STZ 10-K Fiscal year ended Feb. 29, 2024

Portions of the Proxy Statement of Constellation Brands, Inc. to be issued for the 2024 Annual Meeting of Stockholders are incorporated by reference in Part III to the extent described therein.

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Description of business

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

Effective May 31, 2023, we changed our internal management financial reporting to consist of two business divisions: (i) Beer and (ii) Wine and Spirits and we now report our operating results in three segments: (i) Beer, (ii) Wine and Spirits, and (iii) Corporate Operations and Other following the removal of the Canopy operating segment. All financial information for the years ended February 28, 2023, and February 28, 2022, has been restated to conform to the new segment presentation. For additional information, refer to Note 22.

Basis of presentation

Principles of consolidation

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

Equity method investments

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

Management’s use of estimates

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

Summary of significant accounting policies

Revenue recognition

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

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As noted, the majority of our revenues are generated from the domestic sale of beer, wine, and spirits to wholesale distributors in the U.S. Our other revenue generating activities include the export of certain of our products to select international markets, as well as the sale of our products through state alcohol beverage control agencies, on-premise, retail locations in certain markets, and 3-tier eCommerce and DTC channels. We have evaluated these other revenue generating activities under the disaggregation disclosure criteria and concluded that they are immaterial for separate disclosure. See Note 22 for disclosure of net sales by product type.

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

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

Cost of product sold

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

Selling, general, and administrative expenses

The types of costs included in selling, general, and administrative expenses consist predominately of advertising and non-manufacturing administrative and overhead costs. We expense advertising (hereafter referred to as “marketing”) costs as incurred, shown, or distributed. Marketing expense for the years ended February 29, 2024, February 28, 2023, and February 28, 2022, was $ 853.5 million, $ 860.8 million, and $ 826.4 million, respectively.

Foreign currency translation

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

Cash and cash equivalents

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

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Inventories

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

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

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

Property, plant, and equipment

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

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

Depreciation

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

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

Derivative instruments

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

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

Changes in fair values for derivative instruments not designated in a hedge accounting relationship are recognized directly in our results of operations each period and on the same financial statement line item as the hedged item. For purposes of measuring segment operating performance, the net gain (loss) from the changes in

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fair value of our undesignated commodity derivative contracts, prior to settlement, is reported outside of segment operating results until such time that the underlying exposure is recognized in the segment operating results. Upon settlement, the net gain (loss) from the changes in fair value of the undesignated commodity derivative contracts is reported in the appropriate operating segment, allowing our operating segment results to reflect the economic effects of the commodity derivative contracts without the resulting unrealized mark to fair value volatility.

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

Fair value of financial instruments

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

Goodwill and other intangible assets

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

Income taxes

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

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

Leases

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

The right-of-use asset and lease liability are initially measured at the present value of future lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our

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secured incremental borrowing rate. The incremental borrowing rates are determined using a portfolio approach based on publicly available information in connection with our unsecured borrowing rates. We elected to recognize expenses for leases with a term of 12 months or less on a straight-line basis over the lease term and not to recognize these short-term leases on the balance sheet.

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

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

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

Indemnification liabilities

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

Stock-based employee compensation

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

Net income (loss) per common share attributable to CBI

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

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

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For the years ended February 28, 2023, and February 28, 2022, we used the two-class method for the computation and presentation of net income (loss) per common share. The two-class method is an earnings allocation formula that calculates basic and diluted net income (loss) per common share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Under the two-class method, Class A Stock was assumed to receive a 10 % greater participation in undistributed earnings (losses) than Class B Stock, in accordance with the respective minimum dividend rights of each class of stock.

Net income (loss) per common share – basic excluded the effect of common stock equivalents and was computed using the two-class method. Net income (loss) per common share – diluted for Class A Stock reflected the potential dilution that could result if securities or other contracts to issue common stock were exercised or converted into common stock. Net income (loss) per common share – diluted for Class A Stock was computed using the more dilutive of the if-converted or two-class method. For the years ended February 28, 2023, and February 28, 2022, net income (loss) per common share – diluted for Class A Stock was computed using the two-class method, until such conversion took place pursuant to the Reclassification. Net income (loss) per common share – diluted for Class B Stock was computed using the two-class method and did not assume conversion of Class B Stock into shares of Class A Stock.

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

Recent accounting pronouncements

Segment reporting

In November 2023, the FASB issued a standard requiring disclosures, on an annual and interim basis, of significant segment expenses and other segment items that are regularly provided to the CODM as well as the title and position of the CODM. We are required to adopt these disclosures for our annual period ending February 28, 2025, and interim periods beginning March 1, 2025, with early adoption permitted. The amendments in this standard will be applied retrospectively to all prior periods presented in the financial statements. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition.

Income taxes

In December 2023, the FASB issued a standard aimed at improving tax disclosure requirements, primarily through enhanced disclosures related to the income tax rate reconciliation and income taxes paid. We are required to adopt these disclosures for our annual period ending February 28, 2026, with early adoption permitted and may be applied retrospectively. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition.

Climate

In March 2024, the SEC adopted final rules to require disclosures about certain climate-related information in registration statements and annual reports. In April 2024, the SEC issued an order to stay the rules pending the completion of judicial review of multiple petitions challenging the rules. The rules will require disclosure of, among other things, material climate-related risks, how the board of directors and management oversee and manage such risks, and the actual and potential material impacts of such risks on us. The rules also require disclosure about material climate-related targets and goals, Scope 1 and Scope 2 GHG emissions, and the financial impacts of severe weather events and other natural conditions. If the rules are ultimately implemented, their adoption will be phased and, accordingly, we are required to begin certain disclosures for our annual period ending February 28, 2026. These rules will be applied prospectively. We are currently assessing the impact of these rules on our SEC filings.

Acquisitions

Austin Cocktails

In April 2022, we acquired the remaining 73 % ownership interest in Austin Cocktails, which included a portfolio of small batch, RTD cocktails. This transaction primarily included the acquisition of goodwill and a

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trademark. In addition, the purchase price for Austin Cocktails includes an earn-out over five years based on performance. The results of operations of Austin Cocktails are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition.

Lingua Franca

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

My Favorite Neighbor

In November 2021, we acquired the remaining 65 % ownership interest in My Favorite Neighbor, a super-luxury, DTC focused wine business as well as certain wholesale distributed brands. This transaction primarily included the acquisition of goodwill, trademarks, inventory, and property, plant, and equipment. In addition, the My Favorite Neighbor transaction includes an earn-out over 10 years based on performance, with a 50 % minimum guarantee due at the end of the earn-out period. The results of operations of My Favorite Neighbor are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition.

We recognized a gain of $ 13.5 million for the year ended February 28, 2022, related to the remeasurement of our previously held 35 % equity interest in My Favorite Neighbor to the acquisition-date fair value. This gain is included in selling, general, and administrative expenses within our consolidated results of operations.

Divestitures

Craft Beer Divestitures

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

Wine Divestiture

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

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

(1) Includes certain contract termination costs.

(2) Included in selling, general, and administrative expenses within our consolidated results of operations.

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The components of inventories are as follows:

			February 29, 2024						February 28, 2023
(in millions)
Raw materials and supplies			$	254.1					$	245.5
In-process inventories			1,096.0						967.8
Finished case goods			728.2						685.4
			$	2,078.3					$	1,898.7

We evaluated the carrying value of certain inventories and recognized the following in cost of product sold within our consolidated results of operations:

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022 (1)
(in millions)
Loss on inventory write-down			$	19.4					$	23.1					$	87.7

(1) We recognized a loss predominantly from excess inventory of hard seltzers, within the Beer segment, largely resulting from a slowdown in the overall category which occurred in early Fiscal 2022.

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

			February 29, 2024						February 28, 2023
(in millions)
Value added taxes receivable			$	183.4					$	100.5
Derivative assets			162.5						136.2
Prepaid taxes			130.9						129.5
Income taxes receivable			64.3						73.7
Assets held for sale (1)			8.5						7.7
Other			116.4						114.7
			$	666.0					$	562.3

(1) Assets held for sale balance includes current assets related to the Mexicali Brewery. See Notes 5 and 7 for further discussion.

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

			February 29, 2024 (1)						February 28, 2023 (1) (2)
(in millions)
Land and land improvements			$	473.6					$	477.2
Vineyards			264.6						243.5
Buildings and improvements			1,941.6						1,800.4
Machinery and equipment			5,649.0						5,277.9
Motor vehicles			162.9						186.1
Construction in progress (3) (4)			2,296.6						1,272.0
			10,788.3						9,257.1
Less – Accumulated depreciation			( 2,733.1 )						( 2,391.9 )
			$	8,055.2					$	6,865.2

(1) The property, plant, and equipment balance excludes Mexicali Brewery amounts reclassified to assets held for sale. See “Mexicali Brewery” below for further discussion.

