruary28,2021.

ConcentrateBusinessDivestitureInDecember2020,wesoldcertainbrandsusedinourconcentratesandhigh-colorconcentratebusiness,

andcertainrelatedintellectualproperty,inventory,interestsincertaincontracts,andotherassets.

ThefollowingpresentsselectedfinancialinformationincludedinourhistoricalconsolidatedfinancialstatementsthatarenolongerpartofourconsolidatedresultsofoperationsfollowingthePaulMassonDivestiture,WineandSpiritsDivestitures,andConcentrateBusinessDivestiture:

Fiscal2021

(inmillions)

Netsales $ 642.3Grossprofit $ 252.9

Marketing(1) $ 14.5

(1) Includedinselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperations.



Copper&KingsacquisitionInSeptember2020,weacquiredtheremainingownershipinterestinCopper&Kingswhichprimarily

includedtheacquisitionofinventoryandproperty,plant,andequipment.Thisacquisitionincludedacollectionoftraditionalandcraftbatch-distilledAmericanbrandiesandotherselectspirits.TheresultsofoperationsofCopper&KingsarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

EmpathyWinesacquisitionInJune2020,weacquiredEmpathyWines,whichprimarilyincludedtheacquisitionofgoodwill,

trademarks,andinventory.Thisacquisition,whichincludedadigitally-nativewinebrand,strengthenedourpositionintheDTCandothereCommercemarkets.TheresultsofoperationsofEmpathyWinesarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

CorporateOperationsandOthersegmentCorporateinvestmentInFebruary2022,wesoldaninvestmentmadethroughourcorporateventurecapitalfunction.We

recognizedourshareoftheirequityinearnings(losses)inourconsolidatedfinancialstatementsintheCorporateOperationsandOthersegmentuptothedatewesoldourownershipinterest.

CanopysegmentCanopyinvestmentInMay2020,weexercisedtheNovember2017CanopyWarrantsatanexercisepriceofC$12.98per

warrantshareforC$245.0million,or$173.9million.

Foradditionalinformationontheserecentdevelopments,investments,acquisitions,anddivestitures,refertoNotes2,7,10,and17.

ResultsofOperations

FinancialHighlights

ReferencestoorganicthroughoutthefollowingdiscussionexcludetheimpactofthebrandsdivestedinJanuary2021,asappropriate.

ForFiscal2022comparedwithFiscal2021:

• Ourresultsofoperationswerenegativelyimpactedby(i)anunrealizednetlossfromthechangesinfairvalueofourinvestmentinCanopyascomparedwiththeunrealizednetgaininFiscal2021,(ii)animpairmentoflong-livedassetsforFiscal2022inconnectionwithcertainassetsattheMexicaliBrewery,(iii)adecreaseinWineandSpiritsnetsalesduelargelytothedivestitures,and(iv)anincreaseinoperationalcostswithintheBeersegment,partiallyoffsetbyanincreaseinBeernetsales,aswellasadecreaseinequityinlossesfromCanopy’sresults.

• Netsalesincreased2%asanincreaseinBeernetsales,drivenpredominantlybyshipmentvolumegrowthandfavorableimpactfrompricing,wasoffsetbythedecreaseinWineandSpiritsnetsales,duelargelytothedivestitures.

• Operatingincomedecreased16%largelydueto(i)theimpairmentoflong-livedassets,(ii)thedecreaseinWineandSpiritsnetsales,(iii)anincreaseincostofproductsoldwithintheBeersegment,and(iv)anincreaseinmarketingspendfortheBeersegment,drivenbyaplannedincreasetosupportthegrowthofourbrands,partiallyoffsetbytheincreaseinBeernetsales.



• Netincome(loss)attributabletoCBIanddilutednetincome(loss)percommonshareattributabletoCBIdecreasedlargelyduetotheitemsdiscussedabove,partiallyoffsetbylowerprovisionforincometaxes.

ComparableAdjustments

ManagementexcludesitemsthataffectcomparabilityfromitsevaluationoftheresultsofeachoperatingsegmentastheseComparableAdjustmentsarenotreflectiveofcoreoperationsofthesegments.Segmentoperatingperformanceandtheincentivecompensationofsegmentmanagementareevaluatedbasedoncoresegmentoperatingincome(loss)whichdoesnotincludetheimpactoftheseComparableAdjustments.

AsmorefullydescribedhereinandintherelatedNotes,theComparableAdjustmentsthatimpactedcomparabilityinoursegmentresultsforeachperiodareasfollows:

Costofproductsold

Netgain(loss)onundesignatedcommodityderivativecontracts $ 109.9 $ 25.1

Netflowthroughofreservedinventory 12.1 —

Settlementsofundesignatedcommodityderivativecontracts (35.9) 31.6

Strategicbusinessdevelopmentcosts (2.6) (29.8)

Recoveryof(losson)inventorywrite-down (1.0) (70.4)

Flowthroughofinventorystep-up (0.1) (0.4)

COVID-19incrementalcosts — (7.6)

Accelerateddepreciation — (0.1)

Totalcostofproductsold 82.4 (51.6)

Selling,general,andadministrativeexpenses

Transitionservicesagreementsactivity (19.2) 0.4

Transaction,integration,andotheracquisition-relatedcosts (1.4) (7.6)

Restructuringandotherstrategicbusinessdevelopmentcosts 0.6 (23.9)

Netgain(loss)onforeigncurrencyderivativecontracts — (8.0)

Impairmentofintangibleassets — (6.0)

COVID-19incrementalcosts — (4.8)

Othergains(losses) (2.3) 14.3

Totalselling,general,andadministrativeexpenses (22.3) (35.6)

Impairmentofbreweryconstructioninprogress (665.9) —

Impairmentofassetsheldforsale — (24.0)

Gain(loss)onsaleofbusiness 1.7 14.2

ComparableAdjustments,Operatingincome(loss) $ (604.1) $ (97.0)

Income(loss)fromunconsolidatedinvestments $ (1,488.2) $ 265.2

Fiscal2022

Fiscal2021

(inmillions)

CostofproductsoldUndesignatedcommodityderivativecontractsNetgain(loss)onundesignatedcommodityderivativecontractsrepresentsanetgain(loss)fromthe

changesinfairvalueofundesignatedcommodityderivativecontracts.Thenetgain(loss)isreportedoutsideofsegmentoperatingresultsuntilsuchtimethattheunderlyingexposureisrecognizedinthesegmentoperatingresults.Atsettlement,thenetgain(loss)fromthechangesinfairvalueoftheundesignatedcommodityderivativecontractsisreportedintheappropriateoperatingsegment,allowingtheresultsofouroperatingsegmentsto



reflecttheeconomiceffectsofthecommodityderivativecontractswithouttheresultingunrealizedmarktofairvaluevolatility.

NetflowthroughofreservedinventoryWesoldreservedinventorypreviouslywrittendowninFiscal2021followingthe2020U.S.wildfires.

StrategicbusinessdevelopmentcostsWerecognizedcostsprimarilyinconnectionwithlossesonwrite-downsofexcessinventoryandcontract

terminationsresultingfromourinitiativestooptimizeourportfolio,gainefficiencies,andreduceourcoststructurewithintheWineandSpiritssegment.

Recoveryof(losson)inventorywrite-downWerecognizedalossprimarilyonthewrite-downofbulkwineinventoryandcertaingrapesasaresultof

smokedamagesustainedduringthe2020U.S.wildfires(Fiscal2021).

COVID-19incrementalcostsWerecognizedcostsforincrementalwagesandhazardpaymentstoemployees,purchasesofpersonal

protectiveequipment,morefrequentandthoroughcleaningandsanitizationofourfacilities,andcostsassociatedwiththeunusedbeerkegreimbursementprogramwithdistributors.

Selling,general,andadministrativeexpensesTransitionservicesagreementsactivityWerecognizedcostsinconnectionwithtransitionservicesagreementsrelatedtotheWineandSpirits

Divestitures(Fiscal2022).

Transaction,integration,andotheracquisition-relatedcostsWerecognizedtransaction,integration,andotheracquisition-relatedcostsinconnectionwithour

investments,acquisitions,anddivestitures.

RestructuringandotherstrategicbusinessdevelopmentcostsWerecognizedcostsprimarilyinconnectionwithinitiativestooptimizeourportfolio,gainefficiencies,and

reduceourcoststructurewithintheWineandSpiritssegment(Fiscal2021).

Netgain(loss)onforeigncurrencyderivativecontractsWerecognizedanetlossprimarilyinconnectionwiththesettlementofforeigncurrencyforward

contractsenteredintotofixtheU.S.dollarcostoftheMay2020CanopyInvestment.

ImpairmentofintangibleassetsWerecognizedtrademarkimpairmentlossesrelatedtoourBeersegment’sFourCornerscraftbeer

trademarkasset.Foradditionalinformation,refertoNote7.

COVID-19incrementalcostsWerecognizedcostsforpaymentstothird-partygeneralcontractorstomaintaintheirworkforcefor

expansionactivitiesattheObregonBreweryandrecognizedcostsforincrementalwagesandhazardpaymentstoemployees.

Othergains(losses)Werecognizedothergains(losses)primarilyinconnectionwith(i)againrecognizedonthe

remeasurementofourpreviouslyheldequityinterestinMyFavoriteNeighbortotheacquisition-datefairvalue(Fiscal2022),(ii)apropertytaxsettlement(Fiscal2022),(iii)anadjustmenttounderstatedexcisetaxaccrualsprimarilyrelatedtoapriorperiodacquisition(Fiscal2022),(iv)netincrease(decrease)inestimatedfairvalueofcontingentliabilitiesassociatedwithpriorperiodacquisitions(Fiscal2022,Fiscal2021),and(v)againrecognizedonthesaleofavineyard(Fiscal2021).



ImpairmentofbreweryconstructioninprogressWerecognizedanimpairmentoflong-livedassetsinconnectionwithcertainassetsattheMexicali

Brewery.Foradditionalinformation,refertoNote7.

ImpairmentofassetsheldforsaleWerecognizedimpairmentsoflong-livedassetsheldforsaleinconnectionwiththeWineandSpirits

DivestituresandtheConcentrateBusinessDivestiture.Foradditionalinformation,refertoNote7.

Gain(loss)onsaleofbusinessWerecognizedanetgain(loss)primarilyonthecompletionofthePaulMassonDivestitureandtheWine

andSpiritsDivestitures.Foradditionalinformation,refertoNote2.

Income(loss)fromunconsolidatedinvestmentsWerecognizedincome(loss)primarilyfrom(i)anunrealizedgain(loss)fromthechangesinfairvalueof

oursecuritiesmeasuredatfairvalue,(ii)equityinearnings(losses)fromCanopy’sresults,includingequityinlossesfromCanopylargelyrelatedtocostsdesignedtoimprovetheirorganizationalfocus,streamlineoperations,andalignproductioncapabilitywithprojecteddemand,and(iii)anetgainrecognizedfromthesaleofanequitymethodinvestmentmadethroughourcorporateventurecapitalfunction(Fiscal2022).Foradditionalinformation,refertoNotes7and10.

BusinessSegments

Netsales

Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)

Beer $ 6,751.6 $ 6,074.6 $ 677.0 11%

WineandSpirits:

Wine 1,819.3 2,208.4 (389.1) (18%)

Spirits 249.8 331.9 (82.1) (25%)

TotalWineandSpirits 2,069.1 2,540.3 (471.2) (19%)

Canopy 444.3 378.6 65.7 17%

Consolidationandeliminations (444.3) (378.6) (65.7) (17%)

Consolidatednetsales $ 8,820.7 $ 8,614.9 $ 205.8 2%

Beersegment

Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions,brandedproduct,24-pack,12-ouncecaseequivalents)

Netsales $ 6,751.6 $ 6,074.6 $ 677.0 11%

Shipments 364.2 334.6 8.8%

Depletions 8.9%

TheincreaseinBeernetsalesislargelydueto(i)$534.8millionofvolumegrowthwithinourMexicanbeerportfolio,whichbenefitedfromcontinuedconsumerdemandandareturntoon-premise,includingbarsandrestaurants,and(ii)$182.4millionoffavorableimpactfrompricinginselectmarketswithinourMexicanbeerportfolio,partiallyoffsetby$45.5millionofunfavorableproductmixprimarilyfromanincreaseinon-premisekegsalesandashiftinpackagetypes.Productinventoriesinour3-tierdistributionchannelreturnedtomorenormallevelsbytheendofFiscal2022.



WineandSpiritssegment

Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions,brandedproduct,9-litercaseequivalents)

Netsales $ 2,069.1 $ 2,540.3 $ (471.2) (19%)

Shipments

Total 29.9 45.0 (33.6%)

Organic(1)(2) 29.9 29.1 2.7%

U.S.Domestic 26.3 41.5 (36.6%)

OrganicU.S.Domestic(1)(2) 26.3 25.8 1.9%

Depletions(1)(2) (5.8%)

(1) IncludesanadjustmenttoremovevolumeassociatedwiththeWineandSpiritsDivestituresfortheperiodMarch1,2020,throughJanuary4,2021.

(2) IncludesanadjustmenttoremovevolumeassociatedwiththePaulMassonDivestiturefortheperiodMarch1,2020,throughJanuary11,2021.

ThedecreaseinWineandSpiritsnetsalesisdueto$642.3millionfromthedivestitures,partiallyoffsetbya$171.1millionincreaseinorganicnetsales.Theincreaseinorganicnetsalesisdrivenby(i)$62.7millionincreasefromfavorableproductmixshift,(ii)$40.3millionoffavorableimpactfrompricingdrivenbydistributortransitionandpriceincreases,(iii)$37.7millionincreaseprimarilyfrombulkwineandnon-brandednetsales,and(iv)$28.2millionincreaseinbrandedwineandspiritsshipmentvolumeattributabletoourcontinuedfocusongrowingourbrandsandanoverlapoflowershipmentvolumesinFiscal2021.Theincreaseinorganicnetsaleswasnegativelyimpactedbyglobalsupplychainlogisticsandroutetomarketchanges.ForFiscal2022,theorganicU.S.shipmentvolumewasaheadofthedepletionvolumelargelydrivenbyachallengingoverlapduetoconsumerpantryloadingbehaviorinthefirsthalfofFiscal2021andtimingrelatedtotransitionactivitieswithdistributorsthatoccurredattheendofFiscal2021.

Canopysegment

OurownershipinterestinCanopyallowsustoexercisesignificantinfluence,butnotcontrol,and,therefore,weaccountforourinvestmentinCanopyundertheequitymethod.AmountsincludedfortheCanopysegmentrepresent100%ofCanopy’sreportedresultsonatwo-monthlag.Accordingly,werecognizedourshareofCanopy’searnings(losses)fromJanuarythroughDecember2021,inourFiscal2022resultsandJanuarythroughDecember2020,inourFiscal2021results.Althoughweownlessthan100%oftheoutstandingsharesofCanopy,100%ofitsresultsareincludedandsubsequentlyeliminatedtoreconciletoourconsolidatedfinancialstatements.See“Income(loss)fromunconsolidatedinvestments”belowforadiscussionofCanopy’snetsales,grossprofit(loss),selling,general,andadministrativeexpenses,andoperatingincome(loss).

GrossprofitFiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)

Beer $ 3,677.0 $ 3,402.4 $ 274.6 8%

WineandSpirits 947.9 1,115.2 (167.3) (15%)

Canopy (18.6) (14.1) (4.5) (32%)

Consolidationandeliminations 18.6 14.1 4.5 32%

ComparableAdjustments 82.4 (51.6) 134.0 NM

Consolidatedgrossprofit $ 4,707.3 $ 4,466.0 $ 241.3 5%



TheincreaseinBeerisprimarilydueto$301.3millionofshipmentvolumegrowthandthe$182.4millionfavorableimpactfrompricing,partiallyoffsetby$200.1millionofhighercostofproductsold.Thehighercostofproductsoldispredominantlyduetohigheroperationalcostsincluding(i)a$78.2millionincreaseinobsolescenceprimarilyfromexcessinventoryofhardseltzerslargelyresultingfromaslowdownintheoverallcategory,(ii)$66.3millionofbrewerycostsprimarilydrivenbyhighercompensationandbenefits,largelyresultingfromincreasedheadcounttosupportthegrowthofourMexicanbeerportfolio,andincreasedutilitycosts,(iii)$61.5millionofhighermaterialcosts,includingpallets,cartons,steel,corn,andaluminum,and(iv)$44.3millionofhigherdepreciation,partiallyoffsetby(i)$47.8millionoffavorablefixedcostabsorptionprimarilyasaresultofincreasedproductionlevelsforFiscal2022and(ii)$20.1millionofforeigncurrencytransactionalbenefits.

ThedecreaseinWineandSpiritsisduetoadecreaseof$252.9millionfromthedivestitures,partiallyoffsetbya$85.6millionincreaseinorganicgrossprofit.Theincreaseinorganicgrossprofitisattributableto(i)the$40.3millionoffavorablepricing,(ii)$35.7millionincreasefromfavorableproductmixshift,and(iii)$9.6millionprimarilyrelatedtofavorablebulkwineandnon-brandednetsales,partiallyoffsetby$2.9millionofhighercostofproductsold.Theincreasedcostofproductsoldwaslargelyattributableto$29.0millionofincreasedtransportationcostsresultingfromglobalsupplychainchallenges,includinginflation,androutetomarketchanges,partiallyoffsetby(i)$16.5millionofnetfavorablefixedcostabsorptionand(ii)approximately$10millionoflowergraperawmaterialsandothercostsavingsinitiatives.ThenetfavorablefixedcostabsorptioninFiscal2022primarilyresultedfromtheimpactofthe2020U.S.wildfires,partiallyoffsetbydecreasedproductionlevelsatcertainfacilitiesasaresultofalatefrostinNewZealandwhichreducedthegrapeharvest.

Grossprofitasapercentofnetsalesincreasedto53.4%forFiscal2022comparedwith51.8%forFiscal2021.Thiswaslargelyduetoapproximately(i)150basispointsoffavorablechangeinComparableAdjustments,(ii)95basispointsoffavorableimpactfromthelower-marginwineandspiritsdivestitures,and(iii)95basispointsoffavorableimpactfromBeerpricinginselectmarkets,partiallyoffsetbyapproximately220basispointsofratedeclinefromcostofproductsoldwithintheBeersegment,drivenbytheincreaseinoperationalcosts.


Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)

Beer $ 973.7 $ 908.1 $ 65.6 7%

WineandSpirits 477.2 492.8 (15.6) (3%)

CorporateOperationsandOther 238.2 228.6 9.6 4%

Canopy 611.5 1,481.9 (870.4) (59%)

Consolidationandeliminations (611.5) (1,481.9) 870.4 59%

ComparableAdjustments 22.3 35.6 (13.3) (37%)

Consolidatedselling,general,andadministrativeexpenses $ 1,711.4 $ 1,665.1 $ 46.3 3%

TheincreaseinBeerisprimarilydueto$35.3millionofhighermarketingspendand$29.3millionofincreasedgeneralandadministrativeexpenses.ThehighermarketingspendwasdrivenbyourplannedinvestmentstosupportthegrowthofourMexicanbeerportfoliothroughmediaandeventsponsorships.Theincreaseingeneralandadministrativeexpenseswasprimarilydrivenbyincreasedlegalexpense,increaseddepreciationandothercostsrelatedtotheimplementationofanewERP,unfavorableforeigncurrencytransactionlosses,andhighercompensationandbenefits.

ThedecreaseinWineandSpiritsisprimarilydueto$14.0millionoflowermarketingspendasaresultofthedivestitures.



TheincreaseinCorporateOperationsandOtherislargelyduetoanapproximate(i)$12millionincreaseinconsultingandthird-partyservices,largelyrelatedtostrategicinitiatives,(ii)$5millionincreaseintravelascomparedtoreducedtravelinFiscal2021resultingfromCOVID-19containmentmeasures,and(iii)$4millionincreaseindepreciationexpense,primarilyrelatedtotheimplementationofanewERP,partiallyoffsetbyanapproximate(i)$6milliondecreaseincompensationandbenefits,primarilyrelatedtothereversalofstock-basedcompensationforaperformanceawardtiedtoearningsfromourinvestmentinCanopythatdidnotachieveathresholdlevelofperformanceand(ii)$5millionoffavorableforeigncurrencyimpact.

Selling,general,andadministrativeexpensesasapercentofnetsalesincreasedto19.4%forFiscal2022ascomparedwith19.3%forFiscal2021.Theincreaseisdrivenlargelybyapproximately35basispointsofrategrowthinconnectionwiththewineandspiritsdivestitures,largelyoffsetbyapproximately15pointsofratedeclineintheBeersegmentastheincreaseinBeernetsalesexceededtheincreaseinselling,general,andadministrativeexpensesandadecreaseintheWineandSpiritssegmentselling,general,andadministrativeexpenses,whichresultedinapproximately10basispointsofratedecline.

Operatingincome(loss)Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)

Beer $ 2,703.3 $ 2,494.3 $ 209.0 8%

WineandSpirits 470.7 622.4 (151.7) (24%)

CorporateOperationsandOther (238.2) (228.6) (9.6) (4%)

Canopy (630.1) (1,496.0) 865.9 58%

Consolidationandeliminations 630.1 1,496.0 (865.9) (58%)

ComparableAdjustments (604.1) (97.0) (507.1) NM

Consolidatedoperatingincome(loss) $ 2,331.7 $ 2,791.1 $ (459.4) (16%)

TheincreaseinBeerislargelyattributabletothestrongshipmentvolumegrowthwithinourMexicanbeerportfolioandfavorablepricingimpact,partiallyoffsetbyhigheroperationalcosts,marketingspend,andgeneralandadministrativeexpenses,asdiscussedabove.

ThedecreaseinWineandSpiritsislargelyattributabletothedivestitures,partiallyoffsetbytheincreaseinorganicnetsales,ledbyfavorableimpactsfromproductmixshiftandpricing,bulkwinenetsales,andbrandedwineandspiritsshipmentvolumegrowth.

Aspreviouslydiscussed,theCorporateOperationsandOtherincreaseinoperatinglossislargelyduetotheincreasesinconsultingandthird-partyservicesandtravelexpenseascomparedtoFiscal2021,partiallyoffsetbyfavorableimpactsfromthereversalofstock-basedcompensationandforeigncurrency.



Income(loss)fromunconsolidatedinvestmentsGeneral

Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)

Unrealizednetgain(loss)onsecuritiesmeasuredatfairvalue $ (1,644.7) $ 802.0 $ (2,446.7) NMEquityinearnings(losses)fromCanopyandrelatedactivities(1) (73.6) (679.0) 605.4 89%Equityinearnings(losses)fromotherequitymethodinvestees 31.8 27.3 4.5 16%

Netgain(loss)onsaleofunconsolidatedinvestment(2) 51.0 — 51.0 NM

$ (1,635.5) $ 150.3 $ (1,785.8) NM

(1) Includes$82.4millionand$359.6millionofcostsdesignedtoimprovetheirorganizationalfocus,streamlineoperations,andalignproductioncapabilitywithprojecteddemandforFiscal2022andFiscal2021,respectively.

(2) Representsthesaleofourpreviouslyheldequityinterestinaninvestmentmadethroughourcorporateventurecapitalfunction.

Foradditionalinformationregardingourequitymethodinvestments,refertoNote10.

Canopysegment

Canopynetsalesincreasedto$444.3millionforFiscal2022from$378.6millionforFiscal2021.Thisincreaseof$65.7million,or17%,isprimarilyattributabletoanincreaseinotherconsumerproductsalesandCanadianTHCrecreationalsales.Theincreaseinotherconsumerproductsaleslargelyresultedfrom(i)salesofsportsnutritionbeveragesandmixesbyBioSteelSportsNutritionInc.,astheyexpandedtheirU.S.distributionandintroducednewRTDproductsand(ii)salesofvaporizersbyStorz&BickelGmbH&Co.KGalsoincreasedduetocontinuedU.S.distributionexpansion,partiallyoffsetbysupplychainchallengesandshippingrestrictions.CanadianTHCrecreationalsalesbenefitedfromCanopy’sFiscal2022acquisitionsincludingtheSupremeCannabisCompany,Inc.andAVCannabisInc.(“AceValley”),partiallyoffsetbylowersupplyofhighdemandproductsandunfavorableimpactsfromproductmixshiftandpricing.Canopygrossprofit(loss)declinedto$(18.6)millionforFiscal2022from$(14.1)millionforFiscal2021.Thisincreaseinlossof$4.5millionisprimarilydrivenby(i)higherinventorywrite-downsforFiscal2022ascomparedwithFiscal2021,(ii)pricecompressionintheCanadianrecreationalchannelandforCanopy’s,nowformer,internationalpharmaceuticalbusiness,C3,(iii)shiftsinbusinessmix,(iv)unfavorablefixedcostabsorptionforcertainofitsbusinesses,and(v)highershippingandwarehousingcostsinNorthAmerica.ThedeclineinCanopy’sgrossprofit(loss)waspartiallyoffsetbypayrollsubsidiesreceivedfromtheCanadiangovernmentinFiscal2022pursuanttoaCOVID-19reliefprogram.Canopyselling,general,andadministrativeexpensesdecreased$870.4millionprimarilyfromareductionin(i)assetimpairmentandrestructuringchargesrelatedtoitspreviousyeardecisiontoclosegreenhousefacilitiesaswellasotherchangesrelatedtoitsorganizationalandstrategicreviewoftheirbusiness,(ii)expectedcreditlossesonfinancialassetsandrelatedcharges,(iii)stock-basedcompensationexpense,and(iv)salesandmarketingexpenses.Thecombinationofthesefactorswerethemaincontributorstothe$865.9milliondecreaseinoperatingloss.

InterestexpenseInterestexpensedecreasedto$356.4millionforFiscal2022from$385.7millionforFiscal2021.This

decreaseof$29.3million,or8%,isduetoapproximately$1.2billionofloweraverageborrowings,partiallyoffsetbyapproximately10basispointsofhigherweightedaverageinterestrates.TheloweraverageborrowingsareprimarilyattributabletothepartialrepaymentoffinancingenteredintoinconnectionwiththeNovember2018CanopyTransaction.



LossonextinguishmentofdebtLossonextinguishmentofdebtprimarilyconsistsofamake-wholepaymentinconnectionwiththeearly

redemptionofour(i)2.70%May2017SeniorNotesand2.65%November2017SeniorNotes(Fiscal2022)and(ii)2.25%November2017seniornotes(Fiscal2021).

(Provisionfor)benefitfromincometaxesThe(provisionfor)benefitfromincometaxesdecreasedto$(309.4)millionforFiscal2022from

$(511.1)millionforFiscal2021.OureffectivetaxrateforFiscal2022was99.7%ascomparedwith20.1%forFiscal2021.Incomparisontoprioryear,ourtaxeswereimpactedprimarilyby:

• valuationallowancesonaportionoftheunrealizednetlossfromthechangesinfairvalueofourinvestmentinCanopyandCanopyequityinearnings(losses);

• theeffectivetaxratesapplicabletoourforeignbusinesses,includingtheimpactofthelong-livedassetimpairmentofbreweryconstructioninprogress;and

• anetincometaxbenefitfromstock-basedcompensationawardactivityforFiscal2022fromchangesinoptionexerciseactivity.

Foradditionalinformation,refertoNote13.

Weexpectourreportedeffectivetaxrateforthenextfiscalyeartobeintherangeof19%to21%.Sinceestimatesarenotcurrentlyavailable,thisrangedoesnotreflectanyfuturechangesinthefairvalueofourCanopyinvestmentmeasuredatfairvalueandanyfutureequityinearnings(losses)andrelatedactivitiesfromtheCanopyEquityMethodInvestment.

Netincome(loss)attributabletoCBINetincome(loss)attributabletoCBIdecreasedto$(40.4)millionforFiscal2022from$1,998.0millionfor

Fiscal2021.Thisdecreaseof$2,038.4millionislargelyattributableto(i)theunrealizednetlossfromthechangesinfairvalueofourinvestmentinCanopyascomparedwithanunrealizednetgaininFiscal2021,(ii)animpairmentoflong-livedassetsforFiscal2022inconnectionwithcertainassetsattheMexicaliBrewery,(iii)thedecreaseinWineandSpiritsnetsalesduelargelytothedivestitures,and(iv)higheroperationalcostswithintheBeersegment,partiallyoffsetbystrongshipmentvolumegrowthwithintheBeersegmentandthedecreaseintheprovisionforincometaxes.

LiquidityandCapitalResources

General

Ourprimarysourceofliquidityhasbeencashflowfromoperatingactivities.Ourabilitytoconsistentlygeneraterobustcashflowfromouroperationsisoneofourmostsignificantfinancialstrengths;itenablesustoinvestinourpeopleandourbrands,makecapitalinvestmentsandstrategicacquisitions,provideacashdividendprogram,andfromtime-to-time,repurchasesharesofourcommonstock.Ourlargestuseofcashinouroperationsisforpurchasingandcarryinginventoriesandcarryingseasonalaccountsreceivable.Historically,wehaveusedthiscashflowtorepayourshort-termborrowingsandfundcapitalexpenditures.Additionally,ourcommercialpaperprogramisusedtofundourshort-termborrowingrequirementsandtomaintainouraccesstothecapitalmarkets.Weuseourshort-termborrowings,includingourcommercialpaperprogram,tosupportourworkingcapitalrequirementsandcapitalexpenditures.

Weseektomaintainadequateliquiditytomeetworkingcapitalrequirements,fundcapitalexpenditures,andrepayscheduledprincipalandinterestpaymentsondebt.Absentdeteriorationofmarketconditions,webelievethatcashflowsfromoperatingandfinancingactivities,primarilyshort-termborrowings,willprovideadequateresourcestosatisfyourworkingcapital,scheduledprincipalandinterestpaymentsondebt,anticipateddividendpayments,periodicsharerepurchases,andanticipatedcapitalexpenditurerequirementsforbothourshort-termandlong-termcapitalneeds.



InDecember2021,weenteredintoanagreementwithafinancialinstitutionforpayableservices.WeplantofacilitateavoluntarysupplychainfinanceprogramthroughthisparticipatingfinancialinstitutioninFiscal2023.Theprogramwillbeavailabletocertainofoursuppliersallowingthemtheoptiontomanagetheircashflow.Wewillnotbeapartytotheagreementsbetweentheparticipatingfinancialinstitutionandthesuppliersinconnectionwiththeprogram.Ourrightsandobligationstooursuppliers,includingamountsdueandscheduledpaymentterms,willnotbeimpacted.Wearestillevaluatingtheimpactofthisprogramonfutureliquidity.

AsofFebruary28,2022,theexerciseofallCanopywarrantsheldbyuswouldhaverequiredacashoutflowofapproximately$5.9billionbasedonthetermsoftheNovember2018CanopyWarrants.

CashFlows

Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)

Netcashprovidedby(usedin):

Operatingactivities $ 2,705.4 $ 2,806.5 $ (101.1) (4)%

Investingactivities (1,035.8) (87.9) (947.9) NM

Financingactivities (1,929.5) (2,346.6) 417.1 18%Effectofexchangeratechangesoncashandcashequivalents (1.3) 7.2 (8.5) (118)%

Netincrease(decrease)incashandcashequivalents $ (261.2) $ 379.2 $ (640.4) (169)%

OperatingactivitiesThedecreaseinnetcashprovidedby(usedin)operatingactivitiesconsistsof:

Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)

Netincome(loss) $ 1.0 $ 2,031.8 $ (2,030.8) (100)%

Unrealizednet(gain)lossonsecuritiesmeasuredatfairvalue 1,644.7 (802.0) 2,446.7 NM

Deferredtaxprovision(benefit) 84.8 336.4 (251.6) (75)%

Equityin(earnings)lossesofequitymethodinvesteesandrelatedactivities,netofdistributedearnings 61.6 673.4 (611.8) (91)%

Impairmentofbreweryconstructioninprogress 665.9 — 665.9 NM

Othernon-cashadjustments 433.0 418.6 14.4 3%

Changeinoperatingassetsandliabilities,netofeffectsfrompurchaseandsaleofbusiness (185.6) 148.3 (333.9) NM

Netcashprovidedby(usedin)operatingactivities $ 2,705.4 $ 2,806.5 $ (101.1) (4)%

Thenetchangeinoperatingassetsandliabilitieswaslargelydrivenby(i)higherFiscal2022inventorylevelsfortheBeerandWineandSpiritssegmentsascomparedtoFiscal2021inventorylevelswhichwerenegativelyimpactedbyclimate-relatedevents,(ii)increasedaccountsreceivablefortheBeerandWineandSpiritssegments,and(iii)higherincometaxpaymentsinFiscal2022ascomparedtoFiscal2021.Thiswaspartiallyoffsetbybenefitsfrom(i)accountspayableprimarilyattributabletothetimingofpaymentsforboththeBeerandWineandSpiritssegmentsand(ii)anexclusivitypaymentreceivedinFiscal2022relatedtodistributionarrangementsforourU.S.wineandspiritsbrandportfolio.

InvestingactivitiesNetcashusedininvestingactivitiesforFiscal2022increasedprimarilydueto$994.9millionoflower

proceedsfromsaleofbusinessand$162.2millionofhighercapitalexpendituresforFiscal2022ascomparedwithFiscal2021.Theincreaseinnetcashusedininvestingactivitieswaspartiallyoffsetbythe$173.9millionexerciseoftheNovember2017CanopyWarrantsinMay2020.



Businessinvestments,acquisitions,anddivestituresconsistprimarilyofthefollowing:

Investments Acquisitions Divestitures

Fiscal2022

• MyFavoriteNeighbor • Corporateinvestment

Fiscal2021

• May2020CanopyInvestment • Copper&Kings • PaulMassonGrandeAmberBrandy

• MyFavoriteNeighbor • EmpathyWines • WineandSpiritsDivestiture

• NobiloWine

• Concentratesandhigh-colorconcentrates

• BallastPoint

Foradditionalinformationontheseinvestments,acquisitions,anddivestitures,refertoNotes2,7,and10.

FinancingactivitiesThedecreaseinnetcashprovidedby(usedin)financingactivitiesconsistsof:

Fiscal2022

Fiscal2021

DollarChange

PercentChange

(inmillions)Netproceedsfrom(paymentsof)debt,currentandlong-term,andrelatedactivities $ (81.3) $ (1,787.8) $ 1,706.5 95%

Dividendspaid (573.0) (575.0) 2.0 0%

Purchasesoftreasurystock (1,390.5) — (1,390.5) NM

Netcashprovidedbystock-basedcompensationactivities 167.8 51.2 116.6 NM

Distributionstononcontrollinginterests (52.5) (35.0) (17.5) (50)%

Netcashprovidedby(usedin)financingactivities $ (1,929.5) $ (2,346.6) $ 417.1 18%

Debt

TotaldebtoutstandingasofFebruary28,2022,amountedto$10,416.5million,adecreaseof$25.8millionfromFebruary28,2021.Thisdecreaseconsistedof:

$(in

millions)

$10,442.3

$(697.1)

$(498.8)

$(154.4)

$988.0

$323.0 $13.5 $10,416.5

Feb28,2021 2.65%November2017Senior

Notes

2.70%May2017

SeniorNotes

Five-YearTermFacility

2.25%July2021

SeniorNotes

Commercialpaper

Other Feb28,20228,500

9,000

9,500

10,000

10,500

Debtrepayment Debtissuance



BankfacilitiesInJune2021,theCompanyandtheAdministrativeAgentandLenderamendedtheMarch2020Term

CreditAgreement.TheprincipalchangeeffectedbytheJune2021amendmentwasareductioninLIBORmarginfrom0.88%to0.63%fromJune1,2021,throughDecember31,2021.

InApril2022,weenteredintothe2022RestatementAgreementthatamendedandrestatedthe2020CreditAgreement.The2022RestatementAgreementresultedin(i)therefinanceandincreaseoftheexistingrevolvingcreditfacilityfrom$2.0billionto$2.25billionandextensionofitsmaturitytoApril14,2027,(ii)therefinementofcertainnegativecovenants,and(iii)thereplacementofLIBORrateswithratesbasedontermSOFR.Therearenoborrowingsoutstandingunderthe2022CreditAgreement.

InApril2022,theCompanyandtheAdministrativeAgentandLenderamendedtheJune2021TermCreditAgreement.TheprincipalchangeseffectedbytheApril2022amendmentweretherefinementofcertainnegativecovenantsandreplacementofLIBORrateswithratesbasedontermSOFR.

SeniornotesInJuly2021,weissuedthe2.25%July2021SeniorNotes.Proceedsfromthisoffering,netofdiscountand

debtissuancecosts,of$987.2millionwereusedtowardstherepaymentofour2.70%May2017SeniorNotesand2.65%November2017SeniorNotes.

GeneralThemajorityofouroutstandingborrowingsasofFebruary28,2022,consistedoffixed-ratesenior

unsecurednotes,withmaturitiesrangingfromcalendar2023tocalendar2050,andavariable-rateseniorunsecuredtermloanfacilityunderourJune2021TermCreditAgreementwithacalendar2024maturitydateasfollows:

CalendarYearDebtMaturities

$(in

millions)

June2021TermCreditAgreement Seniornotes

2023 2024 2025 2026 2027 2028 2029 2030 2031 2047 2048 20500

250

500

750

1,000

1,250

1,500

1,750

Additionally,wehaveacommercialpaperprogramwhichprovidesfortheissuanceofuptoanaggregateprincipalamountof$2.0billionofcommercialpaper.Ourcommercialpaperprogramisbackedbyunusedcommitmentsunderourrevolvingcreditfacilityunderour2022CreditAgreement.Accordingly,outstandingborrowingsunderourcommercialpaperprogramreducetheamountavailableunderourrevolvingcreditfacility.

Wedonothavepurchasecommitmentsfrombuyersforourcommercialpaperand,therefore,ourabilitytoissuecommercialpaperissubjecttomarketdemand.Ifthecommercialpapermarketisnotavailabletousforanyreasonwhencommercialpaperborrowingsmature,wewillutilizeunusedcommitmentsunderourrevolvingcreditfacilityunderour2022CreditAgreementtorepaycommercialpaperborrowings.Wedonotexpectthat



fluctuationsindemandforcommercialpaperwillaffectourliquiditygivenourborrowingcapacityavailableunderourrevolvingcreditfacility.

Wehadthefollowingremainingborrowingcapacityavailableunderour2020CreditAgreementand2022CreditAgreement,respectively:

February28,2022

April14,2022

(inmillions)

Revolvingcreditfacility(1) $ 1,664.8 $ 1,678.0

(1) Netofoutstandingrevolvingcreditfacilityborrowingsandoutstandinglettersofcreditunderour2020CreditAgreementand2022CreditAgreement,respectively,andoutstandingborrowingsunderourcommercialpaperprogram.

Thefinancialinstitutionsparticipatinginour2022CreditAgreementhavecompliedwithpriorfundingrequestsandwebelievetheywillcomplywithanyfuturefundingrequests.However,therecanbenoassurancesthatanyparticularfinancialinstitutionwillcontinuetodoso.

AsofFebruary28,2022,weandoursubsidiariesweresubjecttocovenantsthatarecontainedinour2020CreditAgreement,includingthoserestrictingtheincurrenceofadditionalsubsidiaryindebtedness,additionalliens,mergersandconsolidations,transactionswithaffiliates,andsaleandleasebacktransactions,ineachcasesubjecttonumerousconditions,exceptions,andthresholds.Thefinancialcovenantsarelimitedtoaminimuminterestcoverageratioandamaximumnetleverageratio,bothasdefinedinour2020CreditAgreement.AsofFebruary28,2022,underour2020CreditAgreement,theminimuminterestcoverageratiowas2.5xandthemaximumnetleverageratiowas4.0x.

Therepresentations,warranties,covenants,andeventsofdefaultsetforthinourJune2021TermCreditAgreementaresubstantiallysimilartothosesetforthinour2020CreditAgreement.

Ourindenturesrelatingtoouroutstandingseniornotescontaincertaincovenants,including,butnotlimitedto:(i)alimitationonliensoncertainassets,(ii)alimitationoncertainsaleandleasebacktransactions,and(iii)restrictionsonmergers,consolidations,andthetransferofallorsubstantiallyallofourassetstoanotherperson.

AsofFebruary28,2022,wewereincompliancewithourcovenantsunderour2020CreditAgreement,ourJune2021TermCreditAgreement,andourindentures,andhavemetalldebtpaymentobligations.

Forfurtherdiscussionandpresentationofourborrowingsandavailablesourcesofborrowing,refertoNote12.

CommonStockDividends

OnApril6,2022,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.80pershareofClassAStock,$0.72pershareofClassBStock,and$0.72pershareofClass1StockpayableonMay19,2022,tostockholdersofrecordofeachclassasofthecloseofbusinessonMay5,2022.Weexpecttoreturnapproximately$600milliontostockholdersinFiscal2023throughcashdividends.

Wecurrentlyexpecttocontinuetopayaregularquarterlycashdividendtostockholdersofourcommonstockinthefuture,butsuchpaymentsaresubjecttoapprovalofourBoardofDirectorsandaredependentuponourfinancialcondition,resultsofoperations,capitalrequirements,andotherfactors,includingthosesetforthunderItem1A.“RiskFactors”ofthisForm10-K.



ShareRepurchaseProgram

OurBoardofDirectorsauthorizedtherepurchaseofupto$3.0billionofourClassAStockandClassBStockunderthe2018Authorizationandanadditionalrepurchaseofupto$2.0billionofourClassAStockandClassBStockunderthe2021Authorization.Noshareshavebeenrepurchasedunderthe2021Authorization.

DuringFiscal2022,werepurchased6,179,015sharesofClassAStockpursuanttothe2018Authorizationatanaggregatecostof$1,390.5million,oranaveragecostof$225.04pershare,throughacombinationofopenmarkettransactionsandanASR.PursuanttotheASRannouncedinJune2021,werepurchased2,240,397sharesofClassAStockatanaveragepurchasepricepaidof$223.17pershare.Weprimarilyusedcashonhandtopaythepurchasepricefortherepurchasedshares.

OnApril7,2022,weenteredintoanadditionalASRtorepurchase$500.0millionofourClassAStock.Weutilizedshort-termborrowingsandcashonhandtopaythedollarvalueforsharesrepurchasedinthisASRunderthe2018Authorization.

AsofApril21,2022,totalsharesrepurchasedunderthe2018Authorizationandthe2021Authorizationareasfollows:

ClassACommonShares

RepurchaseAuthorization

DollarValueofShares

Repurchased

NumberofShares

Repurchased

(inmillions,exceptsharedata)

2018Authorization $ 3,000.0 $ 2,936.4 12,802,171

2021Authorization $ 2,000.0 $ — —

Sharerepurchasesunderthe2018Authorizationand2021Authorizationmaybeaccomplishedatmanagement’sdiscretionfromtimetotimebasedonmarketconditions,ourcashanddebtposition,andotherfactorsasdeterminedbymanagement.Sharesmayberepurchasedthroughopenmarketorprivatelynegotiatedtransactions.Wemayfundfuturesharerepurchaseswithcashgeneratedfromoperationsand/orproceedsfromborrowings.Anyrepurchasedshareswillbecometreasuryshares,includingsharesrepurchasedunderthe2018Authorization.

Wecurrentlyexpecttocontinuetorepurchasesharesinthefuture,butsuchrepurchasesaredependentuponourfinancialcondition,resultsofoperations,capitalrequirements,andotherfactors,includingthosesetforthunderItem1A.“RiskFactors”ofthisForm10-K.

Foradditionalinformation,refertoNote17.

CapitalResources

Wehavemaintainedadequateliquiditytomeetworkingcapitalrequirements,fundcapitalexpenditures,andrepayscheduledprincipalandinterestpaymentsondebt.Absentdeteriorationofmarketconditions,webelievethatcashflowsfromoperatingandfinancingactivities,primarilyshort-termborrowings,willprovideadequateresourcestosatisfyourworkingcapital,scheduledprincipalandinterestpaymentsondebt,anticipateddividendpayments,periodicsharerepurchases,andanticipatedcapitalexpenditurerequirementsforbothourshort-termandlong-termcapitalneeds.



ThefollowingsetsforthinformationaboutouroutstandingobligationsatFebruary28,2022.Foradetaileddiscussionoftheitemsnotedinthefollowingtable,refertoNotes11,12,13,14,15,and16.

Contractualobligations:

Short-termborrowings $ 323.0 $ — $ 323.0

Long-termdebt(excludingunamortizeddebtissuancecostsandunamortizeddiscounts) $ 606.8 $ 9,563.1 $ 10,169.9

Interestpaymentsonlong-termdebt(1) $ 375.3 $ 3,526.0 $ 3,901.3

Operatingleases $ 95.1 $ 546.5 $ 641.6

Otherlong-termliabilities(2) $ 63.1 $ 353.1 $ 416.2

Purchaseobligations

Rawmaterialsandsupplies $ 874.3 $ 2,284.7 $ 3,159.0

Contractservices $ 222.3 $ 543.1 $ 765.4

Capitalexpenditures(3) $ 272.5 $ 217.3 $ 489.8

In-processinventories $ 19.1 $ 31.5 $ 50.6

Otherpurchaseobligations $ 8.8 $ 10.9 $ 19.7

Other:

Returnvaluetostockholders(4) $ 1,842.3 $ — $ 1,842.3

Investmentsinbusinesses(5) $ 19.8 $ 131.9 $ 151.7

Short-termpayments

Long-termpayments Total

(inmillions)

(1) Interestpaymentsonlong-termdebtdonotincludeinterestrelatedtofinanceleaseobligationsasamountsarenotmaterial.

(2) Otherlong-termliabilitiesdonotincludepaymentsforunrecognizedtaxbenefitliabilitiesof$246.5millionduetotheuncertaintyofthetimingoffuturecashflowsassociatedwiththeseunrecognizedtaxbenefitliabilities.Inaddition,otherlong-termliabilitiesdonotincludeexpectedpaymentsforinterestandpenaltiesassociatedwithunrecognizedtaxbenefitliabilitiesasamountsarenotmaterial.Foradetaileddiscussionoftheseitems,refertoNote13.

(3) ContractstopurchaseequipmentandservicesprimarilyrelatedtotheMexicoBeerProjects.Forfurtherinformationaboutthesepurchaseobligations,referto“Capitalexpenditures”below.

(4) Publiclyannouncedintenttoreturn$5billioninvaluetostockholdersthroughdividendsandsharerepurchasestobemadefromFiscal2020throughFiscal2023.Wehavereturned$3,157.7millionthroughFiscal2022.

(5) Publiclyannouncedintenttoinvest(i)$100millioninfemale-foundedorledcompaniesthroughourFocusonFemaleFoundersprogramovera10-yearperiodconcludinginfiscal2029and(ii)$100milliontosupportminority-ownedcompaniesinthebeveragealcoholspaceandrelatedcategoriesthroughourFocusonMinorityFounderVentureprogramovera10-yearperiodconcludinginfiscal2031.Wehaveinvested$42.7millionand$5.6millionthroughFiscal2022infemale-foundedorledcompaniesandminority-ownedcompanies,respectively.



CapitalExpenditures

DuringFiscal2022,weincurred$1,026.8millionforcapitalexpenditures,including$849.5millionfortheBeersegmentprimarilyfortheMexicoBeerProjects.

Weplantospendfrom$1.3billionto$1.4billionforcapitalexpendituresinFiscal2023,includingapproximately$1.2billionfortheBeersegmentassociatedprimarilywiththeMexicoBeerProjects.TheremainingplannedFiscal2023capitalexpendituresconsistofimprovementstoexistingoperatingfacilitiesandreplacementsofexistingequipmentand/orbuildings.TheMexicoBeerProjectsareexpectedtobesubstantiallycompletedbyFiscal2026.Accordingly,fortheBeersegment,weexpecttospend$5.0billionto$5.5billionoverFiscal2023throughFiscal2026,withthemajorityofspendexpectedtooccurinthefirstthreefiscalyearsofthattimeframe.Managementreviewsthecapitalexpenditureprogramperiodicallyandmodifiesitasrequiredtomeetcurrentandprojectedfuturebusinessneeds.

Fiscal2022MexicoBeerProjectsSpend

ObregonBrewery70%

NavaBrewery22%

SoutheastMexicoBrewery6%

GlassPlant2%

Infiscal2017,webeganconstructionoftheMexicaliBrewery.InMarch2020,apublicconsultationwasheldontheconstructionofourMexicaliBrewery.Followingthenegativeresultofthepublicconsultation,wecontinuetoworkwithgovernmentofficialsinMexicoto(i)determinenextstepsforoursuspendedMexicaliBreweryconstructionproject,(ii)pursuevariousformsofrecoveryforcapitalizedcostsandadditionalexpensesincurredinestablishingthebrewery,however,therecanbenoassuranceofanyrecoveries,and(iii)exploreoptionstoaddfurthercapacityatotherlocationsinMexico,includingtheconstructionoftheSoutheastMexicoBrewerywherethereisamplewaterandwewillhaveaskilledworkforcetomeetourlong-termneeds.SeeNote7forfurtherdiscussion.

CriticalAccountingPoliciesandEstimates

OursignificantaccountingpoliciesaremorefullydescribedinNote1.Certainpoliciesareparticularlyimportanttotheportrayalofourfinancialpositionandresultsofoperationsandrequiretheapplicationofsignificantjudgmentbymanagementtodetermineappropriateassumptionstobeusedincertainestimates;asaresult,theyaresubjecttoaninherentdegreeofuncertainty.Estimatesarebasedonhistoricalexperience,observanceoftrendsintheindustry,informationprovidedbyourcustomersandinformationavailablefromotheroutsidesources,asappropriate.Wereviewestimatestoensurethattheyappropriatelyreflectchangesinourbusinessonanongoingbasis.Ourcriticalaccountingestimatesinclude:

• Equitymethodinvestments.Wemonitorourequitymethodinvestmentsforfactorsindicatingother-than-temporaryimpairment.Weconsiderseveralfactorswhenevaluatingourinvestments,including,butnotlimitedto,(i)theperiodoftimeforwhichthefairvaluehasbeenlessthanthecarryingvalue,(ii)operatingandfinancialperformanceoftheinvestee,(iii)theinvestee’sfuturebusinessplansandprojections,(iv)recenttransactionsandmarketvaluationsofpubliclytradedcompanies,whereavailable,(v)discussionswiththeirmanagement,and(vi)ourabilityandintenttoholdtheinvestmentuntilitrecoversinvalue.

CanopyEquityMethodInvestment–monitoredforother-than-temporaryimpairmentateachreportingdate,ormorefrequentlyifeventsorchangesincircumstancesindicatethatthecarryingvalueoftheinvestmentmaynotberecoverable.AsofFebruary28,2022,thecarryingvalueofourCanopyEquityMethodInvestmentexceededthefairvalueby$1,488.7million.IfCanopy’sstock



pricedoesnotrecoveraboveourC$22.34carryingvalueinthenear-term,itmayresultinanimpairmentofourCanopyEquityMethodInvestment.TheremayalsobeafutureimpairmentofourCanopyEquityMethodInvestmentifourexpectationsaboutCanopy’sprospectiveresultsandcashflowsdecline,whichcouldbeinfluencedbyavarietyoffactorsincludingadversemarketconditionsorifCanopyrecordsasignificantimpairmentofgoodwillorintangibleorotherlong-livedassets,makessignificantassetsales,orhaschangesinseniormanagement.

• Fairvalueoffinancialinstruments.Management’sestimateoffairvaluerequiressignificantjudgmentandissubjecttoahighdegreeofvariabilitybaseduponmarketconditionsandtheavailabilityofspecificinformation.Thefairvaluesofourfinancialinstrumentsthatrequiretheapplicationofsignificantjudgmentbymanagementareasfollows:

CanopyinvestmentEquitysecurities,Warrants–estimatedusingtheBlack-Scholesoption-pricingmodel(Level2fairvaluemeasurement)andMonteCarlosimulations(Level2fairvaluemeasurement).Thesevaluationmodelsusevariousmarket-basedinputs,includingstockprice,remainingcontractualterm,expectedvolatility,risk-freeinterestrate,andexpecteddividendyield,asapplicable.Managementappliessignificantjudgmentinitsdeterminationofexpectedvolatility.Weconsiderbothhistoricalandimpliedvolatilitylevelsoftheunderlyingequitysecurityandapplylimitedconsiderationofhistoricalpeergroupvolatilitylevels.

Debtsecurities,Convertible–estimatedusingabinomiallatticeoption-pricingmodel(Level2fairvaluemeasurement),whichincludesanestimateofthecreditspreadbasedonmarketspreadsusingbonddataasofthevaluationdate.Thisvaluationmodelusesvariousmarket-basedinputs,includingstockprice,remainingterm,expectedvolatility,risk-freeinterestrate,andexpecteddividendyield,asapplicable.

• Goodwillandotherintangibleassets.Goodwillandotherintangibleassetsareclassifiedintothreecategories:(i)goodwill,(ii)intangibleassetswithdefinitelivessubjecttoamortization,and(iii)intangibleassetswithindefinitelivesnotsubjecttoamortization.Forintangibleassetswithdefinitelives,impairmenttestingisrequiredifconditionsexistthatthecarryingvaluemaynotberecoverable.Forintangibleassetswithindefinitelivesandforgoodwill,impairmenttestingisrequiredatleastannuallyormorefrequentlyifeventsorcircumstancesindicatethattheseassetsmightbeimpaired.Wemayperformaqualitativeevaluationpriortoaquantitativetesttodetermineifanimpairmentexists.However,iftheresultsofthequalitativeevaluationareinconclusiveorsuggestanimpairmentmayexist,wemustproceedtothequantitativetest.Thequalitativeevaluationisanassessmentoffactors,includingmarketconditions,industrychanges,actualresultsascomparedtoforecastedresults,orthetimingofrecentacquisitionsand/ordivestitures.Thequantitativetestestimatesthefairvalueutilizingassumptionsandprojectionsregardingitemssuchasfuturecashflows,revenues,earnings,andotherfactors.Thefactorsandassumptionsusedreflectmanagement’sestimatesandarebasedonhistoricaltrends,projectionsandassumptions,includingexpectationsoffutureeconomicandcompetitiveconditionsthatareusedincurrentstrategicoperatingplans,however,thesearesubjecttochangeasaresultofchangingmarketconditions.Iftheseestimatesortheirrelatedassumptionschangeinthefuture,wemayberequiredtorecognizeanimpairmentlossfortheseassets.Therecognitionofanyresultingimpairmentlosscouldhaveamaterialadverseimpactonourfinancialstatements.

Weperformannualimpairmenttestsandre-evaluatetheusefullivesofotherintangibleassetswithindefinitelivesattheannualimpairmenttestmeasurementdateofJanuary1orwhencircumstancesarisethatindicateapossibleimpairmentorchangeinusefullifemightexist.

Goodwill–OurreportingunitswithgoodwillincludetheBeersegmentandtheWineandSpiritssegment.InthefourthquarterofFiscal2022,weperformedourannualgoodwillimpairmentanalysisusingthequalitativeassessment.Wedetermineditismorelikelythannotthefairvalueofeachofourreportingunitswithgoodwillexceededtheircarryingvalue,andthereforenogoodwillimpairmentwasrecognizedrelatedtothistest.ForFiscal2021andFiscal2020,asa



resultofourannualgoodwillimpairmentanalyses,weconcludedthattherewerenoindicationsofimpairmentforeitherofourreportingunits.

Otherintangibleassets–Ourintangibleassetsconsistprimarilyofcustomerrelationshipsandtrademarksobtainedthroughbusinessacquisitions.Customerrelationshipsareamortizedovertheirestimatedusefullives.Thetrademarksthatweredeterminedtohaveindefiniteusefullivesarenotamortized.InthefourthquarterofFiscal2022,weperformedourannualtrademarkimpairmentanalysisusingboththequalitativeandquantitativeassessments.Noindicationofimpairmentwasnotedforourtrademarkunitsutilizingthequalitativeassessment,withtheexceptionoftheFourCornerstrademark.WeproceededwithaquantitativeimpairmenttestfortheFourCornerstrademarkascertaincontinuednegativetrendsindicatedthefairvaluemaynotexceeditscarryingvalue.Whenusingthequantitativeassessment,theestimatedfairvalueoftrademarkiscalculatedbasedonanincomeapproachusingtherelieffromroyaltymethod.Themostsignificantassumptionusedindeterminingtheestimatedfairvaluewastheannualrevenueprojection.Noindicationofimpairmentwasnotedusingthequantitativetest,astheestimatedfairvalueoftheFourCornerstrademarkwasequaltoits$4.0millioncarryingamount.

DuringthefourthquarterofFiscal2021,certainnegativetrendswithinourFourCornerscraftbeerportfolio,includingslowergrowthratesandincreasedcompetition,resultedinupdatedlong-termfinancialforecastsindicatinglowerrevenueandcashflowgenerationfortherelatedportfolio.Thischangeinfinancialforecastsindicateditwasmorelikelythannotthefairvalueofourindefinite-livedintangibleassetassociatedwiththeFourCornerstrademarkmightbebelowitscarryingvalue.Accordingly,weperformedaquantitativeassessmentforimpairment.Asaresultofthisassessment,theBeersegment’sFourCornerscraftbeerbusinessrecognizeda$6.0millionimpairmentlossinconnectionwithitstrademarkasset.DuringthesecondquarterofFiscal2020,certaincontinuingnegativetrendswithinourBeersegment’sBallastPointcraftbeerportfolio,includingincreasedrateofrevenuedeclineandincreasedcompetition,indicatedthatitwasmorelikelythannotthefairvalueofourindefinite-livedintangibleassetassociatedwiththeBallastPointcraftbeertrademarksmightbebelowitscarryingvalue.Accordingly,weperformedaquantitativeassessmentforimpairment.Asaresultofthisassessment,theBallastPointcraftbeertrademarkassetrecognizedanimpairmentlossof$11.0million.RefertoNote7forfurtherdiscussion.

Divestitures–Whensome,butnotallofareportingunitisdisposedof,someofthegoodwillofthereportingunitshouldbeallocatedtotheportionofthereportingunitbeingdisposedof,ifthatportionconstitutesabusiness.Theallocationofgoodwillisbasedontherelativefairvaluesoftheportionofthereportingunitbeingdisposedofandtheportionofthereportingunitremaining.Thisapproachrequiresadeterminationofthefairvalueofboththebusinessbeingdisposedandthebusinessesretainedwithinthereportingunit.

ForFiscal2021,ourestimateoffairvalueforthePaulMassonDivestiture,theWineandSpiritsDivestitures,theConcentrateBusinessDivestiture,andtheBallastPointDivestiturewasdeterminedbasedontheexpectedproceedsfromthetransactions.ThecomponentssoldwereapartoftheWineandSpiritsorBeersegmentandwereincludedinthosereportingunitsthroughthedateofdivestiture.Goodwillwasallocatedtotheassetsheldforsalebasedontherelativefairvalueofthebusinessesbeingsoldcomparedtotherelativefairvalueofthereportingunit.Goodwillnotallocatedtoassetsassociatedwiththerespectivedivestituresremainedinthewineandspiritsorbeerreportingunit.

• Accountingforincometaxes.Weestimateourdeferredtaxassetsandliabilities,incometaxespayable,provisionforincometaxes,andunrecognizedtaxbenefitliabilitiesbaseduponvariousfactorsincluding,butnotlimitedto,historicalpretaxoperatingincome,futureestimatesofpretaxoperatingincome,differencesbetweenbookandtaxtreatmentofvariousitemsofincomeandexpense,interpretationoftaxlaws,andtaxplanningstrategies.WearesubjecttoincometaxesinCanada,Mexico,Switzerland,theU.S.,andotherjurisdictions.Weareregularlyauditedbyfederal,state,and



foreigntaxauthorities,butanumberofyearsmayelapsebeforeanuncertaintaxpositionisauditedandfinallyresolved.

Webelievealltaxpositionsarefullysupported.WerecognizetaxassetsandliabilitiesinaccordancewiththeFASBguidanceforincometaxaccounting.Accordingly,werecognizeataxbenefitfromanuncertaintaxpositionwhenitismorelikelythannotthepositionwillbesustaineduponexaminationbasedonthelargestbenefitthathasagreaterthan50%likelihoodofbeingrealizeduponultimatesettlement.Duetothecomplexityofsomeoftheseuncertainties,theultimateresolutionmayresultinapaymentthatismateriallydifferentfromourcurrentestimateoftheunrecognizedtaxbenefitliabilities.Inaddition,changesinexistingtaxlawsorratescouldsignificantlychangeourcurrentestimateofourunrecognizedtaxbenefitliabilities.Thesedifferenceswillbereflectedasincreasesordecreasestoincometaxexpenseintheperiodinwhichtheyaredetermined.Changesincurrentestimates,ifsignificant,couldhaveamaterialadverseimpactonourfinancialstatements.

Werecognizeourdeferredtaxassetsandliabilitiesbasedupontheexpectedfuturetaxoutcomeofamountsrecognizedinourresultsofoperations.Ifnecessary,werecognizeavaluationallowanceondeferredtaxassetswhenitismorelikelythannottheywillnotberealized.Weevaluateourabilitytorealizethetaxbenefitsassociatedwithdeferredtaxassetsbyassessingtheadequacyoffutureexpectedtaxableincome,historical,andprojectedoperatingresults,andtheavailabilityofprudentandfeasibletaxplanningstrategies.Therealizationofdeferredtaxassetsisevaluatedbyjurisdictionandtherealizabilityoftheseassetscanvarybasedonthecharacterofthetaxattributeandthecarryforwardperiodsspecifictoeachjurisdiction.Webelieveitismorelikelythannottheresultsoffutureoperationswillgeneratesufficienttaxableincometorealizeourexistingdeferredtaxassets,netofvaluationallowances.Changesintherealizabilityofourdeferredtaxassetswillbereflectedinoureffectivetaxrateintheperiodinwhichtheyaredetermined.

ChangeinAccountingGuidance

AccountingguidanceadoptedforFiscal2022didnothaveamaterialimpactonourconsolidatedfinancialstatements.



Item7A.QuantitativeandQualitativeDisclosuresAboutMarketRisk

Asaresultofourglobaloperating,investment,acquisition,divestiture,andfinancingactivities,weareexposedtomarketriskassociatedwithchangesinforeigncurrencyexchangerates,commodityprices,interestrates,andequityprices.Tomanagethevolatilityrelatingtotheserisks,weperiodicallypurchaseand/orsellderivativeinstrumentsincludingforeigncurrencyforwardandoptioncontracts,commodityswapcontracts,interestrateswapcontracts,treasurylockcontracts,andswaplockcontracts.Weusederivativeinstrumentstoreduceearningsandcashflowvolatilityresultingfromshiftsinmarketrates,aswellastohedgeeconomicexposures.Wedonotenterintoderivativeinstrumentsfortradingorspeculativepurposes.

ForeigncurrencyandcommoditypriceriskForeigncurrencyderivativeinstrumentsareormaybeusedtohedgeexistingforeigncurrency

denominatedassetsandliabilities,forecastedforeigncurrencydenominatedsales/purchasesto/fromthirdpartiesaswellasintercompanysales/purchases,intercompanyprincipalandinterestpayments,andinconnectionwithinvestments,acquisitions,ordivestituresoutsidetheU.S.AsofFebruary28,2022,wehadexposurestoforeigncurrencyriskprimarilyrelatedtotheMexicanpeso,euro,Canadiandollar,andNewZealanddollar.Approximately100%ofourbalancesheetexposuresand72%ofourforecastedtransactionalexposuresfortheyearendingFebruary28,2023,werehedgedasofFebruary28,2022.

Commodityderivativeinstrumentsareormaybeusedtohedgeforecastedcommoditypurchasesfromthirdpartiesaseithereconomichedgesoraccountinghedges.AsofFebruary28,2022,exposurestocommoditypriceriskwhichwearecurrentlyhedgingincludealuminum,corn,dieselfuel,andnaturalgasprices.Approximately69%ofourforecastedtransactionalexposuresfortheyearendingFebruary28,2023,werehedgedasofFebruary28,2022.

Wehaveperformedasensitivityanalysistoestimateourexposuretomarketriskofforeignexchangeratesandcommoditypricesreflectingtheimpactofahypothetical10%adversechangeintheapplicablemarket.Thevolatilityoftheapplicableratesandpricesisdependentonmanyfactorswhichcannotbeforecastedwithreliableaccuracy.Gainsorlossesfromtherevaluationorsettlementoftherelatedunderlyingpositionswouldsubstantiallyoffsetsuchgainsorlossesonthederivativeinstruments.Theaggregatenotionalvalue,estimatedfairvalue,andsensitivityanalysisforouropenforeigncurrencyandcommodityderivativeinstrumentsaresummarizedasfollows:

AggregateNotionalValue

FairValue,NetAsset(Liability)

Increase(Decrease)inFairValue–Hypothetical

10%AdverseChange

February28,2022

February28,2021

February28,2022

February28,2021

February28,2022

February28,2021

(inmillions)

Foreigncurrencycontracts $ 2,360.8 $ 2,262.7 $ 38.6 $ 66.9 $ (145.1) $ (129.7)

Commodityderivativecontracts $ 291.1 $ 221.6 $ 90.1 $ 15.9 $ (35.1) $ (22.5)

InterestrateriskTheestimatedfairvalueofourfixedinterestratedebtissubjecttointerestraterisk,creditrisk,and

foreigncurrencyrisk.Inaddition,wealsohavevariableinterestratedebtoutstanding(primarilyLIBOR-based),certainofwhichincludesafixedmarginsubjecttothesamerisksidentifiedforourfixedinterestratedebt.

AsofFebruary28,2022,wehada$100.0millionoutstandingcashflowdesignatedswaplockagreementwhichourfixed10-yearinterestratestominimizeinterestratevolatilityonourfuturedebtissuances.Wehadnootheroutstandingcashflowdesignatedorundesignatedinterestrateswapcontracts,treasurylockcontracts,orswaplockcontractsoutstandingasofFebruary28,2022,andFebruary28,2021.

PARTII ITEM7A.QUANTITATIVEANDQUALITATIVEDISCLOSURES TableofContents


Wehaveperformedasensitivityanalysistoestimateourexposuretomarketriskofinterestratesreflectingtheimpactofahypothetical1%increaseintheprevailinginterestrates.Thevolatilityoftheapplicableratesisdependentonmanyfactorswhichcannotbeforecastedwithreliableaccuracy.