(2) The property, plant, and equipment balance is net of a $ 51.6 million impairment of long-lived assets, including the Daleville Facility. See “Daleville Facility” below and Note 7 for further discussion.

(3) We capitalized $ 63.7 million, $ 36.5 million, and $ 25.3 million of interest costs for the years ended February 29, 2024, February 28, 2023, and February 28, 2022, respectively, primarily due to the Mexico Beer Projects.

(4) The design and construction process for the Veracruz Brewery commenced in Fiscal 2023 and is ongoing.

Mexicali Brewery

We are pursuing the sale of the remaining assets at the canceled Mexicali Brewery after exploring various options; however, we may not be successful in completing any such sale or obtaining other forms of recovery. The carrying value of assets held for sale are included in prepaid expenses and other and other assets within our consolidated balance sheets. See Note 7 for further discussion.

Daleville Facility

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

Lodi Distribution Center

In December 2021, we purchased a previously leased wine and spirits distribution facility located in Lodi, California.

Overview

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

The estimated fair values of our derivative instruments change with fluctuations in currency rates, commodity prices, and/or interest rates and are expected to offset changes in the values of the underlying exposures. Our derivative instruments are held solely to manage our exposures to the aforementioned market

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risks as part of our normal business operations. We follow strict policies to manage these risks and do not enter into derivative instruments for trading or speculative purposes.

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

			February 29, 2024						February 28, 2023
(in millions)
Derivative instruments designated as hedging instruments
Foreign currency contracts			$	2,045.6					$	1,969.5
Derivative instruments not designated as hedging instruments
Foreign currency contracts			$	735.9					$	831.7
Commodity derivative contracts			$	397.5					$	416.5

Cash flow hedges

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

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

When we determine that a derivative instrument which qualified for hedge accounting treatment has ceased to be highly effective as a hedge, we discontinue hedge accounting prospectively. In the event the relationship is no longer effective, we recognize the change in the fair value of the hedging derivative instrument from the date the hedging derivative instrument became no longer effective immediately in our results of operations. We also discontinue hedge accounting prospectively when (i) a derivative expires or is sold, terminated, or exercised; (ii) it is no longer probable that the forecasted transaction will occur; or (iii) we determine that designating the derivative as a hedging instrument is no longer appropriate. When we discontinue hedge accounting prospectively, but the original forecasted transaction continues to be probable of occurring, the existing gain or loss of the derivative instrument remains in AOCI and is reclassified into earnings (losses) when the forecasted transaction occurs. When it becomes probable that the forecasted transaction will not occur, any remaining gain or loss in AOCI is recognized immediately in our results of operations.

We expect $ 132.8 million of net gains, net of income tax effect, to be reclassified from AOCI to our results of operations within the next 12 months.

Undesignated hedges

Certain of our derivative instruments do not qualify for hedge accounting treatment; for others, we choose not to maintain the required documentation to apply hedge accounting treatment. These undesignated instruments are primarily used to economically hedge our exposure to fluctuations in the value of foreign currency denominated receivables and payables; foreign currency investments, primarily consisting of loans to subsidiaries and foreign-denominated investments, and cash flows related primarily to the repatriation of those loans or investments; and commodity prices, including aluminum, corn, diesel fuel, and natural gas prices. We primarily use

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foreign currency forward and option contracts, generally less than 12 months in duration, and commodity swap contracts, generally less than 36 months in duration, with a maximum maturity of four years , to hedge some of these risks. In addition, from time to time, we utilize interest rate swap contracts, generally less than six months in duration, to economically hedge our exposure to changes in interest rates associated with the financing of significant investments and acquisitions. Our derivative policy permits the use of undesignated derivatives as approved by senior management.

Credit risk

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

In addition, our derivative instruments are not subject to credit rating contingencies or collateral requirements. As of February 29, 2024, the estimated fair value of derivative instruments in a net liability position due to counterparties was $ 3.2 million. If we were required to settle the net liability position under these derivative instruments on February 29, 2024, we would have had sufficient available liquidity on hand to satisfy this obligation.

Results of period derivative activity

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

Assets															Liabilities
			February 29, 2024						February 28, 2023									February 29, 2024						February 28, 2023
(in millions)
Derivative instruments designated as hedging instruments
Foreign currency contracts:
Prepaid expenses and other			$	154.1					$	109.1					Other accrued expenses and liabilities			$	3.5					$	9.8
Other assets			$	153.5					$	134.5					Deferred income taxes and other liabilities			$	0.2					$	3.5
Derivative instruments not designated as hedging instruments
Foreign currency contracts:
Prepaid expenses and other			$	3.6					$	5.9					Other accrued expenses and liabilities			$	1.7					$	3.9
Commodity derivative contracts:
Prepaid expenses and other			$	4.8					$	21.2					Other accrued expenses and liabilities			$	27.9					$	19.5
Other assets			$	1.4					$	4.6					Deferred income taxes and other liabilities			$	8.1					$	8.3

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

Derivative Instruments in Designated Cash Flow Hedging Relationships						Net Gain (Loss) Recognized in OCI						Location of Net Gain (Loss) Reclassified from AOCI to Income (Loss)						Net Gain (Loss) Reclassified from AOCI to Income (Loss)
(in millions)
For the Year Ended February 29, 2024
Foreign currency contracts						$	205.7					Sales						$	( 0.1 )
												Cost of product sold						137.3
Pre-issuance hedge contracts						( 0.1 )						Interest expense						( 1.6 )
						$	205.6											$	135.6
For the Year Ended February 28, 2023
Foreign currency contracts						$	221.5					Sales						$	( 1.3 )
												Cost of product sold						50.8
Pre-issuance hedge contracts						15.7						Interest expense						( 0.9 )
						$	237.2											$	48.6
For the Year Ended February 28, 2022
Foreign currency contracts						$	6.4					Sales						$	( 1.1 )
												Cost of product sold						37.3
Pre-issuance hedge contracts						( 0.3 )						Interest expense						( 2.3 )
						$	6.1											$	33.9

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

Derivative Instruments Not Designated as Hedging Instruments												Location of Net Gain (Loss) Recognized in Income (Loss)						Net Gain (Loss) Recognized in Income (Loss)
(in millions)
For the Year Ended February 29, 2024
Commodity derivative contracts												Cost of product sold						$	( 44.2 )
Foreign currency contracts												Selling, general, and administrative expenses						14.6
																		$	( 29.6 )
For the Year Ended February 28, 2023
Commodity derivative contracts												Cost of product sold						$	( 15.0 )
Foreign currency contracts												Selling, general, and administrative expenses						( 19.8 )
																		$	( 34.8 )
For the Year Ended February 28, 2022
Commodity derivative contracts												Cost of product sold						$	109.9
Foreign currency contracts												Selling, general, and administrative expenses						( 16.7 )
																		$	93.2

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

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

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

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

Fair value methodology

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

Foreign currency and commodity derivative contracts

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

Canopy investment

On November 1, 2023, the initial tranche of the November 2018 Canopy Warrants expired in accordance with its terms. The remaining tranches of the November 2018 Canopy Warrants were conditioned on the exercise, in full, of the expired warrants. As such, there are no longer any outstanding November 2018 Canopy Warrants. In April 2023, we extended the maturity of the remaining C$ 100.0 million principal amount of our Canopy Debt Securities by exchanging them for a C$ 100.0 million principal amount, 2023 Canopy Promissory Note bearing a 4.25 % interest rate. As such, our investment in Canopy as of February 29, 2024 was comprised of (i) the Canopy Equity Method Investment and (ii) the 2023 Canopy Promissory Note. The 2023 Canopy Promissory Note was measured at fair value. Effective as of May 31, 2023, we determined that this instrument did not have future economic value given the substantial doubt about Canopy’s ability to continue as a going concern, as disclosed by Canopy, prior to the maturity of the note. Accordingly, the fair value of the remaining balance for this instrument was determined to be zero. This reduction in fair value is included in income (loss) from unconsolidated investments within our consolidated results of operations for the year ended February 29, 2024. In April 2024, we exchanged the 2023 Canopy Promissory Note for Exchangeable Shares. See Note 10 for further discussion.

Short-term borrowings

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

Long-term debt

The fair value of our fixed interest rate long-term debt is estimated by discounting cash flows using interest rates currently available for debt with similar terms and maturities (Level 2 fair value measurement). As of February 29, 2024, the carrying amount of long-term debt, including the current portion, was $ 11,637.9 million, compared with an estimated fair value of $ 10,775.8 million. As of February 28, 2023, the carrying amount of long-term debt, including the current portion, was $ 11,296.0 million, compared with an estimated fair value of $ 10,236.0 million.

The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value as of February 29, 2024, and February 28, 2023, due to the relatively short maturity of these instruments.