Theaggregatenotionalvalue,estimatedfairvalue,andsensitivityanalysisforouroutstandingfixed-ratedebt,includingcurrentmaturitiesandopeninterestratederivativeinstruments,aresummarizedasfollows:

AggregateNotionalValue

FairValueNetAsset(Liability)

Increase(Decrease)inFairValue–Hypothetical

1%RateIncrease

February28,2022

February28,2021

February28,2022

February28,2021

February28,2022

February28,2021

(inmillions)

Fixedinterestratedebt $ 9,869.9 $ 10,065.5 $ (10,045.3) $ (11,126.5) $ (709.7) $ (805.3)

Swaplockcontracts $ 100.0 $ — $ (0.4) $ — $ (8.6) $ —

A1%hypotheticalchangeintheprevailinginterestrateswouldhaveincreasedinterestexpenseonourvariableinterestratedebtby$4.6millionand$12.4millionfortheyearsendedFebruary28,2022,andFebruary28,2021,respectively.

EquitypriceriskTheestimatedfairvalueofourinvestmentintheNovember2018CanopyWarrantsandtheCanopyDebt

Securitiesaresubjecttoequitypricerisk,interestraterisk,creditrisk,andforeigncurrencyrisk.Thisinvestmentisrecognizedatfairvalueutilizingvariousoption-pricingmodelsandhasthepotentialtofluctuatefrom,amongotheritems,changesinthequotedmarketpriceoftheunderlyingequitysecurity.Wemanageourequitypriceriskexposurebycloselymonitoringthefinancialcondition,performance,andoutlookofCanopy.

AsofFebruary28,2022,thefairvalueofourinvestmentintheNovember2018CanopyWarrantsandtheCanopyDebtSecuritieswas$182.9million,withanunrealizednetgain(loss)onthisinvestmentof$(1,644.7)millionrecognizedinourresultsofoperationsfortheyearendedFebruary28,2022.Wehaveperformedasensitivityanalysistoestimateourexposuretomarketriskoftheequitypricereflectingtheimpactofahypothetical10%adversechangeinthequotedmarketpriceoftheunderlyingequitysecurity.AsofFebruary28,2022,suchahypothetical10%adversechangewouldhaveresultedinadecreaseinfairvalueof$10.0million.

Foradditionaldiscussiononourmarketrisk,refertoNotes6and7.

PARTII ITEM7A.QUANTITATIVEANDQUALITATIVEDISCLOSURES TableofContents


Item8.FinancialStatementsandSupplementaryData

CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESINDEXTOCONSOLIDATEDFINANCIALSTATEMENTS

FEBRUARY28,2022

Page

Management’sAnnualReportonInternalControlOverFinancialReporting 59

ReportsofIndependentRegisteredPublicAccountingFirm(PCAOBID185) 60ConsolidatedBalanceSheets 64ConsolidatedStatementsofComprehensiveIncome(Loss) 65ConsolidatedStatementsofChangesinStockholders’Equity 66ConsolidatedStatementsofCashFlows 67

NotestoConsolidatedFinancialStatements1. DescriptionofBusiness,BasisofPresentation,andSummaryofSignificantAccountingPolicies 69

2. AcquisitionsandDivestitures 74

3. Inventories 76

4. PrepaidExpensesandOther 77

5. Property,Plant,andEquipment 77

6. DerivativeInstruments 78

7. FairValueofFinancialInstruments 81

8. Goodwill 87

9. IntangibleAssets 87

10. EquityMethodInvestments 88

11. OtherAccruedExpensesandLiabilities 90

12. Borrowings 91

13. IncomeTaxes 96

14. DeferredIncomeTaxesandOtherLiabilities 99

15. Leases 100

16. CommitmentsandContingencies 102

17. Stockholders'Equity 103

18. Stock-BasedEmployeeCompensation 105

19. NetIncome(Loss)PerCommonShareAttributabletoCBI 108

20. AccumulatedOtherComprehensiveIncome(Loss) 109

21. SignificantCustomersandConcentrationofCreditRisk 111

22. BusinessSegmentInformation 112

23. SelectedQuarterlyFinancialInformation(unaudited) 116

PARTII ITEM8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA TableofContents


Management’sAnnualReportonInternalControlOverFinancialReporting

ManagementofConstellationBrands,Inc.andsubsidiaries(theCompany)isresponsibleforestablishingandmaintaininganadequatesystemofinternalcontroloverfinancialreporting.ThissystemisdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithU.S.generallyacceptedaccountingprinciples.

TheCompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(i)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsoftheCompany;(ii)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresoftheCompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsoftheCompany;and(iii)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionoftheCompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Becauseofitsinherentlimitations,asystemofinternalcontroloverfinancialreportingcanprovideonlyreasonableassuranceandmaynotpreventordetectmisstatements.Further,becauseofchangesinconditions,effectivenessofinternalcontrolsoverfinancialreportingmayvaryovertime.

ManagementconductedanevaluationoftheeffectivenessofthesystemofinternalcontroloverfinancialreportingbasedontheframeworkinInternalControl–IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizations(COSO)oftheTreadwayCommission.Basedonthatevaluation,managementconcludedthattheCompany’sinternalcontroloverfinancialreportingwaseffectiveasofFebruary28,2022.

TheeffectivenessoftheCompany’sinternalcontroloverfinancialreportinghasbeenauditedbyKPMGLLP,anindependentregisteredpublicaccountingfirm,asstatedintheirreportwhichisincludedherein.



ReportofIndependentRegisteredPublicAccountingFirm

TotheStockholdersandBoardofDirectorsConstellationBrands,Inc.:

OpiniononInternalControlOverFinancialReportingWehaveauditedConstellationBrands,Inc.andsubsidiaries’(theCompany)internalcontroloverfinancial

reportingasofFebruary28,2022,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.Inouropinion,theCompanymaintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofFebruary28,2022,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.

Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB),theconsolidatedbalancesheetsoftheCompanyasofFebruary28,2022andFebruary28,2021,therelatedconsolidatedstatementsofcomprehensiveincome(loss),changesinstockholders’equity,andcashflowsforeachofthefiscalyearsinthethree-yearperiodendedFebruary28,2022,andtherelatednotes(collectively,theconsolidatedfinancialstatements),andourreportdatedApril21,2022expressedanunqualifiedopiniononthoseconsolidatedfinancialstatements.

BasisforOpinionTheCompany’smanagementisresponsibleformaintainingeffectiveinternalcontroloverfinancial

reportingandforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedintheaccompanyingManagement’sAnnualReportonInternalControlOverFinancialReporting.OurresponsibilityistoexpressanopinionontheCompany’sinternalcontroloverfinancialreportingbasedonouraudit.WeareapublicaccountingfirmregisteredwiththePCAOBandarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.Ourauditofinternalcontroloverfinancialreportingincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Ourauditalsoincludedperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditprovidesareasonablebasisforouropinion.

DefinitionandLimitationsofInternalControlOverFinancialReportingAcompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonable

assuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.



Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

/s/KPMGLLP

Rochester,NewYorkApril21,2022



ReportofIndependentRegisteredPublicAccountingFirm

TotheStockholdersandBoardofDirectorsConstellationBrands,Inc.:

OpinionontheConsolidatedFinancialStatementsWehaveauditedtheaccompanyingconsolidatedbalancesheetsofConstellationBrands,Inc.and

subsidiaries(theCompany)asofFebruary28,2022andFebruary28,2021,therelatedconsolidatedstatementsofcomprehensiveincome(loss),changesinstockholders’equity,andcashflowsforeachofthefiscalyearsinthethree-yearperiodendedFebruary28,2022,andtherelatednotes(collectively,theconsolidatedfinancialstatements).Inouropinion,theconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasofFebruary28,2022andFebruary28,2021,andtheresultsofitsoperationsanditscashflowsforeachofthefiscalyearsinthethree-yearperiodendedFebruary28,2022,inconformitywithU.S.generallyacceptedaccountingprinciples.

Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB),theCompany’sinternalcontroloverfinancialreportingasofFebruary28,2022,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission,andourreportdatedApril21,2022expressedanunqualifiedopinionontheeffectivenessoftheCompany’sinternalcontroloverfinancialreporting.

BasisforOpinionTheseconsolidatedfinancialstatementsaretheresponsibilityoftheCompany’smanagement.Our

responsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePCAOBandarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsarefreeofmaterialmisstatement,whetherduetoerrororfraud.Ourauditsincludedperformingprocedurestoassesstherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchproceduresincludedexamining,onatestbasis,evidenceregardingtheamountsanddisclosuresintheconsolidatedfinancialstatements.Ourauditsalsoincludedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.Webelievethatourauditsprovideareasonablebasisforouropinion.

CriticalAuditMattersThecriticalauditmatterscommunicatedbelowaremattersarisingfromthecurrentperiodauditofthe

consolidatedfinancialstatementsthatwerecommunicatedorrequiredtobecommunicatedtotheauditcommitteeandthat:(1)relatetoaccountsordisclosuresthatarematerialtotheconsolidatedfinancialstatementsand(2)involvedourespeciallychallenging,subjective,orcomplexjudgments.Thecommunicationofcriticalauditmattersdoesnotalterinanywayouropinionontheconsolidatedfinancialstatements,takenasawhole,andwearenot,bycommunicatingthecriticalauditmattersbelow,providingseparateopinionsonthecriticalauditmattersorontheaccountsordisclosurestowhichtheyrelate.

Other-than-temporaryimpairmentassessmentforequitymethodinvestmentinCanopyAsdiscussedinNotes1and10totheconsolidatedfinancialstatements,theCompanyhada36.1%equitymethodinvestmentinCanopyGrowthCorporation(Canopy)asofFebruary28,2022.TheCompanyreviewsitsequitymethodinvestmentinCanopyforimpairmentbycomparingthefairvalueofitsinvestmenttoitscarryingvalue.Ifthecarryingvalueoftheinvestmentexceedsitsfairvalueandthelossinvalueisotherthantemporary,theinvestmentisreducedtofairvalueandtheimpairmentisrecognizedintheperiodidentified.AsofFebruary28,2022,thecarryingvalueandfairvalueoftheCompany’sequitymethodinvestmentinCanopywas$2,503.5millionand$1,014.8million,respectively.TheCompany



evaluateditsequitymethodinvestmentinCanopyasofFebruary28,2022,anddeterminedthattherewasnotanother-than-temporaryimpairment.ThefactorsusedbytheCompanytomakethisdeterminationincluded:(i)theperiodoftimeforwhichthefairvaluehasbeenlessthanthecarryingvalue,(ii)anexpectationthatCanopy’sfinancialresultswillimprove,(iii)anexpectationthattheCanopystockpricewillrecoverinthenear-term,and(iv)theCompany’sabilityandintenttoholdtheinvestmentuntilrecovery.

Weidentifiedtheother-than-temporaryimpairmentassessmentfortheCompany’sequitymethodinvestmentinCanopyasacriticalauditmatter.AhighdegreeofsubjectiveauditorjudgmentwasrequiredtoevaluatetheCompany’sexpectationsthatCanopy’sfinancialresultswillimproveandthattheCanopystockpricewillrecoverinthenear-term.

Thefollowingaretheprimaryproceduresweperformedtoaddressthiscriticalauditmatter.WeevaluatedthedesignandtestedtheoperatingeffectivenessofaninternalcontrolrelatedtotheidentificationandevaluationoffactorsusedintheCompany’sother-than-temporaryimpairmentassessmentforitsinvestmentinCanopy.WeassessedtheCompany’sexpectationsthatCanopy’sfinancialresultswillimproveandthattheCanopystockpricewillrecoverinthenear-termbyevaluatingwhetherthoseexpectationswereconsistentwith(i)Canopy’sidentificationofimpairmenttriggersasofaninterimdate,(ii)externalmarket,regulatoryandindustryinformation,(iii)Canopy’sexternalcommunicationswithinvestors,and(iv)evidenceobtainedinotherareasoftheaudit.

UnrecognizedtaxbenefitsAsdiscussedinNotes1and13totheconsolidatedfinancialstatements,theCompanyrecognizesataxbenefitfromanuncertaintaxpositionwhenitismorelikelythannotthatthepositionwillbesustaineduponexamination.TheCompanyhasrecordedunrecognizedtaxbenefitsof$279.0millionasofFebruary28,2022.

WeidentifiedtheevaluationofcertainoftheCompany’sunrecognizedtaxbenefitsasacriticalauditmatter.Specifically,complexauditorjudgment,includingtheinvolvementoftaxandvaluationprofessionalswithspecializedskillsandknowledge,wasrequiredinevaluatingtheCompany’sinterpretationoftaxlawanditsestimateoftheultimateresolutionofitstaxpositions.

Thefollowingaretheprimaryproceduresweperformedtoaddressthiscriticalauditmatter.WeevaluatedthedesignandtestedtheoperatingeffectivenessofcertaininternalcontrolsrelatedtotheCompany’sprocesstoevaluateuncertaintaxpositions.Thisincludedcontrolsrelatedtotheinterpretationoftaxlaw,itsapplicationintheliabilityestimationprocess,andthereviewofactivitythatcouldresultinchangestotheCompany’sunrecognizedtaxbenefits.Weinvolvedtaxprofessionalswithspecializedskillsandknowledge,whoassistedinevaluatingtheCompany’sinterpretationoftaxlawandtaxauthorityrulingsandinperforminganindependentassessmentofcertainoftheCompany’staxpositionsandtheamountofunrecognizedtaxbenefit,ifany,andcomparingtheresultstotheCompany’sassessment.Wealsoinvolvedvaluationprofessionalswithspecializedskillsandknowledge,whoassistedinassessingcertaintransferpricingstudiesforcompliancewithapplicablelawsandregulations.

/s/KPMGLLP

WehaveservedastheCompany’sauditorsince2002.

Rochester,NewYorkApril21,2022



CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDBALANCESHEETS

(inmillions,exceptshareandpersharedata)February28,

2022February28,

2021

ASSETSCurrentassets:

Cashandcashequivalents $ 199.4 $ 460.6

Accountsreceivable 899.0 785.3

Inventories 1,573.2 1,291.1

Prepaidexpensesandother 658.1 507.5

Totalcurrentassets 3,329.7 3,044.5

Property,plant,andequipment 6,059.6 5,821.6

Goodwill 7,862.4 7,793.5

Intangibleassets 2,755.2 2,732.1

Equitymethodinvestments 2,688.7 2,788.4

Securitiesmeasuredatfairvalue 191.4 1,818.1

Deferredincometaxes 2,351.5 2,492.5

Otherassets 617.3 614.1

Totalassets $ 25,855.8 $ 27,104.8

LIABILITIESANDSTOCKHOLDERS’EQUITYCurrentliabilities:

Short-termborrowings $ 323.0 $ —

Currentmaturitiesoflong-termdebt 605.3 29.2

Accountspayable 899.2 460.0

Otheraccruedexpensesandliabilities 871.3 779.9

Totalcurrentliabilities 2,698.8 1,269.1

Long-termdebt,lesscurrentmaturities 9,488.2 10,413.1

Deferredincometaxesandotherliabilities 1,621.0 1,493.5

Totalliabilities 13,808.0 13,175.7

Commitmentsandcontingencies(Note16)CBIstockholders’equity:

PreferredStock,$0.01parvalue–Authorized,1,000,000shares;Issued,none — —

ClassAStock,$0.01parvalue–Authorized,322,000,000shares;Issued,187,263,859sharesand187,204,280shares,respectively 1.9 1.9

ClassBStock,$0.01parvalue–Authorized,30,000,000shares;Issued,28,212,340sharesand28,270,288shares,respectively 0.3 0.3

Class1Stock,$0.01parvalue–Authorized,25,000,000shares;Issued,2,248,679sharesand612,936shares,respectively — —

Additionalpaid-incapital 1,808.9 1,604.2

Retainedearnings 14,505.4 15,117.8

Accumulatedothercomprehensiveincome(loss) (412.7) (335.5) 15,903.8 16,388.7

Less:Treasurystock–ClassAStock,atcost,22,824,607sharesand17,070,550shares,respectively (4,169.7) (2,787.6)

ClassBStock,atcost,5,005,800shares (2.2) (2.2) (4,171.9) (2,789.8)

TotalCBIstockholders’equity 11,731.9 13,598.9

Noncontrollinginterests 315.9 330.2

Totalstockholders’equity 12,047.8 13,929.1

Totalliabilitiesandstockholders’equity $ 25,855.8 $ 27,104.8

Theaccompanyingnotesareanintegralpartofthesestatements.



CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCOMPREHENSIVEINCOME(LOSS)

(inmillions,exceptpersharedata)FortheYearsEnded

February28,2022

February28,2021

February29,2020

Sales $ 9,529.1 $ 9,355.7 $ 9,113.0Excisetaxes (708.4) (740.8) (769.5)Netsales 8,820.7 8,614.9 8,343.5Costofproductsold (4,113.4) (4,148.9) (4,191.6)Grossprofit 4,707.3 4,466.0 4,151.9Selling,general,andadministrativeexpenses (1,711.4) (1,665.1) (1,621.8)Impairmentofbreweryconstructioninprogress (665.9) — —Impairmentofassetsheldforsale — (24.0) (449.7)Gain(loss)onsaleofbusiness 1.7 14.2 74.1Operatingincome(loss) 2,331.7 2,791.1 2,154.5Income(loss)fromunconsolidatedinvestments (1,635.5) 150.3 (2,668.6)Interestexpense (356.4) (385.7) (428.7)Lossonextinguishmentofdebt (29.4) (12.8) (2.4)Income(loss)beforeincometaxes 310.4 2,542.9 (945.2)(Provisionfor)benefitfromincometaxes (309.4) (511.1) 966.6Netincome(loss) 1.0 2,031.8 21.4Net(income)lossattributabletononcontrollinginterests (41.4) (33.8) (33.2)Netincome(loss)attributabletoCBI $ (40.4) $ 1,998.0 $ (11.8)

Netincome(loss)percommonshareattributabletoCBI:Basic–ClassAStock $ (0.22) $ 10.44 $ (0.07)Basic–ClassBStock $ (0.20) $ 9.48 $ (0.07)Diluted–ClassAStock $ (0.22) $ 10.23 $ (0.07)Diluted–ClassBStock $ (0.20) $ 9.42 $ (0.07)Weightedaveragecommonsharesoutstanding:Basic–ClassAStock 167.431 170.239 168.329Basic–ClassBStock 23.225 23.280 23.313Diluted–ClassAStock 167.431 195.308 168.329Diluted–ClassBStock 23.225 23.280 23.313Cashdividendsdeclaredpercommonshare:ClassAStock $ 3.04 $ 3.00 $ 3.00ClassBStock $ 2.76 $ 2.72 $ 2.72

Comprehensiveincome(loss):Netincome(loss) $ 1.0 $ 2,031.8 $ 21.4Othercomprehensiveincome(loss),netofincometaxeffect:

Foreigncurrencytranslationadjustments (40.4) (56.0) 60.8Unrealizedgain(loss)oncashflowhedges (27.8) (20.9) 40.4Pension/postretirementadjustments 0.3 (1.6) (0.6)Shareofothercomprehensiveincome(loss)ofequitymethodinvestments (12.5) (1.8) (10.1)

Othercomprehensiveincome(loss),netofincometaxeffect (80.4) (80.3) 90.5Comprehensiveincome(loss) (79.4) 1,951.5 111.9Comprehensive(income)lossattributabletononcontrollinginterests (38.2) (22.7) (36.1)Comprehensiveincome(loss)attributabletoCBI $ (117.6) $ 1,928.8 $ 75.8




CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCHANGESINSTOCKHOLDERS’EQUITY

(inmillions)

BalanceatFebruary28,2019 $ 1.9 $ 0.3 $ 1,410.8 $14,276.2 $ (353.9) $ (2,784.3) $ 286.2 $12,837.2

Comprehensiveincome(loss):

Netincome(loss) — — — (11.8) — — 33.2 21.4

Othercomprehensiveincome(loss),netofincometaxeffect — — — — 87.6 — 2.9 90.5

Comprehensiveincome(loss) 111.9

Repurchaseofshares — — — — — (50.0) — (50.0)

Dividendsdeclared — — — (569.1) — — — (569.1)

Initialrecognitionofnon-controllinginterest — — — — — — 20.2 20.2

Sharesissuedunderequitycompensationplans — — 43.8 — — 20.3 — 64.1

Stock-basedcompensation — — 60.0 — — — — 60.0

BalanceatFebruary29,2020 1.9 0.3 1,514.6 13,695.3 (266.3) (2,814.0) 342.5 12,474.3


Netincome(loss) — — — 1,998.0 — — 33.8 2,031.8

Othercomprehensiveincome(loss),netofincometaxeffect — — — — (69.2) — (11.1) (80.3)

Comprehensiveincome(loss) 1,951.5


Noncontrollinginterestdistributions — — — — — — (35.0) (35.0)



BalanceatFebruary28,2021 1.9 0.3 1,604.2 15,117.8 (335.5) (2,789.8) 330.2 13,929.1


Netincome(loss) — — — (40.4) — — 41.4 1.0

Othercomprehensiveincome(loss),netofincometaxeffect — — — — (77.2) — (3.2) (80.4)

Comprehensiveincome(loss) (79.4)

Repurchaseofshares — — — — — (1,390.5) — (1,390.5)


Noncontrollinginterestdistributions — — — — — — (52.5) (52.5)



BalanceatFebruary28,2022 $ 1.9 $ 0.3 $ 1,808.9 $14,505.4 $ (412.7) $ (4,171.9) $ 315.9 $12,047.8

StockAdditionalPaid-inCapital

RetainedEarnings

AccumulatedOther

ComprehensiveIncome(Loss)

TreasuryStock

Non-controllingInterests TotalClassA ClassB




CASHFLOWSFROMOPERATINGACTIVITIES

Netincome(loss) $ 1.0 $ 2,031.8 $ 21.4Adjustmentstoreconcilenetincome(loss)tonetcashprovidedbyoperatingactivities:

Unrealizednet(gain)lossonsecuritiesmeasuredatfairvalue 1,644.7 (802.0) 2,126.4

Deferredtaxprovision(benefit) 84.8 336.4 (1,153.7)

Depreciation 337.3 293.8 326.5

Stock-basedcompensation 44.9 63.0 60.4Equityin(earnings)lossesofequitymethodinvesteesandrelatedactivities,netofdistributedearnings 61.6 673.4 560.8

Noncashleaseexpense 81.9 83.3 88.3

Impairmentandamortizationofintangibleassets 5.1 11.3 16.7Amortizationofdebtissuancecostsandlossonextinguishmentofdebt 39.9 24.3 16.1

Net(gain)lossonsaleofunconsolidatedinvestment (51.0) — (0.4)

Impairmentofbreweryconstructioninprogress 665.9 — —

Impairmentofassetsheldforsale — 24.0 449.7

(Gain)lossonsaleofbusiness (1.7) (14.2) (74.1)Lossoninventoryandrelatedcontractsassociatedwithbusinessoptimization — 25.8 123.0

Lossonsettlementoftreasurylockcontracts — (29.3) —Changeinoperatingassetsandliabilities,netofeffectsfrompurchaseandsaleofbusiness:

Accountsreceivable (114.0) 59.6 (22.0)

Inventories (261.3) 193.7 (29.5)

Prepaidexpensesandothercurrentassets (113.2) 65.7 8.1

Accountspayable 213.7 (95.7) 16.8

Deferredrevenue 118.0 — 1.4

Otheraccruedexpensesandliabilities (28.8) (75.0) (58.5)

Other (23.4) (63.4) 73.7

Totaladjustments 2,704.4 774.7 2,529.7

Netcashprovidedby(usedin)operatingactivities 2,705.4 2,806.5 2,551.1

CASHFLOWSFROMINVESTINGACTIVITIES

Purchaseofproperty,plant,andequipment (1,026.8) (864.6) (726.5)

Purchaseofbusiness,netofcashacquired (53.5) (19.9) (36.2)

Investmentsinequitymethodinvesteesandsecurities (36.6) (222.4) (48.2)

Proceedsfromsaleofassets 4.1 18.9 8.3

Proceedsfromsaleofunconsolidatedinvestment 74.4 — 1.5

Proceedsfromsaleofbusiness 4.6 999.5 269.7

Otherinvestingactivities (2.0) 0.6 0.4

Netcashprovidedby(usedin)investingactivities (1,035.8) (87.9) (531.0)

CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWS

(inmillions)

FortheYearsEnded

February28,2022

February28,2021

February29,2020



CASHFLOWSFROMFINANCINGACTIVITIES

Proceedsfromissuanceoflong-termdebt 995.6 1,194.7 1,291.3

Principalpaymentsoflong-termdebt (1,365.3) (2,721.3) (2,195.3)

Netproceedsfrom(repaymentsof)short-termborrowings 323.0 (238.9) (552.6)

Dividendspaid (573.0) (575.0) (569.2)

Purchaseoftreasurystock (1,390.5) — (50.0)

Proceedsfromsharesissuedunderequitycompensationplans 177.6 58.9 78.2Paymentsofminimumtaxwithholdingsonstock-basedpaymentawards (9.8) (7.7) (14.3)Paymentsofdebtissuance,debtextinguishment,andotherfinancingcosts (34.6) (22.3) (8.2)

Distributionstononcontrollinginterests (52.5) (35.0) —

Paymentofcontingentconsideration — — (11.3)

Netcashprovidedby(usedin)financingactivities (1,929.5) (2,346.6) (2,031.4)

Effectofexchangeratechangesoncashandcashequivalents (1.3) 7.2 (0.9)

Netincrease(decrease)incashandcashequivalents (261.2) 379.2 (12.2)

Cashandcashequivalents,beginningofyear 460.6 81.4 93.6

Cashandcashequivalents,endofyear $ 199.4 $ 460.6 $ 81.4

SUPPLEMENTALDISCLOSURESOFCASHFLOWINFORMATION

Cashpaidduringtheyear

Interest,netofinterestcapitalized $ 368.5 $ 418.5 $ 448.9

Incometaxes,netofrefundsreceived $ 324.7 $ 189.7 $ 85.3

Noncashinvestingandfinancingactivities

Additionstoproperty,plant,andequipment $ 304.0 $ 101.1 $ 70.4

CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWS

(inmillions)

FortheYearsEnded

February28,2022

February28,2021

February29,2020




CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESNOTESTOCONSOLIDATEDFINANCIALSTATEMENTS

FEBRUARY28,2022

1. DESCRIPTIONOFBUSINESS,BASISOFPRESENTATION,ANDSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

DescriptionofbusinessWeoperateprimarilyinthebeveragealcoholindustrywithoperationsintheU.S.,Mexico,NewZealand,

andItalyproducingapowerfulportfolioofconsumer-connected,high-endimportedbeerbrands,andhigher-endwineandspiritsbrands.

BasisofpresentationPrinciplesofconsolidationOurconsolidatedfinancialstatementsincludeouraccountsandourmajority-ownedandcontrolled

domesticandforeignsubsidiaries.Inaddition,wehaveanequally-ownedjointventurewithOwens-Illinois.Thejointventureownsandoperatesastate-of-the-artglassproductionplantwhichprovidesbottlesexclusivelyfortheNavaBrewery.Wehavedeterminedthatwearetheprimarybeneficiaryofthisvariableinterestentityandaccordingly,theresultsofoperationsofthejointventurearereportedintheBeersegmentandareincludedinourconsolidatedresultsofoperations.Allintercompanyaccountsandtransactionsareeliminatedinconsolidation.

EquitymethodinvestmentsIfwearenotrequiredtoconsolidateourinvestmentinanotherentity,weusetheequitymethodwhen

we(i)canexercisesignificantinfluenceovertheotherentityand(ii)holdcommonstockand/orin-substancecommonstockoftheotherentity.Undertheequitymethod,investmentsarecarriedatcost,plusorminusourequityintheincreasesanddecreasesintheinvestee’snetassetsafterthedateofacquisition.Wemonitorourequitymethodinvestmentsforfactorsindicatingother-than-temporaryimpairment.Dividendsreceivedfromtheinvesteereducethecarryingamountoftheinvestment.

Management’suseofestimatesThepreparationoffinancialstatementsinconformitywithU.S.GAAPrequiresmanagementtomake

estimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatementsandthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.

SummaryofsignificantaccountingpoliciesRevenuerecognitionOurrevenue(referredtoinourfinancialstatementsas“sales”)consistsprimarilyofthesaleofbeer,wine,

andspiritsdomesticallyintheU.S.Salesofproductsareforcashorotherwiseagreed-uponcreditterms.Ourpaymenttermsvarybylocationandcustomer,however,thetimeperiodbetweenwhenrevenueisrecognizedandwhenpaymentisdueisnotsignificant.Ourcustomersconsistprimarilyofwholesaledistributors.Ourrevenuegeneratingactivitieshaveasingleperformanceobligationandarerecognizedatthepointintimewhencontroltransfersandourobligationhasbeenfulfilled,whichiswhentherelatedgoodsareshippedordeliveredtothecustomer,dependinguponthemethodofdistribution,andshippingterms.Wehaveelectedtotreatshippingasafulfillmentactivity.Revenueismeasuredastheamountofconsiderationweexpecttoreceiveinexchangeforthesaleofourproduct.Oursalestermsdonotallowforarightofreturnexceptformattersrelatedtoanymanufacturingdefectsonourpart.Amountsbilledtocustomersforshippingandhandlingareincludedinsales.

Asnoted,themajorityofourrevenuesaregeneratedfromthedomesticsaleofbeer,wine,andspiritstowholesaledistributorsintheU.S.Ourotherrevenuegeneratingactivitiesincludetheexportofcertainofourproductstoselectinternationalmarkets,aswellasthesaleofourproductsthroughstatealcoholbeveragecontrolagencies,on-premise,retaillocationsincertainmarkets,andeCommerce,includingDTC.Wehaveevaluatedtheseotherrevenuegeneratingactivitiesunderthedisaggregationdisclosurecriteriaandconcludedthattheyareimmaterialforseparatedisclosure.SeeNote22fordisclosureofnetsalesbyproducttype.



Salesreflectreductionsattributabletoconsiderationgiventocustomersinvariouscustomerincentiveprograms,includingpricingdiscountsonsingletransactions,volumediscounts,promotionalandadvertisingallowances,coupons,andrebates.Thisvariableconsiderationisrecognizedasareductionofthetransactionpricebaseduponexpectedamountsatthetimerevenueforthecorrespondingproductsaleisrecognized.Forexample,customerpromotionaldiscountprogramsareenteredintowithcertaindistributorsforcertainperiodsoftime.Theamountultimatelyreimbursedtodistributorsisdeterminedbaseduponagreed-uponpromotionaldiscountswhichareappliedtodistributors’salestoretailers.Othercommonformsofvariableconsiderationincludevolumerebatesformeetingestablishedsalestargets,andcouponsandmail-inrebatesofferedtotheendconsumer.Thedeterminationofthereductionofthetransactionpriceforvariableconsiderationrequiresthatwemakecertainestimatesandassumptionsthataffectthetimingandamountsofrevenueandliabilitiesrecognized.Weestimatethisvariableconsiderationbytakingintoaccountfactorssuchasthenatureofthepromotionalactivity,historicalinformation,andcurrenttrends,availabilityofactualresultsandexpectationsofcustomerandconsumerbehavior.

Excisetaxesremittedtotaxauthoritiesaregovernment-imposedexcisetaxesonourbeveragealcoholproducts.Excisetaxesareshownonaseparatelineitemasareductionofsalesandarerecognizedinourresultsofoperationswhentherelatedproductsaleisrecognized.Excisetaxesarerecognizedasacurrentliabilityinotheraccruedexpensesandliabilities,withtheliabilitysubsequentlyreducedwhenthetaxesareremittedtothetaxauthority.

CostofproductsoldThetypesofcostsincludedincostofproductsoldarerawmaterials,packagingmaterials,manufacturing

costs,plantadministrativesupportandoverheads,andfreightandwarehousecosts(includingdistributionnetworkcosts).Distributionnetworkcostsincludeinboundfreightchargesandoutboundshippingandhandlingcosts,purchasingandreceivingcosts,inspectioncosts,warehousingandinternaltransfercosts.

Selling,general,andadministrativeexpensesThetypesofcostsincludedinselling,general,andadministrativeexpensesconsistpredominatelyof

advertisingandnon-manufacturingadministrativeandoverheadcosts.Distributionnetworkcostsareincludedincostofproductsold.Weexpenseadvertisingcostsasincurred,shown,ordistributed.AdvertisingexpensefortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020,was$826.4million,$805.0million,and$769.5million,respectively.

ForeigncurrencytranslationThefunctionalcurrencyofourforeignsubsidiariesisgenerallytherespectivelocalcurrency.The

translationfromtheapplicableforeigncurrenciestoU.S.dollarsisperformedforbalancesheetaccountsusingexchangeratesineffectatthebalancesheetdateandforrevenueandexpenseaccountsusingaweightedaverageexchangeratefortheperiod.TheresultingtranslationadjustmentsarerecognizedasacomponentofAOCI.Gainsorlossesresultingfromforeigncurrencydenominatedtransactionsareincludedinselling,general,andadministrativeexpenses.

CashandcashequivalentsCashequivalentsconsistofhighlyliquidinvestmentswithanoriginalmaturitywhenpurchasedofthree

monthsorlessandarestatedatcost,whichapproximatesfairvalue.

InventoriesInventoriesarestatedatthelowerofcost(primarilycomputedinaccordancewiththefirst-in,first-out

method)ornetrealizablevalue.Elementsofcostincludematerials,labor,andoverhead.

Bulkwineinventoriesareincludedasin-processinventorieswithincurrentassets,inaccordancewiththegeneralpracticesofthewineindustry,althoughaportionofsuchinventoriesmaybeagedforperiodsgreaterthanoneyear.Asubstantialportionofbarreledwhiskeyandbrandywillnotbesoldwithinoneyearbecauseofthedurationoftheagingprocess.Allbarreledwhiskeyandbrandyareclassifiedasin-processinventoriesandare



includedincurrentassets,inaccordancewithindustrypractice.Warehousing,insurance,valueaddedtaxes,andothercarryingchargesapplicabletobarreledwhiskeyandbrandyheldforagingareincludedininventorycosts.

Weassessthevaluationofourinventoriesandreducethecarryingvalueofthoseinventoriesthatareobsoleteorinexcessofourforecastedusagetotheirestimatednetrealizablevaluebasedonanalysesandassumptionsincluding,butnotlimitedto,historicalusage,futuredemand,andmarketrequirements.

Property,plant,andequipmentProperty,plant,andequipmentisstatedatcost.Majoradditionsandimprovementsarerecognizedasan

increasetothepropertyaccounts,whilemaintenanceandrepairsareexpensedasincurred.Thecostofpropertiessoldorotherwisedisposedofandtherelatedaccumulateddepreciationareeliminatedfromthebalancesheetaccountsatthetimeofdisposalandresultinggainsandlossesareincludedasacomponentofoperatingincome.

Interestincurredrelatingtoexpansion,optimization,andconstructionoffacilitiesiscapitalizedtoconstructioninprogress.Weceasethecapitalizationofinterestwhenconstructionactivitiesaresubstantiallycompletedandthefacilityandrelatedassetsareavailablefortheirintendeduse.Atthispoint,constructioninprogressistransferredtotheappropriateassetclass.

DepreciationDepreciationiscomputedprimarilyusingthestraight-linemethodoverthefollowingestimateduseful

lives:Years

Landimprovements 15to32Vineyards 16to26Buildingsandimprovements 10to50Machineryandequipment 3to35Motorvehicles 3to8

DerivativeinstrumentsWeenterintoderivativeinstrumentstomanageourexposuretofluctuationsinforeigncurrencyexchange

rates,commodityprices,andinterestrates.Weenterintoderivativesforriskmanagementpurposesonly,includingderivativesdesignatedinhedgeaccountingrelationshipsaswellasthosederivativesutilizedaseconomichedges.Wedonotenterintoderivativesfortradingorspeculativepurposes.Werecognizeallderivativesaseitherassetsorliabilitiesandmeasurethoseinstrumentsatestimatedfairvalue(seeNotes6and7).Wepresentourderivativepositionsgrossonourbalancesheets.

Thechangeinthefairvalueofoutstandingcashflowhedgesisdeferredinstockholders’equityasacomponentofAOCI.Forallperiodspresentedherein,gainsorlossesdeferredinstockholders’equityasacomponentofAOCIarerecognizedinourresultsofoperationsinthesameperiodinwhichthehedgeditemsarerecognizedandonthesamefinancialstatementlineitemasthehedgeditems.

Changesinfairvaluesforderivativeinstrumentsnotdesignatedinahedgeaccountingrelationshiparerecognizeddirectlyinourresultsofoperationseachperiodandonthesamefinancialstatementlineitemasthehedgeditem.Forpurposesofmeasuringsegmentoperatingperformance,thenetgain(loss)fromthechangesinfairvalueofourundesignatedcommodityderivativecontracts,priortosettlement,isreportedoutsideofsegmentoperatingresultsuntilsuchtimethattheunderlyingexposureisrecognizedinthesegmentoperatingresults.Uponsettlement,thenetgain(loss)fromthechangesinfairvalueoftheundesignatedcommodityderivativecontractsisreportedintheappropriateoperatingsegment,allowingouroperatingsegmentresultstoreflecttheeconomiceffectsofthecommodityderivativecontractswithouttheresultingunrealizedmarktofairvaluevolatility.



Cashflowsfromthesettlementofderivatives,includingbotheconomichedgesandthosedesignatedinhedgeaccountingrelationships,appearonourstatementsofcashflowsinthesamecategoriesasthecashflowsofthehedgeditems.

FairvalueoffinancialinstrumentsWecalculatetheestimatedfairvalueoffinancialinstrumentsusingquotedmarketpriceswhenever

available.Whenquotedmarketpricesarenotavailable,weusestandardpricingmodelsforvarioustypesoffinancialinstruments(suchasforwards,options,swaps,andconvertibledebt)whichtakeintoaccountthepresentvalueofestimatedfuturecashflows(seeNote7).

GoodwillandotherintangibleassetsGoodwillisallocatedtothereportingunitinwhichthebusinessthatcreatedthegoodwillresides.A

reportingunitisanoperatingsegment,orabusinessunitonelevelbelowthatoperatingsegment,forwhichdiscretefinancialinformationispreparedandregularlyreviewedbysegmentmanagement.Wereviewourgoodwillandindefinite-livedintangibleassetsannuallyforimpairment,orsooner,ifeventsorchangesincircumstancesindicatethatthecarryingamountofanassetmaynotberecoverable.WeuseJanuary1asourannualimpairmenttestmeasurementdate.Indefinite-livedintangibleassetsconsistprincipallyoftrademarks.Intangibleassetsdeterminedtohaveafinitelife,primarilycustomerrelationships,areamortizedovertheirestimatedusefullivesandaresubjecttoreviewforimpairmentwheneventsorcircumstancesindicatethatthecarryingamountofanassetmaynotberecoverable.Note9providesasummaryofintangibleassetssegregatedbetweenamortizableandnonamortizableamounts.

IncometaxesWeusetheassetandliabilitymethodofaccountingforincometaxes.Thismethodaccountsfordeferred

incometaxesbyapplyingstatutoryratesineffectatthebalancesheetdatetothedifferencebetweenthefinancialreportingandtaxbasesofassetsandliabilities.Certainincomeearnedbyforeignsubsidiaries,GILTI,issubjecttoU.S.tax.WetreatthetaxeffectofGILTIasacurrentperiodtaxexpensewhenincurred.Weprovidedeferredincometaxes,consistingprimarilyofforeignwithholdingandstatetaxes,onallapplicableunremittedearningsofourforeignsubsidiaries.Interestandpenaltiesarerecognizedasacomponentof(provisionfor)benefitfromincometaxes.

Werecognizeataxbenefitfromanuncertaintaxpositionwhenitismorelikelythannotthepositionwillbesustaineduponexamination.Wemeasureandrecognizethetaxbenefitfromsuchapositionbasedonthelargestbenefitthathasagreaterthan50%likelihoodofbeingrealizeduponultimatesettlement.Duetothecomplexityofsomeoftheseuncertainties,theultimateresolutionmayresultinapaymentthatismateriallydifferentfromourcurrentestimateoftheunrecognizedtaxbenefitliabilities.Inaddition,changesinexistingtaxlawsorratescouldsignificantlychangeourcurrentestimateofourunrecognizedtaxbenefitliabilities.Thesedifferenceswillbereflectedasincreasesordecreasestoincometaxexpenseintheperiodinwhichtheyaredetermined.Changesincurrentestimates,ifsignificant,couldhaveamaterialadverseimpactonourfinancialstatements.

LeasesWerecognizeright-of-useassetsandleaseliabilitiesonourbalancesheet.Weassessservice

arrangementstodetermineifanassetisexplicitlyorimplicitlyspecifiedintheagreementandifwehavetherighttocontroltheuseoftheidentifiedasset.

Theright-of-useassetandleaseliabilityareinitiallymeasuredatthepresentvalueoffutureleasepayments,discountedusingtheinterestrateimplicitintheleaseor,ifthatratecannotbereadilydetermined,oursecuredincrementalborrowingrate.Theincrementalborrowingratesaredeterminedusingaportfolioapproachbasedonpubliclyavailableinformationinconnectionwithourunsecuredborrowingrates.Weelectedtorecognizeexpensesforleaseswithatermof12monthsorlessonastraight-linebasisovertheleasetermandnottorecognizetheseshort-termleasesonthebalancesheet.

Theright-of-useassetandleaseliabilityarecalculatedincludingoptionstoextendortoterminatetheleasewhenwedeterminethatitisreasonablycertainthatwewillexercisethoseoptions.Inmakingthat



determination,weconsidervariousexistingeconomicandmarketfactors,businessstrategiesaswellasthenature,length,andtermsoftheagreement.Basedonourevaluationusingthesefactors,weconcludedthattheexerciseofrenewaloptionsorearlyterminationoptionswouldnotbereasonablycertainindeterminingtheleasetermatcommencementforleaseswecurrentlyhaveinplace.Assumptionsmadeatthecommencementdatearere-evaluateduponoccurrenceofcertaineventssuchasaleasemodification.

Certainofourcontractualarrangementsmaycontainbothleaseandnon-leasecomponents.Weelectedtomeasuretheleaseliabilitybycombiningtheleaseandnon-leasecomponentsasasingleleasecomponentforallassetclasses.

Certainofourleasesincludevariableleasepayments,includingpaymentsthatdependonanindexorrate,aswellasvariablepaymentsforitemssuchasrawmaterials,labor,propertytaxes,insurance,maintenance,andotheroperatingexpensesassociatedwithleasedassets.Certaingrapepurchasingarrangementsincludevariablepaymentsbasedonactualtonnageandpriceofgrapes.Inaddition,certainthird-partylogisticsarrangementsincludevariablepaymentsthatvarydependingonthroughput.Suchvariableleasepaymentsareexcludedfromthecalculationoftheright-of-useassetandtheleaseliabilityandarerecognizedintheperiodinwhichtheobligationisincurred.

IndemnificationliabilitiesWehaveindemnifiedrespectivepartiesagainstcertainliabilitiesthatmayariseinconnectionwithcertain

acquisitionsanddivestitures.Indemnificationliabilitiesarerecognizedwhenprobableandestimableandincludedindeferredincometaxesandotherliabilities(seeNote16).

Stock-basedemployeecompensationWehavetwostock-basedemployeecompensationplans(seeNote18).Weapplygrantdatefair-value-

basedmeasurementmethodsinaccountingforourstock-basedpaymentarrangementsandrecognizeallcostsresultingfromstock-basedpaymenttransactions,netofexpectedforfeitures,ratablyovertherequisiteserviceperiod.Stock-basedawardsaresubjecttospecificvestingconditions,generallytimevesting,oruponretirement,disability,ordeathoftheemployee(asdefinedbytheplan),ifearlier.Forawardsgrantedtoretirement-eligibleemployees,werecognizecompensationexpenseratablyovertheperiodfromthedateofgranttothedateofretirement-eligibility.

Netincome(loss)percommonshareattributabletoCBIWehavetwoclassesofcommonstockwithamaterialnumberofsharesoutstanding:ClassAStockand

ClassBStock(seeNote17).Inaddition,wehaveanotherclassofcommonstockwithanimmaterialnumberofsharesoutstanding:Class1Stock(seeNote17).IfwepayacashdividendonClassBStock,eachshareofClassAStockwillreceiveanamountatleast10%greaterthantheamountofthecashdividendpersharepaidonClassBStock.ClassBStocksharesareconvertibleintosharesofClassAStockonaone-to-onebasisatanytimeattheoptionoftheholder.

Weusethetwo-classmethodforthecomputationandpresentationofnetincome(loss)percommonshareattributabletoCBI(hereafterreferredtoas“netincome(loss)percommonshare”)(seeNote19).Thetwo-classmethodisanearningsallocationformulathatcalculatesbasicanddilutednetincome(loss)percommonshareforeachclassofcommonstockseparatelybasedondividendsdeclaredandparticipationrightsinundistributedearningsasifallsuchearningshadbeendistributedduringtheperiod.Underthetwo-classmethod,ClassAStockisassumedtoreceivea10%greaterparticipationinundistributedearnings(losses)thanClassBStock,inaccordancewiththerespectiveminimumdividendrightsofeachclassofstock.

Netincome(loss)percommonshare–basicexcludestheeffectofcommonstockequivalentsandiscomputedusingthetwo-classmethod.Netincome(loss)percommonshare–dilutedforClassAStockreflectsthepotentialdilutionthatcouldresultifsecuritiesorothercontractstoissuecommonstockwereexercisedorconvertedintocommonstock.Netincome(loss)percommonshare–dilutedforClassAStockiscomputedusingthemoredilutiveoftheif-convertedortwo-classmethod.Netincome(loss)percommonshare–dilutedforClassAStockiscomputedusingtheif-convertedmethodfortheyearendedFebruary28,2021,andassumestheexerciseofstockoptionsusingthetreasurystockmethodandtheconversionofClassBStockasthismethodis



moredilutivethanthetwo-classmethod.FortheyearsendedFebruary28,2022,andFebruary29,2020,netincome(loss)percommonshare–dilutedforClassAStockiscomputedusingthetwo-classmethod.Netincome(loss)percommonshare–dilutedforClassBStockiscomputedusingthetwo-classmethodanddoesnotassumeconversionofClassBStockintosharesofClassAStock.

2. ACQUISITIONSANDDIVESTITURES

AcquisitionsMyFavoriteNeighborInNovember2021,weacquiredtheremaining65%ownershipinterestinMyFavoriteNeighbor,asuper-

luxury,DTCfocusedwinebusinessaswellascertainwholesalesourcedbrands.Thistransactionprimarilyincludedtheacquisitionofgoodwill,trademarks,inventory,andproperty,plant,andequipment.Inaddition,theMyFavoriteNeighbortransactionincludesanearn-outover10yearsbasedonperformance,witha50%minimumguaranteedueattheendoftheearn-outperiod.TheresultsofoperationsofMyFavoriteNeighborarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

Werecognizedagainof$13.5millionfortheyearendedFebruary28,2022,relatedtotheremeasurementofourpreviouslyheld35%equityinterestinMyFavoriteNeighbortotheacquisition-datefairvalue.Thisgainisincludedinselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperations.SeeNote10forfurtherdiscussion.

Copper&KingsInSeptember2020,weacquiredtheremainingownershipinterestinCopper&Kings.Thisacquisition

includedacollectionoftraditionalandcraftbatch-distilledAmericanbrandiesandotherselectspirits.Thetransactionprimarilyincludedtheacquisitionofinventoryandproperty,plant,andequipment.TheresultsofoperationsofCopper&KingsarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

EmpathyWinesInJune2020,weacquiredEmpathyWines,includingtheacquisitionofadigitally-nativewinebrandwhich

strengthensourpositionintheDTCandothereCommercemarkets.Thistransactionprimarilyincludedtheacquisitionofgoodwill,trademarks,andinventory.Inaddition,thepurchasepriceforEmpathyWinesincludesanearn-outoverfiveyearsbasedonperformance.TheresultsofoperationsofEmpathyWinesarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

Nelson’sGreenBrierInMay2019,weincreasedourownershipinterestinTennessee-basedNelson’sGreenBrierto75%,

resultinginconsolidationofthebusinessandrecognitionofa25%noncontrollinginterest.Thisacquisitionincludedaportfolioofcraftbourbonandwhiskeyproducts.Thefairvalueofthebusinesscombinationwasallocatedprimarilytogoodwill,trademarks,inventory,andproperty,plant,andequipment.TheresultsofoperationsofNelson’sGreenBrierarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

Werecognizedagainof$11.8millionfortheyearendedFebruary29,2020,relatedtotheremeasurementofourpreviouslyheld20%equityinterestinNelson’sGreenBriertotheacquisition-datefairvalue.Thisgainisincludedinselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperations.

DivestituresPaulMassonDivestitureOnJanuary12,2021,wesoldthePaulMassonGrandeAmberBrandybrand,relatedinventory,and

interestsincertaincontracts.Wereceivedcashproceedsof$267.4million,netofpost-closingadjustments,which



wereusedforgeneralcorporatepurposes.PriortothePaulMassonDivestiture,werecordedtheresultsofoperationsofourPaulMassonGrandeAmberBrandybusinessintheWineandSpiritssegment.InconnectionwiththePaulMassonDivestiture,weenteredintoatransitionservicesagreementwithSazeracCompanywherebyourretainedMissionBellfacilitywillprovidecertainbulkwineprocessingservicesatmarketratesforaperiodofuptothreeyears.Thefollowingtablesummarizesthenetgainrecognized,primarilyfortheyearendedFebruary28,2021,inconnectionwiththisdivestiture:

(inmillions)

Cashreceivedfrombuyer $ 272.0

Netassetssold (206.4)

Contracttermination (4.0)

Directcoststosell (3.2)

Gainonsaleofbusiness $ 58.4

WineandSpiritsDivestituresOnJanuary5,2021,wesoldaportionofourwineandspiritsbusiness,includinglower-margin,lower

growthwineandspiritsbrands,relatedinventory,interestsincertaincontracts,wineries,vineyards,offices,andfacilities.Wereceivednetcashproceedsof$538.4million,fromtheWineandSpiritsDivestiture,netofpost-closingadjustments.Inaddition,wehavethepotentialtoearnanincremental$250millionofcontingentconsiderationifcertainbrandperformancetargetsaremetoveratwo-yearperiodafterclosing.

OnJanuary5,2021,inaseparate,butrelatedtransactionwiththesamebuyer,Gallo,wealsosoldtheNewZealand-basedNobiloWinebrandandcertainrelatedassets.Wereceivedcashproceedsof$129.0million,fromtheNobiloWineDivestiture,netofpost-closingadjustments.

InconnectionwiththeWineandSpiritsDivestitures,weenteredintocertaintransitionservicesagreementswithGallowherebyweprovidecertaincellar,package,andstorageservicesprimarilyatMissionBell.Werecordeda$13.0millionliabilityrelatedtotheunfavorabletransitionservicesagreements,whichwasincludedinthenetlossonsaleofbusinessfortheyearendedFebruary28,2021,andisbeingamortizedovertheexpectedtermofthecontractstoselling,general,andadministrativeexpensesbothwithinourconsolidatedresultsofoperations.

ThecashproceedsfromtheWineandSpiritsDivestitureswereutilizedtoreduceoutstandingdebtandforothergeneralcorporatepurposes.PriortotheWineandSpiritsDivestitures,werecordedtheresultsofoperationsforthisportionofourbusinessintheWineandSpiritssegment.Thefollowingtablesummarizesthenetlossrecognized,primarilyfortheyearendedFebruary28,2021,inconnectionwiththesedivestitures:

(inmillions)



Transitionservicesagreements (13.0)


AOCIreclassificationadjustments,primarilyforeigncurrencytranslation (5.1)

Other (5.2)

Lossonsaleofbusiness $ (33.6)

ConcentrateBusinessDivestitureOnDecember29,2020,wesoldcertainbrandsusedinourconcentratesandhigh-colorconcentrate

business,andcertainrelatedintellectualproperty,inventory,interestsincertaincontracts,andotherassets.PriortotheConcentrateBusinessDivestiture,werecordedtheresultsofoperationsofourconcentratesandhigh-colorconcentratebusinessintheWineandSpiritssegment.



BallastPointDivestitureOnMarch2,2020,wesoldtheBallastPointcraftbeerbusiness,includinganumberofitsassociated

productionfacilitiesandbrewpubs.PriortotheBallastPointDivestiture,werecordedtheresultsofoperationsoftheBallastPointcraftbeerbusinessintheBeersegment.Wereceivedcashproceedsof$41.1million,whichwereprimarilyutilizedtoreduceoutstandingborrowings.

BlackVelvetDivestitureOnNovember1,2019,wesoldtheBlackVelvetCanadianWhiskybusinessandthebrand’sassociated

productionfacility,alongwithasubsetofCanadianwhiskybrandsproducedatthatfacility,andrelatedinventory.Wereceivedcashproceedsof$266.7million,netofpost-closingadjustments,whichwereutilizedtoreduceoutstandingdebt.PriortotheBlackVelvetDivestiture,werecordedtheresultsofoperationsofourBlackVelvetCanadianWhiskybusinessintheWineandSpiritssegment.Thefollowingtablesummarizesthenetgainrecognized,primarilyfortheyearendedFebruary29,2020,inconnectionwiththisdivestiture:

(inmillions)



AOCIreclassificationadjustments,primarilyforeigncurrencytranslation 20.9


Gainonsaleofbusiness $ 70.5

SubsequenteventsOtheracquisitionsDuringthefirstquarterofFiscal2023,wecompletedtheacquisitionsofotherbusinesses,consistingof

LinguaFranca,whichincludedacollectionofluxurywines,avineyard,andaproductionfacility,andtheremaining73%ownershipinterestinAustinCocktails,whichincludedaportfolioofsmallbatch,RTDcocktails.Thepurchasepriceforeachacquisitionincludesanearn-outbasedontheperformanceoftherespectivebrands.TheresultsofoperationsoftheseacquiredbusinesseswillbereportedintheWineandSpiritssegmentandwillbeincludedinourconsolidatedresultsofoperationsfromtheirrespectivedateofacquisition.

3. INVENTORIES

Thecomponentsofinventoriesareasfollows:

February28,2022

February28,2021

(inmillions)

Rawmaterialsandsupplies $ 185.3 $ 151.1

In-processinventories 804.8 735.9

Finishedcasegoods 583.1 404.1

$ 1,573.2 $ 1,291.1

Weevaluatedthecarryingvalueofcertaininventoriesandrecognizedthefollowingincostofproductsoldwithinourconsolidatedresultsofoperations:

FortheYearsEnded

February28,2022(1)

February28,2021(2)

February29,2020(3)

(inmillions)

Lossoninventorywrite-down $ 87.7 $ 100.7 $ 124.4

(1) Werecognizedalosspredominantlyfromexcessinventoryofhardseltzers,withintheBeersegment,largelyresultingfromaslowdownintheoverallcategorywhichoccurredinearlyFiscal2022.



(2) Werecognizedalossprimarilyinconnectionwiththewrite-downofcertaingrapes,withintheWineandSpiritssegment,asaresultofsmokedamagesustainedduringthe2020U.S.wildfires.

(3) Werecognizedalossprimarilyinconnectionwithrestructuringandbusinessdevelopmentcostsresultingfromourbusinesstransformationstrategywhichalignedourportfoliowithconsumer-ledpremiumizationtrendswithintheWineandSpiritssegment.

4. PREPAIDEXPENSESANDOTHER

Themajorcomponentsofprepaidexpensesandotherareasfollows:

February28,2022

February28,2021

(inmillions)

Prepaidtaxes $ 254.1 $ 76.0

Valueaddedtaxesreceivable 193.0 257.8

Derivativeassets 92.6 48.7

Incometaxesreceivable 27.2 45.4

Other 91.2 79.6

$ 658.1 $ 507.5

5. PROPERTY,PLANT,ANDEQUIPMENT

Themajorcomponentsofproperty,plant,andequipmentareasfollows:

February28,2022

February28,2021

(inmillions)

Landandlandimprovements $ 456.2 $ 434.0

Vineyards 255.3 226.0

Buildingsandimprovements 1,109.4 983.4

Machineryandequipment 4,827.8 3,696.9

Motorvehicles 140.0 131.3

Constructioninprogress(1)(2) 1,223.2 2,084.2

8,011.9 7,555.8

Less–Accumulateddepreciation (1,952.3) (1,734.2)

$ 6,059.6 $ 5,821.6

(1) ThebalanceatFebruary28,2022,isnetofanimpairmentofbreweryconstructioninprogressof$665.9million.SeeNote7forfurtherdiscussion.

(2) Interestcostsincurredduringtheexpansion,optimization,andconstructionoffacilitiesarecapitalizedtoconstructioninprogress.Wecapitalizedinterestcostsof$25.3million,$31.5million,and$37.2millionfortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020,respectively,primarilyduetotheMexicoBeerProjects.

LodiDistributionCenterInDecember2021,wepurchasedapreviouslyleasedwineandspiritsdistributionfacilitylocatedinLodi,

California.



6. DERIVATIVEINSTRUMENTS

OverviewWeareexposedtomarketriskfromchangesinforeigncurrencyexchangerates,commodityprices,

interestrates,andequitypricesthatcouldaffectourresultsofoperationsandfinancialcondition.Theimpactonourresultsandfinancialpositionandtheamountsreportedinourfinancialstatementswillvarybaseduponthecurrency,commodity,interestrate,andequitymarketmovementsduringtheperiod,theeffectivenessandlevelofderivativeinstrumentsoutstanding,andwhethertheyaredesignatedandqualifyforhedgeaccounting.

Theestimatedfairvaluesofourderivativeinstrumentschangewithfluctuationsincurrencyrates,commodityprices,interestrates,and/orequitypricesandareexpectedtooffsetchangesinthevaluesoftheunderlyingexposures.Ourderivativeinstrumentsareheldsolelytomanageourexposurestotheaforementionedmarketrisksaspartofournormalbusinessoperations.Wefollowstrictpoliciestomanagetheserisksanddonotenterintoderivativeinstrumentsfortradingorspeculativepurposes.

WehaveaninvestmentincertainequitysecuritiesandotherrightswhichprovideuswiththeoptiontopurchaseanadditionalownershipinterestintheequitysecuritiesofCanopy(seeNote10).Thisinvestmentisincludedinsecuritiesmeasuredatfairvalueandisaccountedforatfairvalue,withthenetgain(loss)fromthechangesinfairvalueofthisinvestmentrecognizedinincome(loss)fromunconsolidatedinvestments(seeNote7).

Theaggregatenotionalvalueofoutstandingderivativeinstrumentsisasfollows:

Derivativeinstrumentsdesignatedashedginginstruments

Foreigncurrencycontracts $ 1,863.2 $ 1,558.0

Swaplockcontracts $ 100.0 $ —

Derivativeinstrumentsnotdesignatedashedginginstruments

Foreigncurrencycontracts $ 497.6 $ 704.7

Commodityderivativecontracts $ 291.1 $ 221.6

February28,2022

February28,2021

(inmillions)

CashflowhedgesOurderivativeinstrumentsdesignatedinhedgeaccountingrelationshipsaredesignatedascashflow

hedges.Weareexposedtoforeigndenominatedcashflowfluctuationsprimarilyinconnectionwiththirdpartyandintercompanysalesandpurchases.Weprimarilyuseforeigncurrencyforwardcontractstohedgecertainoftheserisks.Inaddition,weutilizeinterestrateswap,treasurylock,andswaplockcontractsperiodicallytomanageourexposuretochangesininterestrates.Derivativesmanagingourcashflowexposuresgenerallymaturewithinthreeyearsorless,withamaximummaturityoffiveyears.

Toqualifyforhedgeaccountingtreatment,thedetailsofthehedgingrelationshipmustbeformallydocumentedatinceptionofthearrangement,includingtheriskmanagementobjective,hedgingstrategy,hedgeditem,specificriskthatisbeinghedged,thederivativeinstrument,howeffectivenessisbeingassessed,andhowineffectivenesswillbemeasured.Thederivativemustbehighlyeffectiveinoffsettingchangesinthecashflowsoftheriskbeinghedged.Throughoutthetermofthedesignatedcashflowhedgerelationshiponatleastaquarterlybasis,aretrospectiveevaluationandprospectiveassessmentofhedgeeffectivenessisperformedbasedonquantitativeandqualitativemeasures.Allcomponentsofourderivativeinstruments’gainsorlossesareincludedintheassessmentofhedgeeffectiveness.

Whenwedeterminethataderivativeinstrumentwhichqualifiedforhedgeaccountingtreatmenthasceasedtobehighlyeffectiveasahedge,wediscontinuehedgeaccountingprospectively.Intheeventtherelationshipisnolongereffective,werecognizethechangeinthefairvalueofthehedgingderivativeinstrumentfromthedatethehedgingderivativeinstrumentbecamenolongereffectiveimmediatelyinourresultsof



operations.Wealsodiscontinuehedgeaccountingprospectivelywhen(i)aderivativeexpiresorissold,terminated,orexercised;(ii)itisnolongerprobablethattheforecastedtransactionwilloccur;or(iii)wedeterminethatdesignatingthederivativeasahedginginstrumentisnolongerappropriate.Whenwediscontinuehedgeaccountingprospectively,buttheoriginalforecastedtransactioncontinuestobeprobableofoccurring,theexistinggainorlossofthederivativeinstrumentremainsinAOCIandisreclassifiedintoearnings(losses)whentheforecastedtransactionoccurs.Whenitbecomesprobablethattheforecastedtransactionwillnotoccur,anyremaininggainorlossinAOCIisrecognizedimmediatelyinourresultsofoperations.

Weexpect$18.2millionofnetgains,netofincometaxeffect,tobereclassifiedfromAOCItoourresultsofoperationswithinthenext12months.

UndesignatedhedgesCertainofourderivativeinstrumentsdonotqualifyforhedgeaccountingtreatment;forothers,we

choosenottomaintaintherequireddocumentationtoapplyhedgeaccountingtreatment.Theseundesignatedinstrumentsareprimarilyusedtoeconomicallyhedgeourexposuretofluctuationsinthevalueofforeigncurrencydenominatedreceivablesandpayables;foreigncurrencyinvestments,primarilyconsistingofloanstosubsidiariesandforeign-denominatedinvestments,andcashflowsrelatedprimarilytotherepatriationofthoseloansorinvestments;andcommodityprices,includingaluminum,corn,dieselfuel,andnaturalgasprices.Weprimarilyuseforeigncurrencyforwardandoptioncontracts,generallylessthan12monthsinduration,andcommodityswapcontracts,generallylessthan36monthsinduration,withamaximummaturityoffouryears,tohedgesomeoftheserisks.Inaddition,fromtimetotime,weutilizeinterestrateswapcontracts,generallylessthansixmonthsinduration,toeconomicallyhedgeourexposuretochangesininterestratesassociatedwiththefinancingofsignificantinvestmentsandacquisitions.Ourderivativepolicypermitstheuseofundesignatedderivativesasapprovedbyseniormanagement.

CreditriskWeareexposedtocredit-relatedlossesifthecounterpartiestoourderivativecontractsdefault.This

creditriskislimitedtothefairvalueofthederivativecontracts.Tomanagethisrisk,wecontractonlywithmajorfinancialinstitutionsthathaveearnedinvestment-gradecreditratingsandwithwhomwehavestandardInternationalSwapsandDerivativesAssociationagreementswhichallowfornetsettlementofthederivativecontracts.Wehavealsoestablishedcounterpartycreditguidelinesthatareregularlymonitored.Becauseofthesesafeguards,webelievetheriskoflossfromcounterpartydefaulttobeimmaterial.

Inaddition,ourderivativeinstrumentsarenotsubjecttocreditratingcontingenciesorcollateralrequirements.AsofFebruary28,2022,theestimatedfairvalueofderivativeinstrumentsinanetliabilitypositionduetocounterpartieswas$2.6million.IfwewererequiredtosettlethenetliabilitypositionunderthesederivativeinstrumentsonFebruary28,2022,wewouldhavehadsufficientavailableliquidityonhandtosatisfythisobligation.