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Recurring basis measurements

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

			Fair Value Measurements Using
			Quoted Prices in Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
(in millions)
February 29, 2024
Assets:
Foreign currency contracts			$	—					$	311.2					$	—					$	311.2
Commodity derivative contracts			$	—					$	6.2					$	—					$	6.2
Liabilities:
Foreign currency contracts			$	—					$	5.4					$	—					$	5.4
Commodity derivative contracts			$	—					$	36.0					$	—					$	36.0
February 28, 2023
Assets:
Foreign currency contracts			$	—					$	249.5					$	—					$	249.5
Commodity derivative contracts			$	—					$	25.8					$	—					$	25.8
November 2018 Canopy Warrants			$	—					$	0.2					$	—					$	0.2
Canopy Debt Securities			$	—					$	69.6					$	—					$	69.6
Liabilities:
Foreign currency contracts			$	—					$	17.2					$	—					$	17.2
Commodity derivative contracts			$	—					$	27.8					$	—					$	27.8

Nonrecurring basis measurements

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

			Fair Value Measurements Using
			Quoted Prices in Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total Losses
(in millions)
For the Year Ended February 29, 2024
Equity method investments			$	56.1					$	0.6					$	0.6					$	136.1
For the Year Ended February 28, 2023
Equity method investments			$	398.4					$	—					$	—					$	1,060.3
Long-lived assets			—						—						6.3						53.5
Trademarks			—						—						—						13.0
			$	398.4					$	—					$	6.3					$	1,126.8
For the Year Ended February 28, 2022
Long-lived assets			$	—					$	—					$	20.0					$	665.9

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Equity method investments

As of November 30, 2023, we evaluated a certain equity method investment, made through our corporate venture capital function within the Corporate Operations and Other segment, and determined there was an other-than-temporary impairment due to business underperformance. The estimated fair value was based largely on the cash flows expected to be generated by the investment using unobservable data points.

As of August 31, 2023, we evaluated certain equity method investments, made through our corporate venture capital function, and determined there were other-than-temporary impairments due to business underperformance. Investments with a carrying value of $ 14.9 million were written down to an estimated fair value of $ 2.6 million, resulting in an impairment of $ 12.3 million. These investments are part of the Corporate Operations and Other segment. This loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for the year ended February 29, 2024. The estimated fair value was based largely on observable prices for similar assets. In October 2023, we exited one of these equity method investments in exchange for a note receivable.

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

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

Long-lived assets

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

In April 2021, our Board of Directors authorized management to sell or abandon the Mexicali Brewery. Subsequently, management determined that we will be unable to use or repurpose certain assets at the Mexicali

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Brewery. Accordingly, for the first quarter of Fiscal 2022, long-lived assets with a carrying value of $ 685.9 million were written down to their estimated fair value of $ 20.0 million, resulting in an impairment of $ 665.9 million. This impairment was included in impairment of brewery construction in progress within our consolidated results of operations for the year ended February 28, 2022. Our estimate of fair value was determined based on the expected salvage value of the assets. The Mexicali Brewery is a component of the Beer segment.

Trademarks

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

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

			Beer						Wine and Spirits												Consolidated
(in millions)
Balance, February 28, 2022			$	5,120.7					$	2,741.7											$	7,862.4
Purchase accounting allocations (1)			—						26.3												26.3
Wine Divestiture			—						( 24.5 )												( 24.5 )
Foreign currency translation adjustments			68.2						( 7.0 )												61.2
Balance, February 28, 2023			5,188.9						2,736.5												7,925.4
Purchase accounting allocations (2)			—						6.5												6.5
Foreign currency translation adjustments			49.3						( 0.9 )												48.4
Balance, February 29, 2024			$	5,238.2					$	2,742.1											$	7,980.3

(1) Purchase accounting allocations associated with the acquisitions of Austin Cocktails, Lingua Franca, and My Favorite Neighbor.

(2) Preliminary purchase accounting allocations associated with the acquisition of Domaine Curry.

If broader industry and market conditions decline and/or our expectations of future performance as reflected in our current strategic operating plans are not fully realized, a future impairment of Wine and Spirits goodwill is reasonably possible.

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The major components of intangible assets are as follows:

			February 29, 2024												February 28, 2023
			Gross Carrying Amount						Net Carrying Amount						Gross Carrying Amount						Net Carrying Amount
(in millions)
Amortizable intangible assets
Customer relationships			$	85.3					$	16.2					$	85.7					$	17.7
Other			20.8						0.3						20.8						—
Total			$	106.1					16.5						$	106.5					17.7
Nonamortizable intangible assets
Trademarks									2,715.2												2,710.4
Total intangible assets									$	2,731.7											$	2,728.1

We did not incur costs to renew or extend the term of acquired intangible assets for the years ended February 29, 2024, February 28, 2023, and February 28, 2022. Net carrying amount represents the gross carrying value net of accumulated amortization. Amortization expense for intangible assets was $ 1.3 million, $ 3.2 million, and $ 5.1 million for the years ended February 29, 2024, February 28, 2023, and February 28, 2022, respectively.

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

(in millions)
Fiscal 2025			$	1.4
Fiscal 2026			$	1.3
Fiscal 2027			$	1.3
Fiscal 2028			$	1.3
Fiscal 2029			$	1.3
Thereafter			$	9.9

Our equity method investments are as follows:

			February 29, 2024												February 28, 2023
			Carrying Value						Ownership Percentage						Carrying Value						Ownership Percentage
(in millions)
Canopy Equity Method Investment (1)			$	42.5					20.7		%				$	485.8					34.7		%
Other equity method investments			128.1						20 %- 50 %						177.5						20 %- 50 %
			$	170.6											$	663.3

(1) The fair value based on the closing price of the underlying equity security as of February 29, 2024, and February 28, 2023, was $ 56.1 million and $ 398.4 million, respectively.

Canopy Equity Method Investment

We have an investment in Canopy, a provider of medical and adult-use cannabis products. The Canopy Equity Method Investment consisted of 17.1 million Canopy common shares as of February 29, 2024. See “Conversion of Canopy common stock ownership and exchange of investment into Exchangeable Shares” below for additional information. Equity in earnings (losses) from the Canopy Equity Method Investment and related

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activities is determined by recording the effect of basis differences. Amounts included in our consolidated results of operations for each period are as follows:

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Equity in earnings (losses) from Canopy and related activities			$	( 321.3 )					$	( 949.3 )					$	( 73.6 )

The following tables present summarized financial information for Canopy prepared in accordance with U.S. GAAP. We recognize our equity in earnings (losses) for Canopy on a two-month lag. Accordingly, we recognized our share of Canopy’s earnings (losses) for the periods (i) January through December 2023 in our year ended February 29, 2024 results, (ii) January through December 2022 in our year ended February 28, 2023 results, and (iii) January through December 2021 in our year ended February 28, 2022 results. The year ended February 28, 2023, included a significant goodwill impairment related to Canopy’s operations. The amounts shown represent 100% of Canopy’s financial position and results of operations for the respective periods.

			February 29, 2024						February 28, 2023
(in millions)
Current assets			$	300.0					$	865.4
Noncurrent assets			$	726.8					$	1,362.9
Current liabilities			$	167.1					$	500.8
Noncurrent liabilities			$	448.3					$	665.2
Noncontrolling interests			$	0.1					$	2.1

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Net sales			$	254.9					$	339.3					$	444.3
Gross profit (loss)			$	( 22.4 )					$	( 125.7 )					$	( 18.6 )
Net income (loss)			$	( 915.7 )					$	( 2,466.0 )					$	( 274.3 )
Net income (loss) attributable to Canopy			$	( 897.5 )					$	( 2,447.9 )					$	328.7

Conversion of Canopy common stock ownership and exchange of investment into Exchangeable Shares

In April 2024, the Canopy Amendment was approved by Canopy’s shareholders. In connection with the Canopy Transaction, Canopy amended its share capital to (i) create Exchangeable Shares and (ii) restate the rights of Canopy common shares to provide for their conversion into Exchangeable Shares through the Canopy Amendment. We subsequently elected to convert our 17.1 million Canopy common shares into Exchangeable Shares on a one-for-one basis. Additionally, we exchanged our 2023 Canopy Promissory Note for 9.1 million Exchangeable Shares and forgave all accrued but unpaid interest together with the remaining principal amount of the note.

Following the completion of the Canopy Transaction, the transactions included in the Consent Agreement, our election to convert our Canopy common shares into Exchangeable Shares, and the exchange of our 2023 Canopy Promissory Note for Exchangeable Shares:

• we only have an interest in our 26.3 million Exchangeable Shares;

• we terminated all legacy agreements and commercial arrangements between ourselves and Canopy, including the investor rights agreement but excluding the Consent Agreement, certain termination agreements, and the exchange agreement with respect to the 2023 Canopy Promissory Note;

• we have no further governance rights in relation to Canopy, including rights to nominate members to the board of directors of Canopy, or consulting rights related to certain transactions;

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• all of our nominees resigned from the board of directors of Canopy; and

• we expect to recognize a gain based on the fair value of Exchangeable Shares on the date of the conversion and exchange. Future impairments, if any, will also be reported in income (loss) from unconsolidated investments within our consolidated results.