ResultsofperiodderivativeactivityTheestimatedfairvalueandlocationofourderivativeinstrumentsonourbalancesheetsareasfollows

(seeNote7):

Derivativeinstrumentsdesignatedashedginginstruments

Foreigncurrencycontracts:

Prepaidexpensesandother $ 28.6 $ 32.0

Otheraccruedexpensesandliabilities $ 5.9 $ 3.5

Otherassets $ 25.1 $ 41.3Deferredincometaxesandotherliabilities $ 8.6 $ 2.7

Swaplockcontracts:

Otherassets $ — $ —Deferredincometaxesandotherliabilities $ 0.4 $ —

Derivativeinstrumentsnotdesignatedashedginginstruments

Foreigncurrencycontracts:



Commodityderivativecontracts:



Otherassets $ 29.7 $ 7.8Deferredincometaxesandotherliabilities $ 0.2 $ 1.4

Assets Liabilities

February28,2022

February28,2021

February28,2022

February28,2021

(inmillions)

Theprincipaleffectofourderivativeinstrumentsdesignatedincashflowhedgingrelationshipsonourresultsofoperations,aswellasOCI,netofincometaxeffect,isasfollows:

FortheYearEndedFebruary28,2022

Foreigncurrencycontracts $ 6.4 Sales $ (1.1)

Costofproductsold 37.3

Swaplockcontracts (0.3) Interestexpense —

Treasurylockcontracts — Interestexpense (2.3)

$ 6.1 $ 33.9


Foreigncurrencycontracts $ (31.1) Sales $ 1.4

Costofproductsold (25.4)

Interestrateswapcontracts (0.6) Interestexpense (1.1)

Treasurylockcontracts (16.1) Interestexpense (1.8)

$ (47.8) $ (26.9)

DerivativeInstrumentsinDesignatedCashFlowHedgingRelationships

NetGain(Loss)Recognized

inOCI

LocationofNetGain(Loss)Reclassifiedfrom

AOCItoIncome(Loss)

NetGain(Loss)ReclassifiedfromAOCItoIncome(Loss)

(inmillions)




Foreigncurrencycontracts $ 66.8 Sales $ —

Costofproductsold 20.2

Interestrateswapcontracts (0.5) Interestexpense —

Treasurylockcontracts (5.7) Interestexpense —

$ 60.6 $ 20.2

DerivativeInstrumentsinDesignatedCashFlowHedgingRelationships

NetGain(Loss)Recognized

inOCI

LocationofNetGain(Loss)Reclassifiedfrom

AOCItoIncome(Loss)

NetGain(Loss)ReclassifiedfromAOCItoIncome(Loss)

(inmillions)

Theeffectofourundesignatedderivativeinstrumentsonourresultsofoperationsisasfollows:


Commodityderivativecontracts Costofproductsold $ 109.9

Foreigncurrencycontracts Selling,general,andadministrativeexpenses (16.7)

$ 93.2


Commodityderivativecontracts Costofproductsold $ 25.1


$ 7.7


Commodityderivativecontracts Costofproductsold $ (49.0)


$ (56.8)

DerivativeInstrumentsNotDesignatedasHedgingInstruments

LocationofNetGain(Loss)RecognizedinIncome(Loss)

NetGain(Loss)

RecognizedinIncome(Loss)

(inmillions)

7. FAIRVALUEOFFINANCIALINSTRUMENTS

Authoritativeguidanceestablishesaframeworkformeasuringfairvalue,includingahierarchyforinputsusedinmeasuringfairvaluethatmaximizestheuseofobservableinputsandminimizestheuseofunobservableinputsbyrequiringthatthemostobservableinputsbeusedwhenavailable.Thehierarchyincludesthreelevels:

• Level1inputsarequotedpricesinactivemarketsforidenticalassetsorliabilities;• Level2inputsincludedatapointsthatareobservablesuchasquotedpricesforsimilarassetsor

liabilitiesinactivemarkets,quotedpricesforidenticalassetsorsimilarassetsorliabilitiesinmarketsthatarenotactive,andinputs(otherthanquotedprices)suchasvolatility,interestrates,andyieldcurvesthatareobservablefortheassetandliability,eitherdirectlyorindirectly;and

• Level3inputsareunobservabledatapointsfortheassetorliability,andincludesituationswherethereislittle,ifany,marketactivityfortheassetorliability.



FairvaluemethodologyThefollowingmethodsandassumptionsareusedtoestimatethefairvalueforeachclassofourfinancial

instruments:

ForeigncurrencyandcommodityderivativecontractsThefairvalueisestimatedusingmarket-basedinputs,obtainedfromindependentpricingservices,

enteredintovaluationmodels.Thesevaluationmodelsrequirevariousinputs,includingcontractualterms,marketforeignexchangeprices,marketcommodityprices,interest-rateyieldcurves,andcurrencyvolatilities,asapplicable(Level2fairvaluemeasurement).

Interestrateswap,swaplock,andtreasurylockcontractsThefairvalueisestimatedbasedonquotedmarketpricesfromrespectivecounterparties.Quotesare

corroboratedbyusingdiscountedcashflowcalculationsbaseduponforwardinterest-rateyieldcurves,whichareobtainedfromindependentpricingservices(Level2fairvaluemeasurement).

CanopyinvestmentEquitysecurities,Warrants–TheNovember2018CanopyWarrantsconsistofthreetranchesofwarrants,

including88.5millionTrancheAWarrantsexpiringNovember1,2023,whicharecurrentlyexercisable,38.4millionTrancheBWarrantsexpiringNovember1,2026,and12.8millionTrancheCWarrantsexpiringNovember1,2026.TheinputsusedtoestimatethefairvalueoftheNovember2018CanopyWarrantsareasfollows(1)(2):

February28,2022 February28,2021TrancheAWarrants(3)

TrancheBWarrants(4)

TrancheAWarrants(3)

TrancheBWarrants(4)

Exerciseprice(5) C$ 50.40 C$ 76.68 C$ 50.40 C$ 76.68

Valuationdatestockprice(6) C$ 9.04 C$ 9.04 C$ 41.90 C$ 41.90

Remainingcontractualterm(7) 1.7years 4.7years 2.7years 5.7years

Expectedvolatility(8) 75.0% 75.0% 70.0% 70.0%

Risk-freeinterestrate(9) 1.4% 1.7% 0.5% 1.1%

Expecteddividendyield(10) 0.0% 0.0% 0.0% 0.0%

(1) TheexercisepricefortheTrancheCWarrantsisbasedontheVWAPExercisePrice.TheTrancheCWarrantsarenotincludedinthetableasthereisnofairvalueassigned.

(2) InconnectionwiththeAcreageTransaction,weobtainedotherrightswhichincludeasharerepurchasecredit.IfCanopyhasnotpurchasedthelesserof27,378,866Canopycommonshares,orC$1,583.0millionworthofCanopycommonsharesforcancellationbetweenApril18,2019,andtwo-yearsafterthefullexerciseoftheTrancheAWarrants,wewillbecreditedanamountthatwillreducetheaggregateexercisepriceotherwisepayableuponeachexerciseoftheTrancheBWarrantsandTrancheCWarrants.ThecreditwillbeanamountequaltothedifferencebetweenC$1,583.0millionandtheactualpricepaidbyCanopyinpurchasingitscommonsharesforcancellation.ThelikelihoodofreceivingthesharerepurchasecreditifweweretofullyexercisetheTrancheAWarrantsisremote,therefore,nofairvaluehasbeenassigned.

(3) ThefairvalueisestimatedusingtheBlack-Scholesoption-pricingmodel(Level2fairvaluemeasurement).(4) ThefairvalueisestimatedusingMonteCarlosimulations(Level2fairvaluemeasurement).(5) Basedontheexercisepricefromtheapplicableunderlyingagreements.(6) BasedontheclosingmarketpriceforCanopycommonstockontheTSXasoftheapplicabledate.(7) Basedontheexpirationdateofthewarrants.(8) Basedonconsiderationofhistoricaland/orimpliedvolatilitylevelsoftheunderlyingequitysecurityandlimited

considerationofhistoricalpeergroupvolatilitylevels.(9) BasedontheimpliedyieldcurrentlyavailableonCanadianTreasuryzerocouponissueswitharemainingterm

equaltotheexpirationdateoftheapplicablewarrants.(10) Basedonhistoricaldividendlevels.



Debtsecurities,Convertible–WehaveelectedthefairvalueoptiontoaccountfortheCanopyDebtSecuritiesacquiredinJune2018forC$200.0million,or$150.5million.InterestincomeontheCanopyDebtSecuritiesiscalculatedusingtheeffectiveinterestmethodandisrecognizedseparatelyfromthechangesinfairvalueininterestexpense.TheCanopyDebtSecuritieshaveacontractualmaturityoffiveyearsfromthedateofissuancebutmaybeconvertedpriortomaturitybyeitherpartyupontheoccurrenceofcertainevents.Atsettlement,theCanopyDebtSecuritiescanbesettledattheoptionoftheissuer,incash,equitysharesoftheissuer,oracombinationthereof.Thefairvalueisestimatedusingabinomiallatticeoption-pricingmodel(Level2fairvaluemeasurement),whichincludesanestimateofthecreditspreadbasedonmarketspreadsusingbonddataasofthevaluationdate.

TheinputsusedtoestimatethefairvalueoftheCanopyDebtSecuritiesareasfollows:February28,

2022February28,

2021

Conversionprice(1) C$ 48.17 C$ 48.17

Valuationdatestockprice(2) C$ 9.04 C$ 41.90

Remainingterm(3) 1.4years 2.4years

Expectedvolatility(4) 75.0% 57.6%

Risk-freeinterestrate(5) 1.4% 0.4%

Expecteddividendyield(6) 0.0% 0.0%

(1) BasedontheratewhichtheCanopyDebtSecuritiesmaybeconvertedintoequityshares,ortheequivalentamountofcash,attheoptionoftheissuer.

(2) BasedontheclosingmarketpriceforCanopycommonstockontheTSXasoftheapplicabledate.(3) Basedonthecontractualmaturitydateofthenotes.(4) Basedonconsiderationofhistoricaland/orimpliedvolatilitylevelsoftheunderlyingequitysecurity,adjustedfor

certainrisksassociatedwithdebtsecurities,asappropriate.(5) BasedontheimpliedyieldcurrentlyavailableonCanadianTreasuryzerocouponissueswithatermequaltothe

remainingcontractualtermoftheCanopyDebtSecurities.(6) Basedonhistoricaldividendlevels.

Short-termborrowingsOurshort-termborrowingsconsistofourcommercialpaperprogramandtherevolvingcreditfacility

underourseniorcreditfacility.Therevolvingcreditfacilityisavariableinterestratebearingnotewithafixedmargin,adjustablebaseduponourdebtrating(asdefinedinourseniorcreditfacility).Fortheseshort-termborrowingsthecarryingvalueapproximatesthefairvalue.

Long-termdebtThetermloanunderourtermcreditagreementisavariableinterestratebearingnotewithafixed

margin,adjustablebaseduponourdebtrating.Thecarryingvalueapproximatesthefairvalueofthetermloan.Thefairvalueoftheremainingfixedinterestratelong-termdebtisestimatedbydiscountingcashflowsusinginterestratescurrentlyavailablefordebtwithsimilartermsandmaturities(Level2fairvaluemeasurement).

Thecarryingamountsofcertainofourfinancialinstruments,includingcashandcashequivalents,accountsreceivable,andaccountspayable,approximatefairvalueasofFebruary28,2022,andFebruary28,2021,duetotherelativelyshortmaturityoftheseinstruments.AsofFebruary28,2022,thecarryingamountoflong-termdebt,includingthecurrentportion,was$10,093.5million,comparedwithanestimatedfairvalueof$10,345.3million.AsofFebruary28,2021,thecarryingamountoflong-termdebt,includingthecurrentportion,was$10,442.3million,comparedwithanestimatedfairvalueof$11,580.9million.



RecurringbasismeasurementsThefollowingtablepresentsourfinancialassetsandliabilitiesmeasuredatestimatedfairvalueona

recurringbasis:

February28,2022

Assets:

Foreigncurrencycontracts $ — $ 56.4 $ — $ 56.4

Commodityderivativecontracts $ — $ 91.0 $ — $ 91.0

November2018CanopyWarrants(1) $ — $ 36.3 $ — $ 36.3

CanopyDebtSecurities(1) $ — $ 146.6 $ — $ 146.6

Liabilities:



Swaplockcontracts $ — $ 0.4 $ — $ 0.4

February28,2021

Assets:



November2018CanopyWarrants(1) $ — $ 1,639.7 $ — $ 1,639.7

CanopyDebtSecurities(1) $ — $ 176.3 $ — $ 176.3

Liabilities:



FairValueMeasurementsUsingQuotedPricesinActiveMarkets(Level1)

SignificantOther

ObservableInputs(Level2)

SignificantUnobservable

Inputs(Level3) Total

(inmillions)

(1) Unrealizednetgain(loss)fromthechangesinfairvalueofoursecuritiesmeasuredatfairvaluerecognizedinincome(loss)fromunconsolidatedinvestments,areasfollows:

February28,2022

February28,2021

(inmillions)

November2017CanopyWarrants(i) $ — $ (61.8)

November2018CanopyWarrants (1,603.4) 823.3

CanopyDebtSecurities (41.3) 40.5

$ (1,644.7) $ 802.0

(i) InMay2020,weexercisedtheNovember2017CanopyWarrantsatanexercisepriceofC$12.98perwarrantshareforC$245.0million,or$173.9million,andreceived18.9millioncommonsharesofCanopy.



NonrecurringbasismeasurementsThefollowingtablepresentsourassetsandliabilitiesmeasuredatestimatedfairvalueonanonrecurring

basisforwhichanimpairmentassessmentwasperformedfortheperiodspresented:


Long-livedassets $ — $ — $ 20.0 $ 665.9


Long-livedassetsheldforsale $ — $ — $ — $ 24.0

Trademarks — — 4.0 6.0

$ — $ — $ 4.0 $ 30.0


Long-livedassetsheldforsale $ — $ — $ 949.3 $ 449.7

Trademarks(1) — — — 11.0

$ — $ — $ 949.3 $ 460.7

FairValueMeasurementsUsing

QuotedPricesinActiveMarkets(Level1)

SignificantOther

ObservableInputs(Level2)

SignificantUnobservable

Inputs(Level3) TotalLosses

(inmillions)

(1) ThebalanceatFebruary29,2020,hasbeenreclassifiedtoassetsheldforsale(see“Trademarks”belowforfurtherdiscussion).

Long-livedassetsInApril2021,ourBoardofDirectorsauthorizedmanagementtosellorabandontheMexicaliBrewery.

Subsequently,managementdeterminedthatwewillbeunabletouseorrepurposecertainassetsattheMexicaliBrewery.Accordingly,forthefirstquarterofFiscal2022,long-livedassetswithacarryingvalueof$685.9millionwerewrittendowntotheirestimatedfairvalueof$20.0million,resultinginanimpairmentof$665.9million.ThisimpairmentwasincludedinimpairmentofbreweryconstructioninprogresswithinourconsolidatedresultsofoperationsfortheyearendedFebruary28,2022.Ourestimateoffairvaluewasdeterminedbasedontheexpectedsalvagevalueoftheassets.TheMexicaliBreweryisacomponentoftheBeersegment.WecontinuetoworkwithgovernmentofficialsinMexicoto(i)determinenextstepsforoursuspendedMexicaliBreweryconstructionproject,(ii)pursuevariousformsofrecoveryforcapitalizedcostsandadditionalexpensesincurredinestablishingthebrewery,however,therecanbenoassuranceofanyrecoveries,and(iii)exploreoptionstoaddfurthercapacityatotherlocationsinMexico,includingtheconstructionoftheSoutheastMexicoBrewerywherethereisamplewaterandwewillhaveaskilledworkforcetomeetourlong-termneeds.Inthemedium-term,undernormaloperatingconditions,wehaveamplecapacityattheNavaandObregonbreweriestomeetconsumerneedsbasedoncurrentgrowthforecastsandcurrentandplannedproductioncapabilities.Expansion,optimization,and/orconstructioneffortscontinueatourcurrentbrewerylocationsunderourMexicoBeerProjectstoalignwithouranticipatedfuturegrowthexpectations.

Long-livedassetsheldforsaleFortheyearendedFebruary28,2021,primarilyinconnectionwiththeWineandSpiritsDivestituresand

theConcentrateBusinessDivestiture,long-livedassetsheldforsalewithacarryingvalueof$736.4millionwerewrittendowntotheirestimatedfairvalueof$712.4million,lesscoststosell,resultinginatotallossof$24.0million.Thislosswasincludedinimpairmentofassetsheldforsalewithinourconsolidatedresultsofoperations.Theseassetsconsistedprimarilyofgoodwill,intangibleassets,andcertainwineryandvineyardassetswhichhadsatisfiedtheconditionsnecessarytobeclassifiedasheldforsale.OurestimatedfairvaluewasdeterminedasofNovember30,2020,primarilybasedontheexpectedproceedsfromtheWineandSpirits



DivestituresandtheConcentrateBusinessDivestiture,excludingthecontingentconsideration,whichwewillrecognizewhenitisdeterminedtoberealizable.

FortheyearendedFebruary29,2020,inconnectionwiththeWineandSpiritsDivestituresandtheConcentrateBusinessDivestiture,long-livedassetsheldforsalewithacarryingvalueof$1,291.2millionwerewrittendowntotheirestimatedfairvalueof$908.2million,lesscoststosell,resultinginatotallossof$407.0million.Thislosswasincludedinimpairmentofassetsheldforsalewithinourconsolidatedresultsofoperations.Theseassetsconsistedprimarilyofgoodwill,intangibleassets,andcertainwineryandvineyardassetswhichhadsatisfiedtheconditionsnecessarytobeclassifiedasheldforsale.OurestimateoffairvaluewasdeterminedasofFebruary29,2020,basedontheexpectedproceedsfromtheWineandSpiritsDivestituresandtheConcentrateBusinessDivestiture,excludingthecontingentconsideration.

FortheyearendedFebruary29,2020,inconnectionwiththeBallastPointDivestiture,long-livedassetsheldforsalewithacarryingvalueof$81.3millionwerewrittendowntotheirestimatedfairvalueof$41.1million,lesscoststosell.Asaresult,alossof$42.7million,inclusiveofcoststosellandotherlosseswasincludedinimpairmentofassetsheldforsalefortheyearendedFebruary29,2020.Theseassetsconsistedprimarilyofintangibleassetsandcertainproductionandwarehouseassetswhichhadsatisfiedtheconditionsnecessarytobeclassifiedasheldforsale.OurestimateoffairvaluewasdeterminedbasedontheexpectedproceedsfromtheBallastPointDivestitureasofFebruary29,2020.BallastPointwasacomponentoftheBeersegmentandwasincludedinourbeerreportingunitthroughthedateofdivestiture.Accordingly,goodwillwasallocatedtotheBallastPointassetsheldforsalebasedontherelativefairvalueofthebusinessbeingsoldcomparedtotherelativefairvalueofthereportingunit.GoodwillnotallocatedtoassetsassociatedwiththeBallastPointDivestitureremainedinthebeerreportingunit.

TrademarksFortheyearendedFebruary28,2021,certainnegativetrendswithinourBeersegment’sFourCorners

craftbeerportfolio,includingslowergrowthratesandincreasedcompetition,resultedinupdatedlong-termfinancialforecasts.Theupdatedforecastsindicateditwasmorelikelythannotthefairvalueofourindefinite-livedintangibleassetassociatedwiththeFourCornerstrademarkmightbebelowitscarryingvalue.Accordingly,weperformedaquantitativeassessmentforimpairment.Asaresultofthisassessment,theFourCornerstrademarkassetwithacarryingvalueof$10.0millionwaswrittendowntoitsestimatedfairvalueof$4.0million,resultinginanimpairmentof$6.0million.Thisimpairmentwasincludedinselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperationsfortheyearendedFebruary28,2021.

FortheyearendedFebruary29,2020,certaincontinuingnegativetrendswithinourBeersegment’sBallastPointcraftbeerportfolio,includingincreasedrateofrevenuedeclineandincreasedcompetition,indicatedthatitwasmorelikelythannotthefairvalueofourindefinite-livedintangibleassetassociatedwiththeBallastPointcraftbeertrademarkmightbebelowitscarryingvalue.Accordingly,weperformedaquantitativeassessmentforimpairment.Asaresultofthisassessment,theBallastPointcraftbeertrademarkassetwithacarryingvalueof$28.0millionwaswrittendowntoitsestimatedfairvalueof$17.0million,resultinginanimpairmentof$11.0million.Thisimpairmentwasincludedinselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperationsfortheyearendedFebruary29,2020.

Whenperformingaquantitativeassessmentforimpairmentofatrademarkasset,wemeasuretheamountofimpairmentbycalculatingtheamountbywhichthecarryingvalueofthetrademarkassetexceedsitsestimatedfairvalue.Theestimatedfairvalueisdeterminedbasedonanincomeapproachusingtherelieffromroyaltymethod,whichassumesthat,inlieuofownership,athirdpartywouldbewillingtopayaroyaltyinordertoexploittherelatedbenefitsofthetrademarkasset.Thecashflowprojectionsweusetoestimatethefairvalueofourtrademarkassetsinvolveseveralassumptions,including(i)projectedrevenuegrowthrates,(ii)estimatedroyaltyrates,(iii)after-taxroyaltysavingsexpectedfromownershipofthetrademarks,and(iv)discountratesusedtoderivetheestimatedfairvalueofthetrademarkassets.



8. GOODWILL

Thechangesinthecarryingamountofgoodwillareasfollows:

BeerWineandSpirits Consolidated

(inmillions)

Balance,February29,2020 $ 5,163.4 $ 2,593.7 $ 7,757.1

Purchaseaccountingallocations(1) — 14.3 14.3

Foreigncurrencytranslationadjustments (38.7) 15.9 (22.8)

Reclassifiedfromassetsheldforsale(2) 0.9 44.0 44.9

Balance,February28,2021 5,125.6 2,667.9 7,793.5

Purchaseaccountingallocations(1)(3) — 79.6 79.6

Foreigncurrencytranslationadjustments (4.9) (5.8) (10.7)

Balance,February28,2022 $ 5,120.7 $ 2,741.7 $ 7,862.4

(1) PurchaseaccountingallocationsassociatedprimarilywiththeacquisitionofEmpathyWines.(2) PrimarilyinconnectionwiththeWineandSpiritsDivestitures,goodwillassociatedwiththebusinessesbeingsold

wasreclassifiedfromassetsheldforsalebasedonthechangestorelativefairvaluesoftheportionofthebusinessbeingsoldandtheremainingwineandspiritsandbeerportfolios.Therelativefairvaluesweredeterminedusingtheincomeapproachbasedonassumptions,includingprojectedrevenuegrowthrates,terminalgrowthrate,anddiscountrateandotherprojectedfinancialinformation.

(3) PreliminarypurchaseaccountingallocationsassociatedwiththeacquisitionofMyFavoriteNeighbor.

9. INTANGIBLEASSETS

Themajorcomponentsofintangibleassetsareasfollows:

February28,2022 February28,2021

GrossCarryingAmount

NetCarryingAmount

GrossCarryingAmount

NetCarryingAmount

(inmillions)

Amortizableintangibleassets

Customerrelationships $ 87.1 $ 21.7 $ 87.2 $ 26.3

Other 20.9 — 21.1 0.2

Total $ 108.0 21.7 $ 108.3 26.5

Nonamortizableintangibleassets

Trademarks 2,733.5 2,705.6

Totalintangibleassets $ 2,755.2 $ 2,732.1

WedidnotincurcoststoreneworextendthetermofacquiredintangibleassetsfortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020.Netcarryingamountrepresentsthegrosscarryingvaluenetofaccumulatedamortization.Amortizationexpenseforintangibleassetswas$5.1million,$5.3million,and$5.7millionfortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020,respectively.



Estimatedamortizationexpenseforeachofthefivesucceedingfiscalyearsandthereafterisasfollows:

(inmillions)

Fiscal2023 $ 3.2

Fiscal2024 $ 1.4

Fiscal2025 $ 1.4

Fiscal2026 $ 1.4

Fiscal2027 $ 1.4

Thereafter $ 12.9

10. EQUITYMETHODINVESTMENTS

Ourequitymethodinvestmentsareasfollows:

February28,2022 February28,2021

CarryingValueOwnershipPercentage CarryingValue

OwnershipPercentage

(inmillions)

CanopyEquityMethodInvestment(1)(2) $ 2,503.5 36.1% $ 2,578.8 38.1%

Otherequitymethodinvestments 185.2 20%-50% 209.6 20%-50%

$ 2,688.7 $ 2,788.4

(1) ThefairvaluebasedontheclosingpriceoftheunderlyingequitysecurityasofFebruary28,2022,andFebruary28,2021,was$1,014.8millionand$4,679.3million,respectively.Refertodiscussionbelowonother-than-temporaryimpairmentconsiderations.

(2) Includesthefollowing:

CommonShares PurchasePrice

(inmillions)

November2017CanopyInvestment 18.9 $ 130.1

November2018CanopyInvestment 104.5 2,740.3

May2020CanopyInvestment 18.9 173.9

142.3 $ 3,044.3

CanopyEquityMethodInvestmentWecomplementourbeveragealcoholstrategywithourinvestmentinCanopy,aleadingproviderof

medicinalandrecreationalcannabisproducts.Equityinearnings(losses)fromtheCanopyEquityMethodInvestmentandrelatedactivities(seetablebelow)include,amongotheritems,restructuringandotherstrategicbusinessdevelopmentcosts,theamortizationofthefairvalueadjustmentsassociatedwiththedefinite-livedintangibleassetsovertheirestimatedusefullives,theflowthroughofinventorystep-up,unrealizedgains(losses)associatedwithchangesinourCanopyownershippercentageresultingfromperiodicequityissuancesmadebyCanopy,andourshareofCanopy’sadditionallossresultingfromtheJune2019WarrantModificationof$409.0million.Amountsincludedinourconsolidatedresultsofoperationsforeachperiodareasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Equityinearnings(losses)fromCanopyandrelatedactivities $ (73.6) $ (679.0) $ (575.9)

InJune2019,CanopyshareholdersapprovedthemodificationofthetermsofthewarrantsoriginallyobtainedinNovember2018andcertainotherrights,andtheotherrequiredapprovalsnecessaryforthe



modificationstobeeffectiveweregranted.Accordingly,werecognizeda$1,176.0millionunrealizedgainfromunconsolidatedinvestmentswithinourconsolidatedresultsofoperationsforthesecondquarterofFiscal2020fromtheJune2019WarrantModification.ThesechangesweretheresultofCanopy’sintentiontoacquireAcreageuponU.S.federalcannabislegalization,subjecttocertainconditions.TheinputsusedtoestimatethefairvalueoftheNovember2018CanopyWarrantsasoftheJune27,2019modificationdate,wereasfollows:

TrancheAWarrants(1)

TrancheBWarrants(1)

Exerciseprice $ 50.40 $ 76.68

Valuationdatestockprice $ 53.36 $ 53.36

Remainingcontractualterm 4.3years 7.3years

Expectedvolatility 66.7% 66.7%

Risk-freeinterestrate 1.4% 1.4%

Expecteddividendyield 0.0% 0.0%

(1) RefertoNote7forinputdescriptions.

InMay2020,weexercisedtheNovember2017CanopyWarrantsatanexercisepriceofC$12.98perwarrantshareforC$245.0million,or$173.9million.WeenteredintoforeigncurrencyforwardcontractstofixtheU.S.dollarcostoftheMay2020CanopyInvestment.FortheyearendedFebruary28,2021,werecognizednetlossesontheforeigncurrencyforwardcontractsof$7.5million,inselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperations.ThepaymentatmaturityofthederivativeinstrumentsisreportedascashflowsfrominvestingactivitiesininvestmentsinequitymethodinvesteesandsecuritiesfortheyearendedFebruary28,2021.

Canopyhasvariousequityandconvertibledebtsecuritiesoutstanding,includingprimarilyequityawardsgrantedtoitsemployees,andoptionsandwarrantsissuedtovariousthirdparties,includingourNovember2018CanopyWarrants,CanopyDebtSecurities,andtheAcreageFinancialInstrument(acalloptionforCanopytoacquire70%ofthesharesofAcreage,atafixedexchangeratioand30%atafloatingexchangeratio).AsofFebruary28,2022,theexerciseand/orconversionofcertainoftheseoutstandingsecuritiescouldhaveasignificanteffectonourshareofCanopy’sreportedearningsorlossesandourownershipinterestinCanopy.

WehaveevaluatedtheCanopyEquityMethodInvestmentasofFebruary28,2022,anddeterminedthattherewasnotanother-than-temporaryimpairment.Ourconclusionwasbasedonseveralcontributingfactors,including:(i)theperiodoftimeforwhichthefairvaluehasbeenlessthanthecarryingvalue,(ii)anexpectationthatCanopy’sresultswillimprove,(iii)anexpectationthattheCanopystockpricewillrecoverinthenear-term,and(iv)ourabilityandintenttoholdtheinvestmentuntilthatrecovery.WewillcontinuetoreviewtheCanopyEquityMethodInvestmentforanother-than-temporaryimpairment.IfCanopy’sstockpricedoesnotrecoveraboveourcarryingvalueinthenear-term,itmayresultinanimpairmentofourCanopyEquityMethodInvestment.TheremayalsobeafutureimpairmentofourCanopyEquityMethodInvestmentifourexpectationsaboutCanopy’sprospectiveresultsandcashflowsdecline,whichcouldbeinfluencedbyavarietyoffactorsincludingadversemarketconditionsorifCanopyrecordsasignificantimpairmentofgoodwillorintangibleorotherlong-livedassets,makessignificantassetsales,orhaschangesinseniormanagement.

ThefollowingtablespresentsummarizedfinancialinformationforCanopypreparedinaccordancewithU.S.GAAP.Werecognizeourequityinearnings(losses)forCanopyonatwo-monthlag.Accordingly,werecognizedourshareofCanopy’searnings(losses)fortheperiods(i)JanuarythroughDecember2021inouryearendedFebruary28,2022results,(ii)JanuarythroughDecember2020inouryearendedFebruary28,2021results,and(iii)JanuarythroughDecember2019inouryearendedFebruary29,2020results.Theamountsshownrepresent100%ofCanopy’sfinancialpositionandresultsofoperations,fortherespectiveperiods,however,theresultsofoperationsfortheyearendedFebruary29,2020,excludetheimpactoftheJune2019WarrantModificationLossbecauseitwasrecordedbyCanopywithinequity.TheyearendedFebruary28,2021,includessubstantialcostsdesignedtoimproveCanopy’sorganizationalfocus,streamlineoperations,andalignproductioncapabilitywithprojecteddemand.



February28,2022

February28,2021

(inmillions)

Currentassets $ 1,573.3 $ 1,706.6

Noncurrentassets $ 3,419.2 $ 3,251.5

Currentliabilities $ 189.3 $ 273.7

Noncurrentliabilities $ 1,470.4 $ 1,308.8

Noncontrollinginterests $ 3.3 $ 179.0

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Netsales $ 444.3 $ 378.6 $ 290.2

Grossprofit(loss) $ (18.6) $ (14.1) $ 45.4

Netincome(loss) $ (274.3) $ (1,775.3) $ (327.0)

Netincome(loss)attributabletoCanopy $ 328.7 $ (1,750.0) $ (312.6)

OtherequitymethodinvestmentsMyFavoriteNeighborInApril2020,weinvestedinMyFavoriteNeighbor,whichweaccountedforundertheequitymethod.We

recognizedourshareoftheirequityinearnings(losses)inourconsolidatedfinancialstatementsintheWineandSpiritssegmentuptothedateweacquiredtheremainingownershipinterest.

CorporateinvestmentInFebruary2022,wesoldaninvestmentmadethroughourcorporateventurecapitalfunction.We

recognizeda$51.0milliongainfortheyearendedFebruary28,2022,relatedtothesaleofourpreviouslyheldequityinterestinthisinvestment.Thisgainisincludedinincome(loss)fromunconsolidatedinvestmentswithinourconsolidatedresultsofoperations.Additionally,werecognizedourshareoftheirequityinearnings(losses)inourconsolidatedfinancialstatementsintheCorporateOperationsandOthersegmentuptothedatewesoldourownershipinterest.

11. OTHERACCRUEDEXPENSESANDLIABILITIES

Themajorcomponentsofotheraccruedexpensesandliabilitiesareasfollows:

February28,2022

February28,2021

(inmillions)

Salaries,commissions,andpayrollbenefitsandwithholdings $ 256.3 $ 232.1

Promotionsandadvertising 172.3 159.9

Accruedinterest 85.1 93.4

Operatingleaseliability 80.4 68.8

Accruedexcisetaxes 44.6 19.9

Deferredrevenue 32.0 16.3

Incometaxespayable 21.5 24.7

Other 179.1 164.8

$ 871.3 $ 779.9



12. BORROWINGS

Borrowingsconsistofthefollowing:

February28,2022February28,

2021

Current Long-term Total Total

(inmillions)

Short-termborrowings

Commercialpaper $ 323.0 $ —

$ 323.0 $ —

Long-termdebt

Termloancreditfacilities $ — $ 300.0 $ 300.0 $ 454.4

Seniornotes 599.0 9,174.6 9,773.6 9,972.4

Other 6.3 13.6 19.9 15.5

$ 605.3 $ 9,488.2 $ 10,093.5 $ 10,442.3

BankfacilitiesSeniorcreditfacilityInMarch2020,theCompany,CBInternational,certainoftheCompany’ssubsidiariesasguarantors,the

AdministrativeAgent,andcertainotherlendersenteredintothe2020RestatementAgreementthatamendedandrestatedourthen-existingseniorcreditfacility(asamendedandrestatedbythe2020RestatementAgreement,the2020CreditAgreement).The2020CreditAgreementprovidedforanaggregaterevolvingcreditfacilityof$2.0billion.Theprincipalchangeseffectedbythe2020RestatementAgreementwere:

• theremovalofthesubsidiaryguaranteesandterminationoftheguaranteeagreement;• theinclusionoftheparentguarantyprovisionsinconnectionwiththeterminationoftheguarantee

agreement;• theremovalofcertainprovisionspertainingtotermloanssincenotermloansareoutstanding;and• therevisionoftheLIBORsuccessorrateprovisionstopermittheuseofratesbasedontheSOFR.

Uponremovalofallsubsidiaryguarantorsfromour2020CreditAgreement,thesubsidiaryguarantorswereautomaticallyreleasedfromtheindenturesrelatingtoouroutstandingseniornotes.The2020CreditAgreementhasbeensupersededbythe2022CreditAgreement,asdescribedbelow.

2020TermCreditAgreementInMarch2020,theCompany,certainoftheCompany’ssubsidiariesasguarantors,theAdministrative

Agent,andcertainotherlendersenteredintotheTermLoanRestatementAgreementthatamendedandrestatedourthen-existingtermcreditagreement(asamendedandrestatedbytheTermLoanRestatementAgreement,the2020TermCreditAgreement).The2020TermCreditAgreementprovidedforaggregatecreditfacilitiesof$1.5billion,consistingofa$500.0millionthree-yeartermloanfacilityanda$1.0billionfive-yeartermloanfacility.DuringFiscal2021,werepaidtheoutstandingtermloanfacilityborrowingsunderour2020TermCreditAgreement.