Other equity method investment

Corporate investment

In February 2022, we sold an investment made through our corporate venture capital function. We recognized a $ 51.0 million gain for the year ended February 28, 2022, related to the sale of our previously held equity interest in this investment. This gain is included in income (loss) from unconsolidated investments within our consolidated results of operations. Additionally, we recognized our share of their equity in earnings (losses) in our consolidated financial statements in the Corporate Operations and Other segment up to the date we sold our ownership interest.

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

			February 29, 2024						February 28, 2023
(in millions)
Salaries, commissions, and payroll benefits and withholdings			$	197.8					$	231.8
Promotions and advertising			146.7						162.6
Accrued interest			110.7						99.3
Operating lease liability			89.6						81.4
Accrued excise taxes			51.0						46.8
Deferred revenue			34.6						34.0
Derivative liabilities			33.1						33.2
Accrued insurance, property, and other taxes			28.4						31.6
Other			144.5						131.3
			$	836.4					$	852.0

Borrowings consist of the following:

			February 29, 2024																		February 28, 2023
			Current						Long-term						Total						Total
(in millions)
Short-term borrowings
Commercial paper			$	241.4																	$	1,165.3
			$	241.4																	$	1,165.3
Long-term debt
Term loan credit facilities			$	—					$	—					$	—					$	799.2
Senior notes			949.3						10,670.8						11,620.1						10,470.6
Other			7.5						10.3						17.8						26.2
			$	956.8					$	10,681.1					$	11,637.9					$	11,296.0

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Bank facilities

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

Senior credit facility

In April 2022, the Company, CB International, the Administrative Agent, and certain other lenders entered into the 2022 Restatement Agreement that amended and restated our then-existing senior credit facility (as amended and restated by the 2022 Restatement Agreement, the 2022 Credit Agreement). The principal changes effected by the 2022 Restatement Agreement were the:

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

• refinement of certain negative covenants; and

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

April 2022 Term Credit Agreement

In June 2021, the Company and the Administrative Agent and Lender amended our then-existing term credit agreement (as amended, the June 2021 Term Credit Agreement). The April 2022 Term Credit Agreement provided for a $ 491.3 million five-year term loan facility. The principal change effected by the amendment was a reduction in LIBOR margin from 0.88 % to 0.63 % from June 1, 2021 through December 31, 2021.

In April 2022, the Company, the Administrative Agent, and the Lender amended the June 2021 Term Credit Agreement (as amended, the April 2022 Term Credit Agreement). The principal changes effected by the amendment were the refinement of certain negative covenants and replacement of LIBOR rates with rates based on term SOFR. In August 2023, we repaid the outstanding five-year term loan facility borrowings under the April 2022 Term Credit Agreement with proceeds from commercial paper borrowings.

August 2022 Term Credit Agreement

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

General

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

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

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

			Outstanding borrowings						Interest rate						SOFR margin						Outstanding letters of credit						Remaining borrowing capacity (1)
(in millions)
February 29, 2024
Revolving credit facility (2) (3)			$	—					—		%				—		%				$	11.5					$	1,997.0
February 28, 2023
Revolving credit facility (2) (3)			$	—					—		%				—		%				$	12.0					$	1,068.5

(1) Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2022 Credit Agreement and outstanding borrowings under our commercial paper program of $ 241.5 million and $ 1,169.5 million (excluding unamortized discount) for the years ended February 29, 2024, and February 28, 2023, respectively (see “Commercial paper program” below).

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

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

Commercial paper program

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

			February 29, 2024						February 28, 2023
(in millions)
Outstanding borrowings (1)			$	241.4					$	1,165.3
Weighted average annual interest rate			5.7		%				5.3		%
Weighted average remaining term			4 days						25 days

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

Pre-issuance hedge contracts

We enter into cash flow designated Pre-issuance hedge contracts to hedge the interest rate volatility on future debt issuances. Upon the termination and settlement of these contracts, the unrealized gain (loss) is recognized in AOCI within our consolidated balance sheets and amortized to interest expense within our consolidated results of operations. We had no Pre-issuance hedge contracts outstanding as of February 29, 2024, or February 28, 2023.

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Senior notes

Our outstanding senior notes are as follows:

									Date of																		Outstanding Balance (1)
			Principal						Issuance						Maturity						Interest Payments						February 29, 2024						February 28, 2023
(in millions)
4.75 % Senior Notes (2) (3)			$	400.0					Nov 2014						Nov 2024						May/Nov						$	399.5					$	398.9
4.75 % Senior Notes (2) (3)			$	400.0					Dec 2015						Dec 2025						Jun/Dec						398.8						398.2
3.70 % Senior Notes (2) (4)			$	600.0					Dec 2016						Dec 2026						Jun/Dec						598.3						597.7
3.50 % Senior Notes (2) (4)			$	500.0					May 2017						May 2027						May/Nov						498.2						497.7
4.50 % Senior Notes (2) (4)			$	500.0					May 2017						May 2047						May/Nov						493.9						493.6
3.60 % Senior Notes (2) (4)			$	700.0					Feb 2018						Feb 2028						Feb/Aug						697.1						696.4
4.10 % Senior Notes (2) (4)			$	600.0					Feb 2018						Feb 2048						Feb/Aug						593.2						592.9
4.40 % Senior Notes (2) (4)			$	500.0					Oct 2018						Nov 2025						May/Nov						498.8						498.0
4.65 % Senior Notes (2) (4)			$	500.0					Oct 2018						Nov 2028						May/Nov						497.3						496.8
5.25 % Senior Notes (2) (4)			$	500.0					Oct 2018						Nov 2048						May/Nov						493.8						493.6
3.15 % Senior Notes (2) (4)			$	800.0					Jul 2019						Aug 2029						Feb/Aug						796.1						795.4
2.875 % Senior Notes (2) (4)			$	600.0					Apr 2020						May 2030						May/Nov						596.2						595.5
3.75 % Senior Notes (2) (4)			$	600.0					Apr 2020						May 2050						May/Nov						590.6						590.3
2.25 % Senior Notes (2) (4)			$	1,000.0					Jul 2021						Aug 2031						Feb/Aug						990.5						989.2
3.60 % Senior Notes (2) (5)			$	550.0					May 2022						May 2024						May/Nov						549.8						548.5
4.35 % Senior Notes (2) (4)			$	600.0					May 2022						May 2027						May/Nov						597.8						597.1
4.75 % Senior Notes (2) (4)			$	700.0					May 2022						May 2032						May/Nov						694.4						693.7
5.00 % Senior Notes (2) (6)			$	500.0					Feb 2023						Feb 2026						Feb/Aug						497.9						497.1
4.90 % Senior Notes (2) (4)			$	750.0					May 2023						May 2033						May/Nov						740.7						—
4.80 % Senior Notes (2) (4)			$	400.0					Jan 2024						Jan 2029						Jan/Jul						397.2						—
																											$	11,620.1					$	10,470.6

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

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

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

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

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

(5) Redeemable, in whole or in part, at our option at any time at a redemption price equal to 100 % of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the applicable treasury rate plus 15 basis points.

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

Indentures

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

Subsidiary credit facilities

General

We have additional credit arrangements totaling $ 67.7 million and $ 73.5 million as of February 29, 2024, and February 28, 2023, respectively. As of February 29, 2024, and February 28, 2023, amounts outstanding under these arrangements were $ 17.8 million and $ 26.2 million, respectively, the majority of which is classified as long-term as of the respective date. These arrangements primarily support the financing needs of our domestic and foreign subsidiary operations. Interest rates and other terms of these borrowings vary from country to country, depending on local market conditions.

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Debt payments

As of February 29, 2024, the required principal repayments under long-term debt obligations (excluding unamortized debt issuance costs and unamortized discounts of $ 56.4 million and $ 23.5 million, respectively) for each of the five succeeding fiscal years and thereafter are as follows:

(in millions)
Fiscal 2025			$	957.5
Fiscal 2026			1,404.9
Fiscal 2027			603.8
Fiscal 2028			1,801.5
Fiscal 2029			900.0
Thereafter			6,050.1
			$	11,717.8

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Domestic			$	( 140.2 )					$	( 1,441.6 )					$	( 1,334.4 )
Foreign			2,362.0						1,825.2						1,644.8
			$	2,221.8					$	383.6					$	310.4

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Current
Federal			$	152.6					$	( 54.3 )					$	229.3
State			16.4						15.5						31.4
Foreign			139.7						253.1						( 36.1 )
Total current			308.7						214.3						224.6
Deferred
Federal			27.7						82.6						( 10.1 )
State			( 19.0 )						29.9						( 5.5 )
Foreign			139.2						95.3						100.4
Total deferred			147.9						207.8						84.8
Income tax provision (benefit)			$	456.6					$	422.1					$	309.4

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

			For the Years Ended
			February 29, 2024												February 28, 2023												February 28, 2022
			Amount						% of Pretax Income (Loss)						Amount						% of Pretax Income (Loss)						Amount						% of Pretax Income (Loss)
(in millions, except % of pretax income (loss) data)
Income tax provision (benefit) at statutory rate			$	466.6					21.0		%				$	80.6					21.0		%				$	65.2					21.0		%
State and local income taxes, net of federal income tax benefit (1)			35.9						1.6		%				3.4						0.9		%				( 77.8 )						( 25.0		%)
Net income tax benefit from the realization of tax losses related to a prior period divestiture			—						—		%				( 166.4 )						( 43.4		%)				—						—		%
Net income tax benefit from a tax entity classification change			( 31.2 )						( 1.4		%)				—						—		%				—						—		%
Earnings taxed at other than U.S. statutory rate (2)			( 75.9 )						( 3.4		%)				( 49.2 )						( 12.8		%)				( 33.2 )						( 10.7		%)
Net income tax provision (benefit) from legislative changes (3)			( 9.6 )						( 0.4		%)				10.9						2.8		%				11.9						3.8		%
Excess tax benefits from stock-based compensation awards (4)			( 8.0 )						( 0.4		%)				( 5.2 )						( 1.4		%)				( 48.0 )						( 15.5		%)
Net income tax provision (benefit) recognized for adjustment to valuation allowance (5)			86.2						3.9		%				557.6						145.4		%				385.5						124.2		%
Miscellaneous items, net			( 7.4 )						( 0.3		%)				( 9.6 )						( 2.5		%)				5.8						1.9		%
Income tax provision (benefit) at effective rate			$	456.6					20.6		%				$	422.1					110.0		%				$	309.4					99.7		%

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

(2) Consists of the following (i) difference between the U.S. statutory rate and local jurisdiction tax rates, (ii) the provision for incremental U.S. taxes on earnings of certain foreign subsidiaries offset by foreign tax credits, (iii) the non-U.S. portion of tax provision (benefit) recorded on the unrealized net gain (loss) from the changes in fair value of our investment in Canopy, and (iv) the non-U.S. portion of tax benefits recorded on the Canopy equity in earnings (losses) and related activities.

(3) The years ended February 29, 2024, February 28, 2023, and February 28, 2022, represent a net income tax provision resulting from the remeasurement of our deferred tax assets in connection with a legislative update in Switzerland.

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

(5) Consists primarily of valuation allowances related to our investment in Canopy.

Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income.

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

			February 29, 2024						February 28, 2023
(in millions)
Deferred tax assets
Intangible assets			$	1,872.3					$	2,021.5
Loss carryforwards			719.4						360.4
Stock-based compensation			20.1						19.7
Inventory			23.8						26.0
Lease liabilities			117.5						79.3
Investments in unconsolidated investees			635.2						901.8
Other accruals			238.2						175.0
Gross deferred tax assets			3,626.5						3,583.7
Valuation allowances			( 1,140.4 )						( 1,091.4 )
Deferred tax assets, net			2,486.1						2,492.3
Deferred tax liabilities
Intangible assets			( 644.0 )						( 555.3 )
Property, plant, and equipment			( 161.2 )						( 153.5 )
Right-of-use assets			( 106.5 )						( 67.2 )
Provision for unremitted earnings			( 29.2 )						( 27.2 )
Other accruals			( 81.7 )						( 65.3 )
Total deferred tax liabilities			( 1,022.6 )						( 868.5 )
Deferred tax assets (liabilities), net			$	1,463.5					$	1,623.8

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

As of February 29, 2024, operating loss carryforwards, which are primarily state and foreign, totaling $ 3.7 billion are being carried forward in a number of jurisdictions where we are permitted to use tax operating losses from prior periods to reduce future taxable income. Of these operating loss carryforwards, $ 2.2 billion will expire by fiscal 2031, $ 900.0 million will expire between fiscal 2032 and fiscal 2044, and $ 600.0 million may be carried forward indefinitely in certain jurisdictions. Additionally, as of February 29, 2024, federal capital losses totaling $ 1.6 billion are being carried forward and will expire, if unused, in Fiscal 2029.

We have recognized valuation allowances for operating loss carryforwards and other deferred tax assets when we believe it is more likely than not that these items will not be realized. The increase in our valuation allowances as of February 29, 2024, primarily related to our investment in Canopy.

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Balance as of March 1			$	344.3					$	279.0					$	236.1
Increases as a result of tax positions taken during a prior period			48.1						51.5						16.5
Decreases as a result of tax positions taken during a prior period			( 2.5 )						( 3.4 )						( 0.1 )
Increases as a result of tax positions taken during the current period			31.5						36.8						29.5
Decreases related to settlements with tax authorities			( 2.8 )						( 15.2 )						( 2.6 )
Decreases related to lapse of applicable statute of limitations			( 2.5 )						( 4.4 )						( 0.4 )
Balance as of last day of February			$	416.1					$	344.3					$	279.0

As of February 29, 2024, and February 28, 2023, we had $ 488.5 million and $ 402.3 million, respectively, of unrecognized tax benefit liabilities, including interest and penalties, recognized on our balance sheets. These liabilities are primarily recorded as non-current as of the balance sheet date.

As of February 29, 2024, and February 28, 2023, we had $ 416.1 million and $ 344.3 million, respectively, of unrecognized tax benefit liabilities that, if recognized, would decrease the effective tax rate in the year of resolution.

We file U.S. federal income tax returns and various state, local, and foreign income tax returns. Major tax jurisdictions where we are subject to examination by tax authorities include Canada, Mexico, Switzerland, and the U.S. Various U.S. state and foreign income tax examinations are currently in progress. It is reasonably possible that the liability associated with our unrecognized tax benefit liabilities will increase or decrease within the next 12 months as a result of these examinations or the expiration of statutes of limitation. As of February 29, 2024, we estimate that unrecognized tax benefit liabilities could change by a range of $ 70 million to $ 160 million. With few exceptions, we are no longer subject to U.S. federal, state, local, or foreign income tax examinations for fiscal years prior to February 28, 2017.

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

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

			February 29, 2024						February 28, 2023
(in millions)
Deferred income taxes			$	591.5					$	569.5
Operating lease liability			588.7						417.4
Unrecognized tax benefit liabilities			407.9						401.3
Deferred revenue			80.2						92.0
Income taxes payable			31.2						56.1
Other			104.8						137.3
			$	1,804.3					$	1,673.6

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General

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

Balance sheet location

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

			Balance Sheet Classification			February 29, 2024						February 28, 2023
(in millions)
Assets
Operating lease			Other assets			$	615.3					$	442.5
Finance lease			Property, plant, and equipment			18.2						26.9
Total right-of-use assets						$	633.5					$	469.4
Liabilities
Current:
Operating lease			Other accrued expenses and liabilities			$	89.6					$	81.4
Finance lease			Current maturities of long-term debt			7.5						9.5
Non-current:
Operating lease			Deferred income taxes and other liabilities			588.7						417.4
Finance lease			Long-term debt, less current maturities			10.3						16.7
Total lease liabilities						$	696.1					$	525.0

Lease cost

The components of total lease cost are as follows:

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Operating lease cost			$	98.2					$	96.2					$	89.5
Finance lease cost:
Amortization of right-of-use assets			9.4						9.2						5.8
Interest on lease liabilities			1.4						1.1						0.5
Short-term lease cost			10.5						6.6						8.4
Variable lease cost			182.1						176.5						202.5
Total lease cost			$	301.6					$	289.6					$	306.7

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Lease maturities

As of February 29, 2024, minimum payments due for lease liabilities for each of the five succeeding fiscal years and thereafter are as follows:

			Operating Leases						Finance Leases
(in millions)
Fiscal 2025			$	117.2					$	8.5
Fiscal 2026			99.8						5.6
Fiscal 2027			82.4						4.1
Fiscal 2028			72.6						1.6
Fiscal 2029			70.2						—
Thereafter			406.6						0.1
Total lease payments			848.8						19.9
Less: Interest			( 170.5 )						( 2.1 )
Total lease liabilities			$	678.3					$	17.8

Related party transaction

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

Supplemental information

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	99.5					$	99.7					$	92.7
Operating cash flows from finance leases			$	1.4					$	1.1					$	0.5
Financing cash flows from finance leases			$	9.7					$	8.8					$	5.9
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases			$	268.5					$	63.2					$	93.8
Finance leases			$	—					$	10.1					$	10.5
			February 29, 2024						February 28, 2023						February 28, 2022
Weighted-average remaining lease term: (1)
Operating leases			10.7 years						11.8 years						12.1 years
Finance leases			2.8 years						3.3 years						3.3 years
Weighted-average discount rate:
Operating leases			4.3		%				3.3		%				3.0		%
Finance leases			7.5		%				6.3		%				3.4		%

(1) Our leases have varying terms with remaining lease terms of up to approximately 29 years. Certain of our lease arrangements provide us with the option to extend or to terminate the lease early.