June2021TermCreditAgreementInJune2019,theCompanyandtheAdministrativeAgentandLenderenteredintothe2019TermCredit

Agreement.The2019TermCreditAgreementprovidedforthecreationofa$491.3millionfive-yeartermloanfacility.TheFive-YearTermFacilitywillberepaidinquarterlypaymentsofprincipalequalto1.25%oftheoriginalaggregateprincipalamountoftheFive-YearTermFacility,withthebalancedueandpayableatmaturity.

InMarch2020,theCompany,certainoftheCompany’ssubsidiariesasguarantors,andtheLenderenteredintothe2020TermLoanRestatementAgreementthatamendedandrestatedthe2019TermCreditAgreement(as



amendedandrestatedbythe2020TermLoanRestatementAgreement,theMarch2020TermCreditAgreement).Theprincipalchangeseffectedbythe2020TermLoanRestatementAgreementwere:

• theremovalofthesubsidiaryguaranteesandterminationoftherespectiveguaranteeagreements;and

• therevisionoftheLIBORsuccessorrateprovisionstopermittheuseofratesbasedonSOFR.

InJune2021,theCompanyandtheAdministrativeAgentandLenderamendedtheMarch2020TermCreditAgreement.TheprincipalchangeeffectedbytheamendmentwasareductioninLIBORmarginfrom0.88%to0.63%fromJune1,2021throughDecember31,2021.TheJune2021TermCreditAgreementhasbeensupersededbythe2022TermCreditAgreement,asdescribedbelow.

GeneralWeandoursubsidiariesaresubjecttocovenantsthatarecontainedinthe2020CreditAgreementandthe

June2021TermCreditAgreement,includingthoserestrictingtheincurrenceofadditionalsubsidiaryindebtedness,additionalliens,mergersandconsolidations,transactionswithaffiliates,andsaleandleasebacktransactions,ineachcasesubjecttonumerousconditions,exceptions,andthresholds.Thefinancialcovenantsarelimitedtoaminimuminterestcoverageratioandamaximumnetleverageratio.

Ourseniorcreditfacilitypermitsustoelect,subjecttothewillingnessofexistingornewlenderstofundsuchincreaseandothercustomaryconditions,toincreasetherevolvingcreditcommitments.Theincreasedcommitmentsmaybeanunlimitedamountsolongasournetleverageratio,asdefinedandcomputedpursuanttoourseniorcreditfacility,isnogreaterthan4.00to1.00subjecttocertainlimitationsfortheperioddefinedpursuanttoourseniorcreditfacility.

AsofFebruary28,2022,aggregatecreditfacilitiesunderthe2020CreditAgreementandtheJune2021TermCreditAgreementconsistofthefollowing:

Amount Maturity

(inmillions)

2020CreditAgreement

Revolvingcreditfacility(1)(2) $ 2,000.0 Sept14,2023

June2021TermCreditAgreement

Five-YearTermFacility(1)(3) $ 491.3 Jun28,2024

(1) Contractualinterestratevariesbasedonourdebtrating(asdefinedintherespectiveagreement)andisafunctionofLIBORplusamargin,orthebaserateplusamargin,or,incertaincircumstanceswhereLIBORcannotbeadequatelyascertainedoravailable,analternativebenchmarkrateplusamargin.

(2) Weand/orCBInternationalaretheborrowerunderthe$2,000.0millionrevolvingcreditfacility.Includesasub-facilityforlettersofcreditofupto$200.0million.

(3) WearetheborrowerundertheFive-YearTermFacility.



AsofFebruary28,2022,informationwithrespecttoborrowingsunderthe2020CreditAgreementandtheJune2021TermCreditAgreementisasfollows:

Outstandingborrowings

Interestrate

LIBORmargin

Outstandinglettersofcredit

Remainingborrowingcapacity(1)

(inmillions)

2020CreditAgreement

Revolvingcreditfacility $ — —% —% $ 12.2 $ 1,664.8

June2021TermCreditAgreement

Five-YearTermFacility(2) $ 300.0 1.0% 0.88%

(1) Netofoutstandingrevolvingcreditfacilityborrowings,outstandinglettersofcreditunderthe2020CreditAgreement,andoutstandingborrowingsunderourcommercialpaperprogramof$323.0million(excludingunamortizeddiscount)(see“Commercialpaperprogram”below).

(2) Outstandingtermloanfacilityborrowingsarenetofunamortizeddebtissuancecostsandreflectapartialprepaymentof$142.1millionmadeinJune2021.

CommercialpaperprogramWehaveacommercialpaperprogramwhichprovidesfortheissuanceofuptoanaggregateprincipal

amountof$2.0billionofcommercialpaper.Ourcommercialpaperprogramisbackedbyunusedcommitmentsunderourrevolvingcreditfacilityunderour2020CreditAgreement.Accordingly,outstandingborrowingsunderourcommercialpaperprogramreducetheamountavailableunderourrevolvingcreditfacility.AsofFebruary28,2021,wehadnooutstandingborrowingsunderourcommercialpaperprogram.InformationwithrespecttoouroutstandingcommercialpaperborrowingsasofFebruary28,2022,isasfollows:

(inmillions)

Outstandingborrowings(1) $ 323.0

Weightedaverageannualinterestrate 0.5%

Weightedaverageremainingterm 4days

(1) Outstandingcommercialpaperborrowingsarenetofunamortizeddiscount.

InterestrateswapcontractsInJune2019,weenteredintointerestrateswapagreements,whichweredesignatedascashflowhedges

for$375.0millionofourfloatingLIBORratedebt.Asaresultofthesehedges,wefixedourinterestrateson$375.0millionofourfloatingLIBORratedebtatanaveragerateof1.9%(exclusiveofborrowingmargins)fromJuly1,2019,throughJuly1,2020.

SwaplockandtreasurylockcontractsInFebruary2022,weenteredintoaswaplockagreement,whichwasdesignatedasacashflowhedge.As

aresult,wehavehedgedthetreasuryratevolatilityon$100.0millionoffuturedebtissuances.

InFebruaryandMarch2020,weenteredintotreasurylockagreements,whichweredesignatedascashflowhedges.Asaresultofthesehedges,wefixedour10-yeartreasuryrateson$500.0millionoffuturedebtissuancesatanaveragerateof1.2%(exclusiveofborrowingmargins).InApril2020,priortotheissuanceofthe2.875%SeniorNotesand3.75%SeniorNotes,wesettledalloutstandingtreasurylockcontracts,andrecognizedanunrealizedloss,netofincometaxeffect,of$21.8millioninaccumulatedothercomprehensiveincome(loss)withinourconsolidatedbalancesheets.Thislossisbeingamortizedover10yearstointerestexpensewithinourconsolidatedresultsofoperations.See“Seniornotes”below.



SeniornotesOuroutstandingseniornotesareasfollows:

4.25%SeniorNotes(2)(3) $ 1,050.0 May2013 May2023 May/Nov 1,048.6 1,047.5

4.75%SeniorNotes(2)(3) $ 400.0 Nov2014 Nov2024 May/Nov 398.2 397.6

4.75%SeniorNotes(2)(3) $ 400.0 Dec2015 Dec2025 Jun/Dec 397.5 396.9

3.70%SeniorNotes(2)(4) $ 600.0 Dec2016 Dec2026 Jun/Dec 597.1 596.5

2.70%SeniorNotes(2)(5) $ 500.0 May2017 May2022 May/Nov — 498.8

3.50%SeniorNotes(2)(4) $ 500.0 May2017 May2027 May/Nov 497.2 496.5

4.50%SeniorNotes(2)(4) $ 500.0 May2017 May2047 May/Nov 493.4 493.1

2.65%SeniorNotes(2)(6) $ 700.0 Nov2017 Nov2022 May/Nov — 697.1

3.20%SeniorNotes(2)(4) $ 600.0 Feb2018 Feb2023 Feb/Aug 599.0 598.0



4.40%SeniorNotes(2)(4) $ 500.0 Oct2018 Nov2025 May/Nov 497.3 496.6



3.15%SeniorNotes(2)(4) $ 800.0 Jul2019 Aug2029 Feb/Aug 794.7 793.9

2.875%SeniorNotes(2)(4) $ 600.0 Apr2020 May2030 May/Nov 594.9 594.3

3.75%SeniorNotes(2)(4) $ 600.0 Apr2020 May2050 May/Nov 589.9 589.6

2.25%SeniorNotes(2)(4) $ 1,000.0 Jul2021 Aug2031 Feb/Aug 988.0 —

$ 9,773.6 $ 9,972.4

Dateof OutstandingBalance(1)

Principal Issuance MaturityInterestPayments

February28,2022

February28,2021

(inmillions)

(1) Amountsarenetofunamortizeddebtissuancecostsandunamortizeddiscounts,whereapplicable.(2) Seniorunsecuredobligationswhichrankequallyinrightofpaymenttoallofourexistingandfuturesenior

unsecuredindebtedness.(3) Redeemable,inwholeorinpart,atouroptionatanytimeataredemptionpriceequalto100%ofthe

outstandingprincipalamount,plusaccruedandunpaidinterestandamake-wholepaymentbasedonthepresentvalueofthefuturepaymentsattheadjustedTreasuryRateplus50basispoints.

(4) Redeemable,inwholeorinpart,atouroptionatanytimepriortothestatedredemptiondateasdefinedintheindenture,ataredemptionpriceequalto100%oftheoutstandingprincipalamount,plusaccruedandunpaidinterestandamake-wholepaymentbasedonthepresentvalueofthefuturepaymentsattheadjustedTreasuryRateplusthestatedbasispointsasdefinedintheindenture.Onorafterthestatedredemptiondate,redeemable,inwholeorinpart,atouroptionatanytimeataredemptionpriceequalto100%oftheoutstandingprincipalamount,plusaccruedandunpaidinterest.



Redemption

StatedRedemption

Date

StatedBasisPoints

3.70%SeniorNotesdueDecember2026 Sept2026 25

3.50%SeniorNotesdueMay2027 Feb2027 20

4.50%SeniorNotesdueMay2047 Nov2046 25

3.20%SeniorNotesdueFebruary2023 Jan2023 13

3.60%SeniorNotesdueFebruary2028 Nov2027 15

4.10%SeniorNotesdueFebruary2048 Aug2047 20

4.40%SeniorNotesdueNovember2025 Sept2025 20

4.65%SeniorNotesdueNovember2028 Aug2028 25

5.25%SeniorNotesdueNovember2048 May2048 30

3.15%SeniorNotesdueAugust2029 May2029 20

2.875%SeniorNotesdueMay2030 Feb2030 35

3.75%SeniorNotesdueMay2050 Nov2049 40

2.25%SeniorNotesdueAugust2031 May2031 15(5) RedeemedpriortomaturityinAugust2021ataredemptionpriceequalto100%oftheoutstandingprincipal

amount,plusaccruedandunpaidinterestandamake-wholepaymentof$7.7million.Themake-wholepaymentisincludedinlossonextinguishmentofdebtwithinourconsolidatedresultsofoperations.

(6) RedeemedpriortomaturityinAugust2021ataredemptionpriceequalto100%oftheoutstandingprincipalamount,plusaccruedandunpaidinterestandamake-wholepaymentof$18.9million.Themake-wholepaymentisincludedinlossonextinguishmentofdebtwithinourconsolidatedresultsofoperations.

IndenturesOurindenturesrelatingtoouroutstandingseniornotescontaincertaincovenants,including,butnot

limitedto:(i)alimitationonliensoncertainassets,(ii)alimitationoncertainsaleandleasebacktransactions,and(iii)restrictionsonmergers,consolidations,andthetransferofallorsubstantiallyallofourassetstoanotherperson.

SubsidiarycreditfacilitiesGeneralWehaveadditionalcreditarrangementstotaling$64.5millionand$61.2millionasofFebruary28,2022,

andFebruary28,2021,respectively.AsofFebruary28,2022,andFebruary28,2021,amountsoutstandingunderthesearrangementswere$19.9millionand$15.5million,respectively,themajorityofwhichisclassifiedaslong-termasoftherespectivedate.Thesearrangementsprimarilysupportthefinancingneedsofourdomesticandforeignsubsidiaryoperations.Interestratesandothertermsoftheseborrowingsvaryfromcountrytocountry,dependingonlocalmarketconditions.

DebtpaymentsAsofFebruary28,2022,therequiredprincipalrepaymentsunderlong-termdebtobligations(excluding

unamortizeddebtissuancecostsandunamortizeddiscountsof$57.7millionand$18.7million,respectively)foreachofthefivesucceedingfiscalyearsandthereafterareasfollows:

(inmillions)

Fiscal2023 $ 606.8

Fiscal2024 1,056.2

Fiscal2025 703.9

Fiscal2026 902.0

Fiscal2027 600.9

Thereafter 6,300.1

$ 10,169.9



Subsequentevents2022CreditAgreementInApril2022,theCompany,CBInternational,theAdministrativeAgent,andcertainotherlendersentered

intothe2022RestatementAgreementthatamendedandrestatedthe2020CreditAgreement(asamendedandrestatedbythe2022RestatementAgreement,the2022CreditAgreement).Theprincipalchangeseffectedbythe2022RestatementAgreementwere:

• Therefinanceandincreaseoftheexistingrevolvingcreditfacilityfrom$2.0billionto$2.25billionandextensionofitsmaturitytoApril14,2027;

• Therefinementofcertainnegativecovenants;and• ThereplacementofLIBORrateswithratesbasedontermSOFR.

2022TermCreditAgreementInApril2022,theCompany,theAdministrativeAgent,andtheLenderamendedtheJune2021TermCredit

Agreement(asamendedthe2022TermCreditAgreement).TheprincipalchangeseffectedbytheamendmentweretherefinementofcertainnegativecovenantsandreplacementofLIBORrateswithratesbasedontermSOFR.

SwaplockcontractsDuringthefirstquarterofFiscal2023,weenteredintoadditionalswaplockagreements,whichwere

designatedascashflowhedges,for$150.0millionoffuturedebtissuances.Asaresultoftheadditionalswaplocks,wehavehedgedthetreasuryratevolatilityon$250.0millionoffuturedebtissuances.

13. INCOMETAXES

Income(loss)beforeincometaxeswasgeneratedasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Domestic $ (1,334.4) $ 495.2 $ (2,230.1)

Foreign 1,644.8 2,047.7 1,284.9

$ 310.4 $ 2,542.9 $ (945.2)

Theincometaxprovision(benefit)consistedofthefollowing:

Current

Federal $ 229.3 $ 74.0 $ 66.5

State 31.4 19.1 12.1

Foreign (36.1) 81.6 108.5

Totalcurrent 224.6 174.7 187.1

Deferred

Federal (10.1) 152.8 (459.9)

State (5.5) 28.3 (118.3)

Foreign 100.4 155.3 (575.5)

Totaldeferred 84.8 336.4 (1,153.7)

Incometaxprovision(benefit) $ 309.4 $ 511.1 $ (966.6)

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)



Areconciliationofthetotaltaxprovision(benefit)totheamountcomputedbyapplyingthestatutoryU.S.federalincometaxratetoincomebeforeprovisionfor(benefitfrom)incometaxesisasfollows:

FortheYearsEnded

February28,2022 February28,2021 February29,2020

Amount

%ofPretaxIncome(Loss) Amount

%ofPretaxIncome(Loss) Amount

%ofPretaxIncome(Loss)

(inmillions,except%ofpretaxincome(loss)data)

Incometaxprovision(benefit)atstatutoryrate $ 65.2 21.0% $ 534.0 21.0% $ (198.5) 21.0%

Stateandlocalincometaxes,netoffederalincometaxbenefit(1) (77.8) (25.0%) 39.0 1.5% (82.3) 8.7%

Netincometaxprovision(benefit)fromlegislativechanges(2) 11.9 3.8% 10.9 0.4% (547.4) 57.9%

EarningstaxedatotherthanU.S.statutoryrate(3) (33.2) (10.7%) (84.4) (3.2%) (46.5) 5.0%

Excesstaxbenefitsfromstock-basedcompensationawards(4) (48.0) (15.5%) (29.4) (1.2%) (56.2) 5.9%

Netincometaxprovision(benefit)recognizedforadjustmenttovaluationallowance(5) 385.5 124.2% 27.1 1.1% (32.8) 3.5%

Miscellaneousitems,net 5.8 1.9% 13.9 0.5% (2.9) 0.3%

Incometaxprovision(benefit)ateffectiverate $ 309.4 99.7% $ 511.1 20.1% $ (966.6) 102.3%

(1) Includesdifferencesresultingfromadjustmentstothecurrentanddeferredstateeffectivetaxrates.(2) TheyearendedFebruary28,2022,representsanetincometaxprovisionresultingfromtheremeasurementof

ourdeferredtaxassetsinconnectionwithalegislativeupdateinSwitzerland.TheyearendedFebruary28,2021,representsanetincometaxprovisionresultingfrominitiativesundertheCARESAct.TheyearendedFebruary29,2020,representstherecognitionofanetincometaxbenefitresultingfromtheremeasurementofourdeferredtaxassetsinconnectionwiththeSeptember2019enactmentoftaxreforminSwitzerland.

(3) Consistsofthefollowing(i)differencebetweentheU.S.statutoryrateandlocaljurisdictiontaxrates,(ii)theprovisionforincrementalU.S.taxesonearningsofcertainforeignsubsidiariesoffsetbyforeigntaxcredits,(iii)thenon-U.S.portionoftaxprovision(benefit)recordedontheunrealizednetgain(loss)fromthechangesinfairvalueofourinvestmentinCanopy,and(iv)thenon-U.S.portionoftaxbenefitsrecordedontheCanopyequityinearnings(losses)andrelatedactivities.

(4) Representstherecognitionoftheincometaxeffectofstock-basedcompensationawardsintheincomestatementwhentheawardsvestoraresettled.

(5) Consistsprimarilyofvaluationallowancesontheunrealizednetgain(loss)fromchangesinfairvalueofourinvestmentinCanopyandCanopyequityinearnings(losses).

Deferredtaxassetsandliabilitiesreflectthefutureincometaxeffectsoftemporarydifferencesbetweenthefinancialstatementcarryingamountsofexistingassetsandliabilitiesandtheirrespectivetaxbasesandaremeasuredusingenactedtaxratesthatapplytotaxableincome.



Significantcomponentsofdeferredtaxassets(liabilities)consistofthefollowing:

Deferredtaxassets

Intangibleassets $ 2,188.8 $ 1,852.0

Losscarryforwards 349.8 233.1

Stock-basedcompensation 22.9 30.1

Leaseliabilities 69.0 83.1

Inventory 51.8 26.6

Investmentsinunconsolidatedinvestees 541.0 36.7

Otheraccruals 67.8 33.7

Grossdeferredtaxassets 3,291.1 2,295.3

Valuationallowances (552.1) (78.6)

Deferredtaxassets,net 2,739.0 2,216.7

Deferredtaxliabilities

Intangibleassets (522.1) —

Property,plant,andequipment (186.0) (200.3)

Investmentsinunconsolidatedinvestees (58.9) —

Provisionforunremittedearnings (26.0) (23.0)

Right-of-useassets (59.8) (70.6)

Otheraccruals (50.5) —

Totaldeferredtaxliabilities (903.3) (293.9)

Deferredtaxassets(liabilities),net $ 1,835.7 $ 1,922.8

February28,2022

February28,2021

(inmillions)

Inassessingtherealizabilityofdeferredtaxassets,weconsiderwhetheritismorelikelythannotthatsomeorallofthedeferredtaxassetswillnotberealized.Inmakingthisassessment,weconsidertheprojectedreversalofdeferredtaxliabilitiesandprojectedfuturetaxableincomeaswellastaxplanningstrategies.Baseduponthisassessment,webelieveitismorelikelythannotthatwewillrealizethebenefitsofthesedeductibledifferences,netofanyvaluationallowances.

AsofFebruary28,2022,operatinglosscarryforwards,whichareprimarilystateandforeign,totaling$3.2billionarebeingcarriedforwardinanumberofjurisdictionswherewearepermittedtousetaxoperatinglossesfrompriorperiodstoreducefuturetaxableincome.Oftheseoperatinglosscarryforwards,$1.8billionwillexpirebyfiscal2029,$900.0millionwillexpirebetweenfiscal2030andfiscal2042,and$500.0millionmaybecarriedforwardindefinitelyincertainjurisdictions.

Wehaverecognizedvaluationallowancesforoperatinglosscarryforwardsandotherdeferredtaxassetswhenwebelieveitismorelikelythannotthattheseitemswillnotberealized.TheincreaseinourvaluationallowancesasofFebruary28,2022,primarilyrelatedtotheunrealizednetgain(loss)fromchangesinfairvalueofourinvestmentinCanopyandCanopyequityinearnings(losses).



Theliabilityforincometaxesassociatedwithuncertaintaxpositions,excludinginterestandpenalties,andareconciliationofthebeginningandendingunrecognizedtaxbenefitliabilitiesisasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

BalanceasofMarch1 $ 236.1 $ 249.4 $ 224.3

Increasesasaresultoftaxpositionstakenduringapriorperiod 16.5 3.1 11.4

Decreasesasaresultoftaxpositionstakenduringapriorperiod (0.1) (15.4) (14.8)

Increasesasaresultoftaxpositionstakenduringthecurrentperiod 29.5 15.2 29.0

Decreasesrelatedtosettlementswithtaxauthorities (2.6) (10.2) (0.1)

Decreasesrelatedtolapseofapplicablestatuteoflimitations (0.4) (6.0) (0.4)

BalanceasoflastdayofFebruary $ 279.0 $ 236.1 $ 249.4

AsofFebruary28,2022,andFebruary28,2021,wehad$322.6millionand$268.9million,respectively,ofunrecognizedtaxbenefitliabilities,includinginterestandpenalties,recognizedonourbalancesheets.Theseliabilitiesareprimarilyrecordedasnon-currentasofthebalancesheetdate.

AsofFebruary28,2022,andFebruary28,2021,wehad$279.0millionand$236.1million,respectively,ofunrecognizedtaxbenefitliabilitiesthat,ifrecognized,woulddecreasetheeffectivetaxrateintheyearofresolution.

WefileU.S.federalincometaxreturnsandvariousstate,local,andforeignincometaxreturns.MajortaxjurisdictionswherewearesubjecttoexaminationbytaxauthoritiesincludeCanada,Mexico,Switzerland,andtheU.S.VariousU.S.federal,stateandforeignincometaxexaminationsarecurrentlyinprogress.Itisreasonablypossiblethattheliabilityassociatedwithourunrecognizedtaxbenefitliabilitieswillincreaseordecreasewithinthenext12monthsasaresultoftheseexaminationsortheexpirationofstatutesoflimitation.AsofFebruary28,2022,weestimatethatunrecognizedtaxbenefitliabilitiescouldchangebyarangeof$1millionto$5million.Withfewexceptions,wearenolongersubjecttoU.S.federal,state,local,orforeignincometaxexaminationsforfiscalyearspriortoFebruary28,2015.

Weprovideforadditionaltaxexpensebasedonprobableoutcomesofongoingtaxexaminationsandassessmentsinvariousjurisdictions.Whileitisoftendifficulttopredicttheoutcomeorthetimingofresolutionofanytaxmatter,webelievethereservesreflecttheprobableoutcomeofknowntaxcontingencies.Unfavorablesettlementofanyparticularissuewouldrequiretheuseofcash.

14. DEFERREDINCOMETAXESANDOTHERLIABILITIES

Themajorcomponentsofdeferredincometaxesandotherliabilitiesareasfollows:February28,

2022February28,

2021

(inmillions)

Deferredincometaxes $ 515.8 $ 569.7

Operatingleaseliability 457.3 471.1

Unrecognizedtaxbenefitliabilities 317.7 268.9

Deferredrevenue 104.1 1.5

Long-termincometaxpayable 76.0 86.1

Other 150.1 96.2

$ 1,621.0 $ 1,493.5



15. LEASES

GeneralWeprimarilyleasecertainvineyards,officeandproductionfacilities,warehouses,productionequipment,

andvehicles.Wehaveconcludedthatcertaingrapepurchasingarrangementsassociatedwiththepurchaseofgrapeproductionyieldedfromaspecifiedblockofavineyardandcertainthird-partylogisticsarrangementscontainalease.

BalancesheetlocationAsummaryofleaseright-of-useassetsandliabilitiesareasfollows:

Assets

Operatinglease Otherassets $ 478.9 $ 477.9

Financelease Property,plant,andequipment 21.8 17.0

Totalright-of-useassets $ 500.7 $ 494.9

Liabilities

Current:

Operatinglease Otheraccruedexpensesandliabilities $ 80.4 $ 68.8

Financelease Currentmaturitiesoflong-termdebt 6.3 4.6

Non-current:

Operatinglease Deferredincometaxesandotherliabilities 457.3 471.1

Financelease Long-termdebt,lesscurrentmaturities 13.6 10.9

Totalleaseliabilities $ 557.6 $ 555.4

BalanceSheetClassificationFebruary28,

2022February28,

2021

(inmillions)

LeasecostThecomponentsoftotalleasecostareasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Operatingleasecost $ 89.5 $ 93.4 $ 98.9

Financeleasecost:

Amortizationofright-of-useassets 5.8 11.0 12.2

Interestonleaseliabilities 0.5 0.5 0.7

Short-termleasecost 8.4 9.2 8.6

Variableleasecost(1) 202.5 216.5 403.3

Totalleasecost $ 306.7 $ 330.6 $ 523.7

(1) HighervariableleasecostsfortheyearendedFebruary29,2020,wasprimarilydrivenbythetransferofgrapepurchasingagreementsinconnectionwithourWineandSpiritsDivestitures.



LeasematuritiesAsofFebruary28,2022,minimumpaymentsdueforleaseliabilitiesforeachofthefivesucceedingfiscal

yearsandthereafterareasfollows:

OperatingLeases

FinanceLeases

(inmillions)

Fiscal2023 $ 95.1 $ 7.3

Fiscal2024 89.1 6.6

Fiscal2025 73.3 4.2

Fiscal2026 50.5 2.1

Fiscal2027 43.0 0.9

Thereafter 290.6 0.1

Totalleasepayments 641.6 21.2

Less:Interest (103.9) (1.3)

Totalleaseliabilities $ 537.7 $ 19.9

RelatedpartytransactionWehaveenteredintoaleaseforofficespacewithanaffiliateofanexecutiveofficeranddirectorthathas

notyetcommenced.AsofFebruary28,2022,theaggregateminimumpaymentsforthisoperatingleasetotaled$38.4milliononanundiscountedbasis.

Supplementalinformation

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Cashpaidforamountsincludedinthemeasurementofleaseliabilities:

Operatingcashflowsfromoperatingleases $ 92.7 $ 93.9 $ 100.7

Operatingcashflowsfromfinanceleases $ 0.5 $ 0.5 $ 0.7

Financingcashflowsfromfinanceleases $ 5.9 $ 10.5 $ 13.8

Right-of-useassetsobtainedinexchangefornewleaseliabilities:

Operatingleases $ 93.8 $ 66.3 $ 34.3

Financeleases $ 10.5 $ 11.6 $ 10.7

February28,2022

February28,2021

February29,2020

Weighted-averageremainingleaseterm:(1)

Operatingleases 12.1years 12.8years 11.7years

Financeleases 3.3years 2.9years 3.2years

Weighted-averagediscountrate:

Operatingleases 3.0% 3.2% 3.5%

Financeleases 3.4% 1.2% 2.6%

(1) Ourleaseshavevaryingtermswithremainingleasetermsofuptoapproximately30years.Certainofourleasearrangementsprovideuswiththeoptiontoextendortoterminatetheleaseearly.



16. COMMITMENTSANDCONTINGENCIES

PurchasecommitmentsandcontingenciesWehaveenteredintovariouslong-termcontractsinthenormalcourseofbusinessforthepurchaseof

(i)certaininventorycomponents,(ii)transportation,marketing,warehousing,andbottlingservices,(iii)ITcontracts,(iv)certainenergyrequirements,and(v)property,plant,andequipmentandrelatedcontractorandmanufacturingservices.AsofFebruary28,2022,theestimatedaggregateminimumpurchasecommitmentsunderthesecontractsareasfollows:

Type LengthofCommitment Amount

(inmillions)

Rawmaterialsandsupplies(1) Packaging,grapes,hops,corn,andmalts throughDecember2037 $ 3,159.0

Contractservices Transportation,marketing,warehousing,andbottlingservices,andITandenergycontracts throughDecember2030 765.4

Capitalexpenditures(2) Property,plant,andequipmentandcontractorandmanufacturingservices throughJanuary2024 489.8

In-processinventories Bulkwineandspirits throughApril2025 50.6

Other Finishedwinecasegoods throughMay2029 19.7

$ 4,484.5

(1) Certaingrapepurchasingarrangementsincludethepurchaseofgrapeproductionyieldedfromspecifiedblocksofavineyard.Theactualtonnageandpriceofgrapesthatwepurchasewillvaryeachyeardependingoncertainfactors,includingweather,timeofharvest,overallmarketconditions,andtheagriculturalpracticesandlocationofthevineyard.Amountsincludedhereinfortheestimatedaggregateminimumgrapepurchasecommitmentsconsistofestimatesforthepurchaseofthegrapesandtheimplicitleasesoftheland.Certaingrapepurchasingarrangementsclassifiedasleaseshavenotresultedintherecognitionofright-of-useassetsandleaseliabilitiesonourbalancesheetduetotheirvariablenature.

(2) ConsistsofpurchasecommitmentsenteredintoprimarilyinconnectionwiththeMexicoBeerProjects.

Additionally,wehaveenteredintovariouscontractualarrangementswithaffiliatesofOwens-Illinois,arelatedpartyentity,primarilyforthepurchaseofglassbottlesusedlargelyinourimportedandcraftbeerportfolios.AmountspurchasedunderthesearrangementsfortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020,were$123.5million,$154.7million,and$166.6million,respectively.

IndemnificationliabilitiesInconnectionwithpriordivestitures,wehaveindemnifiedrespectivepartiesagainstcertainliabilitiesthat

mayarisesubsequenttothedivestiture.AsofFebruary28,2022,andFebruary28,2021,theseliabilitiesconsistprimarilyofindemnificationsrelatedtocertainincometaxmattersandleasecontracts.AsofFebruary28,2022,andFebruary28,2021,thecarryingamountofourindemnificationliabilitieswas$16.6millionand$17.0million,respectively,andisincludedindeferredincometaxesandotherliabilities.Wedonotexpecttoberequiredtomakematerialpaymentsundertheindemnificationsandwebelievethatthelikelihoodisremotethattheindemnificationscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

LegalmattersIntheordinarycourseofourbusiness,wearesubjecttolawsuits,arbitration,claims,andotherlegal

proceedingsinconnectionwithourbusiness.Someofthelegalactionsincludeclaimsforsubstantialorunspecifiedcompensatoryand/orpunitivedamagesand/orinjunctiverelief.Asubstantialadversejudgmentorotherunfavorableresolutionofthesematterscouldhaveamaterialadverseeffectonourfinancialcondition,resultsofoperations,orcashflows.Managementbelievesthatwehaveadequatelegaldefenseswithrespecttothelegalproceedingstowhichitisadefendantorrespondentandthattheoutcomeofthesependingproceedingsisnotlikelytohaveamaterialadverseeffectonourfinancialcondition,resultsofoperations,orcashflows.However,weareunabletopredicttheoutcomeofthesematters.



RegulatorymattersWeareindiscussionswithvariousgovernmentalagenciesconcerningmattersraisedduringregulatory

examinationsorotherwisesubjecttosuchagencies’inquiry.Thesematterscouldresultincensures,fines,orothersanctions.Managementbelievestheoutcomeofanypendingregulatorymatterswillnothaveamaterialadverseeffectonourfinancialcondition,resultsofoperations,orcashflows.However,weareunabletopredicttheoutcomeofthesematters.

17. STOCKHOLDERS’EQUITY

CommonstockWehavetwoclassesofcommonstockwithamaterialnumberofsharesoutstanding:ClassAStockand

ClassBStock.ClassBStocksharesareconvertibleintosharesofClassAStockonaone-to-onebasisatanytimeattheoptionoftheholder.HoldersofClassBStockareentitledto10votespershare.HoldersofClassAStockareentitledtoonevotepershareandacashdividendpremium.IfwepayacashdividendonClassBStock,eachshareofClassAStockwillreceiveanamountatleast10%greaterthantheamountofthecashdividendpersharepaidonClassBStock.Inaddition,theBoardofDirectorsmaydeclareandpayadividendonClassAStockwithoutpayinganydividendonClassBStock.However,ourseniorcreditfacilitylimitsthecashdividendsthatwecanpayonourcommonstocktoafixedamountperquarterbutthefixedamountmaybeexceededsubjecttovariousconditionssetforthintheseniorcreditfacility.

Inaddition,wehaveaclassofcommonstockwithanimmaterialnumberofsharesoutstanding:Class1Stock.SharesofClass1Stockgenerallyhavenovotingrights.Class1StocksharesareconvertibleintosharesofClassAStockonaone-to-onebasisatanytimeattheoptionoftheholder,providedthattheholderimmediatelysellstheClassAStockacquireduponconversion.BecausesharesofClass1StockareconvertibleintosharesofClassAStock,foreachshareofClass1Stockissued,wemustreserveoneshareofClassAStockforissuanceupontheconversionoftheshareofClass1Stock.HoldersofClass1Stockdonothaveanypreferenceastodividends,butmayparticipateinanydividendifandwhendeclaredbytheBoardofDirectors.IfwepayacashdividendonClass1Stock,eachshareofClassAStockwillreceiveanamountatleast10%greaterthantheamountofcashdividendpersharepaidonClass1Stock.Inaddition,theBoardofDirectorsmaydeclareandpayadividendonClassAStockwithoutpayingadividendonClass1Stock.ThecashdividendsdeclaredandpaidonClassBStockandClass1Stockmustalwaysbethesame.

Thenumberofsharesofcommonstockissuedandtreasurystock,andassociatedshareactivity,areasfollows:

BalanceatFebruary28,2019 185,740,178 28,322,419 1,149,624 18,927,966 5,005,800

Sharerepurchases — — — 265,593 —

Conversionofshares 350,567 (22,213) (328,354) — —

Exerciseofstockoptions — — 870,957 (747,527) —

Employeestockpurchases — — — (69,324) —

Vestingofrestrictedstockunits(1) — — — (91,311) —

Vestingofperformanceshareunits(1) — — — (29,015) —

Cancellationofrestrictedshares — — — 444 —


Conversionofshares 1,113,535 (29,918) (1,083,617) — —

Exerciseofstockoptions — — 4,326 (1,020,853) —




BalanceatFebruary28,2021 187,204,280 28,270,288 612,936 17,070,550 5,005,800

CommonStock TreasuryStock

ClassA ClassB Class1 ClassA ClassB



Sharerepurchases — — — 6,179,015 —

Conversionofshares 59,579 (57,948) (1,631) — —

Exerciseofstockoptions — — 1,637,374 (287,873) —





CommonStock TreasuryStock

ClassA ClassB Class1 ClassA ClassB

(1) Netofthefollowingshareswithheldtosatisfytaxwithholdingrequirements:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

RestrictedStockUnits 36,213 37,933 49,900

PerformanceShareUnits 4,565 9,433 17,439

StockrepurchasesInJanuary2018,ourBoardofDirectorsauthorizedtherepurchaseofupto$3.0billionofourClassAStock

andClassBStock.InJanuary2021,ourBoardofDirectorsauthorizedanadditionalrepurchaseofupto$2.0billionofourClassAStockandClassBStock.TheBoardofDirectorsdidnotspecifyadateuponwhichtheseauthorizationswouldexpire.Sharesmayberepurchasedthroughopenmarketorprivatelynegotiatedtransactions.Sharesrepurchasedundertheseauthorizationswillbecometreasuryshares.

Asummaryofsharerepurchaseactivityisasfollows:

ClassACommonSharesRepurchased

FortheYearsEnded


DollarValue

NumberofShares

DollarValue

NumberofShares

DollarValue

NumberofShares


2018Authorization $ 1,390.5 6,179,015 $ — — $ 50.0 265,593

2021Authorization — — — — — —

$ 1,390.5 6,179,015 $ — — $ 50.0 265,593

SubsequenteventsStockrepurchasesOnApril7,2022,weenteredintoanASRtorepurchase$500.0millionofourClassAStock.Weutilized

short-termborrowingsandcashonhandtopaythedollarvalueforsharesrepurchasedinthisASRunderthe2018Authorization.PursuanttothetermsofthisASR,aninitialinstallmentof1.7millionsharesofClassAStockweredelivered.

AsofApril21,2022,totalsharesrepurchasedunderourboardauthorizationsareasfollows:

ClassACommonShares

RepurchaseAuthorization

DollarValueofShares

Repurchased

NumberofShares

Repurchased


2018Authorization $ 3,000.0 $ 2,936.4 12,802,171

2021Authorization $ 2,000.0 $ — —



CommonstockdividendsInApril2022,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.80pershareofClassAStock,

$0.72pershareofClassBStock,and$0.72pershareofClass1StockpayableinthefirstquarterofFiscal2023.

ClassBStockdeclassificationproposalInApril2022,wereceivedtheProposalwhichproposesthateachshareofClassBStockwouldbe

convertedinto1.35sharesofClassAStock.OurBoardofDirectorshasestablishedaSpecialCommitteetoevaluatetheProposal.AnydefinitiveagreementwithrespecttothepotentialtransactionmustbeapprovedbytheSpecialCommitteeaswellasourBoardofDirectors.Inaddition,pursuanttothetermsoftheProposal,anypotentialtransactionwouldrequiretheapprovalofholdersofamajorityofthesharesofourClassAStockthatdonotalsoholdsharesofClassBStock.

18. STOCK-BASEDEMPLOYEECOMPENSATION

Wehavetwostock-basedemployeecompensationplans(asfurtherdiscussedbelow).Totalcompensationcostrecognizedforourstock-basedawardsandincometaxbenefitsrelatedtheretoareasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Totalcompensationcostrecognizedinourresultsofoperations $ 44.9 $ 63.0 $ 60.4

Incometaxbenefitrelatedtheretorecognizedinourresultsofoperations $ 6.6 $ 9.2 $ 9.5

Long-TermStockIncentivePlanUnderourLong-TermStockIncentivePlan,nonqualifiedstockoptions,restrictedstock,restrictedstock

units,performanceshareunits,andotherstock-basedawardsmaybegrantedtoouremployees,officers,anddirectors.TheaggregatenumberofsharesofourClassAStockandClass1StockavailableforawardsunderourLong-TermStockIncentivePlanis108,000,000shares.

Theexerciseprice,vestingperiod,andtermofnonqualifiedstockoptionsgrantedareestablishedbythecommitteeadministeringtheplan(the“Committee”).TheexercisepriceofanynonqualifiedstockoptionmaynotbelessthanthefairmarketvalueofourClassAStockonthedateofgrant.Nonqualifiedstockoptionsgenerallyvestandbecomeexercisableoverafour-yearperiodfromthedateofgrantandexpireasestablishedbytheCommittee,butnotlaterthan10yearsafterthegrantdate.

Grantsofrestrictedstock,restrictedstockunits,performanceshareunits,andotherstock-basedawardsmaycontainsuchvestingperiods,terms,conditions,andotherrequirementsastheCommitteemayestablish.Restrictedstockandrestrictedstockunitawardsarebasedonserviceandgenerallyvestoveronetofouryearsfromthedateofgrant.Performanceshareunitawardsarebasedonserviceandthesatisfactionofcertainperformanceconditions,andvestoverarequiredemployeeserviceperiod,generallyfromonetothreeyearsfromthedateofgrant,whichcloselymatchestheperformanceperiod.Theperformanceconditionsincludetheachievementofspecifiedfinancialoroperationalperformancemetrics,ormarketconditionswhichrequiretheachievementofspecifiedlevelsofstockholderreturnrelativetoothercompaniesasdefinedintheapplicableperformanceshareunitagreement.Theactualnumberofsharestobeawardeduponvestingofaperformanceshareunitawardwillrangebetween0%and200%ofthetargetaward,baseduponthemeasureofperformanceascertifiedbytheCommittee.



AsummaryofstockoptionactivityunderourLong-TermStockIncentivePlanisasfollows:

FortheYearsEnded


Numberof

Options

WeightedAverageExercisePrice

Numberof

Options


Numberof

Options


OutstandingasofMarch1 4,399,807 $ 131.89 4,525,418 $ 108.87 5,691,219 $ 81.87

Granted 513,829 $ 237.85 973,286 $ 154.62 639,957 $ 206.76

Exercised (1,925,247) $ 86.92 (1,025,179) $ 47.42 (1,618,484) $ 41.77

Forfeited (75,917) $ 192.96 (56,897) $ 185.59 (175,917) $ 201.44

Expired (6,130) $ 226.46 (16,821) $ 221.16 (11,357) $ 224.07

OutstandingasoflastdayofFebruary 2,906,342 $ 178.62 4,399,807 $ 131.89 4,525,418 $ 108.87

Exercisable 1,410,693 $ 161.53 2,754,888 $ 104.94 3,330,164 $ 75.61

AsofFebruary28,2022,theaggregateintrinsicvalueofouroptionsoutstandingandexercisablewas$123.1millionand$79.8million,respectively.Inaddition,theweightedaverageremainingcontractuallifeforouroptionsoutstandingandexercisablewas6.7yearsand5.1years,respectively.

Thefairvalueofstockoptionsvested,andtheintrinsicvalueofandtaxbenefitrealizedfromtheexerciseofstockoptions,areasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Fairvalueofstockoptionsvested $ 23.9 $ 21.1 $ 21.1

Intrinsicvalueofstockoptionsexercised $ 269.1 $ 142.1 $ 255.0

Taxbenefitrealizedfromstockoptionsexercised $ 62.9 $ 33.9 $ 60.4

Theweightedaveragegrant-datefairvalueofstockoptionsgrantedandtheweightedaverageinputsusedtoestimatethefairvalueonthedateofgrantusingtheBlack-Scholesoption-pricingmodelareasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

Grant-datefairvalue $ 59.27 $ 31.26 $ 44.90

Expectedlife(1) 6.3years 6.3years 6.0years

Expectedvolatility(2) 27.8% 26.6% 22.1%

Risk-freeinterestrate(3) 1.2% 0.5% 2.5%

Expecteddividendyield(4) 1.3% 1.9% 1.5%

(1) Basedonhistoricalexperienceofemployees’exercisebehaviorforsimilartypeawards.(2) BasedprimarilyonhistoricalvolatilitylevelsofourClassAStock.(3) BasedontheimpliedyieldcurrentlyavailableonU.S.Treasuryzerocouponissueswitharemainingtermequal

totheexpectedlife.(4) BasedonthecalculatedyieldonourClassAStockatdateofgrantusingthecurrentfiscalyearprojected

annualizeddividenddistributionrate.



AsummaryofrestrictedstockandperformanceshareactivityunderourLong-TermStockIncentivePlanisasfollows:

RestrictedStockAwards

OutstandingbalanceasofMarch1,Nonvested — $ — — $ — 3,914 $ 214.29

Granted — $ — — $ — — $ —

Vested — $ — — $ — (3,470) $ 214.34

Forfeited — $ — — $ — (444) $ 213.85

OutstandingbalanceasoflastdayofFebruary,Nonvested — $ — — $ — — $ —

RestrictedStockUnits

OutstandingbalanceasofMarch1,Nonvested 311,358 $ 183.74 271,143 $ 196.58 314,252 $ 181.62

Granted 113,686 $ 236.19 178,550 $ 165.57 138,472 $ 203.32

Vested (107,626) $ 184.81 (118,220) $ 185.75 (141,211) $ 168.68

Forfeited (26,247) $ 196.41 (20,115) $ 183.77 (40,370) $ 200.87

OutstandingbalanceasoflastdayofFebruary,Nonvested 291,171 $ 202.68 311,358 $ 183.74 271,143 $ 196.58

PerformanceShareUnits

OutstandingbalanceasofMarch1,Nonvested 226,463 $ 223.85 221,749 $ 231.49 259,464 $ 213.27

Granted 27,029 $ 318.71 39,781 $ 202.53 60,031 $ 253.72

Performanceachievement(1) (148,495) $ 210.36 (1,517) $ 250.30 (17,035) $ 168.00

Vested (12,499) $ 279.67 (26,768) $ 250.30 (46,454) $ 156.80

Forfeited (5,857) $ 229.81 (6,782) $ 238.06 (34,257) $ 239.48

OutstandingbalanceasoflastdayofFebruary,Nonvested 86,641 $ 268.12 226,463 $ 223.85 221,749 $ 231.49

FortheYearsEnded


Number

WeightedAverage

Grant-DateFairValue Number

WeightedAverage

Grant-DateFairValue Number

WeightedAverage

Grant-DateFairValue

(1) Reflectsthenetnumberofawardsachievedabove(below)targetlevelsbasedonactualperformancemeasuredattheendoftheperformanceperiod.

Thefairvalueofsharesvestedforourrestrictedstockandperformanceshareawardsisasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Restrictedstockawards $ — $ — $ 0.7

Restrictedstockunits $ 25.8 $ 19.2 $ 29.9

Performanceshareunits $ 3.0 $ 4.3 $ 9.9



Theweightedaveragegrant-datefairvalueofperformanceshareunitsgrantedwithamarketconditionandtheweightedaverageinputsusedtoestimatethefairvalueonthedateofgrantusingtheMonteCarloSimulationmodelareasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

Grant-datefairvalue $ 318.71 $ 202.53 $ 319.56

Grant-dateprice $ 238.31 $ 153.02 $ 205.46

Performanceperiod 2.9years 2.9years 2.8years

Expectedvolatility(1) 35.0% 31.7% 23.1%

Risk-freeinterestrate(2) 0.3% 0.2% 2.3%

Expecteddividendyield(3) 0.0% 0.0% 0.0%

(1) BasedprimarilyonhistoricalvolatilitylevelsofourClassAStock.(2) BasedontheimpliedyieldcurrentlyavailableonU.S.Treasuryzerocouponissueswitharemainingtermequal

totheperformanceperiod.(3) Noexpecteddividendyieldasunitsgrantedearndividendequivalents.

EmployeeStockPurchasePlanWehaveanEmployeeStockPurchasePlanunderwhich9,000,000sharesofClassAStockmaybeissued.

Underthetermsoftheplan,eligibleemployeesmaypurchasesharesofourClassAStockthroughpayrolldeductions.Thepurchasepriceisthelowerof85%ofthefairmarketvalueofthestockonthefirstorlastdayofthepurchaseperiod.FortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020,employeespurchased57,738shares,67,801shares,and69,324shares,respectively,underthisplan.

OtherAsofFebruary28,2022,therewas$64.3millionoftotalunrecognizedcompensationcostrelatedto

nonvestedstock-basedcompensationarrangementsgrantedunderourstock-basedemployeecompensationplans.Thiscostisexpectedtoberecognizedinourresultsofoperationsoveraweighted-averageperiodof2.2years.Withrespecttotheissuanceofsharesunderanyofourstock-basedcompensationplans,wehavetheoptiontoissueauthorizedbutunissuedsharesortreasuryshares.

19. NETINCOME(LOSS)PERCOMMONSHAREATTRIBUTABLETOCBI

Thecomputationofbasicanddilutednetincome(loss)percommonshareisasfollows:

Netincome(loss)attributabletoCBIallocated–basic $ (35.8) $ (4.6) $ 1,777.2 $ 220.8 $ (10.2) $ (1.6)

ConversionofClassBcommonsharesintoClassAcommonshares — — 220.8 — — —

Effectofstock-basedawardsonallocatednetincome(loss) — — — (1.5) — —

Netincome(loss)attributabletoCBIallocated–diluted $ (35.8) $ (4.6) $ 1,998.0 $ 219.3 $ (10.2) $ (1.6)

FortheYearsEnded


ClassAStock

ClassBStock

ClassAStock

ClassBStock

ClassAStock

ClassBStock

(inmillions,exceptpersharedata)



Weightedaveragecommonsharesoutstanding–basic 167.431 23.225 170.239 23.280 168.329 23.313

ConversionofClassBcommonsharesintoClassAcommonshares(1) — — 23.280 — — —

Stock-basedawards,primarilystockoptions(1) — — 1.789 — — —

Weightedaveragecommonsharesoutstanding–diluted 167.431 23.225 195.308 23.280 168.329 23.313

Netincome(loss)percommonshareattributabletoCBI–basic $ (0.22) $ (0.20) $ 10.44 $ 9.48 $ (0.07) $ (0.07)

Netincome(loss)percommonshareattributabletoCBI–diluted $ (0.22) $ (0.20) $ 10.23 $ 9.42 $ (0.07) $ (0.07)

FortheYearsEnded


ClassAStock

ClassBStock

ClassAStock

ClassBStock

ClassAStock

ClassBStock


(1) Wehaveexcludedthefollowingweightedaveragecommonsharesoutstandingfromthecalculationofdilutednetincome(loss)percommonshare,astheeffectofincludingthesewouldhavebeenanti-dilutive:

FortheYearsEnded

February28,2022

February29,2020

(inmillions)

ClassBStock 23.225 23.313

Stock-basedawards,primarilystockoptions 1.566 3.239

20. ACCUMULATEDOTHERCOMPREHENSIVEINCOME(LOSS)

Othercomprehensiveincome(loss)attributabletoCBIincludesthefollowingcomponents:


Othercomprehensiveincome(loss)attributabletoCBI:

Foreigncurrencytranslationadjustments:

Netgain(loss) $ 83.4 $ — $ 83.4

Reclassificationadjustments (22.6) — (22.6)

Netgain(loss)recognizedinothercomprehensiveincome(loss) 60.8 — 60.8

Unrealizedgain(loss)oncashflowhedges:

Netderivativegain(loss) 48.0 6.4 54.4

Reclassificationadjustments (15.3) (1.7) (17.0)

Netgain(loss)recognizedinothercomprehensiveincome(loss) 32.7 4.7 37.4

Pension/postretirementadjustments:

Netactuarialgain(loss) (3.1) 0.9 (2.2)

Reclassificationadjustments 1.8 (0.1) 1.7

Netgain(loss)recognizedinothercomprehensiveincome(loss) (1.3) 0.8 (0.5)

BeforeTaxAmount

Tax(Expense)Benefit

NetofTaxAmount

(inmillions)



ShareofOCIofequitymethodinvestments:

Netgain(loss) (13.3) 3.2 (10.1)

Reclassificationadjustments — — —


Othercomprehensiveincome(loss)attributabletoCBI $ 78.9 $ 8.7 $ 87.6




Netgain(loss) $ (51.9) $ — $ (51.9)

Reclassificationadjustments 5.1 — 5.1

Netgain(loss)recognizedinothercomprehensiveincome(loss) (46.8) — (46.8)


Netderivativegain(loss) (48.1) 3.2 (44.9)

Reclassificationadjustments 28.8 (2.9) 25.9



Netactuarialgain(loss) (2.3) 0.7 (1.6)




Netgain(loss) (1.6) (0.2) (1.8)


Netgain(loss)recognizedinothercomprehensiveincome(loss) (1.6) (0.2) (1.8)

Othercomprehensiveincome(loss)attributabletoCBI $ (70.0) $ 0.8 $ (69.2)




Netgain(loss) $ (38.9) $ — $ (38.9)


Netgain(loss)recognizedinothercomprehensiveincome(loss) (38.9) — (38.9)


Netderivativegain(loss) 12.6 (7.5) 5.1

Reclassificationadjustments (34.0) 2.9 (31.1)

Netgain(loss)recognizedinothercomprehensiveincome(loss) (21.4) (4.6) (26.0)


Netactuarialgain(loss) 2.3 (0.6) 1.7

Reclassificationadjustments (2.1) 0.6 (1.5)

Netgain(loss)recognizedinothercomprehensiveincome(loss) 0.2 — 0.2

BeforeTaxAmount

Tax(Expense)Benefit

NetofTaxAmount

(inmillions)




Netgain(loss) (16.2) 3.7 (12.5)



Othercomprehensiveincome(loss)attributabletoCBI $ (76.3) $ (0.9) $ (77.2)

BeforeTaxAmount

Tax(Expense)Benefit

NetofTaxAmount

(inmillions)

Accumulatedothercomprehensiveincome(loss),netofincometaxeffect,includesthefollowingcomponents:

ForeignCurrencyTranslationAdjustments

UnrealizedNetGain(Loss)onDerivativeInstruments

Pension/PostretirementAdjustments

ShareofOCIofEquityMethodInvestments

AccumulatedOther

ComprehensiveIncome(Loss)

(inmillions)

Balance,February28,2021 $ (392.5) $ 43.5 $ (4.2) $ 17.7 $ (335.5)

Othercomprehensiveincome(loss):

Othercomprehensiveincome(loss)beforereclassificationadjustments (38.9) 5.1 1.7 (12.5) (44.6)

Amountsreclassifiedfromaccumulatedothercomprehensiveincome(loss) — (31.1) (1.5) — (32.6)

Othercomprehensiveincome(loss) (38.9) (26.0) 0.2 (12.5) (77.2)

Balance,February28,2022 $ (431.4) $ 17.5 $ (4.0) $ 5.2 $ (412.7)

21. SIGNIFICANTCUSTOMERSANDCONCENTRATIONOFCREDITRISK

Netsalestoour10largestcustomersrepresentedapproximatelyhalfofournetsalesfortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020,andareexpectedtocontinuetorepresentasignificantportionofourrevenues.Netsalestoanindividualcustomerwhichamountto10%ormoreofournetsales,andtheassociatedamountsreceivablefromthiscustomerasapercentageofouraccountsreceivable,areasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

ReyesBeerDivisionentities

Netsales 21.0% 18.6% 16.1%

Accountsreceivable 11.1% 12.7% 10.6%

SouthernGlazer’sWineandSpirits

Netsales 14.4% 10.5% 10.5%

Accountsreceivable 35.2% 28.7% 27.2%

NetsalesfortheabovecustomersareprimarilyreportedwithintheBeerandWineandSpiritssegments,respectively.Ourarrangementswithcertainofourcustomersmay,generally,beterminatedbyeitherpartywithpriornotice.Themajorityofouraccountsreceivablebalanceisgeneratedfromsalestoindependentdistributorswithwhomwehaveapredeterminedcollectiondatearrangedthroughelectronicfundstransfer.Weperformongoingcreditevaluationsofourcustomers’financialposition,andmanagementisoftheopinionthatanyriskofsignificantlossisreducedduetothediversityofourcustomersandgeographicsalesarea.



22. BUSINESSSEGMENTINFORMATION

Ourinternalmanagementfinancialreportingconsistsofthreebusinessdivisions:(i)Beer,(ii)WineandSpirits,and(iii)Canopyandwereportouroperatingresultsinfoursegments:(i)Beer,(ii)WineandSpirits,(iii)CorporateOperationsandOther,and(iv)Canopy.TheCanopyEquityMethodInvestmentmakesuptheCanopysegment.

IntheBeersegment,ourportfolioconsistsofhigh-endimportedbeerbrands,craftbeer,andABAs.Wehaveanexclusiveperpetualbrandlicensetoimport,market,andsellourMexicanbeerportfoliointheU.S.IntheWineandSpiritssegment,wesellaportfoliothatincludeshigher-margin,higher-growthwinebrandscomplementedbycertainhigher-endspiritsbrands.AmountsincludedintheCorporateOperationsandOthersegmentconsistofcostsofexecutivemanagement,corporatedevelopment,corporatefinance,corporategrowthandstrategy,humanresources,internalaudit,investorrelations,legal,publicrelations,andinformationtechnology,aswellasourinvestmentsmadethroughourcorporateventurecapitalfunction.AllcostsincludedintheCorporateOperationsandOthersegmentaregeneralcoststhatareapplicabletotheconsolidatedgroupandare,therefore,notallocatedtotheotherreportablesegments.AllcostsreportedwithintheCorporateOperationsandOthersegmentarenotincludedinourCODM’sevaluationoftheoperatingincome(loss)performanceoftheotherreportablesegments.Thebusinesssegmentsreflecthowouroperationsaremanaged,howresourcesareallocated,howoperatingperformanceisevaluatedbyseniormanagement,andthestructureofourinternalfinancialreporting.Long-livedtangibleassetsandtotalassetinformationbysegmentisnotprovidedto,orreviewedby,ourCODMasitisnotusedtomakestrategicdecisions,allocateresources,orassessperformance.

Inaddition,managementexcludesComparableAdjustmentsfromitsevaluationoftheresultsofeachoperatingsegmentastheseComparableAdjustmentsarenotreflectiveofcoreoperationsofthesegments.Segmentoperatingperformanceandtheincentivecompensationofsegmentmanagementareevaluatedbasedoncoresegmentoperatingincome(loss)whichdoesnotincludetheimpactoftheseComparableAdjustments.

Weevaluatesegmentoperatingperformancebasedonoperatingincome(loss)oftherespectivebusinessunits.ComparableAdjustmentsthatimpactedcomparabilityinoursegmentoperatingincome(loss)foreachperiodareasfollows:

Costofproductsold

Netgain(loss)onundesignatedcommodityderivativecontracts $ 109.9 $ 25.1 $ (49.0)

Netflowthroughofreservedinventory 12.1 — —

Settlementsofundesignatedcommodityderivativecontracts (35.9) 31.6 11.7

Strategicbusinessdevelopmentcosts (2.6) (29.8) (124.5)

Recoveryof(losson)inventorywrite-down (1.0) (70.4) 8.6

Flowthroughofinventorystep-up (0.1) (0.4) (1.5)

COVID-19incrementalcosts — (7.6) —

Accelerateddepreciation — (0.1) (7.6)

Totalcostofproductsold 82.4 (51.6) (162.3)

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)




Transitionservicesagreementsactivity (19.2) 0.4 —

Transaction,integration,andotheracquisition-relatedcosts (1.4) (7.6) (9.2)

Restructuringandotherstrategicbusinessdevelopmentcosts 0.6 (23.9) (25.3)

Netgain(loss)onforeigncurrencyderivativecontracts — (8.0) (1.8)

Impairmentofintangibleassets — (6.0) (11.0)

COVID-19incrementalcosts — (4.8) —

Othergains(losses)(1) (2.3) 14.3 7.3

Totalselling,general,andadministrativeexpenses (22.3) (35.6) (40.0)

Impairmentofbreweryconstructioninprogress (665.9) — —

Impairmentofassetsheldforsale — (24.0) (449.7)

Gain(loss)onsaleofbusiness 1.7 14.2 74.1

ComparableAdjustments,Operatingincome(loss) $ (604.1) $ (97.0) $ (577.9)

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)


FortheYearsEnded

February28,2022

February28,2021

February29,2020

Adjustmenttounderstatedexcisetaxaccrualsprimarilyrelatedtoapriorperiodacquisition $ (13.3) $ — $ —

Decrease(increase)inestimatedfairvalueofcontingentliabilitiesassociatedwithpriorperiodacquisitions $ (9.6) $ 9.7 $ (11.4)

IncreaseinourownershipinterestinMyFavoriteNeighbor(Fiscal2022)andNelson’sGreenBrier(Fiscal2020) $ 13.5 $ — $ 11.8

Propertytaxsettlement $ 10.4 $ — $ —

Saleofcertainnon-coreassets $ — $ 8.8 $ (0.3)

Recognitionofpreviouslydeferredgainuponreleaseofarelatedguarantee $ — $ — $ 6.2



TheaccountingpoliciesofthesegmentsarethesameasthosedescribedfortheCompanyintheSummaryofSignificantAccountingPoliciesinNote1.AmountsincludedbelowfortheCanopysegmentrepresent100%ofCanopy’sreportedresultsonatwo-monthlag,preparedinaccordancewithU.S.GAAP,andconvertedfromCanadiandollarstoU.S.dollars.Althoughweownlessthan100%oftheoutstandingsharesofCanopy,100%ofitsresultsareincludedintheinformationbelowandsubsequentlyeliminatedinordertoreconciletoourconsolidatedfinancialstatements.Segmentinformationisasfollows:

Beer

Netsales $ 6,751.6 $ 6,074.6 $ 5,615.9

Segmentoperatingincome(loss) $ 2,703.3 $ 2,494.3 $ 2,247.9

Capitalexpenditures $ 849.5 $ 693.9 $ 571.7

Depreciationandamortization $ 248.7 $ 194.7 $ 204.3

WineandSpirits

Netsales:

Wine $ 1,819.3 $ 2,208.4 $ 2,367.5

Spirits 249.8 331.9 360.1

Netsales $ 2,069.1 $ 2,540.3 $ 2,727.6

Segmentoperatingincome(loss) $ 470.7 $ 622.4 $ 708.4

Income(loss)fromunconsolidatedinvestments $ 34.4 $ 31.7 $ 36.4

Equitymethodinvestments(1) $ 97.2 $ 125.7 $ 87.7



CorporateOperationsandOther

Segmentoperatingincome(loss) $ (238.2) $ (228.6) $ (223.9)

Income(loss)fromunconsolidatedinvestments $ (3.5) $ (0.4) $ (3.2)

Equitymethodinvestments $ 88.0 $ 83.9 $ 94.5



Canopy

Netsales $ 444.3 $ 378.6 $ 290.2

Segmentoperatingincome(loss) $ (630.1) $ (1,496.0) $ (685.8)



ConsolidationandEliminations

Netsales $ (444.3) $ (378.6) $ (290.2)

Operatingincome(loss) $ 630.1 $ 1,496.0 $ 685.8

Income(loss)fromunconsolidatedinvestments $ (178.2) $ (146.2) $ (221.7)

Equitymethodinvestments $ 2,503.5 $ 2,578.8 $ 2,911.7

Capitalexpenditures $ (50.4) $ (172.6) $ (572.8)

Depreciationandamortization $ (90.0) $ (103.3) $ (81.4)

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)



ComparableAdjustments

Operatingincome(loss) $ (604.1) $ (97.0) $ (577.9)

Income(loss)fromunconsolidatedinvestments $ (1,488.2) $ 265.2 $ (2,480.1)

Depreciationandamortization $ — $ 0.1 $ 7.6

Consolidated

Netsales $ 8,820.7 $ 8,614.9 $ 8,343.5

Operatingincome(loss) $ 2,331.7 $ 2,791.1 $ 2,154.5

Income(loss)fromunconsolidatedinvestments(2) $ (1,635.5) $ 150.3 $ (2,668.6)

Equitymethodinvestments(1) $ 2,688.7 $ 2,788.4 $ 3,093.9

Capitalexpenditures $ 1,026.8 $ 864.6 $ 726.5


FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

(1) EquitymethodinvestmentsbalanceatFebruary29,2020,excludesamountsreclassifiedtoassetsheldforsale.(2) Income(loss)fromunconsolidatedinvestmentsconsistsof:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Unrealizednetgain(loss)onsecuritiesmeasuredatfairvalue $ (1,644.7) $ 802.0 $ (2,126.4)

Equityinearnings(losses)fromCanopyandrelatedactivities(i) (73.6) (679.0) (575.9)

Equityinearnings(losses)fromotherequitymethodinvestees 31.8 27.3 33.3

Netgain(loss)onsaleofunconsolidatedinvestment 51.0 — 0.4

$ (1,635.5) $ 150.3 $ (2,668.6)

(i)TheyearendedFebruary29,2020,includestheJune2019ModificationLoss.

OurprincipalareaofoperationisintheU.S.CurrentoperationsoutsidetheU.S.areinMexicofortheBeersegmentandprimarilyinNewZealandandItalyfortheWineandSpiritssegment.Revenuesareattributedtocountriesbasedonthelocationofthecustomer.

Geographicdataisasfollows:

FortheYearsEnded

February28,2022

February28,2021

February29,2020

(inmillions)

Netsales

U.S. $ 8,585.8 $ 8,396.5 $ 8,116.2

Non-U.S.(primarilyCanada) 234.9 218.4 227.3

$ 8,820.7 $ 8,614.9 $ 8,343.5



February28,2022

February28,2021

(inmillions)

Long-livedtangibleassets

U.S. $ 1,092.0 $ 1,005.3

Non-U.S.(primarilyMexico) 4,967.6 4,816.3

$ 6,059.6 $ 5,821.6

23. SELECTEDQUARTERLYFINANCIALINFORMATION(UNAUDITED)

Asummaryofselectedquarterlyfinancialinformationisasfollows:

FortheThreeMonthsEnded

February28,2022

February28,2021


Netsales $ 2,102.5 $ 1,953.0

Grossprofit $ 1,132.6 $ 993.7

Netincome(loss)attributabletoCBI(1) $ 395.4 $ 382.9

Netincome(loss)percommonshareattributabletoCBI(1):

Basic–ClassAStock $ 2.11 $ 2.00

Basic–ClassBStock $ 1.92 $ 1.81

Diluted–ClassAStock $ 2.07 $ 1.95

Diluted–ClassBStock $ 1.91 $ 1.80


FortheThreeMonthsEnded

February28,2022

February28,2021

(inmillions,netofincometaxeffect)

Unrealizednetgain(loss)onsecuritiesmeasuredatfairvalue $ (135.2) $ 206.3

Equityinearnings(losses)fromCanopy $ (31.9) $ (189.5)



Item9A.ControlsandProcedures

DisclosurecontrolsandproceduresOurChiefExecutiveOfficerandourChiefFinancialOfficerhaveconcluded,basedontheirevaluationasof

theendoftheperiodcoveredbythisreport,thattheCompany’s“disclosurecontrolsandprocedures”(asdefinedintheExchangeActRules13a-15(e)and15d-15(e))areeffectivetoensurethatinformationrequiredtobedisclosedinthereportsthatwefileorsubmitundertheExchangeAct(i)isrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintheSEC’srulesandforms,and(ii)isaccumulatedandcommunicatedtoourmanagement,includingourChiefExecutiveOfficerandourChiefFinancialOfficer,asappropriatetoallowtimelydecisionsregardingrequireddisclosure.

InternalcontroloverfinancialreportingSeepage59ofthisForm10-KforManagement’sAnnualReportonInternalControloverFinancial

Reporting,whichisincorporatedhereinbyreference.

Seepage60ofthisForm10-KfortheattestationreportofKPMGLLP,ourindependentregisteredpublicaccountingfirm,whichisincorporatedhereinbyreference.