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Purchase commitments and contingencies

We have entered into various long-term contracts in the normal course of business for the purchase of (i) certain inventory components, (ii) property, plant, and equipment and related contractor and manufacturing services, (iii) transportation, marketing, and warehousing and bottling services, (iv) IT and consumer and market insights contracts, and (v) certain energy requirements. As of February 29, 2024, the estimated aggregate minimum purchase commitments under these contracts through the date of the last contractual commitment are as follows:

			Type			Commitment Date			Amount
(in millions)
Raw materials and supplies (1)			Packaging, grapes, and hops			December 2037			$	2,759.4
Capital expenditures (2)			Property, plant, and equipment and contractor and manufacturing services			June 2027			572.5
Contract services			Transportation, marketing, IT, consumer and market insights, warehousing and bottling, and energy contract services			December 2030			518.6
In-process and finished goods inventories			Bulk wine and spirits, finished wine case goods, and related contracts			June 2028			49.1
									$	3,899.6

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

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

Indemnification liabilities

In connection with prior divestitures, we have indemnified respective parties against certain liabilities that may arise subsequent to the divestiture. As of February 29, 2024, and February 28, 2023, these liabilities consist primarily of indemnifications related to certain income tax matters and lease contracts. As of February 29, 2024, and February 28, 2023, the carrying amount of our indemnification liabilities was $ 32.9 million and $ 16.3 million, respectively, and are included in other accrued expenses and liabilities and deferred income taxes and other liabilities. We do not expect to be required to make material payments under the indemnifications and we believe that the likelihood is remote that the indemnifications could have a material adverse effect on our business, liquidity, financial condition, and/or results of operations.

Supply chain finance program

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

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

(in millions)
Balance, February 28, 2022						$	—
Additions						12.6
Settlements (1)						( 8.7 )
Balance, February 28, 2023 (2)						3.9
Additions						53.8
Settlements (1)						( 50.4 )
Balance, February 29, 2024 (2)						$	7.3

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

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

Legal matters

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

Regulatory matters

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

Insurance recoveries

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

Common stock

Effective November 10, 2022, we have one class of common stock with a material number of shares outstanding: Class A Stock. Holders of Class A Stock are entitled to one vote per share. In addition, we have a class of common stock with an immaterial number of shares outstanding: Class 1 Stock. Shares of Class 1 Stock generally have no voting rights. Class 1 Stock shares are convertible into shares of Class A Stock on a one-to-one basis at any time at the option of the holder, provided that the holder immediately sells the Class A Stock acquired upon conversion. Because shares of Class 1 Stock are convertible into shares of Class A Stock, for each share of Class 1 Stock issued, we must reserve one share of Class A Stock for issuance upon the conversion of the share of Class 1 Stock. Holders of Class 1 Stock do not have any preference as to dividends, but may participate in any dividend if and when declared by the Board of Directors. If we pay a cash dividend on Class 1 Stock, each share of Class A Stock will receive an amount at least 10 % greater than the amount of cash dividend per share paid on Class 1 Stock. In addition, the Board of Directors may declare and pay a dividend on Class A Stock without paying a dividend on Class 1 Stock.

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

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

			Common Stock																		Treasury Stock
			Class A						Class B						Class 1						Class A						Class B
Balance at February 28, 2021			187,204,280						28,270,288						612,936						17,070,550						5,005,800
Share repurchases			—						—						—						6,179,015						—
Conversion of shares			59,579						( 57,948 )						( 1,631 )						—						—
Exercise of stock options			—						—						1,637,374						( 287,873 )						—
Employee stock purchases			—						—						—						( 57,738 )						—
Vesting of restricted stock units (1)			—						—						—						( 71,413 )						—
Vesting of performance share units (1)			—						—						—						( 7,934 )						—
Balance at February 28, 2022			187,263,859						28,212,340						2,248,679						22,824,607						5,005,800
Share repurchases			—						—						—						7,086,446						—
Retirement of shares (2)			—						( 5,005,800 )						—						—						( 5,005,800 )
Conversion of shares (3)			25,433,569						( 23,206,540 )						( 2,227,029 )						—						—
Exercise of stock options			—						—						1,055						( 262,970 )						—
Employee stock purchases			—						—						—						( 57,284 )						—
Vesting of restricted stock units (1)			—						—						—						( 76,047 )						—
Vesting of performance share units (1)			—						—						—						( 16,326 )						—
Balance at February 28, 2023			212,697,428						—						22,705						29,498,426						—
Share repurchases			—						—						—						1,043,366						—
Conversion of shares			870						—						( 870 )						—						—
Exercise of stock options			—						—						1,826						( 582,476 )						—
Employee stock purchases			—						—						—						( 59,408 )						—
Vesting of restricted stock units (1)			—						—						—						( 76,914 )						—
Vesting of performance share units (1)			—						—						—						( 13,113 )						—
Balance at February 29, 2024			212,698,298						—						23,661						29,809,881						—

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
Restricted Stock Units			40,023						37,494						36,213
Performance Share Units			8,735						4,919						4,565

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

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

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Stock repurchases

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

A summary of share repurchase activity is as follows:

									For the Years Ended
						February 29, 2024												February 28, 2023												February 28, 2022
															Dollar Value						Number of Shares						Dollar Value						Number of Shares						Dollar Value						Number of Shares
(in millions, except share data)
2018 Authorization															$	—					—						$	563.6					2,254,536						$	1,390.5					6,179,015
2021 Authorization															249.7						1,043,366						1,136.6						4,831,910						—						—
2023 Authorization															—						—						—						—						—						—
															$	249.7					1,043,366						$	1,700.2					7,086,446						$	1,390.5					6,179,015

Subsequent to February 29, 2024, we repurchased 424,783 shares of Class A Stock pursuant to the 2021 Authorization at an aggregate cost of $ 110.0 million through open market transactions. As of April 23, 2024, total shares repurchased under our board authorizations are as follows:

									Class A Stock
			Repurchase Authorization						Dollar Value of Shares Repurchased						Number of Shares Repurchased
(in millions, except share data)
2018 Authorization			$	3,000.0					$	3,000.0					13,331,156
2021 Authorization (1)			$	2,000.0					$	1,496.3					6,300,059
2023 Authorization (1)			$	2,000.0					$	—					—

(1) As of April 23, 2024, $ 2,503.7 million remains available for future share repurchases, excluding the impact of Federal excise tax owed pursuant to the IRA.

Reclassification

In November 2022, we completed the Reclassification at the Effective Time as contemplated by the Reclassification Agreement. Pursuant to the Reclassification, each share of Class B Stock issued and outstanding immediately prior to the Effective Time was reclassified, exchanged, and converted into one share of Class A Stock and the right to receive $ 64.64 in cash, without interest. The aggregate cash payment to holders of Class B Stock at the Effective Time was $ 1.5 billion. We utilized our $ 1.0 billion delayed draw three-year term loan facility under the August 2022 Term Credit Agreement and borrowings under our commercial paper program to fund the aggregate cash payment to holders of Class B Stock. The issuance of Class A Stock in connection with the Reclassification was registered under the Securities Act pursuant to the Registration Statement on Form S-4.

Following the completion of the Reclassification, a number of corporate governance changes were implemented, consisting of the following:

• Robert and Richard Sands, who previously served as our Executive Chairman of the Board and Executive Vice Chairman of the Board, respectively, retired from their executive positions;

• Robert Sands and Richard Sands continued serving as non-executive Board members;

• holders of Class A Stock are entitled to elect all directors to be elected at future Annual Meetings of Stockholders; and

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• certain standstill and lock-up provisions for the Sands Family Stockholders; limitations on the Sands Family Stockholders’, directors’, and officers’ ability to pledge our common stock; a near-term rotation of the lead independent director position; and the transition to a majority vote standard for uncontested director elections.

Common stock dividends

In April 2024, our Board of Directors declared a quarterly cash dividend of $ 1.01 per share of Class A Stock and $ 0.91 per share of Class 1 Stock payable in the first quarter of Fiscal 2025.

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Total compensation cost recognized in our results of operations			$	63.6					$	68.5					$	44.9
Income tax benefit related thereto recognized in our results of operations			$	9.5					$	8.0					$	6.6

Long-Term Stock Incentive Plan

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

The exercise price, vesting period, and term of nonqualified stock options granted are established by the committee administering the plan (the “Committee”). The exercise price of any nonqualified stock option may not be less than the fair market value of our Class A Stock on the date of grant. Nonqualified stock options generally vest and become exercisable over a three-year period from the date of grant and expire as established by the Committee, but not later than 10 years after the grant date. Prior to April 2023, nonqualified stock options generally vested and became exercisable over a four-year period from the date of grant.

Grants of restricted stock units, performance share units, and other stock-based awards may contain such vesting periods, terms, conditions, and other requirements as the Committee may establish. Restricted stock unit awards are based on service and generally vest over one to three years from the date of grant. Prior to April 2023, restricted stock unit awards generally vested over one to four years from the date of grant. Performance share unit awards are based on service and the satisfaction of certain performance conditions, and vest over a required employee service period, generally from one to three years from the date of grant, which closely matches the performance period. The performance conditions include the achievement of specified financial or operational performance metrics, or market conditions which require the achievement of specified levels of stockholder return relative to other companies as defined in the applicable performance share unit agreement. The actual number of shares to be awarded upon vesting of a performance share unit award will range between 0 % and 200 % of the target award, based upon the measure of performance as certified by the Committee.

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

			For the Years Ended
			February 29, 2024												February 28, 2023												February 28, 2022
			Number of Options						Weighted Average Exercise Price						Number of Options						Weighted Average Exercise Price						Number of Options						Weighted Average Exercise Price
Outstanding as of March 1			3,067,962						$	194.47					2,906,342						$	178.62					4,399,807						$	131.89
Granted			151,848						$	226.76					479,758						$	254.00					513,829						$	237.85
Exercised			( 584,302 )						$	160.41					( 264,025 )						$	123.55					( 1,925,247 )						$	86.92
Forfeited			( 55,351 )						$	225.04					( 51,102 )						$	218.68					( 75,917 )						$	192.96
Expired			( 15,869 )						$	196.57					( 3,011 )						$	189.32					( 6,130 )						$	226.46
Outstanding as of last day of February			2,564,288						$	203.47					3,067,962						$	194.47					2,906,342						$	178.62
Exercisable			1,702,984						$	193.68					1,747,884						$	179.30					1,410,693						$	161.53

As of February 29, 2024, the aggregate intrinsic value of our options outstanding and exercisable was $ 118.1 million and $ 94.2 million, respectively. In addition, the weighted average remaining contractual life for our options outstanding and exercisable was 6.0 years and 5.2 years, respectively.

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Fair value of stock options vested			$	27.3					$	26.9					$	23.9
Intrinsic value of stock options exercised			$	54.6					$	32.6					$	269.1
Tax benefit realized from stock options exercised			$	10.4					$	7.4					$	62.9

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
Grant-date fair value			$	64.75					$	73.16					$	59.27
Expected life (1)			5.8 years						6.3 years						6.3 years
Expected volatility (2)			28.8		%				27.6		%				27.8		%
Risk-free interest rate (3)			3.6		%				3.0		%				1.2		%
Expected dividend yield (4)			1.6		%				1.3		%				1.3		%

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

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

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

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

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

			For the Years Ended
			February 29, 2024												February 28, 2023												February 28, 2022
			Number						Weighted Average Grant-Date Fair Value						Number						Weighted Average Grant-Date Fair Value						Number						Weighted Average Grant-Date Fair Value
Restricted Stock Units
Outstanding balance as of March 1, Nonvested			291,859						$	223.75					291,171						$	202.68					311,358						$	183.74
Granted			192,300						$	227.30					128,743						$	252.53					113,686						$	236.19
Vested			( 116,937 )						$	213.83					( 113,541 )						$	202.64					( 107,626 )						$	184.81
Forfeited			( 31,608 )						$	228.90					( 14,514 )						$	221.33					( 26,247 )						$	196.41
Outstanding balance as of last day of February, Nonvested			335,614						$	228.75					291,859						$	223.75					291,171						$	202.68
Performance Share Units
Outstanding balance as of March 1, Nonvested			85,649						$	302.06					86,641						$	268.12					226,463						$	223.85
Granted			67,734						$	238.01					32,976						$	395.55					27,029						$	318.71
Performance achievement (1)			( 10,725 )						$	202.53					( 7,415 )						$	316.81					( 148,495 )						$	210.36
Vested			( 21,848 )						$	202.53					( 21,245 )						$	298.25					( 12,499 )						$	279.67
Forfeited			( 10,749 )						$	295.07					( 5,308 )						$	323.44					( 5,857 )						$	229.81
Outstanding balance as of last day of February, Nonvested			110,061						$	292.78					85,649						$	302.06					86,641						$	268.12

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

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Restricted stock units			$	27.0					$	27.9					$	25.8
Performance share units			$	5.0					$	5.2					$	3.0

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
Grant-date fair value			$	251.63					$	395.47					$	318.71
Grant-date price			$	224.38					$	254.21					$	238.31
Performance period			2.9 years						2.9 years						2.9 years
Expected volatility (1)			23.8		%				32.1		%				35.0		%
Risk-free interest rate (2)			3.8		%				2.8		%				0.3		%
Expected dividend yield (3)			0.0		%				0.0		%				0.0		%

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

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

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

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan under which 9,000,000 shares of Class A Stock may be issued. Under the terms of the plan, eligible employees may purchase shares of our Class A Stock through payroll deductions. The purchase price is the lower of 85 % of the fair market value of the stock on the first or last day of the purchase period. For the years ended February 29, 2024, February 28, 2023, and February 28, 2022, employees purchased 59,408 shares, 57,284 shares, and 57,738 shares, respectively, under this plan.

Other

As of February 29, 2024, there was $ 69.9 million of total unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under our stock-based employee compensation plans. This cost is expected to be recognized in our results of operations over a weighted-average period of 1.8 years. With respect to the issuance of shares under any of our stock-based compensation plans, we have the option to issue authorized but unissued shares or treasury shares.

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

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

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									February 28, 2023												February 28, 2022
									Class A Stock (1)						Class B Stock (2)						Class A Stock (1)						Class B Stock
(in millions, except per share data)
Net income (loss) attributable to CBI allocated – basic and diluted									$	( 24.0 )					$	( 47.0 )					$	( 35.8 )					$	( 4.6 )
Weighted average common shares outstanding – basic and diluted (2)									169.337						23.206						167.431						23.225
Net income (loss) per common share attributable to CBI – basic and diluted									$	( 0.11 )					$	( 2.02 )					$	( 0.22 )					$	( 0.20 )

(1)			We have excluded the following weighted average common shares outstanding from the calculation of diluted net income (loss) per common share, as the effect of including these would have been anti-dilutive, in millions:
									For the Years Ended
									February 28, 2023						February 28, 2022
						Class B Stock			16.149						23.225
						Stock-based awards, primarily stock options			0.713						1.566
(2)			Net income (loss) per common share attributable to CBI for Class B Stock was determined through November 10, 2022, the date the Reclassification was completed.

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

			Before Tax Amount						Tax (Expense) Benefit						Net of Tax Amount
(in millions)
For the Year Ended February 28, 2022
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)			$	( 38.9 )					$	—					$	( 38.9 )
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			( 38.9 )						—						( 38.9 )
Unrealized gain (loss) on cash flow hedges:
Net derivative gain (loss)			12.6						( 7.5 )						5.1
Amounts reclassified			( 34.0 )						2.9						( 31.1 )
Net gain (loss) recognized in other comprehensive income (loss)			( 21.4 )						( 4.6 )						( 26.0 )
Pension/postretirement adjustments:
Net actuarial gain (loss)			2.3						( 0.6 )						1.7
Amounts reclassified			( 2.1 )						0.6						( 1.5 )
Net gain (loss) recognized in other comprehensive income (loss)			0.2						—						0.2
Share of OCI of equity method investments:
Net gain (loss)			( 16.2 )						3.7						( 12.5 )
Amounts reclassified			—						—						—
Net gain (loss) recognized in other comprehensive income (loss)			( 16.2 )						3.7						( 12.5 )
Other comprehensive income (loss) attributable to CBI			$	( 76.3 )					$	( 0.9 )					$	( 77.2 )

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

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

			Foreign Currency Translation Adjustments						Unrealized Net Gain (Loss) on Derivative Instruments												Pension/ Postretirement Adjustments						Share of OCI of Equity Method Investments						Accumulated Other Comprehensive Income (Loss)
(in millions)
Balance, February 28, 2023			$	( 176.4 )					$	198.5											$	( 3.9 )					$	10.3					$	28.5
Other comprehensive income (loss):
Other comprehensive income (loss) before reclassification adjustments			279.3						195.7												1.3						—						476.3
Amounts reclassified from accumulated other comprehensive income (loss)			—						( 128.0 )												—						—						( 128.0 )
Other comprehensive income (loss)			279.3						67.7												1.3						—						348.3
Balance, February 29, 2024			$	102.9					$	266.2											$	( 2.6 )					$	10.3					$	376.8

Net sales to our 10 largest customers represented approximately 58 %, 55 %, and 55 % of our net sales for the years ended February 29, 2024, February 28, 2023, and February 28, 2022, respectively, and are expected to continue to represent a significant portion of our revenues. Net sales to customers which individually amount to 10% or more of our net sales, and the associated amounts receivable from these customers as a percentage of our accounts receivable, are as follows:

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
Reyes Beer Division entities
Net sales			25.1		%				22.7		%				21.0		%
Accounts receivable			17.7		%				15.6		%				11.1		%
Southern Glazer’s Wine and Spirits
Net sales			11.7		%				13.0		%				14.4		%
Accounts receivable			28.1		%				24.0		%				35.2		%

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

Prior to May 31, 2023, our internal management financial reporting consisted of three business divisions: (i) Beer, (ii) Wine and Spirits, and (iii) Canopy and we reported our operating results in four segments: (i) Beer, (ii) Wine and Spirits, (iii) Corporate Operations and Other, and (iv) Canopy. Due to several factors occurring as of May 31, 2023, including those which led to the additional Canopy Equity Method Investment impairment combined with Canopy’s financial results no longer being provided to, or reviewed by, our CODM, and no longer being used to make strategic decisions, allocate resources, or assess performance, we have removed Canopy as a reportable segment. Accordingly, effective May 31, 2023, o ur internal management financial

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reporting consists of two business divisions: (i) Beer and (ii) Wine and Spirits and we report our operating results in three segments: (i) Beer, (ii) Wine and Spirits, and (iii) Corporate Operations and Other.