Althoughmostofourcorporateandnon-productionworkforceareworkingremotelyduetoCOVID-19,wehavenotexperiencedamaterialimpacttoourinternalcontroloverfinancialreporting.Wecontinuetomonitorthepandemicanditseffectsonthedesignandoperatingeffectivenessofourinternalcontrols.

WehavecompletedtheimplementationofanewglobalERPacrossourbusinessunitsusingaphasedapproach.Asaresultofthisimplementation,certaininternalcontrolsoverfinancialreportinghavebeenautomated,modified,orimplementedtoaddressthenewcontrolenvironmentassociatedwiththisERP.

Inconnectionwithmanagement’squarterlyevaluationof“internalcontroloverfinancialreporting”(asdefinedintheExchangeActRules13a-15(f)and15d-15(f)),otherthantheERPimplementationnotedabove,nootherchangeswereidentifiedinourinternalcontroloverfinancialreportingduringourfiscalquarterendedFebruary28,2022(ourfourthfiscalquarter)thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.

PARTII OTHERKEYINFORMATION TableofContents


Item10.Directors,ExecutiveOfficers,andCorporateGovernance

TheinformationrequiredbythisItem(exceptfortheinformationregardingexecutiveofficersrequiredbyItem401ofRegulationS-KwhichisincludedinPartIhereofinaccordancewithGeneralInstructionG(3))isincorporatedhereinbyreferencetotheProxyStatementunderthosesectionsoftheProxyStatementtobetitled“DirectorNominees”and“TheBoardofDirectorsandCommitteesoftheBoard.”TheProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

WehaveadoptedtheChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthicswhichisacodeofethicsthatappliestoourchiefexecutiveofficerandourseniorfinancialofficers.TheChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthicsislocatedonourinvestorrelationswebsiteathttps://ir.cbrands.com.Amendmentsto,andwaiversgrantedunder,ourChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthics,ifany,willbepostedtoourwebsiteaswell.Wewillprovidetoanyone,withoutcharge,uponrequest,acopyofsuchCodeofEthics.SuchrequestsshouldbedirectedinwritingtoInvestorRelationsDepartment,ConstellationBrands,Inc.,207HighPointDrive,Building100,Victor,NewYork14564orbytelephoningourInvestorCenterat1-888-922-2150.

Item11.ExecutiveCompensation

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementunderthosesectionsoftheProxyStatementtobetitled“ExecutiveCompensation,”“CompensationCommitteeInterlocksandInsiderParticipation,”and“DirectorCompensation.”TheProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.Notwithstandingtheforegoing,theCompensationCommitteeReportincludedwithinthesectionoftheProxyStatementtobetitled“ExecutiveCompensation”isonlybeing“furnished”hereunderandshallnotbedeemed“filed”withtheSECorsubjecttotheliabilitiesofSection18oftheExchangeAct.

Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementunderthatsectionoftheProxyStatementtobetitled“BeneficialOwnership.”TheProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

SecuritiesauthorizedforissuanceunderequitycompensationplansThefollowingtablesetsforthinformationwithrespecttoourcompensationplansunderwhichourequity

securitiesmaybeissued,asofFebruary28,2022.TheequitycompensationplansapprovedbysecurityholdersincludeourLong-TermStockIncentivePlanandour1989EmployeeStockPurchasePlan.

PARTIII OTHERKEYINFORMATION TableofContents


EquityCompensationPlanInformation

PlanCategory

Numberofsecuritiestobeissueduponexerciseofoutstanding

options,warrants,andrights

Weightedaverageexercisepriceofoutstanding

options,warrants,andrights

Numberofsecurities

remainingavailableforfutureissuance

underequitycompensationplans

(excludingsecuritiesreflectedinfirstcolumn)

Equitycompensationplansapprovedbysecurityholders 3,370,795 (1) $ 178.62 (2) 11,213,268 (3)

Equitycompensationplansnotapprovedbysecurityholders — $ — —

Total 3,370,795 $ 178.62 11,213,268

(1) Includes173,282sharesofunvestedperformanceshareunitsand291,171sharesofunvestedrestrictedstockunitsunderourLong-TermStockIncentivePlan.Theunvestedperformanceshareunitsrepresentthemaximumnumberofsharestobeawarded,whichrangesfrom100%to200%ofthetargetsharesgranted.Wecurrentlyestimatethat60,321ofthetargetsharesgrantedwillbeawardedbetween45%and65%,and26,320ofthetargetsharesgrantedwillnotbeawardedbaseduponourexpectationsasofFebruary28,2022,regardingtheachievementofspecifiedperformancetargets.

(2) ExcludesunvestedperformanceshareunitsandunvestedrestrictedstockunitsunderourLong-TermStockIncentivePlanthatcanbeexercisedfornoconsideration.

(3) Includes1,228,150sharesofClassAStockunderourEmployeeStockPurchasePlanremainingavailableforpurchase,ofwhichapproximately29,500sharesaresubjecttopurchaseduringthecurrentofferingperiod.

Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementunderthosesectionsoftheProxyStatementtobetitled“DirectorNominees,”“TheBoardofDirectorsandCommitteesoftheBoard,”and“CertainRelationshipsandRelatedTransactions.”TheProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

Item14.PrincipalAccountantFeesandServices

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementunderthatsectionoftheProxyStatementtobetitled“Proposal2–RatificationoftheSelectionofKPMGLLPasIndependentRegisteredPublicAccountingFirm.”TheProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

PARTIII OTHERKEYINFORMATION TableofContents


Item15.ExhibitsandFinancialStatementSchedules

1. FinancialStatements

ThefollowingconsolidatedfinancialstatementsoftheCompanyaresubmittedherewith:

Management’sAnnualReportonInternalControlOverFinancialReporting

ReportofIndependentRegisteredPublicAccountingFirm–KPMGLLP

ReportofIndependentRegisteredPublicAccountingFirm–KPMGLLP

ConsolidatedBalanceSheets–February28,2022,andFebruary28,2021

ConsolidatedStatementsofComprehensiveIncome(Loss)fortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020

ConsolidatedStatementsofChangesinStockholders’EquityfortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020

ConsolidatedStatementsofCashFlowsfortheyearsendedFebruary28,2022,February28,2021,andFebruary29,2020

NotestoConsolidatedFinancialStatements

2. FinancialStatementSchedules

SchedulesarenotsubmittedbecausetheyarenotapplicableornotrequiredunderRegulationS-Xorbecausetherequiredinformationisincludedinthefinancialstatementsornotesthereto.

3. ExhibitsrequiredtobefiledbyItem601ofRegulationsS-K

TheinformationcalledforbythisItemisincorporatedbyreferencefromtheIndextoExhibitsincludedinthisForm10-K.

Item16.Form10-KSummary

None.

PARTIV OTHERKEYINFORMATION TableofContents


INDEXTOEXHIBITS

2.1 SubscriptionAgreement,datedasofAugust14,2018,byandbetweenCBGHoldingsLLCandCanopy,including,amongotherthings,aformoftheAmendedandRestatedInvestorRightsAgreement.†

8-K 2.1 August16,2018

2.2 ForeignExchangeRateAgreementdatedOctober26,2018,betweenCBGHoldingsLLCandCanopy.

10-Q 2.2 January9,2019

2.3 SecondAmendedandRestatedAssetPurchaseAgreementmadeandenteredintoasofMay22,2020,byandbetweentheCompanyandGallo.†‡

8-K 2.1 May29,2020

2.4 FirstAmendmentdatedSeptember28,2020andeffectiveSeptember28,2020,toSecondAmendedandRestatedAssetPurchaseAgreementmadeandenteredintoasofMay22,2020,byandbetweentheCompanyandGallo.

10-Q 2.6 October1,2020

2.5 AssetPurchaseAgreementmadeandenteredintoasofJune22,2020,byandbetweentheCompanyandGalloregardingtheNobiloWineDivestiture. 8-K 2.1 June25,2020

3.1 RestatedCertificateofIncorporationoftheCompany. 10-Q 3.1 October13,2009

3.2 CertificateofAmendmenttotheCertificateofIncorporationoftheCompany. 10-Q 3.2 October13,2009

3.3 By-LawsoftheCompany,amendedandrestatedasofApril6,2022. 8-K 3.1 April7,2022

4.1 Indenture,datedasofApril17,2012,byandamongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.1 April23,2012

4.2 SupplementalIndentureNo.1,withrespectto6.0%SeniorNotesdueMay2022,datedasofApril17,2012,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).

8-K 4.1.1 April23,2012

4.3 SupplementalIndentureNo.3,withrespectto3.75%SeniorNotesdueMay2021,datedasofMay14,2013,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).

8-K 4.1 May16,2013

4.4 SupplementalIndentureNo.4,withrespectto4.25%SeniorNotesdueMay2023,datedasofMay14,2013,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.2 May16,2013

4.5 SupplementalIndentureNo.5,datedasofJune7,2013,amongtheCompany,ConstellationBrandsBeachHoldings,Inc.,CrownImportsLLC,andM&T,asTrustee.

8-K 4.4 June11,2013

4.6 SupplementalIndentureNo.6datedasofMay28,2014,amongtheCompany,ConstellationMarketingServices,Inc.,andM&T,asTrustee.

10-Q 4.21 July10,2014

4.7 SupplementalIndentureNo.7,withrespectto3.875%SeniorNotesdue2019,datedasofNovember3,2014,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).

8-K 4.1 November7,2014

4.8 SupplementalIndentureNo.8,withrespectto4.750%SeniorNotesdue2024,datedasofNovember3,2014,amongtheCompanyasIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.


4.9 SupplementalIndentureNo.9,withrespectto4.750%SeniorNotesdue2025,datedDecember4,2015,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.1 December8,2015

4.10 SupplementalIndentureNo.10,datedasofJanuary15,2016,amongtheCompany,HomeBrewMart,Inc.,andM&T,asTrustee.

10-K 4.26 April25,2016

4.11 SupplementalIndentureNo.11withrespectto3.700%SeniorNotesdue2026,datedasofDecember6,2016,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.1 December6,2016

4.12 SupplementalIndentureNo.12withrespectto2.700%SeniorNotesdue2022,datedasofMay9,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).

8-K 4.1 May9,2017

IncorporatedbyReference

ExhibitNo. ExhibitDescription Form Exhibit FilingDate



http://www.sec.gov/Archives/edgar/data/16918/000119312518250743/d571451dex21.htm



http://www.sec.gov/Archives/edgar/data/16918/000001691819000007/stzex2-2_1130201810q.htm




http://www.sec.gov/Archives/edgar/data/16918/000001691820000237/stzex26831202010q.htm





http://www.sec.gov/Archives/edgar/data/16918/000095012309050030/l37765exv3w1.htm

http://www.sec.gov/Archives/edgar/data/16918/000095012309050030/l37765exv3w2.htm

http://www.sec.gov/Archives/edgar/data/16918/000001691822000035/stzex31_040720228k.htm















http://www.sec.gov/Archives/edgar/data/16918/000001691814000019/stzex421_531201410q.htm



















4.13 SupplementalIndentureNo.13withrespectto3.500%SeniorNotesdue2027,datedasofMay9,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.2 May9,2017

4.14 SupplementalIndentureNo.14withrespectto4.500%SeniorNotesdue2047,datedasofMay9,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.3 May9,2017

4.15 SupplementalIndentureNo.15withrespectto2.000%SeniorNotesdue2019,datedasofNovember7,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).


4.16 SupplementalIndentureNo.16withrespectto2.250%SeniorNotesdue2020datedasofNovember7,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).


4.17 SupplementalIndentureNo.17withrespectto2.650%SeniorNotesdue2022,datedasofNovember7,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).


4.18 SupplementalIndentureNo.18withrespectto3.200%SeniorNotesdue2023,datedasofFebruary7,2018,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.1 February7,2018





4.21 SupplementalIndentureNo.21withrespecttoSeniorFloatingRateNotesdue2021,datedasofOctober29,2018,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee(nolongeroutstanding).

8-K 4.1 October29,2018

4.22 SupplementalIndentureNo.22withrespectto4.400%SeniorNotesdue2025,datedasofOctober29,2018,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.2 October29,2018


8-K 4.3 October29,2018


8-K 4.4 October29,2018

4.25 SupplementalIndentureNo.25withrespectto3.150%SeniorNotesdue2029,datedasofJuly29,2019,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andM&T,asTrustee.

8-K 4.1 July29,2019

4.26 SupplementalIndentureNo.26withrespectto2.875%SeniorNotesdue2030,datedasofApril27,2020,amongtheCompany,asIssuerandM&T,asTrustee.

8-K 4.1 April27,2020

4.27 SupplementalIndentureNo.27withrespectto3.750%SeniorNotesdue2050,datedasofApril27,2020,amongtheCompany,asIssuerandM&T,asTrustee.

8-K 4.2 April27,2020

4.28 SupplementalIndentureNo.28withrespectto2.250%SeniorNotesdue2031,datedasofJuly26,2021,amongtheCompany,asIssuerandM&T,asTrustee.

8-K 4.1 July26,2021


















































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4.29 RestatementAgreement,datedasofMarch26,2020byandamongtheCompany,CBInternationalFinanceS.àr.l.,certainoftheCompany’ssubsidiariesasguarantors,BankofAmerica,N.A.,asAdministrativeAgent,andtheLenderspartythereto,includingtheNinthAmendedandRestatedCreditAgreementdatedasofMarch26,2020,byandamongtheCompany,CBInternationalFinancingS.àr.l.,BankofAmerica,N.A.,asAdministrativeAgent,andtheLenderspartythereto.†

8-K 4.1 March31,2020

4.30 2020TermLoanRestatementAgreement,datedasofMarch26,2020,byandamongtheCompany,certainoftheCompany’ssubsidiariesasguarantors,BankofAmerica,N.A.,asAdministrativeAgentandLender,includingtheAmendedandRestatedTermLoanCreditAgreement,datedMarch26,2020,byandbetweentheCompany,BankofAmerica,N.A.,asAdministrativeAgentandLender.†

8-K 4.3 March31,2020

4.31 AmendmentNo.1,datedasofJune10,2021,toAmendedandRestatedTermLoanCreditAgreement,datedasofMarch26,2020,byandamongtheCompanyandBankofAmerica,N.A.,asAdministrativeAgentandLender.†

10-Q 4.30 June30,2021

4.32 RestatementAgreement,datedasofApril14,2022,byandamongtheCompany,CBInternationalFinanceS.àr.l.,BankofAmerica,N.A.,asAdministrativeAgent,andtheLenderspartythereto,includingtheTenthAmendedandRestatedCreditAgreementdatedasofApril14,2022,byandamongtheCompany,CBInternationalFinanceS.àr.l.,BankofAmerica,N.A.,asAdministrativeAgent,andtheLenderspartythereto.†

8-K 4.1 April15,2022

4.33 AmendmentNo.2,datedasofApril14,2022,toAmendedandRestatedTermLoanCreditAgreement,datedasofMarch26,2020,asamendedbyAmendmentNo.1,datedasofJune10,2021,byandamongtheCompanyandBankofAmerica,N.A.,asAdministrativeAgentandLender.†

8-K 4.2 April15,2022

4.34 DescriptionoftheRegistrant’sSecuritiesRegisteredPursuanttoSection12oftheExchangeAct.

10-K 4.31 April20,2021

10.1 TheCompany’sLong-TermStockIncentivePlan,amendedandrestatedasofJuly18,2017.*

8-K 10.4 July20,2017

10.2 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril3,2012andbeforeApril28,2014).*

8-K 99.1 April5,2012


8-K 10.1 May1,2014


8-K 10.1 April28,2016


8-K 10.1 April25,2017


8-K 10.1 April26,2018


8-K 10.1 April26,2019


















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10.8 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril21,2020).*

10-Q 10.5 July1,2020

10.9 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril21,2017andbeforeApril23,2018).*

8-K 10.2 April25,2017


8-K 10.2 April26,2018

10.11 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril23,2019andbeforeApril21,2020.*

8-K 10.2 April26,2019


10-Q 10.6 July1,2020

10.13 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril20,2021).*

8-K 10.2 April23,2021

10.14 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(relatingtocliffvestedawards).*

8-K 10.1 July26,2013

10.15 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(providingforratablevestingoverthreeyears).*

10-K 10.20 April28,2015

10.16 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril23,2019andbeforeApril21,2020).*

8-K 10.3 April26,2019

10.17 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril21,2020).*†

10-Q 10.7 July1,2020

10.18 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(relatingtospecifiedperformancecriteria).*

10-K 10.28 April28,2015

10.19 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(relatingtocontingentgrants).*

8-K 10.1 October22,2018

10.20 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermIncentivePlan(relatingtomarginandmarketperformance).*

10-Q 10.5 October3,2019

10.21 FormofTermsandConditionsMemorandumforDirectorswithrespecttoaproratagrantofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan.*

8-K 99.1 April22,2010

10.22 FormofTermsandConditionsMemorandumforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly27,2012andbeforeJuly23,2014).*

8-K 10.3 July31,2012

10.23 FormofTermsandConditionsMemorandumforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly23,2014andbeforeJuly20,2016).*

8-K 10.1 July25,2014

10.24 FormofTermsandConditionsMemorandumforDirectorswithrespecttooptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly20,2016andbeforeJuly18,2017).*

8-K 10.1 July22,2016

10.25 FormofTermsandConditionsMemorandumforDirectorswithrespecttooptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly18,2017andbeforeJuly16,2019).*

8-K 10.1 July20,2017





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10.26 FormofStockOptionAgreementforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly16,2019).*

10-Q 10.6 October3,2019

10.27 FormofRestrictedStockUnitAgreementforDirectorswithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterJuly16,2019).*

10-Q 10.7 October3,2019

10.28 RulesforCashIncentiveAwardsundertheCompany’sLong-TermStockIncentivePlan.*

8-K 10.1 March29,2018

10.29 TheCompany’sAnnualManagementIncentivePlan,amendedandrestatedasofJuly27,2012.*

8-K 10.1 July31,2012

10.30 TheCompany’sNon-QualifiedSavingsPlan.* 8-K 10.2 October4,2018

10.31 SupplementalExecutiveRetirementPlanoftheCompany.* 10-K 10.14 June1,1999

10.32 FirstAmendmenttotheCompany’sSupplementalExecutiveRetirementPlan.* 10-Q 10 July15,1999

10.33 SecondAmendmenttotheCompany’sSupplementalExecutiveRetirementPlan.*

10-K 10.20 May29,2001

10.34 ThirdAmendmenttotheCompany’sSupplementalExecutiveRetirementPlan.*

8-K 99.2 April13,2005

10.35 2005SupplementalExecutiveRetirementPlanoftheCompany.* 8-K 99.3 April13,2005

10.36 FirstAmendmenttotheCompany’s2005SupplementalExecutiveRetirementPlan.*

10-Q 10.7 July10,2007

10.37 SecondAmendmenttotheCompany’s2005SupplementalExecutiveRetirementPlan.*

10-Q 10.2 January9,2014

10.38 ThirdAmendmenttotheCompany’s2005SupplementalExecutiveRetirementPlan.*

8-K 10.1 October4,2018

10.39 FormofExecutiveEmploymentAgreementbetweentheCompanyanditsChairmanoftheBoardanditsViceChairmanoftheBoard.*

8-K 99.1 May21,2008

10.40 FormofExecutiveEmploymentAgreementbetweentheCompanyandcertainOtherExecutiveOfficers(includingF.PaulHetterich).*

8-K 99.2 May21,2008

10.41 ExecutiveEmploymentAgreementmadeasofJune17,2013,betweentheCompanyandThomasM.Kane.*

10-Q 10.9 October10,2013

10.42 ExecutiveEmploymentAgreementmadeasofJanuary26,2015,betweentheCompanyandWilliamA.Newlands.*

10-K 10.57 April28,2015

10.43 ExecutiveEmploymentAgreementmadeasofJune3,2019,betweentheCompanyandRobertL.Hanson.*

10-Q 10.6 June28,2019

10.44 FormofExecutiveEmploymentAgreementbetweentheCompanyandcertainofitsOtherExecutiveOfficers(includingJamesO.Bourdeau,GarthHankinson,MichaelMcGrew,MallikaMonteiro,andJamesA.Sabia,Jr.).*

10-Q 10.3 June29,2017

10.45 DescriptionofCompensationArrangements,asofJanuary6,2021andbeforeJuly20,2021,forNon-ManagementDirectors.*

10-Q 10.1 January8,2020

10.46 DescriptionofCompensationArrangements,asofJuly20,2021,forNon-ManagementDirectors.*

10-Q 10.1 October6,2021

10.47 AmendedandRestatedSub-licenseAgreement,datedasofJune7,2013,betweenMarcasModelo,S.deR.L.deC.V.andConstellationBeersLtd.+

8-K 10.2 June11,2013

21.1 SubsidiariesoftheCompany(filedherewith).

23.1 ConsentofKPMGLLP(filedherewith).

31.1 CertificationofChiefExecutiveOfficerpursuanttoRule13a-14(a)orRule15d-14(a)oftheExchangeAct(filedherewith).

















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http://www.sec.gov/Archives/edgar/data/16918/000001691801500005/ex10-20.txt

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31.2 CertificationofChiefFinancialOfficerpursuanttoRule13a-14(a)orRule15d-14(a)oftheExchangeAct(filedherewith).

32.1 CertificationofChiefExecutiveOfficerpursuantto18U.S.C.Section1350(furnishedherewith).

32.2 CertificationofChiefFinancialOfficerpursuantto18U.S.C.Section1350(furnishedherewith).

99.1 TheCompany’s1989EmployeeStockPurchasePlan(amendedandrestatedasofJuly24,2013).*

8-K 99.1 July26,2013

99.2 FirstAmendment,datedandeffectiveApril25,2016,totheCompany’s1989EmployeeStockPurchasePlan.*

8-K 99.1 April28,2016

99.3 ConsentAgreement,datedApril18,2019,byandbetweenCBGHoldingsLLCandCanopy(Form6-KfiledbyCanopy).

6-K 99.4 April30,2019

99.4 SecondAmendedandRestatedInvestorRightsAgreement,datedApril18,2019,byandamongGreenstarCanadaInvestmentLimitedPartnership,CBGHoldingsLLCandCanopy(Form6-KfiledbyCanopy).

6-K 99.3 April30,2019

99.5 ProposaldatedApril2,2022. 8-K 99.2 April4,2022

101.INS XBRLInstanceDocument-theinstancedocumentdoesnotappearintheInteractiveDataFilebecauseitsXBRLtagsareembeddedwithintheInlineXBRLdocument(filedherewith).

101.SCH XBRLTaxonomyExtensionSchemaDocument(filedherewith).

101.CAL XBRLTaxonomyExtensionCalculationLinkbaseDocument(filedherewith).

101.DEF XBRLTaxonomyExtensionDefinitionLinkbaseDocument(filedherewith).

101.LAB XBRLTaxonomyExtensionLabelsLinkbaseDocument(filedherewith).

101.PRE XBRLTaxonomyExtensionPresentationLinkbaseDocument(filedherewith).

104 CoverPageInteractiveDataFile(formattedasInlineXBRLandcontainedinExhibit101).



* Designatesmanagementcontractorcompensatoryplanorarrangement.

† Theexhibits,disclosureschedules,andotherschedules,asapplicable,havebeenomittedpursuanttoItem601(a)(5)ofRegulationS-K.TheCompanyagreestofurnishsupplementallyacopyofsuchexhibits,disclosureschedules,andotherschedules,asapplicable,oranysectionthereof,totheSECuponrequest.

‡ PortionsofthisexhibitareredactedpursuanttoItem601(b)(2)(ii)ofRegulationS-K.

+ PortionsofthisexhibitwereredactedpursuanttoaconfidentialtreatmentrequestfiledwithandapprovedbytheSECpursuanttoRule24b-2undertheExchangeAct.

TheCompanyagrees,uponrequestoftheSEC,tofurnishcopiesofeachinstrumentthatdefinestherightsofholdersoflong-termdebtoftheCompanyoritssubsidiariesthatisnotfiledherewithpursuanttoItem601(b)(4)(iii)(A)becausethetotalamountoflong-termdebtauthorizedundersuchinstrumentdoesnotexceed10%ofthetotalassetsoftheCompanyanditssubsidiariesonaconsolidatedbasis.













SIGNATURES

PursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.

CONSTELLATIONBRANDS,INC.

By: /s/WilliamA.Newlands

April21,2022WilliamA.NewlandsPresidentandChiefExecutiveOfficer

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowingpersonsonbehalfoftheregistrantandinthecapacitiesandonthedatesindicated.

/s/WilliamA.Newlands /s/GarthHankinsonApril21,2022 April21,2022

WilliamA.Newlands,Director,PresidentandChiefExecutiveOfficer(principalexecutiveofficer)

GarthHankinson,ExecutiveVicePresidentandChiefFinancialOfficer(principalfinancialofficerandprincipalaccountingofficer)

/s/RobertSands /s/RichardSandsApril21,2022 April21,2022RobertSands,DirectorandExecutiveChairmanoftheBoard

RichardSands,DirectorandExecutiveViceChairmanoftheBoard

/s/ChristyClark /s/JenniferM.DanielsApril21,2022 April21,2022ChristyClark,Director JenniferM.Daniels,Director

/s/NicholasI.Fink /s/JeremyS.G.Fowden

April21,2022 April21,2022

NicholasFink,Director JeremyS.G.Fowden,Director


/s/ErnestoM.Hernández /s/SusanSomersilleJohnsonApril21,2022 April21,2022ErnestoM.Hernández,Director SusanSomersilleJohnson,Director

/s/JamesA.LockeIII /s/JoseManuelMaderoGarzaApril21,2022 April21,2022JamesA.LockeIII,Director JoseManuelMaderoGarza,Director

/s/DanielJ.McCarthy /s/JudyA.SchmelingApril21,2022 April21,2022DanielJ.McCarthy,Director JudyA.Schmeling,Director


*$100 invested on 2/28/17 in stock or index, including reinvestment of dividends.Fiscal year ending February 28 or February 29, as applicable.

Copyright © 2022 Standard & Poor’s, a division of S&P Global. All rights reserved.

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

2/17 2/18 2/19 2/20 2/21 2/22

Constellation Brands, Inc. Class A 100.00 137.11 109.23 113.02 142.71 145.61 Constellation Brands, Inc. Class B 100.00 139.96 110.89 110.22 148.07 146.95 S&P 500 Index 100.00 117.10 122.58 132.62 174.12 202.66 S&P 500 Food & Beverages Index 100.00 99.50 96.31 103.85 111.75 139.26

2 /17 2 /18 2 /19 2 /21 2 /222 /20

$200

$225

$175

$125

$75

$150

$100

$50


PERFORMANCE GRAPH

Set forth below is a line graph comparing, for the fi scal years ended the last day of February 2018, 2019, 2020, 2021, and 2022, the cumulative total stockholder return of the Company’s Class A Common Stock and Class B Common Stock with the cumulative total return of the S&P 500 Index and the S&P 500 Food & Beverages Index. The graph assumes the investment of $100.00 on February 28, 2017 in the Company’s Class A Common Stock, the Company’s Class B Common Stock, the S&P 500 Index, and the S&P 500 Food & Beverages Index, and also assumes the reinvestment of all dividends.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*Among Constellation Brands, Inc., the S&P 500 Index, and the S&P 500 Food & Beverages Index

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

For the Years Ended

2/28/22 2/28/21 Change

Consolidatednet sales $8,820.7 $8,614.9 2%

Less: divestitures - (642.3)

Consolidatedorganic net sales $8,820.7 $7,972.6 11%

Beer net sales $6,751.6 $6,074.6 11%

Wine and Spirits net sales $2,069.1 $2,540.3 -19%

Less: divestitures - (642.3)

Wine and Spiritsorganic net sales $2,069.1 $1,898.0 9%

For periods of divestiture, we defi ne organic net sales as prior period reported net sales less net sales of products of divested businesses reported for the prior period, as appropriate. We provide organic net sales because we use this information in monitoring and evaluating the underlying business trends of our core operations. In addition, we believe this information provides investors valuable insight on underlying business trends and results in order to evaluate year-over-year fi nancial performance.

DIRECTORS AND EXECUTIVE OFFICERS

(As of May 13, 2022)

DIRECTORS

William A. NewlandsPresident and Chief Executive Offi cer,Constellation Brands, Inc.

Robert Sands Executive Chairman,Constellation Brands, Inc.

Richard Sands Executive Vice Chairman, Constellation Brands, Inc.

Christy Clark (1)

Senior Advisor, Bennett Jones LLP

Jennifer M. Daniels (2)

Chief Legal Offi cer and Secretary,Colgate-Palmolive Company

Nicholas I. Fink (2)

Chief Executive Offi cer of Fortune BrandsHome & Security, Inc.

Jeremy S. G. Fowden (1) (3)

Chairman of the Board, Primo Water Corporation

Ernesto M. Hernández (1)

Former President and Managing Director, General Motors de Mexico, S. de R.L. de C.V.

Susan Somersille Johnson (1)

Chief Marketing Offi cer of Prudential Financial, Inc.

James A. Locke III (3)

Senior Counsel, Nixon Peabody LLP

Jose Manuel Madero Garza (2)

Independent Business Consultant andFormer Chief Executive Offi cer, Grupo Bepensa

Daniel J. McCarthy (2)

Former President and Chief Executive Offi cer, Frontier Communications Corporation

Judy A. Schmeling (2) (3)

Former Chief Operating Offi cer of HSN, Inc. and Former President of HSN’s Cornerstone Brands

EXECUTIVE OFFICERS

William A. NewlandsPresident and Chief Executive Offi cer,Constellation Brands, Inc.

Robert Sands Executive Chairman,Constellation Brands, Inc.

Richard Sands Executive Vice Chairman, Constellation Brands, Inc.

James O. BourdeauExecutive Vice President and Chief Legal Offi cer, Constellation Brands, Inc.

K. Kristann CareyExecutive Vice President and Chief Human Resources Offi cer, Constellation Brands, Inc.

Garth HankinsonExecutive Vice President and Chief Financial Offi cer, Constellation Brands, Inc.

Robert HansonExecutive Vice President and President,Wine & Spirits Division, Constellation Brands, Inc.

Michael McGrewExecutive Vice President and Chief Communications, Corporate Social Responsibility, and Diversity Offi cer,Constellation Brands, Inc.

Mallika MonteiroExecutive Vice President andChief Growth, Strategy, and Digital Offi cer,Constellation Brands, Inc.

James A. Sabia, Jr.Executive Vice President and President,Beer Division, Constellation Brands, Inc.

(1) Member of Human Resources Committee(2) Member of Audit Committee(3) Member of Corporate Governance and Responsibility Committee

Additional biographical information about the Directors and Executive Offi cers is included in our Proxy Statement relating toour 2022 Virtual Annual Meeting and our Annual Report on Form 10-K, respectively, and is posted on ir.cbrands.com.


INVESTOR INFORMATION

HEADQUARTERS

Constellation Brands, Inc. 207 High Point Drive, Building 100 Victor, NY 14564

585-678-7100 888-724-2169

ir.cbrands.com

Investor Center 888-922-2150

STOCK TRANSFER AGENT AND REGISTRAR

Stockholder Inquiries 1-877-810-2237

Stockholder Portal www.shareholder.broadridge.com/stz

Broadridge Corporate Issuer Solutions 1-877-830-4936 – Phone 1-303-974-3789 – International 1-215-553-5402 – Fax M-F, 9 a.m. to 6 p.m. ET

Regular Delivery Broadridge Corporate Issuer Solutions P.O. Box 1342 Brentwood, NY 11717

Overnight Delivery Broadridge Corporate Issuer Solutions ATTN: IWS 1155 Long Island Avenue Edgewood, NY 11717

COMMON STOCK TRADING

The Company’s Class A and Class B Common Stock trade on the New York Stock Exchange (NYSE) under the ticker symbols STZ and STZ.B, respectively. There is no public market for the Company’s Class 1 Common Stock. As of May 13, 2022, there were 477 and 91 holders of record of Class A and Class B Common Stock, respectively, and 18 holders of record of Class 1 Common Stock.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

The statements set forth in this report, which are not historical facts, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, the forward-looking statements. For risk factors associated with the Company and its business, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2022.

COPIES OF FORM 10-K

A copy of our Annual Report on Form 10-K for the fiscal year ended February 28, 2022, filed with the Securities and Exchange Commission, will be furnished without charge to any stockholder upon written request to Constellation Brands, Inc.’s Investor Relations department at our corporate headquarters address provided on this page. Alternatively, a copy is available on our website at ir.cbrands.com, as well as on the Securities and Exchange Commission’s website at www.sec.gov.

VIRTUAL ANNUAL STOCKHOLDERS’ MEETING

The 2022 Virtual Annual Meeting is scheduled to be held at 11:00 a.m., Eastern Daylight Time, on Tuesday, July 19, 2022, and is expected to be conducted exclusively via online broadcast. Stockholders will be able to attend the 2022 Virtual Annual Meeting, vote shares, and submit questions during the meeting via the Internet by visiting www.virtualshareholdermeeting.com/STZ2022.

Website references in this annual report are provided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or available through, the websites. Therefore, such information should not be considered part of this annual report.


FISCAL YEAR 2022 ANNUAL REPORT - AnnualReports.com

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