In the Beer segment, our portfolio consists of high-end imported beer brands and ABAs. We have an exclusive perpetual brand license to produce our Mexican beer portfolio and to import, market, and sell such portfolio in the U.S. In the Wine and Spirits segment, we sell a portfolio that includes higher-end wine brands complemented by certain higher-end spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of corporate development, corporate finance, corporate strategy, executive management, growth, human resources, internal audit, investor relations, IT, legal, and public relations, as well as our Canopy investment and investments made through our corporate venture capital function . All costs included in the Corporate Operations and Other segment are general costs that are applicable to the consolidated group and are, therefore, not allocated to the other reportable segments. All costs reported within the Corporate Operations and Other segment are not included in our CODM’s evaluation of the operating income (loss) performance of the other reportable segments. The business segments reflect how our operations are managed, how resources are allocated, how operating performance is evaluated by senior management, and the structure of our internal financial reporting. Long-lived tangible assets and total asset information by segment is not provided to, or reviewed by, our CODM as it is not used to make strategic decisions, allocate resources, or assess performance.

In addition, management excludes Comparable Adjustments from its evaluation of the results of each operating segment as these Comparable Adjustments are not reflective of core operations of the segments. Segment operating performance and the incentive compensation of segment management are evaluated based on core segment operating income (loss) which does not include the impact of these Comparable Adjustments.

We evaluate segment operating performance based on operating income (loss) of the respective business units. Comparable Adjustments that impacted comparability in our segment operating income (loss) for each period are as follows:

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Cost of product sold
Net gain (loss) on undesignated commodity derivative contracts			$	( 44.2 )					$	( 15.0 )					$	109.9
Flow through of inventory step-up			( 3.6 )						( 4.5 )						( 0.1 )
Settlements of undesignated commodity derivative contracts			15.0						( 76.7 )						( 35.9 )
Strategic business development costs			—						( 1.2 )						( 2.6 )
Net flow through of reserved inventory			—						1.2						12.1
Recovery of (loss on) inventory write-down			—						0.2						( 1.0 )
Comparable Adjustments, Cost of product sold			( 32.8 )						( 96.0 )						82.4

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			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Selling, general, and administrative expenses
Restructuring and other strategic business development costs			( 46.3 )						( 9.9 )						0.6
Transition services agreements activity			( 24.9 )						( 20.5 )						( 19.2 )
Gain (loss) on sale of business			( 15.1 )						15.0						1.7
Transaction, integration, and other acquisition-related costs			( 0.6 )						( 1.4 )						( 1.4 )
Insurance recoveries			55.1						5.2						—
Costs associated with the Reclassification			0.2						( 37.8 )						—
Impairment of assets			—						( 66.5 )						—
Other gains (losses) (1)			( 11.4 )						18.1						( 2.3 )
Comparable Adjustments, Selling, general, and administrative expenses			( 43.0 )						( 97.8 )						( 20.6 )
Impairment of brewery construction in progress			—						—						( 665.9 )
Comparable Adjustments, Operating income (loss)			$	( 75.8 )					$	( 193.8 )					$	( 604.1 )

(1)			Primarily includes the following:
						For the Years Ended
						February 29, 2024						February 28, 2023						February 28, 2022
			(in millions)
			Net loss from changes in the indemnification of liabilities associated with prior period divestitures			$	( 12.7 )					$	—					$	—
			Decreases (increases) in estimated fair values of contingent liabilities associated with prior period acquisitions			$	2.0					$	12.9					$	( 9.6 )
			Gain from remeasurement of previously held equity method investments			$	—					$	5.2					$	13.5
			Property tax settlement			$	—					$	—					$	10.4
			Adjustment to understated excise tax accruals primarily related to a prior period acquisition			$	—					$	—					$	( 13.3 )

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

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Beer
Net sales			$	8,162.6					$	7,465.0					$	6,751.6
Segment operating income (loss)			$	3,094.4					$	2,861.5					$	2,703.3
Capital expenditures			$	947.9					$	813.9					$	849.5
Depreciation and amortization			$	323.9					$	285.4					$	248.7
Wine and Spirits
Net sales:
Wine			$	1,552.1					$	1,722.7					$	1,819.3
Spirits			247.1						264.9						249.8
Net sales			$	1,799.2					$	1,987.6					$	2,069.1

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			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Segment operating income (loss)			$	398.7					$	453.1					$	470.7
Income (loss) from unconsolidated investments			$	38.7					$	41.6					$	34.4
Equity method investments			$	100.8					$	95.4					$	97.2
Capital expenditures			$	185.6					$	151.8					$	154.7
Depreciation and amortization			$	88.8					$	83.2					$	80.7
Corporate Operations and Other
Segment operating income (loss)			$	( 247.6 )					$	( 277.9 )					$	( 238.2 )
Income (loss) from unconsolidated investments			$	( 72.5 )					$	( 170.3 )					$	( 181.7 )
Equity method investments			$	69.8					$	567.9					$	2,591.5
Capital expenditures			$	135.6					$	69.7					$	22.6
Depreciation and amortization			$	16.5					$	18.4					$	13.0
Comparable Adjustments
Operating income (loss)			$	( 75.8 )					$	( 193.8 )					$	( 604.1 )
Income (loss) from unconsolidated investments			$	( 478.0 )					$	( 1,907.7 )					$	( 1,488.2 )
Consolidated
Net sales			$	9,961.8					$	9,452.6					$	8,820.7
Operating income (loss)			$	3,169.7					$	2,842.9					$	2,331.7
Income (loss) from unconsolidated investments (1)			$	( 511.8 )					$	( 2,036.4 )					$	( 1,635.5 )
Equity method investments			$	170.6					$	663.3					$	2,688.7
Capital expenditures			$	1,269.1					$	1,035.4					$	1,026.8
Depreciation and amortization			$	429.2					$	387.0					$	342.4

(1)			Income (loss) from unconsolidated investments consists of:
									For the Years Ended
									February 29, 2024						February 28, 2023						February 28, 2022
			(in millions)
			Impairment of equity method investments						$	( 136.1 )					$	( 1,060.3 )					$	—
			Unrealized net gain (loss) on securities measured at fair value						( 85.4 )						( 45.9 )						( 1,644.7 )
			Equity in earnings (losses) from Canopy and related activities						( 321.3 )						( 949.3 )						( 73.6 )
			Equity in earnings (losses) from other equity method investees and related activities						30.7						19.1						31.8
			Net gain (loss) on sale of unconsolidated investment						0.3						—						51.0
									$	( 511.8 )					$	( 2,036.4 )					$	( 1,635.5 )

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

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Geographic data is as follows:

			For the Years Ended
			February 29, 2024						February 28, 2023						February 28, 2022
(in millions)
Net sales
U.S.			$	9,748.1					$	9,194.5					$	8,585.8
Non-U.S. (primarily Canada and New Zealand)			213.7						258.1						234.9
			$	9,961.8					$	9,452.6					$	8,820.7

			February 29, 2024						February 28, 2023
(in millions)
Long-lived tangible assets
U.S.			$	1,304.6					$	1,150.8
Non-U.S. (primarily Mexico)			6,750.6						5,714.4
			$	8,055.2					$	6,865.2

A summary of selected quarterly financial information is as follows:

			For the Three Months Ended
			February 29, 2024						February 28, 2023
(in millions, except per share data)
Net sales			$	2,139.2					$	1,997.8
Gross profit			$	1,039.2					$	961.2
Net income (loss) attributable to CBI (1)			$	392.4					$	223.0
Net income (loss) per common share attributable to CBI (1) :
Basic – Class A Stock			$	2.15					$	1.21
Diluted – Class A Stock			$	2.14					$	1.21

(1) Includes the following:

						For the Three Months Ended
						February 29, 2024						February 28, 2023
			(in millions, net of income tax effect)
			Insurance recoveries			$	45.8					$	2.3
			Equity in earnings (losses) from Canopy			$	( 31.7 )					$	( 69.5 )

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